/raid1/www/Hosts/bankrupt/TCR_Public/110718.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, July 18, 2011, Vol. 15, No. 197
Headlines
10929 VANOWEN: Case Summary & 12 Largest Unsecured Creditors
ALLEN FAMILY: Has Approval for Executive Bonuses
ALLEN FAMILY: Court Approves Womble Carlyle as Panel's Counsel
ALLEN FAMILY: Committee Taps J.H. Cohn as Financial Advisors
ALLEN FAMILY: Wins Court Nod for Young Conaway as Bankr. Counsel
ALLEN FAMILY: FTI Consulting OK'd as Chief Restructuring Officer
AMBAC FINANCIAL: Suit Against JPMorgan Reinstated on Appeal
AMERICAN COMMERCE: Posts $69,610 Net Loss in May 31 Quarter
AMR CORP: To Announce Second Quarter 2011 Results on July 20
AMT LLC: Meeting of Creditors Continued Sine Die
AMT LLC: U.S. Trustee Unable to Form Committee
APEX DIGITAL: Has Until Aug. 12 to Propose Chapter 11 Plan
APPLIED DNA: Signs Agreement with Disc to Protect Packaging
APOLLO MEDICAL: Amends Stock Purchase Pact with Aligned, et al.
ARDENT HEALTH: S&P Affirms 'B' Credit Rating; Outlook Stable
ARDENT HEALTH: Moody's Affirms 'B2' Corporate Family Rating
ATTITUDE DRINKS: Defaults Under $268,000 Short-Term Bridge Notes
BAYVIEW HOLDINGS: Judge Rejects Plan; Floyd's Can Foreclose
BELTWAY ONE: Case Summary & 9 Largest Unsecured Creditors
BERNARD L MADOFF: Trustee's Suit v. UBS Removed to District Court
BIG WHALE: Wells Fargo Objects to Plan Confirmation
BIOLASE TECHNOLOGY: Expects to Report $12MM Revenue in Q2 2011
BLUEGREEN CORP: Relies on NYSE's Controlled Company Exemption
BLUEKNIGHT ENERGY: To Hold Special Meeting on Sept. 14
BOCA BRIDGE: Can Access NorthStar's Cash Collateral Until July 31
BORDERS GROUP: Still Looking for Going Concern Buyers on 11th Hour
BORDERS GROUP: Savings Plan Files 2010 Annual Report
BOWLES SUB PARCEL: Files Schedules of Assets and Debts
C-PV323, LLC: Voluntary Chapter 11 Case Summary
CAPISTRANO TERRACE: Case Summary & 20 Largest Unsecured Creditors
CARESTREAM HEALTH: Bank Debt Trades at 6% Off in Secondary Market
CARGO TRANSPORTATION: Submits Reporting Requirements for Cash Use
CARGO TRANSPORTATION: Wants to Finalize Negotiations with Comerica
CARGO TRANSPORTATION: Files Schedules of Assets & Liabilities
CATALYST PAPER: Appoints Brian Johnston as VP Technical Services
CHEYENNE HOTELS: To Employ Thomas F. Quinn as Counsel
CHEYENNE HOTELS: Sec. 341 Creditors' Meeting Set for August 1
CHEYENNE HOTELS: Wants Homewood Suites Back; Wells Fargo Objects
CHOCTAW RESORT: Moody's Lowers CFR to 'Caa2', Further Cut Looms
CIRCLE ENTERTAINMENT: Borrows $900,000 from Directors, et al.
CIRCUIT CITY: Auctioning Patent Portfolio in August
CIRCUIT CITY: DIVX Patent Portfolio to be Sold at Auction
CITRUS TOWER: Case Summary & 11 Largest Unsecured Creditors
CLAIRE'S STORES: Bank Debt Trades at 8% Off in Secondary Market
CONTECH CONST'N: Bank Debt Trades at 17% Off in Secondary Market
CONTINENTAL ALLOYS: S&P Puts 'B-' Corp. Rating on Watch Positive
CRYSTAL CATHEDRAL: Drops Greenlaw as Stalking-Horse Bidder
CROWN MEDIA: Closes $300 Million of 10.5% Senior Notes Offering
DELIVERENCE CHRISTIAN: Case Summary & Creditors List
DELTA PETROLEUM: To Effect a 1-for-10 Reverse Stock Split
DELTATHREE INC: Receives $200,000 from D4 Holdings
DIAMOND RANCH: Incurs $547,732 Net Loss in Fiscal 2011
DILLARD LAND: Court Dismisses Second Chapter 11 Case
DOLE FOOD: S&P Rates $900MM Senior Secured Term Loans at 'BB-'
EARTH SEARCH: Incurs $1.85 Million Net Loss in Fiscal 2011
EMMIS COMMUNICATIONS: Incurs $693,000 Net Loss in May 31 Quarter
EMMIS COMMUNICATIONS: Moody's Places 'Caa2' on Review for Upgrade
EMPIRE TODAY: S&P Cuts Corp. Credit Rating to B-; Outlook Stable
ENCINO CORPORATE: Has Access to Wells Fargo's Cash Until Sept. 30
ENERGY FUTURE: Expects $400MM Non-Cash Impairment Charge in Q3
FENTON SUB PARCEL: Cash Collateral Hearing Set for July 20
FENTON SUB PARCEL: Hires Fredrikson & Byron as Bankruptcy Counsel
FENTON SUB PARCEL: Sec. 341 Creditors' Meeting Set for Aug. 8
FENTON SUB PARCEL: Files Schedules of Assets and Debts
FIRST FEDERAL: Christopher Wewers Appointed EVP and COO
FIRST PEOPLES BANK: Closed; Premier Assumes All Deposits
FIRST SECURITY: Hires Crowe Horwath as New Accountants
FOREST CITY: S&P Rates $300-Mil. Convertible Notes at 'B-'
GATEHOUSE MEDIA: Bank Debt Trades at 65% Off in Secondary Market
GATEWAY HOTEL: Secured Lender Says Plan Can't Be Confirmed
GENERAL MARITIME: Amends 2011 Credit Facilities
GM PINE: Has Until July 29 to File Schedules and Statements
GM PINE: Wants Receiver Turnover Property for Plan Testing
GM PINE: Meeting of Creditors Set for Aug. 9
GM PINE: Wants to Use Capmark Cash Collateral to Fund Operations
GRAPHIC PACKAGING: Bank Debt Trades at 1% Off in Secondary Market
GREAT ATLANTIC: SuperFresh Sale No Long Prepayment Event in Loans
GSC GROUP: Court Approves Togut Segal as Conflicts Counsel
GSC GROUP: Minority Lenders to Appeal Sale to Black Diamond
HAMPTON ROADS: To Sell 7 North Carolina Branches to ECB Bancorp
HAMPTON ROADS: Ronald Day Resigns as Bank President
HARIKRISHNA INVESTMENT: Case Summary & 20 Largest Unsec Creditors
HAWKER BEECHCRAFT: Bank Debt Trades at 18% Off in Secondary Market
HAWKER BEECHCRAFT: Bank Debt Trades at 100.10% in Secondary Market
HEALTH MANAGEMENT: Bank Debt Trades at 3% Off in Secondary Market
HENNIGES AUTOMOTIVE: Moody's Assigns 'B2' CFR, Outlook Stable
HENNIGES AUTOMOTIVE: S&P Assigns Prelim. 'B' Corp. Credit Rating
HIGH TRUST BANK: Closed; Ameris Bank Assumes All Deposits
HILLSIDE VALLEY: Consents Altman Mgt. as Receiver for Property
HOLLAND HOME: Fitch Affirms Rating on Revenue Bonds at 'BB+'
HRD CORP: Marcus Oil Files for Ch. 11 after Attachment
IA GLOBAL: CEO Hoekstra's Employment Extended to Sept. 4
IL LUGANO: Court Authorizes Use of Deutsche Bank's Cash Collateral
IMG WORLDWIDE: S&P Affirms Corporate Credit Rating at 'B'
INFUSION BRANDS: Inks $3 Million Securities Purchase Agreement
INMAR INC: Moody's Assigns 'B1' CFR, Outlook Stable
INSIGHT GLOBAL: S&P Affirms CCR at 'B+'; Outlook Stable
INTEGRATED FREIGHT: Incurs $7.76 Million Net Loss in Fiscal 2011
INTERNATIONAL MARINE: Voluntary Chapter 11 Case Summary
ISAACSON STRUCTURAL: U.S. Trustee Opposes Working Capital Loan
KIEBLER RECREATION: Trustee Proposes Asset Sale Bid Procedures
KNOLLWOOD PROPERTIES: Case Summary & Largest Unsecured Creditor
KRATOS DEFENSE: S&P Retains 'B+' Corporate Credit Rating
KRATOS DEFENSE: S&P Affirms Corporate Credit Rating at 'B+'
KRONOS INTERNATIONAL: Moody's Raises Corp. Family Rating to 'B1'
LAX ROYAL: Has Until Aug. 17 on Lease-Related Decision
LEE ENTERPRISES: St. Louis Post-Dispatch Sweetens Refinancing
LEHMAN BROTHERS: LBI Settles Dispute With Solomon
LEHMAN BROTHERS: LBI Resolves REPO Claim Objections
LEHMAN BROTHERS: Creditors Transfer $1-Bil. in Claims in May
LEHMAN BROTHERS: Creditors Transfer $4-Bil. in Claims in June
LION COPOLYMER: Moody's Assigns 'B2' Corporate Family Rating
LION COPOLYMER: S&P Assigns Prelim. 'B+' Corporate Credit Rating
LIVEDEAL INC: Submits Plan to Regain Compliance With Nasdaq
LOCATION BASED TECH: Incurs $1.18-Mil. Net Loss in May 31 Quarter
LOCATION BASED TECH: Partners with Telcel & America Movil
LOS ANGELES DODGERS: Selig Offers $150-Mil. in Unsecured Financing
MANAGED HEALTH CARE: Moody's Upgrades Corp. Family Rating to B2
MERIT GROUP: Junior Lender Allowed to Bid Debt for Assets
MMRGLOBAL INC: Inks Equipment Purchase Agreement with Eastman
MUNICIPAL MORTGAGE: CFO Kay Resigns to Build Consulting Practice
NEBRASKA BOOK: Parent Posts $98.3-Mil. Net Loss in Fiscal 2011
NEBRASKA BOOK: Projects Negative Operating Cash Flow
NEW LEAF: Restates Quarterly Reports to Correct Errors
NIGRO HQ: Case Summary & 11 Largest Unsecured Creditors
NORTHCORE TECHNOLOGIES: Gets $1.3MM from Warrants Exercise
OCWEN FINANCIAL: S&P Affirms Counterparty Credit Rating at 'B'
ONE GEORGIA BANK: Closed; Ameris Bank Assumes All Deposits
OPEN SOLUTIONS: Bank Debt Trades at 13% Off in Secondary Market
OPTI CANADA: Moody's Lowers Default Rating to 'D' on CCAA Filing
PACIFIC GOLD: Silberstein Ungar Raises Going Concern Doubt
PEGASUS RURAL: Court Approves Elliott Greenleaf as Bankr. Counsel
PEGASUS RURAL: Court Approves NHB as Financial Advisors
PERKINS & MARIE: Files Plan of Reorganization
PETTERS COMPANY: Consents to PBE's Cash Collateral Use
PLATINUM STUDIOS: Board Accepts Resignation of CFO L. White
QUANTUM FUEL: Feels the Heat as Maturities Loom
R&G FINANCIAL: Wants Solicitation Exclusivity Until Oct. 31
RANCHO HOUSING: Trustee Wants Snell & Wilmer Employment Denied
RANCHO HOUSING: Files New List of Largest Unsecured Creditors
RCC SOUTH: Can Continue Using Cash Collateral Thru July 31
ROBERTS LAND: Court Approves Wendell Wheeler as Accountant
ROBERTS LAND: Court Approves Agreement with Community State Bank
ROYAL HOSPITALITY: Harry Snyder Appointed as Bankruptcy Mediator
RUTHERFORD CONSTRUCTION: Motley's Auctions OK'd as Auctioneer
RUTHERFORD CONSTRUCTION: Selling Personal Assets to Brittany Knoll
SALPARE BAY: $750,000 DIP Loan Hearing Today
SEASON'S AT BIRDNEK: Schedules Filing Extended Until July 21
SEQUENOM INC: To Offer 4.0 Million Shares Under Incentive Plan
SHASTA LAKE: Case Summary & 20 Largest Unsecured Creditors
SHILO INN: OneWest Bank Protests Use of Cash Collateral
SIGNATURE STYLES: Wins Approval of New Sale, Financing Terms
SIGNATURE STYLES: Spiegel Catalog Auction Set for Sept. 1
SOUTH EDGE: Court Approves Advantage Civil as Construction Manager
SOUTH EDGE: Ch. 11 Trustee Wants Account and Info Turnover
SOVRAN LLC: Files Schedules of Assets & Liabilities
SOVRAN LLC: Meeting of Creditors on Aug. 11
SUMMIT BANK: Closed; The Foothills Bank Assumes All Deposits
SUNRISE REAL ESTATE: Extends Closing Date of Better Time Pact
SWISS CHALET: Taps Luis R. Carraquillo as Financial Consultant
SWISS CHALET: Court Approves Cash Collateral Agreement with CPG/GS
TAO-SAHI: Has Until Aug. 31 to Use Cash Collateral
TAYLOR BEAN: Chapter 11 Plan Confirmed by Court
TEDCO ELECTRIC: Court Remands Fight Over Construction Payments
TEN SAINTS: Case Summary & 20 Largest Unsecured Creditors
TERRA TELECOM: Ex-Pres. Protests New Evidence in Haiti Bribe Case
TERRESTAR NETWORKS: Committee Seeks Claims Recharacterization
TONGJI HEALTHCARE: EFP Rotenberg Appointed as Accountants
TXU CORP: Bank Debt Trades at 23% Off in Secondary Market
USA UNITED: NYC Bus Operator Fighting for Survival
VANGUARD HEALTH: Bank Debt Trades at 0.02% Off in Secondary Market
VITRO SAB: Decision This Week on Enforcing Mexican Bankruptcy
WARNER MUSIC: Fitch Withdraws 'B+' Issuer Default Rating
WASHINGTON MUTUAL: Hearing for Settlement-Based Plan Begins
WATER PIK: S&P Assigns Preliminary 'B' Corporate Credit Rating
WAXESS HOLDINGS: Signs $3.12MM Subscription Pacts with Investors
WEIRTON MEDICAL: Fitch Affirms Rating on Revenue Bonds at 'BB'
YRC WORLDWIDE: Expects $4.92 Million Operating Revenue in 2011
* Estate Property Revests in Bankrupt on Confirmation
* 6th Circ. Panel Revives Firm Fight For Ch. 11 Retainer
* S&P's Global Corporate Default Tally Remains at 18
* Failed Bank Tally Now 55 This Year as 4 Banks Shuttered Friday
* Ex-Kirkland Partner Pleads Not Guilty to Tax Charges
* Terra Firma Lead of Investor Relations Hewett Joins SVP
* BOND PRICING -- For Week From July 4 - 8, 2011
*********
10929 VANOWEN: Case Summary & 12 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: 10929 Vanowen Partnership
10929 Vanowen Street, Suite 183
North Hollywood, CA 91605
Bankruptcy Case No.: 11-18407
Chapter 11 Petition Date: July 12, 2011
Court: United States Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Maureen Tighe
Debtor's Counsel: William H. Brownstein, Esq.
WILLIAM H. BROWNSTEIN & ASSOCIATES, P.C.
1250 Sixth St., Suite 205
Santa Monica, CA 90401
Tel: (310) 458-0048
Fax: (310) 576-3581
E-mail: Brownsteinlaw.bill@gmail.com
Scheduled Assets: $2,400,000
Scheduled Debts: $6,930,579
A list of the Company's 12 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cacb11-18407.pdf
The petition was signed by Charles Miseroy, general partner.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
10919 Vanowen Partnership 11-14431 4/08/2011
ALLEN FAMILY: Has Approval for Executive Bonuses
------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Allen Family Foods Inc. received approval from the
bankruptcy judge on July 13 to establish a $200,000 bonus program
for 10 executives and managers. An auction will be held July 25
to test whether there is a better offer than the $30 million
contract with poultry producer Montaire Farms of Delaware Inc.
Montaire will also pay the value of inventory.
About Allen Family Foods
Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry
company.
Allen Family Foods and two affiliates, Allen's Hatchery Inc. and
JCR Enterprises Inc., filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 11-11764) on June 9, 2011. It estimated
assets and liabilities between $50 million and $100 million in its
petition.
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young,
Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as
counsel to the Debtors. FTI Consulting is the financial advisor.
BMO Capital Markets is the Debtors' investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC,
serve as counsel for the official committee of unsecured
creditors. J.H. Cohn LLP serves as the Committee's financial
advisor.
Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven
creditors to serve on an Official Committee of Unsecured Creditors
in the Debtors' cases.
ALLEN FAMILY: Court Approves Womble Carlyle as Panel's Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Committee of Unsecured Creditors of Allen Family
Foods Inc. and its debtor-affiliate to retain Womble Carlyle
Sandridge & Rice PLLC as counsel.
The firm will, among other things:
a) provide legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed;
b) assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the Debtors,
the operation of the Debtors' businesses, potential claims,
and any other matters relevant to the case, to the sale of
assets or to the formulation of a plan of reorganization;
c) participate in the formulation of a Plan;
d) provide legal advice as necessary with respect to any
disclosure statement and Plan filed in this case and with
respect to the process for approving or disapproving
disclosure statements and confirming or denying confirmation
of a Plan; and
e) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers.
The firm will charge the Debtors based on the hourly rates of its
professionals:
Members of the Firm $315 to $650
Of Counsel $300 to $500
Associates $200 to $445
Senior Counsel $350 to $375
Counsel $250 to $430
Paralegals $100 to $270
The Committee assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Allen Family Foods
Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry
company.
Allen Family Foods, along with two affiliates, filed for Chapter
11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on
June 9, 2011. 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.
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young,
Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as
counsel to the Debtors. FTI Consulting is the financial advisor.
BMO Capital Markets is the Debtors' investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC,
serve as counsel for the official committee of unsecured
creditors. J.H. Cohn LLP serves as the Committee's financial
advisor.
Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven
creditors to serve on an Official Committee of Unsecured Creditors
in the Debtors' cases.
ALLEN FAMILY: Committee Taps J.H. Cohn as Financial Advisors
------------------------------------------------------------
Allen Family Foods Inc.'s Official Committee of Unsecured
Creditors seeks permission from the U.S. Bankruptcy Court for the
District of Delaware to retain J.H. Cohn LLP as its financial
advisors.
JHC will perform financial advisory services for the Committee.
J.H. Cohn will charge the Debtor's estates in accordance with its
hourly rates. JHC will also seek reimbursement for its hourly
professional charges and disbursements.
About Allen Family Foods
Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry
company.
Allen Family Foods, along with two affiliates, filed for Chapter
11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on
June 9, 2011. 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.
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young,
Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as
counsel to the Debtors. FTI Consulting is the financial advisor.
BMO Capital Markets is the Debtors' investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC,
serve as counsel for the official committee of unsecured
creditors. J.H. Cohn LLP serves as the Committee's financial
advisor.
Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven
creditors to serve on an Official Committee of Unsecured Creditors
in the Debtors' cases.
ALLEN FAMILY: Wins Court Nod for Young Conaway as Bankr. Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Allen Family Foods, Inc., and its affiliated to employ Young
Conaway Stargatt & Taylor, LLP as their bankruptcy counsel, nunc
pro tunc to the Petition Date.
As reported in the July 4, 2011 edition of the Troubled Company
Reporter, the Debtors have tapped Young Conaway as their attorneys
because of the firm's extensive knowledge, expertise and
experience in the field of debtors and creditors' rights and
business reorganizations under Chapter 11 of the Bankruptcy Code,
explains Brian G. Hildreth, vice president and secretary-treasurer
of Allen Family Foods, Inc.
The professional services that Young Conaway will render to the
Debtors include, but will not be limited to:
(a) providing legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their business and management of their
properties;
(b) guiding the disposition of the Debtors' assets through an
orchestrated sale process;
(c) preparing on behalf of the Debtors necessary applications,
motions, answers, orders, reports and other legal papers;
(d) appearing in Court and otherwise protecting the interests
of the Debtors before the Court; and
(e) performing all other legal services for the Debtors which
may be necessary and proper in these proceedings.
Young Conaway will be paid on an hourly basis, and will be
reimbursed for actual, necessary expenses and other charges.
The principal attorneys and paralegal presently designated to
represent the Debtors and their current standard hourly rates are:
Robert S. Brady $675
Sean T. Greecher $370
Andrew L. Magaziner $290
Brenda Walters $240
Mr. Hildreth related that Young Conaway was retained on March 10,
2011, pursuant to the terms of the parties' engagement agreement.
Young Conaway received an initial retainer of $25,000 on March 17,
2011, and additional retainer supplements of $25,000 and $53,117
on April 6, 2011, and June 8, 2011. These amounts were received
in connection with the planning and preparation for a potential
Chapter 11 proceeding and the Firm's proposed postpetition
representation of the Debtors, he explains. The entire Retainer
has been applied to the prepetition balance existing as of the
Petition Date to satisfy the legal fees and expenses incurred in
connection with the filing of these Chapter 11 cases.
Mr. Brady assured the Court that Young Conaway is a "disinterested
person" as that phrase is defined in Section 101 (14) as modified
by Section 1107 (b) of the Bankruptcy Code.
About Allen Family Foods
Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry
company.
Allen Family Foods, along with two affiliates, filed for Chapter
11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on
June 9, 2011. 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.
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young,
Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as
counsel to the Debtors. FTI Consulting is the financial advisor.
BMO Capital Markets is the Debtors' investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC,
serve as counsel for the official committee of unsecured
creditors. J.H. Cohn LLP serves as the Committee's financial
advisor.
Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven
creditors to serve on an Official Committee of Unsecured Creditors
in the Debtors' cases.
ALLEN FAMILY: FTI Consulting OK'd as Chief Restructuring Officer
----------------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized Allen Family Foods, Inc., et al.,
to employ FTI Consulting, Inc., as their chief restructuring
officer.
The Court ordered that the first quarterly report will be due on
Sept. 15, 2011, and will cover the period up to and including
Aug. 31, 2011. FTI will file the quarterly report in three month
intervals thereafter.
As reported in the Troubled Company Reporter on July 7, 2011, FTI
is expected to, among other things:
-- assist in the development and implementation of cash
management strategies, tactics and processes;
-- work with the management to further identify and implement
both short-term and long-term value maximizing and liquidity
generating initiatives; and
-- assist management in the publication of a rolling 13 week
cash flow model which is updated with the actual results for
the most recent week compared to the plan.
The Debtor related that FTI fees will be billed on an hourly
blended rate of $475.
FTI received these amounts as retainer (i) $50,000 on June 6, and
(ii) $100,000 on June 7. FTI applied $89,919 of outstanding
prepetition fees and expenses to the cash on account. At present,
there is $61,070 remaining cash on account.
To the best of the Debtors' knowledge, FTI is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Allen Family Foods
Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry
company.
Allen Family Foods, along with two affiliates, filed for Chapter
11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on
June 9, 2011. 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.
Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young,
Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as
counsel to the Debtors. FTI Consulting is the financial advisor.
BMO Capital Markets is the Debtors' investment banker. Epiq
Bankruptcy Solutions LLC is the claims and notice agent.
Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC,
serve as counsel for the official committee of unsecured
creditors. J.H. Cohn LLP serves as the Committee's financial
advisor.
Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven
creditors to serve on an Official Committee of Unsecured Creditors
in the Debtors' cases.
AMBAC FINANCIAL: Suit Against JPMorgan Reinstated on Appeal
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a $1 billion lawsuit against JPMorgan Chase
Investment Management Inc. was reinstated July 14 by a New York
State appellate court in Manhattan.
The plaintiff, Ambac Assurance UK Ltd., alleged in its complaint
that JPMorgan, serving as investment adviser, continued investing
in subprime mortgages when the bank's senior management had said
publicly that it was "mostly exiting the business of securitizing
subprime mortgages." Ambac insured bonds backed by mortgages
selected by JPMorgan. The agreement called for the bank to pick
investments "to obtain reasonable income while providing a high
level of safety and quality." Ambac alleged that the
$1.65 billion of investments selected by JPMorgan lost $1 billion
in value in "just 30 months."
The appellate court said it was an error for the trial court to
dismiss the suit last year. Dismissal was based on Ambac's
admission that New York-based JPMorgan didn't invest in any class
of assets beyond what was permitted under the investment advisory
agreement. The five judges on the Appellate Division, First
Department, said that JPMorgan "continued to invest in securities
which it knew were entirely incompatible with plaintiff's
investment objective and stated goal." Consequently, the
complaint sufficiently alleged that the bank's conduct amounted to
"gross negligence or willful misconduct."
The case is Ambac Assurance UK Ltd. v. JPMorgan Chase Investment
Management Inc., 2011-05942, New York State Supreme Court,
Appellate Division First Department (Manhattan).
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed $30.05 billion in total assets,
$31.47 billion in total liabilities, and a $1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of ($394.5 million) and total liabilities of
$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about $1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
AMERICAN COMMERCE: Posts $69,610 Net Loss in May 31 Quarter
-----------------------------------------------------------
American Commerce Solutions, Inc., reported a net loss of $69,610
on $677,586 of revenue for the three months ended May 31, 2011,
compared with a net loss of $65,035 on $655,314 of revenue for the
three months ended May 31, 2010.
The Company's balance sheet at May 31, 2011, showed $5.05 million
in total assets, $4.66 million in total liabilities, and
stockholders' equity of $393,355.
As reported in the TCR on June 6, 2011, Peter Messineo, CPA, of
Palm Harbor, Florida, expressed substantial doubt about American
Commerce Solutions' ability to continue as a going concern,
following the Company's results the fiscal year ended Feb. 28,
2011. Mr. Messineo noted that the Company has incurred recurring
losses from continuing operations, has negative working capital
and has used significant cash in support of its operating
activities. Additionally, as of February 2011 the Company is in
default of several notes payable.
A copy of the Form 10-Q is available at http://is.gd/mveHK5
Bartow, Florida-based American Commerce Solutions, Inc., is a
multi-industry holding company for its operating subsidiaries. As
of the close of its most recently completed fiscal year end, the
Company had one wholly owned subsidiary operating in the
manufacturing segment. The operating subsidiary is International
Machine and Welding, Inc., located in Bartow, Florida.
International Machine and Welding, Inc., provides specialized
machining services for heavy industry.
AMR CORP: To Announce Second Quarter 2011 Results on July 20
------------------------------------------------------------
AMR Corporation anticipates announcing second quarter 2011
earnings on Wednesday, July 20, 2011. In conjunction with the
announcement, on that date AMR will host a conference call with
the financial community at 2pm Eastern Time. During this
conference call, senior management of AMR will review, among other
things, details of AMR's second quarter financial results, the
industry environment, recent strategic initiatives, the revenue
environment, cash flow results, liquidity measures, capital
requirements and will provide an outlook for the future.
A live webcast of this call will be available on the Investor
Relations page of the American Airlines Web site
(http://www.aa.com/). A replay of the webcast will also be
available for several days following the call.
About AMR Corporation
Headquartered in Fort Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company's balance sheet at March 31, 2011, showed
$27.11 billion in total assets, $31.06 billion in total
liabilities, and a $3.95 billion stockholders' deficit.
AMR recorded a net loss of $471 million in the year 2010, a net
loss of $1.5 billion in 2009, and a net loss of $2.1 billion in
2008.
* * *
AMR carries a 'CCC' issuer default rating from Fitch Ratings,
'Caa1' corporate family and probability of default ratings from
Moody's, and a 'B-' corporate credit rating from Standard &
Poor's.
In November 2010, Standard & Poor's Ratings Services revised its
outlook on AMR Corp. and its major operating subsidiary, American
Airlines Inc., to stable from negative, based on AMR's improved
operating performance, which has bolstered credit quality. S&P
also affirmed its 'B-' corporate credit rating and most issue
ratings on the two companies and lowered selected ratings on
American's enhanced equipment trust certificates.
AMT LLC: Meeting of Creditors Continued Sine Die
------------------------------------------------
The U.S. Trustee for Region 21 has continued the meeting of
creditors in the Chapter 11 case of AMT LLC to a future date.
The U.S. Trustee will file a separate notice when the date of the
meeting is determined.
The 11 U.S.C. Sec. 341(a) meeting of creditors was originally
scheduled for June 30, 2011, at 11:30 a.m. at Pensacola (Rm. 66,
Winston E. Arnow Fed. Bldg., 100 N. Palafox St.
AMT, LLC, in Destin, Florida, filed for Chapter 11 bankruptcy
(Bankr. N.D. Fla. Case No. 11-30933) on May 27, 2011. Judge
William S. Shulman presides over the case. J. Steven Ford, Esq.,
at Wilson, Harrell, Farrington, serves as the Debtor's counsel.
In its petition, the Debtor estimated $10 million to $50 million
in assets and $1 million to $10 million in debts. The petition
was signed by Michael Smallwood, its manager.
AMT LLC: U.S. Trustee Unable to Form Committee
-----------------------------------------------
Until further notice, the United States Trustee will not appoint a
committee of creditors in the Chapter 11 case of AMT, LLC pursuant
to 11 U.S.C. Sec. 1102 filed by United States Trustee.
The U.S. Trustee reserves the right to appoint such a committee
should interest develop among the creditors.
AMT, LLC, in Destin, Florida, filed for Chapter 11 bankruptcy
(Bankr. N.D. Fla. Case No. 11-30933) on May 27, 2011. Judge
William S. Shulman presides over the case. J. Steven Ford, Esq.,
at Wilson, Harrell, Farrington, serves as the Debtor's counsel.
The Debtor disclosed $30,679,648 in assets and $5,060,823 in
liabilities as of the Chapter 11 filing. The petition was signed
by Michael Smallwood, its manager.
APEX DIGITAL: Has Until Aug. 12 to Propose Chapter 11 Plan
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
extended Apex Digital, Inc.'s exclusive periods to file solicit
acceptances for the proposed chapter 11 plan until Aug. 12, 2011,
and Oct. 11, respectively.
As reported in the Troubled Company Reporter on June 28, 2011, in
its extension request, the Debtor related that it needs more time
to discuss with the Official Committee of Unsecured Creditors and
its secured creditor, Avision Technology Co. Limited, the
potential terms of a plan.
Walnut, California-based Apex Digital, Inc. -- aka AW XEPA
Technologies Inc., AW Apex R&D Shangai, AW Apex, AW E2Go, AW
Entertainment to Go -- is a privately held company that provides
and markets consumer electronics, including high-definition LCD
televisions, home entertainment media devices, solar powered
lights and digital set top boxes.
Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., in Los
Angeles, California, represents the Debtor. The Debtor estimated
assets and debts at $10 million to $50 million as of the Petition
Date.
APPLIED DNA: Signs Agreement with Disc to Protect Packaging
-----------------------------------------------------------
Applied DNA Sciences, Inc., and Disc Graphics announce the signing
of an exclusive distribution agreement. Disc Graphics has been
granted rights to distribute a unique DNA marker exclusively for
the folding carton offset print sector and non-exclusively for
pressure sensitive labels in North America. APDN received an
initial payment from Disc Graphics and would receive minimum
payments annually to maintain exclusivity.
Unique Taggants
Disc Graphics is using unique DNA taggants, developed specifically
for them by APDN, in its labels and packaging business. Disc
Graphics is well known in the industry for creating custom
solutions to address their customers' needs and the use of DNA
taggants offers a forensic package which will differentiate their
product from competitors.
Disc Graphics has a dedicated sales force, which will be trained
by APDN, with extensive selling experience to promote this
technology. This represents APDN's first entry into the packaging
market, with an initiative of potentially enormous scale. APDN is
prepared to fulfill all needs, even as it grows in many other
market verticals simultaneously.
Counterfeit Packaging
The scourge of counterfeiting in packaging has greatly intensified
in recent years. Counterfeiting has spiked, causing detrimental
health concerns for consumers, safety concerns for law enforcement
agencies, and financial concerns for businesses worldwide. As a
result, the global anti-counterfeit packaging market will reach
about $82.2 billion by the year 2015, according to California-
based Global Industry Analysts Inc.
DNA taggants are the most advanced and secure technology available
to the printing and packaging industries to combat counterfeit
products. APDN's SigNature(R) DNA taggants offer a high level of
security and flexibility in a cost-effective and easy-to-use
format to suit the requirements and budget of any company.
"This agreement leverages DISC's broad customer base of high value
brands and offers us a leading edge, forensic anti-counterfeit
solution to combat the growing problem of counterfeit and grey
market goods entering the supply and distribution chain,"
commented Margaret Krumholz, President of DISC. "Packaging is on
the front line of fighting counterfeiters and we are excited to
make DNA an integral part of our overarching package security
program. Our core customers including major film studios,
pharmaceutical manufacturers, fragrance and luxury brand companies
all experience market erosion from counterfeit products and are
searching for weapons to battle this multi-billion dollar
problem."
Aside from the loss of revenue, one of the major issues with
counterfeits is that while they might look identical, if the
counterfeiter has used an inferior grade of material and the
product fails, the perception of poor quality falls back on the
original manufacturer. Steps are being taken at all stages of the
manufacturing and distribution process to address the
counterfeiting scourge.
"APDN can provide the means necessary to authenticate packaging
and labels on all products including pharmaceuticals where a
counterfeit product can cause illness or even death. Working with
DISC will provide APDN with an introduction to brands and
companies, expanding the exposure and market reach of the company.
We are excited to share our technology with this market leader and
believe that this will open up additional markets and customers
for both companies," commented Dr. James Hayward, APDN President
and CEO.
About DISC
DISC is a leading producer of packaging and print for the
entertainment media, beauty, healthcare, private label and
consumer products industries. Headquartered in Hauppauge, New
York, DISC is a privately held company whose manufacturing
facilities in California, New Jersey and New York adhere to strict
ISO 9001:2008 and FDA cGMP standards. FSC Chain-of-Custody
certified since 2007 and an EPA Green Power Partner, the company
promotes sustainable packaging practices through its DISCover
Green program. DISC offers a range of advanced capabilities for
prepress and design services, digital, flexo and offset printing,
and finishing and converting for paperboard, plastic and mini-
flute corrugate packaging.
About Applied DNA
Stony Brook, N.Y.-based Applied DNA Sciences, Inc., is principally
devoted to developing DNA embedded biotechnology security
solutions in the United States.
The Company's balance sheet at March 31, 2011, showed
$1.23 million in total assets, $3.36 million in total liabilities,
all current, and a $2.12 million total stockholders' deficiency.
* * *
As reported in the Troubled Company Reporter on Dec. 21, 2010,
RBSM LLP, in New York, expressed substantial doubt about Applied
DNA Sciences' ability to continue as a going concern, after
auditing the Company's financial statements for fiscal year ended
Sept. 30, 2010. The independent auditors noted that the Company
has suffered recurring losses and does not have significant cash
or other material assets, nor does it have an established source
of revenues sufficient to cover its operations.
The Company reported a net loss of $7.91 million on $519,844 of
sales for fiscal 2010, compared with net income of $3.94 million
on $295,162 of sales for fiscal 2009.
APOLLO MEDICAL: Amends Stock Purchase Pact with Aligned, et al.
---------------------------------------------------------------
Apollo Medical Holdings, Inc., on July 8, 2011, entered into a
First Amendment to Stock Purchase Agreement with Aligned
Healthcare Group, LLC, Aligned Healthcare Group - California,
Inc., Raouf Khalil, Jamie McReynolds, M.D. BJ Reese and BJ Reese &
Associates, LLC, which amends in certain respects that certain
Stock Purchase Agreement, dated as of Feb. 15, 2011. The
Amendment provides, among other things, that Aligned LLC and
Aligned Corp. may enter into contracts with a specified health
insurance provider for the provision of services related to
patient care management or the management, administration and
operation of 24-hour physician and nursing call centers and post-
discharge management solely within the State of California, and
that the Company and its subsidiaries have the exclusive right, as
between the Company and Aligned LLC and Aligned Corp. to enter
into other contracts for the provision of services related to the
Call Center Business.
In connection with the Amendment, the Company's wholly owned
subsidiary, Aligned Healthcare, Inc., entered into a Services
Agreement, dated as of July 8, 2011, with Aligned LLC and Aligned
Corp., under which Aligned LLC and Aligned Corp. have agreed that
if either entity enters into one or more contracts with a
specified health insurance provider relating to the provision of
services for the Call Center Business solely within the State of
California, then Aligned LLC and Aligned Corp. would remit all
revenues, less allowable costs incurred in connection with the
provision of such services, to AHI.
About Apollo Medical
Glendale, Calif.-based Apollo Medical Holdings, Inc., provides
hospitalist services in the Greater Los Angeles, California area.
Hospitalist medicine is organized around the admission and care of
patients in an inpatient facility such as a hospital or skilled
nursing facility and is focused on providing, managing and
coordinating the care of hospitalized patients.
As reported in the Troubled Company Reporter on June 2, 2010,
Kabani & Company, Inc., in Los Angeles, expressed substantial
doubt about the Company's ability to continue as a going concern,
following the Company's results for the fiscal year ended
Jan. 31, 2010. The independent auditors noted that the Company
has an accumulated deficit of $1.24 million as of Jan. 31, 2010,
working capital of $1.07 million and cash flows used in operating
activities of $338,141.
The Company reported a net loss of $156,331 on $3.89 million of
revenue for the year ended Jan. 31, 2011, compared with a net loss
of $196,280 on $2.44 million of revenue during the prior year.
The Company's balance sheet at April 30, 2011, showed $1.68
million in total assets, $1.71 million in total liabilities and a
$31,791 total stockholders' deficit.
ARDENT HEALTH: S&P Affirms 'B' Credit Rating; Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and all existing issue-level ratings on Nashville-
based Ardent Health Services LLC, including the term loan B,
which is increasing in size with a $200 million add-on.
"The speculative-grade ratings reflect Standard & Poor's view that
Ardent has a weak business risk profile, characterized by a
relatively undiversified portfolio of hospitals, and significant
concentration of profit in one market," said Standard & Poor's
credit analyst David Peknay. Ardent's 10 acute-care hospitals
(assuming the pending acquisitions are completed) and large health
plan do business in only two key markets, Albuquerque, N.M., and
Tulsa, Okla. Its Albuquerque market (including a health plan
generating a large percentage of the company's total revenue via
member premiums) is responsible for a large majority of its
earnings. The ratings also reflect the competitive nature of these
markets, the company's vulnerability to local economic
circumstances, reimbursement risk tied to ongoing third-party
payor efforts to limit health care cost increases, and the risks
associated with managing the total health of a large health plan
in one market with about 250,000 members.
In its Tulsa market, Ardent has been actively managing its market
position over the past few years by divesting certain facilities
to address weak financial performance and declining market share,
and now acquiring other facilities to help solidify its market
position. These efforts and other large investments aim to improve
its local market position in several key clinical areas (such as
cardiac and women's services). In addition, the divestiture of
its highly unprofitable medical group in Albuquerque, and other
operating improvements (e.g., reducing contract labor costs) were
instrumental in the dramatic profitability improvement over the
past two years. From 2008 to 2010, the EBITDA margin increased
over 200 basis points.
ARDENT HEALTH: Moody's Affirms 'B2' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family and
Probability of Default Ratings of Ardent Medical Services, Inc., a
subsidiary of Ardent Health Services LLC in conjunction with the
announcement that the company would seek to amend its credit
facility, including the add-on of $200 million to the existing
term loan obligation. Moody's also affirmed the B1 rating on the
company's senior secured credit facility. Moody's understands that
the proceeds from the term loan add-on, along with an equity
contribution from Welsh, Carson, Anderson & Stowe and available
cash, will be used to fund the previously announced acquisitions
of Heart Hospital of New Mexico and SouthCrest and Claremore
Hospitals in Tulsa, OK.
These ratings have been affirmed/LGD assessments revised.
-- Corporate Family Rating, B2
-- Probability of Default Rating, B2
-- $75 million senior secured revolving credit facility
expiring 2015 to B1 (LGD 3, 40%) from B1 (LGD 3, 35%)
-- $521 million (includes the $200 million add-on) senior
secured term loan due 2015 to B1 (LGD 3, 40%) from B1
(LGD 3, 35%)
RATINGS RATIONALE
Ardent's B2 Corporate Family Rating reflects Moody's belief that
the company's presence in only two markets and a meaningful
contribution of revenue from the health plan in New Mexico
represents significant concentration risk. Further, Moody's
anticipates that the additional reduction in Medicaid
reimbursement in New Mexico, which became effective in November
2010, will result in a decline in EBITDA from the existing
operations in that market in 2011 and thereby limit improvement in
financial metrics. However, the rating also reflects Moody's
belief that pro forma leverage, while increasing as a result of
the additional debt load, is still modest and Moody's expectation
that the company will see benefits in its existing markets from
these strategic acquisitions.
Given the considerable concentration risk, Moody's would like to
see the company's metrics strongly positioned at levels usually
expected of higher rated companies prior to a rating upgrade. For
example, Moody's would expect the company to maintain its
conservative leverage and generate free cash flow to debt
approaching 10%. Additionally, Moody's would have to gain comfort
that further declines in EBITDA from continuing reimbursement
pressures are not anticipated or can be offset through improved
operating performance.
If operating results deteriorate, either through market specific
pressures or industry challenges such that the company is expected
to sustain negative free cash flow, Moody's could downgrade the
rating. Additionally, if Ardent were to significantly increase
leverage to complete another debt-financed acquisition, Moody's
could downgrade the ratings.
The principal methodology used in rating Ardent Medical Services,
Inc. was Global For-Profit Hospital Industry published in
September 2008. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Please see ratings tab on the issuer/entity page on Moodys.com for
the last rating action and the rating history.
Headquartered in Nashville, Tennessee, Ardent Health Services,
through its subsidiaries, operates eight acute care hospitals and
other healthcare facilities in two states and a health plan in one
state. The company recognized approximately $1.8 billion in
revenue for the twelve months ended March 31, 2011.
ATTITUDE DRINKS: Defaults Under $268,000 Short-Term Bridge Notes
----------------------------------------------------------------
At March 31, 2011, Attitude Drinks Incorporated was in default on
short term bridge notes totaling $268,000 in principal. The
remedy for default under the notes is acceleration of principal
and interest due thereunder. Although the Company has previously
been able to obtain extension on the maturity dates of those
obligations, the Company may be unable to continue to do so.
Further, the Company has secured convertible notes outstanding
totaling $4,441,901 in principal face value at March 31, 2011.
Failure to pay certain debt obligations could lead to an event of
default under the Company's convertible notes. Although the
Company was able to extend the maturity dates of the notes issued
prior to the July, 2010, financing until March 31, 2012, there is
no assurance that the Company will be able to continue to extend
these obligations.
Further, an event of default under the Company's convertible notes
includes failure to pay certain debts over $50,000-$100,000.
Penalties for default under the Company's convertible notes
include but are not limited to acceleration of principal and
interest, redemption provisions which allow the holders the option
to redeem the notes for 120% of the principal balances plus
interest and default interest rates up to 15%.
Defaults on these obligations could materially adversely affect
the Company's business operating results and financial condition
to such extent that the Company may be forced to restructure, file
for bankruptcy, sell assets or cease operation. Further, certain
of these obligations are secured by the Company's assets. Failure
to fulfill the Company's obligations under these notes and related
agreements could lead to the loss of these assets, which would be
detrimental to the Company's operations.
About Attitude Drinks Inc.
Attitude Drinks Inc. is an innovative, beverage brand development
company with a focus on ready-to-drink beverages. Phase III(R) is
the Company's first, functional pure milk-based recovery drink
that exploits recent scientific evidence confirming the benefits
of milk and protein as an exercise recovery aid. Phase III is
sold in select local, regional and national markets, including
colleges, universities, convenience stores, fitness centers and
gyms, as well as online. For more information, visit
www.attitudedrinks.com.
BAYVIEW HOLDINGS: Judge Rejects Plan; Floyd's Can Foreclose
-----------------------------------------------------------
American Bankruptcy Institute reports that bankruptcy Judge Ross
W. Krumm on Tuesday denied confirmation of Bayview Holdings LLC's
third amended plan and granted secured creditor Bank of Floyd's
motion for stay relief to foreclose on its collateral.
Moneta, Virginia-based Bayview Holdings, LLC, is owned by Tom
Lovegrove, who is its sole member and managing member. The Debtor
is in the business of acquiring and developing land on or near
Smith Mountain Lake in Virginia.
Bayview filed for chapter 11 bankruptcy protection (Bankr. W.D.
Va. Case No. 09-72799) on Nov. 2, 2009. Kevin J. Funk, Esq., and
Bruce E. Arkema, Esq., at DurretteBradshaw, PLC, in Richmond,
Virginia, represent the Debtor. In its schedules, the Debtor
disclosed $13,348,258 in assets and $10,675,663 in liabilities as
of the petition date.
BELTWAY ONE: Case Summary & 9 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Beltway One Development Group LLC
9115 W. Russell Road, Suite 210
Las Vegas, NV 89148
Bankruptcy Case No.: 11-21026
Chapter 11 Petition Date: July 13, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Mike K. Nakagawa
Debtor's Counsel: Gerald M. Gordon, Esq.
GORDON & SILVER, LTD.
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, NV 89169
Tel: (702) 796-5555
Fax: (702) 369-2666
E-mail: bankruptcynotices@gordonsilver.com
- and -
Talitha B. Gray, Esq.
GORDON & SILVER, LTD.
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, NV 89169
Tel: (702) 796-5555
E-mail: athalrose@gordonsilver.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Todd A. Nigro, manager of Nigro
Development, LLC, its manager.
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Horizon Village Square LLC -- 07/13/11
Nigro HQ LLC 11-21014 07/13/11
Russell Boulder 10-29724 10/19/10
Ten Saints LLC 11-21028 07/13/11
Debtor's List of nine Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ellsworth Gilman Johnson & -- $2,500
Stout LLC
7881 W. Charleston Boulevard
Las Vegas, NV 89117
NV Energy -- $2,069
P.O. Box 10100
Reno, NV 89520
Sharper Cleaning -- $1,001
5880 Boulder Falls, Apartment 2035
Henderson, NV 89011
Accurate Building Maintenance LLC -- $977
Southland Industries Fire -- $485
Protection
EDS Electronics -- $450
Las Vegas Valley Water District -- $347
Century Link -- $37
Southwest Gas Corporation -- $23
BERNARD L MADOFF: Trustee's Suit v. UBS Removed to District Court
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the lawsuit against UBS AG by the trustee for Bernard
L. Madoff Investment Securities Inc. was formally moved to a U.S.
district court from bankruptcy court for the time being.
According to the report, the trustee is seeking $2.6 billion from
Zurich-based UBS for allegedly looking the other way after seeing
red flags indicating that the Madoff firm might have been a scam.
U.S. District Judge Colleen McMahon signed an order this week
taking the suit out of bankruptcy court so she can make initial
decisions about whether the trustee is barred from suing on behalf
of customers by the federal Securities Litigation Uniform
Standards Act.
Judge McMahon, the report relates, said in her ruling that she
will also decide whether the trustee is the right person to bring
the suit. Judge McMahon's statement, "I don't want to deal with
other issues," implied she may send the case back to bankruptcy
court after dealing with threshold questions of overarching
federal law.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping $50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 18, 2011, a total of $6.85 billion in claims by
investors has been allowed, with $791.1 million to be paid by the
Securities Investor Protection Corp. Investors are expected to
receive additional distributions from money recovered by Mr.
Picard from lawsuits or settlements.
BIG WHALE: Wells Fargo Objects to Plan Confirmation
---------------------------------------------------
Wells Fargo Bank, N.A., as indenture trustee for American Home
Mortgage Investment Trust 2004-2, opposes confirmation of the
proposed plan of The Big Whale, LLC.
American Home asserts that it holds a secured interest in the real
estate located at 2335 N 65th St, in Wauwatosa, Wisconsin.
American Home has not accepted the Plan.
The Indenture Trustee contends that the Plan does not comply with
provisions of Chapter 11 in that:
-- The Plan proposes to pay the Debtor's outstanding debt as of
the petition date at 4.0% interest over 30 years. The
current interest rate on the loan is 6.75%. American Home
proposes interest at 5.5%.
-- Payments are due on the 1st day of each month and American
Home cannot accept a plan that changes the payment due date.
-- The amount of the outstanding debt (and therefore the amount
of American Home's secured claim) should be determined as of
the Plan's effective date.
The Indenture Trustee is represented by:
Jay Pitner, Esq.
GRAY & ASSOCIATES, L.L.P.
16345 West Glendale Drive
New Berlin, WI 53151-2841
Tel: (414) 224-8404
Fax: (414) 224-1279
E-mail: jpitner@gray-law.com
About Big Whale
The Big Whale, LLC, owns 49 parcels of real property in Milwaukee
County, Wisconsin. Those properties contain 138 rentable
residential and commercial units. The Big Whale owns one
industrial warehouse property, which is leased to various
commercial/manufacturing tenants that operate their respective
businesses in the building. The rental units are used to produce
rental income from individual residential and commercial tenants.
The Big Whale is managed by Steve Lindner and his sister, Debra
Lindner.
The Big Whale, LLC, filed for Chapter 11 bankruptcy protection
(Bankr. E.D. Wis. Case No. 11-23756) on March 21, 2011. In its
schedules, the Debtor disclosed $12,278,647 in total assets and
$13,613,203 in total debts as of the Petition Date. Kerkman &
Dunn serves as the Debtor's bankruptcy counsel.
BIOLASE TECHNOLOGY: Expects to Report $12MM Revenue in Q2 2011
--------------------------------------------------------------
BIOLASE Technology, Inc., announced that, based on an unaudited
preliminary assessment of its financial performance for the second
quarter ended June 30, 2011, the Company expects to report net
revenue of approximately $12.0 million, up 104 percent from $5.9
million in the second quarter of 2010 and up 14 percent from $10.6
million in the 2011 first quarter. Approximately $2 million of
orders received in the second quarter were unable to be shipped by
June 30, 2011, primarily due to the timing of a significant change
order placed by Henry Schein and the resulting last minute delays
of critical components. Excluding royalties of $375,000 and $1.1
million in the second quarter of 2011 and 2010, respectively, this
represents an increase of $6.8 million, or 142 percent, period
over period.
Federico Pignatelli, Chairman and CEO, said, "Commercial
activities during the quarter were on track with our quarterly and
annual forecasts. However, primarily due to the timing of a
significant change from Schein on a prepaid purchase order, which
occurred well into the quarter, we were unfortunately unable to
obtain certain critical components in time to ship a portion of
such order by June 30, 2011. We view this as a timing issue and
our overall expectations for the Company in 2011 remain
unchanged."
BIOLASE originally planned its second quarter production and
organized its supply chain accordingly, anticipating that it would
continue to produce iLaseTM systems in order to fulfill the final
$3 million of the $9 million of purchase orders from Schein with
the iLase system. This prepaid purchase order gives Schein
certain rights and priority of delivery. Some critical components
have long lead times and require orders to be placed months in
advance. Schein informed the Company that it was changing its
order from iLase systems to a combination of the Waterlase iPlusTM
and, to a lesser extent, the ezlaseTM, on April 28, 2011, well
after the start of the second quarter.
Pignatelli added, "The change in the purchase order was within
Schein's contractual rights, but it came a month into the quarter
and created a considerable amount of stress on our supply chain
and unfortunately a certain number of critical components did not
arrive in time to allow the shipment of product by the end of the
quarter. We expect to ship the final portion by the end of July,
well before the contractual due date of August 25, 2011.
"Orders for the iPlus remain strong and the Company is
experiencing a substantial increase in its adoption by new users
of the Waterlase technology," Pignatelli concluded.
Fred Furry, CFO, said, "The supply chain issues that developed due
to the financial condition of the Company in 2010 are still
affecting BIOLASE, but we are rapidly making progress. We are
assessing our vendor relationships, identifying alternative
sources and, when appropriate, acquiring safety stock for our
specialty and critical components. We also hired Richard Whipp as
our Director of Operations on July 1, 2011, and believe that his
experience with lean manufacturing and supply chain management
will make an immediate positive impact on our supply chain and
production flow."
The Company will provide additional details as well as an update
on the positive initiatives for the second half of the year on a
quarterly conference call and webcast when it reports full
financial results in August.
About BIOLASE Technology
Irvine, Calif.-based BIOLASE Technology, Inc. (NASDAQ: BLTI)
-- http://www.biolase.com/-- is a dental laser company. The
Company develops, manufactures and markets Waterlase technology
and lasers and related products that advance the practice of
dentistry and medicine.
The Company reported a net loss of $12.02 million on
$24.58 million of products and services revenues for the year
ended Dec. 31, 2010, compared with a net loss of $2.95 million on
$42.14 million of products and services revenues during the prior
year.
The Company's balance sheet at March 31, 2011, showed
$20.30 million in total assets, $15.97 million in total
liabilities, and $4.33 million in total stockholders' equity.
BDO USA, LLP, raised substantial doubt about the Company's ability
to continue as a going concern, following the 2010 financial
results. The accounting firm noted that the Company has suffered
recurring losses from operations, has had declining revenues and
has a working capital deficit at Dec. 31, 2010.
BLUEGREEN CORP: Relies on NYSE's Controlled Company Exemption
-------------------------------------------------------------
The New York Stock Exchange, on July 12, 2011, requested that
Bluegreen Corporation file a Current Report on Form 8-K to clarify
statements contained in the Company's Proxy Statement relating to
its 2011 Annual Meeting of Shareholders scheduled to be held on
July 27, 2011. As disclosed in the Proxy Statement, the Company
has in the past maintained, and intends in the future to maintain,
a Board of Directors comprised of a majority of independent
directors. However, as the Company has disclosed, two of its
independent directors, Robert F. Dwors and J. Larry Rutherford,
resigned from the Company's Board of Directors on April 26, 2011,
and April 30, 2011, respectively. As a result of those
resignations, the Company's Board of Directors, which currently
consists of a total of eight directors, has only four independent
directors.
The Company filed a Current Report on Form 8-K to affirmatively
state that, in order to remain in compliance with, and as
permitted by, the NYSE's listing standards, the Company is relying
on a controlled company exemption in not maintaining a Board of
Directors comprised of a majority of independent directors for the
interim period from April 30, 2011, through the date of the
Company's 2011 Annual Meeting of Shareholders. As disclosed in
the Proxy Statement, if all six of the director candidates
nominated by the Board of Directors for election at the Company's
2011 Annual Meeting of Shareholders are elected, the Board of
Directors will once again be comprised of a majority of
independent directors.
About Bluegreen Corp.
Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides
places to live and play through its resorts and residential
community businesses.
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable. S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010. At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011. While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales. In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.
The Company reported a net loss of $35.87 million on $365.67
million of revenue for the year ended Dec. 31, 2010, compared with
net income of $3.90 million on $367.36 million of revenue during
the prior year.
The Company's balance sheet at March 31, 2011, showed
$1.21 billion in total assets, $892.12 million in total
liabilities, and $320.03 million in total shareholders' equity.
* * *
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable. S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010. At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011. While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales. In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.
BLUEKNIGHT ENERGY: To Hold Special Meeting on Sept. 14
------------------------------------------------------
Blueknight Energy Partners, L.P., announced that a special meeting
of its unitholders will be held on Sept. 14, 2011, for unitholders
of record as of the close of business on July 25, 2011, to vote on
the previously announced amendments to its partnership agreement
and long-term incentive plan.
The special meeting will be held at 10:00 a.m. CDT and will take
place at the Renaissance Oklahoma City Convention Center Hotel
located at 10 North Broadway Avenue, Oklahoma City, Oklahoma.
About Blueknight Energy
Blueknight Energy Partners, L.P. (Pink Sheets: BKEP)
-- http://www.bkep.com/-- provides integrated terminalling,
storage, processing, gathering and transportation services for
companies engaged in the production, distribution and marketing of
crude oil and asphalt product. It provides services for the
customers, and its only inventory consists of pipeline linefill
and tank bottoms necessary to operate the assets. It has three
operating segments: crude oil terminalling and storage services,
crude oil gathering and transportation services, and asphalt
services.
The Company reported a net loss of $23.79 million on
$152.62 million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of $16.50 million on $156.77 million of
total revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed $323.49
million in total assets, $358.56 million in total liabilities and
a $35.06 million total partners' deficit.
BOCA BRIDGE: Can Access NorthStar's Cash Collateral Until July 31
-----------------------------------------------------------------
The Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the
Southern District of Florida, authorized, on a final basis, Boca
Bridge LLC to use the cash collateral of NS/CSE Finance LLC.
NorthStar, predecessor in interest JMP Boca Bridge Lender, LLC, as
assignee of NS/CS Boca, LLC, asserts a first priority lien and
security interest in substantially all of the Debtor's assets.
NorthStar asserts that the Debtor was indebted to NorthStar in the
approximate amount of not less than $9,255,194 plus accrued unpaid
interest, charges and other fees. NorthStar asserts that it owns
the rents, royalties, issues, profits, security deposits and
income of the property.
The Debtor owns a hotel on the Intracoastal Waterway in Boca
Raton, Florida, and has the typical expenses and employees of a
medium size hotel. The Debtor also operates two restaurants at
the hotel.
The Debtor would use the cash collateral until July 31, 2011, to
pay the expenses shown on the approved budget. A full-text copy
of the budget is available for free at:
http://bankrupt.com/misc/BOCABRIDGE_cashcoll_julybudget.pdf
As adequate protection for any diminution in value of the lenders'
collateral, the Debtors will grant NorthStar a replacement lien in
any and all assets of the Debtor and a superpriority
administrative expense claim status.
The Debtor will also maintain all insurance on the property and,
on the written request of NorthStar, will provide NorthStar with
proof of the insurance.
NorthStar is represented by:
Brent McIlwain, Esq.
Brian Smith, Esq.
PATTON BOGGS, LLP
2000 McKinney, Suite 1700
Dallas, TX 75219
Tel: (214) 758-1500
Fax: (214) 758-1550
E-mail: bmcilwain@pattonboggs.com
bsmith@pattonboggs.com
About Boca Bridge LLC
In August 2010, ten creditors owed $69,400 filed an involuntary
Chapter 11 petition (Bankr. S.D. Fla. Case No. 10-34538) against
Boca Bridge LLC, the owner of the Boca Raton Bridge Hotel. In
November, the bankruptcy judge entered ruling placing the Boca
Bridge LLC into Chapter 11. The Debtor disclosed $10,286,336 in
assets and $11,850,060 in liabilities as of the Chapter 11 filing.
BORDERS GROUP: Still Looking for Going Concern Buyers on 11th Hour
------------------------------------------------------------------
Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern
District of New York approved modified bidding procedures proposed
by Borders Group, Inc. and its debtor affiliates to govern the
sale and auction of their assets to a consortium of liquidators,
subject to higher and better offers.
A liquidator group composed of Hilco Merchant Resources, LLC,
Gordon Brothers Retail Partners, LLC, SBC Capital Group, LLC,
Tiger Capital Group, LLC and Great American Group, LLC, took over
as stalking horse bidder for the Debtors' assets as talks with
Najafi Companies collapsed hours before a July 14 hearing.
At the hearing Thursday, Andrew K. Glenn, Esq., at Kasowitz,
Benson, Torres & Friedman LLP, in New York, counsel to Borders,
told the bankruptcy judge that the bookseller chain remains
hopeful it will be able to stay in business, Tiffany Kary of
Bloomberg News reports.
Mr. Glenn also mentioned to the Court that Najafi has said it may
bid at the auction and that Borders has received other inquiries
without saying how many, Bloomberg notes.
BB Brands, LLC, an affiliate of Najafi, withdrew its $450 million
bid for Borders after creditors complained that the firm does not
appear committed to a going concern sale of the bookseller
company. Najafi was also unable to obtain more relaxed trade
terms from Borders' publishers.
Creditors favored a liquidation of Borders' remaining stores,
citing that such a move would provide greater certainty and
creditor recovery.
"We're shooting in the dark because we don't have a going-concern
bid," Bruce Buechler, Esq., at Lowenstein Sandler PC, in New York,
counsel for the Official Committee of Borders' Unsecured
Creditors, said at the Thursday hearing, Bloomberg relates.
Borders' lawyers told Judge Glenn that after negotiating late into
Wednesday night on July 13, creditors and Najafi failed to reach
an agreement that would have forced Najafi to keep Borders
operating as a going concern, Bloomberg relays.
A separate report by Mike Spector and Joseph Checkler of The Wall
Street Journal, citing Mr. Glenn, reveals that Borders had engaged
in round-the-clock negotiations with Mr. Najafi to no avail.
"This has been a case with many twists and turns and the events of
the last 24 hours are no exception," The Journal quoted Mr. Glenn
as saying at the hearing. "Unfortunately, [Mr. Najafi] would not
commit in time for this hearing."
Mr. Glenn also apprised the Court that Borders received an offer
from Barnes & Noble Inc. for certain assets, Bloomberg relays.
"They could come in and team with the liquidators," Mr. Glenn
noted.
Judge Glenn stated that if Borders gets a bid to keep the company
running, the Court will hold a special bifurcated hearing to
evaluate its merits over a liquidation, according to Bloomberg.
"Everybody will get their day in court, or night in court," the
bankruptcy judge said at the hearing, Bloomberg cites. "We will
do everything necessary."
Landlords of several of Borders' remaining stores are concerned
about the tight timetable between the July 19 auction and the July
21 sale hearing and thus, Borders said it might try to break the
sale hearing into different parts so parties would have more time
to decide whether to object, The Journal notes. Judge Glenn said
he liked that idea, the report cites.
The tricky part for Borders would be that if a bidder emerges that
wants to keep Borders stores running, that bidder would have to
decide how it will treat the leases on the remaining stores, The
Journal points out.
In accordance with his Bidding Procedures Order, Judge Glenn
overruled all objections to the procedures to the extent not
resolved, settled or withdrawn.
Before the Court's entry of the Bidding Procedures Order, the
Debtors modified the proposed bidding procedures to reflect the
designation of the Hilco-Gordon Liquidator Group as stalking horse
bidder, without bid protections.
The Debtors also executed on July 14 a revised agency agreement
with the Liquidator Group, the Creditors' Committee, and agents
under their DIP Facility. The Debtors and the Liquidator Group
previously amended the Agency Agreement on July 13. Under the
revised Agency Agreement:
* The Liquidators Group serves as the exclusive agent to
conduct the sale at the Debtors' stores and distribution
centers;
* The Debtors is set to receive a guaranteed 72% of the total
cost value of the merchandise included in the sale plus
other amounts. The guaranty percentage has been fixed based
on the aggregate cost value of the merchandise not being
less than $350 million and no more than $395 million;
* Notwithstanding the Debtors' entry into the Asset Purchase
Agreement with BB Brands, the Agency Agreement is intended
to be effective in the event: (i) the Sale Order does not
approve a going concern transaction; or (ii) the Sale Order
Order approves a going concern transaction and the going
concern buyer fails to close the transaction on or prior to
July 29, 2011, such event referred to as a "GC Failure;" and
* If the APA is not approved, then the Sale will commence at
all stores no later than July 22, 2011. If the Agency
Agreement Approval Order approves the APA or a similar going
concern transaction, then in the event of a GC Failure on or
prior to July 29, 2011, the Sale will commence at all stores
(i) one day following notice of a GC Failure, and (ii)
August 1, 2011.
A blacklined-copy of the July 14 Agency Agreement is available for
free at:
http://bankrupt.com/misc/Borders_AmAgencyAgr_blacklined.pdf
A clean copy of the Amended Bidding Procedures is available for
free at http://bankrupt.com/misc/Borders_AmBiddingProcs.pdf
A blacklined copy of the Bidding Procedures is available for free
at http://bankrupt.com/misc/Borders_AmBiddingProcs_blacklined.pdf
July 17 and Other Sale Deadlines
In the event no Going Concern Sale is negotiated, the Debtors will
be filing a motion to conduct a separate sale process for all
assets that are excluded from the Agency Agreement, including but
not limited to, intellectual property, leases, notes and
receivables.
All bids submitted by a bidder must exceed the consideration
provided in the Agency Agreement by at least $1 million and
include at least $215.1 million in cash. Bids for portions of the
Debtors' assets will be considered, but when added to the value
that the Debtors' estates will otherwise receive for its assets,
must exceed the consideration in the Agency Agreement by at least
$1 million and must include at least $215.1 million in cash.
The Debtors will pursue this schedule for the sale of their
assets:
July 17, 2011 Deadline for submission of a
final and binding proposal.
July 18, 2011 Date by which the Debtors will
file a notice if there is
insufficient interest to conduct
an auction.
July 18, 2011 Deadline to object to Sale Motion.
July 19, 2011 Auction
July 20, 2011 Date by which the Debtors will
file results of the Auction.
July 20, 2011 Supplemental Objection Deadline
to Sale Motion.
July 21, 2011 Sale Hearing
More Contract-Related Objections
Judge Glenn also approved the notice of assumption and assignment
of contracts served by the Debtors on contract parties.
The deadline to object to the proposed assumption and assignment
of
contracts or the cure amounts is extended from July 14, 2011, to
July 18, 2011.
Subsequently, several parties asked the Court to fix the cure
amounts and direct the Debtors to cure all defaults under their
leases and contracts. They counterparties and their asserted cure
amounts are:
Proposed Asserted
Counterparty Cure Amt. Cure Amt.
------------ --------- ---------
Verizon Communications, Inc. $407,764 TBD
Vornado Two Penn Property, LLC 327,454 351,566
Oracle America, Inc. 119,895 181,169
Cafaro Related Entities 64,632 122,849
West 51,883 TBD
Gabrellian Associates 49,039 76,184
BSC Pearlridge Uptown II LLC 38,094 101,512
Pace-Brentwood Partners, L.L.C. 36,298 49,870
The Strip Delaware, LLC 26,237 TBD
Pace-64 Associates, L.L.C. 26,159 26,159
Promenade Delaware, LLC 25,030 TBD
Folsom Broadstone, Inc. 20,554 66,860
Salmon Run Shopping Center, L.L.C. 19,183 31,692
QKC Maui Owners LLC 13,404 20,193
Dallas/Fort Worth Int'l. Airport Board 8,047 22,589
Clearview Mall Associates 5,128 6,092
Gratiot Center Associates LP 4,661 6,147
Monmouth Plaza Enterprises, LLC 0 10,751
Taubman Landlords - 305,253
Cole BD Rapid City SD, LLC - 26,604
Paradies-Rhode Island, LLC - 5,284
Paradies-Metro Ventures, Inc. - 4,186
Paradies-CVG, LLC - 2,872
Brentwood Place Holding LLC asked the Court to direct the Debtors
to pay 46,474 as cure amount plus reasonable attorneys' fees and
costs.
Simon Property Group, Inc., GGP Limited Partnership, Kimco Realty
Corporation and KPI Landlords filed with the Court cure amount
reports for certain leases, copies of which reports are available
for free at:
http://bankrupt.com/misc/Borders_SimonCureRpt.pdf
http://bankrupt.com/misc/Borders_GGPCureRpt.pdf
http://bankrupt.com/misc/Borders_KimcoCureRpt.pdf
http://bankrupt.com/misc/Borders_KPICureRpt.pdf
A list of the Cafaro Related Entities is available for free at:
http://bankrupt.com/misc/Borders_CafaroEntities.pdf
The Taubman Landlords operate nine regional retail shopping
centers at which the Debtors are a tenant. The KPI Landlords are
Highbook, LLC; Chambook, LLC; Genbook, LLC; Davbook, LLC;
Woodbook, LLC; Fordbook, LLC; Glenbook, LLC; and Clairebook, LLC.
In other concerns, Glimcher Properties Limited Partnership and its
affiliates assert that the store closing guidelines are deficient.
Glimcher thus asks the Court to adopt certain restrictions in the
proposed store closing guidelines to protect the interests of the
objecting landlords. Cole BD Rapid City SD, LLC, objects to the
extent the liquidators do not leave the Cole property in broom
clean condition. Dallas/Fort Worth International Airport also
proposes additional store closing guidelines to protect its
interest in maintaining its desired image and quality of the DFW
Airport terminal concessions.
Taxing authorities, which include (i) Bexar County, Cameron
County,
Cypress-Fairbanks ISD, Dallas County, Fort Bend
County, Grayson County, Harlingen, Harlingen CISD, Harris County,
Judson ISD, Montgomery County, Round Rock ISD, Tarrant County, and
Victoria County; (ii) Maricopa County Treasurer; and (iii) Tax
Appraisal District of Bell County, Texas and the County of Denton,
Texas, separately ask the Court that sufficient proceeds from the
sale of the collateral of the tax authorities be segregated and
their liens be attached to ensure adequate protection for their
tax liens.
About Borders Group
Borders Group operates 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. 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.
Lowenstein Sandler represents 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: Savings Plan Files 2010 Annual Report
----------------------------------------------------
Borders Group, Inc. filed with the U.S. Securities and Exchange
Commission on July 14, 2011, an annual report for Borders Group,
Inc. Savings Plan on Form 11-K for the year ended Dec. 31, 2010.
Bank of America, N.A., is the trustee of the Savings Plan.
Borders serves as plan administrator. Borders' Board of Directors
has delegated certain administrative functions to the Borders
Group, Inc. Savings Plan Committee.
Contributions
Each year, participants may elect to contribute to the Savings
Plan up to 50% in 1% increments of their annual compensation on a
pre-tax or after-tax basis in any Plan year. The total amount of
the participants' pre-tax and after-tax contributions cannot
exceed 50% of their eligible compensation. For purposes of
computing allowable participant contributions, participant
compensation includes an employee's base salary or wages, bonus,
commissions and overtime pay. Contributions by or on behalf of
highly compensated employees are limited by applicable
discrimination rules.
The Company can provide for both matching and discretionary
contributions. Through June 30, 2008, company matching
contributions were provided at a rate of 50% of the first 6% of
compensation that a participant contributed to the Savings Plan.
Each participant's account is created with the participant's
contribution, matching and discretionary Company contributions, if
any, and earnings/losses on the investments in which the
participant's account is invested. The benefit to which a
participant is entitled is the benefit that can be provided from
the participant's account.
Participants are fully vested at all times in their participation
contribution account balance and are vested in contributions from
the Employer: 50% after one year of service, 75% after two years,
and 100% after three years. Forfeitures are used first to restore
account balances of reemployed participants pursuant to the
Savings Plan, second to reduce Company contributions pursuant to
the Savings Plan and third to pay Savings Plan expenses. At
December 31, 2010 and 2009, the Savings Plan has $122,196 and
$186,675, respectively in unclaimed distribution checks.
Effective July 1, 2008, the Company suspended its matching
contributions to the Savings Plan. This decision was made in
direct response to the then current business conditions. The
Company reviews the matching of contributions periodically.
During 2009 and 2010, the Company did not reinstate the matching
of contributions.
Participants direct their elective contributions into various
options offered by the Savings Plan.
Participant Loans
Participants may borrow an amount equal to the lesser of $50,000
or up to 50% of their account balance. Loan repayments, including
interest, are made through payroll deductions. The range of
interest rates in effect for all outstanding loans at December 31,
2010 was 4.25% to 10.50%. Loan terms range from 1 to 5 years or
up to 15 years for the purchase of a primary residence. Loan
balances of terminated employees that are not repaid by the last
day of the calendar quarter that begins after the employee's
termination date are treated as distributions.
Effective July 15, 2008, the Company stock investment option was
frozen. No future contributions or fund transfers into Borders
stock are allowed.
Payment of Benefits
Upon termination of service, attainment of age 59-1/2, death or
any other distributive event as defined in the Plan document,
participants or their beneficiaries may elect to receive either a
lump sum amount equal to the value of their account balances or
fixed periodic payments, subject to certain limitations.
Participants who leave the Company may allow their balances to
remain in the Savings Plan if their account balance is greater
than $5,000.
A full-text copy of the Savings Plan 2010 annual report is
accessible for free at http://ResearchArchives.com/t/s?767b
Borders Group, Inc. Savings Plan
Statement of Net Assets Available for Benefits
As of Dec. 31, 2010
Cash $100,172
Investment at fair value (participant-directed) 105,882,920
Receivables
Accrued investment income 24,811
Participant contributions receivable 195,186
Notes receivable from participants 1,778,979
-------------
Net assets reflecting investments at fair value 107,982,068
Adjustments from fair value to contract value
for fully benefit-responsive investment
contracts -
-------------
Net assets available for benefits $107,982,068
=============
Borders Group, Inc. Savings Plan
Statement of Changes in Net Assets
Available for Benefits
For the Year Ended Dec. 31, 2010
Investment Income
Net realized and unrealized appreciation
in fair value of investments $9,575,322
Dividends and interest 1,947,145
-------------
Total investment loss 11,522,467
Contributions:
Participants 5,108,205
-------------
Total contributions 5,108,205
Other additions 45,774
-------------
Total additions 16,676,446
-------------
Deductions from net assets attributed to:
Participant withdrawals 20,409,288
Administrative expenses 52,260
Other 136,488
-------------
Total deductions 20,598,036
-------------
Decrease in net assets (3,921,590)
Net Assets:
Beginning of year 111,903,658
-------------
End of year $107,982,068
=============
About Borders Group
Borders Group operates 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. 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.
Lowenstein Sandler represents 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)
BOWLES SUB PARCEL: Files Schedules of Assets and Debts
------------------------------------------------------
Bowles Sub Parcel D, LLC, filed with the Bankruptcy Court its
schedules of assets and liabilities, disclosing:
Schedule Total Assets Total Liabilities
-------- ------------ -----------------
A - Real Property $12,856,000
B - Personal Property $1,460,311
C - Property Claimed
as Exempt N/A
D - Creditors Holding
Secured Claims $11,855,077
E - Creditors Holding
Unsecured Priority
Claims $0
F - Creditors Holding
Unsecured Nonpriority
Claims $3,298,933
------------ -----------------
$14,316,311 $15,154,010
About Fenton Sub Parcel D and Bowles Sub Parcel D
Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own
industrial multi-tenant properties located in the Twin Cities.
They are controlled by StoneArch II/WCSE Minneapolis Industrial
LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and
of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100%
member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is
the 100% member of Fenton Sub Parcel D, LLC.
In 2007, StoneArch acquired various LLCs, which in turn owned 27
industrial multi-tenant properties located in the Twin Cities.
The properties were divided into four separate pools: A, B, C, and
D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the
properties in pool D. As tenants in common, Fenton Sub Parcel D
has an undivided 74.5394% interest and Bowles Sub Parcel D has an
undivided 25.4606% interest. The Pool D Properties consist of six
parcels of real property located in Anoka, Dakota, and Hennepin
Counties, Minnesota. The Debtors expect the Pool D Properties to
be worth $13,135,656 as of the Petition Date.
Although they are two separate legal entities, Fenton Sub Parcel D
and Bowles Sub Parcel D have consistently been treated as one
enterprise. Hoyt Properties, Inc., acts as agent in managing the
Pool D Properties.
Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11
bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on
June 29, 2011. The Debtors' petitions were signed by Steven Bruce
Hoyt, chief manager, who is a debtor in bankruptcy case number 11-
43816. He is separately represented by Michael C. Meyer of the
firm Ravich Meyer.
The cases were originally assigned to Judge Dennis D. O'Brien and
reassigned to Judge Robert J. Kressel as the cases are related to
the Hoyt case, which was filed earlier and assigned to Judge
Kressel.
Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M.
Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors.
C-PV323, LLC: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: C-PV323, LLC
3455 Cliff Shadows Parkway, Suite 220
Las Vegas, NV 89129
Bankruptcy Case No.: 11-21036
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
C-PV330, LLC 11-21038
C-PV332, LLC 11-21058
C-SWDE393, LLC 11-21059
C-SWDE394, LLC 11-21063
Chapter 11 Petition Date: July 13, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Mike K. Nakagawa
Debtor's Counsel: Craig F. Robinson, II, Esq.
BOGATZ & ASSOCIATES, P.C.
3455 Cliff Shadows Parkway, Suite 110
Las Vegas, NV 89129
Tel: (702) 776-7000
Fax: (702) 776-7900
E-mail: crobinson@isbnv.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The list of unsecured creditors filed together with its petition
does not contain any entry.
The petition was signed by Thomas J. DeVore, chief operating
officer of LEHM, LLC, its manager.
Debtor-affiliates that previously filed separate Chapter 11
petitions:
Entity Case No. Petition Date
------ -------- -------------
B-SWDE3, LLC 09-29051 10/09/09
B-PVL1, LLC 09-29147 10/12/09
A-SWDE1, LLC 09-34216 12/29/09
A-JVP1, LLC 09-34236 12/29/09
B-SWDE2, LLC 09-33470 12/15/09
B-NWI1, LLC 10-15774 04/02/10
B-JVP1, LLC 10-16641 04/16/10
B-VLP2, LLC 10-16660 04/16/10
B-PVL2, LLC 10-16648 04/16/10
B-VLP1, LLC 10-16655 04/16/10
B-VV1, LLC 10-18284 05/05/10
A-NGAE1, LLC 10-18719 05/12/10
B-SWDE6, LLC 10-30194 10/27/10
B-SWDE7, LLC 10-30199 10/27/10
B-SCT2, LLC 10-31307 11/10/10
B-SCT1, LLC 11-11560 02/04/11
G-SWDE1, LLC 11-11991 02/14/11
C-NW358, LLC 11-13434 03/11/11
C-NW361, LLC 11-13431 03/11/11
C-NW362, LLC 11-13435 03/11/11
C-SWDE382, LLC 11-13438 03/11/11
C-SWDE383, LLC 11-13440 03/11/11
C-SWDE384, LLC 11-13442 03/11/11
C-SWDE348, LLC 11-13942 03/21/11
C-FSG425, LLC 11-16560 04/29/11
C-FSG427, LLC 11-16568 04/29/11
C-FSG428, LLC 11-16571 04/29/11
B-NWI2, LLC 11-16584 04/29/11
C-NGA312, LLC 11-18976 06/08/11
C-NGA313, LLC 11-18977 06/08/11
C-NGA317, LLC 11-18982 06/08/11
C-NGA318, LLC 11-18984 06/08/11
C-NW360, LLC 11-189789 06/08/11
CAPISTRANO TERRACE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Capistrano Terrace Ltd.
fka Advanced Group 03-79
23792 Rockfield Blvd., Suite 100
Lake Forest, CA 92630
Bankruptcy Case No.: 11-19767
Chapter 11 Petition Date: July 12, 2011
Court: United States Bankruptcy Court
Central District of California (Santa Ana)
Judge: Mark S. Wallace
Debtor's Counsel: D. Edward Hays, Esq.
MARSHACK HAYS LLP
870 Roosevelt Ave
Irvine, CA 92620
Tel: (949) 333-7777
Fax: (949) 333-7778
E-mail: ehays@marshackhays.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cacb11-19767.pdf
The petition was signed by Ray Poulter, president of general
partner.
CARESTREAM HEALTH: Bank Debt Trades at 6% Off in Secondary Market
-----------------------------------------------------------------
Participations in a syndicated loan under which Carestream Health,
Inc., is a borrower traded in the secondary market at 93.79 cents-
on-the-dollar during the week ended Friday, July 15, 2011, an
increase of 0.33 percentage points from the previous week
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. The Company pays 350 basis points above
LIBOR to borrow under the facility. The bank loan matures on
Feb. 22, 2017, and carries Moody's 'B1' rating and Standard &
Poor's 'BB-' rating. The loan is one of the biggest gainers and
losers among 206 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
About Carestream Health
Carestream Health, Inc., headquartered in Rochester, New York is a
supplier of imaging and IT systems to the medical and dental
communities and, also, to other markets. Formerly operating as
the Health Group division of Eastman Kodak, the company was
acquired by Toronto-based Onex Corporation and Onex Partners II LP
in early 2007. For the twelve months ended Sept. 30, 2010,
Carestream had revenues of $2.3 billion.
As reported by the Troubled Company Reporter on Feb. 18, 2011,
Moody's affirmed the 'B1' corporate family rating of Carestream
Health, Inc. Concurrently, Moody's assigned a 'B1' to the
proposed $2 billion credit facility including a $150 million first
lien senior secured revolver and a $1.85 billion first lien term
loan. Proceeds of the proposed credit facility will be used to
retire the existing first and second lien credit agreements and
pay a $200 million dividend to equity sponsor, Onex. The outlook
for the ratings is stable.
The 'B1' corporate family rating is supported by the company's
leading market position, large revenue base and diversified global
operations. The ratings outlook could improve if the company is
able to more than offset the decline in the film business with
growth in its other businesses such that the company demonstrates
sustained revenue and profitability growth.
The TCR also reported that Standard & Poor's assigned its 'BB-'
issue-level rating (one notch above the company's corporate credit
rating) to Rochester, N.Y.-based Carestream Health, Inc.'s
proposed new $2 billion senior secured credit facility. The
recovery rating is '2', indicating S&P's expectation of
substantial (70%-90%) recovery in the event of a default scenario.
S&P expects the company to use the proceeds to refinance existing
debt and pay a $200 million dividend to sponsor Onex Corp. The
proposed facility includes a $150 million revolver. At the same
time, S&P affirmed Carestream's 'B+' corporate credit rating. The
outlook is stable.
"The ratings on Carestream reflect S&P's expectation that the
company is likely to maintain its operating margin of around 20%
despite the challenging long-term outlook for the analog medical
imaging industry," said Standard & Poor's credit analyst Sarah
Wyeth. S&P believes modest capital expenditures will enable the
company to continue to generate good free cash flow and gradually
pay down debt.
CARGO TRANSPORTATION: Submits Reporting Requirements for Cash Use
-----------------------------------------------------------------
Cargo Transportation Service, Inc., asks the U.S. Bankruptcy Court
for the Middle District of Florida to deem the proposed reporting
procedures sufficient to provide adequate protection to Comerica
Bank for its use of cash collateral, and granting any other and
further relief the Court deems appropriate.
The Debtor recognizes Comerica's need for financial information,
and accordingly, the Debtor proposes the collateral reporting
procedures:
a. Daily Reporting:
i. CTS cash collateral base exhibit and supporting schedules
will be emailed by the Debtor to Comerica each business day by
2:30 p.m. EST, with information as of the close of business for
the prior business day.
ii. Specifically, the report will include (i) Work in
Progress Schedule; (ii) Summary Aged A/R Historical Trial
Balance; (iii) Bank of America Account Balance Report; and (iv)
Bank of Tampa Account Balance Report.
b. Weekly Reporting:
i. CTS CV/IC Agreements Schedule will be emailed by the
Debtor to Comerica each Tuesday by 5:00 p.m. EST, with
information as of the close of business for the prior Friday.
ii. Weekly Variance Report Schedule and Narrative will be
emailed by the Debtor each Thursday by 9:00 a.m. EST, with
information through and including the close of business on the
prior Saturday.
c. Monthly Reporting:
i. Monthly Financial Statement Package will be emailed by
the Debtor to Comerica no later than 5:00 p.m. EST of the 20th
business day following prior month end, with information as of
close of business for prior business month end.
ii. Specifically, the package will include (i) Monthly and
Year-to-Date Income Statement and Balance Sheet; (ii) Detailed
Aged A/R Historical Trial Balance; and (iii) Detailed Aged A/P
Historical Trial Balance.
d. Requests for Additional Information or Documents. To the
extent Comerica has questions or requests for additional
information relating the Weekly Variance Report Schedule and
Narrative or the Daily Reporting for the five prior business
days, Comerica will transmit any questions or requests for
information via a single email to the Debtor and Eric Danner,
Financial Advisor, by noon on Thursday, prior to the conference
call. Otherwise, Comerica will have three business days from
the receipt of the CTS CV/IC Agreements Schedule and Monthly
Reporting to informally raise any questions or concerns it may
have about information contained in the reporting via email
transmission.
e. Responses to Requests for Additional Information or
Documents. In the event Comerica raises any questions or
concerns about any information in the above reporting and
such questions or concerns are not resolved during the
weekly conference call, the Debtor will have three business
days from the receipt of any question or concern to respond
or provide a further response. To the extent that
Comerica's request requires the production of additional
documents or reporting, the Debtor will have seven
business days from the receipt of any such request to
provide the documents or reporting.
f. Weekly Conference Call. At Comerica's election, the Debtor
will be available for a telephone conference every Thursday,
from 3:30 p.m. EST to 4:30 p.m. EST, to further address any
questions or concerns regarding the Weekly Variance Report
Schedule and Narrative provided that morning.
The Debtor also asks the Court to approve the new 13-week budge,
for the period from the week ending July 9, 2011, through the week
ending October 1.
A full-text copy of the new budget is available for free at
http://is.gd/LiNoPc
About Cargo Transportation
Sunrise, Florida-based Cargo Transportation Services, Inc.,
provides transportation services to clients nationwide, including
customized consolidation, distribution, logistics and warehousing
services. It has 140 employees and averages $100,000,000 in gross
revenue per year.
Cargo Transportation filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J.
Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA,
serves as the Debtor's bankruptcy counsel. Jennis & Bowen, P.L.,
serves as substitute counsel. 1 Source Partners Inc. and Accell
Audit & Compliance P.A., serve as its certified public
accountants. The Debtor also tapped Ruden McClosky P.A. as its
special counsel.
Donald F. Walton, U.S. Trustee for Region 21, appointed an
Official Committee of the Official Committee of Unsecured
Creditors in the Debtor's case. Hunton & Williams LLP represents
the Committee in the Debtor's Chapter 11 proceedings. The
Committee tapped DLA Piper as its general counsel.
The Debtor disclosed $11,728,760 in assets, and $11,869,375 in
liabilities as of the Chapter 11 filing.
CARGO TRANSPORTATION: Wants to Finalize Negotiations with Comerica
------------------------------------------------------------------
Cargo Transportation Service, Inc., asks the U.S. Bankruptcy Court
for the Middle District of Florida to extend its exclusive periods
to solicit votes in favor of a plan of reorganization until the
conclusion of any rescheduled confirmation hearing.
The Debtor filed its request for an extension before the exclusive
periods was set to expire on July 11, 2011.
The Debtor needs additional time to solicit acceptances of its
Plan because the Debtor:
i) is awaiting court approval of the settlement agreement with
Old Dominion;
ii) is still negotiating with the Committee as to the amount and
timing of payments to Class 7;
iii) has not finalized negotiations with Comerica Bank; and
iv) is continuing to investigate claims of creditors who were
not scheduled and is assessing whether publication notice
of an extended claims bar date is necessary.
About Cargo Transportation
Sunrise, Florida-based Cargo Transportation Services, Inc.,
provides transportation services to clients nationwide, including
customized consolidation, distribution, logistics and warehousing
services. It has 140 employees and averages $100,000,000 in gross
revenue per year.
Cargo Transportation filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J.
Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA,
serves as the Debtor's bankruptcy counsel. Jennis & Bowen, P.L.,
serves as substitute counsel. 1 Source Partners Inc. and Accell
Audit & Compliance P.A., serve as its certified public
accountants. The Debtor also tapped Ruden McClosky P.A. as its
special counsel.
Donald F. Walton, U.S. Trustee for Region 21, appointed an
Official Committee of the Official Committee of Unsecured
Creditors in the Debtor's case. Hunton & Williams LLP represents
the Committee in the Debtor's Chapter 11 proceedings. The
Committee tapped DLA Piper as its general counsel.
The Debtor disclosed $11,728,760 in assets, and $11,869,375 in
liabilities as of the Chapter 11 filing.
CARGO TRANSPORTATION: Files Schedules of Assets & Liabilities
-------------------------------------------------------------
Cargo Transportation Services, Inc. with the U.S. Bankruptcy Court
for the Middle District of Florida, its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------- -----------
A. Real Property $0
B. Personal Property $11,728,759
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $6,782,766
E. Creditors Holding
Unsecured Priority
Claims $1,758
F. Creditors Holding
Unsecured Non-priority
Claims $5,099,994
----------- --------------
TOTAL $11,728,759 $11,884,519
About Cargo Transportation
Sunrise, Florida-based Cargo Transportation Services, Inc.,
provides transportation services to clients nationwide, including
customized consolidation, distribution, logistics and warehousing
services. It has 140 employees and averages $100,000,000 in gross
revenue per year.
Cargo Transportation filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J.
Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA,
serves as the Debtor's bankruptcy counsel. Jennis & Bowen, P.L.,
serves as substitute counsel. 1 Source Partners Inc. and Accell
Audit & Compliance P.A., serve as its certified public
accountants. The Debtor also tapped Ruden McClosky P.A. as its
special counsel.
Donald F. Walton, U.S. Trustee for Region 21, appointed an
Official Committee of the Official Committee of Unsecured
Creditors in the Debtor's case. Hunton & Williams LLP represents
the Committee in the Debtor's Chapter 11 proceedings. The
Committee tapped DLA Piper as its general counsel.
The Debtor disclosed $11,728,760 in assets, and $11,869,375 in
liabilities as of the Chapter 11 filing.
CATALYST PAPER: Appoints Brian Johnston as VP Technical Services
----------------------------------------------------------------
Catalyst Paper announced the appointment of Brian Johnston, to the
role of vice president, technical services. Most recently serving
as vice president operations, this new assignment will leverage
Mr. Johnston's extensive industry background as the company
intensifies its focus on manufacturing consistency and efficiency.
"Brian's experience and knowledge of all our operating assets and
technologies will enable the business to ensure appropriate
procedures, processes and resources are fully deployed in each
mill and functioning at a level that delivers maximum productivity
and reliability," said Catalyst President and Chief Executive
Officer Kevin J. Clarke. "His technical expertise will also be
instrumental in the efficient deployment of major capital projects
such as the federally funded boiler upgrade at Powell River."
Mr. Johnston has held a range of leadership assignments at
Catalyst since joining the company in 1994 and brings more than 25
years of coast-to-coast mill experience to his new role. Pending
completion of the search for a new head of manufacturing, mill
operations will report to the president.
About Catalyst Paper
Catalyst Paper -- http://www.catalystpaper.com/-- manufactures
diverse specialty mechanical printing papers, newsprint and pulp.
Its customers include retailers, publishers and commercial
printers in North America, Latin America, the Pacific Rim and
Europe. With four mills, located in British Columbia and Arizona,
Catalyst has a combined annual production capacity of 1.9 million
tons. The Company is headquartered in Richmond, British Columbia,
Canada and its common shares trade on the Toronto Stock Exchange
under the symbol CTL.
The Company posted a net loss of C$398.2 million on sales of
C$1.229 billion during 2010. The Company's net loss in 2009 was
C$5.6 million on sales of C$1.224 billion.
The Company's balance sheet at March 31, 2011, showed
C$1.64 billion in total assets, C$1.25 billion in total
Liabilities, and C$389.60 million in equity.
* * *
Catalyst Paper carried Moody's Investors Service's 'Caa1'
corporate family rating. Outlook in Negative. The Company also
carries Standard & Poor's CCC+ long-term corporate credit rating,
Outlook is Stable.
CHEYENNE HOTELS: To Employ Thomas F. Quinn as Counsel
-----------------------------------------------------
Cheyenne Hotels Investments LLC seeks authority from the U.S.
Bankruptcy Court for the District of Colorado to employ Thomas F.
Quinn, P.C., under a general retainer, as its counsel, nunc pro
tunc to June 30, 2011.
As counsel, the firm will:
(a) assist the Debtor in the preparation and filing of
required statements, schedules and other documents and
pleadings required or permitted under the Bankruptcy Code
and Rules;
(b) advise the Debtor regarding its rights and obligations as
a Debtor and as a Debtor-in-Possession;
(c) represent the Debtor in hearings, meetings, conferences,
and trials of contested matters and adversary proceedings
brought by or against the Debtor;
(d) advise the Debtor regarding the formulation of a plan of
reorganization, and in obtaining confirmation of a plan;
and
(e) advise and represent the Debtor as its attorney in
business negotiations and disputes as may arise in
connection with the operations of the assets of the
bankruptcy estate.
The Debtor will pay the Firm's fees and expenses as set forth in
the parties' engagement letter. The Debtor has paid the Firm a
$5,000 retainer, $3,700 of which has been applied to prepetition
attorneys' fees, and $1,039 has been paid for and as the filing
fee for the commencement of the bankruptcy case.
Thomas Quinn, Esq., attests that his Firm does not hold or
represent any interest adverse to the estate, and is
"disinterested" in the estate, as provided in Section 327 (a) of
the Bankruptcy Code.
About Cheyenne Hotel
Cheyenne Hotel Investments, LLC, formerly doing business as
Homewood Suites, formerly doing business as Homewood Suites of
Colorado Springs, filed for Chapter 11 bankruptcy protection
(Bankr. D. Colo. Case No. 11-25379) on June 28, 2011. The Debtor
disclosed assets of $12,912,702 and liabilities of $8,074,325 as
of the Petition Date. Thomas Quinn, Esq., at Thomas F. Quinn,
P.C., in Denver, Colorado -- tquinn@tfqlaw.com -- serves as
counsel to the Debtor.
CHEYENNE HOTELS: Sec. 341 Creditors' Meeting Set for August 1
-------------------------------------------------------------
Charles F. McVay, United States Trustee for Region 19, will
convene a meeting of creditors pursuant to Section 341(a) of the
Bankruptcy Code in the bankruptcy case of Cheyenne Hotels
Investments LLC on August 1, 2001, at 12:00 p.m., at the UST
Conference Room, in the Office of The United States Trustee, 999
18th Street, Suite 1551, in Denver, Colorado 80202.
NOTE: i got the info from the U.S. Trustee's Web site.
About Cheyenne Hotel
Cheyenne Hotel Investments, LLC, formerly doing business as
Homewood Suites, formerly doing business as Homewood Suites of
Colorado Springs, filed for Chapter 11 bankruptcy protection
(Bankr. D. Colo. Case No. 11-25379) on June 28, 2011. The Debtor
disclosed assets of $12,912,702 and liabilities of $8,074,325 as
of the Petition Date. Thomas Quinn, Esq., at Thomas F. Quinn,
P.C., in Denver, Colorado -- tquinn@tfqlaw.com -- serves as
counsel to the Debtor.
CHEYENNE HOTELS: Wants Homewood Suites Back; Wells Fargo Objects
----------------------------------------------------------------
Cheyenne Hotels Investments LLC was the maker of a Promissory Note
dated Feb. 1, 2006, in the original principal amount of
$7,905,209. Wells Fargo Bank, as trustee, became the holder of
the Promissory Note, which was secured by a Deed of Trust on a
property located in El Paso County, Colorado. The property
consists of a 104-room hotel located in Colorado Springs known as
Homewood Suites by Hilton.
In May 2011, Wells Fargo Bank, as Trustee filed a complaint and
verified motion for appointment of receiver against the Debtor in
the District Court for El Paso County, Colorado, Case No.
11CV3110. The District Court appointed Jeffrey Kolessar as
Receiver for the Property on May 13, 2011. The Receiver was in
possession of the Property on the Petition Date.
On behalf of the Debtor, Thomas Quinn, Esq., at Thomas F. Quinn,
P.C., in Denver, Colorado, informs the U.S. Bankruptcy Court for
the District of Colorado that Wells Fargo will file a motion to
excuse compliance with Section 543 of the Bankruptcy Code.
Section 543 provides that a custodian with knowledge of
commencement of a case under Chapter 11 concerning the debtor will
deliver to the trustee any property of the debtor held by the
custodian, and file an accounting of any property of the debtor
that came into the possession, custody or control of the
custodian.
In the meantime, the Receiver has not turned over the Property to
the Debtor-in-Possession.
Mr. Quinn contends that the Debtor managed the Property
competently and effectively prior to appointment of the Receiver.
Hence, he asserts, maintaining the Receiver is not necessary to
preserve the Property.
Accordingly, the Debtor asks the Bankruptcy Court to compel Mr.
Kolessar to comply with Section 543 by delivering all property
subject to Receivership back to the Debtor and require the
Receiver to issue an accounting pursuant to Section 543(2).
Wells Fargo Objects
In a separate filing, Wells Fargo asks the Bankruptcy Court to
excuse Mr. Kolessar from complying with Section 543.
Wells Fargo alleges that the Debtor has diverted funds from the
Property and has allowed the Property to fall into severe
disrepair, the result of which has been to create health and
safety issues for Hotel guests and employees. Wells Fargo
contends that these failures have resulted in default under and
possible termination of the Hilton Homewood Suites Hotel franchise
agreement under which the Hotel operates.
Therefore, Wells Fargo seeks to maintain the Receiver in
possession and control over the Property for the benefit of the
creditors of the Debtor's bankruptcy estate.
About Cheyenne Hotel
Cheyenne Hotel Investments, LLC, formerly doing business as
Homewood Suites, formerly doing business as Homewood Suites of
Colorado Springs, filed for Chapter 11 bankruptcy protection
(Bankr. D. Colo. Case No. 11-25379) on June 28, 2011. The Debtor
disclosed assets of $12,912,702 and liabilities of $8,074,325 as
of the Petition Date. Thomas Quinn, Esq., at Thomas F. Quinn,
P.C., in Denver, Colorado -- tquinn@tfqlaw.com -- serves as
counsel to the Debtor.
CHOCTAW RESORT: Moody's Lowers CFR to 'Caa2', Further Cut Looms
---------------------------------------------------------------
Moody's Investors Service downgraded Choctaw Resort Development
Enterprise's corporate family rating, probability of default
rating and senior unsecured notes rating to Caa2 from B3. The
senior secured term loan rating was lowered to Caa1. All ratings
remain under review for possible further downgrade.
Ratings downgraded and kept under review for further downgrade:
-- Corporate Family Rating to Caa2 from B3
-- Probability of Default Rating to Caa2 from B3
-- Senior Secured Term Loan due 2011 to Caa1 (LGD 3, 43%) from
B2(LGD3, 42%).
-- Senior Unsecured Notes due 2019 to Caa2 (LGD4, 56%) from B3
(LGD4, 56%)
RATINGS RATIONALE
The downgrade of Choctaw's CFR to Caa2 was prompted by a confirmed
report of a raid of Choctaw's casinos by FBI agents on July 12,
and reflects Moody's concern regarding the immediate and longer-
term negative implications of this event on the Enterprise's
casino operations and on its access to financing. In particular,
the risk of refinancing the upcoming maturity of the company's $71
million senior secured credit facilities, due on November 4, 2011,
has escalated significantly. The FBI investigation may also
indicate potential internal control weakness and could affect
Choctaw's casino operations in the future and its access to its
current credit facilities. Additionally, the recent unresolved
change in leadership at the Choctaw Tribe -- the owner of the
casinos - could further complicate the refinancing process or
could impede the Enterprise's ability to refinance timely or on
economical terms.
The review for possible downgrade considers that, while completion
of a refinancing in the near term remains possible, significant
uncertainties surrounding the investigation and it potential
outcome could result in delays in the refinancing and increased
default risk. Ratings could be downgraded further if Moody's deems
that Choctaw will likely not be able to refinance within the next
30-60 days. Similarly, if Choctaw's casino operation is disrupted,
or the MAC (material adverse change clause) is triggered in the
current credit agreement as a result of the incident, the ratings
would also be lowered.
The principal methodology used in rating Choctaw Resort
Development Enterprise was the Global Gaming Industry Methodology
published in December 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Choctaw Resort is a component unit of the Mississippi Band of
Choctaw Indians, which was created by the Tribe in October 1999 to
run its gaming operations. It owns and operates in central
Mississippi the Silver Star Hotel and Casino and the Golden Moon
Hotel and Casino, which commenced operations in 1994 and 2002,
respectively.
CIRCLE ENTERTAINMENT: Borrows $900,000 from Directors, et al.
-------------------------------------------------------------
Certain of Circle Entertainment Inc.'s directors, executive
officers and greater than 10% stockholders made unsecured demand
loans to the Company totaling $900,000, bearing interest at the
rate of 6% per annum.
The Company intends to use the proceeds to fund working capital
requirements and for general corporate purposes. Because certain
of the directors, executive officers and greater than 10%
stockholders of the Company made the Loans, a majority of the
Company's independent directors approved the transaction.
About Circle Entertainment
Circle Entertainment Inc. (CEXE.PK), formerly FX Real Estate and
Entertainment Inc., owns 17.72 contiguous acres of land located at
the southeast corner of Las Vegas Boulevard and Harmon Avenue in
Las Vegas, Nevada. The Las Vegas Property is currently occupied
by a motel and several commercial and retail tenants with a mix of
short and long-term leases. On June 23, 2009, as a result of the
default under the first mortgage loan, the first lien lenders had
a receiver appointed to take control of the property. The Company
is headquartered in New York City.
The Company's balance sheet at March 31, 2011, showed
$1.97 million in total assets, $4.38 million in total liabilities,
and a $2.41 million total stockholders' deficit.
The Company disclosed in its Form 10-Q for the quarter ended
June 30, 2010, that it has no current cash flow and cash on hand
as of Aug. 13, 2010, is not sufficient to fund its short-term
liquidity requirements, including its ordinary course obligations
as they come due. On April 21, 2010, the Company's remaining Las
Vegas subsidiary, namely FX Luxury Las Vegas I, LLC, filed for
Chapter 11 in the U.S. Bankruptcy Court for the District of Nevada
(Case No. 10-17015).
The Company's Las Vegas subsidiary filed for Chapter 11 bankruptcy
on April 21, 2010, and a plan of liquidation or reorganization
will eventually be implemented under which the Company will
surrender ownership of the Las Vegas Property. Under such a plan,
it is extremely unlikely the Company will receive any material
interest or benefit.
The Company reported net income of $346.81 million on $0 of
revenue for the year ended Dec. 31, 2010, compared with a net loss
of $114.68 million on $0 of revenue during the prior year. The
net profit generated in the year was primarily on account of a
$390.75 million gain from discharge of net assets due to
bankruptcy plan. The Company's operating subsidiary sought
Chapter 11 protection last year.
As reported by the TCR on April 11, 2011, L.L. Bradford & Company,
LLC, in Las Vegas, Nevada, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has limited available cash, has a
working capital deficiency and will need to secure new financing
or additional capital in order to pay its obligations.
CIRCUIT CITY: Auctioning Patent Portfolio in August
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Circuit City Stores Inc., which confirmed a
liquidating Chapter 11 plan in September, is selling a portfolio
of 22 patents and patent applications. The opening bid of
$750,000 will be made by Imaging Transfer Co., according to a
statement. Other bids are due Aug. 12, followed by an auction
Aug. 16.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 08-35653) on Nov. 10, 2008.
InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases in Jan. 2009.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
CIRCUIT CITY: DIVX Patent Portfolio to be Sold at Auction
---------------------------------------------------------
The Circuit City Stores Inc. Liquidating Trust has entered into an
agreement to sell its remaining patent portfolio to Imaging
Transfer Co. LLC for a cash purchase price of $750,000. The sale
is subject to higher and better offers. Streambank LLC has been
engaged by the Trust to conduct the sale process. Competitive
bids are due by August 12 and an auction will be held on August
16. A motion is being filed with the Bankruptcy Court for the
Eastern District of Virginia seeking entry of an order granting
the sale free and clear status.
The portfolio consists primarily of patents developed in
connection with Circuit City's former Digital Video Express (a/k/a
DIVX) initiative. The portfolio consists of 22 U.S. patents and
patent applications as well as multiple related foreign patents.
Circuit City launched Digital Video Express in the late 1990's to
develop an internet based, direct to home video rental solution
that eliminated late fees for consumers and protected digital
content. Although the DIVX system is no longer available, the
technology developed by DIVX remains relevant to the areas of
compression, distribution, security, usage tracking of movie
content, anti-piracy, digital media and watermarking.
"These patents were developed by Circuit City in order to leapfrog
the traditional video rental process. Although Circuit City was
not able to capitalize on its inventions, the video distribution
model it envisioned has become the mainstream," said Gabe Fried,
Managing Principal of Streambank. "Patents such as those
developed by Circuit City play a central role in the evolving
dynamic of technology companies creating digital delivery
solutions as evidenced by the recent sale by Nortel of its patent
portfolio for $4.5 Billion."
The Nortel patents were sold through a chapter 11 bankruptcy sale
to a consortium that included Apple, Microsoft and RIM, who outbid
Google, the stalking horse bidder at $900 Million.
About Circuit City
Headquartered in Richmond, Virginia, Circuit City Stores Inc.
(NYSE: CC) -- http://www.circuitcity.com/-- was a specialty
retailer of consumer electronics, home office products,
entertainment software and related services in the U.S. and
Canada.
Circuit City Stores together with 17 affiliates filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 08-35653) on Nov. 10, 2008.
InterTAN Canada, Ltd., which runs Circuit City's Canadian
operations, also sought protection under the Companies' Creditors
Arrangement Act in Canada.
Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden,
Arps, Slate, Meagher & Flom, LLP, are the Debtors' general
restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley,
Esq., at McGuireWoods LLP, are the Debtors' local counsel. The
Debtors also tapped Kirkland & Ellis LLP as special financing
counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special
securities counsel; and FTI Consulting, Inc., and Rotschild Inc.
as financial advisors. The Debtors' Canadian general
restructuring counsel is Osler, Hoskin & Harcourt LLP. Kurtzman
Carson Consultants LLC is the Debtors' claims and voting agent.
The Debtors disclosed total assets of $3,400,080,000 and debts of
$2,323,328,000 as of August 31, 2008.
Circuit City has opted to liquidate its 721 stores. It has
obtained the Bankruptcy Court's approval to pursue going-out-of-
business sales, and sell its store leases in Jan. 2009.
In May 2009, Systemax Inc., a multi-channel retailer of computers,
electronics, and industrial products, acquired certain assets,
including the name Circuit City, from the Debtors through a Court-
approved auction.
CITRUS TOWER: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Citrus Tower Boulevard Imaging Center LLC
3200 Downwood Circle, NW, Suite 330
Atlanta, GA 30327
Bankruptcy Case No.: 11-70284
Chapter 11 Petition Date: July 12, 2011
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: Mary Grace Diehl
Debtor's Counsel: Anna Mari Humnicky, Esq.
Gus H. Small, Esq.
COHEN POLLOCK MERLIN & SMALL
Suite 1600, 3350 Riverwood Parkway
Atlanta, GA 30339
Tel: (770) 857-4770
E-mail: ahumnicky@cpmas.com
gsmall@cpmas.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 11 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/ganb11-70284.pdf
The petition was signed by George Overend, manager.
CLAIRE'S STORES: Bank Debt Trades at 8% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Claire's Stores,
Inc., is a borrower traded in the secondary market at 91.56 cents-
on-the-dollar during the week ended Friday, July 15, 2011, an
increase of 0.32 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
206 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 Jan. 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 April 30, 2011, showed $2.86
billion in total assets, $249.40 million in total current
liabilities, $2.64 billion in long-term debt, and a stockholders'
deficit of $26.70 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 Oct. 30, 2010, Claire's debt to EBITDA was very high
at 9.3 times.
CONTECH CONST'N: Bank Debt Trades at 17% Off in Secondary Market
----------------------------------------------------------------
Participations in a syndicated loan under which Contech
Construction Products, Inc., is a borrower traded in the secondary
market at 82.55 cents-on-the-dollar during the week ended Friday,
July 15, 2011, an increase of 0.32 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 Jan. 31, 2013, and carries Moody's Caa1 rating and
Standard & Poor's B rating. The loan is one of the biggest
gainers and losers among 206 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Contech Construction
Headquartered in West Chester, Ohio, Contech Construction
Products, Inc. -- http://www.contech-cpi.com/-- makes,
distributes, and installs civil engineering products related to
environmental storm water, drainage, bridges, walls, and earth
stabilization. Contech has dealers, distributors, or
manufacturing plants in all 50 U.S. states and a national sales
organization of more than 350 people. Investment firm Apax
Partners owns Contech.
As reported by the Troubled Company Reporter on June 6, 2011,
Standard & Poor's revised its outlook on West Chester, Ohio-based
Contech Construction Products, Inc., to negative from stable. "At
the same time, we affirmed our ratings on Contech, including the
'B-' corporate credit rating," S&P stated. "The outlook revision
reflects our assessment of Contech's limited near-term liquidity
due to higher-than-expected borrowings on its revolving credit
facility to support higher steel costs," said Standard & Poor's
credit analyst Thomas Nadramia.
"The outlook revision also reflects that Contech's operating
environment is likely to remain difficult in the near term,
resulting in reduced cushion in the company's minimum EBITDA
covenant, which governs its revolving credit facility and term
loan. The minimum EBITDA requirement continues to step up over
the next several quarters. However, our current expectation is
that liquidity will likely remain at, or near, current reduced
levels in the next two quarters until seasonal cash collections
begin in the last quarter of 2011."
CONTINENTAL ALLOYS: S&P Puts 'B-' Corp. Rating on Watch Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Texas-
based Continental Alloys & Services Inc., including the 'B-'
corporate credit rating, on CreditWatch with positive implications
following the announcement that the company had agreed to be
acquired by Los Angeles-based Reliance Steel & Aluminum Co.
(BBB-/Stable/--), a metals service center company.
The companies did not disclose the terms of the transaction.
However, Standard & Poor's expects terms to include the
refinancing of Continental Alloy's existing bank term loan, which
had approximately $103 million outstanding as of March 31, 2011.
In resolving the CreditWatch placements, Standard & Poor's will
monitor the progress that the companies make toward closing the
transaction, which they anticipate doing within the next 30 days,
subject to customary closing conditions. "We expect, upon closing,
to raise the corporate credit rating on Continental Alloys to be
in line with the rating on Reliance and subsequently withdraw both
the corporate credit rating and issue-level ratings on the
company," said Standard & Poor's credit analyst Fred Ferraro.
Continental provides pipe, tube, and bar distribution; metals
sourcing and management; and manufacturing of completion products
and tools for the oilfield services sector. The company operates
primarily in the U.S. and Canada and maintains smaller operations
in the U.K. and Asia.
CRYSTAL CATHEDRAL: Drops Greenlaw as Stalking-Horse Bidder
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Crystal Cathedral Ministries withdrew its proposal to
hold an auction where the first bid would have come from Greenlaw
Partners LLC. For $46 million, Greenlaw would have acquired the
facility and leased a portion back to the church with a purchase
option. The sale and leaseback would have been part of a Chapter
11 reorganization plan.
According to the report, the Cathedral dropped support for
Greenlaw to be the stalking-horse after receiving two offers or
indications of interest:
* Chapman University made a similar $46 million proposal. The
creditors' committee was behind the Chapman offer, saying it
had "clear benefits to the ministry."
* The Roman Catholic Bishop of Orange County, California, filed
papers in bankruptcy court this week laying out interest in
acquiring the facility and maintaining operations as a place
of worship. The bishop said his church had outgrown its
existing Holy Family cathedral which has only 900 seats.
The bankruptcy judge told the parties to return to court on
Aug. 1 for a status conference.
About Crystal Cathedral
Crystal Cathedral Ministries is a Southern California-based
megachurch founded by television evangelist Robert Schuller. The
church, known for its television show "The Hour of Power."
Crystal Cathedral filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor
disclosed $72,872,165 in assets and $48,460,826 in liabilities as
of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop
Couchot P.C. represent the Debtor.
The U.S. Trustee for Region 16 appointed seven members to the
official committee of unsecured creditors in the Chapter 11 case
of Crystal Cathedral Ministries. Todd C. Ringstad, Esq., at
Ringstad & Sanders, LLP, represent the Committee.
CROWN MEDIA: Closes $300 Million of 10.5% Senior Notes Offering
---------------------------------------------------------------
Crown Media Holdings, Inc., announced the closing of its offering
in a private placement of $300 million in aggregate principal
amount of 10.5% senior notes due 2019. Crown Media also entered
into a new $240 million senior secured credit facilities
consisting of (i) a seven year $210 million senior secured term
loan facility and (ii) a five year $30 million senior secured
super-priority revolving credit facility.
The proceeds of the term loans and a portion of the proceeds of
the Notes were used to repay borrowings under Crown Media's
existing credit agreement with its affiliate, H C Crown, LLC, a
subsidiary of Hallmark Cards, Inc., and the remaining proceeds of
the Notes were used to redeem all of Crown Media's outstanding
Series A Preferred Stock, all of which was held by HCC. The
revolving credit facility will be used in the future for general
corporate purposes. The existing credit agreement with HCC was
comprised of a Term A Loan that bore interest at 9.5% per annum
through Dec. 31, 2011, and 12% thereafter, and a Term B Loan that
bore interest at 11.5% through Dec. 31, 2011, and at 14%
thereafter. The dividend rate for the Series A Preferred Stock
was 14% and would have increased to 16% beginning on Jan. 1, 2012.
A full-text copy of the Form 8-k filing is available for free at:
http://is.gd/2OP997
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Hallmark Cards, Incorporated, and its
affiliates disclosed that they beneficially own 324,885,516 shares
of Class A common stock of the Company representing 90.3% of the
shares outstanding. A full-text copy of the filing is available
for free at http://is.gd/VLBQMW
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.
DELIVERENCE CHRISTIAN: Case Summary & Creditors List
----------------------------------------------------
Debtor: Deliverence Christian Church
2130 31st Street N.W.
Canton, OH 44709
Bankruptcy Case No.: 11-62306
Chapter 11 Petition Date: July 13, 2011
Court: U.S. Bankruptcy Court
Northern District of Ohio (Canton)
Judge: Russ Kendig
Debtor's Counsel: David A. Mucklow, Esq.
919 E. Turkeyfoot Lake Road, #B
Akron, OH 44312
Tel: (330) 896-8190
Fax: (330)896-8201
E-mail: davidamucklow@yahoo.com
Scheduled Assets: $3,080,264
Scheduled Debts: $1,283,713
A list of the Company's 15 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/ohnb11-62306.pdf
The petition was signed by Warren P. Chavers, senior pastor.
DELTA PETROLEUM: To Effect a 1-for-10 Reverse Stock Split
---------------------------------------------------------
Delta Petroleum Corporation announced that its shareholders have
approved an amendment of the Company's certificate of
incorporation to effect a reverse stock split at an exchange ratio
of 1-for-10, and to reduce the number of authorized shares of
common stock from 600 million to 200 million. The reverse stock
split will be effective at the opening of trading on July 13,
2011. Upon effect of the reverse stock split, the stock will
trade with a "D" next to the symbol "DPTR" for 30 calendar days to
signify the reverse stock split has occurred. With the effect of
the reverse stock split, the Company expects to satisfy NASDAQ's
continued listing requirements.
When the reverse stock split becomes effective, every ten shares
of issued and outstanding common stock will automatically be
combined into one share of issued and outstanding common stock
without any change in the par value per share. Stockholders will
not receive fractional post-reverse stock split shares in
connection with the reverse stock split. The Company's Transfer
Agent is instructed to aggregate all fractional shares and arrange
for them to be sold in sales conducted in an orderly fashion at a
reasonable pace as soon as practicable after the effective time of
the reverse stock split at the then prevailing prices on the open
market on behalf of those stockholders who would otherwise be
entitled to receive a fractional share. After completing the
sales, the Transfer Agent is instructed to send payment to each of
the affected stockholders in an amount equal to the stockholder's
pro rata share of the total net proceeds of these sales.
Delta stockholders of record at the close of business on May 13,
2011, were entitled to vote at the Meeting. Of the 286,027,476
shares of common stock issued and outstanding as of the Record
Date, 225,025,505 shares of common stock were present or
represented by proxy at the Meeting.
Delta's stockholders elected all of the directors nominated by
Delta's Board of Directors, namely: (1) Carl E. Lakey, (2) Kevin
R. Collins, (3) Jerrie F. Eckelberger, (4) Jean-Michel Fonck, (5)
Anthony Mandekic, (6) James J. Murren, (7) Jordan R. Smith and (8)
Daniel J. Taylor. The Stockholders ratified the appointment of
KPMG LLP as Delta's independent registered public accounting firm
for the fiscal year ending Dec. 31, 2011. Additionally, Delta's
stockholders approved, on an advisory basis, the compensation of
Delta's named executive officers and the holding of an advisory
stockholder vote on the compensation of Delta's named executive
officers every year.
About Delta Petroleum Corp
Delta Petroleum Corporation -- http://www.deltapetro.com/-- is an
oil and gas exploration and development company based in Denver,
Colorado. The Company's core area of operation is in the Rocky
Mountain region, where the majority of its proved reserves,
production and long-term growth prospects are located. Its common
stock is listed on the NASDAQ Capital Market System under the
symbol "DPTR."
The Company reported a net loss of $30.26 million on $23.05
million of total revenue for the three months ended March 31,
2011, compared with a net loss of $15.99 million on $29.17 million
of total revenue for the same period during the prior year.
The Company's balance sheet at March 31, 2011, showed
$1.01 billion in total assets, $527.04 million in total
liabilities, and $483.75 million in total equity.
As reported by the TCR on March 18, 2011, KPMG LLP, in Denver,
Colorado, noted that due to continued losses and limited borrowing
capacity the Company is evaluating sources of capital to fund the
Company's near term debt obligations. "There can be no assurances
that actions undertaken will be sufficient to repay obligations
under the credit facility when due, which raises substantial doubt
about the Company's ability to continue as a going concern."
DELTATHREE INC: Receives $200,000 from D4 Holdings
--------------------------------------------------
deltathree, Inc., Delta Three Israel, Ltd., and DME Solutions,
Inc., entered into the Third Loan and Security Agreement with D4
Holdings, LLC, on March 2, 2011, pursuant to which D4 Holdings
provided to the Deltathree Entities a line of credit in a
principal amount of $1,600,000.
On July 13, 2011, deltathree, Inc., received $200,000 from D4
Holdings pursuant to a notice of borrowing under the Loan
Agreement.
About deltathree
Based in New York, deltathree, Inc. (OTC QB: DDDC) --
http://www.deltathree.com/-- is a global provider of video and
voice over Internet Protocol (VoIP) telephony services, products,
hosted solutions and infrastructures for service providers,
resellers and direct consumers.
The Company's balance sheet at March 31, 2011, showed
$1.86 million in total assets, $4.44 million in total liabilities,
and a stockholders' deficit of $2.58 million.
As reported in the TCR on March 23, 2011, Brightman Almagor Zohar
& Co., in Tel Aviv, Israel, expressed substantial doubt about
deltathree, Inc.'s ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that of the Company's recurring losses from operations and
deficiency in stockholders' equity.
DIAMOND RANCH: Incurs $547,732 Net Loss in Fiscal 2011
------------------------------------------------------
Diamond Ranch Foods, Ltd., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K reporting a net
loss of $547,732 on $7.16 million of net revenues for the fiscal
year ended March 31, 2011, compared with a net loss of $829,823 on
$8.54 million of net revenues during the prior year.
The Company's balance sheet at March 31, 2011, showed $942,000 in
total assets, $6.00 million in total liabilities, and a
$5.05 million total stockholders' deficit.
Gruber & Company, LLC, in Lake Saint Louis, Missouri, noted that
the Company has suffered recurring losses from operations that
raise substantial doubt about its ability to continue as a going
concern.
A major part of the Company's liabilities are in the form of
loans, which were obtained for operating and development purposes.
If these loans were not to be renewed the Company would be forced
to seek either alternative financing sources, new equity
investment, or alternatively sell certain material assets or seek
reorganization under bankruptcy rules. In the event these loans
could not be continued there can be no current assurance of the
continued viability of the Company. Additionally, in the event
that revenues were to decline below operating cost and such
resultant loss exceeded cash and short term receivables there
again can be no current assurance of the continued viability of
the Company.
On March 31, 2009, a group of former employees of the company
filed an involuntary petition against the company for relief under
chapter 7 of the Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York. The company has
filed a motion to dismiss the involuntary case on the grounds that
the former employees are not holders of claims eligible to
commence an involuntary petition under law and that the filing of
the involuntary petition was motivated by bad faith. In
connection with its motion to dismiss the involuntary case, the
company has asserted claims against the former employees for
compensatory and punitive damages. As of July 14, 2011, no order
for relief under the Bankruptcy Code has been entered by the
Bankruptcy Court.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/I0GK8t
About Diamond Ranch
Diamond Ranch Foods, Ltd. -- http://www.diamondranchfoods.com/--
is a meat processing and distribution company now located in the
Hunts Point Coop Market, Bronx, New York. The Company's
operations consist of packing, processing, labeling, and
distributing products to a customer base, including, but not
limited to; in-home food service businesses, retailers, hotels,
restaurants, and institutions, deli and catering operators, and
industry suppliers.
DILLARD LAND: Court Dismisses Second Chapter 11 Case
----------------------------------------------------
Judge James R. Sacca of the Bankruptcy Court for the Northern
District of Georgia has dismissed Dillard Land Investments, LLC's
Chapter 11 case filed on May 2, 2011, after finding that the
Debtor was ineligible to file the second Chapter 11 case.
Dillard Land Investments, LLC, filed a Chapter 11 petition on
Sept. 7, 2010, case number 10-86573. On Feb. 24, 2011, an order
was entered dismissing the First Bankruptcy Case pursuant to 11
U.S.C. Section 1112(b). The Dismissal Order provided that the
Debtor was ineligible to file for bankruptcy for a period of 180
days from the date of the Dismissal Order.
On May 2, 2011, the Debtor filed a motion to reopen the first
Bankruptcy Case and a motion to amend the dismissal order to
delete the provision that the first bankruptcy case was dismissed
with prejudice to its right to file a subsequent bankruptcy case
for 180 days from the date of the Dismissal Order. The Court
entered an Order on May 5, 2011, granting the motion to reopen so
that the Debtor could prosecute its motion to amend.
About Dillard Land Investments, LLC
Atlanta, Georgia-based Dillard Land Investments, LLC, filed for
Chapter 11 bankruptcy protection on September 7, 2010 (Bankr. N.D.
Ga. Case No. 10-86573). On Feb. 4, 2011, the Hon. James R. Sacca
of the U.S. Bankruptcy Court for the Northern District of Georgia
dismissed the Chapter 11 case of Dillard Land Investments LLC, at
the behest of 1615 Johnson Road LLC.
Dillard Land Investments, LLC, filed a second Chapter 11
protection (Bankr. N.D. Ga. Case No. 11-63566) on May 2, 2011.
Paul Reece Marr, Esq., at Paul Reece Marr, P.C., represents the
Debtor in its restructuring effort. The Debtor disclosed
$26,325,061 in assets and $8,863,900 in liabilities as of the
Chapter 11 filing.
DOLE FOOD: S&P Rates $900MM Senior Secured Term Loans at 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services is assigning issue-level and
recovery ratings to Westlake Village, Calif.-based fresh fruit and
vegetable producer and marketer Dole Food Co.'s new $900 million
senior secured term loan facilities. "We assigned a 'BB-' issue-
level rating (two notches higher than the corporate credit rating
on Dole) to the senior secured term loan facilities. The recovery
rating is '1', indicating our expectation for very high (90% to
100%) recovery in the event of a payment default. Dole has
refinanced all of its existing credit facilities with a new $315
million senior secured term loan B-2 due 2018 (issued by Dole Food
Co. Inc.), and a new $585 million senior secured term loan C-2 due
2018 (issued by Solvest Ltd., a foreign subsidiary), as well as a
new $350 million asset-based revolving credit facility maturing
2016 (not rated)," S&P related.
The company intends to use the proceeds from these new facilities
to refinance its existing $1.16 billion senior secured credit
facilities and for general corporate purposes. This refinancing
does not result in any changes to the issue-level or recovery
ratings on the company's other existing note issues, including its
junior-lien secured notes and senior unsecured notes. "We withdrew
the ratings on the company's existing senior secured credit
facilities following the close of this refinancing transaction,"
S&P said.
The 'B' long-term corporate credit rating on Dole and the stable
outlook remain unchanged. "We characterize Dole's business risk
profile as weak and its financial risk profile as highly
leveraged. Standard & Poor's ratings on Dole reflect the company's
leveraged financial profile and its participation in the
competitive, commodity-oriented, seasonal, and volatile fresh
produce industry, which we believe is subject to political and
economic risks," S&P related.
Ratings List
Dole Food Co. Inc.
Corporate credit rating B/Stable/--
Ratings assigned
Dole Food Co. Inc.
Senior secured
$315 mil. term loan B-2 due 2018 BB-
Recovery rating 1
Solvest Ltd.
Senior secured
$585 mil. term loan C-2 due 2018 BB-
Recovery rating 1
EARTH SEARCH: Incurs $1.85 Million Net Loss in Fiscal 2011
----------------------------------------------------------
Earth Search Sciences, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K reporting a net
loss of $1.85 for the fiscal year ended March 31, 2011, compared
with a net loss of $1.25 million during the prior year.
The Company's balance sheet at March 31, 2011, showed $319,704 in
total assets, $20.87 million in total liabilities and a $20.55
million total stockholders' deficit.
MaloneBailey, LLP, in Houston, Texas, noted that the Company has a
$20,553,359 working capital deficit as of March 31, 2011, which
raises substantial doubt about the Company's ability to continue
as a going concern.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/Kt2hEd
About Earth Search
Lakeside, Montana-based Earth Search Sciences, Inc., is a Nevada
corporation. The Company has five wholly-owned subsidiaries:
Skywatch Exploration, Inc., Polyspectrum Imaging, Inc., Geoprobe,
Inc., STDC, Inc and General Synfuels International. In addition,
there are five majority-owned consolidated subsidiaries: Earth
Search Resources, Inc., Eco Probe, Inc., ESSI Probe 1 LC, Petro
Probe, Inc. and Terranet, Inc. All subsidiaries except Petro
Probe and General Synfuels were inactive during fiscal 2009 and
2010.
EMMIS COMMUNICATIONS: Incurs $693,000 Net Loss in May 31 Quarter
----------------------------------------------------------------
Emmis Communications Corporation filed with the U.S. Securities
and Exchange Commission its Quarterly Report on Form 10-Q
reporting a consolidated net loss of $693,000 on $61.14 million of
net revenues for the three months ended May 31, 2011, compared
with a consolidated net loss of $704,000 on $60.21 million of net
revenues for the same period during the prior year.
The Company's balance sheet at May 31, 2011, showed
$470.91 million in total assets, $474.41 million in total
liabilities, $140.46 million in Series A Cumulative Convertible
Preferred Stock, and a $143.96 million total deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/gCoBLp
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation -- http://www.emmis.com/-- owns and operates 22 radio
stations serving New York, Los Angeles, Chicago, St. Louis,
Austin, Indianapolis, and Terre Haute, as well as national radio
networks in Slovakia and Bulgaria. The company also publishes six
regional and two specialty magazines.
The Company reported a consolidated net loss of $11.54 million on
$251.31 million of net revenues for the year ended Feb. 28, 2011,
compared with a consolidated net loss of $118.49 million on
$242.56 million of net revenues during the prior year.
* * *
In November 2010, Moody's Investors Service affirmed the 'Caa2'
Corporate Family Rating and 'Caa3' Probability of Default rating
for Emmis Communications Corporation, as well as its SGL-4
speculative grade liquidity rating. Operating performance
improved with the economic recovery, but absent debt reduction
with proceeds from an asset sale or equity infusion Emmis will
likely breach its leverage covenant when the covenant suspension
period ends for the quarter ending November 30, 2011, in Moody's
opinion.
Emmis' CFR and PDR incorporate expectations for a covenant breach
in November 2011. Moody's considers the Company's capital
structure unsustainable, and its operations in the cyclical
advertising business magnify this challenge. Furthermore, Emmis
relies on two markets, Los Angeles and New York, for approximately
50% of its revenue, although its ownership of stations in top
markets including Chicago as well as NY and LA, support the
rating.
The negative outlook incorporates Moody's expectations that Emmis
will not comply with its maximum leverage covenant when effective
for the quarter ending November 30, 2011.
EMMIS COMMUNICATIONS: Moody's Places 'Caa2' on Review for Upgrade
-----------------------------------------------------------------
Moody's Investors Service placed the ratings of Emmis
Communications Corporation on review for possible upgrade
following the company's earnings release for 1Q12 (ended May 31,
2011) including additional disclosure related to the pending sale
of controlling interests in three radio stations. The sale of the
majority ownership to GCTR will generate estimated net proceeds of
approximately $100 million to $120 million, after taxes, fees and
related expenses. Emmis will retain a minority equity interest in
the operations of the three stations and Moody's expects senior
secured debt to be reduced resulting in improved credit metrics.
On Review for Possible Upgrade:
Issuer: Emmis Communications Corporation
-- Corporate Family Rating - Placed on Review for Possible
Upgrade, currently Caa2
-- Probability of Default Rating - Placed on Review for
Possible Upgrade, currently Caa3
-- Preferred Stock -- Placed on Review for Possible Upgrade,
currently Ca, LGD6, 98%
Outlook and Other Actions:
-- Outlook, Changed To Rating Under Review From Negative
-- Speculative Grade Liquidity (SGL) Rating, Changed To
SGL -- 3 from SGL -- 4
Issuer: Emmis Operating Company
-- Senior Secured Credit Facilities -- Placed on Review for
Possible Upgrade, currently Caa2, LGD3, 35%
Recently reported financial results for Emmis suggest the start of
operating stability as revenues increased 1.5% to $61.1 million
for the fiscal quarter ended May 31, 2011 compared to $60.2
million for the same period in the prior year. In addition to the
potential for improving operations, management is intent on
reducing debt balances by divesting non-core assets. Moody's
expects Emmis to apply net proceeds from the pending sale of
controlling interests in two Chicago and one New York station
towards debt reduction resulting in lower total debt-to-EBITDA
ratios of approximately 10x (including Moody's standard
adjustments and treating preferred shares as debt) and senior
secured debt-to-EBITDA ratios under 7x compared to approximately
12x and 9x, respectively, prior to the transaction. The
transaction is expected to close by the end of this year and is
subject to FCC approval. Moody's review of ratings will focus on
the performance of the company's broadcasting and publishing
operations and will also consider the company's financial profile
including its ability to further reduce debt balances.
Please see ratings tab on the issuer/entity page on Moodys.com for
the last credit rating action and the rating history.
The principal methodology used in rating Emmis Communications
Corporation was the Global Broadcast Industry Methodology
published in June 2008.
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation owns and operates 22 radio stations serving New York,
Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre
Haute. An additional FM station owned by Emmis in Los Angeles
operates pursuant to a Local Marketing Agreement by a third party.
The company also publishes six regional and two specialty
magazines with revenue for the twelve months ending May 31, 2011
of $252 million.
EMPIRE TODAY: S&P Cuts Corp. Credit Rating to B-; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Chicago-based Empire Today LLC to 'B-' from 'B'. The
outlook is stable.
"At the same time, we lowered our issue rating on the company's
$150 million senior secured notes due 2017 to 'B-' from 'B'. The
recovery rating remains '4', indicating our expectation for
average (30%-50%) recovery for noteholders in the event of a
payment default. We estimate Empire has about $150 million
in reported debt outstanding," S&P related.
"The ratings on Empire reflect our expectation for credit measures
to remain weaker than 'B' rating category medians for the
foreseeable future," said Standard & Poor's credit analyst Brian
Milligan. "Based on the risks we see in the company's reliance on
discretionary consumer spending for major home improvement
projects, its need for effective TV advertising to generate
customer leads, and the narrow product selection primarily in
residential replacement flooring, we categorize the company's
business risk profile as vulnerable."
ENCINO CORPORATE: Has Access to Wells Fargo's Cash Until Sept. 30
-----------------------------------------------------------------
The Hon. Honorable Geraldine Mund of the U.S. Bankruptcy Court
Central District of California approved the second stipulation
authorizing Encino Corporate Plaza, L.P., to use the cash
collateral until Sept. 30, 2011.
Wells Fargo Bank, N.A., Trustee for the Certificateholders of the
ML-CFC Commercial Mortgage Trust 2006-3, Commercial Mortgage Pass-
Through Certificates Series 2006-3, asserts that it is owed in
excess of $33 million under the loan, secured by the real property
-- Encino Corporate Plaza, located at 16661 Ventura Boulevard,
Encino, California.
The Debtor will use the cash collateral for payment of monthly
debt service payments to the bank and quarterly fees payable to
the Office of the U.S. Trustee.
The Debtor is also authorized to deviate from the allowed line
items contained in the budget during the authorized period by not
more than 10%, on both a line item and aggregate basis.
On a continuing basis during the authorized period, East West Bank
is ordered and directed to release all funds contained in the
Lockbox Account which exceed the amount that was present in the
Lockbox Account on April 20, 2011 (estimated to be $176,120) to
the Debtor to be deposited into the Debtor's debtor-in-possession
bank account.
A continued hearing on the motion and the Debtor's authority to
use cash collateral will be held on Sept. 27, 2011 at 10:00 a.m.
About Encino Corporate
Encino Corporate Plaza, L.P., owns a real property located at
16661 Ventura Boulevard, Encino, California. The Company filed a
Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-14917) on
April 20, 2011. David L. Neale, Esq., at Levene Neale Bender
Rankin & Brill LLP, in Los Angeles, California, serves as the
Debtor's counsel. The Debtor disclosed $34,268,167 in assets and
$33,413,759 in liabilities as of the Chapter 11 filing.
ENERGY FUTURE: Expects $400MM Non-Cash Impairment Charge in Q3
--------------------------------------------------------------
The United States Environmental Protection Agency, in 2005, issued
the Clean Air Interstate Rule requiring states to reduce emissions
of sulfur dioxide and nitrogen oxide that significantly contribute
to or interfere with maintenance of the EPA's National Ambient Air
Quality Standards for fine particulate matter or ozone in downwind
states. In 2008, the United States Court of Appeals for the D.C.
Circuit invalidated the CAIR, but allowed the rule to continue
until such time as the EPA issued a final replacement rule.
In August 2010, the EPA issued for comment a proposed replacement
rule for CAIR called the Clean Air Transport Rule. As proposed,
the CSAPR did not include the State of Texas in its annual sulfur
dioxide or nitrogen oxide programs to address alleged downwind
fine particulate effects. However, the EPA solicited comment on
whether the State of Texas should be included in the annual
program because of possible future concerns regarding downwind
effects related to the annual NAAQS for fine particulate matter.
On July 7, 2011, the EPA issued the final CSAPR. As issued, the
final CSAPR includes the State of Texas in its annual sulfur
dioxide and nitrogen oxide emissions reduction programs, as well
as the seasonal nitrogen oxide emissions reduction program. These
programs would require significant additional reductions of sulfur
dioxide and nitrogen oxide emissions from coal-fueled generation
units in covered states and institute a limited "cap and trade"
system to achieve required reductions. Compliance with the CSAPR
is required beginning Jan. 1, 2012.
Based on the provisions of the CSAPR, the Company expects to have
more sulfur dioxide emissions allowances than the Company will
need to comply with the Clean Air Act's existing acid rain cap-
and-trade program. The Company's sulfur dioxide emission
allowances were recorded as intangible assets at fair value in
connection with purchase accounting related to the Company's
merger transaction in October 2007. Accordingly, on July 13,
2011, the Company determined that it expects to record a non-cash
impairment charge in the third quarter of 2011 of approximately
$400 million related to the Company's existing sulfur dioxide
emission allowance assets. The Company does not expect this non-
cash impairment charge to cause the Company or any of its
subsidiaries to be in default under any of the Company's
respective debt agreements or have a material impact on liquidity.
About Energy Future
Energy Future Holdings 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.
* * *
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.
The Company's balance sheet at March 31, 2011, showed
$45.13 billion in total assets, $51.38 billion in total
liabilities, and a $6.25 billion total deficit.
FENTON SUB PARCEL: Cash Collateral Hearing Set for July 20
----------------------------------------------------------
Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC will return to
the Bankruptcy Court on Wednesday to seek authority to use cash
collateral consisting of rents in which Wells Fargo Bank, N.A. --
as trustee for the registered holders of J.P. Morgan Chase
Commercial Mortgage Securities Corp., Commercial Mortgage Pass-
Through Certificates, Series 2004-LN2 -- holds a security
interest. The Debtors will use the cash collateral to continue
their operations and to either reorganize or pursue an asset sale.
The Debtors request final authorization to use cash collateral
through Dec. 31, 2011. They believe that Wells Fargo is
adequately protected by the equity cushion in the real property,
as well as the Debtors' continued maintenance of the property.
The original financing was provided by Nomura Credit and Capital,
Inc., in the amount of $11,604,000. The Debtors currently owe
$10,535,364 under the promissory note, which matures May 11, 2014.
The principal on the First Mortgage Debt has been paid down by
over $1 million to date.
The Debtors' cash flow projection show that through December 2011,
total income is expected to be $621,959 and total operating
expenses is expected to be $449,765. Total expenses is expected
to be $607,807.
About Fenton Sub Parcel D and Bowles Sub Parcel D
Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own
industrial multi-tenant properties located in the Twin Cities.
They are controlled by StoneArch II/WCSE Minneapolis Industrial
LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and
of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100%
member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is
the 100% member of Fenton Sub Parcel D, LLC.
In 2007, StoneArch acquired various LLCs, which in turn owned 27
industrial multi-tenant properties located in the Twin Cities.
The properties were divided into four separate pools: A, B, C, and
D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the
properties in pool D. As tenants in common, Fenton Sub Parcel D
has an undivided 74.5394% interest and Bowles Sub Parcel D has an
undivided 25.4606% interest. The Pool D Properties consist of six
parcels of real property located in Anoka, Dakota, and Hennepin
Counties, Minnesota. The Debtors expect the Pool D Properties to
be worth $13,135,656 as of the Petition Date.
Although they are two separate legal entities, Fenton Sub Parcel D
and Bowles Sub Parcel D have consistently been treated as one
enterprise. Hoyt Properties, Inc., acts as agent in managing the
Pool D Properties.
Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11
bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on
June 29, 2011. The Debtors' petitions were signed by Steven Bruce
Hoyt, chief manager, who is a debtor in bankruptcy case number 11-
43816. He is separately represented by Michael C. Meyer of the
firm Ravich Meyer.
The cases were originally assigned to Judge Dennis D. O'Brien and
reassigned to Judge Robert J. Kressel as the cases are related to
the Hoyt case, which was filed earlier and assigned to Judge
Kressel.
Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M.
Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors.
FENTON SUB PARCEL: Hires Fredrikson & Byron as Bankruptcy Counsel
-----------------------------------------------------------------
Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC ask the
Bankruptcy Court for authority to employ Fredrikson & Byron, P.A.,
as bankruptcy counsel.
The Debtors have provided a combined retainer of $35,000 for the
services to be rendered and fees incurred prior to the case, and
during the chapter 11 case. The two filing fees of $1,039 each
will be paid by the Debtors pursuant to Fredrikson & Byron's first
fee application.
James L. Baillie, Esq., a shareholder at the firm, attests that
the firm does not (a) represent any entity in connection with the
case, (b) does not hold or represent any interest adverse to the
estates, and (c) are disinterested under Sec. 327 of the
Bankruptcy Code.
Fredrikson & Byron represents Carlson Real Estate Company, and an
affiliate of Carlson Real Estate Company is an investor in an LLC
that owns less than 20% of an LLC that holds the membership
interest in the Debtors. Carlson Real Estate Company has given
Fredrikson & Byron a waiver with respect to Fredrikson & Byron's
representation of the Debtors.
A shareholder of Fredrikson & Byron is the representative for a
trust that is an investor in an LLC that owns less than 20% of an
LLC that holds the membership interest in the Debtors. The
shareholder, on behalf of the trust, has given Fredrikson & Byron
a waiver with respect to Fredrikson & Byron's representation of
the Debtors.
About Fenton Sub Parcel D and Bowles Sub Parcel D
Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own
industrial multi-tenant properties located in the Twin Cities.
They are controlled by StoneArch II/WCSE Minneapolis Industrial
LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and
of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100%
member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is
the 100% member of Fenton Sub Parcel D, LLC.
In 2007, StoneArch acquired various LLCs, which in turn owned 27
industrial multi-tenant properties located in the Twin Cities.
The properties were divided into four separate pools: A, B, C, and
D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the
properties in pool D. As tenants in common, Fenton Sub Parcel D
has an undivided 74.5394% interest and Bowles Sub Parcel D has an
undivided 25.4606% interest. The Pool D Properties consist of six
parcels of real property located in Anoka, Dakota, and Hennepin
Counties, Minnesota. The Debtors expect the Pool D Properties to
be worth $13,135,656 as of the Petition Date.
Although they are two separate legal entities, Fenton Sub Parcel D
and Bowles Sub Parcel D have consistently been treated as one
enterprise. Hoyt Properties, Inc., acts as agent in managing the
Pool D Properties.
Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11
bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on
June 29, 2011. The Debtors' petitions were signed by Steven Bruce
Hoyt, chief manager, who is a debtor in bankruptcy case number 11-
43816. He is separately represented by Michael C. Meyer of the
firm Ravich Meyer.
The cases were originally assigned to Judge Dennis D. O'Brien and
reassigned to Judge Robert J. Kressel as the cases are related to
the Hoyt case, which was filed earlier and assigned to Judge
Kressel.
FENTON SUB PARCEL: Sec. 341 Creditors' Meeting Set for Aug. 8
-------------------------------------------------------------
The U.S. Trustee for Region 12 in Minnesota will convene a meeting
of creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy
cases of Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC on
Aug. 8, 2011, at 1:30 p.m. at Mtg Minneapolis -- US Courthouse,
300 S 4th St 10th Floor.
The last day to object to discharge is Oct. 7, 2011. Proofs of
claim are due by Nov. 7, 2011.
The Debtor's representative must be present at the meeting to be
questioned under oath by the trustee and by creditors. Creditors
are welcome to attend, but are not required to do so. The meeting
may be continued and concluded at a later date without further
notice.
About Fenton Sub Parcel D and Bowles Sub Parcel D
Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own
industrial multi-tenant properties located in the Twin Cities.
They are controlled by StoneArch II/WCSE Minneapolis Industrial
LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and
of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100%
member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is
the 100% member of Fenton Sub Parcel D, LLC.
In 2007, StoneArch acquired various LLCs, which in turn owned 27
industrial multi-tenant properties located in the Twin Cities.
The properties were divided into four separate pools: A, B, C, and
D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the
properties in pool D. As tenants in common, Fenton Sub Parcel D
has an undivided 74.5394% interest and Bowles Sub Parcel D has an
undivided 25.4606% interest. The Pool D Properties consist of six
parcels of real property located in Anoka, Dakota, and Hennepin
Counties, Minnesota. The Debtors expect the Pool D Properties to
be worth $13,135,656 as of the Petition Date.
Although they are two separate legal entities, Fenton Sub Parcel D
and Bowles Sub Parcel D have consistently been treated as one
enterprise. Hoyt Properties, Inc., acts as agent in managing the
Pool D Properties.
Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11
bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on
June 29, 2011. The Debtors' petitions were signed by Steven Bruce
Hoyt, chief manager, who is a debtor in bankruptcy case number
11-43816. He is separately represented by Michael C. Meyer of the
firm Ravich Meyer.
The cases were originally assigned to Judge Dennis D. O'Brien and
reassigned to Judge Robert J. Kressel as the cases are related to
the Hoyt case, which was filed earlier and assigned to Judge
Kressel.
Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M.
Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors.
FENTON SUB PARCEL: Files Schedules of Assets and Debts
------------------------------------------------------
Fenton Sub Parcel D, LLC, filed with the Bankruptcy Court its
schedules of assets and liabilities, disclosing:
Schedule Total Assets Total Liabilities
-------- ------------ -----------------
A - Real Property $12,856,000
B - Personal Property $1,460,311
C - Property Claimed
as Exempt N/A
D - Creditors Holding
Secured Claims $11,855,077
E - Creditors Holding
Unsecured Priority
Claims $0
F - Creditors Holding
Unsecured Nonpriority
Claims $3,298,933
------------ -----------------
$14,316,311 $15,154,010
About Fenton Sub Parcel D and Bowles Sub Parcel D
Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own
industrial multi-tenant properties located in the Twin Cities.
They are controlled by StoneArch II/WCSE Minneapolis Industrial
LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and
of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100%
member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is
the 100% member of Fenton Sub Parcel D, LLC.
In 2007, StoneArch acquired various LLCs, which in turn owned 27
industrial multi-tenant properties located in the Twin Cities.
The properties were divided into four separate pools: A, B, C, and
D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the
properties in pool D. As tenants in common, Fenton Sub Parcel D
has an undivided 74.5394% interest and Bowles Sub Parcel D has an
undivided 25.4606% interest. The Pool D Properties consist of six
parcels of real property located in Anoka, Dakota, and Hennepin
Counties, Minnesota. The Debtors expect the Pool D Properties to
be worth $13,135,656 as of the Petition Date.
Although they are two separate legal entities, Fenton Sub Parcel D
and Bowles Sub Parcel D have consistently been treated as one
enterprise. Hoyt Properties, Inc., acts as agent in managing the
Pool D Properties.
Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11
bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on
June 29, 2011. The Debtors' petitions were signed by Steven Bruce
Hoyt, chief manager, who is a debtor in bankruptcy case number 11-
43816. He is separately represented by Michael C. Meyer of the
firm Ravich Meyer.
The cases were originally assigned to Judge Dennis D. O'Brien and
reassigned to Judge Robert J. Kressel as the cases are related to
the Hoyt case, which was filed earlier and assigned to Judge
Kressel.
Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M.
Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors.
FIRST FEDERAL: Christopher Wewers Appointed EVP and COO
-------------------------------------------------------
First Federal Bancshares of Arkansas, Inc., appointed Christopher
Wewers as Executive Vice President and Chief Operating Officer of
the Company and First Federal Bank, the wholly-owned subsidiary of
the Company. In order to facilitate the relocation of Mr. Wewers'
home and family from Arkadelphia, Arkansas, to Harrison, Arkansas,
on July 8, 2011, the Company purchased Mr. Wewer's house in
Arkadelphia, Arkansas, for $345,000.00, and the Bank reimbursed
him for reasonable moving expenses, not exceeding $15,000. The
purchase price for the house was based on an appraisal obtained by
the Company from an independent, third-party appraiser. The
Company will sell the house and will receive the proceeds from its
sale, with any gain or loss on resale being borne by the Company.
The Company will also pay any out-of-pocket expenses and
associated fees related to the purchase and resale of the house.
About First Federal Bancshares of Arkansas
First Federal Bancshares of Arkansas, Inc. (NASDAQ GM:FFBH) --
http://www.ffbh.com/-- is a unitary savings and loan holding
company for First Federal Bank, a community bank serving consumers
and businesses with a full range of checking, savings, investment
and loan products and services. The Bank, founded in 1934,
conducts business from 20 full-service branch locations, one
stand-alone loan production office, and 30 ATMs located in
Northcentral and Northwest Arkansas.
The Company reported a net loss of $4.03 million on $29.82 million
of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $45.49 million on $36.04 million in
total interest income during the prior year.
The Company's balance sheet at March 31, 2011, showed $577.67
million in total assets, $542.88 million in total liabilities and
$34.79 million in total stockholders' equity.
BKD, LLP expressed substantial doubt about the bank holding
company's ability to continue as a going concern. The accounting
firm noted that the Company has experienced significant losses in
recent years and has significant levels of nonperforming assets.
Furthermore, the Company has entered into a written agreement with
the Office of Thrift Supervision which requires the Company to
meet certain capital requirements by Dec. 31, 2010, which were not
met.
FIRST PEOPLES BANK: Closed; Premier Assumes All Deposits
--------------------------------------------------------
First Peoples Bank of Port Saint Lucie, Fla., was closed Friday,
July 15, 2011, by the Florida Office of Financial Regulation,
which appointed the Federal Deposit Insurance Corporation as
receiver. To protect the depositors, the FDIC entered into a
purchase and assumption agreement with Premier American Bank,
National Association, of Miami, Fla., to assume all of the
deposits of First Peoples Bank.
The six branches of First Peoples Bank will reopen during their
normal business hours as branches of Premier American Bank.
Depositors of First Peoples Bank will automatically become
depositors of Premier American Bank. Deposits will continue to be
insured by the FDIC, so there is no need for customers to change
their banking relationship in order to retain their deposit
insurance coverage up to applicable limits. Customers of First
Peoples Bank should continue to use their existing branch until
they receive notice from Premier American Bank that it has
completed systems changes to allow other Premier American Bank
branches to process their accounts as well.
As of March 31, 2011, First Peoples Bank had around $228.3 million
in total assets and $209.7 million in total deposits. In addition
to assuming all of the deposits of the failed bank, Premier
American Bank agreed to purchase essentially all of the assets.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-895-3212. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/firstpeoples.html.
As part of this transaction, the FDIC will acquire a value
appreciation instrument. This instrument serves as additional
consideration for the transaction.
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $7.4 million. Compared to other alternatives, Premier
American Bank's acquisition was the least costly resolution for
the FDIC's DIF. First Peoples Bank is the 54th FDIC-insured
institution to fail in the nation this year, and the seventh in
Florida. The last FDIC-insured institution closed in the state
was First Commerce Bank of Tampa Bay, Tampa, on June 17, 2011.
FIRST SECURITY: Hires Crowe Horwath as New Accountants
------------------------------------------------------
First Security Group, Inc., has dismissed Joseph Decosimo and
Company, PLLC, as its independent registered public accounting
firm and engaged Crowe Horwath LLP as its new independent
registered public accounting firm for its 2011 fiscal year.
Effective July 8, 2011, First Security's Audit/Corporate
Governance Committee has approved the dismissal of Decosimo as
First Security's independent registered public accounting firm.
Included in Decosimo's Report on First Security's Consolidated
Financial Statements for the fiscal year ended Dec. 31, 2010,
which was part of First Security's Annual Report on Form 10-K, was
an explanatory note indicating that there was substantial doubt
about First Security's ability to continue as a going concern.
The financial statements did not include any adjustments to
reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of
liabilities that might result from the outcome of this
uncertainty.
In First Security's Annual Report on Form 10-K for the fiscal year
ended Dec. 31, 2010, First Security identified a material weakness
in internal controls due to First Security failing to maintain an
effective "tone at the top" in the control environment.
Decosimo's Report on Internal Control Over Financial Reporting
agreed with the conclusions of First Security's assessment of its
internal controls. There were no related changes to the financial
statements. First Security has authorized Decosimo to discuss
their findings with Crowe.
In First Security's Amendment No. 2 to First Security's Annual
Report on Form 10-K for the fiscal year ended Dec. 31, 2009, First
Security identified a material weakness in internal controls due
to a deficiency in controls relating to the accounting for timely
charge-offs and write-downs of its other real estate owned.
Decosimo's Report on Internal Control Over Financial Reporting
agreed with First Security's assessment of its internal controls.
In consultation with Decosimo, the Audit Committee determined that
First Security's Annual Report on Form 10-K for the fiscal year
ended Dec. 31, 2009, as amended, and its Quarterly Reports on Form
10-Q for the three and six months ended March 31, 2010, and
June 30, 2010, should not be relied upon, and filed amendments to
each of these reports on Nov. 16, 2010, that restated First
Security's financial statements for each period to accurately
reflect the accounting for First Security's other real estate
owned. This material weakness has been remediated as of Dec. 31,
2010. First Security has authorized Decosimo to discuss their
findings with Crowe.
Except as noted above, Decosimo's audit reports on First
Security's consolidated financial statements for the fiscal years
ended Dec. 31, 2010, and 2009, did not contain any adverse opinion
or disclaimer of opinion, nor were they qualified or modified as
to uncertainty, audit scope or accounting principles. Further,
except as noted above, during the fiscal years ended Dec. 31,
2010, and 2009, and during the period from Jan. 1, 2011, through
July 8, 2011, First Security had (i) no disagreements with
Decosimo on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure,
any of which that, if not resolved to Decosimo's satisfaction,
would have caused it to make reference to the subject matter of
any such disagreement in connection with its reports for such year
and interim periods and (ii) no reportable events within the
meaning of Item 304(a)(1)(v) of Regulation S-K.
Effective July 11, 2011, the Audit Committee approved the
engagement of Crowe as First Security's independent registered
public accounting firm for its 2011 fiscal year.
During the fiscal years ended Dec. 31, 2010, and 2009 and
during the period from Jan. 1, 2011, through July 11, 2011,
neither First Security nor anyone on its behalf has consulted with
Crowe regarding (i) the application of accounting principles to a
specific transaction, either completed or proposed; or the type of
audit opinion that might be rendered on First Security's financial
statements; or (ii) any matter that was the subject of a
disagreement within the meaning of Item 304(a)(1)(iv), or any
reportable event within the meaning of Item 304(a)(1)(v) of
Regulation S-K.
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
On Sept. 7, 2010, the Company entered into a Written Agreement
with the Federal Reserve Bank of Atlanta, the Company's primary
regulator, which prohibits the Company from declaring or paying
dividends without prior written consent of the Federal Reserve.
The Company is also prohibited from taking dividends, or any other
form of payment representing a reduction of capital, from the Bank
without prior written consent.
The Company is also required, within 60 days of the Agreement, to
submit to the Federal Reserve a written plan designed to maintain
sufficient capital at the Company and the Bank.
On April 28, 2010, FSGBank, the Company's wholly-owned subsidiary,
consented and agreed to the issuance of a Consent Order by the
Office of the Comptroller of the Currency (OCC). Pursuant to that
Consent Order, within 120 days of the effective date of the Order,
the Bank is required to achieve and thereafter maintain total
capital at least equal to 13% of risk-weighted assets and
Tier 1 capital at least equal to 9% of adjusted total
assets.
As of Sept. 30, 2010, the first financial reporting period
subsequent to the 120 day requirement, the Bank's total capital to
risk-weighted assets was 12.93% and the Tier 1 capital to
adjusted total assets was 7.43%. The Bank has notified the
OCC of the non-compliance.
The Company reported a net loss of $44.34 million on $54.91
million of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $33.45 million on $64.00 million of
total interest income during the prior year.
The Company's balance sheet at March 31, 2011, showed $1.11
billion in total assets, $1.02 billion in total liabilities and
$90.14 million in total stockholders' equity.
Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred losses from operations for the past two
years. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
FOREST CITY: S&P Rates $300-Mil. Convertible Notes at 'B-'
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' issue rating
and '6' recovery rating to the $300 million 4.25% convertible
senior notes recently issued by Forest City Enterprises Inc.
(Forest City).
The company plans to use offering proceeds to retire or refinance
existing debt obligations, including a $46.9 million puttable
equity-linked note due October 2011, certain higher coupon
mortgage loans, as well as borrowings on its $450 million
revolving credit facility due 2014. The notes will rank equally
with Forest City's existing unsecured obligations and will mature
in 2018, unless earlier repurchased or converted. The notes
contain no financial covenants. However, the notes include a
repurchase obligation in the event of a "fundamental change"
(which would include certain changes in ownership of the company's
common shares).
This debt-for-debt financing will not immediately affect the
existing ratings or negative outlook on the company. "We do
acknowledge the modest support this new layer of lower-cost
capital will provide to Forest City's balance sheet (on the heels
of recent, favorable loan restructurings for two large multifamily
projects in New York City). Nonetheless, we expect debt coverage
measures to remain weak and exposure to development activity and
debt refinancing risk to remain comparatively high," S&P related.
Rating List
Forest City Enterprises Inc. B+/Negative/--
Rating Assigned
$300 million convert sr nts due 2018 B-
Recovery rating 6
GATEHOUSE MEDIA: Bank Debt Trades at 65% Off in Secondary Market
----------------------------------------------------------------
Participations in a syndicated loan under which GateHouse Media,
Inc., is a borrower traded in the secondary market at 34.84 cents-
on-the-dollar during the week ended Friday, July 15, 2011, a drop
of 0.47 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 Feb. 27, 2014, and
carries Moody's Ca rating and Standard & Poor's CCC- rating. The
loan is one of the biggest gainers and losers among 206 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
The Company reported a net loss of $26.64 million on $558.58
million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of $530.61 million on $584.79 million of
total revenue for the year ended Dec. 31, 2009.
The Company's balance sheet at Dec. 31, 2010, showed $546.32
million in total assets, $1.33 billion in total liabilities, and a
$792.12 million stockholders' deficit.
GATEWAY HOTEL: Secured Lender Says Plan Can't Be Confirmed
----------------------------------------------------------
HLT Existing Franchise, LLC, and 2010-1 SFG Venture LLC, a senior
secured lender in the Chapter 11 case of Gateway Hotel LLC, object
to the approval of the disclosure statement explaining Gateway's
Chapter 11 Plan of Reorganization dated May 12, 2011.
According to 2010-1 SFG Venture, four key facts stand at the heart
of why the Debtor's chapter 11 plan cannot be confirmed:
(1) the Debtor offers no valuation of the Property,
(2) Debtor has no equity in the Property,
(3) the priority and secured tax claims of Maricopa County
have been extinguished by SFG, and
(4) Equus cannot serve as an impaired consenting class
because it is an insider.
SFG claims that as a result of these four key facts, the Plan does
not meet several confirmation requirements, because:
(1) 11 U.S.C. Section 1129(a)(1): the Plan uses an improper
classification scheme and fails to specify SFG's
deficiency claim; and
(2) 11 U.S.C. Section 1129(a)(10): with a proper
classification scheme, the Plan will not have an impaired
consenting class.
SFG says that aside from the Plan's unconfirmability, the
disclosure statement fails to provide adequate information
regarding several crucial elements such as the value of the
Property, the satisfaction of the "best interests" test, and the
basis for, and assumptions underlying, the Debtor's sanguine five
year projections. Therefore, based on the unconfirmability of the
Plan and the lack of adequate information in the disclosure
statement, the Court should refuse to approve the disclosure
statement.
2010-1 SFG Venture LLC is represented by:
David D. Cleary, Esq.
Greenberg Traurig LLP
2375 East Camelback Road, Suite 700
Phoenix, Arizona 85016
Phone: (602) 445-8000
Fax: (602) 445-8100
E-mail: clearyd@gtlaw.com
HLT Existing Franchise, LLC, also objects to the Debtor's
Disclosure Statement on the grounds of lack of adequate
information and requests the Court to order the Debtor to amend
its Disclosure Statement and provide information regarding its
intention to assume or reject the franchise licensing agreement
with HLT.
Gateway Hotel LLC and HLT Existing Franchise, LLC, are parties to
a Franchise License Agreement dated August 6, 2007. Pursuant to
the agreement the Debtor is authorized to operate a 192-room hotel
located at 3838 East Van Buren Street, Phoenix, Arizona, as a
Hilton Garden Inn. As of the Petition date, Debtor was indebted
to HLT in the amount of $194,902.22.
The Debtor's Disclosure Statement does not disclose how it
proposes to treat the HLT claim. There is no information
regarding rejection or assumption of the franchise agreement.
HLT has a substantial claim against the Debtor, and nowhere in the
Disclosure Statement does the Debtor provide any terms,
conditions, or treatment of HLT's claim.
In light of its current financial condition and the substantial
amount of arrearage on HLT's claim, there is a lack of adequate
information to show how this Debtor can show its ability to
perform its obligations on the franchise agreement
post-confirmation. HLT is unable to make an intelligent,
informed decision regarding the plan of reorganization because of
this significant lack of information.
HLT Existing Franchise, LLC, is represented by:
Larry E. Kelly
BEARD KULTGEN BROPHY BOSTWICK DICKSON & SQUIRES, LLP
220 South Fourth Street
Waco, Texas 76701
Phone: (254) 776-5500
Fax: (254) 776-3591
E-mail: Kelly@thetexasfirm.com
About Gateway Hotel
Phoenix, Arizona-based Gateway Hotel LLC -- aka Hilton Garden Inn
and Hilton Garden Inn Phoenix Airport North -- is primarily
engaged in the hotel and restaurant business. It filed for
Chapter 11 bankruptcy protection on March 29, 2011 (Bankr. D.
Ariz. Case No. 11-08302). Kyle S. Hirsch, Esq., at Bryan Cave
LLP, serves as the Debtor's bankruptcy counsel. The Debtor
estimated its assets and debts at $10 million to $50 million.
Affiliate Windsor Commercial Construction, LLC, filed a separate
Chapter 11 petition on Oct. 13, 2009 (Bankr. D. Ariz. Case No.
09-25724).
GENERAL MARITIME: Amends 2011 Credit Facilities
-----------------------------------------------
General Maritime Corporation amended its $550 million revolving
credit facility, dated as of May 6, 2011, and its $372 million
senior secured credit facility, dated as of May 6, 2011, each with
Nordea Bank Finland plc and DnB NOR Bank ASA as the lead arrangers
of the facilities, as well as its $200 million credit facility,
dated of May 6, 2011, for which affiliates of Oaktree Capital
Management L.P. acted as lender and administrative agent.
Under the terms of the amended $550 million revolving credit
facility and $372 million senior secured credit facility, the
required minimum balance in cash and cash equivalents and revolver
availability pursuant to each credit facility has been reduced to
$35 million from $50 million from the date hereof through Dec. 31,
2011. Thereafter, the Company will be required to maintain a
minimum of $40 million in cash and cash equivalents and revolver
availability through March 31, 2012. After this date, the
original terms of the credit facilities will apply. The amendment
to the $200 million Oaktree credit facility conforms to the
aforementioned minimum balance requirement with the existing 10%
cushion, that is, $31.5 million from the date hereof through
Dec. 31, 2011, $36 million through March 31, 2012 and $45 million
thereafter. All other material terms of the credit facilities
remain unchanged.
Jeffrey D. Pribor, Chief Financial Officer of General Maritime
Corporation, stated, "Management continues to successfully
increase the Company's financial flexibility. While we remain in
compliance with our covenants, this amendment provides a source of
additional liquidity and serves as a proactive measure that
enhances our ability to operate in a challenging market
environment. We appreciate the ongoing support we have received
from our distinguished lending group. Our strong banking
relationships serve as a core differentiator for our Company and
underscore General Maritime's future prospects and leadership
position. With a large and diverse modern fleet, combined with a
flexible deployment strategy, we remain well positioned to achieve
a level of stability in our results and benefit from future rate
increases."
Full-text copies of the Amended Credit Agreements are available
for free at:
http://is.gd/7zzp8l
http://is.gd/NVQCtd
http://is.gd/yjetLO
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.
GM PINE: Has Until July 29 to File Schedules and Statements
-----------------------------------------------------------
The Honorable Karen A. Overstreet of the Bankruptcy Court for the
Western District of Washington extended until July 29, 2011, GM
Pine Street Garage, LLC's time to file schedules and statement of
financial affairs.
The Debtor requested for an Aug. 8, extension explaining that
until the Debtor and receiver can reach an agreement or an order
is entered for turnover of the assets, it will not be able to
submit an accurate and complete set of schedules.
JSH Properties, Inc. was appointed as the custodial receiver for
the real and personal property that consists of a parking garage
with an address commonly known as 1601 Third Avenue, Seattle,
Washington, and its rents and leases.
About GM Pine Street Garage, LLC
Portland, Oregon-based GM Pine Street Garage, LLC is a sole asset
LLC, with 100% ownership interest in real and personal property
that consists of a parking garage with an address commonly known
as 1601 Third Avenue, Seattle, Washington, and its rents and
leases. The Company filed for Chapter 11 protection (Bankr. W.D.
Wash. Case No. 11-17493) on June 23, 2011. Bankruptcy Judge Karen
A. Overstreet presides over the case. Shelly Crocker, Esq., at
Crocker Law Group PLLC represents the Debtor in its restructuring
effort. The Debtor estimated assets and debts at $10 million to
$50 million.
GM PINE: Wants Receiver Turnover Property for Plan Testing
----------------------------------------------------------
GM Pine Street Garage, LLC, asks the U.S. Bankruptcy Court for the
Western District of Washington to direct JSH Properties Inc., the
receiver, to turn over the property to the bankruptcy estate.
The Debtor is a party to a ground lease with Block 45 LLC for the
real property located at 1601 Third Avenue, Seattle, Washington,
and improvements thereon (the property). The property is
currently used and operated as a parking garage with a ground
floor retail commercial tenants, and is connected to the Macy's
store by a sky bridge.
The Debtor states that its plan of reorganization is anticipated
to be largely based upon the new revenue numbers under Central
Parking's new management, turnover of the property to the Debtor
will function as a testing period, and allow a glimpse into
Central Parking's and the Debtor's projections for income moving
forward, increasing the likelihood of a successful reorganization,
and the maximum return to creditors.
The Debtor notes that Capmark Bank has a security interest in the
property, arising out of a loan agreement to which the Debtor and
the bank are parties.
To secure the performance of the loan, on Sept. 11, 2008, the
Debtor executed in favor of the bank a Deed of Trust, Assignment
of Rents and Leases, Security Agreement and Fixture Filing,
designating these property as collateral: the Debtor's interest in
the Ground Lease; all additional land expressly added to the
Security Instrument; all improvements thereon; all easements; all
fixtures and personal property; all leases and rents; all
condemnation awards; all insurance proceeds; all tax certiorari;
operating agreements; parking covenants; rate cap agreements;
intangibles; accounts; rights to conduct legal actions; proceeds;
and any and all other rights of Debtor in and to the property.
The maturity date of the loan, pursuant to the loan agreement, is
Sept. 11, 2011, with an option to extend the maturity date for one
(1) additional term of 12 months, extending it to Sept. 11, 2012.
The Debtor's default on the loan for nonpayment triggered the
bank's acceleration of the loan, pursuant to which the bank began
a non-judicial foreclosure proceeding on its security interest.
The Bank also declared a default relative to several performance
criteria under the loan agreement, including the income to debt
ratio of the operations of a specific measured period of time. The
Bank demanded a principal pay down of more than $10,000,000 to
rebalance the loan under those performance criteria.
In addition to the commencement of the foreclosure proceeding, on
March 14, 2011, the bank filed a complaint in King County Superior
Court for the State of Washington, seeking appointment of the
receiver, as a custodial receiver to take custody and control of
the property until title passed to the bank in foreclosure.
About GM Pine Street Garage, LLC
Portland, Oregon-based GM Pine Street Garage, LLC is a sole asset
LLC, with 100% ownership interest in real and personal property
that consists of a parking garage with an address commonly known
as 1601 Third Avenue, Seattle, Washington, and its rents and
leases. The Company filed for Chapter 11 protection (Bankr. W.D.
Wash. Case No. 11-17493) on June 23, 2011. Bankruptcy Judge Karen
A. Overstreet presides over the case. Shelly Crocker, Esq., at
Crocker Law Group PLLC represents the Debtor in its restructuring
effort. The Debtor estimated assets and debts at $10 million to
$50 million.
GM PINE: Meeting of Creditors Set for Aug. 9
--------------------------------------------
A meeting of creditors of GM Pine Street Garage, LLC will be held
on Aug. 9, 2011 at 1:00 p.m. The meeting will be held at:
US Courthouse
Room 4107
700 Stewart St,
Seattle, WA 98101
The creditors of GM Pine Street Garage are required to file their
proofs of debt by Oct. 7, 2011,
About GM Pine Street Garage, LLC
Portland, Oregon-based GM Pine Street Garage, LLC is a sole asset
LLC, with 100% ownership interest in real and personal property
that consists of a parking garage with an address commonly known
as 1601 Third Avenue, Seattle, Washington, and its rents and
leases. The Company filed for Chapter 11 protection (Bankr. W.D.
Wash. Case No. 11-17493) on June 23, 2011. Bankruptcy Judge Karen
A. Overstreet presides over the case. Shelly Crocker, Esq., at
Crocker Law Group PLLC represents the Debtor in its restructuring
effort. The Debtor estimated assets and debts at $10 million to
$50 million.
GM PINE: Wants to Use Capmark Cash Collateral to Fund Operations
----------------------------------------------------------------
GM Pine Street Garage LLC asks the U.S. Bankruptcy Court for the
Western District of Washington for an order approving the interim
use of cash collateral of Capmark Bank, a Utah Industrial Bank and
Block 45, LLC, pursuant to a budget; and granting replacement
liens to the Bank.
On Sept. 11, 2008, Debtor and the Bank entered into a commercial
mortgage loan with an original principal amount of $24,850,000.
As of the Petition Date, the Debtor's indebtedness to the Bank is
approximately $24,000,000. The Debtor assigned to the Bank all
rents, leases and other profits arising out of the Property, by
executing an Assignment of Leases and Rents dated Sept. 11, 2008.
The Debtor requires use of cash collateral in order to fund the
operations of its Property; utilities for general operations;
purchasing materials and service costs required in ongoing
necessary repairs of the Property, and paying employee wages,
benefits, and taxes, professional fees, and other similar expenses
associated with the operation of the Property to produce income.
In order to provide "adequate protection," the Debtor proposes to
grant the Bank and the Landlord a security interest and a
continuing replacement lien in and to the Property by Debtor post-
petition to the extent of the value and amount of cash collateral
of the Bank and the Landlord that is actually used by the Debtor,
and of the same quality, extent and nature as the security
interests the Bank had in property belonging to the Debtor
prepetition.
The Debtor will make to the Bank periodic cash payments in the
monthly amount of $120,000. In addition, the Debtor will continue
to make to the Landlord periodic cash payments in the monthly
amount equal to the current lease rate under the Ground Lease.
As further adequate protection, the Debtor will:
a. Provide the Bank, concurrently with filing with the
Bankruptcy Court, copies of Debtor's monthly financial
reports as required by the court and the U.S. Trustee;
b. Continue to maintain insurance on its place of business;
c. Not incur any indebtedness with priority over the liens of
the Bank.
The Debtor will cooperate with the Bank in providing full and
reasonable access to information respecting the Bank's Collateral
and cash collateral, and the Debtor's financial conditions, assets
and liabilities.
About GM Pine Street
GM Pine Street Garage LLC operates a parking garage with ground
floor retail commercial tenants in Seattle, Washington. The
parking garage is connected to the Macy's store in downtown
Seattle by a sky bridge. It filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Wash. Case No. 11-17493) on June 23, 2011.
Shelly Crocker, Esq., at Crocker Law Group PLLC, is the Debtor's
proposed bankruptcy counsel. The Debtor estimated its assets and
debts at $10 million to $50 million.
GRAPHIC PACKAGING: Bank Debt Trades at 1% Off in Secondary Market
-----------------------------------------------------------------
Participations in a syndicated loan under which Graphic Packaging
International, Inc., is a borrower traded in the secondary market
at 99.34 cents-on-the-dollar during the week ended Friday, July
15, 2011, an increase of 0.19 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 May 16, 2014, and carries Moody's Ba2 rating and Standard &
Poor's BBB- rating. The loan is one of the biggest gainers and
losers among 206 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 5, 2011,
Standard & Poor's raised its issue-level ratings and revised its
recovery ratings on Marietta, Ga.-based Graphic Packaging
International Inc.'s (BB-/Positive/--) senior unsecured notes.
"We raised the issue-ratings on the $425 million 9.5% senior
unsecured notes and $250 million 7.875% senior unsecured notes to
'B+' (one notch lower than the corporate credit rating) from 'B'.
We revised the recovery rating on these notes to '5', indicating
our expectations for modest (10% to 30%) recovery in the event of
a payment default, from '6'," S&P noted.
"We affirmed our 'BB+' issue-level rating (two notches higher than
the corporate credit rating) on Graphic Packaging's senior secured
credit facilities. The recovery rating is '1', indicating our
expectation for very high (90% to 100%) recovery in the event of a
default. We affirmed our 'B' issue-level rating (two notches lower
than the corporate credit rating) on the company's remaining $73
million 9.5% subordinated notes. The recovery rating is '6',
indicating our expectations for negligible (0% to 10%) recovery,"
S&P stated.
Headquartered in Marietta, Georgia, Graphic Packaging Corporation
(NYSE:GPK) -- http://www.graphicpackaging.com/-- provides
paperboard packaging solutions for a variety of products to
multinational and other consumer products companies. The company
provides its customers paperboard, cartons and packaging machines,
either as an integrated solution or separately. Its packaging
products are made from a variety of grades of paperboard. GPC
manufactures its packaging products from coated unbleached kraft
paperboard and coated recycled paperboard that it produces at its
mills, and a portion from paperboard purchased from external
sources. The company operates in four geographic areas: the
United States, Central and South America (Brazil), Europe and
Asia-Pacific. GPC conducts its business in two segments,
paperboard packaging and containerboard/other.
On March 14, 2008, Graphic Packaging Holding Company completed its
combination of Graphic Packaging Corporation and Altivity
Packaging LLC. The combination of Graphic Packaging and Altivity
created a company with pro-forma 2007 revenues of over $4.4
billion and pro-forma 2007 adjusted EBITDA of around $553 million.
Headquartered in Carol Stream, Illinois, Altivity Packaging --
http://www.altivity.com- produces various products such as
folding cartons, bag and plastic packaging, and decorative
laminations. Altivity Packaging also provides gift boxes for
department stores and other retail venues, as well contract
packaging services and inks and coatings. The company, which
operates about 60 manufacturing plants across the U.S., serves the
food, medical, and electronic industries, among others. In 2006
Altivity Packaging was established after TPG Capital's purchase of
Smurfit-Stone Container's consumer packaging unit.
GREAT ATLANTIC: SuperFresh Sale No Long Prepayment Event in Loans
-----------------------------------------------------------------
On July 8, 2011, The Great Atlantic & Pacific Tea Company, Inc.,
and certain of its U.S. subsidiaries, each as a borrower, entered
into the First Amendment with the Agent and the Lenders, to amend
the Third Amended and Restated Superpriority Debtor-In-Possession
Credit Agreement, dated as of Jan. 13, 2011, by and among the
Company, its subsidiaries that are borrowers party thereto,
JPMorgan Chase Bank, N.A., as administrative agent and as
collateral agent and the lenders from time to time party thereto.
Pursuant to the terms of the First Amendment, among other things,
any of the dispositions by the Company and its subsidiaries of
their 25 SuperFresh stores as specified therein will not
constitute a prepayment event, and the proceeds of such
dispositions will not be required to be applied to prepayment of
the loans under the DIP Credit Agreement. The First Amendment
also contains some other clarifying changes.
The above summary of material terms of the First Amendment does
not purport to be complete and is subject to, and qualified in its
entirety, by the full text of the First Amendment.
A copy of the First Amendment to Third Amended and Restated
Superpriority Debtor-In-Possession Credit Agreement, dated
Jan. 13, 2011, is available at:
http://bankrupt.com/misc/a&p.firstamendmentto3rdamendedDIP.pdf
As reported in the TCR on Jan 14, 2011, the Debtors obtained final
approval from the U.S. Bankruptcy Court for the Southern District
of New York to enter into a debtor-in-possession credit agreement
with JPMorgan Chase Bank, N.A.
The final order authorized the Debtors to borrow money and obtain
letters of credit pursuant to the DIP Credit Agreement up to an
aggregate principal or face amount of $800 million.
A full-text copy of the final DIP order is available for free
at http://bankrupt.com/misc/A&P_FinalDIPorder.pdf
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a leading supermarket retailer, operating under a
variety of well-known trade names, or "banners" across the mid-
Atlantic and Northeastern United States. It operates 395
supermarkets, combination food and drug stores, beer, wine, and
liquor stores, and limited assortment food stores in Connecticut,
Delaware, Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, Virginia, and the District of Columbia. "Banners"
include A&P (101 stores), Food Basics (12 stores), Pathmark (128
stores), Super Fresh (57 stores), The Food Emporium (16 stores),
and Waldbaum's (59 stores).
A&P employs roughly 41,000 employees, including roughly 28,000
part-time employees. Roughly 95% of the workforce are covered by
collective bargaining agreements.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In
its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
GSC GROUP: Court Approves Togut Segal as Conflicts Counsel
----------------------------------------------------------
The Hon. Arthur J. Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York authorized James L. Garrity, the
Chapter 11 Trustee of GSC Group, Inc., et al., to employ Togut,
Segal & Segal LLP as his conflicts counsel.
The Togut Firm's scope of work will be limited, except as
otherwise provided by further order of this Court, to
representation of the estates with respect to any matters arising
in the cases relating to the Debtors' motion to, inter alia, sell
substantially all of their assets that gave rise to actual
conflicts of interest for Kaye Scholer LLP.
To the best of the Debtors' knowledge, the Togut Firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Tracy Hope Davis, the U.S. Trustee for Region 2, objected to the
trustee's motion because the application, as modified, was over
six months ago and a date that precedes his appointment in the
cases by more than a month.
Further, the nature and extent of any actual conflicts of interest
presented for Kaye Scholer as of Dec. 2, 2010, and thereby
necessitating the Debtors' retention of conflicts counsel, is
unclear based upon a review of the various statements filed by
Kaye Scholer.
About GSC Group
Florham Park, New Jersey-based GSC Group, Inc. --
http://www.gsc.com/-- is a private equity firm specializing in
mezzanine and fund of fund investments. Originally named
Greenwich Street Capital Partners Inc. when it was a subsidiary of
Travelers Group Inc., GSC became independent in 1998 and at one
time had $28 billion of assets under management. Market reverses,
termination of some funds, and withdrawal of customers'
investments reduced funds under management at the time of
bankruptcy to $8.4 billion.
GSC Group filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow,
Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy
counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice
and claims agent. Capstone Advisory Group, LLC, is the Debtor's
financial advisor. The Debtor estimated its assets at $1 million
to $10 million and debts at $100 million to $500 million as of the
Chapter 11 filing.
GSC GROUP: Minority Lenders to Appeal Sale to Black Diamond
-----------------------------------------------------------
Dow Jones' DBR Small Cap reports that the months-long fight over
GSC Group Inc.'s fate will continue as a lender group appeals the
investment-management company's $253.5 million sale to lead lender
Black Diamond Capital Management LLC.
As reported in the Troubled Company Reporter on July 13, 2011,
Black Diamond Capital Management, L.L.C. has secured court
approval to complete the acquisition of substantially all of the
investment management business and related assets of GSC Group,
Inc. and its affiliates.
The sale follows a competitive auction process held in accordance
with Section 363 of the Bankruptcy Code in October 2010, for which
Black Diamond secured final approval at a hearing in the U.S.
Bankruptcy Court for the Southern District of New York held on
July 7, 2011.
About GSC Group
Florham Park, New Jersey-based GSC Group, Inc. --
http://www.gsc.com/-- is a private equity firm specializing in
mezzanine and fund of fund investments. Originally named
Greenwich Street Capital Partners Inc. when it was a subsidiary of
Travelers Group Inc., GSC became independent in 1998 and at one
time had $28 billion of assets under management. Market reverses,
termination of some funds, and withdrawal of customers'
investments reduced funds under management at the time of
bankruptcy to $8.4 billion.
GSC Group filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow,
Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy
counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice
and claims agent. Capstone Advisory Group, LLC, is the Debtor's
financial advisor. The Debtor estimated its assets at $1 million
to $10 million and debts at $100 million to $500 million as of the
Chapter 11 filing.
HAMPTON ROADS: To Sell 7 North Carolina Branches to ECB Bancorp
---------------------------------------------------------------
Hampton Roads Bankshares, Inc., announced that Bank of Hampton
Roads has entered into a definitive agreement with The East
Carolina Bank, the wholly-owned subsidiary of ECB Bancorp, Inc.
Under the Agreement, The East Carolina Bank will purchase all
deposits and selected assets associated with seven Gateway Bank
branches in North Carolina: Preston Corners, Plymouth, Roper,
Chapel Hill, Falls of Neuse, Lake Boone and Wilmington. As of
June 30, 2011, deposits in these branches totaled $195 million.
Under the terms of the agreement, Bank of Hampton Roads expects to
close the Roper branch and consolidate its accounts into the
Plymouth branch prior to the completion of this sale.
John A.B. "Andy" Davies, Jr., the Company's President and Chief
Executive Officer, said, "With the agreement to sell these
branches, we continue to make good progress on our plan to improve
our operating efficiency and profitability by focusing on our
strong community banking franchise in our core markets."
A. Dwight Utz, President and Chief Executive Officer of ECB, said,
"We are delighted to have the opportunity to capitalize on
strategic opportunities such as the purchase of these branches,
which significantly expands the geographic footprint of ECB. We
believe the Raleigh, Chapel Hill and Plymouth markets will provide
strong support for continued organic growth within North Carolina.
We are looking forward to serving the customers and communities in
these new branch markets."
The sale is expected to be completed in the fourth quarter of
2011, subject to regulatory approval and customary closing
conditions. The terms of the transaction were not disclosed.
The Company was advised by Sandler O'Neill & Partners, L.P., on
this transaction. ECB was advised by Janney Montgomery Scott LLC.
A full-text copy of the Purchase and Assumption Agreement is
available for free at http://is.gd/nv4bEC
About ECB Bancorp
ECB Bancorp, Inc., is a bank holding company, headquartered in
Engelhard, North Carolina, whose wholly-owned subsidiary, The East
Carolina Bank, is a state-chartered, independent community bank
insured by the FDIC. The bank provides a full range of financial
services through its 25 offices covering eastern North Carolina
from Currituck to Ocean Isle Beach and Greenville to Hatteras.
The bank also provides mortgages, insurance services through the
bank's licensed agents, and investment and brokerage services
offered through a third-party broker-dealer. The holding
company's common stock is listed on The Nasdaq Global Market under
the symbol "ECBE". More information can be obtained by visiting
ECB's Web site at www.myecb.com
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company said in its Form 10-Q for the Sept. 30, 2010 quarter
that due to its financial results, the substantial uncertainty
throughout the U.S. banking industry, and the Written Agreement
the Company and BOHR have entered into, doubts existed regarding
the Company's ability to continue as a going concern through the
second quarter of 2010. However, management believes this concern
has been mitigated by the initial closing of the Private Placement
that occurred on Sept. 30, 2010.
The Company reported a net loss of $210.35 million on $122.20
million of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $201.45 million on $149.44 million of
total interest income during the prior year.
The Company's balance sheet at March 31, 2011, showed $2.71
billion in total assets, $2.55 billion in total liabilities and
$159.86 million in total shareholders' equity.
HAMPTON ROADS: Ronald Day Resigns as Bank President
---------------------------------------------------
Hampton Roads Bankshares, Inc., announced that Ronald A. Day has
resigned as President of Bank of Hampton Roads and John A.B.
"Andy" Davies, Jr., the Company's President and Chief Executive
Officer, assumed the additional title of President of the Bank.
The combination of these roles, together with selective branch
consolidations, branch sales and other recently announced actions,
is part of the Company's comprehensive plan to return to
profitability.
Davies commented, "Ron made many valuable contributions, both in a
key consultative role during the Company's successful
recapitalization and as President of the Bank, where he created an
organizational structure for all sales, service and operational
areas that will continue to drive efficiency and growth into the
future."
Davies added, "It has been a distinct privilege working with Ron
and he will be missed. Thanks to his efforts and those of our
entire team, we have made significant progress on the Company's
plan to return to profitability. The combination of these roles
is a logical next step in the implementation of that plan."
Day said, "It has been a pleasure to work with the talented group
of banking professionals at Hampton Roads Bankshares. I offer my
best wishes to the Company's employees and shareholders."
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company said in its Form 10-Q for the Sept. 30, 2010 quarter
that due to its financial results, the substantial uncertainty
throughout the U.S. banking industry, and the Written Agreement
the Company and BOHR have entered into, doubts existed regarding
the Company's ability to continue as a going concern through the
second quarter of 2010. However, management believes this concern
has been mitigated by the initial closing of the Private Placement
that occurred on Sept. 30, 2010.
The Company reported a net loss of $210.35 million on $122.20
million of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $201.45 million on $149.44 million of
total interest income during the prior year.
The Company's balance sheet at March 31, 2011, showed $2.71
billion in total assets, $2.55 billion in total liabilities and
$159.86 million in total shareholders' equity.
HARIKRISHNA INVESTMENT: Case Summary & 20 Largest Unsec Creditors
-----------------------------------------------------------------
Debtor: Harikrishna Investment, Inc.
480 S. Redlands Ave.
Perris, CA 92570
Bankruptcy Case No.: 11-32540
Chapter 11 Petition Date: July 12, 2011
Court: United States Bankruptcy Court
Central District of California (Riverside)
Judge: Wayne E. Johnson
Debtor's Counsel: Steven P. Chang, Esq.
LAW OFFICES OF STEVEN P. CHANG
801 S Garfield Ave Suite 338
Alhambra, CA 91801
Tel: (626) 281-1232
E-mail: attorney@spclawoffice.com
Scheduled Assets: $5,500,000
Scheduled Debts: $5,308,498
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/cacb11-32540.pdf
The petition was signed by Mahendra R. Patel, president.
HAWKER BEECHCRAFT: Bank Debt Trades at 18% Off in Secondary Market
------------------------------------------------------------------
Participations in a syndicated loan under which Hawker Beechcraft
is a borrower traded in the secondary market at 82.38 cents-on-
the-dollar during the week ended Friday, July 15, 2011, a drop of
1.47 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 206 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.
The Company's balance sheet at March 31, 2011, showed $3.121
billion in total assets, $3.396 billion in total liabilities, and
deficit of $275.5 million.
Hawker Beechcraft reported a net loss of $304.3 million on $2.80
billion of total sales for 12 months ended Dec. 31, 2010. Net
loss in 2009 and 2008 was $451.3 million and $157.2 million,
respectively.
To reduce the cost of operations, in October 2010, the Company
announced it would implement a cost reduction and productivity
program. The first part of the program consisted of the immediate
termination of approximately 8% of salaried employees while the
second part involves reducing the Company's factory and shop work
forces by approximately 800 employees by end of August 2011.
* * *
Hawker Beechcraft carries 'Caa2' corporate family and probability
of default ratings from Moody's Investors Service.
HAWKER BEECHCRAFT: Bank Debt Trades at 100.10% in Secondary Market
------------------------------------------------------------------
Participations in a syndicated loan under which Hawker Beechcraft
is a borrower traded in the secondary market at 100.10 cents-on-
the-dollar during the week ended Friday, July 15, 2011, a drop of
0.53 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 850 basis points above LIBOR to borrow
under the facility. The bank loan matures on March 26, 2014, and
carries Standard & Poor's CCC+ rating. The loan is one of the
biggest gainers and losers among 206 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.
The Company's balance sheet at March 31, 2011, showed $3.121
billion in total assets, $3.396 billion in total liabilities, and
deficit of $275.5 million.
Hawker Beechcraft reported a net loss of $304.3 million on $2.80
billion of total sales for 12 months ended Dec. 31, 2010. Net
loss in 2009 and 2008 was $451.3 million and $157.2 million,
respectively.
To reduce the cost of operations, in October 2010, the Company
announced it would implement a cost reduction and productivity
program. The first part of the program consisted of the immediate
termination of approximately 8% of salaried employees while the
second part involves reducing the Company's factory and shop work
forces by approximately 800 employees by end of August 2011.
* * *
Hawker Beechcraft carries 'Caa2' corporate family and probability
of default ratings from Moody's Investors Service.
HEALTH MANAGEMENT: Bank Debt Trades at 3% Off in Secondary Market
-----------------------------------------------------------------
Participations in a syndicated loan under which Health Management
Associates, Inc., is a borrower traded in the secondary market at
97.34 cents-on-the-dollar during the week ended Friday, July 15,
2011, an increase of 0.25 percentage points from the previous week
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. The Company pays 175 basis points above
LIBOR to borrow under the facility. The bank loan matures on Feb.
28, 2014, and carries Moody's B1 rating and Standard & Poor's BB-
rating. The loan is one of the biggest gainers and losers among
206 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 3, 2011, Fitch
Ratings has upgraded its ratings for Health Management Associates,
Inc., including the Issuer Default Rating (IDR), to 'BB-' from
'B+'. The Rating Outlook is revised to Stable from Positive. The
ratings apply to approximately $3 billion of debt at Dec. 31,
2010.
Fitch notes that the entire for-profit hospital industry is
currently in acquisition mode due to attractive asset valuations
and the need to deploy excess cash to offset weak organic top-line
trends. Health Management's relatively small size means that it
can create value through incremental, cash flow funded
acquisitions. In contrast, a company the size of HCA or Community
Health Systems would have to execute a large, debt-funded
acquisition to make an impact. While Health Management could
consider a larger transaction in the future, recent activity has
been measured. The largest acquisition in the past 18 months cost
the company about $150 million.
Maintenance of a 'BB-' IDR for Health Management will require
debt-to-EBITDA maintained at or below 4.0x, and a sustained solid
liquidity profile, with FCF sufficient to fund the company's
growth through acquisition strategy. A leveraging acquisition
would be the most likely cause of a negative rating action for
Health Management. A sustained weak organic operating trend for
the hospital industry would also result in pressure on the ratings
if it erodes profitability and financial flexibility over time. A
positive rating action for Health Management is unlikely in the
near term.
Headquartered in Naples, Florida, Health Management Associates,
Inc., owns and operates acute-care hospitals in non-urban
settings. The company provides inpatient services such as general
surgery, and oncology as well as outpatient services such as
laboratory, x-ray and physical therapy services. In addition,
some facilities also offer specialty services such as cardiology,
radiation therapy and MRI scanning. Health Management carries a
'B1' long term corporate and probability of default ratings, with
stable outlook, from Moody's, a 'B+' issuer credit ratings, with
negative outlook, from Standard & Poor's, and a 'B+' long term
issuer default rating, with stable outlook, from Fitch.
HENNIGES AUTOMOTIVE: Moody's Assigns 'B2' CFR, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service assigned ratings to Henniges Automotive
Holdings, Inc. -- Corporate Family Rating at B2, and Probability
of Default Rating at B3. In a related action, Moody's assigned a
B1 rating to Henniges' new senior secured revolving credit
facility and term loan. Proceeds from the term loan will be used
to refinance the company's existing debt, make a shareholder
distribution to the company's equity sponsors, Littlejohn & Co.,
LLC., and add cash to Henniges' balance sheet. The rating outlook
is stable.
These ratings were assigned:
-- Corporate Family Rating, B2;
-- Probability of Default, B3;
-- B1 (LGD2, 23%), for the $20 million senior secured revolving
credit facility;
-- B1 (LGD2, 23%), for the $135 million senior secured term
loan
RATING RATIONALE:
Henniges' B2 Corporate Family Rating incorporates the company's
high leverage, modest size, high customer concentrations, and
regional focus as applied under the automotive parts supplier
methodology. Pro forma for the proposed recapitalization and
shareholder distribution, Henniges' 2010 Debt/ EBITDA is estimated
at 6.1x (including Moody's standard adjustments) and 4.1x
inclusive of certain pro forma adjustments. These ratios include
the company's Chinese 60% owned joint venture which has limited
ability to repatriate cash. The company's 2010 revenue base of
about $541 million is at the low-end of the B rating range and is
further weighted by high customer concentrations, with about two-
thirds of 2010 revenues to the Detroit-3. Henniges' EBIT margin,
in the 3-5% range, is consistent with the assigned rating and over
the intermediate-term should further benefit from the closure of
the Welland, Canada facility, as the company continues its
operational restructuring. The ratings incorporate the expected
costs and operating risks around the closure and relocation of
production out of this facility.
Henniges' CFR benefits from the company's position as a leading
North American manufacturer of sealing systems (about 85% of
revenues) and vibration control products. With about 70% of the
company's revenues generated in North America, Henniges is
expected to benefit from the continued recovery of automotive
industry volumes in 2011, despite some recent softness in
automotive demand.
The stable outlook considers the expectation of continued gradual
improvement in the company's end markets along with the challenges
of closing the Welland facility. Raw material cost pressures
(largely carbon black, EPDM, and other crude oil related
chemicals) also are expected to offset some of the benefits of
improving industry volumes.
Henniges is anticipated to have an adequate liquidity profile over
the next twelve months supported by cash on hand and a $20 million
revolving credit facility. Pro forma for the close of the
transaction, Henniges is expected to have about $24 million of
cash on hand. Moody's anticipates the company to be free cash flow
negative over the near-term as a result of costs related to the
closure of the Welland facility. While unfunded at closing, the
facility have about $3.3MM in letters of credit outstanding and
support seasonal liquidity needs. The financial covenants under
the secured credit facilities are expected to included a minimum
interest coverage test and maximum leverage test. Alternate
liquidity will be limited as the company's domestic assets will
secure the bank credit facilities.
The opportunity for a higher rating or outlook over the
intermediate term will rely on the company's ability to
successfully execute the Welland plant closure. This closure is
expected to require significant costs, reducing effective interest
coverage over the intermediate-term. Moody's will look to the
company's ability to flawlessly execute the plant closure and
transfer manufacturing to other plants, and look for EBIT/interest
expense, inclusive of restructuring charges, to improve to 2.5x.
Future events that have the potential to drive a lower outlook or
rating lower include regional weaknesses in automotive production
or the inability to successfully execute the Welland plant closure
resulting in weaker than expected margins or deterioration in the
company's leverage. A weakening liquidity could also drive a
negative rating action.
The principal methodology used in rating Henniges Automotive
Holdings, Inc. was the Global Automotive Supplier Industry
Methodology published in January 2009. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Henniges Automotive Holdings, Inc., headquartered in Farmington
Hills, MI, is a leading designer and manufacturer of vehicle
sealing systems for doors, windows, trunks, lift gates, sunroofs,
and hoods primarily for the sale to companies in the North
American, European, and Chinese automotive markets. The company
had net sales of approximately $541 million in 2010. The company
had net sales of approximately $541 million in 2010.
HENNIGES AUTOMOTIVE: S&P Assigns Prelim. 'B' Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
corporate credit rating to Farmington Hills, Mich.-based
automotive supplier Henniges Automotive Holdings Inc. The outlook
is stable.
"We also assigned preliminary issue ratings to Henniges' proposed
debt. We assigned our 'B' preliminary issue ratings (with
preliminary '3' recovery ratings) to its proposed $135 million
term loan B and proposed $20 million revolving credit facility,"
S&P said.
"The preliminary 'B' corporate credit rating on Henniges reflects
our view of the company's highly leveraged financial risk
profile," said Standard & Poor's credit analyst Nishit K. Madlani,
"with debt to EBITDA (including our adjustments) that we expect
will be over 5x over the next two years, and its weak business
risk profile that reflects participation in the volatile and
competitive global auto supplier industry." "We assume increased
pressure from raw material prices on profitability and potentially
liquidity. Our ratings incorporate high-single-digit EBITDA
margins in 2011, with a modest improvement in 2012 from savings
through certain restructuring actions currently underway, related
to its facility in Welland, Canada."
HIGH TRUST BANK: Closed; Ameris Bank Assumes All Deposits
---------------------------------------------------------
Ameris Bank of Moultrie, Ga., acquired the banking operations,
including all the deposits, of High Trust Bank in Stockbridge,
Ga., and One Georgia Bank in Atlanta, Ga. The two banks were
closed on Friday, July 15, 2011, by the Georgia Department of
Banking and Finance, which appointed the Federal Deposit Insurance
Corporation as receiver for each institution. To protect
depositors, the FDIC entered into purchase and assumption
agreements with Ameris Bank.
All three branches of the two closed banks will reopen during
their normal business hours as branches of Ameris Bank.
Depositors of the two failed banks automatically will become
depositors of Ameris Bank. Deposits will continue to be insured
by the FDIC, so there is no need for customers to change their
banking relationship in order to retain their deposit insurance
coverage up to applicable limits. High Trust Bank had two
branches, and One Georgia Bank had one branch.
As of March 31, 2011, High Trust Bank had total assets of $192.5
million and total deposits of $189.5 million; and One Georgia Bank
had total assets of $186.3 million and total deposits of $162.1
million. Besides assuming all the deposits from the two Georgia
banks, Ameris Bank will purchase essentially all of their assets.
The FDIC and Ameris Bank entered into loss-share transactions on
the failed banks' assets. The loss-share transaction for High
Trust Bank was $164.8 million, and the loss-share transaction for
One Georgia Bank was $146.3 million. Ameris Bank will share in
the losses on the asset pools covered under the loss-share
agreements. The loss-share transactions are projected to maximize
returns on the assets covered by keeping them in the private
sector. The transactions also are expected to minimize
disruptions for loan customers. For more information on loss
share, please visit:
http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers with questions about the transactions should call the
FDIC toll free: for High Trust Bank customers, 1-866-934-8944 and
for One Georgia Bank customers, 1-877-894-4713. Interested
parties also can visit the FDIC's Web sites: for High Trust Bank,
http://www.fdic.gov/bank/individual/failed/hightrust.html
and for One Georgia Bank,
http://www.fdic.gov/bank/individual/failed/onegeorgia.html
The FDIC estimates that the cost to the Deposit Insurance Fund for
High Trust Bank will be $66.0 million and for One Georgia Bank,
$44.4 million. Compared to other alternatives, Ameris Bank's
acquisition of the two institutions was the least costly option
for the DIF. The closings are the 52nd and 53rd FDIC-insured
institutions to fail in the nation so far this year and the
fifteenth and sixteenth in Georgia. The last FDIC-insured
institution closed in the state was Mountain Heritage Bank,
Clayton, on June 24, 2011.
HILLSIDE VALLEY: Consents Altman Mgt. as Receiver for Property
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
approved a stipulation resolving the motion of secured/judgment
creditor Investor Saving Bank excusing State Court appointed
receiver for Hillside Valley, L.P.'s assets, Altman Management
Company from turnover provisions of Section 543 of the Bankruptcy
Code.
Investors Saving has valid first lien over certain real property
owned by the Debtor.
On Jan. 6, 2011, Investors filed a motion for special relief for
the appointment of receiver in which these facts were alleged,
among other things:
-- that the Debtor has failed to make payments of principal and
interest within 30 days of Oct. 1, 2010, and therefore was
three months in arrears at the time of the motion;
-- Investors had therefore declared the entire unpaid principal
amount due and payable;
-- that the obligations due and owing to Investors exceeded
$15.5 million;
-- that there were mechanics liens and outstanding judgments
against the Debtor;
Pursuant to the stipulation between the Debtor and Investors:
-- the Debtor consents that Altman can continue to serve as
receiver for the its property located at 301-359 River Road,
Allentown, Lehigh County, Pennsylvania with all the rights
and duties assigned to it by the Court of Common lease of
Lehigh County, pursuant to its order dated March 23, 2011;
-- Altman is excused from compliance with subsections (a), (b)
and (c) of Section 543 of the Bankruptcy Code and will
operate the business of the Debtor's property;
-- all required reports will be provided to the Debtor and the
U.S. Trustee.
About Hillside Valley, L.P.
Watchung, New Jersey-based Hillside Valley, L.P. filed for Chapter
11 protection (Bankr. E.D. Penn. Case No. 11-21689) on June 23,
2011. Bankruptcy Judge Richard E. Fehling presides over the case.
Douglas J. Smillie, Esq., at Fitzpatrick Lentz and Bubba P.C.,
represents the Debtor in its restructuring efforts. The Debtor
estimated assets and debts at $10 million to $50 million.
HOLLAND HOME: Fitch Affirms Rating on Revenue Bonds at 'BB+'
------------------------------------------------------------
As part of its ongoing surveillance review process, Fitch Ratings
has affirmed these bonds issued by the Kentwood Economic
Development Corporation (MI) limited obligation revenue bonds on
behalf of Holland Home Obligated Group at 'BB+':
-- $35.0 million series 2006A;
-- $12.6 million series 2006B*.
*The bonds are supported by a direct pay letter of credit issued
by Bank of America which Fitch was not asked to rate.
The Rating Outlook is revised to Stable from Negative.
Rating Rationale:
-- The Outlook change to Stable from Negative reflects the
stability of Holland Home's operating performance over the
last two fiscal years which Fitch believes will be sustained
over the next one to two years.
-- Holland Home has improved operating profitability over the
last two years which has helped to blunt the impact of lower
occupancy in the independent living (ILUs) and assisted
living units (ALUs).
-- Holland Home's moderate debt burden combined with improved
operating profitability has resulted in adequate coverage of
maximum annual debt service (MADS) of 1.35 times (x) in
2010.
-- Holland Home's liquidity indicators are weak with days cash
on hand of 148, cushion ratio of 3.5x and cash to long-term
debt of 24% at March 31, 2011.
-- Holland Home's has $66 million of variable rate bonds
supported by bank letters of credit and bank qualified
direct placements that expire between November 2012 and
March 2013 subjecting the corporation to renewal and
interest rate risk.
Key Rating Drivers:
-- The ability of Holland Home to successfully extend the bank
commitments on its variable rate debt or remarket to a fixed
rate mode without a material increase in its cost of capital
and annual debt service requirements.
-- Sustaining historical operating performance profitability
performance with no deterioration in current liquidity
metrics.
Security:
Bondholders are secured by a pledge of the unrestricted assets of
the obligated group, a first mortgage lien on the property, and a
fully funded debt service reserve fund.
Credit Summary:
The Outlook revision to Stable from Negative reflects Holland
Home's stable operating performance over the last two fiscal years
despite a very difficult operating environment. Fitch believes
management can sustain existing performance despite a service area
that remains challenged. While the reduction in entrance fee
prices is a concern, Holland Home should be able to maintain debt
service coverage consistent with recent results through improved
operating profitability and a higher level of unit sales and
improved ILU occupancy. However, given Holland Home's light
liquidity position, negative variance to recent operating
performance will likely result in a rating downgrade.
The affirmation at 'BB+' is supported by Holland Home's improving
operating profitability, moderate debt burden and adequate debt
service coverage, weak liquidity metrics and capital structure
risk. After posting operating losses of $4.3 million and $4.1
million in 2008 and 2009, respectively, Holland Home narrowed its
loss from operations to $2.3 million. More importantly, net
operating margin (NOM) improved from a negative 0.4% in 2008 to a
positive 0.5% in 2009 and a positive 4.9% in 2010. Although 2010
NOM of 4.9% is weak compared to the 'BBB' category median of 6.8%
Fitch views the improving trend positively.
Holland Home's debt burden is moderate as evidenced by maximum
annual debt service (MADS) being 10.3% of 2010 total revenues as
compared to the 'BBB' category median of 12.8%. Holland Home's
average age of plant is a low 7.8 years. However, coverage of MADS
in 2009 and 2010 was light at 1.21x and 1.35x, respectively,
reflecting the impact of new unit sales offsetting the improved
profitability. However, MADS coverage jumps to 1.9x and 1.7x if
initial entrance fees are included in revenues available. In 2010,
the corporation implemented a reduction in entrance fee prices
(depending on unit) of between 1 - 22% to address the decline in
area housing prices. While the EF collected per unit are lower,
management reported improved sales velocity.
While stable over the last three years, Holland Home's liquidity
indicators remain weak when compared to 'BBB' category medians. At
March 31, 2011, unrestricted cash and investments totaled $24.8
million which translates into 145.2 days cash on hand, a cushion
ratio of 3.5x and cash to debt of 24%; all, of which, trail the
respective 'BBB' medians of 372.7, 6.1x and 48.6%. Fitch believes
Holland Home's capital structure presents an elevated risk factor.
Currently two thirds of Holland Home's long-term debt
(approximately $66.2 million) is supported by bank letters of
credit or bank qualified direct placements which expire between
November 2012 and March 2013. Accordingly, the ability of Holland
Home to successfully renew or remarket each series of bonds
without a material increase in its cost of capital and annual debt
service requirements will be critical in maintaining the current
rating.
Holland Home's swap portfolio consists of eight separate swap
transactions including seven floating to fixed rate swap
agreements with three different counterparties. The floating to
fixed rate swaps are structured as hedges to convert Holland
Home's variable-rate debt to a synthetic fixed-rate obligation.
The total notional value of the swaps is approximately $103.5
million and each of the amortizations on the swaps matches a
specific series of bonds. At April 30th, the negative mark to
market on all the swaps was $9.4 million. Counterparty termination
events include a downgrade of Holland Home below 'BB'.
Holland Home's operates three campuses of multi-level senior
housing in Grand Rapids, MI, providing a total of 723 ILUs and
cottages, 501 assisted living and dementia units, 20 residential
hospice units and 241 nursing beds. Under the Continuing
Disclosure Agreement, Holland Home covenants to provide audited
financial statements and utilization statistics within 180 days of
each fiscal year-end and quarterly interim financial statements
and utilizations within 60 days of each fiscal quarter-end.
Holland Home's disclosure to Fitch has been excellent in terms of
content and timeliness.
HRD CORP: Marcus Oil Files for Ch. 11 after Attachment
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that HRD Corp., doing business as Marcus Oil & Chemical,
sought bankruptcy protection immediately after the winner of an
arbitration award seized a bank account with $1.35 million. The
$20.6 million arbitration award, which HRD disputes, is owed to
Dr. Ebrahim Bagherzadeh.
Houston-based HRD produces polyethylene waxes with high melting
points. The company has an affiliate with a wax refining plant in
India.
HRD filed a Chapter 11 petition (Bankr. S.D. Tex. Case No.
11-36020) on July 12, 2011. Barbara Mincey Rogers, Esq., at
Rogers & Anderson, PLLC, in Houston, serves as counsel to the
Debtor.
In its petition, the Debtor scheduled $6.7 million in assets and
$105 million in liabilities. There is no secured debt. T The
petition says $68 million is owing to Dow Chemical Co. for goods
and services. An affiliate in India is owed $14 million.
IA GLOBAL: CEO Hoekstra's Employment Extended to Sept. 4
--------------------------------------------------------
IA Global, Inc., on June 4, 2011, entered into an Employment
Agreement Extension with Brian Hoekstra, the Company's Chief
Executive Officer, which extends his Employment Agreement dated
Sept. 4, 2009, to Sept. 4, 2011.
On April 28, 2011, the Company announced its entry into, and
substantive terms of, a Separation Agreement with Mark Scott, its
Chief Financial Officer. Mr. Scott tendered his resignation with
an effective date of June 30, 2011. Pursuant to the separation
agreement, the Company may engage Mr. Scott to assist with, among
other things, the preparation and filing of the Company's 2011
Form 10-K.
Additionally, on April 28, 2011, the Company announced its entry
into a Consulting Agreement with Greg LeClaire, a Director of the
Company, and Mr. LeClaire's potential appointment as the Company's
Chief Financial Officer upon Mr. Scott's departure. Mr. LeClaire
has decided not to accept the Chief Financial Officer position at
this time but will continue to provide consulting services to the
Company. Mr. LeClaire will also continue to serve as a Director
of the Company.
About IA Global
San Francisco, Calif.-based IA Global, Inc. (OTCQB: IAGI.OB)
-- http://www.iaglobalinc.com/-- is a global services and
outsourcing company focused on growing existing businesses and
expansion through global mergers and acquisitions. The Company is
utilizing its current partnerships to acquire growth businesses in
target sectors and markets at discounted prices. The Company is
actively engaging in discussions with businesses that would
benefit from our business acumen and marketing expertise,
knowledge of Asian Markets, and technology infrastructure.
The Company's balance sheet at Dec. 31, 2010 showed $21.51 million
in total assets, $19.14 million in total liabilities and $2.37
million in total stockholders' equity.
As reported in the Troubled Company Reporter on July 20, 2010,
Sherb & Co., LLP, in New York, expressed substantial doubt about
the Company's ability to continue as a going concern, following
the Company's results for the fiscal year ended March 31, 2010.
The independent auditors noted that the Company has incurred
significant operating losses, and has a working capital deficit as
of March 31, 2010.
IL LUGANO: Court Authorizes Use of Deutsche Bank's Cash Collateral
------------------------------------------------------------------
The Hon. Alan H. W. Shiff of the U.S. Bankruptcy Court for the
District of Connecticut authorized Il Lugano LLC to use the cash
collateral and grant adequate protection to Deutsche Bank AG, New
York Branch, as agent.
The Debtor related that Deutsche Bank has consented to the
SageCrest Debtors' use of cash collateral for the benefit of Il
Lugano only if DB receives the adequate protection to which it is
entitled under Sections 363 and 361(2) of the Bankruptcy Code for
the diminution in the value of its collateral, if any.
The Court directed Il Lugano to file an appropriate motion for the
entry of an order granting that relief in this Bankruptcy Case.
Pursuant to the order, Il Lugano is authorized to use the cash
collateral of DB.
Solely to the extent that funds advanced postpetition by SC
Finance to Il Lugano are comprised of funds in which DB holds a
security interest, DB is hereby granted a first priority
replacement lien in and on all prepetition assets of Il Lugano and
all postpetition assets of Il Lugano to the extent, if any, of the
diminution in value of the DB cash collateral.
Notwithstanding any other provision of the order, the adequate
protection liens will not prime or have priority over any lien or
security interest in the Debtor's assets which arises by operation
of law in favor of any local, state or federal taxing authority
unless the adequate protection liens would have such priority
under applicable nonbankruptcy law.
About Il Lugano
Il Lugano LLC's main asset is a four-star, boutique-styled, luxury
condominium and hotel property located in Ft. Lauderdale,
Florida.
Il Lugano filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case
No. 08-50811) on Aug. 29, 2008, Judge Alan H.W. Shiff presiding.
Douglas J. Buncher, Esq. -- dbuncher@neliganlaw.com-- at Neligan
Foley LLP in Dallas, Texas, and James Berman, Esq. --
jberman@zeislaw.com-- at Zeisler and Zeisler in Bridgeport,
Connecticut, serve as the Debtor's bankruptcy counsel. When the
Debtor filed for protection from its creditors, it estimated
assets between $50 million and $100 million and debts between
$1 million and $10 million.
IL Lugano filed for bankruptcy to prevent any adverse judgment and
subsequent enforcement actions against IL Lugano in a lawsuit
filed by EPI NCL, LLLC, in the Circuit Court of the 17th Judicial
Circuit of Broward County, Florida, which was set for trial on
September 2, 2008, and to allow adequate time for completion of
the restaurant and sale of the property.
SageCrest II is also in chapter 11 proceedings (Bankr. D. Conn.
Case No. 08-50754) before the Connecticut Bankruptcy Court.
IMG WORLDWIDE: S&P Affirms Corporate Credit Rating at 'B'
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue-level
rating to IMG Worldwide Inc.'s (a subsidiary of IMG Worldwide
Holdings Inc.) $350 million senior secured credit facilities due
2016. "We also assigned this debt a recovery rating of '2',
indicating our expectation of substantial (70% to 90%) recovery
for lenders in the event of a payment default. The facilities will
consist of a $50 million revolving credit facility due 2015 and a
$300 million term loan due 2016. The company used the proceeds
from the transaction to refinance its former credit facilities,"
S&P said.
"We also affirmed our 'B' corporate credit rating on parent
company IMG Worldwide Holdings Inc. (IMG). Our rating outlook is
stable," S&P related.
"Our corporate rating on New York City-based IMG reflects the
company's high debt leverage, aggressive financial policy,
acquisitive growth strategy, and volatility in operating
performance given the company's underlying reliance on corporate
marketing spend and sponsorship contract renewals, which are
sensitive to the changes in the economic cycle," said Standard &
Poor's credit analyst Michael Halchak. These factors are tempered
by the company's leading market position as a sports,
entertainment, and media company, its strong level of client
diversification, and its long-standing relationships with
athletes, corporate sponsors, media broadcasting firms, and
sanctioned sporting events.
"The rating incorporates our expectation for moderately positive
EBITDA growth in 2011 largely attributable to the acquisition of
ISP Sports and organic growth in the college segment, as well as
benefits from continued cost improvements in the overall business.
In October 2010, the company completed the acquisition of ISP
Sports, a collegiate media rights firm which manages 50
universities under long-term contracts. In our view this business
will complement IMG's college sports business and will drive
future growth of the organization given the strong demographic
profile of college sports fans. We expect modest organic growth in
the sports and entertainment and media businesses in 2011 as the
company benefits from a somewhat improved economic environment,"
S&P added.
INFUSION BRANDS: Inks $3 Million Securities Purchase Agreement
--------------------------------------------------------------
Infusion Brands International, Inc., filed with the Securities and
Exchange Commission a Current Report on Form 8-K, with respect to
oral agreements between the Company and a certain accredited
investor whereby the Company agreed to sell to the Investor an
aggregate of 3,000,000 shares of its Series G Convertible
Preferred Stock and Series G Warrants to purchase an additional
30,000,000 shares of the Company's common stock with an exercise
price of $0.10 per share for an aggregate purchase price of
$3,000,000. The securities issuable were to be issued to the
Investor upon the execution of transaction documents and upon the
amending of the certificate of designation of the Series G
Convertible Preferred Stock.
On July 8, 2011, the Company entered into a securities purchase
agreement with the Investor pursuant to which the Investor
purchased 3,000,000 shares of the Company's Series G Convertible
Preferred Stock and a warrant to purchase 30,000,000 shares of the
Company's common stock at a per share exercise price of $0.10 for
an aggregate purchase price value of $3,000,000, which was
previously paid and disclosed in the Prior Current Reports.
The Company filed an amendment to the certificate of designation
of the Preferred Stock in order to increase the number of shares
of preferred stock designated as "Series G Convertible Preferred
Stock" to 8,000,000 shares.
The Warrant is exercisable for a term of ten years at an exercise
price of $0.10 per share.
On July 12, 2011, Robert DeCecco III, the Company's current
President and Chief Executive Officer, resigned from his positions
as Chief Financial Officer and Secretary. Mr. DeCecco remains the
Company's President, Chief Executive Officer and director.
On July 12, 2011, the Board of Directors of the Company approved
the appointment of Mary B. Mather as Chief Financial Officer and
Secretary of the Company. Ms. Mather has served as the Company's
VP of Finance since December 2010. Ms. Mather, held the position
of Associate with Kenneth Jarvis LLC, from August 2010 to November
2010. Prior to that, from 2006-2009, she was Chief Financial
Officer of City Lights Productions, Inc., a television, film and
post production company in New York that created and produced the
HGTV series "Don't Sweat It", the Food Network series "Chopped"
and the movie "The Ten". Prior to that she held the position of
Chief Financial Officer for Howard Schwartz Recording, Inc. Prior
to that she was Treasurer for Hanseatic Corporation, a private
equity company that takes an active role on the boards of its
portfolio companies until these companies have reached the size
and maturity necessary to be accepted by the public market. Prior
to that, Ms. Mather spent thirteen years in public accounting with
Moore Stephens CPAs in New York and Houston and Deloitte & Touche
in Houston. Ms. Mather is a CPA licensed in Texas and New York
and holds a BBA in Accounting from University of Texas at Austin
and an MBA from Columbia Business School in New York.
About Infusion Brands
Infusion Brands International, Inc. is a global consumer products
company. Its wholly owned operating subsidiary, Infusion Brands,
Inc. specializes in building and marketing profitable brands
through international direct-to-consumer channels of distribution.
On Dec. 16, 2010, as part of its quasi-reorganization in order to
change its business model from that of an acquisition strategy to
a singular operating model as a consumer products company which
builds and markets brands internationally through direct-to-
consumers channels of distribution, OmniReliant Holdings, Inc.
entered into an agreement and plan of merger with Infusion Brands
International, Inc., a Nevada corporation and the Company's
wholly-owned subsidiary. Pursuant to the terms and subject to the
conditions set forth in the Merger Agreement, the Company merged
with and into Infusion Brands International, Inc., solely to
effect a name change of the Company.
As reported by the TCR on April 7, 2011, Meeks International LLC,
in Tampa, Florida, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant recurring losses
from operations and is dependent on outside sources of financing
for continuation of its operations and management is restructuring
and redirecting its operating initiatives that require the use its
available capital resource.
The Company's balance sheet at March 31, 2011, showed $5.80
million in total assets, $4.28 million in total liabilities, $5.73
million in redeemable preferred stock and a $4.21 million total
deficit.
INMAR INC: Moody's Assigns 'B1' CFR, Outlook Stable
---------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating, a
B2 Probability of Default Rating and a B1 rating to the proposed
$240 million senior secured credit facility of Inmar, Inc. The
proceeds from a proposed $210 million term loan and a portion of
the cash on hand are expected to be used to refinance Inmar's
existing indebtedness, pay a $57.5 million dividend to the
shareholders and pay transaction fees and expenses. The rating
outlook is stable.
Moody's assigned these ratings (assessments):
-- $210 million senior secured term loan B due 2017, B1
(LGD 3, 32%)
-- $30 million senior secured revolving facility expiring 2016,
B1 (LGD 3, 32%)
-- Corporate Family Rating, B1
-- Probability of Default Rating, B2
RATINGS RATIONALE
The B1 Corporate Family Rating reflects significant pro forma
financial leverage (4.9 times debt to EBITDA reflecting Moody's
adjustments), a relatively small revenue base, pricing risks on
contract renewals and declining grocery and non-pharmaceutical
drug store return volumes. The ratings are supported by the
company's solid market positions in the coupon processing and
reverse logistics market niches, the recurring nature of
contracted revenues and steady financial performance during the
recent economic downturn. Revenue growth over the medium term will
be driven by Inmar's solid momentum in the pharmaceutical returns
processing market and its substantial investments in product line
extensions, such as retail pharmacy receivables outsourcing,
recall processing, and other software and consulting products.
The stable outlook reflects Moody's expectation for a modest
improvement in financial metrics over the next year. Modest
revenue growth will be driven by new clients and improving volumes
in newer market segments. Gains in these areas will be partially
offset by modestly lower coupon volumes and pricing and further
declines in return volumes in the grocery and non-pharmaceutical
drug store channels.
The ratings could be pressured by a sustained decline in revenues
or EBITDA caused by an inability to renew key contracts or
significant declines in coupon or reverse logistics volumes.
Specifically, if Moody's come to expect debt to EBITDA or free
cash flow to debt to be sustained above 5 times and below 5%,
respectively, a downgrade is possible.
The ratings could be upgraded if the company substantially
increases its scale, demonstrates significant top line growth and
improving credit metrics such that Moody's comes to expect debt to
EBITDA and free cash flow to debt to be sustained at about 3 times
and 12%, respectively.
For further details, refer to Moody's Credit Opinion for Inmar on
Moodys.com.
The principal methodology used in rating Inmar was the Global
Business & Consumer Service Industry Methodology, published
October 2010. Other methodologies used include Loss Given Default
for Speculative Grade Issuers in the US, Canada, and EMEA,
published June 2009.
Inmar, headquartered in Winston-Salem, North Carolina, is a
significant provider of promotion and reverse logistics services
in North America. The company is controlled by the private equity
sponsor, New Mountain Capital, LLC.
INSIGHT GLOBAL: S&P Affirms CCR at 'B+'; Outlook Stable
-------------------------------------------------------
Standard & Poor's Ratings Services assigned ratings to Atlanta,
Ga.-based Insight Global Inc.'s amended $177 million senior
secured credit facilities. "We assigned the loans an issue-level
rating of 'B+' (at the same level as our 'B+' corporate credit
rating on the company) with a recovery rating of '4', indicating
our expectation of average (30% to 50%) recovery for lenders in
the event of a payment default. The senior secured facilities
consist of a $20 million revolving credit facility due 2016 and a
$157 million term loan B due 2017," S&P related.
"We expect proceeds to be used to refinance Insight Global's
existing senior credit facilities and subordinated notes," S&P
said.
"We also affirmed our 'B+' corporate credit rating on Insight
Global. The rating outlook is stable," S&P said.
The 'B+' corporate credit rating on Insight Global reflects
Standard & Poor's expectation that revenues will increase at
roughly a low-30% rate in 2011 thanks to strong growth of the IT
staffing market and some market share gains. "We expect that
EBITDA will also increase at roughly a low-30% rate in 2011 as
revenue growth is offset by modest office expansion costs. We
expect the company to maintain debt leverage (adjusted for
operating leases, management fees, and the company's long-term
incentive plan) between 3.0x and 4.5x over the course of the
business cycle," S&P stated.
Insight Global provides IT services to Fortune 1000 companies
through 26 regional offices in major metropolitan markets.
Revenues from the technology, media, and telecommunications
sectors account for almost two-thirds of the company's sales
(subjecting the company to certain secular and cyclical
trends in those industries), and the top 10 customers account for
about one-third of sales. Engagements are generally short term and
nonexclusive per industry practice, and industry consolidation
could result in reduced volume from some large clients. Pricing
pressures exist due to the competitive nature of the industry.
Also, the company faces intense competition from the IT divisions
of well-capitalized general staffing firms, which are trying to
cross-sell IT personnel services to their existing client base.
In the five months ended May 31, 2011, revenue and EBITDA grew
46%. "This was well above our expectations for the company," said
Standard & Poor's credit analyst Hal Diamond. Growth was
attributable to the strong rebound in the IT staffing market as
well as market share gains.
The company plans to continue its organic growth by increasing its
office count by roughly 50% over the next four years, and by
entering large and more competitive major metropolitan markets.
"This, in our view, could pressure profitability," said Mr.
Diamond.
"The stable outlook reflects our expectation that revenue and
EBITDA will grow at a low-30% rate in 2011 and that leverage will
continue to decline, while the company maintains adequate
liquidity," S&P stated.
INTEGRATED FREIGHT: Incurs $7.76 Million Net Loss in Fiscal 2011
----------------------------------------------------------------
Integrated Freight Corporation filed with the U.S. Securities and
Exchange Commission its Annual Report on Form 10-K reporting a net
loss of $7.76 million on $18.82 million of revenue for the fiscal
year ended March 31, 2011, compared with a net loss of $3.14
million on $17.33 million of revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed
$7.81 million in total assets, $13.89 million in total liabilities
and a $6.08 million total stockholders' deficit.
Sherb & Co., LLP, in Boca Raton, Florida, 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 and has a negative working capital position and a
stockholders' deficit.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/L4akyX
About Integrated Freight
Integrated Freight Corporation, formerly PlanGraphics, Inc., (OTC
BB: IFCR) -- http://www.integrated-freight.com/-- is a Sarasota,
Florida headquartered motor freight company providing long-haul,
regional and local service to its customers. The Company
specializes in dry freight, refrigerated freight and haz-waste
truckload services, operating primarily in well-established
traffic lanes in the upper mid-West, Texas, California and the
Atlantic seaboard. IFCR was formed for the purpose of acquiring
and consolidating operating motor freight companies.
On Aug. 19, 2010, at a special stockholders' meeting the Company
approved a reverse stock split, a relocation of its State of
Incorporation to Florida and a change of its name to Integrated
Freight Corporation. The Company's name change and State of
Incorporation have been approved and are effective as of
Aug. 18, 2010. The reverse stock split has been approved but is
not effective as of the date of this filing.
INTERNATIONAL MARINE: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: International Marine Fuels Group, Inc.
dba San Francisco Petroleum
dba Alliance Fleet Services
2121 Third St
San Francisco, CA 94107
Bankruptcy Case No.: 11-32578
Chapter 11 Petition Date: July 12, 2011
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Judge: Dennis Montali
Debtor's Counsel: Robert A. Falche, Esq.
LAW OFFICES OF ROBERT A. FALCHE
2121 Third St.
San Francisco, CA 94107
Tel: (415) 621-5226
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 Robert A. Falche, president.
ISAACSON STRUCTURAL: U.S. Trustee Opposes Working Capital Loan
--------------------------------------------------------------
William K. Harrington, U.S. Trustee for Region 1, asks the U.S.
Bankruptcy Court for the District of New Hampshire to deny
Isaacson Structural Steel, Inc.'s request to enter into working
capital financing arrangement with Cate Street Capital, Inc.
As reported in the Troubled Company Reporter on Jul 14, 2011, The
Debtor sought Bankruptcy Court approval of up to $500,000 in
bridge financing with Cate Street for working capital. The loan
will bear interest at the rate of 5.25%, and will mature Sept. 30,
2011. The Debtor needs the money to fund operations while its so-
called Liberty Mutual/Turner and Middletown School/MasterCraft
contracts come on line. The Debtor intends to assume those
contracts, which have a total contract price in excess of
$24 million.
The Debtor said without the financing, it will have to suspend its
business operations and furlough or lay off employees.
The U.S. Trustee explains that the Debtor has not met its burden
under Section 364 of the Bankruptcy Code of demonstrating that the
terms of the proposed financing are fair, reasonable or in the
best interests of its creditors and bankruptcy estate.
According to the U.S. Trustee, loan agreement provides for, among
other things:
-- grant Cate Street an inordinate amount of control over the
Debtor's operations, impeding the Debtor's exercise of its
fiduciary duties; and
-- the Debtor would be required to open a new bank account with
its senior lender, Passumpsic Bank, and to maintain the
account for the purposes of receiving draws under the note,
receiving payments related to the collateral, and receiving
loan proceeds.
The U.S Trustee objects to the Debtor maintaining an account with
Passumpsic Bank, or any other bank that is not a U.S. Trustee
approved depository, especially where the anticipated proceeds of
the loan exceed the current limits of FDIC insurance.
Passumpsic Savings Bank, purportedly holds claims against the
Debtor totaling roughly $13 million.
Section 345(b) of the Bankruptcy Code provides that if the
aggregate amount of funds on deposit for a particular estate
exceeds that which is insured or guaranteed by the United States
or by a department, agency, or instrumentality of the United
States, or backed by the full faith and credit of the United
States, the funds will be deposited in a banking institution that
has posted either a bond in favor of the United States or has
deposited securities with the Federal Reserve Bank in an account
maintained by the United States Trustee.
The U.S. Trustee is represented by:
Ann Marie Dirsa, Esq.
Office of the United States Trustee
1000 Elm Street, Suite 605
Manchester, NH 03101
Tel: (603) 666-7908
About Isaacson Structural Steel
Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc.,
filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416)
on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over
the case. William S. Gannon PLLC serves as the Debtor's counsel.
Isaacson Structural Steel estimated both assets and debts of
$10 million to $50 million. The petition was signed by Arnold P.
Hanson, Jr., president.
An official committee of unsecured creditors has been appointed in
Isaacson Structural Steel's case.
A bankruptcy petition was also filed for Isaacson Steel, Inc.
(Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating
assets and debts of $1 million to $10 million. The petition was
signed by Arnold P. Hanson, Jr., president. William S. Gannon,
Esq., also represents Isaacson Steel.
KIEBLER RECREATION: Trustee Proposes Asset Sale Bid Procedures
--------------------------------------------------------------
David Simon, Esq., as trustee for Kiebler Recreation, LLC, seeks
bankruptcy court approval of uniform bidding procedures in
relation to the sale of substantially all of the Debtor's assets.
The Debtor's assets include a hotel resort and related amenities,
and the so-called Ridgeview Condominiums and Fairways
Condominiums.
Bids and deposits are to be submitted by Qualified Bidder before
Aug. 5, 2011. Each Top Qualified Bidder may file its final and
best offer under seal before Aug. 24. The Trustee and Huntington
National Bank will select the successful bidder on Aug. 26.
At its sole discretion, the Trustee may conduct an auction among
the Top Qualified Bidders, to occur on Aug. 29.
The Successful Bidder must close on the sale no later than
Sept. 27, 2011.
Huntington will be paid of its allowed claim at the closing of any
sale of the Property. Huntington filed a $16.9 million secured
claim as of the Petition Date, which with continued postpetition
interest and expenses now exceeds $18 million. The claim is
secured by a first priority lien on the Debtor's Resort for
$13.3 million and a first priority lien on the Ridgeview
Condominiums for $3.6 million.
Huntington agrees to provide a carveout provided that the
remainder of the net purchase price is paid directly to Huntington
until the Allowed Claim is satisfied:
Carve-Out for Prepetition, Carve-Out for Ch. 11
Net Purchase Non-Priority Unsecured Admin. Expenses
Price Creditors
------------ -------------------------- --------------------
$0-$9.99MM $0 $1,150,000
$10-11.99MM $0 $1,175,000
$12-13.99MM $125,000 $1,175,000
$14-17MM $275,000 $1,175,000
Huntington is permitted the right to credit bid on the Property up
to an amount, which represents (i) the Allowed Claim plus (ii) the
unpaid amount of the DIP Loan, if any.
Any purchaser of the Property will be required to assume related
equipment leases or purchase the related equipment.
The Court is set to convene a hearing on July 26, 2011, to
consider the Chapter 11 Trustee's request.
Stipulation on Sale Terms
Before the Chapter 11 Trustee filed its Bid Procedures Motion, it
entered into a stipulation with the Debtor, the Official Committee
of Unsecured Creditors and their professionals, which essentially
sets the terms of the sale process.
The Stipulation allows the Trustee to engage in a marketing and
sale strategy and provide for payment for him and his
professionals.
The stipulating parties further agree, among other things, that:
-- Huntington may provide the Debtor with financing;
-- Barry Lefkowitz assumes that position of restructuring
officer to assist the Trustee;
-- Jones Lang Lasalle America, Inc. and Alpine Realty Capital,
LLC are retained to co-market the Debtor's assets
$1 million; and
-- Huntington holds a $16 million claim against the Debtor,
with collection costs totaling more than $1 million, which
allowed claim will be paid at the closing of any sale of the
Debtor's assets.
About Kiebler Recreation
Peek'n Peak Resort -- http://www.pknpk.com/-- is a recreational
and leisure facility.
Findley Lake, New York-based Kiebler Recreation, LLC, dba Peek'n
Peak Resort, filed for Chapter 11 bankruptcy protection (Bankr.
N.D. Ohio Case No. 10-15099) on May 26, 2010. Robert C. Folland,
Esq., at Thompson Hine LLP, has withdrawn as counsel to the
Debtor. The Company estimated assets and debts at $10 million to
$50 million as of the Petition Date.
David O. Simon was appointed by the U.S. Trustee as acting
bankruptcy trustee to the Debtor on June 8, 2011. Kohrman,
Jackson & Krantz P.L.L. serves as counsel to the Trustee. The
Trustee tapped Jones Lang LaSalle Americas, Inc., as investment
banker/business broker to market the Debtor's assets.
An affiliate, Kiebler Slippery Rock, LLC, filed a separate Chapter
11 petition on September 25, 2009 (Bankr. N.D. Ohio Case No. 09-
19087).
KNOLLWOOD PROPERTIES: Case Summary & Largest Unsecured Creditor
---------------------------------------------------------------
Debtor: Knollwood Properties II, LLC
67 Mill Street
Rhinebeck, NY 12572
Bankruptcy Case No.: 11-36998
Chapter 11 Petition Date: July 13, 2011
Court: U.S. Bankruptcy Court
Southern District of New York (Poughkeepsie)
Judge: Judge Cecelia G. Morris
Debtor's Counsel: Thomas Genova, Esq.
GENOVA & MALIN
Hampton Business Center
1136 Route 9
Wappingers Falls, NY 12590-4332
Tel: (845) 298-1600
Fax: (845) 298-1265
E-mail: genmallaw@optonline.net
Scheduled Assets: $2,195,610
Scheduled Debts: $2,663,673
The list of unsecured creditors filed together with its petition
contains only one entry:
The petition was signed by Frank Stortini, member.
Entity Nature of Claim Claim Amount
------ --------------- ------------
Mark Graminski -- $15,000
13 Elm Street
Red Hook, New York 12571
KRATOS DEFENSE: S&P Retains 'B+' Corporate Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services said its ratings and outlook on
Kratos Defense & Security Solutions Inc., including the 'B+'
corporate credit rating as well as the 'B+' issue-level rating on
the senior secured notes are not affected by the company's revised
$115 million add-on to existing notes from the originally planned
$80 million, used to acquire Integral Systems Inc. (not rated).
The recovery rating of '4' remains unchanged and indicates
expectation of average recovery (30% to 50%) in a payment default
scenario. Kratos had originally planned to draw $25 million on its
new $60 million asset-based loan (ABL) facility, but will now have
full availability under the ABL at close. "We continue to expect
pro forma 2011 debt to EBITDA (assuming this acquisition, as well
as the recently completed Herley Industries Inc. acquisition, were
completed at the beginning of the year) of around 5x, as the total
debt issuance amount increased only slightly ($10 million) from
the original plan," S&P related.
Ratings List
Kratos Defense & Security Solutions Inc.
Corporate credit rating B+/Stable
Senior Secured B+
Recovery Rating 4
KRATOS DEFENSE: S&P Affirms Corporate Credit Rating at 'B+'
-----------------------------------------------------------
Standard & Poor's Rating Services affirmed its ratings, including
the 'B+' corporate credit rating, on San Diego, Calif.-based
defense contractor Kratos Defense & Security Solutions Inc.
(Kratos). "At the same time, we affirmed our 'B+' issue-level
rating on Kratos' $590 million senior secured notes due 2017 and
revised the recovery rating on the notes to '4' from '3',
indicating our expectation of an average recovery (30%-50%) in a
payment default scenario, following the add-on of $80 million to
the issuance combined with a new $60 million ABL facility," S&P
related.
"The ratings on Kratos reflect the company's weak credit
protection measures arising from high debt leverage, modest size
compared with some competitors, exposure to possible changes in
U.S. defense spending priorities, and a fairly active acquisition
program. High levels of defense spending, well-funded programs,
and customer diversity offset these factors," said Standard &
Poor's credit analyst Christopher DeNicolo. "We assess the
company's business risk profile as weak and its financial risk
profile as aggressive."
In May 2011, Kratos announced its planned acquisition of Integral
Systems Inc. for about $270 million (plus fees and expenses)--
approximately the same size as Kratos' February 2011 acquisition
of Herley Industries Inc., by far its largest to date (funded
largely with debt). The current acquisition will be financed with
approximately $145 million of Kratos stock, proceeds from a $80
million add-on to its senior secured notes, and $25 million from a
new $60 million ABL revolver, as well as cash on hand. "We expect
pro forma debt to EBITDA of around 5x (we assumed for purposes of
our analysis this, as well as the Herley, acquisition were
completed at the beginning of 2011), similar to our previous
expectations, due to the large equity component of the
transaction," S&P stated.
The outlook is stable. "We believe Kratos' credit protection
measures, pro forma for the two recent acquisitions, should remain
average for the ratings, with some modest improvement likely as
earnings increase," Mr. DeNicolo continued. "We also believe
demand for Kratos' products and services are likely to remain good
over the next few years despite slowing growth in the U.S. defense
budget."
"We could lower the ratings if further debt-financed acquisitions
result in debt to EBITDA above 5.5x and funds from operations
(FFO) to total debt below 10% on a sustained basis. Although
unlikely, we could raise the ratings if debt to EBITDA stays below
3.5x and FFO to total debt remains above 20%," S&P added.
KRONOS INTERNATIONAL: Moody's Raises Corp. Family Rating to 'B1'
----------------------------------------------------------------
Moody's Investors Service raised Kronos International, Inc.'s
Corporate Family Rating to B1 from B2 and upgraded the rating on
the company's senior secured notes due 2013 to B2 (LGD5, 75%) from
B3 (LGD5, 72%). The upgrade reflects KII's strong operating
results, the currently favorable TiO2 market and the expectation
that the company will continue to enjoy strong margins, despite
ore cost increases, as further TiO2 price increases are
implemented.
The outlook remains positive.
This summarizes the ratings changes:
Kronos International Inc.
Ratings upgraded:
Corporate family rating -- B1 from B2
Probability of default rating -- B1 from B2
6.5% Sr Sec Notes due 2013 -- B2 (LGD5, 75%) from B3 (LGD5, 72%)
Outlook: Positive
RATINGS RATIONALE
KII's B1 CFR reflects improved operating performance and credit
metrics, and Moody's expectation that the currently favorable TiO2
industry conditions will continue to support strong free cash flow
generation. Inventory destocking and permanent plant closures that
reduced worldwide TiO2 production capacity during the economic
downturn in 2008-2009 have contributed to the current tight
supply-demand dynamic that has producers consistently operating at
rates around 95% and enjoying significant pricing power. KII
reported year-over-year price increases of 35% though the March
2011 quarter and further increases have been implemented for 2011.
The industry is enjoying the greatest levels of profitability
since the early 1990s and could continue to do so, even as ore
prices increase. Kronos' sales volumes are exceeding pre-crisis
levels as its end markets continue to recover, although rebounds
in the US real estate and construction markets have been
lackluster. In March 2011, Kronos redeemed EUR80 million principal
amount of its notes, financing the redemption with revolver
borrowings, which it is expected to repay with free cash flow in
2011.
KII's liquidity is supported by its positive cash flow from
operations, cash balances, and availability under its ?80 million
revolving credit. In May 2011, the company extended the maturity
of its revolver to October 2013.
The positive outlook assumes that the TiO2 market will continue to
support high operating rates, KII will achieve further price
increases, and generate positive free cash flow over the next
twelve months. An upgrade could be considered if KII were to
maintain its margins (despite titanium ore price increases), good
liquidity and strong positive free cash flow.
The principal methodology used in rating Kronos International was
the Global Chemical Industry Methodology published in December
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Kronos International, Inc. produces and markets TiO2 pigments in
Europe, and is a wholly owned subsidiary of Kronos Worldwide,
Inc., headquartered in Dallas, Texas. For the twelve months ended
March 31, 2011, the company reported sales of $1.1 billion.
LAX ROYAL: Has Until Aug. 17 on Lease-Related Decision
------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
extended the period within which Lax Royal Airport Center LP can
assume or reject unexpired leases and executory contracts until
Aug. 17, 2011.
About LAX Royal Airport Center, LP
Los Angeles, California-based LAX Royal Airport Center, LP, filed
for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No.
11-12333) on Jan. 19, 2011. The Debtor estimated assets at
$10 million to $50 million and debts at $1 million to $10 million.
No request for the appointment of a trustee or examiner was made.
LEE ENTERPRISES: St. Louis Post-Dispatch Sweetens Refinancing
-------------------------------------------------------------
Lee Enterprises Inc., the owner of the St. Louis Post-Dispatch and
52 other daily newspapers, is offering lenders stock and higher
interest rates as enticement to refinance and avoid bankruptcy,
Bill Rochelle, the bankruptcy columnist for Bloomberg News
reports, citing four people familiar with the matter. If not
enough lenders accept the proposal, it would be carried out
through a prepackaged Chapter 11 filing, the people said.
According to the report, Lee is facing the maturity of about
$1 billion in term loans and revolving credit in April 2012. A
bid to sell high-yield debt in May failed. Lenders involved in
the talks include Monarch Alternative Capital LP and Goldman Sachs
Group Inc.
About Lee Enterprises
Based in Davenport, Iowa, Lee Enterprises, Incorporated --
http://www.lee.net/-- is a premier provider of local news,
information and advertising in primarily midsize markets, with 49
daily newspapers and a joint interest in four others, rapidly
growing online sites and more than 300 weekly newspapers and
specialty publications in 23 states. Lee's newspapers have
circulation of 1.5 million daily and 1.8 million Sunday, reaching
four million readers daily. Lee stock is traded on the New York
Stock Exchange under the symbol LEE.
The Company's balance sheet at March 27, 2011, showed $1.40
billion in total assets, $1.32 billion in total liabilities, and
$77.65 million in total equity.
* * *
As reported by the Troubled Company Reporter on April 14, 2011,
Standard & Poor's Ratings Services Lee Enterprises its preliminary
'B' corporate credit rating. S&P also said, "At the same time, we
assigned our preliminary 'B' rating (the same as the corporate
credit rating) to the company's offering of $675 million first-
priority lien senior secured notes due 2017 with a preliminary
recovery rating of '3', indicating our expectation of meaningful
(50%-70%) recovery for lenders in the event of a payment default.
We also rated the company's second-priority lien senior secured
notes due 2018 a preliminary 'CCC+', with a preliminary recovery
rating of '6', indicating negligible (0%-10%) recovery for
lenders."
The TCR on April 13, 2011, said Moody's Investors Service assigned
first time ratings to Lee Enterprises, including a Caa1 Corporate
Family Rating (CFR), Caa1 Probability of Default Rating (PDR) and
SGL-3 speculative-grade liquidity rating. Moody's also assigned a
B1 rating to the company's proposed $50 million 5-year senior
secured first-lien first-out revolver, a B3 rating to its proposed
$675 million senior secured first-lien notes maturing 2017, and a
Caa2 rating to its proposed $375 million senior secured second-
lien notes maturing 2018. The rating outlook is stable.
LEHMAN BROTHERS: LBI Settles Dispute With Solomon
-------------------------------------------------
James Giddens, the trustee liquidating the assets of Lehman
Brothers Inc., entered into a stipulation and order in connection
with the settlement between LBI and the Solomon Page Group, LLC.
LBI and Solomon entered into Retained Search Agreements dated
February 25, 2004, and December 14, 2004, and a series of related
Engagement Letters. Disputes and claims arose between the
Parties relating to the Search Agreement and they commenced
lawsuits against each other concerning the Disputes. In an
attempt to resolve and settle the Disputes, LBI and Solomon
entered into a settlement agreement on November 13, 2006, whereby
Solomon agreed to pay LBI $1,444,750 in three separate payments.
Solomon timely remitted and LBI received the first two payments
pursuant to the 2006 Settlement Agreement. On December 17, 2008,
Solomon remitted to LBI the Final Payment, but the Final Payment
never reached the Trustee or his professionals and was never
negotiated. Solomon has provided the Trustee evidence of tax
liens and other debts, which rendered it unable to remit to the
Trustee the full amount of the Final Payment.
To settle Solomon's liability to LBI on the Final Payment,
Solomon will pay $90,000 to Mr. Giddens in this manner:
-- $30,000 within five days after the order approving the
Stipulation becomes final and non-appealable;
-- $30,000 within six months of the date of the Stipulation;
and
-- $30,000 within one year of the date of the Stipulation.
A failure by Solomon to make timely payments will constitute a
material default and breach of Solomon's obligations under the
Stipulation. In the event of an uncured default, the Trustee may
enter a judgment against Solomon, the terms of which will be and
are approved by the Court, for the fixed sum of $481,583 and
enforce the judgment less any amounts previously paid.
Upon timely payment to and receipt by the Trustee of the full
Settlement Amount, the Trustee will be deemed to have fully,
finally and forever settled and released all claims that have
been or could be alleged under the 2006 Settlement Agreement.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on Sept. 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: LBI Resolves REPO Claim Objections
---------------------------------------------------
After Lehman Brothers Inc.'s SIPA proceeding commenced,
Westernbank Puerto Rico, including its Westernbank International
division, Hudson City Savings Bank, Doral Bank and Doral
Financial Corporation, submitted one or more customer claims
arising out of their repurchase and reverse repurchase
transactions with LBI that were "open" as of the Filing Date,
meaning that the date for the contemplated repurchase had not yet
arrived.
The LBI Trustee has filed a Notice of Determination denying
customer treatment under SIPA to each Repo Claim and
reclassifying each Repo Claim as a general creditor claim. Each
Repo Claimant has objected to the LBI Trustee's determination of
its Repo Claims.
To resolve the objections, the LBI Trustee and the Repo Claimants
entered into a stipulation agreeing that:
-- the Repo Claimants may serve document requests that they
propounded jointly and individually no later than July 15,
2011. The LBI Trustee's responses and objections to both
the Joint Demands and the Individual Demands will be served
by August 1, 2011, and responsive materials will be
produced by August 31, 2011;
-- document requests propounded by the LBI Trustee upon any of
the Repo Claimants will be served no later than July 15,
2011. Responses and objections to the requests will be
served by August 1, 2011, and responsive materials will be
produced by August 31, 2011;
-- the Repo Claimants may serve upon the LBI Trustee, and the
LBI Trustee may serve upon each Repo Claimant, no more than
25 interrogatories, which will be served by August 19,
2011, with responses and objections due by September 19,
2011;
-- by September 26, 2011, the Repo Claimants and the LBI
Trustee will meet and confer to determine if further
discovery is needed to adjudicate the Repo Claim Objections
and, if so, to set further deadlines;
-- the LBI Trustee will present each Repo Claimant with a
Statement of Facts relating to each Repo Claim by
September 9, 2011. The Repo Claimants and the Trustee will
endeavor to enter into a Stipulation of Undisputed Facts by
September 30, 2011; and
-- the LBI Trustee will seek to schedule a status conference
on the Repo Claim Objections to be held at the Court's
convenience on or before October 30, 2011. No dispositive
motions will be filed or served by any parties prior to the
status conference.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on Sept. 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Creditors Transfer $1-Bil. in Claims in May
------------------------------------------------------------
More than 600 claims totaling more than US$1 billion changed
hands in the Debtors' bankruptcy cases in May 2011. Among the
largest claims traded were:
Transferor Transferee Claim No. Claim Amount
--------- ---------- --------- ------------
Osaka Securities Nomura Securities 19176 $209,788,428
Finance Company Ltd. Co. Ltd.
Deutsche Bank AG Sunken Ledge LLC 27640 $81,995,772
Commerzbank AG Barclays Bank PLC 58459 $78,713,775
Theodoor Gilissen The Seaport Group 45214 $72,765,091
Global Custody N.V. Europe LLP
Theodoor Gilissen The Seaport Group 48734 $41,249,332
Global Custody N.V. Europe LLP
Fondazione Monte Goldman Sachs Lending 42292 $61,162,551
dei Paschi di Siena Partners LLC
Barclays Bank PLC The Varde Fund IX LP 58459 $38,859,345
LBVN Holdings LLC Barclays Bank PLC 59098 $31,590,974
BNP Paribas Energy BNP Paribas 13776 $29,800,000
Trading GP Securities Corp.
BNP Paribas Energy BNP Paribas 13777 $29,800,000
Trading GP Securities Corp.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on Sept. 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Creditors Transfer $4-Bil. in Claims in June
-------------------------------------------------------------
More than 1,400 claims totaling more than US$4 billion changed
hands in the Debtors' bankruptcy cases in June 2011. Among the
largest claims traded were:
Transferor Transferee Claim No. Claim Amount
--------- ---------- --------- ------------
CVI GVF (Lux) Master Deutsche Bank AG 11672 $371,794,529
S.a.r.l. London Branch
Deutsche Bank AG HBK Master Fund LP 66653 $264,000,000
London Branch
Deutsche Bank AG HBK Master Fund LP 66655 $264,000,000
London Branch
Deutsche Bank AG HBK Master Fund LP 21893 $237,802,450
London Branch
Deutsche Bank AG HBK Master Fund LP 21894 $237,802,450
London Branch
Kaupthing Bank hf. Alandsbanken Sverige 58475 $181,018,317
Kaupthing Bank hf. Morgan Stanley & Co. 58475 $181,018,317
International plc
Morgan Stanley & Co. Fir Tree Value Master 58475 $150,209,000
International plc Fund LP
Credit Distressed Deutsche Bank AG 66653 $75,000,000
Blue Line Master London Branch
Fund, Ltd.
Credit Distressed Deutsche Bank AG 66655 $75,000,000
Blue Line Master London Branch
Fund, Ltd.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on Sept. 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LION COPOLYMER: Moody's Assigns 'B2' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating to
Lion Copolymer Holdings LLC. Moody's also assigned a B2 rating to
the proposed $400 million of guaranteed senior secured first lien
credit facilities which include a $350 million term loan due 2017
and a $50 million revolving facility due 2016. The proceeds from
the proposed term loan will be used to pay a $226 million
distribution to the sponsors, refinance the existing debt, and pay
the transaction fees. The revolver is expected to remain undrawn
at close of the transaction. This is Moody's first public rating
for Lion. The proposed ratings are contingent upon completion of
the transaction, upon terms that are substantially similar to the
documentation provided to Moody's, and subject to a final review
of the relevant documents. The outlook is stable.
RATINGS RATIONALE
The B2 CFR reflects Lion's single site risk, modest revenue base,
lack of product diversity, exposure to volatile feedstock pricing,
and cyclical industry dynamics. The majority of operating earnings
is derived from one business line, ethylene-propylene-diene-
monomer (EPDM), which is produced in only one location. Lion's
elastomers products are of a narrow scope and supply industries
with a history of tight margins and high cyclicality such as the
automotive and construction businesses. Notwithstanding the
introduction of EPDM contracts with raw material pass through
features, the potential exposure to volatile feedstock prices as
well as the cyclical nature of this business are also credit risks
considered, (i.e. recent price increases in propylene and
butadiene).
Other factors that are of concern include the customer
concentration and competitive position in the marketplace. While
Lion has numerous long-term customer relationships, there is
meaningful customer concentration. As the third largest global
producer of EPDM, Lion holds a key market position with a
competitive cost structure, however they have several top
competitors with integrated operations, who are much larger and
better capitalized.
Factors supporting the B2 rating include: a conservative capital
structure with low leverage resulting in strong pro forma credit
metrics, and current favorable industry dynamics. Upon completion
of the transaction Moody's projects these pro forma LTM credit
ratios, for the period ending June 30, 2011: Debt/EBITDA of 3.0x,
EBITDA/Interest of 5.8x, Retained Cash Flow/Debt of 20.6%, Free
Cash Flow/Debt of 7.6%; cash flows are forecasted to be positive
in 2011, excluding the large one-time distribution to Goradia
Capital and other sponsors. (All aforementioned credit metrics
reflect Moody's standard analytical adjustments.) The 50% cash
flow sweep for debt reduction, indicated in the Term Sheet, as
well as stated intentions for rapid debt reduction from management
are both credit positives. Favorable industry conditions are
expected to last for the next two or more years as capacity
utilization within the EPDM industry is high. (While additions to
EPDM production capacity are expected, there is a significant
lead-time to bringing new plants online.)
The stable outlook reflects Moody's expectation that Lion will
generate positive free cash flow over the next two years as market
conditions remain favorable and EPDM capacity utilization remains
high. Upside to the rating is limited because of the risk of
having the majority of EBITDA produced at a single EPDM production
site and the concentration of earnings from one product line. Any
decline in EBITDA margins or unexpected increases in debt could
cause a change in the outlook or a negative rating action.
This summarizes the ratings activity.
Lion Copolymer Holdings LLC
Ratings assigned:
Corporate Family Rating -- B2
Probability of Default Rating -- B2
$350 million guaranteed senior secured first lien credit facility
term loan due 2017 -- B2 (LGD4, 50%)
$50 million guaranteed senior secured first lien term credit
facility revolver due 2016 -- B2 (LGD4, 50%)
Ratings outlook -- Stable
Lion's near term liquidity profile is very good primarily due to
the company's cash flow generating capabilities, the $50 million
revolver which is expected to be undrawn at the completion of the
transaction, and the $7.8 million cash balance as of June 30,
2011. Moody's believes that Lion will have sufficient covenant
headroom over the next 12-18 months as the company enjoys
favorable operating conditions and modest capital spending. There
are no anticipated acquisitions.
Lion is a producer of ethylene-propylene-diene-monomer (EPDM) and
styrene-butadiene-rubber (SBR) elastomers and has been in the
business for over 60 years. Lion is privately held by majority
owner Goradia Capital and minority owner Lion Chemical Capital
LLC, the company was formed through the separate acquisitions of
the SBR business, from DSM in 2005, and the EPDM business, from
Chemtura in 2007. Lion is headquartered in Baton Rouge, Louisiana,
the site of their SBR business, and runs the EPDM business from
their Geismar, Louisiana production facilities. EDPM is used by
the automotive, construction, and industrial markets in the
production of gaskets, hoses, seals, hoses, membranes, and other
applications requiring oxidation and heat resistance as well as
flexibility and dielectric performance. SBR is predominately sold
into the tire market. Lion's revenue for the LTM ending June 30,
2011 is $590 million.
The principal methodology used in rating Lion Copolymer Holdings
LLC was the Global Chemical Industry Methodology, published
December 2009. Other methodologies used include Loss Given Default
for Speculative Grade Issuers in the US, Canada, and EMEA,
published June 2009.
LION COPOLYMER: S&P Assigns Prelim. 'B+' Corporate Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B+' preliminary
corporate credit rating to Lion Copolymer Holdings LLC. The
outlook is stable.
"We characterize Lion's business profile as weak based on its
exposure to cyclical end markets, narrow business focus, and
reliance on butadiene -- currently in short supply in the U.S. --
as a raw material," said Standard & Poor's credit analyst Henry
Fukuchi. "The aggressive financial profile reflects both our
expectation that operating results will remain cyclical and the
company's very aggressive financial policy, as evidenced by
recent and proposed dividend distributions."
The stable outlook reflects Standard & Poor's expectation that
end-market demand will continue to improve in line with gradual
global economic growth. "We believe that Lion has moderate cushion
in its cash flow protection measures for unexpected temporary
slowdowns in global growth, some amount of input cost volatility,
or other unexpected moderate cash outlays," Mr. Fukuchi said.
Standard & Poor's also assigned a 'B+' preliminary issue-level
rating (same as the corporate credit rating) and a '4' preliminary
recovery rating to Lion's proposed $50 million revolving credit
facility due 2016 and $350 million term loan B due 2017. The
preliminary recovery rating indicates the expectation of average
recovery (30% to 50%) in the event of a payment default. The
ratings are based on the preliminary terms and conditions of the
facilities.
The company plans to use proceeds from the $350 million term loan
B facility to refinance about $114 million in existing debt, to
fund a $226 million dividend to its shareholders, and to pay
transaction fees and expenses.
Lion produces synthetic rubbers including ethylene propylene diene
monomer (EPDM) and emulsion styrene-butadiene-rubber (ESBR). The
company had revenues of about $590 million for the 12 months
through June 30, 2011. Lion sells primarily to the U.S. automotive
(e.g., hoses, belts, under-the-hood applications, tires) and
construction (e.g., roofing, wire, and cable) end markets and
exports some EPDM products to Asia and Europe.
LIVEDEAL INC: Submits Plan to Regain Compliance With Nasdaq
-----------------------------------------------------------
LiveDeal disclosed submission of a plan to regain compliance with
certain requirements for the continued listing of its common stock
on the Nasdaq Capital Market. As previously disclosed, on May 18,
2011, LiveDeal received a letter from Nasdaq's Listing
Qualifications Department informing LiveDeal of its failure to
comply with Listing Rule 5550(b)(1), which requires the company to
maintain a minimum of $2,500,000 in stockholders' equity for
continued listing on the Nasdaq Capital Market. As of March 31,
2011, LiveDeal had stockholders' equity of $2,124,183.
After the Nasdaq staff reviews LiveDeal's compliance plan, the
staff will provide the company with written notice of its
decision. If the Nasdaq staff rejects the company's compliance
plan, LiveDeal will have the opportunity to appeal any resulting
delisting determination or public reprimand letter to a Nasdaq
hearings panel. During the review period described above,
including any extension thereof, and the pendency of an appeal (if
any), LiveDeal's common stock will continue to be traded on the
Nasdaq Capital Market.
The company is also a recipient of an executed term sheet from a
prospective investor based in Japan, setting forth certain terms
and conditions of a proposed $1,500,000 investment in LiveDeal.
The term sheet, which is legally non-binding, provides that
Investor and certain co-investors would purchase an aggregate of
600,000 newly issued shares of LiveDeal's common stock at a
purchase price of $2.50 per share.
Investor and its co-investors would also be entitled to appoint up
to five members of LiveDeal's board of directors, who could be
current directors or new appointees, subject to applicable rules
and regulations of the Securities and Exchange Commission and The
NASDAQ Stock Market.
The proposed investment transaction is subject to certain
conditions, including the completion of Investor's due diligence
review of LiveDeal, the parties' execution and delivery of a
definitive stock purchase agreement, and the approval of
LiveDeal's stockholders. Unless and until a definitive stock
purchase agreement is executed and stockholder approval is
obtained, Investor will not be obligated to consummate the
proposed investment.
About LiveDeal, Inc.
LiveDeal, Inc. provides local customer acquisition services and
related products for small businesses to deliver an affordable way
for businesses to extend their marketing reach to target customers
via the Internet.
LOCATION BASED TECH: Incurs $1.18-Mil. Net Loss in May 31 Quarter
-----------------------------------------------------------------
Location Based Technologies, Inc., filed with the U.S. Securities
and Exchange Commission its Quarterly Report on Form 10-Q
reporting a net loss of $1.18 million on $4,575 of total net
revenue for the three months ended May 31, 2011, compared with a
net loss of $1.21 million on $4,612 of total net revenue for the
same period during the prior year. The Company also reported a
net loss of $5.26 million on $9,442 of total net revenue for the
nine months ended May 31, 2011, compared with a net loss of $5.45
million on $61,738 of total net revenue for the same period a year
ago.
The Company's balance sheet at May 31, 2011, showed $1.77 million
in total assets, $7.70 million in total liabilities and a $5.93
million in total stockholders' deficit.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/CoOHfR
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.
LOCATION BASED TECH: Partners with Telcel & America Movil
---------------------------------------------------------
Location Based Technologies, Inc., entered a Commercial Agreement
to provide the PocketFinder(R) family of location devices and
services to the markets in Mexico and Latin America through
Radiomovil Dipsa S.A. de C.V..
Under the terms of the Agreement, PocketFinder(R)'s family of
products will be integrated into Telcel's M2M network and Location
Based Technologies, Inc., will sell devices directly to Telcel,
Radio Movil DIPSA (America Movil).
"By partnering with Telcel and America Movil, their 231 Million
wireless customers in Mexico and Latin America will soon enjoy the
benefits of the PocketFinder products and services," said Dave
Morse, CEO of Location Based Technologies, Inc. "We were selected
by Telcel and America Movil because they are committed to bringing
the best wireless M2M products and GPS services to their customers
and believe that LBT delivers breakthrough products that will
change the way businesses and families use wireless data devices.
We're thrilled to make our products available to Telcel and
America Movil customers in Mexico and many Latin American
countries."
Telcel's successful multi-month testing of the PocketFinder
devices and Network Certification was conducted throughout each of
Telcel's Mexico based territories. The wireless carriers will
market and provide complete services to their Commercial and
Consumer customer base. Now that the companies have reached a
partnership Agreement, the first purchase orders are expected to
arrive shortly.
Mr. Arturo Rodriquez Monsalvo, Chief of Mobile Data Services,
Telcel, commented, "We at Telcel are pleased to be working with
Location Based Technologies in launching the PocketFinder family
of products to our customers in Latin America. We see
PocketFinder's location offering as a great enhancement to
Telcel's data services."
The PocketFinder family of products uses advanced technology to
help businesses and families stay connected. The PocketFinder(R)
is the smallest known single-board GSM/GPS device, and it easily
fits into a pocket, purse or backpack, and can be accessed via
smart phones or any other device that provides Internet access to
show its location in real time. Its service includes advanced GPS
features, that allow users to designate customizable alert areas
such as electronic "fences" or zones, vehicle speeds, location
times, and fleet management information.
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 May 31, 2011, showed $1.77 million
in total assets, $7.70 million in total liabilities and a $5.93
million in total stockholders' deficit.
LOS ANGELES DODGERS: Selig Offers $150-Mil. in Unsecured Financing
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Bud Selig, the commissioner of Major League Baseball,
has laid out the terms of a $150 million unsecured loan he is
willing to make to the Los Angeles Dodgers. He filed the papers
in advance of the July 20 hearing where a bankruptcy judge in
Delaware will decide whether to give final approval for a $150
million secured loan the Dodgers propose to draw from Highbridge
Principal Strategies LLC.
According to the report, Mr. Selig said MLB's loan would save the
Dodgers $15 million while not requiring the team to encumber its
assets with mortgages. The proposal is below market, Mr. Selig
said. The commissioner's loan would carry lower fees, an interest
rate 3 percentage points below the Highbridge loan, and a longer
maturity, allowing the team to negotiate a television contract
with interested parties in addition to Fox Entertainment Group
Inc., MLB said. Mr. Selig argues that Frank McCourt, the Dodgers'
owner, backs the Highbridge loan because he is personally liable
for a breakup fee if the loan isn't given final approval.
The report relates that Mr. Selig's loan, although unsecured,
would be treated as an expense of the Chapter 11 case. As a
result, it would be entitled to payment in full ahead of pre-
bankruptcy unsecured creditors were the team to confirm a Chapter
11 plan.
About the Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
The petition estimates assets of up to $500 million and debts of
up to $1 billion. According to Forbes, the team is worth about
$800 million, making it the third most valuable baseball team
after the New York Yankees and the Boston Red Sox.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent.
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection, according to The Wall Street
Journal.
MANAGED HEALTH CARE: Moody's Upgrades Corp. Family Rating to B2
---------------------------------------------------------------
Moody's Investors Service upgraded Managed Health Care Associates,
Inc.'s Corporate Family and Probability of Default Ratings to B2
from B3. Concurrently, Moody's upgraded the revolving credit
facility and first lien term loan to Ba3 from B1 and upgraded the
second lien term loan to Caa1 from Caa2. The ratings outlook was
changed to stable from positive.
These ratings actions were taken:
-- Corporate Family Rating upgraded to B2 from B3;
-- Probability of Default Rating upgraded to B2 from B3;
-- $15 million senior secured first lien revolving credit
facility, due 2013, upgraded to Ba3 (LGD3, 31%) from B1
(LGD2, 28%);
-- $170 million senior secured first lien term loan (including
$25 million upsize), due 2014, upgraded to Ba3 (LGD3, 31%)
from B1 (LGD2, 28%);
-- $95 million senior secured second lien term loan, due 2015,
upgraded to Caa1 (LGD5, 85%) from Caa2 (LGD5, 83%).
RATINGS RATIONALE
The upgrade of the Corporate Family Rating to B2 from B3 reflects
MHA's strong double digit revenue growth, stable EBITDA margin,
continued improvement in key credit metrics, and the company's
good liquidity profile. MHA has taken advantage of its strong cash
flow generation by making strategic de-leveraging acquisitions
which have resulted in the improvement of key credit metrics. Over
the past twelve months, the company has made three acquisitions
using cash on hand and utilizing the $25 million accordion feature
of its first lien term loan. Despite the increase in debt, the
EBITDA added from the acquisitions is expected to have a de-
leveraging effect of about 0.6 times.
The B2 Corporate Family Rating is constrained by the company's
small absolute revenues, relatively high debt burden, acquisition
based growth strategy, and the inherent industry risk of patent
expirations of branded drugs. MHA's revenues of approximately $114
million for the trailing twelve months ended March 31, 2011 are
small relative to the B2 rating category median revenues of
approximately $800 million. Further, the company's acquisition
based growth strategy has led to limited debt repayment as most of
the cash has been used for acquisitions. In addition, MHA is
facing the risk of branded drugs' patent expirations. The revenues
realized from the sale of generic drugs are substantially lower
than from branded drugs due to their much lower cost base. Thus,
MHA would not be able to offset the loss of a branded drug by
selling an equivalent generic drug. However, MHA could expand its
portfolio with new generic drugs that it was unable to offer when
the drugs were branded.
MHA's stable outlook incorporates expected good liquidity profile,
continued improvement in credit metrics, and no near term debt
maturities.
Moody's would change the outlook to positive or upgrade the
ratings if debt-to-EBITDA decreases and is sustained below 3 times
and the company continues to have a good liquidity profile. In
addition, MHA's revenue base would have to increase meaningfully
before an upgrade would be considered.
The ratings could face downward pressure if MHA was unable to
mitigate the negative impact of patent expirations on branded drug
sales leading to an increase in debt leverage to over 5.5 times.
Further, if MHA pursues additional debt funded acquisitions that
are not de-leveraging or shareholder friendly initiatives, the
ratings could be downgraded.
The principal methodology used in rating MHA was the Global
Business & Consumer Service Industry Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Headquartered in Florham Park, New Jersey, MHA, is a group
purchasing organization ("GPO") for long-term care ("LTC")
pharmacies and other classes of trade. The company also offers a
variety of services to pharmaceutical manufacturers selling to the
LTC industry, including contract administration, marketing, and
continuing education. For the twelve months ended March 31, 2011,
MHA generated revenues of approximately $114 million.
MERIT GROUP: Junior Lender Allowed to Bid Debt for Assets
---------------------------------------------------------
Dow Jones' DBR Small Cap reports that a judge cleared a junior
lender to bid debt at an upcoming auction for Merit Group Inc.'s
assets despite protests from unsecured creditors who want the
lender's claims redefined as equity.
As reported in the Troubled Company Reporter on July 5, 2011, The
U.S. Bankruptcy Court for the District of South Carolina
authorized The Merit Group Inc., to sell substantially all of its
assets in an auction led by MG Distribution, LLC. The Debtors
scheduled a July 20, auction for the assets at the offices of
McNair Law Firm, P.A., 1221 Main Street, Columbia, South Carolina.
Competing bids were due July 15, at 5:00 p.m. (Eastern Time).
About Merit Group
Based in Spartanburg, South Carolina, The Merit Group Inc.,
formerly Lancaster Distributing Company, serves as one of the
leading paint sundries distributors in the United States. Its
markets also include Mexico, the Caribbean Islands, Central
America and South America.
Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D.
S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E.
Burris presides over the case. Michael M. Beal, Esq., McNair Law
Firm PA, represents the Debtors. The Debtors selected Kurtzman
Carson Consultants LLC as their claims agent; and Morgan Joseph
TriArtisan LLC, investment banker, and Alvarez & Marsal North
America, LLC, as financial advisors. Merit Group disclosed
7,004,048 in assets and $66,609,946 in liabilities as of the
Chapter 11 filing.
DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet
Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP.
The U.S. Trustee has named seven members to the Official Committee
of Unsecured Creditors. The Committee is represented by Cole,
Schotz, Meisel, Forman & Leonard, P.A. The Committee tapped
McCarthy Law Firm LLC as co-counsel, J.H. Cohn LLP as its
financial advisor.
MMRGLOBAL INC: Inks Equipment Purchase Agreement with Eastman
-------------------------------------------------------------
MMRGlobal, Inc., signed a non-exclusive Equipment Purchase
Agreement with Eastman Kodak Company. Under the terms of the
Agreement, Kodak will manufacture and provide certain co-branded
products exclusively for the Company's MMRPro product line.
About MMRGlobal
Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF)
-- http://www.mmrglobal.com/-- through its wholly-owned operating
subsidiary, MyMedicalRecords, Inc., provides secure and easy-to-
use online Personal Health Records (PHRs) and electronic safe
deposit box storage solutions, serving consumers, healthcare
professionals, employers, insurance companies, financial
institutions, and professional organizations and affinity groups.
As reported by the TCR on April 7, 2011, Rose, Snyder & Jacobs, in
Encino, Calif., expressed substantial doubt about MMRGlobal's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant operating losses
and negative cash flows from operations during the year ended Dec.
31, 2010, and 2009.
The Company reported a net loss of $17.9 million on $972,988 of
revenues for 2010, compared with a net loss of $10.3 million on
$619,249 of revenues for 2009.
The Company's balance sheet at March 31, 2011, showed
$1.87 million in total assets, $7.18 million in total liabilities,
and a $5.31 million total stockholders' deficit.
MUNICIPAL MORTGAGE: CFO Kay Resigns to Build Consulting Practice
----------------------------------------------------------------
Municipal Mortgage & Equity, LLC, announced that David Kay, the
Company's Chief Financial Officer, is resigning effective Aug. 23,
2011, after the Company concludes its second quarter earnings
call. Mr. Kay's decision to leave the Company is the result of
his desire to build a consulting practice with several colleagues
with whom he worked prior to joining MuniMae coupled with
completion of his primary objectives to complete the Company's
restatement and begin filing timely financial statements. The
timing of his departure will allow the Company to complete its
June 30, 2011, Form 10-Q on time and will provide sufficient
transition time for his responsibilities.
The Company is pleased to announce that Lisa Roberts will become
its new Chief Financial Officer. Ms. Roberts joined MuniMae with
Mr. Kay in November 2007, serving as Corporate Controller and
leading the Company's financial functions.
Commenting on the changes, Mike Falcone, the Company's Chief
Executive Officer, stated, "Dave worked extraordinarily hard for
us over the last several years to get our restatement completed
and our filings current, and we wish him well in his new endeavor.
Lisa worked side by side with Dave during this time period and
played a pivotal role in our efforts to complete the restatement
and become a timely public filer. She brings us both continuity
and expertise and we are delighted that she has accepted our offer
to become CFO."
About Municipal Mortgage
Baltimore, Md.-based Municipal Mortgage & Equity, LLC (Pink
Sheets: MMAB) -- http://www.munimae.com/-- was organized in 1996
as a Delaware limited liability company and is classified as a
partnership for federal income tax purposes.
When the Company became a publicly traded company in 1996, it was
primarily engaged in originating, investing in and servicing tax-
exempt mortgage revenue bonds issued by state and local government
authorities to finance affordable multifamily housing
developments. Since then, the Company made several acquisitions
that significantly expanded its business. However, in 2008, due
to the financial crisis, the Company began contracting its
business.
The Company has sold, liquidated or closed down all of its
different businesses except for its bond investing activities and
certain assets and residual interests related to the businesses
and assets that the Company sold due to its liquidity issues.
The Company has a majority position in International Housing
Solutions S.a.r.l., a partnership that was formed to promote and
invest in affordable housing in overseas markets. In addition, at
Dec. 31, 2010, the Company has an unfunded equity commitment of
$5.1 million, or 2.67% of total committed capital with respect to
its role as the general partner to the South Africa Workforce
Housing Fund SA I ("SA Fund"). The SA Fund was formed to invest
directly or indirectly in housing development projects and housing
sector companies in South Africa. A portion of the funding of SA
Fund is participating debt provided by the United States Overseas
Private Investment Corporation, a federal government entity, and
the remainder is equity primarily invested by institutional and
large private investors. The Company expects to continue this
business.
As reported by the TCR on April 6, 2011, KPMG LLP, in Baltimore,
Maryland, expressed substantial doubt about Municipal Mortgage &
Equity's ability to continue as a going concern. The independent
auditors noted that the Company has been negatively impacted by
the deterioration of the capital markets and has liquidity issues
which have resulted in the Company having to sell assets,
liquidate collateral positions, post additional collateral, sell
or close different business segments and work with its creditors
to restructure or extend its debt arrangements.
Municipal Mortgage reported a net loss of $72.5 million on
$107.7 million of total revenue for 2010, compared with a net loss
of $380.1 million on $134.8 million of total revenue for 2009.
The Company's balance sheet at March 31, 2011, showed $1.97
billion in total assets, $1.28 billion in total liabilities and
$683.26 million in total equity.
NEBRASKA BOOK: Parent Posts $98.3-Mil. Net Loss in Fiscal 2011
--------------------------------------------------------------
NBC Acquisition Corp. filed on July 14, 2011, its annual report on
Form 10-K for the fiscal year ended March 31, 2011.
The Company reported a net loss of $98.3 million on $598.4 million
of revenues for fiscal 2011, compared with net income of
$2.3 million on $605.5 million of revenues for fiscal 2010.
During the fourth quarter of 2011, the Company recognized a non-
cash charge of $89.0 million related to the impairment of
goodwill. The impairment was primarily due to lower operating
results. No impairment charge was recorded for the year ended
March 31, 2010.
The Company's balance sheet at March 31, 2011, showed
$508.3 million in total assets, $547.7 million in total
liabilities, $13.6 million in redeemable preferred stock, and a
stockholders' deficit of $53.0 million.
A copy of the Form 10-K is available at http://is.gd/mWtg2R
About Nebraska Book
Lincoln, Nebraska-based NBC Acquisition Corp. was formed for the
purpose of acquiring all of the outstanding capital stock of
Nebraska Book Company, Inc., effective Sept. 1, 1995. The Company
does not conduct significant activities apart from its investment
in Nebraska Book Company. Nebraska Book Company is the sole
wholly-owned subsidiary of NBC Acquisition Corp.
Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States.
On June 27, 2011, NBC Acquisition Corp. and Nebraska Book and all
of its subsidiaries filed voluntary petitions for reorganization
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Case Nos. 11-12002 to 11-12009). Hon. Peter J. Walsh presides
over the case. Lawyers at Kirkland & Ellis LLP and Pachulski
Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel.
The Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC. As of the petition date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.
JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.
An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick. An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.
NEBRASKA BOOK: Projects Negative Operating Cash Flow
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Nebraska Book Co. filed the required cash-flow
projection showing a negative operating cash flow of $22.7 million
for the first 13 weeks in bankruptcy. Total receipts in the
period are projected to be $215.6 million, the bankruptcy court
filing says.
Mr. Rochelle notes that the projections show the company as paying
its bills during bankruptcy by drawing on $125 million in
financing provided by a group of banks led by JPMorgan Chase Bank
NA.
About Nebraska Book Company
Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States. Nebraska Book and seven affiliates filed
separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002
to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over
the case. lawyers at Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The
Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC. As of the Petition Date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.
JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.
An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick. An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.
The Official Committee of Unsecured Creditors selected Lowenstein
Sandler LLP as lawyers and Mesirow Financial Inc. as financial
advisers.
Nebraska Book has prepared a pre-packaged Chapter 11 plan that
would swap some of the existing debt for new debt, cash and the
new stock.
NEW LEAF: Restates Quarterly Reports to Correct Errors
------------------------------------------------------
New Leaf Brands, Inc., filed amendments to its quarterly reports
on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010,
and Sept. 30, 2010, to amend and restate the following previously-
filed condensed consolidated financial statements:
(1) the Company's condensed consolidated balance sheets as of
March 31, 2010, June 30, 2010, and Sept. 30, 2010, and the
related condensed consolidated statements of operations and
cash flows for the quarters; and
(2) management's discussion and analysis of the Company's
financial condition and results of operations as of and for
the quarter ended March 31, 2010.
Subsequent to the filing of the Company's Form 10-Qs, Management
identified that there were errors in the recording of derivative
liabilities and therefore the Company's unaudited condensed
consolidated financial statements required restatement.
The Company's restated statement of operations reflects a net loss
of $1.56 million on $1.05 million of net sales for the three
months ended Sept. 30, 2010, compared with a net loss of $1.62
million on $1.05 million of net sales as originally reported.
The Company's restated balance sheet at Sept. 30, 2010, showed
$5.31 million in total assets, $8.28 million in total liabilities
and a $2.97 million total stockholders' deficit, compared with
$5.31 million in total assets, $8.34 million in total liabilities,
and a stockholders' deficit of $3.03 million as previously
reported.
A full-text copy of the amended March 31 2010 Quarterly Report is
available for free at http://is.gd/ioBQZ2
A full-text copy of the amended June 30 Quarterly Report is
available for free at http://is.gd/cY8qEd
A full-text copy of the amended Sept. 30 Quarterly Report is
available for free at http://is.gd/mbWCjs
About New Leaf Brands
Scottsdale, Ariz.-based New Leaf Brands, Inc. develops, markets
and distributes healthy and functional ready-to-drink teas under
the New Leaf(R) brand.
The Company reported a net loss of $9.13 million on $4.25 million
of net sales for the year ended Dec. 31, 2010, compared with a net
loss of $10.93 million on $3.45 million of net sales for the same
period during the prior year.
The Company's balance sheet at Dec. 31, 2010, showed $4.79 million
in total assets, $9.51 million in total liabilities and a $4.72
million total stockholders' deficit.
As reported by the TCR on June 2, 2011, Mayer Hoffman McCann P.C.,
in Phoenix, Arizona, 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, has a working capital deficiency, was not in
compliance with certain financial covenants related to debt
agreements, and has a significant amount of debt maturing in 2010.
Mayer Hoffman issued negative going concern qualifications
following the release of the 2009 and 2010 results.
NIGRO HQ: Case Summary & 11 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Nigro HQ LLC
9115 W. Russell Road, Suite 210
Las Vegas, NV 89148
Bankruptcy Case No.: 11-21014
Affiliates that simultaneously sought Chapter 11 protection:
* Beltway One Development Group LLC
* Horizon Village Square LLC
* Ten Saints LLC
Chapter 11 Petition Date: July 13, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Mike K. Nakagawa
Debtor's Counsel: Candace C. Clark, Esq.
GORDON SILVER
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, NV 89169
Tel: (702) 796-5555
Fax: (702) 369-2666
E-mail: bankruptcynotices@gordonsilver.com
- and -
Gerald M. Gordon, Esq.
GORDON SILVER
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, NV 89169
Tel: (702) 796-5555
Fax: (702) 369-2666
E-mail: bankruptcynotices@gordonsilver.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 11 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nvb11-21014.pdf
The petition was signed by Todd A. Nigro, manager of Nigro
Development, LLC, its manager.
Debtor-affiliate that previously sought Chapter 11 protection:
Entity Case No. Petition Date
------ -------- -------------
Russell Boulder, LLC 10-29724 10/19/10
NORTHCORE TECHNOLOGIES: Gets $1.3MM from Warrants Exercise
----------------------------------------------------------
Northcore Technologies Inc. received over $1.3 million dollars in
proceeds from warrants exercised by current holders.
"We thank the warrant holders for demonstrating their confidence
in the new leadership," said Amit Monga, CEO Northcore
Technologies. "These proceeds will allow us to continue the
execution of our augmented go-to-market vision, a recent example
of which is the creation of the Northcore Social Commerce Group.
We remain committed to growth through innovation and providing
superior returns to our shareholders."
Receipt of capital through exercise of warrants is non-dilutive in
that the number of outstanding units is accommodated in
Northcore's existing fully diluted share number.
About Northcore
Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment. Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.
Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE. Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.
Northcore reported a net loss for the first quarter of C$574,000.
This compares with a net loss of C$677,000 in the fourth quarter
of 2010. In the first quarter of 2010, Northcore reported a net
loss of $713,000.
Northcore reported consolidated revenues of C$183,000 for the
first quarter, an increase of 4% over the C$176,000 reported in
the fourth quarter of 2010. In the same period of 2010, Northcore
reported consolidated revenues of C$150,000.
Certain adverse conditions and events cast substantial doubt upon
the ability of the Company to continue as a going concern, the
Company said in the filing. "The Company has not yet realized
profitable operations and has relied on non-operational sources of
financing to fund operations."
The Company's balance sheet at March 31, 2011, showed C$595,000 in
total assets, C$1.83 million in total liabilities and a C$1.24
million in total shareholders' deficiency.
OCWEN FINANCIAL: S&P Affirms Counterparty Credit Rating at 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' long-term
counterparty credit rating on OCWEN Financial Corp. The outlook is
stable. "We have assigned a 'B' rating to OCWEN's $575 million
senior secured term loan offering, and affirmed the senior
unsecured debt rating, including its convertible securities, at
'B-'," S&P said.
OCWEN has received a commitment letter from Barclays Bank PLC to
provide a senior secured term loan facility of $575 million to
finance its $263.7 million acquisition of Litton from Goldman
Sachs. OCWEN will use the remainder of the proceeds to lower
advance rates on the associated servicer advance facility.
"Although the debt issuance will make OCWEN's leverage metrics
less attractive, we still view the company's pro-forma (12 months
ended March 31, 2011) corporate debt-to-adjusted EBITDA (excluding
nonrecourse debt) and adjusted EBITDA-to-corporate interest
expense plus mandatory amortization ratios of approximately 1.9x
and 3.3x as adequate for the rating," S&P related.
"We believe that OCWEN's recent servicing-portfolio acquisitions
have demonstrated the company's ability to grow its business
despite its lack of an origination platform and an industry-wide
slowdown in subprime mortgage originations," said Standard &
Poor's credit analyst Kevin Cole, CFA. "We also expect OCWEN's
profitability profile and servicing franchise value to improve
once the company integrates these assets into its low-cost
servicing platform. As of March 31, 2011, OCWEN and Litton were
servicing roughly $70.5 billion and $41.2 billion in unpaid
principal balance (UPB) of primarily subprime residential mortgage
loans. The combined entity will rank second in terms of total UPB
among nonbank servicers, and first among subprime servicers."
"We still believe that the frequent shifts in OCWEN's business
strategy, which have diverted company resources and management's
focus, remain a negative ratings factor. Earlier this year, OCWEN
announced the planned sale of a portion of its mortgage servicing
rights to a newly formed entity, Home Loan Servicing Solutions
(HLSS). HLSS's management will consist of former OCWEN employees,
and the two companies will have the same chairman of the board,
who is also OCWEN's largest shareholder. OCWEN plans eventually to
sell most, if not all, of its servicing assets to HLSS and
function as a subservicer. Although we believe OCWEN's credit
quality could benefit from the need for lower leverage as an
'asset-light' subservicer, the company may become overly reliant
on HLSS for subservicing contract assignments. We would
not take any rating action on OCWEN until the timing and details
of the proposed transaction are more certain," S&P stated.
The rating on OCWEN's $575 million senior secured offering
reflects OCWEN's highly encumbered balance sheet, somewhat offset
by the value of its servicing franchise and the loan's adequate
collateralization. "Our affirmation of our rating on OCWEN's
senior unsecured debt at one notch below the counterparty credit
rating reflects its subordination to the new senior
secured offering," S&P related.
The outlook is stable. OCWEN has a strong pipeline of servicing
contracts, substantial profit margins, and limited exposure to
credit risk.
"We could lower the ratings if the company pursues a more-
aggressive acquisition strategy than it has demonstrated during
the past 18 months, or enters into lines of business outside of
its core servicing business. Upward ratings movement is limited by
uncertainty, in our view, about the levels of subprime servicing
rights that will be available to replace existing assets in the
longer term, and OCWEN's history of shifting its business
strategy," S&P added.
ONE GEORGIA BANK: Closed; Ameris Bank Assumes All Deposits
----------------------------------------------------------
Ameris Bank of Moultrie, Ga., acquired the banking operations,
including all the deposits, of High Trust Bank in Stockbridge,
Ga., and One Georgia Bank in Atlanta, Ga. The two banks were
closed on Friday, July 15, 2011, by the Georgia Department of
Banking and Finance, which appointed the Federal Deposit Insurance
Corporation as receiver for each institution. To protect
depositors, the FDIC entered into purchase and assumption
agreements with Ameris Bank.
All three branches of the two closed banks will reopen during
their normal business hours as branches of Ameris Bank.
Depositors of the two failed banks automatically will become
depositors of Ameris Bank. Deposits will continue to be insured
by the FDIC, so there is no need for customers to change their
banking relationship in order to retain their deposit insurance
coverage up to applicable limits. High Trust Bank had two
branches, and One Georgia Bank had one branch.
As of March 31, 2011, High Trust Bank had total assets of $192.5
million and total deposits of $189.5 million; and One Georgia Bank
had total assets of $186.3 million and total deposits of $162.1
million. Besides assuming all the deposits from the two Georgia
banks, Ameris Bank will purchase essentially all of their assets.
The FDIC and Ameris Bank entered into loss-share transactions on
the failed banks' assets. The loss-share transaction for High
Trust Bank was $164.8 million, and the loss-share transaction for
One Georgia Bank was $146.3 million. Ameris Bank will share in
the losses on the asset pools covered under the loss-share
agreements. The loss-share transactions are projected to maximize
returns on the assets covered by keeping them in the private
sector. The transactions also are expected to minimize
disruptions for loan customers. For more information on loss
share, please visit:
http://www.fdic.gov/bank/individual/failed/lossshare/index.html
Customers with questions about the transactions should call the
FDIC toll free: for High Trust Bank customers, 1-866-934-8944 and
for One Georgia Bank customers, 1-877-894-4713. Interested
parties also can visit the FDIC's Web sites: for High Trust Bank,
http://www.fdic.gov/bank/individual/failed/hightrust.html
and for One Georgia Bank,
http://www.fdic.gov/bank/individual/failed/onegeorgia.html
The FDIC estimates that the cost to the Deposit Insurance Fund for
High Trust Bank will be $66.0 million and for One Georgia Bank,
$44.4 million. Compared to other alternatives, Ameris Bank's
acquisition of the two institutions was the least costly option
for the DIF. The closings are the 52nd and 53rd FDIC-insured
institutions to fail in the nation so far this year and the
fifteenth and sixteenth in Georgia. The last FDIC-insured
institution closed in the state was Mountain Heritage Bank,
Clayton, on June 24, 2011.
OPEN SOLUTIONS: Bank Debt Trades at 13% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Open Solutions,
Inc., is a borrower traded in the secondary market at 86.75 cents-
on-the-dollar during the week ended Friday, July 15, 2011, an
increase of 0.28 percentage points from the previous week
according to data compiled by Loan Pricing Corp. and reported in
The Wall Street Journal. The Company pays 212.5 basis points
above LIBOR to borrow under the facility. The bank loan matures
on Jan. 18, 2014, and carries Moody's B1 rating and Standard &
Poor's BB- rating. The loan is one of the biggest gainers and
losers among 206 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
Headquartered in Glastonbury, Conn., Open Solutions, Inc., is a
privately held provider of core data processing and information
management software solutions for financial institutions including
community banks / thrifts and credit unions. In January 2007, the
company was acquired by The Carlyle Group and Providence Equity
Partners in a leveraged transaction of roughly $1.4 billion
including the assumption of debt.
OPTI CANADA: Moody's Lowers Default Rating to 'D' on CCAA Filing
----------------------------------------------------------------
Moody's Investors Service downgraded the probability of default
rating for OPTI Canada Inc. to D in response to the company's
announcement that it had filed voluntary petitions for
reorganization under the Companies' Creditors Arrangements Act.
The company's Caa3 corporate family rating was affirmed, as were
the B2 rating on the C$190 million secured first-lien revolving
facility, the B3 rating on the US$525 million secured first-lien
1B notes , the Caa1 rating on the US$300 million secured first-
lien 1C notes and the Ca rating on the US$1.75 billion senior
secured second-lien notes. The rating outlook remains negative.
Downgrades:
Issuer: OPTI Canada Inc.
Probability of Default Rating, Downgraded to D from Caa3
Upgrades:
Issuer: OPTI Canada Inc.
-- Senior Secured Bank Credit Facility, Upgraded to LGD1, 00%
from LGD1, 01%
-- Senior Secured Regular Bond/Debenture, Upgraded to a range
of LGD3, 41 % to LGD1, 05 % from a range of LGD5, 71 % to
LGD2, 16 %
RATINGS RATIONALE
Shortly following the rating actions, Moody's will withdraw all of
OPTI's ratings.
The ratings of the various rated debt instruments reflect their
priority of claim on OPTI's assets under Moody's Loss Given
Default Methodology. The revolver lenders are the first ranking
lenders, followed by the 1B notes and then the 1C notes. The
second-lien note holders rank last.
Please see ratings tab on the issuer/entity page on Moodys.com for
the last credit rating action and the rating history.
The principal methodology used in rating OPTI Canada was the
Independent Exploration and Production (E&P) Industry Methodology
published in December 2008.
OPTI Canada Inc., headquartered in Calgary, Alberta, holds a 35%
interest in Long Lake, an in-situ (SAGD) oil sands operation near
Fort McMurray, Alberta.
PACIFIC GOLD: Silberstein Ungar Raises Going Concern Doubt
----------------------------------------------------------
Pacific Gold Corp. filed on July 12, 2011, its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2010.
Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed
substantial doubt about Pacific Gold's ability to continue as a
going concern. The independent auditors noted that the Company
has incurred losses from operations, has negative working capital
and is in need of additional capital to grow its operations so
that it can become profitable.
The Company reported a net loss of $985,278 on $5,836 of revenue
for 2010, compared with a net loss of $1.4 million on $0 revenue
for 2009.
The Company's balance sheet at Dec. 31, 2101, showed $1.4 million
in total assets, $3.9 million in total liabilities, and a
stockholders' deficit of $2.5 million.
A copy of the Form 10-K is available at http://is.gd/YogfyX
Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the
identification, acquisition, and development of mining prospects
believed to have known gold or tungsten mineralizations.
Pacific Gold Corp. owns 100% of four operating subsidiaries;
Nevada Rae Gold, Inc., Fernley Gold, Inc., Pilot Mountain
Resources Inc., and Pacific Metals Corp. through which it holds
various prospects in Nevada and Colorado.
PEGASUS RURAL: Court Approves Elliott Greenleaf as Bankr. Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Pegasus Rural Broadband LLC and its debtor-affiliates to employ
Elliott Greenleaf as their bankruptcy counsel under a general
retainer.
The Debtors said attorneys at Elliott Greenleaf have become
familiar with their business affairs and capital structure,
without elaborating.
Elliott Greenleaf was paid a $150,000 retainer on June 8 by the
Debtors' parent, Xanadoo Company. Elliott Greenleaf also received
from the Debtors $13,595 within 90 days preceding the petition
date, leaving, according to papers filed by the Debtors, a
retainer balance of $136,405, which was paid in advance of or
contemporaneously with services rendered in preparation for the
bankruptcy filing.
About Pegasus Rural Broadband
Pegasus Rural Broadband, LLC, and its affiliates, including
Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 11-11772) on June 10, 2011.
The Debtors are subsidiaries of Xanadoo Company, a 4G wireless
Internet provider. Xanadoo Co. was not among the Chapter 11
filers.
The subsidiaries sought Chapter 11 protection after they were
unable to restructure $52 million in 12.5% senior secured
promissory notes that matured in May. The notes are owing to
Beach Point Capital Management LP.
Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless
high-speed broadband service, including digital phone services,
under the Xanadoo brand utilizing licensed frequencies in the 2.5
GHz frequency band. As of May 31, 2011, XLC served 12,000
subscribers in Texas, Oklahoma and Illinois. In the summer of
2010, the Debtors closed all of their retail stores and kiosks in
its six operating markets and severed all fulltime sales
personnel. Since the closings, the Debtors relied one key
retailer in each market to serve as local point of presence to
market customer transactions.
Judge Peter J. Walsh presides over the case. Jonathan M.
Stemerman, Esq., Neil Raymond Lapinski, Esq., and Rafael Xavier
Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., at Elliott
Greenleaf, in Wilmington, Delaware, serve as counsel to the
Debtor. Epiq Systems, Inc., is the claims and notice agent.
Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each
estimated assets of $100 million to $500 million and debts of
$50 million to $100 million.
PEGASUS RURAL: Court Approves NHB as Financial Advisors
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Pegasus Rural Broadband LLC and its debtor-affiliates to employ
NHB Advisors Inc. as their financial advisors to assist in
evaluating the Debtors' businesses during the Chapter 11 cases.
According to the Troubled Company Reporter on June 29, 2011, the
Debtors will pay NHB its customary hourly rates:
Edward T. Gavin, CTP $550 per hour
Ross Waetzman, CIRA $375 per hour
From time to time, other NHB principals, advisors and associates
may be involved in the case as needed. Hourly rates for these
principals, advisors and associates range from $250 to $600 per
hour.
Edward T. Gavin, CTP, attested that NHB has no connection with,
and holds no interest adverse to, the Debtors, their estates,
their creditors, or any interested party. NHB may be reached at:
Edward T. Gavin
NHB ADVISORS, INC.
919 Market Street, Suite 1410
Wilmington, DE 19801
Tel: (302) 655-8997
Fax: (302) 655-6063
E-mail: tgavin@nhbteam.com
About Pegasus Rural Broadband
Pegasus Rural Broadband, LLC, and its affiliates, including
Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 11-11772) on June 10, 2011.
The Debtors are subsidiaries of Xanadoo Company, a 4G wireless
Internet provider. Xanadoo Co. was not among the Chapter 11
filers.
The subsidiaries sought Chapter 11 protection after they were
unable to restructure $52 million in 12.5% senior secured
promissory notes that matured in May. The notes are owing to
Beach Point Capital Management LP.
Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless
high-speed broadband service, including digital phone services,
under the Xanadoo brand utilizing licensed frequencies in the 2.5
GHz frequency band. As of May 31, 2011, XLC served 12,000
subscribers in Texas, Oklahoma and Illinois. In the summer of
2010, the Debtors closed all of their retail stores and kiosks in
its six operating markets and severed all fulltime sales
personnel. Since the closings, the Debtors relied one key
retailer in each market to serve as local point of presence to
market customer transactions.
Judge Peter J. Walsh presides over the case. Jonathan M.
Stemerman, Esq., Neil Raymond Lapinski, Esq., and Rafael Xavier
Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., at Elliott
Greenleaf, in Wilmington, Delaware, serve as counsel to the
Debtor. Epiq Systems, Inc., is the claims and notice agent.
Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each
estimated assets of $100 million to $500 million and debts of
$50 million to $100 million.
PERKINS & MARIE: Files Plan of Reorganization
---------------------------------------------
Perkins & Marie Callender's Inc. disclosed that the Company and
its subsidiaries currently acting as debtors in possession under
chapter 11 of the United States Bankruptcy Code have filed a joint
plan of reorganization and an accompanying disclosure statement
with the United States Bankruptcy Court for the District of
Delaware. The filing of the Plan and the Disclosure Statement
fulfills a significant milestone under the restructuring support
agreement that the Company entered into prior to the commencement
of its chapter 11 cases with the holders of 100 percent of the
Company's 14% Senior Secured Notes due 2013 and more than 80
percent of the Company's 10% Senior Notes due 2013. With this
filing, the Company intends to exit bankruptcy in Fall 2011.
J. Trungale, President and Chief Executive Officer of Perkins &
Marie Callender's Inc., said, "The filing of the Plan and the
Disclosure Statement marks a significant step in our restructuring
process and fulfills an important commitment under our
Restructuring Support Agreement. We look forward to continuing to
progress our restructuring process with the support of our secured
and unsecured noteholders. As always, our employees, customers,
suppliers and other supporters have been instrumental in our
ability to achieve this important milestone, and we deeply
appreciate their support."
The Company expects to emerge from its financial restructuring in
a significantly strengthened financial position. Pursuant to the
proposed Plan, the Company's secured noteholders will receive new
secured term loans. The proposed Plan also contemplates that the
Company's unsecured noteholders will receive equity in the
reorganized Company, and the Company's general unsecured creditors
will be entitled to elect to receive either cash or equity in the
reorganized Company. In addition, the Plan provides that the
Company will obtain exit financing in an amount of up to $35
million to finance its operations after the Company exits chapter
11, which will replace the Company's current $21 million Debtor-
in-Possession credit facility. During its restructuring, the
Company will continue the process of reviewing its leases and
business contracts and identifying underperforming restaurant
locations through store level analyses of historical performance,
local market conditions and cost structure.
As part of this process, the Company anticipates holding a hearing
on the adequacy of the Disclosure Statement in August 2011. After
receiving approval of its Disclosure Statement, the Company
expects to solicit approval of the Plan by the necessary classes
of creditors and hold a confirmation hearing on the Plan.
About Perkins & Marie Callender's
Based in Memphis, Tennessee, Perkins & Marie Callender's Inc., fka
The Restaurant Company, is the owner or franchiser of nearly 600
family-dining restaurants, the Perkins Restaurants and Marie
Callender's. Perkins & Marie and several affiliates filed for
Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11795) on
June 13, 2011. Perkins & Marie disclosed $290 million in assets
and $441 million in debt as of the Chapter 11 filing.
Judge Kevin Gross presides over the case. Robert S. Brady, Esq.,
and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt &
Taylor, LLP; and Mitchel H. Perkiel, Esq., Hollace T. Cohen, Esq.,
and Brett D. Goodman, Esq., at Troutman Sanders, LLP, serve as
bankruptcy counsel. The Debtors' financial advisors are Whitby,
Santarlasci & Company. Their claims agent is Omni Management
Group, LLC.
DIP lender Wells Fargo is represented by lawyers at Paul,
Hastings, Janofsky & Walker LLP.
Roberta A. Deangelis, U.S.s Trustee for Region 3, appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors in the Debtors' cases.
PETTERS COMPANY: Consents to PBE's Cash Collateral Use
------------------------------------------------------
Douglas Kelley, as Chapter 11 trustee of Petters Company, Inc., et
al., seeks authority from the U.S. Bankruptcy Court for District
of Minnesota to enter into an agreement with the Chapter 7 trustee
of PBE Corporation, fka Polaroid Corp., et al., for use of cash
collateral in which PCI claims an interest pursuant to Sections
361 and 363 of the Bankruptcy Code.
The Chapter 11 Trustee further seeks a final order authorizing the
Cash Collateral Agreement through and including Dec. 31, 2011,
subject to the terms and adequate protection to be agreed on by
PCI and PBE.
PBE is subject to specified obligations that are owed and secured
to PCI, among others, in an amount in excess of $40 million in the
aggregate, under note and loan documents executed by Thomas J.
Petters on behalf of Polaroid-affiliated entities.
The adequate protection proposed by the PBE Debtors will: (i)
grant PCI replacement liens in certain assets, provided that any
and all such replacement liens will be of the same nature,
character, validity, priority, dignity, extent and effect as the
preposition liens PCI had, if any, in cash collateral and will be
without prejudice to the rights of the PBE Chapter 7 Trustee or
any other party in interest to challenge the nature, character,
validity, priority, dignity, extent and effect of any such liens
or commence any proceeding under the Bankruptcy Code seeking a
determination with respect thereto or seeking to avoid or set
aside any such liens or to subordinate or recharacterize any
claims; (ii) maintain segregated accounts and/or books of account
for all items of cash constituting cash collateral and items of
cash not constituting cash collateral; and (iii) provide PCI
copies of those financial or operating reports as filed with the
Office of the U.S. Trustee.
The Chapter 11 Trustee believes that the PBE Trustee's requested
use of cash collateral is in the best interests of PCI.
John R. Stoebner, as the PBE Chapter 7 Trustee, has filed in the
bankruptcy court presiding over PBE's bankruptcy proceedings a
similar motion for authority to use cash collateral in which PCI
has an interest.
About Petters Group
Based in Minnetonka, Minn., Petters Group Worldwide LLC is a
collection of some 20 companies, most of which make and market
consumer products. It also works with existing brands through
licensing agreements to further extend those brands into new
product lines and markets. Holdings include Fingerhut (consumer
products via its catalog and Web site), SoniqCast (maker of
portable, WiFi MP3 devices), leading instant film and camera
company Polaroid (purchased for $426 million in 2005), Sun Country
Airlines (acquired in 2006), and Enable Holdings (online
marketplace and auction for consumers and manufacturers' overstock
inventory). Founder and chairman Tom Petters formed the company
in 1988.
Petters Company, Inc., is the financing and capital-raising unit
of Petters Group Worldwide.
Thomas Petters, the founder and former CEO of Petters Group, has
been indicted and a criminal proceeding against him is proceeding
in the U.S. District Court for the District of Minnesota.
Petters Company, Petters Group Worldwide and eight other
affiliates filed separate petitions for Chapter 11 protection
(Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. James
A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the
Debtors as counsel. In its petition, Petters Company estimated
its debts at $500 million and $1 billion. Parent Petters Group
Worldwide estimated its debts at not more than $50,000.
Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing
business as Sun Country Airlines, Inc., and MN Airline Holdings,
Inc., filed separate petitions for Chapter 11 bankruptcy
protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and
08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned
unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun
Country's parent company.
PLATINUM STUDIOS: Board Accepts Resignation of CFO L. White
-----------------------------------------------------------
The Board of Directors of Platinum Studios, Inc., on July 12,
2011, accepted the resignation of Lawrence "Larry" White as the
Company's Interim Chief/Principal Financial Officer. Mr. White's
resignation was not the result of any disagreements, of any kind,
with the Company.
About Platinum Studios
Los Angeles, Calif.-based Platinum Studios, Inc., controls a
library consisting of more than 5,000 characters and is engaged
principally as a comics-based entertainment company adapting
characters and storylines for production in film, television,
publishing and all other media.
The Company reported a net loss of $9.94 million on $2.27 million
of revenue for the year ended Dec. 31, 2010, compared with a net
loss of $3.38 million on $292,940 of revenue during the prior
year.
The Company's balance sheet at March 31, 2011, showed
$10.34 million in total assets, $27.63 million in total
liabilities, all current, and a $17.29 million total shareholders'
deficit.
The Company is also delinquent in payment of $120,026 for payroll
taxes as of March 31, 2011, and in default of certain of its short
term notes payable. These matters raise substantial doubt about
the Company's ability to continue as a going concern.
As reported by the TCR on April 21, 2011, HJ Associates &
Consultants, LLP, in Salt Lake City, Utah, 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 suffered recurring losses from
operations which have resulted in an accumulated deficit.
QUANTUM FUEL: Feels the Heat as Maturities Loom
-----------------------------------------------
Dow Jones' DBR Small Cap reports that Quantum Fuel Systems
Technologies Worldwide Inc. is staring at imminent maturities and
needs to raise capital, refinance its debt or secure another
maturity extension in coming weeks to avoid a default, the company
said, as its wind, solar and clean automotive drive-train
businesses aren't yet generating enough cash.
About Quantum Fuel
Based in Irvine, California, Quantum Fuel Systems Technologies
Worldwide, Inc., is a fully integrated alternative energy company
and considers itself a leader in the development and production of
advanced clean propulsion systems and renewable energy generation
systems and services.
Quantum Fuel and its senior lender, WB QT, LLC, entered into a
Ninth Amendment to Credit Agreement and a Forbearance Agreement on
Jan. 3, 2011. The Senior Lender agreed to provide the Company
with a $5.0 million non-revolving line of credit, which may be
drawn upon at any time prior to April 30, 2011. Advances under
the New Line of Credit do not bear interest -- unless an event of
default occurs, in which case the interest rate would be 10% per
annum -- and mature on April 30, 2011. The Senior Lender also
agreed to forbear from accelerating the maturity date for any
portion of the Senior Debt Amount and from exercising any of its
rights and remedies with respect to the Senior Debt Amount until
April 30, 2011.
The Company reported a net loss attributable to stockholders of
$11.03 million on $20.27 million of total revenue for the year
ended Apri1 30, 2011, compared with a net loss attributable to
stockholders of $46.29 million on $9.60 million of total revenue
during the prior year.
The Company's balance sheet at April 30, 2011, $71.97 million in
total assets, $33.39 million in total liabilities and $38.57
million in total equity.
Ernst & Young LLP, in Orange County, California, noted that
Quantum Fuel's recurring losses and negative cash flows combined
with the Company's existing sources of liquidity and other
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
Possible Bankruptcy
The Company anticipates that it will need to raise a significant
amount of debt or equity capital in the near future in order to
repay certain obligations owed to the Company's senior secured
lender when they mature. As of June 15, 2011, the total amount
owing to the Company's senior secured lender was approximately
$15.5 million, which includes approximately $12.5 million of
principal and interest due under three convertible promissory
notes that are scheduled to mature on Aug. 31, 2011, and a $3.0
million term note that is potentially payable in cash upon demand
beginning on Aug. 1, 2011, if the Company's stock is below $10.00
at the time demand for payment is made. If the Company is unable
to raise sufficient capital to repay these obligations at maturity
and the Company is otherwise unable to extend the maturity dates
or refinance these obligations, the Company would be in default.
The Company said it cannot provide any assurances that it will be
able to raise the necessary amount of capital to repay these
obligations or that it will be able to extend the maturity dates
or otherwise refinance these obligations. Upon a default, the
Company's senior secured lender would have the right to exercise
its rights and remedies to collect, which would include
foreclosing on the Company's assets. Accordingly, a default would
have a material adverse effect on the Company's business and, if
the Company's senior secured lender exercises its rights and
remedies, the Company would likely be forced to seek bankruptcy
protection.
R&G FINANCIAL: Wants Solicitation Exclusivity Until Oct. 31
-----------------------------------------------------------
BankruptcyData.com reports that R&G Financial filed with the U.S.
Bankruptcy Court a motion to extend the exclusive period during
which the Company can solicit acceptances for its Plan of
Reorganization through and including Oct. 31, 2011.
On June 3, 2011, the Court scheduled an Aug. 16, 2011, hearing to
consider the Company's Disclosure Statement. Without the
extension currently requested, the Company's exclusivity would
expire on July 31, 2011: two weeks prior to the Disclosure
Statement hearing date.
About R&G Financial
San Juan, Puerto Rico-based R&G Financial Corporation was the
direct parent of R-G Premier Bank of Puerto Rico, a state-
chartered nonmember bank, through which RGFC primarily conducted
its business. The Company filed for Chapter 11 bankruptcy
protection (Bankr. D. P.R. Case No. 10-04124) on May 14, 2010.
Brent R. McIlwain, Esq., Robert W. Jones, Esq., Esq., at Patton
Boggs LLP, in Dallas; and Jorge I. Peirats, Esq., at Pietrantoni,
Mendez & Alvarez, in Hato Rey, P.R., serve as the Debtor's
bankruptcy counsel. The Debtor disclosed US$40,213,356 in assets
and US$420,687,694 in debts as of the Petition Date.
RANCHO HOUSING: Trustee Wants Snell & Wilmer Employment Denied
--------------------------------------------------------------
Peter C. Anderson, the U.S. Trustee, asks the U.S. Bankruptcy
Court for the Central District of California disapprove the
employment of Snell & Wilmer, LLP as general insolvency counsel
for Rancho Housing Alliance, Inc.
The U.S. Trustee explains that the application fails to provide an
adequate statement of disinterestedness in compliance with Federal
Rule of Bankruptcy Procedure 2014.
According to the application, the firm's engagement agreement with
the Debtor called for a prepetition retainer of $50,000 which was
funded by DACE, a related, non-debtor entity. The application
fails to describe whether the $50,000 is gift or a loan, and if a
loan, the repayment terms.
The application is also silent concerning what date the firm seeks
to make its employment effective.
In the conclusion section of the application, the firm requests
that the Court issue an order approving the firm's employment as
general insolvency counsel and labor and employment counsel. This
appears to be a typographical error, however the U.S. Trustee
seeks clarification of the intended scope of the firm's
employment.
The U.S. Trustee is represented by:
Kelly L. Morrison, Esq.
UNITED STATES DEPARTMENT OF JUSTICE
Office of the U.S. Trustee
3685 Main Street, Suite 300
Riverside, CA 92501
Tel: (951) 276-6990
Fax: (951) 276-6973
E-mail: Kelly.L.Morrison@usdoj.gov
As reported in the Troubled Company Reporter on June 30, 2011, as
the Debtor's general insolvency counsel, Snell & Wilmer will,
among other things:
(a) advise and assist the Debtor in evaluating this
Chapter 11 case and complying with the requirements
of the Bankruptcy Code and the Office of the United
States Trustee;
(b) advise the Debtor regarding matters of bankruptcy law,
including rights and remedies of the Debtor with regard
to the estate, its assets, and the claims of creditors;
(c) consult with the Debtor concerning the administration
Of the case;
(d) make any court appearances on behalf of, and to represent
the Debtor in any proceedings or hearings in the
Bankruptcy Court and any other court where the rights of
the Debtor may be litigated or affected; and
(e) conduct examinations of witnesses, claimants or adverse
parties and to prepare and assist in the preparation of
reports, accounts and pleadings related to this
Chapter 11 case.
The firm will be paid on its regular hourly rates:
Attorneys 2011 Rates
--------- ----------
Michael B. Reynolds $515
Robert C. Briseno $330
Paralegals 2011 Rates
---------- ----------
Heather S. Lourick $230
The firm may utilize professionals in its California or other
offices as needed to expedite and facilitate the handling of
matters on behalf of the Debtor. These professionals will bill at
their standard rates, which range between $150 and $700 per hour.
The firm's engagement agreement with the Debtor called for a pre-
petition retainer of $50,000, which was funded by DACE. Prior to
the filing of the bankruptcy petition, the firm drew down on the
retainer to cover pre-petition fees and costs in the amount of
$28,227, leaving a retainer balance of $21,873.
Michael B. Reynolds, Esq., of Snell & Wilmer L.L.P., assured the
Court that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
About Rancho Housing
Based in Coachella, California, Rancho Housing Alliance, Inc.,
filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No.
11-27519) on May 27, 2011. Judge Scott C. Clarkson presides over
the case. Michael B. Reynolds, Esq., at Snell & Wilmer LLP,
serves as the Debtor's counsel. The Debtor scheduled $12,882,123
in total assets and $22,404,858 in total liabilities.
RANCHO HOUSING: Files New List of Largest Unsecured Creditors
-------------------------------------------------------------
Rancho Housing Alliance, Inc., filed with the U.S. Bankruptcy
Court for the Central District of California a new list of its
largest unsecured creditors, disclosing:
Name of Creditor Nature of Claim Amount of Claim
---------------- --------------- ---------------
Desert Alliance for Loan $720,000
Community Empowerment
53-990 Enterprise Way, Suite 1
Coachella, CA 92236
California Housing & Loan $168,121
Community Development
Department
Quality Pacific Construction Trade Debt $67,352
MLC Construction Trade Debt $34,482
Martin Enterprises Trade Debt $17,054
Construction, Inc.
Associates Landscape Trade Debt $10,700
JWB Development, Inc. Trade Debt $9,322
Pacific Coast Home Trade Debt $9,050
Solutions
Environmental Klean Up Trade Debt $7,500
Masters Environmental Trade Debt $5,020
AICCO/ISU-CPI Insurance Trade Debt $4,815
Custom System Technology Trade Debt $2,791
Primavera Air Trade Debt $1,950
GDub Plumbing, Inc. Trade Debt $741
Duran's Termite and Pest Trade Debt $452
Control
Pedro Lopez Trade Debt $400
Americap Construction Inc. Trade Debt $275
Maria Ayala Avila Trade Debt $105
Based in Coachella, California, Rancho Housing Alliance, Inc.,
filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No.
11-27519) on May 27, 2011. Judge Scott C. Clarkson presides over
the case. Michael B. Reynolds, Esq., at Snell & Wilmer LLP,
serves as the Debtor's counsel. The Debtor disclosed $12,882,123
in assets and $22,404,858 in liabilities as of the Chapter 11
filing.
RCC SOUTH: Can Continue Using Cash Collateral Thru July 31
----------------------------------------------------------
Judge Sarah S. Curley, upon consideration of the agreement between
RCC South, LLC, and SFI Belmont LLC, as successor-in-interest to
iStar FM Loans LLC, has granted the Debtor permission to continue
using Belmont's cash collateral pursuant to the terms of the
Oct. 1, 2010 Cash Collateral Order and pursuant to a prepared
budget, through and including July 31, 2011.
The Debtor is to immediately turn over to Belmont all funds in a
reserve account in excess of $300,000.
Belmont has agreed to hold the Reserve Account Funds in a
segregated account and, in its sole discretion, to make Reserve
Account Funds available to the Debtor for use for tenant
improvements, leasing commissions or any other expenses approved
by Belmont. After August 22, 2011, Belmont will no longer be
required to hold the Reserve Account Funds in a segregated account
and may instead hold or apply the Funds in its sole discretion.
On a monthly basis, in addition to the adequate protection and
other payments required to be paid by the Debtor to Belmont
pursuant to the October 2010 Cash Collateral Order, the Debtor
will pay to Belmont any funds Reserve Account Funds in excess of
$300,000 so that during the remaining term of the Cash Collateral
Order, as modified by this order dated June 28, 2011, the amount
in the Reserve Account will not exceed $300,000.
In the event of any dispute between Belmont and the Debtor with
respect to use of the Reserve Account Funds, Belmont or the Debtor
may submit that dispute to the U.S. Bankruptcy Court for the
District of Arizona.
The Debtor is represented by:
John J. Hebert, Esq.
POLSINELLI SHUGHART PC
CityScape Plaza
One E. Washington, Suite 1200
Phoenix, AZ 85004
Tel: (602) 650-2011
Fax: (602) 264-7033
E-mail: jhebert@polsinelli.com
Belmont is represented by:
Susan G. Boswell, Esq.
Elizabeth S. Fella, Esq.
QUARLES & BRADY, LLP
One South Church Avenue, Suite 1700
Tucson, AZ, 85701-1621
Tel: (520) 770-8713
(520) 770-8755
E-mail: susan.boswell@quarles.com
elizabeth.fella@quarles.com
Scottsdale, Arizona-based RCC South, LLC, filed for Chapter 11
bankruptcy protection (Bankr. D. Ariz. Case No. 10-23475) on July
27, 2010. The Debtor estimated its assets and debts at $50
million to $100 million as of the Petition Date.
ROBERTS LAND: Court Approves Wendell Wheeler as Accountant
----------------------------------------------------------
The Hon. Paul M. Glenn of the U.S. Bankruptcy Court for the Middle
District of Florida authorized Roberts Land & Timber Investment
Corp. to employ Wendell W. Wheeler CPA as accountant.
The firm will render in this case are principally bankruptcy
related, including the possible development and implementation of
a projected budget, preparation of tax returns and any require
financial report and other accounting services as necessary.
Papers filed with the Court did not show Mr. Wheeler's
compensation rate.
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Lake City, Florida-based Union Land & Timber Corp. and affiliate
Roberts Land & Timber Investment Corp. filed for Chapter 11
bankruptcy (Bankr. M.D. Fla. Case Nos. 11-03853 and 11-03851) on
May 25, 2011. Judge Paul M. Glenn presides over the cases.
Andrew J. Decker, III, Esq., at The Decker Law Firm, P.A., serves
as bankruptcy counsel. The Debtor disclosed $2,376,170 in assets
and $11,945,819 in liabilities as of the Chapter 11 filing. The
petition was signed by Avery C. Roberts, president.
ROBERTS LAND: Court Approves Agreement with Community State Bank
----------------------------------------------------------------
Judge Paul M. Glenn of the U.S. Bankruptcy Court for the Middle
District of Florida, Jacksonville Division, approved the agreement
for adequate protection among Roberts Land & Timber Investment
Corp., Union Land & Timber Corp., and Community State Bank.
As previously reported by The Troubled Company Reporter on July 1,
2011, the Debtor sought approval of the agreement so that the
Debtor can retain certain real property with marginal equity but
significant future sales potential and make adequate payments to
the Bank.
Roberts is indebted to Community in accordance with a renewal
Promissory Note dated March 7, 2011, in the original principal
amount of $167,062. As of May 25, 2011, the balance owed by
Roberts to Community on said Promissory Note was $162,419.
The indebtedness owed by Roberts to Community is secured by a
collateral assignment of Notes and Mortgages with a fair market
value of $176,027. Roberts is currently collecting and servicing
these Notes and Mortgages as receivables it holds subject to
Community's security interest, according to Andrew J. Decker III,
Esq., at The Decker Law Firm, P.A., in Live Oak, Florida.
The security interest held by Community is entitled to adequate
protection pending the confirmation of the Debtor's Chapter 11
Plan of Reorganization, Mr. Decker tells the Court.
Pursuant to the Agreement, Roberts will pay Community $1,072 per
month commencing June 6, 2011, and on the 6th day of each month
thereafter, pending the confirmation of Roberts' Chapter 11 Plan.
Roberts may use the monthly monies received from the Notes and
Mortgages in excess of $1,072 in its business operations.
Roberts will also furnish Community monthly reports on the status
of payments made, resulting balances on the Notes and Mortgages
receivable and other information as Community may request.
The Agreement for Adequate Protection and Use of Cash Collateral
is without prejudice to Community's right to seek modification of
the terms including relief from the automatic stay as it may deem
appropriate in the event of a default by Roberts with respect to
the terms of the Agreement, Mr. Decker says.
About Roberts Land
Roberts Land & Timber Investment Corp. filed a Chapter 11 petition
(Bankr. M.D. Fla. Case No. 11-03851) in Jacksonville, Florida, on
May 25, 2011. Andrew J. Decker, III, Esq., at The Decker Law
Firm, P.A., in Live Oak, Florida, -- decklaw@windstream.net --
serves as counsel to the Debtor. Affiliate Union Land & Timber
Corp. also sought Chapter 11 protection (Case No. 11-03853).
Roberts Land is a real estate developer in north Florida. In its
schedules, the Debtor disclosed assets of $26.7 million with debt
totaling $12.2 million, all secured. The principal properties are
1,500 acres in Baker County, Florida and 3,300 acres in Union
County, Florida.
ROYAL HOSPITALITY: Harry Snyder Appointed as Bankruptcy Mediator
----------------------------------------------------------------
The Hon. Robert E. Littlefield, Jr. of the U.S. Bankruptcy Court
for the Northern District of New York appointed Harry Snyder, Esq.
as mediator in the bankruptcy case of Royal Hospitality LLC.
Royal Hospitality LLC, dba Comfort Suites, has been operating the
Comfort Suites in Lake George, New York since May 2007. It filed
for Chapter 11 protection (Bankr. N.D.N.Y. Case No. 10-13090) on
Aug. 19, 2010. The Debtor disclosed $13,432,001 in assets and
$11,154,770 in liabilities as of the Petition Date.
RUTHERFORD CONSTRUCTION: Motley's Auctions OK'd as Auctioneer
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Virginia
approved the amended motion of Rutherford Construction, Inc., to
employ Motley's Auctions, Inc. as auctioneer.
Motley's will sell by auction certain parcels of the Debtor's
real estate consisting of townhouse homes, unimproved developed
and partially developed single family dwelling house lots and
unimproved acreage tracts.
The fee to be charged by Motleys for conducting the auction and
for expenses for advertizing are:
-- buyers premium added to any third party bids consummated by
sale in the amount of 7% of the bid;
-- Motley's will pay advertising expenses approximately $15,000
provided the total bids at the auction to third parties that
are consummated total at least $1,000,000;
-- in the event there are bids of third parties that are
consummated by sales of at least $500,000, Motley's will pay
one-half of the advertising expenses of approximately
$7,500, with the remaining balance to be reimbursed to
Motley's from the pro rata sales proceeds of the parcels so
sold at the closing; and
-- Motley's my pay from the buyers premium a commission of 3%
to any cooperating brokers who pre-register and produce
third party bidders whose bids are consummated in a sale of
the property.
About Rutherford Construction, Inc.
Fishersville, Virginia-based, Rutherford Construction, Inc., filed
for Chapter 11 protection (Bankr. W.D. Va. Case No. 11-50346) on
March 15, 2011. George I. Vogel, II, Esq., at Vogel & Cromwell
represents the Debtor in its restructuring effort. The Debtor
disclosed $10,667,204 in assets and $15,282,384 in liabilities as
of the Chapter 11 filing.
W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, appointed
three members to the official committee of unsecured creditors in
the Debtor's cases.
RUTHERFORD CONSTRUCTION: Selling Personal Assets to Brittany Knoll
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Virginia
authorized Rutherford Construction, Inc., to sell certain tangible
personal property to Brittany Knoll, LLC, a related party of the
Debtor.
The assets for sale are:
-- a 2000 Chevrolet Silverado pickup truck for $6,000;
-- a 2006 Ford Ranger pickup truck for $3,000; and
-- a 1999 Toyota forklift for $2,500.
The sale is subject to any county personal property taxes assessed
against these items.
About Rutherford Construction, Inc.
Fishersville, Virginia-based, Rutherford Construction, Inc., filed
for Chapter 11 protection (Bankr. W.D. Va. Case No. 11-50346) on
March 15, 2011. George I. Vogel, II, Esq., at Vogel & Cromwell
represents the Debtor in its restructuring effort. The Debtor
disclosed $10,667,204 in assets and $15,282,384 in liabilities as
of the Chapter 11 filing.
W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, appointed
three members to the official committee of unsecured creditors in
the Debtor's cases.
SALPARE BAY: $750,000 DIP Loan Hearing Today
--------------------------------------------
The U.S. Bankruptcy Court District Of Oregon will convene a
hearing today, July 18, 2011, at 10:30 a.m., to consider Salpare
Bay LLC's request to obtain $750,000 postpetition credit from
Access Business Finance LLC.
Access asserts a first priority lien on the Debtor's real
property.
The Debtor added that it was unable to procure adequate
postpetition financing in the form of unsecured credit or
unsecured debt thus, the circumstances of the case require the
Debtor to obtain financing under Section 364(d) of the Bankruptcy
Code.
The Debtor and Harbor Investors, LLC are the owners of real
property on Hayden Island, Portland, Oregon, that was to be
developed into a luxury riverfront planned community of 204 high-
end residential water view condominium units commonly known as
Salpare Bay. The Debtor and Harbor own the project with an
undivided 85% and 15% interest, respectively, pursuant to a
Tenants in Common Agreement.
The Debtor also asked the Court for permission to:
a) perform its obligations under and utilize loan proceeds
according to the DIP Loan and the Settlement Agreement
approved by the Court by order entered June 13, 2011,
including but not limited to loan costs and fees associated
with the FHA loan as contemplated in the Settlement
Agreement and the Debtor's proposed Plan; and
b) grant a priming lien to Access to secure all obligations of
the Debtor under the DIP Loan.
The Debtor related that as part of the Settlement Agreement, the
parties agreed that the Debtor will commence development of the
property by first obtaining the DIP Loan with the maximum amount
of $500,000 (with leave to seek an additional $250,000) to prepare
the property for the development of a multifamily residential
project in two phases around the Marina, and second through an FHA
loan to commence construction on Phase I. The Debtor will develop
the property with three distinct sections, and to the extent
necessary, will partition the property into three separate
portions: (1) the Marina; (2) Phase I, and Phase II.
The Construction Claimants may consider an additional $250,000
advance under the priming DIP Loan upon receipt of a fully
executed commitment letter from a bank or other financial
institution agreeing to loan the Debtor the funds necessary to
construct Phase I of the Project.
The summary of the DIP Loan terms, included:
1. Access will make the DIP Loan to the Debtor in the principal
amount of $500,000, with an additional $250,000 advance if
approved, which advance will have the same security, lien
priority, and Section 364(e) protections as the DIP Loan and be
pursuant to a final order in form and substance acceptable to
Access.
2. The Debtor will use the proceeds of the DIP Loan to pay for
construction costs to complete parking for the Marina, soft and
construction costs related to the conversion of the condominium
project to apartments, and for professional fees incurred by
the Debtor in the bankruptcy case, plus an additional $250,000
advanced if authorized under the Settlement Agreement.
3. The term of the loan will be two years with interest only
monthly payments.
4. The DIP Loan shall bear interest at the rate of The Wall
Street Journal prime rate plus 10% floating daily.
5. An $8,000 application fee shall be paid to Access when the
DIP Loan is approved by the Bankruptcy Court, in addition to a
$3,500 nonrefundable fee that has already been paid by a
principal of the Debtor. The entire $11,500 fee is
nonrefundable and will be applied toward, but is not limited
to, the direct costs of reports, client review/visit by Access,
administration/setup, title fees, escrow and loan documentation
legal costs. T his fee will be credited against the Debtor's
costs at closing.
6. A loan fee of $37,500 is earned and payable upon loan
closing.
7. The DIP Loan will be secured by an allowed priming lien,
which will constitute a first deed of trust on the property to
which the Construction Claimants will subordinate their liens
and superior to all liens or interests in the Property except
for real estate taxes.
8. Access will provide a partial release on its first deed of
trust upon funding of the FHA Loan to complete Phase I of the
apartment construction and payment in full of all delinquent
real estate taxes on all Access collateral under the DIP Loan.
Such release will not include the Marina or Phase II of the
Project. Access will receive a super priority lien on client's
accounts into which the advances under the loan flow.
The Construction Claimants will receive a super priority lien on
the client's account in which the Marina rents flow.
About Salpare Bay
Vancouver, Washington-based Salpare Bay LLC operates a
condominium. Salpare Bay filed for Chapter 11 bankruptcy
protection (Bankr. D. Ore. Case No. 10-35333) on June 7, 2010.
Tara J. Schleicher, Esq., who has an office in Portland, Oregon,
represents the Debtor. The Company estimated assets and debts at
$10 million to $50 million.
A creditors committee has not been appointed in this case.
SEASON'S AT BIRDNEK: Schedules Filing Extended Until July 21
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
extended until July 21, 2011, The Season's at Birdnek Point, LLC's
time to file its schedules and statement of financial affairs.
The Debtor explained that its regular accountant has been on
vacation and will return July 12. Given the state of the Debtor's
books and records, the Debtor believes it advisable to have its
accountant review the schedules and statement of financial affairs
prior to their being filed.
Virginia Beach, Virginia-based, The Season's at Birdnek Point,
LLC, filed for Chapter 11 protection (Bankr. E.D. Va. Case No. 11-
72915) on June 26, 2011. Bankruptcy Judge Frank J. Santoro
presides over the case. John D. McIntyre, Esq., at Wilson &
Mcintyre, PLLC, represents the Debtor in its restructuring effort.
The Debtor estimated assets at $10 million to $50 million and
debts at $1 million to $10 million. The Debtor said that there
are no creditors that are insiders.
SEQUENOM INC: To Offer 4.0 Million Shares Under Incentive Plan
--------------------------------------------------------------
Sequenom, Inc., filed with the U.S. Securities and Exchange
Commission a Form S-8 registration statement registering 4.0
million shares of common stock issuable under the Company's 2006
Equity Incentive Plan. A full-text copy of the filing is
available for free at http://is.gd/cHIo6o
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
Sequenom reported a net loss of $120.85 million on $47.45 million
of total revenue for the year ended Dec. 31, 2010, compared with a
net loss of $71.01 million on $37.86 million of total revenue
during the prior year.
Ernst & Young LLP of San Diego, California, in its audit report
attached to the 2010 financial statements, did not include a going
concern qualification for Sequenom. E&Y, in its report on the
2009 results, expressed substantial doubt against Sequenom's
ability as a going concern, noting that the Company "has incurred
recurring operating losses and does not have sufficient working
capital to fund operations through 2010."
The Company's balance sheet at March 31, 2011, showed
$162.60 million in total assets, $21.08 million in total
liabilities, and $141.52 million in total stockholders' equity.
SHASTA LAKE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Shasta Lake Resorts, LP
aka houseboats.com
Jones Valley Resort
New Melones Lake Marina
Lake McClure Marinas
Sugarloaf Resort
Lakeview Resort
1110 West Kettleman Lane, #20B
Lodi, CA 95240
Bankruptcy Case No.: 11-37221
Chapter 11 Petition Date: July 13, 2011
Court: U.S. Bankruptcy Court
Eastern District of California (Sacramento)
Judge: Christopher M. Klein
Debtor's Counsel: Jamie P. Dreher, Esq.
DOWNEY BRAND LLP
621 Capitol Mall, 18th Floor
Sacramento, CA 95814
Tel: (916) 444-1000
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by David M. Smith, president of general
partner.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
William Hill Labor Commissioner $303,000
1770 Drendel Circle Claim
Paradise, CA 95969
Merced Irrigation - LM -- $224,729
9090 Lake McClure Road
Snelling, CA 95369
Relay Electric - NM -- $50,100
14923 Potato Ranch Road
Sonora, CA 95370
Umpqua Bank - SH -- $35,000
Jeffrey D. McKay Tort Claim $20,604
California Custom Docks -- $15,676
Reef World Headquarters -- $12,727
Interstate Battery System of -- $8,662
Redding
Battery Systems - Redding -- $4,640
Acme Rigging -- $4,128
Home Depot CRC - LM -- $4,118
Diversified Marine Products -- $3,982
Sysco Food Services - LM -- $3,974
Pacific Gas & Electric -- $3,405
Artic Glacier Inc. -- $2,850
West Coast Paper -- $2,811
Frozen Gourmet, Inc. - SH -- $2,762
Airgas NCN -- $2,541
Sacramento Magazines Corp. -- $2,275
Alside Supply - LM -- $2,143
SHILO INN: OneWest Bank Protests Use of Cash Collateral
-------------------------------------------------------
OneWest Bank FSB asks the U.S. Bankruptcy Court for the Central
District of California to prohibit Shilo Inn Killen LLC to use
cash collateral to pay management and franchise fees. The Bank
also asks the Court to order the Debtor to pay priority real
property taxes now due and owing and commence making adequate
protection payments from net operating income.
The Bank said it has a first priority lien on all of the Debtor's
assets. The Debtor has only one asset, which is the real property
located at 30 North Prom, Seaside Oregon 97139. The Bank has a
senior secured interest in all assets of the Debtor. The Debtor
said the value of the property is $21 million but the bank said
the property is most likely between $13 million and $14 million.
The Bank tells the Court that the Debtor's statement of value and
has serious doubts that the Debtor has any equity in the property
at all. The Bank adds that the Debtor has not made a regular
payment on its obligation since September 2009.
A hearing is set for July 19, 2011, at 11:30 a.m., to consider
final approval of the Debtor's request to use cash collateral.
Loraine L. Pedowitz, Esq., at Allen Matkins Leck Gamble Mallory &
Natsis LLP, represents the bank.
About Shilo Inn
Portland, Oregon-based Shilo Inn, Killeen, LLC, filed for
Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 10-62057) on
Dec. 6, 2010. David B. Golubchik, Esq., and John-Patrick M.
Fritz, Esq., Levene Neale Bender Rankin Et Al, serve as bankruptcy
counsel. The Debtor estimated its assets and debts at $10 million
to $50 million.
Affiliate Shilo Inn, Diamond Bar, LLC (Bankr. C.D. Calif. Case No.
10-60884) filed separate Chapter 11 petition on Nov. 29, 2010.
The case is jointly administered with Shilo Inn Killeen.
SIGNATURE STYLES: Wins Approval of New Sale, Financing Terms
------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Signature Styles LLC, which
owns the Newport News and Spiegel apparel retailers won a judge's
stamp of approval for financing and auction proposals it tweaked
after a firestorm of criticism from its unsecured creditors.
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.
Roberta A. DeAngelis, United States Trustee for Region 3,
appointed an official committee of unsecured creditors in the
case.
SIGNATURE STYLES: Spiegel Catalog Auction Set for Sept. 1
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the owner of the Spiegel catalog received
authorization by the bankruptcy judge on July 13 to hold a Sept. 1
auction to find out if the best offer for the business is indeed
from a fund associated with Patriarch Partners LLC, the owner and
lender through affiliated funds.
The bankruptcy court, according to the report, also gave final
approval for $5 million in financing from Patriarch.
Mr. Rochelle notes that the sale will come about a month later
than the company originally envisioned. Competing bids are due
Aug. 25. The hearing for approval of the sale is scheduled to
take place Sept. 7.
According to Mr. Rochelle, the purchase contract with Patriarch
was negotiated before the Chapter 11 filing June 6. The buyer
will assume specified debt, including $30 million on a term loan
and revolving credit. The buyer will also honor some customer
obligations. The bankruptcy judge gave the official creditors'
committee authority to search for a buyer with a better offer by
using confidential financial information. The committee had
opposed the proposed sale process, saying it was "half-hearted
window dressing intended to cloak Patriarch's efforts to cleanse
the debtors' balance sheet of unsecured indebtedness with the
appearance of fairness and equity." Originally, the contract with
Patriarch required approval of the sale by Aug. 4.
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.
Roberta A. DeAngelis, United States Trustee for Region 3,
appointed an official committee of unsecured creditors in the
case.
SOUTH EDGE: Court Approves Advantage Civil as Construction Manager
------------------------------------------------------------------
The Hon. Bruce A. Markell of the U.S. Bankruptcy Court for the
District of Nevada approved the request of Cynthia Nelson, Chapter
11 trustee of South Edge LLC, to retain Advantage Civil Design
Group LLP as construction manager.
The firm will provide construction management services and
consultation in connection with projects affecting property of the
estate.
The firm will charge the Debtors based on the hourly rates of its
professionals:
Clerical $70
Draftsman/Asst. Partner $85
Autocad Operator $95
Designer/Processor $105
Senior Designer/Planner $120
Engineer $140
Project Manager/Mapper $165
Engineer Manager $190
Construction Manager $190
Survey Crew $175
Principal $225
The Debtor assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About South Edge
Las Vegas, Nevada-based South Edge LLC owns the Inspirada project,
an uncompleted 2,000-acre residential development in Henderson,
Nevada, about 16 miles (26 kilometers) southeast of Las Vegas.
The eight owners of the project include an affiliate of KB Home, a
49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee
Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer
Homes USA Inc. with 2.6%.
JPMorgan Chase Bank, N.A., Credit Agricole Corporate and
Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary
chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968)
on Dec. 9, 2010, against South Edge, LLC. The petitioning
creditors are part of a lender group that provided a $595 million
credit. New York-based JPMorgan serves as lender and agent for
the group. South Edge filed motions to dismiss the involuntary
petition.
The Court conducted a contested trial on Jan. 24 and 25, 2011, and
Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order
for relief under Chapter 11 of the Bankruptcy Code against the
Debtor and issued an order directing the appointment of a chapter
11 trustee. The United States Trustee appointed Cynthia Nelson to
serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved
the appointment three days later.
South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff
and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel.
The Chapter 11 trustee also tapped Schwartzer & McPherson Law Firm
as local counsel.
Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo
Bank, N.A., are represented by lawyers at Morrison and Foerster
LLP; and Lewis and Roca LLP. Credit Agricole is represented by
lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury &
Standish.
SOUTH EDGE: Ch. 11 Trustee Wants Account and Info Turnover
----------------------------------------------------------
Cynthia Nelson, the chapter 11 trustee for the bankruptcy estate
of South Edge, LLC, seeks:
a) the turnover and delivery to the trustee of the Account
proceeds, plus all proceeds thereof and profits and interest
that may be earned thereon through the date of recovery, and
b) the disgorgement and turnover and delivery to the trustee of
all amounts withdrawn from the account, less any amounts
actually applied by South Edge towards Focus' contractual
obligations under the Operating Agreement and the
Forbearance Agreement by and among, inter alia, South Edge,
Focus and JPMorgan, dated May, 2008, to the extent the
payments are not otherwise replenished into the Account.
The trustee relates that as of June 1, 2011, Focus South Group,
LLC, held in its name more than $23 million in cash in an account
with JPMorgan Chase Bank, N.A. The funds presently in the Account
constitute the remaining balance of a mandatory capital
contribution to South Edge of over $30.9 million made to the
limited liability company by its equity member Focus during the
fourth quarter of 2007, plus all prepetition and postpetition
proceeds of and profits and interest earned on the Focus MI
Deposit, and less certain withdrawals made from the Account.
In addition, the trustee seeks, inter alia:
-- turnover of any and all information, including books,
documents, records, papers, and electronic mail or other
forms of correspondence relating to the Debtor's property or
financial affairs, against defendant Focus or defendant
Holdings Manager, LLC (Focus manager);
-- money damages for material breach of contract and gross
negligence against defendant Focus Manager, an affiliate of
Focus obligated contractually and as a fiduciary to act as
the General Manager of the South Edge limited liability
company, in connection with Focus Manager's failure to
maintain the Account in accordance with the terms of the
Operating Agreement, in an amount to be determined at trial;
and
-- a declaratory judgment that:
i) proceeds of the Account are an asset of the estate;
ii) the exercise of dominion and control over the Account by
Focus constitutes a violation of the Bankruptcy Court's
automatic stay under Section 362 of the Bankruptcy Code;
and
iii) subject to any rights in the cash in the Account held by
the Agent under that certain Amended and Restated Credit
Agreement dated as of March 9, 2007, among the Debtor, as
borrower, JPMorgan, as administrative agent, the lenders
party thereto, and The Royal Bank of Scotland PLC, as
Syndication Agent, and subject to sections 361 and 363 of
the Bankruptcy Code, the trustee is vested with ownership
and the right to use, in the exercise of the trustee's
good faith judgment and discretion for the benefit of the
estate, the cash in the Account, the money damages
awarded to and recovered by the Trustee, and the property
disgorged and turned over or otherwise awarded to the
Trustee regarding amounts improperly withdrawn from the
Account.
The Chapter 11 trustee is represented by:
Robert J. Moore, Esq
Linda Dakin-Grimm, Esq
Anat Sideman, Esq.
David B. Zolkin, Esq.
MILBANK, TWEED, HADLEY & McCLOY LLP
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Tel: (213) 892-4000
Fax: (213) 629-5063
Lenard E. Schwartzer, Esq.
Jeanette E. McPherson, Esq.
SCHWARTZER & MCPHERSON LAW FIRM
2850 South Jones Boulevard, Suite 1
Las Vegas, NV 89146-5308
Tel: (702) 228-7590
Fax: (702) 892-0122
E-mail: bkfilings@s-mlaw.com
About South Edge
Las Vegas, Nevada-based South Edge LLC owns the Inspirada project,
an uncompleted 2,000-acre residential development in Henderson,
Nevada, about 16 miles (26 kilometers) southeast of Las Vegas.
The eight owners of the project include an affiliate of KB Home, a
49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee
Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer
Homes USA Inc. with 2.6%.
JPMorgan Chase Bank, N.A., Credit Agricole Corporate and
Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary
chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968)
on Dec. 9, 2010, against South Edge, LLC. The petitioning
creditors are part of a lender group that provided a $595 million
credit. New York-based JPMorgan serves as lender and agent for
the group. South Edge filed motions to dismiss the involuntary
petition.
The Court conducted a contested trial on Jan. 24 and 25, 2011, and
Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order
for relief under Chapter 11 of the Bankruptcy Code against the
Debtor and issued an order directing the appointment of a chapter
11 trustee. The United States Trustee appointed Cynthia Nelson to
serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved
the appointment three days later.
South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff
and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel.
The Chapter 11 trustee also tapped Schwartzer & McPherson Law Firm
as local counsel.
Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo
Bank, N.A., are represented by lawyers at Morrison and Foerster
LLP; and Lewis and Roca LLP. Credit Agricole is represented by
lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury &
Standish.
SOVRAN LLC: Files Schedules of Assets & Liabilities
---------------------------------------------------
Cargo Transportation Services, Inc. with the U.S. Bankruptcy Court
for the Middle District of Florida, its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------- -----------
A. Real Property $18,945,000
B. Personal Property $23,289
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $5,798,312
E. Creditors Holding
Unsecured Priority
Claims $0.00
F. Creditors Holding
Unsecured Non-priority
Claims $5,821,138
----------- --------------
TOTAL $18,968,289 $11,619,450
Sovran LLC, filed a Chapter 11 petition (Bankr. W.D. Wash. Case
No. 11-45107) on June 23, 2011. Richard G. Birinyi, Esq., at
Bullivant Houser Bailey PC, in Seattle, Washington, serves as
counsel.
SOVRAN LLC: Meeting of Creditors on Aug. 11
-------------------------------------------
A meeting of creditors of Sovran LLC will be held on Aug. 11, 2011
at 1:00 p.m. The meeting will be at:
Courtroom J,
Union Station,
1717 Pacific Avenue,
Tacoma, WA 98402
The creditors of Sovran LLC are required to file their proofs of
debt by Oct. 7, 2011.
Sovran LLC, filed a Chapter 11 petition (Bankr. W.D. Wash. Case
No. 11-45107) on June 23, 2011. Richard G. Birinyi, Esq., at
Bullivant Houser Bailey PC, in Seattle, Washington, serves as
counsel. In its schedules, the Debtor disclosed $18,968,289 in
assets and $11,619,450 in liabilities.
SUMMIT BANK: Closed; The Foothills Bank Assumes All Deposits
------------------------------------------------------------
Summit Bank of Prescott, Ariz., was closed on Friday, July 15,
2011, by the Arizona Department of Financial Institutions, which
appointed the Federal Deposit Insurance Corporation as receiver.
To protect the depositors, the FDIC entered into a purchase and
assumption agreement with The Foothills Bank of Yuma, Ariz., to
assume all of the deposits of Summit Bank.
The sole branch of Summit Bank will reopen during normal banking
hours as a branch of The Foothills Bank. Depositors of Summit
Bank will automatically become depositors of The Foothills Bank.
Deposits will continue to be insured by the FDIC, so there is no
need for customers to change their banking relationship in order
to retain their deposit insurance coverage up to applicable
limits. Customers of Summit Bank should continue to use their
existing branch until they receive notice from The Foothills Bank
that it has completed systems changes to allow other The Foothills
Bank branches to process their accounts as well.
As of March 31, 2011, Summit Bank had around $72.0 million in
total assets and $66.4 million in total deposits. The Foothills
Bank will pay the FDIC a premium of 0.25% to assume all of the
deposits of Summit Bank. In addition to assuming all of the
deposits of the failed bank, The Foothills Bank agreed to purchase
essentially all of the assets.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-895-0586. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/summitbank.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $11.3 million. Compared to other alternatives, The
Foothills Bank's acquisition was the least costly resolution for
the FDIC's DIF. Summit Bank is the 55th FDIC-insured institution
to fail in the nation this year, and the second in Arizona. The
last FDIC-insured institution closed in the state was Legacy Bank,
Scottsdale, on January 7, 2011.
SUNRISE REAL ESTATE: Extends Closing Date of Better Time Pact
-------------------------------------------------------------
Sunrise Real Estate Group, Inc., Sunrise Real Estate Development
Group, Inc., entered into a Share Purchase Agreement with Better
Time International to issue 2,500,000 shares to Better Time for
US$500,000. This agreement, subject to standard closing terms and
conditions, was scheduled to close on or before March 20, 2011.
On March 16, 2011, Sunrise and Better Time agreed to extend the
scheduled closing date of the Share Purchase Agreement, subject to
standard closing terms and conditions, to on or before July 1,
2011. All other terms and conditions of the Share Purchase
Agreement remain unchanged and in full force and effect.
On July 1, 2011, Sunrise and Better Time agreed to extend the
scheduled closing date of the Share Purchase Agreement, subject to
standard closing terms and conditions, to on or before
Sept. 30, 2011. All other terms and conditions of the Share
Purchase Agreement remain unchanged and in full force and effect.
About Sunrise Real
Headquartered in Shanghai, the People's Republic of China, Sunrise
Real Estate Group, Inc. was initially incorporated in Texas on
Oct. 10, 1996, under the name of Parallax Entertainment, Inc.
On Dec. 12, 2003, Parallax changed its name to Sunrise Real
Estate Development Group, Inc. On April 25, 2006, Sunrise Estate
Development Group, Inc. filed Articles of Amendment with the Texas
Secretary of State, changing the name of Sunrise Real Estate
Development Group, Inc. to Sunrise Real Estate Group, Inc.,
effective from May 23, 2006.
The Company and its subsidiaries are engaged in the property
brokerage services, real estate marketing services, property
leasing services and property management services in China.
The Company reported a net loss of US$25,487 on US$12.82 million
of net revenues for the year ended Dec. 31, 2010, compared with
net income of US$3.27 million on US$13.11 million of net revenues
during the prior year.
The Company's balance sheet at March 31, 2011, showed US$21.11
million in total assets, US$24.17 million in total liabilities,
US$1.32 million in non-controlling interest of consolidated
subsidiaries and a US$4.38 million total shareholders' deficit.
Going Concern
The Company has accumulated losses of $9,718,291 for the year
ended March 31, 2011. The Company's net working capital
deficiency and significant accumulated losses raise substantial
doubt about its ability to continue as a going concern.
However, management believes that the Company is able to generate
sufficient cash flow to meet its obligations on a timely basis and
ultimately to attain successful operations in respect of the
agency sales and property management operations.
As reported by the TCR on April 21, 2011, Kenne Ruan, CPA, P.C.,
in Woodbridge, CT, USA, noted that the Company has significant
accumulated losses from operations and has a net capital
deficiency that raise substantial doubt about its ability to
continue as a going concern.
SWISS CHALET: Taps Luis R. Carraquillo as Financial Consultant
--------------------------------------------------------------
The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court
for the District of Puerto Rico authorized The Swiss Chalet Inc.,
to employ Luis R. Carraquillo & Co., PSC.
The firm is assisting the Debtor in the financial restructuring of
its affairs by providing advice in strategic planning and the
preparation of the Debtor's plan of reorganization and disclosure
statement, determination of the Debtor's assets and participating
in the Debtor's negotiations with creditors and parties-in-
interest.
Luis R. Carrasquillo Ruis, CPA, tells the Court that the Debtor
has retained Carrasquillo on the basis of $50,000 advance by the
Debtor. The compensation promised will be from the Debtor's funds
and from such funds as may be available to the Debtor from third
parties and to which the Debtor may be legally entitled.
The hourly rates of the firm's personnel are:
CPA Luis R. Carrasquillo, partner $150
CPA Marcelo Gutierrez, senior CPA $125
CPA Myris Acosta, senior CPA $100
CPA Michelle Batile, senior CPA and
tax specialist $85
Other CPA's $90 - $100
Carmen Callejas, senior accountant $70
Joel Torres Sanchez, tax specialist $70
Sandra Zavala Diaz, junior accountant $45
Administrative personnel $35
To the best of the Debtor's knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached at:
28th Street, No. TI-26
Turabo Gardens Avenue
Caguas, PR 00725
Tel: (787) 746-4555
(787) 746-4556
Fax: (787) 746-4564
E-mail: luis@carrasquillo.com
About The Swiss Chalet Inc.
The Swiss Chalet Inc., which owns the Best Western Hotel Pierre in
San Juan, Puerto Rico, filed a Chapter 11 petition (Bankr. D. P.R.
Case No. 11-04414) on May 27, 2011. Charles A. Cuprill, P.S.C.
Law Offices serves as its bankruptcy counsel. CPA Luis R.
Carrasquillo & Co., P.S.C., serves as its financial consultants.
In its Schedules, the Debtor disclosed total assets of
$118,521,510 and total debts of $132,741,094. The petition was
signed by Arnold Benus, director.
SWISS CHALET: Court Approves Cash Collateral Agreement with CPG/GS
------------------------------------------------------------------
Judge Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court for
the District of Puerto Rico approved the agreement with CPG/GS PR
NPL LLC for Swiss Chalet Inc.'s continued use of cash collateral
subject to adequate protection.
As previously reported by The Troubled Company Reporter on
June 22, 2011, CPG/GS asked the Court to prohibit the Debtor from
using its cash collateral without providing adequate protection.
After substantial negotiations, the Debtor and CPG/GS agreed to
the stipulation whereby, among other things, CPG/GS consents to
the Debtor's limited use of certain cash collateral securing the
Debtor's indebtedness to CPG/GS to satisfy certain operating
expenses until August 31, 2011.
CPG/GS is purchaser and successor in interest of certain assets of
First Bank Puerto Rico, including, among others, credit facilities
pursuant to the loans of approximately $119 million.
According to the Debtor's counsel, Charles A. Cuprill, Esq., at
Charles A. Cuprill, P.S.C. Law Offices, in San Juan, Puerto Rico
-- ccuprill@cuprill.com -- the Debtor has no debtor-in-possession
financing and, thus, requires the use of cash collateral to
satisfy operating expenses pending the approval and consummation
of the sale of certain assets; the operation of the DoubleTree
Hotel; and other approved expenses.
As adequate protection to CPG/GS, Debtor will make monthly
payments to CPG/GS, to be paid on the first day of each calendar
month, from the cash, receivables collections, and other revenues
received by Debtor during the previous month from Debtor's
consolidated operations in excess of its consolidated operating
costs. The Debtor countered that CPG/GS is adequately protected
in the Debtor's use of receivables considering CPG/GS's
encumbrances on the Debtor's assets principally real property, the
pertinent portion of which are well maintained and in excellent
condition, with the taxes relative thereto being current, as well
as the insurance thereon.
CPG/GS and Debtor recognize that there are certain expenses at
Atlantis and Gallery Plaza, like insurance costs, maintenance,
utilities, and others necessary for the maintenance of the
Collateral, which are partially paid from the income generated
from the operations of the DoubleTree Hotel. Therefore, the
monthly payments to be made by Debtor to CPG/GS as adequate
protection will be the lesser of $75,000, or the difference
between the total monthly income generated by Debtor's
consolidated operations less Debtor's consolidated operating
costs for the same month. These payments will be applied to the
principal balance of CPG/GS secured claim without prejudice to
reapplication of those payments to interest and other charges as
permitted by the Bankruptcy Code if and when the value of CPG/GS'
collateral is determined.
As further adequate protection, the Debtor grants CPG/GS:
-- a replacement lien and a postpetition security interest on
all of the assets and Collateral acquired by Debtor after
the Petition Date;
-- a super-priority claim in an amount equal to any diminution
in value of the prepetition Collateral;
As additional adequate protection, Debtor will:
-- permit designated agents of CPG/GS to visit the premises of
the DoubleTree Hotel, Gallery Plaza and Atlantis
Condominiums Hotel and make available to them all of
Debtor's books and records, for the purpose of inspecting
and auditing the operations of each of the DoubleTree,
Gallery Plaza and Atlantis Condominium;
-- submit to CPG/GS monthly reports detailing: (a) the amount,
aging, and description of all of Debtor's accounts
receivable, inventory and other Cash Collateral; (b) the
amount of Cash Collateral collected and used to satisfy
Permitted Expenses; (c) monthly income statements, (d)
monthly expense statements; (e) monthly reports on the
marketing and sales efforts for the Gallery Plaza and
Atlantis Condominiums.
As additional adequate protection, Debtor agrees that upon the
consummation of any sale of substantially all or any ofits assets
all of the net proceeds of that sale will be paid immediately and
indefeasibly to CPG/GS in an amount equivalent to the outstanding
balance of the Loans, plus any postpetition interest and charges
that may have accrued to the extent permitted by the Bankruptcy
Code.
The Debtor also covenants and agrees to waive any and all rights
under Section 506(c) of the Bankruptcy Code as to any of the
Collateral. The Debtor will also grant CPG/GS access to monitor
its debtor-in-possession accounts and the payments and deposits
made therein or therefrom.
The postpetition Collateral under the Replacement Liens and the
prepetition Collateral will all serve as cross-Collateral for the
Loans and any and all other amounts disbursed by CPG/GS under the
Financing Agreements.
CPG/GS will have the right to credit bid the indebtedness owed
thereto under the Loan Agreements and Loan Documents, in whole or
in part, in connection with any sale or disposition of Debtor's
assets, and Debtor hereby waives all rights to oppose such credit
bid rights of CPG/GS.
Objections are due July 5, 2011. If no objection or other
response is received within the time allowed, the motion will be
deemed unopposed and a final order may be entered approving the
stipulation. If a timely objection is filed, a hearing will be
held on July 7, 2011, at 9:30 a.m.
Attorneys for CPG/GS are:
David P. Freedman, Esq.
Hermann D. Bauer, Esq.
O'Neill & Borges
American International Plaza
250 Munoz Rivera Avenue, Suite 800
San Juan, Puerto Rico 00918-1813
Tel: (787) 764-8181
Fax: (787) 753-8944
E-Mail: David.Freedman@oneillborges.com
Hermann.bauer@oneillborges.com
About Swiss Chalet
The Swiss Chalet Inc., which owns the Best Western Hotel Pierre in
San Juan, Puerto Rico, filed a Chapter 11 petition (Bankr. D. P.R.
Case No. 11-04414) on May 27, 2011. Charles A. Cuprill, P.S.C.
Law Offices serves as its bankruptcy counsel. In its Schedules,
the Debtor disclosed total assets of $118,521,510 and total debts
of $132,741,094. The petition was signed by Arnold Benus,
director.
TAO-SAHI: Has Until Aug. 31 to Use Cash Collateral
--------------------------------------------------
Judge Ronald B. King of the U.S. Bankruptcy Court for the Western
District of Texas, San Antonio Division, authorized Tao-Sahi, LP,
to use until Aug. 31, 2011, the cash collateral.
S2 Acquisition LLC, which asserts a perfected security interest in
the cash collateral, agreed to the continued use of such by the
Debtor.
As adequate protection, the Debtor will make a monthly payment of
$40,170 to S2 Acquisition, and a monthly payment of up to $10,000
of S2 Acquisition's fees and expenses until the effective date of
a confirmed plan.
S2 Acquisition is also granted a first replacement liens and
additional lien on all assets of the Debtor and an allowed
superpriority administrative claim.
The Collateral and Superpriority Claims is subject to a carve-out
for professional fees and fees to be paid to the Clerk of the
Court and the U.S. Trustee.
A full-text copy of the Cash Collateral Order is available for
free at http://bankrupt.com/misc/TAOSAHILP_cashcoll_order.pdf
About Tao-Sahi
Tao-Sahi LP owns the Holiday Inn NW - Seaworld in San Antonio,
Texas. Tao-Sahi has no employees. The Hotel is managed under
contract with an independent management company. Tao-Sahi filed
for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-52027) on
June 7, 2011, to stay foreclosure of the hotel and restructure its
debts. Judge Ronald B. King presides over the case. Marvin E.
Sprouse, III, Esq., at Jackson Walker LLP, serves as bankruptcy
counsel. Bolton Real Estate Consultants, Ltd., serves as the
Debtor's appraiser. In its Schedules, the Debtor disclosed
$24,735,728 in assets and $20,584,065 in debts. The petition was
signed by Clayton Isom, CEO of Tao Development Group, LLC, general
partner.
S2 Acquisition LLC, an opportunity fund associated with Square
Mile Capital Management in New York, acquired the hotel debt from
the failed Silverton Bank. S2 Acquisition is represented by Tom
Rogers, Esq., and Shari L. Heyan, Esq., at Greenberg Traurig.
TAYLOR BEAN: Chapter 11 Plan Confirmed by Court
-----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Taylor Bean & Whitaker Mortgage Corp. will soon have
a confirmed Chapter 11 plan. At a hearing on July 13, a U.S.
bankruptcy judge in Jacksonville, Florida, said he would sign an
order approving the plan, attorney Paul D. Moak from McKool Smith
PC in Dallas said in an interview, according to Bill Rochelle, the
bankruptcy columnist for Bloomberg News.
According to the report, Judge Moak, who represents Federal Home
Loan Mortgage Corp., also said the judge approved a settlement
involving Bank of America NA under which Taylor Bean affiliate
Ocala Funding LLC has an approved $1.6 billion claim.
Mr. Rochelle reports that the Plan, supported by the official
creditors' committee, eventually is to administer $322 million
to $521 million, according to the disclosure statement approved
in November. Once claims with higher priority are paid, from
$264 million to $354 million would remain for unsecured creditors
with claims totaling more than $8 billion, according to the
disclosure statement. Unsecured creditors were expected to have a
distribution of 3.3% to 4.4%, the disclosure statement said. The
largest claim, $3.25 billion, belongs to the Federal Deposit
Insurance Corp. That claim was settled.
Lee Farkas, Taylor Bean's former chairman, was sentenced in June
to 30 years in federal prison after being convicted of 14 counts
of conspiracy and bank, wire and securities fraud in what
prosecutors said was a $3 billion scheme involving fake mortgage
assets.
TEDCO ELECTRIC: Court Remands Fight Over Construction Payments
--------------------------------------------------------------
Roxanne Palmer at Bankruptcy Law360 reports that a Texas state
appeals court on Thursday remanded a fight between Constructors &
Associates Inc. and First National Bank of Cameron over payment
for work the construction company had subcontracted to bankrupt
Tedco Electric Inc.
Law360 says the lower court had ordered Constructors to pay more
than $883,000 plus interest to First National, one of Tedco's
lenders, for electrical work Tedco had agreed to provide for 10 of
Constructors' projects.
TEN SAINTS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Ten Saints LLC
9115 W. Russell Road, Suite 210
Las Vegas, NV 89148
Bankruptcy Case No.: 11-21028
Chapter 11 Petition Date: July 13, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Mike K. Nakagawa
Debtor's Counsel: Gerald M. Gordon, Esq.
GORDON & SILVER, LTD.
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, NV 89169
Tel: (702) 796-5555
Fax: (702) 369-2666
E-mail: bankruptcynotices@gordonsilver.com
- and -
Talitha B. Gray, Esq.
GORDON & SILVER, LTD.
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, NV 89169
Tel: (702) 796-5555
E-mail: athalrose@gordonsilver.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Todd A. Nigro, manager of Nigro Saints,
LLC, its manager.
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No. Petition Date
------ -------- -------------
Beltway One Development Group LLC 11-21026 07/13/11
Horizon Village Square LLC -- 07/13/11
Nigro HQ LLC 11-21014 07/13/11
Russell Boulder 10-29724 10/19/10
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Wachovia/Commercial Payment Center -- $104,787
550 S. Tryon Street
Charlotte, NC 28202
New Saints -- $87,500
2300 W. Sahara Avenue, Box 25, Suite 670
Las Vegas, NV 89102
Andress Enterprises -- $80,519
2300 W. Sahara Avenue, Box 25, Suite 670
Las Vegas, NV 89102
Nigro Development -- $37,500
Hilton Hotels Coporation -- $27,816
Bancroft, Susa & Galloway -- $15,599
Sysco Food Scvs of Las Vegas -- $11,886
Guest Supply -- $7,598
LodgeNet Interactive Corporation -- $6,476
NV Energy -- $6,076
HD Supply -- $3,189
Brady Industries, Inc. -- $2,759
S&D Coffee, Inc. -- $2,706
At&T -- $2,281
The Friedman Group -- $2,133
Cox Business Finances -- $2,027
Otis Elevator Company -- $1,419
Republic Services of Southern -- $1,001
Nevada
Lands' End Business Outfitters -- $986
Century Link -- $953
TERRA TELECOM: Ex-Pres. Protests New Evidence in Haiti Bribe Case
-----------------------------------------------------------------
Megan Stride at Bankruptcy Law360 reports that a former Terra
Telecommunications Corp. president fought back Thursday against
prosecutors' plans to introduce new evidence regarding alleged
mortgage and bankruptcy frauds at his upcoming Florida trial over
charges that he took part in a government bribery scheme in Haiti.
Joel Esquenazi objected to and asked the court to exclude the
federal government's "eleventh hour" notice of intent - lodged
after business hours Wednesday - to introduce evidence at his
trial under Federal Rule of Evidence 404(b), according to Law360.
TERRESTAR NETWORKS: Committee Seeks Claims Recharacterization
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that now that TerreStar Networks Inc. has been authorized
to sell the business to Dish Network Corp. for $1.375 billion, the
official creditors' committee is attempting to convert some
creditors into shareholders so their claims would come behind
everyone else.
Mr. Rochelle recounts that last month the committee filed
papers in bankruptcy court in New York seeking to recharacterize
$50 million in loans made by parent TerreStar Corp. in five
installments in 2009. The committee said the loans should be
treated as equity contributions given the operating company's
tenuous financial condition at the time.
Last week, the committee, according to the report, sued
Harbinger Capital Partners LLC in bankruptcy court, claiming that
a $5 million loan made to TerreStar Networks in August 2010
likewise should be treated as equity. The committee said the loan
should be recharacterized because Harbinger at the time was a
significant owner of both debt and equity.
Mr. Rochelle relates that there's no schedule yet for the
Harbinger dispute. The dispute with the parent is set for hearing
on Sept. 19.
About TerreStar Networks
TerreStar Corporation and TerreStar Holdings, Inc., filed
voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for
the Southern District of New York on Feb. 16, 2011.
TSC's Chapter 11 filing joins the bankruptcy proceedings of
TerreStar Networks Inc. and 12 other affiliates, which filed on
Oct. 19, 2010. The October Chapter 11 cases are procedurally
consolidated under TSN's Case No. 10-15446 under Judge Sean H.
Lane.
TSC is the parent company of each of the October Debtors. TSC has
four wholly owned direct subsidiaries: TerreStar Holdings, Inc.,
TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings
Inc.
TSC's case is jointly administered with the cases of seven of the
October Debtors under the caption In re TerreStar Corporation, et
al., Case No. 11-10612 (SHL). The seven Debtor entities who
sought joint administration with TSC are TerreStar New York Inc.,
Motient Communications Inc., Motient Holdings Inc., Motient
License Inc., Motient Services Inc., Motient Ventures Holdings
Inc., and MVH Holdings Inc.
TSC is a Delaware corporation whose main asset is the equity in
non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use
a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by
the Federal Communication Commission. TSC also has an indirect
89.3% ownership interest in TerreStar Network, Inc., which
operates a separate and distinct mobile communications business.
TerreStar Holdings is a Delaware corporation that directly holds
100% of the interests in 1.4 Holdings LLC.
TerreStar Networks -- TSN -- the principal operating entity of
TSC, developed an innovative wireless communications system to
provide mobile coverage throughout the United States and Canada
using satellite-terrestrial smartphones. The system, however,
required an enormous amount of capital expenditures and initially
produced very little in the way of revenue. TSN's available cash
and borrowing capacity were insufficient to cover its funding;
thus, forcing TSN to seek bankruptcy protection in October 2010.
TSC estimated assets and debts of $100 million to $500million in
its Chapter 11 petition.
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
in New York, serves as counsel for the TSC and TSN Debtors.
Garden City Group is the claims and notice agent. Blackstone
Advisory Partners LP is the financial advisor.
The Garden City Group, Inc., is the claims and noticing agent in
the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C.
is the counsel to the Official Committee of Unsecured Creditors
formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the
Committee's financial advisor.
TerreStar has signed a contract to sell its business to Dish
Network Corp. for $1.38 billion. TerreStar cancelled a June 30
auction to select higher offers because there were no competing
bids submitted by the deadline.
TONGJI HEALTHCARE: EFP Rotenberg Appointed as Accountants
---------------------------------------------------------
The board of directors of Tongji Healthcare Group, Inc.,
dismissed Windes & McClaughry Accountancy Corporation as the
Company's independent registered public accounting firm and
appointed EFP Rotenberg & Co., LLP, as the Company's new
independent registered public accounting firm. The decision to
appoint Rotenberg as the Company's new independent registered
public accounting firm was approved by the Company's board of
directors on July 7, 2011.
Windes has not provided any opinions, qualification or
modification to the Company's financial statements for each of the
past two fiscal years. The Company does not have, as otherwise
disclosed above, any other disagreements or reportable events as
described under Item 304(a)(1) of Regulations S-K.
During the Company's two most recent fiscal years and through
July 14, 2011, the Company had no disagreements with Windes on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of Windes, would have caused
it to make reference to the subject matter of those disagreements
in its report on the Company's financial statements for such
periods.
During the Company's two most recent fiscal years and through
July 14, 2011, there have been no reportable events as defined
under Item 304(a)(1)(v) of Regulation S-K adopted by the SEC.
The Company's board of directors appointed Rotenberg as the
Company's new independent registered public accounting firm
effective as of July 11, 2011. During the two most recent fiscal
years and through the date of the Company's engagement, the
Company did not consult with Rotenberg regarding either (1) the
application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that
might be rendered on the Company's financial statements, or (2)
any matter that was either the subject of a disagreement (as
defined in Regulation S-K Item 304(a)(1)(v)), during the two most
recent fiscal years.
Prior to engaging Rotenberg, Rotenberg did not provide the Company
with either written or oral advice that was an important factor
considered by the Company in reaching a decision to change its
independent registered public accounting firm from Windes to
Rotenberg.
About Tongji Healthcare
Based in Nanning, Guangxi, the People's Republic of China, Tongji
Healthcare Group, Inc., was incorporated in the State of Nevada on
December 19, 2006. The Company operates Tongji Hospital,
a general hospital with 105 licensed beds.
The Company reported a net loss of $56,232 on $1.92 million of
total operating revenue for the year ended Dec. 31, 2010, compared
with a net loss of $324,335 on $1.87 million of total operating
revenue during the prior year.
The Company's balance sheet at March 31, 2011, showed $7.23
million in total assets, $6.96 million in total liabilities, all
current, and $265,277 in total stockholders' equity.
As reported by the TCR on April 25, 2011, Kabani & Company, Inc.,
in Los Angeles, Calif., noted that the Company's significant
operating losses and insufficient capital raise substantial doubt
about its ability to continue as a going concern.
TXU CORP: Bank Debt Trades at 23% 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 76.83 cents-on-the-dollar during the
week ended Friday, July 15, 2011, a drop of 1.57 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. 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 206 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.
USA UNITED: NYC Bus Operator Fighting for Survival
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that USA United Fleet Inc. scheduled a hearing July 15 in
U.S. Bankruptcy Court in Brooklyn where it says the survival of
the company is at stake.
Comerica Bank, the secured lender owed $10.9 million, started a
lawsuit in late June seeking a receiver to run the business.
Family-owned USA United says it has assets of $18.6 million to
cover the bank.
USA United was scheduled to ask the judge at the July 15 hearing
to force the New York school system to make up its mind about
whether a long-contemplated transfer of the business has been
approved. If it hasn't, then the company wants the city to pay
over withheld money. If the city believes the transfer was
completed, USA Fleet says the new owner will merge with it so the
city can be compelled to pay.
USA United blamed its Chapter 11 filing on several financial
calamities, including an alleged embezzlement by a payroll-
services provider that precipitated $5 million in levies by taxing
authorities for failure to pay taxes and withholdings.
Based in Staten Island, USA United Fleet is one of the biggest
providers of transportation for New York City's public-school
children. USA United Fleet Inc. and seven affiliates filed for
Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No.
11-45867) on July 6, 2011. Judge Jerome Feller presides over the
case. Todd E. Duffy, Esq., at Anderson Kill & Olick, P.C., serves
as the Debtors' counsel. In its petition, USA United Fleet
estimated assets and debts of $10 million to $50 million. The
petition was signed by William Moran, comptroller.
VANGUARD HEALTH: Bank Debt Trades at 0.02% Off in Secondary Market
------------------------------------------------------------------
Participations in a syndicated loan under which Vanguard Health
Systems, Inc., is a borrower traded in the secondary market at
99.98 cents-on-the-dollar during the week ended Friday, July 15,
2011, an increase of 0.22 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 Jan.
29, 2016, and carries Moody's Ba2 rating and Standard & Poor's BB-
rating. The loan is one of the biggest gainers and losers among
206 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
Vanguard Health Systems, Inc. -- http://www.vanguardhealth.com/--
owns and operates 17 acute care hospitals and complementary
facilities and services in Chicago, Illinois; Phoenix, Arizona;
San Antonio, Texas; and Massachusetts. Vanguard's strategy is to
develop locally branded, comprehensive healthcare delivery
networks in urban markets. Vanguard will pursue acquisitions
where there are opportunities to partner with leading delivery
systems in new urban markets or to increase its presence in
existing markets. Upon acquiring a facility or network of
facilities, Vanguard implements strategic and operational
improvement initiatives including expanding services,
strengthening relationships with physicians and managed care
organizations, recruiting new physicians and upgrading information
systems and other capital equipment. These strategies improve
quality and network coverage in a cost effective and accessible
manner for the communities Vanguard serves.
VITRO SAB: Decision This Week on Enforcing Mexican Bankruptcy
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that at a hearing July 14 in Dallas, U.S. Bankruptcy Judge
Harlin "Cooter" Hale said he will rule in the "next few days"
about whether Vitro SAB can use Chapter 15 of U.S. bankruptcy law
to enforce whatever reorganization plan a court in Mexico
eventually approves. Holders of some of the $1.2 billion in
defaulted bonds argued to Hale that Vitro's legal director doesn't
qualify to serve as the "foreign representative" required in
Chapter 15. The bondholders contend that only the Mexican
conciliator has the power to act for Vitro outside Mexico. Even
if the judge approves the use of Chapter 15, bondholders want Hale
to leave open the question of whether the U.S. will enforce a
Mexican reorganization if it's crammed down on bondholders using
$1.9 billion in intercompany debt.
According to the report, Judge Hale was scheduled to convene a
hearing July 15 on bondholders' request to clarify whether they
are free to attach assets of non-bankrupt Vitro subsidiaries. The
bondholders filed involuntary 7bankruptcy petitions against
subsidiaries, and a dozen were denied. The bondholders say it's
unclear whether denial of the petitions is the same as their
dismissal. If the petitions were dismissed, then there is no
automatic stay precluding collection action on the defaulted debt
guaranteed by subsidiaries. Vitro answered the papers saying the
judge intentionally declined to dismiss the petitions.
Vitro, the report relates, contends the automatic stay remains in
place until the judge rules on whether the bondholders must pay
sanctions for filing unsuccessful involuntary petitions. A
hearing on July 15 is scheduled on whether the judge will impose
sanctions on bondholders for losing.
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is the
largest manufacturer of glass containers and flat glass in Mexico,
with consolidated net sales in 2009 of MXN23,991 million (US$1.837
billion).
Vitro defaulted on its debt in 2009, and sought to restructure
around US$1.5 billion in debt, including US$1.2 billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in debt
from bondholders. The tender offer would be consummated with a
bankruptcy filing in Mexico and Chapter 15 filing in the United
States. Vitro said noteholders would recover as much as 73% by
exchanging existing debt for cash, new debt or convertible bonds.
Concurso Mercantil & Chapter 15 Proceedings
Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for Civil
and Labor Matters for the State of Nuevo Leon, commencing its
voluntary concurso mercantil proceedings -- the Mexican equivalent
of a prepackaged Chapter 11 reorganization. Vitro SAB also
commenced parallel proceedings under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan
on Dec. 13, 2010, to seek U.S. recognition and deference to its
bankruptcy proceedings in Mexico.
Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings. The judge said Vitro couldn't push through
a plan to buy back or swap US$1.2 billion in debt from bondholders
based on the vote of US$1.9 billion of intercompany debt when
third-party creditors were opposed. Vitro as a result dismissed
the first Chapter 15 petition following the ruling by the Mexican
court.
On April 12, 2011, an appellate court in Mexico reinstated the
reorganization. Accordingly, Vitro SAB on April 14 re-filed a
petition for recognition of its Mexican reorganization in U.S.
Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754).
In the present Chapter 15 case, the Debtor seeks to block any
creditor suits in the U.S. pending the reorganization in Mexico.
On June 29, 2011, Vitro Packaging de Mexico S.A. de C.V. commenced
a voluntary judicial reorganization proceeding under the Ley de
Concursos Mercantiles before the Federal District Court for Civil
and Labor Matters for the State of Nuevo Leon, the United Mexican
States. On June 30, 2011, Vitro Packaging filed a chapter 15
petition (Bankr. N.D. Tex. Case No. 11-34224).
Alejandro Francisco Sanchez-Mujica and Javier Arechavaleta Santos
serve as Foreign Representatives of Vitro S.A.B. de C.V. and Vitro
Packaging de Mexico S.A. de C.V. The Foreign Representatives are
represented by David M. Bennett, Esq., Katharine E. Battaia, Esq.,
and Cassandra A. Sepanik, Esq., at Thompson & Knight LLP, and
Andrew M. Leblanc, Esq., Risa M. Rosenberg, Esq., Thomas J. Matz,
Esq., and Jeremy C. Hollembeak, Esq., at Milbank Tweed Hadley &
McCloy LLP.
Attorneys for the Ad Hoc Group of Vitro Noteholders are Jeff P.
Prostok, Esq., and Lynda L. Lankford, Esq., at Forshey & Prostok,
LLP, and Allan S. Brilliant, Esq., Benjamin E. Rosenberg, Esq.,
Craig P. Druehl, Esq., and Dennis H. Hranitzky, Esq., at Dechert
LLP.
Chapter 11 Proceedings
A group of noteholders, namely Knighthead Master Fund, L.P., Lord
Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed
Opportunities Fund LP, and Brookville Horizons Fund, L.P., opposed
the exchange. Together, they held US$75 million, or approximately
6% of the outstanding bond debt. The Noteholder group commenced
involuntary bankruptcy cases under Chapter 11 of the U.S.
Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case
No. 10-47470) and 15 other affiliates on Nov. 17, 2010.
Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
counsel to analyze the potential rights that Vitro may exercise in
the United States against the ad hoc group of dissident
bondholders and its advisors.
A larger group of noteholders known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has expressed
concerns over the exchange offer. The group says the exchange
offer exposes Noteholders who consent to potential adverse
consequences that have not been disclosed by Vitro. The group is
represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at
White & Case LLP.
The U.S. affiliates subject to the involuntary petitions are Vitro
Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No. 10-
47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473);
Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super
Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky
International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP
Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47477); Amsilco
Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O.
Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger
Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa
Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance
Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass,
Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC
(Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC
(Bankr. N.D. Tex. Case No. 10-47485).
A bankruptcy judge in Fort Worth, Texas, denied involuntary
Chapter 11 petitions filed against four U.S. subsidiaries. On
April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro
America LLC and three other U.S. subsidiaries -- that were subject
to the involuntary petitions into voluntary Chapter 11. The Texas
Court on April 21 denied involuntary petitions against the eight
U.S. subsidiaries that didn't consent to being in Chapter 11.
Kurtzman Carson Consultants is the claims and notice agent to
Vitro America, et al. Alvarez & Marsal North America LLC is the
Debtors' operations and financial advisor.
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vitro America, et al., has selected Sarah Link
Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas,
Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis
Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York,
as counsel.
WARNER MUSIC: Fitch Withdraws 'B+' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed and withdrawn the long-term Issuer
Default Ratings and issue ratings of Warner Music Group Corp., WMG
Acquisition Corp. and WMG Holdings Corp.
Fitch has decided to discontinue the rating due to insufficient
information.
The ratings were previously on Rating Watch Negative, reflecting
the uncertainty of how the acquisition of WMG by Airplanes Music
LLC (an affiliate of Access Industries, Inc.) would be structured.
The Rating Watch Negative has not been resolved. Any incremental
or higher coupon debt that drove interest coverage below 1.5 times
(x) could have triggered at least a one notch downgrade.
Fitch affirms and withdraws these ratings:
WMG
-- IDR at 'B+';
WMG Holdings Corp.
-- IDR at 'B+';
-- Senior unsecured notes at 'B-/RR6'.
WMG Acquisition Corp.
-- IDR at 'B+';
-- Senior secured notes at 'BB/RR2';
-- Subordinated notes at 'B/RR5'.
WASHINGTON MUTUAL: Hearing for Settlement-Based Plan Begins
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Washington Mutual Inc. on July 13 held the first day
of a scheduled three-day confirmation hearing for approval of the
Chapter 11 plan. The bankruptcy court already approved the
settlement underlying the plan. The plan for the bank holding
company is being opposed by shareholders who are to receive
nothing.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- is a holding company for Washington Mutual
Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
On Jan. 7, 2011, the U.S. Bankruptcy Court for the District of
Delaware entered a 107-page opinion determining that the global
settlement agreement, among certain parties including WMI, the
Federal Deposit Insurance Corporation and JPMorgan Chase Bank,
N.A., upon which the Plan is premised, and the transactions
contemplated therein, are fair, reasonable, and in the best
interests of WMI. Additionally, the Opinion and related order
denied confirmation, but suggested certain modifications to the
Company's Sixth Amended Joint Plan of Affiliated Debtors that, if
made, would facilitate confirmation.
Washington Mutual has filed with the Bankruptcy Court a Modified
Sixth Amended Joint Plan and a related Supplemental Disclosure
Statement. The Company believes that the Modified Plan has
addressed the Bankruptcy Court's concerns and looks forward to
returning to the Bankruptcy Court to seek confirmation of the
Modified Plan.
WATER PIK: S&P Assigns Preliminary 'B' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
corporate credit rating to Fort Collins, Colo.-based Water Pik
Inc. "We also assigned our preliminary 'B' issue-level ratings to
Water Pik's proposed $197 senior secured credit facility. The
proposed senior secured credit facility comprises a five-year
$20 million revolving credit facility and a six-year $177 million
term loan. The preliminary recovery rating on this debt is '3',
indicating our expectation for meaningful (50% to 70%) recovery in
the event of a payment default. The company will use the proceeds
from the proposed term loan to refinance existing debt, fund a
$145 million distribution to equity holders, and pay transaction
fees and expenses. The outlook is stable," S&P related.
"At the close of the transaction, we estimate Water Pik will have
about $177 million in total debt outstanding," S&P said.
"We estimate the pro forma ratio of adjusted total debt to EBITDA
following this refinancing transaction will be high at about 4.8x
for the fiscal year ending September 2011," said Standard & Poor's
credit analyst Rick Joy. "We estimate that credit measures at
fiscal year-end 2012 will likely improve modestly."
"The outlook on Water Pik is stable. The company has experienced
strong growth in recent years, and we expect the company's
operating performance to remain relatively stable over the near-
to-intermediate term, and financial covenant cushion of at least
15%," S&P added.
WAXESS HOLDINGS: Signs $3.12MM Subscription Pacts with Investors
----------------------------------------------------------------
Waxess Holdings, Inc., on July 11, 2011, entered into subscription
agreements with certain investors whereby it sold an aggregate of
125.1 units, with each Unit consisting of 12,500 of the Company's
common stock, par value $0.001 per share and one two- year warrant
to purchase 12,500 additional shares of Common Stock at an
exercise price of $3.00 per share for a per Unit purchase price of
$25,000 and an aggregate gross proceeds of $3,127,500.
In connection with the Offering, the Company has entered into
registration rights agreements with the Investors, pursuant to
which the Company has agreed to file a "resale" registration
statement with the SEC within 45 days from the final closing date
of the Offering, covering all shares of the Common Stock sold in
the Offering, including the shares of Common Stock underlying the
Warrant and the shares of Common Stock underlying the warrants
issued to the placement agents. The Company has agreed to
maintain the effectiveness of the registration statement from its
effectiveness date through and until 12 months after the Closing
Date unless all securities registered under the registration
statement have been sold or are otherwise able to be sold pursuant
to Rule 144. The Company has agreed to use its reasonable best
efforts to have the registration statement declared effective
within 180 days from the Closing Date.
In connection with the Offering, the Company paid aggregate
placement agent fees consisting of (i) $344,005 and (ii) issued
three year Warrants to purchase that a number of Units equal to 9%
of the Units sold in the offering, with the same terms as the
Warrants issued to the Investors, except as otherwise noted.
A full-text copy of the Subscription Agreement is available for
free at http://is.gd/h47s2k
A full-text copy of the Form 8-K is available for free at:
http://is.gd/ooRoDU
About Waxess Holdings
Waxess Holdings, Inc., is a technology firm, located in Newport
Beach, Calif., that was incorporated in 2008 and develops and
markets phone terminals capable of converging traditional
landline, cellular and data services based on its patent
portfolio. Waxess currently offers its DM1000 (cell@home) product
through various channels, including several of the major US
carriers, and is working to bring its higher performance, lower
cost next generation DM1500 and MAT1000 products to the market.
The Company's balance sheet at March 31, 2011, showed $2.0 million
in total assets, $7.1 million in total liabilities, and
stockholders' deficit of $5.1 million.
As reported by the TCR on May 30, 2011, Jonathon P. Reuben, C.P.A.
Accountancy Corporation, in Torrance, California, expressed
substantial doubt about Waxess Holdings' ability to continue as a
going concern, following the Company's 2010 results. The
independent auditors noted that the Company has incurred net
losses since inception, and as of Dec. 31, 2010, had an
accumulated deficit of $192,863.
WEIRTON MEDICAL: Fitch Affirms Rating on Revenue Bonds at 'BB'
--------------------------------------------------------------
As part of its ongoing surveillance efforts, Fitch Ratings has
affirmed the 'BB' rating on the following bonds issued on behalf
of Weirton Medical Center (Weirton).
-- $7 million Weirton Municipal Hospital Building Commission
hospital revenue bonds series 2001A
The Rating Outlook is revised to Stable from Negative.
Rating Rationale:
-- The revision of the Outlook to Stable reflects the traction
of a turnaround plan that has cut operating losses by more
than half through the 11-month interim period (June 30 year-
end), reducing a $4.2 million operating loss to a $1.7
million loss, year over year.
-- The turnaround plan has been led by Quorum Health Resources
(QHR), which has just finished the first year of a two year
engagement, with many of the initiatives around revenue
cycle, payor contracts, and denial management expected to
have a fuller positive effect on operations in fiscal 2012
and in subsequent operating years.
-- Inpatient utilization a major credit concern last year as it
dropped nearly 12% from fiscal 2009 to 2010 has stabilized
dropping about 1% through the interim (more in line with
national trends) and recent physician recruitment efforts
adds further credence to Weirton's ability to maintain this
stability.
-- Weirton, which failed to meet its debt service coverage
covenant at June 30, 2010, received a waiver for the
violation, is currently in compliance, and expects to end
the year in compliance with the debt service covenant.
-- Weirton's liquidity remains a primary credit strength, with
its liquidity metrics all very strong for the rating level.
-- Credit concerns include: the socioeconomic characteristics
of the primary service area, which are below national
averages and lead to a high level of Medicaid, self-pay and
bad debt; Weirton's variable debt exposure (approximately
54%), supported by a letter of credit (LOC) that requires
yearly renewals; and deferred capital spending, as reflected
in Weirton's high average age of plant, 29.8 years.
Key Rating Drivers
-- The turnaround plan implemented by QHR continues with
Weirton meeting its fiscal 2012 budget, which projects a
small operating surplus. This result would be a significant
achievement as Weirton has not posted a positive operating
margin over the last 10 audited years.
-- Weirton is able to renew its LOC, which expires in January
2012.
-- Physician recruitment efforts are successful, further
helping to stabilize inpatient volumes.
Security
Debt payments are secured by a pledge of the gross revenues and
debt service reserve fund. The series 2001 bonds are also secured
by a first mortgage lien.
Credit Summary:
The affirmation and revised Outlook to Stable reflects the
improved operating performance at Weirton, driven by a turnaround
plan being implemented at Weirton by QHR. On May 1, 2010,
Weirton's board hired QHR for a two-year engagement. QHR brought
on a CFO, COO, interim CNO, and additional consultants and began
to evaluate and revamp revenue cycle management, payor contracts,
human resources, labor negotiations, and case management.
While Weirton is still operating at a loss, the operating loss has
been cut by more than half through the 11-month interim period,
and Weirton is exceeding budget. At May 31, 2011, Weirton's
operating margin was a negative 2% compared to a negative 4.8% for
the same period in fiscal 2010. Revenue is up by about a half
percent through the interim period after being down approximately
8% from fiscal 2009 to fiscal 2010. Moreover, the positive effect
of many of the initiatives that QHR has implemented will be felt
more fully in fiscal 2012, led by improvements to payor contracts
and better case management.
Weirton is budgeting for $335,000 in operating income for fiscal
2012; Fitch believes this can be achieved. In addition to the QHR
initiatives, Weirton has had physician recruitments gains in
orthopedics and obstetrics, as well as has plans to replace its
current Cath Lab with state of the art Phillips technology in
October 2011. The potential positive effect of the newly recruited
physicians has been conservatively incorporated into the 2010
budget, with Weirton budgeting for flat volumes. Inpatient
admissions were a major concern for the last rating action as it
declined 11.7% (not including inpatient psychiatry which was
discontinued in the first quarter of 2010). Through the interim
period, inpatient admissions declined 1.3%, a decline much more in
line with declines nationally. Emergency room admissions, which
had also declined, has shown modest growth year over year.
Liquidity remains a major credit strength, as it mitigates the
risk of Weirton's variable rate debt structure and continues to
provide a cushion as the turnaround plan progresses.
Unrestricted cash and investments stood at $35.6 million at May
31, 2011, equal to 152 days cash on hand, a 12x cushion ratio, and
138.5% cash to debt, all of which are characteristic of an
investment grade credit.
Credit concerns include WMC's variable rate debt exposure, poor
service area characteristics, and high average age of plant.
Approximately 54% ($14 million of WMC's outstanding debt is in
variable rate demand bonds (VRDBs) backed by a one-year letter of
credit (LOC) from WesBanco and United Bank which are wrapped by
PNC Bank. Fitch does not rate the series 2001B bonds or the $4.8
million series 2005A fixed-rate bonds. The 2001 VRDBs expose WMC
to renewal, put, and counterparty risk. The LOC expires in January
2012 and carries a yearly renewal option. Continuation of the
banks support is key to maintaining the current rating level.
Should the banks decide not to renew, WMC does have adequate
liquidity to repay an accelerated amortization of the debt.
Weirton has no swaps.
WMC's service area can be characterized by socioeconomic
indicators generally worse than U.S. averages, as well as high
unemployment rates within the metropolitan statistical area,
ranging from 11% to 12%. These factors present significant
challenges from a reimbursement standpoint as self-pay and
Medicaid represents roughly 9% and 13% of gross revenues,
respectively, while Medicare accounts for an additional 45%. Bad
debt as a percentage of revenue is also high, hovering near 11%.
WMC is a 238-bed acute care hospital located in Weirton, WV,
approximately 35 miles west of downtown Pittsburgh. The hospital
had total revenues of $94.6 million in fiscal 2010 and $87.1
million through the 11 month interim period. WMC covenants to
provide annual and quarterly disclosure to bondholders; however,
quarterly disclosure is not done through EMMA.
YRC WORLDWIDE: Expects $4.92 Million Operating Revenue in 2011
--------------------------------------------------------------
YRC Worldwide Inc. said that its management does not as a matter
of course make public projections as to future performance or
earnings and is especially wary of making projections for extended
periods due to the unpredictability of the underlying assumptions
and estimates. However, certain financial projections prepared by
management in connection with the Company's financial
restructuring were made available in April 2011 to certain of the
Company's lenders under its existing credit agreement and their
financial and legal advisors in connection with their
consideration of the Restructuring. The Company has set forth
that portion of the financial projections that it believes
constitutes material nonpublic information.
The Company projects a $2.38 million of operating revenue for the
first half of 2011 and a $4.92 million of operating revenue for
the full year 2011. The Company estimates adjusted EBITDA of
$59,896 for the first half of 2011 and adjusted EBITDA of $149,903
for the second half.
A full-text copy of the financial projections is available for
free at http://is.gd/xAWAVE
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that through
wholly owned operating subsidiaries offers its customers a wide
range of transportation services. These services include global,
national and regional transportation as well as logistics.
KPMG LLP's audit reports on the consolidated financial statements
of YRC Worldwide Inc. and subsidiaries for 2009 and 2010 each
contain an explanatory paragraph that states that the Company has
experienced significant declines in operations, cash flows and
liquidity and these conditions raise substantial doubt about the
Company's ability to continue as a going concern.
The Company's balance sheet at March 31, 2011, showed $2.62
billion in total assets, $2.91 billion in total liabilities, and a
$287.64 million total shareholders' deficit.
* * *
In January 2011, Standard & Poor's Ratings Services placed its
'CCC-' corporate credit rating on YRC Worldwide Inc. (YRCW) on
CreditWatch developing. At the same time, S&P is withdrawing the
existing issue level ratings on Yellow Corp.'s senior unsecured
debt, given the negligible amounts outstanding.
"The ratings on Overland Park, Kan.-based YRCW reflect its near-
term liquidity challenges, meaningful off-balance-sheet contingent
obligations related to multiemployer pension plans, as well as its
participation in the competitive, capital-intensive, and cyclical
trucking industry," said Standard & Poor's credit analyst Anita
Ogbara. "YRCW's substantial (albeit deteriorating) market
position in the less-than-truckload (LTL) sector, which has high
barriers to entry, partially offsets these characteristics. We
characterize YRCW's business profile as weak, financial profile as
highly leveraged, and liquidity as weak."
As reported by the TCR on March 22, 2011, Moody's Investors
Service has lowered the Corporate Family Rating of YRC Worldwide,
Inc to Ca from Caa3. The rating outlook is negative. The rating
has been downgraded in response to the company's recent disclosure
of a "Milestone Failure" relating to requirements under its
amended credit agreement. Moody's believes that this development
increases the risk in YRC's efforts to conclude critical
refinancing that is instrumental to its ability to avoid
bankruptcy.
As reported by the TCR on May 5, 2011, Fitch Ratings downgraded
YRC's Issuer default rating to 'C' from 'CC'; Secured bank credit
facility rating downgraded to 'CCC/RR2' from 'B-/RR2'; and Senior
unsecured rating affirmed at 'C/RR6'. In addition, Fitch has
removed YRCW's ratings from Rating Watch Negative. Fitch said
that although it appears increasingly likely that the company will
successfully complete the restructuring, until the transactions
constituting the restructuring close, which is not anticipated
until late July 2011, there exists a potential for the transaction
to fail, in which case Fitch expects the company would be forced
to file for Chapter 11 bankruptcy protection.
* Estate Property Revests in Bankrupt on Confirmation
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in San Francisco harmonized
two provisions in Chapter 13 by saying that the "plain language"
of Section 1327(b) of the Bankruptcy Code revests property of the
estate in the bankrupt on confirmation, unless the debtor elects
otherwise in the plan. As a result, state taxing authorities
weren't enjoined from collecting taxes which arose after a prior
Chapter 13 plan was confirmed. The case is California Franchise
Tax Board v. Kendall (In re Jones), 10-60000, 9th U.S. Circuit
Court of Appeals (San Francisco).
* 6th Circ. Panel Revives Firm Fight For Ch. 11 Retainer
--------------------------------------------------------
Samuel Howard Bankruptcy Law360 reports that a Sixth Circuit
bankruptcy panel on Thursday faulted a lower court for denying
fees to debtor's counsel Cupps & Garrison LLC and ordering
disgorgement of the firm's retainer after its client converted to
Chapter 7.
The Sixth Circuit's Bankruptcy Appellate Panel found that the
court misapplied bankruptcy law when it denied Cupps & Garrison's
request for roughly $20,000 in fees and required the firm to
relinquish the $10,000 retainer in order to pay the Chapter 7
trustee who later oversaw the liquidation of child care company.
* S&P's Global Corporate Default Tally Remains at 18
----------------------------------------------------
The 2011 global corporate default tally remains at 18 after no
issuers defaulted last week, said an article published Friday by
Standard & Poor's Global Fixed Income Research, titled "Global
Corporate Default Update (July 7 - 13, 2011) (Premium)."
Of the total, 11 issuers were based in the U.S., two each were
based in Canada and New Zealand, and one each was based in the
Czech Republic, France, and Russia. By comparison, 46 global
corporate issuers had defaulted by this time in 2010.
Of these defaulters, 33 were U.S.-based issuers, two were European
issuers, four were from the emerging markets, and seven were in
the other developed region (Australia, Canada, Japan, and New
Zealand).
Seven of this year's defaults were due to missed interest or
principal payments and six were due to distressed exchanges--both
among the top reasons for default in 2010. Of the remaining five,
three issuers defaulted after they filed for bankruptcy, another
had its banking license revoked by its country's central bank, and
the fourth was forced into liquidation as a result of regulatory
action. Of the defaults in 2010, 28 defaults resulted from missed
interest or principal payments, 25 resulted from Chapter 11 and
foreign bankruptcy filings, 23 from distressed exchanges, three
from receiverships, one from regulatory directives, and one from
administration.
Standard & Poor's baseline projection for the U.S. corporate
trailing 12-month speculative-grade default rate for March 2012 is
1.6%. A total of 24 issuers would need to default from April 2011
to March 2012 to reach the forecast. The projection of 1.6% is
another 0.86-percentage-point (or another 35%) decline from the
2.46% default rate in March 2011. This rate of decline would be
sharp, but slower than the decline over the past 16 months.
Improved lending conditions and a lower cost of capital are
keeping our default expectations relatively upbeat in the next 12
months.
"We are seeing stronger credit quality, as reflected in fewer
downgrades and lower negative bias. In addition to our baseline
projection, we forecast the default rate in our optimistic and
pessimistic scenarios. In our optimistic default rate forecast
scenario, the economy and the financial markets improve more than
expected. As a result, we would expect the default rate to be
1.2% (18 defaults in the next 12 months)," S&P said.
"On the other hand, if the economic recovery stalls and the
financial markets deteriorate--which is our pessimistic scenario--
we expect the default rate to be 3.3% (50 defaults) by March 2012.
We base our forecasts on quantitative and qualitative factors that
we consider, including, but not limited to, Standard & Poor's
proprietary default model for the U.S. corporate speculative-grade
bond market. We update our outlook for the U.S. issuer-based
corporate speculative-grade default rate each quarter after
analyzing the latest economic data and expectations."
* Failed Bank Tally Now 55 This Year as 4 Banks Shuttered Friday
----------------------------------------------------------------
Ameris Bank, Moultrie, Georgia, on Friday acquired the banking
operations, including all the deposits, of High Trust Bank,
Stockbridge, Georgia, and One Georgia Bank, Atlanta, Georgia. The
two banks were closed July 15 by the Georgia Department of Banking
and Finance, which appointed the Federal Deposit Insurance
Corporation as receiver for each institution.
Aside from the two banks acquired by Ameris, Arizona-based Summit
Bank and Florida-based First Peoples Bank were also shuttered by
regulators. The Foothills Bank and Premier American Bank, N.A.,
were the respective buyers of the closed banks.
The weekend's closings have cost the FDIC's insurance fund around
$130 million.
2011 Failed Banks List
The FDIC was appointed as receiver for the closed banks. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with various banks that agreed to assume the
deposits of most of the closed banks. The FDIC also entered into
loss-share transactions on assets bought by the banks.
For this year, the failed banks are:
Loss-Share
Transaction Party FDIC Cost
Assets of Bank That Assumed to Insurance
Closed Bank Deposits & Bought Fund
Closed Bank (millions) Certain Assets (millions)
----------- ----------- -------------- ------------
Summit Bank $72.0 The Foothills Bank $11.3
First Peoples Bank $228.3 Premier American Bank $7.4
One Georgia Bank $186.3 Ameris Bank $44.4
High Trust Bank $192.5 Ameris Bank $66.0
Colorado Capital $717.5 First-Citizens Bank $283.8
First Chicago Bank $959.3 Northbrook Bank $284.3
Signature Bank $66.7 Points West Community $22.3
Mountain Heritage $103.7 First American Bank $41.1
First Commercial Bank $98.6 Stonegate Bank $28.5
McIntosh State Bank $339.9 Hamilton State Bank $80.0
Atlantic Bank and Trust $208.2 First Citizens Bank $36.4
First Heritage Bank $173.5 Columbia State $34.9
First Georgia Banking $731.0 CertusBank $156.5
Atlantic Southern $741.9 CertusBank $273.5
Summit Bank $142.7 Columbia State $15.7
Coastal Bank $129.4 Premier American Bank $13.4
Community Central $476.3 Talmer Bank & Trust $183.2
The Park Avenue Bank $953.3 Bank of the Ozarks $306.1
Cortez Community Bank $70.9 Florida Community Bank $18.6
First National Bank $352.0 Florida Community Bank $42.9
First Choice Community $308.5 Bank of the Ozarks $92.4
Heritage Banking $224.0 Trustmark National $49.1
Rosemount National $37.6 Central Bank $3.6
Nexity Bank $793.7 AloStar Bank of Commerce $175.4
New Horizons Bank $110.7 Citizens South Bank $30.9
Bartow County Bank $330.2 Hamilton State Bank $69.5
Superior Bank $3,000.0 Superior Bank, N.A. $259.6
Nevada Commerce Bank $144.9 City National Bank $31.9
Western Springs $186.8 Heartland Bank $31.0
Bank of Commerce $163.1 Advantage National $41.9
Legacy Bank $190.4 Seaway Bank and Trust $43.5
First Nat'l Bank of Davis $90.2 The Pauls Valley National $26.5
Valley Community Bank $123.8 First State Bank $22.8
Citizens Bank $214.3 Heritage Bank $59.4
San Luis Trust $332.6 First California $96.1
Habersham Bank $387.6 SCBT National $90.3
Charter Oak Bank $120.8 Bank of Marin $21.8
Sunshine State $125.5 Premier American $30.0
Badger State Bank $83.8 Royal Bank $17.5
Canyon National $210.9 Pacific Premier Bank $10.0
Peoples State Bank $390.5 First Michigan Bank $87.4
American Trust Bank $238.2 Renasant Bank $71.5
Community First $51.1 Northbrook Bank $11.7
North Georgia Bank $153.2 BankSouth $35.2
First Community Bank $2,310.0 U.S. Bank, N.A. $260.0
FirsTier Bank $781.5 No Acquirer $242.6
Evergreen State $246.5 McFarland State $22.8
The First State Bank $43.5 Bank 7 $20.1
The Bank of Asheville $195.1 First Bank $56.2
CommunitySouth Bank $440.6 Certus Bank $46.3
Enterprise Banking $100.9 [No Acquirer] $39.6
United Western Bank $2,050.0 First-Citizens Bank $312.8
Oglethorpe Bank $230.6 Bank of the Ozarks $80.4
Legacy Bank, Arizona $150.6 Enterprise Bank & Trust $27.9
First Commercial Bank $598.5 First Southern Bank $78.0
In 2010, there were 157 failed banks, compared with 140 in 2009
and just 25 for 2008.
A complete list of banks that failed since 2000 is available at:
http://www.fdic.gov/bank/individual/failed/banklist.html
884 Banks in Problem List
The FDIC said for all of 2010, mergers absorbed 197 institutions,
while 157 insured commercial banks and savings institutions
failed. This is the largest annual number of bank failures since
1992, when 181 institutions failed.
The number of institutions on the FDIC's "Problem List" increased
from 860 in the third quarter to 884 in the fourth quarter. There
were 775 banks on the list at the end of the first quarter and 829
at June 30.
Total assets of "problem" institutions increased from $379 billion
at Sept. 30, 2010, to $390 billion at the end of the fourth
quarter. The assets though are below the $403 billion reported at
year-end 2009.
FDIC Chairman Sheila C. Bair notes the rate of increase in the
number of "problem" banks has declined in each of the past four
quarters. Thirty insured institutions failed during the fourth
quarter, bringing the total number of failures for the full year
to 157. "As we have repeatedly stated, we believe that the number
of failures peaked in 2010, and we expect both the number and
total assets of this year's failures to be lower than last
year's," added Bair.
Problem Institutions Failed Institutions
-------------------- -------------------
Year Number Assets (Mil) Number Assets (Mil)
---- ------ ------------ ------ ------------
2010 884 $390,017 157 $92,085
2009 702 $402,800 140 $169,700
2008 252 $159,405 25 $371,945
2007 76 $22,189 3 $2,615
2006 50 $8,265 0 $0
2005 52 $6,607 0 $0
2004 80 $28,250 4 $170
Federal regulators assign a composite rating to each financial
institution, based upon an evaluation of financial and operational
criteria. The rating is based on a scale of 1 to 5 in ascending
order of supervisory concern. "Problem" institutions are those
institutions with financial, operational, or managerial weaknesses
that threaten their continued financial viability. Depending upon
the degree of risk and supervisory concern, they are rated either
a "4" or "5." The number and assets of "problem" institutions are
based on FDIC composite ratings. Prior to March 31, 2008, for
institutions whose primary federal regulator was the OTS, the OTS
composite rating was used.
* Ex-Kirkland Partner Pleads Not Guilty to Tax Charges
------------------------------------------------------
Eric Hornbeck at Bankruptcy Law360 reports that former Kirkland &
Ellis LLP bankruptcy partner Theodore L. Freedman pled not guilty
on Thursday in New York federal court to charges that he falsified
tax returns in an effort to avoid paying the government $1
million.
Mr. Freedman appeared flanked by his lawyer, Robert Cleary of
Proskauer Rose LLP, before U.S. Magistrate Judge James C. Francis,
Law360 relates.
* Terra Firma Lead of Investor Relations Hewett Joins SVP
---------------------------------------------------------
Dow Jones' DBR Small Cap reports that Michael Hewett, the former
head of investor relations at Terra Firma Capital Partners Ltd.,
has re-emerged at global turnaround firm Strategic Value Partners,
heading up business development in Europe and the Middle East.
* BOND PRICING -- For Week From July 4 - 8, 2011
------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
ACARS-GM 8.10 6/15/2024 1.00
AHERN RENTALS 9.25 8/15/2013 45.25
AMBAC INC 5.95 12/5/2035 13.25
AMBAC INC 6.15 2/7/2087 1.75
AMBAC INC 7.50 5/1/2023 15.25
AMBAC INC 9.50 2/15/2021 13.50
BANK NEW ENGLAND 8.75 4/1/1999 13.50
BANK NEW ENGLAND 9.88 9/15/1999 14.00
BANKUNITED FINL 3.13 3/1/2034 7.10
BANKUNITED FINL 6.37 5/17/2012 7.00
BLOCKBUSTER INC 11.75 10/1/2014 5.00
BURLINGTON/SANTA 6.75 7/15/2011 98.99
CAPMARK FINL GRP 5.88 5/10/2012 59.75
CHAMPION ENTERPR 2.75 11/1/2037 1.50
CS FINANCING CO 10.00 3/15/2012 3.00
DG-CALL07/11 10.63 7/15/2015 105.62
DIRECTBUY HLDG 12.00 2/1/2017 39.00
DIRECTBUY HLDG 12.00 2/1/2017 39.00
DUNE ENERGY INC 10.50 6/1/2012 68.50
EDDIE BAUER HLDG 5.25 4/1/2014 5.63
ELEC DATA SYSTEM 3.88 7/15/2023 95.00
EVERGREEN SOLAR 4.00 7/15/2020 13.00
EVERGREEN SOLAR 13.00 4/15/2015 37.25
F-CALL07/11 6.15 1/20/2015 99.90
FAIRPOINT COMMUN 13.13 4/2/2018 1.25
FRANKLIN BANK 4.00 5/1/2027 7.00
GREAT ATLA & PAC 6.75 12/15/2012 31.50
GREAT ATLANTIC 9.13 12/15/2011 25.50
HARRY & DAVID OP 9.00 3/1/2013 11.50
INTL LEASE FIN 6.85 7/15/2011 99.76
KEYSTONE AUTO OP 9.75 11/1/2013 40.00
LEHMAN BROS HLDG 2.00 8/1/2013 24.38
LEHMAN BROS HLDG 3.00 11/17/2012 24.25
LEHMAN BROS HLDG 4.70 3/6/2013 23.55
LEHMAN BROS HLDG 4.80 2/27/2013 24.75
LEHMAN BROS HLDG 4.80 3/13/2014 25.75
LEHMAN BROS HLDG 5.00 1/22/2013 24.50
LEHMAN BROS HLDG 5.00 2/11/2013 24.50
LEHMAN BROS HLDG 5.00 3/27/2013 24.50
LEHMAN BROS HLDG 5.00 8/3/2014 24.25
LEHMAN BROS HLDG 5.00 8/5/2015 25.15
LEHMAN BROS HLDG 5.10 1/28/2013 24.50
LEHMAN BROS HLDG 5.15 2/4/2015 22.50
LEHMAN BROS HLDG 5.25 2/6/2012 25.63
LEHMAN BROS HLDG 5.25 1/30/2014 20.00
LEHMAN BROS HLDG 5.25 2/11/2015 25.00
LEHMAN BROS HLDG 5.50 4/4/2016 24.75
LEHMAN BROS HLDG 5.75 5/17/2013 25.00
LEHMAN BROS HLDG 6.00 7/19/2012 24.50
LEHMAN BROS HLDG 6.20 9/26/2014 26.50
LEHMAN BROS HLDG 6.63 1/18/2012 25.63
LEHMAN BROS HLDG 6.80 9/7/2032 15.00
LEHMAN BROS HLDG 7.00 6/26/2015 23.55
LEHMAN BROS HLDG 7.00 12/18/2015 25.00
LEHMAN BROS HLDG 8.05 1/15/2019 23.50
LEHMAN BROS HLDG 8.40 2/22/2023 22.24
LEHMAN BROS HLDG 8.50 8/1/2015 23.75
LEHMAN BROS HLDG 8.80 3/1/2015 24.15
LEHMAN BROS HLDG 9.50 1/30/2023 22.63
LEHMAN BROS HLDG 9.50 2/27/2023 22.63
LEHMAN BROS HLDG 10.00 3/13/2023 22.63
LEHMAN BROS HLDG 10.38 5/24/2024 25.25
LEHMAN BROS HLDG 11.00 6/22/2022 24.50
LEHMAN BROS HLDG 11.00 7/18/2022 24.50
LEHMAN BROS HLDG 18.00 7/14/2023 24.63
LEHMAN BROS INC 7.50 8/1/2026 14.75
LIFETIME BRANDS 4.75 7/15/2011 99.71
LIFETIME BRANDS 4.75 7/15/2011 100.06
LOCAL INSIGHT 11.00 12/1/2017 2.25
MAJESTIC STAR 9.75 1/15/2011 14.75
MOHEGAN TRIBAL 8.00 4/1/2012 83.50
NBC ACQ CORP 11.00 3/15/2013 8.64
NEBRASKA BOOK CO 8.63 3/15/2012 74.88
NEWPAGE CORP 10.00 5/1/2012 30.00
NEWPAGE CORP 12.00 5/1/2013 8.75
PROPEX FABRICS 10.00 12/1/2012 1.00
RASER TECH INC 8.00 4/1/2013 29.76
RESTAURANT CO 10.00 10/1/2013 11.00
RIVER ROCK ENT 9.75 11/1/2011 87.75
SONAT INC 7.63 7/15/2011 99.94
SPHERIS INC 11.00 12/15/2012 1.88
TEXAS COMP/TCEH 7.00 3/15/2013 29.00
THORNBURG MTG 8.00 5/15/2013 11.50
TIMES MIRROR CO 7.25 3/1/2013 50.00
TOUSA INC 9.00 7/1/2010 15.00
TOYOTA-CALL07/11 6.00 7/20/2027 100.15
TRANS-LUX CORP 8.25 3/1/2012 14.00
TRANS-LUX CORP 9.50 12/1/2012 15.25
TRICO MARINE 3.00 1/15/2027 1.25
TRICO MARINE SER 8.13 2/1/2013 8.50
VIRGIN RIVER CAS 9.00 1/15/2012 47.25
WCI COMMUNITIES 4.00 8/5/2023 1.57
WCI COMMUNITIES 7.88 10/1/2013 0.55
WESCO INTL 1.75 11/15/2026 89.00
WII COMPONENTS 10.00 2/15/2012 85.00
WILLIAM LYON INC 10.75 4/1/2013 50.45
WILLIAM LYONS 7.63 12/15/2012 56.00
WINDERMERE BAPT 7.70 5/15/2012 21.00
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2011. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
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are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***