/raid1/www/Hosts/bankrupt/TCR_Public/110613.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, June 13, 2011, Vol. 15, No. 162
Headlines
ABUNDANT LIFE: Case Summary & 7 Largest Unsecured Creditors
AIRCOMM COMMUNICATION: Case Summary & 4 Largest Unsec Creditors
AIRCRAFT INVESTOR: Court Rules on Buyer's Suit Over Inventory
ALKERMES INC: S&P Assigns Preliminary 'B+' Corp. Credit Rating
ALLEN FAMILY: Files for Bankruptcy, Plans Sale to Rival
ALLIED IRISH: Won't Pay Distributions Under LP2 & LP3 Securities
ALLIED IRISH: Updates on Effectiveness of SLO by High Court
ALLISON TRANSMISSION: S&P Retains 'B+' Sr. Secured Debt Ratings
AMACORE GROUP: Agrees to Sell $2.50MM of 15% Sr. Notes to Vicis
AMC NETWORKS: S&P Assigns Preliminary 'BB-' Corp. Credit Rating
APPLESEED'S INTERMEDIATE: Has $90-Mil. Secured Financing From PNC
AVANTOR PERFORMANCE: Moody's Assigns 'Ba3' Ratings to Term Loans
BORDERS GROUP: Seeks to Conduct Store Closing Sales at 51 Stores
BORDERS GROUP: Court Okays Rejection of Seattle's Best Licenses
BORDERS GROUP: Notifies Late Filing of First Quarter Report
BOZEL S.A.: Unit Files Schedules of Assets and Liabilities
BOZEL S.A.: Seeks Court OK to Expand Scope of BDO's Retention
BRIARWOOD CAPITAL: Seeks to Tap John William as Appellate Counsel
C&D TECHNOLOGIES: Files Form S-8; Registers 1.51MM Common Shares
CALPINE CORP: Moody's Assigns 'B1' Rating to Sr. Secured Term Loan
CANAL CAPITAL: Incurs $66,500 Net Loss in April 30 Quarter
CB HOLDING: To Auction 11 Liquor Licenses July 12
CC MEDIA: Plans to Offer Add'l $750MM of 9.0% Notes Due 2021
CC MEDIA: Pacing Data Consistent with First Quarter Disclosure
CC MEDIA: Announces Pricing of 9.0% Priority Notes Due 2021
CEDAR FUNDING: Trustee, Advisers File Final Compensation Claims
CENTER COURT: Wins OK to Employ Martin D. Gross as Counsel
CENTURYLINK INC: S&P Assigns 'BB' Rating to Senior Notes
CLAIM JUMPER: Wants Plan Exclusivity Pending Mediation
CLAIRE'S STORES: Bank Debt Trades at 9% Off in Secondary Market
CLEAN BURN: Chapter 11 Sparks Fight Over $4.7 Million of Corn
CLEAN BURN: Lumbee River to Join Unsecured Creditors' Committee
CLEAN BURN: Files Schedules of Assets & Liabilities
CLEAR CHANNEL: Fitch Assigns 'CCC' Rating to Sr. Secured Notes
CLEAR CHANNEL: Bank Debt Trades at 14% Off in Secondary Market
COLONY RESORTS: WH/LVH Managers Owns 40% of Class A Units
COMSTOCK MINING: Common Stock Listed on NYSE Amex Under "LODE"
CORDIA COMMUNICATIONS: To Pay Spandocs Corp.'s Postage Claim
COTTAGE GROVE: Case Summary & 8 Largest Unsecured Creditors
CROWN MEDIA: Sees $320 Million to $330 Million Revenue in 2011
CULLIGAN INT'L: Centerbridge, Angelo Gordon Said to Seek Control
DAGAR ENTERPRISES: Case Summary & Largest Unsecured Creditor
DELPHI CORP: Court Directs Disbandment of Retirees Committee
DELPHI CORP: Court Has Ruling on DSRA VEBA Benefits
DELTA AIR: Welcomes Approval of Virgin Trans-Pacific Alliance
DELTA AIR: Expands Codeshare Flights With Virgin Blue
DELTA AIR: Applauds Congress Decision to Probe Labor Board
DEX MEDIA EAST: Bank Debt Trades at 24% Off in Secondary Market
DEX MEDIA WEST: Bank Debt Trades at 14% Off in Secondary Market
DIYA AND MANSI: Case Summary & 20 Largest Unsecured Creditors
DOWNSTREAM DEVELOPMENT: S&P Places 'B-' Rating on Watch Positive
DUKE AND KING: Committee Wants BofA's Liens on Assets Probed
EL POLLO: Improved Liquidity Prompts S&P to Raise CCR to 'B-'
EMAK WORLDWIDE: Court Confirms Reorganization Plans
EVERGREEN ENERGY: Joins with WPG to Produce K-Fuel in Australia
FORESTAR GROUP: S&P Withdraws 'B' Corporate Credit Rating
FRAZER/EXTON: Sec. 341 Creditors' Meeting on June 21
FRAZER/EXTON: Hires Ciardi Law Firm as Bankruptcy Counsel
FRAZER/EXTON: Has Deal to Sell Portion of Property
FREESCALE SEMICONDUCTOR: Fitch Rates Sr. Unsec. Notes at 'CCC'
GALLANT PRPERTY: Case Summary & Largest Unsecured Creditor
GAS CITY: Puts Five Properties on Auction Block
GAS CITY: Files Schedules of Assets & Liabilities
GELTECH SOLUTIONS: Board OKs Compensation Arrangement for CFO
GENERAL MARITIME: Inks $50MM Sale Pacts with Jefferies & Dahlman
GENERAL MARITIME: S&P Affirms CCR at 'CCC+'; Outlook Negative
GIORDANO'S ENTERPRISES: Trustee Wants Sanctions Against Consultant
GLUTH BROTHERS: Court Directs Bank to Release Mortgage
GRAYMARK HEALTHCARE: Amends Form S-1; To Offer 6MM Common Shares
HARRY & DAVID: Taps PricewaterhouseCoopers as Independent Auditor
HAWKER BEECHCRAFT: Bank Debt Trades at 13% Off in Secondary Market
HD SUPPLY: Incurs $164 Million Net Loss in May 1 Quarter
HEARUSA INC: Wins Court Permission to Move Ahead With Auction
HELIX ENERGY: S&P Lowers Rating on Sr. Secured Debt to 'B+'
HOVNANIAN ENTERPRISES: Incurs $72.7-Mil. Net Loss in April 30 Qtr.
IPC SYSTEMS: S&P Affirms CCR at 'B-; Outlook Revised to Positive
JERRY SAXTON: Macris Debt Exempted From Discharge
KEVEN A MCKENNA: Case Converted to Chapter 7 Liquidation
KHAWAJA PARTNERS: Voluntary Chapter 11 Case Summary
JOE'S JEANS: Fails to Comply With Nasdaq Bid Price Rule
JW-IH10-CB LLC: Voluntary Chapter 11 Case Summary
KURRANT MOBILE: Now Known as Cogito Media Group
LANDAMERICA FIN'L: Executives Hit With ERISA Class Action
LASER REALTY: Chapter 7 Trustee Wins Avoidance Suit
LEE ENTERPRISES: Bank Debt Trades at 14% Off in Secondary Market
LEVELLAND/HOCKLEY: Committee Taps Haynes and Boone as Counsel
LOCATEPLUS HOLDINGS: In Default Under Gulabtech Debenture
LOCATION BASED TECH: Ready to Satisfy a $1.2MM LoackRackTracker PO
LOUISIANA-PACIFIC CORP: S&P Affirms CCR at BB; Outlook Negative
LYONDELL CHEMICAL: Settles Severance Claims for $3 Million
MEDIA GENERAL: S&P Revises Outlook on 'B-' CCR to Negative
MERGE HEALTHCARE: Moody's Affirms 'B2' Corporate Family Rating
MESA AIR: Reaches Lease Assumption Settlement With RASPRO Trust
MESA AIR: Delta Air Agrees on Dismissal of Lawsuit
METROPARK USA: Final Cash Collateral Hearing Set for June 24
METROPARK USA: Court OKs Blakeley & Blakeley as Committee Counsel
METROPARK USA: Court Approves CRG Partners as Financial Advisor
METROPARK USA: Taps Keen Realty as Special Real Estate Advisor
METROPARK USA: Court OKs Adequate Assurance Payment for Utilities
MMFX CANADIAN: Hires Business Associates International as Advisor
MONEYGRAM INT'L: Guardian Life Discloses 3.3% Equity Stake
MORTGAGES LTD: Greenberg Can't Shake Suit Over Securities Fraud
MUSCLEPHARM CORPORATION: Posts $5-Mil. First Quarter Net Loss
NEW BERN: Parties Now Have Until June 30 to Object to Plan
NEW ENGLAND: S&P Affirms 'BB+' Rating; Outlook Positive
NEWPAGE CORP: Names Jay Epstein as SVP and CFO
NORTEL NETWORKS: CAW Proposes Consolidation of Debts & Assets
NOVADEL PHARMA: Craig Johnson to Resign as SVP, CFO and Secretary
OPTIONS MEDIA: Posts $845,700 Net Loss in First Quarter
OVERLAND STORAGE: Columbus Capital Discloses 7.8% Equity Stake
PLATINUM TOO: Voluntary Chapter 11 Case Summary
POINT BLANK: Says 'All Alternatives' in Consideration
POWER CONTRACTING: Carlota M. Bohm Names as Chapter 11 Trustee
POWER CONTRACTING: Ch. 11 Trustee Taps Houston Harbaugh as Counsel
PRAGJI LLC: Case Summary & 5 Largest Unsecured Creditors
PRIME STAR: Hires Capital Accounting and Sam Kan as Accountants
PROCTOR HOSPITAL: Moody's Affirms 'Ba1' on Outstanding Debt
PUBLIC MEDIA: Four Directors Elected at Annual Meeting
QIMONDA AG: Court Okays Committee's $11.7-Mil. Deal with G2
QIMONDA AG: Court Okays Deal Allowing Google's $1.1MM Claim
QWEST COMMUNICATIONS: Qwest Corp. Sells $661.2-Mil. Notes Due 2051
RADIENT PHARMACEUTICALS: Incurs $11.4-Mil. First Quarter Net Loss
RADLAX GATEWAY: K&L Gates Withdraws as Counsel to Lax Enterprise
RANCHO MALIBU: Plan Confirmation Hearing Scheduled for June 21
REALOGY CORP: Bank Debt Trades at 6% Off in Secondary Market
REALOGY CORP: Bank Debt Trades at 8% Off in Secondary Market
ROBB & STUCKY: John Emmanuel OK'd as Consumer Privacy Ombudsman
ROBB & STUCKY: Court Approves Keen Realty as Real Estate Advisor
ROBB & STUCKY: Court OKs Streambank to Market and Sell IP Assets
SBARRO INC: Committee Can Hire Ottenbourg Steindler as Counsel
SEITEL INC: S&P Affirms 'B-' Rating on $400-Mil. Senior Notes
SIGNATURE STYLES: Gets $1.2 Million Interim Loan Approval
SIGNATURE STYLES: Gets $1.2 Million Interim Loan Approval
SINOBIOMED INC: Inks Non-Exclusive Licensing Agreement with Sitoa
SMART-TEK SOLUTIONS: Perry Law Resigns as Director
SONOMA VINEYARDS: Deadline to Confirm Plan Extended to Sept. 4
SPANISH BROADCASTING: Six Directors Elected at Annual Meeting
SPITZER INDUSTRIES: S&P Withdraws Preliminary 'B' Corp. Rating
STERLING ESTATES: Court Okays Bauch & Michaels as Counsel
STORM KING: Stay Lifted on Business Premises, Case Dismissed
SW OWNERSHIP: Case Converted to Ch. 7; Creditors Meeting July 8
TCW HIGH INCOME: Moody's Upgrades Rating on Class IV Notes to B1
TEE INVESTMENT: Disclosure Statement Hearing Set for July 21
TIMOTHY BLIXSETH: Hits Ex-Attorney With $375M Malpractice Suit
TMG CANTON: Asks Court to Approve Sullivan Ward Employment
TMG CANTON: Sec. 341 Meeting of Creditors Set for June 22
TRAILER BRIDGE: Six Directors Elected at Annual Meeting
TRAVELPORT INC: Bank Debt Trades at 5% Off in Secondary Market
TRAVELPORT INC: Bank Debt Trades at 5% Off in Secondary Market
TRIBUNE CO: Bank Debt Trades at 33% Off in Secondary Market
TRUE TEMPER: Dist. Court Dismisses Age Discrimination Suit
TXU CORP: Bank Debt Trades at 22% Off in Secondary Market
TXU CORP: Bank Debt Trades at 16% Off in Secondary Market
UNIVERSAL BIOENERGY: Executes Letter of Intent with Pacific Rim
US FOODSERVICE: Bank Debt Trades at 6% Off in Secondary Market
VANGENT INC: Moody's Upgrades Corporate Family Rating to 'B2'
WAGSTAFF PROPERTIES: Can Hire Adair & Evans as Controller/CFO
WAGSTAFF PROPERTIES: Can Hire Peitzman Weg as Bankruptcy Counsel
WAGSTAFF PROPERTIES: Court OKs Fredrikson & Byron as Counsel
WAVERLY GARDENS: Court OKs $75,000 DIP Loan from First Tennessee
WAVERLY GARDENS: Will Pay Shelby Trustee Claims Via Property Sale
WEGENER CORP: Thomas Elliot Resigns as Board Member
WINTERS SHEET: Interim Cash Use Expires June 30
WOLVERINE TUBE: Wins Confirmation of Chapter 11 Plan
ZALE CORP: Files Form 10-Q; Posts $8.99MM Net Loss in April Qtr.
ZAMINDER PROPERTIES: Case Summary & 4 Largest Unsecured Creditors
ZANETT INC: Incurs $627,800 Net Loss in First Quarter
ZANETT INC: Issues $588,200 Amended Promissory Note to Rockport
* Automatic Stay Saves Stale Mortgage From Waiver
* BOND PRICING -- For Week From June 6 to 10, 2011
*********
ABUNDANT LIFE: Case Summary & 7 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Abundant Life Christian Center
1009 Regents Park Cir
Antioch, TN 37013
Bankruptcy Case No.: 11-05648
Chapter 11 Petition Date: June 6, 2011
Court: United States Bankruptcy Court
Middle District of Tennessee (Nashville)
Judge: Marian F. Harrison
Debtor's Counsel: Elliott Warner Jones, Esq.
Warner Jones, Esq.
EMERGE LAW PLC
1600 Division Street, Suite 675
Nashville, TN 37203
Tel: (615) 916-5264
Fax: (615) 916-5261
E-mail: elliott@emergelaw.net
warner@emergelaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's seven largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/tnmb11-05648.pdf
The petition was signed by Michael A. Whitsey, president.
AIRCOMM COMMUNICATION: Case Summary & 4 Largest Unsec Creditors
---------------------------------------------------------------
Debtor: Aircomm Communications, Inc.
12221 Highway 6, Suite G
Santa Fe, TX 77510
Bankruptcy Case No.: 11-80301
Chapter 11 Petition Date: June 3, 2011
Court: United States Bankruptcy Court
Southern District of Texas (Galveston)
Judge: Letitia Z. Paul
Debtor's Counsel: Gerson Darrell Bloom, Esq.
P.O. Box 2561
Galveston, TX 77553
Tel: (409) 763-6334
Fax: (409) 765-5412
E-mail: gbloomatty@aol.com
Scheduled Assets: $1,951,250
Scheduled Debts: $1,014,344
A list of the Company's four largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txsb11-80301.pdf
The petition was signed by Joe E. Walters, Jr., owner.
AIRCRAFT INVESTOR: Court Rules on Buyer's Suit Over Inventory
-------------------------------------------------------------
Bankruptcy Judge Randall L. Dunn ruled on the claims and
counterclaims raised in the lawsuit, LT Builders Group, LLC, v.
Blue Sky Avgroup, LLC, et al. LTB filed a complaint against BSA
and Johan Charl Brink to determine the validity and extent of
their interests in certain general inventory items of the debtor,
Aircraft Investor Resources, LLC. LTB sought a judgment declaring
that: (1) BSA's and Brink's claims to such general inventory items
or any other personal property items were untimely, barred or
waived (Count 1), and (2) BSA and Brink had no ownership interest
in the general inventory items or any other personal property
items (Count 2). LTB was the designee of China Aviation Industry
General Aircraft Co., Ltd., which purchased AIR LLC's assets for
$4.3 million at a March 26, 2010. LTB sought not less than
$50,000 in damages against BSA and Brink on its compulsory
counterclaim, along with an injunction against further
interference with LTB's business and economic relationships. BSA
and Brink each filed answers to the complaint and asserted
counterclaims against LTB. A copy of Judge Dunn's June 8, 2011
Memorandum Opinion is available at http://is.gd/TrmBmPfrom
Leagle.com.
About Aircraft Investor Resources
From 2003 to 2009, Aircraft Investor Resources, LLC, designed,
manufactured and sold various models of aircraft and aircraft kits
under the brand "Epic." AIR LLC also provided construction
assistance to amateur aircraft kit builders AIR LLC operated out
of a leased facility in Bend, Oregon.
AIR LLC experienced significant financial problems, ultimately
becoming unable to comply with its obligations to individual
amateur builders, its landlord, ER1 LLC, and other creditors.
Several creditors commenced litigation against AIR, LLC, its
officers and directors, and ER1. ER1 locked AIR, LLC out of the
facility on July 27, 2009. At that point, AIR, LLC ceased its
operations. AIR LLC filed its chapter 11 petition (Bankr. D. Ore.
Case No. 09-38458) on Sept. 10, 2009. The chapter 11 trustee was
appointed on Oct. 27, 2009.
ALKERMES INC: S&P Assigns Preliminary 'B+' Corp. Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned a preliminary 'B+'
corporate credit rating to Waltham, Mass.-based Alkermes Inc. "At
the same time, we assigned a preliminary 'BB' issue-level and
preliminary '1' recovery rating to the first-lien term loan due
2017 and a preliminary 'B' issue-level and a preliminary '5'
recovery rating to the second-lien term loan due 2018. The rating
outlook is stable," S&P stated.
"Our speculative-grade rating on Alkermes Inc. reflects a weak
business risk profile exhibited by the uncertainty associated with
a transformational acquisition, product concentration, dependence
on relatively new unproven, product uses to drive expected growth,
susceptibility to the marketing priorities of their partners, and
manufacturing concentration," said Standard & Poor's credit
analyst Michael Berrian. Alkermes' aggressive financial risk
profile reflects reported pro forma leverage of 4.7x and funds
from operations to total debt of 8.5%.
Alkermes' acquisition of Elan's drug technology business (EDT) is
the first transformational acquisition for this relatively small
company. The $450 million of debt that Alkermes will incur for the
purchase increases pro forma leverage to 4.7x, which is indicative
of an aggressive financial risk profile. "While we expect the
company to use its free cash flows to reduce debt, we expect
leverage to remain well above 4.0x for the next 12 to 18 months.
Moreover, while we expect the combined company to generate cash
flow, the not-yet-proven ability of newly approved indications to
drive growth makes the volume of cash flow, and pace of debt
reduction, uncertain. The aggressive financial risk profile also
reflects pro forma funds from operations to total debt of 8.5% at
March 31, 2011," S&P noted.
Alkermes is a small biotechnology company that, after its
acquisition of EDT, will have five products that will primarily
drive the company's growth: Risperdal Consta (an twice-monthly
injectable anti-psychotic drug for the treatment of schizophrenia
and bipolar disorder), Vivitrol (for the niche treatment of
alcohol and opioid addiction), Bydureon (a once-a-week injection
for the treatment of type II diabetes), Ampyra (to improve walking
in multiple sclerosis patients), and Invega Sustenna (an anti-
psychotic that competes with Risperdal Consta).
ALLEN FAMILY: Files for Bankruptcy, Plans Sale to Rival
-------------------------------------------------------
Allen Family Foods Inc., along with two affiliates, filed for
Chapter 11 bankruptcy protection with plans to sell itself to an
affiliate of rival Mountaire Farms of Delaware Inc. Allen Family
is a 92-year-old Seaford, Del., poultry company. It estimated
assets and liabilities between $50 million and $100 million in its
petition. Affiliates that filed separate Chapter 11 petitions are
Allen's Hatchery Inc. and JCR Enterprises Inc.
ALLIED IRISH: Won't Pay Distributions Under LP2 & LP3 Securities
----------------------------------------------------------------
On Dec. 1, 2009, in line with EC policy and pending the EC
Commission assessment of Allied Irish Banks, p.l.c., restructuring
plan, the Bank announced that it would not make coupon payments on
its Tier 1 and Tier 2 capital instruments, unless under a binding
legal obligation to do so.
The effect of the decision not to pay the non-cumulative
distribution which would otherwise have been payable on Dec. 14,
2009, under the terms of the LP3 Preferred Securities was to
trigger the "Dividend Stopper" provisions of those securities,
precluding the Bank, for a period of one calendar year from and
including Dec. 14, 2009, from declaring and paying any
distribution or dividend, inter alia ,on any "Parity Security". A
fresh "Dividend Stopper" was triggered by the non-payment of the
distribution on the LP3 Preferred Securities which would otherwise
have been payable on Dec. 14, 2010, for a further period of one
calendar year from that date.
"Parity Securities" includes the LP 2 Preferred Securities, (on
which an annual non-cumulative distribution would otherwise be due
on 16 June 2011). A further semi-annual non-cumulative
distribution on the LP3 Preferred Securities would otherwise be
due on June 14, 2011.
The semi-annual non-cumulative distribution otherwise payable on
June 14, 2011, under the terms of the LP 3 Preferred Securities,
and the annual non-cumulative distribution otherwise payable on
June 16, 2011, under the terms of the LP2 Preferred Securities,
will also not be paid on the due dates.
About Allied Irish Banks, p.l.c.
Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a
major commercial bank based in Ireland. It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin. AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).
Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.
As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On
April 8, 2011, the NPRFC converted the total outstanding amount of
CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.
In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.
As reported by the TCR on May 31, 2011, KPMG, in Dublin, Ireland,
noted that there are a number of material economic, political and
market risks and uncertainties that impact the Irish banking
system, including the Company's continued ability to access
funding from the Eurosystem and the Irish Central Bank to meet its
liquidity requirements, that raise substantial doubt about the
Company's ability to continue as a going concern.
The Company reported a net loss of EUR10.16 billion on
EUR1.84 billion of interest income for 2010, compared with a net
loss of EUR2.33 billion on $2.87 billion of interest income for
2009.
The Company's balance sheet at Dec. 31, 2010, showed
EUR145.2 billion in total assets, EUR140.9 billion in total
liabilities, and stockholders' equity of EUR4.3 billion.
ALLIED IRISH: Updates on Effectiveness of SLO by High Court
-----------------------------------------------------------
Following the issue of a decision by the Irish High Court
regarding the effectiveness of the subordinated liabilities order
issued by the High Court on April 14, 2011, under the Credit
Institutions (Stabilisation) Act 2010, the SLO is effective as of
April 22, 2011, to amend the terms of Allied Irish Banks, p.l.c.,
sixteen subordinated liabilities that are the subject of the
proposed debt buyback as follows:
1. The terms of the subordinated liabilities listed at 1 to 9
have been amended such that any interest that may fall due
on those liabilities will only be payable at the option of
AIB (in its sole discretion).
2. The terms of the subordinated liabilities listed at 1 to 9
have been further amended such that the maturity date of
each such liability has been extended to the relevant
interest payment date specified in the Order.
3. The terms of the subordinated liabilities listed at 12 to 15
have been amended such that any restriction on (i) payment
of any distribution or dividend on any other specified
junior or parity securities of AIB, or (ii) any repurchase
or redemption of such junior or parity securities, has been
removed.
4. The terms of the subordinated liabilities listed at 10, 11
and 16 have been amended such that (i) the requirement to
pay any arrears of interest on such liabilities upon the
payment of any dividends by AIB has been removed, and (ii)
the payment of any coupon on such liabilities following the
payment of a dividend by AIB is now entirely at the option
of AIB.
On this basis, AIB will not be paying the amount of interest in
relation to the EUR700,000,000 Callable Dated Subordinated Fixed
to Floating Rate Notes due July 2023 (ISIN: XS0368068937),
otherwise due on June 6, 2011.
The EUR368,253,000 12.5 per cent Subordinated Notes due 2019
(ISIN: XS0435957682) and the EUR868,518,000 12.5 per cent
Subordinated Notes due 2019 (ISIN: XS0435953186) have not yet been
amended pursuant to the SLO as a challenge in respect of these
notes is ongoing before the High Court.
The deadline to participate in the Offer is midnight (New York
time) on Monday, June 13, 2011, in respect of the subordinated
liabilities (other than in respect of the subordinated liabilities
listed at 1, 7 and 9, where the deadline to participate in the
Offer is 5.00 pm London time on Wednesday, 20 July 2011). and the
subordinated liabilities.
The 16 Subordinated Liabilities are:
(1) EUR419,070,000 10.75 per cent. Subordinated Notes due 2017;
(2) GBP1,096,645,000 11.50 per cent. Subordinated Notes due 2022;
(3) U.S.$177,096,000 10.75 per cent. Subordinated Notes due 2017;
(4) GBP700,000,000 Callable Dated Subordinated Fixed to Floating
Rate Notes due July 2023;
(5) EUR500,000,000 Callable Subordinated Step-Up Floating Rate
Notes due 2017;
(6) GBP500,000,000 Subordinated Callable Fixed/Floating Rate Notes
due 2025;
(7) EUR400,000,000 Subordinated Callable Step-Up Floating Rate
Notes due 2015;
(8) U.S.$400,000,000 Dated Callable Step-Up Subordinated Notes due
2015;
(9) GBP350,000,000 Subordinated Callable Fixed/Floating Rate Notes
due 2030;
(10) EUR200,000,000 Perpetual Subordinated Callable Step-Up Notes
(11) GBP400,000,000 Perpetual Callable Step-Up Subordinated Notes;
(12) EUR500,000,000 7.50 per cent. Step-Up Callable Perpetual
Reserve Capital Instruments;
(13) EUR1,000,000,000 Fixed Rate/Floating Rate Guaranteed Non-
voting Non-cumulative;
(14) Perpetual Preferred Securities
EUR500,000,000 Fixed Rate/Floating Rate Guaranteed Non-voting
Non-cumulative;
(15) Perpetual Preferred Securities
GBP350,000,000 Fixed Rate/Floating Rate Guaranteed Non-voting
Non-cumulative; and
(16) Perpetual Preferred Securities
U.S.$100,000,000 Subordinated Primary Capital Perpetual
Floating Rate Notes.
A full-text copy of the filing is available for free at:
http://is.gd/XyFWb3
About Allied Irish Banks, p.l.c.
Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a
major commercial bank based in Ireland. It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin. AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).
Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.
As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On
April 8, 2011, the NPRFC converted the total outstanding amount of
CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.
In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.
The Company reported a net loss of EUR10.16 billion on
EUR1.84 billion of interest income for 2010, compared with a net
loss of EUR2.33 billion on $2.87 billion of interest income for
2009.
The Company's balance sheet at Dec. 31, 2010, showed
EUR145.2 billion in total assets, EUR140.9 billion in total
liabilities, and stockholders' equity of EUR4.3 billion.
ALLISON TRANSMISSION: S&P Retains 'B+' Sr. Secured Debt Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services' 'B+' issue-level rating and
'2' recovery rating on Indianapolis-based Allison Transmission
Inc.'s senior secured debt remain unchanged after the company's
revolving credit facility was refinanced. Allison recently
extended the maturity of the revolving portion of its senior
secured credit facility to Aug. 7, 2016 from Aug. 7, 2013. The new
revolving credit facility replaces the existing facility and
increases availability back to the $400 million (previously, $82.5
million was held by Lehman Commercial Paper Inc.). The maturity
extends to 2016, provided the term loan is extended to a new date
beyond the revolving credit facility, prior to May 7, 2014. The
amendment also increases Allison Transmission Inc.'s ability to
make foreign and general investments and resets the amount
available for discounted voluntary prepayments of the term loan.
"Last month, the company also completed its offering of $500
million senior unsecured notes due 2019 on which we had earlier
assigned our 'CCC+' issue-level rating and a '6' recovery rating.
The company used the proceeds from this offering, along with cash
on hand, to repay its 11.25% senior toggle notes due 2015, plus
accrued and unpaid interest and applicable premiums, totaling
about $598 million," S&P said.
S&P continued, "Our 'B' corporate credit rating on Allison
Transmission Inc. reflects the company's highly leveraged
financial risk profile, which we believe overshadows its good
profitability and strong market share as the leading U.S. supplier
of automatic transmissions for commercial vehicles. We consider
Allison's business risk profile fair, reflecting its good market
position but also the highly cyclical North American commercial-
vehicle component supplier business. The company has filed for an
initial public offering (IPO) of common stock, but the timing of
an IPO is unknown."
Rating List
Allison Transmission Inc.
Corporate Credit Rating B/Stable/--
Senior Secured B+
Recovery Rating 2
AMACORE GROUP: Agrees to Sell $2.50MM of 15% Sr. Notes to Vicis
---------------------------------------------------------------
The Amacore Group, Inc., entered into a Securities Purchase
Agreement with Vicis Capital Master Fund on June 2, 2011,
pursuant to which the Company agreed to issue and sell to Vicis
up to $2,500,000 in principal amount of its 15% Senior Secured
Convertible Notes.
The Notes are due on June 30, 2012, and bear interest at a rate of
15% per annum. Upon the occurrence of an Event of Default, the
Stated Interest Rate will be adjusted to a rate of 18% per annum.
The obligations of the Company under the Notes are secured
pursuant to the terms of the Amended and Restated Security
Agreement between the Company and Vicis. The Company also agreed
to pledge all of the capital stock or other ownership interests of
certain of its subsidiaries pursuant to the First Amendment to
Stock Pledge and Escrow Agreement, which amended the Stock Pledge
and Escrow Agreement, dated Aug. 16, 2010, in order to secure its
obligations under the Notes. In addition, all of the obligations
of the Company under the Notes are guaranteed by certain of the
Company's subsidiaries pursuant to the terms of the Amended and
Restated Guaranty Agreement and all of the obligations of such
subsidiaries under the Subsidiary Guarantee are secured pursuant
to the terms of the Amended and Restated Guarantor Security
Agreement.
The Notes are convertible, at the option of the holder, into
shares of the Company's Class A common stock at an initial
conversion price equal to $0.005 per share. The Notes contain
provisions that protect the holders against dilution by adjustment
of the Conversion Price in certain events such as stock dividends,
stock splits and other similar events. In addition, the Notes
have anti-dilution protection in the event that the Company issues
securities at a value less than the Conversion Price. In
connection with the Private Placement, the Company entered into a
Registration Rights Agreement with Vicis, pursuant to which the
Company granted "piggyback" registration rights to Vicis. Vicis
also agreed to waive certain anti-dilution rights that it was
entitled to by virtue of its holdings of other securities of the
Company pursuant to the Waiver of Anti-Dilution Rights Agreement
by and between the Company and Vicis. Furthermore, pursuant to
the Purchase Agreement, the Company issued five Amended and
Restated 15% Senior Secured Convertible Notes, which amended
various notes issued by the Company to Vicis in the form of 15%
Senior Secured Convertible Note, whereby the maturity dates were
extended from June 30, 2011, to June 30, 2012.
Pursuant to the Purchase Agreement, Vicis is required to deposit
$2,500,000 into an escrow account within 5 days of the Initial
Closing pursuant to the terms of the First Amendment to Escrow
Agreement by and between the Company, Vicis and the escrow agent,
which amended the Escrow Agreement, dated Aug. 16, 2010. The
escrow agent will disburse funds from the escrow account pursuant
to the joint written instructions of the Company and Vicis. Upon
the disbursement of funds from escrow, the Company will issue to
Vicis Notes in the principal amount of the jointly approved escrow
disbursement. The Escrow Agreement will terminate upon the
Maturity Date and any funds remaining in escrow will be returned
to Vicis.
About The Amacore Group
Based in Maitland, Florida, The Amacore Group, Inc., (OTC BB:
ACGI) -- http://www.amacoregroup.com/-- is primarily a provider
and marketer of healthcare related products, including healthcare
benefits, vision and dental networks, and administrative services
such as billing, fulfillment, patient advocacy, claims
administration and servicing.
* * *
In its March 31, 2010 report, McGladrey & Pullen, LLP in Orlando,
Florida, raised substantial doubt about the Company's ability to
continue as a going concern. The auditor said the Company has
suffered recurring losses from operations and has not generated
sufficient cash flows from operations to meet its needs.
The Company's balance sheet at June 30, 2010, showed $8,595,986 in
total assets, $25,985,443 in total liabilities and a $17,147,252
stockholders' deficit.
AMC NETWORKS: S&P Assigns Preliminary 'BB-' Corp. Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BB-'
corporate credit rating to New York City-based cable network
company AMC Networks Inc., a new company formed to own the cable
networks and related businesses currently owned and operated
by the Rainbow Media subsidiary of Cablevision. "At the same time,
we assigned preliminary issue-level and recovery ratings to the
company's proposed new debt, which will be issued in connection
with its spin-off from Cablevision Systems Corp.," S&P said.
AMC Networks' proposed senior secured credit facilities will
consist of a $500 million revolving credit facility due 2016, a
$1.16 billion term loan A due 2017, and a $565 million term loan B
due 2018. "We assigned these facilities a preliminary 'BB+' issue-
level rating, with a preliminary recovery rating of '1',
indicating our expectation that lenders would receive very high
(90% to 100%) recovery in the event of a payment default," S&P
related.
The company also plans to issue $700 million of 10-year senior
unsecured notes. "We assigned the proposed notes a preliminary
'B+' issue-level rating, with a preliminary recovery rating of
'5', indicating our expectation of modest (10% to 30%) recovery
for noteholders in the event of a payment default," S&P noted.
AMC Networks plans to use the net proceeds of the debt financing
transaction to repay all existing debt of Rainbow Media except
capital leases, and to pay a $1.25 billion distribution to
Cablevision.
"All ratings are subject to our review of the final documentation.
Upon completion of the transaction and finalization of our ratings
on AMC Networks, we expect to withdraw all existing ratings on
Rainbow Media," according to S&P.
"Our corporate credit rating on AMC Networks reflects the
company's fair business risk profile and aggressive financial risk
profile, as well as our expectations for steady lowering of
leverage," said Standard & Poor's credit analyst Deborah Kinzer.
"We regard the business risk profile as fair because of its good
portfolio of national cable networks and stable affiliate fee
structure. Although the company's pro forma lease-adjusted
leverage is high for the rating, at 6.0x, under our base-case
scenario we expect that EBITDA growth and debt repayment over the
near term will enable the company to reduce leverage to the mid-5x
area, our threshold for a 'BB-' rating on the company, and could
build further flexibility beyond that point."
The stable rating outlook reflects Standard & Poor's expectation
that the company's good discretionary cash flow will enable it to
reduce its lease-adjusted debt to EBITDA ratio to the mid-5x area,
S&P's threshold for AMC Networks at a 'BB-' rating, over the next
several quarters.
APPLESEED'S INTERMEDIATE: Has $90-Mil. Secured Financing From PNC
-----------------------------------------------------------------
Jim Tierney at MultiChannel Merchant reports that Orchard Brands
has $90 million in secured financing from PNC Financial Services
Group. The financing provides operating liquidity, solidifies its
restructuring, and allows the company to operate with its past
clearly behind it.
"It's a good thing," the report qoutes Craig Battle, managing
director at investment bank Tucker Alexander, as saying. The
financing allows Orchard Brands to operate in their recapitalized
condition, which is strong, he notes.
About Appleseed's Intermediate
Based in Beverly, Massachusetts, Appleseed's Intermediate Holdings
LLC, aka Appleseed's Intermediate Holdings, Inc., aka Orchard
Brands sells clothing to people 55 and older. Orchard Brands has
17 brands including Appleseed's, Draper's & Damon's, Gold Violin,
Haband and Norm Thompson. It publishes catalogs and has stores
under its Appleseed's and Draper's & Damon's brands. It has
annual sales of about $1 billion and earnings before interest,
taxes, depreciation and amortization are about $50 million.
Appleseed's is owned by Golden Gate Capital Corp., which also
holds stakes in retailers Express Inc., Eddie Bauer Holdings Inc.
and Zale Corp.
Appleseed's Intermediate and its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10160) on
Jan. 19, 2011. Appleseed's Intermediate estimated assets at
$100 million to $500 million and debts at $500 million to $1
billion in its Chapter 11 petition.
Richard M. Cieri, Esq., Joshua A. Sussberg, Esq., at Brian E.
Schartz, at Kirkland & Ellis LLP, serve as the Debtors' bankruptcy
counsel. Domenic E. Pacitti, Esq., at Klehr Harrison Harvey
Branzburg LLP, serves as local counsel to the Debtors. Moelis &
Company LLC is the Debtors' investment banker and financial
advisor. Alvarez & Marshal North America, LLC, is the Debtors'
restructuring advisor. Pricewaterhousecoopers LLP is the Debtors'
independent auditor. Kurtzman Carson Consultants LLC is the
notice, claims and balloting agent.
Jay R. Indyke, Esq., Cathy Hershcopf, Esq., Brent Weisenberg,
Esq., and Richelle Kalnit, Esq., at Cooley LLP, in New York, and
Robert K. Malone, Esq., Michael P Pompeo, Esq., and Howard A
Cohen, Esq., at Drinker Biddle & Reath LLP, in Wilmington,
Delaware, represent the Official Committee of Unsecured Creditors.
The Orchard Brands subsidiaries implemented their reorganization
plan after obtaining confirmation of the plan on April 14. While
reducing debt by $420 million, the plan created the creditors'
trust that filed the suit. The plan was part of a prepackaged
reorganization.
AVANTOR PERFORMANCE: Moody's Assigns 'Ba3' Ratings to Term Loans
----------------------------------------------------------------
Moody's Investors Service assigned Ba3 issue level ratings to
Avantor Performance Materials Holdings, S.A. proposed new $35
million revolving credit facility and $185 million term loan B.
Moody's expects APMH to use proceeds from the proposed new credit
facility to refinance the amounts outstanding under its current
term loan B and to fund the recently announced acquisition of POCH
S.A., a laboratory and pharmaceutical business headquartered in
Poland. Moody's also moved the rating outlook to positive from
stable. Moody's will withdraw the ratings on APMH's existing
credit facility and term loan on completion of the transaction.
Outlook Change:
Avantor Performance Materials Holdings, S.A.
-- Positive from Stable
-- New Ratings Assigned:
Avantor Performance Materials Holdings, Inc,.
-- $35 million Sr Sec Gtd Revolver due 2015 -- Ba3 (LGD4, 51%)
-- $185 million Sr Sec Gtd Term Loan due 2017 -- Ba3 (LGD4,
51%)
Ratings to be withdrawn
-- Avantor Performance Materials Holdings, Inc,.
-- $30 million Sr Sec Gtd Revolver due 2015 -- Ba3 (LGD4, 51%)
-- $145 million Sr Sec Gtd Term Loan due 2016 - -- Ba3 (LGD4,
51%)
RATINGS RATIONALE
As part of the proposed recapitalization, APMH will put into place
a new $220 million credit facility composed of a $35 million
revolver and a $185 million first lien term loan, which will be
used to refinance its existing $185 million combined credit
facility. The sponsor, an affiliate of New Mountain Capital, LLC
funded its initial acquisition of APMH with $200 million of cash
equity and has since contributed an additional $100 million of
equity to complete the acquisition of RFCL Ltd., a laboratory and
pharmaceuticals business based in India. This equity infusion and
the prospect of higher than anticipated cash flows support the
move to a positive outlook. APMH's proposed ratings and outlook
are subject to review of the final documentation of the financings
and closing of the transaction as described.
APMH's Ba3 corporate family rating (CFR) reflects a small but
growing revenue base (relative to much larger competitors with
better credit profiles), a relatively small amount of tangible net
worth (under $140 million) and a limited history operating as an
independent company. Adjusted debt (including standard adjustments
for unfunded pensions of $6 million and capitalized rents of $7
million) is about $198 million, assuming no borrowings under
APMH's revolver. Proforma leverage for the LTM period ending Mar
11, 2011is approximately 2.5 times, which comes in a year with
record adjusted EBITDA generation (proforma for the acquisitions)
approaching $74 million. Despite its small size relative to
competitors, APMH benefits from a favorable brand image, long
lived customer relationships, and relatively small but stable
order sizes. Many customer orders, which are concentrated in the
steady laboratory and pharmaceutical markets, are not subject to
corporate expense approvals.
While APMH has a small but growing business profile, the Ba3
rating benefits from the less cyclical nature of the company's
specialty chemical revenue base, the equity financed growth from
its owner, stable financial performance in recent years, and the
prospect of steady free cash flow generation. In addition, the
rating recognizes the potential benefits of reduced levels of
capital spending, running typically near 3% of sales that should
aid in the generation of free cash flow, providing greater
financial flexibility. Although the business has traditionally
been less cyclical quarter over quarter, variation since its
acquisition by NMC has been material with the most recent 4th
quarter being much stronger on a year over year basis and the
first quarter of 2011 being modestly weaker.
The rating outlook for APMH is positive. Factors that could have
positive rating implications include successfully improving
financial performance and a sustainable track record of operating
with a conservative financial profile, specifically with regard to
financing acquisitions. The ratings could be raised, over the next
four quarters, as the company establishes a proven track record of
operating as a standalone entity while managing and integrating
its growth aspirations.
Factors that could have negative rating implications include a
failure to maintain historical margins and steadily improve sales
over time. While the company is subject to significant customer
concentration with distributors this will not likely be a major
business risk unless there is deterioration in customer service
excellence which would drive clients to competitors. The presence
of favorable environmental protection for both on-site and off-
site claims is viewed positively. However the need for such
support and its relative complexity combined with the inherent
uncertainty and surprises surrounding environmental remediation
could cause pressure on APMH's credit profile. However as time
passes and the environmental issues are successfully executed
concerns over unexpected outcomes would be mitigated.
APMH is a focused specialty chemical company that operates in
three business segments providing high purity chemicals to
laboratories, pharmaceutical companies and microelectronic
industries. For the LTM period ending March 31, 2011 business
segment revenues totaling $529 million (up from $438 million for
June 30, 2010) were split into thirds. Gross profit margins on a
combined basis are near 29% but there is variation between the
gross margins of the three segments. The microelectronics business
has the weakest margins and pharmaceutical the strongest.
The principal methodology used in rating APMH S.A. was Global
Chemical Industry published in December 2009. Other methodologies
used include Loss Given Default for Speculative Grade Issuers in
the U.S., Canada, and EMEA, published June 2009.
BORDERS GROUP: Seeks to Conduct Store Closing Sales at 51 Stores
----------------------------------------------------------------
Borders Group, Inc., and its debtor affiliates seek permission
from Judge Martin Glenn of the U.S. Bankruptcy Court for the
Southern District of New York to sell certain assets, consisting
of merchandise and owned furniture, fixtures and equipment,
located at up to 51 of their stores through store closing sales,
free and clear of all liens, claims or encumbrances.
"It is critical to commence the SCSs by June 22, 2011, to avoid
triggering a default under the DIP Facility," David M. Friedman,
Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York,
tells Judge Glenn.
Mr. Friedman relates that the DIP Facility defines "Lease
Rejection Date" as the last day of the 120-day lease decision
period. The Lease Decision Period was extended through Sept. 14,
2011. Pursuant to Section 365(d)(4)(B) of the Bankruptcy Code,
the Sept. 14 Lease Rejection Date cannot be further extended
absent landlord consent.
The Debtors and their advisors have worked diligently to obtain
extensions of the Sept. 14 deadline to assume or reject leases
from their landlords. Mr. Friedman relates that the Debtors'
efforts have been fruitful and have received extension consent
for nearly 365, or approximately 90% of their, leases. The
Debtors continue their discussions with landlords and believe
that with additional time, they can obtain extensions at many of
the remaining 51 locations. Nonetheless, the Debtors will not be
able to obtain extensions for at least some of their locations,
Mr. Friedman states.
More importantly, Mr. Friedman cites, most of the stores for
which the Debtors have not obtained extension stipulations are
among the most profitable in the portfolio or have leases which
are under market. The Debtors would assume these leases, he
discloses, but various creditor constituencies have indicated
that they would oppose any assumption outside of the context of a
sale of the business as a going concern or confirmation of a plan
of reorganization.
The Debtors are actively negotiating a going concern sale with
multiple potential buyers. These buyers have indicated that they
also wish to purchase some of the stores that are subject to the
Debtors' 51-Store SCS Motion. To that end, the Debtors believe
that the stores to be liquidated pursuant to the SCS Motion
should not be liquidated under the present circumstances. The
liquidation of the stores may not maximize their value for the
benefit of creditors and will result in a significant loss of
jobs, Mr. Friedman stresses. If the SCS Motion is granted, the
Debtors will not be able to sell the stores subject to their
request to a going concern buyer because they likely will have
liquidated pursuant to the proposed closing sales, he points out.
Unfortunately, the Debtors' DIP financing facility requires the
Debtors to commence store closing sales within certain deadlines
before the assumption/rejection deadline, Mr. Friedman states.
"This leaves the Debtors with a Hobson's choice: the debtors can
proceed with store-closing sales at these stores under these
unfortunate circumstances or, if they refuse to do so, risk being
placed into default."
Against this backdrop, at all locations where landlord consent
has not been given, the Debtors must take these steps to avoid
triggering an event of default under the DIP Facility:
(1) Transmit bid solicitation packages by no later than
June 1, 2011;
(2) File an approval motion by June 8, 2011;
(3) Enter into a stalking horse agency agreement by
June 15, 2011; and
(4) Obtain Court approval and begin store closing sales by
June 22, 2011.
The Debtors relate that they have requested a waiver of the
requirement to liquidate the stores pending the proposed
scheduling of a hearing to consider the sale of the entire
business on or about July 21, 2011. The DIP Lenders, however,
have not provided consent but good faith negotiations continue to
be undertaken. The Debtors hope to obtain that consent before
the hearing on the SCS Motion. The Debtors also expect to remove
many stores from the store closing list once they receive
agreements with additional landlords extending the lease decision
deadline pending negotiations.
Still, if the Debtors are forced to proceed with a hearing on the
51-Store SCS Motion, they ask the Court to grant the request.
The Debtors further ask the Court to:
(a) authorize them to enter into an agency agreement with the
stalking horse bidder or the successful bidder at the
auction; and
(b) approve the proposed bidding procedures, which they
utilized in arriving at the Liquidating Agent's bid
including appropriate bid protections requested by the
stalking horse bidder.
Solicitation and Auction Process
The Debtors modeled their solicitation process after the one
undertaken in the first round of store closing sales for 200
stores conducted in February 2011, referred to as the Phase I
SCSs, Mr. Friedman informs Judge Glenn. The Phase I SCSs
generated more than $182 million for the Debtors' estates through
impressive results widely supported by the creditor
constituencies.
As required by the DIP Facility, the Debtors sent on June 1,
2011, a bid solicitation letter to each of the nationally
recognized liquidation firms, which are the same entities
involved with or expressing interest in the Phase I SCSs.
The June 1 Bid Solicitation Letter informed recipients that the
Debtors are seeking proposals to select a liquidating agent that,
subject to Court approval, would conduct the SCSs at the Closing
Stores. The letter contained these dates and deadlines:
June 6, 2011 Deadline for submitting bids,
consisting of a proposal and
a marked-up agency agreement.
June 7, 2011 The Debtors' deadline for
selecting a stalking horse bidder
among the bids timely received.
June 16, 2011 Auction
June 22, 2011 The last date that, subject to
Court approval, the SCSs could
begin.
The Debtors received no bids by the bidding deadline under the
June 1 Bid Solicitation Letter. However, prior the bidding
deadline, the Debtors received a letter from a joint venture of
liquidators, which indicated that the joint venture is interested
in the potential transaction outlined in the letter and any other
transaction that may develop in connection with the liquidation
of assets of the Debtors. The joint venture's letter also
indicated that the joint venture was "not presenting a proposal
or a bid at this time."
The Debtors are currently considering the joint venture's
request, and will consult with the DIP Lenders and the Official
Committee of Unsecured Creditors on the matter.
Nonetheless, the Debtors will conduct the auction on Thursday,
June 16, 2011, beginning at 10:00 a.m., at the offices of
Kasowitz, Benson, Torres & Friedman LLP, at 1633 Broadway, in New
York, New York. The Debtors are providing notice of the Auction
to all key constituencies. The Debtors and their advisors, in
consultation with their key constituents, will establish the
terms and conditions of the auction and the successful bidder at
the auction will be deemed the Liquidating Agent.
Sale under Agency Agreement
The Debtors seek Court authority to dispose of the asset under
the terms of the Agency Agreement to be entered into with the
Liquidating Agent selected at the auction.
The DIP Facility requires the Debtors to engage an "Approved
Liquidator," defined as "a nationally recognized liquidator of
recognized standing approved by Agents" to conduct "Affected
Asset Sales." Affected Asset Sale refers to "a liquidation in
one or a series of related transactions of the assets located on
the property that are subject to leases rejected on the Lease
Rejection Date."
According to Mr. Friedman, engaging the Liquidating Agent will
provide the Debtors with several benefits, including:
(i) Allowing a professional liquidator to liquidate the assets
will enable the Debtors to maximize sale proceeds while
minimizing distraction from the restructuring effort; and
(ii) It is more cost effective for the Debtors to allow a
Liquidation Agent to conduct the SCSs than to conduct such
sales on their own because, among other reasons, the
Liquidating Agent will reimburse the Debtors for expenses
of the SCSs.
Under the Agency Agreement, the Liquidating Agent will have the
right to conduct the Store Closing Sales at the Closing Stores,
a schedule of which is available for free at:
http://bankrupt.com/misc/Borders_Jun8ClosingStoresList.pdf
The Liquidating Agent will conduct the SCSs pursuant to the sale
guidelines previously approved by the Court in connection with
the Phase I SCSs. The Debtors prepared those sale guidelines in
consultation with counsel representing many of the Debtors' most
significant landlords, Mr. Friedman relates. All landlords will
be provided an opportunity after approval of the SCSs to seek
relief from the Sale Guidelines, using the same procedures
approved by the Court in connection with the Phase I SCSs, he
assures the Court.
The SCSs will continue until Aug. 31, 2011, provided that under
certain circumstances, the Liquidating Agent may terminate the
sales at certain Closing Stores prior to that date.
The Liquidating Agent will not have access to the Debtors'
customer lists and the Debtors will not disclose any personally
identifiable information regarding their customers, Mr. Friedman
clarifies.
The terms of the Agency Agreement are substantially similar to
the terms approved by the Court in connection with the Phase I
SCSs.
A full-text copy of the draft Agency Agreement is available for
free at http://bankrupt.com/misc/Borders_PropAgencyAgreement.pdf
Stalking Horse Bid/Bid Protections
The Debtors will continue to discuss potential bids with bidders
to identify the highest and best bid to serve as stalking horse
bidder. The DIP Facility requires the Debtors to enter into an
agreement with a stalking horse bidder by June 15, 2011.
As of June 8, 2011, the Debtors do not know yet what terms a
stalking horse bid will contain or what bid protections the
stalking horse will require. The Debtors will consult with the
DIP Lenders and the Committee with respect to any protections and
concerning bidding procedures for the auction. Moreover, the
Debtors plan to supplement the Motion with the agreement executed
with the stalking horse bidder to provide notice of the bid
protections.
Waiver of Contractual Restrictions
and Exemption Laws
The Debtors further ask Judge Glenn to override or invalidate any
contractual or applicable law restrictions that may impair their
ability to close stores and conduct the SCSs.
In connection with the Phase I SCSs, the Court approved sale
guidelines, which govern certain rights of landlords during the
sales. Accordingly, the Debtors propose that those same
guidelines also govern the SCSs for the 51 stores. Similarly,
the Phase I SCSs Order contains a procedure for landlords to
challenge the sale guidelines, which the Debtors propose also
exist with respect to the SCSs.
Certain states in which the Closing Stores are located have or
may have licensing and other requirements governing the conduct
of store closing, liquidation, or other inventory clearance
sales, including state, and local laws, statutes, rules,
regulations, and ordinances related to store closing and
liquidation sales, establishing licensing, permitting, or bonding
requirements, waiting periods, time limits, bulk sale
restrictions, augmentation limitations that would otherwise apply
to the SCSs, or consumer fraud laws, with the exception of
deceptive advertising laws. These are referred as the
"Liquidation Sale Laws." The Debtors thus seek the Court's
permission to conduct the SCSs without the necessity of, and the
delay associated with, complying with the Liquidation Sale Laws.
Abandonment of Unsold Property
To the extent that the Liquidating Agent does not sell any
Merchandise, Owned FF&E, Newsstand Inventory or Cafe/Candy
Inventory, the Debtors propose that they be authorized upon the
conclusion of the SCSs to abandon the Merchandise without
incurring liability to any person or entity. The Debtors aver
that if they are unable to sell or dispose of any assets
following the SCSs, it would be costly and burdensome to the
estate to retain those assets.
Mr. Friedman assures the Court that the Debtors and the
Liquidating Agent will utilize all commercially reasonable
efforts to remove or cause to be removed any confidential or
personal identifying information in any of the Debtors' hardware,
software, computers or cash registers or similar equipment that
are to be sold or abandoned.
Judge Glenn has yet to set a hearing date for the Debtors' SCS
Motion.
Holly Etlin Felder, Borders' senior vice president for
restructuring, filed with the Court a supporting declaration.
She insists that the SCS Motion should be heard on an expedited
basis so that SCSs can begin no later than the June 22 deadline
in the DIP Facility.
* * *
The closing of all 50 stores, which Borders considers to be among
its profitable stores, could increase the risk of liquidation of
the entire chain, according to a bankruptcy lawyer, Tiffany Kary
of Bloomberg News reports.
"If they close all 50 stores, and say that includes some of their
best, Najafi Cos. and Gores Group LLC may say, why would I want
the remaining stuff," Schuyler Carroll, Esq., a partner at
Perkins Coie LLP, in New York, said in a Bloomberg interview.
Mary Davis, spokesperson for Borders, said the company expects
far fewer stores to close, Bloomberg relays. "We are actively
working with our landlords to obtain the required stipulations,
including an extension of the 210-day window given to bankrupt
companies to assume or reject leases."
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online
e-commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Court Okays Rejection of Seattle's Best Licenses
---------------------------------------------------------------
Judge Martin Glenn has allowed Borders Group and it s affiliates
to reject the Licensing Agreement with Seattle's Best Coffee, LLC,
effective as of the date the Debtors complete de-branding all of
their SBC Stores and file a notice with the Court advising parties
of the completion of the de-branding.
The rejection effective date is expected to occur on or before
July 31, 2011, and SBC will not be required to ship goods or
provide services to the Debtors after June 30, 2011.
The Debtors are to continue to make royalty payments to SBC in
accordance with the Licensing Agreement on a pro-rated, location-
by-location basis through the Effective Date.
SBC may filed its proof of claim for damages arising from
rejection of the Licensing Agreement on or before the date that
is 45 days after the Effective Date, or will be forever barred
from doing so, the Court rules.
Nothing in the Court's order will prejudice any of SBC's rights
under any applicable federal or state laws, including with
respect to whether the Debtors have properly or completely de-
branded the SBC Stores.
Unless otherwise agreed to in writing by the Debtors and the
Official Committee of Unsecured Creditors, any contract or
agreement that the Debtors enter into for the supply of food,
coffee, paper goods, or training personnel, or as otherwise
related to the ongoing operations of the Debtors' cafes, will:
(i) permit the Debtors to terminate said contract or agreement
on no more than 30 days' notice; and
(ii) provide that the Debtors' exercise of their right to
terminate will not be deemed a default and neither party
will have any claims for damages resulting from the
exercise of that termination right.
SBC refiled with the Court its objection and supporting
declaration by Robert Dilworth, which documents were previously
filed in redacted forms.
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online
e-commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BORDERS GROUP: Notifies Late Filing of First Quarter Report
-----------------------------------------------------------
Borders Group, Inc., filed with the U.S. Securities and
Exchange Commission on June 9, 2011, a notice of late filing of
its quarterly report on Form 10-Q for the period ended
April 30, 2011.
Borders Chief Financial Officer Scott Henry relates that as a
result of the pendency of Borders' Chapter 11 cases, the Company
has been required to devote a substantial portion of its
personnel and administrative resources, including the personnel
and resources of its accounting and financial reporting
organization, to matters relating to the bankruptcy cases.
Against this backdrop, Borders does not expect to file its Form
10-Q for the fiscal quarter ended April 30, 2011 with the SEC
within the time period prescribed in Rule 12b-25 under the
Securities and Exchange Act, Mr. Henry states. The Company is
also unable at this time to determine whether or when it may
resume filing periodic reports with the SEC in accordance with
the Securities Exchange Act, he adds.
On February 16, 2011, BGI, Borders, Inc. and certain of their
domestic subsidiaries filed voluntary petitions for relief under
Chapter 11 of the United States Code in the U.S. Bankruptcy Court
for the Southern District of New York. The reorganization cases
are being jointly administered as Case No. 11-10614(MG) under the
caption "In re Borders Group, Inc., et al." The Debtors continue
to operate their business as "debtors-in-possession" under the
jurisdiction of the Bankruptcy Court and in accordance with the
applicable provisions of the Bankruptcy Code and orders of the
Bankruptcy Court.
Due to adverse business conditions and other circumstances
resulting in the commencement of the Borders bankruptcy, there
was a significant adverse change in Company's results of
operations for its fiscal quarter ending April 30, 2011, compared
with the Company's results of operations for the same period
during the prior fiscal year, Mr. Henry notes.
In addition, on April 29, 2011, and May 20, 2011, the Company
filed Current Reports on Form 8-K with the SEC, which included as
exhibits copies of the monthly operating reports filed by the
Debtors with the Bankruptcy Court for the periods from Feb. 16,
2011 to March 26, 2011 and March 27, 2011 to April 30, 2011,
respectively. The Company expects to continue to include copies
of its monthly operating reports filed with the Bankruptcy Court
as exhibits to Current Reports on Form 8-K filed with the SEC
within four business days after the date those reports are filed
with the Bankruptcy Court. The monthly operating reports include
information regarding the results of operations of the Debtors
during the periods covered by those reports.
Borders said it will file the quarterly report on Form 10-Q on or
before fifth calendar day following the prescribed due date under
Rule 12b-25(b).
About Borders Group
Borders Group is a leading operator of book, music and movie
superstores and mall-based bookstores. At Jan. 29, 2011, the
Debtors operated 642 stores, under the Borders, Waldenbooks,
Borders Express and Borders Outlet names, as well as Borders-
branded airport stores in the United States, of which 639 stores
are located in the United States and 3 in Puerto Rico. Two of
Borders' flagship stores (along with other less prominent stores)
are located in Manhattan. In addition, the Debtors operate a
proprietary e-commerce Web site, http://www.Borders.com/,
launched in May 2008, which includes both in-store and online
e-commerce components. As of Feb. 11, 2011, Borders employed a
total of 6,100 full-time employees, 11,400 part-time employees,
and approximately 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011.
David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn,
Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres &
Friedman LLP, in New York, serve as counsel to the Debtors.
Jefferies & Company's Inc. is the financial advisor. DJM Property
Management is the lease and real estate services provider. AP
Services LLC is the interim management and restructuring services
provider. The Garden City Group, Inc., is the claims and notice
agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, serve as counsel to the DIP Agents.
National law firm Lowenstein Sandler has been appointed to
represent the official unsecured creditors committee for Borders
Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein
Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights
Group, are leading the team.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010
Borders Group has sought approval to sell merchandise and owned
furniture, fixtures and equipment located at approximately 200 of
their stores and, at Borders' option, up to 75 of 136 potential
other stores, through store closing sales.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000)
BOZEL S.A.: Unit Files Schedules of Assets and Liabilities
----------------------------------------------------------
Bozel, LLC, filed with the U.S. Bankruptcy Court for the Southern
District of New York on May 4, 2011, amended schedules of its
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $0
B. Personal Property $41,134,010
C. Property Claimed as
Exempt
D. Creditors Holding $16,811,108
Secured Claims
E. Creditors Holding $148,500
Unsecured Priority
Claims
F. Creditors Holding $30,405,428
Unsecured Non-priority
Claims
----------- ------------
TOTAL $41,134,010 $47,365,036
About Bozel S.A.
Bozel S.A. is a mineral mining company based in Luxembourg. Bozel
S.A. sought bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-11802) on April 6,
2010. William F. Savino, Esq., Daniel F. Brown, Esq., and Beth
Ann Bivona, Esq., at Damon Morey LLP in Buffalo, N.Y., represent
the Debtor, and BDO Consulting serves as the Debtor's financial
advisor. Allen G. Kadish, Esq. -- kadisha@gtlaw.com -- Kaitlin R.
Walsh, Esq. -- walshkr@gtlaw.com -- and Mark D. Bloom, Esq. --
bloomm@gtlaw.com -- at Greenberg Traurig, LLP, represent the
Liquidator. The Debtor estimated assets and debts at US$50
million to US$100 million in its Chapter 11 petition.
Bozel, LLC, a subsidiary of Bozel SA, filed a separate petition
for Chapter 11 on January 10, 2011 (Bankr. S.D.N.Y. Case No.
11-10033). Gary C. Fischoff, Esq., at Steinberg, Fineo, Berger &
Fischoff, in Woodbury, N.Y., represents the Debtor as counsel.
The Debtor estimated assets of US$1 million to US$10 million and
debts of US$10 million to US$50 million in its Chapter 11
petition.
The two cases are jointly administered under Case No. 10-11802.
BOZEL S.A.: Seeks Court OK to Expand Scope of BDO's Retention
-------------------------------------------------------------
Bozel S.A. seeks authority from the U.S. Bankruptcy Court for the
Southern District of New York to expand the scope of the retention
BDO Consulting Corporate Advisors, LLC, as financial advisor to
the Debtor to:
(i) add the rendering of tax advice, including the preparation
and filing of necessary tax returns and documentation in
the United States to the list of services to be provided
by BCCA as financial advisor to the Debtors; and
(ii) authorize the retention of BDO Tax & Accounting S.A. to
provide necessary tax advice and services to the Debtors
in Luxembourg.
Specifically, the Debtors seek to expand the scope of BCCA's
retention to include these:
-- At the request of the Sole Director, prepare the Federal
and any state tax returns required for Bozel LLC and/or
Bozel SA for the years ended Dec. 31, 2006; 2007; 2008;
2009; 2010; and, 2011;
-- At the request of the Sole Director, perform additional
services as may be requested, including but not limited
to estimated tax payments; tax planning; and tax
consultation; and
-- Should the tax returns of Bozel LLC and/or Bozel SA be
selected for review by the taxing authorities, any
proposed adjustments by the examining agent are subject
to certain rights of appeal. At the request of the Sole
Director, in the event of such a government tax examination,
BCCA will be available upon request to represent the
Company, subject to the execution of a separate engagement
letter, if appropriate.
BDO Consulting will be paid based on the hourly rates of its
personnel:
Partners/Managing Directors US$550 to US$800
Directors/Senior Managers/Principals US$350 to US$600
Managers/Vice Presidents US$225-US$500
Seniors/Associates US$200-US$350
Staff US$125-US$225
Retention of BDO Luxembourg
The Debtors seek to include the retention of BDO Luxembourg
pursuant to the terms and conditions of the BDO Luxembourg
Engagement Letter.
BDO Luxembourg will:
-- prepare corporate income tax and municipal business tax
return for Bozel;
-- compute tax credit for investments, if applicable;
-- compute unitary value of the preparation of the net wealth
tax return, if applicable;
-- prepare all necessary appendices to those returns;
-- review of the relating tax assessments issued by the tax
authorities; and
-- provide any other related Luxembourg tax advice.
BDO Luxembourg will be paid based on the hourly rates of its
personnel:
Title Hourly Rate
----- -----------
Partner EUR420
Senior Manager EUR310
Manager EUR225
Senior EUR120
Assistant EUR80
Gerdy Roose, a partner of BDO Tax & Accounting S.A., assures the
Court that the BDO Luxembourg is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code.
As reported in the Troubled Company Reporter on Oct. 14, 2010,
Bozel S.A. sought and obtained authorization from the U.S.
Bankruptcy Court for the Southern District of New York to employ
BDO Consulting Corporate Advisors, LLC, as financial advisor to
the Debtor effective as of Aug. 6, 2010.
About Bozel S.A.
Bozel S.A. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
10-11802) on April 6, 2010. In its petition, the Debtor estimated
assets ranging from US$50 million to US$100 million, and debts
ranging from US$10 million to US$50 million. William F. Savino,
Esq., Daniel F. Brown, Esq., and Beth Ann Bivona, Esq., at Damon
Morey LLP in Buffalo, N.Y., represent the Debtor.
BRIARWOOD CAPITAL: Seeks to Tap John William as Appellate Counsel
-----------------------------------------------------------------
Briarwood Capital, LLC, seeks approval from the U.S. Bankruptcy
Court of the Central District of California to employ Jon R.
Williams, APLC as special appellate counsel.
As reported in the Troubled Company Reporter on June 9, 2011,
Leslie T. Gladstone, the Chapter 11 Trustee for Briarwood Capital
LLC, obtained authority from the U.S. Bankruptcy Court for the
Southern District Of California to employ Jon R. Williams, APLC,
as special appellate counsel, nunc pro tunc with a retroactive
date of Aug. 6, 2010.
The retention of JRW is necessary to preserve the appellate rights
of the estate in the Superior Court action, Briarwood Capital, LLC
v. Lennar Land Partners II, et al. Additionally, the Trustee
seeks nunc pro tunc approval of the retention of JRW for the
appellate services it has already provided in connection with
Briarwood Capital, LLC v. Lennar Homes of California, et al.
About Nicolas Marsch, Briarwood and Colony
Based in Rancho Santa Fe, California, Briarwood Capital, LLC's
primary business prepetition was land acquisition and organizing
financing for real estate development. Briarwood filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 10-
02677) on Feb. 23, 2010. In its schedules, the Debtor disclosed
$292,798,759 in assets and $18,563,641 in liabilities as of the
Petition Date.
Colony Properties International, LLC -- Colony I -- (Bankr. S.D.
Calif. Case No. 10-02937) and Colony Properties International II,
LLC -- Colony II -- (Bankr. S.D. Calif. Case No. 10-03361) also
filed for Chapter 11.
Rancho Santa Fe, California-based Nicolas Marsch, III, filed for
Chapter 11 bankruptcy protection on Feb. 25, 2010 (Bankr. S.D.
Calif. Case No. 10-02939). Mr. Marsch estimated assets at
$100 million to $500 million and debts at $10 million to
$50 million.
Mr. Marsch has a 100% membership interest in Briarwood, which he
valued at over $274 million. He also has a 100% membership
interest in Colony Properties. Mr. Marsch also asserts more than
$2 million in claims against Briarwood and is a guarantor of debt
owed by Briarwood and by to KBR Opportunity Fund II. He is also
the guarantor of Colony's debt to KBR. Colony asserts more than
$668,000 in claims against Mr. Marsch. Colony also asserts more
than $50,000 in claims against Briarwood.
The cases are separately administered. Jeffry A. Davis, Esq., at
Mintz Levin Cohn Ferris Glovsky & Popeo, represents the Debtors in
their restructuring efforts. In July 2010, the Court held that
Mintz Levin was ineligible to represent the estates of Mr. Marsch,
Briarwood and Colony Properties, or any two of them. Chapter 11
trustees have been appointed in each of the cases.
Richard M. Kipperman serves as the Chapter 11 trustee for Colony
Properties International, LLC and Colony Properties International
II, LLC; and Leslie T. Gladstone serves as the Chapter 11 trustee
for Briarwood.
C&D TECHNOLOGIES: Files Form S-8; Registers 1.51MM Common Shares
----------------------------------------------------------------
C&D Technologies, Inc., filed with the U.S. Securities and
Exchange Commission a Form S-8 registration statement registering
an aggregate of 1,513,997 shares of common stock consisting of:
(a) 378,497 shares of common stock issuable pursuant to the C&D
Technologies, Inc., 2011 Stock Option Plan; and
(b) 1,135,500 shares of common stock issuable with respect to
outstanding options previously granted pursuant to the
Plan.
A full-text copy of the prospectus is available for free at:
http://is.gd/T01UJP
About C&D Technologies
C&D Technologies, Inc., is a manufacturer, marketer and
distributor of electrical power storage systems for the standby
power storage market. The Company makes lead acid batteries and
standby power systems that integrate lead acid batteries with
other electronic components, which are used to provide backup or
standby power for electrical equipment in the event of power loss
from the primary power source.
The Company reported a net loss of $55.55 million on
$354.83 million of net sales for the fiscal year ended Jan. 31,
2011, compared with a net loss of $25.78 million on
$335.71 million of net sales during the prior fiscal year.
The Company's balance sheet at April 30, 2011, showed $253.20
million in total assets, $158.80 million in total liabilities and
$94.40 million in total equity.
C&D Technologies in December 2010 escaped a bankruptcy filing
after completing an out-of-court restructuring that reduced the
Company's total debt from approximately $175 million to
$50 million. The Company in September had entered into a
restructuring support agreement with noteholders to a
restructuring that will be effected through (i) an offer to
exchange the Company's outstanding notes for up to 95% of the
Company's common stock, or (ii) a prepackaged plan of
reorganization under Chapter 11 of the U.S. Bankruptcy Code, if
the exchange offer fails to get the requisite support. C&D
Technologies elected not to make a semi-annual interest
payment due on its 5.25% Convertible Senior Notes due 2025 on
Nov. 1, 2010.
CALPINE CORP: Moody's Assigns 'B1' Rating to Sr. Secured Term Loan
------------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Calpine
Corporation's (Calpine) new senior secured term loan due April
2018. Concurrent with this rating assignment, Moody's affirmed
Calpine's B1 Corporate Family Rating (CFR) and B1 Probability of
Default Rating. Calpine's rating outlook is stable.
RATINGS RATIONALE
Calpine's B1 CFR reflects continued improvement in the company's
overall financial performance and an expectation for strengthened
cash flow and earnings following last year's purchase of
generation assets located in eastern PJM, since renamed Calpine
Mid-Atlantic Energy (CMAE). The rating also considers actions
taken by the company to produce more predictable cash flow and
earnings over the intermediate term through new contracted
projects being developed and bilateral arrangements in place
between the company and various end-users. The rating considers
the company's hedging program, a favorable environmental profile,
and the sustained operating performance of the generation fleet.
At year-end 2010, Moody's calculates the ratio of Calpine's cash
flow (CFO-pre W/C) to debt at 7.9%, its cash flow coverage of
interest at 2.0x and its free cash flow to debt at 5.2%. Calpine's
forecast for 2011 adjusted EBITDA (as calculated by the company)
is $1.7 -$1.8 billion which is similar to the 2009 and 2010
reported levels of $1.782 billion and $1.712 billion,
respectively. As such, Moody's believes Calpine's financial
performance will continue to position it reasonably well as a
strong "B" rated unregulated power company.
The B1 (LGD4, 50%) rating for the secured term loan incorporates
the fact that all of the Calpine corporate debt will be first lien
debt and as such, should carry the same rating as the company's
CFR. The collateral securing the term loan will consist of a first
priority lien on a material percentage of all assets, including
equity in subsidiaries of Calpine and the support of restricted
subsidiary guarantors to the extent permitted by existing
contractual arrangements. Key components of the collateral package
include a direct first lien on the Geysers, a 725 MW base load
geothermal collection of plants in California, as well as a first
lien on natural gas-fired power generation facilities with a
combined capacity of 16,835 MW located throughout the US. The
collateral package also includes a first lien on the equity
interests in virtually all of the remaining plants.
The Calpine secured term loan holders will share in this
collateral package with existing lenders in the company's $1
billion revolver, existing holders of $5.9 billion in secured
notes, and existing holders of $1.3 billion term loans (all rated
B1). The secured term loan will not have any financial covenants
and will have language that allows the company to remove
guarantors of the first lien debt so long as the net tangible
assets of the remaining guarantors equal 166% of the total first
lien debt (CNTA ratio). Moody's observes that the CNTA ratio also
exists in the company's bond indenture, the revolver, and the
other term loan as an incurrence test. Moody's also observes that
while the first lien secured creditors share in the collateral on
a pari-passu basis, note holders and term loan lenders will have
limits placed on their voting rights in certain circumstances
until such time as the revolver has been reduced to less than $500
million.
Proceeds from the term loan, along with cash on hand, will be used
to repay the $345.3 million of term loan borrowings outstanding
under the Metcalf and Deer Park project debt, and pay fees and
expenses in connection with the transaction. At March 31, 2011,
approximately $247.8 million and $97.5 million was outstanding
under the Metcalf and Deer Park project debt, respectively.
The stable rating outlook reflects Moody's expectation for
continued execution of the company's strategy through strong plant
performance and a carefully implemented hedging strategy which is
expected to result in free cash flow generation.
In light of the May 2010 rating upgrade and Moody's belief that
future debt reduction will occur at a slower pace, limited
prospects exist for the CFR to be upgraded in the near-term.
Calpine's CFR could be upgraded if the company's ratio of free
cash flow to debt reaches the high single digits, its cash flow to
debt exceeds 12%, and cash coverage of interest expense is above
2.3x on a sustainable basis.
The rating could be downgraded if the company is not able to
execute on its current plan through strong plant performance and a
carefully implemented hedging strategy leading to the company's
cash flow to debt declining to below 7%, and its cash coverage of
interest expense falling below 1.8x on a sustained basis.
The principal methodologies used in this rating were Unregulated
Utilities and Power Companies published in August 2009, and Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Headquartered in Houston, Texas, Calpine is a major U.S.
independent power company that owns 92 operating power plants with
an aggregate generation capacity of approximately 28,081 MW and
584 MW under construction. During 2010, Calpine had operating
revenues of $6.5 billion.
CANAL CAPITAL: Incurs $66,500 Net Loss in April 30 Quarter
----------------------------------------------------------
Canal Capital Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting a
net loss of $66,471 on 66,244 of real estate revenues and $592,825
of stockyard revenues for the three months ended April 30, 2011,
compared with a net loss of $48,911 on $70,863 of real estate
revenues and $656,140 of stockyard revenues for the same period
during the prior year.
The Company also reported a net loss of $128,941 on $136,488 of
real estate revenues and $1.17 million of stockyard revenues for
the six months ended April 30, 2011, compared with a net loss of
$124,173 on $147,093 of real estate revenues and $1.31 million of
stockyard revenues for the same period a year ago.
The Company's balance sheet at April 30, 2011, showed
$2.64 million in total assets, $2.30 million in total liabilities,
and $343,101 in stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/wb6ICq
About Canal Capital
Port Jefferson Station, N.Y.-based Canal Capital Corporation is
engaged in two distinct businesses -- real estate and stockyard
operations.
Canal's real estate properties are located in Sioux City, Iowa,
South St Paul, Minnesota, St Joseph, Missouri, Omaha, Nebraska and
Sioux Falls, South Dakota. The properties consist, for the most
part, of an Exchange Building (commercial office space), land and
structures leased to third parties (rail car repair shops, lumber
yards and various other commercial and retail businesses) as well
as vacant land available for development or resale.
Canal currently operates one central public stockyard located in
St. Joseph, Missouri. Canal closed the stockyard it operated in
Sioux Falls, South Dakota in December 2009.
Going Concern Doubt
In its annual report on Form 10-K for fiscal year ended Oct. 31,
2010, the Company said significant factors raise substantial doubt
about the Company's ability to continue as a going concern. "The
Company has suffered recurring losses from operations and is
obligated to continue making substantial annual contributions to
its defined benefit pension plan."
Due to financial constraints Canal's fiscal 2010 and 2009
financial statements have been presented in the Form 10-K without
benefit of independent audit.
Canal's stock is no longer listed over-the-counter on the "pink
sheets". The stock was delisted by the SEC as a result of Canal's
filing its fiscal 2009 Form 10-K without benefit of an independent
audit.
CB HOLDING: To Auction 11 Liquor Licenses July 12
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the operator of Charlie Brown's Steakhouse
restaurants is conducting an auction for its liquor licenses in
New Jersey or Pennsylvania. After finding buyers for 20 liquor
licenses from stores it closed, Charlie Brown's was stuck with 11
unused liquor licenses. At a June 23 hearing, the company wants
the bankruptcy judge in Delaware to authorize a July 12 auction.
Offers can be submitted for one or more licenses. The hearing for
approval of the sale would be July 19. The company said it hopes
to file a liquidating Chapter 11 plan "soon."
About CB Holding
New York-based CB Holding Corp. operated 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.
CB Holding sold off its The Office restaurant chain and 12 Bugaboo
Creek stores in separate auctions. Villa Enterprises Ltd. won the
bidding for The Office chain with its $4.68 million. RRGK LLC
acquired the 12 Bugaboo Creek stores for $10.05 million, more than
tripling the $3.175 million first bid from an affiliate of
Landry's Restaurants Inc.
CB Holding and its affiliates filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case No. 10-13683) on Nov. 17, 2010.
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.
CC MEDIA: Plans to Offer Add'l $750MM of 9.0% Notes Due 2021
------------------------------------------------------------
Clear Channel Communications, Inc., intends to offer, subject to
market and customary conditions, an additional $750 million in
aggregate principal amount of 9.0% priority guarantee notes due
2021 in a private offering that is exempt from registration under
the Securities Act of 1933, as amended. The Notes will have
identical terms to, and are expected to be treated as a single
class with, the $1.0 billion in aggregate principal amount of 9.0%
priority guarantee notes due 2021 issued on Feb. 23, 2011.
The Notes will be fully and unconditionally guaranteed, jointly
and severally, on a senior basis by CCU's parent, Clear Channel
Capital I, LLC, and all of CCU's existing and future domestic
wholly-owned restricted subsidiaries. The Notes and the related
guarantees will be secured by (1) a lien on (a) the capital stock
of CCU and (b) certain property and related assets that do not
constitute "principal property" (as defined in the indenture
governing certain existing senior notes of CCU), in each case
equal in priority to the liens securing the obligations under
CCU's senior secured credit facilities and existing priority
guarantee notes and (2) a lien on the accounts receivable and
related assets securing CCU's receivables based credit facility
junior in priority to the lien securing CCU's obligations
thereunder.
Of the anticipated proceeds from the issuance of the notes, CCU
intends to use (i) $250 million to repay at maturity a portion of
CCU's 5% legacy notes which mature in March 2012 and (ii) the
remaining $500 million for general corporate purposes (to
replenish cash on hand that CCU previously used to pay legacy
notes at maturity on March 15, 2011, and May 15, 2011).
The $500 million of proceeds available for general corporate
purposes may be used to repay indebtedness, including repaying
indebtedness outstanding under CCU's revolving credit facilities.
In addition, such proceeds may be used in connection with one or
more future transactions involving a permanent repayment of a
portion of CCU's senior secured credit facilities as part of CCU's
long-term efforts to optimize its capital structure.
CCU intends to use cash on hand to pay fees and expenses in
connection with the offering.
The Notes and related guarantees will be offered only to
"qualified institutional buyers" in reliance on the exemption from
registration pursuant to Rule 144A under the Securities Act and to
persons outside of the United States in compliance with Regulation
S under the Securities Act. The Notes and the related guarantees
have not been registered under the Securities Act, or the
securities laws of any state or other jurisdiction, and may not be
offered or sold in the United States without registration or an
applicable exemption from the Securities Act and applicable state
securities or blue sky laws and foreign securities laws.
On June 9, 2011, Clear Channel entered into a Purchase Agreement,
by and among CCU, CCU's parent, Clear Channel Capital I, LLC,
certain subsidiary guarantors named therein, and Citigroup Global
Markets Inc. and Goldman, Sachs & Co., as representatives of the
several initial purchasers, relating to the issuance and sale of
$750 million in aggregate principal amount of CCU's 9.0% Priority
Guarantee Notes due 2021. The Notes will be issued at a price of
93.845% of their principal amount plus accrued interest from
Feb. 23, 2011. The Notes will have identical terms to, and will
be treated as a single class with, the $1.0 billion in aggregate
principal amount of 9.0% Priority Guarantee Notes due 2021 issued
by CCU on Feb. 23, 2011.
The Purchase Agreement under which the Notes will be sold by CCU
contains customary representations, warranties and agreements by
CCU and the Guarantors, and customary conditions to closing,
indemnification obligations of CCU and the Guarantors, including
for liabilities under the Act, other obligations of the parties
and termination provisions.
About CC Media and Clear Channel
San Antonio, Tex.-based CC Media Holdings, Inc. (OTC BB: CCMO)
-- http://www.ccmediaholdings.com/-- is the parent company of
Clear Channel Communications, Inc. CC Media Holdings is a global
media and entertainment company specializing in mobile and on-
demand entertainment and information services for local
communities and premier opportunities for advertisers. The
Company's businesses include radio and outdoor displays.
CC Media has three reportable business segments: Radio
Broadcasting; Americas Outdoor Advertising; and International
Outdoor Advertising. Approximately half of CC Media's revenue is
generated from its Radio Broadcasting segment.
The Company reported a net loss of $462.8 million on
$5.866 billion of revenue for the fiscal year ended Dec. 31, 2010,
compared with a net loss of $4.049 billion on $5.552 billion of
revenue for the fiscal year ended Dec. 31, 2009.
The Company's balance sheet at March 31, 2011, showed $16.94
billion in total assets, $24.22 billion in total liabilities and a
$7.28 billion total shareholders' deficit.
* * *
CC Media Holdings carries 'CCC+' issuer credit ratings from
Standard & Poor's. Clear Channel Carries a 'Caa2' corporate
family rating from Moody's Investors Service and an issuer default
rating of 'CCC' from Fitch Ratings.
Fitch said in November 2010, that its ratings concerns center on
the company's highly leveraged capital structure, with significant
maturities in 2014 and 2016; the considerable interest burden that
pressures free cash flow generation; technological threats and
secular pressures in radio broadcasting; and the company's
exposure to cyclical advertising revenue. The ratings are
supported by the company's leading position in both the outdoor
and radio industries, as well as the positive fundamentals and
digital opportunities in the outdoor advertising space.
In February 2011, Standard & Poor's affirmed it 'CCC+' corporate
credit rating and positive outlook on CC Media Holdings and
operating subsidiary Clear Channel, which S&P views on a
consolidated basis.
S&P said the 'CCC+' corporate credit rating on CC Media Holdings
Inc. reflects the risks surrounding the longer-term viability of
the company's capital structure--in particular, refinancing risk
relating to sizable secured debt maturities in 2014 ($3.2 billion
pro forma for the transaction) and 2016 ($10.4 billion). In S&P's
view, the company has a satisfactory business risk profile, due to
its position as the largest radio and global outdoor advertising
operator, its good geographic and market diversity, and moderate
long-term growth prospects at the outdoor business. S&P views the
financial risk profile as highly leveraged, given the company's
significant refinancing risk, roughly break-even EBITDA coverage
of interest expense, and slim discretionary cash flow.
CC MEDIA: Pacing Data Consistent with First Quarter Disclosure
--------------------------------------------------------------
Clear Channel Communications, Inc., disclosed to certain research
analysts that current pacing data is not materially different from
what was disclosed during CC Media Holdings, Inc.'s and Clear
Channel Outdoor Holdings, Inc.'s first quarter earnings call held
on May 6, 2011.
Pacing data reflects revenues booked at a specific date versus the
comparable date in the prior period and may or may not reflect the
actual revenue growth at the end of the period. CCU's revenue
pacing information includes an adjustment to prior periods to
include all acquisitions and exclude all divestitures in both
periods presented for comparative purposes. It also excludes the
effects of foreign exchange movements.
About CC Media and Clear Channel
San Antonio, Tex.-based CC Media Holdings, Inc. (OTC BB: CCMO)
-- http://www.ccmediaholdings.com/-- is the parent company of
Clear Channel Communications, Inc. CC Media Holdings is a global
media and entertainment company specializing in mobile and on-
demand entertainment and information services for local
communities and premier opportunities for advertisers. The
Company's businesses include radio and outdoor displays.
CC Media has three reportable business segments: Radio
Broadcasting; Americas Outdoor Advertising; and International
Outdoor Advertising. Approximately half of CC Media's revenue is
generated from its Radio Broadcasting segment.
The Company reported a net loss of $462.8 million on
$5.866 billion of revenue for the fiscal year ended Dec. 31, 2010,
compared with a net loss of $4.049 billion on $5.552 billion of
revenue for the fiscal year ended Dec. 31, 2009.
The Company's balance sheet at March 31, 2011, showed $16.94
billion in total assets, $24.22 billion in total liabilities and a
$7.28 billion total shareholders' deficit.
* * *
CC Media Holdings carries 'CCC+' issuer credit ratings from
Standard & Poor's. Clear Channel Carries a 'Caa2' corporate
family rating from Moody's Investors Service and an issuer default
rating of 'CCC' from Fitch Ratings.
Fitch said in November 2010, that its ratings concerns center on
the company's highly leveraged capital structure, with significant
maturities in 2014 and 2016; the considerable interest burden that
pressures free cash flow generation; technological threats and
secular pressures in radio broadcasting; and the company's
exposure to cyclical advertising revenue. The ratings are
supported by the company's leading position in both the outdoor
and radio industries, as well as the positive fundamentals and
digital opportunities in the outdoor advertising space.
In February 2011, Standard & Poor's affirmed it 'CCC+' corporate
credit rating and positive outlook on CC Media Holdings and
operating subsidiary Clear Channel, which S&P views on a
consolidated basis.
S&P said the 'CCC+' corporate credit rating on CC Media Holdings
Inc. reflects the risks surrounding the longer-term viability of
the company's capital structure--in particular, refinancing risk
relating to sizable secured debt maturities in 2014 ($3.2 billion
pro forma for the transaction) and 2016 ($10.4 billion). In S&P's
view, the company has a satisfactory business risk profile, due to
its position as the largest radio and global outdoor advertising
operator, its good geographic and market diversity, and moderate
long-term growth prospects at the outdoor business. S&P views the
financial risk profile as highly leveraged, given the company's
significant refinancing risk, roughly break-even EBITDA coverage
of interest expense, and slim discretionary cash flow.
CC MEDIA: Announces Pricing of 9.0% Priority Notes Due 2021
-----------------------------------------------------------
Clear Channel Communications, Inc., announced the pricing of its
previously announced offering of $750 million in aggregate
principal amount of 9.0% priority guarantee notes due 2021. The
Notes will be issued at a price of 93.845% of their principal
amount plus accrued interest from Feb. 23, 2011. The Notes will
have identical terms to, and will be treated as a single class
with, the $1.0 billion in aggregate principal amount of 9.0%
priority guarantee notes due 2021 issued on Feb. 23, 2011.
Of the proceeds from the issuance of the Notes, CCU intends to use
(i) $203.8 million to repay at maturity a portion of CCU's 5%
legacy notes which mature in March 2012 and (ii) the remaining
$500 million for general corporate purposes (to replenish cash on
hand that CCU previously used to pay legacy notes at maturity on
March 15, 2011, and May 15, 2011).
The $500 million of proceeds available for general corporate
purposes may be used to repay indebtedness, including repaying
indebtedness outstanding under CCU's revolving credit facilities
(without reducing or terminating the associated commitments). In
addition, those proceeds may be used in connection with one or
more future transactions involving a permanent repayment of a
portion of CCU's senior secured credit facilities as part of CCU's
long-term efforts to optimize its capital structure.
CCU intends to use cash on hand to pay fees and expenses in
connection with the offering.
The Notes and related guarantees are being offered only to
"qualified institutional buyers" in reliance on the exemption from
registration pursuant to Rule 144A under the Securities Act of
1933, as amended, and to persons outside of the United States in
compliance with Regulation S under the Securities Act. The Notes
and the related guarantees have not been registered under the
Securities Act, or the securities laws of any state or other
jurisdiction, and may not be offered or sold in the United States
without registration or an applicable exemption from the
Securities Act and applicable state securities or blue sky laws
and foreign securities laws.
About CC Media and Clear Channel
San Antonio, Tex.-based CC Media Holdings, Inc. (OTC BB: CCMO)
-- http://www.ccmediaholdings.com/-- is the parent company of
Clear Channel Communications, Inc. CC Media Holdings is a global
media and entertainment company specializing in mobile and on-
demand entertainment and information services for local
communities and premier opportunities for advertisers. The
Company's businesses include radio and outdoor displays.
CC Media has three reportable business segments: Radio
Broadcasting; Americas Outdoor Advertising; and International
Outdoor Advertising. Approximately half of CC Media's revenue is
generated from its Radio Broadcasting segment.
The Company reported a net loss of $462.8 million on
$5.866 billion of revenue for the fiscal year ended Dec. 31, 2010,
compared with a net loss of $4.049 billion on $5.552 billion of
revenue for the fiscal year ended Dec. 31, 2009.
The Company's balance sheet at March 31, 2011, showed $16.94
billion in total assets, $24.22 billion in total liabilities and a
$7.28 billion total shareholders' deficit.
* * *
CC Media Holdings carries 'CCC+' issuer credit ratings from
Standard & Poor's. Clear Channel Carries a 'Caa2' corporate
family rating from Moody's Investors Service and an issuer default
rating of 'CCC' from Fitch Ratings.
Fitch said in November 2010, that its ratings concerns center on
the company's highly leveraged capital structure, with significant
maturities in 2014 and 2016; the considerable interest burden that
pressures free cash flow generation; technological threats and
secular pressures in radio broadcasting; and the company's
exposure to cyclical advertising revenue. The ratings are
supported by the company's leading position in both the outdoor
and radio industries, as well as the positive fundamentals and
digital opportunities in the outdoor advertising space.
In February 2011, Standard & Poor's affirmed it 'CCC+' corporate
credit rating and positive outlook on CC Media Holdings and
operating subsidiary Clear Channel, which S&P views on a
consolidated basis.
S&P said the 'CCC+' corporate credit rating on CC Media Holdings
Inc. reflects the risks surrounding the longer-term viability of
the company's capital structure--in particular, refinancing risk
relating to sizable secured debt maturities in 2014 ($3.2 billion
pro forma for the transaction) and 2016 ($10.4 billion). In S&P's
view, the company has a satisfactory business risk profile, due to
its position as the largest radio and global outdoor advertising
operator, its good geographic and market diversity, and moderate
long-term growth prospects at the outdoor business. S&P views the
financial risk profile as highly leveraged, given the company's
significant refinancing risk, roughly break-even EBITDA coverage
of interest expense, and slim discretionary cash flow.
CEDAR FUNDING: Trustee, Advisers File Final Compensation Claims
---------------------------------------------------------------
Larry Parsons at Monterey County Herald reports that the trustee
and advisers have filed disputed claims for final compensation
against Cedar Funding.
According to the report, an attorney for the committee of
creditors -- mostly investors who put money in real estate loans
and a mortgage fund managed by Ceder Funding owner David Nilsen --
this week filed a scathing objection to the trustee's final
request for fees and costs.
A hearing on the compensation claims is scheduled Tuesday in U.S.
Bankruptcy Court in San Jose.
The report relates that Trustee Todd Neilson accused owner David
Nilsen of running the company for at least four years as a Ponzi
scheme. David Nilsen was indicted in September 2009 by a federal
grand jury and faces trial on the criminal changes.
Monterey County Herald relates that since bankruptcy proceedings
started, the trustee and his real estate and legal advisers' fees
have been a bone of contention. Early on, critics predicted the
fees would gobble up most of the money realized by liquidating
Cedar Funding's assets. A final liquidation plan approved this
year estimated that Cedar Funding creditors would receive 5 to 10
cents on every dollar of valid claims. The potential slim
pickings for investors is the focus of this week's objections by
creditor's committee attorney Aron Oliner.
Monterey County Herald says Mr. Oliner said the trustee has
recovered about $10.4 million for the bankruptcy estate, but he
and his advisers are seeking more than $7.8 million for fees and
costs. After deducting other fees and reserve requirements, there
will be about $770,000 in cash to distribute to Cedar Funding
creditors, Mr. Oliner said.
About Cedar Funding
Monterey, California-based Cedar Funding Inc. --
http://www.cedarfundinginc.com/-- was a mortgage lender. David
Nilsen, the principal, filed for Chapter 11 bankruptcy for Ceder
Funding after the Company stopped monthly payments to its
investors.
Cedar Funding filed a Chapter 11 petition (Bankr. N.D. Calif. Case
No. 08-52709) on May 26, 2008 due to the collapse of its Ponzi
scheme. Cedar Funding accepted many millions of dollars from
hundreds of individuals who believed they were acquiring
fractional interests in loans that were secured by real property.
Many more invested with CFI through a related entity, Cedar
Funding Mortgage Fund LLP, that acquired fractional interests in
the name of the Fund. CFI failed to record assignments of its
deeds of trust that would have provided security interests to most
of its investors, including the Fund.
R. Todd Neilson was appointed Chapter 11 trustee in the case.
Cecily A. Dumas, Esq., at Friedman, Dumas and Springwater, in San
Francisco, represents Mr. Neilson. The Debtor estimated assets of
less than $50,000 and debts of $100 million to $500 million in its
Chapter 11 petition.
As reported by the Troubled Company Reporter on March 7, 2011, the
Bankruptcy Court confirmed the joint Chapter 11 plan of
liquidation proposed by R. Todd Neilson, the Chapter 11 trustee
for the bankruptcy estates of Cedar Funding, Inc., et al., and the
Official Committee of Unsecured Creditors. According to the
disclosure statement explaining the Plan, holders of unsecured
claims aggregating $146,000,000 are expected to recover 5% to 10%
of their allowed claims. Holders of unsecured claims classified
as convenience claims -- expected to total $700,000 -- will each
receive a one-time payment of $2,000 and are projected to recover
100 cents on the dollar.
CENTER COURT: Wins OK to Employ Martin D. Gross as Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
authorized Center Court Partners, LLC, to employ Martin D. Gross,
Esq., at Law Offices of Martin D. Gross, as bankruptcy counsel.
The Debtor had originally retained Rocky Ortega, attorney at law,
to represent it in carrying out its duties under the Bankruptcy
Code.
Mr. Gross will, among other things:
a. represent the Debtor in its Chapter 11 case and advise
the Debtor as to its rights, duties and powers as a
debtor in possession;
b. prepare and file all necessary statements, schedules,
and other documents and to negotiate and prepare one
or more plans of reorganization for the Debtor;
c. represent the Debtor at all hearings, meetings of
creditors, conferences, trials, and other proceedings
in this case; and
d. perform such other legal services as may be necessary
in connection with this case.
Mr. Gross will be paid:
a. $300 per hour for the time spent in court;
b. $300 per hour for other time spent by the attorney; and
c. $100 per hour for paralegal time spent by paralegals
employed by the attorney.
Based in Agoura Hills, California, Center Court Partners LLC filed
for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No.
11-13715) on March 25, 2011. Judge Maureen Tighe presides over
the case. The Debtor estimated both assets and debts between
$10 million and $50 million as of the chapter 11 filing.
CENTURYLINK INC: S&P Assigns 'BB' Rating to Senior Notes
--------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' issue-level
and '3' recovery ratings to Monroe, La.-based incumbent local
exchange carrier (ILEC) CenturyLink Inc.'s proposed senior notes
(of an indeterminate amount) due 2017 and 2021. "We also affirmed
the 'BB' issue-level rating on the company's tack-on senior notes
due 2039 (also an indeterminate amount). The '3' recovery rating
on the notes remains unchanged and indicates expectations for
meaningful (50% to 70%) recovery in the event of payment default.
The company intends to use the proceeds to fund the acquisition of
data center operator Savvis Inc. or refinance existing debt," S&P
said.
S&P continued, "We also raised the issue-level rating on the debt
at Qwest Communications International (QCII) and Qwest Capital
Funding (QCF) to 'BB' from 'BB-' based on improved recovery
prospects. We revised the recovery rating on this debt to '4' from
'5'. The '4' recovery rating indicates expectations for average
(30% to 50%) recovery in the event of payment default. This action
follows the completion of Qwest Corp.'s issuance of $661 million
of senior notes, proceeds of which, along with revolver
borrowings, it used to redeem $825 million of notes at Qwest
Corp., which ultimately improves recovery prospects for the debt
at Qwest Corp.'s direct parents QCII and QCF."
"At the same time, we affirmed all other ratings, including the
'BB' corporate credit rating, on CenturyLink. Pro forma adjusted
debt to EBITDA is about 3.1x as of March 31, 2011, although we
expect leverage to increase modestly over the next couple of years
because of declining EBITDA," S&P related.
"The ratings on CenturyLink continue to reflect significant
competition in its core consumer wireline phone business from
cable telephony and wireless substitution," said Standard & Poor's
credit analyst Allyn Arden, "and our expectation for continued
revenue declines because of ongoing access-line losses, which were
about 9.3% annually during the first quarter of 2011 on a pro
forma basis." Other factors include integration risk and an
aggressive shareholder-oriented financial policy with a
substantial dividend payout, which limits debt reduction.
CLAIM JUMPER: Wants Plan Exclusivity Pending Mediation
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports the remnant of Claim Jumper Restaurants LLC said it can't
confirm the liquidating Chapter 11 plan filed in March because of
a dispute between the official creditors' committee and the
subordinated noteholder, Black Canyon Capital LLC. To accommodate
mediation set to take place June 29, Claim Jumper wants the
bankruptcy judge at a June 27 hearing to extend the exclusive
right to propose a plan for 3-1/2 months to Sept. 30. The
mediation is to deal with the question of whether the subordinated
debt holder should be entitled to participate in the trust for
unsecured creditors.
About Claim Jumper
Irvine, California-based Claim Jumper Restaurants, LLC --
http://www.claimjumper.com/-- operated a chain of casual dining
restaurants. It was founded in 1977. It had locations in
Arizona, California, Colorado, Illinois, Nevada, Oregon,
Washington, and Wisconsin.
Claim Jumper filed for Chapter 11 bankruptcy protection (Bankr.
D. Del. Case No. 10-12819) on Sept. 10, 2010. The Debtor
estimated its assets at $50 million to $100 million and debts at
$100 million to $500 million as of the Petition Date.
The Debtor's affiliate, Claim Jumper Management, LLC, filed a
separate Chapter 11 petition (Bankr. D. Del. Case No. 10-12820).
Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, are the
Debtors' local counsel. Milbank, Tweed, Hadley & Mccloy LLP is
the Debtors' general bankruptcy counsel. Piper Jaffray & Co. is
the Debtors' financial advisors and investment bankers. Kurtzman
Carson Consultants LLC is the Debtors' notice, claims and
solicitation agent.
The Creditors Committee has selected Cooley LLP and Klehr Harrison
Harvey Branzburg LLP as counsel.
In December 2010, Claim Jumper completed the sale its business
to Landry's Restaurants Inc., in a transaction valued at
$76.6 million. Landry's outbid the offer of holders of mezzanine
debt with a winning bid that included $48.3 million cash, the
assumption of $23.3 million in debt, and $5 million cash to
collateralize existing letters of credit. The Debtor changed its
name to Goldcoast Liquidating LLC following the sale.
CLAIRE'S STORES: Bank Debt Trades at 9% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Claire's Stores,
Inc., is a borrower traded in the secondary market at 91.08 cents-
on-the-dollar during the week ended Friday, June 10, 2011, a drop
of 0.89 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 275 basis points above LIBOR to borrow
under the facility. The bank loan matures on May 29, 2014, and
carries Moody's B3 rating and Standard & Poor's B rating. The
loan is one of the biggest gainers and losers among 208 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Claire's Stores
Claire's Stores, Inc. -- http://www.clairestores.com/-- operates
as a specialty retailer of fashion accessories and jewelry for
preteens and teenagers, as well as for young adults in North
America and internationally. It offers jewelry products that
comprise costume jewelry, earrings, and ear piercing services; and
accessories, including fashion accessories, hair ornaments,
handbags, and novelty items.
Based in Pembroke Pines, Florida, Claire's Stores operates under
two brands: Claire's(R), which operates worldwide and Icing(R),
which operates only in North America. As of January 31, 2009,
Claire's Stores, Inc., operated 2,969 stores in North America and
Europe. Claire's Stores, Inc., also operates through its
subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a
50:50 joint venture with AEON, Co., Ltd. The Company also
franchises 198 stores in the Middle East, Turkey, Russia, South
Africa, Poland and Guatemala.
The Company's balance sheet at Oct. 30, 2010, showed $2.79 billion
in total assets, $218.86 million in total current liabilities,
$2.62 billion in long-term debt, and a stockholders' deficit of
$47.89 million. Claire's Stores carries 'Caa2' corporate family
and probability of default ratings, with 'positive' outlook, from
Moody's Investors Service, and 'B-' issuer credit ratings, with
'stable' outlook, from Standard & Poor's.
Moody's Investors Service in December 2010 upgraded Claire's
Stores' ratings, including its Corporate Family Rating and
Probability of Default Rating, to Caa2 from Caa3. The upgrade
reflects a decrease in Claire's probability of default given that
the company can now fully cover its interest expense. This is due
to earnings improvement from solid comparable store sales growth,
improved merchandise margins, and continued expense discipline.
Claire's Caa2 Probability of Default Rating reflects Moody's view
that although Claire's credit metrics have improved, they remain
very weak as a result of its heavy debt load. For the twelve
months ending October 30, 2010, Claire's debt to EBITDA was very
high at 9.3 times.
CLEAN BURN: Chapter 11 Sparks Fight Over $4.7 Million of Corn
-------------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that Perdue Bioenergy
LLC on Wednesday asked a bankruptcy judge in North Carolina to
allow the corn supplier to take back $4.7 million worth of corn
from Clean Burn Fuels LLC and toss the Debtor's lawsuit over the
inventory.
According to Law360, Clean Burn is holding 553,000 bushels of corn
at its Raeford, N.C., ethanol plant that the debtor, its supplier
Perdue, and its chief lender Cape Fear Farm Credit ACA all contend
belongs to them.
About Clean Burn
Clean Burn Fuels LLC, a North Carolina limited liability company
founded in 2005, is the first company to produce ethanol in North
Carolina. It completed the construction of its ethanol plant in
August of 2010 and started producing and selling ethanol and dried
distillers grains with solubles (DDGS) shortly thereafter.
Clean Burn filed for Chapter 11 bankruptcy protection (Bankr. M.D.
N.C. Case No. 11-80562) on April 3, 2011. John A. Northen, Esq.,
at Northen Blue, L.L.P., represents the Debtor.
In its schedules of assets and liabilities, the Company disclosed
$79,516,062 in assets and $79,218,681 in liabilities. The
schedules valued its ethanol plant at $72,000,000, securing at
$66,225,571 claim by a lender.
CLEAN BURN: Lumbee River to Join Unsecured Creditors' Committee
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina has approved Lumbee River Electric Membership
Corporation's motion to join Clean Burn Fuels LLC's Unsecured
Creditors' Committee.
The Court approved the request after finding that:
1. LREMC provided prepetition electric utility services to
Debtor's premises.
2. LREMC holds one of the seven largest prepetition claims
against Debtor, in an amount stated by LREMC to exceed
$483,500.00 and in an amount listed by Debtor as
$307,973.
3. LREMC's proposed representative has a suitable education,
background and training to promote meaningful contributions
to the Committee.
About Clean Burn
Clean Burn Fuels LLC, a North Carolina limited liability company
founded in 2005, is the first company to produce ethanol in North
Carolina. It completed the construction of its ethanol plant in
August of 2010 and started producing and selling ethanol and dried
distillers grains with solubles (DDGS) shortly thereafter.
Clean Burn filed for Chapter 11 bankruptcy protection (Bankr.
M.D.N.C. Case No. 11-80562) on April 3, 2011. John A. Northen,
Esq., at Northen Blue, L.L.P., represents the Debtor.
In its schedules of assets and liabilities, the Company disclosed
$79,516,062 in assets and $79,218,681 in liabilities. The
schedules valued its ethanol plant at $72,000,000, securing at
$66,225,571 claim by a lender.
CLEAN BURN: Files Schedules of Assets & Liabilities
---------------------------------------------------
Clean Burn Fuels LLC filed with the U.S. Bankruptcy Court for the
Middle District of North Carolina, its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------- -----------
A. Real Property $72,000,000
B. Personal Property $7,516,062
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $74,487,786
E. Creditors Holding
Unsecured Priority
Claims $30,850
F. Creditors Holding
Unsecured Non-priority
Claims $4,705,895
------------ --------------
TOTAL $79,516,062 $79,224,532
About Clean Burn
Clean Burn Fuels LLC, a North Carolina limited liability company
founded in 2005, is the first company to produce ethanol in North
Carolina. It completed the construction of its ethanol plant in
August of 2010 and started producing and selling ethanol and dried
distillers grains with solubles (DDGS) shortly thereafter.
Clean Burn filed for Chapter 11 bankruptcy protection (Bankr. M.D.
N.C. Case No. 11-80562) on April 3, 2011. John A. Northen, Esq.,
at Northen Blue, L.L.P., represents the Debtor.
In its schedules of assets and liabilities, the Company disclosed
$79,516,062 in assets and $79,218,681 in liabilities. The
schedules valued its ethanol plant at $72,000,000, securing at
$66,225,571 claim by a lender.
CLEAR CHANNEL: Fitch Assigns 'CCC' Rating to Sr. Secured Notes
--------------------------------------------------------------
Fitch Ratings has assigned a 'CCC/RR4' rating to Clear Channel
Communications' $750 million senior secured notes offering, which
is an add-on to the $1 billion 9.0% senior secured notes maturing
March 2021 that were issued in February 2011. Fitch currently has
a 'CCC' Issuer Default Rating on Clear Channel. The Rating Outlook
is Stable.
Fitch expects $250 million of the proceeds will be used to repay
Clear Channel's 5.0% senior unsecured legacy note maturity in
March 2012. The remainder will be used for general corporate
purposes, including replenishing approximately $333 million of
cash on hand that the company deployed to repay senior unsecured
legacy notes in March and May 2011 (combined with $500 million of
the original February issuance), which is allowed under the
recently amended credit agreement (amended February 2011). Clear
Channel also disclosed that it would voluntarily repay the $321
million outstanding under its asset-backed loan (ABL) facility
prior to the completion of the offering.
The notes will be secured by the capital stock of Clear Channel,
Clear Channel's non-broadcasting assets ('non principal
property'), and a second priority lien on the broadcasting
receivables that securitize the ABL facility. The 'principal
property' assets of Clear Channel (domestic radio broadcasting
property, including any proceeds from the sale of FCC licenses),
which constitute the majority of the company's asset base, along
with the company's capital stock in wholly owned domestic
subsidiaries and intercompany loans, are subject to a springing
lien. They cannot be pledged as collateral for the notes until: 1)
less than $500 million of legacy unsecured notes remain
outstanding; 2) the indenture governing the legacy notes is
amended; or 3) the legacy notes or bank debt are secured or become
required to be secured by these assets (excluding the bank debt's
principal property basket). Based on Clear Channel's maturity
schedule, there will be less than $500 million in notes
outstanding in December 2016. Therefore, in Fitch's view the
collateral package is not currently overly valuable. It appears
that, unlike the banks, these notes may not benefit from the grant
of security interest in the principal property up to the value of
15% of consolidated shareholders' equity. Although this equity is
currently negative, it appears that this bank carve-out could
place the banks slightly ahead of these notes in a recovery
situation prior to the point where the springing lien occurs.
Similar to the existing bank debt, the new notes will be
guaranteed on a senior basis by Clear Channel Capital I, Inc.
(holding company of Clear Channel), and by Clear Channel's wholly
owned domestic subsidiaries. Although the notes collateral package
is currently weak, the contractually senior nature of the
guarantee puts them ahead of the existing leveraged buyout (LBO)
notes. The ratings on the notes reflect Fitch's expectations that
the recovery rate on the notes would be slightly less than that of
the banks, but still within the 'RR4' category (see recovery
discussion for details).
Fitch views this transaction as a modest positive for Clear
Channel. Successful issuance would demonstrate further willingness
by lenders to provide capital to Clear Channel post the respective
2014 and 2016 maturities of $3.5 billion and $12.3 billion (most
of it bank debt). Although the issuance is small relative to total
debt outstanding, Fitch views it as incremental evidence that the
company could face a broader range of alternatives when dealing
with these maturity walls. These positives are only slightly
offset by the fact that the transaction will slightly increase the
percentage of secured debt in the capital structure.
This being said, these announcements have no impact on the
company's current ratings, given the small size of the issuance
and repayment relative to the absolute dollar amount of bank debt
coming due over the next five years. In Fitch's view, a materially
larger portion of these maturity walls would need to be addressed
before positive ratings actions are considered. Fitch believes the
key to Clear Channel's success in managing these maturities is the
amount of flexibility provided by the bank lenders. This will
depend on Clear Channel's ability to reduce secured leverage to a
level where the banks would be willing to recommit capital. Fitch
believes that this level is likely below 6 times (x), as this is
where the banks originally lent during the credit boom, as well as
the challenges associated with the final funding/closing of the
deal.
Fitch's rating concerns center on the company's highly leveraged
capital structure, with significant maturities in 2014 and 2016;
the considerable interest burden that pressures free cash flow
generation; technological threats and secular pressures in radio
broadcasting; and the company's exposure to cyclical advertising
revenue. The ratings are supported by the company's leading
position in both the outdoor and radio industries, as well as the
positive fundamentals and digital opportunities in the outdoor
advertising space.
With the repayment of the March 2012 note, the only remaining
maturity before the bank debt is a $312 million legacy note in
January 2013. Fitch believes that Clear Channel's current
liquidity position will enable it to easily repay this note,
through a combination of accessible cash on hand, this issuance,
and dividends from its 89% owned subsidiary, Clear Channel Outdoor
Holdings, Inc. (CCOH). Fitch estimates that pro forma for the $140
million May maturity, this issuance, repayment of the ABL, and the
March 2012 repayment, Clear Channel has approximately $1.1 billion
of cash on hand, excluding $592 million at CCOH, which cannot be
accessed by Clear Channel. Of this $1.1 billion, $409 million is
owed to CCOH under the revolving promissory note governing the
daily cash management that Clear Channel provides to CCOH. These
funds are accessible to Clear Channel but are due on demand to
CCOH. CCOH can currently dividend $500 million of cash to its
shareholders under the Clear Channel Worldwide Holdings, Inc.
indenture. Further, under the provision that CCWW can issue
subordinated debt and dividend the proceeds to CCOH shareholders
if total leverage remains below 6.0x, Fitch estimates that Clear
Channel could currently receive approximately $1.7 billion. The
recent amendment to the credit agreement permits CCOH to make such
debt-funded dividends. Other sources of liquidity are small; most
free cash flow is at CCOH, given Clear Channel's significant
interest burden, the revolving credit facility (RCF) is fully
drawn, and the ABL has recently provided approximately $300
million-$400 million of availability, depending on the company's
borrowing base.
As mentioned, Clear Channel faces significantly larger challenges
in addressing its capital structure beginning in 2014. Given the
absolute dollar amount as well as Clear Channel's weak credit
profile, Fitch believes it could prove difficult for the company
to successfully meet these maturities. The company's options
include: 1) cash repayment, though it will be minimal in light of
Fitch's expectations for cumulative free cash flow of no more than
$500 million through 2013, most of it at the CCOH level; 2)
refinancing in the high yield market; 3) amend and extend the
transaction, although increased interest expense would eat further
into the already limited free cash flow; 4) more debt-funded
dividends from CCOH; or 5) sales of non-core radio stations in
smaller markets.
In Fitch's view, there is a scenario where the company employs
several, if not all, of these alternatives which enables it to
successfully address its 2014 and 2016 maturities. However, this
scenario involves some fairly aggressive assumptions and several
events going in the company's favor, particularly with regard to
the 2016 wall. If the scenario does not play out as such, Fitch
believes a default is a real possibility.
Pro forma for the announcements, consolidated debt is $21.2
billion. Debt held at Clear Channel is $18.6 billion and consists
primarily of:
-- $1.1 billion secured term loan A, maturing July 2014;
-- $8.7 billion secured term loan B, maturing January 2016;
-- $671 million secured term loan C (asset sale facility)
maturing January 2016;
-- $977 million secured delayed draw term loan, maturing
January 2016;
-- $1.8 billion outstanding under the $2 billion secured RCF,
maturing July 2014;
-- $796 million senior unsecured cash pay notes, maturing
August 2016;
-- $830 million senior unsecured PIK toggle notes, maturing
August 2016;
-- $1.75 billion priority guarantee notes, maturing March 2021;
and
-- $1.8 billion senior unsecured legacy notes, with maturities
of 2013-2027.
There was approximately $2.6 billion of debt at CCOH's subsidiary
CCWW at Dec. 31, consisting primarily of:
-- $500 million series A senior unsecured notes, maturing
December 2018;
-- $2 billion series B senior unsecured notes, maturing
December 2018.
The notes are guaranteed by CCOH, Clear Channel Outdoor, Inc., a
wholly owned subsidiary of CCOH, and the majority of the domestic
operating subsidiaries of CCOH.
Clear Channel's Recovery Ratings reflect Fitch's expectation that
the enterprise value of the company, and hence, recovery rates for
its creditors, will be maximized in a restructuring scenario
(going concern), rather than a liquidation. Fitch employs a 6x
distressed enterprise value multiple reflecting the value of the
company's radio broadcasting licenses in top U.S. markets. Fitch
applies a 30% discount (approximately the level at which the
company would breach its consolidated senior leverage covenant) to
Radio EBITDA. Additionally, Fitch assumes that Clear Channel would
receive 89% of the value of a sale of CCOH after the CCOH
creditors had been repaid. Fitch estimates the adjusted distressed
enterprise valuation in restructuring to be approximately $5.8
billion. Fitch also assumes that in a bankruptcy scenario, Clear
Channel has maximized the debt-funded dividends from CCOH and used
the proceeds to repay bank debt. For analytical purposes, Fitch
assumes that that the banks would be first in line for
approximately $1.3 billion of value (15% of shareholders' equity
at Dec. 31, 2007, before the LBO closed), with the remaining value
distributed pro rata between the secured banks and secured
noteholders. The 'CCC' rating for the bank debt reflects Fitch's
expectations for recovery near the higher end of the 31% to 50%
range under a bankruptcy scenario. The secured noteholders receive
a recovery that is lower than the bank lenders, but still within
the 31%-50%, warranting a 'CCC'. The 'C' rating on the senior
unsecured legacy and LBO notes reflects Fitch's expectations for
minimal recovery prospects due to their position below the banks
in the capital structure. The recovery analysis is pro forma for
the issuance of secured debt and repayment of legacy notes as
discussed.
Fitch rates Clear Channel and its subsidiaries:
Clear Channel
-- Long-term Issuer Default Rating (IDR) at 'CCC';
-- Senior secured term loans and senior secured RCF at
'CCC/RR4';
-- Senior unsecured LBO notes at 'C/RR6';
-- Senior unsecured legacy notes at 'C/RR6'.
CCWW
-- Long-Term IDR at 'B';
-- Senior unsecured notes at 'BB-/RR2'.
CLEAR CHANNEL: Bank Debt Trades at 14% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications, Inc., is a borrower traded in the secondary market
at 85.57 cents-on-the-dollar during the week ended Friday, June
10, 2011, a drop of 1.87 percentage points from the previous week
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. The Company pays 365 basis points above
LIBOR to borrow under the facility. The bank loan matures on
January 30, 2016, and carries Moody's Caa1 rating and Standard &
Poor's CCC+ rating. The loan is one of the biggest gainers and
losers among 208 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
About CC Media and Clear Channel
Clear Channel Communications, Inc. -- http://www.clearchannel.com/
-- is a diversified media company with three primary business
segments: radio broadcasting, outdoor advertising and live
entertainment. Clear Channel (OTCBB:CCMO) is the operating
subsidiary of San Antonio, Texas-based CC Media Holdings, Inc.
CC Media's balance sheet at Dec. 31, 2010 showed $17.48 billion in
total assets, $1.25 billion in current liabilities, $20.61 billion
in long-term liabilities and a $7.20 billion shareholders'
deficit.
* * *
CC Media Holdings carries 'CCC+' issuer credit ratings from
Standard & Poor's. Clear Channel Carries a 'Caa2' corporate
family rating from Moody's Investors Service and an issuer default
rating of 'CCC' from Fitch Ratings.
Fitch said in November 2010, that its ratings concerns center on
the company's highly leveraged capital structure, with significant
maturities in 2014 and 2016; the considerable interest burden that
pressures free cash flow generation; technological threats and
secular pressures in radio broadcasting; and the company's
exposure to cyclical advertising revenue. The ratings are
supported by the company's leading position in both the outdoor
and radio industries, as well as the positive fundamentals and
digital opportunities in the outdoor advertising space.
In February 2011, Standard & Poor's affirmed its 'CCC+' corporate
credit rating and positive outlook on CC Media Holdings and
operating subsidiary Clear Channel, which S&P views on a
consolidated basis.
S&P said the 'CCC+' corporate credit rating on CC Media Holdings
Inc. reflects the risks surrounding the longer-term viability of
the company's capital structure--in particular, refinancing risk
relating to sizable secured debt maturities in 2014 ($3.2 billion
pro forma for the transaction) and 2016 ($10.4 billion). In S&P's
view, the company has a satisfactory business risk profile, due to
its position as the largest radio and global outdoor advertising
operator, its good geographic and market diversity, and moderate
long-term growth prospects at the outdoor business. S&P views the
financial risk profile as highly leveraged, given the company's
significant refinancing risk, roughly break-even EBITDA coverage
of interest expense, and slim discretionary cash flow.
COLONY RESORTS: WH/LVH Managers Owns 40% of Class A Units
---------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, WH/LVH Managers Voteco LLC and its affiliates
disclosed that they beneficially own 0.6 Class A Membership Units
of Colony Resorts LVH Acquisitions, LLC, representing 40% of the
outstanding Class A Units. A full-text copy of the filing is
available for free at http://is.gd/C91qNw
About Colony Resorts
Las Vegas, Nev.-based Colony Resorts LVH Acquisitions, LLC, owns
and operates the Las Vegas Hilton, a casino resort located in Las
Vegas, Nevada. The Company licenses from HLT Existing Franchise
Holding LLC the right to use the name "Hilton" and is part of
Hilton's reservation system and Hilton's "HHonors Programs(TM)."
The Company's balance sheet at March 31, 2011, showed
$356.3 million in total assets, $296.1 million in total
liabilities, $61.8 million in redeemable members' equity, and a
members' deficit of $1.6 million.
As reported in the TCR on March 29, 2011, Ernst & Young, in Las
Vegas, Nevada, expressed substantial doubt about Colony Resorts
LVH Acquisition's ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has incurred recurring net losses and has a
working capital deficiency.
COMSTOCK MINING: Common Stock Listed on NYSE Amex Under "LODE"
--------------------------------------------------------------
Comstock Mining Inc. announced that its common stock has been
approved for listing on the NYSE Amex LLC. The Company's common
stock is expected to begin trading on NYSE Amex under the symbol
"LODE" on Friday, June 10, 2011.
"We welcome Comstock Mining, Inc. to the NYSE Euronext family of
listed companies and to NYSE Amex," said Scott Cutler, Executive
Vice President, NYSE Euronext. "Comstock and its shareholders
will benefit from superior market quality and technology, a broad
array of issuer and investor services, and a global brand
association. We look forward to building a strong and lasting
partnership with the Company and its shareholders."
The Company received its initial clearance letter on May 26, 2011,
completed certain administrative tasks, including interviewing and
selecting J. Streicher & Co. LLC as its Designated Market Maker,
and final acceptance for listing on June 8.
"Our clearance and acceptance onto the NYSE Amex marks a key
objective of our corporate strategic plan. We believe this
listing will raise our investment profile among a broader range of
investors, improve our stock liquidity and increase our visibility
with current and potential investors. We are extremely pleased to
be a part of the NYSE Amex and affirm our commitment towards the
highest level of corporate governance for our shareholders," said
Corrado DeGasperis, the Company's President and Chief Executive
Officer.
Meanwhile, Comstock Mining filed with the U.S. Securities and
Exchange Commission a registration statement on Form 8-A in
connection with the registration of the Company's shares of common
stock, $0.000666 par value per share, under Section 12(b) of the
United States Securities Exchange Act of 1934, as amended. The
Company's authorized common stock consists of 3,950,000,000
shares. As of May 15, 2011, there were 23,263,003 shares of
common stock issued and outstanding.
About Comstock Mining
Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based,
gold and silver mining company with extensive, contiguous property
in the historic Comstock district. The Company began acquiring
properties in the Comstock in 2003. Since then, the Company has
consolidated a substantial portion of the Comstock district,
secured permits, built an infrastructure and brought the
exploration project into test mining production. The Company
continues acquiring additional properties in the Comstock
district, expanding its footprint and creating opportunities for
exploration and mining. The goal of the Company's strategic plan
is to deliver stockholder value by validating qualified resources
(measured and indicated) and reserves (probable and proven) of
3,250,000 gold equivalent ounces by 2013, and commencing
commercial mining and processing operations by 2011, with annual
production rates of 20,000 gold equivalent ounces.
The Company reported a net loss of $60.32 million for the year
ended Dec. 31, 2010, compared with a net loss of $6.06 million
during the prior year. The Company had no revenues from
operations for the years ended Dec. 31, 2010 and 2009.
The Company's balance sheet at March 31, 2011, showed
$33.17 million in total assets, $10.89 million in total
liabilities, and $22.28 million in total stockholders' equity.
CORDIA COMMUNICATIONS: To Pay Spandocs Corp.'s Postage Claim
------------------------------------------------------------
The Hon. Karen S. Jennemann of the U.S. Bankruptcy Court for the
Middle District of Florida authorized Cordia Communications Corp.,
et al., to pay the prepetition postage claim of Spandocs Corp.
Prepetition, the CLEC Debtors, engaged the services of Spandocs to
print and mail various customer invoices, collection letters, and
welcome letters, for the CLEC Debtors' customer accounts.
Services provided by Spandocs include electronic receipt of client
data, and printing, folding, inserting, metering, and delivery of
the printed documents (which include all consumer invoices) to the
United States Postal Service for further delivery on a daily
basis. Documents are printed and folded according to the CLEC
Debtors' specific requests, including special preprinting of
envelopes and reply envelopes.
As of the Petition Date, the CLEC Debtors owed approximately
$114,206 to Spandocs for outstanding charges relating to
prepetition mailing and posting of invoices and other documents.
The payment of Spandocs is conditioned upon agreement to provide
reasonable and customary price, service, quality, and payment
terms to the CLEC Debtors on a postpetition basis.
The CLEC Debtors are also authorized to issue postpetition checks
and to make postpetition fund transfer requests.
About Cordia Communications Corp.
Winter Garden, Florida-based Cordia Communications Corp. filed for
Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-
06493) on May 1, 2011. The Debtor estimated its assets and debts
at $10 million to $50 million.
Affiliates Cordia Communications Corp. of Virginia (Bankr. M.D.
Fla. Case No. 11-06494), et al. simultaneously sought Chapter 11
protection.
The cases are jointly administered, with Cordia Communications
Corp. as lead case.
Scott L. Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP,
serves as the Debtors' bankruptcy counsel. The Debtors tapped
Source Capital Group, Inc. as their investment banker,
Trustee Services, Inc., as claims, notice, and balloting agent,
and Development Specialists, Inc., to provide restructuring and
management services, including the appointment of Joseph J.
Luzinski as Chief Restructuring Officer.
COTTAGE GROVE: Case Summary & 8 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Cottage Grove Estate, LLC
2281 East Postal Drive #1
Pahrump, NV 89048
Bankruptcy Case No.: 11-18759
Chapter 11 Petition Date: June 3, 2011
Court: United States Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: Matthew L. Johnson, Esq.
MATTHEW L. JOHNSON & ASSOCIATES, P.C.
8831 W. Sahara Ave.
Las Vegas, NV 89117
Tel: (702) 471-0065
Fax: (702) 471-0075
E-mail: shari@mjohnsonlaw.com
Scheduled Assets: $1,012,116
Scheduled Debts: $6,073,243
A list of the Company's eight largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/nvb11-18759.pdf
The petition was signed by Judith A. Maughan.
CROWN MEDIA: Sees $320 Million to $330 Million Revenue in 2011
--------------------------------------------------------------
Crown Media Holdings, Inc., announced guidance ranges for 2011.
For the year ended Dec. 31, 2011, the Company anticipates revenue
in the range of $320 to $330 million, and for the quarter ended
June 30, 2011, the Company anticipates revenue in the range of $74
to $76 million. The Company anticipates that its adjusted EBITDA
margin for 2011 will be better than its adjusted EBITDA margin of
32% previously disclosed for 2010.
About Crown Media
Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ:
CRWN) -- http://www.hallmarkchannel.com/-- owns and operates
cable television channels dedicated to high quality, broad appeal,
entertainment programming. The Company currently operates and
distributes Hallmark Channel in both high definition (HD) and
standard definition (SD) to 90 million subscribers in the U.S.
Crown Media also operates a second 24-hour linear channel,
Hallmark Movie Channel, available in both HD and SD, which focuses
on family-friendly movies with a mix of classic theatrical films,
presentations from the acclaimed Hallmark Hall of Fame library,
original Hallmark Channel movies and special events.
The Company's balance sheet at March 31, 2011, showed
$736.97 million in total assets, $636.17 million in total
liabilities, $199.73 million in redeemable preferred stock, and a
$98.93 million total stockholders' deficit.
Going Concern
KPMG LLP, in Denver, the Company's independent registered public
accounting firm, rendered a going concern opinion in connection
with the financial statements included in the Company's annual
report on form 10-k for the year ended Dec. 31, 2009. The
independent auditors noted of the Company's significant short-term
debt obligations.
KPMG LLP, however, did not issue a going concern opinion in its
report on the Company's 2010 financial statements.
CULLIGAN INT'L: Centerbridge, Angelo Gordon Said to Seek Control
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that if Culligan International Co. needs a restructuring
in or out of bankruptcy court, Angelo Gordon & Co. and
Centerbridge Capital Partners LLC are likely to be in the driver's
seat. Angelo Gordon has about a third of the first-lien debt,
while Centerbridge holds more than a third of the second-lien debt
and more than half of the second-lien obligations, Bloomberg News
reported, citing four people with knowledge of the situation.
According to Bloomberg News, Culligan, controlled by funds managed
by Clayton, Dubilier & Rice Inc., is facing a revolving credit
that matures in May 2012 and the maturity of a term loan in
November 2012. The $110 million first-lien revolving credit
and the $542 million first-lien term loan were downgraded in
May to Caa2 by Moody's Investors Service. The 175 million-euro
($254 million) second-lien term loan was given a Caa3 grade.
Culligan provides water treatment products and services for
homes and businesses in 70 countries. Revenue in 2010 was about
$640 million, according to Moody's.
The Chicago-based company underwent a $900 million leveraged
recapitalization in May 2007 that included a $375 million dividend
to the parent.
DAGAR ENTERPRISES: Case Summary & Largest Unsecured Creditor
------------------------------------------------------------
Debtor: Dagar Enterprises, Ltd.
fka Dagar Enterprises, Inc.
101 N 10th Street
Edinburg, TX 78539
Bankruptcy Case No.: 11-70351
Chapter 11 Petition Date: June 6, 2011
Court: United States Bankruptcy Court
Southern District of Texas (McAllen)
Judge: Richard S. Schmidt
Debtor's Counsel: Savannah Robinson, Esq.
LAW OFFICE OF S. ROBINSON
1822 Main
Danbury, TX 77534
Tel: (979) 922-8825
E-mail: savannahrobinson@aol.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Compass Bank All Lots 19, 20 $4,500,000
3900 North 10th Street and 21, Bryan
Mcallen, TX 78501 Point Subd. Phase 1
The petition was signed by David Garcia, member of Dagar Property
Management, LLC.
DELPHI CORP: Court Directs Disbandment of Retirees Committee
------------------------------------------------------------
Judge Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York directed the U.S. Trustee for
Region 2 to disband the Official Committee of Eligible Salaried
Retirees effective as of the later date of (i) June 6, 2011, the
date of entry of the Court's order; or (ii) the date the order
designating the DSRA Voluntary Employee Beneficiary Association
as in lieu of COBRA continuation coverage becomes final and non-
appealable.
As of the effective date, the Retirees' Committee will be
relieved of its obligations to undertake or continue any efforts
or perform any activities on behalf of any retirees of any of the
Debtors or the Reorganized Debtors in these Chapter 11 cases and
the Retirees' Committee's role and responsibilities will cease,
Judge Drain ruled.
Judge Drain further ruled that as of the effective date, the
Retirees' Committee's counsel will be relieved of any obligations
to undertake or continue any efforts or perform any activities on
behalf of the Retirees' Committee and the roles and
responsibilities of the counsel will cease.
The Reorganized Debtors and the VEBA Committee will not be
required to provide individualized notice of the Court's decision
to any retirees.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- was a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization
became effective. A Master Disposition Agreement executed among
Delphi Corporation, Motors Liquidation Company, General Motors
Company, GM Components Holdings LLC, and DIP Holdco 3, LLC,
divides Delphi's business among three separate parties -- DPH
Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will
remain responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELPHI CORP: Court Has Ruling on DSRA VEBA Benefits
---------------------------------------------------
Bankruptcy Judge Robert Drain held that the benefits offered by
the Delphi Salaried Retirees Association Voluntary Employment
Beneficiary Association are designated as in lieu of lifetime
continuation coverage benefits under the Consolidated Omnibus
Budget Reconciliation Act for retirees and their dependents who
are represented by the Official Committee of the Eligible Salaried
Retirees and were not offered lifetime COBRA continuation coverage
in connection with the change to their benefits during Delphi's
Chapter 11 cases.
Judge Drain found that the Retirees' Committee entered into a
settlement with the Reorganized Debtors in 2009 rather than,
among other things, seek to litigate over a right to lifetime
COBRA continuation coverage rights for all eligible salaried
retirees it represented who were not offered lifetime COBRA
continuation coverage by the Debtors or Reorganized Debtors.
The Court's order is not and will not be construed as a
determination by the Court or an agreement by the Reorganized
Debtors that the DSRA VEBA beneficiaries represented by the
Retirees' Committee or any other former employees were, are, or
will be eligible for lifetime COBRA continuation coverage, Judge
Drain clarified.
Similarly, the Court order does not affect and will not be
construed as affecting the Court's bench ruling concerning COBRA
continuation coverage on July 30, 2009 or any order implementing
that ruling, Judge Drain said.
Before the entry of the Court's ruling, the Reorganized Debtors
said they support the Retirees' Committee's objective of
maintaining the Health Coverage Tax Credit for the DSRA VEBA
beneficiaries. Counsel to the Reorganized Debtors, John Wm.
Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in Chicago, Illinois, stated that the Reorganized Debtors have
maintained and continue to maintain that their former employees
are not eligible for lifetime COBRA continuation coverage. He
related that the Court considered the issue and ruled in favor of
the Reorganized Debtors' position during the hearing on plan
modifications in July 2009.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- was a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On October 6, 2009, Delphi Corp.'s Chapter 11 plan of
reorganization became effective. A Master Disposition Agreement
executed among Delphi Corporation, Motors Liquidation Company,
General Motors Company, GM Components Holdings LLC, and DIP Holdco
3, LLC, divides Delphi's business among three separate parties --
DPH Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings will
remain responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)
DELTA AIR: Welcomes Approval of Virgin Trans-Pacific Alliance
-------------------------------------------------------------
Delta Air Lines and Virgin Australia Airlines welcomed the U.S.
Department of Transportation's proposed grant of antitrust
immunity to their alliance, which will allow the airlines to
implement their joint venture, expanding their reach between the
U.S., Australia and the South Pacific region, according to an
official statement dated May 10, 2011.
Antitrust immunity will enable Delta and Virgin Australia
Airlines to provide a seamless product to customers and more
options for travel between the U.S. and South Pacific. The
airlines will collaborate through codesharing, coordinating route
and product planning and extending frequent flyer program
benefits and lounge access to customers of both carriers.
"We appreciate the DOT's thorough review of our alliance with
Virgin Australia and recognition of the important customer
benefits," said Glen Hauenstein, Delta's executive vice president
of network, revenue management and marketing. "This alliance
will bring more effective competition to the region and provide
consumers greater choice of destinations, frequencies and
schedules."
The alliance will create a comprehensive, fully integrated
network able to serve thousands of city-pairs in North America
and the South Pacific. Delta alone serves a single point in
Australia, Sydney, and Virgin Australia's international airline,
V Australia, flies only to Los Angeles. The antitrust immunized
alliance will allow the airlines to fully cooperate on network
planning and distribution to deliver a more attractive and
competitive service for customers. A detailed econometric study
conducted by Compass Lexecon estimated annual consumer benefits
of up to $54 million would be produced by the joint venture.
The alliance with Delta is a centerpiece of Virgin Australia
Airlines' product development and international expansion
strategy, led by CEO John Borghetti. Under Borghetti's
leadership, Virgin Australia Airlines has developed a market-
leading international airline, V Australia, which offers direct
flights between Los Angeles and Australia. Virgin Australia also
operates an extensive network throughout Australia and the South
Pacific. Through its alliance with Delta, V Australia has
created a network with the scope and breadth to take on larger
rivals serving the U.S. - South Pacific marketplace.
Virgin Australia Airlines CEO John Borghetti said: "We welcome
the Department of Transportation's proposed approval of our
application for antitrust immunity with Delta, which will enable
our airlines to deliver a more attractive and competitive service
for travelers in Australia and North America."
"The Delta alliance is a key plank in Virgin Australia's strategy
to build an international network of airline partners that offers
global coverage. If approved, Delta customers will be able to
connect seamlessly to Virgin Australia's extensive network of
destinations across Australia, New Zealand and the South Pacific
and earn frequent flyer points in the process," Mr. Borghetti
said.
Antitrust immunity is the latest step in an enhanced alliance
between Delta and Virgin Australia Airlines, which began with
their first codesharing flights in January 2010. On May 21, the
codesharing arrangement will be expanded to add five new
destinations in Australia and New Zealand to Delta's network.
Delta customers will be able to connect in Sydney on Virgin
Australia Airlines flights to Brisbane, Melbourne, Perth,
Adelaide and Canberra in Australia, and on Pacific Blue (Virgin
Australia's Pacific airline) to Auckland and Christchurch, New
Zealand. V Australia customers will be able to connect in Los
Angeles to Delta flights to San Francisco, Las Vegas, Atlanta,
Detroit, New York-JFK and Orlando, Fla.
The DOT's Show Cause Order proposes to grant antitrust immunity
to the alliance and allows for a further period of public
comment, after which the DOT will issue a final determination.
Virgin Australia Airlines (ASX: VBA), formerly the Virgin Blue
group of airlines, was launched in 2000 as the first sustainable
low-fare airline in Australian skies. It has established a
global reputation as an innovator and leader in the aviation
industry; renowned for the warmth of its people and the quality
of the service they provide.
Starting out as a single airline operating a single route with
just 200 team members, today the group employs over 7,000 people
and includes multi-award winning domestic airline Virgin
Australia (formerly Virgin Blue); international long-haul airline
V Australia, international subsidiary airline Pacific Blue; and
Polynesian Blue, a joint venture airline with the Government of
Samoa.
Virgin Australia Airlines is currently in the process of re-
launching its domestic and short-haul international product, and
both V Australia and Pacific Blue airlines will operate as Virgin
Australia by the end of 2011. The group also includes multi-
award winning frequent flyer and loyalty program, Velocity, and
holiday arm, Blue Holidays.
Virgin Australia operates a fleet of 89 modern Boeing 737, 777
and Embraer E-Jet aircraft flying to 32 Australian and 16
international destinations including the USA, Abu Dhabi, New
Zealand, Fiji, Samoa, Tonga, Vanuatu and the Cook Islands.
Virgin Australia has an alliance with the award-winning Etihad
Airways, providing guests a one-stop service to Europe, and has
recently announced partnerships with Air New Zealand and Skywest
Airlines which will see it expand its footprint in the South
Pacific and regional Australia.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- provides scheduled
air transportation for passengers and cargo throughout the United
States, and around the world. The Company's route network is
centered on the hub system it operate at airports in Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK,
Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-
Narita. The hub operations include flights, which gather and
distribute traffic from markets in the geographic region
surrounding the hub to domestic and international cities and to
other hubs. The network is supported by a fleet of aircraft, which
is varied in terms of size and capabilities. On Dec. 31,
2009, the Company's wholly owned subsidiary Northwest Airlines,
Inc., merged with and into Delta. The wholly owned subsidiary of
the Company is Northwest Airlines Corporation.
Northwest and 12 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Stable/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
S&P said at the end of February 2011 that its ratings on Atlanta,
Ga.-based Delta Air Lines Inc. reflect its highly leveraged
financial profile, with significant intermediate-term debt
maturities, and the risks associated with participation in the
price-competitive, cyclical, and capital-intensive airline
industry. The ratings also incorporate the reduced debt load and
operating costs Delta achieved while in Chapter 11 in 2005-2007,
and its enhanced competitive position and synergistic
opportunities associated with its 2008 merger with Northwest
Airlines Corp. (parent of Northwest Airlines Inc.), with the two
airlines fully integrated in December 2009. S&P characterize
Delta's business risk profile as weak and its financial risk
profile as highly leveraged.
DELTA AIR: Expands Codeshare Flights With Virgin Blue
-----------------------------------------------------
Delta Air Lines expanded codesharing with the Virgin Blue
Airlines Group that will add five new destinations in Australia
and New Zealand to Delta's network, according to a May 2, 2011
company statement.
The new service, which was scheduled to begin May 21, will allow
Delta customers to seamlessly connect to Perth, Adelaide and
Canberra in Australia, as well as Auckland and Christchurch, New
Zealand.
Delta customers currently can connect on Virgin Blue flights to
Brisbane and Melbourne, Australia, under previously announced
codesharing flights that began in January 2010. Delta operates
nonstop service between Los Angeles and Sydney, where all
codeshare flights connect.
"This expanded codesharing strengthens our alliance relationship
with Virgin Blue, and broadens our network throughout Australia
and New Zealand to provide a slate of new choices for our
customers," said Charlie Pappas, Delta's vice president -
Alliances. "It underscores the benefits to our customers of sound
alliance relationships with strong airlines like Virgin Blue."
Virgin Blue customers flying the group's long-haul airline - V
Australia - now will be able to connect in Los Angeles to Delta
flights to San Francisco, Las Vegas, Atlanta and Detroit, in
addition to codeshare flights currently available to New York-JFK
and Orlando.
The expanded service is the latest step in a previously announced
marketing alliance between Delta and Virgin Blue to offer
customers access to more destinations across the Pacific as well
as reciprocal airport lounge and frequent flier benefits.
SkyMiles members are eligible to earn SkyMiles on V Australia and
Virgin Blue domestic airline flights operated in conjunction with
the agreement. Delta's BusinessElite customers, Platinum, Gold
and Diamond Medallion members and Sky Club members also have
complimentary access to Virgin Blue lounges at airports
throughout Australia. Virgin Blue's Velocity members are
eligible to earn frequent flier miles for travel on Delta and
enjoy complimentary access to 50 Sky Club locations around the
world.
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- provides scheduled
air transportation for passengers and cargo throughout the United
States, and around the world. The Company's route network is
centered on the hub system it operate at airports in Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK,
Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-
Narita. The hub operations include flights, which gather and
distribute traffic from markets in the geographic region
surrounding the hub to domestic and international cities and to
other hubs. The network is supported by a fleet of aircraft, which
is varied in terms of size and capabilities. On Dec. 31,
2009, the Company's wholly owned subsidiary Northwest Airlines,
Inc., merged with and into Delta. The wholly owned subsidiary of
the Company is Northwest Airlines Corporation.
Northwest and 12 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Stable/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
S&P said at the end of February 2011 that its ratings on Atlanta,
Ga.-based Delta Air Lines Inc. reflect its highly leveraged
financial profile, with significant intermediate-term debt
maturities, and the risks associated with participation in the
price-competitive, cyclical, and capital-intensive airline
industry. The ratings also incorporate the reduced debt load and
operating costs Delta achieved while in Chapter 11 in 2005-2007,
and its enhanced competitive position and synergistic
opportunities associated with its 2008 merger with Northwest
Airlines Corp. (parent of Northwest Airlines Inc.), with the two
airlines fully integrated in December 2009. S&P characterize
Delta's business risk profile as weak and its financial risk
profile as highly leveraged.
DELTA AIR: Applauds Congress Decision to Probe Labor Board
----------------------------------------------------------
Delta Air Lines applauded the decision of the U.S. House of
Representatives Committee on Oversight and Government Reform to
further investigate the National Mediation Board's (NMB)
significant departure from decades of consistent interpretation
of the Railway Labor Act, the company said in a statement dated
May 18, 2011.
In the letter to the Chairman of the NMB, the Committee expressed
its "concern" regarding the NMB's "recent decision to advance a
rule, which allows a minority of employees to determine union
representation." Delta shares the Committee's concern that there
is "evidence tending to show that this change in the rule was the
result of a predetermined effort to advance a partisan policy
agenda."
"This investigation is an important victory for Delta people
because it will finally allow the facts to speak for themselves,"
said Mike Campbell, executive vice president of H.R. and Labor
Relations. "Unfortunately, this is not the only recent occasion
when a federal labor agency has attempted an unprecedented shift
in labor policy at the behest of unions. The Committee's
decision to investigate the questionable circumstances behind the
NMB's voting rule change follows last week's announcement that
they would investigate similar partisan actions involving the
National Labor Relations Board and the Boeing Co."
Delta and Delta people have been targeted by two unions -- the
Association of Flight Attendants (AFA) and the International
Association of Machinists (IAM) -- and two members of the NMB in
a coordinated attempt to influence the outcome of Delta's union
elections by changing to a minority rules voting process. Union
elections for Delta flight attendants and ground employees were
delayed until new voting rules were implemented. Meanwhile, the
NMB conducted elections at other airlines using the traditional
majority voting rules that had been reviewed and maintained by
all administrations during the past 75 years.
Delta employees waited more than two years for the opportunity to
vote in a representation election. In late 2010, they
participated in elections using the new minority voting rules and
turned out at the polls in record numbers - more than 94 percent
of flight attendants and more than 80 percent of ground employees
voted. Across all employee groups, in four elections covering
more than 50,000 employees, the majority of voters said no to
representation by the pre-merger Northwest unions. Today, Delta
people are still waiting for their vote to count.
The Committee's letter requested documents and communication
between the NMB and union officials, and communication related to
the NMB's election proceedings. A copy of the letter is available
at http://oversight.house.gov
About Delta Air Lines
Atlanta, Georgia-based Delta Air Lines (NYSE: DAL) --
http://www.delta.com/or http://www.nwa.com/-- provides scheduled
air transportation for passengers and cargo throughout the United
States, and around the world. The Company's route network is
centered on the hub system it operate at airports in Atlanta,
Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK,
Salt Lake City, Paris-Charles de Gaulle, Amsterdam and Tokyo-
Narita. The hub operations include flights, which gather and
distribute traffic from markets in the geographic region
surrounding the hub to domestic and international cities and to
other hubs. The network is supported by a fleet of aircraft, which
is varied in terms of size and capabilities. On Dec. 31,
2009, the Company's wholly owned subsidiary Northwest Airlines,
Inc., merged with and into Delta. The wholly owned subsidiary of
the Company is Northwest Airlines Corporation.
Northwest and 12 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).
On May 21, 2007, the Court confirmed the Northwest Debtors'
amended plan. That amended plan took effect May 31, 2007.
Delta and 18 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
(Bankruptcy Creditors Service Inc. publishes Delta Air Lines
Bankruptcy News, http://bankrupt.com/newsstand/or 215/945-7000).
* * *
Delta Air Lines and Northwest Airlines carry a 'B/Stable/--'
corporate ratings from Standard & Poor's. They also continue to
carry 'B2' corporate family ratings from Moody's and "B-" LT
Issuer Default rating from Fitch.
S&P said at the end of February 2011 that its ratings on Atlanta,
Ga.-based Delta Air Lines Inc. reflect its highly leveraged
financial profile, with significant intermediate-term debt
maturities, and the risks associated with participation in the
price-competitive, cyclical, and capital-intensive airline
industry. The ratings also incorporate the reduced debt load and
operating costs Delta achieved while in Chapter 11 in 2005-2007,
and its enhanced competitive position and synergistic
opportunities associated with its 2008 merger with Northwest
Airlines Corp. (parent of Northwest Airlines Inc.), with the two
airlines fully integrated in December 2009. S&P characterize
Delta's business risk profile as weak and its financial risk
profile as highly leveraged.
DEX MEDIA EAST: Bank Debt Trades at 24% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media East LLC
is a borrower traded in the secondary market at 76.29 cents-on-
the-dollar during the week ended Friday, June 10, 2011, a drop of
1.83 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 250 basis points above LIBOR to borrow
under the facility. The bank loan matures on October 24, 2014.
The loan is one of the biggest gainers and losers among 208 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Dex Media East
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun &
Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the U.S.
It offers print directory advertising products, such as yellow
pages and white pages directories. R.H. Donnelley Inc., Dex
Media, Inc., and Local Launch, Inc., are the company's only direct
wholly owned subsidiaries.
Dex Media East, LLC, is a publisher of the official yellow pages
and white pages directories for Qwest Communications International
Inc. (Qwest) in the states, where Qwest is the primary incumbent
local exchange carrier, such as Colorado, Iowa, Minnesota,
Nebraska, New Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media
East LLC, Dex Media West LLC and Dex Media, Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represent the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, serve as the Debtors' local counsel. The
Debtors' financial advisor is Deloitte Financial Advisory Services
LLP while its investment banker is Lazard Freres & Co. LLC. The
Garden City Group, Inc., is claims and noticing agent. The
Official Committee of Unsecured Creditors tapped Ropes & Gray LLP
as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel,
J.H. Cohn LLP as its financial advisor and forensic accountant,
and The Blackstone Group, LP, as its financial and restructuring
advisor.
The Debtors emerged from Chapter 11 bankruptcy proceedings at the
end of January 2010.
DEX MEDIA WEST: Bank Debt Trades at 14% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media West LLC
is a borrower traded in the secondary market at 85.96 cents-on-
the-dollar during the week ended Friday, June 10, 2011, a drop of
2.33 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 450 basis points above LIBOR to borrow
under the facility. The bank loan matures on Oct. 24, 2014. The
loan is one of the biggest gainers and losers among 208 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Dex Media West
Dex Media West LLC is a subsidiary of Dex Media West, Inc., and an
indirect wholly owned subsidiary of Dex Media, Inc. Dex Media is
a direct wholly owned subsidiary of R.H. Donnelley Corporation.
Dex Media West is the exclusive publisher of the official yellow
pages and white pages directories for Qwest Corporation, the local
exchange carrier of Qwest Communications International, Inc., in
Arizona, Idaho, Montana, Oregon, Utah, Washington, and Wyoming.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media
East LLC, Dex Media West LLC and Dex Media, Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852), after missing a $55 million interest
payment on its senior unsecured notes due April 15. James F.
Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq.,
Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin
LLP, in Chicago, Illinois represented the Debtors in their
restructuring efforts. Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in
Wilmington, Delaware, served as the Debtors' local counsel. The
Debtors' financial advisor was Deloitte Financial Advisory
Services LLP while its investment banker was Lazard Freres & Co.
LLC. The Garden City Group, Inc., was claims and noticing agent.
The Official Committee of Unsecured Creditors tapped Ropes & Gray
LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-
counsel, J.H. Cohn LLP as its financial advisor and forensic
accountant, and The Blackstone Group, LP, as its financial and
restructuring advisor.
The Debtors emerged from Chapter 11 bankruptcy proceedings at the
end of January 2010.
DIYA AND MANSI: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Diya and Mansi, LLC
dba The Inn at Lampasas
1200 Central Texas Expressway
Lampasas, TX 76550
Bankruptcy Case No.: 11-60626
Chapter 11 Petition Date: June 6, 2011
Court: United States Bankruptcy Court
Western District of Texas (Waco)
Judge: Craig A. Gargotta
Debtor's Counsel: John A. Montez, Esq.
MONTEZ & WILLIAMS, P.C.
3809 W. Waco Dr
Waco, TX 76710
Tel: (254) 759-8600
Fax: (254) 759-8700
E-mail: johna.montez@yahoo.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txwb11-60626.pdf
The petition was signed by Prakash P. Patel, president.
DOWNSTREAM DEVELOPMENT: S&P Places 'B-' Rating on Watch Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' issuer credit
rating on Quapaw, Okla.-based Downstream Development Authority on
CreditWatch with positive implications. "At the same time, we
assigned our preliminary 'B' issue-level rating to the Authority's
proposed $295 million senior secured notes due 2019,." S&P said.
"The CreditWatch listing reflects the fact that the Downstream
Casino Resort has continued to establish a track record of
generating EBITDA sufficient to cover fixed charges, albeit by a
relatively thin margin," said Standard & Poor's credit analyst
Ariel Silverberg. The Authority is seeking to issue $295 million
in senior secured notes due 2019, the proceeds of which, along
with a portion of excess cash on hand, it will use to repay $197
million in senior secured notes due 2015, repay $58 million in
senior subordinated notes due 2016, and pay for redemption
premiums, fees and expenses. "We view the proposed refinancing
transaction as essentially neutral to the credit risk of the
Authority. Notwithstanding the fact that leverage, pro forma for
the financing transaction, will increase by around 0.5x, excess
cash balances will decline, and minimum distributions allowed to
be paid to the Quapaw Tribe of Oklahoma will increase to $10
million from about $6 million currently, fixed charges over the
intermediate term are likely to remain essentially flat (at around
$50 million) given our expectation for lower interest expense
under the new notes. Based on our performance expectations, we
believe the Downstream Casino Resort will continue to generate
sufficient EBITDA to meet these fixed charges," S&P noted.
"The new notes permit the incurrence of an additional $60 million
in secured debt, which the Authority plans to use for a future
expansion at the property (including a hotel, additional meeting
space, and a gas station/rest stop near the property). At this
point, we are somewhat skeptical that an expansion would
contribute meaningfully to EBITDA. While we expect credit
measures, and particularly fixed-charge coverage, would weaken
modestly in the event the Authority pursues the full permitted
level of incremental debt, under our current performance
expectation, we expect the fixed-charge coverage would remain
above 1x, even under a scenario where the expansion drives limited
EBITDA growth," S&P added.
DUKE AND KING: Committee Wants BofA's Liens on Assets Probed
------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Duke and King Acquisition Corp., et al., asks the U.S.
Bankruptcy Court for the District of Minnesota to:
-- determine the validity, priority and extent of Bank of
America, N.A.'s alleged security interests in the Debtors'
collateral, and have any improperly perfected liens avoided
by the Court;
-- enjoin the Debtors from tendering any proceeds of BofA's
asserted collateral to BofA pending a determination of its
liens thereon, and an accounting and valuation of the
collateral securing its liens; and
-- authorize the accounting and attribution of the proceeds of
any transactions to sell the Debtors' assets, well as a
valuation of any collateral that is found to be free of
BofA's alleged liens.
The Committee relates that it has conducted a thorough
investigation of the collateral purportedly securing the
obligations of the Debtors to BofA, well as the transfers and
assignments of assets from the Nath Companies to the Debtors. The
investigation has revealed a number of deficiencies and oversights
that call into question the validity and enforceability of BofA's
liens on a significant percentage of the Debtors' assets,
including all cash and deposit accounts of the Debtors, the
proceeds of the Debtors' food and beverage inventory and
approximately two dozen leaseholds on which the Debtors' Burger
King restaurants are situated.
About Duke and King Acquisition Corp.
Burnsville, Minnesota-based Duke and King Acquisition Corp., dba
Burger King, was formed in November 2006, to acquire 88 Burger
King franchise restaurants from the Nath Companies. Duke and
King, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Lead Case No. 10-38652) on Dec. 4,
2010. Duke and King estimated its assets and debts at $10 million
to $50 million.
Clinton E. Cutler, Esq., and Douglas W. Kassebaum, Esq., at
Fredrikson & Byron, P.A., serve as the Debtors' bankruptcy
counsel. Mastodon Ventures, Inc., acts as the Debtors' investment
banker. Maslon Edelman Borman & Brand, LLP serves as local
counsel and Aaron L. Hammer, Esq., and Richard S. Lauter, Esq., at
Freeborn & Peters LLP, in Chicago, is the bankruptcy counsel to
the Official Committee Of Unsecured Creditors. Mesirow Financial
Consulting, LLC, serves as financial advisors of the Committee.
EL POLLO: Improved Liquidity Prompts S&P to Raise CCR to 'B-'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Costa Mesa, Calif.-based El Pollo Loco Inc. to 'B-' from
'CCC'. The rating outlook is stable. The ratings on the company
are unsolicited.
"At the same time, we assigned a preliminary 'B+' issue-level
rating to the company's proposed $12.5 million first-lien, first-
out revolving credit facility with a preliminary '1' recovery
rating, indicating that investors could expect very high (90% to
100%) recovery in the event of a payment default. We assigned a
preliminary 'B' issue-level rating to the company's $160 million
first-lien term loan, with a preliminary '2' recovery rating that
indicates substantial (70% to 90%) recovery. We also rate the $110
million second-lien notes a preliminary 'CCC' issue-level rating
with a preliminary '6' recovery rating, which indicates negligible
(0 to 10%) recovery," S&P related.
According to the company, it will use the proceeds from the first-
lien term loan and the second-lien notes, along with the capital
contribution from its sponsors, to refinance its existing debt and
make certain mandatory payments. "We expect the revolver to be
undrawn at closing of the proposed transaction," S&P said.
"The rating actions reflect our expectation that the refinancing
will lead to better financial flexibility and enhanced liquidity,"
said Standard & Poor's credit analyst Andy Sookram, "by extending
El Pollo Loco's debt maturities and lowering its interest expense
burden." "The ratings also incorporate our belief that operating
performance will improve as the company benefits from its menu
and cost-reduction initiatives, and a gradually improving
economy."
EMAK WORLDWIDE: Court Confirms Reorganization Plans
---------------------------------------------------
EMAK Worldwide Inc. disclosed that the U.S. Bankruptcy Court for
the Central District of California confirmed its Plan of
Reorganization. The Plan was supported by the committee of
creditors appointed in the case.
The Plan will become effective approximately 14 days after the
Court enters a written order reflecting this ruling, so EMAK
expects to emerge from Chapter 11 before the end of June. EMAK
commenced its Chapter 11 case on Aug. 6, 2010.
"The Court's confirmation of our restructuring plan is a major
milestone for our company and represents the culmination of our
restructuring efforts," said EMAK CEO Jim Holbrook.
The Plan provides for the reorganization points:
-- EMAK will reorganize around its existing operating businesses,
which continue to show positive performance
-- EMAK will pay creditors in full with interest
-- EMAK has secured a line of credit through Crown EMAK Partners
-- EMAK's common shareholders holding less than 150,000 shares
that agreed to provide a release will receive $.10 per share.
Holders of over 150,000 shares had the opportunity to roll
into a new ownership arrangement in exchange for providing a
release
-- Pursuant to the Plan, Crown EMAK Partners will hold a majority
of the stock in the reorganized Company
Mr. Holbrook continued, "I would like to thank our employees,
clients and suppliers for their support throughout this process."
About Emak Worldwide
Los Angeles, California-based EMAK Worldwide, Inc., a Delaware
corporation, fka Equity Marketing, Inc., filed for Chapter 11
bankruptcy protection (Bankr. C.D. Calif. Case No. 10-42779) on
Aug. 5, 2010. Jeffrey M. Reisner, Esq., at Irell & Manella LLP,
assists the Debtor in its restructuring effort. The Debtor
disclosed $4,392,115 in assets and $7,485,567 in liabilities as of
the Petition Date.
Affiliate EMAK Worldwide Service Corp., filed a separate Chapter
11 petition (Bank. C.D. Calif. Case No. 10-42784) on Aug. 5, 2010.
EMAK Worldwide Service disclosed $4,423,652 in assets and
$3,123,135 in liabilities as of the Petition Date.
EMAK's other operating subsidiaries are excluded from these
voluntary petitions, including its Equity Marketing, Logistix,
Neighbor and Upshot agencies and operations in Asia.
EVERGREEN ENERGY: Joins with WPG to Produce K-Fuel in Australia
---------------------------------------------------------------
Evergreen Energy Inc. has completed the formation of its venture
with WPG Resources, an Australian listed mineral resources
company, to jointly develop and produce K-Fuel(R), Evergreen's
coal upgrading technology, throughout Australia. This agreement
was foreshadowed in the memorandum of understanding announced by
Evergreen on Feb. 2, 2011.
The venture, Southern Coal Holdings will be 50% owned by WPG
Resources and 50% by Evergreen Energy, and was incorporated in
Australia in 2010 as a private limited liability company. SCH was
a wholly owned subsidiary of WPG prior to the closing of this
transaction.
Bob Duffin, Chairman of WPG Resources, stated: "WPG Resources and
Evergreen Energy share a common goal of tapping into the rich and
valuable market for coal as a source of energy from the Asian
market. I have just returned from a visit to Evergreen's K-Fuel
facility in Wyoming where coal testing of our Penrhyn samples will
continue over the summer. I am very excited about the future of
SCH and the plans to build our first K-Fuel plant in Australia."
Ilyas Khan, Executive Chairman of Evergreen, stated: "The
formation of our joint venture with WPG establishes Evergreen in
the attractive and growing markets in Asia, where demand for coal
from regions such as India, China, Japan and Korea highlight the
need for coal upgrading technologies. SCH already has
considerable coal resources on its property that offer tremendous
potential in terms of the value we can accrue from their being
upgraded. The price of thermal coal continues to be not only
buoyant in the Asia Pacific area, but also represents a
significant premium to prices in North America.
"We expect to provide further updates on SCH market in the short
term, including the impending hire of a CEO for SCH and the
announcement of further details about the underlying size and
scope of the coal resources."
"I also wish to take this opportunity of recognizing the amazing
work that is being done by the Evergreen team and in particular
the K-Fuel team headed up by Kevin Milliman. When we completed
our re-financing in February this year we gave ourselves a number
of ambitious targets.
The most significant of those milestones in our business plan was
the completion of our joint venture with WPG where, through SCH,
we now have a 50% share of valuable coal resources that are
ideally placed to benefit from being upgraded by, and blended with
K-Fuel."
"Over summer we remain on track to increase very significantly our
testing capacity, which will enable us to concentrate on
responding to other interested customers and partners. For now we
are 100% taken up with testing coal from WPG, but this will ease
by the time we get around to the end of the third quarter of
2011," concluded Khan.
About Evergreen Energy
Evergreen Energy Inc. has developed two, proprietary, patented,
and 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 reported a net loss of $21.02 million on $403,000 of
total operating revenue for the year ended Dec. 31, 2010, compared
with a net loss of $58.53 million on $423,000 of total operating
revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed
$33.50 million in total assets, $37.62 million in total
liabilities, and a $4.12 million total stockholders' deficit.
Hein & Associates LLP, in Denver, Colo., expressed substantial
doubt about Evergreen Energy's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses from operations and has had recurring
cash used in operations.
FORESTAR GROUP: S&P Withdraws 'B' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B' corporate
credit rating on Forestar Group Inc. at the issuer's request. "We
also withdrew our 'B' rating (which had a '4' recovery rating) on
Forestar's proposed $100 million senior unsecured convertible
notes due 2018 and our 'B+' rating on Forestar's proposed $150
million senior secured convertible notes due 2019 (which had a '2'
recovery rating). These notes would have been issued by Forestar
(USA) Real Estate Group Inc. and guaranteed by Forestar," S&P
related.
The rating withdrawals follow Forestar's announcement that it had
decided not to proceed with its previously proposed financings.
Ratings Withdrawn
Rating
To From
Forestar Group Inc.
Corporate credit rating NR B/Stable
$100 million senior unsecured NR B
convertible notes due 2018
Recovery rating NR 4
Forestar (USA) Real Estate Group Inc.
$150 million senior secured notes NR B+
due 2019
Recovery rating NR 2
NR-Not rated.
FRAZER/EXTON: Sec. 341 Creditors' Meeting on June 21
----------------------------------------------------
The United States Trustee for Region 3 will convene a meeting of
creditors in the bankruptcy cases of Frazer/Exton Development,
L.P., pursuant to 11 U.S.C. Sec. 341(a) on June 21, 2011, at 3:00
p.m. at 833 Chestnut Street, Suite 501, in Philadelphia,
Pennsylvania.
About Frazer/Exton Development
Based in Malvern, Pennsylvania, Frazer/Exton Development, L.P.,
owns real property in Chester County. Whiteland Village Ltd.
obtained various approvals and permits for the development of the
real property as a continued care retirement community. Whiteland
Village Ltd. and Frazer/Exton Development, L.P., filed for Chapter
11 bankruptcy (Bankr. E.D. Pa. Case Nos. 11-14036 and 11-14041) on
May 19, 2011. The case was initially assigned to Judge Stephen
Raslavich but was transferred to Judge Jean K. FitzSimon. Lawyers
at Ciardi Ciardi & Astin, P.C. serve as bankruptcy counsel.
Frazer/Exton Development L.P. filed with the Bankruptcy Court its
schedules of assets and liabilities disclosing $0 in total assets
and $46,953,617 in total liabilities.
The Debtors are selling a portion of the Property to Makemie at
Whiteland -- a Pennsylvania non-profit corporation and affiliate
of Philadelphia Presbytery Homes Inc. -- for $7,300,000 in cash
and assumption of up to $5,000,000 of debt. The deal is subject
to higher and better offers.
FRAZER/EXTON: Hires Ciardi Law Firm as Bankruptcy Counsel
---------------------------------------------------------
Frazer/Exton Development L.P. and Whiteland Village Ltd. seek
bankruptcy court permission to employ the law firm of Ciardi
Ciardi & Astin as legal counsel. Albert A. Ciardi, III, Esq., and
Jennifer C. McEntee, Esq., will lead the engagement.
The law firm provided services to the Debtor prior to the petition
date. According to the statement of financial affairs filed by
Frazer/Exton Development L.P., Roskamp Management Company LLC paid
for Ciardi's prepetition services provided to the Debtor. Those
payments totaled roughly $136,000. According to the Statement,
Roskamp's earliest payments were on Dec. 3, 2010.
About Frazer/Exton Development
Based in Malvern, Pennsylvania, Frazer/Exton Development, L.P.,
owns real property in Chester County. Whiteland Village Ltd.
obtained various approvals and permits for the development of the
real property as a continued care retirement community. Whiteland
Village Ltd. and Frazer/Exton Development, L.P., filed for Chapter
11 bankruptcy (Bankr. E.D. Pa. Case Nos. 11-14036 and 11-14041) on
May 19, 2011. The case was initially assigned to Judge Stephen
Raslavich but was transferred to Judge Jean K. FitzSimon.
Frazer/Exton Development L.P. filed with the Bankruptcy Court its
schedules of assets and liabilities disclosing $0 in total assets
and $46,953,617 in total liabilities.
The Debtors are selling a portion of the Property to Makemie at
Whiteland -- a Pennsylvania non-profit corporation and affiliate
of Philadelphia Presbytery Homes Inc. -- for $7,300,000 in cash
and assumption of up to $5,000,000 of debt. The deal is subject
to higher and better offers.
FRAZER/EXTON: Has Deal to Sell Portion of Property
--------------------------------------------------
Frazer/Exton Development L.P. and Whiteland Village Ltd. are
seeking to sell a portion of their real estate property, a 100-
acre site located at 15 South Bacton Hill Road, Malvern, East and
West Whiteland Townships, in Chester County, Pennsylvania.
The Debtors plan to develop the property as a continued care
retirement community. Before the petition date, the Debtor
commenced marketing efforts for the pre-sale of units.
The Debtors secured an agreement of sale with Makemie at Whiteland
-- a Pennsylvania non-profit corporation and affiliate of
Philadelphia Presbytery Homes Inc. -- for the sale of a portion of
the Property for $7,300,000 in cash and assumption of up to
$5,000,000 of debt.
The deal with Makemie is subject to higher and better offers. The
minimum bid will be $12,800,000.
The Property was designated as a superfund site by the
Environmental Protection Agency as a result of activities
occurring on the Property prior to the Debtors' ownership.
Frazer/Exton Development L.P., with the supervision of the EPA,
undertook and completed the remediation of the site.
The Debtors currently owe these creditors which have liens on the
Property:
Bank Amount Nature of Debt
---- ------ --------------
Sovereign Bank $32,244,671 mortgage
Paul Risk Associates $1,992,627 mechanics lien
Andrews Excavation $951,971 mechanics lien
EPA $1,164,815 lien
ECOR Solutions Inc. $1,703,355 mechanics lien
According to papers filed the Debtors in court, Roskamp Management
Company LLC, an affiliate of the Debtors, entered into a Developer
Agreement with the Buyer to provide construction services for the
Project. Roskamp guaranteed to Makemie that the construction cost
will not exceed $82,830,510. Roskamp may receive a potential
$2,000,000 fee for its services.
The Debtors intend to file a plan of reorganization which
incorporates the sale, the development of the remaining premises,
and ultimate payment to creditors.
The Debtors' Sale motion does not set the bidding deadline,
auction date and other pertinent schedules relevant to the sale
process. The Debtors propose to pay Makemie $500,000 as breakup
fee in the event they close a deal with a competing buyer.
FREESCALE SEMICONDUCTOR: Fitch Rates Sr. Unsec. Notes at 'CCC'
--------------------------------------------------------------
Fitch Ratings rates Freescale Semiconductor Holdings I, Ltd.'s
$750 million senior unsecured notes offering 'C/RR6'.
Fitch currently rates Freescale:
-- Issuer Default Rating (IDR) 'CCC';
-- Senior secured bank revolving credit facility (RCF) 'B-
/RR3';
-- Senior secured term loans 'B-/RR3';
-- Senior secured notes 'B-/RR3';
-- Senior unsecured notes 'C/RR6';
-- Senior subordinated notes 'C/RR6'.
The Rating Outlook remains Positive. Fitch's actions affect
approximately $6.7 billion of total debt, pro forma for
Freescale's announced debt reduction from net initial public
offering (IPO) proceeds.
Freescale will issue $750 million of senior unsecured notes via
private placement. The company plans to use net proceeds to repay
senior unsecured debt due in 2014. In conjunction with the use of
approximately $93 million of net proceeds from the IPO to redeem a
portion of the company's approximately $255 million of outstanding
9.125% senior unsecured toggle notes due 2014, Fitch estimates
Freescale will avoid the potential acceleration of the extended
term loans in September 2014. The notes will be pari passu with
Freescale's outstanding senior unsecured debt.
Freescale's recent IPO provided approximately $783 million of
gross proceeds and will enable the company to further reduce debt.
However, the IPO was consummated within the context of a robust
upturn in the semiconductor market, and Fitch estimates
Freescale's total leverage (total debt to operating EBITDA) was
approximately 6.6 times(x) for the latest 12 months (LTM) ended
April 1, 2011, pro forma for the proposed debt reduction, versus
more than 30x at the trough of the most recent recession. Given
Fitch's expectations for moderating end-market demand beyond the
near term, Fitch believes Freescale's IPO was consummated at the
cyclical peak. As a result, Fitch believes incremental access to
capital markets could be under less favorable terms.
Fitch continues to believe Freescale will be challenged to
generate free cash flow sufficient to meet significant debt
maturities. Nonetheless, the Positive Outlook recognizes
Freescale's lower fixed costs from restructuring and solid design
wins in automotive and across a number of embedded markets, which
have positioned the company to potentially outperform the broader
semiconductor market and achieve meaningful revenue growth and
free cash flow.
The ratings continue to reflect Freescale's:
-- Leading share positions and in microcontrollers (MCU) and
embedded processing markets, particularly automotive. These
markets are characterized by longer product lifecycles;
-- Substantial and increasing customer and end-market
diversification, driven by solid design wins in
microcontrollers and embedded processing and increased
attach rates within the company's Analog and Sensors
segment;
-- Low capital intensity from the company's 'asset-light'
manufacturing strategy.
Ratings concerns center on Freescale's:
-- Onerous capital structure with significant interest expense
and debt maturities;
-- Challenges to achieving the revenue and operating EBITDA
growth rates necessary to organically meet debt service
requirements, which are exacerbated by the company's
increased focus on end-markets with meaningful incumbent
supplier advantages;
-- Structurally lower absolute operating EBITDA levels,
following significant market share losses by the domestic
tier 1 automotive suppliers and loss of Motorola as a
wireless handset customer, as well as Motorola's loss of
global handset market share.
Positive rating action could result from meaningful debt reduction
from consistently solid revenue and operating profitability growth
over the medium-term or further equity issuances.
Negative rating action could result from the company's inability
to grow revenues and benefit from meaningful operating leverage,
most likely from diminished competitiveness, a downturn in the
semiconductor market, or a double-dip recession. Fitch believes
any of these scenarios would meaningfully reduce the potential for
debt reduction.
Fitch believes Freescale's liquidity, pro forma for the IPO and
debt redemption, was sufficient as of April 1, 2011 and consisted
of:
-- Approximately $1.2 billion of cash and equivalents and
-- An undrawn $425 million of senior secured RCF due July 1,
2016.
Fitch's anticipation for more than $250 million of annual free
cash flow over the next couple of years, driven by solid revenue
growth and higher profitability also supports liquidity.
Total debt, pro forma for the anticipated debt reduction, was
approximately $6.7 billion as of April 1, 2011 and consisted of:
-- Approximately $2.2 billion of senior secured term loans due
Dec. 1, 2016;
-- Approximately $2.1 billion of senior secured notes due 2018;
-- Approximately $355 million of senior unsecured notes due
2014;
-- Approximately $488 million of senior unsecured notes due
2020;
-- $750 million of the proposed senior unsecured notes;
-- $764 million of senior subordinated notes due 2016.
The Recovery Ratings (RR) for Freescale reflect Fitch's recovery
expectations under a distressed scenario, as well as Fitch's
belief that Freescale's enterprise value, and hence recovery rates
for its creditors, will be maximized as a going concern rather
than liquidation scenario.
In deriving a distressed enterprise value, Fitch applies a 35%
discount to its estimate of Freescale's operating EBITDA for the
latest 12 month (LTM) period ended April 1, 2011 of approximately
$1.1 billion. Fitch applies a 5x distressed EBITDA multiple to
reach a reorganization enterprise value of approximately $3.6
billion.
As is standard with Fitch's recovery analysis, the revolver is
assumed to be fully drawn and cash balances fully depleted to
reflect a stress event. After reducing the amount available in
reorganization for administrative claims by 10%, Fitch estimates
the senior secured debt would recover 51%-70%, equating to 'RR3'
Recovery Ratings. The senior unsecured and senior subordinated
debt tranches would recover 0%-10%, equating to 'RR6' Recovery
Ratings and reflecting Fitch's belief that minimal if any value
would be available for unsecured noteholders.
GALLANT PRPERTY: Case Summary & Largest Unsecured Creditor
----------------------------------------------------------
Debtor: Gallant Property Management, LLC
13876 Longwood Drive
Willis, TX 77318
Bankruptcy Case No.: 11-34725
Chapter 11 Petition Date: June 4, 2011
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Letitia Z. Paul
Debtor's Counsel: Barbara Mincey Rogers, Esq.
ROGERS & ANDERSON, PLLC
1415 North Loop West, Ste. 1020
Houston, TX 77008
Tel: (713) 868-4411
Fax: (713) 868-4413
E-mail: brogers@ralaw.net
Scheduled Assets: $2,600,000
Scheduled Debts: $2,751,058
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Warren Gallant Money Loaned $375,000
13876 Longwood Drive
Willis, TX 77318
The petition was signed by Warren Gallant, president.
GAS CITY: Puts Five Properties on Auction Block
-----------------------------------------------
CSP Daily News reports that Gas City Ltd. is selling five
properties ranging in size from three acres to more than 46 acres
in Will County, Illinois, and Montgomery County, Indiana. Bids
for the properties are due Wednesday, June 22, and an auction is
scheduled for 10:00 a.m. on June 24, 2011.
According to the report, the auction continues the breakup of
Gas City, which cited more than 1,000 creditors and estimated
liabilities of more than $100 million in its bankruptcy filing, as
previously reported by CSP Daily News. Published reports say that
debt totaled $365 million.
In April, the Frankfort, Ill.-based company's 50 retail sites were
auctioned to the highest qualified bidders for a total of about
$135 million. According to court records, those stores were
divvied up as follows:
* Speedway LLC (23 sites).
* TravelCenters of America LLC (six sites).
* Alimentation Couche-Tard Inc. (five sites).
* MKM Oil (three sites).
* Love's Travel Stops & Country Stores Inc. (two sites).
* National Oil & Gas Inc. (two sites).
* Western Refining Southwest Inc. (two sites).
* One site each for 7-Eleven Inc., American Petro Inc., Angel
Associates LP, First Coast Energy LLP, HomeStar Bank & Trust,
Riteline Development LLC and Valero Retail Holdings Inc.
The report says alternate bidders included Thorntons Inc., Pilot
Travel Centers LLC, Family Express Corp., Road Ranger LLC and
Atlas Oil Co.
About Gas City
Gas City Ltd. -- http://www.gascity.net/-- based in Frankfort,
Illinois, is an independent petroleum marketer with locations in
Northeast Illinois, Northwest Indiana, Florida and Arizona.
Gas City sought Chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 10-47879) on Oct. 26, 2010, estimating assets
at $50 million to $100 million and debts at $100 million to
$500 million. Gas City's parent, the William J. McEnery
Revocable Trust dated Apr. 22, 1993, filed a separate
Chapter 11 petition (Bankr. N.D. Ill. Case No. 10-47895).
Paul V. Possinger, Esq., Mark K. Thomas, Esq., Grayson T. Walter,
Esq., at Proskauer Rose LLP, in Chicago; and Daniel A. Zazove,
Esq., and Kathleen A. Stetsko, Esq., at Perkins Coie LLP, in
Chicago, represent the Debtors. A. Jeffrey Zappone at Conway
Mackenzie is the Debtors' chief restructuring officer. Kurtzman
Carson Consultants is the Debtors' claims agent. The Official
Committee of Unsecured Creditors has tapped Pachulski Stang Ziehl
& Jones LLP and Levenfeld Pearlstein, LLC, as co-counsel and
Mesirow Financial Consulting, LLC, as financial advisors.
* * *
The Hon. Eugene R. Wedoff of the U.S. Bankruptcy Court for the
Northern District of Illinois extended the exclusive periods of
Gas City, Ltd., and its debtor-affiliates to file a Chapter 11
plan until June 30, 2011, and solicit acceptances of that plan
until July 30, 2011.
GAS CITY: Files Schedules of Assets & Liabilities
-------------------------------------------------
Gas City Ltd. filed with the U.S. Bankruptcy Court for the
Northern District of Illinois, its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------- -----------
A. Real Property $0
B. Personal Property $66,307,812
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $85,331,182
E. Creditors Holding
Unsecured Priority
Claims $6,093,872
F. Creditors Holding
Unsecured Non-priority
Claims $118,152,635
------------ --------------
TOTAL $66,307,812 $209,577,690
About Gas City
Gas City Ltd. -- http://www.gascity.net/-- based in Frankfort,
Illinois, is an independent petroleum marketer with locations in
Northeast Illinois, Northwest Indiana, Florida and Arizona.
Gas City sought Chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 10-47879) on Oct. 26, 2010, estimating assets
at $50 million to $100 million and debts at $100 million to
$500 million. Gas City's parent, the William J. McEnery
Revocable Trust dated Apr. 22, 1993, filed a separate
Chapter 11 petition (Bankr. N.D. Ill. Case No. 10-47895).
Paul V. Possinger, Esq., Mark K. Thomas, Esq., Grayson T. Walter,
Esq., at Proskauer Rose LLP, in Chicago; and Daniel A. Zazove,
Esq., and Kathleen A. Stetsko, Esq., at Perkins Coie LLP, in
Chicago, represent the Debtors. A. Jeffrey Zappone at Conway
Mackenzie is the Debtors' chief restructuring officer. Kurtzman
Carson Consultants is the Debtors' claims agent. The Official
Committee of Unsecured Creditors has tapped Pachulski Stang Ziehl
& Jones LLP and Levenfeld Pearlstein, LLC, as co-counsel and
Mesirow Financial Consulting, LLC, as financial advisors.
* * *
The Hon. Eugene R. Wedoff of the U.S. Bankruptcy Court for the
Northern District of Illinois extended the exclusive periods of
Gas City, Ltd., and its debtor-affiliates to file a Chapter 11
plan until June 30, 2011, and solicit acceptances of that plan
until July 30, 2011.
GELTECH SOLUTIONS: Board OKs Compensation Arrangement for CFO
-------------------------------------------------------------
The board of directors of GelTech Solutions, Inc., approved a
compensation arrangement for Michael Hull, the Company's chief
financial officer. Mr. Hull has been acting as the Company's
Chief Financial Officer since March 17, 2008, on behalf of WSR
Consulting, Inc., on a part-time basis. Provided that Mr. Hull
becomes a full-time employee by Sept. 1, 2011, Mr. Hull will
receive an initial base salary of $146,000 per year over a three-
year term and a discretionary annual bonus as determined by the
Company's Compensation Committee based upon Mr. Hull's job
performance and performance of the Company. Additionally, the
Company granted Mr. Hull 150,000 10-year stock options exercisable
at $1.95 per share of which (i) 50,000 options vest on the date
Mr. Hull becomes a full-time employee and (ii) assuming the
initial vesting, the balance will vest in six equal increments
each June 30th and Dec. 31st, with the first vesting date being
Dec. 31, 2011, subject to continued employment on each applicable
vesting date.
About GelTech Solutions
Jupiter, Fla.-based GelTech Solutions. Inc. (OTC Bulletin Board:
GLTC) -- http://www.GelTechsolutions.com/-- is a Delaware
corporation organized in 2006. The Company creates innovative,
Earth-friendly, cost-effective products that help industry,
agriculture, and the general public accomplish environmental and
safety goals, such as water conservation and the protection of
lives, homes, and property from fires. The Company's current
business model is focused on the following products: 1)
FireIce(R), a fire suppression product, 2) SkinArmor(TM), an
ointment used for protecting skin from direct flame and high
temperatures, and 3) Soil2O(TM), a line of agricultural moisture
retention products.
The Company's balance sheet at March 31, 2011, showed $933,598 in
total assets, $1.44 million in total liabilities and a $508,047
total stockholders' deficit.
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 4, 2010,
Salberg & Company, P.A., in Boca Raton, Fla., 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.
In the Form 10-Q, the Company noted that as of Dec. 31, 2010, it
had a working capital deficit of $1,949,478, had an accumulated
deficit and stockholders' deficit of $12,412,626 and $1,787,641,
respectively, and incurred losses from operations of $2,568,513
for the six months ended Dec. 31, 2010 and used cash from
operations of $1,632,695 during the six months ended Dec. 31,
2010. In addition, the Company has not yet generated revenue
sufficient to support ongoing operations.
"The continuation of the Company as a going concern is dependent
upon the continued financial support from its stockholders, the
ability of the Company to obtain necessary debt or equity
financing to continue operations, and the attainment of profitable
operations," GalTech said.
GENERAL MARITIME: Inks $50MM Sale Pacts with Jefferies & Dahlman
----------------------------------------------------------------
General Maritime Corporation entered into separate Open Market
Sale Agreements with each of Jefferies & Company, Inc., and
Dahlman Rose & Company, LLC, pursuant to which the Company may
sell shares of its common stock, par value $0.01 per share, for
aggregate sales proceeds of up to $50.0 million.
The sales, if any, of the Securities under the Sale Agreements
will be made in "at-the-market" offerings as defined in Rule 415
of the Securities Act of 1933, as amended, including sales made by
means of ordinary brokers' transactions on the New York Stock
Exchange at market prices prevailing at the time of sale, at
prices related to the prevailing market prices, or at negotiated
prices. The Company may also sell shares of its common stock to
either Sales Agent, in each case as principal for its own account,
at a price agreed upon at such time. The Sale Agreements provide
that each Sales Agent will be entitled to compensation equal to
2.5% of the gross sales price of the Securities sold pursuant to
the Sale Agreement to which such Sales Agent is a party, provided
that the compensation will equal 2.0% of the gross sales price of
the Securities sold to certain purchasers specified in the
applicable Sale Agreement. Each Sales Agent will use its
commercially reasonable efforts consistent with normal sales and
trading practices to place all of the Securities requested to be
sold by the Company. The Company has no obligation to sell any of
the Securities under the Sale Agreements and either the Company or
either Sales Agent may at any time suspend or terminate
solicitation and offers under the applicable Sale Agreement to
which such Sales Agent is a party.
The Securities will be issued pursuant to the Company's shelf
registration statement on Form S-3, which was declared effective
by the Securities and Exchange Commission on April 9, 2009, as
supplemented by the Company's prospectus supplement, dated June 9,
2011, filed in connection with the offer and sale of the
Securities.
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.
The Company's balance sheet at March 31, 2011, showed
$1.72 billion in total assets, $1.42 billion in total liabilities,
and $304.25 million in total shareholders' equity.
The Company reported a net loss of $216.66 million on $387.16
million of voyage revenue for the year ended Dec. 31, 2010,
compared with a net loss of $11.99 million on $350.52 million of
voyage revenue during the prior year.
Deloitte & Touche LLP, in New York, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditor noted that the Company requires additional
financing in order to meet its debt obligations that will come due
over the next year. In addition, the Company has current losses
from operations, a working capital deficit and the expectation
that certain of its loan covenants will not be achieved during
2011 without additional capital being raised, debt being
refinanced or covenants waived or amended.
* * *
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."
In the Dec. 22, 2010 edition of the TCR, Moody's Investors Service
lowered its ratings of General Maritime Corporation: Corporate
Family to B3 from B1, Probability of Default to Caa1 from B2 and
senior unsecured to Caa2 from Caa1. Moody's also downgraded the
Speculative Grade Liquidity rating to SGL-4 from SGL-3. The
outlook is negative. The downgrade of the ratings reflects
GenMar's tightening liquidity position as a result of ongoing weak
tanker freight rates and upcoming debt maturities. These
maturities include the recently arranged $22.8 million bridge loan
due Oct. 21, 2011 ("Bridge Loan"), and two $50 million
repayments (one each on April 26, 2011 and Oct. 26, 2011) that
are due on the company's $750 million revolving credit facility
that was almost fully drawn at Sept. 30, 2010.
GENERAL MARITIME: S&P Affirms CCR at 'CCC+'; Outlook Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC+' long-term
corporate rating on General Maritime Corp. "We also affirmed the
'CCC-' rating (two notches below the corporate credit rating) on
the company's senior unsecured notes; the '6' recovery rating,
which indicates our expectation that lenders will receive a
negligible (0%-10%) recovery in a payment default scenario,
remains unchanged. The outlook is negative," S&P said.
"The ratings on New York City-based General Maritime Corp. reflect
the company's weak liquidity, highly leveraged financial risk
profile, limited financial flexibility, and participation in the
capital-intensive, highly fragmented, volatile, and competitive
shipping industry," said Standard & Poor's credit analyst Funmi
Afonja. "Positive credit factors include its established market
position in the ocean transportation of crude oil and a strong
customer base with long-standing relationships with major oil
companies. We categorize General Maritime's business risk profile
as vulnerable, its financial risk profile as highly leveraged, and
liquidity as weak."
On May 6, 2011, General Maritime refinanced its $749 million
revolving line of credit with a $550 million revolving line of
credit (not rated) that was fully drawn, and entered into a $200
million third-lien PIK (pay-in-kind) toggle loan (not rated) from
Oaktree Capital. The PIK loan has warrants to purchase about 23
million shares of the company's common stock (19.9% of shares
currently outstanding), exercisable at any time through May 6,
2018. The company also reduced its $372 million term loan (not
rated) to $328.2 million. General Maritime remains subject to a
minimum cash requirement of $50 million and has a new maximum net
debt to capital requirement of 85% (with multiple step-down
provisions), among other financial covenants. The amended and
restated credit agreements currently do not allow for dividends
and sharebuybacks.
"Our ratings and outlook take into consideration the debt
refinancing, financial covenant amendments, and an April 2011
secondary equity offering that raised approximately $49.5 million
in net proceeds. We also incorporate into our analyses expected
reduction in capital spending this year following the completion
of the seven-vessel MetroStar acquisition last year. Even so,
we believe that General Maritime will continue to have limited
financial covenant headroom because of earnings and cash flow
pressures arising from high bunker fuel costs and low tanker
rates, especially as charter agreements on 11 of its 35 vessels
expire between July 2011 and September 2012. The company has
stated that if current weak market conditions persist, it may
breach its minimum cash requirement covenant some time in 2011. If
there is a covenant breach, lenders can require the immediate
payment of all amounts outstanding," S&P stated.
The outlook is negative. "We view General Maritime's liquidity as
weak and financial covenant cushion as very limited, leaving no
room for a shortfall in expected operating performance," Ms.
Afonja continued. "We would lower our ratings if we see an
increased likelihood of a financial covenant breach. We could
revise the outlook to stable if management takes additional steps
to improve liquidity. It is unlikely we would raise the ratings
over the next year due to the steep deterioration in the company's
overall financial risk profile and its exposure to weak tanker
rates."
GIORDANO'S ENTERPRISES: Trustee Wants Sanctions Against Consultant
------------------------------------------------------------------
Dow Jones' DBR Small Cap reports that the Chapter 11 trustee
running Giordano's Enterprises Inc.'s bankruptcy case has asked a
judge to impose sanctions against the pizza-chain owner's business
consultant, Marshall E. Home, who claims to have purchased all of
Chicago restaurant company's debt and asserts that his $200
million court-filed claim against the estate should be paid before
any other creditor.
About Giordano's Enterprises
Chicago, Illinois-based Giordano's Enterprises, Inc., was founded
in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren
and Joseph Boglio. In 1988, John and Eva Apostolou purchased
control of Giordano's. Although this casual dining eatery offers
a broad array of fine Italian cuisine, it is primarily know for
its "Chicago's World Famous Stuffed Pizza". At present,
Giordano's operates six company owned stores in Chicagoland, four
joint venture stores, and thirty-five franchisee locations. In
addition, Giordano's operates Americana Foods, Inc., located in
Mount Prospect, Illinois, that serves as the commissary for the
majority of food products purchased by the Illinois locations.
An affiliated real estate holding company, Randolph Partners, LP,
owns 12 restaurant buildings that are leased to four of the
company-owned locations, two of the joint venture locations and
six of the franchisee locations. The other 33 locations are
leased from third party landlords; two for the Giordano's
locations, two for the joint venture locations and 29 for the
franchise locations. Giordano's is the lessee and subleases the
restaurant facility for 22 of the 29 franchise third party leases.
JBA Equipment Finance, Inc, another affiliated entity, leases
restaurant equipment packages to eight franchisee locations.
Giordano's Enterprises and 26 affiliates filed for Chapter 11
bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on
Feb. 16, 2011. Six additional affiliates filed for Chapter 11
protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A.
Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at
Arnstein & Lehr, LLP, in Chicago, serve as the Debtors'
bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in
assets and $45,538,574 in liabilities as of the Chapter 11 filing.
Certain of the Debtors owe Fifth Third Bank not than $13,560,662,
pursuant to loans and financial accommodations, and $31,927,998
under a business loan as of the Petition Date. Fifth Third has
agreed to provide DIP financing of up to $35,983,563 to the
Debtors.
Philip V. Martino is the duly appointed Chapter 11 trustee in the
Debtors' bankruptcy cases.
GLUTH BROTHERS: Court Directs Bank to Release Mortgage
------------------------------------------------------
At the behest of the trustees of the Gluth Bros. Construction,
Inc. Creditor Trust, Bankruptcy Judge Manuel Barbosa directed
American Community Bank and Trust to release its mortgage on
several parcels of real estate owned by the Debtor.
In March 2000, the Bank loaned $2,000,000 to Gluth Bros., a
corporation solely owned and operated by Frank Gluth. The loan
was secured by certain business assets of Gluth Bros. The loan
initially had a 15.5 month term, but was subsequently extended
annually pursuant to change in terms agreements, with the final
extension through December 2007.
Pursuant to a change in terms agreement in 2002, the principal was
reduced to $1,000,000, and was increased back up to $2,000,000 in
2005. In connection with the 2004 extension, Gluth Bros, agreed to
procure a personal guarantee from Frank Gluth. In connection with
the 2006 and subsequent extensions, Frank Gluth signed as a co-
borrower and pledged a security interest in certain of his
property.
In August 2007, Frank Gluth granted a mortgage and an assignment
of rents to the Bank in two parcels of land with three Property
Identification Numbers located at 1151 Lake Avenue that Frank
Gluth owned individually. The Mortgage secured all indebtedness of
both Frank Gluth and Gluth Bros, to the Bank.
On Sept. 12, 2007, the Bankruptcy Court authorized an auction of
certain equipment and other business assets of Gluth Bros. The
auction was held, and on Nov. 5, 2007, the Court entered an order
directing Gluth Bros, to turn over a portion of the auction
proceeds to the Bank. The order included a statement that the
order was "without prejudice to any and all rights and claims the
Debtor's estate or creditor's committee may have against American
Community Bank and Trust or otherwise."
On Nov. 9, 2007, Gluth Bros. remitted $980,558.52 out of the
auction proceeds to the Bank in accordance with the Nov. 5 order.
Between Nov. 9, 2007, and Jan. 2, 2008, Frank Gluth repaid the
remaining balance of the loan to the Bank out of his own funds.
On Jan. 2, 2008, the Bank stamped its internal copies of the
Mortgage, assignment of rents, promissory note and each change in
terms agreement with a" PAID" stamp. However, the Bank did not
deliver a release of mortgage to Frank Gluth or Gluth Bros, or
file any release of the Mortgage or assignment of rents with the
county recorder.
On March 4, 2009, the Court entered an order confirming a plan of
liquidation in the Gluth Bros, case which vested all assets of
Gluth Bros, in a creditor trust. On June 4, 2009, the trustees
for the Gluth Bros. Creditor Trust filed an adversary proceeding
against Frank Gluth, asserting several preference and fraudulent
transfer claims. On Aug. 11, 2010, the Creditor Trust obtained a
default judgment against Frank Gluth for $2,087,090.10 plus
attorneys' fees, costs and interest. On Sept. 14, 2010, the
judgment was amended to incorporate prejudgment interest and
attorneys' fees and costs, increasing the judgment to
$2,593,970.70 plus post-judgment interest.
Through a citation to discover assets and other collection
efforts, the Creditor Trust obtained title to the Gluth Land from
Frank Gluth in partial satisfaction of the Creditor Trust's
judgment against him. Upon learning that the Bank had a recorded
mortgage on the Gluth Land but that the underlying debt had been
paid in full, the Creditor Trust demanded that the Bank release
the Mortgage so that the Creditor Trust could take steps to sell
the Gluth Land without a cloud on its title. The Bank refused.
According to Judge Barbosa, unless the Bank can point to actual,
current and unsatisfied obligations of the mortgagee, the Illinois
Mortgage Act will not permit it to forever cloud title to the land
by refusing to issue a release.
The case is Charles Dixon and Charles Graeber, Jr., not in their
individual capacities but solely as Trustees of the Gluth Bros.
Construction, Inc. Creditor Trust, v. Frank Gluth, Adv. Proc. No.
09-A-96131 (Bankr. N.D. Ill.). A copy of Judge Barbosa's June 8,
2011 Memorandum Opinion is available at http://is.gd/Lof8Pbfrom
Leagle.com.
About Gluth Bros.
Gluth Bros. Construction, Inc., a construction project contractor
based in Woodstock, Ill., sought chapter 11 protection (Bankr.
N.D. Ill. Case No. 07-71375) on June 5, 2007. Robert R. Benjamin,
Esq., at Querrey & Harrow, Ltd., in Chicago, represents the
Debtor. At the time of the filing, the Debtor disclosed
$3,214,430 in assets and liabilities totalling $8,150,879. On
March 4, 2009, the Court entered an order confirming a Plan of
Liquidation Dated January 27, 2009. Pursuant to the Plan, and the
Gluth Bros. Construction, Inc. Creditor Trust Agreement, entered
into among the Debtor, the Official Committee of Unsecured
Creditors and the Creditor Trustees, all remaining property of the
Debtor's estate, including causes of action, were vested in the
Creditor Trust, and the Creditor Trustees were granted the
authority to commence actions. Charles Dixon and Charles Graeber,
Jr., serve as the Trustees of the Creditor Trust. The Trust is
represented by Shira R. Isenberg, Esq., at Freeborn & Peters
LLP in Chicago.
GRAYMARK HEALTHCARE: Amends Form S-1; To Offer 6MM Common Shares
----------------------------------------------------------------
Graymark Healthcare, Inc., filed with the U.S. Securities and
Exchange Commission Amendment No.5 to Form S-1 registration
statement relating to the Company's offering 6,000,000 shares of
common stock and warrants to purchase up to 6,000,000 shares of
the Company's common stock. Each share of common stock is being
sold together with a 5-year warrant to purchase one share of
common stock at an exercise price of $[ ]. The shares of
common stock and warrants will be issued separately.
The Company's common stock currently trades on the NASDAQ Capital
Market under the symbol "GRMHD" until July 1, 2011, as the result
of the Company's one-for-four reverse stock split. Beginning on
July 5, 2011, the Company's common stock will resume trading on
the NASDAQ Capital Market under the symbol "GRMH". The last
reported sale price of the Company's common stock on the NASDAQ
Capital Market on June 7, 2011, was $1.33 per share. There is no
established public trading market for the warrants, and the
Company does not expect a market to develop. In addition, the
Company does not intend to apply for listing of the warrants on
any national securities exchange or other nationally recognized
trading system.
On June 3, 2011, the Company effected a one-for-four reverse stock
split of its outstanding common stock. The Company's common stock
began trading on the NASDAQ Capital Market on a split-adjusted
basis on June 6, 2011.
A full-text copy of the amended prospectus is available for free
at http://is.gd/7i4j6I
About Graymark Healthcare
Oklahoma City, Okla.-based Graymark Healthcare, Inc. (NASDAQ:
GRMH) -- http://www.graymarkhealthcare.com/-- is one of the
largest providers of care management solutions to the sleep
disorder market based on number of independent sleep care centers
and hospital sleep diagnostic programs operated in the United
States.
The Company's balance sheet at March 31, 2011, showed
$26.8 million in total assets, $28.5 million in total liabilities,
and a stockholders' deficit of $1.7 million.
As reported in the TCR on April 5, 2011, Eide Bailly LLP, in
Greenwood Village, Colo., expressed substantial doubt about
Graymark Healthcare's ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has suffered significant losses from
operations, anticipates additional losses in the next year and has
insufficient working capital as of Dec. 31, 2010, to fund the
anticipated losses.
HARRY & DAVID: Taps PricewaterhouseCoopers as Independent Auditor
-----------------------------------------------------------------
Harry & David Holdings Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ PricewaterhouseCoopers LLP, as independent auditor, nunc
pro tunc to March 28, 2011.
A hearing is set for June 24, 2011, at 2:00 p.m., to consider the
Debtors' request. Objections, if any, are due June 17, 2011.
Pursuant to the terms of the Engagement Letter, since Feb. 12,
2011, PwC has been providing auditing services in connection with
the consolidated financial statements of the Debtors at June 25,
2011 and for the year then ending, including reviews of the
unaudited consolidated quarterly financial information for each of
the first three quarters in the year ending June 25, 2011. PwC
intends to continue providing such services as set forth in the
Engagement Letter during the Debtors' bankruptcy cases.
PwC and the Debtors agreed to a fixed-fee arrangement of $590,000
for the 2011 Audit Services. Prior to the Petition Date, the
Debtors paid PwC $180,000 associated with the 2011 Audit Services.
PwC was not owed any amount on account of services rendered and
expenses incurred prior to the Petition Date in connection with
the PwC's employment by the Debtors.
During the Debtors' bankruptcy cases, PwC will seek payment of
$410,000 pursuant to the payment schedule as outlined in the
Engagement Letter:
Date Fee Amount
----- ----------
March 31, 2011 $60,000
April 30, 2011 $60,000
May 30, 2011 $60,000
June 30, 2011 $90,000
July 31, 2011 $90,000
August 31, 2011 $50,000
The Debtors assure the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Harry & David
Medford, Oregon-based Harry & David Holdings, Inc. -- aka Bear
Creek Corporation; Bear Creek Direct Marketing, Inc.; Bear Creek
Stores, Inc.; Bear Creek Operations, Inc.; and Bear Creek
Orchards, Inc. -- is a multi-channel specialty retailer and
producer of branded premium gift-quality fruit and gourmet food
products and gifts marketed under the Harry & David(R),
Wolferman's(R) and Cushman's(R) brands. It has 70 stores across
the country.
Harry & David Holdings filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 11-10884) on March 28, 2011.
Affiliates Harry and David (Bankr. D. Del. Case No. 11-10885),
Harry & David Operations, Inc. (Bankr. D. Del. Case No. 11-10886),
and Bear Creek Orchards, Inc. (Bankr. D. Del. Case No. 11-10887)
filed separate Chapter 11 petitions. The cases are jointly
administered, with Harry David Holdings as lead case.
Daniel J. DeFranceschi, Esq.; Paul Noble Heath, Esq.; and Zachary
Shapiro, Esq., at Richards Layton & Finger, serve as the Debtors'
local counsel. David G. Heiman, Esq.; Brad B. Erens, Esq.; and
Timothy W. Hoffman, Esq., at Jones Day, are the Debtors' legal
counsel. Rothschild Inc. is the Debtors' investment banker.
Alvarez & Marsal LLC is the Debtors' financial advisor. Garden
City Group Inc. is the Debtors' claims and notice agent. McKinsey
Recovery & Transformation Services U.S. LLC is being tapped as
management consultants.
The Debtor also tapped DJM Realty Services, LLC, as real estate
consultants; Alvarez & Marsal North America to provide the Debtors
an interim chief executive officer and chief restructuring officer
and certain additional officers; and McKinsey Recovery &
Transformation Services U.S. LLC as their management consultant.
Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock &
Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles &
Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer
& Feld LLP are counsel to principal noteholders. Moelis & Company
is the financial advisor to the principal noteholders.
Lowenstein Sandler has been retained as counsel to the unsecured
creditors committee in the Harry & David bankruptcy case.
The Debtors disclosed $304.3 million in total assets and
$360.8 million in total debts as of Dec. 25, 2010.
The Debtors' proposed Plan of Reorganization will allow the
Company to convert all of its approximately $200 million of
outstanding public notes into equity of the reorganized company.
The Plan also includes an equity capital raise that will generate
$55 million in equity financing upon the Company's emergence from
chapter 11. The Plan has the support of the Official Committee of
Unsecured Creditors and the holders of approximately 81% of the
Company's public notes.
HAWKER BEECHCRAFT: Bank Debt Trades at 13% Off in Secondary Market
------------------------------------------------------------------
Participations in a syndicated loan under which Hawker Beechcraft
is a borrower traded in the secondary market at 86.93 cents-on-
the-dollar during the week ended Friday, June 10, 2011, a drop of
0.84 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 200 basis points above LIBOR to borrow
under the facility. The bank loan matures on March 26, 2014, and
carries Moody's 'Caa1' rating and Standard & Poor's 'CCC+' rating.
The loan is one of the biggest gainers and losers among 208 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kan., is a manufacturer of business jets, turboprops and
piston aircraft for corporations, governments and individuals
worldwide.
Hawker Beechcraft Acquisition Company LLC reported net sales for
the three months ended Sept. 30, 2010, of $594.7 million, a
decrease of $163.0 million compared to the third quarter of 2009.
During the three months ended Sept. 30, 2010, the Company recorded
an operating loss of $81.4 million, compared to an operating loss
of $721.1 million during the comparable period in 2009. The
improved operating loss versus the prior period was primarily due
to charges of $581.5 million related to asset impairments recorded
during the three months ended Sept. 27, 2009.
The Company's balance sheet at June 27, 2010, showed
$3.420 billion in total assets, $3.408 billion in total
liabilities, and stockholders' equity of $11.6 million.
Hawker Beechcraft reported a net loss of $56.8 million on
$639.3 million of total sales for the three months ended June 27,
2010, compared with net income of $172.2 million on $816.3 million
of sales for the three months ended June 28, 2009.
Hawker Beechcraft carries 'Caa2' corporate family and probability
of default ratings from Moody's Investors Service.
HD SUPPLY: Incurs $164 Million Net Loss in May 1 Quarter
--------------------------------------------------------
HD Supply, Inc., filed with the U.S. Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $164 million on $1.88 billion of net sales for the three months
ended May 1, 2011, compared with a net loss of $202 million on
$1.80 billion of net sales for the three months ended May 2, 2010.
The Company's balance sheet at May 1, 2011, showed $7.03 billion
in total assets, $7.08 billion in total liabilities, and a
$55 million total stockholders' deficit.
"We posted our fourth consecutive quarter of sales growth despite
prolonged economic headwinds. The growth was driven by our
associates' intense focus on serving customers in our core
markets, sales initiative execution in adjacent markets and
specialization of activities to further penetrate specific
customer segments," stated Joe DeAngelo, CEO of HD Supply.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/SENrqN
About HD Supply
HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the
largest North American wholesale distributors supporting
residential and non-residential construction and to a lesser
extent electrical consumption and repair and remodeling. HDS also
provides maintenance, repair and operations services. Its
businesses are organized around three segments: Infrastructure and
Energy; Maintenance, Repair & Improvement; and, Specialty
Construction. HDS operates through approximately 800 locations
throughout the U.S. and Canada serving contractors, government
entities, maintenance professionals, home builders and
professional businesses.
The Company reported a net loss of $619 million on $7.47 billion
of revenue for the fiscal year ended Jan. 30, 2011, compared with
a net loss of $514 million on $7.42 billion of net sales for the
fiscal year ended Jan. 31, 2010.
* * *
HD Supply carries 'Caa2' probability of default rating and
corporate family rating, with negative outlook, from Moody's
Investors Service, and a 'B' corporate credit rating, with
negative outlook, from Standard & Poor's Ratings Services.
In April 2010, when Moody's downgraded the ratings to
'Caa2' from 'Caa1', it said, "The downgrade results from Moody's
views that the construction industry, the main driver of HDS'
revenues, will continue to be weak for the foreseeable future,
pressuring the company's ability to generate meaningful levels of
earnings and free cash flow relative to its debt."
HEARUSA INC: Wins Court Permission to Move Ahead With Auction
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that HearUSA Inc. received
clearance to place its assets on the auction block, with a lead
offer from Danish hearing-aid maker William Demant Holdings AS
kicking off the bidding.
About HearUSA
HearUSA, Inc., which sells hearing aids in 10 states, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
11-23341) on May 16, 2011, to sell the business for $80 million to
William Demant Holdings A/S. The Debtor said that assets are
$65.6 million against debt of $64.7 million as of March 31, 2010.
Judge Erik P. Kimball presides over the case. Brian K. Gart,
Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at
Berger Singerman, P.A., represent the Debtor. The Debtor selected
Bryan Cave LLP as special counsel; Sonenshine Partners LLC,
investment banker; Development Specialist Inc., restructuring
advisor; and AlixPartners LLC, as communications consultant.
Trustee Services, Inc., serves as claims and notice agent.
HELIX ENERGY: S&P Lowers Rating on Sr. Secured Debt to 'B+'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its senior secured debt
ratings on Houston-based Helix Energy Solutions Group Inc. to 'B+'
(one notch higher than the corporate credit rating) from 'BB-'.
Standard & Poor's simultaneously revised its recovery rating on
these issues to '2', indicating the expectation of substantial
(70% to 90%) recovery in the event of a payment default, from '1'.
The issue rating on the company's senior unsecured debt remains
'CCC+' (two notches lower than the corporate credit rating) and
the recovery rating remains '6', indicating the expectation of
negligible recovery (0% to 10%) in the event of a payment default.
The rating actions reflect the increase in secured debt and the
resulting lower recovery prospects for senior secured lenders
following the oil and gas firm's announcement that it has amended
and extended its revolving credit facility, with availability
increasing to $600 million from $435 million. Helix will use its
revolver to pay down $109.4 million of its term loan B and reduce
the principal balance on the term loan to $300 million. The rating
action reflects an increase in secured debt, given Standard &
Poor's assumption that an issuer will fully draw on its revolver
before defaulting.
Helix, an integrated marine contractor, has meaningful exposure to
the Gulf of Mexico for cash flows and aggressive leverage. Ratings
also reflect its adequate liquidity profile, diversity provided
through international exposure, and the potential that the company
could reduce its debt if it sells its exploration and production
assets.
Ratings List
Helix Energy Solutions Group Inc.
Corporate credit rating B/Stable/--
Ratings Lowered
To From
Helix Energy Solutions Group Inc.
Senior secured B+ BB-
Recovery rating 2 1
HOVNANIAN ENTERPRISES: Incurs $72.7-Mil. Net Loss in April 30 Qtr.
------------------------------------------------------------------
Hovnanian Enterprises, Inc., filed with the U.S. Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting a
net loss of $72.66 million on $255.09 million of total revenues
for the three months ended April 30, 2011, compared with a net
loss of $28.63 million on $318.58 million of total revenues for
the same period a year ago. The Company also reported a net loss
of $136.81 million on $507.66 million of revenue for the six
months ended April 30, 2011, compared with net income of $207.55
million on $638.23 million of total revenues for the same period
during the prior year.
The Company's balance sheet at April 30, 2011, showed $1.73
billion in total assets, $2.08 billion in total liabilities and a
$349.81 million total deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/G5rzed
About Hovnanian Enterprises
Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV)
-- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian,
is one of the nation's largest homebuilders with operations in
Arizona, California, Delaware, Florida, Georgia, Illinois,
Kentucky, Maryland, Minnesota, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and
West Virginia. The Company's homes are marketed and sold under
the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton
Homes, Parkwood Builders, Town & Country Homes, Oster Homes and
CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons
communities, the Company is also one of the nation's largest
builders of active adult homes.
* * *
As reported by the TCR on April 25, 2011, Fitch Ratings has
affirmed Hovnanian Enterprises, Inc.'s Issuer Default Rating (IDR)
at 'CCC'. The rating for HOV is influenced by the Company's
execution of its business model, land policies and geographic,
price point and product line diversity. The rating also reflects
the company's liquidity position, substantial debt and high
leverage.
IPC SYSTEMS: S&P Affirms CCR at 'B-; Outlook Revised to Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on Jersey
City, N.J.-based trading systems and network services provider IPC
Systems Inc. to positive from stable. "At the same time, we
affirmed the 'B-' corporate credit rating and all issue-level
ratings," S&P said.
"The outlook revision reflects improved operating performance in
both of the company's business segments," said Standard & Poor's
credit analyst Michael Senno, "and our expectation for new sales
for its trading systems to remain strong, boosted by the recent
introduction of a new software-based product."
"The outlook change also reflects a more stable operating
environment and positive revenue trends," he added.
JERRY SAXTON: Macris Debt Exempted From Discharge
-------------------------------------------------
Bankruptcy Judge Russell F. Nelms granted the request of Michael
N. Macris and Macris Enterprises, LLC, for summary judgment
determining that debts owed to Macris by Jerry Saxton and Katie
Saxton are excepted from discharge pursuant to 11 U.S.C. Sections
523(a)(4) and (a)(6). Mr. Macris commenced an adversary
proceeding against the Debtors to determine the dischargeability
of debts owed to him by the Debtors. The amount of the debt owed
to Mr. Macris by Jerry Dean Saxton is $1,643,136, plus pre-
judgment interest on $1,343,136, at the Utah statutory judgment
rate, retroactive to Dec. 4, 2009. The amount of the debt owed by
Katie Elizabeth Saxton is $1,543,136, plus pre-judgment interest
on $1,243,136, at the Utah statutory judgment rate, also
retroactive to Dec. 4, 2009. The case is Michael N. Macris and
Macris Enterprises, LLC, v. Jerry Dean Saxton and Katie Elizabeth
Saxton, Adv. Proc. No. 10-04204 (Bankr. N.D. Tex.). A copy of the
Court's June 8, 2011 Findings of Fact and Conclusions of Law is
available at http://is.gd/jSO0mefrom Leagle.com.
Attorneys for Michael N. Macris and Macris Enterprises, LLC, are:
Henry W. Simon, Jr., Esq.
Robert A. Simon, Esq.
BARLOW, GARSEK & SIMON, L.L.P.
3815 Lisbon Street
Fort Worth, TX 76107
Tel: 817-731-4500 x130
Fax: 817-731-6200
E-mail: hsimon@bgsfirm.com
rsimon@bgsfirm.com
Attorney for Jerry Saxton, Katie Saxton, and American Equities
Management, LLC, is David M. Seeberger, Esq. --
jgibson@thegibsonlawgroup.com -- at The Gibson Law Group.
Jerry Dean Saxton and Katie Elizabeth Saxton, aka Katie E. Heinen,
in Southlake, Texas, filed for Chapter 11 bankruptcy (Bankr. N.D.
Tex. Case No. 10-44412) on July 2, 2010. They estimated $500,001
to $1 million in assets and $1 million to $10 million in debts.
American Equities Management LLC filed a separate petition (Bankr.
N.D. Tex. Case No. 10-44417) also July 2, 2010, listing under
$50,000 in assets and $1 million to $10 million in debts.
KEVEN A MCKENNA: Case Converted to Chapter 7 Liquidation
--------------------------------------------------------
Bankruptcy Judge Arthur N. Votolato converted the Chapter 11
bankruptcy case of Keven A. McKenna to a liquidation proceeding
under Chapter 7, at the best of the United States Trustee. The
Court finds that the Debtor has failed to comply with the
mandatory requirements of 11 U.S.C. Sections 1121(e) and 1129(e).
Section 1121(e)'s "300 day term . . . is an imperative term to
file a plan, and non-compliance creates a 'drop-dead' effect" that
limits the debtor's options to reorganize. In re Sanchez, 429 B.R.
393, 398 (Bankr. D.P.R. 2010). Therefore, the Court finds that
cause exists to convert the case to one under Chapter 7. The
Court further finds that conversion, rather than dismissal, is in
the best interest of creditors. A copy of Judge Votolato's ruling
is available at http://is.gd/CLFI5jfrom Leagle.com.
Keven A. McKenna filed for Chapter 11 bankruptcy for himself and
Keven A. McKenna law firm (Bankr. D. R.I. Case No. 10-10274)
on Jan. 25, 2010. Mr. McKenna disclosed $751,000 in assets and
$45,700 in liabilities in his bankruptcy petition. His firm
estimated debts of between $100,000 and $500,000. Mr. McKenna's
case was dismissed but his personal bankruptcy protection claim
remains active as he continues to fight a Workers' Compensation
Court order that he pay his former paralegal Summer D. Stone for
injuries.
At the behest of the Official Committee of Unsecured Creditors,
the Bankruptcy Court on Nov. 18, 2010, appointed Providence
bankruptcy lawyer Thomas P. Quinn as Chapter 11 trustee of McKenna
PC to take over management of the law firm. Chief District Judge
Mary M. Lisi affirmed the Chapter 11 trustee appointment order in
a May 31, 2011 Memorandum and Order.
KHAWAJA PARTNERS: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Khawaja Partners, Ltd.
1309 Ashland Street
Houston, TX 77008
Bankruptcy Case No.: 11-34884
Chapter 11 Petition Date: June 6, 2011
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: Joan Kehlhof, Esq.
WIST HOLLAND & KEHLHOF
720 N Post Oak Rd., Suite 610
Houston, TX 77024
Tel: (713) 686-5444
Fax: (713) 686-0703
E-mail: jkehlhof@whkllp.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Jamal Khawaja, vice president of
Debtor's general partner.
JOE'S JEANS: Fails to Comply With Nasdaq Bid Price Rule
-------------------------------------------------------
Joe's Jeans Inc. received a letter from The Nasdaq Stock Market
indicating that the Company is not in compliance with Nasdaq
Listing Rule 5550(a)(2) because the closing bid price per share of
its common stock has been below $1.00 per share for 30 consecutive
trading days. The Nasdaq letter was issued in accordance with
standard Nasdaq procedures. In accordance with Nasdaq Listing
Rule 5810(c)(3)(A), the Company will be provided with 180 calendar
days, or until December 5, 2011, to regain compliance with the Bid
Price Rule. This notification has no immediate effect on the
listing of its common stock at this time.
To regain compliance with the Bid Price Rule, the closing bid
price of the Company's common stock must remain at $1.00 per share
or more for a minimum of 10 consecutive trading days. If the
Company does not regain compliance with the Bid Price Rule by
December 5, 2011, the Company may be eligible for additional time.
The Company would be required to meet certain continued listing
requirements and the initial listing criteria for The Nasdaq
Capital Market except for the bid price requirement and will need
to provide written notice of its intention to cure its deficiency
during the second compliance period by effecting a reverse stock
split, if necessary. If the Company meets these criteria, Nasdaq
will notify the Company that it has been granted an additional 180
calendar day compliance period. If the Company is not eligible
for an additional compliance period, Nasdaq will provide the
Company with written notification that its common stock will be
delisted. At that time, the Company may appeal Nasdaq's
determination to delist its common stock to the Nasdaq Hearings
Panel.
About Joe's Jeans Inc.
Joe's Jeans Inc. -- http://www.joesjeans.com/ -- designs,
produces and sells apparel and apparel-related products to the
retail and premium markets under the Joe's(R) brand and related
trademarks.
JW-IH10-CB LLC: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: JW-IH10-CB, LLC
270 North Loop 1604 East, Suite 220
San Antonio, TX 78232
Bankruptcy Case No.: 11-52024
Chapter 11 Petition Date: June 6, 2011
Court: United States Bankruptcy Court
Western District of Texas (San Antonio)
Judge: Ronald B. King
Debtor's Counsel: Oscar L. Cantu, Jr., Esq.
LAW OFFICES OF OSCAR CANTU
507 S Main Ave.
San Antonio, TX 78204
Tel: (210) 472-3900
Fax: (210) 354-2996
E-mail: r3oscar@aol.com
Scheduled Assets: $9,500,000
Scheduled Debts: $8,400,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by John W. Lopez, managing member.
KURRANT MOBILE: Now Known as Cogito Media Group
-----------------------------------------------
The Board of Directors of Kurrant Mobile Catering, Inc., now known
as Cogito Media Group Inc., and the shareholders holding a
majority of the voting rights approved a change in name of the
Company from "Kurrant Mobile Catering Inc." to "Cogito Media Group
Inc." to better reflect the current and ongoing business
operations of the Company involving the book publishing industry.
Effective June 6, 2011, the Board of Directors and the shareholder
holding a majority of the voting rights of the Company further
approved an increase in the authorized capital of the Company to
50 billion shares of common stock to enhance its opportunities of
structuring various investments for financing from certain
investment groups.
Therefore, the Company filed an amendment to its articles of
incorporation reflecting the Name Change and the Increase in
Authorized Capital.
The amendment will not affect the number of the Company's issued
and outstanding common shares.
About Kurrant Mobile
Montreal, Quebec-based Kurrant Mobile Catering, Inc., operates in
a single business segment that includes the publication and
distribution of books and eBooks. The Company sells its products
to distributors throughout the world.
The Company's balance sheet at Nov. 30, 2010, showed $1.02 million
in total assets, $1.71 million in total liabilities, and a
$686,774 stockholders' deficit.
According to the Form 10-Q for the quarter ended Nov. 30, 2010,
"The Company has incurred net losses and has negative cash flows
from its operations. These factors raise substantial doubt
regarding Kurrant Mobile's ability to continue as a going concern.
Realization value may be substantially different from carrying
values as shown and these financial statements do not include any
adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be
necessary should Kurrant Mobile be unable to continue as a going
concern. The continuation of Kurrant Mobile as a going concern is
dependent upon the continued financial support from its
shareholders, the ability of Kurrant Mobile to obtain necessary
equity financing to continue operations, and the attainment of
profitable operations."
LANDAMERICA FIN'L: Executives Hit With ERISA Class Action
---------------------------------------------------------
Roxanne Palmer at Bankruptcy Law360 reports that a former
LandAmerica Financial Group Inc. employee filed a putative class
action against the Company's executives in Virginia federal court
on Wednesday, claiming LFG's retirement plan continued to invest
in LFG stock after it was no longer prudent.
Law360 says the complaint names most of LFG's top brass as
defendants, including former CEO Theodore Chandler and more than a
dozen directors who oversaw the investment options for the
retirement plan, and accuses the directors of breaching their
fiduciary duties under the Employee Retirement Income Security
Act.
About LandAmerica Financial
LandAmerica Financial Group, Inc., provided real estate
transaction services with offices nationwide and a vast network of
active agents. LandAmerica Financial Group and its affiliate
LandAmerica 1031 Exchange Services, Inc. filed for Chapter 11
protection Nov. 26, 2008 (Bankr. E.D. Va. Lead Case No. 08-35994).
Attorneys at Willkie Farr & Gallagher LLP and McGuireWoods LLP
served as co-counsel. Zolfo Cooper served as the restructuring
advisor. Epiq Bankruptcy Solutions served as claims and notice
agent.
Attorneys at Akin Gump Strauss Hauer & Feld LLP and Tavenner &
Beran, PLC, served as counsel to the Creditors Committee of 1031
Exchange. Bingham McCutchen LLP and LeClair Ryan served as
counsel to the Creditors Committee of LFG.
In its bankruptcy petition, LFG reported total assets of
$3,325,100,000, and total debts of $2,839,800,000 as of
Sept. 30, 2008.
On March 6, 2009, affiliate LandAmerica Assessment Corporation,
aka National Assessment Corporation, filed its own Chapter 11
petition. Affiliate LandAmerica Title Company filed for for
Chapter 11 relief on March 27, 2009. LandAmerica Credit
Services, Inc., filed for Chapter 11 in July 2009.
LandAmerica filed a Joint Plan of Liquidation on Sept. 9, 2009.
The Bankruptcy Court confirmed that plan on Nov. 23, 2009, and the
plan took effect on Dec. 7, 2009.
LASER REALTY: Chapter 7 Trustee Wins Avoidance Suit
---------------------------------------------------
The Bankruptcy Court in Puerto Rico ruled that the Chapter 7
trustee for the estate of Laser Realty, Inc., has avoidance claims
against Venancio Marti Santa, Julita Soler-Vila, and the conjugal
society composed by them. The Chapter 7 Trustee filed a lawsuit
against the defendants on Sept. 18, 2006, asserting that Laser
made 22 transfers in the total amount of $128,947.28 to the
defendants within a year preceding the filing of the bankruptcy
petition -- from Dec. 15, 2003 to Dec. 15, 2004 -- while the
Debtor was insolvent, and for which the Debtor did not receive
anything of value in exchange of the payments for the defendants'
credit cards. The defendants allege that the payments were not
made from property of the estate and that Laser was a mere conduit
for the payments. The Court held that the transfers are voidable
pursuant to 11 U.S.C. Section 548. The Court further held that
the defendants may not avail themselves of the conduit or
earmarking defenses.
The case is Noreen Wiscovitch-Rentas, as Chapter 7 Trustee for the
Estate of Laser Realty, Inc., v. Venancio Marti Santa; Julita
Soler-Vila; and the Conjugal Partnership composed by them, Adv.
Proc. No. 06-00186 (Bankr. D. P.R.). A copy of Bankruptcy Judge
Enrique S. Lamoutte's June 8, 2011 Opinion and Order is available
at http://is.gd/OtCfqTfrom Leagle.com.
Laser Realty Inc. filed a voluntary Chapter 11 petition (Bankr. D.
P.R. Case No. 04-12634) on Dec. 14, 2004. The case was converted
to Chapter 7 on Oct. 14, 2005, upon the Debtor's request.
LEE ENTERPRISES: Bank Debt Trades at 14% Off in Secondary Market
----------------------------------------------------------------
Participations in a syndicated loan under which Lee Enterprises,
Inc., is a borrower traded in the secondary market at 86.45 cents-
on-the-dollar during the week ended Friday, June 10, 2011, a drop
of 0.95 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 50 basis points above LIBOR to borrow
under the facility. The bank loan matures on December 23, 2012.
Moody's has withdrawn its rating on the bank debt. The loan is
one of the biggest gainers and losers among 208 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
As reported by the Troubled Company Reporter on May 16, 2011,
Standard & Poor's lowered its preliminary corporate credit rating
on Davenport, Iowa-based Lee Enterprises, Inc., to 'B-' from 'B'.
The rating outlook is negative.
"The downgrade is based on the company's significant near-term
maturities and our belief that alternative refinancing options
will likely be costly," said Standard & Poor's credit analyst Hal
F. Diamond. "We withdrew our 'B' preliminary issue rating on Lee
Enterprises' proposed $680 million first-lien senior secured notes
due 2017 with a preliminary recovery rating of '3' (also
withdrawn), indicating our expectation of meaningful (50%-70%)
recovery for lenders in the event of a payment default," S&P
related.
Lee Enterprises, Inc., headquartered in Davenport, Iowa, is a
provider of local news, information and advertising in primarily
midsize markets, with 49 daily newspapers and a joint interest in
four others, digital products and nearly 300 specialty
publications in 23 states. Revenue for the 12 months ended
December 2010 was approximately $780 million.
LEVELLAND/HOCKLEY: Committee Taps Haynes and Boone as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of the Chapter 11
cases of Levelland/Hockley County Ethanol LLC asks permission from
the U.S. Bankruptcy Court for the District of Texas to retain
Haynes and Boone, LLP, as counsel, nunc pro tunc May 11, 2011.
The firm can be reached at:
Stephen M. Pezanosky
Mark Elmore
Erik K. Martin
HAYNES AND BOONE, LLP
201 Main Street, Suite 2200
Fort Worth, TX 76102
Tel: (817) 347-6600
Fax: (817) 347-6500
E-mail: stephen.pezanosky@haynesboone.com
mark.elmore@haynesboone.com
erik.martin@haynesboone.com
As the Committee's counsel, Haynes and Boone will, among other
things:
(a) advise the Committee with respect to its rights, powers,
and duties in this case;
(b) assist and advise the Committee in its consultations with
the Debtor regarding the administration of this case;
(c) assist the Committee in analyzing the claims and interests
of the Debtor's stakeholders and in negotiating with such
stakeholders;
(d) assist with the Committee's investigation of the acts,
conduct, assets, liabilities, and financial condition of
the Debtor and of the operation of its business; and
(e) assist the Committee in its analysis of, and negotiations
with, the Debtor or any third party concerning matters
related to, among other things, the terms of a Chapter 11
plan or plans for the Debtor.
Haynes and Boone will be paid based on the rates of its
professionals:
Professionals Hourly Rates
------------- ------------
Stephen M. Pezanosky, Partner $695
Mark Elmore, Associate $490
Erik K. Martin, Associate $375
Jordan Bailey, Associate $280
Dian Gwinnup, Paralegal $190
Haynes and Boone's hourly rates currently range from $190 to $990
for attorneys, and from $75 to $570 for professional consultants,
paralegals, and case clerk staff.
Haynes and Boone has agreed to reduce Mr. Pezanosky's hourly rate
to $595.00 per hour. The foregoing reduction of Mr. Pezanosky's
hourly rate is an accommodation to the Committee and parties-in-
interest in this case and is not applicable to any other
engagement or bankruptcy case.
Stephen M. Pezanosky, Esq., a partner at Haynes and Boone, LLP,
assures the Court that the firm is a "disinterested person" as
that term defined in Section 101(14) of the Bankruptcy Code.
About Levelland Ethanol
Levelland/Hockley County Ethanol LLC is a Texas limited liability
company that owns and operates a 40 million gallon per annum
Ethanol production plant located in Levelland, Hockley county,
Texas. The LLC has over 100 members many of whom are local
farmers, business people and civic leaders. A recent appraisal of
its facility values its assets, with the Plant under full
operation, at over $51.5 million.
Levelland Ethanol filed for Chapter 11 bankruptcy (Bankr. N.D.
Tex. Case No. 11-50162) on April 27, 2011, represented by lawyers
at Block & Garden, LLP, in Dallas. In its petition, the Debtor
estimated $50 million to $100 million in assets and $10 million to
$50 million in debts.
LOCATEPLUS HOLDINGS: In Default Under Gulabtech Debenture
---------------------------------------------------------
LocatePLUS Holdings Corporation, on June 3, 2011, received a
Notification of Secured Party Disposition of Collateral by way of
Public Sale on behalf of Gulabtech, LLC, holder of a Secured
Convertible Debenture of the Company and associated loan
documents, including a Security Agreement, acquired by purchase on
March 18, 2011. The Notification asserts that the Debenture is in
default and outstanding principal and interest due on the
Debenture as of May 31, 2011, was $3,431,040. The Notification
states that a public auction sale of the Collateral, consisting of
all the assets of the Company, will be held Tuesday June 21, 2011,
at 11:00 a.m. at the offices of Murtha, Cullina LLP, 99 High
Street, 20th Floor, Boston, Massachusetts. The Company is
reviewing all options including a Chapter 11 reorganization filing
and alternative solutions.
About LocatePLUS Holdings
Beverly, Mass.-based LocatePLUS Holdings Corporation, through
itself and its wholly-owned subsidiaries LocatePLUS Corporation,
Worldwide Information, Inc., Entersect Corporation, Dataphant,
Inc., and Employment Screening Profiles, Inc. are business-to-
business, business-to-government and business-to-consumer
providers of public information via its proprietary data
integration solutions.
The Company reported a net loss of $1.61 million on $7.89 million
of revenue for the twelve months ended Dec. 31, 2010, compared
with a net loss of $2.84 million on $7.26 million of revenue
during the prior year.
As reported by the TCR on April 21, 2011, Livingston & Haynes,
P.C., in Wellesley, Massachusetts, noted that the Company has an
accumulated deficit at Dec. 31, 2010 and has suffered substantial
net losses in each of the last two years, which raise substantial
doubt about the company's ability to continue as a going concern.
The Company's balance sheet at March 31, 2011, showed
$2.08 million in total assets, $12.25 million in total liabilities
and a $10.17 million total stockholders' deficit.
LOCATION BASED TECH: Ready to Satisfy a $1.2MM LoackRackTracker PO
------------------------------------------------------------------
Location Based Technologies, Inc., has received and is prepared to
fulfill a purchase order for LoadRackTracker with the Company's
freight monitoring devices. The order is valued at approximately
$1.2M.
"After working through several difficult years in the economy, we
are now ready to begin delivery of our unique trucking and freight
monitoring system to LoadRackTrackerTM," said Dave Morse, CEO of
Location Based Technologies. "This is the first of several
channel partner relationships to be announced which will speed the
use and adoption of our cutting edge PocketFinder NetworkTM with
hardware solutions that meet specific market segment's needs."
LoadRackTracker device delivery will begin in July. This joint
solution uses advanced technology to assist shippers, carriers and
truck brokers to optimize their resources, to coordinate available
trucks and loads, and allow for load visibility across the supply
chain. The customized interface for the LoadRackTracker solution
can be accessed via the Internet, an iPad, or smartphone to show
its exact location and load condition in real time. In addition,
the devices include several advanced features, such as allowing
users and stakeholders to be notified when a device leaves or
enters a zone, near real-time load temperature monitoring, route
changes and the ability to manage time delays. By combining the
PocketFinder(R) solution with the LoadRackTracker.comTM software,
load integrity, customer service and load visibility will enhance
the procurement and delivery of all temperature controlled goods.
"We will soon begin production of the entire family of our devices
including the PocketFinder(R) for Pets which is a small GPS pet
locator that allows users to locate their pet at any time and
receive alerts when they go missing. The PocketFinder(R) for
People, also a small GPS location device that provides real time
information for the device and the loved one carrying it, and the
PocketFinder(R) Vehicle, available now, which is a perfect
solution for parents who want peace of mind and for businesses
that need a dedicated GPS vehicle tracking system," Mr. Morse went
on to say.
About LoadRackTracker
LoadRackTracker TM is a premier provider of truck and load
matching, with an industry first real-time asset tracking
application. Their advanced technology allows shippers, carriers,
and truck brokers to optimize resources and coordination by
procuring available trucks and loads, while ensuring load
integrity across the supply chain. Accessed through multiple
mediums, the system allows users to determine load location and
status, designate safe and unsafe zones and lanes, monitor load
temperatures, facilitate route changes, and effectively manage
equipment problems and delays.
About Location Based Technologies
Headquartered in Irvine, Calif., Location Based Technologies, Inc.
(OTC BB: LBAS) -- http://www.locationbasedtech.com/-- designs,
develops, and sells personal, pet, and vehicle locator devices and
services.
As reported in the Troubled Company Reporter on Dec. 22, 2010,
Comiskey & Company, in Denver, Colo., expressed substantial doubt
about Location Based Technologies' ability to continue as a going
concern following its results for the fiscal year ended August 31,
2010. The independent auditors noted that the Company has
incurred recurring losses since inception and has an accumulated
deficit in excess of $28,800,000 and a working capital deficit in
excess of $5,900,000.
The Company's balance sheet at Feb. 28, 2011, showed $1.75 million
in total assets, $6.96 million in total liabilities, and a $5.21
million stockholders' deficit.
LOUISIANA-PACIFIC CORP: S&P Affirms CCR at BB; Outlook Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Nashville-based Louisiana-Pacific Corp. to negative from stable.
At the same time, Standard & Poor's affirmed its ratings,
including the 'BB' corporate credit rating, on the company.
The outlook revision reflects the risk that LP's credit measures
could be weaker than expected for the next one to two years
because of a slower recovery in new residential construction,
prospects for stalled remodeling spending if consumer confidence
wanes, and still-tight consumer credit.
"The ratings previously included the potential for an improvement
in housing starts that would lead LP to generate a similar level
of EBITDA in 2011 as it had in 2010," said Standard & Poor's
credit analyst Pamela Rice. "However, annualized housing starts
thus far in 2011 are less than the level of starts our economists
are expecting for the full year."
Standard & Poor's assesses the company's business risk profile as
fair. LP is the world's largest oriented strandboard producer,
with mills in North America, Chile, and Brazil.
LYONDELL CHEMICAL: Settles Severance Claims for $3 Million
----------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that Lyondell Chemical
Co. on Wednesday sought bankruptcy court approval in New York of a
$3 million class settlement resolving claims from former employees
seeking better severance packages.
Lyondell sought preliminary approval of a class action settlement
that would provide roughly 440 employees who opted for early
retirement between 60 and 80 percent of the bonuses they claim
they were denied when they departed during Lyondell's Chapter 11
case. Lyondell exited bankruptcy protection in April 2010, having
discharged about $20 billion in debt, 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 Jan. 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 protection 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.
MEDIA GENERAL: S&P Revises Outlook on 'B-' CCR to Negative
----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Richmond, Va.-headquartered Media General Inc.'s 'B-' rating to
negative from stable. "The outlook change reflects our expectation
that Media General could face difficulties in maintaining covenant
compliance in 2012 due to the absence of meaningful election
revenues and secular declines in publishing revenue," S&P said.
"The outlook revision reflects our expectation that continued
secular declines in newspaper ad revenue, along with an absence of
political ad spending, will cause Media General's cushion of
compliance with tightening covenants to narrow, potentially
causing a violation in 2012," said Standard & Poor's credit
analyst Jeanne Mathewson.
The 'B-' rating reflects Standard & Poor's expectation that
revenue softness in 2011 will cause credit metrics and
discretionary cash flow to deteriorate over the next six to 12
months. "We view the company's business risk profile as weak
because of the structural pressure on the U.S. newspaper industry,
TV broadcasting's mature long-term growth prospects, and increased
competition for audience and advertisers from traditional and
nontraditional media. Media General has a highly leveraged
financial risk profile, in our view, because of its high ratio of
debt to EBITDA and tightening covenants in late 2011 through
2012," S&P related.
"The negative outlook reflects our expectation that declining
EBITDA and tightening covenants could lead to a covenant violation
in 2012. We could lower the rating if the company is not able to
support an amendment, resulting in a potential violation of
covenants," said Ms. Mathewson. "More specifically, we could lower
the rating if the company is unable to maintain positive
discretionary cash flow and if EBITDA declines exceed 25% in 2011,
which could occur with a mid-single-digit percent drop in
revenue."
MERGE HEALTHCARE: Moody's Affirms 'B2' Corporate Family Rating
--------------------------------------------------------------
Moody's affirmed the ratings of Merge Healthcare Incorporated,
including the B2 Corporate Family Rating and the B2 Probability of
Default Rating. Moody's also assigned a B2 to the company's
proposed $52 million Senior Notes offering that will be used to
repurchase the outstanding preferred stock instrument. Given the
attributes of the preferred stock instrument, Moody's had been
treating it as 75% debt-like for analytical purposes. The outlook
is stable.
Ratings Assigned:
-- $52 million Senior Notes due 2015, (B2, LGD3, 46%)
Ratings affirmed/ LGD estimates revised:
-- Corporate Family Rating, B2
-- Probability of Default Rating, B2
-- $200 million Senior Notes due 2015, to B2 (LGD3, 46%) from
B2 (LGD3, 45%)
-- Speculative Grade Liquidity Rating of SGL-3
The rating outlook is stable.
RATINGS RATIONALE
The B2 Corporate Family Rating is constrained by Merge's small
absolute size and its position as a relatively niche player in an
industry dominated by large imaging equipment vendors and IT
solutions providers. The ratings are also constrained by the
company's considerable financial leverage and limited track record
of free cash flow generation. In addition, Merge's customers in
the radiology industry continue to face reimbursement cuts and
regulatory scrutiny, which could lead to consolidation and
potential disruption to the customer base.
The ratings are supported by Moody's belief that increased
adoption of medical imaging IT applications will be supported by
accelerated use of electronic medical records (EMR), and the
continued conversion from film to digital imaging. Further, given
the low capital requirements of the business, Moody's expects
Merge should generate solid free cash flow in 2011 and beyond,
despite the proposed refinancing transaction, which will increase
cash interest expense by about $6 million per year.
On June 6, 2011, Merge announced the acquisition of Ophthalmic
Imaging Systems (OIS) for approximately $30.3 million in common
stock to be issued and other anticipated costs related to
outstanding OIS debt, options and warrants. The acquisition will
pose customary integration risks, but will help the company
diversify its areas of medical specialties by adding ophthalmic
imaging and informatics to its current portfolio.
Given Merge's small size and adjusted leverage above 5.0 times,
Moody's does not foresee an upgrade in the near-term. However, if
the company sustains adjusted leverage below 4.0 times and
sustains free cash flow to debt above 15%, Moody's could upgrade
the ratings.
Merge's 2011 guidance is for significantly higher SG&A investment
and lower EBITDA than Moody's had expected at the time of the
original assignment of the B2 rating in 2010. Moody's could
downgrade the ratings if the company's investments in sales,
marketing and R&D do not translate into meaningful revenue growth
by late 2011 or if adjusted leverage is sustained above 5.5 times.
Further, any weakening of the company's liquidity profile, such as
more than two quarters of negative free cash flow or a meaningful
reduction in cash on hand, could lead to a negative outlook or
downgrade.
The principal methodology used in rating Merge Healthcare was the
Global Software Industry Methodology, published May 2009. Other
methodologies used include Loss Given Default for Speculative
Grade Issuers in the US, Canada, and EMEA, published June 2009.
Merge Healthcare Incorporated, (NASDAQ: MRGE; "Merge"),
headquartered in Chicago, IL, develops healthcare information
technology (IT) solutions. The company focuses on solutions that
aid in the incorporation of medical images and diagnostic
information into broader healthcare IT applications and the
interoperability of software solutions. Examples of products and
services include the iConnect image interoperability platform,
Radiology Information Systems (RIS) and Picture Archiving and
Communications Systems (PACS). Merge reported GAAP revenues of
approximately $173 million for the twelve months ended March 31,
2011, including about 11 months of revenue from AMICAS, which was
acquired on April 28, 2010. Merrick Ventures and affiliates
currently own roughly 40% of Merge's common stock.
MESA AIR: Reaches Lease Assumption Settlement With RASPRO Trust
---------------------------------------------------------------
Reorganized Mesa Air Group, Inc. and its affiliated reorganized
debtors and liquidating debtors, and RASPRO Trust 2005 have
stipulated and agreed that, notwithstanding anything to the
contrary in the January 19, 2011 Amended Plan Supplement -- which
provides that the Assumption Obligations arising from the
assumption o the CRJ 900 Aircraft Leases are $0 -- the applicable
Assumption Obligations are $458,494.
The Reorganized Debtors will immediately pay RASPRO $458,494 to
cure all defaults under the CRJ 900 Aircraft Leases existing as of
the Assumption Effective Date pursuant to Section 365(b) of the
Bankruptcy Code.
Upon the Debtors' payment of the amount, the RASPRO Claims will be
deemed withdrawn.
Post-Effective Date Debtors Settle Tax Claims
The Reorganized Debtors, the Liquidating Debtors, and (i) the
Shelby County Trustee and (ii) the Mecklenburg County Tax
Collector have entered into separate post-Effective Date
settlement agreements, with the consent and agreement of the
Post-Effective Date Committee, resolving certain tax claims.
(1) Shelby County
Claim No. 523 was filed against Freedom Airlines, Inc. as a
secured tax claim for 2009 and 2010 personal property taxes.
Claim No. 524 was filed against Mesa Airlines, Inc. as a secured
tax claim for 2009 and 2010 personal property taxes.
The Post-Effective Date Debtors and the Shelby County Trustee
agree that:
* Claim No. 523 will be allowed as a Secured Tax Claim, at
$182,905 for each tax year 2009 and 2010; and
* Claim No. 524 will be allowed as a Secured Tax Claim at
$182,905 for each tax year 2009 and 2010.
For 2009, interest will be paid at the rate of 12% per annum of
the base tax commencing from the Petition Date, and interest will
continue at the rate of 12% per annum of the base tax until the
claims are paid in full. For 2010, interest will be paid at the
rate of 12% per annum of the base tax commencing from March 1,
2010, and interest will continue at the same rate until the
claims are paid in full.
All other amounts asserted by Claim Nos. 523 and 524 are
disallowed.
(2) Mecklenburg County
Claim No. 167 was filed as a secured tax claim for 2009 personal
property taxes and a priority claim for 2008 vehicle property
taxes. Claim No. 1645 was filed for 2010 secured property taxes
and filed as an administrative claim. Claim No. 1646 was filed
as an administrative claim for 2010 unsecured personal property
taxes.
The Post-Effective Date Debtors and the Tax Collector for
Mecklenburg County, North Carolina have agreed that:
* Claim No. 167 will be treated as (i) $910,082, the
principal amount outstanding for 2009 secured personal
property taxes, and $127,479, accrued interest through
May 31, 2011, is allowed as a Secured Tax Claim; (ii)
penalties of $485 will be allowed as a Class 3(e) General
Unsecured Claim against Mesa Airlines; and (iii) vehicle
taxes for 2008 of $292 will be allowed as a Class 3(e)
General Unsecured Claim;
* With respect to Claim No. 1645, $823,972, the principal
amount outstanding for 2010 secured personal property
taxes, and $41,198, accrued interest through May 31, 2011,
is allowed as a Secured Tax Claim;
* Claim No. 1646 will be treated as (i) $3,510 is allowed as
a Priority Tax Claim, and (ii) fees and penalties of $489
will be allowed as a Class 3(e) General Unsecured Claim
against Mesa Airlines; and
* Taxes for 2011 that may be owing to Mecklenburg County
will be paid in the ordinary course of the Post-Effective
Date Debtors' business when liquidated and due under
applicable state law. The Debtors will not be required to
reserve for the payment of 2011 taxes.
Interest will be paid on Claim Nos. 167 and 1645 at the rate of
0.75% per month commencing from the Effective Date. For Claim No.
1646, interest will be paid at the rate of 9% per annum or 0.75%
per month commencing from the Effective Date of the Plan. All
other amounts asserted by the Claims are disallowed.
Each party will be responsible for its own costs and expenses.
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
(Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New
York, listing assets of $976 million against debt totaling
$869 million as of Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on Jan. 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: Delta Air Agrees on Dismissal of Lawsuit
--------------------------------------------------
Delta Air Lines, Inc., on one hand, and Mesa Air Group, Inc., and
Freedom Airlines, Inc., on the other hand, have entered into a
stipulation whereby all claims and counterclaims in the adversary
proceeding filed by Delta may be dismissed with prejudice pursuant
to Rule 7041 of the Federal Rules of Bankruptcy Procedure, with
the claims and counterclaims resolved in Mesa Air Group's
bankruptcy filing.
Each party will bear and pay its own costs and attorney's fees.
To recall, Delta sought from the U.S. Bankruptcy Court for the
Southern District of New York, among other things, (i) a
declaratory judgment in its favor declaring that it has the right
to terminate a certain Delta Connection Agreement, dated May 3,
2005, as a result of Mesa and Freedom's material breaches and that
Delta has the right to seek reimbursement of excess payments to
Freedom, (ii) judgment in its favor for damages incurred as a
result of Mesa and Freedom's breaches of the Agreement, and (iii)
an order that Delta recover from Mesa and Freedom its litigation
expenses.
Mesa and Freedom denied that they have breached the Agreement and
that they had any obligation to cure any alleged breach of the
Agreement. Mesa and Freedom also presented certain counterclaims
against Delta.
Judge Martin Glenn approved the joint stipulation and ordered
that all claims and counterclaims are dismissed with prejudice,
with each party to bear their own costs and attorney's fees. The
Adversary Proceeding is closed.
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
on Jan. 5, 2010 in New York (Bankr. S.D.N.Y. Case No. 10-10018),
listing assets of $976 million against debt totaling $869 million
as of Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on Jan. 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
METROPARK USA: Final Cash Collateral Hearing Set for June 24
------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York, in a second interim order,
authorized Metropark USA, Inc., to use the cash collateral of
Wells Fargo Bank, National Association, as administrative agent
and collateral agent.
Wells Fargo, is successor by merger to Wells Fargo Retail Finance,
LLC.
The Debtor would use the cash collateral to fund the maintenance
of its assets, payment of employees, payroll taxes, inventory
suppliers and other vendors, overhead, lease expenses, and other
expenses necessary for the operation of the Debtor's business.
The Debtor was granted access to the cash collateral until
June 30, 2011, at 5:00 p.m. prevailing eastern time.
A final hearing to consider the Debtor's request for cash
collateral is scheduled for June 24, at 10:00 a.m.
As reported in the Troubled Company Reporter on May 25, as of the
Petition Date, the Debtor owes Wells Fargo:
i) $2,555,353 (inclusive of $618,840.60 of letters of
credit), plus any and all interest, fees and costs, and any
and all other debts or obligations under the Prepetition
Senior Claim Documents; and
ii) $825,000 under the Prepetition Subordinated Credit
Agreement.
As partial adequate protection for any use or diminution in the
value of the Prepetition Senior Secured Parties' interest, the
Debtor will grant replacement liens and additional liens and
security interests, of the highest available priority in and upon
all of the properties and assets of the Debtor.
As additional partial adequate protection, the Debtor will make
these payments to the Prepetition Agent:
a) payment of interest on the first day of each month on the
Prepetition Senior Claim;
b) payment of all proceeds from the Store Closing Sale; and
c) reimbursement to the Prepetition Agent.
The Official Committee of Unsecured Creditors in the Debtor's case
related that it is investigating the validity of the liens of the
senior secured parties and the prepetition subordinated secured
parties, and reserves any and all rights concerning any and all
claims or actions it may have against the secured parties.
About Metropark USA
Metropark USA, Inc. -- http://www.metroparkusa.com/-- is a Los
Angeles retail chain with 70 stores in 21 states. Metropark was
founded in 2004 to capitalize on the large Gen Y segment (the 25-
35 year old customer) in demand for fashion-forward apparel and
accessories. Its headquarters, distribution centers, and e-
commerce site located in Los Angeles, California.
Metropark filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 11-22866) on April 26, 2011. Cathy Hershcopf,
Esq., Jeffrey L. Cohen, Esq., and Alex R. Velinsky, Esq., at
Cooley LLP, in New York, serve as the Debtor's bankruptcy counsel.
CRG Partners Group, LLC, is the Debtor's financial advisor.
The Debtor disclosed total assets of $28,933,805 and total debts
of $28,697,006 as of April 2, 2011.
METROPARK USA: Court OKs Blakeley & Blakeley as Committee Counsel
-----------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York, authorized The Official Committee
of Unsecured Creditors in the Chapter 11 case of Metropark USA,
Inc., to retain Blakeley & Blakeley LLP as its counsel.
B&B is expected to, among other things:
a. appear on behalf of the Committee at all meetings required
under the guidelines of the Office of the United States
Trustee;
b. assist the Committee with respect to the legal ramifications
of any proposed financing or refinancing of real or personal
property; and
c. advise the Committee regarding its rights and duties in
connection with leases and other agreements;
The hourly rates of B&B's personnel are:
Scott E. Blakeley $425
Bradley D. Blakeley $395
Ronald A. Clifford $295
Other Associates $245
Law Clerks $165
Paralegals $165
Messrs. Scott E. Blakeley, Clifford and Mannion will be primarily
advising and representing the Committee.
To the best of the Committee's knowledge, B&B is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
B&B can be reached at:
BLAKELEY & BLAKELEY LLP
100 Park Avenue, Suite 1600
New York, NY 10017
Tel: (212) 984-1033
Fax: (212) 880-6499
About Metropark USA
Metropark USA, Inc. -- http://www.metroparkusa.com/-- is a Los
Angeles retail chain with 70 stores in 21 states. Metropark was
founded in 2004 to capitalize on the large Gen Y segment (the 25-
35 year old customer) in demand for fashion-forward apparel and
accessories. Its headquarters, distribution centers, and e-
commerce site located in Los Angeles, California.
Metropark filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 11-22866) on April 26, 2011. Cathy Hershcopf,
Esq., Jeffrey L. Cohen, Esq., and Alex R. Velinsky, Esq., at
Cooley LLP, in New York, serve as the Debtor's bankruptcy counsel.
CRG Partners Group, LLC, is the Debtor's financial advisor. The
Debtor also tapped Great American Group Real Estate, LLC doing
business as GA Keen Realty Advisors as special real estate
advisor.
The Debtor disclosed total assets of $28,933,805 and total debts
of $28,697,006 as of April 2, 2011.
METROPARK USA: Court Approves CRG Partners as Financial Advisor
---------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York, authorized Metropark USA, Inc., to
employ CRG Partners Group LLC as financial advisor.
CRG is expected to among other things:
a) assist in the evaluation of the Debtor's business and
prospects;
b) assist in the development of financial data and
presentations to the Debtor's board of directors, secured
lender, landlords, various creditors, the Court and other
third parties; and
c) assist with the preparation of necessary schedules, budgets
and Court related reporting.
Craig M. Boucher, a partner at CRG, told the Court that CRG has
provided certain financial advisory services to the Debtor since
April 18, 2011. Prior to the Petition Date, CRG was paid a total
of $161,531 for services provided prepetition. CRG also received
a $139,468 retainer for postpetition services. If there are any
funds remaining from the retainer, these funds will be promptly
returned to the Debtor.
Mr. Boucher related that CRG's fees are based on the hours charged
at its hourly rates which range from $175 - $575 depending on the
staff member assigned to the project.
In addition to the other fees, the Debtor will pay directly or
reimburse CRG for all reasonable out-of-pocket expenses incurred
in connection with its assignments under the Engagement Agreement,
such as travel, lodging, postage, telephone, courier services,
copying, conferences calls, and facsimile charges. The Debtor
will also pay for all legal requirements and actions regarding the
bankruptcy case.
Mr. Boucher assured the Court that CRG is a "disinterested person"
as that term is defined under Section 101(14) of the Bankruptcy
Code.
About Metropark USA
Metropark USA, Inc. -- http://www.metroparkusa.com/-- is a Los
Angeles retail chain with 70 stores in 21 states. Metropark was
founded in 2004 to capitalize on the large Gen Y segment (the 25-
35 year old customer) in demand for fashion-forward apparel and
accessories. Its headquarters, distribution centers, and e-
commerce site located in Los Angeles, California.
Metropark filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 11-22866) on April 26, 2011. Cathy Hershcopf,
Esq., Jeffrey L. Cohen, Esq., and Alex R. Velinsky, Esq., at
Cooley LLP, in New York, serve as the Debtor's bankruptcy counsel.
CRG Partners Group, LLC, is the Debtor's financial advisor.
The Debtor disclosed total assets of $28,933,805 and total debts
of $28,697,006 as of April 2, 2011.
METROPARK USA: Taps Keen Realty as Special Real Estate Advisor
--------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York, authorized Metropark USA, Inc., to
employ Great American Group Real Estate, LLC doing business as
GA Keen Realty Advisors as special real estate advisor.
Keen Realty is expected to, among other things:
a) coordinate with the Debtor the development of due diligence
materials, the cost of which will be Debtor's sole
responsibility;
b) develop, subject to the Debtor's review and approval, a
marketing plan and implement each facet of the marketing
plan; and
c) communicate regularly with all prospects and maintain
records of all communications;
Matthew Bordwin, the managing director of Great American Group,
LLC, the managing member of Keen Realty, told the Court that Keen
Realty's compensation will include a fee in an amount equal to the
greater of (i) 5% of the gross proceeds of the disposition or (ii)
$4,000. All transaction fees will be paid, in full, off the top,
from the transaction proceeds or otherwise, simultaneously with
the closing or other consummation of each transaction.
In addition to the fees, Keen Realty is to be reimbursed for its
reasonable out-of-pocket expenses incurred in connection with its
activities under the retention agreement.
Mr. Borwin related that given the transactional nature of Keen
Realty's engagement, Keen Realty will not be billing the Debtor by
the hour, except in connection with certain litigation support and
time spent as a witness in connection with any contested matter,
if necessary, and will not be keeping records of time spent for
professional services rendered in this Chapter 11 matter.
Mr. Borwin assured the Court that Keen Realty is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Metropark USA
Metropark USA, Inc. -- http://www.metroparkusa.com/-- is a Los
Angeles retail chain with 70 stores in 21 states. Metropark was
founded in 2004 to capitalize on the large Gen Y segment (the 25-
35 year old customer) in demand for fashion-forward apparel and
accessories. Its headquarters, distribution centers, and e-
commerce site located in Los Angeles, California.
Metropark filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 11-22866) on April 26, 2011. Cathy Hershcopf,
Esq., Jeffrey L. Cohen, Esq., and Alex R. Velinsky, Esq., at
Cooley LLP, in New York, serve as the Debtor's bankruptcy counsel.
CRG Partners Group, LLC, is the Debtor's financial advisor.
The Debtor disclosed total assets of $28,933,805 and total debts
of $28,697,006 as of April 2, 2011.
METROPARK USA: Court OKs Adequate Assurance Payment for Utilities
-----------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York, approved Metropark USA, Inc.'s
proposed adequate assurance, resolving any objections by the
utility companies, and prohibiting the utility companies from
altering, refusing, or discontinuing service.
The Court also ordered that the Debtor will reserve $27,000 in the
aggregate and two weeks estimated utility charges for each utility
company as adequate assurance of payment of charges incurred by
the Debtor for utility services provided by the utility companies
after the Petition Date.
The amount may be adjusted by the Debtor to account for the
termination of utility services by the Debtor on account of any
closed business locations and will be replenished to the extent
necessary to equal the Debtor's reasonable estimate of two weeks
of utility companies' charges, both in the aggregate and for each
utility company.
The Court also ordered that in the event a utility company
believes the adequate assurance deposit and the proposed adequate
assurance is insufficient, it may seek additional assurances of
payment in the form of deposits, prepayments or otherwise.
About Metropark USA
Metropark USA, Inc. -- http://www.metroparkusa.com/-- is a Los
Angeles retail chain with 70 stores in 21 states. Metropark was
founded in 2004 to capitalize on the large Gen Y segment (the 25-
35 year old customer) in demand for fashion-forward apparel and
accessories. Its headquarters, distribution centers, and e-
commerce site located in Los Angeles, California.
Metropark filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 11-22866) on April 26, 2011. Cathy Hershcopf,
Esq., Jeffrey L. Cohen, Esq., and Alex R. Velinsky, Esq., at
Cooley LLP, in New York, serve as the Debtor's bankruptcy counsel.
CRG Partners Group, LLC, is the Debtor's financial advisor. The
Debtor also tapped Great American Group Real Estate, LLC doing
business as GA Keen Realty Advisors as special real estate
advisor.
Blakeley & Blakeley LLP represents the Official Committee of
Unsecured Creditors.
The Debtor disclosed total assets of $28,933,805 and total debts
of $28,697,006 as of April 2, 2011.
MMFX CANADIAN: Hires Business Associates International as Advisor
-----------------------------------------------------------------
MMFX Canadian Holdings Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Central District of California for
permission to employ Business Associates International, LLC, as
investment advisor.
BAI will provide investment services in order to assist the
Debtors in the identification and solicitation of a Successful Bid
in connection with the Debtors' Investment Banking Process. BAI
will not conduct its own investment banking process. Its role
will be limited to the introduction of certain investors to the
Debtors. BAI's primary responsibility will be to act as a feeder
for the existing Investment Banking Process, and to draw on its
expertise, connections and experience in order to tap into a sub-
set of investors that may not have been reached by KPMGCF.
BAI's sole form of compensation will be a transaction fee equal to
4% of the Transaction value, subject to these conditions:
1. Introduction by BAI: The bidder under the Transaction is
introduced to the investment in the Debtors by BAI and not
by KPMGCF. If KPMGCF has already reached out to the potential
bidder as part of the Investment Banking Process, then BAI
will not be entitled to any compensation in connection
with such bidder.
2. Minimum Bid: The Transaction provides for payment on or before
Aug. 5, 2011, of cash consideration available for immediate
distribution on account of the DIP Loan, Allowed Administrative
Claims, Allowed Secured Claims, Allowed Priority Tax Claims,
Allowed Priority Non-Tax Claims, Allowed General Unsecured
Claims, and allowed subordinated unsecured claims. These
amounts are currently estimated to total approximately $59
million (though the actual amount may be determined to be
higher or lower), and include these:
a. $45.5 million on account of Fourth Third's Allowed Claim
(the "Fourth Third Discounted Payoff", which represents
an agreed, discounted payoff solely under Scenario A,
provided payment is received in good and sufficient funds
on or before Aug. 5, 2011), plus
b. $8.5 million on account of Investment Funding's Allowed
Claim (the "Investment Funding Discounted Payoff" which
represents an agreed, discounted payoff provided payment
is received in good and sufficient funds on or before
Aug. 5, 2011), plus
c. reimbursement of Fourth Third's and Investment Funding's
reasonable documented expenses incurred directly relating
to pursuit of the Plan up to an aggregate cap of $175,000
(the "Reimbursement Cap"); plus
d. a cash reserve to provide for all Disputed Claims; plus
e. an amount to be determined by the Proponents to allow the
estates to object to Claims and make distributions if the
Successful Overbid does not contemplate confirmation of
the Plan.
The minimum cash component of any bid is currently estimated
as (in millions):
(i) Administrative claims (est.) $1.0
(ii) DIP loan (est.) $1.6
(iii) Fourth Third and Investment Funding claims $54.0
(iv) All other claims (secured/unsecured) (est.) $2.1
3. Qualified Bidder: Any party making a bid must be first
designated as a Qualified Bidder, which determination will be
made in consultation with all Proponents. For purposes of the
Plan or any auction, "Qualified Bidder" shall mean that such
bidder must:
a. be able to demonstrate the financial capacity to consummate
the contemplated transaction on or before Aug. 5, 2011;
b. be reasonably likely, able, and willing to consummate the
transaction on or before Aug. 5, 2011;
c. pay a good faith cash deposit in the form of a cashier's
check or wire transfer in an amount not less than the
greater of $1,000,000 or 2% of the total consideration
offered (upon a Qualified Bidder being declared the
winning and best bid at auction or otherwise, the
Qualified Bidder's deposit shall become non-refundable
and credited toward the purchase price, after which date,
Fourth Third and Investment Funding shall be entitled to
reimbursement of reasonable expenses incurred directly
relating to their pursuit of the Plan up to the
Reimbursement Cap).
4. Other Bid Requirements: In order to be considered, each bid
must:
a. make an irrevocable offer in the form of an executed
agreement;
b. not contain any financing or due diligence contingencies;
c. be a binding and unconditional commitment to close and fund
a transaction by Aug. 5, 2011, subject only to entry of
appropriate orders by the Bankruptcy Court; and
d. be on terms that are consistent with the treatment of
Allowed Administrative Claims, Allowed Secured Claims,
Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims
and Allowed General Unsecured Claims as set for in Plan
Scenario A in the Plan.
5. Selection of Successful Bid: The decision regarding the best
bid will be made by the Debtors in their sole discretion,
provided that no bid may be considered unless (i) it is made
by a Qualified Bidder, (ii) it meets the Minimum Bid and Other
Bid Requirements, and (iii) satisfies the Transaction Fee, and
provided that the Committee, Fourth Third, and Investment
Funding shall retain standing to object to the Successful Bid
on any and all grounds. If the bid of the investor introduced
by BAI does not satisfy both the Minimum Bid and the
Transaction Fee, the estate may not consider such bid as a
Successful Bid, and in such event, BAI shall not be entitled to
any compensation from the estates. If the Committee, Fourth
Third, Investment Funding, or any or all of them, raise an
objection to a Successful Bid, and such objection is the sole
cause of a delay of the consummation of the transaction
outlined by the Successful Bid and such objection is also
ultimately overruled by the Court, then the resultant delay
caused by such objection shall not be considered in determining
whether the timelines set forth in the Plan have been met,
provided, however, the timeline for payment of the Fourth Third
Discounted Payoff and the Investment Funding Discounted Payoff
will not be extended unless Fourth Third and Investment
Funding (and not the Committee) raised the overruled objection
to the Successful Bid.
6. Transaction Fee: In the event a Transaction closes that
satisfies all the foregoing requirements, and satisfies both
the Minimum Bid and the Transaction Fee, and the consideration
for such Transaction is received by the Debtors in immediately
available funds on or before Aug. 5, 2011, then BAI will be
entitled to receive a Transaction Fee calculated as 4% of the
cash proceeds actually paid to the Debtors (or other
consideration satisfactory to BAI provided such consideration
does not exceed 4% of the cash proceeds actually paid to the
Debtors).
The Debtors assure the Court that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
About MMFX
Irvine, California-based MMFX International Holdings, Inc., and
MMFX Canadian Holdings, Inc., filed for Chapter 11 protection
(Bankr. C.D. Calif. Case Nos. 10-10085 and 10-10083) on Jan. 5,
2010. Margaret M. Mann, Esq., at Sheppard Mullin Richter &
Hampton LLP represents the Debtors in their restructuring efforts.
MMFX Int'l and MMFX Canadian estimated assets and debts at $50
million to $100 million as of the Chapter 11 filing.
MONEYGRAM INT'L: Guardian Life Discloses 3.3% Equity Stake
----------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, The Guardian Life Insurance Company of
America and its affiliates disclosed that they beneficially own
13,198,419 shares of common stock of MoneyGram International,
Inc., representing 3.3% of the shares outstanding. A full-text
copy of the regulatory filing is available for free at:
http://is.gd/hlpxRZ
About MoneyGram International
MoneyGram International, Inc. (NYSE: MGI) --
http://www.moneygram.com/-- is a global payment services company.
The Company's major products and services include global money
transfers, money orders and payment processing solutions for
financial institutions and retail customers. MoneyGram is a New
York Stock Exchange-listed company with 203,000 global money
transfer agent locations in 191 countries and territories.
The Company reported net income of $43.80 million on $1.17 billion
of total revenue for the year ended Dec. 31, 2010, compared with a
net loss of $1.91 million on $1.16 billion of total revenue during
the prior year.
The Company's balance sheet at March 31, 2011, showed
$4.97 billion in total assets, $4.90 billion in total liabilities,
$1.03 billion in total mezzanine equity, and a $955.76 million
total stockholders' deficit.
* * *
According to the Troubled Company Reporter on July 1, 2010, Fitch
Ratings has affirmed the Issuer Default Ratings for MoneyGram
International Inc. and MoneyGram Payment Systems Worldwide, Inc.,
at 'B+'. Outlook is stable. Fitch noted that the ratings could
be negatively impacted by further declines in remittance volumes
driven by macro economic factors or decreases in migrant labor
populations worldwide.
MORTGAGES LTD: Greenberg Can't Shake Suit Over Securities Fraud
---------------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that an Arizona
federal judge on Thursday dismissed securities violations claims
against Mortgages Ltd. legal advisors and auditors, but refused to
toss claims against Greenberg Traurig LLP, which represented the
bankrupt mortgage lender, for its alleged role in a $200 million
fraud.
In an order addressing several motions to dismiss, U.S. District
Judge Frederick J. Martone said the plaintiffs had sufficiently
alleged Greenberg Traurig had facilitated the massive Ponzi scheme
run by Mortgages and its collapsed business partner Radical Bunny
LLP.
About Mortgages Ltd.
Mortgages Ltd. was the subject of an involuntary Chapter 7
petition dated June 20, 2008, filed by KGM Builders Inc. -- a
contractor for Grace Communities, a borrower of the company --
in the U.S. Bankruptcy Court for the District of Arizona.
Central & Monroe LLC and Osborn III Partners LLC, divisions of
Grace Communities, sought the appointment of an interim trustee
for Mortgages Ltd. in the Chapter 7 proceeding.
Mortgages Ltd. faced lawsuits filed by Grace Communities and
Rightpath Limited Development Group for its alleged failure to
fully fund loans. Mortgages Ltd. denied the charges.
The Debtor's case was converted to a chapter 11 proceeding on
June 24, 2008 (Bankr. D. Ariz. Case No. 08-07465). Judge Sarah
Sharer Curley presided over the case. Carolyn Johnsen, Esq., and
Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C.,
replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as
counsel to the Debtor. As of Dec. 31, 2007, the Debtor had total
assets of $358,416,681 and total debts of $350,169,423.
Mortgages Ltd. was reorganized pursuant to a plan that was
confirmed by the Bankruptcy Court on March 20, 2009. As part of
the Plan, ML Manager LLC was created to manage and operate the
loans in the portfolio. The original investors for the most part
transferred their interests to 49 separate Loan LLC's. A number
of investors, referred to as "pass through investors" did not
transfer their interests. As part of the Plan, ML Manager took
out $20 million in exit financing to help keep the company afloat
during the reorganization.
MUSCLEPHARM CORPORATION: Posts $5-Mil. First Quarter Net Loss
-------------------------------------------------------------
MusclePharm Corporation filed its quarterly report on Form 10-Q,
reporting a net loss of $5.0 million on $3.5 million of sales for
the three months ended March 31, 2011, compared with a net loss of
$2.6 million on $1.3 million of sales for the same period of 2010.
The Company's balance sheet at March 31, 2011, showed $4.6 million
in total assets, $6.7 million in total liabilities, and a
stockholders' deficit of $2.1 million.
Berman & Company, P.A., in Boca Raton, Florida, expressed
substantial doubt about MusclePharm's ability to continue as a
going concern, following the Company's 2010 results. The
independent auditors noted that the Company had a net loss of
$19.6 million and net cash used in operations of $3.8 million for
the the year ended Dec. 31, 2010; and a working capital deficit
and stockholders' deficit of $2.8 million and $1.7 million,
respectively, at Dec. 31, 2010.
A copy of the Form 10-Q is available at http://is.gd/kbApF7
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100% free of banned substances. MusclePharm is sold in over
120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe. MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.
NEW BERN: Parties Now Have Until June 30 to Object to Plan
----------------------------------------------------------
J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern
District of North Carolina extended until June 30, 2011, the
deadline to file objections to disclosure statement explaining New
Bern Riverfront Development, LLC's proposed plan of
reorganization, and to file written acceptances or rejections to
the plan.
The Court previously granted an April 30, deadline to file
objections to the disclosure statement and to file written
acceptances or rejection to the proposed plan.
The Court will also continue the final approval of the disclosure
statement and the confirmation of the plan to a later date to be
set by the Court.
The Debtor related that the extension will enable it to complete
the discussion with parties on plan related matters. The Debtor
added that it has negotiated a consensual plan of reorganization
with its secured creditor, Wells Fargo Bank, N.A., subject to
certain plan modifications which do not materially impact other
creditors. Other plan modifications are needed in order to
address certain concerns raised by the City of New Bern, which
have not been resolved and are subject of current discussions.
The Plan
As reported in the Troubled Company Reporter on Jan. 17, the
Debtor's plan proposes to pay off more than $27 million in debts.
Under the plan, Wells Fargo Bank is among the first in line to be
repaid, and it claims it is owed about $21 million. The bank is a
Class 1 - secured creditor, listed in order of repayment only
behind administrative claims from attorneys involved in the
proceedings, and claims for unpaid New Bern and Craven County
property taxes totaling $269,002.
Weaver Cooke Construction LLC, the general contractor that oversaw
SkySail's construction starting in 2006, will be paid next after
Wells Fargo. Weaver Cooke claimed it is owed a disputed about
$2.4 million for the condos' design and construction contract.
About New Bern Riverfront
Cary, North Carolina-based New Bern Riverfront Development, LLC,
is the developer of SkySail Condominium, consisting of 121
residential condominiums (plus 1 commercial/non-residential unit)
located on Middle Street on the waterfront in historic downtown
New Bern, North Carolina, and sells the SkySail Condominiums in
the ordinary course of business. The Debtor filed for Chapter 11
bankruptcy protection on Nov. 30, 2009 (Bankr. E.D.N.C. Case No.
09-10340). John A. Northen, Esq., at Northen Blue, LLP,
represents the Debtor. The Company disclosed $31,515,040 in
assets and $25,676,781 in liabilities as of the Chapter 11 filing.
NEW ENGLAND: S&P Affirms 'BB+' Rating; Outlook Positive
-------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to positive
from stable and affirmed its 'BB+' long-term rating on
Massachusetts Development Finance Agency's series 1998 revenue
bonds, issued for New England Center for Children.
"We based the positive outlook on NECC's consistent operating
profits and its improved balance sheet metrics in recent years,"
said Standard & Poor's credit analyst Jennifer Soule. "NECC has
experienced high demand for its services consistently since its
inception and has reported strong financial operating results for
the rating," said Ms. Soule.
According to Standard & Poor's, NECC's liquidity is light for the
current rating as measured by the days-cash-on-hand ratio;
however, the rating agency considers the center's low debt burden
a partly offsetting credit factor. In recent years, NECC has
diversified somewhat from its traditional sources of government
revenue by developing its international business in Abu Dhabi and
by providing consulting services to public schools. However, these
revenues only account for 17% of its total revenue in fiscal 2010.
The 'BB+' rating also reflects Standard & Poor's view of NECC's:
Continued reliance on government funding as a primary revenue
source; and
Management's plan to construct a new $10 million building near
its main campus within three years, which it expects to fund
through a capital campaign.
Standard & Poor's believes the preceding negative credit factors
are somewhat offset by NECC's:
Essentiality of services mandated under federal law, and
Adequate coverage of maximum annual debt service.
The positive outlook reflects Standard & Poor's expectation that
management will meet its 2011 budget and that NECC's liquidity
will continue to improve. Standard & Poor's could consider a
higher rating within the two-year outlook period if NECC continues
to report stable operating profits and improved balance sheet
metrics, including cash growth, and continues reducing long-term
debt. Though not expected, Standard & Poor's could consider a
lower rating within the outlook period if NECC's financial profile
were to deteriorate significantly.
NECC is a not-for-profit human services provider that offers
treatment primarily for children with severe autism and mental
retardation as well as serious behavior disorders.
NEWPAGE CORP: Names Jay Epstein as SVP and CFO
----------------------------------------------
NewPage Corporation announced that Jay A. Epstein will join the
company's senior leadership team, effective July 5, 2011, as
senior vice president and chief financial officer, replacing
Curtis Short who was serving in the role on an interim basis.
Mr. Epstein will be responsible for the management and direction
of the company's finance, accounting, treasury, compliance and
investor relations organization. Reporting to George F. Martin,
president and chief executive officer, Mr. Epstein joins NewPage
with experience in the pulp and paper industry. "We are pleased
to have a finance professional of Jay's caliber join NewPage,"
said Martin. "His experience in the paper industry combined with
his proven fiscal management experience will greatly benefit
NewPage."
Prior to joining NewPage, Mr. Epstein had been vice president
finance, treasurer and secretary of Brant Industries, White Birch
Paper Company and SP Newsprint Company and was chief financial
officer for SP Recycling Company. He was director, Global Risk
Management at National Bank of Canada from 2002 to 2004, and
served in a number of roles at Enron from 1999 to 2002, which
included their pulp and paper business. Prior to Enron, Mr.
Epstein held positions of increasing responsibility in process
engineering, capital and energy management and operations
management at BASF Corporation.
Mr. Epstein earned his bachelor's degree in chemical engineering
from The University of Texas at Austin and a master's degree in
business administration with concentrations in finance and
economics from The University of Chicago.
About NewPage Corp.
Headquartered in Miamisburg, Ohio, NewPage Corporation --
http://www.NewPageCorp.com/-- is a coated paper manufacturer in
North America, based on production capacity, with $3.1 billion in
net sales for the year ended Dec. 31, 2009. The company's
product portfolio is the broadest in North America and includes
coated freesheet, coated groundwood, supercalendered, newsprint
and specialty papers. These papers are used for corporate
collateral, commercial printing, magazines, catalogs, books,
coupons, inserts, newspapers, packaging applications and direct
mail advertising.
NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan,
Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a
total annual production capacity of approximately 4.4 million tons
of paper, including approximately 3.2 million tons of coated
paper, approximately 1.0 million tons of uncoated paper and
approximately 200,000 tons of specialty paper.
The Company reported a net loss of $674 million on $3.59 billion
of net sales for the year ended Dec. 31, 2010, compared with a net
loss of $318 million on $3.10 billion on net sales during the
prior year.
The Company's balance sheet at March 31, 2011, showed
$3.50 billion in total assets, $4.24 billion in total liabilities,
and a $746 million total deficit.
* * *
NewPage carries a 'CCC+' corporate credit rating from, with
negative outlook, from Standard & Poor's. It has 'Caa1' long term
corporate family and probability of default ratings from Moody's.
Standard & Poor's Ratings Services in November 2010 revised its
recovery rating on NewPage Corp.'s senior secured first-lien notes
to '4' from '3'. "S&P believes that a '4' recovery more
appropriately conveys the risk that the company's postdefault
enterprise value may be affected by stresses more severe than what
S&P's analysis contemplates given the highly cyclical industry in
which NewPage operates," said Standard & Poor's credit analyst
Tobias Crabtree.
NORTEL NETWORKS: CAW Proposes Consolidation of Debts & Assets
-------------------------------------------------------------
During argument before Ontario's Commercial Court, the Canadian
Auto Workers union, along with other parties representing Canadian
employees and their benefit and pension plans, took the position
that the only way to appropriately distribute proceeds from the
sale of Nortel's world-wide assets is to share them pro-rata among
the claims of its creditors.
This method of distribution, a form of global substantive
consolidation, reflects the integrated and interdependent nature
of Nortel's world-wide operations before January of 2009, when it
filed for bankruptcy protection in Canada, the United States and
other jurisdictions around the world.
If accepted by the court when a trial is conducted, likely later
this year, pro-rata distribution will result in a fair
distribution of the sale proceeds among all of the creditors and a
just resolution for the employees who have lost their jobs,
retirees facing reductions in their pensions and disabled
employees who have lost the incomes and benefits on which they
depended.
Although Nortel's headquarters was situated in Canada, before its
insolvency it distributed sales proceeds among its global entities
to reduce its overall tax burden, with the effect that most of its
assets were located outside Canada. However, most of Nortel's
debts were either situated in or guaranteed by the Canadian
headquarters. As a result, creditors of Nortel's entities around
the world are not only making claims in their own jurisdiction,
but also against any assets flowing into Canada from the sale of
its global business interests. This, essentially, gives them two
ways of recouping losses; something which the Canadian only
creditors, including those represented by the CAW, do not have.
Pro-rata distribution is not a new concept in insolvency
proceedings. It has been used to deal with similarly integrated
companies in both Canada, the United States, and the UK, and is
proposed as a resolution by major creditors in the U.S.
proceedings involving Lehman Brothers, another globally integrated
company. As such, the proposed pro-rata distribution of Nortel's
assets has a reasonable chance of success, giving not only
fairness, but also justice to those who have suffered most from
Nortel's meltdown.
During the height of Nortel's success in the 1980s, the CAW
represented 5,000 Nortel workers.
About Nortel Networks
Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was
once North America's largest communications equipment provider.
It has sold most of the businesses while in bankruptcy.
Nortel Networks Corp., Nortel Networks Inc., and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List). Ernst & Young was appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.
The Monitor sought recognition of the CCAA Proceedings in the
U.S. by filing a bankruptcy petition under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,
Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney
PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's
counsel.
Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009.
Judge Kevin Gross presides over the case. James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel. The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent. Fred S. Hodara, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, in New York, and
Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, represent the Official Committee of
Unsecured Creditors.
Certain of Nortel's European subsidiaries also made consequential
filings for creditor protection. On May 28, 2009, at the request
of the Administrators, the Commercial Court of Versailles, France
ordered the commencement of secondary proceedings in respect of
Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited
filed petitions in this Court for recognition of the English
Proceedings as foreign main proceedings under chapter 15 of the
Bankruptcy Code.
Nortel Networks divested off key assets while in Chapter 11.
In March 2009, the U.S. Bankruptcy Court entered an order
approving the sale of the Layer 4-7 assets to Radware Ltd. as the
successful bidder at auction. In July 2009, Nortel sold its CDMA
and LTE-related assets to Telefonaktiebolaget LM Ericsson (Publ).
In September 2009, the Court Nortel sold its Enterprise Solutions
business to Avaya Inc. In October 2009, the Court approved the
sale of assets associated with Nortel's Next Generation Packet
Core network components to Hitachi, Ltd. On Dec. 2, 2009, the
Court approved the sale of assets associated with Nortel's
GSM/GSM-R business to Telefonaktiebolaget LM Ericsson (Publ) and
Kapsch Carriercom AG. In December 2009, the Debtors sold their
Metro Ethernet Networks business to Ciena Corporation. In March
2010, Nortel sold its Carrier Voice Over IP and Application
Solutions business to GENBAND Inc. In September 2010, Nortel sold
its Multi-Service Switch business to Ericsson.
Nortel Networks filed a proposed plan of liquidation in the
U.S. Bankruptcy Court. The Plan generally provides for full
payment on secured claims with other distributions going in
accordance with the priorities in bankruptcy law.
NOVADEL PHARMA: Craig Johnson to Resign as SVP, CFO and Secretary
-----------------------------------------------------------------
NovaDel Pharma Inc. announced that Mr. Craig A. Johnson advised
the Company of his resignation as Senior Vice President, Chief
Financial Officer and Secretary effective July 31, 2011. The
Board of Directors has agreed that Steven B. Ratoff, the Company's
President and Chief Executive Officer, will act as Interim Chief
Financial Officer and Secretary until a new Chief Financial
Officer and Secretary is obtained.
Mr. Johnson has served as the Company's Senior Vice President,
Chief Financial Officer and Secretary since June 2010.
"Craig has been a valuable member of NovaDel. His leadership and
his efforts during his tenure with NovaDel made him a very
important part of the executive team," said Mr. Steven B. Ratoff.
"I want to thank him on behalf of the Company for his many
contributions to NovaDel."
About NovaDel Pharma
Bridgewater, N.J.-based NovaDel Pharma Inc. (OTC BB: NVDL)
-- http://www.novadel.com/-- is a specialty pharmaceutical
company that develops oral spray formulations of marketed
pharmaceutical products. The Company's patented oral spray drug
delivery technology seeks to improve the efficacy, safety, patient
compliance, and patient convenience for a broad range of
prescription pharmaceuticals.
The Company's balance sheet at March 31, 2011, showed $2.7 million
in total assets, $9.4 million in total liabilities, and a
stockholders' deficit of $6.7 million.
As reported in the TCR on April 1, 2011, J.H. Cohn LLP, in
Roseland, New Jersey, expressed substantial doubt about Novadel
Pharma's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has suffered recurring losses from operations and negative
cash flows from operating activities.
OPTIONS MEDIA: Posts $845,700 Net Loss in First Quarter
-------------------------------------------------------
Options Media Group Holdings, Inc., filed its quarterly report on
Form 10-Q, reporting a net loss of $845,680 on $324,760 of
revenues for the three months ended March 31, 2011, compared with
a net loss of $582,893 on $126,296 of revenues for the same period
last year.
The Company's balance sheet at March 31, 2011, showed
$2.56 million in total assets, $1.32 million in total liabilities,
all current, and stockholders' equity of $1.24 million.
As reported in the TCR on May 31, 2011, Salberg & Company, P.A.,
in Boca Raton, Florida, expressed substantial doubt about Options
Media Group Holdings' ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has a net loss of $9.86 million, and net
cash used in operations of $2.02 million for the year ended
Dec. 31, 2010, and a working capital deficit and an accumulated
deficit of $524,157, and $22.74 million respectively at Dec. 31,
2010. The independent auditors noted that the Company has also
discontinued certain operations.
A copy of the Form 10-Q is available at http://is.gd/2ExpfB
About Options Media
Boca Raton, Fla.-based Options Media Group Holdings, Inc. has
historically been an Internet marketing company providing e-mail
services to corporate customers. Additionally, it contained a
lead generation business and an SMS text messaging delivery
business. In 2010, the Company transitioned by changing its focus
to smartphones and developing a robust anti-texting program that
prohibits persons in vehicles from texting and e-mailing while
moving. As part of its focus on mobile software applications, the
Company has also broadened its suite of products including
obtaining a license to market mobile anti-virus software. In
conjunction with this change of focus, in February 2011, the
Company sold its e-mail and SMS businesses.
The Company retains its lead generation business. Since the
mobile software business did not generate any material revenue
until March 31, 2011, the revenue consists almost solely of lead
generation revenue. In conjunction with this change of focus, the
Company is in the process of changing its name to PhoneGuard,
Inc., and is currently soliciting consents from its key
shareholders for that purpose.
The Company's remaining business from its original business model
is its lead generation business. The Company offers lead
generation programs to assist a variety of businesses with
customer acquisition for the products and services they are
selling. The Company pre-screens the leads through its online
surveys to meet its clients' exact criteria. Revenue from
generating and selling leads to customers is recognized at the
time of delivery and acceptance by the customer.
OVERLAND STORAGE: Columbus Capital Discloses 7.8% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Columbus Capital Management, LLC, and Matthew
D. Ockner disclosed that they beneficially own 1,804,300 shares of
common stock of Overland Storage, Inc., representing 7.8% of the
shares outstanding. A full-text copy of the filing is available
for free at http://is.gd/WFQtXI
About Overland Storage
San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of unified
data management and data protection solutions designed to enable
small and medium enterprises (SMEs), corporate departments and
small and medium businesses (SMBs) to anticipate and respond to
change.
As reported in the Troubled Company Reporter on Sept. 28, 2010,
Moss Adams LLP, in San Diego, Calif., expressed substantial
doubt about Overland Storage'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.
The Company's balance sheet at March 31, 2011, showed $48.50
million in total assets, $35.89 million in total liabilities and
$12.61 million in total shareholders' equity.
PLATINUM TOO: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Platinum Too, LLC
4236 Mt. Olympus Dr.
Salt Lake City, UT 84124
Bankruptcy Case No.: 11-28352
Chapter 11 Petition Date: June 6, 2011
Court: United States Bankruptcy Court
District of Utah (Salt Lake City)
Judge: William T. Thurman
Debtor's Counsel: Zane S. Froerer, Esq.
FROERER AHLSTROM
2610 Washington Blvd.
Ogden, UT 84401
Tel: (801) 389-1533
Fax: (801) 399-4033
E-mail: zane.froerer@froererlaw.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Bruce J. Mabey, member.
POINT BLANK: Says 'All Alternatives' in Consideration
-----------------------------------------------------
Point Blank Solutions filed with the U.S. Bankruptcy Court a
motion seeking to extend by an additional 127 days the exclusive
period during which the Company can file a Chapter 11 plan and
solicit acceptances thereof through and including Oct. 14, 2011
and Dec. 14, 2011, respectively.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Point Blank is seeking an extension for the fourth
time. A hearing is scheduled for June 29.
In the motion for more exclusivity, Point Blank, according to the
Bloomberg report, said the company, the creditors' committee and
the equity committee "are engaged in ongoing discussions regarding
an appropriate exit strategy, and are considering all
alternatives."
Mr. Rochelle relates that although Point Blank filed an amended
plan and disclosure statement in April, it hasn't been able to go
ahead with the plan-approval process because of disputes with the
official equity holders' committee.
About Point Blank
Headquartered in Pompano Beach, Florida, Point Blank Solutions,
Inc. -- http://www.pointblanksolutionsinc.com/-- designs and
produces body armor systems for the U.S. Military, Government and
law enforcement agencies, as well as select international markets.
The Company maintains facilities in Pompano Beach, Florida, and
Jacksboro, Tennessee.
The Company's former chief executive officer and chief operating
officer were convicted in September 2010 of orchestrating a
$185 million fraud.
Point Blank Solutions, formerly DHB Industries, filed for
Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on
April 14, 2010. Laura Davis Jones, Esq., and Timothy P. Cairns,
Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy
counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky
LLP serves as corporate counsel. T. Scott Avila of CRG Partners
Group LLC is the restructuring officer. Epiq Bankruptcy Solutions
serves as claims and notice agent.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Equity Security
Holders in the case. The Equity Committee has tapped Morrison
Cohen LLP, Baker & McKenzie LLP, and The Bayard, P.A., as its
counsel. Robert M. Hirsh, Esq., and Heike M. Vogel, Esq., at
Arent Fox LLP, serve as counsel to the Creditors Committee, and
Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at Messana
Rosner & Stern LLP, serve as co-counsel.
POWER CONTRACTING: Carlota M. Bohm Names as Chapter 11 Trustee
--------------------------------------------------------------
The Hon. Jeffrey A. Deller of the U.S. Bankruptcy Court for the
Western District of Pennsylvania approved the appointment of
Carlota M. Bohm, Esq., as Chapter 11 trustee in the cases of Power
Contracting, Inc., et al.
Roberta A. DeAngelis, U.S. Trustee for Region 3, consulted with
the counsels of these parties-in-interest regarding the
appointment of the trustee:
David W. Lampl, Esq. -- Fifth Third Bank
Robert O Lampl, Esq. -- Frank Bucci
Donald R. Calaiaro, Esq. -- Gary L. Reinert, Sr.
Mark E. Freedlander, Esq. -- William S. Kaye,
Liquidating Trustee of M&E
Trust
Norman E. Gilkey, Esq. -- Robert Noel, Receiver
Amy M. Tonti, Esq. -- PNC Bank, National
Association
Edward L. Filer, Esq. -- Fifth Third Bank
The U.S. trustee is represented by:
Heather A. Sprague, Esq.
Liberty Center, Suite 970
1001 Liberty Avenue
Pittsburgh, PA 15222
Tel: (412) 644-4756
Fax: (412) 644-4785
E-mail: Heather.Sprague@usdoj.gov
About Power Contracting, Inc.
Wildwood, Pennsylvania-based, Power Contracting, Inc., aka Max &
Erma's Restaurant, Inc. filed for Chapter 11 protection (Bankr.
W.D. Penn. Case No. 11-22841) on May 2, 2011.
Debtor affiliate Gary Reinert, operates several companies in the
construction business and the restaurant business.
Debtor-affiliates also sought Chapter 11 protection on May 2, 2011
(Bankr. W.D. Penn Case Nos. 11-22840 - 11-22846). Calaiaro &
Corbett, P.C. represents the Debtors in their restructuring
efforts. The Debtors estimated assets and debts at $10 million to
$50 million.
POWER CONTRACTING: Ch. 11 Trustee Taps Houston Harbaugh as Counsel
------------------------------------------------------------------
Carlota M. Bohm, the Chapter 11 trustee in the cases of Power
Contracting, Inc., et al., asks the U.S. Bankruptcy Court for the
Western District of Pennsylvania for permission to retain the firm
of Houston Harbaugh, P.C. as its counsel.
The firm will, among other things:
a) give the trustee legal advice with respect to the duties and
powers in the case;
b) assist the trustee in its investigation of the acts,
conduct, assets, liabilities and financial condition of the
Debtors, the operations of the Debtors, and any other matter
relevant to the case or to the liquidation of the assets of
the estate; and
c) participate with the trustee in the formulation of an
analysis of the causes of action available and to pursue
said causes of action.
To the best of the Trustee's knowledge Houston Harbaugh, is a
"disinterested person" as that term is defined in Section 101(14)
of th Bankruptcy Code.
The trustee can be reached at:
Carlota M. Bohm
Three Gateway Center, 22nd Floor
401 Liberty Avenue
Pittsburgh, PA 15222
Tel: (412) 281-5060
The Debtors set a June 28, hearing to consider the trustee's
retention of Houston Harbaugh. Objections, if any, are due
June 21, 2011.
About Power Contracting, Inc.
Wildwood, Pennsylvania-based, Power Contracting, Inc., aka Max &
Erma's Restaurant, Inc. filed for Chapter 11 protection
(Bankr. W.D. Penn. Case No. 11-22841) on May 2, 2011.
Debtor affiliate Gary Reinert, operates several companies in the
construction business and the restaurant business.
Debtor-affiliates also sought Chapter 11 protection on May 2, 2011
(Bankr. W.D. Penn Case Nos. 11-22840 - 11-22846). Calaiaro &
Corbett, P.C. represents the Debtors in their restructuring
efforts. The Debtors estimated assets and debts at $10 million to
$50 million.
PRAGJI LLC: Case Summary & 5 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Pragji, LLC
1007 West Highway 332
Clute, TX 77531
Bankruptcy Case No.: 11-80298
Chapter 11 Petition Date: June 3, 2011
Court: United States Bankruptcy Court
Southern District of Texas (Galveston)
Judge: Letitia Z. Paul
Debtor's Counsel: Barbara Mincey Rogers, Esq.
ROGERS & ANDERSON, PLLC
1415 North Loop West, Suite 1020
Houston, TX 77008
Tel: (713) 868-4411
Fax: (713) 868-4413
E-mail: brogers@ralaw.net
Scheduled Assets: $1,168,520
Scheduled Debts: $2,731,410
A list of the Company's five largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txsb11-80298.pdf
The petition was signed by Pragnesh Prajapati, manager.
PRIME STAR: Hires Capital Accounting and Sam Kan as Accountants
---------------------------------------------------------------
Prime Star Group, Inc., has engaged two accounting firms in an
effort to become fully reporting and compliant with all financial
disclosures. Capital Accounting of Henderson, Nevada will be
responsible for day to day accounting transactions, consolidation
of records for Prime Star subsidiaries, and preparation of
schedules for the auditor. Sam Kan & Company has been engaged to
provide quarterly and year-end filings.
Prime Star Group's President Ed Braniff stated, "It is vitally
important that we provide transparency to our financial
transactions and become fully reporting as soon as possible." He
added, "We are confident that our choices in Capital Accounting
and Sam Kan & Company will help clean up previous financial
reporting issues and future needs effectively and responsibly."
About Prime Star
Las Vegas, Nev.-based Prime Star Group, Inc. is a holding company
that focuses on four areas of business: SmartPax(TM) Packaging,
Premium Food & Beverage Products, Distribution, and Risk
Management. The Company's operating subsidiaries produce, market,
and distribute wines, tea, adult mixed beverages, flavored water,
and gourmet seafood products. The Company also produces co-brand
and co-pack existing high-end beverages and private label liquors
for large hospitality and entertainment brands. Prime Star is
focused on the food and beverage, entertainment, hospitality,
healthcare and disaster relief industries.
The Company reported a net loss of $300,256 on zero revenue for
the nine months ended Sept. 30, 2010, compared with a net loss of
$2.76 million on zero revenue for the year ended Dec. 31, 2009.
The Company's balance sheet at Sept. 30, 2010, showed $781,377 in
total assets, $8.42 million in total liabilities, and a
stockholders' deficit of $7.64 million.
As reported in the Troubled Company Reporter on June 1, 2010,
Gruber & Company, LLC, in Lake Saint Louis, Mo., 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 Dec. 31, 2009. The independent auditors
noted that the Company has a deficit in working capital, a deficit
of retained earnings, and negative stockholders equity.
PROCTOR HOSPITAL: Moody's Affirms 'Ba1' on Outstanding Debt
-----------------------------------------------------------
Proctor Hospital's (IL) $22.5 million of outstanding rated debt,
which was issued through the Illinois Finance Authority. The
rating outlook remains negative.
SUMMARY RATING RATIONALE
The Ba1 rating is based on Proctor's modest market share in
Peoria's highly competitive service area; continually pressured
operating performance; very narrow cash position; and exposure to
the liquidity risks associated with variable rate debt. The
negative outlook reflects Moody's expectation that these pressures
will continue for the foreseeable future, particularly given
Proctor's relatively high dependence on Medicare, a revenue source
which should continue to experience reimbursement reductions from
the federal government.
STRENGTHS
* Relatively high acuity for a small community hospital, as
evidenced by a Medicare case mix index (CMI) of 1.53 in fiscal
year (FY) 2010, due in large part to growth of orthopedic,
cardiac, and interventional radiology services
* New contract with Caterpillar, Inc. (senior unsecured rated
A2/stable outlook) employee HMO and PPO benefit plans is
expected to drive growth in both market share and operating
revenue
* New five-year term loan agreement with Regions Bank (long term
rated Ba1/negative outlook) reduces the near-term letter of
credit (LOC) renewal risk to which the hospital was exposed
during Moody's last review
CHALLENGES
* Highly competitive Peoria market; Proctor's market share
(currently 13%) continues to trail those of St. Francis Hospital
of the OSF Healthcare System (A3/stable outlook) (53% of market
share) and Methodist Hospital (A2/stable outlook) (31% of market
share); Proctor is considerably smaller than its competitors
with $125 million in total revenues (based on FY 2010 audited
financial statements) and inpatient admissions of approximately
7,000
* Relative reliance on Medicare (52% of gross revenues in FY 2010,
compared to a median of 43% for all rated hospitals), which
heightens Proctor's vulnerability to federal reimbursement
reductions in FY 2011 and beyond
* Despite slight improvement in operating margins in FY 2010 (1.4%
operating margin and 8.1% operating cash flow margin), overall
weak performance continues given FY 2011 first quarter results,
which show flat revenue growth and lower margins
* Liquidity remains very narrow, with 76 days cash on hand, 61%
cash to debt, and unrestricted cash of $24 million at fiscal
year end (FYE) 2010
* Five-year $15.5 million privately placed term loan agreement
with Regions Bank is variable rate, which exposes Proctor to
interest rate risk; if minimum debt service coverage and cash
levels are not maintained per loan covenants, Regions could
demand immediate repayment, a term which exposes Proctor to
considerable liquidity risk and could position fixed rate
bondholders with very narrow liquidity following such repayment
* Average of plant (17.9 years) is expected to remain elevated and
nearly double the national median of 10.0 years, as capital
spending has tapered off in recent years to less than 1.0 times,
and future capital investment is expected to remain limited in
the near term
* Defined benefit pension plan, which was frozen in 2008, remains
underfunded: at FYE 2010, plan assets equaled just 74% of the
$57 million projected benefit obligation
DETAILED CREDIT DISCUSSION
LEGAL SECURITY
Debt service on the Series 2006A bonds is secured by a pledge of
unrestricted receivables of the Obligated Group (which consists of
Proctor Health Care Incorporated, Proctor Hospital, and Proctor
Health Care Foundation) and a mortgage on certain real property of
the corporation. Moody's analysis refers to the consolidated
financial statements of Proctor Health Care Inc. and Related
Organizations (the System). The Obligated Group represented 94%
and 89%, respectively, of the system's total assets and operating
revenues in FY 2010.
INTEREST RATE DERIVATIVES: None
RECENT DEVELOPMENTS/RESULTS
The affirmation of Proctor's Ba1 debt rating and maintenance of
the negative outlook reflects Proctor's overall weak financial
performance as a small provider ($125 million in total revenues in
FY 2010) in a competitive service area. While FY 2010 showed some
improvement in operating performance, key indicators remain very
weak. In FY 2010, Proctor posted operating income of $1.3 million
(which followed two consecutive years of operating losses) and
operating cash flow of $10.1 million (which was a 74% increase
from the prior year). Consequently, the operating margin improved
from -1.8% in FY 2009 to 1.4% in FY 2010 (which is still well
below the national median of 2.3 % for all rated hospitals), while
the operating cash flow margin improved from 5.0% to 8.1% (the
national median is 9.0%). Maximum annual debt service (MADS)
coverage improved from 1.2 times to 2.1 times (the national median
is 4.0 times) while debt to cash flow improved from 10.1 to 4.6
times (which is still unfavorable relative to the national median
of 3.6 times). Management attributes the improved financial
performance to volume increases driven by the favorable reputation
of Proctor's emergency department and the expansion of its
orthopedic program.
The hospital is highly dependent on Medicare, which comprised 52%
of gross revenues in FY 2010, compared to the national median of
43% for all rated hospitals. Not-for-profit hospitals have
experienced declines in federal Medicare reimbursement in recent
years and will likely experience continued reductions as health
care reform is implemented over the next decade. Proctor is
implementing various strategies to mitigate declines in Medicare
reimbursement, including streamlining its admissions and discharge
processes in order to reduce the average length of stay. Still,
this relatively high reliance on Medicare exacerbates the already
considerable challenges management faces in its efforts to improve
operating performance.
The rating also incorporates the Peoria (general obligation rated
Aa2/stable outlook) region's economy, which is characterized by
unemployment rates that trend above the state and nation. Although
Peoria's economy has diversified somewhat from a traditionally
industrial-agricultural base, it is still heavily reliant on
industrial manufacturing and Caterpillar, a manufacturer of
construction equipment which employs approximately 16,000 people
locally. Although Caterpillar's local operations are reportedly
stable, the regional economy's relative dependence on a single
employer is a fundamental credit weakness.
Proctor's market position continues to trail those of OSF St.
Francis Hospital (OSF) and Methodist Medical Center (Methodist).
However, Proctor management projects market share will improve due
to a new affiliation with Caterpillar Network Products. For nearly
twenty years, Caterpillar had exclusive HMO and PPO contracts with
OSF. In July 2010, Caterpillar opened its contracts to Proctor,
Methodist, and several other hospitals in Illinois. Proctor
management expects that the three-year contract with Caterpillar
will generate approximately $10 million annually in new operating
revenue. Although Moody's expects Proctor's market share to grow
slightly, Peoria's health care market should remain very
competitive, and as the smallest of the service area's three
healthcare providers, Proctor remains vulnerable to competitive
challenges.
Even with the increased revenue that is expected from the
Caterpillar contract, management projects below average 2.6%
revenue growth in FY 2011 over FY 2010. Given increased
expenditure increases that include a 3% cost of living adjustment
for employees in FY 2011 (which followed a salary freeze in FY
2010), Moody's does not expect Proctor's operating performance to
improve significantly in FY 2011. Unaudited financial statements
for the first quarter of FY 2011 show negative variances compared
to budgeted amounts for the first quarter of FY 2011 and actual
results for the first quarter of FY 2010. Management reports that
the FY 2011 first quarter results reflect $260,000 in unexpected
weather-related expenditures. Proctor has applied for, but has not
yet received, reimbursement from insurance and FEMA for these
costs.
Proctor's liquidity levels remain very low, as reflected in a
modest $24 million unrestricted cash and investments balance at
FYE 2010. While this figure represents an improvement from the
past two fiscal years, it remains well below Proctor's historical
levels. Liquidity measures grew modestly in FY 2010 due to the
aforementioned improvement in operating performance. From FYE 2009
to FYE 2010, days cash on hand increased from 66 days to 76 days
(the national median is 147 days), cash to debt improved from 50%
to 61% (the national median is 102%), and debt to cash flow
decreased from an unfavorably high 10.1 times to 4.6 times (the
national median is 3.6 times). Proctor's assets are allocated
among equities (52%), cash (26%), and fixed income (22%).
Management notes that 100% of cash and investments could be
liquidated within one month.
Although Proctor's cash position improved in FY 2010, it remains
very low, particularly given a debt structure that carries
considerable liquidity risk. In addition to a $1 million line of
credit balance, $666,000 of capital lease obligations, $15.1
million of operating lease obligations, and $14.9 million of
unfunded pension obligations, Proctor's comprehensive debt
consists of two series of outstanding bonds: the rated Series
2006A fixed rate bonds, of which $22.5 million is outstanding, and
the unrated Series 2010 variable rate bonds, of which $15.5
million is outstanding. The Series 2010 bonds were privately
placed with Regions Bank under a term loan agreement of five
years. The Series 2010 bonds carry a variable interest rate of 66%
of LIBOR plus 24.3 basis points and are secured by a revenue and
mortgage pledge on parity with the Series 2006A bonds.
The refunding and new term loan agreement with Regions Bank
somewhat mitigates the renewal risk that had been a key concern
during Moody's previous credit review in March 2010. The 2006B
bonds were originally supported by an LOC with JPMorgan Chase, NA
that was due to expire in May 2011. The LOC was extended and then
replaced in December 2010 by the term loan agreement with Regions
Bank. Per the covenants of the term loan agreement, Proctor must
maintain a minimum MADS coverage of 1.25 times (measured
quarterly), cash to debt of at least 50% (measured quarterly), and
days cash on hand of at least 55 days (through Dec. 31, 2011) and
60 days (after Dec. 31, 2011) (measured semi-annually). Failure to
comply with these covenants would constitute an event of default,
upon which Regions Bank could demand immediate repayment. Although
Proctor's FY 2010 audited financial statements show debt service
coverage and cash levels in excess of the minimum requirements of
the term loan, Proctor has relatively limited headroom below these
covenants. Should Proctor violate these covenants (as it did in
2008 under the LOC with JPMorgan Chase), liquidity, and
consequently credit quality, would likely be severely pressured.
Proctor's debt to capitalization ratio has crept up in recent
years: the FY 2010 ratio of 51% represents an increase from 42%
just five years earlier (the national median is 43%). With an age
of plant of nearly 18 years and a capital spending level of less
than 1.0 times during each of the past two fiscal years, Moody's
believes Proctor will be challenged to maintain its infrastructure
without further depleting its cash and/or significantly increasing
its debt levels. Management reports that capital spending plans
through FY 2013 range from a minimum of approximately $500,000 to
fund urgent projects to a maximum of $7.6 million to fund urgent,
essential, and desired projects. The capital plan is expected to
be supported with cash rather than additional borrowing.
Proctor's defined benefit pension plan remains underfunded. The
funded ratio was 74% at FYE 2010, compared to a projected benefit
obligation of $57 million. Proctor froze its defined benefit
pension plan in 2008, and all new participants are covered by a
defined contribution plan, a change which Moody's believes should
stabilize pension liabilities over the long term.
Outlook
The negative rating outlook reflects Moody's expectation that
Proctor's financial performance will remain pressured,
particularly due to Medicare reimbursement reductions that
exacerbate Proctor's operating challenges. Moody's also believes
that liquidity levels will remain low, and credit quality will
continue to be vulnerable to the risks associated with variable
rate debt, particularly given the limited room under the covenants
detailed in the term loan agreement with Regions Bank.
Furthermore, despite the recent affiliation with Caterpillar
Network Products, Moody's believes Proctor's third place market
position will continue in the highly competitive the Peoria
service area.
What could change the rating - UP
Significant and sustained improvement in operating performance and
cash position; ability to address ongoing capital needs without
adversely affecting balance sheet measures; patient volume growth
that leads to increased market share and operating revenues to
levels consistent with higher rating categories
What could change the rating - DOWN
Further weakening of liquidity and/or operating performance;
failure to maintain minimum debt service coverage and cash levels
called for in the term loan agreement with Regions Bank; decreased
market share that materially affects patient volumes and operating
revenues; inability to offset reductions in Medicare
reimbursement; inability to manage capital needs without
significantly impairing cash and/or debt levels
KEY INDICATORS
Assumptions & Adjustments:
- Based on financial statements of Proctor Health Care
Incorporated and Related Organizations
- First number reflects audit year ended Dec. 31, 2009
- Second number reflects audit year ended Dec. 31, 2010
- Investment returns normalized at 6% unless otherwise noted
* Inpatient admissions: 6,829; 7,023
* Total operating revenues: $116.6 million; $124.7 million
* Moody's adjusted net revenue available for debt service: $5.8
million; $10.5 million
* Total direct debt outstanding: $40.9 million; $39.7 million
* Total comprehensive debt outstanding (includes pension and
operating lease obligations): $67.5 million; $69.7 million
* Maximum annual debt service (MADS): $4.7 million; $4.7 million
* MADS coverage with reported investment income: 1.2 times; 2.1
times
* Moody's adjusted MADS coverage with normalized investment
income: 1.2 times; 2.2 times
* Debt to cash flow: 10.1 times; 4.6 times
* Days cash: 66 days; 76 days
* Cash to debt: 50%; 61%
* Operating margin: -1.8%; 1.4%
* Operating cash flow margin: 5.0%; 8.1%
RATED DEBT (issued through the Illinois Finance Authority)
- Series 2006A Fixed Rate Hospital Revenue Bonds ($22.5 million
outstanding as of Dec. 31, 2010)
CONTACTS
Obligor: Roger Armstrong, Chief Financial Officer, (309) 691-1064;
Stephen Cirone, Director of Finance, (309) 691-1021
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Not-for-Profit
Hospitals and Health Systems published in January 2008.
PUBLIC MEDIA: Four Directors Elected at Annual Meeting
------------------------------------------------------
Public Media Works, Inc., held its Annual Meeting of Stockholders
on June 6, 2011. The Company's stockholders elected each of
Martin W. Greenwald, Edward Frumkes, Joseph Merhi and Bryan
Subotnick to its Board of Directors to hold the office during the
ensuing year or until their respective successors are elected and
qualified. The stockholders approved the Company's 2010 Equity
Incentive Plan, as amended. The Company' stockholders approved an
amendment to the Company's Certificate of Incorporation to change
the Company's corporate name from Public Media Works, Inc., to
Spot Entertainment, Inc. The Company's stockholders approved an
amendment to the Company's Certificate of Incorporation to
increase the total number of shares of stock which the Company has
the authority to issue from 100,000,000 shares to 125,000,000
shares, and authorize a class of blank check preferred stock,
consisting of 25,000,000 authorized shares, which may be issued in
one or more series, with such rights, privileges, preferences and
restrictions as may be fixed by the Company's Board of Directors.
About Public Media Works
Sausalito, Calif.-based Public Media Works, Inc., and its wholly-
owned subsidiary, EntertainmentXpress, Inc., a California
corporation , are engaged in the business of offering self-service
kiosks which deliver DVD movies to consumers.
Public Media Works, Inc., has historically been engaged in the
development, production, marketing and distribution of film, music
and television entertainment titles. The Company has an ownership
interest in several film and television projects, but expects no
revenue from these projects. As of May 4, 2010 with the
acquisition of Entertainment Xpress, Inc., the Company has focused
exclusively on its kiosk business and intends to continue this
focus going forward. In March 2011, the Company installed its
first 25 kiosks under the DBA of "Spot. The difference(TM)".
Anton & Chia, LLP, in Newport Beach, California, expressed
substantial doubt about Pubic Media Works' ability to continue as
a going concern. The independent auditors noted that the Company
has incurred significant recurring net losses and negative cash
flows from operations through Feb. 28, 2011, and it has an
accumulated deficit of $12.83 million as of Feb. 28, 2011.
The Company reported a net loss of $7.68 million on $7,139 of
revenue for the fiscal year ended Feb. 28, 2011, compared with a
net loss of $108,435 on $50,000 of revenue for the fiscal year
ended Feb. 28, 2010.
The Company's balance sheet at Feb. 28, 2011, showed $1.21 million
in total assets, $1.17 million in total liabilities, and
stockholders' equity of $38,595.
QIMONDA AG: Court Okays Committee's $11.7-Mil. Deal with G2
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of the Chapter 11
cases of Qimonda Richmond, LLC, and its debtor affiliates sought
and obtained approval from the U.S. Bankruptcy Court for the
District of Delaware of a settlement agreement and release
judgment between Qimonda North America Corp. and G2 Technology,
Inc.
In May 2009, QNA instituted arbitration by filing its demand for
arbitration with the American Arbitration Association. In the
arbitration, QNA asserted a claim for breach of contract against
G2 in the amount of $8,401,240, together with interest, attorney's
fees, and costs. An arbitration hearing was conducted during
February 2011 before M. Scott Donahey, the duly-appointed
arbitrator. The arbitrator issued and delivered a reasoned award
on April 15, 2011. In the Award, the Arbitrator directed G2 to
pay QNA the sum of $8,401,240 plus simple annual interest at the
rate of 6.25% from November 1, 2008, until paid, plus attorneys'
fees and costs in the amount of $2,564,166. The Arbitrator denied
all of G2's counterclaims.
On May 3, 2011, the Court entered a judgment on the Award
providing, among other things, that QNA will recover from G2 the
sum of $12,271,626 with interest on the unpaid amount at the
annual rate of 6.25% as provided by the Award, commencing on
April 29, 2011. On May 4, 2011, the Court entered an order
confirming the Award.
According to Gregory M. Gordon, Esq., at Jones Day, in Dallas,
Texas, since the entry of the confirmation order, the parties have
engaged in discussions and have negotiated a complete resolution
of the issues relating to G2's satisfaction of the Award and
Judgment.
The settlement provides that G2 will pay the sum of $11,750,000 to
QNA. The Judgment is deemed to be fully satisfied and discharged
and G2, including its present or former parents, subsidiaries,
affiliates, agents, legal representatives, insurers, employees,
officers, directors and shareholders will be released from any
liability for the Judgment, the Court ruled.
About Qimonda AG
Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading
global memory supplier with a diversified DRAM product portfolio.
The Company generated net sales of EUR1.79 billion in financial
year 2008 and had -- prior to its announcement of a repositioning
of its business -- approximately 12,200 employees worldwide, of
which 1,400 were in Munich, 3,200 in Dresden and 2,800 in
Richmond, Va.
Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on January 23, 2009. On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.
Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG. QNA is also the parent company of Qimonda
Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Maris J. Finnegan, Esq.,
at Richards Layton & Finger PA, represent the Debtors.
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed seven creditors to serve on an official committee of
unsecured creditors. Jones Day and Ashby & Geddes represent the
Committee. In its bankruptcy petition, Qimonda Richmond, LLC,
estimated more than US$1 billion in assets and debts. The
information, the Debtors said, was based on Qimonda Richmond's
financial records which are maintained on a consolidated basis
with Qimonda North America Corp.
QIMONDA AG: Court Okays Deal Allowing Google's $1.1MM Claim
-----------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved the settlement between Qimonda
Richmond, LLC, and its debtor affiliates and Google, Inc.
The settlement provides that Google will be deemed to have an
allowed unsecured non-priority claim against QNA in an amount
equal to $1,086,950 and an allowed administrative expense claim
against QNA pursuant to Section 503(b)(1) of the Bankruptcy Code
in an agreed amount equal to $37,500.
Claim Nos. 690 and 1190 filed by Google are deemed to be expunged.
Effective immediately, Google's appeal will be deemed to be
dismissed with prejudice.
About Qimonda AG
Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading
global memory supplier with a diversified DRAM product portfolio.
The Company generated net sales of EUR1.79 billion in financial
year 2008 and had -- prior to its announcement of a repositioning
of its business -- approximately 12,200 employees worldwide, of
which 1,400 were in Munich, 3,200 in Dresden and 2,800 in
Richmond, Va.
Qimonda AG commenced insolvency proceedings in a local court in
Munich, Germany, on January 23, 2009. On June 15, 2009, QAG filed
a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under
Chapter 15 of the U.S. Bankruptcy Code.
Qimonda North America Corp., an indirect and wholly owned
subsidiary of QAG, is the North American sales and marketing
subsidiary of QAG. QNA is also the parent company of Qimonda
Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr.
D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Maris J. Finnegan, Esq.,
at Richards Layton & Finger PA, represent the Debtors.
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed seven creditors to serve on an official committee of
unsecured creditors. Jones Day and Ashby & Geddes represent the
Committee. In its bankruptcy petition, Qimonda Richmond, LLC,
estimated more than US$1 billion in assets and debts. The
information, the Debtors said, was based on Qimonda Richmond's
financial records which are maintained on a consolidated basis
with Qimonda North America Corp.
QWEST COMMUNICATIONS: Qwest Corp. Sells $661.2-Mil. Notes Due 2051
------------------------------------------------------------------
Qwest Corporation, an indirect wholly owned subsidiary of both
CenturyLink, Inc., and CenturyLink's wholly owned subsidiary,
Qwest Communications International Inc., publicly sold
$661,250,000 aggregate principal amount of 7.375% Notes due 2051,
including $86,250,000 principal amount that was sold pursuant an
over-allotment option granted to the underwriters for the
transaction.
The public offering price of the Notes was 100% of the principal
amount. After deducting underwriting discounts and QC's estimated
expenses, QC expects to receive net proceeds from the sale of
approximately $643 million. QC intends to use these net proceeds,
together with borrowings from CenturyLink, to provide the total
amount of funds required to redeem $825 million aggregate
principal amount of QC's 7.875% Notes due 2011, and to pay related
fees and expenses.
The Notes were sold pursuant to an underwriting agreement dated
June 1, 2011, among QC and the underwriters listed therein, and a
related price determination agreement dated June 1, 2011, among
the same parties. The Notes have been registered under the
Securities Act of 1933, as amended, pursuant to an automatic shelf
registration statement on Form S-3.
The Notes were issued pursuant to an indenture dated as of
Oct. 15, 1999, between QC and Bank of New York Trust Company,
National Association (as successor in interest to Bank One Trust
Company, National Association), as heretofore amended and
supplemented, including by the Seventh Supplemental Indenture
between QC and U.S. Bank National Association, as trustee, dated
as of June 8, 2011. The Notes are listed for trading on the New
York Stock Exchange. QC will pay interest on the Notes quarterly
in arrears on March 1, June 1, September 1, and December 1 of each
year, beginning Sept. 1, 2011. QC may redeem the Notes, in whole
or in part, at any time on and after June 1, 2016, at a redemption
price equal to 100% of the principal amount redeemed plus accrued
and unpaid interest to the redemption date. The Notes are QC's
senior unsecured obligations and will rank senior to any of its
future subordinated debt and rank equally in right of payment with
all of its existing and future unsecured and unsubordinated debt.
About Qwest Communications
Based in Denver, Colorado, Qwest Communications (NYSE: Q) --
http://www.qwest.com/-- offers residential customers a new
generation of fiber-optic Internet service, high-speed Internet
solutions, as well as digital home phone, wireless service
available through Verizon Wireless and DIRECTV services. Qwest is
also the choice of 95% of Fortune 500 companies, offering a
full suite of network, data and voice services for small
businesses, large businesses, government agencies and wholesale
customers. Additionally, Qwest participates in Networx, the
largest communications services contract in the world, and is
recognized as a leader in the network services market by leading
technology industry analyst firms.
The Company's balance sheet at March 31, 2011, showed
$16.85 billion in total assets, $18.41 billion in total
liabilities, and a $1.56 billion total stockholders' deficit.
* * *
Qwest carries a 'Ba1' corporate family and probability of default
ratings from Moody's and has 'BB' issuer credit ratings from
Standard & Poor's.
"Our high debt levels pose risks to our viability and may make us
more vulnerable to adverse economic and competitive conditions, as
well as other adverse developments," the Company said in its Form
10-K for the year ended Dec. 31, 2009. At Dec. 31, the Company's
consolidated debt was approximately $14.2 billion. Approximately
$5.8 billion of its debt obligations come due over the next three
years. This amount includes $1.265 billion of our 3.50%
Convertible Senior Notes due 2025, which it may elect to redeem at
any time on or after Nov. 20, 2010 and holders may require the
Company to repurchase for cash on Nov. 15, 2010.
Fitch Ratings is maintaining the Rating Watch Positive on the
'BB' Issuer Default Rating assigned to Qwest Communications
International, Inc. and its subsidiaries. Concurrently, Fitch
has affirmed the 'BBB-' issue rating assigned to Qwest's
$1.035 billion senior secured credit facility and the senior
unsecured debt issued by Qwest Corporation. Approximately
$13.1 billion of debt outstanding as of June 30, 2010, including
$7.9 billion of debt outstanding at QC, is affected by Fitch's
action.
RADIENT PHARMACEUTICALS: Incurs $11.4-Mil. First Quarter Net Loss
-----------------------------------------------------------------
Radient Pharmaceuticals Corporation filed with the U.S. Securities
and Exchange Commission its Quarterly Report on Form 10-Q
reporting a net loss of $11.42 million on $30,655 of net revenues
for the three months ended March 31, 2011, compared with a net
loss of $2.59 million on $36,842 of net revenues for the same
period during the prior year.
The Company's balance sheet at March 31, 2011, showed $5.56
million in total assets, $19.04 million in total liabilities, all
current, and a $13.48 million total stockholders' deficit.
"Radient is now putting into place a focused strategy to build
sales of our IVD cancer diagnostics through multiple channels both
domestically and internationally. Our domestic and international
marketing strategies include seeking key distribution partners, as
well as reaching out to doctors; public and private payers,
including health insurance companies; key opinion leaders; and the
medical and scientific community at large," stated RPC's CEO, Mr.
Douglas MacLellan. "Internationally, we are working with our
current distributors, as well as seeking to expand and fortify our
sales channels with well established, well-funded distributors
that have a successful track record in selling IVD products."
RPC's Quarterly Report on Form 10-Q includes a "going concern"
explanatory disclosure which expresses doubt, based upon current
financial resources, as to whether RPC can meet its continuing
obligations without access to additional working capital. The
Company intends to raise additional capital and pursue expense
reductions to ensure its ongoing financial viability.
RPC's Form 10-K for the fiscal year ended Dec. 31, 2010, included
an audit opinion with a "going concern" explanatory paragraph. As
reported by the TCR on May 31, 2011, KMJ Corbin & Company LLP,
in Costa Mesa, California, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant operating
losses, had negative cash flows from operations in 2010 and 2009,
and has a working capital deficit of approximately $53 million at
Dec. 31, 2010.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/C4DYO6
About Radient Pharmaceuticals
Headquartered in Tustin, Calif., Radient Pharmaceuticals
Corporation -- http://www.Radient-Pharma.com/-- is engaged in the
research, development, manufacturing, sale and marketing of its
ONKO-SURE(TM) a proprietary IVD Cancer Test in the United States,
Canada, China, Chile, Europe, India, Korea, Taiwan, Vietnam and
other markets throughout the world.
Radient said in October 2010 it incurred a trigger event on the
12% Convertible Notes issued in first and second quarter of 2010
due to its failure to have the related registration statement
declared effective by June 1, 2010. The Company filed on Sept. 7,
2010, an Event of Default under those same notes occurred since it
did not hold the related shareholder meeting by Aug. 31, 2010.
The Company reported a net loss of $85.71 million on $231,662 of
net revenues for the year ended Dec. 31, 2010, compared with a net
loss of $16.62 million on $8.62 million of net revenues during the
prior year.
RADLAX GATEWAY: K&L Gates Withdraws as Counsel to Lax Enterprise
----------------------------------------------------------------
The Hon. Bruce W. Black of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Harley J. Goldstein,
Matthew E. McClintock, and the law firm of K&L Gates LLP to
withdraw as counsel to LAX Enterprise, L.P.
K&L Gates determined that LAX Enterprise cannot afford to pay
K&L Gates to continue representing it in connection with the
Bankruptcy Cases, including, without limitation, in connection
with an appeal of the Administrative Expense Order.
K&L Gates noted that on July 20, 2010, K&L Gates filed a motion
for leave to substitute counsel pursuant to which it sought
permission to substitute for LAX Enterprise's prior counsel, Fox,
Hefter, Swibel, Levin & Carroll, LLP. The Court granted the
motion to substitute on July 21, 2010, and K&L Gates became
counsel to LAX Enterprise. On March 10, 2011, the Court entered
an order denying the Administrative Expense Motion. K&L Gates, on
behalf of LAX Enterprise, filed a motion to amend the ruling,
which motion was granted on March 30. On April 13, LAX Enterprise
filed a notice of appeal of the amended administrative expense
order and a statement of issues on appeal and designation of the
record.
K&L Gates can be reached at:
Harley J. Goldstein, Esq.
Matthew E. McClintock, Esq.
K&L GATES LLP
70 W. Madison St., Suite 3100
Chicago, Illinois 60602-4207
Tel: (312) 372-1121
Fax: (312) 827-8000
About RadLAX Gateway Hotel
RadLAX Gateway Hotel LLC owns the Radisson hotel at Los Angeles
International Airport. Affiliate River Road Hotel Partners, LLC,
developed and manage the InterContinental Hotel Chicago O'Hare
located in Rosemont, Illinois. Both are ultimately controlled
owned by Harp Group.
RadLAX Gateway Hotel, LLC, and RadLax Gateway Deck, LLC, filed for
Chapter 11 (Bankr. N.D. Ill. Case No 09-30047) on Aug. 17, 2009,
estimating assets at $50 million to $100 million.
River Road and its affiliates filed for Chapter 11 in Chicago on
August 17, 2009 (Bankr. N.D. Ill. Lead Case No. 09-30029). Based
in Oak Brook, Illinois, River Road estimated assets of as much as
$100 million and debt of as much as $500 million in its Chapter 11
petition.
David M. Neff, Esq., at Perkins Coie LLP, serves as counsel to the
River Road and RadLAX debtors. The two cases, however, are not
jointly administered.
RANCHO MALIBU: Plan Confirmation Hearing Scheduled for June 21
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
will convene a hearing on June 21, 2011, at 10:00 a.m., to
consider the confirmation of the Chapter 11 Liquidating Plan of
Reorganization filed by Rancho Malibu, LLC.
The Debtor is also directed to file ballots, ballot tally, and its
confirmation brief by June 14.
As reported in the Troubled Company Reporter on April 21, 2011,
under the Plan, the Debtor will distribute $125,000 in cash
proceeds, which it received from a Court-approved global
settlement entered with its former secured creditor, East West
Bank. The Plan also provides that, in exchange for the agreement
of REB Malibu, LLC and Manhattan Partners, LLC, to not assert:
(a) administrative priority claims for the amounts advanced to
fund the costs of administering the Debtor's Chapter 11
case, including attorneys' fees and costs of the Debtor's
counsel, which totaled more than $160,000; or
(b) general unsecured claims totaling more than $2,600,000, the
Debtor will assign and transfer to REB and Manhattan
Partners, LLC, the Debtor's two members, all of the
Debtor's right, title and interest in, to and arising out
of all assets of every kind relating directly or indirectly
to the development or land use entitlements related to the
Property formerly owned by the Debtor.
The Property was foreclosed on by EWB in accordance with the RM
Settlement Agreement. If the member claims are allowed and not
waived, the Chapter 11 case will be administratively insolvent and
the general unsecured creditors will not receive a distribution.
Under the Plan, creditors will receive their distributions within
45 days following the effective date of the Plan.
There are no secured claims against the Debtor. Holders of Class
1 General Unsecured Claims are entitled to vote on the Plan and
will receive on a pro rata basis, all funds remaining after
payment of administrative costs. The amount available for
distribution is estimated to be $100,000. Class 2 Interests is
deemed to reject the Plan. The Members' equity interests and all
related rights and duties under the Debtors' Operating Agreement,
as amended, will be terminated.
A full-text copy of Rancho Malibu's Disclosure Statement is
available for free at:
http://bankrupt.com/misc/RanchoMalibu_DS.pdf
About Rancho Malibu, LLC
Malibu, California-based Rancho Malibu, LLC, filed for Chapter 11
protection (Bankr. C.D. Calif. Case No. 10-18138) on July 6, 2010.
Weintraub & Selth, APC, represents the Debtor. The Debtor
estimates assets and debts at $10 million to $50 million.
REALOGY CORP: Bank Debt Trades at 6% Off in Secondary Market
------------------------------------------------------------
Participations in a syndicated loan under which Realogy Corp. is a
borrower traded in the secondary market at 93.75 cents-on-the-
dollar during the week ended Friday, June 10, 2011, a drop of 1.25
percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 300 basis points above LIBOR to borrow
under the facility. The bank loan matures on September 30, 2013,
and carries Moody's B1 rating and Standard & Poor's B- rating.
The loan is one of the biggest gainers and losers among 208 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Realogy Corp.
Realogy Corp. -- http://www.realogy.com/-- a global provider of
real estate and relocation services with a diversified business
model that includes real estate franchising, brokerage, relocation
and title services. Realogy's world-renowned brands and business
units include Better Homes and Gardens Real Estate, CENTURY 21,
Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group,
ERA, Sotheby's International Realty, NRT LLC, Cartus and Title
Resource Group. Collectively, Realogy's franchise systems have
around 15,000 offices and 270,000 sales associates doing business
in 92 countries around the world.
Headquartered in Parsippany, N.J., Realogy is owned by affiliates
of Apollo Management, L.P., a leading private equity and capital
markets investor. Realogy fully supports the principles of the
Fair Housing Act.
The Company's balance sheet at March 31, 2011 showed $7.91 billion
in total assets, $9.21 billion in total liabilities, and a $1.30
billion total deficit.
Realogy has 'Caa2' corporate family rating and 'Caa3' probability
of default rating, with positive outlook, from Moody's. The
rating outlook is positive. Moody's said in January 2011 that the
'Caa2' CFR and 'Caa3' PDR reflects very high leverage, negative
free cash flow and uncertainty regarding the timing and strength
of a recovery of the residential housing market in the US.
Moody's expects Debt to EBITDA of about 14 times for the 2010
calendar year. Despite the recently completed and proposed
improvements to the debt maturity profile, the Caa2 CFR continues
to reflect Moody's view that current debt levels are unsustainable
and that a substantial reduction in debt levels will be required
to stabilize the capital structure.
In February, Standard & Poor's Ratings Services raised its
corporate credit rating on Realogy Corp. to 'CCC' from 'CC'. The
rating outlook is positive.
REALOGY CORP: Bank Debt Trades at 8% Off in Secondary Market
------------------------------------------------------------
Participations in a syndicated loan under which Realogy Corp. is a
borrower traded in the secondary market at 91.57 cents-on-the-
dollar during the week ended Friday, June 10, 2011, a drop of 1.29
percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 425 basis points above LIBOR to borrow
under the facility. The bank loan matures on October 10, 2016,
and carries Moody's 'B1' rating and Standard & Poor's 'B-' rating.
The loan is one of the biggest gainers and losers among 208 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About Realogy Corp.
Realogy Corp. -- http://www.realogy.com/-- a global provider of
real estate and relocation services with a diversified business
model that includes real estate franchising, brokerage, relocation
and title services. Realogy's world-renowned brands and business
units include Better Homes and Gardens Real Estate, CENTURY 21,
Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group,
ERA, Sotheby's International Realty, NRT LLC, Cartus and Title
Resource Group. Collectively, Realogy's franchise systems have
around 15,000 offices and 270,000 sales associates doing business
in 92 countries around the world.
Headquartered in Parsippany, N.J., Realogy is owned by affiliates
of Apollo Management, L.P., a leading private equity and capital
markets investor. Realogy fully supports the principles of the
Fair Housing Act.
The Company's balance sheet at March 31, 2011 showed $7.91 billion
in total assets, $9.21 billion in total liabilities, and a $1.30
billion total deficit.
Realogy has 'Caa2' corporate family rating and 'Caa3' probability
of default rating, with positive outlook, from Moody's. The
rating outlook is positive. Moody's said in January 2011 that the
'Caa2' CFR and 'Caa3' PDR reflects very high leverage, negative
free cash flow and uncertainty regarding the timing and strength
of a recovery of the residential housing market in the US.
Moody's expects Debt to EBITDA of about 14 times for the 2010
calendar year. Despite the recently completed and proposed
improvements to the debt maturity profile, the Caa2 CFR continues
to reflect Moody's view that current debt levels are unsustainable
and that a substantial reduction in debt levels will be required
to stabilize the capital structure.
In February, Standard & Poor's Ratings Services raised its
corporate credit rating on Realogy Corp. to 'CCC' from 'CC'. The
rating outlook is positive.
ROBB & STUCKY: John Emmanuel OK'd as Consumer Privacy Ombudsman
---------------------------------------------------------------
The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the
District of Florida approved the appointment of John D. Emmanuel
as consumer privacy ombudsman in the Chapter 11 case of Robb &
Stucky Limited LLLP.
May 10, 2011, the Court approved the form of the asset purchase
agreement, and directed the U.S. Trustee to appoint a consumer
privacy ombudsman. The Debtor sought to sell certain intellectual
property including URLs/Domain Names, 800 Numbers, IT Equipment
and Licenses, Software Licenses, Customer Data, and Miscellaneous
items, to the Lubner Family Partnership for $125,000, subject to
bigger and better offers.
Donald F. Walton, the U.S. Trustee for Region 21, assured the
Court that Mr. Emmanuel holds no interest adverse to the estate,
has no connections to the Debtor, creditors, any other party in
interest, and that his appointment would be in the best interest
of the estate.
Mr. Emmanuel can be reached at 501 East Kennedy Blvd., Suite 1700
Tampa, Florida.
The U.S. Trustee is represented by:
Theresa M. Boatner, Esq.
501 E. Polk St., Suite 1200
Tampa, FL 33602
Tel: (813) 228-2000
About Robb & Stucky
Sarasota, Florida-based Robb & Stucky Limited LLLP -- dba Robb &
Stucky; Robb & Stucky Interiors; Fine Design Interiors, a division
of Robb & Stucky; Robb & Stucky Patio; R&S Home of Fine
Decorators; and Home of Fine Design by Robb & Stucky -- is a
retailer of upscale, high-end, interior-design-driven home
furnishings in the U.S. It filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Case No. 11-02801) on Feb. 18, 2011.
Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman
PA, serve as the Debtor's bankruptcy counsel. FTI Consulting,
Inc., is the Debtor's advisor and Kevin Regan is the Debtor's
chief restructuring officer. Bayshore Partners, LLC, is the
Debtor's investment banker. AlixPartners, LLP, serves as the
Debtor's communications consultants. Epiq Bankruptcy Solutions,
LLC, serves as the Debtor's claims and notice agent. The Debtor
also tapped David L. Schultz and the firm of LarsonAllen, LLP, as
its external accountant; Great American Group Real Estate, LLC,
doing business as GA Keen Realty Advisors as its real estate
advisor; and Streambank, LLC, as its exclusive agent to market and
sell its intellectual property assets.
In its schedules, the Debtor disclosed $77,705,081 in assets and
$91,859,125 in liabilities as of the Chapter 11 filing.
Donald F. Walton, U.S. Trustee for Region 21, appointed the
Official Committee of Unsecured Creditors in the Debtor's case.
The Committee tapped Cooley LLP as its lead counsel; Broad and
Cassel as its local bankruptcy counsel; and BDO USA LLP as its
financial advisor.
ROBB & STUCKY: Court Approves Keen Realty as Real Estate Advisor
----------------------------------------------------------------
The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the
District of Florida authorized Robb & Stucky Limited LLLP, to
employ Great American Group Real Estate, LLC, doing business as GA
Keen Realty Advisors, the real estate division of Great American
Group Real Estate, LLC, as the Debtor's real estate advisor with
respect to certain parcels of owned and leased real property.
As reported in the Troubled Company Reporter on May 4, 2011, as
real estate advisor, GA Keen is expected to, among other things:
(a) review pertinent documents and will consult with the
Debtor's counsel, as appropriate;
(b) coordinate with the Debtor the development of due
diligence materials, the cost of which will be the
Debtor's sole responsibility; and
(c) develop, subject to the Debtor's review and approval, a
marketing plan and implement each facet of the marketing
plan.
Under the Retention Agreement, GA Keen will have the sole and
exclusive authority to offer designation properties for
disposition on an "exclusive right to sell" basis. The Debtor may
designate additional Properties, upon the same terms and
conditions, without further application to the Court. The Debtor
will retain the sole discretion to accept or reject any proposal.
The Retention Agreement contains standard indemnification
provisions with respect to GA Keen's services, including an
agreement by the Debtor to indemnify GA Keen, its affiliates and
and agents from and against all claims, liabilities, losses,
expenses, and actual damages arising out of or in connection with
the engagement of GA Keen that is the subject of the Retention
Agreement.
Pursuant to the terms and conditions of the Retention Agreement,
GA Keen will be compensated according to this fee structure:
-- Advisory and Consulting Fee: For the review of documents
and preparation of the marketing plan and budget, the
Debtor will pay to GA Keen an up-front fee of $30,000, to
be paid within three business days of a Court order
approving the Retention Agreement. That fee will become
earned and non-refundable simultaneously with the Debtor
and GA Keen receiving a bona fide offer for the purchase of
the Bonita Springs, FL owned property. If the Bonita
Springs, FL owned property is sold to the mortgage holder
by way of a sale, auction, credit-bid or by any other
means, GA Keen will still have earned the Advisory and
Consulting Fee;
-- Transactional Fee - Owned Properties: As and when the
Debtor closes a transaction, whether the transaction is
completed individually or as part of a package or as part
of the disposition of the Debtor's business or as part of a
plan of reorganization, then, with respect to the sale of
an owned Property, GA Keen will be paid 4% of "Gross
Proceeds" from the Transaction. If the buyer of the
property is represented by a broker, then the Debtor will
pay an additional 1% to the third party broker;
-- Transactional Fee - Lease Dispositions: As and when the
Debtor closes a Transaction, then, for each closing of a
transaction in which any Lease is assigned or otherwise
transferred to a third party, including lease termination
transactions with landlords and the sale of so-called
"Designation Rights," GA Keen will earn a fee equal to the
greater of:
* 4% of the Gross Proceeds of the disposition;
* $4,500; or
* 10% of the dividend that would have been payable to the
landlord in the Debtor's bankruptcy case if the Lease had
been rejected; and
-- Reduction in Bankruptcy Claims:
* For any Lease assumed and assigned by the Debtor, if the
amount required to be paid to the landlord to cure
defaults existing at the time of assumption is reduced
below the cure amount that the Debtor reasonably
acknowledges is owing, GA Keen will receive a fee for the
waiver or reduction of the cure amount equal to 4% of the
total amount so reduced or waived; and
* For any Lease rejected by the Debtor, if the landlord
agrees to release, reduce or waive the claim it could
reasonably assert under Section 502(b)(6) of the
Bankruptcy Code or otherwise, GA Keen will receive a fee
equal to the greater of $4,000 or 10% of the dividend
that otherwise would have been payable to the landlord in
the Debtor's bankruptcy.
All fees will be paid, in full, off the top, from the proceeds of
sale or otherwise, simultaneously with the closing or other
consummation of each Transaction. GA Keen also will be entitled
to reimbursement by the Debtor of its reasonable out of pocket
costs and expenses incurred in connection with the provision of
services under the Retention Agreement.
Matthew Bordwin, a managing director of GA Keen, attested that GA
Keen is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
About Robb & Stucky
Sarasota, Florida-based Robb & Stucky Limited LLLP -- dba Robb &
Stucky; Robb & Stucky Interiors; Fine Design Interiors, a division
of Robb & Stucky; Robb & Stucky Patio; R&S Home of Fine
Decorators; and Home of Fine Design by Robb & Stucky -- is a
retailer of upscale, high-end, interior-design-driven home
furnishings in the U.S. It filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Case No. 11-02801) on Feb. 18, 2011.
Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman
PA, serve as the Debtor's bankruptcy counsel. FTI Consulting,
Inc., is the Debtor's advisor and Kevin Regan is the Debtor's
chief restructuring officer. Bayshore Partners, LLC, is the
Debtor's investment banker. AlixPartners, LLP, serves as the
Debtor's communications consultants. Epiq Bankruptcy Solutions,
LLC, serves as the Debtor's claims and notice agent. The Debtor
also tapped David L. Schultz and the firm of LarsonAllen, LLP, as
its external accountant; Great American Group Real Estate, LLC,
doing business as GA Keen Realty Advisors as its real estate
advisor; and Streambank, LLC, as its exclusive agent to market and
sell its intellectual property assets.
In its schedules, the Debtor disclosed $77,705,081 in assets and
$91,859,125 in liabilities as of the Chapter 11 filing.
Donald F. Walton, U.S. Trustee for Region 21, appointed the
Official Committee of Unsecured Creditors in the Debtor's case.
The Committee tapped Cooley LLP as its lead counsel; Broad and
Cassel as its local bankruptcy counsel; and BDO USA LLP as its
financial advisor.
ROBB & STUCKY: Court OKs Streambank to Market and Sell IP Assets
----------------------------------------------------------------
The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the
District of Florida authorized Robb & Stucky Limited LLLP, to
employ Streambank, LLC, as its exclusive agent to market and sell
its intellectual property assets.
The assets include all of the trademarks, trade names, copyrights,
domain names, URLs, telephone numbers, customer data, sourcing and
other data, designs and drawings.
As reported in the Troubled Company Reporter on May 4, 2011, as
agent, Streambank is expected to, among other things:
-- work with the Debtor and its advisors to collect and secure
all of the available information and other data concerning
the Intellectual Property;
-- prepare marketing materials designed to advertise the
availability of the Intellectual Property for assignment
and will develop and execute a sales and marketing program
designed to elicit proposals to acquire the Intellectual
Property from qualified assignees; and
-- assist the Debtor in connection with the transfer of the
Intellectual Property to buyer or buyers, who offer the
highest consideration for the assets.
For its efforts, Streambank will be compensated based on this
commission structure:
(a) A management fee for $10,000;
(b) Streambank will be paid a commission equal to 10% of the
first $100,000 of aggregate gross proceeds generated from
the sale or other assignment of the Intellectual Property
for which the management fee will be applied as a credit,
and a commission of 25% for any gross proceeds in excess
of $100,000. In the event that the eventual acquirer of
the Intellectual Property is Clive Lubner or any of his
affiliates, Streambank will only be entitled to a
commission to the extent of any increase in the purchase
price for the Intellectual Property from Mr. Lubner's
initial bid. In that case Streambank's compensation will
be the management fee plus 25% of the difference between
the initial bid and the final purchase price; and
(c) Any commissions due Streambank will be paid in full
immediately upon consummation of any transaction or
transactions involving the sale or other assignment of the
Intellectual Property from the proceeds of the
transactions notwithstanding any liens or other
attachments on the Intellectual Property or the gross
proceeds thereof.
Streambank also will be entitled to reimbursement by the Debtor of
its reasonable out of pocket expenses incurred in connection with
the provision of services under the Engagement Letter up to a
maximum aggregate amount of $5,000.
The Debtor submitted that the Fee Structure is consistent with and
typical of Streambank's normal and customary billing practices for
comparable services in like-sized and similarly complex cases,
both in and out of bankruptcy.
David Peress, a principal of Streambank, assured the Court that
his firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code.
About Robb & Stucky
Sarasota, Florida-based Robb & Stucky Limited LLLP -- dba Robb &
Stucky; Robb & Stucky Interiors; Fine Design Interiors, a division
of Robb & Stucky; Robb & Stucky Patio; R&S Home of Fine
Decorators; and Home of Fine Design by Robb & Stucky -- is a
retailer of upscale, high-end, interior-design-driven home
furnishings in the U.S. It filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Case No. 11-02801) on Feb. 18, 2011.
Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman
PA, serve as the Debtor's bankruptcy counsel. FTI Consulting,
Inc., is the Debtor's advisor and Kevin Regan is the Debtor's
chief restructuring officer. Bayshore Partners, LLC, is the
Debtor's investment banker. AlixPartners, LLP, serves as the
Debtor's communications consultants. Epiq Bankruptcy Solutions,
LLC, serves as the Debtor's claims and notice agent. The Debtor
also tapped David L. Schultz and the firm of LarsonAllen, LLP, as
its external accountant; Great American Group Real Estate, LLC,
doing business as GA Keen Realty Advisors as its real estate
advisor; and Streambank, LLC, as its exclusive agent to market and
sell its intellectual property assets.
In its schedules, the Debtor disclosed $77,705,081 in assets and
$91,859,125 in liabilities as of the Chapter 11 filing.
Donald F. Walton, U.S. Trustee for Region 21, appointed the
Official Committee of Unsecured Creditors in the Debtor's case.
The Committee tapped Cooley LLP as its lead counsel; Broad and
Cassel as its local bankruptcy counsel; and BDO USA LLP as its
financial advisor.
SBARRO INC: Committee Can Hire Ottenbourg Steindler as Counsel
--------------------------------------------------------------
The Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for
the Southern District of New York authorized the Official
Committee of Unsecured Creditors in the Chapter 11 cases of Sbarro
Inc., et al., to retain Ottenbourg, Steindler, Houston & Rosen,
P.C. as its counsel.
As reported in the Troubled Company Reporter on May 16, 2011,
The firm will be representing the Committee in the Debtors'
bankruptcy proceedings.
The hourly rates of the firm's personnel are:
Partner/Counsel $570 - $895
Associate $245 - $595
Paralegal $205 - $230
To the best of the Committee's knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Sbarro, Inc.
The Sbarro family started its business after moving to Brooklyn,
New York, from Naples, Italy, in 1956. Today Sbarro is a leading,
global Italian quick service restaurant concept with approximately
5,170 employees, 1,045 restaurants throughout 42 countries, and
annual revenues in excess of $300 million.
Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr.
S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million
in debt. Sbarro disclosed assets of $471 million and debt of
$486.6 million as of the Chapter 11 filing. In its schedules, the
Debtor disclosed $51,537,899 in assets and $460,975,646 in
liabilities.
Sbarro said it has reached an agreement with all of its second-
lien secured lenders and 70% of its senior noteholders on the
terms of a reorganization plan that will eliminate more than half
of the Company's total indebtedness.
Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland &
Ellis, LLP, serve as the Debtors' general bankruptcy counsel. The
Debtor also tapped Steinberg Fineo Berger & Fischoff as special
counsel, and Cadwalader Wickersham & Taft as counsel to the
restructuring committee of Sbarro's board of directors.
Rothschild, Inc., is the Debtors' investment banker and financial
advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy
consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors'
special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle
LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy
Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen &
Co. is the Debtors' communications advisor.
Ottenbourg, Steindler, Houston & Rosen, P.C. represents the
Official Committee of unsecured Creditors. The Committee tapped
Mesirow Financial Consulting LLC as its financial advisor,
SEITEL INC: S&P Affirms 'B-' Rating on $400-Mil. Senior Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' (same as the
corporate credit rating) issue-level rating on Houston-based
oilfield services company Seitel Inc.'s $400 million senior notes
due 2014. At the same time, Standard & Poor's revised the recovery
rating to '3' from '4'. The '3' recovery rating indicates the
expectation of a meaningful (50% to 70%) recovery for lenders in
the event of default.
The company recently issued $125 million in equity, which it plans
to use to redeem $125 million of its $400 million 9.75% senior
unsecured notes due 2014. Seitel also recently replaced the
secured credit facility at its Canadian subsidiary with a new $30
million secured revolver.
The ratings on Houston-based Seitel Inc. reflect the continued
recovery of the North American oilfield service market, along with
the company's recently improved liquidity position and debt
leverage measures. Seitel's cash EBITDA increased from just over
$24 million in the second half of 2009, to more than $75 million
in the second half of 2010 (and $22 million in the first quarter
of 2011), largely as a result of the increasing North American rig
count (primarily oil rigs). The improved financial performance has
enhanced the company's liquidity position such that cash balance
as of March 31, 2011, was $68 million, versus $26 million at the
end of 2009. Credit measures have also strengthened. Based on last
12 months cash EBITDA and pro forma for the planned debt
redemption, adjusted debt to cash EBITDA was 2.3x and interest
coverage would have been 4.5x at the end of March 2011 (compared
with 12.8x and 0.8x at year-end 2009).
Ratings List
Seitel Inc.
Corporate credit rating B-/Stable/--
Recovery Rating Revised
To From
$400 mil sr unsecured notes B- B-
Recovery rating 3 4
SIGNATURE STYLES: Gets $1.2 Million Interim Loan Approval
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Signature Styles LLC on June 8 received interim
approval for $1.2 million in financing. At the final financing
hearing on June 30, the company will be angling for a $7 million
loan.
About Signature Styles
Signature Styles LLC, owner of the Spiegel catalog, filed a
Chapter 11 petition (Bankr. D. Del. Case No. 11-11733) on June 6,
2011, along with a deal to sell the business to affiliates of the
current owners and lenders.
New York-based Signature Styles, which filed for bankruptcy
together with its affiliates, disclosed assets of $48.6 million
and debt of $867.6 million. It purchased the Spiegel business for
$21.7 million at a foreclosure sale in June 2009. Debt includes
$37.2 million owing on a secured term loan and revolving credit.
Unsecured debt totals $35.3 million, which include $9.8 million
owing to trade suppliers and $23.2 million in customer
obligations. The lenders and owners are funds affiliated with
Patriarch Partners LLC.
Christopher A. Ward, Esq., at Polsinelli Shughart PC, in
Wilmington, Delaware, serves as counsel to the Debtor. Western
Reserve Partners LLC serves as investment bankers. Epiq Bankruptcy
Solutions, LLC, is the claims and notice agent.
A fund affiliated with Patriarch Partners LLC has an agreement to
buy the business in return for the assumption of specified debt,
including $30 million owing on the term loan and revolving credit.
The buyer also will honor some customer obligations. The
stalking-horse purchase agreement requires approval of bidding
procedures by July 7 and approval of a sale by Aug. 4.
SIGNATURE STYLES: Gets $1.2 Million Interim Loan Approval
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Signature Styles LLC on June 8 received interim
approval for $1.2 million in financing. At the final financing
hearing on June 30, the company will be angling for a $7 million
loan.
About Signature Styles
Signature Styles LLC, owner of the Spiegel catalog, filed a
Chapter 11 petition (Bankr. D. Del. Case No. 11-11733) on June 6,
2011, along with a deal to sell the business to affiliates of the
current owners and lenders.
New York-based Signature Styles, which filed for bankruptcy
together with its affiliates, disclosed assets of $48.6 million
and debt of $867.6 million. It purchased the Spiegel business for
$21.7 million at a foreclosure sale in June 2009. Debt includes
$37.2 million owing on a secured term loan and revolving credit.
Unsecured debt totals $35.3 million, which include $9.8 million
owing to trade suppliers and $23.2 million in customer
obligations. The lenders and owners are funds affiliated with
Patriarch Partners LLC.
Christopher A. Ward, Esq., at Polsinelli Shughart PC, in
Wilmington, Delaware, serves as counsel to the Debtor. Western
Reserve Partners LLC serves as investment bankers. Epiq Bankruptcy
Solutions, LLC, is the claims and notice agent.
A fund affiliated with Patriarch Partners LLC has an agreement to
buy the business in return for the assumption of specified debt,
including $30 million owing on the term loan and revolving credit.
The buyer also will honor some customer obligations. The
stalking-horse purchase agreement requires approval of bidding
procedures by July 7 and approval of a sale by Aug. 4.
SINOBIOMED INC: Inks Non-Exclusive Licensing Agreement with Sitoa
-----------------------------------------------------------------
Sinobiomed Inc. announced a shift in its corporate focus to enter
the social e-commerce and online retailing media market space,
through its entry into a non-exclusive licensing agreement with
Sitoa Corporation.
The Licensing Agreement grants the Company a worldwide license to
deploy, utilize, and market Sitoa network and platform software
technology in exchange for shares of the Company's common stock.
The Company expects that it will be able to use the Technology to
build and manage leading online marketplaces that effectively join
consumer communities with online retailers that cater to their
interests. The Technology provides an easy-to-use and
comprehensive platform and infrastructure that enables online
retailers to deploy social marketplace e-commerce sites around
consumer communities that are interested in what such retailers
have to offer, and to expand their sales channels without the
risks of focus dilution or increased capital and operating costs
that typically accompany significant growth campaigns. The
Company expects to charge one-time integration and hosting fees
for each such online market site, as well as share in the revenues
generated by such site.
"We are excited about our prospects moving forward with this
world-class technology that has a proven 10 year track record of
increasing online e-commerce sales," commented George Yu, the
Company's Chief Executive Officer. "We believe that the Sitoa
marketplace platform is a critical building block to the next
stage of e-commerce - the social e-commerce marketplace."
In connection with the Company's shift in focus, the Company plans
to change its name to Sitoa Global Inc., effective upon the filing
of a Certificate of Amendment with the Secretary of State of the
State of Delaware following the expiration of the 20-day period
mandated by Rule 14c of the Securities Exchange Act of 1934. In
anticipation of the name change, the Company's common stock will
be quoted under the symbol "STOA," effective as of June 8, 2011.
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.
The Company reported a net loss of US$577,531 on US$0 of revenue
for the year ended Dec. 31, 2010, compared with net income of
US$3.63 million on US$0 of revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed $50,135 in
total assets, 558,156 in total liabilities and a $508,021 total
stockholders' deficit.
The Company currently has no operations and no source of income.
The Company intends to seek out opportunities to enter or acquire
new business operations. The underlying value of the company is
entirely dependent on the ability of the Company to find and
implement a new business opportunity and obtain the necessary
financing to capitalize on such opportunity.
Schumacher & Associates, Inc., in Littleton, Colorado, noted that
the Company has experienced losses since commencement of
operations, and has negative working capital and stockholders'
deficit which raise substantial doubt about its ability to
continue as a going concern.
This concludes the Troubled Company Reporter's coverage of
Sinobiomed Inc. until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.
SMART-TEK SOLUTIONS: Perry Law Resigns as Director
--------------------------------------------------
Perry Law tendered his letter of resignation as a Director of
Smart-Tek Solutions Inc. on June 3, 2010.
About Smart-tek Solutions
Newport Beach, Calif.-based Smart-tek Solutions Inc. has two
business lines. Through its wholly owned subsidiary Smart-Tek
Communications Inc. the Company specializes in the design and
development of Radio Frequency Identification (RFID) integration,
monitoring and tracking solutions to meet industry demands.
Through its wholly owned subsidiary Smart-Tek Automated Services
Inc. the Company provides professional employer organization
services.
John Kinross-Kennedy, of Irvine, California, expressed substantial
doubt about the Company's ability to continue as a going concern.
Mr. Kinross-Kennedy noted that that the Company has suffered
recurring losses until the latest fiscal year, and has a working
capital deficiency of $994,278 and a stockholders' deficiency of
$438,164 at June 30, 2010.
The Company's balance sheet at March 31, 2011, showed $4.31
million in total assets, $3.17 million in total liabilities, all
current, and $1.13 million in total stockholders' equity.
SONOMA VINEYARDS: Deadline to Confirm Plan Extended to Sept. 4
--------------------------------------------------------------
Judge Alan Jaroslovsky of the U.S. Bankruptcy Court for the
Northern District of California approved a stipulation extending
the deadline for Sonoma Vineyards Estate, LLC, to confirm its
Chapter 11 plan to Sept. 4, 2011.
The extension came after the Debtor entered into a stipulation
relating to the extension with August B. Landis, the Acting U.S.
Trustee for Region 17.
About Sonoma Vineyards Estate
Napa, California-based Sonoma Vineyards Estate LLC filed for
Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-
13447) on Sept. 7, 2010. Michael C. Fallon, Esq., at the Law
Offices of Michael C. Fallon, in Santa Rosa, Calif., assists the
Debtor in its restructuring effort. In its schedules, the Debtor
listed $10,000,038 in assets and $6,998,010 in liabilities.
SPANISH BROADCASTING: Six Directors Elected at Annual Meeting
-------------------------------------------------------------
Spanish Broadcasting System, Inc., held its Annual Meeting of
Stockholders on June 1, 2011. There were 41,669,805 shares of
Class A common stock entitled to vote at the meeting and
23,403,500 shares of Class B common stock, each share being
entitled to ten votes, entitled to vote at the meeting. The
stockholders elected six directors to hold office until such time
as their respective successors have been duly elected and
qualified:
(1) Raul Alarcon, Jr.
(2) Joseph A. Garcia
(3) Jose A. Villamil
(4) Mitchell A. Yelen
(5) Manuel E. Machado
(6) Jason L. Shrinsky
The stockholders approved a proposal to authorize the Board of
Directors to approve an amendment to the Company's certificate of
incorporation to effect a reverse stock split of the Company's
Class A and Class B common stock. The Board of Directors'
proposal to ratify the appointment of KPMG LLP as the Company's
independent registered public accounting firm for the year ending
Dec. 31, 2011, was approved.
About Spanish Broadcasting
Headquartered in Coconut Grove, Florida, Spanish Broadcasting
System, Inc. -- http://www.spanishbroadcasting.com/-- owns and
operates 21 radio stations targeting the Hispanic audience. The
Company also owns and operates Mega TV, a television operation
with over-the-air, cable and satellite distribution and affiliates
throughout the U.S. and Puerto Rico. Its revenue for the twelve
months ended Sept. 30, 2010, was approximately $140 million.
The Company reported net income of $15.04 million on $136.12
million of net revenue for the year ended Dec. 31, 2010, compared
with a net loss of $13.78 million on $139.39 million of net
revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed
$476.63 million in total assets, $434.87 million in total
liabilities, $92.35 million in cumulative exchangeable redeemable
preferred stock, and a $50.58 million total stockholders' deficit.
* * *
In November 2010, Moody's Investors Service upgraded the corporate
family and probability of default ratings for Spanish Broadcasting
System, Inc., to 'Caa1' from 'Caa3' based on improved free cash
flow prospects due to better than anticipated cost cutting and the
expiration of an unprofitable interest rate swap agreement.
Moody's said Spanish Broadcasting's 'Caa1' corporate family rating
incorporates its weak capital structure, operational pressure in
the still cyclically weak economic climate, generally narrow
growth prospects (though Spanish language is the strongest growth
prospect) given the maturity and competitive pressures in the
radio industry, and the June 2012 maturity of its term loan
magnify this challenge.
In July 2010, Standard & Poor's Ratings Services raised its
corporate credit rating on Miami, Fla.-based Spanish Broadcasting
System Inc. to 'B-' from 'CCC+', based on continued improvement in
the company's liquidity position. The rating outlook is stable.
"The rating action reflects S&P's expectation that, despite very
high leverage, SBS will have adequate liquidity over the
intermediate term to meet debt maturities, potential swap
settlements, and operating needs until its term loan matures on
June 11, 2012," said Standard & Poor's credit analyst Michael
Altberg.
SPITZER INDUSTRIES: S&P Withdraws Preliminary 'B' Corp. Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its preliminary 'B'
corporate credit rating on Houston-based oilfield services
provider Spitzer Industries Inc., as well as its preliminary 'B'
issue rating and preliminary '4' recovery rating on Spitzer's
previously proposed term loan, at the issuer's request. The
company did not pursue the financing that was the basis for S&P's
assignment of preliminary ratings on Feb. 10, 2011.
Ratings List
Ratings Withdrawn
To From
Spitzer Industries Inc.
Corporate credit rating NR
B(prelim)/Stable
$120 mil. term loan NR B(prelim)
Recovery rating NR 4(prelim)
STERLING ESTATES: Court Okays Bauch & Michaels as Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
authorized Sterling Estates (Delaware), LLC, to employ Bauch &
Michaels, LLC, as its attorneys effective as of May 1, 2011.
Bauch & Michaels will provide various legal services to the Debtor
In its role as counsel, including, without limitation, the
following:
a. render legal advice with respect to the powers and duties
of the Debtor to manage its property as debtor in
possession;
b. negotiate, prepare and file documents in connection with
the confirmation of the ORIX Plan;
c. take all necessary action to protect and preserve the
estate of the Debtor, including the prosecution of actions
on the Debtor's behalf, the defense of any actions
commenced against the Debtor, negotiations concerning all
litigation in which the Debtor is or becomes involved,
and the evaluation and objection to claims filed against
the estate, and the prosecution of the ORIX Plan to
confirmation;
d. prepare, on behalf of the Debtor, all necessary
applications, motions, answers, orders, reports and papers
in connection with the administration of the estate
herein, and appear on behalf of the Debtor at all Court
hearings in connection with the Debtor's case; and
e. render legal advice and perform all other legal services
in connection with the foregoing and in connection with
this chapter 11 case.
Bauch & Michaels will charge for its legal services on an hourly
basis in accordance with its ordinary and customary hourly rates
as in effect on the date services are rendered. The principal
attorneys who will represent the Debtor in their chapter 11 cases
and their standard hourly rates are
a. Paul M. Bauch: $400 per hour;
b. Kenneth A. Michaels Jr.: $375 per hour; and
c. Carolina Y. Sales: $195 per hour.
The Debtor is authorized to pay a $25,000 retainer to Bauch &
Michaels, LLC immediately from ORIX Capital Markets, LLC's cash
collateral.
About Sterling Estates
Chicago, Illinois-based Sterling Estates (Delaware), LLC, dba
Sterling Estates Manufactured Home Community, owns and operates a
manufactured home community, a park consisting of pre-manufactured
homes placed on individual sites or "pads" that are leased out
to customers. It filed for Chapter 11 bankruptcy protection on
May 17, 2010 (Bankr. N.D. Ill. Case No. 10-22319). Eugene Crane,
Esq., at Crane Heyman Simon Welch & Clar, represents the Debtor.
The Company estimated assets at $50 million to $100 million and
debts at $10 million to $50 million.
STORM KING: Stay Lifted on Business Premises, Case Dismissed
------------------------------------------------------------
The Hon. Cecelia Morris of the U.S. Bankruptcy Court for the
Southern District of New York dismissed the Chapter 11 case of
Storm King Golf Club, Inc.
On April 15, 2011, Tracy Hope Davis, U.S. Trustee for Region 2,
asked that the Court convert or dismiss the Debtor's case because
the Debtor's substantial and continuing accrual basis operating
losses and absence of a reasonable likelihood of rehabilitation.
The U.S. Trustee explains that the Debtor's operating statements
through February 2011 reflect significant operating losses on an
accrual basis, based primarily upon unpaid debt service and real
property taxes. This resulted in the Court granting the motion of
North Jersey Community Bank for relief from stay on the Debtor's
business premises.
The U.S. Trustee is represented by:
Eric J. Small, Esq.
74 Chapel Street, Suite 200
Albany, NY 12207
Tel: (518) 434-4553
About Storm King Golf Club, Inc.
Cornwall, New York-based Storm King Golf Club, Inc., filed for
Chapter 11 bankruptcy protection on July 28, 2010 (Bankr. S.D.N.Y.
Case No. 10-37256). Lewis D. Wrobel, Esq., in Poughkeepsie, New
York, represented the Debtor in its Chapter 11 case. The Debtor
disclosed $12,117,126 in assets and $1,725,855 in liabilities as
of the Chapter 11 filing.
The U.S. Trustee was unable to appoint a creditors committee in
the case.
SW OWNERSHIP: Case Converted to Ch. 7; Creditors Meeting July 8
---------------------------------------------------------------
A bankruptcy case concerning SW Ownership, LLC, was originally
filed under Chapter 11 on Feb. 28, 2011, but was converted to a
case under chapter 7 on June 5, 2011.
According to a notice, a meeting of creditors is scheduled to take
place July 8, 2011, at 10:00 a.m. at:
Austin Room 118,
Homer Thornberry Bldg.,
903 San Jacinto,
Austin, TX 78701
The U.S. Trustee appointed on June 6 a bankruptcy trustee to take
over the Debtor's estate:
C. Daniel Roberts
C. Daniel Roberts & Associates, P.C.
1602 E. Cesar Chavez
Austin, TX 78702
Tel: (512) 494-8448
As reported in the May 31, 2011 edition of the Troubled COmpany
REporter, the Debtor asked the bankruptcy court to convert its
case to Chapter 7 liquidation after it failed to obtain financing
for its Chapter 11 reorganization.
The Court previously entered an order granting a lift stay in
favor of International Bank of Commerce, the Debtor's prepetition
senior secured lender. With the lift stay, IBC will foreclose
upon the estate's sole tangible assets (with the exception of
nominal cash in the Debtor's accounts and estate claims) and the
Debtor's sole means of generating revenues or cash flow.
About SW Ownership
SW Ownership LLC is a single member limited liability company
owned by SW Ownership Holdings LLC. The Debtor owns the project
commonly known as "Skywater Over Horseshoe Bay" that is currently
being developed in Llano and Burnet counties and is comprised of a
roughly 1,600-acre residential community project with an 18-hole,
Jack Nicklaus-designed, Signature Golf Course. SW Ownership LLC
does not currently maintain operations (save for Project
development) and has no employees. Skywater Management LLC is the
pre-petition and current manager of the Project for SWO.
SW Ownership LLC filed for Chapter 11 bankruptcy (Bankr. W.D. Tex.
Case No. 11-10485) on Feb. 28, 2011, represented by lawyers at
Munsch Hardt Kopf & Harr, P.C. The Debtor also tapped Richard
Ellis, Inc. as its appraiser, valuation consultant and experts.
The Debtor estimated assets at $50 million to $100 million and
debts at $10 million to $50 million.
TCW HIGH INCOME: Moody's Upgrades Rating on Class IV Notes to B1
----------------------------------------------------------------
Moody's Investors Service announced today that it has upgraded the
rating of these notes issued by TCW High Income Partners, Ltd./TCW
High Income Partners Corp.:
-- US$18,000,000 Class IV Mezzanine Secured Fixed Rate Notes
due 2013 (current outstanding balance of $14,421,865.14),
Upgraded to B1(sf); previously on May 15, 2009 Downgraded to
Ca (sf).
RATINGS RATIONALE
According to Moody's, the rating actions taken on the notes result
primarily from the delevering of the Class II and Class III Notes.
Since the last rating action in November 2010, Class II Notes have
been paid in full, Class III Notes have been paid down by
approximately 60.6% or $20.0 million. As a result of the
delevering, the overcollateralization ratios have increased since
the rating action in November 2010. As of the latest trustee
report dated May 16, 2011, the Class III and Junior Par Value Test
ratios are reported at 272.7% and 128.9%, respectively, versus
September 2010 levels of 158.6% and 117.0%, respectively. Moody's
expects the Class III Notes to be paid in full on the next payment
date in August 2011.
Moody's also notes that the deal has benefited from improvement in
the credit quality of the underlying portfolio since the rating
action in November 2010. Based on the May 2011 trustee report, the
weighted average rating factor is 3962 compared to 4154 in
September 2010, and securities rated Caa1 and below make up
approximately 29.8% of the underlying portfolio versus 34.8% in
September 2010. The deal also experienced a decrease in defaults.
In particular, the dollar amount of defaulted securities has
decreased to about $4.8 million from approximately $8.7 million in
September 2010.
Due to the impact of revised and updated key assumptions
referenced in "Moody's Approach to Rating Collateralized Loan
Obligations" and "Annual Sector Review (2009): Global CLOs," key
model inputs used by Moody's in its analysis, such as par,
weighted average rating factor, diversity score, and weighted
average recovery rate, may be different from the trustee's
reported numbers. In its base case, Moody's analyzed the
underlying collateral pool to have a performing par and principal
proceeds balance of $31.5 million, defaulted par of $8.2 million,
a weighted average default probability of 20.5% (implying a WARF
of 4240), a weighted average recovery rate upon default of 20.26%,
and a diversity score of 13. These default and recovery properties
of the collateral pool are incorporated in cash flow model
analysis where they are subject to stresses as a function of the
target rating of each CLO liability being reviewed. The default
probability is derived from the credit quality of the collateral
pool and Moody's expectation of the remaining life of the
collateral pool. The average recovery rate to be realized on
future defaults is based primarily on the seniority of the assets
in the collateral pool. In each case, historical and market
performance trends and collateral manager latitude for trading the
collateral are also factors.
TCW High Income Partners, Ltd., issued in August of 2001, is a
collateralized bond obligation backed primarily by a portfolio of
senior unsecured bonds.
The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
August 2009.
This publication incorporates rating criteria that apply to both
collateralized loan obligations and collateralized bond
obligations. Other methodologies and factors that may have been
considered in the process of rating this issuer can also be found
on Moody's website.
Moody's Investors Service did not receive or take into account a
third party due diligence report on the underlying assets or
financial instruments related to the monitoring of this
transaction in the past six months.
Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in August 2009. In addition, due to the low
diversity of the collateral pool, CDOROM 2.8 was used to simulate
a default distribution that was then applied as an input in the
cash flow model.
In addition to the base case analysis described above, Moody's
also performed sensitivity analyses to test the impact on all
rated notes of various default probabilities. Below is a summary
of the impact of different default probabilities (expressed in
terms of WARF levels) on all rated notes (shown in terms of the
number of notches' difference versus the current model output,
where a positive difference corresponds to lower expected loss),
assuming that all other factors are held equal:
Moody's Adjusted WARF -- 20% (3392)
Class III-A: 0
Class III-B: 0
Class IV: +1
Moody's Adjusted WARF + 20% (5088)
Class III-A: 0
Class III-B: 0
Class IV: 0
Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by 1) uncertainties of
credit conditions in the general economy and 2) the large
concentration of speculative-grade debt maturing between 2013 and
2015 which may create challenges for issuers to refinance. CDO
notes' performance may also be impacted by 1) the manager's
investment strategy and behavior, 2) divergence in legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.
Sources of additional performance uncertainties are:
1) Delevering: The main source of uncertainty in this transaction
is whether delevering from unscheduled principal proceeds will
continue and at what pace. Delevering may accelerate due to
high prepayment levels in the bond market and/or collateral
sales by the manager, which may have significant impact on the
notes' ratings.
2) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to
be defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed
defaulted recoveries assuming the lower of the market price and
the recovery rate in order to account for potential volatility
in market prices.
3) Long-dated assets: The presence of assets that mature beyond
the CLO's legal maturity date exposes the deal to liquidation
risk on those assets. Moody's assumes an asset's terminal value
upon liquidation at maturity to be equal to the lower of an
assumed liquidation value (depending on the extent to which the
asset's maturity lags that of the liabilities) and the asset's
current market value.
4) Lack of portfolio granularity: The performance of the portfolio
depends to a large extent on the credit conditions of a few
large obligors that are rated Caa1 or lower, especially when
they experience jump to default. Due to the deal's low
diversity score and lack of granularity, Moody's supplemented
its typical Binomial Expansion Technique analysis with a
simulated default distribution using Moody's CDOROMTM software
and/or individual scenario analysis.
TEE INVESTMENT: Disclosure Statement Hearing Set for July 21
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada will convene
a hearing on July 21, 2011, at 02:00 p.m., to consider approval of
the disclosure statement explaining the plan of reorganization of
Tee Investment Company, Limited Partnership.
The Plan designates seven classes of claims:
CLASS CLAIMS SUMMARY OF TREATMENT
----- ------ --------------------
N/A Administrative Expenses Paid in full on the latest of
(a) on or before the
Effective Date; (b) when due
or later date as approved by
the claimant; or (c) when
allowed by Final Order
N/A Administrative Claims Paid in full.
N/A Priority Claims Paid in full.
1 Secured Claim of ARCS ARCS will retain its security
interest in the Property as
evidenced by the ARCS Deed of
Trust. The ARCS Secured
Claim will bear interest at
the rate of 4.25% per annum
from and after the Effective
Date.
2 Secured Claim of Ford Will retain its existing
Motor Credit-2007 Ford security interest in the 2007
Ranger Ford Ranger. The Claim will
bear interest at the rate of
6% per annum.
3 Secured Claim of Ford Will retain its existing
Motor Credit-2006 Ford security interest in the 2006
E250 Van Ford Ranger. The Claim will
bear interest at the rate of
6% per annum.
4 Secured Claim of Ford Will retain its existing
Motor Credit-2006 Ford security interest in the 2006
Ranger Ford Ranger. The Claim will
bear interest at the rate of
6% per annum.
5 Secured Claim of GMAC Will retain its existing
-2008 Chevrolet Colorado security interest in the 2006
Ford Ranger. The Claim will
bear interest at the rate of
6% per annum.
6 Unsecured Claims Allowed Unsecured Claims will
receive a pro-rata
distribution of the equity
contribution.
7 Membership Interest Members will retain their
membership interests in the
Reorganized Debtor, but will
receive no distribution until
Class 1 through 6 are paid in
full.
The Plan will be funded by the Debtor's income from the ongoing
operation of its business. The Debtor anticipates that this will
be sufficient to make the payments due of the Class 1, 3, 4 and 5
claims. The Debtor's members will contribute $75,000 of which
$50,000 will be distributed to unsecured creditors. The sum will
be deposited into a segregated trust account prior to the Plan
confirmation.
Should the Debtor be forced to terminate its business operations
or convert its case to Chapter 7 and have a trustee conduct the
liquidation of its assets, the Debtor estimates that that
liquidation will result in payment only to Excel National Bank on
its secured claim (Class 1 creditor) and no distribution to any of
the other creditors (Classes 2, 3, 4, 5, and 6. This is because
Debtor will be unable to obtain any financing, which will lead to
foreclosure on the Property and the personal property, according
to court papers. The Debtor believes the value of the Property
can only be enhanced by continued operation of the Property,
reaching stabilized occupancy, and a more favorable economic
environment, court papers said.
The Debtor is represented by:
Alan R. Smith, Esq.
505 Ridge Street
Reno, Nevada 89501
Telephone: 775/786-4579
Facsimile: 775/786-3066
E-mail: mail@asmithlaw.com
A full-text copy of the Disclosure Statement, dated May 31, 2011,
is available for free at http://ResearchArchives.com/t/s?7638
About Tee Investment
Reno, Nevada-based Tee Investment Company, Limited Partnership,
dba Lakeridge Apartments, filed for Chapter 11 bankruptcy
protection on March 1, 2011 (Bankr. D. Nev. Case No. 11-50615).
The Debtor estimated its assets and debts at $10 million to $50
million.
Affiliates Lakeridge Centre Office Complex, LP (Bankr. D. Nev. 10-
53612), West Shore Resort Properties III, LLC (Bankr. D. Nev. 10-
51101), and West Shore Resort Properties, LLC, and (Bankr. D. Nev.
10-50506) filed separate Chapter 11 petitions.
TIMOTHY BLIXSETH: Hits Ex-Attorney With $375M Malpractice Suit
--------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that Timothy Blixseth,
co-founder of the Yellowstone Club, hit his former counsel with a
$375 million legal malpractice suit in Montana on Wednesday,
claiming the lawyer betrayed attorney-client privilege in helping
creditors pin the private resort's bankruptcy on Blixseth.
Law360 says Stephen Brown of Garlington Lohn & Robinson PLLP
represented Mr. Blixseth in connection with an ill-fated $375
million loan to the Yellowstone Club from Credit Suisse AG, as
well as in his divorce, which passed the private Montana ski and
golf resort into his ex-wife's hands.
About Timothy Blixseth
Tax officials from California, Montana and Idaho on April 5, 2011
filed an involuntary-bankruptcy petition under Chapter 7 against
Timothy Blixseth in Las Vegas, Nevada (Bankr. D. Nev. Case No.
11-15010). The three states that signed the petition against the
Yellowstone Club co-founder claim they are owed $2.3 million in
back taxes. A copy of the petition is available for free at
http://bankrupt.com/misc/nvb11-15010.pdf
Mr. Blixseth and his former wife, Edra Blixseth, founded the
Yellowstone Club, near Big Sky, Montana, in 2000 as a ski resort
for millionaires looking for vacation homes. Members paid
$205 million for 72 properties in 2005 alone.
Bloomberg News, citing a court ruling by U.S. Bankruptcy Judge
Ralph B. Kirscher, says the couple took cash for their personal
use from a $375 million loan arranged by Credit Suisse. Finances
at the club deteriorated thereafter, and the club eventually went
bankrupt, Judge Kirscher found. Mr. Blixseth was ordered to pay
$40 million to the club's creditors under a September ruling by
Judge Kirscher. Mr. Blixseth said he's appealing that judgment.
About Edra D. Blixseth
Edra D. Blixseth owns the Porcupine Creek Golf Club in Rancho
Mirage and the Yellowstone Club in Montana. Ms. Blixseth filed
for Chapter 11 bankruptcy protection on March 26, 2009 (Bankr. D.
Mont. Case No. 09-60452). Gary S. Deschenes, Esq., at Deschenes &
Sullivan Law Offices assists Ms. Blixseth in her restructuring
efforts. The Debtor estimated $100 million to $500 million in
assets and $500 million to $1 billion in debts. The Debtor's case
was converted from a Chapter 11 to a Chapter 7 by Court order
entered May 29, 2009.
About Yellowstone Mountain
Located near Big Sky, Montana, Yellowstone Mountain Club LLC --
http://www.theyellowstoneclub.com/-- is a private golf and ski
community with more than 350 members, including Bill Gates and Dan
Quayle. The Company was founded in 1999.
Yellowstone Club and its affiliates filed for Chapter 11
bankruptcy on Nov. 10, 2008 (Bankr. D. Mont. Case No. 08-61570).
The Company's owner affiliate, Edra D. Blixseth, filed for
Chapter 11 protection on March 27, 2009 (Case No. 09-60452).
In June 2009, the Bankruptcy Court entered an order confirming
Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor
Capital Partners, LLC, acquired equity ownership in the
reorganized Club for $115 million.
Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green
PLLC represented the Debtors. The Debtors hired FTI Consulting
Inc. and Ronald Greenspan as CRO. The official committee of
unsecured creditors were represented by Parsons, Behle and
Latimer, as counsel, and James H. Cossitt, Esq., at local counsel.
Credit Suisse, the prepetition first lien lender, was represented
by Skadden, Arps, Slate, Meagher & Flom.
TMG CANTON: Asks Court to Approve Sullivan Ward Employment
----------------------------------------------------------
TMG Canton Crossings LLC seeks Bankruptcy Court permission to
employ Sullivan Ward Asher & Patton P.C. as its legal counsel.
The firm will be paid for its services on an hourly basis
according to these rates:
Senior principals, including $325 per hour
Wallace M. Handler
Principals, including Debra Beth $300 per hour
Pevos
Associates $250 per hour
The Debtor has paid the firm $20,000 as retainer, exclusive of a
$1,039 filing fee.
About TMG Canton
TMG Canton Crossing LLC owns a 744-unit residential apartment
complex in Canton, Michigan. TMG Canton filed a Chapter 11
petition (Bankr. E.D. Mich. Case No. 11-54145), on May 17,
2011. Judge Walter Shapero presides over the case. The Debtor
estimated assets and debts of $10 million to $50 million. Court
filings say the project is worth $17.5 million. Lender Wells
Fargo Bank NA has a $29.3 million mortgage. The petition was
signed by Jeffrey Starman, president of TMG Canton Manager, Inc.,
managing member.
TMG CANTON: Sec. 341 Meeting of Creditors Set for June 22
---------------------------------------------------------
The U.S. Trustee for the Eastern District of Michigan will convene
a meeting of creditors in the bankruptcy case of TMG Canton
Crossing LLC on June 22, 2011 at 2:00 p.m. at room 315 E, 211 W.
Fort St. Bldg. Detroit. Proofs of Claim are due by Sept. 20,
2011.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.
Attendance by the Debtors' creditors at the meeting is welcome,
but not required. The Section 341(a) meeting offers the creditors
a one-time opportunity to examine the Debtor's representative
under oath about the Debtor's financial affairs and operations
that would be of interest to the general body of creditors.
About TMG Canton
TMG Canton Crossing LLC owns a 744-unit residential apartment
complex in Canton, Michigan. TMG Canton filed a Chapter 11
petition (Bankr. E.D. Mich. Case No. 11-54145), on May 17,
2011. Judge Walter Shapero presides over the case. The Debtor
estimated assets and debts of $10 million to $50 million. Court
filings say the project is worth $17.5 million. Lender Wells
Fargo Bank NA has a $29.3 million mortgage. The petition was
signed by Jeffrey Starman, president of TMG Canton Manager, Inc.,
managing member.
TRAILER BRIDGE: Six Directors Elected at Annual Meeting
-------------------------------------------------------
Trailer Bridge, Inc., held an annual meeting of its stockholders
on June 7, 2011. At the Annual Meeting, six directors were
elected to serve until the next annual meeting and until their
successors are elected and qualified, namely: Robert P. Burke,
Malcom P. McLean Jr., Greggory B. Mendenhall, Douglas E. Schimmel,
Allen L. Stevens and Nickel van Reesema. The stockholders
ratified the appointment of BDO USA, LLP, to serve as the
independent registered public accountants for the Company for the
current fiscal year ending Dec. 31, 2011.
About Trailer Bridge
Jacksonville, Fla.-based Trailer Bridge, Inc., is an integrated
trucking and marine freight carrier that provides freight
transportation between the continental U.S., Puerto Rico and the
Dominican Republic.
BDO USA, LLP, in Miami, Fla., expressed substantial doubt about
Trailer Bridge's ability to continue as a going concern. The
independent auditors noted that the Company has a significant
working capital deficit resulting from the current maturities of
long term debt.
The Company reported a net loss of $2.3 million on $118.2 million
of revenues for 2010, compared with net income of $2.6 million on
$114.3 million of revenues for 2009.
At Dec. 31, 2010, the Company's balance sheet showed
$116.4 million in total assets, $116.7 million in total
liabilities, and a stockholders' deficit of $316,395.
* * *
As reported by the TCR on May 25, 2011, Moody's Investors Service
downgraded Trailer Bridge, Inc.'s Corporate Family and Probability
of Default ratings two notches to Caa2 from B3. The ratings
downgrade was prompted by Trailer Bridge's upcoming maturities
comprising the majority of the company's debt structure over the
next twelve months combined with insufficient liquiditysources to
satisfy these obligations absent a refinancing.
In the May 30, 2011, edition of the TCR, Standard & Poor's Ratings
Services placed its 'B-' long-term corporate credit rating on
Jacksonville, Fla.-based Trailer Bridge Inc. on CreditWatch with
negative implications. The ratings on Trailer Bridge reflect its
weak liquidity, highly leveraged financial profile, concentrated
end-market demand, and participation in the capital-intensive and
competitive shipping industry.
TRAVELPORT INC: Bank Debt Trades at 5% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Travelport, Inc.,
is a borrower traded in the secondary market at 95.33 cents-on-
the-dollar during the week ended Friday, June 10, 2011, a drop of
0.79 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 250 basis points above LIBOR to borrow
under the facility. The bank loan matures on August 23, 2013, and
carries Moody's Ba3 rating and Standard & Poor's B rating. The
loan is one of the biggest gainers and losers among 208 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
Travelport, Inc., -- http://www.travelport.com/-- a travel
company, offers broad-based business services to companies in
travel industry. The company operates a network of travel brands
and content, and provides travel technologies, solutions, and
services. It also offers online travel distribution systems and
services that enable travel suppliers, travel agencies, Web sites,
and corporations to provide travel products and services to
travelers; ground travel products and services, and global travel
content; Web-based solutions and services for airlines, airports,
travel agencies and travel-related companies; market planning,
analysis, sales intelligence, and network planning services; and
technical and application solutions, such as passenger management,
E-commerce toolkit, and E-ticketing solutions for airlines. The
company is based in Parsippany, New Jersey. Travelport, Inc.,
operates as a subsidiary of Travelport Limited.
TRAVELPORT INC: Bank Debt Trades at 5% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Travelport, Inc.,
is a borrower traded in the secondary market at 94.85 cents-on-
the-dollar during the week ended Friday, June 10, 2011, a drop of
1.20 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 450 basis points above LIBOR to borrow
under the facility. The bank loan matures on August 23, 2015.
The loan is one of the biggest gainers and losers among 208 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
Travelport, Inc., -- http://www.travelport.com/-- a travel
company, offers broad-based business services to companies in
travel industry. The company operates a network of travel brands
and content, and provides travel technologies, solutions, and
services. It also offers online travel distribution systems and
services that enable travel suppliers, travel agencies, Web sites,
and corporations to provide travel products and services to
travelers; ground travel products and services, and global travel
content; Web-based solutions and services for airlines, airports,
travel agencies and travel-related companies; market planning,
analysis, sales intelligence, and network planning services; and
technical and application solutions, such as passenger management,
E-commerce toolkit, and E-ticketing solutions for airlines. The
company is based in Parsippany, New Jersey. Travelport, Inc.,
operates as a subsidiary of Travelport Limited.
TRIBUNE CO: Bank Debt Trades at 33% Off in Secondary Market
-----------------------------------------------------------
Participations in a syndicated loan under which Tribune Co. is a
borrower traded in the secondary market at 66.95 cents-on-the-
dollar during the week ended Friday, June 10, 2011, a drop of 0.81
percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 300 basis points above LIBOR to borrow
under the facility. The bank loan matures on May 17, 2014.
Moody's has withdrawn its rating on the bank debt. The loan is
one of the biggest gainers and losers among 208 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08-
13141). The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of December 8, 2008, the Debtors have $7,604,195,000 in total
assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP
and Landis Rath LLP serve as co-counsel to the Official Committee
of Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRUE TEMPER: Dist. Court Dismisses Age Discrimination Suit
----------------------------------------------------------
District Judge Sharion Aycock granted True Temper Sports, Inc.'s
motion for summary judgment tossing the lawsuit, Ronnie Ray King,
v. True Temper Sports, Inc., Case No. 1:09CV168 (N.D. Miss.).
Ronnie Ray King alleges that True Temper Sports illegally
discriminated against him based on age when he was terminated as
part of a company-wide reduction in force. He declined a
severance package and chose to file the lawsuit. The Court,
however, held that Mr. King has failed to present any evidence
from which a reasonable juror could conclude that age was the but-
for reason for his termination. A copy of the Court's June 7,
2011 Memorandum Opinion is available at http://is.gd/TAv914from
Leagle.com.
About True Temper
True Temper Sports, Inc., manufactures golf shafts, and is
consistently the number one shaft on all professional tours
globally. The Company markets a complete line of shafts under the
True Temper(R), Grafalloy(R) and Project X(R) shaft brands, and
sells these brands in more than 30 countries throughout the world.
True Temper has 10 facilities located in the United States,
Europe, Japan, China and Australia.
True Temper filed for Chapter 11 on Oct. 8, 2009 (Bankr. D. Del
Case No. 09-13446). Marion M. Quirk, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, represents the Debtor in its
restructuring effort. Logan & Company serves as claims and notice
agent. Bankruptcy Judge Peter J. Walsh handles the case.
As of June 28, 2009, the Company had $180.4 million in total
assets and $319.0 million in total liabilities, resulting in
stockholders' deficit of $138.5 million.
In December 2009, True Temper obtained confirmation of a
prepackaged Chapter 11 plan that restructured senior debt into a
combination of exit financing and equity in the reorganized
debtor. Debt holders and stockholders -- the plan investors --
injected $70 million cash used to pay down first-lien debt
totalling $105.6 million. The remainder of the first-lien debt
were converted into a new term loan under the plan. The Plan
Investors obtained most of the new stock of the reorganized
company. The holders of $45 million in second-lien debt received
11.4% of the new stock.
TXU CORP: Bank Debt Trades at 22% Off in Secondary Market
---------------------------------------------------------
Participations in a syndicated loan under which Energy Future
Holdings Corp., formerly known as TXU Corp., is a borrower traded
in the secondary market at 78.19 cents-on-the-dollar during the
week ended Friday, June 10, 2011, a drop of 0.91 percentage points
from the previous week according to data compiled by Loan Pricing
Corp. and reported in The Wall Street Journal. The Company pays
450 basis points above LIBOR to borrow under the facility. The
bank loan matures on October 10, 2017, and carries Moody's B2
rating and Standard & Poor's CCC rating. The loan is one of the
biggest gainers and losers among 208 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas. The Company
delivers electricity to roughly three million delivery points in
and around Dallas-Fort Worth.
EFH Corp. was created in October 2007 in a $45 billion leveraged
buyout of Texas power company TXU in a deal led by private-equity
companies Kohlberg Kravis Roberts & Co. and TPG Inc.
The Company's consolidated balance sheets at Dec. 31, 2010, showed
$46.388 billion in total assets, $52.299 billion in total
liabilities, and a stockholders' deficit of $5.911 billion.
* * *
In April 2011, Moody's Investors Service affirmed the 'Caa2'
Corporate Family Rating, 'Caa3' Probability of Default Rating and
SGL-4 Speculative Grade Liquidity Ratings of EFH. Outlook is
stable. EFH's Caa2 CFR and Caa3 PDR reflect a financially
distressed company with limited financial flexibility; its capital
structure appears to be untenable, calling into question the
sustainability of the business model; and there is no expectation
for any meaningful debt reduction over the next few years, beyond
scheduled amortizations.
At the end of February 2011, Fitch Ratings it does not expect to
take any immediate rating action on EFH's Texas Competitive
Electric Holdings Company LLC or their affiliates based on recent
default allegations from lender Aurelius. EFH carries a 'CCC'
corporate rating, with negative outlook, from Fitch.
TXU CORP: Bank Debt Trades at 16% Off in Secondary Market
---------------------------------------------------------
Participations in a syndicated loan under which Energy Future
Holdings Corp., formerly known as TXU Corp., is a borrower traded
in the secondary market at 84.23 cents-on-the-dollar during the
week ended Friday, June 10, 2011, a drop of 0.67 percentage points
from the previous week according to data compiled by Loan Pricing
Corp. and reported in The Wall Street Journal. The Company pays
350 basis points above LIBOR to borrow under the facility. The
bank loan matures on October 10, 2014. The loan is one of the
biggest gainers and losers among 208 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas. The Company
delivers electricity to roughly three million delivery points in
and around Dallas-Fort Worth.
EFH Corp. was created in October 2007 in a $45 billion leveraged
buyout of Texas power company TXU in a deal led by private-equity
companies Kohlberg Kravis Roberts & Co. and TPG Inc.
The Company's consolidated balance sheets at Dec. 31, 2010, showed
$46.388 billion in total assets, $52.299 billion in total
liabilities, and a stockholders' deficit of $5.911 billion.
* * *
In April 2011, Moody's Investors Service affirmed the 'Caa2'
Corporate Family Rating, 'Caa3' Probability of Default Rating and
SGL-4 Speculative Grade Liquidity Ratings of EFH. Outlook is
stable. EFH's Caa2 CFR and Caa3 PDR reflect a financially
distressed company with limited financial flexibility; its capital
structure appears to be untenable, calling into question the
sustainability of the business model; and there is no expectation
for any meaningful debt reduction over the next few years, beyond
scheduled amortizations.
At the end of February 2011, Fitch Ratings it does not expect to
take any immediate rating action on EFH's Texas Competitive
Electric Holdings Company LLC or their affiliates based on recent
default allegations from lender Aurelius. EFH carries a 'CCC'
corporate rating, with negative outlook, from Fitch.
UNIVERSAL BIOENERGY: Executes Letter of Intent with Pacific Rim
---------------------------------------------------------------
Universal Bioenergy, Inc., executed a Letter of Intent for a joint
venture with Pacific Rim Native American Investments Corporation,
a Native American corporation, of Rancho Cucamonga, California.
Under the terms of the transaction, Universal Bioenergy will act
as "Manager" and "Developer" for Pacific Rim for a period of 5
years to develop and manage the oil and natural gas potential on
properties and assets, owned, managed or controlled by Pacific Rim
on behalf of the sovereign Indian Nations, Tribes, and their
respective Lands and Territories. According to Pacific Rim, they
presently represent over 30 federally recognized sovereign Indian
Nations and Tribes who own or control millions of acres of lands
in the States of California, Oregon, Nevada, Arizona, Montana and
Oklahoma. Pacific Rim is currently in discussions and
negotiations with more Nations and Tribes to bring them under
contract, and the total number they represent could potentially
reach as many as 250 Indian Nations and Tribes. The 5 year
agreement would be subject to possible extensions and renewals.
Under the terms of the proposed agreement, Universal will conduct
exploration, drilling and develop the "Lands" to produce and
market all petroleum and natural gas (methane), and related
hydrocarbons produced in association with the oil and gas
obtained from the "Lands" of Pacific Rim and from all geological
formations under the "Lands" and Leases, or from any new or
existing gas wells. Universal will also be granted the right to
develop other alternative energy projects including solar,
biofuels, wind, wave, tidal, green technology products, and waste
to energy projects.
Universal will be responsible for the marketing and distribution
of all of the gas and oil from "the Lands" for all new and
existing capped oil and gas wells. It will also have the right to
evaluate any existing oil and gas agreements Pacific Rim has with
other oil & gas companies to determine Pacific Rim's rights of
participation, ownership and marketing rights it has to sell its
own oil and gas from the wells and to potentially acquire the
rights to market and sell the oil and gas from those wells on
behalf of Pacific Rim.
The total project may also generate up to an estimated 300 to 500
new jobs and provide more employment for Universal and for the
Indian Nations. Based solely on the Company's initial due
diligence, the Company believes that if the transaction is
completed, the potential revenues from this venture could
potentially be in the range of $500 million to over $1 billion
over the five year term of the agreement. This could result in an
estimated $100 million to $200 million in annual revenues for the
project. Assuming a pretax net profit of 20% of revenues, the
estimated net profit to be generated from the agreement would be
in the range of $20 million to $40 million annually. Based on
industry standards of valuation utilizing current average P/E
ratios, as noted by Standard & Poor's, at a multiple of 15-17
times earnings, a valuation of $300 million to $600 million
dollars is a practical estimate of the additional market value of
this transaction alone to Universal Bioenergy. According to
Pacific Rim, the revenues and profits to be generated from this
venture on Indian lands would not be subject to Federal and State
sales and excise taxes, which would result in higher net earnings
for Universal and Pacific Rim.
The final terms and conditions of the joint venture are being
negotiated and will be determined in the definitive agreement. No
assurances can be provided that a definitive agreement will be
executed. Execution of a definitive agreement is subject to,
among other things, confirming due diligence by Universal,
standard regulatory approvals and other conditions and approval by
either or both companies management and Board of Directors.
About Universal Bioenergy
Universal Bioenergy Inc., is an alternative energy company
headquartered in Irvine, California. The Company's new strategic
direction is to develop and market a diverse product line of
alternative and natural energy products including, natural gas,
solar, biofuels, wind, wave, tidal, and green technology products.
The Company's balance sheet at Sept. 30, 2010, showed
$3.00 million in total assets, $3.35 million in total liabilities,
and a $353,406 stockholders' deficit.
As reported by the TCR on Nov. 26, 2010, S.E.Clark & Company,
P.C., in Tucson, Arizona, 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
net losses for the period from inception (Aug. 13, 2004) to Dec.
31, 2009, of $14.8 million. Further, the Company has inadequate
working capital to maintain or develop its operations, and is
dependent upon funds from private investors and the support of
certain stockholders.
US FOODSERVICE: Bank Debt Trades at 6% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which U.S. Foodservice,
Inc., is a borrower traded in the secondary market at 94.04 cents-
on-the-dollar during the week ended Friday, June 10, 2011, a drop
of 0.63 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 275 basis points above LIBOR to borrow
under the facility. The bank loan matures on July 3, 2014, and
carries Moody's B3 rating. The loan is one of the biggest gainers
and losers among 208 widely quoted syndicated loans with five or
more bids in secondary trading for the week ended Friday.
U.S. Foodservice, Inc. -- http://www.usfoodservice.com/-- is a
foodservice supplier serving some 250,000 customers from more than
70 distribution facilities. The Company supplies restaurants,
hotels, school, and other foodservice operators with a wide
variety of food products, including canned and dry foods, meats,
frozen foods, and seafood. It also distributes kitchen equipment
and cleaning supplies among other non-food supplies. U.S.
Foodservice distributes both national brand products and its own
private labels. Tracing its roots to 1853, the company is owned
by private equity firms KKR & Co. and Clayton, Dubilier & Rice.
VANGENT INC: Moody's Upgrades Corporate Family Rating to 'B2'
-------------------------------------------------------------
Moody's upgraded Vangent, Inc.'s ratings including its corporate
family and probability of default ratings to B2 from B3. The
speculative grade liquidity rating remains SGL-3. The outlook was
revised to stable from negative.
These ratings were upgraded:
-- Corporate family rating, to B2 from B3
-- Probability of default rating, to B2 from B3
-- $50 million senior secured revolving credit facility due
February 2012, to Ba3 (LGD-2, 23%) from B1 (LGD-2, 25%)
-- $215 million senior secured term loan due February 2013, to
Ba3 (LGD-2, 23%) from B1 (LGD-2, 25%)
-- $190 million 9 5/8% senior subordinated notes due February
2015, to Caa1 (LGD-5, 84%) from Caa2 (LGD-5, 83%)
RATINGS RATIONALE
The ratings upgrade recognizes Vangent's higher revenue base as a
result of the acquisition of Buccaneer Computer Systems & Service,
Inc. in September 2010 and the expectation of modest revenue
growth based on the current backlog which should maintain credit
metrics in line with a B2 rating level despite the completion of
U.S. Census work.
Vangent has a prime position on 90% of the current total backlog
with a meaningful portion derived from fixed price contracts which
should help support the maintenance of double digit EBITDA
margins. Debt/EBITDA and EBIT/interest, based on Moody's standard
adjustments, stood at 5.1 times and 1.6 times, respectively for
the last twelve months ended April 2, 2011. The combination of
Vangent's already established foothold in the healthcare
information technology sector and the additional focus on
healthcare-related data analytics and information technology
resulting from the Buccaneer acquisition should provide modest
growth prospects over the intermediate term. One of the key
differentiators of Vangent versus some of its peers in the
information technology services sector is that the company focuses
on federal civilian agencies, in particular healthcare and
education, both of which are sectors expected to benefit from
continued meaningful government outlays.
The stable outlook is supported by Vangent's adequate liquidity
profile and stable revenue sources including work done under
contracts related to Medicare services, federal student aid and
services for retired civil servants.
The SGL-3 liquidity rating is characterized by cash on the balance
sheet of $46.4 million at April 2, 2011 and expected positive free
cash flow generation over the next twelve months supported in part
by improved working capital management. At the same time, the
rating also reflects the upcoming expiration of the company's
revolving credit facility due February 2012. However, the need to
utilize a revolver for working capital needs over the next twelve
months is not anticipated due to free cash flow generation and
cash on the balance sheet. Although there are step-downs over the
next four quarters related to the leverage ratio covenant, the
company is expected to remain well within compliance.
Although not anticipated over the near term, factors that could
lead to a positive outlook or stronger ratings include
demonstrating an ability to expand its top line while sustaining
current margins and free cash flow characteristics, lowering its
debt/EBITDA towards 3.5 times and demonstrating EBIT/interest
coverage at or above 2 times on a sustained basis. Developments
that could establish negative pressure on the ratings include not
extending the maturity date on the company's credit facility
before year-end, significant declines in revenues and margins,
experiencing negative free cash flow or an elevation of its
debt/EBITDA towards 6.0 times and EBIT/interest falling to the 1.0
times level.
The principal methodology used in rating Vangent, Inc. was the
Global Business & Consumer Service Industry Rating Methodology,
published October 2010. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.
Vangent, Inc., with corporate headquarters in Arlington, Virginia,
is a provider of information management and business process
outsourcing services to several U.S. public health care and other
civilian government agencies, as well as selected U.S. defense and
intelligence agencies, foreign governments and private sector
entities. Revenues for the last twelve months ended April 2, 2011
totaled $743.5 million.
WAGSTAFF PROPERTIES: Can Hire Adair & Evans as Controller/CFO
-------------------------------------------------------------
The Hon. Nancy C. Dreher of the U.S. Bankruptcy Court for the
District of Minnesota authorized Wagstaff Properties LLC, et al.,
to employ Adair & Evans to provide Controller/CFO, accountant, and
tax professional services.
To the best of the Debtors' knowledge, A&E is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011.
The cases are jointly administered with Wagstaff Minnesota Inc.
(Bankr. Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher
presides the case. Fredrikson & Byron, PA, and Peitzman Weg &
Kempinsky LLP represent the Debtor in their restructuring efforts.
The debtors estimated assets and liabilities at $10 million to
$50 million.
WAGSTAFF PROPERTIES: Can Hire Peitzman Weg as Bankruptcy Counsel
----------------------------------------------------------------
The Hon. Nancy C. Dreher of the U.S. Bankruptcy Court for the
District of Minnesota authorized Wagstaff Properties LLC, et al.,
to employ Peitzman, Weg & Kempinsky, LLP, to represent the Debtors
in carrying out their duties under the Bankruptcy Code.
To the best of the Debtors' knowledge, Peitzman Weg is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011.
The cases are jointly administered with Wagstaff Minnesota Inc.
(Bankr. Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher
presides the case. Fredrikson & Byron, PA, and Peitzman Weg &
Kempinsky LLP represent the Debtor in their restructuring efforts.
The debtors estimated assets and liabilities at $10 million to
$50 million.
WAGSTAFF PROPERTIES: Court OKs Fredrikson & Byron as Counsel
------------------------------------------------------------
The Hon. Nancy C. Dreher of the U.S. Bankruptcy Court for the
District of Minnesota authorized Wagstaff Properties LLC, et al.,
to employ Fredrikson & Byron, P.A. as local Chapter 11 counsel,
To the best of the Debtors' knowledge, Fredrikson & Byron is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011.
The cases are jointly administered with Wagstaff Minnesota Inc.
(Bankr. Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher
presides the case. Fredrikson & Byron, PA, and Peitzman Weg &
Kempinsky LLP represent the Debtor in their restructuring efforts.
The debtors estimated assets and liabilities at $10 million to
$50 million.
WAVERLY GARDENS: Court OKs $75,000 DIP Loan from First Tennessee
----------------------------------------------------------------
The Hon. Paulette J. Delk of the U.S. Bankruptcy Court for the
Western District of Tennessee authorized Waverly Gardens of
Memphis, LLC, and Kirby Oaks Integra, LLC, to obtain secured
postpetition financing (in the form of a revolving line of credit
promissory note) from First Tennessee in the amount $75,000, with
interest at a fixed of 5% p.a., and maturing on the sale of the
Facilities.
As reported in the Troubled Company Reporter on May 17, 2011, the
Debtors will use the money on an interim basis to make specific,
certain improvements to Waverly Gardens and Waverly Glen (the
"Facilities"), satisfy specific obligations owed, and improvements
to the physical plant of the Facilities in order to maintain its
continued viability, pending the sale.
First Tennessee agreed to extend the financing to the Debtors,
after submission and approval of a budget for the said
improvements, in order to fund the specific expenses to be
incurred in order to satisfy certain obligations and make repairs
and improvements on the Facilities.
The First Tennessee DIP Loan will be secured by a Superpriority
Lien on all property of each of Debtor's estates of any and every
nature, characterization or description whatsoever, including
without limitation, all Facilities, accounts, healthcare insurance
receivables, rights under governmental health care costs
reimbursement contracts and general (including payment)
intangibles of the bankruptcy estates, but not including any
recovery actions of any of the Debtors' estates under Chapter 5 of
the Bankruptcy Code.
About Waverly Gardens of Memphis
Memphis, Tennessee-based Waverly Gardens of Memphis, LLC and Kirby
Oaks Integra, LLC -- http://www.waverlygardens.com/-- operate two
senior living facilities consisting of a total of 248 units.
Waverly Gardens consists of 196 rental units and is located at
6539 Knight Arnold Road, Memphis, Tennessee 38115. Kirby Oaks
consists of 52 rental units and is located at 6551 Knight Arnold
Road, Memphis, Tennessee 38115. The Debtors filed separate
petitions for Chapter 11 relief on Oct. 2, 2008 (Bankr. W.D.
Tenn. Lead Case No. 08-30218). Michael P. Coury, Esq., and Robert
Campbell Hillyer, Esq., at Butler, Snow, O'Mara, Stevens &
Cannada, in Memphis, Tenn., represent the Debtors as counsel.
Waverly Gardens estimated assets at $10 million to $50 million,
and debts at $1 million to $10 million. Kirby Oaks estimated
assets and debts at $1 million and $10 million.
WAVERLY GARDENS: Will Pay Shelby Trustee Claims Via Property Sale
-----------------------------------------------------------------
Waverly Gardens of Memphis, LLC and Kirby Oaks Integra, LLC dba
Waverly Glen, ask the U.S. Bankruptcy Court for the Western
District of Tennessee to deny the request of the Shelby County
Trustee to dismiss for failure to pay postpetition ad valorem
property taxes.
On April 29, the Shelby County Trustee related that according to
records, the Debtors have failed to pay ad valorem property taxes
assessed for tax years 2009 and 2010.
As of April 30, the amount of unpaid post petition taxes owed by
Debtors to Shelby County totals $154,181.
The Debtors explain that the dismissal of the case could result in
a forced shutdown of the Debtor's business, with adverse
consequences to the Debtor's residence. Such action is
unnecessary given the fact that the Shelby County Trustee is
essentially in a first lien position and its claim will be
satisfied in full by the property out of any sale.
The Debtor submits that there is reasonable likelihood that a
suitable purchaser can be found for the property, and that the
Debtor would either be able file a liquidating plan within a
reasonable amount of time or to obtain a sale of the property.
On March 16, 2011, the Court authorized the Debtor to employ
Senior Living Investment Brokerage, Inc. as a real estate
professional to market and sell the Debtor's real property. SLI
is actively engaged in the sales of Debtor's property and has
obtained several letters of intention from prospective purchasers.
Some of these letters of intent contemplate further financing by
First Tennessee Bank and are presently under consideration by the
Debtor and First Tennessee Bank.
About Waverly Gardens of Memphis
Memphis, Tennessee-based Waverly Gardens of Memphis, LLC and Kirby
Oaks Integra, LLC -- http://www.waverlygardens.com/-- operate two
senior living facilities consisting of a total of 248 units.
Waverly Gardens consists of 196 rental units and is located at
6539 Knight Arnold Road, Memphis, Tennessee 38115. Kirby Oaks
consists of 52 rental units and is located at 6551 Knight Arnold
Road, Memphis, Tennessee 38115. The Debtors filed separate
petitions for Chapter 11 relief on Oct. 2, 2008 (Bankr. W.D.
Tenn. Lead Case No. 08-30218). Michael P. Coury, Esq., and Robert
Campbell Hillyer, Esq., at Butler, Snow, O'Mara, Stevens &
Cannada, represent the Debtors as counsel.
Waverly Gardens estimated assets at $10 million to $50 million,
and debts at $1 million to $10 million. Kirby Oaks estimated
assets and debts at $1 million and $10 million.
WEGENER CORP: Thomas Elliot Resigns as Board Member
---------------------------------------------------
Thomas G. Elliot notified Wegener Corporation that, for personal
reasons, he is resigning his position as a member of the board of
directors of Wegener Corporation effective June 3, 2011. Mr.
Elliot has served as a director of Wegener Corporation since
September 1998.
About Wegener Corp.
Johns Creek, Ga.-based Wegener Corporation --
http://www.wegener.com/-- was formed in 1977 and is a Delaware
corporation. The Company conducts its continuing business through
Wegener Communications, Inc. (WCI), a wholly-owned subsidiary.
WCI, a Georgia corporation, is an international provider of
digital video and audio solutions for broadcast television, radio,
telco, private and cable networks.
In Wegener's annual report filed on Nov. 15, 2010, on Form 10-K
for the fiscal year ended Sept. 3, 2010, Habif, Arogeti & Wynne,
LLP, in Atlanta, Ga., expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has suffered recurring losses from
operations and has a capital deficiency.
The Company's balance sheet at March 4, 2011, showed $7.99 million
in total assets, $9.01 million in total liabilities, all current,
and a $1.02 million total capital deficit.
WINTERS SHEET: Interim Cash Use Expires June 30
-----------------------------------------------
The Bankruptcy Court will convene a final hearing on June 27,
2011, over Winters Sheet Metal, Inc.'s continued use of cash
collateral. Bankruptcy Judge Paul Mannes signed off on June 8,
2011, an interim stipulation and consent order that authorizes
Winters' use of cash collateral through June 30, and grants
adequate protection to PNC Bank, National Association. A copy of
the stipulation is available at http://is.gd/1Ilb3ifrom
Leagle.com.
Winters Sheet Metal, Inc., Redgate Properties, LLC, and Lightfoot
Group, LLC, each filed a voluntary Chapter 11 petition (Bankr. D.
Md. Case Nos. 11-17931, 11-17933 and 11-17945) on April 15, 2011.
The Debtors sought the joint administration of the three cases.
Winters listed under $1 million in assets and debts in its
petition. Redgate disclosed $1 million to $10 million in assets
and under $1 million in debts. The Debtors are represented by
John Douglas Burns, Esq., at The Burns Law Firm, LLC.
PNC asserts a $797,274 claim against Winters under a prepetition
commercial loan. PNC further asserts that the loan obligations
are secured by a lien on all of Winters' inventory, accounts,
general intangibles.
PNC also asserts a $518,394 claim against Redgate under a
prepetition commercial loan. PNC asserts Redgate's obligations
are secured by a lien on Redgate's real property at 22100 Point
Lookout Road, in Leonardtown, Maryland; and a lien on Lightfoot's
real properties at 43660 Pump House Lane, 43860 Web Lane, and
Point Lookout Road, in Leonardtown, Maryland.
Lightfoot and Redgate are guarantors under a prepetition loan
extended by Maryland Bank & Trust Company, N.A., to Mr. James A.
Winters, Sr. and Mr. William E. Winters, Jr. Old Line Bank later
assumed MB&T's rights under the loan. Old Line Bank asserts a
claim against Lightfoot and Redgate for the MB&T Loan in an amount
in excess of $1,632,000.
PNC and OLB assert that Redgate and Lightfoot are "single asset
real estate" entities as defined in 11 U.S.C. Sec. 101(51B), which
both Debtors contest.
Marc E. Shach, Esq. -- marc.shach@weinstocklegal.com -- at
Weinstock Friedman & Friedman, P.A., in Baltimore, Maryland,
argues for PNC.
James M. Greenan, Esq., and Leah V. Lerman, Esq. --
llerman@mhlawyers.com -- at McNamee Hosea Jernigan Kim Greenan &
Lynch, P.A., in Greenbelt, Maryland, represent Old Line Bank.
WOLVERINE TUBE: Wins Confirmation of Chapter 11 Plan
----------------------------------------------------
Wolverine Tube, Inc. disclosed that the U.S. Bankruptcy Court for
the District of Delaware has confirmed the company's Plan of
Reorganization.
"Approval of the Plan clears the way for us to officially exit
bankruptcy," said Steven S. Elbaum, Chairman of Wolverine. "We
are pleased to report that the Plan was approved by an
overwhelming majority of our creditors."
Under the Plan as confirmed by the court, $139 million of senior
secured notes and accrued interest at the petition date will be
converted to equity plus a $30 million note, and all unsecured
creditors will be paid in full. The company's pension will be
terminated and assumed by the Pension Benefit Guaranty Corporation
(PBGC).
Wolverine filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the U. S. Bankruptcy
Court for the District of Delaware on November 1, 2010.
Wolverine expects to emerge from Chapter 11 on June 24, 2011.
As reported in the Troubled Company Reporter on June 9, 2011,
Wolverine Tube, Inc. has reached agreement with its largest
noteholder, Plainfield Asset Management resolving all differences
over the terms of proposed agreements that will become effective
upon Wolverine's emergence from bankruptcy and reinstating
Plainfield's support for Wolverine's reorganization plan.
* * *
BankruptcyData.com reports that Wolverine Tube prior to the
hearing filed with the U.S. Bankruptcy Court a Third Amended Plan
Supplement for its First Amended Joint Plan of Reorganization.
The Supplement contains the following documents: Amended Form of
Stockholders' Agreement, Amended Form of New First Lien Indenture
and Amended Form of Management Incentive Plan.
About Wolverine Tube
Huntsville, Alabama-based Wolverine Tube, Inc., is a global
manufacturer and distributor of copper and copper alloy tube,
fabricated products, and metal joining products. The Company
currently operates seven facilities in the United States, Mexico,
China, and Portugal. It also has distribution operations in the
Netherlands and the United States.
Wolverine Tube sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 10-13522) on Nov. 1, 2010. Mark E. Felger, Esq.,
and Simon E. Fraser, Esq., at Cozen O'Connor represent the Debtor.
Scott K. Rutsky, Esq., and Adam T. Berkowitz, Esq., at Proskauer
Rose LLP, serve as the Debtor's special corporate and tax counsel.
Deloitte Financial Advisory Services LLP is the Debtor's financial
advisor. Donlin Recano & Company, Inc., is the Debtor's claim
agent. The Debtor disclosed $115 million in total assets and
$237 million in total debts at the time of the filing.
Affiliates Tube Forming, L.P. (Bankr. D. Del. Case No. 10-13523),
Wolverine Joining Technologies, LLC (Bankr. D. Del. Case No.
10-13524), TF Investor Inc. (Bankr. D. Del. Case No. 10-13525),
and WT Holding Company, Inc. (Bankr. D. Del. Case No. 10-13526)
filed separate Chapter 11 petitions.
No official committee of unsecured creditors has been appointed in
the case.
ZALE CORP: Files Form 10-Q; Posts $8.99MM Net Loss in April Qtr.
----------------------------------------------------------------
Zale Corporation filed with the U.S. Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $8.99 million on $411.84 million of revenue for the three
months ended April 30, 2011, compared with a net loss of $12.09
million on $359.84 million of revenue for the same period a year
ago. The Company also reported a net loss of $79.66 million on
$1.36 billion of revenue for the nine months ended April 30, 2011,
compared with a net loss of $65.15 million on $1.27 billion of
revenue for the same period during the prior year.
The Company's balance sheet at April 30, 2011, showed $1.19
billion in total assets, $947.27 million in total liabilities and
$246.03 million in total stockholders' investment.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/fgC2XR
About Zale Corporation
Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) --
http://www.zalecorp.com/-- is a specialty retailer of diamonds
and other jewelry products in North America, operating
approximately 1,900 retail locations throughout the United States,
Canada and Puerto Rico, as well as online. Zale Corporation's
brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers,
Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale
also operates online at http://www.zales.com/,
http://www.zalesoutlet.com/,
http://www.gordonsjewelers.com/and http://www.pagoda.com/
Zale reported a net loss of $93.67 million on $1.62 billion of
revenues for the year ended July 31, 2010, compared with a net
loss of $166.35 million on $1.78 billion of revenues for the same
period a year ago.
As reported by the Troubled Company Reporter on February 10, 2010,
The Deal.com's Sara Behunek reported that analysts said bankruptcy
looms for Zale if it fails to restructure its debt and put in
place a solid merchandising strategy.
ZAMINDER PROPERTIES: Case Summary & 4 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Zaminder Properties, LLC
293 Pleasantview Drive
Midland, PA 15059
Bankruptcy Case No.: 11-23581
Chapter 11 Petition Date: June 3, 2011
Court: United States Bankruptcy Court
Western District of Pennsylvania (Pittsburgh)
Debtor's Counsel: David Z. Valencik, Esq.
CALAIARO & CORBETT, P.C.
Grant Building, Suite 1105
310 Grant Street
Pittsburgh, PA 15219-2230
Tel: (412) 232-0930
Fax: (412) 232-3858
E-mail: dvalencik@calaiarocorbett.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 four largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/pawb11-23581.pdf
The petition was signed by Amy Staaf, president.
ZANETT INC: Incurs $627,800 Net Loss in First Quarter
-----------------------------------------------------
Zanett, Inc., filed with the U.S. Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $627,775 on $12.36 million of revenue for the three months
ended March 31, 2011, compared with net income of $391,992 on
$10.70 million of revenue for the same period a year ago.
The Company's balance sheet at March 31, 2011, showed $28.97
million in total assets, $24.22 million in total liabilities and
$4.74 million in total stockholders' equity.
During the quarter ended March 31, 2011, the Company incurred a
loss from continuing operations after taxes of $627,775 and net
cash used in operations of approximately $100,000. As of
March 31,2011, the Company had an excess of current liabilities
compared to current assets of $5,303,116. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
Amper, Politziner & Mattia, LLP, in New York, expressed
substantial doubt about the Company's ability to continue as a
going concern, following the 2010 financial results. The
independent auditors noted that the Company has incurred a
significant loss from continuing operations, has a working capital
deficit and all of its outstanding debt is either currently
payable or payable within the next twelve months.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/IBfiiz
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.
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
Sept. 30, 2010. The credit facility matured on June 21, 2010.
The Company's line of credit was subject to a forbearance
agreement with BofA.
Zanett Inc. reported a net loss of $1.66 million on $48.04 million
of revenue for the year ended Dec. 31, 2010, compared with a net
loss of $2.32 million on $41.37 million of revenue during the
prior year.
ZANETT INC: Issues $588,200 Amended Promissory Note to Rockport
---------------------------------------------------------------
Zanett, Inc., issued an amended and restated promissory note to
Rockport Investments Ltd. in the principal amount of $588,168 and
bearing interest at a rate of 1.5% per month. The Amended and
Restated Note replaced and terminated the promissory note entered
into between the Company and Rockport on May 25, 2010, as amended
on Aug. 25, 2010, and as further amended on Oct. 20, 2010. The
Amended and Restated Note increased the principal on the Original
Note from $500,000 to $588,168 in order to capitalize the interest
payable under the Original Note.
Interest payments on the Amended and Restated Note are due monthly
beginning on June 7, 2011, and the principal balance of the
Amended and Restated Note and accrued but unpaid interest is due
and payable on Feb. 1, 2014. Upon the occurrence of an "Event of
Default", the entire principal amount of the Amended and Restated
Note and any accrued but unpaid interest thereunder will become
immediately due and payable. An "Event of Default" means the
occurrence of any of the following: (a) default in any payment by
the Company under the Amended and Restated Note when due; (b) sale
of all or substantially all of the Company's assets, or any formal
action in contemplation of the dissolution, liquidation or
termination of the Company's existence; (c) entry of a judgment in
an amount in excess of $100,000 against the Company or attachment
or seizure of or levy upon any material property of the Company;
(d) acceleration of the maturity of any of the Company's
liabilities for borrowed money; or (e) institution of any
proceedings by or against the Company under any law relating to
bankruptcy, insolvency, reorganization or other form of debtor
relief or the Company's making an assignment for the benefit of
creditors, or the appointment of a receiver, trustee, conservator
or other judicial representative for the Company or the Company's
property.
If the Company fails to pay any amounts due under the Amended and
Restated Note on the Maturity Date, the Company must issue to
Rockport 10,000 shares of the Company's common stock, par value
$0.001 per share, for each calendar day that elapses after the
Maturity Date until all amounts due and payable by the Company
under the Amended and Restated Note are paid in full, subject to
any limitations on the amount of Common Stock that may be issued
without shareholder approval or otherwise under NASDAQ Listing
Rule 5635(d) or any successor or similar rule. Assuming the
application of NASDAQ Listing Rule 5635(d), the maximum number of
shares of Common Stock so issuable would equal 19.99% of the
number of shares of Common Stock outstanding immediately prior to
the issuance of the Amended and Restated Note, or 1,852,118
shares.
The Amended and Restated Note is unsecured and subordinated to the
Company's obligations to its senior lender, PNC Bank, National
Association, under the Revolving Credit and Security Agreement by
and among the Company, Zanett Commercial Solutions, Inc., a
wholly-owned subsidiary of the Company, and PNC.
Note Amendment
On May 20, 2011, the Company entered into a first amendment to the
7.95% Convertible Subordinated Note issued by the Company to
Rockport on March 31, 2010, in the principal amount of $7,131,983,
convertible into Common Stock, bearing interest at 7.95% per
annum, payable quarterly in arrears, with a maturity date of
March 31, 2015. Under the Note Amendment, Rockport agreed to
accept in lieu of payment of interest and penalties for the period
from March 31, 2010, to and including March 31, 2011, under the
Convertible Note, the New Rockport Note, and that the Company's
obligations under the New Rockport Note supersede and terminate
the Company's obligations with respect to interest payments under
the Convertible Note from March 31, 2010, to and including March
31, 2011. With the exception of the capitalization of interest
pursuant to the Note Amendment, the Convertible Note remains an
outstanding obligation of the Company.
The Note Amendment is subordinated to the Company's obligations to
PNC under the Credit Agreement.
New Rockport Note
On May 20, 2011, the Company issued a promissory note to Rockport
in the principal amount of $1,212,127 and bearing interest at a
rate of 1.5% per month. The principal of the New Rockport Note
consists of the aggregated interest and penalties in an amount of
$647,127 due to Rockport under the Convertible Note and
capitalized under the New Rockport Note, and $565,000 advanced to
the Company to repay taxes, interest, and penalties due to the IRS
in order to have a lien instituted by the IRS released following
an audit of the Company's tax return for the fiscal year ended
Dec. 31, 2007.
Interest payments on the New Rockport Note are due monthly
beginning on June 7, 2011, and the principal balance of the New
Rockport Note and accrued but unpaid interest is due and payable
on Feb. 1, 2014. Upon the occurrence of an "Event of Default",
the entire principal amount of the New Rockport Note and any
accrued but unpaid interest thereunder will become immediately due
and payable. An "Event of Default" means the occurrence of any of
the following: (a) default in any payment by the Company under the
New Rockport Note when due; (b) sale of all or substantially all
of the Company's assets, or any formal action in contemplation of
the dissolution, liquidation or termination of the Company's
existence; (c) entry of a judgment in an amount in excess of
$100,000 against the Company or attachment or seizure of or levy
upon any material property of the Company; (d) acceleration of the
maturity of any of the Company's liabilities for borrowed money;
or (e) institution of any proceedings by or against the Company
under any law relating to bankruptcy, insolvency, reorganization
or other form of debtor relief or the Company's making an
assignment for the benefit of creditors, or the appointment of a
receiver, trustee, conservator or other judicial representative
for the Company or the Company's property.
The New Rockport Note is subordinated to the Company's obligations
to PNC under the Credit Agreement.
Guazzoni Note
On May 31, 2011, Mr. Bruno Guazzoni, the uncle of the Company's
Chief Executive Officer Company and a holder of 26.2% of the
Company's Common Stock, issued a promissory note to the Company in
the principal amount of $333,849 and bearing interest at a rate of
4.5% per year. Mr. Guazzoni issued the Guazzoni Note to reimburse
the Company for the payment of taxes on Mr. Guazzoni's behalf
following an audit of the Company's 2007 fiscal year taxes by the
IRS that resulted in the IRS determining that certain taxes should
have been withheld from interest payments made to Mr. Guazzoni
under IRS regulations. As described above, the Company made
payment to the IRS and the resulting tax lien was released.
The principal balance and accrued but unpaid interest on the
Guazzoni Note is due and payable on Jan. 24, 2010. Upon the
occurrence of an "Event of Default", the entire principal amount
of the Guazzoni Note and any accrued but unpaid interest
thereunder will become immediately due and payable. An "Event of
Default" means the occurrence of any of the following: (a) default
in any payment by Mr. Guazzoni under the Guazzoni Note when due;
(b) the death of Mr. Guazzoni; (c) entry of a judgment in an
amount in excess of $100,000 against Mr. Guazzoni or attachment or
seizure of or levy upon any material property of Mr. Guazzoni; or
(d) institution of any proceedings by or against Mr. Guazzoni
under any law relating to bankruptcy, insolvency, reorganization
or other form of debtor relief or Mr. Guazzoni's making an
assignment for the benefit of creditors, or the appointment of a
receiver, trustee, conservator or other judicial representative
for Mr. Guazzoni or Mr. Guazzoni's property.
Mr. Guazzoni's repayment obligations are secured by an amount of
Mr. Guazzoni's Common Stock having a value approximately equal to
the principal due under the Guazzoni Note pursuant to a pledge
agreement dated as of the date of the Guazzoni Note.
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.
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
Sept. 30, 2010. The credit facility matured on June 21, 2010.
The Company's line of credit was subject to a forbearance
agreement with BofA.
Zanett Inc. reported a net loss of $1.66 million on $48.04 million
of revenue for the year ended Dec. 31, 2010, compared with a net
loss of $2.32 million on $41.37 million of revenue during the
prior year.
The Company's balance sheet at March 31, 2011, showed $28.97
million in total assets, $24.22 million in total liabilities and
$4.74 million in total stockholders' equity.
Amper, Politziner & Mattia, LLP, in New York, expressed
substantial doubt about the Company's ability to continue as a
going concern, following the 2010 financial results. The
independent auditors noted that the Company has incurred a
significant loss from continuing operations, has a working capital
deficit and all of its outstanding debt is either currently
payable or payable within the next twelve months.
* Automatic Stay Saves Stale Mortgage From Waiver
-------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Boston decided a case
June 9 at the intersection of Section 108 of the Bankruptcy Code
and a state statute of limitations. Bankruptcy law came out on
top.
Mr. Rochelle relates the case involved a mortgage that went into
default in September 2003. The owner went into bankruptcy in 2007
after the lender initiated foreclosure proceedings. Massachusetts
law includes a provision saying that a mortgage is waived if not
enforced within five years of default. The owner, then in
bankruptcy, sued for a declaration that the mortgage became
invalid in September 2008 when the lender hadn't filed an
extension of the mortgage available under Massachusetts law. The
bankruptcy court bought the argument and ruled the mortgage
invalid. The district court reversed.
According to Mr. Rochelle, the 1st Circuit in Boston, in an
opinion written by Circuit Judge Bruce M. Selya, ruled that the
mortgage was saved from a waiver by Section 108, which provides a
tolling of the statute of limitations while a bankruptcy stay is
in effect. Judge Selya didn't accept the owner's argument that
the lender was compelled by state law to file an extension of the
mortgage.
The case is Shamus Holdings LLC v. LBM Financial LLC (In re Shamus
Holdings LLC), 10-2216, 1st U.S. Circuit Court of Appeals
(Boston).
* BOND PRICING -- For Week From June 6 to 10, 2011
--------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
AMBAC INC 9.50 2/15/2021 11.00
AMBAC INC 7.50 5/1/2023 13.00
AMBAC INC 5.95 12/5/2035 12.00
AMBAC INC 6.15 2/7/2087 1.00
INTL LEASE FIN 5.75 6/15/2011 99.39
ARCHSTONE-SMITH 4.00 7/15/2036 91.50
BANK NEW ENGLAND 8.75 4/1/1999 13.50
BANK NEW ENGLAND 9.88 9/15/1999 13.75
BANKUNITED FINL 3.13 3/1/2034 7.00
CAPMARK FINL GRP 5.88 5/10/2012 58.75
CS FINANCING CO 10.00 3/15/2012 3.00
DIRECTBUY HLDG 12.00 2/1/2017 44.00
DUNE ENERGY INC 10.50 6/1/2012 67.00
EDDIE BAUER HLDG 5.25 4/1/2014 4.00
FRANKLIN BANK 4.00 5/1/2027 7.00
FAIRPOINT COMMUN 13.13 4/2/2018 1.25
GREAT ATLANTIC 9.13 12/15/2011 25.75
GREAT ATLA & PAC 6.75 12/15/2012 26.00
HARRY & DAVID OP 9.00 3/1/2013 17.50
ELEC DATA SYSTEM 3.88 7/15/2023 96.00
KEYSTONE AUTO OP 9.75 11/1/2013 40.00
LEHMAN BROS HLDG 6.00 4/1/2011 15.00
LEHMAN BROS HLDG 6.63 1/18/2012 25.50
LEHMAN BROS HLDG 5.25 2/6/2012 25.50
LEHMAN BROS HLDG 6.00 7/19/2012 25.50
LEHMAN BROS HLDG 3.00 11/17/2012 24.25
LEHMAN BROS HLDG 5.00 1/22/2013 24.50
LEHMAN BROS HLDG 5.63 1/24/2013 25.20
LEHMAN BROS HLDG 5.10 1/28/2013 25.00
LEHMAN BROS HLDG 5.00 2/11/2013 24.25
LEHMAN BROS HLDG 4.80 2/27/2013 25.10
LEHMAN BROS HLDG 4.70 3/6/2013 24.63
LEHMAN BROS HLDG 5.00 3/27/2013 24.50
LEHMAN BROS HLDG 5.75 5/17/2013 25.40
LEHMAN BROS HLDG 2.00 8/1/2013 24.38
LEHMAN BROS HLDG 4.80 3/13/2014 25.20
LEHMAN BROS HLDG 5.00 8/3/2014 24.25
LEHMAN BROS HLDG 5.15 2/4/2015 24.25
LEHMAN BROS HLDG 5.25 2/11/2015 25.00
LEHMAN BROS HLDG 8.80 3/1/2015 25.25
LEHMAN BROS HLDG 8.50 8/1/2015 25.38
LEHMAN BROS HLDG 5.00 8/5/2015 24.75
LEHMAN BROS HLDG 6.00 12/18/2015 25.00
LEHMAN BROS HLDG 5.50 4/4/2016 25.75
LEHMAN BROS HLDG 8.05 1/15/2019 25.10
LEHMAN BROS HLDG 8.75 12/21/2021 24.13
LEHMAN BROS HLDG 11.00 6/22/2022 24.50
LEHMAN BROS HLDG 11.00 7/18/2022 24.50
LEHMAN BROS HLDG 11.00 8/29/2022 24.38
LEHMAN BROS HLDG 9.50 12/28/2022 24.63
LEHMAN BROS HLDG 9.50 1/30/2023 24.63
LEHMAN BROS HLDG 10.00 3/13/2023 23.85
LEHMAN BROS HLDG 18.00 7/14/2023 24.63
LEHMAN BROS HLDG 10.38 5/24/2024 24.50
LOCAL INSIGHT 11.00 12/1/2017 2.25
MAJESTIC STAR 9.75 1/15/2011 14.75
NEBRASKA BOOK CO 8.63 3/15/2012 84.25
NEWPAGE CORP 10.00 5/1/2012 37.75
NEWPAGE CORP 12.00 5/1/2013 10.50
RESTAURANT CO 10.00 10/1/2013 15.00
PROTECTIVE LIFE 5.00 6/15/2011 99.53
RIVER ROCK ENT 9.75 11/1/2011 91.16
RASER TECH INC 8.00 4/1/2013 29.76
SYMANTEC CORP 0.75 6/15/2011 100.00
THORNBURG MTG 8.00 5/15/2013 10.00
TRANS-LUX CORP 8.25 3/1/2012 14.00
TRANS-LUX CORP 9.50 12/1/2012 15.25
TOUSA INC 9.00 7/1/2010 20.00
TIMES MIRROR CO 7.25 3/1/2013 56.08
MOHEGAN TRIBAL 8.38 7/1/2011 91.00
TRICO MARINE 3.00 1/15/2027 1.00
TEXAS COMP/TCEH 7.00 3/15/2013 29.00
VIRGIN RIVER CAS 9.00 1/15/2012 48.50
VMI-CALL06/11 6.88 5/1/2014 101.15
WCI COMMUNITIES 7.88 10/1/2013 0.40
WCI COMMUNITIES 4.00 8/5/2023 1.57
WILLIAM LYONS 7.63 12/15/2012 59.25
WILLIAM LYON INC 10.75 4/1/2013 58.00
WOLVERINE TUBE 15.00 3/31/2012 40.00
WASH MUT BANK NV 5.95 5/20/2013 0.25
*********
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
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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.
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