/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/160608.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, June 8, 2016, Vol. 20, No. 160 Headlines 181 WEST 135TH: Hires Robinson Brog as Counsel 270 BERGER REAL: Voluntary Chapter 11 Case Summary ABB/CON-CISE OPTICAL: S&P Rates New 4450MM 1st Lien Loans 'B' AFFINITY GAMING: S&P Raises CCR to 'B+' on Proposed Refinancing ALIKE INC: Seeks to Hire Eric A. Liepins as Legal Counsel ALORICA INC: S&P Assigns 'BB-' CCR, Outlook Stable ALPHA NATURAL: Court OKs Termination of Retiree Plans ALPHA NATURAL: Funds Seek Review of Retiree Benefits Termination AMERICOLD REALTY: Moody's Puts B3 CFR on Review for Upgrade AMERICOLD REALTY: S&P Affirms 'B+' CCR, Outlook Remains Stable AMY E. SINES: Disclosure Statement Approval Hearing on July 19 ASCENA RETAIL: S&P Lowers CCR to 'BB-' on Weak Operating Results AVITA ARTESIAN: Taps Don Darnell as Bankruptcy Counsel B&B FITNESS: Case Summary & 20 Largest Unsecured Creditors BALTIMORE GRILL: Ch.11 Trustee Hires Fox Rothschild as Attorney BARBARA MAGNUSSON: Colorado Property Sold for $40,000 BDF ACQUISITION: S&P Affirms 'B' CCR, Outlook Stable BELK INC: Bank Debt Trades at 18% Off BRAND ENERGY: Bank Debt Trades at 3% Off BUFFETS LLC: Wins Approval of $620,000 Sale of Property CAESARS ENTERTAINMENT: Fights for Creditor Support for Ch. 11 Plan CAESARS ENTERTAINMENT: Seeks Halt to Suits as Mediation Breaks Down CARROLS RESTAURANT: S&P Raises CCR to 'B', Outlook Stable CEC ENTERTAINMENT: Bank Debt Trades at 3% Off CHAMPAGNE SERVICES: Taps Westlake Legal Group as Counsel CHICORA LIFE CENTER: U.S. Trustee Unable to Appoint Committee CHILDREN'S TRUST: S&P Retains BB Rating on CreditWatch Negative CLAYTON B. OBERSHEIMER: Taps Amigone as Legal Counsel COALINGA REDEVELOPMENT: S&P Raises Rating on 2009C TABs to BB+ CONNTECH PRODUCTS: Tells Bank Its Will Procure a Buyer by June 21 DBDFW3 LLC: Plan Proposes $500K Monthly Payment to Unsecureds DEASY ASSOCIATES: Unsecureds to Get 100% Under Plan DECK CHASSIS: Moody's Assigns B1 CFR, Outlook Stable DESERT HOT SPRINGS: S&P Hikes Rating on 3 Bond Tranches to B- DISPOSAL TEJAS: Case Summary & 19 Largest Unsecured Creditors DORAL FINANCIAL: Plan Confirmation Set for July 25; Outline Okayed DREAMSCAPES LLC: Hires Mitchell & Hammond as Counsel DRM SALES & SUPPLY: Sale of Ford F-150 to Contractor Approved DYNAMIC INVESTMENTS: Proposes to Sell Property for $16,500 EP ENERGY: S&P Alters Outlook to Negative on Reduced Borrowing Base EXPERT GLOBAL: S&P Puts 'CCC+' CCR on CreditWatch Positive FAIRWAY GROUP: Amends Joint Prepackaged Reorg Plan FANNIE MAE & FREDDIE MAC: How FHFA Redefined Capital In Court FEDERAL IDENTIFICATION: Court OKs June 22 Auction for Assets FEDERAL-MOGUL CORP: Bank Debt Trades at 4% Off FILMED ENTERTAINMENT: Wants July 6 Plan Solicitation Deadline FIRST BRONX: Plan Confirmation Hearing Set for July 7 FIRST QUANTUM: S&P Revises Outlook to Stable & Affirms 'B-' CCR FORTESCUE METALS: Bank Debt Trades at 7% Off GA DESIGN: Hires Vilarino & Associates as Counsel GA INVESTORS: Hires Vilarino & Associates as Bankr. Counsel GARDENS REGIONAL: Case Summary & 20 Largest Unsecured Creditors GATES GROUP: Bank Debt Trades at 3% Off GO GREEN PARTNERS: Voluntary Chapter 11 Case Summary GONZALEZ GROUP: Case Summary & 20 Largest Unsecured Creditors GONZALEZ GROUP: Requests Access to Comerica's Cash Collateral GONZALEZ HOLDINGS: Case Summary & 5 Unsecured Creditors GR HOSPITALITY: Case Summary & 5 Unsecured Creditors GROVE PLAZA: Wants Okay to Use Oversecured Lenders' Cash Collateral GYMBOREE CORP: S&P Raises CCR to 'CCC+', Outlook Negative HAGGEN HOLDINGS: Wants Aug. 5 Exclusive Plan Filing Deadline HANISH, LLC: Has Continued Access to Hotel Lenders' Cash Collateral HANOVER PARMENTER: Seeks to Hire Peres Zoppo as Special Counsel HARLAND CLARKE: S&P Affirms 'B+' CCR on Proposed Debt Financing HERCULES OFFSHORE: Asks Court for Permission to Use Cash Collateral HERCULES OFFSHORE: Jefferies Agrees to Cash Collateral Use HERCULES OFFSHORE: Moody's Lowers PDR to D-PD on Bankr. Filing HERCULES OFFSHORE: Proposes July 11 as Limited Bar Date HERCULES OFFSHORE: S&P Lowers CCR to 'D' on Chapter 11 Filing HERCULES OFFSHORE: Seeks to Establish Procedures to Protect NOLs HERCULES OFFSHORE: Wants Automatic Stay Enforced HERTZ CORP: Moody's Affirms B1 CFR, Outlook Positive HERTZ GLOBAL: S&P Affirms 'B+' CCR & Rates $2.4BB Facility 'BB' HESS COMMERCIAL: Wants Exclusive Plan Filing Extended to July 13 HILTON WORLDWIDE: S&P Raises CCR to 'BB+' on Spin-off Filings HONEYCOMB CAPITAL: Plan, Disclosures Hearing Set for July 12 HORSEHEAD HOLDING: Creditors, Noteholders Object to Plan Outline IES GLOBAL: Moody's Lowers CFR to B3, Outlook Negative INMOBILIARIA LEGUISAMO: Seeks to Hire Rafael Cruzado as Appraiser INVERRARY RESORT: Secured Lender Wants to Halt Cash Collateral Use IRENE STACY COMMUNITY: Taps Maher Duessel as Accountant IVENS PROPERTIES: Unsecureds to Get 100% Under Plan No. 2 J. CREW: Bank Debt Trades at 26% Off JG WENTWORTH: S&P Lowers ICR to 'CCC+' on Weakening Credit Metrics JO-LIN HEALTH: Turns to Paycor to Get Payroll Processing Straight JOHN ALDEN: S&P Affirms Then Withdraws 'BB+' CCRs JOSEPH FUNK: Selling House for $1,500 to Cousin K. HANNAH CORP: Case Summary & 15 Unsecured Creditors K. HANNAH: Makes Emergency Request to Use Cash Collateral KARINA LEE HOWE: Plan Agent Seeks $1.18MM Sale of Property KIVA CONSTRUCTION: Sperry Okayed to Auction Property KLAMON LLC: Case Summary & 15 Unsecured Creditors KSS HOLDINGS: S&P Affirms 'B+' CCR Over Ningbo Joyson Deal LAKESHORE VETERINARY: Disclosure Statement Hearing Set for June 23 LAREDO WO: Case Summary & 7 Unsecured Creditors LAWRENCE FROMELIUS: Seeks to Spend $200K to Demolish Structures MANLEY CONSTRUCTION: Plan and Disclosure Statement Due July 29 MARINA DISTRICT: S&P Affirms B+ CCR Over Planned Ownership Change MARJASU CORP: Disclosure Statement Hearing Set for Aug. 10 METROPOLITAN BAPTIST: Wants 90-Day Extension of Plan Filing Period MISSISSIPPI REGIONAL CANCER: Wants 45-Day Extension of Plan Filing ML HOSPITALITY: Case Summary & 8 Unsecured Creditors MODERN SHOE: Committee Seeks to Hire Brown Rudnick as Counsel MODERN SHOE: Committee Seeks to Hire CBIZ as Financial Advisor MUNDO LATINO MARKET: Taps Alla Kachan as Legal Counsel NEW SHILOH MISSIONARY: Taps Gouveia & Associates as Legal Counsel NEWFIELD EXPLORATION: Fitch Affirms 'BB+' IDR, Outlook Stable NJK HOSPITALITY: Disclosure Statement Hearing Set for July 14 NORANDA ALUMINUM: Wants Plan Filing Period Extended to Oct. 5 NORTH STATE OF WNY: Seeks to Hire Amigone as Legal Counsel NOVELIS INC: S&P Affirms CCR on Expected Credit Ratio Improvement PARALLEL ENERGY: Seeks to Sell or Abandon Miscellaneous Assets PETTERS COMPANY: Finn Ruling Does Not Vitiate Trustee's Case POSTROCK ENERGY: Judge Denies Committee's Bid to Hire Lowenstein PROGRESSIVE CROP: Proposes to Pay 100% to Unsecured Creditors PROSPECT MEDICAL: S&P Affirms B CCR & Rates New $650MM Term Loan B PRWIRELESS INC: S&P Lowers CCR to 'CCC-', Outlook Negative R&S ST. ROSE LENDERS: Must Finalize Plan Disclosures by June 10 RADNET MANAGEMENT: Moody's Assigns Ba3 Rating on $485MM Loan RADNET MANAGEMENT: S&P Rates Proposed $117.5MM Facility 'B' RED HILLS INDUSTRIAL: Seeks to Hire A.J. Willner as Auctioneer REDPRAIRIE CORP: Bank Debt Trades at 5% Off REX ENERGY: S&P Retains 'SD' Corporate Credit Rating ROCKDALE MANOR: Case Summary & 7 Unsecured Creditors SALADO SMILES: Obtains Access to East West Bank's Cash Collateral SEAFOOD ACADEMY: Taps Davis Law Office as Legal Counsel SEVEN GENERATIONS: Moody's Raises CFR to Ba3, Outlook Positive SEVENTY SEVEN ENERGY: Files Chapter 11 Petition & Prepack Plan SHEEHAN PIPE LINE: Panel Hires Foley & Lardner as Counsel SHEEHAN PIPE LINE: Panel Taps Frederic Dorwart as Counsel SINK & COMPANY: Unsecured Claimants to Recoup 15% in 5 Yrs SMALLVILLE PRESCHOOL: Taps Lloyed Chase as Accountant SNEED SHIPBUILDING: Wants Plan Filing Period Extended to Oct. 31 SOPHISTICATED STYLE: Plan, Disclosures Hearing Set for July 5 SQUARETWO FINANCIAL: S&P Raises ICR to CCC+ on Restructuring SRS DISTRIBUTION: Moody's Affirms B2 CFR After Proposed Dividend SRS DISTRIBUTION: S&P Affirms 'B' CCR on Debt-Financed Dividends STAR COMPUTER: Hires National Auction to as Auctioneer STATEWIDE AMBULETTE: Court Approves Revised Cash Collateral Pact STEPPING STONES: Wants Aug. 5 Exclusive Plan Filing Deadline STG-FAIRWAY HOLDINGS: S&P Assigns 'B' CCR, Outlook Stable STONERIDGE PARKWAY: Ch. 11 Plan Proposes to Sell Assets TALEN ENERGY: S&P Affirms 'B+' CCR, Outlook Stable TENNECO INC: Fitch Rates New $500MM Notes 'BB+/RR4' TENNECO INC: Moody's Assigns Ba3 Rating on New $500MM Sr. Notes TENNECO INC: S&P Assigns BB Rating on Proposed $500MM Sr. Notes TEREX CORP: S&P Affirms 'BB' CCR, Off CreditWatch Negative TERRY PAUL STIER: Plan Will Pay Unsecured Claims in 5 Years TRANSWORLD SYSTEMS: S&P Lowers CCR to 'CCC' on Covenant Concerns TRIBUNE PUBLISHING: Gannett Determined to Woo Company TRONOX INC: Bank Debt Trades at 3% Off TRUE RELIGION: Moody's Lowers CFR to Caa2, Outlook Negative UCI HOLDINGS: Chapter 11 Petition Filed; First Day Motions Okayed UCI HOLDINGS: S&P Lowers CCR to 'D' on Chap. 11 Filing ULTRA PETROLEUM: Seeks Approval of Key Employee Incentive Plan US FOODS: S&P Raises CCR to 'B+' Following IPO VALEANT PHARMA: Reports First-Quarter Loss, Cuts Forecast VALIDUS HOLDINGS: Moody's Assigns Ba1 Rating on New Shares VERDESIAN LIFE: S&P Lowers CCR to 'B' on Weak Operating Performance VERSO PAPER: Moody's Assigns Prov. B2 Rating on $225MM Sr. Loan VIGNAHARA LLC: Case Summary & 20 Largest Unsecured Creditors VIGNAHARA LLC: Requests Access to Hotel Lenders' Cash Collateral WESCO INT'L: S&P Rates $350MM Sr. Unsecured Notes Due 2024 'BB-' WILLIAM THORNER: Wants Okay to Use Cash Collateral to Pay Taxes WME IMG: Moody's Affirms B2 CFR, Outlook Remains Stable [*] Moody's Takes Neg. Rating Actions on 7 Payday and Title Lenders ********* 181 WEST 135TH: Hires Robinson Brog as Counsel ---------------------------------------------- 181 West 135th LLC seeks authorization from the Hon. Nancy Hershey Lord of the U.S. Bankruptcy Court for the Eastern District of New York to employ Robinson Brog Leinwand Greene Genovese & Gluck P.C. as counsel, effective May 4, 2016. The Debtor requires Robinson Brog to: (a) provide advice to the Debtor with respect to its powers and duties under the Bankruptcy Code in the continued operation of its business and the management of its property and/or assets; (b) negotiate with creditors of the Debtor, preparing a plan of reorganization and taking the necessary legal steps to consummate a plan, including, if necessary, negotiations with respect to financing a plan; (c) appear before the various taxing authorities to work out a plan to pay taxes owing in installments; (d) prepare on the Debtor's behalf necessary applications, motions, answers, replies, discovery requests, forms of orders, reports and other pleadings and legal documents; (e) appear before this Court to protect the interests of the Debtor and its estate, and representing the Debtor in all matters pending before this Court; (f) perform all other legal services for the Debtor that may be necessary herein; and (g) assist the Debtor in connection with all aspects of this chapter 11 case. Robinson Brog will be paid at these hourly rates: Shareholders $400-$665 Associates $250-$465 Paralegals $175-$300 Robinson Brog will also be reimbursed for reasonable out-of-pocket expenses incurred. On May 18, 2016, Robinson Brog received a third party post-petition payment in the amount of $22,000 from Renaissance Realty Group LLC. The third party post-petition payment included payment of the $7,843.50 pre-petition charges that were written off by Robinson Brog as well as $14,146.50 representing the bankruptcy retainer, inclusive of the $1,717.00 chapter 11 filing fee. A. Mitchell Greene, shareholder of Robinson Brogg, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Robinson Brogg can be reached at: A. Mitchell Greene, Esq. ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK P.C. 875 Third Avenue New York, NY 10022 About 181 West 135th 181 West 135th LLC, based in Brooklyn, N.Y., filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 16-41960) on May 4, 2016. The Hon. Nancy Hershey Lord presides over the case. Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Greene & Gluck P.C., as bankruptcy counsel. In its petition, the Debtor estimated $1 million to $10 million in both assets and liabilities. The petition was signed by Samuel Kairy, member of RRG 5 LLC, member and operating manager. 270 BERGER REAL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: 270 Berger Real Estate, LLC 2132 84th Street Brooklyn, NY 11214 Case No.: 16-21006 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court District of New Jersey (Trenton) Debtor's Counsel: Timothy P. Neumann, Esq. BROEGE, NEUMANN, FISCHER & SHAVER LLC 25 Abe Voorhees Drive Manasquan, NJ 08736 Tel: 732-223-8484 Fax: 732-223-2416 E-mail: timothy.neumann25@gmail.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Joseph Plotzker, managing member. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. ABB/CON-CISE OPTICAL: S&P Rates New 4450MM 1st Lien Loans 'B' ------------------------------------------------------------- S&P Global Ratings affirmed its 'B' corporate credit rating on Coral Springs, Fla.-based ABB/Con-Cise Optical Group LLC. The outlook is negative. S&P also assigned its 'B' issue rating to the company's proposed $450 million first-lien credit facilities (consisting of a $100 million five year revolver and $350 million seven year term loan) with a recovery rating of '3', indicating S&P's opinion that creditors could expect meaningful (50% to 70%, at the lower half of the range) recovery in the event of a payment default. At the same time, S&P assigned its 'CCC+' issue rating to the proposed $160 million eight year second-lien term loan, with a recovery rating of '6', indicating that creditors could expect negligible (0% to 10%) recovery in the event of a payment default. S&P's ratings assume the transaction closes on substantially the terms presented to S&P. S&P will withdraw its 'B+' issue rating on ABB's existing bank credit facility following its repayment. Debt outstanding pro forma for the proposed transaction is $510 million. The rating affirmation with a negative outlook reflects S&P's opinion that the company will have less financial flexibility following this transaction while litigation remains a risk to the company. S&P estimates the proposed dividend recapitalization will increase pro forma debt to EBITDA to 7x and weaken ABB's ability to service debt, including interest coverage closer to 2x compared with 4x for the fiscal year ended Dec. 31, 2015. Although S&P expects the company to generate decent cash flows, it faces litigation risk with respect to alleged anti-competitive behavior, and S&P thinks it's possible a class action could be certified within the next year. Given the transaction's meaningful dividend (which will return a substantial amount of the financial sponsor's total investment in ABB) and unresolved potential legal risk, S&P believes the potential for a lower rating is now more pronounced, and that class action certification could occur in the first half of 2017. S&P's ratings on ABB also reflect the company's ownership by a financial sponsor, its narrow business focus, vulnerability to decisions made by the four major contact lens suppliers, and the ability of customers to switch distributors fairly easily. The ratings also reflect the company's solid 40% share of the wholesale contact lens distribution market, including over 70% of the independent eye care professional (ECP) segment; its participation in an industry with stable end-user demand and satisfactory growth prospects; the potential to add more customers and leverage its existing distribution centers; and its low capital expenditure requirements. The negative outlook reflects ABB's reduced financial flexibility and pro forma credit ratio deterioration that will result from the proposed debt-financed distribution. It also incorporates the risk of unfavorable litigation developments over the next year, including the potential for certification of a class action against several defendants, including ABB. AFFINITY GAMING: S&P Raises CCR to 'B+' on Proposed Refinancing --------------------------------------------------------------- S&P Global Ratings said it raised the corporate credit rating on Las Vegas-based Affinity Gaming one notch to 'B+' from 'B'. The rating outlook is stable. At the same time, S&P assigned Affinity's proposed new $375 million senior secured credit facility (consisting of a $75 million revolving credit facility due 2021 and a $300 million term loan due 2023) an issue-level rating of 'BB-' and a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%; lower half of the range) recovery for lenders in the event of a payment default. Affinity plans to use the proceeds from the proposed debt issuance, along with approximately $90 million excess cash on the balance sheet, to refinance its existing capital structure and to pay transaction fees, expenses, and debt breakage costs. S&P plans to withdraw its issue-level and recovery ratings on the company's existing debt when it is repaid. "The upgrade reflects our forecast for meaningful improvement in Affinity's credit measures because of expected debt reduction in conjunction with the proposed refinancing transaction," said S&P Global Ratings credit analyst Stephen Pagano. The company has announced that it intends to utilize approximately $90 million of excess cash to reduce debt balances. Under S&P's base-case forecast, it now expects leverage will improve to the mid-4x area in 2016 because of planned debt repayment coupled with S&P's expectation for good operating performance, compared to its previous expectation of the mid-5x area. Further, S&P anticipates EBITDA coverage of interest to improve to the 3x area by 2016 compared to S&P's prior forecast of the low- to mid-2x range. These improved credit measures are aligned with an improved financial risk assessment of aggressive from the current highly leveraged assessment. S&P believes that Affinity's plans to utilize a significant amount of excess cash to repay debt combined with recent improvements in operating performance will facilitate a successful refinancing of the company's capital structure. The stable outlook reflects S&P's expectation that the company will successfully complete the proposed refinancing transaction as outlined and will sustain good operating performance such that adjusted leverage will improve to the low- to mid-4x area and EBITDA coverage of interest will improve to the high-3x area by 2017. ALIKE INC: Seeks to Hire Eric A. Liepins as Legal Counsel --------------------------------------------------------- Alike, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Eric A. Liepins, P.C. as its legal counsel. Liepins will be paid on an hourly basis and will receive reimbursement for work-related expenses. Eric Liepins, Esq., sole shareholder of the firm, will be paid $275 per hour for his services while paralegals and legal assistants will receive $30 to $50 per hour. Mr. Liepins disclosed in a court filing that his firm does not represent any interest adverse to the Debtor or its estate. The firm can be reached through: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Rd., Suite 1100 Dallas, Texas 75251 Phone: (972) 991-5591 Fax: (972) 991-5788 Email: eric@ealpc.com About Alike Inc. Alike, Inc. sought protection under Chapter 11 of the Bankruptcy Code in the Northern District of Texas (Dallas) (Case No. 16-32174) on June 2, 2016. The petition was signed by Gregory Achilike, president. The case is assigned to Judge Harlin DeWayne Hale. The Debtor disclosed total assets of $2.51 million and total debts of $1.75 million. ALORICA INC: S&P Assigns 'BB-' CCR, Outlook Stable -------------------------------------------------- S&P Global Ratings said it assigned its 'BB-' corporate credit rating to Irvine, Calif.-based Alorica Inc. The outlook is stable. At the same time, S&P assigned a 'BB' issue-level rating and '2' recovery rating to the company's senior secured credit facilities, which include a $445 million term loan A, a $225 million revolving credit facility, and a $450 million term loan B. The '2' recovery rating indicates S&P's expectation for substantial (70%-90%; lower end of the range) recovery in the event of a payment default. Alorica will use the proceeds from the proposed debt to pay off EGS's debt, pay fees and expenses, and repay a portion of its existing revolver balance. "The rating on Alorica reflects pro forma adjusted leverage in the mid-3x area along with operations in the highly competitive and fragmented BPO industry, significant revenue concentration among its top customers, and weak profitability relative to other telecom peers, with pro forma reported EBITDA margins in the low-double-digit percent area," said S&P Global Ratings credit analyst Rose Askinazi. The company's scale and solid free cash flow generation partially offset these factors. The stable outlook reflects S&P's expectation that EBITDA growth from recent acquisitions and expected debt repayment will lead to leverage declining below 3x over the next 12 months. ALPHA NATURAL: Court OKs Termination of Retiree Plans ----------------------------------------------------- BankruptcyData.com reported that the U.S. Bankruptcy Court approved Alpha Natural Resources' motion for an order (a) authorizing termination of the Debtors' (i) three non-qualified deferred compensation plans and (ii) two supplemental employee retirement plans (together, the SERP Plans); (b) directing Bank of America as trustee to return to any Debtor that has contributed to a deferred compensation plan on behalf of its employees or directors and (c) rejecting trust agreements. BankruptcyData.com previously reported, "The Debtors' proposed termination of the Plans satisfies both the horizontal and vertical/reasonable expectations tests and is thus authorized by section 363(c) of the Bankruptcy Code. With respect to the horizontal test, the modification and/or termination of supplemental benefit plans is a common practice for companies within various industries, including the coal industry. . . . Moreover, the Debtors have previously amended the Plans on several occasions in the ordinary course of their business, thus putting plan participants on further notice of the possibility of future modifications or termination. Termination of the Plans therefore satisfies the vertical, or reasonable expectations, test as well. Because the relief sought herein satisfies both the horizontal and vertical (or reasonable expectations) tests, the Debtors are authorized by section 363(c) of the Bankruptcy Code to terminate the Plans, without further notice and a hearing, because such actions are in the ordinary course of the Debtors' business." About Alpha Natural Resources Headquartered in Bristol, Virginia, Alpha Natural -- http://www.alphanr.com-- is a coal supplier, ranked second largest among publicly traded U.S. coal producers as measured by 2014 consolidated revenues of $4.3 billion. As of August 2015, Alpha had 8,000 full time employees across many different states, with UMWA representing 1,000 of the employees. Alpha Natural Resources, Inc. (Bankr. E.D. Va. Case No. 15-33896) and its affiliates filed separate Chapter 11 bankruptcy petitions on Aug. 3, 2015, listing $9.9 billion in total assets as of June 30, 2015, and $7.3 billion in total liabilities as of June 30, 2015. The petitions were signed by Richard H. Verheij, executive vice president, general counsel and corporate secretary. Judge Kevin R. Huennekens presides over the cases. David G. Heiman, Esq., Carl E. Black, Esq., and Thomas A. Wilson, Esq., at Jones Day serve as the Debtors' general counsel. Tyler P. Brown, Esq., J.R. Smith, Esq., Henry P. (Toby) Long, III, Esq., and Justin F. Paget, Esq., serve as the Debtors' local counsel. Rothschild Group is the Debtors' financial advisor. Alvarez & Marshal Holdings, LLC, is the Debtors' investment banker. Kurtzman Carson Consultants, LLC, is the Debtors' claims and noticing agent. The U.S. Trustee for Region 4 appointed seven creditors of Alpha Natural Resources Inc. to serve on the official committee of unsecured creditors. Dennis F. Dunne, Esq., Evan R. Fleck, Esq., and Eric K. Stodola, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and William A. Gray, Esq., W. Ashley Burgess, Esq., and Roy M. Terry, Jr., Esq. at Sands Anderson PC, represent the Committee. * * * Alpha Natural Resources, Inc. on March 8, 2016, disclosed that it has filed a proposed Chapter 11 Plan of Reorganization and a related Disclosure Statement with the United States Bankruptcy Court for the Eastern District of Virginia. Together with the motion seeking approval of a marketing process for Alpha's core operating assets, these filings provide for the sale of Alpha's assets, detail a path toward the resolution of all creditor claims, and anticipate the emergence of a streamlined and sustainable reorganized company able to satisfy its environmental obligations on an ongoing basis. By selling certain assets as a going concern and restructuring the company's remaining assets into a reorganized Alpha, the company is able to provide maximum recovery to its creditors, while preserving jobs and putting itself in the best position to meet its reclamation obligations. This path will allow for a conclusion of Alpha's bankruptcy proceedings by June 30, 2016. ALPHA NATURAL: Funds Seek Review of Retiree Benefits Termination ---------------------------------------------------------------- BankruptcyData.com reported that the United Mine Workers of America Combined Benefit Fund and the United Mine Workers of America 1992 Benefit Plan filed with the U.S. Bankruptcy Court a motion for reconsideration of the Court's May 24, 2016 order on the Coal Act Funds' Section 1114 objection. According to the report, the motion asserts that reconsideration is warranted because new evidence emerged in the days following trial. The motion explains, "The prospect that the Debtors will receive $139.5 million more than they had reason to expect on May 9 may alter what is 'necessary' to effect the Debtors' restructuring. This marginal cash balance, standing alone, would allow the Debtors to satisfy their Coal Act obligations for 20 years without disturbing the Debtors' other existing plans . . . . The Court granted the Debtors' motion on a state of facts that no longer exists. Those facts changed in the days following the Court's bench ruling, when the Debtors agreed to fund their single-employer defined-benefit pension plans on an ongoing basis, and the 'buyer' -- the lenders who will own NewCo -- agreed to finance it. They changed even more dramatically when the Debtors learned that they would be receiving significant new cash on account of the PLR assets. All this new evidence shows that rejecting the Debtors' Coal Act obligations was and is not 'necessary to permit the reorganization of the' Debtors and that 'all of the affected parties' are not 'treated fairly and equitably.' 11 U.S.C. section 1114(g) (3). The new evidence was not reasonably available or discoverable by the Funds before the May 9 hearing. At the hearing, the Debtors' witnesses were asked specifically about the status of the Debtors' business plan and whether changes were coming . . . . The Coal Act Funds have not been negotiating with the Debtors and are not in a position to know about changes to the Debtors' plan or financial projections until the Debtors choose to disclose them . . . . In light of the new evidence, the Funds request reconsideration of the 1114 Order and, so that the Coal Act Funds may present their case to the Court, that the Funds be granted leave to take targeted discovery on the terms of the Debtors' agreement to fund their single employer defined-benefit obligations and the source of funding therefore." The Court scheduled a June 28, 2016 hearing on the motion, according to BankruptcyData.com. About Alpha Natural Resources Headquartered in Bristol, Virginia, Alpha Natural -- http://www.alphanr.com-- is a coal supplier, ranked second largest among publicly traded U.S. coal producers as measured by 2014 consolidated revenues of $4.3 billion. As of August 2015, Alpha had 8,000 full time employees across many different states, with UMWA representing 1,000 of the employees. Alpha Natural Resources, Inc. (Bankr. E.D. Va. Case No. 15-33896) and its affiliates filed separate Chapter 11 bankruptcy petitions on Aug. 3, 2015, listing $9.9 billion in total assets as of June 30, 2015, and $7.3 billion in total liabilities as of June 30, 2015. The petitions were signed by Richard H. Verheij, executive vice president, general counsel and corporate secretary. Judge Kevin R. Huennekens presides over the cases. David G. Heiman, Esq., Carl E. Black, Esq., and Thomas A. Wilson, Esq., at Jones Day serve as the Debtors' general counsel. Tyler P. Brown, Esq., J.R. Smith, Esq., Henry P. (Toby) Long, III, Esq., and Justin F. Paget, Esq., serve as the Debtors' local counsel. Rothschild Group is the Debtors' financial advisor. Alvarez & Marshal Holdings, LLC, is the Debtors' investment banker. Kurtzman Carson Consultants, LLC, is the Debtors' claims and noticing agent. The U.S. Trustee for Region 4 appointed seven creditors of Alpha Natural Resources Inc. to serve on the official committee of unsecured creditors. Dennis F. Dunne, Esq., Evan R. Fleck, Esq., and Eric K. Stodola, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and William A. Gray, Esq., W. Ashley Burgess, Esq., and Roy M. Terry, Jr., Esq. at Sands Anderson PC, represent the Committee. * * * Alpha Natural Resources, Inc. on March 8, 2016, disclosed that it has filed a proposed Chapter 11 Plan of Reorganization and a related Disclosure Statement with the United States Bankruptcy Court for the Eastern District of Virginia. Together with the motion seeking approval of a marketing process for Alpha's core operating assets, these filings provide for the sale of Alpha's assets, detail a path toward the resolution of all creditor claims, and anticipate the emergence of a streamlined and sustainable reorganized company able to satisfy its environmental obligations on an ongoing basis. By selling certain assets as a going concern and restructuring the company's remaining assets into a reorganized Alpha, the company is able to provide maximum recovery to its creditors, while preserving jobs and putting itself in the best position to meet its reclamation obligations. This path will allow for a conclusion of Alpha's bankruptcy proceedings by June 30, 2016. AMERICOLD REALTY: Moody's Puts B3 CFR on Review for Upgrade ----------------------------------------------------------- Moody's Investors Service placed its ratings for Americold Realty Trust's under review for upgrade, including the B3 Corporate Family Rating (CFR), B3-PD Probability of Default Rating (PDR) and B3 (LGD3) Senior Secured Term Loan B. RATINGS RATIONALE The review follows Americold's announcement that it is planning a Senior Secured Term Loan B add-on to its existing term loan. Proceeds are expected to be used to repay a Commercial Mortgage Backed Security ("CMBS") obligation maturing in December 2016. Should the transaction be completed as planned, Moody's expects to upgrade Americold's ratings, including the CFR and the Senior Secured Term Loan B to B2 from B3. With the cash to satisfy the near term maturing CMBS, Americold will have adequate liquidity. While Americold would not have any meaningful scheduled debt maturities until 2020, Americold's sizable planned capex and dividends are in excess of cash flow from operations and the company carries a low amount of cash relative to its revenue. Americold has been, and is expected to be, free cash flow breakeven at best. The principal methodology used in these ratings was Business and Consumer Service Industry published in December 2014. This is a summary of Moody's ratings and rating actions for Americold Realty Trust: Probability of Default Rating, Placed on Review for Upgrade, currently B3-PD Corporate Family Rating, Placed on Review for Upgrade, currently B3 Senior Secured Bank Credit Facility, Placed on Review for Upgrade, currently B3 (LGD3) Americold is a leading provider of cold storage services headquartered in Atlanta, and is organized as a real estate investment trust. The firm is focused on the ownership, operation, development and acquisition of temperature-controlled real estate. Americold also provides additional services including warehouse handling and value-add logistics services to manage the entire temperature-controlled supply chain. AMERICOLD REALTY: S&P Affirms 'B+' CCR, Outlook Remains Stable -------------------------------------------------------------- S&P Global Ratings affirmed its ratings, including the 'B+' corporate credit rating, on Americold Realty Operating Partnership L.P. The outlook remains stable. S&P also revised its assessment of Americold's liquidity score to adequate from less than adequate based on the proposed refinancing of its December 2016 CMBS maturity. None of the ratings on Americold, including the rating on its upsized term loan B, were affected by the assessment change. Americold is planning to increase the size of its term loan B and use the proceeds to repay the $375 million obligation of its CMBS debt due in December 2016. S&P believes this transaction will improve Americold's liquidity by extending its near-term maturities. S&P do not expect the company's credit ratios to weaken from current levels despite the slight increase in debt. S&P expects 2016 forecasted debt-to-EBITDA and funds from operations (FFO) to debt to remain in line with its expectations of 7.5x-8.0x and 6%-8%, respectively, in 2016. For the year ended Dec., 31, 2015, debt to EBITDA was 8.1x and FFO/debt was 5.3%. S&P's ratings on Americold take into account the company's leading market position as the largest global cold storage warehousing and logistics provider, the relatively stable and less cyclical market in which it competes, its good customer and end-market diversity, and the stability and visibility of its profit and revenue streams. S&P's ratings also incorporate the company's elevated debt levels and weak credit measures and take into consideration the characteristics of the overall logistics space, which is large, very fragmented, and highly competitive. AMY E. SINES: Disclosure Statement Approval Hearing on July 19 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois set a hearing for July 19 at 10:30 a.m. to consider approval of the Second Amended Disclosure Statement explaining the Modified Plan for debtor Amy E. Sines. In the event that the Disclosure Statement is approved, the Court will immediately commence a hearing to consider confirmation of the Plan. The Plan and Disclosure Statement were filed on May 19. Objections to the approval of the disclosure statement or confirmation of the Plan must be filed by July 8. Plan votes are also due on this day. The deadline for filing complaints objecting to the Debtor's discharge under Sec. 727 of the Bankruptcy Code is July 19. Amy E. Sines filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 15-17229) on May 14, 2015. ASCENA RETAIL: S&P Lowers CCR to 'BB-' on Weak Operating Results ---------------------------------------------------------------- S&P Global Ratings said it has lowered its corporate credit rating on the Mahwah, N.J.-based specialty retailer Ascena Retail Group Inc. to 'BB-' from 'BB'. The rating outlook is stable. At the same time, S&P lowered its issue-level rating on the company's senior secured term loan facility to 'BB' from 'BB+'. The '2' recovery rating is unchanged, reflecting S&P's expectation for substantial recovery (70%-90%; lower half of the range) of principal in the event of a payment default. "The rating action reflects the company's continued weakened operating performance -- a trend we expect to continue over the next 12 months," said S&P Global Ratings credit analyst Mathew Christy. "We believe negative same-store sales across Ascena's major brands and continued EBITDA margin decline, versus fiscal year 2015, are likely for the rest of this fiscal year, despite the company's ongoing operating cost and sourcing initiatives." S&P believes Ascena, like many retail apparel peers, has lost market share to fast fashion, and online and off-price retailers because these operators offer the more compelling value and greater convenience to consumers. As such, S&P projects that the company's comparable revenue will decline by about 5% in fiscal 2016 and by 3% in fiscal 2017, resulting in weaker credit metrics than S&P's previous expectations. The stable outlook reflects S&P's expectation that although operating performance will remain weak in at least the next twelve months, EBITDA will expand on inclusion of the recently acquired Ann Inc. Unit, resulting in somewhat improved credit metrics, including debt to EBITDA in the mid-to-high 3x range at the end of fiscal 2017 ending in July 2017. A higher rating is unlikely in the near term, given S&P's expectation of the challenging operating environment and the company's negative operating trends. Still, S&P could raise the rating if the company improves operating performance with positive comparable sales supported by effective merchandising and improved results at brands such as Justice, resulting in leverage in the low 3x range or lower and FFO to debt greater than 20%. This could happen if sales grow 2% or more and EBITDA margins expand by at least 150 basis points over S&P's projections while debt remains generally consistent. S&P could lower the ratings if the company experiences sustained challenging operating performance, with meaningful negative same-store sales trends across key brands on a sustained basis and suffer continuing margin contraction. S&P believes this will cause it to reassess the company's operating efficiency and/or competitive advantage in the specialty apparel space. This could result from continued ineffective merchandising leading to comparable sales falling at a mid-to-high single digit rate. Under this scenario, adjusted leverage would likely remain greater than 4x. AVITA ARTESIAN: Taps Don Darnell as Bankruptcy Counsel ------------------------------------------------------ Avita Artesian Water, LLC, seeks permission from the Hon. Daniel S. Opperman of the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Don Darnell, Esq., who has an office in Dexter, Michigan, as bankruptcy counsel. Mr. Darnell will: a. represent the Debtor in this Chapter 11 case and advise the Debtor as to its rights, duties and powers as a debtor-in-possession; b. prepare and file all necessary statements, schedules, and other documents and to negotiate and prepare one or more plans of reorganization for the Debtor; c. represent the Debtor at all hearings, meetings of creditors, conferences, trials, and other proceedings in this case; and d. perform other legal services as may be necessary in connection with this case. Mr. Darnell will be paid $300 per hour for his services. Mr. Darnell assures the Court that he is a disinterested person, as that term is defined in the Bankruptcy Code, and does not hold nor represent an interest adverse to the estate with respect to the matters in which he is now employed. Mr. Darnell can be reached at: Don Darnell, Esq. 7926 Ann Arbor Street Dexter, MI 48130 Tel. (734) 424-5200 E-mail: dondarnell@darnell-law.com Avita Artesian Water, LLC, dba Avita Water, LLC, dba Avita Water, dba Avita, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Case No. 12-21190) on April 9, 2012. Donald C. Darnell, Esq., serves as the Debtor's bankruptcy counsel. B&B FITNESS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: B&B Fitness and Barbell, Inc. aka Elevations Health Club PO Box 295 Scotrun, PA 18355 Case No.: 16-02387 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Middle District of Pennsylvania (Wilkes-Barre) Judge: Hon. Robert N Opel II Debtor's Counsel: Philip W. Stock, Esq. LAW OFFICE OF PHILIP W. STOCK 706 Monroe Street Stroudsburg, PA 18360 Tel: 570 420-0500 Fax: 570 338-0920 Email: pwstock@ptd.net Total Assets: $413,600 Total Liabilities: $2.38 million The petition was signed by Robert Bishop, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/pamb16-02387.pdf BALTIMORE GRILL: Ch.11 Trustee Hires Fox Rothschild as Attorney --------------------------------------------------------------- Catherine E. Youngman, the Chapter 11 Trustee of Baltimore Grill, Inc., seeks permission from the Hon. Jerrold N. Poslusny, Jr. of the U.S. Bankruptcy Court for the District of New Jersey to employ Fox Rothschild LLP as attorneys for the Trustee. The Trustee requires Fox Rothschild to provide these services: (a) investigation and prosecution of claims on behalf of the Trustee and the Debtor's estate; (b) preparation of notices, applications, motions, certifications, and complaints, and the prosecution or settlement thereof, on behalf of and for the benefit of the Trustee and the debtor's estate; (c) assistance to the Trustee in connection with the liquidation of the assets of the estate as is appropriate under the circumstances; (d) preparation of correspondence to and attendance at conferences with the debtor and creditors of the estate, the Court, the Office of the United States Trustee and parties in interest; and (e) any other purpose that is necessary and proper to assist the Trustee in carrying out his duties in the administration of the estate. Fox Rothschild will be paid at these hourly rates: Michael Viscount $670 Catherine E. Youngman $575 Michael R. Herz $375 Partners $400-$700 Associates $250-$450 Paralegals $215-$315 Fox Rothschild will also be reimbursed for reasonable out-of-pocket expenses incurred. Catherine E. Youngman assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Robinson Brogg can be reached at: Catherine E. Youngman, Esq. FOX ROTHSCHILD LLP 75 Eisenhower Parkway, Suite 200 Roseland, NJ 07068 Tel: (973) 992-4800 Fax: (973) 992-9125 Baltimore Grill, Inc., aka Tony's Baltimore Grill, based in Atlantic City, N.J., filed a Chapter 11 petition (Bankr. D. N.J. Case No. 16-10816) on January 18, 2016. The Hon. Jerrold N. Poslusny Jr. presides over the case. Ira Deiches, Esq., at Deiches & Ferschmann, served as counsel. In its petition, the Debtor total assets of $1.09 million and total liabilities of $939,063. The petition was signed by Michael A. Tarsitano, director. On May 24, 2016, the Court granted the request of the U.S. Trustee to appoint a Chapter 11 trustee. Subsequently, Catherine E. Youngman was named as the Chapter 11 Trustee. The Court denied the request of the Debtor to hire Michael A. Fusco II, Esq., as Special Counsel/Provisional Director. BARBARA MAGNUSSON: Colorado Property Sold for $40,000 ----------------------------------------------------- Barry W. Frost, Chapter 11 Trustee for the estate of debtor Barbara Magnusson, won approval from the Bankruptcy Court to sell the estate's interest in real property located at 29926 Rock Point Trail, Oak Creek, Colorado 80467. Judge Christine M. Gravelle approved the sale of the property to the buyer for the sum of $40,000. The real estate brokers' commission will be paid upon proper application and approval by the Court. The Trustee's sale of the estate's interest in the Property is "AS IS" and "WHERE IS" without any representation(s) of any kind as to the condition or title. The Debtor and Rock Point Group, LLC, have waived any claimed exemption and/or right to receive payment of any proceeds of the sale transaction. The case is, In re Barbara Magnusson sought Chapter 11 protection (Bankr. D.N.J. Case No. 13-31122) on Sept. 27, 2013. The Debtor tapped Bunce Atkinson, Esq., at Atkinson & DeBartolo, as counsel. Barry W. Frost, the Chapter 11 Trustee, is represented by: LAW FIRM OF BRIAN W. HOFMEISTER, LLC Brian W. Hofmeister, Esq. 691 State Highway 33 Trenton, New Jersey 08619 Tel: (609) 890-1500 Fax: (609) 890-6961 E-mail: bwh@hofmeisterfirm.com BDF ACQUISITION: S&P Affirms 'B' CCR, Outlook Stable ---------------------------------------------------- S&P Global Ratings affirmed its 'B' corporate credit rating on BDF Acquisition Corp. The outlook is stable. At the same time, S&P also affirmed its 'B' issue-level rating on the senior secured first-lien term loan facility. The recovery rating is '3', indicating S&P's expectation for meaningful recovery (lower end of the 50% to 70% range) in the event of a payment default or bankruptcy. "BDF is a small-sized player participating in the highly competitive and fragmented furniture retailing industry with intense competition from bedding specialty stores, department stores, direct-to-consumer online retailers, and discount department stores that collectively offer a broad assortment of items with a lower concentration at entry level prices," said credit analyst Olya Naumova. "The company has plans for increasingly aggressive store growth and the risks of executing that growth, particularly in new and unproven markets, can potentially limit earnings expansion in the coming years." The stable rating outlook on BDF Acquisition Corp. reflects S&P's expectation that modestly improving fundamentals in the housing market should offset restrained U.S. consumer spending on bigger-ticket items amid a gradual economic recovery. S&P anticipates BDF will continue to effectively execute its store growth strategy and be able to decrease the leverage to below 6.0x by the end of 2016, with EBITDA growth offsetting increased debt from the debt-financed dividend recap. S&P could lower its ratings if the company's execution of store growth is weaker than expected, resulting in lower profitability and a lack of improvement in credit protection measures. This could result from slower-than-expected sales growth in mid-single-digits and a 100-basis-point (bp) decline in gross margin, causing leverage to exceed the 6.0x area on a sustained basis. Any additional leveraged distribution to the company's financial sponsors could also have a negative impact on the rating. Although unlikely in the next year, S&P could raise its ratings if the company continues to improve margins meaningfully, and successfully expand its top-line through new store growth and positive same-store sales, leading to leverage that sustains below 5x. This scenario would include S&P's view that the leverage is supported by financial policy and the likelihood of leverage increasing above 5x is minimal. In that case, S&P could favorably revise its assessment of the company's financial risk profile and financial policy score as it relates to the financial sponsor. BELK INC: Bank Debt Trades at 18% Off ------------------------------------- Participations in a syndicated loan under which BELK, Inc is a borrower traded in the secondary market at 82.30 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 2.95 percentage points from the previous week. BELK, Inc pays 450 basis points above LIBOR to borrow under the $1.5 billion facility. The bank loan matures on Nov. 19, 2022 and carries Moody's B2 rating and Standard & Poor's B+ rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. BRAND ENERGY: Bank Debt Trades at 3% Off ---------------------------------------- Participations in a syndicated loan under which Brand Energy & Infrastructure Services is a borrower traded in the secondary market at 97.30 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents an increase of 0.65 percentage points from the previous week. Brand Energy pays 375 basis points above LIBOR to borrow under the $1.225 billion facility. The bank loan matures on Nov. 12, 2020 and carries Moody's B2 rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. BUFFETS LLC: Wins Approval of $620,000 Sale of Property ------------------------------------------------------- Judge Ronald B. King on June 1, 2016, entered an order approving Buffets, LLC, et al.'s motion to sell real property. The Debtors had sought approval to sell a real property at 2426 Laurens Road, Greenville County, South Carolina, to TVE, LLC, an American record, film and television company, and its assigns in exchange for $620,000. Hilco Real Estate, LLC, the Debtors' court-approved real estate consultants and advisors, received the buyer's offer unsolicited. The Debtors had said they will entertain higher and better offers if received by counsel for the Debtors prior to any hearing on this request. About Buffets LLC Buffets LLC, et al., are one of the largest operators of buffet-style restaurants in the U.S. The buffet restaurants, located in 25 states, principally operate under the names Old Country Buffet(R), Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire Mountain(R). These locations primarily offer self-service buffets with entrees, sides, and desserts for an all-inclusive price. In addition, Buffets owns and operates an 10-unit full service, casual dining chain under the name Tahoe Joe's Famous Steakhouse(R). Buffets Holdings, Inc., filed for Chapter 11 relief in January 2008 and won confirmation of a reorganization plan in April 2009. In January 2012, Buffets again sought Chapter 11 protection and emerged from bankruptcy in July 2012. In Aug. 19, 2015, Alamo Ovation, LLC acquired Buffets Restaurants Holdings, Inc., and as a result of the merger, Buffets operated over 300 restaurants in 35 states. Down to 150 restaurants in 25 states after closing unprofitable locations, Buffets LLC and its affiliated entities sought Chapter 11 protection (Bankr. W.D. Tex. Case No. Lead Case No. 16-50557) in San Antonio, Texas, on March 7, 2016. The cases are assigned to Judge Ronald B. King. The Debtors have tapped Akerman, LLP as counsel, Bridgepoint Consulting, LLC as financial advisor and Donlin, Recano & Company as claims and noticing agent. CAESARS ENTERTAINMENT: Fights for Creditor Support for Ch. 11 Plan ------------------------------------------------------------------ Jacqueline Palank, writing for Daily Bankruptcy Review, reported that Caesars Entertainment Operating Co.returned to bankruptcy court June 7 where the casino operator's lawyers sought to rally support for its $18 billion restructuring plan despite a notable lack of support from some key creditor constituencies. According to the report, in bankruptcy court on June 7, CEOC's lawyer Nicole Greenblatt said the company has an "agreement in principle" to secure the support of its official committee of unsecured creditors for its restructuring plan and is "very close" to reaching a deal with senior bondholders. Senior bank lenders don't support the plan, she added, nor do junior bondholders, the report related. "I think we are finally in a place where we are in agreement with people other than ourselves," the report cited Ms. Greenblatt as saying. CEOC, the largest operating unit of publicly traded Caesars Entertainment Corp., was scheduled on June 7 to ask Judge A. Benjamin Goldgar to let it put its restructuring plan to a creditor vote, the report further related. But the work-in-progress nature of the plan drew objections from creditors and a federal bankruptcy watchdog, who said creditors can't vote on a plan that revolves around a settlement of multibillion-dollar legal claims that hasn't yet been inked, the report added. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc., is one of the world's largest casino companies. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's in mid-November 2010. In January 2015, Caesars Entertainment and subsidiary Caesars Entertainment Operating Company, Inc., announced that holders of more than 60% of claims in respect of CEOC's 11.25% senior secured notes due 2017, CEOC's 8.5% senior secured notes due 2020 and CEOC's 9% senior secured notes due 2020 have signed the Amended and Restated Restructuring Support and Forbearance Agreement, dated as of Dec. 31, 2014, among Caesars Entertainment, CEOC and the Consenting Creditors. As a result, The RSA became effective pursuant to its terms as of Jan. 9, 2015. Appaloosa Investment Limited, et al., owed $41 million on account of 10% second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case No. 15-10047) on Jan. 12, 2015. The bondholders are represented by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP. CEOC and 172 other affiliates -- operators of 38 gaming and resort properties in 14 U.S. states and 5 countries -- filed Chapter 11 bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and total debt of $19.8 billion as of Sept. 30, 2014. Delaware Bankruptcy Judge Kevin Gross entered a ruling that the bankruptcy proceedings will proceed in the U.S. Bankruptcy Court for the Northern District of Illinois. Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is the Debtors' restructuring advisors. Prime Clerk LLC acts as the Debtors' notice and claims agent. Judge Benjamin Goldgar presides over the cases. The U.S. Trustee has appointed seven noteholders to serve in the Official Committee of Second Priority Noteholders and nine members to serve in the Official Unsecured Creditors' Committee. The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner. CAESARS ENTERTAINMENT: Seeks Halt to Suits as Mediation Breaks Down ------------------------------------------------------------------- The American Bankruptcy Institute, citing Tracy Rucinski of Reuters, reported that the bankrupt operating unit of Caesars Entertainment Corp. asked a U.S. bankruptcy judge to block creditors from pursuing litigation against its parent on June 6, as talks aimed at resolving the complex case broke down with one group of creditors, court papers showed. According to the report, the possibility of reaching a consensual agreement on a plan to exit bankruptcy looked remote on Monday after an independent mediator brought in to broker a settlement between the feuding parties said in a filing with the U.S. Bankruptcy Court in Chicago that restructuring talks between the nonbankrupt parent and junior creditors had reached a deadlock. "It appears that there continues to be quibbling over who gets what part of the pie," retired U.S. Bankruptcy Judge Bruce Markell, who teaches law at Northwestern University, told Reuters. While Caesars has said the lawsuits are without merit, the operating unit said adverse rulings against the parent could unravel its bankruptcy exit plan, put the parent in bankruptcy "and return this restructuring to square one," the report related. In May, Caesars appointed a retired bankruptcy judge to the new role of chief restructuring officer after it warned it could be forced into Chapter 11 bankruptcy protection, the report recalled. U.S. Bankruptcy Judge Benjamin Goldgar will hold a hearing on the request to halt the New York and Delaware litigation on June 8, a day after a hearing on the bankrupt unit's disclosure statement, which describes its plan to exit Chapter 11, the report further related. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc., is one of the world's largest casino companies. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's in mid-November 2010. In January 2015, Caesars Entertainment and subsidiary Caesars Entertainment Operating Company, Inc., announced that holders of more than 60% of claims in respect of CEOC's 11.25% senior secured notes due 2017, CEOC's 8.5% senior secured notes due 2020 and CEOC's 9% senior secured notes due 2020 have signed the Amended and Restated Restructuring Support and Forbearance Agreement, dated as of Dec. 31, 2014, among Caesars Entertainment, CEOC and the Consenting Creditors. As a result, The RSA became effective pursuant to its terms as of Jan. 9, 2015. Appaloosa Investment Limited, et al., owed $41 million on account of 10% second lien notes in the company, filed an involuntary Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case No. 15-10047) on Jan. 12, 2015. The bondholders are represented by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP. CEOC and 172 other affiliates -- operators of 38 gaming and resort properties in 14 U.S. states and 5 countries -- filed Chapter 11 bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and total debt of $19.8 billion as of Sept. 30, 2014. Delaware Bankruptcy Judge Kevin Gross entered a ruling that the bankruptcy proceedings will proceed in the U.S. Bankruptcy Court for the Northern District of Illinois. Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is the Debtors' restructuring advisors. Prime Clerk LLC acts as the Debtors' notice and claims agent. Judge Benjamin Goldgar presides over the cases. The U.S. Trustee has appointed seven noteholders to serve in the Official Committee of Second Priority Noteholders and nine members to serve in the Official Unsecured Creditors' Committee. The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner. CARROLS RESTAURANT: S&P Raises CCR to 'B', Outlook Stable --------------------------------------------------------- S&P Global Ratings raised the corporate credit rating on Syracuse, N.Y.-based Carrols Restaurant Group Inc. to 'B' from 'B-'. The outlook is stable. At the same time, S&P raised the issue-level rating on the senior notes to 'B' from 'B-'. The recovery rating remains '4', indicating S&P's expectations for average recovery in the event of default, at the low end of the 30% to 50% range. "The upgrade reflects the company's solid operating results and outperformance of our expectations over the last 12 months. Carrols has done a good job of acquiring new units at a more prudent pace in the past year, while making the right investments in its existing units to bolster performance and drive customer traffic," said credit analyst Andrew Bove. "We believe the management team has demonstrated a good track record of acquiring units and operating successfully in the quick-service restaurant industry, and we expect positive trends in operating performance and credit metrics will continue over the next 12 months." The stable outlook reflects S&P's expectation that operating performance will remain good over the next 12 months as a result of continued operational improvement in newly acquired units, and lower commodity costs relative to last year. S&P also expects credit metrics will show further modest improvement in fiscal 2016, including debt to EBITDA in the mid-4.0x area. S&P could consider a negative rating action if the company is unable to sustain its recent good performance as a result of a meaningful increase in risk appetite for new unit acquisitions, along with poor execution of initiatives to improve operational efficiency in new units. This would lead to sales growth in the high-single digits (compared with our base-case forecast of low-teens sales growth) and gross margin contraction of 100 bps, resulting in debt to EBITDA above 5.0x on a sustained basis. The weaker performance would also result in lower cash flow generation, limiting the amount of capital that Carrols could reinvest into improving newly acquired units. S&P could also consider a negative rating action if the company issued meaningful additional debt as a result of a more aggressive new unit acquisition strategy. S&P could take a positive rating action if Carrols continues to deliver good operating results driven by further operational improvement of its restaurant fleet, while showing prudent risk management in its acquisitions of new Burger King units. This would result to an expansion of the company's revenue and EBITDA base, and would result in margins remaining at or above current levels, leading S&P to favorably revise its assessment of the company's business risk. S&P could also take a positive rating action if the company improves debt to EBITDA to below 4.0x on a sustained basis from continued EBITDA expansion, and S&P believes that the risk of the company re-leveraging is minimal. CEC ENTERTAINMENT: Bank Debt Trades at 3% Off --------------------------------------------- Participations in a syndicated loan under which CEC Entertainment Inc is a borrower traded in the secondary market at 97.46 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents an increase of 0.11 percentage points from the previous week. CEC Entertainment pays 350 basis points above LIBOR to borrow under the $0.725 billion facility. The bank loan matures on Feb. 18, 2021 and carries Moody's B2 rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. CHAMPAGNE SERVICES: Taps Westlake Legal Group as Counsel -------------------------------------------------------- Champagne Services, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Westlake Legal Group as its legal counsel. The services to be provided by the firm include assisting the Debtor in formulating required filings, responding to pleadings filed in its Chapter 11 case, and other legal services. The hourly billing rates of Westlake Legal Groups' professionals and paraprofessionals expected to be most actively involved in the case are: Thomas K. Plofchan, Jr. Partner $500 Whitney Lawrimore Hughes Associate $265 Jennifer M. Guida Associate $275 Christopher R. Hudspeth Associate $265 Patricia M. Naughten Paralegal $150 Mr. Plofchan disclosed in a court filing that he does not hold or represent any interest adverse to the Debtor's estate and its creditors. Westlake Legal Group can be reached through: Thomas K. Plofchan, Jr. Whitney Lawrimore Hughes 46175 Westlake Drive, Suite 320 Potomac Falls, VA 20165 Telephone: (703) 406-7616 Facsimile: (703) 444-9498 tplofchan@westlakelegal.com wlawrimore@westlakelegal.com About Champagne Services Champagne Services, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 16-11683) on May 12, 2016. CHICORA LIFE CENTER: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- The Office of the U.S. Trustee disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Chicora Life Center, LC. About Chicora Life Center Chicora Life Center, LC, sought protection under Chapter 11 of the Bankruptcy Code in the District of South Carolina (Charleston) (Case No. 16-02447) on May 16, 2016. The petition was signed by Jeremy K. Blackburn, property manager. The Debtor is represented by G. William McCarthy, Jr., Esq., at McCarthy Law Firm, LLC. The Debtor disclosed total assets of $48.3 million and total debts of $22.09 million. CHILDREN'S TRUST: S&P Retains BB Rating on CreditWatch Negative --------------------------------------------------------------- S&P Global Ratings continues to monitor developments that could affect Children's Trust's series 2002, a tobacco fee settlement transaction, and stated that the three 'BB (sf)' ratings on the transaction remain on CreditWatch with negative implications following their initial April 25, 2016, placement. On that date, S&P lowered the ratings on two bonds and placed the ratings on the three outstanding bonds on CreditWatch negative, reflecting S&P's view of the increased risk to the transaction on account of the debt moratorium legislation passed in Puerto Rico on April 6, 2016. Children's Trust made its scheduled payments on the three bonds on the May 15, 2016, payment date. S&P notes that in April 2016, the transaction received approximately $70 million from the tobacco settlement payments, a portion of which was used to make the May 15, 2016 payments, with the remainder being held in escrow for the payments due on Nov. 15, 2016. Additionally, the transaction continues to have a substantial liquidity reserve of $83 million to cover noteholder payments if collections are insufficient. The ratings on the bonds remain on CreditWatch negative, reflecting the uncertainty to the transaction presented by the Commonwealth's debt moratorium bill. S&P intends to resolve the CreditWatch negative placements on all three outstanding series of bonds after observing how the developments in the situation evolve. S&P will continue to follow further developments in Puerto Rico, including new legislation such as the Promesa (Puerto Rico Oversight, Management, and Economic Stability Act) bill pending in Congress, any legal actions undertaken by investors, the indenture trustee, or any other transaction parties, and S&P will take actions as it deems appropriate. CLAYTON B. OBERSHEIMER: Taps Amigone as Legal Counsel ----------------------------------------------------- Clayton B. Obersheimer, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of New York to hire Amigone, Sanchez & Mattrey, LLP as its legal counsel. The firm, as general counsel, will represent the Debtor during the course of its bankruptcy case in connection with all legal matters for which it may require legal assistance. The current hourly rates of the attorneys who will render services to the Debtor are: Arthur G. Baumeister, Jr. $275 Scott Bogucki $150 Mr. Baumeister disclosed in a court filing that the firm does not hold or represent any interest adverse to the Debtor's estate. The firm can be reached through: Arthur G. Baumeister, Jr. Amigone, Sanchez & Mattrey, LLP 1300 Main Place Tower Buffalo, New York 14202 Tel: (716) 852-1300 Email: abaumeister@amigonesanchez.com About Clayton B. Obersheimer Clayton B. Obersheimer, Inc. sought protection under Chapter 11 of the Bankruptcy Code in the Western District of New York (Buffalo) (Case No. 16-10901) on May 5, 2016. The petition was signed by Paul F. Hogan, Jr., chairman. The case is assigned to Judge Carl L. Bucki. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million. COALINGA REDEVELOPMENT: S&P Raises Rating on 2009C TABs to BB+ -------------------------------------------------------------- S&P Global Ratings raised its long-term rating to 'BB+' from 'BB' on Coalinga Redevelopment Agency, Calif.'s series 2009C tax allocation bonds (TABs). The outlook is stable. "The raised rating reflects our view of the agency's track record of strong cash management," said S&P Global credit analyst Cody Nelson. "The rating further reflects our view of the agency's improved maximum annual debt service coverage," Mr. Nelson added. The project area consists of approximately 1,116 acres, covering about 60% of the city of Coalinga. Coalinga, with an estimated population of 16,700, is located in the western end of the San Joaquin County in Fresno County. CONNTECH PRODUCTS: Tells Bank Its Will Procure a Buyer by June 21 ----------------------------------------------------------------- ConnTech Products Corporation has agreed to make a $12,500 payment by June 15, 2016, and a $2,500 payment by June 21, 2016, to TD Bank, N.A., its secured lender, in exchange for continued permission to use cash collateral to make payroll and pay other operating expenses. TD Bank will also receive postpetition replacement liens on the Debtor's assets. Additionally, the Debtor agrees to "procure a buyer" by June 21. The Court will review this Cash Collateral Stipulation at 2:00 p.m. on June 21, 2016. TD Bank is represented by: Scott C. DeLaura, Esq. PALUMBO & DELAURA, LLC 528 Chapel Street New Haven, CT 06511 Telephone: (203) 773-1113 About Conntech Products ConnTech Products Corporation filed a voluntary Chapter 11 petition (Bankr. D. Conn. Case No. 15-30397) on March 19, 2015. The case judge is the Hon. Julie A. Manning. Neil Crane, Esq., at the Law Offices of Neil Crane, LLC, serves as counsel to the Debtor. The Debtor estimated assets of $1 million to $10 million and debt of $500,000 to $1 million. * * * On March 21, 2016, the Debtor filed a Disclosure Statement. In the Disclosure Statement the Debtor has offered three alternatives. Either the Debtor will obtain financing and continue operating; or the Debtor will sell its business as a going concern; or the Debtor will partially sell its business. In the Disclosure Statement the Debtor proposed paying a dividend of 30% to unsecured creditors over the course of five years. The Debtor hired a business broker, Capital Recovery Group, LLC to sell the Debtor's business as a going concern. DBDFW3 LLC: Plan Proposes $500K Monthly Payment to Unsecureds ------------------------------------------------------------- DBDFW3, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, an amended disclosure statement explaining its bankruptcy-exit Plan. The Debtor proposes to pay $500 per month to the Unsecured Creditor's Pool. The Allowed Claims of Unsecured Creditors will include any claims of Linear Investment Legacy, II, on its second lien position on the property located at 10014 Cedar Lake Drive, in Aubrey, Texas. To the extent Linear asserts any lien claim against the Cedar Lake Property, it is released by the Plan, and Linear is to be treated solely as an unsecured creditor. Additionally, Option One Mortgage has asserted a second lien position on the property located at 1028 Shearwater Avenue, in Aubrey, Texas. To the extent Option One asserts any lien claim against the Shearwater Property, it is released by this Plan, and Option One as to the Shearwater Property is to be treated solely as an unsecured creditor. The Unsecured Creditors will share pro-rata in the Unsecured Creditor's Pool. The Debtor shall pay $500 per month for a period of 60 months into the Unsecured Creditors Pool. The Unsecured Creditors will be paid quarterly on the last day of each calendar quarter. Payments to the Unsecured Creditors will commence on the last day of the first full calender quarter after the Effective Date. The Debtor may pre-pay the Unsecured Creditors at any time. Based upon the Debtor's Schedules that Class 11 Claims will be approximately $100,000. A full-text copy of the Amended Disclosure Statement is available at http://bankrupt.com/misc/txnb15-44258-45.pdf DBDFW3, LLC (Bankr. N.D. Tex., Case No. 15-42327) filed a Chapter 11 Petition on June 9, 2015. The Debtor is represented by: Eric A. Liepins, Esq. DEASY ASSOCIATES: Unsecureds to Get 100% Under Plan --------------------------------------------------- Deasy Associates, LLC, filed with the U.S. Bankruptcy Court for the District of Massachusetts, Central Division, a proposed Chapter 11 disclosure statement for its post-confirmation modified plan of reorganization, which estimate that the amount of the dividend to general unsecured creditors will be equal to approximately 100% of the creditors' allowed claims. The Debtor's Modified Plan is a "pot" Modified Plan and relies upon the proceeds from the following activities to fund the Modified Plan: (i) the sale of an 0.80 acre lot of land on Little Sandy Pond Road in Plymouth; (ii) the subdivision and sale of an adjacent 11.24 acre lot; and (iii) the proceeds from the recovery of a default judgment from an adversary proceeding against Coastlines Limited Partnership (docket 15-04003). The Debtor asserts that the Distribution Fund will be sufficient to satisfy all administrative, secured, and priority claims, and to make a one-time lump sum distribution to the holders of allowed unsecured claims. The Modified Plan is deemed to be a "pot" Modified Plan because the amount of the dividend to unsecured creditors will be the amount available in the Distribution Fund after satisfaction of the Debtor' administrative and priority claims. If the Distribution Fund is sufficient, a 100% dividend will be paid to all creditors with allowed claims, and remaining funds will be paid to the Debtor. In the event the Distribution Fund is not sufficient to fund a 100% dividend, allowed claims will be paid on a pro rata basis. In addition to the satisfaction of the holders of administrative and priority claims, and a distribution to unsecured creditors, the Modified Plan contemplates the satisfaction of the claim secured by a mortgage on the Debtor's real property. A full-text copy of the Disclosure Statement is available at http://bankrupt.com/misc/mab14-41882-134.pdf Deasy Associates, LLC, owner of an 11.24-acre parcel of land in Plymouth, Massachusetts, filed a Chapter 11 petition (Bankr. D. Mass., Case No. 14-41882) on August 25, 2014. The Debtor is represented by: Michael J. Tremblay, Esq. 277 Main St. Marlborough, MA 01752 Tel. 508-485-4500 Fax. 508-449-3969 Email: attorney@tremblay.com -- and -- Matthew W. McCook, Esq. 277 Main Street Marlborough, MA 01752 Tel. (508) 281-1090 Email: matt@mccooklaw.com DECK CHASSIS: Moody's Assigns B1 CFR, Outlook Stable ---------------------------------------------------- Moody's Investors Service assigned a B1 Corporate Family Rating to Deck Chassis Acquisition Inc. and a B3 rating to the $325 million senior secured notes due 2023 that Deck Chassis Acquisition plans to issue. The proceeds of the notes will be used to help finance the acquisition of and to repay existing indebtedness of Direct ChassisLink, Inc., a leading provider of chassis equipment to the intermodal transportation industry. The ratings outlook is stable. RATINGS RATIONALE The B1 CFR considers DCLI's position as one of three main providers of chassis rental equipment for the transportation of containerized cargo, its attractive profit margins and ability to generate positive free cash flow, balanced against high financial leverage and the cyclical nature of the demand for transportation equipment. DCLI has a fleet of approximately 120,000 chassis that it makes available through equipment pools to steamship liners, beneficial cargo owners, motor carriers and other logistics companies. Access to port terminals, capital required to build a sizeable fleet and the efficiency of the pool structure in the industry, establish barriers to enter this market and mitigate the risk of equipment ownership by DCLI's customers. While a substantial majority of the company's revenues is derived from multi-year contractual arrangements, DCLI remains susceptible, however, to the risk of an economic downturn, specifically to lower US import and export volumes. Moody's expects EBITDA margins to increase in 2016 to just over 30%, calculated on a Moody's adjusted basis, up from close to 27% in 2015. The increase in margins is primarily due to a significant reduction of costs associated with the acquisition of a fleet of chassis in 2015. DCLI's ability to manage expenses for chassis maintenance and repair, often carried out by high-cost non-DCLI employees at port terminals, is critical to sustaining EBITDA margins at these levels. Adjusted debt/EBITDA is expected to be approximately 5 times, which Moody's considers high for a B1 rated company that operates in a cyclical industry. Taking into account an increase in requisite investments to maintain the current fleet age of around 15 years, free cash flow is expected to be $40 to 50 million annually, benefiting from DCLI's nominal cash tax expenses due to available net operating tax losses. Moody's anticipates that DCLI will continue pursuing fleet acquisitions, which would reduce cash available for debt repayment. Moody's considers Deck Chassis Acquisition's liquidity to be good, taking into account its ability to generate considerable free cash flow, the absence of material debt maturities until 2021 and the $125 million that is expected to be available under the new $350 million asset-based revolving credit facility upon closing of the transactions. The stable outlook is predicated on Moody's expectation of a very modest increase in chassis usage, an increase in the per diem rate for merchant haulage and a continuing shift from billing steamship liners towards merchant haulage with higher daily rates. The outlook also reflects Moody's expectation of an increase in EBITDA margins to just over 30%. The new $325 million senior secured notes due 2023 are rated B3, two notches below the B1 CFR. This reflects the higher ranking in Moody's Loss Given Default analysis of the new $350 million asset-based revolving credit facility that has a first-priority claim on DCLI's assets compared to the second-priority security interest of the notes. The ratings could be upgraded if Deck Chassis Acquisition is able to sustain EBITDA margins of at least 30%, while lowering debt/EBITDA to 4 times and increasing EBIT/interest expense to 2.5 times. The ratings could be downgraded if Moody's expects that EBITDA margins remain at the 2015 level of close to 27%, debt/EBITDA approaches 5.5 times, EBIT/interest expense decreases to 1.5 times, or if free cash flow falls meaningfully below $40 million. Assignments: Issuer: Deck Chassis Acquisition Inc. Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Senior Secured Regular Bond/Debenture, Assigned B3 (LGD5) Outlook Actions: Issuer: Deck Chassis Acquisition Inc. Outlook, Assigned Stable The principal methodology used in these ratings was Global Surface Transportation and Logistics Companies published in April 2013. Deck Chassis Acquisition Inc. intends to acquire and to merge with LJ Chassis Holdings, Inc., the direct parent of Direct ChassisLink, Inc. Headquartered in Charlotte, NC, Direct ChassisLink, Inc. is a leading provider of equipment and asset management software services to the U.S. intermodal industry. Revenues for the last 12 months ended March 2016 were approximately $343 million. DESERT HOT SPRINGS: S&P Hikes Rating on 3 Bond Tranches to B- ------------------------------------------------------------- S&P Global Ratings raised its long-term rating and underlying rating (SPUR) to 'B-' from 'CCC+' on Desert Hot Springs Redevelopment Agency, Calif.'s merged project area (MPA) series 2006, series 2008A-1, and series 2008A-2 tax allocation bonds (TABs). The outlook is stable. "The raised ratings reflect our view of the project area's improving assessed value," said S&P Global Ratings credit analyst Jean Lee. "The rating further reflects our view of the city's improved financial position," Ms. Lee added. The city is acting as successor agency to the redevelopment agency, except regarding the housing functions, which were assumed by the Desert Hot Springs Housing Authority. The MPA is located in Desert Hot Springs, in California's Coachella Valley. The city is a tourist draw for its natural hot mineral water spas and is historically a lower-income community than neighboring Palm Springs and other more affluent resort communities. DISPOSAL TEJAS: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Disposal Tejas, LLC P.O. Box 3174 Ozona, TX 76943 Case No.: 16-60064 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Northern District of Texas (San Angelo) Judge: Hon. Robert L. Jones Debtor's Counsel: Todd Jeffrey Johnston, Esq. MCWHORTER COBB & JOHNSON, LLP 1722 Broadway Lubbock, TX 79401 Tel: (806)762-0214 Fax: (806)762-8014 E-mail: tjohnston@mcjllp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Francisco J. McGee, manager. A list of the Debtor's 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb16-60064.pdf DORAL FINANCIAL: Plan Confirmation Set for July 25; Outline Okayed ------------------------------------------------------------------ BankruptcyData.com reported that the U.S. Bankruptcy Court approved Doral Financial's Disclosure Statement and scheduled a July 25, 2016 hearing to consider the Amended Plan of Reorganization. According to the Disclosure Statement, "The goal of the Plan is to resolve outstanding Claims against and Equity Interests in the Debtor. Although the Debtor does not intend to re-commence commercial banking operations through a new subsidiary following the Effective Date, the proposed Plan will permit the Debtor's estate to continue winding down its operations and liquidating its assets in an organized way that will maximize the value of its assets for distribution to creditors. In particular, the Plan will permit the Debtor to make substantial distributions to creditors in the near term and best preserve the Debtor's ability to monetize the Tax Attributes, which has the potential to meaningfully increase creditor recoveries." The final ballot by which interested parties must file ballots and/or objections for the Plan is July 11, 2016. About Doral Financial Corp. Doral Financial Corp. (the "DFC") is a holding company whose primary operating asset was equity in Doral Bank. DFC maintains offices in New York City, Coral Gables, Florida and San Juan, Puerto Rico. The company has three wholly-owned subsidiaries: Doral Properties, Inc., Doral Insurance Agency, LLC, and Doral Recovery, Inc. On Feb. 27, 2015, regulators placed Doral Bank into receivership and named the Federal Deposit Insurance Corp. as receiver. Doral Bank served customers through 26 branches located in New York, Florida, and Puerto Rico. DFC sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 15-10573) in Manhattan on March 11, 2015. The case is assigned to Judge Shelley C. Chapman. It estimated $50 million to $100 million in assets and $100 million to $500 million in debt as of the bankruptcy filing. DREAMSCAPES LLC: Hires Mitchell & Hammond as Counsel ---------------------------------------------------- Dreamscapes, LLC asks for permission from the U.S. Bankruptcy Court for the Western District of Oklahoma to employ Mitchell & Hammond as counsel, retroactive to May 5, 2016 filing of the voluntary petition and notice of opportunity for hearing. The Debtor requires legal counsel to assist it in all matters relating to the bankruptcy estate. Mitchell & Hammond will be paid at these hourly rates: Attorneys $300 Legal Assistants and Law Clerks $80 Mitchell & Hammond will also be reimbursed for reasonable out-of-pocket expenses incurred. Gary D. Hammond of Mitchell & Hammond, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Mitchell & Hammond can be reached at: Gary D. Hammond, Esq. MITCHELL & HAMMOND 512 N.W. 12th Street Oklahoma City, OK 73103 Tel: (405) 216-0007 Fax: (405) 232-6358 E-mail: gary@okatty.com Dreamscapes, LLC, filed a Chapter 11 bankruptcy petition (Bankr. W.D. Okla. Case No. 16-11755) on May 5, 2016. The Debtor is represented by Gary D. Hammond, Esq., at Mitchell & Hammond. DRM SALES & SUPPLY: Sale of Ford F-150 to Contractor Approved ------------------------------------------------------------- DRM Sales & Supply, LLC, sought and obtained approval from the U.S. Bankruptcy Court for the Western District of Texas to sell a 2010 Ford F-150 XLT Supercrew, VIN 1FTFW1CV4ADE76487, to Mr. Charles "Bo" Jeffcoat for the cash price of $10,000. The Vehicle has 100,653 miles on it. The Vehicle is in fair to good condition with moderate wear to the interior leather. The Vehicle’s mechanics are in good condition. Mr. Jeffcoat is purchasing the Vehicle in conjunction with his agreement to provide sales services as an independent contractor to the Debtor on a commission basis. The sale was approved by Judge Ronald B. King on June 1, 2016. The Debtor's attorneys: MULLIN HOARD & BROWN, L.L.P. David R. Langston, Esq. Brad W. Odell, Esq. P.O. Box 2585 Lubbock, Texas 79408-2585 Telephone: (806) 765-7491 Facsimile: (806) 765-0553 E-mail: drl@mhba.com bodell@mhba.com About DRM Sales & Supply DRM Sales & Supply, LLC's business consists of buying and distributing steel casing pipe, tubing, and other such supplies used in the drilling operations of oil rigs engaged in the exploration for oil and gas throughout the United States. DRM Sales & Supply sought Chapter 11 protection (Bankr. W.D. Tex. Case No. 16-70028) in Midland, Texas, on Feb. 26, 2016. David R. Langston, Esq., at Mullin Hoard & Brown, L.L.P., serves as counsel to the Debtor. The Debtor estimated assets of $1 million to $10 million and debt of $10 million to $50 million. DYNAMIC INVESTMENTS: Proposes to Sell Property for $16,500 ---------------------------------------------------------- Dynamic Investments, LLC, on June 2, 2016, filed a motion to sell a 1.26-acre property in Laurel, Jones County, Mississippi, for $16,500 to John Manson DuBose III. Everbank holds a first, valid deed of trust on the property. The claim of the bank will attach to the sale proceeds. The Debtor says the sale of the property is justified, as it will further the liquidation of the Debtor's assets. The Debtor's attorneys: Craig M. Geno Jarret P. Nichols LAW OFFICES OF CRAIG M. GENO, PLLC 587 Highland Colony Parkway Ridgeland, MS 39157 Tel: (601) 427-0048 Fax: (601) 427-0050 Dynamic Investments, LLC, sought Chapter 11 protection (Bankr. S.D. Miss. Case No. 14-51334) on Aug. 25, 2014. The case judge is the Hon. Katharine M. Samson. Craig M. Geno, Esq., at the Law Offices of Craig M. Geno, PLLC, serves as counsel. The Debtor estimated $1 million to $10 million in assets and debt. EP ENERGY: S&P Alters Outlook to Negative on Reduced Borrowing Base ------------------------------------------------------------------- S&P Global Ratings affirmed its 'B' corporate credit rating on Houston-based exploration and production (E&P) company EP Energy LLC. S&P also revised the outlook to negative from stable. At the same time, S&P raised the senior secured ratings on the company's term loans due 2018 and 2019 to 'B' from 'B-', and revised the recovery rating to '3', reflecting S&P's expectation of meaningful (50% to 70%, upper half of range) recovery in a payment default from '5'. S&P also affirmed the 'CCC+' issue-level rating on the company's senior unsecured debt. The recovery rating on the debt remains '6', indicating S&P's expectation of negligible (0% - 10%) recovery in the event of a payment default. "The outlook revision to negative reflects our assessment of the recent reduction in EP's borrowing base and the expected impact it will have on liquidity and recovery expectations for the company's debt," said S&P Global Ratings credit analyst Paul Harvey. The lower borrowing base puts greater emphasis on liquidity, and in particular EP's need to address the November 2017 repayment of its $467 million term loan. Additionally, the lower borrowing base results in lower potential first-lien debt in S&P's recovery analysis and improves recovery prospects for the second-lien debt, although senior unsecured bonds are unaffected. The negative outlook reflects the need for EP to refinance its $467 term loan on a timely basis, while maintaining debt leverage measures below unsustainable levels. S&P could lower ratings if EP fails to address the $467 million term loan repayment on a timely basis. S&P could revise liquidity to less than adequate if EP fails to refinance or repay the term loan prior to November 2016, and as a result lower ratings. Additionally, if S&P expects debt leverage to reach unsustainable levels, it could lower ratings. Both scenarios could result in a downgrade of over 1 notch. S&P could stabilize ratings if EP can successfully address the term loan maturity while S&P maintains its current expectations for debt leverage. EXPERT GLOBAL: S&P Puts 'CCC+' CCR on CreditWatch Positive ---------------------------------------------------------- S&P Global Ratings said it placed its 'CCC+' corporate credit rating on Plano, Texas-based Expert Global Solutions LLC on CreditWatch with positive implications. "The CreditWatch placement follows Alorica's announcement that it has signed a definitive agreement to acquire EGS," said S&P Global Ratings credit analyst Rose Askinazi. S&P expects EGS's existing debt will be repaid when the transaction closes. S&P expects to resolve the CreditWatch placement when the transaction closes, at which time S&P will withdraw its ratings on EGS. FAIRWAY GROUP: Amends Joint Prepackaged Reorg Plan -------------------------------------------------- BankruptcyData.com reported that Fairway Group Holdings filed with the U.S. Bankruptcy Court a First Amended Joint Prepackaged Chapter 11 Plan of Reorganization. According to documents filed with the Court, "The Secured Loan Claims are Allowed pursuant to section 506(a) of the Bankruptcy Code in the aggregate amount of $278,987,519.42. On the Effective Date, Reorganized Holdings shall contribute to Reorganized Fairway Acquisition, as a capital contribution, 100% of the New Common Stock to be issued on the Effective Date and 100% of the Subordinated Holdco Loan, 90% of such shares and all of such term loan shall then be distributed on behalf of Fairway Acquisition to holders of Allowed Secured Loan Claims pursuant to Section 4.3 of the Plan, the remaining 10% of the New Common Stock shall be distributed on behalf of Fairway Acquisition to DIP Term Loan Lenders pursuant to Sections 2.1 and 2.4 of the Plan." About Fairway Headquartered in New York, Fairway Group Holdings Corp. is a food retailer offering customers a differentiated one-stop shopping experience "Like No Other Market". Fairway claims to have established itself as a leading food retailing destination in the Greater New York City metropolitan area, with stores that emphasize an extensive selection of fresh, natural and organic products, prepared foods and hard-to-find specialty and gourmet offerings, along with a full assortment of conventional groceries. Fairway operates 15 locations in the Greater New York City metropolitan area, including four Fairway Wines & Spirits locations. Seven Fairway stores are located in New York City and the remainder of Fairway's stores are located in New York (outside of New York City), New Jersey and Connecticut. Fairway Group, et al., filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Proposed Lead Case No. 16-11241) on May 2, 2016. The petitions were signed by Edward C. Arditte as co-president and chief financial officer. The Debtors have engaged Weil, Gotshal & Manges LLP as counsel, Norton Rose Fulbright US LLP as special corporate counsel, Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts counsel, Alvarez & Marsal as financial advisor and Prime Clerk LLC as claims and noticing agent. * * * The original version of the Debtors' plan provides that holders of allowed prepetition general unsecured claims, including trade, landlord and employees claims against the Debtors, will be paid, or otherwise treated, in the ordinary course as if the Debtors had not commenced these Chapter 11 cases. The Debtors' senior secured lenders will receive their pro-rata share of: i) 90% of new common stock in reorganized holdings; ii) a $45 million last out exit term loan; and iii) a $39 million unsecured subordinated loan. FANNIE MAE & FREDDIE MAC: How FHFA Redefined Capital In Court ------------------------------------------------------------- By David Fiderer -- davidfiderer@gmail.com -- "Who would be so reckless as to send cash dividends out of an undercapitalized financial institution?" I wrote in National Mortgage News in 2014. "The whole idea seems oxymoronic. Which may be the point. If you divorce words from their original meanings, you end up in an endless loop of doublespeak." Hence the extended confusion during oral arguments before a three-judge D.C. Circuit panel in Perry Capital v. Lew. At times, the discussion over the legality of the GSEs 100% earnings sweep seemed less like a legal colloquy and more like theater of the absurd. Early on in the proceedings, plaintiffs' counsel Ted Olson focused on an obvious and pivotal fact. The payment of cash dividends reduces corporate equity; whereas the payment of preferred dividends in kind leaves corporate equity unchanged. "The dividends could have been paid in kind," explained Olson, arguing against the sweep. Such payment, "would have preserved the capital of the institution[s]." This truism prompted a spirited retort by Judge Patricia Millett: JUDGE MILLETT: Well, surely that decision whether to require dividends in cash or in kind is exactly the type of judgment that's going to be conferred on the [GSE's] conservator that we could superintend, would you agree with that? MR. OLSON: Well, but what we're talking about here is the -- JUDGE MILLETT: But would you agree that we certainly couldn't say, we couldn't say the conservator erred and enjoined them, or a declaratory judgment, they should have done a liquidation rather than preference rather than cash. With all due respect, Judge Millett's assertions are a direct assault on basic concepts of corporate law, insolvency law, corporate credit, and accrual accounting, all of which are embedded within the federal statutes governing conservatorship and regulation of the GSEs. The Federal Housing Finance Agency has one job, to boost the financial health of the Fannie Mae and Freddie Mac. Period. FHFA has no authority to do anything else, no power to "reform housing finance," no power to modify the original GSE charters, which were enacted by Congress. FHFA as regulator is obligated to promote the safety and soundness of the GSEs. FHFA as conservator is obligated to restore the soundness and solvency of the GSEs. So if cash dividends reduce solvency, and dividends in kind maintain solvency, then it follows that the conservator has no real choice. He must elect to pay senior preferred dividends in kind. He can cite no legal authority nor any legitimate business purpose to elect anything else. None of the cash dividends were ever defensible. If FHFA had done its legal duty, the GSEs' equity would be at least $250 billion higher than it is today. Though people like to insinuate otherwise, "restoring solvency" equals recapitalization, the same way that six equals half a dozen. Which is why all the chatter in the courtroom about whether GSE quarterly earnings might cover cash dividends was really off topic. As was the chatter about any future capability to support a 10% cash dividend. I initially noted how the former FHFA director, Ed DeMarco, had redefined conservatorship when he voiced his opposition to recapitalization. Newly unsealed documents in a related lawsuit, Perry Capital v. U.S., seem to confirm that the 100% earnings sweep was designed to reduce GSE equity to zero. As a rationale for the earnings sweep, DeMarco redefined equity, conflating it with debt. To recap, with debt there's a deadline to make a cash payment to the investor; with equity there is never any deadline to make a cash payment to the investor. Moreover, it's oxymoronic to say a company "pays back" an equity investment; it only pays back a debt, which is extinguished upon repayment. If a stockholder wants to recover his initial principal, he must sell his stock. Each quarter, the board of directors reviews the company's financial position to determine whether a cash dividend would unduly compromise the company's ability to be self-sustaining. Under their fiduciary duties, directors are bound not to approve any cash dividend that unduly compromises the company's health. So the GSEs were never obligated to pay cash dividends within any time horizon, which is why they received no benefit, no consideration, in exchange for a new obligation designed to permanently drain them of all equity. How could FHFA explain its upside-down cockamamie stance? Why, it simply redefined the meaning of capital, which redefined everything. Howard Cayne, counsel for FHFA, invoked "a new capital paradigm," a term of doublespeak that debases the meaning of Federal statutes beyond all recognition. Cayne said that FHFA, as conservation and regulator, had the power to fix a "a new capital paradigm," which could set minimum capital ratios equal to zero. The GSEs no longer needed capital, he argued, because of a Treasury commitment to provide financial support. And since FHFA is acting within its regulatory prerogative, there's nothing that GSE shareholders, or the courts, can do about it. Judge Douglas Ginsberg wanted to be sure he heard right: JUDGE GINSBURG: So, there seems to be in the statute [referencing 12 U.S.C. Sec. 4614] a whole typology of classifications, adequate recapitalized, and then under-capitalized, and within that significantly under-capitalized, critically under-capitalized, okay? MR. CAYNE: That's correct, Your Honor. JUDGE GINSBURG: Was there a change? MR. CAYNE: Yes, Your Honor, that entire system by virtue of the Director's action was set aside, there is an issuance by the Director that says this system doesn't apply. In order to assure the ongoing safety and soundness of the GSEs, FHFA was given authority, as part of the Housing and Economic Recovery Act of 2008, to set minimum capital ratios for the GSEs. And it used that authority to remake capital standards altogether. You may wonder, aren't zero capital standards antithetical to the concept of safety and soundness? Indeed they are. Are cash dividends not antithetical to the conservator's explicit duty to restore the soundness and solvency of the GSEs? Quite true. But clever people, especially lawyers, can rationalize away anything. Corruption in finance is often rooted in corruption of language. And the business world is replete with failures caused by executives who believed in "a new capital paradigm." Which was precisely the point, as newly unsealed documents reveal. By diverting Fannie’s and Freddie’s profits, "we've closed off possibility that they ever go (pretend) private again," said White House official James Parrott in a 2012 email describing the 100% sweep. It wasn't hard to figure out, which was why in 2014 I wrote, "DeMarco's definition of 'conservatorship' looks, sounds and smells like a fraudulent conveyance scheme, which improperly transfers assets out of a company so as to impede the rightful legal claims of other stakeholders." FEDERAL IDENTIFICATION: Court OKs June 22 Auction for Assets ------------------------------------------------------------ Judge Ashely M. Chan on June 1, 2016, granted debtor Federal Identification Card Co. Inc., approval of procedures for the submission of competing bids for the proposed sale pursuant to the Asset Purchase Agreement dated June 1, 2016, between the Debtor and stalking horse bidder PTM Promotional, LLC. An auction (the "Auction") shall be held at the offices of Ciardi Ciardi & Astin located at One Commerce Square, 2005 Market Street, Suite 3500, Philadelphia, Pennsylvania 19103, on June 22, 2016 at 2:00 p.m. prevailing Eastern Time. The Debtor shall afford each prospective bidder due diligence access to the Assets. To participate in the auction, initial bids must be submitted by June 16, 2016. As reported in the June 1, 2016 edition of the TCR, PTM Promotional has signed a contract to buy the Debtor's assets for $143,000, absent higher and better offers. To the extent the Debtor ultimately contracts to sell the assets to a competing bidder, the Debtor recognizes the Buyer as a "stalking horse" and thus agreed to an expense reimbursement in the amount of $40,000 payable to the Buyer at the closing. Federal Identification Card Co. Inc. is represented by: Jennifer C. McEntee, Esq. Albert A. Ciardi, III, Esq. CIARDI CIARDI & ASTIN One Commerce Square 2005 Market St., Suite 3500 Philadelphia, PA 19103 About Federal Identification Card Federal Identification Card Co. Inc. was founded in 1972. The company's line of business includes providing commercial art or graphic design services for advertising agencies, publishers, and other business and industrial users. Federal Identification Card Co., Inc. d/b/a PTM Sport sought protection under Chapter 11 of the Bankruptcy Code in the Eastern District of Pennsylvania (Philadelphia) (Case No. 16-13496) on May 17, 2016. The petition was signed by Louis N. Leof, president. The case is assigned to Judge Ashely M. Chan. The Debtor estimated both assets and liabilities in the range of $1 million to $10 million. FEDERAL-MOGUL CORP: Bank Debt Trades at 4% Off ---------------------------------------------- Participations in a syndicated loan under which Federal-Mogul Corp is a borrower traded in the secondary market at 96.40 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents an increase of 0.40 percentage points from the previous week. Federal-Mogul pays 300 basis points above LIBOR to borrow under the $0.7 billion facility. The bank loan matures on April 4, 2018 and carries Moody's B1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. FILMED ENTERTAINMENT: Wants July 6 Plan Solicitation Deadline ------------------------------------------------------------- Filmed Entertainment Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to extend the exclusive period for the Debtor to solicit acceptance of the Chapter 11 plan by 30 days, through and including July 6, 2016. Objections to the request must be filed by June 20, 2016, at 4:00 p.m. (New York Time). A hearing on the request is set for June 21, 2016, at 12:00 p.m. (New York Time). Unless extended, the Debtor's Exclusive Solicitation Period will expire on June 6, 2016. The current Exclusive Solicitation Period is set to expire 17 days before the voting deadline and a month before the confirmation hearing. The Debtor wants additional time to solicit and tabulate votes on the Plan. During the first 10 months of the Chapter 11 case, the Debtor has made considerable good faith progress in not only analyzing its financial affairs, but also closing the sale of substantially all of its assets and filing a viable Chapter 11 liquidating plan. From the onset of this Chapter 11 case, the Debtor has worked closely with its secured creditor and the Official Committee of Unsecured Creditors, the two largest creditors in this Chapter 11 case. Prior to filing, the Debtor circulated numerous drafts of the Disclosure Statement and Plan to the Committee and the Secured Creditor, incorporating many of their comments into the Plan and Disclosure Statement. The Debtor remains engaged in extensive discussions with the Committee and the Secured Creditor regarding key provisions of the Plan and the liquidation trust agreement. In light of the adjournment of the voting deadline and confirmation hearing, the Debtor requires additionally time to resolve any objections that may be raised to the Plan. The Debtor has resolved a number of claims, including a successful resolution of the Pension Benefit Guaranty Corporation's lien and alleged secured claim. The Debtor continues to pay its undisputed postpetition obligations in the ordinary course of its business, and is not delinquent on any undisputed postpetition obligations. The Debtor is represented by: GRIFFIN HAMERSKY P.C. Scott A. Griffin, Esq. Michael D. Hamersky, Esq. 485 Madison Avenue, 7th Floor New York, New York 10022 Tel: (212) 710-0338 Fax: (212) 710-0339 About Filmed Entertainment Inc. Filmed Entertainment Inc. owned and operated the "Columbia House DVD Club," a direct-to-customer distributor of movies and television series in the United States. FEI conducts its business through physical catalogues and through the -- http://www.columbiahouse.com/Web site. FEI was historically active in the musical compact disc business, but exited the music business in 2010. Founded in 1955 as a division of CBS Inc. to sell vinyl records and cassette tapes, FEI is a unit of Pride Tree Holdings, Inc., which acquired FEI in December 2012. On Aug. 10, 2015 FEI filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.N.Y. Case No. 15-12244) in Manhattan, New York. The case is pending before the Honorable Shelley C. Chapman. The Debtor tapped Griffin Hamersky P.C. as counsel and Prime Clerk LLC as claims and noticing agent. The Debtor estimated assets of $1 million to $10 million and debt of $50 million to $100 million. The U.S. Trustee for Region 2 appointed five creditors of Filmed Entertainment to serve on the official committee of unsecured creditors. The Committee is represented by Lowenstein Sandler LLP. FIRST BRONX: Plan Confirmation Hearing Set for July 7 ----------------------------------------------------- First Bronx, LLC, made minor changes to the disclosure statement explaining its Third Amended Plan of Reorganization ahead of the hearing to consider Confirmation of the Plan scheduled for July 7, 2016, at 10:00 a.m., Eastern Standard Time. Objections, if any, to Confirmation of the Plan must be filed and served on or before June 30, 2016 at 5:00 p.m. The Plan provides for the members of the Debtor to make a significant capital contribution to fund the Plan, and the payment to certain creditors and funding from the rental income going forward. The Plan also provides for the restructuring of the Debtor's secured obligations and the payment of 50% to the allowed unsecured creditors class from the cash on hand, the contribution from the members and from the operation of the Debtor's business post-confirmation. The secured creditor's claim will be reduced by the payment of the Contribution Amount1 from the members. After the Effective Date, the rental income generated from the Property, including from the Billboard, will fund all future Plan payments. The new term of the Secured Creditor's note will be five years. A redlined version of the disclosure statement explaining the Third Amended Plan of Reorganization is available at http://bankrupt.com/misc/nysb14-22047-96.pdf The Debtor is represented by: Robert M. Sasloff, Esq. A. Mitchell Greene, Esq. ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK P.C. 875 Third Avenue, 9th Fl. New York, NY 10022 Tel: 212-603-6300 Email: rms@robinsonbrog.com amg@robinsonbrog.com First Bronx LLC (Bankr. S.D.N.Y., Case No. 14-22047) filed a Chapter 11 Petition on January 13, 2014. The case is assigned to Judge Robert D. Drain. The Debtor's Counsel is Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Greene Genovese & Gluck, P.C., in New York. The petition was signed by David Goldwasser, GC Realty Advisors LLC, managing member. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/nysb14-22047.pdf FIRST QUANTUM: S&P Revises Outlook to Stable & Affirms 'B-' CCR --------------------------------------------------------------- S&P Global Ratings revised its outlook on Canada-based copper miner First Quantum Minerals Ltd (FQM) to stable from negative. S&P affirmed its 'B-' long-term corporate credit ratings on FQM and our 'B-' issue ratings on FQM's senior unsecured debt. The outlook revision follows FQM's completion of its US$712 million sale of Kevitsa, a nickel-copper-platinum mine in Finland, to Sweden-based metals company Boliden. S&P also factors in FQM's refinancing of a US$1.815 billion bank loan (not rated). These developments have materially improved FQM's liquidity position and helped reduce the company's financial leverage. S&P also views positively that the company lowered its production costs to mitigate the impact of lower copper prices and the reduction in the Zambian royalty rate. S&P's fair assessment of FQM's business risk profile is supported by its low-cost position and high operating margins. These strengths are offset, however, by risks associated with sizable expansion projects and operating in Zambia, where royalty, tax, and electricity costs are subject to uncertainty, as is the supply of electricity to Sentinel, a copper project in northwest Zambia. Concentration risk to Zambia is also a factor weighing on FQM's creditworthiness, although this is likely to be less of a constraint with the expected commissioning of its large open-pit copper development project Cobre Panama in 2018. S&P classifies FQM's financial risk profile as highly leveraged. FQM saw adjusted net debt to EBITDA of 6.8x in 2015 and deeply negative free operation cash flow (FOCF) due to heavy expansionary capital expenditures (capex). Still, S&P expects FQM will be able to reduce adjusted leverage to about 6x, despite high capex, thanks to cost cuts and incremental volumes. The stable outlook reflects S&P's expectation that FQM will be able to cover its material negative discretionary cash flows with its available liquidity sources in the coming two years, and reduce its adjusted debt to EBITDA to about 6x through cost reduction and volume increases. A downgrade could be triggered by a further decline in copper or gold prices, operational set-backs, adverse country risk developments in Zambia, or negative financial policy decisions. In S&P's view, this could lead to a liquidity deterioration, including a covenant breach. S&P could consider a one-notch upgrade to 'B' if FQM's earnings improve beyond S&P's base-case assumption, resulting in comfortable headroom under bank loan covenants and an adjusted debt to EBITDA ratio of about 5x. FORTESCUE METALS: Bank Debt Trades at 7% Off -------------------------------------------- Participations in a syndicated loan under which Fortescue Metals Group Ltd is a borrower traded in the secondary market at 92.86 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 0.61 percentage points from the previous week. Fortescue Metals pays 275 basis points above LIBOR to borrow under the $4.95 billion facility. The bank loan matures on June 13, 2019 and carries Moody's Ba2 rating and Standard & Poor's BB+ rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. GA DESIGN: Hires Vilarino & Associates as Counsel ------------------------------------------------- G.A. Design & Sourcing Corp., seeks permission from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Javier Vilarino, Esq. of the Law Firm Vilarino & Associates as its Chapter 11 counsel. The Debtor requires Mr. Vilarino with the assistance of Vilarino & Associates to: a. advise the debtor with respect to its duties, powers, and responsibilities in this case under the laws of the United States and Puerto Rico in which the debtor in possession conducts its operations, do business, or is involved in litigation; b. advise the debtor in connection with a determination whether a reorganization is feasible and, if not, helping debtor in the orderly liquidation of its assets; c. assist the debtor with respect to negotiation with creditors for the purpose of arranging the orderly liquidation of assets and/or for proposing a viable plan of reorganization; d. prepare, on behalf of the debtor, the necessary complaints, answers, orders, reports, memoranda of law and/or any other legal paper of documents; e. appear before the bankruptcy court, or any court in which debtors assert a claim interest or defines directly or indirectly related to this bankruptcy case; f. perform other legal services for debtors as may be required in these proceedings or in connection with the operation of/and involvement with debtor’s business, including but not limited to notarial services; g. employ other professional services, if necessary. Vilarino & Associates will be paid at these hourly rates plus any costs and expenses: Javier Vilarino, Esq. $235 Associates $170 Law Clerks $100 Paralegals $85 The Debtor has paid $5,000 retainer. Javier F. Vilarino, Esq., capital member of Vilarino & Associates, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Vilarino & Associates may be reached at: Javier F. Vilarino, Esq. Vilarino & Associates LLC PO BOX 9022515 San Juan, PR 00902-2515 Tel: 787-565-9894 E-mail: jvilarino@vilarinolaw.com GA Design & Sourcing Corp., based in Caguas, Puerto Rico, filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 3:16-bk-04166) on May 25, 2016. The Debtor is represented by Javier Vilarino, Esq., at Vilarino & Associates, LLC. Judge Brian K. Tester presides over the case. GA INVESTORS: Hires Vilarino & Associates as Bankr. Counsel ----------------------------------------------------------- G.A. Investors, S.E., seeks permission from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Javier Vilarino, Esq. of the Law Firm Vilarino & Associates as its Chapter 11 counsel. The Debtor requires Mr. Vilarino with the assistance of Vilarino & Associates to: a. advise the debtor with respect to its duties, powers, and responsibilities in this case under the laws of the United States and Puerto Rico in which the debtor in possession conducts its operations, do business, or is involved in litigation; b. advise the debtor in connection with a determination whether a reorganization is feasible and, if not, helping debtor in the orderly liquidation of its assets; c. assist the debtor with respect to negotiation with creditors for the purpose of arranging the orderly liquidation of assets and/or for proposing a viable plan of reorganization; d. prepare, on behalf of the debtor, the necessary complaints, answers, orders, reports, memoranda of law and/or any other legal paper of documents; e. appear before the bankruptcy court, or any court in which debtors assert a claim interest or defines directly or indirectly related to this bankruptcy case; f. perform other legal services for debtors as may be required in these proceedings or in connection with the operation of/and involvement with debtor’s business, including but not limited to notarial services; g. employ other professional services, if necessary. Vilarino & Associates will be paid at these hourly rates plus any costs and expenses: Javier Vilarino, Esq. $235 Associates $170 Law Clerks $100 Paralegals $85 The Debtor has paid $5,000 retainer. Javier F. Vilarino, Esq., capital member Vilarino & Associates, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Vilarino & Associates may be reached at: Javier F. Vilarino, Esq. Vilarino & Associates LLC PO BOX 9022515 San Juan, PR 00902-2515 Tel: 787-565-9894 E-mail: jvilarino@vilarinolaw.com About GA Investors, S.E. GA Investors, S.E. filed a Chapter 11 petition (Bankr. D. P.R. Case No. 3:16-bk-04169) on May 25, 2016. The Debtor is represented by Javier Vilarino, Esq., at Vilarino & Associates, LLC. Judge Brian K. Tester presides over the case. GARDENS REGIONAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Gardens Regional Hospital and Medical Center, Inc. fka Tri-City Regional Medical Center 21530 South Pioneer Boulevard Hawaiian Gardens, CA 90716 Case No.: 16-17463 Nature of Business: Health Care Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Hon. Ernest M. Robles Debtor's Counsel: Samuel R Maizel, Esq. DENTONS US LLP 601 South Figueroa Street, Suite 2500 Los Angeles, CA 90017 Tel: 213-892-2910 E-mail: samuel.maizel@dentons.com - and - John A Moe, Esq. DENTONS US LLP 601 S Grand Ave 14th Fl Los Angeles, CA 90017-5704 Tel: 213-892-4905 Fax: 213-623-9924 E-mail: john.moe@dentons.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Brian Walton, chairman of the Board. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cacb16-17463.pdf GATES GROUP: Bank Debt Trades at 3% Off --------------------------------------- Participations in a syndicated loan under which Gates Group is a borrower traded in the secondary market at 96.75 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents an increase of 0.70 percentage points from the previous week. Gates Group pays 325 basis points above LIBOR to borrow under the $2.49 billion facility. The bank loan matures on June 18, 2021 and carries Moody's B2 rating and Standard & Poor's B+ rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. GO GREEN PARTNERS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Go Green Partners, L.P. 1401 Foch Street, Suite 180 Fort Worth, TX 76107 Case No.: 16-42250 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Hon. Russell F. Nelms Debtor's Counsel: Michael A. McConnell, Esq. KELLY HART & HALLMAN LLP 201 Main Street, Suite 2500 Ft. Worth, TX 76102 Tel: (817) 810-5487 Fax: (817)8 78-9280 E-mail: michael.mcconnell@khh.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Louis E. Martin, III, president, Go Green GenPar, LLC, G.P. The Debtor did not include a list of its largest unsecured creditors when it filed the petition. GONZALEZ GROUP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Gonzalez Group Jonesville, LLC 935 Anderson Rd Litchfield, MI 49252 Case No.: 16-03083 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Hon. John T. Gregg Debtor's Counsel: Kerry D. Hettinger, Esq. KERRY HETTINGER, PLC 4341 South Westnedge, Suite 1202 Kalamazoo, MI 49008 Tel: 269-344-0700 E-mail: khett57@hotmail.com Total Assets: $1.94 million Total Liabilities: $2.46 million The petition was signed by Felix G. Gonzalez, II, president. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/miwb16-03083.pdf GONZALEZ GROUP: Requests Access to Comerica's Cash Collateral ------------------------------------------------------------- Gonzalez Group Jonesville, LLC, tells the Honorable John T. Gregg that it is in immediate need for an order authorizing the use of cash collateral pledged to repay about $6 million owed to Comerica Bank in order to meet payroll obligations to its 50 employees, sustain its operation and preserve its assets for the benefit of its creditors. The Debtor proposes to grant Comerica postpetition replacement liens, and projects that cash receipts will exceed cash disbursements by about $67,000 during the next 13 weeks. The Debtor tells the Court that to reduce recurring losses, Comerica recently required the Litchfield operation to shut down. The Debtor believes the closed operation should have a liquidation value of about $2 million for Comerica. Further, there are various offers being discussed for the sale of its Engineering and Tennessee units, which the Debtor believes will result in about $3 million for Comerica. Comerica is pushing for additional asset sales. Auto parts manufacturer Gonzalez Group Jonesville, LLC, filed a chapter 11 petition (Bankr. W.D. Mich. Case No. 16-03083) on June 6, 2016, and is represented by Kerry Hettinger, Esq., in Kalamazoo, Mich. GONZALEZ HOLDINGS: Case Summary & 5 Unsecured Creditors ------------------------------------------------------- Debtor: Gonzalez Holdings, LLC 935 Anderson Rd Litchfield, MI 49252 Case No.: 16-03081 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Hon. John T. Gregg Debtor's Counsel: Kerry D. Hettinger, Esq. KERRY HETTINGER, PLC 4341 South Westnedge, Suite 1202 Kalamazoo, MI 49008 Tel: 269-344-0700 E-mail: khett57@hotmail.com Total Assets: $6 million Total Liabilities: $6.38 million The petition was signed by Felix G. Gonzalez, II, president. A list of the Debtor's five largest unsecured creditors is available for free at http://bankrupt.com/misc/miwb16-03081.pdf GR HOSPITALITY: Case Summary & 5 Unsecured Creditors ---------------------------------------------------- Debtor: GR Hospitality Management, LLC 1707 Highway 16 South Graham, TX 76450 Case No.: 16-70179 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Northern District of Texas (Wichita Falls) Judge: Hon. Harlin DeWayne Hale Debtor's Counsel: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 12720 Hillcrest Road, Suite 625 Dallas, TX 75230 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: joyce@joycelindauer.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kirnbir S. Grewal, president. A list of the Debtor's five largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb16-70179.pdf GROVE PLAZA: Wants Okay to Use Oversecured Lenders' Cash Collateral ------------------------------------------------------------------- Glove Plaza Partners, LLC, tells the Bankruptcy Court that it needs to use rents pledged to repay approximately $11.3 million owed to Calmwater Capital 3, LLC, to continue operating. Accordingly, Grove Plaza asks the Court for permission to use Calmwater's cash collateral. The Debtor estimates its operating expenses at about $69,000 per month. The Debtor tells the Court that it owns seven of thirteen parcels of real property comprising the "Grove Plaza" shopping center located at 1151-1161 Walnut Street and 2404-2540 S. Grove Avenue (2522 South Grove Avenue) in Ontario, Calif. Grove Plaza comprises some 122,605 square feet adjacent to the 60 Freeway (serving 216,000 cars per day) and Grove Avenue (serving 20,399 cars per day), less than four miles from the Ontario International Airport (served more than 4 million passengers in 2015) and seven miles from both the Citizens Business Bank Arena and the Ontario Mills Fashion District. Three distinct groupings of the Debtor-Owned Portion of the shopping center are valued at a total "breakup value" of $20,790,000.00. The Debtor-Owned Portion is valued at $16,500,000 if sold as a whole. Accordingly, Calmwater is oversecured by 30% to 44%. The Debtor tells the Court that its chapter 11 filing has its origins in the partial collapse of the Albertson's chain of grocery stores. Specifically, an Albertson's store was one of a handful of anchor tenants of the shopping center, although the Debtor did not own the Albertson's parcel. The store closed in 2012, resulting in increased vacancies throughout the shopping center. In 2013, the Debtor acquired the Albertson's parcel through bridge financing from Calmwater Capital 3, LLC, with a plan to lease the remaining vacant portion of the former Albertson's space to a new anchor tenant and improve the attractiveness and value of the shopping center overall. Due to unanticipated delays, that financing went into default. After marketing, offers and due diligence, the Debtor entered into lease negotiations with Ross Dress For Less, Inc. for the remaining vacant portion of the former Albertson's space. Subject to Bankruptcy Court approval, the Debtor expects that Ross will enter into a lease agreement shortly. Headquartered in Redwood Shores, Cal., Grove Plaza Partners, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 16-30531) on May 13, 2016, estimating its assets and liabilities at between $10 million and $50 million. The petition was signed by George A. Arce, Jr., manager. Judge Dennis Montali presides over the case. Reno F.R. Fernandez, Esq., at MacDonald Fernandez LLP serves as the Debtor's bankruptcy counsel. GYMBOREE CORP: S&P Raises CCR to 'CCC+', Outlook Negative --------------------------------------------------------- S&P Global Ratings raised its corporate credit rating on San Francisco-based children's apparel retailer The Gymboree Corp. to 'CCC+' from 'SD'. The outlook is negative. "The upgrade follows our review of Gymboree's operating prospects, liquidity, and capital structure after the completion of the recent tender offer. The rating reflects Gymboree's limited liquidity and our view that improvement in operating performance may be insufficient for the company to refinance its debt ahead of maturity, absent a more substantial restructuring of the capital structure. Liquidity is thin and revolver availability could diminish due to working capital needs, higher capital spending this year, and potential for more debt repurchases. Despite lower interest expense from the debt buyback and improving operating performance as management's initiatives (inventory management, product sourcing, pricing strategies, and expense management) gain traction, we believe progress so far is insufficient and therefore continue to view the company's capital structure as unsustainable and liquidity as less than adequate," S&P said. The negative outlook reflects the potential for further distressed debt transactions, liquidity pressure over the next 12 months, and S&P's view that the capital structure is unsustainable with refinancing requirements in late 2017. S&P could lower its ratings on Gymboree if liquidity and operating performance deteriorates such that S&P envisions a default scenario over the next 12 months. S&P would also consider a lower rating if the company has not made meaningful progress in refinancing or extending the maturity on the term loan maturity by the first half of 2017, leading the company to seek a restructuring of its capital structure. Although unlikely over the near term, S&P could raise the rating if Gymboree address the upcoming debt maturities such that S&P do not expect further distressed transactions, improve liquidity through significant profit gains resulting in stable positive free cash flow and adequate cushion of compliance with financial covenants. HAGGEN HOLDINGS: Wants Aug. 5 Exclusive Plan Filing Deadline ------------------------------------------------------------ Haggen Holdings, LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive period for the Debtor to file a plan of reorganization by 60 days, through and including Aug. 5, 2016, and the exclusive period for the Debtors to solicit acceptance of the plan by 60 days, through and including Oct. 3, 2016. A hearing on the date is set for July 7, 2016, at 10:00 a.m. (ET). Objections to the request must be filed by June 20, 2016, at 4:00 p.m. (ET). The Debtors have, among other things: (i) obtained entry of an order approving the sale of the majority of the Debtors' core stores and related assets to Albertson's, who will continue to operate stores as a going concern, (ii) worked to effectuate that sale, including entering into amendments to the asset purchase agreement governing the Core Stores Sale in order allow the Debtors to capitalize on certain additional assets that were not included in, and to clarify certain terms of, the agreement, with the initial closing occurring on June 2 and the final closing scheduled to occur later this month; (iii) conducted additional GOB Sales, miscellaneous asset sales, and Pharmacy Sales with respect to the Debtors' stores that had not already been liquidated or sold; (iv) worked with Albertson's to identify hundreds of executory contracts to be assumed and assigned to Albertson's in connection with the Core Stores Sale; (v) negotiated and obtained approval of replacement debtor in possession financing, which was approved by the Court on March 30, 2016; (vi) continued to work with various lease and contract counterparties to resolve cure objections adjourned in connection with Non-Core Stores Sale as well as commenced resolving those related to the Core Stores Sale; (vii) entered into an agreement with Spirit SPE HG 2015-1, LLC, landlord for several of the Debtor's store locations prior to the Core Stores Sale, and Albertson's to reach full and final settlements relating to the disputes among parties with respect to the Spirit leases; and (xiii) entered into, and obtained court approval for, additional amendments to the Debtors' post-petition credit agreement. The Debtors tell the Court that accomplishing these tasks has been a labor intensive process, fully occupying the Debtors' representatives and professionals. In light of these circumstances, including, without limitation, effectuating the Core Stores Sale, the Debtors submit that the requested extensions are both appropriate and necessary to afford the Debtors with sufficient time to adequately prepare a viable Chapter 11 plan and related disclosure statement. The Debtors' Chapter 11 cases are sufficiently large and complex to warrant the requested extension of the Exclusive Periods. Prior to the Petition Date, the Debtors owned and operated a chain of over 160 grocery stores located across five states and employed approximately 10,880 employees. Since the commencement of these Chapter 11 cases, the Debtors have sold more than 80 of their non-core stores, are in the process of closing the sale for nearly 30 of the core stores to Albertson's, and have rejected approximately 50 non-residential real property leases relating to certain of their non-core stores. Since the Petition Date, the Debtors, their management, and their advisors have worked diligently to preserve and maximize the value of their assets for the benefit of all stakeholders by, among other things, obtaining approval of the GOB Sales, the Pharmacy Sales, the Non-Core Stores Sales, and the Core Stores Sale. The Debtors are currently focusing their efforts on closing the Core Stores Sale and anticipate finishing that process by the end of this month. At this stage, an extension of the Exclusive Periods will allow the Debtors to negotiate a Chapter 11 plan, while continuing to devote the necessary resources towards maximizing the value of the Debtors' estates through the Court-approved sale process, among other things. The Debtors continue to timely pay their undisputed post-petition obligations. The Debtors' counsel can be reached at: YOUNG CONAWAY STARGATT & TAYLOR, LLP Matthew B. Lunn, Esq. Robert F. Poppiti, Jr., Esq. Ian J. Bambrick, Esq. Ashley E. Jacobs, Esq. Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1256 E-mail: mlunn@ycst.com rpoppiti@ycst.com ibambrick@ycst.com ajacobs@ycst.com and STROOCK & STROOCK & LAVAN LLP Frank A. Merola, Esq. Sayan Bhattacharyya, Esq. Elizabeth Taveras, Esq. 180 Maiden Lane New York, New York 10038 Tel: (212) 806-5400 Fax: (212) 806-6006 E-mail: fmerola@stroock.com sbhattacharyya@stroock.com etaveras@stroock.com About Haggen Holdings Headquartered in Bellingham, Washington, Haggen was founded in 1933 as a single grocery store. From 1933 to 2014, Haggen grew into a 30 store family-run grocery chain, with stores located in the northwestern United States. From 2011 to 2014, Haggen reduced its store base to 18, including a stand-alone pharmacy location. Haggen rapidly expanded in 2014 and 2015, and, as of the Petition Date, Haggen owned and operated 164 stores through three operating companies: Haggen, Inc., Haggen Opco North, LLC and Haggen Opco South, LLC. Haggen Holdings, LLC, and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 15-11874 to 15-11879) on Sept. 8, 2015, with the intention of reorganizing, or selling as a going concern, their stores for the benefit of their creditors. The petitions were signed by Blake Barnett, the chief financial officer. The Debtors estimated assets of $50 million to $100 million and estimated liabilities of $10 million to $50 million. Young, Conaway, Stargatt & Taylor, LLP, is serving as the Debtors' local counsel. Stroock & Stroock & Lavan LLP serves as the Debtors' general counsel. Alvarez & Marsal North America, LLC, acts as the Debtors' financial advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. In September 2015, T. Patrick Tinker, assistant U.S. Trustee for Region 3, appointed seven creditors to the official committee of unsecured creditors. HANISH, LLC: Has Continued Access to Hotel Lenders' Cash Collateral ------------------------------------------------------------------- Hanish, LLC, borrowed $5.9 million from The National Republic Bank of Chicago in 2007 and another $450,000 in 2009, and pledged all of its assets as collateral to repay those obligations. The amount owed now totals about $6.3 million, including non-default interest. In exchange for replacement liens and $20,000 monthly payments, the Bank has agreed to allow Hanish to use cash collateral to pay operating expenses. The Honorable Bruce A. Harwood placed his stamp of approval on an order memorializing this agreement earlier this week. The Bank is represented by: Alexander G. Rheaume, Esq. Riemer & Braunstein LLP Three Center Plaza Boston, MA 02108 E-mail: arheaume@riemerlaw.com Hanish, LLC owns and operates a 59-unit Fairfield Inn & Suites by Marriott in Hooksett, N.H. The company sought chapter 11 protection (Bankr. D. N.H. Case No. 16-10602) on Apr. 26, 2016, and is represented by Steven M. Notinger, Esq., at Notinger Law, PLLC, in Nashua, N.H. The Debtor estimated its assets and debts at less than $10 million at the time of the filing. HANOVER PARMENTER: Seeks to Hire Peres Zoppo as Special Counsel --------------------------------------------------------------- Hanover Parmenter Union, LLC seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire Peres, Zoppo & Associates LLC as its special counsel. The firm will represent the Debtor in a lawsuit it filed against East Boston Savings Bank in Suffolk Superior Court. Peres Zoppo's professionals will be compensated on an hourly basis for their services. Associated attorneys will receive $175 per hour while partners will receive $265 per hour. Isaac Peres and Joseph Zoppo, both partners at the firm, disclosed in a court filing that they do not hold or represent any interest adverse to the Debtor's estate. Peres Zoppo can be reached through: Isaac Peres, Esq. Joseph Zoppo, Esq. Peres, Zoppo & Associates LLC One International Place, Suite 1400 Boston, MA 02110 Tel: 617-535-7533 Fax: 781-251-6649 E-mail: Info@PeresZoppo.com About Hanover Parmenter Hanover Parmenter Union, LLC sought protection under Chapter 11 of the Bankruptcy Code in the District of Massachusetts (Boston) (Case No. 16-11784) on May 11, 2016. The petition was signed by Alyson Toombs, manager of Silvermine Development Partners LLC. The case is assigned to Judge Melvin S. Hoffman. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million. HARLAND CLARKE: S&P Affirms 'B+' CCR on Proposed Debt Financing --------------------------------------------------------------- S&P Global Ratings said it has affirmed its 'B+' corporate credit rating on San Antonio, Texas-based media delivery, payment solution, and marketing services provider Harland Clarke Holdings Corp. (HCHC). The rating outlook remains stable. At the same time, S&P affirmed its 'BB-' issue-level and '2' recovery ratings on the company's senior secured first-lien debt, which consists of a $750 million first-lien term loan due May 2018 ($388 million outstanding after the proposed refinancing), a $600 million first-lien term loan due August 2019 ($566 million outstanding as of March 31, 2016), $270 million senior secured notes due Aug. 2018, and $275 million senior secured notes due March 2020. The '2' recovery rating indicates our expectation for substantial recovery (70%-90%; lower half of the range) of principal in the event of a payment default. S&P also affirmed its 'B-' issue-level rating on HCHC's senior unsecured fixed-rate notes due March 2021 ($708.5 million outstanding as of March 31, 2016). The recovery rating remains '6', indicating S&P's expectation for negligible recovery (0%-10%) of principal for lenders in the event of a payment default. Additionally, S&P assigned its 'BB-' issue-level rating and '2' recovery rating to the company's proposed $800 million first-lien senior secured term loan due December 2019. The '2' recovery rating indicates S&P's expectation for substantial recovery (70%-90%; lower half of the range) of principal in the event of a payment default. "Our 'B+' corporate credit rating on HCHC is based on our view that the company's business risk profile remains weak," said S&P Global Ratings credit analyst Thomas Hartman. S&P's assessment reflects the structural pressures on HCHC's two primary business: the Harland Clarke segment, which accounted for 36% of revenue in 2015, and the Valassis segment, which generated 59% of revenue. The rating also reflects the company's limited organic growth opportunities. Harland Clarke faces competitive pressure from the increased prevalence of alternative forms of payment. S&P believes HCHC has managed this pressure relatively well and will continue to do so. Check volume declines have moderated, and HCHC has effectively implemented price increases to offset these declines, similar to those of its primary competitor, Deluxe Corp. Separately, Valassis' shared mail business faces increased competition from various online media channels, and it is subject to marketing budget pressures at consumer packaged goods companies. Still, despite these structural pressures, S&P believes Valassis provides diversification, increased scale, and a market-leading niche business. "The stable rating outlook reflects our expectation that HCHC's leverage will remain below 5x, the company will continue to generate good discretionary cash flow, and it will refinance or extend upcoming debt maturities at similar interest rates at least 12 months before maturity" said Mr. Hartman. S&P could lower its corporate credit rating on HCHC if S&P believes the company will have difficulty refinancing or extending its 2018 debt maturities prior to 12 months from maturity, which would negatively affect our liquidity profile assessment. S&P would also take into consideration any adverse change in cost of refinancing. A downgrade could also occur if the company experiences intensified structural pressures that cause significant volume declines in check and coupon printing and result in S&P reassessing HCHC's business risk profile and whether leverage in the high-4x area supports the 'B+' rating. Although unlikely over the next 12 months, S&P could raise the rating if the company reduces leverage to the 3x-4x area on a sustained basis. This would require either EBITDA growth, the company making voluntarily debt repayments using most of its discretionary cash flow, or a combination of the two. An upgrade would also depend on S&P's comfort with Harland Clarke's financial policy and S&P's expectation that the company would not increase leverage above 4x on a sustained basis with debt-financed dividends or acquisitions. HERCULES OFFSHORE: Asks Court for Permission to Use Cash Collateral ------------------------------------------------------------------- Hercules Offshore, Inc., and its debtor affiliates filed a motion with the U.S. Bankruptcy Court for the District of Delaware seeking authority to obtain access to cash collateral to, among other things, effectuate a controlled wind-down of their operations and to implement a successful monetization of their assets. The Debtors said they also rely on the Cash Collateral to fund working capital, capital expenditures, research and development efforts, and for other general corporate purposes. Hercules Offshore, as borrower, is a party to a credit agreement, dated as of Nov. 6, 2015, with Jefferies Finance LLC, as administrative agent and collateral agent for the lenders. The Prepetition Credit Agreement provides for a term loan facility in the amount of $450 million. The obligations under the Prepetition Credit Agreement are secured by substantially all personal and real property of the Debtors and Non-Debtor Subsidiary Guarantors including Cash Collateral. As of the Petition Date, the Debtors have Cash Collateral in the approximate amount of $208 million. The Debtors seek to provide adequate protection to the Prepetition Secured Parties for any Collateral Diminution in the form of, among other things, the adequate protection liens, adequate protection claims and adequate protection payments (including a one-time $35 million principal payment on the First Lien Claims, monthly payments equal to the amount of interest accruing on the First Lien Claims at the applicable non-default rate under the Prepetition Credit Agreement and the payment of the fees and expenses of the advisors for the First Lien Agent, the Ad Hoc Group, Luminus and Soros, two of the largest holders of First Lien Claims). The one-time $35 million principal payment was agreed to as part of the negotiations between the Debtors and the Consenting First Lien Lenders over the terms of the Restructuring Support Agreement, which resulted in an agreement to allow holders of General Unsecured Claims and HERO Common Stock to receive recoveries before holders of First Lien Claims are paid in full. The Agent and the Prepetition Lenders holding in excess of 99% of the Prepetition Debt have consented to the use of Prepetition Collateral, including Cash Collateral, and the proposed adequate protection package, according to Court documents. About Hercules Offshore Hercules Offshore, Inc. and its debtor and non-debtor subsidiaries are providers of shallow-water drilling and marine services to the oil and natural gas exploration and production industry globally. Hercules Offshore and 13 of its subsidiaries each filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Proposed Lead Case No. 16-11385) on June 5, 2016. The petition was signed by Troy L. Carson as vice president. The Debtors listed total assets of $1.06 billion and total debts of $521.37 million as of March 31, 2016. The Debtors have hired Akin Gump Srauss Hauer & Feld LLP as general bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as co-counsel, PJT Partners, Inc. as financial advisor, FTI Consulting, Inc. as restructuring advisor, and Prime Clerk LLC as claims, notice and balloting agent. HERCULES OFFSHORE: Jefferies Agrees to Cash Collateral Use ---------------------------------------------------------- In order to pay operating expenses between now and acceptance and approval of their Joint Prepackaged Chapter 11 Plan under which it will conduct an orderly wind-down of their operations, Hercules Offshore, Inc., and its debtor-affiliates need access to cash collateral pledged to Jefferies Finance LLC under the terms of a Nov. 2015 credit agreement. During the 13-week period ending Sept. 13, 2016, the Debtors project their cash disbursements will exceed revenues by just over $75 million. A full-text copy of the Debtors' consensual request to use their secured lenders' cash collateral is available at https://goo.gl/belQFp at no charge. Jefferies is represented by: Christopher G. Boies, Esq. Michael Rupe, Esq. King & Spalding LLP 1185 Avenue of the Americas New York, NY 10036 Hercules Offshore, Inc., and its debtor-affiliates provide shallow-water drilling and marine services to the oil and natural gas exploration and production industry globally, and filed chapter 11 petitions (Bankr. D. Del. Case Nos. 16-11385 through 16-11398) on June 5, 2016. The Debtors are represented by a team of lawyers at Akin Gump Strauss Hauer & Feld LLP, obtain financial advice from PJT Partners, Inc., and restructuring advice from FTI Consulting, Inc. Primer Clerk serves as the Debtors' Claims Agent. Hercules Offshore disclosed $1.06 billion in assets and $521.37 million in liabilities at the time of the filing. HERCULES OFFSHORE: Moody's Lowers PDR to D-PD on Bankr. Filing -------------------------------------------------------------- Moody's Investors Service downgraded Hercules Offshore, Inc.'s Probability of Default Rating to D-PD from Caa1-PD. Concurrently, Moody's affirmed Hercules' Caa1 Corporate Family Rating and Caa1 first lien senior secured term loan rating. This action follows the company's announcement that it had filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware, seeking to pursue a pre-packaged Chapter 11 plan (Plan). Hercules had previously emerged from Chapter 11 bankruptcy on Nov. 6, 2015. The outlook remains negative. Issuer: Hercules Offshore, Inc. Downgrades: Probability of Default Rating, Downgraded to D-PD from Caa1-PD Affirmations: Corporate Family Rating, Affirmed Caa1 Senior Secured Term Loan, Affirmed Caa1 (LGD 1 from LGD 3) Outlook Actions: Issuer: Hercules Offshore, Inc. Outlook, Remains Negative RATINGS RATIONALE The downgrade of Hercules's PDR to D-PD is a result of the bankruptcy filing. Hercules' other ratings reflect Moody's view of the potential overall recoveries. Under the terms of the Plan, all of the company's assets are expected to be marketed for sale, and those left unsold at the completion of the Chapter 11 process will be placed into a wind-down vehicle. The company announced that lenders holding approximately 99.7% of the company's first lien debt voted to accept the Plan, while Hercules continues to solicit votes from its shareholders. Shortly following this rating action, Moody's will withdraw all ratings for the company consistent with Moody's practice for companies operating under the purview of the bankruptcy courts wherein information flow typically becomes much more limited. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in December 2014. Headquartered in Houston, Texas, Hercules Offshore, Inc. owns and operates a fleet of jackup rigs and liftboats. HERCULES OFFSHORE: Proposes July 11 as Limited Bar Date ------------------------------------------------------- Hercules Offshore, Inc., and its debtor affiliates filed a motion with the Bankruptcy Court seeking entry of an order (a) establishing a limited bar date for filing proofs of claim only for holders of (i) contingent and unliquidated claims, including, but not limited to, claims asserting liability for personal injury, and (ii) claims arising from a single occurrence or transaction in an amount in excess of $300,000. The Debtors propose that the Court establish 5:00 p.m., prevailing Eastern Time, on July 11, 2016, as the last date and time for each entity to file proofs of claim based on Specified Claims that arose prepetition against any Debtor. According to Matthew B. Harvey, Esq., at Morris, Nichols, Arsht & Tunnell LLP, counsel for the Debtors, the purpose of providing a Limited Bar Date for Specified Claims is to provide the Debtors and the Ad Hoc Group with the ability to discover and monitor any large claims that may be filed against the Debtors' estates. He said that this is particularly important where, as here, the Plan provides for payment in full of all General Unsecured Claims, and the Plan further provides that, upon the Effective Date, the Wind Down Entity will establish reserves for, among other things, certain disputed claims, including General Unsecured Claims that are disputed or not yet allowed as of the effective date of the Plan. In addition, Mr. Harvey noted, the establishment of a Limited Bar Date for the Specified Claims is an important part of the Restructuring Support Agreement and the transactions that have been agreed to by the Debtors and the Ad Hoc Group. The Plan is also subject to a condition to effectiveness requiring that the aggregate amount of the Specified Claims estimated by each of the Debtors in their Modified Schedule E/F, plus the amount of all Specified Claims not estimated in such schedules, not exceed $33 million, unless waived by the Requisite Consenting Lenders in their sole discretion. The Debtors do not anticipate that there will be many holders of Specified Claims in their Chapter 11 cases. In fact, the Modified Schedules E/F filed by the Debtors include no claims in a liquidated amount in excess of $300,000 and 56 contingent, unliquidated and disputed claims. The Debtors believe that clearly established procedures for the filing of these limited claims against their estates will limit confusion on the part of holders of those claims and aid their attempt to expedite the Chapter 11 process. About Hercules Offshore Hercules Offshore, Inc. and its debtor and non-debtor subsidiaries are providers of shallow-water drilling and marine services to the oil and natural gas exploration and production industry globally. Hercules Offshore and 13 of its subsidiaries each filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Proposed Lead Case No. 16-11385) on June 5, 2016. The petition was signed by Troy L. Carson as vice president. The Debtors listed total assets of $1.06 billion and total debts of $521.37 million as of March 31, 2016. The Debtors have hired Akin Gump Srauss Hauer & Feld LLP as general bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as co-counsel, PJT Partners, Inc. as financial advisor, FTI Consulting, Inc. as restructuring advisor, and Prime Clerk LLC as claims, notice and balloting agent. HERCULES OFFSHORE: S&P Lowers CCR to 'D' on Chapter 11 Filing ------------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on Houston-based Hercules Offshore Inc. to 'D' from 'CC'. S&P also lowered the issue-level rating on the company's senior secured term loan to 'D' from 'CC'. The recovery rating on the senior secured term loan remains '3', reflecting S&P's expectation of meaningful (higher end of the 50% to 70% range) recovery for lenders in the event of a payment default. "The downgrade follows the company's announcement that it has filed Chapter 11 bankruptcy to facilitate an orderly asset sale," said S&P Global Ratings credit analyst Kevin Kwok. The company recently entered into a restructuring support agreement with lenders holding about 99% of the first-lien senior secured credit facility (consisting entirely of term loans). According to the restructuring support agreement, HERO was required to commence solicitation of votes to accept or reject the plan by May 31, 2016, and commence a chapter 11 filing by June 6, 2016. HERCULES OFFSHORE: Seeks to Establish Procedures to Protect NOLs ---------------------------------------------------------------- Hercules Offshore, Inc. (HERO) and its debtor affiliates seek authority from the Bankruptcy Court to establish notification and hearing procedures regarding the trading of equity securities in HERO that must be complied with before trades or transfers of those securities become effective. The Debtors propose that any purchase, sale, disposition or other transfer of Equity Securities in violation of the procedures will be void ab initio. The Debtors have experienced recent losses from the operation of their business. As a result, the Debtors estimate that their federal income tax net operating losses are approximately $166 million as of the Petition Date, which amounts could be even higher when they emerge from Chapter 11. Pursuant to Sections 59(e) and 172(b) of the Internal Revenue Code of 1986, as amended and the United States Department of Treasury Regulations promulgated thereunder, the Debtors may be able to carry back and then forward NOLs, tax credits, and other tax attributes to offset future taxable income and tax liability so that they may obtain a cash refund and improved liquidity in the future. The Debtors' NOLs consist of losses generated in individual tax years, each of which can be "carried forward" for up to 20 subsequent tax years to offset the Debtors' future taxable income, thereby reducing future aggregate tax obligations. However, the Debtors may lose the ability to use their NOLs if they experience an ownership change for federal income tax purposes. To prevent this potential loss of property of their estates, the Debtors request Court approval of the procedures to govern the transfers of common stock of HERO, any contingent purchases, warrants, convertible debts, puts, calls, stock subject to risk of forfeiture or contracts to acquire stock and any other beneficial interest during the pendency of these Chapter 11 cases. "The Equity Trading Procedures are designed to protect the Debtors from losing the benefit of all or any portion of their NOLs in connection with transfers of Equity Securities that may trigger an ownership change under IRC section 382 and/or severely limit the Debtors' ability to use their NOLs to shelter any taxable income or gain resulting from any sale of assets in the course of the chapter 11 cases. The Debtors require a mechanism to monitor and possibly object to ownership changes resulting from transfers of Equity Securities in order to permit the Debtors to use their NOLs to the fullest extent possible or to shelter any taxable income or gain resulting from any sale of assets, thereby maximizing value for all stakeholders," said Matthew B. Harvey, Esq., at Morris, Nichols, Arsht & Tunnell LLP, counsel for the Debtors. About Hercules Offshore Hercules Offshore, Inc. and its debtor and non-debtor subsidiaries are providers of shallow-water drilling and marine services to the oil and natural gas exploration and production industry globally. Hercules Offshore and 13 of its subsidiaries each filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Proposed Lead Case No. 16-11385) on June 5, 2016. The petition was signed by Troy L. Carson as vice president. The Debtors listed total assets of $1.06 billion and total debts of $521.37 million as of March 31, 2016. The Debtors have hired Akin Gump Srauss Hauer & Feld LLP as general bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as co-counsel, PJT Partners, Inc. as financial advisor, FTI Consulting, Inc. as restructuring advisor, and Prime Clerk LLC as claims, notice and balloting agent. HERCULES OFFSHORE: Wants Automatic Stay Enforced ------------------------------------------------ To ensure that their operations are not disrupted and ability to successfully monetize their assets is not impacted by enforcement actions or the exercise of self-help remedies initiated by non-U.S. creditors, customers, governmental units, or other parties-in-interest, Hercules Offshore, Inc. and its debtor affiliates seek entry of an order, pursuant to Bankruptcy Code Section 105(a), that confirms, restates, enforces, and restrains any action taken in violation of the following key protections afforded to the Debtors under the Bankruptcy Code: (a) the automatic stay provisions of Bankruptcy Code Section 362; (b) the prohibition of Bankruptcy Code Section 365 against terminating executory contracts or unexpired leases due to ipso facto provisions; and (c) the prohibition against discriminatory treatment by governmental units contained in Bankruptcy Code Section 525. "Due to the global scope of the Debtors' businesses and operations, the Debtors and their estates may gravely suffer from any contract cancellation, lease termination, governmental discrimination, or other adverse action in contravention of the aforementioned bankruptcy law," said Matthew B. Harvey, Esq., at Morris, Nichols, Arsht & Tunnell LLP, one of the Debtors' attorneys. "The risk of such actions or cancellations is a real one because the numerous non-U.S. customers, landlords, vendors, suppliers, and governmental units with whom the Debtors regularly transact may be unfamiliar with the Bankruptcy Code, including with respect to the protections afforded by Bankruptcy Code sections 362, 365, and 525," he added. The automatic stay comes into effect upon the commencement of a Chapter 11 case by operation of law pursuant to Bankruptcy Code section 362. The automatic stay enjoins all persons from, among other things, (i) commencing or continuing any judicial, administrative, or other proceeding, with limited exceptions, against the Debtors that was, or could have been, commenced before the commencement of the chapter 11 cases; (ii) recovering upon a claim against the Debtors that arose before commencement of the chapter 11 cases; or (iii) taking any action to collect, assess, or recover on a claim against the Debtors that arose before the commencement of the Chapter 11 cases. "Notwithstanding the broad scope of protection afforded by the automatic stay and the invalidation of ipso facto clauses provided by the Bankruptcy Code, not all parties affected by these provisions are aware of Bankruptcy Code sections 362 and 365, nor are all parties cognizant of the significance of these provisions to the Debtors. Accordingly, it is vital to advise third parties of the existence and effect of the automatic stay and invalidation of ipso facto clause provisions, particularly where, as here, the Debtors conduct a significant amount of business overseas and have valuable assets in foreign jurisdictions," Mr. Harvey continued. About Hercules Offshore Hercules Offshore, Inc. and its debtor and non-debtor subsidiaries are providers of shallow-water drilling and marine services to the oil and natural gas exploration and production industry globally. Hercules Offshore and 13 of its subsidiaries each filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Proposed Lead Case No. 16-11385) on June 5, 2016. The petition was signed by Troy L. Carson as vice president. The Debtors listed total assets of $1.06 billion and total debts of $521.37 million as of March 31, 2016. The Debtors have hired Akin Gump Srauss Hauer & Feld LLP as general bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as co-counsel, PJT Partners, Inc. as financial advisor, FTI Consulting, Inc. as restructuring advisor, and Prime Clerk LLC as claims, notice and balloting agent. HERTZ CORP: Moody's Affirms B1 CFR, Outlook Positive ---------------------------------------------------- Moody's Investors Service affirmed the Hertz Corporation's B1 Corporate Family Rating, B1-PD Probability of Default rating, Ba1 senior secured rating, B2 senior unsecured rating, and SGL-3 Speculative Grade Liquidity. The outlook is changed to positive from stable. Moody's concurrently assigned a Ba1 rating to the company's proposed $2.4 billion 1st lien senior secured credit facility that will consist of; 1) a $1.7 billion revolving credit facility maturing in 2021, and 2) a $700 million term loan maturing in 2023. RATINGS RATIONALE These rating actions, and the change in outlook to positive, reflect Moody's expectation that Hertz will complete the planned separation of its equipment rental operations (HERC), and that the company will benefit from initiatives being implemented by the newly installed senior management team. Hertz should also benefit from being one of only three key players in the oligopolistic North American car rental sector along with Enterprise Holdings and Avis Budget Group, Inc. As part of the separation, Hertz will receive a $2.0 billion transfer from HERC and will use the proceeds to reduce debt. As a result of the cash transfer receipt, the related debt reduction, and the loss of HERC's EBITDA, we estimate that Hertz's pro forma year-end 2015 debt/EBITDA (reflecting Moody's standard adjustments) would approximate 4.0x. This pro forma leverage is equivalent to that of Hertz's actual year-end 2015 leverage inclusive of the HERC operations. Although the spin-off will not be a deleveraging event for Hertz, it remains a credit-positive transaction. Compared with the equipment rental sector, the auto rental industry benefits from much shorter holding periods and a significantly more liquid used market. Moreover, despite the difficult pricing environment in the car rental sector during recent quarters, this pressure should abate as the industry realigns fleet size with demand. Moody's believes that, over the long term, the industry will maintain a focus on sustaining a healthy balance between fleet size and demand, and that there will be little interest in gaining share through price cuts. Consequently, following the separation of HERC, Hertz will enjoy a more stable revenue and earnings environment, and will be better positioned to contend with cyclical downturns. Key operating initiatives being undertaken by Hertz's management include: 1) managing the size and utilization of its fleet more effectively; 2) improving customer satisfaction levels; 3) installing upgraded information technology systems; 4) focusing on profitable revenue opportunities rather than share gains; and 5) achieving $350 of incremental cost savings during 2016. Many of the areas in which Hertz is now focusing are areas where the company had been a sub-par performer, and it should be able to make solid gains. The positive outlook anticipates that the operating initiatives being undertaken by Hertz, combined with constructive long-term industry fundamentals, have the potential to drive improvement in the company's credit metrics and support a higher rating. This improvement in operating performance could become evident following the important summer rental season. Although Hertz remains highly dependent on ongoing access to considerable amounts of debt to fund its vehicle fleet, the company's liquidity profile has become more sustainable in recent years. Pro forma for the proposed transactions, Hertz's liquidity position includes: approximately $700 million in unrestricted cash; availability of about $1 billion under the new revolving credit facility after taking account of letters of credit; and an estimated $2.5 billion in remaining capacity under committed multi-year ABS borrowing conduits. The company has no corporate debt maturing during the coming twelve months, and modest amounts of maturing vehicle securitizations that are not being either replaced or extended. Any upward movement in Hertz's rating would require the company show clear progress in achieving its strategic initiatives that include: harvesting targeted cost savings; maintaining fleet size in line with demand; and, maintaining an adequate liquidity profile. An upgrade would also require Hertz to manage future share repurchases in a manner that prudently balances the needs of shareholders and creditors. Metrics that could support a higher rating include expectation of year end debt/EBITDA below 3x; pre-tax income/sales remaining above 7%; and EBITDA/interest exceeding 5x (after Moody's standard adjustments). Metrics that could pressure Hertz's rating include: year-end debt/EBITDA above 5x; pre-tax income/sales remaining below 5%; and EBITDA/interest below 3x. Assignments: Issuer: Hertz Corporation (The) Senior Secured Bank Credit Facility, Assigned Ba1 (LGD2) Affirmations: Issuer: Hertz Corporation (The) Probability of Default Rating, Affirmed B1-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Corporate Family Rating (Local Currency), Affirmed B1 Senior Secured Regular Bond/Debenture, Affirmed Ba1 (LGD2) Senior Unsecured Regular Bond/Debentures, Affirmed B2 (LGD4 from LGD5) Issuer: Hertz Corporation (The) (Old) Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD6) Issuer: Hertz Holdings Netherlands BV Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD4 from LGD5) Outlook Actions: Issuer: Hertz Corporation (The) Outlook, Positive Issuer: Hertz Holdings Netherlands BV Outlook, Positive The principal methodology used in these ratings was Equipment and Transportation Rental Industry published in Dcember 2012. HERTZ GLOBAL: S&P Affirms 'B+' CCR & Rates $2.4BB Facility 'BB' --------------------------------------------------------------- S&P Global Ratings said it affirmed its ratings on Hertz Global Holdings Inc., including the 'B+' corporate credit rating, pro forma for the separation of its equipment rental business. S&P also assigned a 'BB' issue-level rating and '1' recovery rating to the company's proposed $2.4 billion secured credit facility, comprising a $1.7 billion revolving credit facility maturing in 2021 and a $700 million term loan B maturing in 2023. The '1' recovery rating indicates S&P's expectation of high (90%-100%) recovery in a default scenario. "We expect credit metrics to be little changed by the separation of HERC and to gradually improve thereafter based on expected rising earnings and cash flow," said S&P Global Ratings credit analyst Betsy Snyder. S&P could raise the ratings over the next year if better than expected earnings, due to stronger volumes or pricing, result in funds from operations (FFO) to debt increasing to the low 20% area on a sustained basis. Although unlikely over the next year, S&P could lower the ratings if operating performance weakens, which could be caused by weak pricing or weak used car prices, resulting in FFO to debt declining to the low to mid-teens percent area. HESS COMMERCIAL: Wants Exclusive Plan Filing Extended to July 13 ---------------------------------------------------------------- Hess Commercial Printing, Inc., asks the Hon. Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania to extend by 30 days, or until July 13, 2016, from June 13, 2016, the exclusive period to file a plan. The Debtor requests an extension of their exclusivity period in order to further examine and analyze certain tax liabilities, as well as to better gauge historical performance based upon an update of the Debtor's books and records. Hess Commercial Printing, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Penn., Case No. 16-20470) on Feb. 12, 2016. The Debtor is represented by Michael P. Kruszewski, Esq., at Quinn Law Firm. The Debtor's counsel can be reached at: QUINN BUSECK LEEMHUIS TOOHEY & KROTO, INC. Michael P. Kruszewski, Esq. 2222 West Grandview Boulevard Erie, Pennsylvania 16506 Tel: (814) 833-2222 Fax: (814)833-6753 E-mail: mkruszewski@quinnfirm.com HILTON WORLDWIDE: S&P Raises CCR to 'BB+' on Spin-off Filings ------------------------------------------------------------- S&P Global Ratings said it raised its corporate credit rating on Hilton Worldwide Holdings Inc. to 'BB+' from 'BB'. The outlook is positive. At the same time, S&P raised the issue-level rating on the company's senior secured credit facility to 'BBB' from 'BBB-'. The '1' recovery rating on the senior secured facility is unchanged, reflecting very high recovery prospects (90% to 100%) for lenders in the event of a payment default. S&P also raised the issue-level rating on the senior unsecured notes to 'BB+' from 'BB'. The '4' recovery rating on the notes is unchanged, reflecting average recovery prospects (30% to 50%; lower end of the rangge) for lenders in the event of a payment default. "The upgrade follows the filing of Forms 10 to spin most of Hilton's real estate and its timeshare business into two separate publicly traded companies called Parks Hotels & Resorts Inc. and Hilton Grand Vacations, respectively, and also reflects our expectation for sustained leverage at levels through 2017 well inside our upgrade leverage thresholds of 5x adjusted debt to EBITDA and 12% FFO to adjusted debt," said S&P Global Ratings credit analyst Emile Courtney. S&P is raising the rating now because it can reasonably estimate changes to the company's capital structure and the amount of EBITDA that will remain at Hilton operating company, and S&P expects that the spins of most of the company's real estate and the timeshare business are only modestly leveraging events. The positive outlook reflects anticipated EBITDA improvement and continued deleveraging through 2017, and the possibility Hilton could improve and sustain adjusted debt to EBITDA below 4x and FFO to debt above 20% over the highly volatile lodging cycle. HONEYCOMB CAPITAL: Plan, Disclosures Hearing Set for July 12 ------------------------------------------------------------ Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas, Sherman Division, conditionally approved Honeycomb Capital, LLC's disclosure statement explaining its Chapter 11 plan of reorganization and scheduled the hearing to consider final approval of the Disclosure Statement and to consider the confirmation of the Plan for July 12, 2016 at 9:30 a.m. July 8, 2016 is fixed as the last day for filing written acceptances or rejections of the plan. July 6, 2016 is fixed as the last day for filing and serving written objections to: (1) final approval of the Debtor's Disclosure Statement; or (2) confirmation of the Debtor's proposed Chapter 11 plan. Honeycomb Capital, LLC (Bankr. E.D. Tex., Case No. 16-40374) filed a Chapter 11 Petition on February 29, 2016. The case is assigned to Judge Brenda T. Rhoades. The Debtor's counsel is Eric A. Liepins, Esq., in Dallas, Texas. The petition was signed by Andrew Kim, managing member. The Debtor's estimated assets range from $1 million to $10 million and estimated liabilities from $1 million to $10 million. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/txeb16-40374.pdf HORSEHEAD HOLDING: Creditors, Noteholders Object to Plan Outline ---------------------------------------------------------------- The Official Committee of Equity Security Holders, the Official Committee of Unsecured Creditors, and Delaware Trust Company, solely in its capacity as successor trustee to U.S. Bank National Association, oppose the approval of the Disclosure Statement explaining Horsehead Holding Corp. and its affiliates' Joint Plan of Reorganization. The Objectors point out that the Plan specifically provides (a) "out of the money" Warrants and/or subscription rights to purchase 5% of the New Common Equity to be issued pursuant to the proposed Rights Offerings with respect to Unsecured Notes Claims (owed in excess of $40 million) and Banco Bilbao Credit Agreement Claims (owed in excess of $17.5 million), (b) de minimis cash distributions of $2.5 million to a General Unsecured Creditor Cash Pool with respect to non-Zochem general unsecured claims (which likely exceed $74 million according to the Debtors' estimates), and (c) no recovery at all with respect to Convertible Notes Claims (which claims are at least $100 million). The Objectors complain that the Disclosure Statement lacks adequate information regarding the terms of the Rights Offerings, which are a critical component of the Plan considering that the Debtors concede that they must receive the proceeds of (a) the $150 million Equity Rights Offering to satisfy their obligations under the DIP Facility, the Macquarie Credit Facility Obligations and to pay Administrative Claims, which is a prerequisite to confirmation, and (b) the $100 million Additional Capital Commitment Rights Offering to fund the repairs to the Mooresboro Facility. The Disclosure Statement also contains minimal information about these Rights Offerings as it fails to identify the "Plan Sponsors" and their interest or claims, despite granting immense control and value to the Plan Sponsors, the Objectors point out. According to the Objectors, the Disclosure Statement should not be approved without full disclosure of the identities and economic interests of the Plan Sponsors and of their role in the case and in the negotiation and structuring of the Plan for it is the only way to know whether the Plan Sponsors have the financial resources to backstop the offering, and considering that the Plan's viability depends on a $150 million Equity Rights Offering -- which is necessary to pay off the DIP Facility, the Macquarie Credit Facility Obligations and various Administrative Claims in these Chapter 11 Cases. In addition, the Objectors complain that the Plan proposes to impermissibly release all claims (including derivative claims) of the Debtors and their estates in favor of U.S. Bank (the trustee and collateral agent for the Senior Secured Notes), the members of the Ad Hoc Group of Senior Secured Noteholders, and the Debtors' current and former officers and directors, among numerous other parties, for no consideration, and likewise, the Plan contains improper and unjustified third party releases, overly broad exculpation provisions and attendant injunction provisions that must be revised to conform to applicable law. Likewise, the Objectors aver that the Disclosure Statement does not include any valuation of the Debtors' businesses under the Ramp Up Scenario, which based on the Debtors' own financial projections would yield a substantially higher value, nor any explanation of that blatant omission. Counsel to Delaware Trust Company: Scott J. Leonhardt, Esq. THE ROSNER LAW GROUP LLC 824 N. Market Street – Suite 810 Wilmington, Delaware 19801 Telephone: (302) 777-1111 Email: leonhardt@teamrosner.com -- and -- Jonathan L. Flaxer, Esq. GOLENBOCK EISEMAN ASSOR BELL & PESKOE LLP 437 Madison Avenue New York, New York 10022 Telephone: (212) 907-7327 Email: jflaxer@golenbock.com Proposed Counsel to The Official Committee of Equity Security Holders: Mark D. Collins, Esq. Robert J. Stearn, Jr., Esq. Russell C. Silberglied, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Email: collins@rlf.com stearn@rlf.com silberglied@rlf.com steele@rlf.com schlauch@rlf.com -- and -- Ancela R. Nastasi, Esq. William S. Katchen, Esq. Moshie Solomon, Esq. Marshall E. Tracht, Esq. NASTASI PARTNERS 77 Water Street, 8th Floor New York, New York 10005 Telephone: (212) 744-5800 Email: ancela@nastasipartners.com bill@nastasipartners.com moshie@nastasipartners.com marshall@nastasipartners.com Counsel to the Official Committee of Unsecured Creditors: Kenneth A. Rosen, Esq. Bruce Buechler, Esq. Michael Savetsky, Esq. Philip J. Gross, Esq. Amiad Kushner, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, New Jersey 07068 Telephone: (973) 597-2500 Facsimile: (973) 597-6247 Email: krosen@lowenstein.com bbuechler@lowenstein.com msavetsky@lowenstein.com pgross@lowenstein.com akushner@lowenstein.com -- and -- Howard A. Cohen, Esq. Robert K. Malone, Esq. DRINKER BIDDLE & REATH LLP 222 Delaware Avenue, Ste. 1410 Wilmington, DE 19801 (302) 467-4200 Telephone: (302) 467-4201 Email: howard.cohen@dbr.com Robert.Malone@dbr.com About Horsehead Holding Corp. Horsehead Holding Corp. is the parent company of Horsehead Corporation, a U.S. producer of specialty zinc and zinc-based products and a leading recycler of electric arc furnace dust; The International Metals Reclamation Company, LLC ("INMETCO"), a leading recycler of metals-bearing wastes and a leading processor of nickel-cadmium (NiCd) batteries in North America; and Zochem Inc., a zinc oxide producer located in Brampton, Ontario. Horsehead, headquartered in Pittsburgh, Pa., has seven facilities throughout the U.S. and Canada. The Debtors currently employ approximately 730 full-time individuals. Horsehead Holding Corp., Horsehead Corporation, Horsehead Metal Products, LLC, The International Metals Reclamation Company, LLC, and Zochem Inc. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 16-10287 to 16-10291) on Feb. 2, 2016. The Petition was signed by Robert D. Scherich as vice president and chief financial officer. Judge Christopher S. Sontchi is assigned to the case. The Debtors have engaged Kirkland & Ellis LLP as general counsel, Pachulski Stang Ziehl & Jones LLP as local counsel, RAS Management Advisors, LLC as financial advisor, Lazard Middle Market LLC as investment banker, Epiq Bankruptcy Solutions, LLC as claims and noticing agent and Aird & Berlis LLP as Canadian counsel. The Debtors disclosed total assets of $1 billion and total liabilities of $544.6 million. As of the Petition Date, the Debtors' consolidated long-term debt obligations totalled approximately $420.7 million. Andrew Vara, acting U.S. trustee for Region 3, appointed seven creditors of Horsehead Holding Corp. to serve on the official committee of unsecured creditors. Lowenstein Sandler LLP serves as counsel to the Committee, while Drinker Biddle & Reath LLP serves as co-counsel. The Unsecured Creditors Committee is represented by: Kenneth A. Rosen, Esq. Bruce Buechler, Esq. Philip J. Gross, Esq. LOWENSTEIN SANDLER LLP 65 Livingston Avenue Roseland, NJ 07068 Telephone: (973)597-2500 Facsimile: (973)597-6247 E-mail: krosen@lowenstein.com bbuechler@lowenstein.com pgross@lowenstein.com The U.S. Trustee's office appointed Aquamarine Capital and six others to serve on Horsehead Holding Corp.'s committee of equity security holders. IES GLOBAL: Moody's Lowers CFR to B3, Outlook Negative ------------------------------------------------------ Moody's Investors Service downgraded the ratings of IES Global B.V. including its Corporate Family Rating and Probability of Default Ratings to B3 and B3-PD from B2 and B2-PD, respectively. Concurrently, the rating on the company's $270 million first lien term loan was downgraded to B3 from B2. The ratings downgrade was driven by lower than expected operating performance due to challenging conditions in the company's construction, mining and agricultural end-markets including lower demand in certain of its Brazilian operations. The outlook is negative due to limited visibility into the timing and magnitude of an end market recovery as well as anticipated tight near-term covenant headroom. Moody's downgraded these ratings of IES Global B.V.: Corporate Family Rating, to B3 from B2 Probability of Default Rating, to B3-PD from B2-PD $270 million first lien term loan, to B3 (LGD-4) from B2 (LGD-4) Outlook, Negative RATINGS RATIONALE IES' B3 CFR is reflective of the company's modest revenue scale, exposure to cyclical end-markets and high leverage counterbalanced by positive free cash flow, diverse global end-markets and long established relationships with large heavy equipment manufacturers and dealers. The company is operating in end-markets that continue to face headwinds and meaningful de-leveraging is unlikely over the intermediate term. Moody's anticipates that the company will continue to focus on cost restructuring activities to mitigate a portion of the earnings pressure. During the last twelve months ended March 31, 2016, the company's debt/EBITDA (including Moody's standard adjustments) exceeded 5.5x with EBITDA/interest coverage of approximately 2.0x. The decline in oil and other commodity prices is reducing capital expenditures and demand for heavy equipment by energy and industrial customers that is translating to lower than expected revenue and earnings for IES. The company has been taking proactive restructuring actions to counterbalance some of the downward pressure on earnings and IES is adjusting its capital spending based on reduced customer volumes, but Moody's expects revenue declines will continue to pressure IES' earnings and cash flow. The ratings reflect the expectation that the company will generate positive free cash flow aided by the shift to pay-in-kind interest on the $70 million second lien term loan last fall, as well as availability under its $85 million revolver expiring in August 2018. Of note, quarterly debt amortization of $3.6 million is high relative to cash flows and consumes most or all of the company's free cash flow. In addition, Moody's believes that there is risk of a covenant violation over the next 12-15 months if end markets do not stabilize by the end of 2016. Stabilization of the outlook would be contingent on improving financial performance including top line revenue growth and a stabilization in end-market conditions. Upward rating momentum would depend on debt/EBITDA improving towards 5.0 times, EBIT to interest exceeding 1.5x and the maintenance of an adequate liquidity profile. Downward rating momentum would develop if the company's liquidity profile were to weaken including a deterioration in free cash flow, less effective availability under its revolver, or heightened risk of a covenant violation. A continued decline in end markets or operating results such that debt/EBITDA exceeds 6.5 times could also lead to a downgrade. The principal methodology used in these ratings was Global Manufacturing Companies published in July 2014. IES Global B.V., located in Oak Brook, IL is an integrated, global manufacturer of a diversified range of highly engineered cab enclosures and attachment tools for the off-highway industry. The company was created in 2011 with the combination of Paladin Brands (including Paladin Attachments, Genesis, Pengo, Jewell) and Crenlo, while Siac do Brasil and CWS were acquired in 2012. IES acquired Kodiak Manufacturing, a manufacturer of agricultural implements, in February 2015. Revenues for the last twelve months ended March 31, 2016, totaled approximately $490 million. IES is owned by KPS Capital Partners, L.P., a manager of a family of private equity funds. INMOBILIARIA LEGUISAMO: Seeks to Hire Rafael Cruzado as Appraiser ----------------------------------------------------------------- Inmobiliaria Leguisamo Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Rafael Cruzado as its appraiser. The Debtor tapped an appraiser to prepare a valuation of its property located at Bo. Leguisamo, Carr. 352, km 4.6, Mayaguez, Puerto Rico. The Debtor will employ Mr. Cruzado on the basis of a $300 for work performed, according to court filings. In a court filing, Mr. Cruzado disclosed that he is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. Mr. Cruzado's contact information is: Rafael Arcaya Cruzado PO Box 6020 Mayaguez, PR 00681 Phone: (787)265-5150 The Debtor can be reached through: Nydia Gonzalez Ortiz Santiago & Gonzalez Law, LLC 11 Betances Street Yauco, PR 00698 Tel:(787)267-2205 / 267-2252 Email: bufetesg@gmail.com About Inmobiliaria Leguisamo Inmobiliaria Leguisamo Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 16-00123) on January 13, 2016. The Debtor is represented by Nydia Gonzalez Ortiz, Esq., at Santiago & Gonzalez Law, LLC. INVERRARY RESORT: Secured Lender Wants to Halt Cash Collateral Use ------------------------------------------------------------------ Secured lender SHE DDF1-FL2, LLC, wants a Bankruptcy Court order prohibiting The Inverrary Resort Hotel Condominium Association, Inc., Nirvana Inverrary Lofts, Inc., and Alrames S.A.de C.V. Corp. from using cash collateral pledged to repay a $2.5 million loan executed by non-Debtor affiliates Getsa Corp. and International Resorts Corp. in favor of Peninsula Bank. Pursuant to the Loan Documents, all cash, including rents, security deposits, and profits, generated from the Real Property constitute Secured Lender's collateral. The Debtor has been using Secured Lender’s Cash Collateral since the Petition Date without the Secured Lender's Consent and without authorization from the Court in violation of Section 363(c)(2) of the Bankruptcy Code. SHE DDF1-FL2, LLC, is represented by: Matthew A. Petrie, Esq. EHRENSTEIN CHARBONNEAU CALDERIN 501 Brickell Key Drive, Suite 300 Miami, FL 33131 Telephone (305) 722-2002 E-mail: map@ecclegal.com The Inverrary Resort Hotel Condominium Association, Inc., Nirvana Inverrary Lofts, Inc., and Alrames S.A.de C.V. Corp. filed voluntary chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 16-17792, 16-17799 and 16-17802) on May 31, 2016. The three Debtors are represented in their jointly administered cases by Jason Slatkin, Esq., at Slatkin & Reynolds, P.A., in Ft. Lauderdale. At the time of the filings each single asset real estate Debtor estimated its assets at less than $50,000 and its debts at more than $1 million. IRENE STACY COMMUNITY: Taps Maher Duessel as Accountant ------------------------------------------------------- Irene Stacy Community Mental Health Center seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Maher Duessel as its accountant. Maher Duessel will assist the Debtor with financial and pension audits. The current hourly rates of the partners, associates and paraprofessionals of the firm range from $65 to $195. Tim Morgus, a certified public accountant at Maher Duessel, disclosed in a court filing that he and the firm are "disinterested persons" as defined in section 101(14) of the Bankruptcy Code. Maher Duessel can be reached through: Tim Morgus Maher Duessel D.L. Clark Building 503 Martindale Street, Suite 600 Pittsburgh, PA 15212 Phone: 412.471.5500 Fax: 412.471.5508 tmorgus@md-cpas.com The Debtor can be reached through its counsel: Allison L. Carr, Esq. Bernstein-Burkley, P.C. 707 Grant Street, 2200 Gulf Tower Pittsburgh, PA 15219 acarr@bernsteinlaw.com (412) 456-8120 (phone) (412) 456-8135 (fax) About Irene Stacy Irene Stacy Community Mental Health Center sought protection under Chapter 11 of the Bankruptcy Code in the Western District of Pennsylvania (Pittsburgh) (Case No. 15-24605) on December 18, 2015. The petition was signed by Brent Olean, Board president. The Debtor is represented by Allison L. Carr, Esq., at Bernstein-Burkley, P.C. The case is assigned to Judge Thomas P. Agresti. The Debtor estimated both assets and liabilities in the range of $1 million to $10 million. IVENS PROPERTIES: Unsecureds to Get 100% Under Plan No. 2 --------------------------------------------------------- Ivens Properties, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Tennessee, at Knoxville, a disclosure statement in support of plan of reorganization no. 2. The Debtor proposes to pay general unsecured creditors 100% dividend after payment in full of administrative claims and U.S. Trustee fees, without interest with payments from future net profits as funds are available until the allowed claim is paid in full. The Debtor filed a first Plan as Amended (Fourth Amended) Plan, which was subject to trial on confirmation held on December 17, 2015, and continued to April 29, 2016. The Court denied confirmation of the Fourth Amended Plan primarily due to lack of feasibility by order entered April 29, 2016. The Debtor has filed Plan No. 2 at this time with deferred required payments to unsecured Class 5 to cure the feasibility requirements. Also with current leases, the Debtor is expecting increased rents during 2016 and has adjusted the prior projected expenses and income in Exhibit "A-1" to account for future potential budget expense increases. A full-text copy of the Disclosure Statement is available at http://bankrupt.com/misc/tneb15-30094-209.pdf Ivens Properties, Inc. (Bankr. E.D. Tenn., Case No. 15-30094) filed a Chapter 11 Petition on January 14, 2015. The bankruptcy case is assigned to Judge Suzanne H. Bauknight. The Debtor's counsel Richard M. Mayer, Esq., and John P. Newton, Jr., Esq., at Law Offices of Mayer & Newton, in Knoxville, Tennessee. The petition was signed by Mark Ivens, president. The Debtor has estimated assets ranging from $1 million to $10 million and estimated liabilities ranging from $1 million to $10 million. A list of the Debtor's two largest unsecured creditors is available for free at http://bankrupt.com/misc/tneb15-30094.pdf J. CREW: Bank Debt Trades at 26% Off ------------------------------------ Participations in a syndicated loan under which J. Crew is a borrower traded in the secondary market at 74.13 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 0.10 percentage points from the previous week. J. Crew pays 300 basis points above LIBOR to borrow under the $1.56 billion facility. The bank loan matures on Feb. 27, 2021 and carries Moody's B2 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. JG WENTWORTH: S&P Lowers ICR to 'CCC+' on Weakening Credit Metrics ------------------------------------------------------------------ S&P Global Ratings said it lowered its issuer credit rating on J.G. Wentworth LLC 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 debt to 'CCC+' from 'B'. S&P also revised the recovery rating to '4' from '3', indicating that creditors could expect 30%-40% recovery in the event of payment default. "Our rating action stems from continued poor performance in the structured settlement business, combined with significant debt servicing requirements, that results in a significantly weaker liquidity position," said S&P Global Ratings credit analyst Chris Cary. "As of March 31, 2016, the company's cash balance declined to about $26 million from $53 million in the prior quarter. Credit metrics have weakened significantly. Including securitizations, debt to EBITDA has increased beyond our expectations to more than 20x, while interest coverage has dropped below 1x as of March 31, 2016." The company has several initiatives to raise cash over the next year while it tries to restore top-line growth and further reduce costs in its structured settlement business, but it will depend on favorable market conditions to achieve them. During 2015, the company acquired a mortgage operation, which has been growing and is starting to generate some cash. However, this is still insufficient to make up for the declines in the company's structured settlement business, by S&P's estimation. J.G. Wentworth also faces heightened financing risks because of more costly and potentially limited access to funding in the capital markets, in S&P's view. Furthermore, its stock price recently dropped below $1, so it could be delisted from the New York Stock Exchange, which could limit the company's access to equity capital. J.G. Wentworth's management has aggressively taken steps to reduce costs in its structured settlement business. In addition, the company could preserve cash by reducing marketing spending in this segment. Any such action will buy the company time while it tries to grow its mortgage origination business. Continued success in the mortgage segment could provide necessary diversification and help the company rebuild cash in addition to the other initiatives to raise cash, which would support the rating. The negative outlook reflects the risk that the company won't be able to access the capital markets over the next 12 months to replenish its cash reserves, possibly by selling or securitizing assets. In S&P's opinion, the mortgage origination business won't grow to a scale at which it will generate sufficient revenue to restore overall profitability for several quarters. S&P could lower the ratings further if market conditions, including competition or interest rate volatility, lead to lower revenue, or if the company has difficulty accessing funding or selling assets, resulting in further rapid deterioration of cash balances. While an upgrade is unlikely, if S&P gains clarity on J.G. Wentworth's immediate funding situation and if the company demonstrates positive results from the cost reductions in its structured settlement business and grows its mortgage business over the next 12 months, S&P could revise the outlook to stable. JO-LIN HEALTH: Turns to Paycor to Get Payroll Processing Straight ----------------------------------------------------------------- Jo-Lin Health Center, Inc., failed to pay employee withholding taxes toward the end of 2015 and first portion of 2016. As a result, on May 4, 2016, United States Department of Treasury, through its agency, the Internal Revenue Service, setoff funds owed to the Debtor by the Department of Health and Human Services under the Medicare Program. Although the Debtor attempted to contact the IRS through various methods to negotiate payment terms, it was unsuccessful. The Debtor was concerned that continued set-offs by the IRS would result in the inability to pay wages or other critical expenses. Accordingly, the Debtor commenced its Chapter 11 case to maintain the ongoing revenue from Medicare payments so that it can continue operating and providing quality care to its patients, while also generating revenues for the benefit of creditors and all other interested parties. The Debtor employs 140 individuals on both hourly and salaried terms, and who are paid on a bi-weekly basis. The Debtor has historically processed and paid its payroll internally. As noted above, the Debtor had a lapse in payment of sums withheld from employees and believes that using a third-party processor to handle the calculation and payment of wages and salaries, along with the related tax and other withholdings, will provide an economic and efficient way to fulfill the Debtors’ legal obligations in this area. The Debtor has selected Paycor as the third-party processor. Switching to Paycor, the Debtor says, will assure its ability to comply with a regulatory requirement that employee time data be submitted electronically as of July 1, 2016. Jo-Lin will pay Paycor and initial $5,000 implementation fee plus about $22,000 per year (approximately $845 per bi-weekly payroll period) for its various services. Although the Debtor believes that entering into the Contract with Paycor to handle its payroll processing and related reporting is within the ordinary course of its business, it seeks Court approval to enter into and perform the Contract for the avoidance of doubt. Entering into the Contract with Paycor arguably constitutes obtaining credit, and if such an activity was deemed to be outside the ordinary course of business, court approval would be required under 11 U.S.C. Sec. 364(b). In addition, because the Debtor will be using future receipts (cash collateral) to pay for Paycor’s services, if the Contract was deemed to be outside the ordinary course of business, court approval would be required under 11 U.S.C. Sec. 363(c). Accordingly, the Debtor asks the Court to enter an order holding that, to the extent it may fall outside the ordinary course of the Debtor’s business, entering into the Contract with Paycor is an appropriate basis for incurring post-petition unsecured credit, and that payment to Paycor is an authorized us of the Debtor’s cash collateral. About Jo-Lin Health Center Jo-Lin Health Center, Inc., owns and operates a 125-bed nursing home facility. An increase in Ohio's "bed tax" caused Jo-Lin to seek chapter 11 protection (Bankr. S.D. Ohio Case No. 16-11898) on May 17, 2016. The Debtor estimated both assets and liabilities in the range of $1 million to $10 million. JOHN ALDEN: S&P Affirms Then Withdraws 'BB+' CCRs ------------------------------------------------- S&P Global Ratings affirmed its 'BB+' financial strength and long-term counterparty credit ratings on Assurant Inc.'s health entities, John Alden Life Insurance Co. and Time Insurance Co. Subsequently, S&P withdrew its ratings at the issuer's request. "We expect Assurant Health to maintain capital that is redundant at least at the 'BBB' level per our insurance risk-based capital model. We based our rating affirmation on the assumption that the parent will continue to provide adequate resources, both from a capital and operations point of view, to successfully run-off its health operations," said S&P Global Ratings credit analyst Deep Banerjee. "The parent has a track record of this commitment, as evidenced by its approximate $500 million capital infusion for full-year 2015. The parent did take a dividend of $65 million from the health operations in first-quarter 2016 because the run-off of the business reduced required capital at the operating entities. The total insured members at Assurant Health dropped from about 389,000 at year-end 2015 to 26,000 as of March 31, 2016. This sharp drop is due to the expiration of annual insurance contracts, which are not being renewed by the company." Assurant Health put its health operations into run-off in June 2015. The company expects to substantially complete the run-off by year-end 2016. Assurant Health has reported a net operating loss on a generally accepted accounting principles (GAAP) basis of $368 million in 2015. In first-quarter 2016, it reported operating losses of $27 million compared with a loss of $84 million during the same period in 2015. The statutory operating company capital was $465 million as of March 31, 2016, with the expected commissioning of its large open-pit copper development project Cobre Panama in 2018. S&P classifies FQM's financial risk profile as highly leveraged. FQM saw adjusted net debt to EBITDA of 6.8x in 2015 and deeply negative free operation cash flow (FOCF) due to heavy expansionary capital expenditures (capex). Still, S&P expects FQM will be able to reduce adjusted leverage to about 6x, despite high capex, thanks to cost cuts and incremental volumes. The stable outlook reflects S&P's expectation that FQM will be able to cover its material negative discretionary cash flows with its available liquidity sources in the coming two years, and reduce its adjusted debt to EBITDA to about 6x through cost reduction and volume increases. A downgrade could be triggered by a further decline in copper or gold prices, operational set-backs, adverse country risk developments in Zambia, or negative financial policy decisions. In S&P view, this could lead to a liquidity deterioration, including a covenant breach. S&P could consider a one-notch upgrade to 'B' if FQM's earnings improve beyond S&P's base-case assumption, resulting in comfortable headroom under bank loan covenants and an adjusted debt to EBITDA ratio of about 5x. JOSEPH FUNK: Selling House for $1,500 to Cousin ----------------------------------------------- Debtors Joseph R. Funk and Jayne L. Funk filed a motion to sell to Nathan Hughes, their cousin, the house only located on real property commonly known as 308 W. 10th St., Neligh, Nebraska and W2 Lots 7-9, Block 35, Neligh City, Neligh, Antelope County, Nebraska. The house will be sold for $1,500 and will be moved from the real property, and that real property will be retained by the Debtors. The secured creditor, the Internal Revenue Service, will retain its lien, in its priority established under Nebraska or applicable law, upon the proceeds of the sale of the personal property. Joseph R. Funk and Jayne L. Funk sought Chapter 11 protection (Bankr. D. Nebr. Case No. 12-42395) on Nov. 1, 2012. The Debtors' attorney: JEFFREY, HAHN & HEMMERLING, PC, LLO John C. Hahn, Esq. 5640 S. 84th Street, Suite 100 Lincoln, NE 68516 Tel: (402) 483-7711 E-mail: john@jhhz.net K. HANNAH CORP: Case Summary & 15 Unsecured Creditors ----------------------------------------------------- Debtor: K. Hannah Corp. dba Karry's Automotive dba Karry's Automotive of Cape Coral dba Karry's Automotive Group 455 N.E. 5th Ave., Suite D-339 Cape Coral, FL 33991 Case No.: 16-04879 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Middle District of Florida (Ft. Myers) Debtor's Counsel: Daniel R Fogarty, Esq. STICHTER, RIEDEL, BLAIN & POSTLER, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 E-mail: dfogarty.ecf@srbp.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Barbara J. Hannah, president. A list of the Debtor's 15 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb16-04879.pdf K. HANNAH: Makes Emergency Request to Use Cash Collateral --------------------------------------------------------- K. Hannah Corp. tells the U.S. Bankruptcy Court that it needs immediate access to cash collateral pledged to secure repayment of loans from Branch Banking and Trust. The Debtor owes approximately $902,000 to the Bank. The Debtor needs access to the cash collateral to fund its operating expenses and the costs of administering its chapter 11 case. The Debtor proposes granting the Bank postpetition replacement liens. For the next three months the Debtor projects sales of $70,000 per month and expenses of just under $56,000 per month. Branch Banking and Trust Company is represented by: J. Marshall Moorhead, Esq. Tanya Yatsco, Esq. Beverly Snider, Esq. ADAMS AND REESE LLP E-mail: marshall.moorhead@arlaw.com tanya.yatsco@arlaw.com beverly.snider@arlaw.com The Debtor also discloses the existence of a judgment lien certificate filed by Pine Portfolio, LLC, as as successor in interest to EverBank. Pine Portfolio is represented by: James M. Riley, Esq. ROGERS TOWERS E-mail: jriley@rtlaw.com K. Hannah Corp. owns and operates Karry's Automotive, a family owned and operated full-service automotive repair facility that services Cape Coral, Fla., as well as surrounding areas. The Debtor has operated from its current location since 2001. The Debtor sought chapter 11 protection (Bankr. S.D. Fla. Case No. 16-04879) on June 6, 2016, and is represented by Daniel R. Fogarty, Esq., at Stichter, Riedel, Blain & Postler, P.A., in Tampa, Fla. KARINA LEE HOWE: Plan Agent Seeks $1.18MM Sale of Property ---------------------------------------------------------- Brent D. Meyer, disbursing agent under the confirmed plan for debtor Karina Lee Howe, seeks authority to sell, free and clear of liens, to Marco Wan and Sarah Chui, or the successful over-bidder, the residential real property commonly known as 2720 36th Ave., San Francisco, CA, a single-family residence, for $1,180,000. The sale does not include any personal property. In the event the disbursing agent does not deliver the Real Property vacant at closing, the Buyer receives a $29,451 credit. The sale is a "short sale," i.e., one of the lenders is accepting less money than it is owed under their respective deeds of trust. Nationstar ("Senior Mortgage" pursuant to a subordination agreement) will be paid in full, and its approximate payoff demand is $900,000. Citibank ("Junior Mortgage") has a current payoff amount in excess of $375,000 but will accept $110,000 to release its lien, or such other amount that is determined in the event of overbidding. The agreed "carve out" in favor of the bankruptcy estate is approximately $110,533, or such other amount that is determined in the event of overbidding. Pursuant to the accompanying compromise, the Tenants will receive $29,451; and if they do not vacate timely that amount is credited to Buyer. That will be determined after the successful overbidder has been identified, from the monies it would otherwise receive from the sale and from the monies held by the disbursing agent from rents from the Real Property. The sale will be free and clear of: (1) the senior deed of trust in favor of HSBC Bank USA, National Association as Trustee for Deutsche Alt-A Securities, Inc. Mortgage Loan Trust, Series 2007-AR3, Mortgage Pass-Through Certificates, and Nationstar Mortgage LLC, its servicing agent (collectively, "Nationstar," Proof of Claim #3 herein); and (2) the junior deed of trust in favor of CITIBANK (West), FSB ("Citibank," no Proof of Claim yet filed). The disbursing agent will pay from the proceeds of sale all outstanding real property taxes and city taxes as of the date of the close of escrow. The disbursing agent will also pay the mortgages and the compromise payment to the Tenants, if applicable. The disbursing agent will also pay from the proceeds of sale a 5% commission based on the sales price to the bankruptcy estate's broker, Mark Benson and Property Management Systems, who, in turn will share the commission equally with the Buyer's broker. The sale is "as is, where is" without any representations or warranties, express or implied, and has no contingencies. The sale is subject to overbid. The minimum initial overbid will be $1,190,000, with subsequent overbids in not less than $2,500 increments until the highest and best offer is reached. Any person wishing to overbid must deliver to the disbursing agent's real estate broker: Mark Benson PROPERTY MANAGEMENT SYSTEMS 10 Rollins Road, Suite 215 Millbrae, CA 94030 Tel: (650) 342-6600 by no later than Monday, June 27, 2016, at 4:00 p.m. California time, a written offer to purchase the Real Property for at least $1,190,000 on the above terms, together with a cashier's check in the amount of $35,400 as a good faith deposit made payable to "Brent D. Meyer, Disbursing Agent," and PROOF OF FINANCIAL ABILITY TO CONSUMMATE THE TRANSACTION, AND A TELEPHONE NUMBER WHERE YOU CAN BE REACHED. Karina Lee Howe is subject to a Chapter 11 case (Bankr. N.D. Cal. Case No. 14-31259). Brent D. Meyer is the disbursing agent under an "Order Confirming PNC Mortgage, A Division of PNC Bank, N.A.'s Combined Plan of Reorganization and Approved Disclosure Statement Dated May 4, 2015" entered on Aug. 6, 2015, Attorneys for Disbursing Agent Brent D. Meyer: Jeremy W. Katz Linda Sorensen SHIERKATZ RLLP 930 Montgomery Street, Suite 600 San Francisco, CA 94133 Telephone: (415) 895-2895 Facsimile: (415) 520-5879 E-mail: jkatz@shierkatz.com KIVA CONSTRUCTION: Sperry Okayed to Auction Property ---------------------------------------------------- Kiva Construction & Engineering, Inc., on June 2, 2016, won approval from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ Sperry Van Ness/Gilmore Auction & Realty Company to conduct a sale via auction of property referred to as 10.00 Acres more or less, designated as Parcel A in Sections 11, 12, 13 & 14-16-14, 186 Zimmer Road, Gibson, LA 70356. The sale of the Property will be free and clear of claims, liens, encumbrances, or any other interests of any kind in or upon the Property, with such Liens being referred to the sale proceeds in the same rank, priority and validity as existed at the time of the sale. The sale of the Property will be "AS IS" without any warranty whatsoever, even as to title, free and clear of all Liens. Pursuant to the Auction Agreement, an auction fee in the form of a 10% buyer's premium shall be added to the purchaser(s)' final bid price and included in the total contract price. Kiva Construction & Engineering, Inc., sought Chapter 11 protection (Bankr. E.D. La. Case No. 13-11576) on June 6, 2013. Paul C. Miniclier, Esq., at the Law Office of Paul C. Miniclier, in New Orleans, serves as counsel to the Debtor. The Debtor estimated $1,000,001 to $10,000,000 in assets and debt. KLAMON LLC: Case Summary & 15 Unsecured Creditors ------------------------------------------------- Debtor: Klamon LLC dba Down South Offroad Park 19230 Rio Villa Drive Houston, TX 77049 Case No.: 16-32904 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Hon. Jeff Bohm Debtor's Counsel: Ronald J Sommers, Esq. NATHAN SOMMERS JACOBS, APC 2800 Post Oak Blvd, 61st Fl Houston, TX 77056-6102 Tel: 713-892-4801 Fax: 713-892-4800 E-mail: efilers@nathansommers.com Total Assets: $1.71 million Total Liabilities: $3.35 million The petition was signed by James Hunter Clamon, manager. A list of the Debtor's 15 largest unsecured creditors is available for free at http://bankrupt.com/misc/txsb16-32904.pdf KSS HOLDINGS: S&P Affirms 'B+' CCR Over Ningbo Joyson Deal ---------------------------------------------------------- S&P Global Ratings affirmed its 'B+' corporate credit rating on KSS Holdings Inc., the parent of Key Safety Systems Inc. (the borrower under the credit agreement). The outlook is stable. At the same time, S&P affirmed its 'B+' issue-level rating on Key Safety Systems' senior secured debt. The '3' recovery rating on the term loan is unchanged, indicating S&P's expectation for meaningful (50%-70%; lower half of the range) recovery in the event of a default. KSS Holdings, on June 2, 2016, announced the completion of its merger with Ningbo Joyson Electronic Corp. (Joyson), following which, KSS will operate as an independent group company headquartered in Michigan. S&P views KSS to be a strategically important subsidiary of Joyson and assesses Joyson's group credit profile to be 'b+', the same as KSS' stand-alone credit profile. "The affirmation reflects our view of the credit profile of the group as a whole following the merger and our assessment of the amount and timeliness of any credit support KSS would receive under stress from Joyson," said S&P Global Ratings analyst Nishit Madlani. S&P's stable outlook on KSS reflects S&P's view that the company will reduce its debt over the next 12 months, allowing it to maintain a debt-to-EBITDA ratio of about 4.0x-4.5x and good prospects for positive FOCF. LAKESHORE VETERINARY: Disclosure Statement Hearing Set for June 23 ------------------------------------------------------------------ Hearing on the conditional approval of the disclosure statement explaining the plan of reorganization for Lakeshore Veterinary Hospital & Pet Lodge (A Professional Veterinary Medicine Corporation) is continued to June 23, 2016, at 10:00 a.m., before the U.S. Bankruptcy Court for the Eastern District of Louisiana. The debtor must file an amended Disclosure Statement no later than June 17, 2016, and notice it for hearing on June 23, 2016, at 10:00 a.m. in Room B-709, 500 Poydras Street, New Orleans, Louisiana. Objections must be filed no later than June 22, 2016 at noon. Lakeshore Veterinary Hospital & Pet Lodge (A Professional Veterinary Medicine Corporation)(Bankr. E.D. La., Case No. 15-13308) filed a Chapter 11 Petition on December 29, 2015. The Debtor is represented by Robin R. DeLeo, Esq., at The De Leo Law Firm, LLC. LAREDO WO: Case Summary & 7 Unsecured Creditors ----------------------------------------------- Debtor: Laredo WO, LTD., a Texas limited partnership 1175 W. Bitters Road, Suite 100 San Antonio, TX 78216 Case No.: 16-51297 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Judge: Hon. Ronald B. King Debtor's Counsel: Eric Terry, Esq. ERIC TERRY LAW, PLLC 4040 Broadway Ste. 450 San Antonio, TX 78209 Tel: (210) 468-8274 Fax: (210) 319-5447 Email: eric@ericterrylaw.com Total Assets: $69.59 million Total Debts: $36.50 million The petition was signed by Bradford A. Galo, CEO of Galo, Inc. (managing GP of ABG Enterprises, Ltd.) List of Debtor's seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ABG Development, Ltd. $5,101 1175 West Bitters Rd., Ste. 100 San Antonio, TX 78216 BKD, LLP $7,000 10001 Reunion Place, Ste 400 San Antonio, TX 78216 Elder, Bray & $346 Bankler, PC 755 E. Mulberry Ste. San Antonio, TX 78212 Law Office of $9,329 Ronald Hagauer 1602 N. Loop 1604 W, #LL-102 San Antonio, TX 78248 Morrison & Head, LP $4,500 4210 Spicewood Springs Rd. #211 Austin, TX 78759 Plateau Land & $2,957 Wildlife Management, Inc. PO Box 1251 Dripping Springs, TX 78620 Stantec Consulting $4,068 Services, Inc. 13980 Collections Center Drive Chicago, IL 60693 LAWRENCE FROMELIUS: Seeks to Spend $200K to Demolish Structures --------------------------------------------------------------- At a hearing today, June 8, 2016, at 10:30 a.m., Lawrence D. Fromelius will ask the U.S. Bankruptcy Court for the Northern District of Illinois to pay $199,700 to a demolition contractor to demolish problematic structures at its property in 311 East Greenfield Ave., in Milwaukee, Wisconsin. The Debtor is the sole member of East Greenfield Investors LLC, which in turn is the sole member of Golden Marina Causeway LLC. Golden Marina is itself a debtor in possession in a related chapter 11 case, pending before the Court as Case No. 16-3587. Golden Marina owns two parcels of real estate, located at 302 and 311 East Greenfield Ave., in Milwaukee, Wisconsin. The Greenfield properties are incredibly valuable. They are located in the Inner Harbor area of Milwaukee, which is the target of several redevelopment efforts. These efforts have been led by the nearby opening of the Global Water Center, an incubator for water tech firms, and the new University of Wisconsin–Milwaukee School of Freshwater Sciences. The Greenfield properties are ideally located for development into retail space, a marina, or even other uses. Counsel to the Debtor, Jeffrey K. Paulsen, Esq., at FactorLaw, explains that despite their attractions, the Greenfield properties are difficult to maintain. The 311 E. Greenfield site once housed a coke and gas facility, leather tanneries, and a scrap and salvage operation. In January 2007, the U.S. EPA entered into an Administrative Settlement Agreement and Order on Consent (AOC) with the Potentially Responsible Parties (PRPs) for the conduct of a Remedial Investigation/Feasibility Study (RI/FS) covering portions of the site. The PRPs that voluntarily signed the AOC include American Natural Resources Company, Cliffs Mining Company, Maxus Energy Corporation, and Wisconsin Electric Power Company and Wisconsin Gas LLC (WE Energies). East Greenfield Investors LLC, the Debtor's parent company, is also participating in the agreement as a non-PRP Bonafide Prospective Purchaser. The PRPs and the East Greenfield Investors are conducting an RI/FS including a baseline risk assessment and ecological assessment at the site. The Remedial Investigation, which includes soil, groundwater, and sediment sampling, began in October 2008. The purpose of the Remedial Investigation is to get a more precise idea of the environmental problems at the site. When enough information about the site is gathered, it will be used to complete a document called a remedial investigation report. The EPA plans to deem the report "final" in 2016 and make it available to the public. After this report is final, the companies will submit another document for EPA's review and approval called a feasibility study. This study will compare different cleanup options for the site. The EPA will then select a remedy for the affected portions of the site. Apart from the environmental issues, the City of Milwaukee has filed a petition with the Circuit Court for Milwaukee County, Wisconsin, asking for an order compelling Golden Marina to raze seven buildings it deems unfit for human habitation, occupancy, or use. The Debtor has been evaluating contractors to raze the building but, due to apparent asbestos in the buildings and other issues, the entire process will be very expensive, possibly $330,000 or more. Because the work has not been completed, the City of Milwaukee has asked the state court to hold Golden Marina in contempt. A continued hearing on that motion is scheduled for July 15, 2016. Neither the Debtor nor Golden Marina have sufficient funds to complete the entire demolition. The Debtor has engaged in extensive efforts to find financing to complete the work: Golden Marina filed for bankruptcy in part to attract superpriority financing. To date, however, those efforts have not been entirely successful. The Debtor located some potential lenders, but their terms were not acceptable to the Debtor or his creditors. The Debtor eventually received a letter of intent for the financing from the Schultz Group, but the financing was tied to a quick purchase of the Greenfield properties, and the proposal drew objections from several parties in interest. It is the Debtor's understanding that three of the structures on the 311 E. Greenfield property, all located at the north end of the site, (the "North Structures") are particularly problematic, and that the City of Milwaukee is particularly interested in seeing the North Structures demolished as soon as possible. The Debtor has obtained a quote from the MRD Group to demolish just the North Structures, rather than all of the structures on the property. The cost is substantially less: just $199,700. Golden Marina has no cash, but the Debtor is currently holding approximately $238,000. The Debtor proposes to use cash from his personal bankruptcy estate to pay MRD work to demolish the North Structures. This will allow the Debtor to satisfy the City of Milwaukee's immediate concerns, while protecting the value of the Greenfield properties, which are to be sold and the proceeds paid, ultimately, to the Debtor's creditors. (The Debtor's plan provides that the Greenfield properties will be sold and the proceeds distributed to his creditors. The Debtor does not believe that Golden Marina has any substantial separate creditors, so most if not all funds will flow into this estate or to its creditors.) The Debtor has discussed this proposal with the City of Milwaukee, and understands that the City will withdraw its contempt motion if the demolition work on the North Structures proceeds as outlined in the MRD Group's quote. This will be without prejudice to the City renewing contempt proceedings in the event the Greenfield properties are not sold within 60 to 90 days and the demolition work completed by the new owner. The Debtor has also discussed this proposal with his main creditor, the Anne Marie Barry Trust. The Debtor understands that the Trust supports this use of estate funds. About Lawrence D. Fromelius Lawrence D Fromelius filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 15-22373) on June 29, 2015, and is represented by: William J. Factor, Esq. Ariane Holtschlag, Esq. Jeffrey K. Paulsen, Esq. FACTORLAW 105 W. Madison Street, Suite 1500 Chicago, IL 60602 Tel: (847) 2397248 Fax: (847) 574-8233 E-mail: wfactor@wfactorlaw.com aholtschlag@wfactorlaw.com jpaulsen@wfactorlaw.com MANLEY CONSTRUCTION: Plan and Disclosure Statement Due July 29 -------------------------------------------------------------- Manley Construction Corp. has entered into a Stipulation and Order with the U.S. Department of Justice, New York State Attorney General, Bricklayers Fringe Benefit Funds, BAC Local 1 and BAC Intl and PCC Funds, BAC Local 1 & BAC Intl regarding the deadline for filing the Plan and Disclosure Statement. The parties agree that the deadline for filing the Plan and Disclosure Statement is extended until July 29, 2016. Manley Construction Corp., based in Maspeth, N.Y., filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 14-41601) on April 2, 2014. Judge Elizabeth S. Stong presides over the case. Counsel to the Debtor: Stephen B Kass, Esq. 225 Broadway - Ste 711 New York, NY 10007 Tel: (212) 843-0050 Fax : (212) 571-0640 Email: skass@sbkass.com - and - Diana Revzin, Esq. Law Offices of Stephen B. Kass P.C. 225 Broadway, Suite 711 New York, NY 10007 Tel: (212) 843-0050 Email: drevzin@sbkass.com MARINA DISTRICT: S&P Affirms B+ CCR Over Planned Ownership Change ----------------------------------------------------------------- S&P Global Ratings said it affirmed all ratings on Atlantic City, N.J.-based gaming operator Marina District Development Co. (MDDC; doing business as Borgata), including the 'B+' corporate credit rating. The outlook remains stable. S&P expects to withdraw all ratings on MDDC following the close of the sale to MGM Resorts and the repayment of MDDC's existing debt instruments. "The affirmation reflects our expectation that upon the completion of the planned ownership change to MGM Resorts International from the current 50%/50% joint venture structure with Boyd Gaming Corp., MGM will repay MDDC's existing debt and the entity will be consolidated into the MGM portfolio," said S&P Global Ratings credit analyst Stephen Pagano. "As a result, we expect to withdraw our ratings once the acquisition closes," he added. The stable outlook reflects S&P's expectation that, in the event the planned acquisition is unsuccessful, MDDC will experience continued good operating performance and use its free operating cash flow to repay debt, resulting in lease-adjusted leverage improving to the low- to mid-3x area and EBITDA coverage of interest improving to above 4x in 2017. S&P expects the company to continue to maintain its leading market position in brick and mortar and online gaming in the Atlantic City market. MARJASU CORP: Disclosure Statement Hearing Set for Aug. 10 ---------------------------------------------------------- Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico scheduled a hearing on approval of Marjasu Corp.'s disclosure statement for August 10, 2016, at 9:00 A.M., to consider and rule upon the adequacy of the disclosure statement and the information contained therein, to consider objections to the disclosure statement, and such other matters as may properly come before the court. Objections to the form and content of the disclosure statement should be in writing and filed with the court and served upon parties in interest at their address of record not less than 14 days prior to the hearing. Objections not timely filed and served will be deemed waived. The bankruptcy case is IN RE: MARJASU CORP, Case No. 14-07793 MCF (Bankr. D.P.R.). METROPOLITAN BAPTIST: Wants 90-Day Extension of Plan Filing Period ------------------------------------------------------------------ Metropolitan Baptist Church asks the U.S. Bankruptcy Court for the District of Columbia to extend the exclusive period for Debtor to file a plan in this case for an additional ninety days. The Debtor says it has made significant progress with respect to both the relocation of its religious activities to permanent facilities and the reorganization of its debt. As a result of constructive negotiations with its creditors, Debtor has formulated the basis of a viable plan of reorganization beneficial to all interested parties. However, the Debtor says it needs additional time to complete this process and for this reason the Debtor requests that the Court increase the exclusive time for Debtor to propose a plan in this case by an additional 90 days. Since the commencement of the case, the Debtor has been required to devote significant time and resources to comply with the transitional requirements of a debtor-in-possession in Chapter 11. The case was filed on an expedited basis. Consequently, the Debtor has been required to complete all bankruptcy schedules and financial statements, consolidate pre-petition banking operations and prepare the required financial projections. Prior to filing bankruptcy, the Debtor maintained 11 bank accounts, including five restricted accounts for specified pledges/donations and employee benefits. It has been necessary for Debtor to consolidate these accounts as DIP funds, without violating the necessary restrictions. With respect to the size and complexity of the case, the principal debt consists of a $31 million deficiency resulting from a default on certain mortgage bonds issued by the Debtor. The Debtor requires additional time to submit a disclosure statement and plan given the fact that, since the petition date, Debtor has been involved in satisfying the transitional requirements of a debtor-in-possession in Chapter 11, including the preparation of schedules and financial statements and projections, the consolidation of restricted pre-petition banking operations and accounts, the preparation and filing of initial monthly operating reports and negotiations with the sole secured creditor. Good faith progress toward reorganization is evidenced by the preliminary settlement agreements negotiated by Debtor with the bond trustee and secured lender. The Debtor's monthly operating reports demonstrate that all bills have been paid in accordance with the terms thereof and Debtor is current in the payment of its quarterly trustee fees. The preliminary settlement of the $31 million deficiency and secured debt form the basis for a viable plan and demonstrate the extent of the progress in negotiations with creditors. Less than 120 business days have elapsed since the filing of this case. The Debtor has made no reorganization demands upon its creditors at this early stage of the case and this request for additional time to propose a plan is in no way intended to pressure any creditor. At this time, there are no unresolved contingencies present in the case. The Debtor's only remaining secured creditor is Industrial Bank. Industrial holds a note payable by Debtor in the principal amount of $414,220.68. The note is secured by a first priority lien on certain real property owned by Debtor and located at 1210 R Street, N.W., Washington, D.C. Pursuant to a series of loan extensions, the note was due on Sept. 1, 2014. However, subject to Bankruptcy Court approval, Industrial and Debtor are currently engaged in negotiations for a further extension of the maturity date and a timetable for the marketing and sale of the real property securing the note. The settlement of this debt will increase monthly revenue and significantly reduce, if not completely eliminate, the unsecured debt which must be included in the Debtor's plan. The Debtor is represented by: WEBSTER & FREDRICKSON, PLLC Wendell W. Webster Esq. 1775 K Street, N.W. Suite 600 Washington, D.C. 20006 Tel: (202) 659-8510 E-mail: wwebster@websterfredrickson.com Headquartered in Largo, Maryland, Metropolitan Baptist Church filed for Chapter 11 bankruptcy protection (Bankr. D.C. Case No. 16-00040) on Feb. 5, 2016, estimating its assets at between $1 million and $10 million and liabilities at between $10 million and $50 million. The petition was signed by Harry T. Jones, Jr., Chair, Board of Trustees. Judge Martin S. Teel, Jr., presides over the case. Wendell W. Webster, Esq., at Webster & Fredrickson, PLLC, serves as the Debtor's bankruptcy counsel. MISSISSIPPI REGIONAL CANCER: Wants 45-Day Extension of Plan Filing ------------------------------------------------------------------ North Central Mississippi Regional Cancer Center, Inc., asks the U.S. Bankruptcy Court for the Southern District of Mississippi to extend by 45 days within which to prepare and file a Disclosure Statement and Plan of Reorganization. The Disclosure Statement and Plan of Reorganization are currently due on June 6, 2016. The Debtor has been in negotiations with various creditors and making determinations to allow it to finalize many matters with regard to a Disclosure Statement and the proposed Plan of Reorganization to be filed. Rather than filing an incomplete Disclosure Statement and Plan at this time, the Debtor seeks an additional 45 days to allow time for the Debtor to make a decision as to Disclosure Statement information, Plan feasibility and debt restructuring. The Debtor's counsel can be reached at: LAW OFFICES OF CRAIG M. GENO, PLLC Craig M. Geno, Esq. Jarret P. Nichols, Esq. 587 Highland Colony Parkway Ridgeland, MS 39157 Tel: (601) 427-0048 Fax: (601) 427-0050 E-mail: Email: cmgeno@cmgenolaw.com Headquartered in Jackson, Mississippi, North Central Mississippi Regional Cancer Center, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Miss. Case No. 16-00342) on Feb. 5, 2016, estimating its assets at between $100,000 and $500,000 and its liabilities at between $1 million and $10 million. The petition was signed by Jennifer Welch, director, vice president. Judge Edward Ellington presides over the case. Craig M. Geno, Esq., at the Law Offices of Craig M. Geno, PLLC, serves as the Debtor's bankruptcy counsel. ML HOSPITALITY: Case Summary & 8 Unsecured Creditors ---------------------------------------------------- Debtor: ML Hospitality, Inc. 4403 IH 10 East San Antonio, TX 78219 Case No.: 16-51282 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Western District of Texas (San Antonio) Judge: Hon. Ronald B. King Debtor's Counsel: William R. Davis, Jr., Esq. LANGLEY & BANACK, INC. 745 E Mulberry Ave, Suite 900 San Antonio, TX 78212 Tel: (210) 736-6600 Fax: (210) 735-6889 E-mail: wrdavis@langleybanack.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Mohammed N. Alam, president. A list of the Debtor's eight largest unsecured creditors is available for free at http://bankrupt.com/misc/txwb16-51282.pdf MODERN SHOE: Committee Seeks to Hire Brown Rudnick as Counsel ------------------------------------------------------------- The official committee of unsecured creditors of Modern Shoe Company LLC and Highline United LLC seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire Brown Rudnick LLP as its legal counsel. The committee tapped the firm to: (a) assist in its discussions with the Debtors and other parties-in-interest regarding the overall administration of their bankruptcy cases; (b) represent the committee at hearings; (c) assist the committee in its examination and analysis of the conduct of the Debtors' affairs; (d) review and analyze pleadings, orders, schedules and other documents filed and to be filed with the court by parties-in-interest; (e) prepare legal papers; (f) confer with the professionals retained by the Debtors and other parties; (g) coordinate the receipt and dissemination of information prepared by and received from the Debtors' professionals; (h) participate in examinations of the Debtors and other witnesses; and (i) negotiate and formulate a plan of reorganization or liquidation for the Debtors. Brown Rudnick has agreed to cap its rates at $595 per hour, subject to a possible rolling monthly fee cap. The primary attorneys anticipated to represent the committee are William Baldiga whose usual hourly rate is $1,165, and Jesse Garfinkle whose usual hourly rate is $590. Both will be charged at $595 per hour, according to court filings. In a court filing, Mr. Baldiga disclosed that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. Brown Rudnick can be reached through: William R. Baldiga Brown Rudnick LLP One Financial Center Boston, MA 02111 Tel: (617) 856-8200 Fax: (617) 856-8201 E-mail: wbaldiga@brownrudnick.com About Modern Shoe Headquartered in Hyde Park, Massachusetts, Modern Shoe Company LLC and Highline United LLC are specialty designers, wholesalers, and importers of premium-segment footwear. The Debtors currently employ six designers, who design footwear for each season. The Debtors provide the design specifications, including style, color, and material, to third party manufacturers. The footwear is manufactured overseas, primarily in China, by JS Macao International, Universal Max and Ash (HK) Limited ("the Affiliate Manufacturers"), which companies share some common ownership with the Debtors' ultimate ownership. The Debtors also previously manufactured handbags, but discontinued that business in November 2015. Modern Shoe was originally founded by individual investors and a company called Grandview International Ltd. In 2009, Grandview acquired the interests of the individual investors and Modern Shoe became a wholly-owned subsidiary of Grandview. Grandview has also wholly-owned Highline since Highline's inception. Grandview is a holding company. In addition to the Debtors, Grandview owns 100% of the interests of two affiliated companies -- ASH Footwear International LLC and JMC Footwear LLC -- both of which were closed in 2015 and dissolved in early 2016. Grandview itself is owned by a holding company known as Highline United Holdings USA, Inc. Each of the Debtors filed a Chapter 11 bankruptcy petition (Bankr. D. Mass. Case Nos. 16-11658 and 16-11659) on May 2, 2016. The petitions were signed by Kimberley Bradley as COO and CFO. Modern Shoe estimated assets in the range of $1 million to $10 million and liabilities of up to $50 million. Highline United estimated assets and liabilities in the range of $10 million to $50 million. The Debtors have hired Foley Hoag LLP as counsel, Verdolino & Lowey, P.C. as accountant and BErickson Group, LLC as restructuring advisor. Judge Melvin S. Hoffman has been assigned the cases. MODERN SHOE: Committee Seeks to Hire CBIZ as Financial Advisor -------------------------------------------------------------- The official committee of unsecured creditors of Modern Shoe Company LLC and Highline United LLC seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire CBIZ Corporate Recovery Services as its financial advisor. The committee tapped the firm to: (a) give advice about the financial implications of the Debtors' proposed sale of their assets to Bright Star Ventures, LLC; (b) assess the Debtors' bid procedures and marketing process related to the asset sale; (c) supplement the marketing process and run a marketing process if requested or required; (d) analyze and monitor the Debtors' liquidity; (e) advise the committee about the financial implications of all proposed transactions, including debtor-in-possession financing and plans of reorganization or liquidation; (f) conduct valuation analyses, liquidation analyses and any other analysis requested or required by the committee; (g) review and analyze the Debtors' schedules of assets and liabilities, statements of financial affairs, monthly operating reports and all other fiduciary filings; (h) investigate causes of action arising under Chapter 5 of the Bankruptcy Code; (i) report all findings to the committee; (j) attend depositions, court hearings and meetings with the Debtors; and (k) prepare any expert reports required and testify at depositions or court hearings as required. CBIZ will be paid according to its regular hourly rates in effect at the time the services are rendered. The engagement will be led by Jeffrey Varsalone, a managing director whose normal hourly rate is $575. His hourly rate will be reduced to $425 per hour. Meanwhile, the hourly rates for the support staff range from $175 to $285. CBIZ has agreed to a rolling monthly fee cap of $30,000. In addition, the firm will receive reimbursement for work-related expenses. In a court filing, Mr. Varsalone disclosed that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey T. Varsalone CBIZ Corporate Recovery Services 500 Boylston Street Boston, MA 02116 Tel: 617-761-0600 About Modern Shoe Headquartered in Hyde Park, Massachusetts, Modern Shoe Company LLC and Highline United LLC are specialty designers, wholesalers, and importers of premium-segment footwear. The Debtors currently employ six designers, who design footwear for each season. The Debtors provide the design specifications, including style, color, and material, to third party manufacturers. The footwear is manufactured overseas, primarily in China, by JS Macao International, Universal Max and Ash (HK) Limited ("the Affiliate Manufacturers"), which companies share some common ownership with the Debtors' ultimate ownership. The Debtors also previously manufactured handbags, but discontinued that business in November 2015. Modern Shoe was originally founded by individual investors and a company called Grandview International Ltd. In 2009, Grandview acquired the interests of the individual investors and Modern Shoe became a wholly-owned subsidiary of Grandview. Grandview has also wholly-owned Highline since Highline's inception. Grandview is a holding company. In addition to the Debtors, Grandview owns 100% of the interests of two affiliated companies -- ASH Footwear International LLC and JMC Footwear LLC -- both of which were closed in 2015 and dissolved in early 2016. Grandview itself is owned by a holding company known as Highline United Holdings USA, Inc. Each of the Debtors filed a Chapter 11 bankruptcy petition (Bankr. D. Mass. Case Nos. 16-11658 and 16-11659) on May 2, 2016. The petitions were signed by Kimberley Bradley as COO and CFO. Modern Shoe estimated assets in the range of $1 million to $10 million and liabilities of up to $50 million. Highline United estimated assets and liabilities in the range of $10 million to $50 million. The Debtors have hired Foley Hoag LLP as counsel, Verdolino & Lowey, P.C. as accountant and BErickson Group, LLC as restructuring advisor. Judge Melvin S. Hoffman has been assigned the cases. MUNDO LATINO MARKET: Taps Alla Kachan as Legal Counsel ------------------------------------------------------ Mundo Latino Market Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire the Law Offices of Alla Kachan, P.C. as its legal counsel. The Debtor tapped the firm to: (a) assist the Debtor in administering its Chapter 11 case; (b) represent the Debtor in prosecuting adversary proceedings to collect assets of the estate; (c) take steps necessary for Debtor to marshal and protect the estate's assets; (d) negotiate with the Debtor's creditors in formulating a plan of reorganization; and (e) draft and prosecute the confirmation of the Debtor's plan of reorganization. The firm will bill the Debtor for legal services at its regular hourly rates. These fees range from $150 per hour for clerks and paraprofessionals to $275 per hour for attorneys. Alla Kachan, Esq., disclosed in a court filing that his firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Alla Kachan, Esq. Law Offices of Alla Kachan, P.C. 3099 Coney Island Avenue, 3rd Floor Brooklyn, NY 11235 Tel.: (718) 513-3145 About Mundo Latino Market Mundo Latino Market Inc. sought protection under Chapter 11 of the Bankruptcy Code in the Southern District of New York (Manhattan) (Case No. 16-11349) on May 11, 2016. The petition was signed by Kathryn N. Holler, president. The Debtor disclosed total assets of $297,997 and total debts of $1.34 million. NEW SHILOH MISSIONARY: Taps Gouveia & Associates as Legal Counsel ----------------------------------------------------------------- New Shiloh Missionary Baptist Church Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Indiana to hire Gouveia & Associates as its legal counsel. The services to be provided by the firm include: (a) the preparation of pleadings and applications and the conduct of examinations; (b) developing the relationship of the status of the Debtor to the claims of creditors; (c) advising the Debtor about its rights, duties and obligations; and (d) legal services necessary to the day-to-day operation of the Debtor's business. Gouveia & Associates will be compensated according to its standard hourly rates and will receive reimbursement for work-related rates. The firm's professionals and their hourly rates as of June 2 are: Gordon E. Gouveia $400 Catherine Molnar-Boncela $275 Shawn D. Cox $275 Paralegals $100 Mr. Cox disclosed in a court filing that no attorney at Gouveia & Associates has any interest, which may be affected by the firm's representation of the Debtor. Gouveia & Associates can be reached through: Shawn D. Cox Gouveia & Associates 433 W. 84th Drive Merrillville, IN 46410 (219) 736-6020 About New Shiloh Missionary New Shiloh Missionary Baptist Church Inc. sought protection under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Indiana on June 2, 2016. NEWFIELD EXPLORATION: Fitch Affirms 'BB+' IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Newfield Exploration Co.'s (Newfield; NYSE: NFX) Long-term Issuer Default Rating and unsecured debt ratings at 'BB+'. The Rating Outlook is Stable. Approximately $2.4 billion of debt is affected by today's rating actions. KEY RATING DRIVERS Newfield's ratings reflect the company's liquids-focused production profile and proved reserves (1p) base with a growing position in the promising Anadarko Basin, adequate liquidity, favorable hedging position, and credit-conscious financial policy, including a willingness and ability to access equity capital markets twice since February 2015. These considerations are offset by the company's moderate size, historical loss of operational momentum associated with its restructuring activity, and heightened execution risk given the relatively early development stage of and higher capital allocation toward its STACK position (over 80% of planned capital expenditures in Anadarko Basin). Fitch recognizes that results from the STACK play continue to be encouraging with strong growth potential from multiple, oil-weighted stacked intervals and opportunities to further improve economics through production efficiencies, particularly as the company transition to development activities in the 2018 timeframe. The company reported an approximately 21% year-over-year decline in net proved reserves of 509 million barrels of oil equivalent (mmboe) at year-end 2015 mainly due to price-linked revisions. Production, however, increased approximately 11% year-over-year to nearly 150 thousand boe per day (mboepd) for the year-ended 2015 benefiting from growth in the Anadarko Basin and a full-year of China production offset by declines in other regions. This results in a reserve life of about nine years. First quarter 2016 production of over 164 mboepd, an approximately 20% year-over-year increase, illustrated the maintenance of operational momentum going into the year, specifically in the company's core Anadarko position, but production is anticipated to decline in the second half of the year due to reduced investment (around two-thirds of budgeted capex will be spent in 1H 2016). Liquids mix improved to nearly 65% in 2015 but is anticipated to be around 62% in 2016 given the declines in production from liquids-weighted plays and rise in Anadarko production (59.6% liquids Q1 2016). Newfield's core STACK acreage has exhibited an oil mix generally in the 60%-80% range. Fitch-calculated unhedged cash netbacks declined year-over-year to $11.41/boe, or approximately 58%, mainly due to the decline in oil & gas prices. This unhedged cash netback profile is comparable to the average of independent E&P peers. Fitch believes the company's netback profile is likely to improve as the production mix continues to shift towards the Anadarko resulting in improved drilling economics. Management anticipates STACK well costs of $6.9 million currently could decline to $6.5 million through the course of the year via ongoing production efficiency gains, as well as some additional service cost savings, with further well cost improvements possible during the development phase. Production has outperformed the company's type curves despite the focus on holding acreage by production vs. production optimization. Credit metrics remained relatively steady year-over-year at 1.9x for yearend 2015 compared to 2.0x in 2014. While oil & gas prices were weak, the company's credit metrics benefited from its strong hedge position, equity-funded gross debt reduction, improved operating cost profile, measured capital program, commencement of China oil production, and shift to higher return U.S. onshore drilling activity. The Fitch-calculated debt/LTM EBITDA, debt/1p reserves, debt/proved developed (PD) reserves, and debt/flowing barrel were approximately 2.0x, $4.78/boe, $7.38/boe, and $14,804, respectively, as of March 31, 2016. These credit metrics are generally consistent with or better than similarly rated North American E&P peers. MEASURED OUTSPEND, WIDER METRICS FORECAST Fitch's base case projects that Newfield will be approximately $75-$100 million FCF negative in 2016. Proceeds from the roughly $775 million equity issuance were and are expected to be allocated to repay revolver borrowings, cover the first quarter cash flow outspend, and fund the pending STACK acquisition. Management indicated that it intends to sell non-core assets to further improve its liquidity position and fund any cash flow outspend. The Fitch base case results in 2016 debt/EBITDA of approximately 3.5x. This year-over-year increase mainly reflects Fitch's lower oil & gas price assumptions and reduced hedge uplift. Upstream credit metrics are expected to remain relatively unchanged with some debt/flowing metric improvement given forecasted production growth. The Fitch base case forecasts that debt/EBITDA improves to 2.3x in 2018 with an improvement in Fitch's oil & gas price assumptions, incremental core production growth, and continued STACK-related production and cost efficiency gains. Newfield maintains a rolling, multi-year hedging program, using a combination of swaps and collars, to manage cash flow variability and support development funding. The company added to its 2016 and 2017 oil & gas hedge positions through April 29, 2016. Oil hedges were added in the low-$40/barrel and mid-$40/barrel range for 2016 and 2017, respectively. Gas hedges were added in the mid-to-high $2/mcf range for 2017. The hedge activity and prices suggest management continues to manage its financial flexibility and believes these prices mostly cover STACK development costs. As of April 29, 2016, Newfield's U.S. oil production was about 80% and 50% hedged for 2016 and 2017, respectively. Meanwhile, natural gas production was over 10% and nearly 45% hedged for 2016 and 2017, respectively. The company reported a derivative asset value of $299 million as of March 31, 2016. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for Newfield include: -- WTI oil price that trends up from $35/barrel in 2016 to a long-term price $65/barrel; -- Henry Hub gas that trends up from $2.25/mcf in 2016 to a long-term price of $3.25/mcf; -- Production grows modestly to approximately 152 mboepd in 2016 generally consistent with management guidance, followed by a relatively flat production profile in 2017 and measured growth profile thereafter; -- Liquids mix declines to approximately 62% in 2016, generally consistent with management guidance, followed by a similar mix thereafter given an assumed focus on liquids and the rise in production within the Anadarko Basin; -- Capital spending of $675 million in 2016, consistent with the upper end of guidance, followed by a measured cash flow outspend; -- Non-core assets sale proceeds of $400 million in 2016 and no additional sales over the forecast period. RATING SENSITIVITIES Positive: Future developments that may, individually or collectively, lead to a positive rating action include: -- Increased size, scale, and diversification of Newfield's operations with some combination of the following metrics; -- Mid-cycle debt/EBITDA of 2x-2.25x on a sustained basis; -- Debt/flowing barrel under $20,000, debt/1p below $5.50/boe, and/or debt/PD around $7.50/boe on a sustained basis. Fitch does not anticipate a positive rating action in the current weak pricing environment. However, continued operational execution and a clear path to core production and reserve growth, while maintaining financial flexibility, could lead to a positive rating action over the medium term. Negative: Future developments that may, individually or collectively, lead to a negative rating action include: -- Failure to manage liquidity and FCF leading to significantly reduced financial flexibility; -- Mid-cycle debt/EBITDA above 2.5x-2.75x on a sustained basis; -- Debt/flowing barrel of around $25,000, debt/1p above $6.50 -$7/boe, and/or debt/PD over $8.50-$9/boe on a sustained basis; -- Material acceleration of development activity ahead of an improvement in the oil & gas price environment and/or prior to entering into supportive hedge positions. ADEQUATE LIQUIDITY POSITION Newfield has historically maintained a nominal cash balance. Cash and equivalents were $537 million as of March 31, 2016. During Q2 2016, Newfield agreed to purchase additional STACK acreage for approximately $470 million, which is expected to be funded with cash-on-hand. Pro forma cash and equivalents is $67 million as of March 31, 2016. Additional liquidity is provided by the company's $1.8 billion senior unsecured credit facility due June 2020, as well as $160 million in money market lines of credit. The revolver and money market lines of credit had no outstanding borrowings as of March 31, 2016. EXTENDED MATURITIES PROFILE AND MANAGEABLE COVENANTS The company has an extended maturities profile with its next senior unsecured debt maturity in 2022. Financial covenants, as defined in the credit facility agreement, consist of a maximum debt-to-book capitalization ratio of 60% and an EBITDAX/interest expense ratio of at least 2.5x. The company recently amended its interest coverage covenant to 2.5x from 3.0x, at a cost of $3 million, in order to opportunistically increase headroom. Other customary covenants across debt instruments restrict the ability to incur additional liens, engage in sale/leaseback transactions, and merge, consolidate, or sell assets, as well as change in control provisions. The company is in compliance with all of its covenants with ample cushion. MANAGEABLE OTHER LIABILITIES Newfield does not maintain a defined benefit pension plan. Asset retirement obligations (AROs) increased modestly year-over-year to $196 million as of March 31, 2016. Other contingent obligations, as of Dec. 31, 2015, totaled $645 million on a multi-year, undiscounted basis comprising firm transportation agreements ($337 million) and operating leases and other service contracts ($308 million). Additionally, the company entered into oil and gas delivery commitments for a total of approximately 102 MMboe between 2015 and 2025. The majority of these delivery commitments (nearly 99 MMboe) are associated with its Tesoro and HollyFrontier refinery arrangements to accommodate the company's waxy Uinta production. These arrangements require deliveries of 18 mboepd through 2020 and 15 mboepd (increasing to 20 mboepd by the end of Q3 2016) through August 2025. The company's estimated total transportation/processing costs of $260 million for 2016 includes Arkoma unused firm gas transportation and Uinta oil & gas delivery shortfall fees of approximately $52 million and $21 million, respectively. Arkoma production has been significantly curtailed over the past several years resulting in an approximately 11% year-over-year decline (about 16 mboepd at Q4 2015; 99% dry gas) due to low natural gas prices. Similarly, Uinta production has dropped 21% year-over-year (about 20 mboepd at Q4 2015; 82% oil) due to the lack of drilling activity, though the company continues to inject water to advance waterflood development. Continued production declines could result in additional shortfall fees. Fitch views the risk of an increase in shortfall fees as manageable. Fitch also believes that these assets are generally considered non-core and are likely asset sale candidates. FULL LIST OF RATING ACTIONS Fitch has affirmed Newfield's ratings as: Newfield Exploration Co. -- Long-term IDR at 'BB+'; -- Senior unsecured bank facility at 'BB+/RR4'; -- Senior unsecured notes at 'BB+/RR4'. The Rating Outlook is Stable. NJK HOSPITALITY: Disclosure Statement Hearing Set for July 14 ------------------------------------------------------------- Judge Andrew B. Alternburg, Jr., of the U.S. Bankruptcy Court for the District of New Jersey will convene a hearing on the adequacy of the disclosure statement filed by NJK Hospitality, LLC, on July 14, 2016, at 10:00 a.m. Written objections to the adequacy of the Disclosure Statement must be filed with the Clerk of this Court and served upon counsel for the Debtor, counsel for the proponents, counsel for the Official Committee of Unsecured Creditor, and upon the United States Trustee no later than 14 days prior to the hearing before this Court, unless otherwise directed by the court. NJK Hospitality, LLC, dba Geets Diner, aka Vasilios Patouhas, aka Bill Patouhas, dba NJK Real Estate Enterprises, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J., Case No. 15-19655) on May 22, 2015. The case is assigned to Judge Andrew B. Altenburg Jr. The Debtor's counsel is Barry J Beran, Esq., at Beran & Beran, in Cherry Hill, New Jersey. The petition was signed by Vasilios Patouhas, authorized individual. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb15-19655.pdf NORANDA ALUMINUM: Wants Plan Filing Period Extended to Oct. 5 ------------------------------------------------------------- Noranda Aluminum, Inc., et al., ask the U.S. Bankruptcy Court for the Eastern District of Missouri to extend by 120 days each of (i) the Debtors' exclusive period to file a Chapter 11 plan from June 7, 2016, to Oct. 5, 2016, and (ii) the Debtors' exclusive period to solicit acceptances of the plan from Aug. 8, 2016, to Dec. 5, 2016. A hearing on the request is set for July 14, 2016, at 10:00 a.m. (prevailing Central Time). Objections to the request must be filed by July 7, 2016. At the outset of these Chapter 11 cases, the Debtors obtained approval to enter into two separate but coordinated debtor-in-possession credit facilities totaling $165 million to finance the Debtors' operations during these Chapter 11 cases, as well as other critical early case relief. The Debtors, with the help of their professional advisors, during the first 120 days of these Chapter 11 cases have been dedicated to ensuring a smooth transition into Chapter 11, meeting certain milestones required by their DIP financing, and accomplishing other Chapter 11-related objectives dictated by the Debtors' circumstances. These initiatives have been designed to enhance the value of the Debtors' operations using the tools available to them under the Bankruptcy Code, and their conclusion is a necessary predicate to filing a Chapter 11 plan. While the Debtors have made material progress during the first 120 days of these Chapter 11 cases, additional work remains. Accordingly, the Debtors request that the motion be granted and that each of their Exclusive Periods be extended by 120 days, respectively. As amended, the Debtors' DIP financing required the Debtors to deliver by May 20, 2016, a five-year business plan relating to their Upstream Business. Preparing the Business Plan was a major initiative in the early stages of these Chapter 11 cases and required a significant dedication of time and effort from the Debtors and their professionals. On April 8, 2016, the Debtors delivered the Business Plan to their DIP lenders. This was followed by an amended business plan on May 19, 2016, which satisfied the Debtors' obligations under their DIP financing milestone. The Debtors were required, on or before May 29, 2016, to file a Chapter 11 plan relating to their Upstream Business or file a motion to establish bid procedures for the sale of business under Section 363 of the Bankruptcy Code. This deadline has since been extended to June 13, 2016. The Debtors' DIP financing also required them (i) to obtain, on or before April 21, 2016, an order approving bid procedures for the sale of the Debtors' Downstream Business, and (ii) to close the Downstream Sale Process on or before July 5, 2016. On March 21, 2016, the Court entered an order approving the bid procedures for the Downstream Sale Process. Since that date, the Debtors have been diligently conducting the Downstream Sale Process. This process has involved responding to comprehensive diligence requests from multiple potential bidders, maintaining multiple data rooms, conducting meetings with potential bidders, negotiating and drafting asset purchase agreements with interested parties, and coordinating with other parties in interest, including the Creditors' Committee and various federal regulatory agencies. The timeline of the Downstream Sale Process has since been extended in consultation with the Debtors, their DIP lenders and the Creditors' Committee. The milestone for entry of an order approving the sale of the Downstream Business now is July 18, 2016. In addition, the milestone for the closing of the Downstream Sale Process is now 30 days from entry of an order approving the sale. In the Debtors' judgment, the conclusion of the Downstream Sale Process is necessary before any party in interest may pursue a sensible Chapter 11 plan. The Debtors have been working to achieve consensual modifications to the collective bargaining agreements covering their facilities in New Madrid, Missouri, Gramercy, Louisiana, and St. Ann, Jamaica. This process has required coordination between the Debtors' employees and various professionals, and has included responding to numerous diligence requests from the Debtors' unions and attending regular in-person presentations and bargaining sessions in Louisiana, Missouri and Pennsylvania. Prepetition, the Debtors received an adverse arbitration decision concerning the amount of the production levy the Debtors are required to pay to the Government of Jamaica for bauxite mined and exported from their St. Ann Facility. As a result, the Debtors' production levy increased dramatically, placing significant pressure on the Debtors' economic ability to operate their Jamaican bauxite mining operation. Since then, the Debtors have been negotiating with the GOJ to reach a consensual agreement that would provide the Debtors with needed levy relief. The outcome of these negotiations is an important piece of these Chapter 11 cases. The Debtors are one of the country's largest integrated producers of primary aluminum and high-quality rolled aluminum coils. The Debtors are also one of the country's largest producers of value-added primary aluminum and are also an integrated manufacturer of aluminum foil and light sheet aluminum products. Shortly before the commencement of these Chapter 11 cases, the Debtors' New Madrid Facility suffered a power outage that caused catastrophic losses and required the Debtors to immediately take steps to idle that facility. The idling of the New Madrid Facility has forced the Debtors, during the early stages of these Chapter 11 cases, to shift the focus of their Upstream Business, as set forth in their Business Plan, to preserve its viability. Meanwhile, the Debtors have simultaneously been conducting the Downstream Sale Process. The Debtors' counsel can be reached at: CARMODY MACDONALD P.C. Christopher J. Lawhorn, Esq. Angela L. Drumm, Esq. Colin M. Luoma, Esq. 120 S. Central Avenue, Suite 1800 St. Louis, Missouri 63105 Tel: (314) 854-8600 Fax: (314) 854-8660 E-mail: cjl@carmodymacdonald.com ald@carmodymacdonald.com cml@carmodymacdonald.com and PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Alan W. Kornberg, Esq. Elizabeth R. McColm, Esq. Alexander Woolverton, Esq. Michael M. Turkel, Esq. 1285 Avenue of the Americas New York, New York 10019 Tel: (212) 373-3000 Fax: (212) 757-3990 E-mail: akornberg@paulweiss.com emccolm@paulweiss.com awoolverton@paulweiss.com mturkel@paulweiss.com About Noranda Aluminum Noranda Aluminum, Inc., and 10 of its affiliates filed separate Chapter 11 bankruptcy petitions (Bankr. E.D. Mo. Proposed Lead Case No. 16-10083) on Feb. 8, 2016. The petitions were signed by Dale W. Boyles, the chief financial officer. Judge Barry S. Schermer is assigned to the cases. The Debtors have engaged Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel, Carmody MacDonald P.C. as local counsel, PJT Partners, LP as investment banker, Alvarez & Marsal North America, LLC as restructuring advisors and Prime Clerk LLC as claims, solicitation and balloting agent. The Debtors estimated both assets and liabilities in the range of $1 billion to $10 billion. As of the Petition Date, the Debtors had approximately $529.6 million in outstanding principal amount of secured indebtedness, consisting of a revolving credit facility and a term loan facility. The Debtors had approximately 1,857 employees as of the Petition Date. The Office of the U.S. Trustee appointed seven creditors of Noranda Aluminum Holding Corp. and its affiliated debtors to serve on the official committee of unsecured creditors. The Committee retained Lowenstein Sandler LLP as counsel and Houlihan Lokey Capital Inc. as financial advisor and investment banker. NORTH STATE OF WNY: Seeks to Hire Amigone as Legal Counsel ---------------------------------------------------------- North State of WNY, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of New York to hire Amigone, Sanchez & Mattrey, LLP as its legal counsel. The firm, as general counsel, will represent the Debtor during the course of its bankruptcy case in connection with all legal matters for which it may require legal assistance. The current hourly rates of the attorneys who will render services to the Debtor are: Arthur G. Baumeister, Jr. $275 Scott Bogucki $150 Mr. Baumeister disclosed in a court filing that the firm does not hold or represent any interest adverse to the Debtor's estate. The firm can be reached through: Arthur G. Baumeister, Jr. Amigone, Sanchez & Mattrey, LLP 1300 Main Place Tower Buffalo, New York 14202 Tel: (716) 852-1300 Email: abaumeister@amigonesanchez.com About North State of WNY North State of WNY, Inc. sought protection under Chapter 11 of the Bankruptcy Code in the Western District of New York (Buffalo) (Case No. 16-11059) on May 25, 2016. The petition was signed by Michael J. Manning, president. The Debtor disclosed total assets of $658,215 and total debts of $1.23 million. NOVELIS INC: S&P Affirms CCR on Expected Credit Ratio Improvement ----------------------------------------------------------------- S&P Global Ratings said it affirmed its 'B+' long-term corporate credit rating on global rolled aluminum producer Novelis Inc. The outlook is stable. At the same time, S&P Global Ratings revised its stand-alone credit profile (SACP) on the company to 'b+' from 'b'. S&P Global Ratings also affirmed its 'BB' senior secured term loan rating (with a '1' recovery rating, indicating S&P's expectation of very high [90%-100%] recovery in a default scenario), and 'B' senior unsecured notes rating (and '5' recovery rating, indicating S&P's expectation of modest [10%-30%; at the low end of the range] recovery) on the company. The ratings primarily reflect S&P's view that growth in earnings and cash flow alongside gradual debt reduction will enable the company to generate stronger core credit ratios over the next two years. S&P estimates Novelis' adjusted debt-to-EBITDA ratio at about 6x and EBITDA interest coverage in the mid-2x area over this period -- consistent with a highly leveraged financial risk profile. A continued increase in automotive shipments, efficiency gains, and relatively stable local market premiums underpin S&P's estimates. In addition, Novelis recently publicly committed to reducing net leverage which, in S&P's view, reduces the risk of dividend payments to its parent, Hindalco Industries Ltd., over the next two years. In S&P's view, these factors more than offset what it considers relatively weak credit measures in fiscal 2016. S&P's satisfactory business risk profile and highly leverage financial risk profile are unchanged, resulting in a 'b+' anchor score. However, S&P no longer applies a negative comparable ratings analysis modifier. "In our view, the company's prospective credit measures are similar to or stronger than those of peers with the same financial risk assessment," said S&P Global Ratings credit analyst Jarrett Bilous. As a result, S&P revised the SACP to 'b+' from 'b'. S&P continues to view Novelis as a moderately strategic subsidiary of Hindalco. However, S&P no longer considers the group credit profile to be stronger than the SACP on Novelis, resulting in no change to the final 'B+' rating. S&P's highly leveraged financial risk assessment primarily reflects the company's high debt load, which includes securitizations and unfunded pension deficit. S&P believes Novelis' financial risk profile will strengthen over the next two years, primarily based largely on S&P's expectation for growth in earnings and cash flow in tandem with lower capital expenditures. However, S&P expects the company's core credit measures to remain commensurate with the ratings. The stable outlook primarily reflects S&P's view that Novelis' core credit measures will improve over the next two years. S&P expects the company to generate earnings and cash flow growth over this period, with a corresponding reduction in growth-related capital expenditures that result in free cash flow and debt repayment. S&P estimates adjusted debt-to-EBITDA in the 6x area in the next two years, with interest coverage of over 2x. S&P could lower the rating if Novelis generates EBITDA interest coverage below 2x or adjusted debt-to-EBITDA that remains near 8x over the next 12-18 months. In this scenario, S&P would expect slower-than-expected growth in earnings and cash flow from subdued shipment levels, or operating cost pressure that strains free cash flow generation and limits improvement in net debt. S&P could also lower its ratings if refinancing risk increases or if Novelis' group credit profile weakens. S&P considers a positive rating action unlikely over the next year because S&P believes the company will maintain a highly leveraged financial risk profile, and do not expect a significant improvement in its group credit profile. However, an upgrade could result from Novelis generating adjusted debt-to-EBITDA of about 5x in tandem with a corresponding improvement in the group credit profile. PARALLEL ENERGY: Seeks to Sell or Abandon Miscellaneous Assets -------------------------------------------------------------- Parallel Energy LP, et al., ask for approval from the U.S. Bankruptcy Court for the District of Delaware to sell or, in the alternative, abandon miscellaneous assets of the Debtors in order to finalize the winding down and closing of their estates. Following the Court-approved sale of substantially all assets to Scout Energy Group II, LP, the Debtors retained ownership rights to certain miscellaneous assets which include, among other things, general tangible and intangible assets. These Miscellaneous Assets are unrelated to the assets purchased by Scout. The Debtors intend to sell any Miscellaneous Asset generating $50,000 or less in proceeds in the reasonable exercise of their business judgment to ensure such sales are in the best interests of the estates and their creditors. Any such sales would be (a) consummated without further notice and order of the Court; and (b) free and clear of all liens, claims and encumbrances, as defined in Section 101(37) of the Bankruptcy Code with any such Liens attaching only to the sale proceeds with the same validity, extent and priority as had attached to the Miscellaneous Asset(s) immediately before such sale. The Debtors propose that if no written objections from any of the Notice Parties are filed within seven business days after the date of receipt of a Sale Notice, then the Debtors are authorized to immediately consummate such sale free and clear of all Liens, with any such Liens attaching only to the sale proceeds with the same validity, extent and priority as had attached to the Miscellaneous Assets immediately prior to such sale. To the extent such Miscellaneous Assets cannot be sold at a price greater than the cost of liquidating such assets, the Debtors seek authority to abandon such Miscellaneous Assets in the exercise of their reasonable business judgment. A copy of the Motion filed June 1, 2016, is available for free at: http://bankrupt.com/misc/Parallel_E_303_Sale_M.pdf About Parallel Energy Parallel Energy LP and Parallel Energy GP LLC were oil and gas businesses engaged in acquiring, owning, developing and operating long-life oil and natural gas properties in Texas and Oklahoma. Parallel Energy LP formerly known as Parallel Energy Acquisitions LP, and Parallel Energy GP LLC filed for Chapter 11 protection (Bankr. D. Del Case Nos. 15-12263 and 15-12264) on Nov. 9, 2015. The petitions were signed by Richard N. Miller, chief financial officer. The Hon. Kevin Gross presides over the cases. Demetra L. Liggins, Esq., and David M. Bennett, Esq., at Thompson & Knight LLP and GianClaudio Finizio, Esq., at Bayard, P.A., represent the Debtors as co-counsel. Alvarez & Marsal North America, LLC serves as financial advisor. Prime Clerk LLC serves as notice, claims, solicitation and balloting agent. Parallel Energy LP estimated assets and debt at $100 million to $500 million. * * * On the Petition Date, the Debtors filed a motion seeking Court approval to sell substantially all of the Debtors' assets to Scout Energy Group II, LP. On Jan. 12, 2016, the Court, entered an order approving the Sale Motion, and on Jan. 28, 2016, the Sale to Scout closed. Following the Closing Date, the Debtors’ operations have ceased. On March 18, 2016, the Debtors sought and obtained entry of an order (a) authorizing dismissal of these Cases by submission of the form of Dismissal Order under Certification of Counsel after the Debtors distribute the Sale proceeds and satisfy, resolve, or otherwise settle all allowed, known, and valid administrative expenses, including allowed professional fees, and (b) authorizing each Debtor to take all reasonably necessary steps to dissolve under applicable law. PETTERS COMPANY: Finn Ruling Does Not Vitiate Trustee's Case ------------------------------------------------------------ Judge Gregory F. Kishel of the United States Bankruptcy Court for the District of Minnesota concluded that the Minnesota Supreme Court's ruling in Finn v. Alliance Bank, 860 N.W.2d 638 (Minn. 2015), does not vitiate the case of the trustee for Petters Company for recovery of at least the ostensible interest-component that the Debtors paid to the Opportunity Finance defendants and other investor-lenders into the Petters enterprise structure that the Trustee has sued in avoidance. The Plaintiff, as trustee, was charged with the remediation of a failed, massive Ponzi scheme, perpetrated for over a decade by Thomas J. Petters through Debtor Petters Company, Inc. ("PCI") and related Debtor-entities as instrumentalities. He undertook to recover monies that had been paid out to past, satisfied investors into the scheme, by suing them for avoidance of the payments under the theory that they had received transfers fraudulent on the Debtors' other creditors. The Trustee used an analysis that other courts had developed to respond to similar remediation efforts for failed Ponzi schemes, relying on their local enactments of the Uniform Fraudulent Transfer Act. A full-text copy of the Memorandum dated May 31, 2016 is available at https://is.gd/t0vE8l from Leagle.com. The adversary case is DOUGLAS A. KELLEY, in his capacity as the court-appointed Chapter 11 Trustee of Debtors Petters Company, Inc.; PC Funding, LLC; and SPF Funding, LLC, Plaintiff, v. OPPORTUNITY FINANCE, LLC; OPPORTUNITY FINANCE SECURITIZATION, LLC; OPPORTUNITY FINANCE SECURITIZATION II, LLC; OPPORTUNITY FINANCE SECURITIZATION III, LLC; INTERNATIONAL INVESTMENT OPPORTUNITIES, LLC; SABES FAMILY FOUNDATION; SABES MINNESOTA LIMITED PARTNERSHIP; ROBERT W. SABES; JANET F. SABES; JON R. SABES; STEVEN SABES; DEUTSCHE ZENTRALGENOSSENSCHAFTBANK AG; WEST LANDESBANK AG; WESTLB AG NEW YORK BRANCH; and THE MINNEAPOLIS FOUNDATION, Defendants, Court File No. 08-45257, Court File Nos. 08-45258 (GFK), 08-45326 (GFK), 08-45327 (GFK), 08-45328 (GFK), 08-45329 (GFK), 08-45330 (GFK), 08-45331 (GFK), 08-45371 (GFK), 08-45392 (GFK), Adv. 10-4301 (Bankr. D. Minn.). The bankruptcy case is In re: PETTERS COMPANY, INC., ET AL, Chapter 11, Debtors. (includes: Petters Group Worldwide, LLC; PC Funding, LLC; Thousand Lakes, LLC; SPF Funding, LLC; PL Ltd., Inc. Edge One LLC; MGC Finance, Inc.; PAC Funding, LLC; Palm Beach Finance Holdings, Inc.), Case No. 08-45257 (Bankr. D. Minn.). Douglas A. Kelley, Trustee, Plaintiff, is represented by Adam C Ballinger, Esq. -- aballinger@lindquist.com -- Lindquist & Vennum LLP, Kirstin D. Kanski, Esq. -- kkanski@lindquist.com -- Lindquist Vennum PLLP, Mark D Larsen, Esq. -- mlarsen@lindquist.com -- Lindquist & Vennum PLLP, James A. Lodoen, Esq. -- jlodoen@lindquist.com -- Lindquist & Vennum LLP, Jeffrey D. Smith, Esq. -- jsmith@lindquist.com -- Lindquist & Vennum LLP, Daryle Uphoff, Esq. -- duphoff@lindquist.com -- Lindquist & Vennum. Opportunity Finance, LLC, Defendant, is represented by Jefferey D Bailey, Esq. --jbailey@wc.com -- Williams & Connolly LLP, Kari Berman, Esq. -- kberman@briggs.com -- Briggs and Morgan P A, Benjamin Gurstelle, Esq. -- bgurstelle@briggs.com -- Briggs and Morgan P A, Max C Heerman, Esq. -- mheerman@briggs.com -- Briggs and Morgan, P.A., Jonathan M Landy, Esq. -- jlandy@wc.com -- Williams & Connolly LLP, Christopher J Mandernach, Esq. -- cmandernach@wc.com -- Williams & Connolly LLP, John R. McDonald, Esq. -- bgurstelle@briggs.com -- Briggs and Morgan, P.A., Joseph G Petrosinelli, Esq. --jpetrosinelli@wc.com -- Williams & Connolly LLP. The Minneapolis Foundation, Defendant, is represented by David L. Mitchell, Esq. -- DMitchell@RobinsKaplan.com -- Robins Kaplan LLP. West Landesbank AG, Defendant, is represented by Eric R. Sherman, Esq. -- sherman.eric@dorsey.com -- Dorsey & Whitney LLP. Deutsche Zentralgenossenschaftbank AG, Defendant, is represented by Michael Rosow, Esq. -- mrosow@winthrop.com -- Winthrop & Weinstine. WestLB AG, New York Branch, Defendant, is represented by Monica L. Clark, Esq. -- clark.monica@dorsey.com -- Dorsey & Whitney LLP, Elizabeth A. Hulsebos, Esq. -- hulsebos.elizabeth@dorsey.com -- Dorsey & Whitney LLP, Thomas O. Kelly, III, Esq. -- kelly.thomas@dorsey.com -- Dorsey & Whitney LLP, Patrick J McLaughlin, mclaughlin.patrick@dorsey.com -- Dorsey & Whitney LLP. About Petters Company Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection(Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct.6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. The Official Committee of Unsecured Creditors is represented by David E. Runck, Esq., Lorie A. Klein, Esq., at Fafinski Mark & Johnson, P.A. Trustee Douglas A. Kelley is represented by James A. Lodoen, Esq., Mark D. Larsen, Esq., Kirstin D. Kanski, Esq., Adam C. Ballinger, Esq., at Lindquist & Vennum LLP. POSTROCK ENERGY: Judge Denies Committee's Bid to Hire Lowenstein ---------------------------------------------------------------- The official committee of unsecured creditors of PostRock Energy Corp. and its affiliates has failed to win court approval to hire Lowenstein Sandler LLP. Judge Sarah Hall of the U.S. Bankruptcy Court for the Western District of Oklahoma on June 2 denied the committee's bid to hire the firm as its legal counsel. The move had earlier drawn opposition from Citibank, N.A., a secured lender of PostRock Energy. In a court filing, the bank called the proposed employment of Lowenstein as "duplicative," pointing out that the committee was also seeking court approval to hire Hall Estill Hardwick Gable Golden & Nelson, P.C. as its legal counsel. About PostRock Energy Corporation Headquartered in Oklahoma City, Oklahoma, PostRock Energy Corporation, PostRock Energy Services Corporation, PostRock MidContinent Production LLC, PostRock Eastern Production, LLC, PostRock Holdco, LLC, and STP Newco, Inc. are engaged in the acquisition, exploration, development, production and gathering of crude oil and natural gas. The Debtors' primary production activity is focused in the Cherokee Basin, a 15-county region in southeastern Kansas and northeastern Oklahoma. The Debtors have approximately 129 employees. PostRock Energy, et al., filed Chapter 11 bankruptcy petitions (Bankr. W.D. Okla. Lead Case No. 16-11230) on April 1, 2016. Clark Edwards signed the petitions as president. The Debtors estimated assets in the range of $10 million to $50 million and debt of up to $100 million. Crowe & Dunlevy, P.C. serves as the Debtors' counsel. Judge Sarah A. Hall is assigned to the cases. Stephen J. Moriarty has been appointed as Chapter 11 Trustee of PostRock Energy. The Official Committee of Unsecured Creditors of PostRock Energy Corp. has retained Lowenstein Sandler LLP as counsel, and Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C. as special and local counsel. PROGRESSIVE CROP: Proposes to Pay 100% to Unsecured Creditors ------------------------------------------------------------- Progressive Crop Service, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Ohio a first amended disclosure statement explaining its plan of reorganization. The Debtor proposes to pay class 4 claims of unsecured creditors 100% of the amount owed without interest, based upon a pro-rata disbursement of funds totaling $1,000 per month for year one, $1,500 per month for year two, and $3,000 for every month thereafter. A full-text copy of the First Amended Disclosure Statement is available at http://bankrupt.com/misc/ohnb-15-61783-55.pdf Progressive Crop Service, LLC, dba PCS Paving, dba PCS Lawncare (Bankr. N.D. Ohio, Case No. 15-61783) filed a Chapter 11 Petition on August 25, 2015. The case is assigned to Judge Russ Kendig. The Debtor's Counsel is Edwin H. Breyfogle, Esq. The petition was signed by Craig L. Franks, managing member. The Debtor's assets total $1.04 million and liabilities total $3.60 million. A list of the Debtor's 18 largest unsecured creditors is available for free at http://bankrupt.com/misc/ohnb15-61783.pdf PROSPECT MEDICAL: S&P Affirms B CCR & Rates New $650MM Term Loan B ------------------------------------------------------------------ S&P Global Ratings affirmed its 'B' corporate credit rating on Los Angeles-based health care services provider Prospect Medical Holdings Inc. The rating outlook is stable. At the same time, S&P assigned its 'B' issue-level rating and '3' recovery rating to Prospect's proposed $650 million term loan, indicating S&P's expectation for meaningful (50%-70%, at the low end of the range) recovery in the event of payment default. S&P intends to withdraw its rating on the company's existing senior secured notes when the transaction closes and the debt is repaid. "The affirmation reflects our view that the modest increase in debt leverage as a result of the company's refinancing is mostly offset by improving business diversity, and our view that cash flow will improve as a result of recent acquisitions and the lower cost of debt under the new capital structure," said S&P Global Ratings credit analyst Shannan Murphy. It also reflects S&P's expectation that Prospect will remain acquisitive, and that cash flows, while improving, will remain somewhat volatile because of the company's heavy exposure to hospital subsidy programs, especially in California. Pro forma for the pending acquisitions, Prospect operates a network of 21 hospitals and related primary-care clinics in six states. The company also operates a Medical Group segment that manages the provision of physician services on behalf of health maintenance organization (HMO) customers. While the medical group segment provides some business diversity, this business also has significant exposure to government reimbursement pressures in the Medicare Advantage program. S&P's stable outlook reflects the company's improving prospects for cash flow generation, and S&P's base-case view that Prospect will be able to raise margins at acquired hospitals, resulting in about $50 million to $60 million in discretionary cash flow in 2017. However, these expectations are tempered by the company's continued high exposure to government reimbursement (especially the California Provider Fee Program), and S&P's belief that there could still be some volatility around the timing of cash flows. S&P could lower its rating if Prospect's financials deteriorate to the point where leverage rises above 5x, or if the company stops generating positive free cash flow. S&P believes this could occur if margins decline about 400 basis points below its expectations. Sharp cuts to disproportionate share payment programs or Medicare reimbursement without offsetting factors could, in S&P's view, cause this to occur. S&P could raise its rating if the company's acquisition strategy results in better business diversity over time. Specifically, S&P could consider a higher rating if the company's exposure to California declines such that the company generates more than half of EBITDA from other states, as S&P would likely view better geographic diversity (and less exposure to California's provider fee programs) as consistent with a stronger business risk and raise the rating accordingly. PRWIRELESS INC: S&P Lowers CCR to 'CCC-', Outlook Negative ---------------------------------------------------------- S&P Global Ratings said it lowered its corporate rating on Guaynabo, P.R.-based PRWireless Inc. to 'CCC-' from CCC+'. The outlook is negative. At the same time, S&P lowered its issue-level ratings to 'CCC-' from 'CCC+' on PRWireless's senior secured $10 million revolver due 2019 and $180 million term loan due 2020. The '3' recovery rating is unchanged and indicates S&P's expectation of meaningful (50% to 70%; lower end of range) recovery for lenders in the event of a payment default. "The downgrade reflects our view that PRWireless may breach its total leverage covenant by the second quarter of 2016 unless it is able to obtain an amendment from its bank facility creditors," said S&P Global Ratings credit analyst Latisha Kimber. S&P believes this increases the likelihood of the company's revolver being inaccessible, which also pressures liquidity. S&P's negative outlook reflects the likelihood of a covenant violation in the second quarter of 2016. The outlook also reflects the challenge the company faces to improve operations in a maturing and competitive industry environment, likely leading to the need for additional liquidity to cover fixed charges. R&S ST. ROSE LENDERS: Must Finalize Plan Disclosures by June 10 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada approved the Sixth Amended Disclosure Statement describing R&S St. Rose Lenders, LLC's Chapter 11 Plan of Liquidation. The Court directed the Debtor to finalize its disclosure statement in accordance with the Court's order and file it with the court no later than June 10, 2016. A scheduling conference will be held on June 15, 2016, at 9:30 a.m., to set a hearing date on plan confirmation and other matters, as well as appropriate deadlines in the case. The Court says the objections by Branch Banking and Trust Company and Commonwealth Land Title Insurance Company are overruled with respect to the Disclosure Statement, without prejudice to their assertion at plan confirmation. BB&T and are the most active creditors in both Chapter 11 proceedings. Since 2008, Lenders, St. Rose, BB&T (and its predecessor in interest Colonial Bank), Commonwealth, and others, have actively litigated whether Lenders or BB&T has a priority lien against R&S St. Rose, LLC's property in Henderson, Nevada, to secure payment of their respective claims. Rose Lenders' primary asset consists of its claim in the scheduled amount of $12 million against R&S St. Rose, LLC. St. Rose's primary asset consists of a fee simple interest in approximately 38 acres of raw land located in Henderson, Nevada. On August 2, 2013, St. Rose filed a proposed Chapter 11 liquidating plan. On November 8, 2013, in the St. Rose Chapter 11 proceeding, an order was entered on confirmation of the St. Rose Plan. On November 21, an order was entered in the St. Rose proceeding approving a sale of the Henderson Property in accordance with the confirmed St. Rose Plan. Under the sale order, the Property was sold for the purchase price of $13,500,000, with the liens in favor of Rose Lenders and Colonial Bank attaching to the proceeds of sale. BB&T and Commonwealth appealed confirmation of the St. Rose Plan to the District Court. On March 27, 2014, the District Court vacated an earlier order denying substantive consolidation of Rose Lenders' and St. Rose's cases, and remanded to the bankruptcy court for further proceedings. On August 7, 2014, the District Court affirmed the bankruptcy court order confirming the St. Rose Plan. BB&T and Commonwealth appealed that District Court order to the Ninth Circuit Court of Appeals. On October 27, 2014, on remand, the bankruptcy court commenced an evidentiary hearing on the BB&T and Commonwealth request for substantive consolidation. On April 24, 2015, proposed findings of fact and conclusions of law were submitted by all parties. On November 5, 2015, the Ninth Circuit affirmed confirmation of the St. Rose Plan. On March 15, 2016, the bankruptcy court entered a memorandum decision and a separate order denying substantive consolidation of the Lenders and St. Rose estates. BB&T and Commonwealth appealed that order to the District Court. On April 18, 2016, Lenders filed the Disclosure Statement along with its proposed Third Amended Chapter 11 Plan. About R & S St. Rose Lenders Las Vegas, Nevada-based R & S St. Rose Lenders, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-14973) on April 4, 2011. Rose Lenders disclosed $12,041,574 in assets and $24,502,319 in liabilities in its schedules, as amended. Its primary asset consists of its claim in the scheduled amount of $12 million against R&S St. Rose, LLC. Affiliate R & S St. Rose, LLC, filed a separate Chapter 11 petition (Bankr. D. Nev. Case No. 11-14974) on April 4, 2011. According to its schedules, it disclosed $16,821,500 in total assets and $48,293,866 in total debts. Its primary asset consists of a fee simple interest in approximately 38 acres of raw land located in Henderson, Nevada. R & S ST Rose Lenders' bankruptcy case is presently assigned to Judge Mike K. Nakagawa. R&S St. Rose Lenders has tapped Nedda Ghandi, Esq., of Ghandi Law Offices as bankruptcy counsel. The Debtor previously had Larson & Larson as counsel but the application was opposed by the U.S. Trustee, prompting the withdrawal. Commonwealth Land Title Insurance Company is represented by: Scott E. Gizer, Esq. EARLY SULLIVAN WRIGHT GIZER & MCRAE LLP 601 South Seventh Street 2nd Floor Las Vegas, NV 89101 Telephone: (702)331-7593 Facsimile: (702)331-1652 E-mail: sgizer@earlysullivan.com - and - Mary C.G. Kaufman, Esq. EARLY SULLIVAN WRIGHT GIZER & MCRAE LLP 6420 Wilshire Blvd., 17th Floor Los Angeles, CA 90048 Telephone: (323)301-4660 Facsimile: (323)301-4676 E-mail: mkaufman@earlysullivan.com Branch Banking and Trust Company is represented by: J. Stephen Peek, Esq. Joseph G. Went, Esq. HOLLAND & HART LLP 9555 Hillwood Drive, 2nd Floor Las Vegas, NV 89134 Telephone: (702)222-2544 Facsimile: (702)669-4650 E-mail: speek@hollandhart.com jgwent@hollandhart.com RADNET MANAGEMENT: Moody's Assigns Ba3 Rating on $485MM Loan ------------------------------------------------------------ Moody's Investors Service assigned a Ba3 rating to RadNet Management, Inc.'s proposed $485 million first lien term loan and $100 million revolving credit facility. Concurrently, Moody's affirmed the company's B2 Corporate Family Rating, B2-PD Probability of Default Rating, Caa1 second lien term loan rating and the SGL-2 Speculative Grade Liquidity rating. Proceeds from the proposed $485 million first lien term loan due 2023 are expected to be used to refinance the existing $445 million first lien term loan due 2018, repay borrowings under the existing revolver which expires in 2017 and reduce the second lien term loan due 2021 by about $14 million. The proposed revolver will expire in 2021, is pari passu with the term loan and is expected to be undrawn at the close of the transaction. "The company is extending its maturity profile, with no material increase in debt or interest expense, which is viewed as credit positive," stated Moody's analyst Todd Robinson. "Moody's believes that the company remains well positioned at the B2 Corporate Family Rating," continued Todd Robinson. These ratings were assigned: $100 Million Senior Secured Revolving Credit Facility due 2021, at Ba3 (LGD 3) $485 Million Senior Secured First Lien Term Loan due 2023, at Ba3 (LGD 3) These ratings were affirmed: Corporate Family Rating, at B2 Probability of Default Rating, at B2-PD $180 Million Senior Secured Second Lien Term Loan due 2021, at Caa1 (LGD 5) Speculative Grade Liquidity Rating, at SGL-2 These ratings will be withdrawn when repaid: $101 Million Senior Secured Revolving Credit Facility due 2017, at Ba3 (LGD 3) $494 Million Senior Secured First Lien Term Loan due 2018, at Ba3 (LGD 3) The rating outlook is stable. RATINGS RATIONALE The B2 Corporate Family Rating reflects RadNet's high leverage, modest size and significant geographic concentration with the majority of its facilities in California, New York and Maryland. Furthermore, the company operates in a highly competitive industry, and Moody's expects that reimbursement rates will remain pressured as the government is focused on reducing healthcare costs. However, the rating is supported by RadNet's strong position in its primary markets with its cluster strategy and multi-modality sites providing a competitive advantage. The company also derives the majority of its revenue from the stable and higher margin commercial insurers, whereas most companies in the healthcare sector have higher exposure to Medicare and Medicaid. The stable outlook reflects Moody's belief that RadNet's 2015 investments (three acquisitions and infrastructure expansion) leave the company well positioned to achieve solid earnings growth in 2016 despite the challenging operating environment. However, Moody's also believes it is likely that the company will return to debt funded acquisitions in 2017, which will limit credit metric improvement. The ratings could be downgraded if debt to EBITDA increases to above 6.0 times and if EBITA to interest expense falls below 1.0 times. In addition, if the company's liquidity position deteriorates or if adverse developments in the reimbursement environment are expected to materially impact RadNet's financial position the ratings could be downgraded. The ratings could be upgraded if free cash flow to debt is sustained above 5% and if debt to EBITDA falls below 4.0 times for a sustained period. Furthermore, a favorable reimbursement environment with increased visibility would be necessary in order for the ratings to be upgraded. The principal methodology used in these ratings was Business and Consumer Service Industry published in December 2014. RadNet, headquartered in Los Angeles, California, provides diagnostic imaging services through a network of imaging facilities located in California, Maryland, Florida, Delaware, New Jersey, Rhode Island and New York. Revenue for the twelve months ended March 31, 2016, was approximately $884 million. RADNET MANAGEMENT: S&P Rates Proposed $117.5MM Facility 'B' ----------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '3' recovery rating to Los Angeles-based diagnostic imaging servicer RadNet Management Inc.'s proposed $117.5 million first-lien revolving credit facility and $485 million first-lien term loan. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%, at the higher end of the range) recovery in the event of payment default. S&P's 'CCC+' issue-level rating and '6' recovery rating on the company's second-lien term loan are unchanged. The company plans to use the proceeds from the new term loan to pay down the current outstanding revolver borrowings, refinance its existing first-lien term loan, and partially pay down the its second-lien term loan. Post-refinancing, S&P continues to project leverage to be in the 4x to 5x range through 2017, with funds from operations to debt in the midteens. However, S&P expects to see some temporary deviations related to the timing of acquisitions. While S&P expects the company will generate about $15 million in discretionary cash flow after debt amortization in 2016, S&P expects RadNet to remain acquisitive, and expect that the company will use internally generated cash flow and some debt capacity for acquisitions. S&P's corporate credit rating on RadNet is 'B', with a stable rating outlook. S&P's assessment of RadNet Management's business risk profile as weak continues to reflect its narrow focus in the diagnostic imaging industry, despite its leading market position, and high degree of exposure to reimbursement risk. RATINGS LIST RadNet Management Inc. Corporate Credit Rating B/Stable/-- New Ratings RadNet Management Inc. Senior Secured First Lien $117.5 Mil. Revolving Credit Fac. Due 2021 B Recovery Rating 3H $485 Mil. Term Loan Due 2023 B Recovery Rating 3H RED HILLS INDUSTRIAL: Seeks to Hire A.J. Willner as Auctioneer -------------------------------------------------------------- Red Hills Industrial Park Inc. seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to hire A.J. Willner Auctions, LLC as auctioneer. The Debtor tapped the firm in connection with the sale of its sole asset, which is a vacant land located in Union Township, New Jersey. If the asset is sold without a broker, A.J. Willner will receive a commission, which is 6% of the gross sale price of the asset. If sold with a broker, the firm will receive 8% of the gross sale price. A.J. Willner did not request for reimbursement of expenses. The firm will cover all costs of marketing and labor, according to court filings. Michael Sklar, a member of A.J. Willner, disclosed in a court filing that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. A.J. Willner can be reached through: Michael Sklar A.J. Willner Auctions Commercial Insolvency Auctioneers www.ajwillnerauctions.com Phone: 908.789.9999 Fax: 908.928.9788 P.O. Box 1012 Springfield, NJ 07081 The Debtor can be reached through its counsel: Andre L. Kydala, Esq. Law Firm of Andre L. Kydala P.O. Box 5537 54 Old Highway 22 Clinton, NJ 08809 Tel: (908) 735-2616 Fax: (908) 735-0765 Email: kydalalaw@aim.com About Red Hills Industrial Red Hills Industrial Park Inc. sought protection under Chapter 11 of the Bankruptcy Code in the District of New Jersey (Trenton) (Case No. 16-14866) on March 16, 2016. The petition was signed by Walter Andresen, president. The Debtor is represented by Andre L. Kydala, Esq., at Law Firm of Andre L. Kydala. The case is assigned to Judge Michael B. Kaplan. The Debtor disclosed total assets of $1.5 million and total debts of $1.04 million. REDPRAIRIE CORP: Bank Debt Trades at 5% Off ------------------------------------------- Participations in a syndicated loan under which RedPrairie Corp is a borrower traded in the secondary market at 94.95 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of 0.15 percentage points from the previous week. RedPrairie Corp pays 500 basis points above LIBOR to borrow under the $1.44 billion facility. The bank loan matures on Dec. 21, 2018 and carries Moody's B3 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. REX ENERGY: S&P Retains 'SD' Corporate Credit Rating ---------------------------------------------------- S&P Global Ratings said that its corporate credit rating on Rex Energy Corp. remains 'SD'. The 'SD' rating reflects S&P's assessment that there is the potential for additional exchanges of the company's remaining unsecured and secured notes. In addition, the issue-level rating on the company's senior unsecured notes remains 'D' but S&P revised the recovery ratings on the unsecured notes to '6', indicating S&P's expectation of negligible (0% to 10%) recovery in the event of a default, from '5'. The revised recovery rating reflects the March 31, 2016, exchange of the company's 8.875% and 6.25% senior unsecured notes for a new issue of senior secured second-lien notes due 2020 (not rated) and shares of common equity. Following the rating action, S&P withdrew the corporate credit and issue-level ratings at the company's request. ROCKDALE MANOR: Case Summary & 7 Unsecured Creditors ---------------------------------------------------- Debtor: Rockdale Manor, LLC 2495 Insdale Trace Acworth, GA 28025 Case No.: 16-59888 Nature of Business: Single Asset Real Estate Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Evan M. Altman, Esq. EVAN M. ALTMAN, ESQ. Building 2 8325 Dunwoody Place Atlanta, GA 30350-3307 Tel: (770) 394-6466 Fax: (678) 405-1903 E-mail: evan.altman@laslawgroup.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kenneth Huffman, managing member. A list of the Debtor's seven largest unsecured creditors is available for free at http://bankrupt.com/misc/ganb16-59888.pdf SALADO SMILES: Obtains Access to East West Bank's Cash Collateral ----------------------------------------------------------------- The Honorably Tony M. Davis placed his stamp of approval on an Order this week grating Salado Smiles, P.C., access to cash collateral pledged to repay approximately $357,000 owed to East West Bank. The collateral consists of approximately $70,000 of accounts receivable, equipment valued at $115,000, and about $244,000 of equity in real estate. The Debtor will grant East West Bank replacement liens and remit $5,076 to the bank each month. East West Bank is represented by: Karen E. Murray, Esq. Craddock Massey LLP 1400 Post Oak Blvd., Suite 640 Houston, TX 77002 Telephone: 713-960-6400 E-mail: kmurray@craddockmassey.com Salado Smiles, P.C., fdba Sonterra Smiles, operates a dental practice in Salado, Tex. The company filed a chapter 11 petition (Bankr. W.D. Tex. Case No. 16-10413) on Apr. 5, 2016, and is represented by Michael V. Baumer, Esq., in Austin, Tex. At the time of the filing, the Debtor disclosed total assets of $177,203 and debts totalling $1.24 million. SEAFOOD ACADEMY: Taps Davis Law Office as Legal Counsel ------------------------------------------------------- Seafood Academy, LLC seeks approval from the U.S. Bankruptcy Court for the District of South Carolina to hire Davis Law Office, LLC as its legal counsel. The legal services to be provided by the firm include complying with procedural matters, preparing a Chapter 1l plan, and dealing generally with creditors. Jonathan Davis, Esq., at Davis Law Office, will be paid $200 per hour for his services. In a court filing, Mr. Davis disclosed that he and his firm are "disinterested persons" as defined in section 101(14) of the Bankruptcy Code. Davis Law Office can be reached through: Jonathan L. Davis, Esq. Davis Law Office, LLC 4511 North Main Street Columbia, SC 29203 Email: jdavisesq@outlook.com About Seafood Academy Seafood Academy, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.S.C. Case No. 16-02541) on May 23, 2016. SEVEN GENERATIONS: Moody's Raises CFR to Ba3, Outlook Positive -------------------------------------------------------------- Moody's Investors Service upgraded Seven Generations Energy Ltd.'s (7G) Corporate Family Rating to Ba3 from B1, Probability of Default Rating to Ba3-PD from B1-PD, and senior unsecured notes rating to B1 from B2. Speculative Grade Liquidity rating was also raised to SGL-1 from SGL-2 and the rating outlook remains positive. "The upgrade to Ba3 reflects Seven Generations' strong execution on its development program, production growth and rising cash flows despite low commodity prices leading to strong credit metrics," commented Paresh Chari, Moody's AVP-Analyst. Upgrades: Issuer: Seven Generations Energy Ltd. Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Corporate Family Rating, Upgraded to Ba3 from B1 Senior Unsecured Regular Bond/Debentures, Upgraded to B1 (LGD4) from B2 (LGD4) Outlook Actions: Issuer: Seven Generations Energy Ltd. Outlook, Remains Positive RATINGS RATIONALE 7G's Ba3 Corporate Family Rating primarily reflects low leverage (2017 debt/EBITDA around 2x; retained cash flow/debt around 50%), strong coverage (2017 EBITDA/interest near 8x) and very good liquidity (SGL-1). 7G's production is expected to be about 125,000 boe/d in 2017. 7G is concentrated in a single field and a single formation, with high decline rates (about 35%) that require a significant capex program to maintain production. A large growth capex program is needed to increase production and develop its large proved undeveloped reserve base. However, Moody's believes 7G has good visibility around the development of their reserves, which reduces some its execution risk. The SGL-1 Speculative Grade Liquidity Rating reflects 7G's very good liquidity. At March 31, 2016, 7G had C$571 million of cash and C$813 million of availability under its C$850 million borrowing base revolving credit facility (May 2019 maturity), after covering C$37 million in letters of credit. Moody's expects negative free cash flow of about C$300 million for the 15 month period from March 31, 2016 to June 30, 2017, which will be funded with cash. There are no debt maturities until 2020. Alternate liquidity is limited given that substantially all of the company's assets are pledged. In accordance with Moody's Loss Given Default (LGD) methodology, the US$700 million and US$425 million senior unsecured notes are rated B1, one notch below the Ba3 CFR because of the existence of the priority ranking C$850 million secured revolver. The positive outlook reflects Moody's view that 7G's leverage and interest coverage will improve from current levels and that the company will have very good liquidity to fund its growth capital program over the next couple of years. The rating could be upgraded if 7G maintains production above 100,000 boe/d for a sustained period while maintaining retained cash flow to debt above 40%. The rating could be downgraded if 7G's production or reserves decrease materially or if debt funded negative free cash flow leads to retained cash flow to debt falling towards 20%. Seven Generations Energy Ltd. is a Calgary, Alberta-based exploration and production company with approximately 70 million and 384 million barrels of equivalent oil (boe) of net proved developed and total proved reserves, respectively, and average daily production of 100,000 boe/d (net of royalties). The principal methodology used in these ratings was Global Independent Exploration and Production Industry published in December 2011. SEVENTY SEVEN ENERGY: Files Chapter 11 Petition & Prepack Plan -------------------------------------------------------------- Seventy Seven Energy (a/k/a Chesapeake Oilfield Operating) and 10 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware. The lead case is Seventy Seven Finance, Case No. 16-11409. The Debtors tapped Robert J. Dehney of Morris, Nichols, Arsht & Tunnell, as counsel. The Company also filed together with the petition a Joint Prepackaged Chapter 11 Plan of Reorganization and related Disclosure Statement. The Plan provides for a substantial deleveraging transaction pursuant to which approximately $1.1 billion of the Company's outstanding debt will be converted to equity. BankruptcyData.com reported that the Chapter 11 filing follows completion of the solicitation process of (i) lenders representing the Company's incremental term supplement (Tranche A) loan, (ii) lenders representing the Company's $400 million term loan credit agreement, (iii) noteholders of the Company's 6.625% Senior Unsecured Notes due 2019 and (iv) noteholders of the 6.50% Senior Unsecured Notes due 2022. The solicitation process resulted in overwhelming approval of the Company's Plan, a key component of which is that all trade creditors, suppliers and contractors will be paid in the ordinary course of business. According to the Company, all of its commercial and operational contracts will remain in effect in accordance with their terms preserving the rights of all parties, and customer relationships will continue uninterrupted. About Seventy Seven Energy Inc. Headquartered in Oklahoma City, Seventy Seven Energy Inc. (SSE) -- http://www.77nrg.com-- provides a wide range of wellsite services and equipment to U.S. land-based exploration and production customers. SSE's services include drilling, hydraulic fracturing and oilfield rentals and its operations are geographically diversified across many of the most active oil and natural gas plays in the onshore U.S., including the Anadarko and Permian basins and the Eagle Ford, Haynesville, Marcellus, Niobrara and Utica shales. The Troubled Company Reporter related on May 23, 2016, that S&P Global Ratings lowered its corporate credit rating on SSE to D from CCC following SSE's announcement that it elected not to make the May 15, 2016, interest payment on the 6.625% senior unsecured notes due 2019. SHEEHAN PIPE LINE: Panel Hires Foley & Lardner as Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors of Sheehan Pipe Line Construction Company seeks authorization from the U.S. Bankruptcy Court for the Northern District of Oklahoma to retain Foley & Lardner LLP as counsel for the Committee, effective May 10, 2016. The professional services that Foley & Lardner will render to the Committee include, but shall not be limited to: (a) provision of legal advice with respect to the Committee's rights, powers and duties in this case; (b) preparation on behalf of the Committee of all necessary applications, answers, orders, reports and other legal papers; (c) representation of the Committee in any and all matters involving contests with the Debtor, alleged secured creditors and other third parties; (d) negotiation of proposed asset sales and chapter 11 plans; (e) assistance with analyzing the claims of the Debtor's creditors and the Debtor's capital structure and in negotiating with holders of claims and equity interests; (f) investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor's and of the operation of the Debtor's business; (g) advising the general creditor body regarding significant matters in the Debtor's case; (h) review and analysis of all applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety; and (i) performance of all other legal services for the Committee which may be necessary and proper in these proceedings. Foley & Lardner will be paid at these hourly rates: Geoffrey S. Goodman, Partner $645 Joanne Lee, Partner $555 Matthew J. Stockl, Associate $325 Foley & Lardner will also be reimbursed for reasonable out-of-pocket expenses incurred. Geoffrey S. Goodman, partner of Foley & Lardner, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Executive Office for United States Trustees adopted new Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses filed under 11 U.S.C. section 330 by Attorneys in Larger chapter 11 Cases (the "Appendix B Guidelines"). Among other things, the Appendix B Guidelines ask attorneys in larger chapter 11 cases to provide additional documentation and make significant new disclosures in connection with their retention under section 327 and compensation under section 330 of the Bankruptcy Code. The Committee and Foley & Lardner intend to make a reasonable effort to comply with the U.S. Trustee's requests for information and additional disclosures as set forth in the Appendix B Guidelines both in connection with this application and the interim and final fee applications to be filed by Foley & Lardner in the course of its engagement. Foley & Lardner provided the following additional information set forth in D.1. of the Appendix B Guidelines: -- In connection with this engagement, Foley & Lardner has agreed to discount its standard hourly rates by 10%. Foley & Lardner has also agreed not to bill for non-working travel time. -- Foley & Lardner has not previously represented the Committee or any of its members in this matter in the 12 months prepetition. -- The Committee asked questions and determined that Foley & Lardner's plans to staff the matter and work with local counsel when it were engaged. In addition, the budget for this matter is set forth in cash collateral budgets, subject to the exigencies of the case. Foley & Lardner can be reached at: Geoffrey S. Goodman, Esq. Joanne Lee, Esq. Matthew J. Stockl, Esq. FOLEY & LARDNER LLP 321 North Clark Street, Ste 2800 Chicago, IL 60610 Tel: (312) 832-4500 Fax: (312) 832-4700 E-mail: ggoodman@foley.com jlee@foley.com mstockl@foley.com About Sheehan Pipe Line Sheehan Pipe Line Construction Company, a contractor that constructs pipelines in various states across the country, filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Case No. 16-10678) on April 15, 2016, listing total assets of $90.2 million and total debt of $68.4 million. The petition was signed by Robert A. Riess, Sr., as president and CEO. McDonald, McCann & Metcalf & Carwile, LLP, serves as counsel to the Debtor. The case is pending before Judge Terrence L. Michael. SHEEHAN PIPE LINE: Panel Taps Frederic Dorwart as Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors of Sheehan Pipe Line Construction Company seeks authorization from the U.S. Bankruptcy Court for the Northern District of Oklahoma to retain Frederic Dorwart, Lawyers, as counsel for the Committee, effective May 10, 2016. The Committee requires Frederic Dorwart to: (a) provide legal advice with respect to the Committee's rights, powers and duties in this case; (b) prepare on behalf of the Committee of all necessary applications, answers, orders, reports and other legal papers; (c) represent the Committee in any and all matters involving contests with the Debtor, alleged secured creditors and other third parties; (d) negotiate proposed asset sales and Chapter 11 plans; (e) assist with analyzing the claims of the Debtor's creditors and the Debtor's capital structure and in negotiating with holders of claims and equity interests; (f) investigate the acts, conduct, assets, liabilities and financial condition of the Debtor's and of the operation of the Debtor's business; (g) assist and counsel related to the Committee's communications to the general creditor body regarding significant matters in the Debtor's case; (h) review and analyze all applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety; and (i) perform all other legal services for the Committee which may be necessary and proper in these proceedings. Frederic Dorwart will be paid at these hourly rate: Samuel S. Ory $350 Frederic Dorwart will also be reimbursed for reasonable out-of-pocket expenses incurred. Samuel S. Ory, counsel of Frederic Dorwart, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Committee and Frederic Dorwart intend to make a reasonable effort to comply with the U.S. Trustee's requests for information and additional disclosures as set forth in the Appendix B Guidelines both in connection with this application and the interim and final fee applications to be filed by Foley & Lardner in the course of its engagement. The Executive Office for United States Trustees adopted new Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses filed under 11 U.S.C. section 330 by Attorneys in Larger chapter 11 Cases (the "Appendix B Guidelines"). Among other things, the Appendix B Guidelines ask attorneys in larger chapter 11 cases to provide additional documentation and make significant new disclosures in connection with their retention under section 327 and compensation under section 330 of the Bankruptcy Code. Frederic Dorwart provided the following additional information set forth in D.1. of the Appendix B Guidelines: -- Frederic Dorwart has not previously represented its client in the 12 months prepetition. -- The Committee asked questions and determined Frederic Dorwart's plans to staff the matter and work with local counsel when it is engaged. In addition, the budget for this matter is set forth in cash collateral budgets, subject to the exigencies of the case. Frederic Dorwart can be reached at: Samuel S. Ory, Esq. FREDERIC DORWART, LAWYERS 124 East Fourth Street Tulsa, OK 74103 Tel: (918) 583-9922 Fax: (918) 583-8251 E-mail: sory@fdlaw.com About Sheehan Pipe Line Sheehan Pipe Line Construction Company, a contractor that constructs pipelines in various states across the country, filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Case No. 16-10678) on April 15, 2016, listing total assets of $90.2 million and total debt of $68.4 million. The petition was signed by Robert A. Riess, Sr., as president and CEO. McDonald, McCann & Metcalf & Carwile, LLP, serves as counsel to the Debtor. The case is pending before Judge Terrence L. Michael. SINK & COMPANY: Unsecured Claimants to Recoup 15% in 5 Yrs ---------------------------------------------------------- Bankruptcy Judge Lena Mansori James entered an order conditionally approving the Disclosure Statement for the Amended Plan of Reorganization as of June 1, 2016, for Sink & Company, LLC. Objections to the approval of the disclosure statement are due June 27. Confirmation objections are also due that day. A hearing to confirm the Plan is set for July 6 at 2:00 p.m. in Bankruptcy Court in Winston-Salem, North Carolina. Under the Plan, general unsecured creditors will receive a distribution of 15% of their allowed claims, to be distributed over a maximum of 60 months. The Plan estimates that allowed general unsecured claims total $517,420. The Debtor has reached an agreement with Moo-Chic Farm, Inc., concerning roughly $250,000 of net transfers. The Plan contemplates Moo-Chic refunded the money to the Debtor over the course of the Plan in the amount of $5,000 per month -- to be increased to $6,000 per month when a third truck is added in September -- for 60 months. The Debtor will use the sums to fund the Plan. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/ncmb15-50792-00087.pdf Sink & Company, LLC is in the business of automobile lubrication and oil changes. Sink & Company, LLC filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 15-50792) on August 4, 2015, and is represented by Charles (Chuck) Marshall Ivey, IV, Esq. -- cmi4@iveymcclellan.com -- at IVEY, MCCLELLAN, GATTON & SIEGMUND, LLP. SMALLVILLE PRESCHOOL: Taps Lloyed Chase as Accountant ----------------------------------------------------- Smallville Preschool, Inc. seeks permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Lloyd Chase, of Lloyd Chase, CPA as accountant to analyze the Debtor's finances and business operations and to advise the Debtor on all financial and accounting matters which may arise in this case. The Debtor requires Mr. Chase to: (a) provide the Debtor with accounting advice with respect to its finances in this case; (b) assist in preparing the documents and applications as may be necessary in furtherance of the Debtor's interests and objectives; (c) assist the Debtor in the formulation of a plan or plans of reorganization and advising the Debtor regarding the same; (d) consult with the Debtor, its counsel and the United States Trustee concerning the administration of the Debtor's estate; (e) perform such other accounting services as may be required and as are deemed to be in the best interest of the Debtor in accordance with its powers and duties accorded under the Bankruptcy Code. The Debtor proposes to pay Lloyd Chase a fee for his services at his standard hourly rate which is $100 per hour Those fees reflect the usual and customary charge for similar accounting services in the State of Florida. Lloyd Chase will also be reimbursed for reasonable out-of-pocket expenses incurred. Mr. Chase assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Lloyd Chase can be reached at: Lloyd Chase LLOYD CHASE, CPA 2709 Swamp Cabbage Court Fort Myers, FL 33901 Tel: (239) 277-0829 Smallville Preschool Smallville Preschool, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 16-04221) on May 16, 2016. SNEED SHIPBUILDING: Wants Plan Filing Period Extended to Oct. 31 ---------------------------------------------------------------- Sneed Shipbuilding, Inc., asks the U.S. Bankruptcy Court for the Southern District of Texas to extend the exclusivity period for the Debtor to file a plan of reorganization to Oct. 31, 2016. The Debtor submits that there is substantial cause to extend Exclusivity, including, but not limited to, the Debtor's reasonable prospect for filing a viable Chapter 11 plan once all issues are resolved and all timely claims have been filed. The Exclusivity for the Debtor expires on July 2, 2016. The Debtor requests that the extended Exclusivity period expire on Oct. 31, plus an additional 60-day extension thereafter for the confirmation of a plan, if one is filed by the Debtor prior to said date, subject to the Debtor's ability to request further extensions of Exclusivity. The Debtor submits that, among other things: (1) the bankruptcy case, though not large in size, has multiple complex and critical issues yet to be resolved, including, but not limited to, the success of the Debtor's efforts to determine whether it can assume its lease of real property from Martin; (2) obtaining working capital via a DIP financing facility on a final basis in order to attract larger repair work while reorganizing; (3) the Debtor has been busy post-petition with continuing to market and sell ship building and repair services, together with its efforts to retain various professionals necessary for the Debtor to confirm a Chapter 11 plan, and its increased business and reporting duties as a result of Chapter 11, has diverted the Debtor's resources to a large extent; (4) the Debtor is generally current on its postpetition payment obligations; (5) the Debtor is currently exploring all avenues to bring in additional liquidity into the estate for purposes of funding a financially viable Chapter 11 plan, including but not limited to taking affirmative steps to increase its towboat and barge repair business in order to generate additional cash flow postpetition; (6) the Debtor is engaged in ongoing good-faith negotiations with multiple parties, the results of which, along with the Court's resolution of the issues, will affect the universe of creditors and amount of claims as well as the formation of a Chapter 11 plan; and (7) the Debtor has nonetheless commenced the plan formulation stage of the bankruptcy case, and it continues to work on a potential plan structure; and the Debtor has otherwise moved as rapidly as reasonably possible to advance this bankruptcy case. In this bankruptcy case, extending Exclusivity will not cause harm to creditors. On the contrary, it will benefit all creditors by ensuring that the Debtor has sufficient time to make appropriate economic decisions, determine whether it can assume its real property lease, participate in the formulation of a Chapter 11 plan, and move towards formulating a meaningful and feasible plan -- which will benefit all creditors. The Debtor's counsel can be reached at: MCCATHERN, PLLC Eric M. Van Horn, Esq. Amber M. Chambers, Esq. Regency Plaza 3710 Rawlins, Suite 1600 Dallas, Texas 75219 Tel: (214) 741-2662 Fax: (214) 741-4717 E-mail: ericvanhorn@mccathernlaw.com achambers@mccathernlaw.com and Nicholas Zugaro, Esq. 2000 West Loop South, Suite 2100 Houston, Texas 77027 Tel: (832) 533-8689 Fax: (832) 213-4842 E-mail: nzugaro@mccathernlaw.com About Sneed Shipbuilding Sneed Shipbuilding, Inc., sought protection under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas (Victoria) (Bankr. S.D. Tex., Case No. 16-60014) on March 4, 2016. The petition was signed by Clyde E. Sneed, president. The Debtor is represented by Amber Michelle Chambers, Esq., Eric Michael VanHorn, Esq., and Nicholas Zugaro, Esq., at McCathern, PLLC. The case is assigned to Judge David R Jones. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million. SOPHISTICATED STYLE: Plan, Disclosures Hearing Set for July 5 ------------------------------------------------------------- Judge Russell F. Nelms of the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, issued an amended order conditionally approving Sophisticated Style, Inc., d/b/a Import Designs, Inc.'s amended disclosure statement and scheduling the hearing on final approval of the Disclosure Statement and confirmation of the Plan for July 5, 2016, at 1:30 p.m. The Plan provides that, from and after the Distribution Date, each holder of an Allowed General Unsecured Claim will receive, in full and final satisfaction of such claim, 2 equal payments, each in the amount of 50% of the Allowed General Unsecured Claim. The first payment will occur on the first day of the month following the Effective Date, and the second payment will occur [120] days following the Effective Date. Provided however, that payments to holders of Allowed General Unsecured Claims who are Insiders will receive payment of their Allowed General Unsecured Claim pursuant to the terms of a Plan Unsecured Note. June 30, 2016, is fixed as the Voting Deadline and the last day for filing and serving written objections to the Disclosure Statement and confirmation of the Plan. A full-text copy of the Second Amended Disclosure Statement is available at http://bankrupt.com/misc/txnb15-44258-45.pdf Sophisticated Style, Inc. (Bankr. N.D. Tex., Case No. 15-44258) filed a Chapter 11 Petition on October 23, 2015. The Debtor is represented by Howard Marc Spector, Esq., at Spector & Johnson, PLLC. SQUARETWO FINANCIAL: S&P Raises ICR to CCC+ on Restructuring ------------------------------------------------------------ S&P Global Ratings said it raised its long-term issuer credit rating on Denver-based SquareTwo Financial Corp. to 'CCC+' from 'D'. The outlook is negative. At the same time, S&P assigned an issue rating of 'B' and recovery rating of '1' to the company's new first-lien $165 million facility. S&P also raised its rating on the company's existing senior second-lien notes to 'CCC-' from 'D' and revised the recovery rating to '6' from '5'. The '6' recovery rating indicates S&P's expectations of "negligible" (0%-10%) recovery in the event of a payment default. "The rating action follows the restructuring of SquareTwo's second-lien notes and its attainment of a new first-lien revolving credit facility," said S&P Global Ratings credit analyst Shakir Taylor. Prior to the transaction, the company's capital structure consisted of a $245 million revolving credit facility and $290 million of senior secured second-lien notes. The company's debt restructuring converted approximately $268 million of the legacy $290 million second-lien senior secured notes, which represented a 92% participation rate. Based on that, the $268 million converted into a new $174.2 million "1.5 lien" term loan (representing 65% of $268 million) and $93.8 million into cumulative preferred equity (35% of $268 million). The "1.5 lien" term loan was inserted to the capital structure to provide the new bondholders seniority over legacy second-lien noteholders, who elected not to tender. The restructuring also added a new $30 million "1.25 lien" term loan, which ranks senior to the 1.5-lien notes and the remaining $22 million of second-lien notes that were not restructured. The new first-lien $165 revolving credit facility is the most senior part of the capital structure, while the holders of the second-lien notes remain the most junior part of the capital structure. Each of the new term loans and new preferred stock contain payment in kind (PIK) features, which permit the deferral of cash interest payments, allowing the company to conserve liquidity in the near term. S&P does not expect the company to pay cash interest on the new term loans or preferred stock for the next two years--meaning its debt load will grow through negative amortization. Despite the upgrade and the company's ability to forestall interest payments while it reallocates capital to purchase opportunities, S&P believes SquareTwo is emerging from the restructuring with a highly leveraged financial position and a business position that is still struggling and highly dependent on favorable outcomes, which are largely beyond the company's control. As a result, S&P continues to assess the company's business risk profile as "vulnerable" due to its relatively small market position in an industry dominated by few players, below-average profitability, and high exposure to adverse regulatory reform. Positively, the restructuring gives the company more time to improve its operations in the currently difficult market conditions. Still, the rating indicates that S&P believes the company could find itself in a difficult position in two years when the credit facility matures and the PIK interest converts to cash interest payments unless its performance has improved materially before then. Over the past few years, SquareTwo's operating performance has been pressured by significantly elevated purchase prices due to reduced supply as heightened regulation led many sellers to abstain from debt sales and reduce volumes, which drove up purchase prices. To offset the significant loss in volume, the company has shifted to buying more non-fresh debt (charged-off receivables greater than 210 days past due), student loan, and commercial receivables. For instance, in 2015, 53% of the company's total purchased debt was composed of fresh receivables, which is a stark reduction from 2014, when fresh purchases constituted 80% of the total purchases. The company prefers fresh receivables as they typically have not been subject to previous collection attempts by a third-party collection agency and typically have lower collection costs. The combination of these factors lead S&P to believe that the weakness in the debt purchasing market will persist through the remainder of 2016 and continue to pressure financial and operational results for the company. S&P's assessment of SquareTwo's financial risk profile incorporates the company's high leverage and substantial level of financial sponsorship. Given the company's new capital structure, S&P projects the company's consolidated leverage (debt to adjusted EBITDA) to be above 5.0x over the next two years. The negative outlook reflects the unfavorable market conditions as a result of reduced supply, adverse pricing, and uncertainty about the evolving regulatory rules and impact from the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. Additionally, S&P expects operating income to be under pressure until regulatory concerns subside and the large sellers (primarily bulge bracket banks) return to the market. Without an improvement in market conditions, SquareTwo may again find itself in a difficult position when its revolving credit facility comes due in two years. S&P could lower the rating if the company's post-restructure profitability and cash flow do not improve markedly within the next nine to 12 months or liquidity becomes further constrained. While an upgrade is not likely, S&P may consider revising the outlook to stable or positive if SquareTwo displays a material and sustainable improvement in earnings, which may ultimately lead to a more favorable capital structure. SRS DISTRIBUTION: Moody's Affirms B2 CFR After Proposed Dividend ---------------------------------------------------------------- Moody's Investors Service affirmed SRS Distribution Inc.'s B2 Corporate Family Rating and its B2-PD Probability of Default Rating following a proposed $264 million debt-financed dividend, since resulting debt credit metrics will remain reasonable for the current ratings. In related rating actions, Moody's affirmed the B2 rating assigned to the company's senior secured term loan due 2022, which is being increased to about $450 million from $323 million, and assigned a Caa1 rating to the proposed $130 million second lien senior secured term loan maturing in 2023. Proceeds from the add-on portion of the existing term loan and the proposed term loan, along with a $20 million draw under the revolving credit facility, will be used to disburse a dividend to its equity owners and to pay related fees and expenses. Terms and conditions for the add-on will be the same as those for the existing term loan. SRS anticipates higher rates for both the existing term loan and add-on portion relative to current pricing. The rating outlook is stable. Following the closing of the proposed transaction, SRS' debt capital structure will consist of a $275 million asset-based senior secured revolving credit facility expiring 2020 (unrated), of which about $105 million will be outstanding at closing due to prior usage for working capital needs and "bolt-on" acquisitions, $450 million senior secured term loan, and $130 million second lien senior secured term loan. These ratings/assessments are affected by this action: Corporate Family Rating affirmed at B2; Probability of Default Rating affirmed at B2-PD; Senior Secured Term Loan due 2022 affirmed B2 (LGD3); and, Second Lien Senior Secured Term Loan due 2023 assigned Caa1 (LGD5). RATINGS RATIONALE SRS' B2 Corporate Family Rating remains suitable at this time, since Moody's expects ongoing solid operating performance, giving SRS the ability to contend with higher fixed charges and debt levels resulting from the proposed debt-financed dividend. However, risk remains. Balance sheet debt at closing will approximate $685 million, an almost 70% increase from 2Q16 levels, and will be the greatest amount of debt SRS has ever carried. Key debt metrics are worsening significantly, but remain supportive of current ratings. Moody's estimates debt leverage, defined as debt-to-EBITDA, increasing to approximately 5.0x -5.25x on a pro forma basis from about 3.5x as of April 30, 2016, and remaining elevated over the intermediate term. Interest coverage, defined as EBITA-to-interest expense, would decrease to 1.75x-2.0x on a pro forma basis from 3.0x for LTM 2Q16 (all ratios include Moody's standard adjustments). Pro forma credit metrics include some earnings from recent acquisitions. Moody's standard adjustments add about $130 million of additional debt for operating lease commitments, resulting in total adjusted balance sheet debt of approximately $815 million on a forma basis at 2Q16. Moody's views the debt-financed dividend as an aggressive financial policy. SRS now has the highest level of debt in its history. The dividend, representing multiple years of last twelve months of free cash flow, comes at a time when the company is only now generating robust levels of free cash flow. Moody's believes future debt-financed dividends are possible, resulting in ever higher levels of debt and interest payments and hindering the company's ability to generate large levels of future free cash flow. Providing offset to the large amount of debt in its capital structure is our expectations of steady operating margins. Demand for roofing products, the driver of SRS' revenues and resulting earnings, is a source of stability within the repair and remodeling end market, and will remain resilient. Also, the ability to generate free cash flow throughout the year, good revolver availability, and a moderately extended maturity profile give SRS financial flexibility to contend with its more leveraged capital structure. The stable rating outlook reflects our expectations that SRS will sustain its operating performance over the next 12-18 months, resulting in key debt credit metrics remaining in-line with the B2 Corporate Family Rating. The B2 rating assigned to SRS's $450 million senior secured term loan due in 2022, the same rating as the Corporate Family Rating, reflects the collateral securing this credit facility and is the preponderance of debt in the capital structure. The term loan is secured by a first lien on the company's domestic non-current assets and any assets not pledged to the revolver. It also has a second lien on the assets securing the revolver. Although the term loan has a second lien on the most liquid assets, we believe that the residual value of the second lien collateral will not be sufficient in a distressed scenario, making it effectively subordinated to the revolving credit facility. The term loan amortizes at 1% per year with a bullet payment at maturity. The Caa1 rating assigned to SRS's proposed $130 million junior senior secured term loan, two notches below the Corporate Family Rating, results from its lien subordination to the collateral securing the company's other bank debt. The residual value of the collateral securing this credit facility would be non-existent in a recovery scenario, making it effectively unsecured debt and putting it in a first-loss position relative to SRS' other committed credit facilities. Positive rating actions could ensue if SRS' operating performance that exceeds Moody's expectations and yields the following credit metrics (ratios include Moody's standard adjustments): Debt-to-EBITDA sustained below 4.5x (5.0x-5.25x pro forma at 2Q16) EBITA-to-interest expense remains above 2.5x (1.75x -- 2.0x pro forma LTM 2Q16) Permanent debt reduction or a better liquidity profile Negative rating pressures could result operating performance falling below Moody's expectations, resulting in the following credit metrics (ratios include Moody's standard adjustments) and characteristics: Debt-to-EBITDA sustained above 6.0x EBITA-to-interest expense remains below 1.5x Significant deterioration in the company's liquidity profile Sizeable dividends Large debt-financed acquisitions SRS Distribution Inc., headquartered in McKinney, TX, is a national distributor of roofing supplies and related building materials in the United States. Berkshire Partners LLC, through its affiliates, is the primary owner of SRS. Revenues for the 12 months through April 30, 2016 totaled approximately $1.5 billion. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in December 2015. SRS DISTRIBUTION: S&P Affirms 'B' CCR on Debt-Financed Dividends ---------------------------------------------------------------- S&P Global Ratings said it affirmed its 'B' corporate credit rating on SRS Distribution Inc. The rating outlook is stable. At the same time, S&P affirmed the 'B' issue-level rating (the same as the corporate credit rating) on SRS's proposed $127 million add-on to the existing $325 million first-lien term loan due 2022. The recovery rating on the debt remains '3', indicating S&P's expectation of meaningful (50% to 70%; lower end of the range) recovery for lenders in the event of a payment default. S&P also assigned our 'CCC+' issue-level rating (two-notches lower than the corporate credit rating) and '6' recovery rating to SRS's $130 million second-lien term loan due 2023. The '6' recovery rating on the debt indicates S&P's expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default. "We expect end-market demand for SRS' roofing product sales to continue to exhibit modest growth over the next 12 months as acquired branches and new greenfield locations come online, reroofing demand remains robust, and housing starts continue to improve in the U.S. (1.2 million expected in 2016)," said S&P Global Ratings credit analyst Pablo Garces. "Still, we expect SRS' credit measures will remain in line with a highly leveraged financial risk profile due to its ownership by a financial sponsor as well as the proposed debt-financed dividend, with adjusted leverage of approximately 6x in 2016. We expect liquidity, in terms of cash and availability under the $275 million ABL facility, will be sufficient to meet the company's seasonal working capital needs and other obligations, including more than $30 million of estimated capital spending in 2016." S&P could lower the rating on SRS if margins were to decline and leverage were to approach 8x. This could occur if an unexpected drop in demand caused severe price competition within the industry, or if it is unable to successfully incorporate further acquisitions over the next 12 months. S&P could also lower its rating if liquidity were to become constrained, most notably if availability under its $275 million ABL were to decrease significantly. S&P could raise its rating on SRS if debt leverage were to fall and remain below 5x debt to EBITDA or above 12% FFO to debt over the next 12 months. In order for S&P to reexamine SRS' financial risk profile, it would also have to gain confidence that the company and its financial sponsor owners were committed to maintaining leverage in the 4x to 5x range on an ongoing and permanent basis. STAR COMPUTER: Hires National Auction to as Auctioneer ------------------------------------------------------ Star Computer Group, Inc. seeks authorization from the U.S. Bankruptcy Court for the Southern District of Florida to employ National Auction Company to conduct an auction sale of the Debtor's personal property. The Debtor is the owner of the warehouse property where its office is located at 2155-2185 N.W. 115 Avenue, Miami, FL 33172 (the "Warehouse"). The Debtor has been engaged in the process of liquidating its assets, which will require the sale of its remaining equipment and various other items (the "Personal Property") located at the Warehouse. The Debtor seeks to conduct an auction sale through Auctioneer at the Debtor's premises located at 2155-2185 N.W. 115 Avenue, Miami, FL 33172. The date of the auction will be determined shortly and announced through separate notice, but will occur prior to June 16, 2016, the date presently scheduled for closing on the sale of the Warehouse. Auctioneer is to be compensated based upon a buyers' premium in the amount of 10% percent, to be paid at the sale by each individual buyer. Auctioneer will not seek any commissions from the estate. Auctioneer will also be reimbursed for its out-of-pocket costs for advertising, marketing and conducting the auction. Such expenses are estimated to be approximately $6,295. That expense estimate is well less than 10% of the Auctioneer's conservative estimate of the expected proceeds of the auction sale. The Debtor requests the Court consider the requested relief on an expedited basis to afford appropriate notice of the auction to interested parties. The sale must be conducted on an expedited basis because the Debtor is scheduled to close on the sale of the Warehouse on June 16, 2016, and accordingly must complete the sale of the Personal Property in advance of closing or otherwise incur the cost of removal and storage of the Personal Property. The Debtor assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. National Auction can be reached at: George Richards NATIONAL AUCTION COMPANY 1325 South Congress Avenue, Suite 202 Boynton Beach, FL 33426 Tel: (561) 364-7004 Fax: (561) 364-8803 About Star Computer Group Star Computer Group, Inc., sought Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 15-28100) on Oct. 12, 2015. The petition was signed by James S. Howard as chief restructuring officer. The Debtor listed assets of $22.7 million and liabilities of $68.3 million. Founded in 1994 with its office located at 2175 N.W. 115 Avenue, Miami, FL 33172, the Company was engaged in the business of supplying wholesale computers, smart phones, and related equipment and software to dealers and wholesales in Latin America. The Company is jointly owned by Henry Waissmann (54%) and Henry Aguilar (46%). The Debtor has engaged Kozyak, Tropin & Throckmorton, P.A., as bankruptcy counsel, GlassRatner as financial advisor, Fuerst Ittleman David & Joseph PL as special tax counsel, and Cherry Bekaert, LLP as accountants. Judge Jay Cristol is assigned to the case. The U.S. Trustee for Region 21, appointed five creditors to serve in the official committee of unsecured creditors. The Committee is represented by Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., as counsel. STATEWIDE AMBULETTE: Court Approves Revised Cash Collateral Pact ---------------------------------------------------------------- Webster Bank, N.A., loaned $250,000 to Statewide Ambulette Service, Inc., under the terms of a Commercial Demand Note and Business Line of Credit Agreement in 2013, which was increased to $400,000 in Apr. 2014. Statewide pledged all of its assets to secure repayment of that loan. Webster has agreed to allow Statewide continued access to cash collateral to pay operating expenses in exchange for $4,700 monthly payments. The Honorable Robert D. Drain placed his stamp of approval on this revised deal this week. The parties reminded Judge Drain that approximately $516,245.70 was due and owing to the Debtor from the New York State Department of Health Office of the Medicaid Inspector General as the result of a pre-petition and post-petition holdback of the Debtor's Medicaid Accounts Receivable. The Debtor received those funds and, pursuant to an earlier cash collateral order, turned $250,000 of that over to Webster. Webster is currently owed approximately $153,000. Webster can be reached at: Joanna Aversa VP, Sr. Workout Specialist Webster Bank, N.A. 609 W. Johnson Avenue Cheshire, CT 06410 and is represented by: Teresa Sadutto-Carley, Esq. Sherri D. Lydell, Esq. Platzer, Swergold, Levine, Goldberg, Katz & Jaslow, LLP 475 Park Avenue South, 18th Floor New York, NY 10016 Statewide Ambulette Service, Inc., based in Scarsdale, N.Y., filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 15-23451) on Oct. 5, 2015, is represented by Todd S. Cushner, Esq., at Garvey Tirelli & Cushner, Ltd., in White Plains, and disclosed $1.18 million in assets and $2.98 million in debts at the time of the filing. STEPPING STONES: Wants Aug. 5 Exclusive Plan Filing Deadline ------------------------------------------------------------ Stepping Stones, Inc., asks the U.S. Bankruptcy Court for the Northern District of Mississippi to extend by 60 days until Aug. 5, 2016, the exclusive period in which the Debtor may file a Chapter 11 plan. The time period in which the Debtor has the exclusive right to file a Chapter 11 Plan expires on this date, June 6, 2016, and the Debtor still has multiple issues that must be resolved before finalizing a plan and disclosure statement, including but not limited to the appraisal of the real property owned by the Debtor. Thus, the Debtor's counsel requires additional time before completing a plan and disclosure statement. The Debtor's counsel can be reached at: Robert Gambrell, Esq. ROBERT GAMBRELL GAMBRELL & ASSOCIATES, PLLC 101 Ricky D. Britt Boulevard, Suite 3 Oxford, MS 38655 Tel: (662) 281-8800 Fax: (662) 202-1004 E-mail: rg@ms-bankruptcy.com Stepping Stones, Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Miss. Case No. 16-10372) on Feb. 5, 2016. Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serves as the Debtor's bankruptcy counsel. STG-FAIRWAY HOLDINGS: S&P Assigns 'B' CCR, Outlook Stable --------------------------------------------------------- S&P Global Ratings assigned a 'B' corporate credit rating to Atlanta-based STG-Fairway Holdings LLC (d/b/a First Advantage Corp.). The outlook is stable. S&P also affirmed the 'B' corporate credit rating on subsidiary STG-Fairway Acquisition Inc., the holder of the company's debt. STG-Fairway Holdings LLC is the guarantor of the debt. Concurrently, S&P affirmed its issue-level rating of 'B+' on the company's first-lien credit facility, which consist of a $485 million term loan due 2022 with $400 million currently outstanding and $50 million revolving credit facility due 2020. The recovery rating remains '2', indicating S&P's expectation for substantial (70%-90%, at the low end of the range) recovery in the event of a payment default. S&P also affirmed its issue-level rating of 'CCC+' on the company's second-lien term loan of $150 million. The recovery rating remains '6', indicating S&P's expectation for negligible (0%-10%) recovery in the event of payment default. The rating on STG-Fairway Holdings LLC (d/b/a First Advantage Corp.) and its subsidiary reflects S&P's view that the company's credit metrics will improve in 2016 as a result of the data center and platform migration initiatives in 2015. S&P expects client attrition, which began in 2015 as a result of the platform migration, to continue into early 2016, with normalized revenue growth resuming in the back half of the year. S&P also projects significant EBITDA margin expansion in 2016 as migration-related costs will not be repeated in 2016. The stable outlook reflects S&P Global Ratings' view that STG-Fairway will maintain its improved credit metrics following the consolidation of data centers, IT platforms, and back-office operations, which includes debt-to-EBITDA levels between 5x–6x over the next 12 months. S&P's stable outlook also incorporates its view that the financial sponsor will not initiate shareholder returns in the next 12 months. STONERIDGE PARKWAY: Ch. 11 Plan Proposes to Sell Assets ------------------------------------------------------- Stoneridge Parkway, LLC, filed with the U.S. Bankruptcy Court for the District of Nevada, Las Vegas Division, a disclosure statement explaining its Chapter 11 plan, which proposes to liquidate and sell assets of the Estate (personal property); enter into a Forbearance Agreement with the Debtor's secured lender and obtain DIP financing; and either: (a) reject the Golf Course Agreement which severely limits the use of the Debtor's main asset to a 27-Hole golf course as an executory contract, (b) strip off the use restrictions as an unwarranted alienation of the property, or (c) sell the property free and clear of all encumbrances, any of which will allow for the re-entitlement of the Property and allow the Debtor to make the highest and best economical use of the Property. The only potential unsecured creditor is the Silverstone Ranch Community Association (the "HOA"), which has yet to file a Proof of Claim. A full-text copy of the Disclosure Statement is available at http://bankrupt.com/misc/nvb16-11627-157.pdf The Debtor is represented by: Matthew Abbasi, Esq. ABBASI LAW CORPORATION 8889 West Olympic Blvd., Suite 240 Beverly Hills, CA 90211 Telephone: (310) 358-9341 Facsimile: (888) 709-5448 Email: Matthew@malawgroup.com -- and -- Samuel A. Schwartz, Esq. Bryan A. Lindsey, Esq. SCHWARTZ FLANSBURG, PLLC 6623 Las Vegas Blvd. South, Suite 300 Las Vegas, Nevada 89119 Telephone: (702) 385-5544 Facsimile: (702) 385-2741 About Stoneridge Parkway Stoneridge Parkway, LLC sought protection under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Central District of California (San Fernando Valley) (Case No. 15-14111) on December 18, 2015. The petition was signed by Danny Modab, managing member. The venue was later transferred to the U.S. Bankruptcy Court for the District of Nevada (Case No. 16-11627). The Debtor estimated assets of $100,000 to $500,000 and debts of $1 million to $10 million. TALEN ENERGY: S&P Affirms 'B+' CCR, Outlook Stable -------------------------------------------------- S&P Global Ratings affirmed its 'B+' corporate credit rating on Talen Energy Supply LLC. The outlook is stable. S&P also affirmed the 'BB' senior secured and 'B+' unsecured debt rating (including the company's 6.5% notes due 2025 and Pennsylvania Economic Development Financing Authority revenue bonds). The '1' recovery rating on the secured debt and '3' recovery rating on the unsecured debt are unchanged. S&P revised its assessment of liquidity to adequate from strong. "The affirmation stems from our expectation that the new owner will manage the existing assets to improve efficiency, despite an ongoing weak power pricing environment that disadvantages coal and nuclear assets," said S&P Global Ratings credit analyst Michael Ferguson. S&P do not expect any significant changes to the composition of the portfolio, and, consequently, have not revised S&P's assessment of the business risk profile as fair. Additionally, S&P expects that the new management team will reduce the size of revolving credit facilities, resulting in the revision of the liquidity score. While S&P anticipates leverage rising in 2016, it expects that it will decrease in subsequent years. The rating outlook on Talen Energy Supply LLC is stable. Based on the current portfolio assets, S&P expects the enterprise company to maintain adjusted debt to EBITDA to exceed 5.0x during the next two years, based on S&P's assumptions about commodity pricing and capital structure under the new ownership structure. S&P anticipates some leverage reduction in 2018. S&P could lower the ratings if debt to EBITDA increases above 5.0x and stays at that level persistently, or if free cash flow metrics decline. This would likely stem from some combination of softer energy markets brought on by lower gas prices and less robust capacity markets in PJM, as well weakened efficiency and availability at key plants. Further, unexpected debt issuances could contribute to this effect, as could an inability to recognize certain operational efficiencies associated with the transaction. While not likely over the next year, S&P could raise the ratings if financial measures improve, such that debt to EBITDA remains consistently below 3.75x. This would likely result from an effort to reduce debt somewhat, as well as a more robust and incentive-laden capacity market. Given its high-performing portfolio and wide geographic swath, Talen could be in a good position to take advantage of secular changes like these. TENNECO INC: Fitch Rates New $500MM Notes 'BB+/RR4' --------------------------------------------------- Fitch Ratings has assigned a rating of 'BB+/RR4' to Tenneco Inc.'s (TEN) $500 million in proposed senior unsecured notes due 2026. Fitch rates TEN's Long-Term Issuer-Default Rating (IDR) 'BB+'/Stable Outlook. TEN intends to use proceeds from the proposed notes to fund the tender offer for its existing $500 million in 6.875% senior unsecured notes due 2020. TEN announced the tender offer today. The tender offer expires on June 10, 2016. The proposed notes will be guaranteed by TEN's wholly-owned domestic subsidiaries that also guarantee the company's secured revolving credit facility and Term Loan A. KEY RATING DRIVERS TEN's ratings continue to be supported by the company's market position as a top global supplier of emission control and vehicle suspension components, with a strong presence in both the original equipment and aftermarket segments. In addition, tightening regulations governing commercial truck and off-highway vehicle emissions in a number of global jurisdictions have led to increased growth opportunities and higher profitability for the company. TEN's credit profile is characterized by slowly declining, but somewhat variable, leverage and adequate liquidity. However, free cash flow margins are relatively low. Primary risks to the company's credit profile include industry cyclicality, volatile raw material costs and variability in fuel prices. Cyclical risk is mitigated somewhat by the increasing diversification of the company's customer base and improving cost structure, as well as ever-tightening global emissions regulations, which will drive growth in the market for emission control products independent of global economic conditions. Also mitigating risk and supporting near-term liquidity is a lack of material debt maturities until 2019. Volatile fuel prices present a risk because TEN's equipment on smaller and more fuel efficient vehicles tends to be less profitable. As with other auto suppliers, TEN seeks to minimize the effect of volatility in raw material prices by passing along a substantial portion of the change in its material costs to its original equipment customers. An additional risk is the potential for an adverse outcome in the ongoing antitrust investigation of TEN being conducted by the European Commission (EC) and the U.S. Department of Justice (DOJ). Details of the investigation, the potential timing of any resolution and the ultimate exposure to TEN are currently unknown, but the DOJ has granted the company conditional leniency through the Antitrust Division's Corporate Leniency Policy. As such, the DOJ will not seek any criminal fines or penalties against the company, and TEN's potential liability in any follow-on civil antitrust litigation in the U.S. is limited. Nonetheless, a particularly adverse outcome related to the investigations could lead to a negative rating action. As of March 31, 2016, TEN's EBITDA leverage (as calculated by Fitch) was 2.2x, with total debt of $1.6 billion (including European factored receivables) and EBITDA of $752 million. TEN's EBITDA margin was 9.0%. FFO adjusted leverage was 3.2x at March 31, 2016. TEN's debt tends to vary seasonally as negative working capital at certain times of the year leads to increased borrowings that the company repays at other points during the year. Free cash flow grew (FCF) in the 12 months ended March 31, 2016 was $201 million (adjusted for the effect of factored receivables), leading to a FCF margin of 2.4%. Liquidity at March 31, 2016 included $374 million in cash and cash equivalents and $912 million in availability on the company's $1.2 billion secured revolver. Most of TEN's cash is generally held outside the U.S., and much of it could be subject to additional withholding taxes if repatriated. TEN's secured revolver and secured Term Loan A have a recovery rating of 'RR1' and are rated one-notch above the company's IDR, reflecting their substantial collateral coverage, which includes virtually all of the company's U.S. assets and up to 66% of the stock of its first-tier foreign subsidiaries. Based on Fitch's criteria, 'BBB-' is the highest issue rating that may be assigned to an issuer with an IDR of 'BB+'. TEN's senior unsecured notes have a recovery rating of 'RR4' and are rated the same as the company's IDR, reflecting Fitch's expectations for an average recovery in a distressed scenario. KEY ASSUMPTIONS -- Global economic conditions continue to improve at a modest pace, leading to low-single digit growth in global auto production. -- In addition to increased auto production, TEN's revenue benefits from higher commercial vehicle and off-road equipment demand as emissions regulations in these segments continue to tighten many global markets. -- With the improving vehicle production volumes and increased penetration, TEN's revenue and profitability grow, but negative foreign exchange masks much of the near-term revenue improvement. -- Capital spending remains elevated by historical standards over the intermediate term to support new product wins and growth in the company's manufacturing footprint. -- Debt maturities are refinanced through the next several years. -- Share repurchases total $550 million through year end 2017, and the company continues with share buybacks following the expiration of the current program. -- The company generally maintains between $250 million and $300 million in cash on its balance sheet. RATING SENSITIVITIES Positive: Further developments that may, individually or collectively, lead to a positive rating action include: -- An Increase in TEN's value-added free cash flow margin to about 3% on a consistent basis; -- A decline in FFO adjusted leverage to 2.5x or lower; -- An increase in FFO fixed charge coverage to 5x or higher. Negative: Further developments that may, individually or collectively, lead to a negative rating action include: -- A severe decline in global vehicle production that leads to reduced demand for TEN's products; -- A decline in TEN's value-added free cash flow margin to below 1% for an extended period; -- An increase in FFO adjusted leverage to 4x or higher; -- A decline in FFO fixed charge coverage to 3x or lower; -- An adverse outcome from the antitrust investigation that lead to a significant decline in liquidity or an increase in leverage. Fitch currently rates Tenneco Inc. as follows: -- IDR 'BB+'; -- Secured revolving credit facility rating 'BBB-/RR1'; -- Secured Term Loan A rating 'BBB-/RR1'; -- Senior unsecured notes rating 'BB+/RR4'. TENNECO INC: Moody's Assigns Ba3 Rating on New $500MM Sr. Notes --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 to Tenneco Inc.'s new $500 million of senior unsecured notes due 2026. The net proceeds from the notes, along certain other funds, are expected to be used to fund the tender offer of any and all of Tenneco's outstanding $500 million 6 7/8% senior notes due 2020, to redeem any of such notes that are not tendered at a redemption price of 103.438%, pay fees, premiums, expenses and unpaid and accrued interest related to the tender offer or redemption. Ratings assigned: Tenneco Inc. New $500 million senior unsecured notes due 2026, Ba3 (LGD4). Moody's maintains these ratings for Tenneco Inc.: Corporate Family Rating, Ba2 Probability of Default Rating, Ba2-PD; Senior unsecured notes due 2020, Ba3 (LGD4); Senior unsecured notes due 2024, Ba3 (LGD4); Speculative Grade Liquidity Rating, SGL-2; Rating outlook: stable. RATINGS RATIONALE The transaction is expected to generate interest savings supporting stronger debt service metrics for Tenneco. Tenneco continues generate improving volumes in its Clean Air Division despite uneven industry production in its end markets. Tenneco is experiencing automotive platform growth in North America and Europe. In the company's commercial vehicle markets, new business wins in North America, and improving volumes in Europe have more than offset softness in North American commercial vehicle volume, weaker economic conditions in South America, and the negative impact or currency fluctuations. Moody's will look for the capacity of these trends to support cash flow generation resulting in sustainable Debt/EBITDA reduction supportive of previously established positive rating action drivers. Future events that could drive Tenneco's ratings higher include continued growth in the company's clean air division supporting stronger profitability and cash flow resulting in consistent debt reduction on a fiscal year-end basis. Consideration for a higher rating or outlook could arise if these factors, in Moody's view, could lead to EBITA/Interest being sustained at over 5.5x and Debt/EBITDA sustained below 2x. Future events that could drive Tenneco's outlook or ratings lower include declines in global automotive or commercial vehicle production or loss of momentum in the company's clean air product penetration resulting in weakening credit metrics or liquidity. Consideration for a lower rating could arise if these factors were to lead to expected fiscal year-end Debt/EBITDA approaching 3.5x or EBITA/Interest coverage at 3.5x times. The principal methodology used in these ratings was Global Automotive Supplier Industry published in May 2013. Tenneco, headquartered in Lake Forest, Illinois, is a leading manufacturer of automotive emissions control and ride performance products and systems for both the worldwide original equipment market and aftermarket. Revenue for the LTM period ending March 31, 2016, was $8.3 billion. TENNECO INC: S&P Assigns BB Rating on Proposed $500MM Sr. Notes --------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '5' recovery rating to Lake Forest, Ill.-based Tenneco Inc.'s proposed $500 million senior unsecured notes due in 2026. The '5' recovery rating indicates S&P's expectation that lenders will receive a modest recovery (10%-30%; lower half of the range) in the event of a default. The company intends to use the net proceeds, together with cash on hand or available liquidity, to purchase any and all of S&P's outstanding $500 million 6 7/8% senior notes and to pay fees, premiums, expenses, and unpaid and accrued interest related to the tender offer or redemption. The notes are senior unsecured obligations that each material domestic subsidiary guarantees on an unsecured basis. In right of payment, the notes are subordinated to the company's existing and future secured debt and equal to all existing and future senior unsecured debt. The 'BB+' corporate credit rating and stable outlook on Tenneco reflect its intermediate financial risk profile and its fair business risk profile, reflecting the highly cyclical light-vehicle and commercial-vehicle markets in which it competes. RATINGS LIST Tenneco Inc. Corporate credit rating BB+/Stable/-- Ratings Assigned Tenneco Inc. Senior unsecured $500 mil. notes due 2026 BB Recovery rating 5L TEREX CORP: S&P Affirms 'BB' CCR, Off CreditWatch Negative ---------------------------------------------------------- S&P Global Ratings said it affirmed all its ratings on Terex Corp., including its 'BB' corporate credit rating, and the ratings on its subsidiaries and removed them from CreditWatch with negative implications, where S&P had placed them on Feb. 24, 2016. "Although we expect the company to experience continued weakness in operating performance due to softness in key end markets such as energy and mining, we expect it to continue to generate good levels of free cash flow and to maintain leverage below 4x," said S&P Global Ratings credit analyst Tyrell Peebles. S&P could lower the ratings if it anticipates a business downturn, acquisitions or shareholder returns to be more aggressive than S&P's expectation, that results in debt-to-EBITDA above 4x on a sustained basis without prospects for near-term improvements. Ratings upside is not likely over the next 12 months, however, S&P could raise the ratings if Terex demonstrates a commitment to a more conservative financial policy or it reduces expected volatility. Portfolio expansion into less cyclical end markets, improved and sustainable margin levels and a higher proportion of service revenues could provide greater stability to the business and potentially support an upgrade. TERRY PAUL STIER: Plan Will Pay Unsecured Claims in 5 Years ----------------------------------------------------------- Terry Paul Stier filed with the U.S. Bankruptcy Court in Colorado a Disclosure Statement and Chapter 11 Plan of Reorganization dated June 1, 2016. The Plan provides that holders of allowed Unsecured Claims in Class 6 will received distributions on account of the allowed claim over a period of 5 years as follows: "commencing on each anniversary of the Effective Date, the Debtor will deposit $8,000 for a period of 5 years months[sic] into a segregated account for the benefit of the Class 6 Claimants. The account will established at an institution insured by the FDIC and held in the Debtor's name. Creditors may request copies of statements for the account from the Debtor by written request with a copy of such request provided to the Debtor's attorney. The total amount of $40,000.00 will be disbursed to unsecured creditors through the plan. Within fifteen (15) days after the anniversary of the Effective Date the Debtor shall make a pro rata distribution to Class 6 creditors. Funds used to make the deposits will be generated from post-petition earnings. To the extent that Class 6 claims are subject to an objection by the Debtor, or any other party in interest, the amount of the distribution the creditor would be entitled to receive if the claim was allowed in full shall be held in the segregated account until a final adjudication of the claim. In the event the claim is disallowed or allowed in a lesser amount, the balance of the held funds shall be distributed to allowed Class 6 claimants on a pro rata basis. Any distributions made to creditors that are unclaimed after 90 days, together with any additional distributions that the creditor would be entitled to receive, shall be distributed to other allowed Class 6 claimants on a pro rata basis. The student loan claim will share with other Class 6 creditors on a pro rata basis." The holders of judgment lien claims in Class 5 will be reclassified and treated as Class 6 Claims as set forth in the Plan. The Debtor will file motions to avoid the liens with respect to each claim. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/cob15-18402-00071.pdf Mr. Stier's home went into foreclosure and was set for sale on July 29, 2015. Initially, he filed a Petition for Relief under Chapter 13 of the Bankruptcy Code (Bankr. D. Colo. Case No. 15-18402-MER). When it became apparent that the Debtor exceeded the debt limitation under Chapter 13, the case was converted to Chapter 11. Mr. Stier was an executive with Sinclair Oil. He was laid off from his employment at Sinclair Oil in April 2016. He is represented by: Kenneth J. Buechler, Esq. Buechler & Garber, LLC 999 18th Street, Suite 1230 S Denver, CO 80202 TRANSWORLD SYSTEMS: S&P Lowers CCR to 'CCC' on Covenant Concerns ---------------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on Chicago-based Transworld Systems Inc. to 'CCC' from 'B'. The outlook is developing. At the same time, S&P lowered the issue ratings on TSI's senior secured notes to 'CCC' from 'B'. The recovery rating on the notes remains '4', which indicates S&P's expectation for average recovery (30%-50%; lower half of the range) in the event of a payment default. "The downgrade reflects our view of the deterioration in the company's liquidity profile combined with very tight covenant compliance," said S&P Global Ratings credit analyst William Savage. The developing outlook on the company reflects uncertainty about receipt of the Department of Education contract and the timing of the announcement. TRIBUNE PUBLISHING: Gannett Determined to Woo Company ----------------------------------------------------- Leslie Picker, writing for The New York Times' DealBook, reported that Gannett Co. made one thing clear on June 7: It will not walk away from its unsolicited offer to acquire the Tribune Publishing Company before summer's end. According to the report, Tribune Publishing has already rejected both of Gannett's offers -- the latest at a 99 percent premium to the price of Tribune Publishing's shares in April before news of a potential bid surfaced. The company, which publishes The Los Angeles Times and The Chicago Tribune, also brought in a new minority investor and director who could help fend off the takeover, the report related. Reports surfaced that Gannett would abandon its pursuit of Tribune Publishing, the report further related. Gannett, which owns USA Today, among other media assets, missed the window to nominate its own set of directors, leaving it with fewer tools to put pressure on the board for an immediate sale, the report said. It encouraged Tribune Publishing’s shareholders to withhold their votes for the eight director nominees to the company's board, and when the votes were counted, Gannett demonstrated that many of Tribune Publishing's shareholders were on its side, the report added. "Gannett values the 11 iconic newspapers of Tribune and has determined to keep its offer in place as it evaluates various near-term developments, including the Tribune second-quarter 2016 financial results, which are expected in August," Gannett said on June 7 in a statement. Tribune Publishing, which owns newspapers including The Los Angeles Times and The Chicago Tribune, has hired advisers to consider the bid, which amounted to $815 million including debt and other liabilities, the company said in a statement, the report related. * * * The Troubled Company Reporter, on Dec. 9, 2015, reported that Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Chicago-based newspaper publisher Tribune Publishing Co. to 'B' from 'B+'. The rating outlook is stable. At the same time, S&P lowered its issue-level rating the company's term loan due 2021 to 'B' from 'B+'. The '3' recovery rating is unchanged, indicating S&P's expectation for meaningful recovery (50%-70%; upper half of the range) of principal in the event of a payment default or bankruptcy. S&P also lowered its issue-level rating on the company's $140 million asset-based lending (ABL) revolving credit facility due 2019 to 'BB-' from 'BB'. The '1' recovery rating is unchanged, indicating S&P's expectation for very high recovery (90%-100%) of principal in the event of a payment default or bankruptcy. "The downgrades are based on Tribune's elevated leverage due to continued top line weakness, higher-than-expected restructuring expenses, and our view that there is greater volatility in the company's credit metrics than we had previously expected," said Standard & Poor's credit analyst Thomas Hartman. "We expect that leverage will be in the 4x-5x range in 2015." TRONOX INC: Bank Debt Trades at 3% Off -------------------------------------- Participations in a syndicated loan under which Tronox Inc is a borrower traded in the secondary market at 96.83 cents-on-the-dollar during the week ended Friday, June 3, 2016, according to data compiled by LSTA/Thomson Reuters MTM Pricing. This represents an increase of 0.32 percentage points from the previous week. Tronox Inc pays 300 basis points above LIBOR to borrow under the $1.5 billion facility. The bank loan matures on March 15, 2020 and carries Moody's B1 rating and Standard & Poor's BB rating. The loan is one of the biggest gainers and losers among 247 widely quoted syndicated loans with five or more bids in secondary trading for the week ended June 3. TRUE RELIGION: Moody's Lowers CFR to Caa2, Outlook Negative ----------------------------------------------------------- Moody's Investors Service downgraded True Religion Apparel, Inc.'s Corporate Family Rating to Caa2 from Caa1 and Probability of Default Rating to Caa2-PD from Caa1-PD. Moody's also downgraded the company's first lien term loan rating to Caa2 from Caa1 and affirmed the second lien term loan rating at Caa3. The rating outlook is negative. The downgrade reflects Moody's view that True Religion's capital structure is unsustainable (with leverage based on management adjusted EBITDA of nearly 10 times as of January 2016), and that the company faces a heightened probability of default including the potential for discounted debt repurchases. The company's earnings have steadily declined since 2013. In 2015, revenue declined 7% and management adjusted EBITDA declined 30%, primarily driven by a highly promotional retail environment, a mix shift to non-denim products, which carry lower gross profit than denim, foreign exchange headwinds and lower demand in Europe. In Moody's view given the ongoing challenges in the retail environment, premium denim category and brand perception, the company has limited prospects for a meaningful operating performance turnaround in the next several years that would allow it to reduce leverage to a sustainable level. Moody's expects True Religion to have adequate liquidity for the next 12-15 months. The negative rating outlook reflects the risk that if operations do not improve, the probability of default will increase or recovery prospects will weaken. Moody's took these rating actions on True Religion Apparel, Inc.: -- Corporate Family Rating, downgraded to Caa2 from Caa1 -- Probability of Default Rating, downgraded to Caa2-PD from Caa1-PD -- $386 million ($400 million face value) first lien term loan due 2019, downgraded to Caa2 (LGD3) from Caa1 (LGD3) -- $85 million second lien term loan due 2020, affirmed at Caa3 (LGD5) -- Outlook is Negative RATINGS RATIONALE True Religion's Caa2 rating reflects the heightened probability of default considering the company's leverage of nearly 10 times and ongoing earnings declines driven by challenges in the retail environment, denim category and the company's brand position. The rating also reflects True Religion's modest scale and concentrated fashion risk as a mono-brand retailer and wholesaler with about half of sales in the highly competitive premium denim category. Moody's expects True Religion to have adequate liquidity for the next 12-15 months, reflecting modest balance sheet cash, nominal free cash flow generation, lack of maturities until the 2018 ABL expiration, and absence of term loan financial maintenance covenants. Moody's also projects seasonal usage of the asset-based revolver that should not trigger the ABL springing fixed charge coverage covenant. The liquidity position diminishes the potential for a payment-related default over the next 12-15 months, but Moody's views the risk of an event of default over a longer timeframe as high. The ratings could be downgraded if Moody's believes the risk of a distressed exchange or other default is increasing or becoming more likely over a 12-month period, or if family recovery prospects or liquidity deteriorates. The ratings could be upgraded if True Religion achieves meaningful earnings growth by successfully executing its strategic initiatives, reduces leverage and maintains adequate liquidity. True Religion Apparel, Inc. designs and markets denim, sportswear and accessories for men, women and children under the "True Religion" brand. The company's products are sold in its branded retail and outlet stores and website, as well as in contemporary department stores, boutiques and off-price retailers. As of Jan. 30, 2016, True Religion operated 160 stores, including 147 stores in North America. The company had revenues of approximately $400 million in 2015. True Religion has been controlled by TowerBrook Capital Partners since its take-private transaction in July 2013. The principal methodology used in these ratings was Retail Industry published in October 2015. UCI HOLDINGS: Chapter 11 Petition Filed; First Day Motions Okayed ----------------------------------------------------------------- UCI Holdings Limited and 12 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-11354 (UCI International). BankruptcyData.com reported that according to documents filed with the Court, "The Debtors' bankruptcy filings are the result of the convergence of both industry-wide trends and factors specific to the Debtors that have combined to put pressure on the Debtors' businesses and have adversely impacted the Debtors' financial results . . . . The Debtors' current balance sheet is unsustainable . . . . Absent a restructuring of the Debtors' indebtedness, the Debtors are unable to comply with their debt obligations. Moreover, under the continuing burden of these interest payments, the Debtors would lack sufficient cash flow to maintain their business and reinvest capital to take advantage of growth opportunities." The Bankruptcy Court on June 3 approved all of the first-day motions submitted by the Company. The rulings enable UCI and its subsidiaries, which include Airtex Products, L.P., ASC Industries, Inc., and Champion Laboratories, Inc., to continue operations in the normal course including paying vendors for all post-petition goods and services, continuing all customer programs, and maintaining payroll and employee health benefits, and other programs that are essential to continuing businesses without disruption. About UCI Holdings UCI Holdings Limited is involved in the design, manufacturing, and distribution of vehicle replacement parts, including a broad range of filtration, fuel delivery systems, and cooling systems products in the automotive, trucking, marine, mining, construction, agricultural, and industrial vehicles markets. The Debtor is represented by Edmon L. Morton of Young Conaway Stargatt & Taylor. UCI HOLDINGS: S&P Lowers CCR to 'D' on Chap. 11 Filing ------------------------------------------------------ S&P Global Ratings lowered its corporate credit rating on UCI Holdings Ltd. to 'D' (default) from 'SD'. The issue-level rating on the company's senior unsecured debt remains unchanged at 'D'. UCI Holdings Ltd. announced that it had filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. Consequently, S&P has lowered the corporate credit rating to 'D' from 'SD'. On March 22, 2016, S&P had lowered the corporate credit rating to 'SD' because of the company's failure to make a required interest payment within the 30-day grace period on its 8.625% senior unsecured notes. At that same time, the issue rating on these notes was lowered to 'D'. ULTRA PETROLEUM: Seeks Approval of Key Employee Incentive Plan -------------------------------------------------------------- BankruptcyData.com reported that Ultra Petroleum filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing and approving the Debtors' key employee incentive plan (KEIP). The motion explains, "The Debtors request that the Court grant this Motion for two primary reasons. First, the Incentive Plan is an ordinary-course continuation of prepetition compensation practices that constitutes a sound exercise of the Debtors' business judgment and is in the best interests of the Debtors' estates. The payments under the Incentive Plan are reasonable in light of market practice. Without the Incentive Plan, the Senior Executives would earn substantially below market level compensation -- below even the 10th percentile in the Debtors' peer group industry -- despite the Debtors' consistent top-tier operational performance. Second, the Incentive Plan complies with the requirements of section 503(b) and (c) of the Bankruptcy Code. The Incentive Plan's performance metrics are 'stretch' goals that are primarily incentivizing and are tied to operational performance objectives that are directly aligned with the ultimate interests of all stakeholders." According to the report, the Debtors filed a separate motion for entry of an order authorizing and approving a non-insider retention program. The motion explains, "The Debtors' business enterprise is one of the leanest, most efficiently-operated exploration and production companies in the oil and gas industry. In connection with the Debtors' chapter 11 restructuring process, the Debtors have segregated their workforce into two groups: 'insider' employees, a group consisting of their six executive officers; and 'non- insider' employees, a group consisting of all of the Debtors' salaried employees other than their six executive officers. The Debtors' non-insider employees are vital to the Debtors' operations. This Motion seeks the approval, on a postpetition basis, of the Debtors' prepetition Key Employee Retention Program (the 'Retention Program') applicable to the Debtors' non-insider key employees (each, a 'KERP Participant,' and, collectively, the 'KERP Participants'). The Retention Program contemplates quarterly retention payments to approximately 103 KERP Participants, which payments are expected to total approximately $1.1 million per quarter (an average of approximately $11,000 per KERP Participant)." The Debtors have requested a June 23, 2016 hearing to consider both the motions. About Ultra Petroleum Ultra Petroleum Corp. is an independent oil and gas company engaged in the development, production, operation, exploration and acquisition of oil and natural gas properties. Ultra Petroleum Corp. and its affiliates filed separate Chapter 11 petitions (Bankr. S.D. Tex. Case Nos. 16-32202 to 16-32209) on April 29, 2016. The Hon. Marvin Isgur presides over the cases. James H.M. Sprayregen, P.C., David R. Seligman, P.C., Michael B. Slade, Esq., Christopher T. Greco, Esq., and Gregory F. Pesce, Esq., at KIRKLAND & ELLIS LLP; and Patricia B. Tomasco, Esq., Matthew D. Cavenaugh, Esq., and Jennifer F. Wertz, Esq., at JACKSON WALKER, L.L.P., serve as counsel to the Debtors. Rothschild Inc. serves as the Debtors' investment banker; Petrie Partners serves as their investment banker; and Epiq Bankruptcy Solutions, LLC, serves as claims and noticing agent. Ultra Petroleum Corp. listed total assets of $1.28 billion and total liabilities of $3.91 billion as of March 31, 2016. The petitions were signed by Garland R. Shaw, chief financial officer. The Company's common stock commenced trading on the OTC Pink Marketplace under the symbol "UPLMQ" on May 3, 2016. The Office of the U.S. Trustee has appointed seven creditors of Ultra Petroleum Corp. to serve on the official committee of unsecured creditors. US FOODS: S&P Raises CCR to 'B+' Following IPO ---------------------------------------------- S&P Global Ratings raised all of its ratings on Rosemont, Ill.-based US Foods Inc., including S&P's corporate credit rating to 'B+' from 'B'. The outlook is positive. At the same time, S&P raised its issue-level rating on the company's $1.3 billion asset-backed revolving credit facility (ABL) to 'BB' from 'BB-', with a recovery rating of '1', indicating S&P's view that lenders could expect 90%-100% recovery in the event of a payment default. Also, S&P raised its issue-level rating on the company's $2.1 billion senior secured term loan B to 'B+' from 'B', with a recovery rating of '3', indicating S&P's view that lenders could expect meaningful (50% to 70%, at the lower half of the range) recovery in the event of a payment default. In addition, S&P raised its issue-level rating on the company's $1.35 billion senior unsecured notes to 'B-' from 'CCC+', with a recovery rating of '6', indicating S&P's view that lenders could expect 0-10% recovery in the event of a payment default. S&P's rating actions assume the company follows through with its stated intention to use the majority of the IPO net proceeds to redeem a large portion of the senior unsecured notes. Pro forma for the proposed transactions, S&P estimates debt is about $4 billion. "The upgrades reflect the successful completion by USF's parent of its IPO and conditional notice to use the majority of net proceeds to redeem approximately $1.1 billion principal amount of its 8.5% senior unsecured notes due 2019," said S&P Global Ratings analyst Brennan Clark. S&P's ratings on USF reflect the company's solid number two position in the highly competitive and fragmented foodservice distribution industry; its low, albeit stable, profit margins; and its substantial scale. In S&P's view, USF's broad geographic reach and size provide the company with purchasing economies relative to many smaller competitors. S&P also recognizes that USF's good route density--albeit below industry leader Sysco Corp.--should contribute to its satisfactory operating efficiency. The positive outlook reflects S&P's belief that US Foods has the ability to continue to pay down debt and grow EBITDA as it restores its market position following the termination of the disruptive Sysco transaction last year. It also reflects S&P's assumption that the influence of the financial sponsors, which still own over 75% of the company's stock, will continue to decline. S&P could raise the ratings if it expects debt to EBITDA to fall and hover below 5x on a sustained basis, which S&P estimates could occur if US Foods repays $575 million of debt or EBITDA increases by 15% compared to S&P's pro forma estimates as of April 2, 2016. An upgrade is also contingent on increased confidence of reduced risk of any re-leveraging event, such as a material acquisition or shareholder remuneration. VALEANT PHARMA: Reports First-Quarter Loss, Cuts Forecast --------------------------------------------------------- Katie Thomas, writing for The New York Times' DealBook, reported that Joseph C. Papa, the new chief executive of Valeant Pharmaceuticals International, strove to signal on June 7 that the company's worst problems were behind it, telling analysts that the company's future was "bright," despite what he repeatedly described as "speed bumps." But Valeant's first-quarter earnings report, released June 7 after more than a monthlong delay, told a different story, revealing trouble in core business areas, including its dermatology, gastrointestinal and ophthalmology units, according to the report. And it suggested that the company’s troubles were not limited to the legal issues and investigations before it, the report said. A big loss of nearly $374 million in the quarter -- and lower guidance for the rest of the year -- raise particularly difficult problems for the company, the report related. Valeant is weighed down with $30 billion in debt and has said it will no longer rely as heavily on price increases and big acquisitions to drive profits, its strategy in the previous few years, the report further related. About Valeant Valeant Pharmaceuticals International, Inc. (NYSE/TSX:VRX) -- http://www.valeant.com/-- is a multinational specialty pharmaceutical company that develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of dermatology, gastrointestinal disorder, eye health, neurology and branded generics. Valeant reported a net loss attributable to the Company of $291.7 million on $10.44 billion of revenues for the year ended Dec. 31, 2015, compared to net income attributable to the Company of $880.7 million on $8.20 billion of revenues for the year ended Dec. 31, 2014. As of Dec. 31, 2015, Valeant had $48.96 billion in total assets, $42.93 billion in total liabilities and $6.02 billion in total equity. * * * Valeant carries a 'B2' Corporate Family Rating from Moody's Investors Service. As reported by the TCR on April 19, 2016, Standard & Poor's Ratings Services said that it has lowered its corporate credit ratings on Valeant Pharmaceuticals International Inc. to 'B' from 'B+' and placed both the corporate credit rating and the issue-level ratings on CreditWatch with developing implications. VALIDUS HOLDINGS: Moody's Assigns Ba1 Rating on New Shares ---------------------------------------------------------- Moody's Investors Service has rated new preference shares of Validus Holdings, Ltd. (NYSE: VR, "Validus") at Ba1(hyb) with a positive outlook. The offering will consist of depositary shares, each of which will represent a 1/1,000th interest in a share of Series A preference shares ($0.175 par value and $25,000 liquidation preference per share, equivalent to $25 per depositary share). The total offering is expected to be approximately US$150 million and offer an annual dividend of approximately 5.875%. The preferred shares will be non-participating, non-cumulative, redeemable at the issuer's option beginning June 2021, and have limited special voting rights. RATINGS RATIONALE The Ba1(hyb) rating on the preferred shares reflects their junior ranking to all indebtedness and two notches below the senior debt rating based on Moody's standard criteria for insurance holding companies. Moody's regards these preferred shares as Basket C hybrids (50% equity credit) based on their subordination and perpetual maturity. "We expect the proceeds will be used to fund capital needs rather than common share repurchases," said Kevin Lee, Moody's analyst for Validus. Although pricing and structural headwinds in the reinsurance sector make this an unusual time to be raising capital, the preferred shares will only have a modest impact on debt leverage (12.1% at 03/16 to ~13.3% pro forma), fixed charge coverage (7.6x LTM 03/16 to ~6.9x pro forma) and dividend requirements on the operating subsidiaries. The positive rating outlook on the preferred shares mirrors the rating outlook on the group. Moody's believes that Validus is a sound company with a solid balance sheet, and aligns financial policy with strategy. In resolving the outlook, Moody's will weigh these strengths against Validus' vulnerability to structural changes in the reinsurance market. Validus' operating subsidiaries provide the credit support for the parent company's obligations, including the new preferred shares. Moody's rates the flagship subsidiary, Validus Reinsurance, Ltd. (Bermuda), at A3 insurance financial strength, reflecting the group's profitable track record, depth in catastrophe reinsurance and niche short-tail lines, access to third-party capital, and adequate capitalization which together deliver a sufficient value proposition to brokers and clients. However, cat reinsurance drives ~60-70% of Validus' profits but is the product most vulnerable to structural headwinds in the reinsurance market. The biggest risk to Moody's view relates to how alternative capital sources -- which have severely disrupted the cat market -- would react to either a mega-disaster or higher interest rates. An en masse exit would be positive for reinsurers while minimal outflows (or even possibly additional inflows) would likely jeopardize adequate long-term returns for Validus and many other reinsurers. WHAT COULD CHANGE THE RATING UP OR DOWN These factors could lead to an upgrade of Validus' ratings: (a) high likelihood of earning its cost of capital over the cycle despite structural headwinds; (b) adjusted debt-to-total capital ratio below 15% cross-cycle; (c) EBIT coverage of fixed charges exceeds 6x cross-cycle (reflecting actual rather than normalized cat losses); (d) successful integration and achievement of revenue synergies at Western World. Since the ratings are on positive outlook, Moody's does not anticipate a downgrade in the next 12 months absent event-driven reasons. However, failure to achieve the factors in the previous section would likely return the outlook to stable. This rating has been assigned with a positive outlook: Validus Holdings, Ltd. -- preferred stock at Ba1(hyb). Validus Holdings, Ltd. (NYSE: VR) is a midsize Bermuda-based property-casualty insurer and reinsurer with consolidated total shareholders' equity of US$3.9 billion as of March 31, 2016. The principal methodology used in this rating was Global Reinsurers published in April 2016. VERDESIAN LIFE: S&P Lowers CCR to 'B' on Weak Operating Performance ------------------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on Verdesian Life Sciences LLC to 'B' from 'B+'. The outlook is negative. In addition, S&P lowered the rating on the company's $25 million first-lien revolving credit facility and its first-lien term loan to 'B+' from 'BB-'. The recovery rating remains '2', indicating S&P's expectation for substantial (upper end of the 70% to 90% range) recovery in the event of a payment default. "The downgrade reflects our view of risks to the company's credit quality arising from a weakening of liquidity and operating performance," said S&P Global Ratings credit analyst Paul Kurias. "Though we expect credit metrics to remain appropriate for the rating or even strong at times, we believe that the risk of noncompliance with the springing covenant in the company's revolving credit facility has increased considerably," he added. S&P believes liquidity will be constrained, though in its base case S&P assumes operating cash flow will be sufficient to meet operating and debt service requirements. The covenant is applicable beyond a threshold borrowing level under the revolving credit facility, and S&P expects the company will borrow below this threshold level so that the covenant is not applicable. The negative outlook reflects S&P's expectation over the next 12 months that Verdesian Life Sciences LLC will maintain sufficient liquidity to meet its requirements, though S&P expects the liquidity cushion to be low. S&P believes management will proactively amend covenants or refinance its credit facilities if required so that sources of funds are at least equal to uses. S&P do not anticipate any significant increase in debt, so S&P expects the company's pro forma credit measures, will continue to remain appropriate for the rating in 2016, including debt to EBITDA of slightly below 5x. S&P could consider a downgrade in the next 12 months if the pro forma debt to EBITDA ratio increases to levels above 6x without clear prospects of recovery in a few quarters. S&P would also lower ratings if liquidity weakened so that in its view future sources of funds were not sufficient to cover uses of funds or if the company was required to comply with covenant and unable to do so. This could happen if there is a decline in the agricultural products industry in 2016, competition from alternative products or industry wide pricing hurts operating results, or management chooses to adopt more aggressive financial policies. S&P's ratings incorporate some cushion for tuck-in acquisitions, but a large debt-financed transaction could cause S&P to re-evaluate its analysis. S&P could revise its outlook to stable within the next year if the company built significant cushions under its covenants either through an improvement in operating performance, by paying down debt, or through a permanent amendment to the covenants. In S&P's base case, it do not anticipate a substantial improvement in operating performance to a level that significantly improves cushions. However, cushions could improve significantly if the agricultural sector performance improves or the company can increase its pricing so that EBITDA is above S&P's base case expectations. VERSO PAPER: Moody's Assigns Prov. B2 Rating on $225MM Sr. Loan --------------------------------------------------------------- Moody's Investors Service assigned a provisional (P)B2 rating to Verso Paper Holdings LLC's proposed $225 million six-year senior secured term loan. Moody's also assigned Verso a provisional (P)B1 corporate family rating, as well as a speculative grade liquidity rating of SGL-2. The outlook for the ratings is stable. Assignments: Issuer: Verso Paper Holdings LLC Corporate Family Rating: Assigned (P)B1 Senior Secured Term Loan: Assigned (P)B2, LGD4 Speculative Grade Liquidity Rating: Assigned SGL-2 Outlook: Stable The proposed debt offering will be used to exit bankruptcy with the proceeds used to repay Verso and NewPage Corporation's (a subsidiary of Verso) existing debtor-in-possession financing and pay related fees and expenses. The provisional ratings are assigned pending the emergence from bankruptcy and the closing of the proposed exit financing. The company is expected to emerge from bankruptcy in the next couple of months. RATINGS RATIONALE Verso's (P)B1 CFR primarily reflects expected adjusted leverage of 4.5 times, Verso's leading market share and cost position in the North American coated paper industry, and good liquidity. Verso's rating is constrained by the secular decline in demand for about 80% of the paper grades that the company produces (used for commercial printing, magazines, catalogs, books, and commercial inserts). Execution risks in management's focus on cost reduction and the potential transformation to other grades are also considered, including the potential for additional capital expenditures. The $225 million secured term loan is rated (P)B2, one notch below the LGD model implied rating, given our view that size of the priority debt ($350 million ABL plus priority trade payables) is large relative to the size of the term loan, and the lack of balance sheet debt that ranks behind the term loan that could provide loss absorption in the event of a default. Verso has good liquidity (SGL-2). After exiting bankruptcy, Verso will have a proposed $350 million asset-based revolving credit facility (unrated) that matures in five years. Proceeds from the proposed revolver and term loan will be used to repay existing DIP financings and fees, leaving about $120 million of unused ABL availability. Moody's estimates Verso will generate about $30 million of positive free cash flow in the 12 months following emergence from bankruptcy, and will have minimal debt maturities. Covenant issues are not expected over the near term. The stable outlook considers Verso's good liquidity position and expectations that the coated paper sector will reduce supply to offset declining demand, allowing the company to maintain acceptable credit protection metrics through anticipated challenging industry conditions. A rating upgrade could result if (RCF-Capex)/TD exceeds 5% and EBITDA margins exceed 10% on a sustainable basis, while maintaining good liquidity. A rating downgrade could result if the company's liquidity position weakens or if (RCF-Capex)/TD drops below 3% on a sustainable basis. 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 North American coated paper producer. Upon emergence from Chapter 11, the pre-petition first lien creditors are expected to own a majority of the equity of the company. VIGNAHARA LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Vignahara, LLC 11999 East Freeway Houston, TX 77029 Case No.: 16-32261 Chapter 11 Petition Date: June 6, 2016 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Barbara J. Houser Debtor's Counsel: Russell W. Mills, Esq. HIERSCHE, HAYWARD, DRAKELEY & URBACH, P.C. 15303 Dallas Pkwy., Suite 700, LB 17 Addison, TX 75001 Tel: 972-701-7000 E-mail: rmills@hhdulaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Binal Patel, member. A list of the Debtor's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txnb16-32261.pdf VIGNAHARA LLC: Requests Access to Hotel Lenders' Cash Collateral ---------------------------------------------------------------- Vignahara, LLC, pursuant to section 363 of the Bankruptcy Code and Fed. R. Bankr. P. 4001(b), asks the U.S. Bankruptcy Court in Dallas, Tex., for authority to use cash collateral pledged to repay a loan from First Western SBLC, Inc., and grant First Western postpetition replacement liens as adequate protection. The Debtor says it currently owes First Western approximately $2.2 million. For the month of June, Vignahara projects $75,000 in cash receipts and cash disbursements totalling about $73,300. First Western is represented by: Charles F. Baum, Esq. Kenneth A. Hill, Esq. QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER 2001 Bryan Street, Suite 1800 Dallas, TX 75201 Telephone 214.871.2100 E-mail: cbaum@qslwm.com kenhill@qslwm.com Vignahara, LLC, operates a 112-room hotel located at 11999 East Freeway in Houston, Tex., which until recently was operated under a Red Roof Inn franchise. Vignahara employs approximately 19 persons on a full or part-time basis. Vignahara is represented by Russell W. Mills, Esq., at Hiersche, Hayward, Drake Ley & Urbach, P.C., in Addison, Tex. WESCO INT'L: S&P Rates $350MM Sr. Unsecured Notes Due 2024 'BB-' ---------------------------------------------------------------- S&P Global Ratings said that it assigned its 'BB-' issue-level rating and '5' recovery rating to WESCO Distribution Inc.'s proposed $350 million senior unsecured notes due 2024. The '5' recovery indicates S&P's expectation for modest (10%-30%, lower end of the range) recovery in the event of a payment default. At the same time, S&P affirmed all of its ratings, including S&P's 'BB' corporate credit ratings on WESCO International Inc. and its wholly owned subsidiary WESCO Distribution Inc. S&P's recovery ratings on the existing convertible senior debentures remain unchanged. The outlook remains stable. S&P expects to withdraw its ratings on the convertible debentures upon their redemption. "Our stable outlook on WESCO reflects our expectation that modestly improving commercial construction markets and relatively steady utility markets will partially offset weakness in WESCO's industrial end-markets and headwinds from a stronger dollar," said S&P Global Ratings credit analyst Svetlana Olsha. S&P could lower its rating on WESCO if its deteriorating operating performance causes its leverage to exceed 4x with limited prospects for improvement. S&P could also lower the rating if WESCO's leverage following future acquisitions exceeds 4x and does not quickly improve, either because of a challenging operating environment or because the acquisitions stretched the company's credit measures beyond S&P's expectations. S&P believes that an upgrade is unlikely over the next two years since WESCO's acquisition growth strategy and leverage tolerance are constraining factors. Over the long-term, however, S&P could raise its rating on WESCO if it chooses to pursue more conservative financial policies that S&P expects will help it maintain its leverage below 4x as it pursues acquisitions. WILLIAM THORNER: Wants Okay to Use Cash Collateral to Pay Taxes --------------------------------------------------------------- William Thorner, D.M.D., P.S.C., asks the U.S. Bankruptcy Court in Ashland, Ky., for permission to use its secured creditors' cash collateral to pay approximately $10,000 of 2014 and 2015 city withholding taxes and other operating expenses. The Debtor indicates that paying those taxes now will avoid substantial penalties and interest. General and cosmetic dental service provider William Thorner, D.M.D., P.S.C., filed a chapter 11 petition (Bankr. E.D. Ky. Case No. 15-10332) on Oct. 29, 2015, estimating assets and debts of less than $1 million, and is represented by Jamie L. Harris, Esq., at DelCotto Law Group PLLC. WME IMG: Moody's Affirms B2 CFR, Outlook Remains Stable ------------------------------------------------------- Moody's Investors Service affirmed WME IMG, LLC's (WME IMG) existing B2 corporate family rating following the proposed $250 million add on term loan. The first lien credit facility was affirmed at B1 and the second lien term loan was affirmed at Caa1. The outlook remains stable. The $250 million add on term loan, in addition to cash from the balance sheet and recent equity raised is expected to be used to make acquisitions or investments either inside or outside the restricted group. In either scenario the restricted group is expected to receive a minimum of $25 million in additional annual EBITDA going forward. The add-on term loan is expected to be fungible with the existing first lien term loan. A summary of Moody's rating actions are: WME IMG, LLC. Corporate Family Rating affirmed B2 Probability of Default Rating affirmed B2-PD $100 million senior secured revolver due 2019 affirmed B1 (LGD3) $2.1 billion (pro-forma for the add on) senior secured term loan B due 2021 affirmed B1 (LGD3) $450 million senior secured second lien term loan due 2022 affirmed Caa1 (LGD5) Outlook is stable The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as provided to Moody's. RATINGS RATIONALE WME IMG LLC's B2 CFR reflects the company's very high leverage of 7.1x as of Q1 2016 pro-forma for the transaction (including Moody's standard adjustments) which weakly positions the company at the existing ratings. An additional concern is the amount of significant add backs to EBITDA which has been a persistent issue since the company was rated in the beginning of 2014. Free cash flow is negatively impacted by distributions and tax reimbursements to equity holders which limit the amount available for debt repayment or cash funded acquisitions. The company does not own a significant amount of content or events and a material amount of the value of the company is determined by contracts and the intellectual capital of management and its employee base with limited tangible assets. In addition, the college division has underperformed expectations which has weighed on results. Moody's anticipate the company will be sensitive to cyclical consumer advertising spending. The rating receives support from the size of the company with global scale and diversified operations in client representation, event operations, distribution of media, sponsorship and licensing rights, as well as marketing and other services. Recent acquisitions completed in the past year are expected to be a source of growth and help to enhance and diversify its service offerings while increasing the amount of owned content by the company. WME IMG also benefits from the recent $355 million of equity raised which is expected to be used to make acquisitions or investments. In addition, the company has joint ventures and equity investments that although not currently material to earnings, have the potential to be a source of growth or liquidity if successfully monetized. Moody's also anticipates WME IMG will benefit from the increasing value of sports and original content worldwide as well as from revenue synergies as the organization utilizes existing relationships within television, film, sports, music, and advertising to further grow the business. The stable outlook reflects our expectation that leverage will decline modestly due to organic EBITDA growth in the low to mid single digits in addition to growth from acquisitions. However, Moody's notes that leverage is very high and that the ratings would come under negative pressure if leverage was unlikely to decline to under 7x during the next 12 months. WME IMG is expected to have adequate liquidity with in excess of $100 million of cash pro-forma for the transaction and a $100 million revolver which matures in May 2019 and is undrawn as of Q1 2016. Free cash flow is expected to be modest due to interest expense, capex, equity distributions, and contingent acquisition payments. The revolver is subject to a first lien leverage maintenance covenant of 5.9x when greater than 30% of the revolver is drawn. The first and second lien term loans are covenant lite. The company also has the ability to issue an incremental facility of $400 million in addition to the level permitted by a first lien incurrence ratio of 4.25x. Given the current high leverage level for the existing rating and the substantial amount of add backs to EBITDA, a rating upgrade is not expected in the near term. Leverage well below 5x on a sustained basis with good free cash flow, positive organic growth, and good liquidity could lead to an upgrade. Leverage levels above 7x due to a decline in EBITDA or debt funded transaction could lead to a downgrade. A weak liquidity position due to negative free cash flow or limited revolver availability could also lead to negative rating action. WME IMG, LLC. (WME IMG) is a diversified global company with operations in client representation, event operations, distribution of media, sponsorship and licensing rights, as well as marketing and other services. William Morris Endeavor Entertainment, LLC. bought IMG Worldwide Holdings, Inc. (IMG) in May 2014 for approximately $2.4 billion dollars with equity financing from Silver Lake Partners in the amount of $461 million. Reported revenue as of the LTM ending March 31, 2016, is approximately $2.4 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in December 2014. [*] Moody's Takes Neg. Rating Actions on 7 Payday and Title Lenders ------------------------------------------------------------------- Moody's Investors Service has taken negative rating actions on seven payday and title lenders, following the Consumer Financial Protection Bureau's (CFPB) announcement of proposed rules on payday, high-cost installment, and single-payment auto title loans on June 2, 2016. The corporate family and long term ratings of these two companies were downgraded by one notch, with a stable outlook: -- Creditcorp's corporate family and senior secured ratings were downgraded to Caa1 from B3. The outlook is stable. -- Enova International, Inc.'s corporate family and senior unsecured ratings were downgraded to Caa1 from B3. The outlook is stable. The corporate family and long term ratings of these four companies were downgraded by one notch, with a negative outlook: -- Ace Cash Express, Inc.'s corporate family and senior secured ratings were downgraded to Caa1 from B3. The outlook is negative. -- Curo Group Holdings Corp's (formerly known as Speedy Group Holdings Corp.) corporate family rating was downgraded to Caa1 from B3 and the senior unsecured rating was downgraded to Caa3 from Caa2. The senior secured rating of Curo Intermediate Holdings Corp. was also downgraded to Caa1 from B3. The outlook is negative. -- TMX Finance LLC's B3 corporate family and senior secured ratings were downgraded to Caa1 from B3. The outlook is negative. -- Community Choice Financial Inc.'s corporate family and senior secured ratings were downgraded to Caa2 from Caa1. The outlook is negative. In a related action, Moody's affirmed the Caa1 corporate family and senior secured ratings of CNG Holdings, Inc.'s and revised the outlook to negative from stable. RATINGS RATIONALE The rating actions follow the CFPB's announcement of proposed rules for payday, high-cost installment, and single-payment auto title loans on June 2, 2016. The CFPB's proposed rules are negative for these companies' credit standing. In payday lending, these rules will reduce the number of eligible borrowers, increase payday lenders' revenue reliance on lower-margin products, and increase their cost of doing business. Moody's expects further pressure on payday lenders' profitability from restructuring charges, targeted at improving their cost structure as they expand their product mix away from high-margin payday loans. Title lenders will need to transition business models from underwriting that is based primarily on collateral value to the borrower's ability to repay. The proposed rule change will likely reduce their origination volume and profitability. The proposed rules accelerate the companies' transition to underwriting-based lending for which most lenders' current business models and also capital structures are not well equipped, due to their significant amount of debt and lack of tangible equity. Moody's believes that the required business model changes make these companies' capital structures unsustainable which, in conjunction with their upcoming debt maturities, increases the risk of a distressed exchange, which Moody's equates to default. Creditcorp: The one-notch downgrade of Creditcorp's corporate family rating to Caa1, with a stable outlook, reflects a significant transition risk for the company given its heavy reliance on payday loans. The downgrade also reflects a high debt refinancing risk, with all of the company's senior notes maturing in July 2018. The stable outlook is supported by Creditcorp's much stronger capitalization relative to peers, with tangible equity representing 19% of its tangible assets at March 31, 2016. Creditcorp's tangible equity provides a buffer for unforeseen operating expenses and potentially higher-than-expected credit costs as the company transitions to the underwriting-based lending model. Enova International, Inc.: The one-notch downgrade of Enova's corporate family rating to Caa1, with a stable outlook, primarily reflects its weak capitalization, with a tangible equity deficit representing 9% of tangible assets at March 31, 2016. The absence of tangible equity presents risks as the company is becoming more reliant on traditional longer-term lending and continuing to expand its product mix away from short-term payday loans, which are less capital-intensive. Also reflected in Enova's current rating of Caa1 is its weakened profitability, which in Moody's view is unlikely to cure the equity deficit in the next four quarters. The stable look on Enova's ratings reflects Moody's view that Enova is better positioned to withstand the reduced profitability impact of the new rules than its branch-based peers, given its scalable online model with a lower fixed cost base, as well as its relatively low reliance on payday loans. Also supporting the stable outlook on Enova's ratings is the absence of debt maturities until 2021. Ace Cash Express, Inc.'s ("Ace"): The one-notch downgrade of Ace's corporate family rating to Caa1, with a negative outlook, primarily reflects the company's substantial deficit of tangible equity, representing 75% of tangible assets, which Moody's views as a significant risk in the company's transition to underwriting-based business model. Ace has moderate reliance on payday loans, indicating a meaningful transition risk. Ace also has a moderate debt refinancing risk, with no debt maturities in the next two years, but all of its senior notes mature in 2019. Curo Group Holdings Corp's: The one-notch downgrade of Curo's corporate family rating to Caa1, with a negative outlook, reflects the company's deficit of tangible equity, representing 30% of tangible assets, as well as significant refinancing risk, with all of its debt coming due by the end of 2018. The negative outlook also reflects the risk of the company's continuing transition to underwriting-based lending. TMX Finance LLC: The one-notch downgrade of TMX's corporate family and senior secured debt ratings to Caa1, with a negative outlook, reflects the company's significant transition risk given its focus on title loans offered as either single-payment or high-cost installment loans which are included in the scope of the CFPB's proposal. TMX will likely need to replace its 30-day single payment loan originations, which account for approximately 65% of its originations, with installment loans based on new underwriting requirements. In addition, TMX will be faced with state-specific challenges from the proposed rule. For example, in Georgia, Alabama, Tennessee and Mississippi, current laws restrict TMX's products to 30-day terms despite the fact that the proposed CFPB rule will likely prevent TMX from originating this product based on new underwriting requirements. Georgia and Alabama are TMX's first and third most significant portfolio concentrations which stood at 26.3% and 9.6% of loan receivables, respectively at year-end 2015. Also presenting a significant concern is TMX's significant debt refinancing risk, with all of its secured notes maturing in 2018. CNG Holdings, Inc.: The affirmation of CNG's Caa1 corporate family rating, with a negative outlook, reflects its weak profitability, high leverage, and negative shareholders' equity. Although CNG is ahead of many of its peers in reducing its exposure to payday loans, the shift to the lower-margin lending product, coupled with higher interest expense from incremental borrowings to support funding of these loans, has significantly pressured CNG's profitability. The negative outlook reflects the risk of the company's continuing transition to underwriting-based lending. Community Choice Financial Inc. ("CCFI"): The one-notch downgrade of CCFI's corporate family rating to Caa2, with a negative outlook, reflects its weak profitability, high leverage, constrained liquidity, and still substantial reliance on payday loans, which presents a significant transition risk. Over the past few months, CCFI has repurchased over $160 million of debt, which represented almost 40% of the original principal amount. Given a substantial loss the creditors realized on these debt repurchases, which were executed at an approximately 70% discount, Moody's viewed these transactions as distressed exchanges and default under its definitions. What Could Change the Ratings Up/Down Creditcorp: The ratings could be upgraded if Creditcorp demonstrates a successful transition to underwriting-based lending, as evidenced by solid and stable profitability with minimum amounts of restructuring and other unforeseen operating expenses, as well as sufficient liquidity and well-managed asset quality. For the ratings to be upgraded, Creditcorp will need to extend its debt maturity well in advance of the due date and expand its funding profile. The ratings could be downgraded if Creditcorp fails to proactively extend its debt maturity, if Moody's determines that the risk of a distressed exchange increases, as well as if the company's liquidity deteriorates, its profitability meaningfully weakens, and/or leverage increases. Enova: The ratings could be upgraded if Enova improves its profitability and reduces its leverage, while maintaining sufficient liquidity. For the ratings to be upgraded, Enova will also need to demonstrate a successful continued transition to underwriting-based lending, as evidenced by solid and stable profitability with minimum amounts of restructuring and other unforeseen operating expenses. Enova's ratings could be downgraded if the company's profitability and leverage meaningfully deteriorate, if its liquidity materially weakens, and if Moody's determines that the risk of a distressed exchange on its debt increases. Ace: Positive rating pressure is unlikely given the negative outlook. The outlook could return to stable if Ace demonstrates a successful transition to underwriting-based lending, as evidenced by solid and stable profitability with minimum amounts of restructuring and other unforeseen operating expenses, as well as sufficient liquidity and well-managed asset quality. Ace's ratings could be downgraded if the company's profitability and leverage meaningfully deteriorate, if its liquidity materially weakens, and if Moody's determines that the company is unlikely to refinance its 2019 debt maturity in its entirety and that the risk of a distressed exchange increases. Curo: Positive rating pressure is unlikely given the negative outlook. The outlook could return to stable if Curo extends its debt maturities well in advance of their due dates and demonstrates a successful transition to underwriting-based lending, as evidenced by solid and stable profitability with minimum amounts of restructuring and other unforeseen operating expenses with well-managed asset quality and sufficient liquidity. Curo's ratings could be downgraded if the company fails to extend its debt maturities well in advance of their due dates in 2017 and 2018, if Moody's determines that the risk of a distressed exchange increases, and if the company's profitability and leverage meaningfully deteriorate, and its liquidity materially weakens. TMX: Positive rating pressure is unlikely given the negative outlook. The outlook could change to stable from negative if TMX can demonstrate a successful transition to underwriting-based lending, as evidenced by solid and stable profitability with minimum amounts of restructuring and other unforeseen operating expenses, as well as sufficient liquidity and well-managed asset quality. TMX would also need to demonstrate a path to refinancing the 2018 debt maturity. TMX's ratings could be downgraded if the company's profitability and leverage meaningfully deteriorate, if its liquidity materially weakens, and if Moody's determines that the company is unlikely to refinance its 2018 debt maturity in its entirety and that the risk of a distressed exchange increases. CNG: Positive rating pressure is unlikely given the negative outlook. The outlook could return to stable if CNG demonstrates a successful continuing transition to underwriting-based lending, as evidenced by solid and stable profitability with minimum amounts of restructuring and other unforeseen operating expenses profitability, if its cures its equity deficit, and if its specialty finance business lessens its revenue reliance on Sears Holdings (Caa1 negative), which currently accounts for more than 50% of its revenue. Ratings could be downgraded if CNG's financial performance substantially deteriorates, its liquidity weakens, and if Moody's determines that the risk of a distressed exchange on the company's 2020 senior notes increases. CCFI: Positive rating pressure is unlikely given the negative outlook. The outlook could return to stable if CCFI lessens its significant reliance on payday loans, while demonstrating a successful transition to underwriting-based lending, as evidenced by solid and stable profitability with minimum amounts of restructuring and other unforeseen operating expenses. Ratings could be downgraded if CCFI's financial performance and liquidity continue to deteriorate. Ratings could be downgraded if Moody's determines that the risk of additional distressed exchange on the company's notes increases. The principal methodology used in these ratings was Finance Companies published in October 2015. ********* 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. 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