/raid1/www/Hosts/bankrupt/TCRLA_Public/110329.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, March 29, 2011, Vol. 12, No. 62
Headlines
A R G E N T I N A
ASOCIACION ARGENTINA: Creditors' Proofs of Debt Due June 7
CHER SA: Creditors' Proofs of Debt Due May 3
IEMPAR SA: Creditors' Proofs of Debt Due May 19
KILMERS SA: Creditors' Proofs of Debt Due May 26
B E R M U D A
KABUYE DEPOT: Creditors' Proofs of Debt Due April 6
KABUYE DEPOT: Members' Final Meeting Set for April 27
MAN-AP STRATUM: Creditors' Proofs of Debt Due April 6
MAN-AP STRATUM: Member to Receive Wind-Up Report on April 27
PREMIER RISK: Creditors' Proofs of Debt Due April 20
PREMIER RISK: Members' Final Meeting Set for April 27
PRISMA TRADING: Creditors' Proofs of Debt Due April 6
PRISMA TRADING: Member to Receive Wind-Up Report on April 27
B O L I V I A
TBS INTERNATIONAL: To Issue Non-Transferrable Subscription Rights
B R A Z I L
ALLY FINANCIAL: GM to Dump All Series A Preferred Shares
ALLY FINANCIAL: To Offer 40.87MM of Series A Preferred Securities
BANCO MULTISECTORIAL: Moody's Downgrades Issuer Rating to 'Ba2'
C H I L E
ACONCAGUA LIMITADA: Goes Bankrupt After Talks With Banks Fail
COMPANIA SUD: S&P Gives Negative Outlook; Affirms 'B' Rating
E L S A L V A D O R
* Moody's Downgrades Bond Rating on El Salvador to 'Ba2'
M E X I C O
AMERICAN APPAREL: Names M. Staff as Chief Business Devt. Officer
SATELITES MEXICANOS: Majority of Noteholders OK Chapter 11 Plan
P E R U
NII CAPITAL: Moody's Assigns 'B2' Rating to $500 Mil. Senior Notes
NII CAPITAL: S&P Assigns 'B+' Rating to $500 Mil. Senior Notes
P U E R T O R I C O
MORGANS HOTEL: Appoints New Directors and Senior Managers
MORGANS HOTEL: Ronald Burkle Discloses 29.2% Equity Stake
MORGANS HOTEL: David Hamamoto Discloses 10.7% Equity Stake
MORGANS HOTEL: Parag Vora Discloses 5.44% Equity Stake
T R I N I D A D & T O B A G O
CL FINANCIAL: Commission of Inquiry To Probe ICATT on Clico
X X X X X X X X
* Large Companies With Insolvent Balance Sheets
- - - - -
=================
A R G E N T I N A
=================
ASOCIACION ARGENTINA: Creditors' Proofs of Debt Due June 7
----------------------------------------------------------
Adolfo Horsmann, the court-appointed trustee for Asociacion
Argentina de Fitomedicina's bankruptcy proceedings, will be
verifying creditors' proofs of claim until June 7, 2011.
Mr. Horsmann will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 7 in Buenos Aires, with the assistance of Clerk
No. 14, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Adolfo Horsmann
Acevedo 246
Argentina
CHER SA: Creditors' Proofs of Debt Due May 3
--------------------------------------------
Liliana Maria Montoro, the court-appointed trustee for Cher SA's
bankruptcy proceedings, will be verifying creditors' proofs of
claim until May 3, 2011.
Ms. Montoro will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 20 in Buenos Aires, with the assistance of Clerk
No. 40, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Liliana Maria Montoro
Sarmiento 517
Argentina
IEMPAR SA: Creditors' Proofs of Debt Due May 19
-----------------------------------------------
Sergio Leonardo Novick, the court-appointed trustee for Iempar
SA's bankruptcy proceedings, will be verifying creditors' proofs
of claim until May 19, 2011.
Mr. Novick will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 9 in Buenos Aires, with the assistance of Clerk
No. 18, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections and
challenges that will be raised by the company and its creditors.
The Trustee can be reached at:
Sergio Leonardo Novick
Libertad 359
Argentina
KILMERS SA: Creditors' Proofs of Debt Due May 26
------------------------------------------------
Otto Reinaldo Munch, the court-appointed trustee for Kilmers SA's
reorganization proceedings, will be verifying creditors' proofs of
claim until May 26, 2011.
Mr. Munch will present the validated claims in court as individual
reports. The National Commercial Court of First Instance No. 7 in
Buenos Aires, with the assistance of Clerk No. 14, will determine
if the verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will be
raised by the company and its creditors.
Creditors will vote to ratify the completed settlement plan
during the assembly on March 7, 2012.
The Trustee can be reached at:
Otto Reinaldo Munch
Maipu 509
Argentina
=============
B E R M U D A
=============
KABUYE DEPOT: Creditors' Proofs of Debt Due April 6
---------------------------------------------------
The creditors of Kabuye Depot Holdings Company Limited are
required to file their proofs of debt by April 6, 2011, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on March 22, 2011.
The company's liquidator is:
Gary R. Pitman
Chevron House, 11 Church Street
Hamilton
Bermuda
KABUYE DEPOT: Members' Final Meeting Set for April 27
-----------------------------------------------------
The members of Kabuye Depot Holdings Company Limited will hold
their final meeting on April 27, 2011, at 9:30 a.m., to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company commenced wind-up proceedings on March 22, 2011.
The company's liquidator is:
Gary R. Pitman
Chevron House, 11 Church Street
Hamilton
Bermuda
MAN-AP STRATUM: Creditors' Proofs of Debt Due April 6
-----------------------------------------------------
The creditors of Man-AP Stratum Limited are required to file their
proofs of debt by April 6, 2011, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on March 18, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
MAN-AP STRATUM: Member to Receive Wind-Up Report on April 27
------------------------------------------------------------
The member of Man-AP Stratum Limited will receive on April 27,
2011, at 9:30 a.m., the liquidator's report on the company's wind-
up proceedings and property disposal.
The company commenced wind-up proceedings on March 18, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
PREMIER RISK: Creditors' Proofs of Debt Due April 20
----------------------------------------------------
The creditors of Premier Risk Insurance Company, Ltd. are required
to file their proofs of debt by April 20, 2011, to be included in
the company's dividend distribution.
The company commenced wind-up proceedings on March 16, 2011.
The company's liquidator is:
Stephen W. Pearce
The Armoury Building
37 Reid Street, Hamilton
Bermuda
PREMIER RISK: Members' Final Meeting Set for April 27
-----------------------------------------------------
The members of Premier Risk Insurance Company, Ltd. will hold
their general meeting on April 27, 2011, at 9:00 a.m., to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company commenced wind-up proceedings on March 16, 2011.
The company's liquidator is:
Stephen W. Pearce
The Armoury Building
37 Reid Street, Hamilton
Bermuda
PRISMA TRADING: Creditors' Proofs of Debt Due April 6
-----------------------------------------------------
The creditors of Prisma Trading (Series 2) Limited are required to
file their proofs of debt by April 6, 2011, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on March 21, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
PRISMA TRADING: Member to Receive Wind-Up Report on April 27
------------------------------------------------------------
The member of Prisma Trading (Series 2) Limited will receive on
April 27, 2011, at 9:30 a.m., the liquidator's report on the
company's wind-up proceedings and property disposal.
The company commenced wind-up proceedings on March 21, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
=============
B O L I V I A
=============
TBS INTERNATIONAL: To Issue Non-Transferrable Subscription Rights
-----------------------------------------------------------------
In an amended Form S-1 filing with the U.S. Securities and
Exchange Commission, TBS International plc said that it is
distributing to eligible holders of the Company's Class A and
Class B ordinary shares one non-transferable subscription right to
subscribe for the Company's Series A Preference Shares for each
ordinary share held at 5:00 p.m., New York City time, on Feb. 7,
2011, the record date for the rights offering. Each 100
subscription rights entitle a holder to subscribe for one Series A
Preference Share at a subscription price of $100 per Series A
Preference Share. Each Series A Preference Share initially will
be convertible into 25.0 Class A ordinary shares, subject to
adjustments to reflect semiannual increases in liquidation value
and stock splits and reclassifications. As of the record date for
the rights offering, 18,102,021 of the Company's Class A ordinary
shares and 13,200,305 of the Company's Class B ordinary shares
were outstanding. Holders of these shares on the record date are
eligible to receive the subscription rights.
The Company is conducting this rights offering in connection with
the restructuring of the Company's various credit facilities. As
a condition to the restructuring of the Company's credit
facilities, the Company's lenders have required three significant
shareholders who also are key members of the Company's management
to agree to provide up to $10.0 million of new equity in the form
of Series B Preference Shares. In partial satisfaction of this
requirement, on Jan. 28, 2011, these significant shareholders
purchased an aggregate of 30,000 of the Company's Series B
Preference Shares at $100 per share directly from the Company in a
private placement. In addition, they agreed to purchase up to an
additional aggregate of 70,000 of the Company's Series B
Preference Shares at $100 per share directly from the Company in
one or more private placements, but the number of additional
shares that they will be required to purchase from the Company
will be reduced, share for share, by the number of Series A
Preference Shares purchased by subscription rights holders in this
rights offering.
The aggregate purchase of Series A Preference Shares offered in
this rights offering, when aggregated with the purchase of Series
B Preference Shares by the Company's significant shareholders,
will be at least $10.0 million. If all of the rights offered are
exercised, the aggregate subscription price in the rights offering
would be $18,895,000, after taking into account that the Company's
significant shareholders each have agreed not to exercise the
subscription rights issued with respect to ordinary shares
beneficially owned by them.
The Company's Class A ordinary shares are quoted on the Nasdaq
Global Select Market under the symbol "TBSI." The closing price
of the Company's Class A ordinary shares on March 22, 2011, as
reported by Nasdaq, was $2.09 per share. The Company has not
listed, and do not expect to list for trading, the subscription
rights or the Company's Class B ordinary shares, Series A
Preference Shares or Series B Preference Shares.
About TBS International plc
Dublin, Ireland-based TBS International plc (NASDAQ: TBSI)
-- http://www.tbsship.com/-- provides worldwide shipping
solutions to a diverse client base of industrial shippers through
its Five Star Service: ocean transportation, projects, operations,
port services and strategic planning. The TBS shipping network
operates liner, parcel and dry bulk services, supported by a fleet
of multipurpose tweendeckers and handysize/handymax bulk carriers,
including specialized heavy-lift vessels and newbuild tonnage.
TBS has developed its franchise around key trade routes between
Latin America and China, Japan and South Korea, as well as select
ports in North America, Africa, the Caribbean and the Middle East.
The Company reported a net loss of $247.76 million on $411.83
million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of $67.04 million on $302.51 million of
total revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010, showed
$686.32 million in total assets, $389.45 million in total
liabilities and $296.87 million in total stockholders' equity.
PricewaterhouseCoopers LLP expressed substantial doubt about the
Company's ability to continue as a going concern. PwC believes
that the Company will not be in compliance with the financial
covenants under its credit facilities during 2011, which under the
agreements would make the debt callable. According to PwC, this
has created uncertainty regarding the Company's ability to fulfill
its financial commitments as they become due.
As reported in the TCR on Feb. 8, 2011, TBS International on
Jan. 31, 2011, announced that it had entered into amendments to
its credit facilities with all of its lenders, including AIG
Commercial Equipment, Commerzbank AG, Berenberg Bank and Credit
Suisse and syndicates led by Bank of America, N.A., The Royal Bank
of Scotland plc and DVB Group Merchant Bank (the "Credit
Facilities"). The amendments restructure the Company's debt
obligations by revising the principal repayment schedules under
the Credit Facilities, waiving any existing defaults, revising the
financial covenants, including covenants related to the Company's
consolidated leverage ratio, consolidated interest coverage ratio
and minimum cash balance, and modifying other terms of the Credit
Facilities.
The Company currently expects to be in compliance with all
financial covenants and other terms of the amended Credit
Facilities through maturity.
As a condition to the restructuring of the Company's credit
facilities, three significant shareholders who also are key
members of TBS' management agreed on Jan. 25, 2011, to provide up
to US$10 million of new equity in the form of Series B Preference
Shares and deposited funds in an escrow account to facilitate
satisfaction of this obligation. In partial satisfaction of this
obligation, on Jan. 28, 2011, these significant shareholders
purchased an aggregate of 30,000 of the Company's Series B
Preference Shares at US$100 per share directly from TBS in a
private placement.
===========
B R A Z I L
===========
ALLY FINANCIAL: GM to Dump All Series A Preferred Shares
--------------------------------------------------------
Joan E. Solsman, writing for Dow Jones Newswires, reports that
General Motors Co. on Tuesday announced its offering of all its
Series A preferred shares in lender Ally Financial Inc. priced at
a total of $1 billion as part of a public offering.
Dow Jones says the transaction is expected to close in the next
few days.
Dow Jones relates GM's move is part of Chief Financial Officer
Chris Liddell's strategy to have GM operate with little or no
debt. He said Tuesday that selling off the noncore asset was
another step to strengthen and simplify the auto maker's balance
sheet.
Dow Jones also notes that the sale comes ahead of a widely
expected initial public offering filing for Ally, which used to be
owned by GM. Earlier this month, people familiar with the matter
said Ally would be set to file its IPO documents with regulators
in the second quarter.
Ally received a $17.2 billion funding from the federal government
-- now 74% owner of Ally's common stock -- after it became a bank-
holding company in the financial crisis to qualify for the aid.
Before that, private-equity investors controlled the company after
GM.
Dow Jones relates that the sale will cause a book gain of $300
million for GM in the first quarter. GM will still hold 9.9% of
Ally's common stock after the sale.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company -- http://www.gm.com/-- is one of the world's largest
automakers. GM employs 205,000 people in every major region of
the world and does business in some 157 countries. GM and its
strategic partners produce cars and trucks in 31 countries, and
sell and service these vehicles through the following brands:
Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang,
Opel, Vauxhall and Wuling. GM's largest national market is China,
followed by the United States, Brazil, Germany, the United
Kingdom, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. is 60.8% owned by the U.S. Government. It was
formed to acquire the operations of General Motors Corporation
through a sale under 11 U.S.C. Sec. 363 following Old GM's
bankruptcy filing. The deal was closed on July 10, 2009, and Old
GM changed its name to Motors Liquidation Co. Old GM remains
subject to a pending Chapter 11 reorganization case before the
U.S. Bankruptcy Court for the Southern District of New York.
New GM has a 'BB-' corporate credit rating from Standard & Poor's
and a 'BB-' issuer default rating from Fitch.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is
also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is
providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP serve as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long serve as counsel regarding
supplier contract matters. FTI Consulting, Inc., serves as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Committee. Legal Analysis Systems, Inc., serves as asbestos
valuation analyst.
ALLY FINANCIAL: To Offer 40.87MM of Series A Preferred Securities
-----------------------------------------------------------------
Ally Financial Inc. filed with the U.S. Securities and Exchange
Commission a free writing prospectus relating to its offering of
40,870,560 shares of fixed rate/floating rate perpetual preferred
stock, series A at a liquidation amount of $25 per share. Joint
book-running managers of the Offering are Credit Suisse Securities
(USA) LLC, Deutsche Bank Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Barclays Capital Inc. A full-text
copy of the prospectus is available at http://is.gd/t2R1Ue
About Ally Financial
Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/
-- is one of the world's largest automotive financial services
companies. The Company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
The Company's balance sheet at Dec. 31, 2010, showed
$172.008 billion in total assets, $151.519 billion in total
liabilities, and total equity of $20.489 billion.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc.
to advise on a range of issues, including strategic alternatives
for the mortgage business and repayment of taxpayer funds.
* * *
In January 2011, Standard & Poor's Ratings Services raised its
rating on the preferred stock of Ally Financial Inc. (Ally;
B/Stable/C) to 'CC' from 'C'. The ratings firm noted that Ally
improved its liquidity position and alleviated some funding
pressure at its holding Company in recent months, making it easier
to meet obligations on its preferred stock. Nevertheless, the
Company faces significant debt maturities at its holding Company
in 2011 and 2012, which is reflected in the 'CC' rating.
In February 2011, Moody's Investors Service upgraded the issuer
and senior unsecured ratings of Ally Financial Inc. and its
supported subsidiaries to B1 from B3. Concurrently, Moody's
upgraded the senior secured (second lien) and senior unsecured
ratings of mortgage finance subsidiary Residential Capital LLC to
Caa3 and Ca, respectively, from C. The rating outlook for both
Ally and ResCap is stable.
Moody's said the Ally and ResCap upgrades reflect a decline in
ResCap's exposure to portfolio under-performance and mortgage
repurchase risks and an associated decrease in contingent risks to
Ally relating to its support of ResCap. Additional factors
supporting Ally's upgrade include its strengthened liquidity and
capital positions and prospects for continued profitability in its
core auto finance and mortgage businesses based upon positive
asset quality performance trends.
BANCO MULTISECTORIAL: Moody's Downgrades Issuer Rating to 'Ba2'
---------------------------------------------------------------
Moody's Investors Service downgraded the foreign currency issuer
rating of Banco Multisectorial de Inversiones to Ba2 from Ba1
following a similar action taken by Moody's on the foreign
currency government bond rating and country ceilings for El
Salvador. The rating has a stable outlook. For further detail,
refer to Moody's press release "Moody's downgrades El Salvador to
Ba2", dated March 24, 2011.
This rating was downgraded:
-- Foreign currency issuer rating: to Ba2, from Ba1, with stable
outlook
Rating Rationale
Moody's noted that BMI's rating is in line with Moody's Ba2
sovereign ratings and ceilings for El Salvador, its 100%
shareholder through the Central Bank of Reserves, with which BMI
is inextricably linked in terms of ownership, management control,
and funding. BMI's unique and legal ability to obtain repayment
for its loans to financial institutions by charging the borrowers'
Central Bank reserve accounts directly also reflect its sovereign
status.
BMI is El Salvador's sole development bank, established by special
legislative act in 1994 to support private sector economic
development and investment by lending through the banking system.
BMI reported total assets of US$594.3 million as of December 31,
2010, total shareholders' equity of US$202.8 million, and earnings
of US$5.4 million.
Moody's last action on BMI's rating was on November 16, 2009, when
Moody's downgraded BMI's issuer rating to Ba1 from Baa3 with a
stable outlook following Moody's similar action on the sovereign's
ratings.
=========
C H I L E
=========
ACONCAGUA LIMITADA: Goes Bankrupt After Talks With Banks Fail
-------------------------------------------------------------
The Estrategia reports that the 17th Civil Court of Santiago has
declared Aconcagua Limitada (Aconex) bankrupt. The report says
that the Company requested proceedings.
According to the Estrategia, main creditors Fernando Barros and
his son Alejandro are owed US$9.8 million. Freshfruitportal.com
relates that Aconex also owes US$7 million to BancoEstado, and
US$3.5 million to Agricola Campusano.
La Segunda, citing sources, states that Aconex tried to negotiate
a preventative agreement with banks to carry out an orderly
liquidation of assets, but the talks failed.
Founded in 1976, Aconcagua Limitada (Aconex) --
http://www.aconex.cl/?IDIdioma=2-- produces, packs and exports
fresh fruit of Chile.
COMPANIA SUD: S&P Gives Negative Outlook; Affirms 'B' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said that it revised the
outlook to negative from positive on its corporate credit rating
on Chilean container shipping company Compania Sud Americana de
Vapores. S&P also affirmed the long-term corporate credit rating
at 'B'.
The rating reflects S&P's view of CSAV's weak business risk
profile and aggressive financial risk profile. CSAV's exposure to
the volatile container-shipping markets and its high dependence on
chartered vessels drive the company's business profile. The
company's significant debt and volatile free cash flow underpin
its aggressive financial profile.
"The outlook revision incorporates recent industry trends and
S&P's updated estimates about CSAV's operating and financial
performance, based on new information," said Standard & Poor's
credit analyst Diego Ocampo.
Tariff rates continued to fall, reflecting harsh price competition
on main trades. This trend started in September 2010 and resulted
in a price decline of about 21% through February 2011 (based on
CSAV's estimates of its average price levels).
More recently, negative events have further hurt industry
fundamentals. Bunker costs soared 25%, in the period from
December 2010 to March 2011 (averages for the Bunker Index 380
CST), mainly due to the political unrest in the Middle East. In
addition, the recent Japanese earthquake has brought further
uncertainties to global trade flows and to tariff trends in the
short term, even though reconstruction efforts may foster activity
in the intermediate term.
On March 15, 2011, CSAV's board announced a capitalization program
aimed at enhancing the company's balance sheet and providing for
sufficient funding to continue enlarging its share of owned fleet,
currently at about 10%.
The negative outlook reflects S&P's view that market conditions,
which have a significant effect on CSAV's ability to improve cash
flows, are uncertain in the short term. S&P could lower the
rating if a persistently unfavorable market/bunker cost
environment keeps causing CSAV to report heavy cash burns, leading
cash reserves to decline further than S&P expect. Given its
current financial condition, CSAV's planned equity infusion of as
much as $500 million and the potential IPO of one of its main
operating subsidiaries are events to closely monitor. S&P will
factor in any potential cash inflow from the capitalization
program when and if it materializes.
Although the rating is subject to volatility, an upgrade is not
likely in the intermediate term. Such an event would require a
material strengthening of the company's medium-term financial
flexibility.
====================
E L S A L V A D O R
====================
* Moody's Downgrades Bond Rating on El Salvador to 'Ba2'
--------------------------------------------------------
Moody's Investors Service has downgraded the bond rating of the
government of El Salvador to Ba2 from Ba1. The outlook on the
bonds has been revised to stable from negative. In addition,
Moody's has unified El Salvador's foreign and local currency bond
and deposit ceilings at Baa3.
Ratings Rationale:
The downgrade reflects these considerations:
* El Salvador compares poorly with many of its Ba-rated peers in
terms of both the size and strength of the economy, as well as
government financial strength.
* Following a significant deterioration in 2009, government
financial strength continued to deteriorate in 2010, albeit at a
slowing pace, as a result of the country's continuing fiscal
deficit and sluggish economy. Government debt affordability
metrics -- in particular debt to revenues -- are no longer
consistent with a Ba1 rating in light of the country's limited
growth prospects.
* The increase in debt leaves El Salvador with less fiscal
flexibility to undertake countercyclical policies in response to
economic shocks. This is of particular concern given the
country's inability to utilize monetary policy, a consequence of
the dollarization of its economy.
* While the government's fiscal performance in 2010 exceeded
expectations, the government will be challenged to reverse the
recent deterioration of its financial strength in the near-to-
medium term given the extent of the revenue increases and
expenditure reductions required.
* If the government is unable to achieve its fiscal consolidation
targets, or economic growth falls below the government's
optimistic forecasts, the resulting increases in debt could
jeopardize fiscal sustainability.
The Ba2 rating incorporates El Salvador's low economic strength
which reflects the small size of the economy, its narrow focus,
modest growth prospects, and the country's low income level.
Additionally, the rating reflects vulnerabilities inherent in El
Salvador's close economic ties with the U.S., including its heavy
reliance on remittances from the U.S. that have been highlighted
by the recent recession.
The decline in government financial strength reflects the gradual
but persistent deterioration reported in both fiscal deficits and
government debt indicators during previous years as a result of
the recent recession, which raises concerns about the government's
ability to consolidate its financial position.
While the authorities' willingness and ability to successfully
implement stated policy objectives has historically set El
Salvador apart from many of its neighbors in Central America,
Moody's believes that the government will be challenged to
maintain this track record going forward.
The stable outlook considers that while the government's
financial strength is unlikely to experience significant further
deterioration in the near-to-medium term, it is also unlikely to
improve substantially -- even under scenarios that contemplate
fiscal consolidation in line with the government's program. That
said, the rating could be downgraded further if government efforts
prove insufficient to reduce the fiscal deficit leading to
increased concerns about medium-term debt sustainability. The
rating is unlikely to face upward pressure in the near-to-medium
term.
Previous Rating Action & Methodology Used
The last rating action on El Salvador was on November 15, 2009,
when the country's bond rating was downgraded to Ba1 from Baa3 and
the outlook was revised to negative.
===========
M E X I C O
===========
AMERICAN APPAREL: Names M. Staff as Chief Business Devt. Officer
----------------------------------------------------------------
American Apparel, Inc., appointed Martin Staff as chief business
development officer effective as of March 21, 2011.
Mr. Staff, age 60, has over 30 years of experience in the fashion
industry. Prior to joining the Company, Mr. Staff served as
president and chief executive officer of JA Apparel Corp. from
2003 to 2010. From 1998 to 2002 Mr. Staff served as president and
chief executive officer of Hugo Boss Fashions, Inc. Mr. Staff
also served as president and chief operating officer of Calvin
Klein Fashions Inc. from 1992 to 1998 and as senior vice president
of Retail Development and Licensing of Calvin Klein Inc. from 1987
to 1992. In addition, Mr. Staff served as vice president of Sales
and Marketing of Polo Ralph Lauren from 1980 to 1987. Mr. Staff
is a graduate of Dartmouth College, where he received a Bachelor
of Arts degree in English. There is no family relationship
between Mr. Staff and any of the Company's directors or executive
officers.
In connection with Mr. Staff's appointment as Chief Business
Development Officer, the Company and Mr. Staff entered into an
employment agreement pursuant to which Mr. Staff will serve as the
Company's Chief Business Development Officer for an initial term
of three years, commencing on March 21, 2011, which term will
automatically extend for successive one-year periods as of each
March 21 (beginning March 21, 2014) unless terminated by the
Company on at least 90 days written notice prior to the expiration
of the then-current term. The Employment Agreement provides that
Mr. Staff will receive a minimum base salary of $600,000 per year,
subject to increase based on the annual review of the Compensation
Committee. The Employment Agreement also provides that, subject
to Mr. Staff's continued employment, in each of 2011, 2012 and
2013, on the later of (i) June 1 of each such year and (ii) 45
days following the release of the Company's earnings in respect of
the prior fiscal year, Mr. Staff will be granted a restricted
stock award having a value of $600,000, calculated in accordance
with the Employment Agreement. Subject to Mr. Staff's continued
employment with the Company, each RSA will be made pursuant to the
terms of the Company's 2007 Performance Equity Plan and any
successor plan thereto, and will vest in full on March 21 in the
year following the year such RSA is granted.
Mr. Staff will also participate in the benefit plans that the
Company maintains for its executives and receive certain other
standard benefits.
If Mr. Staff is terminated without "cause" or if he resigns for
"good reason," the Company will pay Mr. Staff:
(a) his base salary accrued through the date of such
resignation or termination and, subject to Mr. Staff's
execution and delivery of a general release of all claims
against the Company and its affiliates, a cash payment of
$300,000 payable in equal installments over the six-month
period following such termination or resignation;
(b) any bonus earned but not yet paid in respect of any
calendar year preceding the year in which such termination
or resignation occurs;
(c) any unreimbursed expenses; and
(d) if such termination or resignation occurs on or following
March 21 of a calendar year in which an RSA is otherwise
scheduled to be granted and prior to the RSA grant for such
year, in lieu of any RSA for such year, a cash payment of
$50,000 for each full month of employment elapsed since
March 21 of such year.
In addition, in the event of that termination without "cause" or
resignation for "good reason," any unvested RSA will vest as to
one-twelfth of the shares of the Company's common stock subject to
such RSA for each full month of employment elapsed since the
immediately preceding March 21. In addition, in such case, Mr.
Staff and his eligible dependents will be entitled to receive,
until the earlier of the last day of the six-month period
immediately following such termination of employment or
resignation and the date Mr. Staff is entitled to comparable
benefits by a subsequent employer, continued participation in the
Company's medical, dental and insurance plans and arrangements.
If the Company elects not to extend Mr. Staff's term of
employment, then unless his employment has been earlier
terminated, Mr. Staff's employment will be deemed to terminate at
the end of the applicable term and he will not be entitled to any
of the amounts set forth in this paragraph. The provisions in the
Employment Agreement related to resignation for "good reason" will
only be effective in the event Dov Charney is no longer either the
Chief Executive Officer or Chairman of the Company.
If Mr. Staff's employment terminates by reason of his death or
disability, or if he is terminated for "cause" or if he resigns
without "good reason," the Company will pay him (a) his base
salary accrued through the date of such resignation or
termination; (b) any unreimbursed expenses; and (c) only in the
case of a termination because of his death or disability, any
bonus earned but not yet paid in respect of any calendar year
preceding the year in which such termination of employment occurs.
The Employment Agreement also provides that upon termination of
Mr. Staff's employment for any reason, he agrees to resign, as of
the date of such termination and to the extent applicable, from
the boards of directors of, and as an officer of, the Company and
any of the Company's affiliates and subsidiaries.
A full-text copy of the Employment Agreement is available for free
at http://is.gd/XwicED
In a Form 3 filing with the U.S. Securities and Exchange
Commission, Mr. Staff disclosed that he currently does not
beneficially own any securities of the Company.
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of Sept. 30, 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
The Company's balance sheet at Sept. 30, 2010, showed
$322.7 million in total assets, $231.3 million in total
liabilities, and stockholders' equity of $91.4 million.
American Apparel disclosed in its quarterly report on Form 10-Q
for the third quarter of 2010 that based upon results of
operations for the nine months ended Sept. 30, 2010, and through
the issuance of the financial statements and projected for the
remainder of 2010, the Company may not have sufficient liquidity
necessary to sustain operations for the next twelve months, and
that it is probable that beginning Jan. 31, 2011, the Company will
not be in compliance with the minimum Consolidated EBITDA covenant
under the $80,000,000 term loan with Lion Capital LLP.
"Noncompliance with covenants under the Lion Credit Agreement
would constitute an event of default under the BofA Credit
Agreement, which, if not waived, could block the Company from
making borrowings under the BofA Credit Agreement," the Company
said in the filing. "These factors, among others, raise
substantial doubt that the Company will be able to continue as a
going concern."
SATELITES MEXICANOS: Majority of Noteholders OK Chapter 11 Plan
---------------------------------------------------------------
Satelites Mexicanos, S.A. de C.V. announced on March 25, 2011,
that in connection with the implementation of a comprehensive
recapitalization to be effected through a prepackaged plan of
reorganization to be filed in the United States Bankruptcy Court
for the District of Delaware, holders representing more than 66
2/3% of the aggregate outstanding principal amount of the
Company's First Priority Senior Secured Notes due 2011 executed a
restructuring support agreement.
On Jan. 25, 2011, Satmex announced that it had reached an
agreement with the holders of more than two-thirds of the
outstanding principal amount of its 10 1/8% Second Priority Senior
Secured Notes due 2013 to support the Prepackaged Plan.
The Supporting First Priority Noteholders agreed, among other
things, to:
(i) waive or forbear from exercising their rights under
their respective First Priority Notes (and not to
direct the First Priority Indenture Trustee to exercise
any such rights) and, when solicited;
(ii) vote all First Priority Notes beneficially held by
them in favor of the Prepackaged Plan. Additionally,
the Supporting First Priority Noteholders agreed not
to opt out of the releases to be provided in the
Prepackaged Plan (or, in the event the releases are
structured to require an opt in, will opt into such
releases).
The Supporting First Priority Noteholders further agreed not to
vote for or support any alternative transaction and to consent to
certain adequate protection. The agreements of the Supporting
First Priority Noteholders are several and not joint and are
subject to certain conditions contained in the FPN Restructuring
Support Agreement.
A supplement to the Disclosure Statement for the Prepackaged Plan
regarding the FPN Restructuring Support Agreement and, separately,
certain other information concerning elections to be made under
the Prepackaged Plan by holders of Second Priority Notes, will be
delivered to creditors solicited to vote on the Prepackaged Plan
through their respective brokers and nominees. This supplement
has also been posted to the Company's Web site at
http://www.satmex.com/index1.php.
As announced on Feb. 28, 2011, Satmex has also entered into a
commitment letter with Jefferies Finance LLC providing for $325
million of committed senior secured exit financing, which may be
used, along with the proceeds of the previously-announced $96.25
million fully-backstopped rights offering of equity securities to
holders of Second Priority Notes, to, among other things, repay
the First Priority Notes as outlined in the Prepackaged Plan and
fund the timely completion of Satmex 8, a satellite scheduled to
be launched in 2012 to replace the Company's Satmex 5 satellite.
As part of the implementation of the Prepackaged Plan, Satmex and
its subsidiaries Alterna'TV Corporation and Alterna'TV
International Corporation, on March 8, 2011 commenced a
solicitation of votes on the Prepackaged Plan from holders of
record as of March 3, 2011, of the Company's First Priority Notes
and the Second Priority Notes. The solicitation period will
expire on April 4, 2011.
About Satmex SAB
Satelites Mexicanos, S.A. de C.V., (Satmex) is a Mexico-based
satellite service provider in Latin America. Satmex's fleet
offers hemispheric and regional coverage throughout the Americas.
Satmex's balance sheet as of June 30, 2010, showed US$438.29
million in assets, US$516.55 million in liabilities, and a
US$78.26 million shareholder's deficit.
Satmex had a net loss of US$6.12 million on US$53.06 million of
revenue for the six months ended June 30, 2010, compared with a
net loss of US$8.81 million on US$50.35 million of revenue for six
months ended June 30, 2009.
Satmex has a 'C' issuer rating and 'Ca' long term corporate family
rating, with negative outlook, from Moody's Investors Service.
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NII CAPITAL: Moody's Assigns 'B2' Rating to $500 Mil. Senior Notes
------------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to NII Capital
Corp.'s proposed new $500 million senior unsecured note offering.
Moody's has affirmed the B1 corporate family rating of NII
Holdings, Inc., parent of NII Capital. The outlook is stable.
Moody's has taken these rating actions:
Issuer: NII Capital Corp.
* $500 Million New Senior Unsecured Notes due 2021, Assigned B2
(LGD4 -- 67%)
These LGD Assessments have changed:
Issuer: NII Capital Corp*
* $800 Million Senior Unsecured Notes due 2016, B2 (LGD4 -- 67%
vs* LGD4 -- 61% prior)
* $500 Million Senior Unsecured Notes due 2019, B2 (LGD4 -- 67%
vs* LGD4 -- 61% prior)
These ratings are unchanged:
Issuer: NII Holdings, Inc*
-- Corporate Family Rating: B1
-- Probability of Default Rating: B1
-- Speculative Grade Liquidity: SGL 1
-- Outlook: Stable
NII Holding's B1 corporate family rating reflects the
company's modest leverage, small scale and the highly competitive
environment in which it operates as well as t!he capital intensity
of the industry. The B1 rating also recognizes the sovereign,
financial, operating and event risk inherent in NII's Latin
American target markets.
The rating is supported by NII's broad base of recurring revenues
which have grown steadily, even through a difficult economic
backdrop and pressure on service pricing. Additionally, the
company's exposure to the rapidly expanding markets in Mexico and
Brazil offer an opportunity to continue growth. NII's ratings are
further supported by its above average pricing and premium service
offering, which results in high margins despite small relative
market shares.
The LGD assessment of NII Capital's senior unsecured notes
reflects the significant liabilities, both debt and non-debt, held
at NII's operating companies and Moody's expectation that these
liabilities will increase materially in the future since they
provide a currency hedge in addition to offering attractive
economics. Although NII Capital is guaranteed by NII Holdings
(the parent), there is no subsidiary guarantee from the operating
companies, which limits the collateral to support the debt at NII
Capital. The senior unsecured notes at NII Capital do benefit
from loss protection offered by the unsecured convertible notes at
NII Holdings. Given NII's plans for growth and capital
requirements, Moody's anticipates that the $1.1 billion of 3.125%
convertible notes, which are scheduled to mature in June of 2012,
will be refinanced. If these convertible notes are replaced with
debt that is structurally more senior, the loss protection offered
to the NII Capital senior unsecured notes could disappear, placing
additional pressure on ratings of the unsecured debt of NII
Capital.
Moody's views NII's liquidity as good, and projects the company
will exit 2011 with over $2.0 billion in cash. NII does not
maintain a revolving credit facility, but the company does utilize
a wide array of local funding in the markets in which it operates.
The ratings could face upward pressure if the company is able to
sustain strong operating and financial trends while continuing to
address competitive positioning concerns regarding the company's
technology portfolio. Upwards rating pressure would also be
contingent on management's ongoing commitment to a conservative
capital structure. Specifically, if the company were likely to
sustain Debt to EBITDA below 3 times while generating free cash
flow as a percentage of debt in the mid-single digits, positive
ratings pressure could develop.
Moody's would likely lower the company's rating if its subscriber
growth stalls, churn increases or pronounced EBITDA margin erosion
develops due to competitors encroaching on the company's post-pay,
PTT customer base. In addition, if the company's credit metrics
and/or cash position were to dramatically deteriorate (i.e. Debt
to EBITDA trending towards 4.0 times) due to aggressive spectrum
or asset acquisitions, its ratings could be negatively impacted.
The last rating action Moody's has made on NII was on December 10,
2010, when the company's CFR was confirmed after conclusion of
Moody's review for possible upgrade.
With headquarters in Reston, Virginia, NII Holdings, Inc. ('NII')
is an international wireless operator with more than 9 million
largely post-pay, business subscribers that value the company's
PTT service offering built from Motorola Inc.'s ('Motorola') iDEN
technology. NII had approximately $5.6 billion in revenue for the
LTM period ended Q4'10 generated from a subscriber base ac! ross
Mexico, Brazil, Argentina, Peru, and Chile.
NII CAPITAL: S&P Assigns 'B+' Rating to $500 Mil. Senior Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B+'
issue-level rating and '4' recovery rating to NII Capital Corp.'s
proposed $500 million of senior notes due 2021. NII Capital Corp.
is a subsidiary of Reston, Va.-based wireless carrier NII Holdings
Inc. The '4' recovery rating indicates expectations for average
(30% to 50%) recovery in the event of payment default. The
company intends to use the net proceeds for general corporate
purposes, including expansion of its network, the potential
acquisition of spectrum licenses, the deployment of new network
technologies, or the repayment of debt. The notes are being
issued under rule 144A with registration rights.
S&P also lowered the issue-level rating on NII's existing
$800 million of senior notes due 2016 and $500 million of senior
notes due 2019 to 'B+' from 'BB-' and revised the recovery rating
on the notes to '4' from '2'. The lower issue-level rating
reflects diminished recovery prospects given S&P's expectations
for an increase in structurally senior debt at NII's operating
companies over the next few years to fund operations at those
entities.
At the same time, S&P affirmed all other ratings on NII, including
the 'B+' corporate credit rating. The outlook is stable.
Pro forma adjusted debt to EBITDA is about 2.9x, although S&P
expects leverage to rise to the high-3x area over the next couple
of years to support the buildout of the company's third-generation
(3G) network in Mexico and potential spectrum purchases and market
expansion in Brazil. Still, S&P believes that NII's credit
measures should remain supportive of the current 'B+' corporate
credit rating. Total funded debt is likely to be about
$3.8 billion on a pro forma basis.
"The ratings on NII continue to reflect competitive wireless
industry conditions and exposure to country risk in its key
markets -- including political, regulatory, economic, and foreign
exchange risks," said Standard & Poor's credit analyst Allyn
Arden. The ratings also reflect S&P's expectation for ongoing
net free cash deficits over the next few years because of the
company's aggressive expansion plans, as well as technology
risk associated with its dependence on Motorola Inc.'s unique
integrated digital enhanced network. Tempering factors include
NII's niche business focused on high average revenue per user and
low-churn corporate customers, some geographic diversity, strong
subscriber growth, currently moderate leverage for the rating
level, and adequate liquidity.
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MORGANS HOTEL: Appoints New Directors and Senior Managers
---------------------------------------------------------
Morgans Hotel Group Co. announced, on March 21, 2011, these Board
of Directors and senior management changes:
* Ron Burkle, Managing Partner at The Yucaipa Companies, LLC,
joined the Board, effective March 20, 2011, as the nominee
appointed by Yucaipa, the Company's largest stakeholder;
* David Hamamoto, Chairman of the Board and one of the
Company's largest stockholders, was appointed Executive
Chairman, effective March 20, 2011;
* Jason Taubman Kalisman, founding member of the Company's
largest stockholder, OTK Associates, joined the Company's
Board, effective March 22, 2011;
* Michael Gross, a member of the Board who previously served on
its Corporate Governance and Nominating Committee, was
appointed Chief Executive Officer, effective March 20, 2011;
* Daniel Flannery, who previously served with Marriott
International, Inc., was appointed Chief Operating Officer,
effective April 9, 2011; and
* Yoav Gery, who previously served with Marriott International,
Inc., was appointed Chief Development Officer, effective
March 23, 2011.
David T. Hamamoto (51) was appointed Executive Chairman, effective
as of March 20, 2011. He has been Chairman of the Company's Board
of Directors since February 2006. Mr. Hamamoto is the Chairman of
the Board of NorthStar Realty Finance Corp. and has served as
Chief Executive Officer and President of NorthStar Realty Finance
Corp. since October 2004. Mr. Hamamoto co-founded NorthStar
Capital Investment Corp. in July 1997, having co-founded and
previously been a partner and co-head of the Real Estate Principal
Investment Area at Goldman, Sachs & Co. In 1988, Mr. Hamamoto
initiated the effort to build a real estate principal investment
business at Goldman, Sachs & Co. under the auspices of the
Whitehall Funds. Mr. Hamamoto is an Honorary Trustee of the
Brearley School where he served as a Trustee from 1999 to 2007,
including as President from 2005 to 2007. He is the Co-Chair of
Stanford University Parents' Advisory Board and serves as a
Trustee of the Riverdale Country School. Mr. Hamamoto received a
Bachelor of Science from Stanford University and a Master of
Business Administration from the Wharton School of Business at the
University of Pennsylvania.
Michael Gross (35) was appointed Chief Executive Officer of the
Company, effective as of March 20, 2011. He has been a member of
the Company's Board of Directors since October 2009 as Yucaipa's
designee to the Board and served as a member of the Company's
Corporate Governance and Nominating Committee. He concentrated on
sourcing opportunities for various Yucaipa investment funds from
2008 until his appointment as the Company's Chief Executive
Officer, at which time discontinued his relationship with Yucaipa.
From 1998 to 2007, Mr. Gross focused on consumer and real estate
companies with various investment and research roles at Prentice
Capital Management, S.A.C. Capital Advisors, LLC, Lehman Brothers
Inc., Salomon SmithBarney and Granite Partners. Mr. Gross served
on the boards of Bluefly, Inc., an e-commerce fashion company, and
Ascendia Brands, Inc., a cosmetics and personal care products
company, from 2006 to 2007. Mr. Gross graduated with a Bachelor
of Science from Cornell University's School of Hotel
Administration.
Daniel R. Flannery (47) was appointed Chief Operating Officer of
the Company, effective as of April 9, 2011. Prior to joining the
Company, Mr. Flannery was the Vice President and Managing Director
for Marriott International, Inc., from January 2009 to April 2011,
where he led the company's efforts to develop and implement all
operating, brand, design, sales, marketing and public relations
strategies as well as recruiting and pre-opening efforts for the
Marriott brand EDITION's first hotels. Before that, Mr. Flannery
spent seven years at the Ritz-Carlton Hotel Company, a wholly-
owned subsidiary of Marriott International, as its General Manager
and Area Vice President for New York, New York and Boston,
Massachusetts from September 2002 to January 2009. Mr. Flannery
currently serves on the executive committee and board of directors
for the Tisch Center for Hospitality, Tourism and Sports
Management at New York University, the Dean's Advisory Council for
the Smith School of Business at the University of Maryland, and is
a distinguished lecturer for the New York University Brener
Lecture Series. He previously served on the board of directors
for The Hotel Association of New York City from 2007 to 2009. Mr.
Flannery received a Bachelor of Science from The Smith School of
Business at The University of Maryland.
Yoav Gery (42) was appointed Chief Development Officer of the
Company, effective as of March 23, 2011. Prior to joining the
Company, Mr. Gery served in various executive positions at
Marriott International, Inc., including Vice President of Lodging
Development from October 2005 to August 2007, Senior Vice
President of Lodging Development from August 2007 to May 2010, and
most recently as the Chief Development Officer for full service
hotels in North America from May 2010 to March 2011, where he led
the company's full service development group in the United States
and Canada. While at Marriott, Mr. Gery also helped launch the
EDITION brand for Marriott and oversaw the global development
efforts for that brand, including projects in the Americas,
Europe, the Middle East and Asia. Mr. Gery received an AB degree
from Duke University and a JD from George Washington University
National Law Center.
Ronald W. Burkle (58) joined the Company's Board of Directors on
March 20, 2011. Mr. Burkle is Managing Partner of The Yucaipa
Companies, a private investment firm, which he founded in 1986.
Mr. Burkle has served as Chairman of the Board and controlling
shareholder of numerous companies including Alliance
Entertainment, a distributor of music, movies and game software,
Golden State Foods, and supermarket chains Dominick's, Fred Meyer,
Ralph's and Food4Less. Mr. Burkle is Co-Chairman of the Burkle
Center for International Relations at UCLA, a trustee of the
Carter Center, the National Urban League and AIDS Project Los
Angeles and a member of the board of directors of the Frank Lloyd
Wright Building Conservancy. Mr. Burkle served as a director of
the following public companies: Occidental Petroleum Corp. from
1999 to 2010, Yahoo! Inc. from 2001 to 2010 and and KB Home
Corporation from 1995 to 2010. Mr. Burkle brings to the Board his
valuable business expertise in a wide variety of areas, as well as
his experience of serving on the boards of numerous public and
private companies. Mr. Burkle was appointed to the Board on
March 20, 2011 as a designee of the Yucaipa investors, pursuant to
certain arrangements the Company entered into with the Yucaipa
investors in October 2009 providing Yucaipa the right to designate
one of our directors. Previously, Mr. Gross had been the designee
of the Yucaipa investors, until he was appointed the Company's
Chief Executive Officer, at which time he discontinued his
relationship with Yucaipa. In September 2010, Mr. Burkle entered
into an extended stay arrangement with the Company's Sanderson
hotel, pursuant to which he makes monthly payments of
approximately GBPœ17,143 for use of a hotel suite.
Jason T. Kalisman, CFA (32), joined the Company's Board of
Directors on March 22, 2011. Mr. Kalisman is a Founding Member of
OTK Associates, LLC, which is the Company's largest stockholder.
Mr. Kalisman concurrently serves as a Vice President of GEM Realty
Capital, Inc., an integrated global real estate investment firm
focusing on publicly traded real estate securities and private-
market real estate assets, where he has been since 2009. Prior to
co-founding OTK Associates in 2008, Mr. Kalisman worked at The
Goldman Sachs Group, Inc., a global investment banking and
management firm, from 2001 to 2007. Mr. Kalisman received a
Bachelor of Arts in Economics from Harvard College and a Masters
of Business Administration from the Stanford Graduate School of
Business, and has earned the right to use the Chartered Financial
Analyst designation. Mr. Kalisman brings to the Board his
valuable expertise in the real estate and investment industries,
as well as in corporate finance and governance matters.
2011 Outperformance Awards
Also in connection with the appointments of the new executives,
the Company implemented an Outperformance Award Program, which is
a long-term incentive plan intended to provide the Company's
senior management with the ability to earn cash or equity awards
based on the Company's level of return to shareholders over a
three-year period. Pursuant to the Outperformance Award Program,
each of Messrs. Hamamoto, Gross, Flannery and Gery will receive,
within approximately the next 90 days, one of the following
awards, in each case reflecting the participant's right to receive
a participating percentage in an outperformance pool if the
Company's total return to shareholders increases by more than 30%
over a three-year period from March 20, 2011 to March 20, 2014:
(i) a new series of outperformance long-term incentive units,
subject to vesting and the achievement of certain performance
targets, or (ii) in the event the Company does not receive
confirmation that it can issue OPP LTIP Units under applicable
Nasdaq listing requirements, the right to receive cash, subject to
vesting and the achievement of certain performance targets. The
TRS will be calculated based on the average closing price of the
Company's common shares on the thirty trading days ending on the
Final Valuation Date. The baseline value of the Company's common
shares for purposes of determining the TRS will be $8.87, the
closing price of the Company's common shares on March 18, 2011.
The Participation Percentages granted to Messrs. Hamamoto, Gross,
Flannery and Gery were 35%, 35%, 10%, and 10%, respectively.
Each of the current participants' Awards vests on March 20, 2014,
contingent upon his continued employment, except for certain
accelerated vesting events. The aggregate dollar amount available
to all participants in the Program is equal to 10% of the amount
by which the Company's March 20, 2014 valuation exceeds 130% of
the Company's March 20, 2011 valuation and the dollar amount
payable to each participant is equal to such participant's
Participating Percentage in the Total Outperformance Pool. If a
participant receives his Award in the form of OPP LTIP Units, the
participant will either forfeit existing OPP LTIP Units or receive
additional OPP LTIP Units following the Final Valuation Date so
that the value of the vested OPP LTIP Units of the participant are
equivalent to the participant's Participation Amount. If a
participant receives his award as a right to receive cash, the
participant will be paid in cash or through the issuance of fully
vested equity, at the election of the Company, under one of the
Company's shareholder-approved, registered equity incentive plans
with a value equal to the Participation Amount, subject to future
shareholder approval of the additional shares available for
issuance under the equity incentive plans. Participants will
forfeit any unvested Awards upon termination of employment;
provided, however, that in the event a participant's employment
terminates because of death or disability, or employment is
terminated by the Company without Cause or by the participant for
Good Reason, as such terms are defined in the participant's
employment agreements, the participant will not forfeit the Award
and will receive, following the Final Valuation Date, a
Participation Amount reflecting his partial service. If the Final
Valuation Date is accelerated by reason of certain Change of
Control transactions, each participant whose Award has not
previously been forfeited will receive a Participation Amount upon
the Change of Control reflecting the amount of time since the
effective date of the program, which was March 20, 2011.
OPP LTIP Units represent a special class of membership interest in
the Company's operating company, Morgans Group LLC, which are
structured as profits interests for federal income tax purposes.
Conditioned upon minimum allocations to the capital accounts of
the OPP LTIP Units for federal income tax purposes, each vested
OPP LTIP Unit may be converted, at the election of the holder,
into one Membership Unit in the Operating Company. During the
six-month period following the Final Valuation Date, the Operating
Company may redeem some or all of the vested OPP LTIP Units at a
price equal to the common share price on the Final Valuation Date.
From and after the one-year anniversary of the Final Valuation
Date, for a period of six months, participants will have the right
to cause the Operating Company to redeem some or all of the vested
OPP LTIP Units at a price equal to the greater of the common share
price at the Final Valuation Date or the then current common share
price. Beginning 18 months after the Final Valuation Date, each
of these OPP LTIP Units is redeemable at the election of the
holder for: (1) cash equal to the then fair market value of one
share of the Company's common stock, or (2) at the option of the
Company, one share of Common Stock, in the event the Company then
has shares available for that purpose under its shareholder-
approved equity incentive plans. Participants are entitled to
receive distributions on their vested OPP LTIP Units if any
distributions are paid on the Company's common stock following the
Final Valuation Date.
2011 Executive Promoted Interest Bonus Pool
In connection with the appointments of the new executives, the
Company implemented the 2011 Executive Promoted Interest Bonus
Pool, which is a long-term incentive plan intended to provide the
Company's senior management with the ability to participate in the
growth of the Company's management business, provided the
Company's level of return to shareholders meets specified hurdles.
The 2011 Executive Promoted Interest Bonus Pool, effective
March 20, 2011, provides that until the earlier of (i) March 20,
2014 and (ii) termination of employment with respect to a grantee,
certain promoted interests that the Company has the right to
receive as an equity promote or similar contractual right from
owners of Company managed hotels will be contributed to the bonus
pool, in the form of a limited liability company. An Eligible
Promoted Interest is an interest in a hotel investment entity or
similar contractual right that represents a right to participate
in profits, losses and gains in excess of capital contributions
that is acquired in a transaction approved by the Company's
investment committee in accordance with pre-established standards
or by an independent committee of the Board; Eligible Promote
Interests do not include incentive management fees. As of the
date of this report, Promote Pool LLC has not been organized and
there were no Eligible Promoted Interests to be contributed to
Promote Pool LLC.
Each of Messrs. Hamamoto, Gross, Flannery and Gery, has been
granted the right to receive an employee participation interest in
Promote Pool LLC of 35%, 35%, 10% and 10%, respectively. The
Company's Operating Company will hold the managing member interest
in Promote Pool LLC. At least 50% in each series of Eligible
Promoted Interests will be allocated to the managing member's
interest; the remaining Eligible Promoted Interests in each series
will be allocated to the employee Participation Interests. Each
employee's Participation Interest will be represented by a series
of units, with each series specific to an individual Eligible
Promoted Interest in one or more hotels. Each series of Employee
Units generally will vest (i) 1/3 upon the later of the third
anniversary of the effective date and the Company's entering into
a transaction that provides for the applicable Eligible Promoted
Interest, (ii) 1/3 upon the later of the third anniversary of the
effective date and the hotel related to the applicable Eligible
Promoted Interest becoming operational, and (iii) 1/3 upon the
later of the third anniversary of the effective date and a sale
event for the applicable hotel or Eligible Promoted Interest.
Grantees will forfeit any unvested Employee Units upon termination
of employment; provided, however, that in the event a grantee's
employment terminates because of death or disability, or is
terminated by the Company without Cause or by the grantee for Good
Reason.
Distributions from Promote Pool LLC to participants will made upon
receipt of proceeds in respect of Eligible Promote Interests;
provided, however, that such distributions are conditioned upon
(i) the Company's achievement of a 9% compounded annual growth
return from March 20, 2011 until the date cash payments are
received by Promote Pool LLC and (ii) the Company continues to
manage the applicable hotel property immediately following the
event giving rise to the applicable proceeds. The Company
maintains the right to exercise all rights in the Eligible
Promoted Interests, such as voting and other consent rights, and
the right to purchase Eligible Promoted Interests from Promote
Pool LLC at their fair market value at any time.
David Hamamoto Employment Agreement
On March 20, 2011, the Company entered into an employment
agreement, effective as of such date, with David Hamamoto in
connection with his appointment as Executive Chairman. The
employment agreement provides for the following, among other,
terms:
* an initial three-year contract term, which the Company may
offer to renew for a six month period with 75 days notice
prior to the end of the initial term on the same terms as
applicable at the end of the initial term;
* no minimum base salary, provided, however, that the Company
may elect to provide, at its discretion, a base salary of
$375,000 after the first year in lieu of the annual award of
LTIP units described below;
* if the Company elects to provide an annual base salary, it
will also be required to provide an annual cash bonus with a
target payout of 100% of the annual base salary, with actual
payouts ranging from 50% to 150%, provided that the Company
may elect to pay any bonus in excess of 100% in the form of
equity;
* a grant of options to purchase 600,000 shares of the
Company's common stock, at an exercise price equal to the
fair market value on the grant date, vesting pro rata over a
3-year period on each anniversary date of grant, pursuant to
the Amended and Restated 2007 Omnibus Incentive Plan, as
amended;
* a grant of 75,000 long-term incentive plan units vesting pro
rata on a monthly basis over the next 12 months beginning on
the first monthly anniversary of the date of grant, pursuant
to the 2007 Plan, and the right to receive an additional
grant of LTIP units valued at $675,000 on each anniversary of
the grant date; provided, however, that in lieu of the
additional grants of LTIP units, the Company may elect, in
its discretion, to pay an annual base salary and annual
bonus;
* a 35% Participation Interest in Promote Pool LLC;
* a 35% Participating Percentage in the Total Outperformance
Pool;
* no obligation to resign from the Board in the event of
termination of employment, other than for Cause; and
* medical and other group welfare plan coverage and fringe
benefits provided to our executive employees generally.
In addition, Mr. Hamamoto's employment agreement provides for
certain payments to be made upon his termination. Mr. Hamamoto is
also subject to certain non-competition and standstill provisions
for six months following termination of his employment and to
certain non-solicitation provisions for 12 months following
termination of his employment. He also may not pursue any
prospective deals in the Company's deal pipeline for 12 months
following termination of his employment.
Mr. Hamamoto's employment agreement provides that Mr. Hamamoto is
committed to devote a sufficient portion of his business time,
attention and energies to performance of his duties under his
employment agreement with the Company. The Company acknowledges,
however, that Mr. Hamamoto is also committed to devote at least a
majority of his business time, attention and energies to
performance of his duties under his employment agreement with
NorthStar Realty Finance Corp. and as a director thereof, and
agrees that Mr. Hamamoto's doing so will not constitute "Cause" or
a violation of his employment agreement with the Company.
Furthermore, the Company has agreed to reimburse Mr. Hamamoto for
his reasonable legal fees and expenses incurred in connection with
the negotiation of the employment agreement.
Michael Gross Employment Agreement
On March 20, 2011, the Company entered into an employment
agreement, effective as of such date, with Michael Gross in
connection with his appointment as Chief Executive Officer. The
employment agreement provides for the following terms:
* an initial three-year contract term, which the Company may
offer to renew for a six month period with 75 days notice
prior to the end of the initial term on the same terms as
applicable at the end of the initial term;
* a minimum base salary of $750,000 per year, subject to review
and increase annually at the discretion of the Board or
Compensation Committee and in accordance with standard
practice of the Company;
* eligibility to receive an annual cash bonus for each of 2011,
2012 and 2013 with a target payout of 100% of annualized base
salary, with any excess over 100% payable in equity, at the
discretion of the Compensation Committee; provided that (i)
for 2011, the bonus will be prorated for the partial year,
with 50% of the target bonus guaranteed, and the remaining
50% dependent on performance (40% based on EBITDA, 10% on
RevPAR Index) and (ii) for 2012 and 2013, the target payout
will range from 50% to 150% of base salary, based on
individual performance;
* a grant of options to purchase 300,000 shares of the
Company's common stock, at an exercise price equal to the
fair market value on the grant date, vesting pro rata over a
3-year period on each anniversary date of grant, pursuant to
the 2007 Plan;
* a grant of 125,000 LTIPs, vesting pro rata over a 3-year
period on each anniversary date of grant, pursuant to the
2007 Plan;
* a 35% Participation Interest in Promote Pool LLC;
* a 35% Participating Percentage in the Total Outperformance
Pool;
* no obligation to resign from the Board in the event of
termination of employment, other than for Cause; and
* medical and other group welfare plan coverage and fringe
benefits provided to our executive employees generally.
In addition, Mr. Gross's employment agreement provides for certain
payments to be made upon his termination. Mr. Gross is also
subject to certain non-competition and standstill provisions for
six months following termination of his employment and to certain
non-solicitation provisions for 12 months following termination of
his employment. He also may not pursue any prospective deals in
the Company's deal pipeline for 12 months following termination of
his employment.
Furthermore, the Company has agreed to reimburse Mr. Gross for his
reasonable legal fees and expenses incurred in connection with the
negotiation of the employment agreement.
Daniel Flannery Employment Agreement;
Yoav Gery Employment Agreement
On March 20, 2011, the Company entered into an employment
agreement, effective as of April 9, 2011, with Daniel Flannery in
connection with his appointment as Chief Operating Officer, and an
employment agreement, effective as of March 23, 2011, with Yoav
Gery in connection with his appointment as Chief Development
Officer. Each of these employment agreements provide for the
following terms:
* an initial three-year contract term, which the Company may
offer to renew for a six month period with 75 days notice
prior to the end of the initial term on the same terms as
applicable at the end of the initial term;
* a base salary of $600,000 per annum, subject to review and
increase annually at the discretion of the Board or
Compensation Committee, and increasing in accordance with
standard practice of the Company;
* eligibility to receive an annual cash bonus for each of 2011,
2012 and 2013 with a target payout of 100% of annualized base
salary, with any excess over 100% payable in equity, at the
discretion of the Compensation Committee; provided that (i)
for 2011, the bonus will be prorated for the partial year,
with 50% of the target bonus guaranteed, and the remaining
50% dependent on performance (40% based on EBITDA, 10% on
RevPAR Index), and (ii) for 2012 and 2013, the target payout
will range from 50% to 150% of base salary, based on
individual performance;
* a grant of options to purchase 200,000 shares of the
Company's common stock, at an exercise price equal to the
fair market value on the grant date, vesting pro rata over a
3-year period on each anniversary date of grant, as an
inducement grant under the Nasdaq rules;
* a grant of shares of restricted stock units (43,000 shares
for Mr. Flannery and 65,250 for Mr. Gery), vesting pro rata
over a 3-year period on each anniversary date of grant, as an
inducement grant under the Nasdaq rules;
* a 10% Participation Interest in Promote Pool LLC;
* a 10% Participating Percentage in the Total Outperformance
Pool; and
* medical and other group welfare plan coverage and fringe
benefits provided to the Company's executive employees
generally.
In addition, the employment agreements provide for certain
payments to be made upon the executive's termination. Each of
messrs. Flannery and Gery are also subject to certain non-
competition and standstill provisions for six months following
termination of his employment and to certain non-solicitation
provisions for 12 months following termination of his employment.
He also may not pursue any prospective deals in the Company's deal
pipeline for 12 months following termination of his employment.
Furthermore, the Company has agreed to reimburse each of Messrs.
Flannery and Gery for up to $20,000 of relocation expenses and his
reasonable legal fees and expenses incurred in connection with the
entering into of the employment agreement.
Potential Payments Upon Termination
Pursuant to the employment agreement, each of the newly appointed
executives is entitled to certain payments or terms upon
termination or change in control. All payments and terms, other
than the payment of accrued base salary are conditioned upon the
execution of a release by the executive in connection with the
termination of his employment.
Departures of Fred Kleisner and Marc Gordon;
Severance Agreement
On March 21, 2011 the Company announced that Fred Kleisner, whose
employment agreement expires on March 31, 2011, stepped down as
Chief Executive Officer and resigned from the Board effective
March 20, 2011.
On March 21, 2011, the Company also announced that Marc Gordon,
whose employment agreement with the Company is scheduled to end on
April 1, is leaving the Company to pursue other interests. Mr.
Gordon, who was appointed President in October 2009, had been
employed by the Company since its initial public offering and had
been involved with its predecessors since 1997. In connection
with his departure, the Company entered into a separation
agreement and release with Mr. Gordon on March 20, 2011. Pursuant
to the Separation Agreement, the Company agreed to pay Mr. Gordon
(1) a lump sum severance payment of $2,069,000, (2) monthly
consulting payments of $66,666 per month through December 2011,
and (3) a lump sum payment of $300,000 in January 2012. The
Company also agreed that all of Mr. Gordon's equity awards would
vest and that he will be eligible to elect continuation coverage
under COBRA. In consideration of the monthly consulting payments,
Mr. Gordon agreed to make himself available to provide consulting
services to the Company through December 2011. In addition, Mr.
Gordon agreed to certain non-competition and standstill provisions
that are effective for nine months following the date of the
Separation Agreement and certain non-solicitation provisions that
are effective through March 31, 2012. Mr. Gordon resigned from
the Company's Board, effective March 20, 2011.
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $83.64 million on
$236.37 million of total revenues for the year ended
Dec. 31, 2010, compared with a net loss of $101.60 million
on $225.05 million of total revenues during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed
$714.77 million in total assets, $716.58 million in total
liabilities, a $12.72 million shareholders' deficit and $10.92
million noncontrolling interest.
MORGANS HOTEL: Ronald Burkle Discloses 29.2% Equity Stake
---------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Ronald W. Burkle and his affiliates disclosed
that they beneficially own 12,500,000 shares of common stock of
Morgans Hotel Group Co. representing 29.2% of shares outstanding,
based upon the 30,311,503 shares of Common Stock outstanding as of
March 15, 2011, as disclosed by the Company in its Annual Report
on Form 10-K for the year ended Dec. 31, 2010. The report says
this does not reflect any reduction for the effect of the
mandatory cashless exercise as the amount of the reduction is not
determinable until the time of exercise.
A full-text copy of the filing is available for free at:
http://is.gd/1d4rLF
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $83.64 million on
$236.37 million of total revenues for the year ended
Dec. 31, 2010, compared with a net loss of $101.60 million
on $225.05 million of total revenues during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed
$714.77 million in total assets, $716.58 million in total
liabilities, a $12.72 million shareholders' deficit and
$10.92 million noncontrolling interest.
MORGANS HOTEL: David Hamamoto Discloses 10.7% Equity Stake
----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, David T. Hamamoto disclosed that he
beneficially owns 3,315,402 shares of common stock of Morgans
Hotel Group Co. representing 10.7% of the shares outstanding. As
of March 15, 2011, the Company had 30,311,503 shares of common
stock issued and outstanding, par value $0.01 per share.
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $83.64 million on
$236.37 million of total revenues for the year ended
Dec. 31, 2010, compared with a net loss of $101.60 million
on $225.05 million of total revenues during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed
$714.77 million in total assets, $716.58 million in total
liabilities, a $12.72 million shareholders' deficit and
$10.92 million noncontrolling interest.
MORGANS HOTEL: Parag Vora Discloses 5.44% Equity Stake
------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Parag Vora and his affiliates disclosed that
they beneficially own 1,650,000 shares of common stock of Morgans
Hotel Group Co. representing 5.44% of the shares outstanding.
As of March 15, 2011, the Company had 30,311,503 shares of common
stock issued and outstanding, par value $0.01 per share.
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $83.64 million on $236.37
million of total revenues for the year ended Dec. 31, 2010,
compared with a net loss of $101.60 million on $225.05 million of
total revenues during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed $714.77
million in total assets, $716.58 million in total
liabilities, a $12.72 million shareholders' deficit and
$10.92 million noncontrolling interest.
===============================
T R I N I D A D & T O B A G O
===============================
CL FINANCIAL: Commission of Inquiry To Probe ICATT on Clico
-----------------------------------------------------------
The Commission of Inquiry will look at the Institute of Chartered
Accountants of Trinidad and Tobago's involvement in the collapse
of Colonial Life Insurance Company (Trinidad) Limited (Clico),
among others, Trinidad & Tobago's Newsday reports. According to
the report, Commission of Inquiry chairman Sir Anthony Coleman has
asked representatives of the ICATT to appear before the
Commission.
Some ICATT members worked at these companies while others audited
their accounts, but this has not had a negative effect on the
reputation of these members, the Newsday relates, citing ICATT
president Anthony Pierre. The report quoted Mr. Pierre as saying,
"We are a party to the Commission of Inquiry which basically means
our institute would be one of the bodies that would be looked at
for our role in the regulatory framework, as it relates to
accountants and those who were responsible for the accounting of
these failed institutions."
CL Financial Limited is a privately held conglomerate in Trinidad
and Tobago. Founded as an insurance company by Cyril Duprey,
Colonial Life Insurance Company was expanded into a diversified
company by his nephew, Lawrence Duprey. CL Financial is now one
of the largest local conglomerates in the region, encompassing
over 65 companies in 32 countries worldwide with total assets
standing at roughly US$100 billion.
* * *
As reported in the Troubled Company Reporter-Latin America on
August 10, 2009, A.M. Best Co. downgraded the financial strength
rating to C (Weak) from B (Fair) and issuer credit rating to "ccc"
from "bb" of Colonial Life Insurance Company (Trinidad) Limited
(CLICO) (Trinidad & Tobago). The ratings remain under review with
negative implications. CLICO is an insurance member company of CL
Financial Limited (CL Financial), a diversified holding company
based in Trinidad & Tobago.
According to a TCR-LA report on Feb. 20, 2009, citing Trinidad and
Tobago Express, Tobago President George Maxwell Richards signed
bailout bills for CL Financial, giving the government the
authority to control the company's unit, Colonial Life Insurance
Company, and giving the central bank extensive powers to treat CL
Financial's collapse and the consequent systemic crisis.
===============
X X X X X X X X
===============
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Total Shareholders
Assets Equity
Company Ticker (US$MM) (US$MM)
------- ------ ------------ -------
ARGENTINA
IMPSAT FIBER-$US IMPTD AR 535007008 -17165000
IMPSAT FIBER-C/E IMPTC AR 535007008 -17165000
IMPSAT FIBER NET IMPTQ US 535007008 -17165000
IMPSAT FIBER NET 330902Q GR 535007008 -17165000
IMPSAT FIBER-BLK IMPTB AR 535007008 -17165000
IMPSAT FIBER-CED IMPT AR 535007008 -17165000
IMPSAT FIBER NET XIMPT SM 535007008 -17165000
SOC COMERCIAL PL CVVIF US 138884129 -2.53E+08
SOC COMERCIAL PL CADN SW 138884129 -2.53E+08
COMERCIAL PL-ADR SCPDS LI 138884129 -2.53E+08
SOC COMERCIAL PL CAD IX 138884129 -2.53E+08
COMERCIAL PLAT-$ COMED AR 138884129 -2.53E+08
SOC COMERCIAL PL CADN EO 138884129 -2.53E+08
COMERCIAL PLA-BL COMEB AR 138884129 -2.53E+08
COMERCIAL PL-C/E COMEC AR 138884129 -2.53E+08
SOC COMERCIAL PL COME AR 138884129 -2.53E+08
SOC COMERCIAL PL SCDPF US 138884129 -2.53E+08
SNIAFA SA-B SNIA5 AR 11229696 -2670545
SNIAFA SA-B SDAGF US 11229696 -2670545
SNIAFA SA SNIA AR 11229696 -2670545
BRAZIL
VARIG SA-PREF VARGPN BZ 966298026 -4.7E+09
VARIG SA-PREF VAGV4 BZ 966298026 -4.7E+09
VARIG SA VARGON BZ 966298026 -4.7E+09
VARIG SA VAGV3 BZ 966298026 -4.7E+09
AGRENCO LTD-BDR AGEN11 BZ 542862484 -2.98E+08
AGRENCO LTD AGRE LX 542862484 -2.98E+08
LAEP-BDR MILK11 BZ 428368527 -1.18E+08
LAEP INVESTMENTS LEAP LX 428368527 -1.18E+08
HABITASUL HSULON BZ 408678629 -108615.4
HABITASUL-PREF A HBTS5 BZ 408678629 -108615.4
HABITASUL-PREF B HSULBN BZ 408678629 -108615.4
HABITASUL-PREF B HBTS6 BZ 408678629 -108615.4
HABITASUL-PREF A HSULAN BZ 408678629 -108615.4
HABITASUL HBTS3 BZ 408678629 -108615.4
CIA PETROLIFERA MRLM3 BZ 377602195 -3014292
CIA PETROLIF-PRF MRLM4B BZ 377602195 -3014292
CIA PETROLIF-PRF 1CPMPN BZ 377602195 -3014292
CIA PETROLIFERA MRLM3B BZ 377602195 -3014292
CIA PETROLIF-PRF MRLM4 BZ 377602195 -3014292
CIA PETROLIFERA 1CPMON BZ 377602195 -3014292
BOMBRIL-RGTS PRE BOBR2 BZ 316331265 -1.24E+08
BOMBRIL BMBBF US 316331265 -1.24E+08
BOMBRIL BOBR3 BZ 316331265 -1.24E+08
BOMBRIL-PREF BOBR4 BZ 316331265 -1.24E+08
BOMBRIL CIRIO-PF BOBRPN BZ 316331265 -1.24E+08
BOMBRIL SA-ADR BMBPY US 316331265 -1.24E+08
BOMBRIL CIRIO SA BOBRON BZ 316331265 -1.24E+08
BOMBRIL SA-ADR BMBBY US 316331265 -1.24E+08
BOMBRIL-RIGHTS BOBR1 BZ 316331265 -1.24E+08
TELEBRAS-CM RCPT RCTB32 BZ 262220712 -16698444
TELEBRAS-PF RCPT RCTB40 BZ 262220712 -16698444
TELEBRAS-CM RCPT TBRTF US 262220712 -16698444
TELEBRAS-RCT PRF TELB10 BZ 262220712 -16698444
TELEBRAS SA TBASF US 262220712 -16698444
TELEBRAS-ADR RTB US 262220712 -16698444
TELEBRAS/W-I-ADR TBH-W US 262220712 -16698444
TELEBRAS-CEDEA $ RCT4D AR 262220712 -16698444
TELEBRAS-RTS CMN TCLP1 BZ 262220712 -16698444
TELEBRAS-PF RCPT TBAPF US 262220712 -16698444
TELEBRAS-PF RCPT TELE41 BZ 262220712 -16698444
TELEBRAS-CEDEA $ TEL4D AR 262220712 -16698444
TELEBRAS-ADR TBAPY US 262220712 -16698444
TELEBRAS SA-PREF TELB4 BZ 262220712 -16698444
TELEBRAS-PF BLCK TELB40 BZ 262220712 -16698444
TELEBRAS-RTS PRF RCTB2 BZ 262220712 -16698444
TELEBRAS-PF RCPT RCTB42 BZ 262220712 -16698444
TELEBRAS SA-RT TELB9 BZ 262220712 -16698444
TELEBRAS-RTS CMN RCTB1 BZ 262220712 -16698444
TELEBRAS-ADR TBH US 262220712 -16698444
TELEBRAS-CEDE PF RCTB4 AR 262220712 -16698444
TELEBRAS-CED C/E RCT4C AR 262220712 -16698444
TELEBRAS-CEDE BL RCT4B AR 262220712 -16698444
TELECOMUNICA-ADR 81370Z BZ 262220712 -16698444
TELEBRAS-BLOCK TELB30 BZ 262220712 -16698444
TELEBRAS-RCT RCTB33 BZ 262220712 -16698444
TELEBRAS-CEDE PF TELB4 AR 262220712 -16698444
TELEBRAS-ADR TBRAY GR 262220712 -16698444
TELEBRAS-CED C/E TEL4C AR 262220712 -16698444
TELEBRAS-CM RCPT RCTB31 BZ 262220712 -16698444
TELEBRAS SA-PREF TLBRPN BZ 262220712 -16698444
TELEBRAS-PF RCPT TLBRUP BZ 262220712 -16698444
TELEBRAS-COM RT TELB1 BZ 262220712 -16698444
TELEBRAS-PF RCPT CBRZF US 262220712 -16698444
TELEBRAS-PF RCPT RCTB41 BZ 262220712 -16698444
TELEBRAS-ADR TBX GR 262220712 -16698444
TELEBRAS-RTS PRF TLCP2 BZ 262220712 -16698444
TELEBRAS SA TELB3 BZ 262220712 -16698444
TELEBRAS-ADR TBASY US 262220712 -16698444
TELEBRAS-RECEIPT TLBRUO BZ 262220712 -16698444
TELEBRAS-CM RCPT TELE31 BZ 262220712 -16698444
TELEBRAS SA TLBRON BZ 262220712 -16698444
TELEBRAS-CM RCPT RCTB30 BZ 262220712 -16698444
HOTEIS OTHON-PRF HOTHPN BZ 255036150 -42606770
HOTEIS OTHON SA HOTHON BZ 255036150 -42606770
HOTEIS OTHON-PRF HOOT4 BZ 255036150 -42606770
HOTEIS OTHON SA HOOT3 BZ 255036150 -42606770
TEKA-ADR TKTQY US 246866965 -3.93E+08
TEKA TKTQF US 246866965 -3.93E+08
TEKA TEKAON BZ 246866965 -3.93E+08
TEKA-PREF TEKAPN BZ 246866965 -3.93E+08
TEKA TEKA3 BZ 246866965 -3.93E+08
TEKA-ADR TKTPY US 246866965 -3.93E+08
TEKA-ADR TEKAY US 246866965 -3.93E+08
TEKA-PREF TEKA4 BZ 246866965 -3.93E+08
TEKA-PREF TKTPF US 246866965 -3.93E+08
PET MANG-RIGHTS 3678569Q BZ 231024467 -1.85E+08
PET MANG-RT 4115364Q BZ 231024467 -1.85E+08
PET MANGUINH-PRF RPMG4 BZ 231024467 -1.85E+08
PETRO MANGUIN-PF MANGPN BZ 231024467 -1.85E+08
PET MANG-RIGHTS 3678565Q BZ 231024467 -1.85E+08
PET MANG-RT RPMG2 BZ 231024467 -1.85E+08
PET MANG-RECEIPT RPMG9 BZ 231024467 -1.85E+08
PET MANG-RECEIPT RPMG10 BZ 231024467 -1.85E+08
PET MANG-RT 4115360Q BZ 231024467 -1.85E+08
PETRO MANGUINHOS RPMG3 BZ 231024467 -1.85E+08
PETRO MANGUINHOS MANGON BZ 231024467 -1.85E+08
PET MANG-RT RPMG1 BZ 231024467 -1.85E+08
SANSUY-PREF B SNSY6 BZ 172563384 -94849033
SANSUY SA SNSYON BZ 172563384 -94849033
SANSUY SA-PREF A SNSYAN BZ 172563384 -94849033
SANSUY SA-PREF B SNSYBN BZ 172563384 -94849033
SANSUY SNSY3 BZ 172563384 -94849033
SANSUY-PREF A SNSY5 BZ 172563384 -94849033
DOC IMBITUBA-RTC IMBI1 BZ 96977064 -42592603
DOCAS IMBITUBA IMBION BZ 96977064 -42592603
DOCAS IMBITUB-PR IMBIPN BZ 96977064 -42592603
DOC IMBITUBA IMBI3 BZ 96977064 -42592603
DOC IMBITUB-PREF IMBI4 BZ 96977064 -42592603
DOC IMBITUBA-RTP 8174507Q BZ 96977064 -42592603
DOC IMBITUBA-RTC 8174503Q BZ 96977064 -42592603
VARIG PART EM SE VPSC3 BZ 96617351 -4.6E+08
VARIG PART EM-PR VPSC4 BZ 96617351 -4.6E+08
TEXTEIS RENA-RCT TXRX10 BZ 73095834 -1.04E+08
TEXTEIS RENAU-RT TXRX2 BZ 73095834 -1.04E+08
TEXTEIS RENAU-RT TXRX1 BZ 73095834 -1.04E+08
TEXTEIS RENAUX RENXON BZ 73095834 -1.04E+08
TEXTEIS RENAUX RENXPN BZ 73095834 -1.04E+08
TEXTEIS RENA-RCT TXRX9 BZ 73095834 -1.04E+08
RENAUXVIEW SA TXRX3 BZ 73095834 -1.04E+08
RENAUXVIEW SA-PF TXRX4 BZ 73095834 -1.04E+08
FABRICA RENAUX-P FRNXPN BZ 63865882 -73255215
FABRICA TECID-RT FTRX1 BZ 63865882 -73255215
FABRICA RENAUX-P FTRX4 BZ 63865882 -73255215
FABRICA RENAUX FTRX3 BZ 63865882 -73255215
FABRICA RENAUX FRNXON BZ 63865882 -73255215
MINUPAR SA-PREF MNPRPN BZ 63144534 -60655823
MINUPAR-PREF MNPR4 BZ 63144534 -60655823
MINUPAR-RT MNPR1 BZ 63144534 -60655823
MINUPAR SA MNPRON BZ 63144534 -60655823
MINUPAR-RCT MNPR9 BZ 63144534 -60655823
MINUPAR MNPR3 BZ 63144534 -60655823
VARIG PART EM TR VPTA3 BZ 49432124 -3.99E+08
VARIG PART EM-PR VPTA4 BZ 49432124 -3.99E+08
CIMOB PART-PREF GAFP4 BZ 39881387 -41560357
CIMOB PARTIC SA GAFP3 BZ 39881387 -41560357
CIMOB PART-PREF GAFPN BZ 39881387 -41560357
CIMOB PARTIC SA GAFON BZ 39881387 -41560357
SANESALTO SNST3 BZ 31044051 -1843298
STAROUP SA-PREF STARPN BZ 27663605 -7174512
BOTUCATU TEXTIL STRP3 BZ 27663605 -7174512
STAROUP SA STARON BZ 27663605 -7174512
BOTUCATU-PREF STRP4 BZ 27663605 -7174512
CONST BETER SA 1007Q BZ 25469474 -4918663
CONST BETER-PF B 1COBBN BZ 25469474 -4918663
CONST BETER SA 1COBON BZ 25469474 -4918663
CONST BETER-PR A COBEAN BZ 25469474 -4918663
CONST BETER-PR A 1008Q BZ 25469474 -4918663
CONST BETER-PR B 1009Q BZ 25469474 -4918663
CONST BETER SA COBE3B BZ 25469474 -4918663
CONST BETER SA COBE3 BZ 25469474 -4918663
CONST BETER-PF A 1COBAN BZ 25469474 -4918663
CONST BETER-PR B COBEBN BZ 25469474 -4918663
CONST BETER-PF B COBE6 BZ 25469474 -4918663
CONST BETER-PF A COBE5 BZ 25469474 -4918663
CONST BETER SA COBEON BZ 25469474 -4918663
STEEL - RCT ORD STLB9 BZ 23040051 -8699861
STEEL - RT STLB1 BZ 23040051 -8699861
STEEL DO BRASIL STLB3 BZ 23040051 -8699861
CHIARELLI SA-PRF CCHI4 BZ 22274027 -44537138
CHIARELLI SA-PRF CCHPN BZ 22274027 -44537138
CHIARELLI SA CCHON BZ 22274027 -44537138
CHIARELLI SA CCHI3 BZ 22274027 -44537138
FER HAGA-PREF HAGA4 BZ 21299043 -62858771
FERRAGENS HAGA-P HAGAPN BZ 21299043 -62858771
FERRAGENS HAGA HAGAON BZ 21299043 -62858771
HAGA HAGA3 BZ 21299043 -62858771
CAF BRASILIA-PRF CAFE4 BZ 21097370 -9.04E+08
CAFE BRASILIA SA CSBRON BZ 21097370 -9.04E+08
CAFE BRASILIA-PR CSBRPN BZ 21097370 -9.04E+08
CAF BRASILIA CAFE3 BZ 21097370 -9.04E+08
TECEL S JOSE-PRF FTSJPN BZ 19067322 -52580501
TECEL S JOSE FTSJON BZ 19067322 -52580501
TECEL S JOSE-PRF SJOS4 BZ 19067322 -52580501
TECEL S JOSE SJOS3 BZ 19067322 -52580501
NORDON MET NORD3 BZ 16108143 -22352941
NORDON MET-RTS NORD1 BZ 16108143 -22352941
NORDON METAL NORDON BZ 16108143 -22352941
GAZOLA-PREF GAZO4 BZ 12452143 -40298506
GAZOLA SA GAZON BZ 12452143 -40298506
GAZOLA SA-DVD CM GAZO11 BZ 12452143 -40298506
GAZOLA-RCPT PREF GAZO10 BZ 12452143 -40298506
GAZOLA SA-PREF GAZPN BZ 12452143 -40298506
GAZOLA SA-DVD PF GAZO12 BZ 12452143 -40298506
GAZOLA GAZO3 BZ 12452143 -40298506
GAZOLA-RCPTS CMN GAZO9 BZ 12452143 -40298506
ARTHUR LANGE ARLA3 BZ 11642256 -17154462
ARTHUR LANG-RC P ARLA10 BZ 11642256 -17154462
ARTHUR LANG-RC C ARLA9 BZ 11642256 -17154462
ARTHUR LAN-DVD C ARLA11 BZ 11642256 -17154462
ARTHUR LANGE SA ALICON BZ 11642256 -17154462
ARTHUR LAN-DVD P ARLA12 BZ 11642256 -17154462
ARTHUR LANG-RT P ARLA2 BZ 11642256 -17154462
ARTHUR LANGE-PRF ALICPN BZ 11642256 -17154462
ARTHUR LANG-RT C ARLA1 BZ 11642256 -17154462
ARTHUR LANGE-PRF ARLA4 BZ 11642256 -17154462
FERREIRA GUIMARA FGUION BZ 11016542 -1.52E+08
F GUIMARAES FGUI3 BZ 11016542 -1.52E+08
FERREIRA GUIM-PR FGUIPN BZ 11016542 -1.52E+08
F GUIMARAES-PREF FGUI4 BZ 11016542 -1.52E+08
COLOMBIA
CHILESAT CORP SA TELEX CI 953784479 -1.03E+08
TELMEX CORP-ADR CSAOY US 953784479 -1.03E+08
TELMEX CORP SA CHILESAT CI 953784479 -1.03E+08
TELEX-RTS TELEXO CI 953784479 -1.03E+08
CHILESAT CO-ADR TL US 953784479 -1.03E+08
CHILESAT CO-RTS CHISATOS CI 953784479 -1.03E+08
TELEX-A TELEXA CI 953784479 -1.03E+08
***********
Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA 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-LA constitutes an offer or solicitation to buy
or sell any security of any kind. It is likely that some entity
affiliated with a TCR-LA editor holds some position in the
issuers' public debt and equity securities about which we report.
Tuesday's edition of the TCR-LA features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR-LA. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
***********
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-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Valerie U. Pascual, Psyche A. Castillon, Julie Anne G.
Lopez, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A.
Chapman, Editors.
Copyright 2011. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$625 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
* * * End of Transmission * * *