/raid1/www/Hosts/bankrupt/TCR_Public/110209.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, February 9, 2011, Vol. 15, No. 39
Headlines
ADINO ENERGY: Names Shannon McAdams as Chief Financial Officer
ADVANTA CORP: Soundpost Advisors Owns 6.0% of Class B Shares
ALLY FINANCIAL: Reports $79 Million Net Income in 4th Quarter
ALLY FINANCIAL: Moody's Upgrades Issuer Ratings to 'B1'
ALLY FINANCIAL: DBRS Confirms 'BB' Issuer & Long-Term Debt Rating
ALTOONA PIZZA: Chapter 7 Conversion Hearing Set for Feb. 17
AMBAC FINANCIAL: Committee Counsel Raises Hourly Rates
AMBAC FINANCIAL: Proposes Wachtell Lipton as Litigation Counsel
AMBAC FINANCIAL: Says IRS Immunity Abrogated by 11 U.S.C. Sec. 106
AMERICAN APPAREL: Lenders Waive EBITDA Covenant Until Feb. 11
AMERICAN APPAREL: Appoints John Luttrell as EVP and CFO
AMERICAN COMMERCIAL: S&P Affirms 'B' Long-Term Corp. Family Rating
ANNA NICOLE SMITH: Lawyer Insists Bankr. Court Has Jurisdiction
ARROW ALUMINUM: Voluntary Chapter 11 Case Summary
ARVINMERITOR INC: BlackRock Discloses 7.44% Equity Stake
ARVINMERITOR INC: Daniel Young Resigns as Director
ASARCO LLC: Barclays Presents Issues on Appeal of Fee Order
ASARCO LLC: Plan Administrator Objects to Victor Karl Claim
ASARCO LLC: Settles Sidley Austin's $1.6 Mil. Claim
AVAYA INC: S&P Assigns 'B' Senior Rating to Eight-Year Notes
AXION INTERNATIONAL: Inks $15-Mil. Contract With Major Railway
BARBARA CHADWICK: Transfer of Residence to Partnership Void
BEAZER HOMES: BlackRock Holds 7.23% Equity Stake
BESO LLC: Attorneys Defend Longoria's Beso Over Dismissal
BLUEKNIGHT ENERGY: Solus Expresses Concerns Over GTA Allegations
BRUNDAGE-BONE: Hearing on Consensual Plan on April 11
BWP TRANSPORT: Court Directs Changes to Disclosure Statement
CASCADE BANCORP: David Bolger Discloses 14.02% Equity Stake
CATHOLIC CHURCH: Del. Court Issues 17th Order on PIA Withdrawals
CATHOLIC CHURCH: Milwaukee Has OK for Buelow as Special Counsel
CATHOLIC CHURCH: Milwaukee Wins OK for L&M as Special Counsel
CATHOLIC CHURCH: Shelton Wants Claim vs. Wilm. Deemed Timely
CB HOLDING: Landry's Signs to Buy Bugaboo Creek for $3 Million
CENTRALIA OUTLET: Mall Projects $2 Million Operating Income
CHAPARRAL ENERGY: Moody's Assigns 'Caa1' Rating to $350 Mil. Notes
CHAPARRAL ENERGY: S&P Downgrades Ratings on Senior Debt to 'B-'
CHESAPEAKE ENERGY: S&P Puts 'BB' Rating on CreditWatch Positive
CHRYSLER LLC: CEO Issues Apology Over Derogatory Word on Loans
CHRYSLER LLC: 6th Cir. Affirms Lower Court Ruling on ADA Suit
CINCINNATI BELL: Amends Employment Agreement With CFO
COMMUNITY CENTRAL: Falls Under Critically Undercapitalized Tier
CONTESSA PREMIUM: Wins Nod of Wells Fargo DIP Financing
COSINE COMMUNICATIONS: Terminates Common Stock Registration
CPG INTERNATIONAL: S&P Retains 'B' Rating on $285 Mil. Loan
CUMULUS MEDIA: Signs Deal to Buy Remaining Interests in CMP
CUMULUS MEDIA: Travis Hain Holds 18.2% Equity Stake
DBSD N.A.: Gift to Shareholders Violates Absolute Priority Rule
DELTA PETROLEUM: Stock Transferred to The NASDAQ Capital Market
DENNY'S CORPORATION: CEO Miller Does Not Own Any Securities
DUKE & KING: To Sell 87 Restaraunts to Pay $21.18 Million Debt
DUCK HOUSE: Asks for Court's Permission to Use Cash Collateral
DUCK HOUSE: Section 341(a) Meeting Scheduled for March 4
E*TRADE FINANCIAL: DBRS Puts B (High) Issuer & Senior Debt Rating
ELLIPSO INC: Court Rejects CEO's Claim for Unpaid Salary, Bonuses
ELLIPSO INC: Court Rejects Registry Solutions et al. Claims
ENCORIUM GROUP: Ilari Koskelo Holds 35.46% Equity Stake
ENNIS HOMES: Fails to Consummate Plan; Wants Case Dismissed
ENSCO INTERNATIONAL: Moody's Reviews 'Ba1' Corporate Family Rating
ERNIE LEE JACOBSEN: Bid to Assume Sonic Licenses Goes to Trial
EVANS OIL: Has Court's Interim Okay to Use Cash Collateral
EVANS OIL: Parkland Group to Provide Restructuring Services
EVERGREEN ENERGY: Amends Stockholders' Rights Agreement
FANNIE MAE: Gov't to Phase Out Firms, Exit Mortgage Market
FIRST DATA: Incurs $129.9 Million Net Loss in 4th Quarter
FLORIDA GAMING: Borrows $1 Million From AGS Capital
FN BUILDING: Creditors Want Receiver to Keep Control of Skyscraper
FNB UNITED: Common Stock Moved to The NASDAQ Capital Market
FPD LLC: Has Until April 4 to Propose Chapter 11 Plan
FRANKLIN PACIFIC: Schedules April 7 Plan Confirmation Hearing
FRANK MENDENHALL: U.S. Trustee Wants Dismissal or Liquidation
FRASER PAPERS: Creditors Approve Restructuring Plan
FREDDIE MAC: Gov't to Phase Out Firms, Exit Mortgage Market
GAMESTOP CORPORATION: Repurchase Won't Affect 'Ba1' Moody's Rating
GAMETECH INT'L: Expects to Report $18.9MM Loss for Fiscal 2010
GENCORP INC: Reports $6.80 Million Net Income in Fiscal 2010
GERARD TROOIEN: U.S. Trustee Wants Case Converted to Chapter 7
GREENWOOD POINT: Court Confirms Revised Reorganization Plan
GYMBOREE CORPORATION: Amendment Won't Affect Moody's 'B2' Ratings
HAMPTON ROADS: To File Quarterly and Year End Results on March 9
HOLO RETAIL: Golf USA Sent to Chapter 11 Last Month
GENERAL MARITIME: Sells Two Product Tankers for $41.1 Million
GREAT ATLANTIC & PACIFIC: GHI Says Pact Rejection Premature
GULF INSURANCE: A.M. Best Cuts Financial Strength Rating to 'B'
HACIENDA GARDENS: Feb. 17 Hearing on Amended Plan Outline Set
HCA HOLDINGS: Patricia Frist Acquires 319,877 Common Shares
HOTEL DEL CORONADO: Recapitalization Addresses Looming $630MM Debt
HURLEY MEDICAL: Moody's Affirms 'Ba1' Rating on $90 Mil. Bonds
INSIGHT HEALTH: Deregisters Unsold Notes in Prepetition Offerings
INSIGHT HEALTH: Files Notice of Suspension of Duty to File Reports
INT'L COMMERCIAL: Investors Exercise Warrants at $0.10 Per Share
INVERSIONES ALSACIA: Moody's Assigns 'Ba2' Rating to Senior Notes
JAFFE-WEBSTER: Albany Mall Owner Seeks to Restructure Finances
JEFFERSON COUNTY: JPMorgan May Seek $778 Million Over Suits
JENNIFER CONVERTIBLES: Court Provisionally Confirms Plan
JIMMY L POWERS: Trotter Claim Gets Unsecured Treatment
JOSEPH-BETH: Panel Gets OK to Tap Lowenstein Sandler as Counsel
JOSEPH-BETH: Panel Wins Nod to Employ Traxi as Financial Advisor
KEYSTONE AUTOMOTIVE: $120 Million Term Loan Fully Subscribed
LAS VEGAS MONORAIL: Taps Ballard Spahr to Protect from Suit
LEVEL 3 COMMS: Posts $622 Million Net Loss for 2010
LOGIC DEVICES: Posts $406,500 Net Loss in Dec. 31 Quarter
LYONDELL CHEMICAL: Ch. 11 Trust Settles Lead Claims for $8.7-Mil.
MACATAWA BANK: Reports $17.85 Million Net Loss for 2010
MARGAUX ORO: Files Schedules of Assets and Liabilities
MARVEL ENTERTAINMENT: Court Rejects Stan Lee Media Requests
MCCLATCHY COMPANY: Terminates Sale Contract with Citisquare
METAMORHPIX INC: Taps American MedTech to Find Buyers
METAMORPHIX INC: Can Hire Pinckney Harris as Bankruptcy Counsel
METAMORPHIX INC: Committee Can Hire Klehr Harrison as Counsel
METAMORPHIX INC: MMI Genomics Files Schedules of Assets & Debts
MOLECULAR INSIGHT: Disclosure Statement Hearing on Feb. 25
MOMENTIVE PERFORMANCE: Extends Maturity of $839.5MM Loan to 2015
MORGANS HOTEL: Owners, Lenders Want to Stop Hard Rock Foreclosure
MORGURARD REAL ESTATE: DBRS Confirms 'BB (High)' Issuer Rating
MPG TRUST: Deutschman & Ratinoff Elected to Board of Directors
NET ELEMENT: Recurring Losses Prompt Going Concern Doubt
NEXIA HOLDINGS: Acquired 250 Million Shares From Green Endeavors
NMT MEDICAL: To Begin Trading on OTCQB Marketplace on Feb. 7
NNN 2400: Section 341(a) Meeting Scheduled for March 1
NNN MET: Section 341(a) Meeting Scheduled for March 8
NOVASTAR FINANCIAL: Amster Entities Hold 7.32% Equity Stake
NPS PHARMA: Meets Efficacy Endpoint in Phase 3 of SBS Study
OMAR BOTERO-PARAMO: Tyson Deed of Trust Has Priority Over BONY's
OPTI CANADA: Lazard Freres Hired to Review Alternatives
ORBITZ WORLDWIDE: S&P Gives Negative Outlook on 'B' Rating
ORLEANS HOMEBUILDERS: Wants Additional Time to Close Exit Loan
OVERLAND STORAGE: Marathon Capital Discloses 15.1% Equity Stake
PANOCHE VALLEY: Court Converts Reorganization Case to Liquidation
PFF BANCORP: Settlement Reached in Workers' Class Actions
PHILLIPS-VAN HEUSEN: Moody's Affirms 'Ba3' Corporate Family Rating
POPULAR INC: Fitch Upgrades Issuer Default Ratings to 'B+'
PRIDE INTERNATIONAL: Fitch Puts 'BB+' Rating on Positive Watch
PROTEONOMIX INC: Plans to Sell 20.4MM Preferred & Common Stock
RANCHER ENERGY: Court Okays $14.7MM DIP Financing from Linc Energy
RASER TECHNOLOGIES: Thermo Forbearance Pact Extended to March
RDK TRUCK SALES: Had $17.2-Mil. Revenue in 2010
RESIDENTIAL CAPITAL: DBRS Puts 'C' Issuer Rating Under Review
ROBERT E MIELL: Bankr. Court Keeps Chapter 7 Trustee
ROSETTA GENOMICS: Gets More Time from NASDAQ to Regain Compliance
SANSWIRE CORP: Receives More Investments From Chairman and CEO
SBARRO INC: Inks 2nd Forbearance Pact With First Lien Holders
SCHUTT SPORTS: Court Appoints Ronald Barliant as Mediator
SEA2O INC: Voluntary Chapter 11 Case Summary
SERVICEMASTER CO: S&P Puts 'B+' Rating on Tranche B Revolver
SINOBIOMED INC: Chris Metcalf Resigns as Chairman and Director
SOUTH EDGE: KB Home Might Cover $180M Loan In South Edge Ch. 11
SPRINGFIELD MISSIONARY: Voluntary Chapter 11 Case Summary
STATION CASINOS: FTI Seeks $560,000 in Fees and Expenses
STATION CASINOS: To Offer More Than 1,000 Jobs
STATION CASINOS: U.S. Govt. Opposes Zero Tax Liability Motion
STL MANAGEMENT: Case Summary & 18 Largest Unsecured Creditors
STONEMOR PARTNERS: Loan Upsizing Won't Affect Moody's 'B2' Rating
STAN LEE MEDIA: Court Rejects Bid to Vacate Orders in Marvel Suit
STRATEGIC AMERICAN: Closing of Purchase & Sale Pact Postponed
SUSPECT DETECTION: Amends Q2 2010 Report; Posts $166,080 Net Loss
SUSPECT DETECTION: Amends Q3 2010 Report; Posts $122,400 Net Loss
TERRESTAR NETWORKS: Bonuses to Foster Sale Rather Than Plan
TOWNSENDS INC: Peco is Lead Bidder with $44.7-Mil. Offer
TRADE UNION: Filed for Ch. 11 After Bank Cut Off Account
TRADE UNION: Asks for Court's Permission to Use Cash Collateral
TRANSDIGM INC: S&P Assigns 'BB-' Rating to $1.55 Bil. Senior Loan
TRICO MARINE: Creditors Object to Tannenbaum's Emergency Motion
TRONOX INC: Bankr. Ct. Remands Mount Canaan Suit to State Court
UNIVERSITY MILLENNIUM: Involuntary Chapter 11 Petition Dismissed
VALEANT PHARMACEUTICALS: S&P Assigns 'BB+' Rating to Senior Loan
VERMILION ENERGY: DBRS Assigns 'BB (Low)' Issuer Rating
VITESSE SEMICONDUCTOR: Michael Self Discloses 7.9% Equity Stake
WASHINGTON MUTUAL: Files Modified Plan of Reorganization
WASHINGTON MUTUAL: Confirmation Hearing for Revised Plan on May 2
ZANETT INC: Borrows Up to $10MM of Revolving Credit From PNC
ZURVITA HOLDINGS: To Host "Freedom Crusade" on Feb. 18-20
* Bankrupts Must Pay Most Possible, Circuit Court Rules
* Espinosa Not Applicable in Chapter 7, Court Says
* Total Bankruptcy Filings Virtually Unchanged in January
* State Bankruptcy Proposal Opposed by U.S. Governors
* U.S. Banks Need to Pay 4.5% of Net Income for FDIC Insurance
* Alvarez & Marsal Names Global Head of Transaction Advisory Group
* Keen Consultants' Real Estate Team Joins Great American Group
* Upcoming Meetings, Conferences and Seminars
*********
ADINO ENERGY: Names Shannon McAdams as Chief Financial Officer
--------------------------------------------------------------
Adino Energy Corporation announced it has named Mr. Shannon W.
McAdams, CFA as the company's Chief Financial Officer reflecting
Adino Energy's new focus on oil and gas exploration and
production.
Timothy G. Byrd, Sr., Adino Energy's Chief Executive Officer,
commented "Mr. McAdams brings a depth of transactional and capital
markets expertise that will be critical as we transition our
businesses and enter a rapid growth phase. I personally recruited
Shannon for the CFO position and I am very pleased that he has
agreed to join the Adino team."
A long time advisor to the Company, Mr. McAdams brings 14 years of
investment banking and principal investor experience. His
background includes energy industry transactional and financial
advisory work, transaction negotiation and structuring, due
diligence and strategic & commercial advice. Prior to joining
Adino Energy, Mr. McAdams was a Director at Galway Group where he
advised clients on E&P, mid-stream and petroleum distribution
transactions as well as LNG and geothermal projects. Previously,
he was with JPMorgan Chase & Co where he worked in investment
banking and later as a buy-side equity analyst. Mr. McAdams is a
former U.S. Army Officer and a Chartered Financial Analyst (CFA).
He earned his M.B.A. (with honors) from Tulane University, with
concentrations in Finance and Entrepreneurship, and a B.S. in
Interdisciplinary Finance from the University of Alabama where he
was a Distinguished Military Graduate.
"As we continue drilling and enhancing our West Texas oil field
prospects, including the drilling and development of the Leonard
lease, Shannon will focus on Adino's transactional initiatives,
corporate finance and capital raising activities. He will be a
key link to the investment community, ensuring that investors
recognize and understand the value that we are creating for
shareholders," Byrd concluded.
Chairman Sonny Wooley, a thirty-year veteran of the oil & gas
industry commented, "The Board of Directors and management team
appreciate the excellent work that Shannon has done for us as we
acquired and integrated our exploration and production assets. We
look forward to his continued contributions and leadership."
About Adino Energy
Based in Houston, Texas, Adino Energy Corporation (OTC BB: ADNY)
-- http://www.adinoenergycorp.com/-- through its wholly owned
subsidiary Intercontinental Fuels, LLC, specializes in fuel
terminal operations for retail, wholesale, and governmental
suppliers.
The Company's balance sheet as of September 30, 2010, showed
$3.82 million in total assets, $6.18 million in total liabilities,
and a stockholders' deficit of $2.36 million.
M&K CPAs, PLLC, in Houston, Tex., expressed substantial doubt
about Adino Energy Corporation's ability to continue as a going
concern, following the Company's 2009 results. The independent
auditors noted that the Company has suffered recurring losses from
operations and maintains a working capital deficit.
ADVANTA CORP: Soundpost Advisors Owns 6.0% of Class B Shares
------------------------------------------------------------
In a regulatory filing Friday, Soundpost Advisors, LLC, and
Soundpost Capital, LP, disclosed that as of December 31, 2010,
they may be deemed to beneficially own 1,785,454 shares
representing 6.0% of Advanta Corp.'s Class B Common Stock, $.01
par value.
A full-text copy of Soundpost Advisors' Schedule 13G/A is
available for free at http://researcharchives.com/t/s?72e8
About Advanta Corp.
Advanta Corp. -- http://www.advanta.com/-- issues business
purpose credit cards to small businesses and business
professionals in the United States. Advanta primarily funds and
operates its business credit card business through Advanta Bank
Corp., which offers a range of deposit products that are insured
by the Federal Deposit Insurance Corporation.
In June 2009, the FDIC placed significant restrictions on the
activities and operations of Advanta Bank, as the Bank's capital
ratios were below required regulatory levels.
On November 8, 2009, Advanta Corp. filed for Chapter 11 (Bankr. D.
Del. Case No. 09-13931). Attorneys at Weil, Gotshal & Manges LLP,
and Richards, Layton & Finger, P.A., serve as the Debtor's
bankruptcy counsel. Alvarez & Marsal is the financial advisor.
The Garden City Group, Inc., is the claims agent. The filing did
not include Advanta Bank. The petition said that Advanta Corp.'s
assets totaled $363,000,000 while debts totaled $331,000,000 as of
September 30, 2009.
Advanta Corp. will seek approval of its Chapter 11 plan at a
confirmation hearing on Feb. 10, 2011, after Judge Kevin J. Carey
approved the disclosure statement on Dec. 17, 2010. Under
Advanta's plan, holders of $140.6 million in unsecured notes could
be paid in full. General unsecured creditors, with as much as
$180.6 million in claims, could recover up to 71.3%.
ALLY FINANCIAL: Reports $79 Million Net Income in 4th Quarter
-------------------------------------------------------------
Ally Financial Inc. reported net income of $79 million on
$1.91 billion of total net revenue for the fourth quarter of 2010,
compared with a net loss of $4.95 billion on $1.57 billion of net
revenue for the fourth quarter of 2009.
The Company also reported net income of $1.07 billion on
$7.90 billion of total net revenue for the full-year 2010,
compared with a net loss of $10.30 billion on $6.49 billion of
total net revenue during the prior year.
The losses reported for the 2009 fourth quarter and full year were
largely affected by losses related to legacy assets in the
mortgage operations.
The Company's balance sheet at December 31, 2010, showed
$172.00 billion in total assets and $94.12 billion in total debt.
A full-text copy of the press release announcing the Company's
financial results is available for free at:
http://ResearchArchives.com/t/s?72e4
About Ally Financial
Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/
-- is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc.
to advise on a range of issues, including strategic alternatives
for the mortgage business and repayment of taxpayer funds.
Ally's balance sheet at Sept. 30, 2010, showed $173.191 billion
in total assets, $152.214 billion in total liabilities, and
$20.977 billion in total equity.
As reported by the Troubled Company Reporter on January 26, 2011,
Standard & Poor's Ratings Services raised its rating on the
preferred stock of Ally Financial Inc. (Ally; B/Stable/C) to 'CC'
from 'C'. The ratings firm noted that Ally improved its liquidity
position and alleviated some funding pressure at its holding
Company in recent months, making it easier to meet obligations on
its preferred stock. Nevertheless, the Company faces significant
debt maturities at its holding Company in 2011 and 2012, which is
reflected in the 'CC' rating.
ALLY FINANCIAL: Moody's Upgrades Issuer Ratings to 'B1'
-------------------------------------------------------
Moody's Investors Service upgraded the issuer and senior unsecured
ratings of Ally Financial Inc. and its supported subsidiaries to
B1 from B3. Concurrently, Moody's upgraded the senior secured
(second lien) and senior unsecured ratings of mortgage finance
subsidiary Residential Capital LLC to Caa3 and Ca, respectively,
from C. The rating outlook for both Ally and ResCap is stable.
Ratings Rationale
The Ally and ResCap upgrades reflect a decline in ResCap's
exposure to portfolio under-performance and mortgage repurchase
risks and an associated decrease in contingent risks to Ally
relating to its support of ResCap. Additional factors supporting
Ally's upgrade include its strengthened liquidity and capital
positions and prospects for continued profitability in its core
auto finance and mortgage businesses based upon positive asset
quality performance trends.
During 2010, ResCap sold its UK and European mortgage operations,
reducing assets and related contingent exposures by $11 billion.
The company also sold $2.5 billion of other legacy mortgages
during the year. Notably, the asset sales generated modest gains
versus book values that had been aggressively written down during
the fourth quarter of 2009. ResCap also reached settlements with
Fannie Mae and Freddie Mac with respect to representation and
warranty related mortgage repurchase exposure, capping repurchase
expenditures on a significant proportion of ResCap's originated
portfolio at $1.4 billion, the amount of repurchases and reserves
recognized by ResCap on these portfolios from 2008 through the end
of 2010. In stark contrast to prior periods, ResCap was
profitable in each quarter of 2010 and required no additional
support from Ally to repay maturing debt and maintain covenant
compliance under its bank facilities. Near-term demands on
ResCap's capital and liquidity resources should be manageable,
given the magnitude of the company's risk reductions, its positive
earnings, its modest 2011-2012 debt maturities, and its borrowing
availability under a credit line from Ally.
However, Moody's believes that ResCap's intrinsic credit profile
remains weak because of the longer-term risks to its liquidity
from mortgage underperformance, mortgage repurchases, and higher
debt maturities after 2012. ResCap's non-agency repurchase
requests trended downward during 2010, but the company continues
to be exposed to potentially significant private-label mortgage
repurchases that over time could exceed its year-end repurchase
reserves of approximately $830 million. An unexpected ramp-up in
mortgage repurchases would also increase the burden on ResCap's
already compressed cash flow.
"We believe that ResCap will require the continued support of its
parent Ally to repay its obligations in a timely manner," said
Moody's senior analyst Mark Wasden.
ResCap's ratings incorporate Moody's expectation that Ally will
continue to extend support to ResCap as it pursues further
reductions in legacy portfolio risks. Ally's history of capital
injections and loan extensions to ResCap over the past several
years and the importance of ResCap's origination and servicing
platforms to Ally's ongoing mortgage business favor an expectation
of continued support by Ally. Moody's anticipates that Ally will
renew its $1.6 billion line of credit to ResCap, together with a
separate amortizing credit facility of about $1 billion, when the
agreements mature in April 2011. As a consequence of risk
reductions already achieved, Moody's estimates that additional
capital support that could potentially be needed by ResCap, beyond
existing borrowing availability from Ally, would likely be
manageable within the context of Ally's total capital position.
Nevertheless, Ally's support is not certain, particularly if
ResCap's risk exposures were to materially escalate. As a result,
Moody's does not equalize the senior ratings of ResCap with those
of its parent.
Ally's upgrade is supported by improvements to its capital
position. The US Treasury's December 2010 conversion of $5.5
billion of its $11.4 billion holdings of Ally's mandatorily
convertible preferred securities increased Ally's common equity,
strengthening its buffer against unanticipated demands on its
capital resources, including from ResCap. Ally's measures of
capital adequacy are now well positioned in comparison to
traditional banks, with its Tier 1 common ratio increasing to 8.6%
at the end of 2010, up from 5.3% the prior quarter. However,
Moody's believes that Ally's business concentrations expose the
firm to elevated performance volatility during periods of
instability in the U.S. domestic auto and housing sectors. In
Moody's view, for Ally to maintain capital levels that are
commensurate with its risk concentrations, it must continue to
exhibit capital measures that are among the strongest of U.S.
financial institutions. A shift to higher leverage would be
limiting to Ally's ratings.
The MCP conversion also increased Ally's operating and financial
flexibility. Because GM's ownership in Ally was diluted to less
than 10%, the Federal Reserve no longer considers Ally Bank and GM
as affiliates under sections 23A and B of the Federal Reserve Act,
thereby eliminating the volume limitations on GM-related
receivables originated by Ally Bank. Ally should be able to make
greater use of low-cost deposits to fund its receivables, in lieu
of higher cost alternatives, which could aid its net interest
margin. Ally will also save about $500 million annually from
lower MCP dividends, paid at a 9% rate, thus further improving its
cost of capital. Moody's believes that these opportunities and
funding cost benefits strengthen Ally's business proposition and
could translate into improved access to both debt and equity
capital, with additional follow-on benefits to funding costs,
profitability, and liquidity.
With respect to liquidity, Ally demonstrated improved market
access in 2010 by raising $8 billion of unsecured debt in addition
to multiple ABS transactions and credit facility renewals. With
Ally's gradual transition to a bank funding model, a higher
proportion of new loans are funded in Ally Bank, which grew its
deposit base by $7 billion in 2010. By the end of the year,
deposits represented 31% of Ally's total interest-bearing funding,
up from 25% at the close of 2009. Ally has demonstrated high
retention of its primarily time deposits, notwithstanding offered
rates that are generally comparable to other banks. During 2010,
Ally Bank also had good access to ABS investors and it maintains
capacity under secured credit lines.
However, Ally's non-bank operations remain highly reliant upon
confidence-sensitive wholesale sources of funding, which
constrains the firm's credit profile. Ally's unsecured debt
maturities increase in 2011 to $9.5 billion and to $11.6 billion
in 2012 before declining to more manageable levels in subsequent
periods. In anticipation of increasing maturities, Ally has built
a solid cash liquidity position that, combined with secured
committed credit availability, extends its liquidity runway
through 2011. Though Ally will probably need to issue additional
debt to extend its liquidity through the end of 2012, the amount
of debt that it needs to raise should be manageable given what it
issued in 2010. Further transition in Ally's funding mix through
growth of stable low-cost deposits and reduced reliance on
wholesale funding would be a credit positive, strengthening the
firm's liquidity and potential for stronger profitability.
Positive asset quality performance trends in Ally's core
businesses also contributed to the firm's ratings upgrade. Ally
reported 2010 full year earnings of $1.1 billion, a sharp contrast
with a 2009 loss of $10.3 billion. The most significant component
of the year-over-year swing was a large decline in credit
provisions in Ally's auto and mortgage segments. Auto loan
default frequency and loss severity both improved during the year
, and together with tighter underwriting in recent quarters, led
to sharply lower non-performing loan levels and loss provisions.
Reserves were released in both business segments. Moody's does
not expect that Ally's 2011 earnings will reach 2010 levels
because the reduction in provision expense and allowance levels is
probably not repeatable in the same magnitude as in 2010.
Moody's believes that Ally's distinguishing franchise
characteristic is its strong penetration of GM and Chrysler dealer
floorplan relationships, which also provides it with access to
high volumes of retail loan and lease originations. Increasingly,
Ally is becoming less reliant on GM and Chrysler subvened
receivables and has grown its position in standard-rate retail
business. However, Ally's business model entails continuing GM
and Chrysler related concentrations and its funding model remains
concentrated in wholesale sources, which limits its credit
strength.
Additional constraints on Ally's ratings include its remaining
exposure to ResCap contingencies, ownership and business model
transition related execution risks, and uncertainty regarding the
sustainability of long-term performance prospects
The notching between the ratings assigned to ResCap's senior
secured (second lien) and senior unsecured debt reflects Moody's
estimate that the secured lenders would have materially lower loss
severity than unsecured creditors in a default scenario.
The stable ratings outlook for Ally and ResCap reflects Moody's
expectation that operating performance and asset quality trends in
its auto and mortgage businesses will continue to stabilize in
2011. The stable outlook also incorporates Moody's expectation
that capital support needs that could develop at ResCap over the
next 12-18 months are not likely to materially weaken Ally's
capital position. Moody's also anticipates that Ally's ownership
and business transitions will be well-managed in light of
potential risks to the stability of the firm's funding and
operations.
Ratings upgraded in the action include:
Ally Financial Inc.
-- Issuer Rating: to B1 from B3
-- Senior Unsecured: to B1 from B3
-- Preferred Stock, Series A: to Caa1(hyb) from Caa3 (hyb)
-- Preferred Stock, Series G: to B3 (hyb) from Caa2 (hyb)
Ally Credit Canada Limited:
-- Backed Senior Unsecured: to B1 from B3
GMAC Australia LLC:
-- Backed Senior Unsecured: to B1 from B3
GMAC International Finance B.V.:
-- Backed Senior Unsecured: to B1 from B3
GMAC Bank GmbH:
-- Backed Senior Unsecured: to B1 from B3
Residential Capital, LLC
-- Senior Secured (second lien): to Caa3 from C
-- Senior Unsecured: to Ca from C
In its last Ally and ResCap rating actions, dated February 5,
2010, Moody's upgraded Ally's senior unsecured rating to B3 from
Ca and affirmed ResCap's ratings at C.
Ally Financial Inc. is a global provider of auto finance,
residential mortgage finance, and related products and services.
Residential Capital, LLC is a wholly-owned subsidiary of Ally
engaged in residential mortgage origination and servicing.
ALLY FINANCIAL: DBRS Confirms 'BB' Issuer & Long-Term Debt Rating
-----------------------------------------------------------------
DBRS Inc. has confirmed the ratings of Ally Financial Inc. and
certain related subsidiaries, including its Issuer and Long-Term
Debt rating of BB (low). The trend on the Issuer and Long-Term
Debt ratings has been revised to Positive from Stable. The trend
on the short-term rating remains Stable. Today's rating action
does not impact the AAA rating of the Senior Notes Guaranteed by
the FDIC. Today's action follows the Company's announcement of
4Q10 results indicating net income of $79 million and $1.1 billion
for full-year 2010.
The ratings confirmation considers the substantial strength of
Ally's core Auto Finance franchise, its reduced risk profile and
the improved quality of the capital stack. In confirming the
ratings and revising the trend, DBRS recognizes the positive
trajectory in financial performance and acknowledges the Company's
success in transforming the business model. Finally, the ratings
consider Ally's funding and liquidity profile, which, while
improved, still includes a sizable amount of higher cost wholesale
funding, which adds to ongoing margin pressure.
After a transformational year in 2010, during which Ally converted
to a more market-focused model, the Global Auto Finance business
remains strong. Indeed, despite still depressed U.S. auto
industry sales, Ally increased U.S. originations 72% year-on-year
to $32 billion, including $9.3 billion in 4Q10, the highest
quarterly level since the beginning of 2008. Demonstrating the
strength of the franchise and Ally's ability to defend its market
share, only 28% of 4Q10 origination volume was related to
subvented business from GM and Chrysler. Ally's large dealer
network and the Company's ability to leverage these relationships
through its product offerings underpins the franchise and is a key
competitive advantage.
Ally has made significant progress in restoring its earnings
generation ability. For 4Q10 and full-year 2010, the Company
reported core pre-tax income, defined as income from continuing
operations before taxes and original issue discount (OID), of $533
million and $2.5 billion, respectively. The substantial
improvement in earnings was driven by a 20% increase, year-on-
year, in total net revenue to $9.2 billion due to the higher
balance in the loan book and a marked decrease in the amount of
non-performing loans. The larger loan book offset the decline in
net interest income, as margins moved lower reflecting the ongoing
shift to higher quality, lower yielding assets. Profitability
also benefited from a significant reduction in provision for loans
losses, as credit performance continues to improve. Indeed,
Ally's provision for loan losses in 2010 declined an impressive
92% to $442 million from $5.6 billion. Importantly, all four
operating segments were profitable in each of the four quarters in
2010. DBRS sees the quarterly and full year results as evidence
of good momentum across the franchise.
DBRS views the overall credit risk profile as significantly
improved. Credit trends in the Global Auto Finance business were
quite favorable. Losses on the retail book continue to improve,
with loss frequency declining and severity improving, as the
market for used vehicles remains healthy. Further, the positive
trajectory in delinquencies indicates credit trends will likely
remain healthy for the near term. Importantly, Ally's risk
profile has benefited from management actions taken to de-risk the
mortgage business. To this end, Ally reached "rep and warranty"
settlements with both Fannie Mae in 4Q10 and Freddie Mac in 1Q10,
and also sold its European mortgage business, which included
approximately $11 billion of assets and contingent liabilities.
While a significant amount of repurchase risk has been removed,
uncertainty over the repurchase risk for non-agency loans lingers.
The recent conversion of $5.5 billion of Mandatory Convertible
Preferred Shares (MCPs) by the U.S. Government into common equity
has improved the quality of Ally's capital base. However, there
are still $5.9 billion of high cost MCPs remaining. Nonetheless,
DBRS views the conversion positively, because it improves the loss
absorption ability of the capital structure and removes
approximately $500 million in annual dividend payments, which
should support internal capital generation. As a result of the
conversion the Company's Tier 1 common equity ratio increased to
8.6% from 5.3% at the end of 3Q10.
During 2010, the Company made noteworthy progress in diversifying
its funding profile. Net deposits grew by $7.3 billion, or an
impressive 23%, year-on-year to $39.0 billion, on strong CD
retention rates of 85%. Total deposits now account for 29% of
total funding. Importantly, Ally continues to demonstrate good
access to the capital markets generating $36.0 billion of funding
during 2010. With $23.8 billion of available corporate liquidity,
Ally has essentially pre-funded a large part of the Company's
unsecured debt maturities coming due over the next two years.
However, funding costs remain elevated and when combined with the
shift to lower yielding assets, are resulting in weakening
margins. DBRS anticipates the Company making additional progress
in 2011 towards addressing its high funding costs.
In revising the trend to Positive, DBRS recognizes the significant
achievements discussed above, and the substantial reduction in
the risk profile of ResCap. DBRS notes that concurrent with
this rating action, the ratings of ResCap were placed Under
Review with Positive Implications. Importantly, however, DBRS
notes that an upgrade in ResCap's rating does not necessarily
equate to an upgrade at Ally. In assigning the BB (low) rating
in January 2010, DBRS had a high level of confidence in the
management and its ability to execute on many of their key
objectives. As such, DBRS still sees the rating as well placed.
However, continuation of the positive momentum, transforming the
franchise, strengthening the balance sheet and advancing the track
record of solid earnings could lead to upward rating pressure.
Moreover, although the quality of the capital stack has improved,
DBRS would view positively further reduction in high cost capital.
DBRS has changed the name of several subsidiaries of Ally to
reflect their current legal names.
ALTOONA PIZZA: Chapter 7 Conversion Hearing Set for Feb. 17
-----------------------------------------------------------
Amanda Clegg at The Altoona Mirror reports that a Feb. 17 hearing
is scheduled before U.S. Bankruptcy Court Judge Jeffrey Deller to
determine whether the bankruptcy proceedings of the Altoona Pizza
One, Inc., also known as Uno Chicago Grill, should be moved from
Chapter 11 reorganization to Chapter 7 liquidation.
According to the report, Uno's closed in October as part of the
Chapter 11 bankruptcy proceeding filed in May by Altoona,
Pennsylvania developer Gregory Morris. Mexican restaurant El
Campesino is setting up shop in the former location of Altoona
Pizza at 200 E. Plank Road, in Altoona.
Altoona Pizza One, Inc., filed for Chapter 11 protection (Bankr.
W.D. Pa. Case No. 10-70680) on June 9, 2010.
AMBAC FINANCIAL: Committee Counsel Raises Hourly Rates
------------------------------------------------------
Anthony Princi, Esq., a partner at Morrision & Foerster LLP,
filed with the Court a notice of the firm's new hourly rates
effective January 1, 2011, for professionals that have provided
and may continue to provide services to the Official Committee of
Unsecured Creditors:
2010 2011
Name Title Group Rate Rate
---- ----- ----- ---- ----
Thomas A. Humphreys Partner Tax $950 $985
Gary S. Lee Partner Bankruptcy $900 $950
Larren M. Nashelsky Partner Bankruptcy $900 $950
Anthony Princi Partner Bankruptcy $900 $950
Edward L. Froelich Of Counsel Tax $695 $725
Alexandra S. Barrage Of Counsel Bankruptcy $635 $670
Renee L. Freimuth Associate Bankruptcy $590 $640
Remmelt A. Reigersman Associate Tax $590 $640
John A. Trocki Of Counsel Litigation $585 $620
Shane M. Shelley Associate Bankruptcy $510 $595
Stacy L. Molison Associate Bankruptcy $430 $500
Stephen P. Koshgerian Associate Bankruptcy $370 $380
Douglas Keeton Paralegal Bankruptcy $195 $225
As reported in the Jan. 3, 2011 edition of the Troubled Company
Reporter, the Official Committee of Unsecured Creditors in Ambac
Financial Group Inc.'s cases received the Bankruptcy Court's
authority to hire Morrison & Foerster LLP as its counsel, nunc pro
tunc to November 17, 2010.
As the Committee's counsel, Morrison & Foerster will:
(a) assist and advise the Committee in its consultation with
the Debtor relative to the administration of the Debtor's
Chapter 11 case;
(b) attend meetings and negotiate with representatives of the
Debtor and Sean Dilweg, the head of Wisconsin's Office of
the Commissioner of Insurance and their advisors;
(c) assist and advise the Committee in its examination and
analysis of the conduct of the Debtor's affairs;
(d) assist and advise the Committee in the review, analysis
and negotiation of any plans of reorganization that may be
filed and to assist the Committee in the review, analysis
and negotiation of the disclosure statement accompanying
any plans of reorganization;
(e) analyze and advise the Committee regarding tax issues in
connection with the Debtor's reorganization;
(f) assist and advise the Committee regarding its examination
and analysis of any potential investment in the Debtor by
a third party;
(g) take all necessary action to protect and preserve the
interests of the Committee and general unsecured
creditors, including (i) possible prosecution of actions
on their behalf, (ii) if appropriate, negotiations
concerning all litigation in which the Debtor is involved;
and (iii) if appropriate, review and analysis of claims
filed against the Debtor's estate;
(h) generally prepare on behalf of the Committee all necessary
motions, applications, answers, orders, reports and papers
in support of positions taken by the Committee;
(i) appear, as appropriate, before the Bankruptcy Court,
appellate courts, and the U.S. Trustee, and protect the
interests of the Committee before those courts and
before the U.S. Trustee; and
(j) perform all other necessary legal services in the Debtor's
case.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr.
S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it
will continue to operate in the ordinary course of business as
"debtor-in-possession" under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the
Bankruptcy Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed $30.05 billion in total assets,
$31.47 billion in total liabilities, and a $1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of ($394.5 million) and total liabilities of
$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about $1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The
Blackstone Group LP is the Debtor's financial advisor. Kurtzman
Carson Consultants LLC is the claims and notice agent. KPMG LLP
is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel to
the Official Committee of Unsecured Creditors. Lazard Freres &
Co. LLC is the Committee's financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Ambac Financial Group Inc.
(http://bankrupt.com/newsstand/or 215/945-7000)
AMBAC FINANCIAL: Proposes Wachtell Lipton as Litigation Counsel
---------------------------------------------------------------
Ambac Financial Group, Inc., seeks the U.S. Bankruptcy Court for
the Southern District of New York's permission to employ Wachtell,
Lipton, Rosen & Katz as its special litigation counsel, nunc pro
tunc to the Petition Date.
Since January 2008, Wachtell Lipton has represented the Debtor
and certain of its current and former officers and directors in
these securities and derivative actions known as "2008
Shareholder Litigation:"
A. Two securities class actions pending in the U.S. District
Court of the Southern District of New York, entitled In re
Ambac Financial Group, Inc. Securities Litigation, No. 08-
cv-411-NRB (S.D.N.Y.) and Tolin v. Ambac Financial Group,
Inc., No. 08-cv-11201-CM (S.D.N.Y.), collectively known as
the "Securities Class Actions;" and
B. Three derivative actions pending in the U.S. District Court
for the Southern District of New York, the Delaware Court
of Chancery, and the Supreme Court of the State of New
York, entitled In re Ambac Financial Group, Inc. Derivative
Litigation, No. 08-cv-854-SHS (S.D.N.Y.); In re Ambac
Financial Group, Inc. Shareholder Derivative Litigation,
Cons. C.A. No. 3521-VCL (Del. Ch.); and In re Ambac
Financial Group, Inc. Shareholders Derivative Litigation,
Cons. Index No. 650050/2008E (N.Y. Sup.), collectively
known as the "Derivative Actions."
As the Debtor's special counsel, Wachtell Lipton is expected to:
(a) assist the Debtor in negotiating and effectuating a
settlement of the 2008 Shareholder Litigation;
(b) negotiate and prepare papers seeking approval of the
Settlement by the New York District Court, the court in
which the Securities Actions are pending;
(c) represent the Debtor in the New York District Court and
State Courts in which the 2008 Shareholder Litigation is
pending, to the extent not stayed by Sections 362 or 105
of the Bankruptcy Code; and
(d) provide any assistance requested by Dewey & LeBoeuf LLP in
connection with efforts to obtain any necessary approvals
of the Settlement by the Bankruptcy Court.
The Debtor will pay Wachtell Lipton's professionals according to
the firm's customary hourly rates:
Title Rate per Hour
----- -------------
Partners $750 to $975
Associates $425 to $550
Paralegals $200 to $325
The Debtor will also reimburse Wachtell Lipton for its necessary
and actual expenses incurred.
Peter C. Hein, Esq., a partner at Wachtell, Lipton, Rosen & Katz
-- PCHein@wlrk.com -- discloses that his firm received retainers
from the Debtor totaling $1.65 million to apply against unpaid
future fees and expenses, subject to the approval of Bankruptcy
the Court. The portion of the retainer not used to compensate
Wachtell Lipton for its prepetition services and expenses will be
held by the firm as a retainer for postpetition services and
expenses. During the 90-day period before the Petition Date,
Wachtell Lipton also received these additional payments totaling
$502,509 for work done in the 2008 Shareholder Litigation:
Date Paid Amount Paid
--------- -----------
8/26/10 $192,777
9/10/10 $143,716
9/22/10 $143,716
10/15/10 $85,523
11/5/10 $80,493
In addition, as of the Petition Date, Wachtell Lipton incurred
$99,091 in fees and costs that had not separately been paid by
the Debtor. Wachtell Lipton understands that Debtor is seeking,
on Wachtell Lipton's behalf, permission from the Court to apply a
portion of the retainer that the firm received before the
Petition Date to these unpaid fees and costs, as well as
permission to apply the remaining portions of the retainer
to ongoing fees and costs in the 2008 Shareholder Litigation, Mr.
Hein says.
Mr. Hein further discloses that Wachtell Lipton represented or
represents certain parties in matters unrelated to the 2008
Shareholder Litigation, a schedule of which is available for free
at http://bankrupt.com/misc/Ambac_WachtellClients.pdf
Despite that disclosure, Mr. Hein assures the Court that Wachtell
Lipton does not represent or hold any interest adverse to the
Debtor or the Debtor's estate with respect to the 2008
Shareholder Litigation. He maintains that Wachtell Lipton is a
"disinterested person" as the term is defined under Section
101(14) of the Bankruptcy Code.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr.
S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it
will continue to operate in the ordinary course of business as
"debtor-in-possession" under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the
Bankruptcy Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed $30.05 billion in total assets,
$31.47 billion in total liabilities, and a $1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of ($394.5 million) and total liabilities of
$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about $1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The
Blackstone Group LP is the Debtor's financial advisor. Kurtzman
Carson Consultants LLC is the claims and notice agent. KPMG LLP
is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel to
the Official Committee of Unsecured Creditors. Lazard Freres &
Co. LLC is the Committee's financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Ambac Financial Group Inc.
(http://bankrupt.com/newsstand/or 215/945-7000)
AMBAC FINANCIAL: Says IRS Immunity Abrogated by 11 U.S.C. Sec. 106
------------------------------------------------------------------
As reported in the Jan. 25, 2011 edition of the Troubled Company
Reporter, the U.S. Internal Revenue Service has responded to the
adversary complaint filed with the U.S. Bankruptcy Court for the
Southern District of New York by Ambac Financial Group, Inc.,
against it. In the lawsuit, Ambac Financial seeks a declaratory
judgment on whether the IRS can seize $700 million in tax refunds
it has received. The IRS asserts these defenses against the
Debtor:
* The complaint should be dismissed to the extent the
Bankruptcy Court lacks jurisdiction over the subject matter
of the complaint;
* Any judgment or injunction against the IRS is barred by
sovereign immunity generally and also by Section 7421(a) of
the Internal Revenue Code; and
* The complaint should be dismissed to the extent it fails to
state a claim upon which relief could be granted.
Counsel to Ambac Financial Group, Inc., Peter A. Ivanick, Esq.,
at Dewey & LeBoeuf LLP, in New York, argues that the U.S.
Internal Revenue Service's sovereign immunity was abrogated by
Section 106 of the Bankruptcy Code. Section 106(a) expressly
waives sovereign immunity with respect to Sections 105(a), 106,
362(a) and 505 of the Bankruptcy Code, which form the statutory
predicates for the Debtor's request for injunction against the
IRS, he explains. Thus, as an exercise of the federal
government's sovereign immunity, the Anti-Injunction Act does not
impair the U.S. Bankruptcy Court for the Southern District of New
York's authority to issue the injunction sought in the TRO
Motion, Mr. Ivanick asserts.
Section 106 further provides that, "[t]he [bankruptcy] court may
issue a governmental unit an order, process, or judgment under
such sections or the Federal Rules of Bankruptcy Procedure,
including an order or judgment awarding a money recovery, but not
including an award of punitive damages," Mr. Ivanick elaborates.
By using the word "including" in the quoted provision, Congress
plainly contemplated bankruptcy courts issuing orders other than
for monetary damages, like injunctive relief, which is commonly
employed in orders pursuant to Sections 105(a), 362, and 524,
among other enumerated provisions, he points out.
Mr. Ivanick further contends that the IRS fails to cite authority
issued since the 1994 amendment of Section 106 to support its
erroneous contention that the Debtor asks the Bankruptcy Court to
ignore the statutory and regulatory framework of the federal tax
laws, and simply override them via judicial fiat. Having failed
to cite any authority to support its position, the IRS
fundamentally misreads holdings In re G-I Holdings, Inc. 420 B.R.
216 (Bankr. D.N.J. 2009), he argues.
In re G-I Holdings, the U.S. Bankruptcy Court for the District of
New York determined that Section 106 contains an unequivocal
waiver of the IRS's sovereign immunity in bankruptcy. The G-I
Holdings Court also held that under Section 106(a), "Congress
explicitly waived governmental sovereign immunity in the
bankruptcy context with respect to certain Bankruptcy Code
sections, including Sections 105 and 505," the precise provisions
the Debtor asks the Bankruptcy Court to apply in determining its
tax liability, Mr. Ivanick points out.
Notably, one of the non-debtors protected in G-I Holdings was the
chief operating subsidiary of the debtors' corporate tax group,
Mr. Ivanick cites. In the Debtor's adversary proceeding against
the IRS, the Debtor seeks a similar order that will protect its
operating subsidiary, Ambac Assurance Corporation, from
assessment and collection actions until the Bankruptcy Court
determines the Debtor's tax liability under Section 505 of the
Bankruptcy Code, a tax liability it shares with AAC as members of
a consolidated tax group. "If that injunction is not issued, the
IRS may levy and place liens upon AAC's assets, sounding the
possible death knell for the Debtor's reorganization prospects
before the Bankruptcy Court has been afforded the opportunity to
exercise its Section 505 powers to determine the Debtor's
liability," Mr. Ivanick emphasizes.
The Official Committee of Unsecured Creditors joins in the
Debtor's Response in support of the TRO Motion.
Debtor Seeks to Use
Alternative Dispute Resolution Procedures
The Debtor asks Judge Chapman to require the parties to the
adversary complaint or their attorneys to be present at a pre-
trial conference to be held on February 16, 2011. Moreover, the
Debtor seeks the Bankruptcy Court's authority to implement
certain alternative dispute resolution procedures to resolve the
IRS Adversary Proceeding and other matters as may aid in the
disposition of the action.
Mr. Ivanick relates that notwithstanding the IRS' Motion to
Withdraw Reference before the U.S. District Court for the
Southern District of New York, the IRS Adversary Proceeding is
not stayed pursuant to Rule 5011(c) of the Federal Rules of
Bankruptcy Procedure. The Debtor intends to vigorously oppose
the Withdrawal Motion and no return date has been set by the
District Court to hear the Withdrawal Motion. To avoid
unnecessary delay while the Withdrawal Motion is pending, it is
proper for the administration of the IRS Adversary Proceeding to
proceed in Bankruptcy Court, Mr. Ivanick asserts.
Accordingly, the Debtor proposes this scheduling order with
respect to the IRS Adversary Proceeding:
* February 25, 2011 Deadline to file initial disclosures
required pursuant to Rule 26(a) of
the Federal Rules of Civil
Procedure.
* March 4, 2011 Production Requests will be served.
* April 4, 2011 Responses to Production Requests
will be filed.
* April 22, 2011 Fact depositions will be completed.
* April 29, 2011 Requests for admissions will be
served.
* April __, 2011 Status Conference will take place.
* May 6, 2011 Plaintiff and Defendant's expert
disclosures under Rule 26(a)(2)(A)
will be made.
* May 27, 2011 Rebuttal expert reports will be
served.
* June 17, 2011 Expert depositions will be
completed.
* June 24, 2011 Discovery will be completed.
* July 15, 2011 All dispositive motions will be
served and notice to be heard on the
first available date after
August 15, 2011.
Mr. Ivanick stresses that time is of the essence to proceed with
discovery and to resolve the IRS tax dispute. He also discloses
that the Creditors' Committee consents to the granting of the
Debtor's ADR Procedures Motion while the IRS has indicated that
it will not consent to the proposed order.
ADR Procedures
Pursuant to Section 105(a) of the Bankruptcy Code, Rule 9019-1 of
the Local Rules of Bankruptcy Procedure of the U.S. Bankruptcy
Court for the Southern District of New York, and Rule 1.1 of the
Court's General Order M-390, the Debtor seeks assignment of the
IRS adversary proceeding to alternative dispute resolution.
The alternative dispute resolution will consist of a settlement
conference and mediation. The mediation will not require the
Debtor or the IRS to settle or compromise any dispute, but each
party will be required to (i) engage in settlement discussions,
(ii) participate in mediation in good faith, (iii) follow
directions of the mediator, and (iv) follow any additional
procedures approved by the Bankruptcy.
The proposed ADR procedures are:
(1) Within 10 days of the date of the order implementing ADR
Procedures, the Debtor or the IRS may request an initial
telephonic settlement conference to be held within five
days of the receipt of that request. Upon receipt of the
Notice of Settlement Conference, the recipient will be
required to respond within two days by either accepting
the proposed date and time in the Notice of Settlement
Conference or proposing an alternate date and time that is
no later than five days from the date and time in the
Notice of Settlement Conference.
(2) If the parties are not able to agree on a time and date
for the Settlement Conference, the dispute will
immediately proceed to mediation.
(3) The parties will allocate approximately one hour for the
initial Settlement Conference and that only the Debtor and
its representatives, the IRS and its representatives and
the Creditors' Committee and its representatives will
participate. All discussions will be subject to Section
408 of the Federal Rules of Evidence and the
confidentiality provisions of General Order M-390.
(4) Unless all issues in the IRS Adversary Proceeding have
been settled, mediation will commence 30 days after the
date of the order implementing the ADR Procedures without
regard to whether a Settlement Conference has been held or
requested or if a conference is still scheduled to occur.
If the parties cannot agree upon a mediator within 30 days
of the date of the Bankruptcy Court's order to mediate,
the Bankruptcy Court will appoint a mediator and alternate
mediator. The Debtor and the IRS will contact the
mediator to schedule the initial mediation date.
Mediation will be completed no later than 30 days after
the close of fact discovery.
(5) The mediator will have the broadest possible discretion as
provided under General Order M-390 including the
discretion to certify specific legal issues to the
Bankruptcy Court for decision.
(6) The mediation proceedings will take place in New York
unless agreed to by the parties and the mediator.
(7) The Debtor and the IRS will have the option of submitting
a mediation brief to the mediator, with service upon the
other parties to the mediation and the Creditors'
Committee; provided, that the mediator may direct the
parties to submit and serve mediation briefs on each
other, the mediator, and the Creditors' Committee. The
mediation briefs will be filed at least five days prior to
the scheduled mediation proceeding and will not
be filed with the Bankruptcy Court.
(8) The Debtor and the IRS will each appear in person in the
mediation proceeding. The Creditors' Committee may attend
and participate in all mediations. Each party must have a
principal in attendance having settlement authority. In
addition, the parties' counsel may attend the mediation
proceeding.
(9) Upon the filing of a notice and a hearing by either the
Debtor or the IRS, the Court may sanction the parties for
failing to comply with the mediation procedures. If the
mediator reports to the Bankruptcy Court that a party
subject to the mediation procedures is not cooperating,
the Bankruptcy Court may, on its own motion, schedule a
hearing to consider sanctions against that party for its
failure to cooperate in good faith.
(10) Sanctions as they relate to the Debtor may include but are
not limited to (i) attorneys' fees, (ii) fees and costs
of the mediator, (iii) termination of mediation
procedures, or (iv) rejection of some or all claims
asserted by the Debtor in the IRS adversary proceeding.
Sanctions as they relate to the IRS may include but are
not limited to (i) attorneys' fees, (ii) fees and costs of
the mediator, or (iii) an award of some or all of the
amounts and claims at issue in the adversary proceeding.
Litigation with respect to the issuance of Sanctions will
not delay the commencement of mediation.
(11) No statements or arguments made or positions taken by the
mediator, the Debtor, the Creditors' Committee, and the
U.S. during any part of the alternative dispute resolution
process, including, the Settlement Conference and
mediation may be disclosed for any purpose by the mediator
or any other parties or their attorneys or advisors to the
Bankruptcy Court or any third party. Similarly, all
briefs, records, reports, and other documents received
or made by the mediator while serving is in that capacity
will remain confidential and will not be provided to the
Bankruptcy Court, unless they would be otherwise
admissible.
The fundamental purpose of mediation is to allow an unbiased
third party to assist adversaries in reaching resolution of
issues upon which they disagree, Mr. Ivanick tells Judge Chapman.
The Debtor believes that the ADR Procedures will be a worthwhile
process that will enable it to reduce unnecessary administrative
expenses, maximize the value of the Ambac claims in the IRS
proceeding, and promote judicial efficiency by consensually
resolving these claims.
The Court will consider the Debtor's ADR Procedures Motion on
February 16, 2011. Objections are due no later than February 9.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code in Manhattan (Bankr.
S.D.N.Y. Case No. 10-15973) on November 8, 2010. Ambac said it
will continue to operate in the ordinary course of business as
"debtor-in-possession" under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the
Bankruptcy Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed $30.05 billion in total assets,
$31.47 billion in total liabilities, and a $1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of ($394.5 million) and total liabilities of
$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about $1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP represent the Debtor. The
Blackstone Group LP is the Debtor's financial advisor. Kurtzman
Carson Consultants LLC is the claims and notice agent. KPMG LLP
is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel to
the Official Committee of Unsecured Creditors. Lazard Freres &
Co. LLC is the Committee's financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Ambac Financial Group Inc.
(http://bankrupt.com/newsstand/or 215/945-7000)
AMERICAN APPAREL: Lenders Waive EBITDA Covenant Until Feb. 11
-------------------------------------------------------------
On Jan. 31, 2011, American Apparel, Inc., entered into a waiver to
its Credit Agreement, dated as of March 13, 2009, among the
Company, in its capacity as borrower, certain subsidiaries of the
Company, in their capacity as facility guarantors, Wilmington
Trust FSB, in its capacity as administrative agent and collateral
agent, Lion Capital (Americas) Inc., as a lender, Lion/Hollywood
L.L.C., as a lender, and other lenders from time to time party
thereto.
The Credit Agreement Waiver waives, for the period from Jan. 31,
2011, to but excluding Feb. 11, 2011, the Company's obligation to
maintain a minimum Consolidated EBITDA for the twelve consecutive
fiscal month period ending Jan. 31, 2011.
The Company is discussing possible amendments to the Lion Credit
Agreement to address its compliance with the Specified Covenant
for future trailing 12-month periods, as well as making the Credit
Agreement Waiver permanent beyond February 11, 2011. However, the
Company can provide no assurance that it will be able to secure
those amendments or extension nor, if secured, the terms thereof.
Under the terms of its revolving credit agreement with other
lenders and Bank of America, N.A., as administrative agent,
noncompliance with financial covenants under the Lion Credit
Agreement constitutes an event of default under the BofA Credit
Agreement. An event of default under the BofA Credit Agreement
which is not waived would block the Company from making borrowings
under its revolving credit facility, in which case the Company
would have to obtain additional liquidity. An event of default
under the Lion Credit Agreement or the BofA Credit Agreement could
result in all indebtedness thereunder being declared immediately
due and payable, in which case the Company would have to obtain
additional sources of liquidity. There can be no assurance that
the Company would be able to obtain additional sources of
liquidity on terms acceptable to the Company, or at all, or that
the Company's assets would be sufficient to repay in full its
obligations under the Company's debt instruments. The
acceleration of any or all amounts due under the Lion Credit
Agreement or the BofA Credit Agreement or the loss of the ability
to borrow under the BofA Credit Agreement would have a material
adverse impact on the Company's operations which would result in
the need for the Company to modify its current business plan or
curtail its operations and could affect the Company's ability to
continue operations as a going concern.
A full-text copy of the Credit Agreement Waiver is available for
free at http://ResearchArchives.com/t/s?72de
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 September 30, 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
The Company's balance sheet at September 30, 2010, showed
$322.7 million in total assets, $231.3 million in total
liabilities, and stockholders' equity of $91.4 million.
American Apparel disclosed in its quarterly report on Form 10-Q
for the third quarter of 2010 that based upon results of
operations for the nine months ended September 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 January 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."
AMERICAN APPAREL: Appoints John Luttrell as EVP and CFO
-------------------------------------------------------
On February 3, 2011, American Apparel, Inc. announced the
appointment of John Luttrell as Executive Vice President and Chief
Financial Officer of the Company, effective as of February 7,
2011.
Mr. Luttrell, age 56, has over 13 years of experience in the
retail industry. Prior to joining the Company, Mr. Luttrell was a
partner at CFOs 2 Go Partners, a management consulting firm, since
2009. From 2007 to 2008, Mr. Luttrell served as Executive Vice
President and Chief Financial Officer of Old Navy, Inc. Mr.
Luttrell also served as Executive Vice President and Chief
Financial Officer of The Wet Seal, Inc. from 2005 to 2007. Mr.
Luttrell also worked at Cost Plus, Inc., where he served as
Executive Vice President and Chief Financial Officer from 2004 to
2005, Senior Vice President and Chief Financial Officer from 2001
to 2004, and Vice President and Controller from 2000 to 2001. Mr.
Luttrell is a graduate of Purdue University, where he received a
Bachelor of Science degree in General Management and Accounting.
There is no family relationship between Mr. Luttrell and any of
the Company's directors or executive officers.
Adrian Kowalewski, who previously served as the Company's
Executive Vice President and Chief Financial Officer, has been
appointed to the position of Executive Vice President of Corporate
Strategy, effective as of February 7, 2011.
In connection with Mr. Luttrell's appointment as Executive Vice
President and Chief Financial Officer, the Company and Mr.
Luttrell entered into an employment agreement pursuant to which
Mr. Luttrell will serve as the Company's Executive Vice President
and Chief Financial Officer for an initial term of one year,
commencing on February 7, 2011, which term will automatically
extend for successive one-year periods as of each February 7
(beginning February 7, 2012) unless terminated by the Company on
at least 90 days written notice prior to the expiration of the
then-current term.
The Employment Agreement provides that Mr. Luttrell will receive a
minimum base salary of $400,000 per year, subject to increase
based on the annual review of the Compensation Committee. The
Employment Agreement also provides that Mr. Luttrell will be
entitled to a bonus of up to $25,000, subject to his continuing
employment with the Company through February 28, 2011 and delivery
of a written budget for the Company's 2011 fiscal year and a
written strategic plan forecast, both acceptable to the Board of
Directors. Mr. Luttrell will be eligible to receive an annual
incentive compensation award commencing with fiscal year 2011,
with a target payment equal to 75% of his salary during each such
fiscal year, subject to the terms and conditions of the Company's
annual bonus plan and further subject to certain targets or
criteria reasonably determined by the Board of Directors or the
Compensation Committee.
The Employment Agreement also provides that Mr. Luttrell will
receive grants of restricted stock and stock options covering
350,000 and 700,000 shares, respectively, under the Company's 2007
Performance Equity Plan or any successor plan, subject to
availability under the Equity Plan, when the Company is eligible
to issue such awards under its registration statement on Form S-8.
Both the restricted stock and option grants vest in four equal
annual installments on each of the grant date and each January 1,
2012, 2013 and 2014, provided, that in the event that a
transaction described in Section 10.2 of the Equity Plan occurs
during Mr. Luttrell's employment period and the resulting
successor to the Company refuses to assume or substitute for Mr.
Luttrell's outstanding stock option or restricted stock awards,
all of Mr. Luttrell's outstanding stock option and restricted
stock awards will fully vest and Mr. Luttrell will have the right
to exercise all of his outstanding stock options, including shares
as to which such stock options would not otherwise be vested or
exercisable. Mr. Luttrell will also participate in the benefit
plans that the Company maintains for its executives and receive
certain other standard benefits.
If Mr. Luttrell is terminated without "cause" or if he resigns for
"good reason", the Company will pay Mr. Luttrell the following:
(a) his base salary accrued through the date of such
resignation or termination and, subject to entering into a
release, continued payment of Mr. Luttrell's then-current
base salary for a period of twelve months;
(b) any bonus earned but not yet paid in respect of any
calendar year preceding the year in which such termination
or resignation occurs; and
(c) any unreimbursed expenses.
In addition, in such case, Mr. Luttrell and his eligible
dependents will be entitled to receive, until the earlier of the
last day of the Continuation Period and the date Mr. Luttrell is
entitled to comparable benefits by a subsequent employer,
continued participation in the Company's medical, dental and
insurance plans and arrangements. If the Company elects not to
extend Mr. Luttrell's term of employment, then unless Mr.
Luttrell's employment has been earlier terminated, Mr. Luttrell's
employment will be deemed to terminate at the end of the
applicable term and the Company will pay Mr. Luttrell the amounts
set forth in clauses (a) through (c) above in this paragraph.
If Mr. Luttrell's employment terminates by reason of his death or
disability, or if he is terminated for "cause" or if he resigns
without "good reason", the Company will pay him (a) his base
salary accrued through the date of such resignation or
termination; (b) any unreimbursed expenses; and (c) only in the
case of a termination because of his death or disability, (x) any
bonus earned but not yet paid in respect of any calendar year
preceding the year in which such termination of employment occurs
and (y) a pro rated amount of his target annual performance bonus,
if any, for the calendar year in which such termination of
employment occurs.
The Employment Agreement also provides that upon termination of
Mr. Luttrell's employment for any reason, he agrees to resign, as
of the date of such termination and to the extent applicable, from
the boards of directors of, and as an officer of, the Company and
any of the Company's affiliates and subsidiaries.
A full-text copy of Mr. Luttrell's Employment Agreement is
available for free at http://ResearchArchives.com/t/s?72fd
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 September 30, 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
The Company's balance sheet at September 30, 2010, showed
$322.7 million in total assets, $231.3 million in total
liabilities, and stockholders' equity of $91.4 million.
American Apparel disclosed in its quarterly report on Form 10-Q
for the third quarter of 2010 that based upon results of
operations for the nine months ended September 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 January 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."
AMERICAN COMMERCIAL: S&P Affirms 'B' Long-Term Corp. Family Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed its
'B' long-term corporate credit rating on Jeffersonville, Ind.-
based American Commercial Lines Inc. and removed it from
CreditWatch, where it was placed with developing implications on
Oct. 18, 2010, following the announcement of ACL's merger with an
affiliate of Platinum Equity. The outlook is stable.
At the same time, S&P affirmed the 'B+' rating on the company's
$200 million senior secured second-lien notes. The recovery
rating of '2' on the notes remains unchanged and indicates S&P's
expectations that lenders would receive a substantial (70%-90%)
recovery in the event of a payment default. S&P also assigned a
'CCC+' rating to the proposed $225 million senior unsecured paid-
in-kind toggle note issued by ACL I Corp., a parent of ACL, with a
'6' recovery rating, indicating S&P's expectations of a negligible
(0%-10%) recovery in a payment default scenario.
On Dec. 21, 2010, ACL closed its merger agreement with an
affiliate of Platinum Equity $800 million, which included
assumption of debt and acquisition costs of around $40 million.
The new owners, an affiliate of Platinum Equity, used a
$419 million contribution to fund the acquisition. The owners
plan to issue $225 million senior unsecured PIK toggle notes for a
one-time distribution to replace a portion of the initial equity
contribution. Despite the incremental debt to fund the
acquisition, S&P is affirming its ratings on ACL, because S&P
expects the company to maintain its financial profile on improved
earnings and reduced capital spending.
"S&P believes ACL's transportation segment will benefit from
improving volumes and rate gains, and S&P expects the
manufacturing segment's Jeffboat operations to benefit from a
significant order backlog arising from an aging U.S. barge fleet,
a significant portion of which is approaching the end of its
useful life," said Standard & Poor's credit analyst Funmi Afonja.
"Barge replacement will be further aided by the Oil Pollution Act
of 1990, which mandates double hulls for tank ships and tank
barges travelling in U.S. waters by 2015. S&P expects Jeffboat to
be more profitable over the next year. S&P believes that cost-
cutting, efficiency and optimization initiatives combined with
improving market fundamentals will help ACL maintain its financial
profile over the next year."
The ratings on ACL reflect its highly leveraged financial risk
profile and participation in the highly competitive and capital-
intensive barge shipping industry. The ratings also reflect ACL's
exposure to various demand swings due to economic changes,
seasonally fluctuating export volumes, and vulnerability to
weather-related disruptions to operations. Positive credit
factors include the company's substantial market position in the
U.S. domestic inland barge dry cargo industry, with some
diversification from its liquid barge transportation and
manufacturing segments, and competitive barriers to entry under
the Jones Act, which requires that U.S.-built vessels that are
registered in the U.S., with crews consisting of U.S. citizens,
carry shipments between U.S. ports. These requirements prevent
direct competition from foreign-flagged vessels. ACL operates a
fleet of Jones Act-qualified vessels. S&P characterizes ACL's
business risk profile as fair and its financial risk profile as
highly leveraged.
"The outlook is stable, reflecting S&P's belief that ACL will
maintain its financial profile over the next year as it benefits
from improved earnings and reduced capital spending, despite the
incremental debt used to support the acquisition," Ms. Afonja
added. "If economic pressures or weather-related disruptions to
operations caused earnings to decline, resulting in FFO to debt to
fall to around 10%, S&P could lower the ratings. Although less
likely, S&P could raise the ratings if continued gradual economic
recovery caused FFO to debt to move above 20% for a sustained
period."
ANNA NICOLE SMITH: Lawyer Insists Bankr. Court Has Jurisdiction
---------------------------------------------------------------
Reuters Legal reports that the lawyer representing the estate of
Anna Nicole Smith told the U.S. Supreme Court during oral argument
January 18 that a bankruptcy judge in California had the authority
to award the former Playboy model a huge portion of her late
husband's fortune.
According to Reuters, Kent L. Richland said the 9th U.S. Circuit
Court of Appeals erred when it ruled last March that the
Bankruptcy Court lacked the power to issue a final judgment on
Ms. Smith's inheritance from her late billionaire husband, J.
Howard Marwill.
As reported in the Jan. 20, 2011 edition of the Troubled Company
Reporter, the U.S. Supreme Court resumed hearings Jan. 18 to
consider whether Anna Nicole Smith's estate should get part of the
fortune left behind by her elderly Texas billionaire husband. The
justices listened to arguments from a lawyer of the late Ms.
Smith, whose estate is locked in a 16-year battle for some of the
$1.6 billion estate left by her late husband, oil tycoon J. Howard
Marshall.
A ruling could be rendered as early as April, but certainly prior
to June when the Supreme Court session ends, according to
Examiner.com.
The case in the Supreme Court is Stern v. Marshall, 10-179 (U.S.).
The case in the Appeals Court was Marshall v. Stern (In re Vickie
Lynn Marshall), 02-56002 (9th Cir.).
About Anna Nicole Smith
Anna Nicole Smith, formally known as Vickie Lynn Hogan, filed
under Chapter 11 in 1996 as part of a struggle over the estate of
J. Howard Marshall, whom she married in 1994 when she was 26 and
died barely a year after they were wed. Ms. Smith, a former
Playboy model and actress, died in February 2007.
Mr. Marshall left his estate to his son, E. Pierce Marshall, and
nothing to Ms. Smith. Ms. Smith, alleging that her husband had
promised to leave her a large share of the estate, won a ruling
from a bankruptcy judge in 2000 awarding her $475 million from Mr.
Marshall's estate. A federal judge in 2002 reduced that amount to
$89 million. The U.S. Court of Appeals for the Ninth Circuit in
San Francisco threw out the judgment in 2004, holding that the
bankruptcy court didn't have jurisdiction over probate matters.
The U.S. Supreme Court in May 2006 issued a decision, overruling
the appeals court and finding that the bankruptcy court had
jurisdiction, even though the issues also could have been decided
in the Texas probate court. The Supreme Court remanded the case
for the federal appellate court to decide whether her victory in
the bankruptcy and district courts was knocked out because a Texas
probate court had entered judgment first against her.
On remand from the Supreme Court, the 9th Circuit issued its
decision in March 2010, concluding that the bankruptcy court
didn't have so-called core jurisdiction. The 9th Circuit noted
that before the U.S. district court was able to enter judgment in
her favor, the Texas probate court had entered judgment against
her saying she was entitled to nothing from her deceased husband's
estate.
In September 2010, the Supreme Court agreed to take a second look
at disputes arising in and related to Ms. Smith's 1996 bankruptcy
case and her entitlement to payment of the $449 million bankruptcy
court judgment.
ARROW ALUMINUM: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Arrow Aluminum Industries, Inc.
113 Neal Street
Martin, TN 38237
Bankruptcy Case No.: 11-21215
Chapter 11 Petition Date: February 6, 2011
Court: U.S. Bankruptcy Court
Western District of Tennessee (Memphis)
Judge: David S. Kennedy
Debtor's Counsel: Curtis D. Johnson, Jr., Esq.
LAW OFFICE OF CURTIS D. JOHNSON, JR.
1374 Madison Avenue
Memphis, TN 38104
Tel: (901) 725-7520
Fax: (901) 725-7570
E-mail: johnson775756@att.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Ted Blackwell, president.
ARVINMERITOR INC: BlackRock Discloses 7.44% Equity Stake
--------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission on February 2, 2011, BlackRock, Inc. disclosed
that it beneficially owns 7,008,635 shares of common stock of
ArvinMeritor Inc. representing 7.44% of the shares outstanding.
As of January 2, 2011, there were 94,234,334 shares of Common
Stock, $1.00 par value, of ArvinMeritor, Inc., outstanding.
About ArvinMeritor
Based in Troy, Michigan, ArvinMeritor, Inc. --
http://www.arvinmeritor.com/-- supplies integrated systems,
modules and components to the motor vehicle industry. The Company
celebrated its centennial anniversary in 2009. The Company serves
commercial truck, trailer and specialty original equipment
manufacturers and certain aftermarkets, and light vehicle
manufacturers.
The balance sheet at September 30, 2010, showed $2.879 billion in
assets, $3.902 billion in liabilities and a $1.023 billion
shareholders' deficiency. Shareholders' deficiency was
$909.0 million at June 30, 2010.
* * *
At the end of January 2011, Standard & Poor's Ratings Services
raised its corporate credit rating on ArvinMeritor Inc. to 'B'
from 'B-'. The outlook is stable. At the same time, S&P also
raised its issue-level ratings on the Company's senior secured and
unsecured debt.
S&P said the ratings on ArvinMeritor reflect the Company's highly
leveraged financial risk profile and weak business risk profile.
The Company's limited profitability has kept cash generation low,
given the cyclical and competitive pricing pressures of the
industry. Although S&P expect margins to improve, S&P believe
pension funding and working capital investments will result in a
use of cash in fiscal 2011. But S&P believe the Company's large
cash balances will be sufficient to fund this cash use.
ArvinMeritor has 'B3' corporate family and probability of default
ratings from Moody's Investors Service. In July 2010, when
Moody's raised the ratings to 'B3' from 'Caa1', it noted that
about 52% of the company's fiscal 2010 revenues to date are from
North America, where demand is expected to strengthen in the
second half of the year. But with 21% of the Company's revenue
from Europe, a slower pace of economic recovery is expected to
constrain overall growth. Tight credit markets also may limit
near-term growth in commercial vehicle purchases, Moody's said.
ARVINMERITOR INC: Daniel Young Resigns as Director
--------------------------------------------------
On January 31, 2011, Daniel Young resigned as a Director of the
Company. Mr. Young's resignation was not the result of any
disagreement with the Company, known to an executive officer of
the Company, on any matter relating to the Company's operations,
policies, or practices.
About ArvinMeritor
Based in Troy, Michigan, ArvinMeritor, Inc. --
http://www.arvinmeritor.com/-- supplies integrated systems,
modules and components to the motor vehicle industry. The Company
celebrated its centennial anniversary in 2009. The Company serves
commercial truck, trailer and specialty original equipment
manufacturers and certain aftermarkets, and light vehicle
manufacturers.
The balance sheet at September 30, 2010, showed $2.879 billion in
assets, $3.902 billion in liabilities and a $1.023 billion
shareholders' deficiency. Shareholders' deficiency was
$909.0 million at June 30, 2010.
* * *
At the end of January 2011, Standard & Poor's Ratings Services
raised its corporate credit rating on ArvinMeritor Inc. to 'B'
from 'B-'. The outlook is stable. At the same time, S&P also
raised its issue-level ratings on the Company's senior secured and
unsecured debt.
S&P said the ratings on ArvinMeritor reflect the Company's highly
leveraged financial risk profile and weak business risk profile.
The Company's limited profitability has kept cash generation low,
given the cyclical and competitive pricing pressures of the
industry. Although S&P expect margins to improve, S&P believe
pension funding and working capital investments will result in a
use of cash in fiscal 2011. But S&P believe the Company's large
cash balances will be sufficient to fund this cash use.
ArvinMeritor has 'B3' corporate family and probability of default
ratings from Moody's Investors Service. In July 2010, when
Moody's raised the ratings to 'B3' from 'Caa1', it noted that
about 52% of the company's fiscal 2010 revenues to date are from
North America, where demand is expected to strengthen in the
second half of the year. But with 21% of the Company's revenue
from Europe, a slower pace of economic recovery is expected to
constrain overall growth. Tight credit markets also may limit
near-term growth in commercial vehicle purchases, Moody's said.
ASARCO LLC: Barclays Presents Issues on Appeal of Fee Order
-----------------------------------------------------------
Barclays Capital Inc. presented to the United States Bankruptcy
Court for the Southern District of Texas its statement of issues
on appeal in connection with the appeal of ASARCO LLC and the
Parent from the memorandum opinion and order on the fee
application and fee enhancement motion of Barclays entered by the
Bankruptcy Court on December 2, 2010.
Barclays wants the United States District Court for the Southern
District of Texas to determine whether the Bankruptcy Court
erred:
-- in applying a standard that requires Barclays to have been
the exclusive factor in the success of the Debtors'
Chapter 11 cases, rather than the standard for the award of
a "Discretionary Fee" set forth in Barclays' engagement
letter, which was approved by the Bankruptcy Court pursuant
to a final order on November 26, 2008, and was not
appealed;
-- in applying the standard set forth in Section 328(a) of the
Bankruptcy Code in ruling on Barclays' request for a
Discretionary Fee, in lieu of the controlling standard,
which included the quality of service, the creativity of
service and market rates, for an award of a Discretionary
Fee set forth in the Engagement Letter;
-- in awarding only $975,000 of the requested $9,202,500
Discretionary Fee; and
-- in failing to consider any evidence of "market rates" for
the services rendered by Barclays.
Barclays also filed with the Bankruptcy Court a counter-
designation of documents and related filings for inclusion in the
record on appeal.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts
L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented
the Debtor in its restructuring efforts.
On December 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter
11 plan that it sponsored for Asarco LLC. The Plan, which was
confirmed both by the bankruptcy and district courts, reintegrated
Asarco LLC back to parent Grupo Mexico concluding the four-year
Chapter 11 proceeding.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Plan Administrator Objects to Victor Karl Claim
-----------------------------------------------------------
In a letter addressed to Bankruptcy Judge Richard Schmidt, Victor
Karl relates that the United States Bankruptcy Court for the
Southern District of Texas has approved a host of claims relating
to ASARCO LLC's Deferred Income Benefits System in dollar amounts
far exceeding his Claim, and those have been paid months ago.
The Karl Claim seeks, inter alia, benefits under the ASARCO Group
Life and Accidental Death and Dismemberment Insurance Plan, the
ASARCO Medicare Supplement Plan for Retired Salaried Employees,
and the ASARCO Deferred Income Benefits System.
Mr. Karl alleges that his Claim has been impermissible withheld
from payment. He contends that the Claim is not and never has
been part of the litigations pending before the United States
District Court for the Southern District of New York and arose
postpetition and after the filing of claims in the Debtors'
bankruptcy cases. Mr. Karl specifies that his remaining payments
due and payable in January 2006 and January 2007 were being
withheld.
The two pending District Court litigations were brought
prepetition by Mr. Karl against ASARCO's Parent and the ASARCO
Administrative Committee as benefit plans' fiduciaries relating
to his entitlement of payments under a post-retirement group life
insurance and a Medicare supplement plan. The two lawsuits were
stayed following the Debtors' filing for bankruptcy protection.
Accordingly, Mr. Karl withdraws his Claim No. 2857 from the
jurisdiction of the Bankruptcy Court, and asks the Bankruptcy
Court that the automatic stay of his litigation pending in the
New York District Court be promptly lifted. He asserts that his
request should be granted because of the consensual nature of the
jurisdiction issue and the advanced progress of the New York
District Court litigation.
In a supplementary memorandum filed with the Bankruptcy Court,
Mr. Karl contends that if the automatic stay is lifted, he will
proceed with the pending litigation on his insurance lawsuit to
resolve the issues.
Plan Administrator Responds
The Plan Administrator asks Judge Schmidt to deny Mr. Karl's
request because the Bankruptcy Court retained jurisdiction over
all matters incident to any of the injunctions set forth in the
Debtors' Confirmed Plan of Reorganization.
Furthermore, by filing the Claim, Mr. Karl submitted to the
jurisdiction of the Bankruptcy Court, Dion W. Hayes, Esq., at
McGuirewoods LLP, in Richmond, Virginia, points out. Mr. Hayes
insists that Mr. Karl may not now unilaterally withdraw all or
part of his Claim pursuant to Rule 41 of the Federal Rules of
Civil Procedure, which is made applicable to this contested
matter pursuant to Rules 9014 and 7041 of the Federal Rules of
Bankruptcy Procedure.
Indeed, requiring Mr. Karl to prosecute the insurance litigation
in the Bankruptcy Court with the remainder of the Claim would aid
in the efficient and effective resolution of all of his claims
and assist in maintaining judicial economy by allowing his Claim
to be resolved in a single matter, which is likewise convenient
to witnesses and others associated with the matter, Mr. Hayes
argues.
Allowing Mr. Karl to proceed with the insurance lawsuit in the
New York District Court would effectively permit him to engage in
improper claim splitting because he would be litigating two of
his three claims before the Bankruptcy Court, while the third
would proceed in the New York District Court, Mr. Hayes contends.
Given the fact that Reorganized ASARCO LLC is not the successor
to the Parent/defendant in the insurance lawsuit, it is
questionable whether ASARCO is a proper party to that suit in the
first instance, and whether the New York District Court has
personal jurisdiction over it, Mr. Hayes asserts. The Plan
Administrator, hence, asks the Bankruptcy Court to retain
jurisdiction over the insurance lawsuit and the remainder of the
Claim, issue a scheduling order, and allow the matter to proceed
toward a final resolution of the Plan Administrator's objection
to the Claim.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts
L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented
the Debtor in its restructuring efforts.
On December 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter
11 plan that it sponsored for Asarco LLC. The Plan, which was
confirmed both by the bankruptcy and district courts, reintegrated
Asarco LLC back to parent Grupo Mexico concluding the four-year
Chapter 11 proceeding.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
ASARCO LLC: Settles Sidley Austin's $1.6 Mil. Claim
---------------------------------------------------
Reorganized ASARCO LLC, Plan Administrator Mark A. Roberts,
Sidley Austin LLP and Goldman Sachs Credit Partners, L.P.,
entered into a Court-approved stipulation dismissing with
prejudice Sidley Austin's (i) Motion to Reconsider, and
(ii) Claim No. 10739.
Sidley Austin had asked Judge Richard Schmidt on October 8, 2010,
to reconsider his order sustaining ASARCO's objection to the Claim
and disallowing the Claim. Sidley Austin previously assigned the
Claim to Goldman Sachs.
The Parties agree that Goldman Sachs is entitled to a Class 3
General Unsecured Claim for $40,000, inclusive of any claims for
Postpetition Interest and postpetition attorney's fees, on
account of the Claim. The Parties further agree that each will
bear its own fees, costs, and expenses related in any way to the
Motion, the Claim, and any related pleadings.
Upon payment by the Plan Administrator of the Settlement Amount
to Sidley Austin, to which payment Goldman consents, Sidley
Austin and Goldman agree that all claims asserted in the Motion
and the Claim and any other claims relating to legal services
rendered by Sidley Austin to the Debtors, including the Parent
and Grupo Mexico, on or prior to December 9, 2009, are absolutely
and irrevocably waived, released, disallowed and extinguished.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection on August 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). Attorneys at Baker Botts
L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented
the Debtor in its restructuring efforts.
On December 9, 2009, Grupo Mexico, S.A.B., consummated the Chapter
11 plan that it sponsored for Asarco LLC. The Plan, which was
confirmed both by the bankruptcy and district courts, reintegrated
Asarco LLC back to parent Grupo Mexico concluding the four-year
Chapter 11 proceeding.
Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
AVAYA INC: S&P Assigns 'B' Senior Rating to Eight-Year Notes
------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
senior secured rating (one notch above the 'B' corporate credit
rating) to $1.009 billion eight-year notes offered by Basking
Ridge, N.J.-based Avaya Inc. The recovery rating is '2',
indicating substantial (70%-90%) recovery prospects in the event
of a payment default.
Proceeds from the notes will repay in full the company's existing
$1 billion term loan B2. The new financing, along with a recently
completed amend and extend transaction, are modest positives in
that maturities have been extended without increasing interest
expense. Still, in S&P's view, Avaya remains highly levered and
cash flow is likely to remain mildly positive or neutral.
The 'B-' corporate credit rating on the company remain unchanged.
Ratings List
Avaya Inc.
Corporate Credit Rating B-/Stable/--
Avaya Inc.
New Rating
Senior Secured
$1.009 bil. eight-year notes B
Recovery Rating 2
AXION INTERNATIONAL: Inks $15-Mil. Contract With Major Railway
--------------------------------------------------------------
Axion International announced the signing of a $15 million
contract with one of the largest railroads in North America.
This Class 1 railroad has agreed to purchase a minimum of
$5 million per year of Axion's innovative composite railroad ties,
designed from 100% recycled plastic.
"Entering into this $15 million contract represents a historic
event and extraordinary milestone for Axion and our shareholders,"
said Steve Silverman, Axion's President and Chief Executive
Officer. "As we continue to expand our sales efforts, this
contract is a clear signal that the Class 1 railroad market is
looking for longer-lasting, more long-term economical alternatives
to wood and concrete and is ready to make significant investments
in Axion's innovative recycled plastic technology."
These railroad ties will be made from Axion's Recycled Structural
Composite (RSC), a revolutionary and proprietary product made from
100% recycled plastic. The ties will be utilized for track
throughout the United States, primarily as a replacement for aging
wood ties.
"As part of its ongoing maintenance efforts, the U.S. railroad
industry purchases approximately 20 million railroad ties per
year," added Mr. Silverman. "This contract represents our first
sizable push into the domestic rail tie market and the entire
management team is extremely proud of this achievement. We
believe that Axion, which delivers more durable, environmentally
friendly products with a lower cost of lifetime ownership, has
been presented with a tremendous opportunity to increase our share
of this market going forward."
James Kerstein, Axion's Co-Founder and Chief Technology Officer
commented, "Due to the size and length of this multi-year
contract, Axion will be able to significantly increase the scale
of our operations and improve efficiencies. As we continue to win
additional contracts of this size, we look forward to expanding
our ability to deliver Axion's innovative recycled products for
use in structural applications in the United States and
worldwide."
Axion's RSC is inert and contains no toxic materials. It will
never leach, warp and is impervious to insect infestation.
Because it is lighter than traditional materials, transporting RSC
is less expensive and reduces energy costs. In addition, RSC is
completely recyclable at the end of its functional life.
About Axion International
New Providence, N.J.-based Axion International Holdings, Inc.
(OTC BB: AXIH) -- http://wwwaxionintl.com/-- is a structural
solution provider of cost-effective alternative infrastructure and
building products. The Company's "green" proprietary technologies
allow for the development and manufacture of innovative structural
products made from virtually 100% recycled consumer and industrial
plastics.
The Company's balance sheet at Sept. 30, 2010, showed $1.7 million
in total assets, $2.1 million in total liabilities, and a $439,000
stockholders' deficit.
Jewett, Schwartz, Wolfe and Associates, in Hollywood, Florida,
expressed substantial doubt about the Company's ability to
continue as a going concern, following the Company's results for
the fiscal years ended September 30, 2009 and 2010. The
independent auditors said that the Company's need to seek new
sources or methods of financing or revenue to pursue its business
strategy, raise substantial doubt about the Company's ability to
continue as a going concern.
BARBARA CHADWICK: Transfer of Residence to Partnership Void
-----------------------------------------------------------
Bankruptcy Judge Shelley D. Rucker ruled that Barbara Chadwick's
transfer of an entirety interest in her residence to Chadwick
Family Limited Partnership, a family limited partnership owned by
the Debtor and her family members, of which the Debtor serves as
the general partner, was not made with intent to hinder, delay or
defraud her creditors; however, it was a transfer of an asset for
less than reasonably equivalent value at a time when the Debtor
intended to incur, or believed or reasonably should have believed
that the Debtor would incur debts beyond the Debtor's ability to
pay as they became due. The Court held that the transfer of the
survivorship interest to the Residence Partnership is void; and
the Debtor's survivorship interest should be returned to the
estate for administration through the plan of reorganization.
The case is Brian and Donna Weir, v. Barbara Allen Chadwick,
Melvin Chadwick, James Thompson, Shawn Thompson, Jose Gerena,
Austin Chadwick, Chadwick Family Limited Partnership, Dutch
Laundry Limited Partnership, Prospect Apartments Family Limited
Partnership, and Bank of Cleveland, Adv. Pro. No. 09-1183 (Bankr.
E.D. Tenn.). A copy of the Court's February 4, 2011 Memorandum is
available at http://is.gd/lR0VTYfrom Leagle.com.
Barbara Chadwick, 62, is married to Melvin Chadwick. She filed
for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 09-11047) on
February 20, 2009. The Debtor's Summary of Schedules in her
Chapter 11 Bankruptcy Case indicates that she has total assets
valued at $191,200 (excluding the value of assets she listed as
"unknown" which assets included her interest in the Residence
Partnership) and total liabilities of $217,611.
BEAZER HOMES: BlackRock Holds 7.23% Equity Stake
------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission on February 2, 2011, BlackRock, Inc.,
disclosed that it beneficially owns 5,468,088 shares of common
stock of Beazer Homes USA Inc. representing 7.23% of the shares
outstanding. The number of shares outstanding of the Company's
common stock as of November 3, 2010 was 75,669,381.
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
The Company's balance sheet at June 30, 2010, showed $1.95 billion
in total assets, $1.50 billion in total liabilities, and
stockholders' equity of $454.73 million.
* * *
Beazer carries (i) a "B-" issuer credit rating, with "stable"
outlook, from Standard & Poor's, (ii) "Caa1" probability of
default and long term corporate family ratings from Moody's, and
(iii) 'B-' issuer default rating, with stable outlook, from Fitch
Ratings.
Fitch said in November 2010 that the ratings and Outlook for
Beazer reflect the company's healthy liquidity position, improved
capital structure as well as the challenges still facing the
housing market. Fitch expects existing home sales will decline
7.5% in 2010 and increase 6% in 2011.
S&P said in November 2010 that although Beazer's business and
liquidity profiles have improved, S&P doesn't anticipate raising
its ratings on the company over the next 12 months because S&P
expects costs associated with the company's heavy debt load will
weigh on profitability. S
The Caa1 corporate family rating reflects Moody's expectation that
Beazer has reduced costs sufficiently that it will continue to
reduce losses in fiscal 2011. The impairments and other charges
are likely to be less material going forward, given the company's
improving gross margin performance, stabilizing pricing
environment, and increasing absorptions. However, Moody's
expectation is that Beazer's cash flow performance will weaken in
2011, as the benefits of inventory liquidation have largely played
out. The ratings also reflect the company's extended debt
maturity profile, improved Moody's-adjusted debt leverage, and
increased net worth position.
BESO LLC: Attorneys Defend Longoria's Beso Over Dismissal
---------------------------------------------------------
Steve Green at the Las Vegas Sun reports that CityCenter, Las
Vegas attorneys defended Eva Longoria in a dispute in the Beso
restaurant bankruptcy case, agreeing the Chapter 11 case should
not be dismissed as requested Beso investor Mali Nachum.
According to the report, Beso, 32% owned by Ms. Longoria, has been
mired in litigation with Mali Nachum and her husband, Ronen, over
claims the Nachums were wrongly pushed out of the business.
The Las Vegas Sun relates that Ms. Nachum filed a motion in the
bankruptcy case, charging that the bankruptcy was filed in bad
faith and asking that the bankruptcy be dismissed so she could
litigate her $400,000 claim against Beso. Because of the
automatic stay in bankruptcy cases, the bankruptcy filing put that
litigation on hold.
About Beso, LLC
Beso, LLC, co-owned by "Desperate Housewives" star Eva Longoria,
filed for Chapter 11 bankruptcy protection on January 6, 2011
(Bankr. D. Nev. Case No,. 11-10202).
Beso, LLC, runs a Las Vegas restaurant that opened two years ago.
It disclosed assets of $2,512,007 and liabilities of $5,680,339 in
the schedules attached to the Chapter 11 petition. Lenard E.
Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, in Las
Vegas, Nevada, serves as counsel to the Debtor.
The petition was signed by William M. Braden, manager.
BLUEKNIGHT ENERGY: Solus Expresses Concerns Over GTA Allegations
----------------------------------------------------------------
Solus Alternative Asset Management LP has continued to send
letters to management of Bright Energy Partners, L.P., in
connection with the former's objection to the latter's
implementation of the Global Transaction Agreement.
A Jan. 18, 2011 letter by James C. Dyer, IV, the chief executive
officer of Bright Energy Partners, L.P., provided some background
regarding the Global Transaction Agreement and also indicated that
modifications to the Phase II Transactions were under
consideration.
On Jan. 20, Solus responded through a letter, which, among other
things, emphasized the need for consultation with the Company's
major investors prior to further implementation of the Global
Transaction Agreement or modifications thereto.
Solus says that as of Feb. 2, Bright Energy has not responded to
the letter.
On Feb. 2, 2011, Solus sent a letter to the Conflicts Committee of
the Board of Directors of the General Partner which, among other
things, expressed concern over public allegations with respect to
the process conducted by the Conflicts Committee in approving the
Global Transaction Agreement. The letter also emphasized the need
for a meeting between the Conflicts Committee and the Company's
major investors.
Solus beneficially owns 1,570,000 shares of common stock of the
Company representing 7.2% of the shares outstanding. As of
November 5, 2010, there were 21,538,462 preferred units,
21,727,724 common units and 12,570,504 subordinated units
outstanding.
Vitol Deal, GTA Modification
As reported in the Jan. 21, 2011 edition of the Troubled Company
Reporter, Solus Alternative Asset Management LP and Swank Capital,
LLC, owner of 16.2%, have conveyed objections to further
implementation of the Global Transaction Agreement.
As contemplated by the Global Transaction Agreement entered into
on October 25, 2010, by and among Blueknight Energy Partners,
L.P., Blueknight Energy Partners G.P., L.L.C., the general partner
of the Partnership (the "General Partner"), Blueknight Energy
Holding, Inc. ("Vitol Holding") and CB-Blueknight, LLC
("Charlesbank Holding"), on November 12, 2010, the General Partner
purchased 433,758 General Partner Units in the Partnership to
maintain the General Partner's approximate 2% general partner
interest in the Partnership in exchange for aggregate
consideration of approximately $2.8 million. The General Partner
Units were issued and sold in a private transaction exempt from
registration under Section 4(2) of the Securities Act of 1933, as
amended, and certain rules and regulations promulgated under that
section.
About Blueknight Energy
Blueknight Energy Partners, L.P. (Pink Sheets: BKEP)
-- http://www.bkep.com/-- provides integrated terminalling,
storage, processing, gathering and transportation services for
companies engaged in the production, distribution and marketing of
crude oil and asphalt product. It provides services for the
customers, and its only inventory consists of pipeline linefill
and tank bottoms necessary to operate the assets. It has three
operating segments: crude oil terminalling and storage services,
crude oil gathering and transportation services, and asphalt
services.
The Company's balance sheet at Sept. 30, 2010, showed
$295.96 million in total assets, $444.02 million in current
liabilities, $4.69 million in long-term payable to related
parties, and a partners' deficit of $152.75 million.
* * *
PricewaterhouseCoopers LLP, in Tulsa, Okla., in its report on the
Partnership's financial statements for the year ended December 31,
2009, expressed substantial doubt about its ability to continue as
a going concern. The independent auditors noted that the
Partnership has substantial long-term debt, a deficit in partners'
capital, and significant litigation uncertainties.
BRUNDAGE-BONE: Hearing on Consensual Plan on April 11
-----------------------------------------------------
The Denver Business Journal reports that Brundage-Bone Concrete
Pumping has reached an agreement with lenders and creditors that
the Company says will assure emergence from bankruptcy protection.
The Journal relates that Chief Executive Officer Bruce Young said
the new reorganization plan significantly cuts the Company's debt.
"The restructuring of the business positions us to continue to
provide superior service to our customers, growth opportunities
for our employees and positions us for future expansion."
The Journal relates lenders that financed equipment the Company
will keep operating have given tentative approval to the new plan
of reorganization.
According to the Denver Business Journal, a federal bankruptcy
judge has approved the disclosure statement explaining the plan.
Judge A. Bruce Campbell is scheduled to convene a hearing to
consider confirmation of the plan, as amended, on April 1, 2011.
About Brundage-Bone
Brundage-Bone Concrete Pumping Inc. and JLS Concrete Pumping Inc.,
claim to be the largest providers of concrete pumping services in
the U.S. JLS Concrete Pumping services California and Nevada from
its corporate headquarters in Ventura and from satellite yards in
Bakersfield, Fresno, Gardena, Lancaster, Las Vegas, Moorpark, Palm
Springs, Riverside, San Diego, San Luis Obispo, Santa Clarita,
Temecula, Thousand Oaks, and Ventura.
Brundage-Bone and JLS filed for Chapter 11 on Jan. 18, 2010
(Bankr. D. Col. Case No. 10-10758). Sender & Wasserman, P.C.,
assists the Debtors in their restructuring efforts. Brundage-Bone
disclosed $325,708,061 in assets and $230,277,103 in liabilities
as of the Petition Date.
BWP TRANSPORT: Court Directs Changes to Disclosure Statement
------------------------------------------------------------
BWP Transport, Inc., filed a Combined Plan of Reorganization and
Disclosure Statement on January 31, 2011. Bankruptcy Judge Thomas
J. Tucker said he cannot grant preliminary approval of the
disclosure statement due to various problems, which the Debtor
must correct. The Court directed the Debtor to file an amended
combined plan and disclosure statement no later than February 7,
2011. The Debtor also was required to provide to Judge's
chambers, no later than February 7, 2011, a redlined version of
the amended combined plan and disclosure statement, showing the
changes the Debtor has made.
A copy of Judge Tucker's February 1, 2011 Order is available at
http://is.gd/cZHxWCfrom Leagle.com.
Based in Saint Clair, Michigan BWP Transport, Inc., filed for
Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 10-67778) on
September 3, 2010. Geoffrey T. Pavlic, Esq., and Tracy M. Clark,
Esq., at STEINBERG, SHAPIRO & CLARK in Southfield, Michigan, serve
as the Debtor's counsel. In its petition, the Debtor estimated
$1 million to $10 million in both assets and debts.
CASCADE BANCORP: David Bolger Discloses 14.02% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission on February 1, 2011, David F. Bolger disclosed
that he beneficially owns 6,596,304 shares of common stock of
Cascade Bancorp representing 14.02% of the shares outstanding.
Each of Two-Forty Associates LLC and James T. Bolger beneficially
owns 19,232 shares or 0.04% equity stake.
As of November 1, 2010, there were 28,538,399 shares of no par
value common stock outstanding.
On November 16, 2010, the Company and Mr. Bolger entered into an
Amended and Restated Securities Purchase Agreement for the
purchase and sale of $25 million worth of shares of Common Stock
to Mr. Bolger. The transactions contemplated by the A&R Bolger
Agreement were consummated on January 28, 2011. The 6,250,000
shares of Common Stock purchased by Mr. Bolger were sold at a per
share purchase price equal to $4.00 per share taking into account
the reverse stock split consummated by the Company on November 22,
2010.
In addition, on November 16, 2010, the Company and an affiliate of
Lightyear Fund II, L.P., entered into an Amended and Restated
Securities Purchase Agreement, which amended and restated in its
entirety the Securities Purchase Agreement between the same
parties, dated as of October 29, 2009, for the purchase and sale
of $45,875,000 worth of shares of Common Stock to Lightyear. The
Company also entered into Securities Purchase Agreements with each
of affiliates of WL Ross & Co. L.L.C., Leonard Green & Partners,
L.P. and certain other investors. The sales of Common Stock to
Mr. Bolger and the Other Investors closed on January 28, 2011.
The shares of Common Stock in the Private Offerings to the Other
Investors were sold at a per share purchase price equal to $4.00
per share, taking into account the reverse stock split consummated
by the Company on November 22, 2010, for total gross proceeds to
the Company of $177 million.
Subject to certain conditions under the A&R Bolger Agreement, the
A&R Lightyear Agreement, the Securities Purchase Agreement with WL
Ross and the Securities Purchase Agreement with Leonard Green, the
Company granted each of Mr. Bolger, Lightyear, WL Ross and Leonard
Green preemptive rights on any subsequent offering of the
Company's securities at the same price with respect to such
issuance of securities. Each such party will have such rights
until such time as it, or its respective affiliates, cease to own
5% or more of all outstanding Common Stock.
Under the Lead Investor Agreements, so long as a Lead Investor
owns at least 5% of the outstanding Common Stock of the Company,
the Company has agreed not to enter into any poison pill
agreement, stockholders' rights plan or similar agreement, unless
such agreement contains an exemption for such Lead Investor and
its affiliates.
Pursuant to the terms and conditions of the A&R Bolger Agreement,
for so long as Mr. Bolger, together with his affiliates, owns at
least 5% or more of all of the outstanding shares of Common Stock,
Mr. Bolger will have the right to nominate one candidate for
election to each of the board of directors of the Company and the
board of directors of the Bank of the Cascades as candidates
recommended by the board of directors of the Company, unless Mr.
Bolger's nominee is still serving as a director on each board and
will continue to serve after the relevant election. Subject to
any applicable exchange listing standards and independence
requirements, Mr. Bolger will be entitled to elect that his
designee on the boards of directors serve on up to two committees
of each of the board of directors of the Company and the board of
directors of the Bank of the Cascades; this will not restrict the
designee from serving on any other committee to which he is
appointed by either board of directors. In addition, for so long
as Mr. Bolger, together with his affiliates, owns at least 5% or
more of all of the outstanding shares of Common Stock, Mr. Bolger
will have the right to designate a nonvoting board observer to
attend meetings of each of the board of directors of the Company
and the board of directors of the Bank of the Cascades.
Pursuant to the A&R Bolger Agreement, certain sections of the
Shareholders Agreement, dated as of December 27, 2005, by and
among the Company, Mr. Bolger, Two-Forty LLC and certain other
shareholders were terminated and are no longer in force, including
sections regarding restrictions on the transfer of shares, board
participation and voting rights, shelf and demand registrations
and mandated stock certificate legends.
About Cascade Bancorp
Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its
wholly-owned subsidiary, Bank of the Cascades, offers full-service
community banking through 32 branches in Central Oregon, Southern
Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho.
Cascade Bancorp has no significant assets or operations other than
the Bank.
The Company's balance sheet at Sept. 30, 2010, showed
$1.83 billion in total assets, $1.82 billion in total liabilities,
and stockholders' equity of $8.85 million.
Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank
of The Cascades. The rating company says that the institution
currently demonstrates what it considers to be significant
weaknesses and has also failed some of the basic tests it uses to
identify fiscal stability. "Even in a favorable economic
environment," Weiss says, "it is our opinion that depositors or
creditors could incur significant risks." As of March 31, 2010,
the institution's balance sheet showed $2,083,883,000 in assets.
CATHOLIC CHURCH: Del. Court Issues 17th Order on PIA Withdrawals
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Catholic Diocese of Wilmington, Inc., on a seventeenth interim
basis, to make certain withdrawals from the pooled investment
account for the benefit of the Diocese and certain pooled
investors.
Subject to the terms of the Custody Agreement, Judge Sontchi
authorized the Diocese to make withdrawals from the pooled
investment account and to process withdrawal requests of non-
debtor pooled investors without further Court order, up to these
applicable amounts:
Pooled Investor Aggregate Cap
--------------- -------------
Diocese $9,400,000
Foundation 1,450,656
Cemeteries 581,985
Charities 407,413
Children's Home 352,741
Siena Hall 330,211
Seton Villa 278,553
Corpus Christi 164,000
Holy Family 135,897
Holy Cross 50,000
Our Lady of Lourdes 40,000
Cathedral of St. Peter 25,000
Our Mother of Sorrows 23,620
St. Ann (Wilmington) 10,000
---------
Total $13,250,076
Notwithstanding any other provision of the Interim Order, the
Custodian will have no liability for, or otherwise be in violation
of the Interim Order, for acting in accordance with the Custody
Agreement or processing any withdrawal or investment requests made
by the Diocese.
Judge Sontchi also authorized the Diocese to continue to invest
and deposit funds into the pooled investment account in accordance
with its prepetition practices, without the need for a bond or
other collateral as required by Section 345(b) of the Bankruptcy
Code. The entities with which the Diocese's pooled investment
funds are deposited and invested will be excused from full
compliance with the requirements of Section 345(b) until 45 days
following the docketing of a final order directing compliance with
Section 345(b) as to specific accounts following the next hearing
on the requested relief.
Nothing contained in the Interim Order will prevent the Diocese
from establishing any additional sub-funds within the Pooled
Investment Account as it may deem necessary and appropriate, and
the Account's Custodian is authorized to process the Diocese's
request to account for transactions with respect to the sub-fund.
In the event Pooled Investment Funds or their proceeds transferred
by the Diocese to a non-debtor Pooled Investor pursuant to the
Interim Order are determined to have been property of the
bankruptcy estate at the time of transfer, the transfer will be
presumed to have been an unauthorized postpetition transfer within
the meaning of Section 549(a)(2)(B) of the Bankruptcy Code,
provided that the presumption may be rebutted by a showing that
the transfer was made in the ordinary course of business within
the meaning of Section 363(c)(1) of the Bankruptcy Code.
About the Diocese of Wilmington
The Diocese of Wilmington covers Delaware and the Eastern Shore of
Maryland and serves about 230,000 Catholics. The Delaware diocese
is the seventh Roman Catholic diocese to file for Chapter 11
protection to deal with lawsuits for sexual abuse. Previous
filings were by the dioceses in Spokane, Washington; Portland,
Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and
San Diego, California.
The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del.
Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor,
LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC,
is the financial advisor. The petition says assets range
$50,000,001 to $100,000,000 while debts are between $100,000,001
to $500,000,000.
The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin October 19, 2009.
There were 131 cases filed against the Diocese, with 30 scheduled
for trial, as of the bankruptcy filing.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CATHOLIC CHURCH: Milwaukee Has OK for Buelow as Special Counsel
---------------------------------------------------------------
The Archdiocese of Milwaukee sought and obtained permission from
the United States Bankruptcy Court for the Eastern District of
Wisconsin to employ Buelow Vetter Buikema Olson & Vliet, LLC, as
its special counsel.
John J. Marek, treasurer and chief financial officer of the
Archdiocese, says that the Archdiocese wants to employ Buelow as
special counsel under a general retainer in connection with
certain labor and employment matters, including the Labor
Agreement between the Archdiocese of Milwaukee Catholic
Cemeteries and the Cemetery Employees, Local 113, By the Laborers
International Union of America, AFL-CIO, which Buelow historically
handles for the Archdiocese.
Mr. Marek asserts that to the extent any matter will necessarily
involve both Buelow and proposed lead counsel, Whyte Hirschboeck
Dudek S.C., the services that Buelow will provide will be
complementary to, rather than duplicative of, the services to be
performed by Whyte Hirschboeck.
The Archdiocese will (i) pay Buelow based on the firm's customary
hourly rates, and (ii) reimburse Buelow for its necessary
expenses. The primary Buelow professionals, who will be handling
the case and their hourly rates, are:
Professional Rate
------------ ----
Robert H. Buikema $350
Matthew J. Flanary $310
Brian J. Waterman $220
Jeanne K. LaCourt $170
Shareholders $350
Associates $220
Paralegals $170
Buelow estimates that its fee for the services to be provided to
the Archdiocese will be $50,000, barring currently unforeseen
circumstances.
Robert H. Buikema, Esq., a shareholder at Buelow assures the Court
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
About the Archdiocese of Milwaukee
The Diocese of Milwaukee was established on November 28, 1843, and
was elevated to an Archdiocese on February 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No.
11-20059) on January 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Milwaukee Wins OK for L&M as Special Counsel
-------------------------------------------------------------
The Archdiocese of Milwaukee anticipates that there will be times
during the pendency of its bankruptcy case when it will be
appropriate to refer certain matters to a special counsel.
For this reason, the Archdiocese sought and obtained permission
from the United States Bankruptcy Court for the Eastern District
of Wisconsin to employ Leverson & Metz S.C. as its special
counsel.
John J. Marek, treasurer and chief financial officer of the
Archdiocese, asserts that the Archdiocese proposes to employ L&M
to handle matters that the Archdiocese may encounter that are not
appropriately handled by its proposed lead counsel, Whyte
Hirschboeck Dudek S.C., or other professionals because of
potential conflicts of interest. He points out that this will
avoid unnecessary litigation and reduce the overall expense of
administering the bankruptcy case.
Whyte Hirschboeck will determine when and under what circumstances
efficiency and expediency of case administration will be served by
referring discrete matters to special counsel, and pursuant to
that determination, Whyte Hirschboeck will assign matters to
special counsel in a manner that will avoid duplication of legal
services, Mr. Marek contends. He adds that to the extent any
matter will necessarily involve both L&M and Whyte Hirschboeck,
the services that L&M will provide will be complementary to rather
than duplicative of the services to be performed by Whyte
Hirschboeck.
The primary members of L&M, who will be handling the case and
their current standard hourly rates, are:
Billing Hourly
Name Category Rate
---- -------- ----
Mark L. Metz Shareholder $360
Leonard G. Leverson Shareholder $360
Olivier H. Reiher Associate $220
Donna B. Krueger Paralegal $100
The Archdiocese will also reimburse L&M for its expenses incurred
in connection with its employment. The Archdiocese also seeks the
Court's permission to fund a $25,000 advance on legal fees to be
held in trust pending authorization by the Court to apply the
funds to any outstanding fees and costs. Any unused portion of
the advance will be refunded to the Archdiocese, Mr. Marek
explains.
Mark L. Metz, Esq., a shareholder at L&M, assures the Court that
his firm and its employees qualify as "disinterested persons," as
that term is defined in Section 101(14) of the Bankruptcy Code.
About the Archdiocese of Milwaukee
The Diocese of Milwaukee was established on November 28, 1843, and
was elevated to an Archdiocese on February 12, 1875, by Pope Pius
IX. The region served by the Archdiocese consists of 4,758 square
miles in southeast Wisconsin which includes counties Dodge, Fond
du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth,
Washington and Waukesha. There are 657,519 registered Catholics
in the Region.
The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for
Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No.
11-20059) on January 4, 2011, to address claims over sexual abuse
by priests on minors.
The Archdiocese became at least the eighth Roman Catholic diocese
in the U.S. to file for bankruptcy to settle claims from current
and former parishioners who say they were sexually molested by
priests.
Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in
Milwaukee, Wisconsin, serves as the Archdiocese's counsel.
The Archdiocese estimated assets and debts of $10 million to
$50 million in its Chapter 11 petition.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: Shelton Wants Claim vs. Wilm. Deemed Timely
------------------------------------------------------------
Thomas P. Shelton asks the U.S. Bankruptcy Court for the District
of Delaware to enlarge the bar date with respect to the tort proof
of claim that he filed against the Catholic Diocese of Wilmington,
Inc., on January 28, 2011, and to deem the Claim as timely filed.
Robert Jacobs, Esq., at Jacobs & Crumplar, P.A., in Wilmington,
Delaware -- Bob@JCDELaw.com -- tells the Court that Mr. Shelton,
who has a learning disability, was just released from prison after
serving a two-year sentence. Mr. Shelton has consulted with an
attorney for the first time on January 25, 2011, with respect to
abuse he suffered as a child by Father Gardiner and Father Sarro
at St. Elizabeth Ann Seton Parish in Bear, Delaware, a parish of
the Diocese of Wilmington.
Mr. Shelton was arrested on September 18, 2008, and imprisoned at
Gander Hill. Prior to his arrest, he had blocked out the abuse by
Fathers Gardiner and Sarro, and it was only after his arrest and
imprisonment that he became aware of the Child Victim's Act, Mr.
Jacobs tells Judge Sontchi.
Mr. Jacobs asserts that Mr. Shelton was not aware that he could
file a proof of claim based on the abuse until January 2011 --
when he first met with an attorney at the suggestion of his
probation officer, Greg Morehead. Mr. Shelton subsequently sent
his proof of claim to the Diocese's Bankruptcy Administration and
filed it with the Clerk of the Court.
The Claim was filed after the Tort Claim Bar Date of April 15,
2010, as set by the Court on February 1, 2010, Mr. Jacobs says.
"Clearly, [Mr.] Shelton had a reasonable excuse for his delay and
he acted in good faith," Mr. Jacobs argues. Thus, he points out,
the factors and equity weigh in favor of a determination that Mr.
Shelton's failure to file his proof of claim by the Bar Date was
the result of excusable neglect and, with respect to Mr. Shelton's
proof of claim, the Bar Date should be enlarged and his claim
deemed timely filed.
About the Diocese of Wilmington
The Diocese of Wilmington covers Delaware and the Eastern Shore of
Maryland and serves about 230,000 Catholics. The Delaware diocese
is the seventh Roman Catholic diocese to file for Chapter 11
protection to deal with lawsuits for sexual abuse. Previous
filings were by the dioceses in Spokane, Washington; Portland,
Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and
San Diego, California.
The Diocese filed for Chapter 11 on Oct. 18, 2009 (Bankr. D. Del.
Case No. 09-13560). Attorneys at Young Conaway Stargatt & Taylor,
LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC,
is the financial advisor. The petition says assets range
$50,000,001 to $100,000,000 while debts are between $100,000,001
to $500,000,000.
The bankruptcy filing automatically stayed eight consecutive abuse
trials scheduled in Delaware scheduled to begin October 19, 2009.
There were 131 cases filed against the Diocese, with 30 scheduled
for trial, as of the bankruptcy filing.
(Catholic Church Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CB HOLDING: Landry's Signs to Buy Bugaboo Creek for $3 Million
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the owner of Charlie Brown's Steakhouse lined up
Landry's Restaurants Inc. to buy the 12 Bugaboo Creek stores for
$3 million, plus upward adjustments for cash and inventory in the
stores at closing.
According to the report, there will be a Feb. 23 hearing to
approve procedures for an auction to learn if there is a better
offer. If the bankruptcy judge approves, other bids would be due
initially on March 4, followed by an auction on March 7 and a
hearing March 10 for approval of the sale.
At a March 9 hearing, Charlie Brown's will ask the court for
permission to sell the liquor license for a shuttered store in
Hackettstown, New Jersey, for $151,000, without an auction. The
sale to Houston-based Landry's has approval from the lenders and
the official creditors' committee.
Mr. Rochelle notes that Landry's is familiar with bankruptcy
sales. Last year, it paid $76.6 million for Claim Jumper
Restaurants LLC, a chain of 45 western-themed restaurants. It
also bought the Oceanaire Inc. restaurant chain.
Landry's was acquired in October in a $177.6 million transaction
by a management group that included Tilman J. Fertitta.
About CB Holding
New York-based CB Holding Corp. had 20 Charlie Brown's Steakhouse,
12 Bugaboo Creek Steak House, and seven The Office Beer Bar and
Grill restaurants when it filed for bankruptcy protection. The
Company closed 47 locations before filing for Chapter 11.
Following a bankruptcy auction, it sold its The Office restaurant
chain to winning bidder Villa Enterprises Ltd. for $4.68 million.
CB Holding and its affiliates filed for Chapter 11 bankruptcy
protection on November 17, 2010 (Bankr. D. Del. Case No.
10-13683). Christopher M. Samis, Esq., and Mark D. Collins, Esq.,
at Richards, Layton & Finger, P.A., assist the Debtors in their
restructuring effort. The Garden City Group, Inc., is the
Debtors' notice, claims and solicitation agent. Jeffrey N.
Pomerantz, Esq., Jason S. Pomerantz, Esq., and Bradford J.
Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the
Official Committee of Unsecured Creditors. CB Holding estimated
its assets at $100 million to $500 million and debts at
$50 million to $100 million.
CENTRALIA OUTLET: Mall Projects $2 Million Operating Income
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the owner of the Centralia Factory Outlets mall in
Centralia, Washington, has an agreement with lender Sterling
Savings Bank to use cash through May 15. The budget agreed upon
with the lender projects $3.07 million in total revenue during
calendar 2011 and $2.01 million in net operating income. Capital
improvements this year are on the budget for $452,000.
About Centralia Outlets
Centralia Outlets LLC is the owner of the Centralia Factory
Outlets mall in Centralia, Washington. The mall, located on
Interstate 5 in Centralia, is 80% occupied, and generates net
income, after debt service, of $80,000 to $100,000 a month.
Centralia filed for Chapter 11 after receiving an order sending
the mall to receivership. Sterling Bank prevailed on a state
court to order the appointment of a receiver based on alleged non-
financial defaults in the mortgage. The mall owner said that
principal and interest payments were current on the $24.3 million
owing to Sterling as of the petition date.
Centralia filed for Chapter 11 protection on Dec. 3, 2010 (Bankr.
W.D. Wash. Case No. 10-24529), after receiving an order sending
the mall to receivership. James L. Day, Esq., at Bush Strout &
Kornfeld, in Seattle, Washington, represents the Debtor. The
Debtor estimated assets and debts of $10 million to $50 million.
CHAPARRAL ENERGY: Moody's Assigns 'Caa1' Rating to $350 Mil. Notes
------------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Chaparral
Energy, Inc.'s proposed offering of $350 million senior unsecured
notes due 2021. The Caa1 rating reflects the senior unsecured
status of the notes, its position in the capital structure, and is
consistent with the ratings on Chaparral's other existing senior
unsecured debt. Chaparral's B3 Corporate Family Rating and its
SGL-3 Speculative Grade Liquidity Rating remain unchanged. The
rating outlook is stable.
"The debt offering continues the company's refinancing plan by
extending debt maturities, which further improves liquidity and
financial flexibility," commented Francis J. Messina, Moody's Vice
President. "Nevertheless, high finding and development costs
combined with high financial leverage and a high operating cost
structure continue as a concern."
Ratings Rationale
Chaparral's B3 CFR rating reflects its scale, high financial
leverage and a high cost structure. Chaparral continues to carry
one of the highest leverage and operating cost structures among
the Moody's rated E&P universe. Specifically, Moody's estimate
Chaparral's three year average all sources finding and development
costs above $50/boe (although trending down), its total full cycle
costs estimated above $80/boe, and its Debt/PD boe reserves above
$10/boe. Also, Chaparral's debt plus future reserve development
capex on total proven reserves is estimated to exceed $734.6
million. Leverage on production is approximately $44,000/day and
Chaparral will continue to need significant resources to develop
its current PUD reserves bookings estimated at 34% of total proved
reserves.
Chaparral forecasts breakeven to slightly negative free cash flow
for 2011. The company has substantial hedging in place to reduce
its exposure to commodity prices and has some flexibility in its
capital spending. The outlook is stable based on the company
achieving its production growth forecasts and delivering
sufficient reserve additions to begin deleveraging on proved
developed reserves and production volumes. If Chaparral's capital
productivity does not improve or if the company makes significant
acquisitions without meaningful equity funding the outlook could
be changed to negative or the ratings downgraded.
The SGL-3 rating is based on Moody's expectation that Chaparral
will have adequate liquidity over the next twelve months to fund
growth capex and costs. The company has approximately $50 million
of cash and full availability of its $375 million borrowing base
credit facility that matures in April 2014. The senior unsecured
notes offering refinances and extends its maturity profile.
The Caa1 senior unsecured notes rating reflect both its position
in the capital structure and the overall probability of default of
Chaparral, to which Moody's assigns a PDR of B3, and a loss given
default of LGD 4, 64% (changed from 65%).
An upgrade would be considered if Chaparral reduces its leverage
on PD reserves to less than $8.00/boe on a sustainable basis and
debt / average daily production declines to less than $22,000/boe,
while maintaining positive production trends and good margins.
Conversely, the ratings could be pressured if leverage on PD and
average daily production continues to increase.
The last rating action on Chaparral was September 8, 2010, at
which time Moody's assigned a Caa1 to a new unsecured debt issue.
Chaparral Energy, Inc., is privately held independent oil and
natural gas production company. Ownership totals are: CCMP
Capital at 35.98%, Fischer Investments at 25.54%, Chesapeake
Energy at 19.98%, Altoma Energy at 14.98%, and Employees at 3.52%.
CHAPARRAL ENERGY: S&P Downgrades Ratings on Senior Debt to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue ratings on
Chaparral Energy Inc.'s senior unsecured debt to 'B-' from 'B' and
revised the recovery ratings on this debt to '5', indicating its
expectation for modest recovery (10% to 30%) in the event of a
payment default, from '4'.
At the same time, S&P assigned a 'B-' issue rating to Chaparral's
proposed $350 million senior unsecured notes due 2021. The
recovery rating is '5', indicating its expectation for modest
recovery (10% to 30%) in the event of a payment default. Proceeds
from the notes will be used to tender for Chaparral's existing
8.5% senior notes due 2015.
The rating actions reflect a decrease in recovery expectations on
the company's senior unsecured debt based on S&P's stressed
valuation of recently announced year-end 2010 proved reserves.
Under Standard & Poor's stressed price assumptions of $45.00 per
barrel crude oil and $4.00 per MMbtu natural gas. The estimated
value of Chaparral's Dec. 31, 2010, reserves decreased by more
than 20% from the mid-year 2010 estimate, largely as a result of
rapidly rising oilfield services costs during 2010, combined with
limited reserve growth of about 5% during the year.
The ratings on Chaparral Energy Inc. reflect its still high debt
levels, elevated cost structure, and limited scale of operations.
Standard & Poor's ratings also incorporate Chaparral's mix of
crude oil and natural gas reserves, solid reserve life, improving
financial performance, and extensive hedging program.
The stable outlook on Chaparral reflects expectations that
Chaparral will maintain adequate liquidity while keeping debt
leverage below 4x. If debt leverage were to exceed 4x or
liquidity fall below $100 million, S&P could lower ratings. S&P
could raise ratings if Chaparral can maintain debt leverage below
3x while expanding its crude oil production and reserves.
Ratings List
Chaparral Energy Inc.
Corporate Credit Rating B/Stable/--
New Rating
$350 mil sr unscd nts due 2021 B-
Recovery Rating 5
Ratings Lowered
To From
-- ----
Senior Unsecured Debt B- B
Recovery Rating 5 4
CHESAPEAKE ENERGY: S&P Puts 'BB' Rating on CreditWatch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its ratings on
Oklahoma City-based Chesapeake Energy Corp., including its 'BB'
corporate credit rating, on CreditWatch with positive implications
"S&P placed the ratings on Watch positive because Chesapeake
announced its plan to sell all of its Fayetteville Shale assets,
as well as its equity investments in Frac Tech Holdings LLC and
Chaparral Energy Inc. and that it plans to reduce its long-term
debt through 2012," said Standard & Poor's credit analyst Scott
Sprinzen. (The company has a 25.8% ownership stake in Frac Tech
Holdings LLC and 20.0% ownership stake in Chaparral.) Management
has stated that, if these sales are completed, the company
anticipates that the combined pretax proceeds could exceed
$5.0 billion. In addition, Chesapeake announced on Jan. 30,
2011, the execution of an agreement whereby it will sell a 33.3%
interest in its leasehold acres in the Denver-Julesburg and Powder
River Basins for consideration including $570 million in cash.
Earlier this year, Chesapeake announced a plan to reduce its long-
term debt by 25% in 2011-2012, and the company has stated that
proceeds of these transactions -- all of which are expected to
close during the first half of 2011 -- will be used to retire
approximately $2.0 billion-$3.0 billion of its shorter dated
senior notes and to also reduce borrowings under its revolving
bank credit facility. The company has also said that the amount
of senior notes retired will depend in part on Chesapeake's
ability to acquire its senior notes in the market or through
tender offers.
As part of its CreditWatch, S&P will monitor developments relating
to Chesapeake's planned asset sales and debt reduction. S&P will
also meet with management, in part to facilitate its reassessment
of management's longer range financial policies. S&P's view that
Chesapeake's financial policies were aggressive has until now been
a significant impediment to the company's achieving a higher
rating, notwithstanding its strong competitive position in oil and
gas exploration and production.
CHRYSLER LLC: CEO Issues Apology Over Derogatory Word on Loans
--------------------------------------------------------------
As widely reported, Chrysler Group LLC's chief executive Sergio
Marchionne in a statement on Saturday apologized for calling the
high-interest bailout loans extended by the U.S. and Canadian
governments in 2009 as "shyster loans."
"[I]in responding to a question about Chrysler's government loans,
I used a term in reference to the interest rate being charged on
our government loans that has raised concern. I regret the remark
which I consider inappropriate," Mr. Marchionne said.
According to The Detroit News, Mr. Marchionne, noting that
Chrysler had no choice in 2009 but to pay the high interest rates
the government set as part of its $15 billion Chrysler bailout,
said, "I am paying shyster rates." He added, "We had no choice
. . . I am going to pay the shyster loans."
Reuters' Deepa Seetharaman notes that Shyster is a derogatory term
used to describe an unprincipled lawyer or politician. According
to Reuters, Mr. Marchionne used the term at least three times in
his remarks during an industry conference on Friday.
Michael J. de la Merced, writing for The New York Times' DealBook,
relates that as a matter of etymology, "shyster" refers to an
unethical or unscrupulous person. For some people, it also
carries anti-Semitic overtones.
According to Mr. de la Merced, Chrysler spokesman Gualberto
Ranieri told DealBook in a telephone interview on Friday that Mr.
Marchionne harbored no ill intent in using that word.
In 2010, Chrysler paid $1.23 billion, or about $3.4 million a day,
in interest payments on its debt. It is seeking to refinance
those loans before a planned initial public offering in the second
half of 2011.
According to Mr. de la Merced, Mr. Marchionne also said Saturday,
"As the only parties willing to underwrite the risk associated
with Chrysler's recovery plan, the two governments levied interest
rates that, although appropriate at the time, are above current
market conditions. This was done with the full support and
understanding of the members of Chrysler Group LLC."
About Chrysler
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). Chrysler hired Jones Day, as lead counsel;
Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory
Group LLC, and Greenhill & Co. LLC, for financial advisory
services; and Epiq Bankruptcy Solutions LLC, as its claims agent.
Chrysler has changed its corporate name to Old CarCo following its
sale to a Fiat-owned company. As of December 31, 2008, Chrysler
had $39,336,000,000 in assets and $55,233,000,000 in debts.
Chrysler had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC.
Fiat has a 20% equity interest in Chrysler Group.
The U.S. and Canadian governments provided Chrysler with
$4.5 billion to finance its bankruptcy case. Those loans are to
be repaid with the proceeds of the bankruptcy estate's
liquidation.
CHRYSLER LLC: 6th Cir. Affirms Lower Court Ruling on ADA Suit
-------------------------------------------------------------
African-American Loretta Frazier Steward appeals the district
court's grant of summary judgment with respect to various state-
law claims and a federal Americans with Disabilities Act claim
arising out of her employment at the corporate predecessors of New
Chrysler. Ms. Steward also appeals the district court's refusal
to allow her to dismiss her ADA claim voluntarily prior to the
district court's determination of Chrysler's summary-judgment
motion. The United States Court of Appeals for the Sixth Circuit
affirmed in toto.
On March 16, 2005, Ms. Steward filed a charge of disability
discrimination with the Equal Employment Opportunity Commission.
After the EEOC issued her a right-to-sue letter, Ms. Steward filed
a complaint against Chrysler in Michigan state court, alleging (1)
race discrimination in violation of Michigan's Elliott-Larsen
Civil Rights Act; (2) disability discrimination in violation of
Michigan's Persons With Disabilities Civil Rights Act; (3)
retaliation; and (4) intentional infliction of emotional distress.
Ms. Steward later amended her complaint to assert a claim under
the ADA, at which point Chrysler removed the action to federal
court. Thereafter, Chrysler moved for summary judgment as to all
of Ms. Steward's claims. She opposed Chrysler's motion for
summary judgment, and also filed a motion seeking dismissal
without prejudice of her ADA claim under Federal Rule of Civil
Procedure 41(a)(2) and remand of her other claims to state court.
The district court granted summary judgment to Chrysler with
respect to all of Ms. Steward's claims and dismissed her Rule
41(a)(2) motion as moot.
Ms. Steward commenced her employment at Chrysler in 1997. In
April 2009, Chrysler LLC filed for Chapter 11 reorganization and
transferred substantially all of its assets and certain
liabilities -- including this lawsuit -- to the newly formed
entity Chrysler Group LLC, also known as New Chrysler. The
parties stipulated to New Chrysler's substitution for its
predecessor entity in the lawsuit.
The case is Loretta Frazier Steward, v. New Chrysler, No. 08-1282
(6th Cir.) The Sixth Circuit panel consists of Circuit Judges
Danny Julian Boggs, Karen Nelson Moore, and Jeffrey S. Sutton.
Judge Boggs wrote the Opinion.
Judge Moore concurred in part and dissented in part, saying Ms.
Steward has established a prima facie case of both race and
disability discrimination.
A copy of the Sixth Circuit's February 4, 2011 ruling is available
at http://is.gd/VNGhvCfrom Leagle.com.
About Chrysler
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). Chrysler hired Jones Day, as lead counsel;
Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory
Group LLC, and Greenhill & Co. LLC, for financial advisory
services; and Epiq Bankruptcy Solutions LLC, as its claims agent.
Chrysler has changed its corporate name to Old CarCo following its
sale to a Fiat-owned company. As of December 31, 2008, Chrysler
had $39,336,000,000 in assets and $55,233,000,000 in debts.
Chrysler had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. Under the
terms approved by the Bankruptcy Court, the company formerly known
as Chrysler LLC on June 10, 2009, formally sold substantially all
of its assets, without certain debts and liabilities, to a new
company that will operate as Chrysler Group LLC.
Fiat has a 20% equity interest in Chrysler Group.
The U.S. and Canadian governments provided Chrysler with
$4.5 billion to finance its bankruptcy case. Those loans are to
be repaid with the proceeds of the bankruptcy estate's
liquidation.
CINCINNATI BELL: Amends Employment Agreement With CFO
-----------------------------------------------------
On January 27, 2011, Cincinnati Bell Inc. entered into an
amendment to the Amended and Restated Employment Agreement between
the Company and Gary J. Wojtaszek, the Company's Chief Financial
Officer. The Compensation Committee of the Company's Board of
Directors approved the amendment to reflect Mr. Wojtaszek's
assumption of additional operational responsibilities in
connection with the Company's data center strategy, in addition to
his retaining his current role as Chief Financial Officer.
The amendment increases Mr. Wojtaszek's base salary and his annual
bonus target from $350,000 per year to not less than $550,000 per
year, effective immediately. In accordance with the Compensation
Committee's previously adopted policy eliminating excise tax
gross-up provisions in new or materially amended employment
agreements with named executive officers, the amendment eliminated
the provision in Mr. Wojtaszek's employment agreement providing
for an excise tax gross-up for payments contingent upon a change
in control.
A full-text copy of the Amended and Restated Employment Agreement
is available for free at http://ResearchArchives.com/t/s?72ea
About Cincinnati Bell
Cincinnati Bell Inc., with headquarters in Cincinnati, Ohio,
provides telecommunications products and services to residential
and business customers in Ohio, Kentucky and Indiana.
Cincinnati Bell's balance sheet at Sept. 30, 2010, showed
$2.59 billion in total assets, $3.20 billion in total liabilities,
and a stockholders' deficit of $611.4 million.
* * *
The Company carries a 'B+' corporate credit rating from Standard &
Poor's. S&P said in November 2010 that the rating reflects the
Company's highly leveraged financial risk profile, with
expectations for limited discretionary cash flow after capital
spending, which is currently elevated to expand its data center
business.
The Company has a 'B' Issuer Default Rating, and Stable outlook,
from Fitch. Fitch said in November 2010 that 'B' IDR for reflects
expectations for relatively high, albeit stable leverage and its
diversified revenue profile. In addition, its wireline and
wireless businesses generate strong free cash flows.
In November 2010, Moody's Investors Service affirmed the Company's
B1 Corporate Family Rating and Probability of Default Rating. The
stable outlook is based on Moody's expectations that CBB will be
able to maintain stable EBITDA levels by offsetting access line
losses through increased efficiencies in its incumbent wireline
operations and by growing data and broadband revenues in its
wireless segment.
COMMUNITY CENTRAL: Falls Under Critically Undercapitalized Tier
---------------------------------------------------------------
Community Central Bank Corporation is the parent company of
Community Central Bank. The Bank's Report of Condition and Income
for the quarter ended December 31, 2010 filed with the FDIC
reported that its tier 1 leverage ratio as of the end of the
period was 1.66%, placing the Bank in the critically
undercapitalized category.
Under the Prompt Corrective Action framework established under
FDICIA, the failure to meet minimum capital requirements can
initiate both mandatory and additional discretionary actions by
regulators that are likely to have a material adverse effect on
the Bank and the Company. In the case of critically
undercapitalized banks, the appointment of a conservator or
receiver generally is required if the institution is unable to
raise sufficient capital within 90 days of the date on which it
was determined that the institution was critically
undercapitalized.
About Community Central
Community Central Bank Corporation is the holding company for
Community Central Bank in Mount Clemens, Michigan. The Bank
opened for business in October 1996 and serves businesses and
consumers across Macomb, Oakland, St. Clair and Wayne counties
with a full range of lending, deposit, trust, wealth management
and Internet banking services. The Bank operates four full
service facilities in Mount Clemens, Rochester Hills, Grosse
Pointe Farms and Grosse Pointe Woods, Michigan. Community Central
Mortgage Company, LLC, a subsidiary of the Bank, operates
locations servicing the Detroit metropolitan area and central and
northwest Indiana. River Place Trust and Community Central Wealth
Management are divisions of Community Central Bank. Community
Central Insurance Agency, LLC, is a wholly owned subsidiary of
Community Central Bank. The Corporation's common shares currently
trade on The NASDAQ Capital Market under the symbol "CCBD".
The Company's balance sheet at September 30, 2010, showed
$513.7 million in total assets, $501.6 million in total
liabilities, and stockholders' equity of $12.1 million.
"As of September 30, 2010, due to the Corporation's significant
net loss from operations in the three and nine months ended
September 30, 2010, deterioration in the credit quality of the
loan portfolio, and the decline in the level of its regulatory
capital to support operations, there is substantial doubt about
the Corporation's ability to continue as a going concern," the
Corporation said in its Form 10-Q for the quarter ended Sept. 30,
2010.
The Bank is currently subject to a "consent order" with the
Federal Deposit Insurance Corporation and the Michigan Office of
Financial and Insurance Regulation and is "significantly
undercapitalized" under the FDIC's prompt corrective action (PCA)
rules and accordingly is operating under significant operating
restrictions. The Consent Order requires Community Central Bank
to take corrective measures in a number of areas to strengthen and
improve the Bank's financial condition and operations. The
Consent Order is effective as of November 1, 2010. By entering
into the Consent Order, the Bank is directed and has agreed to
increase board oversight and conduct an independent study of
management, improve regulatory capital ratios, charge-off certain
classified assets, reduce its level of loan delinquencies and
problem assets, limit lending to certain borrowers, revise lending
and collection policies, adopt and implement new profit, strategic
and liquidity plans, and correct loan underwriting and credit
administration deficiencies. The Consent Order also requires the
Bank to obtain prior regulatory approval before the payment of
cash dividends or the appointment of any senior executive officers
or directors. The Bank also is not allowed to accept brokered
deposits without a waiver from the FDIC and must comply with
certain deposit rate restrictions.
CONTESSA PREMIUM: Wins Nod of Wells Fargo DIP Financing
-------------------------------------------------------
Natalia Real at Fish Information & Services' FIS.com reports that
Contessa Premium Foods received U.S. Bankruptcy Court approval of
its agreement with Wells Fargo Bank NA where the bank continue to
provide funding for the Company's operations through the
restructuring process. Chief Bankruptcy Judge Peter Carroll also
approved the Company's other "first day motions" at the hearing.
"The agreement with Wells Fargo provides adequate liquidity for
normal operations to continue without any disruptions to our
customers, vendors and employees," the report quotes John Z.
Blazevich, Contessa's CEO, as stating.
Major creditors, the FIS report relates, have expressed support
toward the Company's reorganization and are collaborating closely
with the Company to maximise value for all stakeholders.
About Contessa Premium Foods
San Pedro, California-based Contessa Premium Foods, Inc., fka ZB
Industries, Inc., and Contessa Food Products, Inc., provides farm
raised shrimp, convenience meals, stir-fry vegetables, and other
frozen food products that are marketed and sold primarily in the
United States and to a lesser extent in Canada, Europe, Asia, and
Mexico. It divides its business into two internal groups:
Contessa Seafood, which includes its seafood items, and Contessa
"Green Cuisine," which includes all other fruit, vegetable and
complete meal blends.
Contessa Premium filed for Chapter 11 bankruptcy protection on
January 26, 2011 (Bankr. C.D. Calif. Case No. 11-13454). Craig A.
Wolfe, Esq., at Kelley Drye & Warren LLP, and Jeffrey W. Dulberg,
Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl &
Jones LLP, serve as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $50 million to $100 million.
COSINE COMMUNICATIONS: Terminates Common Stock Registration
-----------------------------------------------------------
On February 1, 2011, CoSine Communications, Inc. filed with the
U.S. Securities and Exchange Commission Amendment no. 5 to the
Rule 13e-3 Transaction Statement on Schedule 13E-3 initially filed
on Sept. 3, 2010 and amended by Amendment No. 1 filed on Oct. 12,
2010, Amendment No, 2 filed on Oct. 27, 2010, Amendment No. 3
filed on Nov. 9, 2010 and Amendment No. 4 filed on Nov. 29, 2010,
in connection with a proposed transaction to deregister its shares
of common stock, $0.0001 par value per share, under the federal
securities laws. The Amendment No. 5 is being filed pursuant to
Rule 13e-3(d)(3) as a final amendment to the Schedule 13E-3 solely
to report the results of the Rule 13e-3 transaction.
Amendments to the Company's certificate of incorporation providing
for a 1-for-500 reverse split of Common Stock, followed
immediately by 500-for-1 forward split of the Common Stock were
filed with the Secretary of State of the State of Delaware on Jan.
20, 2011. The Amendments were approved by the Company's Board of
Directors on Aug. 27, 2010 and by stockholders holding the
requisite number of shares of the Company's capital stock on
January 10, 2011. Upon effectiveness of the Reverse Split on
January 21, 2011, stockholders of record holding fewer than 500
shares of Common Stock immediately prior to the Reverse Split
became entitled to a cash payment equal to $2.24 per share of
Common Stock held by them, on a pre-split basis, without interest.
Stockholders of record holding 500 or more shares of Common Stock
immediately prior to the Reverse Split and by beneficial owners
holding in "street name" through a nominee in an account with Cede
& Co., regardless of the number of shares so held, participated in
the Forward Split and therefore continued to hold the same number
of shares immediately after the Forward Split as they did
immediately before the Reverse Split.
Based on the information available to the Company as of Jan. 31,
2011, the Transaction reduced the number of record holders of the
Common Stock to 133. The Company will file a Form 15 with the
Securities and Exchange Commission to terminate registration of
the Common Stock under Section 12(g) of the Securities Exchange
Act of 1934, as amended and to suspend its reporting obligations
under the Exchange Act. Upon the filing of the Form 15, the
Company's obligation to file periodic reports with the SEC,
including annual reports on Form 10-K and quarterly reports on
Form 10-Q, will be suspended.
About Cosine Communications
Los Gatos, California-based CoSine Communications, Inc. (Pink
Sheets:COSN.pk) was founded in 1998 as a global telecommunications
equipment supplier. As of December 31, 2006, CoSine had ceased
all its product and customer service related operations. CoSine's
strategic plan is to redeploy its existing resources to identify
and acquire, or invest in, one or more operating businesses with
the potential for generating taxable income or capital gains.
The Company's balance sheet at Sept. 30, 2010, showed
$21.84 million in total assets, $189,000 in liabilities,
all current, and stockholders' equity of $21.65 million.
Burr Pilger Mayer Inc. of San Jose, California, which audited the
Company's annual report for 2009, said that that the CoSine
Communications' actions in September 2004 in connection with its
ongoing evaluation of strategic alternatives to terminate most
of its employees and discontinue production activities in an
effort to conserve cash, raise substantial doubt about its ability
to continue as a going concern.
CPG INTERNATIONAL: S&P Retains 'B' Rating on $285 Mil. Loan
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
U.S. building products manufacturer CPG International Inc.'s
proposed $285 million first-lien term loan due 2017 to '4' from
'3', indicating its expectation for average (30% to 50%) recovery
in the event of default. The issue-level rating on the proposed
first-lien term loan remains 'B'.
The revised recovery rating reflects CPG's announcement that it
intends to offer a $285 million first-lien term loan and drop its
plan for a $50 million second-lien term loan. Proceeds from the
proposed transaction will be used to refinance the company's
current debt. In addition, the company intends to enter into a
new five-year $65 million asset-based revolving credit facility,
which will not be rated.
All other ratings, including the 'B' corporate credit rating,
remain unchanged. The ratings reflect S&P's view that CPG should
maintain credit measures over the next several quarters that are
in line with an aggressive financial risk profile, along with
adequate liquidity following its proposed refinancing transaction.
Specifically, S&P expects adjusted total debt to EBITDA could be
maintained below 5x during this period, which S&P considers to be
in line with the current rating given the company's weak business
risk profile. In addition, the proposed transaction addresses the
significant portion of the company's capital structure that
matures in 2012. The positive rating outlook reflects S&P's view
that adjusted leverage could improve to 4x or lower, a level S&P
believes would be consistent with a 'B+' rating. S&P's ratings
also incorporate its view of CPG's weak business risk profile
reflected in its significant exposure to challenging residential
and nonresidential construction markets and volatile resin costs.
Ratings List
CPG International Inc.
Corporate credit rating B/Positive/--
Revised Recovery Rating; Issue Rating Remain Unchanged
To From
-- ----
Prop $285 mil 1st-lien term loan due 2017 B
Recovery Rating 4 3
CUMULUS MEDIA: Signs Deal to Buy Remaining Interests in CMP
-----------------------------------------------------------
Cumulus Media Inc. announced that it has signed a definitive
agreement to acquire the remaining equity interests of Cumulus
Media Partners, LLC that it does not currently own. CMP owns 32
radio stations in nine markets, including San Francisco, Dallas,
Houston, Atlanta, Cincinnati, Indianapolis and Kansas City. CMI
has operated CMP's business pursuant to a management agreement
since CMP was formed in 2006.
In connection with the acquisition, Cumulus will issue 9,945,714
shares of its common stock to affiliates of the three private
equity firms that collectively own 75% of CMP - Bain Capital
Partners, LLC, The Blackstone Group L.P. and Thomas H. Lee
Partners. Blackstone will receive shares of Cumulus' Class A
common stock and, in accordance with Federal Communications
Commission broadcast ownership rules, Bain and THL will receive
shares of a new class of Cumulus non-voting common stock. Cumulus
currently owns the remaining 25% of CMP's equity interests. In
connection with the acquisition, Cumulus also intends to acquire
all of the outstanding warrants to purchase common stock of a
subsidiary of CMP, in exchange for an additional 8,267,968 shares
of Cumulus common stock.
Based on the closing price of Cumulus' common stock on January 28,
2011, the implied enterprise value of CMP is approximately $740
million, which includes an estimated $660 million of CMP net debt
and preferred stock as of December 31, 2010. This represents a
valuation of approximately 7.8 times CMP's estimated 2011 station
operating income. This transaction will not trigger any change of
control provisions in the Cumulus or CMP credit agreements or bond
indentures. As a result, both companies can maintain their
attractive debt capitalization structures.
Cumulus' Chairman and CEO, Lew Dickey, commented: "We are pleased
to announce the combination of Cumulus and CMP after having run
these two radio groups as essentially one company for the last
five years. CMP has long been one of the most coveted sets of
assets in the radio industry and we expect it will immediately
become an important driver of growth and profitability for the
Company."
"In particular," Lew Dickey continued, "we believe that
consolidating Cumulus and CMP benefits our stockholders by
providing the opportunity to:
* Improve our revenue growth;
* Immediately increase our station operating margins;
* Increase our free cash flow yield;
* Provide a more diversified and strategic national media
platform;
* Maintain the attractive debt capital structures of Cumulus
and CMP;
* Increase the equity market capitalization and liquidity of
Cumulus' common stock; and
* Strengthen our capital base to position the Company for
strategic acquisitions."
The transaction is expected to be completed in the second quarter
of 2011, and is subject to shareholder and regulatory approvals
and other customary conditions. The holders of shares of Cumulus
representing approximately 54% of the voting power of the company
have agreed to vote to approve the share issuances and an
amendment to Cumulus' certificate of incorporation, which are
required to complete the transaction.
Cumulus also announced that David M. Tolley, a Senior Managing
Director of Blackstone, has joined the Board of Directors of
Cumulus, effective immediately. Citadel Securities LLC served as
financial advisor, and Simpson Thacher & Bartlett LLP is acting as
legal counsel, to CMP for the transaction. UBS Investment Bank
served as financial advisor to Cumulus and Moelis & Company issued
a fairness opinion to the Board of Directors of Cumulus. Jones
Day is acting as legal counsel to Cumulus in the transaction.
About Cumulus Media
Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) --
http://www.cumulus.com/-- is the second largest radio broadcaster
in the United States based on station count, controlling 350 radio
stations in 68 U.S. media markets. In combination with its
affiliate, Cumulus Media Partners, LLC, the Company believes it is
the fourth largest radio broadcast company in the United States
when based on net revenues.
The Company's balance sheet at Sept. 30, 2010, showed
$324.06 million in total assets, $673.31 million in total
liabilities, and a stockholders' deficit of $349.25 million.
* * *
Cumulus Media carries a 'Caa1' corporate family rating, and 'Caa2'
probability-of-default rating from Moody's Investors Service.
Moody's said early this month that it won't change ratings upon
the purchase of Cumulus Media of Comulus Media Partners, owner of
32 radio stations in nine markets, including San Francisco,
Dallas, Houston, Atlanta, Cincinnati, Indianapolis and Kansas
City. According to Moody's, there is no operational nor immediate
credit impact upon closing of the acquisition. Cumulus has
operated CMP's radio stations since it was formed in 2006 so there
are no meaningful changes to operations, Moody's related.
Standard & Poor's Ratings Services revised its rating outlook on
Cumulus Media Inc. to positive from stable. All ratings on the
company, including the 'B-' corporate credit rating, were
affirmed.
"The positive outlook revision reflects the asset and cash flow
diversification benefits that Cumulus will gain in acquiring
Cumulus Media Partners LLC," said Standard & Poor's credit analyst
Andy Liu.
CUMULUS MEDIA: Travis Hain Holds 18.2% Equity Stake
---------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission on February 2, 2011, Travis J. Hain disclosed
that he beneficially owns 7,527,457 shares of Class A common stock
of Cumulus Media, Inc., representing 18.2% of the shares
outstanding.
As of October 26, 2010, the Company had 42,030,355 outstanding
shares of common stock consisting of (i) 35,576,293 shares of
Class A Common Stock; (ii) 5,809,191 shares of Class B Common
Stock; and (iii) 644,871 shares of Class C Common Stock.
Other affiliates of Mr. Hain also disclosed beneficial ownership
of shares of common stock of the Company:
Shares Equity
Beneficially Owned Stake
------------------ ------
BA Capital Company, L.P. 1,745,973 4.8%
RE SBIC Management, LLC 1,745,973 4.8%
RE Equity Management, L.P. 1,745,973 4.8%
RE Equity Management GP, LLC 1,745,973 4.8%
Banc of America Capital Investors SBIC, 5,781,484 14.3%
Ridgemont Capital Management SBIC, LLC 5,781,484 14.3%
Ridgemont Capital Management, L.P. 5,781,484 14.3%
REP I GP, LLC 5,781,484 14.3%
On January 31, 2011, the Company entered into an Exchange
Agreement pursuant to which the Company will acquire the remaining
equity interests of its private affiliate Cumulus Media Partners,
LLC that the Company currently does not own. Pursuant to the
Exchange Agreement, the Company will issue 9,945,714 shares of its
common stock to affiliates of the three private equity firms that
collectively own 75% of the equity interests in CMP -- Bain
Capital Partners LLC, The Blackstone Group L.P. and Thomas H. Lee
Partners -- in exchange for their equity interests in CMP. As a
result, CMP will become a wholly owned subsidiary of the Company.
In connection with the Exchange, the Company will ask its
stockholders to approve an amendment to its certificate of
incorporation to create a new class of common stock, Class D
Common Stock. The Class D Common Stock will be non-voting,
convertible on a one-for-one basis into shares of Class A Common
Stock at the option of the holder, and otherwise be treated
equally with the Company's Class A Common Stock. In addition, the
amendment will eliminate the requirement that holders of the
Company's Class B Common Stock must consent to (i) any proposed
merger, consolidation or other business combination involving the
Company, or sale, transfer or other disposition of all or
substantially all of the assets of the Company, (ii) any proposed
transaction that would result in a change of control of the
Company or (iii) any transaction in which the Company proposes to
acquire or sell, transfer or otherwise dispose of assets having a
fair market value in excess of 10% of the Company's stockholders'
equity.
Consummation of the Exchange is subject to various customary
conditions, including approval by the Company's stockholders of
the share issuances and the above-described amendment to the
Company's certificate of incorporation and approval of the Federal
Communications Commission.
In connection with the transactions contemplated by, and as a
condition to the willingness of the Sellers to enter into, the
Exchange Agreement, BA Capital and BACI each entered into a Voting
Agreement with Blackstone, as sellers' representative, dated
January 28, 2011 with respect to all shares of Class A Common
Stock and Class B Common Stock beneficially owned by them. In the
Voting Agreement, BA Capital and BACI each agreed to vote all of
its respective shares (i) in favor of the charter amendments and
the approval required by Nasdaq Listing Rule 5635 for issuance of
the shares of the Company's common stock to be issued pursuant to
the Exchange, and (ii) against any action, proposal, transaction
or agreement that would reasonably be prevent, impede, frustrate,
interfere with, delay, postpone or adversely affect the Exchange
or the other transactions contemplated by the Exchange Agreement.
The Voting Agreement terminates on the first to occur of (i) the
closing of the Exchange, (ii) the termination of the Exchange
Agreement in accordance with its terms, (iii) 11:59 p.m. New York,
New York time on December 31, 2011, and (iv) the written agreement
of the Sellers, BACI and BA Capital to terminate the Voting
Agreement. Until such termination, each of BA Capital and BACI
has agreed not to sell, transfer, pledge, encumber or otherwise
dispose of any of its shares, or otherwise create any new
restriction on its ability freely to exercise all voting rights
with respect to such shares. The Voting Agreement was entered
into by each of BA Capital and BACI solely in its capacity as
stockholder and nothing in any such Voting Agreement will in any
way restrict or limit any director or officer of the Company from
taking any action in his capacity as a director or officer of the
Company that would be necessary for him to comply with his
fiduciary duties as a director or officer of the Company.
In addition, pursuant to the Voting Agreement, each of BA Capital
and BACI, in their capacity as holders of all of the outstanding
shares of the Company's Class B Common Stock, which generally have
no voting power except in certain circumstances specified in the
Company's Certificate of Incorporation, granted their express
written consent to the transactions contemplated by the Exchange
Agreement for all purposes under the Company's Certificate of
Incorporation.
About Cumulus Media
Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) --
http://www.cumulus.com/-- is the second largest radio broadcaster
in the United States based on station count, controlling 350 radio
stations in 68 U.S. media markets. In combination with its
affiliate, Cumulus Media Partners, LLC, the Company believes it is
the fourth largest radio broadcast company in the United States
when based on net revenues.
The Company's balance sheet at Sept. 30, 2010, showed
$324.06 million in total assets, $673.31 million in total
liabilities, and a stockholders' deficit of $349.25 million.
* * *
Cumulus Media carries a 'Caa1' corporate family rating, and 'Caa2'
probability-of-default rating from Moody's Investors Service.
Moody's said early this month that it won't change ratings upon
the purchase of Cumulus Media of CMP. According to Moody's, there
is no operational nor immediate credit impact upon closing of the
acquisition. Cumulus has operated CMP's radio stations since it
was formed in 2006 so there are no meaningful changes to
operations, Moody's related.
Standard & Poor's Ratings Services revised its rating outlook on
Cumulus Media Inc. to positive from stable. All ratings on the
company, including the 'B-' corporate credit rating, were
affirmed.
"The positive outlook revision reflects the asset and cash flow
diversification benefits that Cumulus will gain in acquiring
Cumulus Media Partners LLC," said Standard & Poor's credit analyst
Andy Liu.
DBSD N.A.: Gift to Shareholders Violates Absolute Priority Rule
---------------------------------------------------------------
Sprint Nextel Corporation and DISH Network Corporation took
separate appeals before the U.S. Court of Appeals for the Second
Circuit from the bankruptcy court order confirming the plan of
reorganization of DBSD North America, Incorporated and its various
subsidiaries, over Sprint's and DISH Network's objections.
Sprint argues that the plan improperly gave shares and warrants to
DBSD's owner -- whose interest lies below Sprint's in priority --
in violation of the absolute priority rule of 11 U.S.C. Sec.
1129(b)(2)(B). DISH argues that the bankruptcy court erred when
it found DISH did not vote "in good faith" under 11 U.S.C. Sec.
1126(e) and when, because of the Sec. 1126(e) ruling, it
disregarded DISH's class for the purposes of counting votes under
11 U.S.C. Sec. 1129(a)(8). DISH also argues that the bankruptcy
court should not have confirmed the plan because the plan was not
feasible.
On Sprint's appeal, the Second Circuit concluded (1) that Sprint
has standing to appeal and (2) that the plan violated the absolute
priority rule. On DISH's appeal, the Second Circuit found no
error, and concluded (1) that the bankruptcy court did not err in
designating DISH's vote, (2) that, after designating DISH's vote,
the bankruptcy court properly disregarded DISH's class for voting
purposes, and (3) that the bankruptcy court did not err in finding
the reorganization feasible.
The Second Circuit remanded the case for further proceedings.
ICO Global Communications founded DBSD in 2004 to develop a mobile
communications network that would use both satellites and land-
based transmission towers. In its first five years, DBSD made
progress toward this goal, successfully launching a satellite and
obtaining certain spectrum licenses from the FCC, but it also
accumulated a large amount of debt. Because its network remained
in the developmental stage and had not become operational, DBSD
had little if any revenue to offset its mounting obligations.
On May 15, 2009, DBSD (but not its parent ICO Global), filed a
voluntary petition in the United States Bankruptcy Court for the
Southern District of New York, listing liabilities of $813 million
against assets with a book value of $627 million. Of the various
claims against DBSD, three have particular relevance on the
appeals:
1. The First Lien Debt: a $40 million revolving credit
facility that DBSD obtained in early 2008 to support
its operations, with a first-priority security
interest in substantially all of DBSD's assets. It
bore an initial interest rate of 12.5%.
2. The Second Lien Debt: $650 million in 7.5% convertible
senior secured notes that DISH issued in August 2005,
due August 2009. These notes hold a second-priority
security interest in substantially all of DBSD's
assets. At the time of filing, the Second Lien Debt
had grown to approximately $740 million. It
constitutes the bulk of DBSD's indebtedness.
3. Sprint's Claim: an unliquidated, unsecured claim based
on a lawsuit against a DBSD subsidiary. Sprint had
sued seeking reimbursement for DBSD's share of certain
spectrum relocation expenses under an FCC order. At
the time of DBSD's filing, that litigation was pending
in the United States District Court for the Eastern
District of Virginia and before the FCC. In the
bankruptcy case, Sprint filed a claim against each of
the DBSD entities jointly and severally, seeking
$211 million. The bankruptcy court temporarily allowed
Sprint's claim in the amount of $2 million for voting
purposes.
After negotiations with various parties, DBSD proposed a plan of
reorganization which provided for "substantial de-leveraging," a
renewed focus on "core operations," and a "continued path as a
development-stage enterprise." The plan provided that the holders
of the First Lien Debt would receive new obligations with a four-
year maturity date and the same 12.5% interest rate, but with
interest to be paid in kind, meaning that for the first four years
the owners of the new obligations would receive as interest more
debt from DBSD rather than cash.
The holders of the Second Lien Debt would receive the bulk of the
shares of the reorganized entity, which the bankruptcy court
estimated would be worth between 51% and 73% of their original
claims.
The holders of unsecured claims, such as Sprint, would receive
shares estimated as worth between 4% and 46% of their original
claims.
Finally, the existing shareholder (effectively just ICO Global,
which owned 99.8% of DBSD) would receive shares and warrants in
the reorganized entity.
Sprint objected to the plan, arguing among other things that the
plan violates the absolute priority rule of 11 U.S.C. Sec.
1129(b)(2)(B). That rule requires that, if a class of senior
claim-holders will not receive the full value of their claims
under the plan and the class does not accept the plan, no junior
claim- or interest-holder may receive "any property" "under the
plan on account of such junior claim or interest."
Sprint noted that the plan provided for the existing shareholder,
whose interest is junior to Sprint's class of general unsecured
claims, to receive substantial quantities of shares and warrants
under the plan -- in fact, much more than all the unsecured
creditors received together.
The bankruptcy court disagreed. It characterized the existing
shareholder's receipt of shares and warrants as a "gift" from the
holders of the Second Lien Debt, who are senior to Sprint in
priority yet who were themselves not receiving the full value of
their claims, and who may therefore "voluntarily offer a portion
of their recovered property to junior stakeholders" without
violating the absolute priority rule.
Meanwhile, DISH, although not a creditor of DBSD before its
filing, had purchased the claims of various creditors with an eye
toward DBSD's spectrum rights. As a provider of satellite
television, DISH has launched a number of its own satellites, and
it also has a significant investment in TerreStar Corporation, a
direct competitor of DSDB's in the developing field of hybrid
satellite/terrestrial mobile communications. DISH desired to
"reach some sort of transaction with [DBSD] in the future if
[DBSD's] spectrum could be useful in our business."
Shortly after DBSD filed its plan disclosure, DISH purchased all
of the First Lien Debt at its full face value of $40 million, with
an agreement that the sellers would make objections to the plan
that DISH could adopt after the sale. As DISH admitted, it bought
the First Lien Debt not just to acquire a "market piece of paper"
but also to "be in a position to take advantage of [its claim] if
things didn't go well in a restructuring." Internal DISH
communications also promoted an "opportunity to obtain a blocking
position in the [Second Lien Debt] and control the bankruptcy
process for this potentially strategic asset." In the end, DISH
(through a subsidiary) purchased only $111 million of the Second
Lien Debt -- not nearly enough to control that class -- with the
small size of its stake due in part to DISH's unwillingness to buy
any claims whose prior owners had already entered into an
agreement to support the plan.
In addition to voting its claims against confirmation, DISH
reasserted the objections that the sellers of those claims had
made pursuant to the transfer agreement, arguing, among other
things, that the plan was not feasible under 11 U.S.C. Sec.
1129(a)(11) and that the plan did not give DISH the "indubitable
equivalent" of its First Lien Debt as required to cram down a
dissenting class of secured creditors under 11 U.S.C. Sec.
1129(b)(2)(A). Separately, DISH proposed to enter into a
strategic transaction with DBSD, and requested permission to
propose its own competing plan (a request it later withdrew).
DBSD responded by moving for the court to designate that DISH's
"rejection of [the] plan was not in good faith." The bankruptcy
court agreed, finding that DISH, a competitor to DBSD, was voting
against the plan "not as a traditional creditor seeking to
maximize its return on the debt it holds, but . . .`to establish
control over this strategic asset.'" The bankruptcy court
designated DISH's vote and disregarded DISH's wholly-owned class
of First Lien Debt for the purposes of determining plan acceptance
under 11 U.S.C. Sec. 1129(a)(8). The bankruptcy court also
rejected DISH's objections to the plan, finding that the plan was
feasible and that, even assuming that DISH's vote counted, the
plan gave DISH the "indubitable equivalent" of its First Lien Debt
claim and could thus be crammed down over DISH's dissent. After
designating DISH's vote and rejecting all objections, the
bankruptcy court confirmed the plan.
The district court affirmed.
DBSD has received approval from the FCC to transfer its spectrum
rights to the reorganized entity -- the last hurdle before
consummation of the reorganization. The Second Circuit stayed
consummation of the plan and then, on December 6, 2010, issued an
order disposing of the case and vacating the Second Circuit's stay
so that the proceedings could continue without further delay,
indicating that an opinion would follow.
A copy of the Second Circuit's Opinion dated February 7, 2011, is
available at http://is.gd/ud0EjSfrom Leagle.com. The Second
Circuit panel consists of Circuit Judges Rosemary S. Pooler, Reena
Raggi, and Gerard E. Lynch. Judge Lynch wrote the Opinion.
About DBSD North America
Headquartered in Reston, Virginia, DBSD North America Inc., aka
ICO Member Services Inc., offers satellite communications
services. It has launched a satellite, but is in the
developmental stages of creating a satellite system with
components in space and on earth. It presently has no revenues.
The Company and nine of its affiliates filed for Chapter 11
protection on May 15, 2009 (Bankr. S.D.N.Y. Lead Case No.
09-13061). James H.M. Sprayregen, Esq., and Christopher J.
Marcus, Esq., at Kirkland & Ellis LLP, in New York; and Marc J.
Carmel, Esq., and Sienna R. Singer, Esq., at Kirkland & Ellis LLP,
in Chicago, serve as the Debtors' counsel. Jefferies & Company is
the financial advisors to the Debtors. The Garden City Group Inc.
is the claims agent for the Debtors. DBSD estimated assets and
debts of $500 million to $1 billion in its Chapter 11 petition.
DELTA PETROLEUM: Stock Transferred to The NASDAQ Capital Market
---------------------------------------------------------------
Delta Petroleum Corporation announced that NASDAQ has approved its
request to transfer to The NASDAQ Capital Market from The NASDAQ
Global Market. The transfer took effect at the opening of
business on February 1, 2011.
The Company said transfer of Delta's common stock to the NASDAQ
Capital Market from The NASDAQ Global Market should not have any
effect on a shareholder's ability to buy or sell its shares of
Delta.
In transferring to the Capital Market, it is expected that Delta
will have an additional 180 days to regain compliance with
NASDAQ's requirement that its minimum bid price be at least $1.00.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ Global Market: DPTR)
-- http://www.deltapetro.com/-- is an oil and gas exploration and
development company based in Denver, Colorado. The Company's core
areas of operations are the Rocky Mountain and Gulf Coast Regions,
which comprise the majority of its proved reserves, production and
long-term growth prospects.
The Company's balance sheet at Sept. 30, 2010, showed
$1.14 billion in total assets, $242.79 million in total current
liabilities, $358.34 million in total long-term liabilities, and
stockholders' equity of $545.21 million.
* * *
As reported in the Troubled Company Reporter on March 15, 2010,
KPMG LLP, in Denver, expressed substantial doubt about the
Company's ability to continue as a going concern after auditing
the Company's financial statements for the year ended December 31,
2009. The independent auditors noted of the Company's ongoing
losses and working capital deficiency, and that in addition,
outstanding borrowings under the Company's credit facility are due
January 15, 2011.
In January 2011, Standard & Poor's Ratings Services assigned its
'CCC' corporate credit and unsecured debt ratings to Delta
Petroleum Corp. S&P also assigned its '4' recovery rating to the
company's $150 million unsecured notes due 2015 and $115 million
senior convertible notes. The outlook is negative.
"S&P's ratings on Delta reflect the company's uneconomic cost
structure, a small reserve base that is almost entirely natural
gas, very aggressive leverage, and weak liquidity," said Standard
& Poor's credit analyst Marc D. Bromberg. Although it recently
closed a $100 million credit facility maturing Jan. 31, 2012 (with
a $50 million initial commitment), which allowed Delta to satisfy
its previous $35 million revolver that was due this month, S&P
think it is unlikely that the company will be able to meet its
operating obligations throughout 2011. S&P characterize Delta's
business profile as vulnerable and its financial risk profile as
highly leveraged.
DENNY'S CORPORATION: CEO Miller Does Not Own Any Securities
-----------------------------------------------------------
In a Form 3 filing with the U.S. Securities and Exchange
Commission on February 1, 2011, John C. Miller, director, CEO and
president at Dennys Corp., disclosed that he does not own any
securities of the Company.
About Denny's Corporation
Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ:
DENN) -- http://www.dennys.com/-- Denny's is one of America's
largest full-service family restaurant chains, consisting of 1,348
franchised and licensed units and 232 company-owned units, with
operations in the United States, Canada, Costa Rica, Guam, Mexico,
New Zealand and Puerto Rico.
The Company's balance sheet at Sept. 29, 2010, showed
$312.67 million in total assets, $415.10 million in total
liabilities, and a stockholders' deficit of $102.42 million.
Denny's carries 'B2' corporate family and probability of default
ratings from Moody's Investors Service and a 'B+' corporate credit
rating from Standard & Poor's.
DUKE & KING: To Sell 87 Restaraunts to Pay $21.18 Million Debt
--------------------------------------------------------------
Jim Hammerand, staff writer at Minneapolis/St. Paul Business
Journal, reports that the U.S. Bankruptcy Judge Gregory Kishel has
authorized the April sell-off of the 87 open restaurants owned by
Duke & King Acquisition Corp. The 87 Midwestern Burger King
restaurants -- about half of them in Minnesota -- are headed to
auction to satisfy debts of $21.18 million owed to the Burnsville-
based franchisee's creditors.
About Duke and King
Burnsville, Minnesota-based Duke and King Acquisition Corp., dba
Burger King, operates 92 Burger King franchises in Minnesota,
Missouri, Illinois, Wisconsin, Iowa and Kansas. The Company was
formed in November 2006 to acquire 88 Burger King franchise
restaurants from The Nath Companies.
The Company and four affiliates filed for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Case No. 10-38652) on December 4,
2010. Clinton E. Cutler, Esq., and Douglas W. Kassebaum, Esq., at
Fredrikson & Byron, P.A., serve as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million.
Affiliates Duke and King Missouri Holdings, Inc. (Bankr. D. Minn.
Case No. 10-38654), Duke and King Missouri, LLC (Bankr. D. Minn.
Case No. 10-38653), Duke and King Real Estate, LLC (Bankr. D.
Minn. Case No. 10-38655), and DK Florida Holdings, Inc. (Bankr. D.
Minn. Case No. 10-3856), filed separate Chapter 11 petitions on
December 4, 2010.
The cases are jointly administered under the Duke and King
Acquisition Corp. case.
According to NetDockets, the companies' primary secured financing
is provided by Bank of America and the outstanding obligations
were approximately $11 million as of December 1, 2010.
DUCK HOUSE: Asks for Court's Permission to Use Cash Collateral
--------------------------------------------------------------
Duck House, Inc., and Trade Union International, Inc., seek
authority from the U.S. Bankruptcy Court for the Central District
of California to use cash collateral until February 25, 2011.
Cathay Bank and China Trust Bank have secured loan balance in the
amount of approximately $13 million and asserts a security
interest over all the assets of the Debtors. The Debtors' assets
are encumbered by liens in favor of a bank group. In addition to
the liens against the Debtors' assets, the Bank Group was provided
with these additional collateral: (i) a second priority deed of
trust against the real property at #1 Topline Plaza, 4651 State
Street, in Montclair, California; and (ii) a second priority deed
of trust against owners Wen Pin Chang and Mei Lien Chang's
personal residence at 2819 Crystal Ridge Road, Diamond Bar,
California. To preserve its collateral, the Bank Group maintained
a lockbox account into which all of the Debtors' receivables were
placed.
James C. Bastian, Jr., Shulman Hodges & Bastian LLP, explains that
the Debtors need the money to fund their Chapter 11 case, pay
suppliers and other parties. The Debtors will use the collateral
pursuant to a budget, a copy of which is available for free at:
http://bankrupt.com/misc/DUCK_HOUSE_budget.pdf
Debtors have proposed adequate protection to the Bank Group in the
form of monthly adequate protection payments. In order to
stabilize cash flow, direct that the Debtors' customers issue
payment directly to the Debtors instead of any lockbox so that
such funds may be deposited into the Debtor in Possession Accounts
established by the Debtors in compliance with the requirements of
the Office of the U.S. Trustee and only used in accordance with
the proposed budget.
The Bank Group is further protected in that during the period
covered by the budget, and as reflected in the budget, the Debtors
will be collecting accounts receivable and selling inventory in
the ordinary course of business (as opposed to a forced
liquidation sale) which will actually increase the Bank Group's
collateral position by over $600,000.
About Duck House
Monclair, California-based Duck House, Inc., a California
Corporation, supplies sports licensing products. It filed for
Chapter 11 bankruptcy protection on January 31, 2011 (Bankr. C.D.
Calif. Case No. 11-13072). James C. Bastian, Jr., Esq., at
Shulman Hodges & Bastian LLP, serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million.
Affiliate Trade Union International Inc., a California
corporation, filed a separate Chapter 11 petition on January 31,
2011 (Bankr. C.D. Calif. Case No. 11-13071).
DUCK HOUSE: Section 341(a) Meeting Scheduled for March 4
--------------------------------------------------------
The U.S. Trustee for Region 16 will convene a meeting of Duck
House, Inc.'s creditors on March 4, 2011, at 2:30 p.m. The
meeting will be held at Room 200C, 3685 Main Street, 2nd Floor,
Riverside. CA 92501.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Monclair, California-based Duck House, Inc., a California
Corporation, supplies sports licensing products. It filed for
Chapter 11 bankruptcy protection on January 31, 2011 (Bankr. C.D.
Calif. Case No. 11-13072). James C. Bastian, Jr., Esq., at
Shulman Hodges & Bastian LLP, serves as the Debtor's bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million.
Affiliate Trade Union International Inc., a California
corporation, filed a separate Chapter 11 petition on January 31,
2011 (Bankr. C.D. Calif. Case No. 11-13071).
E*TRADE FINANCIAL: DBRS Puts B (High) Issuer & Senior Debt Rating
-----------------------------------------------------------------
DBRS Inc. (DBRS) has commented that its ratings of E*TRADE
Financial Corporation (E*TRADE or the Company) remain unchanged
after the Company's 4Q10 earnings announcement. DBRS rates
E*TRADE's Issuer & Senior Debt at B (high) and E*TRADE Bank's
Deposits & Senior Debt (the Bank) at BB. All ratings, except the
Short-Term Instruments rating of the Bank, have a Negative trend.
Despite improving underlying earnings, the Company reported a
marginal net loss of $24 million, following two consecutive
quarters of positive earnings, as an addition to qualitative
reserves elevated provisioning. A year earlier, E*TRADE had
reported a quarterly net loss of $67 million. Over the past year,
the Company has continued to make progress in strengthening its
franchise, reducing non-core asset exposures and bolstering its
capitalization. DBRS views the Company as taking the appropriate
steps to restore its profitability, but the challenging macro
environment still weighs on its overall results with the slow
recovery constraining the improvement in credit quality and
limiting investor activity. For the year, the Company was close
to breaking even with only a marginal net loss of $28 million in
2010, a significant reversal from large losses in prior years.
Combined with improving credit trends, DBRS views E*TRADE's upward
earnings trajectory positively from a ratings perspective.
Driven by various positive trends, net revenues improved to $518
million in 4Q10 from $489 million in the prior quarter. Net
interest income was up 2% QoQ, boosted by in increase in average
interest earning assets QoQ, which more than offset a 7 basis
point decline in net interest margin. Major revenue drivers
showed improvement, including increased daily average revenue
trades (DARTS), which were up 19% QoQ, and increased higher-
yielding margin receivables, which were up to $5.1 billion at year
end, an increase of 11% QoQ and 38% YoY. Additionally, E*TRADE
grew retail deposits, despite a marginal reduction in the overall
rate paid.
Continued franchise strength was evident in strong customer
metrics. There were $2.4 billion of net new brokerage assets
added in the quarter. Customer assets in brokerage accounts and
stock plans reached $151.1 billion, up 21% YoY. Brokerage
accounts rose to a record 2.68 million at the end of the year (up
1% from end of Q3). The success of the core brokerage franchise
is evident in the results for the Trading and Investment segment,
which generated net income of $175 million in the quarter. While
an improvement over net income of $158 million in 3Q10, this was
down from $191 million in 4Q09, as investor activity generally
lagged throughout 2010.
Pursuing its focused strategy, E*TRADE is finding ways to reduce
expenses and reinvest its cost savings in its core business, as
indicated by the increase in the Company's advertising and market
development expense. DBRS views positively the Company's
sustained investment in its business, particularly though
marketing and improvements in technology.
Reducing its still elevated credit costs remains E*TRADE's
critical challenge, but sustaining the positive momentum in its
underlying earnings is also crucial. E*TRADE generated operating
income before provisions and taxes (IBPT) of $213 million,
sufficient to absorb provisions of $194 million, resulting in an
IBPT cushion of $19 million. With approximately $40 million of
corporate interest expense, however, the Company did not generate
enough IBPT to achieve a positive bottom line. Despite improving
asset quality trends, provisions increased in the quarter due to a
one-time addition of $60 million to the qualitative component of
its loan loss reserve for its restructured loan portfolio. While
performance is tracking to its models, the Company added to the
reserve given the growing size of its loan modification program
and the lack of historical performance data to estimate
performance over the cycle. Excluding this, provisions would have
continued to trend downward from their peak in 4Q08.
DBRS looks to improvement in loan performance trends as a leading
indicator for E*TRADE's future profitability. Positively, the
Company's at-risk and special mention delinquencies remained on a
downward trend and charge-offs declined for the sixth consecutive
quarter. Proactively, E*TRADE is working with third parties to
combat delinquencies and restructure loans in its loan portfolios.
Reflecting these efforts, the Company's loan modification program
continues to grow, with $1.0 billion of gross loans receivable on
balance sheet at year end, or 6% of total gross loans receivable,
having been modified. With improving credit performance trends
supporting the improving trend in provisioning, DBRS anticipates
that E*TRADE could return to positive quarterly results in the
upcoming quarters.
DBRS views E*TRADE as having built up a more comfortable cushion
over the regulatory minimums to be well-capitalized. The Bank
increased its Tier 1 capital to risk-weighted assets ratio to
13.71% at 4Q10, up from 12.79% a year ago. Positively, the Bank
generated risk-based capital for the fourth consecutive quarter.
Given that the Bank has substantial excess risk-based capital of
$1.1 billion, the Company could upstream this capital from the
Bank to the parent to pay down some of the parent's debt, subject
to regulatory approvals, which DBRS would view favorably from a
ratings perspective, provided that capitalization at the Bank
remains appropriately strong.
E*TRADE's ratings are underpinned by the Company's franchise
strength, including its continued success in online brokerage,
solid operating performance and improving credit metrics, combined
with E*TRADE's strengthened financial condition. In the current
uncertain environment, the Negative trend on the rating reflects
the continued pressure on earnings from still elevated credit
costs generated by the Company's large mortgage and home equity
portfolios.
ELLIPSO INC: Court Rejects CEO's Claim for Unpaid Salary, Bonuses
-----------------------------------------------------------------
Bankruptcy Judge S. Martin Teel, Jr., sustained the objections by
creditors John H. Page, Mann Technologies, LLC, John Mann, and
Robert Patterson to David Castiel's proof of claim to the extent
Mr. Castiel claims unpaid salary and unpaid bonuses from Ellipso
Inc. and overruled to the extent Mr. Castiel claims unreimbursed
expenses from the Debtor.
Mr. Castiel, the Debtor's president and CEO, filed an initial
proof of claim seeking $3,227,000.84 in deferred compensation,
bonuses, and unreimbursed expenses on July 13, 2009. Following
the creditors' objections, Mr. Castiel subsequently amended his
proof of claim and the Court held hearings on the objections for
several days in March and April 2010. During the course of the
hearings, Mr. Castiel filed a third amended proof of claim seeking
$3,238,654.54.
A copy of the Court's February 7, 2011 Memorandum Decision is
available at http://is.gd/rGjgAyfrom Leagle.com.
Ellipso, Inc., filed for Chapter 11 bankruptcy (Bankr. D. D.C.
Case No. 09-00148) on February 25, 2009. Kermit A. Rosenberg,
Esq. -- krosenberg@tighepatton.com -- at Tighe Patton Armstrong
Teasdale, PLLC, in Washington, DC, serves as the Debtor's counsel.
In its petition, the Debtor listed under $50,000 in assets and
$1 million to $10 million in debts.
ELLIPSO INC: Court Rejects Registry Solutions et al. Claims
-----------------------------------------------------------
Bankruptcy Judge S. Martin Teel, Jr., ruled that Ellipso, Inc.'s
objection to claims number 6, 7, 10, and 11 filed by Robert B.
Patterson, John B. Mann, Mann Technologies, LLC, and The Registry
Solutions Company is sustained and the claims are disallowed in
their entirety. The creditors have filed proofs of claim, seeking
$30,000,000 in compensatory damages and $10,000,000 in punitive
damages. The claims allege that the Debtor committed multiple
torts against the claimants, including, among others, Federal RICO
violations.
A copy of the Court's February 7, 2011 Memorandum Decision is
available at http://is.gd/W86p27from Leagle.com.
S. MARTIN TEEL, Jr., Bankruptcy Judge.
On January 29, Judge Teel denied Mr. Patterson's request to
amend his proof of claim to recover costs and expenses he incurred
in Ellipso, Inc. v. John B. Mann, et al., Case No. 05-cv-11186
(D. D.C.). The Debtor objected to the Motion to Amend, saying Mr.
Patterson's claims are time-barred. A copy of the January 29 Order
is available at http://is.gd/XBA8BAfrom Leagle.com.
Ellipso, Inc., filed for Chapter 11 bankruptcy (Bankr. D. D.C.
Case No. 09-00148) on February 25, 2009. Kermit A. Rosenberg,
Esq. -- krosenberg@tighepatton.com -- at Tighe Patton Armstrong
Teasdale, PLLC, in Washington, DC, serves as the Debtor's counsel.
In its petition, the Debtor listed under $50,000 in assets and
$1 million to $10 million in debts.
ENCORIUM GROUP: Ilari Koskelo Holds 35.46% Equity Stake
-------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission on February 1, 2011, Ilari Koskelo disclosed that he
beneficially owns 1,884,656 shares of common stock of Encorium
Inc. representing 35.46% of the shares outstanding. As of August
16, 2010, there were 3,408,247 shares of Encorium Group, Inc.
common stock outstanding, par value $.001 per share, which
excludes 38,765 shares in treasury
About Encorium Group
Wayne, Pa.-based Encorium Group, Inc. (Nasdaq: ENCO) is a clinical
research organization (CRO) that engages in the design and
management of complex clinical trials for the pharmaceutical,
biotechnology and medical device industries. The Company was
initially incorporated in August 1998 in Nevada. In June 2002,
the Company changed its state of incorporation to Delaware. In
November 2006, the Company expanded its international operations
with the acquisition of its wholly-owned subsidiary, Encorium Oy,
a CRO founded in 1996 in Finland, which offers clinical trial
services to the pharmaceutical and medical device industries.
Since 2006 the Company has conducted substantially all of its
European operations through Encorium Oy and its wholly-owned
subsidiaries located in Denmark, Estonia, Sweden, Lithuania,
Romania, Germany and Poland.
On July 16, 2009, the Company sold substantially all of the assets
relating to the Company's U.S. line of business to Pierrel
Research USA, Inc., the result of which the Company no longer has
any employees or significant operations in the United States.
The Company's balance sheet as of June 30, 2010, showed
US$10.0 million in total assets, US$10.6 million in total
liabilities, and a stockholders' deficit of US$620,000.
As reported in the Troubled Company Reporter on April 23, 2010,
Deloitte and Touche, LLP, in Philadelphia, Pa., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted of the Company's recurring losses from operations,
current available cash, and anticipated level of capital
requirements.
ENNIS HOMES: Fails to Consummate Plan; Wants Case Dismissed
-----------------------------------------------------------
The Hon. Whitney Rimel of the U.S. Bankruptcy Court for the
Eastern District of California will convene a hearing on
February 16, 2011, at 1:30 p.m., to consider Ennis Homes, Inc.,
and Ennis Land Development, Inc.'s request to dismiss their
Chapter 11 cases. Objections, if any, are due 14 days prior to
the hearing date.
The Debtors said they have not successfully consummated their Plan
of Reorganization dated as of February 12, 2010. They do not
believe that they can substantially consummate the Plan.
The Plan provided that the Debtors would borrow money from Bank of
America to finance the ongoing operations of the Debtors' business
and that the Debtors would repay its creditors with income
generated through the operation of its business. However, BofA
determined that its would not loan the Debtors money for operation
of its business in late October 2010 based upon the failure of
various conditions precedent to the loans.
The Debtors considered other means of performing under the Plan or
achieving substantial consummation. However, the Debtors had not
been able to make arrangements that will allow the Debtors to
perform under the Plan or any reasonable modification thereof.
About Ennis Homes Inc.
Ennis Homes Inc., is a homebuilder in California. Ennis Homes was
founded in 1979 by Ben Ennis and has become one of the largest
family owned homebuilders in the Central Valley,. Son Brian Ennis
serves as President and daughter Pam Ennis acts as Vice President-
Marketing of the Company.
Ennis Homes Inc. filed for Chapter 11 on Feb. 3, 2009 (Bankr. E.D.
Calif. Case No. 09-10848). Hagop T. Bedoyan, Esq., and Jacob L.
Eaton, Esq., represent the Debtor as counsel. Ennis Homes
estimated assets and debts at $100 million and $500 million.
ENSCO INTERNATIONAL: Moody's Reviews 'Ba1' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service affirmed the Baa1 senior unsecured
rating of ENSCO International, Inc., is conjunction with its
announcement that its parent Ensco plc has agreed to acquire Pride
International. The outlook for ENSCO is stable.
Moody's has also placed the ratings for Pride under review for
possible upgrade. The affected ratings for Pride are its Ba1
Corporate Family Rating, its Ba1 Probability of Default Rating,
and its Ba1 senior unsecured notes rating.
"The affirmation of ENSCO's ratings reflects the combination of
two complementary offshore drilling rig fleets that will form the
second largest in the industry," said Ken Austin, Moody's Vice
President. "Although ENSCO's leverage will initially increase
substantially from currently minimal levels, Moody's anticipates
that it will improve sufficiently over the next 18 to 24 months
and move back in-line with levels appropriate for the Baa1
rating."
Pro forma for the acquisition, Moody's estimates ENSCO's
debt/EBITDA (adjusted for leases) will be approximately between
3.5x and 4.0x, which is among the highest for the peer group
despite approximately 75% of the acquisition being funded with
equity and cash on hand. However, the stable outlook anticipates
that leverage will decline to around 2.0x by the end of 2012.
This leverage improvement should be achieved through the
combination of a robust $10.0 billion pro forma backlog, Moody's
views that the supportive market conditions for the both the high
specification jackup and deepwater drilling markets will result in
higher earnings and cashflows for the combined fleet, and ENSCO's
track record of financial conservatism which Moody's believes will
translate into management working aggressively to reduce leverage
through some debt reduction and not relying solely on EBITDA
growth.
On a combined basis, the fleet will be the second largest fleet in
the industry, with 74 rigs comprising 21 deepwater and ultra-
deepwater rigs, 6 semisubmersible rigs suited for the midwater
market, and 47 jackup rigs. This includes 3 drillships and 3
semisubmersibles currently under construction, and one drillship
recently ordered. Although 4 of the rigs under construction/on
order do not have firm contracts, the current outlook for the
industry looks to be supportive, especially in light of very high
oil prices. However, Moody's notes that there have been a number
of industry newbuilds recently announced, which could put pressure
on dayrates in 2012 and beyond. Therefore, it is important to the
ratings and outlook that ENSCO obtain firm contracts for the rigs
as soon as possible in order to support its de-leveraging plan.
ENSCO's ratings could face negative pressure if leverage does not
appear it will get to the 2.0x range in 2012, either through a
pull back of dayrates in the industry, shareholder friendly
activities, or through increased capital spending for additional
newbuilds. Conversely, an upgrade would be considered if leverage
were to fall below 2.0x with the expectation that it would remain
below that level going forward.
Moody's review of Pride's ratings will focus on whether Ensco will
guarantee Pride's debt and, if not, the imputed support and
ratings uplift attributable to Ensco. Moody's would expect in the
latter case that Pride would be rated higher but not necessarily
equivalent to ENSCO, International. If the Pride's debt is not
guaranteed, Moody's will also consider the level of financial
disclosure available in order to maintain a rating on Pride
following the acquisition.
Ensco, plc, the parent company of ENSCO International, Inc., has
agreed to acquire Pride for cash and stock. The value of the
transaction is approximately $7.5 billion ($41.60/share) plus the
assumption of $1.4 billion of net debt, for total consideration of
$8.9 billion. Ensco will fund the acquisition with 0.4778 share
of newly issued Ensco share plus $15.60 in cash for each share of
Pride common stock. This mix translates into approximately 61% of
the acquisition being funded with equity, 25% in new debt, and 14%
from cash on hand. The purchase price represents approximately
21% premium to Pride's stock.
The last rating action for ENSCO was on May 16, 2002, when the
ratings were affirmed. The last rating action for Pride was on
August 3, 2010, when the ratings were affirmed.
ENSCO International, Inc, is a wholly-owned subsidiary of Ensco
plc, an international offshore drilling company headquartered in
London, England.
Pride International, Inc., is an offshore drilling contractor
headquartered in Houston, Texas.
ERNIE LEE JACOBSEN: Bid to Assume Sonic Licenses Goes to Trial
--------------------------------------------------------------
Bankruptcy Judge David W. Houston, III, denied a motion to dismiss
or for summary judgment filed by Sonic Industries, LLC, regarding
motions filed by Ernie Lee Jacobsen to assume certain Sonic
license agreements and sign leasesI.
Ernie Lee Jacobsen and Donna Jean Jacobsen, as well as, Ja-Co
Foods, Inc., filed voluntary Chapter 11 petitions (Bankr. N.D.
Miss. Case Nos. 09-15667 and 09-16017) on October 29, 2009. Over
a period of years, Sonic and Ernie Lee Jacobsen entered into a
series of license agreements whereby Sonic granted to Mr. Jacobsen
or related entities a separate license for each of the 23 Sonic
drive-in restaurants at designated locations in Mississippi,
Alabama, and Georgia. Shortly before the petition date, Ernie Lee
Jacobsen or a related entity or entities sold to Ronald McClain,
also known as Buddy McClain, six Sonic drive-in restaurants: (1)
2910 Lurleen Wallace Boulevard, Northport, Alabama; (2) 58
McFarland Boulevard, Northport, Alabama; (3) 2407 North Broadway
Street, Selma, Alabama; (4) 3160 15th Street, Tuscaloosa, Alabama;
(5) 4505 East McFarland Boulevard, Tuscaloosa, Alabama; and (6)
2730 East University Drive, Tuscaloosa, Alabama.
Pursuant to the Agreed Order Granting Motion for an Order Pursuant
to 11 U.S.C. Sec. 363 to Sell Certain Property of Debtors, entered
May 5, 2010, in the Ja-Co case and entered May 10, 2010, in the
Jacobsen case, Ernie Lee Jacobsen (1) sold to M&F Management LLP,
the Sonic drive-in restaurants located at 44237 Highway 17 South,
Vernon, Alabama; 291 Second Street, Belmont, Mississippi; 710 City
Avenue South, Ripley, Mississippi; and 15376 New Jackson Highway,
Russellville, Alabama; (2) assumed and assigned to M&F the Sonic
license agreements for the first three of these locations since
the license agreement for Russellville was terminated; (3) assumed
and assigned to M&F the Sonic sign lease for the Ripley location;
and (4) sold to M&F the Sonic signs for the Vernon and Belmont
locations.
To date, Ernie Lee Jacobsen remains the franchisee for eight Sonic
drive-in restaurants, all of which are currently open and
operating:
a. 808 South Chestnut Street, Aberdeen, Mississippi
b. 1916 Highway 45 North, Columbus, Mississippi
c. 1614 South Adams Street, Fulton, Mississippi
d. 913 Highway 12 West, Starkville, Mississippi
e. 2608 West Main Street, Tupelo, Mississippi
f. 356 Highway 45 South, West Point, Mississippi
g. 1197 South Gloster Street, Tupelo, Mississippi; and
h. 302 Highway 12 East, Starkville, Mississippi.
On October 12, 2010, Ernie Lee Jacobsen filed six motions to
assume Sonic license agreements and six motions to assume Sonic
sign leases relating to the Aberdeen, Columbus, Fulton,
Starkville-West, Tupelo-West Main, and West Point locations. Mr.
Jacobsen has not taken action to assume or reject the license
agreements and sign leases applicable to the Tupelo-Gloster and
Starkville-East.
Jacobsen's or Ja-Co's ability to assume the sign leases is
inextricably tied to their ability to assume the license
agreements.
Judge Houston held that an issue that requires resolution is the
relationship between Jacobsen/Ja-Co and Sonic. Are Ja-Co and
Jacobsen one and the same, or has a defacto assignment been
effectuated from Mr. Jacobsen to Ja-Co over the past several
years? This is potentially a material factual issue that remains
in dispute which can only be resolved through an evidentiary
hearing. In addition, Judge Houston said that before Mr. Jacobsen
and/or Ja-Co can assume the license agreements or the sign leases,
either or both must cure all of the existing defaults or provide
adequate assurance that the said defaults can be promptly cured.
According to Judge Houston, Sec. 365(b)(1) of the Bankruptcy Code
provides the most sensible and practical protection for Sonic.
While it was not discussed extensively, there is also the question
of whether the license agreements are personal service contracts,
and, therefore, not assumable by Ja-Co.
Judge Houston said Sonic's motion to dismiss is not well taken
primarily because the Court rejects the "hypothetical test"
approach when there is a clear absence of an intent to assign the
executory contracts or the unexpired leases. The Court also held
that Sonic's alternative request for summary judgment is not well
taken because material factual issues remain in dispute.
A copy of the Court's February 7, 2011 Opinion is available at
http://is.gd/tV2Ky9from Leagle.com.
Ernie Lee Jacobsen and Donna Jean Jacobsen filed for Chapter 11
bankruptcy protection on October 29, 2009 (Bankr. N.D. Miss. Case
No. 09-15667). Craig M. Geno, at Harris Jernigan & Geno, PLLC, in
Ridgeland, Mississippi, represents the Debtors as counsel. The
Joint Debtors listed assets of $15,283,881 and debts of
$16,518,690 in their schedules.
EVANS OIL: Has Court's Interim Okay to Use Cash Collateral
----------------------------------------------------------
Evans Oil Company LLC, et al., sought and obtained interim
authorization from the Hon. David H. Adams of the U.S. Bankruptcy
Court for the Middle District of Florida to use cash collateral
until February 17, 2011.
Fifth Third Bank, Evans' principal working capital and secured
lender, asserts a security interest in Debtors' cash collateral.
Fifth Third Bank provides various credit facilities to Evans Oil,
pursuant to a certain Amended and Restated Credit Agreement
entered into as of April 16, 2010. Presently, Evans Oil owes
Fifth Third Bank approximately $34 million.
John S. Sarrett, Esq., at Hahn Loeser & Parks LLP, explained that
the Debtors need the money to fund their Chapter 11 case, pay
suppliers and other parties.
On January 31, 2011, the Court entered a certain interim order
authorizing use of the cash collateral. On February 3, 2011, the
Court entered a certain second interim order authorizing use of
cash collateral. The Debtors and Fifth Third Bank have agreed to
extend the interim cash collateral orders.
The Debtors will use the cash collateral pursuant to a budget, a
copy of which is available for free at:
http://bankrupt.com/misc/EVANS_OIL_budget.pdf
As adequate protection for any such interest in cash collateral
used by the Debtors, Fifth Third is granted replacement liens
upon, and security interests in, Debtors' postpetition cash
collateral, but only to the extent that Debtors diminish the cash
collateral. As further adequate protection of Fifth Third's
interests in the cash collateral, the Debtors will provide counsel
for Fifth Third and any creditors' committee with weekly and daily
financial reports. Fifth Third may, upon not less than two
business days' prior written notice to Debtors' counsel, have the
right to a hearing on stay relief.
The Court has set a further hearing for February 17, 2011, at
10:30 a.m., prevailing Eastern Time, on the Debtors' request to
use the cash collateral.
About Evans Oil
Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC,
distributes bulk oil, gas, diesel and lubricant products. It
filed for Chapter 11 bankruptcy protection on January 30, 2011
(Bankr. M.D. Fla. Case No. 11-01515). John S. Sarrett, Esq.,
Lawrence E. Oscar, Esq., Daniel A. DeMarco, Esq., Christopher B.
Wick, Esq., and Emily W. Ladky, Esq., at Hahn Loeser & Parks LLP,
servers as the Debtor's bankruptcy counsel. The Debtor estimated
its assets and debts at $10 million to $50 million.
Affiliates KCWL, LLC (Bankr. M.D. Fla. Case No. 11-01519), Long
Equipment Finance, LLC (Bankr. M.D. Fla. Case No. 11-01520), Long
Petroleum Products (Bankr. M.D. Fla. Case No. 11-01521), Long Run,
LLC (Bankr. M.D. Fla. Case No. 11-01522), Octane, LLC (Bankr. M.D.
Fla. Case No. 11-01523), and RML, LLC (Bankr. M.D. Fla. Case No.
11-01524) filed separate Chapter 11 petitions on January 30, 2011.
The cases are jointly administered. Evans Oil is the lead case.
The Debtors hired The Garden City Group, Inc., as claims, noticing
and balloting agent.
EVANS OIL: Parkland Group to Provide Restructuring Services
-----------------------------------------------------------
Evans Oil Company LLC, et al., ask for authorization from the U.S.
Bankruptcy Court for the Middle District of Florida to employ The
Parkland Group, Inc., to provide restructuring services to the
Debtors, nunc pro tunc to the Petition Date.
Parkland Group will, among other things:
a. assist the management with management of cash and accounts
payable;
b. assist the Debtors with the collection of accounts
receivable;
c. develop and implement a restructuring plan; and
d. negotiate lending arrangements, adequate protection and
other accommodations with the lenders, including the
negotiation of debtor-in-possession financing and
coordinating any sale process.
Parkland Group will be paid based on the hourly rates of its
professionals:
Principals $325-$395
Directors $275-$325
Consultants $250-$275
Laurence V. Goddard, President of Parkland Group, assures the
Court that the firm is a "disinterested person" as that term
defined in Section 101(14) of the Bankruptcy Code.
Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC,
distributes bulk oil, gas, diesel and lubricant products. It
filed for Chapter 11 bankruptcy protection on January 30, 2011
(Bankr. M.D. Fla. Case No. 11-01515). John S. Sarrett, Esq.,
Lawrence E. Oscar, Esq., Daniel A. DeMarco, Esq., Christopher B.
Wick, Esq., and Emily W. Ladky, Esq., at Hahn Loeser & Parks LLP,
servers as the Debtor's bankruptcy counsel. The Debtor estimated
its assets and debts at $10 million to $50 million.
Affiliates KCWL, LLC (Bankr. M.D. Fla. Case No. 11-01519), Long
Equipment Finance, LLC (Bankr. M.D. Fla. Case No. 11-01520), Long
Petroleum Products (Bankr. M.D. Fla. Case No. 11-01521), Long Run,
LLC (Bankr. M.D. Fla. Case No. 11-01522), Octane, LLC (Bankr. M.D.
Fla. Case No. 11-01523), and RML, LLC (Bankr. M.D. Fla. Case No.
11-01524) filed separate Chapter 11 petitions on January 30, 2011.
The cases are jointly administered. Evans Oil is the lead case.
The Debtors hired The Garden City Group, Inc., as claims, noticing
and balloting agent.
EVERGREEN ENERGY: Amends Stockholders' Rights Agreement
-------------------------------------------------------
Effective January 26, 2011, Evergreen Energy Inc. and the
Company's transfer agent, Interwest Transfer Company, Inc.,
executed an amendment to the Rights Agreement dated December 4,
2008. The amendment clarifies that stockholders who become
beneficial owners of more that 15% of the outstanding shares of
the Company's stock as a result of their participation in an
Approved Financing Transaction, will not be considered Acquiring
Persons for purposes of the Rights Agreement. An "Approved
Financing Transaction" is a financing transaction at a price equal
to or above the current market price for the common stock on the
date of the closing of such transaction, provided the transaction
has been approved by not less than two-thirds of the continuing
independent directors of the Company.
A full-text copy of the First Amendment to Rights Agreement is
available for free at http://ResearchArchives.com/t/s?72e5
About Evergreen Energy
Evergreen Energy Inc. has developed two proven, proprietary,
patented, and transformative green technologies: the GreenCert(TM)
suite of software and services and K-Fuel(R). GreenCert, which is
owned exclusively by Evergreen, is a science-based, scalable
family of environmental intelligence solutions that quantify
process efficiency and greenhouse gas emissions from energy,
industrial and agricultural sources and may be used to create
verifiable emission reduction credits. K-Fuel technology
significantly improves the performance of low-rank coals, yielding
higher efficiency and lowering emissions.
The Company's balance sheet as of September 30, 2010, showed
$33.93 million in total assets, $45.04 million in total
liabilities, $3,000 in temporary equity, and a stockholders'
deficit of $11.11 million.
Deloitte & Touche LLP, in Denver, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted of the Company's recurring losses from
operations and stockholders' deficit.
FANNIE MAE: Gov't to Phase Out Firms, Exit Mortgage Market
----------------------------------------------------------
The Wall Street Journal's Nick Timiraos reports that according to
people familiar with the matter, the Obama administration will
recommend phasing out Fannie Mae and Freddie Mac and gradually
reduce the government's footprint in the mortgage market. The
Journal says the administration is expected to include three
options for a post-Fannie and Freddie world when it releases a
long-awaited proposal for the future of the nation's $10.6
trillion mortgage market, which could come as soon as Friday.
Together with federal agencies, Fannie and Freddie have accounted
for nine of 10 new loan originations in the past year.
According to the report, the White House's "white paper" will
begin what promises to be a prolonged and fiery debate about the
future of how homes are financed across the U.S. Any steps to
reduce the government role in the mortgage market likely would
raise borrowing costs for home buyers, adding pressure on the
still-fragile U.S. housing markets. Consequently, analysts
believe any transition could take years and would be driven by the
pace of the housing market's recovery.
According to the report, the administration's proposal to Congress
is likely to assess the merits and drawbacks of each of three
options:
-- The most conservative would propose no government role in
the mortgage market beyond existing federal agencies, such
as the Federal Housing Administration;
-- The two others would create a way for the government to
backstop part of the secondary mortgage market, a role
long-filled by Fannie and Freddie:
* Under one, that government backstop would kick in
primarily during periods of market stress;
* Under the other, the government would play a role at
all times.
The White House has committed unlimited amounts of aid to ensure
that Fannie and Freddie meet their obligations to debt and
securities holders. So far, taxpayers are on the hook for
$134 billion.
The Journal notes some economists and regulators have warned any
new government backstops would put too much risk on taxpayers. In
exchange for guaranteeing loans, policy makers could face pressure
to under-price guarantees. Any options must also navigate a
mortgage market that has grown increasingly consolidated and risks
shifting the "too-big-to-fail" risks from Fannie and Freddie to
U.S. megabanks.
About Freddie Mac
Based in McLean, Virginia, the Federal Home Loan Mortgage
Corporation, known as Freddie Mac (OTCBB: FMCC) --
http://www.FreddieMac.com/-- was established by Congress in
1970 to provide liquidity, stability and affordability to the
nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders. Over the years, Freddie Mac has made home possible for
one in six homebuyers and more than five million renters.
Freddie Mac is under conservatorship and is dependent upon the
continued support of Treasury and the Federal Housing Finance
Agency acting as conservator to continue operating its
business.
About Fannie Mae
Federal National Mortgage Association, aka Fannie Mae, is a
government-sponsored enterprise that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold.
Fannie Mae has been under conservatorship, with the Federal
Housing Finance Agency acting as conservator, since September 6,
2008. As conservator, FHFA succeeded to all rights, titles,
powers and privileges of the company, and of any shareholder,
officer or director of the company with respect to the company and
its assets. The conservator has since delegated specified
authorities to Fannie Mae's Board of Directors and has delegated
to management the authority to conduct day-to-day operations.
The U.S. Department of the Treasury owns Fannie Mae's senior
preferred stock and a warrant to purchase 79.9% of its common
stock, and Treasury has made a commitment under a senior preferred
stock purchase agreement to provide Fannie with funds under
specified conditions to maintain a positive net worth.
FIRST DATA: Incurs $129.9 Million Net Loss in 4th Quarter
---------------------------------------------------------
First Data Corporation announced its financial results for the
fourth quarter and full year ended Dec. 31, 2010.
The Company reported a net loss of $129.90 million on $2.73
billion of revenue for the three months ended Dec. 31, 2010,
compared with a net loss of $338.40 million on $2.58 billion of
revenue for the same period a year ago.
The Company also reported a net loss of $846.90 million on
$10.38 billion of revenue for the twelve months ended Dec. 31,
2010, compared with a net loss of $1.01 billion on $9.31 billion
of revenue a year ago.
The Company's balance sheet at Dec. 31, 2010, showed
$37.54 billion in total assets, $33.46 billion in total
liabilities and $4.06 billion in total equity.
First Data generated $755 million in operating cash flow, after
interest payments of $1.5 billion, for the full year and finished
the year with $2.0 billion in unrestricted liquidity-$242 million
in cash available for corporate use plus $1.7 billion under the
line of credit.
"We are encouraged by the solid growth in our U.S. merchant
acquiring business driven by an improving economy and related
consumer spending," said Jonathan J. Judge, chief executive
officer. "As we start a new year, First Data is focused on
increasing profitability by driving revenue in the U.S. and key
markets in Latin America and Asia, managing through U.S.
regulatory changes, and improving operational efficiency in
Europe."
A full-text copy of the press release announcing the Company's
financial results is available for free at:
http://ResearchArchives.com/t/s?72eb
About First Data
Based in Atlanta, Georgia, First Data Corporation, with over
$10 billion of revenue for the 12 months ended June 30, 2010,
provides commerce and payment solutions for financial
institutions, merchants, and other organizations worldwide.
* * *
The Company's carries a 'B3' corporate family rating, with a
stable outlook, from Moody's Investors Service, a 'B' corporate
credit rating, with stable outlook, from Standard & Poor's, and
a 'B' long-term issuer default rating from Fitch Ratings.
Standard & Poor's Ratings Services in December 2010 assigned its
'B-' issue rating with a '5' recovery rating to First Data Corp.'s
(B/Stable/--) $2 billion of 8.25% second-lien cash-pay notes due
2021, $1 billion $8.75% second-lien pay-in-kind-toggle notes due
2022, and $3 billion 12.625% unsecured cash-pay notes due 2021.
The '5' recovery rating indicates lenders can expect modest (10%-
30%) recovery in the event of payment default. Under S&P's
default analysis, there is insufficient collateral to fully cover
First Data's first-lien debt. As a result, the remaining value of
the company (generated by non-U.S. assets and not pledged) would
be shared pari passu among the uncovered portion of first-lien
debt, new second-lien debt, and new and existing unsecured debt.
FLORIDA GAMING: Borrows $1 Million From AGS Capital
---------------------------------------------------
On January 26, 2011, Florida Gaming Corporation and its wholly-
owned subsidiary Florida Gaming Centers, Inc., entered into a Loan
and Security Agreement with City National Bank of Florida, as
trustee under its land trust number 5003471 dated January 3, 1979,
and AGS Capital, LLC, pursuant to which AGS will loan the Company
$1 million, payable in two equal tranches of $500,000, and the
Company has issued the Lender a promissory note in the original
principal amount of $1 million.
The Company received the first tranche on January 26, 2011 and,
pursuant to the Loan Agreement, it will receive the second tranche
on February 10, 2010. Receipt of Tranche 2 is conditioned on the
Company satisfying certain conditions, including: (i) the
Company's completion of a Business Entity Slot Machine
Occupational License Application with the Florida Division of
Pari-mutuel Wagering; (ii) completion of an ALTA survey on the
Company's Miami Jai Alai facility and (iii) the Company's entering
into agreements with the Lender for the lease or purchase of a
minimum number of slot machines.
The outstanding principal balance of the Note bears interest at an
annual rate of 8%. The entire outstanding principal balance of
the Note, plus accrued but unpaid interest, is due in full on the
Note's maturity date, which is the earlier of March 31, 2011 or
the date on which the Company secures permanent financing of
approximately $83 Million. The Company has the right to prepay
the Note in full or in part without penalty. If the Note is not
paid in full on the maturity date, the Note will thereafter bear
interest at the default rate of 18% per annum.
The Company's obligations under the Note are secured by:
(i) a junior mortgage and security agreement in favor of the
Lender on the real estate at the Jai Alai Facility;
(ii) a security interest in all licenses and permits and all
contracts, agreements and warranties owned by the Company
and related to the Jai Alai Facility;
(iii) the beneficial interest in and a power of direction in and
to the Land Trust; and
(iv) a security interest in the Company's tangible and
intangible property at the Jai Alai Facility.
Additionally, during the term of the Note, the Lender has the
right to approve any management agreement relating to the
management of the Jai Alai Facility. The Loan Agreement, the
Note, the Junior Mortgage and Security Agreement, the Collateral
Assignment of Beneficial Interest in Collateral, are collectively
referred to as the "Loan Documents."
A full-text copy of the Loan Agreement is available for free at:
http://ResearchArchives.com/t/s?72e6
About Florida Gaming
Florida Gaming Corporation operates live Jai Alai games at
frontons in Ft. Pierce, and Miami, Florida through its Florida
Gaming Centers, Inc. subsidiary. The Company also conducts
intertrack wagering (ITW) on jai alai, horse racing and dog racing
from its facilities. Poker is played at the Miami and Ft. Pierce
Jai-Alai, and dominoes are played at the Miami Jai-Alai. In
addition, the Company operates Tara Club Estates, Inc., a
residential real estate development located near Atlanta in Walton
County, Georgia. Approximately 46.2% of the Company's common
stock is controlled by the Company's Chairman and CEO either
directly or beneficially through his ownership of Freedom Holding,
Inc. The Company is based in Miami, Florida.
The Company's balance sheet as of September 30, 2010, showed
$15.40 million in assets, $20.77 million in total liabilities, and
a stockholders' deficit of $5.37 million.
King + Company, PSC, in Louisville, Kentucky, expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted that the Company has suffered recurring
losses from operations and cash flow deficiencies.
FN BUILDING: Creditors Want Receiver to Keep Control of Skyscraper
------------------------------------------------------------------
Dow Jones' Small Cap reports that the alleged "gross
mismanagement" of downtown Detroit's First National Building has
spurred secured creditors and tenants to request that its state
court-appointed receiver remain at the landmark building's helm
during its owner's Chapter 11 restructuring, the receiver said.
According to the report, receiver O'Keefe & Associates Consulting
LLC said that although it's willing to comply with the bankruptcy-
law provision that calls on it to return the skyscraper to owner
FN Building LLC upon the latter's Chapter 11 filing, it's also
open to remaining in control.
"These interested parties have expressed their concern that if the
receivership is terminated, the building will again suffer from
the same gross mismanagement, neglect and abuse as when it was
under debtor's control," O'Keefe's attorneys wrote in court papers
filed, the report notes.
"O'Keefe is sensitive to the concerns of these parties and remains
willing, if the court so decides, to remain as the receiver," the
added.
FN Building L.L.C., filed for Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 11-10266) in Manhattan, New York, on Jan. 26,
2011. FN Building is the owner of the First National Building in
Detroit. The Company owes $25.7 million on a mortgage to FNB
Detroit 2010 LLC. The building is said to be worth $5.58 million.
FNB UNITED: Common Stock Moved to The NASDAQ Capital Market
-----------------------------------------------------------
On February 1, 2011, FNB United Corp. received a written notice
from The Nasdaq Stock Market indicating that FNB United's
application to transfer the listing of its common stock to The
Nasdaq Capital Market was approved. The transfer was effective at
the opening of business on February 3, 2011.
The application to transfer was prompted by FNB United's failure
to be in compliance with Rule 5450(a)(1), the bid price rule,
because the closing bid price per share of its common stock had
been below $1.00 per share for 30 consecutive business days prior
to July 31, 2010. Upon the transfer to The Nasdaq Capital Market,
FNB United became eligible for an additional 180 calendar day
period, or until August 1, 2011, to regain compliance with the bid
price rule. Approval to transfer to The Nasdaq Capital Market was
conditioned upon FNB United's agreeing to effect a reverse stock
split during the additional 180-day period should it become
necessary to do so to meet the minimum $1.00 bid price per share
requirement.
The trading of FNB United common stock is unaffected by this
change and will continue to be traded under the symbol "FNBN."
About FNB United
Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank
holding company for CommunityOne Bank, N.A., and the bank's
subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne
Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38
communities throughout central, southern and western North
Carolina. Through these subsidiaries, FNB United offers a
complete line of consumer, mortgage and business banking services,
including loan, deposit, cash management, wealth management and
internet banking services.
The Company's balance sheet at Sept. 30, 2010, showed
$2.01 billion in total assets, $1.99 billion in total liabilities,
and stockholders' equity of $18.56 million.
In its Form 10-Q for the three months ended June 30, 2010, the
Company acknowledged the existence of certain conditions that
raise substantial doubt its ability to continue as a going
concern, including significant losses that the Company incurred in
2009 and the Bank's agreement to the issuance of a Consent Order
by the Office of the Comptroller of the Currency, dated July 22,
2010. In the Consent Order, the Bank and the OCC agreed as to
areas of the Bank's operations that warrant improvement and a plan
for making those improvements.
FPD LLC: Has Until April 4 to Propose Chapter 11 Plan
-----------------------------------------------------
The Hon. Paul Mannes of the U.S. Bankruptcy Court for the District
of Maryland extended FPD, LLC, et al.'s exclusive periods to file
and solicit acceptances for the proposed chapter 11 plan until
April 4, 2011, and May 31, respectively.
Prince Frederick, Maryland-based FPD, LLC, filed for Chapter 11
bankruptcy protection on September 3, 2010 (Bankr. D. Md. Case No.
10-30424). G. David Dean, II, Esq., and Irving Edward Walker,
Esq., at Cole Schotz Meisel Forman & Leonard P.A., assist the
Debtor in its restructuring effort. The Debtor estimated its
assets and debts at $1 million to $10 million.
Affiliates Acorn Land, LLC (Bankr. D. Md. Case No. 10-30437),
Breezewood Homes, LLC (Bankr. D. Md. Case No. 10-30441), First
Development Group, LLC (Bankr. D. Md. Case No. 10-30443), MD
Homes, LLC (Bankr. D. Md. Case No. 10-30444), NC Homes, LLC
(Bankr. D. Md. Case No. 10-30445), and Tidewater Land, LLC (Bankr.
D. Md. Case No. 10-30446) filed separate Chapter 11 petitions in
September 2010.
Acorn Land, Breezewood Homes, and MD Homes estimated their assets
and debts at $1 million to $10 million each. First Development
estimated its assets and debts at $10 million to $50 million.
The Debtors' bankruptcy cases are jointly administered.
FRANKLIN PACIFIC: Schedules April 7 Plan Confirmation Hearing
-------------------------------------------------------------
Franklin Pacific Finance LLLP has scheduled a plan confirmation
hearing for April 7, 2011, at 1:30 p.m. Any opposition to the
confirmation of the Plan is due 14 days prior to the hearing date.
Payments contemplated under Plan will be sourced from future
earnings from continued operations of the Debtor, including rental
income, interest income, sales or refinances of properties, and
note payments due to the Debtor, as well as cash held in Debtor-
in-Possession accounts.
The Debtor amended the Plan and the explanatory disclosure
statement on Jan. 28, 2011.
Under the Plan, as amended, general unsecured creditors under
Class 4 can expect payment:
a. beginning 30 days after the Effective Date of the Plan;
b. in the amount of 1/3 of each creditors' unsecured claim plus
4% interest;
c. and continuing every month for 2 additional months.
Holders of Secured Priority Tax Claims under Class 1 will be paid
over time.
The secured claims of Washington Mutual Bank N.A. under Class 2
will be paid, subject to a reduction in the interest rate to 4%,
interest at $2,595.67 per month. Principal and interest will be
paid in full upon the earlier of 4 years after the Effective
Date or sale of property.
The secured Claims of Bank Midwest N.A., owed $20,440,560.00 (has
been reduced by certain post-petition payments) as of the Petition
Date, will be paid in accordance with the terms of the Loan
Modification Agreement entered into in September 2010. Monthly
debt service payments will be made per each individual property
with interest at 4.25% until the property is refinanced or sold.
Final payment will be made on the earlier of April 1, 2012, or
sale or refinance of the property.
All four classes are impaired and entitled to vote.
A copy of the Combined Disclosure Statement and Plan of
Reorganization is available for free at:
http://bankrupt.com/misc/FranklinPacific.AmendedDS.pdf
About Franklin Pacific
Santa Monica, California-based Franklin Pacific Finance, LLLP,
engages in the business of acquiring and operating real estate
assets and loans secured by real estate assets, equipment,
vehicles and business assets, unsecured loans. The Company
acquires assets and loans as portfolios or in stand-alone
transactions. Debtor has conducted its business activity since
2005.
The Company filed for Chapter 11 bankruptcy protection on May 24,
2010 (Bankr. C.D. Calif. Case No. 10-30727). Leslie A. Cohen,
Esq., Esq., and Jaime Williams, Esq., at Leslie Cohen Law, P.C.,
in Santa Monica, California, serve as counsel to the Debtor. The
Company estimated assets and debts at $10 million to $50 million
as of the petition date.
FRANK MENDENHALL: U.S. Trustee Wants Dismissal or Liquidation
-------------------------------------------------------------
Harold Brubaker, staff writer at The Inquirer, reports that the
U.S. trustee overseeing their Chapter 11 bankruptcy case of Frank
Mendenhalls has filed a motion to have the petition either
dismissed or converted into a Chapter 7 liquidation, citing a lack
of progress toward reorganization.
The Inquirer relates that with a dismissal or conversion,
Mr. Mendenhall is in danger of losing to lenders what remains of
the 200 acres of land an ancestor bought from William Penn's
agents in 1703. Mr. Mendenhall owes lenders $1.76 million.
Mr. Mendenhall is the eighth-generation owner of land in Chester
County, near Chadds Ford, in Philadelphia. Frank K. Mendenhall
and his spouse filed for Chapter 11 (Bankr. E.D. Pa. Case No. 10-
30385) on Nov. 30, 2010. He filed the petition pro se.
FRASER PAPERS: Creditors Approve Restructuring Plan
---------------------------------------------------
Fraser Papers Inc. and its subsidiaries disclosed that creditors
of the Company approved an amended consolidated plan of compromise
and arrangement at a meeting of creditors held in Toronto. The
Amended Plan was filed with the Ontario Court overseeing Fraser
Papers' restructuring proceedings under the Companies' Creditors
Arrangement Act ("CCAA") on January 28, 2011 and was supported by
PricewaterhouseCoopers, the court-appointed Monitor and other
significant stakeholders.
The Amended Plan was supported by 94.7% of the votes (in number)
represented at the Meeting and 75.3% of the value of claims who
voted. Under criteria set out in the CCAA, the Amended Plan
required approval of the majority of creditors in number and 66
2/3% of the dollar value of claims voting at the Meeting.
The Amended Plan contemplates the distribution of all proceeds of
the sale of the Company's assets to unsecured creditors, once all
secured claims are paid in full.
As a result of the approval of the Amended Plan, the Company
intends to appear before the Ontario Court on February 10, 2011
and the U.S. Court on February 11, 2010 to seek the necessary
court approvals to implement the Amended Plan.
About Fraser Papers
Fraser Papers -- http://www.fraserpapers.com/-- is an integrated
specialty paper company that produces a broad range of specialty
packaging and printing papers. The Company has operations in New
Brunswick, Maine, New Hampshire and Quebec.
On June 18, 2009, citing continued operating losses, weak markets
for pulp and lumber, impending debt repayments and significant
pension funding obligations, the Company and its subsidiaries
filed for protection under the Companies Creditors Arrangement Act
(Ont. Super. Ct. J. Ct. File No. CV-09-8241-00CL) in Toronto and
Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
09-12123). Fraser is represented by Michael Barrack, Esq.,
Robert I. Thornton, Esq., and D.J. Miller, Esq., at
ThorntonGroutFinnigan LLP, in Toronto, and Derek C. Abbott, Esq.,
at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Del.
FREDDIE MAC: Gov't to Phase Out Firms, Exit Mortgage Market
-----------------------------------------------------------
The Wall Street Journal's Nick Timiraos reports that according to
people familiar with the matter, the Obama administration will
recommend phasing out Fannie Mae and Freddie Mac and gradually
reduce the government's footprint in the mortgage market. The
Journal says the administration is expected to include three
options for a post-Fannie and Freddie world when it releases a
long-awaited proposal for the future of the nation's $10.6
trillion mortgage market, which could come as soon as Friday.
Together with federal agencies, Fannie and Freddie have accounted
for nine of 10 new loan originations in the past year.
According to the report, the White House's "white paper" will
begin what promises to be a prolonged and fiery debate about the
future of how homes are financed across the U.S. Any steps to
reduce the government role in the mortgage market likely would
raise borrowing costs for home buyers, adding pressure on the
still-fragile U.S. housing markets. Consequently, analysts
believe any transition could take years and would be driven by the
pace of the housing market's recovery.
According to the report, the administration's proposal to Congress
is likely to assess the merits and drawbacks of each of three
options:
-- The most conservative would propose no government role in
the mortgage market beyond existing federal agencies, such
as the Federal Housing Administration;
-- The two others would create a way for the government to
backstop part of the secondary mortgage market, a role
long-filled by Fannie and Freddie:
* Under one, that government backstop would kick in
primarily during periods of market stress;
* Under the other, the government would play a role at
all times.
The White House has committed unlimited amounts of aid to ensure
that Fannie and Freddie meet their obligations to debt and
securities holders. So far, taxpayers are on the hook for
$134 billion.
The Journal notes some economists and regulators have warned any
new government backstops would put too much risk on taxpayers. In
exchange for guaranteeing loans, policy makers could face pressure
to under-price guarantees. Any options must also navigate a
mortgage market that has grown increasingly consolidated and risks
shifting the "too-big-to-fail" risks from Fannie and Freddie to
U.S. megabanks.
About Freddie Mac
Based in McLean, Virginia, the Federal Home Loan Mortgage
Corporation, known as Freddie Mac (OTCBB: FMCC) --
http://www.FreddieMac.com/-- was established by Congress in
1970 to provide liquidity, stability and affordability to the
nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders. Over the years, Freddie Mac has made home possible for
one in six homebuyers and more than five million renters.
Freddie Mac is under conservatorship and is dependent upon the
continued support of Treasury and the Federal Housing Finance
Agency acting as conservator to continue operating its
business.
About Fannie Mae
Federal National Mortgage Association, aka Fannie Mae, is a
government-sponsored enterprise that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold.
Fannie Mae has been under conservatorship, with the Federal
Housing Finance Agency acting as conservator, since September 6,
2008. As conservator, FHFA succeeded to all rights, titles,
powers and privileges of the company, and of any shareholder,
officer or director of the company with respect to the company and
its assets. The conservator has since delegated specified
authorities to Fannie Mae's Board of Directors and has delegated
to management the authority to conduct day-to-day operations.
The U.S. Department of the Treasury owns Fannie Mae's senior
preferred stock and a warrant to purchase 79.9% of its common
stock, and Treasury has made a commitment under a senior preferred
stock purchase agreement to provide Fannie with funds under
specified conditions to maintain a positive net worth.
GAMESTOP CORPORATION: Repurchase Won't Affect 'Ba1' Moody's Rating
------------------------------------------------------------------
Moody's Investors Service stated that GameStop Corporation's
announcement that its Board of Directors authorized a new
$500 million share and debt repurchase program will have no impact
on the company's credit ratings or stable outlook. The company
has a Ba1 Corporate Family Rating as well as a Ba1 rating on
$250 million senior unsecured notes.
"GameStop has very healthy liquidity and Moody's expect that the
share and debt repurchases will be funded through its ample free
cash flow and cash on hand with no incremental increase in debt",
stated Moody's Senior Analyst Mickey Chadha. "As a result Moody's
expect credit metrics to remain consistent with its current
ratings with debt to EBITDA below 3.0 times and EBITA to interest
over 4.0 times", Mr. Chadha added.
GameStop's Ba1 Corporate Family Rating is supported by its solid
credit metrics and leading market position. The rating also
reflects the company's moderate scale, international footprint,
and its very good liquidity. Constraining the rating are medium
to longer term concerns around electronic gaming sales shifting to
the internet and away from bricks and mortar stores. The rating
is also constrained by the possibility of GameStop over-expanding
its store base given its history of aggressive levels of store
growth.
The last rating action on GameStop was on April 24, 2008, when its
Corporate Family Rating was raised to Ba1 from Ba2 with a stable
outlook, Probability of Default Rating was raised to Ba1 from Ba2,
the Senior Unsecured Notes rating was raised to Ba1 from Ba3 and
SGL rating of 1 was affirmed.
GameStop Corp., headquartered in Grapevine, Texas, is the world's
largest specialty retailer of video game products and PC
entertainment software. The company operates over 6,600 stores in
17 countries with revenues of about $9.3 billion.
GAMETECH INT'L: Expects to Report $18.9MM Loss for Fiscal 2010
--------------------------------------------------------------
On February 1, 2011, GameTech International, Inc., notified the
U.S. Securities and Exchange Commission that it is unable to file
its Form 10-K for the year ended October 31, 2010 within the
prescribed time period without unreasonable effort and expense.
The delay is primarily a result of management devoting a
substantial amount of its time and effort to work with its lenders
on an amendment or other resolution to the Company's credit
facility in light of existing defaults. At this time, no
amendment or other resolution concerning the credit facility has
been reached, and there can be no guarantee that an additional
forbearance, amendment or other resolution will be entered into
between the Company and its lenders. Regardless of the outcome of
these negotiations, the Company plans to file its Form 10-K no
later than February 15, 2011, as prescribed in Rule 12b-25.
For the fiscal year ended October 31, 2010, the Company expects to
report an approximate decrease of $12.6 million, or 26.4%, in net
revenue as compared to the fiscal year ended November 1, 2009.
Net revenue in our bingo segment for 2010 is expected to decrease
by approximately $9.0 million, or 23.1%, to approximately $30.1
million, compared to 2009. VLT/slot revenue is expected to
decrease $3.6 million, or 41.3%, to approximately $5.1 million.
The anticipated decrease in net bingo revenue is primarily due
hall closures from both adverse economic conditions and regulatory
changes, loss of customers to competitors, and price adjustments
to respond to increased competition in regional markets. The
anticipated decrease in VLT/slot net revenue is primarily due to a
higher proportion of lower unit revenue software conversion kits
sold in 2010 compared to more higher priced cabinets and complete
VLT units sold in 2009.
Cost of revenue is expected to decrease by approximately $3.8
million year over year, with bingo cost of revenue expected to
decrease approximately $2.9 million, or 19.6%, and VLT/slot cost
of revenue expected to decrease approximately $0.9 million, or
17.0%. The anticipated decrease in bingo cost of revenue is
primarily due to staff reductions to align the Company's costs to
lower business levels and a decrease in current depreciation
expense as the Company's Traveler and Tracker products became
fully depreciated, offset in part by increased amortization
related to the acquired license rights for the Company's Explorer
product. The expected decrease in VLT/slot cost of revenue is due
to lower sales volume and the Company's classification of certain
products and inventory as obsolete, resulting in additional
depreciation and inventory write-downs included in cost of
revenue.
Gross profit for the year ended October 31, 2010 is expected to
decrease approximately $8.8 million, or 31.7%, to $19.0 million,
as compared to the fiscal year ended November 2, 2009. Bingo
gross profit is expected to decrease approximately $6.1 million,
or 25.2%, with VLT/slot gross profit expected to decrease
approximately $2.7 million, or 78.2%, year over year.
Operating expenses for the fiscal year ended October 31, 2010 are
expected to decrease by approximately $14.0 million, or 34%, to
$27.3 million as compared to the prior year's results. The
expected decrease is primarily the result of the goodwill
impairment charge of $15.7 million and an impairment charge of
$2.7 million for an obsolete gaming library recorded in fiscal
2009.
The Company expects to report a net loss for the year ended
October 31, 2010 of approximately $18.9 million, compared to a net
loss of approximately $10.5 million for the prior year.
About GameTech International
Based in Reno, Nevada, GameTech develops and manufactures gaming
entertainment products and systems. GameTech holds a significant
position in the North American bingo market with its interactive
electronic bingo systems, portable and fixed-based gaming units,
and complete hall management modules. It also holds a significant
position in select North American VLT markets, primarily Montana,
Louisiana, and South Dakota, where it offers video lottery
terminals and related gaming equipment and software. It also
offers Class III slot machines and server-based gaming systems.
The Company's balance sheet at Aug. 1, 2010, showed $47.5 million
in total assets, $37.7 million in total liabilities, and
$9.8 million in stockholders' equity.
* * *
As reported in the Feb. 8, 2011 edition of the Troubled Company
Reporter, GameTech International on Feb. 1, received written
notice from U.S. Bank National Association, as agent for
the lenders, stating that the forbearance period under the
Company's credit facility expired on January 31, 2011. The letter
further states that the Lenders and the Agent have the immediate
right to commence action against the Company, enforce the payment
of the notes under the credit facility, commence foreclosure
proceedings under certain loan documents, and otherwise enforce
their rights and remedies against the Company.
The Company says it continues to actively engage in discussions
with the Agent and the Lenders and is optimistic a resolution can
be reached.
The outstanding balance under the term loan is $24.79 million and
the outstanding balance under the revolver is $732,000. The
outstanding balance under the Company's term loan continues to be
subject to the default rate of 9.79%, and the outstanding balance
under the Company's revolver continues to be subject to a default
rate of 5.82%.
GENCORP INC: Reports $6.80 Million Net Income in Fiscal 2010
------------------------------------------------------------
GenCorp Inc. filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K for the fiscal year
ended November 30, 2010. The Company reported net income of
$6.80 million on $857.90 million of net sales for the year ended
November 30, 2010, compared with net income of $52.20 million on
$795.40 million of net sales during the prior year.
The Company's balance sheet at November 30, 2010, showed
$991.50 million in total assets, $1.19 billion in total
liabilities and $200.20 million in total shareholders' deficit.
A full-text copy of the Annual Report is available for free at:
http://ResearchArchives.com/t/s?72ec
About GenCorp Inc.
Rancho Cordova, Calif.-based GenCorp Inc. (NYSE: GY)
-- http://www.GenCorp.com/-- is a manufacturer of aerospace and
defense products and systems with a real estate segment that
includes activities related to the re-zoning, entitlement, sale,
and leasing of the Company's excess real estate assets.
* * *
Standard & Poor's in February 2011 has raised its corporate credit
rating on GenCorp Inc. to 'B' from 'B-'. S&P also raised its
rating on the company's first-lien secured debt to 'BB-' from 'B+'
and on the subordinated debt to 'CCC+' from 'CCC'. The recovery
rating on the first-lien secured debt remains unchanged at '1',
and the recovery rating on the subordinated debt remains unchanged
at '6'. The outlook is stable.
"We are raising its ratings on GenCorp by one notch to reflect the
company's improved liquidity position," said Standard & Poor's
credit analyst Lisa Jenkins. "The ratings on GenCorp reflect its
highly leveraged capital structure, weak financial performance,
limited diversity, and modest scale of operations compared with
competitors. Offsetting these challenges to some extent is the
company's good niche positions in aerospace propulsion and solid
backlog. S&P characterize GenCorp Inc.'s business profile as weak
and its financial profile as highly leveraged."
GERARD TROOIEN: U.S. Trustee Wants Case Converted to Chapter 7
--------------------------------------------------------------
Jennifer Bjorhus at the Star Tribune reports that a U.S. Trustee
overseeing the case of Jerry Trooien asked a federal bankruptcy
court to convert his Chapter 11 case to Chapter 7 liquidation
proceeding, saying the Mr. Trooien now has nothing of significant
value except his stake in a small software company.
According to the Star Tribune, the sale of Nazca Solutions Inc.,
the Minneapolis-based software company co-founded by Ted Mondale,
will bring Mr. Trooien about $2.4 million and represents
Mr. Trooien's "only apparent asset of any value."
A hearing is set for Feb. 17, 2011, to consider the U.S. Trustee's
conversion request.
Based in St. Paul, Minnesota, Gerald Trooien aka Jerry Trooien
filed for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case
No. 10-37695) on Oct. 25, 2010. Judge Nancy C. Dreher presides
over the case. Douglas W. Kassebaum, Esq., and James L. Baillie,
Esq., at Fredrikson & Byron, P.A., represents the Debtor. The
Debtor estimated assets between $1 million and $10 million, and
debts between $100 million and $500 million.
GREENWOOD POINT: Court Confirms Revised Reorganization Plan
-----------------------------------------------------------
Bankruptcy Judge Anthony J. Metz, III, issued an order confirming
Greenwood Point, LP's Revised Plan of Reorganization filed
October 15, 2010, over the objection of CWCapital Asset
Management, LLC.
Plan Summary
The Plan provides for seven classes of claims and interests:
(i) Class 1 -- Allowed Secured Claim of CWCapital, in the
approximate amount of $4,514,896;
(ii) Class 2 -- Administrative Claims (Bankruptcy Court Costs
and Professional Fees), in the approximate amount of
$185,000;
(iii) Class 3 -- Administrative Operating Expenses, in the
approximate amount of $25,000;
(iv) Class 4 -- Secured Tax Claim, in the approximate amount
of $155,285;
(v) Class 5A -- Allowed Non-Priority Unsecured Claim of
CWCapital, in the approximate amount of $2,376,993;
(vi) Class 5B -- Allowed Non-Priority Unsecured Claims, in the
approximate amount of $54,505;
(vii) Class 6 -- Equity Interests.
Class 2 and 3 administrative claims are being paid in full, are
not impaired, and are deemed to have accepted the Plan. There is
no distribution on account of Class 6 (equity) and it is deemed to
have rejected the Plan. The Plan further provides for the
cancellation of all current Class 6 equity interests of the Debtor
and the issuance by the reorganized debtor of new equity interests
to new limited and general partners owned by Mary Clare for a
capital infusion of $100,000.
The Plan provides that Classes 1, 4, 5A and 5B are impaired are
therefore entitled to vote on the Plan. The Plan proposes to pay
CWCapital's Class 1 secured claim valued at $4,514,896, over 10
years, with a 20-year amortization, interest at 6.25% and a
balloon payment at the end of the 10 years, pursuant to an amended
and restated promissory note, mortgage and assignment of leases
and rents. It proposes to pay the principal amount of the Class 4
secured tax claim 10 days after the effective date, with interest
payment of $12,422.80 (but calculated by CWCapital to be
approximately $1,000) to be made over the subsequent two months.
The Plan proposes to distribute $0.15 per dollar to the Class 5A
and Class 5B unsecured claims, which amount would be spread over a
period of four and one-half years. Of the four impaired classes
of creditors, classes 1 and 5A (CWCapital's secured claim and
unsecured deficiency claim) voted to reject the Plan. Impaired
classes 4 and 5B voted to accept the Plan. Class 4 (secured tax
claim) consists solely of the Marion County Treasurer and Class 5B
consists of unsecured claims (other than CWCapital's deficiency
claim) totaling approximately $54,505.
Among the Class 5B creditors is Robert Gracey -- a business
acquaintance of George Broadbent, who holds a 99% limited partner
equity interest in the Debtor -- who holds a general unsecured
claim of $1662.50 and purchased the unsecured claims of Varsity
Contractors ($4640.00), Indianapolis Water Company ($66.94) and
Citizens Gas ($722.07). The Gracey Claim and the Gracey Purchased
Claims voted to accept the Plan. Jeffrey Roberts, an employee of
The Broadbent Company, which manages the Debtor, filed a claim for
$11,001.10 and voted to accept the Plan. Hittle Landscaping
($1302.76), Mission Mechanical ($3902.88) and Hutchinson Signs
($514.98) all voted to accept the Plan. Broadbent Company also
filed a claim ($25,206.50) and voted to accept the Plan, but the
parties agree that this vote cannot be counted for voting purposes
because Broadbent Company is an "insider" as defined under Section
101(31)(B).
CWCapital purchased the claims of class 5B creditors Indianapolis
Power and Light ($4678.00) and Roto-Rooter ($806.90) and voted to
reject the Plan.
CWCapital's Plan Objections
CWCapital Asset Management, LLC, serves as Special Servicer for
Bank of America, N.A., as successor by merger to LaSalle Bank,
National Association, as Trustee for the registered holders of
LB-UBS Commercial Mortgage Trust 2000-C4, Commercial Mortgage
Pass-Through Certificates, Series 2000-C4.
CWCapital objects to confirmation of the Plan on the basis that
(1) the Debtor impermissibly separately classified CWCapital's
unsecured deficiency as Class 5A to obtain the acceptance of Class
5B in order to obtain plan confirmation; (2) Class 5B does not
have sufficient votes to accept the Plan as (a) the Gracey Claim
and the Gracey Purchased Claims should not be counted because Mr.
Gracey is an insider or agent of the Debtor, or at the least, a
non-statutory insider, and that the claims were filed in bad
faith, (b) the Roberts Claim is not owed by the Debtor and
therefore should not be counted, and (c) certain vendor claims in
Class 5B were either paid by the Debtor or were for work not done;
(3) the Class 4 claim of the Marion County Treasurer is not
impaired or, in the alternative, is artificially impaired because
the Plan delays payment of interest on the secured claim by two
months; (4) the Plan violates the absolute priority rule as it
allows Mary Clare, an insider, to obtain an equity interest in the
Reorganized Debtor before all general unsecured claims are paid in
full and (5) the Plan was filed in bad faith.
CWCapital filed timely proof of claim no. 7 asserting a secured
claim for $6,891,889.00 arising out of its September 16, 1999
note, mortgage, and guaranty with the Debtor. The Debtor
bifurcated CWCapital's claim under the Plan. The secured
component is classified in Class 1 as an impaired secured claim
for $4,514,896; the unsecured deficiency is classified in Class 5A
as an impaired unsecured claim for $2,376,993.00. Class 5B
consists of general unsecured claims totaling approximately
$55,000.
A copy of Judge Metz's February 4, 2011 confirmation order is
available at http://is.gd/RuVNlhfrom Leagle.com.
About Greenwood Point
Greenwood Point, LP, owns a retail shopping center containing
approximately 136,000 square feet of gross leasable space located
at 8010-8040 U.S. 31 South, Indianapolis, Indiana and other
property. The Property is subject to a Mortgage and Security
Agreement and Assignment of Leases and Rents currently held by the
Trust. The Mortgage and Assignment of Leases and Rents secure a
loan for $7,650,000 made pursuant to Promissory Note held by the
Trust. The Trust also holds a Guaranty of Recourse Obligations
provided by Greenwood Point. The Note matured on October 1, 2009,
after which CWCapital, on behalf of the Trust, sued Greenwood
Point in the Marion Superior Court for the appointment of a
receiver. On January 20, 2010, the day on which the state court
was to hold a hearing on the CWCapital's receivership motion,
Greenwood Point filed for Chapter 11 bankruptcy (Bankr. S.D. Ind.
Case No. 10-00569).
The Debtor is an Indiana limited partnership formed in 1998 in
which George Broadbent a 99% limited partner equity interest and
Greenwood Point Management, Inc. holds a 1% general partner equity
interest. Mr. Broadbent is the sole owner of Greenwood Point
Management, Inc. The Debtor has no employees and is managed by
The Broadbent Company. TBC was owned by George until March 2010
when he transferred it to his wife, Mary Clare Broadbent for
$50,000.
GYMBOREE CORPORATION: Amendment Won't Affect Moody's 'B2' Ratings
-----------------------------------------------------------------
Moody's Investors Service commented that The Gymboree
Corporation's announcement that it intends to amend its existing
$820 million secured term loan and that it expects a Q4 2010
EBITDA decline of approximately $5-8 million from Q4 of 2009 has
no immediate impact on the company's ratings or stable outlook.
Gymboree's Corporate Family and Probability of Default Ratings are
B2, and its secured term loan is rated B1.
The last rating action on Gymboree was on November 2, 2010, when a
first-time Corporate Family Rating of B2 was assigned to the
company.
Headquartered in San Francisco, California, Gymboree operates more
than 1000 retail stores under Gymboree, Gymboree Outlet, Janie and
Jack, and Crazy 8 brands. Revenues for the most recent LTM period
was in excess of $1.0 billion.
HAMPTON ROADS: To File Quarterly and Year End Results on March 9
----------------------------------------------------------------
Hampton Roads Bankshares, Inc., the holding company for Bank of
Hampton Roads and Shore Bank, announced that it will release
fourth quarter and year-end results for 2010 on Wednesday,
March 9, 2011, after the market closes.
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR)
-- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Yount, Hyde & Barbour, P.C., in Winchester, Va., expressed
substantial doubt about the Company's ability to continue as a
going concern in its report on the Company's restated consolidated
financial statements for the year ended December 31, 2009. The
independent auditors noted that quantitative measures established
by regulation to ensure capital adequacy require the Company and
its subsidiary banks to maintain minimum amounts and ratios of
total and Tier I capital to risk-weighted assets, and Tier I
capital to average assets. In addition, the Company has suffered
recurring losses from operations and declining levels of capital.
Hampton Roads Bankshares reported a net loss of $84.5 million on
$17.9 million of net interest income for the three months ended
September 30, 2010, compared with a net loss of $13.4 million on
$26.5 million of net interest income for the same period last
year.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company said in its Form 10-Q for the September 2010 quarter
that due to its financial results, the substantial uncertainty
throughout the U.S. banking industry, and the Written Agreement
the Company and BOHR have entered into, doubts existed regarding
the Company's ability to continue as a going concern through the
second quarter of 2010. However, management believes this concern
has been mitigated by the initial closing of the Private Placement
that occurred on September 30, 2010.
HOLO RETAIL: Golf USA Sent to Chapter 11 Last Month
---------------------------------------------------
The Wichita Eagle reports that Golf USA owner Howard Love has
filed Chapter 11 bankruptcy for the Golf USA store in Mulvane,
Kansas, he closed in Derby in December 2010. The bankruptcy
filing does not stipulate how much Love owes except that it is
between $100,001 and $500,000. Mr. Love opened Golf USA of Newton
at Chisholm Trail Center-Outlet & Retail Shops in 2008.
Holo Retail Sports Inc., doing business as Golf USA of Derby and
Golf USA Derby, filed a Chapter 11 petition (Bankr. D. Kan. Case
No. 11-10050), in Wichita, Kansas, on Jan. 12, 2011.
Christopher W. O'Brien, Esq. -- cobrien@bdolaw.com -- at Brown,
Dengler & O'Brien, LLC, in Wichita, represents the Debtor. The
Debtor estimated assets and debts of $100,000 to $500,000 in the
Chapter 11 petition. Howard Love, as president, signed the
petition.
GENERAL MARITIME: Sells Two Product Tankers for $41.1 Million
-------------------------------------------------------------
General Maritime Corporation announced that it has completed the
previously announced sale of the first two of three product
tankers, the 2004-built Genmar Concord and the 2005-built Stena
Contest, to affiliates of Northern Shipping Fund Management
Bermuda, Ltd. General Maritime received net proceeds of $41.1
million for the two vessels. As previously announced, General
Maritime expects to complete the sale of the third product tanker,
the 2005-built Stena Concept, to an affiliate of Northern Shipping
by February 15, 2011, generating net proceeds of $21.0 million.
Upon completing the sale of the Stena Concept, General Maritime
will have received net proceeds of $61.7 million, from this
transaction. General Maritime expects to use the proceeds from
the vessel sales to repay the Company's $22.8 million bridge loan
in the first quarter of 2011.
In connection with the sales of the Genmar Concord and the Stena
Contest, the two vessels have been leased backed to General
Maritime under previously announced bareboat charters entered into
with the purchasers for a period of seven years at a rate of
$6,500 per day per vessel for the first two years of the charter
period and $10,000 per day per vessel for the remainder of the
charter period. Upon completing the sale of the Stena Concept,
General Maritime expects to enter into a seven year bareboat
charter with the purchasers under the same terms as the Genmar
Concord and Stena Contest.
As previously announced, General Maritime will have options to
repurchase the three vessels for $24 million per vessel at the end
of year two of the charter period, $21 million per vessel at the
end of year three of the charter period, $19.5 million per vessel
at the end of year four of the charter period, $18 million per
vessel at the end of year five of the charter period, $16.5
million per vessel at the end of year six of the charter period,
and $15 million per vessel at the end of year seven of the charter
period.
In connection with the three vessel transaction, the Stena Concept
and the Stena Contest will continue to be employed on time
charters as previously disclosed by General Maritime at an
adjusted rate of $15,000 per day per vessel effective upon closing
of the sale and leaseback transaction through the expiration of
the time charters on July 4, 2011. The Genmar Concord is also
expected to remain on its current time charter.
About General Maritime Corp.
Based in New York City, General Maritime Corporation through its
subsidiaries provides international transportation services of
seaborne crude oil and petroleum products. The Company's fleet is
comprised of VLCC, Suezmax, Aframax, Panamax and product carrier
vessels. The Company operates its business in one business
segment, which is the transportation of international seaborne
crude oil and petroleum products. The Company's vessels are
primarily available for charter on a spot voyage or time charter
basis.
Standard & Poor's Ratings Services in December 2010 lowered its
long-term corporate rating on General Maritime Corp. to 'CCC+'
from 'B', and placed the ratings on CreditWatch with negative
implications. At the same time, S&P lowered its ratings on the
company's senior unsecured notes to 'CCC-', two notches below the
new corporate credit rating; the recovery rating of '6', which
indicates S&P's expectation that lenders will receive a negligible
(0%-10%) recovery in a payment default scenario, remains
unchanged.
"The downgrade reflects General Maritime's weak liquidity, very
limited financial covenant headroom (despite recent amendments),
and deterioration in its financial profile," said Standard &
Poor's credit analyst Funmi Afonja. "As of Sept. 30, 2010,
General Maritime had no borrowing availability under its
$749.8 million revolving credit facility and $8.7 million in
unrestricted cash, after factoring financial covenant limitations.
In S&P's opinion, the recent financial covenant amendments do not
provide sufficient covenant headroom, and there is still a high
probability of a covenant breach over the next quarter. If there
is a covenant breach, lenders can require the immediate payment
of all amounts outstanding. General Maritime's liquidity is
further constrained by significant upcoming debt maturities,
including $27.5 million in scheduled principal payments due in
2011 under its term loan, $50.1 million semiannual reduction on
the revolver, beginning on April 26, 2011, and a bullet payment
of $599.6 million in October 2012, when the facility expires.
General Maritime also has a $22.8 million bridge loan facility
that matures in October 2011. Cash interest payments on the
bridge loan will increase if the company is unable to pay off the
loan by Dec. 31, 2010."
GREAT ATLANTIC & PACIFIC: GHI Says Pact Rejection Premature
-----------------------------------------------------------
Grocery Haulers Inc. asks the Court to deny approval of the
proposed rejection of its trucking agreement with the Debtors.
As reported in the Feb. 2, 2011 edition of the Troubled Company
Reporter, the Great Atlantic & Pacific Tea Company Inc. and its
affiliated debtors seek the Bankruptcy Court's permission to walk
away from their executory contract with Grocery Haulers Inc. The
contract, which expires on February 1, 2014, was originally
executed by Pathmark Inc. and Grocery Haulers in 1997, and was
assumed by the Debtors after acquiring Pathmark in 2007. Pathmark
tapped the services of Grocery Haulers to transport merchandise to
its grocery stores from the distribution centers in Woodbridge,
New Jersey, run by its supplier, C&S Wholesale Grocers Inc.
"The Debtors' rejection of the contract will enable them to enter
into new interim transportation and trucking logistics
arrangements that will immediately save their estates significant
operating capital," says the Debtors' lawyer, Ray Schrock, Esq.,
at Kirkland & Ellis LLP, in New York.
In response, counsel to Grocery Haulers, James Carr, Esq., at
Kelley Drye & Warren LLP, in New York -- jcarr@kelleydrye.com --
says the proposed rejection is premature, pointing out that the
Court cannot yet determine whether it is appropriate or not.
Mr. Carr says the Debtors have not yet found an alternative
supplier for the services being provided by GHI.
"Without an alternative agreement to measure against the trucking
agreement, the Court cannot determine whether rejection is
appropriate and will ultimately benefit the Debtors and their
estates," Mr. Carr says.
"GHI and this Court should be given the right to weigh the
benefits and burdens of rejection when the Debtors have an
alternative agreement," GHI's lawyer further says. He adds that
the services, whether provided by GHI, another supplier, or some
other entity, are essential to the continued operation of the
Debtors' business.
Mr. Carr says that in case the proposed rejection is approved by
the Court, the Debtors should comply with the 90-day notice
requirement of the trucking agreement to allow GHI to conduct an
orderly wind-down of its operations and to give its employees
enough time to find new jobs.
The proposed rejection also drew flak from Local Union 863, which
serves as representative to about 250 GHI employees.
The union has expressed concern that the proposed rejection would
adversely affect not only the livelihood of the employees but
their pension benefits as well.
Local Union 863 has a collective bargaining agreement with GHI,
which provides for pension benefits for the GHI employees. The
employees are participants under the A&P Pension Plan and their
pension benefits are being funded by the Debtors pursuant to the
CBA.
Debtors Respond
The Debtors ask the Court to overrule the objections, saying GHI
and Local Union 863 failed to establish that the rejection of the
contract does not satisfy the "business judgment" standard.
Ray Schrock, Esq., at Kirkland & Ellis LLP, in New York, says
that based on the bids the Debtors received from potential
alternative suppliers, C&S Wholesale Grocers Inc.'s proposal
could help the Debtors save more than $7 million annually. He
also points out that unlike the GHI contract, C&S Wholesale's
proposal does not include an annual management fee.
"C&S' proposal represents the less-costly replacement that GHI
contends would satisfy the Debtors' burden of showing that
rejection will benefit the Debtors' estates," Mr. Schrock says in
court papers.
In response to arguments that the Debtors should be required to
provide a 90-days' advance notice and that the proposed rejection
would affect the GHI employees, Mr. Schrock points out that the
Debtors are not the employer of GHI or its workers and that they
are not rejecting any CBA in connection with the proposed
rejection of the trucking agreement.
In a related development, the Debtors sought and obtained a court
order allowing them to file the trucking agreement under seal.
The Debtors were ordered not to disseminate the trucking
agreement to anyone other than the Court, the professionals
retained by the Official Committee of Unsecured Creditors,
counsel to the agent for the postpetition secured lenders and the
U.S. Trustee without further court order or consent of GHI and
the Debtors.
The Creditors Committee's professionals were prohibited from
disclosing the content of the trucking agreement to any of its
members.
About A&P
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific (A&P) is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
The Great Atlantic & Pacific Tea Company, Inc., and its affiliates
filed petitions under Chapter 11 of the U.S. Bankruptcy Code on
December 12, 2010 (Bankr. S.D.N.Y. Case No. 10-24549) in White
Plains.
As of September 11, 2010, the Debtors reported total assets of
$2.5 billion and liabilities of $3.2 billion.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes ATLANTIC & PACIFIC
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by A&P and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
GULF INSURANCE: A.M. Best Cuts Financial Strength Rating to 'B'
---------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to B
(Fair) from B++ (Good) and issuer credit rating to "bb+" from
"bbb" of Gulf Insurance Limited (Gulf) (Trinidad and Tobago).
Both ratings remain under review with negative implications.
The rating downgrades and under review status reflects the
inability of Gulf's parent company, Gillani Limited (Gillani), to
conclude efforts to restructure its capitalization in order to
reduce Gillani's financial leverage and improve its quality of
capital. Gulf's balance sheet has deteriorated as a result of the
continuing burden to service the excessive levels of debt at
Gillani, as Gulf remains the only source of funds available to
service Gillani's debt. With a significant portion of the debt
coming due in the first quarter of 2011, A.M. Best is concerned
with the uncertainty of the parent's capital restructuring plan
and the potential effects on Gulf's operations, including future
ownership and business retention.
The ratings will remain under review pending either the resolution
of negotiations with bondholders and implementation of Gillani's
capital restructure plan or default on the debt payment due in
February 2011 and ensuing actions by regulators and/or
bondholders. At that time, A.M. Best will review the effects of
Gillani's action on Gulf's ongoing operations and this could
result in further downward rating pressure.
Gulf is a multi-line property/casualty insurer operating in
several Caribbean markets, with its main operating presence in
Trinidad and Tobago, St. Maarten and the British Virgin Islands.
The company has historically reported consistent operating profits
as a result of disciplined underwriting and conservative risk
management and pricing strategies. This has enabled Gulf to
continue to enhance its capitalization, which, at this time
remains adequate for its current business profile when measured by
Best's Capital Adequacy Ratio.
HACIENDA GARDENS: Feb. 17 Hearing on Amended Plan Outline Set
-------------------------------------------------------------
Hacienda Gardens, LLC, filed on January 14, 2011, an amended
disclosure statement explaining its plan of reorganization.
The hearing to consider the adequacy of the disclosure statement
is still set for February 17, 2011, at 11:00 a.m.
As reported in the Troubled Company Reporter on October 26, 2010,
the Plan provides for extension of the obligations currently due
to FHB and Heritage Bank for 36 months each after the Effective
Date (unless repaid paid sooner) with payments continuing at the
contract or other agreed rates of interest. Payments to Chase
Bank will continue without modification.
Unsecured claimants are to receive the Center's net profits for
three years with a minimum dividend paid of $72,000 which will,
depending upon whether the insider claim of Mark Tersini is
voluntarily subordinated or not, provide a dividend of either 8.7%
(if not) to 25.9% if it is and the Rite Aid Lease is not rejected.
Priority and administrative claims, if any, will be paid in full
at the Effective Date unless they agree to another treatment.
Under the Plan, the Debtor will utilize rents from the Center to
operate it and make all required payments under the Plan. To the
extent that the funds are inadequate the Debtor will borrow or its
members will contribute adequate sums to perform the Plan.
The Center is a commercial shopping center situated upon
12.097 acres of land in San Jose, California. Included in this
12.097 acres is approximately 124,246 square feet of commercial
leasable space as well as acreage zoned for a sizeable residential
development.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/HaciendaGardens.AmendedDS.pdf
About Hacienda Gardens, LLC
Cupertino, California-based Hacienda Gardens, LLC, owns and
operates a commercial shopping center in San Jose, California.
The Debtor leases the Center under the Ground Leases from the
Rajkovich Family who own the underlying land.
The Company filed for Chapter 11 bankruptcy protection on May 24,
2010 (Bankr. N.D. Calif. Case No. 10-55423). Heinz Binder, Esq.,
Robert G. Harris, Esq., and Roya Shakoori, Esq., at Binder &
Malter, LLP, in Santa Clara, Calif., represent the Debtor as
counsel. The Company estimated assets and debts at $10 million to
$50 million.
HCA HOLDINGS: Patricia Frist Acquires 319,877 Common Shares
-----------------------------------------------------------
In a Form 5 filing with the U.S. Securities and Exchange
Commission on February 2, 2011, Patricia C. Frist disclosed that
she acquired 319,877 shares of common stock of HCA Holdings, Inc.
on December 27, 2010.
Hercules Holding II, LLC holds 91,845,692 shares of the common
stock of HCA Holdings, Inc. Hercules has issued one unit per
share of HCA Holdings, Inc. that it owns directly. Hercules is
held by a private investor group, including affiliates of Bain
Capital Investors, LLC, Kohlberg Kravis Roberts & Co. L.P. and
Merrill Lynch Global Private Equity, and affiliates of HCA Inc.
founder Dr. Thomas F. Frist, Jr. Ms. Frist may be deemed to be a
member of a group exercising voting and investment control over
the shares of common stock of HCA Holdings, Inc. held by Hercules.
However, Ms. Frist disclaims membership in any such group and
disclaims beneficial ownership of these securities, except to the
extent of his pecuniary interest therein.
Ms. Frist directly owns 45,498 units of Hercules and therefore may
be deemed to own indirectly the same number of shares of common
stock of HCA Holdings, Inc. by virtue of her membership in
Hercules Holding II, LLC. PCF may also be deemed to have indirect
beneficial ownership in respect of 17,261 units of Hercules,
through an indirect pecuniary interest in such units held by her
husband, Thomas F. Frist, Jr., and therefore may be deemed to own
indirectly the same number of shares of common stock of HCA
Holdings, Inc. PCF is the trustee of the Thomas F. Frist, Jr.
2010 Grantor Retained Annuity Trust No. 4 and PCF's husband is the
trustee of the Patricia Champion Frist 2010 Grantor Retained
Annuity Trust No. 2 and PCF may be deemed to be the beneficial
owner of the 319,878 and 319,877 units of Hercules held by these
trusts, respectively, and therefore may be deemed to own
indirectly the same number of shares of common stock of HCA
Holdings, Inc.
PCF may also be deemed to share voting and dispositive power with
respect to 17,804,125 shares of HCA Holdings, Inc. beneficially
owned by Frisco, Inc., by virtue of her position as a director and
officer of Frisco, Inc. Frisco, Inc. has beneficial ownership of
17,804,125 units of Hercules, and therefore may be deemed to own
indirectly the same number of shares of common stock of HCA
Holdings, Inc.
On November 22, 2010, HCA Holdings, Inc. became the successor of
HCA Inc. pursuant to a merger. The merger resulted in HCA
Holdings, Inc. becoming a parent holding company of HCA Inc., but
did not alter the proportionate interests of security holders.
About HCA Inc.
Headquartered in Nashville, Tennessee, HCA is the nation's largest
acute care hospital company with 162 hospitals and 104
freestanding surgery centers (including eight hospitals and eight
freestanding surgery centers that are accounted for using the
equity method) as of September 30, 2010. For the twelve months
ended September 30, 2010, the company recognized revenue in excess
of $30 billion.
The Company's balance sheet at Sept. 30, 2010, showed
$23.25 billion in total assets, $4.33 billion in total current
liabilities, $25.38 billion in long-term debt, $1,03 billion in
professional liability risks, $1.61 billion in income taxes and
other liabilities, and a stockholders' deficit of $9.24 billion.
* * *
In November 2010, Moody's Investors Service confirmed the existing
ratings of HCA, including the 'B2' Corporate Family and
Probability of Default Ratings. Moody's assigned a Caa1 (LGD6,
96%) rating to HCA, Inc.'s proposed offering of $1,525 million of
senior unsecured notes due 2021 to be issued at a parent holding
company.
HCA's 'B2' Corporate Family Rating anticipates that the company
will continue to operate with significant leverage. Pro forma for
the proposed debt financed distribution Moody's estimate that
adjusted leverage would have been 5.2 times at September 30, 2010.
Furthermore, the company has large maturities in 2012 and 2013
that will likely need to be refinanced in the capital markets.
However, the rating acknowledges the company's progress in
systematically extending its maturity profile. Finally, the
rating reflects HCA's solid EBITDA growth, which has benefited the
credit metrics and demonstrated the company's ability to weather
industry pressures.
HOTEL DEL CORONADO: Recapitalization Addresses Looming $630MM Debt
------------------------------------------------------------------
The Wall Street Journal's Kris Hudson reports that Blackstone
Group LP is in and Kohlberg Kravis Roberts & Co. is out as part of
a recapitalization of the Hotel Del Coronado that establishes the
historic beachfront hotel's value at 20% less than it was during
the boom.
The report described the deal as complex. According to the
report, the deal, which was formally outlined by the hotel's
owners Monday, resolves the Del Coronado's pressing matter of
$630 million in debt that was to come due next week. Under the
deal:
* Blackstone gained a 60% stake in the property by
contributing $100 million and converting into equity a
small slice of the hotel's mezzanine debt that it recently
bought at a discount;
* two other members of the ownership group retained stakes in
the hotel, albeit smaller than their previous percentage
ownership, by contributing additional capital;
* Strategic Hotels & Resorts Inc., which previously held a
45% stake in the hotel, retained a 34.5% stake by
contributing $56.6 million;
* KSL Resorts, which manages the Del Coronado and previously
held a 15% stake, retained a 5.5% stake by contributing
$8 million;
* KKR, which previously held a 40% stake, cashed out.
The report says a KKR representative declined to comment on
Monday. KKR first bought into the hotel in 2003.
The report also relates the new partnership of Blackstone,
Strategic and KSL paid off the previous debt, mostly by putting a
$425 million mortgage originated by Deutsche Bank AG on the hotel.
The deal values the hotel at roughly $590 million, whereas it was
valued at $745 million when Strategic bought its stake in 2006.
According to the report, Laurence Geller, chief executive of
Strategic, describes the Del Coronado recap as an artful save for
Strategic and KSL. Mr. Geller also said the ownership group has
municipal approval to build 144 units on the south end of the
resort.
"The alternative to re-equitizing the deal was to go through
bankruptcy and try to extend the debt," Mr. Geller said in an
interview, according to the report. He said the recap "was by far
the better solution. Every penny we're now making on the fresh
investment is very accretive."
The report notes Strategic, a real estate investment trust based
in Chicago, owns 16 high-end hotels and resorts. Blackstone, with
$100 billion of assets under management, is a leading hotel
investor with assets such as Hilton Worldwide Inc. and the La
Quinta Corp. chain.
Hotel Del Coronado -- http://www.hoteldel.com/-- opened in 1888.
The property sits on beachfront land in Coronado, California, near
San Diego.
HURLEY MEDICAL: Moody's Affirms 'Ba1' Rating on $90 Mil. Bonds
--------------------------------------------------------------
Moody's Investors Service has affirmed Hurley Medical Center's Ba1
long-term rating. This action affects approximately $90 million
of outstanding bonds issued through the City of Flint Hospital
Building Authority as listed at the conclusion of this report.
The outlook remains stable.
Ratings Rationale
The affirmation of the Ba1 rating and stable outlook reflect
Moody's expectation that Hurley will continue to sustain adequate
operating results and maintain current levels of unrestricted
liquidity. Continued improvement in operating margins and
material liquidity strengthening may place upward pressure on the
rating.
Legal Security: The bonds are secured by a pledge of net revenues
of the obligated group, as defined in the bond documents. Hurley
is the only member of the obligated group. The bonds are not
secured by the full faith and credit of the City of Flint.
Interest Rate Derivatives: None.
Strengths
* Differentiation of essential high-end tertiary services (e.g.,
burn unit and Level I trauma) generates a strong draw of
patients beyond the City of Flint and Genesee County
* Improved operating performance in recent years leading to
profitability in fiscal year (FY) 2009 and FY 2010, although the
operating cash flow margin remains somewhat modest (4.3%
operating cash flow margin in FY 2010)
* Comparatively good debt coverage measures for a Ba rated credit
(102% cash-to-debt, 4.4 times debt-to-cash flow, and 2.6 times
Moody's adjusted maximum annual debt service coverage in FY
2010)
* Improved liquidity in FY 2009 and FY 2010 as cash on hand
increased to 90 days at fiscal year end (FYE) 2010 from 77 days
at FYE 2009
* Despite generally modest operating margins, Hurley management is
committed to reinvesting in the hospital's physical plant;
Hurley's capital spending ratio has averaged 1.3 times over the
last five years
Challenges
* Located in demographically challenged Flint, MI leads to weak
payor mix with Medicaid representing a high 38% of gross patient
revenues in FY 2010; Hurley relies on special funding from the
state (such as Medicaid disproportionate share), which accounts
for a sizeable share of cash flow ($61 million in FY 2010
according to management); while these funding sources
demonstrate significant public policy support from the state,
Moody's views these revenues as "at risk" and any contraction of
these funds will require commensurate cost reductions
* Vulnerable economy in Michigan threatens Medicaid budget and
other state healthcare funding programs on which Hurley depends
* Competitive service area, with the presence of two like-sized
competitors in the immediate Flint area, both of which are part
of larger healthcare systems
* Underfunded defined benefit pension plan (Hurley employees
participate in either the City of Flint pension or State of
Michigan pension); at FYE 2010, Hurley's portion of the pensions
was 72% funded relative to an actuarial accrued liability of
$497 million
* Heavily unionized workforce as Hurley employees are represented
by nine different unions
Recent Developments/Results
Moody's views Hurley's location in Flint, Michigan with concern,
as the city's economy has been challenged for years. Hurley, a
component unit of the City of Flint, is a 21,400 admission
tertiary regional referral center. General Motors has had a
sizeable presence in Flint. The city is characterized by a
declining industrial base, high unemployment rate, a low median
income level, and population decline. Accordingly, Hurley's payor
mix is weak, as Medicaid represented a high 38% of gross revenues
in FY 2010.
In addition to poor demographics, Hurley faces strong competition
in the area. Hurley's primary competitors are Genesys Regional
Medical Center (a member of Aa1 rated Ascension Health) and
McLaren Regional Medical Center (a member of Aa3 rated McLaren
Health Care). According to Hurley management, Genesys is the
market leader in the primary service area -- defined as Genesee
County -- with approximately 31.5% market share in 2009, while
Hurley and McLaren captured 28.5% and 29.0%, respectively.
Moody's notes that Hurley continues to have a number of
cooperative joint ventures with both Genesys and McLaren. Moody's
notes favorably that despite these demographic challenges, Hurley
management has recorded improved operating margins in recent
years.
Hurley has service differentiation as the only market provider of
high-end essential services in the broader region such as a burn
unit, Level I trauma, and neonatal intensive care unit. As a
result, Hurley has a regional draw for services beyond Flint and,
according to management, more than 40% of Hurley's admissions come
from outside of the city. Favorably, demographics outside the
city are more favorable, as Genesee County (general obligation
limited tax rating of A1) is characterized by a median income
level more in-line with the state average and flat population
trends (compared to much more modest demographics in the City of
Flint, based on US Census data).
Hurley's operating performance has improved recent years leading
to profitability in FY 2009 and FY 2010. In audited FY 2010 (June
30 year end), Hurley recorded operating income of $2.2 million
(0.6% operating margin) and operating cash flow of $17.1 million
(4.3% operating cash flow margin). In audited FY 2009, Hurley
recorded operating income of $0.3 million (0.1% margin) and
operating cash flow of $16.1 million (4.2% margin). While still
somewhat modest, operating performance has improved since FY 2006
when Hurley recorded a $16.8 million operating loss (-5.1% margin)
and $1.7 million negative operating cash flow (-0.5% margin).
The continued improvement in FY 2010 is due to a number of
factors, including: (a) a nearly 45% increase in observation stays
that helped to offset a 2.3% decrease in inpatient admissions
(which resulted in a 0.9% increase in total admissions); (b) the
Medicare case mix index increased to 1.61 in FY 2010 from 1.57 in
FY 2009, which management attributes to Hurley admitting more
severe cases and improved coding; (c) a hospitalist program has
contributed to the average length of stay declining to 5.01 days
in FY 2010 from 5.14 days in FY 2009; and (d) a 3.1% increase in
outpatient surgeries (although Moody's notes that total surgeries
declined 1.1%).
Through six months FY 2011, Hurley recorded an adjusted operating
loss margin of 0.4% and operating cash flow margin of 3.5%
(adjusted to reclassify interest expense and bad debt as operating
expenses), compared to 0.5% and 4.5%, respectively, for the same
period FY 2010. Management notes that Hurley continues to face
declines in inpatient admissions (which are down 8.0% through six
months FY 2011). For full year FY 2011, management has budgeted
an adjusted operating margin of 1.0%.
As a result of improved cash flow in FY 2010 and a comparatively
low debt load relative to Hurley's revenue base (23% debt-to-total
operating revenue), Hurley's debt ratios are good for a Ba rated
credit. Based on FY 2010 results, Moody's adjusted debt-to-cash
flow measured 4.4 times (Ba median is 5.8 times) and Moody'
adjusted maximum annual debt service coverage measured an adequate
2.6 times (Ba median is 2.4 times).
Due to improved cash flow generation and the use of bond proceeds
to finance construction in FY 2010, Hurley's unrestricted cash
position improved in FY 2010. At FYE 2010, absolute unrestricted
cash and investments increased to $94.3 million from $78.6 million
at FYE 2009. As a result, cash on hand improved to a good 90 days
at FYE 2010 from 77 days at FYE 2009 (Ba median is 67 days).
Cash-to-debt moderated in FY 2010 due to the issuance of the
Series 2010 fixed rate bonds, declining to a still good 102% at
FYE 2010 from 130% at FYE 2009 (Ba median is 65%). According to
management, 100% of Hurley's unrestricted cash and investments are
allocated to cash, cash equivalents, and government fixed income
securities.
Outlook
The stable outlook reflects Moody's expectation that Hurley will
continue to sustain adequate operating results and maintain
current levels of unrestricted liquidity.
What could change the rating -- Up
Sustained improvement in cash flow generation leading to improved
debt ratios; continued liquidity strengthening; significant market
share gain
What could change the rating -- Down
Material decline in liquidity measures; failure to sustain recent
levels of operating margins; unexpected increase in debt without
commensurate growth in cash flow
Key Indicators
Assumptions & Adjustments:
-- Based on Hurley Medical Center consolidated financial
statements
-- First number reflects consolidated audited FY 2009 for the
year ended June 30, 2009
-- Second number reflects consolidated audited FY 2010 for the
year ended June 30, 2010
-- Bad debt expense and interest expense classified as operating
expenses
-- Investment returns smoothed at 5%
* Inpatient admissions: 21,948; 21,438
* Total operating revenues: $387 million; $396 million
* Moody's-adjusted net revenues available for debt service:
$24.3 million; $24.6 million
* Total debt outstanding: $60.4 million; $92.5 million
* Maximum annual debt service (MADS): $6.6 million; $9.4 million
* MADS Coverage with reported investment income: 3.25 times; 2.04
times
* Moody's-adjusted MADS Coverage with normalized investment
income: 3.67 times; 2.62 times
* Debt-to-cash flow: 2.95 times; 4.42 times
* Days cash on hand: 76.6 days; 89.9 days
* Cash-to-debt: 130%; 102%
* Operating margin: 0.1%; 0.6%
* Operating cash flow margin: 4.2%; 4.3%
Rated Debt:
Issued through City of Flint Hospital Building Authority (debt
outstanding as of June 30, 2010):
* Series 1998A Fixed Rate Hospital Revenue Bonds ($11.3 million
outstanding), rated Ba1
* Series 1998B Fixed Rate Hospital Revenue Bonds ($16.3 million
outstanding), rated Ba1
* Series 2003 Fixed Rate Hospital Revenue Bonds ($29.7 million
outstanding), rated Ba1
* Series 2010 Fixed Rate Hospital Revenue Bonds ($35.2 million
outstanding), rated Ba1
The last rating action with respect to Hurley was on February 23,
2010, when a municipal finance scale rating of Ba1 was assigned
and affirmed and the outlook was stable. That rating was
subsequently recalibrated to Ba1 on May 7, 2010.
INSIGHT HEALTH: Deregisters Unsold Notes in Prepetition Offerings
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Pursuant to the undertaking of the InSight Health Services Corp.
contained in the Registration Statement on Form S-4 (SEC File No:
333-129318), the Company and additional registrants are filing
this Post-Effective Amendment No. 1 to the Registration Statement
to deregister any and all remaining unsold securities covered by
the Registration Statement.
The Registrants are also filing this Post-Effective Amendment No.
1 to the Registration Statement to deregister any and all
remaining unsold securities covered by the Registration Statement
on Form S-4 (SEC File No: 333-146397).
The Registrants are also filing this Post-Effective Amendment No.
1 to the Registration Statement to deregister any and all
remaining unsold securities covered by the Registration Statement
on Form S-1 (SEC File No: 333-146399).
The additional registrants are:
InSight Health Services Holdings Corp.
Insight Health Corp.
Orange County Regional PET Center-Irvine, LLC
Parkway Imaging Center, LLC
Comprehensive Medical Imaging, Inc.
Comprehensive Medical Imaging Centers, Inc.
Signal Medical Services, Inc.
Maxum Health Services Corp.
Open MRI, Inc.
On January 28, 2011, the United States Bankruptcy Court for the
Southern District of New York entered an order confirming the
Prepackaged Joint Chapter 11 Plan of Reorganization of Insight
Health Services Holdings Corp. and its affiliated debtors. As
contemplated by the Plan, the securities registered under this
Registration Statement will be canceled on the effective date of
the Plan.
About Insight Health
InSight Health Services Holdings Corp. provides diagnostic medical
imaging services through a network of fixed-site centers and
mobile facilities. Its services-including magnetic resonance
imaging, positron emission tomography and computed tomography,
traditional computed tomography, mammography, bone densitometry,
ultrasound and x-ray-are noninvasive procedures that generate
representations of internal anatomy on film or digital media,
which are used by physicians for the diagnosis and assessment of
diseases and other medical conditions. The Company operates in
more than 30 states and target specific regional markets.
Insight Health Services Holdings Corp. and its affiliate, InSight
Health Services Corp., sought Chapter 11 protection (Bankr. D.
Del. Case Nos. 07-10700 and 07-10701) on May 29, 2007, with a
prepackaged bankruptcy plan that was confirmed on July 10, 2007,
and declared effective on August 1, 2007.
InSight Health Services Holdings Corp. made a second trip to the
bankruptcy court (Bankr. S.D.N.Y. Lead Case No. 10-16564) on
Dec. 10, 2010, with another prepackaged Chapter 11 plan of
reorganization Sixteen affiliates also filed for Chapter 11
protection.
InSight is represented by Edward O. Sassower, Esq., James H.M.
Sprayregan, Esq., and Ryan Blaine Bennett, Esq., at Kirkland &
Ellis LLP. Zolfo Cooper is the Debtors' financial advisor, and
BMC Group Inc. is the claims and noticing agent.
Chris L. Dickerson, Esq. -- chris.dickerson@skadden.com -- and
Matthew M. Murphy, Esq. -- matthew.murphy@skadden.com -- at
Skadden, Arps, Slate, Meagher & Flom LLP in Chicago, Ill.,
represent an ad hoc group of Noteholders in the Debtors' cases.
The Debtors' prepetition secured lenders are represented by C.
Edward Dobbs, Esq. -- edobbs@phrd.com -- at Parker, Hudson, Rainer
& Dobbs LLP in Atlanta, Ga.
INSIGHT HEALTH: Files Notice of Suspension of Duty to File Reports
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InSight Health Services Holding Corporation filed on Friday on
Form 15-15D a certification and notice of termination of
registration under Section 12(g) or suspension of duty to file
reports pursuant to Section 13 and 15(d) of the Securities
Exchange Act of 1934 covering its Senior Secured Floating Rate
Notes due 2011, and Common Stock, par value $0.001 per share.
A full-text copy of the Form 15-15D is available for free at:
http://researcharchives.com/t/s?72e9
About Insight Health
InSight Health Services Holdings Corp. provides diagnostic medical
imaging services through a network of fixed-site centers and
mobile facilities. Its services-including magnetic resonance
imaging, positron emission tomography and computed tomography,
traditional computed tomography, mammography, bone densitometry,
ultrasound and x-ray-are noninvasive procedures that generate
representations of internal anatomy on film or digital media,
which are used by physicians for the diagnosis and assessment of
diseases and other medical conditions. The Company operates in
more than 30 states and target specific regional markets.
Insight Health Services Holdings Corp. and its affiliate, InSight
Health Services Corp., sought Chapter 11 protection (Bankr. D.
Del. Case Nos. 07-10700 and 07-10701) on May 29, 2007, with a
prepackaged bankruptcy plan that was confirmed on July 10, 2007,
and declared effective on August 1, 2007.
InSight Health Services Holdings Corp. made a second trip to the
bankruptcy court (Bankr. S.D.N.Y. Lead Case No. 10-16564) on
Dec. 10, 2010, with another prepackaged Chapter 11 plan of
reorganization Sixteen affiliates also filed for Chapter 11
protection.
InSight is represented by Edward O. Sassower, Esq., James H.M.
Sprayregan, Esq., and Ryan Blaine Bennett, Esq., at Kirkland &
Ellis LLP. Zolfo Cooper is the Debtors' financial advisor, and
BMC Group Inc. is the claims and noticing agent.
Chris L. Dickerson, Esq. -- chris.dickerson@skadden.com -- and
Matthew M. Murphy, Esq. -- matthew.murphy@skadden.com -- at
Skadden, Arps, Slate, Meagher & Flom LLP in Chicago, Ill.,
represent an ad hoc group of Noteholders in the Debtors' cases.
The Debtors' prepetition secured lenders are represented by C.
Edward Dobbs, Esq. -- edobbs@phrd.com -- at Parker, Hudson, Rainer
& Dobbs LLP in Atlanta, Ga.
As reported in the Troubled Company Reporter on February 1, 2011,
the United States Bankruptcy Court for the Southern District of
New York entered, on January 28, 2011, an order confirming the
Prepackaged Joint Chapter 11 Plan of Reorganization of Insight
Health Services Holdings Corp. and its affiliated debtors.
Under the plan, the Debtors' senior secured notes will be
converted into equity.
INT'L COMMERCIAL: Investors Exercise Warrants at $0.10 Per Share
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International Commercial Television Inc. issued a total of
1,600,000 shares of its common stock and an equal number of
Warrants in a private placement of common stock and warrants in
December 2007. In the purchase agreement, the investors bought
their stock at $2.20 per share, received warrants to purchase an
equal number of shares at $3.00 per share, and were granted
certain anti-dilution rights, which would essentially re-price
their purchase if the Company later sold shares at a lower price.
At the Company's current stock price, the anti-dilution provisions
essentially precluded its raising capital through sales of the
Company's stock.
In order to prepare for recapitalizing the company, the Company
requested that the investors waive their anti-dilution rights.
One of the requirements for the Company to obtain the requested
waivers was to reduce the warrant exercise price to more closely
reflect its current stock price. The result of the Company's
negotiations with the investors was a reduction in the warrant
exercise price to $.10 per share for those warrants exercised
promptly, and a reduction in the warrant exercise price to $.40
per share for most of the remaining warrants.
Beginning as of January 6, 2011, various warrant holders began
exercising their warrants at $.10 per share. As of February 2,
2011, a total of 941,791 warrants have been exercised, with
proceeds of $94,179 received by the company. The Company expects
that additional warrants will be exercised in the near term,
bringing the total number of warrants exercised to approximately
1,125,000, bringing a total of approximately $112,500 in proceeds
to the company.
The issuance of stock upon exercise of the warrants is exempt from
registration under Section 4(2) of the Securities Act of 1933. A
total of 14 warrant holders have exercised, or indicated that they
intend to exercise, their warrants. Each of the warrant holders
is an accredited investor, and the shares certificates issued upon
exercise bear a restrictive transfer legend.
About International Commercial
Bainbridge Island, Wash.-based International Commercial Television
Inc. was organized under the laws of the State of Nevada on
June 25, 1998. The Company sells various consumer products. The
products are primarily marketed and sold throughout the United
States and internationally via infomercials.
As reported in the Troubled Company Reporter on June 25, 2010,
Amper, Politziner & Mattia LLP, in Edison, N.J., expressed
substantial doubt about the Company's ability to continue as a
going concern, following its 2009 results. The independent
auditors noted of the Company's recurring losses from operations
and negative cash flows.
The Company's balance sheet at Sept. 30, 2010, showed $911,500 in
total assets, $1.78 million in total liabilities, and a
stockholders' deficit of $878,000.
The Company's consolidated financial statements have been
prepared assuming the Company will continue as a going concern.
The Company noted that it generated negative cash flows from
operating activities in the nine month period ended September 30,
2010 of approximately $245,000, and the Company, for the most
part, has experienced recurring losses from operations. The
Company had a negative working capital of approximately $776,000
and an accumulated deficit of approximately $6,009,000 as of
September 30, 2010.
INVERSIONES ALSACIA: Moody's Assigns 'Ba2' Rating to Senior Notes
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Moody's Investors Service has assigned a first time provisional
(P) Ba2 rating to the Senior Secured Notes of Inversiones Alsacia
S.A. due August 2018, to be issued in the amount of $464 million.
The rating on the notes carries a stable outlook. The notes are
being issued under Rule 144A of the Securities Act in the U.S. and
pursuant to Regulation S outside the United States. Inversiones
Alsacia S.A., and its affiliate Express Uno de Santiago S.A. are
Chilean corporations which hold concessions for bus rapid transit
trunk lines in the City of Santiago, Chile.
Proceeds from the Notes will be used by Inversiones Alsacia S.A.
to retire its existing debt, and after a series of changes to the
ownership structure, to purchase the remaining ownership in
Express de Santiago Uno S.A. and retire its debt, including
breakage costs for current swap agreements. The remaining
proceeds will be used to fill a portion of the debt service
reserve and fully fund the dedicated overhaul account. The Notes
will initially be sold by BRT Escrow Corporation SpA, a special
purpose company established solely to issue the Notes. Once the
transactions that will result in the full ownership of Express de
Santiago Uno S.A. by Alsacia's holding company GPS Group
(incorporated in Panama) are complete, BRT will be acquired by
Alsacia and the Notes will become senior secured debt of the
latter.
Interest and principal on the notes will be payable semi-annually
in February and August from concession related revenues received
by Alsacia and Express for the provision of rapid transit bus
service in Santiago. Collateral on the notes includes the
concession rights under the operating agreements, including all
economic rights, the shares of Alsacia and Express, all buses and
terminals owned by the concessionaires with the exception of one
which is carved out and pledged to Banco Internacional as
collateral on a loan, as well as the main transaction accounts and
insurance proceeds not required by the concession to be granted to
third parties, among others. The notes are also unconditionally
guaranteed by Express, and the two holding companies of Express,
which will be Panamerican Investment Ltd. (Bermuda), and
Inversiones Eco Uno S.A. (Chile), collectively referred to as the
guarantors.
Rating Rationale
The (P) Ba2 rating reflects the well-developed and mature
concession framework in Chile and the strength of the off-taker,
which is the Ministry of Transportation and Telecommunication of
the Government of Chile (rated Aa3/Stable outlook). However, this
strength is somewhat tempered by the fact that this concession is
the only one of its kind and does not have the tenure and history
of other types of infrastructure concessions in the country. An
important factor in considering the strength of the sovereign
offtaker is the fact that the subsidy of the system is only
guaranteed in legislation through 2014. Moody's expects that the
Government of Chile has both the willingness and ability to
continue to support the system, at least until the termination of
the concession agreements. The rating also incorporates the
nature of the revenue formula by which Transantiago calculates the
concessionaires' earned revenue, which protects revenue
fluctuation within a band that ensures a certain level of
stability in the companies' revenues. The projected debt service
coverage ratios appear to be fairly resilient to singular shock
events in ridership and scenarios of cost increases.
Each concessionaire works under a separate concession agreement
between it and the MTT to provide defined trunk line services
under the Transantiago urban transit system. Alsacia has the
concession for Trunk Line 1 and Express has the concession for
Trunk Line 4. The concession for Trunk Line 3 was recently
terminated by the Chilean Government and each of Alsacia and
Express now have a portion of that route package. The concession
agreements with the MTT have been in effect since 2003 and expire
in October 2018.
The Transantiago system incorporates the Bus Rapid Transit and the
city's metro systems. The BRT became fully operational in its
current form in February 2007. The concessionaires are paid bi-
monthly according to a formula set by the MTT in the concession
agreement that takes into consideration factors of inflation and
shifts in the cost of fuel, labor, and other inputs, as well as
the exchange rate of the Chilean peso to the U.S. dollar. The
formula comprises a fixed revenue portion established at the
beginning of the concession, and a variable revenue portion which
in addition to the above inputs takes into consideration the
passenger demand, the number of kilometers traveled by the buses
and the number of places made available to users. One of the most
important aspects of the revenue formula is the service
fulfillment ratio, or ICPKH as per the abbreviation in Spanish, as
it measures the performance of the concessionaires' operations
compared to a predetermined schedule that is agreed with
Transantiago for each month. The ICPKH is multiplied against the
revenue result directly so that, for example, a lower service
fulfillment ratio results in a direct effect on the entire amount
a concessionaire receives. The ICPKH for Alsacia over the last
year has been in the range of 97%, where that of Express has
fallen to around 94% which is lower than its historical trend.
After the purchase of Express by the holding company of Alsacia,
the company expects to increase the ICPKH to similar levels as
well as to achieve some cost synergies.
The payment mechanism under Transantiago consists of a
consolidated revenue collection system under the control of the
Transantiago Funds Administration. The AFT is a consortium of
banks that was set up to serve as a clearing house for all of the
revenues generated by Transantiago and owed to all
concessionaires, including the bus and metro operators. Under
specific agreements with each of the concessionaires, the AFT is
responsible for the sale of the fare cards and for the collection
of all of the ridership revenue, which goes directly to AFT. The
AFT also receives a national government subsidy, as the revenues
from the system provide only about 50% of the total revenues
required by the system to meet the payment requirements of all of
the concessionaires and the metro.
The national subsidy is established under a 2009 law and together
with additional amounts that have been approved over the last
year, provide for the national government to pay roughly $1.8
billion in the years spanning 2011-2014. Despite the fact that
the current subsidy will expire in 2014, at which point 62% of the
original debt will be outstanding, Moody's is confident that the
Government of Chile will continue to support the system given
public policy considerations including the importance of the mass
transit system to the mobility of the Santiago metro area and its
economy. Moody's opinion is also formed in the context of the
country's proven commitment to follow through on concession
programs, and finally on its ability to continue funding the
system given that the annual amounts provided to the AFT from
2010-2014 do not surpass .01% of GDP.
One credit weakness is that the concessionaires have no discretion
in setting the fees charged for service. The aforementioned
subsidy law established a panel of independent experts which is
responsible for determining the passenger fare, taking into
account the government support that is currently in place. If in
the future this support were to be more limited or disappear, the
panel is charged with setting a fare that would support the system
at the same level. Recent rate increases amounting to a 30% rise
in fares implemented in 2009, 2010, and January of 2011 have not,
in and of themselves, had a direct negative effect on the
ridership for the Alsacia and Express trunk line services.
However, the possible effects of very large hikes in fares on
ridership is difficult to determine given on the one hand, the
relatively limited history of the concessions and the limited
options for commuting in the city on the other.
Over the medium and long-term, the Transantiago Metro presents the
most important competitive threat to the financial health of
Alsacia and Express. Certain metro lines were extended in 2010
and several others are scheduled to open in the current and next
year. Alsacia has estimated that it and Express will lose an
additional 5.1.% and 13% of passengers to these improvements to
the metro. As compensation, both concessions have received a
portion of the services for trunk line 3, as mentioned above.
Under the concession agreements, the effects of the additional
service are reassessed at the end of the year to analyze if the
compensation was adequate for the maintenance of economic
equilibrium. Moody's expects that the national government will
honor the principal of economic equilibrium under the concession
agreements going forward, but will monitor the compensation to the
concessionaires compared to the effect on their operations, as
there is a very limited history of such compensation arrangements
given the relatively short existence of the system.
The capital structure includes the proceeds from the bonds as well
as $12 million from a loan with Banco Internacional de Chile,
which has a senior lien on one of the bus terminals owned
currently by Alsacia. Principal on the loan is due after the
Notes are fully retired but may get prepaid subject to available
cash in a position junior to the Notes.. The project waterfall is
relatively straightforward, with the exception that interest on
the Banco Internacional loan is paid prior to the payment of debt
service on the notes, and although Moody's notes that this
priority of payment is uncommon and in line with the subordinate
lien on the loan, Moody's also highlight that its effect on the
debt service coverage on the Notes is actually negligible due to
the relatively small amount it represents.
The Notes' debt service reserve requirement is the maximum of the
next two semi-annual debt service payments, though it will not be
fully funded at closing and will be filled with the cash flows
through the waterfall, after the payment of debt service on the
notes. The project also includes an overhaul reserve account
funded at six months of projected bus overhaul costs.
The issuer will enter into a foreign currency swap agreements with
a subsidiary of Bank of America Merrill Lynch (MLCP) and
potentially with a another international similar rated financial
institution at its option, under which the foreign currency
exchange rate will be initially protected within a band of 570 CLP
and 750 CLP, with some narrowing of that band through 2018. The
swap counterparty will always cover the portion of debt that falls
within the band, and in the event that the exchange rate goes over
the cap, the issuer would be responsible for that portion that is
over and above that exchange rate. Moody's believes this type of
swap provides an adequate amount of protection given the relative
stability of the Chilean peso over the last 10 years, though
Moody's acknowledge that it leaves the issuer exposed at the tails
of the foreign currency forward curve.
Moody's base case takes into account the full exposure of the
foreign currency rate up to the low end of the protection band (or
the strike rate), an ICPKH of the average for each of the
concessionaires for the last year, and passenger growth ranging
from 1.5% annually and decreasing to 0.5%. The revenue formula
provides a natural protection to debt service given that it takes
into account increases in prices of essential inputs, such as
labor and fuel, as well as the exchange rate of the peso to the
U.S. dollar. Hence at this rating category, the transaction can
withstand debt service coverage ratios that are more in line with
those of higher rated availability based public-private
partnership projects that do not have demand risk.
The average debt service coverage ratio for the proposed financing
structure is adequate at 1.20x.. The transaction provides for a
cash trap mechanism if the DSCR is under 1.25x and a partial cash
trap if it falls between 1.25x and 1.35x. If Moody's include the
funds which would be trapped in the transaction, and assume that
the project is generating revenues to that level, the average DSCR
with all funds available for debt service increases to 1.41x. The
Ba2 rating is however based on the coverage by net revenues, the
limitations imposed by the concession agreements, the transaction
structure, and the fundamentals of the project.
Outlook
The stable outlook reflects Moody's expectation that both Alsacia
and Express will continue to operate at least at the current
levels of service which will in turn affect their revenue, and
implement cost-saving synergies related to the effective
consolidation of the two companies after the transaction closes.
Moody's expect that the average and minimum DSCRs will remain in
line with projections. The stable outlook also incorporates the
expectation that the concessionaires will be compensated
adequately by the MTT, if the future lines of the Santiago Metro
affect the concessionaires over and above the threshold agreed
upon in the concession agreements.
What Could Change the Rating -- Up
The rating is well placed in its rating category and unlikely to
increase in the near to medium term. However, it could experience
upward pressure if there was a significant increase in the fares
and ridership that allowed the system to become increasingly self-
sustaining and resulted in consistently higher than anticipated
debt service coverage levels.
What Could Change the Rating -- Down
The rating could experience negative pressure if either Alsacia or
Express, or both, experienced consistently lower than anticipated
service fulfillment ratios causing declines in revenues. Moody's
expect that consistently lower service fulfillment ratios would
signal problematic operating issues such as a failure to maintain
the bus assets properly and hence generate sufficient revenues to
meet debt service payments at a level that is consistent with the
currently assigned rating.
JAFFE-WEBSTER: Albany Mall Owner Seeks to Restructure Finances
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Adam Sichko at The Business Review reports that Jaffe-Webster
Properties Inc., owner of a small shopping center at 489 and 517
Delaware Avenue in Albany, New York, near Interstate 87, is
seeking to reorganize its finances under Chapter 11 of the
bankruptcy code.
In its Schedules of Assets and Liabilities, the Company disclosed
$6,606,254 in assets and $4,231,728 in debts.
According to the report, all but $106,000 of the Company's debt is
the balance on the mortgage for the shopping mall site. The
mortgage holder, TD Bank, began foreclosing on Jaffe-Webster in
early 2009. The site is now operated by William Conboy II, a
court-appointed receiver or the shopping site, as a result of TD
Bank's court action. But the receiver can't offer leases of
longer than one year, hurting the property, said Howard Jaffe,
vice president of the company.
TD Bank, according to The Business Review, is the largest of five
secured creditors in the case. The other secured creditors are
city and county offices related to tax collection and water
assessments. The Company listed 12 creditors with a combined
$106,000 in unsecured debt, meaning they have no guarantee of
getting any of their money back, adds Mr. Sichko.
The largest unsecured creditor is M. Romano & Son Inc., in Albany.
The company is owed $44,000, although Jaffe-Webster is disputing
the debt. It is unclear what the M. Romano business does.
Based in Tarrytown, New York, Jaffe-Webster Properties, Inc.,
field a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 11-10287) on
Feb. 4, 2011, in Albany. Richard L. Weisz, Esq., at Hodgson Russ
LLP, in Albany, represents the Debtor.
JEFFERSON COUNTY: JPMorgan May Seek $778 Million Over Suits
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Martin Z. Braun at Bloomberg News reports that JPMorgan Chase &
Co. said it will seek at least $778 million from Jefferson County,
Alabama, if it loses in the lawsuits brought by companies that
insured the county's defaulted sewer debt.
According to the report, JPMorgan, which underwrote $3 billion of
the debt sales and sold the county derivatives to lower its
borrowing costs, is fighting claims filed by Syncora Guarantee
Inc. and a unit of Assured Guaranty Ltd. in New York state court.
The bond insurers accuse the bank of concealing payments of
$3 million to friends of county commissioners to win business.
They also said the bank didn't disclose an engineering report
saying the sewer system wouldn't be able to pay its debt.
"JPMorgan demands that Jefferson County agree to indemnify and
hold JPMorgan harmless for any losses or costs, including
attorney's fees and expenses sustained by JPMorgan," wrote Mary
Beth Forshaw, Esq., at Simpson Thatcher & Bartlett LLP
representing JPMorgan, in a letter to the County Commission.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000. It ended its 2006 fiscal year with a
$42.6 million general fund balance, according to Standard &
Poor's.
Jefferson County is trying to restructure $3.2 billion in sewer
debt. A bankruptcy by Jefferson County stands to be the largest
municipal bankruptcy in U.S. history. It could beat the record of
$1.7 billion set by Orange County, California in 1994.
In September 2010, Alabama Circuit Court Judge Albert Johnson
named John S. Young Jr. LLC as receiver for the sewer system.
* * *
In August 2010, Standard & Poor's Ratings Services withdrew its
underlying rating on Jefferson County, Ala.'s series 2001B general
obligation warrants. S&P lowered the SPUR to 'D' from 'B' on
Sept. 24, 2008, due to the county's failure to make a principal
payment on the bank warrants due Sept. 15, 2008, in accordance
with the terms of the Standby Warrant Purchase Agreement.
The county and the banks entered into a forbearance agreement that
effectively delayed payments due under the SWPA.
In January 2011, American Bankruptcy Institute reported that
officials from debt-laden Jefferson County were scheduled to meet
with representatives from PricewaterhouseCoopers and Alvarez &
Marsal, the first step in a nationwide search for a financial
turnaround firm.
JENNIFER CONVERTIBLES: Court Provisionally Confirms Plan
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Bankruptcy Judge Allan L. Gropper has provisionally confirmed the
joint plan of reorganization filed by Jennifer Convertibles, Inc.,
and allowed the Debtors to assume certain trademark usage
agreements.
On November 19, 2010, the Debtors filed their disclosure statement
and a joint chapter 11 plan of reorganization. Under the Plan, as
amended, China-based Haining Mengnu Group Co. Ltd., the primary
supplier of furniture to the Jennifer Stores, and the Debtors'
largest creditor and plan sponsor, is separately classified and
has agreed in the Plan to (i) convert most of its unsecured debt
into equity; (ii) allow its substantial Sec. 503(b)(9) priority
claims to be treated pari passu with allowed general unsecured
claims; (iii) accept notes with a longer maturity date and less
collateral protection than the notes payable to general unsecured
creditors; and (iv) provide financing essential for the Debtors'
reorganization that no other entity is willing to provide. The
disclosure statement estimates Mengnu will recover 87.7% and that
other general unsecured creditors will recover 22.7%. No party
has objected or questioned Mengnu's separate classification, its
recovery or that it is supplying essential support for the Plan.
There was also no dispute that there is no value for the equity,
and the Plan provides no recovery for either the preferred or
common stockholders.
The Plan contemplated the "deemed" substantive consolidation of
the Debtors' estates, solely for purposes of voting, confirmation
and making distributions under the Plan. The disclosure statement
represents that no creditor was expected to receive a recovery
inferior to that which it would have received if a separate plan
for each entity had been proposed, that the Debtors have not been
managed operationally on an individual entity basis and that it
would be difficult if not impossible to allocate value and
operational costs and benefits on an individual entity basis.
Ashley Objection
On January 24, 2011, Ashley HomeStores, Ltd. -- the primary
supplier to the furniture stores operated under the Ashley
Furniture HomeStore brand -- and its affiliate, Ashley Furniture
Industries, Inc., filed the sole opposition to confirmation.
Ashley also opposed the Debtors' motion to assume the TUAs between
Ashley and debtor Hartsdale Convertibles, Inc. Ashley is the sole
furniture supplier to Hartsdale and has entered into TUAs with
that debtor. The Ashley Stores are operated pursuant to six
licenses -- TUAs -- between AHS and Hartsdale. The parent entity,
Jennifer Convertibles, is a guarantor under the TUAs.
Ashley filed an objection to assumption of the TUAs that, in
particular, expressed concern that Hartsdale would have
postpetition liabilities to Mengnu. Mengnu is also one of
Ashley's competitors. In an attempt to address Ashley's
objections, the Debtors amended the Plan in their second amended
joint plan of reorganization, filed on January 24, 2011, to
eliminate Hartsdale's liability with respect to most of the notes
by which Mengnu is providing postconfirmation credit and funding
to the Debtors. Under the Plan, Hartsdale's only liability to
Mengnu as plan funder will be under a Tranche E note, which is a
working capital facility to be used, in part, to pay for inventory
purchased from Ashley. Hartsdale's only asset that will be
encumbered under the Tranche E note is its inventory. Further, to
protect Ashley in the future, Hartsdale has committed to purchase
inventory from Ashley on a C.O.D. basis and thus to have little or
no outstanding debt to Ashley at any time.
Nevertheless, Ashley continued to press its objection to the
assumption of the TUAs and to confirmation. Its remaining
objections to assumption of the TUAs were that the Debtors (i)
cannot cure one outstanding default, the alleged obligation to pay
in cash, in full, all third parties with which Hartsdale does
business, and (ii) have not provided adequate assurance of future
performance, including concern that Hartsdale will continue to be
beholden to Mengnu, that Hartsdale has failed to commit to provide
"the full range of reporting requirements imposed under the TUAs"
and that the Debtors have failed "to confirm that AFI's
confidential information will be protected from disclosure and use
by the Plan Sponsor-AFI's competitor."
Ashley also argued that the Plan failed to satisfy the
requirements of 11 U.S.C. Sec. 1129(a). Ashley asserted that Sec.
1129(a)(2) is violated because of an alleged lack of disclosure as
to Hartsdale's separate assets and liabilities. Ashley also
asserted that the Plan does not satisfy Sec. 1129(a)(3)'s good
faith requirement, including an assertion that the Debtors are
substantively consolidating their estates with the primary purpose
of disadvantaging the Hartsdale creditors. Ashley also contends
that the Plan does not satisfy the best interests test of Sec.
1129(a)(7)4 with respect to the Hartsdale creditors because the
consolidated liquidation analysis provided by the Debtors "does
not establish that the creditors of each of the Debtors [i.e.,
Hartsdale] are receiving a [sic] least what they would receive in
a hypothetical liquidation under chapter 7." Finally, Ashley
asserts that Sec. 1129(a)(11)'s "feasibility" requirement has not
been established because the projections, which are the Debtors'
primary evidence of feasibility, are too "speculative,
conjectural, or unrealistic."
Ashley also argues that the TUAs cannot be assumed because the
Debtors have not provided adequate assurance of future
performance.
The Debtors, the Creditors' Committee and Mengnu contest Ashley's
objections, arguing that the record supports assumption of the
TUAs and that the Debtors have met their burden with respect to
confirmation.
Voting Results
Pursuant to a Court order, a deadline for voting on the Plan was
established and, as of that deadline, 90.91% in number and 92.86%
in amount of the Class 3 general unsecured claims voted to approve
the Plan. It was represented without dispute that no creditor of
Hartsdale other than Ashley voted against the Plan. Mengnu, the
sole creditor in Class 2, also voted in favor of the plan. The
official committee of unsecured creditors was closely involved in
negotiations over the Plan and strongly supported its
confirmation.
Court Ruling
Judge Gropper held that assumption of the TUAs is appropriate and
that the Debtors do not need to pay all Hartsdale creditors in
full, in cash, on the effective date to effect such assumption.
The Debtors must, however, comply with all of the other ongoing
obligations under the TUAs, including compliance with its (i)
reporting requirements and (ii) confidentiality provisions.
With respect of the Plan, the Court finds that the Debtors have
met their burden of proof under Sec. 1129 and that the Plan may be
confirmed as to each Debtor other than Hartsdale. As to
Hartsdale, the Court held that the record is inadequate to
establish that substantive consolidation is appropriate with
respect to the treatment of the small number of creditors who can
be identified as having extended credit to Hartsdale.
Judge Gropper said the Debtors may cure this omission in the
record in one of two ways. They may provide for payment in full
of the debt of these small creditors and immediately confirm the
Plan as to Hartsdale as well as the other Debtors. Alternatively,
they may supplement the record on the issue of substantive
consolidation and submit a separate liquidation analysis for
Hartsdale.
"The Court recognizes the need for speed; if further filings are
made, a hearing will be scheduled on shortened notice to deal with
any remaining issues. An appropriate form of confirmation order
will then be entered as soon as feasible," Judge Gropper said.
A copy of Judge Gropper's February 4, 2011 Memorandum Decision
Allowing Assumption of Trademark Usage Agreements and
Provisionally Confirming Joint Plan of Reorganization is available
at http://is.gd/jJ8cosfrom Leagle.com.
Attorney for Ashley HomeStores, Ltd., and Ashley Furniture,
Industries, Inc., are:
Michael H. Goldstein, Esq.
Nathan A. Schultz, Esq.
GREENBERG TRAURIG, LLP
2450 Colorado Avenue, Suite 400E
Santa Monica, CA 90404
Telephone: 310-586-7750
Facsimile: 310-586-0250
E-mail: goldsteinmh@gtlaw.com
schultzn@gtlaw.com
Attorney for the Official Committee of Unsecured Creditors are:
James S. Carr, Esq.
Jason R. Adams, Esq.
KELLY DRYE & WARREN LLP
101 Park Avenue
New York, NY 10178
Telephone: (212) 808-7955
Facsimile: (212) 808-7897
E-mail: jcarr@kelleydrye.com
jadams@kelleydrye.com
Attorney for Haining Mengnu Group Co. Ltd., is:
Edward Neiger, Esq.
NEIGER LLP, NY 10017
317 Madison Avenue, 21st Floor
New York, NY 10017
Telephone: 212-267-7342
Facsimile: 212-406-3677
E-mail: info@neigerllp.com
About Jennifer Convertibles
Jennifer Convertibles, Inc., was organized as a Delaware
corporation in 1986, and is the owner of (i) the largest group of
sofabed specialty retail stores and leather specialty retail
stores in the United States, with stores located throughout the
Eastern seaboard, Midwest, West Coast and Southwest, and (ii)
seven big box, full-line furniture stores operated under the
Ashley Furniture HomeStore brand under a license from Ashley
Furniture Industries, Inc.
The Company and its affiliates filed for Chapter 11 bankruptcy
protection on July 18, 2010 (Bankr. S.D.N.Y. Case No. 10-13779).
Michael S. Fox, Esq., Jordanna L. Nadritch, Esq., and Jayme
Bethel, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky, LLP,
assist the Company in its restructuring effort. TM Capital Corp.
is the Company's financial advisor. Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo P.C. is the Company's special securities
counsel. BMC Group Inc. is the claims and notice agent.
The Company estimated its assets and debts at $10 million to
$50 million as of the Petition Date.
JIMMY L POWERS: Trotter Claim Gets Unsecured Treatment
------------------------------------------------------
Chief Bankruptcy Judge Thomas L. Saladino sustained the objection
to claim (Fil. #48) filed by Trotter Inc. against the Chapter 13
estate of Jimmy L. Powers and Carolyn L. Powers. The claim may be
treated as wholly unsecured, and upon completion of payments
pursuant to a confirmed Chapter 13 plan, any security interest
claimed by Trotter will be deemed avoided.
Jimmy L. Powers and Carolyn L. Powers initially commenced a
Chapter 11 case (Bankr. D. Neb. Case No. 07-42251) on November 28,
2007. In their schedules in that case, the Debtors valued the
real property constituting their home residence at 1110 Trail
Drive, Gibbon, Nebraska, at $150,000. The assessed value of the
property at that time was $111,355.
Trotter filed its claim in the Chapter 11 case on December 28,
2007, as a secured claim for $16,965.22. Trotter asserted a
security interest in the Debtors' 2007 hay crop by virtue of a
fertilizer/agricultural chemical lien under Nebraska law.
Trotter's asserted lien in the hay crop was, however, junior to
the security interest of Town & Country Bank which had a lien on
virtually all assets of Debtors, including the hay crop. The
total amount of the Town & Country Bank claim far exceeded the
value of the hay crop alone. Thus, the Debtors took the position
that Trotter was unsecured.
The Debtors filed a plan and an amended plan in the Chapter 11
case. Each time, Trotter was treated as an unsecured creditor.
Trotter objected to the amended plan asserting that it was a
secured creditor and that the doctrine of marshalling should be
applied to satisfy the lien of Town & Country Bank from collateral
other than the hay crop, leaving that value for Trotter.
The Debtors subsequently entered into stipulations with both
Trotter and Town & Country Bank, which ultimately allowed the
Debtors' amended plan to be confirmed in the Chapter 11 case. The
stipulation gave Trotter, among other things, a junior deed of
trust lien on the Debtors' residence for the amount of Trotter's
claim.
The Debtors were unable to maintain payments under their confirmed
Chapter 11 plan and, on January 29, 2009, converted the case to
Chapter 7. An order of discharge under Chapter 7 was entered on
July 13, 2009. Trotter subsequently recorded a notice of default
pursuant to its deed of trust encumbering the Debtors' residence
and scheduled a trustee's sale for April 9, 2010. The Chapter 13
bankruptcy was filed on April 8, 2010.
JOSEPH-BETH: Panel Gets OK to Tap Lowenstein Sandler as Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky has
granted the official committee of unsecured creditors appointed in
the Chapter 11 cases of Joseph-Beth Booksellers, LLC, et al.,
permission to employ and retain Lowenstein Sandler PC as its co-
counsel, effective as of November 22, 2010.
Lowenstein Sandler will be compensated in accordance with the
procedures set forth in sections 330 and 331 of the Bankruptcy
Code, the applicable Bankruptcy Rules, the rules of this Court,
and any applicable orders entered by this Court with respect to
the compensation of professionals.
The Bankruptcy Court is satisfied that the firm represents no
interest adverse to the estate and that it is a "disinterested
person" as that term is defined under Sec. 101(14) of the
Bankruptcy Code.
As reported in the Troubled Company Reporter on December 28, 2010,
Lowenstein Sandler will work with Frost Brown Todd LLC to avoid
any unnecessary duplication of efforts and to handle the matter in
an efficient and cost-effective manner.
About Joseph-Beth Booksellers
Cincinnati, Ohio-based Joseph-Beth Booksellers, LLC, operated
seven bookstores and bookstore-cafes in Kentucky, Ohio,
Pennsylvania, North Carolina, and Virginia. The Company filed for
Chapter 11 protection on November 11, 2010 (Bankr. E.D. Ky. Case
No. 10-53594). The case is jointly administered with JB
Booksellers, Inc., (Bankr. Case No. 10-53593). Ellen Arvin
Kennedy, Esq., at Dinsmore & Shohl, represents the Debtor. No
trustee or examiner has been appointed or requested in the
Debtors' Chapter 11 cases.
Forest Brown Todd LLC is the official committee of unsecured
creditors' proposed co-counsel. Traxi LLC is the financial
advisor to the Committee.
In its schedules, the Debtor disclosed assets of $15,941,680 and
liabilities of $18,501,989 as of the petition date.
JOSEPH-BETH: Panel Wins Nod to Employ Traxi as Financial Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky has
granted the official committee of unsecured creditors appointed in
the Chapter 11 cases of Joseph-Beth Booksellers, LLC, et al.,
permission to employ and retain Traxi LLC PC as its financial
advisor, effective as of November 23, 2010.
The Bankruptcy Court is satisfied that the firm represents no
interest adverse to the estate and that it is a "disinterested
person" as that term is defined under Sec. 101(14) of the
Bankruptcy Code.
Traxi will be compensated in accordance with the procedures set
forth in sections 330 and 331 of the Bankruptcy Code, the
applicable Bankruptcy Rules, the rules of this Court, and any
applicable orders entered by this Court in respect of compensation
of professionals.
About Joseph-Beth Booksellers
Cincinnati, Ohio-based Joseph-Beth Booksellers, LLC, operated
seven bookstores and bookstore-cafes in Kentucky, Ohio,
Pennsylvania, North Carolina, and Virginia. The Company filed for
Chapter 11 protection on November 11, 2010 (Bankr. E.D. Ky. Case
No. 10-53594). The case is jointly administered with JB
Booksellers, Inc., (Bankr. Case No. 10-53593). Ellen Arvin
Kennedy, Esq., at Dinsmore & Shohl, represents the Debtor. No
trustee or examiner has been appointed or requested in the
Debtors' Chapter 11 cases.
Attorneys at Lowenstein Sandler PC and Forest Brown Todd LLC serve
as co-counsel to the Official Committee of Unsecured Creditors.
In its schedules, the Debtor disclosed assets of $15,941,680 and
liabilities of $18,501,989 as of the petition date.
KEYSTONE AUTOMOTIVE: $120 Million Term Loan Fully Subscribed
------------------------------------------------------------
Keystone Automotive Operations, Inc., announced that its new
$120 million first lien senior secured term loan arranged by
Goldman Sachs Lending Partners LLC has been fully subscribed. The
New Term Loan is a key component of the Company's recapitalization
plan, which upon consummation is expected to reduce Keystone's and
its parent company's outstanding indebtedness by approximately
$295 million and enhance its ability to compete in the aftermarket
auto parts industry.
"We are very pleased with the progress we have made on the new
term loan," said Ed Orzetti, President and Chief Executive Officer
of Keystone. "With the key pieces of our financing in place, we
continue to move forward in implementing a recapitalization plan
that will reduce debt, strengthen our balance sheet and better
position us for future growth opportunities and long-term
success."
On January 10, 2011, Keystone announced it reached agreement with
affiliates of Platinum Equity, LLC and Littlejohn & Co., LLC, who
together with the Company's management hold more than 67 percent
of its Senior Subordinated Notes due 2013, on the terms of a
recapitalization transaction and a $60 million rights offering to
be backstopped by the Majority Holders.
In addition to the New Term Loan, the Transaction includes a new
asset-based revolving credit facility that is already committed to
by Bank of America, N.A. The Company expects to finalize
documentation of both the New ABL Loan and the New Term Loan in
the near future. The proceeds of the New ABL Loan and the New
Term Loan, together with the Rights Offering and cash on hand,
would be used to repay the Company's existing ABL revolving credit
facility and senior secured term loan facility. Under the terms
of the Transaction, Keystone's existing $175 million Senior
Subordinated Notes would be converted into new equity.
The Transaction provides that all trade suppliers will continue to
be paid in full for all goods and services provided to the
Company.
The Company expects to continue to operate in the ordinary course
of business throughout the recapitalization process and does not
anticipate any significant interruption to its business. As of
January 29, 2011, Keystone had in excess of $43 million in cash on
hand to support its business operations. The Company expects the
Transaction to be consummated in the first half of 2011.
Kirkland & Ellis LLP, Miller Buckfire & Co., LLC, and FTI
Consulting, Inc. are serving as legal advisors, investment bankers
and financial advisors, respectively, to Keystone.
Willkie Farr & Gallagher LLP is serving as legal counsel to the
Majority Holders.
About Keystone
Keystone, headquartered in Exeter, Pennsylvania, competes as a
distributor in the specialty accessories and equipment segment of
the broader automotive aftermarket equipment industry. Keystone
is majority-owned by Bain Capital, and had $485 million in
revenues for the LTM period ended October 2, 2010.
* * *
As reported in the Troubled Company Reporter on December 9, 2010,
Moody's Investors Service downgraded Keystone Automotive
Operations Inc.'s Corporate Family Rating and Probability of
Default Rating to Ca from Caa2 to reflect Moody's concerns about
the sustainability of the company's current capital structure.
The ratings on the term loan B due January 2012 and senior
subordinated notes due November 2013 were also downgraded to Caa2
and C from Caa1 and Caa3, respectively. The rating outlook
remains negative.
In November 2010, Standard & Poor's Rating Services lowered all of
its ratings on Keystone Automotive Operations Inc., including the
corporate credit rating to 'CC' from 'CCC'. At the same time, S&P
lowered its rating on the company's $200 million senior secured
term loan due 2012 to 'CC' from 'CCC' and lowered its rating on
the $175 million senior subordinated notes due 2013 to 'C' from
'CC'.
"S&P's ratings on Keystone reflect its expectation that the
company will pursue some form of debt restructuring during 2011,"
said Standard & Poor's credit analyst Brian Milligan. S&P views
the company's financial risk profile as highly leveraged given its
continued poor credit measures, including total debt to EBITDA in
the mid-teens, EBITDA to interest below 1x, and funds from
operations to total debt of about 1% to 2%. In addition, S&P
views Keystone's business risk profile as vulnerable because its
products are discretionary in nature and partially dependent on
new vehicle sales.
LAS VEGAS MONORAIL: Taps Ballard Spahr to Protect from Suit
-----------------------------------------------------------
Cy Ryan at the Las Vegas Sun reports that the Nevada Legislative
Interim Finance Committee agreed to shift $176,000 out of a
reserve account to pay Ballard Spahr law firm to protect the state
in the bankruptcy proceedings of the Las Vegas Monorail. This
$176,000 to be paid to the law firm with 13 offices and 475
lawyers will nearly deplete the $185,000 in the reserve fund.
According to the report, bonds for $650 million were issued
through the State's Department of Business and Industry to build
the 3.9-mile system that runs between casinos on the Strip and the
Las Vegas Convention Authority. State Housing Administrator
Charles Horsey said there was a statement in the bond issue that
the state was not a guarantee to pay the bondholders if there was
a default. However, according to Lon DeWeese, chief financial
officer for the state housing division, told the Committee that
while the state was only the conduit for the issuance of the
bonds, bondholders may sue the state to recover millions of
dollars invested in the project.
About Las Vegas Monorail
Las Vegas, Nevada-based Las Vegas Monorail Company, organized by
the State of Nevada in 2000 as a nonprofit corporation, owns and
manages the Las Vegas Monorail. The Monorail is a seven-stop,
elevated train system that travels along a 3.9-mile route near the
Las Vegas Strip. LVMC has contracted with Bombardier Transit
Corporation to operate the Monorail. Though it benefits from its
tax-exempt status due to being a nonprofit entity, LVMC claims to
be the first privately-owned public transportation system in the
nation to be funded solely by fares and advertising. LVMC says it
receives no governmental financial support or subsidies.
The Company filed for Chapter 11 bankruptcy protection on
January 13, 2010 (Bankr. D. Nev. Case No. 10-10464). Gerald M.
Gordon, Esq., at Gordon Silver, assists the Company in its
restructuring effort. Alvarez & Marsal North America, LLC, is the
Debtor's financial advisor. Stradling Yocca Carlson & Rauth is
the Debtor's special bond counsel. Jones Vargas is the Debtor's
special corporate counsel. The Company disclosed $395,959,764 in
assets and $769,515,450 in liabilities as of the Petition Date.
In May 2010, Ambac Assurance Corp. lost its bid to stay the
bankruptcy case while a district court considers whether the
bankruptcy court wrongly rejected Ambac's argument that Monorail
was a municipality and thus ineligible to be a Chapter 11 debtor.
LEVEL 3 COMMS: Posts $622 Million Net Loss for 2010
---------------------------------------------------
On February 2, 2011, Level 3 Communications Reported fourth
quarter and full year 2010 results. The Company reported a net
loss of $52.00 million on $921 million of total revenue for the
three months ended December 31, 2010, compared with a net loss of
$163 million on $912 million of revenue for the three months ended
September 30, 2010.
The Company also reported a net loss of $622 million on
$3.65 billion of revenue for the year ended December 31, 2010,
compared with a net loss of $618 million on $3.76 billion of total
revenue during the prior year.
The Company's balance sheet at December 31, 2010, showed
$8.35 billion in total assets, $8.51 billion in total liabilities
and $157 million in stockholders' deficit.
A full-text copy of the press release announcing the financial
results is available for free at:
http://ResearchArchives.com/t/s?72ed
About Level 3 Communications
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
The Company's balance sheet at Sept. 30, 2010, showed
$8.36 billion in total assets, $8.45 billion in total liabilities,
and a stockholders' deficit of $86.0 million.
Level 3 Communications carries a 'Caa1' corporate family rating,
and 'Caa2' probability of default rating, with negative outlook
from Moody's, a 'B-' issuer default rating from Fitch, and 'B-'
long term issuer credit ratings from Standard & Poor's.
LOGIC DEVICES: Posts $406,500 Net Loss in Dec. 31 Quarter
---------------------------------------------------------
LOGIC Devices Incorporated filed its quarterly report on Form
10-Q, reporting a net loss of $406,500 on $204,800 of revenue for
the three months ended December 31, 2010, compared with net income
of $83,600 on $1.10 million of revenue for the same period of
2009.
At December 31, 2010, the Company's balance sheet showed
$2.58 million in total assets, $331,000 in total liabilities, and
stockholders' equity of $2.25 million.
As reported in the Troubled Company Reporter on January 3, 2011,
Hein & Associates LLP, in Irvine, Calif., expressed substantial
doubt about LOGIC Devices' ability to continue as a going concern,
following its results for the fiscal year ended September 30,
2010. The independent auditors noted that the Company has
suffered recurring losses from operations and requires additional
funds to maintain its operations.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?72e3
About LOGIC Devices
Sunnyvale, Calif.-based LOGIC Devices Incorporated (Nasdaq: LOGC)
-- http://www.logicdevices.com/-- develops and markets high-
performance, low power digital integrated circuits and integrated
modules that perform high-density storage and signal/image
processing functions.
The Company's products are used in video broadcasting, medical
imaging, military, industrial, embedded, and telecommunications
markets.
LYONDELL CHEMICAL: Ch. 11 Trust Settles Lead Claims for $8.7-Mil.
-----------------------------------------------------------------
A trust from Lyondell Chemical Co.'s Chapter 11 bankruptcy has
agreed to pay $8.7 million to several local municipalities in
California to settle lead paint-related claims, hoping to use
insurance coverage that, in some cases, it could legally contest,
Bankruptcy Law360 reports.
In a motion filed Thursday, the Millennium Custodial Trust sought
approval of the agreement with the cities and counties, which it
said would resolve billions of dollars in claims, according to
Law360.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. Luxembourg-based Basell AF
and Lyondell Chemical Company merged operations in 2007 to form
LyondellBasell Industries, the world's third largest independent
chemical company. LyondellBasell became saddled with debt as part
of the USUS$12.7 billion merger. Len Blavatnik's Access Industries
owned the Company prior to its bankruptcy filing.
On January 6, 2009, LyondellBasell Industries' U.S. operations,
led by Lyondell Chemical Co., and one of its European holding
companies -- Basell Germany Holdings GmbH -- filed voluntary
petitions to reorganize under Chapter 11 of the U.S. Bankruptcy
Code to facilitate a restructuring of the company's debts. The
case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y.
Lead Case No. 09-10023). Seventy-nine Lyondell entities filed for
Chapter 11. Luxembourg-based LyondellBasell Industries AF S.C.A.
and another affiliate were voluntarily added to Lyondell
Chemical's reorganization filing under Chapter 11 on April 24,
2009.
Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, served as the Debtors' bankruptcy counsel. Evercore
Partners served as financial advisors, and Alix Partners and its
subsidiary AP Services LLC, served as restructuring advisors.
AlixPartners' Kevin M. McShea acted as the Debtors' Chief
Restructuring Officer. Clifford Chance LLP served as
restructuring advisors to the European entities.
LyondellBasell emerged from Chapter 11 bankruptcy protection in
May 2010, with a plan that provides the Company with US$3 billion
of opening liquidity. A new parent company, LyondellBasell
Industries N.V., incorporated in the Netherlands, is the successor
of the former parent company, LyondellBasell Industries AF S.C.A.,
a Luxembourg company that is no longer part of LyondellBasell.
LyondellBasell Industries N.V. owns and operates substantially the
same businesses as the previous parent company, including
subsidiaries that were not involved in the bankruptcy cases.
LyondellBasell's corporate seat is Rotterdam, Netherlands, with
administrative offices in Houston and Rotterdam.
MACATAWA BANK: Reports $17.85 Million Net Loss for 2010
-------------------------------------------------------
On February 3, 2011, Macatawa Bank Corporation reported net income
of $835,000 on $17.08 million of total interest income for the
three months ended December 31, 2010, compared with a net loss of
$9.21 million on $22.69 million of total interest interest income
for the same period a year ago.
The Company also reported a net loss of $17.85 million on
$76.00 million of total interest income, compared with a net loss
of $63.64 million on $95.88 million of total interest income
during the prior year.
The Company's balance sheet at December 31, 2010, showed
$1.58 billion in total assets, $1.51 billion in total liabilities
and $67.84 million in shareholders' equity.
"We are pleased with our fourth quarter profit and the progress we
believe we have made in 2010," said Richard L. Postma, Chairman of
Macatawa Bank Corporation. "Our results continued to reflect the
process improvements and disciplined approach we began to
implement in 2009. The fourth quarter of 2010 represented our
third consecutive quarter of profitability, along with continued
improvements in several key capital and performance metrics.
These are important achievements in our continued efforts to build
accountability, confidence and performance in Macatawa Bank. We
must continue to focus on improvement of the Bank's capital
ratios, further reduction of non-performing loans and increasing
sales of other-real-estate-owned. Through the collective efforts
of the Board of Directors, management and our employees, we intend
to continue to move the Bank toward a position of sustained
profitability in order to serve West Michigan as a strong
community bank."
A full-text copy of the press release announcing the Company's
financial results is available for free at:
http://ResearchArchives.com/t/s?72fe
As reported in the Troubled Company Reporter on April 7, 2010,
Crowe Horwath LLP, in Grand Rapids, Mich., expressed substantial
doubt about the Company's ability to continue as a going concern,
following the Company's 2009 results. The independent auditors
noted that the Company incurred significant net losses in 2009 and
2008, primarily from higher provisions for loan losses and
expenses associated with the administration and disposition of
non-performing assets at its wholly owned bank subsidiary Macatawa
Bank.
About Macatawa Bank
Headquartered in Holland, Michigan, Macatawa Bank Corporation
(Nasdaq: MCBC) is the parent company for Macatawa Bank. Through
its banking subsidiary, the Company offers a full range of
banking, investment and trust services to individuals, businesses,
and governmental entities from a network of 26 full service
branches located in communities in Kent County, Ottawa County, and
northern Allegan County.
MARGAUX ORO: Files Schedules of Assets and Liabilities
------------------------------------------------------
Margaux Oro Partners, LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Texas its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $13,000,000
B. Personal Property $171,602
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $10,586,088
E. Creditors Holding
Unsecured Priority
Claims $205,761
F. Creditors Holding
Unsecured Non-priority
Claims $142,295
----------- -----------
TOTAL $13,171,602 $10,934,144
Dallas, Texas-based Margaux Oro Partners, LLC, filed for Chapter
11 bankruptcy protection on January 11, 2011 (Bankr. N.D. Tex.
Case No. 11-30337). Vickie L. Driver, Esq., at Coffin & Driver,
PLLC, serves as the Debtor's bankruptcy counsel. The Debtor
estimated assets and debts at $10 million to $50 million.
Affiliate Donald Lewis Silverman (Bankr. N.D. Tex. Case No. 10-
31785) filed a separate Chapter 11 petition on March 12, 2010.
MARVEL ENTERTAINMENT: Court Rejects Stan Lee Media Requests
-----------------------------------------------------------
In Stan Lee, v. Marvel Enterprises, Inc. and Marvel Characters,
Inc., Case No. 02-Civ.-8945 (S.D.N.Y.), District Judge Robert W.
Sweet denied Stan Lee Media, Inc.'s request to vacate an order of
dismissal of April 27, 2005; to intervene and to substitute SLMI
for plaintiff Stan Lee; for leave to file an amended complaint
dating back to November 12, 2002, the date Mr. Lee filed his
complaint; and to intervene to vacate the Court's 2004 order
sealing certain documents.
Judge Sweet said the motions constitute an effort to reverse
certain results of agreements and litigation reaching back to
before 1998 involving Mr. Lee and his relations with the Marvel
Enterprises, Inc. and Marvel Characters, Inc., which resulted in
highly successful Marvel comic book characters such as Spider-Man,
The Fantastic Four, The Incredible Hulk, X-Men, Daredevil, Silver
Surfer, Iron Man and others -- the Characters -- including three
certain actions in the District Court, the instant action, Stan
Lee Media, Inc. v. Marvel Entertainment, Inc., 07 Civ. 2238, and
Abadin et al. v. Marvel Entertainment, Inc., 09 Civ. 0715. These
parties have also litigated actions in the United States District
Court for the Central District of California, the Bankruptcy Court
of the Southern District of New York and the Colorado state
courts. Because of the success of the Characters and the
conflicting claims concerning their rights, it has been difficult
to achieve finality.
Judge said his ruling "is one such effort" to achieve finality.
Mr. Lee is a veteran comic book writer and editor who created or
co-created many of America's best known comic book characters.
For decades, Mr. Lee was employed by Marvel and its predecessors.
In 1998, after Marvel terminated Mr. Lee's prior employment
agreement, Mr. Lee began to work for a new company, Stan Lee
Enterprises, the alleged predecessor to SLMI. The SLE/Lee
Employment Agreement, however, recognized that Mr. Lee would be
spending 10 to 15 hours per week working for Marvel pursuant to an
agreement between Mr. Lee and Marvel. In January 2001, Mr. Lee
terminated the SLE/Lee Employment Agreement based on SLMI's
material breaches, including SLMI's failure to pay his salary.
Marvel, currently Marvel Entertainment, LLC, successor by merger
of Marvel Entertainment, Inc., which is formerly known as Marvel
Enterprises, Inc., is a publisher of comic books and holder of
rights with respect to the Characters.
The complaint was filed by Mr. Lee on November 12, 2002, and
sought damages, declaratory relief, specific performance and an
accounting arising from Marvel's alleged breach of the Marvel/Lee
Employment Agreement entered into in November 1, 1998. After
extensive discovery, both parties filed motions for partial
summary judgment. An opinion and order dated January 17, 2005,
granted in part and denied in part each of the parties' summary
judgment motions. The parties agreed to the terms of a settlement
and on April 27, 2005, a stipulation and order dismissing with
prejudice all claims asserted in the action was entered.
SLMI has contended that the January 17 and April 27 Orders should
be vacated, asserting that (1) the orders are void under F.R.C.P
60(b)(4); (2) that the orders should be set aside under either
Rule 60(b)(3) or (d)(3) because they were the product of a fraud
on the court; (3) that applying the Orders prospectively would be
inequitable under Rule 60(b)(5); and (4) that the Orders were
issued while SLMI was in bankruptcy under Rule 60(b)(6).
Judge Sweet said SLMI does not qualify for relief pursuant to Rule
60(b)(4), because the District Court properly exercised federal
subject matter jurisdiction over the private dispute between Mr.
Lee and Marvel until the parties voluntarily resolved their
dispute and stipulated to dismiss their claims with prejudice.
SLMI has contended that it, rather than Mr. Lee, was the real
party in interest and, as such, the court lacked subject matter
jurisdiction. However, there is no evidence that SLMI was the
real party in interest with respect to Mr. Lee's claim for
compensation under the Marvel/Lee Employment Agreement. There is
no language in the SLE/Lee Employment Agreement granting SLMI any
rights to Mr. Lee's salary, profit participation or other
compensation from Marvel. The court had subject matter
jurisdiction over Mr. Lee's claims against Marvel pursuant to 18
U.S.C. Sec. 1332, and SLMI does not appear to contend otherwise.
A copy of Judge Sweet's February 4, 2011 opinion is available at
http://is.gd/73yMQTfrom Leagle.com.
Attorneys for Stan Lee are:
Steven J. Shore, Esq.
Ira Brad Matetsky, Esq.
William Andrew Jaskola, Esq.
GANFER & SHORE, LLP
360 Lexington Avenue, 14th Floor
New York, NY 10017
Telephone: 212-922-9250
Facsimile: 212-922-9335
Attorneys for Marvel Entertainment, LLC, are
David Fleischer, Esq.
Sarah Jacobson, Esq.
HAYNES AND BOONE, LLP
30 Rockefeller Plaza, 26th Floor
New York, NY 10112
Telephone: 212-659-4989
Facsimile: 212-884-9567
E-mail: david.fleischer@haynesboone.com
sarah.jacobson@haynesboone.com
- and -
Jodi Aileen Kleinick, Esq.
PAUL, HASTINGS, JANOFSKY & WALKER, LLP
Park Avenue Tower
75 E. 55th Street, First Floor
New York, NY 10022
Telephone: (212) 318-6751
Facsimile: (212) 230-7691
E-mail: jodikleinick@paulhastings.com
Attorneys for Intervenor Stan Lee Media, Inc., are:
Raymond James Dowd, Esq.
Luke McGrath, Esq.
DUNNINGTON, BARTHOLOW & MILLER, LLP
1359 Broadway, Suite 600
New York, NY 10018
Telephone: 212-682-8811
Facsimile: 212-661-7769
E-mail: dbm@dunnington.com
About Stan Lee Media
Stan Lee Media Inc. was placed into Chapter 11 bankruptcy by Stan
Lee in 2001 after the dot-com bust. It emerged in November 2006,
beginning a titanic battle between shareholders and the Company's
founder, Mr. Lee.
About Marvel Entertainment
With a library of over 5,000 characters built over more than 60
years of comic book publishing, Marvel Entertainment, Inc. --
http://www.marvel.com/-- is one of the world's most prominent
character-based entertainment companies. Marvel utilizes its
character franchises in licensing, entertainment (via Marvel
Studios) and publishing (via Marvel Comics), with emphasis on
feature films, home DVD, consumer products, video games, action
figures and role-playing toys, television and promotions.
Marvel's strategy is to leverage its franchises in a growing array
of opportunities around the world.
Marvel filed for chapter 11 bankruptcy on Dec. 27, 1996 (Bankr. D.
Del. Case No. 96-_____), to implement a proposed $525 million
recapitalization. Marvel's filing did not include Marvel's Panini
subsidiary, which is headquartered in Italy. In conjunction with
the chapter 11 filing, a bank group led by Chase Manhattan Bank
agreed to provide Marvel with $100 million of debtor-in-
possession financing.
Marvel's plan of reorganization was consummated on Oct. 18, 1998.
The plan was confirmed on July 31, 1998. Pursuant to the plan,
MEG Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of the company, merged with and into Marvel, with
Marvel continuing as the surviving corporation and as a wholly
owned subsidiary of the registrant. As a result of the merger,
the company acquired all of the tangible and intangible assets of
Marvel.
MCCLATCHY COMPANY: Terminates Sale Contract with Citisquare
-----------------------------------------------------------
On February 1, 2011, The McClatchy Company announced the
termination of a Contract for Purchase and Sale of Real Property
by and between The Miami Herald Publishing Company, Richwood, Inc.
and Knight-Ridder, Inc., and Citisquare Group, LLC, dated March 3,
2005, as amended.
Under the terms of the Contract, Citisquare had agreed to purchase
certain real property of Seller located in Miami, Florida for a
purchase price of $190 million. In accordance with Section 6 of
the fourth amendment to the sale agreement, the parties agreed to
close on the transaction on or before January 31, 2011. Buyer did
not close the transaction and as a result the Contract has
terminated. McClatchy has received approximately $16.5 million in
non-refundable deposits which will it will retain as liquidated
damages. In addition, McClatchy is entitled to payment of a $7
million termination fee.
About The McClatchy Company
Sacramento, Calif.-based The McClatchy Company (NYSE: MNI)
-- http://www.mcclatchy.com/-- is the third largest newspaper
company in the United States, publishing 30 daily newspapers, 43
non-dailies, and direct marketing and direct mail operations.
McClatchy also operates leading local websites in each of its
markets which extend its audience reach. The websites offer users
comprehensive news and information, advertising, e-commerce and
other services. Together with its newspapers and direct marketing
products, these interactive operations make McClatchy the leading
local media company in each of its premium high growth markets.
McClatchy-owned newspapers include The Miami Herald, The
Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City
Star, The Charlotte Observer, and The News & Observer (Raleigh).
The Company's balance sheet as of June 27, 2010, showed
$3.201 billion in total assets, $3.020 billion in total
liabilities, and stockholders' equity of $181.53 million.
* * *
In February 2010, Moody's Investors Service upgraded The McClatchy
Company's Corporate Family Rating to Caa1 from Caa2, Probability
of Default Rating to Caa1 from Caa2, and senior unsecured and
unguaranteed note ratings to Caa2 from Caa3, concluding the review
for upgrade initiated on January 27, 2010. The upgrades reflect
McClatchy's improved liquidity position and reduced near-term
default risk following completion of the company's refinancing,
and its ability to stabilize EBITDA performance through
significant cost reductions. The rating outlook is stable.
Standard & Poor's Ratings Services in Feb. 2010 also raised its
corporate credit on Sacramento, California-based The McClatchy Co.
to 'B' from 'B-'. The upgrade reflects the significant current
and expected moderation in the pace of ad revenue declines in 2010
and 2011 and improving debt leverage and discretionary cash flow.
In February 2011, Fitch Ratings upgraded the Issuer Default Rating
of the McClatchy Company to 'B-' from 'CCC'. The Rating Outlook
is Stable. The upgrade and Stable Outlook reflects, among other
things, the revenue declines endured by McClatchy in 2010 were
materially lower than Fitch's expectation. Fitch had modeled
declines in the mid-teens versus actual declines in the mid-single
digits. Fitch expects the company will be able to meet its
pension funding obligations and satisfy all of its maturities up
to and including its senior unsecured notes due in 2014
($169 million balance as of Sept. 30, 2010).
METAMORHPIX INC: Taps American MedTech to Find Buyers
-----------------------------------------------------
Jeff Clabaugh at the Washington Business Journal reports that
MetaMorphix Inc. hired American MedTech Advisors as advisers to
find a buyer for the company, as part of its Chapter 11 bankruptcy
filing.
As reported in yesterday's Troubled Company Reporter, Metamorphix
Inc. and subsidiary MMI Genomics Inc. are conducting an auction
for their assets on March 8. Bids are initially due March 3. The
hearing for approval of the sale will take place March 9.
About Metamorphix Inc.
Beltsville, Maryland-based Metamorphix, Inc. --
http://www.metamorphixinc.com-- a life sciences company, along
with its subsidiary MMI Genomics, Inc., develops tools,
technologies, and products for livestock and companion animal
health and productivity. The Company offers systems for DNA-based
parent verification and diagnostic testing in livestock and
companion animals.
Metamorphix had been forced into Chapter 7 bankruptcy by 14
creditors who are owed $1.69 million. The original case was filed
on January 28, 2010, in the U.S. Bankruptcy Court for the District
of Delaware. Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston LLP, who represents MetaMorphix, said that the Court
agreed to convert the case from an involuntary Chapter 7 to a
voluntary Chapter 11 case (Bankr. D. Del. Case No. 10-10273).
Its subsidiary, MMI Genomics Inc., filed under Chapter 11 on
November 18, 2010 (Bankr. D. Del. Case No. 10-13775).
Adam Hiller, Esq., at Pinckney, Harris & Weidinger, LLC, assists
the Debtors in their restructuring effort. Attorneys at Klehr
Harrison Harvey Branzburg LLP represent the Official Committee of
Unsecured Creditors.
Metamorphix listed assets of $314,000 and debt totaling
$79.5 million in its Schedules of Assets and Liabilities. MMI
Genomics listed assets of $1.28 million and debt of $10.9 million.
The cases are jointly administered under Case No. 10-10273.
METAMORPHIX INC: Can Hire Pinckney Harris as Bankruptcy Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
MetaMorphix, Inc., and MMI Genomics Inc., to employ Pinckney,
Harris & Weidinger, LLC as counsel.
The firm is representing the Debtors in the Chapter 11
proceedings.
Adam Hiller, Esq., a member of the firm, assures the Court that
the firm is a ?disinterested person? as that term is defined in
Section 101(14) of the Bankruptcy Code.
Mr. Hiller can be reached at:
Pinckney, Harris & Weidinger, LLC
1220 North Market Street, Suite 950
Wilmington, DE 19801
Tel: (302) 504-1527
Fax: (302) 442-7046
E-mail: ahiller@phw-law.com
About Metamorphix Inc.
Beltsville, Maryland-based Metamorphix, Inc. --
http://www.metamorphixinc.com-- a life sciences company, along
with its subsidiary MMI Genomics, Inc., develops tools,
technologies, and products for livestock and companion animal
health and productivity. The Company offers systems for DNA-based
parent verification and diagnostic testing in livestock and
companion animals.
Metamorphix had been forced into Chapter 7 bankruptcy by 14
creditors who are owed $1.69 million. The original case was filed
on January 28, 2010, in the U.S. Bankruptcy Court for the District
of Delaware. Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston LLP, who represents MetaMorphix, said that the Court
agreed to convert the case from an involuntary Chapter 7 to a
voluntary Chapter 11 case (Bankr. D. Del. Case No. 10-10273).
Its subsidiary, MMI Genomics Inc., filed under Chapter 11 on
November 18, 2010 (Bankr. D. Del. Case No. 10-13775).
Adam Hiller, Esq., at Pinckney, Harris & Weidinger, LLC, assists
the Debtors in their restructuring effort. Attorneys at Klehr
Harrison Harvey Branzburg LLP represent the Official Committee of
Unsecured Creditors.
Metamorphix listed assets of $314,000 and debt totaling
$79.5 million in its Schedules of Assets and Liabilities. MMI
Genomics listed assets of $1.28 million and debt of $10.9 million.
The cases are jointly administered under Case No. 10-10273.
METAMORPHIX INC: Committee Can Hire Klehr Harrison as Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Committee of Unsecured Creditors in the Chapter 11
cases of MetaMorphix, Inc., and MMI Genomics Inc., to employ Klehr
Harrison Harvey Branzburg LLP as its counsel.
Klehr Harrison is representing the Committee in the Debtors'
Chapter 11 proceedings.
Richard M. Beck, Esq., a partner at Klehr Harrison assures the
Court that the firm is a ?disinterested person? as that term is
defined in Section 101(14) of the Bankruptcy Code.
Mr. Beck can be reached at:
KLEHR HARRISON HARVEY BRANZBURG LLP
Wilmington Office
919 Market Street, Suite 1000
Wilmington, DE 19801-3062
Tel: (215) 569-2299
Fax: (215) 568-6603
E-mail: rbeck@klehr.com
Philadelphia Office
1835 Market Street, Suite 1400
Philadelphia, PA 19103
About Metamorphix Inc.
Beltsville, Maryland-based Metamorphix, Inc. --
http://www.metamorphixinc.com-- a life sciences company, along
with its subsidiary MMI Genomics, Inc., develops tools,
technologies, and products for livestock and companion animal
health and productivity. The Company offers systems for DNA-based
parent verification and diagnostic testing in livestock and
companion animals.
Metamorphix had been forced into Chapter 7 bankruptcy by 14
creditors who are owed $1.69 million. The original case was filed
on January 28, 2010, in the U.S. Bankruptcy Court for the District
of Delaware. Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston LLP, who represents MetaMorphix, said that the Court
agreed to convert the case from an involuntary Chapter 7 to a
voluntary Chapter 11 case (Bankr. D. Del. Case No. 10-10273).
Its subsidiary, MMI Genomics Inc., filed under Chapter 11 on
November 18, 2010 (Bankr. D. Del. Case No. 10-13775).
Adam Hiller, Esq., at Pinckney, Harris & Weidinger, LLC, assists
the Debtors in their restructuring effort. Attorneys at Klehr
Harrison Harvey Branzburg LLP represent the Official Committee of
Unsecured Creditors.
Metamorphix listed assets of $314,000 and debt totaling
$79.5 million in its Schedules of Assets and Liabilities. MMI
Genomics listed assets of $1.28 million and debt of $10.9 million.
The cases are jointly administered under Case No. 10-10273.
METAMORPHIX INC: MMI Genomics Files Schedules of Assets & Debts
---------------------------------------------------------------
MMI Genomics, Inc., filed with U.S. Bankruptcy Court for the
District of Delaware its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $1,283,786
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $0
E. Creditors Holding
Unsecured Priority
Claims $397,302
F. Creditors Holding
Unsecured Non-priority
Claims $10,457,448
----------- -----------
TOTAL $1,283,786 $10,854,750
MetaMorphix, Inc., a debtor-affiliate, also disclosed $314,179 in
assets and $79,510,850 in liabilities.
About Metamorphix Inc.
Beltsville, Maryland-based Metamorphix, Inc. --
http://www.metamorphixinc.com-- a life sciences company, along
with its subsidiary MMI Genomics, Inc., develops tools,
technologies, and products for livestock and companion animal
health and productivity. The Company offers systems for DNA-based
parent verification and diagnostic testing in livestock and
companion animals.
Metamorphix had been forced into Chapter 7 bankruptcy by 14
creditors who are owed $1.69 million. The original case was filed
on January 28, 2010, in the U.S. Bankruptcy Court for the District
of Delaware. Martin T. Fletcher, Esq., at Whiteford, Taylor &
Preston LLP, who represents MetaMorphix, said that the Court
agreed to convert the case from an involuntary Chapter 7 to a
voluntary Chapter 11 case (Bankr. D. Del. Case No. 10-10273).
Its subsidiary, MMI Genomics Inc., filed under Chapter 11 on
November 18, 2010 (Bankr. D. Del. Case No. 10-13775).
Adam Hiller, Esq., at Pinckney, Harris & Weidinger, LLC, assists
the Debtors in their restructuring effort. Attorneys at Klehr
Harrison Harvey Branzburg LLP represent the Official Committee of
Unsecured Creditors.
Metamorphix listed assets of $314,000 and debt totaling
$79.5 million in its Schedules of Assets and Liabilities. MMI
Genomics listed assets of $1.28 million and debt of $10.9 million.
The cases are jointly administered under Case No. 10-10273.
MOLECULAR INSIGHT: Disclosure Statement Hearing on Feb. 25
----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Molecular Insight
Pharmaceuticals Inc. debuted a restructuring plan that, in
addition to calling for a previously announced rights offering,
proposes to issue $100 million in new bonds to the company's
creditors.
According to the report, Molecular Insight urged the U.S.
Bankruptcy Court in Boston to quickly put in motion its bid to
exit Chapter 11 protection. To that end, the Court agreed to
consider approval of the adequacy of the disclosure statement
explaining the Plan at a Feb. 25 hearing.
The Company can begin soliciting votes on, then seek confirmation
of, the Plan, after the Disclosure Statement is approved.
DBR relates the Company plans to use its cash, the proceeds of a
$45 million rights offering and other assets to pay down and
restructure a debt load of more than $200 million. Under the
Plan, the holders of senior secured floating-rate bonds -- owed
$201.8 million in principal and interest as of December -- will
share in $45 million of new secured bonds, the report adds.
As published in the Feb. 7, 2011 edition of the Troubled Company
Reporter, Ryan McBride at XCONOMY Boston reported that Molecular
Insight Pharmaceuticals' bondholders said in court documents that
they disagree with the proposed financing deal from Savitr. The
bondholders submitted an alternative plan that includes a
$40 million cash infusion into Molecular Insight, among other
terms.
About Molecular Insight
Cambridge, Massachusetts-based Molecular Insight Pharmaceuticals,
Inc., is a clinical-stage biopharmaceutical company that provides
services on the detection and treatment of various forms of cancer
and other life-threatening diseases. The Debtor disclosed
$36,453,000 in total assets and $198,829,000 in total debts as of
September 30, 2010.
Molecular Insight filed for Chapter 11 bankruptcy protection on
December 9, 2010 (Bankr. D. Mass. Case No. 10-23355). Kramer
Levin Naftalis & Franklin LLP serves as the Debtor's lead
bankruptcy counsel. Alan L. Braunstein, Esq., at Riemer &
Braunstein, LLP, serves as the Debtor's local Massachusetts
counsel. Foley & Lardner LLP is the Debtor's special counsel.
Tatum LLC, a division of SFN Professional Services LLC, is the
Debtor's financial consultant. Omni Management Group, LLC, is the
claims, and balloting agent.
MOMENTIVE PERFORMANCE: Extends Maturity of $839.5MM Loan to 2015
----------------------------------------------------------------
On February 3, 2011, Momentive Performance Materials Inc. entered
into an amendment agreement to provide for the amendment of its
credit agreement dated as of December 4, 2006 to, among other
things:
(i) extend the maturity of term loans held by consenting
lenders to May 5, 2015 and increase the applicable margin
with respect to such extended term loans to 3.50% per annum
for eurocurrency loans;
(ii) allow future mandatory and voluntary prepayments to be
directed to non-extended term loans prior to the extended
maturity term loans;
(iii) subject to the requirement to make those offers on a pro
rata basis to all term loan lenders or to all lenders
holding revolving commitments, as applicable, allow the
Company to extend the maturity of term loans or revolving
commitments, as applicable, and for the Company to
otherwise modify the terms of loans or revolving
commitments in connection with such an extension; and
(iv) amend certain other terms therein.
Pursuant to the Amendment Agreement, lenders under the Company's
credit agreement have agreed to extend the maturity of (i)
approximately $436 million aggregate principal amount of their
dollar term loans (approximately 87% of the total dollar term
loans) and (ii) approximately EUR 294 million aggregate principal
amount of their euro term loans (approximately 77% of the total
euro term loans), for an overall extension of approximately $839.5
million aggregate US dollar equivalent principal amount of term
loans (approximately 81.5% of the total term loans). The
effectiveness of the Amendment Agreement and the extension of the
term loans thereunder is subject to the reaffirmation of the
security under the credit agreement and other customary closing
conditions.
About Momentive Performance
Momentive Performance Materials, Inc., is a producer of silicones
and silicone derivatives, and is engaged in the development and
manufacture of products derived from quartz and specialty
ceramics. As of Dec. 31, 2008, the Company had 25 production
sites located worldwide, which allows it to produce the majority
of its products locally in the Americas, Europe and Asia.
Momentive's customers include companies in industries, such as
Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola,
L'Oreal, BASF, The Home Depot and Lowe's.
The Company's balance sheet at Sept. 26, 2010, showed
$3.33 billion in total assets, $3.83 billion in total liabilities,
and a stockholders' deficit $497.78 million.
Momentive carries a 'B3' corporate family and probability of
default ratings from Moody's Investors Service. It has 'B-'
issuer credit ratings from Standard & Poor's Ratings Services.
As reported by the Troubled Company Reporter on October 27, 2010,
Standard & Poor's Ratings Services raised its corporate credit
rating on Momentive Performance Materials Inc. to 'B-' from
'CCC+'. In addition, S&P raised its second lien, senior
unsecured, and subordinated debt ratings by one notch to 'CCC'
(two notches below the corporate credit rating) from 'CCC-'. The
recovery ratings on these classes of debt remain unchanged at '6',
indicating S&P's expectation of negligible (0%-10%) recovery in
the event of a payment default.
At the same time, based on the corporate credit rating upgrade and
its updated recovery analysis, S&P raised its senior secured debt
rating by two notches to 'B' (one notch above the corporate credit
rating) from 'CCC+' and revised the recovery rating to '2' from
'3'. These ratings indicate S&P's expectation for substantial
(70%-90%) recovery in the event of a payment default.
MORGANS HOTEL: Owners, Lenders Want to Stop Hard Rock Foreclosure
-----------------------------------------------------------------
Bankruptcy Law360 reports that owners and senior lenders of Las
Vegas' Hard Rock Hotel and Casino asked a New York judge on
Thursday to stop NorthStar Realty Finance Corp. from initiating
foreclosure under a credit agreement, arguing the fellow lender
was trying to spark a bankruptcy filing.
Steve Green at the Las Vegas Sun are waiting for Bernard Fried, a
New York State Supreme Court justice, to rule on the Las Vegas
Hard Rock's motion that the foreclosure be blocked.
According to the Las Vegas Sun, NorthStar, owed $96.2 million, is
trying to foreclose on ownership interests in the parent companies
of the Hard Rock. The foreclosure notice says the foreclosure is
"subject to" a mortgage and senior loan with more than $1 billion
due.
The report relates that NorthStar, in defending against the
lawsuit, said that if it forecloses the senior lenders will then
be able to foreclose on their interests including the Hard Rock
real estate. NorthStar also disputed suggestions that it would
put the hotel-casino into bankruptcy if it gained organizational
control of the Paradise Road property after a foreclosure.
"If NorthStar forecloses and obtains that organizational control,
there are a number of ways in which NorthStar might seek to
maximize the recovery on its investment," NorthStar's attorneys
said in a court filing. "While a Chapter 11 reorganization is a
possibility, it certainly is not the ineluctable result."
Hard Rock Hotel
In February 2007, a joint venture entity, funded one-third, or
approximately $57.5 million, by the Morgans Hotel, and two-thirds,
or approximately $115.0 million, by DLJ Merchant Banking Partners,
completed the acquisition of Hard Rock Hotel & Casino in Las
Vegas.
In connection with the joint venture's acquisition of the Hard
Rock, certain subsidiaries of the joint venture entered into a
debt financing comprised of a senior mortgage loan and three
mezzanine loans, which provided for a $760.0 million acquisition
loan that was used to fund the acquisition, of which $110.0
million was subsequently repaid according to the terms of the
loan, and a construction loan of up to $620.0 million, which was
fully drawn and remains outstanding as of September 30, 2010, for
the expansion project at the Hard Rock.
According to Morgans Hotel's Form 10-Q for the quarter ended Sept.
30, 2010, "Due to the downturn in the Las Vegas economy and Hard
Rock's high degree of leverage and seasonality, Hard Rock's
operating cash flows have not been sufficient to cover debt
service under the Hard Rock Credit Facility for the nine month
period ended September 30, 2010 and there were months when the
joint venture was forced to use funds from the reserves it had
established under the Hard Rock Credit Facility to meet its
liquidity needs."
"The joint venture anticipates that it will not be able to fully
fund both its operating expenses and its debt service on the Hard
Rock Credit Facility, solely from its revenues until the economic
conditions affecting Las Vegas have improved from their current
conditions. The joint venture is reviewing its options to
identify the best possible resolution to its liquidity position,
including pursuing discussions with the joint venture's lenders."
NorthStar Realty Finance Corp., is a participant lender in the
Hard Rock Credit Facility.
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company's balance sheet at Sept. 30, 2010, showed
$759.10 million in total assets, $801.22 million in total
liabilities, and a stockholders' deficit of $42.12 million.
MORGURARD REAL ESTATE: DBRS Confirms 'BB (High)' Issuer Rating
--------------------------------------------------------------
DBRS has confirmed the Issuer Rating of Morguard Real Estate
Investment Trust (Morguard or the Trust) at BB (high) with a
Stable trend. Morguard's rating confirmation takes into
consideration portfolio growth, modestly improved property and
geographic diversification, and higher financial leverage over
the past year.
The portfolio growth was based on acquisitions consisting of: a
50% interest in Prairie Mall, a 295,000 square feet (sq. ft.)
enclosed shopping centre located in Grand Prairie, Alberta; and a
50% interest in Place Innovation, a 885,322 sq. ft., four building
interconnected office complex located in Saint-Laurent, Quebec.
These properties contributed to higher operating income in 2010,
and the remainder of the portfolio achieved reasonable same
portfolio net operating income growth of 3.1% mainly due to higher
average rental rates on lease expiries. At the same time,
Morguard's portfolio occupancy levels held up well (94% as at Q3
2010) supported by its core enclosed shopping centres and
government office tenancies. The rating confirmation also
reflects the fact that Morguard financed its acquisitions with
debt, which increased financial leverage to 54.6% and lowered
EBITDA interest coverage to 2.45 times (from 2.73 times for the
year-end 2009).
That said, Morguard remains within the parameters of a BB (high)
rating based on its: (1) stable core of retail properties and
government leased office buildings; (2) consistent occupancy in
the mid- to low-90% range; (3) asset type diversification; and
(4) good financial credit metrics. Morguard's rating remains
below DBRS's real estate industry rating of BBB due to its: (1)
above-average property concentration; (2) relatively small
portfolio; (3) exposure to Hudson's Bay Company and Sears; and (4)
below-average geographic diversification.
The stable rating outlook takes into consideration DBRS's
expectation that Morguard will continue to achieve reasonable
operating income growth due to higher average rental rates on
lease renewals, particularly in the retail segment, and full year
cash flow contributions from recent acquisitions. DBRS also
expects Morguard to continue to pursue property acquisitions while
maintaining debt-to-gross book value assets ratio in the mid-50%
range and EBITDA interest coverage ratio above 2.30 times. DBRS
also believes that Morguard's financial flexibility (positive free
cash flow position, and $51.2 million of liquidity) combined with
modest near-term debt maturities provide additional support to the
current rating. A negative rating action could result from:
(1) weaker operating and earnings performance; (2) sustained
increase in financial leverage (debt-to-gross book value assets
ratio above 55% and EBITDA interest coverage below 2.30 times);
and/or (3) increasing portfolio concentration. On the other hand,
a rating improvement would likely be the result of: (1) a material
increase in portfolio size; (2) improved property and geographic
diversification; (3) a significant improvement in earnings;
(4) and/or moderation of financial leverage that results in a
sustained increase in EBITDA interest coverage above 3.00 times.
MPG TRUST: Deutschman & Ratinoff Elected to Board of Directors
--------------------------------------------------------------
On February 2, 2011, MPG Office Trust, Inc. held a Special Meeting
of holders of its 7.625% Series A Cumulative Redeemable Preferred
Stock. The holders have the right to elect two directors to the
Company's Board of Directors pursuant to the terms of the Articles
Supplementary for the Series A Preferred Stock. At the Special
Meeting, the holders of the Series A Preferred Stock elected
Robert Deutschman and Edward J. Ratinoff as directors. Messrs.
Deutschman and Ratinoff will each serve as a director for a one-
year term or, if earlier, until his successor is duly elected and
qualifies, or until the full payment of all dividends on the
Series A Preferred Stock that are in arrears, as well as dividends
for the then current period.
About MPG Office Trust
MPG Office Trust, Inc., fka Maguire Properties Inc. --
http://www.mpgoffice.com/-- is the largest owner and operator of
Class A office properties in the Los Angeles central business
district and is primarily focused on owning and operating high-
quality office properties in the Southern California market. MPG
Office Trust is a full-service real estate company with
substantial in-house expertise and resources in property
management, marketing, leasing, acquisitions, development and
financing.
The Company's balance sheet at Sept. 30, 2010, showed
$3.26 billion in total assets, $4.16 billion in total liabilities,
and a stockholders' deficit of $897.21 million.
The Company has been focused on reducing debt, eliminating
repayment and debt service guarantees, extending debt maturities
and disposing of properties with negative cash flow. The first
phase of the Company's restructuring efforts is substantially
complete and resulted in the resolution of 18 assets, relieving
the Company of approximately $2.0 billion of debt obligations and
potential guaranties of approximately $150 million.
NET ELEMENT: Recurring Losses Prompt Going Concern Doubt
--------------------------------------------------------
Net Element, Inc., filed on February 3, 2011, its annual report on
Form 10-KT/A for the transition period from April 1, 2010, to
December 31, 2010, as a result of a change in its fiscal year end
from March 31 to December 31.
Daszkal Bolton LLP, in Fort Lauderdale, Fla., expressed
substantial doubt about Net Element's ability to continue as a
going concern. The independent auditors noted that the Company
has experienced recurring losses and has an accumulated deficit
and stockholders' deficiency at December 31, 2010.
The Company reported a net loss of $3.1 million on $242 of sales
for the nine-month period ended December 31, 2010. The Company
had a net loss of $6.6 million on $0 revenue for the twelve months
ended March 31, 2010.
At December 31, 2010, the Company's balance sheet showed
$2.8 million in total assets, $3.1 million in total liabilities,
an a stockholders' deficit of $253,000.
A full-text copy of the Form 10-KT/A is available for free at:
http://researcharchives.com/t/s?72e0
About Net Element
Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.)
currently operates several online media websites in the film, auto
racing and emerging music talent markets.
NEXIA HOLDINGS: Acquired 250 Million Shares From Green Endeavors
----------------------------------------------------------------
In a Form 5 filing with the U.S. Securities and Exchange
Commission on February 2, 2011, Nexia Holdings Inc. disclosed that
it acquired 50 million shares of common stock on December 23, 2009
and 200 million shares of common stock on September 3, 2010 of
Green Endeavors, Inc.
The 50 million shares were issued to settle $125,000 of debt owed
by Green Endeavors to Nexia Holdings, Inc.'s subsidiary.
The 200 million shares were received from a 5 for 1 forward split
of Green Endeavors's common stock.
About Nexia Holdings
Headquartered in Salt Lake City, Utah, Nexia Holdings Inc. (OTC
BB: NEXA) -- http://www.nexiaholdings.com/-- is a diversified
holdings company with operations in real estate, health & beauty,
and fashion retail. Nexia owns a majority interest in Landis
Lifestyle Salon, a hair salon built around the AVEDA(TM) product
lines. Through its Style Perfect Inc. subsidiary, Nexia owns the
retail and design firm Black Chandelier and its related brands.
At Sept. 30, 2008, the company's balance sheet showed total assets
of $4.60 million, total liabilities of $12.5 million, and a
stockholders' deficit of $7.92 million.
Going Concern Doubt
Hansen Barnett & Maxwell, P.C., in Salt Lake City, expressed
substantial doubt Nexia Holdings Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007.
For nine months ended Sept. 30, 2008, the company posted net loss
of $4.70 million compared with net loss of $3.29 million for the
same period in the previous year. For the three months ended
Sept. 30, 2008, the Company posted net loss of $1.86 million
compared with a net loss of $1.27 million for the same period in
the previous year.
NMT MEDICAL: To Begin Trading on OTCQB Marketplace on Feb. 7
------------------------------------------------------------
NMT Medical, Inc. announced that the Company's securities will
cease trading on The NASDAQ Capital Market and will begin trading
on the OTCQB TM Marketplace effective with the open of business on
February 7, 2011.
Operated by OTC Markets Group Inc., the OTCQB is a market tier for
OTC traded companies that are registered and reporting with the
Securities and Exchange Commission. The Company's shares will
continue to trade under the symbol NMTI on the computerized OTCQB
system. Investors will be able to view Level II Real Time stock
quotes for NMT at http://www.otcmarkets.com/
On July 30, 2010, NMT received a notification from The NASDAQ
Stock Market that the bid price of the Company's common stock had
closed below the minimum $1.00 per share requirement for continued
listing for 30 consecutive days and that its market value was
below the $35 million minimum value for listed securities. NMT
was given 180 calendar days, or until January 26, 2011, to regain
compliance for a minimum of ten consecutive business days. The
Company has decided not to appeal to a NASDAQ Hearings Panel for
an additional 180-day grace period.
Richard E. Davis, NMT's Chairman, President and Chief Executive
Officer, said, "We expect our equity to continue to be actively
traded on the OTCQB Marketplace. We will continue to operate and
report as a public company and do not believe that this
development will affect our ongoing efforts."
About OTC Markets Group
OTC Markets Group Inc. operates the world's largest electronic
marketplace for broker-dealers to trade unlisted stocks. Its OTC
Link platform supports an open network of competing broker-dealers
that provide investors with the best prices in over 10,000 OTC
securities. In 2010, securities on OTC Link traded over $144
billion in dollar volume, making it the third largest U.S. equity
trading venue after NASDAQ and the NYSE. The wide spectrum of
OTC-traded companies are categorized into three tiers-OTCQX (the
quality-controlled marketplace for investor friendly companies),
OTCQB (the U.S. reporting company marketplace for development
stage companies), and OTC
Pink (the speculative trading marketplace). This categorization
enables investors to identify the level and quality of information
companies provide. To learn more about the OTC Markets Group,
visit http://www.otcmarkets.com/
About NMT Medical
Based in Boston, NMT Medical, Inc. (NASDAQ: NMTI) --
http://www.nmtmedical.com/-- is an advanced medical technology
company that designs, develops, manufactures and markets
proprietary implant technologies that allow interventional
cardiologists to treat structural heart disease through minimally
invasive, catheter-based procedures.
The Company's balance sheet at September 30, 2010, showed
$7.78 million in total assets, $9.75 million in total liabilities,
and a stockholders' deficit of $1.97 million.
The Company has incurred losses from operations during each of the
past two fiscal years and has experienced decreasing sales over
those time periods. The Company also incurred a loss from
operations of $10.71 million for the nine months ended
September 30, 2010. The Company has also had negative operating
cash flows over the comparable periods, have approximately
$3.40 million in cash, cash equivalents and marketable securities
as of September 30, 2010, and has an accumulated deficit of
$59.21 million as of September 30, 2010.
NNN 2400: Section 341(a) Meeting Scheduled for March 1
------------------------------------------------------
The U.S. Trustee for Region 15 will convene a meeting of NNN 2400
West Marshall Drive 19, LLC's creditors on March 1, 2011, at 1:00
p.m. The meeting will be held at the Office of the U.S. Trustee,
402 W. Broadway (use C Street Entrance), Suite 1360, Hearing Room
B, San Diego, CA 92101.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
San Diego, California-based NNN 2400 West Marshall Drive, LLC, a
Delaware Limited Company, filed for Chapter 11 bankruptcy
protection on January 31, 2011 (Bankr. S.D. Calif. Case No. 11-
01454). Darvy Mack Cohan, Esq., at the Law Offices of Darvy Mack
Cohan, serves as the Debtor's bankruptcy counsel. The Debtor
estimated its assets at $10 million to $50 million and debts at
$1 million to $10 million.
NNN MET: Section 341(a) Meeting Scheduled for March 8
-----------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of NNN Met
Center 10 25, LLC's creditors on March 8, 2011, at 9:00 a.m. The
meeting will be held at San Francisco U.S. Trustee Off, Office of
the U.S. Trustee, 235 Pine Street, Suite 850, San Francisco, CA
94104.
This is the first meeting of creditors required under Section
341(a) of the U.S. Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
San Francisco, California-based NNN Met Center 10 25, LLC, a
Delaware Limited Liability, filed for Chapter 11 bankruptcy
protection on January 31, 2011 (Bankr. N.D. Calif. Case No. 11-
30356). Darvy Mack Cohan, Esq., at the Law Offices of Darvy Mack
Cohan, serves as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million.
NOVASTAR FINANCIAL: Amster Entities Hold 7.32% Equity Stake
-----------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission on February 2, 2011, Howard Amster disclosed that he
beneficially owns 172,366 shares of 8.90% Series C Cumulative
Redeemable Preferred Stock of Novastar Financial, Inc.
representing 5.77% of the shares outstanding. The outstanding
Preferred C Shares of the Company is 2,990,000 shares as of
December 10, 2010.
Other affiliates of Mr. Amster also disclosed beneficial ownership
of shares of common stock of the Company:
Shares Equity
Beneficially Owned Stake
------------------ ------
Amster Trading Company 0 0%
Amster Trading Company Charitable
Remainder Unitrust 44,600 1.49%
Samuel J. Heller Irrevocable Trust 1,800 0.06%
The aggregate amount owned by the reporting parties is 218,766
shares or 7.32 % of the outstanding Preferred C Shares.
About NovaStar
Kansas City, Missouri-based NovaStar Financial, Inc. (OTCQB:
Common Stock: NOVS; Series C Preferred Stock: NOVSP), is currently
engaged in managing its portfolio of nonconforming residential
mortgage securities and owning and operating two majority owned
subsidiaries: StreetLinks National Appraisal Services LLC, a
national residential appraisal and real estate valuation
management services company; Advent Financial Services LLC, a
start-up business which provides access to tailored banking
accounts, small dollar banking products and related services to
low and moderate income level individuals. Prior to 2008,
NovaStar originated, securitized, sold and serviced residential
nonconforming mortgage loans.
The Company's balance sheet at Sept. 30, 2010, showed
$41.13 million in total assets, $143.78 million in total
liabilities, and a stockholders' deficit of $102.64 million.
NPS PHARMA: Meets Efficacy Endpoint in Phase 3 of SBS Study
-----------------------------------------------------------
NPS Pharmaceuticals, Inc. announced that its Phase 3 pivotal study
of GATTEX(R) (teduglutide) met the primary efficacy endpoint of
reducing parenteral nutrition (PN) dependence in patients with
adult short bowel syndrome (SBS). The 24-week randomized, double-
blind study, known as STEPS, was designed to compare the efficacy,
safety and tolerability of GATTEX to placebo.
The study reached statistical significance for the primary
efficacy endpoint, defined as the percentage of patients who
achieved a 20 percent or greater reduction in weekly PN volume at
Weeks 20 and 24, compared to baseline. In an intent-to-treat
analysis, 63 percent (27/43) of GATTEX-treated patients responded
versus 30 percent (13/43) of placebo-treated patients (p=0.002).
Patients treated with GATTEX for 24 weeks also achieved
significantly greater reductions in weekly PN volume versus
placebo. On average, patients who received GATTEX experienced a
4.4 liter reduction in weekly PN volume from a pre-treatment
baseline of 12.9 liters; patients who received placebo experienced
a 2.3 liter reduction from a pre-treatment baseline of 13.2 liters
(p<0.001).
"SBS patients who receive their nutrients and fluids intravenously
due to malabsorption and diarrhea are prone to a number of serious
complications including life-threatening infections, blood clots
and liver and kidney damage. The STEPS results suggest
teduglutide helps restore normal intestinal function in patients
with short bowel syndrome, thereby reducing dependence on
parenteral nutrition and potentially improving their quality of
life," said Palle Bekker Jeppesen, M.D., associate professor,
department of medical gastroenterology, Rigshospitalet, University
Hospital of Copenhagen, Denmark. "These findings bring us closer
to an important new therapeutic option for patients with this
debilitating condition."
The STEPS study showed that GATTEX was well tolerated. Four of
the 86 randomized patients discontinued the study due to adverse
events, of which one was GATTEX-treated and three were placebo-
treated. Adverse events appear to be consistent with the
pharmacological effects of the drug.
"We are very pleased with these findings as they confirm our
belief that GATTEX provides meaningful clinical benefits to adult
patients with short bowel syndrome," said Francois Nader, MD,
president and chief executive officer of NPS Pharmaceuticals.
"Based on these results, we expect to file for FDA approval of
GATTEX in the second half of this year as a first-in-class
treatment for SBS. We thank the patients, clinical investigators,
and study coordinators who participated in this landmark study, as
well as our ex-North American partner Nycomed who co-managed and
co-funded the study. We look forward to reporting additional
results from the STEPS study at upcoming medical meetings."
More than 97 percent of eligible patients who participated in
STEPS elected to roll into STEPS 2, an open-label continuation
study in which all participants receive up to an additional 24
months of GATTEX therapy.
STEPS study design
STEPS was an international, double-blind, placebo-controlled Phase
3 pivotal study designed to provide additional evidence of safety
and efficacy of GATTEX in reducing PN dependence in adult SBS
patients.
Twenty-nine centers in North America and Europe enrolled patients
in the STEPS study. Eighty-six patients were randomized and
analyzed for efficacy and safety. The trial included an initial
PN optimization and stabilization period, after which patients
were randomized 1:1 to compare daily subcutaneous dosing of 0.05
mg/kg of GATTEX to placebo over a 24-week treatment period. A
total of 78 patients completed the study.
The primary efficacy endpoint was the percentage of patients who
achieved a 20 percent or greater reduction in weekly PN volume at
Week 20 and maintained that response at Week 24, compared to
baseline. The study's secondary endpoints included reductions in
PN volume and the direct effects of improved intestinal absorption
of fluid.
NPS conducted STEPS with the support of its partner, Nycomed, a
global pharmaceutical company, headquartered in Switzerland, which
holds the rights to develop and commercialize teduglutide outside
of North America. Nycomed expects to submit a Marketing
Authorization Application (MAA) to the European Medicines Agency
(EMA) for teduglutide in the first half of 2011. The two
companies share certain external costs for the teduglutide
development program.
About Short Bowel Syndrome
Short bowel syndrome, or SBS, is a highly disabling condition that
can impair a patient's quality-of-life and lead to serious life-
threatening complications. SBS typically arises after extensive
resection of the bowel due to Crohn's disease, ischemia or other
conditions. SBS patients often suffer from malnutrition, severe
diarrhea, dehydration, fatigue, osteopenia, and weight loss due to
the reduced intestinal capacity to absorb nutrients, water, and
electrolytes. The usual treatment for short bowel syndrome is
nutritional support, including parenteral nutrition (PN) or
intravenous feeding to supplement and stabilize nutritional needs.
Although PN can provide nutritional support for short bowel
syndrome patients, it does not improve the body's own ability to
absorb nutrients. PN is also associated with serious
complications, such as infections, blood clots or liver damage,
and the risks increase the longer patients are on PN. Patients on
PN often experience a poor quality-of-life with difficulty
sleeping, frequent urination and loss of independence.
There are an estimated 10,000 to 15,000 SBS patients in the U.S.
who are dependent on PN, the direct cost of which can exceed
$100,000 annually per patient.
About GATTEX(R)(teduglutide)
GATTEX (teduglutide) is a novel, recombinant analog of human
glucagon-like peptide 2, a protein involved in the rehabilitation
of the intestinal lining. GATTEX is in Phase 3 development to
reduce dependence on parenteral nutrition (PN) in adult patients
with short bowel syndrome (SBS). NPS has reported findings from
completed studies in which GATTEX demonstrated a favorable safety
profile and reductions in mean PN volume from pretreatment
baseline were observed. NPS is also advancing preclinical studies
to evaluate teduglutide in additional intestinal failure related
conditions.
Teduglutide has received orphan drug designation for the treatment
of SBS from the U.S. Food and Drug Administration and the European
Medicines Agency.
In 2007, NPS granted Nycomed the rights to develop and
commercialize teduglutide outside the United States, Canada and
Mexico. NPS retains all rights to teduglutide in North America.
About NPS Pharmaceuticals
Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq:
NPSP) -- http://www.npsp.com/-- is developing new treatment
options for patients with rare gastrointestinal and endocrine
disorders.
NPS noted in its Form 10-K for the year ended Dec. 31, 2009, it
has not been profitable since its inception in 1986. As of
December 31, 2009, it had an accumulated deficit of
$922.7 million. "Currently, we are not a self-sustaining business
and certain economic, operational and strategic factors may
require us to secure additional funds." The Company though
believes its existing capital resources at December 31, 2009,
along with the receipt of $38.4 million from the sale of its
REGPARA royalty stream, should be sufficient to fund its current
and planned operations through at least January 1, 2011.
The Company's balance sheet at Sept. 30, 2010, showed
$228.82 million in total assets, $378.65 million in total
liabilities, and a stockholders' deficit of $149.82 million.
OMAR BOTERO-PARAMO: Tyson Deed of Trust Has Priority Over BONY's
----------------------------------------------------------------
The Bank of New York Mellon Trust Co., N.A., v. Omar Botero-
Paramo, et al., Adv. Pro. No. 09-1233 (Bankr. E.D. Va.), seeks a
determination on the relative priority of two deeds of trust
against real property formerly owned by Omar Botero-Paramo and his
wife. The contending noteholders have each moved for summary
judgment. The deed of trust securing defendant Tysons Financial,
LLC, was recorded first, but BONY Mellon asserts that it was later
released. In the alternative, BONY Mellon argues that it should
be equitably subrogated to an earlier deed of trust, thereby
giving it priority over Tysons. In his February 3, 2011 Memorandum
Opinion, Bankruptcy Judge Stephen S. Mitchell held that Tysons'
deed of trust is entitled to priority. A copy of Judge Mitchell's
opinion is available at http://is.gd/R9OAF1from Leagle.com.
Omar Botero-Paramo filed a voluntary Chapter 11 petition (Bankr.
E.D. Va. Case No. 08-17639) on December 5, 2008. His wife,
Maritza Urdinola, filed her own chapter 11 petition on August 3,
2009. Both of them remain in possession of their estates as
debtors in possession. A plan has not yet been confirmed in
either case, and the outcome of the BONY Mellon litigation will
determine, not only which of the competing noteholders is entitled
to payment from sales proceeds that were escrowed in connection
with a sale approved by the Bankruptcy Court, but also which of
the two has an unsecured claim against the Debtors for the purpose
of voting on a plan and receiving distributions.
Counsel for BONY Mellon is:
David H. Cox, Esq.
JACKSON & CAMPBELL, P.C.
1120 20th Street, N.W.
South Tower
Washington, DC 20036-3437
Telephone: 202-457-1634
Facsimile: 202-457-1678
E-mail: dcox@jackscamp.com
Counsel for defendants Tysons Financial, LLC, and Steven A.
Michael, PLLC, Trustee, is:
Jennifer Larkin Kneeland, Esq.
LINOWES & BLOCHER LLP
7200 Wisconsin Avenue, Suite 800
Bethesda, MD 20814
Telephone: 301-961-5205
Facsimile: 301-654-2801
E-mail: jkneeland@linowes-law.com
OPTI CANADA: Lazard Freres Hired to Review Alternatives
-------------------------------------------------------
OPTI Canada Inc. announced that its Board of Directors has
retained Lazard Freres & Co. LLC to assist in its ongoing review
of strategic alternatives. Strategic alternatives may include
capital market opportunities, asset divestitures, or a corporate
sale, merger or other business combinations. Lazard will
supplement the strategic review by providing advice on capital
structure alternatives to address the Company's overall leverage
position.
Scotia Waterous Inc. and TD Securities Inc, engaged as financial
advisors to OPTI in November of 2009, will work with Lazard in a
coordinated manner to review the full range of strategic options
open to the Company. OPTI's Board of Directors remains committed
to pursuing all available strategic options in the best interests
of the Company.
OPTI will issue its Year End 2010 Results in the normal course of
disclosure on February 10, 2011.
About OPTI Canada
OPTI Canada Inc. is a Calgary, Alberta-based company focused on
developing major oil sands projects in Canada using its
proprietary OrCrude(TM) process. OPTI's common shares trade on
the Toronto Stock Exchange under the symbol OPC.
* * *
OPTI Canada carries a 'CCC+' long-term corporate credit rating
from Standard & Poor's Ratings Services. It has a 'Caa2'
corporate family rating from Moody's Investors Service.
"S&P base its decision to lower the ratings on the increasing
financing burden associated with OPTI's debt and the widening gap
between potential cash flow generation, and financing and spending
obligations," said Standard & Poor's credit analyst Michelle
Dathorne in August 2010, to explain S&P's downgrade of the
corporate rating to 'CCC+' from 'B-'. "Our estimates of the
operating cash flows necessary for the company to fund all
required financing obligations and capital spending internally
provide no allowances for production shortfalls or commodity-price
weakness from now until 2012. This lack of financial flexibility
is characteristic of a credit profile in the 'CCC' category," Ms.
Dathorne added.
ORBITZ WORLDWIDE: S&P Gives Negative Outlook on 'B' Rating
----------------------------------------------------------
Standard & Poor's Ratings Services revised its 'B' rating outlook
for Chicago, Ill.-based Orbitz Worldwide Inc. to negative from
stable. All existing ratings on the company, including the 'B'
corporate credit rating, were affirmed. On Feb. 3, 2011, S&P
revised its 'B-' rating outlook on Travelport LLC to negative.
Affiliates of The Blackstone Group L.P. and Travelport own 55% of
Orbitz's common stock.
"The rating action mainly reflects S&P's concern that the
financial problems of Travelport could adversely affect Orbitz's
credit metrics," explained Standard & Poor's credit analyst Andy
Liu. "The outlook revision on Travelport was based on significant
refinancing risk associated with its $650 million pay-in-kind
notes due in March 2012 and S&P's expectation of a narrow margin
of compliance with covenants over the next several quarters. We
don't anticipate that Travelport will secure adequate cash
resources from operations to repay the PIK note at the time of
maturity in early 2012."
The 'B' corporate credit rating reflects S&P's expectation that
Orbitz' performance will gradually improve along with the travel
industry and that liquidity will remain adequate over the medium
term. Affiliates of Travelport and The Blackstone Group own about
55% of Orbitz. As such, S&P's rating on Orbitz is related to its
rating on Travelport. S&P views Orbitz's business profile as
fair. The company is one of the larger online travel agencies in
the world and operates through a diverse group of brands,
including Orbitz, CheapTickets, and ebookers.
Travel is cyclical and seasonal, and demand fluctuates with shocks
like Sept. 11, 2001, and the Icelandic volcanic eruption. Over
the past two years, the global recession and airline capacity
reduction in response to weak demand and high oil prices hurt the
travel industry. With the economy growing again, travel demand
has begun to rebound. The elimination of airline and hotel
booking fees by most online travel agencies has helped the number
of online transactions. S&P believes that Orbitz will benefit
from an increase in travel demand over the next two to three
years, spurred by an expanding economy, an ongoing shift toward
online travel bookings and vacation packages, and growth in
advertising and media revenues.
ORLEANS HOMEBUILDERS: Wants Additional Time to Close Exit Loan
--------------------------------------------------------------
Orleans Homebuilders, Inc., et al., ask the U.S. Bankruptcy Court
for the District of Delaware to further extend their exclusive
periods to file and solicit acceptances for their Plan of
Reorganization until March 28, 2011, and May 24, respectively.
As reported in the Troubled Company Reporter on Dec 2, 2010, the
Debtors have already obtained confirmation of their Modified
Second Amended Joint Plan of Reorganization.
In an abundance of caution, the Debtors seek for further extension
in their exclusive periods to permit them to consummate the Plan
without potential distraction or a lapse of the exclusive periods.
The Debtors also related that they need additional time to close
their exit financing facility and facilitate their emergence from
Chapter 11.
The TCR reported in December that Orleans is launching the
syndication of its anticipated exit financing package of
approximately $155 million, which consists of a $30 million
revolving credit facility and $125 million syndicated term loan.
Orleans has entered into a commitment letter for JPMorgan Chase
Bank, N.A. to provide the revolving credit facility, and for JP
Morgan Securities LLC to act as sole lead arranger and bookrunner
for the syndication of the term loan. Orleans anticipates that
the new financing, which remains subject to the negotiation and
execution of definitive documentation, will satisfy the
outstanding amounts under the debtor-in-possession financing
facilities and certain other allowed claims, fund emergence-
related disbursements, and provide for the working capital needs
of Orleans after emergence from Chapter 11 protection.
The Debtors propose a hearing on the exclusivity extension on
March 10, 2011, at 9:30 a.m. (Eastern Time). Objections, if any,
are due February 11, at 4:00 p.m.
About Orleans Homebuilders
Orleans Homebuilders, Inc. -- aka FPA Corporation, OHB, Parker &
Lancaster, Masterpiece Homes, Realen Homes and Orleans --
develops, builds and markets high-quality single-family homes,
townhouses and condominiums. From its headquarters in suburban
Philadelphia, the Company serves a broad customer base including
first-time, move-up, luxury, empty-nester and active adult
homebuyers. The Company currently operates in these 11 distinct
markets: Southeastern Pennsylvania; Central and Southern New
Jersey; Orange County, New York; Charlotte, Raleigh and
Greensboro, North Carolina; Richmond and Tidewater, Virginia;
Chicago, Illinois; and Orlando, Florida. The Company's Charlotte,
North Carolina operations also include adjacent counties in South
Carolina. Orleans Homebuilders employs approximately 300 people.
The Company filed for Chapter 11 bankruptcy protection on March 1,
2010 (Bankr. D. Del. Case No. 10-10684). Cahill Gordon & Reindell
LLP is the Debtor's bankruptcy and restructuring counsel. Curtis
S. Miller, Esq., and Robert J. Dehney, Esq., at Morris, Nichols,
Arsht & Tunnell, are the Debtor's Delaware and restructuring
counsel. Blank Rome LLP is the Debtor's special corporate
counsel. Garden City Group Inc. is the Debtor's claims and notice
agent. Gerard S. Catalanello, Esq., and James J. Vincequerra,
Esq., at Duane Morris LLP, in New York; Lawrence J. Kotler, at
Duane Morris LLP, in Philadelphia, Pennsylvania; and Richard W.
Riley, Esq., and Sommer L. Ross, Esq., at Duane Morris LLP, in
Wilmington, Delaware, serve as counsel to the Official Committee
of Unsecured Creditors.
The Company estimated assets and debts at $100 million to
$500 million as of the Petition Date.
OVERLAND STORAGE: Marathon Capital Discloses 15.1% Equity Stake
---------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission on February 1, 2011, Marathon Capital
Management, LLC disclosed that it beneficially owns 2,160,431
shares of common stock of Overland Storage Inc. representing 15.1%
of the shares outstanding. As of November 2, 2010, there were
10,952,312 shares of the Company's common stock, no par value,
issued and outstanding.
About Overland Storage
San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of data
management and data protection solutions across the data
lifecycle. By providing an integrated range of technologies and
services for primary, nearline, offline, archival and cloud data
storage, Overland makes it easy and cost effective to manage
different tiers of information over time.
The Company's balance sheet at September 30, 2010, showed
$39.27 million in total assets, $41.74 million in total
liabilities, and a stockholders' deficit of $2.47 million.
As reported in the Troubled Company Reporter on September 28,
2010, Moss Adams LLP, in San Diego, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern,
following the Company's results for the fiscal year ended June 30,
2010. The independent auditors noted of the Company's recurring
losses and negative operating cash flows.
PANOCHE VALLEY: Court Converts Reorganization Case to Liquidation
-----------------------------------------------------------------
The Hon. Peter W. Bowie of the U.S. Bankruptcy Court for the
Southern District of California converted Panoche Valley, LLC's
Chapter 11 case to one under Chapter 7 of the Bankruptcy Code.
As reported in the Troubled Company Reporter on January 6, 2011,
Tiffany L. Carroll, the U.S. Trustee for Region 15, asked the
Court to dismiss or convert the Debtor's case.
The U.S. Trustee told the Court that the Debtor failed to file
monthly operating reports since March 2010, thereby depriving the
Court and parties-in-interest of any financial information related
to the case and obligations of the Debtor. The U.S. Trustee added
the Debtor failed to file a plan of reorganization after more than
eleven months under Chapter 11 protection.
San Diego, California-based Panoche Valley, LLC, filed for Chapter
11 bankruptcy protection on December 23, 2009 (Bankr. S.D. Calif.
Case No. 09-19670). Thomas C. Nelson, Esq., who has an office in
San Diego, California, assists the Company in its restructuring
effort. The Company estimated assets at $10 million to
$50 million and debts at $1 million to $10 million.
PFF BANCORP: Settlement Reached in Workers' Class Actions
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the provider of directors' and officers' insurance
for PFF Bancorp Inc. agreed to pay $3 million to settle employee
class-action lawsuits against the holding company for a failed
bank. The settlement, set for approval in bankruptcy court on
March 1, also entails granting the class of former workers a
$400,000 unsecured claim.
Mr. Rochelle relates that the suits involved PFF's 401(k) plan and
the employees' stock ownership plan trust. The settlement must be
approved by a U.S. district judge in California overseeing the
class-action suits.
About PFF Bancorp
PFF Bancorp Inc. -- http://www.pffbank.com/-- was a non-
diversified unitary savings and loan holding company within the
meaning of the Home Owners' Loan Act with headquarters formerly
located in Rancho Cucamonga, California. Bancorp is the direct
parent of each of the remaining Debtors.
Prior to filing for bankruptcy, Bancorp was also the direct parent
of PFF Bank & Trust, a federally chartered savings institution,
and said bank's subsidiaries. PFF Bank & Trust was taken over by
regulators in November 2008, with the deposits transferred by the
Federal Deposit Insurance Corp. to U.S. Bank NA.
PFF Bancorp Inc. and its affiliates sought Chapter 11 protection
on December 5, 2008 (Bankr. D. Del. Case No. 08-13127 to
08-13131). Chun I. Jang, Esq., and Paul N. Heath, Esq., at
Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy
counsel. Kurtzman Carson Consultants LLC serves as the Debtors'
claims agent. Jason W. Salib, Esq., at Blank Rome LLP, represents
the official committee of unsecured creditors as counsel.
According to the latest monthly operating report, PFF Bancorp had
total assets of $13.5 million, total liabilities of
$117.4 million, and a stockholders' deficit of $103.9 million as
of Nov. 30, 2010.
PHILLIPS-VAN HEUSEN: Moody's Affirms 'Ba3' Corporate Family Rating
------------------------------------------------------------------
Moody's Investors Service revised Phillips-Van Heusen
Corporation's rating outlook to positive from stable. All other
ratings including the company's Ba3 Corporate Family Rating were
affirmed.
These ratings were affirmed, and LGD assessments amended:
-- Corporate Family Rating at Ba3
-- Probability of Default Rating at Ba3
-- Senior Secured Bank Credit Facilities at Ba2 (LGD 2, 29% from
LGD 3, 33%)
-- Senior Secured Debentures due 2023 at Ba2 (LGD 2, 29% from
LGD 3, 33%)
-- Senior Unsecured Notes due 2020 at B2 (LGD 5, 83% from LGD 5,
86%)
"The outlook revision to positive reflects the meaningful progress
PVH has achieved in deleveraging its balance sheet since its May,
2010 acquisition of Tommy Hilfiger" said Moody's Vice President
and Senior Analyst Scott Tuhy. Since the acquisition, the company
has repaid $250 million of debt, and Moody's expects it to make an
additional $150 million voluntary prepayment in February 2011 as
part of a planned amendment of its credit facilities. At the same
time PVH has shown improved operating performance at its heritage
businesses and the integration of Tommy Hilfiger remains on
schedule.
PVH's Ba3 Corporate Family Rating reflects the company's high debt
burden and integration risks associated with the Tommy Hilfiger
(TH) acquisition. The rating reflects expectations the company
will primary utilize free cash flow to deleverage. The ratings
also reflect PVH's significantly greater scale and increasing
international diversification following the TH acquisition as well
as PVH's historical track record of successful acquisition
integration. The ratings also reflect PVH's ownership of a strong
portfolio of globally recognized brand names include Tommy
Hilfiger and Calvin Klein as well as PVH's strong position in the
mens' dress shirt and necktie category across multiple channels of
distribution.
Ratings could be upgraded if PVH continues to make further
progress on integrating the Tommy Hilfiger acquisition and
continues positive trends in sales and earnings. An upgrade would
also require debt/EBITDA sustained below 4.0 times and
EBITA/interest expense approaching 2.75 times.
In view of the positive outlook, ratings are unlikely to be
downgraded in the near term. Ratings could be lowered if
debt/EBITDA is sustained above 4.75 times or if EBITA/interest
falls below 2.0 times. Ratings could also be downgraded if PVH's
good liquidity profile were to erode.
Moody's last rating action on PVH was on May 10, 2010, when the
company's Corporate Family Rating and Probability of Default
Ratings were lowered to Ba3 following the closing of the
acquisition of Tommy Hilfiger. At that time Moody's also lowered
the rating on the company's secured debentures due 2023 to Ba2
from Baa3.
Phillips-Van Heusen Corporation, headquartered in New York, NY,
designs, sources, markets, licenses and distributes a broad line
of dress shirts, neckwear and sportswear under owned brands
including Van Heusen, Calvin Klein, IZOD, Arrow and Tommy Hilfiger
and numerous licensed brands including Geoffrey Beene, Kenneth
Cole New York,Donald Trump and numerous other licensees.
POPULAR INC: Fitch Upgrades Issuer Default Ratings to 'B+'
----------------------------------------------------------
Fitch Ratings has upgraded the long-term Issuer Default Ratings of
Popular, Inc. and its sub-holding company, Popular North America,
Inc., to 'B+' from 'B'. The ratings were also removed from Rating
Watch Positive and assigned Stable Rating Outlooks. At the same
time, Fitch has affirmed the ratings of BPOP's bank subsidiaries
including Banco Popular de Puerto Rico and Banco Popular North
America at 'BB-'.
Fitch's upgrade of BPOP's IDR reflects the improvements in the
holding company's capital and liquidity position. BPOP has
executed a number of capital initiatives that enhanced its
tangible common equity position throughout 2010 which has added
$1.6 billion in common equity to its capital structure. At
Sept. 30, 2010, TCE/TA stood at 8.31% compared to a low point of
2.11% at June 30, 2009. In 3Q'10, BPOP closed on the announced
sale of its EVERTEC unit, which provide a $531 million net gain
to earnings and was in-line with management's guidance and
expectations. Additionally, the company announced on Jan. 21,
2011 that it has reinstated its dividend on the outstanding
preferred shares of its 6.375% Non-cumulative Monthly Income
Preferred Stock, 2003 Series A and 8.25% Non-cumulative Monthly
Income Preferred Stock, Series B, which totals approximately
$50 million. The estimated interest expense is about $3 million
a year. Fitch also notes that BPOP continued to service the
interest expense on the remaining outstanding TRUPS that did not
participate in the conversion plans announced in August 2009.
Fitch believes BPOP is currently operating with sufficient cash
and securities (approximately $419 million) to support about
$220 million in debt service obligations (or 2x debt service
coverage). However, Fitch notes that near-term obligations
include $375 million in medium term notes maturing 2012, which
may be redeemed or refinanced at the company's discretion. The
one-notch difference from the bank subsidiary reflects Fitch's
view that although the capital and liquidity position of the
holding company have been strengthened, potential operating
pressures at BPPR could constrain the holding company's financial
flexibility. Nonetheless, Fitch views current regulatory capital
ratios at BPPR and BPNA as healthy with a good cushion above well-
capitalized minimum requirements. At Dec. 31, 2010, BPNA Tier 1
RBC totaled 17.6% and BPPR reported Tier 1 RBC of 10.9%.
The Outlook is Stable. As previously noted, Fitch analyzed and
reviewed the company's commercial real estate exposures, and
BPOP's tangible and regulatory capital remained at levels viewed
as acceptable for the current rating level through various stress
scenarios. Based on this analysis, Fitch expects credit stress to
persist throughout 2011; however, the additional capital coupled
with improved reserve levels are expected to provide adequate
coverage of future losses on a consolidated basis. Also
incorporated in the Stable Outlook is the view that asset quality
will remain a challenge for 2011 given BPOP's exposure to the
local economy in Puerto Rico, which remains in a prolonged
recession. However, Fitch believes BPOP is taking the appropriate
steps to address the higher risk loans within its portfolio. On
Jan. 31, 2011, BPOP announced the sale of $500 million (book
value) and reclassification of $1 billion in loans held in
portfolio to held for sale. Although non-performing metrics
improve, BPOP will still retain risk given the sale structure,
which includes BPOP holding a 25% equity investment and providing
50% seller financing. BPOP anticipates the sale of an additional
$395 million of U.S. non-conforming residential loans and is
pursing potential loan sale alternatives. Further, BPOP continues
to post good pre-provision net revenue, which also provides
additional support.
Fitch notes that core operating performance for the company may
continue to be pressured. Although the BPNA subsidiary credit
trends and operating performance has improved from the previous
year, the BPPR subsidiary is now facing challenges as the real
estate sector downturn has hit the local market. Fitch believes
the benefits from lower credit costs at the U.S. subsidiary may be
offset by the increase in problem credits in BPPR.
BPOP's financial and credit performance is presently in-line with
similarly rated peers. However, Fitch would revisit BPOP's
Outlook and/or ratings if credit trends, particularly in its
Puerto Rico portfolio, were to significantly impact its capital
position.
Fitch upgrades and assigns Stable Outlooks to these ratings:
Popular, Inc.:
-- Long-term IDR to 'B+' from 'B';
-- Senior unsecured to 'BB-' from 'B/RR4';
-- Preferred stock to 'CCC/RR6' from 'C/RR6';
-- Individual to 'D' from 'D/E'.
Popular North America, Inc.
-- Long-term IDR to 'B+' from 'B';
-- Senior unsecured at 'B+/RR4' from B/RR4';
-- Individual rating to 'D' from 'D/E'.
BanPonce Trust I
-- Trust preferred to 'CCC/RR6' from 'CC/RR6'.
Popular Capital Trust I
-- Trust preferred to 'CCC/RR6' from 'CC/RR6'.
Popular Capital Trust II
-- Trust preferred to 'CCC/RR6' from 'CC/RR6'.
Popular North America Capital Trust I
-- Trust preferred to 'CCC/RR6' from 'CC/RR6'.
Fitch assigns this rating with a Stable Outlook:
Popular Capital Trust III
-- Trust preferred at 'CCC/RR6'.
Fitch affirms these ratings with Stable Outlooks:
Popular, Inc.:
-- Short-term IDR at 'B';
-- Short-term Debt at 'B'.
Popular North America, Inc.
-- Short-term IDR at 'B';
-- Short-term Debt at B.
Banco Popular North America
-- Long-term IDR at 'BB-';
-- Long-term deposits at 'BB';
-- Short-term IDR at 'B';
-- Short-term deposits at 'B'.
-- Individual rating at 'D'.
Banco Popular de Puerto Rico
-- Long-term IDR at 'BB-';
-- Long-term deposits at 'BB';
-- Short-term IDR at 'B';
-- Short-term deposits at 'B';
-- Individual rating at 'D';
-- Market Linked Securities at 'BBemr'.
Fitch affirms these ratings:
Popular, Inc.:
-- Support at '5'
-- Support floor at 'NF'.
Popular North America, Inc.
-- Support at '5'
-- Support floor at 'NF'.
Banco Popular North America
-- Support at '5';
-- Support floor at 'NF'
Fitch maintains this rating on Rating Watch Negative:
Banco Popular de Puerto Rico
-- Support '4';
-- Support Floor 'B'.
PRIDE INTERNATIONAL: Fitch Puts 'BB+' Rating on Positive Watch
--------------------------------------------------------------
Fitch Ratings has placed Pride International Inc.'s 'BB+' long-
term Issuer Default Rating and outstanding debt ratings on Rating
Watch Positive. Fitch's rating action follows the announcement
that Ensco plc will acquire the company in a cash and stock deal.
The ratings continue to reflect Pride's improved balance sheet,
improving fleet profile, and the company's sizable contract
backlog providing significant cash flow protections for the
company in 2011 and beyond. Offsetting factors include continued
high capital expenditures as the company completes work on its
remaining ultra-deepwater newbuild drillships, weak market
conditions for offshore drillers, and the increased regulatory
uncertainty created by the BP-operated Macondo oil spill.
Future rating upgrades will in part be determined by Ensco's
decision to guarantee the debt obligations of Pride. Ensco has
stated that it does not plan to finance the acquisition of Pride
with asset sales. Additionally, the decision to move forward with
future speculative newbuilds given the uncertainty of debt
guarantees by Ensco potentially place the Pride bondholders at
risk. This may in turn limit the upgrade potential for the Pride
notes.
Fitch remains concerned about the potential for negative longer-
term market conditions for deepwater drilling rigs as a result of
the de-facto moratorium and the potential for increased
liabilities associated with accidents while drilling deepwater
offshore wells. Fitch may consider Negative rating actions in the
sector if the de-facto drilling moratorium in the U.S. Gulf of
Mexico extends substantially beyond mid-2011, if additional
international markets enact drilling moratoriums, or if
drilling/regulatory conditions in the U.S. GoM result in
substantial longer-term negative conditions for drillers or
upstream companies operating in this market.
It is important to note that falling oil prices remain a key risk
for the sector. Oil prices have rallied from the early 2009 lows
and currently trade significantly above Fitch's long-term
expectations for the commodity ($60/barrel). Based on the current
global economic environment and the resulting supply/demand
fundamentals, Fitch believes prices have room to pull back from
current levels which could result in reduced oil drilling activity
and further pressure the outlook for the drilling and service
sector. Fitch will continue to monitor both individual company
performance and industry conditions for rating implications should
either oil or natural gas prices fall significantly below Fitch's
long-term price expectations.
Key covenants at Pride are primarily associated with the senior
unsecured credit facility and include maximum debt to tangible
capitalization (50% covenant threshold), minimum LTM EBITDA to
interest coverage (2.5x covenant level with fall-away provisions
once the corporate credit rating reaches 'Baa1/BBB-' by the other
major rating agencies), restrictions on liens, asset sales and
change of control protections (subject to Pride maintaining an
investment grade credit rating). Pride's 6.875% senior notes due
2020 and 7.875% senior notes due 2040 have change of control
protections (if the change of control is associated with a ratings
decline and a loss of investment grade ratings). It should be
noted, however, that change of control protections for the 8.5%
senior unsecured bondholders were removed with the repayment of
the 7.375% senior notes.
Fitch has placed these debt ratings on Rating Watch Positive:
-- Long-term IDR 'BB+';
-- Senior unsecured credit facility at 'BB+';
-- Senior unsecured notes at 'BB+'.
PROTEONOMIX INC: Plans to Sell 20.4MM Preferred & Common Stock
--------------------------------------------------------------
In a Form S-1 filing with the U.S. Securities and Exchange
Commission on February 1, 2011, Proteonomix, Inc. disclosed that
it plans to sell 8.87 million of Preferred Stock and 11.53 million
of common stock at an aggregate proposed maximum offering price of
$28.8 million.
A full-text copy of the prospectus is available for free at:
http://ResearchArchives.com/t/s?72e7
About Proteonomix Inc.
Proteonomix, Inc. (OTC BB: PROT) -- http://www.proteonomix.com/--
is a biotechnology company focused on developing therapeutics
based upon the use of human cells and their derivatives.
The Company's balance sheet at Sept. 30, 2010, showed $3.8 million
in total assets, $6.3 million in total liabilities, and a
stockholders' deficit of $2.5 million.
KBL, LLP, in New York, expressed substantial doubt about the
Company's ability to continue as a going concern, following the
Company's 2009 results. The independent auditors noted that the
Company has sustained operating losses and capital deficits.
RANCHER ENERGY: Court Okays $14.7MM DIP Financing from Linc Energy
------------------------------------------------------------------
In a regulatory filing Thursday, Rancher Energy Corporation
discloses that on January 26, 2011, the U.S. Bankruptcy Court for
the District of Colorado granted the Company's motion to approve
Debtor-In-Possession Secured Financing From Linc Energy Petroleum,
Inc. On January 28, 2011, the financing with Linc Energy was
closed and distributed to the Company.
The Debtor-In-Possession Financing provides for the following:
-- Authorizing the Company to borrow up to a maximum of
$14,700,000 from Linc Energy, for the limited purposes of:
(a) paying the GasRock Capital, LLC debt in the amount of
$13,653,698, in full; (b) holding the Carve-Out Amount
($100,000 to be used to pay actual administrative expenses)
in the Carve-Out Account until the close of the Sale; (c)
paying pre-petition ad valorem taxes with respect to Real
Property located in Wyoming; (d) funding the Escrow Amount
into an interest bearing account to be maintained and
disbursed pursuant to the terms and conditions of the Escrow
Agreement; and (e) other purposes with the prior written
consent of Lender, in its sole and absolute discretion.
-- In exchange for such funds, the Company will grant to Linc
valid and perfected first priority security interests in and
liens on all of Rancher's assets, which collateral includes
but is not limited to (a) Rancher's interests in oil and gas
producing properties; (b) accounts receivable; (c) equipment;
(d) general intangibles; (e) accounts; (f) deposit accounts;
and (g) all other real and personal property of Rancher,
except for the Carve-Out Amount.
The terms of the Debtor-In-Possession Financing provides for an
interest rate equal to the current base rate on a per annum
basis. The Debtor-In-Possession Financing has a maturity date of
120 days from the approval of the Court.
A full-text copy of the Amended and Restated Senior Secured,
Super-Priority, Debtor-In-Possession Credit Agreement is available
for free at http://researcharchives.com/t/s?72dd
About Rancher Energy
Denver, Colorado-based Rancher Energy Corp. (OTC BB: RNCHQ)
-- http://www.rancherenergy.com/-- is an independent energy
company that explores for and develops produces, and markets oil
and gas in North America. The Company operates four fields in the
Powder River Basin, Wyoming, which is located in the Rocky
Mountain region of the United States.
The Company was formerly known as Metalex Resources, Inc. and
changed its name to Rancher Energy Corp. in 2006. Rancher Energy
Corp. was incorporated in the State of Nevada on February 4, 2004.
Rancher Energy filed for Chapter 11 bankruptcy protection on
October 28, 2009 (Bankr. D. Colo. Case No. 09-32943). Herbert A.
Delap, Esq., who has an office in Denver, Colorado, assists the
Debtor in its restructuring effort. In its petition, the Company
estimated assets and debts of between $10 million and $50 million
each.
The Company's balance sheet at September 30, 2010, showed
$18.19 million in total assets, $17.00 million in total
liabilities, and stockholders' equity of $1.19 million.
RASER TECHNOLOGIES: Thermo Forbearance Pact Extended to March
-------------------------------------------------------------
On January 31, 2011, Raser Technologies, Inc. entered into the
Second Amendment to Amendment, Consent and Forbearance Agreement
with Thermo No. 1 BE-01, LLC, The Prudential Insurance Company of
America, Zurich American Insurance Company and Deutsche Bank Trust
Company Americas amending the Amendment, Consent and Forbearance
Agreement entered between the parties on July 9, 2010 relating to
the repayment of a substantial portion of the debt financing for
the Company's Thermo No. 1 geothermal power plant.
Pursuant to the Amendment, the forbearance period was extended to
March 15, 2011, provided, however, that such date is extended to
April 15, 2011 if, not later than March 15, 2011, the Company
provides the lenders with a letter of intent with respect to a
Qualifying Sale or other transaction that will result in the
lenders receiving a cash of up to $6.75 million.
A copy of the Amendment is available for free at:
http://ResearchArchives.com/t/s?72ef
About Raser Technologies
Provo, Utah-based Raser Technologies, Inc. (NYSE: RZ)
-- http://www.rasertech.com/-- is an environmental energy
technology company focused on geothermal power development and
technology licensing. Raser's Power Systems segment develops
clean, renewable geothermal electric power plants with one
operating plant in southern Utah and eight active and early stage
projects in four western United States: Utah, New Mexico, Nevada
and Oregon, as well as a concession for 100,000 acres in
Indonesia. Raser's Transportation and Industrial segment focuses
on extended-range plug-in-hybrid vehicle solutions and using
Raser's award-winning Symetron(TM) technology to improve the
torque density and efficiency of the electric motors and drive
systems used in electric and hybrid-electric vehicle powertrains
and industrial applications.
* * *
Hein & Associates LLP, in Denver, Colo., 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 has suffered recurring losses, has used significant
cash for operating activities since inception, has significant
purchase commitments in 2010 and has a lack of sufficient working
capital.
Raser Technologies did not make the $2.2 million semi-annual
interest payment due October 1, 2010, on its 8% Convertible Senior
Notes Due 2013.
The Company satisfied the semi-annual interest payment obligation
after receiving $1.10 million from the Thermo No. 1 plant escrow
funds and $1.15 million from a loan with Evergreen Clean Energy,
LLC, late in October 2010.
The Company's balance sheet at Sept. 30, 2010, showed
$57.68 million in total assets, $107.26 million in total
liabilities, and a stockholders' deficit of $49.58 million.
RDK TRUCK SALES: Had $17.2-Mil. Revenue in 2010
-----------------------------------------------
RDK Truck Sales & Service Inc. filed for Chapter 11 protection
(Bankr. M.D. Fla. Case No. 11-01877) on Feb. 1, 2011, in Tampa.
According to Bill Rochelle, the bankruptcy columnist for Bloomberg
News, RDK Truck Sales & Service is a dealer in new and used
garbage trucks. Revenue in 2010 was $17.2 million, the report
relates.
The Debtor estimated assets and debts of $10 million to
$50 million as of the Petition Date. Mr. Rochelle relates that,
according to court filings, People's United Equipment Finance
Corp. is owed $6.19 million and has a lien on the assets. Bay
Cities Bank is owed $2.18 million on a mortgage on the real
property. Assets include less than $500,000 in cash and accounts
receivable and inventory on the books for $4.42 million.
Alberto F Gomez, Jr., Esq., at Morse & Gomez, PA, in Tampa,
Florida, represents the Debtor in the Chapter 11 case.
RESIDENTIAL CAPITAL: DBRS Puts 'C' Issuer Rating Under Review
-------------------------------------------------------------
DBRS Inc. (DBRS) has placed the ratings of Residential Capital,
LLC (ResCap or the Company), including its Issuer and Long-Term
Debt rating of 'C' Under Review with Positive Implications.
DBRS's rating action recognizes the positive momentum at ResCap,
including the noteworthy progress the Company has made in de-
risking the balance sheet and restoring profitability. The
action also takes into account the recently changed strategic
importance of the Company to Ally Financial Inc. (rated BB (low)
by DBRS), ResCap's parent. Since 2009, management has taken well
orchestrated and quite costly measures to right size and de-risk
ResCap. These measures included taking sizable marks on the
legacy held-for-sale portfolio, selling non-core assets and
business lines, and more recently reaching settlements of rep &
warranty claims with Fannie Mae (4Q10) and Freddie Mac (1Q10). As
a result of these actions, ResCap has dramatically reduced its
exposure to additional losses from the legacy mortgage portfolio.
Importantly, after three consecutive years of generating
significant losses, ResCap returned to profitability in 2010, as
the Company benefited from the increase in mortgage refinancing
activity and market fundamentals. Indeed, the improvement in
secondary prices for mortgage assets in 2010 resulted in ResCap
recognizing gains on the sale of previous marked legacy portfolios
benefiting earnings.
During the review process, DBRS will consider ResCap's strategy to
focus on conforming mortgage origination and servicing and its
ability to generate a level of earnings to absorb credit costs and
grow capital on its own. Moreover, the review will focus on the
Company's funding and liquidity requirements, including the
ability to fund growth in new lending volumes. Importantly, DBRS
will ascertain ResCap's exposure to remaining legacy assets, the
potential for losses as a result of a return to marked
deterioration in U.S. home prices, and the ability of the Company
to withstand such a scenario. Given the momentum in the business
and the aforementioned actions taken by management, upon
conclusion of its review DBRS sees the potential for an upward
adjustment to the ratings of multiple notches.
ROBERT E MIELL: Bankr. Court Keeps Chapter 7 Trustee
----------------------------------------------------
Bankruptcy Judge Paul J. Kilburg denied Robert K. Miell's bid to
remove Chapter 7 trustee Renee Hanrahan from the case. Judge
Kilburg said the Debtor has failed to prove cause exists to remove
the Chapter 7 Trustee under 11 U.S.C. Sec. 324(a). The Trustee
has complied with all the mandates of the Bankruptcy Code and
Rules.
The Debtor asserts there is cause to remove Ms. Hanrahan as
Trustee. The Debtor argues the Trustee is not a disinterested
person. He also asserts the Trustee has mismanaged the estate and
acted without authority. The U.S. Trustee and the Chapter 7
Trustee filed objections, asserting the Debtor cannot meet the
burden to show cause to remove the Chapter 7 Trustee. Creditors
Guaranty Bank & Trust, State Farm Bank, Luana Savings Bank, and
University of Iowa Community Credit Union have filed joinders in
the objections to the Motion to Remove Trustee:
A copy of Judge Kilburg's February 7, 2011 order is available
at http://is.gd/LDCZuifrom Leagle.com.
Robert E. Miell is incarcerated in the County Jail in Marengo,
Iowa, awaiting transfer to a federal facility. He has been in
jail since early in his bankruptcy case. Mr. Miell, represented
by attorneys, filed a voluntary Chapter 11 petition (Bankr. N.D.
Iowa Case No. 09-01500), without schedules and statements, on
May 28, 2009. The Debtor filed his Schedules and Statements on
June 29, 2009, and amended them on July 13, 2009. The Court
converted the case to Chapter 7 and appointed a Chapter 7 Trustee
on October 9, 2009. The attorney who represented Debtor most
recently withdrew on September 20, 2010. He is currently
proceeding without counsel.
ROSETTA GENOMICS: Gets More Time from NASDAQ to Regain Compliance
-----------------------------------------------------------------
Rosetta Genomics, Ltd. received notice that the Listing
Qualifications Staff of The NASDAQ Stock Market has granted the
Company's request for an extension to regain compliance with the
$2,500,000 stockholders' equity requirement for continued listing
on The NASDAQ Capital Market, as set forth in NASDAQ Listing Rule
5550(b). Under the terms of the extension, the Company must
achieve certain milestones toward regaining compliance by
February 28, and April 29, 2011, respectively, and ultimately
demonstrate its full compliance with the minimum stockholders'
equity requirement upon the filing of the periodic report
including the Company's results for the quarter ending June 30,
2011, with the Securities and Exchange Commission.
By separate letter dated February 7, 2011, the Staff also notified
the Company that the bid price of the Company's common stock had
closed below the minimum $1.00 per share threshold set forth in
NASDAQ Listing Rule 5550(a)(2) for the prior 30 consecutive
business days and, in accordance with the Listing Rules, the Staff
had granted the Company a 180 calendar day period, through
August 8, 2011, to regain compliance with that requirement. The
Company may achieve compliance with the bid price requirement by
evidencing a closing bid price of at least $1.00 per share for a
minimum of 10 consecutive business days on or before August 8,
2011. In addition, should the Company satisfy the criteria for
initial listing on The NASDAQ Capital Market (except for the $1.00
bid price and $15 million market value of publicly held shares
requirements for continued listing) as of August 8, 2011, the
Company will be entitled to a second 180-calendar day period,
through February 6, 2012, to regain compliance with the minimum
bid price requirement.
The Company is diligently working to regain and sustain compliance
with all applicable requirements for continued listing on The
NASDAQ Capital Market; however, there can be no assurance that the
Company will be able to do so within the time periods afforded by
the Staff. If the Company does not timely evidence compliance with
the stockholders' equity requirement as required by the Staff's
extension letter dated February 7, 2011, the Staff will provide
written notification that the Company's securities are subject to
delisting. At that time, the Company may appeal the Staff's
determination to a NASDAQ Listing Qualifications Panel (the
"Panel"), which would stay any delisting action until the Panel
renders its determination following a hearing. Likewise, if the
Company does not regain compliance with the minimum bid price
requirement during the 180-day compliance period ending August 8,
2011, and is not eligible for a second 180-day compliance period,
the Staff will provide the Company with written notice that the
Company's common stock is subject to delisting. Again, in such
event, the Company may appeal the Staff's determination to a
Panel, which would stay any delisting action until the Panel
renders a determination following a hearing.
About Rosetta Genomics
Rosetta Genomics -- http://www.rosettagenomics.com/-- is a
leading developer of microRNA-based molecular diagnostics.
Founded in 2000, the Company's integrative research platform
combining bioinformatics and state-of-the-art laboratory processes
has led to the discovery of hundreds of biologically validated
novel human microRNAs. Building on its strong patent position and
proprietary platform technologies, Rosetta Genomics is working on
the application of these technologies in the development of a full
range of microRNA-based diagnostic tools. The Company's microRNA-
based tests miRview(R) squamous, miRview(R) mets, miRview(R)
mets(2) and miRview(R) meso are commercially available through its
Philadelphia-based CAP-accredited, CLIA-certified lab.
SANSWIRE CORP: Receives More Investments From Chairman and CEO
--------------------------------------------------------------
Sanswire Corp. has received a further investment by its Chairman
of the Board, Michael K. Clark, and its President and CEO, Glenn
D. Estrella, along with other partners of the Company. The
investors purchased an aggregate of $175,000 of shares of Common
Stock and warrants to purchase shares of Common Stock of the
Company, the proceeds of which will be used to advance the
Company's corporate and UAV operations. This new investment by
the Company's Chairman, CEO and partners follows an investment by
the Company's CEO and partners in November 2010 and a prior
investment by the Company's Chairman at the end of September.
Sanswire Chairman Michael K. Clark stated "Upon my arrival at
Sanswire in June 2010, we evaluated the Company's corporate
structure and operations and we embarked on a program to resolve
historic issues and prepare the Company for commercial success. I
believe we are beginning 2011 in a stronger position, one where
the Company is poised to take advantage of projected growth in a
demanding market. We also have implemented a series of
fundamental corporate governance initiatives focused on
transparency and adherence to our regulatory commitments. We
intend to operate the Company in this framework of corporate
integrity as we continue to pursue our commercial milestones in an
aggressive strategic manner."
President and CEO Glenn Estrella commented "Starting day one, I
made it my responsibility to execute on our Chairman's vision to
transform Sanswire into a healthy commercial operation with the
highest ethical standards. The Company accomplished many goals in
2010, which we believe will be instrumental in positioning the
Company for growth in 2011. The investments made by our
management team and partners evidence our collective belief in the
Company and its goals. Together with our committed staff,
partners and investors, we intend in 2011 to continue to re-define
Sanswire and to transparently communicate Company news in full
compliance with our reporting obligations."
About Sanswire Corp.
Aventura, Fla.-based Sanswire Corp. develops, markets and sells
autonomous, lighter-than-air unmanned aerial vehicles capable of
carrying payloads that provide persistent security solutions at
low, mid and high altitudes. The Company's airships are designed
for use by government-related and commercial entities that require
real-time intelligence, surveillance and reconnaissance support
for military, homeland defense, border and maritime missions.
The Company's balance sheet as of September 30, 2010, showed
$1.6 million in total assets, $20.4 million in total liabilities,
and a stockholders' deficit of $18.8 million. The Company had a
working capital deficit of $20.2 million and an accumulated
deficit of $142.4 million at September 30, 2010.
As reported in the Troubled Company Reporter on April 14, 2010,
Rosen Seymour Shapss Martin & Company LLP, in New York, 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 has experienced significant losses
and negative cash flows, resulting in decreased capital and
increased accumulated deficits.
SBARRO INC: Inks 2nd Forbearance Pact With First Lien Holders
-------------------------------------------------------------
Sbarro, Inc., the Company together with its parent, Sbarro
Holdings, LLC, effective January 3, 2011, entered into a
Forbearance Agreement with its lenders under that certain Credit
Agreement, dated January 31, 2007, by and among the Company,
Holdings, the First Lien Holders and Bank of America, N.A., as
Administrative Agent and the Administrative Agent as a result of
the Company having breached a financial covenant in its First Lien
Credit Agreement as of January 2, 2011. The First Forbearance
Agreement terminated on January 31, 2011. On January 31, 2011,
the Company and Holdings entered into a Second Forbearance
Agreement with the First Lien Holders and the Administrative
Agent, which will afford the Company additional time to pursue a
deleveraging of its capital structure.
Consistent with the terms of the First Forbearance Agreement,
pursuant to the Second Forbearance Agreement, the First Lien
Holders have agreed to continue to temporarily forbear for an
additional 30 days from exercising certain rights and remedies
under the First Lien Credit Agreement solely by reason of the
Company's failure to meet the EBITDA covenant contained in Section
7.16 of the First Lien Credit Agreement as of January 2, 2011 or
the Company's receipt on December 29, 2010 of a "Notice of
Default," dated December 28, 2010, from AFII US BD Holdings, L.P.,
a holder of the Company's senior notes, contending that the
Company's incurrence of its second lien credit facility in March
2009 violated certain provisions of the Senior Notes Indenture,
dated as of January 31, 2007, among the Company, the guarantors
named therein and The Bank of New York, as Trustee. Specifically,
until the Second Forbearance Agreement terminates, the First Lien
Holders have agreed not to terminate the commitments, accelerate
the loans, require cash collateral for the letter of credit
obligations, enforce liens granted under the collateral documents
or exercise any other rights or remedies that may be available
under the loan documents.
In the Second Forbearance Agreement, the Company has again
acknowledged that as a result of the First Lien Default (i) the
Company's consent right in respect of certain assignments is no
longer in effect, (ii) all outstanding loans bear interest at the
default rate (contract rate + 2%), which will result in
incremental interest of approximately $860,000 for the first
quarter of fiscal year 2011, and (iii) the Company is not entitled
to convert eurodollar loans to, or continue any eurodollar loans
for additional interest periods as, eurodollar loans having an
interest period in excess of one month. Pursuant to the Second
Forbearance Agreement, the Company has also agreed to certain
covenants, including (a) to maintain a minimum level of liquidity
and limit capital expenditures during the forbearance period and
(b) to provide the Administrative Agent with certain information
and documents, including a restructuring proposal, by dates during
the forbearance period that are specified in the Second
Forbearance Agreement. In addition to the fees paid in connection
with the First Forbearance Agreement, the Company has agreed to
pay a fee to each lender that consents to the Second Forbearance
Agreement of 25 basis points on the principal amount of loans held
by that lender under the First Lien Credit Agreement. As of
January 31, 2011, the Company has paid those lenders who have
consented to the Second Forbearance Agreement a forbearance fee of
$274,456 in aggregate.
The Second Forbearance Agreement terminates on the earliest of (i)
March 2, 2011, (ii) the date on which any event of default under
the First Lien Credit Agreement other than the First Lien Default
will occur, (iii) the date of any breach by Holdings or the
Company of the covenants set forth in the Second Forbearance
Agreement, and (iv) the date on which any holder of the Company's
senior notes or any of the Company's second lien lenders (A)
accelerates any of the Company's obligations under the Indenture
or the second lien credit facility or (B) enforces any rights to
collect payment under their respective agreements with the
Company. Approximately 95% of the Company's outstanding second
lien debt is held by an affiliate of MidOcean Partners. MidOcean
Partners, through various investment funds that it manages, is the
indirect, majority stockholder of the Company.
A full-text copy of the Second Forbearance Agreement and the terms
thereof is available for free at:
http://ResearchArchives.com/t/s?72df
Meanwhile, on January 31, 2011, the Company determined that in
light of its current liquidity and capital resources, it will not
make an interest payment due on February, 1, 2011 to the holders
of its senior notes under the Indenture in the amount of
$7,781,250. The failure to pay interest, if continued for 30
days, will constitute an Event of Default under the Indenture.
Accordingly, if the Company has not made this interest payment by
March 3, 2011, the Bank of New York, as Trustee, or the holders of
at least 25% in principal amount of the outstanding senior notes
under the Indenture, will then have the right to provide an
acceleration notice to the Company declaring the principal and
unpaid interest on all the senior notes due and payable. The
Company's total outstanding obligations under the Indenture as of
February 1, 2011, including accrued but unpaid interest, are
$157,781,250. In addition, if the Company fails to make this
interest payment before the expiration of the grace period on
March 3, 2011, such failure will result in a new event of default
under the First Lien Credit Agreement and the Second Lien Credit
Agreement, dated as of March 26, 2009 among the Company, Holdings,
the lenders from time to time party thereto and the administrative
agent and collateral agent. This would then allow the First Lien
Holders and the second lien lenders to declare all amounts
outstanding under the First Lien Credit Agreement and the Second
Lien Credit Agreement due and payable. As of February 1, 2011,
there was $173,766,431 outstanding under the First Lien Credit
Agreement and $33,498,783 outstanding under the Second Lien Credit
Agreement, in each case including both principal and accrued but
unpaid interest.
The Company remains in discussions with its creditors and other
stakeholders regarding the Company's long-term capital structure
and potential strategic alternatives to address its long-term
needs.
About Sbarro Inc.
Melville, N.Y.-based Sbarro, Inc. -- http://www.sbarro.com/-- is
the world's 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.
The Company's balance sheet at Sept. 30, 2010, showed
$455.55 million in total assets, $29.98 million in total current
liabilities, $7.47 million in deferred rent, $70.64 million in
deferred tax liabilities, $13.26 million in due to former
shareholders and other liabilities, $341.80 million in long-term
debt, and stockholders' equity of $16.17 million.
* * *
Standard & Poor's Ratings Services in January 2011 lowered its
corporate credit rating on Sbarro to 'CC' from 'CCC-'. The
outlook is negative.
"The ratings on Sbarro reflect S&P's belief that the company's
current capital structure is unsustainable and that it is unable
to service its existing debt," said Standard & Poor's credit
analyst Mariola Borysiak. Sbarro has engaged Rothschild Inc. as
its financial advisor to explore strategic alternatives addressing
its current capital structure.
As reported by the Troubled Company Reporter, on January 11, 2011,
The Wall Street Journal's Mike Spector said people familiar with
the matter indicated Sbarro has hired the law firm Kirkland &
Ellis to advise it on restructuring its balance sheet. As
reported by the TCR on January 10, 2011, Sbarro hired investment
bank Rothschild Inc. for restructuring advice.
SCHUTT SPORTS: Court Appoints Ronald Barliant as Mediator
---------------------------------------------------------
To resolve disputes between Schutt Sports, Inc. (n/k/a SSI
Liquidating, Inc.) and its debtor-affiliates, Riddell Inc., and
the other parties in connection with certain pending motions,
objections filed by the parties, including the disposition of
certain sale proceeds realized by the Debtors, the U.S. Bankruptcy
Court for the District of Delaware approved on January 18, 2011,
the appointment of Ronald Barliant as Mediator in these cases,
effective as of January 13, 2011.
The fees of the Mediator, including, without limitation, any
expenses and fees incurred by any professionals at Goldberg Kohn
assisting the Mediation, will be paid 50% from the Debtors'
estates as an allowed administrative expenses, and 50% by Ridell.
About Schutt Sports
Headquartered in Litchfield, Illinois, Schutt Sports, Inc. -- fka
Schutt Manufacturing Company, Schutt Sports Manufacturing Co.,
Schutt Sports Distribution Company, and Schutt Athletic Sales
Company -- and its affiliates manufactured team sporting
equipment, primarily for football, baseball and softball.
Schutt Sports filed for Chapter 11 bankruptcy protection on
September 6, 2010 (Bankr. D. Del. Case No. 10-12795). The Company
was forced into Chapter 11 by a $29 million patent-infringement
judgment in favor of competitor Riddell Inc.
Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serves
as the Debtor's bankruptcy counsel. Ernst & Young is the
Debtor's financial advisor. Oppenheimer & Co., Inc., is the
Debtor's investment banker. The Official Committee of Unsecured
Creditors tapped Lowenstein Sandler PC as its counsel.
The Debtor estimated its assets and debts at $50 million to
$100 million as of the Petition Date.
Platinum Equity in December 2010 completed the acquisition of
substantially all the assets of Schutt Sports through a
transaction conducted under Section 363 of the U.S. Bankruptcy
Code, and Schutt Sports, Inc.'s Chapter 11 estate changed its
name to SSI Liquidating, Inc.
SEA2O INC: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: SEA2O Inc
1215 120th Avenue NE, Suite 110
Bellevue, WA 98005
Bankruptcy Case No.: 11-11265
Chapter 11 Petition Date: February 7, 2011
Court: U.S. Bankruptcy Court
Western District of Washington (Seattle)
Debtor's Counsel: Jerome Shulkin, Esq.
SHULKIN HUTTON INC, PS
7900 SE 28th Street, Suite 302
Mercer Island, WA 98040
Tel: (206) 623-3515
E-mail: mepelbaum@shulkin.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Nanci Yi, chairman.
SERVICEMASTER CO: S&P Puts 'B+' Rating on Tranche B Revolver
------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned ratings
to Memphis, Tenn.-based The ServiceMaster Co.'s (B/Stable/--) new
$229 million tranche B revolving credit facility due 2014. S&P
rated the tranche B revolver 'B+' (one notch above S&P's 'B'
corporate credit rating on the company) with a recovery rating of
'2', indicating its expectation of substantial (70%-90%) recovery
in the event of a payment default.
ServiceMaster's existing $500 million revolving credit facility
maturing in 2013 has been amended. As a result of this amendment,
the total facility size has been reduced to approximately
$442 million, with about $213 million of the amended total
commitment continuing to mature in 2013 (tranche A) and about
$229 million now maturing in 2014 (tranche B). Letters of credit
availability under the facility remains at $75 million.
ServiceMaster had about $3.96 billion of debt outstanding as of
Sept. 30, 2010.
The corporate credit rating on ServiceMaster is 'B' and the rating
outlook is stable. The rating reflects the company's highly
leveraged financial profile, the sensitivity of a majority of its
businesses to weak economic conditions and reduced consumer
spending, and its exposure to unfavorable weather conditions in
two of its key business segments. Strong liquidity mitigates
these negative factors. S&P believes ServiceMaster does benefit
from its business positions in its fragmented and competitive end
markets, which have historically translated into good cash flow
generation from a fairly diverse portfolio of services.
S&P characterizes ServiceMaster's business risk profile as fair
and its financial risk profile as highly leveraged. S&P estimate
that adjusted leverage would decline to the 7.5x area by the end
of 2010 under a scenario of flat-to-modest sales increases and
margins remaining near current levels. The stable outlook
reflects S&P's expectation that ServiceMaster will maintain strong
liquidity by continuing to generate meaningful free cash flow
(after capital spending).
Ratings List
ServiceMaster Co. (The)
Corporate Credit Rating B/Stable/--
New Rating
ServiceMaster Co. (The)
Tranche B revolving credit facility
due 2014 B+
Recovery Rating 2
SINOBIOMED INC: Chris Metcalf Resigns as Chairman and Director
--------------------------------------------------------------
On January 28, 2011, Mr. Chris Metcalf resigned as Chairman and a
Director of Sinobiomed Inc. effective immediately without any
disagreement with the Company on any matter relating to the
Company's operations, policies or practices.
In addition, on January 28, 2011, Mr. George Yu was appointed as a
Director of Sinobiomed, which fills the vacancy created by the
resignation of Mr. Chris Metcalf.
Mr. Yu, age 38, is currently the President and CEO of the Company
since September 1, 2010, and has over 15 years of management and
corporate development experience. Prior to his appointment, he
served, from September 2009 to August 2010, as the Managing
Partner, Bay2Peak S.A., a financial advisory and investment
management firm, and from September 2005 to August 2009, as the
Managing Partner of Bay2Peak Strategies, Ltd., a financial
advisory and investment management firm, where he was responsible
in both instances for the sourcing and execution of transactions,
including financings, mergers and acquisitions, and investor
relations. Prior to that, Mr. Yu served in various operational
management and consulting roles and has worked with small-cap
hedge and venture capital funds in emerging markets and investment
banking at Lehman Brothers. Mr. Yu holds a Bachelor of Science
Degree from the University of Tuebingen, Germany, and a Masters in
Business Administration, cum laude, in Finance and Economics from
the Columbia Business School.
Mr. Yu is not, and has not been, a participant in any transaction
with the Company that requires disclosure under Item 404(a) of
Regulation S-K. There is no family relationship between Mr. Yu
and any director, executive officer, or person nominated or chosen
by the Company to become a director or executive officer.
About Sinobiomed
Sinobiomed Inc. formerly CDoor Corp. (OTC BB: SOBM)
-- http://www.sinobiomed.com/-- was incorporated in the State of
Delaware. The Company is a Chinese developer of genetically
engineered recombinant protein drugs and vaccines. Based in
Shanghai, Sinobiomed currently has 10 products approved or in
development: three on the market, four in clinical trials and
three in research and development. The Company's products respond
to a wide range of diseases and conditions, including: malaria,
hepatitis, surgical bleeding, cancer, rheumatoid arthritis,
diabetic ulcers and burns, and blood cell regeneration.
Going Concern Doubt
Schumacher & Associates Inc., in Denver, expressed substantial
doubt about Sinobiomed Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended December 31, 2007. The auditing
firm reported that the Company has experienced losses since
commencement of operations and has negative working capital and a
stockholders' deficit.
The Company is in the process of researching, developing, testing
and evaluating proposed new pharmaceutical products and has not
yet determined whether these products are technically or
economically feasible. Management's plan is to actively search
for new sources of capital, including government and non-
government grants toward research projects and new equity
investment.
SOUTH EDGE: KB Home Might Cover $180M Loan In South Edge Ch. 11
---------------------------------------------------------------
Bankruptcy Law360 reports that KB Home Inc. might be on the hook
for $180 million after a federal judge denied South Edge LLC's
attempt to nix an involuntary bankruptcy petition brought against
it by JPMorgan Chase & Co., Credit Agricole and Wells Fargo & Co.
Las Vegas, Nevada-based South Edge LLC owns the Inspirada project,
an uncompleted 2,000-acre residential development in Henderson,
Nevada, about 16 miles (26 kilometers) southeast of Las Vegas.
JPMorgan Chase Bank N.A. and two other lenders filed an
involuntary petition on December 9, 2010, in Las Vegas against
South Edge LLC (Bankr. D. Nev. Case No. 10-32968).
SPRINGFIELD MISSIONARY: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Springfield Missionary Baptist Church Inc
227 Lenox Avenue
New York, NY 10027
Bankruptcy Case No.: 11-10474
Chapter 11 Petition Date: February 7, 2011
Court: U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtor's Counsel: Gary C. Fischoff, Esq.
STEINBERG, FINEO, BERGER & FISCHOFF, P.C.
40 Crossways Park Drive, Suite 104
Woodbury, NY 11797
Tel: (516) 747-1136
Fax: (516) 747-0382
E-mail: gfischoff@sfbblaw.com
Scheduled Assets: $10,350
Scheduled Debts: $1,164,105
The Company did not file a list of creditors together with its
petition.
The petition was signed by Lourine Nelson, presiding officer.
STATION CASINOS: FTI Seeks $560,000 in Fees and Expenses
--------------------------------------------------------
FTI Consulting Inc. filed with the Bankruptcy Court its final
application for compensation and reimbursement of expenses. FTI
Seeks $556,602 in fees and $4,377 in expenses for work performed
in Station Casinos Inc.'s Chapter 11 cases on July 28, 2009 to
August 31, 2010.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No.
09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal
counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck,
LLP, as regulatory counsel; and Lewis and Roca LLP is local
counsel. Lazard Freres & Co. LLC is investment banker and
financial advisor. Kurtzman Carson Consultants LLC is the claims
and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart,
Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New
York, serves as counsel to the Official Committee of Unsecured
Creditors.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: To Offer More Than 1,000 Jobs
----------------------------------------------
Station Casinos said last month it will be filling more than 1,000
positions throughout the company in its ongoing commitment to
enhancing guest service levels. The news comes on the heels of
the company hiring more than 160 positions back in October 2010.
Of the more than 1,000 jobs, approximately 500 will be full time
positions and the remainder will be part time positions.
"We know we're in the most competitive gaming market in the world
and our guests have a lot of choices when it comes to
entertainment, which is why we need to ensure that we earn our
guests' loyalty each and every day by providing the best service
and value possible," said Kevin Kelley, Chief Operating Officer of
Station Casinos. "The increase in staffing will allow us to
continue to enhance our service levels and deliver on our
commitment to exceed our guests' expectations."
The jobs are in guest service including food and beverage and
hotel management, dealers, slots service ambassadors, security and
food and beverage positions such as cooks and food servers to name
a few. As part of the hiring campaign, staffing will be needed
for the Grand Cafes that are returning to a variety of our
properties including Sunset Station, Boulder Station, Texas
Station and Santa Fe Station.
The first step in the hiring process is to apply online at
http://www.stationcasinos.com/and click on "careers" to complete
an application in either English or Spanish.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No.
09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal
counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck,
LLP, as regulatory counsel; and Lewis and Roca LLP is local
counsel. Lazard Freres & Co. LLC is investment banker and
financial advisor. Kurtzman Carson Consultants LLC is the claims
and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart,
Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New
York, serves as counsel to the Official Committee of Unsecured
Creditors.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STATION CASINOS: U.S. Govt. Opposes Zero Tax Liability Motion
-------------------------------------------------------------
Grant J. Milleret, accountant and sole owner of Grant J. Milleret
CPA; and Thomas M. Friel, chief accounting officer and treasurer
of Station Casinos, Inc., filed separate declarations in support
of the Debtors' motion seeking for a determination that there will
be no federal tax liability arising as a consequence of the
consummation of the confirmed Plan of Reorganization and the
related approved Restructuring Transactions.
As reported in the Dec. 30, 2010 edition of the Troubled Company
Reporter, Station Casinos Inc. and its units are asking the
Bankruptcy Court to determine that there will be no federal tax
liability arising as a consequence of the consummation of the
confirmed Plan of Reorganization and the related approved
Restructuring Transactions. To the extent any other tax liability
arises as a consequence of the consummation of the SCI Plan and
any of the Restructuring Transactions, the Debtors ask the Court
to determine that a cash reserve for $5 million to satisfy any tax
liabilities is sufficient.
U.S. Government Wants Motion Dismissed
The U.S. Department of Justice asks the Court to dismiss the
Debtors' motion complaining that the motion fails to present a
justiciable case or controversy as required by Article III of the
United States Constitution.
The Government objects to any order determining Debtors'
prospective federal income tax liability for the period in which
the SCI Plan and Restructuring Transactions are consummated, and
any determination as to any other taxpayer regarding federal tax
liabilities arising from those transactions.
The Government seeks dismissal of the motion on the grounds that
(a) the Debtors' Motion does not fall within the scope of Section
505(a) or 1146(d) of the Bankruptcy Code and, therefore, there is
no waiver of sovereign immunity; and (b) the Debtors' Motion does
not fall within the Court's subject matter jurisdiction. The
Government also asserts that the Court lacks jurisdiction to
determine federal tax liabilities dependent on future events, for
entities other than the Debtor, and for periods that are not yet
closed.
The Government asks the Court to schedule a hearing on
February 17, 2011, to consider the parties' arguments regarding
jurisdiction only.
Kari M. Larson, Esq., serves as trial attorney for Tax Division of
the U.S. Department of Justice.
Debtors Talk Back
All of the arguments in the Government's Response fail because
none of them is supported by the relevant applicable law, Paul
Aronzon, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los
Angeles, California, tells Judge Zive on behalf of the Debtors.
Mr. Aronzon contends that the Government, in arguing that the
Court should not grant the Motion because, among other things, the
requested tax determination "is only 'necessary' because Debtors
drafted the Confirmation Order and Findings and Conclusions to
make it so," the U.S. either is being remarkably naive or is
conveniently ignoring the detailed and difficult history in the
bankruptcy cases.
"As a threshold matter, the U.S. is simply wrong in its assertion
that the tax determination is a problem of the Debtors' own making
that therefore can easily be undone," Mr. Aronzon asserts. He
points out that throughout the first half of 2010, the Debtors and
their lenders engaged in a robust, competitive and frequently
contentious sale process for the "Opco assets."
The asset purchase agreement, pursuant to which the Debtors agreed
to sell the Opco assets to FG Opco Acquisitions, LLC, contained an
express requirement, as insisted upon by the Purchaser, that the
Confirmation Order contain a finding that "no administrative Tax
claim(s) for income tax will result from or arise out of the
implementation of the transactions contemplated by this Agreement
or the Plan, other than . . . alternative minimum Taxes that in
the aggregate are less than $15 million," Mr. Aronzon relates.
Thus, Mr. Aronzon argues, far from being "created" by the Debtors,
as the U.S. argues, the Tax Determination Requirement is an
express condition imposed upon the Debtors by the Purchaser that
the Debtors must satisfy before the Purchaser is obligated to
close its acquisition of the Opco assets. He adds that the
condition was explicitly identified in the SCI Plan and the
Disclosure Statement and also was discussed on the record at the
Confirmation Hearing as a necessary step towards consummation of
the SCI Plan.
The Government Response completely ignores this simple reality
that the Debtors face and have fully disclosed throughout the
cases, Mr. Aronzon points out.
Mr. Aronzon further contends that the U.S.' assertion that a
"better" alternative to the Motion would be for the Debtors to
simply renegotiate the terms of the SCI Plan and the related
Restructuring Transactions likewise ignores the evolution of the
cases. He contends that any suggestion that a "renegotiation" of
the deals that have been reached represents a "better" -- or even
remotely viable -- alternative ignores that history and gravely
underestimates the complexity of the compromises that have been
reached to date in the cases. He adds that the U.S.' suggestion
that the Debtors better alternative is to continue to wait for the
IRS to rule on the Debtors' request for a private letter ruling on
the loss disallowance rules under Section 267 of the Internal
Revenue Code also similarly ignores the history in the cases.
Prior to filing their response, the Debtors sought and obtained
the Court's permission to file a single brief that will contain
their reply to the U.S. Government opposition to the Section 505
Motion, and the Debtors' opposition to the Government's Motion to
Dismiss, and the single brief will not exceed 30 pages, excluding
tables of contents and tables of authorities. The Debtors believe
that the single brief will be easier to follow for all parties
including the Court. The Local Bankruptcy Rules for the District
of Nevada provide a 15-page limit for briefs filed in opposition
to motions and for replies to oppositions.
About Station Casinos
Station Casinos, Inc., is a gaming and entertainment company that
currently owns and operates nine major hotel/casino properties
(one of which is 50% owned) and eight smaller casino properties
(three of which are 50% owned), in the Las Vegas metropolitan
area, as well as manages a casino for a Native American tribe.
Station Casinos Inc., together with its affiliates, filed for
Chapter 11 protection on July 28, 2009 (Bankr. D. Nev. Case No.
09-52477). Milbank, Tweed, Hadley & McCloy LLP serves as legal
counsel in the Chapter 11 case; Brownstein Hyatt Farber Schreck,
LLP, as regulatory counsel; and Lewis and Roca LLP is local
counsel. Lazard Freres & Co. LLC is investment banker and
financial advisor. Kurtzman Carson Consultants LLC is the claims
and noticing agent. Brad E Scheler, Esq., and Bonnie Steingart,
Esq., at Fried, Frank, Shriver, Harris & Jacobson LLP, in New
York, serves as counsel to the Official Committee of Unsecured
Creditors.
In its bankruptcy petition, Station Casinos said that it had
assets of $5,725,001,325 against debts of $6,482,637,653 as of
June 30, 2009. About 4,378,929,997 of its liabilities constitute
unsecured or subordinated debt securities.
Bankruptcy Creditors' Service, Inc., publishes Station Casinos
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Station Casinos Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
STL MANAGEMENT: Case Summary & 18 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: STL Management, LLC
P.O. Box 2010
Mount Pleasant, SC 29465
Bankruptcy Case No.: 11-00756
Chapter 11 Petition Date: February 7, 2011
Court: U.S. Bankruptcy Court
District of South Carolina (Charleston)
Judge: David R. Duncan
Debtor's Counsel: Felix B. Clayton, Esq.
COASTAL LAW, LLC
P.O. Box 1044
Beaufort, SC 29901
Tel: (843) 379-9363
Fax: (843) 379-9844
E-mail: butch@butchclaytonlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 18 largest unsecured creditors
filed together with the petition is available for free
at http://bankrupt.com/misc/scb11-00756.pdf
The petition was signed by Robert Anies, vice president.
STONEMOR PARTNERS: Loan Upsizing Won't Affect Moody's 'B2' Rating
-----------------------------------------------------------------
Moody's Investors Service announced that StoneMor Partners L.P.'s
recently priced public offering and credit facility upsizing will
not immediately affect its B2 Corporate Family Rating, B3 senior
unsecured note rating or SGL-3 speculative grade liquidity rating.
The last rating action was on November 12, 2009 when Moody's
assigned to StoneMor Partners a B2 CFR, a B3 rating to
$150 million of proposed senior notes and an SGL-3 speculative
grade liquidity rating.
StoneMor is the second largest owner and operator of cemeteries in
the United States. As of September 30, 2010, StoneMor operated
256 cemeteries and 63 funeral homes across 26 states and in Puerto
Rico. The company reported revenues of approximately $186 million
for the twelve month period ended September 30, 2010.
STAN LEE MEDIA: Court Rejects Bid to Vacate Orders in Marvel Suit
-----------------------------------------------------------------
In Stan Lee, v. Marvel Enterprises, Inc. and Marvel Characters,
Inc., Case No. 02-Civ.-8945 (S.D.N.Y.), District Judge Robert W.
Sweet denied Stan Lee Media, Inc.'s request to vacate an order of
dismissal of April 27, 2005; to intervene and to substitute SLMI
for plaintiff Stan Lee; for leave to file an amended complaint
dating back to November 12, 2002, the date Mr. Lee filed his
complaint; and to intervene to vacate the Court's 2004 order
sealing certain documents.
Judge Sweet said the motions constitute an effort to reverse
certain results of agreements and litigation reaching back to
before 1998 involving Mr. Lee and his relations with the Marvel
Enterprises, Inc. and Marvel Characters, Inc., which resulted in
highly successful Marvel comic book characters such as Spider-Man,
The Fantastic Four, The Incredible Hulk, X-Men, Daredevil, Silver
Surfer, Iron Man and others -- the Characters -- including three
certain actions in the District Court, the instant action, Stan
Lee Media, Inc. v. Marvel Entertainment, Inc., 07 Civ. 2238, and
Abadin et al. v. Marvel Entertainment, Inc., 09 Civ. 0715. These
parties have also litigated actions in the United States District
Court for the Central District of California, the Bankruptcy Court
of the Southern District of New York and the Colorado state
courts. Because of the success of the Characters and the
conflicting claims concerning their rights, it has been difficult
to achieve finality.
Judge said his ruling "is one such effort" to achieve finality.
Mr. Lee is a veteran comic book writer and editor who created or
co-created many of America's best known comic book characters.
For decades, Mr. Lee was employed by Marvel and its predecessors.
In 1998, after Marvel terminated Mr. Lee's prior employment
agreement, Mr. Lee began to work for a new company, Stan Lee
Enterprises, the alleged predecessor to SLMI. The SLE/Lee
Employment Agreement, however, recognized that Mr. Lee would be
spending 10 to 15 hours per week working for Marvel pursuant to an
agreement between Mr. Lee and Marvel. In January 2001, Mr. Lee
terminated the SLE/Lee Employment Agreement based on SLMI's
material breaches, including SLMI's failure to pay his salary.
Marvel, currently Marvel Entertainment, LLC, successor by merger
of Marvel Entertainment, Inc., which is formerly known as Marvel
Enterprises, Inc., is a publisher of comic books and holder of
rights with respect to the Characters.
The complaint was filed by Mr. Lee on November 12, 2002, and
sought damages, declaratory relief, specific performance and an
accounting arising from Marvel's alleged breach of the Marvel/Lee
Employment Agreement entered into in November 1, 1998. After
extensive discovery, both parties filed motions for partial
summary judgment. An opinion and order dated January 17, 2005,
granted in part and denied in part each of the parties' summary
judgment motions. The parties agreed to the terms of a settlement
and on April 27, 2005, a stipulation and order dismissing with
prejudice all claims asserted in the action was entered.
SLMI has contended that the January 17 and April 27 Orders should
be vacated, asserting that (1) the orders are void under F.R.C.P
60(b)(4); (2) that the orders should be set aside under either
Rule 60(b)(3) or (d)(3) because they were the product of a fraud
on the court; (3) that applying the Orders prospectively would be
inequitable under Rule 60(b)(5); and (4) that the Orders were
issued while SLMI was in bankruptcy under Rule 60(b)(6).
Judge Sweet said SLMI does not qualify for relief pursuant to Rule
60(b)(4), because the District Court properly exercised federal
subject matter jurisdiction over the private dispute between Mr.
Lee and Marvel until the parties voluntarily resolved their
dispute and stipulated to dismiss their claims with prejudice.
SLMI has contended that it, rather than Mr. Lee, was the real
party in interest and, as such, the court lacked subject matter
jurisdiction. However, there is no evidence that SLMI was the
real party in interest with respect to Mr. Lee's claim for
compensation under the Marvel/Lee Employment Agreement. There is
no language in the SLE/Lee Employment Agreement granting SLMI any
rights to Mr. Lee's salary, profit participation or other
compensation from Marvel. The court had subject matter
jurisdiction over Mr. Lee's claims against Marvel pursuant to 18
U.S.C. Sec. 1332, and SLMI does not appear to contend otherwise.
A copy of Judge Sweet's February 4, 2011 opinion is available at
http://is.gd/73yMQTfrom Leagle.com.
Attorneys for Stan Lee are:
Steven J. Shore, Esq.
Ira Brad Matetsky, Esq.
William Andrew Jaskola, Esq.
GANFER & SHORE, LLP
360 Lexington Avenue, 14th Floor
New York, NY 10017
Telephone: 212-922-9250
Facsimile: 212-922-9335
Attorneys for Marvel Entertainment, LLC, are
David Fleischer, Esq.
Sarah Jacobson, Esq.
HAYNES AND BOONE, LLP
30 Rockefeller Plaza, 26th Floor
New York, NY 10112
Telephone: 212-659-4989
Facsimile: 212-884-9567
E-mail: david.fleischer@haynesboone.com
sarah.jacobson@haynesboone.com
- and -
Jodi Aileen Kleinick, Esq.
PAUL, HASTINGS, JANOFSKY & WALKER, LLP
Park Avenue Tower
75 E. 55th Street, First Floor
New York, NY 10022
Telephone: (212) 318-6751
Facsimile: (212) 230-7691
E-mail: jodikleinick@paulhastings.com
Attorneys for Intervenor Stan Lee Media, Inc., are:
Raymond James Dowd, Esq.
Luke McGrath, Esq.
DUNNINGTON, BARTHOLOW & MILLER, LLP
1359 Broadway, Suite 600
New York, NY 10018
Telephone: 212-682-8811
Facsimile: 212-661-7769
E-mail: dbm@dunnington.com
About Stan Lee Media
Stan Lee Media Inc. was placed into Chapter 11 bankruptcy by Stan
Lee in 2001 after the dot-com bust. It emerged in November 2006,
beginning a titanic battle between shareholders and the Company's
founder, Mr. Lee.
About Marvel Entertainment
With a library of over 5,000 characters built over more than 60
years of comic book publishing, Marvel Entertainment, Inc. --
http://www.marvel.com/-- is one of the world's most prominent
character-based entertainment companies. Marvel utilizes its
character franchises in licensing, entertainment (via Marvel
Studios) and publishing (via Marvel Comics), with emphasis on
feature films, home DVD, consumer products, video games, action
figures and role-playing toys, television and promotions.
Marvel's strategy is to leverage its franchises in a growing array
of opportunities around the world.
Marvel filed for chapter 11 bankruptcy on Dec. 27, 1996 (Bankr. D.
Del. Case No. 96-_____), to implement a proposed $525 million
recapitalization. Marvel's filing did not include Marvel's Panini
subsidiary, which is headquartered in Italy. In conjunction with
the chapter 11 filing, a bank group led by Chase Manhattan Bank
agreed to provide Marvel with $100 million of debtor-in-
possession financing.
Marvel's plan of reorganization was consummated on Oct. 18, 1998.
The plan was confirmed on July 31, 1998. Pursuant to the plan,
MEG Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of the company, merged with and into Marvel, with
Marvel continuing as the surviving corporation and as a wholly
owned subsidiary of the registrant. As a result of the merger,
the company acquired all of the tangible and intangible assets of
Marvel.
STRATEGIC AMERICAN: Closing of Purchase & Sale Pact Postponed
-------------------------------------------------------------
Strategic American Oil Corporation announced that it has
rescheduled the closing of the recently executed Purchase & Sale
Agreement to acquire a private Texas oil and gas Company, which
owns and operates producing oil and natural gas properties and
related facilities located in Galveston Bay, Texas for $9.9
million.
The transaction is subject to completion of financing, as well as
customary closing conditions and adjustments. The effective date
for the purchase is Jan. 1, 2011, with closing now anticipated to
be Feb. 2, 2011.
About Strategic American Oil
Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC
BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth
stage oil and natural gas exploration and production company with
operations in Texas, Louisiana, and Illinois. The Company's team
of geologists, engineers, and executives leverage 3D seismic data
and other proven exploration and production technologies to locate
and produce oil and natural gas in new and underexplored areas.
The Company's balance sheet at October 31, 2010, showed
$1.89 million in total assets, $2.96 million in total liabilities,
and a stockholders' deficit of $1.07 million.
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about Strategic American Oil's ability to continue as a going
concern following the Company's results for the fiscal year ended
July 31, 2010. The independent auditors noted that the Company
has suffered losses from operations and has a working capital
deficit.
SUSPECT DETECTION: Amends Q2 2010 Report; Posts $166,080 Net Loss
-----------------------------------------------------------------
Suspect Detection Systems Inc. filed on February 3, 2011,
amendment no. 1 to its quarterly report for the three months ended
June 30, 2010.
Subsequent to December 31, 2009, management of the Company
determined that in accordance with FASB ASC 810-10-45, the
carrying value of the goodwill, and the related accumulated
deficit, and additional paid-in capital, and noncontrolling
interest for the period ended December 31, 2009, resulting from
the exchange of 3,199,891 shares of common stock of the Company
for 170,295 ordinary shares of SDS - Israel for an additional
seven percent interest in the equity ownership of SDS - Israel
(where the Company already owned the controlling interest), was
overstated by $291,690 for goodwill, overstated by $478,125 for
the additional paid in capital, overstated by $1,960 for
accumulated deficit, and overstated by $184,475 for the
noncontrolling interest.
The Company reported a net loss of $166,080 on $717,403 of revenue
for the three months ended June 30, 2010, compared with a net loss
of $98,331 on $254,759 for the same period of 2009.
At June 30, 2010, the Company's balance sheet (restated) showed
$1.7 million in total assets, $848,235 in total liabilities, and
stockholders' equity of $853,378.
A full-text copy of the Form 10-Q/A is available for free at:
http://researcharchives.com/t/s?72e1
About Suspect Detection
Based in Jerusalem, Israel, Suspect Detection Systems Inc. was
incorporated in the State of Delaware on October 5, 2006. SDS
specializes in the development and application of proprietary
technologies for law enforcement and border control, including
counter terrorism efforts, immigration control and drug
enforcement, as well as human resource management, asset
management and the transportation sector.
* * *
As reported in the Troubled Company Reporter on April 22, 2010,
Davis Accounting Group P.C., in Cedar City, Utah, expressed
substantial doubt about Suspect Detection's ability to continue as
a going concern, following its 2009 results. The independent
auditors noted that the Company has not established sufficient
sources of revenue to cover its operating costs and expenses. As
such, it has incurred an operating loss since inception. Further,
as of December 31, 2009, and 2008, the cash resources of the
Company were insufficient to meet its planned business objectives.
SUSPECT DETECTION: Amends Q3 2010 Report; Posts $122,400 Net Loss
-----------------------------------------------------------------
Suspect Detection Systems Inc. filed on February 3, 2011,
amendment no. 1 to its quarterly report for the three months ended
September 30, 2010.
Subsequent to December 31, 2009, management of the Company
determined that in accordance with FASB ASC 810-10-45, the
carrying value of the goodwill, and the related accumulated
deficit, and additional paid-in capital, and noncontrolling
interest for the period ended December 31, 2009, resulting from
the exchange of 3,199,891 shares of common stock of the Company
for 170,295 ordinary shares of SDS - Israel for an additional
seven percent interest in the equity ownership of SDS - Israel
(where the Company already owned the controlling interest), was
overstated by $291,690 for goodwill, overstated by $478,125 for
the additional paid in capital, overstated by $1,960 for
accumulated deficit, and overstated by $184,475 for the
noncontrolling interest.
The Company reported a net loss of $122,399 on $259,080 of revenue
for the three months ended September 30, 2010, compared with a net
loss of $283,312 on $401,512 of revenue for the same period of
2009.
At September 30, 2010, the Company's balance sheet (restated)
showed $2.1 million in total assets, $1.4 million in total
liabilities, and stockholders' equity of $695,190.
A full-text copy of the Form 10-Q/A is available for free at:
http://researcharchives.com/t/s?72e2
About Suspect Detection
Based in Jerusalem, Israel, Suspect Detection Systems Inc. was
incorporated in the State of Delaware on October 5, 2006. SDS
specializes in the development and application of proprietary
technologies for law enforcement and border control, including
counter terrorism efforts, immigration control and drug
enforcement, as well as human resource management, asset
management and the transportation sector.
* * *
As reported in the Troubled Company Reporter on April 22, 2010,
Davis Accounting Group P.C., in Cedar City, Utah, expressed
substantial doubt about Suspect Detection's ability to continue as
a going concern, following its 2009 results. The independent
auditors noted that the Company has not established sufficient
sources of revenue to cover its operating costs and expenses. As
such, it has incurred an operating loss since inception. Further,
as of December 31, 2009, and 2008, the cash resources of the
Company were insufficient to meet its planned business objectives.
TERRESTAR NETWORKS: Bonuses to Foster Sale Rather Than Plan
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that although TerreStar Networks Inc. has a confirmation
hearing set on March 4 for approval of a reorganization plan where
control would go to EchoStar Corp., the company is surveying the
market for a sale of the assets to bring creditors a larger
recovery. To stimulate company officers to achieve the best
possible result, the Debtor is proposing bonuses for top
executives. The hearing for approval of the bonuses is set for
Feb. 22.
According to the report, under the bonus plan, if there is a sale
with an implied value of $1.22 billion, executives will earn a
bonus pool of $6.5 million. If the value of a sale is
$1.25 billion or more, the bonus pool will grow to $8.3 million.
The pool will be divided among the top five executives and 10
other senior managers. In the case of a sale, the chief executive
officer will take home 30% of the pool while the 10 most junior
officers will split 25%. If all the officers take jobs with the
buyer, the minimum pool will be $2.3 million.
Mr. Rochelle relates that TerreStar is proposing an alternative
bonus program if the plan goes through. It pays less than if
there is a sale. If a target is met for the conservation of cash,
the alternative bonus plan will pay the officers a total of
$2.3 million, with the CEO receiving $531,250. The 10 most junior
executives will split up $615,000. The bonuses won't be paid
until after the plan is implemented. The target is based on cash
conservation up until the time the plan is implemented.
The Chapter 11 Plan
As reported in the Troubled Company Reporter, the Debtors have
filed a proposed Joint Chapter 11 Plan. The explanatory
disclosure statement has been approved by the Court as containing
"adequate information" pursuant to Section 1125(a) of the
Bankruptcy Code. Full-text copies of the Solicitation Versions of
the Plan and Disclosure Statement are available for free at:
http://bankrupt.com/misc/TSNFinalPlan.pdf
http://bankrupt.com/misc/TSNFinalDS.pdf
About TerreStar Networks
Reston, Va.-based TerreStar Corporation (NASDAQ: TSTR)
-- http://www.terrestar.com/-- is in the mobile communications
business through its ownership of TerreStar Networks, its
principal operating subsidiary, and TerreStar Global.
TerreStar Networks, in cooperation with its Canadian partners,
TerreStar Canada and TerreStar Solutions, majority-owned
subsidiaries of Trio 1 and 2 General Partnerships, plans to launch
an innovative wireless communications system to provide mobile
coverage throughout the United States and Canada using integrated
satellite-terrestrial smartphones and other devices. This system
build out will be based on an integrated satellite and ground-
based technology intended to provide communication service in most
hard-to-reach areas and will provide a nationwide interoperable,
survivable and critical communications infrastructure. The
Company intends to provide multiple communications applications,
including voice, data and video services.
As of June 30, 2010, the Company had four wholly owned
subsidiaries, MVH Holdings Inc., Motient Holdings Inc., TerreStar
Holdings Inc., and TerreStar New York Inc. Motient Ventures
Holding Inc., a wholly owned subsidiary of MVH Holdings Inc.,
directly holds approximately 89.3% and 86.5% interest in TerreStar
Networks and TerreStar Global, respectively.
TerreStar Networks Inc. and Its affiliates filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code in Manhattan (Bankr. S.D.N.Y. Lead Case No.
10-15446).
The Debtors' parent, TerreStar Corporation (NASDAQ: TSTR), is not
among the Chapter 11 filers.
Michel Wunder, Esq., Ryan Jacobs, Esq., and Jarvis Hetu, Esq., at
Fraser Milner Casgrain LLP and Ira Dizengoff, Esq., Arik Preis,
Esq., and Ashleigh Blaylock, Esq., at Akin Gump Strauss Hauer &
Feld LLP, serve as bankruptcy counsel to the Debtors. Blackstone
Advisory Partners LP is the financial advisor. The Garden City
Group, Inc., is the claims and noticing agent in the Chapter 11
cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel
to the Official Committee of Unsecured Creditors. FTI Consulting,
Inc., is the Committee's financial advisor
Bankruptcy Creditors' Service, Inc., publishes TerreStar
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by TerreStar Networks Inc. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TOWNSENDS INC: Peco is Lead Bidder with $44.7-Mil. Offer
--------------------------------------------------------
Dow Jones' DBR Small Cap reports that Peco Foods Inc. is in line
to kick off bidding for Townsends Inc.'s poultry-production
business with a $44.7 million lead offer.
As reported in the Feb. 1, 2011 edition of the Troubled Company
Reporter, Townsends has received approval for bid procedures for
an auction process to sell the Company, in whole or in part. The
process calls for bids by February 14, 2011, with the auction to
follow on February 15, 2011. A hearing to consider approval of
the sale is currently scheduled to be held before the Honorable
Christopher S. Sontchi, United States Bankruptcy Judge, on
February 17, 2011, with, if approved, a closing(s) anticipated
very shortly thereafter.
About Townsends Inc.
Founded in 1891, Townsends Inc. is a third-generation, family-
owned poultry company. Headquartered in Georgetown, Delaware,
Townsends operates production and processing facilities in
Arkansas and North Carolina. Townsends Inc. -- fka Townsend
Speciality Foods -- and several affiliates filed for Chapter 11
bankruptcy protection on December 19, 2010 (Bankr. D. Del. Lead
Case No. 10-14092). As of December 5, 2010, the Debtors disclosed
$131 million in total assets and $127 million in total debts.
Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell, serves
as the Debtors' bankruptcy counsel. McKenna Long & Aldridge LLP
serves as special counsel. Huron Consulting Group's Dalton T.
Edgecomb serves as the Debtors' chief restructuring officer. SSG
Capital Advisors, LLC, serves as investment banker. Donlin,
Recano & Company, Inc., is the Debtors' claims, noticing and
balloting agent.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee has tapped Lowenstein Sandler PC as its
counsel and J.H. Cohn LLP as its financial advisor.
TRADE UNION: Filed for Ch. 11 After Bank Cut Off Account
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Trade Union International Inc. filed for Chapter 11
protection after banks cut off access to its bank account and said
they would seek the appointment of a receiver to liquidate the
business.
Montclair, California-based Trade Union International Inc., filed
a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-13071) on
Jan. 31, 2011, in Riverside, California. It estimated assets and
debts of $10 million to $50 million. Affiliate Duck House, Inc.,
also filed (Bankr. C.D. Calif. Case No. 11-13072).
Mr. Rochelle relates that Trade Union imports and distributes
after-market aluminum wheels and truck accessories. Duck House
supplies sports-licensing products. Both are owned by Wen Ping
Chang and Mei Lien Chang. The companies import from China and
Taiwan. They owe $11.5 million to Cathay Bank and China Trust
Bank.
James C. Bastian, Jr., Esq., at Shulman Hodges & Bastian LLP, in
Foothill Ranch, California, represents the Debtors.
TRADE UNION: Asks for Court's Permission to Use Cash Collateral
---------------------------------------------------------------
Trade Union International, Inc., and Duck House, Inc., seek
authority from the U.S. Bankruptcy Court for the Central District
of California to use the cash collateral until February 25, 2011.
Cathay Bank and China Trust Bank have secured loan balance in the
amount of approximately $13 million and asserts a security
interest over all the assets of the Debtors. The Debtors' assets
are encumbered by liens in favor of a bank group. In addition to
the liens against the Debtors' assets, the Bank Group was provided
with these additional collateral: (i) a second priority deed of
trust against the real property at #1 Topline Plaza, 4651 State
Street, in Montclair, California; and (ii) a second priority deed
of trust against owners Wen Pin Chang and Mei Lien Chang's
personal residence at 2819 Crystal Ridge Road, Diamond Bar,
California. To preserve its collateral, the Bank Group maintained
a lockbox account into which all of the Debtors' receivables were
placed.
James C. Bastian, Jr., Shulman Hodges & Bastian LLP, explains that
the Debtors need the money to fund their Chapter 11 case, pay
suppliers and other parties. The Debtors will use the collateral
pursuant to a budget, a copy of which is available for free at:
http://bankrupt.com/misc/TRADE_UNION_budget.pdf
Debtors have proposed adequate protection to the Bank Group in the
form of monthly adequate protection payments. In order to
stabilize cash flow, direct that the Debtors' customers issue
payment directly to the Debtors instead of any lockbox so that
such funds may be deposited into the Debtor in Possession Accounts
established by the Debtors in compliance with the requirements of
the Office of the U.S. Trustee and only used in accordance with
the proposed budget.
The Bank Group is further protected in that during the period
covered by the budget, and as reflected in the budget, the Debtors
will be collecting accounts receivable and selling inventory in
the ordinary course of business (as opposed to a forced
liquidation sale) which will actually increase the Bank Group's
collateral position by over $600,000.
Montclair, California-based Trade Union International Inc.
supplies aftermarket aluminum alloy wheels and wheel and truck
accessories. It filed for Chapter 11 bankruptcy protection on
January 31, 2011 (Bankr. C.D. Calif. Case No. 11-13071). James C.
Bastian, Jr., Esq., at Shulman Hodges & Bastian LLP, serves as the
Debtor's bankruptcy counsel. The Debtor estimated its assets and
debts at $10 million to $50 million.
Affiliate Duck House, Inc., a California corporation, filed a
separate Chapter 11 petition on January 27, 2011 (Bankr. C.D.
Calif. Case No. 11-13072).
TRANSDIGM INC: S&P Assigns 'BB-' Rating to $1.55 Bil. Senior Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'BB-' issue-level rating, one notch higher than the corporate
credit rating, to TransDigm Inc.'s proposed $1.55 billion senior
secured term loan facility due February 2017. The recovery rating
is '2', indicating S&P's expectation of substantial (70%-90%)
recovery in a payment default scenario. The proposed term loan,
which will not have any financial maintenance covenants, will
refinance the company's existing $1.55 billion term loan maturing
Dec. 6, 2016; S&P will withdraw the ratings upon closing of the
transaction.
"The ratings on TransDigm reflect S&P's expectations that its
growing earnings and improving commercial aerospace market
conditions, combined with contributions by the recently acquired
McKechnie Aerospace Holdings Inc. (unrated), will enable the
company to delever and restore credit metrics to levels more
appropriate for the rating over the next 18 to 24 months, with
total debt to EBITDA declining to about 5x," said Standard &
Poor's credit analyst Roman Szuper. "The debt-financed purchase
of McKechnie, TransDigm's largest to date, has considerably
weakened its credit metrics and increased the financial risk
profile, which S&P now view as highly leveraged."
S&P views TransDigm's business risk profile as fair, stemming from
its participation in the cyclical and competitive commercial
aerospace industry, partly offset by efficient operations, very
strong profit margins, well-established position in niche markets
for highly engineered aircraft components, and product diversity
strengthened somewhat by the McKechnie acquisition.
Ratings List
TransDigm Inc.
Corporate credit rating B+/Negative/--
New Rating
TransDigm Inc.
$1.55 bil sr sec term loan due 2017 BB-
Recovery rating 2
TRICO MARINE: Creditors Object to Tannenbaum's Emergency Motion
---------------------------------------------------------------
BankruptcyData.com reports that Trico Marine Services' official
committee of unsecured creditors filed with the U.S. Bankruptcy
Court an objection to D.I.P. lender Tannenbaum's emergency motion
seeking approval of an order that a) terminates or modifies the
Debtor's use of cash collateral b) schedules a global auction for
the remaining unsold assets and c) lifts agreed injunctions
against exercising remedies against non-debtors.
According to the Committee, "The motion seriously exaggerates the
extent of the Debtors' default, if any, and seeks an
unconscionably drastic remedy that will penalize the other
creditors of this estate."
About Trico Marine
Headquartered in Texas, Trico Marine Services, Inc. --
http://www.tricomarine.com/-- provides subsea services, subsea
trenching and protection services, and towing and supply vessels.
Trico filed for Chapter 11 protection on August 25, 2010 (Bankr.
D. Del. Case No. 10-12653). John E. Mitchell, Esq., Angela B.
Degeyter, Esq., and Harry A. Perrin, Esq., at Vinson & Elkins LLP,
assist the Debtor in its restructuring effort. The Debtor
disclosed US$30,562,681 in assets and US$353,606,467 in
liabilities as of the Petition Date.
Affiliates Trico Marine Assets, Inc. (Bankr. D. Del. Case No.
10-12648), Trico Marine Operators, Inc. (Case No. 10-12649), Trico
Marine International, Inc. (Case No. 10-12650), Trico Marine
Cayman, L.P. (Case No. 10-12651), and Trico Holdco, LLC (Case No.
10-12652) filed separate Chapter 11 petitions.
Cahill Gordon & Reindell LLP is the Debtors' special counsel.
Alix Partners Services, LLC, is the Debtors' chief restructuring
officer. Epiq Bankruptcy Solutions is the Debtors' claims and
notice agent. Postlethwaite & Netterville serves as the Debtors'
accountant and Ernst & Young LLP serves as tax advisors.
Pricewaterhousecoopers LLC provides the independent accountants
and tax advisors for the Debtors.
Aside from the Cayman Islands holding company, Trico's foreign
subsidiaries were not included in the filing and will not be
subject to the requirements of the U.S. Bankruptcy Code.
The Official Committee of Unsecured Creditors tapped Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang,
Ziehl & Jones LLP, in Wilmington, Delaware, and Andrew K. Glenn,
Esq., David J. Mark, Esq., and Daniel A. Fliman, Esq., at
Kasowitz, Benson, Torres & Friedman LLP, in New York, as counsel.
TRONOX INC: Bankr. Ct. Remands Mount Canaan Suit to State Court
---------------------------------------------------------------
Bankruptcy Judge Allan L. Gropper granted Mount Canaan Full Gospel
Church, Inc.'s request remanding the case, Mount Canaan Full
Gospel Church, Inc., v. Kerr-McGee Refining Corporation, et al.,
Adv. Pro. No. 09-01537 (Bankr. S.D.N.Y.), and abstaining in favor
of the Circuit Court of Jefferson County, Alabama. Judge Gropper
denied Mount Canaan's request for relief from the automatic stay.
The automatic stay no longer applies, and relief therefrom is not
needed.
Mt. Canaan initiated the case at bar as a civil action in the
Alabama State Court on April 27, 2006. The complaint asserts
claims of negligence, trespass, nuisance, and strict liability for
environmental contamination caused by defendants' alleged
operation of a petrochemical facility in Birmingham, Alabama, with
resulting harm to Mt. Canaan's property. The defendants named in
the complaint are Kerr-McGee Corporation, Kerr-McGee Refining
Corporation, Triangle Terminal of Birmingham, Inc., Triangle
Refineries, Inc., Allied Energy Corporation, and Colonial Pipeline
Company. Colonial filed an answer to the complaint which named
Kerr-McGee Corporation, Tronox, Inc., and Triple S Refining
Corporation as cross-claim defendants. After Tronox's chapter 11
filings, the automatic stay halted further proceedings in the
Alabama State Court.
Kerr-McGee filed a notice of removal in the United States District
Court for the Northern District of Alabama on April 29, 2009,
asserting that bankruptcy jurisdiction existed under 28 U.S.C.
Sec. 1334(b) and that removal was proper under 28 U.S.C. Sec.
1452(a). Kerr-McGee then filed a motion to transfer venue to the
Bankruptcy Court.
A copy of the Bankruptcy Court's February 4, 2011 Decision and
Order Remanding Action is available at http://is.gd/G5C1cvfrom
Leagle.com.
Counsel for Mt. Canaan Full Gospel Church, Inc., are:
Robert B. Rubin, Esq.
D. Christopher Carson, Esq.
John R. Lehman II, Esq.
BURR & FORMAN LLP
420 North 20th Street, Suite 3400
Birmingham, AL 35203
Telephone: (205) 458-5351
Facsimile: (205) 244-5703
E-Mail: brubin@burr.com
ccarson@burr.com
Counsel for Kerr-McGee Corporation is:
BINGHAM McCUTCHEON LLP
Milissa A. Murray
2020 K Street NW
Washington, DC 20006-1806
Telephone: 202-373-6511
Facsimile: 202-373-6445
E-mail: m.murray@bingham.com
Counsel for Colonial Pipeline are:
James L. Goyer III, Esq.
Christopher J. Williams, Esq.
MAYNARD COOPER & GALE PC
1901 Sixth Avenue North
2400 Regions Harbert Plaza
Birmingham, AL 35203
Telephone: 205-254-1034
Facsimile: 205-254-1999
E-mail: jgoyer@maynardcooper.com
cwilliams@maynardcooper.com
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders were appointed in the cases.
The Creditors Committee retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Until September 30, 2008, Tronox was publicly traded on the New
York Stock Exchange under the symbols TRX and TRX.B. Since then,
Tronox has traded on the Over the Counter Bulletin Board under the
symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox
had 19,107,367 outstanding shares of class A common stock and
22,889,431 outstanding shares of class B common stock.
On November 17, 2010, the Bankruptcy Court confirmed the Debtors'
First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated November 5, 2010. Under the Plan, Tronox
reorganized around its existing operating businesses, including
its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi;
Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia.
UNIVERSITY MILLENNIUM: Involuntary Chapter 11 Petition Dismissed
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida has
dismissed with prejudice the petition for involuntary bankruptcy
under Chapter 11 of the Bankruptcy Code which was filed against
University Millennium Park LLC by Benjamin Handa and Frank Kristan
on December 2, 2010.
Benjamin Handa and Frank Kristan filed on December 2, 2010, an
involuntary Chapter 11 petition against University Millennium Park
LLC (Bankr. M.D. Fla. Case No. 10-29022).
VALEANT PHARMACEUTICALS: S&P Assigns 'BB+' Rating to Senior Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'BB+'
issue-level rating and '1' recovery rating to Valeant
Pharmaceuticals International's senior secured credit facility,
which consists of a $125 million revolver due 2015 and a
$1 billion term loan A also due 2015.
At the same time, S&P assigned a 'BB-' issue-level rating and '4'
recovery rating to Valeant's $500 million 6.75% notes due 2017 and
$700 million 7% notes due 2020.
At the same time, S&P affirmed its 'BB-' corporate credit rating
on the company as well as the 'B' issue-level rating and '6'
recovery rating on its subordinated notes due 2013. The outlook
is stable.
"S&P's ratings on Valeant reflect its fair business risk profile,
which in turn reflects a continued reliance on acquisitions for
growth and a weak internal research and development program," said
Standard & Poor's credit analyst Michael Berrien. It also
reflects its aggressive financial risk profile. These factors
outweigh the benefits of a broader product portfolio attained from
the recently closed merger with Biovail Corp. (unrated) and the
pending acquisition of PharmaSwiss.
"Valeant's fair business risk profile reflects the increased
portfolio diversity and expanded pipeline that results from its
merger with Biovail," said Mr. Berrien. Valeant Pharmaceuticals
is now comprised of five businesses: U.S. Neurology, U.S.
Dermatology, Canada & Australia, Branded Generics -- Europe, and
Branded Generics -- Latin America. Neurology and Dermatology
composed 56% of pro forma 2009 revenue. Following the acquisition
of the Canadian and remaining U.S. rights of Zovirax from
GlaxoSmithKline, Valeant's product portfolio now includes all of
the revenues from dermatology product Zovirax; Neurology products
include Wellbutrin XL, Ultram ER, and Xenazine.
VERMILION ENERGY: DBRS Assigns 'BB (Low)' Issuer Rating
-------------------------------------------------------
DBRS has assigned an Issuer Rating of BB (low) with a Stable trend
to Vermilion Energy Inc. (Vermilion or the Company). Pursuant to
DBRS's leveraged finance rating methodology, a recovery rating of
RR3 has also been assigned to Vermilion's proposed Unsecured
Notes, with a corresponding provisional instrument rating of BB
(low). The trends are Stable. The proposed unsecured notes,
estimated at $200 million and supported by subsidiary guarantees,
are structurally subordinated to Vermilion's secured bank
facility. Proceeds from these notes are expected to be primarily
used to pay down the bank facility. The assigned ratings reflect
the Company's strong financial profile and diverse operations,
with a considerable international presence (average of over 60% of
production since 2005). Vermilion also benefits from lower
royalties and higher netbacks in its international regions than in
western Canada where most of its peers are focused.
Substantial growth prospects exist through organic expansion,
as reaffirmed by the Company following its recent corporate
conversion. While a departure from the Company's previous
acquisition-driven incremental expansions, DBRS expects that
this growth target should be mostly achievable, underpinned by
the natural gas project in Corrib offshore Ireland (Corrib --
$137 million purchase cost in 2009) and stepped up Canadian
developments (primarily the Cardium crude oil project).
Corrib is scheduled for first gas by late 2012, adding about
30% to current volumes for a total 50% growth target by 2015, or
a 10% compound annual increase as indicated by the Company. The
Corrib project is relatively low risk and includes the related
infrastructure. Elsewhere, the Netherlands operations should add
to production in 2011. Furthermore, despite its 60% oil-weighted
operations, about 80% of the Company's production is linked to oil
prices, benefiting from current favourable prices, which will
likely prevail in the near to medium term.
However, there are limiting factors to the assigned ratings.
(1) During its growth phase, Vermilion's balance sheet leverage
will increase, with capex and dividends exceeding operating cash
flow at least until Corrib commences. DBRS expects the Company
to incur substantial capex over the next few years. Capital
spending of $460 million (similar to 2010 levels) is planned
in 2011 versus an annual average of about $310 million for
capex/acquisitions for 2005 to 2009. About $110 million of
2011 capex is earmarked for Corrib. The Corrib purchase also
includes a future payment expected at US$135 million, which DBRS
anticipates will be mostly debt funded. (2) The Company's plans
to maintain stable distributions by way of dividends per share at
$0.19 per month, unchanged since established in December 2007,
will likely result in over 50% payout based on operating cash flow
(56% for the 12 months ended September 30, 2010 (LTM)) for the
next two to three years, requiring external funding for any
potential funding shortfalls. However, the payout level is
comparable with the levels seen among other recently converted E&P
corporates. (3) The Company's ability to grow gross production
to the target levels of 45,000 boe/d to 50,000 boe/d is important
in enhancing economies of scale through achieving critical mass
levels. (4) Unlike its domestic operations, the Company's
international and offshore operations carry associated risks. It
is noteworthy that all assets are located in France, the
Netherlands, Australia and Ireland, all member states of the
Organization for Economic Cooperation and Development (OECD), with
low political risks. About one-third of current volumes and
nearly 30% of proved reserves in 2009 were in western Canada.
Canada will assume increasing importance, underscored by the
Cardium oil and liquid rich gas drilling potential in Alberta;
approximately $472 million, or 52%, of capex for 2010 and 2011 is
projected for Canada. (5) All-in operating costs ($16.54/boe (net
after royalties) for production and transportation in 9M 2010) and
general & administration expenses are relatively high, partly due
to the fairly self-sufficient international regions and the
effective prepayment of transportation costs for Corrib.
Based on WTI of US$78/b, similar to the 2010 average, debt-to-
cash flow could reach 1.9 times (0.74 times for LTM), which is
acceptable for the assigned ratings. Should crude oil prices
decline sharply from current levels (although this is not
expected in the near term), DBRS estimates that this ratio would
exceed 2.0 times, with debt-to-capital likely exceeding 40%.
DBRS expects the Company to have sufficient flexibility in its
capex and/or dividend distribution programs, in order to maintain
its financial metrics within the parameters of the assigned
ratings. Post-Corrib, the Company intends to maintain capex and
dividends within cash flow as in the past, at a target level of
70% to 80%, which is more conservative than many of its peers.
Management and directors continue to hold about 9% of shares,
aligning their interest with the other stakeholders. Hedging is
expected to remain part of the strategy to provide certain
stability in earnings and cash flow during the accelerated growth
phase (covering about 40% of 2011 planned volumes). In addition,
the bulk of production should continue to be priced to crude oil,
primarily, the Netherlands and Irish gas volumes. As Vermilion
expands, DBRS expects the Company to focus on improving capital
efficiency and its cost base. The dividend re-investment plan
reinstated in early 2010 should provide incremental funding
($27.4 million in 9M 2010), supplementing cash flow going forward.
With fairly stable production volumes, France and Australia should
continue to generate significant free cash flow to augment growth
in other regions, principally developments in Canada and the
advancement of Corrib. The Company also maintains sufficient
liquidity through its secured credit facility with $635 million of
borrowing base currently ($386 million available based on
outstandings at September 30, 2010). Any bond issuance should
extend the debt maturities beyond 2015.
Pursuant to our rating methodology for leveraged finance, DBRS has
created a hypothetical default scenario for the Company, which
includes estimating when and under what circumstances a default
could occur. As part of the analysis, DBRS estimates the
potential recovery value of the assets of the Company that would
be available to satisfy the various claims of creditors under this
scenario. The scenario assumes that the economy fails to recover
and falls into a recession again in 2012 with a sharp drop in
crude oil prices.
DBRS has determined the Company's estimated value at default using
both EBITDA multiples and per flowing barrel valuation
approaches, as default would likely result in the restructuring
of the Company or its acquisition by other industry participants,
as opposed to the forced sale of its individual assets under a
liquidation scenario. EBITDA multiples utilized are applied to
cyclically normalized EBITDA discounted at 45% at default,
incorporating the impact of lower crude oil prices and lower
production due to theoretical operational problems. The per
flowing barrel valuation approach applies a very conservative
value of $35,000 per boe/d of production with the estimated
volumes reduced 35% from year end projected levels. The
respective valuation considers the payment priority of the
specific debt instruments, and allocates proceeds accordingly.
DBRS has estimated the economic value of the components of the
enterprise at: (1) approximately $745 million using a 4.0 times
(x) multiple of normalized EBITDA at a 45% discount, as mentioned
above, and (2) approximately $750 million based on $35,000 per
flowing barrel value. Therefore, the recovery for the Unsecured
Notes is estimated in both cases to be between 50% and 70%,
resulting in an assigned recovery rating of RR3. The provisional
instrument rating of the Unsecured Notes is BB (low). Eliminating
the notching of the instrument rating of the Unsecured Notes,
instead of the customary one notch for an RR3 rating, largely
reflects the potential upsizing of the secured debt as estimated
by DBRS, in order to fund the accelerated growth to 2015, which
ranks ahead of the unsecured notes and would likely have an impact
on the future recovery prospects.
VITESSE SEMICONDUCTOR: Michael Self Discloses 7.9% Equity Stake
---------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission on February 1, 2011, each of Michael Self,
Lake Union Capital Management, LLC, and Lake Union Capital Fund,
LP disclosed beneficial ownership of 1,905,500 shares of common
stock of Vitesse Semiconductor Corporation representing 7.9% of
the shares outstanding. As of December 1, 2010, there were
23,986,531 shares of the Company's common stock outstanding.
About Vitesse
Based in Camarillo, California, Vitesse Semiconductor Corporation
(Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs,
develops and markets a diverse portfolio of semiconductor
solutions for Carrier and Enterprise networks worldwide.
In October 2009, Vitesse completed a debt restructuring
transaction that resulted in the conversion of 96.7% of the
Company's 2024 Debentures into a combination of cash, common
stock, Series B Preferred Stock and 2014 Debentures. With respect
to the remaining 3.3% of the 2024 Debentures, Vitesse settled its
obligations in cash. Additionally, Vitesse repaid $5.0 million of
its $30.0 million Senior Term Loan, the terms of which were
amended as part of the debt restructuring transactions.
The Company's balance sheet at Sept. 30, 2010, showed
$97.53 million in total assets, $118.73 million in total
liabilities, and a stockholders' deficit of $21.20 million.
WASHINGTON MUTUAL: Files Modified Plan of Reorganization
--------------------------------------------------------
Washington Mutual, Inc. has filed with the United States
Bankruptcy Court for the District of Delaware a Modified Sixth
Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of
the United States Bankruptcy Code and a related Supplemental
Disclosure Statement.
On January 7, 2011, the Bankruptcy Court entered an opinion
determining that the global settlement agreement (as amended, the
"Settlement Agreement"), among certain parties including WMI, the
Federal Deposit Insurance Corporation and JPMorgan Chase Bank,
N.A., upon which the Modified Plan is premised, and the
transactions contemplated therein, are fair, reasonable, and in
the best interests of WMI. Additionally, the Opinion and related
order denied confirmation, but suggested certain modifications to
the Company's Sixth Amended Joint Plan of Affiliated Debtors that,
if made, would facilitate confirmation. The Company believes that
the Modified Plan has addressed the Bankruptcy Court's concerns
and looks forward to returning to the Bankruptcy Court to seek
confirmation of the Modified Plan.
The Settlement Agreement also has been revised to conform to the
Modified Plan and the Opinion, and has been extended through
April 30, 2011. In addition, because certain creditors who were
previously parties to the Settlement Agreement determined not to
further extend the termination date of the Settlement Agreement,
the amended Settlement Agreement excludes such parties. Otherwise,
the amended Settlement Agreement's material financial terms remain
unchanged. The terms of the amended Settlement Agreement are
reflected in the Modified Plan and are described in the
Supplemental Disclosure Statement filed with the Bankruptcy Court.
The Modified Plan, Supplemental Disclosure Statement, and the
Settlement Agreement have the full support of the FDIC, JPMC,
certain holders of indebtedness issued by Washington Mutual Bank,
and the Official Committee of Unsecured Creditors, which was
appointed by the Bankruptcy Court.
Like the Original Plan, the Modified Plan contemplates, among
other things, distribution of funds to holders of allowed claims
against the estate in excess of approximately $7 billion,
including approximately $4 billion of previously disputed funds on
deposit with JPMC.
WMI believes implementation of the Settlement Agreement will
result in significant recoveries for the estate's stakeholders and
is in the best interests of the estate. WMI will seek
confirmation as soon as practicable in order to expedite the
distribution of funds to holders of allowed claims.
The Modified Plan and Supplemental Disclosure Statement filed
today contain, among other things, historical and financial
information regarding WMI and certain of its affiliates, a
description of the modifications to the Modified Plan, as well as
many of the technical matters required for the solicitation
process, such as descriptions of who will be eligible to vote on
and submit elections with respect to the Modified Plan and the
voting process itself.
WMI's Modified Plan and Supplemental Disclosure Statement are
available at http://www.kccllc.net/wamu/ The Supplemental
Disclosure Statement is subject to approval by the Bankruptcy
Court and will be considered at a hearing scheduled to occur in
March. The Modified Plan is subject to confirmation by the
Bankruptcy Court.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer &
Fled LLP in New York City and David B. Stratton, Esq., at Pepper
Hamilton LLP in Wilmington, Del., represent the Official Committee
of Unseucred Creditors. Stephen D. Susman, Esq., at Susman
Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A.,
represent the Equity Committee. Stacey R. Friedman, Esq., at
Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath &
Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which
acquired WaMu's assets prior to the Petition Date.
WASHINGTON MUTUAL: Confirmation Hearing for Revised Plan on May 2
-----------------------------------------------------------------
The American Banker, citing a Dow Jones report, says Washington
Mutual has set May 2 for its second attempt to get court approval
on a Chapter 11 exit plan that would pay more than $7B to
creditors, including four hedge funds.
In January 2011, Judge Mary F. Walrath rejected WaMu's bankruptcy
plan because it released from all legal liability the official
creditors committee and trustees involved in the case. The judge,
however, approved the central feature of the plan, a $10 billion
settlement with JPMorgan Chase & Co. and the Federal Deposit
Insurance Corp.
As reported by the Troubled Company Reporter on January 24, 2011,
Judge Walrath agreed to limit the issues Washington Mutual must
fight about when it tries again to win approval of its plan to pay
creditors more than $7 billion. Steven Church at Bloomberg News
reported that Judge Walrath set a March 28 hearing for WaMu's
second court hearing on its bankruptcy payment plan.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. Fred S. Hodera, Esq., at Akin Gump Strauss Hauer &
Fled LLP in New York City and David B. Stratton, Esq., at Pepper
Hamilton LLP in Wilmington, Del., represent the Official Committee
of Unseucred Creditors. Stephen D. Susman, Esq., at Susman
Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A.,
represent the Equity Committee. Stacey R. Friedman, Esq., at
Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath &
Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which
acquired WaMu's assets prior to the Petition Date.
ZANETT INC: Borrows Up to $10MM of Revolving Credit From PNC
------------------------------------------------------------
On January 27, 2011, Zanett, Inc., together with its wholly-owned
subsidiary, Zanett Commercial Solutions, Inc., entered into a new
Revolving Credit and Security Agreement with PNC Bank, National
Association, in its capacity as a lender and agent and the lenders
party thereto. The Credit Agreement allows for revolving credit
borrowings in a principal amount of up to $10.0 million. The
Agent acts as lender and letter of credit issuer under the Credit
Agreement. In general, borrowings under the Credit Agreement bear
interest at either (a) LIBOR plus the applicable margin, or (b)
the Base Rate plus the applicable margin.
The Loan will be used to provide for the Borrowers' business
purposes, including without limitation, to provide for the
Borrowers future working capital requirements. The Company and
ZCS are jointly and severally liable for all of the obligations of
each other under the Credit Agreement. The Loan is secured by
substantially all of the assets of the Borrowers. Subject to the
Agent's right to accelerate the Loan upon the occurrence of an
event of default, the Borrowers must repay the Loan on January 27,
2014. Events of default under the Credit Agreement include, but
are not limited to, the following:
(a) cross default in respect of certain significant contracts
of the Borrowers or any of the Borrowers' existing
indebtedness that has been subordinated to the Loan;
(b) the insolvency of any of the Borrowers or the appointment
of a receiver or trustee for any of the Borrowers;
(c) unsatisfied judgments in excess of certain threshold
amounts;
(d) a change of control of the Borrowers in certain
circumstances; and
(e) default under any of the Borrowers' covenants under the
Credit Agreement.
The Credit Agreement restricts the Borrowers from, among other
things, (a) guaranteeing any other person's obligations; (b)
incurring additional indebtedness, subject to certain exceptions
including the Borrowers' present indebtedness and indebtedness
that is unsecured and subordinated to the Loans; (c) granting any
other liens on the assets of the Borrowers; (d) entering into any
transactions outside the ordinary course of business; (e) entering
into transaction with affiliates, except on arms-length terms; and
(f) making any principal payments on subordinated debt unless the
Borrowers satisfy certain conditions.
The Credit Agreement also contains restrictions on making
investments in any other entity and amendments to the
organizational documents of the Borrowers. In addition, the
Borrowers may not declare or pay any dividend or other
distribution in cash or property, make any cash return of capital
to stockholders, make any cash liquidation preference payment or
cash distribution with respect to its capital stock, or make any
payments in cash or property in respect of any stock option, stock
bonus, or similar plans.
Notwithstanding the foregoing, the Company may pay cash dividends
after complying with certain conditions precedent set forth in the
Credit Agreement, including without limitation, (a) delivery of
audited financial statements that evidence compliance with the
conditions precedent set forth in the Credit Agreement; (b) that
the dividend not exceed the net profit for the relevant fiscal
year end; (c) that the average Undrawn Availability for the
relevant period be at least $1.5 million; (d) that no event of
default under the Credit Agreement will have occurred and be
continuing on the date of the payment of the dividend; and (e)
that the Borrowers be in compliance with the financial covenants
set forth in the Credit Agreement. There is also a restriction on
capital expenditures limiting the aggregate amount the Borrowers
may spend to $350,000 in each calendar year. Any unused excess
under this capital expenditures cap may not be carried over into
future calendar years.
In addition to the business covenants, there are financial
covenants in the Credit Agreement including a fixed charge
coverage ratio covenant under which the Borrowers are required to
maintain a fixed charge coverage ratio of not less than 1.10 to
1.0 as of the end of each relevant period.
A full-text copy of the Revolving Credit and Security Agreement is
available for free at http://ResearchArchives.com/t/s?72f1
On January 21, 2011, the Company's Chief Executive Officer,
Claudio Guazzoni, advanced the Company $100,000 to provide interim
working capital for the Company. The Company repaid Mr. Guazzoni
in full, without interest, on January 25, 2011.
About Zanett Inc.
Based in New York, Zanett Inc. is an information technology
company that provides customized IT solutions to Fortune 500
corporations and mid-market companies. Until the disposition of
Paragon Dynamics, Inc., the Company also provided those solutions
to classified government agencies.
At September 30, 2010, the Company had total assets of
$29,103,622, total liabilities of $21,165,812, and stockholders'
equity of $7,937,810.
Zanett Inc. in November 2010 said it remains in discussion
to replace its revolving credit facility with Bank of America.
Zanett was not in compliance with certain loan covenants as of
September 30, 2010. The credit facility matured on June 21, 2010.
The Company's line of credit was subject to a forbearance
agreement with BofA.
ZURVITA HOLDINGS: To Host "Freedom Crusade" on Feb. 18-20
---------------------------------------------------------
Zurvita Holdings, Inc. announced that it will host its "Freedom
Crusade" National Conference at the WestinTM Galleria in Houston,
Texas, from February 18th to February 20th, 2011.
The "Freedom Crusade" will introduce Zurvita's exciting new Health
& Wellness Division and stimulate free-ranging, thought-provoking
discussions on how the Company's unique and value-driven business
model creates tremendous opportunities for financial freedom,
including new opportunities for Zurvita representatives and
consultants in the trillion dollar health care market. At the
conference, Zurvita's leaders will discuss the Company's Health &
Wellness Division, its strategy, its goals, its potential, its
extraordinary, one-of-a-kind approach to health and wellness and
how the health care crisis in America has created a genuine
opportunity for Zurvita representatives and consultants to succeed
and to add value. This opportunity is being driven by ever-
increasing health care costs as well as increasing spending by the
"Baby Boomers", a group of some 78 million Americans who represent
50% of all U.S. spending, who are critically focused on feeling
better and living longer. Zurvita business leaders will
illustrate how Zurvita's approach to prevention and wellness
efforts, along with affordable health care benefits, offers
representatives both immediate and residual income opportunities
in this trillion dollar market.
"This is the perfect moment to introduce Zurvita's new Health &
Wellness Division," stated Zurvita Co-Chief Executive Officer Mark
Jarvis. "More than ever before, health care is an issue of vital
national importance, interest, and attention. Americans are
spending trillions of dollars a year on health care, yet staying
'healthy' remains an elusive and a staggering challenge for our
country. With the launch of Zurvita Health & Wellness, we are
taking a new approach to health care that we believe has never
been tried in our industry before. Our two-prong approach to
staying healthy and well gives Zurvita representatives a
tremendous financial opportunity by offering essential health and
prevention services to help individuals manage rising health care
costs."
Zurvita Co-Chief Executive Officer Jay Shafer stated, "Our
'Freedom Crusade' National Conference is devoted to informing and
engaging Zurvita representatives in a meaningful and compelling
way to take advantage of the ever-growing financial opportunites
Zurvita offers in major markets like health care, commercial
energy, and internet advertising. Our leaders and participants
will have the opportunity to create tremendous excitement and
momentum as they learn about Zurvita's new Health & Wellness
Division and examine Zurvita's products and services together."
To receive additional information about Zurvita and the Zurvita
"Freedom Crusade" National Conference, or to reserve a space,
please visit www.zurvita.com, or call 713.464.5002.
About Zurvita Holdings
Based in Houston, Tex., Zurvita Holdings, Inc., is a direct sales
marketing company offering high-quality products and services
targeting individuals, families and small businesses.
The Company's balance sheet at October 31, 2010, showed
$1.5 million in total assets, $6.5 million in total liabilities,
$4.5 million in redeemable preferred stock, and a stockholders'
deficit of $9.5 million.
Meeks International, LLC, in Tampa, Fla., expressed substantial
doubt about Zurvita Holdings' ability to continue as a going
concern, following the Company's results for the fiscal year ended
July 31, 2010. The independent auditors noted that the Company
has suffered recurring losses from operations and has not
generated sufficient cash flows from operations to meet its needs.
* Bankrupts Must Pay Most Possible, Circuit Court Rules
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Circuit Court of Appeals in Cincinnati ruled
in a 41-page opinion on Feb. 4 that whenever there is an ambiguity
about changes made in 2005 regarding individual bankruptcy, the
statute should be interpreted in a manner to fulfill Congress's
"purpose of maximizing creditor recoveries." The case is Carroll
v. Baud, 09-2164, 6th U.S. Circuit Court of Appeals (Cincinnati).
* Espinosa Not Applicable in Chapter 7, Court Says
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the federal district judge in Detroit answered a
question on Feb. 3 that wasn't addressed by the Supreme Court's
Espinosa decision in March dealing with the discharge of student
loans. U.S. District Judge Avern Cohn held that Espinosa didn't
apply for an individual who filed in Chapter 7 owing $71,000 on
student loans. Judge Cohn noted that the government was given no
notice of the intent to discharge the loan debt in the Chapter 7
case. The case is U.S. v. Frederick, 10-13405, U.S. Bankruptcy
Court, Eastern District of Michigan (Detroit).
* Total Bankruptcy Filings Virtually Unchanged in January
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that total bankruptcy filings in January were little
changed from the same month a year ago while commercial and
Chapter 11 filings fell about 20%, according to data compiled from
court records by Epiq Systems Inc.
Including bankruptcies of all types by companies as well as
individuals, the 101,800 filings in January dropped 1% from
January 2010. Commercial bankruptcy filings of all types totaled
5,640 in January, a 19% decline from the same month in 2010.
Chapter 11 cases, where larger companies liquidate or reorganize,
totaled 1,050 in January, a 21% contraction from a year before,
Epiq reported.
In 2010, there were 1.56 million total bankruptcy filings, a 7.8%
increase from 2009. The rate of increase slowed from the previous
year. The 1.45 million filings in 2009 were 32.1% more than 2008.
Last year had the most filings since 2005, when the record was set
with 2.1 million bankruptcies. Americans that year rushed to file
ahead of the effective date of new laws making it more difficult
for individuals to escape debt. In the last two weeks before the
law changed, 630,000 American sought bankruptcy protection.
* State Bankruptcy Proposal Opposed by U.S. Governors
-----------------------------------------------------
U.S. groups representing governors and state legislatures said
allowing states to file for bankruptcy protection would unsettle
the $2.86 trillion municipal-bond market and push up borrowing
costs.
"The nation's governors and legislators do not support proposals
to provide states with bankruptcy protection, "The National
Governors Association and the National Conference of State
Legislatures wrote in a letter February 4 to congressional
leaders.
"Allowing states to declare bankruptcy is not an authority any
state leader has asked for nor would they likely use. States are
sovereign entities in which the public trust is granted to its
elected leaders. The reported bankruptcy proposals suggest that a
bankruptcy court is better able to overcome political differences,
restore fiscal stability and manage the finances of a state.
These assertions are false and serve only to threaten the fabric
of state and local finance.
"For the last three years, states have faced growing budget
deficits and in each of those years, we have closed those deficits
by spending cuts and when necessary increasing taxes. Governors
and legislators have had to make tough and politically unfavorable
decisions to be fiscally responsible and balance our budgets.
Throughout this process, our colleagues never contemplated walking
away from our obligations to our constituents or to the bond
markets by requesting that the federal government allow states to
receive bankruptcy protection. While a number of states continue
to face budget deficits over the next few years, we will continue
to use our sovereign authority to balance our budgets and meet our
obligations.
"State and local bonds and fiscal instruments remain some of the
safest investments in the world. State leaders are keenly aware
of their responsibility to manage their finances and repay their
obligations. In contrast, the mere discussion of legislation,
let alone the existence of a law allowing states to declare
bankruptcy would only serve to increase interest rates and create
more volatility in bond markets.
"State and local leaders are interested in working with their
federal partners to improve the fiscal stability of government at
all levels. We call on Congress and the Administration to work
with our members to eliminate unfunded mandates, provide greater
flexibility to use federal funds more efficiently and avoid
federal restrictions such as maintenance-of-effort provisions that
hinder state and local authority to control their own finances.
"These are difficult times in which to govern, but the challenges
also provide us with the opportunity to work more closely together
to find common solutions. We look forward to working with you to
address the financial needs of the country and ensure our
prosperity for the future."
* * *
As reported in the Jan. 24, 2011 edition of the Troubled Company
Reporter, Newt Gingrich, the former speaker of the House of
Representatives, is pushing for legislation that would allow U.S.
states to file for bankruptcy. Mr. Gingrich, a Republican party
figure and a potential presidential candidate for 2012, told
Reuters that the legislation will likely be introduced in Congress
February. Mr. Gingrich has championed on a move to change federal
law that would let states file for bankruptcy in order to handle
their long-term budget problems despite resistance from states and
investors in the $2.8 trillion municipal bond market. Currently,
Chapter 9 of the Bankruptcy Code, which allows cities, counties
and other units of local government units to restructure their
debts, doesn't include states.
States have reported $140 billion of budget gaps for fiscal 2012
as the worst recession since the 1930s cut tax receipts by the
largest amount on record, Bloomberg News reported, citing the
Center on Budget and Policy Priorities, a Washington research
group.
The Republican party won control of the House in mid-term
elections in November. However, Democrats still control the
Senate and the White House.
* U.S. Banks Need to Pay 4.5% of Net Income for FDIC Insurance
--------------------------------------------------------------
Meera Louis at Bloomberg News reports that U.S. banks will have to
pay 4.5% of net income annually until 2020 to replenish the
Federal Deposit Insurance Corp.'s insurance fund, according to
data compiled by Bloomberg.
According to the report, the Dodd-Frank financial regulation law
requires the FDIC to rebuild the fund, which insures customer
deposits up to $250,000. The fund fell $20 billion into deficit
after more than 300 banks failed in the last three years.
Banks will have to pay 3.9% of net income annually to restore the
fund to its prior level of 1.15% of insured deposits by 2020,
according to Bloomberg Government analyst Christopher Payne. Dodd-
Frank requires the FDIC to raise the reserve ratio to 1.35% of
insured deposits, requiring banks to pay an additional 0.6% of net
income, or 4.5%.
Mr. Payne's analysis noted that the actual premiums assessed on
individual banks by the FDIC will vary according to the bank's
mixture of assets and level of risk.
* Alvarez & Marsal Names Global Head of Transaction Advisory Group
------------------------------------------------------------------
Alvarez & Marsal has named managing director, Paul Aversano, the
global head of its Transaction Advisory Group. The appointment
also recognizes Mr. Aversano's leadership role and success in
building A&M's transactions practice since its inception.
Based in Alvarez & Marsal's global New York headquarters, Paul
Aversano helped to launch the firm's first dedicated Transaction
Advisory Group in 2006, along with managing directors Nick Alvarez
and Jack McCarthy, Jr. and a handful of former Big Four financial
due diligence professionals looking to build a world-class
transactions practice on A&M's entrepreneurial business platform.
The firm is free from audit-based conflicts of interest.
A&M's Transaction Advisory Group has since grown exponentially,
also forming a UK-based group in 2009 to serve the US and Europe,
and attracting world class financial due diligence talent that
works together with A&M's operating professionals to deliver "one-
stop" due diligence services to private equity firms and corporate
acquirers in the US, UK and global markets. Along with A&M's
global tax advisory capabilities, Alvarez & Marsal has become a
leading "go-to" firm for integrated due diligence services around
the world.
Mr. Aversano's appointment underscores A&M's commitment to
bringing its distinctive blend of integrated financial, operating
and tax due diligence services to markets where A&M maintains an
expanding presence. This appointment also comes after a period
during which deal volume was generally constrained but shows signs
of an uptick.
"A&M's Transaction Advisory practice has continued to grow as
private equity firms recognize the importance of operationally-
based advisory services in driving value throughout the
transaction lifecycle," said Bryan Marsal, founder and co-CEO of
Alvarez & Marsal. "As a global firm serving clients around the
world, we believe that consistency of leadership, operations and
execution enhance the level of service we are able to provide
our clients. Paul has been integral to the success of this
practice group. His leadership and global perspective will be
invaluable as we move forward."
"Even in the face of a down market, A&M has established a robust,
global practice by introducing a unique offering to the private
equity market and corporate acquirers, combining traditional Big
Four financial, accounting and tax expertise with proven
operational experience," said Mr. Aversano. "With the M&A market
showing signs of revival, we have developed a unified global
offering that expands our perspective, further enhances our
service to clients and builds on the momentum we have created."
Mr. Aversano also serves as chairman of A&M's Transaction Advisory
Executive Committee along with US-based managing directors Nick
Alvarez (New York), Mike Cole (Nashville), Dan Galante (Chicago),
and Kent Willetts (Houston), and UK/Europe based managing
directors Adrian Balcombe and Colie Spink (London).
About Alvarez & Marsal
Alvarez & Marsal -- http://www.alvarezandmarsal.com/-- is a
global professional services firm. The firm has been growing over
the last decade from a boutique player to a global professional
services firm that brings a wide range of operational, financial
and performance improvement services to private equity and
strategic companies across the industry spectrum. Since 1983,
Alvarez & Marsal has worked with companies, investors, boards and
legal counsel to improve performance, solve complex problems and
maximize value for stakeholders.
About Alvarez & Marsal Transaction Advisory Group
A&M's Transaction Advisory Group's services include: financial
accounting due diligence, operational due diligence and tax due
diligence, among other related offerings.
* Keen Consultants' Real Estate Team Joins Great American Group
---------------------------------------------------------------
Keen Consultants' real estate team has joined Great American
Group, Inc., and will operate as GA Keen Realty Advisors.
This newly formed division will provide real estate analysis,
valuation and strategic planning services, brokerage, M&A, auction
services, lease restructuring services, and real estate capital
market services.
Led by Co-Presidents Harold Bordwin and Matthew Bordwin, the team
from Keen Consultants has been working in the real estate industry
for over 28 years. GA Keen Realty Advisors will continue to offer
its services to traditional clients of Keen Consultants, including
property owners, tenants, secured and unsecured creditors,
attorneys, and financial advisors.
"We have worked with Great American as partners and clients in the
past, so I'm excited about taking our already established
relationship to the next level," said Harold Bordwin, Co-President
of GA Keen Realty Advisors. "I'm confident that our years of real
estate expertise will help to make a significant contribution to
Great American's business."
"Bringing on the Keen Consultants team and expanding our real
estate offering is another step in growing complementary business
lines at Great American Group," said Andy Gumaer, Chief Executive
Officer. "We are excited to have the Keen team on board and look
forward to successfully growing the business together."
About Great American Group
Great American Group, Inc. -- http://www.greatamerican.com--
provides asset disposition solutions and valuation and appraisal
services to a wide range of retail, wholesale, and industrial
clients, as well as lenders, capital providers, private equity
investors, and professional service firms. Great American Group
has offices in Atlanta, Boston, Chicago, Dallas, London, Los
Angeles, New York, and San Francisco.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Feb. 18, 2011
WHARTON RESTRUCTURING CLUB
7th Annual Wharton Restructuring and Turnaround Conference
The Union League, Philadelphia, Pa.
Contact: http://whartonrestructuringconference.org/
Colin McGinnis -- mcginnic@wharton.upenn.edu
Adam Piekarski -- adamjp@wharton.upenn.edu
Avi Robbins -- arobb@wharton.upenn.edu
Feb. 24-25, 2011
AMERICAN BANKRUPTCY INSTITUTE
Valcon
Four Seasons Las Vegas, Las Vegas, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 4, 2011
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
Hyatt Regency Century Plaza, Los Angeles, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 7-9, 2011
AMERICAN BANKRUPTCY INSTITUTE
Conrad Duberstein Moot Court Competition
Duberstein U.S. Courthouse, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 10, 2011
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts - Florida
Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 10-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
SUCL/ Alexander L. Paskay Seminar on
Bankruptcy Law and Practice
Marriott Tampa Waterside, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 17-19, 2011
AMERICAN BANKRUPTCY INSTITUTE
Byrne Judicial Clerkship Institute
Pepperdine University School of Law, Malibu, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 27-29, 2011
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott, Chicago, IL
Contact: http://www.turnaround.org/
May 5, 2011
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts - New York City
Association of the Bar of the City of New York,
New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
May 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Hilton New York, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Canadian-American Cross-Border Insolvency Symposium
Fairmont Royal York, Toronto, Ont.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Mich.
Contact: http://www.abiworld.org/
July 21-24, 2011
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 27-30, 2011
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Sanctuary at Kiawah Island, Kiawah Island, S.C.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 4-6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 14, 2011
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Tampa Convention Center, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. __, 2011
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
Dublin, Ireland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 3-5, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Grand Hyatt Atlanta, Atlanta, Ga.
Contact: http://www.turnaround.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
November 1-3, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Westin Copley Place, Boston, Mass.
Contact: http://www.turnaround.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
October 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: Jan. 25, 2011
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com by e-mail.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases by individuals and business entities estimating
assets and debts or disclosing assets and liabilities at less than
$1,000,000. The list includes links to freely downloadable images
of the small-dollar business-related petitions in Acrobat PDF
format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Philline Reluya, Ronald C. Sy, Joel Anthony G.
Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Carlo Fernandez,
Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2011. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
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are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***