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/raid1/www/Hosts/bankrupt/TCR_Public/140912.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, September 12, 2014, Vol. 18, No. 254 Headlines ACOSTA INC: Moody's Rates $800MM Unsecured Notes Caa1 ACQUIRED SALES: Has $63,000 Net Loss in Second Quarter ADELPHIA COMMUNICATIONS: Insurance Row With Quanta Goes to Trial ALLDIGITAL HOLDINGS: Posts $928K Net Loss for June 30 Quarter ALLY FINANCIAL: Presented at Barclays Global Conference AMERICAN INT'L GROUP: Chief Moves Up Exit After Cancer Prognosis AMERICAN INT'L HOLDINGS: Reports $34K Net Loss in June 30 Qtr. AMERICAN OPTICAL: Tiger Group to Conduct Online Auction for Assets AMERICAN SANDS: Incurs $887K Net Loss for Q2 Ended June 30 ARMORWORKS ENTERPRISES: Says Full-Payment Plan Still Possible ARKANOVA ENERGY: Pierre Mulacek Holds 13% Equity Stake ARRAY BIOPHARMA: Posts $85.3-Mil. Net Loss For FY Ended June 30 ASHTEAD GROUP: Moody's Affirms 'Ba2' Corporate Family Rating ASSOCIATED WHOLESALERS: Proposes C&S-Led Auction on Oct. 24 ASSOCIATED WHOLESALERS: Proposes DIP Financing From Banks, C&S ASSOCIATED WHOLESALERS: Taps Epiq as Claims Agent ASPEN GROUP: Leon Cooperman Reports 9.9% Equity Stake ATHERTON FINANCIAL: Files for Chapter 11 in Los Angeles AUXILIUM PHARMACEUTICALS: To Streamline Operations for Growth AVENTINE RENEWABLE: Valero Restarts Plant After 2012 Shutdown BANNERS BROKER: Isle of Man Proceeding Recognized in Canada BAPTIST HOME: $30.3 Million Sale Approved in Philadelphia BAY CLUB PARTNERS: Equity Security Holder Files Objection to Plan BAY CLUB PARTNERS: Court to Confirm Sale-Based Amended Plan BON-TON STORES: Board Declares Cash Dividend of 5 Cents Apiece BONSO ELECTRONICS: Posts $221K Net Loss in FY Ended March 31 BRIGHTSIDE HOSPITALITY: Case Summary & 17 Top Unsecured Creditors BROWNIE'S MARINE: Alexander Purdon Hikes Equity Stake to 7.5% CAR WASH HOLDINGS: Moody's Assigns 'B2' Corporate Family Rating CATHEDRAL CITY: S&P Raises Rating on 2007C Sub. TABs From 'B+' CENTRAL FEDERAL: Stockholders OK Issuance of Shares CENTRAL PLATTE: Fitch Assigns 'BB' Rating on $22.45MM GO Bonds CENTRO DE DIAGNOSTICO: Case Summary & 20 Top Unsecured Creditors CLEAR CHANNEL: Inks $750MM Purchase Agreement with Goldman Sachs CHINA GINSENG: KCG Americas Reports 17.4% Equity Stake CIRCUIT CITY: $8-Mil. Preference Claim Against Sony Not Barred COMJOYFUL INTERNATIONAL: Has $522K Net Loss in June 30 Quarter COMMACK HOSPITALITY: To Make $125K Monthly Payments to Stabilis COMMUNITY MEMORIAL: Trustee Can Sell Cheboyan Property CONFEDERATE MOTORS: Incurs $28K Net Loss for Second Quarter CONNER CREEK: S&P Lowers Rating on 2007 Refunding Bonds to 'B+' CUI GLOBAL: First Eagle Reports 10% Equity Stake DANA BLUMENSAADT: Ohio Bankruptcy Judge Won't Recuse Self DELL INC: Fitch Affirms 'BB-' Issuer Default Rating DPX HOLDINGS: S&P Retains 'B' CCR Following Upsized Term Loan DPX HOLDINGS: Moody's Affirms B2 Rating on $250MM Add-on Sr. Loan E. H. MITCHELL: Files Third Amended Disclosure Statement E. H. MITCHELL: Conversion/Dismissal Hearing Resumes Nov. 6 EAGLE BULK: Incurs $44.66-Mil. Net Loss for Q2 Ended June 30 EFUSION SERVICES: Creditors Seek Dismissal of Chapter 11 Case eRESEARCH TECHNOLOGY: Moody's Alters Ratings Outlook to Negative ERF WIRELESS: Sells Angus Capital Debts to CP US Income and IBC ELBIT IMAGING: Investment Agreement with Insightec Revised ENERPULSE TECHNOLOGIES: Has $1.46-Mil. Net Loss in Second Quarter FHC HEALTH: S&P Affirms 'B' CCR & Rates Acquisition Financing 'B+' FTE NETWORKS: SEC Suspends Trading of Common Stock Temporarily FLEETCOR TECHNOLOGIES: Moody's Assigns 'Ba3' Corp. Family Rating G-MART USA: Case Summary & 20 Largest Unsecured Creditors GLOBAL COMPUTER: Selling Assets to Govt. Agencies for $23.5MM GLOBAL COMPUTER: Lists $13.8MM in Assets, $2.4MM in Debt GUIDED THERAPEUTICS: Gets $200K Investment Commitment From ITEM GLOBALINK LTD: Reports $11,856 Net Loss in June 30 Quarter GLOBEIMMUNE INC: Incurs $5.71-Mil. Net Loss in June 30 Quarter GLYECO INC: Amends 36.3 Million Shares Resale Prospectus GORDON PROPERTIES: Replies to FOA's Motion to Consolidate Case HD SUPPLY: Posts $48 Million Net Income in Second Quarter HIGHWAY 82/FANNIN: 5th Cir. Won't Reinstate Suit Against Lender HRK HOLDINGS: Seeks to Auction Real Estate Property on Oct. 2 HRK H0LDINGS: Maturity of Lines of Credit Extended to Sept. 30 INDIANA TOLL ROAD: Operator Weighs Bankruptcy Filing INFINITY ENERGY: Fires Auditor Over Disagreement INTEGRATED BIOPHARMA: Posts $131,000 Net Income in Fiscal 2014 INTELLICELL BIOSCIENCES: Hikes Authorized Common Shares to 10BB IVEDA SOLUTIONS: Incurs $1.59-Mil. Net Loss in Q2 Ended June 30 JAMES ROTH: Portion of Debt Owed to Ex-Worker Not Dischargeable KID BRANDS: S. Wallis Appeals Denial of Request to Respond to Sale KID BRANDS: Gets Court OK to Employ Lowenstein Sandler as Counsel KID BRANDS: Court Sets Sept. 30 as General Claims Bar Date KID BRANDS: Bonnie Glantz Fatell Named as Privacy Ombudsman LADDER CAPITAL: Fitch Affirms 'BB' Issuer Default Rating LAKELAND DEVELOPMENT: Sept. 16 Hearing on Bonus Payments Approval LAKSHMI HOSPITALITY: Files for Chapter 11 in San Diego LDK SOLAR: Files Schemes of Arrangement in Hong Kong LEHMAN BROTHERS: To Sell $2.5 Billion in Bankruptcy Claims LEHMAN BROTHERS: Seeks Quick Win Over Citi in Interest Fight LEHMAN BROTHERS: Claren Road, Underwriters Lost Dist. Court Appeal LIFE UNIFORM: Can Sell Rights to Class Action Recoveries LMM SPORTS: Case Summary & 8 Largest Unsecured Creditors LONGVIEW POWER: Change in Alvarez and Marsal's Retention Approved LUCAS ENERGY: Posts $1.25-Mil. Net Loss in Second Quarter MACKEYSER HOLDINGS: Selling Flint's Asset to Hearing Management MACKEYSER HOLDINGS: Selling Anderson and Indianapolis Practice MACKEYSER HOLDINGS: Taps Hammond Hanlon as Investment Banker MACKEYSER HOLDINGS: Cooley LLP Approved as Panel's Lead Counsel MACKEYSER HOLDINGS: Klehr Harrison Okayed as Panel's Co-counsel MACKEYSER HOLDINGS: Panel Can Hire Giuliano Miller as Advisors MAINE MONTREAL: Chap. 11 Trustee May Disburse $1.3-Mil. to FRA MISSION NEW ENERGY: High Court Finds Unit Not Liable to Axens MOMENTIVE PERFORMANCE: Bench Ruling on Confirmation of Plan MONROE HOSPITAL: Seeks Oct. 8 Auction Before Prime Sale MONTREAL MAINE: Panel Wants to Participate in Wrongful Death Cases MORNINGSTAR MARKETPLACE: Wants Exclusivity Extended to Feb. 2015 NEPHROS INC: Lambda Investors Reports 66% Equity Stake PLANDAI BIOTECHNOLOGY: Purchase Pact With Lincoln Park Canceled NILE SWIM: Historic Black-Owned Swim Club Seeks Bankruptcy NYDJ APPAREL: Moody's Lowers Corp. Family Rating to 'B3' ODYSSEY PICTURES: Late 10-K Shows $480K Net Loss in Fiscal 2013 OKLAHOMA UNITED METHODIST: Hires Holden & Carr as Special Counsel OKLAHOMA UNITED METHODIST: Taps Walding Patton as Special Counsel PGX HOLDINGS: S&P Assigns 'B' CCR & Rates $280MM Loan 'B+' PGX HOLDINGS: Moody's Assigns B2 CFR & Rates $160MM Loan Caa1 PHILADELPHIA ENTERTAINMENT: Pa. Wants Out of $50MM Adversary Suit PLASTIC2OIL INC: Incurs $1.02-Mil. Net Loss in Second Quarter PLATFORM SPECIALTY: Moody's Maintains B1 Rating for Add-on Debt POSITRON CORP: Joseph Oliverio Appointed as New Chairman PRINCE FREDERICK: Contractor's Equitable Subord. Case Junked PROBE MANUFACTURING: Posts $58.8K Net Loss in 1H of 2014 QUANTUM CORP: Stockholders Elected 9 Directors RADIOSHACK CORP: In Talks to Get Finances, Warns of Bankruptcy RESIDENTIAL CAPITAL: Ally Incurs Cost Over Injunction Violation RESTORGENEX CORP: Files Copy of Presentation Materials with SEC REVEL AC: Settles Ernst & Young Prepetition Fee Complication REVEL AC: Florida Developer Offers $90-Mil. For Casino RICCO INC: Court Green Lights Payment to Clear Mountain Bank ROSETTA GENOMICS: Files Supplement to 6,000 Shares Prospectus SALON MEDIA: Plans to Raise Additional Capital SEARS HOLDINGS: Fitch Lowers Issuer Default Rating to 'CC' SKINNY NUTRITIONAL: Court Confirms Plan of Liquidation SOURCE INTERLINK: Seeks to Estimate WARN Claims at $0 SPINDLE INC: Has $3.3-Mil. Net Loss for Q2 Ended June 30 STAR DYNAMICS: Supplier Wants Equipment Excluded from Sale TACTICAL INTERMEDIATE: Creditors' Panel Rips First DIP Amendment TESORO LOGISTICS: S&P Raises CCR to 'BB'; Outlook Stable THINSPACE TECHNOLOGY: Operating Loss at $1.75MM in 1H of 2014 TOWER AUTOMOTIVE: Moody's Rates New $250MM Unsecured Notes 'B2' TOWER AUTOMOTIVE: S&P Assigns 'B' Rating on $250MM Sr. Notes TREEHOUSE FOODS: Moody's Confirms 'B2' Corporate Family Rating TRUMP ENTERTAINMENT: Cash Collateral Sole Source of Funding TRUMP ENTERTAINMENT: Proposes Prime Clerk as Claims Agent TRUMP ENTERTAINMENT: To Limit Trading to Protect NOLs TRUMP ENTERTAINMENT: Lawyer Sees Possibility of a Shutdown US COAL: Proposes to Pay Bonuses for 3 Key Accounting Managers USA MORTGAGE: Couple Can't Count Investment Loss as Theft VERMILLION INC: Matthew Strobeck Holds 5.7% Equity Stake VIGGLE INC: Presented at Rodman & Renshaw Conference W.R. GRACE: S&P Assigns 'BB+' Rating on $1BB Sr. Unsecured Notes W.R. GRACE: Lukins & Annis to Get 10% Share of Scott's Fee Award W.R. GRACE: Moody's Hikes Rating on $1.5BB 1st Lien Debt to Ba1 WAFERGEN BIO-SYSTEMS: Has $2.1-Mil. Net Loss in June 30 Quarter WATERSTONE AT PANAMA: Seeks Final Decree & Final Accounting Report WESTLAKE VILLAGE: Files for Chapter 11 in California WINDSOR QUALITY: S&P Puts 'B+' Corp. Credit Rating on Watch Pos. XZERES CORP: Appoints Michael Williams as Chief Financial Officer YSC INC: Faces Opposition to Plan Confirmation ZOGENIX INC: Presented at Morgan Stanley Conference * 9th Circ: Ch.13 Debtor Can Recoup Atty. Fees From Stay Appeal * St. Louis Is Seventh Circuit to Allow Chapter 13 Lien Stripping * Lawmakers Seek to Smooth Banks' Path Through Bankruptcy * Quiznos, Cold Stone Creamy Among Brands with High Default Rates * U.S. Risk Council Discusses Oversight of Nonbank Firms * BOOK REVIEW: Risk, Uncertainty and Profit ********* ACOSTA INC: Moody's Rates $800MM Unsecured Notes Caa1 ----------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Acosta, Inc.'s (New) $800 million senior unsecured debt issuance, which is being raised as the second part of a two-part financing for The Carlyle Group's $4.75 billion purchase of Acosta. All other ratings, including the negative outlook, are unchanged. Upon the acquisition's closing, which is expected late this quarter, Moody's will withdraw existing ratings at Acosta, Inc., since all rated debt at this entity will be repaid. Assignments: Issuer: Acosta, Inc. (New) Senior Unsecured Regular Bond/Debenture (Local Currency), Assigned Caa1, LGD5 Ratings Rationale The senior unsecured notes are rated Caa1, LGD5, two notches below the CFR, because of a preponderance of secured debt (B1, LGD3) at the same borrower entity. A holding company above the borrower and domestic subsidiaries below guarantee the senior secured credit facilities, while direct, wholly-owned domestic subsidiaries guarantee the bonds only. Nearly $3.0 billion of bank loan and bond proceeds, supplemented by $1.84 billion of cash equity contributed by The Carlyle Group, are being used to effect Carlyle's acquisition of Acosta. The B2 Corporate Family Rating reflects Acosta's very high pro-forma opening leverage of well above 8.0 times (including Moody's standard adjustments, including the capitalization of operating leases) as a result of the purchase of the sales and marketing agency ("SMA") by another private equity owner. While Moody's recognize that the company has shown the ability to delever when in the hands of past owners, this deal's incremental leverage could constrain Acosta's competitiveness. However, Moody's also recognize that the company has grown steadily, both organically and through acquisitions, over the past several years, including through the most recent recession, positioning it as the largest SMA in an industry characterized by a near-duopolistic structure, significant barriers to entry, good customer retention, and exceptionally steady demand for the underlying consumer packaged goods, whose sales SMAs facilitate. Moody's factors Acosta's operating margins and its high debt-to- EBITDA financial leverage relative to its B2-rated peers in Moody's CFR. Moody's expects that the company, primarily though profit growth (as opposed to debt paydown), will reduce leverage to under 8.0 times, or by a full turn, by the end of fiscal 2015. The measure is comparable to that of Acosta's primary competitor, Advantage Sales and Marketing, which is also weakly positioned in the B2 category. Moody's believe financial leverage could threaten Acosta's ability to take advantage of opportunistic acquisitions or to devote resources to integrate the recently acquired Anderson Daymon Worldwide ("ADW") operations. However, Moody's also recognizes Acosta's good free cash flow generation capability -- Moody's expect at least $100 million, annually, in upcoming years -- and its dominance as the country's largest SMA, a position which bolsters the business's inherent customer stickiness. Moody's expects that Acosta, as demonstrated by prior acquisition successes with experiential-marketing company Mosaic and the approximately two dozen foodservice acquisitions it has made over the past few years, can, with ADW's contribution as well, raise its EBITDA margins by about two hundred basis points. Rating Outlook The negative outlook indicates that Acosta, post the Carlyle acquisition, faces elevated risks, given the strictures posed by higher leverage as the company executes expansion plans and integrates acquisitions. Moody's continues to expect that Acosta will grow revenues in the mid- to high-single-digit percentages, and that its EBITDA margin, boosted by the purchase of ADW, whose margins are considerably stronger than Acosta's, will steadily improve, approximately to levels realized before the Mosaic and foodservice acquisitions. The ADW acquisition, moreover, should bolster Acosta's top line, as ADW's sales growth, which typically mimics Costco's, outpaces Acosta's legacy operations' growth. There is, nevertheless, little room within the current rating to accommodate an even modest level of underperformance relative to Moody's expectations. What Could Change the Rating -- UP The ratings could be upgraded if Acosta can boost its EBITDA margin closer to historical levels on a sustained basis, and use free cash to prepay debt obligations such that debt-to-EBITDA can be brought down and be sustained at about 5.0 times. An upgrade would also require a demonstrated commitment to conservative financial policies with regard to dividends and acquisitions. What Could Change the Rating -- DOWN Moody's could downgrade the ratings if Acosta fails to delever as anticipated over the next twelve to 18 months, if liquidity deteriorates, or if the company stumbles in its integration of ADW. Lower-than-anticipated margin improvements, or revenues failing to grow at historical averages, could also pressure the rating down. A sustained debt-to-EBITDA measure at or above 7.5 times would put downward pressure on the ratings. The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ACQUIRED SALES: Has $63,000 Net Loss in Second Quarter ------------------------------------------------------ Acquired Sales Corp. filed its quarterly report on Form 10-Q, disclosing a net loss of $63,912 for the three months ended June 30, 2014, compared with net income of $1.05 million for the same period last year. The Company's balance sheet at June 30, 2014, showed $1.28 million in total assets, $25,886 in total liabilities and total stockholders' equity of $1.25 million. The Company has a history of recurring losses, which has resulted in an accumulated deficit of $7.16 million as of June 30, 2014. During the six months ended June 30, 2014, the Company recognized a loss of $131,316 from continuing operations. The Company used $126,316 of cash in its operating activities from continuing operations. The sale of Cogility and DSTG eliminated the Company's source of revenue. As a result, there can be no assurance that the Company will not need additional financing and that the Company will be profitable in the future. As a result, there is substantial doubt that the Company will be able to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/wdIZy3 Lake Forest, Illinois-based Acquired Sales Corp. through its wholly owned subsidiary, Cogility Software Corporation, has developed software technology that is solving problems facing the U.S. defense and intelligence communities and many corporations. The software technology allows customers to quickly access and analyze data generated by disparate sources and stored in many different databases. ADELPHIA COMMUNICATIONS: Insurance Row With Quanta Goes to Trial ---------------------------------------------------------------- A federal district court will hold trial on the insurance coverage dispute between Adelphia Communications Corporation and Quanta Specialty Lines Insurance Company. Chief District Judge Marcia S. Krieger granted, in part, and denied, in part, the parties' motion for judgment in the case. The parties seek determination of scope of coverage under the terms of a "claims made" insurance policy. No dispositive motions were filed, and on December 11, 2013, the Court held a Final Pretrial Conference. Based on the proposed Final Pretrial Order and colloquy with the parties, it appeared that no material facts were in dispute and that only legal issues required determination. At the Court's invitation, the parties filed the Joint Motion for Judgment. In her ruling, Judge Krieger held that a timely claim was made against Adelphia during the policy period and that Adelphia timely reported the claim to Quanta during the extended reporting period. To the extent that the parties have unresolved factual issues that require a trial, they parties are directed to begin the Preparation of a Proposed Pretrial Order, that will govern the trial of any remaining issues in this case and shall jointly contact chambers to schedule a continued Pretrial Conference. A copy of the Court's September 5, 2014 Order is available at http://is.gd/NV8RNvfrom Leagle.com. The case is, ADELPHIA COMMUNICATIONS CORPORATION, Plaintiff, v. QUANTA SPECIALTY LINES INSURANCE COMPANY, Defendant, CIVIL ACTION NO. 12-CV-02570-MSK-CBS (D. Colo.). Adelphia Communications Corporation is represented by Stephen D. Bell, Esq., at Dorsey & Whitney, LLP, Thomas Allen Vickers, Esq., at Vanek Vickers & Masini, P.C., and Kerry Jean LeMonte, Esq., at Brownstein Hyatt Farber Schreck, LLP. Quanta Specialty Lines Insurance Company is represented by Kathleen M. Kulasza, Esq., and Susan G. Pray, Esq., at Dewhirst & Dolven, LLC. About Adelphia Communications Based in Coudersport, Pennsylvania, Adelphia Communications Corporation was once the fifth-biggest cable company. Adelphia served customers in 30 states and Puerto Rico, and offered analog and digital video services, Internet access and other advanced services over its broadband networks. Adelphia collapsed in 2002 after disclosing that founder John Rigas and his family owed $2.3 billion in off-balance-sheet debt on bank loans taken jointly with the company. Mr. Rigas was sentenced to 12 years in prison, while son Timothy 15 years. Adelphia Communications and its more than 200 affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 02-41729) on June 25, 2002. Willkie Farr & Gallagher represented the Debtors in their restructuring effort. PricewaterhouseCoopers served as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman LLP and Klee, Tuchin, Bogdanoff & Stern LLP represented the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas-Managed Entities, were entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642) on March 31, 2006. Their cases were jointly administered under Adelphia Communications and its debtor-affiliates' Chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. The Adelphia Recovery Trust, a Delaware Statutory Trust, was formed pursuant to the Plan. The Trust holds certain litigation claims transferred pursuant to the Plan against various third parties and exists to prosecute the causes of action transferred to it for the benefit of holders of Trust interests. Lawyers at Kasowitz, Benson, Torres & Friedman, LLP (NYC), represent the Adelphia Recovery Trust. ALLDIGITAL HOLDINGS: Posts $928K Net Loss for June 30 Quarter ------------------------------------------------------------- AllDigital Holdings Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $928,517 on $654,213 of net sales for the three months ended June 30, 2014, compared to a net loss of $122,121 on $1.03 million of net sales for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $1.02 million in total assets, $796,958 in total liabilities, and stockholders' equity of $226,186. The Company has to date incurred recurring losses and has accumulated losses aggregating approximately $3.4 million as of June 30, 2014. The Company's business strategy includes attempting to increase its revenue through investing further in its product development and sales and marketing efforts, and expanding into certain international markets. The Company intends to finance this portion of its business strategy by using its current working capital resources and cash flows from operations. A copy of the Form 10-Q is available at: http://is.gd/g3N0t8 AllDigital Holdings, Inc., provides digital broadcasting solutions to develop, operate, and support complex digital service and digital broadcasting workflow implementations across various devices. It offers AllDigital Cloud, a unified digital broadcasting and cloud services platform for ingesting, storing, preparing, securing, managing, monetizing, converting, and distributing digital media and other forms of data across various devices. The company also provides mobile, desktop, and connected television advanced app frameworks; integration services; and technical support and app maintenance services. AllDigital Holdings, Inc. primarily serves media and entertainment companies; enterprises; educational institutions; interactive gaming companies; government/non-profit organizations; faith-based organizations; and hardware manufacturers and software providers. The company was founded in 2009 and is headquartered in Irvine, California. ALLY FINANCIAL: Presented at Barclays Global Conference ------------------------------------------------------- Members of management of Ally Financial Inc. presented at the Barclays Global Financial Services Conference on Sept. 9, 2014. The management discussed the Company's priorities including, among other things, executing a three-point plan to deliver shareholder return of 9 - 11% Core ROTCE by year-end 2015. The Company also plans to explore long-term expansion opportunities to address additional legacy high-cost unsecured debt, further capital optimization and future business expansion. A copy of the presentation is available for free at: http://is.gd/PMzNBD About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The Company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3 percent stake. Private equity firm Cerberus Capital Management LP keeps 14.9 percent, while General Motors Co. owns 6.7 percent. As of March 31, 2014, the Company had $148.45 billion in total assets, $133.99 billion in total liabilities and $14.45 billion in total equity. * * * As reported by the TCR on Dec. 16, 2013, Standard & Poor's Ratings Services said it raised its issuer credit rating on Ally Financial Inc. to 'BB' from 'B+'. "The upgrade reflects the company's release from potential legal and financial liabilities stemming from its ownership of ResCap," said Standard & Poor's credit analyst Tom Connell. In the April 3, 2014, edition of the TCR, Fitch Ratings has upgraded Ally Financial Inc.'s long-term Issuer Default Rating (IDR) and senior unsecured debt rating to 'BB+' from 'BB'. The rating upgrade reflects increased clarity around Ally's ownership structure given Ally's recent announcement that it has launched an initial public offering those shares of its common stock held by the U.S. Treasury (the Treasury). As reported by the TCR on July 16, 2014, Moody's Investors Service affirmed the Ba3 corporate family and B1 senior unsecured ratings of Ally Financial, Inc. and revised the outlook for the ratings to positive from stable. Moody's affirmed Ally's ratings and revised its rating outlook to positive based on the company's progress toward sustained improvements in profitability and repayment of government assistance received during the financial crisis. AMERICAN INT'L GROUP: Chief Moves Up Exit After Cancer Prognosis ---------------------------------------------------------------- Kevin DuganAugust, writing for New York Post, reported that American International Group chief executive Robert Benmosche is stepping down after learning he has less than a year to live. According to the report, Benmosche, 70, who was diagnosed with cancer in 2010, said he was given nine to 12 months to live in May. The company announced in June that Peter Hancock would succeed Benmosche as president and CEO, the report related. About AIG With corporate headquarters in New York, American International Group, Inc., is an international insurance company, serving customers in more than 130 countries. AIG companies serve commercial, institutional and individual customers through property-casualty networks of any insurer. In addition, AIG companies are providers of life insurance and retirement services. At the height of the 2008 financial crisis, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage-backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG sold off a number of its businesses and other assets to pay down loans received from the U.S. government. AMERICAN INT'L HOLDINGS: Reports $34K Net Loss in June 30 Qtr. -------------------------------------------------------------- American International Holdings Corp. filed its quarterly report on Form 10-Q, disclosing a net loss from operations of $34,254 on $nil of revenue for the three months ended June 30, 2014, compared with a net loss of $36,166 on $nil of revenue for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $2.29 million in total assets, $18,785 million in total liabilities, and stockholders' equity of $2.28 million. The Company has no operations, a net loss of $59,644 for the six months ended June 30, 2014, an accumulated deficit of $2 million, and has no sources of revenue and expects to incur further losses in the future, thus raising substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/7DgPe3 American International Holdings Corp. engages in seeking a business combination with an operating company through acquiring its assets, properties, and other means. The company was founded on February 3, 2010 and is headquartered in Kemah, Texas. AMERICAN OPTICAL: Tiger Group to Conduct Online Auction for Assets ------------------------------------------------------------------ Fashion-conscious men and women seeking the ultimate in eyewear will have a once-in-lifetime opportunity to get their bling on when Tiger Group's Remarketing Services Division conducts an online auction of more than 1,600 pairs of one-of-a kind exotic eyewear and other designer frames valued in excess of $1 million. Carrying retail price tags of up to $30,000, the high-end specs were showcased at two luxury boutiques in the Bellagio casino- hotel: Bellissimo and MesmerEyes. Both shops were operated by Vegas-based eyewear specialists American Optical Services LLC, which filed for bankruptcy this year. The select exotic sunglasses, typically worn by sports and entertainment stars and the uber-wealthy, will be offered for sale to the public and the eyewear trade on a unit-by-unit basis. The inventory includes such brands as Maybach, Bentley (Estede), IVKO USA, Chrome Hearts, Sama, and Cartier. Features include frames constructed of sterling silver and gold, and accented by diamonds, precious stones and buffalo horn temples. Other designer brands on the block include Maui Jim, Oakley, Safilo, Oliver Peoples, Etnia Barcelona, Ottica Veneta, Dita Eyewear, Enteyesments, Marcolin, Luxottica, Palm Optical, Logo of the Americas, and De Rigo Vision. All will be sold in lots. "This event is an unprecedented opportunity to purchase distinctive eyewear at considerable discounts and, more importantly, obtain unique, one-of-a-kind sunglasses typically relegated to exclusive venues only," said Jeff Tanenbaum, president of Tiger Remarketing Services. Also available will be optical and audiology equipment, as well as networking and other computer equipment, and office furnishings. Online bidding opens September 18 at www.SoldTiger.com and will close in rapid succession, live auction style, on September 24 beginning at 10:30 a.m. (PT). Previews of the various assets being offered will be held September 19 at 8076 West Sahara Ave. in Las Vegas. For a full catalog of the items offered and details on how to bid, go to: www.SoldTiger.com American Optical Services LLC and certain affiliates filed for Chapter 11 bankruptcy on June 20, 2014 in the Delaware Bankruptcy Court (case number 1:14-bk-11545). AMERICAN SANDS: Incurs $887K Net Loss for Q2 Ended June 30 ---------------------------------------------------------- American Sands Energy Corp. filed its quarterly report on Form 10- Q, disclosing a net loss of $887,774 on $nil of revenues for the three months ended June 30, 2014, compared with a net loss of $483,077 on $nil of net revenue for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $2.33 million in total assets, $680,171 in total liabilities and stockholders' equity of $1.65 million. The Company has incurred substantial losses from operations and has negative cash flows from operating activities, which raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/XPEHPw American Sands Energy Corp. operates as a development stage company with interest in clean extraction of bitumen from oil sands. It has under lease oil sand deposits in Utah containing millions of barrels of recoverable bitumen resource. The company has also licensed and refined a proprietary extraction process that separates hydrocarbons from sand, dirt and other substances to produce a liquid fuel stock suitable for refining. American Sands Energy was founded by William C. Gibbs on April 7, 1983 and is headquartered in Salt Lake City, Utah. ARMORWORKS ENTERPRISES: Says Full-Payment Plan Still Possible ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that ArmorWorks Enterprises LLC said its Chapter 11 plan can't be implemented even though a bankruptcy judge already said she should sign an order confirming the plan because the producer of military body and vehicle armor cancelled its deal for Diversis Capital LLC to take control by paying $3 million. ArmorWorks, however, said it's still possible to formulate a Chapter 11 plan with full payment for creditors, because favorable developments in the business may lead to "alternate funding sources," the report related. 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. ARKANOVA ENERGY: Pierre Mulacek Holds 13% Equity Stake ------------------------------------------------------ Pierre Mulacek disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that he beneficially owned 7,137,500 shares of common stock of Arkanova Energy Corp., or 13.17% based on 54,182,267 shares of common stock issued and outstanding as of Sept. 4, 2014. Prior to December 2012, Mr. Mulacek held an aggregate total of 587,500 shares of common stock. In December 2012, he purchased an aggregate total of 4,000,000 shares of common stock at a price of $0.10 per share for aggregate gross proceeds of $400,000, paid from his personal funds. Since 2012, Mr. Mulacek has purchased 1,000,000 shares of common stock on Aug. 29, 2014, A copy of the Schedule 13D is available for free at: http://is.gd/XcOiAi About Arkanova Austin, Tex.-based Arkanova Energy Corporation is a junior producing oil and gas company and is also engaged in the acquisition, exploration and development of prospective oil and gas properties. It holds mineral leases in Delores County, Lone Mesa State Park, Colorado and leasehold interests located in Pondera and Glacier Counties, Montana. In their report on the consolidated financial statements for the fiscal year ended Sept. 30, 2013, MaloneBailey LLP expressed substantial doubt about its ability to continue as a going concern, citing that the Company has incurred cumulative losses since inception and has negative working capital. The Company's balance sheet at June 30, 2014, showed $3.29 million in total assets, $14.35 million in total liabilities and a $11.06 million total stockholders' deficit. ARRAY BIOPHARMA: Posts $85.3-Mil. Net Loss For FY Ended June 30 --------------------------------------------------------------- Array BioPharma Inc. filed with the U.S. Securities and Exchange Commission on Aug. 15, 2014, its annual report on Form 10-K for the fiscal year ended June 30, 2014. The report stated that if the Company is unable to generate enough revenue from its existing or new collaboration and license agreements when needed or secure additional sources of funding, it may be necessary to significantly reduce its current rate of spending through further reductions in staff and delaying, scaling back or stopping certain research and development programs, including more costly Phase 2 and Phase 3 clinical trials on the Company's wholly-owned or co-development programs as these programs progress into later stage development. Insufficient liquidity may also require the Company to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to the Company and its stockholders than it would otherwise choose in order to obtain up-front license fees needed to fund operations. These events could prevent the Company from successfully executing its operating plan and, in the future, could raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $85.26 million on $42.08 million of total revenue for the fiscal year ended June 30, 2014, compared with a net loss of $61.94 million on $69.58 million of total revenue in 2013. The Company's balance sheet at June 30, 2014, showed $139.05 million in total assets, $164.77 million in total liabilities, and total stockholders' deficit of $25.72 million. A copy of the Form 10-K is available at: http://is.gd/5iN9Sg About Array Biopharma Boulder, Colo.-based Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small-molecule drugs to treat patients afflicted with cancer and inflammatory diseases. Array has four core proprietary clinical programs: ARRY-614 for myelodysplastic syndromes, ARRY-520 for multiple myeloma, ARRY-797 for pain and ARRY-502 for asthma. In addition, Array has 10 partner-funded clinical programs including two MEK inhibitors in Phase 2: selumetinib with AstraZeneca and MEK162 with Novartis. Array BioPharma reported a net loss of $23.58 million for the year ended June 30, 2012, a net loss of $56.32 million for the year ended June 30, 2011, and a net loss of $77.63 million for the year ended June 30, 2010. ASHTEAD GROUP: Moody's Affirms 'Ba2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has affirmed the Ba2 corporate family rating (CFR) and Ba2-PD probability of default rating (PDR) of Ashtead Group plc (Ashtead, or, the company). Moody's also upgraded to Ba3 from B1 the rating on the USD900 million 6.5% second priority senior secured notes due 2022 issued by Ashtead Capital, Inc. Concurrently, Moody's has assigned a (P)Ba3 rating to the new USD400 million second priority senior secured notes due 2024 issued by Ashtead Capital, Inc. The proceeds of the issuance will be used to reduce drawings under the USD2 billion Asset-based facility (ABL). The outlook on all ratings remains stable. Moody's issues provisional ratings in advance of the final sale of securities. Upon a conclusive review of the final documentation, Moody's will endeavour to assign a definitive ratings to the new second priority senior secured notes due 2024. A definitive rating may differ from a provisional rating. Rating Rationale The strong performance of Ashtead, driven by a larger fleet, higher utilisation levels and improving yields as key markets continue to recover has resulted in Moody's adjusted leverage decreasing to 1.9x at financial year ended 30 April 2014, down from 2.5x at year end 2012. Over the same period Moody's adjusted EBIT to interest has increased to 6.9x from 3.0x. While maintaining a steady deleveraging profile the company has invested heavily to renew and expand its rental fleet in the US and retain a stable fleet profile in the UK. In the short term Moody's expects that this will result in negative free cash flow generation however it leaves Ashtead well positioned to take advantage of improving markets in both the US and the UK due to the low average age of its fleet. Moody's positively notes that the average age of the group's serialised rental equipment, which constitutes the substantial majority of its fleet, at 31 July 2014, weighted on a net book value was approximately 26 months, which compares to 29 months at 31 October 2013 and is relatively low when compared both to this point in the cycle as well as the group's main competitors. The bulk of Ashtead's positive growth is coming from its Sunbelt business in the US, which generates in excess of 80% of total sales with the remainder generated by the A-Plant business in the UK. The company continues to heavily invest in its fleet, both in terms of replacement capex and growth capex, in order to support organic growth. To support the growth that Ashtead is experiencing FY2015 gross capex guidance has been increased to GBP825 million - GBP875 million, up from GBP741 million in FY 2014. In addition, the company remains active on the M&A front, making small bolt-on additions to support current markets, or as alternatives to establishing greenfield sites. Year-to-date acquisitions total USD90 million. Moody's expects free cash flow generation will remain constrained over the next 12-18 months as the company continues to invest in its fleet, opening new sites and continuing to make small acquisitions and that the cash balance will remain low in line with historical levels. Based on management forecasts, Moody's expects cashflow from operations will be negative for FY 2015 at around GBP-100 million, before turning positive in FY 2016 and FY 2017. However, liquidity remains acceptable at this stage in the investment cycle as the company has approximately USD700 million of availability outstanding under its ABL facility before applying the proceeds from the USD400 million new senior secured notes, which is sufficient capacity to cover the company's planned FY2015 investment schedule and remain above the USD200 million covenant- free level. The new Notes share a similar security package to the existing notes, will be fully and unconditionally guaranteed on a senior basis by Ashtead Group plc and substantially all of the direct and indirect subsidiaries that guarantee the ABL facility. In addition the Notes will be secured on a second priority basis by substantially all of the collateral securing the first priority ABL facility. The collateral supporting the Notes and the ABL facility includes liens over substantially all of the tangible and intangible property of the borrowers and the guarantors. The upgrade of the rating of the second priority senior secured notes due 2022 to Ba3 from B1 reflects the anticipated reduction in the amount of drawn ABL and increase in second priority senior secured debt following the issuance of the new USD400 million Notes. Rationale for the Stable Outlook The stable outlook reflects Moody's expectation that Ashtead's US operations will maintain steady growth, supported by continued market share gains and increasing rental penetration combined with an improving environment for its UK operations. The outlook also assumes that the company will maintain a relatively conservative financial policy with no major debt-funded acquisitions or fleet overspend leading to lower utilisation rates. What Could Change The Rating -- Up/Down The ratings could be upgraded if the company's free cash flow turns positive and Moody's adjusted debt/EBITDA is maintained sustainably below 2.0x. Positive traction could be limited by future return of cash to shareholders via dividends depending on the impact on leverage. Although not currently expected, a downturn in its US operations leading to a decline in fleet utilisation and yields could create negative rating pressure. Additionally, Moody's adjusted leverage increasing above 2.5x on a sustained basis could also lead to negative pressure on the rating. The principal methodology used in these ratings was Global Equipment and Automobile Rental Industry published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Ashtead is a UK-listed equipment rental company, with operations in the US and UK. Total revenue and Moody's adjusted EBITDA as at 30 April 2014 were GBP1,635 million and GBP723 million respectively. ASSOCIATED WHOLESALERS: Proposes C&S-Led Auction on Oct. 24 ----------------------------------------------------------- Associated Wholesalers, Inc., and its debtor-affiliates will seek approval at a hearing on Sept. 23, 2014, at 9:00 a.m. (ET) of proposed procedures to sell substantially all assets to C&S Wholesale Grocers, Inc., absent higher and better offers. The Debtors propose an expedited sale process to preserve the going-concern value of their assets. The Debtors propose to conduct an auction based on this timeline: -- Initial bids, which must include a good faith cash deposit of $15 million, are due Oct. 22, 2014; -- If qualified bids are received, the Debtors will conduct an auction at Centre Square West, 1500 Market Street, 38th Floor, Philadelphia, Pennsylvania 19102 on Oct. 24, 2014 at 10:00 a.m. -- Objections to the sale will be due Oct. 21, 2014; -- The Debtors request that the Court schedule the sale hearing on Oct. 28, 2014. The prepetition first lien lenders are entitled to credit bid. If C&S is not the successful bidder, the Debtors propose to pay C&S a break-up fee of $5,103,600 and expense reimbursement of up to $1.5 million. The bid protections are in recognition of C&S's substantial expenditure of time, energy and resources, and the benefits to the Debtors' estates of securing a "stalking horse" or guaranteed minimum bid. Objections to the proposed sale procedures are due Sept. 22, 2014, at 12:00 p.m. Purchase Agreement with C&S After a wholesome marketing of the assets prepetition, the Debtors selected C&S as stalking-horse bidder. The parties have agreed that unless outbid at the auction, C&S will purchase the assets on these terms: -- PURCHASE PRICE. The purchase price consists of: (i) the lesser of: * the amount of the bank debt, and * $152,110,000, plus (ii) the lesser of * an amount equal to amounts owed to LMM as of the Closing Date, and (iii) the lesser of * $8,610,000 and * an amount equal to 105% of the amount of certain outstanding letters of credit as of the Closing Date, plus (iv) the lesser of * the amount of wages accrued for the benefit of all of the Debtors' employees for the Stub Wage Period, and * $2.5 million, plus (v) a "credit bid" of the Purchaser's $18 million participation in the DIP credit facility, plus (vi) $5 million, minus (vii) any Unreinvested Insurance Recovery. -- RIGHT TO CREDIT BID. The purchase price includes a "credit bid" of the Purchaser's $18 million participation in the DIP Credit Facility. -- COMPETITIVE BIDDING. The Agreement contemplates an auction to be conducted. -- AVOIDANCE ACTIONS. Except for those causes of action listed on Schedule 2.1(o) of the Agreement, the acquired assets include all rights, demands and claims under Chapter 5 of the Bankruptcy Code. -- USE OF PROCEEDS. The sale proceeds are proposed to be used in this order of priority: * First, to the Debtors, to be used to pay any accrued and unpaid wages for the Stub Wage Period in an amount not to exceed $2.5 million. * Second, to the Debtors, to be used to pay any fees and expenses that may be allowed to Lazard Middle Market LLC in an amount not to exceed $1.9 million; * Third, for the full payment of the Prepetition First Lien Debt and the full payment of the DIP obligations; and * Fourth, to the extent that additional funds remain from the proceeds of the sale, the funds will be available for the Debtors' estates. -- MILESTONES. The agreement includes these requirements: * The bidding procedures must be approved within 24 days after the Petition Date; * An auction must be concluded on or prior to 55 days from the Petition Date; * The sale order must be entered on or prior to 62 days from the Petition Date; and * Closing must occur within 100 days from the entry of the Agreement. First-Day Motions Aside from the sale motion, the Debtors on the Petition Date filed motions to: -- jointly administer their Chapter 11 cases; -- extend the deadline to file their schedules of assets and liabilities and statement of financial affairs by 45 days to October 24, 2014; -- pay prepetition sales and use taxes; -- continue using their existing cash management system; -- pay prepetition wages and benefits of approximately 2,236 employees; -- maintain, cancel or replace their existing insurance programs; -- pay the prepetition claims of shippers and warehousemen; -- establish procedures for assertion of claims arising under 11 U.S.C. Sec. 503(b)(9); -- pay claims asserted under the Perishable Agricultural Commodities Act; -- maintain their customer-related programs; and -- access DIP financing and use cash collateral. About Associated Wholesalers Founded in 1962 and headquartered in Robesonia, Pennsylvania, Associated Wholesalers Inc. services 800 supermarkets, specialty stores, convenience stores and superettes with grocery, meat, produce, dairy, frozen foods and general merchandise/health and beauty care products. AWI, which owns distribution facilities in Robesonia, Pennsylvania, and York, Pennsylvania, serves the mid- Atlantic United States. AWI is owned by its 500 retail members, who in turn operate supermarkets. AWI has 1,459 employees. White Rose Inc. is a food wholesaler and distributor serving the greater New York metropolitan area. The company traces its origins to 1886, when brothers Joseph and Sigel Seeman founded Seeman Brothers & Doremus to provide grocery deliveries throughout New York City. White Rose carries out its operations through three leased warehouse and distribution centers, two of which are located in Carteret, New Jersey, and one in Woodbridge, New Jersey. White Rose has 777 employees. Associated Wholesalers and its affiliates on Sept. 9, 2014, sought Chapter 11 protection to sell their assets under 11 U.S.C. Sec. 363 to C&S Wholesale Grocers, absent higher and better offers. The Debtors have sought joint administration of their Chapter 11 cases for procedural purposes, seeking to maintain all pleadings on the case docket for AWI Delaware, Inc., Bankr. D. Del. Case No. 14-12092. As of the Petition Date, the Debtors owe the Bank Group (consisting of lenders, Bank of America, N.A., Bank of American Securities LLC as sole lead arranger and joint book runner, Wells Fargo Capital Finance, LLC as joint book runner and syndication agent, and RBS Capita, as documentation agent) an aggregate principal amount of not less than $131,857,966 (inclusive of outstanding letters of credit), plus accrued interest. Saul Ewing LLP and Rhoads & Sinon LLP are serving as legal advisors to the Debtors, Lazard Middle Market is serving as financial advisor, and Carl Marks Advisors is serving as restructuring advisor to AWI. Douglas A. Booth has been tapped as chief restructuring officer. Epiq Systems serves as the claims agent. ASSOCIATED WHOLESALERS: Proposes DIP Financing From Banks, C&S -------------------------------------------------------------- Associated Wholesalers, Inc., and its affiliated debtors are seeking interim and final orders authorizing their entry into a debtor-in-possession credit agreement with financial institutions, including C&S Wholesale Grocers, Inc., and Bank of America, N.A., in its capacity as "issuing bank." The Debtors need DIP financing to avoid a "free fall" bankruptcy. The Debtors are seeking to conduct an efficient auction process to sell substantially all of their assets. The Bank Group indicated that it was only willing to provide postpetition financing up to a certain amount. This threshold became problematic for C&S, however, which premised its willingness to serve as stalking horse bidder on the Debtors continuing to meet certain agreed-upon working capital projections, retaining customers and otherwise maintaining value of the businesses until closing of the sale. Upon determining that the financing offered by the Bank Group may not be sufficient to enable the Debtors to alleviate C&S's concerns, C&S agreed to provide secured funding to the Debtors that is junior in priority to the "Bank Lenders". C&S is a "first-in-last-out" participant in the DIP Credit Facility. The anticipated amount of its advances to the Debtors under the facility is $18.0 million. The Debtors will obtain postpetition financing form two sources ? the Bank Lenders and C&S ?- subject to the terms and conditions set forth in the Senior Secured, Super-Priority Debtor-in- Possession Credit Agreement between AWI, White Rose Inc., Nell's Inc., and Associated Logistics Inc., as borrowers, the financial institutions that are parties to the agreement, including C&S, and Bank of America, as issuing bank and agent. The salient terms of the DIP facility are: -- The DIP facility generally consists of: * From the Bank Lenders, secured revolving loans, with a maximum available amount of (a) $152,110,000 plus (b) the amount of the letter of credit obligations outstanding as of the Petition Date; and * From C&S a secured revolving loan of up to $18 million. -- The maturity date is Dec. 1, 2014 -- At any time an event of default exists, the obligations will bear interest at a rate of 2% plus the interest otherwise applicable thereto. -- Fees include an unused line fee on the daily amount of the "unused line" at a rate equal to 0.375% per annum, a letter of credit fee, and a closing fee of $500,000. -- The proposed final order approving the DIP financing will include a roll-up. The Debtors as of the Petition Date owe $126,058,000 in principal on account of revolving loans. The outstanding amount will be deemed funded under the revolving credit commitment under the DIP facility upon entry of the final order. -- The DIP Agreement contains milestones, including a requirement to conduct an auction within 55 days after the Petition Date. The Debtors also seek approval to use cash collateral. The Debtors propose to grant the prepetition first lien lenders adequate protection in the form of replacement security interests, an allowed superpriority administrative expense claim, and the repayment of the principal amount of the prepetition first lien debt. About Associated Wholesalers Founded in 1962 and headquartered in Robesonia, Pennsylvania, Associated Wholesalers Inc. services 800 supermarkets, specialty stores, convenience stores and superettes with grocery, meat, produce, dairy, frozen foods and general merchandise/health and beauty care products. AWI, which owns distribution facilities in Robesonia, Pennsylvania, and York, Pennsylvania, serves the mid- Atlantic United States. AWI is owned by its 500 retail members, who in turn operate supermarkets. AWI has 1,459 employees. White Rose Inc. is a food wholesaler and distributor serving the greater New York metropolitan area. The company traces its origins to 1886, when brothers Joseph and Sigel Seeman founded Seeman Brothers & Doremus to provide grocery deliveries throughout New York City. White Rose carries out its operations through three leased warehouse and distribution centers, two of which are located in Carteret, New Jersey, and one in Woodbridge, New Jersey. White Rose has 777 employees. Associated Wholesalers and its affiliates on Sept. 9, 2014, sought Chapter 11 protection to sell their assets under 11 U.S.C. Sec. 363 to C&S Wholesale Grocers, absent higher and better offers. The Debtors have sought joint administration of their Chapter 11 cases for procedural purposes, seeking to maintain all pleadings on the case docket for AWI Delaware, Inc., Bankr. D. Del. Case No. 14-12092. As of the Petition Date, the Debtors owe the Bank Group (consisting of lenders, Bank of America, N.A., Bank of American Securities LLC as sole lead arranger and joint book runner, Wells Fargo Capital Finance, LLC as joint book runner and syndication agent, and RBS Capita, as documentation agent) an aggregate principal amount of not less than $131,857,966 (inclusive of outstanding letters of credit), plus accrued interest. The Debtors estimate trade debt of $72 million. Saul Ewing LLP and Rhoads & Sinon LLP are serving as legal advisors to the Debtors, Lazard Middle Market is serving as financial advisor, and Carl Marks Advisors is serving as restructuring advisor to AWI. Carl Marks' Douglas A. Booth has been tapped as chief restructuring officer. Epiq Systems, the claims agent, maintains the Web site http://dm.epiq11.com/awi ASSOCIATED WHOLESALERS: Taps Epiq as Claims Agent ------------------------------------------------- Associated Wholesalers, Inc., and its affiliated debtors seek approval from the bankruptcy court to employ Epiq Bankruptcy Solutions, LLC, as claims and noticing agent, nunc pro tunc to their Petition Date. Although they have not yet filed their schedules of assets and liabilities, the Debtors estimate that there will thousands of entities to be noticed. In view of the number of anticipated claimants and the complexity of the Debtors' businesses, the Debtors submit that the appointment of Epiq as claims and noticing agent is both necessary and in the best interests of the Debtors' estates and their creditors. As claims agent, Epiq will charge the Debtor at rates comparable to those charged by other providers of similar services: Position Hourly Rate -------- ----------- Clerical $30 to $45 Case Manager $50 to $80 IT/ Programming $70 to $130 Senior Case Manager $85 to $130 Director of Case Management $145 to $195 Consultant/ Senior Consultant $145 to $190 Director/ Vice President Consulting $225 Executive Vice President $265 For its noticing services, Epiq will charge $50 per 1,000 e-mails, and $0.10 per page for facsimile noticing. For database maintenance, the firm will charge $0.10 per record per month. For on-line claim filing services, the firm will charge $3 per claim. The firm will charge $65 per hour for its call center operator as part of the call center services. Prior to the Petition Date, the Debtors provided Epiq a retainer in the amount of $25,000. J. Helen Cook-Attig, director of consulting services for Epiq, attests that Epiq and its employees are "disinterested persons" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Epiq can be reached at: EPIQ SYSTEMS 757 Third Avenue, Third Floor New York, NY 10017 Attn: Lorenzo Mendizabal About Associated Wholesalers Founded in 1962 and headquartered in Robesonia, Pennsylvania, Associated Wholesalers Inc. services 800 supermarkets, specialty stores, convenience stores and superettes with grocery, meat, produce, dairy, frozen foods and general merchandise/health and beauty care products. AWI, which owns distribution facilities in Robesonia, Pennsylvania, and York, Pennsylvania, serves the mid- Atlantic United States. AWI is owned by its 500 retail members, who in turn operate supermarkets. AWI has 1,459 employees. White Rose Inc. is a food wholesaler and distributor serving the greater New York metropolitan area. The company traces its origins to 1886, when brothers Joseph and Sigel Seeman founded Seeman Brothers & Doremus to provide grocery deliveries throughout New York City. White Rose carries out its operations through three leased warehouse and distribution centers, two of which are located in Carteret, New Jersey, and one in Woodbridge, New Jersey. White Rose has 777 employees. Associated Wholesalers and its affiliates on Sept. 9, 2014, sought Chapter 11 protection to sell their assets under 11 U.S.C. Sec. 363 to C&S Wholesale Grocers, absent higher and better offers. The Debtors have sought joint administration of their Chapter 11 cases for procedural purposes, seeking to maintain all pleadings on the case docket for AWI Delaware, Inc., Bankr. D. Del. Case No. 14-12092. As of the Petition Date, the Debtors owe the Bank Group (consisting of lenders, Bank of America, N.A., Bank of American Securities LLC as sole lead arranger and joint book runner, Wells Fargo Capital Finance, LLC as joint book runner and syndication agent, and RBS Capita, as documentation agent) an aggregate principal amount of not less than $131,857,966 (inclusive of outstanding letters of credit), plus accrued interest. The Debtors estimate trade debt of $72 million. Saul Ewing LLP and Rhoads & Sinon LLP are serving as legal advisors to the Debtors, Lazard Middle Market is serving as financial advisor, and Carl Marks Advisors is serving as restructuring advisor to AWI. Carl Marks' Douglas A. Booth has been tapped as chief restructuring officer. Epiq Systems serves as the claims agent. ASPEN GROUP: Leon Cooperman Reports 9.9% Equity Stake ----------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Leon G. Cooperman disclosed that as of Sept. 4, 2014, he beneficially owned 11,241,435 shares of common stock of Aspen Group, Inc., representing 9.99 percent of the shares outstanding. A copy of the regulatory filing is available for free at: http://is.gd/Lgbe5I About Aspen Group Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, it was acquired by Higher Education Management Group, Inc., and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized in a reverse merger. Aspen's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive, and relevant online education. Approximately 88 percent of the Company's degree-seeking students (as of June 30, 2012) were enrolled in graduate degree programs (Master or Doctorate degree program). Since 1993, the Company has been nationally accredited by the Distance Education and Training Council, a national accrediting agency recognized by the U.S. Department of Education. Aspen Group incurred a net loss of $5.35 million for the year ended April 30, 2014. The Company also reported a net loss of $1.40 million for the four months ended April 30, 2013. The Company reported a net loss of $6 million in 2012 as compared with a net loss of $2.13 million in 2011. As of April 30, 2014, Aspen Group had $3.58 million in total assets, $5.36 million in total liabilities and a $1.78 million total stockholders' deficiency. ATHERTON FINANCIAL: Files for Chapter 11 in Los Angeles ------------------------------------------------------- Atherton Financial Building LLC sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 14-27223) in Los Angeles, on Sept. 9, 2014. The resolution authorizing the bankruptcy filing said Atherton was sent to Chapter 11 due to recent developments involving the company. The Company estimated $10 million to $50 million in assets and debt. According to the docket, the formal schedules of assets and liabilities and statement of financial affairs are due Sept. 23, 2014. The case is assigned to Judge Thomas B. Donovan. The Debtor has tapped David B Golubchik, Esq., at Levene Neale Bender Rankin & Brill LLP, in Los Angeles, as counsel. AUXILIUM PHARMACEUTICALS: To Streamline Operations for Growth ------------------------------------------------------------- Auxilium Pharmaceuticals, Inc., announced steps it is taking to reduce its costs and more fully support the Company's goal to drive earnings growth and build shareholder value. These steps are being launched after a comprehensive assessment of Auxilium's broadened product portfolio and current cost structure and what management believes to be Auxilium's growth assets, commercial strengths, opportunities and challenges and the Company's manufacturing needs and capabilities. The restructuring is designed to: * Reduce annual operating expenses by at least $75 million and align cost structure with the Company's current product portfolio * Stabilize cash flow and improve leverage ratio * Realign the commercial organization and strategically consolidate the current three sales forces into two sales forces, strengthening the Company's urologist franchise offering while maintaining the momentum for the XIAFLEX(R) for Peyronie's Disease and STENDRA(R) launches and supporting the growth potential of TESTOPEL(R) and edex(R) * Maintain the targeted commercial resources dedicated to continuing the stable growth momentum of XIAFLEX for Dupuytren's contracture * Focus R&D efforts on the efficient development of near-term value programs -- cellulite and Frozen Shoulder Syndrome * Improve manufacturing efficiency and enhance inventory management "We believe the changes announced today support our corporate growth strategy and enhance and accelerate our ability to achieve our goal of building Auxilium into a leading, diversified North American specialty biopharmaceutical company," said Adrian Adams, chief executive officer and president of Auxilium Pharmaceuticals. "Auxilium has faced significant challenges this year, in particular a dramatic decline in the testosterone replacement therapy market. We are making difficult but necessary changes at the operational level to strengthen our balance sheet, reinforce our competitive position and, we believe, drive shareholder value. We are confident that these steps will make us a leaner, more efficient and more competitive company and, after our anticipated merger with Canadian biotechnology company QLT, Inc., will provide a stronger platform to accelerate our growth and transformation." Auxilium has identified annual cost savings totaling greater than $75 million, which includes reducing headcount by approximately 30 percent, the majority of which will be immediate, realigning the commercial organization from three into two sales forces, focusing its R&D efforts and expenditures and improving manufacturing efficiency. The Company anticipates substantial completion of the restructuring by the end of 2014, with the full $75 million run- rate achieved by mid-year 2015. In 2014, Auxilium expects to record certain charges totaling up to $20 million associated with the restructuring, primarily resulting from severance and contract-related expenses. "Finally, we would like to thank all affected and unaffected Auxilium employees for their efforts, dedication and commitment to the Company's growth and success. Each of our departing employees has played an important role in Auxilium's successes and we wish them well in their future endeavors," stated Mr. Adams. About Auxilium Auxilium Pharmaceuticals, Inc. -- http://www.Auxilium.com/-- 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. The Company's balance sheet at June 30, 2014, showed $1.11 billion in total assets, $935.82 million in total liabilities and $179.40 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 Aug. 20, 2014, edition of the TCR, Standard & Poor's Ratings Services affirmed its 'CCC' corporate credit rating on Auxilium Pharmaceuticals Inc. following the company's announcement that it had obtained an amendment to its credit agreement permitting the change of control associated with the company's proposed merger with a Canadian biotechnology firm QLT Inc. The outlook is negative. AVENTINE RENEWABLE: Valero Restarts Plant After 2012 Shutdown ------------------------------------------------------------- The Associated Press reported that Valero Renewable Fuels has resumed production at an ethanol plant in Indiana that was shut down more than two years ago by its previous owner, Aventine Renewable Energy. According to the report, the plant was closed due to a decline in the ethanol market and Aventine sought bankruptcy protection. About Aventine Renewable Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc. (OTC BB: AVRW) -- http://www.aventinerei.com/-- markets and distributes ethanol to many of the leading energy companies in the U.S. In addition to producing ethanol, its facilities also produce several by-products, such as distillers grain, corn gluten meal and feed, corn germ and grain distillers dried yeast, which generate revenue and allow the Company to help offset a significant portion of its corn costs. The Company and all of its subsidiaries filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 09-11214) on April 7, 2009. The Debtors filed their First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code on Jan. 13, 201. The Plan was confirmed by order entered by the Bankruptcy Court on Feb. 24, 2010, and became effective on March 15, 2010. The Company's balance sheet as of March 31, 2012, showed $384.90 million in assets against $248.91 million in liabilities. BANNERS BROKER: Isle of Man Proceeding Recognized in Canada ----------------------------------------------------------- The Ontario Superior Court of Justice (Commercial List) ordered on August 22, 2014, pursuant to Sec. 272 of the Bankruptcy and Insolvency Act, that the proceeding of Banners Broker In Liquidation brought before the High Court of Justice in the Isle of Man, Civil Division, under Sec. 162(6) of the Companies Act, 1931, be recognized as a foreign main proceeding and that msi Spergel Inc., be appointed as the Company's receiver in Canada. The receiver may be reached at: msi Spergel inc. 505 Consumers Road, Suite 200 Toronto, ON M2J 4V8 Tel: 416-498-4325 Fax: 416-498-4235 E-mail: bannersbrokerinternational@spergel.ca Attn: Philip H. Gennis Legal counsel for the Joint Liquidators of Banners Broker and the Receiver are: CASSELS BROCK & BLACKWELL LLP Scotia Plaza, Suite 2100 40 King Street West Toronto, ON M5H 3C2 Tel: 416-869-5960 Fax: 416-360-8877 E-mail: dward@casselsbrock.com Attn: David Ward BAPTIST HOME: $30.3 Million Sale Approved in Philadelphia --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that a bankruptcy judge said he will sign an order approving the sale of Deer Meadows Retirement Community, a 491-bed facility in Philadelphia, to Deer Meadows Property LP for about $30.3 million in cash plus the assumption of specified liabilities. Francis Lawall, Esq., at Pepper Hamilton LLP, in Philadelphia, an attorney for the Official Committee of Unsecured Creditors, told Bloomberg that there should be a high distribution to both bondholders and unsecured creditors. As previously reported by The Troubled Company Reporter, the retirement home facility did not receive any competing qualified bids by the deadline. Eric Scherling of Cozen O'Connor, one of the retirement home's lawyers, told Bloomberg that completing the sale will probably take two months or so, given the need for regulatory approvals. About The Baptist Home of Philadelphia The Baptist Home of Philadelphia and The Baptist Home Foundation sought Chapter 11 protection (Bankr. E.D. Pa. Case Nos. 14-13305 and 14-13306) in Philadelphia on April 25, 2014. Baptist Home of Philadelphia is a Pennsylvania nonprofit corporation that owns and operates a continuing care retirement community known as "Deer Meadows Retirement Community", which is located at 8301 Roosevelt Boulevard, Philadelphia, Pennsylvania. Home offers 126 living accommodations, which vary in size, for independent living and personal care. It presently also has 206 skilled nursing beds in the nursing and rehabilitation center that offers short and long term care. It has 369 employees. Baptist Home of Philadelphia disclosed $37,330,904 in assets and $34,562,834 in liabilities as of the Chapter 11 filing. The Debtors have tapped Cozen O'Connor as counsel and KPMG Corporate Finance LLC as financial advisor and investment banker. The U.S. Trustee appointed Wilmarie Gonzalez as patient care ombudsman. U.S. Bank National Association, the trustee with regard to the secured bond indebtedness, hired Reed Smith LLP as counsel and CohnReznick LLP as financial advisor. Pepper Hamilton LLP represents the Official Committee of Unsecured Creditors. BAY CLUB PARTNERS: Equity Security Holder Files Objection to Plan ----------------------------------------------------------------- Trail Ranch Partners, LLC, filed with the U.S. Bankruptcy Court for the District of Oregon its objection to Bay Club Partners-472, LLC's First Amended Plan of Reorganization. Representing TRP, Gary M. Bullock, Esq., at Gary M. Bullock And Associates, P.C., in Portland, Oregon -- gary@garymbullock.com -- alleges that the Plan does not meet the requirements of Section 1122 of the U.S. Bankruptcy Code. He contends that the proposed Plan violates Section 1122 and, therefore, should not be confirmed. Section 1122 provides that a plan may place a claim or an interest in a particular class only if the claim or interest is substantially similar to the other claims or interests of the class, Mr. Bullock relates. He contends that the Debtor has proposed a class (Class 2 consisting of Equity Security Holders) that contains interests that are not substantially similar to the other interests in the class. TRP, together with Odyssey Holdings, provided nearly all of the initial capital for the Debtor. TRP made an initial capital contribution of $522,027 and Odyssey Holdings (which, at the time of acquisition and thereafter, was not owned by any of the current members of the Debtor) made an initial capital contribution of $2,093,373. The two other current members of Debtor, Randy Norgart and Manager of Debtor David Butler, provided only $1,000 each towards the initial capital, Mr. Bullock notes. More significantly, Mr. Bullock tells the Court, TRP provided additional capital contributions, which contributions total $1,048,921. As of June 30, 2013, the amount of the priority distribution payable to TRP is approximately $2,305,613, he notes. He insists that equity security holders, who have invested millions of dollars into the Debtor and who, under the effective Operating Agreement, are entitled to preferred returns on those investments, should be in a separate class from equity security holders, who are not so entitled. About Bay Club Bay Club Partners-472, LLC, was formed to renovate and operate the residential property at 2121 W. Main St., Mesa, Arizona, known as Midtown on Main Street. The property has 470 rental units and offers residents amenities including a fitness center, spa, clubhouse, three swimming pools, a covered play area, assigned parking, and 24-hour emergency maintenance services. As of the bankruptcy filing, the Debtor has leased 91% of the apartments. Bay Club filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 14-30394) on Jan. 28, 2014. The Debtor disclosed $28,247,787 in assets and $27,311,084 in liabilities as of the Chapter 11 filing. The case has been assigned to Judge Randall L. Dunn. Attorneys at Tonkon Torp LLP serve as counsel to the Debtor. The U.S. Trustee has not appointed a committee of unsecured creditors. Legg Mason Real Estate CDO I, Ltd., is represented in the case by Laura J. Walker, Esq., at Cable Huston LLP. BAY CLUB PARTNERS: Court to Confirm Sale-Based Amended Plan ----------------------------------------------------------- Bay Club Partners-472, LLC, filed with the U.S. Bankruptcy Court for the District of Oregon its Second Amended Plan of Reorganization on August 29, 2014. The Plan amends certain treatment of claims and other provisions in connection with the sale of the building and real property located at 2121 W. Main St., Mesa, Arizona 85201, known as Midtown on Main. Following the Confirmation Hearing held on September 5, 2014, the Court ruled that the Plan will be confirmed. The Court noted that all objections were effectively resolved. The Court directed the Debtor's counsel, Albert N. Kennedy, Esq., at Tonkon Torp LLP, in Portland, Oregon -- al.kennedy@tonkon.com -- to submit the parties' agreed form of confirmation order. Treatment of Administrative Expense Claims With the exception of ordinary course of business administrative expense claims, the Plan provides that the Allowed Administrative Expense Claims will be limited to the professional fees and costs incurred by Tonkon Torp, LLP and Maginnis & Carey, LLP, and approved by the Court, and United States Trustee fees. Effective Date was set for September 8, 2014. Treatment of Class 3 (CDO's Secured Claim) Legg Mason Real Estate CDO I, Ltd.'s Allowed Secured Claim is secured by a perfected security interest in substantially all of the Debtor's assets, including rents and all accounts. CDO will retain its interests in its Collateral with the same priority it had as of the Petition Date. CDO's Claim will be an Allowed Secured Claim in the amount of $27,971,415, plus attorneys' fees and costs. Interest will accrue on the unpaid balance of CDO's Allowed Secured Claim from and after the Effective Date at a fixed rate equal to 6.75% per annum. The unpaid balance of CDO's Allowed Secured Claim will be paid or credited at closing of the sale of Midtown on Main. Closing of a sale of Midtown on Main to a purchaser other than CDO will occur by January 31, 2015, provided, however, that in the event a signed purchase agreement is terminated by a potential buyer of Midtown on Main during that buyer's due diligence period, then the Closing Date will be extended to March 2, 2015. If the sale of Midtown on Main has not closed by January 31, 2015, or any extension thereof, then within 30 days thereafter the Reorganized Debtor will sell and CDO will purchase Midtown on Main for $30,000,000 less (a) the unpaid balance owing on CDO's Allowed Secured Claim, including any accrued and unpaid attorneys' fees and costs; and (b) the Allowed Unsecured Claims assigned of record to CDO. CDO will have an Allowed Unsecured Claim totaling $167,900.27 plus interest accruing at the rate of 3% per annum from the Effective Date. Treatment of Class 4 - General Unsecured Claims Each holder of an Allowed Class 4 General Unsecured Claim will be paid in full in Cash within 15 days of the closing of the sale of Midtown on Main, together with interest accruing from the Effective Date at a fixed rate of 3.0% per annum. Implementation of the Plan Morrison Ekre & Bart Management Services, Inc., will remain the property manager at least until the sale of Midtown on Main. The Debtor has executed an Exclusive Listing Agreement-Sale with Collier's International AZ, LLC, and Colliers has commenced marketing Midtown on Main. The Reorganized Debtor will sell Midtown on Main on or before the Closing Date. If a sale is not closed by the Closing Date, then the Reorganized Debtor will sell and CDO will purchase Midtown on Main for $30,000,000 less a credit for the unpaid balance owing on CDO's Allowed Secured Claim including all accrued interest, attorneys' fees and costs, and CDO's Allowed Unsecured Claims. Distributions to Equity Security Holders The Reorganized Debtor will make distributions to Equity Security Holders as provided in the Debtor's Organizational Documents after Class 3 and 4 Allowed Claims have been paid in full. The Bankruptcy Court will have and retain full and exclusive jurisdiction to resolve all disputes relating to distributions to Equity Security Holders. New Event of Default With respect to CDO only, in the event the Debtor fails within three days of the due date to make an interest payment to CDO, CDO's sole remedy will be to add default interest and a late charge in connection with that interest payment to CDO's Allowed Secured Claim. No default will alter, affect or abrogate CDO's obligation to purchase, and Reorganized Debtor's obligation to sell, Midtown on Main pursuant to a purchase and sale agreement. The Court will have and retain exclusive jurisdiction to enter orders as are necessary or appropriate to ensure the performance by CDO and the Reorganized Debtor of their obligations under and pursuant to the purchase and sale agreement. Copies of the Second Amended Plan and its redlined version are available for free at: * http://bankrupt.com/misc/BAYCLUB_2ndAmendedPlan.pdf * http://bankrupt.com/misc/BAYCLUB_2ndAmdPlan_Redlined.pdf About Bay Club Bay Club Partners-472, LLC, was formed to renovate and operate the residential property at 2121 W. Main St., Mesa, Arizona, known as Midtown on Main Street. The property has 470 rental units and offers residents amenities including a fitness center, spa, clubhouse, three swimming pools, a covered play area, assigned parking, and 24-hour emergency maintenance services. As of the bankruptcy filing, the Debtor has leased 91% of the apartments. Bay Club filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 14-30394) on Jan. 28, 2014. The Debtor disclosed $28,247,787 in assets and $27,311,084 in liabilities as of the Chapter 11 filing. The case has been assigned to Judge Randall L. Dunn. Attorneys at Tonkon Torp LLP serve as counsel to the Debtor. The U.S. Trustee has not appointed a committee of unsecured creditors. Legg Mason Real Estate CDO I, Ltd., is represented in the case by Laura J. Walker, Esq., at Cable Huston LLP. BON-TON STORES: Board Declares Cash Dividend of 5 Cents Apiece -------------------------------------------------------------- The Bon-Ton Stores, Inc.'s Board of Directors declared a cash dividend of five cents per share on the Class A Common Stock and Common Stock of the Company payable Nov. 3, 2014, to shareholders of record as of Oct. 17, 2014, according to a regulatory filing with the U.S. Securities and Exchange Commission. About Bon-Ton Stores The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 273 stores, which includes 10 furniture galleries, in 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers nameplates. The stores offer a broad assortment of national and private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. For further information, please visit the investor relations section of the Company's Web site at http://investors.bonton.com. Bon-Ton Stores reported a net loss of $3.55 million for the fiscal year ended Feb. 1, 2014, a net loss of $21.55 million for the year ended Feb. 2, 2013, and a net loss of $12.12 million for the year ended Jan. 28, 2012. The Company's balance sheet at May 3, 2014, showed $1.56 billion in total assets, $1.47 billion in total liabilities and $96.05 million in total shareholders' equity. * * * As reported by the TCR on May 15, 2013, Moody's Investors Service upgraded The Bon-Ton Stores, Inc.'s Corporate Family Rating to B3 from Caa1 and its Probability of Default Rating to B3-PD from Caa1-PD. "The upgrade of Bon-Ton's Corporate Family Rating considers the company's ability to drive modest same store sales growth as well as operating margin expansion beginning in the second half of 2012 and that these positive trends have continued, with the company reporting that its same store were positive, and EBITDA margins expanded, in the first fiscal quarter of 2013," said Moody's Vice President Scott Tuhy. As reported by the TCR on May 17, 2013, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on The Bon-Ton Stores Inc. BONSO ELECTRONICS: Posts $221K Net Loss in FY Ended March 31 ------------------------------------------------------------ Bonso Electronics International Inc. filed with the U.S. Securities and Exchange Commission on Aug. 15, 2014, its annual report on Form 20-F for the fiscal year ended March 31, 2014. The Company reported a net loss of $221,000 on $31.3 million of net sales for the fiscal year ended March 31, 2014, compared with a net loss of $754,000 on $30.39 million of net sales in 2013. The Company's balance sheet at March 31, 2014, showed $32.14 million in total assets, $21.52 million in total liabilities, and stockholders' equity of $10.62 million. A copy of the Form 20-F is available at: http://is.gd/UdlIoV About Bonso Electronics Shatin, Hong Kong-based Bonso Electronics International Inc. (NasdaqCM: BNSO:) -- http://www.bonso.com/-- designs, develops, produces and sells electronic sensor-based and wireless products for private label Original Equipment Manufacturers, Original Brand Manufacturers and Original Design Manufacturers. Since 1989, the Company has manufactured all of its products in China in order to take advantage of the lower overhead costs and competitive labor rates. The Company's factory is currently located in Shenzhen, China, about 50 miles from Hong Kong. BRIGHTSIDE HOSPITALITY: Case Summary & 17 Top Unsecured Creditors ----------------------------------------------------------------- Debtor: Brightside Hospitality, LLC dba La Quinta Inn and Suites 1503 Breckenridge Road Mansfield, TX 76063 Case No.: 14-34409 Chapter 11 Petition Date: September 10, 2014 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Barbara J. Houser Debtor's Counsel: Arthur I. Ungerman, Esq. ARTHUR I. UNGERMAN, ESQUIRE One Glen Lakes Tower 8140 Walnut Hill Ln., No. 301 Dallas, TX 75231 Tel: 972-239-9055 Fax: 972-239-9886 E-mail: arthur@arthurungerman.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Rajpal S. Chatha, president. A list of the Debtor's 17 largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb14-34409.pdf BROWNIE'S MARINE: Alexander Purdon Hikes Equity Stake to 7.5% ------------------------------------------------------------- In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Alexander Fraser Purdon disclosed that as of Sept. 2, 2014, he beneficially owned 5,720,173 shares of common stock of Brownie's Marine Group, Inc., representing 7.54 percent of the shares outstanding. The percentage of shares of Common Stock is based upon 38,997,155 shares of the Company's Common Stock outstanding as of Sept. 9, 2014. Mr. Purdon previously owned 4,631,321 shares of common stock at May 31, 2014. A copy of the regulatory filing is available for free at: http://is.gd/9R2p7t About Brownie's Marine Brownie's Marine Group, Inc., does business through its wholly owned subsidiary, Trebor Industries, Inc., d/b/a Brownie's Third Lung, a Florida corporation. The Company designs, tests, manufactures and distributes recreational hookah diving, yacht based scuba air compressor and nitrox generation systems, and scuba and water safety products. BWMG sells its products both on a wholesale and retail basis, and does so from its headquarters and manufacturing facility in Fort Lauderdale, Florida. The Company's common stock is quoted on the OTC BB under the symbol "BWMG". The Company's Web site is http://www.browniesmarinegroup.com/ Brownie's Marine reported a net loss of $788,286 in 2013, as compared with a net loss of $2.01 million in 2012. As of March 31, 2014, the Company had $1.11 million in total assets, $1.72 million in total liabilities and a $613,098 of total stockholders' deficit. Liquidity and Capital Resources As of March 31, 2014, the Company had cash and current assets (primarily consisting of inventory) of $1,012,251 and current liabilities of $1,725,977, or a current ratio of .59 to 1. This represents a working capital deficit of $713,726. As of December 31, 2013, the Company had cash and current assets of $1,057,967 and current liabilities of $1,760,058, or a current ratio of .60 to 1. As of December 31, 2012, the Company had cash and current assets of $894,573 and current liabilities of $1,770,503, or a current ratio of .51 to 1. The consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial statements. The Company has incurred losses since 2009, and expects to have losses through 2014. The Company has had a working capital deficit since 2009. The Company is behind on payments due for payroll taxes and withholding, matured convertible debentures, related party notes payable, accrued liabilities and interest-related parties, and certain vendor payables. The Company is handling delinquencies on a case by case basis. However, there can be no assurance that cooperation the Company has received thus far will continue. The Company closed and ceased operations at its retail facility. The Company is still involved in the joint venture. As a result, the Company does not expect that existing cash flow will be sufficient to fund presently anticipated operations beyond the second quarter of 2043. This raises substantial doubt about BWMG's ability to continue as a going concern. The Company will need to raise additional funds and is currently exploring alternative sources of financing. "We have issued a number of convertible debentures as an interim measure to finance our working capital needs. We have historically paid for many legal and consulting services with restricted stock to maximize working capital. We intend to continue this practice in the future when possible. We have implemented some cost saving measures and will continue to explore more to reduce operating expenses. "If we fail to raise additional funds when needed, or do not have sufficient cash flows from sales, we may be required to scale back or cease operations, liquidate our assets and possibly seek bankruptcy protection," the Company said in the quarterly report for the period ended March 31, 2014. CAR WASH HOLDINGS: Moody's Assigns 'B2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Mister Car Wash Holdings, Inc., including a B2 Corporate Family rating. Moody's also assigned a Ba3 rating to the company's proposed $30 million secured revolving credit facility and proposed $180 million secured term loan B. A stable outlook was also assigned. New ratings assigned include the following: Corporate Family Rating at B2 Probability of Default Rating at B2-PD Proposed $30 million senior secured revolving credit facility at Ba3(LGD3) Proposed $180 million senior secured first lien term loan at Ba3(LGD3) Ratings Rationale The new ratings are in conjunction with Mister Car Wash's acquisition by affiliates of Leonard Green & Partners, L.P. ("LGP"), with the initial capital structure to be comprised roughly 50/50 debt and new cash common equity contributed by LGP. "We believe Mister Car Wash to be a leading player in the car wash sub-segment, with significant positions in the markets in which it has chosen to operate, which in our view provides it with a formidable market position that somewhat offsets its initially weak quantitative credit profile," stated Moody's Vice President Charlie O'Shea. "Initial pro forma debt/EBITDA in the mid-7 times range is somewhat mitigated by EBITA/interest of around 2 times, and Moody's believe leverage will reduce meaningfully over the next 12-18 months, which is a key rating factor, as well as the company's historically excellent operating performance which drives very solid margins." Mister Car Wash's B2 corporate family rating recognizes its weak leverage metrics, with pro forma debt/EBITDA in the mid-7 times range, partially offset by moderate interest coverage of around 2 times. Moody's expect this leverage to decline over the next 12-18 months as the company uses its free cash flow to repay debt. Ratings also consider the company's market position, which despite its limited scope in a large and highly fragmented market, Moody's consider to be an asset given its strength in its chosen markets, as well as its excellent operating ability that results in very solid margins. Additionally, the company's financial risks are somewhat mitigated by its good liquidity, aided by Moody's expectation that the $30 million senior secured revolving credit facility will be undrawn at close, its negative working capital requirements, and its minimal maintenance capital expenditures, all of which should allow the company to continue to generate free cash flow. The stable outlook considers the company's steady historical operating performance, as well as reflects Moody's expectation that Mister Car Wash will prudently source and price its acquisitions, as well as integrate them with minimal disruption, either operationally or financially. Ratings could be upgraded if debt/EBITDA migrated towards 5.5 times and EBITA/interest was sustained above 2 times. Ratings could be downgraded if operating performance were to deteriorate or financial policy decisions resulted in debt/EBITDA not improving such that it began to trend towards 6.5 times over the next 12-18 months, or if EBITA/interest began trending towards 1.5 times. The Ba3 ratings assigned to the proposed $30 million secured revolver and the $180 million secured term loan reflect their senior position in the capital structure by virtue of a first priority security interest in substantially all assets, including all capital stock of the borrower and each of its subsidiaries. They also benefit from guarantees by the company's domestic subsidiaries. Moody's expect the revolver to be undrawn at closing, with proceeds from the proposed new term loan to be used to refinance the company's equity purchase price, as well as fees and expenses. The company is also expected to obtain $87.5 million of senior unsecured notes, which will be unrated. Headquartered in Tucson, Arizona, Mister Car Wash is the largest operator of car washes in North America, operating 134 car washes and 32 lube locations across 14 U.S. states. As of June 2014, LTM revenue was around $240 million. The principal methodology used in this rating was the Global Retail Industry 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. CATHEDRAL CITY: S&P Raises Rating on 2007C Sub. TABs From 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the Cathedral City Public Finance Authority, Calif.'s 2000A, 2004B, 2005A, 2007A, and 2007B parity tax allocation bonds (TABs) to 'BBB+' from 'BBB-', and raised its rating on the authority's 2007C subordinate TABs to 'BBB-' from 'B+'. The outlook is stable. "The upgrade reflects positive assessed values in the project area and additional money formerly reserved only for housing bonds that can now be included in the non-housing bond pledge, which increased debt service coverage," said Standard & Poor's credit analyst Michael Stock. In addition, Standard & Poor's assigned its 'BBB+' rating and stable outlook to the Successor Agency (SA) to the Redevelopment Agency of the City of Cathedral City's revenue refunding TABs series 2014A. Standard & Poor's assigned its 'A' rating and stable outlook to the SA's housing revenue refunding TABs series 2014B and 2014C. The rating reflects what S&P views as the SA's: -- Good 1.2x maximum annual debt service (MADS) coverage for the senior non-housing and good 2x MADS coverage for the housing bonds secured by pledged net tax revenues; -- Adequate 1.05x coverage on the subordinate non-housing bonds; -- Fully funded debt service reserves for all debt outstanding; -- A mature tax base with a volatility ratio of 0.13, which indicates moderately low sensitivity in incremental revenues to overall assessed value (AV) fluctuations; and -- Improvement in project area AV. Tempering factors include historically large AV declines of 23% during 2009-2013. The 2014A bonds are payable after provisions have been made for payment of the housing set-aside to pay the 2014B and 2014C TABs. Tax revenues additionally include money deposited from time to time in the redevelopment property tax trust fund. Tax revenues are no longer required to be deposited into the housing fund and, accordingly, such tax revenues shall be reduced by the amount not greater than the portion of the prior housing deposit required to pay the 2014 housing obligations. The 2000A, 2004B, 2005A, 2007A, and 2007B bonds are on parity with the 2014A bonds. The housing bonds are payable from and secured by the housing tax revenues to be derived from the project area. The 2007C subordinate TABs are payable from tax increment revenues subordinate to the 2014A bonds and other parity debt. "The stable outlook reflects our view of adequate MADS coverage by pledged revenues. Given this adequate coverage, stabilization of project area AV, and moderately low volatility ratio, we don't expect to change the rating in the next two years. Although we do not expect it, should AV decline or the SA fail to manage and prioritize its debt obligations in a timely manner in accordance with the trust indentures, or if various asset transfers are not approved by the State Controller, we could lower the rating," S&P noted. CENTRAL FEDERAL: Stockholders OK Issuance of Shares --------------------------------------------------- Central Federal Corporation held a special meeting of stockholders on Sept. 8, 2014, at which the stockholders approved the issuance of shares of common stock of the Company issuable upon conversion of the Company's Non-Cumulative Perpetual Preferred Stock, Series B, and the exercise of Warrants as required by and in accordance with NASDAQ Marketplace Rule 5635, according to a regulatory filing with the U.S. Securities and Exchange Commission. About Central Federal Fairlawn, Ohio-based Central Federal Corporation (Nasdaq: CFBK) is the holding company for CFBank, a federally chartered savings association formed in Ohio in 1892. CFBank has four full-service banking offices in Fairlawn, Calcutta, Wellsville and Worthington, Ohio. As reported by the TCR on April 24, 2014, the Board of Directors of Central Federal approved the engagement of BKD, LLP, to serve as the Company's independent registered public accounting firm for the year ending Dec. 31, 2014. Crowe Horwath LLP was dismissed as the Company's accounting firm on April 17, 2014. The Office of the Comptroller of the Currency has terminated the Cease and Desist Order against CFBank, a subsidiary of Central Federal Corporation, effective Jan. 23, 2014. The CFBank Order has been in place since May 25, 2011, which was prior to the 2012 capital raise and recapitalization of Central Federal Corporation and CF Bank by the current management team and standby investor group led by Timothy O'Dell (CEO), Thad Perry (President) and Robert Hoeweler (Chairman). Central Federal reported a net loss of $918,000 in 2013, a net loss of $3.76 million in 2012 and a net loss of $5.42 million in 2011. As of June 30, 2014, the Company had $294.45 million in total assets, $265.28 million in total liabilities and $29.17 million in total stockholders' equity. CENTRAL PLATTE: Fitch Assigns 'BB' Rating on $22.45MM GO Bonds -------------------------------------------------------------- Fitch Ratings assigns the 'BB' rating to the following Central Platte Valley Metropolitan District, CO general obligation (GO) bonds: -- $22.45 million GO refunding bonds, series 2014. Bond proceeds will be used to refund outstanding debt and fund a swap termination payment. The bonds are scheduled to price via negotiation during the week of Oct. 6. The Rating Outlook is Stable. SECURITY The 2014 bonds are secured by an unlimited annual property tax levy on all property located within the current boundaries of the district. KEY RATING DRIVERS HIGH CONCENTRATION; LIMITED BASE: The district's tax base is highly concentrated which is not unusual for limited purpose special districts. Ongoing construction and future development is not projected to reduce concentration due to the small geographic size of the district. TAX BASE DIFFERENTIALS/CONCENTRATION: The tax base that secures the 2014 bonds (the operating district) is a subset of the larger original district that secures the 2013A bonds (rated 'BBB-' by Fitch). The 'BB' rating on 2014 operating district bonds reflects a much higher tax payer concentration. DOWNTOWN DEVELOPMENT BOOM: The district encompasses one of Denver's major redevelopment efforts. Its strategic downtown location is fueling rapid growth in apartments, condominiums, and commercial office buildings, aided by the concurrent development of the Regional Transportation District's (RTD) bus and rail transit hub on adjacent property. The district has more than recouped recessionary assessed value (AV) losses. Recent and ongoing building activity should ensure a positive trajectory for the district's taxable values through 2016. MANAGEABLE TAX INCREASES ASSUMED: Fitch believes development in the district is likely to continue, but the Fitch's base case includes only the value of existing properties. Total operating district tax rate increases needed to meet level debt service in this scenario, assuming no substantial further tax base declines, are of a magnitude Fitch believes would be manageable. HIGH DEBT; LEVEL DEBT SERVICE: Overall debt is very high relative to market value and is amortized slowly. The completion of all infrastructure and lack of future debt plans should allow these metrics to improve slowly over time assuming at least modest tax base growth. RATING SENSITIVITIES SUSTAINED TAX BASE LOSSES: Large and sustained tax base losses could lead to negative rating pressure. CONCENTRATION LIMITS UPWARD MOVEMENT: The very high tax base concentration limits the rating to its current level. CREDIT PROFILE The Central Platte Valley Metropolitan District is located in lower downtown Denver and is in close proximity to Denver Union Station. PARTIALLY DISTINCT TAX BASES District bonds are secured by two distinct tax bases. The original 63 acre district secures the 2013A ULTGO bonds (rated 'BBB-' by Fitch). A smaller 38 acre subset of the original, the operating district, secures the 2014 ULTGO bonds. COMMERCIAL DOMINATES OPERATING DISTRICT The smaller operating district is comprised primarily of commercial office buildings, accounting for a high 84% of 2015 AV. Nearly all other properties are vacant land parcels which are zoned mixed-use, including commercial office properties, for future development. The operating district is adjacent to the historic Denver Union Station and the future hub of RTD's rail and bus operations. HIGH TAX BASE CONCENTRATION The operating district's tax base concentration is notably elevated with the top 10 taxpayers comprising 92% of 2015 AV. Commons 19 LLC is the largest tax payer, accounting for 30% of 2015 AV. Commons 19 LLC is the real property owner of the land containing a commercial office building and a parking structure. Legacy Plaza, a commercial property, is the second largest taxpayer at 16% and is fully leased as the Gates Rubber Company headquarters. The headquarters for DaVita Healthcare Partners' (IDR 'BB-' by Fitch) comprises 15% of the district's AV. MIXED GOVERNING BOARD The district's five-member governing board includes two members affiliated with current developers, East West Partners and Continuum Partners. Other board members are not currently affiliated with current property owners. East West Partners is the largest owner of remaining undeveloped property. HIGH DEBT BUT NO ANTICIPATED FURTHER NEEDS Overall debt to market value is very high at 21% which is not unusual for a limited purpose special district. Fitch notes that all infrastructure is in place for future development, precluding the need for any future debt. Additionally, the district does not owe developers for any advances or reimbursements, enhancing its operating flexibility. The current offering will refund a loan secured solely by the operating district and is in the form of a variable rate demand obligation. Concurrently, the associated swap will be terminated. The refunded loan was structured with a large balloon maturity in 2016 and served to provide bridge financing during the operating district's early years of development. Debt service is level. Payout is structured very slowly with only 19% of principal retired in 10 years. ANALYSIS DOES NOT ASSUME FUTURE AV GROWTH It's the district's goal to maintain or reduce mill rates for debt service for the first several years to provide sum sufficient coverage of higher annual debt service. Such a goal would require continued large AV gains which Fitch considers aggressive. However, substantial development is currently underway throughout the district. Properties completed in time for the 2015 collection year include three large residential apartment complexes (with project costs ranging from $30 million - $65 million) and two commercial projects for a total $148 million in estimated market value. As a result, the preliminary certified AV for 2015 posted a 14.6% gain over the year prior. Based on projects currently under construction, the district projects another large AV gain in 2016. Although 2016 is a reassessment year, Fitch believes the likelihood of reappraisal losses is less than in previous years given the reported results of recent property transactions on which market values are based. Projecting future tax base and development trends beyond the projects that have been completed is difficult. Fitch's base case assumes AV remains flat at the 2015 level. Total operating district debt service millage, to support operating and the larger district's debt service, would need to increase by a large 41% from the current level of 34 mills to 48 mills by 2016. Although this represents a steep increase, it's comparable to past debt service mill levy rates. The district has no employees and therefore no obligations for pension or other post-employment benefits (OPEB). The debt service fund balance currently totals $2.3 million in reserves pledged to the bonds, including a cash-funded debt reserve equal to 50% of AADS which Fitch considers positively given the district's early stage of development. CENTRO DE DIAGNOSTICO: Case Summary & 20 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Centro de Diagnostico Integral de PR, Inc. GPO Box 4367 San Juan, PR 00936 Case No.: 14-07489 Chapter 11 Petition Date: September 10, 2014 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Francisco J Ramos Gonzalez, Esq. FRANCISCO J. RAMOS & ASOCIADOS, CSP PO Box 191993 San Juan, PR 00919-1993 Tel: 787 764-5134 Fax: 787 758-5087 E-mail: fjramos@coqui.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jose Milton Soltero Ramirez, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/prb14-07489.pdf CLEAR CHANNEL: Inks $750MM Purchase Agreement with Goldman Sachs ---------------------------------------------------------------- Clear Channel Communications, Inc., and its affiliates entered into a purchase agreement with Goldman Sachs & Co. and Morgan Stanley & Co. LLC, as representatives of the several initial purchasers, relating to the issuance and sale of $750 million in aggregate principal amount of the Company's 9.0% Priority Guarantee Notes due 2022. The Notes will be fully and unconditionally guaranteed on a senior secured basis by CCU's parent, Clear Channel Capital I, LLC, and all of CCU's existing and future material wholly-owned domestic restricted subsidiaries. The Notes and the related guarantees will be secured by (1) a lien on (a) the capital stock of CCU and (b) certain property and related assets that do not constitute "principal property", in each case equal in priority to the liens securing the obligations under CCU's senior secured credit facilities and existing priority guarantee notes and (2) a lien on the accounts receivable and related assets securing CCU's receivables based credit facility junior in priority to the lien securing CCU's obligations thereunder. CCU intends to use the gross proceeds from this offering to prepay at par $729 million of the loans outstanding under its term loan B facility and $12.1 million of the loans outstanding under its term loan C?asset sale facility, to pay accrued and unpaid interest with regard to those loans to, but not including, the date of prepayment, and to pay fees and expenses related to the offering and the prepayment. About Clear Channel Communications San Antonio, Texas-based Clear Channel Communications, Inc., an indirect subsidiary of CC Media Holdings, Inc. (OTCBB: CCMO), is one of the leading global media and entertainment companies specializing in radio, digital, outdoor, mobile, live events, and on-demand entertainment and information services for local communities and providing premier opportunities for advertisers. CC Media Holdings Inc. -- http://www.ccmediaholdings.com/-- is a global media and entertainment company. Its businesses include radio and outdoor displays. Clear Channel reported a net loss attributable to the Company of $606.88 million in 2013, a net loss attributable to the Company of $424.47 million in 2012 and a net loss attributable to the Company of $302.09 million in 2011. The Company's balance sheet at June 30, 2014, showed $14.75 billion in total assets, $24.06 billion in total liabilities and a $9.31 billion total shareholders' deficit. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2013, "If our and our subsidiaries' cash flows from operations, refinancing sources and other liquidity-generating transactions are insufficient to fund our respective debt service obligations, we may be forced to reduce or delay capital expenditures, sell material assets or operations, or seek additional capital. We may not be able to take any of these actions, and these actions may not be successful or permit us or our subsidiaries to meet the scheduled debt service obligations. Furthermore, these actions may not be permitted under the terms of existing or future debt agreements." "The ability to refinance the debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of the debt could be at higher interest rates and increase debt service obligations and may require us and our subsidiaries to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. These alternative measures may not be successful and may not permit us or our subsidiaries to meet scheduled debt service obligations. If we or our subsidiaries cannot make scheduled payments on indebtedness, we or our subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result we could be forced into bankruptcy or liquidation." * * * In May 2013, Moody's Investors Service said that Clear Channel's upsize of the term loan D to $4 billion from $1.5 billion will not impact the Caa1 facility rating assigned. Clear Channel's Corporate Family Rating is unchanged at Caa2. The outlook remains stable. As reported by the TCR on May 21, 2013, Standard & Poor's Ratings Services also announced that its issue-level rating on San Antonio, Texas-based Clear Channel's senior secured term loan remains unchanged at 'CCC+' following the company's upsize of the loan to $4 billion from $1.5 billion. The rating on parent company CC Media Holdings remains at 'CCC+' with a negative outlook, which reflects the risks surrounding the long-term viability of the company's capital structure. CHINA GINSENG: KCG Americas Reports 17.4% Equity Stake ------------------------------------------------------ In a Schedule 13G filed with the U.S. Securities and Exchange Commission, KCG Americas LLC disclosed that as of Aug. 29, 2014, they beneficially owned 7,746,500 shares of common stock of China Ginseng Holdings, Inc., representing 17.45% based on outstanding shares reported in the Company's 10-Q for the period ended March 31, 2014, filed with the SEC. A copy of the regulatory filing is available at http://is.gd/ReVePn About China Ginseng Changchun City, China-based China Ginseng Holdings, Inc., conducts business through its four wholly-owned subsidiaries located in China. The Company has been granted 20-year land use rights to 3,705 acres of lands by the Chinese government for ginseng planting and it controls, through lease, approximately 750 acres of grape vineyards. However, recent harvests of grapes showed poor quality for wine production which indicates that the vineyards are no longer suitable for planting grapes for wine production. Therefore, the Company has decided not to renew its lease for the vineyards with the Chinese government upon expiration in 2013 and, going forward, it intends to purchase grapes from the open market in order to produce grape juice and wine. The Company's balance sheet at March 31, 2014, showed $11.6 million in total assets, $14.31 million in total liabilities, and a stockholders' deficit of $2.7 million. "The Company had an accumulated deficit of $11.11 million as of March 31, 2014 and there are existing uncertain conditions the Company foresees relating to its ability to obtain working capital and operate successfully. These matters raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing," the Company stated in its quarterly report for the period ended March 31, 2014. CIRCUIT CITY: $8-Mil. Preference Claim Against Sony Not Barred -------------------------------------------------------------- Bankruptcy Judge Kevin R. Huennekens ruled on cross-motions for summary judgment filed in the adversary proceeding, ALFRED H. SIEGEL, Plaintiff, v. SONY ELECTRONICS, INC., a/k/a Sony, et al, Defendants, Adv. Proc. No. 10-03600-KRH (Bankr. E.D. Va.). Mr. Siegel is the Trustee of the Circuit City Stores, Inc. Liquidating Trust. The parties presented four primary issues upon which the Court was asked to rule. Those were: (i) whether the Trustee is barred from recovering approximately $58.6 million in chargebacks and billbacks that Circuit City earned under the dealer agreement governing the parties' transactions on account of the applicable 18-month statute of limitations; (ii) whether the Trustee is barred from recovering an $8 million preferential transfer claim on account of the applicable two-year statute of limitations; (iii) whether Sony can use the value of goods it delivered to Circuit City during the twenty days immediately preceding the commencement of its bankruptcy case both to recover full payment under 11 U.S.C. Sec. 503(b)(9) and to assert a new value defense under 11 U.S.C. Sec. 547(c)(4); and (iv) whether the Trustee may invoke the doctrine of equitable recoupment to circumvent Sony's affirmative statute of limitations defense in order to apply the credits Circuit City earned under the Dealer Agreement as a defense against Sony's claims. The Court ruled that it could not grant Sony summary judgment on the Trustee's claim to recover credits earned under the Dealer Agreement because the statute of limitations defense presents mixed questions of fact and law. Those issues must be reserved for trial. The Court also ruled that the statute of limitations does not bar the Trustee's $8 million preference claim because the amendment that added the claim relates back to the filing of the original complaint. The Court ruled that, based on its prior decision in Circuit City Stores, Inc. v. Mitsubishi Digital Electronics America, Inc. (In re Circuit City Stores, Inc.), No. 10-03068-KRH, 2010 WL 4956022 (Bankr. E.D. Va., Dec. 1, 2010), Sony cannot use the delivery of the same goods both to recover a 11 U.S.C. Sec. 503(b)(9) claim and to assert a new value defense under 11 U.S.C. Sec. 547(c)(4). The Court also granted the Trustee's motion for summary judgment, permitting the Trustee to use Circuit City's earned credits as a defensive offset against Sony's pending claims against the estate. A copy of the Court's Sept. 8 Memorandum Opinion setting forth the Court's analysis and conclusions that support its prior rulings, is available at http://is.gd/xwDVwufrom Leagle.com. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 08-35653) on Nov. 10, 2008. InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, served as the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, acted as the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel was Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC served as the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City opted to liquidate its 721 stores and obtained the Bankruptcy Court's approval to pursue going-out-of-business sales, and sell its store leases in January 2009. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. On Sept. 14, 2010, the Court entered an order confirming the Debtors' Plan of Liquidation, which created the Circuit City Stores, Inc. Liquidating Trust and appointed Alfred H. Siegel as Trustee. The Plan became effective Nov. 1, 2010. COMJOYFUL INTERNATIONAL: Has $522K Net Loss in June 30 Quarter -------------------------------------------------------------- Comjoyful International Company filed its quarterly report on Form 10-Q, disclosing a net loss of $522,279 on $306,574 of revenues for the three months ended June 30, 2014, compared with a net loss of $527,045 on $91,498 of revenues for the same period last year. The Company's balance sheet at June 30, 2014, showed $2.4 million in total assets, $6.76 million in total liabilities, and a stockholders' deficit of $4.36 million. The Company had recurring consolidated losses of $1.13 million for the six months ended June 30, 2014 and $999,565 for the six months ended June 30, 2013, negative working capital of $3.44 million as of June 30, 2014 and $2.79 million as of Dec. 31, 2013, and has a total deficit of $7.21 million as of Dec. 31, 2013. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/zOmk4H The company was formerly known as Camelot Corporation and changed its name to Comjoyful International Company in January 2013. Comjoyful was incorporated in 1975 and is based in Beijing, China. Comjoyful does not have significant operations. The company intends to acquire an operating company. Previously, it focused on the mineral exploration activities in the United States. COMMACK HOSPITALITY: To Make $125K Monthly Payments to Stabilis --------------------------------------------------------------- Judge Alan S. Trust of the U.S. Bankruptcy Court for the Eastern District of New York approved a stipulation providing for Commack Hospitality, LLC, to provide monthly adequate protection payments to Stabilis Master Fund III, LLC, from the cash collateral account in the amount of $125,000, commencing with a payment as of July 10, 2014. The stipulation was approved in conjunction with Judge Trust's approval of the second amended disclosure statement explaining the Debtor's Chapter 11 Plan, allowing the Debtor to commence solicitation of votes for its Plan. The hearing at which the Court will consider confirmation of the Plan will commence on Oct. 1, 2014, at 2:00 p.m., prevailing Eastern Time. Stabilis is the holder of a note and mortgage on the Debtor's property. Stabilis filed a proof of claim in which it asserts a secured claim in the amount of $12,629,257. The Debtor objected to the amount of Stabilis' claim, alleging that Stabilis overstated its claim by $1.5 million. Stabilis contends that the Debtor's Plan is not "feasible" because it is "highly speculative." The Debtor disagrees with Stabilis' view as to the Plan's feasibility and believes that it will prevail on this issue at confirmation. Stabilis also intends to object to confirmation of the Plan on the ground that the proposed treatment of the Stabilis Claim is not "fair and equitable." Stabilis intends to raise a number of arguments in support of this objection regarding the proposed rate of interest on its claim, the duration of the pay down of its claim and the use of the excess cash generated from the LIWEN Lease. The Debtor believes the Plan is fair and equitable as it relates to the Stabilis Claim. About Commack Hospitality Commack Hospitality, LLC, filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 14-70931) on March 10, 2014. The petition was signed by Viral Patel as managing member. In its schedules and statements, the Debtor listed $17 million in assets and $13 million in liabilities. Laurence May, Esq., and Mark Tsukerman, Esq., of Cole Schotz Meisel Forman & Leonard PA serve as the Debtor's counsel. Judge Alan S. Trust presides over the case. COMMUNITY MEMORIAL: Trustee Can Sell Cheboyan Property ------------------------------------------------------ Judge Daniel S. Opperman of the U.S. Bankruptcy Court for the Eastern District of Michigan, Northern Division, authorized A. Brooks Darling, the liquidating trustee for Community Memorial Hospital, d/b/a Cheboygan Memorial Hospital, to sell the bankruptcy estate's interest in the real property located in Cheboygan, Michigan, to Brian K. Williams for $22,500, subject to better and higher bids. If the Liquidating Trustee receives any higher or better offers, then he will conduct a public auction. If no other bidder comes forward by the deadline to be set by the Liquidating Trustee, then no auction will occur and the Liquidating Trustee will close the sale with Mr. Williams. About Community Memorial Hospital Community Memorial Hospital, operator of the Cheboygan Memorial Hospital, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 12-20666) on March 1, 2012. Judge Daniel S. Opperman oversees the case. Paul W. Linehan, Esq., and Shawn M. Riley, Esq., at McDonald Hopkins LLC, in Cleveland, Ohio; and Jayson Ruff, Esq., at McDonald Hopkins LLC, in Bloomfield Hills, Michigan, represent the Debtor as counsel. The Debtor's financial advisor is Conway Mackenzie Inc. The Debtor disclosed $23,085,273 in assets and $26,329,103 in liabilities as of the bankruptcy filing. Opened in 1942, the Debtor is an independent, not-for-profit entity, organized exclusively for charitable, scientific and educational purposes, and holds tax exempt status in accordance with Section 501(c)(3) of the Internal Revenue Code. The Cheboygan Memorial Hospital is a 25-bed critical access hospital located in Cheboygan, Cheboygan County, a community on the Lake Huron coast. The Debtor has 395 employees. McLaren Health Care Corporation proposed to acquire substantially all of the Debtor's operating assets at its primary hospital campus, for $5,000,000, plus (2) all amounts required for the Debtor to cure and assume the assigned Assumed Contracts and Leases. Daniel M. McDermott, the U.S. Trustee for Region 9, appointed a five-member official committee of unsecured creditors in the Chapter 11 case of Community Memorial Hospital. Michael S. McElwee, Esq., at Varnum LP, in Grand Rapids, Michigan, represents the Unsecured Creditors' Committee as counsel. The Creditors Committee won confirmation of its Corrected First Amended Plan of Liquidation for the Debtor in August 2013. A liquidating trust is established to liquidate the Debtor's remaining assets and distribute the proceeds to creditors. A. Darling Brooks has been designated as liquidating trustee. CONFEDERATE MOTORS: Incurs $28K Net Loss for Second Quarter ----------------------------------------------------------- Confederate Motors, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $28,614 on $589,044 of sales for the three months ended June 30, 2014, compared with a net loss of $161,658 on $402,720 of sales for the same period last year. The Company's balance sheet at June 30, 2014, showed $1.14 million in total assets, $1.7 million in total liabilities, and a stockholders' deficit of $559,156. The Company had an accumulated deficit incurred through June 30, 2014, which raises substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/BBE3n0 Confederate Motors, Inc., manufactures and sells handcrafted street motorcycles for high net worth customers in the United States. It offers the X132 Hellcat and X132 Hellcat Combat model motorcycles. The company also provides motorcycle related products, including various wearing apparel and other related accessories displaying the Confederate name through its Website. Confederate Motors, Inc. was founded in 1991 and is headquartered in Birmingham, Alabama. CONNER CREEK: S&P Lowers Rating on 2007 Refunding Bonds to 'B+' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating to 'B+' from 'BB-' on Conner Creek Academy East (CCAE), Mich.'s series 2007 revenue and refunding bonds. The outlook is negative. "The rating action reflects our view of the inherent uncertainty associated with charter renewals given that the final maturity date of the bonds exceeds that of the charter," said Standard & Poor's credit analyst Phillip Pena. "Particular risks are CCAE's razor-thin covenant levels and consistent elementary and middle school academic woes," Mr. Pena added. The negative outlook reflects S&P's view that CCAE faces uncertainty in terms of cash, academic performance, and covenants. CUI GLOBAL: First Eagle Reports 10% Equity Stake ------------------------------------------------ First Eagle Investment Management, LLC, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, disclosed with the U.S. Securities and Exchange Commission that as of Aug. 31, 2014, it beneficially owned 2,110,485 shares of common stock of CUI Global, Inc., or 10.23% of the Common Stock believed to be outstanding, as a result of acting as investment advisor to various clients. First Eagle previously owned 1,692,753 shares at May 13, 2014. A copy of the regulatory filing is available for free at http://is.gd/U0Jt9Y About CUI Global Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx, Inc., is a platform company dedicated to maximizing shareholder value through the acquisition, development and commercialization of new, innovative technologies. CUI Global reported a net loss allocable to common stockholders of $1.75 million in 2013, a net loss allocable to common stockholders of $2.52 million in 2012 and a net loss allocable to common stockholders of $48,763 in 2011. As fo June 30, 2014, the Company had $100.36 million in total assets, $27.96 million in total liabilities and $72.39 million in total stockholders' equity. DANA BLUMENSAADT: Ohio Bankruptcy Judge Won't Recuse Self --------------------------------------------------------- Bankruptcy Judge John P. Gustafson declined to recuse himself from the Chapter 11 case of Dana L. Blumensaadt. The Debtor sought recusal of the judge who once served as Chapter 13 trustee in Blumenstaadt's previous Chapter 13 case, case number 13-30844. Blumenstaadt sought Chapter 13 bankruptcy on March 7, 2013 and that case was dismissed on December 18, 2013. She filed for Chapter 11 (Bankr. N.D. Ohio Case No. 14-32633) on July 18, 2014. Her Chapter 11 case is related to two previously filed Chapter 11 cases that were assigned to Judge Gustafson -- the case filed by her husband, William Ernst Blumenstaadt, Jr., case number 14- 31968, on May 29, 2014; and the case filed by Island Stillwater Company, Ltd., case number 14-31970, also on May 29, 2014. Both of those related cases have been dismissed pursuant to agreements reached in response to Motions to Dismiss filed by the Office of the United States Trustee. The previous Chapter 13 case was assigned to the "successor judge docket" maintained after the death of the Honorable Richard L. Speer. In the Chapter 13 Office, cases were split between the Chapter 13 Trustee (at that time, John P. Gustafson) and the then staff attorney (now Chapter 13 Trustee), Elizabeth A. Vaughan. All cases assigned to Judge Speer, or that were assigned to the successor judge docket, were handled by the staff attorney, Elizabeth A. Vaughan. According to Judge Gustafson, "the fact that I served as the Chapter 13 trustee in a previous case filed by the Debtor, standing alone, does not provide a sufficient basis for a recusal under this objective standard." A copy of the Court's September 8, 2014 Order is available at http://tinyurl.com/l4smq4yfrom Leagle.com. DELL INC: Fitch Affirms 'BB-' Issuer Default Rating --------------------------------------------------- Fitch Ratings has affirmed the Long-term Issuer Default Rating (IDR) of Dell, Inc. (Dell) and its direct wholly-owned subsidiary, Dell International Inc. (Dell International) at 'BB-'. The Rating Outlook is Stable. KEY RATINGS DRIVERS Dell's ratings and Outlook reflect: -- Adequate financial flexibility supported by Dell's significant cash balance, the majority of which is overseas, a largely undrawn $2 billion asset-based revolving credit facility, partially offset by a significant and increased working capital deficit that could weigh on liquidity if revenue materially declines. -- Management remains committed to using FCF primarily for debt reduction. Dell's core credit metrics are essentially in- line with Fitch's base case forecast at the time of the leveraged buyout (LBO) and remain consistent with a 'BB-' rating. Dell achieved Fitch's core leverage forecast since the close of the LBO on Oct. 29, 2013 through Aug. 1, 2014 primarily due to sustainable, but largely one-time working capital benefits, cost reduction actions and favorable conditions in the commercial PC market (expiration of Windows XP support). -- Credit metrics improved as expected, especially core (non- financing), excluding purchase price accounting adjustments (PPA), albeit partially funded with cash flow from working capital due to a material increase in days payable outstanding. Fitch estimates Dell's total core leverage excluding PPA was 3.4x as of Aug. 1, 2014 compared with 4.6x at Nov. 1, 2013. -- Significant scale, which provides procurement efficiencies for memory, hard disk drives and other components utilized across the hardware business, specifically PCs, servers and storage. -- Highly diversified revenue base by customer and geography (50% outside U.S.) Ratings concerns center on: -- The vast majority of Dell's revenue continues to be largely transactional and derived from Client Solutions predominately in the commercial market (formerly End User Computing). Commercial PC demand has benefitted from Microsoft's end of support for Windows XP in April 2014 but the commercial XP refresh is nearing completion, likely leading to a near-term moderation in commercial PC demand. Positively, Dell's PC business has gained market share for six consecutive calendar quarters ended June 30, 2014, according to IDC. Dell's PC unit shipments increased 7% in the latest 12 months ended June 30, 2014 compared with an overall PC market decline of 4.9%. Dell's unit market share gains reflect improved execution, a predominately commercial customer mix with less exposure to weak consumer markets and vendor consolidation as the top five vendors represented 66% of global PC shipments in the quarter ended June 30, 2014 compared with slightly less than 60% in the year-ago period. Consumer PC demand remains weak, and Fitch believes a sustainable improvement in the global PC market is unlikely without an unexpected resurgence in consumer interest, given consumers account for approximately 60% of total worldwide PC shipments, according to Intel. -- Dell's higher margin Enterprise Solutions Group (ESG), a key component of Dell's transformation to an end-to-end provider of IT solutions, has materially lagged Fitch's expectations. -- Aggressive industry pricing environment for PCs and servers, particularly for the hyperscale server market. -- Limited financial flexibility to make significant acquisitions to fill product and service gaps that may arise as technologies evolve without adversely affecting the ratings. RATINGS SENSITIVITIES Negative rating actions could occur if: i) pre-dividend FCF margin falls below 2% for a sustained period, ii) FFO adjusted leverage exceeds 6x for a sustained period, iii) PC revenue declines significantly, materially pressuring liquidity, profitability and FCF generation, or iv) revenue growth is negative for an extended duration, resulting in significant liquidity pressures. Dell's negative cash conversion cycle generates significant cash flow usage from working capital in a declining revenue environment. Positive rating actions could occur if: i) Revenue mix materially shifts toward enterprise solutions, resulting in significant operating profit margin expansion, reduced reliance on the extremely competitive PC industry and lower financial performance volatility due to a greater percentage of recurring revenue from long-term contracts, such as IT services or software, or ii) FCF is primarily used for debt reduction rather than acquisitions, resulting in FFO adjusted leverage below 4x for a sustained period. Fitch has affirmed Dell's ratings as follows: Dell -- Issuer Default Rating (IDR) at 'BB-'; and -- Senior unsecured notes and debentures at 'B+'. Dell International -- Issuer Default Rating (IDR) at 'BB-'; -- Senior secured revolving credit facility (RCF) at 'BB+'; -- Senior secured loans at 'BB+'; and -- Senior secured notes at 'BB+'; DPX HOLDINGS: S&P Retains 'B' CCR Following Upsized Term Loan ------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Durham, N.C.-based pharmaceutical contract services provider DPx Holdings B.V., including its 'B' corporate credit rating, are not affected by the company's announcement that it will issue an incremental $250 million first-lien term loan add-on to fund the acquisition of Gallus BioPharmaceuticals. S&P's rating on the term loan remains 'B' with a '3' recovery rating, which indicates S&P's expectation for meaningful (50%-70%) recovery in the event of default. The additional debt increases leverage to about 7.3x from around 6.7x, and the acquisition is consistent with S&P's expectation that DPx will continue to be aggressive in pursuing consolidation opportunities in this space. While the addition of Gallus improves DPx's scale in the fast-growing biologics segment, business risk remains characterized by the company's narrow business focus as a provider of services to the global biopharmaceutical industry, barriers to entry that support the market positions of incumbents, including DPx, and a highly acquisitive growth strategy that has resulted in transformative acquisitions over the last two years. The transaction has no impact on either S&P's "fair" business risk assessment or "highly leveraged" financial risk assessment. RATINGS LIST DPx Holdings B.V. Corporate Credit Rating B/Stable/-- USD$1060M First-lien term ln B Recovery rating 3 DPX HOLDINGS: Moody's Affirms B2 Rating on $250MM Add-on Sr. Loan ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of DPx Holdings B.V. (DPx, formerly known as JLL/Delta NewCo B.V. or Patheon), including the B2 rating on the existing senior secured term loan due 2021 following the proposed $250 million add-on. Net proceeds from the incremental term loan will primarily be used to fund the acquisition of Gallus BioPharmaceuticals (Gallus), a contract manufacturing company specializing in biologics. The rating outlook is stable. "We are mindful of the long-term strong strategic rationale for the Gallus transaction, such as the combination of complementary product and service lines as well as benefits to DPx's existing biologics business resulting from the expansion of biologics capabilities and geographic footprint," stated John Zhao, Moody's Vice President -- Senior Analyst. "However we view this transaction as credit negative because of the increase in the already significant execution risk associated with the on-going substantial integration of DSM Pharmaceutical Products (DPP) into Patheon." The initial increase in leverage resulting from the current transaction, the anticipated weak free cash flow generation over the next year and uncertainty around the company's financial policy and appetite for additional debt-financed acquisitions also remain important rating considerations. "The ability to execute the integration plan and operational efficiency initiatives in the next 12-18 months will be an important factor in enabling DPx to keep leverage at acceptable levels for its current rating," added Zhao. The following ratings were affirmed: Corporate Family Rating at B3 Probability of Default Rating at B3-PD First lien revolving credit facility expiring 2019 at B2, LGD3 First lien term loans due 2021 at B2, LGD3 Senior unsecured notes due 2022 at Caa2, LGD5 Rating Rationale DPx's B3 Corporate Family Rating reflects its high financial leverage and the expectation that free cash flow will be negative in the near term in part due to the costs associated with integration and restructuring. The rating also reflects high execution risks associated with the DPP merger and Gallus acquisition, despite management's past track record of integrating the Banner acquisition. Broader challenges in the contract manufacturing industry, including overcapacity, pricing pressure and inherent earnings volatility partly due to its significant fixed cost structure, all constrain the rating. Supporting the rating is the company's larger scale, enhanced production capability and increased product offerings from business combinations, which are important differentiating factors in the contract manufacturing organization (CMO) industry. Moody's also recognizes the steady operating and financial improvements achieved at DPx's legacy CMO business. The rating is further supported by Moody's expectation that the demand for contract manufacturing services will grow over the long-term. The rating outlook is stable, and incorporates Moody's expectation that the company will maintain an adequate liquidity profile despite significant upfront cash costs associated with integration and restructuring activities. The stable outlook also reflects Moody's expectation that DPx's margins will improve as a result of savings from implementing operating efficiency initiatives and restructuring efforts, and that the company achieves steady deleveraging over the near-term. Moody's could downgrade the ratings if the company is unable to de-lever from the existing level, or if free cash flow remains negative (exclusive of unusual items such as severance). Deterioration of liquidity for any reason would also lead to a downgrade. Moody's could upgrade the ratings if the company is able to materially improve profitability, reduce earnings volatility and sustain debt to EBITDA below 5.0 times. Moody's would also need to gain comfort that the company can successfully integrate the DPP and Gallus businesses and operate with sustained positive free cash flow. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. DPx Holdings B.V. is a leading provider of commercial manufacturing and pharmaceutical development services for branded and generic prescription drugs to the pharmaceutical industry globally as well as a provider of active pharmaceutical ingredients to large biopharmas and crop protection and other chemical industries. E. H. MITCHELL: Files Third Amended Disclosure Statement -------------------------------------------------------- According to E. H. Mitchell & Company, L.L.C.'s Third Amended Disclosure Statement, the Debtor's Chapter 11 Plan proposes 100% payment to all creditors. The Debtor proposed to fund the plan obligations from business income and the sale of some or all of its immoveable properties. Payments will be made to Unsecured Creditors periodically until paid in full or paid in advance based on unanticipated excess revenues or the sale of properties. A copy of the Third Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/EHMITCHELL_172_3ds.pdf About E. H. Mitchell & Company LLC E. H. Mitchell & Company LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 13-12786) on Oct. 8, 2013. The case is assigned to Judge Jerry A. Brown. The Debtor is represented by Robert L. Marrero, Esq., at Robert Marrero, LLC, in New Orleans, Louisiana. The Debtor disclosed $300,027,297 in assets and $1,281,148 in liabilities. The petition was signed by Michael Furr, secretary/member. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, has appointed three members to the official committee of unsecured creditors. E. H. MITCHELL: Conversion/Dismissal Hearing Resumes Nov. 6 ----------------------------------------------------------- The Bankruptcy Court continued until Nov. 6, 2014, at 10:00 a.m., the hearing to consider U.S. Trustee's motion to convert the Chapter 11 case of E. H. Mitchell & Company LLC to one under Chapter 7 of the Bankruptcy Code. At the hearing, the Court will also consider the objections filed by the Debtor and creditor Ezkovich & Co., LLC, and reply filed by creditor Reginald James Laurent. In a supplemental memorandum, Mr. Laurent stated that since the motion to convert/dismiss was filed, additional statutory grounds to convert the case have been discovered, including: 1) substantial or continuing loss to or diminution; 2) failure to produce CMC's financial records; 3) misrepresentation and gross mismanagement of the estate; 4) unauthorized use of cash collateral; 5) failure to file timely reports; and 6) failure to confirm. Mr. Laurent pointed out that since May 2014, the Debtor, in its disclosure statements, has expressed the preference to be dismissed rather than converted. This change in tack demonstrates deception and the delay tactics, according to Mr. Laurent. Mr. Laurent asks the Court to grant the U.S. Trustee's motion to convert the case because dismissal will only cause delay and further prejudice him. About E. H. Mitchell & Company LLC E. H. Mitchell & Company LLC sought protection under Chapter 11 of the Bankruptcy Code on Oct. 8, 2013, (Case No. 13-12786, Bankr. E.D. La.). The case is assigned to Judge Jerry A. Brown. The Debtor is represented by Robert L. Marrero, Esq., at Robert Marrero, LLC, in New Orleans, Louisiana. The Debtor disclosed $300,027,297 in assets and $1,281,148 in liabilities. The petition was signed by Michael Furr, secretary/member. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, has appointed three members to the official committee of unsecured creditors. EAGLE BULK: Incurs $44.66-Mil. Net Loss for Q2 Ended June 30 ------------------------------------------------------------ Eagle Bulk Shipping Inc. filed its quarterly report on Form 10-Q, disclosing a net loss of $44.66 million on $42.38 million of revenues for the three months ended June 30, 2014, compared with a net loss of $3.04 million on $44.24 million of revenues for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $1.68 billion in total assets, $1.22 billion in total liabilities, and stockholders' equity of $464 million. On March 19, 2014, the Company received waivers for the violation of the maximum leverage ratio covenant under its Credit Agreement as of Dec.31, 2013 and the expected violation of the maximum leverage ratio and minimum interest coverage ratio covenants at March 31, 2014. The Waivers were extended through Aug. 5, 2014, subject to certain conditions and the satisfaction of certain milestones. Given the uncertainty as to whether the Company would be able to comply with the terms of the Waivers within the time frames provided, the Company has concluded that there is substantial doubt about its ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/AZFac8 About Eagle Bulk Shipping With headquarters in New York, Eagle Bulk Shipping Inc. (Nasdaq: EGLE) provides ocean-borne transportation services for a broad range of major and minor "dry bulk" cargoes, including iron ore, coal, grain, cement, and fertilizer, along worldwide shipping routes. Each of Eagle's 45 vessels is flagged in the Marshall Islands and owned by a separate wholly-owned subsidiary organized as a limited liability company under the Marshall Islands. On Aug. 6, 2014, Eagle Bulk entered into a restructuring support agreement with certain of its lenders regarding the terms of a balance sheet restructuring that will reduce debt by $975 million. To implement the restructuring, Eagle Bulk, the parent company, commenced a voluntary "prepackaged" chapter 11 case (Bankr. S.D.N.Y. Case No. No. 14-12303). The case has been assigned to the Honorable Sean H. Lane. The Chapter 11 filing does not include any of Eagle Bulk's operating or management subsidiaries. The Company estimated $850 million to $950 million in assets and debt of $1.21 billion as of the Petition Date. The Company has tapped Tyson M. Lomazow, Esq., and Matthew Brod, Esq., at Milbank, Tweed, Hadley & McCloy LLP as general bankruptcy counsel, Moelis & Company as financial advisor and investment banking advisor, Alvarez & Marsal as restructuring advisors, and PricewaterhouseCoopers LLP as its accountant and auditor. Eagle Bulk's noticing agent is Kurtzman Carson Consultants. Wilmington Trust (London) Limited, solely in its capacity as successor agent and security trustee under a 2012 credit agreement, is represented by Andrew Rosenberg, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP. EFUSION SERVICES: Creditors Seek Dismissal of Chapter 11 Case ------------------------------------------------------------- Creditors John Dorsey, Thomas McCann and Anthony Maley submitted on August 18, 2014, a closing brief in support for their motion dismissing the bankruptcy case. The creditors said dismissal is warranted because they alleged the bankruptcy case was filed in bad faith. The primary consideration of bad faith, among others, is the withdrawal on the issue of mismanagement of the EPS Entities by Messrs. Dorsey and McCann at the trial. Teh creditors allege that in the first eight months of the bankruptcy case, the debtor has provided eight different combination of reasons for the filing of the bankruptcy proceeding. Some considerations were also taken by the creditors of the evident bad faith of the debtor. Among them, the debtor has only one asset. It has only a few unsecured creditors and that it has no employees. Dorsey et al. are represented by: Daniel J. Garfield, Esq. FOSTER GRAHAM MILSTEIN & CALISHER 360 S. Garfield St., 6th Fl. Denver, CO 80209 Tel: (303) 333-9810 Fax: (303) 333-9786 E-mail: dgarfield@fostergraham.com About eFusion Services LLC eFusion Services LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Colo. Case No. 13-30740) on Dec. 20, 2013. The petition was signed by Paul Lufkin, Manager of eFusion Management LLC. The Debtor disclosed total assets of $39 million and total liabilities of $32.6 million, according to amended schedules filed with the Court. The Hon. Michael E. Romero presides over the case. The Debtor employed Powell Theune PC as its counsel. Richard A. Weiland, the U.S. Trustee for Region 19, was not able to form an Official Committee of Unsecured Creditors in the bankruptcy case of eFusion Services LLC because there were too few unsecured creditors who are willing to serve on the Committee. eRESEARCH TECHNOLOGY: Moody's Alters Ratings Outlook to Negative ---------------------------------------------------------------- Moody's Investors Service affirmed eResearch Technology's ("ERT") ratings. The Corporate Family rating was affirmed at B2, the Probability of Default rating ("PDR") was affirmed at B2-PD and the senior secured debt rating was affirmed at B1. The ratings outlook was revised to negative from stable. Ratings Rationale "The recent interruption in revenue from its largest client will likely drive EBITDA declines in 2014, leading to weakened financial metrics and financial covenant tightness,"" said Edmond DeForest, Moody's Senior Credit Officer. The B2 corporate family rating ("CFR") reflects a small revenue base below $250 million and financial leverage expected to rise above 5.5 times. However, ERT's leading position in the niche market for new drug trial subject cardiac safety and respiratory efficacy testing and strong demand for its clinical trial services leads to high revenue visibility from its backlog with a concentrated set of leading pharmaceutical companies. A decision by ERT's largest client to outsource its new clinical drug trials entirely to contract research organizations ("CROs") will drive a decline in revenues in 2014. However, Moody's expects work from this client to resume through the designated CROs at or above their prior volume in 2015. Moody's expects revenue to decline to about $220 million in 2014, but to recover to about $250 million in 2015, with debt to EBITDA returning to below 5 times. Free cash flow expected to be about $15 million in 2014 is limited by the interest burden from $73 million of 13% subordinated debt (unrated). Additional rating pressure comes from expectations of tightness in financial covenants. All financial metrics reflect Moody's standard adjustments. The negative rating outlook reflects Moody's concerns that the large customer volume may be not replaced in full, or that it may return more slowly than anticipated. A downgrade could occur if revenue does not recover as Moody's expects, profitability declines, or liquidity deteriorates . The ratings could be upgraded if, through new products and services, ERT can substantially grow and diversify its revenue base while maintaining conservative financial policies, achieving levels of profitability and free cash flow generation which cause Moody's to expect debt to EBITDA to be maintained below 3.75 times. Actions: Issuer: eResearch Technology, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured, Affirmed B1 Outlook, Changed To Negative From Stable The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ERT is a provider of cardiac safety, respiratory efficacy and electronic patient reported outcomes solutions to pharmaceutical and healthcare organizations sponsoring or involved in the clinical trial of new drugs owned by affiliates of Genstar Capital. Moody's expects revenue of over $250 million and at least $75 million of EBITDA in 2015. ERF WIRELESS: Sells Angus Capital Debts to CP US Income and IBC --------------------------------------------------------------- On Jan. 29, 2014, and on April 24, 2014, ERF Wireless, Inc., completed Settlement Agreements and Stipulation with CP US Income Group, LLC, and IBC Fund, LLC, respectively, whereby in settlement of $150,000, and $172,500 the Company owed to Angus Capital Partners pursuant to a 2006 Note the Company had with Angus, the Company agreed to allow (a) CP to purchase $150,000 of the Angus Note from Angus; and (b) IBC to purchase $172,500 of the Angus Note from Angus. On Jan. 29, 2014, Angus sold to CP $142,500 of the $150,000 debt that the Company owed to Angus pursuant to an agreement between Angus and CP to purchase the $142,500 of debt. On April 24, 2014, Angus sold to IBC $150,000 of the debt that the Company owed to Angus pursuant to an agreement between Angus and IBC to purchase the $150,000 of debt. In connection with the Claim Purchase Agreement CP, in the period from Jan. 29, 2014, to Sept. 5, 2014, the Company issued an aggregate of 522,000 common stock shares. The 522,000 Shares were issued at an average of $0.15 per share. The issuance of the 522,000 Shares constitutes 5.57% of the Company's issued and outstanding shares based on 9,366,523 shares issued and outstanding as of Sept. 5, 2014. In connection with the Claim Purchase Agreement IBC, in the period from April 24, 2014, to Sept. 5, 2014, the Company issued an aggregate of 1,330,000 common stock shares. The 1,330,000 Shares were issued at an average of $0.06 per share. The issuance of the 1,330,000 Shares constitutes 14.2% of the Company's issued and outstanding shares based on 9,366,523 shares issued and outstanding as of Sept. 5, 2014. About ERF Wireless Based in League City, Texas, ERF Wireless, Inc., provides secure, high-capacity wireless products and services to a broad spectrum of customers in primarily underserved, rural and suburban parts of the United States. ERF Wireless reported a net loss attributable to the Company of $7.26 million in 2013, a net loss attributable to the Company of $4.81 million in 2012 and a net loss attributable to the Company of $3.37 million in 2011. The Company's balance sheet at June 30, 2014, showed $3.59 million in total assets, $11.69 million in total liabilities and a $8.10 million total shareholders' deficit. ELBIT IMAGING: Investment Agreement with Insightec Revised ---------------------------------------------------------- The period granted to Elbit Medical Technologies Ltd. and to the existing shareholders of InSightec to notify InSightec if they intend to purchase the shares of InSightec was extended until Nov. 30, 2014, Elbit Imaging Ltd. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission. Elbit Imaging holds approximately 85% of the share capital of Elbit Medical Technologies Ltd. which, in turn, holds approximately 39.5% (34.5% on a fully diluted basis) of the share capital in InSightec. Under the Amendment to the Investment Agreements, the parties had agreed to extend the period for the exercise of the investment right granted to that certain international company as specified in the Company's report dated June 29, 2014, and to expand it to include an affiliate thereof, such that the Potential Investors have the option to purchase, by Sept. 15, 2014, a total of 6,444,404 Series D preferred shares of InSightec, which represent approx. 5% of the share capital of InSightec on a fully diluted basis, in consideration for a total payment of U.S. $12.5 million. 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. As of June 30, 2014, the Company had NIS4.05 billion in total assets, NIS3.16 billion in total liabilities and NIS889.58 million shareholders' equity. 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. ENERPULSE TECHNOLOGIES: Has $1.46-Mil. Net Loss in Second Quarter ----------------------------------------------------------------- Enerpulse Technologies, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1.46 million on $93,365 of sales for the three months ended June 30, 2014, compared with a net loss of $752,317 on $113,094 of sales for the same period last year. The Company's balance sheet at June 30, 2014, showed $2.85 million in total assets, $1.53 million in total liabilities, $300,000 in puttable common stock and stockholders' equity of $1.02 million. The Company reported a net loss of $2.17 million for the six months ended June 30, 2014 and anticipates a net loss for the remainder of 2014. The Company also used net cash in operations of approximately $1.51 million for the six months ended June 30, 2014 and has working capital of approximately $1.77 million at June 30, 2014. As a result of the Company's losses from operations, cash flows used in operations and limited liquidity, the Company's independent registered public accounting firm's report on the Company's consolidated financial statements as of and for the year ended Dec. 31, 2013 includes an explanatory paragraph stating that these conditions raise substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/0lkd8N Enerpulse Technologies, Inc., through its wholly-owned subsidiary, Enerpulse, Inc., designs, develops, manufactures, and markets an energy and efficiency enhancing product in the automotive industry under the Pulstar brand name. The company provides capacitor- based precise combustion ignition (PCI) technology, which enhances spark-ignited internal combustion (IC) engines in the areas of horsepower, torque, fuel economy, acceleration, combustion stability, and emissions. It offers PCI pulse plugs for the natural gas IC engine, automotive OEM, and automotive and power sports aftermarkets. The company is headquartered in Albuquerque, New Mexico. FHC HEALTH: S&P Affirms 'B' CCR & Rates Acquisition Financing 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on FHC Health Systems Inc. The outlook is stable. S&P also assigned the company's $415 million senior secured credit facilities its 'B+' debt ratings with '2' recovery ratings. The '2' recovery rating indicates S&P's expectation that lenders could expect substantial recovery (70%-90%) in the event of a payment default. All existing FHC debt will be repaid. "The ratings on FHC reflect the company's market position as the largest independent behavioral health management company in the U.S. based on covered lives, and the company's financial sponsor ownership and aggressive financial policies. Pro forma leverage for the transaction will be 3.8x (on Standard & Poor's basis) and 3.0x (on the company's basis)," said credit analyst James Sung. The stable outlook reflects S&P's view that Beacon/VO merger will result in stronger size/scale and slightly better client concentrations which should support steadier operating results and debt repayment according to plan. Downside scenario S&P could consider lowering the rating if the company significant raises debt and/or revenue growth falls significantly short of expectations and operating margins contract, thereby increasing leverage to 5.0x or above on a sustained basis. The loss of one or two key clients over the next 12 months, coupled with medical cost pressure, would be one potential downside scenario. Upside scenario Rating upside over the next 12 months is limited based on the newness of the merger. However, S&P would consider an upgrade over the long-term if the company's merger is executed with no integration issues that cause business and/or financial stress. In addition, an upgrade would consider whether the company can grow and diversify its business profile, improve EBITDA margins and improve client concentrations. Debt leverage would also need to be maintained below 4x on a sustained basis. FTE NETWORKS: SEC Suspends Trading of Common Stock Temporarily -------------------------------------------------------------- The U.S. Securities and Exchange Commission, via Release No. 72872, on Aug. 20, 2014, ordered for the commencement of an administrative proceeding against FTE Networks, Inc., at a to be determined time and place. The Commission alleged that FTE Networks failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder. In connection with the foregoing, the Commission announced the temporary suspension of trading in the securities of the Company, terminating at 11:59 p.m. EDT on Sept. 3, 2014. The Company does not intend to contest the allegations. Upon completion of the independent auditor's audit of the financial statements, the Company said it intends to expeditiously file a Registration Statement on Form 10 with the Commission to satisfy the requirements related to maintaining current and accurate information. The Company will continue conducting its normal course of business during the audit and registration process. About FTE Networks, Inc. FTE Networks, formerly known as Beacon Enterprise Solutions Group, Inc., is a vertically integrated company with an international footprint. Since its inception, FTE Networks has steadily advanced its management, operational and technical capabilities to become a leading provider of services to the telecommunications and wireless sector with a focus on turnkey solutions. FTE Networks provides a comprehensive array of services centered on quality, efficiency and customer service. Beacon Enterprise's balance sheet at June 30, 2012, showed $7.3 million in total assets, $8.8 million in total liabilities, and a stockholders' deficit of $1.5 million. For the nine months ended June 30, 2012, the Company incurred a net loss of $5.9 million, which included a non-cash impairment of intangible assets of $2.1 million and other non-cash expenses aggregating $1.9 million. Cash used in operations amounted to $1.0 million for the nine months ended June 30, 2012. As of June 30, 2012, the Company's accumulated deficit amounted to $42.6 million, with cash and cash equivalents of $75,000 and a working capital deficit of $4.9 million. "These conditions raise substantial doubt about the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended June 30, 2012. FLEETCOR TECHNOLOGIES: Moody's Assigns 'Ba3' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service has assigned first-time corporate family and probability of default ratings ("CFR" and "PDR", respectively) of Ba3 and Ba3-PD, respectively, to FleetCor Technologies Operating Company, LLC ("FleetCor"). Moody's also assigned Ba3 ratings to the $1 billion domestic revolver, $35 million international revolver, $1.7 billion senior secured Term Loan A and $1.05 billion senior secured Term Loan B. The rating outlook is stable. The proceeds from the financing will be used to help fund the acquisition of Comdata Inc. ("Comdata") from Ceridan LLC for about $3.4 billion and to repay existing debt. The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transactions. Ratings Rationale The Ba3 CFR reflects FleetCor's size and scale as a leading global provider of fuel cards with the largest U.S. fleet card network following the acquisition of Comdata. The rating is supported by a recurring transaction-based revenue model which leads to steady and high levels of profitability (mid to high 30% operating margins) and annual free flow cash flow which should exceed $700 million by the end of 2015. Moody's expects adjusted pro forma leverage to decrease to below 4 times during 2015. At the same time, the rating also reflects the highly acquisitive nature of FleetCor which has spurred rapid revenue growth to about $1.7 billion in 2014 (pro forma for the Comdata acquisition) from $520 million in 2011. Moody's believes that FleetCor will continue to engage in a "roll up" acquisition strategy globally to support revenue and earnings growth. Moody's views the long term financial leverage profile as uncertain given FleetCor's growth objectives and the possibility of share buybacks to offset dilution and/or combat the potential for slowing organic growth. Accordingly, the Ba3 rating incorporates some cushion for event risk and Moody's expectation of sustained leverage under 4 times. The stable outlook reflects Moody's expectation that FleetCor will generate at least mid-single digit annual revenue growth and steady cash flow. Operating performance will likely be buoyed by an increase in trucking miles consistent with Moody's projected U.S. GDP growth of 3% in 2015, the ongoing shift to payment cards from cash and checks, and international expansion. The Ba3 CFR could be upgraded if adjusted debt to EBITDA falls to the low 3 times range, combined with an increase in market share through organic revenue growth while maintaining profit margins. The ratings could be downgraded with declines in revenue and profits, increased customer or merchant partner churn, poor execution, or heightened competition. In addition, negative rating pressure could arise from higher financial leverage (in excess of 4.5x on a Moody's adjusted basis) for an extended period of time. The following first-time ratings/assessments were assigned: Corporate Family Rating -- Ba3 Probability of Default Rating -- Ba3-PD Senior Secured Revolving Credit Facility -- Ba3 (LGD3) Senior Secured Term Loan A -- Ba3 (LGD3) Senior Secured Term Loan B -- Ba3 (LGD3) Speculative Grade Liquidity Rating of SGL-2 The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. FleetCor is a leading global provider of fuel cards and workforce payment solutions. G-MART USA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: G-Mart USA Corp. 2878 NE 2nd Drive Homestead, FL 33033 Case No.: 14-30333 Chapter 11 Petition Date: September 10, 2014 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Hon. Laurel M Isicoff Debtor's Counsel: Richard R Robles, Esq. LAW OFFICES OF RICHARD R. ROBLES, P.A. 905 Brickell Bay Dr #228 Miami, FL 33131 Tel: (305) 755-9200 E-mail: rrobles@roblespa.com Total Assets: $1.31 million Total Liabilities: $1.25 million The petition was signed by Antonio Ballesteros, director. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flsb14-30333.pdf GLOBAL COMPUTER: Selling Assets to Govt. Agencies for $23.5MM ------------------------------------------------------------- Global Computer Enterprises, Inc., seeks authority from the U.S. Bankruptcy Court for the Eastern District of Virginia, Alexandria Division, to sell, through a private sale, substantially all of their assets for a total purchase price of $23,500,000. The Debtor relates that its prepetition sale process resulted in two bids from the U.S. Department of Labor and U.S. General Services Administration to purchase substantially all of the Debtor's equipment and intellectual property and transition the Debtor's work force to a new vendor to support the government going forward for an aggregate cash consideration of approximately $23.5 million. Through the DOL Contract, DOL is purchasing certain of GCE's financial management solutions (collectively, the "FMS"), including but not limited to: various interfaces, licenses, servers, and documentation. DOL is purchasing the DOL Deliverables for a total purchase price of $5.25 million. On Aug. 26, 2014, the Debtor received payment of $3.0 million, and on Sept. 2, received an additional $250,000. Through the GSA Contract, GSA will purchase and obtain ownership of those remaining portions of the FMS that are necessary to operate the NCFMS, including equipment, software, IP, ancillary materials, and other deliverables not already procured by DOL under the DOL Contract. The total purchase price for the GSA Deliverables is $18.25 million. About Global Computers Global Computer Enterprises, Inc., dba GCE, is a cloud-based "software as a service" provider, commonly referred to as a "SAAS," offering financial management solutions primarily to executive departments of the federal government and independent federal government agencies. GCE sought protection under Chapter 11 of the Bankruptcy Code (Case No. 14-13290, Bankr. E.D. Va.) on Sept. 4, 2014. The case is assigned to Judge Robert G. Mayer. The Debtor's counsel is David I. Swan, Esq., at McGuirewoods LLP, in McLean, Virginia. The Debtor's financial advisor is Weinsweig Advisors. The petition was signed by Mike Freeman, interim chief operating officer. Judge Mayer designated Mike Freeman to perform duties imposed upon GCE by the Bankruptcy Code. GLOBAL COMPUTER: Lists $13.8MM in Assets, $2.4MM in Debt -------------------------------------------------------- Global Computer Enterprises, Inc., has $13,877,989 in assets, and $2,419,880 in liabilities, composed of $416,153 in unsecured priority claims and $2,003,727 in unsecured nonpriority claims, according to its schedules of assets and liabilities filed with the U.S. Bankruptcy Court for the Eastern District of Virginia, Alexandria Division. Full-text copies of the Schedules are available at http://bankrupt.com/misc/GLOBALCOMPUTERsal.pdf About Global Computers Global Computer Enterprises, Inc., dba GCE, is a cloud-based "software as a service" provider, commonly referred to as a "SAAS," offering financial management solutions primarily to executive departments of the federal government and independent federal government agencies. GCE sought protection under Chapter 11 of the Bankruptcy Code (Case No. 14-13290, Bankr. E.D. Va.) on Sept. 4, 2014. The case is assigned to Judge Robert G. Mayer. The Debtor's counsel is David I. Swan, Esq., at McGuirewoods LLP, in McLean, Virginia. The Debtor's financial advisor is Weinsweig Advisors. The petition was signed by Mike Freeman, interim chief operating officer. Judge Mayer designated Mike Freeman to perform duties imposed upon GCE by the Bankruptcy Code. GUIDED THERAPEUTICS: Gets $200K Investment Commitment From ITEM --------------------------------------------------------------- Guided Therapeutics, Inc., disclosed that its Turkish distributor, ITEM Medical Technologies Group has committed to invest $200,000 in a private placement of Guided Therapeutics' common stock. Pursuant to the private placement, the Company will issue ITEM 651,042 shares of common stock priced at $0.3072 per share and a warrant to purchase an additional 325,521 shares. The warrants will have at issuance a five-year term, an exercise price per share of $0.4608, and be subject to a mandatory exercise provision should the average trading price of the Company's common stock over any 30 consecutive day trading period exceed $0.9216. The Company expects to use the net proceeds from the private placement for efforts to achieve FDA approval for the Guided Therapeutics LuViva(R) Advanced Cervical Scan, to increase manufacturing and international sales of LuViva, to enhance the Company's intellectual property portfolio, and other related corporate purposes. Should ITEM's total investment reach $2 million by the end of 2015, ITEM will receive the right to have a designee appointed to the Company's board of directors, and nominated by the board for reelection at subsequent annual meetings. About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. Guided Therapeutics reported a net loss attributable to common stockholders of $10.39 million on $820,000 of contract and grant revenue for the year ended Dec. 31, 2013, as compared with a net loss of $4.35 million on $3.33 million of contract and grant revenue during the prior year. UHY LLP, in Sterling Heights, Michigan, 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 accumulated deficit raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "The Company's capital-raising efforts are ongoing. If sufficient capital cannot be raised by the end of 2014, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support and additional NCI, NHI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In such a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection," the Company stated in the Form 10-Q for the quarter ended March 31, 2014. GLOBALINK LTD: Reports $11,856 Net Loss in June 30 Quarter ---------------------------------------------------------- Globalink, Ltd., filed its quarterly report on Form 10-Q, disclosing a net loss of $11,856 on $107,627 of revenue for the three months ended June 30, 2014, compared to a net loss of $35,010 on $47,750 of revenue for the same period last year. The Company's balance sheet at June 30, 2014, showed $1.77 million in total assets, $861,252 in total liabilities and total stockholders' equity of $905,338. As of June 30, 2014, the Company has an accumulated deficit of $204,055 since inception. Its ability to continue as a going concern depends upon whether it develops profitable operations and continues to raise adequate financing. A copy of the Form 10-Q is available at: http://is.gd/D1kQ3i Globalink, Ltd., provides Internet hotel booking services for travel agents in Vancouver, Toronto, Calgary, and Montreal in Canada. The company offers a proprietary online hotel booking program for connecting users with available rooms in hotels worldwide. Globalink, Ltd. was founded in 2006. GLOBEIMMUNE INC: Incurs $5.71-Mil. Net Loss in June 30 Quarter -------------------------------------------------------------- GlobeImmune, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $5.71 million on $1.73 million of total revenue for the three months ended June 30, 2014, compared to a net income of $1.08 million on $4.22 million of total revenue for the same period last year. The Company's balance sheet at June 30, 2014, showed $10.21 million in total assets, $29.96 million in total liabilities, Series C redeemable convertible preferred stock of $70.01 million, Series D redeemable convertible preferred stock of $13.6 million, Series E redeemable convertible preferred stock of $24.32 million, Series A redeemable convertible preferred stock of $16.22 million, Series B redeemable convertible preferred stock of $70.41 million and total stockholders' deficit of $214.3 million. The Company will be required to fund future operations through the sale of its equity securities, issuance of convertible debt, potential milestone payments if achieved and possible future collaboration partnerships. There can be no assurance that sufficient funds will be available when needed from equity or convertible debt financings, that milestone payments will be earned or that future collaboration partnerships will be entered into. If the Company is unable to obtain additional funding from these or other sources when needed, or to the extent needed, it may be necessary to significantly reduce its current rate of spending through reductions in staff and delaying, scaling back, or stopping certain research and development programs. Insufficient liquidity may also require the Company to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to it or its stockholders than it would otherwise choose. These events could prevent the Company from successfully executing on its operating plan and could raise substantial doubt about the Company's ability to continue as a going concern in future periods. A copy of the Form 10-Q is available at: http://is.gd/PfaEoX GlobeImmune Inc. operates as a biopharmaceutical company. The company develops and manufactures Tarmogens, a molecular immunotherapy vaccine for the treatment of cancer and infectious diseases. Its products include GI-4000 for pancreas, non-small cell lung, colorectal, endometrial, and ovarian cancers, as well as melanoma and multiple myeloma; GI-6207 for the treatment of human epithelial cancers, including non-small cell lung cancer, colorectal, pancreas, breast, gastric, and medullary thyroid cancers; GI-6301, a Tarmogen used for the treatment of lung, breast, colon, bladder, kidney, ovary, uterus, and prostate cancers; and GS-4774 a therapeutic vaccine for chronic HBV infection. GlobeImmune, Inc., was formerly known as Ceres Pharmaceuticals, Inc. and changed its name to GlobeImmune Inc. in 2001. The company was founded in 1995 and is based in Louisville, Colorado. GLYECO INC: Amends 36.3 Million Shares Resale Prospectus -------------------------------------------------------- Glyeco, Inc., amended its registration statement with the U.S. Securities and Exchange Commission relating to the sale of up to an aggregate of 36,344,824 shares of its issued and outstanding common stock by Alvin Fund, Alpha Capital, Byron A. Allen, Jr., et al. The Company amended the Registration Statement to delay its effective date. The selling stockholders may offer the shares of the Company's common stock at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale or at negotiated prices. The Company is not offering any shares of common stock for sale under this prospectus, and the Company will not receive any proceeds from sales of shares of its common stock by the selling shareholders. The Company's common stock is traded on the OTCQB under the symbol "GLYE." On Aug. 29 , 2014, the closing bid price for the Company's common stock as reported on the OTCQB was $0.75 per share. A copy of the Form S-1/A is available for free at: http://is.gd/TCrCy8 About GlyEco, Inc. Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. GlyeCo reported a net loss of $4.01 million in 2013, a net loss of $1.86 million in 2012, and a net loss of $592,171 in 2011. The Company's balance sheet at June 30, 2014, showed $15.56 million in total assets, $2.92 million in total liabilities and $12.64 million in total stockholders' equity. Semple, Marchal & Cooper, LLP, in Phoenix, Arizona, 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 yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable profitable operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. GORDON PROPERTIES: Replies to FOA's Motion to Consolidate Case -------------------------------------------------------------- Gordon Properties, LLC, has filed a response to First Owners' Association of 4600 Condominium, Inc.'s motion to substantially consolidate Chapter 11 case. The Debtor submits that further evidence should be permitted on First Owners' Association of 4600 Condominium, Inc.'s (FOA) veil piercing theory in conjunction with an analysis of the Stone factors for substantive consolidation. Gordon Properties states that it should receive specific notice of what parts of the record will be judicially noticed and that upon presentation of all the evidence the parties have an opportunity to argue the facts as applied to the proper legal standard. FOA filed its Motion for substantive consolidation of the bankruptcy estates of Gordon Properties, LLC, and Condominium Services, Inc. ("CSI") on May 5, 2010. Gordon Properties filed an opposition and the matter was set for an evidentiary hearing on August 22, 2011. Gordon Properties filed a motion in limine that FOA's attempt to hold Gordon Properties liable on the CSI state court judgment by virtue of a veil piercing theory was barred by collateral estoppel resulting from certain state court litigation. This Court heard the motion in limine, but deferred ruling on the Motion. Following an evidentiary hearing, this Court denied the Motion for substantive consolidation, finding that FOA had not met its burden of proving the elements of substantive consolidation. This Court further found as "a final, relatively unique consideration" that FOA should not be permitted to achieve in this Court what it was unable to achieve in the state court litigation. FOA appealed. On September 5, 1012, the United States District Court for the Eastern District of Virginia reversed and remanded the case "for further proceedings consistent with the Memorandum Opinion." Gordon Properties filed a Motion for Rehearing to Alter or Amend the Judgment identifying the following factual issues which should be amended based on the record before the District Court: (i) issue as to the timing of the disputed assessment; (ii) issue as to whether either Gordon Properties or FOA prevailed on any issue before the state court; (iii) FOA's notice of appeal; (iv) misstatements as to the history with CSI; and (v) misstatements of the procedural history. Before the District Court ruled on this Motion, the entire case was stayed. On January 3, 2014, the stay was lifted and on March 14, 2014, the District Court issued an Order denying the Motion to Rehear/Alter/Amend finding that the "factual misstatements were not material to the Court's merits determination, nor would the corrections proposed by appellee at all change the fundamental reasoning in the Memorandum Opinion." District Court Order, March 14, 2014. Gordon Properties' subsequent appeal to the Fourth Circuit Court of Appeals was dismissed as premature. About Gordon Properties, LLC Alexandria, Va.-based Gordon Properties, LLC, owns 39 condominium units in The 4600 Condominium, a high-rise apartment building with both residential and commercial units. Gordon Properties' ownership of these condos represents about a 20% interest in the Forty Six Hundred Condominium project -- http://foa4600.org/-- in Alexandria. Gordon also owns all of the equity of a subsidiary, Condominium Services, Inc., which operates as a condominium management company. Gordon Properties is owned by related family members, Bryan Sells, Mr. Sells' sister, Elizabeth Greenwell, and his cousins, Lindsay Wilson and Julia Langdon. The company was created in 2002 to take title to the Condo Units which had been held in a trust that was created under the will of Bryan Gordon following his death. Bryan Gordon was the grandfather of the four members of the Debtor. Gordon Properties sought Chapter 11 protection (Bankr. E.D. Va. Case No. 09-18086) on Oct. 2, 2009, and is represented by Donald F. King, Esq., at Odin, Feldman & Pittleman PC in Fairfax, Va. Gordon Properties disclosed $11,149,458 in assets and $1,546,344 in liabilities. Condominium Services filed its chapter 11 petition (Bankr. E.D. Va. 10-10581) on Jan. 26, 2010. It scheduled one creditor, the condominium association, with a disputed claim of $436,802.00. The association filed a proof of claim asserting a claim of $453,533.12. A second proof of claim was filed by the Internal Revenue Service for $1,955.45. According to its schedules, if both claims are allowed, it has a net deficit of about $426,900. CSI is wholly owned by Gordon Properties. In February 2012, Judge Mayer denied the motion of the association to substantively consolidate the chapter 11 bankruptcy cases of Gordon Properties and Condominium Services, Inc., the condominium management company. Gordon Properties and CSI opposed the motion. The two cases were previously administratively consolidated. HD SUPPLY: Posts $48 Million Net Income in Second Quarter --------------------------------------------------------- HD Supply, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report disclosing net income of $48 million on $2.44 billion of net sales for the three months ended Aug. 3, 2014, compared to a net loss of $72 million on $2.23 billion of net sales for the three months ended Aug. 4, 2013. For the six months ended Aug. 3, 2014, the Company reported net income of $36 million on $4.60 billion of net sales compared to a net loss of $203 million on $4.28 billion of net sales for the six months ended Aug. 4, 2013. "I am very pleased with our execution in the second quarter," stated Joe DeAngelo, CEO of HD Supply. "We delivered strong organic sales and earnings growth and remain cautiously optimistic about what seems to be improving end markets." As of Aug. 3, 2014, HD Supply had $6.71 billion in total assets, $7.41 billion in total liabilities and a $701 million total stockholders' deficit. A full-text copy of the Form 10-Q is available fo free at: http://is.gd/2IU66v Kathleen Affeldt Named Director On Sept. 5, 2014, the board of directors of HD Supply Holdings, Inc., accepted the resignation of Mr. Brian A. Bernasek from the Board and related responsibilities on the executive committee to allow for the appointment of a new independent director. On the same date, upon recommendation from the nominating and corporate governance committee of the board of directors of HD Supply Holdings, Inc., the board of directors of Holdings and HD Supply, Inc., appointed Kathleen J. Affeldt to the Board and to the Board's Compensation Committee. The Board has determined that Ms. Affeldt is an independent director under the applicable independence requirements of the NASDAQ Stock Market and the Securities Exchange Act of 1934. The appointment is effective Sept. 5, 2014. Ms. Affeldt will serve as a Class I director of Holdings, which class will stand for re-election at the 2017 annual meeting of shareholders. Ms. Affeldt, age 65, most recently served as vice president of human resources at Lexmark International, a position she held from 1996 until her retirement in 2003. She joined Lexmark as a director of human resources in 1991 when it was formed as a result of a buy-out from IBM. Ms. Affeldt began her career at IBM in 1969, specializing in sales of supply chain systems. Ms. Affeldt will participate in Holdings' standard outside director compensation program, including a pro-rated annual equity retainer based on the date she joined the Holdings' board of directors, under the same terms and conditions. There are no family relationships between Ms. Affeldt and any officer or other director of the Company or any related party transactions involving Ms. Affeldt, the Company disclosed with the SEC. About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. HD Supply reported a net loss of $218 million for the fiscal year ended Feb. 2, 2014, a net loss of $1.17 billion for the fiscal year ended Feb. 3, 2013, and a net loss of $543 million for the year ended Jan. 29, 2012. * * * As reported by the TCR on Jan. 11, 2013, Moody's Investors Service upgraded HD Supply, Inc.'s ("HDS") corporate family rating to B3 from Caa1 and its probability of default rating to B3 from Caa1. "This rating action results from our expectations that HDS will refinance a significant portion of its senior subordinated notes due 2015, effectively extending the remainder of its maturities by at least two years to 2017," Moody's said. HD Supply carries a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. HIGHWAY 82/FANNIN: 5th Cir. Won't Reinstate Suit Against Lender --------------------------------------------------------------- The U.S. Court of Appeals for the Fifth Circuit affirmed the dismissal of Highway 82/Fannin Joint Venture's adversary bankruptcy proceeding claim for declaratory relief against Capital One Bank. The Joint Venture took an appeal from the dismissal order, arguing that it has set forth a claim for relief under a theory of quasi- estoppel. "We affirm for the reasons articulated by the district court in affirming the bankruptcy court's dismissal of the Joint Venture's complaint under Rule 12(b)(6). The allegations of the complaint, taken as true, do not state a claim for relief that is plausible on its face," the Fifth Circuit held. On July 7, 2006, Mark Ragon executed a promissory note in favor of Capital One in the principal amount of $340,000. On that same day, Ragon executed a deed of trust providing Capital One a lien on a 243 acre parcel of property. The Deed of Trust contained a cross- collateralization clause whereby the property served as additional collateral for any and all obligations owed by Ragon to Capital One, whether then existing or thereafter arising. On January 3, 2007, the Joint Venture executed a promissory note in favor of Ragon in the principal amount of $340,000 for the purchase of the property. The Joint Venture was aware of the bank's prior lien on the property and the cross-collateralization provision in the Deed of Trust. Later, the bank became aware that Ragon had transferred the property to the Joint Venture. The Joint Venture made all its payments to Ragon but, at some point, Ragon defaulted on his obligations to the bank and the bank initiated foreclosure proceedings on the property. The Joint Venture filed a petition for relief under Chapter 11 of the Bankruptcy Code on December 15, 2011 to prevent the foreclosure. The Joint Venture initiated the adversary bankruptcy proceeding seeking a declaratory judgment that it is entitled to a release of the bank's lien on the property based on quasi estoppel under Texas law. The district court affirmed the order of the bankruptcy court dismissing Highway 82/Fannin's adversary proceeding for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) because there was no plausible claim for relief under a theory of quasi estoppel. The case is, HIGHWAY 82/FANNIN JOINT VENTURE, Appellant, v. CAPITAL ONE BANK, Appellee, NO. 13-41146 (5th Cir.). A copy of the Fifth Circuit's September 9, 2014 decision is available at http://tinyurl.com/kmgqpl8fro Leagle.com. Highway 82 / Fannin Joint Venture filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case No. 11-43658) on Dec. 5, 2011, listing under $1 million in both assets and liabilities. A copy of the petition is available at http://bankrupt.com/misc/txeb11-43658.pdf It is represented by Dennis Olson, Esq. -- denniso@dallas-law.com HRK HOLDINGS: Seeks to Auction Real Estate Property on Oct. 2 ------------------------------------------------------------- U.S. Bankruptcy Judge K. Rodney May has approved the bid procedures of HRK Holdings, LLC, and HRK Industries, LLC, related to the solicitation of offers with respect to the sale of all or individual parcels of real property. The bid deadline is set on Sept. 30, 2014, at 5:00 p.m. (Eastern Time). If more than one qualified bid is received on the bid deadline, the auction will take place on Oct. 2, 2014, at 10:00 a.m. (Eastern Time). The Court will conduct a sale hearing on Oct. 6, 2014, at 9:30 a.m. On the Petition Date, HRK Holdings, LLC owned approximately 675 contiguous acres of real property in Manatee County, Florida. Approximately 350 acres of the Property accommodates a phosphorgypsum stack system, or "Gypstacks", a portion of which was used as an alternate disposal area for the management of dredge materials pursuant to a contract with and as authorized by a permit with Port Manatee. The remaining acres of usable land were either leased to various tenants or available for sale. The Debtors determined it would be in their best interest to market portions of the Property for sale. To date, the Debtors have filed four separate motions to approve the sale of portions of the Property. The Court has approved those sales and the transactions have closed. After closing on the Prior Sales, the Debtors have the Gypstack Property and approximately 220 acres of the non-Gypstack Property remaining and available for sale. The Debtors' Property is encumbered by liens and security interests of Regions Bank as well as other consensual liens, mechanic liens, and easements. The Debtors desire to sell some or all of the Remaining Property to a third party pursuant to an Asset Purchase Agreement. Although the Debtors do not have an offer to purchase the Remaining Property, the Debtors believe that the value of their assets would be maximized by an Auction within the next 30 days. HRK Holdings desires to sell all or individual parcels of the Remaining Property at auction for the minimum bid prices, subject to higher and better offers. Although Regions Bank maintains its right to credit bid, Regions has approved each of the minimum bid prices for offers to purchase the entirety of anyone or an of Parcels A-E. (a) Parcel A - $60,000 per gross acre; 38.26 acres (b) Parcel B - $35,000 per gross acre; 40.95 acres (c) Parcel C - $60,000 per gross acre; 8.32 acres (d) Parcel D - $50,000 per gross acre; 105.21 acres (e) Parcel E - $25,000 per gross acre; 41.47 acres (f) Parcel F - $25,000 per gross acre; 347.07 acres Parcels D, E, and F contain certain components of a gypstack system that may not be altered without the prior consultation and approval of Florida Department of Environmental Protection (DEP). The gypstack system is subject to existing environmental permits, plans, administrative agreements, settlement agreements, and consent orders with the DEP, copies of the majority of which are available in the Data Room, and an of which are available upon request from the DEP. The DEP retains regulatory control and oversight over any activity which may affect the integrity ofthe gypstack system components or their existing environmental protection measures (e.g. the cover, drainage, liners, monitoring system, or leachate and stormwater controls). An offer to purchase the Remaining Property at the minimum bid prices would represent the highest and best offer for the Remaining Property (which economic value will be market tested by a fair and open Auction). The Debtors will continue to market the Remaining Property up until the Bid Deadline by continuing to engage prospective purchasers in bidding for the Remaining Property and providing parties with continued access to a data room of confidential information on the Remaining Property to all Qualified Bidders. In this way, the Debtors intend to maximize the number of participants who may participate as purchasers at the Auction and thereby maximize the value to be achieved from the sale of the Remaining Property. The Debtors will implement procedures to solicit offers for the remaining Property prior to the Auction. Although a stalking horse bidder has not been selected with respect to the Remaining Property, the proposed bid procedures allow the Debtors to select a stalking horse bidder at a later date. The Debtors believe that the Bidding Procedures will assist in determining the highest and best offer to the Debtor for the sale of the Remaining Property. Regions has conditioned additional advances under the existing DIP facility on receiving the first dollars from the net proceeds of all future real property sales, in the amount of DIP loans or additional advances made after April 21, 2014. DEP has consented to Regions receiving the first dollars from net proceeds provided that the amounts to be advanced do not exceed $1.15 million unless increased by mutual agreement of Regions, DEP, and the Debtors. Thereafter, Regions and the FDEP require that the net proceeds of future property sales shall be split between Regions and the Long Term Care Trust Fund until Regions indebtedness has been paid in full. The Long Term Care Trust Fund was established pursuant to the Fourth DIP Facility Financing Order, under which the Debtors established a line of credit from funds made available upon closing of recent sales of real property to address certain long- term case issues with respect to the maintenance of the Gypstacks. In exchange for funding of the Long Term Care Trust Fund from those recent sales, DEP provided those certain covenants not to sue and releases to the purchasers of HRK's property. In consideration of the additional funding to the Long Term Care Trust Fund from future sales described above, DEP has agreed to provide the DEP Covenants to future purchasers of the Remaining Property. About HRK Holdings HRK Holdings and HRK Industries LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in liabilities in its revised schedules. According to the Debtors, the bankruptcy filing was necessitated by the immediate need to sell a portion of the remaining property to create liquidity for (a) funding the urgent management of the site-related environmental concerns; the benefit of creditors; funding a litigation filed by the Debtors; and funding of expenses related to additional sales of the remaining property. HRK Holdings is selling real property assets to Allied Universal Corp. and Mayo Fertilizer, Inc. The Court allowed HRK and the purchasers to enter into any modifications to the agreements without need of further Court approval, provided that no amendments will occur without prior consent of Regions Bank. HRK H0LDINGS: Maturity of Lines of Credit Extended to Sept. 30 -------------------------------------------------------------- HRK Holdings and HRK Industries LLC obtained Bankruptcy Court approval to extend the maturity date under the Operating Line of Credit, the Site Work Line of Credit and the Long Term Care Line of Credit is extended, nunc pro tunc, through and including Sept. 30, 2014. The Debtors are authorized to use existing, unfunded availability under the Operating Line of Credit and the Site Work Line of Credit consistent with the extended maturity period up to the Reimbursement Cap. The Debtors are authorized to grant liens on all property of the Debtors previously granted to Regions under the Second Financing Orders, not to include a lien on Avoidance Actions. The funds would be advanced under the Operating Line of Credit and would be limited to expenses actually incurred by the Debtors which are consistent with the Budget. The provisions governing the DIP Loan Facilities be modified as follows: (a) Draws on the Operating Line of Credit shall be accompanied by a written certification that funds disbursed under the Operating Line of Credit will only be used to pay expenses set forth on the Budget approved by Regions. (b) Extended Maturity Date: Extend the Maturity Date under the Second DIP Facility and the Fourth DIP Facility through September 30, 2014. (c) To use existing, unused availability under (i) the Operating Line of Credit, which would be advanced in accordance with the Budget; and (ii) the Site Work Line of Credit to fund work performed related to maintenance of the Gypstacks. The advances shall be subject to the Conditions to Funding and the same terms and conditions set forth in the Second DIP Facility Financing Orders and the Fourth DIP Facility Financing Order. These terms included the granting of first liens on all assets of the Debtors other than Avoidance Actions, as defined in the Second Financing Orders, according the amounts advanced superpriority administrative expenses status, subject to the covenants provided in the Second Financing Orders, the continued prohibition that no funds advanced by Regions shall be used to investigate, analyze, or prosecute claims against Regions; and the Debtors' agreement to pay fees and costs to document the modifications to the exist ing loan documents. About HRK Holdings HRK Holdings and HRK Industries LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., and Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in liabilities in its revised schedules. According to the Debtors, the bankruptcy filing was necessitated by the immediate need to sell a portion of the remaining property to create liquidity for (a) funding the urgent management of the site-related environmental concerns; the benefit of creditors; funding a litigation filed by the Debtors; and funding of expenses related to additional sales of the remaining property. HRK Holdings is selling real property assets to Allied Universal Corp. and Mayo Fertilizer, Inc. The Court allowed HRK and the purchasers to enter into any modifications to the agreements without need of further Court approval, provided that no amendments will occur without prior consent of Regions Bank. INDIANA TOLL ROAD: Operator Weighs Bankruptcy Filing ---------------------------------------------------- Matt Jarzemsky and Gillian Tan, writing for Daily Bankruptcy Review, reported that the company that runs the Indiana Toll Road is weighing a possible bankruptcy filing in the coming weeks as it works to cut its roughly $6 billion debt load and shop the road to potential buyers. According to the report, citing people familiar with the matter, the company, controlled by units of Spanish infrastructure company Ferrovial SA and Australian investment bank Macquarie Group Ltd., has already reached an agreement with most of its secured creditors on a restructuring plan that would set the framework for a sale of the road. INFINITY ENERGY: Fires Auditor Over Disagreement ------------------------------------------------ Infinity Energy Resources, Inc., dismissed MaloneBailey, LLP, as the Company's independent registered public accounting firm effective Sept. 5, 2014, according to a regulatory filing with the U.S. Securities and Exchange Commission. The Company engaged L.L. Bradford & Company as replacement. The Company said the decision to change auditor was made to remedy its current delinquent status with respect to the filing of its annual report on Form 10-K for the year ended Dec. 31, 2013. "The Company had engaged Malone on April 24, 2013, to audit its consolidated financial statements for the year ended Dec. 31, 2013, and reaudit the year ended Dec. 31, 2012, but Malone has not issued an opinion on those consolidated financial statements due to its inability to complete the audits of 2013 and 2012 caused by disagreements with the Company's management and its prior auditors regarding the Company's accounting policy for certain costs that are capitalized and included in the Company's Oil and Gas properties and the valuation of certain equity based and derivative instruments," the Company said in the filing. During the audit for the year ended Dec. 31, 2013, and the reaudit of the year ended Dec. 31, 2012, and through Sept. 5, 2014, there were (a) disagreements with Malone on the capitalization of certain costs included in the Company's Oil and Gas properties for the years 2013, 2012 and periods prior to 2012 and disagreements on the valuation of certain stock options and warrants granted in 2011 and 2012. The Company further disclosed that during the year ended Dec. 31, 2013, and the subsequent interim period through Sept. 5, 2014, it did not consult with Bradford regarding any matter. About Infinity Energy Overland Park, Kansas-based Infinity Energy Resources, Inc., and its subsidiaries, are engaged in the acquisition and exploration of oil and gas properties offshore Nicaragua in the Caribbean Sea. Infinity Energy disclosed net income of $2.90 million for the year ended Dec. 31, 2012, as compared with a net loss of $3.52 million during the prior year. The Company's balance sheet at Sept. 30, 2013, showed $4.76 million in total assets, $5.74 million in total liabilities, $15.17 million in redeemable, convertible preferred stock, and stockholders' deficit of $16.15 million. EKS&H LLLP, in Denver, Colorado, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses, has no on-going operations, and has a significant working capital deficit, which raises substantial doubt about its ability to continue as a going concern. INTEGRATED BIOPHARMA: Posts $131,000 Net Income in Fiscal 2014 -------------------------------------------------------------- Integrated Biopharma, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income of $131,000 on $33.68 million of net sales for the year ended June 30, 2014, compared to net income of $93,000 on $33.62 million of net sales during the prior year. As of June 30, 2014, the Company had $11.58 million in total assets, $21.73 million in total liabilities and a $10.15 million total stockholders' deficiency. At June 30, 2014, and 2013, the Company's working capital deficit was approximately $2.5 million. The Company's current assets and current liabilities each decreased by approximately $0.8 million from June 30, 2013, to June 30, 2014. A full-text copy of the Form 10-K is available for free at: http://is.gd/WacBs4 About Integrated BioPharma Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) -- -- http://www.healthproductscorp.us/-- is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company's customers are located primarily in the United States. The Company was previously known as Integrated Health Technologies, Inc., and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc., with certain of its customers and certain vendors. INTELLICELL BIOSCIENCES: Hikes Authorized Common Shares to 10BB --------------------------------------------------------------- Intellicell Biosciences, Inc., filed an amendment to the Company's articles of incorporation with the Secretary of State of the State of Nevada to increase the Company's authorized common stock from 3,500,000,000 shares of common stock to 10,000,000,000 shares of common stock, the Company disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission. The amendment was approved by the Board of Directors on June 24, 2014, and by the vote of a majority of the voting capital stock of the Company on June 25, 2014. About Intellicell Biosciences Intellicell BioSciences, Inc., headquartered in New York, N.Y., was formed on Aug. 13, 2010, under the name "Regen Biosciences, Inc." as a pioneering regenerative medicine company to develop and commercialize regenerative medical technologies in large markets with unmet clinical needs. On Feb. 17, 2011, the company changed its name from "Regen Biosciences, Inc." to "IntelliCell BioSciences Inc". To date, IntelliCell has developed proprietary technologies that allow for the efficient and reproducible separation of stromal vascular fraction (branded "IntelliCell(TM)") containing adipose stem cells that can be performed in tissue processing centers and in doctors' offices. Intellicell Biosciences reported a net loss of $11.14 million on $0 of total net revenues for the year ended Dec. 31, 2013, as compared with a net loss of $4.15 million on $534,942 of total net revenues during the prior year. The Company's balance sheet at March 31, 2014, showed $4.09 million in total assets, $25.26 million in total liabilities and a $21.16 million total stockholders' deficit. Going Concern "The condensed consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $61,421,672 and a working capital deficit of $23,780,066 as of March 31, 2014, respectively. Further losses are anticipated in the continued development of its business, raising substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and a private placement of common stock or other debt or equity securities. There can be no assurance that we will be able to obtain further financing, do so on reasonable terms, or do so on terms that would not substantially dilute our current stockholders' equity interests in us. If we are unable to raise additional funds on a timely basis, or at all, we probably will not be able to continue as a going concern," the Company said in the quarterly report for the period ended March 31, 2014. IVEDA SOLUTIONS: Incurs $1.59-Mil. Net Loss in Q2 Ended June 30 --------------------------------------------------------------- Iveda Solutions, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1.59 million on $351,262 of total revenue for the three months ended June 30, 2014, compared with a net loss of $1.51 million on $794,166 of total revenue for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $4.09 million in total assets, $2.88 million in total liabilities, long term debt and convertible debentures of $3.31 million, $158,872 in due to related party and a stockholders' deficit of $2.27 million. The Company's Audit Report on the Financial Statements for the year ended Dec. 31, 2013 contained a going concern qualification. Since inception, the Company has generated an accumulated deficit from operations of approximately $24.8 million at June 30, 2014 and has used approximately $3.2 million in cash to fund operations through the six months ended June 30, 2014. As a result, a significant risk exists regarding its ability to continue as a going concern. A copy of the Form 10-Q is available at: http://is.gd/J5U85E Mesa, Ariz.-based Iveda Solutions, Inc., sells and installs video surveillance equipment, primarily for security purposes and secondarily for operational efficiencies and marketing, and provides video hosting in-vehicle streaming video, archiving, and real-time remote surveillance services with a proprietary reporting system, DS(TM) (Daily Surveillance Report), to a variety of businesses and organizations. JAMES ROTH: Portion of Debt Owed to Ex-Worker Not Dischargeable --------------------------------------------------------------- District Judge Cynthia C. Bashant affirms the bankruptcy court determination that a portion of James Marvin Roth's debt owed to Anice M. Plikaytis, a former employee, was excepted from discharge. Plikaytis sued Roth in California state court in 2009. She was awarded damages against Roth and other defendants. Roth filed for Chapter 11 bankruptcy on May 3, 2010. Plikaytis filed a complaint objecting to the dischargeability of the state court judgment. Plikaytis alleged the judgment was nondischargeable because it was based on fraud under 11 U.S.C. Sec. 523(a)(2), Sec. 523(a)(4), and Sec. 523(a)(6) (counts 1, 2, and 3, respectively). Plikaytis prayed for the full amount of the judgment, $4,126,844.86, plus interest. The appellate case is, ANICE M. PLIKAYTIS, Appellee, v. JAMES M. ROTH, Appellant, CASE NO. 13-CV-2954 BAS (WVG) (S.D. Calif.). A copy of the Court's Sept. 5 Opinion is available at http://is.gd/0jwLjafrom Leagle.com. James Marvin Roth is represented by: K Todd Curry, Esq. CURRY ADVISORS A Professional Law Corporation 525 B Street, Suite 1500 San Diego, CA 92101-4417 Tel: 619-238-0004 Anice M. Plikaytis is represented by: Scott A McMillan, Esq. THE MCMILLAN LAW FIRM, APC 4670 Nebo Dr #200 La Mesa, CA 91941 Tel: 619-464-1500 KID BRANDS: S. Wallis Appeals Denial of Request to Respond to Sale ------------------------------------------------------------------ Creditor Scott Wallis took an appeal to the U.S. District Court for New Jersey of Judge Steckroth's Aug. 12 and 19, 2014 orders that denied Mr. Wallis' request for an extension of the time to respond to Kid Brands, Inc.'s motion to sell its assets. About Kid Brands Based in Rutherford, New Jersey, Kid Brands, Inc., is a designer, importer, marketer, and distributor of infant and juvenile consumer products. Its operating subsidiaries consist of Kids Line, LLC, CoCaLo, Inc., Sassy, Inc., and LaJobi, Inc. Providing "everything but the baby" for a child's nursery, the company sells infant bedding and accessories under the Kids Line and CoCaLo brands; nursery furniture under the LaJobi brand; and baby care items under the Kokopax and Sassy brands. Citing their inability to raise capital due to contingent liabilities and operational issues, Kid Brands and six of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-22582) on June 18, 2014. To preserve the value of their assets, the Debtors are pursuing a sale of the assets pursuant to section 363 of the Bankruptcy Code. As of April 30, 2014, the Debtors had $32.40 million in total assets and $109.1 million in total liabilities. As of the Petition Date, unsecured debts totaled $54 million. Judge Donald H. Steckroth oversees the cases. The Debtors have sought and obtained an order directing joint administration of their Chapter 11 cases. Lowenstein Sandler LLP serves as the Debtors' counsel. PricewaterhouseCoopers LLP is the Debtors' financial advisor. GRL Capital Advisors acts as the Debtors' restructuring advisors. GRL's Glenn Langberg served as the Debtors' chief restructuring officer. Mr. Langberg also oversaw the bankruptcy and sales of Big M Inc., operator of the Mandee and Annie Sez stores. Rust Consulting/Omni Bankruptcy is the Debtors' claims and noticing agent. In August 2014, Bonnie Glantz Fatell, Esq., was appointed as consumer privacy ombudsman as per the behest of the U.S. Trustee. Salus Capital Partners LLC and Sterling National Bank have committed to provide up to $49 million in DIP financing to the Debtors. On July 2, 2014, 5he U.S. Trustee for Region 3 appointed a 3-member panel consisting of (1) Disney Consumer Products, Inc., (2) Markup Corp. dba Kids Basics, and Structure Tone, Inc., to serve as the official unsecured creditors' committee. Kelley Drye & Warren LLP serves as counsel to the Committee while Emerald Capital Advisors Corp. acts as financial advisors. KID BRANDS: Gets Court OK to Employ Lowenstein Sandler as Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey granted Kid Brands, Inc. and its debtor-affiliates authority to employ Lowenstein Sandler LLP as their counsel. As previously reported in the July 22 edition of The Troubled Company Reporter, Lowenstein Sandler will, provide these services: (a) providing the Debtors with advice and preparing all necessary documents regarding debt restructuring, bankruptcy and asset dispositions; (b) taking all necessary actions to protect and preserve the Debtors' estates during the pendency of these Chapter 11 Cases, including the prosecution of actions on the Debtors' behalf, the defense of actions commenced against the Debtors' negotiations concerning litigation in which the Debtors are involved and objecting to claims filed against the estates; and (c) preparing on behalf of the Debtors, as debtors-in- possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of these Chapter 11 Cases. Lowenstein Sandler will be paid at these hourly rates: Partners $500-$985 Sr. Counsel and Counsel $385-$685 Associates $275-$480 Paralegals and Legal Assistants $160-$270 Lowenstein Sandler will also be reimbursed for reasonable out-of- pocket expenses incurred. About Kid Brands Based in Rutherford, New Jersey, Kid Brands, Inc., is a designer, importer, marketer, and distributor of infant and juvenile consumer products. Its operating subsidiaries consist of Kids Line, LLC, CoCaLo, Inc., Sassy, Inc., and LaJobi, Inc. Providing "everything but the baby" for a child's nursery, the company sells infant bedding and accessories under the Kids Line and CoCaLo brands; nursery furniture under the LaJobi brand; and baby care items under the Kokopax and Sassy brands. Citing their inability to raise capital due to contingent liabilities and operational issues, Kid Brands and six of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-22582) on June 18, 2014. To preserve the value of their assets, the Debtors are pursuing a sale of the assets pursuant to section 363 of the Bankruptcy Code. As of April 30, 2014, the Debtors had $32.40 million in total assets and $109.1 million in total liabilities. As of the Petition Date, unsecured debts totaled $54 million. Judge Donald H. Steckroth oversees the cases. The Debtors have sought and obtained an order directing joint administration of their Chapter 11 cases. Lowenstein Sandler LLP serves as the Debtors' counsel. PricewaterhouseCoopers LLP is the Debtors' financial advisor. GRL Capital Advisors acts as the Debtors' restructuring advisors. GRL's Glenn Langberg served as the Debtors' chief restructuring officer. Mr. Langberg also oversaw the bankruptcy and sales of Big M Inc., operator of the Mandee and Annie Sez stores. Rust Consulting/Omni Bankruptcy is the Debtors' claims and noticing agent. Salus Capital Partners LLC and Sterling National Bank have committed to provide up to $49 million in DIP financing to the Debtors. KID BRANDS: Court Sets Sept. 30 as General Claims Bar Date ---------------------------------------------------------- The Bankruptcy Court has established deadlines for the filing of claims against debtor Kid Brands Inc. For all person and entities that assert a claim, including claims arising under section 503(b)(9) of the bankruptcy code, against the debtors that arose on or prior to the petition date, other than government units, the bar date is September 30, 2014 at 5:00 p.m. All governments units that assert a claim against the debtors must file a proof of claim in writing on or before December 15, 2014 at 5:00 pm. All persons or entities that assert a claim against the debtors and that failure on their part to comply with the order shall not be treated as a creditor with respect to such claim. Kid Brands is represented by: Kenneth A. Rosen, Esq. Steven M. Skolnick, Esq. S. Jason Teele, Esq. Shirley Dai, Esq. Anthony De Leo, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2500 Fax: (973) 597-2400 About Kid Brands Based in Rutherford, New Jersey, Kid Brands, Inc., is a designer, importer, marketer, and distributor of infant and juvenile consumer products. Its operating subsidiaries consist of Kids Line, LLC, CoCaLo, Inc., Sassy, Inc., and LaJobi, Inc. Providing "everything but the baby" for a child's nursery, the company sells infant bedding and accessories under the Kids Line and CoCaLo brands; nursery furniture under the LaJobi brand; and baby care items under the Kokopax and Sassy brands. Citing their inability to raise capital due to contingent liabilities and operational issues, Kid Brands and six of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-22582) on June 18, 2014. To preserve the value of their assets, the Debtors are pursuing a sale of the assets pursuant to section 363 of the Bankruptcy Code. As of April 30, 2014, the Debtors had $32.40 million in total assets and $109.1 million in total liabilities. As of the Petition Date, unsecured debts totaled $54 million. Judge Donald H. Steckroth oversees the cases. The Debtors have sought and obtained an order directing joint administration of their Chapter 11 cases. Lowenstein Sandler LLP serves as the Debtors' counsel. PricewaterhouseCoopers LLP is the Debtors' financial advisor. GRL Capital Advisors acts as the Debtors' restructuring advisors. GRL's Glenn Langberg served as the Debtors' chief restructuring officer. Mr. Langberg also oversaw the bankruptcy and sales of Big M Inc., operator of the Mandee and Annie Sez stores. Rust Consulting/Omni Bankruptcy is the Debtors' claims and noticing agent. Salus Capital Partners LLC and Sterling National Bank have committed to provide up to $49 million in DIP financing to the Debtors. KID BRANDS: Bonnie Glantz Fatell Named as Privacy Ombudsman ----------------------------------------------------------- The United States Trustee seeks an order directing the appointment of a consumer privacy ombudsman. In an order dated August 5, 2014, the court, with the conformity of the debtors and the UST directed, the UST to appoint one disinterested person to serve as the consumer privacy ombudsman. Thus, on the same day, the UST filed before the court the notice of appointment of Bonnie Glantz Fatell as the consumer privacy ombudsman. The consumer privacy ombudsman shall make every practical effort to review the sale of substantially all the assets of debtor sassy and the transfer of certain assets of other debtors, free and clear liens, claims and encumbrances, subject to higher and better offer. Bonnie Glantz Fatell, as consumer privacy ombudsman, shall, likewise, issue a report on such sale within two weeks from appointment. The sale of all the assets of sassy includes certain information of consumers, including names, and other various forms of contact information. Due to this, the appointment of a consumer privacy ombudsman is proper. Ms. Fatell is a partner at the law firm of Blank Rome. On the Net: http://is.gd/pJXIoz About Kid Brands Based in Rutherford, New Jersey, Kid Brands, Inc., is a designer, importer, marketer, and distributor of infant and juvenile consumer products. Its operating subsidiaries consist of Kids Line, LLC, CoCaLo, Inc., Sassy, Inc., and LaJobi, Inc. Providing "everything but the baby" for a child's nursery, the company sells infant bedding and accessories under the Kids Line and CoCaLo brands; nursery furniture under the LaJobi brand; and baby care items under the Kokopax and Sassy brands. Citing their inability to raise capital due to contingent liabilities and operational issues, Kid Brands and six of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 14-22582) on June 18, 2014. To preserve the value of their assets, the Debtors are pursuing a sale of the assets pursuant to section 363 of the Bankruptcy Code. As of April 30, 2014, the Debtors had $32.40 million in total assets and $109.1 million in total liabilities. As of the Petition Date, unsecured debts totaled $54 million. Judge Donald H. Steckroth oversees the cases. The Debtors have sought and obtained an order directing joint administration of their Chapter 11 cases. Lowenstein Sandler LLP serves as the Debtors' counsel. PricewaterhouseCoopers LLP is the Debtors' financial advisor. GRL Capital Advisors acts as the Debtors' restructuring advisors. GRL's Glenn Langberg served as the Debtors' chief restructuring officer. Mr. Langberg also oversaw the bankruptcy and sales of Big M Inc., operator of the Mandee and Annie Sez stores. Rust Consulting/Omni Bankruptcy is the Debtors' claims and noticing agent. Salus Capital Partners LLC and Sterling National Bank have committed to provide up to $49 million in DIP financing to the Debtors. LADDER CAPITAL: Fitch Affirms 'BB' Issuer Default Rating -------------------------------------------------------- Fitch Ratings has affirmed Ladder Capital Finance Holdings LLLP and Ladder Capital Finance Corp's (collectively, Ladder) long-term Issuer Default Ratings and senior unsecured debt at 'BB'. The Rating Outlook for both entities is Stable. KEY RATING DRIVERS - IDRs and Senior Debt The affirmations reflect Ladder's conservative leverage and operating profile, strong credit and performance trends, good liquidity and experienced management team. Rating constraints include limited financial flexibility due to a high proportion of secured funding, exposure to cyclical commercial real estate (CRE) markets, an operating history which is limited to post-crisis, and key man risk. Successful IPO On Feb. 11, 2014, Ladder completed an initial public offering (IPO) of $259 million of class A common stock at an issue price of $17 per share, reflecting a 19% premium to the then book value. Proceeds were primarily used to invest and grow the business. Fitch views the IPO as neutral to ratings. The public ownership addresses the relatively shorter-term investment horizon of some of Ladder's private equity firm owners, which could have otherwise potentially introduced strategic uncertainty or shareholder friendly activities. However, public ownership could potentially put pressure on the company to generate short-term earnings growth or challenge the company's current balanced operating strategy. Operating Performance Normalizing Ladder continues to post solid operating performance reflecting the attractive opportunities in the CRE lending sector post- crisis. The company reported core earnings of $202.3 million in 2013, up 14% from $177.5 million in 2012. However, gain on sale margins on securitizations, which comprise a material portion of earnings, have begun to normalize due to increased competition in the CRE lending and securitization space. Core earnings declined to $119.1 million in in 1H'14, down 12% from $135.5 million in 1H'13. Still, return on average equity was 17.7% annualized for 1H'14, up slightly compared to 17.5% for full-year 2013, which is viewed as solid, particularly considering the relatively low leverage used during the periods. Fitch believes profitability metrics will continue to normalize as competition increases in the origination space and liquidity increases in the CMBS markets. Increased Balance Sheet Loan Origination Ladder has been very active in taking advantage of market dislocations and proceeds from its 1Q'14 IPO to increase originations of first mortgage balance sheet loans at attractive spreads. In 1H'14, Ladder originated $575.3 million of balance sheet loans, up significantly from $179 million in 1H'13. As of June 30, 2014, Ladder held 35 balance sheet first mortgage loans with a book value of $912.2 million, or 24% of total assets and a weighted average LTV ratio of 69.9%. Balance sheet loans are conservatively underwritten and carry relatively shorter terms than conduit loans. However, these bridge loans are also considered less liquid as they are backed by transitional or less stabilized properties. Through 2Q'14, Ladder had not suffered any credit losses on these loans, which can be attributed not only to the company's conservative underwriting standards, but also to the fact that these loans have been originated in the benign post- crisis credit environment. Nevertheless, this portfolio does provide a more stable source of net interest income and origination fees compared to the gain on sale of loans into securitization. RE Equity Investment Stabilizing Real estate equity investments measured $561.2 million at June 30, 2014, down slightly from $624.2 million at YE13, as real estate purchase activity was quiet in 1H'14 with no new investments, while the company sold two assets and continued to sell residential condos in Miami, FL and Las Vegas, NV. Still, gross real estate equity exposure as a percentage of total assets has substantially increased to 14.7% at June 30, 2014, from just 1.1% at YE'11. While such real estate equity investments are in control positions and may have sound credit fundamentals, they typically have less liquidity, which warrants active management of the positions while limiting their size relative to Ladder's overall balance sheet. Conservative Leverage Ladder's conservative capitalization and leverage profile is one of its key ratings strength. Leverage, measured as debt to tangible equity, was 1.5x at the end of 2Q'14, well below the company's internal target of 2.0x to 3.0x, and down from 1.9x at year-end 2013, as proceeds from the IPO were used in part to repay debt. Tangible equity to tangible assets was a solid 38.4% at June 30, 2014, up slightly from 34% at year-end 2013, and compares favorably to similarly rated financial institutions. Fitch expects management to conservatively manage its leverage in the 2.0x-3.0x range over the longer term, particularly in light of increased real estate equity investments. Improving Funding Profile, Although FHLB Risks Loom Ladder has continued to diversify and extend its funding profile through its 3Q'14 issuance of seven-year $300 million senior unsecured notes (in addition to its $325 million senior unsecured notes issued in 2012) and replacing repurchase facilities funding with Federal Home Loan Bank (FHLB) borrowings. However, Ladder's funding profile is still dominated by secured debt (85% as of June 30, 2014 before the $300 million unsecured notes issuance) and is relatively short-term in nature (48% of total debt is due within next 18 months), which reduces the company's financial flexibility. Ladder's access to FHLB borrowings through its captive insurer increased to $903 million at the end of 2Q'14, accounting for 41% of total debt funding, up from 18% in FY12. Fitch views FHLB financing favorably, as it provides a stable and economical source of relatively longer-term funding compared to shorter-term repurchase facilities. However, the Federal Housing Finance Agency (FHFA), the regulator of the FHLBs has been scrutinizing the access to FHLB funding from non-bank members through captive insurance companies. On Sept. 2, 2014, the FHFA proposed a rule which would effectively ban captive insurers from gaining FHLB membership while giving existing captives five years to exit the system, which, if enacted, would effectively grandfather Ladder as a member for five years. Interested parties have 60 days to submit any comments on the proposed rule. Fitch believes that Ladder's potential ultimate loss of access to FHLB funding in five years would be manageable, considering Ladder finances high quality conduit loans and CMBS securities with FHLB, which can be replaced with other sources of funding including term debt and repurchase facilities. However, this shift in funding would increase Ladder's cost of borrowing impacting its earnings and profitability metrics, and if replaced with shorter-term repurchase facilities, further reduce Ladder's liquidity profile and financial flexibility. Fitch will monitor the regulatory developments and Ladder's response to the FHFA proposal. Access to more unsecured and longer-term funding sources would be viewed positively. Improved Contingent Liquidity In February 2014, Ladder entered into a $75 million syndicated unsecured revolving credit facility with a three-year maturity and pricing of one month LIBOR plus 3.5%. Fitch views this facility favorably as it is unsecured in nature and improves the company's contingent liquidity. At June 30, 2014, Ladder had $1.25 billion of excess committed capacity under its committed secured repurchase funding facilities, $358.9 million of undrawn committed term financing from FHLB, $50 million under its secured credit agreement, and $75 million in the above mentioned facility for a combined $1.7 billion available to fund future growth in its business. Furthermore, unencumbered assets and unrestricted cash measured $728 million at 2Q'14, providing ample coverage for unsecured debt holders and offering a good source of contingent liquidity. However, high liquidity levels are viewed as appropriate relative to the short-term nature of some of Ladder's funding sources, particularly repurchase facilities. RATING SENSITIVITIES - IDRs and Senior Debt The Stable Outlook assigned to Ladder reflects Fitch's expectation that the company will continue to prudently grow its business, maintain underwriting standards, manage leverage conservatively, monetize some of or otherwise lower its direct real estate equity exposure, and continue to access diversified longer-term funding sources, while maintaining adequate liquidity levels. The following factors may have a positive impact on Ladder's ratings and/or Outlook: -- Greater revenue diversity with reduced reliance on gain on sale income; -- Sustained profitability and asset quality performance through multiple market environments, while maintaining conservative leverage and strong liquidity levels; -- Increased economic access to long-term unsecured debt funding. These factors may have a negative impact on Ladder's ratings and/or Outlook: -- Regulatory or political risks that immediately impede access to FHLB borrowings without an offsetting increase in long- term economic sources of funding; -- Change in management or organizational structure that adversely impacts the current balanced and conservative approach of operating the company; -- Material increase in exposure to more aggressively underwritten balance sheet loans or real estate equity investments without adequate reserves and commensurate decrease in leverage; -- An increase in leverage beyond the company's articulated target; -- Reduction in liquidity levels and/or unencumbered assets relative to outstanding unsecured debt; -- Sustained operating losses or material weakening of asset quality. LAKELAND DEVELOPMENT: Sept. 16 Hearing on Bonus Payments Approval ----------------------------------------------------------------- The Bankruptcy Court will convene hearing on Sept. 16, 2014, at 9:00 a.m., to consider Lakeland Development Company's motion for approval of payment of bonuses to its management and employees. At the hearing, the Court will also consider the objection filed by the U.S. Trustee. The U.S. Trustee explained that (i) the motion was vague; (ii) it failed to provide adequate information; (iii) failed to sustain the movant's burden of proof; and failed to Comply with Section 503(c0 of the Bankruptcy Code. The Debtor, in its motion, requested that the Court approve the payment of performance bonuses to its executives and staff in the total amount of $400,000. The bonus will be in recognition of their efforts in: -- finding the buyer of the Debtor's remaining 38 acre parcels of real property, Goodman Santa Fe Springs SPE, LLC; -- negotiating the terms of the sale of the 38 acre parcels of the Debtor's land; and -- executing all steps necessary for the Debtor to consummate its duties under the agreements and successfully close the transaction, which led to the payment in full of over $10,000,000 in secured claims (including over $6,000,000 in property taxes, some going back almost 20 years). The Debtor also said that it has sufficient funds on hand to pay the performance bonus. The Debtor proposed to divide the bonus among its officers and staff in shares directly proportional to the salaries and wages which they are paid. About Lakeland Development Company Santa Fe Springs, California-based Lakeland Development Company is a privately held subsidiary in a family of companies headed by Energy Merchant Corp. Lakeland owns the real property located at 12345 Lakeland Road, Santa Fe Springs, California. The real property is composed of 10 parcels totaling roughly 55 acres. Lakeland filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-25842) in Los Angeles on May 4, 2012. Judge Richard M. Neiter presides over the case. Lawrence M. Jacobson, Esq., at Glickfeld, Fields & Jacobson LLP, and The Law Offices of Richard T. Baum, Esq., serve as the Debtor's counsel. The petition was signed by Michael Egner, chief financial officer. LAKSHMI HOSPITALITY: Files for Chapter 11 in San Diego ------------------------------------------------------ Lakshmi Hospitality Group, LLC, owner of a hotel in Fenton, Missouri, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Cal. Case No. 14-07199) in San Diego, California, on Sept. 5, 2014, without stating a reason. The Debtor owns commercial buildings at 1680 Fenton Business Part Ct., Fenton, MO, and 1662 Fenton Business Part Ct., Fenton, MO, each worth $5 million, and securing a $3.95 million debt. The company's real property consists of $414,000 cash, $200,000 in office equipment and $2,000,000 worth of equipment and supplies. The Debtor's secured creditors are Enterprise Bank & Trust, owed $4.66 million on a first mortgage and Business Finance Corp. of St. Louis, owed $3.24 million on a secondary mortgage. The Debtor disclosed $163,000 of unsecured nonpriority claims. The case is assigned to Judge Margaret M. Mann. The Debtor has tapped J. Bennett Friedman, Esq., at Friedman Law Group, P.C., in Los Angeles, as counsel. LDK SOLAR: Files Schemes of Arrangement in Hong Kong ---------------------------------------------------- LDK Solar Co., Ltd., in provisional liquidation and its Joint Provisional Liquidators, Tammy Fu and Eleanor Fisher, both of Zolfo Cooper (Cayman) Limited, announced that, subsequent to the filing on Aug. 29, 2014, by the Company and its subsidiary, LDK Silicon & Chemical Technology Co., Ltd., of the petition to commence their restructuring proceedings in the Grand Court of the Cayman Islands, the Company, LDK Silicon and LDK Silicon Holding Co., Limited have each applied to file an originating summons to commence their restructuring proceedings in the High Court of Hong Kong. The Company is awaiting confirmation of the date of the first hearing before the Hong Kong Court. At that hearing, the Company, LDK Silicon, LDK Silicon Holding and the JPLs will seek orders to convene meetings of the scheme creditors of the Company, LDK Silicon and LDK Silicon Holding on or around Oct. 17, 2014, Hong Kong time, to consider and approve their respective Hong Kong schemes of arrangement. Similarly, the Company, LDK Silicon and the JPLs will seek orders to convene meetings of the scheme creditors of the Company and LDK Silicon on or around Oct. 16, 2014, Cayman Islands time, to consider and approve their respective Cayman Islands schemes of arrangement. On Sept. 5, 2014, the Company and LDK Silicon filed evidence in support of their application to the Cayman Court for orders convening meetings of their scheme creditors, including the proposed Explanatory Statement relating to the Cayman and Hong Kong schemes of arrangement. The Company also submitted a periodic report on Form 6-K to the U.S. Securities and Exchange Commission on Sept. 8, 2014, containing such Explanatory Statement. In addition, as a result of the resignation by Mr. Xiaofeng Peng, former Chairman of the Company, on Aug. 29, 2014, Mr. Xingxue Tong, current president and chief executive officer of the Company, has since assumed the Interim Chairman position during the transition period before a permanent Chairman is identified and appointed. To enhance the corporate governance of the Company during this interim period, the Board of Directors of the Company, with the consent of the JPLs, has established an interim executive committee, effective Sept. 4, 2014, to supervise and support the work of the Interim Chairman during the provisional liquidation of the Company and to be responsible and to report to the Board, subject to the authority of the JPLs as sanctioned by the Cayman Court. The Board also approved, with the consent of the JPLs, that the Executive Committee be composed of three existing members of the Board: (1) Mr. Zhibin Liu (director of Heng Rui Xin Energy (HK) Co., Limited, a major shareholder of the Company and an affiliate of the Xinyu City government), (2) Mr. Xingxue Tong (current president and chief executive officer of the Company), and (3) Mr. Shi Chen (member of the Board nominated by Fulai Investments Limited, a major shareholder of the Company). The Executive Committee is headed by Mr. Zhibin Liu and is subject to dissolution by the Board when a permanent Chairman of the Board has been identified and appointed. A copy of the proposed Explanatory Statement is available for free at http://is.gd/7KPRhG About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi- Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. LDK Solar Co disclosed a net loss of $1.05 billion on $862.88 million of net sales for the year ended Dec. 31, 2012, as compared with a net loss of $608.95 million on $2.15 billion of net sales for the year ended Dec. 31, 2011. KPMG, in Hong Kong, China, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Group has a net working capital deficit and a deficit in total equity as of Dec. 31, 2012, and is restricted from incurring additional indebtedness as it has not met a financial covenant ratio as defined in the indenture governing the RMB-denominated US$-settled senior notes. These conditions raise substantial doubt about the Group's ability to continue as a going concern. LEHMAN BROTHERS: To Sell $2.5 Billion in Bankruptcy Claims ---------------------------------------------------------- Chelsey Dulaney, writing for The Wall Street Journal, reported that Lehman Brothers Holdings Inc. said it has agreed to sell $2.5 billion in bankruptcy claims that the failed investment bank holds against its U.S. brokerage arm. According to the report, the claims will be sold for $619 million, or about 24.8% of face value. Lehman's holding company owns a $6.9 billion unsecured creditor claim against its U.S. brokerage arm, the Journal said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Seeks Quick Win Over Citi in Interest Fight ------------------------------------------------------------ Joseph Checkler, writing for The Wall Street Journal, reported that Lehman Brothers Holdings Inc. urged U.S. Bankruptcy Judge Shelley C. Chapman in Manhattan to give it a quick victory over Citigroup Inc. in a fight over whether Citi can keep collecting millions in interest on $2 billion Lehman gave it shortly before its collapse. According to the report, Lehman argued that Citi's claims are only secured by "setoff rights," or balancing of mutual debts. These types of claims, Lehman argues, aren't subject to the interest accrued since Lehman's bankruptcy filing, the Journal related. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Claren Road, Underwriters Lost Dist. Court Appeal ------------------------------------------------------------------ District Judge Shira A. Scheindlin ruled on three related appeals from two orders entered by Bankruptcy Judge James M. Peck in Lehman Brothers Inc.'s liquidation proceedings pursuant to the Securities Investor Protection Act of 1970. The Orders grant a motion and sustain an objection filed by the SIPA Trustee, James W. Giddens, seeking to subordinate certain claims pursuant to section 510(b) of the Bankruptcy Code. The Bankruptcy Court found that subordination of the claims to the claims of general unsecured creditors was mandated under the plain language of section 510(b). Claren Road Credit Master Fund Ltd. took an appeal from those rulings, arguing that its claim for damages against LBI, based on LBI's failure to purchase bonds issued by LBHI from Claren Road pursuant to a prime brokerage account agreement, should not be subordinated because it does not "aris[e] from the purchase or sale" of the LBHI bonds within the meaning of section 510(b). In addition, Claren Road and the remaining appellants, co- underwriters with LBI in the issuance of LBHI securities, argue that section 510(b) is inapplicable because there are no claims or interests "represented by" LBHI securities in LBI's SIPA proceeding. A joint appeal was filed by underwriters ANZ Securities, Inc. ("ANZ"), BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, Cabrera Capital Markets, LLC, DNB Markets, Inc., BNP Paribas FS, LLC, nabSecurities, LLC, National Australia Bank Ltd., SunTrust Robinson Humphrey, Inc. and The Williams Capital Group, L.P. I will refer to these underwriters collectively as "ANZ." Underwriter UBS Financial Services Inc. ("UBSFS") is represented by separate counsel and has filed a separate appeal. Judge Scheindlin affirmed the two Orders entered by the Bankruptcy Court. According to Judge Scheindlin, section 510(b) mandates the subordination of arising-from and contribution claims, provided such claims are based on securities of a debtor or an affiliate of the debtor. The level of subordination can be determined by reference to the type of claim or interest represented by such security -- e.g., secured, unsecured, common stock, or equity. In cases involving affiliate securities, the type of security dictates the level of subordination whether or not that security represents an actual claim in the debtor's case. A copy of the Court's September 5, 2014 Opinion and Order is available at http://is.gd/4dBhOCfrom Leagle.com. Marshall R. King, Esq., Matthew J. Williams, Esq., and Joshua Weisser, Esq., at Gibson, Dunn, & Crutcher LLP, New York, NY, argue for Claren Road Credit Master Fund Ltd. Joshua Dorchak, Esq., at Bingham McCutchen LLP, argues for UBS Financial Services Inc. Mitchell A. Lowenthal, Esq., and Luke A. Barefoot, Esq., at Cleary Gottlieb Steen & Hamilton LLP, represent ANZ Securities, Inc., BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, Cabrera Capital Markets, LLC, DNB Markets, Inc., BNP Paribas FS, LLC, nabSecurities, LLC, National Australia Bank Ltd., SunTrust Robinson Humphrey, Inc. and The Williams Capital Group, L.P. James B. Kobak, Jr., Esq., Michael E. Salzman, Esq., Ramsey Chamie, Esq., and Dina R. Hoffer, Esq., at Hughes Hubbard & Reed LLP, represent James W. Giddens, as Trustee for the SIPA Liquidation of Lehman Brothers, Inc. LIFE UNIFORM: Can Sell Rights to Class Action Recoveries -------------------------------------------------------- U.S. Bankruptcy Judge Kevin J. Carey has authorized LUHC Wind Down Corp., formerly known as Life Uniform Holding Corp., and its affiliates, to sell rights to any payments they may recover as a result of a class action interchange litigation. As reported in the TCR on July 17, 2014, an action was initiated in the U.S. District Court for the Eastern District of New York by various retailers and trade associations against Visa U.S.A. Inc. and Mastercard International Inc. The plaintiffs asserted that Visa and Mastercard conspired to unlawfully fix the price of interchange fees to merchants for transactions processed over their networks. An interchange fee is a fee that a merchant's bank pays a customer's bank when merchants accept cards using card networks like Visa and MasterCard for purchases. On Dec. 13, 2013, the Eastern District Court approved a class settlement in the class action interchange litigation. The order approving the settlement is under appeal. Life Uniform may have a claim in the litigation and may be entitled to a monetary recovery. However, it is impossible to predict when the settlement event will occur and any actual recovery could be obtained. To bring additional assets into their estates, Life Uniform want to sell their contingent rights to Cascade Settlement Services LLC or a party submitting a better offer. The parties have negotiated an asset purchase agreement, selling the assets for $135,000, but is subject to higher offers. Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg LLP, in Wilmington, Delaware, relates that Life Uniform has attempted to market the asset and reached out to all known industry players. Of the interest received, Life Uniform determined the agreement with Cascade provided the best opportunity. Life Uniform is represented by: Domenic E. Pacitti, Esq. Michael W. Yurkewicz, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 919 N. Market Street, Suite 1000 Wilmington, DE 19801 Telephone: (302) 426-1189 Facsimile: (302) 426-9193 About Life Uniform Life Uniform was founded in 1965 when Angelica Corporation decided to enter the retail uniform industry. The first Life Uniform store opened in 1965 in Clayton, Missouri. At present, Life Uniform is the nation's largest independently owned medical professional supplier. Sun Uniform LLC acquired Life Uniform in July 2004. Since the acquisition by Sun the company addressed sagging profitability and overhead issues and quickly drove increases in profitability through a combination of store rationalization and sensible corporate overhead initiatives. However, recent performance has been declining in terms of revenue. This is due to the company's liquidity issues, which prevented the company from completing its e-commerce system upgrade, encourage better pricing from vendors, and maintain sufficient capital. Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and Uniform City National Inc. filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The petitions were signed by Bryan Graiff, COO, CFO, VP, secretary, and treasurer. Life Uniform Holding disclosed $10,695,870 in assets and $36,821,034 in liabilities as of the Chapter 11 filing. Life Uniform and Uniform City received court authority on July 26 to sell the business for $22.6 million to Scrubs & Beyond LLC. There were no competing bids, so an auction wasn't held. First lien lender CapitalSource Finance LLC is owed on a $11.5 million revolver and $26 million term loan. CapitalSource is represented by Brian T. Rice, Esq., at Brown Rudnick LLP; and Jeffrey C. Wisler, Esq., at Connolly Gallagher LLP. Sun Uniforms Finance LLC is owed $6.1 million in principal on a second lien note and holds two additional notes, each in the original principal of $1.08 million. Angelica Corp. holds an unsecured junior subordinate not in the principal amount of $5.48 million. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as the Debtors' administrative agent, and claims and noticing agent. he Debtors' financial advisor is Capstone Advisory Group, LLC. rowe Horwath LLP serves as tax accountants and Brown Smith Wallace LLC as wind-down tax accountants. Richard Stern, Esq., at Luskin Stern & Eisler LLP, was appointed independent fee examiner in the case. Luskin, Stern & Eisler LLP serves as his counsel and The Rosner Law Group LLC, serves as his Delaware counsel. The Official Committee of Unsecured Creditors is represented by Seth Van Aalten, Esq., at Cooley LLP, and Ann M. Kashishian, Esq., at Cousins Chipman & Brown, LLP as counsel. The U.S Trustee for Region 3 appointed Boris Segalis of InfoLawGroup LLP as consumer privacy ombudsman in the case. LMM SPORTS: Case Summary & 8 Largest Unsecured Creditors -------------------------------------------------------- Debtor: LMM Sports Management, LLC 10115 E. Bell RD., Suite 107-455 Scottsdale, AZ 85260 Case No.: 14-13952 Chapter 11 Petition Date: September 10, 2014 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Hon. Daniel P. Collins Debtor's Counsel: John R. Clemency, Esq. GALLAGHER & KENNEDY, P.A. 2575 East Camelback Road, Suite 1100, Phoenix, AZ 85016 Tel: 602-530-8040 E-mail: john.clemency@gknet.com Total Assets: $1.06 million Total Liabilities: $3.84 million The petition was signed by Ethan Lock, CEO. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/azb14-13952.pdf LONGVIEW POWER: Change in Alvarez and Marsal's Retention Approved ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Longview Power LLC, et al., to modify the scope of retention of Alvarez and Marsal North America, LLC, to permit Raymond Dombrowski to resign from his position as the Mepco Debtors' Chief Restructuring Officer, and to permit James M. Grady to resign from his position as the Debtors' Deputy Chief Financial Officer. The Debtors are authorized to continue utilizing (a) Messrs. Dombrowski and Grady as Administrative Officers; and (b) additional A&M Personnel as the Debtors may require. The Debtors retained the services of the CRO and the Deputy CFO to, among other things: (a) assess and recommend cost reduction strategies; (b) review the Debtors' business plan and assist in the execution of operational changes and performance improvement initiatives; and (c) assist the Debtors in their duties as debtors-in-possession. About Longview Power LLC Longview Power LLC is a special purpose entity created to construct, own, and operate a 695 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh. The project is owned 92% by First Reserve Corporation (First Reserve or sponsor), a private equity firm specializing in energy industry investments, through its affiliate GenPower Holdings (Delaware), L.P., and 8% by minority interests. Longview Power, LLC, filed a Chapter 11 (Bank. D. Del. Lead Case 13-12211) on Aug. 30, 2013. The petitions were signed by Jeffery L. Keffer, the Company's chief executive officer, president, treasurer and secretary. The Debtor estimated assets and debts of more than $1 billion. Judge Brendan Linehan Shannon presides over the case. Kirkland & Ellis LLP and Richards, Layton & Finger, P.A., serve as the Debtors' counsel. Lazard Freres & Company LLC acts as the Debtors' investment bankers. Alvarez & Marsal North America, LLC, is the Debtors' restructuring advisors. Ernst & Young serves as the Debtors' accountants. The Debtors' claims agent is Donlin, Recano & Co. Inc. The Debtor disclosed assets of $1,717,906,595 plus undisclosed amounts and liabilities of $1,075,748,155 plus undisclosed amounts. Roberta A. DeAngelis, U.S. Trustee for Region 3, disclosed that as of September 11, 2013, a committee of unsecured creditors has not been appointed in the case due to insufficient response to the U.S. Trustee's communication/contact for service on the committee. LUCAS ENERGY: Posts $1.25-Mil. Net Loss in Second Quarter --------------------------------------------------------- Lucas Energy, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1.25 million on $941,920 of total revenues for the three months ended June 30, 2014, compared with a net loss of $944,744 on $1.48 million of total revenues for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $40.8 million in total assets, $4.91 million in total liabilities, asset retirement obligation of $1 million, $4.52 million in long- term notes payable and stockholders' equity of $30.37 million. A copy of the Form 10-Q is available at: http://is.gd/Fao65f Lucas Energy, Inc., is an independent oil and natural gas company based in Houston. The Company acquires and develops crude oil and natural gas from various known productive geological formations, including the Austin Chalk, Eagle Ford and Buda formations, primarily in Gonzales, Wilson and Karnes Counties south of the city of San Antonio; and the Eaglebine, Buda, and Glen Rose formations in Leon and Madison Counties north of the city of Houston, Texas. MACKEYSER HOLDINGS: Selling Flint's Asset to Hearing Management --------------------------------------------------------------- The Bankruptcy Court authorized Mackeyser Holdings, LLC, et al., to sell the "hearing assets" of Flint Michigan and Saginaw, Michigan practice to Hearing Management Systems, LLC. Pursuant to an asset purchase agreement among AOS-OMS, LLC, EHS- Riverfront LLC, Optical Management Systems Inc., and Riverfront Hearing, Inc., and the purchaser dated Sept. 2, 2014, the purchaser will pay the seller $360,000 for the transferred assets. About MacKeyser Holdings, LLC MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. The U.S. Trustee for Region 3 has appointed three creditors to serve on the official committee of unsecured creditors. MACKEYSER HOLDINGS: Selling Anderson and Indianapolis Practice -------------------------------------------------------------- The Bankruptcy Court authorized Mackeyser Holdings, LLC, et al., to sell assets of Anderson, Indiana Practice free and clear of liens and other interests to Wisconsin Vision, Inc. Pursuant to a bill of sale between American Optical services, LLC and AOS-OMS, LLC, and the purchaser dated as of Sept. 2, 2014, the purchaser will pay the seller $50,000 and other good and valuable consideration. In a separate order, the Court authorized the Debtor to sell assets of Indianapolis, Indiana Practice. Pursuant to a bill of sale between American Optical Services, LLC and AOS-OMS, LLC, and Wisconsin Vision, Inc, the purchaser, dated as of Sept. 2, 2014, the purchaser will pay the seller $10,000 and other good and valuable consideration. About MacKeyser Holdings, LLC MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. The U.S. Trustee for Region 3 has appointed three creditors to serve on the official committee of unsecured creditors. MACKEYSER HOLDINGS: Taps Hammond Hanlon as Investment Banker ------------------------------------------------------------ Mackeyser Holdings, LLC, et al., in an amended motion, asked for permission to employ Hammond Hanlon Camp, LLC to serve as exclusive investment banker nunc pro tunc to June 20, 2014. The Debtors sought to sell substantially all of their assets to a sales process under Section 363 of the Bankruptcy Code. In this relation, H2C will perform the investment banking services, among other things: a) advise and assist the Debtor in analyzing, structuring and negotiating the financial aspects of any restructuring transaction; b) advise and assist the Debtors in formulating a plan of reorganization or liquidation or analyze any proposed plan; and c) assist the Debtors in identifying and evaluate candidates for potential sale transactions involving any assets or operations of the Debtors. The Debtors disclose that they are seeking to employ Cole Schotz, Meisel, Forman & Leonard, P.A. as bankruptcy counsel, and GlassRatner Advisory & Capital Group, LLC, as financial advisor. H2C will work closely with GlassRatner and Cole Schotz to prevent any duplication of efforts in the course of advising the Debtors. The Debtor will compensate H2C with: 1. a monthly fee of $50,000, payable in advance; and 2. an advisory services fee of $250,000 payable Sept. 3, 2014. Roberta A. DeAngelis, U.S. Trustee for Region 3, objected to the application, stating that the Court must not authorize H2C's retention pursuant to an engagement agreement that provides "H2C shall act as an independent contractor under the agreement and not in any other capacity including any fiduciary capacity." The U.S. Trustee said that professionals retained by a Debtor are fiduciaries. About MacKeyser Holdings, LLC MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. The U.S. Trustee for Region 3 has appointed three creditors to serve on the official committee of unsecured creditors. MACKEYSER HOLDINGS: Cooley LLP Approved as Panel's Lead Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of MacKeyser Holdings, LLC and its debtor-affiliates, sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Cooley LLP as lead counsel, nunc pro tunc to July 8, 2014. The Committee requires Cooley LLP to: (a) attend the meetings of the Committee; (b) review financial and operational information furnished by the Debtors to the Committee; (c) investigate and determine the value of unencumbered assets; (d) analyze and negotiate the budget and the terms of the debtor-in-possession financing; (e) assist in the efforts to sell assets or equity of the Debtors in a manner that maximizes the value for creditors; (f) analyze any proposed chapter 11 plan; (g) review and investigate the liens of purported secured parties; (h) review and investigate prepetition transactions in which the Debtors and their insiders were involved; (i) confer with the Debtors' management, counsel and financial advisors; (j) review the Debtors' schedules, statements of financial affairs and business plan; (k) advise the Committee as to the ramifications regarding all of the Debtors' activities and motions before this Court; (l) file appropriate pleadings on behalf of the Committee; (m) review and analyze the Debtors' investment banker's work product and report to the Committee; (n) provide the Committee with legal advice in relation to the Chapter 11 cases; (o) prepare various applications and memoranda of law submitted to the Court for consideration; and (p) perform other legal services for the Committee as may be necessary or proper in these proceedings. Cooley LLP will be paid at these discounted hourly rates: Lawrence C. Gottlieb, Partner $845.75 Michael Klein, Associate $603.50 Robert B. Winning, Associate $476 Jeremy Rothstein, Associate $318.75 Kris Cachia, Paralegal $221 Cooley LLP will also be reimbursed for reasonable out-of-pocket expenses incurred. Lawrence C. Gottlieb, partner of Cooley LLP, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Cooley LLP can be reached at: Lawrence C. Gottlieb, Esq. COOLEY LLP The Grace Building 1114 Avenue of the Americas New York, NY 10036-7798 Tel: +1 (212) 479-6140 Fax: +1 (212) 479-6275 E-mail: lgottlieb@cooley.com About MacKeyser Holdings, LLC MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. The U.S. Trustee for Region 3 has appointed three creditors to serve on the official committee of unsecured creditors. MACKEYSER HOLDINGS: Klehr Harrison Okayed as Panel's Co-counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of MacKeyser Holdings, LLC and its debtor-affiliates, sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Klehr Harrison Harvey Branzburg LLP as co- counsel to the Committee, nunc pro tunc to July 8, 2014. The Committee requires Klehr Harrison to: (a) advise the Committee with respect to its rights, powers and duties in these cases; (b) assist, advise and represent the Committee in analyzing the Debtors' assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales or dispositions; (c) attend meetings and negotiate with representatives of the Debtors and secured creditors; (d) assist and advise the Committee in connection with any proposed sale of the Debtors' assets; (e) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; (f) assist the Committee in the review, analysis and negotiation of any plans of reorganization that may be filed and to assist the Committee in the review, analysis and negotiation of the disclosure statement accompanying any plans of reorganization; (g) assist the Committee in the review, analysis, and negotiation of any financing or funding agreements; (h) assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in these cases; (i) take all necessary action to protect and preserve the interests of the Committee, including, without limitation, the prosecution of actions on its behalf, negotiations concerning all litigation in which the Debtors are involved, and review and analysis of all claims filed against the Debtors' estates; (j) generally prepare and file on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; (k) appear, as appropriate, before this Court, the Appellate Courts, and other Courts in which matters may be heard and to protect the interests of the Committee before said Courts and the United States Trustee; and (l) perform such other legal services in these cases as may be required and are deemed to be in the interests of the Committee in accordance with the Committees' powers and duties as set forth in the Bankruptcy Code. Klehr Harrison will be paid at these discounted hourly rates: Richard M. Beck, partner $575 Sally E. Veghte, associate $290 Chadd Fitzgerald, paralegal $160 Partners $360-$700 Associates $230-$425 Paralegals $150-$300 Klehr Harrison will also be reimbursed for reasonable out-of- pocket expenses incurred. Richard M. Beck, member of Klehr Harrison, 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. Klehr Harrison can be reached at: Richard M. Beck, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 919 Market Street, Suite 1000 Wilmington, DE 19801 Tel: (302) 426-1189 Fax: (302) 426-9193 E-mail: rbeck@klehr.com About MacKeyser Holdings, LLC MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. The U.S. Trustee for Region 3 has appointed three creditors to serve on the official committee of unsecured creditors. MACKEYSER HOLDINGS: Panel Can Hire Giuliano Miller as Advisors -------------------------------------------------------------- The Official Committee of Unsecured Creditors of MacKeyser Holdings, LLC and its debtor-affiliates, sought and obtained authorization from the U.S. Bankruptcy Court for the District of Delaware to retain Giuliano, Miller & Company, LLC as financial advisor to the Committee, nunc pro tunc to July 11, 2014. The Committee requires Giuliano Miller to: (a) assist, advise and represent the Committee in its consultation with the Debtors relative to the administration of these Chapter 11 cases; (b) assist, advise and represent the Committee in analyzing the Debtors' assets and liabilities, investigate the extent and validity of liens and participating in and reviewing any proposed asset sales or dispositions; (c) attend meetings and negotiate with the representatives of the Debtors and secured creditors; (d) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; (e) assist the Committee in the review, analysis and negotiation of any plans of reorganization or liquidation that may be filed and to assist the Committee in the review, analysis and negotiation of the disclosure statement accompanying any plans of reorganization or liquidation; (f) assist the Committee in the review, analysis, and negotiation of any financing or funding agreements; (g) assist the Committee in the liquidation or sale of the Debtors' assets; (h) review and analyze claims filed against the Debtors' estate; (i) generally assist the Committee with all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; (j) appear, as appropriate, before this Court, the Appellate Courts, and other Courts in which matters may be heard and to protect the interests of the Committee before said Courts and the Unites States Trustee; and (k) perform all other necessary financial advisory services in this case. Giuliano Miller will be paid at these discounted hourly rates: Senior Partner $595 Managers $425-$450 Staff $270-$375 Paraprofessionals $160-$180 Giuliano Miller will also be reimbursed for reasonable out-of- pocket expenses incurred. Donna M. Miller, senior manager of Giuliano Miller, 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. Giuliano Miller can be reached at: Donna M. Miller GIULIANO, MILLER & COMPANY, LLC Berlin Business Park 140 Bradford Drive West Berlin, NJ 08091 Tel: (856) 767-3000 ext. 23 E-mail: dmiller@giulianomiller.com dmiller@giulianomiller.com About MacKeyser Holdings, LLC MacKeyser Holdings, LLC and its operating affiliates -- American Optical Services, LLC, and Exela Hearing Services, LLC -- manage integrated eye care and hearing systems providers with over 80 optical retail, optometry and ophthalmology locations in 14 states. Within certain of the Company's locations, dedicated audiology and dispensing staff conduct diagnostics, fitting and dispensing of hearing systems. MacKeyser Holdings, LLC, American Optical Services, Inc. and their affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 14-11528 to 14-11550) on June 20, 2014. David R. Hurst, Esq., and Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, PA. The Debtors' financial advisor is GlassRatner Advisory & Capital Group. The investment banker is Hammond Hanlon Camp LLC. The noticing and claims management agent is American Legal Claim Services, LLC. In its petition, MacKeyser Holdings estimated $50 million to $100 million in both assets and liabilities. The petitions were signed by Thomas J. Allison, authorized officer. The U.S. Trustee for Region 3 has appointed three creditors to serve on the official committee of unsecured creditors. MAINE MONTREAL: Chap. 11 Trustee May Disburse $1.3-Mil. to FRA -------------------------------------------------------------- The Honorable Louis H. Kornreich granted, in part, the motion for an order determining the allocation of the purchase price for Montreal Maine & Atlantic Railway, Ltd.'s assets, and enforcing order approving carve-out. The Allocation Motion was brought by the United States of America, through the Department of Transportation, Federal Railroad Administration (FRA). The Sale Transaction refers to the sale of the Debtor's assets to Railroad Acquisition Holdings LLC pursuant to an asset purchase agreement, as amended, between Robert J. Keach, as Chapter 11 trustee for the Debtor's estate, the Debtor, MMA Canada and RAH. The Transaction was approved by the Bankruptcy Court on Jan. 24, 2014. In his recent order dated Aug. 22, 2014, Judge Kornreich ruled that subject to reservations, the Chapter 11 Trustee is authorized to disburse the Travelers Insurance Settlement Proceeds amounting to $1,330,000 to the FRA. In the event a final judgment is entered in favor of Wheeling & Lake Erie Railway Company determining that Wheeling & Lake Erie Railway Company determining that Wheeling has a valid, perfected and enforceable security interest in and to all or any portion of the Travelers Insurance Settlement Proceeds, then FRA will repay the amount of the Travel Insurance Settlement Proceeds, then FRA will repay the amount of the Travelers Insurance Settlement Proceeds that it has received to Wheeling in accordance with the terms of such final judgment; provided that upon payment to Wheeling, FRA will have no further liability to any entity with respect to the Travelers Insurance Settlement Proceeds. As reported by The Troubled Company Reporter on July 25, 2014, the Bankruptcy Court entered a closing authorization order on May 8, 2014, approving a third amendment to the asset purchase agreement, which, among other things, authorized the Trustee, the Debtor and RAH to close the sale of the Debtor's assets and MMA Canada's assets either simultaneously or separately. Moreover, FRA has valid first priority liens on both the net escrow sales proceeds and the other escrowed amounts. Under the terms of the carve-out and the second financing order, respectively, FRA is entitled to the distribution of the net escrow sales proceeds and the other escrowed amounts. About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq., and D. Sam Anderson, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's financial advisor. Gordian Group, LLC, serves as the Chapter 11 Trustee's investment banker. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana served as counsel to MM&A. It now serves as counsel to the Chapter 11 Trustee. Justice Martin Castonguay oversees the case in Canada. The Canadian Transportation Agency suspended the carrier's operating certificate after the accident, due to insufficient liability coverage. The town of Lac-Megantic, Quebec, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group is represented by George W. Kurr, Jr., Esq., at Gross, Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP; Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C. Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups, Esq., at Weller, Green Toups & Terrell LLP. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. On Jan. 29, 2014, an ad hoc group of wrongful-death claimants submitted a plan, which would give 75% of the $25 million in available insurance to the families of those who died after an unattended train derailed in Lac-Megantic, Quebec, in July. The other 25% would be earmarked for claimants seeking compensation for property that was damaged when much of the town burned. Former U.S. Senator George Mitchell, a Democrat who represented Maine in the U.S. Senate from 1980 to 1995 and who is now chairman emeritus of law firm DLA Piper LLP, would administer the plan and lead the effort to wrap up MM&A's Chapter 11 bankruptcy. As reported by the Troubled Company Reporter on April 3, 2014, Judge Kornreich ruled that the unofficial committee of wrongful death claimants and its counsel have failed to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure, and as a result of that failure, the Unofficial Committee and its counsel will not be heard on any pending matter in the case. As reported by the TCR on April 11, 2014, Judge Kornreich rejected the disclosure statement for the Plan filed by the ad hoc group of wrongful-death claimants, holding that the Plan is flawed and unconfirmable. MISSION NEW ENERGY: High Court Finds Unit Not Liable to Axens ------------------------------------------------------------- Mission NewEnergy Limited announced that the High Court in Malaysia has ruled that its subsidiary Mission Biofuels Sdn Bhd (MBSB) is not liable to pay several unpaid invoices amounting to approximately US$800,000 to Axens, the technology supplier of MBSB's 250,000 tpa biodiesel plant. Instead the court ruled that KNM Process Systems Sdn Bhd, the contractor, is the party that is liable to make the material payment to Axens. KNM failed to pay Axens who then sought to recover the payment from KNM and/or Mission. During the trial KNM claimed that it should be MBSB's responsibility to pay Axens and not KNM's. The Court further allowed MBSB's counter claim against KNM for several invoices amounting to approximately USD370,000 that MBSB had paid on behalf of KNM to Axens. Nathan Mahalingam, Group CEO of Mission said, "We are extremely pleased with the outcome of this case because it again demonstrates KNM's obligations under the EPCC contract to build the 250,000 tpa refinery, which is the subject of an existing arbitration process in Malaysia." About Mission NewEnergy Based in Subiaco, Western Australia, Mission NewEnergy Limited is a producer of biodiesel that integrates sustainable biodiesel feedstock cultivation, biodiesel production and wholesale biodiesel distribution focused on the government mandated markets of the United States and Europe. The Company is not operating its biodiesel refining segment. The refineries are being held in care and maintenance either awaiting a return to positive operating conditions or the sale of assets. The Company has materially diminished its Jatropha contract farming operation and the company is now focused on divesting the remaining Indian assets. The Company intends to cease all Indian operations. BDO Audit (WA) Pty Ltd, in Perth, Western Australia, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company incurred operating cash outflows of $3.7 million during the year ended 30 June 2013 and, as of that date the consolidated entity's total liability exceeded its total assets by $12.5 million. These conditions, along with other matters, raise substantial doubt the Company's ability to continue as a going concern. MOMENTIVE PERFORMANCE: Bench Ruling on Confirmation of Plan ----------------------------------------------------------- Bankruptcy Judge Robert D. Drain on Sept. 9 issued a "CORRECTED AND MODIFIED BENCH RULING ON CONFIRMATION OF DEBTORS' JOINT CHAPTER PLAN OF REORGANIZATION FOR MOMENTIVE PERFORMANCE MATERIALS INC. AND ITS AFFILIATED DEBTORS." The decision touches on five issues that remain open regarding confirmation of the chapter 11 plan and, with respect to the subordination of the senior subordinated unsecured notes, or the extent of that subordination, and the extent of the so-called make-whole provisions in the first and 1.5 lien indentures, in the three related adversary proceedings covered by the Court's prior order on confirmation hearing procedures. The context of each of these rulings, however, is Judge Drain's my ruling on confirmation of the debtors' chapter 11 plan, which has been modified on the record a couple of times during the confirmation hearing. Judge Drain had adjourned his bench ruling on confirmation of the debtors' chapter 11 plan and the related rulings in the three adversary proceedings to give the parties another day to see if they could negotiate, as between the first and the 1.5 lien holders and the debtors and the second lien holders' representatives, any settlement of their issues. "I gather, since you're all here and looking fairly stony faced, that hasn't happened?," Judge Drain said Tuesday afternoon. "Okay. All right. So, I will give you my ruling on confirmation." Judge Drain held, "It's clear to me that, except for the issues that I am about to rule on and the one other issue that I ruled on last week, namely, the absolute priority rule objection to confirmation of the plan raised by the subordinated noteholders, which I decided in favor of the debtors, there are no disputes as to the confirmation of the plan. And, having reviewed the record, I am prepared to make the findings under section 1129(a) of the Bankruptcy Code required for confirmation, leaving aside, again, the five issues that I am going to address this afternoon." Subordination Among others, Judge Drain accepted Momentive's -- and not the senior subordinated noteholders' -- interpretation of the subordination provisions of the indenture governing the issuance of the notes. He held that "It is clear, therefore, from a plain reading of Section 10.01 of the indenture and the definition of 'Indebtedness' that the indenture and, in particular, its subordination provision, provides for debt or claim subordination, not lien subordination," and that "clearly, liens differ from indebtedness in common parlance and as defined in the indenture. Liens have a life of their own; they are not a characteristic of indebtedness but, rather, secure it." Under Section 10.01 of the indenture, the senior subordinated noteholders have subordinated their right to payment of the debt owed to them to the extent provided for in the indenture to the prior payment in full of all existing and future "Senior Indebtedness." The issue comes down to the definition of "Senior Indebtedness" of the indenture. Judge Drain also held that the subordinated noteholders' interpretation of "Senior Indebtedness" would lead, to the anomalous result that their notes would be subordinated to senior unsecured debt (in Momentive's case, including the second lien debt, which, when issued, was unsecured because it had only a springing lien), but would cease to be subordinated when that lien sprung or when such debt was issued on a secured basis. There is no logical reason for such a distinction, notwithstanding the subordinated noteholders' attempt to find one. "Make-Whole" Claim Judge Drain also explained his ruling on the dispute over the claims of first and 1.5 lien holders to a so-called contractual "make-whole" claim, or, barring such a claim, a common law claim for damages, based on the debtors' payment of their notes before the original stated maturity of the notes. The indenture trustees for the first and 1.5 lien notes argue that the chapter 11 plan's payment of the holders with replacement notes entitles them to the Applicable Premium, as they will receive such notes before October 15, 2015. They contend that such payment would be an optional or elective redemption under the provisions of the indentures and notes. The Debtors and the second lien holders contend that the maturity date of the notes has been contractually advanced and, thus, under New York law the first and 1.5 lien holders, having provided for acceleration in the applicable agreements, bargained for prepayment of the notes upon the event of the Debtors' bankruptcy and therefore forfeited their right to the Applicable Premium. According to Judge Drain, both for purposes of confirmation of the debtors' chapter 11 plan, as well as for Adversary Proceeding Nos. 14-08227 and 14-08228, the plain language of the first and 1.5 lien indentures and notes as applied to the present facts requires the allowed claim of the indenture trustees for the first and 1.5 lien holders to exclude any amount for Applicable Premium or any other damages based on the early payment of the notes. Rescission of Acceleration of Notes The first and 1.5 lien trustees have sought relief from the automatic stay under section 362(a) of the Bankruptcy Code to implement the rescission of the automatic acceleration of the notes that occurred under Section 6.02 of the indentures upon the Debtors' bankruptcy filing. The purpose of sending a rescission notice would be to enable the holders to recover a sizeable claim against the Debtors -- that is, to resurrect their make-whole claim, which has been loosely quantified as approximating $200 million -- through deceleration of the debt. They thus seek to control property of the estate by exercising a contract right to the estate's detriment and recover, by decelerating, a claim against the Debtors. But Judge Drain held that the automatic stay does, in fact, apply to the sending of a rescission notice and contractual deceleration of the debt, pointing out tha two provisions of the Bankruptcy Code's automatic stay apply. First, section 362(a)(3) states that the automatic stay upon the filing of the case includes a stay of "any act to obtain possession of property of the estate or property from the estate or to exercise control over property of the estate." Section 362(a)(6) then states that the following also are stayed: "any act to collect, assess or recover a claim against the debtor that arose before the commencement of the case under this title." The judge also reitereated that the sending of a rescission, or deceleration notice significantly impacts the debtors' estate and creditors -- in this case by enhancing claims potentially by hundreds of millions of dollars. It is, therefore, the type of action that courts have routinely refused to permit under section 362(d)(1). Plan Confirmation Judge Drain noted that the only issue as to whether the Debtors' chapter 11 plan satisfies section 1129(b)(2)(A)(i) of the Bankruptcy Code is whether the plan provides, as set forth in sub- clause (A)(i)(II), that the holders of the first and 1.5 lien notes will "receive on account of such claim deferred cash payments totaling the allowed amount of such claim, of a value, as of the effective date of the plan, of at least the value of such holder's interest in the estate's interest in such property." (Sub-clause (A)(i)(I) is satisfied because under the plan the first and 1.5 lien holders shall retain the liens securing their claims to the extent of their allowed secured claims. Their liens are not being diminished under the plan, and, as I have previously found, those liens will secure the allowed amount of their claims.) Whether the plan satisfies section 1129(b)(2)(A)(i)(II) of the Code depends on the proper present value interest rate under the replacement notes to be issued to the first and 1.5 lien holders under the plan on account of their allowed claims, given that those notes will satisfy their claims over seven and seven-and-a- half years, respectively. The debtors contend that the interest rates under the replacement notes are sufficient on a present value basis to meet the test of section 1129(b)(2)(A)(i)(II). The interest rate on the new replacement first lien notes that are proposed to be issued under the plan is the seven-year Treasury note rate plus 1.5 percent. As of August 26, 2014, the date of the Court's bench ruling, that would equal an approximately 3.60 percent interest rate, based on public data issued for such Treasury notes. The proposed replacement notes for the 1.5 lien holders would have an interest rate equal to an imputed seven-and- a-half-year Treasury note (based on the weighted averaging of the rates for seven-year and ten-year Treasury notes) plus 2 percent, which as of August 26, 2014 I calculated as approximately 4.09 percent based on public data for such Treasury notes. The indenture trustees for the first and the 1.5 lien holders contend that those rates do not satisfy the present value test in section 1129(b)(2)(A)(i)(II) and argue for higher interest rates under the replacement notes based on their view of what market- based lenders would expect for new notes if the same tenor issued by comparable borrowers. According to Judge Drain, the Court clearly is not writing on a blank slate on this issue. It is largely governed by the principles enunciated by the plurality opinion in Till v. SCS Credit Corp., 541 U.S. 465 (2004), and, to the extent that the Court has any concerns based on Till being a plurality opinion, In re Valenti, 105 F.3d 55 (2d Cir. 1997). According to Judge Drain, the Debtors are correct in setting the interest rates on the first and 1.5 lien replacement notes premised on a base rate that is riskless, or as close to riskless as possible, plus a risk premium in the range of 1 to 3 percent, if at all, depending on the Court's assessment of the debtors' ability to fully perform the replacement notes. However, the judge questions whether the 1 to 3 percent risk premium spread over prime used in Till would be the same if instead, as here, a base rate equal to the Treasury were used. "It seems to me, then, that although the general risk factor analysis conducted by Mr. Derrough [the debtors' investment banker] was appropriate, there should be an additional amount added to the risk premium in light of the fact that the debtors used Treasury rates as the base rate. The additional increment, I believe, should be another .5 percent for the first lien replacement notes, and an additional .75 percent for the 1.5 lien replacement notes," Judge Drain said. "I believe that these adjustments adequately take into account risks inherent in the debtors' performance of the replacement notes above the essentially risk-free Treasury note base rates. Therefore, rather than being the seven-year Treasury plus 1.5 percent, equaling 3.6 as of August 26, 2014, the rate for the first lien replacement notes should be the Treasury rate plus 2 percent, for an overall rate of 4.1 percent as of such date; and the rate for the 1.5 lien replacement notes should be the imputed seven-and-a-half-year Treasury note rate plus 2.75 percent, or a 4.85 rate as of August 26, 2014. This would require an amendment to the plan, obviously, and I don't know whether the necessary parties would agree to it, but I believe that they should, because it is necessary to cram down the plan over the objection of the first and 1.5 lien holder classes." The Debtors are funding the Plan through a $600 million equity investment from second lienholders, a $1 billion first lien backup takeout facility and a bridge facility of $250 million. Third Party Releases The first and 1.5 lien trustees have objected to the inclusion of third-party releases for parties named or identified in state court lawsuits brought by the first and 1.5 lien trustees to enforce the terms of the Intercredtor Agreement on the second lien holders. Those lawsuits have been removed to the bankruptcy Court, although remand motions are pending. During the confirmation hearing, the Debtors and the released parties have agreed to amend the plan to carve out of the release of rights with respect to, and the discharge of, the pending litigation, provided that the Court maintains jurisdiction over that litigation. "I conclude, having evaluated the factors under Metromedia and the case law supporting third-party plan releases -- and, though not fully, having reviewed the litigation claims against the Released Second Lienholders -- that this modified release is appropriate and would be sustained if the plan were otherwise confirmable," Judge Drain said, citing Deutsche Bank AG v. Metromedia Fiber Network, Inc., 416 F.3d 136, 141 (2d Cir. 2005). A copy of Judge Drain's September 9, 2014 Decision is available at http://is.gd/GbVGvYfrom Leagle.com. * * * As reported by the Troubled Company Reporter on Sept. 5, 2014, Tom Corrigan, writing for Daily Bankruptcy Review, said the trustee governing Momentive's lowest-ranking bonds is seeking a bankruptcy-court order allowing it to appeal a recent ruling on a restructuring plan that effectively wipes out its bondholders. According to the report, lawyers for the trustee, U.S. Bank, have challenged a ruling that places its bonds at the bottom of the creditor priority list, claiming that its bonds shouldn't be treated any worse than Momentive's second-lien bonds, which are expected to be swapped for equity. About Momentive Performance Momentive Performance is one of the world's largest producers of silicones and silicone derivatives, and is a global leader in the development and manufacture of products derived from quartz and specialty ceramics. Momentive has a 70-year history, with its origins as the Advanced Materials business of General Electric Company. In 2006, investment funds affiliated with Apollo Global Management, LLC, acquired the company from GE. As of Dec. 31, 2013, the Company had 4,500 employees worldwide, of which 46% of the Company's employees are members of a labor union or are represented by workers' councils that have collective bargaining agreements. Momentive Performance Materials Inc., Momentive Performance Materials Holdings Inc., and their affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 14-22503) on April 14, 2014, with a deal with noteholders on a balance-sheet restructuring. As of Dec. 31, 2013, the Debtors had $4.114 billion of consolidated outstanding indebtedness, including payments due within the next 12 months and short-term borrowings. The Debtors said that the restructuring will eliminate $3 billion in debt. The Debtors have tapped Willkie Farr & Gallagher LLP as bankruptcy counsel with regard to the filing and prosecution of these chapter 11 cases; Sidley Austin LLP as special litigation counsel; Moelis & Company LLC as financial advisor and investment banker; AlixPartners, LLP as restructuring advisor; PricewaterhouseCoopers as auditor; and Crowe Horwath LLP as benefit plan auditor. Kurtzman Carson Consultants LLC is the notice and claims agent. The U.S. Trustee for Region 2 appointed seven members to serve on the Official Committee of Unsecured Creditors of the Debtors' cases. Klee, Tuchin, Bogdanoff & Stern LLP serves as its counsel. FTI Consulting, Inc., serves as its financial advisor. Rust Consulting Omni Bankruptcy serves as its information agent. Wilmington Trust, National Association, the Trustee for the Momentive Performance Materials Inc. 10% Senior Secured Notes due 2020 -- 1.5 Lien Notes -- under the Indenture, dated as of May 25, 2012, by and between Momentive Performance Materials Inc. and The Bank of New York Mellon Trust Company, National Association, is represented by Mark R. Somerstein, Esq., Mark I. Bane, Esq., and Stephen Moeller-Sally, Esq., at Ropes & Gray LLP. U.S. Bank National Association -- as successor Indenture Trustee under the indenture dated as of December 4, 2006, among Momentive Performance Materials Inc., the Guarantors named in the Indenture, and Wells Fargo Bank, N.A. as initial trustee, governing the 11.5% Senior Subordinated Notes due 2016 -- is represented in the case by Susheel Kirpalani, Esq., Benjamin I. Finestone, Esq., David L. Elsberg, Esq., Robert Loigman, Esq., K. John Shaffer, Esq., and Matthew R. Scheck, Esq., at Quinn Emanuel Urquhart & Sullivan, LLP; and Clark Whitmore, Esq., and Ana Chilingarishvili, Esq., at Maslon Edelman Borman & Brand, LLP. BOKF, NA -- as successor First Lien Trustee to The Bank of New York Mellon Trust Company, N.A., as trustee under an indenture dated as of October 25, 2012, for the 8.875% First-Priority Senior Secured Notes due 2020 issued by Momentive Performance Materials Inc. and guaranteed by certain of the debtors -- is represented by Michael J. Sage, Esq., Brian E. Greer, Esq., and Mauricio A. Espana, Esq., at Dechert LLP. Counsel to Apollo Global Management, LLC and certain of its affiliated funds are Ira S. Dizengoff, Esq., Philip C. Dublin, Esq., Abid Qureshi, Esq., Deborah J. Newman, Esq., and Ashleigh L. Blaylock, Esq., at Akin Gump Strauss Hauer & Feld LLP. Attorneys for Ad Hoc Committee of Second Lien Noteholders are Dennis F. Dunne, Esq., Michael Hirschfeld, Esq., and Samuel A. Khalil, Esq., at Milbank, Tweed, Hadley & McCloy LLP. MONROE HOSPITAL: Seeks Oct. 8 Auction Before Prime Sale ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that an auction will be held on Oct. 8 for Monroe Hospital LLC, a 32-bed acute- care surgical hospital in Bloomington, Indiana, to be sold to an affiliate of Prime Healthcare Services Inc. absent a better offer. According to the report, the contract with Prime has no cash component; instead, Prime will assume liabilities on lease and other obligations, including a $121.8 million liability on a facility lease with MPT Bloomington LLC and a loan agreement with an MPT affiliate. The report said the hospital wants a hearing on sale approval not later than Oct. 17. About Monroe Hospital Monroe Hospital, LLC, since 2006, has operated a 32 licensed bed private acute care medical surgical hospital in Bloomington, Indiana. It leases the land on which the hospital is located from MPT Bloomington, LLC. Monroe Hospital, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Ind. Case No. 14-07417) in Indianapolis, Indiana, on Aug. 8, 2014. Joseph Roche signed the petition as president and chief executive officer. The Debtor estimated assets of at least $10 million and $100 million to $500 million in liabilities. The case is assigned to Judge James M. Carr. The Debtor is represented by attorneys at Bingham Greenebaum Doll LLP. Upshot Services LLC acts as the Debtor's noticing, claims and balloting agent. MONTREAL MAINE: Panel Wants to Participate in Wrongful Death Cases ------------------------------------------------------------------ The official committee of victims appointed in chapter 11 case of Montreal Maine & Atlantic Railway Ltd. asks the U.S. Bankruptcy Court to modify the panel's appointment in order to authorize the committee to take any and all actions in the wrongful death proceedings currently pending before the Maine District Court. The Chapter 11 trustee overseeing the Debtor's estate believes that the committee, pursuant to the terms of the appointment order, does not have a standing authority to file motions in the wrongful death proceedings pending in the Maine District Court. The matter stems from the 20 wrongful death lawsuits arising out of the train derailment in Lac-Megantic on July 6, 2013. On September 9, 2013, the trustee filed a motion to transfer the wrongful death proceeding from the Illinois District Court to the Maine District Court. Thus, on March 21, 2014, Judge Torresen entered an order to transfer the wrongful death proceedings to the Maine District Court because they were related to the debtor's bankruptcy case. The Committee said it is deemed to the best interest of the victims that the panel be authorized to participate in the proceeding. After all, the relief sought is procedural in nature. The official committee of victims is represented by: Luc A. Despins, Esq. Christopher J. Fong, Esq. PAUL HASTINGS LLP Park Avenue Tower 75 East 55th Street, First Floor New York, NY 10022 Telephone: (212) 318-6000 Facsimile: (212) 319-4090 - and - Richard P. Olson, Esq. PERKINS OLSON 32 Pleasant Street PO Box 449 Portland, Maine 04112 Telephone: (207) 871-7159 Facsimile: (207) 871-0521 About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., the railway company that operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec, sought bankruptcy protection in U.S. Bankruptcy Court in Bangor, Maine (Case No. 13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., has been named as chapter 11 trustee. His firm serves as his chapter 11 bankruptcy counsel, led by Michael A. Fagone, Esq., and D. Sam Anderson, Esq. Development Specialists, Inc., serves as the Chapter 11 trustee's financial advisor. Gordian Group, LLC, serves as the Chapter 11 Trustee's investment banker. U.S. Bankruptcy Judge Louis H. Kornreich has been assigned to the U.S. case. The Maine law firm of Verrill Dana served as counsel to MM&A. It now serves as counsel to the Chapter 11 Trustee. Justice Martin Castonguay oversees the case in Canada. The Canadian Transportation Agency suspended the carrier's operating certificate after the accident, due to insufficient liability coverage. The town of Lac-Megantic, Quebec, has sought financial aid to restore the gutted community and a civil complaint alleges a failure to take steps to prevent a derailment. In the Canadian case, Andrew Adessky at Richter Consulting has been appointed CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by: Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. There's also an unofficial committee of wrongful death claimants consisting of representatives of the estates of the 46 victims. This group is represented by George W. Kurr, Jr., Esq., at Gross, Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP; Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C. Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups, Esq., at Weller, Green Toups & Terrell LLP. After the U.S. Trustee formed the Official Committee, the ad hoc committee filed papers asking the U.S. Court to have the official committee disbanded. The ad hoc group said it represents 46 victims of the disaster. On Jan. 23, 2014, the Debtors won authorization to sell substantially all of their assets to Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, for $15.7 million. The Bankruptcy Courts in the U.S. and Canada approved the sale. The Fortress unit is represented by Terence M. Hynes, Esq., and Jeffrey C. Steen, Esq., at Sidley Austin LLP. On Jan. 29, 2014, an ad hoc group of wrongful-death claimants submitted a plan, which would give 75% of the $25 million in available insurance to the families of those who died after an unattended train derailed in Lac-Megantic, Quebec, in July. The other 25% would be earmarked for claimants seeking compensation for property that was damaged when much of the town burned. Former U.S. Senator George Mitchell, a Democrat who represented Maine in the U.S. Senate from 1980 to 1995 and who is now chairman emeritus of law firm DLA Piper LLP, would administer the plan and lead the effort to wrap up MM&A's Chapter 11 bankruptcy. As reported by the Troubled Company Reporter on April 3, 2014, Judge Kornreich ruled that the unofficial committee of wrongful death claimants and its counsel have failed to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure, and as a result of that failure, the Unofficial Committee and its counsel will not be heard on any pending matter in the case. As reported by the TCR on April 11, 2014, Judge Kornreich rejected the disclosure statement for the Plan filed by the ad hoc group of wrongful-death claimants, holding that the Plan is flawed and unconfirmable. MORNINGSTAR MARKETPLACE: Wants Exclusivity Extended to Feb. 2015 ---------------------------------------------------------------- Robert L. Knupp, Esq., at Smigel, Anderson & Sacks, LLP, counsel for debtor Morningstar Marketplace, seeks the extension of the Debtor's exclusive period to file a plan of reorganization. The Debtor requests to extend the time for filing a plan to February 2, 2015 or six months from the expiration of the filing period, which was August 2, 2014. Morningstar Marketplace is represented by: Robert L. Knupp, Esq. SMIGEL, ANDERSON & SACKS 4431 North Front Street Harrisburg, PA 17110 Tel: (717) 234-2401) Fax: (717) 234-3611 E-mail: rknupp@sasllp.com About Morningstar Marketplace Morningstar Marketplace, LTD, operator of a flea market business in St. Thomas, Pennsylvania, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Pa. Case No. 14-00451) in Harrisburg on Feb. 3, 2014. Judge Mary D France presides over the case. Attorneys at Smigel, Anderson & Sacks, LLP serve as counsel to the Debtor. The Debtor estimated $100 million to $500 million in assets and liabilities. NEPHROS INC: Lambda Investors Reports 66% Equity Stake ------------------------------------------------------ In an amended Schedule 13D filed with the U.S. Securities and Exchange Commission, Lambda Investors LLC disclosed that as of Aug. 29, 2014, it beneficially owned 26,496,616 shares of common stock of Nephros, Inc., representing 66.6 percent of the shares outstanding. Wexford Capital LP may, by reason of its status as managing member of Lambda, be deemed to own beneficially the shares of Common Stock of which Lambda possess beneficial ownership. Wexford GP may, by reason of its status as general partner of Wexford Capital, be deemed to own beneficially the shares of Common Stock of which Lambda possess beneficial ownership. Each of Messrs. Charles E. Davison and Joseph M. Jacobs may, by reason of his status as a controlling person of Wexford GP, be deemed to own beneficially the shares of Common Stock of which Lambda possess beneficial ownership. A copy of the regulatory filing is available for free at: http://is.gd/rUeEwr About Nephros River Edge, N.J.-based Nephros, Inc., is a commercial stage medical device company that develops and sells high performance liquid purification filters. Its filters, which it calls ultrafilters, are primarily used in dialysis centers and healthcare facilities for the production of ultrapure water and bicarbonate. Nephros, Inc., reported a net loss of $3.69 million in 2013 following a net loss of $3.26 million in 2012. As of June 30, 2014, the Company had $2.35 million in total assets, $2.13 million in total liabilities and $216,000 in total stockholders' equity. Rothstein Kass, in Roseland, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred negative cash flow from operations and net losses since inception. These conditions, among others, raise substantial doubt about its ability to continue as a going concern. PLANDAI BIOTECHNOLOGY: Purchase Pact With Lincoln Park Canceled --------------------------------------------------------------- The Stock Purchase Agreement between Plandai Biotechnology and Lincoln Park Capital Fund, LLC, was terminated on Sept. 3, 2014, according to Plandai Biotechnology's Form 8-K filing with the U.S. Securities and Exchange Commission. The Company previously reported its entry into the Lincoln Park Contract on Feb. 10, 2014. The Company's contract with Lincoln Park provided the Company with the right to request Lincoln Park's periodic limited purchases of its common stock. In light of the Company's recent announcement regarding bioavailability results, its management is presently reviewing other financing options that would have a lesser dilutive effect on shareholders; however, the Company said there are no immediate needs or plans to obtain alternative financing. The Company believes its current cash position is sufficient to finalize the development of its production facility in South Africa, and begin production and marketing of its products, resulting in the Company's expectation of more attractive financing opportunities in the future should the need arise. The Company's contract with Lincoln Park provided in part that Lincoln Park would agree to purchase shares of its common stock, conditioned upon a registration of the subject shares being declared effective by the Securities and Exchange Commission. A total of $300,000 in stock purchases took place under the contract; however, the Company did not file the registration statement as conditioned in the contract. Pursuant to Section 11(b) of the contract, there are no early termination penalties attributable the Agreement. About Plandai Based in Seattle, Washington, Plandai Biotechnology, Inc., through its recent acquisition of Global Energy Solutions, Ltd., and its subsidiaries, focuses on the farming of whole fruits, vegetables and live plant material and the production of proprietary functional foods and botanical extracts for the health and wellness industry. Its principle holdings consist of land, farms and infrastructure in South Africa. Plandai incurred a net loss of $2.96 million on $359,143 of revenues for the year ended June 30, 2013, as compared with a net loss of $3.83 million on $74,452 of revenues during the prior fiscal year. The Company's balance sheet at March 31, 2014, showed $9.77 million in total assets, $13.20 million in total liabilities and a $2.14 million total stockholders' deficit. As reported by the TCR on Feb. 4, 2014, Terry L. Johnson, CPA, replaced Patrick Rodgers, CPA, P.A., as the Company's independent accountant. Patrick Rodgers, CPA, PA, in Altamonte Springs, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company has incurred losses since inception, has a negative working capital balance at June 30, 2013, and has a retained deficit, which raises substantial doubt about its ability to continue as a going concern. NILE SWIM: Historic Black-Owned Swim Club Seeks Bankruptcy ---------------------------------------------------------- Katy Stech, writing for The Wall Street Journal, reported that Nile Swim Club of Yeadon, a Philadelphia-area swimming pool that opened in the late 1950s for black members who were denied access to a nearby whites-only pool, has filed for bankruptcy. According to the report, officials who put the Nile Swim Club into Chapter 11 protection didn?t explain the club?s survival plan in the seven-page bankruptcy petition. NYDJ APPAREL: Moody's Lowers Corp. Family Rating to 'B3' -------------------------------------------------------- Moody's Investors Service downgraded NYDJ Apparel, LLC's Corporate Family Rating and Probability of Default Rating to B3 and B3-PD, respectively, from B2 and B2-PD. Moody's also lowered the company's first lien secured term loan and secured revolver ratings to B2 from B1. The rating outlook is stable. The downgrade reflects Moody's expectation that leverage is likely to be in the low-5 to low-6 times range (Moody's-adjusted) in the near term as a result of pressure on the denim category from the growing popularity of active wear. Reflecting this trend as well as severe winter weather and mall traffic weakness, the company meaningfully underperformed Moody's expectations since the LBO, with EBITDA declining by about 25% in 1H 2014 over the prior year. Moody's anticipates continued near-term declines in the core denim category to be only partly offset by NYDJ's efforts to expand its product line and increase wholesale penetration. As a result, liquidity will also weaken, including a tighter covenant cushion and still positive but lower free cash flow generation. Rating actions: Issuer: NYDJ Apparel, LLC Corporate Family Rating, downgraded to B3 from B2 Probability of Default Rating, downgraded to B3-PD from B2-PD $12.5 million secured revolver due 2019, downgraded to B2 (LGD3) from B1 (LGD3) $150 million first lien secured term loan due 2020, downgraded to B2 (LGD3) from B1 (LGD3) Ratings Rationale The B3 Corporate Family Rating considers the company's elevated leverage, limited scale and narrow focus in the highly competitive women's jean category. The fashion risk associated with NYDJ's product concentration, which is currently facing headwinds from the 'athleisure' trend, was evident in the company's recent results. EBITDA declined meaningfully since the January 2014 buyout, resulting in LTM leverage in the low-5 times (as of June 30, 2014), as compared to Moody's expectations of mid-4 times. While the company continues to expand its product range by adding non-denim bottoms and tops, as well as to grow distribution, Moody's projects earnings to decline moderately in the next 12 to 18 months. As a result, Moody's expects NYDJ to have adequate near term liquidity, with tighter covenant cushion and lower free cash flow generation than expected at the time of the LBO. The rating also reflects the limited track record of the company's brand (which was established in 2003), as well as its significant customer concentration, with 3 major department stores accounting for 50% sales. These risks are partly mitigated by NYDJ's history of consistent growth until the past several quarters, and strong EBITA margin and management team. The stable outlook reflects Moody's expectations for a moderate near-term earnings decline and adequate liquidity. The ratings could be downgraded if liquidity deteriorates more than anticipated or the company experiences significant earnings declines such that Moody's-adjusted leverage approaches 7 times. The ratings could be upgraded if NYDJ resumes growth on a sustained basis and achieves and maintains leverage below 4.75 times and good liquidity. NYDJ Apparel, LLC ("NYDJ") designs and markets apparel for women under the "NYDJ" brand. The company's products, which include predominantly denim bottoms, are sold through department stores, specialty boutiques, off-price retailers, outlets and on its ecommerce website. As of June 30, 2014, the company had LTM net sales of approximately $178 million. NYDJ has been majority-owned by Crestview Partners and Maybrook Capital Partners since the January 2014 LBO. The principal methodology used in this rating was Global Apparel Companies published in May 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ODYSSEY PICTURES: Late 10-K Shows $480K Net Loss in Fiscal 2013 --------------------------------------------------------------- Odyssey Pictures Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K reporting a net loss of $480,740 on $512,314 of net sales of services for the year ended June 30, 2013, compared to net income to the Company of $34,775 on $1.27 million of net sles of services for the year ended June 30, 2012. As of June 30, 2013, the Company had $1.54 million in total assets, $4.15 million in total liabilities and a $2.61 million total stockholders' deficit. Terry L. Johnson CPA, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company has a $3.8 million working capital deficiency. The Company may not have adequate readily available resources to fund operations through June 30, 2014. This raises substantial doubt about the Company's ability to continue as a going concern. As reported by the TCR on Oct. 4, 2013, Odyssey Pictures had delayed the filing of the Form 10-K because the Company had not been able to compile all of the requisite formatted financial data and narrative information necessary for it to have sufficient time to complete its annual report on Form 10-K for the year ended June 30, 2013, without unreasonable effort or expense. A copy of the Form 10-K is available for free at: http://is.gd/fkH5Ed About Odyssey Plano, Tex.-based Odyssey Pictures Corp., during the nine months ended March 31, 2012, realized revenues from the sale of branding and image design products and media placement services. The Company's ongoing operations have consisted of the sale of these branding and image design products, increasing media inventory, productions in progress and development of IPTV Technology and related services. OKLAHOMA UNITED METHODIST: Hires Holden & Carr as Special Counsel ----------------------------------------------------------------- Central Oklahoma United Methodist Retirement Facility, Inc. dba Epworth Villa seeks permission from the U.S. Bankruptcy Court for the Western District of Oklahoma to employ Steven E. Holden, Jane Cowdery and Holden & Carr as special counsel, nunc pro tunc to July 18, 2014. Epworth Villa desires to employ Holden, Cowdery, and Holden & Carr in this Chapter 11 bankruptcy case as its special counsel to continue their representation of Epworth Villa in the State Court Case in all matters for which the automatic stay has been or will be modified. Some or all of the fees and expenses of Holden, Cowdery, and Holden & Carr are covered and will be paid by an insurance policy issued in favor of Epworth Villa by OneBeacon Insurance. To the extent, if any, that estate funds will be necessary to pay the fees and expenses of Holden, Cowdery, and Holden & Carr in connection with their representation in this case, approval by the Court will be requested. Stephen E. Holden, partner of Holden & Carr, 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. Holden & Carr can be reached at: Steven E. Holden, Esq. HOLDEN & CARR First Place 15 East 5th Street, Suite 3900 Tulsa, OK 74103 Tel: (214) 745-8888 Fax: (918) 295-8889 E-mail: hm@HoldenLitigation.com About Central Oklahoma United Methodist Central Oklahoma United Methodist Retirement Facility, Inc., dba Epworth Villa, sought protection under Chapter 11 of the Bankruptcy Code on July 18, 2014 (Case No. 14-12995, Bankr. W.D. Okla.). The case is before Judge Sarah A. Hall. The Debtor's counsel is Brandon Craig Bickle, Esq., Sidney K. Swinson, Esq., and Mark D.G. Sanders, Esq., at Gable & Gotwals, P.C., in Tulsa, Oklahoma; and G. Blaine Schwabe, III, Esq., at Gable & Gotwals, P.C., in Oklahoma City, Oklahoma. OKLAHOMA UNITED METHODIST: Taps Walding Patton as Special Counsel ----------------------------------------------------------------- Central Oklahoma United Methodist Retirement Facility, Inc. dba Epworth Villa seeks permission from the U.S. Bankruptcy Court for the Western District of Oklahoma to employ Andrew L. Walding of Walding & Patton PLLC as special counsel, nunc pro tunc to July 18, 2014. Among the assets of the bankruptcy estate is a potential legal malpractice claim arising out of the representation of Epworth Villa in the State Court Case (the "Claim"). Epworth Villa desires to employ Mr. Walding of Walding & Patton in this Chapter 11 bankruptcy case as its special counsel to investigate the Claim and represent Epworth Villa in connection with any litigation or other proceeding later determined to be appropriate, if authorized by Epworth Villa. Under the proposed arrangement for compensation, Mr. Walding will charge a reasonable hourly rate of $300 and will seek reimbursement of his actual out-of pocket expenses, subject to Court approval. Mr. Walding 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. Walding can be reached at: Andrew L. Walding, Esq. WALDING & PATTON PLLC 400 N. Walker Ave., Suite 195 Oklahoma City, OK 73102-1889 Tel: (405) 232-0621 About Central Oklahoma United Methodist Central Oklahoma United Methodist Retirement Facility, Inc., dba Epworth Villa, sought protection under Chapter 11 of the Bankruptcy Code on July 18, 2014 (Case No. 14-12995, Bankr. W.D. Okla.). The case is before Judge Sarah A. Hall. The Debtor's counsel is Brandon Craig Bickle, Esq., Sidney K. Swinson, Esq., and Mark D.G. Sanders, Esq., at Gable & Gotwals, P.C., in Tulsa, Oklahoma; and G. Blaine Schwabe, III, Esq., at Gable & Gotwals, P.C., in Oklahoma City, Oklahoma. PGX HOLDINGS: S&P Assigns 'B' CCR & Rates $280MM Loan 'B+' ---------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'B' corporate credit rating to Salt Lake City, Utah-based PGX Holdings Inc. The outlook is stable. Additionally, S&P assigned a 'B+' issue-level rating with a recovery rating of '2' to the company's proposed $280 million senior secured first-lien term loan B due 2020. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery of principal in the event of a default. S&P also assigned a 'CCC+' issue-level rating with a '6' recovery rating to the proposed $160 million senior secured second-lien term loan due 2021. The '6' recovery rating indicates S&P's expectation for negligible (0% to 10%) recovery of principal in the event of a default. "Our assessment of PGX's business risk profile reflects its modest revenue base, narrow and fragmented end market with high customer turnover, and limited revenue diversity," said Standard & Poor's credit analyst Martha Toll-Reed. The company's track record of revenue growth and consistent operating profitability partially offset these factors. S&P also views PGX's operations in countries with very low risk as a partial mitigating factor, given highly competitive and fragmented industry conditions. The stable outlook reflects S&P's expectation that PGX will continue to achieve revenue growth by expanding its market penetration and adding new customers, while maintaining consistent EBITDA margins. S&P views an upgrade as unlikely, due to PGX's highly leveraged financial profile, and S&P's expectation that the company's financial sponsor ownership will preclude sustained deleveraging. While not expected, S&P could lower the rating if a sustained decline in new customer growth causes revenues and EBITDA to deteriorate materially, such that leverage exceeds the mid-8x level. S&P could also lower the rating if earnings weakness or aggressive financial policies cause negative free operating cash flow or less than adequate liquidity. PGX HOLDINGS: Moody's Assigns B2 CFR & Rates $160MM Loan Caa1 ------------------------------------------------------------- Moody's Investors Service assigned to PGX Holdings, Inc. ("Progrexion") a B2 Corporate Family Rating (CFR), a B2-PD probability of default rating, and Ba3 and Caa1 ratings to the proposed first and second-lien credit facilities, respectively. Progrexion will use the proceeds from the new credit facilities and a portion of its cash to refinance existing debt. The outlook for ratings is stable. Ratings Rationale The B2 CFR reflects Progrexion's leading position in the niche credit report repair services industry through its well-recognized brands, Lexington Law and CreditRepair.com. The rating is supported by the company's strong growth prospects given the large untapped market for credit repair services, and Moody's expectation that Progrexion should maintain total debt to EBITDA (Moody's adjusted) below 5x. Moody's expects the company to maintain stable EBITDA margins in the mid-30% range (Moody's adjusted) and generate free cash flow exceeding 8% of total debt over the next 12 months. The rating is constrained by the company's small operating scale and its history of debt-financed distributions to shareholders under its current sponsors. Progrexion benefits from direct relationships with the principal consumer credit reporting agencies and ongoing support of the agencies is important for the company. In addition, Progrexion's business risk is high because of its reliance on an independent law firm, John C Health PLLC ("Heath"). Progrexion has operated with Heath since 2004 and it has multi-year contracts to ensure continuity. Moody's believes that continued access to Heath's network of lawyers and paralegals is critical to Lexington Law's customer acquisition strategy and to ensure compliance with applicable statutes in the various states where the law firm operates. The potential for changes in legal and regulatory environment that could affect Progrexion's business model also constrains the ratings. Moody's views the company's liquidity as adequate, consisting of its modest cash balances and projected free cash flow. The stable ratings outlook is based on Moody's expectation that Progrexion will maintain strong revenue growth and stable EBITDA margins in the mid-30% range. Moody's assigned the following ratings: Issuer: PGX Holdings, Inc. Corporate Family Rating -- B2 Probability of Default Rating -- B2-PD $280 million first lien term loan B facility due 2020 -- Ba3, LGD2 $160 million second lien term loan facility due 2021 -- Caa1, LGD5 Outlook, Stable Moody's could downgrade Progrexion's ratings if revenue growth rates decline sharply, EBITDA margins deteriorate or financial policy becomes more aggressive such that total debt to EBITDA (Moody's adjusted) is sustained above 5.5x or free cash weakens to the low single digit percentages of total debt for an extended period of time. Additionally, a deterioration in liquidity could pressure the ratings. Given Progrexion's small operating scale and its shareholder- friendly financial policies, a ratings upgrade is not expected in the near term. However, ratings could be raised over time if Progrexion's revenues, earnings and operating cash flow materially increase, the company diversifies its service offerings and Moody's believes that the company will pursue less aggressive financial policies. The ratings could be raised if Moody's expects Progrexion to sustain total debt to EBITDA of 4x and free cash flow in excess of 10% of total debt, while maintaining strong revenue growth rates. Headquartered in Salt Lake City, UT, PGX Holdings, Inc. is a leading provider of credit report repair services in the U.S. The company is majority owned by funds affiliated to private equity firm H.I.G. Capital. Moody's expects Progrexion's revenues to exceed $240 million in 2014. The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PHILADELPHIA ENTERTAINMENT: Pa. Wants Out of $50MM Adversary Suit ----------------------------------------------------------------- Law360 reported that Pennsylvania told a bankruptcy court that Philadelphia Entertainment & Development Partners LP, the bankrupt developer of a planned Foxwoods casino project that fell through in 2010, is now improperly trying to revive a $50 million gaming license dispute with the state and sought dismissal of the debtor's adversary proceeding. According to the report, Philadelphia Entertainment lost a gaming license in 2010, after the Pennsylvania Gaming Control Board found that it stalled construction on the planned Foxwoods casino and failed to maintain "financial suitability." About Philadelphia Entertainment Philadelphia Entertainment and Development Partners, L.P., filed a Chapter 11 bankruptcy petition (Bankr. E.D. Pa. Case No. 14-12482) on March 31, 2014. Brian R. Ford signed the petition as authorized signatory. The Debtor estimated assets of at least $10 million and liabilities of at least $50 million. DLA Piper LLP (US) serves as the Debtor's counsel. Judge Magdeline D. Coleman oversees the case. Philadelphia Entertainment and Development Partners, L.P., notified the Bankruptcy Court that the Effective Date of its First Modified Chapter 11 Plan of Liquidation occurred on Aug. 18, 2014. The bankruptcy judge, on July 28, confirmed the Plan dated as of March 10, 2014; as modified on May 27. PLASTIC2OIL INC: Incurs $1.02-Mil. Net Loss in Second Quarter ------------------------------------------------------------- Plastic2Oil, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $1.02 million on $6,355 of total sales for the three months ended June 30, 2014, compared with a net loss of $3.06 million on $101,905 of total sales for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $8.47 million in total assets, $6.31 million in total liabilities, and stockholders' equity of $2.16 million. The Company has experienced negative cash flows from operations since inception, and has a working capital deficiency of $2.72 million and an accumulated deficit of $63.89 million as of June 30, 2014. Management's assessment of potential liquidity problems, working capital issues and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern and to operate in the normal course of business. To date, the Company has funded its activities primarily from equity financings and, to a much lesser extent, debt financing and cash from operations, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/Pgt6nY Plastic2Oil, Inc., formerly JBI Inc., is a North American fuel company that transforms unsorted, unwashed waste plastic into ultra-clean, ultra-low sulphur fuel without the need for refinement. The Company's Plastic2Oil (P2O) is a process designed to provide immediate economic benefit for industry, communities and government organizations with waste plastic recycling challenges. It is also focused on the creation of green employment opportunities and a reduction in the cost of plastic recycling programs for municipalities and business. The Company's fuel products include No. 6 Fuel, No. 2 Fuel (diesel, petroleum distillate), Naphtha, Petcoke (carbon black) and Off-Gases. No. 6 Fuel is heavy fuel used in industrial boilers and ships. No. 2 Fuel is a mid-range fuel known as furnace oil or diesel. Naphtha is a light fuel that is used as a cut feedstock for ethanol or as white gasoline in high and regular grade road certified fuels. PLATFORM SPECIALTY: Moody's Maintains B1 Rating for Add-on Debt --------------------------------------------------------------- Moody's Investors Service maintains Platform Specialty Products Corporation's (Platform, B1 stable) rating following the announced incremental $300 million senior secured term loan, co-issued by MacDermid Inc. The add-on term loan will have no impact on the B1 term loan rating; this incremental debt brings the total term loan to approximately $1.45 billion. Proceeds of the proposed add-on term-loan together with cash on hand and stock will be used to acquire Belgium-based Agriphar Group. Platform's ?300 million ($405 million) acquisition of Agriphar is expected to close in the fourth quarter of 2014. Platform's other ratings are unchanged. Ratings Rationale Platform's rating reflects the company's moderate size and expectations of acquisition-driven growth, as a result of the company's stated tactic of being an acquirer and consolidator of specialty chemicals businesses globally. The rating reflects the diverse revenue stream, strong margins and cash flow generating capabilities of the combined businesses, which benefit from geographic, operational, and product diversity through its global footprint, with significant operations in the US, Europe, and Asia. Further supporting the rating are Platform's ability to generate positive free cash flow throughout the business cycle and track record of improving EBITDA margins to levels reflective of specialty chemicals (above 15%), both of which support good liquidity. The company enjoys strong market positions in certain niche markets, modest capital expenditure requirements, and has limited exposure to volatile raw materials costs, since the majority of Platform's raw materials are not petrochemical-based therefore the company does not experience the same cost pressures as other chemical firms. The rating also reflects Platform's exposure to cyclical end-markets such as automotive, commercial packaging and consumer electronics (printed circuit boards) through its Performance Materials and Graphic Solutions segments. While this exposure will decline with the addition of the Chemtura's AgroSolutions business and the Agriphar business, the Performance Materials and Graphic Solutions segments will continue to contribute approximately 40% of revenue. Pro forma for both the Agriphar and Chemtura AgroSolutions acquisitions and the supporting financing, Moody's expect Platform's Debt/EBITDA to increase to 4.5x, but remain below 5.0x, which is Moody's stated trigger for a downgrade. As long as management maintains discipline regarding its target net leverage ratio of 4.5x and the transaction is financed in a manner consistent with stated goals there will be no ratings impact. (All ratios include Moody's Standard Adjustments.) The Agriphar acquisition will complement Platform's $1 billion acquisition of Chemtura's AgroSolutions crop protection business that is also expected to close in the fourth quarter of 2014. Both AgroSolutions and Agriphar manufacture and distribute herbicide, fungicide, and insecticide products for various crops and together will comprise a new business vertical for Platform. Pro forma for the acquisitions, Platform's sales are roughly $1.4 billion for the twelve months ended June 30, 2014 (LTM revenues of $749 million from Platform's existing business and $467 million from AgroSolutions as of June 30, 2014 as well as $171 million YE 2013 revenues from Agriphar). There is limited upside to the rating at this time. The ratings could be upgraded if leverage falls below 4.0x on a sustained basis and the company demonstrates its ability to grow its sales and generate significant free cash flow. Platform's ratings could be downgraded if its operating and credit metrics deteriorate. Specifically, if leverage increase above 5.0x and free cash flow/Debt declines below 4% Moody's could contemplate a rating downgrade. The rating would be pressured if management undertakes a sizable debt-financed acquisition, if the company accelerates the pace of acquisitions such that debt rises faster than EBITDA, if there is no debt reduction between acquisitions, or if management deviates from the stated leverage target. Headquartered in Miami, Florida, Platform Specialty Products Corp (Platform) is a publicly-traded company founded by investors Martin Franklin and Nicolas Berggruen in 2013. Platform's first acquisition in 2013 was MacDermid Holdings, LLC, a global manufacturer of variety of chemicals and technical services for a range of applications and markets including; metal and plastic finishing, electronics, graphic arts, and offshore drilling. Platform is in the process of acquiring Chemtura Corporation's AgroSolutions business and Belgium-based Agriphar Group agricultural chemical business, in levered transactions valued at roughly $1 billion and $405 million, respectively. POSITRON CORP: Joseph Oliverio Appointed as New Chairman -------------------------------------------------------- Patrick G. Rooney tendered his resignation as Positron Corporation's chairman and chief executive officer, effective Sept. 5, 2014. Mr. Rooney will continue to pursue current and future strategic collaborations and expansion opportunities on behalf of the Company. Joseph G. Oliverio, a member of the Board of Directors and president of the Company, was elected to serve as Chairman of the Board of Directors as Mr. Rooney's replacement effective Sept. 8, 2014. About Positron Corporation Headquartered in Fishers, Indiana, Positron Corporation is a molecular imaging company focused on nuclear cardiology. Positron reported a net loss of $7.10 million on $1.63 million of sales for the year ended Dec. 31, 2013, as compared with a net loss of $7.95 million on $2.80 million of sales during the prior year. Sassetti LLC, in Oak Park, Illinois, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has a significant accumulated deficit which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Company had cash and cash equivalents of approximately $1,744,000 at December 31, 2013. The Company utilized $2,520,000 proceeds from issuance of convertible debt and securities, and $2,285,000 proceeds from non-interest bearing advances to fund operating activities during the year ended December 31, 2013. The Company had accounts payable and accrued liabilities of approximately $1,401,000 and a negative working capital of approximately $12,084,000. The Company believes that it may continue to experience operating losses and accumulate deficits in the foreseeable future. "If we are unable to obtain financing to meet our cash needs we may have to severely limit or cease our business activities or may seek protection from our creditors under the bankruptcy laws," the Company said in the 2013 Annual Report. PRINCE FREDERICK: Contractor's Equitable Subord. Case Junked ------------------------------------------------------------ Old Line Bank and Prince Frederick Investment, LLC, sought and obtained dismissal of the second amended complaint filed by Atlantic Builders Group, Inc., arguing that the complaint, among other things, fails to state a claim for equitable subordination. Prince Frederick Investment was formed for the purpose of constructing and operating the West Lake Medical Center. On August 8, 2008, ABG entered into a contract with the Debtor to construct the Center for $2,082,000, subject to additions and deductions as provided by the Contract. ABG began construction of the Center in September 2008. 2The Bank, through its predecessor in interest Maryland Bank and Trust Company, N.A., in October 2008 made an initial $2,976,000 construction loan to Westlake Investors, LLC for the construction of the Center. That amount was increased to $3,326,000 on January 14, 2010. The loan was secured by a first priority lien in the Center and was guaranteed by the Debtor. At the time construction began on the Center in the fall of 2008, the Bank and ABG entered into a Contractor's Agreement to Complete. It provided that ABG could not terminate the Contract until the Bank had an opportunity to remedy the default, provided that the Bank advanced funds for ABG's completion of the work. ABG submitted monthly payment applications to the Debtor as construction progressed. These payment applications were reviewed by agents for both the Debtor and the Bank. The Debtor, with the Bank's approval, increased the total amount due to ABG to $2,382,614 of which ABG was paid $2,172,950. The project had numerous problems that delayed completion and added to the cost of construction. The problems included: (1) the inability to obtain an electrical permit because of deficiencies in the architect's documents and design; and (2) serious design errors in the Center's three roofs. These problems delayed construction by more than six months and resulted in delay claims of $318,656. The Bank and ABG routinely communicated about the timing of approval of payments and distribution of payments. The Bank approved ABG's change orders and authorized disbursement of funds to pay ABG and other expenses in connection with the Center's construction, but ABG did not indicate that there were insufficient funds to pay them. On at least two occasions, the Bank approved ABG's payments without obtaining approval from the Debtor. The Debtor obtained a Certificate of Occupancy and moved into the Center on March 31, 2010. Prior to the Bank's initial loan in October 2008, the Bank had actual knowledge that the Debtor would be undercapitalized and could not fund the construction of the Center. In January 2010, before the Bank increased the initial loan by approximately $350,000, the Bank knew the increase would remain insufficient to fund the projected additional cost to construct the Center. The Bank purposefully withheld from ABG the fact that the increased loan would not cover ABG's construction costs and change orders to induce the Debtor to finish construction. The Debtor filed a voluntary chapter 11 petition on June 8, 2012, and scheduled the Bank's total claim as $3,194,640 secured by a lien on the Center, which was valued at $3,151,526. ABG seeks a determination that the Bank's claim and liens should be equitably subordinated pursuant to 11 U.S.C. Sec. 510(c). Among others, ABG cited that the Bank controlled the Debtor's financial affairs. ABG also pointed out that on two occasions, the Bank approved two payments without first obtaining approval from the Debtor or the Debtor's architect. Bankruptcy Judge Thomas J. Catliota, however, ruled that ABG's allegations of control -- to the extent they even evidence control -- are much less than the severity of control required from prevailing case law. The Court said the the Bank's right to review change orders coupled with ABG's failure to give the required notice under the Contractor Agreement makes its claim that the Bank engaged in egregious conduct by remaining silent implausible. The Court also held that in approving the payments, the Bank did what both the Debtor and ABG wanted it to do. The case is, Atlantic Builders Group, Inc. Plaintiff, v. Old Line Bank, et al. Defendants, 13-00461 (Bankr. D. Md.). A copy of the Court's September 9, 2014 Amended Memorandum of Decision is available at http://is.gd/hZHlzYfrom Leagle.com. Prince Frederick Investments, LLC, fka Westlake Investors, LLC, based in Huntingtown, Md., filed a voluntary chapter 11 petition (Bankr. D. Md. Case No. 12-20900) on June 8, 2012. Judge Thomas J. Catliota presides over the case. James Greenan, Esq., at McNamee Hosea, serves as the Debtor's counsel. It scheduled assets of $3,408,004 and liabilities of $4,003,287. The petition was signed by Richard Cirillo, managing member. A list of the Company's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mdb12-20900.pdf PROBE MANUFACTURING: Posts $58.8K Net Loss in 1H of 2014 -------------------------------------------------------- Probe Manufacturing, Inc., filed its quarterly report on Form 10- Q, saying that while it had a working capital surplus of $106,944, it still had net loss of $58,808 for the six months ended June 30, 2014 and an accumulated deficit of $1.35 million as of June 30, 2014. Therefore, the ability of the Company to operate as a going concern is still dependent upon its ability to: (1) obtain sufficient debt and/or equity capital; and/or (2) generate positive cash flow from operations. The Company reported net profit of $16,314 on $1.03 million of sales for the three months ended June 30, 2014, compared with a net loss of $85,076 on $1.02 million of sales for the same period last year. The Company's balance sheet at June 30, 2014, showed $1.99 million in total assets, $1.23 million in total liabilities, and stockholders' equity of $770,084. A copy of the Form 10-Q is available at: http://is.gd/jzUGLy About Probe Manufacturing Irvine Calif.-based Probe Manufacturing, Inc., provides global design and manufacturing services to original electronic equipment manufacturers (OEM) from its 23,000 sq-ft facility in Irvine, California and Trident Manufacturing's 16,000 sq-ft facility in Salt Lake City, Utah, which it acquired in the first quarter of 2013. Revenue is generated from sales of services primarily to customers in the medical device, aerospace/military, telecommunication, alternative fuel, industrial and instrumentation product manufacturers. QUANTUM CORP: Stockholders Elected 9 Directors ---------------------------------------------- Quantum Corporation held its annual meeting of stockholders on Sept. 9, 2014, at which the stockholders: 1. elected nine nominees recommended by the Company's Board of Directors to the Board to serve until the next Annual Meeting or until their successors are elected and duly qualified, namely: Paul R. Auvil III, Philip Black, Louis DiNardo, Dale L. Fuller, Jon W. Gacek, David A. Krall, Gregg J. Powers, David E. Roberson and Jeffrey C. Smith; 2. ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending March 31, 2015; 3. voted for the adoption of a resolution approving, on an advisory basis, the compensation of the Company's named executive officers; 4. approved and ratified an amendment to the Company's 2012 Long-Term Incentive Plan to increase the number of shares of Common Stock available for issuance under the Plan by 4,800,000 shares; and 5. approved and ratified an amendment to the Company's Employee Stock Purchase Plan to increase the number of shares of Common Stock available for issuance under the ESPP by 6,500,000 shares. About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. Quantum Corporation incurred a net loss of $21.47 million on $553.16 million of total revenue for the year ended March 31, 2014, as compared with a net loss of $52.17 million on $587.43 million of total revenue for the year ended March 31, 2013. As of June 30, 2014, the Company had $351.21 million in total assets, $439.81 million in total liabilities and a $88.59 million total stockholders' deficit. RADIOSHACK CORP: In Talks to Get Finances, Warns of Bankruptcy -------------------------------------------------------------- Drew Fitzgerald and Michael Calia, writing for The Wall Street Journal, reported that Radioshack Corp. said it is in talks to shore up its finances and hopes to announce a deal in the near term, but warned that it could quickly run of out cash and be forced to turn to bankruptcy court and liquidate if the talks fail. According to the report, Radioshack's shares were down 5.5% to 88 cents in premarket trading on the announcement made on Sept. 11. About Radioshack Corporation RadioShack (NYSE: RSH) -- http://www.radioshackcorporation.com-- is a national retailer of innovative mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. Radioshack reported a net loss of $400.2 million in 2013, a net loss of $139.4 million in 2012, and net income of $72.2 million in 2011. As of May 3, 2014, Radioshack had $1.32 billion in total assets, $1.25 billion in total liabilities and $72.6 million in total stockholders' equity. * * * As reported by the TCR on June 18, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating on the Fort Worth, Texas-based RadioShack Corp. to 'CCC' from 'CCC+'. "The downgrade reflects the company's very weak operating trends, which have led to significant liquidity usage. Even if performance trends moderate, we expect the company to be using cash over the near term," said credit analyst Charles Pinson-Rose. In the Dec. 30, 2013, edition of the TCR, Fitch Ratings has affirmed its 'CCC' Long-term Issuer Default Rating (IDR) on RadioShack Corporation. The IDR reflects the significant decline in RadioShack's profitability and cash flow, which has become progressively more pronounced over the past two years. The TCR reported on March 13, 2014, that Moody's Investors Service downgraded RadioShack Corporation's corporate family rating to Caa2 from Caa1. "The continuing negative trend in RadioShack's sales and margins has resulted in a precipitous drop in profitability causing continued deterioration in credit metrics and liquidity," Mickey Chadha, Senior Analyst at Moody's said. Troubled Company Reporter, citing The Wall Street Journal, reported on March 5, 2014, that RadioShack plans to cut back its store count, after a sharp drop in sales over the holidays left it with a $400 million loss in 2013. The electronics retailer said it could close as many as 1,100 U.S. stores -- one out of every four that it operates itself -- underscoring the difficulty it has had adapting to a fast changing consumer landscape. RESIDENTIAL CAPITAL: Ally Incurs Cost Over Injunction Violation --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that Ally Financial Inc. incurred unnecessary cost as the result of creditors' violation of an injunction in Residential Capital LLC's court- approved Chapter 11 plan but could not recover those costs because the former ResCap parent did provide attorneys' time sheets to justify reimbursement of legal costs. The Bloomberg report related that in November, 69 plaintiffs sued in a California state court alleging that Ally commitment fraudulent concealment, intentional misrepresentation and negligent misrepresentation in making home mortgages. U.S. Bankruptcy Judge Martin Glenn in Manhattan wrote a June opinion telling the creditors to dismiss the California suit because it was filed in violation of ResCap's plan, the report related. In another opinion in August, Judge Glenn declined to impose a $13,200 sanction on the creditors, in part because they withdrew the lawsuit as he commanded. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities at March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Judge Martin Glenn in December 2013 confirmed the Joint Chapter 11 Plan co-proposed by Residential Capital and the Official Committee of Unsecured Creditors. About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The Company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3 percent stake. Private equity firm Cerberus Capital Management LP keeps 14.9 percent, while General Motors Co. owns 6.7 percent. As of March 31, 2014, the Company had $148.45 billion in total assets, $133.99 billion in total liabilities and $14.45 billion in total equity. * * * As reported by the TCR on Dec. 16, 2013, Standard & Poor's Ratings Services said it raised its issuer credit rating on Ally Financial Inc. to 'BB' from 'B+'. "The upgrade reflects the company's release from potential legal and financial liabilities stemming from its ownership of ResCap," said Standard & Poor's credit analyst Tom Connell. In the April 3, 2014, edition of the TCR, Fitch Ratings has upgraded Ally Financial Inc.'s long-term Issuer Default Rating (IDR) and senior unsecured debt rating to 'BB+' from 'BB'. The rating upgrade reflects increased clarity around Ally's ownership structure given Ally's recent announcement that it has launched an initial public offering those shares of its common stock held by the U.S. Treasury (the Treasury). As reported by the TCR on July 16, 2014, Moody's Investors Service affirmed the Ba3 corporate family and B1 senior unsecured ratings of Ally Financial, Inc. and revised the outlook for the ratings to positive from stable. Moody's affirmed Ally's ratings and revised its rating outlook to positive based on the company's progress toward sustained improvements in profitability and repayment of government assistance received during the financial crisis. RESTORGENEX CORP: Files Copy of Presentation Materials with SEC --------------------------------------------------------------- On or about Sept. 9, 2014, representatives of RestorGenex Corporation began making presentations at investor conferences and in other forums, the Company disclosed in a regulatory filing with the u.S. Securities and Exchange Commission. The presentation focused on: * summary of recent offering * board of directors * management * potential out-licensing opportunities * summary of product portfolio * investment highlights RestorGenex expects to disclose the information contained in presentation, in whole or in part, and possibly with modifications, in connection with presentations to investors, analysts and others during the remainder of 2014 and into 2015. A copy of the presentation slides is available for free at: http://is.gd/DyyE2C About RestorGenex RestorGenex Corporation operates as a biopharmaceutical company. It focuses on dermatology, ocular disease, and women's health areas. The company was formerly known as Stratus Media Group, Inc., and changed its name to RestorGenex Corporation in March 2014. RestorGenex Corporation is based in Los Angeles, California. Restorgenex reported a net loss of $2.45 million in 2013 following a net loss of $6.85 million in 2012. The Company's balance sheet at March 31, 2014, showed $26.45 million in total assets, $14.23 million in total liabilities, and stockholders' equity of $12.21 million. Goldman Kurland and Mohidin LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that RestorGenex Corporation has suffered recurring losses and has negative cash flow from operations. These conditions raise substantial doubt as to the ability of RestorGenex Corporation to continue as a going concern. REVEL AC: Settles Ernst & Young Prepetition Fee Complication ------------------------------------------------------------ Law360 reported that Ernst & Young LLP has agreed to return $100,000 in fees it received from the Revel Casino Hotel prior to its second bankruptcy filing in order to resolve prepetition claim concerns. According to the report, Revel had filed an application in July seeking authorization to employ Ernst & Young as its auditor and tax adviser, but the casino did not yet retain the firm because the parties have been involved in discussions with the U.S. Trustee and the creditors' committee regarding concerns over $491,726 that Ernst & Young received in the 90 days leading up to Revel's Chapter 11 bankruptcy filing on June 19. 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. REVEL AC: Florida Developer Offers $90-Mil. For Casino ------------------------------------------------------ Tom Corrigan, writing for The Wall Street Journal, reported that Glenn Straub, a Florida real-estate developer, is offering $90 million in cash to acquire Revel AC's casino and resort, days after the embattled casino shut down and stopped operations. According to the report, court documents are unclear whether Mr. Straub would operate Revel as a casino. 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. RICCO INC: Court Green Lights Payment to Clear Mountain Bank ------------------------------------------------------------ Judge Patrick M. Flatley has entered an order authorizing Robert L. Johns, Chapter 11 trustee of Ricco Inc., to pay Clear Mountain Bank with its first priority deed of trust line in the amount of $10,723.58, plus interest from June 6, 2014, at the rate of $1.70 per day. A motion was first filed on June 6, 2014 by the debtor through Mr. Johns asking to distribute the sale proceeds to Clear Mountain Bank. The court entered an order on July 8, 2014. On September 13, 2013, the trustee filed a motion to sell the real estate located in Maryland. The sale received a bid of $290,000.00 for the real estate. The court approved the sale on December 11, 2013. Since Clear Mountain Bank had a first priority lien, it demanded that payments should be first made to them. The trustee believes that the payment would be beneficial to the estate. Trustee Robert L. Johns is represented by: TURNER & JOHNS PLLC 216 Brooks Street, Suite 200 Charleston, WV 25301 About Ricco Inc. Elk Garden, West Virginia-based Ricco, Inc. -- aka Amico Partners, Ambizioso Partners, Lupo Tana Partners, and Tre Manichinos Partners -- filed for Chapter 11 bankruptcy protection on Jan. 7, 2010 (Bankr. N.D. W.V. Case No. 10-00023). In its schedules, the Debtor disclosed $15,162,600 in assets and $4,093,674 in liabilities as of the Petition Date. Wendel B. Turner, Esq., and Robert L. Johns, Esq., at Turner & Johns, PLLC, in Charleston, West Va., represent Robert L. Johns, Chapter 11 Trustee as counsel. David M. Thomas, Esq., and Michael R. Proctor, Esq., at Dinsmore and Shohl LLP, in Morgantown, W. Va., represent the Official Committee of Unsecured Creditors as counsel. ROSETTA GENOMICS: Files Supplement to 6,000 Shares Prospectus ------------------------------------------------------------- Rosetta Genomics Ltd., on Sept. 8, 2014, filed a prospectus supplement relating to the issuance of 6,000 of its ordinary shares to a former employee in consideration of settlement of a dispute, according to a document filed with the U.S. Securities and Exchange Commission. Raved, Magriso, Benkel & Co., at Advocates & Notaries, who acted as Israeli legal counsel to Rosetta Genomics Ltd. in connection with the prospectus supplement, issued the following opinion: "Based upon and subject to the foregoing, and subject to the assumptions, comments, qualifications, limitations and exceptions stated herein, we are of the opinion that following the issuance and delivery of the Shares under and in accordance with the terms of the Settlement Agreement, the Shares will be validly issued, fully paid and non-assessable." About Rosetta Based in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to develop and commercialize new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced, using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. The Company has established a CLIA- certified laboratory in Philadelphia, which enables the Company to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. Rosetta Genomics incurred a net comprehensive loss after discontinued operations of $12.89 million on $405,000 of revenues for the year ended Dec. 31, 2013, as compared with a net comprehensive loss after discontinued operations of $10.45 million on $201,000 of revenues in 2012. As of Dec. 31, 2013, the Company had $25.88 million in total assets, $2.24 million in total liabilities and $23.63 million in total shareholders' equity. Bankruptcy Warning "We will require substantial additional funding and expect to augment our cash balance through financing transactions, including the issuance of debt or equity securities and further strategic collaborations. On December 7, 2012, we filed a shelf registration statement on Form F-3 with the SEC for the issuance of ordinary shares, various series of debt securities and/or warrants to purchase any of such securities, either individually or in units, with a total value of up to $75 million, from time to time at prices and on terms to be determined at the time of such offerings. The filing was declared effective on December 19, 2012. As of the time of the filing of this Annual Report on Form 20-F, we had sold through the Cantor Sales Agreement an aggregate of 1,559,537 of our ordinary shares for gross proceeds of $5.9 million under this shelf registration statement, leaving an aggregate of approximately $69.1 million of securities available for sale. If we need additional funding, there can be no assurance that we will be able to obtain adequate levels of additional funding on favorable terms, if at all. If adequate funds are needed and not available, we may be required to: * delay, reduce the scope of or eliminate certain research and development programs; * obtain funds through arrangements with collaborators or others on terms unfavorable to us or that may require us to relinquish rights to certain technologies or products that we might otherwise seek to develop or commercialize independently; * monetize certain of our assets; * pursue merger or acquisition strategies; or * seek protection under the bankruptcy laws of Israel and the United States," the Company stated in the 2013 Annual Report. SALON MEDIA: Plans to Raise Additional Capital ---------------------------------------------- Salon Media Group, Inc., disclosed with the U.S. Securities and Exchange Commission that it continues to seek to raise additional capital. The Company may consider the issuance of equity or debt securities in public or private offerings on terms to be negotiated with investors. The Company gives no assurance that financing will be available on terms acceptable to it. About Salon Media San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB) -- http://www.Salon.com/-- is an online news and social networking company and an Internet publishing pioneer. Salon Media incurred a net loss of $2.18 million on $6 million of net revenues for the year ended March 31, 2014, as compared with a net loss of $3.93 million on $3.64 million of net revenues for the year ended March 31, 2013. As of June 30, 2014, the Company had $1.93 million in total assets, $5.74 million in total liabilities and a $3.81 million total stockholders' deficit. Burr Pilger Mayer, Inc., in San Francisco, California, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2014. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit of $118.7 million as of March 31, 2014. The auditors said these conditions raise substantial doubt about its ability to continue as a going concern. SEARS HOLDINGS: Fitch Lowers Issuer Default Rating to 'CC' ---------------------------------------------------------- Fitch Ratings has downgraded its long-term Issuer Default Ratings (IDR) on Sears Holdings Corporation (Holdings) and its various subsidiary entities (collectively, Sears) to 'CC' from 'CCC'. KEY RATING DRIVERS EBITDA Materially Negative: The magnitude of Sears' decline in profitability and lack of visibility to turn operations around remains a significant concern. EBITDA for Sears Holdings Corporation (Sears or Holdings) is expected to be negative $1 billion in 2014 (with LTM EBITDA through Aug. 2, 2014 at negative $860 million) and potentially worse in 2015, after turning negative $337 million in 2013. Fitch expects top-line contraction of around 9% to 10% in 2014 due to estimated domestic comparable store sales (comps) of negative 1%-negative 2%, loss of Lands' End business (4.3% of 2013 consolidated sales), and ongoing store closings. Gross margins are expected to contract another 200 bps to 22%, on top of the 220 bps contraction in 2013. Fitch does not expect any catalysts in the business that will stem the rate of decline. Cash Burn Significant Concern: Sears needs to generate a minimum EBITDA of $1 billion annually between 2014 through 2016 to service cash interest expense, capex, and pension plan contributions. Given Fitch's projections for EBITDA to be negative $1 billion or worse, cash burn (prior to any working capital benefit) is expected to be around $2 billion or higher annually. In addition, Sears needs an estimated $600 million to $700 million in liquidity to fund seasonal holiday working capital needs. Funding Options May Not Be Enough to Support Operations Beyond 2016: Given the significant cash burn in the business, Sears injected $2 billion in liquidity in 2012 and $2.5 billion in 2013 through cuts in inventory buys, asset sales, real estate transactions and the issuance of a $1 billion five-year first lien secured loan in October 2013. Through the first half of 2014, Sears has generated $665 million in proceeds, including a $500M exit dividend from the separation of Lands' End and another $164 million from real estate transactions. Below is a summary of potential sources of liquidity: -- Asset sales: Sears announced in mid-May that it is exploring strategic alternatives for its 51% interest in Sears Canada (with its stake valued at approximately $765 million based on market cap as of August end), including a potential sale of Sears Holdings' interest or Sears Canada as a whole. Fitch notes that EBITDA at Sears Canada has declined significantly as well, with LTM EBITDA loss of $39 million on revenues of $3.5 billion. The company is also evaluating options to separate its Sears Auto Center business. -- Second lien notes: The ability to issue $760 million in second lien debt as permissible under the company's credit facility is subject to borrowing base requirements. Given the significant reduction in inventory over the past three years, the ability to issue this debt has been constrained over the past three quarters. Fitch expects that the ability to issue this debt even at holiday peak inventory levels (with domestic inventory expected to be at $6.7 billion to $6.9 billion) could be limited as Sears will need to increase borrowings under the revolver to fund the holiday merchandise, unless it generates adequate proceeds through asset sales first. -- Working Capital: Fitch expects working capital to be a $400 to $500 million source of funds this year between ongoing reduction in inventory due to the contraction in its core businesses, store closings and the spinoff of Lands' End. -- Real estate backed debt on unencumbered property: Sears owned 367 Sears full line stores, 183 Kmart discount units and 12 Kmart supercenters at the end of 2013 which were unencumbered. Sears could seek to do a real-estate backed transaction that could potentially be in the range of $2.0 -$2.5 billion using a similar approach to valuing the real estate that was used by J.C. Penney to raise a $2.25 billion term loan in May 2013. However, the significant deterioration in Sears business and the lack of visibility on a turnaround could limit this option. This does not contemplate a series of small real estate transactions that could also involve landlords assuming some of Kmart's and Sears' leases in highly productive malls. Should Sears even be able to execute on a number of these fronts and generate $4.0 to $6 billion in proceeds, given the high rate of cash burn in the business, these actions would take them through 2016. As a result, Fitch expects that the risk of restructuring is high over the next 24 months. Recovery Considerations for Issue-Specific Ratings: In accordance with Fitch's Recovery Rating (RR) methodology, Fitch has assigned RRs based on the company's 'CC' IDR. Fitch's recovery analysis assumes a liquidation value under a distressed scenario of approximately $6.5 billion (low seasonal inventory) to $7.5 billion (close to peak seasonal inventory assumed in 3Q'14) on domestic inventory, receivables, and property, plant, and equipment. The $3.275 billion domestic senior secured credit facility, under which Sears Roebuck Acceptance Corp. (SRAC) and Kmart are the borrowers, is rated 'CCC+/RR1', indicating outstanding (90%-100%) recovery prospects in a distressed scenario. Holdings provides a downstream guarantee to both SRAC and Kmart borrowings, and there are cross-guarantees between SRAC and Kmart. The facility is also guaranteed by direct and indirect wholly owned domestic subsidiaries of Holdings, which own assets that collateralize the facility. The facility is secured primarily by domestic inventory, which is expected to range from an estimated $5.3 billion in January 2015 to an estimated $6.9 billion around peak levels in November 2014, and pharmacy and credit card receivables, which are estimated to be $0.3 billion-$0.4 billion. The credit agreement imposes various requirements, including (but not limited to) the following provisions: if availability under the credit facility is beneath a certain threshold, the fixed-charge ratio as of the last day of any fiscal quarter should not be less than 1.0x; a cash dominion requirement if excess availability on the revolver falls below designated levels; and limitations on its ability to make restricted payments, including dividends and share repurchases. The $1 billion first lien senior secured term loan due June 2018 is also rated 'CCC+/RR1', as it is secured by a first lien on the same collateral and guaranteed by the same subsidiaries of the company that guarantee the revolving facility. Under the guarantee and collateral agreement, the revolving lenders will have priority of payment from the collateral over the $1 billion first lien-term loan lenders. The term loan that was formerly listed under Sears Holding Corporation is now listed under Kmart Corp and SRAC as they are the co-borrowers while Holdings is the obligor. The $1.24 billion second lien notes due October 2018 at Holdings, which have a second-lien on the same collateral package as the credit facility and $1 billion term loan, are rated 'CCC/RR2', indicating superior recovery prospects (71%-90%). This reflects Fitch's expectation for the continued decline in the collateral that secures the first lien and second lien debt due to the shrinking business and asset sales, as well as the potential for an additional $760 million in second lien debt. The notes contain provisions that require Holdings to maintain minimum asset coverage for total secured debt (failing which Holdings has to offer to buy notes sufficient to cure the deficiency at 101%) that could provide downside protection. If the borrowing base is less than the principal amount of Holding's consolidated debt that is secured by liens on the collateral that also secures the notes as of the last day of any two consecutive quarters (collateral coverage event), Holdings must offer to purchase an amount of notes sufficient to cure the collateral coverage shortfall at 101% of their principal amount, plus accrued and unpaid interest. Fitch also notes that the second lien notes have an unsecured claim on the company's unencumbered real estate assets, given that the notes are guaranteed by substantially all the domestic subsidiaries that guarantee the credit facility. The senior unsecured notes at SRAC are rated 'CC/RR4', indicating average recovery prospects (31%-50%). The recovery on these notes are derived from the valuation on the company's unencumbered real estate assets held at Sears, Roebuck and Co, which provides a downstream guarantee of SRAC's senior notes and also agrees to maintain SRAC's fixed-charge coverage at a minimum of 1.1x. However, should a substantial portion or all of the owned real estate be used to raise additional secured debt, it could adversely impact the ratings on the unsecured notes. Recovery to the senior unsecured notes also takes into account potential sizable claims under operating lease obligations and the company's underfunded pension plan. Rating Sensitivities Negative Rating Action: A negative rating action could result from a significant decline in liquidity if Sears in unable to inject the needed liquidity to fund ongoing operations. Positive Rating Action: A positive rating action could result from a sustained improvement in comps and EBITDA to a level where the company is covering its fixed obligations. This is not anticipated at this time. Fitch has taken the following rating actions: Sears Holdings Corporation (Holdings) -- Long-term IDR downgraded to 'CC' from 'CCC'; -- $1.24 billion second-lien secured notes downgraded to 'CCC/RR2' from 'B-/RR2'. Sears, Roebuck and Co. (Sears) -- Long-term IDR downgraded to 'CC' from 'CCC'. Sears Roebuck Acceptance Corp. (SRAC) -- Long-term IDR downgraded to 'CC' from 'CCC''; -- Short-term IDR affirmed at 'C'; -- Commercial paper affirmed at 'C'; -- $3.275 billion secured bank facility downgraded to 'CCC+/RR1' from 'B/RR1' (as co-borrower); -- $1 billion first lien term loan downgraded to 'CCC+/RR1' from 'B/RR1' (as co-borrower); -- Senior unsecured notes downgraded to 'CC/RR4' from 'CCC/RR4'. Kmart Holding Corporation (Kmart) -- Long-term IDR downgraded to 'CC' from 'CCC'. Kmart Corporation (Kmart Corp) -- Long-term IDR downgraded to 'CC' from 'CCC''; -- $3.275 billion secured bank facility downgraded to 'CCC+/RR1' from 'B/RR1' (as co-borrower); -- $1 billion first lien term loan downgraded to 'CCC+/RR1' from 'B/RR1' (as co-borrower). Fitch has withdrawn its long-term IDR on Sears DC Corp. SKINNY NUTRITIONAL: Court Confirms Plan of Liquidation ------------------------------------------------------ The Bankruptcy Court entered a confirmation order approving the first amended plan of Liquidation of Skinny Nutritional on Aug. 20, 2014, the Company disclosed in a regulatory filing with the U.S. Securities and Exchange Commission. The Plan had been supported by the consent of taxing authorizes and general vendor creditors. The Bankruptcy Court on July 11, 2014, entered an order approving the disclosure statement accompanying Skinny Nutritional's Plan as containing adequate information to enable a hypothetical investor, typical of holders of Claims against or interests in the Company, to make an informed judgment about the Plan. On July 14, 2014, the Company served solicitation packages, including (i) the Plan; (ii) the Disclosure Statement; (iii) the July 11 Order; and (iv) voting materials including a Ballot entitling certain creditors to vote to accept or reject the Plan. The deadline to cast a ballot accepting or rejecting the Plan was Aug. 11, 2014, with the exception of the Class 3 claimant, United Capital Funding Corp., which was granted an extension to cast its ballot until after the Company filed an agreed upon pre- confirmation Plan modification. On or about Aug. 18, 2014, the Company filed limited modifications to the Plan pursuant to Federal Rule of Bankruptcy Procedure 3019. The Modification clarified certain releases to confirm that any release granted under the Company's Plan would not discharge any personal guaranties of the UCF debt. A Liquidating Trustee, Michael H. Kaliner, Esq., has been appointed in order to complete the administration of the Company's bankruptcy estate. The Liquidating Trustee will liquidate the Company's remaining assets, which include two causes of action; one against Cliffstar LLC/Cott in the nature of a preference, and one against Vicky Brakl, a former Company employee. The Liquidating Trustee will endeavor to sell the Company's corporate shell, but there are no guaranties as to the Liquidating Trustee's ability to generate any moneys for the Company's shell. Michael Salaman, the Company's president has resigned as corporate president, though he presently remains on the board of the Company as its sole member pending the Effective Date of the Plan. Michael Salaman will resign as board member after the Effective Date. The Plan called for the liquidation of the Debtor's remaining assets after the sale of substantially all of the Debtor's assets to Skinny Nutritional, LLC, pursuant to the Sale Order dated Jan. 15, 2014, entered by the Bankruptcy Court, followed by a distribution to creditors in order of priority as provided by the Bankruptcy Code. A copy of the Confirmation Order of the Bankruptcy Court, dated August 20, 2104, is available at http://is.gd/34qmla A copy of the Modified First Amended Plan of Reorganization, and the First Amended Plan of Reorganization are available at: http://is.gd/TswMui http://is.gd/YzEjMM About Skinny Nutritional Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB) -- http://www.SkinnyWater.com/-- has developed and is marketing a line of enhanced waters, all branded with the name "Skinny Water" that are marketed and distributed primarily to calorie and weight conscious consumers. Skinny Nutritional filed a Chapter 11 bankruptcy petition (Bankr. E.D. Pa. Case No. 13-13972) on May 3, 2013. The petition was signed by Michael Salaman as chief executive officer. The Debtor estimated assets and debts of at least $1 million. Obermayer Rebmann Maxwell & Hippel, LLP, serves as the Debtor's counsel. The Hon. Jean K. FitzSimon presides over the case. The Company sought bankruptcy protection to avoid a forfeiture of the Company's most important and valuable assets; namely its intellectual property rights. SOURCE INTERLINK: Seeks to Estimate WARN Claims at $0 ----------------------------------------------------- Source Home Entertainment, LLC, and its debtor-affiliates ask the Bankruptcy Court to estimate the WARN Claims for all purposes in these chapter 11 cases, including allowance, voting, and distribution pursuant to the provisions of the Bankruptcy Code and the Debtors' proposed plan or any other plan confirmed by this Court. From the outset of its Chapter 11 case, the Debtors have firmly believed and stated that the most efficient, value-maximizing path available for this estate is confirmation of a liquidating plan promptly following the going concern sale of the assets of their wire manufacturing business. The WARN Plaintiffs in the pending adversary proceeding styled as Michaela Tomasch, et al., v. Source Interlink Distribution, LLC, et al., Adv. No. 14-50411-KG (Bankr. D. Del.), threaten the Debtors' path to consummation of such a plan by asserting unfounded claims. These claims arise from the Debtors' alleged violations of the Federal WARN Act and California Labor Code in connection with a reduction in force undertaken by the Debtors beginning on May 30, 2014. The Debtors deny liability to the WARN Plaintiffs based upon various defenses including, inter alia, the "faltering company" exception to the Federal and California WARN Acts and the "unforeseen business circumstances" exception to the Federal WARN Act. Because the amount of the WARN Claims is disputed and unliquidated, but cost-prohibitive as asserted, confirmation of the plan or any other distribution of assets to creditors in these cases cannot proceed until the WARN Claims have been determined and liquidated. However, full litigation of the WARN Claims will materially delay the timeline of these chapter 11 cases, drain the Debtors' resources, and diminish whatever recoveries are available to creditors. In light of the undue delay and potential prejudice that would result from continued litigation of the WARN Claims, and considering the substantial likelihood that the Debtors would prevail on the merits of any such litigation, the Debtors seek to estimate the WARN Claims as priority and general unsecured claims with a value of zero dollars. About Source Home Entertainment and Source Interlink Headquartered in Bonita Springs, Florida, Source Home Entertainment, LLC, manufactures front-end retail checkout displays and is a leading distributor of books, periodicals, and other printed material. Its distribution network spans over 32,500 retail locations in the U.S. and abroad. In the twelve months ended April 30, 2014, Source Home generated revenues totaling approximately $600 million on a consolidated basis. As of March 31, 2014, Source Home had assets (not including goodwill or intangibles) of $205 million and liabilities of approximately $290 million. Source Interlink Distribution, LLC disclosed $82,729,238 in assets and $104,521,951 in liabilities. Source Home, Source Interlink Manufacturing, LLC, and other affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-11553) on June 23, 2014, to sell their front-end retail display fixtures business to lenders, absent higher and better offers. The Debtors are winding down their books distribution business. The Debtors have tapped Kirkland & Ellis LLP as general bankruptcy and corporate counsel; Young Conaway Stargatt & Taylor, LLP, as co-counsel, FTI Consulting, Inc., as crisis and turnaround advisor; and Kurtzman Carson Consultants, LLC, as claims agent. Stephen Dube has been designated by the Debtors to act as chief restructuring officer and Joshua Korsower to act as chief financial officer. The United States Trustee for Region 3 appointed seven creditors to serve on the Official Committee of Unsecured Creditors. The Committee is represented by Lowenstein Sandler LLP, , and Duane Morris LLP. The Committee tapped PricewaterHouseCoopers LLP as its financial advisor. SPINDLE INC: Has $3.3-Mil. Net Loss for Q2 Ended June 30 -------------------------------------------------------- Spindle, Inc., filed its quarterly report on Form 10-Q, disclosing a net loss of $3.3 million on $177,947 of sales income for the three months ended June 30, 2014, compared to a net loss of $861,717 on $327,210 of sales income for the same period last year. The Company's balance sheet at June 30, 2014, showed $8.59 million in total assets, $879,980 in total liabilities, and stockholders' equity of $7.71 million. A copy of the Form 10-Q is available at: http://is.gd/KNLwOA Scottsdale, Ariz.-based Spindle, Inc., was originally incorporated in the State of Nevada on Jan. 8, 2007, as "Coyote Hills Golf, Inc." The Company was previously an online retailer of golf- related apparel, equipment and supplies. Through the date of this quarterly report, the Company only generated minimal revenues from that line of business. Spindle is a commerce-centric company with four primary customers: 1) individual consumers (buyers); 2) individual businesses (merchants or sellers); 3) third party channel partners (financial institutions and other non-bank partners such as wireless carriers); and 4) advertisers (retail, brands, and destinations). The Company intends to generate revenue through patented cloud-based payment processes under the Spindle product line, and licensing of its intellectual property. STAR DYNAMICS: Supplier Wants Equipment Excluded from Sale ---------------------------------------------------------- Electro Rent Corporation objects to STAR Dynamics Corporation's proposal to sell substantially all of its assets to Mwagusi, LLC, to ensure that the Debtor does not sell the electronic and test equipment it provided and ensure that the Debtor returns the equipment to ERC or have the equipment segregated from the equipment to be sold. ERC asks the Court that it condition the approval of the sale motion on the exclusion of its equipment and the provision of adequate protection of ERC's interest on the equipment. As previously reported by The Troubled Company Reporter, the Debtor seeks to sell substantially all of its assets to Mwagusi for the total purchase price of $5,000,000, subject to higher and better bids. The Court has scheduled a hearing on the motion on Sept. 19, 2014 at 1:00 p.m. (Eastern Time). ERC is represented by: David M. Whittaker, Esq. BRICKER & ECKLER LLP 100 South Third Street Columbus, OH 43215 Tel: (614) 227-2300 Fax: (614) 227-2390 E-mail: dwhittaker@bricker.com -- and -- Jeffrey Kurtzman, Esq. KLEHR, HARRISON, HARVEY, BRANZBURG LLP 1835 Market Street, Suite 1400 Philadelphia, PA 19103 Tel: (215) 569-4493 E-mail: jkurtzman@klehr.com About STAR Dynamics STAR Dynamics Corp. develops, sales, and services instrumentation radar systems for missile test ranges utilized by the United States and foreign governments. Located principally in Hilliard, Ohio, with satellite offices in Herndon, Virginia and Sandestin Florida, it has 112 full-time employees. STAR Dynamics filed a petition for Chapter 11 protection (Bankr. S.D. Ohio Case No. 13-59657) on Dec. 10, 2013, in Columbus, Ohio, in part to halt a lawsuit by BAE Systems Plc. According to its first-day motions and as of Nov. 30, 2013, it has assets of $28,470,788.13, liabilities of $50,892,360.12 and gross sales of $8,140,140.93. In its schedules, the Debtor listed $12,138,334 in total assets and $50,740,343 in total liabilities. BAE is an American subsidiary of a global-level defense contractor based in Great Britain, with more than 50,000 employees world-wide. BAE has its headquarters in Arlington, Virginia, and like the Debtor, is engaged in the radar range business for the testing of missiles and other weaponry. Bankruptcy Judge Charles M. Caldwell oversees the case. Thomas R. Allen, Esq., Richard K. Stovall, Esq., and Erin L. Pfefferle, Esq., at Allen Kuehnle Stovall & Neuman LLP serve as the Debtor's bankruptcy counsel. Michael J. Sullivan, Esq., Russell A. Williams, Esq., Julie E. Adkins, Esq., Louis T. Isaf, Esq., and Nanda K. Alapati, Esq., at Womble Carlyle Sandridge & Rice LLP, serve as special counsel with respect to litigation involving BAE Systems and with respect to the completion of prepetition patent work. Sagent Advisors LLC serves as financial advisor. TACTICAL INTERMEDIATE: Creditors' Panel Rips First DIP Amendment ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Tactical Intermediate Holdings, Inc., et al., objects to the first amendment to the DIP Loan and Security Agreement. On Sept. 3, 2014, the Debtors filed the First Amendment, amending the DIP Agreement. The First Amendment, in part, extends the maturity date of the DIP loan for two months -- from Sept. 15, 2014, to Nov. 15, 2014. In addition, the First Amendment decreases the Facility Cap to $1,400,000. The Creditors' Committee pointed out that a review of the Revised Budget reflects neither an increase in budgeted professional fees nor the Administrative Expense Reserve. To the contrary, the Administrative Expense Reserve, as contemplated in the Plan and budgeted in the DIP Budget, appears to have been eliminated in the Revised Budget, the Committee says. The Committee complains that the Debtors' professionals are already near to, at or over their budgeted fees in the case and the Revised Budget leaves in question whether administrative expenses can be funded for the remainder of the case and the viability of the proposed plan -- a threat that puts any recovery by unsecured creditors at risk. The Committee asserts that the best chance for unsecured creditors to realize value in the case is through a confirmed Chapter 11 liquidating plan. Administrative insolvency threatens the Debtors' ability to consummate its liquidating plan and could result in conversion of the cases. Accordingly, the Committee objects to the First Amendment and Revised Budget to the extent the modifications result, or could result, in an administratively insolvent estate. The Committee is represented by Jamie L. Edmonson, Esq., and Daniel A. O'Brien, Esq., at Venable LLP, in Wilmington, Delaware. 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. TESORO LOGISTICS: S&P Raises CCR to 'BB'; Outlook Stable -------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Tesoro Logistics L.P. to 'BB' from 'BB-'. The outlook is stable. At the same time, S&P raised its rating on the partnership's senior unsecured notes to 'BB' from 'BB-'; the recovery rating on this debt remains '4', indicating S&P's expectations of average (30% to 50%) recovery in a default. Tesoro Logistics has total balance sheet debt of about $1.3 billion. "The rating action reflects our view that Tesoro Logistics has been able to successfully grow the scale of its operations, both through asset drops from parent Tesoro Corp. and third-party acquisitions," said Standard & Poor's credit analyst Michael Grande. At the same time, long-term, fee-based contracts with minimum volume commitments with Tesoro support nearly 90% of the partnership's EBITDA, which S&P believes will keep credit measures at levels appropriate for the rating. S&P expects organic growth projects will drive Tesoro Logistics' EBITDA to about $400 million in 2015, up from $300 million in 2014. At the same time, S&P expects these projects will be supported by fee-based contracts and funded in a balanced manner such that debt to EBITDA remains below 4x. The "fair" business risk profile mainly reflects the partnership's limited, but growing, scale and geographic diversity. Tesoro Logistics generates its cash flow from its High Plains pipeline and trucking assets in the Bakken Shale area (near parent Tesoro's Mandan, N.D., refinery), logistic assets supporting Tesoro's California refineries, and its refined products pipeline, terminal, and storage assets in the Rocky Mountain and Pacific Northwest regions. The partnership generates stable cash flows, mainly supported by its long-term, fee-based contracts with Tesoro which have no direct commodity exposure. These minimum volume contracts effectively protect about 87% of Tesoro Logistics' revenues. The stable outlook reflects S&P's expectation that Tesoro Logistics' cash flow will remain fee-based while managing its financial leverage at 4x or less as it pursues growth opportunities. A downgrade of parent Tesoro could cause S&P to lower the rating on Tesoro Logistics, although it would not necessarily do so if it downgraded Tesoro to 'BB'. Independent of any potential ratings actions on Tesoro, S&P could lower its ratings on Tesoro Logistics if the partnership materially increases leverage such that debt to EBITDA exceeds 4.5x on a sustained basis or if the partnership begins to assume some commodity price exposure. The ratings of Tesoro and Tesoro Logistics are closely linked. S&P could consider a positive rating action on Tesoro Logistics if it was to upgrade Tesoro, given the strong business ties between the companies and the implicit support S&P attributes to Tesoro's ownership. S&P could also raise ratings on Tesoro Logistics if the partnership achieves greater scale, geographic, and asset diversity, while maintaining stable, fee-based cash flows and leverage of 4x or less. THINSPACE TECHNOLOGY: Operating Loss at $1.75MM in 1H of 2014 ------------------------------------------------------------- Thinspace Technology Inc. said in its recently filed quarterly report on Form 10-Q that it has incurred a loss from operations of $1.75 million for the six months ended June 30, 2014. As of June 30, 2014, the Company has a negative working capital of $15.15 million. As a result, there is substantial doubt about the Company's ability to continue as a going concern, according to the regulatory filing. The Company disclosed net income of $19.96 million on $2.59 million of revenues for the three months ended June 30, 2014, compared with a net loss of $282,059 on $267,720 of revenues for the same period in last year. The Company's balance sheet at June 30, 2014, showed $3.31 million in total assets, $18.6 million in total liabilities, and a stockholders' deficit of $15.3 million. A copy of the Form 10-Q is available at: http://is.gd/yXSMun Thinspace Technology, Inc., a cloud computing company, develops and sells network software. It offers Propalms TSE, a simple management solution for Microsoft remote desktop users; Propalms VPN that allows secure remote access to applications and data from outside of the corporate network; Propalms VDI, which allows customers to run virtual desktops on the Internet; Pano Logic G2, a Zero Client that replaces traditional desktops and allows secure access to hosted virtual desktops; and Thin Space, a hardware Zero Client solution for the enterprise and corporate market. The company sells its products directly to independent software vendors; application service providers; and end users in public and private sectors through a network of distributors and resellers worldwide. Thinspace Technology, Inc. was founded in 2001 and is headquartered in Port Orange, Florida. Thinspace Technology, Inc operates as a subsidiary of ProTek Capital, Inc. TOWER AUTOMOTIVE: Moody's Rates New $250MM Unsecured Notes 'B2' --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Tower Automotive Holdings USA, LLC's (Holdings USA) $250 million of new senior unsecured notes. Holdings USA is a wholly-owned indirect subsidiary of Tower International, Inc. (Tower). In a related action, Moody's affirmed Holdings USA's Corporate Family and Probability of Default Ratings, at B1 and B1-PD, respectively; and raised the rating on the anticipated remaining amount of Holdings USA's existing senior secured term loan B to Ba3 from B1. The Speculative Grade Liquidity Rating is affirmed at SGL-3. The rating outlook is stable. Tower Automotive Holdings USA, LLC (and TA Holdings Finance, Inc., as co-issuer) New $250 million of senior unsecured notes due 2022, at B2 (LGD5) Moody's affirmed the following ratings: Tower Automotive Holdings USA, LLC Corporate Family Rating, at B1; Probability of Default Rating, at B1-PD Speculative Grade Liquidity Rating, at SGL-3 Moody's upgraded the following rating: Tower Automotive Holdings USA, LLC Senior secured term loan B due 2020, to Ba3 (LGD3) from B1 (LGD3) The new $200 million senior secured revolving credit facility is not rated by Moody's. Ratings Rationale The proceeds from the new senior unsecured notes will be used prepay a portion of Holdings USA's existing senior secured term loan B. Concurrent, with the transaction, a new unrated $200 million senior secured revolving credit facility will be issued to replace the existing unrated $150 million asset based revolving credit facility. The transaction is expected to subordinate a significant portion of the company's debt below the existing secured term loan, lifting its rating by one notch to Ba3. The transaction also shifts a significant portion of the company's debt into fixed rate instruments, which would help mitigate the increase in cash interest costs if interest rates rise over the intermediate-term. Holdings USA's B1 Corporate Family Rating continues to reflect the company's improving credit metrics supported by improving performance and lower financing costs. Over the intermediate-term these factors are expected to support free cash flow generation. Moody's estimates that Tower's EBITA/interest and Debt/EBITDA for the 12 months ended June 2014 were 2.5x and 3.4x (inclusive of Moody's adjustments), respectively. The ratings also benefit from Tower's balanced geographic profile which should support continued improvement in revenues as economic conditions stabilize in Europe and North American automotive demand improves. Tower also maintains a balanced profile across small cars, framed, and light truck vehicle platform types. The stable rating outlook is supported by an adequate liquidity profile and continues to reflect Moody's expectation that Tower's credit metrics should continue to gradually migrate to stronger levels within the assigned rating range over the intermediate- term. Tower is anticipated to have an adequate liquidity profile over the near-term supported by cash on hand and a $200 million revolving credit facility that expires in 2019. Cash balances as of June 30, 2014 were $169 million. The existing asset based revolving credit facility was unused as of June 30, 2014 aside from $11.7 million of letters of credit outstanding. The financial covenants under the proposed cash flow revolving credit facility are expected to include a maximum consolidated leverage ratio test and a minimum interest coverage test. The senior secured term loan has a maximum net leverage coverage ratio test. Moody's expects the company will have ample cushion under these covenants over the near-term. Future events that have the potential to drive the outlook or rating higher include: consistent free cash flow generation, improvement in operating performance resulting in Debt/EBITDA maintained below 3.0x, and EBITA/Interest coverage inclusive of restructuring charges above 3.0x. Future events that have the potential to drive the outlook or rating lower include regional weaknesses in global automotive production which are not offset by successful restructuring actions resulting in Debt/EBITDA above 4.0x, EBITA/Interest being maintained at 2.0x, or deterioration in the company's liquidity position. Tower International, Inc. headquartered in Livonia, Michigan, is a leading integrated global manufacturer of engineered structural metal components and assemblies primarily serving automotive original equipment manufacturers. The company manufactures body- structure stampings, frame and other chassis structures, as well as complex welded assemblies, for small and large cars, crossovers, pickups and SUVs. Revenues in 2013 approximated $2.1 billion. 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. TOWER AUTOMOTIVE: S&P Assigns 'B' Rating on $250MM Sr. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' issue-level and '6' recovery ratings to Tower Automotive Holdings USA LLC's $250 million senior unsecured notes due 2022. The '6' recovery rating indicates S&P's expectation for negligible recovery (0%- 10%) in the event of a payment default. Tower will use the proceeds of this offering, along with cash on hand, if needed, to prepay a portion of the existing term loan B due 2020. The company is also amending and restating its asset- based lending revolving credit facility and converting it to a $200 million cash flow revolving credit facility. The company's existing term loan is rated 'BB-', with a '4' recovery rating, indicating average recovery prospects (30%-50%) in the event of a default. The cash flow revolving credit facility will not be rated. The senior unsecured notes will be senior unsecured obligations of the company and rank pari passu with all present and future senior unsecured indebtedness and senior to all present and future subordinated indebtedness. The cash flow revolving credit facility has first-priority security interests in accounts receivable, inventory, cash, deposit accounts, investments in cash and cash equivalents, and other permitted investments. The corporate credit rating on Tower International Inc. reflects S&P's assessment of the company's financial risk profile as "significant" (including leverage under 4.0x in 2014) and its business risk profile as "weak" (several major competitors and prospects for volatile production), based on S&P's criteria. RATINGS LIST Tower International Inc. Corporate Credit Rating BB-/Stable/-- New Ratings Tower Automotive Holdings USA LLC $250 million senior unsecured notes due 2022 B Recovery Rating 6 TREEHOUSE FOODS: Moody's Confirms 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service confirmed the credit ratings of TreeHouse Foods, Inc., including the Ba2 Corporate Family Rating ("CFR"), the Ba2-PD Probability of Default Rating ("PDR"), the Ba2 senior unsecured debt instrument rating and the (P)Ba2 senior unsecured shelf rating. Moody's also affirmed the company's Speculative Grade Liquidity rating at SGL-2. This action concludes the rating review for downgrade that commenced on July 1, 2014 following the company's announcement of its intent to purchase Flagstone Foods, Inc. ("Flagstone"), a producer of private label nuts, trail mix and dried fruit snacks, from private equity firm Gryphon Investors ("Gryphon") and other shareholders for approximately $860 million. The company completed the acquisition of Flagstone on July 29, 2014. Rating Rationale The ratings confirmation reflects Moody's expectation that higher financial leverage that resulted from the Flagstone acquisition will likely decline to below pre-acquisition levels in less than a year, owing in part to the successful issuance of common equity that financed over 40% of the purchase price and the solid earnings growth of Flagstone and other acquired businesses that Moody's expect to be sustained for the foreseeable future. These positive trends are partially offset by the rising risk profile of TreeHouse's acquisition strategy that has shifted recently to include a faster pace and larger size of transactions, a wider range of acquisition targets, and a willingness to pay higher valuation multiples. The Flagstone acquisition -- the largest acquisition in TreeHouse's history -- came on the heels of the $150 million acquisition in May of Protenergy Natural Foods ("Protenergy"), an Ontario-based manufacturer of private label broth, soups and gravys. Moody's estimate that the EBITDA multiple paid in each of these acquisitions was more than 10 times, compared to the 7-8 times TreeHouse was paying just a few years ago, which reflects declining financing costs and rising competition from other bidders. As a result, while TreeHouse continues to make attractive acqusitions of private label food companies, Moody's believe that it has begun to take on more risk than before in order to achieve its return objectives. Moody's has taken the following rating actions on TreeHouse Foods, Inc.: Ratings confirmed: Corporate Family Rating at Ba2; Probability of Default Rating at Ba2-PD; $400 million 4.875% senior unsecured notes due 2022 at Ba2, LGD4; Senior unsecured shelf at (P)Ba2. Ratings affirmed: Speculative Grade Liquidity Rating at SGL-2. TreeHouse financed the $860 million Flagstone acquisition through a combination of approximately $330 million of borrowings under the company's $900 million revolving credit facility (unrated), a new $200 million Term Loan A (unrated), and a common stock offering that netted approximately $358 million. TreeHouse plans to leverage Flagstone's success in converting center-of-store offerings to perimeter-located products, which tend to carry higher margins. Consumers are willing to pay a premium for fresh produce and healthy foods sold on grocery store perimeters making it among the more profitable areas of the store for food retailers and vendors. When the Flagstone was formed by Gryphon in 2010, its product portfolio was comprised mostly of traditional shelf-stable private label nuts, and dried fruits. The company has since expanded its manufacturing capabilities to offer higher-margin premium private label snacks located in the fresh produce section, which has been a key driver of Flagstone's double-digit sales growth. Moody's estimates that pro forma debt/EBITDA, after Moody's adjustments and including the Flagstone and Protenergy acquisitions, is approximately 4.0 times A rating downgrade could occur if TreeHouse's core operating performance deteriorates, the integration of an acquisition becomes problematic, or financial policy turns more aggressive. Quantitatively, if debt/EBITDA is sustained above 3.5 times EBITDA, retained cash flow to net debt falls below 16%, or the company's earnings cushion against bank covenants falls below 10%, a downgrade could occur. Given TreeHouse's relatively small size and its growth-by- acquisition strategy, an upgrade is unlikely in the near-term. Moody's expect TreeHouse's credit profile to strengthen over time through the successful execution of its growth strategy, stable performance in core operations, and the continued balanced use of debt and equity to finance acquisitions. Moody's could upgrade the ratings if the company significantly and profitably grows its scale and is able to sustain debt/EBITDA below 3.0 times. TreeHouse Foods, Inc. is a leading private label food manufacturer servicing primarily the retail grocery and foodservice distribution channels. Its sells products within a wide array of product categories including: non-dairy powdered creamers; soups; salad dressings and sauces; powdered drink mixes; single-serve hot beverages; hot and cold cereals; macaroni and cheese; skillet dinners and side dishes; salsa and Mexican sauces; jams and pie fillings; pickle-related products; and nuts, fruit and trail mix snacks. Pro forma sales for the twelve month period ended June 30, 2014 were approximately $3.5 billion. The principal methodology used in this rating was Global Packaged Goods published in June 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. TRUMP ENTERTAINMENT: Cash Collateral Sole Source of Funding ----------------------------------------------------------- Trump Entertainment Resorts Inc., unable to obtain postpetition financing, is seeking interim and final approval from the bankruptcy court to use cash collateral to fund its Chapter 11 case. The Debtors are parties to an Amended and Restated Credit Agreement, dated as of July 16, 2010, by and between Trump Entertainment Resorts Holdings, L.P. and Trump Entertainment Resorts, Inc., as borrowers; the guarantor parties thereto; Icahn Partners LP, Icahn Partners Master Fund LP, and IEH Investments I LLC, as lenders; and Icahn Agency Services, LLC, as administrative agent and collateral agent. As of the Petition Date, the aggregate principal amount outstanding was $285.6 million plus accrued but unpaid interest of $6.6 million. The Debtors say they require immediate access to cash collateral to ensure that they are able to continue the operation of their businesses. To date, the Debtors have been unable to obtain commitments for postpetition financing, such that the cash collateral is the Debtors' sole source of funding for their operations and the costs of administering the chapter 11 process. Absent authority to immediately use cash collateral, the Debtors, their creditors and the estates generally would suffer irreparable harm because the Debtors would immediately cease operations, which, in turn, would cause an immediate and pronounced deterioration in the value of the Debtors' business. The proposed interim order provides adequate protection in the form of superpriority claims and adequate protection liens to protect the secured parties against any diminution in value arising from the Debtors' use of cash collateral or the imposition of the automatic stay pursuant to Section 362 of the Bankruptcy Code. The Debtors further propose to make disbursements pursuant to a budget, subject to permitted variances. First Day Motions The Debtors on the Petition Date also filed motions to: -- prohibit utility companies from altering, refusing, or discontinuing Utility Services on account of prepetition invoices; -- pay certain prepetition taxes and fees; -- pay prepetition obligations incurred in connection with liability, property, and other insurance programs; -- pay prepetition claims under PACA and of certain critical vendors and services providers; -- honor prepetition obligations related to customer programs; -- continue using their cash management system; -- pay employee wages and benefits; and -- establish notification procedures for transfers of claims or worthless stock deductions with respect to common stock. A hearing on the first-day motions was slated for Sept. 10. About Trump Entertainment Resorts Trump Entertainment Resorts Inc., owner of the Atlantic City Boardwalk casinos that bear the name of Donald Trump, returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept. 9, 2014, with plans to close the Trump Plaza by next week, and, absent union concessions, the Taj Mahal by Nov. 13. TER and its affiliated debtors own and operate two casino hotels located in Atlantic City, New Jersey. TER said it will close the Trump Taj Mahal Casino Resort by Sept. 16, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13. The Debtors have sought an order authorizing the joint administration of their Chapter 11 cases and the consolidation thereof for procedural purposes only. Judge Kevin Gross presides over the Chapter 11 cases. The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as noticing and claims agent. TER estimated $100 million to $500 million in assets as of the bankruptcy filing. The Debtors as of Sept. 9, 2014, owe $285.6 million in principal plus accrued but unpaid interest of $6.6 million under a first lien debt issued under their 2010 bankruptcy-exit plan. The Debtors also have trade debt in the amount of $13.5 million. TRUMP ENTERTAINMENT: Proposes Prime Clerk as Claims Agent --------------------------------------------------------- Trump Entertainment Resorts Inc. and its affiliated debtor ask for bankruptcy court approval to hire Prime Clerk LLC as their claims and noticing agent in the chapter 11 cases. According to the Debtors, by appointing Prime Clerk as the claims agent in the chapter 11 cases, the distribution of notices and the processing of claims will be expedited, and the Office of the Clerk of the Bankruptcy Court will be relieved of the administrative burden of processing claims. For its claims and noticing services, Prime Clerk will charge the Debtors at these hourly rates: Hourly Rate ----------- Analyst $45 Technology Consultant $100 Consultant $110 Senior Consultant $150 Director $185 For the firm's solicitation, balloting and tabulation services, the rates are: Hourly Rate ----------- Solicitation Consultant $185 Director of Solicitation $200 The firm will charge $0.10 per page for printing, $0.10 per page for fax noticing, and no charge for e-mail noticing. Hosting of the case Web site is free of charge and on-line claim filing services are free of charge. For data administration and management, the firm will charge $0.10 per record per month for data storage, maintenance and security. Prior to the Petition Date, the Debtors provided Prime Clerk a retainer in the amount of $10,000. The claims agent can be reached at: PRIME CLERK LLC 830 3rd Avenue, 9th Floor New York, NY 10022 Attn: Shai Waisman Tel: (212) 257-5450 E-mail: swaisman@primeclerk.com About Trump Entertainment Resorts Trump Entertainment Resorts Inc., owner of the Atlantic City Boardwalk casinos that bear the name of Donald Trump, returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept. 9, 2014, with plans to close the Trump Plaza by next week, and, absent union concessions, the Taj Mahal by Nov. 13. TER and its affiliated debtors own and operate two casino hotels located in Atlantic City, New Jersey. TER said it will close the Trump Taj Mahal Casino Resort by Sept. 16, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13. The Debtors have sought an order authorizing the joint administration of their Chapter 11 cases and the consolidation thereof for procedural purposes only. Judge Kevin Gross presides over the Chapter 11 cases. The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as noticing and claims agent. TER estimated $100 million to $500 million in assets as of the bankruptcy filing. The Debtors as of Sept. 9, 2014, owe $285.6 million in principal plus accrued but unpaid interest of $6.6 million under a first lien debt issued under their 2010 bankruptcy-exit plan. The Debtors also have trade debt in the amount of $13.5 million. TRUMP ENTERTAINMENT: To Limit Trading to Protect NOLs ----------------------------------------------------- Trump Entertainment Resorts Inc. and its affiliated debtors ask the bankruptcy court to set notification procedures that must be satisfied before certain dispositions of, or claims of worthless stock deductions with respect to, equity securities in TER or of any beneficial ownership are deemed effective. The Debtors have incurred significant net operating losses ("NOLs"), which may have substantial future value to the Debtors' successors. Because the Debtors will report a taxable loss for the year ended 2013, the Debtors estimate that as of Dec. 31, 2013 they will have total federal NOL carryovers of $450,000,000 and New Jersey NOL carryovers of $840,000,000, which would expire on a rolling basis beginning in 2029. The problem facing the Debtors is that unrestricted trading of TER's Common Stock and claims of worthlessness with respect to the common stock could severely limit or even eliminate the Debtors' ability to use such NOLs. Under section 382 of the Internal Revenue Code of 1986, as amended, the Debtors' ability to use their NOLs as well as certain other tax credits will be severely limited if and when TER undergoes an "ownership change" for purposes of section 382 of the IRC. Because an "ownership change" may negatively impact the Debtors' utilization of their NOL carryforwards and other tax attributes, the Debtors proposed these procedures: * Any "substantial shareholder" -- entity that has direct or indirect beneficial ownership of at least 520,532 shares of TER common stock -- must serve and file a declaration on or before the later of (i) 20 days after the date of the notice of order and (ii) 10 days after becoming a substantial shareholder. * Prior to effectuating any transfer of the equity securities that would result in another entity becoming a substantial shareholder, the parties to such transaction must serve and file a notice of the intended stock transaction. * The Debtors have 15 calendar days after receipt of the stock transaction notice to object to the proposed transaction. * If the Debtors do not object, the proposed transaction may proceed. * Any transfer of the equity securities in violation of the procedures will be null and void ab initio. The Debtors also request that the Court enter an order restricting the ability of shareholders that own or have owned 50% or more of the Common Stock to claim a deduction for the worthlessness of those securities on their federal or state tax returns for any tax year ending before the Debtors emerge from chapter 11 protection. Under IRC section 382(g)(4)(D), any securities held by such a shareholder are treated as though they were transferred if such shareholder claims a worthless stock deduction with respect to such securities. About Trump Entertainment Resorts Trump Entertainment Resorts Inc., owner of the Atlantic City Boardwalk casinos that bear the name of Donald Trump, returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept. 9, 2014, with plans to close the Trump Plaza by next week, and, absent union concessions, the Taj Mahal by Nov. 13. TER and its affiliated debtors own and operate two casino hotels located in Atlantic City, New Jersey. TER said it will close the Trump Taj Mahal Casino Resort by Sept. 16, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13. The Debtors have sought an order authorizing the joint administration of their Chapter 11 cases and the consolidation thereof for procedural purposes only. Judge Kevin Gross presides over the Chapter 11 cases. The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as noticing and claims agent. TER estimated $100 million to $500 million in assets as of the bankruptcy filing. The Debtors as of Sept. 9, 2014, owe $285.6 million in principal plus accrued but unpaid interest of $6.6 million under a first lien debt issued under their 2010 bankruptcy-exit plan. The Debtors also have trade debt in the amount of $13.5 million. TRUMP ENTERTAINMENT: Lawyer Sees Possibility of a Shutdown ---------------------------------------------------------- Peg Brickley, writing for The Wall Street Journal, reported that Trump Entertainment Resorts Inc.'s company lawyer, Kristopher Hansen, told U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, that there's a "significant possibility" the company will be forced to close both its casinos and shut down its Atlantic City Boardwalk gambling enterprise in bankruptcy. According to the report, unless discussions with the union, Unite Here Local 54, work out, "there is a significant possibility that we will be closing the Taj Mahal as well on Nov. 13," Mr. Hansen told Judge Gross. About Trump Entertainment Resorts Trump Entertainment Resorts Inc., owner of the Atlantic City Boardwalk casinos that bear the name of Donald Trump, returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 14-12103) on Sept. 9, 2014, with plans to close the Trump Plaza by next week, and, absent union concessions, the Taj Mahal by Nov. 13. TER and its affiliated debtors own and operate two casino hotels located in Atlantic City, New Jersey. TER said it will close the Trump Taj Mahal Casino Resort by Sept. 16, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13. The Debtors have sought an order authorizing the joint administration of their Chapter 11 cases and the consolidation thereof for procedural purposes only. Judge Kevin Gross presides over the Chapter 11 cases. The Debtors have tapped Young, Conaway, Stargatt & Taylor, LLP, as counsel; Stroock & Stroock & Lavan LLP, as co-counsel; Houlihan Lokey Capital, Inc., as financial advisor; and Prime Clerk LLC, as noticing and claims agent. TER estimated $100 million to $500 million in assets as of the bankruptcy filing. The Debtors as of Sept. 9, 2014, owe $285.6 million in principal plus accrued but unpaid interest of $6.6 million under a first lien debt issued under their 2010 bankruptcy-exit plan. The Debtors also have trade debt in the amount of $13.5 million. US COAL: Proposes to Pay Bonuses for 3 Key Accounting Managers -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that U.S. Coal Corp., proposes to pay bonuses to three accounting department managers to ensure that they remain dedicated to their work throughout the coal producer's bankruptcy. According to the report, Chief Financial Officer Michael Windisch would get a bonus equal to 65% of his base salary, or $110,500, and if general unsecured creditors recover in full under a plan, the CFO would get 300%, or $510,000. The controller and assistant controller would get bonuses of as much as $90,000 and $60,000, respectively, the report said. A hearing to consider approval of the program is scheduled for Sept. 18, the report further related. About U.S. Coal Kolmar Americas, Inc., filed an involuntary Chapter 11 bankruptcy petition for U.S. Coal Corporation (Bankr. E.D. Ky. Case No. 14-51461) in Lexington, Kentucky on June 10, 2014. In its schedules, U.S. Coal disclosed $56,702,402 in total assets and $49,970,561 in total liabilities. Bridgeport, Connecticut-based Kolmar says it is owed by Lexington- based U.S. Coal roughly $1.36 million on account of a business debt. Kolmar sought and obtained dismissal of a duplicate involuntary petition (Case No. 14-51460) on grounds that it was a duplicate case. Kolmar is represented by Daniel I. Waxman, Esq., at Wyatt, Tarrant & Combs, LLP, in Lexington, Kentucky. Chief Judge Tracey N. Wise presides over the case. On June 27, 2014, the Court entered an order directing the joint administration of the Chapter 11 cases of Licking River Mining, LLC (Case No. 14-10201), Licking River Resources, Inc. (Case No. 14-10203), S. M. & J., Inc. (Case No. 14-10220), Fox Knob Coal Co., Inc. (Case No. 14-60619), J.A.D. Coal Company, Inc. (Case No. 14-60676), and U.S. Coal Corporation (Case No. 14-51461). Licking River Mining, LLC, Case No. 14-10201, is the lead case. On June 27, 2014, the Court appointed John Collins as the individual designated to perform the duties of U.S. Coal Corporation as a debtor in bankruptcy. USA MORTGAGE: Couple Can't Count Investment Loss as Theft --------------------------------------------------------- Law360 reported that the U.S. Tax Court said a couple who loaned more than $4 million to a now-defunct mortgage company cannot deduct the money as a bad debt or a loss caused by theft because they had an avenue to try to recover the money. According to the report, the tax court said the couple didn't qualify as creditors who had bad debt loss or a theft loss because they filed a proof of claim in bankruptcy court, indicating there was a possibility that they could regain some of the funds. The case is Delbert M. Bunch and Ernestine L. Bunch v. Commissioner of Internal Revenue, case number 18774-11 in the U.S. Tax Court. VERMILLION INC: Matthew Strobeck Holds 5.7% Equity Stake -------------------------------------------------------- Matthew Strobeck disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that as of Sept. 8, 2014, he beneficially owned 2,054,070 shares of common stock of Vermillion, Inc., representing 5.7 percent of the shares outstanding. As of Sept. 8, 2014, Birchview Capital, LP, may be deemed to beneficially own 2,023,070 Shares representing approximately 5.6% of the total number of Shares outstanding. Mr. Strobeck is the chief investment officer and majority owner of Birchview. A copy of the Schedule 13D/A is available for free at: http://is.gd/mB1AGq About Vermillion Vermillion, Inc., is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. Vermillion incurred a net loss of $8.81 million in 2013, a net loss of $7.14 million in 2012 and a net loss of $17.79 million in 2011. As of June 30, 2014, the Company had $23.51 million in total assets, $5.76 million in total liabilities and $17.74 million in total stockholders' equity. VIGGLE INC: Presented at Rodman & Renshaw Conference ---------------------------------------------------- John Small, the chief financial officer of Viggle Inc., presented at the Rodman & Renshaw 16th Annual Investment Conference at the New York Palace Hotel in NYC on Sept. 9, 2014. Mr. Small presented the same material at the Aegis 2014 Healthcare & Technology Conference at the Encore in Las Vegas on Sept. 11, 2014, and at the Wedbush California Dreamin' Consumer Conference: "NY Edition" at Le Parker Meridien Hotel in NYC LD Micro Invitational 2014 Conference on Sept. 23, 2014 at 1:20p EDT, to be webcast at http://wsw.com/webcast/wedbush29/vggl. A copy of the Company Presentation at the Rodman & Renshaw 16th Annual Investment Conference is available at: http://is.gd/y9BcCf About Viggle New York City-based Viggle Inc. is a loyalty marketing company. The Company has developed a loyalty program for television that gives people real rewards for checking into the television shows they are watching on most mobile operating system. Viggle users can redeem their points in the app's rewards catalog for items such as movie tickets, music, or gift cards. Viggle incurred a net loss of $91.40 million on $13.90 million of revenues for the year ended June 30, 2013, as compared with a net loss of $96.51 million on $1.73 million of revenues during the prior year. The Company's balance sheet at March 31, 2014, showed $68.09 million in total assets, $62.79 million in total liabilities, $37.54 million in series A convertible redeemable preferred stock, and a $32.23 million total stockholders' deficit. BDO USA, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2013. The independent auditors noted that the Company has suffered recurring losses from operations and at June 30, 2013, has deficiencies in working capital and equity that raise substantial doubt about its ability to continue as a going concern. W.R. GRACE: S&P Assigns 'BB+' Rating on $1BB Sr. Unsecured Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' senior unsecured debt rating to W. R. Grace & Co.-Conn.'s proposed offering of $1 billion of senior unsecured notes with 7- and 10- year maturities. W. R. Grace & Co.-Conn. is a wholly owned subsidiary of W. R. Grace & Co. (Grace), which will guarantee the notes. The company plans to use the proceeds to settle its deferred payment obligation to the asbestos personal injury trust ($632 million), to fund part of the settlement of the warrant issued to the trust (expected to total $490 million), to repay amounts outstanding under its revolving credit facility, to pay fees and expenses associated with the notes offering, and for general corporate purposes. The company plans to issue the notes under Rule 144A without registration rights. S&P's ratings on Grace, including the 'BBB-' corporate credit rating and its 'BBB-' ratings on the subsidiary's senior secured debt, are unchanged. The 'BB+' rating on the proposed notes (which is one notch below the corporate credit rating) reflects the significant amount of secured debt and other liabilities that rank ahead of them in the capital structure. The outlook is stable. Standard & Poor's ratings on Grace and its subsidiary reflect what S&P considers to be its "satisfactory" business risk profile as a leading producer of refinery and other catalysts and other primarily specialty chemicals and materials and a "significant" financial risk profile. Following the planned debt issuance, S&P believes credit metrics will remain consistent with the "significant" financial risk profile. S&P expects funds from operations to adjusted debt of 20%-30% and adjusted debt to EBITDA of 3x to 4x. RATINGS LIST W. R. Grace & Co. Corporate Credit Rating BBB-/Stable/-- New Rating W. R. Grace & Co.-Conn. $1 Bil. Senior Unsecured Notes* BB+ * Guaranteed by W. R. Grace & Co. Maturities are 7 and 10 years. W.R. GRACE: Lukins & Annis to Get 10% Share of Scott's Fee Award ---------------------------------------------------------------- In the Chapter 11 cases of W.R. Grace & Co., Delaware Bankruptcy Judge Kevin J. Carey adopted the recommendations of the Rule 706 Expert regarding the fee allocation claim of Lukins & Annis, P.S. He ruled that, consistent with the recommendations in the Expert Report, Lukins & Annis is awarded a 10% share of Darrell W. Scott's portion of the Common Fund Fee Award ($667,500). In December 2008, Claimants involved in extensive litigation with Grace regarding Zonolite Attic Insulation filed a motion to approve a class settlement and certification of the ZAI class, which the Court preliminarily granted on January 16, 2009, and finally approved on April 1, 2009. The ZAI Class Settlement was contingent on confirmation of a plan that contained a trust with distribution procedures to effectuate the settlement. The Debtors' First Amended Joint Plan of Reorganization took effect on February 3, 2014. Four days later, the ZAI Class Counsel filed a motion seeking a Common Fund Fee Award of 25% of the first two payments in the class settlement, for a total fee in the approximate amount of $16 million. On February 28, Lukins & Annis filed a partial joinder to the Motion of ZAI Class Counsel for a Common Fund Fee Award, and Counter-Motion to Stay Disbursement of any Common Fund Fee Award Pending Resolution of All Common Fund Fee Allocation Disputes. The Joinder and Counter- Motion consented to the request for the Fee Award, but objected to disbursement of the Fee Award pursuant to the allocation proposed by ZAI Class Counsel, which did not include any allocation for L&A. ZAI Class Counsel proposed the following allocation of the Fee Award: (1) Scott will receive 42.5% of the Fee Award (approximately $6,675,000); (2) Westbrook will receive 42.5% of the Fee Award (approximately $6,675,000); (3) Cabraser will receive 15% of the Fee Award (approximately $2,400,000); (4) McGarvey will receive $250,000 from the Fee Award; and (5) Ness will receive 10 percent of Westbrook's allocation of the Fee Award (approximately $667,500). Lukins & Annis contends that it is entitled to a portion of the Fee Award due to its active involvement in the ZAI matters from their inception until December 31, 2004, when Scott, the attorney who principally was handling the ZAI litigation, left Lukins & Annis to form The Scott Law Group, P.S. Lukins & Annis argues that the firm's efforts contributed to the development of the ZAI litigation. Lukins & Annis stated that it did not have an agreement with Mr. Scott regarding a cost and fee sharing agreement related to the ZAI litigation. On April 3, 2014, the Bankruptcy Court entered an Order approving the Fee Award and reimbursement of ZAI Class Counsels' expenses from the fund created by the ZAI Class Settlement, but requiring the Fee Award to be held in trust pending further order of the Court regarding the Lukins & Annis Joinder and Counter-Motion. Also on April 3, at the request of the parties, the Bankruptcy Court entered an Order appointing Judith K. Fitzgerald as a Rule 706 Expert to issue a report and recommendation regarding the Lukins & Annis Joinder and Counter-Motion. The Rule 706 Order included a schedule for Lukins & Annis to file a motion and accompanying documentation supporting its claim to an allocation of the Fee Award, and for parties to file responses and replies thereto. Thereafter, Judge Fitzgerald had discretion to, inter alia, determine the manner, timing and scope of evidence and other submissions with respect to the allocation dispute. The Rule 706 Order also set a deadline for filing responses to the Expert Report after it was issued by Fitzgerald. On April 18, 2014, Lukins & Annis filed the Motion for an Allocation of the ZAI Class Action Common Fund Fee Award. On April 28, 2014, responses to the Motion were filed by ZAI Class Counsel, the Reorganized Debtors, ZAI Class 7B Trustee, and the Property Damage Future Claimants' Representative. On June 25, 2014, Judge Fitzgerald filed her Expert Report, indicating that: (1) Lukins & Annis did not withdraw from the case "voluntarily" as that term has been explained in applicable case law. (2) Lukins & Annis absorbed the risk of the state court Barbanti litigation, which indirectly led to the ZAI class settlement, and is entitled to a nominal fee but not to reimbursement of expenses. (3) Lukins & Annis efforts contributed an indirect benefit to the ZAI class. (4) Although Class Counsels' allocation of the $16 million fee is entitled to great weight, Lukins & Annis has established an entitlement to a nominal share and, accordingly, Class Counsels' proposed allocation should be adjusted to provide for such share. (5) Alternatively, if the Court finds Lukins & Annis' services did not provide a benefit to the ZAI class sufficient to entitle Lukins & Annis to an allocation of the Common Fund Fee then, similarly, the Bankruptcy Court should find that neither McGarvey nor Ness provided a sufficient benefit to the ZAI class to be entitled to a fee. (6) From the submissions of the parties and review of applicable law, the Court should award Lukins & Annis 10% of Darrell Scott's share of the Common Fund Fee, in the amount of [$667,500]. Judge Fitzgerald further recommended that Lukins & Annis be denied any reimbursement of its costs as no notice was provided to the ZAI class that such a request would be made and no other non-class counsel will receive a disbursement based on costs. On July 7, 2014, ZAI Class Counsel filed a response to the Expert Report, attaching a declaration of Darrell W. Scott, that challenged certain factual findings in the Expert Report regarding Scott's representations to Lukins & Annis about reaching a fee arrangement at a later time as incorrect. Also on July 7, Lukins & Annis filed a response to the Expert Report, asking that the Expert Report's recommendation be revised to provide for an allocation to Lukins & Annis of at least 17.03% of Scott's share of the Common Fund Fee Award, or approximately $1,136,666. Lukins & Annis argues that the Expert Report recognized that it provided an important benefit to the ZAI Class Settlement, but then recommended only a "nominal" allocation to Lukins & Annis from the Fee Award. Lukins & Annis contends that the award does not recognize that it expended approximately 5,602 hours of time, with an actual dollar value of $1,136,666.00 (at historical rates), for investigating, developing, and litigating the state court Barbanti Litigation and the ZAI property damages claims in the bankruptcy proceedings. Lukins & Annis further argues that Fitzgerald gave undue deference to ZAI Class Counsel's proposed allocation of the Fee Award, especially in light of ZAI Class Counsel's unreasonable attempt to completely bar Lukins & Annis from any recovery. Lukins & Annis also argues that the recommended allocation award is not fair and equitable when compared to the proposed allocation to other counsel and the contributions of those firms to the ZAI Class Settlement. The ZAI Class Counsel meanwhile asked the Court to accept Judge Fitzgerald's report and recommendation due to her experience in mass tort bankruptcies and her familiarity with the ZAI litigation. Further, ZAI Class Counsel responds to the comparison in Lukins & Annis' Response between Lukins & Annis' contribution to the ZAI Class Settlement and the work performed by other counsel. ZAI Class Counsel pointed out that Lukins & Annis received $582,005.68 in court-approved post-petition special counsel fees, while the Fee Award represents the only compensation some other attorneys will receive in connection with the ZAI litigation. A copy of Judge Carey's Sept. 3, 2014 Memorandum and Order is available at http://is.gd/0W1ruefrom Leagle.com. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. Grace employs approximately 6,500 people in over 40 countries and had 2012 net sales of $3.2 billion. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). The Debtors are represented by Adam Paul, Esq., and John Donley, P.C., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois; Roger Higgins, Esq., at The Law Offices of Roger Higgins, in Chicago, Illinois; and Laura Davis Jones, Esq., James E. O'Neill, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Delaware. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. The FCR is represented by Orrick Herrington & Sutcliffe LLP as counsel; Phillips Goldman & Spence, P.A., as Delaware co-counsel; and Lincoln Partners Advisors LLC as financial adviser. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. W.R. Grace defeated four appeals from approval of the Plan. A fifth appeal was by secured bank lenders claiming the right to $185 million of interest at the contractual default rate. Pursuant to a settlement announced in December 2013, lenders are to receive $129 million in settlement of the claim for additional interest. W.R. GRACE: Moody's Hikes Rating on $1.5BB 1st Lien Debt to Ba1 ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 corporate family rating (CFR) and Ba2-PD probability of default rating (PDR) of W. R. Grace & Co.?Conn. (Grace). Moody's also upgraded to Ba1 from Ba2 the ratings on Grace's outstanding $1.55 billion first-lien senior secured credit agreement. The first-lien senior secured credit agreement consists of (1) a $400 million revolving credit facility due 2019; (2) a $900 million term loan facility due 2021; and (3) a $250 million delayed-draw term loan due 2021. Concurrently, Moody's has assigned a Ba3 rating to Grace's proposed $1.0 billion of senior unsecured notes due in 2021 and 2024. Additionally, Moody's has affirmed Grace's SGL-2 speculative grade liquidity rating. The outlook on the ratings is stable. Grace has announced that the proceeds from the new senior unsecured notes will primarily be used to (1) terminate its deferred payment obligations for asbestos-related personal injury claims of approximately $632 million; (2) partially fund the settlement of approximately $490 million of warrants also issued for asbestos-related personal injury claims (Moody's understands that the remainder of the warrants will be settled with delayed- draw term loan due 2021); (3) repay approximately $50 million outstanding under its revolving credit facility; and (4) pay related transaction fees and expenses. "Grace's agreement to terminate all of its deferred payment obligations for asbestos-related personal injury claims is credit positive, despite the increase in near-term leverage," says Anthony Hill, a Moody's Vice President - Senior Credit Officer and lead analyst for Grace. Below is a full list of Grace ratings affected by the actions. Affirmations: Issuer: W.R. Grace & Co.-Conn. Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Speculative Grade Liquidity Rating, Affirmed SGL-2 Upgrades: Senior Secured Bank Credit Facilities, Upgraded to Ba1 from Ba2 LGD2 Assignments: Senior Unsecured Notes due 2021, Assigned Ba3 LGD5 Senior Unsecured Notes due 2024, Assigned Ba3 LGD5 Ratings Rationale Grace emerged from bankruptcy earlier this year via a Chapter 11 reorganization plan that resolved all asbestos-related personal injury and property damage claims, and any future asbestos claims. The court-approved exit plan established a trust under Section 524(g) of the US Bankruptcy Code to resolve personal injury asbestos claims. It was this trust that recently reached the settlement agreement with Grace to terminate all of its deferred payment obligations for asbestos-related personal injury claims for a cash consideration of $632 million. Although the settlement increases leverage, it is credit positive for Grace. Moody's estimates that Grace will realize more than $200 million in cash savings over the life of the original obligation installment period, which was $1.55 billion, payable in installments from 2019 through 2033. Ultimately, by eliminating the deferred payment obligation, and outstanding warrants (issued to the personal injury trust), from its balance sheet, Grace has now (1) simplified its capital structure; (2) removed the last bit of legal uncertainty around its payment obligations for asbestos- related personal injury claims; and (3) improved its long-term cash position. However, over the short-term, Grace's Ba2 CFR will be stressed by the company's higher financial leverage. Moody's now expects the company's leverage will be around 3.8x debt/EBITDA (up from the rating agency's original expectation of 3.2x debt/EBITDA, and on a Moody's-adjusted basis) for the fiscal year-end (FYE) December 2014 and pro forma for the new notes. While Moody's expects the company to reduce leverage over the coming quarters, Grace is significantly exposed to a slowly recovering US construction market and a weak European chemicals trading environment that is expected to persist through at least 2015. Furthermore, Moody's believes that the move to lighter refinery feedstocks in US will continue to pressure revenue generation and profitability at Grace's catalyst business, the company's largest segment which generates over two-thirds of its total EBITDA. Yet for all of these concerns, the Ba2 CFR also reflects Grace's strength as a leading specialty chemicals producer for the global refining catalyst, packaging, and construction industries, with a track record of maintaining solid market share positions across a diverse product line. The rating also acknowledges Grace's proven ability to generate solid cash flows through all global economic cycles, and its resilient business model, solid operating performance, and ability to pass through material and production costs while simultaneously improving marginal income. Ultimately, the rating agency continues to expect Grace's operating performance to exhibit greater stability than most other Ba-rated chemicals companies over the coming quarters/ years. Moody's believes that Grace's liquidity, pro forma the transaction, will comfortably cover its near-term requirements. Pro forma for the transaction and by FYE December 2014, Moody's expects the company to exhibit an adjusted cash balance of approximately $550 million. Internally generated cash flow and the undrawn $400 million revolving credit facility will cover the company's ongoing basic cash needs, such as debt service and amortization, working capital needs, and expected capital expenditures (including expansionary capital investments). Using Moody's Loss Given Default (LGD) methodology, the PDR is equal to the CFR, based on a 50% recovery rate, primarily due to the covenant-lite structure of the senior secured credit facilities and the addition of $1.0 billion of senior unsecured notes to the company's capital structure. Also in accordance with Moody's LGD methodology, and pro forma for the addition of the new senior unsecured notes to Grace's capital structure, the company's revolving credit facility and other first-lien senior secured credit facilities have been upgraded to Ba1 (from Ba2), one notch above the Ba2 CFR. This is due to the first-lien senior secured facility's priority over the $1.0 billion senior unsecured notes, which are rated Ba3, one notch below the CFR due to their lower priority in the capital structure. Additionally, Grace will no longer have the deferred payment obligations (for asbestos-related personal injury claims), or the warrants (issued to the personal injury trust) in its capital structure. In Moody's view, the elimination of these liabilities, now generally replaced by the new senior unsecured notes, increases the certainty that Grace's US-based collateral can adequately back the company's senior secured credit facilities. Outlook The stable outlook reflects Moody's expectation that Grace's credit metrics will improve over the coming quarters, in line with the rating agency's expectation of continued solid operational performance. What Could Change The Rating Up/Down Moody's would consider upgrading Grace's rating if the company (1) has no new or significant claims related to legacy liabilities made against it; (2) maintains conservative financial policies with respect to acquisitions and shareholder distributions; and (3) continues to meet, or exceed, Moody's operational performance expectations post bankruptcy and over the coming quarters. Quantitatively, Moody's would consider upgrading Grace's ratings if the company's Moody's-adjusted (1) debt/EBITDA ratio is around 3.0x; (2) EBITDA/interest expense ratio is above 6.0x; and (3) retained cash flow/debt ratio is above 20% -- all on a sustained basis. Conversely, Moody's could downgrade Grace if the company's financial policies, with respect to acquisitions and shareholder distributions, become aggressive; or the company's operating performance exhibits any sign of sustained weakness. Quantitatively, Moody's would consider downgrading Grace's ratings if the company's Moody's-adjusted (1) debt/EBITDA ratio increases to around 4.0x; (2) EBITDA/interest expense ratio falls below 4.0x; or (3) retained cash flow/debt ratio falls to around 15%. Principal Methodology The principal methodology used in this rating was the Global Chemicals Industry Methodology published in December 2013. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA, published in June 2009. Headquartered in Maryland, USA, W. R. Grace & Co. is the ultimate parent of W. R. Grace & Co.--Conn. Grace is a manufacturer of specialty chemicals and materials with operations in over 40 countries. Grace has three major reporting segments: (1) catalysts technologies (37% of revenues for the last twelve months ending June 2014); (2) materials technologies (29%); and (3) construction products (34%). Moody's projects Grace's FYE December 2014 revenues and Moody's-adjusted EBITDA will be approximately $3.3 billion and $736 million, respectively. WAFERGEN BIO-SYSTEMS: Has $2.1-Mil. Net Loss in June 30 Quarter --------------------------------------------------------------- WaferGen Bio-systems, Inc., filed its quarterly report on Form 10- Q, disclosing a net loss of $2.1 million on $1.73 million of total revenue for the three months ended June 30, 2014, compared with a net loss of $3.16 million on $246,248 of total revenue for the same period in 2013. The Company's balance sheet at June 30, 2014, showed $9.41 million in total assets, $7.69 million in total liabilities and total stockholders' equity of $1.72 million. The Company continues to face significant risks associated with the successful execution of its strategy given the current market environment for similar companies and failure to generate sufficient revenues or raise additional capital could have a material adverse effect on the Company's ability to continue as a going concern and to achieve its intended business objectives. These facts raise substantial doubt about the Company's ability to continue as a going concern, and there can be no assurance that the Company will be successful in its efforts to enhance its liquidity situation, according to the regulatory filing. A copy of the Form 10-Q is available at: http://is.gd/xi6gU1 About WaferGen Bio-systems Fremont, California-based WaferGen Bio-systems, Inc., engages in the development of systems for gene expression quantification, genotyping and stem cell research. Since 2008, the Company's primary focus has been on the development, manufacture and marketing of its SmartChip System, a genetic analysis platform used for profiling and validating molecular biomarkers in the life sciences and pharmaceutical drug discovery industries. WaferGen reported a net loss attributable to common stockholders of $17.71 million in 2013, following a net loss attributable to common stockholders of $8.97 million in 2012. SingerLewak LLP, in San Jose, California, issued a "going concern" qualification on the consoliated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred operating losses and negative cash flows from operating activities since inception which raise substantial doubt about the Company's ability to continue as a going concern. WATERSTONE AT PANAMA: Seeks Final Decree & Final Accounting Report ------------------------------------------------------------------ Waterstone at Panama City has filed before the Bankruptcy Court an application for final decree closing its Chapter 11 case and for final accounting report of the case. As stated in the application, all the claims or interests have been surrendered or released in accordance with the provisions of the debtor's bankruptcy-exit plan. In addition, substantially all the property of the debtor has been transferred. Lastly, payment to creditors and other interested parties have been completed. Waterstone at Panama City is represented by: William L. Biggs, Esq. GROSS & WELCH, P.C., L.L.O. 2120 South 72nd Street, #1500 Omaha, NE 68124 Tel: (402) 392-1500 Fax: (402) 392-1538 E-mail: bbiggs@grosswelch.com About Waterstone at Panama City Apartments, LLC Omaha, Nebraska-based Waterstone at Panama City Apartments, LLC, is a single-asset real estate entity located in Panama City, Florida, and owned by a non-profit corporation called Tapestry Group, Inc., which is the sole member of Waterstone at Panama City Apartments, LLC. Waterstone at Panama City Apartments filed for Chapter 11 protection (Bankr. D. Neb. Case No. 13-80751) on April 9, 2013. Bankruptcy Judge Timothy J. Mahoney presides over the case. William L. Biggs, Jr., Esq., and Frederick D. Stehlik, Esq., at Gross & Welch P.C., L.L.O., represent the Debtor in its restructuring efforts. The Debtor disclosed $26,159,064 in assets and $26,120,989 in liabilities as of the Chapter 11 filing. The petition was signed by Edward E. Wilczewski, manager. Mr. Wilczewski is presently the interim president of Tapestry. The Bankruptcy Court confirmed on March 20, 2014, a plan of liquidation for the Debtor. A full-text copy of the Disclosure Statement explaining the Plan filed by the Debtor, dated Jan. 7, 2014, is available for free at: http://bankrupt.com/misc/WATERSTONEATPANAMAds.pdf WESTLAKE VILLAGE: Files for Chapter 11 in California ---------------------------------------------------- Westlake Village Property, LP, sought Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 14-bk-11980) in Santa Barbara, California, on Sept. 9, 2014. The case is assigned to Judge Deborah J. Saltzman. The Westlake Village, California-based entity, Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated $10 million to $50 million in assets and $1 million to $10 million in debt. The Company is represented by Leslie A Cohen, Esq., at Leslie Cohen Law PC, in Santa Monica, California, as counsel. The schedules of assets and liabilities and the statement of financial affairs are due Sept. 23, 2014. An affiliate, Mid-Wilshire Property, LP sought bankruptcy protection on Sept. 7, 2014 (Case No. 14-11960), which case is also pending before Judge Saltzman. WINDSOR QUALITY: S&P Puts 'B+' Corp. Credit Rating on Watch Pos. ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B+' corporate credit rating, on Windsor Quality Food Co. Ltd. on CreditWatch with positive implications, meaning that S&P could either raise or affirm the ratings following the completion of its review. The CreditWatch placement follows Ajinomoto Co. Inc.'s (AA- /Stable/A-1+) announcement that will be acquiring Windsor's frozen food division for about $800 million. "We believe that Windsor's credit profile will improve with the acquisition by higher-rated Ajinomoto and that Windsor will benefit from increased operating scale and international diversity, as well as being part of the larger and financially stronger Ajinomoto," said Standard & Poor's credit analyst Bea Chiem. As of June 28, 2014, the company's lease-adjusted debt outstanding was approximately $375 million. S&P will withdraw its issue-level ratings on Windsor at the closing of the transaction when the debt is repaid. XZERES CORP: Appoints Michael Williams as Chief Financial Officer ----------------------------------------------------------------- XZERES Corp. has appointed R. Michael Williams as chief financial officer, succeeding Steven Shum who has been appointed chief operating officer and who will remain a company director. Mr. Shum resigned as the Company's CFO. His resignation was not a result of any disagreement with the Company. Under his new management role, Mr. Shum will focus on strategic initiatives, general operations, as well as support key sales activities around the world. "We welcome Mike's extensive leadership in finance and accounting for publicly and privately held companies with global presence," said David Hofflich, CEO of XZERES. "Mike's background and skill set will further support XZERES' recently extended product offerings and our growth in the domestic and international markets. We thank Steve for his contributions as CFO, which have helped finance and build XZERES into a global leader in distributed wind. We look forward to his continued leadership as our new COO." "Given our increasing global sales activities, XZERES is now at a point that it needs to expand its leadership team to support sales of our UK FITCO program, our sales network in Japan - pending ClassNK certification, and other large scale sales initiatives that we expect to complete," continued Hofflich. "We will also continue to leverage our international sales team to pursue various market opportunities, including India, Philippines, and Vietnam, as well as in Europe and the Americas." Williams brings more than 30 years of experience in finance and accounting for publicly traded and privately held manufacturing and distribution companies. He previously served as CFO of Dr. Bott, a distributor for digital lifestyle accessories for Apple devices. Prior to Dr. Bott, he was vice president of finance at Sonetics Corporation, a leader in innovative and proven team communication systems for high-noise environments. He has also served as CFO of Silver Eagle Manufacturing Co., the global leader in light tactical trailers and converter dollies. Williams is a Certified Public Accountant, Certified Management Accountant and Chartered Global Management Accountant. He holds a MBA in IT and Finance from the University of Portland and a Bachelor of Science in Business Administration from Oregon State University. Mr. Williams' compensation will be $135,000 in annual salary and he will be issued Stock Options. About XZERES Corp. Headquartered in Wilsonville, Oregon, XZERES Corp. designs, develops, and markets distributed generation, wind power systems for the small wind (2.5kW-100kW) market as well as power management solutions. XZERES reported a net loss of $9.49 million for the year ended Feb. 28, 2014, as compared with a net loss of $7.59 million for the year ended Feb. 28, 2013. The Company's balance sheet at May 31, 2014, showed $6.80 million in total assets, $14.43 million in total liabilities and a $7.63 million total stockholders' deficit. Silberstein Ungar, PLLC, in Bingham Farms, Michigan, issued a "going concern" qualification on the consolidated financial statements for the year ended Feb. 28, 2014. The independent auditors noted that the Company has incurred losses from operations, has negative working capital, and is in need of additional capital to grow its operations so that it can become profitable. These factors raise substantial doubt about the Company's ability to continue as a going concern. YSC INC: Faces Opposition to Plan Confirmation ---------------------------------------------- Judge Marc Barreca of the U.S. Bankruptcy Court for the Western District of Washington at Seattle, on Aug. 8, 2014, approved the third amended disclosure statement explaining YSC Inc.'s Chapter 11 Plan of Reorganization, allowing the company to proceed with the solicitation of votes for the plan. Majority of YSC's creditors voted in favor of the Plan, except for Whidbey Island Bank, n/k/a Heritage Bank, which holds an $11,356,973 secured claim; Marlin Business Bank, which holds a $6,943 secured claim; and Ramada Worldwide, Inc., which holds a $92,633 claim. The Debtor believes that confirmation of its Plan under Section 1129(b) of the Bankruptcy Code is possible given that the provisions of the section of the Bankruptcy Code are met. Ramada, which operates a guest-lodging facility franchise system, complained that the Plan fails the confirmation standards of Section 1129 and was not proposed in good faith because the Debtor is proposing a painfully long cure to Ramada lasting a decade and also proposes relatively small payments to general unsecured creditors. The Debtor, in response to Ramada's plan confirmation objection, tells the Court that it is in the process of attempting to reach a settlement with Ramada regarding the repayment of its arrears, and is hopeful that an agreement will be reached prior to the confirmation hearing. A full-text copy of the Disclosure Statement dated July 28, 2014, is available at http://bankrupt.com/misc/YSCds0728.pdf Ramada is represented by Mark D. Northrup, Esq. -- mnorthrup@grahamdunn.com -- at Graham & Dunn PC; and Michael J. Connolly, Esq., at Forman Holt Eliades & Youngman LLC, in Paramus, New Jersey. About YSC Inc. YSC Inc., owner of a Comfort Inn in Federal Way, Washington, and a Ramada Inn in Olympia, Washington, filed a petition for Chapter 11 protection (Bankr. W.D. Wash. Case No. 13-17946) on Aug. 30, 2013, in Seattle. The owner listed the hotels as worth $17.9 million. Total debt is $18.5 million, including $18 million in secured debt. Among mortgage holders, Whidbey Island Bank is owed $13.3 million. Bankruptcy Judge Marc L. Barreca presides over the case. Wells and Jarvis, P.S., serves as YSC's counsel. Scott Hutchison, Esq., represents Whidbey Island Bank. YSC's principals Sang Kil Yim and Chan Sook Yim filed for personal Chapter 11 bankruptcy (Case No. 14-10897). ZOGENIX INC: Presented at Morgan Stanley Conference --------------------------------------------------- Zogenix, Inc.'s management had presented at the Morgan Stanley Global Healthcare Conference 2014 in New York, on Sept. 10, 2014. A copy of the slides used at the presentation is available at: http://is.gd/147d9F 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. The Company's balance sheet at June 30, 2014, the Company had $133.29 million in total assets, $64.98 million in total liabilities and $68.31 million in total stockholders' equity. 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. * 9th Circ: Ch.13 Debtor Can Recoup Atty. Fees From Stay Appeal --------------------------------------------------------------- Law360 reported that the U.S. Court of Appeals for the Ninth Circuit determined that a Chapter 13 debtor should be repaid for attorneys' fees incurred defending a creditor's appeal of a bankruptcy court ruling, finding the fees were recoverable because they constituted actual damages resulting from a violation of the automatic stay. According to the report, majority of the three- judge panel said the Bankruptcy Code allows parties injured by a stay violation to recover actual damages and the fees at issue are not precluded by Ninth Circuit precedent limiting the range of those damages. The case is America's Servicing Co. v. Irene Michelle Schwartz- Tallard, case number 12-60052, in the U.S. Court of Appeals for the Ninth Circuit. * St. Louis Is Seventh Circuit to Allow Chapter 13 Lien Stripping ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, and Sherri Toub, a Bloomberg News writer, reported that the U.S. Court of Appeals in in St. Louis became the seventh federal circuit court to rule that a bankrupt in Chapter 13 can strip off an underwater subordinate mortgage. According to the report, no appeals court have held otherwise. The new case is Minnesota Housing Finance Agency v. Schmidt (In re Schmidt), 13-2447, U.S. Court of Appeals for the Eighth Circuit (St. Louis). * Lawmakers Seek to Smooth Banks' Path Through Bankruptcy --------------------------------------------------------- Victoria McGrane, writing for The Wall Street Journal, reported that a bipartisan bill approved by a congressional committee to amend the U.S. bankruptcy code underscores a postcrisis conundrum: Big banks must demonstrate they can be dismantled in bankruptcy, but experts and some lawmakers say the current code is inadequate to handle the failure of a major financial firm. Lawmakers are moving to address issues they say must be fixed if the bankruptcy law "can expeditiously restore trust in the financial marketplace as soon as possible after a major collapse of a financial institution," the Journal said, citing Rep. John Conyers, the top Democrat on the House Judiciary Committee and a sponsor of the bill. * Quiznos, Cold Stone Creamy Among Brands with High Default Rates ----------------------------------------------------------------- Sarah E. Needleman and Coulter Jones, writing for The Wall Street Journal, reported that Quiznos, Cold Stone Creamery, Planet Beach Franchising and Huntington Learning Centers Inc. ranked among the 10 worst franchise brands in terms of Small Business Administration loan defaults. According to the report, citing the newspaper's analysis of charge-offs of all SBA-backed franchise loans in the past decade, franchisees of the 10 brands in the ranking defaulted at more than double the rate for SBA borrowers who invested in all other chains. * U.S. Risk Council Discusses Oversight of Nonbank Firms -------------------------------------------------------- Reuters reported that the U.S. systemic risk council will meet to discuss naming nonbank financial firms for tougher regulatory oversight, the U.S. Treasury Department said. According to the report, the Financial Stability Oversight Council appears close to deciding whether it believes insurer Metlife Inc. is "systemically" risky, or so big its hypothetical failure could destabilize global financial markets. * BOOK REVIEW: Risk, Uncertainty and Profit ------------------------------------------- Author: Frank H. Knight Publisher: Beard Books Softcover: 381 pages List Price: $34.95 Review by Gail Owens Hoelscher Order your personal copy today at http://is.gd/YrQUHR The tenets Frank H. Knight sets out in this, his first book, have become an integral part of modern economic theory. Still readable today, it was included as a classic in the 1998 Forbes reading list. The book grew out of Knight's 1917 Cornell University doctoral thesis, which took second prize in an essay contest that year sponsored by Hart, Schaffner and Marx. In it, he examined the relationship between knowledge on the part of entrepreneurs and changes in the economy. He, quite famously, distinguished between two types of change, risk and uncertainty, defining risk as randomness with knowable probabilities and uncertainty as randomness with unknowable probabilities. Risk, he said, arises from repeated changes for which probabilities can be calculated and insured against, such as the risk of fire. Uncertainty arises from unpredictable changes in an economy, such as resources, preferences, and knowledge, changes that cannot be insured against. Uncertainty, he said "is one of the fundamental facts of life." One of the larger issues of Knight's time was how the entrepreneur, the central figure in a free enterprise system, earns profits in the face of competition. It was thought that competition would reduce profits to zero across a sector because any profits would attract more entrepreneurs into the sector and increase supply, which would drive prices down, resulting in competitive equilibrium and zero profit. Knight argued that uncertainty itself may allow some entrepreneurs to earn profits despite this equilibrium. Entrepreneurs, he said, are forced to guess at their expected total receipts. They cannot foresee the number of products they will sell because of the unpredictability of consumer preferences. Still, they must purchase product inputs, so they base these purchases on the number of products they guess they will sell. Finally, they have to guess the price at which their products will sell. These factors are all uncertain and impossible to know. Profits are earned when uncertainty yields higher total receipts than forecasted total receipts. Thus, Knight postulated, profits are merely due to luck. Such entrepreneurs who "get lucky" will try to reproduce their success, but will be unable to because their luck will eventually turn. At the time, some theorists were saying that when this luck runs out, entrepreneurs will then rely on and substitute improved decision making and management for their original entrepreneurship, and the profits will return. Knight saw entrepreneurs as poor managers, however, who will in time fail against new and lucky entrepreneurs. He concluded that economic change is a result of this constant interplay between new entrepreneurial action and existing businesses hedging against uncertainty by improving their internal organization. Frank H. Knight has been called "among the most broad-ranging and influential economists of the twentieth century" and "one of the most eclectic economists and perhaps the deepest thinker and scholar American economics has produced." He stands among the giants of American economists that include Schumpeter and Viner. His students included Nobel Laureates Milton Friedman, George Stigler and James Buchanan, as well as Paul Samuelson. At the University of Chicago, Knight specialized in the history of economic thought. He revolutionized the economics department there, becoming one the leaders of what has become known as the Chicago School of Economics. Under his tutelage and guidance, the University of Chicago became the bulwark against the more interventionist and anti-market approaches followed elsewhere in American economic thought. He died in 1972. ********* 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, Psyche A. Castillon, 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 ***