/raid1/www/Hosts/bankrupt/TCRLA_Public/110406.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
Wednesday, April 6, 2011, Vol. 12, No. 68
Headlines
A N G U I L L A
BARNES BAY: U.S. Trustee Forms 5-Member Creditors' Committee
BARNES BAY: Disclosure Statement Hearing Set for May 3
A R G E N T I N A
EMPRESA DISTRIBUIDORA: Moody's Puts B2/A1.ar Ratings on Notes
A R U B A
TROPICANA ENTERTAINMENT: Drops Certain Parties in Case vs. Yung
TROPICANA ENTERTAINMENT: Resolves Richards Layton Fee Issue
TROPICANA ENTERTAINMENT: NRF Withdraws Administrative Claim
TROPICANA PARTNERS: Case Summary & 20 Largest Unsecured Creditors
B E R M U D A
LM GROUP: Creditors' Proofs of Debt Due April 15
LM GROUP: Member to Receive Wind-Up Report on May 6
LM GROUP: Creditors' Proofs of Debt Due April 15
LM GROUP: Member to Receive Wind-Up Report on May 3
MGS GLOBAL: Creditors' Proofs of Debt Due April 15
MGS LONG/SHORT: Creditors' Proofs of Debt Due April 15
MGS LONG/SHORT: Member to Receive Wind-Up Report on May 2
MULTI-STRATEGY: Creditors' Proofs of Debt Due April 15
MULTI-STRATEGY: Member to Receive Wind-Up Report on May 2
B R A Z I L
BANCO VOTORANTIM: S&P Affirms 'BB+/B' Global Scale Credit Ratings
BES INVESTIMENTO: S&P Lowers Global Scale Ratings to 'BB+/B-1'
C A Y M A N I S L A N D S
AMAR LTD: Shareholders' Final Meeting Set for April 29
CARTESIUS ADVISORS: Shareholders' Final Meeting Set for May 2
CITI GOLDENTREE: Shareholders' Final Meeting Set for April 29
[REDACTED Nov. 12, 2012]
HSBC STRUCTURED: Shareholders' Final Meeting Set for May 5
KENNAMETAL HOLDING: Shareholder to Hear Wind-Up Report on April 26
LONGPORT FUNDING: Shareholders' Final Meeting Set for April 28
MBF NO.4: Shareholders' Final Meeting Set for April 29
OCELOT RUSSIAN: Shareholders' Final Meeting Set for April 28
RCF CORP: Shareholders' Final Meeting Set for May 5
RISING STAR: Shareholders' Final Meeting Set for April 26
SP PRODUCTS: Shareholders' Final Meeting Set for April 19
TOP COMMODITY: Shareholders' Final Meeting Set for April 28
TURBO CAYMAN: Shareholders' Final Meeting Set for April 28
C H I L E
RADIENT PHARMACEUTICALS: Delays Filing of Annual Report
D O M I N I C A N R E P U B L I C
SBARRO INC: Files for Chapter 11 With Pre-Negotiated Plan
SBARRO INC: Case Summary & 40 Largest Unsecured Creditors
J A M A I C A
AIR JAMAICA: Caribbean Airlines Merger May Fail, Lawyer Says
AIR JAMAICA: JALPA Wins Representational Rights for Pilots
JAMAICA DIVERSIFIED: Fitch Affirms Ratings on 2 Notes at 'BB'
JAMALCO: Still Owns Clarendon Alumina, Sale Deadline Passes
M E X I C O
AMERICAN APPAREL: May File for Chapter 11 Due to Liquidity Woes
ENIVA USA: Has Green Light to Transfer Headquarters
MESA AIR: Final Fee Applications Filing Deadline Set at May 2
MESA AIR: Enters Deal With U.S. Bank on Aircraft Rejection Claims
MESA AIR: Resolves Bombardier Administrative Claims
QUINTANA ROO: Moody's Cuts Global Scale Issuer Rating to 'Ba2'
SEAHAWK DRILLING: Hercules Can Proceed With Acquisition Plan
SEAHAWK DRILLING: Has Final OK to Employ PR Firm Sitrick
VITRO SAB: Judge to Rule on Involuntary Chapter 11 Petition
P E R U
DOE RUN PERU: Gov't Calls Off April 4 & 7 Creditor Meetings
P U E R T O R I C O
BORDERS GROUP: SN Warranty Wants Immediate Decision on Contracts
BORDERS GROUP: Pershing & Hachette Have Substantial Equity Stake
BORDERS GROUP: Scholastic Posts $3.5-Mil. Bad Debt Expense
BORDERS GROUP: Proposes Mercer (US) as Consultant
BORDERS GROUP: Files Schedules of Assets & Liabilities
BORDERS GROUP: Files Statement of Financial Affairs
FIRST BANCORP: Delays Filing of Annual Report for 2010
T R I N I D A D & T O B A G O
HINDU CREDIT: Court Says L. Curran Claim Must be Heard in Trinidad
- - - - -
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A N G U I L L A
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BARNES BAY: U.S. Trustee Forms 5-Member Creditors' Committee
------------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
five members to the official committee of unsecured creditors in
the Chapter 11 cases of Barnes Bay Development Ltd.
The Creditors' Committee members are:
1. Exclusive Resorts Real Estate Holding II, LLC
Attn: General Counsel
1515 Arapahoe Street, Tower 3, Suite 300
Denver CO 80202
Tel: (202) 776-1403
Fax: (202) 776-1494
2. World Class Pools
Attn: Glenn Harris
Box 5065, The Valley
Anguilla BWI AI 2640,
Tel: (561) 531-6972
3. Joel Greenburg and Mary Gringlas
727 Merion Square Road
Gladwyne PA 19035
Tel: (610) 617-2610
Fax: (610) 617-2905
4. Carillion Construction (West Indies) Ltd.
Attn: Christopher Buck, Esq.
Brickfield Road, Carapachaima
Trinidad, West Indies
Tel: (905) 532-5377
5. Jacob Stepan
40 Roc Etam Road
Randolph NJ 07869
Tel: (917) 361-2376
Fax: 973-442-0558
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
expense. They may investigate the Debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
About Barnes Bay
Beverly Hills, California-based Barnes Bay Development Ltd. owns
the Viceroy Anguilla Resort & Residences on the British West
Indies island of Anguilla. It filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 11-10792) on March 17, 2011.
The Company disclosed that as of as of Dec. 31, 2010, it had
$531 million in assets and $462 million in debt.
Akin Gump Strauss Hauer & Feld LLP, and Richards Layton & Finger,
P.A., represent the Debtor in its restructuring effort. Kurtzman
Carson Consultants LLC is the Debtor's claims, noticing,
solicitation and balloting agent.
The Debtor's Chapter 11 plan is intended to facilitate the sale of
the Viceroy Anguilla Resort and Residences.
BARNES BAY: Disclosure Statement Hearing Set for May 3
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing on May 3, 2011, at 9:30 a.m. (EDT), to consider
adequacy of the Disclosure Statement explaining Barnes Bay
Development Ltd.'s proposed Plan of Liquidation dated as of
April 1, 2011. Objections, if any, are due April 29, at 4:00 p.m.
According to the Disclosure Statement, the Plan contemplates the
public auction and sale of substantially all the Debtor's assets.
The proceeds will be used to satisfy the Debtor's secured
obligations and make distributions under the Plan.
During the construction process, Barnes Bay marketed and sold the
private villas and oceanfront residences. As of the Petition
Date, Barnes Bay had signed Purchase and Sale Agreements (PSA)
with buyers for 25 villas and 72 of the other private residences,
collecting almost $49,000,000 in deposits against purchase prices
aggregating approximately $220,000,000.
A Starwood Capital Group controlled affiliate owns the $358
million mortgage on Viceroy Anguilla Resort and Residences and
expects to acquire the resort as part of the sale and bankruptcy
plan.
Treatment of Claims and Interests
Class 1 (DIP Claims) Payment in full.
Class 2(Prepetition Lender Claim) Payment in full.
Class 3 (Other Secured Claims) Payment in full.
Class 4 (Priority Claims) Payment in full.
Class 5 (PSA Unsecured Claims) At Creditor's election, PSAs
will either be (i) assumed and
assigned to Buyer or (ii)
rejected. Claims arising from
rejection of PSAs receive pro
rata distribution in Cash from
the PSA Unsecured Recovery Pool.
Class 6 (General Unsecured Claim) Pro rata distribution in Cash
from the General Unsecured
Creditor Recovery Pool.
Class 7 (Prepetition Lender Waived if Prepetition Lender is
Deficiency Claims) the Buyer. If Prepetition Lender
is not the Buyer, Claims will be
treated (i) pari passu on a
percentage recovery basis with
Class 5 and Class 6 Claims or
(ii) as otherwise agreed by the
Prepetition Lender.
Class 8 (Intercompany Indemnity No Distribution. Intercompany
Claims) Indemnity Claims will be waived,
released and discharged on the
Effective Date.
Class 9 (Interest and Interest No Distribution. Interests
Related Claims) will be canceled on the
Effective Date.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/BarnesBay_DS.pdf
The Debtor is represented by:
AKIN GUMP STRAUSS HAUER & FELD LLP
1700 Pacific Avenue, Suite 4100
Dallas, TX 75201
Tel: (214) 969-2800
RICHARDS LAYTON & FINGER, P.A.
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Tel: (302) 652-3131
About Barnes Bay
Beverly Hills, California-based Barnes Bay Development Ltd. owns
the Viceroy Anguilla Resort & Residences on the British West
Indies island of Anguilla. It filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 11-10792) on March 17, 2011.
The Company disclosed that as of as of Dec. 31, 2010, it had
$531 million in assets and $462 million in debt.
Akin Gump Strauss Hauer & Feld LLP, and Richards Layton & Finger,
P.A., represent the Debtor in its restructuring effort. Kurtzman
Carson Consultants LLC is the Debtor's claims, noticing,
solicitation and balloting agent.
The Debtor's Chapter 11 plan is intended to facilitate the sale of
the Viceroy Anguilla Resort and Residences.
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A R G E N T I N A
=================
EMPRESA DISTRIBUIDORA: Moody's Puts B2/A1.ar Ratings on Notes
-------------------------------------------------------------
Moody's Latin America assigned B2/A1.ar ratings to Edenor's up to
US$70 million proposed notes, with a stable outlook. The notes
are being offered under the 2022 bond offering and to complete the
US$300 million originally announced.
Proceeds from the notes will be used to refinance the bridge loans
the company was granted to finance its recently acquired
subsidiaries from AIE.
Rating Rationale
On March 4, 2011, Edenor announced it had acquired from AIE the
distribution assets it had in Argentina. Those assets comprised
EMDERSA, a holding company that owns three different concessions:
Edesal, Edelar and Edesa (distribution companies in the provinces
of San Luis, La Rioja and Salta) plus an additional one, Eden,
which has operations in the northern area of the Buenos Aires
Province. Total purchase price was US$140 million (US$90 million
corresponding to Emdersa and US$50 million to Eden). While Edenor
used cash on hand to pay for the acquisition, it at the same time
entered into several short term bank loans for a total amount of
ARS 280 (US$70 million) to refinance the existing debt at the
acquired subsidiaries through an intercompany financing from
Edenor. Proceeds of the notes will be used to repay Edenor's
inter-company loans.
The B2 and A1.ar ratings reflect Edenor's leading position as the
largest distribution utility in the domestic electricity market in
terms of number of clients and its conservative financial profile.
While the recent acquisitions will further strengthen Edenor's
position as the country's largest electric utility, the acquired
companies should enhance Edenor's margins and EBITDA without
increasing leverage substantially. It is anticipated that the
acquired subsidiaries will continue to run their own operations.
Nevertheless, the ratings still reflect the uncertainty that
surrounds Argentina's electric industry due to the lack of
transparency and predictability of the current regulatory
framework. In addition, Moody's expects a continuation of
volatile pricing and significant declines in distribution margins
due to frozen tariffs or the lack of timeliness with respect to
cost recovery.
Moody's continuing concern with the overall regulatory environment
in Argentina remains a major constraint to the ratings. Edenor's
tariffs and other terms of its concession are subject to
regulation by the Secretariat of Energy and the Argentine National
Electricity Regulator (ENRE). Edenor's regulated tariffs have
remained frozen for several years and while the Argentinean
regulators have authorized an adjustment of the VAD (value added
for distribution) in 2007 for Edenor's non-residential consumers
and in 2008 for residential, the expected cost recovery mechanism
(CMM) after those initial adjustments is not working as
anticipated. The absence of a workable cost recovery mechanism
in a climate of growing inflation is clearly hurting Edenor's
operating profits. To offset the delays in the CMM, the Energy
Secretariat allowed Edenor to retain funds from the Program for
the Rational Use of Electric Power (PUREE), in order to reimburse
the company for the amounts it is owed under requested CMM
increases, which are not yet reflected in the distribution margin.
While this compensation mechanism may not be sustainable and is
less clear and less transparent than it could have been with the
timely application of the CMM as originally designed, it has
allowed Edenor to maintain its cash generation capacity.
In respect to the recently acquired companies, all of them are
regulated by provincial regulatory agencies which have proven to
be more proactive in terms of tariff adjustment and more
supportive of utilities than the federal regulators, which is a
strong credit positive. Nevertheless, the overall regulatory
environment in Argentina still lacks the necessary transparency
and predictability to be considered supportive although provincial
regulation is clearly viewed as being less risky than federal
regulation.
Edenor's proposed notes are dollar denominated while revenues are
in the local currency and will be therefore exposed to devaluation
risk. Furthermore, Edenor has no hedging policy in place.
Historically, Edenor has only hedged its upcoming interest
payments but not principal and our expectation is that the company
will continue hedging interest.
Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable with the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated
by a ".nn" country modifier signifying the relevant country, as in
".ar" for Argentina. For further information on Moody's approach
to national scale ratings, please refer to Moody's Rating
Implementation Guidance published in August 2010 entitled "Mapping
Moody's National Scale Ratings to Global Scale Ratings."
The stable outlook reflects Moody's expectation that the company
will be able to efficiently manage the integration of the acquired
companies while reasonably maintaining a prudent financial
profile. The stable outlook also considers that Edenor will
continue to post strong internal cash flow generation in spite of
declining operating margins.
Ratings could come under upward pressure if the evolution of the
current federal regulatory framework leads to a more stable and
predictable regulatory environment. Evidence of a more consistent
application of the CMM mechanism for the recovery of increased
costs could also add upward pressure on the ratings.
In addition, the implementation of a more conservative financial
policy by the company that further reduces leverage leading to a
debt to EBITDA ratio of less than 1.5 times on a sustainable basis
along with a material change in debt currency denomination that
would reduce dollar exposure by at least 50% could also have a
positive impact on ratings.
If the current regulatory environment deteriorates further, such
that Edenor or its controlled subsidiaries become unable to retain
the cash amounts collected under the PUREE on its balance sheet
while the CMM is not applied or where the CFO Pre W/C plus
Interest to Interest were to fall below three times or CFO Pre W/C
to Debt were to drop below 20%, the ratings could come under
downward pressure. To that end, continuation of the tariff freeze
and failure to implement any aspect of the CMM recovery mechanism
could negatively impact ratings for the Argentinean utilities.
Since Edenor's revenues are in local currency and its bonds are
dollar-denominated, its financial profile could be substantially
and adversely affected by a major devaluation of the Argentine
peso.
Empresa Distribuidora Norte S.A (Edenor), headquartered in Buenos
Aires, Argentina, is the country's largest electricity
distribution company. As of December 2010, Edenor had 2.6 million
clients and reported total revenues of ARS2.1 billion
(approximately US$525 million).
=========
A R U B A
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TROPICANA ENTERTAINMENT: Drops Certain Parties in Case vs. Yung
---------------------------------------------------------------
Lightsway Litigation Services, LLC, trustee of the Tropicana
Litigation Trust, received approval last month from Judge Kevin J.
Carey to dismiss certain parties as defendants in its adversary
action.
Pursuant to Rule 41(a)(2) of the Federal Rules of Civil
Procedure, Joe Yung, the 1994 William J. Yung Family Trust, CSC
Holdings LLC, the JMBS Casino Trust, and Casuarina Cayman
Holdings LLC are dismissed, without prejudice, as defendants in
Lightsway's complaint.
The remaining defendants in the Lightsway Complaint are William
J. Yung, III, Wimar Tahoe Corporation, f/k/a Tropicana Casinos
and Resorts, Inc., and Columbia Sussex Corporation.
Complaint vs. Yung
Lightsway filed its original complaint a year ago, alleging that
the Original Defendants engaged in gross misconduct, recklessly
mismanaged the Tropicana Casino Debtors' business and operations,
and aided and abetted in actionable breach of their fiduciary
obligations to one or more of the Debtors -- which ultimately led
to insolvency of the Debtors.
Lightsway filed the First Amended Complaint in time to beat the
Feb. 9, 2011 deadline for such filing set by U.S. Bankruptcy
Court for the District of Delaware. The previous deadline was
previously set for the last week of January. The Court allowed
the extension to allow further discussions among the parties on
whether or not and how Lightsway will seek equitable
subordination in the Amended Complaint.
Joe Yung, 1994 William J. Yung Family Trust, CSC Holdings,
LLC, JMBS Casino Trust, and Casuarina Cayman Holdings, LLC,
are no longer named as defendants under the Amended Complaint.
Lightsway earlier filed a separate pleading with the Court,
seeking dismissal of Joe Yung, the Yung Family Trust, CSC, JBMS
and Casuarina from the adversary complaint, without prejudice.
Under the Amended Complaint, Lightsway specifically seeks a
declaratory judgment that any claims filed by Defendants William
Yung, Wimar and Columbia in the Debtors' bankruptcy cases should
be equitably subordinated, if and when those claims are allowed.
About Tropicana Entertainment
Tropicana Entertainment Inc. is a publicly reporting company that,
along with its affiliates, owns or operates nine casinos and
resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey.
The Company owns approximately 6,000 rooms, 9,000 slot positions
and 250 table games. In addition, the Company owns a development
property in Aruba. The company is based in Las Vegas, Nevada.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Tropicana Entertainment Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TROPICANA ENTERTAINMENT: Resolves Richards Layton Fee Issue
-----------------------------------------------------------
Richards, Layton & Finger, P.A.; the Steering Committee of
Lenders under a January 2007 Credit Agreement; the Reorganized
OpCo Debtors; the Liquidating LandCo Debtors; and Tropicana Las
Vegas, Inc. have engaged in discussions and have ultimately
reached a resolution solely with respect to the Richards Layton
Final Fee Applications.
As previously reported, Richards Layton filed final fee
applications to the Court -- one on August 17, 2009, for services
rendered and expenses incurred for the period from May 5, 2008
through June 30, 2009; and another on April 22, 2010, for
services rendered and expenses incurred for the period from May
5, 2008 through March 8, 2010. The Richards Layton Final Fee
Applications are in connection with the firm's representation of
both the OpCo Debtors and the LandCo Debtors in their Chapter 11
cases.
Certain parties objected to the approval of the Richards Layton
Final Fee Applications. Among them are the Steering Committee
and the Liquidating LandCo Debtors. The Fee Objectors also
expressed concern on the allocation of professional fees and
expenses between the OpCo Debtors and the LandCo Debtors.
The parties have subsequently agreed on the terms of a
stipulation to resolve their dispute. The salient terms of the
stipulation are:
(a) Richards Layton's fees will be allocated between the OpCo
Debtors and the LandCo Debtors in accordance with any
allocation methodology adopted by the Court in connection
with the scheduled hearing on May 11, 2011, or otherwise
agreed to by the Steering Committee and the Liquidating
LandCo Debtors.
(b) Subject only to the resolution of the Objecting Parties'
dispute regarding the Allocation of the Fees as provided
in the Fee Objections, Tropicana Las Vegas, the Steering
Committee and the Reorganized OpCo Debtors will not object
to Richards Layton's Fees on any other grounds, including
the reasonableness of the Fees or the necessity of the
related provided services. Tropicana Las Vegas, the
Steering Committee, and the Reorganized OpCo Debtors also
will not challenge, oppose or otherwise dispute that
Richards Layton's Fees should be allowed in full by final
order of the Court.
(c) Richards Layton will not file a response to the Fee
Objections and will not present evidence, argument or
testimony at the Hearing with respect to the Allocation of
its Fees or any other Professional's fees or expenses.
However, Richards Layton may (i) respond to any question
from the Court relating to its Final Fee Applications, the
Fee Objections or otherwise, including questions regarding
the Allocation applied by the firm in its Final Fee
Applications; and (ii) other than with respect to
Allocation, address any issues raised by any party with
respect to Richards Layton Final Fee Applications,
including issues relating to the reasonableness of the
firm's Fees or the performance of its duties as counsel to
the Debtors.
(d) In connection with the RL&F Final Fee Applications and the
Fee Objections, Tropicana Las Vegas, the Steering
Committee, and the Reorganized OpCo Debtors will not (i)
with the exception of the Discovery Requests, propound any
discovery requests on Richards Layton; (ii) notice, by
subpoena or otherwise, Richards Layton or any of its
officers, attorneys or representatives for deposition or
testimony in connection with the Fee Objections or the
Hearing; or (iii) identify or call the firm or any of its
officers, attorneys or representatives as a witness at the
Hearing.
(e) Richards Layton may, in its capacity as Delaware counsel
for the Reorganized OpCo Debtors, file documents in these
Chapter 11 cases on behalf of the Reorganized OpCo Debtors
or Kirkland & Ellis relating to the Fee Objections,
provided that it agrees not to assist with the substantive
preparation of any of the documents or to present related
argument at the Hearing.
Parties to Remaining Fee Objections
Agree to Mediation
In a letter dated March 3, 2011, Richard U. S. Howell of Kirkland
& Ellis LLP informed the Court that on March 1, 2011, counsel to
the OpCo Steering Committee, the Liquidating LandCo Debtors, and
Tropicana Las Vegas, Inc. met and conferred with representatives
for several of the professional firms subject to the Fee
Objections and have agreed on certain terms that are subject to
client approval.
The subject professional firms include AlixPartners, LLP;
Capstone Advisory Group, LLC; Ernst & Young LLP; Kirkland & Ellis
LLP; KPMG LLP; Lazard Freres & Co., LLC; and Stroock & Stroock &
Lavan LLP; Lionel Sawyer & Collins; Morris, Nichols, Arsht &
Tunnell LLP; Paul, Hastings, Janofsky & Walker LLP; Sills Cummis
& Gross, P.C.; Richards, Layton & Finger, P.A.; and Warren H.
Smith & Associates P.C.
The parties agree on these terms:
(a) The parties are willing to engage in a non-binding
judicial mediation of all issues relevant to each of them,
as presented in the Fee Objections.
(b) The parties believe that any mediation effort is likely to
require at least one day and may require more than one day
from the appointed mediator.
(c) A Court-appointed mediator will preside over the judicial
mediation, provided that the mediator is a bankruptcy
judge currently sitting in the U.S. Bankruptcy Court for
the District of Delaware or the U.S. Bankruptcy Court for
the Southern District of New York.
(d) All discovery deadlines established in the January 7, 2011
discovery schedule order that occur in March will be
extended by two weeks beginning with the March 2, 2011
deadline for exchanging preliminary witness lists.
(e) The hearing on the Fee Objections, which is currently
scheduled to begin on May 11, 2011, will not be moved by
virtue of the proposed judicial mediation contemplated by
the parties.
A full-text copy of the Court-approved amended discovery
scheduling order is available at no charge at:
http://bankrupt.com/misc/Tropi_AmSkedDiscOrdFFA030911.pdf
Certain parties, including Richards Layton, do not intend to
participate in the mediation or any discussions or proceedings
related to the mediation.
Mr. Howell also informed the Court that all parties except the
OpCo Steering Committee have reviewed the letter and have
confirmed that they are in agreement with, or do not oppose, its
contents. The OpCo Steering Committee has presented several
substantive changes that were unacceptable to the other parties.
Upon receiving the objections of the other parties, the OpCo
Steering Committee has refused to agree to the terms of the
letter and will either submit a counter-proposal or refuse to
mediate, according to Mr. Howell. The remainder of the other
parties has agreed to go forward with the submission of the
letter.
A telephonic status conference regarding the fee applications and
objection mediation was held on March 8, 2011. In attendance
were counsel for the OpCo Steering Committee and the Liquidating
LandCo Debtors and Tropicana Las Vegas as well as newly retained
counsel to the Reorganized OpCo Debtors. Counsel for several of
the professionals, including Kirkland & Ellis, Lazard Freres,
Paul Hastings, Richards Layton, Stroock & Stroock, Capstone
Advisory, Ernst & Young, and AlixPartners, were also in
attendance.
In a subsequent letter dated March 10, 2011, Mr. Howell informed
the Court that, during the March 8, 2011 telephonic conference,
it "became apparent that the Professionals and the OpCo-related
parties were not going to be able to surmount their differences"
regarding the allocation of the Professionals' fees expended in a
mediation effort. He said that no group mediation will take
place involving the OpCo Steering Committee.
After the OpCo-related parties concluded their participation in
the teleconference, discussions continued between counsel to the
Liquidating LandCo Debtors and the Professionals. While these
parties continue to discuss the merits of mediation with one
another, they have concluded that they are able to proceed with
the mediation in the event that any of them decide to do so,
without the Court's assistance.
* * *
Court Approves Warren Smith's
4th and 5th Interim Fee Applications
The Court approved the fourth and the fifth interim verified fee
applications of Warren H. Smith & Associates, P.C., as Fee
Auditor.
Requested Approved
--------------------- ---------------------
Professional Fees Expenses Fees Expenses
------------ ----------- -------- ----------- ---------
Warren H. Smith
& Associates
Fee Auditor
Periods Covered:
02/01/09-04/30/09 $52,810 $557 $52,810 $557
05/01/09-06/30/09 $31,692 $336 $31,692 $336
About Tropicana Entertainment
Tropicana Entertainment Inc. is a publicly reporting company that,
along with its affiliates, owns or operates nine casinos and
resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey.
The Company owns approximately 6,000 rooms, 9,000 slot positions
and 250 table games. In addition, the Company owns a development
property in Aruba. The company is based in Las Vegas, Nevada.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Tropicana Entertainment Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TROPICANA ENTERTAINMENT: NRF Withdraws Administrative Claim
-----------------------------------------------------------
Pursuant to a consent order signed by Judge Judith H. Wizmur of
the U.S. Bankruptcy Court for the District of New Jersey, the
National Retirement Fund, f/k/a UNITE HERE National Retirement
Fund, withdrew with prejudice its Administrative Claim No. 779.
Adamar of NJ In Liquidation, LLC, f/k/a Adamar of New Jersey,
Inc., d/b/a Tropicana Casino & Resort - Atlantic City, and
Manchester Mall, Inc., have also agreed to withdraw the Motion to
Expunge the Administrative Claim simultaneously with the Fund's
withdrawal of the Claim.
As previously reported, the National Retirement Fund timely filed
two proofs of claim, including a contingent proof of claim for
withdrawal liability should Adamar withdraw from the Fund.
On March 8, 2010, the effective date of the sale of the New
Jersey Debtors' assets, the National Retirement Fund asserted --
and Adamar disputed -- that Adamar incurred a complete withdrawal
from the Fund. National Retirement Fund asserted that upon
Adamar's alleged complete withdrawal from the Fund, the Fund's
claim for withdrawal liability was no longer contingent.
The National Retirement Fund amended the Contingent Withdrawal
Liability Claim by filing an amended general unsecured claim for
the estimated withdrawal liability of not less than $43,454,000,
assigned as Claim No. 780. The National Retirement Fund also
timely filed a proof of administrative expense claim in the
estimated amount of $1,605,000, assigned as Claim No. 779, for
the portion of Adamar's withdrawal liability that accrued
postpetition as a result of the NJ Debtor's sale of substantially
all of its assets.
On August 27, 2010, the NJ Debtors filed the Motion to Expunge.
The National Retirement Fund filed a response to the Motion on
November 9, 2010, and the NJ Debtors filed their counterreply on
November 12. The NJ Debtors and the purchasers of substantially
all of their assets each filed a supplemental brief in support of
the Motion on January 28, 2011.
The National Retirement Fund has determined that it is no longer
in its best interest to continue prosecuting the Administrative
Claim.
All other claims filed by the National Retirement Fund in the NJ
Debtors' Chapter 11 cases, including the Unsecured Withdrawal
Liability Claim, will remain on the claims register and will be
unaffected by the consent order.
About Tropicana Entertainment
Tropicana Entertainment Inc. is a publicly reporting company that,
along with its affiliates, owns or operates nine casinos and
resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey.
The Company owns approximately 6,000 rooms, 9,000 slot positions
and 250 table games. In addition, the Company owns a development
property in Aruba. The company is based in Las Vegas, Nevada.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Tropicana Entertainment Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TROPICANA PARTNERS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Tropicana Partners 2 LLC
1050 Saratoga Avenue
San Jose, CA 95129-3402
Bankruptcy Case No.: 11-14920
Chapter 11 Petition Date: April 1, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: Terry V. Leavitt, Esq.
TERRY V. LEAVITT
601 S. 6th Street
Las Vegas, NV 89101
Tel: (702) 385-7444
Fax: (702) 385-1178
E-mail: terry@leavittbk.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Barry A. Ford, managing member.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
BB&T Bank/Colonial Bank 5693 S. Jones $5,399,876
P.O. Box 830738 Blvd. APN
Birmingham, AL 35202 163-26-818-001
BB&T Bank/Colonial Bank 594 N. Stephanie $5,243,474
P.O. Box 830738 Street APN
Birmingham, AL 35202 178-03-310-018
BB&T Bank/Colonial Bank 9827 W. Tropicana $3,788,763
P.O. Box 830738 Ave. APN
Birmingham, AL 35202 163-30-101-022
Travelers Insurance $8,187
Travelers Insurance $7,725
Travelers Insurance $6,991
Jan Lauver, Esq. Services $5,000
Clark County Water Reclamation Utilities $4,709
Clark County Water Reclamation Utilities $3,943
Comfort Masters Services $3,341
Las Vegas Valley Water Utilities $1,472
Desert Property Group Services $1,350
Republic Service Services $1,231
NV Energy Utilities $815
NV Energy Utilities $790
NV Energy Utilities $347
NV Energy Utilities $243
Window Bright Services $240
Protection One Services $220
Republic Service Services $217
=============
B E R M U D A
=============
LM GROUP: Creditors' Proofs of Debt Due April 15
------------------------------------------------
The creditors of LM Group Investments Man AP Enhanced Ltd are
required to file their proofs of debt by April 15, 2011, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on March 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
LM GROUP: Member to Receive Wind-Up Report on May 6
---------------------------------------------------
The member of LM Group Investments Man AP Enhanced Ltd will
receive on May 6, 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 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
LM GROUP: Creditors' Proofs of Debt Due April 15
------------------------------------------------
The creditors of LM Group Investments Man AP Enhanced Trading Ltd
are required to file their proofs of debt by April 15, 2011, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on March 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
LM GROUP: Member to Receive Wind-Up Report on May 3
---------------------------------------------------
The member of LM Group Investments Man AP Enhanced Trading Ltd
will receive on May 3, 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 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
MGS GLOBAL: Creditors' Proofs of Debt Due April 15
--------------------------------------------------
The creditors of MGS Global Macro NF Strategies Limited are
required to file their proofs of debt by April 15, 2011, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on March 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
MGS LONG/SHORT: Creditors' Proofs of Debt Due April 15
------------------------------------------------------
The creditors of MGS Long/Short Equity NF Strategies Limited are
required to file their proofs of debt by April 15, 2011, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on March 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
MGS LONG/SHORT: Member to Receive Wind-Up Report on May 2
---------------------------------------------------------
The member of MGS Long/Short Equity NF Strategies Limited will
receive on May 2, 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 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
MULTI-STRATEGY: Creditors' Proofs of Debt Due April 15
------------------------------------------------------
The creditors of Multi-Strategy Series 3 Dollar Trading Ltd are
required to file their proofs of debt by April 15, 2011, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on March 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
MULTI-STRATEGY: Member to Receive Wind-Up Report on May 2
---------------------------------------------------------
The member of Multi-Strategy Series 3 Dollar Trading Ltd will
receive on May 2, 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 29, 2011.
The company's liquidator is:
Beverly Mathias
c/o Argonaut Limited
Argonaut House, 5 Park Road
Hamilton HM O9
Bermuda
===========
B R A Z I L
===========
BANCO VOTORANTIM: S&P Affirms 'BB+/B' Global Scale Credit Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'BB+/B'
global scale counterparty credit ratings and 'brAA+/brA-1' Brazil
national scale ratings on Banco Votorantim S.A. (BV). The outlook
remains stable.
"The ratings on BV reflect the bank's somewhat limited business
profile, which is still very concentrated in consumer lending, and
lower profitability and weak efficiency ratio compared with its
main competitors," said Standard & Poor's credit analyst Suzane
Iamamoto. "Partially offsetting these risks are the bank's strong
market position in auto finance and its experienced management
team, as well as the significant competition in the Brazilian
banking sector."
Ratings strengths include the benefits that BV derives from its
strong brand name and its strategic partnership with Banco do
Brasil (BdB; BBB-/Stable/A-3).
BV is the seventh-largest Brazilian bank based on total assets
(excluding the Brazilian Development Bank, or BNDES). In
addition, BV is considered a traditional bank in the car financing
segment -- with a market share of 15% of total auto loans in the
Brazilian financial system -- and is the second-largest player in
terms of loan origination, with a market share of about 32% in
used vehicles.
BV has maintained adequate asset quality ratios while growing
its loan portfolio, with increased participation of the retail
segment. In December 2010, nonperforming loans reached 1.3%, with
2.1% net charge-offs and 130% loan loss reserves coverage (versus
2.8%, 1.9%, and 101%, respectively, in December 2009).
BV's capitalization is satisfactory for the profile of its
operations. The bank's regulatory capital to risk-weighed assets
ratio was 13.1% in December 2010, and adjusted total equity to
adjusted assets was 7.05%. Total adjusted capital was Brazilian
reais (R$) 8.3 million in December 2010.
"The stable outlook reflects our expectation that the bank will be
able to sustain adequate asset quality indicators and that
profitability will be similar to current levels despite lower
interest rates and higher competition," S&P noted.
BES INVESTIMENTO: S&P Lowers Global Scale Ratings to 'BB+/B-1'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its global
scale ratings on BES Investimento do Brasil (BESI Brasil) to
'BB+/B-1' from 'BBB-/A-3' and its national scale credit rating
to 'brAA+' from 'brAAA'. The ratings remain on CreditWatch
where they were placed with negative implications on Feb. 17,
2011.
The rating action follows the downgrade on BESI Brasil's
parent company, Banco Espirito Santo de Investimento S.A. (BBB-
/Negative/A-3), and its parent, Banco Espirito Santo S.A. (BBB-
/Negative/A-3), on March 31, 2011, which in turn followed the
same action on the Republic of Portugal (BBB-/Negative/A-3) on
March 29, 2011.
"According to our criteria, we rarely rate a noncore subsidiary as
high as its parent unless its stand-alone credit profile (SACP) is
at the same level, so we are downgrading BESI Brasil one notch
below its parent," said Standard & Poor's credit analyst Vitor
Garcia. The issuer rating on BESI Brasil remains one notch higher
than its SACP.
"We are maintaining the rating on CreditWatch with negative
implications because we need to reassess the importance and role
of the Brazilian subsidiary in the parent company's strategy going
forward. Despite the downgrade, we see the financial standing of
the Brazilian subsidiary as stable, with favorable growth
prospects. Therefore, we will review the bank's SACP and group
support. We expect to either affirm or lower the rating by
just one notch after this review, which we expect to conclude
within the next three months," S&P added.
==========================
C A Y M A N I S L A N D S
==========================
AMAR LTD: Shareholders' Final Meeting Set for April 29
------------------------------------------------------
The shareholders of Amar Ltd will hold their final meeting on
April 29, 2011, to receive the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
David Dyer
Telephone: (345) 949-8244
Facsimile: (345) 949-5223
P.O. Box 1984, Grand Cayman KY1-1104
Cayman Islands
CARTESIUS ADVISORS: Shareholders' Final Meeting Set for May 2
-------------------------------------------------------------
The shareholders of Cartesius Advisors GP, Ltd will hold their
final meeting on May 2, 2011, at 11:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
Christopher D. Johnson is the company's liquidator.
CITI GOLDENTREE: Shareholders' Final Meeting Set for April 29
-------------------------------------------------------------
The shareholders of Citi Goldentree Ltd. will hold their final
meeting on April 29, 2011, at 9:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Victor Murray
c/o Maples Liquidation Services (Cayman) Limited
P.O. Box 1093, Boundary Hall
Grand Cayman KY1-1102
Cayman Islands
[REDACTED Nov. 12, 2012]
HSBC STRUCTURED: Shareholders' Final Meeting Set for May 5
----------------------------------------------------------
The shareholders of HSBC Structured Notes (Cayman) Limited will
hold their final meeting on May 5, 2011, at 9:20 a.m., to receive
the liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Victor Murray
c/o Maples Liquidation Services (Cayman) Limited
P.O. Box 1093, Boundary Hall
Grand Cayman KY1-1102
Cayman Islands
KENNAMETAL HOLDING: Shareholder to Hear Wind-Up Report on April 26
------------------------------------------------------------------
The shareholder of Kennametal Holding (Cayman Islands) Limited
will receive on April 26, 2011, at 10:00 a.m., the liquidator's
report on the company's wind-up proceedings and property disposal.
The company's liquidator is:
Kevin G. Nowe
1600 Technology Way
Latrobe, PA 15650
U.S.A
Telephone: 724-539-5776
Facsimile: 724-539-3839
LONGPORT FUNDING: Shareholders' Final Meeting Set for April 28
--------------------------------------------------------------
The shareholders of Longport Funding III, Ltd. will hold their
final meeting on April 28, 2011, at 10:45 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers SPV Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
MBF NO.4: Shareholders' Final Meeting Set for April 29
------------------------------------------------------
The shareholders of MBF No.4 Inc. will hold their final meeting on
April 29, 2011, to receive the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
David Dyer
Telephone: (345) 949-8244
Facsimile: (345) 949-5223
P.O. Box 1984, Grand Cayman KY1-1104
Cayman Islands
OCELOT RUSSIAN: Shareholders' Final Meeting Set for April 28
------------------------------------------------------------
The shareholders of Ocelot Russian Generation Inc. will hold their
final meeting on April 28, 2011, at 9:30 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidators are:
Philip N. A. Mosely
Paul G. Travers
P.O. Box 1569, Grand Cayman KY1-1110
Cayman Islands
Telephone: (345) 949 4018
Facsimile: (345) 949 7891
e-mail: general@caymanmanagement.ky
RCF CORP: Shareholders' Final Meeting Set for May 5
---------------------------------------------------
The shareholders of RCF Corp. will hold their final meeting on
May 5, 2011, at 9:10 a.m., to receive the liquidator's report on
the company's wind-up proceedings and property disposal.
The company's liquidator is:
Victor Murray
c/o Maples Liquidation Services (Cayman) Limited
P.O. Box 1093, Boundary Hall
Grand Cayman KY1-1102
Cayman Islands
RISING STAR: Shareholders' Final Meeting Set for April 26
---------------------------------------------------------
The shareholders of Rising Star Diversified Ltd. will hold their
final meeting on April 26, 2011, at 7:00 a.m., to receive the
liquidators' report on the company's wind-up proceedings and
property disposal.
Frederic Berney and Georg Wessling are the company's liquidators.
SP PRODUCTS: Shareholders' Final Meeting Set for April 19
---------------------------------------------------------
The shareholders of SP Products Cayman Co. will hold their final
meeting on April 19, 2011, at 9:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Richard Finlay
c/o Noel Webb
Telephone: (345) 814 7394
Facsimile: (345) 945 3902
P.O. Box 2681, Grand Cayman KY1-1111
Cayman Islands
TOP COMMODITY: Shareholders' Final Meeting Set for April 28
-----------------------------------------------------------
The shareholders of Top Commodity Fund will hold their final
meeting on April 28, 2011, at 10:30 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Corporate Services Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
TURBO CAYMAN: Shareholders' Final Meeting Set for April 28
----------------------------------------------------------
The shareholders of Turbo Cayman Holdings Limited will hold their
final meeting on April 28, 2011, at 11:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Walkers Corporate Services Limited
Walker House, 87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
=========
C H I L E
=========
RADIENT PHARMACEUTICALS: Delays Filing of Annual Report
-------------------------------------------------------
Radient Pharmaceuticals Corporation notified the U.S. Securities
and Exchange Commission that it is unable to file its Form 10-K
for year ended Dec. 31, 2010 in a timely manner because it is not
able to complete its financial statements without unreasonable
effort or expense.
As the Company has disclosed in its previous filings, effective
Sept. 29, 2009, the Company deconsolidated all activity of its
subsidiary, Jade Pharmaceuticals Inc. This decision was based on
several factors, including lack of timely responses from JPI to
the Company's requests for financial information. Unfortunately,
the Company has still not yet received all information requested
from JPI for the Dec. 31, 2010 financial statements and therefore
is unable to begin the valuation process of JPI, which is required
in those statements.
Additionally, in connection with the recent press releases and
notification the Company received from the NSYE Amex on March 16,
2011 about potential noncompliance with certain Amex disclosure
requirements, the Company's Audit Committee has decided to conduct
an investigation of the issues Amex raised in their recent letter.
The Audit Committee has already begun its investigation. Although
the Company does not currently believe that the results of the
Audit Committee's investigation will require any material changes
to the Company's previous filings or disclosure, there can be no
assurance that this will be the case. The Audit Committee has
undertaken to complete its investigation as soon as practicable
and the Company will use its best efforts to file the Annual
Report by April 15, 2011, but there can be no assurance that the
2010 audit will be completed by such date to enable the Company to
file its Annual Report by April 15, 2011.
About Radient Pharmaceuticals
Headquartered in Tustin, Calif., Radient Pharmaceuticals
Corporation -- http://www.Radient-Pharma.com/-- is engaged in the
research, development, manufacturing, sale and marketing of its
ONKO-SURE(TM) a proprietary IVD Cancer Test in the United States,
Canada, China, Chile, Europe, India, Korea, Taiwan, Vietnam and
other markets throughout the world.
Radient said in October 2010 it incurred a trigger event on the
12% Convertible Notes issued in first and second quarter of 2010
due to its failure to have the related registration statement
declared effective by June 1, 2010. The Company filed on Sept. 7,
2010, an Event of Default under those same notes occurred since it
did not hold the related shareholder meeting by August 31, 2010.
As reported in the Troubled Company Reporter on April 19, 2010,
KMJ Corbin & Company LLP, in Costa Mesa, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted that the Company incurred a significant operating
loss and negative cash flows from operations in 2009 and had a
working capital deficit of $4.2 million at Dec. 31, 2009.
The Company's balance sheet at Sept. 30, 2010, showed
$23.56 million in total assets, $34.22 million in total
liabilities, and a stockholders' deficit of $10.66 million.
==================================
D O M I N I C A N R E P U B L I C
==================================
SBARRO INC: Files for Chapter 11 With Pre-Negotiated Plan
---------------------------------------------------------
Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr.
S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million
in debt.
Sbarro said it has reached an agreement with all of its second-
lien secured lenders and approximately 70% of its senior
noteholders on the terms of a reorganization plan that will
eliminate more than half of the Company's total indebtedness.
"We believe this plan represents the best opportunity for Sbarro
to clear a path for future growth by restructuring its debt in an
effective and timely manner," Nicholas McGrane, interim president
and chief executive officer of Sbarro, said in a statement. "We
are a strong company with one of the most recognizable restaurant
brands in the world."
Sbarro disclosed assets of $471 million and debt of
$486.6 million. As of the Petition Date, the Debtors have
outstanding debt obligations in the aggregate principal amount of
$368 million, consisting primarily of:
(a) $172.7 million in secured debt under their first lien
senior secured credit facility, plus $3.5 million in
letters of credit;
(b) $34.2 million in secured debt under their second lien
credit facility; plus fees, costs and other charges and
(c) $157.8 million in senior notes (inclusive of the
$8 million missed interest payment in March, 2011).
The Company is being advised by Kirkland & Ellis LLP, its legal
counsel, and Rothschild, Inc., its financial advisor.
Road to Bankruptcy
The Sbarro family started its business after moving to Brooklyn,
New York, from Naples, Italy, in 1956.
Today Sbarro is a leading, global Italian quick service restaurant
concept with approximately 5,170 employees, 1,045 restaurants
throughout 42 countries, and annual revenues in excess of
$300 million.
Sbarro, however, has struggled since 2007 due to the volatility in
commodity prices and consumer discretionary spending, and the
recent global economic crisis.
Nicholas McGrane, chief executive officer of Sbarro, said in a
court filing, "After being hard-hit during 2007 and 2008 by a
surge in prices for its key raw materials (cheese and flour),
Sbarro's profitability continued to suffer following the fourth
quarter of 2008 and most of 2009 as a result of unprecedented
declines in mall traffic during the height of the economic
recession. Price increases and cost-cutting measures taken to
combat commodity inflation and maintain earnings during this
difficult period contributed to challenges with the brand, and
performance lagged the rebound in mall traffic beginning in early
2010."
At the end of fiscal year 2010, the Company breached a financial
covenant under its first lien credit agreement and began paying
interest at the contractual default rate.
For the past several months, the Debtors, with the assistance of
their advisors, have continued to refine their business plan and
have evaluated and explored strategic alternatives for
restructuring their debt obligations and improving their liquidity
and overall financial condition.
After weeks of extensive negotiations among the Debtors' various
stakeholder constituencies, the Debtors have reached an agreement
with their second lien and noteholder constituents regarding the
terms of a consensual de-leveraging transaction to be implemented
through an expedited chapter 11 process.
Mr. McGrane said, "Sbarro is a strong company with an
unsustainable balance sheet. Faced with inadequate liquidity and
unable to secure the financing necessary to recapitalize outside
of chapter 11, Sbarro has commenced these chapter 11 cases to
obtain access to $35 million in new money debtor in possession
financing and to implement a pre-arranged restructuring that will
eliminate approximately $195 million (more than 50 percent) of
Sbarro's prepetition funded debt, secure a $30 million equity
contribution from existing stakeholders and provide substantial
recoveries to suppliers who continue to do business with the
reorganized company. With a plan support agreement executed by
its second lien lender and holders of approximately 67% in
principal amount of its senior unsecured notes, Sbarro intends to
emerge expeditiously from chapter 11 as a stronger, well-
capitalized and more competitive company."
The Chapter 11 Plan
Under a bankruptcy plan backed by creditors Ares Management LLC
and MidOcean Partners, Sbarro would convert second-lien and bond
debt to equity and raise $30 million in equity through a rights
offering.
MidOcean owns 95% of Sbarro's $34.2 million in second-lien debt
and Ares Management LLC holds a majority of the Company's $150
million in senior notes.
Under the proposed restructuring, the Company expects to reduce
its current debt obligations by approximately $200 million to
approximately $175 million, by converting all of its existing
second-lien debt and senior notes to equity.
The Company is proposing that the remaining debt continue to be
held by the existing first-lien lenders, with the maturity of that
debt extended through the fifth anniversary of the Company's
emergence from Chapter 11.
MidOcean Partners III, L.P. and Ares Corporate Opportunities Fund
II LP have agreed to backstop a $30 million rights offering, the
proceeds of which will be used to repay the DIP and provide the
reorganized business with additional equity capital and liquidity.
The terms of the Chapter 11 plan agreed to by the parties are:
* First lien lenders will receive a new five-year term loan
facility in the amount of $172,700,000.
* Second lien lenders, with an allowed claim of $36,500,000,
will receive 36.5 million shares of new stock of reorganized
Sbarro and may participate in the rights offering.
* Senior noteholders will receive 29 million shares of the new
common stock and will be eligible to participate in the
rights offering.
* Holders of general unsecured claims arising solely from the
receipt of goods and services by the Debtors that will
continue to provide goods and services will receive payment
in full and in cash.
* Holders of other general unsecured claims will receive new
common stock, or new unsecured notes with 6% interest and a
bullet maturity seven years from the Effective Date, or cash.
* Holders of unsecured claims classified as convenience
claims will receive full payment. Convenience claims are
capped at $500,000.
* Holders of existing equity interests will not receive any
distributions.
The agreed equity value for purposes of the Plan is $96.5 million,
assuming no debt other than the New First Lien Credit Facility.
In the rights offering, Reorganized Sbarro will raise $30 million
in cash in exchange for 30 million shares of new common stock to
be issued on the Effective Date at a price of $1.00 per share.
As backstop commitment, MidOcean has committed to purchase
2.5 million of unsubscribed shares and Ares has committed to
purchase 27.5 million shares not sold in the rights offering.
The Company will immediately engage Spencer Stuart to conduct a
search for a Chief Executive Officer.
The Plan Support Agreement provides that the Debtors must file the
Agreed Plan within 40 days after the Petition Date, must receive
confirmation of the Plan within 125 days after the Petition Date,
and must consummate the Plan within 145 days after the Petition
Date.
Sbarro's first lien lenders are not parties to the restructuring
agreement, and the Company is in ongoing discussions with these
lenders regarding the terms of proposed exit financing.
$35 Million of DIP Financing
The Debtor is scheduled to ask a judge today, April 5, for
permission to borrow $16.5 million of a $35 million term loan from
existing first-lien lenders.
The term sheet provides that the DIP facility will mature six
months following the closing date. The DIP facility may be
extended for an additional three months subject to certain
conditions, including payment of a fee.
With respect to the Term Loans, at the option of the Borrower, (a)
LIBOR plus 7.00% (with a LIBOR floor of 1.75%) or (b) Base Rate
plus 6.00%. In addition, a commitment fee of 0.75% shall be
payable on the unused portion of the outstanding Term Loan
Commitments.
Cantor Fitzgerald Securities is the sole lead arranger and book
runner and administrative agent under the DIP facility.
Davis Polk & Wardwell LLP is counsel to the agent.
Under terms of Sbarro's bankruptcy loan, the Company is required
to file in court its reorganization plan within 60 days, win court
approval of the plan within 170 days, and consummate the Plan
within 180 days.
The Company said the DIP financing together with the Company's
cash flow from operations will provide Sbarro with sufficient
liquidity to meet its post-petition operating expenses and
maintain normal operations.
Other Restaurant Chains Sought Ch. 11
Bloomberg News notes that Uno Restaurant Holdings Corp., also an
Italian restaurant chain, filed for bankruptcy in January 2010,
saying the worst economic slump since the Great Depression had
caused more diners to stay home, hurting its 200 U.S. pizzerias.
Restaurant chains including Bennigan's and Steak and Ale, both
owned by Metromedia Restaurant Group, and Buffets Holdings Inc.
filed for bankruptcy in the past three years. Midland Food
Services LLC, the operator of 92 Pizza Hut restaurants in six
states, and Commissary Operations Inc., a distributor of food and
supplies to chains, also sought court protection.
Round Table Pizza Inc., which operates 483 restaurants, filed for
Chapter 11 bankruptcy in February.
SBARRO INC: Case Summary & 40 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Sbarro, Inc.
401 Broadhollow Road
Melville, NY 11747
Bankruptcy Case No.: 11-11527
Debtor-affiliates that filed separate Chapter 11 petitions:
Debtor Case No.
------ --------
Carmela's of Kirkman Operating, LLC 11-11528
Carmela's of Kirkman LLC 11-11529
Carmela's, LLC 11-11530
Corest Management, Inc. 11-11531
Demefac Leasing Corp. 11-11532
Larkfield Equipment Corp. 11-11533
Las Vegas Convention Center LLC 11-11534
Sbarro America Properties, Inc. 11-11535
Sbarro America, Inc. 11-11536
Sbarro Blue Bell Express LLC 11-11537
Sbarro Commack, Inc. 11-11538
Sbarro Express LLC 11-11539
Sbarro Holdings, LLC 11-11540
Sbarro New Hyde Park, Inc. 11-11541
Sbarro of Las Vegas, Inc. 11-11542
Sbarro of Longwood, LLC 11-11543
Sbarro of Virginia, Inc. 11-11544
Sbarro Pennsylvania, Inc. 11-11545
Sbarro Properties, Inc. 11-11546
Sbarro's of Texas, Inc. 11-11548
Sbarro Venture, Inc. 11-11547
Umberto at the Source, LLC 11-11549
Umberto Deer Park, LLC 11-11550
Umberto Hauppauge, LLC 11-11551
Umberto Hicksville, LLC 11-11552
Umberto Huntington, LLC 11-11553
Umberto White Plains, LLC 11-11554
Type of Business: Sbarro Inc. a leading Italian quick service
restaurant concept and the largest shopping
mall-focused restaurant concept in the world.
The Company has 1,056 restaurants in 41
countries.
Web site: http://www.sbarro.com/
Chapter 11 Petition Date: April 4, 2011
Bankruptcy Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Shelley C. Chapman
Debtors'
General
Bankruptcy
Counsel: Edward Sassower, Esq.
Nicole Greenblatt, Esq.
KIRKLAND & ELLIS, LLP
601 Lexington Avenue
New York, NY 10022-4611
Tel: (212) 446-4733
Fax: (212) 446-4900
E-mail: esassower@kirkland.com
ngreenblatt@kirkland.com
Debtors'
Investment
Banker
and
Financial
Advisor: ROTHSCHILD, INC.
Debtors'
Bankruptcy
Consultants: PRICEWATERHOUSECOOPERS LLP
Debtors'
Special
Financial
Advisor: MAROTTA GUND BUDD & DZERA, LLC
Debtors'
Conflicts
Counsel: CURTIS, MALLET-PREVOST, COLT & MOSLE LLP
Debtors'
Claims
Agent: EPIQ BANKRUPTCY SOLUTIONS, LLC
Debtors'
Communications
Advisor: SARD VERBINNEN & CO
Counsel to The
Bank of New York,
as trustee for
the holders of
$150-million of
Senior Notes: Andrew G. Dietderich , Esq.
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004-2498
Fax: (212) 291-9041
Counsel to
MidOcean Partners,
Owner of Sbarro's
$34.2 million in
Second-Lien Debt: Susheel Kirpalani, Esq.
Daniel S. Holzman, Esq.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, New York 10010
Fax: (212) 849-7100
Total Assets: $471,006,000
Total Debts: $486,557,000
The petitions were signed by Stuart M. Steinberg, authorized
signatory.
List of 40 Largest Unsecured Creditors:
Entity/Person Nature of Claim Claim Amount
------------- --------------- ------------
The Bank of New York Indenture $150,000,000
101 Barclay Street
New York, New York 10286
Vistar Corporation Trade $2,339,235
Vistar Distribution Centers
12650 E. Arapahoe Road
Building D
Centennial, Colorado 80112
Pepsi Cola Company Trade $159,267
Hawaiian Housewares Ltd. Trade $47,073
d/b/a Hansen Foodservice
Northstar Research Partners General $45,090
Corporate
Services
Select Produce Inc. Trade $39,276
King Retail Solutions, Inc. Trade $37,534
The Wasserstrom Company Trade $36,304
Radiant Systems, Inc. Trade $33,578
Ecolab Pest Elimination Trade $32,336
P & R Graphics Inc. Trade $31,595
Jersey Lynn Farms, Inc. Trade $31,055
GFS - Henry Lee Co. Trade $29,874
Gordon Food Service
Carl Mazzella Trade $23,856
d/b/a C. Mazella's Market
Sysco Food Services of Trade $23,765
South Florida
ITW Food Equipment Group LLC Trade $22,361
Mancini Trading Inc. Trade $19,762
Pepsi Cola Bottling Company Trade $19,718
Ben's Produce, Inc. Trade $18,069
Ferraro Foods Inc. Trade $17,130
Coastal Sunbelt Produce Co Trade $16,176
Cesare's Fruit Co. Trade $16,167
Cheney Brothers, Inc. Trade $16,159
Aramark Uniform Services Trade $16,073
Fireserv. Trade $15,740
Seyed-H Hashemi-Sohi Trade $15,689
d/b/a Sam's Produce
Steiner Corporation Trade $15,226
d/b/a Alsco American Linen
Sysco Las Vegas Inc. Trade $14,509
Leonardo Maniaci Trade $13,675
d/b/a Leonardo's Produce
Mike & Randy Inc. Trade $13,158
Carmen Muni Trade $13,109
d/b/a George's Market
Sysco Food Services of Central Trade $13,046
Florida, Inc.
Emkay Inc. Trade $12,963
Cintas Corporation Trade $12,797
Commercial Services, Inc. Trade $12,325
Pepsi Bottling Ventures LLC Trade $12,248
Salinaro Wholesale Meats Inc. Trade $11,998
Duck Delivery Produce Trade $11,843
Desert Produce Sales Trade $11,828
Cigna Healthcare Trade $11,757
=============
J A M A I C A
=============
AIR JAMAICA: Caribbean Airlines Merger May Fail, Lawyer Says
------------------------------------------------------------
Air Jamaica's planned merger with Caribbean Airlines is at risk of
not being finalized prior to the April 30 deadline, Vernon
Khelawan at the Jamaica Observer reports, citing a Canadian
aviation lawyer as saying.
According to the Observer, Jamaican authorities are pressing for
deal which would see Caribbean Airlines Limited buying out Air
Jamaica to be sealed as soon as possible, but sources say that the
powers that be are looking for an excuse not to sign.
The Observer relates that Caribbean Airlines has until April 30 to
reject the deal.
The Observer quoted the Canadian lawyer as saying, "An independent
survey is the key going forward. Without the conclusion of an
independent study as to the viability of a regional airline based
on Caribbean Airlines, Air Jamaica and LIAT (in any combination),
the only logical choice for Trinidad and Tobago would be to
exercise its right to walk away from the initial merger. There is
a very serious possibility, if not yet a probability, that the
current Caribbean Airlines-Air Jamaica merger will not be
finalized prior to the April 30 deadline -- whether because of the
shelving pro tem of the CAL board results in no decision being
made, or because of a conscious decision on the part of the
government of Trinidad and Tobago to cut its losses and retrench
to a more limited airline role."
About Air Jamaica
Headquartered in Kingston, Jamaica, Air Jamaica Limited --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 23, 2010, Trinidad and Tobago Caribbean Airline on May 1,
2010, acquired Air Jamaica for US$50 million and operated six Air
Jamaica aircraft and eight of its routes. Jamaica got a 16% stake
in the merged operation, with CAL owning 84%. According to a TCR-
LA report on June 29, 2009, RadioJamaica News said the Jamaican
government indicated it will name a buyer for cash-strapped Air
Jamaica. RadioJamaica related the airline has been hemorrhaging
over US$150 million per annum and the government has had to foot
the massive bill. In addition, RadioJamaica said, Air Jamaica
currently has over US$600 million in loans outstanding.
As of August 18, 2010, the airline continues to carry Moody's "B3"
long-term corporate family, and senior unsecured debt ratings.
AIR JAMAICA: JALPA Wins Representational Rights for Pilots
----------------------------------------------------------
RJR News reports that the Jamaica Airline Pilots Association
reapplied and won representational rights for Air Jamaica pilots.
According to RJR News, Kavon Gayle, president-general of JALPA
affiliate Bustamante Industrial Trade Union, said that JALPA
reapplied "because of the change of the company. New holding
company, CARIBAL has been formed to operate Air Jamaica and
Caribbean Airlines and so JALPA had to resubmit claims again for
representational rights."
Headquartered in Kingston, Jamaica, Air Jamaica Limited --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 23, 2010, Trinidad and Tobago Caribbean Airline on May 1,
2010, acquired Air Jamaica for US$50 million and operated six Air
Jamaica aircraft and eight of its routes. Jamaica got a 16% stake
in the merged operation, with CAL owning 84%. According to a TCR-
LA report on June 29, 2009, RadioJamaica News said the Jamaican
government indicated it will name a buyer for cash-strapped Air
Jamaica. RadioJamaica related the airline has been hemorrhaging
over US$150 million per annum and the government has had to foot
the massive bill. In addition, RadioJamaica said, Air Jamaica
currently has over US$600 million in loans outstanding.
As of August 18, 2010, the airline continues to carry Moody's "B3"
long-term corporate family, and senior unsecured debt ratings.
JAMAICA DIVERSIFIED: Fitch Affirms Ratings on 2 Notes at 'BB'
-------------------------------------------------------------
Fitch Ratings has affirmed Jamaica Diversified Payment Rights
Company's series 2006-1 and series 2007-1 notes at 'BB'. The
Rating Outlook is Stable.
The rating reflects structural mitigants to several sovereign and
bank risks associated with Jamaica and NCB, allowing the rating of
the securitization to reach 'BB'. The rating also reflects the
strength of the bank's diversified payment rights (DPR) flows and
coverage levels and the legal structure of the transaction.
Quarterly coverage levels for the program during 2010 averaged
approximately 50 times (x) maximum quarterly debt service.
The transaction is a securitization of existing and future U.S.
dollar-denominated DPRs originated by National Commercial Bank of
Jamaica Limited (NCB). Upon their generation, the trust will have
rights to the DPRs through accounts maintained with designated
depositary banks (DDBs). DPRs refer to electronic payment orders
intended for payment to third party beneficiaries via NCB (i.e.
international trade financed by NCB, export remittances, workers
remittances, foreign direct investment, etc).
The assigned 'BB' rating is higher than Jamaica's long-term
foreign and local currency Issuer Default Ratings (IDR) of 'B-',
as the transaction mitigates certain sovereign risks associated
with Jamaica. All DDBs have signed Notice and Acknowledgment
Agreements that obligate them to deposit DPR collections into a
designated collection account controlled by the indenture trustee,
and large coverage levels ensure that the incentive for government
interference remains low. On average, over 97% of all collections
currently come via DDB transactions.
In February and March of 2011, Fitch affirmed Jamaica's Sovereign
IDR and NCB's IDR, respectively. The Sovereign rating action
reflects Fitch's view of Jamaica's high institutional strength,
which has allowed it to provide policy responses to significant
fiscal challenges and balance-of-payments pressures over the
years. The authorities also continue to make steady progress in
meeting the quantitative targets and implementing the reform
initiatives agreed as part of the IMF Stand-By Agreement (SBA),
reflecting their strong commitment to maintaining investor
confidence and stability.
The rating action on NCB reflects its strong domestic franchise
and stable profitability, as well as its high exposure to
sovereign debt and government entities, which comprised
approximately 59% of NCB's assets at September 2010. The bank's
Rating Outlook is in line with Fitch's view of the sovereign's
creditworthiness.
NCB is currently the largest bank in the Jamaican system,
accounting for 39% of the system's assets at September 2010.
Fitch currently rates NCB's IDR at 'B-' with a Stable Outlook.
JAMALCO: Still Owns Clarendon Alumina, Sale Deadline Passes
-----------------------------------------------------------
RJR News reports that the government of Jamaica was unable to sell
Clarendon Alumina Partners, an entity through which the government
holds a 45% stake in JAMALCO (Alcoa Minerals of Jamaica) by the
March 31 deadline.
As reported by the Troubled Company Reporter on March 24, 2011,
the RJR News said that the government might not be able to meet
its March 31 deadline.
According to RJR News, the government hasn't given another
timetable for completing the divestment negotiations.
JAMALCO (Alcoa Minerals of Jamaica) is a wholly owned subsidiary
of Alcoa. JAMALCO mines bauxite and refines it into alumina
before exporting the alumina from its port at Rocky Point,
Clarendon.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 13, 2009, Radio Jamaica News said Alcoa plans to cut
13,500 jobs, or 13% of the work force in Jamaica, because of the
global slowdown. Alcoa is also selling four business units and
reducing output to save money, the report noted. Caribbean Net
News said the government is holding talks with potential
purchasers for its 45% stake in the Jamalco refinery in south-
central parish of Clarendon. Aluminum giant Alcoa holds 55% of
the company, which has a production capacity of 1.4 million tons
of alumina.
===========
M E X I C O
===========
AMERICAN APPAREL: May File for Chapter 11 Due to Liquidity Woes
---------------------------------------------------------------
American Apparel, Inc., if unable to improve its operating
performance and financial position, obtain alternative sources of
capital or otherwise meet its liquidity needs, may need to
voluntarily seek protection under Chapter 11 of the U.S.
Bankruptcy Code, the retailer said in its annual report on Form
10-K filed with the U.S. Securities and Exchange Commission.
American Apparel reported a net loss of $86.31 million on
$532.99 million of net sales for the year ended Dec. 31, 2010,
compared with net income of $1.11 million on $558.77 million of
net sales during the prior year.
The Company's balance sheet at Dec. 31, 2010 showed
$327.95 million in total assets, $252.93 million in total
liabilities and $75.02 million in total stockholders' equity.
Marcum LLP, in New York, in its audit report on American Apparel's
financial statements for the year ended Dec. 31, 2010, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has incurred a substantial loss from operations and had negative
cash flow from operations for the year ended Dec. 31, 2010. As a
result of noncompliance with certain loan covenants, debt with
carrying value of approximately $138.0 million at Dec. 31, 2010,
could be declared immediately due and payable. Notwithstanding
the foregoing, the Company has minimal availability for additional
borrowings from its existing credit facilities, which could result
in the Company not having sufficient liquidity or minimum cash
levels to operate its business.
The Company said in its Form 10-K, "We are currently experiencing
significant liquidity constraints. If we are not able to generate
sufficient cash flow from operations or obtain external sources of
financing sufficient to fund our debt service requirements and
operational needs in the near future, or we are not able to
successfully or efficiently implement the strategies that we are
pursuing to improve our operating performance and financial
position, and may determine that it is in American Apparel's best
interests to voluntarily seek relief through a pre-packaged, pre-
arranged or other type of filing under Chapter 11 of the U.S.
Bankruptcy Code, including prior to the time we would otherwise be
required to do so in an acceleration event. Seeking relief under
the U.S. Bankruptcy Code, if such relief does not lead to a quick
emergence from Chapter 11, could materially adversely affect the
relationships between us and our existing and potential customers,
employees, suppliers, partners and others. Further, if we were
unable to implement a plan of reorganization or if sufficient
debtor-in-possession financing were not available, we could be
forced to liquidate under Chapter 7 of the U.S. Bankruptcy Code."
A full-text copy of the Annual Report is available for free at:
http://is.gd/Ar9Uqh
The Associated Press, which earlier reported about American
Apparel's bankruptcy warning, notes that the Company has been
plagued by problems. The AP relates that: in October the Company
amended a credit agreement with Lion Capital; that same month it
avoided being delisted by the New York Stock Exchange Amex LLC
after submitting a plan related to its financial filings; and a
former worker also has sued founder Dov Charney, alleging he
sexually abused her.
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.
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."
ENIVA USA: Has Green Light to Transfer Headquarters
---------------------------------------------------
Dow Jones' DBR Small Cap reports that Eniva USA Inc. will move its
corporate headquarters, now situated in suburban Minneapolis,
after getting permission from a bankruptcy judge to reject its
lease. U.S. Bankruptcy Judge Robert J. Kressel approved a request
from company executives to break the lease agreement for their
company's 435,000-square-foot building, court papers show,
satisfying a goal that Eniva identified as its main reason for
filing for Chapter 11 protection last month. DBR notes Chief
Executive Andrew Baechler said his company leased the space, which
was bigger than what the company needed, at the advice from real-
estate consultants who allegedly demonstrated "unscrupulous
business behavior" by failing to disclose complicated financial
relationships involving the site.
About Eniva USA
Anoka, Minnesota-based Eniva USA, Inc., fka Eniva, Inc., has been
engaged in the development, production and sale of nutritional
supplements since 1998. It is a wholly owned subsidiary of
Wellspring International, Inc. It sells its products throughout
the U.S. through a network of approximately 25,000 active
independent sales representatives, each under non-exclusive
membership contract with the Debtor. It also sells its products
in Mexico, Puerto Rico, Bermuda, Canada and the U.K. through non
Debtor affiliates owned by Wellspring.
Eniva USA filed for Chapter 11 bankruptcy protection (Bankr. D.
Minn. Case No. 11-41414) on March 1, 2011. Michael F. McGrath,
Esq., at Ravich Meyer Kirkman & Mcgrath Nauman, serves as the
Debtor's bankruptcy counsel. The Debtor estimated its assets and
debts at $10 million to $50 million.
MESA AIR: Final Fee Applications Filing Deadline Set at May 2
-------------------------------------------------------------
The Third Amended Joint Plan of Reorganization of Mesa Air Group,
Inc. and its affiliated debtors became effective on March 1,
2011.
Pursuant to the Plan, each professional seeking an award by the
U.S. Bankruptcy Court for the Southern District of New York of
Professional Fees must file their final applications for
allowance of compensation for services rendered and reimbursement
of expenses incurred through the Effective Date on or before the
60th day after the Effective Date, or May 2, 2011.
Professionals who fail to file their Final Fee Applications by
the Professional Fees Bar Date will be forever barred from an
award of Professional Fees against the Debtors and sharing in any
distribution under the Plan.
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on January 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: Enters Deal With U.S. Bank on Aircraft Rejection Claims
-----------------------------------------------------------------
Pursuant to the Third Amended Joint Plan of Reorganization, the
Reorganized Mesa Air Group, Inc., and its affiliated Reorganized
Debtors and its affiliated Liquidating Debtors -- Post-Effective
Date Debtors -- entered into a post-Effective Date settlement
agreement with U.S. Bank National Association, in its capacity as
indenture trustee, and Wells Fargo Bank Northwest, N.A., in its
capacity as owner trustee, regarding claims arising from the
rejection of aircraft leases.
The Reorganized Debtors emerged from bankruptcy on March 1, 2011.
To recall, the Settlement Procedures Order permits the Post-
Effective Date Debtors to settle general unsecured claims equal
to or less than $250,000 and administrative, priority or secured
claims equal to or less than $150,000 without Court approval or
the consent of any other party-in-interest. Settlements of
general unsecured claims over $250,000 and administrative,
priority or secured claims over $150,000 require the Post-
Effective Date Debtors to submit a proposed settlement for
approval to the Post-Effective Date Committee.
Before the Petition Date, Wells Fargo leased three de Havilland
DCH 8-202 aircraft to Mesa Airlines, Inc. pursuant to written
lease agreements. Mesa Air Group guaranteed the Leases. The
Aircraft were owned by trusts, of which Wells Fargo is trustee
and Wells Fargo Equipment Finance, Inc. is the beneficial owner.
Export Development Corporation, in its capacity as loan
participant, financed the purchase of the Aircraft by the Trusts,
and in turn, the Trusts granted security interests in each of the
Aircraft to U.S. Bank, as security trustee, for the benefit of
EDC.
The Debtors and EDC also entered into a Section 1110(b)
Stipulation to extend the 60-day period set forth in Section
1110(a)(2) of the Bankruptcy Code, which stipulation also
established terms for the Debtors' postpetition use, surrender,
and return of the Aircraft.
The Debtors' rejection of the Leases for the Aircraft bearing
federal Registration Nos. N444YV, N447YV, and N448YV became
effective on May 6, 7, and 10, 2010. On September 29, 2010, the
Aircraft were sold to third parties and the sale proceeds were
paid to EDC to satisfy the loans EDC provided to the Trusts, with
the balance of the sale proceeds paid to the Trusts. As a
result, EDC's loans to the Trusts have been paid in full and the
security interests in each of the Aircraft that the Trusts
granted to U.S. Bank, for the benefit of EDC, have been
terminated.
Several claims relating to damages arising from the rejection of
the Leases and for attorneys' fees and costs were filed against
Mesa Airlines and Mesa Air Group.
Creditor Claim No. Amount
-------- --------- ------
U.S. Bank 794 $5,768
800 $5,555
907 $5,768
910 $5,555
927 $5,555
1233 $4,591,228
1234 $4,591,228
1235 $4,626,206
1236 $4,626,206
1237 $4,618,226
1238 $4,618,226
Wells Fargo 1332 $13,655,661
1333 $13,655,661
Settlement Agreement
After good-faith and arms-length negotiations, the Post-Effective
Date Debtors, U.S. Bank, and Wells Fargo have reached a
settlement resolving the issues that are or may be raised with
respect to the amounts of the Claims. The salient terms of the
Settlement Agreement include:
(a) The methodology that will be used to calculate the
prepetition general unsecured claims related to the
rejection of the Leases will be the "Rejection Damage
Claim Methodology" set forth in the Order Authorizing the
Debtors to Approve Determination, Settlement, and
Allowance of Certain Claims Arising from the Rejection of
Aircraft Related Leases and Related Procedures --
Rejection Claims Settlement Order.
The Methodology provides that upon rejection, the
prepetition general unsecured claim against Mesa Airlines,
Inc. or Mesa Air Group, Inc., as applicable for the
rejection of the aircraft counterparties, will be the sum
of the following: (i)(A) the amount under the applicable
aircraft-related agreement as the "Stipulated Loss Value"
or the equivalent term as of the Petition Date, less
(B) any postpetition payments made by the Debtors under
the terms of the applicable Section 1110(b) Stipulation,
plus (ii) any unpaid prepetition rent or installment
payments, plus (iii) any swap breakage or hedging fees
that are attributable to the affected aircraft that the
Debtors are liable under any applicable agreements or
otherwise, plus (iv) a fixed cost of $75,000 per aircraft
-- except for the following aircraft transactions, in
Which case the fixed amount is $60,000 per aircraft:
N434YV, N436YV, N437YV, N449YV, N444YV, N447YV, N448YV,
N445YV, N446YV, N454YV, N455YV, N456YV, N17156, N27172,
N27173, N37178, N77181, and N27185 -- relating to
technical inspection fees, legal fees, and other
reimbursement and indemnification requirements under the
applicable aircraft-related agreement.
The Stipulated Loss Value is a liquidated damage formula
that is often calculated by multiplying the purchase price
of the aircraft by percentage of the purchase price that
decreases as the lease or security agreement approaches
its term.
(b) For the purpose of the Rejection Damage Claim Methodology,
the Stipulated Loss Value for the Aircraft are:
$4,531,228.81 (N444YV); $4,558,226.42 (N447YV) and
$4,566,206.73 (N448YV).
(c) Using the Methodology and after crediting the net proceeds
from the sale of the Aircraft, Claim No. 1332 will be
$6,170,278, and Claim No. 1333 will be $6,170,278.
(d) Pursuant to Section 502 and Bankruptcy Rule 9019, Claim
No. 1332 will be deemed amended by the Settlement
Agreement and reduced to $6,170,278, and Claim No. 1333
will be deemed amended by the Settlement Agreement and
reduced to $6,170,278.
Claim No. 1332 will be an Allowed Class 3(e) General
Unsecured Claim against Mesa Airlines. Claim No. 1333
will be an Allowed Class 3(a) General Unsecured Claim
against Mesa Air Group. With the consent of the Post-
Effective Date Committee, Claim Nos. 1332 and 1333 will
not be subject to any further objection by any party-in-
interest.
(e) U.S. Bank consents to the expungement and disallowance of
Claim Nos. 794, 800, 907, 910, 927, 1233, 1234, 1235,
1236, 1237, and 1238.
(f) Each party will be responsible for the costs and expenses
it incurred in negotiating, drafting, and executing the
Settlement Agreement.
(g) The allowance of Claim Nos. 1332 and 1333 is in full and
final satisfaction of all claims of U.S. Bank and Wells
Fargo related to the Aircraft. Effective upon execution
of the Settlement Agreement, Wells Fargo and U.S. Bank
release all claims against the Debtors that are in any way
related to the Aircraft, the Leases, the guarantees of the
Leases and the Section 1110(b) Stipulation.
The components of Claim Nos. 1332 and 1333 are set forth on the
schedules available for free at:
http://bankrupt.com/misc/Mesa_PostEffDAgrRejClms031511.pdf
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on January 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: Resolves Bombardier Administrative Claims
---------------------------------------------------
Mesa Air Group and its affiliates ask the Bankruptcy Court to
approve a settlement agreement with (i) Bombardier Services
Corporation and (ii) Bombardier Capital Inc. to resolve issues
that are or may be raised with respect to the amounts of certain
administrative claims asserted by Bombardier.
Before the Petition Date, Mesa Airlines, Inc., leased from
various owner trustees two Canadian Regional Jet CL-600-2B19 in
which BCI was the Loan Participant and Controlling Party that
financed the owner trustees' purchase of the CRJ 200 aircraft.
Mesa Airlines also leased from BSC two CRJ 200 aircraft. Mesa
Air Group, Inc. guaranteed Mesa Airlines' obligations under the
BCI Leases and the BSC Leases.
On March 4, 2010, the Debtors filed a notice electing to perform
their obligations under one of the BCI Leases.
On March 9, 2010, the parties entered into a stipulation pursuant
to Section 1110(b) of the Bankruptcy Code to extend the 60-day
period set for in Section 1110(a)(2) of the Bankruptcy Code and
to establish the terms and conditions for the Debtors'
postpetition use, surrender and return of the CRJ 200 aircraft
leased by Bombardier upon the Debtors' rejection of the BSC
Leases. The Debtors subsequently rejected the BCI Leases and the
BSC Leases pursuant to the Court's February 23, 2010 rejection
Procedures Order.
The Court's March 26, 2010 Bar Date Order established May 21,
2010 as the deadline to file proofs of claim by all creditors
other than governmental units against the Debtors.
Bombardier filed certain claims asserting administrative claims
against Mesa Airlines on account of purported breaches of the
Section 1110 Agreement in connection with the rejection of the
BCI Leases and BSC Leases.
Claim No. Amount
--------- ------
1428 $750,000
1446 $1,443,797
1453 $1,648,554
The salient terms of the settlement agreement include:
(a) The liquidated amount of the Asserted Administrative
Claims will be reduced to and allowed in the aggregate
amount of $321,000. The Allowed Administrative Claim will
not be subject to any further objection by any party-in-
interest. Mesa Airlines will pay the Allowed
Administrative Claim to Bombardier by wire transfer in
immediately available funds.
(b) Upon the Court's approval of the settlement agreement, the
Debtors' claims agent is directed to modify Claim No. 1453
and to expunge Claim Nos. 1428 and 1446, and any other
administrative expense claims filed by Bombardier related
to the Aircraft Leases that have not otherwise been
allowed pursuant to separate order of the Court.
(c) Each party will be responsible for costs and expenses it
incurred in negotiating, drafting, and executing the
settlement agreement.
The settlement agreement will not have any effect upon the
allowance of the BSC/BCI General Unsecured Claims pursuant to the
BSC/BCI General Unsecured Claims Allowance Order.
The general unsecured claims of Bombardier arising from the
rejection of the BSC Leases and the BCI Leases, in addition to
the resolution of other general unsecured claims, were resolved
and allowed pursuant to the Order Authorizing Debtors to (I)
Assume Master Purchase Agreement, as Amended, with Bombardier,
Inc., (II) Settle Certain Claims Between the Debtors and
Bombardier Inc. Arising Under the Master Purchase Agreement, and
(III) Settle Certain Claims Asserted Against the Debtors by
Bombardier Capital Inc. and Bombardier Service Corporation.
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
Jan. 5 in New York (Bankr. S.D.N.Y. Case No. 10-10018), listing
assets of $976 million against debt totaling $869 million as of
Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on January 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
QUINTANA ROO: Moody's Cuts Global Scale Issuer Rating to 'Ba2'
--------------------------------------------------------------
Moody's de Mexico downgraded the issuer ratings of the State of
Quintana Roo to A2.mx from A1.mx (Mexico National Scale) and to
Ba2 from Ba1 (Global Scale, local currency). At the same time,
Moody's revised the outlook on the issuer ratings to negative from
stable.
Ratings Rationale
The downgrade of the issuer ratings reflects the recent
deterioration of Quintana Roo's financial performance on an
absolute basis and relative to peers. This deterioration
includes: 1) the recording of sizable consolidated fiscal deficits
in 2009 and 2010, 2) recent increases in debt metrics, and 3) a
contraction in net working capital (current assets less current
liabilities) due to the issuance of short term debt and increases
in accounts payable.
In 2009 and 2010, Quintana Roo posted cash financing requirements
equivalent to -12.3% of total revenues, on average, as a result of
an expansion of the state's capital program and an increase in
transfer payments to state entities. This marked a significant
deterioration from the state's financial performance from 2005-
2008, when it posted cash financing surpluses averaging 2.6% of
total revenues.
As a result of these cash financing requirements over the past two
years, Quintana Roo's net direct and indirect debt reached 37.7%
of total revenues in 2010, well above the median of Ba rated
Mexican states, up from just 14.2% in 2008. While the impact of
the additional debt on the state's debt service costs will be
delayed given the grace periods for principal payment of 18-24
months, in two years the state's debt service costs will be
equivalent to an estimated 4% of total revenues, up from 1.7% in
2010.
Furthermore, given the increase in accounts payable to suppliers
and substantial short term borrowings, net working capital
(current assets less current liabilities) decreased to -13.8% of
total expenditures in 2010, from a positive average of 0.4%
registered from 2005 to 2009.
The negative outlook reflects Moody's expectation that the recent
deterioration of key credit factors is likely to continue over the
next two years, notwithstanding the plans of new administration,
which will take power in April, to redress fiscal challenges by
implementing measures on both the expenditure and revenue sides of
the ledger.
Given the magnitude of recent cash financing requirements, in
conjunction with the deterioration in net working capital and
debt metrics, Quintana Roo faces significant challenges to
address state finances over the near to medium term. The
ratings are likely to face further downward pressure unless
the new administration, which will take power in April 2011,
successfully redresses these challenges with its planned
expenditure austerity program and initiatives to increase
revenues.
In addition to these challenges, Moody's will also monitor closely
any changes to the state's plans to pay off all short term debt
with one-time asset sales in 2011. If the state fails to address
its fiscal situation as well as refinance its short-term debt with
longer-term debt, the rating could potentially be downgraded by
more than one notch to reflect increased refinancing risk.
Although Moody's does not anticipate upward pressure over the near
term, a structural realignment of revenue and expenditure growth
rates, leading to a) a sustainable correction of the negative
consolidated fiscal results, b) stabilization of net direct and
indirect debt at current levels, and c) a return of net working
capital to positive levels, could result in a stabilization of the
outlook.
The last rating action with respect to IDEFIN and the State of
Quintana Roo was taken on February 10, 2011, when Baa2/Aa2.mx
ratings were assigned to the following two state loans (original
face value):
-- Scotiabank: MXN700 million
-- Banorte: MXN700 million
The principal methodologies used in this rating were Regional and
Local Governments Outside the U.S., published in May 2008, and The
Application of Joint Default Analysis to Regional and Local
Governments published in December 2008.
SEAHAWK DRILLING: Hercules Can Proceed With Acquisition Plan
------------------------------------------------------------
James W. Noe, Senior Vice President, General Counsel and Chief
Compliance Officer of Hercules Offshore Inc., said in a regulatory
filing with the Securities and Exchange Commission, on March 30,
2011, the Company received notice of the early termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, in connection with the announced planned
acquisition by Hercules and its wholly owned subsidiary, SD
Drilling LLC, of 20 jackup rigs and related assets and enumerated
liabilities from Seahawk Drilling, Inc. and certain of its
subsidiaries.
According to the filing the transaction will be effectuated
pursuant to Section 363 of the Bankruptcy Code, and closing is
subject to bankruptcy court approval as well as other conditions
as provided in the asset purchase agreement. Assuming such
conditions are achieved, the Company anticipates closing of this
transaction to occur during the second quarter of 2011.
Dow Jones says Hercules agreed in February to acquire Seahawk's 20
shallow-water drilling rigs and other assets for about $100
million in cash and stock.
About Seahawk Drilling
Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup
rig business in the United States, Gulf of Mexico, and offshore
Mexico. It offers rigs and drilling crews on a day rate
contractual basis.
The Company and several affiliates filed for Chapter 11 bankruptcy
protection on Feb. 11, 2011 (Bankr. S.D. Tex. Lead Case Nos.
11-20089). The Debtors disclosed $504,897,000 in total assets and
$124,474,000 in total debts as of the Petition Date.
Berry D. Spears, Esq., and Johnathan Christiaan Bolton, Esq., at
Fullbright & Jaworkski L.L.P., serve as the Debtors' bankruptcy
counsel. Jordan, Hyden, Womble, Culbreth & Holzer, P.C., serves
as the Debtors' co-counsel. Alvarez and Marsal North America,
LLC, is the Debtors' restructuring advisor. Simmons And Company
International is the Debtors' transaction advisor. Kurtzman
Carson Consultants LLC is the Debtors' claims agent.
Judy A. Robbins, U.S. Trustee for Region 7, appointed three
creditors to serve on an Official Committee of Unsecured Creditors
of Seahawk Drilling Inc. and its debtor-affiliates. Heller,
Draper, Hayden, Patrick & Horn, L.L.C., represents the creditors
committee.
The U.S. Trustee also established an Official Committee of Equity
Security Holders, which is represented by Charles R. Gibbs, Esq.
-- cgibbs@akingump.com -- at Akin Gump Strauss Hauer & Feld LLP.
The Equity Panel also tapped Duff & Phelps Securities, LLC, as its
financial advisors.
Seahawk filed for Chapter 11 bankruptcy with a contract for
selling the business to competitor Hercules Offshore Inc. under
in a transaction valued at $105 million. The price includes
$25 million cash and 22.3 million Hercules shares. Seahawk said
the sale should pay funded debt and trade suppliers in full.
SEAHAWK DRILLING: Has Final OK to Employ PR Firm Sitrick
--------------------------------------------------------
Seahawk Drilling Inc. and its debtor-affiliates won authority, on
a final basis, to employ Sitrick & Co. Inc. as their corporate
communications consultant. The Court order acknowledges that
Sitrick holds no interest adverse to the Debtors, their estates,
or their creditors. The Court also approved the indemnification
and arbitration provisions of the engagement letter.
On the Net: http://sitrick.com/
About Seahawk Drilling
Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup
rig business in the United States, Gulf of Mexico, and offshore
Mexico. It offers rigs and drilling crews on a day rate
contractual basis.
The Company and several affiliates filed for Chapter 11 bankruptcy
protection on Feb. 11, 2011 (Bankr. S.D. Tex. Lead Case Nos. 11-
20089). The Debtors disclosed $504,897,000 in total assets and
$124,474,000 in total debts as of the Petition Date. Debtor
Seahawk Drilling Inc. disclosed $208,190,199 in total assets and
$438,458,460 in total liabilities in amended schedules filed with
the Court.
Berry D. Spears, Esq., and Johnathan Christiaan Bolton, Esq., at
Fullbright & Jaworkski L.L.P., serve as the Debtors' bankruptcy
counsel. Jordan, Hyden, Womble, Culbreth & Holzer, P.C., serves
as the Debtors' co-counsel. Alvarez and Marsal North America,
LLC, is the Debtors' restructuring advisor. Simmons And Company
International is the Debtors' transaction advisor. Kurtzman
Carson Consultants LLC is the Debtors' claims agent.
Judy A. Robbins, U.S. Trustee for Region 7, appointed three
creditors to serve on an Official Committee of Unsecured Creditors
of Seahawk Drilling Inc. and its debtor-affiliates. Heller,
Draper, Hayden, Patrick & Horn, L.L.C., represents the creditors
committee.
The U.S. Trustee also established an Official Committee of Equity
Security Holders, which is represented by Charles R. Gibbs, Esq.,
at Akin Gump Strauss Hauer & Feld LLP. The Equity Panel also
tapped Duff & Phelps Securities, LLC, as its financial advisors.
Seahawk filed for Chapter 11 bankruptcy with a contract for
selling the business to competitor Hercules Offshore Inc. under
in a transaction valued at $105 million. The price includes
$25 million cash and 22.3 million Hercules shares. Seahawk said
the sale should pay funded debt and trade suppliers in full.
VITRO SAB: Judge to Rule on Involuntary Chapter 11 Petition
-----------------------------------------------------------
Bill Rochelle, Bloomberg News' bankruptcy columnist, reports that
Vitro SAB opposed involuntary filings against U.S. subsidiaries,
prompting the bankruptcy judge in Fort Worth, Texas, to hold a
two-day trial on March 31 and April 1. When the trial ended, U.S.
Bankruptcy Judge Russell Nelms said he would rule later, without
giving a date.
Mr. Richelle notes a business can be forced into bankruptcy
involuntarily if it's shown that the company isn't "generally"
paying its debts as they come due. Vitro SAB has been in default
on $1.2 billion in bonds for two years. Vitro, however, argued
that the U.S. subsidiaries are immune from involuntary bankruptcy
because they are paying all their debts aside from the notes. The
U.S. subsidiaries guaranteed the notes.
According to Mr. Rochelle, the Company's legal director, Alejandro
Sanchez, said Vitro would seek a buyer for the U.S. companies if
they are put into bankruptcy reorganization involuntarily.
Mr. Rochelle also reports that just before the trial on the
involuntary petition began, Vitro sustained a defeat when the
bankruptcy judge in Fort Worth, Texas, refused to allow additional
defenses. The judge said Vitro couldn't argue that the creditors
lacked standing to file the involuntary petition because they
weren't registered holders of the notes. The judge also precluded
Vitro from arguing that the creditors weren't in good faith
because they attempted to frustrate the company's restructuring
efforts.
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.
Vitro is the largest manufacturer of glass containers and flat
glass in Mexico, with consolidated net sales in 2009 of MXN23,991
million (US$1.837 billion).
Vitro defaulted on its debt in 2009, and is now seeking to
restructure around US$1.5 billion in debt, including US$1.2
billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in debt
from bondholders. The tender offer would be consummated with a
bankruptcy filing in Mexico and Chapter 15 filing in the United
States. Vitro said noteholders would recover as much as 73% by
exchanging existing debt for cash, new debt or convertible bonds.
The offer was to expire Dec. 7, 2010.
Noteholders who oppose the exchange, namely Knighthead Master
Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson
Kempner Distressed Opportunities Fund LP, and Brookville Horizons
Fund, L.P. -- which hold US$75 million, or approximately 6% of the
outstanding bond debt -- commenced involuntary bankruptcy cases
under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset
Corp. (Bankr. N.D. Tex. Case No. 10-47470) and nine other
affiliates on Nov. 17, 2010.
Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
Counsel to analyze the potential rights that Vitro may exercise in
the United States against the ad hoc group of dissident
bondholders and its advisors.
A larger group of noteholders, known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has expressed
concerns over the exchange offer. The group says the exchange
offer exposes Noteholders who consent to potential adverse
consequences that have not been disclosed by Vitro. The group is
represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at
White & Case LLP.
The U.S. affiliates subject to the involuntary petitions are Vitro
Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No. 10-
47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473);
Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super
Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky
International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP
Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47477); Amsilco
Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O.
Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger
Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa
Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance
Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass,
Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC
(Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC
(Bankr. N.D. Tex. Case No. 10-47485).
Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for Civil
and Labor Matters for the State of Nuevo Leon, thereby commencing
its voluntary concurso mercantil proceedings. Vitro SAB believes
that, as a result of the implementation of the Concurso Plan
through the Mexican Proceeding, the holders of the Restructured
Debt will recover 68% to 75% of the face value of their respective
claims.
Vitro SAB also commenced parallel proceedings under Chapter 15 of
the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in
Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference
to its bankruptcy proceedings in Mexico.
Alejandro Francisco Sanchez-Mujica, as foreign representative of
Vitro, has asked the U.S. Bankruptcy Court to enter an order
recognizing the Mexican Proceeding as "foreign main proceeding"
pursuant to 11 U.S.C. Sections 1515 and 1517.
Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings. The judge said Vitro couldn't push through
a plan based on the vote of $1.9 billion of intercompany debt when
third-party creditors were opposed. Vitro is appealing.
=======
P E R U
=======
DOE RUN PERU: Gov't Calls Off April 4 & 7 Creditor Meetings
-----------------------------------------------------------
Doe Run Peru said the Peruvian antitrust office Indecopi has
suspended the April 4 and 7 creditor meetings after a court
suspended the Renco Group Inc. unit's voting rights, Alex Emery at
Bloomberg News reports. Doe Run Peru said in a statement that the
court's decision "obstructs the legal process in detriment of the
creditors."
About Doe Run Peru
Doe Run Company operates an integrated primary lead operation and
a recycling operation located in Missouri, referred to as Buick
Resource Recycling. Fabricated Products operates a lead
fabrication operation located in Arizona and a lead oxide business
located in Washington. Doe Run Peru is a subsidiary of the
company. Doe Run Peru operates a polymetallic smelter at La Oroya
and copper mine at Cobriza both in Peru.
* * *
As of June 21, 2010, the company continues to carry Moody's bank
financial strength rating at "D-" and Fitch Ratings' individual
rating at "D".
====================
P U E R T O R I C O
====================
BORDERS GROUP: SN Warranty Wants Immediate Decision on Contracts
----------------------------------------------------------------
Prepetition, SN Warranty, LLC and Borders Group entered into an
agreement whereby the Debtors sell extended service agreements or
ESAs to their customers who purchase e-readers and who also wish
to purchase an extended service program in connection with the
E-Reader purchase.
SN Warranty alleges that the Debtors failed to remit service
fees, totaling $153,999, for the period dated January 25, 2011
and continuing through the Petition Date. The unpaid prepetition
Service Fees translate to about 5,979 ESAs that were not
activated as a result of the Debtors' non-payment of the Service
Fees, SN Warranty asserts.
SN Warranty argues that the Debtors continued to sell the ESAs
after the Petition Date, but have failed to remit the Service
Fees in connection with SN invoices dated March 8, 2011 and March
15, 2011 and have only remitted a portion of the Service Fees in
connection with SN invoice dated February 22, 2011. SN Warranty
alleges that the Service Fees attributable to postpetition sales,
which the Debtors failed to remit total $63,373 and translate to
2,470 ESAs that were not deactivated.
Before the Petition Date, Service Net received two overpayments
from the Debtors, aggregating $51,741, relating to ESAs which
were cancelled by the purchasing customers.
By this motion, SN Warranty asks the Court to:
(i) compel the Debtors to assume or reject the Agreement; and
(ii) to the extent the Debtors reject the Agreement, modify the
automatic stay to permit setoff of the prepetition
obligations.
Stephen L. Yonaty, Esq., at Cannon Heyman & Weiss, LLP, in
Buffalo, New York -- syonaty@chwattys.com -- argues that
customers who have purchased the ESAs have no way of knowing that
the Debtors have not complied with the two requirements necessary
for activation of the ESAs. Thus, if a customer is to attempt to
utilize services under the ESA only to learn that the ESA has
never been activated, this would reflect quite badly primarily
upon the Debtors, and also upon Service Net, he stresses.
Moreover, to the extent the Debtors reject the Agreement, that
rejection will result in a significant rejection claim in favor
of SN Warranty, he notes. Thus, Mr. Yonaty asserts, any claim
arising from the rejection of the Agreement should be available
for setoff against the Prepetition Overpayment.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Pershing & Hachette Have Substantial Equity Stake
----------------------------------------------------------------
Pershing Square Capital Management L.P. and Hachette Book Group,
Inc. filed with Court on March 23 and 24, 2011, notices of
substantial ownership of Borders Group, Inc. stock and claim.
As set forth in its March 3, 2011 notice, Pershing Square Capital
disclosed that it acquired on various dates (i) 10,597,980 shares
of Borders common stock and (ii) 25,944,236 warrants to acquire
shares of Borders common stock on behalf of Pershing Square
entities.
Hachette disclosed that it owns a $39,520,757 claim against the
Debtors for invoices between January 5, 2010 and February 15,
2011.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Scholastic Posts $3.5-Mil. Bad Debt Expense
----------------------------------------------------------
Scholastic Corporation stated that it recorded a one-time bad
expense of $3.5 million or $0.07 per share related to Borders
Group, Inc.'s bankruptcy filing for the third quarter ended
November 30, 2010.
Scholastic Corporation is a global children's publishing,
education and media company. The company avers that it is the
world's largest publisher and distributor of children's books and
a leading provider of educational technology products and related
services.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Proposes Mercer (US) as Consultant
-------------------------------------------------
Borders Group Inc. and its units seek the Court's permission to
employ Mercer (US) Inc. as their compensation consultant, nunc pro
tunc to the Petition Date.
As the Debtors' consultant, Mercer will:
(a) review current compensation programs and 2011 business
plan and restructuring plans and, when requested, execute
a site visit and executive interviews to review current
talent challenges;
(b) develop an executive compensation program that would be
appropriate and motivational during the restructuring
period, including, without limitation, cash-based short-
term incentives, new equity participation arrangements,
and post-bankruptcy employment security arrangements;
(c) participate, when requested, in discussions among the
Debtors, their creditor constituencies, and the United
States Trustee for Region 2, among other things, to
explain the purposes and terms of applicable compensation
programs and provide the results of Mercer's analysis of
same; and
(d) if requested, provide testimony regarding Mercer's
findings, conclusions and recommendations, as applicable,
including without limitation, at any deposition or hearing
held in connection with the Debtors' restructuring,
confirmation of a plan of reorganization, or in connection
with proceedings to approve any particular compensation
programs and payments during the pendency of the Debtors'
Chapter 11 cases.
The Debtors will pay Mercer's professionals according to the
firm's customary hourly rates:
Title Rate per Hour
----- -------------
Partner $700 to $950
Principal $500 to $700
Senior Associate $350 to $550
Associate $250 to $400
Analyst $150 to $300
Researcher $50 to $150
Mercer will also be reimbursed for expenses to be incurred.
John Dempsey, a partner at Mercer, relates that the Debtors and
his firm promptly began negotiating the terms of Mercer's
Engagement Letter before the Petition Date. However, in advance
of the Debtors' bankruptcy filing on February 16, 2011, it was
necessary for Mercer to begin performing certain services on a
limited basis in order to ensure the prompt and efficient
development of the Debtors' incentive and compensation plans.
Mercer received a prepetition retainer from the Debtors for
$40,000. As of the Petition Date, the balance of the retainer
totaled $5,722, according to Mr. Dempsey.
Mr. Dempsey further discloses that certain parties were former or
current clients of Mercer in matters unrelated to the Debtors'
Chapter 11 cases, a schedule of which is available for free at:
http://bankrupt.com/misc/Borders_MercerClients.pdf
Mr. Dempsey insists that Mercer is a "disinterested person" as
defined under Section 101(14) of the Bankruptcy Code.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Files Schedules of Assets & Liabilities
------------------------------------------------------
A. Real Property $0
B.1 Cash on hand 0
B.2 Bank accounts
PNC Bank Account 2,000
Blackrock Investments LLC Investment Account 0
B.3 Security deposits with public utilities 0
B.4 Household goods 0
B.5 Books 0
B.6 Wearing apparel 0
B.7 Furs and jewelry 0
B.8 Firearms and sports 0
B.9 Interests in insurance policies 0
B.10 Annuities 0
B.11 Interests in an education IRA 0
B.12 Interests in IRA, ERISA, Koegh or Other
Pension or Profit Sharing Plans
Deferred Compensation Plan - Rabbi Trust 583,522
B.13 Stock and interests Undetermined
See http://bankrupt.com/misc/BGISchedb13StockInterests.pdf
B.14 Interests in partnerships or joint ventures
KOBO, Inc. Undetermined
B.15 Government and corporate bonds 0
B.16 Accounts receivable 290,201
B.17 Alimony, maintenance support, property settlements 0
B.18 Other liquidated debts
Tax receivable - IL - fiscal year end 2009 128,739
Tax receivable - IL - fiscal year end 2008 75,000
Tax receivable - AK - fiscal year end 2007 19,431
Tax receivable - CO - fiscal year end 2009 13,125
Tax receivable - KS - fiscal year end 2010 9,094
Tax receivable - NY & NY MTA - fiscal year end 2010 7,520
Tax receivable - VT - fiscal year end 2010 8,202
B.19 Equitable or future interests, life estates 0
B.20 Contingent and non-contingent interests 0
B.21 Other contingent and unliquidated claims 0
B.22 Patents, copyrights and other intellectual property
Patent
Computerized book reviewing system Undetermined
Registered domain
Bookssetcltd.co.uk Undetermined
Borders.ie Undetermined
Bordersbooks.co.uk Undetermined
Borders-books.co.uk Undetermined
Bordersbooksandmusic.co.uk Undetermined
Bordersrewards.co.uk Undetermined
Bordersstores.ie Undetermined
B.23 Licenses, franchises and other general intangibles 0
B.24 Customer lists or other compilations 0
B.25 Automobiles, trucks, trailers, and other vehicles 0
B.26 Boats, motors and accessories 0
B.27 Aircraft and accessories 0
B.28 Office equipment, furnishings, and supplies 0
B.29 Machinery, fixtures, equipment and supplies 0
B.30 Inventory 0
B.31 Animals 0
B.32 Crops 0
B.33 Farming equipment 0
B.34 Farm supplies 0
B.35 Other personal property 0
TOTAL SCHEDULED ASSETS $1,136,834
===========================================================
C. Property Claimed as Exempt N/A
D. Creditors Holding Secured Claims
Secured Debt
Bank of America, N.A. - Revolver Facility $196,469,250
GA Capital, LLC - Term Loan 48,919,245
UCC Liens
AT&T Capital Services, Inc. 0
Bank of America, N.A. 0
Bank of America, N.A. 0
Cisco Systems Capital Corporation 0
Cisco Systems Capital Corporation 0
GA Capital, LLC 0
IBM Credit LLC 0
Letters of Credit Outstanding
Liberty Mutual Insurance Company - 2009 21,188,000
Bank of America, N.A. - 2010 5,000,000
Wells Fargo Bank Northwest, N.A. - 2005 2,701,504
Safeco Insurance Company of America - 2008 1,826,311
The Travelers Indemnity Company - 2005 1,400,000
Wayne County Airport Authority - 2007 181,250
Jetblue Airways Corporation - 2008 178,203
City Of Phoenix Aviation - 2005 110,000
Raleigh-Durham Airport Authority - 2009 72,696
Marketplace Laguardia Limited - 2006 50,000
Westfield Concession - 2006 50,000
Continental Airlines, Inc. - 2005 35,000
Westfield Concession Management - 2005 30,000
Peabody Municipal Light Plant - 2005 16,125
E. Creditors Holding Unsecured Priority Claims
Tax Claims Undetermined
See http://bankrupt.com/misc/BGISchedE1TaxClaims.pdf
F. Creditors Holding Unsecured Nonpriority Claims
Trade Payables - Wells Fargo Bank 6,825
Litigation & Environmental Undetermined
See http://bankrupt.com/misc/BGISchedF2LitigationClaims.pdf
Loan Guarantees - Modern Woodmen of America Undetermined
Real Property Lease Guarantees Undetermined
See http://bankrupt.com/misc/BGISchedF4RealPropClaims.pdf
Intercompany Payables
Borders, Inc. 557,851,612
Borders Direct, LLC 125,286,814
Borders International Services, Inc. 18,902,541
Borders Fulfillment, Inc. 15,958,700
Borders Properties, Inc. (50,460,159)
Borders/JGA JV LLC (286,661)
TOTAL SCHEDULED LIABILITIES $945,487,256
===========================================================
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Files Statement of Financial Affairs
---------------------------------------------------
Borders Group, Inc. reported no income from the operation of its
business during the two years immediately preceding the Petition
Date.
BGI Senior Vice President of Restructuring Holly Etlin disclosed
that the Debtor received income other than from the operation of
business during the two years immediately preceding the Petition
Date in these amounts:
Fiscal Year End Amount
--------------- --------------
2010 ($249,878,766)
2009 $0
2008 $1,949,475
Ms. Etlin related that the Debtor made payments, totaling
$556,548,070, to creditors within 90 days immediately preceding
the Petition Date, a schedule of which is available for free at:
http://bankrupt.com/misc/Borders_SofAS3b.pdf
The Debtor also made payments, totaling $48,423,388, within one
year immediately preceding the Petition Date to creditors who are
or were insiders, a schedule of which is available for free at:
http://bankrupt.com/misc/Borders_SofA3c.pdf
The Debtor is or was a party to about 46 lawsuits within one year
immediately preceding the Petition Date, a schedule of which is
available for free at:
http://bankrupt.com/misc/Borders_SofA4a.pdf
Ms. Etlin disclosed that the Debtor made payments, totaling
$9,673,650, related to debt counseling or bankruptcy within one
year immediately preceding the Petition Date, a schedule of which
is available for free at:
http://bankrupt.com/misc/Borders_SofA9.pdf
The Debtor transferred to Lebow Gamma Limited Partnership common
stock shares and warrants worth $25,000,000 on May 20, 2010.
These officers kept the Debtor's books' records within two years
immediately preceding the Petition Date:
Name Title
---- -----
Glen Tomaszewski Vice President, Controller
Scott D. Henry Chief Financial Officer
Mark R. Bierley Former Chief Financial Officer
Ernst & Young LLP audited the books of accounts and records of
the Debtor within two years immediately preceding the Petition
Date.
Messrs. Tomaszewski and Henry possessed the books and records of
the Debtor at the time of the commencement of its Chapter 11
case.
The Debtor's current officers and stockholders who directly or
indirectly own or hold 5% or more of the voting or equity
securities of the Debtor are:
Nature of % of
Stock Stock
Name/Title Ownership Ownership
---------- ---------- ---------
Daniel R. Angus N/A N/A
Vice President, Customer Loyalty
Michael Archbold N/A N/A
Director
Paul Brown N/A N/A
Director
Scott Brown N/A N/A
Vice President, Applications
Jason Cline N/A N/A
Vice President, Financial
Planning & Controller
Joanna Cline N/A N/A
Vice President, Marketing
Michele M. Cloutier N/A N/A
Executive Vice President
Michael J. Edwards N/A N/A
President,
Chief Executive Officer
Ronald Floto N/A N/A
Director
James M. Frering N/A N/A
Sr. Vice Pres., Store Operations
Michael Grossman N/A N/A
Director
Scott D. Henry N/A N/A
Member, Board of Directors and
Exec. V-Pres., CFO & Treasurer
Edward J. Jackson N/A N/A
Vice-Pres., Asst. Treasurer
Lebow Gamma Limited Partnership Equity 15.40%
Interests
Bennett Lebow N/A N/A
Director
Andrea H. Lobdell N/A N/A
Sr. Vice Pres., Merchandising
Planning & Supply Chain
Howard Lorber N/A N/A
Director
Lynda Y. Pak N/A N/A
Vice President, Technology
Pershing Square LP Equity 14.70
Interests
Kathryn M. Popoff N/A N/A
Vice-Pres, Merchandising/
Trade Book
Daniel N. Rose N/A N/A
Director
David Shelton N/A N/A
Director
Rosalind L. Thompson N/A N/A
Senior Vice President
Glen Tomaszewski N/A N/A
Vice President, Controller
Timothy Wolf N/A N/A
Director
The Debtor's former officers are:
Name Title
---- -----
Richard McGuire III Director
Patricia Wynn Vice President, Borders
Specialty Retail
Jennifer S. Lovin Vice President, Operations &
Services
Arthur L. Keeney Senior Vice President,
Marketing
Lawrence A. Norton Senior Vice President,
Merchandising, Trade Books
Anthony J. Grant Vice President, Real Estate
William A. Dandy Senior Vice President,
Marketing
Nelson D. Clark Vice President, Audit & Loss
Prevention
Gary M. Bale Senior Vice President,
Merchandising, Non Book
Shereen Solaiman Senior Vice President, Human
Resources
David S. Laverty Senior Vice President, Chief
Information Officer
Thomas Carney Executive Vice President,
General Counsel, Chief Privacy
Officer & Secretary
Mark R. Bierley Executive Vice President, Chief
Financial Officer, & Treasurer
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online e-
commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
FIRST BANCORP: Delays Filing of Annual Report for 2010
------------------------------------------------------
First BanCorp has failed to timely file with the U.S. Securities
and Exchange Commission its Annual Report on Form 10-K for the
year ended Dec. 31, 2010, without unreasonable effort and expense
because the Corporation has not completed the preparation of its
consolidated financial statements for that period.
The Corporation needs additional time to evaluate the impact in
the fourth quarter of 2010 of certain non-cash items on its
financial statements, including potential valuation allowance
adjustments to the $93.7 million net deferred tax asset of its
banking subsidiary, which process involves significant management
judgment and subjective assessments, and to review its going
concern analysis.
The Corporation said that until its analysis is completed and the
Corporation has determined the impact this may have on its results
of operations, and the Corporation's independent registered public
accounting firm has completed its year-end audit, the Corporation
will be unable to file the Form 10-K. The Corporation said that
it is diligently working to complete its analysis and intends to
file its Annual Report on Form 10-K as soon as practicable.
About First BanCorp
First BanCorp is the parent corporation of FirstBank Puerto Rico,
a state-chartered commercial bank with operations in Puerto Rico,
the Virgin Islands and Florida, and of FirstBank Insurance Agency.
First BanCorp and FirstBank Puerto Rico operate under U.S. banking
laws and regulations. The Corporation operates a total of 175
branches, stand-alone offices and in-branch service centers
throughout Puerto Rico, the U.S. and British Virgin Islands, and
Florida. Among the subsidiaries of FirstBank Puerto Rico are
First Federal Finance Corp., a small loan company; First Leasing
and Rental Corp., a leasing company; FirstBank Puerto Rico
Securities, a broker-dealer subsidiary; First Management of Puerto
Rico; and FirstMortgage, Inc., a mortgage origination company. In
the U.S. Virgin Islands, FirstBank operates First Insurance VI, an
insurance agency, and First Express, a small loan company. First
BanCorp's common and publicly-held preferred shares trade on the
New York Stock Exchange under the symbols FBP, FBPPrA, FBPPrB,
FBPPrC, FBPPrD and FBPPrE.
* * *
As reported in the Troubled Company Reporter-Latin America on
November 29, 2010, Fitch Ratings has removed from Rating Watch
Negative and downgraded the long-term Issuer Default Ratings of
First BanCorp and its main subsidiary, Firstbank Puerto Rico to
'CC'.
Fitch noted in November 2010 that FBP announced a series of
initiatives to bolster its balance sheet. These mainly entail
improving the common equity component of its overall
capitalization. FBP's capital strategies encompass
three actions: 1) the conversion of the company's US$550 million
perpetual preferred stock which was completed on Aug. 30, 2010;
2) raising additional common stock of up to US$500 million, which
is presently ongoing; and 3) the conversion of the U.S. Treasury's
Capital Purchase Program preferred shares, which is contingent
upon the raising the additional equity. Taken together, and if
successful, FBP estimates that pro forma tangible common equity
ratio will increase to 10%.
The rating actions primarily reflects Fitch's view that the
capital strategies First Bancorp has pursued are necessitated by
its weakened financial condition and reflective of heightened
credit risk compared to historical performance.
===============================
T R I N I D A D & T O B A G O
===============================
HINDU CREDIT: Court Says L. Curran Claim Must be Heard in Trinidad
------------------------------------------------------------------
Peter Goldman and Vanessa Serrano, attorneys with Broad and
Cassel, were granted summary judgment that allowed their client,
Trinidadian bank Hindu Credit Union Co-Operative Society Ltd. to
have the case heard in the bank's native country versus the
Southern District of Florida. The plaintiff in the case was
attorney Laurence E. Curran, III, P.A., who claims the bank owes
him nearly $146,000.
U.S. District Judge Marcia Cooke said in the order, "Defendant HCU
filed a motion to dismiss Plaintiff's Complaint, which I converted
into a motion for summary judgment, requesting that this Court
abstain from the exercise of its jurisdiction based on the
doctrine of international comity. A liquidator has been appointed
to handle the assets of the bank, according to the ruling, under
Co-operative Societies Act of the Laws of Trinidad of Tobago."
The plaintiff argued that the Court should retain jurisdiction
over the case because the liquidation proceedings in Trinidad "are
not fair and are biased against it as a non-Trinidadian entity and
that they should not be found to be fair for purposes of any
comity analysis." He also argued that HCU's liquidator should be
required to seek recognition under Chapter 15 of the Bankruptcy
Code before seeking a stay or dismissal of Plaintiff's claims.
Ultimately, the Court sided with HCU.
According to Goldman, the Judge pointed to concurrent liquidation
proceedings in Trinidad as the basis of not hearing this case in
Federal Court and instead deferring to the bank's native country
to resolve the dispute.
"A court must analyze the relative strengths of the two countries'
interests when determining whether abstention is proper," wrote
Judge Cooke. "Significantly, in this case the following facts are
undisputed: there is a pending parallel bankruptcy proceeding in
Trinidad and Tobago that will resolve the Plaintiff's dispute; the
bankruptcy proceedings began before this action was filed . . . .
The Republic of Trinidad and Tobago has a strong interest in
winding up the affairs of its domestic business entity, HCU. The
bankruptcy proceeding in Trinidad and Tobago would permit HCU's
assets to be dispersed in an equitable, orderly, and systematic
manner, without interference from a possibly inconsistent judgment
from this Court. Here, the relative strength of the foreign
government's interests weigh in favor of abstention."
About Hindu Credit
Hindu Credit Union Co-Operative Society Limited (HCU)
-- http://www.ourhcu.com/-- is headquartered in Borough,
Chaguanas, in Trinidad and Tobago.
As reported in the Troubled Company Reporter-Latin America on
July 28, 2008, the High Court of Trinidad and Tobago granted the
government full control of Hindu Credit as the company faces
financial difficulties, leaving depositors in limbo despite
requests from lawyers. In June 2008, chartered accountants Ernst
and Young inspected Hindu Credit's books, accounts, and records
after a public outcry and calls for an internal audit. Charles
Mitchell, the Commissioner for Co-Operative Development,
represents Hindu Credit's depositors.
***********
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 * * *