/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/150902.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, September 2, 2015, Vol. 19, No. 245 Headlines 1111 MYRTLE AVENUE: Case Summary & 8 Largest Unsecured Creditors 1111 MYRTLE AVENUE: Files for Chapter 11 to Find New Buyer 315 W 35TH ASSOCIATES: $43 Million Sale to Fund Plan Payments ALLEN ACADEMY: S&P Cuts Rating on 2013 $17MM Refunding Bonds to B+ ALLIED NEVADA: Gets Court Approval to Obtain Exit Financing AMERICAN NATURAL ENERGY: Involuntary Chapter 11 Case Summary ARCHDIOCESE OF ST. PAUL: Victims Seek to Restrict Claims Access BOOMERANG TUBE: Brown Rudnick Approved as Committee's Co-Counsel BULLIONDIRECT INC: Files Schedules of Assets and Liabilities CALIFORNIA COMMUNITY: Sept. 9 Hearing on 2nd Am. Disclosures CONNIE STEVENS: To Emerge from Bankruptcy With Millions CRP-2 HOLDINGS: Files Schedules of Assets and Liabilities CRP-2 HOLDINGS: Proofs of Claim Due Sept. 18, 2015 CVR REFINING: S&P Raises Corp. Credit Rating to BB-, Outlook Stable DELTROPICO DESIGNS: Case Summary & 20 Largest Unsecured Creditors DORAL FINANCIAL: Fitch Withdraws 'D' LT Issuer Default Rating DORSEY MOTOR: Case Summary & 10 Largest Unsecured Creditors DOWNRIGHT DISPOSAL: Case Summary & 3 Largest Unsecured Creditors EVEREST HOLDINGS: Moody's Confirms 'B2' CFR, Outlook Stable FALCON GOLD: Executes Limited Forbearance Agreement FREEDOM INDUSTRIES: Plan Goes to Creditors for Voting FREESCALE SEMICONDUCTOR: Fitch Keeps 'B+' LT IDR on Watch Positive HEALTHSOUTH CORP: CareSouth Deal No Impact on Moody's 'Ba3' CFR HERTZ CORP: S&P Affirms 'B1' Corp. Family Rating, Outlook Stable HRP INVESTMENTS: Case Summary & 6 Largest Unsecured Creditors IAMGOLD CORP: S&P Cuts Issue-Level Rating to 'B', Outlook Stable LEHMAN BROTHERS: Bankr. Court Has Jurisdiction Over "Ruby" Deal LENNAR CORP: S&P Affirms 'BB' Corp. Credit Rating LOYALIST GROUP: Receives Default Notice for Forbearance Breach LUCA INTERNATIONAL: SEC Seeks Receiver After Ch. 11 Filing MAC-ACCESS: Case Summary & 20 Largest Unsecured Creditors MAJESTIC STONE: Case Summary & 20 Largest Unsecured Creditors MANISTIQUE PAPERS: Debtor and Committee Dismiss Case MANTUA GARDENS: Voluntary Chapter 11 Case Summary NEP GROUP: Moody's Retains 'B2' CFR Over CMI Acquisition NEW YORK TIMES: S&P Revises Outlook to Pos. & Affirms 'B+' CCR NORTHWEST HEALTH: Case Summary & 5 Largest Unsecured Creditors ORLANDO, FL: S&P Raises Rating on 2008C 3rd Lien Bonds to 'CCC+' PACIFIC RECYCLING: Section 341 Meeting Set for Sept. 17 PATRIOT COAL: Gets Court Order Protecting Confidential Info PATRIOT COAL: To Raise $50 Million in Rights Offerings PETERSBURG REGENCY: To Seek Plan Confirmation Sept. 9 RADIOSHACK CORP: Creditors Sue Hedge Fund Standard General RELATIVITY MEDIA: Has Interim Nod to Pay Critical Vendors RESPONSE GENETICS: Rust Omni Approved as Claims Agent RESPONSE GENETICS: U.S. Trustee, SWK Object to KEIP RESPONSE GENETICS: Wins Approval to Pay Critical Vendors ROADRUNNER ENTERPRISES: Had Until August 31 to Use Cash Collateral S&S STEEL: Case Summary & 20 Largest Unsecured Creditors SEBRING MANAGEMENT: Has Cash Use Until Sept. 3 SHREE MELDIKRUPA: Case Summary & 5 Largest Unsecured Creditors STEWARD HEALTH: S&P Affirms B- Corp. Credit Rating, Outlook Stable SULLIVAN INTERNATIONAL: Files Amended Schedules of Asset and Debt T-L CHEROKEE: $24 Mil. Settlement With MB Financial Approved TERVITA CORP: S&P Affirms 'B-' Corp. Credit Rating, Outlook Stable TOP SHELV: Case Summary & 20 Largest Unsecured Creditors TROCOM CONSTRUCTION: Had Until August 31 to Use Cash Collateral TROCOM CONSTRUCTION: Has Authority to Obtain $3.4MM in DIP Loan VILLA GROUP: Voluntary Chapter 11 Case Summary WESCO INTERNATIONAL: S&P Affirms 'BB' CCR, Outlook Stable WOLVERINE WORLD: S&P Hikes Corp. Credit Rating to 'BB+' ********* 1111 MYRTLE AVENUE: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: 1111 Myrtle Avenue Group LLC 20 West 47th Street New York, NY 10036 Case No.: 15-12454 Type of Business: Single Asset Real Estate Chapter 11 Petition Date: September 1, 2015 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Hon. Shelley C. Chapman Debtor's Counsel: J. Ted Donovan, Esq. Kevin J. Nash, Esq. GOLDBERG, WEPRIN, FINKEL, GOLDSTEIN LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212)-221-5700 Fax: (212)-422-6836 Email: TDonovan@GWFGlaw.com KNash@GWFGlaw.com Total Assets: $29.6 million Total Liabilities: $6.2 million The petition was signed by Aaron C. Ambalu, manager. List of Debtor's eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Best Carpets & Interiors $20,896 NYC Water Board $19,016 Judi Construction Corp. $9,190 Consolidated Edison Company of NY Services $6,980 Zahmel $1,760 Equal Carpet $869 PMK Best Quality Inc. $820 Filco $778 1111 MYRTLE AVENUE: Files for Chapter 11 to Find New Buyer ---------------------------------------------------------- 1111 Myrtle Avenue Group, LLC, has sought Chapter 11 bankruptcy protection to commence an immediate sale of its property with a new buyer after Myrtle Property Holdings LLC failed to close the purchase of the Property on July 28, 2015. The Debtor entered into a contract of sale with the Defaulting Purchaser on June 20, 2014, to sell a property located at 1103-1111 Myrtle Avenue, Brooklyn, NY (Block 1584, Lots 39, 50 and 51) for $20,500,000. The purchase price includes a total deposit of $7,500,000 funded in stages which was released to the Debtor. The Property is currently leased by two commercial tenants, with the United States of America occupying most of the commercial space as a Social Security Office pursuant to a lease dated June 15, 2005. A commercial retail store occupies the remainder of the premises. Prior to July 28, 2015, Myrtle Property filed a claim for specific performance in the State Court alleging that the closing date of July 28, 2015, was purportedly unreasonable. The Debtor says the lawsuit is premature and constitutes an obvious effort to frustrate it and potentially place its Property in limbo for an extended period of time. Aaron C. Ambalu, manager of the Debtor, relates in a declaration filed with the Court that the the Debtor is severely prejudiced by the prospect of protracted litigation because it is seeking to effectuate a 1031 tax exchange. He adds the pending lawsuit impeded the Debtor's ability to finalize a contract to acquire a long term 31 year lease for two properties at 25 West 47th Street, New York, and 30 West 48th Street, New York, from Extell Corporation. The Debtor is seeking to utilize the protections and rights conferred by Chapter 11 to extricate the Property from unnecessary legal entanglements in favor of obtaining a relatively prompt resolution of the parties' respective rights under the defaulted contract in bankruptcy so that a 1031 tax exchange may be pursued anew if not with Extell. According to Mr. Ambalu, the institution of litigation by the Defaulting Purchaser potentially constitutes a default under the existing mortgage with United International Bank and could severely complicate pending negotiations with Government Service Administration. To move the process forward, the Debtor intends to couple the Chapter 11 filing with the commencement of an adversary proceeding declaring the Contract terminated and forfeiting the deposit as liquidated damages. The Debtor also intends to use the Chapter 11 to procure another purchaser for the Property. According to www.investopedia.com, Section 1031 is a section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes. Taxes on capital gains are not charged on the sale of a property if the money is being used to purchase another property - the payment of tax is deferred until property is sold with no re-investment. 1111 Myrtle Avenue Group LLC filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 15-12454) on Sept. 1, 2015. The petition was signed by Aaron C. Ambalu as manager. The Debtor disclosed total assets of $29.6 million and total liabilities of $6.2 million. Goldberg Weprin Finkel Goldstein LLP represents the Debtor as counsel. Judge Shelley C. Chapman is assigned to the case. 315 W 35TH ASSOCIATES: $43 Million Sale to Fund Plan Payments ------------------------------------------------------------- 315 W 35th Associates LLC has a Chapter 11 plan based upon the successful sale of its property for an amount of money that will be able to pay all the creditors in full and leave a surplus for the equity interests. The Bankruptcy Judge scheduled a sale of the Property for July 13, 2015, which was an open auction sale held in the Bankruptcy Court. There were two bidders at the auction sale and Mazel was the successful purchaser at $43,000,000. A closing will be scheduled in connection with confirmation of the Plan. To the extent that the sale proceeds are insufficient to pay all the unsecured creditors in full, there will be a distribution to the unsecured creditors on a pro rata basis who will be entitled to vote on the Plan. The Plan is based upon the premise that the Debtor obtained sufficient proceeds at the auction sale of the Property to allow for payment of all the secured, priority and administration creditors in full. If the sale proceeds are not sufficient to pay all the unsecured creditors in full, then the unsecured creditors will be paid on a pro rata basis from the balance of the proceeds of the auction sale. The Debtor's plan has 10 classes of creditors. Classes 1 through 7 are made up of creditors who are secured by a lien on the Property, as is more fully set forth in the Foreclosure Judgment, that enumerated which creditors are to be paid in a specific order as having liens on the Property. Each secured creditor is entitled to be paid after the secured creditors of a higher priority have been paid. The Debtor plans to satisfy the secured claims, the administration claims, the priority claims and the general unsecured claims through the auction sale of the Property. The Bankruptcy Court entered an order dated June 25, 2015 that authorized the sale free and clear of all liens and encumbrances, which will allow for the highest bidder at the sale to take title to the Property without any problems. Also, the Plan provides for the secured creditors to provide any documentation that is necessary to release their claims as of record in connection with the sale of the Property and the payment to the secured creditors pursuant to the Plan. A copy of the Second Amended Disclosure Statement dated Aug. 17, 2015, explaining the terms of the Amended Plan of Reorganization dated Aug. 17, 2015, is available for free at: http://is.gd/t3VGxw About 315 W 35th Associates 315 W 35th Associates LLC, owner of a parcel of real estate located at 315 West 35th Street, New York, sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 15-10877) on April 8, 2015. The Debtor, a Single Asset Real Estate, says the property is worth $40 million. Liabilities total $30.7 million. The Debtor tapped M. David Graubard, Esq., at Kera & Graubard, in New York, as bankruptcy counsel. ALLEN ACADEMY: S&P Cuts Rating on 2013 $17MM Refunding Bonds to B+ ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term rating to 'B+' from 'BB+' on Allen Academy, Mich.'s $17 million series 2013 public school academy revenue refunding bonds. The outlook is negative. "The rating downgrade reflects our view of Allen Academy's weak operating trends, with deficits expected in fiscal years 2015 and 2016, and our expectations of a bond covenant violation and fluctuating enrollment," said Standard & Poor's credit analyst Ryan Quakenbush. "In addition, the rating action takes into account our assessment of the school's recent one-year charter renewal and management transition, which have the potential, in our opinion, to impact performance during an already volatile period." "The negative outlook reflects our view that the school will likely post operating deficits through at least fiscal 2016 and violate the days' cash on hand bond covenant," Mr. Quakenbush added. Allen Academy is a charter school in Detroit, chartered by Ferris State University, that provides kindergarten through grade 12 educational services. ALLIED NEVADA: Gets Court Approval to Obtain Exit Financing ----------------------------------------------------------- A federal judge approved Allied Nevada Gold Corp.'s proposed financing that would help the company emerge from bankruptcy protection. The exit loan, approved by U.S. Bankruptcy Judge Mary Walrath, would provide the funding needed by the company to consummate its proposed Chapter 11 reorganization plan. A group of noteholders committed to provide the exit loan by purchasing new second lien convertible notes from Allied Nevada. The aggregate initial principal amount of the new second lien convertible notes to be issued by the company will be equal to the sum of the purchase price and a $5 million non-refundable put option payment, which will be payable in kind in the form of additional new second lien convertible notes. The maximum initial principal amount of the new second lien convertible notes on the effective date of the plan is $80 million, according to court filings. Judge Walrath also allowed the company to assume a restructuring support agreement with the noteholders and with its secured lenders, including The Bank of Nova Scotia Under the RSA, each of the parties agreed to support the restructuring transaction and vote all of its claims to accept the restructuring plan. The RSA will be terminated if Allied Nevada commits a material breach of the agreement, withdraws the plan or pursues another transaction. Another ground for termination of the RSA is the termination of the exit financing and the company's exclusive right to file and solicit acceptances of a plan, according to court filings. A copy of the RSA and the exit facility commitment letter is available without charge at http://is.gd/9jvD68 About Allied Nevada Gold Corp. Allied Nevada Gold Corp. (OTCMKTS: ANVGQ), a Delaware corporation, is a U.S.-based gold and silver producer engaged in mining, developing and exploring properties in the State of Nevada. ANV was spun off from Vista Gold Corp. in 2006 and began operations in May 2007. Nevada-based mining properties acquired from Vista include the Hycroft Mine, an open-pit heap leach operation located 54 miles west of Winnemucca, Nevada. ANV controls 75 exploration properties throughout Nevada as of Dec. 31, 2014. On March 10, 2015, ANV and 13 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 15-10503). The cases are assigned to Judge Mary F. Walrath. The Debtors have tapped Blank Rome LLP and Akin Gump Strauss Hauer & Feld LLP as attorneys; FTI Consulting Inc. as financial advisor; Moelis & Company as financial advisor; and Prime Clerk LLC as claims and noticing agent. ANV disclosed $941 million in total assets and $664 million in total debt as of Dec. 31, 2014. The U.S. Trustee appointed three creditors of the company to serve on the official committee of unsecured creditors. The Committee retained Arent Fox LLP as co-counsel, and Polsinelli PC as conflicts counsel. It hired Zolfo Cooper, LLC as bankruptcy consultant and financial advisors, and Upshot Services LLC as information agent. The U.S. Trustee also named an Official Committee of Equity Security Holders. The Equity Committee is represented by Cole Schotz P.C.'s Patrick J. Reilley, Esq., and Nicolas J. Brannick, Esq.; and LeClairRyan's Janice B. Grubin, Esq., Gregory J. Mascitti, Esq., Richard A. McGuirk, Esq., and Michael J. Crosnicker, Esq. The Equity Committee has hired Navigant Consulting, Inc. as financial advisor; and Runge, Inc. dba RungePincockMinarco as technical mining expert. AMERICAN NATURAL ENERGY: Involuntary Chapter 11 Case Summary ------------------------------------------------------------ Alleged Debtor: American Natural Energy Corporation 6100 South Yale Avenue, Suite 2010 Tulsa, OK 74136 Tel: (918) 481-1440 Case Number: 15-12229 Involuntary Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Hon. Elizabeth W. Magner Petitioners' Counsel: Philip Kirkpatrick Jones, Jr., Esq. LISKOW & LEWIS 701 Poydras St., Suite 5000 New Orleans, LA 70139-5099 Tel: (504) 581-7979 Fax: (504) 556-4108 Email: pkjones@liskow.com - and - Michael A. Crawford, Esq. TAYLOR, PORTER, BROOKS & PHILLIPS LLP Post Office Box 2471 Baton Rouge, LA 70821 Tel: (225) 387-3221 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Reamco, Inc. Sale of services/ $11,506 1149 Smede Hwy. goods Broussard, LA 70518 Tel: (337) 364-9244 C&M Contractors, Inc. Sale of services/ $29,351 4932 Kenal Road goods Lafitte, LA 70067 Tel: (504) 689-2013 Bayou Fuel Marine & Hardware Sale of services/ $79,077 Supplies, Inc. goods 4932 Kenal Road Lafitte, LA 70067 Tel: (504) 689-2013 Hillair Capital Investments Loans/Advances $3,793,897 L.P. 345 Lorton Avenue Suite 303 Burlingame, CA 94010 Tel: 650-762-5413 ARCHDIOCESE OF ST. PAUL: Victims Seek to Restrict Claims Access --------------------------------------------------------------- Tom Corrigan, writing for The Wall Street Journal, reported that lawyers representing more than 400 clergy sexual-abuse victims will head to court this week to fight a request from the Roman Catholic Archdiocese of St. Paul and Minneapolis's parishes for permission to review victims' confidential bankruptcy claims. According to the report, victims' lawyers said that if the parishes' request is approved by a judge, it could result in the dissemination of "unusually detailed and intensely personal" information to more than 1,000 additional recipients. About Archdiocese of St. Paul The Archdiocese of Saint Paul and Minneapolis was originally established by the Vatican in 1850 and serves a geographical area consisting of 12 greater Twin Cities metro-area counties in Minnesota, including Ramsey, Hennepin, Anoka, Carver, Chisago, Dakota, Goodhue, Le Sueur, Rice, Scott, Washington, and Wright counties. There are 187 parishes and approximately 825,000 Catholic individuals in the region. These individuals and parishes are served by 3999 priests and 173 deacons. The Archdiocese of St. Paul and Minneapolis filed for Chapter 11 protection (Bankr. D. Minn. Case No. 15-30125) in Minnesota on Jan. 16, 2015, saying it has large and growing liabilities related to child sexual abuse and that its pension obligations are underfunded. The Debtor disclosed $45,203,010 in assets and $15,890,460 in liabilities as of the Chapter 11 filing. The Debtor has tapped Briggs and Morgan, P.A., as Chapter 11 counsel; BGA Management LLC d/b/a Alliance Management as financial advisor; Lindquist & Vennum LLP as attorney. Eleven other dioceses have commenced Chapter 11 bankruptcy cases in the United States to settle claims from current and former parishioners who say they were sexually molested by priests. U.S. Trustee for Region 12 appointed five creditors to serve on the official committee of unsecured creditors. The U.S. Trustee appointed five creditors to serve on the Committee of Parish Creditors. Ginny Dwyer appointed as the acting chairperson of the committee until such time as the members can meet and officially elect their own person. * * * The Debtor's exclusive period for filing a Chapter 11 plan and disclosure statement ends on Nov. 30, 2015. BOOMERANG TUBE: Brown Rudnick Approved as Committee's Co-Counsel ---------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Boomerang Tube, LLC, to retain Brown Rudnick LLP as its co-counsel, nunc pro tunc to June 19, 2015. At the hearing, the Court questioned the firms about whether it was an established practice for attorneys to obtain payment for their fees and expenses incurred in defending fee applications. At the conclusion of the hearing, the Court permitted the firms to submit a supplemental brief identifying cases or materials evidencing the practice. The Committee on Aug. 17 submitted a supplemental brief in support of the application to authorize retention of Brown Rudnick (as well as Morris, Nichols, Arsht & Tunnell LLP) as co-counsel. The supplement identifies the established practice in the Circuit and others pursuant to which (a) estate professionals were reimbursed their fees and expenses incurred in defending their fee applications; and (b) attorneys are entitled to recover the costs of collecting their fees outside of chapter 11. As reported in the Troubled Company Reporter on Aug. 24, 2015, Andrew R. Vara, the Acting U.S. Trustee for Region 3, objected to the application. The U.S. Trustee said that Brown Rudnick sought to be paid from the Debtors' estates for any fees, costs or expenses, arising out of the successful defense of any fee application by Brown Rudnick in the bankruptcy cases in response to any objection to its fees or expenses. The U.S. Trustee asserted that the fee defense provisions violate the Code, ignore the express directives of the U.S. Supreme Court, and are otherwise unreasonable. The U.S. Trustee noted that the Supreme Court has held that Section 330(a) does not authorize a court to approve a law firm's fee for litigating its fee application. Cortland Capital Market Services LLC, in its capacity as administrative and collateral agent to the Term Lenders and the Term DIP Lenders, concurs with and joined the objection of the U.S. Trustee to the application to retain Brown Rudnick. Cortland objected to the entry of an order approving the retention of Brown Rudnick that would require the Debtors to indemnify Brown Rudnick for any fees accrued in the process of defending or prosecuting fee applications. The Committee Application The Committee, in its application, noted that Brown Rudnick, will, among other things: a. assist the Committee in preparing the applications, motions, memoranda, proposed orders, and other pleadings as may be required in support of positions taken by the Committee, including all trial preparation as may be necessary; b. confer with the professionals retained by the Debtors and other parties-in-interest, well as with such other professionals as may be selected and employed by the Committee; c. coordinate the receipt and dissemination of information prepared by and received from the Debtors' professionals, well as the information as may be received from professionals engaged by the Committee or other parties-in-interest in the cases. It is anticipated that the primary attorneys who will represent the Committee are Steven D. Pohl (whose current hourly rate is $1,070), Bennett S. Silverberg (whose current hourly rate is $885) and Sunni P. Beville (whose current hourly rate is $820). Other Brown Rudnick attorneys or paraprofessionals will from time to time provide legal services on behalf of the Committee in connection with these matters herein described. The hourly rates for Brown Rudnick attorneys and paraprofessionals are in effect, but are subject to periodic adjustments: Attorney $415 - $1,240 Paraprofessional $285 - $345 Mark DiGirolamo, the authorized representative of Nucor Corporation, and chairman of the Committee, submitted a declaration in support of the application. About Boomerang Tube Boomerang Tube, LLC, is a manufacturer of welded Oil Country Tubular Goods ("OCTG") in the United States. OCTG are used by drillers in exploration and production of oil and natural gas and consist of drill pipe, casing and tubing. Boomerang has corporate offices in Chesterfield, Missouri and manufacturing facilities in Liberty, Texas, strategically located near major steel production centers and end-user markets. With a 487,000 square foot plant that houses two mills and heat treat lines and a contingent 119 acres, these facilities constitute the second largest alloy OCTG mill in North America. Access Tubulars, LLC, owns 81% of the equity interests in Boomerang. Boomerang Tube and its subsidiaries BTCSP LLC and BT Financing sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 15-11247) on June 9, 2015, with a deal with lenders on a balance sheet restructuring that would convert $214 million of debt to 100% of the common stock of the reorganized company. The Debtor disclosed $272,205,337 in assets and $300,375,946 in liabilities as of th Chapter 11 filing. The cases are assigned to Judge Mary F. Walrath. The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as attorneys; Lazard Freres & Co. LLC, as financial advisor; and Donlin, Recano & Co., Inc., as claims and noticing agent. Boomerang Tube disclosed $272,205,337 in assets and $300,375,946 in liabilities as of the Chapter 11 filing. On June 30, 2015, the Debtor filed a bankruptcy-exit plan and explanatory disclosure statement. The U.S. Trustee overseeing the Chapter 11 case appointed five creditors to serve on an official committee of unsecured creditors. The Committee is represented by Brown Rudnick LLP., and Morris, Nichols, Arsht & Tunnel LLP. BULLIONDIRECT INC: Files Schedules of Assets and Liabilities ------------------------------------------------------------ BullionDirect Inc. filed with the U.S. Bankruptcy Court for the Western District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $486,107+ Unknown C. Property Claimed as Exempt D. Creditors Holding Secured Claims $16,353 E. Creditors Holding Unsecured Priority Claims $52 F. Creditors Holding Unsecured Non-Priority Claims $16,938,925 ----------- ----------- Total $486,107 $16,955,330 + Unknown A copy of the schedules is available for free at: http://bankrupt.com/misc/BullionDirect_44_SAL.pdf About BullionDirect BullionDirect, Inc. filed a Chapter 11 bankruptcy petition (Bankr. W.D. Tex. Case No. 15-10940) on July 20, 2015. Dan Bensimon signed the petition as president. The Debtor estimated assets of $10 million to $50 million and liabilities of at least $10 million. Joseph D. Martinec, Esq., at Martinec, Winn & Vickers, P.C., represents the Debtor as counsel. Judge Tony M. Davis presides over the case. The U.S. Trustee for Region 7 appointed three creditors to serve on an official committee of unsecured creditors. CALIFORNIA COMMUNITY: Sept. 9 Hearing on 2nd Am. Disclosures ------------------------------------------------------------ California Community Collaborative has a reorganization plan that provides that general unsecured creditors (Class 4) are to receive a distribution of 100% of their allowed claims, with interest, to be distributed through twice-annual disbursements over a period of no more than 36 months. The Allowed Secured Claim of San Bernardino County Tax Collector (Class 2.1) will be allowed shall be paid in full with penalties, costs, fees, and the interest to accrue at the statutory rate in accordance with the payment schedule calling for equal annual installments of $41,168. The Allowed Secured Claim California Bank & Trust (Class 2.2) will be allowed the amount of $9,526,765 as of the Confirmation Date, and shall bear interest at the rate 5.5% per year from the Confirmation Date. Equity security holder Merrell Schexnydre (Class 5) will retain his interest in the Debtor as same existed immediately prior to the Petition Date. The Plan provides that the Debtor will deposit post-confirmation rents and any proceeds of refinancing secured by the Real Property into a specific Creditor Account, and shall make disbursements to claim holders, including with priority the holders of claims with a security interest in such rents, from that account. To fund disbursements to claim holders under the Plan, the Debtor is to continue to operate its business and to lease space at the Real Property following the Confirmation Date, and is to use net rental income to fund disbursements to claim holders under the Plan. The Debtor will sell or refinance the Real Property, and net proceeds after payment of claims secured by the Real Property will be used to pay in full all Allowed Claims secured by the Real Property and to fund distributions under the Plan, including to the holders of Class 4 Allowed Claims. The hearing on the Disclosure Statement is set on Sept. 9, 2015. A copy of the Second Amended Disclosure Statement in support of its Plan of Reorganization dated Mar. 26, 2015, is available at: http://is.gd/T046x9 About California Community California Community Collaborative owns and rents to non-residential tenants an office building located at 655 West 2nd Street, San Bernardino, California. The building was previously a Mervyn's retail shopping center before it was acquired and later remodeled into a two-story, 88,000 square foot office building. The company was formed by Merrell Schexnydre, who is presently the sole shareholder and president. The Judicial Council of California leases about 26,000 square feet of space at the building. California Community filed a Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No. 14-26351) on June 17, 2014. Mr. Schexnydre signed the petition. Judge Christopher M. Klein presides over the case. The Debtor estimated assets of at least $10 million and liabilities of $1 million to $10 million. The Debtor tapped Meegan, Hanschu & Kassenbrock as counsel and CBRE-Inland Commercial Real Estate as broker. CONNIE STEVENS: To Emerge from Bankruptcy With Millions ------------------------------------------------------- Bill Rochelle, a bankruptcy columnist for Bloomberg News, reported that performer Connie Stevens will exit bankruptcy with several million dollars in her pocket, plus a home in Puerto Vallarta, Mexico, that has no mortgage. According to the report, Stevens has an offer of $16.7 million for her Los Angeles home. Taxing authorities will benefit from her bankruptcy as she expects capital gains taxes of $150,000 on the Wyoming home and not more than $4.25 million on the Los Angeles property, the report related. To minimize expense of Chapter 11, Stevens arranged a hearing in Los Angeles bankruptcy court to seek permission to pay all claims in full other than mortgages on the Los Angeles home, the report further related. Claims total about $485,000, Bloomberg cited the the actress and singer as saying. The case is In re Connie Stevens, 14-bk-21156, U.S. Bankruptcy Court, Central District of California (Los Angeles). CRP-2 HOLDINGS: Files Schedules of Assets and Liabilities --------------------------------------------------------- CRP-2 Holdings AA, L.P., filed with the U.S. Bankruptcy Court for the Northern District of Illinois its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $160,401,500 B. Personal Property $10,947,708 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $163,748,800 E. Creditors Holding Unsecured Priority Claims $1,391,099 F. Creditors Holding Unsecured Non-Priority Claims $1,497,196 ----------- ----------- Total $171,349,208 $166,637,095 A copy of the schedules are available for free at: http://bankrupt.com/misc/CRP-2Holdings_75_Aug10SAL.pdf About CRP-2 Holdings CRP-2 Holdings AA, L.P., a Delaware limited partnership that was formed in May of 2006 for the primary purpose of acquiring and managing real property, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 15-24683) on July 21, 2015. Neil Waisnor, the vice president, signed the petition. FrankGecker LLP serves as the Debtor's counsel. Judge Donald R. Cassling is assigned to the case. The Debtor disclosed total assets of $171,349,208 and total liabilities of $166,637,095. The U.S. Trustee appointed two creditors to serve on the official committee of unsecured creditors. CRP-2 HOLDINGS: Proofs of Claim Due Sept. 18, 2015 -------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois established these dates as the last day for any individual or entity to file proofs of claim against CRP-2 Holdings AA, L.P.: * Sept. 18, 2015 is the General Claims Bar Date; and * Jan. 18, 2016 is the Governmental Claims Bar Date. About CRP-2 Holdings CRP-2 Holdings AA, L.P., a Delaware limited partnership that was formed in May of 2006 for the primary purpose of acquiring and managing real property, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 15-24683) on July 21, 2015. Neil Waisnor, the vice president, signed the petition. FrankGecker LLP serves as the Debtor's counsel. Judge Donald R. Cassling is assigned to the case. The Debtor disclosed total assets of $171,349,208 and total liabilities of $166,637,095. The U.S. Trustee appointed two creditors to serve on the official committee of unsecured creditors. CVR REFINING: S&P Raises Corp. Credit Rating to BB-, Outlook Stable ------------------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit and senior unsecured debt ratings on CVR Refining L.P. (CVRR) to 'BB-' from 'B+'. The outlook is stable. The '3' recovery rating is unchanged. The '3' rating indicates S&P's expectation for meaningful (50% to 70%; lower half of the range) recovery if a payment default occurs. "The ratings upgrade on CVRR reflects our belief that favorable refining margins will continue due to the partnership's feedstock cost advantage and above-average demand for gasoline, which should keep product pricing strong and financial leverage low over the next 12 to 24 months," said Standard & Poor's credit analyst Mike Llanos. S&P views CVRR as somewhat better than its peers in the single 'B' category because of greater scale and its location in the Midwest market, which has historically generated higher refining margins than other regions due to favorable local market dynamics. S&P expects total debt to EBITDA to be about 1.75x, interest coverage of about 8x, and CVRR to generate positive free cash flow of more than $310 million. CVRR's rating reflects the "weak" business risk profile and "aggressive" financial profile. The "weak" business risk profile reflects the refining sector's capital-intensive nature, margin volatility, and CVRR's limited asset diversity. CVRR is a 185,000 barrel per day (bpd) independent refiner and marketer of transportation fuels. Compared with industry peers, the Coffeyville refinery in Kansas (115,000 bpd capacity) and the Wynnewood refinery in Oklahoma (70,000 bpd) benefit from low operating costs per barrel and advantageous pricing for crude feedstocks and finished products. The lack of geographic diversity exposes both refineries to similar geographic and pricing economics. The stable outlook reflects S&P's expectation of adequate liquidity while achieving refining margins of about $14 per barrel, resulting in leverage between 1.5x and 2x. DELTROPICO DESIGNS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Deltropico Designs, LLC 175 SW 7th Street, Suite 1703 Miami, FL 33130 Case No.: 15-25767 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Hon. Robert A Mark Debtor's Counsel: Nathan G Mancuso, Esq. MANCUSO LAW, P.A. 7777 Glades Rd # 100 Boca Raton, FL 33434 Tel: (561) 245-4705 Email: ngm@mancuso-law.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Luis Fernandez Trujillo, manager. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flsb15-25767.pdf DORAL FINANCIAL: Fitch Withdraws 'D' LT Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has withdrawn the ratings for Doral Financial Corporation (DRL) and its main subsidiary, Doral Bank. Fitch has withdrawn the ratings as the company has entered bankruptcy. Accordingly, Fitch will no longer provide ratings or analytical coverage for DRL. Fitch has withdrawn the following ratings: Doral Financial Corporation -- Long-term IDR 'D'; -- Senior debt 'C; -- Preferred stock 'C; -- Short-term IDR 'D'; -- Viability Rating 'f'; -- Support '5'; -- Support at Floor 'NF'. Doral Bank -- Long-term IDR 'D'; -- Short-term IDR 'D'; -- Viability Rating 'f'; -- Support '5'; -- Support Floor 'NF'. DORSEY MOTOR: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Dorsey Motor Sales, Inc. PO Box 680748 Prattville, AL 36068 Case No.: 15-32394 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Middle District of Alabama (Montgomery) Judge: Hon. Dwight H. Williams Jr. Debtor's Counsel: Collier H. Espy, Jr., Esq. ESPY, METCALF & ESPY, P.C. P.O. Drawer 6504 326 North Oates Street Dothan, AL 36302-6504 Tel: 334-793-6288 Email: kc@espymetcalf.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Richard M. Dorsey, president. A list of the Debtor's 10 largest unsecured creditors is available for free at http://bankrupt.com/misc/almb15-32394.pdf DOWNRIGHT DISPOSAL: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Downright Disposal, LLC 2323 Victory Avenue, Suite 700 Dallas, TX 75219 Case No.: 15-33546 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Stacey G. Jernigan Debtor's Counsel: John Machir Stull, Esq. Sam M. Stricklin, Esq. GRUBER HURST ELROD JOHANSEN HAIL SHANK LLP 1445 Ross Avenue, Suite 2500 Dallas, TX 75202 Tel: (214) 855-6800 Fax: (214) 855-6808 Email: mstull@ghetrial.com sstricklin@ghetrial.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $100,000 to $500,000 The petition was signed by Stephen M. Pezanosky, Chapter 11 trustee of Petroleum Asset Management Corporation, the Debtor's sole managing member. A list of the Debtor's three largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb15-33546.pdf EVEREST HOLDINGS: Moody's Confirms 'B2' CFR, Outlook Stable ----------------------------------------------------------- Moody's Investors Service confirmed Everest Holdings, LLC's (dba "Eddie Bauer") B2 Corporate Family Rating ("CFR") and B2-PD Probability of Default Rating, as well as the B3 ratings on the company's $225 million senior secured term loan due 2020. The rating outlook is stable. These actions conclude the review for upgrade initiated on June 16, 2015, upon the adoption of Moody's updated approach for standard adjustments for operating leases, which is explained in the cross-sector rating methodology Financial Statement Adjustments in the Analysis of Non-Financial Corporations, published on June 15, 2015. Despite Eddie Bauer's improved leverage as a result of the aforementioned revision to Moody's approach for capitalizing operating leases, the confirmation reflects Eddie Bauer's weaker than anticipated LTM operating performance (through July 4, 2015) and Moody's expectation that interest coverage (EBITA/interest expense) will remain appropriate for the B2 rating. Moody's believes modest revenue and EBITDA growth will result in leverage fluctuating in the mid-to-high 4 times range over the next 12 to 24 months, depending on seasonal revolver borrowings. However, interest coverage (EBITA/Interest) is expected to remain below the 2.0 times upgrade trigger, settling in the mid-to-high 1 times range. Moody's took these rating actions: Issuer: Everest Holdings, LLC Corporate Family Rating, Confirmed at B2 Probability of Default Rating, Confirmed at B2-PD $225 million Senior Secured Term Loan due 2020, Confirmed at B3, LGD-4 Outlook, Stable RATINGS RATIONALE Eddie Bauer's B2 CFR reflects the company's high leverage and modest interest coverage resulting from a sizable debt-financed distribution to shareholders in 2014, combined with mixed LTM operating performance that has seen some topline growth offset by weaker EBITDA margins. Moody's estimates leverage for the LTM period ending July 4, 2015, in the low 5 times range, with interest coverage (EBITA/Interest) in the mid-one times range. The rating acknowledges that there will be some credit metric improvement over the next 12-24 months but that interest coverage will remain at a level appropriate for the B2 rating. Revenue growth in the low single digit range, aided by the fourth quarter acquisition of its German licensee business, combined with modest margin improvement off of a weaker than anticipated LTM period that was partially impacted by the west coast port slowdown, should bring leverage closer to the mid-to-high 4 times range with interest coverage in the mid-to-high 1 times range. The rating also reflects modestly lower comp store sales over the last 6 quarters, a moderate degree of fashion risk, and financial policy risk associated with Eddie Bauer's financial sponsor ownership. The B2 rating is supported by Eddie Bauer's well recognized brand name, although it has struggled with its identity at times, and its focus on the outdoor lifestyle end-market. Apparel geared towards the active, outdoor lifestyle continues to be popular with consumers which should benefit Eddie Bauer. However, competition is stronger now than it was in the past as a result of numerous companies focusing on the space. Moody's expects Eddie Bauer will maintain adequate liquidity with close to breakeven free cash flow over the next 12-18 months and access to a $200 million asset based revolving credit facility ("ABL") (which is expected to be upsized to $250 million shortly). Eddie Bauer's liquidity is supported by approximately $10 million of cash and about $70 million of availability under its $200 million ABL facility due 2019, as of July 4, 2015. Free cash flow for the LTM period was negative, largely driven by working capital related outflows and growth capital spending, however Moody's anticipates close to breakeven free cash flow over the next 12-18 months as working capital normalizes. Moody's expects Eddie Bauer will continue to rely on the ABL facility for seasonal working capital needs, particularly as it builds inventory for the fourth quarter, which is the company's peak selling period. Borrowings as of July 4, 2015 are approximately $63 million, which is higher than prior years, however that can be partially attributable to a strategic buildup of inventory in outwear this year to avoid shortages experienced in the fourth quarter of 2014. Moody's anticipates additional borrowings in the third quarter, but expects most, if not all, will be paid down by year end with cash generated in the fourth quarter. The ABL facility contains a springing fixed charge covenant test of 1.0 times, which is triggered when availability falls below 10%. Moody's does not expect the covenant to be triggered over the next 12-18 months, but would anticipate limited to no cushion during some interim periods in the event that it were triggered, given the meaningful capital spend anticipated over the next 12 months. However, it is worth noting that much of that capital spending is somewhat discretionary and the company could pull back if liquidity or covenant compliance were pressured. The term loan has no financial covenants. The B3 rating on Eddie Bauer's $225 million senior secured term loan is one notch below the company's CFR reflecting its junior position in the capital structure relative to the company's (unrated) ABL facility. The term loan is secured by a first priority lien on essentially all assets of its domestic subsidiaries (excluding accounts receivable and inventory on which it has a second priority lien behind the ABL) as well as a 2/3 pledge of foreign subsidiary stock. The term loan's collateral position creates effective priority relative to the company's unsecured obligations including trade payables and lease rejection claims. The stable outlook reflects our expectation that modest revenue growth in the low single digit range, combined with normalized EBITDA margins will result in debt to EBITDA (as adjusted by Moody's) in the mid-to-high 4 times range, with interest coverage (EBITA/Interest) in the mid-to-high 1 times range. Ratings could be downgraded if Eddie Bauer experiences accelerated declines in sales or earnings, or an increase in debt that results in debt to EBITDA above 6.0 times or EBITA to interest expense below 1.25 times. Negative rating pressure could also develop should the company's liquidity profile deteriorate. A ratings upgrade would require a track record of top line revenue and earnings growth, while also generating positive comp store sales. From a credit metric perspective, an upgrade would also require debt to EBITDA sustained below 5.0 times and EBITA to interest above 2.0 times, as well as a willingness on the part of the company and its private equity ownership to maintain credit metrics at these levels. The principal methodology used in these ratings was Global Retail Industry published in June 2011. Everest Holdings LLC (dba "Eddie Bauer"), headquartered in Bellevue, WA, is a holding company with operations under the Eddie Bauer brand name. Eddie Bauer operates 327 stores in the US, Canada, and Germany (as well as a joint venture in Japan) and generated LTM revenue of approximately $895 million through July 4, 2015. It also manages a direct business and domestic and international licensing partnerships. Everest Holdings is owned by Golden Gate Capital. FALCON GOLD: Executes Limited Forbearance Agreement --------------------------------------------------- Falcon Gold Corp. on Aug. 31 disclosed that it has finalized the compilation of all available historic drill hole data and completed a conceptual geological model encompassing three mineralized zones within the New York Canyon, Nevada copper project. The model interprets the potential existence of large scale mineralization within the Copper Queen, Champion and Longshot Ridge zones. Only portions of the new model were included within the 2010 NI 43-101 technical report completed by Canyon Copper Corp. The model shows potential for the expansion of copper mineralization to the east of and at depth below the Longshot Ridge zone's historical resource estimated and reported in the 2010 report. The model may be viewed on Falcon's corporate presentation on the Company's website: www.falcongold.ca/i/pdf/ppt/presentation.pdf The Company has formulated a plan to verify the results of the model and further advance the resource evaluation. As a first step, Falcon will implement a sampling program of the historical drill core and drill cuttings that are stored on site. Approximately 5% of the historic drill core and cuttings will be retrieved from the core shacks and the adit storage area and sent for assay to an independent laboratory. As reported in the 2010 technical report, the New York Canyon database includes 161 historical drill holes and 73 Canyon Copper drill holes totaling 139,056 feet. 33 drill holes completed in 2006, were located in the Longshot Ridge area, however none of these holes were included in the historical resource estimation. The authors of the 2010 report cited inconsistencies in the 2006 quality control samples and recommended re-analysis of these samples prior to their inclusion in a resource estimation. The data compilation completed by Falcon located a complete re-analysis of these samples with acceptable quality control results. The Company will verify these findings with additional sampling and quality control measures. The New York Canyon copper mineralization is hosted primarily as skarns within Triassic to Jurassic-age limestone and sandstone assemblages. The skarn mineralization occurs adjacent to Cretaceous-age felsic intrusive rocks. The Champion zone, located between the Longshot Ridge and Copper Queen Zones, consists of both oxide and sulphide copper skarn mineralization and was the site of significant historical mining. Falcon management has identified 14 production adits and a 2-compartment shaft that was reportedly sunk to a depth of approximately 450 ft (145m) within the Champion zone. The 2010 technical report also refers to existing geophysical data that indicate the copper sulphide skarn mineralization identified at depth at the Copper Queen zone has no exposed mineralization at surface, and appears from historical drill results, to be underlain at even greater depth by a potential disseminated copper molybdenum sulphide porphyry system. This sulphide zone has previously been intersected in diamond drill core and appears to be a copper + molybdenum porphyry. Drilling by Continental Oil Company (Conoco) in 1977, identified significant intervals of chalcopyrite and molybdenite mineralization. Conoco drill hole MN-42 reportedly intersected 1,040 ft (317m) of 0.41% Cu, 0.012% Mo and 4 ppm Ag at the Copper Queen zone and also in drill hole MN-01 located within the Champion zone intersected 138 ft (42m) of 0.77% Cu. Limited Forbearance Agreement Executed In order to maintain the option and joint venture agreement in good standing, Falcon is required to make yearly cash, patented property lease and unpatented claim payments to Canyon Copper as well as issue shares of Falcon during the month of August. Falcon and Canyon Copper have executed a Limited Forbearance Agreement that extends the August 2015 cash and lease payments ($50,000) and unpatented claim payments (approx. US$30,000) to September 30, 2015. In consideration, Falcon has agreed to issue prematurely, 500,000 shares to Canyon Copper in August 2015 due in August 2016. Director Resignation The Company disclosed that Jamie Lavigne, P.Geo, a co-founder of Falcon, has resigned as a Director and Chief Geologist of the Company. The Company thanks Mr. Lavigne for his work and wishes him well in his future endeavors. About Falcon Gold Corp. Falcon is a Canadian mineral exploration company focused on generating, acquiring, and exploring opportunities in North America. Falcon has the right to earn up to an 80% interest in the New York Canyon copper property from Canyon Copper. Located in western Nevada, the property consists of 21 patented claims covering 420 acres (170 hectares) and 190 unpatented claims covering an area of approximately 3,800 acres (1,520 hectares). It has been subject to 214 drill holes totaling approximately 39,000 meters to date. Falcon also holds a 100% interest in the Washington Silver project that includes the past producing Silver Bell mine located in the Republic Mining District, northeastern Washington, USA. Previous drilling by Falcon has demonstrated the high grade potential of this silver project with an intersection of 167 grams per tonne (g/t) Ag over 36.5 m including a high grade intercept of 511.57 g/t Ag and 0.83 g/t Au over 9.14 m. FREEDOM INDUSTRIES: Plan Goes to Creditors for Voting ----------------------------------------------------- Bill Rochelle, a bankruptcy columnist for Bloomberg News, reported that 18 months after a leaking chemical tank made much of West Virginia's water undrinkable, creditors of Freedom Industries Inc. can vote on the company's Chapter 11 plan after U.S. Bankruptcy Judge Ronald G. Pearson in Charleston, West Virginia, signed an order approving disclosure materials explaining the plan. According to the report, the confirmation hearing for approval of the plan will take place on Oct. 2. The Plan revolves around a Settlement Agreement, which provides a mechanism to assure adequate funding to complete remediation of the Etowah River Terminal site, while also representing a critical step toward the Debtor's effort to confirm a plan of liquidation case and enhancing the recoveries of creditors. Under the settlement, Freedom will provide a broad release to the Chemstream family of companies in exchange for: (a) Chemstream's contribution of $1,100,000 in cash, $250,000 of which will be available upon entry into the Settlement Agreement; (b) Chemstream's assignment of its right, title and interest in and to the approximately $2,720,000 in remaining Escrow Funds; (c) Chemstream's release of and (d) an agreement with the WVDEP regarding a mechanism, procedure and funding amount for completing remediation and obtaining a certificate of completion for the Etowah River Terminal site. The Associated Press reported that West Virginia regulators are concerned that construction debris found buried at the site of the 2014 chemical spill could make it easier for contaminated water to flow deeper into the soil. According to AP, Cora Environmental Services, a contractor working on a cleanup of the Freedom Industries site in Charleston, found the debris in a fill area that was thought to contain rock, said Dave Long, project manager for the Department of Environmental Protection's Office of Environmental Remediation. The fill area was being investigated because of concerns that unconsolidated rocks would make it easy for contaminated water to flow underground, AP related. The construction debris, consisting mostly of old bricks, could be an even more likely "path of resistance" for contamination, Long said, according to AP. 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 Morris Anderson in Chicago as Freedom's chief restructuring officer. * * * U.S. Bankruptcy Judge Ronald Pearson on May 13, 2015, entered an order denying Freedom Industries Inc.'s bid to move forward with its Plan of Liquidation dated April 30, 2015. The judge sustained the objection of the West Virginia Department of Environmental Protection ("WVDEP"), which strongly took issue with the Plan's treatment of environmental remediation and argued that the Plan did not provide for adequate funding in that regard. The Plan is a result of negotiations with: (a) the Official Committee of Unsecured Creditors, which is comprised of trade creditors, spill claim creditors and the West Virginia-American Water Company ("WVAWC"), (b) counsel to certain class action claimants, including those representing parties in what is referred to in the Plan as the Bar 101 Case and the Good Case, (c) the current equity owner of the Debtor and affiliated parties, (d) Gary Southern and affiliated parties, (e) Dennis Farrell, William Tis and Charles Herzing and their respective affiliated parties, who collectively are the former owners and board members of Freedom. However, absent from the list of parties coming to affirmative agreement under the Plan was the WVDEP. FREESCALE SEMICONDUCTOR: Fitch Keeps 'B+' LT IDR on Watch Positive ------------------------------------------------------------------ Fitch Ratings maintains Freescale Semiconductor, Inc. on Rating Watch Positive in anticipation of the company's planned merger with NXP Semiconductor N.V. (NXP). This rating action affects $5.3 billion of total debt for Freescale, including the revolving credit facility (RCF). This press release and the maintenance of the Rating Watch is in accordance with Fitch's guidelines related to the review of Rating Watch status. They follow Fitch's placement of the company's ratings on Watch Positive on March 2, 2015. KEY RATING DRIVERS Upon consummation of the merger, Fitch expects to resolve the Watch Positive and upgrade Freescale's ratings to high-'BB' or low-'BBB', equal to the level at which Fitch would rate the combined entity. Fitch believes the post-merger entity will have strong positions in growing markets, a credible cost reduction roadmap to support profit margin expansion and strong annual free cash flow (FCF) providing a clear path for strengthened credit protection measures from debt reduction. Fitch expects low- to mid-single digit organic revenue growth over the intermediate term for the combined entity, which will be a high performance mixed signal semiconductor supplier with number one market share in automotive semiconductors, microcontrollers, and radio frequency (RF) power. The company should benefit from increasing electronics content and unit growth in automotive and demand for secure connectivity across applications ranging from government documents to electronic payment systems. Fitch expects $500 million of run rate annual synergies (comprised of increased buying power and elimination of duplicate administrative functions) will drive profitability expansion for the combined entity. Fitch expects operating EBITDA margins will remain in the high-20s, versus Freescale's standalone margin in the mid-20s. In conjunction with solid revenue growth, Fitch expects $1.5 billion to $2 billion of annual FCF, which the company will use mainly for debt reduction in the near term. Upon achieving a target net leverage of 2x, Fitch expects shareholder returns may intensify. Fitch expects credit protection measures will strengthen in 2016 and remain solid. Total leverage (total debt to operating EBITDA) for the combined entity below 3x in 2016 from debt reduction with FCF, versus roughly 3x at the merger's close. Fitch expects Interest Coverage (operating EBITDA to gross interest expense) of more than 10x exiting 2016, versus high single digits at closing. Freescale entered into a definitive agreement to merge with NXP in a transaction valuing Freescale's equity at $11.8 billion. NXP will fund the transaction with a combination $1 billion of available cash, $1 billion of new debt and stock that will give Freescale shareholders just below 32% ownership of the combined company. The deal is expected to close in the fourth quarter of 2015 and has been approved by the boards and shareholders of both companies. The deal has been cleared by all regulators with the exception of the Euro zone. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for combined entity include: -- The merger is completed in the fourth quarter of 2015; -- Revenue growth in the low to mid-single digits over the intermediate term, from growing automotive electronics content and increased secured connectivity penetration; -- Operating EBIT margin in the mid- to high-20s, driven by higher revenues and cost savings from headcount reductions and increased purchasing power; -- $1.5 billion to $2 billion of annual FCF, which the company will use for debt reduction until net leverage reaches 2x in 2016. RATING SENSITIVITIES Fitch believes positive rating action will occur upon consummation of the merger, potentially resulting in a Long-Term IDR of 'BB+' or 'BBB-'. Negative rating actions, including stabilization of the Long-Term IDR at 'B+', could occur if the proposed merger falls through, and Fitch expects standalone Freescale's FCF to fall short of expectations of $250 million. LIQUIDITY Pro forma for the merger, Fitch expects liquidity to be solid and supported by: -- $1 billion to $2 billion of cash and cash equivalents, the vast majority of which will be readily available given NXP's European domicile; -- An undrawn $600 million senior secured credit facility expiring 2020, which will be secured on a super priority basis. Fitch's expectation for $1.5 billion to $2 billion of FCF also supports liquidity. Fitch estimates total debt at consummation of $8 billion to $9 billion and will include i) $1.5 billion to $2 billion of senior secured term loan B, incremental borrowings to fund the acquisition; ii) $1.5 billion of senior secured notes from Freescale; and roughly $5.2 billion of existing NXP debt. FULL LIST OF RATING ACTIONS Fitch maintains the following ratings on Rating Watch Positive: Freescale -- Long-term IDR 'B+'; -- Senior secured bank revolving credit facility 'BB-/RR3'; -- Senior secured term loans 'BB-/RR3'; -- Senior secured notes 'BB-/RR3'. HEALTHSOUTH CORP: CareSouth Deal No Impact on Moody's 'Ba3' CFR --------------------------------------------------------------- Moody's Investors Service commented that the announcement that HealthSouth Corporation has entered into a definitive agreement to acquire the home health agency operations of CareSouth Health System, Inc. has no immediate impact on HealthSouth's Ba3 Corporate Family Rating or negative outlook. CareSouth operates 45 home health locations in seven states and will be integrated into HealthSouth's Encompass Home Health operating unit. Moody's understands that the $170 million purchase price will be funded with a combination of available cash and senior secured borrowings, including HealthSouth's recently established delayed draw term loan and $600 million revolving credit facility. The acquisition is expected to close in the fourth quarter of 2015. HERTZ CORP: S&P Affirms 'B1' Corp. Family Rating, Outlook Stable ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of The Hertz Corporation, including the Corporate Family Rating (CFR) at B1, secured credit facility at Ba1, senior unsecured debt at B2 and Speculative Grade Liquidity rating at SGL-3. The outlook is stable. RATINGS RATIONALE Moody's anticipates that Hertz will reestablish its position within the global car rental sector as it continues to implement a number of operational and strategic initiatives, including: annual cost savings of $200 million during 2015 and an additional $100 million during 2016, better capitalizing on the value-brand market position of Dollar Thrifty (acquired late 2012), and divesting HERC (the equipment rental business). These build on recent actions, which the company should continue to capitalize on, which include: reducing the age of its car rental fleet (largely completed), maintaining a better alignment between its car rental fleet size and retail demand, and installing a new senior management team. These initiatives should help Hertz recover from the erosion in competitive position that occurred during the past year as it allowed its auto fleet to age beyond a competitive level, and as it worked to address accounting errors and file current financial statements. Moody's expects that the planned spin off of HERC (sometime in 2016) will position Hertz to focus solely on its strength in the US and international car rental market. In addition, Hertz will likely receive a farewell dividend upon the spin off of HERC, with proceeds used to fund share repurchases and debt reduction. Post-spin, Hertz is targeting year-end leverage of 2.5x to 3.5x, as measured by Hertz as net corporate debt to corporate EBITDA, as defined. This would represent a sizable reduction from the 2014 year-end level. Because of the substantial amount of funds that Hertz must raise each year to underwrite vehicle purchases, maintaining an adequate liquidity profile is essential. At June 2015 the company's liquidity profile is adequate and includes: $537 million in unrestricted cash; a $2.1 billion ABL facility (stepping down to $1.9 billion in March 2016); ongoing access to the term ABS market; and, approximately $6.5 billion in US rental car variable funding note (VFN) programs. The company has minimal amounts of corporate debt maturing during the next twelve months. However, the $6.5 billion VFN, which is heavily utilized to fund Hertz's US rental car fleet, matures in October 2016. Despite the twelve-month adequacy of Hertz's liquidity position, the company's ongoing need to access the debt and ABS markets to fund fleet purchases, combined with its periodic need to replace very large facilities such as the $6.5 billion US rental car VFN, remains an area of potential risk. For the last twelve months through June 2015, Hertz's key financial metrics (reflecting Moody's standard adjustments) include: debt/EBITDA of 4.4x; EBITDA/interest of 5.9x; and pre-tax earnings/sales of negative 0.8%. The stable outlook reflects Moody's view that, as Hertz implements its revitalization program, the company will benefit from the oligopolistic structure in the North American car rental industry that has only three major participants -- Hertz, Avis and Enterprise. Moreover, Hertz's plan for restoring its competitive position and growing revenues is viable. However, the company will face execution challenges given the breadth of its initiatives and the recent installation of new personnel at essentially all senior management positions. Any upward movement in Hertz's rating would require the company show clear progress in achieving its strategic initiatives that include: harvesting the targeted cost savings; maintaining fleet size in line with demand; spinning off HERC; reducing debt with the HERC proceeds; and, maintaining an adequate liquidity profile. Metrics that could support a higher rating include expectation of year end debt/EBITDA below 3x; pre-tax income/sales remaining above 7%; and EBITDA/interest exceeding 5x (after Moody's standard adjustments). Metrics that could pressure Hertz's rating include: year-end debt/EBITDA above 5x; pre-tax income/sales remaining below 5%; and EBITDA/interest below 3x. Ratings affirmed: Hertz Corporation (The) Corporate Family Rating at B1 Probability of Default Rating at B1-PD Senior secured term loans at Ba1 (LGD2) Senior unsecured notes at B2 (LGD5) Speculative Grade Liquidity Rating at SGL-3 Hertz Corporation (The) (Old) Promissory notes at B3 (LGD6) Hertz Holdings Netherlands BV Senior notes at B2 (LGD5) The principal methodology used in these ratings was Equipment and Transportation Rental Industry published in December 2014. Hertz Corporation, based in Naples, Florida, is the second-largest car rental company in the world. HRP INVESTMENTS: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: HRP Investments, LP 3400 North McColl McAllen, TX 78501 Case No.: 15-70449 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Debtor's Counsel: Adolfo Campero, Jr., Esq. CAMPERO & ASSOCIATES, P.C. 315 Calle Del Norte, Ste 207 Laredo, TX 78041 Tel: 956-796-0330 Fax: 956-796-0399 Email: acampero@camperolaw.com Total Assets: $2.2 million Total Liabilities: $8.7 million The petition was signed by Carlos Holt, manager to Debtor's general partner. A list of the Debtor's six largest unsecured creditors is available for free at http://bankrupt.com/misc/txsb15-70449.pdf IAMGOLD CORP: S&P Cuts Issue-Level Rating to 'B', Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate and issue-level ratings on Toronto-based gold producer IAMGOLD Corp. to 'B' from 'B+'. The '4' recovery rating on the company's unsecured notes is unchanged. The '4' recovery rating reflects S&P's view of average (30%-50%; lower half of the range) recovery in a simulated default scenario. The outlook is stable. "The downgrade primarily reflects our expectation that IAMGOLD will generate core credit ratios commensurate with a highly leveraged financial risk profile over the next two years," said Standard & Poor's credit analyst Jarett Bilous. S&P revised its gold price assumption over this period, which primarily accounts for the weaker than previously expected core credit ratios over the next two years. S&P's revised earnings and cash flow estimates for the company follow the lowering of S&P's gold price assumption. Standard & Poor's views IAMGOLD's business risk profile as "vulnerable" and its financial risk profile as "highly leveraged," which results in a 'b-' anchor score. S&P revised its financial risk assessment from "aggressive" primarily to reflect the increase in expectation for adjusted leverage ratios, which are calculated on a gross debt basis. S&P also considers IAMGOLD's liquidity position as "strong," which primarily reflects the company's significant cash position and increases the anchor score by one notch. This results in a 'B' final rating. S&P bases its "vulnerable" business risk assessment primarily on IAMGOLD's limited operating diversity and higher cost structure relative to that of its rated peer group. The company is highly reliant on its Essakane (Burkina Faso) and Rosebel (Suriname) mines for the vast majority of production and earnings. "Our "highly leveraged" financial risk assessment of IAMGOLD reflects our view that the company's core credit ratios will remain weaker than our previous expectations over the next two years, which mainly reflects the downward revision to our gold price assumption. We now expect gold prices to average US$1,150 per ounce for the rest of 2015 through 2017 compared with US$1,200 per ounce previously. While the reduction is modest, IAMGOLD's credit ratios are highly sensitive to small changes in gold prices--particularly on the downside. We now estimate adjusted debt-to-EBITDA, calculated on a gross basis (no netting of cash), above 5x in 2015 and 2016. Our adjusted debt totals also include estimated asset retirement obligations," S&P said. The stable outlook reflects S&P's view that IAMGOLD will generate core credit ratios consistent with a "highly leveraged" financial risk profile over the next two years, including adjusted debt-to-EBITDA above 5x. S&P's outlook also reflects its expectation that the company will maintain "strong" liquidity. A downgrade could result from a change in S&P's liquidity assessment to "adequate." from "strong." In this scenario, S&P would expect available cash to sharply decline following a material acquisition or higher-than-expected free cash flow deficits from a severe drop in gold prices. S&P would consider an upgrade if the company generated an adjusted debt-to-EBITDA sustainably below 4x. In this scenario, S&P would expect the company to significantly reduce debt or steadily improve operating costs assuming no change in S&P's gold price assumption. LEHMAN BROTHERS: Bankr. Court Has Jurisdiction Over "Ruby" Deal --------------------------------------------------------------- Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York granted Shield Securities Limited's motion to dismiss an adversary proceeding for lack of personal jurisdiction, but held that the Bankruptcy Court has in rem jurisdiction and concomitant adjudicatory authority over the property at issue in the dispute and will exercise that jurisdiction. Lehman Brothers Special Financing Inc., a wholly-owned subsidiary of Lehman Brothers Inc. and an indirect subsidiary of Lehman Brothers Holdings Inc., initiated an adversary proceeding against certain investment vehicles, trustees, and noteholders who had participated in certain transactions involving credit default swap agreements. In each of these transactions, LBSF and the noteholder held competing interests in collateral securing an issuer's obligations to LBSF under a credit default swap and a noteholder under a credit-linked synthetic portfolio note. The transaction documents for these transactions include provisions that govern the priority of payment from the liquidation of that collateral, which entitle the relevant noteholder or noteholders, under certain circumstances, to receive distributions from the liquidation of the collateral prior to LBSF. LBSF brought the action to obtain a declaratory judgment that the so-called priority of payment provisions are unenforceable ipso facto clauses and to avoid distributions made to noteholders pursuant to those provisions. As between LBSF and Shield, the adversary proceeding concerns the so-called Ruby Transaction, which culminated in an approximately $41 million distribution to Shield after the bankruptcy filings of LBHI and LBSF. LBSF now seeks to recover that distribution. Shield argues that it does not have minimum contacts with the United States and that, therefore, the exercise of jurisdiction over it would not comport with "traditional notions of fair play and substantial justice.” The Ruby Transaction, says Shield, involved Lehman Brothers International (Europe), an English entity, approaching N.M. Rothschild & Sons Limited, also an English entity, to enter into a transaction governed by English and Irish law, with collateral held by an English trustee. All of the negotiations and discussions leading to Shield's ownership of the Ruby Note occurred in the United Kingdom among English and Irish counterparties under English and Irish law. When the transaction was terminated, the proceeds of the collateral were distributed from an English bank account. Aside from its attenuated connection to LBSF through the Ruby Transaction, Shield argues that it has no other connection to the United States. LBSF submits that Shield's limited contact with the United States is merely a product of its status as an investment holding vehicle. To LBSF, Shield is a "piece of paper in a file somewhere that holds assets" and "to say that Shield is immune from jurisdiction because it has no contacts is to elevate form over substance." LBSF argues that Shield's purposeful act of terminating the Swap had foreseeable effects in the United States, and that act was sufficient to establish Shield's minimum contacts with the United States. Moreover, LBSF alleges that Shield's post-petition termination of the Swap violated the automatic stay, which, in LBSF's view, provides additional support for the exercise of jurisdiction. Finally, LBSF contends that the Court need not engage in the minimum contacts analysis because the Court need only look to the New York long-arm statute to find jurisdiction over Shield. Judge Chapman held that Shield's contacts with the United States are too limited to support the assertion of personal jurisdiction over Shield. Judge Chapman further held that the Transaction Documents and LBSF's security interest in the collateral were property of the estate as of the LBSF Petition Date and are subject to the Court's in rem jurisdiction. She adds that the property at issue is indeed property of the estate, that property need not be physically situated in the United States, and Shield need not have minimum contacts with the United States for the Court to exercise in rem jurisdiction over the property at issue. The bankruptcy is In re: LEHMAN BROTHERS HOLDINGS INC., et al., Chapter 11, Debtors, Case No. 08-13555 (SCC)(Bankr. S.D.N.Y.). The adversary proceeding is LEHMAN BROTHERS SPECIAL FINANCING INC., Plaintiff, v. BANK OF AMERICA NATIONAL ASSOCIATION, et al., Defendants, Adversary Proceeding No. 10-03547 (SCC)(Bankr. S.D.N.Y. A full-text copy of Judge Chapman's Memorandum Decision dated August 24, 2015 is available at http://is.gd/GRjU82from Leagle.com Lehman Brothers Special Financing Inc. is represented by: Paul R. DeFilippo, Esq. William F. Dahill, Esq. Joanna Schorr, Esq. WOLLMUTH MAHER & DEUTSCH LLP 500 5th Ave, #12 New York, NY 10110 Telephone: (212)382-3300 Facsimile: (212)382-0050 Shield Securities Limited is represented by: Timothy P. Harkness, Esq. David Livshiz, Esq. Abbey Walsh, Esq. Shannon Leitner, Esq. FRESHFIELDS BRUCKHAUS DERINGER US LLP 601 Lexington Avenue 31st Floor New York, NY 10022 Telephone: (212)277-4000 Facsimile: (212)277-4001 Email: timothy.harkness@freshfields.com david.livshiz@freshfields.com abbey.walsh@freshfields.com shannon.leitner@freshfields.com About Lehman Brothers Lehman Brothers Holdings Inc. 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. LENNAR CORP: S&P Affirms 'BB' Corp. Credit Rating ------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including its 'BB' corporate credit rating, on Lennar Corp. S&P also revised its assessment of the company's liquidity to strong from adequate. The outlook is stable. S&P's revision of Lennar's liquidity profile assessment is based on the company's robust liquidity sources relative to its uses. The revision has no effect on the issue-level ratings. "The stable outlook reflects our expectation that market conditions for Lennar will remain broadly favorable over the next 12 months and that the company will reduce its spending for land, enabling it to achieve further significant improvement in credit protection measures, with debt to EBITDA remaining comfortably below 4x," said Standard & Poor's credit analyst Maurice Austin. S&P could lower the rating if debt to EBITDA remained above 4x. This could occur as a result of some combination of difficult market conditions, operating setbacks, or increased debt, resulting in at least a 250-basis-point decline in gross margins. S&P currently views an upgrade as unlikely within the next year. However, S&P would reassess its view if the company took actions to deleverage the capital structure, such that S&P came to expect debt to EBITDA to be less than 3x on a sustained basis, commensurate with an "intermediate" financial risk profile. LOYALIST GROUP: Receives Default Notice for Forbearance Breach -------------------------------------------------------------- Loyalist Group Limited on Aug. 31 disclosed that on August 28, 2015, the Company received a notice of default letter from Bank of Montreal pertaining to a financial covenant breach in the Forbearance Agreement. The letter provides notice that negative variances to the weekly and accumulative cash flows occurred during the weeks of August 12, 2015 and August 19, 2015. These negative variances between actual cash flow and the projected cash flows are in excess of the allowable maximum of $250,000 as per section 33(b) of the Forbearance Agreement. Management notes that the accumulative negative cash flow variance was rectified during the week ended August 28, 2015. BMO has not taken any enforcement action in relation to the breach. The Company is currently working with BMO in order to submit a revised cash flow projection which management anticipates will be utilized by BMO during the forbearance period. The Company will issue a Press Release following completion of the revised cash flow projection and acceptance by BMO. The revised cash flow projection to be submitted for the Forbearance Agreement is expected to incorporate cost savings outlined in the Optimization Plan and a lower revenue forecast as disclosed in the Company's Management Discussion & Analysis for the Second Quarter of 2015. "While the Company's cash expenditures have been tightly managed since we entered into Forbearance in late June 2015, the negative cash flow variances were primarily driven by weaker than anticipated collection of account receivables during August. We are accelerating our efforts to implement processes and controls designed to improve monitoring and collection of receivables as part of our Optimization Plan," said Shawn Klerer, Chief Executive Officer. About Loyalist Loyalist owns and operates private English as a Second Language (ESL) Schools, Career Colleges and Community Colleges in Toronto, Vancouver, Victoria and Halifax. LUCA INTERNATIONAL: SEC Seeks Receiver After Ch. 11 Filing ---------------------------------------------------------- Bill Rochelle, a bankruptcy columnist for Bloomberg News, reported that the U.S. Securities and Exchange Commission takes the position that the so-called automatic stay imposed in the Chapter 11 case of oil and gas producer Luca International Group LLC does not preclude the appointment of a receiver in a separate federal court civil enforcement action. According to the report, Luca filed its petition on Aug. 6, the day before its papers were due in the SEC's California suit begun in July for appointment of a receiver. The receivership motion was set for hearing on Sept. 2, the report noted. About Luca International Luca International Group LLC and Luca Operation, LLC, and their affiliates are engaged in the exploration and production of natural gas, petroleum and related hydrocarbons. The primary assets are located in Iberville and Ascension Parishes in Louisiana. These assets include 3 operating oil and gas wells -- Belle Grove 1, Dugas & Leblanc 1 and Jumonville 2. In addition, the assets include a water disposal well, Acosta 1, and a shut-in-oil and gas well, Jumonville 1. The Luca entities also own oil and gas leases in Texas and working interests in various locations. The Luca entities are owned by Bingqing Yang. Luca International Group and 11 related entities sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 15-34221) in Houston, Texas, on Aug. 6, 2015. The cases are assigned to Judge David R. Jones. The Debtors tapped Hoover Slovacek, LLP, as counsel, and BMC Group, Inc., as claims agent. Luca International estimated $50 million to $100 million in assets and debt. The petitions were signed by Loretta R. Cross, the CRO. MAC-ACCESS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Mac-Access Corp. 10800 Biscayne Blvd. Miami, FL 33161 Case No.: 15-25846 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Hon. Robert A Mark Debtor's Counsel: Nicholas B. Bangos, Esq. NICHOLAS B. BANGOS, P.A. 100 SE 2nd Street, Suite 3400 Miami, FL 33131 Tel: 305.375.9220 Fax: 305.375.8050 Email: nbangos@diazreus.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Maximo V. Mullich, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/flsb15-25846.pdf MAJESTIC STONE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Majestic Stone Inc. 6219 Ogden Road Dayton, TN 37321 Case No.: 15-13798 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Eastern District of Tennessee (Chattanooga) Judge: Hon. Shelley D. Rucker Debtor's Counsel: David J. Fulton, Esq. SCARBOROUGH & FULTON 701 Market Street, Suite 1000 Chattanooga, TN 37402 Tel: 423- 648-1880 Fax: (423) 648-1881 Email: djf@sfglegal.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Russell David Zollinger, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/tneb15-13798.pdf MANISTIQUE PAPERS: Debtor and Committee Dismiss Case ---------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware dismissed the Chapter 11 case of Manistique Papers Liquidation Company, Inc. The Court also ordered that the Debtor's funds in the amount of $619,440 will be distributed on a pro rata basis among the approved claims for professional fees and the administrative claims. The Debtor and the Official Committee of Unsecured Creditors requested that the Court dismiss the case, or in the alternative, convert the case to a case under Chapter 7 of the Bankruptcy Code. Ashby & Geddes, P.A., Committee' co-counsel, filed on Aug. 13, 2015, certification noting that no parties objected to the motion. As reported in the Troubled Company Reporter on July 8, 2015, the Debtor's counsel, Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, told the Court that the Debtor and the Committee believe that the Debtor is substantially current in its obligations to pay the U.S. Trustee Fees. Mr. Butz said any outstanding U.S. Trustee Fees will be paid. He further told the Court that the Debtor currently has funds of $619,440 available for distribution and proposes to pay these funds on a pro rata basis among the remaining approved claims for professional fees and the two allowed administrative claims. Mr. Butz added that because the assets of the Debtor's estate arelimited and priority and general unsecured claims will not receive any distribution, the Committee does not propose to continue to undertake an extensive claims reconciliation process. Mr. Butz related that the Debtor no longer conducts any business and has no remaining assets that could be used to satisfy the claims of any class of creditors other than the U.S. Trustee Fees, the Professional Fee Claims and the Claims Agent Fees and, on a pro rata basis only, the Administrative Claims. Meanwhile, additional expenses, like professional fees and U.S. Trustee fees, continue to accrue each day the Chapter 11 case remains open, resulting in a continuing loss to the Debtor's estate, Mr. Butz told the Court. Mr. Butz asserted that it is simply impossible for the Debtor to rehabilitate its business because the Debtor has transferred all of its assets and has ceased operations. About Manistique Papers Manistique Papers Inc. operates a landfill in Manistique, Michigan, whereby residuals resulting from paper production are deposited. It owns a 125,000 ton-a-year plant making specialty papers from recycled fiber. Manistique Papers filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-12562) on Aug. 12, 2011. Godfrey & Kahn, S.C. represented the Debtor in its restructuring effort. Morris, Nichols, Arsht & Tunnell LLP served as its Delaware bankruptcy co-counsel. Vector Consulting, L.L.C., served as its financial advisor. Baker Tilly Virchow Krause, LLC, served as its accountant. The Official Committee of Unsecured Creditors appointed in the case is represented by Lowenstein Sandler PC as lead counsel and Ashby & Geddes, P.A., as Delaware counsel. J.H. Cohn LLC serves as the panel's financial advisor. Manistique Papers disclosed $19,688,471 in assets and $24,633,664 in liabilities as of the Chapter 11 filing. MANTUA GARDENS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Mantua Gardens East, Inc. 608 N. 32nd Street Philadelphia, PA 19104-2013 Case No.: 15-16228 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Hon. Jean K. FitzSimon Debtor's Counsel: Dimitri L. Karapelou, Esq. LAW OFFICES OF DIMITRI L. KARAPELOU, LLC Two Penn Center 1500 JFK Boulevard, Suite 920 Philadelphia, Pa 19102 Tel: 215 - 391 - 4312 Fax: 215-701-8707 Email: dkarapelou@karapeloulaw.com - and - Rebecca K. McDowell, Esq. LAW OFFICES OF DIMITRI L. KARAPELOU, LLC Two Penn Center 1500 JFK Boulevard, Suite 920 Philadelphia, PA 19102 Tel: 215-391-4313 Fax: 215-701-8707 Email: rmcdowell@karapeloulaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by James Grier, president. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. NEP GROUP: Moody's Retains 'B2' CFR Over CMI Acquisition -------------------------------------------------------- Moody's Investors Service says NEP Group Inc's acquisition of Consolidated Media Industries, B.V. ("CMI") for $101.9 million in cash has no immediate impact on the credit ratings (NEP/NCP Holdco, Inc. B2 CFR; B1 1st Lien Term Loan, Caa1 2nd Lien Term Loan). CMI, headquartered in Netherlands, operates DutchView (remote production and studio production in Northern Europe) and Infostrada Creative Technologies (creation, management and distribution of video content). The transaction, while not affecting credit ratings, will in the near term constrain the company's liquidity profile and incrementally increase leverage. NEP/NCP Holdco, Inc. (NEP) provides outsourced media services necessary for the delivery of live broadcast of sports and entertainment events to television and cable networks, television content providers, and sports and entertainment producers. Its major customers include television networks such as ESPN, and key events it supports include the Super Bowl, the Olympics and sporting events such as Major League Baseball and Sky and Scottish Premier League football, as well as entertainment shows such as American Idol and The Voice. The company's majority owner is Crestview Partners which acquired the company from American Securities Capital Partners on Dec. 23, 2012. NEP maintains its headquarters in Pittsburgh, Pennsylvania. NEW YORK TIMES: S&P Revises Outlook to Pos. & Affirms 'B+' CCR -------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its rating outlook on New York City-based The New York Times Co. to positive from stable and affirmed its 'B+' corporate credit rating on the company. S&P's 'BB' issue-level and '1' recovery ratings on the company's 6.625% senior notes remain unchanged. The '1' recovery rating indicates S&P's expectation for very high recovery (90%-100%) of principal in the event of a payment default. "The outlook revision to positive reflects our increasing confidence that The New York Times will continue to prudently manage its balance sheet and reduce leverage," said Standard & Poor's credit analyst Minesh Patel. "It also reflects our base-case scenario that the company will repay its remaining interest bearing debt liability -- the 6.625% senior notes due December 2016 -- at maturity with cash on hand, as well as S&P's forecast that adjusted leverage will decline to 3.7x as of the fiscal year ending Dec. 25, 2016, from 4.5x as of the 12 months ended June 28, 2015." Thereafter, S&P forecasts that adjusted leverage will remain in the high-3x to low-4x area. (S&P's ratios include its standard adjustments, such as S&P's pension, other retirement benefits, and pension withdrawal liabilities adjustments, which increases reported debt by more than 100%.) If the company repays its 6.625% senior notes with cash on hand, its debt liabilities will primarily consist of the sale-leaseback real estate repurchase option and its large pension and post retirement obligations. The 'B+' corporate credit rating on The New York Times reflects S&P's assessment of the company's business risk profile as "weak" and its financial risk profile as "aggressive." S&P could raise the corporate rating one notch to 'BB-' over the next 12-18 months if the company continues to effectively increase online revenues, boost subscriber growth, and build brand engagement, while maintaining EBITDA margins and cash flow generation, by removing S&P's negative comparable rating modifier. S&P would consider a downgrade if the decline in the company's newspaper ad revenue accelerate, leading to revenue, EBITDA, and discretionary cash flow declines. S&P could also lower the rating if the company makes high-priced debt-financed acquisitions, sizable share repurchases, or large dividends. NORTHWEST HEALTH: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Northwest Health Systems, Inc. 2818 North Sullivan Rd, Suite 2E Spokane, WA 99216 Case No.: 15-02968 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Eastern District of Washington (Spokane/Yakima) Judge: Hon. Frederick P. Corbit Debtor's Counsel: Barry W Davidson, Esq. DAVIDSON BACKMAN MEDEIROS PLLC 601 West Riverside Avenue, Suite 1550 Spokane, WA 99201 Tel: 509 624-4600 Fax: 509 623-1660 Email: cnickerl@dbm-law.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kevin D. King, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/waeb15-02968.pdf ORLANDO, FL: S&P Raises Rating on 2008C 3rd Lien Bonds to 'CCC+' ---------------------------------------------------------------- Standard & Poor's Ratings Services has raised its ratings on Orlando, Fla.'s series 2008A (first-lien) tourist development tax (TDT) revenue bonds to 'BBB' from 'BB', series 2008B TDT (second-lien) bonds to 'BBB-' from 'CCC', and 2008C TDT (third-lien) bonds to 'CCC+' from 'CC'. The outlook on all ratings is stable. "The rating actions reflect improving TDT collections, which secure the bonds and have resulted in a steady decline in the amount of reserves used to fund third-lien debt service payments," said Standard & Poor's credit analyst Hilary Sutton. "The revenue environment has improved such that city officials expect TDT receipts to fully cover 2015 debt service requirements across all three liens." In addition, officials expect excess TDT revenues in 2015, which will allow the city to begin restoring the third-lien reserves to required levels. The upgrade also reflects S&P's view that the risk of principal acceleration across all three liens -- a remedy following an event of default under any single lien -- has decreased due to the improving liquidity of the third lien. Securing the bonds is a lien on net proceeds from the city's share (50%) of the six-cent TDT enacted on Sept. 1, 2006, and levied on each dollar charged for tourist rentals (hotel tax) within Orange County. The lien exists through the life of the bonds. Also included in pledged revenue is a $2.8 million annual installment payment that will continue through November 2018. The series A bonds have a senior lien on the pledged revenues while the series B and C bonds have second and third liens, respectively. Countywide, the TDT revenue continues to exhibit growth mainly due to increased tourist footfall driven by improvement in the overall economy and new additions or expansions by the theme parks. PACIFIC RECYCLING: Section 341 Meeting Set for Sept. 17 ------------------------------------------------------- There will be a meeting of creditors in the bankruptcy case of Pacific Recycling, Inc. on Sept. 17, 2015, at 10:00 a.m. at USTE1, US Trustee's Office, Eugene, 405 E 8th, Rm 1900. Creditors have until Dec. 16, 2015, to submit their proofs of claim. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Pacific Recycling, Inc., filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 15-62925) on Aug. 27, 2015. The petition was signed by Rodney Schultz as president. The Debtor estimated assets and liabilities of $10 million to $50 million. Hon. Frank R Alley III is assigned to the case. Cable Huston LLP represents the Debtor as counsel. PATRIOT COAL: Gets Court Order Protecting Confidential Info ----------------------------------------------------------- Patriot Coal Corp. obtained a court order that would allow the company to share documents with UMWA 1974 Pension Plan and Trust to facilitate labor negotiations while protecting information deemed confidential. The order was issued by Judge Keith Phillips of U.S. Bankruptcy Court for the Eastern District of Virginia. A copy of the protective order can be accessed for free at: http://is.gd/KHC254 About Patriot Coal Patriot Coal Corporation is a producer and marketer of coal in the United States. Patriot and its subsidiaries control 1.4 billion tons of proven and probable coal reserves -- including owned and leased assets in the Central Appalachia basin (in West Virginia and Ohio) and Southern Illinois basin (in Kentucky and Illinois) and their operations consist of eight active mining complexes in West Virginia. Patriot Coal first sought Chapter 11 protection on July 9, 2012, and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan from the U.S. Bankruptcy Court for the Eastern District of Missouri. The plan turned over most of the ownership of the company to bondholders that include New York hedge fund Knighthead Capital Management LLC. The linchpins of the plan were a global settlement among the Debtors, the United Mine Workers of America, and two third parties -- Peabody Energy Corporation and Arch Coal, Inc. -- and a commitment by a consortium of creditors, led by Knighthead, to backstop two rights offerings that funded the plan. Patriot Coal Corporation and its subsidiaries commenced new Chapter 11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in Richmond, Virginia, on May 12, 2015. The cases are assigned to Judge Keith L. Phillips. Patriot Coal estimated more than $1 billion in assets and debt. The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock L.L.P., as co-counsel; Centerview Partners LLC as investment bankers; Alvarez & Marsal North America, LLC, as restructuring advisors; and Prime Clerk LLC, as claims and administrative agent. The U.S. trustee overseeing the Chapter 11 case of Patriot Coal Corp. appointed seven creditors of the company to serve on the official committee of unsecured creditors. The Committee is represented by Morrison & Foerster LLP as its counsel, and Tavenner & beran, PLC, as its local counsel. Jefferies LLC serves as its investment banker. The court directed the U.S. Trustee to form an official committee of retirees at the behest of Patriot Coal Non-Union Retiree VEBA. * * * The deadline to file bids for the Debtors' assets is Sept. 4, 2015, at 5:00 p.m. An auction will take place on Sept. 9, at 10:00 a.m. Patriot Coal has filed with the Bankruptcy Court a letter of intent for a proposed sale of a substantial majority of its operating assets to Blackhawk Mining, LLC, as well as a motion outlining bidding procedures. Under the terms of the letter of intent, Blackhawk would issue to Patriot's secured lenders new debt securities totaling approximately $643 million plus Class B Units providing them an ownership stake in Blackhawk. In addition, Blackhawk would assume or replace surety bonds supporting reclamation and related liabilities associated with the purchased assets. PATRIOT COAL: To Raise $50 Million in Rights Offerings ------------------------------------------------------ Patriot Coal Corp. received approval from a bankruptcy judge to conduct rights offerings to raise $50 million. The order, issued by U.S. Bankruptcy Judge Keith Phillips, allowed the coal producer to raise cash in two rights offerings to fund the operations of a new company that will be formed under a deal with Blackhawk Mining LLC. The deal calls for the assumption by Blackhawk of some of Patriot Coal's assets and debts through the formation of a new company. Patriot Coal's Chapter 11 reorganization plan filed on July 13 is predicated on the Blackhawk deal, which, if consummated, would deliver to the coal producer's secured creditors $650 million of indebtedness. Holders of claims tied to Patriot Coal's 2013 credit agreement who will participate in the first rights offering will receive subscription rights to purchase second lien term loan to be issued by Blackhawk. The aggregate subscription price for the second lien term loan offered for purchase in the first rights offering will be $19 million, court filings show. In the second rights offering, holders of claims tied to the coal producer's 15.0% Senior Secured Second Lien PIK Toggle Notes due 2023 will receive subscription rights to purchase second lien term loan and Class B membership interests representing 24% of the aggregate equity of the new company. The aggregate subscription price for the second lien term loan and Class B membership interests offered for purchase in the second rights offering will be $31 million, according to court filings. Cortland Capital Market Services LLC, administrative agent for Patriot Coal's pre-bankruptcy lender, had earlier criticized certain aspects of the rights offerings, saying they "improperly" implicate non-participating term lenders. Backstop Agreement In a related development, Judge Phillips is set to hear a motion filed by the company to approve its agreement with a consortium of creditors led by Knighthead Capital Management LLC to backstop the rights offerings. The bankruptcy judge will take up the motion at a hearing on Sept. 16 where he will also consider confirmation of Patriot Coal's proposed restructuring plan. Under the agreement, the Knighthead-led group will purchase any second lien term loan or Class B membership interests that have not been duly subscribed for pursuant to the rights offerings. Last month, the U.S. trustee overseeing Patriot Coal's bankruptcy case, filed an objection in which it criticized the company for not disclosing the terms of the backstop agreement. About Patriot Coal Patriot Coal Corporation is a producer and marketer of coal in the United States. Patriot and its subsidiaries control 1.4 billion tons of proven and probable coal reserves -- including owned and leased assets in the Central Appalachia basin (in West Virginia and Ohio) and Southern Illinois basin (in Kentucky and Illinois) and their operations consist of eight active mining complexes in West Virginia. Patriot Coal first sought Chapter 11 protection on July 9, 2012, and, on Dec. 18, 2013, won approval of its bankruptcy-exit plan from the U.S. Bankruptcy Court for the Eastern District of Missouri. The plan turned over most of the ownership of the company to bondholders that include New York hedge fund Knighthead Capital Management LLC. The linchpins of the plan were a global settlement among the Debtors, the United Mine Workers of America, and two third parties -- Peabody Energy Corporation and Arch Coal, Inc. -- and a commitment by a consortium of creditors, led by Knighthead, to backstop two rights offerings that funded the plan. Patriot Coal Corporation and its subsidiaries commenced new Chapter 11 cases (Bankr. E.D. Va. Lead Case No. 15-32450) in Richmond, Virginia, on May 12, 2015. The cases are assigned to Judge Keith L. Phillips. Patriot Coal estimated more than $1 billion in assets and debt. The Debtors tapped Kirkland & Ellis LLP as counsel; Kutak Rock L.L.P., as co-counsel; Centerview Partners LLC as investment bankers; Alvarez & Marsal North America, LLC, as restructuring advisors; and Prime Clerk LLC, as claims and administrative agent. The U.S. trustee overseeing the Chapter 11 case of Patriot Coal Corp. appointed seven creditors of the company to serve on the official committee of unsecured creditors. The Committee is represented by Morrison & Foerster LLP as its counsel, and Tavenner & beran, PLC, as its local counsel. Jefferies LLC serves as its investment banker. The court directed the U.S. Trustee to form an official committee of retirees at the behest of Patriot Coal Non-Union Retiree VEBA. * * * The deadline to file bids for the Debtors' assets is Sept. 4, 2015, at 5:00 p.m. An auction will take place on Sept. 9, at 10:00 a.m. Patriot Coal has filed with the Bankruptcy Court a letter of intent for a proposed sale of a substantial majority of its operating assets to Blackhawk Mining, LLC, as well as a motion outlining bidding procedures. Under the terms of the letter of intent, Blackhawk would issue to Patriot's secured lenders new debt securities totaling approximately $643 million plus Class B Units providing them an ownership stake in Blackhawk. In addition, Blackhawk would assume or replace surety bonds supporting reclamation and related liabilities associated with the purchased assets. PETERSBURG REGENCY: To Seek Plan Confirmation Sept. 9 ----------------------------------------------------- Petersburg Regency, LLC's Plan of Reorganization provides for the orderly distribution of Debtor's insurance proceeds in the amount of $10,230,627. The Debtor seeks to accomplish payments under the Plan by distributing the insurance proceeds in a fair and equitable manner. The insurance proceeds will be turned over to the disbursing agent by the Virginia Court. The Debtor formerly owned a 200 unit hotel located at 380 East Washington Street, Petersburg, Va. On September 18, 2003, the Hotel was badly damaged by Hurricane Isabel. As a result, in 2003 an insurance claim arose on behalf of Debtor against Selective Insurance Company with respect to the extensive damage to the Hotel. The arbitration of the Insurance Litigation was conducted in Newark, N.J. The arbitration resulted in a final arbitration award on Dec. 30, 2014, against Selective and in favor of Debtor in the amount of $10,230,627, i.e., the Insurance Proceeds. The Combined Disclosure Statement and Confirmation hearing is set on September 9, 2015. A copy of the Disclosure Statement in support of its First Amended Plan of Reorganization dated Aug. 11, 2015, is available at: http://is.gd/SfJsxh Ittleson Objection Ittleson Trust-2010-1, on behalf of a total of 14 creditors, objected to the Debtor's request to shorten the time for Disclosure Statement and Confirmation hearing for Sept. 9, 2015. According to Ittleson, the Motion seeks the highly unusual relief of combining the Disclosure Statement approval and Plan confirmation hearing dates on the same date. It adds that the relief is all the more unusual in a case where, as here, the Settling Creditors have actively moved this case to the verge of distribution and dismissal. Ittleson noted that the Disclosure Statement and Plan are not supported by any of the Settling Creditors. Therefore, the Disclosure Statement and Plan have no chance of approval and confirmation, Ittleson told the Court. In response to Ittleson's objections, the Debtor pointed out that the Amended Plan wisely seeks modest, 7% reductions from the big three creditors -- and uses Code provisions to spread the pain of fairly and equitably distributing the Insurance Proceeds in accordance with the Code's provisions. The Debtor added that the proposed approach sidesteps many challenging issues, such as standing to pursue a Rule 9019 settlement, and multiple other landmines inherent in the Structured Dismissal Motion. In short, Debtor is seeking to work with its creditors to bring this matter to a prompt, low risk resolution. Ittleson Trust is represented by: Gary F. Eisenberg, Esq. PERKINSCOIE Tel: (212) 262-6902 Fax: (212) 917-1632 E-mail: GEisenbers@perkinscoie.com About Petersburg Regency Petersburg Regency, LLC, commenced a Chapter 11 bankruptcy case (Bankr. D.N.J. Case No. 15-17169) in Newark, New Jersey, on April 20, 2015. The case is assigned to Judge Vincent F. Papalia. An involuntary bankruptcy case was previously filed against the company (Bankr. E.D. Va. Case No. 15-30526) but the case was dismissed by consent order in March 2015. The Debtor tapped David Edelberg, Esq., at Nowell Amoroso Klein Bierman, P.A., in Hackensack, New Jersey, as counsel. According to the docket, the Debtor's exclusive period to file a plan expires on Aug. 18, 2015. RADIOSHACK CORP: Creditors Sue Hedge Fund Standard General ---------------------------------------------------------- Matt Wirz, writing for The Wall Street Journal, reported that RadioShack Corp.'s junior creditors are suing hedge fund Standard General LP, the company's largest prebankruptcy shareholder and current owner, in a last-ditch effort to get repaid. According to the report, the lawsuit, filed Aug. 31 in U.S. District Court in Fort Worth, Texas, by the committee representing RadioShack's unsecured creditors, also names Wells Fargo & Co. and former Chief Executive Officer Joseph Magnacca, alleging they helped Standard General take over the company at creditors's expense. The suit comes as the electronics retailer moves forward with a number of settlements aimed at speeding its exit from Chapter 11 protection, the report noted. About RadioShack Corporation Headquartered in Fort Worth, Texas, RadioShack is a retailer of 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 Corporation and affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 15-10197) on Feb. 5, 2015. Judge Kevin J. Carey presides over the case. David G. Heiman, Esq., Greg M. Gordon, Esq., Amanda M. Suzuki, Esq., Jonathan M. Fisher, Esq., Thomas A. Howley, Esq., and Paul M. Green, Esq., at Jones Day serve as the Debtors' bankruptcy counsel. David M. Fournier, Esq., Evelyn J. Meltzer, Esq., and John H. Schanne, II, Esq., at Pepper Hamilton LLP serve as co-counsel. Carlin Adrianopoli at FTI Consulting, Inc., is the Debtors' restructuring advisor. Maeva Group, LLC, is the Debtors' Turnaround advisor. Lazard Freres & Co. LLC is the Debtors' investment banker. A&G Realty Partners is the Debtors' real estate advisor. Prime Clerk is the Debtors' claims and noticing agent. In their Petitions, the Debtors disclosed total assets of $1.2 billion, versus total debts of $1.3 billion. Quinn Emanuel Urquhart & Sullivan, LLP and Cooley LLP represent the Official Committee of Unsecured Creditors as co-counsel. Houlihan Lokey Capital, Inc., serves as financial advisor and investment banker. The bankruptcy case is assigned to Judge Brendan L. Shannon. RELATIVITY MEDIA: Has Interim Nod to Pay Critical Vendors --------------------------------------------------------- The Hon. Michael E. Wiles of the U.S. Bankruptcy Court for the Southern District of New York entered an interim order authorizing Relativity Fashion, LLC, et al., to pay certain prepetition claims of critical vendors. The Debtors are authorized to pay some or all of the critical vendor claims, provided that prior to the final hearing to consider the relief requested in the motion the amount paid with respect to critical vendor claims won't exceed the aggregate amount of $4.0 million. The Debtors will maintain a matrix summarizing (i) the name of each critical vendor paid; (ii) the amount paid to each vendor for its critical vendor claim; and (iii) the type of goods or services provided by each critical vendor. The Debtors are authorized to enter into vendor agreements. Any payment to be made will be subject to the terms, conditions, requirements and budgets imposed on the Debtors under the Debtors' postpetition financing agreements and any order governing the Debtors' use of cash collateral and entry into the DIP Documents. About Relativity Fashion Based in New York, Relativity Fashion LLC dba M3 Relativity -- http://relativitymedia.com/-- is a privately-held entertainment company with an integrated and diversified global media platform that provides, among other things, film and television financing, production and distribution. Relativity was founded in 2004 by Ryan Kavanaugh as a films late cofinancier partnering with major studios such as Sony and Universal. In addition, the Company engages in content production and distribution, including movies, television, fashion, sports, digital and music. The Company and its affiliates filed for Chapter 11 protection on July 30, 2015 (Bankr. S.D. N.Y. Lead case No. 15-11989). Judge Michael E. Wiles presides over the Debtors' Chapter 11 cases. Craig A. Wolfe, Esq., Malani J. Cademartori, Esq., and Blanka K. Wolfe, Esq., at SHEPPARD MULLIN RICHTER & HAMPTON LLP, and Richard L. Wynne, Esq., Bennett L. Spiegel, Esq., and Lori Sinanyan, Esq., at JONES DAY, represent the Debtors in the bankruptcy cases. The Debtors reported total assets of $559.9 million, and total debts: $1.1 billion as of Dec. 31, 2014. RESPONSE GENETICS: Rust Omni Approved as Claims Agent ----------------------------------------------------- Response Genetics, Inc., sought and obtained approval from the U.S. Bankruptcy Court for the District of Delaware to employ Rust consulting Omni Bankruptcy as claims and noticing agent in the Chapter 11 case, effective nunc pro tune to the Petition Date. To satisfy the Claims Agent Protocol, the Debtor has obtained and reviewed engagement proposals from at least two other court-approved claims and noticing agents to ensure selection through a competitive process. Prior to the Petition Date, the Debtor provided Rust Omni a retainer in the amount of $5,000. For its services, the firm will charge at these discounted rates: Position Hourly Rate -------- ----------- Clerical Support $21 to $38 Project Specialist $48 to $63 Project Supervisors $63 to $80 Consultants $60 to $106 Technology/Programming $85 to $110 Senior Consultants $119 to $148 The firm will waive fees for e-mail noticing, and will charge $0.08 per image for fax noticing. For inputting proofs of claims, the firm will charge at its hourly rates. For data storage, the firm will charge for $.05 per record for over 10,000 records and $0.04 per record for over 100,000 records. With respect to the informational Web site, the firm will charge $63 per hour for data entry and $80 to $110 per hour for programming and customization. For the preparation of schedules and statements, the firm will charge $42 to $148 per hour. About Response Genetics Los Angeles, California-based Response Genetics, Inc. (otcqb:RGDX) -- http://www.responsegenetics.com-- is a CLIA-certified clinical laboratory focused on the development and sale of molecular diagnostic testing services for cancer. The Company's technologies enable extraction and analysis of genetic information derived from tumor cells stored as formalin-fixed and paraffin-embedded specimens. The Company's principal customers include oncologists and pathologists. In addition to diagnostic testing services, the Company generates revenue from the sale of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. Response Genetics, fdba Bio Type, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 15-11663) on Aug. 9, 2015, represented by James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP. Canaccord Genuity, Inc., serves as its investment banker; and Rust Consulting Omni Bankruptcy acts as its claims and noticing agent. The Company disclosed total assets of $10.7 million and total debts of $15.7 million. The petition was signed by Thomas Bologna, chairman and chief executive officer. * * * Response Genetics has executed a "stalking horse" agreement to sell all of its business assets to Cancer Genetics, Inc. for $14,000,000, comprised of a 50/50 split in value of cash and the common stock of CGI. CGI is represented by Kramer Levin Naftalis & Frankel LLP's James A. Grayer, Esq. RESPONSE GENETICS: U.S. Trustee, SWK Object to KEIP --------------------------------------------------- Response Genetics, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to authorize and approve the implementation of its key employee incentive plan. The KEIP covers two tiers of employees: (1) 17 current rank and file non-insider employees of the Debtor, and (2) 2 existing officers of the Debtor, Chief Executive Officer Thomas A. Bologna and Chief Financial Officer Kevin Harris. The Debtor believes that the Eligible Employees are absolutely critical to the Sale process and their best efforts are required to maximize the value of the Assets. The Non-Insider Eligible Employees include key division vice presidents, technicians, supervisors, and sales representatives of the Debtor. The KEIP contains, among others, the following terms: (a) Upon closing of the Sale, the Non-Insider Eligible Employees shall share an aggregate payment in an amount of up to $318,886. Each Non-Insider Eligible Employee will receive a portion of the Non-Insider Bonus Pool, subject to the terms of the KEIP. To the extent that a Non-Insider Eligible Employee is not eligible to receive his or her share from the Non-Insider Bonus Pool, unless otherwise agreed to by the DIP Agent, the Non-Insider Bonus Pool shall be reduced by an amount equal to the amount allocated to such Non-Insider Eligible Employee. (b) Upon closing of the Sale, the Insider Eligible Employees shall share in an aggregate payment in an amount of up to $289,698. The Insider Bonus Pool will be increased by 20% of every dollar by which the actual recovery received by the DIP Lenders from the Sale purchaser in respect of the asset purchase agreement governing the Sale exceeds $10,540,585. The Insider Eligible Employees shall receive a portion of the Insider Bonus as set forth in the KEIP. To the extent that an Insider Eligible Employee is not eligible to receive his share from the Insider Bonus Pool, unless otherwise agreed to by the DIP Agent, the Insider Bonus Pool shall be reduced by an amount allocated to such Insider Eligible Employee. (c) The Eligible Employees must be employed by the Debtor through the closing of the Sale in order to be eligible to receive the incentive payments earned. The incentive payments will be paid on the closing date of the Sale. However, if an Eligible Employee's employment with the Company is terminated without cause, or due to death or disability, prior to the closing date of the Sale, then such Eligible Employee shall be entitled to receive any payments that would have become due under the KEIP had the Eligible Employee been employed through such closing date. Each Eligible Employee is entitled to payment out of the respective bonus pool even if such Eligible Employee is rehired by the Purchaser. (d) The payments under the KEIP will be in lieu of any other performance bonus, retention or severance compensation otherwise payable to the Eligible Employees by the Debtor. Payment of any KEIP amounts is further subject to any and all terms, conditions, and limitations regarding such payments set forth in the Interim DIP Order, the DIP Credit Facility Documents and the other documents governing the Debtor's postpetition financing obtained from the DIP Agent and DIP Lenders. James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, tells the Court that under the exigent circumstances present, the Debtor requires the focused and committed services of the Eligible Employees to close the Sale. He further tells the Court that under the terms of the KEIP, the Eligible Employees will be paid an incentive payment only if the Sale is consummated. Mr. O'Neill contends that the Debtor has determined in the exercise of its sound business judgment that it is in the best interests of its estate to institute the KEIP for the Eligible Employees. Objections to the Debtor's Motion Andrew R. Vara, the Acting United States Trustee for Region 3, objected to the Debtor's Motion. Mr. Vara contends that the Debtor has failed to carry its burden of establishing that the KEIP is primarily incentivizing. He further contends that the KEIP is nothing more than a retention plan to compensate two senior executives for being present at the close of a sale of the Debtor's assets. SWK Funding LLC also objected to the Debtor's motion. Scott D. Cousins, Esq., at Bayard, P.A., in Wilmington, Delaware and Brian Smith, Esq., at Holland & Knight LLP, in Dallas, Texas, tell the Court that the DIP Financing Documents state that any KEIP payments must be made pursuant to a key employee incentive plan that is subject to approval by SWK in its sole discretion. They further tell the Court that the KEIP that the Debtor seeks to approve is not acceptable to SWK in its current form. They relate that the KEIP proposes to pay its Insider Eligible Employees from and Insider Bonus Pool that will be increased by 20% of the amount by which SWK's recovery exceeds a specified threshold. They further relate that the KEIP does not sufficiently describe how this "20%" enhancement to the Insider Bonus Pool will be calculated and determined. They assert that because the KEIP is not acceptable to SWK, the Debtor may not make any KEIP payments. Response Genetics' attorneys can be reached at: Jeffrey N. Pomerantz, Esq. Ira D. Kharasch, Esq. James E. O'Neill, Esq. John W. Lucas, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 Telephone: (302)652-4100 Facsimile: (302)652-4400 E-mail: jpomerantz@pszjlaw.com ikharasch@pszjlaw.com joniell@pszjlaw.com jlucas@pszjlaw.com The U.S. Trustee is represented by: Timothy J. Fox, Jr., Esq. Linda Casey, Esq. Mark S. Kenney, Esq. UNITED STATES DEPARTMENT OF JUSTICE Office of the United States Trustee J. Caleb Boggs Federal Building 844 King Street, Suite 2207, Lockbox 35 Wilmington, DE 19801 Telephone: (302)573-6491 Facsimile: (302)573-6497 SWK Funding LLC is represented by: Neil B. Glassman, Esq. Scott D. Cousins, Esq. Evan T. Miller, Esq. BAYARD, P.A. 222 Delaware Avenue, Suite 900 Wilmington, DE 19801 Telephone: (302)655-5000 Facsimile: (302)658-6395 E-mail: nglassman@bayardlaw.com scousins@bayardlaw.com emiller@bayardlaw.com - and - Robert W. Jones, Esq. Brent R. McIlwain, Esq. Brian Smith, Esq. HOLLAND & KNIGHT LLP 200 Crescent Court, Suite 1600 Dallas, TX 75201 Telephone: (214)964-9500 Facsimile: (214)964-9501 E-mail: Robert.Jones@hklaw.com Brent.McIlwain@hklaw.com Brian.Smith@hklaw.com About Response Genetics Los Angeles, California-based Response Genetics, Inc. (otcqb:RGDX) -- http://www.responsegenetics.com-- is a CLIA-certified clinical laboratory focused on the development and sale of molecular diagnostic testing services for cancer. The Company's technologies enable extraction and analysis of genetic information derived from tumor cells stored as formalin-fixed and paraffin-embedded specimens. The Company's principal customers include oncologists and pathologists. In addition to diagnostic testing services, the Company generates revenue from the sale of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. Response Genetics, fdba Bio Type, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 15-11663) on Aug. 9, 2015, represented by James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP. Canaccord Genuity, Inc., serves as its investment banker; and Rust Consulting Omni Bankruptcy acts as its claims and noticing agent. The Company disclosed total assets of $10.7 million and total debt of $15.7 million. The petition was signed by Thomas Bologna, chairman and chief executive officer. RESPONSE GENETICS: Wins Approval to Pay Critical Vendors -------------------------------------------------------- Response Genetics, Inc., filed with the U.S. Bankruptcy Court for the District of Delaware a motion seeking to pay up to approximately $160,000 in essential vendor claims. As of the Petition Date, the Debtor's total accounts payable was over $1 million. The proposed $160,000 cap represents only 15% of the total accounts payable outstanding. In addition, the majority of the prepetition claims outstanding to the essential vendors constitute goods shipped within 20 days of the Petition Date, and would therefore be entitled to administrative priority status in any case under Section 503(b)(9) of the Bankruptcy Code in any event. Judge Laurie S. Silverstein has entered an order authorizing the Debtor to pay claims of critical vendors. The order provides that payments for essential vendor claims will not exceed the amount of $365,000. About Response Genetics Los Angeles, California-based Response Genetics, Inc. (otcqb:RGDX) -- http://www.responsegenetics.com-- is a CLIA-certified clinical laboratory focused on the development and sale of molecular diagnostic testing services for cancer. The Company's technologies enable extraction and analysis of genetic information derived from tumor cells stored as formalin-fixed and paraffin-embedded specimens. The Company's principal customers include oncologists and pathologists. In addition to diagnostic testing services, the Company generates revenue from the sale of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. Response Genetics, fdba Bio Type, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 15-11663) on Aug. 9, 2015, represented by James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP. Canaccord Genuity, Inc., serves as its investment banker; and Rust Consulting Omni Bankruptcy acts as its claims and noticing agent. The Company disclosed total assets of $10.7 million and total debts of $15.7 million. The petition was signed by Thomas Bologna, chairman and chief executive officer. * * * Response Genetics has executed a "stalking horse" agreement to sell all of its business assets to Cancer Genetics, Inc. for $14,000,000, comprised of a 50/50 split in value of cash and the common stock of CGI. CGI is represented by Kramer Levin Naftalis & Frankel LLP's James A. Grayer, Esq. ROADRUNNER ENTERPRISES: Had Until August 31 to Use Cash Collateral ------------------------------------------------------------------ Judge Kevin R. Huennekens of the United States Bankruptcy Court for Eastern District of Virginia, Richmond Division, gave Roadrunner Enterprises, Inc., interim authority to use cash collateral through Aug. 31, 2015. Judge Huennekens signed off a second stipulation between the Debtor and Bank of McKenney, under which the Debtor is authorized to use the cash collateral securing its prepetition indebtedness from BOM to pay for repairs and improvements to the properties at 21508 Jackson Street, in Ettrick, Virginia, and 905 Forest View Drive, in Colonial Heights, Virginia, to prepare those properties for sale. Further, the Stipulation provides that costs of the repairs and improvements to the Jackson Street Property and to the Forest View Property, which total $9,973 and $3,872, respectively, will be advanced by BOM to the Debtor by adding the same to the balances of the loans secured by those properties, with the funds evidencing those advances to be applied to the payments to BOM required by the First Interim Order and to bring current the post-petition interest payments on BOM's loans. Judge Huennekens also signed off a third stipulation between the Debtor and Towne Bank, authorizing the Debtor to use cash collateral securing its prepetition indebtedness to pay Towne Bank in exchange for adequate protection payments on July 30, 2015 and August 31, 2015, all cash collateral in excess of expenditures. Moreover, Judge Huennekens signed off a second stipulation between the Debtor and the Bank of Southside Virginia, authorizing the Debtor's use of cash collateral through August 19. BSV asserted that the Debtor violated the terms of the order approving its first stipulation by failing to comply with its reporting requirements. Accordingly, under the second stipulation, the Debtor is ordered to reimburse BSV its reasonable attorney's fees in the amount of $3,000 incurred as a direct result of that failure. The parties will confer as to determine how the payment will be made and failing agreement, the matter may be put back on the Court's docket for further proceedings. The Court will convene a hearing on October 5, 2015 at 2:00 p.m., to hear arguments regarding the Debtor's alleged violation of its stipulation with BSV. Roadrunner Enterprises, Inc. is represented by: David K. Spiro, Esq. Rachel A. Greenleaf, Esq. HIRSCHLER FLEISCHER, P.C. The Edgeworth Building 2100 East Cary Street Post Office Box 500 Richmond, VA 23218 Tel: (804) 771-9500 Fax: (804) 644-0957 Email: dspiro@hf-law.com rgreenleaf@hf-law.com Bank of McKenney is represented by: Robert H. Chappell, III, Esq. Neil E. McCullagh, Esq. James K. Donaldson, Esq. SPOTTS FAIN PC 411 East Franklin Street, Suite 600 Richmond, VA 23219 Tel: (804) 697-2000 Fax: (804) 697-2100 Email: rchappell@spottsfain.com nmcullagh@spottsfain.com The Bank of Southside Virginia is represented by: Jonathan L. Hauser, Esq. TROUTMAN SANDERS LLP 222 Central Park Avenue, Suite 2000 Virginia Beach, VA 23462 Tel: (757) 687-7768 Fax: (757) 687-1505 Email: jonathan.hauser@troutmansanders.com About Roadrunner Enterprises Headquartered in Chesterfield County, Virginia, Roadrunner Enterprises Inc. owns the Roadrunner Campground and more than 70 rental properties, lots, and other real estate interests. Roadrunner Enterprises filed for Chapter 11 bankruptcy protection (Bank. E.D. Va. Case No. 15-30604) on Feb. 6, 2015. The petition was signed by Carl Adenauer, president. David K. Spiro, Esq., at Hirschler Fleischer, P.C., serves as the Debtor's counsel. Judge Kevin R. Huennekens presides over the case. The Debtor estimated assets and liabilities of at least $10 million. S&S STEEL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: S&S Steel Services, Inc. 444 East 29th Street Anderson, IN 46016 Case No.: 15-07401 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Southern District of Indiana (Indianapolis) Judge: Hon. Jeffrey J. Graham Debtor's Counsel: Jay P. Kennedy, Esq. KROGER GARDIS & REGAS, LLP 111 Monument Cir Ste 900 Indianapolis, IN 46204-5175 Tel: 317-692-9000 Fax: 317-264-6832 Email: jpk@kgrlaw.com - and - James A. Knauer, Esq. KROGER GARDIS & REGAS, LLP 111 Monument Circle, Suite 900 Indianapolis, IN 46204-5125 Tel: 317-692-9000 Fax: 317-264-6832 Email: jak@kgrlaw.com - and - Harley K Means, Esq. KROGER GARDIS & REGAS, LLP 111 Monument Circle, Suite 900 Indianapolis, IN 46204-5125 Tel: 317-777-7439 Fax: 317-777-7439 Email: hkm@kgrlaw.com - and - Amanda Dalton Stafford, Esq. KROGER, GARDIS & REGAS, LLP 111 Monument Circle, Suite 900 Indianapolis, IN 46204-5125 Tel: 317-777-7437 Fax: 317-777-7437 Email: ads@kgrlaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $10 million to $50 million The petition was signed by Barry Sharp, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/insb15-07401.pdf SEBRING MANAGEMENT: Has Cash Use Until Sept. 3 ---------------------------------------------- Sherri Toub, a bankruptcy columnist for Bloomberg News, reported that Sebring Software Inc., a Florida-based provider of management services for the non-clinical side of dental practices, can use cash representing collateral for secured lenders' claims for specified purposes through Sept. 3. According to the report, on Sept. 3, a bankruptcy judge in Tampa, Florida, will continue the preliminary hearing on cash use. It was opposed by MidMarket Capital Partners LLC, as agent for a group of pre-bankruptcy secured lenders owed more than $16 million of principal and accrued interest. Clearwater, Florida-based Sebring Management FL, LLC, and its three affiliates sought protection under Chapter 11 of the Bankruptcy Code on Aug. 23, 2015 (Bankr. M.D. Fla., Case No. 15-08589). The Debtors' counsel is Jay B Verona, Esq., at Shumaker, Loop & Kendrick, LLP, in Tampa, Florida. SHREE MELDIKRUPA: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Shree Meldikrupa Incorporated 251 W General Screven Way Hinesville, GA 31313 Case No.: 15-41411 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: R. Brandon Galloway, Esq. GALLOWAY & GALLOWAY, PC P O Box 674 Pooler, GA 31322 Tel: 912-748-9100 Fax: 912-748-9109 Email: amanda@gallowaylaw.com Total Assets: $582,117 Total Liabilities: $1.3 million The petition was signed by Kantilal Patel, CEO. A list of the Debtor's five largest unsecured creditors is available for free at http://bankrupt.com/misc/gasb15-41411.pdf STEWARD HEALTH: S&P Affirms B- Corp. Credit Rating, Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed all of its ratings, including the 'B-' corporate credit rating, on Boston-based acute-care hospital operator Steward Health Care LLC. The rating outlook is stable. "Our ratings affirmation reflects our view that recent operating improvements, due to the closure of an underperforming hospital, cost cutting, and better organic volumes, will lead to an increase in EBITDA," said Standard & Poor's credit analyst Shannan Murphy. While the company has not yet seen the full-year impact of the cost reduction effort, S&P believes the company's EBITDA will continue to strengthen, which should result in positive free cash flow in 2016. S&P believes that with expected sustained improvement in operating performance, the company should be able to refinance or extend the maturity on its revolver prior to the facility's maturity date. Steward is a low-cost, fully integrated provider of community-based health care services narrowly focused on the Massachusetts marketplace, a market that S&P views as highly competitive because of the presence of several large academic medical centers that account for a sizable portion of patient discharges. Steward, like other hospital systems, is subject to significant reimbursement risks, and its large reliance on Medicare leaves it susceptible to cuts in reimbursement rates. In addition, Steward's profitability, though slowly improving, is below average when compared with other health care facility operators, including other hospital systems. While EBITDA margins have improved over the past several quarters due to cost cutting (principally labor), S&P believes that the company's higher reliance on government reimbursement limits its ability to raise margins closer to peer levels in the 15% to 20% range. For these reasons, S&P assess business risk as "vulnerable". S&P's stable outlook on Steward reflects S&P's view that improving EBITDA is likely to result in better free cash flow over the next two years. It also reflects S&P's expectation that this level of operating improvement should enable the company to refinance or extend the maturity on its revolver prior to the facility's maturity date. S&P could lower the rating or revise the outlook to negative if Steward is unable to successfully extend or refinance its revolver prior to the end of 2015, as this would, in S&P's view, represent a serious credit risk. S&P could also lower the rating if it believes the company will continue to suffer cash flow deficits over time, leading S&P to believe that the capital structure is unsustainable and likely to be restructured. In S&P's view, a higher rating would be conditioned on Steward establishing a track record of generating consistently positive cash flow over time, allowing the company to expand the cushions on its financial covenants and leading it to rely less on its revolver for seasonal working capital needs. Under this scenario, S&P would also need to be comfortable that the company's financial policies would be unlikely to increase leverage meaningfully from current levels or jeopardize its free cash flows. In this case, S&P might view credit risk as more consistent with 'B' rated peers, and raise the rating accordingly. SULLIVAN INTERNATIONAL: Files Amended Schedules of Asset and Debt ----------------------------------------------------------------- Sullivan International Group, Inc., filed with the U.S. Bankruptcy Court for the Southern District of California amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $16,154,825 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $8,675,745 E. Creditors Holding Unsecured Priority Claims $5,181 F. Creditors Holding Unsecured Non-Priority Claims $8,861,166 ----------- ----------- Total $16,154,825 $17,542,093 The Debtor disclosed total assets of $16,276,678 and total liabilities of $17,256,605 in a prior iteration of the schedules. A copy of the Amended Schedules is available for free at http://bankrupt.com/misc/SullivanIntl_220_amendedSAL.pdf About Sullivan International Sullivan International Group, Inc., an environmental engineering provider, commenced a Chapter 11 bankruptcy case (Bankr. S.D. Cal. Case No. 15-02281) in San Diego, California, on April 6, 2015. Steven E. Sullivan signed the petition as chief executive officer. The Debtor disclosed total assets of $16.27 million and total Debts of $17.25 million. James P. Hill, Esq., at Sullivan, Hill, Lewin, Rez & Engel, APLC, in San Diego, represents the Debtor as counsel. 3C Advisors & Associates, Inc., serves as financial advisor. The U.S. Trustee overseeing the Debtor's bankruptcy case appointed DeNovo Constructors Inc., Tetra Tech Inc., Park Construction Co., Energy Solutions, Wittie Letsche & Waldo LLP, Lawson Environmental Service, Meyer Construction Inc., Cascade Drilling LP, and McMillin NTC 903/904 LLC to serve on the official committee of unsecured creditors. The Committee is represented by Thomas R. Fawkes, Esq., and Brian J. Jackiw, Esq., at Goldstein & McClintock LLLP, and Ballard Spahr LLP as its local co-counsel. T-L CHEROKEE: $24 Mil. Settlement With MB Financial Approved ------------------------------------------------------------ T-L Cherokee South LLC sought and obtained from Judge J. Philip Klingeberger of the U.S. Bankruptcy Court for the Northern District of Indiana, Hammond Division, approval of its compromise of claims with MB Financial Bank N.A. The Bank, the Debtor and its related Debtors, T-L Conyers, LLC, T-L Smyrna, LLC and T-L Village Green, LLC, engaged in extensive litigation with the Court and in several appeals with respect to numerous issues in their Chapter 11 cases. They participated in mandatory mediation in the United States Court of Appeals for the 7th Circuit, in conjunction with appeals filed by the Bank from the Orders of the Court that were affirmed by the District Court. They ultimately reached a global resolution of all issues in the Debtor's Chapter 11 case, as well as the Chapter 11 cases of its related Debtors. The settlement contains, among others, the following terms: (a) With respect to the Debtor, Conyers and Smyrna, the Bank shall enter into a Note Purchase and Sale Agreement for the sale by the Bank of its Claims in the Cherokee South Chapter 11 case, the Smyrna Chapter 11 case and the Conyers Chapter 11 case to IP-TL Cherokee South, LLC, IP-TL Smyrna, LLC and IP-TL Conyers, LLC, respectively, including any and all mortgages, notes and loan documents relating thereto, including all guaranty and indemnity agreements executed in connection therewith by Tri-Land Properties, Inc. and further including the transfer to the Iron Point Parties of all reserves, escrows, cash collateral and other amounts held by the Bank and all rights to future payment of any sums from any parties in connection with the Cherokee South Shopping Center Property, the VG Property, the Smyrna Property and the Conyers Property. The Bank acknowledges and agrees that it shall retain no claims against Cherokee South, Smyrna, Conyers and Tri-Land, except for any claim for breach of the settlement and claims against Tri-Land, if any, based on Environmental Indemnity Agreements executed by Tri-Land in connection with the loans made to Cherokee South, Smyrna, Conyers and Village Green after closing of the Iron Point Claim Acquisitions. (b) As full and complete payment to the Bank for the purchase of the Claims in the CS Case, the Smyrna Case and the Conyers Case, and the release of the Claims in the VG Case, the Bank shall pay the following amounts: (i) $24 million in cash on the closing date; (ii) The amount of the second installment of the 2014 real estate taxes payable in August 2015 for the VG Property, which amount is estimated at $163,624 on the closing date subject to reproration upon receipt of the actual second installment 2014 tax bill; (iii) The amount of the existing tenant security deposits for the VG Property, which amount is $65,356.00; and (iv) The amount of the shortfall in amounts collectible from tenants during the period commencing January 1, 2015 and ending June 30, 2015 on account of real estate taxes on the VG Property relative to one-half of the estimated amount of 2014 real estate taxes payable in 2015, which shortfall amount is estimated to be $50,611.00 subject to reproration upon receipt of the actual second installment of the 2014 tax bill. (c) As additional consideration to the Bank under the proposed settlement, Village Green shall enter into a contract for the sale of the VG Property to the Bank for a purchase price of not less than $12,000,000, which purchase price is payable by the Bank by crediting a like amount of the Bank's claim in the Chapter 11 case of Village Green. The sale of the VG Property is subject to approval by the Court. All costs of the sale of the VG Property, except for the payment of Village Green's attorneys fees, shall be paid by the Bank. (d) The Debtor and Related Debtors will file Motions to Dismiss their respective Chapter 11 cases, and shall execute and deliver releases to the Bank. Only Village Green will receive a release from the Bank. David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago, Illinois, relates that approval of the proposed settlement is in the best interests of the Debtor, its creditors and its estate. Significant savings in litigation fees, costs and time will be realized by the settlement. He contends that the continued risk of litigation will be avoided and that the several disputes between the Debtor and the Bank will finally be resolved. Mr. Welch adds that sufficient funds exist to pay administrative claims and the claims of pre-petition creditors. T-L Cherokee South, LLC is represented by: David K. Welch, Esq. Arthur G. Simon, Esq. Jeffrey C. Dan, Esq. Brian P. Welch, Esq. CRANE, HEYMAN, SIMON, WELCH & CLAR 135 South LaSalle Street, Suite 3705 Chicago, IL 60603 Telephone: (312)641-6777 Facsimile: (312)641-7114 E-mail: dwelch@craneheyman.com asimon@craneheyman.com jdan@craneheyman.com bwelch@craneheyman.com About T-L Cherokee South T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013. The Debtors own various shopping centers in Georgia and Kansas. The Debtors are represented by David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated assets and debts of $10 million to $50 million. T-L Cherokee owns and operates a commercial shopping center in Overland Park, Kansas known as "Cherokee South Shopping Center". The Debtors are entities managed by Westchester, Illinois-based Tri-Land Properties, Inc., which sought Chapter 11 protection (Case No. 12-22623) on July 11, 2012. TERVITA CORP: S&P Affirms 'B-' Corp. Credit Rating, Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services said it affirmed its 'B-' long-term corporate credit rating on Calgary, Alta.-based integrated environmental service company Tervita Corp. The outlook is stable. At the same time, Standard & Poor's affirmed its 'B-' issue-level rating and '3' recovery rating on the secured notes; and its 'CCC' issue-level rating and '6' recovery rating on the company's subordinated notes. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%; lower half of the range) recovery in a default scenario, while the '6' recovery rating indicates S&P's expectation of negligible (0%-10%) recovery. "The ratings on Tervita reflect our view of the company's "highly leveraged" financial risk profile and associated high fixed charges, negligible funds from operations generation, and forecast negative free operating cash flow throughout our cash flow forecasting period," said Standard & Poor's credit analyst Michelle Dathorne. These weaknesses, which hamper the ratings, are somewhat tempered by the scope of Tervita's operations, the company's ability to generate fairly stable EBITDA and margins at peaks and troughs of the hydrocarbon price cycle, and an "adequate" liquidity profile. Tervita provides services in various fields, including energy-related waste management, environmental remediation, and well servicing. The company's operations in western Canada generate substantially all of its gross profits (pro forma the sale of its U.S. assets). S&P's "weak" business risk profile takes into account Tervita's participation in the competitive and cyclical oilfield services market, a lack of long-term contracts, an increasingly competitive business environment, and S&P's assessment of the company's relatively stable operating margins when compared with those of other oilfield service operators. Nevertheless, S&P believes Tervita's breadth of operations through its network of 60 different facilities provides moderate scale, which S&P views as one of the strongest components in its business risk profile. In S&P's view, Tervita's "highly leveraged" financial risk profile, which reflects its high debt-to-EBITDA ratio, large cash flow requirements to service its fixed charges, and financial sponsor ownership (which S&P characterizes as FS-6), constrain the ratings. The stable outlook reflects S&P's assumption that despite the slowdown in the energy sector, Tervita's profitability, cash flow generation, and available liquidity should allow the company to meet its fixed-charge obligations during S&P's outlook period, which it views as being the key consideration at this rating level. S&P could lower the ratings if the downside risks to S&P's forecast materialize--such as a protracted weakness in economic trends or other operating problems--which could cause the company's earnings to diminish to the point that liquidity becomes constrained and the company could not meet its fixed-charge obligations. Specifically, S&P could lower the rating if available liquidity (cash and revolver availability) falls below C$200 million, which is close to the amount the company would need in addition to its EBITDA generation, as per S&P's base-case forecast, to service its fixed-charge obligations (interest and capital spending) for the following 12 months. Although highly unlikely during the next year, S&P could raise the ratings if the company reduces debt and improves its operating profile such that its debt-to-EBITDA ratio falls below 5x. An upgrade would also be contingent on the company maintaining "adequate" liquidity, with sources of cash sufficient to cover uses by at least 1.2x over the following 12 months, and earnings volatility being at least unchanged. TOP SHELV: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Top Shelv Worldwide, LLC 5117 Garfield Road Auburn, MI 48611 Case No.: 15-21770 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Eastern District of Michigan (Bay City) Judge: Hon. Daniel S. Opperman Debtor's Counsel: Elias Xenos, Esq. THE XENOS LAW FIRM, PLC 1821 W. Maple Road Birmingham, MI 48009 Tel: (248) 812-9495 Fax: (248) 498-6272 Email: etx@XenosLawFirm.Com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Manojkumar B. Shah, principal. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mieb15-21770.pdf TROCOM CONSTRUCTION: Had Until August 31 to Use Cash Collateral --------------------------------------------------------------- Judge Nancy Hershey Lord of the United States Bankruptcy Court for Eastern District of New York gave Trocom Construction Corp. final authority to use cash collateral securing its prepetition indebtedness through and including Aug. 31, 2015. In exchange for the use of cash collateral, the Debtor is directed to provide adequate protection to M&T Bank, 460 Kingsland Avenue Real Estate LLC, and Reveal Kingsland LLC. The Debtor will deposit all cash and proceeds of the Cash Collateral into a separate debtor-in-possession account to be opened and maintained at a branch of M&T from which the Debtor will be authorized, among other things, to make adequate protection payments from the Cash Collateral to M&T. M&T's Replacement Liens are senior to those liens granted to Liberty Mutual in the Order approving DIP financing and the liens of 460 and Reveal are junior to those granted to Liberty Mutual. The Debtor will make monthly adequate protection payments to M&T in the amount of $46,197 each, the first of which will be made on June 1, 2015, and thereafter on the 1st day of each and every month during the Budget Period. Additionally, the Debtor will tender monthly payments of $29,763 to Newfound LLC for postpetition use and occupancy of a certain yard and equipment storage facility located at 56-54 61st Road, in Maspeth, New York. The Debtor is authorized and directed to perform all acts and to execute, deliver and comply with the terms of the Loan Documents as the Lenders may require, or which otherwise may be deemed reasonably necessary by the Lenders to effectuate the terms and conditions of this Stipulation and Order. Trocom Construction Corp. is represented by: Matthew G. Roseman, Esq. Bonnie L. Pollack, Esq. CULLEN AND DYKMAN, LLP 100 Quentin Roosevelt Boulevard Garden City, NY 11530 Tel: (516) 357-3700 Fax: (516) 357 – 3792 Email: mroseman@cullenanddykman.com bpollack@cullenanddykman.com Manufacturers and Traders Trust Company a/k/a M&T Bank is represented by: Richard J. McCord, Esq. Thomas J. McNamara, Esq. Carol A. Glick, Esq. CERTILMAN BALIN ADLER & HYMAN, LLP 90 Merrick Avenue East Meadow, NY 11554 Tel: (516) 296-7000 Email: rmccord@certilmanbalin.com tmcnamara@certilmanbalin.com cglick@certilmanbalin.com Liberty Mutual is represented by: Jonathan Bondy, Esq. Scott A. Zuber, Esq. CHIESA SHAHINIAN & GIANTOMASI PC One Boland Drive West Orange, NJ 07052 Tel: (973) 325-1500 Fax: (973) 530-2252 Email: jbondy@csglaw.com szuber@csglaw.com About Trocom Construction Trocom Construction Corp. was formed in 1969 by Salvatore Trovato. The Company is in the heavy construction business. Its primary customer is the City of New York through its various agencies. The Company has 75 employees, the majority of whom are members of various unions. Joseph Trovato is presently the president and holder of 100% of the voting shares of Trocom. Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case No. 15-42145) on May 7, 2015, in Brooklyn. Judge Nancy Hershey Lord presides over the case. The Debtor tapped Cullen & Dykman, LLP, as its general bankruptcy counsel. The Debtor estimated $10 million to $50 million in assets and less than $10 million in debt. According to the docket, the Chapter 11 plan and disclosure statement are due Sept. 4, 2015. TROCOM CONSTRUCTION: Has Authority to Obtain $3.4MM in DIP Loan --------------------------------------------------------------- Judge Nancy Hershey Lord of the United States Bankruptcy Court for Eastern District of New York gave Trocom Construction Corp. final authority to obtain a secured postpetition financing facility from Liberty Mutual Insurance Company. Pursuant to the Final Order, the Debtor is authorized to obtain from the Loan Facility the amount of $3,477,131. The DIP Lender is granted superpriority administrative expense claim status with respect to all obligations of the Debtor to Liberty arising under the Loan Facility. Liberty is also granted automatically perfected junior security interests in and liens on all of the Debtor's assets to secure all loan obligations. The Debtor's ability to continue its operations, to maintain business relationships, to make payroll, to pay the costs of administration of its estate and to satisfy other working capital and operational needs, depends on obtaining immediate access to the Loan Facility. The access of the Debtor to sufficient working capital and liquidity through the incurrence of new indebtedness for borrowed money and other financial accommodations is vital for preserving and maintaining the going concern value of the Debtor. Failure to obtain the relief requested in the Motion will immediately and irreparably harm the Debtor, its estate, creditors and equity holders. M&T Bank objected to the Debtor's motion for entry of interim and final orders authorizing postpetition financing, asserting that the Debtor is authorized to use M&T's cash collateral according to the terms and provisions of the ICCO in return for which the Debtor granted to M&T certain replacement liens on all property of the Debtor and its estates and M&T's first priority blanket lien in and to the postpetition collateral is binding upon any creditors who have extended or may hereafter extend secured or unsecured credit to the Debtor, including Liberty, which is presently contemplating entering into a DIP Loan Facility with the Debtor in the amount of up to $5,000,000. Trocom Construction Corp. is represented by: Matthew G. Roseman, Esq. Bonnie L. Pollack, Esq. CULLEN AND DYKMAN, LLP 100 Quentin Roosevelt Boulevard Garden City, NY 11530 Tel: (516) 357-3700 Fax: (516) 357 – 3792 Email: mroseman@cullenanddykman.com bpollack@cullenanddykman.com Manufacturers and Traders Trust Company a/k/a M&T Bank is represented by: Richard J. McCord, Esq. Thomas J. McNamara, Esq. Carol A. Glick, Esq. CERTILMAN BALIN ADLER & HYMAN, LLP 90 Merrick Avenue East Meadow, NY 11554 Tel: (516) 296-7000 Email: rmccord@certilmanbalin.com tmcnamara@certilmanbalin.com cglick@certilmanbalin.com Liberty Mutual is represented by: Jonathan Bondy, Esq. Scott A. Zuber, Esq. CHIESA SHAHINIAN & GIANTOMASI PC One Boland Drive West Orange, NJ 07052 Tel: (973) 325-1500 Fax: (973) 530-2252 Email: jbondy@csglaw.com szuber@csglaw.com About Trocom Construction Trocom Construction Corp. was formed in 1969 by Salvatore Trovato. The Company is in the heavy construction business. Its primary customer is the City of New York through its various agencies. The Company has 75 employees, the majority of whom are members of various unions. Joseph Trovato is presently the president and holder of 100% of the voting shares of Trocom. Trocom commenced a Chapter 11 bankruptcy case (Bankr. E.D.N.Y. Case No. 15-42145) on May 7, 2015, in Brooklyn. Judge Nancy Hershey Lord presides over the case. The Debtor tapped Cullen & Dykman, LLP, as its general bankruptcy counsel. The Debtor estimated $10 million to $50 million in assets and less than $10 million in debt. According to the docket, the Chapter 11 plan and disclosure statement are due Sept. 4, 2015. VILLA GROUP: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Villa Group, Inc. 302 Kings Hwy Ste. 202 Brownsville, TX 78521 Case No.: 15-70443 Chapter 11 Petition Date: August 31, 2015 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Debtor's Counsel: Antonio Villeda, Esq. VILLEDA LAW GROUP 6316 N 10th St, Bldg. B McAllen, TX 78504 Tel: 956-631-9100 Email: avilleda@mybusinesslawyer.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Alejandro Villareal, director and sole shareholder. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. WESCO INTERNATIONAL: S&P Affirms 'BB' CCR, Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit ratings on Pittsburgh-based industrial distributor WESCO International Inc. and its wholly owned subsidiary WESCO Distribution Inc. The outlook is stable. At the same time, S&P affirmed all of its issue-level ratings on WESCO International Inc. and its subsidiaries WESCO Distribution Inc. and WDCC Enterprises Inc. S&P's recovery ratings on the debt remain unchanged. S&P's affirmation on WESCO reflects S&P's expectation that the cost-reduction initiatives the company implemented in response to the weakness in some of its industrial and construction end markets and the headwinds from a stronger dollar will partially offset the declines in its organic revenue in 2015. S&P believes that the company will use most of its free cash flow to fund acquisitions and return cash to its shareholders while still maintaining credit measures that support S&P's rating. S&P's ratings on WESCO reflect S&P's "satisfactory" assessment of its business risk profile and its "significant" assessment of its financial risk profile. S&P has revised its financial policy modifier on the company to "negative" from "neutral" because it now believes that the company's financial risk profile could deteriorate beyond its forecast because of opportunistic acquisitions, such as occurred when WESCO acquired EECOL in 2012. S&P believes that its 'bb' anchor on WESCO (modified by the financial policy assessment) captures the overall credit characteristics of the company. S&P has therefore revised its comparable rating analysis modifier on WESCO to "neutral" from "negative". WESCO is one of the top five electrical distributors in the U.S., and it serves customers across the construction, industrial, governmental, and utility markets. The electrical distribution market is highly fragmented, which can lead to intense pricing pressures, particularly during periods of weak demand. Demand for the company's products is fueled by the increasing use of electrical parts across industries and the trend among industrial manufacturers to outsource their noncore activities such as purchasing and inventory management in an effort to reduce their operating expenses. S&P expects that the company's expanding geographic reach, broad product offerings and service capabilities, efficient logistics network, and fair degree of end-market and customer diversity will continue to support its competitive position. These factors also help WESCO obtain global accounts with major industrial manufacturers and allow it to leverage its cost structure. S&P anticipates that acquisitions will remain an important part of WESCO's growth strategy going forward. The company's publicly stated long-term leverage target of a debt-to-EBITDA metric in the 2.0x-3.5x range equates approximately to a debt-to-EBITDA metric of 2.5x-4.0x after S&P's adjustments. However, S&P's ratings incorporate the possibility that the company could increase its debt-to-EBITDA metric above 4x as it pursues growth through acquisitions or returns cash to its shareholders. S&P's base-case scenario includes these assumptions: -- A low-single-digit percent decline in organic revenue in 2015 due to weakness in industrial and construction end markets and headwinds from a stronger dollar, which are partially offset by the positive trends in the company's utility business and the modest inorganic growth from its recent acquisitions; -- EBITDA margins of about 6%-7% given the company's recent volume declines, which are partially offset by WESCO's ongoing cost-reduction activities; -- Capital expenditures will continue to be less than 1% of revenues annually; -- Free operating cash flow of more than $200 million annually; and -- The company uses the bulk of its free cash flow to fund shareholder-friendly activities and acquisitions. Based on these assumptions, S&P arrives at these credit measures: -- Debt to EBITDA of about 3.4x; and -- Funds from operations (FFO) to debt of nearly 20% over the next 12-18 months. S&P assesses WESCO's liquidity as "adequate." S&P expects the company's liquidity sources to be at least 1.2x its uses or more, and believes that the company's net sources will remain positive even if its EBITDA drops by 15% from S&P's projected levels. Principal liquidity sources: -- Cash balances of about $174 million as of June 30, 2015; -- Ample availability under its $600 million revolving credit facility; and -- S&P's expectation for annual FFO of about $300 million. Principal liquidity uses: -- Scheduled annual debt amortization of about $1.1 million; -- Modest working capital outflows; -- Capital expenditures of approximately $25 million; and -- Acquisitions and share repurchases of about $300 million annually. S&P's stable outlook on WESCO reflects S&P's expectations that the company will benefit from the positive trends in its utility business, but that this will be offset by weakness in WESCO's industrial and construction end markets and headwinds from a stronger dollar. S&P also assumes the company's recent cost-reduction initiatives implemented in response to the weak operating environment will partially offset the declines in its organic revenue in 2015. S&P could lower its rating on WESCO if its deteriorating operating performance causes its leverage to exceed 5x with limited prospects for improvement. S&P could also lower the rating if WESCO's leverage following future acquisitions exceeds 5x and does not quickly improve, either because of a challenging operating environment or because the acquisitions stretched the company's credit measures beyond S&P's expectations. S&P believes that an upgrade is unlikely over the next two years since WESCO's acquisition growth strategy and leverage tolerance are constraining factors. Over the long-term, however, S&P could raise its rating on WESCO if it chooses to pursue more conservative financial policies that S&P expects will help it maintain its leverage below 4x as it pursues acquisitions. WOLVERINE WORLD: S&P Hikes Corp. Credit Rating to 'BB+' ------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Rockford, Mich.-based Wolverine World Wide Inc. to 'BB+' from 'BB'. The outlook is stable. At the same time, S&P raised its issue-level rating on the company's first-lien credit facilities to 'BBB' from 'BBB-', and its issue-level rating on the unsecured notes to 'BB+' from 'BB'. The recovery rating on the first-lien facilities is unchanged at '1', indicating S&P's expectation of very high (90% to 100%) recovery in the event of payment default, while the recovery rating on the unsecured notes is unchanged at '3', indicating S&P's expectation of meaningful (50% to 70%, at the lower half of the range) recovery in the event of payment default. "The ratings reflect Wolverine's improving credit metrics and our expectation that that the company will continue to improve operational efficiency to drive further modest EBITDA growth," said Standard & Poor's credit analyst Peter Deluca. Standard & Poor's forecasts Wolverine's debt-to-EBITDA will approach the mid-2x area by year-end 2015 and the near-2x area in 2016, from the level of 2.6x as of June 30, 2015. S&P also expects funds from operations (FFO)-to-debt to improve from about 27% during 2015 to about 33% in 2016. S&P believes credit metrics will reach these levels as the company grows the top line across its business units and streamlines operations. This expectation is based on these key outcomes of its forecast: -- U.S. real annual global GDP growth of 2.3% in 2015 and 2.7% in 2016, and Asia-Pacific and Latin America average annual growth of 2.2% in 2015 and 2.6% in 2016. -- S&P expects revenue to grow about 3.5% in 2015 and 4.5% in 2016, reflecting planned focus on international markets and direct-to-consumer distribution. -- EBITDA margin of about 13% during the next two years from revenue growth and improving expense management. -- FFO of about $250 million in 2015 and 2016. -- Capital spending of about $60 million per year. The ratings also reflect S&P's view of Wolverine's participation in fragmented and highly competitive business segments, and narrow business focus, as well as its leading market position and diversified client base. Wolverine's Sperry, Wolverine, and Merrell brands have leading positions in the highly competitive footwear industry and benefit from strong brand recognition. The company, however, lacks geographic diversity, leaving the company vulnerable to changes in industry conditions, the supply chain, and the local economy. S&P has also factored into its rating the company's solid profitability and strong marketing and sales effort. The stable outlook reflects S&P's view that Wolverine's operating performance will stabilize near current levels, with credit metrics modestly improving and remaining in line with S&P's current financial risk profile assessment. S&P forecasts leverage will decline to near 2x during the next year. ********* 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. 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