/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/150107.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 7, 2015, Vol. 19, No. 7 Headlines 1910 PARTNERS: Case Summary & 15 Largest Unsecured Creditors ALICEVILLE GOVERNMENTAL: S&P Lowers Rating on 2011 Bonds to 'CCC-' ALLSTATE FINANCIAL: Case Summary & 2 Top Unsecured Creditors AMERICAHOMEKEY INC: Court Rules on Summary Judgment Bids BAYOU SHORES: Medicaid Says Nursing Home's Plan Isn't Feasible BELLMARK RECORDS: Cir. Ct. Affirms Verdict in Rap Song Rights Suit BLUE STAR PROPERTIES: Files for Chapter 11 Bankruptcy CAESARS ENTERTAINMENT: Facing Trial on Receiver Appointment CANTERA COURT COMPLEX: Voluntary Chapter 11 Case Summary CHAM RESTAURANT: Files for Chapter 11 Bankruptcy Protection COLDWATER CREEK: Asks to Sell Its Piece of $6B Swipe Fee Deal COMMUNITY BANK: 11th Circ. Says Cases Void Insurance Exclusion COUNTRYWIDE FIN'L: Mortgage Misdeeds Whistle-Blower to Get $57MM CRS HOLDING: Converts Ch. 11 Case to Ch. 7 Liquidation CYCLONE POWER: Posts $1.3 Million Net Income in 3rd Quarter DEB STORES: Gets Nod for Bankruptcy Auction Plans DEB STORES: U.S. Trustee, Landlords Oppose Bankruptcy Sale Plans DENDREON CORP: Proposed Incentive Plan Approved DENDREON INC: Meeting of Creditors Continued Until Jan. 14 DERMA PENN: Ch. 11 Case for Skin Treatment Co. Thrown Out DIOCESE OF SPOKANE: Paine Hamblen Malpractice Suit Heads to Trial EDNEAVOUR INT'L: Court Sets January 26 as Claims Bar Date FL 6801: Takes On Homeowners' Ch. 11 Claims FREEDOM INDUSTRIES: Exec Says Spill Exposure DQs Prosecutors GENERAL MOTORS: Merrill Lynch Fined $1.9M Over Debt Sales GENERAL MOTORS: Trust Says Defect Liability Lies with New Co. GEORGE BAVELIS: Invited Error Doctrine Overrides Non-Core Argument GREAT NORTHERN PAPER: Has Deal Giving Maine Town Water Treatment GREAT WESTERN: Case Summary & 6 Largest Unsecured Creditors GT ADVANCED: Excess Assets Sale Procedures Approved HEI INC: Proposes Fredrikson & Byron as Bankr. Counsel HEI INC: Wants to Keep Winthrop & Weinstine as Corporate Counsel HIGHER LIVING CHRISTIAN: Case Summary & 20 Top Unsec. Creditors INDEX RECOVERY: Confirms Chapter 11 Liquidating Plan INVERSIONES ALSACIA: Plan Supplement Filed J & B RESTAURANT: Voluntary Chapter 11 Case Summary LEHMAN BROTHERS: Trustee Seeks to Recover $98M From Wells Fargo LILY GROUP: Gets Court Order Protecting Confidential Info MONROE HOSPITAL: Gets Court OK to Hire J. Roche as CRO MONTREAL MAINE: New Railroad Rebuilding Business after Disaster MONTREAL MAINE: Rail Crash Victims Keep $3.8 Million of Insurance NNN 1818 MARKET STREET: Schedules & Statement Due Jan. 20 NNN 1818 MARKET: Case Summary & 18 Largest Unsecured Creditors NSB ADVISORS: Voluntary Chapter 11 Case Summary ONE SOURCE INDUSTRIAL: Mgt. Provider Follows Parent to Bankruptcy ONE SOURCE INDUSTRIAL: Two Debtors Seek Joint Administration ONE SOURCE INDUSTRIAL: Wants Amegy Factoring Agreement Extended OPEN TEXT: S&P Rates New $600MM Sr. Unsecured Notes 'BB' PALOMBA WEINGARTEN: Firm Hit With $129M Legal Malpractice Suit PEREGRINE FINANCIAL: US Bank Settles With CFTC PHH CORP: Fitch Affirms Then Withdraws 'BB-' Long-term IDR PINKBERRY MIDATLANTIC: Files for Chapter 7 Liquidation PRETTY GIRL: Meeting of Creditors Set for Feb. 26 PUERTO RICO ELECTRIC: To Seek Extension to Bondholder Agreement QUANTUM FOODS: Committee Seeks Approval to Settle Avoidance Claims RADIOSHACK CORP: Kept Alive by $25 Billion of Swaps Side Bets RIDGEFIELD CHRISTIAN: Case Summary & 2 Top Unsecured Creditors RLJ ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors ROTHSTEIN ROSENFELDT: Trustee Cleared to Distribute $13M In Claims SAINT MICHAEL MOTOR: Bid to Withdraw Bankruptcy Reference Nixed SAMUEL WYLY: Judge Won't Expand $188M Judgment In Fraud Case SAN BERNARDINO, CA: City Council Now Involved in Plan Discussions SANDRINE'S LIMITED: Can Proceed with Jan. 28 Auction SEARS METHODIST: Reaches Agreement With Texas Veterans Land Board SENTINEL MANAGEMENT: Feds Seek Stiff Sentence For 'Greedy' Exec SOURCE HOME: Gets Approval of $675,000 Warn Act Settlement SOUTH EDGE: C&S Can't Recover From Estate, 9th Circuit Says SOVEREIGN ASSETS: Liquidators Win U.S. Court Protection T-L BRYWOOD: Has Access to RCG-KC's Cash Collateral Until Jan. 31 TAMRAC INC: Former Bag Maker Confirms Ch. 11 Plan of Liquidation THQ INC: Estate Launches Avoidance Suits to Claw Back $9M TLO LLC: Shareholders to Recover More Than $43 Million TROPICANA ENTERTAINMENT: Judge Resolves Fee Allocation Dispute TRUMP ENTERTAINMENT: Has Until April 7 to Remove Actions ULTIMATE NUTRITION: U.S. Trustee Appoints Creditors' Committee VALLEY VILLAGE: Case Summary & 7 Largest Unsecured Creditors VARIANT HOLDING: Stipulation Reached on The Oaks' Properties VISUALANT INC: Extends CEO Notes Due Date to March 2015 [*] BofA Sued by Credit Union Regulator for MBS Oversight [*] Ocwen Financial Pact Compliance under Fire [*] U.S. Agency Probes Currency Exchange Site That Vanished w/ Cash ********* 1910 PARTNERS: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: 1910 Partners, a Hawaii limited partnership 11921 Love Orchid Lane Las Vegas, NV 89138 Case No.: 15-00009 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court District of Hawaii (Honolulu) Judge: Hon. Lloyd King Debtor's Counsel: Chuck C. Choi, Esq. WAGNER CHOI & VERBRUGGE 745 Fort Street, Suite 1900 Honolulu, HI 96813 Tel: 808-533-1877 Fax: 808-566-6900 Email: cchoi@hibklaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Bruce Stark, authorized representative. A list of the Debtor's 15 largest unsecured creditors is available for free at http://bankrupt.com/misc/hib15-00009.pdf ALICEVILLE GOVERNMENTAL: S&P Lowers Rating on 2011 Bonds to 'CCC-' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its rating one notch, to 'CCC-' from 'CCC', on Aliceville Governmental Utilities Services Corp. (GUSC), Ala.'s series 2011 bonds, issued for its Federal Bureau of Prisons (FBOP) project. The rating remains on CreditWatch with negative implications. "The current rating is based on a series of draws on the debt service reserve fund (DSRF) in August 2013 and again in February and August 2014, almost completely exhausting the fund," said Standard & Poor's credit analyst Theodore Chapman. "Absent certainty that sufficient funds will be with the trustee by the Feb. 1, 2015, payment date, we would likely lower the rating to no better than 'CC', then to 'D' once a default has occurred." Simply resolving the ongoing rate dispute between the GUSC and the FBOP - for which the corporation issued the bonds to fund the construction of water and sewer facilities for a federal correctional institute near the city of Aliceville – would not necessarily ensure enough money on hand to satisfy the upcoming payment of approximately $193,000. Even if ongoing revenues from operations would be enough to satisfy the Feb. 1, 2015, payment, S&P views the ability to make the Aug. 1, 2015 principal and interest payment as doubtful assuming the current cash flows of the project. The GUSC has approximately $8.375 million in outstanding revenue bonds related o the FBOP project. Following the disclosed draw of $835,079.24 from the DSRF to make the August 2014 payment, the reserve fund has by Standard & Poor's calculation been nearly depleted and would be insufficient by itself to meet the Feb. 1, 2015, interest payment absent sufficient ongoing revenues, likely creating a default. The DSRF was originally funded with bond proceeds in the amount of maximum annual debt service, or $1.43 million. By Standard & Poor's calculation, the DSRF's current balance is less than $55,000. S&P understands that ongoing discussions could address both parties' concerns. However, the original projections assumed that ongoing cash from operations would be sufficient to cover all revenue requirements, including debt service, and that revenues plus the liquidation of the DSRF would be used to satisfy the final payment in 2021, not to cover revenue shortfalls that began in August 2013, followed by an additional draw in February 2014 as well as the most recent unplanned use of the DSRF. The trust indenture also establishes that the DSRF be replenished, but is silent on the maximum number of months by which the replenishment must be completed. The facility was constructed to help relieve systemwide overcrowding among the federal female inmate population. The Aliceville location was designed to house up to 1,500 medium-security federal inmates. Plans in early 2013 to transfer about 1,100 inmates from a Connecticut facility to the Aliceville site were delayed after a number of elected officials asked the U.S. Department of Justice to reconsider the transfer. The Aliceville facility did not receive its first inmates (about 100) until November 2013. While it currently is near full capacity, the delay led the GUSC to exercise what it deems as its rights under the service contract to increase rates to the prison, without limit, to generate sufficient revenues to cover operations and debt service. GUSC officials also could suspend service to the facility but have not done so. S&P understands that while the FBOP continues to challenge the rate increase, it is making current payments to the GUSC. The amount being paid, however, is at the rate the FBOP believes to be correct, not at the higher rate GUSC is billing. The GUSC constructed the water and sewer facilities specifically to serve the prison. The city of Aliceville operates and manages the FBOP-related water and sewer utilities for the GUSC, separate and apart from the city's own infrastructure. The dispute does not have any recourse to the city of Aliceville's own utility revenue bonds, which are secured by the city's own customer base. ALLSTATE FINANCIAL: Case Summary & 2 Top Unsecured Creditors ------------------------------------------------------------ Debtor: Allstate Financial Group, Inc. 14241 NE Woodinville Duvall Rd., # 434 Woodinville, WA 98072 Case No.: 15-10041 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Western District of Washington (Seattle) Debtor's Counsel: Jacob D DeGraaff, Esq. HENRY DEGRAAFF & MCCORMICK PS 1833 N 105th St Ste 200 Seattle, WA 98133 Tel: 206-330-0595 Email: mainline@hdm-legal.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by John Michael, CEO. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/wawb15-10041.pdf AMERICAHOMEKEY INC: Court Rules on Summary Judgment Bids -------------------------------------------------------- District Judge Jane J. Boyle in Dallas, Texas (1) granted in part and denied in part Plaintiffs Kimberly Hoffman and Patti Pate-Schnure's Motion for Summary Judgment Against AmericaHomeKey, Inc. and Lane Terrell; (2) denied Plaintiffs' Motion for Summary Judgment Against Weststar Mortgage Corporation; and (3) denied Weststar's Motion for Summary Judgment Against Plaintiffs. The lawsuit, KIMBERLY HOFFMAN and PATTI PATE-SCHNURE, Plaintiffs, v. AMERICAHOMEKEY, INC., et al., Defendants, CIVIL ACTION NO. 3:12-CV-3806-B (N.D. Tex.), arises out of a dispute over certain bonuses that AHKI allegedly owed, but failed to pay, the Plaintiffs and the subsequent sale of AHKI's assets to Weststar. AHKI was a financial institution that made loans to consumers who wanted to buy houses. AHKI made its profits by originating or purchasing mortgage loans and then selling those mortgage loans to buyers in the secondary market. From the time of its inception in 2000 through its sale to Weststar in January 2012, AHKI maintained relationships with multiple warehouse lenders, including GMAC Mortgage and Countrywide/Bank of America. From 2005 until 2011, however, AHKI's primary warehouse lender was Countrywide/Bank of America, which at one point in time funded 70% to 80% of the home loans originated by AHKI. A copy of the Court's Dec. 22, 2014 Memorandum Order and Opinion is available at http://is.gd/aYm0Y3from Leagle.com. In 2011, AHKI hired John Krugh, an attorney who had previously handled some small legal matters for AHKI and worked as General Counsel for Perry Homes, to prepare AHKI for going into Chapter 11 bankruptcy. The Company later struck a deal to sell its assets to Weststar. BAYOU SHORES: Medicaid Says Nursing Home's Plan Isn't Feasible -------------------------------------------------------------- Katy Stech, writing for Daily Bankruptcy Review, reported that Medicaid regulators told a bankruptcy judge that the Rehabilitation Center of St. Petersburg can't survive without the government program's promise to pay for low-income patients, making the Florida nursing home's proposed reorganization impossible. According to the DBR report, lawyers for Medicaid formally opposed the nursing home's reorganization plan, which describes how the facility would repay its debts to get out of Chapter 11 protection. As previously reported by The Troubled Company Reporter in early December, the Florida nursing home said it can afford to repay all of its debts but still hasn't negotiated a deal with Medicaid regulators who have threatened to stop paying for low-income patients to stay at the facility. The Florida bankruptcy judge presiding over the bankruptcy case barred regulators from using their powers to shut down Rehabilitation Center of St. Petersburg that allegedly didn't comply with operating standards. The judge compelled regulators to continue the nursing home to obtain reimbursement from Medicare and Medicaid despite the regulators' insistence that the nursing facility had "serious" health and safety problems. The DBR report said the 159-bed nursing facility would continue operating under the ownership of Miami resident Tzvi Bogomilsky, court papers show. About Bayou Shores Bayou Shores SNF LLC, c/o Rehabilitation Center of St. Petersburg, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 14- 09521) on Aug. 15, 2014, in Tampa. Elizabeth A Green, Esq., at Baker & Hostetler LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated assets and liabilities of $1 million to $10 million. The petition was signed by Tzvi Bogomilsky, managing member. BELLMARK RECORDS: Cir. Ct. Affirms Verdict in Rap Song Rights Suit ------------------------------------------------------------------ Law360 reported that the Fifth Circuit rejected a music publisher's contention that it deserves a new trial or judgment in a long-running $2.1 million post-bankruptcy sale dispute over the rights to the song "Whoomp! (There It Is)," ruling the district court correctly nixed a new argument introduced after the trial. According to the report, the three-judge panel found that, among other things, the district court hadn't erred in denying a post-trial motion for judgment as a matter of law when DM Records Inc. argued for the first time that the court had misread the rights assignments for the song. The appellate panel also affirmed the district court's denial of a new trial to DM, finding that Alvertis Isbell, who headed up two music rights companies before filing for bankruptcy, including one that had the rights to the hit 1993 Tag Team song, didn't wrong DM by accusing it of stealing the rights to the song on purpose, the report related. As previously reported by The Troubled Company Reporter, the events giving rise to the suit begin with business conducted by two companies, Alvert Music and Bellmark Records, each run by Mr. Isbell. Bellmark was purportedly a record company, owning sound recordings. Alvert Music is, and has been, a music publishing company, which owns musical compositions and not sound recordings. During the early 1990's, Bellmark entered into writers agreements to obtain composition rights to the Compositions for its affiliated publishing company, Alvert Music. Bellmark retained for itself the two sound recordings. In 1997, DM Records secured licenses from both of Mr. Isbell's companies to exploit both the musical compositions and sound recordings. In April of that year, Bellmark filed a Chapter 11 bankruptcy petition, which was later converted into a Chapter 7 petition. In October 1999, DM purchased the assets of Bellmark from the bankruptcy estate, including all of Bellmark's rights in the Compositions. Alvert Music has not sought bankruptcy protection. Since that time, DM allegedly has proceeded with regard to the Compositions in a manner inconsistent with Alvert Music's ownership rights. In 2002, Mr. Isbell filed the lawsuit in the Northern District of Texas. In 2004, that court transferred the matter, and the magistrate judge referred it to the bankruptcy court in that same year. In 2007, the bankruptcy court issued a report and recommendation that the magistrate judge's referral be withdrawn, and the undersigned judge agreed. The case is Alvertis Bell v. DM Records Inc., case number 13-40878, in the U.S. Court of Appeal for the Fifth Circuit. BLUE STAR PROPERTIES: Files for Chapter 11 Bankruptcy ----------------------------------------------------- Blue Star Properties, LLC, filed for Chapter 11 bankruptcy protection (Bank. D. Md. Case No. 14-29602) on Dec. 30, 2014. The Debtor disclosed $1.39 million in total assets and $1.46 million in total liabilities. The petition was signed by William Deavers, president. Aaron Gregg at The Washington Post reports that the Debtor disclosed that Ryan Epstein is the largest unsecured creditor, owed $163,000. Merrill Cohen, Esq., at Cohen, Baldinger & Greenfeld, LLC, serves as the Debtor's bankruptcy counsel. Judge Paul Mannes presides over the case. Blue Star is based in Prince Frederick, Maryland. CAESARS ENTERTAINMENT: Facing Trial on Receiver Appointment ----------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that Caesars Entertainment Corp. faces a mid-January trial in the Delaware Chancery Court on junior creditors' request for appointment of a receiver, although the casino owner by then may have filed for Chapter 11 reorganization. According to the Bloomberg report, some creditors contend the Delaware state court should appoint a receiver in response to Caesars' alleged asset stripping. First though, the Delaware judge will hold a hearing on dismissal of the receivership action, the Bloomberg report related. As previously reported by The Troubled Company Reporter, citing Peg Brickley, writing for Daily Bankruptcy Review, the Delaware corporate law judge granted fast-track status to a lawsuit seeking a receiver for the operating unit of Caesars Entertainment Corp. over the protests of the company, which said the decision would upset delicate restructuring talks. Vice Chancellor Sam Glasscock said his decision to speed the case along doesn't mean he is inclined to appoint a receiver for Caesars Entertainment Operating Co., which creditors say is being looted by its owners, a claim the company denies. Appointment of a receiver would have "very serious" implications for the operating company, the largest unit of Caesars Entertainment, the judge noted at a hearing in Delaware's Court of Chancery. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's in mid-November 2010. Caesars Entertainment reported a net loss of $2.93 billion in 2013, as compared with a net loss of $1.50 billion in 2012. The Company's balance sheet at Sept. 30, 2014, showed $24.5 billion in total assets, $28.20 billion in total liabilities and a $3.71 billion total deficit. * * * In the April 10, 2014, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit ratings on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiaries, Caesars Entertainment Operating Co. (CEOC) and Caesars Entertainment Resort Properties (CERP), as well as the indirectly majority-owned Chester Downs and Marina, to 'CCC-' from 'CCC+'. The downgrade reflects S&P's expectation that Caesars' capital structure is unsustainable, and the amount of cash the company will burn in 2014 and 2015 creates conditions under which S&P believes a restructuring of some form is increasingly likely over the near term absent an unanticipated significantly favorable change in operating performance. As reported by the TCR on May 1, 2014, Fitch Ratings had downgraded the Issuer Default Ratings (IDRs) of Caesars Entertainment Corp (CEC) and Caesars Entertainment Operating Company (CEOC) to 'CC' from 'CCC'. In May 2014, Moody's Investors Service affirmed the Caa3 corporate family rating and Caa3-PD probability of default ratings. The negative rating outlook reflects Moody's view that CEOC will pursue a debt restructuring in the next year. Ratings could be lowered if CEOC does not take steps to address it unsustainable capital structure. Ratings improvement is not expected unless there is a significant reduction in CEOC's $18 billion debt load. CANTERA COURT COMPLEX: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Cantera Court Complex, Inc. dba DMW Creative Homes 9802 McPherson Rd., Suite 136 Laredo, TX 78045 Case No.: 15-50001 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Southern District of Texas (Laredo) Debtor's Counsel: Carl Michael Barto, Esq. LAW OFFICE OF CARL M. BARTO 817 Guadalupe St. Laredo, TX 78040 Tel: 956-725-7500 Fax: 956-722-6739 Email: cmblaw@netscorp.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Hector Benavides, Sr., president. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. CHAM RESTAURANT: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Aaron Gregg at The Washington Post reports that Cham Restaurant Group LLC filed for Chapter 11 bankruptcy protection (Bankr. D.D.C. Case No. 14-00745) on Dec. 23, 2014, estimating assets between $50,001 and $100,000, and liabilities between $100,001 and $500,000. According to the report, Martin James Yeager, Esq., serves as the Company's bankruptcy counsel. The report says that the Company didn't disclose its largest unsecured creditor. Cham Restaurant is headquartered in Silver Spring, Maryland. COLDWATER CREEK: Asks to Sell Its Piece of $6B Swipe Fee Deal ------------------------------------------------------------- Law360 reported that Peter Kravitz, the liquidating trustee for the Coldwater Creek Inc. estate, asked the Delaware bankruptcy court for approval to sell its potential slice of the massive $6 billion settlement that resolved antitrust claims that MasterCard Inc. and Visa Inc. fixed prices for credit card swipe fees. According to the report, the trustee said the estate already held an auction in November and came to a purchase agreement with Dunhill Asset Services V LLC to sell rights to the potential claim for nearly $1.8 million. Kravitz said it has not yet been determined whether Coldwater Creek, which had its Chapter 11 plan confirmed three months ago, would qualify as a member of the settlement class if or when it is certified, but the liquidating trustee believes the former women's apparel retailer may have claim because it used Mastercard and Visa systems to process purchases, the report related. About Coldwater Creek Coldwater Creek is a multi-channel retailer that offers its merchandise through retail stores across the country, its catalog and its e-commerce Web site, http://www.coldwatercreek.com/ Originally founded in Sandpoint, Idaho in 1984 as a direct, catalog-based marketer, Coldwater evolved into a multi-channel specialty retailer operating 334 premium retail stores, 31 factory outlet stores and seven day spa locations throughout the United States. As of the bankruptcy filing, the Debtors domestically employ a total of approximately 5,990 employees throughout their retail locations, corporate headquarters and distribution, design and call centers. Coldwater Creek Inc. and its debtor-affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10867) on April 11, 2014, to liquidate their assets. Coldwater Creek Inc. disclosed assets of $721,468,388 plus undetermined amount and liabilities of $425,475,739 plus undetermined amount. Affiliate Coldwater Creek U.S. Inc. estimated $100 million to $500 million in assets and liabilities. The Debtors have drawn $37.5 million and have approximately $10 million in letters of credit outstanding under a senior secured credit facility (ABL facility) provided by lenders led by Wells Fargo Bank, National Association, as agent. The Debtors also owe $96 million, which includes accrued interest and approximately $23 million representing a prepayment premium payable, under a term loan from lenders led by CC Holding Agency Corporation, as agent. Aside from the funded debt, the Debtors have accumulated a significant amount of accrued and unpaid trade and other unsecured debt in the normal course of their business. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP, and Shearman & Sterling LLP as attorneys, Perella Weinberg Partners LP as financial advisor, Alvarez & Marsal as restructuring advisor, and Prime Clerk LLC as claims and noticing agent. The U.S. Trustee for Region Three named seven creditors to serve on the official committee of unsecured creditors. Lowenstein Sandler LLP represents the Committee. CWC Liquidation Inc., formerly known as Coldwater Creek Inc., et al., notified the Bankruptcy Court that the effective date of its Modified Third Amended Joint Plan of Liquidation occurred on Sept. 26, 2014. The Troubled Company Reporter, on Dec. 29, 2014, reported that the Bankruptcy Court entered a final decree closing the Chapter 11 cases of consolidated non-lead debtors in the cases of CWC Liquidation Inc. formerly known as Coldwater Creek Inc, et al. COMMUNITY BANK: 11th Circ. Says Cases Void Insurance Exclusion -------------------------------------------------------------- Law360 reported that the Eleventh Circuit overturned a lower court's decision that St. Paul Mercury Insurance Co. didn't owe coverage for an underlying $15 million suit brought by the Federal Deposit Insurance Corp., ruling that an insured v. insured exclusion was ambiguous because courts' interpretation of similar language has been varied. According to the report, the panel said in a published opinion that, under Georgia law, the exclusion was ambiguous because other courts have reached different results when they've ruled on similarly worded policies. The Eleventh Circuit said that extrinsic evidence may be necessary to determine the parties' intent and remanded the case back to the district court, the report related. The report further related that the dispute stems from the January 2010 failure of Community Bank & Trust, a 36-branch community bank in northern Georgia that suffered hundreds of bank failures in the wake of the real estate crisis. The Georgia Department of Banking and Finance closed the bank and appointed the FDIC as a receiver, the report added. The case is St. Paul Mercury Insurance Co. v. Federal Deposit Insurance Corp. et al., case number 13-14228, in the U.S. Court of Appeals for the Eleventh Circuit. COUNTRYWIDE FIN'L: Mortgage Misdeeds Whistle-Blower to Get $57MM ---------------------------------------------------------------- Matthew Goldstein, writing for The New York Times' DealBook, reported that Edward O'Donnell, a former Countrywide Financial executive who became a whistle-blower, is collecting more than $57 million for helping federal prosecutors force Bank of America to pay a record $16.65 billion penalty in connection with its role in churning out shoddy mortgage and related securities before the financial crisis. According to the report, Mr. O'Donnell reached an agreement with the government that enables him to collect part of the settlement that Bank of America agreed to pay in August in a deal with federal prosecutors and a number of state attorneys general. The payment to Mr. O'Donnell arises from a federal lawsuit he filed under the False Claims Act earlier in 2014 and which Preet Bharara, the United States attorney for the Southern District of New York, joined and used as the basis for pressing Bank of America to reach a deal, the report related. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- originated, purchased, securitized, sold, and serviced residential and commercial loans. In mid-2008, Bank of America completed its purchase of Countrywide for $2.5 billion. The mortgage lender was originally priced at $4 billion, but the purchase price eventually was whittled down to $2.5 billion based on BofA's stock prices that fell over 40% since the time it agreed to buy the ailing lender. CRS HOLDING: Converts Ch. 11 Case to Ch. 7 Liquidation ------------------------------------------------------ Pam Huff, writing for Tampa Bay Business Journal, reported that the Chapter 11 trustee in the Creative Recycling Systems' bankruptcy case has filed a notice for voluntary conversion to Chapter 7 bankruptcy liquidation. According to the report, the company has since closed all of its facilities around the country and laid off hundreds of employees. The judge in the case in the U.S. Middle District of Florida has also ordered that the company could abandon all property burdensome to the estate, the report related. Johnson Pope Bokor Ruppel & Burns LLP's Michael Markham, attorney for the trustee, said the possibility of selling the company is no longer on the table, the report further related. About CRS Holding of America CRS Holding of America, LLC, operates a full-service electronics recycling business, providing e-waste recycling solutions for organizations of all sizes. CRS's offerings are designed to meet customers' demand for data security and environmental compliance. CRS Holding and 21 subsidiaries sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 14-bk-10142) in Tampa, Florida, on Aug. 29, 2014. CRS estimated total assets of $50 million to $100 million and debt of $10 million to $50 million. The Debtors' outstanding loan balances to secured creditors are: Regions Bank, $15 million; JY Creative Holdings, Inc. $6.8 million; and Intersection, LLC, $250,000. The Debtors estimate that general unsecured claims total $5 million. The cases are assigned to Judge K. Rodney May. The Debtors have tapped Shumaker, Loop & Kendrick, LLP, as counsel. CRS Holding of America, LLC, reported $812,470 in total assets, and $37,560,321 in total liabilities. CYCLONE POWER: Posts $1.3 Million Net Income in 3rd Quarter ----------------------------------------------------------- Cyclone Power Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $1.33 million on $175,000 of revenues for the three months ended Sept. 30, 2014, compared to a net loss of $871,894 on $212,500 of revenues for the same period a year ago. For the nine months ended Sept. 30, 2014, the Company reported a net loss of $947,468 on $315,527 of revenues compared to a net loss of $2.12 million on $715,382 of revenues for the same period in 2013. As of Sept. 30, 2014, the Company had $2.41 million in total assets, $3.16 million in total liabilities and a $748,000 stockholders' deficit. "The Company has a working capital deficit at September 30, 2014 of approximately $1.9 million. There is no guarantee whether the Company will be able to generate enough revenue and/or raise capital to support its operations. This raises substantial doubt about the Company's ability to continue as a going concern," the Company stated in the filing. A full-text copy of the regulatory filing is available at: http://is.gd/UJblBJ About Cyclone Power Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink Sheets: CYPW) is a clean-tech engineering company, whose business is to develop, commercialize and license its patented Rankine cycle engine technology for applications ranging from renewable power generation to transportation. The Company is the successor entity to the business of Cyclone Technologies LLLP, a limited liability limited partnership formed in Florida in June 2004. Cyclone Technologies LLLP was the original developer and intellectual property holder of the Cyclone engine technology. Cyclone Power reported a net loss of $3.79 million on $715,382 of revenues for the year ended Dec. 31, 2013, as compared with a net loss of $3 million on $1.13 million of revenues for the year ended Dec. 31, 2012. Mallah Furman, in Fort Lauderdale, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses raises substantial doubt about its ability to continue as a going concern. DEB STORES: Gets Nod for Bankruptcy Auction Plans ------------------------------------------------- Law360 reported that U.S. Bankruptcy Judge Kevin Gross agreed to approve Deb Stores Holding LLC's auction strategy, which would have the women's apparel retailer liquidate unless a better going-concern offer pops up, but said he would be willing to tweak parts of the process if problems emerge along the way. According to the report, Judge Gross said he was convinced that the proposed timeline for the sale process -- which sets a bid deadline for New Year's Eve and an auction, if needed, for Jan. 6 -- should be preserved after hearing testimony that Deb Stores will start running out of money to finance the case and its operations in early January. About Deb Stores Headquartered in Philadelphia, Pennsylvania, Deb Stores is a mall- based retailer in the juniors "fast-fashion" specialty sector that operates under the name "DEB" and offers moderately priced, fashionable, coordinated women's sportswear, dresses, coats, lingerie, accessories and shoes for junior and plus sizes. The company, founded by Philip Rounick and Emma Weiner, opened its first store under the name JOY Hosiery in Philadelphia, Pennsylvania in 1932. As of Sept. 30, 2014, the company operated a total of 295 retail store locations (primarily in the East and Midwest, especially Pennsylvania, Ohio and Michigan) as well as an e-commerce channel. On June 26, 2011, Deb Stores' predecessors -- DSI Holdings Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11941) and closed the sale of the assets three months later to Ableco Finance, LLC, the agent for the first lien lenders. Deb Stores Holding LLC and 8 affiliated companies commenced Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The Debtors are seeking to have their cases jointly administered, with pleadings maintained on the case docket for Deb Stores Holding LLC; Case No. 14-12676. The cases are assigned to Judge Mary F. Walrath. Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. As of Dec. 31, 2014, the Debtors' most recent audited consolidated financial statements reflected assets totaling $90.5 million and liabilities totaling $120.1 million. DEB STORES: U.S. Trustee, Landlords Oppose Bankruptcy Sale Plans ---------------------------------------------------------------- Law360 reported that the U.S. Trustee's Office and several landlords of individual Deb Shops locations took issue with Deb Stores Holding LLC's bankruptcy sale plans, with objections ranging from how a possible liquidation would be handled to timing issues if the debtor winds up selling its business as a going concern. According to the Law360 report, the concerns are laid out in nearly a dozen objections filed before the Delaware bankruptcy court that see the U.S. Trustee's Office bristling over an "ill-defined" marketing process for some assets. Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that U.S. Bankruptcy Judge Kevin Gross in Delaware signed an order on Dec. 18 authorizing the selection of a joint venture between Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC as the so-called stalking horse bidder to conduct chain-wide store-closing sales, subject to competitive bidding. An auction is scheduled for Jan. 6, to be followed by a Jan. 7 sale-approval hearing, the Bloomberg report said. About Deb Stores Headquartered in Philadelphia, Pennsylvania, Deb Stores is a mall- based retailer in the juniors "fast-fashion" specialty sector that operates under the name "DEB" and offers moderately priced, fashionable, coordinated women's sportswear, dresses, coats, lingerie, accessories and shoes for junior and plus sizes. The company, founded by Philip Rounick and Emma Weiner, opened its first store under the name JOY Hosiery in Philadelphia, Pennsylvania in 1932. As of Sept. 30, 2014, the company operated a total of 295 retail store locations (primarily in the East and Midwest, especially Pennsylvania, Ohio and Michigan) as well as an e-commerce channel. On June 26, 2011, Deb Stores' predecessors -- DSI Holdings Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11941) and closed the sale of the assets three months later to Ableco Finance, LLC, the agent for the first lien lenders. Deb Stores Holding LLC and 8 affiliated companies commenced Chapter 11 bankruptcy cases in Delaware on Dec. 4, 2014. The Debtors are seeking to have their cases jointly administered, with pleadings maintained on the case docket for Deb Stores Holding LLC; Case No. 14-12676. The cases are assigned to Judge Mary F. Walrath. Laura Davis Jones, Esq., Colin R. Robinson, Esq., at and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as counsel to the Debtors. Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. As of Dec. 31, 2014, the Debtors' most recent audited consolidated financial statements reflected assets totaling $90.5 million and liabilities totaling $120.1 million. DENDREON CORP: Proposed Incentive Plan Approved ----------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court has authorized Dendreon Corporation to implement a key employee incentive plan with maximum aggregate payments of $3.1 million. According to the report, at the 'Minimum Threshold' of $325 million, the Participants will not receive a KEIP payment even if a transaction closes. The 'Maximum Threshold' is satisfied if the Debtors obtain a Total Value of $620 million, which reflects the amount necessary to pay off the Debtors' debt, the report related. At a Total Value between $325 million and $620 million, the amounts to be paid are determined on a straight-line basis, the report said. About Dendreon With corporate headquarters in Seattle, Washington, Dendreon Corporation -- http://www.dendreon.com/-- a biotechnology company focused on the development of novel cellular immunotherapies to significantly improve treatment options for cancer patients. Dendreon's first product, PROVENGE (sipuleucel-T), was approved by the U.S. Food and Drug Administration (FDA) and became commercially available for the treatment of men with asymptomatic or minimally symptomatic castrate-resistant (hormone-refractory) prostate cancer in April 2010. Dendreon is traded on the NASDAQ Global Market under the symbol DNDN. Dendreon and its U.S. subsidiaries filed for Chapter 11 bankruptcy protection (Bankr. D. Del.) on Nov. 10, 2014. The Debtors have requested that their cases be jointly administered under Case No. 14-12515. Judge Peter J. Walsh presides over the cases. The petitions were signed by Gregory R. Cox, interim chief financial officer and treasurer. Dendreon sought bankruptcy protection after it reached agreements on the terms of a financial restructuring with certain holders of the Company's 2.875% Convertible Senior Notes due 2016 representing 84% of the $620 million aggregate principal amount of the 2016 Notes. The financial restructuring may take the form of a stand-alone recapitalization or a sale of the Company or its assets. The Debtors have engaged Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Lazard Freres & Co. LLC, as investment banker; AlixPartners, as restructuring advisors; and Prime Clerk LLC as claims and noticing agent. The Debtors disclosed $365 million in total assets and $664 million in total liabilities as of June 30, 2014. The U.S. Trustee for Region 3 has appointed five members to the Official Committee of Unsecured Creditors. DENDREON INC: Meeting of Creditors Continued Until Jan. 14 ---------------------------------------------------------- The U.S. Trustee continued until Jan. 14, 2015, at 10:00 a.m., the meeting of creditors in the Chapter 11 case of Dendreon Corporation. The meeting will be held at J. Caleb Boggs Federal Building, 844 King St., Room 2112, Wilmington, Delaware. About Dendreon Corp. With corporate headquarters in Seattle, Washington, Dendreon Corporation -- http://www.dendreon.com/-- a biotechnology company focused on the development of novel cellular immunotherapies to significantly improve treatment options for cancer patients. Dendreon's first product, PROVENGE (sipuleucel-T), was approved by the U.S. Food and Drug Administration (FDA) and became commercially available for the treatment of men with asymptomatic or minimally symptomatic castrate-resistant (hormone-refractory) prostate cancer in April 2010. Dendreon is traded on the NASDAQ Global Market under the symbol DNDN. Dendreon and its U.S. subsidiaries filed for Chapter 11 bankruptcy protection (Bankr. D. Del.) on Nov. 10, 2014. The Debtors have requested that their cases be jointly administered under Case No. 14-12515. Judge Peter J. Walsh presides over the cases. The petitions were signed by Gregory R. Cox, interim chief financial officer and treasurer. Dendreon sought bankruptcy protection after it reached agreements on the terms of a financial restructuring with certain holders of the Company's 2.875% Convertible Senior Notes due 2016 representing 84% of the $620 million aggregate principal amount of the 2016 Notes. The financial restructuring may take the form of a stand-alone recapitalization or a sale of the Company or its assets. The Debtors have engaged Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Lazard Freres & Co. LLC, as investment banker; AlixPartners, as restructuring advisors; and Prime Clerk LLC as claims and noticing agent. The Debtors disclosed $365 million in assets and $664 million in liabilities as of June 30, 2014. The U.S. Trustee for Region 3 has appointed five members to the Official Committee of Unsecured Creditors. DERMA PENN: Ch. 11 Case for Skin Treatment Co. Thrown Out --------------------------------------------------------- Law360 reported that a Delaware bankruptcy judge threw out Derma Pen LLC's Chapter 11 case, ruling there was no evidence the skin treatment seller was in financial distress when it filed and that its petition was simply a tactic to disrupt a lawsuit over ownership of the trademark for its primary products. According to the report, in an 18-page opinion, U.S. Bankruptcy Judge Kevin J. Carey wrote that Derma Pen failed to show it had filed for Chapter 11 in good faith, and that the timing of its petition -- three days before a jury trial was set to begin in Utah federal court in a dispute over the DermaPen trade name -- as well as a lack of facts showing financial stress indicated the company sought court protection to avoid trial expenses and the possibility of an adverse ruling. The case is In re Derma Pen LLC, case number 1:14-bk-11894, in the U.S. Bankruptcy Court for the District of Delaware. DIOCESE OF SPOKANE: Paine Hamblen Malpractice Suit Heads to Trial ----------------------------------------------------------------- Law360 reported that Paine Hamblen LLP lost a last ditch effort to avoid a looming trial in the Catholic Diocese of Spokane's malpractice lawsuit that accuses the firm of failing to protect the church from future liability after negotiating a $50 million deal to settle civil sexual abuse claims in its bankruptcy. According to the report, U.S. Bankruptcy Judge Frederick P. Corbitt denied the law firm's motion to dismiss the suit, but did so without prejudice, saying the issues raised can be brought up again at the Feb. 17 trial. In its November motion to dismiss, Paine Hamblen said the diocese had waived its right to pursue claims against the firm when it "deliberately delayed" filing the litigation until after the court's former bankruptcy judge, Patricia C. Williams, retired, the report related. The case is Catholic Bishop of Spokane et al. v. Paine Hamblen LLP et al. in the U.S. District Court for the Eastern District of Washington. About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's second amended joint plan. That plan became effective May 31, 2007. EDNEAVOUR INT'L: Court Sets January 26 as Claims Bar Date --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set Jan. 26, 2015, at 5:00 p.m. (prevailing Eastern time) as deadline for creditors of Endeavour International Corporation and its debtor-affiliates to file their proof of claims. All governmental units must file no later than 5:00 p.m. (prevailing Easter time) on April 8, 2015. All proof of claims must be filed at: Endeavour Claims Processing c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 About Endeavour International Houston, Texas-based Endeavour International Corporation (OTC: ENDRQ) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. On Oct. 10, 2014, Endeavour International and five affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code after reaching a restructuring deal with noteholders. The cases are pending joint administration under Endeavour Operating Corp.'s Case No. 14-12308 before the Honorable Kevin J. Carey (Bankr. D. Del.). As of June 30, 2014, the Company had $1.55 billion in total assets, $1.55 billion in total liabilities, $43.70 million in series c convertible preferred stock, and a $41.48 million stockholders' deficit. The Debtors have tapped Weil, Gotshal & Manges LLP as counsel; Richards, Layton & Finger, P.A., as co-counsel; The Blackstone Group L.P., as financial advisor; AlixPartners, LLP, as restructuring advisor; and Kurtzman Carson Consultants LLC, as claims and noticing agent. FL 6801: Takes On Homeowners' Ch. 11 Claims ------------------------------------------- Law360 reported that the bankrupt owners of Miami's Canyon Ranch condominium-hotel development, scooped up by private equity firm Z Capital Partners, took aim at $341 million in damages claims from disgruntled condo owners that tried and failed to block the sale. According to the report, an objection filed in court asserted that three condo unit associations cannot claim damages from FL 6801 Spirits LLC on causes of action that were resolved in the course of the now-finalized sale of the Lehman Brothers Holdings Inc.-owned mixed-use hotel and residential project. About FL 6801 Spirits FL 6801 Spirits LLC, a wholly owned subsidiary of Lehman Brothers Holdings Inc. and three of its wholly owned subsidiaries filed voluntary Chapter 11 petitions, seeking bankruptcy protection for their condominium hotel property in Miami Beach. The affiliates are FL 6801 Collins North LLC, FL 6801 Collins Central LLC, and FL 6801 Collins South LLC. FL Spirits' Canyon Ranch Living Hotel and Spa is a luxury full- service, ocean front condominium hotel located at the site of the old Carillon Hotel in Miami Beach, Florida. The current operator of the hotel, Canyon Ranch Living, is not a debtor, and operations at the property are expected to continue without interruption. FL Spirits and the three affiliates companies have sought joint administration, with pleadings to be maintained at FL 6801's case docket (Bankr. S.D.N.Y. Lead Case No. 14-11691). FL Spirits has tapped Togut, Segal & Segal LLP as general bankruptcy counsel, Shutts & Bowen LLP as special real estate counsel, CBRE, Inc., as real estate broker, and Prime Clerk as claims and notice agent. Lehman Brothers filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Lehman's Chapter 11 plan became effective on March 6, 2012. FREEDOM INDUSTRIES: Exec Says Spill Exposure DQs Prosecutors ------------------------------------------------------------ Law360 reported that Gary Southern, the president of Freedom Industries Inc., told a federal court that prosecutors charging him with lying to a bankruptcy court to shield his assets following a massive chemical spill should be disqualified, saying they can't be impartial because they were among the 300,000 West Virginia residents exposed to the January spill. According to the report, Southern argued that the prosecutors from the U.S. Attorney's Office for the Southern District of West Virginia can't be impartial because they too were victims of hardships and inconveniences following the January chemical spill, after which West Virginia Gov. Earl Ray Tomblin issued a state of emergency and residents were advised that the water was unsafe for cooking, drinking or bathing. The executive, who faces up to 20 years in prison for wire fraud and five years for bankruptcy fraud and making a false oath in bankruptcy, says that the prosecutors, who have incurred financial losses as a result of the spill, makes them potential litigants in any of the myriad civil suits that have been filed against the company, as well as potential beneficiaries of any restitution that is ordered as a result of the criminal charges, the report related. About Freedom Industries Freedom Industries Inc., is engaged principally in the business of producing specialty chemicals for the mining, steel and cement industries. The Debtor operates two production facilities located in (a) Nitro, West Virginia; and (b) Charleston, West Virginia. The company, connected to a chemical spill that tainted the water supply in West Virginia, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 14-bk-20017) on Jan. 17, 2014. The case is assigned to Judge Ronald G. Pearson. The petition was signed by Gary Southern, president. The Debtor is represented by Mark E Freedlander, Esq., at McGuire Woods LLP, in Pittsburgh, Pennsylvania; and Stephen L. Thompson, Esq., at Barth & Thompson, in Charleston, West Virginia. On Dec. 31, 2013, four companies merged under the umbrella of Freedom Industries: Freedom Industries Inc., Etowah River Terminal LLC, Poca Blending LLC and Crete Technologies LLC. As reported in the Troubled Company Reporter on Feb. 20, 2014, Kate White, writing for The Charleston Gazette, reported that the Debtor disclosed $16 million in assets and $6 million in liabilities when it filed for bankruptcy. On Feb. 5, 2014, the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Frost Brown Todd LLC as counsel. On March 18, 2014, the Bankruptcy Court approved the hiring of Mark Welch at MorrisAnderson in Chicago as Freedom's chief restructuring officer. GENERAL MOTORS: Merrill Lynch Fined $1.9M Over Debt Sales --------------------------------------------------------- Law360 reported that the Financial Industry Regulatory Authority said it has fined Merrill Lynch Pierce Fenner & Smith Inc. $1.9 million and ordered it to pay more than $541,000 in restitution after Merrill Lynch bought up distressed debt of the then-bankrupt General Motors Corp. from retail customers at unfairly discounted prices. According to FINRA, soon after GM's June 2009 bankruptcy filing, traders on Merrill Lynch's credit trading desk agreed to buy up corporate debt issued by the car manufacturer from retail customers, the report related. About General Motors General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. * * * The Troubled Company Reporter, on Sep. 29, 2014, reported that Standard & Poor's Ratings Services raised its corporate credit rating on U.S. automaker General Motors Co. (GM) to 'BBB-' from 'BB+', and revised the outlook to stable from positive. At the same time, S&P raised its issue-level rating on GM's unsecured debt to 'BBB-' from 'BB+' and simultaneously withdrew its '4' recovery rating on that debt, because S&P do not assign recovery ratings to the issues of investment-grade companies. On Oct. 21, 2014, the TCR reported that Fitch Ratings has assigned a rating of 'BB+' to GM's amended unsecured credit facilities. Fitch currently rates GM's Issuer Default Rating (IDR) 'BB+'. The Rating Outlook is Positive. Fitch has also affirmed and withdrawn the 'BB+' IDR of GM's General Motors Holdings LLC (GM Holdings) subsidiary, as there is no longer any rated debt at the subsidiary, and Fitch does not expect the subsidiary to be an active issuer going forward. Fitch has also withdrawn GM Holdings' unsecured credit facility rating of 'BB+' as the subsidiary is no longer a borrower on the facilities. The TCR, on Nov. 6, 2014, reported that Fitch Ratings has assigned a rating of 'BB+' to GM's proposed issuance of senior unsecured notes. The existing Issuer Default Rating (IDR) for GM is 'BB+' and the Rating Outlook is Positive. GENERAL MOTORS: Trust Says Defect Liability Lies with New Co. ------------------------------------------------------------- Law360 reported that the trust representing creditors of General Motors Co.'s bankruptcy estate says that the car company is unfairly trying to skirt lawsuits over drops in vehicle value stemming from flaws, including the deadly ignition switch defect, and that the plaintiffs have correctly directed their claims at New GM. According to the report, the Wilmington Trust Co., acting as trustee and administrator of the Motors Liquidation Co. general unsecured creditors trust, argued in a brief in New York bankruptcy court that New GM is wrong to urge the ignition switch defect plaintiffs to file their claims against Old GM. About General Motors General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the Dissolution Date, pursuant to the Plan and the Motors Liquidation Company GUC Trust Agreement, dated March 30, 2011, between the parties thereto, the trust administrator and trustee -- GUC Trust Administrator -- of the Motors Liquidation Company GUC Trust, assumed responsibility for the affairs of and certain claims against MLC and its debtor subsidiaries that were not concluded prior to the Dissolution Date. * * * The Troubled Company Reporter, on Sep. 29, 2014, reported that Standard & Poor's Ratings Services raised its corporate credit rating on U.S. automaker General Motors Co. (GM) to 'BBB-' from 'BB+', and revised the outlook to stable from positive. At the same time, S&P raised its issue-level rating on GM's unsecured debt to 'BBB-' from 'BB+' and simultaneously withdrew its '4' recovery rating on that debt, because S&P do not assign recovery ratings to the issues of investment-grade companies. On Oct. 21, 2014, the TCR reported that Fitch Ratings has assigned a rating of 'BB+' to GM's amended unsecured credit facilities. Fitch currently rates GM's Issuer Default Rating (IDR) 'BB+'. The Rating Outlook is Positive. Fitch has also affirmed and withdrawn the 'BB+' IDR of GM's General Motors Holdings LLC (GM Holdings) subsidiary, as there is no longer any rated debt at the subsidiary, and Fitch does not expect the subsidiary to be an active issuer going forward. Fitch has also withdrawn GM Holdings' unsecured credit facility rating of 'BB+' as the subsidiary is no longer a borrower on the facilities. The TCR, on Nov. 6, 2014, reported that Fitch Ratings has assigned a rating of 'BB+' to GM's proposed issuance of senior unsecured notes. The existing Issuer Default Rating (IDR) for GM is 'BB+' and the Rating Outlook is Positive. GEORGE BAVELIS: Invited Error Doctrine Overrides Non-Core Argument ------------------------------------------------------------------ The Bankruptcy Appellate Panel of the Sixth Circuit Court of Appeals affirmed an order of a bankruptcy court disallowing the claims filed by Quick Capital of L.I. Corp. against the bankrupt estate of George Bavelis, after rejecting, under the invited error doctrine, the creditor's contention that the state-law issue was a non-core matter. Noting that parties can waive restrictions on a bankruptcy court's ability to rule on non-core issues, the circuit court defined the invited error doctrine as meaning that a "party may not complain on appeal of errors that he himself invited or provoked the court to commit," according to Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News. The case is Bavelis v. Doukas (In re Bavelis), 14-3076, 2014 BL 337379, U.S. Sixth Circuit Court of Appeals (Cincinnati). A full-text copy of the Decision dated Dec. 19, 2014, is available at http://bankrupt.com/misc/BAVELIS1219.pdf GREAT NORTHERN PAPER: Has Deal Giving Maine Town Water Treatment ---------------------------------------------------------------- Nick Sambides Jr., writing for Bangor Daily News, reported that the court-appointed trustee of bankrupt Great Northern Paper Co. will ask a bankruptcy judge to approve a deal that will continue operation of a wastewater treatment plant formerly run by the company that serves East Millinocket, in Maine. According to the report, attorneys for the two GNP bankruptcy estates have agreed to loan the town and state as much as $250,000 to pay the treatment plant's four full-time and two part-time workers and operate the plant for six months. About Great Northern Paper Headquartered in Millinocket, Maine, Great Northern Paper, Inc., one of the largest producers of groundwood specialty papers in North America, filed for chapter 11 protection (Bankr. Maine, Case No. 03-10048) on Jan. 9, 2003. Alex M. Rodolakis, Esq., and Harold B. Murphy, Esq., at Hanify & King, P.C., represented the Debtor. When the Company filed for chapter 11 protection, it listed debts and assets of more than $100 million each. In early 2003, Belgravia purchased substantially all of the Debtor's assets for approximately $75 million. The Maine Bankruptcy Court converted the Debtor's case to a chapter 7 liquidation proceeding on May 22, 2003. Gary M. Growe was the chapter 7 Trustee for the Debtor's estate. Jeffrey T. Piampiano, Esq., at Drummond Woodsum & MacMahon represented the chapter 7 Trustee. GNP Maine Holdings LLC, dba Great Northern Paper Company, filed a voluntary petition for Chapter 7 bankruptcy (Bankr. D. Del. Case No. 14-12179) on Sept. 22, 2014 in Wilmington, Delaware. The next day, three of Great Northern's trade creditors filed an involuntary Chapter 7 petition (Bankr. D. Maine Case No. 14-10756). GREAT WESTERN: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Great Western Holdings, Inc Post Office Box 2490 Napa, CA 94558 Case No.: 15-10005 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Judge: Hon. Alan Jaroslovsky Debtor's Counsel: Michael C. Fallon, Esq. LAW OFFICES OF MICHAEL C. FALLON 100 E St. #219 Santa Rosa, CA 95404 Tel: (707) 546-6770 Email: mcfallon@fallonlaw.net Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Tim Wilkens, president. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/canb15-10005.pdf GT ADVANCED: Excess Assets Sale Procedures Approved --------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court authorized GT Advanced Technologies to sell, lease, or dispose of its "excess assets," which are assets estimated to be worth less than $25,000, with no notice required. With regard to the sale, lease or disposition of any individual Excess Asset or multiple Excess Assets in any transaction with a single buyer or group of related buyers with an aggregate transaction price between $25,001 and $500,000, the Debtor is required to file a separate motion seeking court approval for any sale, lease, or other disposition of those assets, the BData report said. About GT Advanced Technologies Headquartered in Merrimack, New Hampshire, GT Advanced Technologies Inc. -- http://www.gtat.com/-- produces materials and equipment for the electronics industry. On Nov. 4, 2013, GTAT announced a multiyear supply deal with Apple Inc. to produce sapphire glass material for use in consumer electronics products. Under the deal, Apple would provide GTAT with a prepayment of approximately $578 million paid in four installments and, starting in 2015, GTAT would reimburse Apple for the prepayment over a five-year period. GT is a publicly held corporation whose stock was traded on NASDAQ under the ticker symbol "GTAT." GTAT was de-listed from the NASDAQ stock exchange in October 2014. As of June 28, 2014, the GTAT Group's unaudited and consolidated financial statements reflected assets totaling $1.5 billion and liabilities totaling $1.3 billion. As of Sept. 29, 2014, GTAT had $85 million in cash, $84 million of which is unencumbered. On Oct. 6, 2014, GT Advanced Technologies and eight affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D.N.H. Lead Case No. 14- 11916). GT says that it has sought bankruptcy protection due to a severe liquidity crisis brought about by its issues with Apple. The Debtors have tapped Nixon Peabody LLP and Paul Hastings LLP as attorneys and Kurtzman Carson Consultants LLC as claims and noticing agent. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. The Committee' professionals are Kelley Drye as its bankruptcy counsel; Devine, Millimet & Branch, Professional Association as local counsel; EisnerAmper LLP as financial advisors; and Houlihan Lokey Capital, Inc. as investment banker. GTAT has reached a settlement with Apple. The settlement gives Apple an approved claim for $439 million secured by more than 2,000 sapphire furnaces that GT Advanced owns and has four years to sell, with proceeds going to Apple. In addition, Apple gets royalty-free, non-exclusive licenses for GTAT's technology. HEI INC: Proposes Fredrikson & Byron as Bankr. Counsel ------------------------------------------------------ HEI, Inc., seeks approval from the Bankruptcy Court to employ the law firm of Fredrikson & Byron P.A., including lawyers in its bankruptcy group, to represent and assist the Debtor in carrying out its duties under Title 11 of the United States Code and to perform other legal services necessary to the Debtor's continuing operations. The Debtor proposes that employment be on a general retainer with fees to be paid on a reasonable fee basis, dependent primarily on the number of hours expended, but taking into consideration any risk that there may not be funds available to pay fees, any delay in making payments of fees, and such other factors as may be appropriate, subject to the approval of the Court. Fredrikson & Byron has not represented the Debtor in the past. The firm was first engaged in November 2014 to assist the Debtor in evaluating business options and on the preparation for filing this case. Since November 2014, and connection with this matter, the Debtor has paid to the firm fees and expenses of $104,700, including these fees and expenses in the 90 days prior to the filing date: $61,600 on Dec. 19, 2014, and $43,100 on Dec. 31, 2014. The firm has been paid in full through Dec. 30, 2014. Any unpaid prepetition time will be reflected in the firm's first fee application. In addition, on Jan. 2, 2015, the Debtor paid to Fredrikson & Byron a Chapter 11 retainer of $70,400 to be applied against fees and expenses incurred in preparation of the filing, with the remainder to be held for application against final allowed fees, filing fees, and any unpaid fees and expenses incurred immediately prior to the Filing Date. The Debtor has reviewed the unsworn declaration of James L. Baillie, a shareholder of the firm, and believes the attorneys selected by the Debtor do not represent any non-debtor entity in connection with this case, do not hold or represent any interest adverse to the estates, and are disinterested under Sec. 327 of the Bankruptcy Code. About HEI, Inc. HEI, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. Minn. Case No. 15-40009) in Minneapolis, Minnesota, on Jan. 4, 2015. The case is assigned to Judge Kathleen H. Sanberg. The Debtor estimated $10 million to $50 million in assets and debt. The deadline for governmental entities to file claims is July 6, 2015. The Debtor has tapped James L. Baillie, Esq., James C. Brand, Esq., and Sarah M Olson, Esq., at Fredrikson & Byron P.A., as counsel; Alliance Management as business and financial consultant; and Winthrop & Weinstine, P.A., as special counsel. HEI INC: Wants to Keep Winthrop & Weinstine as Corporate Counsel ---------------------------------------------------------------- HEI, Inc., seeks approval from the Bankruptcy Court to employ its existing corporate counsel Winthrop & Weinstine, P.A., as special corporate counsel to the Debtor. The Debtor proposes to continue to use Winthrop for its counsel on general corporate matters, on merger and acquisition matters that may arise from time to time, and on securities work that may arise from time to time. The Debtor does not employ any in-house attorneys and has consulted with Winthrop on legal matters since June 2005. The Debtor proposes to continue this relationship and seeks authorization to continue to consult with Winthrop attorneys from time to time as necessary. Prior to the Filing Date, the Debtor paid Winthrop a retainer of $70,365.10, and has agreed that Winthrop will hold the retainer in trust for application against its allowed postpetition fees and expenses. In the 90 days prior to the Filing Date, the Debtor has paid Winthrop a total of $47,300 in connection with prepetition services. Philip T. Colton, a partner at the firm, discloses that they have searched their conflicts database against the Debtor's secured lender, its top 20 unsecured creditors as of Dec. 18, 2014, and the proposed purchaser of certain of the Debtor's assets. Based on that search, Winthrop's representation of the Debtor does not involve any concurrent conflict of interest except: (a) Winthrop represents Wells Fargo on matters unrelated to the Debtor, and (b) Winthrop represents Cresa Partners on matters unrelated to the Debtor. The firm may be reached at: Philip T. Colton, Esq. Winthrop & Weinstine, P. A. Capella Tower | Suite 3500 225 South Sixth Street Minneapolis, MN 55402-4629 Tel: (612) 604-6729 Fax: (612) 604-6929 E-mail: pcolton@winthrop.com About HEI, Inc. HEI, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. Minn. Case No. 15-40009) in Minneapolis, Minnesota, on Jan. 4, 2015. The case is assigned to Judge Kathleen H. Sanberg. The Debtor estimated $10 million to $50 million in assets and debt. The deadline for governmental entities to file claims is July 6, 2015. The Debtor has tapped James L. Baillie, Esq., James C. Brand, Esq., and Sarah M Olson, Esq., at Fredrikson & Byron P.A., as counsel; Alliance Management as business and financial consultant; and Winthrop & Weinstine, P.A., as special counsel. HIGHER LIVING CHRISTIAN: Case Summary & 20 Top Unsec. Creditors --------------------------------------------------------------- Debtor: Higher Living Christian Church, Inc. fka New Birth South Metropolitan Church, Inc. 2455 Mt. Carmel Road Hampton, GA 30228 Case No.: 15-50256 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Anna Mari Humnicky, Esq. COHEN POLLOCK MERLIN & SMALL Suite 1600, 3350 Riverwood Parkway Atlanta, GA 30339 Tel: (770) 857-4770 Email: ahumnicky@cpmas.com - and - Garrett H. Nye, Esq. COHEN POLLOCK MERLIN & SMALL, P.C. Suite 1600, 3350 Riverwood Parkway Atlanta, GA 30339 Tel: (770) 857-4790 Fax: (770) 763-3168 Email: gnye@cpmas.com - and - Gus H. Small, Esq. COHEN POLLOCK MERLIN & SMALL, PC Suite 1600, 3350 Riverwood Parkway Atlanta, GA 30339-6401 Tel: (770) 858-1288 Email: gsmall@cpmas.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Andre Landers, CEO and Chairman of Board of Directors. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/ganb15-50256.pdf INDEX RECOVERY: Confirms Chapter 11 Liquidating Plan ---------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that Index Recovery Co., a feeder fund formerly known as SPhinX Managed Futures Index Fund LP, got approval and consummated a Chapter 11 plan of liquidation, allowing an initial distribution to unsecured creditors. As reported in the Oct. 8, 2014 edition of the TCR, the Debtor, intends for the Plan to go effective as promptly as possible thereafter and to make an initial distribution to allowed nonsubordinated unsecured creditors equal to 100% of their allowed claims, and then to investors of not less than $15 million, which is approximately 43% of the redemption claim for each investor. The Fund will make an initial distribution as soon as possible after the effective date of the Plan. The Fund's General Partner may act as or appoint an independent party to act as plan administrator who will liquidate the Fund's remaining Assets to Cash and distribute that Cash to holders of Allowed Claims. The Fund's only material non-Cash Asset is its interest in and claims against the SPhinX Group, which is in liquidation in the Cayman Islands. All non-subordinated creditors will be paid in full under the Plan. The Fund is aware of approximately $160,000 in undisputed, non-subordinated unsecured claims and approximately $300,000 in non-subordinated, unliquidated, contingent and/or disputed unsecured claims. The Fund is not aware of any priority claims. After payment of or reservation of funds for non-subordinated claims, the holders of allowed subordinated unsecured claims will receive a pro rata share of Cash available for distribution after liquidation of the Assets. The Assets are Cash and the Fund's remaining claims against and interests in the SPhinX Group. The Fund estimates that it will be able to make an initial distribution or reservation of approximately $465,000 on account of non-subordinated unsecured claims on the Effective Date, as well as a distribution or reservation of approximately $15 million of Cash on account of subordinated investor claims, also on the Effective Date of the Plan. The Fund estimates that the subordinated, unsecured redemption claims held by investors equals approximately $35 million. Therefore, the Fund estimates that investors will receive an initial distribution of approximately 43% of the value of their redemption claim (calculated as of December 31, 2005). Subsequent distributions will depend on the Fund's future recoveries from the SphinX Group. In November 2011, the joint official liquidators (the "JOLs") of the SPhinX Group estimated that investors such as the Fund should anticipate receiving total distributions from the SPhinX Group of between 39% and 56%. These distributions are based upon a net claim that the Fund has against SPhinX Group of $38,131,913.43. It should be noted that these estimates depend upon a number of assumptions made by the JOLs as of November 2011. The JOLs' recovery estimates predate the SPhinX Group making substantial additional recoveries (and incurring substantial additional costs) in the course of the SPhinX Group liquidation. Additionally, the SPhinX Group is continuing to liquidate certain of its assets, specifically claims against third party litigation targets. For purposes of this Disclosure Statement, the Fund uses the JOLs' estimates from November 2011. However, based upon the recoveries made to date, it is possible that the Fund's percentage recovery from the SPhinX Group may be materially higher than the low-end estimate provided by the JOLs in November 2011. Such further distributions may be as much as $5 million to $9 million, which would yield a total likely recovery on account of the Fund's limited partners' redemption claims of 51% to 62%. About Index Recovery Group Index Recovery Group, LP, a managed futures investor formerly known as SPhinX Managed Futures Index Fund, LP, sought Chapter 11 protection (Bankr. N.D.N.Y. Case No. 14-61434) in Utica, New York, on Sept. 2, 2014. The Debtor disclosed total assets of $13.8 million and total liabilities of $35.48 million. Judge Diane Davis presides over the case. The Debtor is represented by Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C. INVERSIONES ALSACIA: Plan Supplement Filed ------------------------------------------ BankruptcyData reported that Inversiones Alsacia filed with the U.S. Bankruptcy Court for the Southern District of New York a notice of filing of a Second Supplement to the Plan Supplement for the Debtors' Joint Prepackaged Chapter 11 Plan. The Supplement contains the following documents, each of which may be altered, modified or supplemented: Exhibit B: new notes indenture and Exhibit N: Banco Internacional loan modification documentation. About Alsacia Inversiones Alsacia, together with its affiliate, Express de Santiago Uno S.A., are collectively the largest operator in the Transantiago Transportation System, transporting approximately 800,000 passengers every day, throughout 35 communities in Santiago, Chile, which accounts for more than 30% of the passengers in Transantiago. Alsacia and Express belong to non-debtor Global Public Services S.A. ("GPS Group"), an international holding company with interests in public passenger transportation, environmental solutions, outsourcing services and real estate development in Chile, Colombia, Panama, Peru and the United States of America. The GPS Group is controlled by Carlos Mario Rios Velilla and Francisco Javier Rios Velilla and several of their affiliates. Alsacia and Express and three affiliates sought bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in Manhattan, New York (Bankr. S.D.N.Y.) on Oct. 16, 2014, with a prepackaged plan that would restructure $347.3 million in senior secured notes but leave other creditors and the owners unimpaired. The cases are pending before the Honorable Martin Glenn and the Debtors have requested that their cases be jointly administered under Case No. 14-12896. The Debtors have tapped Cleary Gottlieb Steen & Hamilton, LLP, as bankruptcy counsel, FTI Consulting as financial advisor, and Prime Clerk LLC as claims and balloting agent. Inversiones Alsacia in December 2014 announced the successful completion of its restructuring process. The U.S. Bankruptcy Court confirmed on Dec. 4, 2014, Alsacia's prepackaged plan of reorganization. The plan contemplates that the companies can implement a planned exchange offer with holders of $347.3 million in senior secured notes. J & B RESTAURANT: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: J & B Restaurant Partners of Long Island II, LLC 4000 Veterans Memorial Hwy., 2nd Floor Bohemia, NY 11716 Case No.: 15-22009 Chapter 11 Petition Date: January 6, 2015 Court: United States Bankruptcy Court Southern District of New York (White Plains) Judge: Hon. Robert D. Drain Debtor's Counsel: Michael P. Cooley, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP 1700 Pacific Avenue, Suite 4100 Dallas, TX 75201-4675 Tel: 214-969-2723 Fax: 214-969-4343 Email: mcooley@akingump.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $10 million to $50 million The petition was signed by Joseph Vitrano, president. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. LEHMAN BROTHERS: Trustee Seeks to Recover $98M From Wells Fargo --------------------------------------------------------------- Law360 reported that Lehman Brothers Inc.'s liquidating trustee filed a $98 million adversary proceeding against Wells Fargo Bank NA in New York bankruptcy court seeking to recover collateral under a swap agreement the bank allegedly ended when Lehman went under. According to the report, attorneys for James Giddens -- the trustee liquidating Lehman Brothers Holdings Inc.'s broker-dealer unit LBI -- are requesting damages after Wells Fargo allegedly breached an October 2001 contract under which LBI and the bank entered into swap transactions involving agreements by the parties to exchange payment obligations. The trustee claims that, after Wells Fargo told LBI that it was in default in September 2008, it gave LBI a statement detailing how much it said was owed in the terminated credit default and foreign exchange transactions after being offset against collateral posted by LBI, the report 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 Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. 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. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch 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 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. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. As of Oct. 2, 2014, Lehman's total distributions to unsecured creditors have amounted to $92.0 billion. As of Sept. 30, 2014, the brokerage trustee has substantially completed customer claims distributions, distributing more than $106 billion to 111,000 customers. 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. LILY GROUP: Gets Court Order Protecting Confidential Info --------------------------------------------------------- Lily Group, Inc. obtained a protective order that would allow the company to turn over documents while protecting what it deems confidential information. Lily Group's official committee of unsecured creditors had asked for the documents to determine the value of certain assets sold by the company to its lender LC Energy Holdings LLC. Last year, the U.S. Bankruptcy Court for the Southern District of Indiana approved LC Energy's credit bid for Lily Group's assets, including the "unencumbered assets." Since the transfer of the assets, the parties have not yet resolved their dispute over the value of the unencumbered assets and the amount to be paid by LC Energy to Lily Group pursuant to its credit bid. The protective order was signed by U.S. Bankruptcy Judge Basil Lorch III. A copy of the order is available without charge at http://is.gd/LQqbn2 About Lily Group Lily Group Inc., the developer of an open-pit coal mine in Green County, Indiana, filed a petition for Chapter 11 reorganization (Bankr. S.D. Ind. Case No. 13-81073) on Sept. 23, 2013, in Terre Haute, Indiana. In its amended schedules, the Debtor disclosed $2.55 million in assets and $39.0 million in liabilities. Jefferson & Brewer LLC has been designated as the Debtor's chief restructuring officer. The Debtor is represented by Courtney Elaine Chilcote, Esq., and David R. Krebs, Esq., at Tucker, Hester, Baker & Krebs, LLC, in Indianapolis, Indiana. The official committee of unsecured creditors has tapped Faegre Baker Daniels LLP as counsel. MONROE HOSPITAL: Gets Court OK to Hire J. Roche as CRO ------------------------------------------------------ Monroe Hospital, LLC, won approval from the Bankruptcy Court to employ Joseph Roche as chief restructuring officer effective as of the closing date of the sale of substantially all of its assets. 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. In its schedules, the Debtor disclosed $14,327,739 in total assets and $136,386,925 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: New Railroad Rebuilding Business after Disaster --------------------------------------------------------------- David Sharp, writing for the Associated Press, reported that the company that purchased assets of the railroad responsible for a fiery oil train derailment that killed 47 people in Canada says it is seeing growth as it rebuilds the business. According to the report, Central Maine and Quebec Railway has nearly doubled its business from June, but it has yet to reach levels before the disaster in Lac Megantic, Quebec, in July 2013, said Ryan Ratledge, chief operating officer. The report related that the new railroad already completed $10 million worth of track improvements -- mostly in Quebec -- that were aimed at improving safety and allowing freight trains that had been slowed to 10 mph in some sections to boost their speeds to 25 mph, he said. The maintenance work included replacement of more than 32,000 railroad ties and removal and replacement of more than 110,000 feet of rail, the report said. 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. MONTREAL MAINE: Rail Crash Victims Keep $3.8 Million of Insurance ----------------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that the U.S. Bankruptcy Appellate Panel upheld a lower court by ruling that Wheeling & Lake Erie Railway Co.'s security interest in inventory and accounts receivable didn't cover insurance recoveries, which ruling will allow creditors of Montreal Maine & Atlantic Railway Ltd. to keep $3.8 million to cover some of their losses. The Bloomberg report recalled that in April, the bankruptcy judge in Bangor, Maine ruled that Wheeling & Lake Erie didn't have a valid secured claim against $3.8 million paid by Travelers Property Casualty Co. of America under a policy providing property and business-interruption insurance. The appeal was Wheeling & Lake Erie Railway Co. v. Keach (In re Montreal Maine & Atlantic Railway Ltd.), 14-033, U.S. Bankruptcy Appellate Panel for the First Circuit (Boston). 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. NNN 1818 MARKET STREET: Schedules & Statement Due Jan. 20 --------------------------------------------------------- NNN 1818 Market Street 16, LLC, filed a bare-bones Chapter 11 bankruptcy petition (Bankr. C.D. Cal. Case No. 15-10111) in Los Angeles on Jan. 5, 2015. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated $10 million to $50 million in assets and debt. The formal schedules of assets and liabilities and the statement of financial affairs are due Jan. 20, 2015. The Debtor has tapped John L. Smaha, Esq., at Smaha Law Group, in San Diego, as counsel. NNN 1818 MARKET: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: NNN 1818 Market Street 16, LLC, a Delaware Limited Liability Company 2001 Wilshire Boulevard, Ste. 250 Santa Monica, CA 90403 Case No.: 15-10111 Type of Business: Single Asset Real Estate Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Central District of California (Los Angeles) Debtor's Counsel: John L. Smaha, Esq. SMAHA LAW GROUP 2398 San Diego Avenue San Diego, CA 92110 Tel: 619-688-1557 Fax: 619-688-1558 Email: jsmaha@smaha.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by Gabor Csupo, manager. List of Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ A & S Sprinkler Co., Inc. Trade $1 Allied Barton Security Trade $1 American Anchor Trade $1 APEX Elevator Inspection & Testing Trade $1 Brocks Fire Protection, Inc. Trade $1 Caryl Technologies, Inc. Trade $1 Connell-Greene Consulting, Inc. Trade $1 CTR Parking Solutions, LLC Trade $1 E.J.W. Restoration, LLC Trade $1 Energy Management Systems, Inc. Trade $1 Fairborn Equipment Co. Mid-Atlantic Trade $1 Huneke Trade $1 INX Technology Corporation Trade $1 Paul Rabinowitz Glass Co., Inc. Trade $1 S & H Interlorscapes Trade $1 Siemens Industry, Inc. Trade $1 UniFirst Corporation Trade $1 Waste Management, Inc. Tade $1 NSB ADVISORS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: NSB Advisors LLC 200 Westage Business Center Suite 228 Fishkill, NY 12524 Case No.: 15-35009 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Hon. Cecelia G. Morris Debtor's Counsel: Alan D. Halperin, Esq. HALPERIN BATTAGLIA RAICHT, LLP 40 Wall Street - 37th Floor New York, NY 10005 Tel: (212) 765-9100 Fax: (212) 765-0964 Estimated Assets: $500,000 to $1 million Estimated Liabilities: $10 million to $50 million The petition was signed by William F. Nicklin, manager. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. ONE SOURCE INDUSTRIAL: Mgt. Provider Follows Parent to Bankruptcy ----------------------------------------------------------------- One Source Industrial LLC followed its parent, One Source Industrial Holdings, LLC, into Chapter 11 bankruptcy. Industrial is a Texas limited liability company that provides executive management, accounting, and overhead services for various affiliated entities which, in turn, provide rental equipment and industrial services to businesses in the oil and gas, refining, manufacturing, pipeline, shipping and construction industries. Essentially, Industrial performs all non-operating activities on behalf of its affiliates, including performing executive management, accounting, cash management, human resources, information technology, safety and compliance, insurance, employee benefits, legal and other related functions. The Debtor's financial and cash management services include administering the sale of account of certain of Industrial's affiliates, which have ongoing operations, to a purchaser, Amegy Bank National Association d/b/a/ Amegy Bank Business Credit, who disburses the resulting proceeds into the operating subsidiaries' accounts. At the end of each day, any remaining funds held in the operating affiliates' accounts after the payment of its operating expenses are swept back into the Debtor's account. The funds swept into the Debtor's account are then used as needed to fund the ongoing operations of the Debtor and its affiliates. Alternatively, if the accounts of the operating entities have a negative balance at the end of the day, funds are swept from the Debtor's account into the operating entities' accounts to bring the balance to zero. Consequently, as to the operating entities whose accounts are being sold to Amegy, the Debtor and affiliated entities utilize "zero balance" accounting whereby the accounts of the operating affiliates are always maintained at zero and any available excess funds are pooled in the Debtor's account for the benefit and use all of the affiliated One Source entities. Prior to the Petition Date, the Debtor and its affiliated entities experienced cash flow problems precipitated, in part, by (a) the terms of their respective financing agreements, and (b) the precipitous drop in oil prices and its negative impact on oil and gas and related business activity. The Debtor commenced this bankruptcy case to preserve and maximize the value of its operations and assets, preserve the jobs of its employees, and obtain the time necessary to formulate a plan of reorganization that will maximize the return to legitimate creditors. About One Source Industrial One Source Industrial Holdings, LLC, and One Source Industrial LLC are both limited liability companies that are part of a corporate family of affiliated companies. One Source Industrial Holdings holds equipment utilized by various related entities which provide rental equipment and industrial services to businesses in the oil and gas, refining, manufacturing, pipeline, shipping, and construction industries. The types of equipment possessed by One Source include, e.g., hazardous material transportation vehicles, frac tanks, tank trailers, barrel mix tank and vacuum tankers, air machines, and waste and other industrial boxes and tanks. Industrial provides executive management, accounting, and overhead services for Holdings. Holdings sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 14-44996) in Ft. Worth, Texas, on Dec. 16, 2014. One Industrial sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 15-400038) on Jan. 4, 2015. Holdings' case is assigned to Judge Russell F. Nelms. The Debtors each estimated $10 million to $50 million in assets and debt. The Debtors are represented by J. Robert Forshey, Esq., and Suzanne K. Rosen, Esq., at Forshey & Prostok, LLP, in Ft. Worth, Texas. No creditor's committee has been appointed in the cases. Further, no trustee or examiner has been requested or appointed in the Debtors' Chapter 11 cases. ONE SOURCE INDUSTRIAL: Two Debtors Seek Joint Administration ------------------------------------------------------------ One Source Industrial Holdings, LLC, sought bankruptcy protection in December, and One Source Industrial LLC filed a month later. They are now asking the U.S. Bankruptcy Court for the Northern District of Texas to enter an order directing the joint administration of their respective Chapter 11 cases. About One Source Industrial One Source Industrial Holdings, LLC, and One Source Industrial LLC are both limited liability companies that are part of a corporate family of affiliated companies. One Source Industrial Holdings holds equipment utilized by various related entities which provide rental equipment and industrial services to businesses in the oil and gas, refining, manufacturing, pipeline, shipping, and construction industries. The types of equipment possessed by One Source include, e.g., hazardous material transportation vehicles, frac tanks, tank trailers, barrel mix tank and vacuum tankers, air machines, and waste and other industrial boxes and tanks. Industrial provides executive management, accounting, and overhead services for Holdings. Holdings sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 14-44996) in Ft. Worth, Texas, on Dec. 16, 2014. One Industrial sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 15-400038) on Jan. 4, 2015. Holdings' case is assigned to Judge Russell F. Nelms. The Debtors each estimated $10 million to $50 million in assets and debt. The Debtors are represented by J. Robert Forshey, Esq., and Suzanne K. Rosen, Esq., at Forshey & Prostok, LLP, in Ft. Worth, Texas. No creditor's committee has been appointed in the cases. Further, no trustee or examiner has been requested or appointed in the Debtors' Chapter 11 cases. ONE SOURCE INDUSTRIAL: Wants Amegy Factoring Agreement Extended --------------------------------------------------------------- One Source Industrial LLC is asking the Bankruptcy Court to approve an extension of a prepetition of factoring agreement with Amegy Bank National Association on a postpetition basis. Prior to the Petition Date, on Sept. 17, 2012, the Debtor and its affiliates entered into a Purchase and Sale Agreement/Security Agreement with Amegy. Industrial provided treasury and cash management services for Industrial and its related entities, and routinely sold the accounts receivable arising from the operations of the operating affiliates to Amegy pursuant to the Factoring Agreement. The process of selling the receivables under the Factoring Agreement was administered exclusively by the Debtor on behalf of the affiliates. Under the Factoring Agreement, the purchase price for the Operating Affiliates' receivables sold by the Debtor to Amegy was 85 percent of the gross amount of the invoices, and the remaining 15 percent, which represented a factoring fee paid to Amegy and is referred to in the Factoring Agreement as a discount. Beginning on Oct. 27, 2014, as an accommodation to Industrial, Amegy agreed to change the 85%/15% purchase price to discount ratio to a 90%/10% ratio for a 120-day period. If the extension of the Factoring Agreement is approved by the Court, the accommodation period will expire on Feb. 24, 2015. Moreover, on Dec. 8, 2014, Amegy began applying any rebates of the Discount above the amount needed to fully fund its reserve account, and thus payable to the Debtor and its affiliates under the Factoring Agreement, to reduce its exposure on certain older, outstanding batch Receivables (the "Rebate Retention"). The Rebate Retention was done by Amegy pending Court approval of the extension of the Factoring Agreement and will not continue on a postpetition basis. Finally, the Factoring Agreement grants Amegy a security interest in the presently owned and thereafter acquired accounts and accounts receivable of the Debtor, Holdings and the affiliated Operating Entities. Since the Debtor does not sell any Receivables, the net effect of this is to grant a security interest in favor of Amegy in both the Sweep Account and any Debtor DIP accounts. However, the Factoring Agreement pertains only to Receivables actually sold by the Debtor, Holdings, and their affiliates and purchased by Amegy by mutual agreement. Subject to Bankruptcy Court approval, the Debtor, Holdings, and their non-debtor affiliates wish to extend and employ the Factoring Agreement with Amegy on a postpetition basis. If the postpetition use of the Factoring Agreement is approved by the Court, the Debtor will continue to facilitate the sale of the Operating Affiliates' Receivables to Amegy, and the funds obtained from the sale of such Receivables will continue to be deposited into the accounts of the Operating Affiliates, and subsequently swept into the Debtor's sweep account to pay the operating expenses of the Debtor, Holdings, and the Operating Affiliates. The 85%/15% Purchase Price to Discount ratio would resume on Feb. 24, 2015, after the expiration of the 120-day accommodation period. J. Robert Forshey, Esq., at Forshey & Prostok, LLP, in Ft. Worth, Texas, explains that it was not possible for the Debtor to obtain postpetition working capital financing on an unsecured basis pursuant to Sec. 364(a) or (b) of the Bankruptcy Code. The Debtor has no ongoing business operations of its own and generates none of the Receivables. Based upon the experience of the Debtor's counsel and management, the Debtor has no other basis to obtain operating funds other than by monetizing the Receivables of the Operating Entities and using these funds to pay for ongoing operations. About One Source Industrial One Source Industrial Holdings, LLC, and One Source Industrial LLC are both limited liability companies that are part of a corporate family of affiliated companies. One Source Industrial Holdings holds equipment utilized by various related entities which provide rental equipment and industrial services to businesses in the oil and gas, refining, manufacturing, pipeline, shipping, and construction industries. The types of equipment possessed by One Source include, e.g., hazardous material transportation vehicles, frac tanks, tank trailers, barrel mix tank and vacuum tankers, air machines, and waste and other industrial boxes and tanks. Industrial provides executive management, accounting, and overhead services for Holdings. Holdings sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 14-44996) in Ft. Worth, Texas, on Dec. 16, 2014. One Industrial sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 15-400038) on Jan. 4, 2015. Holdings' case is assigned to Judge Russell F. Nelms. The Debtors each estimated $10 million to $50 million in assets and debt. The Debtors are represented by J. Robert Forshey, Esq., and Suzanne K. Rosen, Esq., at Forshey & Prostok, LLP, in Ft. Worth, Texas. No creditor's committee has been appointed in the cases. Further, no trustee or examiner has been requested or appointed in the Debtors' Chapter 11 cases. OPEN TEXT: S&P Rates New $600MM Sr. Unsecured Notes 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB' issue-level rating, and '5' recovery rating, to Waterloo, Ont.-based Open Text Corp.'s proposed US$600 million senior unsecured notes due 2025. The notes will be issued by Open Text and guaranteed by the borrowers and guarantors of the company's credit facilities. Nonguarantors at close of the transaction will represent approximately 27% of Open Text's consolidated revenue and approximately 3% of consolidated EBITDA. The '5' recovery rating on the debt indicates S&P's expectation for modest (10%-30%) recovery in the event of a default. The company has leeway to increase the notes offering to approximately US$750 million without affecting the recovery or issue-level ratings on the notes. S&P expects Open Text to use the net proceeds to repay its existing term loan A and for general corporate purposes, including potential acquisitions. The issue-level rating on the first-lien secured debt, which will include the company's recently upsized revolver (to US$300 million from US$100 million) and term loan B at close of the transaction, is unchanged at 'BBB', with a '1' recovery rating. "We base our 'BB+' long-term corporate credit rating and stable outlook on Open Text on our assessment of its business risk profile as fair and its financial risk profile as intermediate," said Standard & Poor's credit analyst David Fisher. The financing transaction will have only a modest impact on Standard & Poor's adjusted debt-to-EBITDA at close of the transaction. S&P expects funds in excess of those used to repay the company's term loan A to be deployed for near-term acquisitions, including the recently signed agreement to purchase Actuate Corp., for net consideration of approximately US$272 million. This should result in leverage remaining in the 2x-3x range, consistent with S&P's expectation for the ratings. S&P's "fair" business risk profile assessment on Open Text reflects the company's solid market position as a leading provider of enterprise content management and enterprise information management solutions. Open Text benefits from a large base of high-margin maintenance revenues and a growing cloud-based business that generates recurring billings. The company also has favorable customer, end-market, and geographic diversity. These strengths are in part offset by the company's modest scale and limited business breadth, as well as the intensely competitive operating environment in which it operates. Open Text also has some concentration risk to key partners. S&P's "intermediate" financial risk profile assessment on Open Text reflects S&P's expectation that the company will pursue financial policies such that adjusted debt-to-EBITDA remains in the 2x-3x range in the next few years. Although S&P believes leverage could temporarily fall below this level if acquisition activity subsides, S&P expects the company to maintain credit metrics consistent with an intermediate financial risk profile in the medium term. RATINGS LIST Open Text Corp. Corporate credit rating BB+/Stable/-- Ratings assigned Proposed US$600M sr unsecured notes BB Recovery rating 5 PALOMBA WEINGARTEN: Firm Hit With $129M Legal Malpractice Suit -------------------------------------------------------------- Law360 reported that Steptoe & Johnson LLP and a onetime partner of the firm were hit with a $129 million legal malpractice suit in California court, in which they are accused of failing to properly advocate for developers in a fight to secure big claims against a bankrupt mutual fund executive. According to the report, Pointe San Diego Residential Community LP and Gosnell Builders Corp. accuse the firm and its former partner, Robbin L. Itkin, of passively allowing former mutual fund CEO Palomba "Pam" Weingarten to transfer a multimillion dollar residence. After years of litigation in state court, Palomba Weingarten filed a chapter 11 petition (Bankr. C.D. Calif. Case No. 04-16437) on Oct. 1, 2004, and the case was converted to a chapter 7 liquidation proceeding on Aug. 31, 2009. David A. Gill, Esq., at Danning, Gill, Diamond & Kolitz in Los Angeles serves as the chapter 7 trustee in this on-going liquidation proceeding. PEREGRINE FINANCIAL: US Bank Settles With CFTC ---------------------------------------------- Law360 reported that an Iowa federal judge agreed to dismiss a suit brought by the U.S. Commodity Futures Trading Commission against U.S. Bank NA after the two parties agreed to settle claims that the bank aided bankrupt Peregrine Financial Group Inc.'s former CEO in misappropriating $215 million in customer funds. According to the report, Chief District Judge Linda R. Reade dismissed with prejudice the suit, which was set for trial on Jan. 5. The terms of the settlement remain a secret, but the CFTC originally sought $36 million in recompense from U.S. Bank, the report related. The case is US Commodity Futures Trading Commission v. US Bank, NA, Case No. 6:13-cv-02041 (N.D. Iowa). About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. PHH CORP: Fitch Affirms Then Withdraws 'BB-' Long-term IDR ---------------------------------------------------------- Fitch Ratings has affirmed PHH Corporation's (PHH) long-term Issuer Default Rating (IDR) and senior unsecured debt ratings at 'BB-' and the short-term IDR and commercial paper (CP) ratings at 'B'. The Rating Outlook remains Negative. Fitch has simultaneously withdrawn PHH's ratings for commercial reasons. KEY RATING DRIVERS - IDRs and SENIOR DEBT The affirmation of PHH's ratings follows the closing of the fleet leasing business during the third-quarter of 2014 (3Q'14), which generated net proceeds of $821 million, taking into account tax payments of approximately $500 million related to the sale. A portion of the proceeds from the sale were used to repay $420 million of PHH's outstanding senior unsecured notes while the remaining proceeds, along with a portion of cash on the balance sheet, are expected to be used to re-invest and re-engineer PHH's mortgage origination and servicing business, and return capital to shareholders, as part of PHH's previously announced strategic plan. PHH's IDRs reflect its established position in the prime mortgage servicing industry and improved capitalization, leverage and liquidity levels following the sale of the fleet leasing business. The IDRs are constrained by the monoline nature of the business model and the focus on the mortgage servicing and origination industries, which are cyclical, low-margin businesses subject to increased regulatory scrutiny. The ratings of senior unsecured debt and CP are equalized with PHH's long-term and short-term IDRs, reflecting solid coverage of unencumbered balance sheet assets for all classes of debt. The maintenance of the Negative Rating Outlook continues to reflect the uncertainty and execution risk associated with PHH's ambitious strategic plan, particularly in light of the inherently cyclical nature of the mortgage origination business and the capital-intensive nature and highly volatile GAAP earnings profile of the mortgage servicing business. Furthermore, the overall mortgage business remains subject to intense regulatory and legislative scrutiny, which could potentially be a drain on cash resources. Given the time it could take PHH to implement its business plans and observe meaningful results, Fitch expected that resolution of the Negative Outlook could be toward the outer end of the 12-24 month Outlook horizon. As such, Fitch is unable to resolve the Negative Outlook prior to the rating withdrawal. GAAP earnings from continuing operations, which include fair market changes to mortgage servicing rights (MSRs) but exclude PHH's divested fleet operations, remain challenged due to current levels of gain-on-sale margins, subpar economics of PLS contracts and fair market changes in the MSR portfolio. PHH reported pretax losses of $129 million in 3Q'14 compared to losses of $101 million one-year prior. Fitch focuses on core earnings, which eliminate the impact of unrealized (noncash) fair value adjustments to MSRs, which better reflect PHH's ability to generate earnings. On this basis, PHH generated core pretax losses of $92 million in 3Q'14 compared to losses of $96 million, one-year prior. Leverage, as measured by total debt to tangible equity, was 0.98x as of Sept. 30, 2014, compared to 3.66x one-year prior, reflecting the reduction in debt through the sale of the fleet leasing business as well as the accelerated debt reduction by PHH through the repayment of unsecured debt in 3Q'14. Fitch expects leverage will increase modestly over time due to higher origination volumes and announced share repurchases, but the funding needs of the standalone mortgage business are expected to remain consistent with the current ratings. As of Sept. 30, 2014, PHH had $1.45 billion of unrestricted cash on hand, and $250 million of investment securities, for a total of $1.7 billion of unrestricted cash and cash equivalents. Fitch views PHH's liquidity as temporarily elevated, as the company has identified the following uses for its excess liquidity: up to $200 million for re-engineering the mortgage business; up to $150 million for growth initiatives; and $250 million for additional share buybacks. Taking into account these cash uses, PHH estimates that it will have $140 million of excess liquidity remaining above its estimated $875 million in key cash requirements. Overall, Fitch views PHH's liquidity profile as adequate. RATING SENSITIVITIES - IDRS AND SENIOR DEBT Inability to renegotiate existing private label contracts at more favorable economic terms, loss of clients, weakening in PHH's competitive position, and/or sustained operating losses would be viewed negatively. In addition, a sustained increase in leverage, reduction in liquidity due to higher than expected operational and contingency needs, or higher than planned share repurchases would also be viewed negatively. Successful execution of management's strategic objectives as measured by strengthened competitive position, successful client contract negotiations, and sustained increased in earnings and cash flows, while maintaining appropriate capital and liquidity levels would be viewed positively. Fitch affirms and withdraws the following ratings: PHH Corporation -- Long-term IDR at 'BB-'; -- Short-term IDR at 'B'; -- Senior unsecured debt at 'BB-'; -- Commercial paper at 'B'. The Rating Outlook is Negative. PINKBERRY MIDATLANTIC: Files for Chapter 7 Liquidation ------------------------------------------------------ Pinkberry Midatlantic LLC filed for Chapter 7 liquidation (Bankr. E.D. Va. Case No. 14-14770) on Dec. 26, 2014, estimating assets between $500,000 and $1 million, and liabilities between $1 million and $10 million. The Petition was filed at the request of the franchiser, Los Angeles-based Pinkberry Inc., Rebecca Cooper at Washington Business Journal reports, citing John Paul Goetz, Esq., at John Goetz Law, PLC, the attorney for the Company. According to the report, Mr. Goetz said he is not sure whether any local locations would remain open long-term. The report adds that some of the stores could be taken over by the corporate franchiser. The Company's creditors are expected to meet in February, according to Business Journal. Aaron Gregg at The Washington Post relates that the Company's largest unsecured creditor is Branch Banking & Trust Co., which is owed $313,934. Mr. Goetz can be reached at: John Goetz Law, PLC 75 West Lee Street, Suite 104 Warrenton, Virginia 20186 Tel: (540) 359-6605 Pinkberry Midatlantic LLC, headquartered in Waterford, Virginia, is a franchisee for several Pinkberry frozen yogurt stores, and is controlled by Stavros Roberts. It operates stores in Georgetown, Dupont Circle, Arlington, Fairfax, Tysons Corner, Gainesville and National Harbor. PRETTY GIRL: Meeting of Creditors Set for Feb. 26 ------------------------------------------------- A meeting of creditors of Pretty Girl, Inc., is set to be held on Feb. 26, at 11:00 a.m., according to a filing with the U.S. Bankruptcy Court for the Southern District of New York. The meeting will be held at the Office of the U.S. Trustee, 80 Broad Street, Fourth Floor, in New York. The meeting is called the "341 meeting" after the section of the Bankruptcy Code that requires it. A representative of the company is required to appear at the meeting and answer questions under oath. The meeting is presided over by the U.S. trustee, the Justice Department's bankruptcy watchdog. About Pretty Girl Fashion retailer Pretty Girl, Inc., filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 14-11979) on July 2, 2014. The petition was signed by Albert Nigri as president. The Debtor disclosed total assets of $10.76 million and total liabilities of $12.27 million. Rosen & Associates, P.C., acts as the Debtor's counsel. The Official Committee of Unsecured Creditors tapped to retain Wilk Auslander LLP as its conflicts counsel, CBIZ Accounting, Tax & Advisory of New York, LLC and CBIZ, Inc. as its financial advisors. PUERTO RICO ELECTRIC: To Seek Extension to Bondholder Agreement --------------------------------------------------------------- Reuters reported that Puerto Rico's electric power authority PREPA is expected to ask bondholders to extend a forbearance agreement set to expire at the end of next March, two sources familiar with the ongoing negotiations said. According to the Reuters report, a presentation to the bondholders in New York in December highlighted the extent of the problems facing PREPA and fell short of an expected business plan. Law360 reported that restructuring professionals charged with finding a way forward for Puerto Rico's hopelessly indebted electric utility reported progress on new revenue-boosting measures connected to a creditor agreement that staves off defaults until the spring. According to the Law360 report, PREPA said that it has begun more aggressive bill collection and re-examined its utility rates as part of a three-month old restructuring effort. In August, PREPA cut deals with bank lenders and long-term bondholders to give it time to fashion a workout of an unsustainable $8.6 billion debt load, the Law360 report related. * * * The Troubled Company Reporter, on Dec. 15, 2014, reported that Fitch is maintaining the $8.6 billion of Puerto Rico Electric Power Authority (PREPA) power revenue bonds on Negative Rating Watch. The bonds are currently rated 'CC'. As reported in the Troubled Company Reporter on Sept. 19, 2014, Moody's Investors Service has downgraded the rating for Puerto Rico Electric Power Authority's (PREPA) $8.8 billion of Power Revenue Bonds to Caa3 from Caa2. This rating action concludes the rating review that Moody's initiated on July 1, 2014. PREPA's rating outlook is negative. QUANTUM FOODS: Committee Seeks Approval to Settle Avoidance Claims ------------------------------------------------------------------ Quantum Foods LLC's official committee of unsecured creditors has filed joint motions seeking court approval to settle the company's so-called avoidance claims. The settlement agreements require AFCO Credit Corp., Bird-in-Hand Farms Inc., Excellentia International, GEA Food Solutions North America Inc., and Illinois American Water Co. to pay back the money and assets they received from Quantum Foods within 90 days prior to its bankruptcy filing. Quantum Foods would receive a total of $82,428 if U.S. Bankruptcy Judge Kevin Carey approved the settlements, according to a court filing. The motions are on Judge Carey's calendar for Jan. 22, 2015. About Quantum Foods Founded in 1990 and headquartered in Bolingbrook, Illinois, Quantum Foods, LLC -- http://www.quantumfoods.com-- provides protein products made from beef, poultry and pork. Quantum Foods LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 14-10318) on Feb. 18, 2014, to facilitate the sale of substantially all their business to CTI Foods Holding Co., LLC. The Debtors' primary secured indebtedness totals $50.2 million, owing to lenders led by Crystal Financial, LLC, as administrative and collateral agent. Quantum Foods is being advised in its restructuring by Daniel J. McGuire, Esq., Gregory M. Gartland, Esq., and Caitlin S. Barr, Esq., at Winston & Strawn as counsel; M. Blake Cleary, Esq., Kenneth J. Enos, Esq., and Andrew Magaziner, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as local counsel. City Capital Advisors is the investment banker. FTI Consulting, Inc. also serves as advisor. BMC Group is the claims and notice agent. The U.S. Trustee for Region 3 appointed five members to the official committee of unsecured creditors in the case. The Committee is seeking to retain Triton Capital Partners, Ltd. as financial advisor; and Mark D. Collins, Esq., Russell C. Silberglied, Esq., Michael J. Merchant, Esq., Christopher M. Samis, Esq., and Robert C. Maddox, Esq., at Richards, Layton & Finger, P.A. as counsel. Raging Bull is represented in the case by Van C. Durrer II, Esq., at Skadden Arps Slate Meagher & Flom LLP. Crystal Finance LLC is represented by David S. Berman, Esq., at Riemer & Braunstein LLP. RADIOSHACK CORP: Kept Alive by $25 Billion of Swaps Side Bets ------------------------------------------------------------- Jodi Xu Klein, writing for Bloomberg News, reported that RadioShack Corp. is finding an unlikely ally in its efforts to stay out of bankruptcy: credit derivatives traders who amassed more than $25 billion of trades speculating how much longer it can keep paying its bills. According to the report, after a 60 percent surge in 2014, the amount of credit-default swaps tied to RadioShack is 28 times its debt, more than any other U.S. company. When the retailer's biggest shareholder arranged $585 million of funding in October to help it survive the holidays, much of the money came from hedge funds wagering on the company to avoid default, the Bloomberg report said, citing people with knowledge of the trading. Those included DW Investment Management and Saba Capital Management, the report cited the people as saying. 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. The Company's balance sheet at Aug. 2, 2014, showed $1.14 billion in total assets, $1.21 billion in total liabilities and a $63 million total shareholders' deficit. * * * As reported by the TCR on Sept. 15, 2014, Standard & Poor's Ratings Services lowered its corporate credit rating on Fort Worth, Texas-based RadioShack Corp. to 'CCC-' from 'CCC'. "The downgrade comes as the company announced it will seek capital, and that such a transaction could include a debt restructuring in addition to store closures and other measures," said Standard & Poor's credit analyst Charles Pinson-Rose. In the Sept. 16, 2014, edition of the TCR, the TCR reported that Fitch Ratings had downgraded the Long-term Issuer Default Rating (IDR) for RadioShack Corporation (RadioShack) to 'C' from 'CC'. The downgrade reflects the high likelihood that RadioShack will need to restructure its debt in the next couple of months. 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. RIDGEFIELD CHRISTIAN: Case Summary & 2 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Ridgefield Christian School, Inc. 3824 Casey Springs Rd. Jonesboro, AR 72404 Case No.: 15-10029 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Eastern District of Arkansas (Jonesboro) Judge: Hon. Audrey R. Evans Debtor's Counsel: James F. Dowden, Esq. JAMES F. DOWDEN, P.A. 212 Center Street, 10th Floor Little Rock, AR 72201 Tel: (501) 324-4700 Fax: (501) 374-5463 Email: jfdowden@swbell.net Total Assets: $1.69 million Total Liabilities: $2.10 million The petition was signed by Doug Imrie, school board vice president. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/areb15-10029.pdf RLJ ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: RLJ Enterprises, LLC. 119 East Bridge Street Granbury, TX 76048 Case No.: 15-40101 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Debtor's Counsel: Russell W. King, Esq. KING LAW OFFICE, P.C. P.O. Box 772 Stephenville, TX 76401 Tel: (254) 968-8777 Fax: (254) 445-2751 Email: rking@kinglaw.us Total Assets: $1.05 million Total Liabilities: $708,802 The petition was signed by Melinda Jo Ray, owner/president. A list of the Debtor's 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb15-40101.pdf ROTHSTEIN ROSENFELDT: Trustee Cleared to Distribute $13M In Claims ------------------------------------------------------------------ Law360 reported that a Florida bankruptcy judge approved $13 million in claims distributions by the liquidating trustee of convicted Ponzi schemer Scott Rothstein's bankrupt law firm, but said claims held by a group of hedge fund managers would be withheld while the trustee's adversary suit seeking clarification on their claims is pending. According to the report, U.S. Bankruptcy Judge Raymond Ray signed off on Rothstein Rosenfeldt Adler PA liquidating trustee Michael Goldberg's request to make distributions to holders of class 2 and class 3 claims, who already received 72.5 percent of their allowed claims in August 2013, and will get the remaining balance in this next distribution. But the judge told the trustee to hold off on distributing $7.7 million to a group of hedge fund managers whose class 3 claims have been called into question by a group of investors led by Razorback Funding LLC that are known as the Razorback plaintiffs, the report related. The investors' assertions that the funds' claims should be reduced because of recoveries from settlements with TD Bank NA led the trustee to file an adversary suit in December asking for clarification from the court on the issue, the report said. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case is represented by Michael Goldberg, Esq., at Akerman Senterfitt. RRA won approval of an amended liquidating Chapter 11 plan pursuant to the Court's July 17, 2013 confirmation order. The revised plan, filed in May, is centered around a $72.4 million settlement payment from TD Bank NA. SAINT MICHAEL MOTOR: Bid to Withdraw Bankruptcy Reference Nixed --------------------------------------------------------------- The adversary proceeding commenced by Marianna Williams, the Chapter 7 trustee for debtor Saint Michael Motor Express, against defendants Flying J, Inc., et al., will stay in bankruptcy court for the Western District of Tennessee after Chief District Judge J. Daniel Breen denied a joint motion of the parties to withdraw the bankruptcy reference. Other defendants in the case are FJ Management, Inc. d/b/a Flying J, Inc.; Flying J Insurance Services, Inc. or its successor, the Buckner Company; Carolina Casualty Insurance Company; Transportation Alliance Bank, Inc.; Transportation Alliance Leasing, LLC; TAB Bank, Inc.; TAB Bank, Inc. d/b/a Transportation Alliance Leasing, LLC; Gresham & Associates, LLC; Gresham & Associates, Inc.; Gresham & Associates of Indiana, Inc.; Jagjit ("J.J.") Singh; and Stephen Parker. In the Adversary Proceeding, the trustee alleged that the Defendants acted in concert to defraud Saint Michael and demanded a jury trial. The case before the District Court is, MARIANNA WILLIAMS, Plaintiff, v. FLYING J INC., et al., Defendants, No. 14-1184 (W.D. Tenn.). A copy of the District Court's Dec. 31 Order is available at http://is.gd/9GmHAOfrom Leagle.com. Saint Michael Motor Express filed for Chapter 11 bankruptcy (Bankr. W.D. Tenn. Case No. 08-11838) on May 22, 2008. The case was converted to a Chapter 7 liquidation on Oct. 13, 2009. Saint Michael Motor Express is represented by: Henry C. Shelton, III, Esq. ADAMS AND REESE, LLP Crescent Center 6075 Poplar Avenue, Suite 700 Memphis, TN 38119 Tel: 901-524-5271 Fax: 901-524-5419 E-mail: hank.shelton@arlaw.com Plaintiff Marianna Williams is represented by: J. Houston Gordon, Esq. Amber Griffin Shaw, Esq. LAW OFFICES OF J. HOUSTON GORDON 114 West Liberty Avenue Covington, TN 38019 Tel: (901) 476-7100 - and - John L. Ryder, Esq. HARRIS SHELTON HANOVER WALSH, PLLC 40 South Main Street #2700 Memphis, TN 38103 Tel: (901) 525-1455 E-mail: jryder@harrisshelton.com Defendants Flying J, Inc., et al are represented by: Jonathan Edward Nelson, Esq. BASS BERRY & SIMS PLC The Tower at Peabody Place 100 Peabody Place, Suite 900 Memphis, TN 38103 Tel: (901) 543-5988 Fax: (877) 521-2817 E-mail: jenelson@bassberry.com Defendant Carolina Casualty Insurance Company is represented by: Carl Wyatt, Esq. James F. Horner, Jr., esq. GLASSMAN WYATT TUTTLE & COX, P.C. 26 N. Second Street Memphis, TN 38103 Tel: 901-527-4673 E-mail: cwyatt@gewwlaw.com jhorner@gewwlaw.com Defendants Transportation Alliance Bank, Inc., et al., are represented by: David J. Harris, Esq. BURCH PORTER & JOHNSON 130 North Court Avenue Memphis, TN 38103 Tel: (901) 524-5120 Fax: (901) 524-5024 E-mail: dharris@bpjlaw.com - and - Douglas P. Farr, Esq. Michael A. Gehret, Esq. SNELL & WILMER L.L.P. Gateway Tower West 15 West South Temple, Suite 1200 Salt Lake City, UT 84101-1547 Tel: 801-257-1863 E-mail: dfarr@swlaw.com mgehret@swlaw.com Defendants Gresham & Associates, LLC, et al., are represented by: S. Newton Anderson, Esq. THE LAW OFFICES OF DON G. DECOUDRES P.O. Box 36988 100 Concourse Parkway, Suite # 155 Birmingham, AL, 35236 Tel: (205) 988-5463 Fax: (205) 988-9538 Defendant Jagjit Singh is represented by: Alan C. Bradshaw, Esq. James E. Ji, Esq. MANNING CURTIS BRADSHAW & BEDNAR 136 East South Temple, Suite 1300 Salt Lake City, Utah 84111 Tel: 801-363-5678 Fax: 801-364-5678 E-mail: abradshaw@mc2b.com jji@mc2b.com - and - Amber D. Floyd, Esq. Douglas M. Alrutz, Esq. WYATT TARRANT & COMBS, LLP 1715 Aaron Brenner Drive, Suite 800 Memphis, TN 38120 Tel: 901-537-1071 Fax: 901-537-1010 E-mail: afloyd@wyattfirm.com dalrutz@wyattfirm.com SAMUEL WYLY: Judge Won't Expand $188M Judgment In Fraud Case ------------------------------------------------------------ Law360 reported that a New York federal judge refused the U.S. Securities and Exchange Commission's attempt to expand an earlier $188 million judgment against Texas tycoon Sam Wyly and the estate of his late brother, Charles Wyly Jr., in an alleged fraud scheme. According to the report, U.S. District Judge Shira A. Scheindlin told federal authorities to recalculate the figures in their request for additional damages so that it wouldn't include a large amount of allegedly ill-gotten gains from securities that were never sold. The SEC case is SEC v. Wyly et al., case number 1:10-cv-05760, in the U.S. District Court for the Southern District of New York. About Samuel Wyly Samuel Wyly filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 14-35043) on Oct. 19, 2014, weeks after a judge ordered him to pay several hundred million dollars in a civil fraud case. In September, a federal judge ordered Mr. Wyly and the estate of his deceased brother to pay more than $300 million in sanctions after they were found guilty of committing civil fraud to hide stock sales and nab millions of dollars in profits. SAN BERNARDINO, CA: City Council Now Involved in Plan Discussions ----------------------------------------------------------------- Ryan Hagen, writing for The Sun, reported that the city of San Bernardino, in California, has a "work plan" to prepare its bankruptcy exit plan, and it's been reviewed by the entire City Council -- not just the small team that previously was allowed to know details of the confidential mediation where much of the city's bankruptcy plan has been ironed out. According to the report, City Attorney Gary Saenz said the council will now meet regularly with the bankruptcy team. Mr. Saenz, however, said that as mediation with creditors continues, the council representatives will be subject to the confidentiality order and will not be at liberty to discuss particulars. About San Bernardino, Calif. San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debts of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joined two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. The City was granted Chapter 9 protection on Aug. 28, 2013. SANDRINE'S LIMITED: Can Proceed with Jan. 28 Auction ---------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that a bankruptcy judge in Boston has approved the procedures allowing Sandrine's Bistro, a French restaurant located on Harvard Square in Cambridge, Massachusetts, to proceed with a Jan. 28 auction of its assets. According to the report, Bato Catering Inc. has agreed to pay $480,000 cash and waive loans to buy almost all of the restaurant's assets. Jan. 16 is the deadline for competing bids, the report said. If no higher offer emerges, the court may approve the sale to Bato Catering without a hearing, the report added. Based in Cambridge, Massachusetts, Sandrine's Limited Liability Company filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 14-15702) on Dec. 10, 2014, disclosing $35,000 in assets against $1.37 million in liabilities. The petition was signed by Gwyneth B. Trost, manager and the Debtor's majority owner. Judge William C. Hillman presides over the case. Alex F. Mattera, Esq., at Demeo, LLP, serves as the Debtor's bankruptcy counsel. SEARS METHODIST: Reaches Agreement With Texas Veterans Land Board ----------------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that Sears Methodist Retirement System Inc. has an agreement to give up management responsibility for three facilities owned by the Texas Veterans Land Board, in the process generating $4 million for creditors. According to the report, under the agreement, Veterans Land Board will pay $4 million, representing money owed to Senior Dimensions Inc., one of the bankrupt Sears Methodist affiliates, in connection with the existing management agreements. Any additional amounts owed by VLB under the agreements will be paid after a 45-day audit, the report related. About Sears Methodist As a leading Texas senior living icon established on Christian principles, Sears Methodist Retirement System Inc. provides secure, rewarding, and luxurious residency to seniors. The system includes: (i) eight senior living communities located in Abilene, Amarillo, Lubbock, Odessa and Tyler, Texas; (ii) three veterans homes located in El Paso, McAllen and Big Spring, Texas, managed by Senior Dimensions, Inc., pursuant to contracts between SDI and the Veterans Land Board of Texas; and (iii) Texas Senior Management, Inc. ("TSM"), Senior Living Assurance, Inc. ("SLA") and Southwest Assurance Company, Ltd. ("SWAC"), which provide, as applicable, management and insurance services to the System. Sears Methodist Senior Housing, LLC, is the general partner of, and controls .01% of the interests in, Canyons Senior Living, L.P. ("CSL"). Sears Methodist and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 14- 32821) on June 10, 2014. The cases are assigned to Judge Stacey G. Jernigan. The Debtors' counsel is Vincent P. Slusher, Esq., and Andrew Zollinger, Esq., at DLA Piper LLP (US), in Dallas, Texas; and Thomas R. Califano, Esq., Gabriella L. Zborovsky, Esq., and Jacob S. Frumkin, Esq., at DLA Piper LLP (US), in New York. The Debtors' financial advisor is Alvarez & Marsal Healthcare Industry Group, LLC, while the Debtors' investment banker is Cain Brothers & Company, LLC. The Debtors' notice, claims and solicitation agent is GCG Inc. The Debtors have sought and obtained an order authorizing joint administration of their Chapter 11 cases. The U.S. Trustee has appointed five members to the Official Committee of Unsecured Creditors. The Committee is represented by Clifton R. Jessup, Jr., Esq., and Bryan L. Elwood, Esq., at Greenberg Traurig, LLP, in Dallas, Texas. SENTINEL MANAGEMENT: Feds Seek Stiff Sentence For 'Greedy' Exec --------------------------------------------------------------- Law360 reported that a former Sentinel Management Group Inc. executive who cooperated with the government should spend 10 years in prison and repay $665 million in customer funds lost in a futures scheme that bankrupted the firm in 2007, Illinois federal prosecutors recommended. According to the report, the prosecutors requested that Charles K. Mosley, Sentinel's former vice president and head trader who cooperated in the government's case against ex-CEO Eric A. Bloom, be sentenced to the statutory maximum prison term allowed under a plea bargain he accepted in October 2013. The case is USA v. Bloom et al., Case No. 1:12-cr-00409 (N.D. Ill.). About Sentinel Management Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition (Bankr. N.D. Ill. Case No. 07-14987) on Aug. 17, 2007. Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represented the Debtor. Lawyers at Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represented the Official Committee of Unsecured Creditors. When the Debtor sought bankruptcy protection, it estimated assets and debts of more than $100 million. On Aug. 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq., at Jenner & Block LLP, represent the Chapter 11 Trustee. The Court confirmed the Fourth Amended Chapter 11 Plan of Liquidation for Sentinel on Dec. 15, 2008, which created a Liquidation Trust. The Plan became effective Dec. 17, 2008, and Mr. Grede was appointed Liquidation Trustee. SOURCE HOME: Gets Approval of $675,000 Warn Act Settlement ---------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that U.S. Bankruptcy Judge Kevin Gross in Delaware has approved a settlement of a class action brought on behalf of Source Home Entertainment LLC workers who were fired without the 60 days' notice required by the so-called Warn Acts under federal and California law. According to the report, the settlement calls for a payment of $675,000, one-third of which will go to the workers' lawyers. The settlement won't take effect until a Chapter 11 plan of liquidation is confirmed and implemented by the company, the report related. 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. SOUTH EDGE: C&S Can't Recover From Estate, 9th Circuit Says ----------------------------------------------------------- A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit upheld a district court order affirming the bankruptcy court's decision allowing C&S Company's claim to proceed as nonrecourse, but barring recovery from South Edge LLC's bankruptcy estate. C&S argues that the bankruptcy court made an error of law, and therefore abused its discretion, when it determined that the Stipulation Regarding Relief from the Automatic Stay unambiguously prevented C&S from recovering against South Edge's bankruptcy estate. The Ninth Circuit, however, held that the bankruptcy court did not abuse its discretion in sustaining the Estate's objection to C&S's proof of claim. Contrary to C&S's assertion, the bankruptcy court did not find that the Stipulation was subject to more than one reasonable interpretation. Instead, the bankruptcy court repeatedly stated that the Stipulation's terms were "clear." In the Stipulation, C&S promised that it would not "exercise any right, remedy or claim" against South Edge or South Edge's bankruptcy estate. "Any claim" unambiguously includes a claim made within bankruptcy proceedings. A contract is not ambiguous "simply because the parties disagree on how to interpret their contract," the Ninth Circuit said, citing Galardi v. Naples Polaris, LLC, 301 P.3d 364, 366 (Nev. 2013). Because the terms of the Stipulation are unambiguous, any extrinsic evidence of the parties' intentions with respect to those terms is irrelevant, the Ninth Circuit said, citing Kaldi v. Farmers Ins. Exch., 21 P.3d 16, 21 (Nev. 2001). The appellate case is, C&S COMPANY, INC., Plaintiff-Appellant, v. CYNTHIA NELSON, Chapter 11 Trustee of the Estate of South Edge, LLC; et al., Defendants-Appellees, NO. 12-17255 (9th Cir.). A copy of the Ninth Circuit's Jan. 2 Memorandum is available at http://is.gd/7Nx8Kwfrom Leagle.com. About South Edge Las Vegas, Nevada-based South Edge LLC owns the Inspirada project, an uncompleted 2,000-acre residential development in Henderson, Nevada, about 16 miles (26 kilometers) southeast of Las Vegas. The eight owners of the project include an affiliate of KB Home, a 49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer Homes USA Inc. with 2.6%. JPMorgan Chase Bank, N.A., Credit Agricole Corporate and Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968) on Dec. 9, 2010, against South Edge, LLC. The petitioning creditors are part of a lender group that provided a $595 million credit. New York-based JPMorgan serves as lender and agent for the group. South Edge filed motions to dismiss the involuntary petition. The Court conducted a contested trial on Jan. 24 and 25, 2011, and Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order for relief under Chapter 11 of the Bankruptcy Code against the Debtor and issued an order directing the appointment of a chapter 11 trustee. The United States Trustee appointed Cynthia Nelson to serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved the appointment three days later. South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel. The Chapter 11 trustee also tapped Schwartzer & McPherson Law Firm as local counsel. Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., are represented by lawyers at Morrison and Foerster LLP; and Lewis and Roca LLP. Credit Agricole is represented by lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury & Standish. On Oct. 27, 2011, the Bankruptcy entered an order confirming a joint plan of reorganization that will implement a settlement negotiated in May by the secured lenders with the Chapter 11 trustee and the homebuilders that represented 92% of the ownership interests in the project. The plan was proposed by JPMorgan Chase Bank, N.A., as administrative agent under the Prepetition Credit Agreement, and the settling homebuilders. The plan calls for the settling homebuilders to pay the lenders $335 million to settle their claims. Meritage filed the sole objection to the plan and was not part of the settling group. Meritage has taken an appeal from the confirmation order. A copy of the Joint Plan of Reorganization proposed by JPMorgan Chase Bank, N.A., as administrative agent under the prepetition credit agreement, and the Settling Builders (amended as of Oct. 21, 2011) is available for free at: http://bankrupt.com/misc/southedge.dkt1309.pdf A copy of the order confirming the Plan is available at: http://bankrupt.com/misc/southedge.dkt1335.pdf SOVEREIGN ASSETS: Liquidators Win U.S. Court Protection ------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that a bankruptcy judge in Manhattan has concluded that Israel is home to the "foreign main proceeding" of Sovereign Assets Ltd., allowing the company to seek protection under Chapter 15 of the U.S. Bankruptcy Code. According to the report, the liquidators said in court papers that former Chief Executive Officer Abraham Poznanski may have transferred U.S. assets without authorization to companies in which he has an interest. They said they wanted to use the U.S. court to help investigate transactions involving Poznanski and the U.S. assets, the report related. About Sovereign Assets Adv. Guy Gissin and Adv. Rami Kogan, solely in their capacity as Special Administrators, filed a petition for protection under Chapter 15 of the U.S. Bankruptcy Code for Sovereign Assets Ltd. (Bankr. S.D.N.Y. Case No. 14-13009) on Oct. 31, 2014. The Chapter 15 Petitioners are represented by Michael S. Devorkin, Esq., and Marc D. Rosenberg, Esq., at Golenbock, Eiseman, Assor Bell & Peskoe LLP. T-L BRYWOOD: Has Access to RCG-KC's Cash Collateral Until Jan. 31 ----------------------------------------------------------------- U.S. Bankruptcy Judge J. Philip Klingeberger signed off on an interim order that authorizes T-L Brywood LLC to use the cash collateral of RCG-KC Brywood LLC until Jan. 31, 2015. In return for T-L Brywood's continued interim use of the cash collateral, RCG-KC is granted security interests in its assets. T-L Brywood is also required to pay premiums for insurance to cover its assets from damage and to reserve funds to pay taxes on a real property known as Brywood Centre. A telephonic hearing on the continued use of cash collateral is scheduled for Jan. 18. About T-L Brywood T-L Brywood LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09582) on March 12, 2012. The case was transferred to the U.S. Bankruptcy Court for the Northern District of Indiana (Case. 13-21804) on May 14, 2013. T-L Brywood owns and operates a commercial shopping center known as the "Brywood Centre" -- http://www.brywoodcentre.com/-- in Kansas City, Missouri. The Property encompasses roughly 25.6 acres and comprises 183,159 square feet of retail space that is occupied by 12 operating tenants. The occupancy rate for the Property is approximately 80%. The Debtor and lender The PrivateBank and Trust Company reached an impasse over the terms and conditions of another extension of a mortgage loan on the Property. As a result, the Debtor filed the Chapter 11 case to protect the Property from foreclosure while the Debtor formulates an exit strategy from the reorganization case. As of the Petition Date, no foreclosure relating to the Property had been filed by the Lender. Judge Donald R. Cassling oversees the case. The Debtor is represented by David K. Welch, Esq., Arthur G. Simon, Esq., and Jeffrey C. Dan. Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtor disclosed total assets of $16.7 million and total liabilities of $14.0 million in its schedules. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. PrivateBank is represented by William J. Connelly, Esq., at Hinshaw & Culbertson LLP. No committee of creditors was appointed by the U.S. Trustee. TAMRAC INC: Former Bag Maker Confirms Ch. 11 Plan of Liquidation ---------------------------------------------------------------- Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that Tamrac Inc. received court approval on Dec. 15 for a liquidating Chapter 11 plan with full payment to holders of unsecured claims who aren't subordinated. According to the report, there was no opposition to confirmation of the plan or final approval of explanatory disclosure materials. The Troubled Company Reporter, on Sept. 16, 2014, reported that Tamrac has sold its business to Gura Gear LLC for $5.6 million, which sale allows full payment to unsecured creditors. The sale allowed payment of most of the principal balance owing to secured lender U.S. Bank NA, the report related. Tamrac Inc., a maker of bags for high-end photographic equipment, filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 14-bk-10076) in Woodland Hills, California, on Jan. 6, 2014. Judge Maureen Tighe presides over the case. The Debtor's counsel is Michael I. Gottfried, Esq., and Roye Zur, Esq., at Landau Gottfried & Berger LLP, in Los Angeles, California. The Debtor said it had $1 million to $10 million in assets and around the same amount of liabilities. The petition was signed by Jesselyn T. Cyr, president. THQ INC: Estate Launches Avoidance Suits to Claw Back $9M --------------------------------------------------------- Law360 reported that the estate for defunct video game developer THQ Inc. launched dozens of so-called avoidance actions in Delaware bankruptcy court, looking to claw back more than $9 million in payments the company made shortly before it filed for Chapter 11 protection. According to the report, roughly 70 lawsuits flooded the docket, each of which sought to recover alleged preference payments THQ said it made during the 90-day period before entering court protection two years ago. About THQ Inc. THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- was a worldwide developer and publisher of interactive entertainment software. The Company developed its products for all popular game systems, personal computers, wireless devices and the Internet. Headquartered in Los Angeles, California, THQ sold product through its network of offices located throughout North America and Europe. THQ Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. Michael R. Nestor, M. Blake Cleary and Jaime Luton Chapman at Young Conaway Stargatt & Taylor, LLP; and Oscar Garza at Gibson, Dunn & Crutcher LLP represent the Debtors. FTI Consulting and Centerview Partners LLC are the financial advisors. Kurtzman Carson Consultants is the claims and notice agent. Before the bankruptcy, Clearlake signed a contract to buy Agoura THQ for a price said to be worth $60 million. After a 22-hour auction with 10 bidders, the top offers brought a combined $72 million from several buyers who will split up the company. Judge Walrath approved the sales in January. Some of the assets didn't sell, including properties the company said could be worth about $29 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five persons to serve in the Official Committee of Unsecured Creditors. The Committee tapped Houlihan Lokey Capital as its financial advisor and investment banker, Landis Rath & Cobb as co-counsel and Andrews Kurth as counsel. THQ Inc. and its debtor affiliates notified the U.S. Bankruptcy Court for the District of Delaware that on Aug. 2, 2013, their Second Amended Chapter 11 Plan of Liquidation became effective. TLO LLC: Shareholders to Recover More Than $43 Million ------------------------------------------------------ Bill Rochelle and Sherri Toub, bankruptcy columnists for Bloomberg News, reported that holders of equity interests in TLO LLC, a provider of risk-mitigation services before its business was sold, will receive more than $43 million, over twice the minimum recovery predicted when the Chapter 11 plan was approved in May. According to the report, the company said the latest distribution to shareholders will move it "substantially closer" to closing the Chapter 11 case, while leaving sufficient reserves for administration and all disputed claims and equity interests still pending. About TLO LLC nka TLFO LLC TLO LLC, a provider of risk-mitigation services, filed a petition for Chapter 11 reorganization (Bankr. S.D. Fla. Case No. 13-20853) on May 9, 2013, in West Palm Beach, Florida, near the company's headquarters in Boca Raton. The petition was signed by E. Desiree Asher as CEO. Judge Paul G. Hyman, Jr., presides over the case. Robert C. Furr, Esq., and Alvin S. Goldstein, Esq., at Furr & Cohen, serve as the Debtor's counsel. Bayshore Partners, LLC is the Debtor's investment banker. Thomas Santoro and GlassRatner Advisory & Capital Group, LLC are the Debtor's financial advisors. Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at Genovese, Joblove & Battista, P.A., represent the Official Committee of Unsecured Creditors as counsel. The Debtor disclosed assets of $46.6 million and liabilities of $109.9 million, including $93.4 million in secured claims. The principal lender is Technology Investors Inc., owed $89 million. TII is owned by the estate of Hank Asher, the company's primary owner who died this year. There is $4.6 million secured by computer equipment. TROPICANA ENTERTAINMENT: Judge Resolves Fee Allocation Dispute -------------------------------------------------------------- The Liquidating LandCo Debtors and Tropicana Las Vegas, Inc. -- collectively, the "LandCo Debtors" -- and the Steering Committee of Lenders to the OpCo Debtors filed objections to the final fee applications filed by professional firms employed by the Debtors and the Official Committee of Unsecured Creditors. The issue to be determined by the Court is how to allocate the fees and expenses incurred by the Professionals through June 30, 2009 between the Reorganized OpCo Debtors and the Liquidating LandCo Debtors. The Steering Committee seeks a 50/50 allocation between the Reorganized OpCo Debtors and the Liquidating LandCo Debtors of the amounts ultimately allowed pursuant to the Fee Applications through the July 1, 2009 LandCo Plan Effective Date. The LandCo Debtors ask the Court to allocate to the LandCo Debtors only the fees attributable specifically to the LandCo Debtors through the July 1, 2009 Effective Date of the LandCo Plan for each Professional (based on an analysis of individual time entries set forth in the Fee Applications), plus a percentage of the fees for services its counsel has identified as unallocable equal to the ratio of identifiable LandCo and OpCo services for that Professional, with final allocations ranging from 1% to 15%. "Taking into account the totality of the record in this case and my own experience with these matters, often complex and contentious, I conclude that neither the Steering Committee's nor the LandCo Debtor's proposed allocation amounts are appropriate," Delaware Bankruptcy Judge Kevin J. Carey said in his Dec. 30 Memorandum available at http://is.gd/yri36Sfrom Leagle.com. Judge Carey said: -- the Steering Committee's proposed 50/50 allocation fails to account for the large disparity in the size of the operations or amount of debt held by the two groups of Debtors. The benefit that the LandCo Debtors supposedly received from litigation that was specific to particular OpCo Debtors is too tenuous to support a one-half allocation. -- the LandCo Debtor's proposed 90/10 allocation fails to consider that the Debtors, part of an extensive and intertwined corporate family, were managed and operated as a single enterprise for a large part of the bankruptcy case. Chapter 11 debtors and their professionals must undertake many time-consuming and expensive tasks, regardless of the size of the estate or the number of creditors. An allocation based solely on the amount of debt or number of casino properties would be inequitable. "[R]ecognizing that many services benefitted both Debtor groups, I conclude that the Professional Fees should be allocated 75% to the OpCo Debtors and 25% to the LandCo Debtors," Judge Carey said. The Steering Committee and the LandCo Debtors are directed to meet and confer to determine which fee objection issues are yet to be resolved and should file a joint statement with the Court reflecting the remaining issues, if any. The "Reorganized OpCo Debtors" are: Adamar Garage Corporation;; Argosy of Louisiana, Inc.; Atlantic-Deauville, Inc.; Aztar Corporation; Aztar Development Corporation; Aztar Indiana Gaming Company, LLC; Aztar Indiana Gaming Corporation; Aztar Missouri Gaming Corporation; Aztar Riverboat Holding Company, LLC; Catfish Queen Partnership in Commendam; Centroplex Centre Convention Hotel, L.L.C.; Columbia Properties Laughlin, LLC; Columbia Properties Tahoe, LLC; Columbia Properties Vicksburg, LLC; CP Baton Rouge Casino, LLC; CP Laughlin Realty, LLC; Hotel Ramada of Nevada Corporation; Jazz Enterprises, Inc.; JMBS Casino LLC; Ramada New Jersey Holdings Corporation; Ramada New Jersey, Inc.; St. Louis Riverboat Entertainment, Inc.; Tahoe Horizon, LLC; Tropicana Entertainment Holdings, LLC; Tropicana Entertainment Intermediate Holdings, LLC; Tropicana Entertainment, LLC; Tropicana Express, Inc.; and Tropicana Finance Corp. The professional firms employed by the Debtors are Kirkland & Ellis, LLP; AlixPartners, LLP; Ernst & Young, LLP; KPMG LLP; Lazard Freres & Co., LLC; Paul, Hastings, Janofsky & Walker LLP: and Richards, Layton & Finger, P.A. The professional firms employed by the Creditors Committee are Capstone Advisory Group, LLC; Lionel, Sawyer & Collins; Stroock & Stroock & Lavan LLP; and Morris, Nichols, Arsht & Tunnell, LLP. The objections included the final fee application of Warren H. Smith & Associates, P.C., which served as Fee Auditor. On May 5, 2009, the Delaware Bankruptcy Court entered Findings of Facts, Conclusions of Law, and Order Confirming First Amended Joint Plan of Reorganization of Tropicana Entertainment, LLC and Certain of its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code -- OpCo Confirmation Order -- thereby confirming the First Amended Joint Plan of Reorganization of Tropicana Entertainment, LLC and Certain of its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code. On the same day, the Court entered Findings of Facts, Conclusions of Law, and Order Confirming First Amended Joint Plan of Reorganization of Tropicana Las Vegas Holdings, LLC and Certain of its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code -- LandCo Confirmation Order -- thereby confirming the First Amended Joint Plan of Reorganization of Tropicana Las Vegas Holdings, LLC and Certain of its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code. About Tropicana Entertainment Tropicana Entertainment Inc. owned and operated nine casinos and resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey. The Company owns approximately 6,000 rooms, 9,000 slot positions and 250 table games. In addition, the Company owns a development property in Aruba. The company is based in Las Vegas, Nevada. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-10856) on May 5, 2008. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation from the Bankruptcy Court of a reorganization plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 (Bankr. D.N.J. Lead Case No. 09- 20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of Investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 2010, Tropicana Entertainment successfully emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, have obtained approval of a separate Chapter 11 plan. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as their claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have merged into Adamar of NJ In Liquidation, LLC. The merger and name change is in accordance with an Amended and Restated Purchase Agreement, which governs the sale and transfer of the operations of the Tropicana Casino and Resort - Atlantic City, including substantially all of the New Jersey Debtors' assets, to Tropicana Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana AC Sub Corp., free and clear of any and all liens, claims and encumbrances. TRUMP ENTERTAINMENT: Has Until April 7 to Remove Actions -------------------------------------------------------- The U.S. Bankruptcy court extended until April 7, 2015, Trump Entertainment Resorts, Inc., et al.'s time to file notices of removal of actions pursuant to 28 U.S.C. Sec. 1452. About Trump Entertainment 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 shutter its casinos. 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, 2014, and, absent union concessions, the Trump Plaza Hotel and Casino by Nov. 13, 2104. 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. The official committee of unsecured creditors tapped Gibbons P.C. as its co-counsel, the Law Office of Nathan A. Schultz, P.C., as co-counsel, and PricewaterhouseCoopers LLP as its financial advisor. ULTIMATE NUTRITION: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------------- The U.S. Trustee for Region 2 appointed three creditors of Ultimate Nutrition Inc. and Prostar Inc. to serve on the official committee of unsecured creditors: (1) Fonterra USA Inc. c/o Mark Piper, Regional Director 9525 W. Bryn Mawr, Suite 700 Rosemont, IL 60018 Telephone: (847) 928-1600 Email: mark.piper@fonterra.com (2) Bactolac Pharmaceutical Inc. c/o Renee Reynolds, Chief Financial Officer 7 Oser Avenue Hauppauge, NY 11788 Telephone: (631) 951-4908 Email: rreynolds@bactolac.com (3) The Hershey Company c/o Emily Moyer, Senior Credit Analyst P.O. Box 819 Hershey, PA 17033-0819 Telephone: (717) 534-4566 Email: emoyer@hersheys.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Ultimate Nutrition Ultimate Nutrition, Inc., develops and distributes nutritional supplements for body building, enhanced athletic performance and fitness. The products are sold worldwide in over 100 countries. The business was founded in 1979 by the late Victor H. Rubino, one of the top amateur power lifters in the United States at that time. The company has two facilities located in Farmington, Connecticut, one product distribution center in New Britain, Connecticut and a research and development center in West Palm Beach, Florida. Ultimate Nutrition and affiliate Prostar, Inc., sought Chapter 11 bankruptcy protection (Bankr. D. Conn. Case Nos. 14-22402 and 14-22403) on Dec. 17, 2014. The Debtors have tapped Pullman & Comley, in Bridgeport, Connecticut, as counsel; LaQuerre Michaud & Company, LLC, as accountant; and Marcum LLP, as financial advisor. Ultimate Nutrition estimated $10 million to $50 million in assets and debt. The schedules of assets and liabilities and statement of financial affairs are due Dec. 31, 2014. The 11 U.S.C. Sec. 341(a) meeting of creditors is slated for Jan. 14, 2015. The deadline to file claims is April 14, 2015. VALLEY VILLAGE: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Valley Village Heights, LLC 5222 5224 Vantage Avenue Valley Village, CA 91607 Case No.: 15-10028 Chapter 11 Petition Date: January 5, 2015 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Hon. Victoria S. Kaufman Debtor's Counsel: M Jonathan Hayes, Esq. Matthew D. Resnik, Esq. SIMON RESNIK HAYES LLP 15233 Ventura Blvd., Suite 250 Sherman Oaks, CA 91403 Tel: (818) 783-6251 Fax: (818) 827-4919 Email: jhayes@srhlawfirm.com matt@srhlawfirm.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Oren Yaccobe, managing member. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb15-10028.pdf VARIANT HOLDING: Stipulation Reached on The Oaks' Properties ------------------------------------------------------------ The Bankruptcy Court approved a stipulation between debtor Variant Holding Company, LLC, and lender Arbor Realty SR, Inc. Prior to the Petition Date, Arbor Realty ("Lender") made a secured loan in the original principal amount of $5 million to The Oaks at Stonecrest Apartments, LLC, pursuant to that certain Loan Agreement, dated as of May 17, 2013. The Loan is outstanding and unpaid. The borrower, The Oaks, is a wholly-owned property-owning subsidiary of the Debtor. On motion of the Debtor, on Nov. 3, 2014, the Court entered an order approving a settlement agreement with the Beach Point Funds. The settlement agreement provides, among other things, that the Beach Point Funds will provide a DIP Loan to the Debtor. The Settlement further provides for a sale process with respect to certain "properties". The Oaks' assets, which are included within the definition of properties, serve as the collateral for the Loan. Absent payment in full of all amounts due and owing under the Loan, the Collateral may not be sold or otherwise transferred without the Lender's consent. In an effort to address the Lender's consent with the Settlement Agreement, The Oaks and the Lender have entered into a stipulation. Under the stipulation, the Debtor will agree: -- that the The Oaks will not guarantee, or otherwise be an obligor, under the DIP Loan, nor will any of the Collateral or any part of the Debtor's ownership interest in The Oaks be used to secure the DIP Loan; -- that absent payment in full of all amounts due and owing with respect to the Loan, neither the Collateral nor all or any part of the Debtor's ownership in The Oaks may be sold or otherwise transferred without the Lender's prior written consent; and -- to give the Lender prior written notice of any proposed sale or any other transfer of the Collateral or any part of the Debtor's ownership interest in the Borrower. A copy of the terms of Motion is available for free at: http://bankrupt.com/misc/VariantHolding_Stipulation.pdf About Variant Holding Variant Holding Company, LLC, and its affiliates are a commercial real estate company with indirect ownership in 27 apartment complexes and other real property interests in Arizona, Georgia, Maryland, Nevada, South Carolina, Texas and Virginia. Variant Holding commenced bankruptcy proceedings under Chapter 11 of the U.S. Bankruptcy Code in Delaware (Case No. 14-12021) on Aug. 28, 2014. Tucson, Arizona-based Variant Holding estimated $100 million to $500 million in assets and less than $100 million in debt. The Debtor has tapped Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, as counsel. VISUALANT INC: Extends CEO Notes Due Date to March 2015 ------------------------------------------------------- Visualant, Inc., entered into an Amendment to Demand Promissory Note for $300,000 with Ronald Erickson, the Company's chief executive officer or entities in which Mr. Erickson has a beneficial interest. The December 31, 2014 Amendment to Demand Promissory Note for $300,000 provides for interest of 3% per annum and is due March 31, 2015. The Note Amendment to Demand Promissory Note provides for a second lien on company assets if not repaid by March 31, 2015, or converted into convertible debentures or equity on terms acceptable to the Holder. On Dec. 31, 2014, the Company entered into an Amendment 2 to Demand Promissory Note dated March 31, 2014 and as Amended on July 17, 2014, with Mr. Erickson or entities in which Mr. Erickson has a beneficial interest. The Amendment 2 to Demand Promissory Note for $300,000 extended the due date of this from Sept. 30, 2014, to March 31, 2015. The Note provides for interest of 3% per annum and provides for a second lien on company assets if not repaid by March 31, 2015, or converted into convertible debentures or equity on terms acceptable to the Holder. On Dec. 31, 2014, the Company entered into an Amendment 3 to the Demand Promissory Note dated Jan. 10, 2014, and as Amended on March 31, 2014 and July 17, 2014 with Mr. Erickson or entities in which Mr. Erickson has a beneficial interest. The Amendment 3 to the Demand Promissory Note for $200,000 extended the due date from Sept. 30, 2014, to March 31, 2015. The Note provides for interest of 3% per annum and provides for a second lien on company assets if not repaid by March 31, 2015, or converted into convertible debentures or equity on terms acceptable to the Holder. On Dec. 19, 2013, the Company entered into a $200,000 Note Payable with Umpqua Bank. The Note Payable has a maturity date of Dec. 31, 2014, and provided for interest of 2.79%, subject to adjustment annually. This Note Payable maturity date was extended to Dec. 31, 2015, and provides for interest at 3.25%. About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $6.60 million for the year ended Sept. 30, 2013, as compared with a net loss of $2.72 million for the year ended Sept. 30, 2012. As of June 30, 2014, the Company had $3.46 million in total assets, $7.09 million in total liabilities, all current, $72,713 in non-controlling interest, and a $3.70 million total stockholders' deficit. PMB Helin Donovan, LLP, in Seattle, Washington, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2013. The independent auditors noted that the Company has sustained a net loss from operations and has an accumulated deficit since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. [*] BofA Sued by Credit Union Regulator for MBS Oversight --------------------------------------------------------- Patricia Hurtado and David Voreacos, writing for Bloomberg News, reported that Bank of America Corp. and US Bancorp were sued by the National Credit Union Administration Board, the agency that oversees federal credit unions, which claimed the banks failed as trustees over securities backed by home mortgages that defaulted after the 2008 credit crisis. According to the report, the lawsuit, filed in Manhattan federal court, claims that Bank of America and US Bancorp served as trustees for residential mortgage-backed securities in 99 trusts with an original face value of $5.8 billion. The agency alleged that the banks failed to review mortgage loan files for irregularities, missing "numerous problems," including that the trusts "suffered enormous losses due to the high number of mortgage defaults, delinquencies, and foreclosures caused by defective loan origination and underwriting," the report related. The case is National Credit Union Administration Board v. U.S. Bank National Association, 14-cv-9928, U.S. District Court, Southern District of New York (Manhattan.) [*] Ocwen Financial Pact Compliance under Fire ---------------------------------------------- Alan Zibel, writing for The Wall Street Journal, reported that an independent monitor said mortgage servicer Ocwen Financial Corp. failed to ensure that its efforts to comply with a 2012 mortgage- abuse settlement were sufficiently independent from the company's managers. According to the report, Joseph A. Smith Jr., a watchdog charged with measuring mortgage firms' performance under the 2012 settlement, said in an interview he has directed accounting firm McGladrey LLP to examine Ocwen's work after an Ocwen employee alleged the company's internal review of mortgage-servicing practices wasn't truly independent. After the 2012 settlement, firms were required to form review committees to oversee their adherence to the pact, the Journal said. [*] U.S. Agency Probes Currency Exchange Site That Vanished w/ Cash ------------------------------------------------------------------- David Evans and Willem Marx, writing for Bloomberg News, reported that the U.S. Department of Justice has begun a criminal investigation into the foreign exchange trading website Secureinvestment.com, which vanished last May 1 with as much as $1 billion from investors around the world. According to the report, the Financial and Capital Market Commission in Latvia is also probing the involvement of Latvian banks used by Secure Investment, says agency spokeswoman Elina Avotina. ********* 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. 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 nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. 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 2015. 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 202-362-8552. *** End of Transmission ***