/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/160127.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 27, 2016, Vol. 20, No. 27 Headlines 5 STAR INVESTMENT: Case Summary & 20 Largest Unsecured Creditors AC I INV: Court Dismisses Ch. 11 Cases of 2 Units AMERICAN APPAREL: Judge Confirms Amended Chapter 11 Plan ANTERO ENERGY: Voluntary Chapter 11 Case Summary ARCHROCK PARTNERS: S&P Lowers CCR to 'B', Outlook Negative ATI ENTERPRISES: Williams & Connolly, Duane Morris Sued Over Bills ATLANTIC CITY: Has No Easy Route to Bankruptcy Despite Talk ATLAS RESOURCE: S&P Revises Outlook to Neg. & Affirms 'B-' CCR BOOMERANG TUBE: Hearing to Confirm 2nd Amended Plan Today BOOMERANG TUBE: SBBT Has Limited Objection to 2nd Amended Plan BOOMERANG TUBE: UST Questions Fee Provision in 2nd Amended Plan BOOZ ALLEN: S&P Affirms 'BB' Corp. Credit Rating, Outlook Stable BOULDER BRANDS: S&P's B CCR Removed From Watch Pos. Then Withdrawn BRITISH AMERICAN: Court Proposes Judgment vs. Duprey, Branker BTB CORP: Caribbean Sign Supply Working on Deal With Debtor BTB CORP: UST Says Disclosures Lack Adequate Information BUILDING MATERIALS: Moody's Puts Ba2 CFR on Review for Downgrade CALLITA IRREVOCABLE: Case Summary & Largest Unsecured Creditor CALPIAN INC: Liggett Vogt & Webb Raises Going Concern Doubt CENTRAL SECURITY: S&P Affirms 'B-' Rating on 1st-Lien Term Loan CHARLOTTE RUSSE: Moody's Cuts CFR to B3 & Changes Outlook to Neg. CHESAPEAKE ENERGY: S&P Lowers CCR to 'CCC+', Outlook Negative FAIRFIELD SENTRY: Court Disapproves Sale of Madoff Claim to Farnum FUHU INC: Mattel Beats Greg Norman With $21.5M Bid for Assets GFL ENVIRONMENTAL: Moody's Affirms B2 CFR, Outlook Stable GFL ENVIRONMENTAL: S&P Affirms 'B' CCR, Outlook Stable GOLD RIVER: Levene Neale Pulls Out Bid to Withdraw as Counsel GREAT LAKES COMNET: Case Summary & 20 Top Unsecured Creditors GREAT LAKES COMNET: Files for Ch 11; May Sell Assets to Everstream HAVERHILL CHEMICALS: Judge Approves Deal to Settle DEB Claim HORSEHEAD HOLDING: Idles North Carolina Zinc Facility HORSEHEAD HOLDING: Moody's Lowers CFR to Ca, Outlook Negative ILYA IGDALEV: Justices Urged to Ax Award Over Settlement Clawback LAMAR MEDIA: Moody's Assigns Ba1 Rating on New $400MM Sr. Notes LEHMAN BROTHERS: Judge Pans Trade's Bid to Weigh in on Swap Suit LES GRANDS TRAVAUX: Claims Bar Date Set for March 18 LYONDELL CHEMICAL: Court Denies Currier's Bid to Dismiss Suit MAGNA ENTERTAINMENT: 2010 $13.8MM Racetrack Valuation Affirmed MILAGRO OIL: Judge Sustains Objection to Royalty Claims MILLENNIUM LAB: Judge Certifies Direct Appeal of Plan Approval MILLENNIUM LAB: Prepack Plan Declared Effective on Dec. 18 MILLER ENERGY: Court Has Until June 30 to Decide on Bankr. Plan MOSLEY MOTEL: Case Summary & 8 Largest Unsecured Creditors NEW GULF RESOURCES: Major Creditors Object to Disclosure Statement NEW GULF RESOURCES: Unsecureds to Receive $500K Under Plan NUO THERAPEUTICS: Case Summary & 20 Largest Unsecured Creditors PITTSBURGH CORNING: Pahigian, et al., to Head Asbestos Trust RELATIVITY MEDIA: Court Approves FTI Fee; Hurdles Remain in Ch. 11 REX ENERGY: Moody's Lowers CFR to Caa3, Outlook Negative ROLLAGUARD SECURITY: Jeweler Arrested in $12M Investor Row SAEED COHEN: Preliminary Injunction Order Vacated SAMUEL E. WYLY: Judge Says Tax Fraud Trial Prone to Permit Opinion SAN BERNARDINO, CA: Court Junks Firefighters' 5th Appeal SIMPLY FASHION: Resolves Claims of Middlegate Factors TIMOTHY BELNAP: Cal. App. Grants Partner's Bid to Junk Appeal ULTIMATE NUTRITION: Gets Approval to Hire Arnold & Porter USA CAPITAL MANAGEMENT: Raises Going Concern Doubt Amid Net Loss VALLEY FORGE: Thompson Coburn Wants Negligence Claims Dropped VERSO CORPORATION: Case Summary & 30 Largest Unsecured Creditors VERSO PAPER: Moody's Lowers CFR to Ca, Outlook Negative XINERGY LTD: Court OKs Additional $1.5M DIP Financing [*] Credit Metrics of Proppant Cos. to Decline in 2016, Moody's Say [*] ERISA Ruling Shields Hospitals From "Overpayment Bankruptcies" [*] Kirkland & Ellis Named BLaw360's Bankruptcy Group of the Year [*] NJ Man Gets 30 Years, $14 Million Fine in Scarfo-Led Scheme ********* 5 STAR INVESTMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- 5 Star Investment Group, LLC 16-30078 3131 Grape Road Mishawaka, IN 46545 5 Star Portland Holdings, LLC 16-30079 5 Star Investment Group V, LLC 16-30080 5 Star Commercial, LLC 16-30081 5 Star Investment Group VII, LLC 16-30082 5 Star Holdings, LLC 16-30083 5 Star Investment Group III, LLC 16-30084 5 Star Indiana Holdings, LLC 16-30085 5 Star Investment Group II, LLC 16-30086 5 Star Investment Group IV, LLC 16-30087 5 Star Capital Fund, LLC 16-30088 Chapter 11 Petition Date: January 25, 2016 Court: United States Bankruptcy Court Northern District of Indiana (South Bend Division) Judge: Hon. Harry C. Dees, Jr. Debtor's Counsel: Katherine C. O'Malley, Esq. COZEN O'CONNOR 123 North Wacker Drive, Suite 1800 Chicago, IL 60606-1770 Tel: 312-382-3100 Fax: 312-382-8910 Email: komalley@cozen.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Earl Miller, authorized representative. A list of 5 Star Investment Group's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/innb16-30078.pdf AC I INV: Court Dismisses Ch. 11 Cases of 2 Units ------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized AC I Inv Manahawkin LLC to disburse on behalf of AC I Manahawkin Mezz LLC its unencumbered available cash to holders of allowed postpetition administrative expense claims and the balance, subject to certain reserves, to RCG LV Debt IV Non-REIT Assets Holdings, LLC, Mezz's sole creditor; and following the distributions, dismissing the Mezz and AC I Inv Manahawkin LLC Chapter 11 cases. The Court also ordered that LLC will make additional payments to RCG consisting of any: (i) released funds from the Holdback Escrow, (ii) APA Recovery and (iii) excess amounts remaining from the reserves, as and when any such amounts becomes available for distribution; and it is further ordered, that the foregoing payments to RCG will constitute distribution from the Mezz bankruptcy estate and will be final and irrevocable and not subject to reduction, setoff, recoupment, holdback, stay, avoidance, disgorgement, repayment, discount or recharacterization of any kind. Further, the Court ordered that Mezz will not be dissolved prior to Jan. 1, 2017; provided, that nothing in the order will constitute Court approval or authorization of any dissolution of Mezz. About AC I Inv Manahawkin AC I Inv Manahawkin LLC, AC I Manahawkin Mezz LLC and AC I Manahawkin LLC filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Case Nos. 14-22791, 14-22792 and 14-22793) on June 4, 2014. The petitions were signed by David Goldwasser, of GC Realty Advisors LLC, managing member. The Debtors estimated assets of $50 million to $100 million and debts of $0 to $50 million. Robinson Brog Leinwand Greene Genovese & Gluck, P.C., serves as the Debtors' counsel. Judge Robert D. Drain presides over the cases. Affiliates of AC I Inv., et al., have pending bankruptcy cases before Judge Drain. NY Affordable Housing Albany Assocs. LLC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 13-20007) on July 26, 2013. First Bronx LLC sought bankruptcy protection (Bankr. S.D.N.Y. Case NO. 14-22047) on Jan. 13, 2014. Ollie Allen Holding Company LLC sought bankruptcy (Case NO. 14-22204) on Feb. 18, 2014. U.S. Trustee was unable to form an official unsecured creditors' committee. AMERICAN APPAREL: Judge Confirms Amended Chapter 11 Plan -------------------------------------------------------- American Apparel, Inc., submitted final proposed Findings of Fact, Conclusions of Law and Order Confirming its Amended Plan after the bankruptcy judge agreed to confirm the Plan following a two-day hearing that ended Jan. 25, 2016. On Oct. 5, 2015, the Debtors filed their Joint Plan of Reorganization, which contemplates converting more than $200 million of senior notes into equity interests of the reorganized American Apparel. On Nov. 20, 2015, the Court approved the Disclosure Statement and set a Jan. 7, 2016 voting deadline and a Jan. 20 plan confirmation hearing. As a result of the good-faith efforts of the Debtors, the Creditors Committee and the Committee of Lead Lenders, these discussions culminated in a fully consensual plan, containing material improvements to the recoveries of holders of general unsecured claims as compared to the Original Plan. On Jan. 14, 2016, the Debtors filed their First Amended Joint Plan of Reorganization. On Jan. 15, 19 and 24, Debtors submitted proposed Findings of Fact, Conclusions of Law and Order Confirming the Plan. On Jan. 25, 2016, the Court held a telephonic hearing, granting confirmation of the First Amended Plan, provided certain revisions were made to the First Amended Plan and the Third Proposed Confirmation Order. Copies of the final proposed Findings of Fact, Conclusions of Law and Order Confirming the Amended Plan, and the black-lined copy of the First Amended Plan, showing changes made from the First Amended Plan filed on Jan. 14, 2016, are available for free at: http://bankrupt.com/misc/Amer_App_678_Cert_Plan_Ord.pdf Terms of Amended Plan Following negotiations with the Committee of Lead Lenders and the Creditors' Committee, the Debtors reached terms of a fully consensual plan. The Plan, as amended, now contemplates: * An increase in GUC Support Payment. The Committee of Lead Lenders agreed to fund a 150% increase in the GUC Support Payment to $2.5 million, and Holders of Prepetition Notes will not receive any cash distributions on account of their $143 million deficiency claims; * An increase in Litigation Trust Funding: The Committee of Lead Lenders agreed to double funding available to the Litigation Trust, from $250,000 to $500,000, and further agreed to permit 75% of the first $2.5 million in proceeds that the Litigation Trust generates to be distributed to Holders of General Unsecured Claims other than the holders of the noteholders' deficiency claim; * An increase in Committed Exit Financing: The Plan now provides that as of the Effective Date the Debtors will have $80 million of exit capital; and * The allowance of PIK Interest: The Committee of Lead Lenders has agreed to relax the terms of the credit agreement governing the New Exit Term Loan to permit the Debtors to elect to PIK Interest instead of in cash interest payments in the event that the Debtors' total cash falls below certain thresholds. Consistent with the RSA, the Amended Plan reduces the Debtors' funded debt obligations by converting approximately $229 million of prepetition note secured claims (Class 3) into 100% of Reorganized American Apparel equity interests. The Amended Plan treats other classes as follows: * Holders of priority claims (Class 1) and other secured claims (Class 2) will be reinstated or paid in full in cash. * Holders of Allowed general unsecured claims (Class 4) will receive with their pro rata share of units in a litigation trust and a portion of a $2.5 million cash payment, regardless of whether any class of such creditors accepts or rejects the Amended Plan. * Holders of UK guaranty claims (Class 5) will be reinstated. * Holders of Section 510 claims (Class 6) and APP interests (Class 8) will be extinguished, cancelled and discharged. * Holders of Intercompany Claims (Class 7) and subsidiary debtor equity interests (Class 9) may be compromised by distribution, contribution, or otherwise, or reinstated. Craig E. Johnson of Garden City Group certified that voting creditors -- holders of prepetition note secured claims in Class 3 (i.e., 84.85% in number and 99.99% in amount) and general unsecured creditors in Class 4 (i.e., 57.89% to 85.29% in number and 98.70% to 99.99% in amount) -- voted to accept the Plan. A copy of the Debtors' memorandum in support of confirmation of the Plan is available for free at: http://bankrupt.com/misc/Amer_App_599_Brief_Plan_Conf.pdf A copy of the Debtors' 6th notice of the filing of a plan supplement is available for free at: http://bankrupt.com/misc/Amer_App_496_6th_Plan_Supplement.pdf Objection to Plan Only one material objection -- from the Company's former CEO Dov Charney -- was submitted urging the Bankruptcy Court to deny confirmation. Mr. Charney said he possesses the ability to deliver a potential transaction at some unspecified time in the future that may be superior to the present Plan. To support his premise, Mr. Charney referenced a nonbinding offer letter dated January 10 submitted to the Debtors by Hagan Capital Group and Silver Creek Capital Partners that Mr. Charney purportedly facilitated. That January 10 Letter proposes potential terms for some alternative plan structure that may or may not be negotiated at some later date. "The Alternative Proposal will provide meaningful increases in cash and liquidity at emergence (through an increased exit loan facility loan size and availability, and increased working capital for reorganized American Apparel), as well as increased recoveries to unsecured creditors, while providing reduced debt leverage, and providing a debt payout to secured noteholders instead of equity," Mr. Charney said in a filing. The Committee of Lead Lenders and the Debtors, however, argued that the alternative transaction proposed by Mr. Charney is inferior to the Plan. "Mr. Charney has failed to demonstrate that the Alternative Transaction is superior to the Plan for anyone other than Mr. Charney and his co-investors. In that regard, Mr. Charney is not appearing as a true party in interest but instead as a disappointed losing bidder. The Debtors, UCC, and the Committee of Lead Lenders—the major parties in interest in these cases—each evaluated the Alternative Transaction and each determined that such transaction is inferior to the Plan and not worthy of pursuit," the Committee of Lead Lenders said in a filing. A second objection was filed by the U.S. Trustee. The U.S. Trustee claimed that the exculpation provisions in the Plan are overbroad. Committee Backs Amended Plan According to the Official Committee of Unsecured Creditors, as a result of extensive, good-faith and arm's length negotiations by and among the Committee, the Debtors and the Bondholders, the parties have agreed to the terms of a consensual Amended Plan. The Committee believes that all of the modifications set forth in the Amended Plan comply with the Bankruptcy Code and are in the best interest of general unsecured creditors. Importantly, the Committee avers that the Amended Plan permits the Debtors to swiftly emerge from Chapter 11 as a well-capitalized, substantially de-levered and viable business enterprise with sufficient liquidity, which is of critical importance to the Debtors' existing vendors, landlords and other service providers. The Committee relates that the enhancements set forth in the Amended Plan are substantial. For example, the Amended Plan, among other things: (a) enhances recoveries for Holders of Allowed General Unsecured Claims by approximately 30 times (the estimated recovery under the Amended Plan is approximately 6%, which is a substantial improvement from the "0.00%" and "0.31%" recoveries set forth in Original Plan); (b) provides the Reorganized Debtors with a further commitment of $40 million of exit capital from a third party lender or the Committee of Lead Lenders; (c) modifies the Debtors' exit financing agreements so as to afford the Reorganized Debtors greater flexibility in implementing their turnaround strategy; (d) increases the initial "seed funding" for the Litigation Trust from $250,000 to $500,000; (e) proposes a fair and equitable split of proceeds generated from the Litigation Trust by and among Holders of Allowed General Unsecured Claims and Holders of Prepetition Deficiency Claims; and (f) permits the Litigation Trustee to monitor the claims reconciliation, objection, estimation and settlement process conducted by the Reorganized Debtors (in addition to investigating, prosecuting and settling the Specified Causes of Action). Although it supports the Amended Plan, the Committee did file a document objecting to Standard General's inclusion among the definition of "released parties" under the Plan. The Committee noted that after many months of litigation involving certain of the Debtors' prepetition investors and stakeholders -- namely Standard General (which has cost the Debtors millions of dollars) -- the Debtors now seek to release Standard General from any and all claims by way of the Amended Plan for no consideration or substantial contribution in exchange thereof. However, according to the Committee, there can be no showing in these chapter 11 cases that the releases in favor of Standard General satisfy the applicable Third Circuit standards. In response, Standard General pointed out that like the other supporting parties under the RSA – and contrary to the Committee's description – Standard General committed to provide critically needed financing before, during and after this bankruptcy case, has waived cash distributions with respect to its bondholder deficiency claim, has accepted a reduced recovery on certain of its claims and has provided critical leadership and support throughout this restructuring process. Accordingly, Standard General said that the Committee's limited objection should be overruled. The Debtors' attorneys: Laura Davis Jones, Esq. James E. O'Neill, Esq. Joseph M. Mulvihill, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 N. Market Street, 17th Floor Wilmington, DE 19801 Tel: 302 652-4100 Fax: 302-652-4400 E-mail: ljones@pszjlaw.com joneill@pszjlaw.com jmulvihill @pszj law. Com - and - Richard L. Wynne, Esq. Erin N. Brady, Esq. JONES DAY 555 South Flower Street, 50th Floor Los Angeles, CA 90071 Tel: (213) 489-3939 Fax: (213) 243-2539 E-mail: rlwynne@jonesday.com enbrady@jonesday.com - and - Scott J. Greenberg, Esq. Michael J. Cohen, Esq. 222 East 41st Street New York, NY 10017 Tel: (212) 326-3939 Fax: (212) 755-7306 E-mail: sgreenberg@jonesday.com mcohen@jonesday.com Co-Counsel for the Official Committee of Unsecured Creditors: KLEHR HARRISON HARVEY BRANZBURG LLP Domenic E. Pacitti, Esq. Richard M. Beck, Esq. 919 Market Street, Suite 1000 Wilmington, Delaware 19801-3062 Telephone: (302) 426-1189 Facsimile: (302) 426-9193 E-mail: dpacitti@klehr.com rbeck@klehr.com - and - KILPATRICK TOWNSEND & STOCKTON LLP David M. Posner, Esq. Gianfranco Finizio, Esq. The Grace Building 1114 Avenue of the Americas New York, New York 10036-7703 Telephone: (212) 775-8764 Facsimile: (212) 658-9523 E-mail: dposner@kilpatricktownsend.com gfinizio@kilpatricktownsend.com - and - Todd C. Meyers, Esq. Paul Rosenblatt, Esq. 1100 Peachtree Street NE, Suite 2800 Atlanta, Georgia 30309-4528 Telephone: (404) 815-6482 Facsimile: (404) 541-3307 E-mail: tmeyers@kilpatricktownsend.com paulrosenblatt@kilpatricktownsend.com Counsel to Standard General: YOUNG CONAWAY STARGATT & TAYLOR, LLP Edmon L. Morton Joseph M. Barry Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: emorton@ycst.com jbarry@ycst.com - and - DEBEVOISE & PLIMPTON LLP M. Natasha Labovitz, Esq. Shannon Rose Selden, Esq. David Sarratt, Esq. 919 Third Avenue New York, New York 10022 Phone: (212) 909-6000 Facsimile: (212) 909-6836 Counsel for the Committee of Lead Lenders: FOX ROTHSCHILD LLP Jeffrey M. Schlerf, Esq. L. John Bird, Esq. 919 North Market Street, Suite 300 Wilmington, Delaware 19801 Telephone: (302) 654-7444 Facsimile: (302) 656-8920 E-mail: jschlerf@foxrothschild.com lbird@foxrothschild.com - and - MILBANK, TWEED, HADLEY & McCLOY LLP Gerard Uzzi, Esq. David S. Cohen, Esq. Bradley Scott Friedman, Esq. 28 Liberty Street New York, NY 10005 Telephone: (212) 530-5000 Facsimile: (212) 822-5846 E-mail: guzzi@milbank.com dcohen2@milbank.com bfriedman@milbank.com Counsel for Dov Charney: WOMBLE CARLYLE SANDRIDGE & RICE, LLP Steven K. Kortanek, Esq. 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330 E-mail: skortanek@wcsr.com - and - Dean W. Ferguson, Esq. LAW OFFICES OF DEAN W. FERGUSON 3926 Wildwood Valley Court Kingwood, TX 77345 Telephone: (713) 834-2399 E-mail: dean@dwferglaw.com About American Apparel American Apparel, Inc., American Apparel (USA), LLC, American Apparel Retail, Inc., American Apparel Dyeing & Finishing, Inc., KCL Knitting, LLC and Fresh Air Freight, Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Proposed Lead Case No. 15-12055) on Oct. 5, 2015. The petition was signed by Hassan Natha as chief financial officer. The Debtors reported total assets of $199,360,934 and total liabilities of $397,576,744. The Debtors and their non-debtor affiliates operate a vertically integrated manufacturing, distribution, and retail business focused on branded fashion-basic apparel, employing approximately 8,500 employees across six manufacturing facilities and approximately 230 retail stores in the United States and 17 other countries worldwide. The Debtors have engaged Jones Day as restructuring counsel, Pachulski Stang Ziehl & Jones LLP as local counsel, Moelis & Company as investment banker, FTI Consulting, Inc. as financial advisor, DJM Real Estate as real estate consultant and Garden City Group, LLC as claims and noticing agent. ANTERO ENERGY: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Antero Energy Partners, LLC 8401 N. Central Expressway, Suite 840 Dallas, TX 75225 Case No.: 16-30308 Chapter 11 Petition Date: January 25, 2016 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Stacey G. Jernigan Debtor's Counsel: Keith William Harvey, Esq. THE HARVEY LAW FIRM, P.C. 6510 Abrams Road, Suite 280 Dallas, TX 75231 Tel: (972) 243-3960 Fax: (214) 241-3970 Email: harvey@keithharveylaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by Robert A. Imel, managing member. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. ARCHROCK PARTNERS: S&P Lowers CCR to 'B', Outlook Negative ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Archrock Partners L.P. to 'B' from 'B+'. The outlook is negative. S&P also lowered the issue-level rating on the $350 million senior unsecured notes due 2021 and $350 million senior unsecured notes due 2022 to 'B-' from 'B'. The recovery rating on this debt remains '5', indicating that lenders can expect modest (10% to 30%; upper half of the range) recovery of principal if a payment default occurs. At the same time, S&P lowered the issue-level rating on the company's senior secured revolving credit facility and term loan to 'BB-' from 'BB'. The recovery rating on this debt remains '1', indicating expectations for very high (90% to 100%) recovery. "The rating actions reflect our expectation of continued weakness in natural gas prices through at least the end of 2016, which could result in reduced natural gas production," said Standard & Poor's credit analyst Geoffrey Mrema. In this environment, S&P expects that producers may attempt to negotiate lower prices for services, like compression, and that overall demand for compression services may suffer. While Archrock benefits from a fair degree of revenue visibility and relatively stable cash flows because almost 100% of revenue is fee-based and driven by natural gas consumption and production (not exploration), the compression business is still exposed to the inherent cyclicality of commodity prices and spending levels of the oil and gas exploration and production industry. Archrock's operating cash flows are potentially vulnerable due to its relatively short average contract life combined with low commodity prices, which has curbed demand for compression services. As an master limited partnership (MLP), Archrock faces additional challenges because depressed unit prices and difficult credit markets will make it hard for Archrock to fund external capital in a balanced manner to fund distributions and capital expenditures. The negative outlook reflects S&P's expectation of decreasing demand for compression services and equipment caused by low oil and natural gas prices. If prices remain at current trough levels, S&P may need to revise downward its cash flow forecasts. S&P could lower the rating if credit measures weaken such that adjusted debt to EBITDA exceeded 6x for an extended period. This could occur if demand for compression services weakens due to a prolonged period of materially weaker natural gas prices, resulting in decreased production and an oversupply of compression capacity. In the current commodity price environment, it is unlikely that S&P would raise ratings. However, if the partnership sharply reduced its debt, such that S&P expected debt to EBITDA to remain below 4.5x, it could raise ratings. ATI ENTERPRISES: Williams & Connolly, Duane Morris Sued Over Bills ------------------------------------------------------------------ Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review, reported that two law firms -- Williams & Connolly LLP and Duane Morris LLP -- face a demand to return the allegedly "unreasonable" legal fees they collected while unsuccessfully representing a bankrupt for-profit education company in arbitration. According to the report, bankruptcy trustee Jeoffrey L. Burtch, who is overseeing the liquidation of ATI Enterprises Inc., sued the law firms in a Texas court seeking to recoup the fees, plus damages, court papers show. The law firms represented ATI in arbitration with former students who had sued the chain of vocational schools. The case is In re ATI Enterprises Inc., 14-bk-10106, U.S. Bankruptcy Court, District of Delaware (Wilmington). ATLANTIC CITY: Has No Easy Route to Bankruptcy Despite Talk ----------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reported that Atlantic City threatened bankruptcy this week when New Jersey Gov. Chris Christie refused to sign legislation to help calm its turbulent finances, but the municipality doesn't have a clear path to a Chapter 9 proceeding and might be unable to outflank the state's push for deeper budget fixes, experts said. Atlantic City Mayor Don Guardian said on Jan. 19, 2016, that bankruptcy is "back on the table" shortly after the governor rejected a package of bills to help the city. ATLAS RESOURCE: S&P Revises Outlook to Neg. & Affirms 'B-' CCR -------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Atlas Resources Partners L.P. to negative from stable and affirmed its 'B-' corporate credit rating on the company. S&P also affirmed its 'CCC' issue-level rating, with a '6' recovery rating, on the company's senior unsecured notes. The '6' recovery rating reflects the expectation of negligible (0%-10%) in the event of a default. "The outlook revision follows our assessment that Atlas' liquidity could deteriorate over the next year," said Standard & Poor's credit analyst Aaron McLean. "With a semiannual borrowing base redetermination scheduled for the spring, the partnership could face a substantial cut to its reserve-based lending facility as commodity prices continue to weaken," he added. Under such a scenario, the partnership could have limited access to capital markets due to the downturn in the oil and naturel gas industry, and be unwilling or unable to issue equity at current unit prices leading to less-than-adequate liquidity. S&P's assessment of Atlas' vulnerable business risk incorporates its small, predominantly natural gas reserve and production base and reliance on acquisitions to replace and increase reserves. The ratings also reflect the oil and gas industry's volatility and capital-intensive nature mitigated somewhat by the relatively low operating risk related to Atlas' onshore operating areas in the U.S., a significant hedge book over the next few years that should help offset natural gas and oil price volatility, and a willingness to use equity to fund acquisitions. S&P views Atlas' financial risk as highly leveraged, driven mainly by its moderately high financial leverage measures and its MLP business model. S&P views Atlas' liquidity as adequate. The negative outlook reflects S&P's expectations that there could be a further cut in the partnership's reserve-based lending facility in the spring, which could lead to less-than-adequate liquidity. It also reflects the possibility, in S&P's opinion, that Atlas could enter into debt exchanges that S&P could view as distressed transactions given its current capital structure and the current market value of its unsecured notes. S&P could lower the rating on the partnership if it assess liquidity as less than adequate due to increased spending or higher-than-anticipated operating costs or the partnership experiences a decline in its borrowing base. S&P could also lower the rating if it believes leverage to be unsustainable with FFO to debt well below 12%. S&P could consider revising the outlook if the company is able to maintain sufficient liquidity and debt ratios stabilize such that FFO to debt is about 12% and debt to EBITDA is below 6x. BOOMERANG TUBE: Hearing to Confirm 2nd Amended Plan Today --------------------------------------------------------- Boomerang Tube, LLC, et al., filed with the Bankruptcy Court a Plan Supplement for their Second Amended Joint Chapter 11 Plan. The Plan Supplement contains these documents: Exhibit Plan Supplement Document ------- ------------------------ 1 Exit ABL Facility Loan Agreement 2 Exit Intercreditor Agreement 3 Exit Term Facility Loan Agreement 4 Financial Projections Supplement 5 Contracts to be Assumed under Sec. 5.1 of the Plan 6 New Holdco Bylaws 7 New Holdco Certificate of Incorporation 8 New Holdco Shareholders Agreement 9 New Opco Certificate of Formation 10 New Opco LLC Agreement 11 Nonexclusive list of retained Causes of Actions 12 Class 5 Note – SBI 13 Class 5 Note – SBI Lender 14 Sec. 1129(a)(5) Disclosure of Directors and Officers 15 Subordinated Notes Agreement 16 Subordinated Notes Intercreditor Agreement 17 Amended & Restated Cert. of Inc. of BT Financing, Inc. 18 Amended and Restated By-Laws of BT Financing, Inc. 19 Amended and Restated LLC Agreement of BTCSP, LLC 20 Amendment to Certificate of Formation of BTCSP, LLC 21 Duties of Ombudsman The hearing to consider confirmation of the Second Amended Plan is slated for Jan. 27, 2016, at 10:30 a.m. Copies of the documents are available free of charge at: http://bankrupt.com/misc/Boomerang_T_816_Plan_Suppl.pdf http://bankrupt.com/misc/Boomerang_T_816_Plan_Suppl_B.pdf 2nd Amended Plan As reported in the Jan. 4, 2016 edition of the TCR, Boomerang Tube, LLC, et al., filed a Second Amended Joint Chapter 11 Plan a month after Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware denied confirmation of the Amended Joint Prearranged Chapter 11 Plan. After several months of discussions with their key stakeholders, the Debtors entered into the Plan Support Agreement with the ABL Facility Lenders, the Term Loan Lenders, and the Sponsor, which contemplated that the Debtors would pursue a restructuring of the Debtors pursuant to a chapter 11 plan of reorganization, initially dated as of June 30, 2015 and subsequently amended on August 10, August 13, and September 4, 2015. The Prior Plan was premised on a total enterprise value of the Reorganized Debtors that rendered the holders of Term Loan Facility Claims substantially under-secured. As a result, the Prior Plan provided that holders of Term Loan Facility Claims would receive 100% of the equity in the Reorganized Debtors, and that recoveries to holders of General Unsecured Claims would be limited to the proceeds of certain unencumbered assets, including chapter 5 causes of action that were not released under the Prior Plan. In connection with the Debtors' request to confirm the Prior Plan, the Bankruptcy Court found that the evidence demonstrated a range for the Reorganized Debtors' TEV that would potentially allow holders of General Unsecured Creditors to share in the value of the Reorganized Debtors. As a result, the Bankruptcy Court denied confirmation of the Prior Plan. Thereafter, the Debtors, the Official Committee of Unsecured Creditors, the Term Loan Agent, and certain holders of Term Loan Facility Claims engaged in extensive negotiations regarding the terms of a revised chapter 11 plan that would account for the Bankruptcy Court's valuation ruling. As a result of those negotiations, the parties agreed to the terms contained in the term sheet for the Plan. These agreed upon terms will result in holders of Allowed General Unsecured Claims receiving value on account of their claims in the form of their pro rata share of the $2.25 million Cash GUC Consideration. In consideration of the revised treatment of holders of General Unsecured Claims under the Plan, the Creditors Committee has agreed to support the Plan and recommend that holders of General Unsecured Claims vote in favor of the Plan. The Plan also retains many of the other benefits to the Debtors and their estates that were set forth in the Prior Plan, including reducing the Debtors' funded debt obligations by converting approximately $214 million in outstanding principal of Term Loan Facility obligations into (i) 100% of the New Holdco Common Stock (subject to dilution for (x) issuances of equity under a management incentive plan not to exceed 5% of the total outstanding equity of New Holdco, and (y) by the Exit Term Facility Closing Fee) and (ii) $55 million of subordinated secured notes issued by New Opco. The Plan will be financed with the proceeds of the committed Exit Term Facility, which will be used to pay off the obligations under the DIP Term Facility, fund expenses under the Plan, and provide additional working capital to the Reorganized Debtors. The Debtors may also elect to enter into the Exit ABL Facility, which would be used to pay off the obligations under the DIP ABL Facility and provide additional working capital to the Reorganized Debtors. Holders of General Unsecured Claims are estimated to recover 4% to 6% of their total allowed claims. The Debtors propose the following schedule to govern the confirmation of the Second Amended Plan: Voting Deadline January 21, 2016 Deadline for filing objections to approval of the Disclosure Statement and/or to confirmation of the Plan January 21, 2016 Deadline for Debtors to file a reply to any Objections January 25, 2016 Requested Combined Hearing date January 27, 2016 A full-text copy of Second Amended Plan, dated Dec. 18, 2015, is available at http://bankrupt.com/misc/BOOMERANGds1218.pdf The Debtors are represented by: My Chi To, Esq. Nick S. Kaluk, III, Esq. DEBEVOISE & PLIMPTON LLP 919 Third Avenue New York, NY 10022 Tel: (212) 909-6000 Fax: (212) 909-6836 E-mail: mcto@debevoise.com nskaluk@debevoise.com - and - Robert S. Brady, Esq. Sean M. Beach, Esq. Ryan M. Bartley, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: rbrady@ycst.com sbeach@ycst.com rbartley@ycst.com 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 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: SBBT Has Limited Objection to 2nd Amended Plan -------------------------------------------------------------- SB Boomerang Tubular, LLC submitted a limited objection to Boomerang Tube, LLC, et al.'s Second Amended Joint Chapter 11 Plan. SBBT requests that any Confirmation Order the Court enters with respect to the Plan (i) except from the Plan Injunction any and all actions Recovery Remedies SBBT is entitled to take to properly foreclose upon and recover the SBI Heat Treat Line Collateral, (ii) requires that the Debtors and Reorganized Debtors to permit and facilitate, to the extent necessary, such Recovery Remedies, (iii) preserves the Deficiency Claim to the extent the Debtors seek by the Plan, the Confirmation Order (or any related documents) or the SBBT Treatment Notice to satisfy and discharge the Deficiency Claim by abandonment of the SBI Heat Treat Line Collateral, and (iv) grants SBBT any other relief the Court deems just and appropriate. Article 3.2(e)(2) of the Plan sets forth in detail the treatment proposed for Class 5 Claims, including the SBBT Secured Claim, upon the Effective Date of the Plan. The Debtors propose that holders of Allowed Class 5 Claims receive, at the Reorganized Debtors' election, one of several treatments under the Plan, including abandonment by the Reorganized Debtors of the SBI Heat Treat Line Collateral, or such other treatment as the Debtors or Reorganized Debtors agree with the holder of an Allowed Class 5 Claim. On Dec. 29, 2015, the Court entered the Order (A) Approving the Disclosure Statement on a Preliminary Basis, (B) Scheduling Combined Hearing on Approval of Disclosure Statement and Confirmation of Plan, (C) Establishing Procedures for Solicitation and Tabulation of Votes on Plan, and (D) Approving Related Matters. Pursuant to paragraph 36 of the Combined Hearing Order, the Debtors were required to file their election of the treatment to be provided SBBT under section 3.2(e)(2) of the Plan on or before Jan. 15, 2016. On Jan. 15, 2016, the Debtors filed the Notice of Debtors' Election With Respect to Treatment of the Class 5 Claim Held by SB Boomerang Tubular, LLC ("SBI") (the "SBBT Treatment Notice"). As set forth in the SBBT Treatment Notice, the Debtors have elected "to abandon the SBI Heat Treat Line Collateral, as provided for in Section 3.2(e)(2)(C) of the Plan, unless the Debtors and SBI agree to an alternative treatment of SBI's Class 5 Claim, as contemplated by Section 3.2(e)(2)(D) of the Plan, prior to the Effective Date." Michael J. Custer, Esq., at Pepper Hamilton LLP, relates that because the Debtors have elected to abandon the SBI Heat Treat Line Collateral upon the Effective Date, absent an agreement with SBBT prior to the Effective Date to an alternative treatment, SBBT will need to foreclose on and recover the SBI Heat Treat Line Collateral if it is ultimately abandoned. Furthermore, as this Court is aware from prior hearings, the SBI Heat Treat Line Collateral is a massive and complicated piece of equipment used to heat treat the Debtors' product, Mr. Custer points out. SBBT's recovery of the SBI Heat Treat Line Collateral will therefore require that SBBT be permitted, after the Effective Date, appropriate access to the Debtors' manufacturing facility in Texas where the SBI Heat Treat Line Collateral is located in order to properly dismantle it, remove it and transport it to a location of SBBT's choosing, Mr. Custer tells the Court. Article 8.5 of the Plan contains a broad post-Effective Date injunction (the "Plan Injunction") that applies to all Entities that have held, hold, or may hold Claims or Interests that have been released or discharged pursuant to the Plan, permanently enjoining, among other things, each of the following actions against the Debtors, the Reorganized Debtors, the Released Parties, or the Exculpated Parties: (a) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any Claims or Interests; (b) enforcing, attaching, collecting, or recovering by any manner or means any judgment, award, decree, or order against such Entities on account of or in connection with or with respect to any such Claims or Interests; … and (e) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Claims or Interests released, exculpated, or settled pursuant to the Plan. As such, according to Mr. Custer, if left unmodified, the Plan Injunction would operate to prohibit SBBT after the Effective Date from foreclosing on and recovering the SBI Heat Treat Line Collateral if it is abandoned on or prior to the Effective Date. Mr. Custer avers that if the Court confirms the Debtors' Plan, the order (the "Confirmation Order") confirming the Plan should (i) except from the Plan Injunction any and all actions SBBT is entitled to take to properly foreclose upon and recover the SBI Heat Treat Line Collateral, including, but not limited to, pursuing and obtaining any judgment required under applicable non-bankruptcy law, executing upon such judgment, and gaining appropriate access to the Debtors' manufacturing facility in Texas where the SBI Heat Treat Line Collateral is located in order to properly dismantle it, remove it and transport it to a location of SBBT's choosing -- Recovery Remedies -- and (ii) and requiring the Debtors and Reorganized Debtors to permit and facilitate, to the extent necessary, such Recovery Remedies. Without this modification to the Plan Injunction, SBBT will be inappropriately barred from taking any action to foreclose upon and recover the SBI Heat Treat Lien Collateral if it is abandoned on or prior to the Effective Date. This modification of the Plan Injunction is consistent with the Bankruptcy Code because upon abandonment, the SBI Heat Treat Line Collateral will cease to be property of the Debtors' estate and "it reverts nunc pro tunc to the debtor or whoever has the possessory right to the property when the bankruptcy petition was filed, and stands as though no bankruptcy petition was ever filed." In re NJ Affordable Homes Corp., 2007 Bankr. LEXIS 4091, at *11 (Bankr. D.N.J. Dec. 5, 2007) (quoting In re Guterl Special Steel Corp., 316 B.R. 843 (Bankr. W.D. Pa. 2004); see also In re Fields, 2006 Bankr. LEXIS 4090, at *4-5 (Bankr. D.N.J. Oct. 24, 2006) ("Because property abandoned by the trustee is no longer property of the estate, the automatic stay under [section] 362(a) terminates by operation of law."); 9A Am. Jur. 2d Bankruptcy § 1355 (2007) ("Abandonment of property of the estate results in the mere release from the estate of property previously included in the estate."). SBBT believes that the Plan and the SBBT Treatment Notice, taken together, are intended to satisfy and discharge only SBBT's Class 5 secured claim against the Debtors, and that the Debtors do not propose to satisfy any deficiency claim -- Deficiency Claim -- SBBT has by the abandonment of the SBI Heat Treat Line Collateral. SBBT reserves all rights, however, regarding its deficiency claim, and objects to the Plan to the extent it is intended or could be read to satisfy and discharge the Deficiency Claim by abandonment of the SBI Heat Treat Line Collateral. Attorneys for SB Boomerang Tubular, LLC: PEPPER HAMILTON LLP David M. Fournier, Esq. Henry J. Jaffe, Esq. Michael J. Custer, Esq. Hercules Plaza, Suite 5100 1313 N. Market Street P.O. Box 1709 Wilmington, DE 19801-1709 Telephone: (302) 777-6500 E-mail: fournierd@pepperlaw.com custerm@pepperlaw.com - and - Judith W. Ross, Esquire Eric Soderlund, Esquire Law Offices of Judith W. Ross 700 North Pearl Street, Suite 1610 Dallas, TX 75201 Telephone: 214-377-7879 E-mail: Judith.ross@judithwross.com eric.soderlund@judithwross.com 2nd Amended Plan As reported in the Jan. 4, 2016 edition of the TCR, Boomerang Tube, LLC, et al., filed a Second Amended Joint Chapter 11 Plan a month after Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware denied confirmation of an earlier Amended Joint Prearranged Chapter 11 Plan. After several months of discussions with their key stakeholders, the Debtors entered into the Plan Support Agreement with the ABL Facility Lenders, the Term Loan Lenders, and the Sponsor, which contemplated that the Debtors would pursue a restructuring of the Debtors pursuant to a chapter 11 plan of reorganization, initially dated as of June 30, 2015 and subsequently amended on August 10, August 13, and September 4, 2015. The Prior Plan was premised on a total enterprise value of the Reorganized Debtors that rendered the holders of Term Loan Facility Claims substantially under-secured. As a result, the Prior Plan provided that holders of Term Loan Facility Claims would receive 100% of the equity in the Reorganized Debtors, and that recoveries to holders of General Unsecured Claims would be limited to the proceeds of certain unencumbered assets, including chapter 5 causes of action that were not released under the Prior Plan. In connection with the Debtors' request to confirm the Prior Plan, the Bankruptcy Court found that the evidence demonstrated a range for the Reorganized Debtors' TEV that would potentially allow holders of General Unsecured Creditors to share in the value of the Reorganized Debtors. As a result, the Bankruptcy Court denied confirmation of the Prior Plan. Thereafter, the Debtors, the Official Committee of Unsecured Creditors, the Term Loan Agent, and certain holders of Term Loan Facility Claims engaged in extensive negotiations regarding the terms of a revised chapter 11 plan that would account for the Bankruptcy Court's valuation ruling. As a result of those negotiations, the parties agreed to the terms contained in the term sheet for the Plan. These agreed upon terms will result in holders of Allowed General Unsecured Claims receiving value on account of their claims in the form of their pro rata share of the $2.25 million Cash GUC Consideration. In consideration of the revised treatment of holders of General Unsecured Claims under the Plan, the Creditors Committee has agreed to support the Plan and recommend that holders of General Unsecured Claims vote in favor of the Plan. The Plan also retains many of the other benefits to the Debtors and their estates that were set forth in the Prior Plan, including reducing the Debtors' funded debt obligations by converting approximately $214 million in outstanding principal of Term Loan Facility obligations into (i) 100% of the New Holdco Common Stock (subject to dilution for (x) issuances of equity under a management incentive plan not to exceed 5% of the total outstanding equity of New Holdco, and (y) by the Exit Term Facility Closing Fee) and (ii) $55 million of subordinated secured notes issued by New Opco. The Plan will be financed with the proceeds of the committed Exit Term Facility, which will be used to pay off the obligations under the DIP Term Facility, fund expenses under the Plan, and provide additional working capital to the Reorganized Debtors. The Debtors may also elect to enter into the Exit ABL Facility, which would be used to pay off the obligations under the DIP ABL Facility and provide additional working capital to the Reorganized Debtors. Holders of General Unsecured Claims are estimated to recover 4% to 6% of their total allowed claims. The Debtors propose the following schedule to govern the confirmation of the Second Amended Plan: Voting Deadline January 21, 2016 Deadline for filing objections to approval of the Disclosure Statement and/or to confirmation of the Plan January 21, 2016 Deadline for Debtors to file a reply to any Objections January 25, 2016 Requested Combined Hearing date January 27, 2016 A full-text copy of Second Amended Plan, dated Dec. 18, 2015, is available at http://bankrupt.com/misc/BOOMERANGds1218.pdf The Debtors are represented by: My Chi To, Esq. Nick S. Kaluk, III, Esq. DEBEVOISE & PLIMPTON LLP 919 Third Avenue New York, NY 10022 Tel: (212) 909-6000 Fax: (212) 909-6836 E-mail: mcto@debevoise.com nskaluk@debevoise.com - and - Robert S. Brady, Esq. Sean M. Beach, Esq. Ryan M. Bartley, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: rbrady@ycst.com sbeach@ycst.com rbartley@ycst.com 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 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. * * * The hearing to consider confirmation of the Second Amended Plan is slated for Jan. 27, 2016, at 10:30 a.m. BOOMERANG TUBE: UST Questions Fee Provision in 2nd Amended Plan --------------------------------------------------------------- Andrew R. Vara, Acting United States Trustee for Region 3, is asking the Bankruptcy Court to deny confirmation of Boomerang Tube, LLC, et al.'s Second Amended Joint Chapter 11 Plan unless the confirmation order provides that notwithstanding anything in the Plan, no fees or expenses incurred defending any fee application shall be awarded from the Debtors' bankruptcy estates. "Article 12.10 of the Plan would entitle Committee professionals to recover fees they incur in the 'resolution' of their final fee applications. To the extent 'resolution' includes defense, the Plan violates Sections 328, 330 and 1103 of the Bankruptcy Code and Baker Botts LLP v. ASARCO LLC, and is therefore unconfirmable under Section 1129(a)(1). Further, the allowability of fees for fee defense is already being litigated in this case and is presently under advisement by the Court. The Plan should not short-circuit the Court's consideration of the allowability of fees for fee defense," the U.S. Trustee said in its objection. The U.S. Trustee's Office can be reached at: ANDREW R. VARA ACTING UNITED STATES TRUSTEE, REGION 3 Benjamin A. Hackman Trial Attorney 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 Tel: (302) 573-6491 Fax: (302) 573-6497 E-mail: benjamin.a.hackman@usdoj.gov 2nd Amended Plan As reported in the Jan. 4, 2016 edition of the TCR, Boomerang Tube, LLC, et al., filed a Second Amended Joint Chapter 11 Plan a month after Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware denied confirmation of the Amended Joint Prearranged Chapter 11 Plan. After several months of discussions with their key stakeholders, the Debtors entered into the Plan Support Agreement with the ABL Facility Lenders, the Term Loan Lenders, and the Sponsor, which contemplated that the Debtors would pursue a restructuring of the Debtors pursuant to a chapter 11 plan of reorganization, initially dated as of June 30, 2015 and subsequently amended on August 10, August 13, and September 4, 2015. The Prior Plan was premised on a total enterprise value of the Reorganized Debtors that rendered the holders of Term Loan Facility Claims substantially under-secured. As a result, the Prior Plan provided that holders of Term Loan Facility Claims would receive 100% of the equity in the Reorganized Debtors, and that recoveries to holders of General Unsecured Claims would be limited to the proceeds of certain unencumbered assets, including chapter 5 causes of action that were not released under the Prior Plan. In connection with the Debtors' request to confirm the Prior Plan, the Bankruptcy Court found that the evidence demonstrated a range for the Reorganized Debtors' TEV that would potentially allow holders of General Unsecured Creditors to share in the value of the Reorganized Debtors. As a result, the Bankruptcy Court denied confirmation of the Prior Plan. Thereafter, the Debtors, the Official Committee of Unsecured Creditors, the Term Loan Agent, and certain holders of Term Loan Facility Claims engaged in extensive negotiations regarding the terms of a revised chapter 11 plan that would account for the Bankruptcy Court's valuation ruling. As a result of those negotiations, the parties agreed to the terms contained in the term sheet for the Plan. These agreed upon terms will result in holders of Allowed General Unsecured Claims receiving value on account of their claims in the form of their pro rata share of the $2.25 million Cash GUC Consideration. In consideration of the revised treatment of holders of General Unsecured Claims under the Plan, the Creditors Committee has agreed to support the Plan and recommend that holders of General Unsecured Claims vote in favor of the Plan. The Plan also retains many of the other benefits to the Debtors and their estates that were set forth in the Prior Plan, including reducing the Debtors' funded debt obligations by converting approximately $214 million in outstanding principal of Term Loan Facility obligations into (i) 100% of the New Holdco Common Stock (subject to dilution for (x) issuances of equity under a management incentive plan not to exceed 5% of the total outstanding equity of New Holdco, and (y) by the Exit Term Facility Closing Fee) and (ii) $55 million of subordinated secured notes issued by New Opco. The Plan will be financed with the proceeds of the committed Exit Term Facility, which will be used to pay off the obligations under the DIP Term Facility, fund expenses under the Plan, and provide additional working capital to the Reorganized Debtors. The Debtors may also elect to enter into the Exit ABL Facility, which would be used to pay off the obligations under the DIP ABL Facility and provide additional working capital to the Reorganized Debtors. Holders of General Unsecured Claims are estimated to recover 4% to 6% of their total allowed claims. The Debtors propose the following schedule to govern the confirmation of the Second Amended Plan: Voting Deadline January 21, 2016 Deadline for filing objections to approval of the Disclosure Statement and/or to confirmation of the Plan January 21, 2016 Deadline for Debtors to file a reply to any Objections January 25, 2016 Requested Combined Hearing date January 27, 2016 A full-text copy of Second Amended Plan, dated Dec. 18, 2015, is available at http://bankrupt.com/misc/BOOMERANGds1218.pdf The Debtors are represented by: My Chi To, Esq. Nick S. Kaluk, III, Esq. DEBEVOISE & PLIMPTON LLP 919 Third Avenue New York, NY 10022 Tel: (212) 909-6000 Fax: (212) 909-6836 E-mail: mcto@debevoise.com nskaluk@debevoise.com -- and -- Robert S. Brady, Esq. Sean M. Beach, Esq. Ryan M. Bartley, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: rbrady@ycst.com sbeach@ycst.com rbartley@ycst.com 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 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. * * * The hearing to consider confirmation of the Second Amended Plan is slated for Jan. 27, 2016, at 10:30 a.m. BOOZ ALLEN: S&P Affirms 'BB' Corp. Credit Rating, Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB' corporate credit rating on McLean, Va.-based Booz Allen Hamilton Inc. The outlook remains stable. S&P has also revised its assessment of BAH's liquidity profile to strong from adequate. S&P's revision of BAH's liquidity profile assessment is based on the company's liquidity sources relative to its uses. The change in liquidity assessment does not have a notching effect on the 'BB' corporate credit rating. The stable outlook reflects S&P's expectation for consistent and stable profitability over the next 12 months, despite the highly competitive government service contract environment. S&P could lower the rating if revenue declines significantly because of U.S. federal government budget pressures to cut spending, or if profitability decreases because of increased competition or significant contract losses, leading to leverage in excess of 4x. Similarly, additional debt-financed dividends or share repurchases leading to such credit metrics could also result in a downgrade. S&P could raise the rating if the company is able to achieve consistent revenue and EBITDA growth and provides additional clarity on its long-term financial policy. BOULDER BRANDS: S&P's B CCR Removed From Watch Pos. Then Withdrawn ------------------------------------------------------------------ Standard & Poor's Ratings Services removed its ratings on Boulder Brands Inc., including the 'B' corporate credit rating, from CreditWatch, where S&P had placed them with positive implications on Nov. 25, 2015. Subsequently, S&P withdrew the ratings. The ratings withdrawal follows the completion of Pinnacle Foods' acquisition of Boulder on Jan. 15, 2016. Boulder's $300 million (about $265 million outstanding) first-lien term loan B and $115 million revolver have been repaid in full, and the facilities are terminated. BRITISH AMERICAN: Court Proposes Judgment vs. Duprey, Branker ------------------------------------------------------------- Plaintiffs British American Insurance Company (BAICO) Limited et al., filed a motion for entry of a final judgment after default against Defendants Lawrence Duprey and Brian Branker. The Defendant filed a verified motion to dismiss the complaint due to improper service, or, in the alternative, to vacate the Clerk's Default. In a Proposed Order dated December 8, 2015, which is available at http://is.gd/1wgWSBfrom Leagle.com, Judge Erik P. Kimball of the United States Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, proposed that the Motion to Vacate be denied, that the Motion for Judgment be granted in part to the extent that Mr. Duprey and Mr. Branker be held liable for all actions alleged in the amended complaint as against them, and that judgment be entered against Mr. Duprey and Mr. Branker in an amount to be set after trial solely on the issue of damages. The adversary cases are BRITISH AMERICAN INSURANCE COMPANY LIMITED, Plaintiff, v. ROBERT FULLERTON et al., Defendants. BRITISH AMERICAN ISLE OF VENICE (BVI) LIMITED and BRITISH AMERICAN INSURANCE COMPANY LIMITED, Plaintiffs, v. ROBERT FULLERTON et al., Defendants, Adv. No. 11-03118-EPK Consolidated., 11-03117-EPK (Bankr. S.D. Fla.). The Chapter 15 cases are In re: BRITISH AMERICAN INSURANCE COMPANY LIMITED, Chapter 15 Debtor in a Foreign Proceeding. In re: BRITISH AMERICAN ISLE OF VENICE (BVI) LIMITED, Chapter 15 Debtor in a Foreign Proceeding, Case Nos. 09-31881-EPK, 09-35888-EPK Jointly Administered, 10-21627-EPK (Bankr. S.D. Fla.). British American Insurance Company Limited , Plaintiff, is represented by Sean T Cork, Esq. -- Squire Patton Boggs (US) LLP, Traci H Rollins, Esq. -- traci.rollins@squirepb.com -- Squire Patton Boggs (US) LLP Robert Fullerton, Defendant, is represented by Kristopher E Pearson, Esq. -- kpearson@stearnsweaver.com -- Stearns Weaver Miller Weissler Alhadeff & Sitterson, PA Ramchand Ramnarine, Defendant, represented by Brett M Amron Esq. -- bamron@bastamron.com -- Bast Amron, Dana R Quick, Esq. -- dquick@bugbeelawyers.com --Bugbee & Conkle. Lawrence Duprey, Defendant, is represented by Patrick R Dorsey, Esq., John E Page, Esq. Green Island Holdings, LLC, Defendant, is represented by Howard D Dubosar Esq. -- HDubosar@dubolaw.com -- DuBosar Sheres, P.A. About BAICO British American Insurance Company is a Nassau, Bahamas-based insurance and financial services company. BAIC is owned by Trinidad-based parent CL Financial. BAIC listed debt of $500 million to $1 billion and assets of more than $100 million in its Chapter 15 petition (Bankr. S.D. Fla. Case No. 09-3588). By order entered Aug. 4, 2009, the Eastern Caribbean Supreme Court in the High Court of Justice Saint Vincent and the Grenadines appointed Brian Glasgow as Judicial Manager for BAICO under Section 52 of the Insurance Act, No. 45 of 2003 of the Laws of Saint Vincent and the Grenadines. BTB CORP: Caribbean Sign Supply Working on Deal With Debtor ----------------------------------------------------------- Caribbean Sign Supply objects to the immediate approval of the disclosure statement explaining BTB Corporation's Chapter 11 plan because it fails to list CCS's secured claim and incorrectly classifies the claim as a general claim of more than $3,000 in Class 5. Caribbean Sign filed its objection days after the Jan. 6, 2016 deadline to challenge the adequacy of information contained in the disclosure statement. During discussions, the Debtor's counsel said that the amount owed to CSS was consigned at San Juan Superior Court by Ferrovial Agroman, LLC and Metropistas, LLC, in an interpleader civil case with number KAC2015-0791. Metropistas hired Ferrovial as the general contractor to do pavement and asphalt work for a project called "PR-22 Accelerated Safety Upgrades and Pavement Rehabilitation". Later, Ferrovial hired BTB as a subcontractor to do the whole project. Thereafter, BTB hired CSS to supply essential highway safety materials for the project, but never paid the sum of $42,000 owed for these materials. Since CSS has a materials lien under the PR Civil Code Metropistas did not disburse to Ferrovial the amount owed to CSS and consigned the funds with the State Court. CSS said it is working on a stipulation with the Debtor that, if approved, will allow CSS to claim the consigned funds at the state court and to file a motion withdrawing its claim filed in the bankruptcy case. The possible withdrawal of CSS's claim will benefit creditors for it will increase the distribution base of the Plan, CSS said. Caribbean Sign Supply's counsel: JORGE LUIS GERENA MENDEZ, Esq. P.O. Box 195542 San Juan, PR. 00919-5542 Phone/Fax: (787)766-0780 E-mail: jlgere@gmail.com Bankruptcy Exit Plan As reported in the Dec. 9, 2015 edition of the TCR, BTB Corporation has filed with the U.S. Bankruptcy Court for the District of Puerto Rico a proposed Chapter 11 Plan that offers to pay non-insider unsecured creditors in full within 5 years. According to the Disclosure Statement, the Debtor proposes to make payments to creditors through the Plan primarily consisting of: 1. Payment of all administrative expenses on the later of the Effective Date or as soon as feasible after the date any such claim becomes an allowed Administrative Claim. 2. Payment of 100% of allowed priority tax claims in the amount of $2,910 to be on the Effective Date. 3. Secured creditor Banco Santander will be paid in full from the payment of the accounts receivables that were foreclosed pre-petition and the sale of the inventory. The Debtor will continue to make monthly interest payments on the outstanding balance of the line of credit computed at the contractually agreed rate of 3.75% over the 30-day LIBOR. Also, as part of the agreement with the bank, Petroleum Products Supply, LLC, will make payments directly to the bank in order to cover the mortgage payments over the premises, which are owned by Debtor's subsidiary and guaranteed by Debtor. Debtor's affiliates will continue to make payments under their lines of credit to the bank and Debtor will continue to guarantee these lines of credit. Lastly, Debtor will continue to support the bank in the collection of the receivables that were foreclosed by the bank prepetition. All of the aforementioned will be subject of a stipulation and/or a plan supplement to be executed within the next 30 days. 4. Payment of the non-dischargeable debt owed to the United States under the same terms and conditions of the settlement agreement reached with the United States. 5. Payment of in full, plus an annual interest rate of 4%, of allowed unsecured claims of more than $3,000 in 60 equal monthly installments. 6. Payment in full of allowed unsecured claims of less than $3,000 on or before the Effective Date. 7. Unliquidated and contingent claims will not receive any distribution from Debtor but will retain their rights to continue their claims against Debtor's insurance company and if any of the objections to said claims is unsuccessful, said claim shall be deemed as a general unsecured claim. 8. All unsecured claims of Debtor's insiders will not receive any dividend under the Plan but will be considered as new equity value and shall receive common shares of the Debtor in the same proportion. 9. All equity interests in Debtor will be cancelled and equity holders will receive no distribution. However, as aforementioned, new common shares of the Debtor will be issued to the insiders holding unsecured claims in the same proportion of their claims. The Plan is to be funded by the Lease and Sub-Lease agreement reached with Petroleum Products Supply, LLC, which will produce $150,000 per month for a period of five years. According to the Debtor, a Chapter 7 liquidation of the Debtor's assets would produce 100% distribution to non-contingent unsecured creditors but without interest and after the successful sale of all assets. A copy of the Disclosure Statement filed Nov. 20, 2015, is available for free at: http://bankrupt.com/misc/BTB_Corp_211_DS.pdf About BTB Corporation BTB Corporation was organized in 2003 to be engaged in bitumen supply activities and the rendering of any other services which may be complementary to such activities. Debtor initiated operations from a leased terminal and storage facility located in Penuelas, Puerto Rico. In 2007, BTB acquired 100% of the stock of The Placco Company of Puerto Rico, Inc., ("PLACCO"), a corporation organized under the laws of Puerto Rico on May 10, 1988 primarily to manufacture, produce, process and sell bitumen and other related or similar products. PLACCO became a wholly owned subsidiary of BTB, and is the owner of the bitumen terminal leased by BTB from where BTB operates its business in Guaynabo, Puerto Rico. In 2012, the current majority shareholders acquired BTB from IOTC Asphalt, LLC, retaining Mr. Juan Vazquez as President of the Company. BTB Corporation sought Chapter 11 protection (Bankr. D.P.R. Case No. 15-03681) in Old San Juan, Puerto Rico, on May 17, 2015. Samuel Lizardi signed the petition as interim president. The Debtor disclosed total assets of $16.5 million and total liabilities of $13.2 million. BTB said it sought bankruptcy protection as it is unable to meet obligations as they mature, and creditors are threatening suit and have threatened to undertake steps to obtain possession of its assets. The Debtor tapped Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, LLC, as its counsel. BTB CORP: UST Says Disclosures Lack Adequate Information -------------------------------------------------------- Guy G. Gebhardt, the Acting United States Trustee for Region 21, says the disclosure statement explaining BTB Corporation's Chapter 11 plan does not contain "adequate information" in that: * The Plan provides at page 12 that "[t]he Class 3 secured claim of Banco Santander will be paid in full from the payment of the accounts receivables that were foreclosed pre-petition and the sale of the inventory" but goes on to state that "[n]otwithstanding the aforementioned, Debtor will continue to make monthly interest payments on the outstanding balance of the line of credit computed at the contractually agreed rate of 3.75% over the 30-day LIBOR." These interest payments do not appear to be included in the statement of "Projected Yearly Cash Flows" appearing at page 59 of the Disclosure Statement. * The Plan and Disclosure Statement provide that Class 7 Claims, which are described as "Unliquidated and Contingent," are "Unimpaired" and that holders of such claims consequently are "Deemed to Accept the Plan." However, because these creditors will receive no distribution under the Plan, they are deemed to reject the Plan under 11 U.S.C. Sec. 1126(g). * According to the list of "Payments under the Plan of Reorganization" appearing at pages 63-65 of the Disclosure Statement, the Class 7 Claims total $17,872,228 and each is asserted by a proof of claim. Debtor states at page 12 of the Plan that it "will proceed to file objections to these claims, and if any of the objections is unsuccessful said claims shall be deemed as a general unsecured claim and included in Class 5." Since the Plan provides for Class 5 creditors to the paid in full with interest, it is not possible to make an informed judgment regarding its feasibility unless and until the allowed amounts of the Class 7 Claims have been determined. * At page 25, the Disclosure Statement provides that "the liquidation scenario would produce no distribution to priority and unsecured claims"; however, it goes on to state that "[a] Chapter 7 liquidation of the Debtor's assets would produce payment in full to the non contingent unsecured creditors . . ." This inconsistency should be corrected. * Debtor estimates at page 27 of the Disclosure Statement that "the rejection of this unexpired lease will create a deficiency claim in the amount of approximately $50,000 under the Plan." However, the unexpired lease in question is not identified. * At page 29, the Disclosure Statement provides that "[p]ursuant to 11 USC Sec. 1141(d)(3) Debtor will not receive a discharge of debt in this bankruptcy case"; however, the Plan states at Sec. 7.1 that "on the Consummation Date, all existing Claims against the Debtor or Debtor-in-Possession shall be, and shall be deemed to be, exchanged, satisfied, discharged and released in full . . ." * Neither the Plan nor the Disclosure Statement discloses the rights and remedies that would be available to Class 5 unsecured creditors in the event of a default by Debtor in making the monthly payments due them under the Plan. In particular, it is not apparent whether such creditors would be entitled to sue for the accelerated balance of all remaining amounts due them under the Plan in the event of such a default, or whether they would instead be limited to collection of past due payments only. The U.S. Trustee can be reached at: GUY G. GEBHARDT Acting United States Trustee for Region 21 MONSITA LECAROZ ARRIBAS Assistant United States Trustee OFFICE OF THE U.S. TRUSTEE Edificio Ochoa 500 Tanca Street, Suite 301 San Juan, Puerto Rico 00901-1922 Telephone: (787) 729-7444 Telecopier: (787) 729-7449 Bankruptcy Exit Plan As reported in the Dec. 9, 2015 edition of the TCR, BTB Corporation has filed with the U.S. Bankruptcy Court for the District of Puerto Rico a proposed Chapter 11 Plan that offers to pay non-insider unsecured creditors in full within 5 years. According to the Disclosure Statement, the Debtor proposes to make payments to creditors through the Plan primarily consisting of: 1. Payment of all administrative expenses on the later of the Effective Date or as soon as feasible after the date any such claim becomes an allowed Administrative Claim. 2. Payment of 100% of allowed priority tax claims in the amount of $2,910 to be on the Effective Date. 3. Secured creditor Banco Santander will be paid in full from the payment of the accounts receivables that were foreclosed prepetition and the sale of the inventory. The Debtor will continue to make monthly interest payments on the outstanding balance of the line of credit computed at the contractually agreed rate of 3.75% over the 30-day LIBOR. Also, as part of the agreement with the bank, Petroleum Products Supply, LLC, will make payments directly to the bank in order to cover the mortgage payments over the premises, which are owned by Debtor's subsidiary and guaranteed by Debtor. Debtor's affiliates will continue to make payments under their lines of credit to the bank and Debtor will continue to guarantee these lines of credit. Lastly, Debtor will continue to support the bank in the collection of the receivables that were foreclosed by the bank prepetition. All of the aforementioned will be subject of a stipulation and/or a plan supplement to be executed within the next 30 days. 4. Payment of the non-dischargeable debt owed to the United States under the same terms and conditions of the settlement agreement reached with the United States. 5. Payment of in full, plus an annual interest rate of 4%, of allowed unsecured claims of more than $3,000 in 60 equal monthly installments. 6. Payment in full of allowed unsecured claims of less than $3,000 on or before the Effective Date. 7. Unliquidated and contingent claims will not receive any distribution from Debtor but will retain their rights to continue their claims against Debtor's insurance company and if any of the objections to said claims is unsuccessful, said claim shall be deemed as a general unsecured claim. 8. All unsecured claims of Debtor's insiders will not receive any dividend under the Plan but will be considered as new equity value and will receive common shares of the Debtor in the same proportion. 9. All equity interests in the Debtor will be cancelled and equity holders will receive no distribution. However, as aforementioned, new common shares of the Debtor will be issued to the insiders holding unsecured claims in the same proportion of their claims. The Plan is to be funded by the Lease and Sub-Lease agreement reached with Petroleum Products Supply, LLC, which will produce $150,000 per month for a period of five years. According to the Debtor, a Chapter 7 liquidation of the Debtor's assets would produce 100% distribution to non-contingent unsecured creditors but without interest and after the successful sale of all assets. A copy of the Disclosure Statement filed Nov. 20, 2015, is available for free at: http://bankrupt.com/misc/BTB_Corp_211_DS.pdf About BTB Corporation BTB Corporation was organized in 2003 to be engaged in bitumen supply activities and the rendering of any other services which may be complementary to such activities. Debtor initiated operations from a leased terminal and storage facility located in Penuelas, Puerto Rico. In 2007, BTB acquired 100% of the stock of The Placco Company of Puerto Rico, Inc., ("PLACCO"), a corporation organized under the laws of Puerto Rico on May 10, 1988 primarily to manufacture, produce, process and sell bitumen and other related or similar products. PLACCO became a wholly owned subsidiary of BTB, and is the owner of the bitumen terminal leased by BTB from where BTB operates its business in Guaynabo, Puerto Rico. In 2012, the current majority shareholders acquired BTB from IOTC Asphalt, LLC, retaining Mr. Juan Vazquez as President of the Company. BTB Corporation sought Chapter 11 protection (Bankr. D.P.R. Case No. 15-03681) in Old San Juan, Puerto Rico, on May 17, 2015. Samuel Lizardi signed the petition as interim president. The Debtor disclosed total assets of $16.5 million and total liabilities of $13.2 million. BTB said it sought bankruptcy protection as it is unable to meet obligations as they mature, and creditors are threatening suit and have threatened to undertake steps to obtain possession of its assets. The Debtor tapped Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, LLC, as its counsel. BUILDING MATERIALS: Moody's Puts Ba2 CFR on Review for Downgrade ---------------------------------------------------------------- Moody's Investors Service placed Building Materials Corporation of America's ("BMCA" and to be renamed Standard Industries Inc.) ratings under review for downgrade, including its Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating, and the Ba2 ratings assigned to its senior unsecured notes. The review follows the company's announcement that it is acquiring Icopal, a pan-European manufacturer of roofing and other waterproofing products. The company recently announced that it is acquiring Icopal, a pan-European manufacturer of roofing and other waterproofing products with about revenues of EUR1 billion ($1.1 billion), from Investcorp Ltd. for approximately EUR1 billion. On a pro forma basis, the combined company will have about $4 billion in sales, an expanded market across North America and Europe, and additional product offerings. On Review for Downgrade: Issuer: Building Materials Corporation of America Probability of Default Rating, Ba2-PD, Placed on Review for Downgrade Corporate Family Rating, Ba2, Placed on Review Downgrade Senior Unsecured Regular Bond/Debenture, Ba2 (LGD4), Placed on Review for Downgrade Outlook Actions: Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE Moody's review will focus on the company's financing strategies for the proposed acquisition and its impact on liquidity and debt credit metrics. Moody's will also analyze the combined entity's integration plans and the ensuing impact on operating margins. Building Materials Corporation of America (to be renamed Standard Industries Inc.), headquartered in Parsippany, NJ, operates under the trade name GAF and is a national manufacturer and marketer of a broad line of roofing products and accessories for the residential and commercial roofing markets. The company also manufactures specialty building products and accessories for the professional and do-it-yourself remodeling and residential construction industries. Trusts for the benefit of the heirs of Ronnie F. Heyman are the owners of the company. Annualized revenues on a pro forma basis including the acquisition of Icopal total approximately $4.0 billion. The principal methodology used in these ratings was Global Manufacturing Companies published in July 2014. CALLITA IRREVOCABLE: Case Summary & Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Callita Irrevocable Trust 34056 Callita Dr. Dana Point, CA 92629 Case No.: 16-10277 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: January 25, 2016 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Hon. Theodor Albert Debtor's Counsel: Bruce A Boice, Esq. LAW OFFICE OF BOICE & ASSOCIATES 307 E. Chapman Ave, Suite 102 Orange, CA 92866 Tel: 949-690-8647 Fax: 949-612-0859 Email: bboice@lawyer.com Estimated Assets: $1.20 million Estimated Liabilities: $984,515 The petition was signed by Michael Montief, administrator. The Debtor listed Nationstar as its largest unsecured creditor holding a mortgage claim of $215,447. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/cacb16-10277.pdf CALPIAN INC: Liggett Vogt & Webb Raises Going Concern Doubt ----------------------------------------------------------- Liggett, Vogt & Webb, P.A., in a November 30, 2015 letter to the board of directors and shareholders of Calpian, Inc., expressed substantial doubt about the company's ability to continue as a going concern. The firm audited the consolidated balance sheet of the company as of March 31, 2015 and 2014, and the related consolidated statements of operations, shareholders' equity and cash flows for the years then ended. Liggett Vogt related that the company has experienced recurring operating losses and negative cash flows from operating activities. "These conditions raise substantial doubt about the company's ability to continue as a going concern." The company had a net loss of $(9,356,411) and $(6,959,054) for the years ended March 31, 2015 and 2014, respectively. "These conditions raise substantial doubt about the company's ability to continue as a going concern," said the company's chief executive officer and secretary, Harold H. Montgomery, in a regulatory filing with the U.S. Securities and Exchange Commission on November 30, 2015. Mr. Montgomery explained: "The company is continuing with its plan to further grow and expand its mobile payment processing operations in emerging markets, particularly in India. Management believes that its current operating strategy will provide the opportunity for the company to continue as a going concern as long as it continues to obtain additional financing; however, there is no assurance this will occur. "Management does believe it has created and is executing on a viable plan that has the capability of eliminating the threat to continuation of our business. This plan involves sale of the remaining U.S. operations, which will allow us to re-pay the outstanding balance of our senior credit facility. We will have to raise additional funds to continue our operations and, while we have been successful in doing so in the past, there can be no assurance that we will be able to do so in the future. Our continuation as a going concern is dependent upon our ability to obtain necessary additional funds to continue operations and the attainment of profitable operations." At March 31, 2015, the company had total assets of $39,790,001, total liabilities of $21,311,735 and total shareholders' equity of $18,478,266. A full-text copy of the company's annual report is available for free at: http://tinyurl.com/zkgcol6 Dallas-based Calpian, Inc. acquires recurring monthly residual income streams derived from credit card processing fees paid by retail merchants in the U.S. The company does not act as a credit card processor but as a purchaser of revenue streams resulting from the relationships between processors and independent sales organizations (ISOs). CENTRAL SECURITY: S&P Affirms 'B-' Rating on 1st-Lien Term Loan --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' issue-level rating on Tulsa, Okla.-based residential alarm monitoring company Central Security Group Inc.'s first-lien term loan due 2020 following the company's $50 million add-on to the loan. The recovery rating remains '4', indicating S&P's expectation of average (30%-50%; upper half of the range) recovery in the event of a payment default. S&P also affirmed all other ratings on the company's debt. The company will use the proceeds to pay down the outstanding balance on its revolving credit facility, which is also rated 'B-' with a recovery rating of '4' (upper end of the 30%-50% range). S&P expects that the company will continue to use a combination of cash flow from operations and additional debt to finance acquisitions of new subscribers from its network of third-party dealers as well as through internally generated accounts. S&P's corporate credit rating on Central Security Group remains 'B-' with a stable outlook, and reflects the company's "vulnerable" business risk profile and "highly leveraged" financial risk profile. Leverage metrics remain essentially unchanged following the transaction. RATINGS LIST Central Security Group Inc. Corporate Credit Rating B-/Stable/-- Ratings Affirmed Central Security Group Inc. $278 million first-lien term loan due 2020 Senior Secured B- Recovery Rating 4H CHARLOTTE RUSSE: Moody's Cuts CFR to B3 & Changes Outlook to Neg. ----------------------------------------------------------------- Moody's Investors Service downgraded Charlotte Russe, Inc.'s Corporate Family Rating and senior secured term loans due 2019 to B3 from B2. The Probability of Default Rating was also downgraded by one notch to B3-PD and the outlook was changed to Negative. The downgrade reflects weak YTD operating performance through Oct. 31, 2015, and Moody's expectation that Charlotte Russe will be challenged to improve its operating performance sufficiently to bring credit metrics back in line with the B2 rating category over the next 12-24 months. Over the YTD period Charlotte Russe has seen same store sales decline close to 10% caused by declining mall traffic trends and product acceptance issues. In addition, higher markdown rates to clear inventory and support promotional activity, as well as the impact from fixed costs, have pushed EBITDA margins significantly lower. According to Moody's analyst Dan Altieri, "given the competitive operating environment and declining mall traffic trends, it will take some time for the company to reestablish itself with its core customers." Moody's estimates lease adjusted leverage for the LTM period to be in the mid 5 times range, however leverage for funded debt is closer to the high 7 times range. In addition, interest coverage metrics (EBIT/Interest and EBITA/Interest) have deteriorated to below 1 time for the LTM period, which is well below the downgrade trigger of 1.25 times stated in our August 2015 credit opinion. The negative outlook reflects Moody's expectation that a challenging operating environment will continue to pressure results over the next 12-24 months and that any improvement in operating performance will be gradual. The outlook could be stabilized if Charlotte Russe is able to improve operating performance and sustain interest coverage (Moody's adjusted EBIT/Interest) above 1 time. Moody's took these rating actions: Issuer: Charlotte Russe, Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD $150 million Senior Secured Term Loan due 2019, Downgraded to B3 (LGD-3) from B2 (LGD-3) $80 million Senior Secured Term Loan due 2019, Downgraded to B3 (LGD-3) from B2 (LGD-3) Outlook, Changed to Negative RATINGS RATIONALE Charlotte Russe's B3 CFR reflects the company's high leverage and weak interest coverage resulting from weak YTD operating performance and a history of aggressive financial policies. The rating also reflects Moody's expectation that a challenging operating environment, including declining mall traffic trends and competitive pressures, will continue to be a headwind against a meaningful recovery. As a result, Moody's anticipates credit metrics will remain weak over the next 12-24 months. Other challenges include the company's low operating margins and event risk under private equity ownership. Moody's also believes that the company's fast fashion business model can heighten the impact from supply chain disruptions, such as the west coast port slowdown, which partially contributed to Charlotte Russe's weak performance in the first quarter of 2015. The ratings benefit from a history of solid operating performance under the current management team from fiscal 2011 through fiscal 2014, highlighted by same store sales growth and margin improvement over the period, as well as the development of an omni-channel model, with a growing eCommerce and mobile business. The company's adequate liquidity profile also supports the rating. Moody's anticipates Charlotte Russe will maintain adequate liquidity over the next 12-18 months with close to breakeven free cash flow (CFO -- Capex) and cash maintained near the $6 million level on the balance sheet as of Oct. 31, 2015. Although LTM free cash flow was negative, Moody's expects future cash flow will benefit from meaningfully reduced capital spending and more normalized working capital trends, as the company works to clear its excess inventory. Charlotte Russe has access to a $75 million asset-based revolving credit facility (ABL) due 2018 which had about $5 million drawn at the end of the third quarter. Moody's expects that the outstanding balance will be repaid by the end of fiscal 2015 and anticipates modest reliance on the facility over the next 12-18 months during peak seasonal periods. Due to an $11 million excess cash flow payment made during Q1 2015, there are no required quarterly amortization payments until the loans come due in 2019. The company's credit agreements contain only a springing fixed charge coverage test on the ABL facility that is triggered if availability falls below the greater of $6.0 million or 10% of available borrowings. Moody's does not expect the company will trigger the covenant. However, if tested, Moody's forecasts minimal to no cushion on the covenant over the next 12-18 months. Alternative liquidity is limited because of the fast-moving inventory and absence of meaningful real estate holdings. The B3 rating assigned to the company's senior secured term loans is in line with the CFR since these loans represent a preponderance of funded debt. The term loans mature in May 2019 and have a 2nd lien position on the company's accounts receivable and inventory (ranking junior to the $75 million asset-based revolver) and a first lien on substantially all other assets of the borrower. Charlotte Russe leases substantially all of its locations, therefore the company does not have meaningful real estate holdings. Ratings could be upgraded if Charlotte Russe is able to reverse recent operating trends, driving same store sales growth and improving EBITDA margins, such that Debt/EBITDA is sustained below 6.0 times with interest coverage (EBIT/Interest) above 1.25 times. Given the company's history of aggressive financial policies, an upgrade would also require a willingness to maintain metrics at these levels. Ratings could be downgraded if operating performance fails to meaningfully improve, resulting in EBIT/Interest sustained below 1.0 time, or any deterioration in liquidity. The principal methodology used in these ratings was Retail Industry published in October 2015. Headquartered in San Francisco, CA, Charlotte Russe, Inc. is a retailer of value-oriented fast fashion' apparel and accessories, targeting 18-24 year old women. As of Oct. 31, 2015, the company operated 559 retail stores in the US and Puerto Rico and generated sales through its ecommerce and mobile platforms. Revenue for the LTM period was $935 million. The company is owned by affiliates of Advent International and current management. CHESAPEAKE ENERGY: S&P Lowers CCR to 'CCC+', Outlook Negative ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Oklahoma City-based exploration and production company Chesapeake Energy Corp. to 'CCC+' from 'B'. The outlook is negative. At the same time, S&P lowered the senior unsecured debt ratings to 'CCC-' from 'CCC+'. The '6' recovery rating is unchanged, reflecting S&P's expectation for negligible recovery (0% to 10%) in the event of a payment default. In addition, S&P lowered the rating on the company's first-lien senior secured debt to 'B' from 'BB-'. The recovery rating on this debt remains '1', indicating S&P's expectation for very high (90% to 100%) recovery in the event of a payment default. S&P also lowered the issue-level rating on the company's second-lien notes to 'B' from 'BB-' and placed them on CreditWatch with negative implications, reflecting the potential for lower ratings if a revised PV-10 results in lower recovery expectations. S&P also lowered its rating on the company's preferred stock to 'D' from 'CCC' based on Chesapeake's decision to suspend dividends, which S&P views as a default on the securities. "The downgrade reflects the implementation of the recent change in our base case oil and natural gas price assumptions," said Standard & Poor's credit analyst Paul Harvey. S&P lowered its 2016, 2017, and long-term price assumptions for Henry Hub natural gas by over 15% and West Texas Intermediate (WTI) crude oil by about 20%%, which resulted in significantly weaker financial measures for Chesapeake, with funds from operations (FFO)/debt under 5% and debt/EBITDA well over 10x for the next two years. At such levels, S&P assess debt leverage as unsustainable. Based on S&P's price assumptions, it expects only limited improvement in the near-term and that Chesapeake will face both a challenging operating environment and weak capital markets as about $2 billion of debt comes due in 2017. The downgrade of the preferred stock to 'D' reflects the suspension of dividends on that security, which S&P views as a default. The negative CreditWatch placement of the second-lien notes reflects the potential that S&P could lower ratings on that debt class if a revised PV-10 results in lower recovery expectations. The negative outlook reflects S&P's expectation that financial measures will remain very weak over the next 24 months based on S&P's natural gas and crude oil prices assumptions. Under these challenging conditions, S&P expects debt leverage to exceed 12x on average. Additionally, liquidity is likely to be challenged under these low prices, both from diminished cash flows and potential reductions in the company's borrowing base. Also, the negative outlook reflects the potential that Chesapeake could launch an exchange offer or other refinancing S&P would view as distressed, resulting in a selective default. S&P could lower ratings if it expected liquidity to materially weaken in the face of the 2017 debt maturities and expected puts, such that S&P assessed liquidity as weak. Additionally, S&P could lower ratings if Chesapeake pursued a distressed refinancing of its debt, which S&P would view as a selective default. S&P could revise the rating outlook to stable if Chesapeake can address upcoming maturities and putable debt such that S&P assessed liquidity as adequate, and at the same time financial measures improved on a sustained basis such that FFO to debt was 5% or better and debt/EBITDA was below 10x. Both events are likely in conjunction with improving hydrocarbon prices, such that our natural gas price assumption exceeded $3.00 on a sustained basis. FAIRFIELD SENTRY: Court Disapproves Sale of Madoff Claim to Farnum ------------------------------------------------------------------ In Krys v. Farnum Place, LLC, the U.S. Court of Appeals for the Second Circuit reversed the Bankruptcy and District Courts, and held that the sale of Fairfield Sentry Ltd.'s customer claim in the Bernard L. Madoff Investment Securities LLC liquidation to Farnum Place, LLC, required review. On remand, Kenneth Krys, the foreign representative of Sentry, seeks disapproval of the sale because the value of the Sentry Claim has risen dramatically. Alternatively, the Foreign Representative seeks authority to conduct a new sale. Farnum separately moves to modify the order recognizing these Chapter 15 proceedings. Judge Stuart M. Bernstein of the United States Bankruptcy Court for the Southern District of New York granted the Foreign Representative's Motion to Disapprove Sale and denied Farnum's motions to modify the Recognition Order and to compel Discovery. The case is captioned In re: FAIRFIELD SENTRY LIMITED, et al., Chapter 15, Debtors in Foreign Proceedings, CASE NO. 10-13164 (SMB) JOINTLY ADMINISTERED. A full-text copy of Judge Bernstein's Memorandum Decision dated October 13, 2015, is available at http://is.gd/BFGu4dfrom Leagle.com. Fairfield Sentry Limited, Foreign Representative, represented by David Molton, Esq. -- dmolton@brownrudnick.com -- Brown Rudnick LLP, Shivani Poddar, Esq. -- spoddar@brownrudnick.com -- Brown Rudnick LLP. Irving H. Picard, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, and Bernard L. Madoff, Trustee, represented by Marc E. Hirschfield, Esq. -- mhirschfield@bakerlaw.com -- Baker & Hostetler LLP. About Fairfield Sentry Fairfield Sentry is being liquidated under the supervision of the Commercial Division of the High Court of Justice in the British Virgin Islands. It is one of the funds owned by the Fairfield Greenwich Group, an investment firm founded in 1983 in New York City. Fairfield Sentry and other Greenwich funds had among the largest exposures to the Bernard L. Madoff fraud. Fairfield Sentry Limited filed for Chapter 15 protection (Bankr. S.D.N.Y. Case No. 10-13164) on June 14, 2010. Fairfield Sentry became the subject of a BVI liquidation, and a BVI court appointed the Liquidator under BVI law. The Liquidator then sought recognition of the BVI liquidation as a foreign main proceeding under Chapter 15 of the Code in the Southern District of New York. The Bankruptcy Court entered an order granting recognition of the Fairfield Sentry case on July 22, 2010, enabling the Liquidator to use the U.S. Bankruptcy Court to protect and administer Fairfield Sentry's assets in the U.S. FUHU INC: Mattel Beats Greg Norman With $21.5M Bid for Assets ------------------------------------------------------------- Jeff Montgomery at Bankruptcy Law360 reported that Mattel Inc. has added bankrupt children's tablet-maker Fuhu Inc. to its toybox, submitting a $21.5 million bid for the company in a stalking horse auction in Delaware and beating a private equity fund led by pro golfer Greg Norman, according to Jan. 21, 2016 court filings. The Mattel deal, outlined in papers filed in bankruptcy court on Thursday, more than doubled the minimum bid set earlier this month, when the private equity fund led by Norman offered $10 million for the company. About Fuhu Fuhu, Inc. and Fuhu Holdings, Inc. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12465) on Dec. 7, 2015. The petition was signed by James Mitchell as chief executive officer. The Debtors estimated assets in the range of $10 million to $50 million and liabilities of $100 million to $500 million. Pachulski Stang Ziehl & Jones LLP represents the Debtors as counsel. Judge Christopher S. Sontchi presides over the case. Fuhu is headquartered in El Segundo, California, and employs approximately 115 employees and retains one independent contractor who work in various areas including marketing, sales, operations, creative, technology, development and management. Court document indicates that between 2010 and 2013, Fuhu's revenue grew to more than $195 million in 2013. Fuhu's array of nabi tablets are sold in more than 10,000 retail outlets, including Target, Best Buy, Costco Wholesale, Toys R'Us and Walmart stores. Fuhu Moldings owns significant intellectual property assets of the Debtors, including trademarks and copyrights. GFL ENVIRONMENTAL: Moody's Affirms B2 CFR, Outlook Stable --------------------------------------------------------- Moody's Investors Service affirmed GFL Environmental Inc.'s B2 corporate family rating, B2-PD probability of default rating, and B3 rating on its existing senior unsecured notes, and assigned a B3 rating to its proposed senior unsecured notes. The ratings outlook is stable. Net proceeds from the notes issue together with $468 million of equity contribution from its owners will be used to fund the $800 million acquisition of TransForce Inc.'s Matrec solid waste division and other pending acquisitions. Ratings Affirmed: Corporate Family Rating, B2 Probability of Default Rating, B2-PD US$250 million unsecured notes due 2020, B3 (LGD4) Rating Assigned: New US$250 million unsecured notes due 2021, B3 (LGD4) Outlook: Remains Stable RATINGS RATIONALE GFL's B2 CFR primarily reflects risks with its aggressive acquisition growth strategy and short time frame between acquisitions, potential for integration risks and lack of a track record for organic growth. The rating also assumes the company will slow acquisition growth and show a track record of EBITDA expansion which will enable leverage to be sustained around 5x (currently 7x, but 5.2x pro-forma for acquisitions). The rating recognizes that the company's pro-forma EBITDA margins will become comparable to those of its higher rated North American waste peers. The rating also considers the company's diversified business model with high recurring revenue supported by long term contracts and good market position in the relatively stable but low-growth Canadian non-hazardous waste industry. Moody's views GFL's liquidity position as adequate. This is supported by annual pro-forma free cash flow in excess of C$60 million, about $139 million of availability (when the notes transaction closes) under its upsized C$315 million revolving credit facility (including a C$50 million LC facility), and limited mandatory debt repayments. The company keeps no cash on its balance sheet. The maturity of the revolver is December 2017 but extends another two years if the company's existing senior notes due June 2018 are refinanced 6 months prior to maturity. GFL's revolver is subject to coverage and leverage covenants which Moody's expects will have at least 15% cushion through the next 4 to 6 quarters. Substantially all of GFL's assets are pledged as collateral which limits flexibility to raise additional funds should the need arise. The stable outlook reflects Moody's expectation GFL will continue to make small bolt-on acquisitions, and will fund them in such a way that leverage will be sustained around 5x over time. The rating could be upgraded if GFL sustained adjusted Debt/EBITDA towards 4x, EBIT/Interest towards 2x and EBITDA margin above 25%. Consistent organic revenue growth and maintenance of good liquidity are added attributes for upgrade consideration. The rating could be downgraded if the company engages in another large scale acquisition and adjusted Debt/EBITDA is sustained above 6x and EBIT/Interest towards 1x. A material decline in GFL's EBITDA margin due to challenges integrating acquisitions, or negative free cash flow generation on a consistent basis would also cause a downgrade. The principal methodology used in these ratings was Environmental Services and Waste Management Companies published in June 2014. GFL Environmental Inc., headquartered in Toronto, provides solid waste and liquid waste collection, treatment and disposal solutions and soil remediation services to municipal, industrial and commercial customers in Canada. Pro forma for acquisitions, revenue exceeds $850 million. GFL ENVIRONMENTAL: S&P Affirms 'B' CCR, Outlook Stable ------------------------------------------------------ Standard & Poor's Ratings Services said it affirmed its ratings on Toronto-based waste services company GFL Environmental Inc., including its 'B' long-term corporate credit rating on the company. The outlook is stable. At the same time, Standard & Poor's assigned its 'B' issue-level rating and '4' recovery rating to the company's proposed US$250 million senior unsecured notes due 2021. The '4' recovery rating on the notes reflects S&P's expectation of average (30%-50%; in the lower half of the range) recovery in a default scenario. GFL is a regional waste services company that conducts business exclusively in Canada. "The ratings on GFL reflect our view of the company's fair business risk profile and highly leveraged financial risk profile," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. The fair business risk profile on GFL primarily incorporates S&P's view of the company's participation in the environmental services industry (which S&P views as having low risk characteristics), operations in the highly fragmented and competitive solid waste business and average profitability assessment. GFL plans to finance the Matrec acquisition, and other tuck-in acquisitions, through a combination of high-yield debt and C$468 million in equity. The equity contribution is from Macquarie Infrastructure Partners III and existing investors. Post-acquisition, GFL will operate in almost all provinces in Canada, with about 50% of revenues generated from Ontario. However, despite this, GFL's diversity characteristics and market positions are weaker than those of the much larger national leaders. S&P's view of GFL's financial risk profile as highly leveraged reflects the company's financial sponsor ownership by Highbridge Principal Strategies LLC and Hawthorn Equity Partners. The stable outlook on GFL reflects S&P's expectation that the company will continue to expand its operating breadth through acquisitions while maintaining a highly leveraged financial risk profile. S&P estimates the company will generate an adjusted-to-EBITDA of about 5x, and expect temporary increases from this level related to debt-funded acquisitions. S&P could lower the rating should GFL become liquidity-constrained, where headroom under its funded debt-to-EBITDA covenant fell below 10%. This could limit the company's availability under its revolving facility and lead to a downgrade. Furthermore, a negative rating action could also occur if adjusted debt-to-EBITDA exceeds 7x, which we believe could result from competitive pressures or operating inefficiencies that contribute to weaker-than-expected earnings and cash flow. S&P could upgrade GFL should the company's credit metrics strengthen and S&P believes the company is committed to maintaining an adjusted debt-to-EBITDA ratio in the mid-to-low 4x area with adequate liquidity. GOLD RIVER: Levene Neale Pulls Out Bid to Withdraw as Counsel ------------------------------------------------------------- Levene, Neale, Bender, Yoo & Brill L.L.P., reorganization counsel of record for Gold River Valley, LLC, voluntarily withdraws its motion to withdraw as counsel. On Oct. 20, 2015, LNBYB asked permission from the Bankruptcy Court to withdraw as counsel of record for the Debtor. According to LNBYB, due to the attorney-client privilege, LNBYB cannot provide many of the specific facts surrounding communications between the Debtor and LNBYB. There is a conflict between the Debtor and LNBYB with respect to the direction of the Chapter 11 case and the plan, which renders it impossible for LNBYB to carry out its representation of the Debtor effectively. Specifically, LNBYB is unable to obtain unified and unequivocal direction from the Debtor respecting proceeding with this case and administration of the estate. LNBYB told the Court that it has tried to resolve its differences with the client amicably for quite some time, but has been unable to do so. However, LNBYB has set the motion on full notice so as to provide another opportunity for resolution of the conflict so as to enable LNBYB to modify and confirm a plan in the case. About Gold River Valley Gold River Valley, LLC, sought Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 15-10691) in Los Angeles, on Jan. 16, 2015. David B. Golubchik, Esq., and Jeffrey S. Kwong, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., represents the Debtor as counsel. The Debtor disclosed $12,000,000 in assets and $8,720,911 in liabilities as of the Chapter 11 filing. * * * Judge Thomas B. Donovan of the U.S. Bankruptcy Court for the District of California on Sept. 16, 2015, entered an order conditionally confirming the Chapter 11 Plan of Gold River Valley. The order authorized and approved the sale of the Debtor's property to Ding Gang, the buyer, for $10.8 million. A copy of the order is available for free at http://is.gd/2JWI1V GREAT LAKES COMNET: Case Summary & 20 Top Unsecured Creditors ------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Great Lakes Comnet, Inc. 16-00290 fdba Spectrum Lightwave fdba Michigan Lightwave fdba Great Lakes Cablenet 1515 Turf Lane, Suite 100 East Lansing, MI 48823 Comlink, LLC 16-00292 Type of Business: Provides telecommunications services to telecommunications carrier customers Chapter 11 Petition Date: January 25, 2016 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Hon. John T. Gregg Debtors' Counsel: Timothy A. Fusco, Esq. MILLER CANFIELD PADDOCK & STONE PLC 150 W Jefferson, Ste 2500 Detroit, MI 48226 Tel: 313-496-8435 Email: fusco@millercanfield.com - and - Jonathan S. Green, Esq. MILLER CANFIELD PADDOCK & STONE PLC 150 West Jefferson Avenue, Suite 2500 Detroit, MI 48226 Tel: 313-496-7997 Email: greenj@millercanfield.com - and - Stephen S. LaPlante, Esq. MILLER CANFIELD PADDOCK & STONE PLC 150 West Jefferson Ave., Suite 2500 Detroit, MI 48226 Tel: 313-496-8478 Email: laplante@millercanfield.com - and - Marc N. Swanson, Esq. MILLER CANFIELD PADDOCK & STONE PLC 150 West Jefferson Avenue, Suite 2500 Detroit, MI 48226 Tel: 313-496-7591 Fax: 313-496-8452 Email: swansonm@millercanfield.com Debtors' ALIX PARTNERS LLP Restructuring Advisors: Debtors' KURTZMAN CARSON CONSULTANTS, LLC Claims, Balloting and Noticing Agent: Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The petition was signed by John Summersett, chief executive officer. List of Great Lakes Comnet's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 123.Net Vendor $48,746 ACE Telephone Co of MI Inc. Vendor $83,687 Agri-Valley Services Vendor $30,498 ANPI, LLC Vendor $17,299 AT&T Vendor $226,855 Charter Business Vendor $18,358 Cisco Systems Capital Corp Equipment Lease $63,061 Commscope Vendor $49,278 Consumers Energy Vendor $17,180 Denton Township Lease $28,800 Fire Pros Inc. Vendor $43,668 Insight Direct USA, Inc. Vendor $34,124 KEPS Technologies Inc. Maintenance $167,554 Level 3 Communications, LLC Vendor $22,907 Merit Network, Inc. Maintenance $530,848 1000 Oakbrook Drive Suite 200 Ann Arbor, MI 48104-6794 Miss Dig Systems, Inc. Vendor $16,939 Servercentral Vendor $20,005 Toly Digital Networks, Inc. Vendor $35,699 Western Tel-Com, Inc. Vendor $25,067 Zayo Group, LLC Maintenance $60,975 GREAT LAKES COMNET: Files for Ch 11; May Sell Assets to Everstream ------------------------------------------------------------------ Telecommunications services providers Great Lakes Comnet, Inc. and Comlink, LLC sought Chapter 11 bankruptcy protection as a result of an ongoing dispute with their major customer AT&T. On Oct. 22, 2014, AT&T Services, Inc. and AT&T Corp. filed a formal complaint against GLC and Westphalia Telephone Company alleging that GLC and WTC charged unlawful tariffs for interstate access services. The Federal Communication Commission adopted its Memorandum Opinion and Order on March 17, 2015, granting AT&T's complaint in part. In accordance with the FCC's rules, the liability and damage claims are bifurcated, and to date, the FCC has ruled only on liability and has not determined an amount of damages. In March of 2015, GLC and WTC filed a new tariff that complied with the ruling by the FCC. "Despite damages remaining unresolved by the FCC, AT&T has resorted to self-help to collect on the judgment it hopes to attain in the future," said John Summersett, chief executive officer of GLC. "For several years, AT&T has not paid and presently does not pay the full amount of its bills for the services it receives, despite the new, complying tariff," Mr. Summersett continued. GLC estimates that AT&T has taken by way of setoff or withheld payment on invoices totaling over $24,000,000. Despite nonpayment, Federal and state regulations prevent GLC from terminating service to or otherwise blocking calls to or from AT&T. AT&T has not ceased doing business with GLC and WTC, however it has reduced the amount of business it does with GLC and WTC. According to Mr. Summersett, the effect of AT&T's resort to self-help (both premature and presumptive), and its reduced usage of GLC's services, have been catastrophic for GLC and is the prime cause of its bankruptcy filing. Comlink's financial difficulties result directly from the AT&T dispute, as well. On Dec. 24, 2015, the Debtors and Everstream Solutions, LLC entered into a non-binding letter of intent outlining the general terms of a proposed sale transaction. The Debtors and Everstream agreed to negotiate an asset purchase agreement to accomplish a sale of the Debtors' assets under Section 363 of the United States Bankruptcy Code. The Debtors continue to negotiate with Everstream and document the proposed asset sale, and the Debtors hope to file a motion for an order approving bidding procedures and a sale in the next few days. Forbearance Expiration GLC, as a borrower, is indebted to CoBank, ACB. The Prepetition Senior Lender has provided GLC with a series of loans and other extensions of credit in the aggregate principal amount and accrued and unpaid interest outstanding, as of the Petition Date, of approximately $ 25,165,732. Since November, 2015, the Debtors and the Prepetition Senior Lender have been operating under the terms of a Forbearance Agreement dated as of Nov. 16, 2015, as amended by a First Amendment to Forbearance Agreement dated as of Dec. 8, 2015, together with other documents executed in connection with the Forbearance Agreement. Under the Forbearance Agreement, the Prepetition Secured Lender agreed to and has continued to finance the Debtors to enable the Debtors to pursue a sales process and otherwise consider restructuring options. The term of the forbearance under the Forbearance Agreement has expired and the Prepetition Debt is now due and payable in full. First Day Motions Contemporaneously with the petitions, the Debtors filed first day papers requesting expedited relief so that they can transition seamlessly into Chapter 11 without the immediate negative financial consequences that may well happen if the requested relief is not granted. The Debtors seek, among other things: (a) joint administration of their Chapter 11 cases; (b) authority to continue using their existing cash management system; (c) authority to pay employee compensation; (d) authority to prohibit utility providers from discontinuing services; and (e) permission to obtain debtor-in-possession financing and use cash collateral. About Great Lakes Comnet East Lansing, Michigan-based Great Lakes Comnet, Inc., owns and operates a 6,500 mile fiber network serving the carrier and enterprise sectors in Michigan, with the network extending to Ohio, Indiana, Illinois, Wisconsin, and Minnesota. GLC's services include transport, dark fiber sales, cloud and datacenter operations, toll resale, toll routes, local switching, tandem switching and SS7. GLC's tandem switch is used -- in conjunction with tandem transport services provided by GLC and Westphalia Telephone Company -- to send long distance calls from the network of one telecommunications carrier to the network of another telecommunications carrier. By using the services provided by GLC and WTC, interexchange carriers such as AT&T, are able to exchange interstate long distance calls with local telecommunications service providers, namely, rural Incumbent Local Exchange Carriers and competitive LECs, located throughout Michigan, where the rural ILECs and CLECs operate "end office switches" homing on GLC's tandem switch. Comlink provides data and communication services, including dedicated ultra-high-speed bandwidth data transmission, Ethernet private line services and virtual private network services, cloud-based and colocation data center services, and data management services to Consumers Energy, several hospital systems, municipalities and state correctional facilities. Great Lakes Comnet, Inc. and Comlink, LLC filed Chapter 11 bankruptcy petitions (Bankr. W.D. Mich. Case Nos. 16-00290 and 16-00292, respectively) on Jan. 25, 2016. The petitions were signed by John Summersett as chief executive officer. The Debtors estimated both assets and debts in the range of $10 million to $50 million. The Debtors have engaged Miller Canfield Paddock & Stone PLC as counsel, Alix Partners LLP as restructuring advisors and Kurtzman Carson Consultants, LLC as claims, balloting and noticing agent. HAVERHILL CHEMICALS: Judge Approves Deal to Settle DEB Claim ------------------------------------------------------------ A bankruptcy judge has approved an agreement that would resolve the claim of Direct Energy Business against Haverhill Chemicals LLC. Under the agreement, Direct Energy will get an administrative expense claim of $54,093 for the natural gas it supplied to the company. Payment of the claim will be made by Haverhill at the same time that it makes distributions to other holders of administrative expense claims or any earlier time that payment is authorized, according to court filings. The agreement was approved by Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas. A copy of the agreement is available for free at http://is.gd/mH6oil About Haverhill Chemicals Haverhill Chemicals LLC owns and operated a chemical plant in Haverhill, Ohio, to produce Phenol, Acetone, Bisphenol A (BPA) and Alpha-Methylstyrene ("AMS") for sale to customers. The chemicals are used to manufacture a wide variety of chemical intermediates, including phenolic resins, paint, varnishes, pharmaceuticals, film, epoxy resins, flame retardants, coatings and heat resistance of polystyrene. Haverhill Chemicals filed a Chapter 11 bankruptcy petition (Bankr. S.D. Tex. Case No. 15-34918) on Sept. 18, 2015, with a deal to sell its Haverhill plant to ALTIVIA Petrochemicals, LLC, for $3 million, subject to higher or better bids. The Debtor estimated assets of $1 million to $10 million and liabilities of $100 million to $500 million. The petition was signed by Paul Deputy, the chief financial officer. The case is assigned to Judge Marvin Isgur. Diamond McCarthy LLP serves as the Debtor's counsel. On Sept. 29, 2015, the U.S. trustee overseeing the Debtor's Chapter 11 case appointed Marathon Petroleum Company LP, Pritchard Electric Co., and CB&I Stone & Webster Construction Inc. to serve on the official committee of unsecured creditors. The Committee is represented by Gardere Wynne Sewell LLP. HORSEHEAD HOLDING: Idles North Carolina Zinc Facility ----------------------------------------------------- Stephanie Gleason, writing for Dow Jones' Daily Bankruptcy Review, reported that zinc producer Horsehead Holding Corp. has idled its North Carolina zinc facility and sent workers home, blaming liquidity troubles and low zinc prices. According to the report, Horsehead said on Jan. 22 that it was taking the action to temporarily halt production at its facility, retaining only a small workforce, noting that zinc prices are near a seven-year low. * * * The Troubled Company Reporter, on Jan. 22, 2016, reported that Standard & Poor's Ratings Services said it lowered its corporate credit rating on Pittsburgh-based Horsehead Holding Corp. to 'SD' from 'CCC'. Concurrently, S&P affirmed the 'CCC' issue-level rating on the company's senior secured notes. The recovery rating on the notes remains '4', which continue to reflect S&P's expectation for average (30%-50%; lower end of the range) recovery in the event of a conventional default. The TCR, on Jan. 1, 2016, reported that Standard & Poor's Ratings Services said that it has downgraded Pittsburgh-based zinc producer Horsehead Holding Corp. to 'CCC' from 'B-'. The outlook is negative. At the same time, S&P lowered its issue-level rating on the company's senior secured notes to 'CCC' from 'B-'. The '4' recovery rating on the debt is unchanged, indicating S&P's expectation of average (30%-50%; lower half of the range) recovery in the event of a payment default. HORSEHEAD HOLDING: Moody's Lowers CFR to Ca, Outlook Negative ------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Horsehead Holding Corp., including its corporate family rating to Ca from Caa2, probability of default rating (PDR) to Ca-PD from Caa2-PD and senior secured notes to Ca(LGD3) from Caa1(LGD3). The company's Speculative Grade Liquidity rating remains unchanged at SGL-4. The outlook is negative. RATINGS RATIONALE The downgrade follows the company's announcement that it decided to temporarily idle its zinc smelter in Mooresboro, North Carolina, as well as its previous announcements that it had entered into forbearance agreements with respect to its credit agreements, under which its creditors had agreed to temporarily forebear from their rights related to events of default under the agreements. The agreements require, among other things, for all cash held in third party bank accounts to be transferred under the control of the company's creditors, and expire on February 1, 2016 at the latest. The company had also missed the interest payment under its convertible notes, with the thirty day grace period expiring on Feb. 3, 2016. The ratings and negative outlook reflect our expectation that there is a high likelihood of the company initiating debt restructuring involving significant losses to the creditors. The company's performance has deteriorated due to the continued delays at the company's new zinc production facility. The company generated negative EBITDA of $25 million for the nine months through Sept. 30, 2015, (including Moody's standard adjustments). The Speculative Grade Liquidity rating of SGL-4 continues to reflect the company's weak and deteriorating liquidity position. Horsehead Holding Corp. through its subsidiary Horsehead Corporation, is a producer of zinc metal and a recycler of other metals recovered through its high temperature metals recovery facilities. The company also recycles electric arc furnace dust, a hazardous waste generated by steel minimills. Horsehead also has two other business segments: Zochem, a producer of zinc oxide, and The International Metals Reclamation Company Llc. (INMETCO) which processes a variety of nickel-bearing waste material. Headquartered in Pittsburgh, Pennsylvania, Horsehead generated $439 million of revenues for the twelve months ending Sept. 30, 2015. The principal methodology used in these ratings was Global Mining Industry published in August 2014. ILYA IGDALEV: Justices Urged to Ax Award Over Settlement Clawback ----------------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reported that a car wholesaler pressed the New Jersey Supreme Court on Jan. 19, 2016, to topple decisions holding him responsible for funds he paid in an underlying settlement that were clawed back from Globe Motor Co. and The Margolis Law Firm LLC as part of a third party's bankruptcy. Attorney Christopher J. Koller represented vehicle wholesaler Ilya Igdalev and ex-wife Julia Igdalev at a hearing on Jan. 19. LAMAR MEDIA: Moody's Assigns Ba1 Rating on New $400MM Sr. Notes --------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Lamar Media Corporation's $400 million senior note offering due in 2026. All other ratings, including Lamar Advertising Company's (Lamar) Ba2 corporate family rating are unchanged. The outlook is stable. The expected use of proceeds is the repayment of the $300 million senior secured term loan A-1 and a partial repayment of the $160 million drawn from the revolving credit facility which was used to fund the Jan. 7, 2016, acquisition of assets from Clear Channel Outdoor Holdings, Inc. for $459 million. Pro-forma for the transaction, leverage increased to 4.1x from 3.5x as of Q3 2015 (excluding Moody's standard adjustments for lease expenses) which is at the high end of the leverage level for the existing Ba2 CFR. A summary of Moody's rating actions are: Issuer: Lamar Media Corporation $400 million new senior note due 2026 assigned a Ba1 (LGD3) ratings RATINGS RATIONALE Lamar's Ba2 CFR reflects its market presence as one of the largest outdoor advertising companies in the US, the high-margin business model, and strong free cash flow generation prior to dividend payments. The rating also reflects that the company operates as a REIT which requires distributions of 90% of taxable income to shareholders. After several years of directing free cash flow to debt reduction, the company has been more acquisitive and there is the potential for future debt financed acquisitions. Significant debt reduction in 2010, 2011 and 2013 as well as continuing EBITDA growth has pushed leverage down from 6.2x in 2009 to 4.1x pro-forma for the transaction as of Q3 2015. The ability to transfer traditional static billboards to digital provides growth opportunities as well as the potential for higher EBITDA margins. However, as the company transitions more static boards to digital, the company will be more sensitive to changes in advertising demand given the shorter term contract period compared to static boards. This may lead to more volatility in earnings than what was experienced historically when its assets were more likely to be subject to longer term contracts. Compared to other traditional media outlets, the outdoor advertising industry is not likely to suffer from disintermediation and benefits from restrictions on the supply of billboards which help support advertising rates and high asset valuations. As a pure play outdoor advertising company, Lamar provides mainly local advertising and derives revenues from a diversified customer base, with no single advertiser accounting for more than 1% of the company's billboard advertising revenue. The high advertising exposure means that the business is subject to above average movements in revenue during consumer-led downturns in the economy. However, Lamar's EBITDA margin of over 40% (excluding Moody's standard lease adjustments) and relatively low proportion of maintenance capex as compared to total capex provide sufficient headroom to weather cyclical setbacks. The rating also considers the company's demonstrated discipline in managing operating expenses and capital expenditures, which resulted in strong free cash flow generation during the economic downturn in 2008 and 2009. The speculative grade liquidity rating of SGL-2 reflects Moody's expectation that Lamar will maintain a good liquidity position over the next year. Pro-forma for the transaction, the cash balance is projected to be $20 million and the $400 million revolver due in February 2019 is expected to have approximately $200 million drawn. Moody's projects the revolver balance will decline by the end of 2016. Moody's expects the company to spend approximately $100 million on capex during 2015, in line with $108 million in 2014, and payout $260 to $265 million in dividends in 2015. Capex is anticipated to be in the same range in 2016, but dividends are expected to rise modestly in 2016 given the positive impact to free cash flow of the acquisition. While the company does have required amortization on the $300 million term loan A, there are no required excess free cash flow payments. Lamar's net senior covenant ratio is 1.5x as of Q3 2015 compared to a 3.5x covenant level and we expect the company to maintain a significant cushion of compliance. The company also has the ability to issue $500 million of Incremental term loans. The rating outlook is stable due to Moody's expectation of revenue and EBITDA growth in the low to mid single digits as well as a reduction of the outstanding revolver balance to lead to a reduction in leverage below 4x over the next 12 months that would better position the company at the existing Ba2 CFR. The required distribution of 90% of taxable income from a REIT qualified subsidiary limits upward rating pressure. However, an upgrade could occur if leverage was maintained below 2.5x on a sustained basis (excluding Moody's standard lease adjustments) with confidence that the board of directors intended to maintain leverage below this level. Also required would be a balanced financial policy between debt and equity holders, free cash flow after distributions of 10% of debt, and a good liquidity position. A ratings downgrade would occur if leverage was maintained above 4x (excluding Moody's standard lease adjustment) due to a debt financed acquisition or material decline in advertising spend. Failure to maintain an adequate liquidity position or elevated risk of a covenant violation could also lead to negative rating pressure. Additional senior secured debt issuance has the potential to lead to a downgrade of the existing senior and subordinate debt ratings. The principal methodology used in this rating was Global Broadcast and Advertising Related Industries published in May 2012. Lamar Advertising Company, with its headquarters in Baton Rouge, Louisiana, is one of the leading owner and operators of advertising structures in the U.S. and Canada. The company generated revenues of approximately $1.3 billion in the LTM period ending Q3 2015. LEHMAN BROTHERS: Judge Pans Trade's Bid to Weigh in on Swap Suit ---------------------------------------------------------------- Jonathan Randles at Bankruptcy Law360 reported that a New York federal judge bristled on Jan. 21, 2016, at the financial industry's attempt to influence a lawsuit filed by a Lehman Brothers subsidiary over billions of dollars it says it lost on soured credit default swap agreements, saying trade groups were attempting to muddle legal questions with their view on how derivative markets should function. U.S. Bankruptcy Judge Shelley Chapman indicated at a court hearing that she would likely not give two financial industry trade groups permission to file an amicus brief in support of a motion. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. * * * In October 2015, Lehman made its eighth distribution to creditors, bringing Lehman's total distributions to unsecured creditors to approximately $105.4 billion including (1) $77.2 billion of payments on account of third-party claims, which includes non-controlled affiliate claims and (2) $28.2 billion of payments among the Lehman Debtors and their controlled affiliates. As of September 2015, the trustee in charge of LBI has returned around $7.65 billion to the defunct brokerage's unsecured creditors, a recovery of about 35 cents on the dollar. LES GRANDS TRAVAUX: Claims Bar Date Set for March 18 ---------------------------------------------------- The Quebec Superior Court, District of Montreal, ordered the court-appointed monitor, Raymond Chabot Inc., to send proof of claim forms to the known creditors of Les Grands Travaux Soter Inc., Les Constructions Marc Lussier Inc. and 9063-0757 Quebec Inc. Any person who has received a proof of claim form and who believes that it holds a claim against the Debtor companies which arose on or before Dec. 20, 2015, must send a duly completed proof of claim to the monitor no later than 5:00 p.m. (EDT) on March 18, 206. A full-text copy of the proof of claim is available for free at http://is.gd/KV5zLv The monitor can be reached at: Raymond Chabot Inc. Attn: Philippe Daneau 600 Rue de la Gauchetiere O, Bureau 2000 Montreal QC H3B 4L8 Tel: 514-954-4638 Fax: 514-878-2100 Email: daneau.philippe@rcgt.com Les Grands Travaux Soter Inc. is located at 4085 Saint-Elzear Road East, City of Lava, Quebec, Canada. LYONDELL CHEMICAL: Court Denies Currier's Bid to Dismiss Suit ------------------------------------------------------------- In an Amended Complaint, Edward S. Weisfelner, the trustee of the LB Litigation Trust, asserts a total of 21 claims against defendants Leonard Blavatnik, et al. The 21 claims variously charge breaches of fiduciary duty; the aiding and abetting of those alleged breaches; intentional and constructive fraudulent conveyances, unlawful dividends, and a host of additional bases for recovery under state law, the Bankruptcy Code, and the laws of Luxembourg, under which several of the Basell entities were organized. The Complaint also seeks to equitably subordinate defendants' claims that might otherwise be allowed. The Trustee's complaint, in turn, engendered a large number of motions to dismiss. This is one of several opinions ruling on those motions. Here the Court considers the motion of Diane Currier, as Executor of the Estate of Richard Floor, to dismiss the claims asserted against the estate. The Trustee opposes Currier's motion to dismiss and moves, by separate motion, to amend the caption or in the alternative to extend the time for substitution. The Court determines that the Trustee's motion to amend the caption was filed about 23 weeks late. But the Court further determines that the reasons underlying that -- delays by Floor's probate court in docketing Currier's appointment; inaccurate information provided to the Trustee by the probate court; and the withholding of information as to Currier's appointment by counsel for Currier and Floor -- provide more than sufficient basis for finding excusable neglect. In a Decision and Order dated January 4, 2016, which is available at http://is.gd/LdRFxMfrom Leagle.com, Judge Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York: (1) granted the Trustee's motion to extend time to move to amend the caption and the caption is hereby amended; (2) denied Currier's motions to dismiss; and (3) the claims asserted in the Complaint against Currier, as the executor to the Floor Estate, remain alive except insofar as they have been dismissed by reason of the Court's other rulings. The adversary proceeding is EDWARD S. WEISFELNER, AS LITIGATION TRUSTEE OF THE LB LITIGATION TRUST, Plaintiff, v. LEONARD BLAVATNIK, et al., Defendants, Adversary Proceeding No. 09-1375 (REG)(Bankr. S.D.N.Y.). The bankruptcy case is In re: LYONDELL CHEMICAL COMPANY, et al., Chapter 11 Debtors, No. 09-10023 (REG) (Jointly Administered), (Bankr. S.D.N.Y.). Edward S. Weisfelner, as Litigation Trustee of the LB Litigation Trust, Plaintiff, is represented by Sigmund S. Wissner-Gross, Esq. -- swissnergross@brownrudnick.com -- Brown Rudnick, LLP. Blavatnik, Defendant, is represented by Nicholas Calamari, Esq. -- 1/0 Capital, LLC, Benjamin Finestone, Esq. -- benjaminfinestone@quinnemanuel.com -- Quinn Emanuel Urquhart & Sullivan, LLP, Whitman L. Holt, Esq. -- wholt@ktbslaw.com -- Klee, Tuchin, Bogdanoff & Stern LLP, Susheel Kirpalani, Esq. -- susheelkirpalani@quinnemanuel.com -- Quinn Emanuel Urquhart & Sullivan LLP, Rex Lee, Esq. -- rex.lee@quinnemanuel.com -- Quinn Emanuel Urquhart Oliver & Hedges, LLP, Frances S. Lewis, Esq. -- frances.lewis@quinnemanuel.com -- Quinn Emanuel Urquhart & Sullivan, LLP, Andrew J. Rossman, Esq. -- andrew.rossman@quinnemanuel.com -- Quinn Emanuel Urquhart & Sullivan, LLP, Alex J.B. Rossmiller, Esq. -- alex.rossmiller@quinnemanuel.com -- Quinn Emanuel Urquhart & Sullivan, Sarah L Rubin, Esq. -- Barrasso Usdin Kupperman Freeman & Sarver, L.L.C., Katherine Scherling, Esq. -- katherine.scherling@quinnemanuel.com -- Quinn Emanuel Urquhart & Sullivan, LLP, Richard I. Werder, Esq. -- richard.werder@quinnemanuel.com -- Quinn Emanuel Urquhart & Sullivan LLP. Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. Luxembourg-based Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. Len Blavatnik's Access Industries owned the Company prior to its bankruptcy filing. On Jan. 6, 2009, LyondellBasell Industries' U.S. operations, led by Lyondell Chemical Co., and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities filed for Chapter 11. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 protection on April 24, 2009. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, served as the Debtors' bankruptcy counsel. Evercore Partners served as financial advisors, and Alix Partners and its subsidiary AP Services LLC, served as restructuring advisors. AlixPartners' Kevin M. McShea acted as the Debtors' Chief Restructuring Officer. Clifford Chance LLP served as restructuring advisors to the European entities. LyondellBasell emerged from Chapter 11 bankruptcy protection in May 2010, with a plan that provides the Company with US$3 billion of opening liquidity. A new parent company, LyondellBasell Industries N.V., incorporated in the Netherlands, is the successor of the former parent company, LyondellBasell Industries AF S.C.A., a Luxembourg company that is no longer part of LyondellBasell. LyondellBasell Industries N.V. owns and operates substantially the same businesses as the previous parent company, including subsidiaries that were not involved in the bankruptcy cases. LyondellBasell's corporate seat is Rotterdam, Netherlands, with administrative offices in Houston and Rotterdam. MAGNA ENTERTAINMENT: 2010 $13.8MM Racetrack Valuation Affirmed -------------------------------------------------------------- Board of Education of Warrensville Heights City School District appeals from a decision of the Board of Tax Appeals finding the tax year 2010 value of Thistledown Racetrack in Cuyahoga County to be $13,800,000. The BTA determined that the purchase of the racetrack for $43,000,000 at a bankruptcy sale six months after the tax-lien date did not establish the true value of the property, because sales conducted under supervision of a court order are forced sales, which are not indicative of true value. In a Decision dated January 13, 2016, which is available at http://is.gd/6BTzrHfrom Leagle.com, the Supreme Court of Ohio affirms the decision of the BTA as the 2010 sale did not establish the true value of Thistledown Racetrack, and the evidence presented supports its finding that Thistledown Racetrack was worth $13,800,000 as of the tax-lien date. The case is Board of Education of the Warrensville Heights City School District, Appellant, v. Cuyahoga County Board of Revision et al., Appellees, No. 2014-0516, 2015-Ohio-78. About Magna Entertainment Corp. Based in Aurora, Ontario, Magna Entertainment Corp. is North America's largest owner and operator of horse racetracks based on revenue. The Company develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Following its failure to meet obligations to lenders led by PNC Bank, National Association, and Wells Fargo Bank, National Association, and controlling shareholder MI Developments Inc.'s decision not to provide further financial backing, Magna Entertainment Corp. and 24 affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 09-10720) on March 5, 2009. Marcia L. Goldstein, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, served as the Debtors' bankruptcy counsel. Mark D. Collins, Esq., L. Katherine Good, Esq., and Maris J. Finnegan, Esq., at Richards, Layton & Finger, P.A., served as the Debtors' local counsel. Miller Buckfire & Co. LLC acted as the Debtors' investment banker and financial advisor. Kurtzman Carson Consultants LLC served as the claims and noticing agent for the Debtors. Magna Entertainment Corp. had total assets of $1.054 billion and total liabilities of $947.3 million based on unaudited consolidated financial statements as of Dec. 31, 2008. On April 29, 2010, the Bankruptcy Court confirmed the Second Modified Third Amended Joint Plan of Magna Entertainment Corp., its affiliated Debtors, the official committee of unsecured creditors, MI Developments Inc., and MI Developments US Financing. The Debtors emerged from Bankruptcy on April 30, 2010. MILAGRO OIL: Judge Sustains Objection to Royalty Claims ------------------------------------------------------- U.S. Bankruptcy Judge Kevin Gross signed off on an order sustaining the objection of MWO Holdings LLC to more than 60 claims. MWO Holdings, formerly known as Milagro Oil & Gas Inc., objected to the claims, arguing that they had already been paid in full for all purposes, including any distribution under its Chapter 11 plan of reorganization. The company wanted the claims modified or liquidated. Each of the claims is a claim for royalties or related amounts owed pursuant to certain oil and gas leases for the period prior to MWO Holdings' bankruptcy filing, according to court papers. Judge Gross will hold a hearing on Feb. 10 to consider the company's objection to claims filed by Palo Blanco Ltd. and 20 other creditors. A copy of the court order is available without charge at http://is.gd/hRNQYR MWO Holdings and its affiliates officially emerged from Chapter 11 protection last year. The companies' restructuring plan became effective on Oct. 30, 2015, court filings show. About Milagro Oil Based in Houston, Texas, Milagro Oil & Gas, Inc., is an independent oil and gas company primarily engaged in the acquisition, exploration, exploitation, development, production and sale of oil and natural gas reserves. Milagro's historic geographic focus has been along the onshore Gulf Coast area, primarily in Texas, Louisiana and Mississippi. Milagro has 1,200 wells in South Texas, along the Gulf Coast and in Louisiana. As of March 31, 2015, the book value of Milagro's total assets and liabilities was approximately $390 million and $468 million, respectively. On July 15, 2015, Milagro Oil & Gas, its parent Milagro Holdings, LLC, and four affiliated entities each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The cases are pending before the Honorable Kevin Gross and are jointly administered under In re Milagro Holdings, Case No. 15-11520. The Debtors tapped (i) Porter Hedges LLP as general counsel; (ii) Young Conaway Stargatt & Taylor, LLP, as local counsel; (iii) Zolfo Cooper, LLC, as restructuring advisors; and (iv) Prime Clerk LLC as claims and noticing agent. Noteholders that are parties to the RSA have tapped (i) Akin Gump Strauss Hauer & Feld LLP, as legal counsel, (ii) Richards, Layton & Finger, P.A., as Delaware legal counsel, and (iii) Blackstone Advisory Partners L.P., as financial advisor. The first lien agent, TPG Specialty Lending, Inc., is represented by, Schulte Roth & Zabel LLP. Equity holder ACON Funds Management is represented by Hogan Lovells US LLP. White Oak is represented by Locke Lord LLP. * * * Judge Kevin Gross on Oct. 8, 2015, confirmed the Debtors' Amended Joint Plan of Reorganization. MILLENNIUM LAB: Judge Certifies Direct Appeal of Plan Approval -------------------------------------------------------------- Bankruptcy Judge Laurie Selber Silverstein granted the emergency motion of the Opt-Out Lenders to certify a direct appeal to the United States Court of Appeals for the Third Circuit from the Bankruptcy Court's order confirming the Joint Chapter 11 Plan of Reorganization of Millennium Lab Holdings II, LLC, et al. "While the Opt-Out Lenders assert multiple grounds for direct certification, the crux of their argument is that my approval of nonconsensual third party releases is contrary to at least one other decision in this district and involves a matter of "public importance," which warrants bypassing the normal appeals process. While I do not believe that any of the other criteria for direct certification are met, or any one other five issues raised by the Opt-Out Lenders meet the statutory criteria, I agree that the Confirmation Order involves one question of law requiring resolution of conflicting decisions. Accordingly, must follow the mandate of the statute and certify the issue for direct appeal to Third Circuit," Judge Silverstein said in her Memorandum Opinion granting the Opt-Out Lenders' motion. The Opt-Out Lenders are funds associated with Voya Investment Management Co.. They sued Millennium's owners, founder James Slattery and private-equity firm TA Associates Inc., alleging they failed to warn lenders of a Justice Department investigation into the company's practices. A copy of the Memorandum Opinion signed Jan. 12, 2016, is available for free at: http://bankrupt.com/misc/Millennium_L_259_Memo_Direct_Appeal.pdf Plan Approval Appeal On Dec. 10, 2015, Judge Silverstein held a hearing with respect to the sufficiency of the Disclosure Statement as well as confirmation of the Plan. The Opt-Out Lenders did not object to the settlements contained in the Plan, but objected to the third party releases. They asserted (and continue to assert) that they have meritorious claims against the Debtors' former equity holders and two corporate executives that are beneficiaries of third party releases, namely MLH, TA, TA Associates Management, L.P., James Slattery, and Howard Appel. These claims are set forth in a complaint filed on Dec. 9, 2015, in the U.S. District Court for the District of Delaware, styled ISL Loan Trust v. TA Associates Management, L.P., No. 15-01138 (GMS)(D. Del. Dec. 9, 2015) (the "Complaint"). For the reasons set forth in her bench ruling of Dec. 11, 2015, Judge Silverstein confirmed the Plan and overruled the Opt-Out Lenders' objection. On Dec. 11, 2015, the Opt-Out Lenders filed their: (i) Notice of Appeal; (ii) Motion of the Opt-Out Lenders for Stay Pending Appeal of the Confirmation Order; and (iii) the Certification Motion. The judge, sua sponte, stayed the effect of the Confirmation Order pending the conclusion of the hearing on the Stay Motion. For the reasons set forth in her Dec. 18, 2015 bench ruling, Judge Silverstein denied the Stay Motion and, after the Op-Out Lenders stated no opposition to the Debtors' proposed form of order, signed an order vacating the temporary stay. The Opt-Out Lenders did not appeal the order denying the Stay Motion. The Debtors filed a notice of the occurrence of the effective date of the Plan on Dec. 18. On Dec. 28, 2015, the Opt-Out Lenders filed their Designation of Record and Statement of Issues on Appeal. Voya and its affiliated funds and accounts state these issues on appeal: 1. Can Bankruptcy Courts exercise "related to" jurisdiction over a non-debtor's direct claims against other non-debtors for fraud and other willful misconduct on the basis of contractual indemnification agreements by the debtor of the other non-debtors that expressly and/or as a matter of law preclude indemnification for acts of fraud, wilfull misconduct, and violations of the Racketeer Influenced and Corrupt Organization (RICO) Act? 2. Do Bankruptcy Courts have the authority to release a non-debtor's direct claims against other non-debtors for fraud and other willful misconduct without the consent of the releasing non-debtor? 3. Assuming arguendo that Bankruptcy Courts do have authority to release a non-debtor's direct claims against other non-debtors for fraud and other willful misconduct without the consent of the releasing non-debtor, what standard of law governs the approval of such releases where no consideration is paid for the release? 4. Can services performed by a debtor's directors, officers, and employees in connection with the debtor's reorganization constitute a financial contribution to the debtor's estate? 5. Can a financial contribution made by a non-debtor to a debtor's estate be a financial contribution also made "on behalf of" other, and otherwise non-contributing, nondebtors? 6. Assuming arguendo that the Bankruptcy Court (a) properly determined that it had subject-matter jurisdiction and legal authority to release the non-debtor Opt-Out Lenders' direct claims against other non-debtors for fraud and other willful misconduct without the Opt-Out Lenders' consent and (b) applied the correct legal standard to its review of such releases, did the Bankruptcy Court err in concluding that the facts of this case warranted such a release? Judge Silverstein held that Issue 2 meets the criteria for certification. The Opt-Out Lenders argued that the Issue meets each of the four criteria for certification while the Debtors argue it meets none of the criteria. The judge ruled that: * Whether the Confirmation Order involves a question of law as to which there is no controlling decision of the Third Circuit or the Supreme Court of the United States. The Opt-Out Lenders argue, and she concurs, that Issue 2 states an issue of law, particularly if one ignores the reference to "fraud and willful misconduct." * Whether the judgment, order or decree involves a question of law requiring resolution of conflicting decisions. Judge Silverstein acknowledged that her decision is in conflict with the decision in In re Washington Mutual, Inc., 442 B.R. 314 (Bankr. D. Del. 2011). The judge said that her interpretation of what is meant by the hallmarks of Gillman vs. Continental Airlines (In re Continental Airlines), 203 F.3d 203, 214 (3d Cir.2000) -- fairness and necessity to the reorganization -- differs from that of the Washington Mutual Court. Counsel to the Opt-Out Lenders: LOWENSTEIN SANDLER LLP Sheila Sadighi Sharon L. Levine Andrew Behlmann 65 Livingston Avenue Roseland, New Jersey 07068 Tel: 973-597-2500 Fax: 973-597-2400 E-mail: slevine@lowenstein.com ssadighi@lowenstein.com abehlmann@lowenstein.com Delaware Counsel to the Opt-Out Lenders: WHITEFORD, TAYLOR & PRESTON LLC Christopher M. Samis L. Katherine Good The Renaissance Centre 405 North King Street, Suite 500 Wilmington, Delaware 19801 Tel: 302-353-4144 Fax: 302-661-7950 E-mail: csamis@wtplaw.com kgood@wtplaw.com The Chapter 11 Plan Millennium Lab Holdings II, LLC, and two of its affiliates filed their joint prepackaged plan of reorganization which provides for payment of their obligations under their settlement agreements with the United States of America as well as a financial restructuring that will significantly reduce their funded indebtedness and place the Debtors in a stronger financial position for the future. The Plan was overwhelmingly accepted by the single impaired class that is entitled to vote with approximately 99% of the outstanding claims voting and more than 93% of those claims who voted voting in favor. In consideration for the cancellation of up to all of the outstanding obligations under that certain Credit Agreement, dated as of April 16, 2014, among Holdings, Millennium, Wilmington Savings Fund Society, FSB (as successor administrative agent to JPMorgan Chase Bank, N.A., the "Administrative Agent"), the Company proposes to issue to each Prepetition Lender that consents to an out-of-court restructuring transaction a pro rata share of and interest in (x) 100% of the post-restructuring equity interests in Millennium, (y) a new secured Term Loan in the aggregate principal amount of $600 million and (z) beneficial interests in certain trusts to be formed to hold certain claims and causes of action. On Oct. 16, 2015, the Company entered into settlements that resolves, among others, a complaint by the DOJ, on behalf of the USA, filed a complaint against the Company asserting claims for violation of the Stark law and the Anti-Kickback Statute and violation of the False Claims Act, and an overpayment deterination by the Center for Medicare and Medicaid Services. On Oct. 16, 2015, the Company entered into the USA Settlement Agreements with the USA Settlement Parties and various qui tam relators. The USA Settlement Agreements resolve certain issues between the USA Settlement Parties and the Company, including, among other matters, the USA Claims and the overpayment, and included finalization of the CIA. The USA Settlement Agreements require the payment of $256 million to the USA Settlement Parties to settle the USA Claims and the overpayment. Pursuant to the USA Settlement Agreements and the RSA, the $256 million payment will be funded through (a) the irrevocable Initial USA Settlement Deposit of $50 million made by the Company (with a guarantee provided by MLH and TA), which was funded in part on Oct. 16, 2015, and in part on Oct. 19, 2015, and (b) a $206 million payment, including interest, by MLH and TA to be paid to or for the benefit of Millennium, which will be paid to the USA in full and final satisfaction of Millennium's monetary obligations under the USA Settlement Agreements. In order to fund the payments under the USA Settlement Agreements and settlement of potential claims between the Participating Lenders and the Company's primary equity holders, MLH and TA, the parties negotiated and entered into the Restructuring Support Agreement on Oct. 15, 2015. The RSA contemplates that the Restructuring will be effectuated through either the Out-of-Court Transaction or, alternatively, the Plan. The Plan will: (a) implement a settlement among the Debtors, the Prepetition Lenders, MLH, and TA; (b) effectuate the USA Settlement; (c) effect a recapitalization of the Company's balance sheet on a consensual basis; and (d) issue 100% of the equity of Reorganized Millennium to the Prepetition Lenders. Pursuant to the Plan, among other things, the Existing Credit Agreement Claims would be cancelled and the Debtors would issue to each Prepetition Lender its pro rata share of the Consideration. All general unsecured claims (other than the Government Claims and the MLH Tax Note Claims) will be reinstated or paid in full in cash in the allowed amount of the claim or in the ordinary course as such claims become due, as applicable. The Ad Hoc Consortium of Secured Lenders supported confirmation of the Plan, citing that that the Plan represents the absolute best deal possible under the circumstances. A black-lined copy of the Amended Prepackaged Plan of Reorganization filed Dec. 9, 2015, is available for free at: http://bankrupt.com/misc/Millennium_L_182_Am_Plan.pdf Copies of the Plan Supplements filed by the Debtors are available for free at: http://bankrupt.com/misc/Millennium_L_114_Plan_Supplement.pdf http://bankrupt.com/misc/Millennium_L_115_2nd_Plan_Supplement.pdf http://bankrupt.com/misc/Millennium_L_180_3rd_Plan_Supplement.pdf About Millennium Lab Millennium Lab Holdings II, LLC, Millennium Health, LLC and Rxante, LLC, providers of laboratory-based diagnostic testing focused on drugs of abuse and clinical medication monitoring, filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 15-12284, 15-12285 and 15-12286, respectively) on Nov. 10, 2015. The Debtors estimated assets in the range of $100 million to $500 million and liabilities of more than $1 billion. Judge Laurie Selber Silverstein was assigned the case. The Debtors engaged Skadden, Arps, Slate, Meagher & Flom LLP as counsel; Young Conaway Stargatt & Taylor, LLP as conflicts counsel; Lazard Freres & Co., LLC, as investment banker; Alvarez & Marsal as financial advisor; and Prime Clerk LLC as claims and noticing agent. On Nov. 12, 2015, the Court entered an order granting joint administration of the Chapter 11 cases. The U.S. Trustee announced Nov. 24, 2015, that an official unsecured creditors committee was formed due to the insufficient response to the United States Trustee communication/contact for service on the committee. MILLENNIUM LAB: Prepack Plan Declared Effective on Dec. 18 ---------------------------------------------------------- Millennium Lab Holdings II, LLC, et al., announced that on Dec. 18, 2015, the effective date of their Amended Prepackaged Joint Plan of Reorganization occurred. The Delaware Bankruptcy Court on Dec. 10, 2015, held a hearing to consider confirmation of the Plan. On Dec. 14, 2015, Bankruptcy Judge Laurie Selber Silverstein entered an order confirming the Plan. A copy of the Plan Confirmation Order is available for free at: http://bankrupt.com/misc/Millennium_L_195_Plan_Conf_Order.pdf The judge also entered an order authorizing the Debtors to assume the USA Settlement Agreements and the Restructuring Support Agreement. A copy of the order is available for free at: http://bankrupt.com/misc/Millennium_L_200_Order_Assume_RSA.pdf On the same day, on Dec. 14, 2016, the Opt-Out Lenders (Voya and its affiliated funds and accounts) filed a notice of appeal from the Confirmation Order, and an emergency motion for entry of an order granting a stay pending appeal of the Plan Confirmation Order. They argued that each of the factors used by the Third Circuit in determining whether to grant a stay pending appeal militates in favor of staying the Confirmation Order. On Dec. 16, 2015, the Debtors filed an objection to the Opt-Out Lenders' Motion for stay pending appeal of the Plan Confirmation Order. The Ad Hoc Consortium of Secured Lenders also filed an opposition, asserting that Voya should be required to post a substantial bond as a condition to the granting of any relief sought in the Stay Motion. The Debtors noted that among other things, that evidentiary record establishes the following incontrovertible facts: * Without the settlement with the equity holders, including the third-party releases, Millennium does not have sufficient funds to satisfy the government settlement. * Final payment (more than $200 million) is due on the government settlement in 14 days (a deadline mandated by the government, not the Debtors or the released parties). * If the government settlement is not funded in those 14 days, the Company's Medicare billing privileges will be revoked, the Debtors will have no choice but to liquidate, and going concern value (more than $900 million) will evaporate, leaving only a tangle of complex litigation. * All of the impaired creditors but one -- Voya -- have determined that this is not the way to proceed. On Dec. 18, 2015, Judge Silverstein entered an order denying the Opt-Out Lenders' Motion for stay pending appeal of the order confirming the Plan. A copy of the Order is available for free at: http://bankrupt.com/misc/Millennium_L_227_Ord_Deny_Plan_Stay.pdf The Debtors on Dec. 18, 2015, announced that the Effective Date of the Plan occurred. All conditions precedent to the Effective Date set forth in section VIII.B of the Plan have been satisfied or waived. All final requests for payment of Professional Fee Claims (the "Final Fee Applications") must be filed no later than 45 days after the Effective Date. Objections, if any, to Final Fee Applications of such Professionals must be filed and served on the Reorganized Debtors and on the requesting Professional by the later of (a) 60 days after the Effective Date or (b) 30 days after the filing of the applicable Final Fee Application. Counsel for Debtors and Debtors in Possession: SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Anthony W. Clark, Esq. Jason M. Liberi, Esq. One Rodney Square P.O. Box 636 Wilmington, DE 19899-0636 Telephone: (302) 651-3000 - and - Kenneth S. Ziman, Esq. Raquelle L. Kaye, Esq. Four Times Square New York, New York 10036-6522 Telephone: (212) 735-3000 - and - Felicia Gerber Perlman, Esq. Matthew N. Kriegel, Esq. 155 N. Wacker Drive Chicago, Illinois 60606-1720 Telephone: (312) 407-0700 Counsel to the Ad Hoc Consortium of Secured Lenders: WOMBLE CARLYLE SANDRIDGE & RICE, LLP Steven K. Kortanek, Esq. Thomas M. Horan, Esq. Ericka F. Johnson, Esq. 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330) E-mail: skortanek@wcsr.com thoran@wcsr.com erjohnson@wcsr.com - and - BROWN RUDNICK LLP Robert J. Stark, Esq. Sigmund S. Wissner-Gross, Esq. Jacob T. Beiswenger, Esq. 7 Times Square New York, NY 10036 Telephone: (212) 209-4800 Facsimile: (212) 209-4801 E-mail: rstark@brownrudnick.com swissnergross@brownrudnick.com jbeiswenger@brownrudnick.com - and - Steven B. Levine, Esq. One Financial Center Boston, MA 02111 Telephone: (617) 856-8200 Facsimile: (617) 856-8201 E-mail: slevine@brownrudnick.com The Chapter 11 Plan Millennium Lab Holdings II, LLC, and two of its affiliates filed their joint prepackaged plan of reorganization which provides for payment of their obligations under their settlement agreements with the United States of America as well as a financial restructuring that will significantly reduce their funded indebtedness and place the Debtors in a stronger financial position for the future. The Plan was overwhelmingly accepted by the single impaired class that is entitled to vote with approximately 99% of the outstanding claims voting and more than 93% of those claims who voted voting in favor. In consideration for the cancellation of up to all of the outstanding obligations under that certain Credit Agreement, dated as of April 16, 2014, among Holdings, Millennium, Wilmington Savings Fund Society, FSB (as successor administrative agent to JPMorgan Chase Bank, N.A., the "Administrative Agent"), the Company proposes to issue to each Prepetition Lender that consents to an out-of-court restructuring transaction a pro rata share of and interest in (x) 100% of the post-restructuring equity interests in Millennium, (y) a new secured Term Loan in the aggregate principal amount of $600 million and (z) beneficial interests in certain trusts to be formed to hold certain claims and causes of action. On Oct. 16, 2015, the Company entered into settlements that resolves, among others, a complaint by the DOJ, on behalf of the USA, filed a complaint against the Company asserting claims for violation of the Stark law and the Anti-Kickback Statute and violation of the False Claims Act, and an overpayment determination by the Center for Medicare and Medicaid Services. On Oct. 16, 2015, the Company entered into the USA Settlement Agreements with the USA Settlement Parties and various qui tam relators. The USA Settlement Agreements resolve certain issues between the USA Settlement Parties and the Company, including, among other matters, the USA Claims and the overpayment, and included finalization of the CIA. The USA Settlement Agreements require the payment of $256 million to the USA Settlement Parties to settle the USA Claims and the overpayment. Pursuant to the USA Settlement Agreements and the RSA, the $256 million payment will be funded through (a) the irrevocable Initial USA Settlement Deposit of $50 million made by the Company (with a guarantee provided by MLH and TA), which was funded in part on Oct. 16, 2015, and in part on Oct. 19, 2015, and (b) a $206 million payment, including interest, by MLH and TA to be paid to or for the benefit of Millennium, which will be paid to the USA in full and final satisfaction of Millennium's monetary obligations under the USA Settlement Agreements. In order to fund the payments under the USA Settlement Agreements and settlement of potential claims between the Participating Lenders and the Company's primary equity holders, MLH and TA, the parties negotiated and entered into the Restructuring Support Agreement on Oct. 15, 2015. The RSA contemplates that the Restructuring will be effectuated through either the Out-of-Court Transaction or, alternatively, the Plan. The Plan will: (a) implement a settlement among the Debtors, the Prepetition Lenders, MLH, and TA; (b) effectuate the USA Settlement; (c) effect a recapitalization of the Company's balance sheet on a consensual basis; and (d) issue 100% of the equity of Reorganized Millennium to the Prepetition Lenders. Pursuant to the Plan, among other things, the Existing Credit Agreement Claims would be cancelled and the Debtors would issue to each Prepetition Lender its pro rata share of the Consideration. All general unsecured claims (other than the Government Claims and the MLH Tax Note Claims) will be reinstated or paid in full in cash in the allowed amount of the claim or in the ordinary course as such claims become due, as applicable. The Ad Hoc Consortium of Secured Lenders supported confirmation of the Plan, citing that that the Plan represents the absolute best deal possible under the circumstances. A black-lined copy of the Amended Prepackaged Plan of Reorganization filed Dec. 9, 2015, is available for free at: http://bankrupt.com/misc/Millennium_L_182_Am_Plan.pdf Copies of the Plan Supplements filed by the Debtors are available for free at: http://bankrupt.com/misc/Millennium_L_114_Plan_Supplement.pdf http://bankrupt.com/misc/Millennium_L_115_2nd_Plan_Supplement.pdf http://bankrupt.com/misc/Millennium_L_180_3rd_Plan_Supplement.pdf About Millennium Lab Millennium Lab Holdings II, LLC, Millennium Health, LLC and Rxante, LLC, providers of laboratory-based diagnostic testing focused on drugs of abuse and clinical medication monitoring, filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 15-12284, 15-12285 and 15-12286, respectively) on Nov. 10, 2015. The Debtors estimated assets in the range of $100 million to $500 million and liabilities of more than $1 billion. Judge Laurie Selber Silverstein was assigned the case. The Debtors engaged Skadden, Arps, Slate, Meagher & Flom LLP as counsel; Young Conaway Stargatt & Taylor, LLP as conflicts counsel; Lazard Freres & Co., LLC, as investment banker; Alvarez & Marsal as financial advisor; and Prime Clerk LLC as claims and noticing agent. On Nov. 12, 2015, the Court entered an order granting joint administration of the Chapter 11 cases. The U.S. Trustee announced Nov. 24, 2015, that an official unsecured creditors committee was formed due to the insufficient response to the United States Trustee communication/contact for service on the committee. MILLER ENERGY: Court Has Until June 30 to Decide on Bankr. Plan --------------------------------------------------------------- Elizabeth Earl at Peninsula Clarion reports that the Bankruptcy Court has until June 30, 2016, to decide whether to accept Miller Energy Resources, Inc.'s bankruptcy plan, according to the settlement the Company has reached with the U.S. Securities and Exchanges Commission. Clarion recalls that on Jan. 12, 2016, the settlement was reached after the Company inflated the value of its assets for a $5 million payment. According to the report, the Company has agreed to unregister all its stocks and fully cooperate with the SEC to produce documents and provide employees to testify about the violations. Clarion says that if the Bankruptcy Court does not accept the bankruptcy plan, the Company will have to pay the SEC in installments, completing payment by no later than 2019. The report states that should the Bankruptcy Court accept the Company's plan for restructuring, the $5 million will become a "general unsecured claim," essentially an IOU. Citing the SEC, the report adds that the fine would be paid "consistently with the payments made to Miller Energy’s other general unsecured creditors." About Miller Energy Resources Miller Energy Resources, Inc. -- http://www.millerenergyresources.com/-- is an oil and natural gas production company focused on Alaska. The Company has a substantial acreage, reserve, and resource position in the State, significant midstream and rig infrastructure to support production, and 100% working interest in and operatorship of most of its assets. Miller Energy Resources and 10 of its affiliates filed Chapter 11 bankruptcy petitions (Bank. D. Alaska Proposed Lead Case No. 15-00236) on Oct. 1, 2015. Carl F. Giesler, Jr., signed the petition as chief executive officer. The Debtors disclosed total assets of $392,559,000 and total debts of $336,910,000 as of Jan. 31, 2015. Judge Gary Spraker is assigned to the case. The Debtors have engaged Andrews Kurth LLP as counsel, Seaport Global Securities as financial advisor, and Prime Clerk as claims and noticing agent. On Aug. 6, 2015, Cook Inlet, a wholly-owned by MER, became the subject of an involuntary Chapter 11 case filed by four creditors asserting to have an aggregate claim of $2.8 million. The petitioning creditors were Baker Hughes Oilfield, M-I LLC, Schlumberger Tech. Corp, and Baker Petrolite, LLC. Judge Spraker granted an order for relief under Chapter 11 of the Bankruptcy Code on Oct. 2, 2015. MOSLEY MOTEL: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Mosley Motel of Saint Petersburg, Inc. P.O. Box 8809 Seminole, FL 33775 Case No.: 16-00535 Chapter 11 Petition Date: January 25, 2016 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Joel S Treuhaft, Esq. PALM HARBOR LAW GROUP, P.A. 2997 ALT 19 STE B Palm Harbor, FL 34683-1907 Tel: 727-797-7799 Fax: 727-213-6933 Email: jstreuhaft@yahoo.com Total Assets: $1.57 million Total Liabilities: $8.26 million The petition was signed by Michael Shimshoni, vice president. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb16-00535.pdf NEW GULF RESOURCES: Major Creditors Object to Disclosure Statement ------------------------------------------------------------------ Energy & Exploration Partners, LLC, Enbridge G & P (East Texas) L.P., and Regiment Capital Ltd., objected to the adequacy of the disclosure statement explaining New Gulf Resources, LLC, et al.'s Joint Chapter 11 Plan of Reorganization. ENXP complains that in the Debtors' haste to fashion a deal with a limited subset of creditors, the Debtors appear to have forgotten, or deliberately ignored, ENXP's prepetition Secured Claims in excess of $15 million. According to ENXP, the Disclosure Statement provides little to no information regarding the proposed classification or treatment of ENXP's claims. As the Debtors are required to furnish adequate information in the Disclosure Statement to permit an informed judgment by all creditors, the Debtors have not met their burden under the Bankruptcy Code and the motion should be denied, ENXP asserts. In response to ENXP, the Debtors amended the Plan by separately classifying ENXP's secured claim, if any. The Disclosure Statement has also been amended to further specify the controversies with ENXP, claims by and against ENXP, and the treatment of ENXP under the plan. Enbridge complains that the Disclosure Statement fails to supply essential information regarding the Debtors' proposed assumption, assumption and assignment, or rejection of their executory contracts, and alludes to, but does not disclose, the Debtors' apparent intentions to propose certain modifications to at least some of their executory contracts. Enbridge further complains that the Disclosure Statement also omits information regarding prospective assignees of the Debtors' executory contracts. The Debtors tell the Court that they continue to evaluate which executory contracts will be assumed and rejected. The Debtors have added additional disclosure regarding the potential rejection of the Enbridge Agreements in the Disclosure Statement. The Debtors relate that they currently do not intend to assign the Enbridge Agreements to any third-party pursuant to the Plan. To the extent that the Debtors intend to do so, they will disclose the identity of the potential assignee in the Cure Schedule and Enbridge will have an opportunity to object to that assignment. Regiment, as holder of the Debtors' 11.75% Senior Secured Notes due 2019, and a holder of the Debtors' 10.0%/12% Senior Subordinated PIK Toggle Notes due 2019, complains that by blurring the impact of the Dilution Events, the Disclosure Statement overstates the projected recoveries on the Second Lien Notes Claims and Subordinated PIK Notes Claims by several hundred percent. The Disclosure Statement, Regiment adds, also offers no transparency into the expected recoveries of the members of the Ad Hoc Committee, who are being generously rewarded for their postpetition investments in the company. In response to Regiment, the Debtors have filed additional information regarding the equity splits following the Dilution Events and have filed additional information regarding the equity splits following the Dilution Events. The Debtors maintain that the Disclosure Statement, as amended, provides significant disclosure regarding the Plan and adequate information for holders of claims to make an informed judgment on whether to accept or reject the Plan. Thus, the Debtors contend, the Disclosure Statement satisfies the requirements of Section 1125 of the Bankruptcy Code and should be approved by the Court. The Debtors are represented by M. Blake Cleary, Esq. -- mbcleary@ycst.com -- Ryan M. Bartley, Esq. -- rbartley@ycst.com -- and Justin P. Duda, Esq. -- jduda@ycst.com -- at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware; and C. Luckey McDowell, Esq. -- luckey.mcdowell@bakerbotts.com -- Ian E. Roberts, Esq. -- ian.roberts@bakerbotts.com -- and Meggie S. Gilstrap, Esq. -- meggie.gilstrap@bakerbotts.com -- at Baker Botts L.L.P., in Dallas, Texas. ENXP is represented by: Robert J. Dehney, Esq. Erin R. Fay, Esq. MORRIS, NICHOLS, ARSHT& TUNNEL LLP 1201 North Market Street, 16th Floor P.O. Box 1347 Wilmington, DE 19899 Tel: (302) 658-9200 Fax: (302) 658-3989 Email: rdehney@mnat.com efay@mnat.com -- and -- Jennifer Feldsher, Esq. Rachel B. Goldman, Esq. BRACEWELL LLP 1251 Avenue of Americas, 49th Floor New York, NY 10020-1100 Tel: (212) 508-6100 Fax: (800) 404-3970 Email: Jennifer.Feldsher@bracewelllaw.com Rachel.Goldman@ bracewelllaw.com Enbridge is represented by: Joseph H. Huston, Jr., Esq. STEVENS & LEE, P.C. 919 Market Street, Suite 1300 Wilmington, DE 19801 Tel: 302-425-3310 Fax: 610-371-7972 Email: jhh@stevenslee.com -- and -- Mark S. Finkelstein, Esq. SHANNON,MARTIN, FINKELSTEIN, ALVARADO &DUNNE, P.C. 1001 McKinney Street, Suite 1100 Houston, TX 77002 Tel: 713-646-5503 Fax: 713-752-0337 Email: mfinkelstein@smfadlaw.com Regiment is represented by: Richard S. Cobb, Esq. Kerri K. Mumford, Esq. LANDIS RATH & COBB LLP 919 Market Street, Suite 1800 Wilmington, DE 19801 Tel: (302) 467-4400 Fax: (302) 467-4450 Email: cobb@lrclaw.com mumford@lrclaw.com -- and -- Andrew N. Rosenberg, Esq. Rebecca R. Cohen, Esq. Jeanne L. John, Esq. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019 Tel: (212) 373-3000 Fax: (212) 757-3990 Email: arosenberg@paulweiss.com rcohen@paulweiss.com jjohn@paulweiss.com About New Gulf Resources New Gulf Resources, LLC, NGR Holding Company LLC, NGR Texas, LLC and NGR Finance Corp. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12566) on Dec. 17, 2015. The petition was signed by Danni Morris as chief financial officer. Founded in 2011 and headquartered in Tulsa, Oklahoma, New Gulf is an independent oil and natural gas company engaged in the acquisition, development, exploration and production of oil and natural gas properties, focused primarily in the East Texas Basin. The Company currently employs 55 people. The Debtors have engaged Baker Botts L.L.P., as bankruptcy counsel, Young, Conaway, Stargatt & Taylor, LLP as co-counsel, Barclays Capital Inc., as investment banker, Zolfo Cooper, LLC as financial advisor, and Prime Clerk LLC as claims and notice agent. Judge Brendan Linehan Shannon has been assigned the case. NEW GULF RESOURCES: Unsecureds to Receive $500K Under Plan ---------------------------------------------------------- As discussed at the January 19 hearing, New Gulf Resources, LLC, et al., revised its Joint Plan of Reorganization and accompanying disclosure statement. Accordingly, the hearing to consider the adequacy of the Disclosure Statement, which was originally scheduled for Jan. 25, 2016, at 1:00 p.m. (Prevailing Eastern Time), is adjourned until a date and time to be determined. The Plan and the Disclosure Statement, originally filed on Dec. 17, 2015, are the result of extensive and vigorous negotiations among the Debtors and the Ad Hoc Committee, a group of holders of Second Lien Notes that collectively hold in excess of 72% of the Second Lien Notes and 22% of the Subordinated PIK Notes. The culmination of those negotiations was the entry into the Restructuring Support Agreement. According to the Debtors, the Plan substantially deleverages their balance sheet by converting approximately $365 million of debt under the Second Lien Notes into either 87.5% or 95% of the equity in Reorganized NGR, depending on how the holders of Subordinated PIK Notes vote on the Plan. As part of the overall settlement embodied in the Restructuring Support Agreement and the Plan, the holders of Second Lien Notes are voluntarily forgoing their right to part of the distributions under the Plan that they are otherwise entitled to receive so that the Debtors can make a distribution to Holders of Allowed Subordinated PIK Notes Claims, and Holders of Allowed General Unsecured Claims, such as trade creditors, vendors, and suppliers. The key components of the Restructuring and Plan are as follows: * DIP financing in the amount of $75 million, the proceeds of which will be used to retire the Debtors' First Lien Credit Agreement, provide certain operational liquidity, and fund the administration of the Chapter 11 Cases. The DIP Loan Claims will be satisfied in full through a dollar-for-dollar exchange of New First Lien Notes. * Payment in full, in cash, of all Allowed Administrative Claims (other than the DIP Loan Claims), Fee Claims, Priority Tax Claims, statutory fees, Other Priority Claims, Secured Tax Claims and Other Secured Claims. * Holders of Allowed Second Lien Notes Claims will receive their Pro Rata share of (i) 87.5% of the New Equity Interests issued as of the Effective Date (subject to the Dilution Events) and (ii) if the class of Subordinated PIK Notes does not vote to accept the Plan, an additional 7.5% of the New Equity Interests (subject to the Dilution Events). Under the Plan, holders of Class 3 - Second Lien Notes Claims are projected to recover 12% of their allowed claims. Holders of Class 3 Claims are impaired and are thus entitled to vote on the Plan. In the draft version of the First Amended Plan, dated Jan. 21, 2016, the General Unsecured Creditor Recovery Fund means cash in an amount equal to the lesser of (1) $500,000 or (2) an amount sufficient to satisfy all Allowed General Unsecured Claims in full. The Jan. 21 Plan also adds another class of creditors. Class 4(b) - ENXP Secured Claim was added. Holders of Class 4 Claims will will receive (i) if the ENXP Joint Operating Agreements are assumed, no additional consideration, or (ii) if the ENXP Joint Operating Agreements are rejected, a New ENXP Note. A full-text copy of the Disclosure Statement dated Dec. 17, 2015, is available at http://bankrupt.com/misc/NGRds1217.pdf A blacklined version of the Disclosure Statement dated Dec. 21, 2015, is available at http://bankrupt.com/misc/NGRds0121.pdf About New Gulf Resources New Gulf Resources, LLC, NGR Holding Company LLC, NGR Texas, LLC and NGR Finance Corp. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Proposed Lead Case No. 15-12566) on Dec. 17, 2015. The petition was signed by Danni Morris as chief financial officer. Founded in 2011 and headquartered in Tulsa, Oklahoma, New Gulf is an independent oil and natural gas company engaged in the acquisition, development, exploration and production of oil and natural gas properties, focused primarily in the East Texas Basin. The Company currently employs 55 people. The Debtors have engaged Baker Botts L.L.P., as bankruptcy counsel, Young, Conaway, Stargatt & Taylor, LLP as co-counsel, Barclays Capital Inc., as investment banker, Zolfo Cooper, LLC as financial advisor, and Prime Clerk LLC as claims and notice agent. Judge Brendan Linehan Shannon has been assigned the case. NUO THERAPEUTICS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Nuo Therapeutics, Inc. 207A Perry Parkway, Suite 1 Gaithersburg, MD 20877 Case No.: 16-10192 Type of Business: The Debtor is a biomedical company that pioneers leading-edge biodynamic therapies. The Debtor's flagship product, AurixTM, is a biodynamic hematogel that uses a patient's own platelets and plasma as a catalyst for healing. Chapter 11 Petition Date: January 26, 2016 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Mary F. Walrath Debtor's Counsel: William Pierce Bowden, Esq. ASHBY & GEDDES, P.A. 500 Delaware Avenue 8th Floor, P.O. Box 1150 Wilmington, DE 19899 Tel: 302 654-1888 Fax: 302-654-2067 Email: wbowden@ashby-geddes.com - and - Karen B. Skomorucha Owens, Esq. ASHBY & GEDDES, P.A. 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 Tel: 302-654-1888 Fax: 302-654-2067 Email: kskomorucha@ashby-geddes.com Total Assets: $19,151,928 Total Debts: $13,119,282 The petition was signed by David E. Jorden, acting chief executive officer and acting chief financial officer. List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Arthrex Contingent $834,144 Attn: Robert Harrison, CCP Warranty 1370 Creekside Blvd Obligation/ Naples, FL 34108 Deposit Bioprod D.O.O. Trade Payable $594,018 Attn: Rudi Rocak Stegne 11 Ljulajana 1521 Slovenia Stegman & Company Professional $188,051 Services Carelyn Fylling Employee $152,826 Severance New Hampshire Ball Bearing Inventory $88,701 CPA Global Limited Trade Payable $84,383 Net Health Systems, Inc. Trade Payable $80,000 Sparton Medical Systems Trade Payable $70,486 AAPC Trade Payable $50,000 Depuy Spine Inc Trade Payable $44,537 Pfizer Inc. Trade Payable $42,203 Curative Health Services Trade Payable $36,664 Waverly Holdings LLC Trade Payable $36,664 Applied Quality Solutions, LLC Trade Payable $34,573 HMP Communications LLC Trade Payable $33,925 Martin Rosendale Employee $32,084 Severance Maryland Economic Development Accrued $30,000 Fund Liability CorePerformx Advisory Group LLC Trade Payable $30,000 Fish & Richardson PC Professional $29,998 Services Andrew Cohen Employee $28,125 Severance PITTSBURGH CORNING: Pahigian, et al., to Head Asbestos Trust ------------------------------------------------------------ Lawrence Fitzpatrick, the legal representative of persons who in the future will hold Channeled Asbestos PI Trust Claims against, and the Official Committee of Asbestos Creditors appointed in the Chapter 11 case of, Pittsburgh Corning Corporation ask the U.S. Bankruptcy Court for the Western District of Pennsylvania to: (a) appoint Trustees of the Pittsburgh Corning Asbestos Personal Injury Settlement Trust; (b) authorize Pittsburgh Corning to pay the reasonable fees and expenses of the Trustees in accordance with the Modified Third Amended Plan of Reorganization for the Debtor dated January 29, 2009. The Plan is jointly proposed by Pittsburgh Corning, the Asbestos Committee, and the FCR; and (c) require each of the Trustees to file a notice no later than April 1, 2016, confirming that the Trustee has accepted his appointment. The Trust Agreement identified Philip A. Pahigian, Esq., the Honorable Jack T. Marionneaux (Ret.), and the Honorable A. Andrew MacQueen (Ret.) as the trustees. "More than 15 years after the Petition Date, the Debtor's Plan has been confirmed and all appeals of the confirmation order have now been resolved. The Motion seeks an order (i) appointing the Proposed Trustees as Trustees of the Pittsburgh Corning Asbestos Personal Injury Settlement Trust and (ii) authorizing the Debtor to pay the fees and expenses of the Trustees and their professionals prior to the Plan's Effective Date, so that they may undertake preparatory activities that will facilitate the prompt and efficient startup of and commencement of claims processing by the Trust that will be established on the Effective Date. It is contemplated by the Movants that the Effective Date will occur before the end of the second quarter of 2016," the Asbestos PI Committee and the FCR said. The Court confirmed the Plan on May 24, 2013. Appeals lodged by Mt. McKinley Insurance Company, formerly known as Gibraltar Casualty Company; and Everest Reinsurance Company, formerly known as Prudential Reinsurance Company, before the U.S. Court of Appeals for the Third Circuit related to the Plan confirmation were dismissed earlier this month pursuant to a Jan. 6 stipulation among the Insurers, the Debtor, the ACC, the Future Claimants' Representative, Corning Inc., PPG Industries Inc, and Certain Underwriters at Lloyd's, London and Certain London Market Insurers. The Trust is a key feature of the Plan. The Trust will be funded with contributions by and/or on behalf of the Debtor, PPG, the PPG Participating Insurers, and Corning, as set forth in the Plan. The contributions to the Trust will include, among other things: -- cash, plus the right to receive cash payments over time, totaling in excess of $3 billion: * $1.7 billion will come from the PPG Participating Insurers, * over $800 million will come from PPG, and * between $240 million and $290 million will come from Corning; -- 100% of the equity in the Debtor and in Pittsburgh Corning Europe, N.V., a company owned 50% by PPG and 50% by Corning; and -- 2,777,778 shares of PPG common stock or the cash value thereof. (The Plan provides for the contribution of 1,388,889 shares of PPG common stock (or the value thereof). PPG declared a two-for-one stock split effective June 12, 2015. The pre-split shares' market price was approximately $280 million on September 30, 2014.) Mr. Pahigian is a retired plaintiffs' attorney. He has worked in various asbestos bankruptcy cases. From 2006 to the present, he has served as a Trustee of the Babcock and Wilcox Company Asbestos PI Trust and as a Trustee of the United States Gypsum Asbestos Personal Injury Settlement Trust; and from 2013 to present, he has served as the Future Claimants' Representative for the APG Silica Trust. Mr. Marionneaux was a judge in the 18th Judicial District Court of Louisiana from 1982 until 2004, where he presided over class action and mass tort cases that were both local and national in scope. He also tried mesothelioma cases. Since January 1, 2007, Mr. Marionneaux has served (and continues to serve) as a Trustee for the Babcock and Wilcox Company Asbestos PI Trust. Mr. MacQueen served as a judge in the Circuit Court of Kanawha County, West Virginia from 1977 until 2000. He is now a semi-retired attorney in private practice. He represents a limited number of clients, provides alternative dispute resolution and expert services, and consults on various matters of law. A hearing on the request is scheduled for Feb. 11, 2016 at 9:30 a.m. Responses are due Feb. 4. The Asbestos Committee is represented by: Douglas A. Campbell, Esq. Philip E. Milch, Esq. CAMPBELL & LEVINE, LLC 1700 Grant Building Pittsburgh, PA 15219 Telephone: (412) 261-0310 Facsimile: (412) 261-5066 - and - Peter Van N. Lockwood, Esq. Leslie M. Kelleher, Esq. Jeffrey A. Liesemer, Esq. CAPLIN & DRYSDALE, CHARTERED One Thomas Circle, N.W., Suite 1100 Washington, D.C. 20005 Telephone: (202) 862-5065 Facsimile: (202) 429-3301 The FCR is represented by: Joel M. Helmrich, Esq. DINSMORE & SHOHL LLP One Oxford Centre 301 Grant Street, Suite 2800 Pittsburgh, PA 15219 Telephone: (412) 281-5880 Facsimile: (412) 281-5055 - and - James L. Patton, Jr., Esq. Edwin J. Harron, Esq. Sara Beth A.R. Kohut, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 About Pittsburgh Corning Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000, to address numerous claims alleging personal injury from exposure to asbestos. At the time of the bankruptcy filing, there were about 11,800 claims pending against the Company in state court lawsuits alleging various theories of liability based on exposure to Pittsburgh Corning's asbestos products and typically requesting monetary damages in excess of $1 million per claim. Judge Thomas Agresti handles the bankruptcy case. Reed Smith LLP serves as counsel and Deloitte & Touche LLP as accountants to the Debtor. The U.S. Trustee appointed a Committee of Unsecured Trade Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to the Committee of Unsecured Trade Creditors, and Pascarella & Wiker, LLP, as financial advisor. The U.S. Trustee also appointed a Committee of Asbestos Creditors on April 28, 2000. The Bankruptcy Court authorized the retention of these professionals by the Committee of Asbestos Creditors: (i) Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell & Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as special insurance counsel; (iv) Legal Analysis Systems, Inc., as Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L. Tersigni Consulting, P.C. as financial advisor, and (vi) Professor Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered. On Feb. 16, 2001, the Court approved the appointment of Lawrence Fitzpatrick as the Future Claimants' Representative. The Bankruptcy Court authorized the retention of Meyer, Unkovic & Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP, as his special counsel, and Analysis, Research and Planning Corporation as his claims consultant. In 2003, a plan of reorganization was agreed to by various parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court issued an order denying the confirmation of that plan, citing that the plan was too broad in addressing independent asbestos claims that were not associated with Pittsburgh Corning. On Jan. 29, 2009, an amended plan of reorganization (the Amended PCC Plan) -- which addressed the issues raised by the Court when It denied confirmation of the 2003 Plan -- was filed with the Bankruptcy Court. As reported by the TCR on April 25, 2012, Pittsburgh Corning, which is a joint venture between Corning Inc. and PPG Industries Inc., filed another amendment to its reorganization plan. PCC's balance sheet at Sept. 30, 2012, showed $29.4 billion in total assets, $7.52 billion in total liabilities and $21.9 billion in total equity. RELATIVITY MEDIA: Court Approves FTI Fee; Hurdles Remain in Ch. 11 ------------------------------------------------------------------ Jonathan Randles at Bankruptcy Law360 reported that a New York bankruptcy judge on Jan. 20, 2016, approved a contested FTI Consulting fee for services the firm provided to Relativity Media related to the company's turnaround efforts, but raised doubts about a settlement between creditors that was intended to ease opposition to Relativity's restructuring plan. U.S. Bankruptcy Judge Michael Wiles said FTI is entitled to an interim order to pay the consulting firm 80% of its fees and all of its expenses tied to Relativity's Chapter 11. Relativity's unsecured creditors committee had challenged FTI. About Relativity Relativity -- http://relativitymedia.com/-- is a next-generation global media company engaged in multiple aspects of content production and distribution, including movies, television, sports, digital and music. More than just a collection of entertainment-related businesses, Relativity is a content engine with the ability to leverage each of these business units, independently and together, to create content across all mediums, giving consumers what they want, when they want it. Relativity Studios, the Company's largest division, has produced, distributed or structured financing for more than 200 motion pictures, generating more than $17 billion in worldwide box-office revenue and earning 60 Oscar nominations. Relativity's films include Oculus, Safe Haven, Act of Valor, Immortals, Limitless, and The Fighter. Relativity Media LLC and its affiliates, including Relativity Fashion, LLC, sought protection under Chapter 11 of the Bankruptcy Code on July 30, 2015 (Bankr. S.D.N.Y., Case No. 15-11989). The case is assigned to Judge Michael E. Wiles. The Debtors are represented by Craig A. Wolfe, Esq., Malani J. Cademartori, Esq., and Blanka K. Wolfe, Esq., at Sheppard Mullin Richter & Hampton LLP, in New York; and Richard L. Wynne, Esq., Bennett L. Spiegel, Esq., and Lori Sinanyan, Esq., at Jones Day, in New York. Brian Kushner of FTI Consulting, Inc., serves as chief restructuring officer and crisis and turnaround manager. Luke Schaeffer of FTI Consulting, Inc., serves as deputy CRO. Blackstone Advisory Partners L.P. serves as the Debtors' investment banker. The team is led by Timothy Coleman, Senior Managing Director, CJ Brown, Senior Managing Director, Paul Sheaffer, Vice President, and Joseph Goldschmid, Associate. The Debtors' noticing and claims agent is Donlin, Recano & Company, Inc. * * * An investor group composed of Anchorage Capital Group, L.L.C., Falcon Investment Advisors, LLC and Luxor Capital Group, LP on Oct. 21, 2015, completed its purchase of the assets of Relativity Television. After selling their TV business, the Debtors and CEO Ryan C. Kavanaughfiled a proposed plan of reorganization that will allow the Debtors to reorganize their non-TV business units with a substantially de-levered balance sheet utilizing new equity investments and new financing. Jim Cantelupe, of Summit Trail Advisors, LLC, has committed to work with the Debtors to raise up to $100 million of new equity to fund the Plan. REX ENERGY: Moody's Lowers CFR to Caa3, Outlook Negative -------------------------------------------------------- Moody's Investors Service downgraded REX Energy Corporation's Corporate Family Rating to Caa3 from Caa1, its Probability of Default Rating to Caa3-PD from Caa1-PD, its senior unsecured notes to Ca from Caa2. The SGL-4 Speculative Grade Liquidity (SGL) Rating was affirmed and the rating outlook remains negative. "The ratings downgrade was driven by the continued steep deterioration in the commodity price environment, its impact on the credit metrics of REXX and the increased likelihood of a distressed debt exchange. The uncertainty around REXX's ability to meet its interest expense and the company's weak liquidity profile has significantly elevated the potential for purchases of debt at steep discounts to the face value or other balance sheet restructuring including bankruptcy filing" commented Sreedhar Kona, Moody's Senior Analyst. Downgrades: Issuer: Rex Energy Corporation Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Senior Unsecured Regular Bond/Debentures, Downgraded to Ca (LGD 4) from Caa2 (LGD 4) Affirmations: Speculative Grade Liquidity Rating, Affirmed SGL-4 Outlook Actions: Outlook, Remains Negative RATINGS RATIONALE The downgrade of the CFR to Caa3 from Caa1 reflects the impact of rapid deterioration of the commodity price environment over the past few weeks, REXX's credit metrics and the worsening outlook for REXX's ability to generate sufficient cash flow to meet its cash needs beyond 2016. Despite its hedging program and a modest decline in operating costs, Moody's expects the company to generate negative retained cash flow in 2016-2017 and interest coverage to weaken to 1.0x or below. Given the weak capital structure and deteriorating credit metrics, there is a high likelihood of purchasing or exchanging the debt at a steep discount to the face value, which is deemed a distressed exchange and an event of default under Moody's definition of default. The company's senior unsecured notes ($350 million of 8.875% notes due 2020 and $325 million of 6.25% notes due 2022) were downgraded to Ca. This is one notch below the CFR, reflecting the notes' contractual subordination to the (unrated) $350 million secured borrowing base revolving credit facility due 2019 ($69 million outstanding as of 30 September 2015). The revolver is secured by a pledge of mortgages on oil and gas properties of all subsidiaries located in Pennsylvania, Ohio, Illinois and Indiana and ranks ahead of the senior notes. The SGL-4 rating reflects Moody's expectation that REXX's liquidity will remain weak through 2016. EBITDA will not be sufficient to cover even the material cash needs of $50 million -- $60 million of cash interest expense, leading to an increased reliance on external sources to fund capital spending plans. As of Sept. 30, 2015, REXX had $3 million of cash on its balance sheet. Although the $350 million borrowing base revolving credit facility has only $69 million of outstanding borrowings and $11 million of letters of credit as of September 2015, the additional availability under the revolver could be limited to approximately $100 million given the prospect of weak EBITDA through 2016 eroding the covenant cushion. The availability under the revolver could also be impacted if the borrowing base is redetermined to a lower level in spring 2016. There are no debt maturities until 2019, when the revolver commitments expire. Moody's sees a significant risk to the company's ability to remain in compliance with its financial maintenance covenants (maximum net senior secured debt/EBITDAX of 3.0x and current ratio of 1.0x) through 2016. Substantially all of the company's assets are pledged as collateral to the revolving credit facility and any net proceeds from asset sales have to be used to reduce outstanding revolver balances leaving limited alternative liquidity. The company continues to explore potential liquidity improving activities, however, the timing and ultimate proceeds are uncertain. The negative outlook reflects the risk of covenant breach and the uncertainty around the recovery value for the rated debt. The ratings could be downgraded if REXX's liquidity worsens further than anticipated or if the company pursues debt restructuring. A rating upgrade is not expected through 2016 due to the weak commodity price outlook. An upgrade will be considered if the company improves RCF/Debt to above 10% and sustains EBITDA/interest at above 2x. Liquidity must improve to at least adequate levels for ratings to be considered for an upgrade. Headquartered in State College, PA, REXX is a publicly traded independent, exploration and production company with operations concentrated in the Appalachian and the Illinois Basins. The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. ROLLAGUARD SECURITY: Jeweler Arrested in $12M Investor Row ---------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reported that a Florida bankruptcy judge on Jan. 21, 2016, ordered the arrest of a West Palm Beach jeweler for repeatedly failing to comply with orders to produce documents to Rollaguard Security LLC's liquidating trustee, who claims $12 million in investor funds were funneled into the jewelry business. U.S. Bankruptcy Judge Erik P. Kimball ordered the U.S. Marshal to take Anthony Simpson, who owns Palm Beach Gardens-based Shamrock Jewelers Inc. and the bankrupt Rollaguard, into custody. About Rollaguard West Palm Beach, Florida-based Rollaguard filed a Chapter 7 bankruptcy petition (Bankr. S.D. Fla. Case No. 14-38071) on Dec. 30, 2014. The case is assigned to Judge Erik P. Kimball. The Debtor tapped Brett A Elam, Esq., at Farber + Elam, LLC, as counsel. Robert C. Furr, Esq., serves as the Chapter 7 trustee. The Trustee and his attorneys can be reached at: Robert C Furr, Esq 2255 Glades Rd #337W Boca Raton, FL 33431 Tel: (561) 395-0500 Fax : (561) 338-7532 E-mail: bnasralla@furrcohen.com John H Genovese, Esq. 100 SE 2 St 44 Fl Miami, FL 33131 Tel: (305) 349-2300 E-mail: jgenovese@gjb-law.com Jason S Rigoli, Esq. 2255 Glades Rd # 337W Boca Raton, FL 33431 Tel: (561) 395-0500 Fax: (561) 338-7532 E-mail: jrigoli@furrcohen.com Jesus M Suarez 100 SE 2 St Miami, FL 33131 Tel: (305) 349-2300 E-mail: jsuarez@gjb-law.com SAEED COHEN: Preliminary Injunction Order Vacated ------------------------------------------------- Fariba Cohen filed an appeal from the United States Bankruptcy Court for the Central District of California, Los Angeles Division's Order granting Debtor-Appellee Saeed Cohen's Application for Preliminary Injunction. Judge S. James Otero of the United States District Court for the Central District of California ordered the Bankruptcy Court to vacate its Order and remanded the case for further proceedings. The case is captioned In re Saeed Cohen, CASE NO. 2:14-CV-08939 SJO, NO. 2:13-BK-26483 NB, ADVERSARY CASE NO. 2:14-AP-1484 NB, BAP CASE NO. CC-14-01434 (Bankr. C.D. Calif.). A full-text copy of the Order dated September 5, 2015 is available at http://is.gd/yxA8qlfrom Leagle.com. Saeed Cohen, In re Debtor, represented by: Beth Ann R. Young, Esq. Levene Neale Bender Yoo & Brill LLP 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Phone: 310.229.1234 Fax: 310.229.1244 Email: bry@lnbyb.com Fariba Cohen, Appellant, represented by Jonathan S. Shenson, Esq. -- jshenson@shensonlawgroup.com -- Shenson Law Group PC & Lauren Nicole Gans, Esq. -- lgans@shensonlawgroup.com -- Shenson Law Group PC Saeed Cohen, Appellee, represented by Krikor John Meshefejian, Esq. -- kjm@lnbyb.com -- Levene Neale Bender Rankin and Brill LLP, Ron Bender, Esq. -- rb@lnbyb.com -- Levene Neale Bender Rankin and Brill LLP & Beth Ann R Young, Esq. -- Levene Neale Bender Yoo and Brill LLP. SAMUEL E. WYLY: Judge Says Tax Fraud Trial Prone to Permit Opinion ------------------------------------------------------------------ Jess Davis atBankruptcy Law360 reported that the Texas bankruptcy judge overseeing the Internal Revenue Service's $2.2 billion tax fraud case centering on stock option transfers against business tycoon Sam Wyly and his sister-in-law said on Jan. 21, 2016, she's likely to write an opinion in the case, and plans to question both sides extensively during closing arguments. The IRS rested its case on Jan. 21, 2016, after about three weeks of testimony, but U.S. Bankruptcy Court Judge Barbara Houser is delaying closing arguments until Jan. 27 (Wednesday) to give her time to think through the case. About Sam Wyly Sam Wyly is a lifelong entrepreneur and author. His first book, 1,000 Dollars & An Idea, is a biography that tells his story of creating and building companies, including University Computing, Michaels Arts & Crafts, Sterling Software, and Bonanza Steakhouse. His second book, Texas Got It Right!, co-authored with his son, Andrew, was gifted to roughly 450,000 students and teachers, thought leaders, and readers, and continues to be a best-seller in its Amazon category. Samuel Wyly filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 14-35043) on Oct. 19, 2014, weeks after a judge ordered him to pay several hundred million dollars in a civil fraud case. In September 2014, a federal judge ordered Mr. Wyly and the estate of his deceased brother to pay more than $300 million in sanctions after they were found guilty of committing civil fraud to hide stock sales and nab millions of dollars in profits. About Caroline Wyly Caroline Wyly is the widow of business tycoon Charles Wyly. She and her brother-in-law Sam Wyly sought Chapter 11 bankruptcy protection as leverage to settle a looming tax bill and a $329 million claim from the Securities and Exchange Commission. Her bankruptcy is In re Caroline D. Wyly, 14-35074, in U.S. Bankruptcy Court, Northern District Texas (Dallas). SAN BERNARDINO, CA: Court Junks Firefighters' 5th Appeal -------------------------------------------------------- The City of San Bernardino's firefighters filed a fifth appeal in the City's ongoing bankruptcy saga. The Appellants San Bernardino City Professional Firefighters Local 891, Gregory Parker, Sam Bashaw, Chris Nigg, Thomas Jeff English, Richard Lentine, Steve Tracy, and Kenneth Konior appeal from a judgment entered in favor of the City of San Bernardino and Alan Parker following the bankruptcy court's determination that neither the City's charter nor state law prohibit the City from outsourcing firefighting services. In an Opinion dated December 22, 2015, which is available at http://is.gd/ih4suBfrom Leagle.com, Judge Otis D. Wright of the United States District Court for the Central District of California affirmed the bankruptcy court's order in full. The case is In re: CITY OF SAN BERNARDINO, CALIFORNIA, Debtor, Case No. 5:15-cv-01562-ODW (Bankr. C.D. Calif.). The adversary case is SAN BERNARDINO CITY PROFESSIONAL FIREFIGHTERS LOCAL 891; GREGORY PARKER; SAM BASHAW; CHRIS NIGG; THOMAS JEFF ENGLISH; RICHARD LENTINE; STEVE TRACY; KENNETH KONIOR, Appellants, v. CITY OF SAN BERNARDINO, CALIFORNIA; and ALAN PARKER, Appellees, U.S. Bankruptcy Court Adverse Action Case No. 6:15-ap-01119-MJ, Main Action No. 6:12-bk-28006-MJ (C.D. Calif.). San Bernardino City Professional Firefighters, Local 891 are represented by: Corey William Glave, Esq. COREY W GLAVE ATTORNEY AT LAW 1042 2nd St. Hermosa Beach, CA 90254 Fax: (310) 379-0456 -- and -- David M. Goodrich, Esq. SULMEYERKUPETZ APC 333 S. Hope Street Thirty-Fifth Floor Los Angeles, CA 90071 Tel: (213) 626-2311 Fax: (213) 629-4520 Email: dgoodrich@sulmeyerlaw.com Gregory Parker, Appellant, represented by Corey William Glave, Corey W Glave Attorney at Law & David M. Goodrich, SulmeyerKupetz APC. Sam Bashaw, Appellant, represented by Corey William Glave, Corey W Glave Attorney at Law & David M. Goodrich, SulmeyerKupetz APC. Chris Nigg, Appellant, represented by Corey William Glave, Corey W Glave Attorney at Law & David M. Goodrich, SulmeyerKupetz APC. Thomas Jeff English, Appellant, represented by Corey William Glave, Corey W Glave Attorney at Law & David M. Goodrich, SulmeyerKupetz APC. Richard Lentine, Appellant, represented by Corey William Glave, Corey W Glave Attorney at Law & David M. Goodrich, SulmeyerKupetz APC. Steve Tracy, Appellant, represented by Corey William Glave, Corey W Glave Attorney at Law & David M. Goodrich, SulmeyerKupetz APC. Kenneth Konior, Appellant, represented by Corey William Glave, Corey W Glave Attorney at Law & David M. Goodrich, SulmeyerKupetz APC. City of San Bernardino, Appellee, represented by Fred Neufeld, Esq. -- fneufeld@sycr.com -- Stradling Yocca Carlson and Rauth PC, Gary David Saenz, San Bernardino City Attorneys Office, Laura L Buchanan, Esq. -- lbuchanan@sycr.com -- Stradling Yocca Carlson & Rauth PC & Paul Robert Glassman, Esq. -- pglassman@sycr.com -- Stradling Yocca Carlson and Rauth PC. Alan Parker, Appellee, represented by Fred Neufeld, Stradling Yocca Carlson and Rauth PC, Gary David Saenz, San Bernardino City Attorneys Office, Laura L Buchanan, Stradling Yocca Carlson & Rauth PC & Paul Robert Glassman, Stradling Yocca Carlson and Rauth PC. Alan Parker, in his individual capacity, Appellee, represented by Fred Neufeld, Stradling Yocca Carlson and Rauth PC, Gary David Saenz, San Bernardino City Attorneys Office, Laura L Buchanan, Stradling Yocca Carlson & Rauth PC & Paul Robert Glassman, Stradling Yocca Carlson and Rauth PC. About San Bernardino San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debt of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joined two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. The City was granted Chapter 9 protection on Aug. 28, 2013. The City filed on May 14, 2015, a Plan to exit court protection. The Plan proposes to some bondholders a penny on the dollar but maintains pension benefits for retired city workers. The Plan proposes to make full payments into the pension fund run by California Public Employees' Retirement System. * * * The Troubled Company Reporter, on Oct. 28, 2015, reported that the hearing on the disclosure statement with respect to the Plan for the Adjustment of Debts of the City of San Bernardino, California, has been continued to Dec. 23, 2015, at 1:30 p.m. SIMPLY FASHION: Resolves Claims of Middlegate Factors ----------------------------------------------------- A bankruptcy judge has signed off on an order which resolves the claims of Middlegate Factors LLC against Simply Fashion Stores Ltd. Middlegate Factors will get an unsecured non-priority claim in the amount of $491,500. The allowed claim supersedes the claims of the company's factor clients, which include Active Footwear Inc. and Rosee Fashion, according to the order signed by U.S. Bankruptcy Judge Laurel Isicoff. Judge Isicoff disallowed the claims of the factor clients in their entirety. A copy of the order is available for free at http://is.gd/fji9vh About Simply Fashion Owned by the Shah family, Simply Fashion has 247 stores in 25 states across the country in major markets such as Detroit, Miami, New Orleans, St. Louis, Chicago, Atlanta, Baltimore, Nashville and Dallas. Founded in 1991, Simply Fashion is primarily a brick and mortar retailer of Junior, Plus and Super Plus women's fashion catering to African-American women between the ages of 25 and 55, with locations in 25 states. Adinath Corp. is the general partner of Simply Fashion. It is owned 100% by Bhavana Shah. On April 16, 2015, Adinath and Simply Fashion Stores, Ltd., each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in Miami, Florida (Bankr. S.D. Fla., Case No. 15-16885). The cases are under the Honorable Laurel M. Isicoff. The Debtors have tapped Berger Singerman LLP as counsel; Kapila Mukamal, LLP, as restructuring advisor; and Prime Clerk LLC as claims and noticing agent. Simply Fashion estimated $10 million to $50 million in assets and debt. The U.S. Trustee for Region 21 appointed five creditors to serve on the official committee of unsecured creditors. On July 24, 2015, the U.S. Trustee appointed James P.S. Leshaw as consumer privacy ombudsman in the Debtors' Chapter 11 cases. TIMOTHY BELNAP: Cal. App. Grants Partner's Bid to Junk Appeal ------------------------------------------------------------- Connie Pierce and her dental corporation filed a motion to dismiss the appeal under the disentitlement doctrine. Essentially, Pierce argues that appellant Timothy Belnap's repeated willful disobedience of orders of the bankruptcy court and the trial court justify dismissal of the appeal. The case involves the nasty dissolution of a dental partnership between Pierce and Timothy Belnap and his dental corporation. Pierce filed for binding arbitration to dissolve the dental partnership, and for damages for breach of contract, breach of fiduciary duty, and other claims. In an Opinion dated December 21, 2015, which is available at http://is.gd/ss9B9ufrom Leagle.com, the Court of Appeals of California, Fourth District, Division Three, granted the motion to dismiss appeal and the appeal is dismissed. Pierce is awarded costs on appeal. The case is CONNIE L. PIERCE et. al., Respondents, v. TIMOTHY BELNAP et. al., Appellants, No. G051433. Brown Wegner McNamara and Stephen M. McNamara, Esq. -- smcnamara@bwmllp.com for Respondents. Catanzarite Law Corporation, Kenneth J. Catanzarite, Esq. and Brandon E. Woodward, Esq. for Appellants. ULTIMATE NUTRITION: Gets Approval to Hire Arnold & Porter --------------------------------------------------------- Ultimate Nutrition Inc. received court approval to hire Arnold & Porter LLP as its special litigation counsel. Arnold & Porter will assist the company in connection with the litigation of a motion to estimate the claim of Environmental Research Center, which is seeking $5 million in damages from the company. The $5 million claim stemmed from Ultimate Nutrition's alleged failure to warn customers that they have been exposed to lead by use of its products. The California-based research center said the company violated California's law known as "Proposition 65." In November last year, ERC filed with the U.S. Bankruptcy Court in Connecticut an objection to the company's bid to estimate the claim at zero, according to court filings. The attorneys of Arnold & Porter who will provide services to the company will be paid on an hourly basis. They are: Professionals Hourly Rates ------------- ------------ Trent Norris (partner) $1,020 Sarah Esmaili (counsel) $750 Ginamarie Caya (associate) $560 Marc Schiess (legal assistant) $340 Ultimate Nutrition will also use other attorneys and legal assistants of the firm if necessary. The hourly rates range from $735 to $995 for partners; $545 to $995 for counsel; $405 to $605 for associates; and $240 to $340 for legal assistants. In a court filing, Sarah Esmaili, Esq., at Arnold & Porter, in San Francisco, California, said the firm will not represent any other client in matters adverse to the company during the pendency of its bankruptcy case. The firm can be reached at: Arnold & Porter LLP Sarah Esmaili Three Embarcadero Center, 10th Floor San Francisco, CA 94111 Tel: (415) 471-3283 Fax: (415) 471-3400 Email: sarah.esmaili@aporter.com About Ultimate Nutrition Ultimate Nutrition, Inc., develops and distributes nutritional supplements for body building, enhanced athletic performance and fitness. The products are sold worldwide in over 100 countries. The business was founded in 1979 by the late Victor H. Rubino, one of the top amateur power lifters in the United States at that time. The company has two facilities located in Farmington, Connecticut, one product distribution center in New Britain, Connecticut and a research and development center in West Palm Beach, Florida. Ultimate Nutrition and affiliate Prostar, Inc., sought Chapter 11 bankruptcy protection (Bankr. D. Conn. Case Nos. 14-22402 and 14-22403) on Dec. 17, 2014. On Dec. 19, 2014, the Court entered an order directing the joint administration of the Debtors' cases for procedural purposes. The Debtors tapped Pullman & Comley, in Bridgeport, Connecticut, as counsel; LaQuerre Michaud & Company, LLC, as accountant; and Marcum LLP, as financial advisor. Ultimate Nutrition disclosed $20,157,424 in assets and $19,885,142 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 2 appointed three creditors of to serve on the official committee of unsecured creditors. The Committee has selected Lowenstein Sandler, LLP to serve as its counsel, and Neubert, Pepe & Monteith, P.C. to serve as its local counsel. GlassRatner Advisory & Capital Group LLC serves as the Committee's financial advisor. USA CAPITAL MANAGEMENT: Raises Going Concern Doubt Amid Net Loss ---------------------------------------------------------------- USA Capital Management, Inc. posted a net loss of $28,340 for the three months ended September 30, 2015 as compared with a net loss of $712 for the period September 25, 2014 (inception) through September 30, 2014. The company has not yet generated any revenue since inception to date and has sustained operating losses during the period ended September 30, 2015. The company had a working capital deficiency of $15,952 and an accumulated deficit of $33,798 as of September 30, 2015. "The company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required," according to Richard Meruelo, president and chief financial officer of the company, in a November 25, 2015 regulatory filing with the U.S. Securities and Exchange Commission. "The unaudited condensed financial statements have been prepared assuming that the company will continue as a going concern; however, the condition raises substantial doubt about the company's ability to do so." Mr. Meruelo continued, "In order to maintain its current level of operations, the company will require additional working capital from either cash flow from operations or from the sale of its equity. However, the company currently has no commitments from any third parties for the purchase of its equity. If the company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations." At September 30, 2015, the company had total assets of $1,806,206, total liabilities of $765,951 and total stockholders' equity of $1,040,255. A full-text copy of the company's quarterly report is available for free at: http://tinyurl.com/ho9amdm San Juan, Puerto Rico-based USA Capital Management, Inc. was incorporated on September 25, 2014 under the laws of the state of Delaware. In May 2015, the company converted from a Delaware to a Puerto Rico corporation and moved its principal place of business to San Juan, Puerto Rico. The company's operations to date have been limited to issuing shares to its shareholders, the purchase of a business office, and the acquisition of various properties for development. The company intends to provide management services to limited liability companies that are formed to promote, invest and operate business opportunities globally. VALLEY FORGE: Thompson Coburn Wants Negligence Claims Dropped ------------------------------------------------------------- Alex Wolf at Bankruptcy Law360 reported that Thompson Coburn LLP told a Pennsylvania federal judge on Dec. 21, 215, that negligence claims brought against it by the Chapter 7 trustee of Valley Forge Composite Technologies Inc. must be dismissed because no connection exists between the firm's counseling and the CEO's illegal sales of military-grade components to China. Trustee John P. Neblett is alleging Thompson Coburn attorney Michael Hawthorne gave the anti-terrorism technology developer "negligent" advice on what to report in a U.S. Securities and Exchange Commission filing about the viability of a company investment. About Valley Forge Valley Forge Composite Technologies, Inc., sought Chapter 11 bankruptcy protection (Banrk. M.D. Pa. Case No. 13-05253) on Oct. 9, 2013. The Company, which produces technology products, is represented by Maurice R. Mitts of Mitts Milavec. The case was converted to a Chapter 7 liquidation on Feb. 18, 2015. The case is assigned to Judge John J. Thomas. VERSO CORPORATION: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor affiliates filing separate Chapter 11 bankruptcy petitions: Debtor Case No. ------ -------- Verso Corporation 16-10163 aka Verso Paper Corporation aka Verso Paper Two Corporation aka Verso Paper Five Parent LLC aka Verso Paper Three Corporation aka Verso Paper Four Corporation 6775 Lenox Center Court, Suite 400 Memphis, TN 38115-4436 Verso Paper Finance Holdings LLC 16-10164 NewPage Energy Services LLC 16-10165 Verso Paper Finance Holdings One LLC 16-10166 Upland Resources, Inc. 16-10167 Verso Paper Holdings LLC 16-10168 NewPage Investment Company LLC 16-10169 Bucksport Leasing LLC 16-10170 Verso Paper Inc. 16-10171 NewPage Holdings Inc. 16-10172 Verso Paper LLC 16-10173 NewPage Wisconsin System Inc. 16-10174 nexTier Solutions Corporation 16-10175 Verso Quinnesec LLC 16-10176 Rumford Paper Company 16-10177 Verso Quinnesec REP Holding Inc. 16-10178 NewPage Consolidated Papers Inc. 16-10179 Verso Androscoggin LLC 16-10180 Verso Sartell LLC 16-10181 Chillicothe Paper Inc. 16-10182 Verso Fiber Farm LLC 16-10183 Wickliffe Paper Company LLC 16-10184 Escanaba Paper Company 16-10185 Verso Maine Energy LLC 16-10186 Verso Paper Finance Holdings Inc. 16-10187 Luke Paper Company 16-10188 NewPage Corporation 16-10189 Type of Business: Producer of coated papers, including printing papers and specialty papers, as well as a producer of high-quality market pulp. Chapter 11 Petition Date: January 26, 2016 Court: United States Bankruptcy Court District of Delaware (Delaware) Judge: Hon. Kevin Gross Debtors' George A. Davis, Esq. General Peter Friedman, Esq. Counsel: Andrew M. Parlen, Esq. Diana M. Perez, Esq. O'MELVENY & MYERS LLP Times Square Tower Seven Times Square New York, New York 10036 Tel: (212) 326-2000 Fax: (212) 326-2061 Email: gdavis@omm.com pfriedman@omm.com aparlen@omm.com dperez@omm.com Debtors' PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Corporate Counsel: Debtors' Joseph Charles Barsalona II, Esq. Delaware RICHARDS, LAYTON & FINGER, P.A. Counsel: One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: 302-651-7542 Fax: 302-498-7542 Email: barsalona@rlf.com - and - Mark D. Collins, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: 302-651-7531 Fax: 302-651-7701 Email: collins@rlf.com - and - Michael Joseph Merchant, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 Tel: 302-651-7700 Fax: 302-651-7701 Email: merchant@rlf.com Debtors' PJT PARTNERS L.P. Investment Banker: Debtors' ALVAREZ & MARSAL NORTH AMERICA, LLC Financial Advisor: Debtors' PRIME CLERK LLC Claims and Noticing Agent: Total Assets: $2.9 billion Total Debts: $3.87 billion The petition was signed by David Paterson, president and chief executive officer. List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wilmington Trust Company Bond Debt $100,734,363 1100 North Market St. Wilmington, DE, 19890-1615 Fax No: 302-636-4145 Wilmington Trust, National Bond Debt $68,483,465 Association 50 South Sixt St., Suite 1290 Minneapolis, MN, 55402 Fax No: 612-217-5651 Wilmington Trust Company Bond Debt $42,744,591 1100 North Market St Wilmington, DE, 19890-1615 Fax No: 302-636-4145 General Electric International Inc. Services $3,862,826 901 Warrenville Rd, Suite 300 Lisle, IL, 60532 Fax No: 630-396-9128 Valmet Inc. Trade Debt $3,105,694 1615 Mathews St. Neenah, WI, 54956 Fax No: 920-997-1100 Midland Paper Company Inc. Trade Debt $2,973,074 101 E Palatine Rd Wheeling, IL, 60090 Fax No: 847-403-6836 Omnova Solutions Inc. Trade Debt $2,444,933 165 S Cleveland Ave Mogadore, OH, 44260-1505 Fax No: 330-628-6527 Catalyst Paper Operations Inc. Trade Debt $2,214,333 35 Hartford St Rumford, ME, 04276 Fax No: 207-369-2751 Omya Inc. Trade Debt $2,147,512 9987 Carver Rd, Suite 300 Cincinnati, OH, 45242 Fax No: 513-672-2446 Warehouse Specialists Inc. Trade Debt $2,086,839 1160 N Mayflower DR Appleton, WI, 54913 Fax No: 920-830-5199 Celtic International Trade Debt $1,843,020 7840 Graphics DR, Suite 100 Tinley Park, IL 60477 Fax No: 708-460-9324 Sparhawk Trucking Trade Debt $1,592,173 421 25th Ave N. Wisconsin Rapids, WI, 54495 Fax No: 715-423-0313 Andritz Inc. Trade Debt $1,503,409 101 Bamberg DR Pell City, AL, 35125-0767 Fax No: 205-814-0104 Plum Creek Trade Debt $1,467,324 1411 N 4th St. Tomahawk, WI, 54487 Fax No: 906-789-9130 Specialty Minerals Inc. Trade Debt $1,390,941 35 Highland Ave Bethlehem, PA, 18017 Fax No: 610-882-8702 Blue Line Logistics Inc. Trade Debt $1,382,292 3485 Willow Lake Blvd, Suite 200 Vadnais Heights, MN, 55110 Fax No: 651-414-0846 Canadian National Trade Debt $1,299,921 277 Front St W, FL 5 Toronto, ON, M5V 2X7 Fax No: 514-399-4941 Constellation Energy Services Trade Debt $1,167,301 1716 Lawrence DR De Pere, WI, 54115 Fax No: 920-433-1011 Hartt Transportation Systems Inc. Trade Debt $1,165,818 262 Bomarc Rd Bangor, ME, 04401-2655 Fax No: 207-941-0839 NALCO Co Trade Debt $1,068,994 2365 American DR Neenah, WI, 54956-1018 Fax No: 920-734-5592 Deboer Transportation Inc. Trade Debt $1,036,732 8814 County Road F Blenker, WI, 55415 Fax No: 715-652-3702 RGL Specialty Services LLC Trade Debt $1,034,655 1401 State ST Green Bay, WI, 54306-2412 Fax No: 920-727-5729 The Chemours Company LLC Trade Debt $1,016,634 974 Centre Road Wilmington, DE, 19805 Fax No: 302-355-3231 Deep South Crane & Rigging Trade Debt $1,011,400 15324 Airline Highway Baton Rouge, LA, 70817 Fax No: 225-751-7700 Shell Energy North America LP Trade Debt $951,874 909 Fannin Houston, TX 77010 Fax No: 713-265-4824 Corenso North America Trade Debt $932,522 800 Fremont St Wisconsin Rapids, WI, 54495 Fax No: 715-422-7874 Rockwell Automation Trade Debt $919,286 4020 Quest Way #101 Memphis, TN, 38115 Fax No: 218-727-3344 Kamin Performance Minerals Trade Debt $906,648 822 Huber Road Macon, GA, 31217 Fax No: 478-745-1116 Minnesota Power Trade Debt $878,576 30 W Superior St Duluth, MN, 55802 Fax No: 218-723-3962 Pension Benefit Guaranty Corp Pension Unliquidated 1200 "K" Street, NW, Suite 340 Liability Washington, DC 20005 Fax No: 202-326-4112 VERSO PAPER: Moody's Lowers CFR to Ca, Outlook Negative ------------------------------------------------------- Moody's Investors Service downgraded Verso Paper Holdings LLC's corporate family rating to Ca from Caa2, probability of default rating (PDR) to Ca-PD/LD from Caa2-PD and downgraded NewPage Corporation (a non-guarantor restricted subsidiary of Verso)'s Senior Secured Bank Credit Facility to Caa3(LGD3) from Caa1(LGD3). For Verso and NewPage's other debt ratings, refer to the debt list below. Verso's SGL-4 speculative grade liquidity was affirmed and the rating outlook is negative. Downgrades: Issuer: NewPage Corporation Senior Secured Bank Credit Facility, Downgraded to Caa3(LGD3) from Caa1(LGD3) Issuer: Verso Paper Holdings LLC Probability of Default Rating, Downgraded to Ca-PD /LD from Caa2-PD Corporate Family Rating, Downgraded to Ca from Caa2 Subordinate Regular Bond/Debenture, Downgraded to C(LGD6) from Ca(LGD6) Senior Subordinated Regular Bond/Debenture, Downgraded to C(LGD6) from Ca(LGD6) Senior Secured Bank Credit Facility, Downgraded to B3(LGD1) from B1(LGD1) Senior Secured Bank Credit Facility, Downgraded to Ca(LGD4) from Caa2(LGD4) Senior Secured Regular Bond/Debenture, Downgraded to C(LGD5) from Caa3(LGD5) Senior Secured Regular Bond/Debenture, Downgraded to Ca(LGD4) from Caa2(LGD4) Ratings Affirmed: Issuer: Verso Paper Holdings LLC Speculative Grade Liquidity Rating, Affirmed at SGL-4 Outlook Actions: Issuer: Verso Paper Holdings LLC Outlook, Remains Negative RATINGS RATIONALE The CFR downgrade and Ca-PD/LD probability of default rating reflect Moody's understanding that Verso did not make the interest payment on NewPage's $731 million Senior Secured Bank Credit Facility, which was due on Jan. 22, 2016, incorporating the contractual five day grace period. Moody's definition of default captures missed or delayed interest payments beyond the original contractual term. The "LD" designation will remain in place until clarity over the resolution of the missed interest payment develops. Verso's Ca CFR reflects the company's inability to make timely interest payments, elevated risk of further defaults as the company explores potential restructuring alternatives, the company's weak liquidity, high leverage (projected adjusted leverage of about 7x) and the expectation that the company will continue to face secular demand declines and weak prices for most of the grades of coated paper it produces. The rating also considers the continuing execution risks in integrating NewPage with Verso and the company's complex funding structure following their merger last year. The rating is supported by the company's vertically integrated, relatively low cost asset base and its leading market position as the largest producer of higher quality coated paper grades (such as coated freesheet) in North America. Moody's expects the company's liquidity to remain weak (SGL-4) with limited covenant headroom, expectations that the company will continue to utilize its credit facilities to fund cash requirements and few remaining non-core saleable assets. Prior to the recent hydroelectric plant sale for $62 million, Verso and NewPage combined had $10 million of cash and $62 million of committed unused availability (at 9/2015) to fund about $275 million of debt maturing over the next 18 months (this includes Verso's credit facilities that mature in May 2017). The negative rating outlook reflects the likelihood of additional defaults, including further missed interest payments or debt restructuring. The CFR could be lowered if Verso files for creditor protection or restructures its debt such that it causes economic loss to existing debt holders. Absent a major improvement in Verso's debt level and liquidity position, a positive rating action is unlikely. The principal methodology used in these ratings was Global Paper and Forest Products Industry published in October 2013. Headquartered in Memphis, Tennessee, Verso is the largest coated paper producer in North America with annual sales of about $3 billion. On Jan. 7, 2015, Verso acquired NewPage Corporation for $1.4 billion. On Nov. 16, 2015, the company announced it engaged advisors to explore potential restructuring alternatives. XINERGY LTD: Court OKs Additional $1.5M DIP Financing ----------------------------------------------------- Xinergy Ltd. and its affiliated debtors sought and obtained from the U.S. Bankruptcy Court for the Western District of Virginia authorization to amend their DIP Credit Agreement and obtain incremental financing under the DIP Credit Agreement. The Debtors entered into a Superpriority Secured Debtor-In-Possession Credit Agreement ("DIP Credit Agreement") with WBOX 2014-4 Ltd., Highbridge International LLC, Highbridge Tactical Credit & Convertibles Master Fund, L.P., along with certain other persons party thereto from time to time ("DIP Lenders"), and WBOX 2014-4 Ltd., as DIP Agent. Pursuant to the DIP Credit Agreement, the Debtors borrowed from the Lenders the principal amount of $40,000,000 ("DIP Facility"), which was secured by first-priority security interests in and liens on all of the Debtors' assets. The Debtors related that the DIP Facility has provided the Debtors with working capital to continue to operate their business post-petition and to pay the fees and expenses associated with the Chapter 11 Cases. The Debtors further related that the DIP Credit Agreement contained an "accordion" feature that permitted the Debtors to draw up to an additional $10,000,000 under the DIP Facility ("Incremental Term Loan Commitments") upon the satisfaction or waiver of certain conditions. The Debtors told the Court that the they entered into the Incremental Assumption Agreement, Amendment No. 1 and Waiver ("Incremental Amendment No. 1") with lenders party thereto from time to time and WBOX 2014-4 Ltd, as DIP Agent. The Debtors further told the Court that Incremental Amendment No. 1 provided the Debtors with an additional $9,000,000 of the liquidity under the DIP Facility's "accordion" feature. The Debtors related that they borrowed an additional $5,000,000 in the Incremental Effective Date and, subsequently, an additional $2,000,000 upon satisfaction of certain conditions set forth in Incremental Amendment No. 1. The Debtors added that Incremental No. 1 also provided for an additional $2,000,000 ("CapEx Delayed Draw Incremental Term Loan") to finance the purchase of certain mining equipment, which amount remains undrawn. The Debtors determined that additional funding was needed to continue their business operations and pursue their goal of a successful restructuring. As part of the proposed Incremental Amendment No. 2, they sought to borrow an additional $1,500,000 for general corporate purposes. The Debtors added that under Incremental Amendment No. 2, the CapEx Delayed Draw Incremental Term Loan Commitment, will be terminated. Among other amendments, Incremental Amendment No. 2 provides for the following: (a) The extension of the maturity date of the DIP Facility from Jan. 5, 2016 to Feb. 5, 2016. (b) The principal of the Subsequent Incremental Term Loans will be entitled to repayment prior to the repayment of the principal of any of the other Term Loans. (c) The Events of Default under Section 9.1 of the DIP Credit Agreement will be modified to include the payment of any professional fees incurred by, or for which the Debtors are responsible, including the fees of professionals retained by the DIP Lenders and the Committee, on or after the Subsequent Incremental Effective Date and until the Maturity Date without the written consent of the DIP Agent. Committee's Limited Objection The Official Committee of Unsecured Creditors of Xinergy, Ltd., et. al. ("Official Committee"), questioned whether the DIP Facility Lenders and Consenting Noteholders were committed to funding the exit of the Debtors from the cases and cited these reasons for its objection: (a) The Fees provided in the Incremental Amendment No. 2 for one month are exceedingly expensive. The aggregate dollar amount of the Loan Fees will be in excess of $100,000 for a one-month advance, which the Committee considers excessive for such a short-term loan. (b) The repayment of Incremental Amendment No. 2 will have an elevated priority over the prior advances under the DIP Facility, suggesting that the participants advancing the funds under Incremental Amendment No. 2 do not share an identity of interest with the participants that advanced the prior loans under the DIP Facility. (c) Incremental Amendment No. 2 also conditions the advance on the Debtors refraining from paying professional fees of the Debtors' estates. The vast majority of the outstanding professional fees of the estate have already been approved, and the Debtors have been ordered to pay such professional fees. Xinergy Ltd. and its affiliated debtors are represented by: Tyler P. Brown, Esq. Henry P. (Toby) Long, III, Esq. Justin F. Paget, Esq. HUNTON & WILLIAMS LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, VA 23219 Telephone: (804)788-8200 Facsimile: (804)788-8218 E-mail: tpbrown@hunton.com hlong@hunton.com jpaget@hunton.com The Official Committee of Unsecured Creditors of Xinergy, Ltd., et. al., is represented by: Michael E. Hastings, Esq. Brandy M. Rapp, Esq. WHITEFORD TAYLOR & PRESTON LLP 114 Market Street, Suite 210 Roanoke, VA 24011 Telephone: (540)759-3579 Facsimile: (540)759-3569 E-mail: mhastings@wtplaw.com brapp@wtplaw.com - and - Michael J. Roeschentahaler, Esq. MCGUIREWOODS LLP EQT Plaza 625 Liberty Avenue, 23rd Floor Pittsburgh, PA 15222 Telephone: (412)667-6000 Facsimile: (412)667-6050 E-mail: mroeschenthaler@mcguirewoods.com - and - Sarah B. Boehm, Esq. MCGUIREWOODS LLP Gateway Plaza 800 East Canal Street Richmond, VA 23219 Telephone: (804)775-7487 Facsimile: (804)698-2255 E-mail: sboehm@mcguirewoods.com About Xinergy Ltd. Xinergy is a U.S. producer of metallurgical and thermal coal with mineral reserves, mining operations and coal properties located in the Central Appalachian ("CAPP") regions of West Virginia and Virginia. Xinergy's operations principally include two active mining complexes known as South Fork and Raven Crest located in Greenbrier and Boone Counties, West Virginia. Xinergy also leases or owns the mineral rights to properties located in Fayette, Nicholas and Greenbrier Counties, West Virginia and Wise County, Virginia. Collectively, Xinergy leases or owns mineral rights to approximately 72,000 acres with proven and probable coal reserves of approximately 77 million tons and additional estimated reserves of 40 million tons. Xinergy Ltd. and 25 subsidiaries commenced Chapter 11 bankruptcy cases (Bankr. W.D. Va. Lead Case No. 15-70444) on April 6, 2015. The cases have been assigned to Judge Paul M. Black. The cases are being jointly administered for procedural purposes. Xinergy Ltd. disclosed $36,968,445 in assets and $215,000,000 in liabilities as of the Chapter 11 filing. The Debtors tapped Hunton & Williams LLP as attorneys; Global Hunter Securities, as financial advisor, and American Legal Claims Services, LLC as claims, noticing and balloting agent. The U.S. Trustee appointed a two member official committee of unsecured creditors. The Committee tapped to retain McGuireWoods LLP as lead counsel, and Whiteford, Taylor & Preston, LLP as its local counsel. The Informal Prepetition Noteholder Committee and DIP Lenders are represented by Paul, Weiss, Rifkind, Wharton & Garrison. [*] Credit Metrics of Proppant Cos. to Decline in 2016, Moody's Say ------------------------------------------------------------------- The credit metrics of proppant companies will significantly deteriorate this year as oil prices near multi-year lows lead to continued spending cuts among the companies that purchase proppants, said Moody's Investors Service. Proppants, which are key to hydraulic fracking operations, are used by the exploration & production (E&P) and oilfield service and drilling (OFS) industries. These industries will remain stressed as oil prices continue to fall, according to the report "Proppant Companies Face Rating Pressure in 2016 on Continued Slide in Oil Prices." As a result, Moody's forecasts that proppant earnings will fall at least 30% from 2015 levels as E&P and OFS companies further cut operating and capital costs. These cuts will significantly erode earnings of proppant companies to the point of hitting Moody's downgrade triggers. "Most of our rated proppant companies do not have the earnings generation necessary to maintain their current credit profiles," said Karen Nickerson, a Moody's Vice President and Senior Credit Officer. "And because proppant companies streamlined their operations in 2015 in response to declining oil prices, there may be little room for them to further cut costs." Moody's notes that continued oversupply in the energy markets, which will be exacerbated by the addition of supply from Iran, will continue to depress oil prices and thus proppant volumes and prices as well. The rating agency expects that these challenging conditions could result in multi-notch downgrades for its proppant portfolio in 2016. [*] ERISA Ruling Shields Hospitals From "Overpayment Bankruptcies" ------------------------------------------------------------------ ERISAclaim.com disclosed that an ERISA plan cannot sue to recover medical expenses paid on the participant's behalf after the settlement funds have dissipated, because ". . . a plaintiff ordinarily cannot enforce any type of equitable lien if the defendant once possessed a separate, identifiable fund to which the lien attached, but then dissipated it all . . . This rule applied to equitable liens by agreement as well as other types of equitable liens." Op. at 9 Supreme Court case info: Robert Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, case #: 14-723, January 20, 2016 Supreme Court link for a PDF copy: http://www.supremecourt.gov/opinions/15pdf/14-723_1bn2.pdf On January 21, 2016, ERISAclaim.com announced 2016 hospital ERISA appeal & litigation department support services to demystify why this high court decision also protects hospitals and doctors from any health plan's overpayment recoupment and to recover all overpayment recoupment unlawfully withheld or embezzled by all payers under any incorrect ERISA equitable lien arguments, because "this rule applied to equitable liens by agreement as well as other types of equitable liens." Op. at 9 "More than billions of dollars in revenue losses, or even bankruptcies, for hospitals and doctors nationwide in the past 10 years are directly resulted from all types of overpayment offset and recoupment by payers under ERISA equitable lien arguments, inside or outside of court rooms, this Supreme Court decision is extremely timely and most important for every health care provider's financial survival," says Dr. Jin Zhou, president of ERISAclaim.com, a national expert on ERISA appeals and compliance, and an ERISA "Special Collection Agent", as recently ordered by a Federal Bankruptcy Court for a bankrupt hospital system in Texas. "At minimum, all overpayment offset or recoupment across the plans and/or the patients are not permissible under ERISA equitable lien law in accordance with the Supreme Court decision on January 20, 2016, because the alleged overpayment equitable lien is attached to the other people's fund or property where there is no ERISA equitable lien existed or otherwise clearly not permitted," says Dr. Zhou. "For all pending overpayment court cases in absence of any fraud claims, this Supreme Court decision could be a rainmaker for all healthcare providers, both in-network and out-of-network, " predicted by Dr. Zhou. ERISAclaim.com's 2016 hospital ERISA appeal & litigation department support services will brainstorm on this Supreme Court order on January 20, 2016 and assist hospital executives and legal departments in assessing and immediately compliance with the Supreme Court decision, in advocating for ERISA rights of the plan participants and beneficiaries in the hospital's financial survival ordeals, or otherwise in preventing hospitals and doctors from being bankrupt as a result of the totally out-of-control revenue losses from the endless and relentless overpayment recoupment or offsets under ERISA in absence of any fraud claims. These new ERISA compliance services include, but not limited to, executive brainstorming, education, ERISA & PPACA appeal practice, ERISA litigation strategy & support, overpayment prevention through corporate compliance in fraud & abuse prevention. In a personal injury subrogation overpayment lawsuit, after the District Court and 11th Circuit Court ruled for the health plan, on January 2016, the Supreme Court ruled for the plan participant. In an 8-1 ruling penned by Justice Clarence Thomas, the majority said that the National Elevator Industry Health Benefit Plan couldn't sue plan beneficiary Robert Montanile under ERISA 502(a)(3) for overpayment reimbursement of about $122,000 from a $500,000 auto accident settlement because the settlement fund had already been dissipated, the plan fiduciary may not sue to get at the participant's additional assets. According to the Court Documents, the Supreme Court ruled: "Plan fiduciaries are limited by 502(a)(3) to filing suits "to obtain . . . equitable relief." "[A]s here, an equitable lien by agreement, only against specifically identified funds that remained in the defendant's possession or against traceable items that the defendant purchased with the funds." "If a defendant dissipated the entire fund on nontraceable items, the lien was eliminated and the plaintiff could not attach the defendant's general assets instead." "The Board's arguments in favor of the enforcement of an equitable lien against Montanile's general assets are unsuccessful. Sereboff does not contain an exception to the general asset-tracing requirement for equitable liens by agreement." "In sum, at equity, a plaintiff ordinarily could not enforce any type of equitable lien if the defendant once possessed a separate, identifiable fund to which the lien attached, but then dissipated it all. The plaintiff could not attach the defendant's general assets instead because those assets were not part of the specific thing to which the lien attached." "This rule applied to equitable liens by agreement as well as other types of equitable liens." Located in a Chicago suburb in Illinois, for over 15 years, ERISAclaim.com is the only ERISA & PPACA consulting, publishing and website resource for healthcare providers in the country. ERISAclaim.com offers free webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support. [*] Kirkland & Ellis Named BLaw360's Bankruptcy Group of the Year ----------------------------------------------------------------- Stewart Bishop at Bankruptcy Law360 reported that Kirkland & Ellis LLP earned a spot on Law360's Bankruptcy Groups of the Year. Last year upheld its reputation as a restructuring heavyweight, between taking on the mammoth Chapter 11 filing of Caesars Entertainment Operating Co. to turning around Patriot Coal Corp. from a near loss to a going concern. For the third year in a row, the attorneys at Kirkland have maintained their position as one of the go-to firms for major restructurings and insolvencies both abroad and in the U.S. [*] NJ Man Gets 30 Years, $14 Million Fine in Scarfo-Led Scheme --------------------------------------------------------------- Jeannie O'Sullivan at Bankruptcy Law360 reported that a federal judge on Jan. 20, 2016, ordered a $14 million fine and 30 years in prison for a New Jersey man who copped to his role in a $12 million Mafia-led extortion takeover that forced a mortgage lender's bankruptcy, according to prosecutors. U.S. District Judge Robert B. Kugler in Camden, New Jersey, imposed the fine and prison sentence on John Parisi, 54, a cousin of alleged Lucchese crime family member Nicodemo S. Scarfo Jr., U.S. Attorney Paul Fishman said. ********* 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 2016. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-362-8552. *** End of Transmission ***