/raid1/www/Hosts/bankrupt/TCRLA_Public/180612.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, June 12, 2018, Vol. 19, No. 115
Headlines
B A R B A D O S
BARBADOS: Summons IMF as Country Seeks Adjustments
B R A Z I L
BANCO ORIGINAL: Fitch Affirms 'B+' LT IDRs, Off Watch Negative
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Merchants, Industry Disagree on Milk Scandal
G U A T E M A L A
GUATEMALA: Volcano Still Brewing as Search for Victims Continues
N I C A R A G U A
NICARAGUA: S&P Alters Outlook to Negative & Affirms 'B+/B' SCRs
P U E R T O R I C O
KAMA MANAGEMENT: Taps Lugo Mender Group as New Legal Counsel
PETSMART INC: Hires Houlihan Lokey to Trim Debt Pile
TOYS R US: Propco I Debtors Tap Crowley as Conflicts Counsel
TOYS R US: Propco I Debtors Tap Klehr as Conflicts Counsel
T R I N I D A D & T O B A G O
PETROLEUM CO: Spends $63 Million on Consultancy Fees
V E N E Z U E L A
VENEZUELA: Resorting to Alternative Transport as System Collapses
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B A R B A D O S
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BARBADOS: Summons IMF as Country Seeks Adjustments
--------------------------------------------------
Trinidad Express reports that Bourse take a closer look at the
Barbados economy and said that the country has become overwhelmed
by lacklustre growth and unsustainable debt levels.
Following a sweeping victory in the general election held on May
24, 2018, the island's newly elected government-led by Prime
Minister Mia Mottley-has moved swiftly to address the economic
situation of Barbados, the report notes.
Adjustments-as proposed by the International Monetary Fund (IMF)
or otherwise-could have implications for bondholders, as well as
companies with exposure to the Barbados economy, the report
relays.
As reported in the Troubled Company Reporter-Latin America on
June 11, 2018, S&P Global Ratings said it lowered its foreign
currency sovereign issuer credit ratings on Barbados to 'SD/SD'
from 'CCC+/C'. S&P said, "At the same time, we lowered our long-
term foreign currency issue rating on the 6.625% notes due 2035 to
'D' from 'CCC+'.
===========
B R A Z I L
===========
BANCO ORIGINAL: Fitch Affirms 'B+' LT IDRs, Off Watch Negative
--------------------------------------------------------------
Fitch Ratings has affirmed and removed from Rating Watch Negative
Banco Original S.A.'s (Original) Issuer Default Ratings (IDRs),
viability rating (VR) and national ratings. Fitch has assigned a
Negative Outlook to the bank's 'B+' long-term foreign and local
currency IDRs and 'BBB(bra)' long-term National Rating.
KEY RATING DRIVERS
VR, IDRS, NATIONAL RATINGS
The removal of Original's rating from Negative Watch reflects
Fitch's view that refinancing risks have significantly reduced and
that Original has so far succeeded in overcoming the potentially
negative implications of the investigations of its related parties
on its franchise and business model. The assignment of a Negative
Outlook to Original's long-term ratings reflects the bank's
continued operating losses, which are still pressured by the
challenging operating environment, although the bank's capital
adequacy ratios and liquidity remain adequate.
While short-term pressures on Original have subsided, potential
contagion risks from the ongoing investigations of the bank's
sister company JBS S.A. (long-term local and foreign currency IDRs
BB-/Outlook Stable) and their shareholders remain. Fitch believes
that Original is exposed to the same reputational risk as its
parent company. Given the crucial support provided by Original's
shareholders (through the sale of its brand in 2016 and of a part
of its impaired loans in 2017) that helped the bank maintain its
capital at adequate levels, Fitch will continue to closely monitor
such risks.
Original's IDRs remain driven by its VR or stand-alone credit
profile. The affirmation of Original's ratings mainly takes into
consideration the bank's company profile that is still in the
consolidation phase and its weak profitability. The bank continues
to focus on wholesale lending, while developing its retail banking
business through its digital platform. In the latter, the bank has
continued to advance through the past year despite the setback
caused by the related party events and has increased the number of
clients, as well as the funding provided by retail clients
directly through its digital network. However, the bank is yet to
reach its targets and a recurring retail client base to make it a
core business with respect to earning generation.
Original's profitability remains weak and the bank is unlikely to
reach break-even before 2019, but the expansion of its loan book
and cost measures should benefit earnings in the next quarters. As
of March 2018, the bank posted a loss of BRL44 million. In 2017,
earnings were positively affected by the impaired loan sales to
its shareholders that resulted in the reversal of loan impairment
charges and a net income of BRL2 million and an operating loss of
BRL57 million or negative 0.71% of risk weighted assets (RWAs).
Original's loan book returned to growth in the last quarter of
2017 when the expanded loan portfolio reached BRL5.5 billion. The
bank projects a growth above the market at 10%-15% in 2018,
despite a seasonal decline in the first quarter of 2018 to BRL4.9
billion. Asset quality, which benefited from the impaired loan
sales equivalent to 11% of the outstanding loans at year-end 2017,
remains stable. At March 2018, loans classified in the D-H
categories of the central bank and non-performing loans (NPLs)
over 90 days stood at 6.7% and 3.5% of gross loans respectively
(6.4% and 3.1%, in 2017, respectively).
Original's capitalization remains adequate thanks to the measures
taken by the shareholders to support the bank's profitability. At
March 2018, common equity tier 1 (CET1) and total regulatory
capital ratios stood at 14.32% (16.30% in 2017), while the Fitch
Core Capital (FCC) ratio was 17.79% in 2017.
Original's funding and liquidity profile also remain comfortable,
evidencing the success of the measures taken following the events
related to the bank's related parties in 2017. Refinancing risks
have largely subsided, funding costs have remained broadly stable,
and the bank preserved its overall funding franchise. Original's
funding base is highly concentrated in a few brokers/distributors,
which, in turn, distribute the bank's funding products to a wide
range of smaller investors. This concentration risk makes the bank
sensitive to any negative developments regarding the reputation of
the group. However, the bank's liquidity remains adequate and
benefits from the short-term nature of the bank's loan book, where
54% of loans had a maturity of less than 90 days as of March 2018.
In the same period, total loans to deposits (including all deposit
like products such as financial bills) stood at an adequate 90%
(98% in 2017).
SUPPORT RATING AND SUPPORT RATING FLOOR
Original's SR and SRF were affirmed at '5' and 'NF', respectively,
in view of the bank's low systemic importance. In Fitch's view,
external support cannot be relied upon.
RATING SENSITIVITIES
VR, IDRS and NATIONAL RATINGS
Original's ratings and/or Outlooks could be negatively affected by
the emergence of additional pressures on its business and
financial profiles. Ratings could also be negatively affected if
the bank's recurring operating profit generation capacity does not
improve over the next year, or if losses lead to a material
decline in the bank's total regulatory capital ratio to below 12%.
Original's national ratings could also be affected by changes in
the bank's credit profile relative to its local peers.
The Negative Outlook on the ratings could be revised to Stable if
the bank can demonstrate over the next 12 months that it is on
track to reach and maintain positive operating earnings.
SUPPORT RATING AND SUPPORT RATING FLOOR
A potential upgrade of Original's Support Rating and Support
Rating Floor is unlikely in the foreseeable future, since this
would arise only from a material gain in systemic importance.
The rating actions are as follows:
Long-Term Foreign and Local Currency IDRs affirmed at 'B+',
Rating Watch Negative removed, Outlook Negative;
Short-Term Foreign and Local Currency IDRs affirmed at 'B',
Rating Watch Negative removed;
Viability Rating affirmed at 'b+', Rating Watch Negative
removed;
National Long-Term Rating affirmed at 'BBB (bra)', Rating Watch
Negative removed, Outlook Negative;
National Short-Term Rating affirmed at 'F2(bra)', Rating Watch
Negative removed;
Support Rating affirmed at '5';
Support Rating Floor affirmed at 'NF'.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Merchants, Industry Disagree on Milk Scandal
----------------------------------------------------------------
Dominican Today reports that producers and industrialists agree
that the Dominican Republic should ban the sale of bulk milk
powder, noting that it's exposed to pollution and may jeopardize
health.
However, Manuel Ortiz, president of the merchants and business
leaders grouped in Fenacerd, has called for a halt of the
confiscation of bulk milk sold by various businesses, since in his
view, they only harm the poor whom cannot afford the product,
according to Dominican Today.
Two months ago, the Drugs, Food and Health Products Agency
(Digemap) reported that it seized over 7.7 tons of bulk milk sold
illegally in different stores, the report notes.
For Dominican Industries Association (AIRD) president Campos de
Moya, the use of bulk milk powder can harm the health of Dominican
families and on Thursday said they support the Health Ministry's
actions to halt that form of marketing, the report notes.
"That is a scam, only where controls don't exist can something
like that happen. It's harmful to our children, to our
grandchildren, we cannot allow milk which can be tainted to become
food for our families" the report quoted Mr. De Moya as saying.
As reported in the Troubled Company Reporter-Latin America on
April 23, 2018, S&P Global Ratings affirmed its 'BB-/B' long- and
short-term sovereign credit ratings on the Dominican Republic.
The outlook remains stable.
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G U A T E M A L A
=================
GUATEMALA: Volcano Still Brewing as Search for Victims Continues
----------------------------------------------------------------
EFE News reports that the violent eruption of the Volcan del Fuego
volcano, the death toll for which currently stands at 110, is
keeping Guatemala on the highest alert level since activity within
the fire mountain is not subsiding, while rescue and recovery
brigades have resumed scouring the area for more victims.
The volcano, located 50 kilometers (31 miles) west of Guatemala
City on the mutual border of Chimaltenango, Sacatepequez and
Escuintla provinces, greeted the dawn with an average of nine
explosions per hour, according to EFE News.
=================
N I C A R A G U A
=================
NICARAGUA: S&P Alters Outlook to Negative & Affirms 'B+/B' SCRs
---------------------------------------------------------------
On June 8, 2018, S&P Global Ratings revised its outlook on
Nicaragua to negative from stable. At the same time, S&P affirmed
its 'B+/B' foreign and local currency sovereign credit ratings on
Nicaragua.
S&P also affirmed its transfer and convertibility (T&C) assessment
at 'BB-'.
OUTLOOK
Recent political developments in Nicaragua have disrupted economic
activity and undermined cooperation between the government and the
private sector. The negative outlook reflects the risk of a
downgrade if prolonged political discord worsens our assessment of
Nicaragua's governance effectiveness and hurts the country's
public finances and GDP growth prospects. S&P could lower the
ratings in the next few months if the current political impasse
persists or worsens, auguring greater long-term negative
consequences for the economy.
Conversely, a potential quick resolution of the political impasse
within the next few months could contain the negative impact on
Nicaragua's economy and public finances. That, along with other
steps that reduce divisions between the government and the private
sector and create investor confidence in key economic policies,
could sustain the country's medium-term growth prospects. S&P
could revise the outlook to stable in that case.
RATIONALE
S&P's ratings on Nicaragua are constrained by its low per capita
GDP, weak external position, and monetary rigidities. They also
reflect its still moderate but eroding government debt burden. The
ratings incorporate a track record of steady GDP growth based on
pragmatic economic policies. The recent events in the country have
raised doubts about future growth prospects and the political
pillars that had sustained pragmatic economic policies in recent
years.
Political tensions are high following seven weeks of protests
against the government, triggered by a controversial reform to the
social security institute (INSS, by its Spanish acronym). The
reform was cancelled by President Daniel Ortega after vociferous
public protests, but political tensions have not dissipated.
Recent events have hurt the country's business environment. In the
short term, they will likely weaken domestic consumption and
investment, reduce tourism and foreign investment inflows, and
lower employment. If political tensions were to diminish
substantially in the coming months, S&P expects GDP might still
grow around only 1.5% in 2018, down from 4.9% in 2017. This would
translate into per capita real GDP growth of close to zero in
2018. However, a prolonged political impasse could produce worse
economic outcomes this year and likely reduce its expectation for
the country's GDP growth rates over the next couple of years.
S&P said, "Nicaragua's general government deficit is likely to
worsen in 2018 beyond 2% of GDP, from 1.3% in 2017. As a result of
the larger fiscal deficit, we expect the net general government
debt burden to increase in 2018 to 37% of GDP from around 34% in
2017. Our economic projections are subject to variability, given
the considerable political uncertainty in the country.
"We expect the current account deficit (CAD) to increase to 7.6%
of GDP in 2018, from 5% in 2017, as exports of both goods and
services are hit by the political crisis and lower prices for some
of Nicaragua's commodities exports. In our opinion, poor domestic
demand will reduce Nicaragua's imports, although the country's oil
bill will increase on higher oil prices. We also assume that
foreign direct investment will decline significantly in 2018 and
cover a lower portion of the CAD compared with previous years. We
anticipate that the CAD will be financed by official lending,
because we expect the country to maintain access to multilateral
financing this year, and we expect it to make some moderate
drawdowns in foreign currency reserves."
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable. At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee by
the primary analyst had been distributed in a timely manner and
was sufficient for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
RATINGS LIST
Ratings Affirmed; Outlook Action
To From
Nicaragua
Sovereign Credit Rating B+/Negative/B B+/Stable/B
Ratings Affirmed
Nicaragua
Transfer & Convertibility Assessment BB-
======================
P U E R T O R I C O
======================
KAMA MANAGEMENT: Taps Lugo Mender Group as New Legal Counsel
------------------------------------------------------------
Kama Management Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Puerto Rico to hire Lugo Mender Group, LLC as
its new legal counsel.
The firm will replace Maria Lozada Figueroa, the attorney
initially employed by the Debtor in connection with its Chapter 11
case. Lugo Mender will charge these hourly rates:
Wigberto Lugo Mender, Esq. $300
Associate Staff Attorney $200
Legal/Financial Assistants $125
The Debtor paid the firm a retainer in the sum of $4,000.
Wigberto Lugo Mender, Esq., at Lugo Mender, disclosed in a court
filing that he and other members of his firm are "disinterested"
as defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Wigberto Lugo Mender
Lugo Mender Group, LLC
100 Carr. 165, Suite 501
Guaynabo, P.R. 00968-8052
Tel: (787) 707-0404
Fax: (787) 707-0412
E-mail: wlugo@lugomender.com
About Kama Management
Kama Management Inc., a "small business debtor", filed a Chapter
11 petition (Bankr. D.P.R. Case No. 16-08008) on Oct. 5, 2016.
Alberto Perez Pujals, president, signed the petition. At the time
of filing, the Debtor disclosed total liabilities of $1.45
million. Maria Soledad Lozada Figueroa, Esq., at Lozada Law &
Associates, LLC, is the Debtor's counsel.
PETSMART INC: Hires Houlihan Lokey to Trim Debt Pile
----------------------------------------------------
PetSmart Inc, the largest U.S. pet retailer, has hired
restructuring advisers to explore ways to trim its debt pile of
more than $8 billion, Reuters reports, citing people familiar with
the matter. PetSmart is working with investment bank Houlihan
Lokey Inc as it weighs its next steps, the report said.
As same-store sales have fallen, PetSmart's debt has lost value.
According to Reuters, while the company faces no significant debt
maturities until 2022, it hopes to take advantage of the decline
in the value of its bonds to trim its debt burden.
Reuters notes that PetSmart's debt trades at a deep discount to
its full value amid concerns the brick-and-mortar retailer's big
bet on online commerce has yet to pay off. PetSmart's bonds due
in 2023 are now trading at about 55 cents on the dollar, according
to Thomson Reuters data.
PetSmart is widely expected to embark on a distressed-debt
exchange as a way to persuade its bondholders to take a haircut on
debt that has been trading at distressed levels for months,
according to PEnews.com.
PetSmart is privately held and only releases its financial
statements to holders of the $1.9 billion aggregate principal
amount of 7.125% senior notes due 2023 (the "notes") and lenders
under the term loan credit facility -- term facility -- and
revolving asset-based credit facility -- ABL facility.
London-based private equity firm BC Partners Inc. acquired
PetSmart for $8.7 billion in 2014. However, the company quickly
faced strong headwinds as many customers snubbed its brick-and-
mortar stores for the convenience of online shopping.
In response, PetSmart bought online pet-food retailer Chewy Inc.
in 2017 for $3.35 billion, the highest price ever paid for an
e-commerce site. It financed the acquisition with $2 billion in
debt.
Chewy.com's revenue has doubled to $2.6 billion since PetSmart
acquired it for $3 billion in May 2017. While Chewy's revenue had
jumped 81 percent to $760 million in its most recent quarter, it
is still losing money, The Wall Street Journal reported.
In an earnings call with investors June 4, PetSmart said it is
restructuring ownership of Chewy to protect Chewy from future
creditor actions. PetSmart said it is spinning off 20% of Chewy
to its private equity owners as a dividend, and another 16.5% to
an unrestricted subsidiary, which is exempt from certain
limitations imposed by PetSmart's bond contracts. The moves open
an avenue for PetSmart to use the value of Chewy.com in a
distressed-debt exchange for its bonds, PEnews said.
According to PEnews, PetSmart's bondholders had been expecting a
spin-off of some of the equity in Chewy.com for months as the
performance of PetSmart's brick-and-mortar stores lagged behind
while Chewy.com continues its rapid growth.
About PetSmart
Founded in 1986, PetSmart, Inc. -- http://www.petsmart.com/-- is
the largest specialty pet retailer of services and solutions for
the lifetime needs of pets. PetSmart provides a broad range of
competitively priced pet food and products and offers unique pet
services including training, pet grooming, boarding, PetSmart
Doggie Day Camp and in-store pet adoptions. PetSmart employs
55,000 associates and operates more than 1,600 pet stores in the
United States, Canada and Puerto Rico as well as more than 200
in-store PetSmart PetsHotel dog and cat boarding facilities.
In May 2017, PetSmart acquired Chewy.com, a leading online
retailer of pet food and products in the U.S., which operates as
an independent subsidiary.
TOYS R US: Propco I Debtors Tap Crowley as Conflicts Counsel
------------------------------------------------------------
Toys "R" Us Property Company I, LLC, seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to hire
Crowley, Liberatore, Ryan & Brogan, P.C.
Crowley will serve as co-counsel with Klehr Harrison Harvey
Branzburg LLP, the other firm tapped by Toys "R" Us Property and
its affiliates as their legal counsel on conflict matters.
The firm will charge these hourly rates:
Partners $350 to $300
Associates $200
Paraprofessionals $90
Karen Crowley, Esq., a partner at Crowley, disclosed in a court
filing that her firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Ms.
Crowley disclosed that her firm has not agreed to any variations
from, or alternatives to, its standard billing arrangements; and
that no Crowley professional has varied his rate based on the
geographic location of the Propco I Debtors' cases.
Ms. Crowley also disclosed that her firm has not represented the
Propco I Debtors in the 12 months prior to the petition date.
No budget has been submitted by Crowley or approved by the Propco
I Debtors, according to Ms. Crowley.
Crowley can be reached through:
Karen M. Crowley, Esq.
Crowley, Liberatore, Ryan & Brogan, P.C.
150 Boush Street, Suite 300
Norfolk, VA 23510
Telephone: (757) 333-4502
Facsimile: (757) 333-4514
Email: kcrowley@clrbfirm.com
About Toys R Us, Inc.
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise was sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise was also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, were not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, as sale process investment banker. A&G
Realty Partners, LLC, serves as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
Toys "R" Us UK
Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores
and 3,000 employees, was sent into administration in the United
Kingdom in February 2018.
Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88
Wood Street, London, EC2V 7QF were appointed Joint Administrators
on Feb. 28, 2018. The Administrators now manage the affairs,
business and property of the Company. The Administrators act as
agents only and without personal liability.
The Administrators said they will make every effort to secure a
buyer for all or part of the business.
Liquidation of U.S. Stores
Toys "R" Us, Inc., on March 15, 2018, filed with the U.S.
Bankruptcy Court a motion seeking Bankruptcy Court approval to
start the process of conducting an orderly wind-down of its U.S.
business and liquidation of inventory in all 735 of the Company's
U.S. stores, including stores in Puerto Rico.
Propco I Debtors
Toys "R" Us Property Company I, LLC and its subsidiaries own fee
and leasehold interests in more than 300 properties in the United
States. The Debtors lease the properties on a triple-net basis
under a master lease to Toys-Delaware, the operating entity for
all of TRU's North American businesses, which operates the
majority of the properties as Toys "R" Us stores, Babies "R" Us
stores or side-by-side stores, or subleases them to alternative
retailers.
Toys "R" Us Property was founded in 2005 and is headquartered in
Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary
of Toys "R" Us Inc.
Toys "R" Us Property and affiliates Wayne Real Estate Holding
Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE
II Trust, and Wayne Real Estate Company LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case
No. 18-31429) on March 20, 2018. The Propco I Debtors sought and
obtained procedural consolidation and joint administration of
their Chapter 11 cases, separate from the Toys "R" Us Debtors'
Chapter 11 cases.
The Propco I Debtors estimated assets of $500 million to $1
billion and liabilities of $500 million to $1 billion.
Judge Keith L. Phillips presides over the Propco I Debtors' cases.
The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP;
and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel.
According to the petition, the Debtors also tapped Kutak Rock LLP.
They hired Goldin Associates, LLC as financial advisors.
An official committee of unsecured creditors has been appointed in
the Propco I Debtors' cases.
TOYS R US: Propco I Debtors Tap Klehr as Conflicts Counsel
----------------------------------------------------------
Toys "R" Us Property Company I, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to hire
Klehr Harrison Harvey Branzburg LLP.
The firm will advise Toys "R" Us Property and its affiliated
debtors ("Propco I Debtors") in all conflicts of interest between
them and their affiliates that may arise in connection with the
Chapter 11 cases of Toys "R" Us, Inc. and its subsidiaries.
The firm will charge these hourly rates:
Partners $350 - $820
Of Counsel $295 - $475
Associates $260 - $410
Paraprofessionals $160 - $250
Morton Branzburg, Esq., a partner at Klehr Harrison, disclosed in
a court filing that his firm is a "disinterested person" as
defined in section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Branzburg disclosed that his firm has not agreed to any variations
from, or alternatives to, its standard billing arrangements; and
that no Klehr Harrison professional has varied his rate based on
the geographic location of the Propco I Debtors' cases.
Mr. Branzburg also disclosed that Klehr Harrison represented the
Propco I Debtors before the petition date, and that its current
hourly rates are consistent with the rates charged prior to the
petition date.
The Propco I Debtors have already approved Klehr Harrison's budget
and staffing plan for the period March 20 to July 31, 2018,
according to Mr. Branzburg.
Klehr Harrison can be reached through:
Morton R. Branzburg, Esq.
Klehr Harrison Harvey Branzburg LLP
1835 Market Street, Suite 1400
Philadelphia, PA 19103
Phone: 215.569.3007
Fax: 215.568.6603
Email: mbranzburg@klehr.com
About Toys R Us, Inc.
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise was sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise was also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, were not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, as sale process investment banker. A&G
Realty Partners, LLC, serves as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
Toys "R" Us UK
Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores
and 3,000 employees, was sent into administration in the United
Kingdom in February 2018.
Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88
Wood Street, London, EC2V 7QF were appointed Joint Administrators
on Feb. 28, 2018. The Administrators now manage the affairs,
business and property of the Company. The Administrators act as
agents only and without personal liability.
The Administrators said they will make every effort to secure a
buyer for all or part of the business.
Liquidation of U.S. Stores
Toys "R" Us, Inc., on March 15, 2018, filed with the U.S.
Bankruptcy Court a motion seeking Bankruptcy Court approval to
start the process of conducting an orderly wind-down of its U.S.
business and liquidation of inventory in all 735 of the Company's
U.S. stores, including stores in Puerto Rico.
Propco I Debtors
Toys "R" Us Property Company I, LLC and its subsidiaries own fee
and leasehold interests in more than 300 properties in the United
States. The Debtors lease the properties on a triple-net basis
under a master lease to Toys-Delaware, the operating entity for
all of TRU's North American businesses, which operates the
majority of the properties as Toys "R" Us stores, Babies "R" Us
stores or side-by-side stores, or subleases them to alternative
retailers.
Toys "R" Us Property was founded in 2005 and is headquartered in
Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary
of Toys "R" Us Inc.
Toys "R" Us Property and affiliates Wayne Real Estate Holding
Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE
II Trust, and Wayne Real Estate Company LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case
No. 18-31429) on March 20, 2018. The Propco I Debtors sought and
obtained procedural consolidation and joint administration of
their Chapter 11 cases, separate from the Toys "R" Us Debtors'
Chapter 11 cases.
The Propco I Debtors estimated assets of $500 million to $1
billion and liabilities of $500 million to $1 billion.
Judge Keith L. Phillips presides over the Propco I Debtors' cases.
The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP;
and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel.
According to the petition, the Debtors also tapped Kutak Rock LLP.
They hired Goldin Associates, LLC as financial advisors.
An official committee of unsecured creditors has been appointed in
the Propco I Debtors' cases.
===============================
T R I N I D A D & T O B A G O
===============================
PETROLEUM CO: Spends $63 Million on Consultancy Fees
----------------------------------------------------
Trinidad Express reports that Pointe-a-Pierre Member of Parliament
David Lee said that in the face of recording a $2 billion loss for
2017, Petroleum Co. of Trinidad & Tobago Ltd Petrotrin has spent
$63 million on consultancy fees.
The Opposition MP said the information was provided by Energy
Minister Franklin Khan at the parliamentary sitting, in response
to a question Lee had posed to Khan in April, according to
Trinidad Express. Mr. Lee had requested the names of the
individuals or companies who were retained as consultants by
State-owned oil company, as well as the value of these fees
received by each company for the period July 1st 2017 to present,
the report notes.
"To spend $63 million in less than 11 months on only 16
consultants is quite an incredible feat, especially when for the
past two-and-a-half years this Government has routinely spoken on
the poor financial health of the state company. What is even more
worrying, is the fact that the company recorded a loss of $2.2
billion in 2017, yet still spent this significant sum on
consultancy fees," the report quoted Mr. Lee as saying.
As reported in the Troubled Company Reporter-Latin America on
May 3, 2018, S&P Global Ratings revised its outlook on Petroleum
Co. of Trinidad & Tobago Ltd (Petrotrin) to negative from stable.
S&P said, "We also affirmed our 'BB' long-term corporate credit
and senior unsecured debt ratings on the company. Additionally,
we're keeping its SACP unchanged at 'b-'."
=================
V E N E Z U E L A
=================
VENEZUELA: Resorting to Alternative Transport as System Collapses
-----------------------------------------------------------------
EFE News reports that Venezuelans over the past five years have
been suffering through the collapse of the public transportation
system, which has been decimated by rising prices and the scarcity
of spare parts, as well as by the lack of government investment.
The crisis is forcing thousands of users to either walk wherever
they need to go or stand in long lines waiting for the "perreras,"
cargo trucks that belong to the Caracas Mayor's Office or private
citizens but without any safety measures for transporting people,
since there are very few public buses available, according to EFE
News.
As reported in the Troubled Company Reporter-Latin America on
June 1, 2018, S&P Global Ratings, on May 29, 2018, removed its
long- and short-term local currency sovereign credit ratings on
Venezuela from CreditWatch with negative implications and affirmed
them at 'CCC- /C'. The outlook on the long-term local currency
rating is negative. At the same time, S&P affirmed its 'SD/D'
long- and short-term foreign currency sovereign credit ratings on
Venezuela. Our transfer and convertibility assessment remains at
'CC'.
***********
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.
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., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2018. 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$775 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 Peter A. Chapman at 215-945-7000.
.
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