/raid1/www/Hosts/bankrupt/TCR_Public/110909.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, September 9, 2011, Vol. 15, No. 250
Headlines
ACCESS INSURANCE: Sec. 341 Creditors' Meeting Set for Oct. 3
AIRPLAY DIRECT: Three Former Executives Push Chapter 11 Filing
ALL YOU: U.S. Trustee Objects to Confirmation of Debtor's Plan
ALL YOU: Debtor Seeks Denial of First Security's Plan
ALLEN CAPITAL: Secured Creditors Want to Propose Alternative Plan
ALEXANDER GALLO: Files for Chapter 11 to Sell Assets to Bayside
ALEXANDER GALLO: Case Summary & 30 Largest Unsecured Creditors
ALT HOTEL: Depositions on Allerton Hotel's Value Completes October
ALT HOTEL: Allerton Hotel Valuation Documents Confidential
AMR CORP: Reports 85.3 Percent Load Factor in August
BATH BRIDGEWATER: Case Summary & 7 Largest Unsecured Creditors
BERNARD L. MADOFF: Trustee Asks 2nd Cir. to Toss Rehearing Bid
BERNARD L. MADOFF: Ex-Milberg Partner Claims Ignorance of Scheme
BERNARD L. MADOFF: Judge Rejects $62.5 Million Deal With HSBC
BERNARD L. MADOFF: Insurers Balk at Trustee's $1BB Tremont Deal
BORDERS GROUP: Agree Realty Says 2 Stores to Be Sold for $4.6MM
CARGO TRANSPORTATION: Could Be Out of Chapter 11 Next Week
CARGO TRANSPORTATION: GE Capital to Take Over Great Dane Trailer
CATASYS INC: 1-for-40 Reverse Stock Split Effective Sept. 6
CDC PROPERTIES: Plan Confirmation Hearing Scheduled for Oct. 7
CENTRALIA OUTLETS: Out of Bankruptcy; Owners Remain
CENTURION PROPERTIES: Court Okays Dan Gorcyzki as Finance Advisor
CHARLESTON ASSOCIATES: Wants Plan Exclusivity Until Sept. 30
CHEN'S BROTHER: Voluntary Chapter 11 Case Summary
CHURCH ON THE MOVE: Voluntary Chapter 11 Case Summary
COLLIER LAND: Hearing Today on Bank's Ch. 7 Conversion Motion
COLONIAL PROPERTIES: Moody's Affirms 'Ba1' Senior Debt Rating
CONQUEST PETROLEUM: CFO and Director R.C. Johnson Resigns
COOPERSMITH SIMON: Case Summary & 7 Largest Unsecured Creditors
DENNIS GIBBS: Landmark Lynchburg Library Up for Auction
DIAMOND RESORTS: Moody's Affirms 'B3' CFR; Outlook Negative
EINSTEIN MOOMJY: Lowenstein Sandler Retained Counsel to Committee
ELCOTEQ INC: Involuntary Chapter 11 Case Summary
EVERGREEN ENERGY: Libra Stake at 15.4% as of Aug. 25
FOUR SEASONS: JPMorgan Chase Seeks Stay Relief to Pursue Remedies
FRAZER/EXTON: Disclosure Statement Hearing Continued Until Oct. 5
FULLER-AUSTIN: Stonewall to Pay $21.5MM to End Asbestos Suit
G&S LIVINGSTON: Plan & Disclosures Hearing Begins Sept. 14
GENTA INC: Completes Financing of up to $12.7 Million
GRAYMARK HEALTHCARE: Mark Moore Discloses 8.26% Equity Stake
GREENWICH SENTRY: Disclosure Hearing Rescheduled to Sept. 20
GREYSTONE PHARMA: Can Sell QuickDerm to Vet Care, Cash Restricted
H.J. HEINZ FINANCE: Fitch Rates Series B Preferred Stock at 'BB+'
HAWAII MEDICAL: Patient Care Umpire Taps Lyons Brandt as Counsel
HAWKER BEECHCRAFT: "KJ" Tjon Appointed Chief Financial Officer
HOLLIFIELD RANCHES: Committee & Keyank Object to Plan Disclosures
J.C. EVANS: To Employ Buttler Burgher as Real Estate Appraiser
J.C. EVANS: Hires Tittle Advisory to Solicit DIP Financing
JULIUS GRAY: Dist. Ct. Affirms Dismissal of Bankruptcy Case
KEVEN MCKENNA: Accuses U.S. Trustee of "Seeking Revenge"
KT SPEARS: Wants First Savers' Request for Stay Relief Denied
KT SPEARS: Opposes RBC Centura's Case Dismissal Request
LBP PROPERTIES: Voluntary Chapter 11 Case Summary
LEE ENTERPRISES: Has Out-of-Court Deal With Lenders
LEHMAN BROTHERS: St. Note Holders Concerns' Nearing Resolution
LEVELLAND/HOCKLEY: Withdraws Motion to Revise Tenaska Agreement
L.I.F.T. LLC: Summoned to Answer Bankruptcy Allegations
LIGHTHOUSE FINANCIAL: Lindenwood Associates Appointed as Trustee
LONGVIEW ALUMINUM: Member With Voting Power Still Insider
LOS ANGELES DODGERS: Committee Hiring Lazard as Investment Bankers
MADISON 92: Hotel Case Facing Dismissal, Chapter 11 Trustee
MARCO POLO: Hearing on DIP Loan, Cash Collateral Set for Sept. 15
MARTHA REYNOLDS TRUST: Not Eligible to Chapter 12 Conversion
METROGAS S.A.: Posts ARS17.7MM Net Loss in 6 Months Ended June 30
MOHEGAN TRIBAL: Four Members Elected to Tribal Council
MOORE SORRENTO: Has Until Sept. 14 to Files Schedules & Statement
NATIONAL ENVELOPE: Tosses Out Plea to Use Cash Collateral
NATIONAL LABORATORY: Voluntary Chapter 11 Case Summary
NEBRASKA BOOK: Court Approves Plan Support Agreement
NEWPAGE CORP: Receives Approval of First Day Motions
NNN CHATSWORTH: Voluntary Chapter 11 Case Summary
PHOENIX CENTER: Council Okays Land Transfer
PJ FINANCE: Lender Gets Court to Grant Short Exclusivity
PLATINUM PROPERTIES: Can Deliver Amended Forbearance Deal to BofA
POINT BLANK: Wants Liquidation of LifeStone Materials Approved
POINT BLANK: Sept. 15 Hearing on Barrier-Led Sale Protocol
PRECISION OPTICS: Maturity of $600,000 Note Extended to Sept. 30
PRESTON/WADE, L.P.: Case Summary & 10 Largest Unsecured Creditors
PRIDE EMS: Case Summary & 7 Largest Unsecured Creditors
QUANTUM FUEL: H&W Replaces E&Y as New Independent Accountants
QUINCY MEDICAL: Ombudsman Seeks to Retain Counsel and Advisor
R&G FINANCIAL: May Solicit Ch. 11 Plan Acceptances Until Oct. 31
RASER TECHNOLOGIES: Court Confirms Plan of Reorganization
ROBB & STUCKY: Gets Court Approval to Commence Case Dismissal
ROBB & STUCKY: U.S. Trustee Objects to Approval of BofA Agreement
ROUND TABLE: Has Until March 2012 to Decide on Leases
RQB RESORT: Marriott Unit Supports Push for Trustee
SAAB AUTOMOBILE: Files for Creditor Protection to Raise Funds
SAMSHI HOMES: Court Allows Bank Lender to Commence Foreclosure
SBARRO INC: Presses for Chapter 11 Auction Plan
SBARRO INC: Committee Wants Flexible Bidding Procedures
SEAHAWK DRILLING: Confirmation Hearing Rescheduled to Sept. 19
SOLYNDRA INC: Rep. Stark Urges Benefits for 1,100 Fired Employees
SOLYNDRA LLC: Judge Approves $2.5MM DIP Loans to Fund Sale
SOLYNDRA INC: Faces Lawsuit From Laid Off Employee
SPRING POINTE: Voluntary Chapter 11 Case Summary
SPRINGLEAF FINANCE: Fitch Downgrades Long-Term IDR to 'CCC'
SUGARLEAF TIMBER: Court Approves Cantrell Rea as Appraiser
SUGARLEAF TIMBER: Court to Hear Farm Credit's Stay Bid on Nov. 9
SUMMER VIEW: Has Until Sept. 21 to File Schedules and Statement
SUN HB: Voluntary Chapter 11 Case Summary
TEN X: Hires Gould & Ratner as Special Real Estate Counsel
TENET HEALTHCARE: Moody's Affirms B2 CFR; Outlook Positive
TIB FINANCIAL: NAFH Board Adopts Merger with TIB
THORNBURG MORTGAGE: Countrywide, BofA Get More Time to Respond
UNIVERSAL HEALTH: Fitch Affirms Issuer Default Rating at 'BB-'
WHITTEN ENTERPRISES: Case Summary & 15 Largest Unsecured Creditors
* David C. Wolinsky Joins Otterbourg
* Moody's Trims Outlook for North American Parts Suppliers
* BOOK REVIEW: The Outlaw Bank
*********
ACCESS INSURANCE: Sec. 341 Creditors' Meeting Set for Oct. 3
------------------------------------------------------------
The U.S. Trustee in Reno, Nevada, will convene a meeting of
creditors pursuant to Sec. 341 of the Bankruptcy Code in the case
of Access Insurance Services, Inc., on Oct. 3, 2011, at 3:00 p.m.
at Young Bldg., Rm 3024.
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. The court, after notice and a hearing, may order that the
United States trustee not convene the meeting if the debtor has
filed a plan for which the debtor solicited acceptances before
filing the case.
The last day to file proofs of claim in the case is Jan. 1, 2012.
Access Insurance Services, Inc., in Reno, Nevada, filed for
Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 11-52830) on
Sept. 1, 2011. Judge Bruce T. Beesley presides over the case.
Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd.,
serves as the Debtor's bankruptcy counsel. In its petition, the
Debtor estimated $10 million to $50 million in assets and debts.
The petition was signed by Jeffrey P. Shaffer, director.
AIRPLAY DIRECT: Three Former Executives Push Chapter 11 Filing
--------------------------------------------------------------
A trio of former executives from Nashville-based AirPlay Direct is
attempting to force the subscription-based music service into
Chapter 11 bankruptcy in Nashville, Tennessee, according to
reporting by Annie Johnson, staff reporter at the Nashville
Business Journal.
The executives -- Clif Doyal, former executive vice president and
editor of AirPlay's magazine Direct Buzz, Scott Welch, former
president of the Company, and Raleigh Squires, former operations
manager -- are seeking a combined $208,000 in accrued compensation
they alleged was never received, the report relates, citing court
documents.
AirPlay Direct, the Business Journal relates, is run by CEO Robert
Weingartz, whom the petitioners allege in court documents has made
"multiple threatening remarks... regarding the company and has
specifically made reference to sabotaging the alleged debtor if
steps were taken to remove him from power."
Also listed as a creditor is Sussman & Associates for more than
$27,000 of past due accounting invoices.
The former executives, according to the report, are seeking the
appointment of a bankruptcy trustee in the case that could allow
an independent third party to analyze the financial situation of
AirPlay and evaluate interim financing needs.
The former executives filed an involuntary Chapter 11 petition for
AirPlay Direct, LLC (Bankr. M.D. Tenn. Case No. 11-08916) in
Nashville, Tennessee, on Sept. 6, 2011.
The Petitioners are represented by:
ROBERT J WELHOELTER
Robert J. Welhoelter, Attorney at Law
320 31st Avenue North, Suite A
Nashville, TN 37203
Tel: (615) 760-5871
Fax: 615-760-5873
E-mail: rjwelho@gmail.com
ALL YOU: U.S. Trustee Objects to Confirmation of Debtor's Plan
--------------------------------------------------------------
Nancy J. Gargula, the U.S. Trustee for Region 13, objects to
confirmation of the proposed Chapter 11 Plan of Reorganization of
All You, LLC, because:
* The proposed Plan does not comply with the provisions of
Section 1129(a)(5)(B) of the Bankruptcy Code by disclosing
the identity of any insider to be employed or retained by
the reorganized Debtor and providing the nature of any
compensation to be paid to the insider;
* The Debtor failed to file a monthly report for the month
of June 2011;
* The Plan provides that the Debtor "must make quarterly
payments to the U.S. Trustee's Office based upon the
disbursements of the Debtors for the past quarter. . ."
Since filing the case, the Debtor has, in fact, made
payment to the U.S. Trustee of quarterly fees totaling
$1,295, having paid $325 for three of the quarters and
$320 for the 2nd quarter of 2011. However, based on
disbursement information provided in the Debtor's monthly
operating reports, quarterly fees have been assessed
ranging from $650 to $975 in the applicable quarters.
The Debtor's failure to pay all accrued quarterly fees as
the same come due has resulted in a delinquency in
quarterly fee payments amounting to $1,955 through the 2nd
quarter of 2011. Pursuant to Section 1129(a)(12), the
U.S. Trustee objects to confirmation of the Debtor's Plan
until all delinquent quarterly fees are paid; and
* The Debtor failed to provide the U.S. Trustee with proof
of adequate insurance coverage on its assets to protect
the interests of creditors of its estate.
A hearing will be held on Sept. 20, 2011, at 9:00 a.m.
Competing Plans
The Debtor filed the original version of its plan on March 10, and
First Security filed its own plan on March 11. For reasons stated
in oral ruling, the Bankruptcy Court denied confirmation of both
competing plans without prejudice. The Court also overruled First
Security's objection to the Debtor's Plan as moot.
The Debtor filed a revised plan and disclosure statement dated
May 20. First Security filed its own revised plan and disclosure
statement dated May 25.
The Debtor's previous Chapter 11 Plan proposed to sell (or, if it
was unable to sell, surrender to First Security) certain of its
real properties other than the Tontitown Property and the property
located at 2325 N. College, Fayetteville, Arkansas, and to use the
amounts realized from the properties to reduce its debt to First
Security. The Debtor's plan then proposed to pay extra rentals to
First Security over a two-year period, and then emerge from
bankruptcy and retain the Tontitown Property and College Avenue
Property free and clear of its creditors' liens.
First Security's previous plan -- and its current proposed plan --
proposes to liquidate the Debtor's real estate assets. First
Security continues to contend that because it is fully secured,
the Debtor may not cram down its debt to First Security and cannot
retain the Tontitown Property and College Avenue Property, free
and clear of First Security's lien unless it is able to pay its
entire Debt to First Security through the bankruptcy plan. First
Security's plans to contend that the Debtor's goal of retaining
the Tontitown Property cannot be accomplished mathematically based
on (i) the sheer amount of First Security's lien, and (ii) the
relatively small amount of the monthly rental payments it can
receive from the Tontitown Property and other properties.
About All You, LLC
Fayetteville, Arkansas-based All You, LLC, owner of several
investment properties, filed for Chapter 11 bankruptcy protection
(Bankr. W.D. Ark. Case No. 10-74049) on Aug. 2, 2010. Don Brady,
Esq., at Blair, Brady & Henson represents the Debtor in its
restructuring effort. The Debtor disclosed $10.98 million in
assets and $5.51 million in liabilities as of the Petition Date.
The U.S. Trustee for Region 16 was unable to form an official
committee of unsecured creditors for the Chapter 11 case.
Both the Debtor; and First Security Bank, the largest creditor of
Debtor and holder of a mortgage lien on all of the Debtor's real
properties, have filed competing Chapter 11 plans in the
bankruptcy case. The Court rejected both plans at a hearing on
April 20, 2011.
First Security Bank has asked the bankruptcy court to enter an
order converting the case to Chapter 7 liquidation. A hearing on
the request is scheduled for June 29.
ALL YOU: Debtor Seeks Denial of First Security's Plan
-----------------------------------------------------
All You, LLC, rejects the proposed plan of liquidation of First
Security Bank and asks the U.S. Bankruptcy Court for the Western
District of Arkansas to deny First Security's Plan because:
* The Plan only benefits First Security Bank;
* Unsecured creditors and equity holders will only get paid
if the Bank sells the property for more than what is owed
the bank;
* There is a substantial equity cushion in the property.
The Debtor is now making payments in excess of the monthly
interest due on the note and, therefore, the Bank is being
adequately protected;
* First Security's Plan would effectively displace many
tenants, causing economic harm to the tenants; and
* First Security's Plan is too harsh of remedy when there is
a viable alternative.
Competing Plans
The Debtor filed the original version of its plan on March 10, and
First Security filed its own plan on March 11. For reasons stated
in oral ruling, the Bankruptcy Court denied confirmation of both
competing plans without prejudice. The Court also overruled First
Security's objection to the Debtor's Plan as moot.
The Debtor filed a revised plan and disclosure statement dated
May 20. First Security filed its own revised plan and disclosure
statement dated May 25.
The Debtor's previous Chapter 11 Plan proposed to sell (or, if it
was unable to sell, surrender to First Security) certain of its
real properties other than the Tontitown Property and the property
located at 2325 N. College, Fayetteville, Arkansas, and to use the
amounts realized from the properties to reduce its debt to First
Security. The Debtor's plan then proposed to pay extra rentals to
First Security over a two-year period, and then emerge from
bankruptcy and retain the Tontitown Property and College Avenue
Property free and clear of its creditors' liens.
First Security's previous plan -- and its current proposed plan --
proposes to liquidate the Debtor's real estate assets. First
Security continues to contend that because it is fully secured,
the Debtor may not cram down its debt to First Security and cannot
retain the Tontitown Property and College Avenue Property, free
and clear of First Security's lien unless it is able to pay its
entire Debt to First Security through the bankruptcy plan. First
Security's plans to contend that the Debtor's goal of retaining
the Tontitown Property cannot be accomplished mathematically based
on (i) the sheer amount of First Security's lien, and (ii) the
relatively small amount of the monthly rental payments it can
receive from the Tontitown Property and other properties.
About All You, LLC
Fayetteville, Arkansas-based All You, LLC, owner of several
investment properties, filed for Chapter 11 bankruptcy protection
(Bankr. W.D. Ark. Case No. 10-74049) on Aug. 2, 2010. Don Brady,
Esq., at Blair, Brady & Henson represents the Debtor in its
restructuring effort. The Debtor disclosed $10.98 million in
assets and $5.51 million in liabilities as of the Petition Date.
The U.S. Trustee for Region 16 was unable to form an official
committee of unsecured creditors for the Chapter 11 case.
Both the Debtor; and First Security Bank, the largest creditor of
Debtor and holder of a mortgage lien on all of the Debtor's real
properties, have filed competing Chapter 11 plans in the
bankruptcy case. The Court rejected both plans at a hearing on
April 20, 2011.
First Security Bank has asked the bankruptcy court to enter an
order converting the case to Chapter 7 liquidation. A hearing on
the request is scheduled for June 29.
ALLEN CAPITAL: Secured Creditors Want to Propose Alternative Plan
-----------------------------------------------------------------
Secured creditors BBVA Compass Bank, and secured creditors
identified as the Pool 2 Secured Creditors and the Pool 4 ask the
U.S. Bankruptcy Court for the Northern District of Texas to (i)
terminate DLH Master Land Holding, LLC and Allen Capital Partners,
LLC's exclusive periods to allow other parties-in-interest to
offer alternative plans of reorganization; and (ii) establish
procedures for parties-in-interest to present competing plan
proposals.
The Secured Creditors relate that the Court ordered the Debtors
and the secured creditors to mediation regarding the secured
creditors' filed objections to the Plan. However, the Court also
indicated that if the mediation was unsuccessful, the secured
creditors could urge their objection and again request that the
Court terminate the Debtors' exclusive periods.
The Debtors and the secured creditors were unable to reach any
agreement regarding the Debtors' Plan through the Aug. 3, 2011,
mediation with D. Michael Lynn, the court-appointed mediator.
Upon the termination of the Debtors' exclusive periods, the
Secured Creditors say they would propose an alternative plan
sponsored by Koch Equity Development, LLC or another interested
party. The KED-sponsored plan or transaction would provide a
higher and/or better recovery for the Debtors' secured and
unsecured creditors than what is being offered by the Debtors'
Plan, according to the Secured Creditors.
According to the Secured Creditors, the Debtors' Plan which
proposes a slow liquidation of the Debtors' estates, is still not
feasible or confirmable. The Secured Creditors believe that the
Debtors have been provided with ample opportunity to propose a
plan that is feasible and to resolve the secured creditors'
objections to the Plan.
In conjunction with termination of exclusivity, the Secured
Creditors propose that procedures be implemented to allow for
alternative plan proposals to be considered. The Secured
Creditors request that the Court require the Debtors to provide
parties-in-interest access to the necessary data and diligence
materials in the possession of the Debtors and their advisors.
The secured creditors also request that the Court establish a
deadline for the submission of alternative plan proposals by
parties-in-interest.
Pool 2 and Pool 4 secured creditors are represented by:
Robert Yaquinto, Jr., Esq.
SHERMAN & YAQUINTO, L.L.P.
509 N. Montclair Avenue
Dallas, TX 75208-5498
Tel: (214) 942-5502
Fax: (214) 946-7601
Compass Bank is represented by:
Kenneth Stohner, Jr., Esq
JACKSON WALKER L.L.P.
901 Main Street, Suite 6000
Dallas, Texas 75202
Tel: (214) 953-6000
Fax: (214) 953-5822
E-mail: kstohner@jw.com
About Allen Capital
Allen Capital Partners LLC and subsidiary DLH Master Land Holding
LLC, are the developers of Dallas Logistics Hub, a 6,000-acre
multimodal logistics park 12 miles (19 kilometers) from downtown
Dallas.
Allen Capital Partners, LLC, dba The Allen Group, filed for
Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-
30562) on Jan. 25, 2010. Mark MacDonald, Esq., at MacDonald +
MacDonald, P.C., represents the Debtor. Lain, Faulkner & Co. is
the Debtor's financial advisor. The Company disclosed
$220,325,201 in assets and $160,622,236 in liabilities as of the
Chapter 11 filing.
The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The
Allen Group -- filed a separate Chapter 11 bankruptcy petition.
Another affiliate, Visalia, California-based Richard S. Allen,
Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Texas Case No. 10-33211) on May 3, 2010. Patrick J. Neligan, Jr.,
Esq., at Neligan Foley LLP, represents the Debtor. The Company
disclosed $76,158,469 in assets and $53,728,982 in liabilities as
of the petition date.
The Debtors' proposed Reorganization Plan contemplates that the
Debtors will obtain sufficient exit financing from sales and loans
from insiders to enable them to pay all Administrative and non-tax
Priority Claims in full on the effective date.
No trustee or examiner has been appointed in any of the cases
administratively consolidated with those of the Debtors.
An Official Committee of Unsecured Creditors has been appointed.
ALEXANDER GALLO: Files for Chapter 11 to Sell Assets to Bayside
---------------------------------------------------------------
Alexander Gallo Holdings LLC, along with affiliates, filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-14220) on
Sept. 7 in New York, to sell its court reporting business.
Alexander Gallo is the largest full service, IT-enabled court
reporting and litigation support services company in the United
States. AGH offers court reporting, litigation support, trial
software and other similar services and has the only true national
footprint in its market, with approximately 55 offices located
throughout the United States, and a preferred provider network
which serves as an extension of the Debtors' geographic reach.
Founded in 1999 by Alexander J. Gallo, a former court reporter,
AGH has made 18 acquisitions since 2003. Mr. Gallo has remained
as CEO.
The Debtors will sell the business via 11 U.S.C. Sec. 363 to
Bayside Capital Inc., which had acquired $22 million in second-
lien debt. The price wasn't disclosed.
Alexander Gallo disclosed assets of $208 million and debt totaling
$258 million as of June 30, 2011. Liabilities include $47 million
on a first-lien revolving credit and term loan where Wells Fargo
Bank NA is agent. In addition to the second-lien debt held by
Bayside, there is $33 million in junior unsecured subordinated
notes owing to Harvest Equity Partners LLC plus another $148
million in junior unsecured subordinated notes owing to insider
Gallo Holdings LLC.
Bayside will provide $20 million in financing for the Chapter 11
effort. The new loan will have a first priority lien on
unencumbered assets and a lien behind the first-lien debt.
The Debtors expect to pay $5,512,000 ($1,378,000/week) to
employees and $550,000 to business and financial consultants in
the 30-day period following the Chapter 11 filing. They estimate
total cash receipts of $11,772,000 and cash disbursements of
$15,985,000 in that 30-day period.
Gallo blamed the filing on the recession and the ensuing decline
in litigation. Revenue in the last year declined 20.9%, a court
filing says. Revenues for the six month period ending June 30,
2011, were down 20.9% as compared to the same period in 2010.
Marietta, Georgia-based Alexander Gallo calls itself "the nation's
leading privately owned court reporting and litigation support
services company," according to its Web site.
Marc L. Pfefferle, a partner with Carl Marks Advisory Group LLC,
the Chief Restructuring Advisor for the Debtors, said the Debtors'
operating revenues and profitability have declined due to
macroeconomic difficulties and the economic downturn encountered
over the past few years.
"As the number of lawsuit filings and depositions decreased
because of the economic downturn, law firms and corporations have
scaled back on outsourcing litigation support services, court
reporting services, and trial software programs," he said.
ALEXANDER GALLO: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Alexander Gallo Holdings, LLC
2700 and 2800 Centennial Tower
101 Marietta Street
Atlanta, GA
Bankruptcy Case No.: 11-14220
Affiliates filing separate Chapter 11 petitions:
Debtor Case No.
------ --------
AG/Sanction LLC 11-14223
D-M Information Systems, Inc. 11-14224
Esquire Deposition Services, LLC 11-14225
The Hobart West Group, Inc. 11-14226
Deponet, LLC 11-14227
Esquire Litigation Solutions, LLC 11-14228
Esquire Solutions, LLC 11-14229
Hobart West Solutions, LLC 11-14230
Set Depo, LLC 11-14234
Unlimited Languages, Inc. 11-14235
Type of Business: Alexander Gallo Holdings, LLC, is parent
company to the nation's leading
privately-owned court reporting and
litigation solutions companies, Esquire
Solutions and Sanction Solutions. Alexander
Gallo Holdings companies offer expertise in
Court reporting, legal video, hosted review,
electronic discovery and trial services across
its 55 offices in 23 states. The Company's
entrepreneurial strategies and focus on
superior client service has driven its
unparalleled growth since 1999.
Web site: http://www.alexandergalloholdings.com
Chapter 11 Petition Date: September 7, 2011
Bankruptcy Court: U.S. Bankruptcy Court
District of Southern District of New York
Bankruptcy Judge: Allan J. Grooper
Debtors'
General
Counsel: Thomas R. Califano, Esq.
Jeremy R. Johnson, Esq.
Daniel G. Egan, Esq.
DLA PIPER LLP (US)
1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 335-4500
Fax: (212) 335-4501
E-mail: thomas.califano@dlapiper.com
jeremy.johnson@dlapiper.com
daniel.egan@dlapiper.com
Debtors'
Corporate
Counsel: SQUIRE, SANDERS & DEMSEY (US) LLP
Debtors'
Financial
Advisor: GORDIAN GROUP, LLC
Debtors'
Chief
Restructuring
Advisor: CARL MARKS ADVISORY GROUP LLC
Debtors'
Claims
Agent: KURTZMAN CARSON CONSULTANTS LLC
Estimated Assets: $50 million to $100 million
Estimated Debts: $100 million to $500 million
The petitions were signed by Alexander J. Gallo, president and
CEO.
Consolidated List of 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Gallo Holdings, LLC, as Promissory $147,938,333
Note Holder Representative note
Accel-KKR Company, LLC
2500 Sand Hill Road, Suite 300
Menlo Park, CA 94025
Winston Noteholders, LLC Promissory $33,025,426
Harvest Equity Partners, LLC note
P.O. Box 1960
3 E. Marshall Street
Middleburg, VA 20118
Aptara, Inc. Trade Debt $994,959
3110 Fairview Park Dr.,
Ste 900
Falls Church, VA 22042-4534
UPS Trade Debt $733,246
P.O. Box 7247-0244
Philadelphia, PA 19170-0001
Kirkland & Ellis Professional $558,947
300 North LaSalle fees
Chicago, IL 60654
Atlanta Centennial, LLC Real Property $530,890
c/o Jackson Oats Shaw lease
Corporate Property Management
Suite 3325
Centennial Tower
101 Marietta Street
One Penn Plaza LLC Real Property $524,699
c/o Vornado Realty Trust lease
888 Seventh Avenue
New York, NY 10019
Accel-KKR Company, LLC Advance $416,832
2500 Sand Hill Road
Suite 300
Menlo Park, CA 94025
Live Nation Worldwide, Inc. Real property $411,509
2000 West Loop South lease
Houston, TX 77207
AT&T Utility $406,757
P.O. Box 5094
Carol Stream, IL 60197-5094
Legal Reprographics, Inc. Promissory $377,727
13151 Stone Cannon Road note
Poway, CA 92064
Receivable Management Services Trade Debt $367,808
P.O. Box 8500-55028
Philadelphia, PA 19178-5028
Catalyst Repository Systems, Trade Debt $364,531
Inc.
1860 Blake Street, Ste 700
Denver, CO 80202
311 West Monroe-VEF VI, LLC Real property $336,485
c/o VEF Advisors, LLC lease
3340 Peachtree Road, NE
TP 100, Suite 1600
Atlanta, GA 30326
Banc of America Leasing Equipment lease $270,000
c/o Swanson Martin & Bell, LLP
330 N. Wabash, Suite 3300
Chicago, Illinois 60611
Chippewa Enterprises, Inc. Real property $196,326
lease
Exact Software North Trade debt $193,324
America, Inc.
GE Capital Equipment lease $176,719
Yes Video Trade debt $168,063
Aetna Trade debt $167,537
McKenna Long & Aldridge Professional $163,024
fees
SohoFile Trade debt $161,541
Chamber Building L.P. Real property $161,115
Lease
Softchoice Corporation Trade debt $140,759
Network Deposition Services Reporting $131,859
Xerox Corporation Equipment lease $130,457
523 Pacific Center Associates Real property $120,732
lease
Bennett Thrasher PC Professional $115,046
Fees
Miller Heiman Consulting $111,822
Services
Ajilon Finance Staffing Services $104,314
ALT HOTEL: Depositions on Allerton Hotel's Value Completes October
------------------------------------------------------------------
At DiamondRock Alberton Owner, LLC's behest, Judge A. Benjamin
Goldgar of the U.S. Bankruptcy Court for the Northern District of
Illinois set a fact and expert discovery schedule in connection
with ALT Hotel, LLC's valuation motion.
The Debtor filed a motion seeking to establish pre-hearing
procedures and deadlines for the purpose of determining the value
of the Debtor's sole asset, the Allerton Hotel. DiamondRock is a
senior secured creditor of the Debtor and holds a first mortgage
on the Hotel in the principal amount of not less than $69 million.
Counsel to DiamondRock, Aaron C. Smith, Esq., at Locke Lord
Bissell & Liddell LLP, in Chicago, Illinois --
asmith@lockelord.com -- stated that DiamondRock diligently moved
forward with fact discovery to prepare for a hearing to determine
the value of the Hotel. However, the Debtors' failure to abide by
its agreed-upon deadlines, and to timely provide discovery
responses is impeding DiamondRock's ability to prepare for the
hearing, he complained to the Court.
Against this backdrop, the Court set this expert and discovery
schedule for the Valuation Motion:
* September 9, 2011 -- Deadline for the Debtor to submit
its expert disclosures pursuant to
Rule 26(a)(2) of the Federal Rules
of Civil Procedure.
* September 9, 2011 -- Deadline for the Debtor to complete
document production.
* September 30, 2011 -- Deadline for DiamondRock to submit
Rule 26(a)(2) expert disclosures.
* October 14, 2011 -- Completion of all expert
depositions.
About ALT Hotel LLC
ALT Hotel LLC's sole asset is the Allerton Hotel located in the
"Magnificent Mile" area of Chicago. The Hotel is managed by Kokua
Hospitality, LLC, pursuant to a Hotel Management Agreement, dated
Nov. 9, 2006. Kokua is the exclusive manager and operator of the
Hotel, and receives management fees for its services, with the
amount of such fees directly linked to the annual performance of
the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT
Hotel.
ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case
No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides
over the case. Neal L. Wolf, Esq., at Neal Wolf & Associates,
LLC, in Chicago, Illinois, serves as bankruptcy counsel to the
Debtor. The Debtor disclosed $2,549,379 in total assets and
$69,808,995 in total liabilities as of the Chapter 11 filing.
Affiliate PETRA Fund REIT Corp. sought Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 10-15500) on Oct. 20, 2010.
ALT HOTEL: Allerton Hotel Valuation Documents Confidential
----------------------------------------------------------
Judge A. Benjamin Goldgar of the U.S. Bankruptcy Court for the
Northern District of Illinois entered a protective order
restricting the disclosure of information produced or otherwise
disclosed as agreed to among ALT Hotel, LLC, DiamondRock Allerton
Owner, LLC and Kokua Hospitality, LLC, in connection with the
valuation of the Debtor's sole asset, Allerton Hotel.
Counsel to the Debtor, Neal L. Wolf, Esq., at Neal Wolf &
Associates, LLC, in Chicago, Illinois -- told the Court that entry
of the protective order is warranted as most of the documents
sought by DiamondRock in connection with the valuation proceedings
contain confidential information of a highly sensitive nature.
Kokua, which manages the Hotel, has also raised similar issues
with respect to DiamondRock's subpoena and additional issues in
connection with the proprietary nature of certain of the documents
sought. He argued that general disclosure of this information
would adversely affect the operation of the Hotel. More
importantly, the disclosure would harm not only the Debtor but
also DiamondRock based on its asserted senior liens on the Hotel
and related property, he insisted.
A full-text copy of the agreed protective order is available for
free at: http://bankrupt.com/misc/ALTHotel_AgrProtOrder.pdf
About ALT Hotel LLC
ALT Hotel LLC's sole asset is the Allerton Hotel located in the
"Magnificent Mile" area of Chicago. The Hotel is managed by Kokua
Hospitality, LLC, pursuant to a Hotel Management Agreement, dated
Nov. 9, 2006. Kokua is the exclusive manager and operator of the
Hotel, and receives management fees for its services, with the
amount of such fees directly linked to the annual performance of
the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT
Hotel.
ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case
No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides
over the case. Neal L. Wolf, Esq., at Neal Wolf & Associates,
LLC, in Chicago, Illinois, serves as bankruptcy counsel to the
Debtor. The Debtor disclosed $2,549,379 in total scheduled assets
and $69,808,995 in total liabilities.
Affiliate PETRA Fund REIT Corp. sought Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 10-15500) on Oct. 20, 2010.
AMR CORP: Reports 85.3 Percent Load Factor in August
----------------------------------------------------
American Airlines reported an August load factor of 85.3 percent,
an increase of 0.7 points versus the same period last year.
Capacity decreased 1.2 percent, while traffic was 0.4 percent
lower year-over-year. International traffic increased by 3.0
percent on a capacity increase of 1.1 percent, resulting in an
increase in international load factor of 1.5 points versus August
of last year. Domestic load factor increased 0.2 points year-
over-year, as capacity and traffic decreased by 2.8 and 2.6
percent year-over-year respectively. American boarded 7.6 million
passengers in August.
A detailed traffic and capacity release is available for free at:
http://is.gd/ZBWWob
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.
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. The Company also reported a net loss of $722 million for
the six months ended June 30, 2011.
The Company's balance sheet at June 30, 2011, showed
$25.78 billion in total assets, $30.29 billion in total
liabilities, and a $4.51 billion stockholders' deficit.
* * *
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.
BATH BRIDGEWATER: Case Summary & 7 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Bath Bridgewater South, LLC
115 North Main Street
Bath, NC 27808
Bankruptcy Case No.: 11-06817
Chapter 11 Petition Date: September 6, 2011
Court: U.S. Bankruptcy Court
Eastern District of North Carolina (Wilson)
Judge: Stephani W. Humrickhouse
Debtor's Counsel: George M. Oliver, Esq.
OLIVER FRIESEN CHEEK, PLLC
P.O. Box 1548
New Bern, NC 28563
Tel: (252) 633-1930
Fax: (252) 633-1950
E-mail: efile@ofc-law.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 seven largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nceb11-06817.pdf
The petition was signed by John W. Baldwin, member manager.
Affiliate that previously filed separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Sailboat Properties, LLC 10-03718 05/07/11
BERNARD L. MADOFF: Trustee Asks 2nd Cir. to Toss Rehearing Bid
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the trustee for Bernard L. Madoff Investment
Securities Inc. isn't willing to give any slack to customers
asking the U.S. Court of Appeals in Manhattan to take a second
look at an Aug. 16 ruling. In papers filed Sept. 7, the trustee
told the 2nd Circuit in Manhattan that it should dismiss the
rehearing request because the customers are trying to evade a rule
limiting the petition to 15 pages. The trustee said in a separate
circuit court filing that the rehearing effort by itself is
preventing the distribution of another 11% toward customers'
claims.
The Second Circuit in August ruled that the bankruptcy judge was
correct in disregarding bogus account statements showing
fictitious profits and securities never actually purchased. The
circuit court said that customers' claims must be measured by the
amount of cash put in less the amount taken out.
Mr. Rochelle relates that a group of customers represented by
lawyer Helen Davis Chaitman filed papers on Aug. 30 asking all of
the active judges on the 2nd Circuit to rehear the case. On the
letterhead of the chief judge and the clerk of the appeals court,
the rehearing petition was rejected on several grounds. Among
other things, Ms. Chaitman was told that her papers exceeded the
15-page limitation. Ms. Chaitman was told to refile proper papers
by Sept. 5. Rather than cut down the length of the papers,
Ms. Chaitman deleted half of the arguments when she refiled on
Sept. 3. The arguments she deleted appeared in papers filed by
other lawyers.
The Madoff trustee, the report relates, filed papers Sept. 7
asking the appeals court to strike the rehearing petition as an
attempt at evading the rule limiting the length of rehearing
papers. The ruling in August meant that customers can't make
customer claims for fictitious profits, because Madoff never
actually purchased securities shown on customers' account
statements.
The appellate court already acted on a request made last week by
another creditor who sought an extra 30 days to file a rehearing
motion on the theory that the Securities Investor Protection Corp.
is a quasi-governmental entity. SIPC opposed the request, and the
circuit court Sept. 7 denied the motion for more time.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$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 July 15, 2011, a total of US$6.88 billion in claims by
investors has been allowed, with US$794.9 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.
BERNARD L. MADOFF: Ex-Milberg Partner Claims Ignorance of Scheme
----------------------------------------------------------------
Richard Vanderford at Bankruptcy Law360 reports that Melvyn Weiss,
the disgraced Milberg Weiss LLP partner who allegedly made
$12.5 million in fictitious profits by investing in Bernard L.
Madoff's Ponzi scheme, said Wednesday in New York bankruptcy court
that he is an "innocent victim" of Madoff.
Law360 relates that Mr. Weiss, who became infamous in the legal
world after pleading guilty to bribery charges, asked U.S.
Bankruptcy Judge Burton L. Lifland to let a district court with
more power hear the case that Madoff's trustee brought against
him.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$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 July 15, 2011, a total of US$6.88 billion in claims by
investors has been allowed, with US$794.9 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.
BERNARD L. MADOFF: Judge Rejects $62.5 Million Deal With HSBC
--------------------------------------------------------------
Eric Hornbeck at Bankruptcy Law360 reports that U.S. District
Judge Richard M. Berman on Wednesday rejected a proposed
$62.5 million settlement between HSBC PLC affiliates and a
putative class of investors in an Irish feeder fund that allegedly
poured money into Bernard L. Madoff's doomed Ponzi scheme.
According to Law360, Judge Berman said the settlement, as
proposed, didn't tell potential class members enough about how
much money from the settlement would go toward attorney fees and
other litigation costs.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$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 July 15, 2011, a total of US$6.88 billion in claims by
investors has been allowed, with US$794.9 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.
BERNARD L. MADOFF: Insurers Balk at Trustee's $1BB Tremont Deal
---------------------------------------------------------------
Liz Hoffman at Bankruptcy Law360 reports that seven insurance
companies on Tuesday blasted the $1 billion settlement reached
between the trustee for Bernard Madoff's securities firm and one
of its largest feeder funds, saying the deal does not adequately
protect their claims to liquidated Ponzi scheme assets.
As partners in a Tremont Group Holdings Inc. fund that invested
more than $4 billion in Madoff, the insurers, which include
Nationwide Insurance Co. and New York Life Insurance Co., said
they stand to lose millions.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$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 July 15, 2011, a total of US$6.88 billion in claims by
investors has been allowed, with US$794.9 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.
BORDERS GROUP: Agree Realty Says 2 Stores to Be Sold for $4.6MM
---------------------------------------------------------------
Agree Realty Corporation disclosed further information regarding
the status of its properties currently or formerly leased to
affiliates of Borders Group, Inc., which together with certain of
its subsidiaries, including Borders, Inc., filed a bankruptcy
petition under Chapter 11 of the Bankruptcy Code.
The lease for the Borders property in Columbia, Maryland, has been
assigned by Borders to Books-A-Million, Inc. pursuant to an
agreement approved by the bankruptcy court on August 29, 2011. A
Books-A-Million store is expected to be opened at the property
after the completion of the Borders store closing sale. The
property is subject to non-recourse debt of the Company, which is
currently in default as disclosed in the Company's quarterly
report on Form 10-Q for the quarter ended June 30, 2011.
The Company has two former Borders properties under contracts to
sell for an aggregate sales price of $4.6 million. Closing of
these transactions is subject to satisfactory completion of the
purchasers' due diligence investigations and other customary
closing conditions, and there is no assurance that the conditions
will be satisfied or that the sales will occur as contemplated.
The former Borders property in Lawrence, Kansas, is subject to a
loan secured by a leasehold interest in the property. The Company
owns fee simple title to the property and leases the property to a
subsidiary, which defaulted in payments under the loan to the
third-party lender and payments to the Company under the lease.
The Company anticipates execution of a release agreement, in lieu
of the Company foreclosing on the leasehold lender. The Company
expects that pursuant to such release agreement, the non-recourse
debt will be discharged by the lender and the Company will then
have fee simple title to the property without encumbrance. The
Company anticipates finalizing the agreement by the end of the
third quarter and will then commence marketing the property for
reuse.
As previously disclosed in the Company's Securities and Exchange
Commission filings, the Company continues to negotiate with its
other non-recourse lenders regarding defaults. Such negotiations
are anticipated to continue into the fourth quarter of 2011.
The former Borders store in Wichita, Kansas, has been leased to
Natural Grocers by Vitamin Cottage. The tenant has waived lease
contingencies, and rental is anticipated to commence on or before
January 1, 2012.
The Company has taken assignment from Borders of certain subleases
previously entered into by Borders at the Boynton Beach, Florida
and Indianapolis, Indiana locations. The aggregate increased
annual cash rental income being received by the Company pursuant
to assignment of these two subleases is approximately $392,000.
The Company continues to market its remaining former Borders
assets for both sale and lease.
About Agree Realty
Agree Realty Corporation is engaged in the ownership, management
and development of properties which are primarily single tenant
properties leased to major retail tenants and neighborhood
community shopping centers. The Company currently owns and
operates a portfolio of 84 properties, located in 19 states and
containing 3.8 million square feet of leasable space.
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 is closing 399 stores. Borders selected proposals
by Hilco and Gordon Brothers to conduct going out of business
sales for all stores after no going concern offers of higher value
were submitted by the deadline.
CARGO TRANSPORTATION: Could Be Out of Chapter 11 Next Week
----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida will
convene a hearing on Sept. 14, 2011, at 1:30 p.m., to consider the
U.S. Trustee's request to dismiss or convert Cargo Transportation
Services, Inc.'s case to one under Chapter 7 of the Bankruptcy
Code.
As reported in the Troubled Company Reporter on Aug. 26, 2011,
Donald F. Walton, the U.S. Trustee, said the dismissal or
conversion is warranted as the Company had failed to file
operating reports for May, June and July or pay the requisite.
The Debtor objects to the U.S. Trustee's request and said it had
paid bankruptcy fees as required by law.
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 the Debtor's certified public
accountants.
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 Chapter 11 proceedings. DLA Piper is general
counsel for the Committtee.
The Debtor disclosed $11,728,760 in assets, and $11,869,375 in
liabilities as of the Chapter 11 filing.
CARGO TRANSPORTATION: GE Capital to Take Over Great Dane Trailer
----------------------------------------------------------------
The Hon. Michael G. Williamson of the U.S. Bankruptcy Court for
the Middle District of Florida Cargo Transportation Services,
Inc., granted creditor General Electric Capital Corporation's
motion for default relief from stay.
As reported in the Troubled Company Reporter on Aug. 17, 2011,
creditor GE Capital asked that the Court:
-- modify the automatic stay in Cargo Transportation's assets;
-- permit GE Capital to proceed with its in rem rights as to
the collateral; and
-- direct the Debtor to turn over the collateral to GE Capital
or its designated agent.
GE Capital related that the Court denied GE Capital's motion for
relief from the automatic stay on the vehicle collateral and
directed the Debtor to pay GE Capital $7,663 as adequate
protection beginning April 1.
GE Capital noted that the Debtor failed to make adequate
protection payments that were due May 1st, June 1st and July 1st.
The automatic stay is lifted to permit the GE Capital to take
possession of these collateral:
One 2009 Great Dane Trailer - S/N 1GRAA06209B701543
One 2009 Great Dane Trailer - S/N 1GRAA06209T548754
One 2009 Great Dane Trailer - S/N 1GRAA06229T548755
One 2009 Great Dane Trailer - S/N 1GRAA06239B701536
One 2009 Great Dane Trailer - S/N 1GRAA06229T548750
One 2009 Great Dane Trailer - S/N 1GRAA06249T548756
One 2009 Great Dane Trailer - S/N 1GRAA06259B701537
One 2009 Great Dane Trailer - S/N 1GRAA06259B701540
One 2009 Great Dane Trailer - S/N 1GRAA06259T548748
One 2009 Great Dane Trailer - S/N 1GRAA06259T548751
One 2009 Great Dane Trailer - S/N 1GRAA06269T548757
One 2009 Great Dane Trailer - S/N 1GRAA06279B701538
One 2009 Great Dane Trailer - S/N 1GRAA06279B701541
One 2009 Great Dane Trailer - S/N 1GRAA06279T548749
One 2009 Great Dane Trailer - S/N 1GRAA06279T548752
One 2009 Great Dane Trailer - S/N 1GRAA06289T548758
One 2009 Great Dane Trailer - S/N 1GRAA06299B701539
One 2009 Great Dane Trailer - S/N 1GRAA06299B701542
One 2009 Great Dane Trailer - S/N 1GRAA06299T548753
One 2009 Great Dane Trailer - S/N 1GRAA062X9T548759
The Court also ordered that the relief granted permits the
creditor to take action against the property only and does
not permit creditor to seek or obtain in personam relief against
the Debtor.
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 the Debtor's certified public
accountants.
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 Chapter 11 proceedings. DLA Piper is general
counsel for the Committtee.
The Debtor disclosed $11,728,760 in assets, and $11,869,375 in
liabilities as of the Chapter 11 filing.
CATASYS INC: 1-for-40 Reverse Stock Split Effective Sept. 6
-----------------------------------------------------------
Catasys, Inc.'s board of directors has declared a reverse stock
split of its common stock at a 1 for 40 ratio effective Sept. 6,
2011. Catasys shareholders will receive one new share of Catasys
common stock for every forty shares held. The Company anticipates
that the reverse stock split when combined with anticipated future
contractual activity and other anticipated Company initiatives
over the next quarter, will enable the Company to list on a
National Stock Exchange.
The reverse split, which was approved by Catasys shareholders in
March 2011, will reduce the number of shares of outstanding common
stock to approximately 21 million. In lieu of fractional shares,
shareholders will receive cash. Additional details and
instructions for shareholder stock certificate exchanges will be
mailed to shareholders of record as the date of the split.
Catasys's transfer agent is the American Stock Transfer & Trust
Company, LLC, of who can be reached toll-free at 877-248-6417.
Through Oct. 3, 2011, shares of Catasys will trade on the OTCBB
under the symbol "CATSD". Thereafter, the shares of Catasys will
resume trading under the symbol "CATS."
About Hythiam, Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
The Company reported a net loss of $19.99 million on $448,000 of
total revenues for the twelve months ended Dec. 31, 2010, compared
with a net loss of $9.15 million on $1.53 million of total
revenues during the prior year.
The Company's balance sheet at June 30, 2011, showed $3.48 million
in total assets, $4.13 million in total liabilities, and a
$652,000 total stockholders' deficit.
Rose, Snyder & Jacobs, in Encino, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
significant operating losses and negative cash flows from
operations during the year ended Dec. 31, 2010.
CDC PROPERTIES: Plan Confirmation Hearing Scheduled for Oct. 7
--------------------------------------------------------------
The Hon. Paul B. Snyder of the U.S. Bankruptcy Court for the
Western District of Washington will convene a hearing on Oct. 7,
2011, at 9:00 a.m., to consider the confirmation of CDC Properties
I, LLC's Plan of Reorganization.
Any objections, and ballots accepting or rejecting the proposed
Plan are due Sept. 30.
As reported in the Troubled Company Reporter on Aug. 12, 2011, the
Court approved the disclosure statement, as amended by agreement
of the Senior Lender and CDC Properties I, LLC, in support of the
Debtor's Plan of Reorganization.
Pursuant to the order dated July 21, 2011, the Debtor has
commenced solicitations of acceptances to the Plan.
A copy of the Disclosure Statement dated July 21, 2011, is
available at http://bankrupt.com/misc/cdcpropertiesI.amendedDS.pdf
As reported in the TCR on June 23, 2011, the Plan centers on the
restructuring of the Debtor's obligations to its three largest
creditors: Midland Loan Services, Inc., Wells Fargo Bank, N.A.,
and Equity Funding, LLC, and the payment in full to the Debtor's
unsecured creditors.
About CDC Properties I
Tacoma, Washington-based CDC Properties I, LLC, owns 10 commercial
buildings in Washington. Most of the space in its buildings is
leased to the State of Washington and occupied by various of its
agencies. CDC Properties filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Wash. Case No. 11-41010) on Feb. 10, 2011.
Brad A. Goergen, Esq., and Mark D. Northrup, Esq., at Graham &
Dunn PC, in Seattle, Wash., represent the Debtor. The Debtor
disclosed $47,304,590 in total assets, and $75,714,502 in total
liabilities as of the Chapter 11 filing.
CENTRALIA OUTLETS: Out of Bankruptcy; Owners Remain
---------------------------------------------------
Centralia Outlets, LLC, notified the Hon. Brian D. Lynch of the
U.S. Bankruptcy Court for the Western District of Washington an
Aug. 1, 2011 effective date of its Plan of Reorganization dated
May 20, 2011, as modified on July 14.
The Court in July confirmed the Plan in July, a copy of which is
available at:
http://bankrupt.com/misc/centralia.amendedplamodifiedjuly14.pdf
On the Effective Date, the Debtor is to pay Sterling the amount of
$80,000, which Sterling will apply to Centralia's loan
obligations. In addition, Centralia will pay Sterling's secured
claim ($24,290,000 including legal fees) as follows:
(i) monthly interest only payments computed at the rate of 4.5%
per annum for the first 12 months from the Effective Date;
(ii) monthly interest only payments computed at the rate of 5.0%
per annum from the 13th month through the 30th month;
(iii) monthly principal and interest payments computed using the
rate of 5.25% per annum and a 30 year amortization
commencing on the first day of the 31st full month following
the Effective Date, through the last day of the 84th full
month following the Effective Date, at which time all
accrued and unpaid interest and principal will be due in
full.
Holders of General Unsecured Claims will receive payment of: (i)
one half of their Allowed Claims on the later of the Effective
Date and 10 days after such claim is allowed, and (ii) one half on
the later of 60 days after Effective Date and 10 days after such
claim is allowed, together with interest from the Effective Date
at the Sterling Interest Rate.
Holders of the interests in the Debtor will retain their
interests.
About Centralia Outlets
Centralia Outlets LLC is the owner of the Centralia Factory
Outlets mall in Centralia, Washington. The mall, located on
Interstate 5 in Centralia, is 80% occupied, and generates net
income, after debt service, of $80,000 to $100,000 a month.
Centralia filed for Chapter 11 after receiving an order sending
the mall to receivership. Sterling Bank prevailed on a state
court to order the appointment of a receiver based on alleged non-
financial defaults in the mortgage. The mall owner said that
principal and interest payments were current on the $24.3 million
owing to Sterling as of the petition date.
Centralia filed for Chapter 11 protection (Bankr. W.D. Wash. Case
No. 10-24529) on Dec. 3, 2010, after receiving an order sending
the mall to receivership. Attorneys at Perkins Coie LLP, and
Bush Strout & Kornfeld LLP, represent the Debtor. The
Debtor disclosed $29,206,999 in assets and $23,999,507 in
liabilities.
CENTURION PROPERTIES: Court Okays Dan Gorcyzki as Finance Advisor
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
authorized Centurion Properties III LLC to employ Dan. E.
Gorczycki of Savills LLC as its finance advisor.
The firm will assist the Debtor with obtaining and securing
replacement financing. The Debtor said it will require
replacement financing in excess of $58 million as part of its
reorganization.
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Centurion Properties
Kennewick, Washington-based Centurion Properties III, LLC, was
established in 2006 for the sole purpose of acquiring real estate
project Battelle Leaseholds located in Richland, Washington. Its
sole asset is its leasehold interests in the Battelle Memorial
Institute Campus and improvements, valued in excess of
$90 million.
CPIII filed for Chapter 11 bankruptcy protection (Bankr. E.D.
Wash. Case No. 10-04024) on July 9, 2010. John D. Munding, Esq.,
at Crumb & Munding, assists the Company in its restructuring
effort. The United States Trustee was unable to appoint a
creditors committee in the case. The Company estimated its assets
and debts at $50 million to $100 million.
CHARLESTON ASSOCIATES: Wants Plan Exclusivity Until Sept. 30
------------------------------------------------------------
Charleston Associates LLC asks the U.S. Bankruptcy Court for the
District of Delaware to extend its exclusive periods to file a
Chapter 11 plan until Sept. 30, 2011, and solicit acceptances of
that plan until Nov. 30, 2011.
A hearing is set for Sept. 27, 2011, at 10:30 p.m., to consider
the Debtor's request for an extension. Objections, if any, are
due Sept. 30, 2011, at 4:00 p.m.
The Debtor tells the Court that it needs more time to attempt to
negotiate a consensual plan of reorganization. The Debtor says it
was unable to begin discussion on a plan with its secured lender
or the Official Committee of Unsecured Creditors before the
closing of the transaction of Quality Real Estate Management LLC,
an affiliate of Fry's Electronics Inc.
The Debtor says it closed on a sale of the Great Indoor site to
Quality Real on June 15, 2011. The closing of the sale increases
the Debtor's chances of successfully negotiating a consensual plan
with it secured lenders, the recipient of the net proceeds of the
deal, of about $4.4 million.
About Charleston Associates
Based in Las Vegas, Nevada, Charleston Associates, LLC, is the
successor by merger to Boca Fashion Village Syndications Group.
It owns a portion of a large community shopping center located in
Las Vegas. The entire shopping center is known as The Shops at
Boca Park. It encompasses almost 55 acres and is situated at the
northeast corner of the intersection of Charleston Boulevard and
Rampart Boulevard. Charleston's current portion of the shopping
center consists of a 20.4 acre parcel located at 700-750 S.
Rampart Boulevard, Las Vegas, that is commonly known as Boca
Fashion Village. Boca Fashion contains, among other things, a
130,000+ square foot parcel of real estate that is currently
leased to Sears Roebuck & Company.
Charleston Associates filed for Chapter 11 protection (Bankr. D.
Del. Case No. 10-11970) on June 17, 2010. Judge Kevin J. Carey
presides over the case. Neal L. Wolf, Esq., Dean C. Gramlich,
Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC,
in Chicago, Ill., represent the Debtor as counsel. Bradford J.
Sandler, Esq., at Pachulski Stang Ziehl & Jones, LLP, in
Wilmington, Del., represents the Debtor as Delaware counsel. In
its schedules, the Debtor disclosed $92,348,446 in assets and
$65,064,894 in liabilities.
Attorneys at Brinkman Portillo Ronk, PC, represents the Official
Committee of Unsecured Creditors as counsel. Thomas M. Horan,
Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington,
Del., represents the Official Committee of Unsecured Creditors as
Delaware counsel.
CHEN'S BROTHER: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Chen's Brother Enterprise LP
7034 River Mill Drive
Spring, TX 77379
Tel: (713) 988-0919
Bankruptcy Case No.: 11-37499
Chapter 11 Petition Date: September 2, 2011
Court: U.S. Bankruptcy Court
Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: Kenneth K. Gu, Esq.
LAW OFFICES OF KENNETH K. GU
9894 Bissonnet Street, Suite 632
Houston, TX 77036
Tel: (713) 988-0919
E-mail: lawyergu@lawyergu.com
Scheduled Assets: $3,003,500
Scheduled Debts: $2,800,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Zhou Po Chen, president.
CHURCH ON THE MOVE: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Church on the Move, Inc. - Christ Temple
fka Christ Temple Baptist Church of Dallas
7615 S. Polk
Dallas, TX 75232
Bankruptcy Case No.: 11-35750
Chapter 11 Petition Date: September 6, 2011
Court: U.S. Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER, ATTORNEY AT LAW
8140 Walnut Hill Lane, Suite 301
Dallas, TX 75231
Tel: (972) 503-4033
Fax: (972) 503-4034
E-mail: courts@joycelindauer.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Rev. Henry L. Ivory, president/CEO.
COLLIER LAND: Hearing Today on Bank's Ch. 7 Conversion Motion
-------------------------------------------------------------
The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the
Western District of Pennsylvania continued the hearing on Sept. 9,
2011, at 11:00 a.m., to consider Parkvale Bank's motion to convert
Collier Land & Coal Development LP's Chapter 11 case to Chapter 7
liquidation.
Prior to the Petition Date, the Debtor executed and delivered to
the Parkvale three promissory notes in the aggregate amount of
$2,970,000. The Debtor defaulted under the terms of Notes by
failing to make payments when due. As of Feb. 1, 2011, the
indebtedness is $1,758,924 plus professional fees, expenses and
accruing interest.
According to Parkvale, the Debtor's attempt to reorganize under
Chapter 11 of the U.S. Bankruptcy Code has failed. "The Debtor
operated a coal mining business that could not mine enough coal to
pay its ongoing operating expenses, let alone reorganize. Since
late September 2010, the Debtor has tried to sell the coal mine.
The Debtor's principals, who have spearheaded this undertaking,
appear to be acting in their own interests in order to recoup
their investments or secure future employment, all to the
detriment of the Debtor's creditors," Parkvale said.
Parkvale said that conversion to Chapter 7 is clearly in the best
interest of the creditors as it will provide for prompt payment of
claims, instead of further delay that only benefits the Debtor's
limited partners fanciful plans to sell this failure of a coal
mine.
Parkvale is represented by Tucker Aresnberg, P.C.
About Collier Land
Clairton, Pennsylvania-based Collier Land & Coal Development, LP,
began its operations in 2007 with the intention of mining the coal
on the real estate and then subdividing the land and selling
approximately 59 buildable lots to developers.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Pa. Case No. 10-22059) on March 25, 2010. Robert S.
Bernstein, Esq., and Scott E. Schuster, Esq., at Bernstein Law
Firm, P.C., serve as the Debtor's bankruptcy counsel. The Debtor
estimated its assets at 10 million to $50 million and debts at
$1 million to $10 million, as of the petition date.
COLONIAL PROPERTIES: Moody's Affirms 'Ba1' Senior Debt Rating
-------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Colonial Realty
Limited Partnership (senior debt at Ba1) and Colonial Properties
Trust (preferred stock at Ba2) and revised the rating outlook to
positive from stable.
RATINGS RATIONALE
The positive outlook reflects Colonial's continued deleveraging
efforts which, along with recovering sector fundamentals, have
improved credit metrics. Moody's expects cash flow metrics to
continue to strengthen with improvements in operating
fundamentals. The positive outlook also reflects strength in
Colonial's portfolio occupancy and the expectation that the market
fundamentals will continue to support increasing rents.
Colonial's effective leverage (debt plus preferred equity as a
percentage of gross assets) decreased to 44.6% at 2Q11 compared to
50.6% and 54.5% at 2Q10 and 2Q09, respectively. Net debt to
recurring EBITDA improved to 8.6X at 2Q11 from 9.4X and 10.4X for
the same periods, and is expected to improve further with strength
in multi-family fundamentals. Fixed charge coverage improved to
2.1X at 2Q11 from 1.7X at 2Q10. This metric is expected to
increase from improving fundamentals over the near-term.
Colonial's debt maturities are manageable through 2011 with only
$19 maturing (inclusive of joint venture debt). Moody's notes that
secured debt has increased significantly and is expected to remain
high compared to historic levels, but the REIT still maintains a
large unencumbered asset base. Moody's stated that an upgrade
would be predicated upon a reduction in leverage with net debt to
recurring EBITDA closer to 8.0X, fixed charge coverage at or over
2.0X on a sustained basis, and secured debt below 20%. These
metrics assume the REIT will maintain development at or below 10%
of gross assets. A rating downgrade would result should net debt
to recurring EBITDA exceed 10X on a sustained basis, fixed charge
coverage be at or below 1.5X on a sustained basis, or should the
REIT have difficulty in meeting its funding requirements over the
near-term.
These ratings were affirmed with a positive outlook:
Colonial Properties Trust -- preferred stock at Ba2 and preferred
shelf at (P)Ba2
Colonial Realty Limited Partnership -- senior unsecured debt at
Ba1 and senior unsecured debt shelf at (P)Ba1
Moody's last rating action with respect to Colonial Properties was
on September 14, 2010, when Moody's affirmed the senior debt
ratings of Colonial Properties Limited Partnership at Ba1 and the
preferred stock ratings of Colonial Properties Trust at Ba2, and
revised the outlook to stable from negative.
The principal methodology used in this rating was Global Rating
Methodology for REITs and Other Commercial Property Firms
published in July 2010.
Colonial Properties Trust [NYSE: CLP] is a REIT based in
Birmingham, Alabama, USA, that focuses on the multifamily property
sector, and owns and manages properties located in the Sunbelt
states. At June 30, 2011, the REIT had $3.2 billion in book assets
and $1.3 billion in book equity.
CONQUEST PETROLEUM: CFO and Director R.C. Johnson Resigns
---------------------------------------------------------
Conquest Petroleum Incorporated announced that Robert C. Johnson,
its Chief Financial Officer and a Director, has resigned to pursue
personal interests. Mr. Johnson had been with the Company since
2008 and was responsible for fund raising and capital development.
Robert D. Johnson, CEO, states "All of the Management of Conquest
appreciated Mr. Johnson's efforts in a severely constrained
capital environment. Initially, Mr. Johnson's duties will be
absorbed by others in the firm. Upon funding, the Company will
hire a replacement from any number of identified candidates.
Conquest wishes Mr. Johnson well in his future endeavors."
About Conquest Petroleum
Spring, Tex.-based Conquest Petroleum Incorporated (OTC BB: CQPT)
-- http://www.conquestpetroleum.com/-- is an independent oil and
natural gas company engaged in the production, acquisition and
exploitation of oil and natural gas properties geographically
focused on the onshore United States. The Company's operational
focus is the acquisition, through the most cost effective means
possible, of production or near production of oil and natural gas
field assets. The Company's areas of operation include Louisiana
and Kentucky.
The Company reported a net loss of $14.49 million on $1.24 million
of total revenues for the year ended Dec. 31, 2010, compared with
a net loss of $23.26 million on $914,781 of total revenues during
the prior year.
The Company's balance sheet at June 30, 2011, showed $2 million in
total assets, $31.24 million in total liabilities, and a
$29.24 million total stockholders' deficit.
As reported by the TCR on April 21, 2011, M&K CPAS, PLLC, in
Houston, Texas, noted that Conquest Petroleum has insufficient
working capital and reoccurring losses from operations, all of
which raises substantial doubt about its ability to continue as a
going concern.
COOPERSMITH SIMON: Case Summary & 7 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Coopersmith Simon & Vogel, P.C.
50 Charles Lindbergh Boulevard, Suite 605
Uniondale, NY 11553
Bankruptcy Case No.: 11-76281
Chapter 11 Petition Date: September 2, 2011
Court: U.S. Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Robert E. Grossman
Debtor's Counsel: Anthony F. Giuliano, Esq.
PRYOR & MANDELUP
675 Old Country Road
Westbury, NY 11590
Tel: (516) 997-0999
Fax: (516) 333-7333
E-mail: afg@pryormandelup.com
Scheduled Assets: $199,035
Scheduled Debts: $2,156,835
A list of the Company's seven largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nyeb11-76281.pdf
The petition was signed by Michael E. Simon, senior vice president
and treasurer.
DENNIS GIBBS: Landmark Lynchburg Library Up for Auction
-------------------------------------------------------
Craig Davison at the News & Adventure reports that the former
Jones Memorial Library is set to be sold in a foreclosure auction
next week.
According to the report, the California man who owns the Rivermont
Avenue landmark also has changed his bankruptcy status,
potentially leaving the future of other local properties up in the
air.
Mr. Davison says the auction will take place at 10 a.m. Tuesday at
the library's main entrance, 434 Rivermont Ave., in Lynchburg,
Virginia.
The report relates that Dennis A. Gibbs, of Castro Valley, Calif.,
and his wife, Laurie, own 27 properties in Lynchburg, either in
their names or in the names of companies Gibbs-Lynchburg One LLC
and Gibbs-Lynchburg Two LLC, according to city records.
Mr. Gibbs said he purchased the library on April 24, 2008 for
$650,000 from the Patrick Henry Institute. City records show no
taxes being paid on the land for years 2008, 2009 and 2010, with
more than $20,000 due.
In March, Mr. Gibbs' ongoing bankruptcy case in California was
changed from a Chapter 11 bankruptcy to a Chapter 7. Chapter 11
bankruptcies allow individuals to reorganize debt. In Chapter 7
bankruptcies, all non-exempt properties go to a bankruptcy
trustee, which can be sold to pay off creditors.
Castro Valley, California-based Dennis A. Gibbs and Laurie M.
Gibbs filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Calif. Case No. 10-45706) on May 18, 2010. Vincent Renda, Esq.,
at Renda Law Offices, P.C., represents the Debtors in their
restructuring effort. The Debtors estimated their assets and
debts at $10 million to $50 million.
Mohammed Poonja, Chapter 11 trustee in the case of the Joint
Debtors, requested for the conversion of the Debtors' case
explaining that the Debtors have no operating business and
virtually no income.
DIAMOND RESORTS: Moody's Affirms 'B3' CFR; Outlook Negative
-----------------------------------------------------------
Moody's Investors Service revised Diamond Resorts Corporation's
("DRC") rating outlook to negative from stable. The company's B3
Corporate Family Rating, B2 Probability of Default Rating, and B3
senior secured note rating were affirmed.
Ratings affirmed:
Corporate Family Rating at B3
Probability of Default Rating at B2
$425 million senior secured note rating at B3 (LGD 4, 64%)
RATINGS RATIONALE
The outlook revision to negative reflects Moody's view that the
continuation of soft consumer spending trends coupled with higher
costs to support various timeshare sales initiatives could make it
difficult for DRC to achieve and maintain debt/EBITDA below 6.5
times on a rent-adjusted basis, the leverage target required for
the company to maintain its B3 Corporate Family Rating. DRC's
rent-adjusted debt/EBITDA for the 12-month period ended June 30,
2011 was at about 6.6 times and materially higher than the 5.0 to
6.0 times debt/EBITDA range Moody's anticipated it would be when
the initial rating was assigned to DRC in August 2010.
"While Moody's believes that DRC will manage to reduce its costs
back to a normalized level, the magnitude and timing of any
benefit realized from these initiatives remains uncertain. As a
result, DRC's ability to reduce leverage back to a level
consistent with its existing rating could be a challenge," stated
Bill Fahy, a Vice President at Moody's.
In addition to DRC's high leverage, the B3 Corporate Family Rating
considers the company's modest scale in terms of revenues, narrow
business focus, and risks common to the timeshare business. These
risks include the need to extend credit to purchasers of vacation
ownership intervals and a dependence on the receivable
securitization market so that capital can be recycled and made
available to support future sales activity.
Positive rating consideration is given to the favorable working
capital characteristics and relatively stable cash flow
characteristics of the company's hospitality and management
services business which represents about 32% of the DRC's
consolidated revenue.
DRC's B3 Corporate Family Rating -- one notch lower than its B2
Probability of Default Rating -- reflects the utilization of a
family recovery rate of 35% which is customary for a bond-only
capital structure.
Ratings could be lowered if it appears that DRC is not able to
reduce its debt/EBITDA to at or below 6.5 by the end of fiscal
year 2012. The rating outlook could be revised to stable if it
appears that DRC will be able to reduce and maintain debt/EBITDA
at or below 6.0 times.
The last rating action for Diamond Resorts occurred on August 6,
2010, when Moody's assigned first time ratings to the company; B3
Corporate Family Rating, B2 Probability of Default Rating and B3
rating to its $425 million senior secured notes.
The principal methodology used in rating Diamond Resorts
Corporation was the Global Lodging & Cruise Industry Methodology
published in December 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.
Diamond Resorts Corporation is a vacation ownership company that
specializes in the timeshare business as well as the hospitality
and management services business. The company has total revenues
of about $400 million.
EINSTEIN MOOMJY: Lowenstein Sandler Retained Counsel to Committee
-----------------------------------------------------------------
Law firm Lowenstein Sandler was retained as counsel to the
creditors' committee for carpet, rug and furniture store Einstein
Moomjy's bankruptcy filing.
This case marks the third creditors' committee retention for the
firm within the past few weeks. Recently, Lowenstein Sandler was
retained as counsel to the creditors' committee in the chapter 11
case of Qualteq, a direct marketing business, which includes about
$100 million of secured debt. The firm was also recently retained
to the creditors' committee for Manistique Paper, a recycled paper
mill based in Wisconsin.
About Lowenstein Sandler PC
Lowenstein Sandler PC is a nationally recognized full-service law
firm with offices in New York, Palo Alto and Roseland, and more
than 250 attorneys.
About Einstein Moomjy
Einstein Moomjy, Inc., filed a Chapter 11 petition (Bankr. D. N.J.
Case No. 11-34723) on Aug. 19, 2011. Daniel Stolz, Esq., at
Wasserman, Jurista & Stolz, in Millburn, New Jersey, serves as
counsel. In its schedules, the Debtor disclosed $2.6 million in
assets and $4.5 million in liabilities as of the Chapter 11
filing.
ELCOTEQ INC: Involuntary Chapter 11 Case Summary
------------------------------------------------
Alleged Debtor: Elcoteq, Inc.
dba Elcoteq Americas
1325 Pendale Road, Suite C
El Paso, TX 79936
Case Number: 11-31675
Involuntary Chapter 11 Petition Date: August 31, 2011
Court: Western District of Texas (El Paso)
Judge: H. Christopher Mott
Petitioner's Counsel: Corey W. Haugland, Esq.
JAMES & HAUGLAND, P.C.
P.O. Box 1770
El Paso, TX 79949-1770
Tel: (915) 532-3911
E-mail: chaugland@jghpc.com
Elcoteq, Inc.'s petitioners:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Plasticos Promex Accounts Receivable $242,125
U.S.A., Inc.
1220 Barranca, Bldg. 4-C
El Paso, TX 79935
Textape Incorporated Accounts Receivable $34,118
915 Pendale Road
El Paso, TX 79907
Pallets and Crates Accounts Receivable $19,929
International, L.P.
150 S. Alto Mesa
El Paso, TX 79912
EVERGREEN ENERGY: Libra Stake at 15.4% as of Aug. 25
----------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Libra Advisors, LLC, and its affiliates
disclosed that as of Aug. 25, 2011, they beneficially own
4,670,725 shares of common stock of Evergreen Energy, Inc.,
representing 15.4% of the shares outstanding. As previously
reported by the TCR on Aug. 12, 2011, Libra Advisors, et al.,
disclosed beneficial ownership of 10.4% of the shares outstanding.
A full-text copy of the latest filing is available for free at
http://is.gd/8vk6T4
About Evergreen Energy
Evergreen Energy Inc. has developed two, proprietary, patented,
and green technologies: the GreenCert(TM) suite of software and
services and K-Fuel(R). GreenCert, which is owned exclusively by
Evergreen, is a science-based, scalable family of environmental
intelligence solutions that quantify process efficiency and
greenhouse gas emissions from energy, industrial and agricultural
sources and may be used to create verifiable emission reduction
credits. K-Fuel technology significantly improves the performance
of low-rank coals, yielding higher efficiency and lowering
emissions.
The Company reported a net loss of $21.02 million on $403,000 of
total operating revenue for the year ended Dec. 31, 2010, compared
with a net loss of $58.53 million on $423,000 of total operating
revenue during the prior year.
Hein & Associates LLP, in Denver, Colo., expressed substantial
doubt about Evergreen Energy's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses from operations and has had recurring
cash used in operations.
The Company's balance sheet at June 30, 2011, showed
$24.54 million in total assets, $21.52 million in total
liabilities, $2,000 in preferred stock, and $3.02 million in total
stockholders' equity.
FOUR SEASONS: JPMorgan Chase Seeks Stay Relief to Pursue Remedies
-----------------------------------------------------------------
JPMorgan Chase Bank, National Association asks the U.S. Bankruptcy
Court for the Southern District of Florida for relief from the
automatic stay to allow it to pursue its state court remedies
against Four Seasons 66B Investments, Corp.
JPMorgan Chase is the holder of a certain Note and recorded
Mortgage, dated Aug. 23, 2005, originally given to Four Seasons
66B Investment Corp., a Florida Corporation, and given by
Washington Mutual Bank and recorded on Sept. 21, 2005. The
mortgage was recorded in the Public Records of Miami-Dade County,
Florida. These documents give JPMorgan Chase a first mortgage
position on the property at 1425 Brickell Avenue, Condo Unit #66B,
Miami, Florida.
The Debtor is indebted to JPMorgan Chase for prepetition amounts
of $1,431,467, according to the bank.
According to the Bankruptcy Court's Aug. 30, 2010 order, the
Debtor will pay JPMorgan Chase adequate protection payments
amounting to $8,389 per month. The Order provides that if the
Debtor fails to tender the required adequate protection payments,
JPMorgan Chase will give the Debtor 72 hours' notice of default
and that the bank may file a motion for stay relief if the Debtor
fails to cure the default within 72 hours.
JPMorgan Chase relates that it provided the Debtor with a notice
of default on Jun. 14, 2011, pursuant to the terms of the Order,
advising the Debtor that a total of seven payments equaling
$58,729 were in default. As of Aug. 12, 2011, the Debtor has not
cured the default.
A hearing was set for Sept. 7, 2011.
Coral Gables, Florida-based Four Seasons 66B Investments, Corp,
filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case
No. 10-23713) on May 19, 2010. Cesar J. Dominguez, Esq., who has
an office in Miami, Florida, assists the Company in its
restructuring effort. The Company estimated its assets and debts
at $100,000,001 to $500,000,000.
FRAZER/EXTON: Disclosure Statement Hearing Continued Until Oct. 5
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
has continued until Oct. 5, 2011, at 1:00 p.m., the hearing to
consider adequacy of the Disclosure Statement explaining
Frazer/Exton Development, L.P.'s Plan of Reorganization.
As reported in the Troubled Company Reporter on Aug. 4, 2011,
under the plan, all of the assets of the Debtor will be sold and
liquidated in the ordinary course of the Debtor's business in
accordance with the Plan.
The Plan divides claims and interests into various separate
classes:
A. Unclassified Claims (Administrative Expenses and Fees).
Each holder of an Allowed Administrative Claim will
receive the amount of Allowed Claim on the Effective Date
or other treatment as may be agreed upon in writing as
long as no payment is made thereon prior to the Effective
Date.
B. Class 1 (Priority Tax Claims) is not impaired. Class 1
claims will receive 100% percent of their Claim over 60
months commencing on the Effective Date, plus post-
confirmation interest at the rate of 7% on the principal
portion of the Claim.
C. Class 2 (Secured Claim of Sovereign Bank). On January 1,
2012, $7,450,000 in net sale proceeds will be paid to
Sovereign in one lump sum. Upon the completion of
Phase 1, Unit 1 in September 2013, $2,700,000 will be
released from escrow and paid to Sovereign. Sovereign
will receive an additional $2,000,000 from the sale of 10
Villas sold in Phase lA with an anticipated return date of
Sept. 30, 2013.
On March 31, 2014, Sovereign will receive an additional
$1,000,000 from the sale of 10 Villas sold in the second
half of Phase lA. On June 30, 2014, the Debtor will pay
to Sovereign $4,000,000 from the sale of the Whiteland
32-acre site.
On June 30, 2016, the Debtor will pay to Sovereign
$4,000,000 from the proceeds of Phase 2 Development. On
June 30, 2018, the Debtor will sell its remaining real
property and generate the remaining $4,000,000 payment to
Sovereign in satisfaction of the full underlying debt.
D. Class 3 (Secured Claim of Paul Risk Associates, Inc.) is
impaired. The Secured Claim of Paul Risk Associates, Inc.
is $1,992,627. This claim will be partially assumed by
the Buyer. Upon closing, the Buyer will determine to what
extend this claim will be assumed. Any remaining portion
will be treated as a general unsecured claim by Debtor.
E. Class 4 (Secured Claim of Commonwealth of Pennsylvania,
Department of Community and Economic Development) is
impaired. This claim will be assumed by the Buyer of the
11-acre parcel. Upon closing, the Buyer will determine to
What extend this claim will be assumed. Any remaining
portion will be treated as a general unsecured claim by
the Debtor.
F. Class 5 (Secured Claim of ECOR Solutions, Inc.) is
impaired. The Secured Claim of ECOR Solutions, Inc., is
$1,703,355. This claim will be assumed by the Buyer.
Upon closing, the Buyer will determine to what extent this
claim will be assumed. Any remaining portion will be
treated as a general unsecured claim by the Debtor.
G. Class 6 (General Unsecured Claims) is impaired. Class 6
will receive a onetime pro rata distribution from the Plan
Fund upon the payment in full of the Class 2 Claim. The
US EPA claim will be assumed by the Buyer, pursuant to the
Agreement of Sale.
H. Class 7 (Interest Holders) is impaired. All existing
membership interests will be retained but the holders will
not receive any distribution on account of the interest in
the Debtor until Classes 2, 3,4,5 and 6 have been paid in
full.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/FRAZEREXTON_disclosurestatement.pdf
About Frazer/Exton Development
Based in Malvern, Pennsylvania, Frazer/Exton Development, L.P.,
owns real property in Chester County. Whiteland Village Ltd.
obtained various approvals and permits for the development of the
real property as a continued care retirement community. Whiteland
Village Ltd. and Frazer/Exton Development, L.P., filed for
Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 11-14036 and 11-
14041) on May 19, 2011. The case was initially assigned to Judge
Stephen Raslavich but was transferred to Judge Jean K. FitzSimon.
Frazer/Exton Development's schedules disclosed $46,953,617 in
total liabilities.
The Debtors are selling a portion of the Property to Makemie at
Whiteland -- a Pennsylvania non-profit corporation and affiliate
of Philadelphia Presbytery Homes Inc. -- for $7,300,000 in cash
and assumption of up to $5,000,000 of debt. The deal is subject
to higher and better offers.
FULLER-AUSTIN: Stonewall to Pay $21.5MM to End Asbestos Suit
------------------------------------------------------------
Dietrich Knauth at Bankruptcy Law360 reports that Stonewall
Insurance Co. agreed to pay $21.5 million to end a dispute with
reorganized DynCorp subsidiary Fuller-Austin Insulation Co. over
coverage for asbestos exposure litigation, in a settlement
approved Wednesday by a Delaware federal judge.
According to Law360, U.S. District Judge Leonard P. Stark approved
the agreement, ending a California coverage suit that began in
1998 and granting Stonewall protection from further asbestos-
related claims by Fuller-Austin or individuals who were allegedly
harmed by Fuller-Austin asbestos.
Fuller-Austin filed for Chapter 11 bankruptcy protection on
Sept. 4, 1998, with a "prepackaged" bankruptcy plan it had
negotiated with attorneys representing asbestos claimants. The
bankruptcy court approved the plan on Nov. 13, 1998.
G&S LIVINGSTON: Plan & Disclosures Hearing Begins Sept. 14
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey will
convene a combined hearing on Sept. 14, 2011, at 12:00 p.m.,
Eastern Time, to consider adequacy of the Disclosure Statement and
confirmation of G&S Livingston Realty, Inc.'s Chapter 11 Plan.
Objections, if any, were due Sept. 8.
As reported in the Troubled Company Reporter on Aug. 3, 2011, the
Debtor filed a prepackaged plan of reorganization it negotiated
with KABR Real Estate Investment Partners, LLC, a Delaware limited
liability company.
The Plan constitutes a reorganizing plan. The Debtor, in
accordance with the terms of a restructuring support agreement
with KABR, anticipates accomplishing payments under the Plan by
entering into a series of transactions among the Debtor, KABR and
their related entities that will result in the full payment of the
Debtor's allowed unsecured claims to unaffiliated creditors and
allow the Debtor to become the part owner of Daven Avenue LLC, an
entity which will own the land, fixtures and improvement of the
Debtor's Daven Avenue Shopping Center located along the Route 10
in Livingston, New Jersey, free and clear of existing loan
obligations.
On the Plan effective date, the Debtor will transfer assets,
including the Livingston Property and cash contributed by Gregg
Wasser, Laurence Taub and Dr. Harris Wasser -- as the holders of
Equity Interests in the Debtor -- to Daven Avenue in return for an
ownership interest in Daven Avenue. At the same time, the Debtor
will utilize cash and cash to be paid by Daven Avenue to satisfy
Claims of its unsecured creditors.
Following consummation of the Plan, the Debtor and KABR will be
the owners of Daven Avenue, which will be the direct owner of the
Livingston Property free of the existing loan and infused with new
capital that will position Daven Avenue to renovate and transform
the Livingston Property to attract a new tenant mix and contribute
to a revitalization of the Route 10 commercial corridor in the
Livingston area.
Essex Ten Financial, LLC, a unit of KABR, is the current holder of
the Debtor's existing loan. The Debtor obtained the loan -- in
the principal amount of $28,125,000 -- under a promissory note and
loan agreement dated July 14, 2005, with Barclays Capital Real
Estate, Inc. The debt was securitized and sold to the registered
holder of Banc of America Commercial Mortgage, Inc., Commercial
Mortgage Pass-Through Series Certificates Series 2005-5. The loan
is secured by the Livingston Property. Essex Ten purchased the
loan prior to the Petition Date.
The Debtor and KABR will each make a contribution -- the Debtor
Contribution Amount and the KABR Contribution Amount -- equal to
(i) 50% of G&S Livingston's unpaid general unsecured liabilities
and all other unpaid liabilities that have been accrued by the
Debtor from Oct. 26, 2010 to the date of the confirmation of the
Plan, plus (ii) $500,000.
The Plan classifies claims against and interests in the Debtor in
four classes. Class 1 consists of the Secured Claim of Essex Ten.
Under the Plan, Essex Ten will be merged into Daven Avenue with
Daven Avenue surviving, which results in full satisfaction of the
Existing Loan through: (y) the retirement of 15% of the Existing
Loan in exchange for $1,950,000 contributed by the Debtor and (z)
forgiveness of the balance of the Existing Loan in exchange for
KABR receiving a 47-1/2% residual equity interest in Daven Avenue
with priority on distributions in amounts equal to the sum of
KABR's Unrecovered Capital plus an 8% return on such Unrecovered
Capital as determined from time to time. Essex Ten's Secured
Claim is impaired and it is entitled to vote on the Plan.
Allowed General Unsecured Claims are placed in Class 2; They will
be paid in full on the Effective Date. The holders of General
Unsecured Claims are not impaired under the Plan and therefore
are not entitled to vote.
Class 3 consists of Allowed Affiliated General Unsecured Claims,
which are claims held by entities affiliated with the Debtor.
Holders of Affiliated General Unsecured Claims will receive a
distribution of cash in an amount equal to 2% percent of their
Affiliated General Unsecured Claims in full satisfaction of those
Claims. The holders are impaired under the Plan and entitled to
vote.
The Equity Interest Holders occupy Class 4. Collectively, they
own all of the shares of the stock in the Debtor. Upon the Plan
Effective Date, the Equity Interest Holders will contribute to the
Debtor cash in an amount equal to the sum of:
(w) $1,950,000, (x) the Other Liabilities -- all General
Unsecured Claims due to creditors that accrued prior to
of Oct. 26, 2010, are not Affiliated General Unsecured
Claims, and are not identified on Exhibit B of the
Operating Agreement of Daven Avenue;
(y) the Debtor Contribution Amount; and
(z) 2% of the total amount owed for the Affiliated General
Unsecured Claims.
In return for this contribution, the Equity Interest Holders will
retain their equity interests in the Debtor. They are not
impaired under the Plan and not entitled to vote.
About G&S Livingston Realty, Inc.
G&S Livingston Realty, Inc., in New York, filed for Chapter 11
bankruptcy (Bankr D. N.J. Case No. 11-31751) on July 21, 2011,
Judge Morris Stern presiding. Stephen V. Falanga, Esq., at
Connell LLP, serves as bankruptcy counsel. In its petition, the
Debtor estimated $10 million to $50 million in assets and debts.
The petition was signed by Greg Wasser, president.
GENTA INC: Completes Financing of up to $12.7 Million
-----------------------------------------------------
Genta Incorporated announced that the Company has entered into
definitive agreements with institutional investors in a private
placement to sell Units, consisting of Senior Secured Convertible
Notes and warrants to purchase Senior Secured Convertible Notes,
for up to $12.7 million in aggregate gross proceeds before fees
and expenses. The transaction is expected to close on or about
Sept. 9, 2011, subject to satisfaction of customary closing
conditions. Proceeds of the financing will be used to accelerate
development of the Company's small molecule pipeline, particularly
late-stage registration studies of tesetaxel, the leading oral
taxane in clinical development.
"This financing, if fully funded, would provide sufficient funds
for more than a year of operations at our projected burn rate,"
said Dr. Raymond P. Warrell, Jr., Genta's Chief Executive Officer.
"Key projects include finalization of regulatory review for
pivotal studies of tesetaxel and selection of a lead compound for
IND filing from the oral gallium portfolio. We greatly appreciate
the interest and enthusiasm of our investors for these important
endeavors."
Rodman & Renshaw, LLC, a wholly-owned subsidiary of Rodman &
Renshaw Capital Group, Inc., served as the exclusive placement
agent for this offering.
Summary of Financial Terms
The $12.7 million of Senior Secured Convertible Notes issued
pursuant to this transaction have a 10-year term and will be
initially convertible into shares of Genta common stock at a
conversion rate of 671,040 shares of common stock for every
$1,000.00 of principal that is converted. This conversion rate is
subject to adjustment under certain circumstances. The Senior
Secured Convertible Notes bear an annual interest rate of 12%,
payable semi-annually. The Company has also issued 5-year
Warrants to acquire up to $12.7 million of additional Senior
Secured Convertible Notes.
An initial tranche of $4.2 million in gross proceeds from this
transaction will be immediately available to the Company. The
remaining $8.5 million of proceeds will be placed in a blocked
account as collateral security for this principal amount of
Convertible Notes. These proceeds and their associated security
interest will be released subject to the Company's having met
certain conditions.
Pursuant to this transaction, holders of outstanding subordinate
convertible notes have consented to the maturity extensions of
such notes to September 2013. In return, holders of the
subordinate notes will be issued 3-year warrants to purchase an
equal number of shares of the Company's common stock underlying
these notes at a price equal to the conversion price of the newly
issued senior notes.
A full-text copy of the press release announcing the transaction
is available for free at http://is.gd/P0IVhS
About Genta Incorporated
Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB:
GNTA) -- http://www.genta.com/-- is a biopharmaceutical company
engaged in pharmaceutical (drug) research and development. The
Company is dedicated to the identification, development and
commercialization of novel drugs for the treatment of cancer and
related diseases.
EisnerAmper LLP, in Edison, New Jersey, expressed substantial
doubt about Genta's ability to continue as a going concern
following the 2010 financial results. The independent auditors
noted that of the Company's recurring losses from operations,
negative cash flows from operations and current maturities of
convertible notes payable.
Amper, Politziner & Mattia, LLP, in Edison, New Jersey, did not
include a going concern explanatory paragraph in its audit report
on the Company's financial statements for fiscal 2009.
The Company reported a net loss of $167.3 million on $257,000 of
sales for 2010, compared with a net loss of $86.3 million on
$218,000 for 2009.
The Company's balance sheet at June 30, 2011, showed $6.44 million
in total assets, $19.10 million in total liabilities, and a
$12.65 million total stockholders' deficit.
At June 30, 2011, Genta had cash and cash equivalents totaling
$5.2 million, compared with $12.8 million at Dec. 31, 2010. Net
cash used in operating activities during the first six months of
2011 was $7.3 million, or approximately $1.2 million per month.
Bankruptcy Warning
Presently, with no further financing, the Company projects that it
will run out of funds during the third quarter of 2011. The
Company currently does not have any additional financing in place.
If the Company is unable to raise additional funds, it could be
required to reduce its spending plans, reduce its workforce,
license one or more of its products or technologies that it would
otherwise seek to commercialize, sell certain assets, or even
declare bankruptcy. The Company said there can be no assurance
that it can obtain financing, if at all, or raise such additional
funds, on terms acceptable to it.
GRAYMARK HEALTHCARE: Mark Moore Discloses 8.26% Equity Stake
------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Mark P. Moore and his affiliates disclosed
that they beneficially own 1,264,374 shares of common stock of
Graymark Healthcare, Inc., representing 8.26% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/4AHxy9
About Graymark Healthcare
Oklahoma City, Okla.-based Graymark Healthcare, Inc. (NASDAQ:
GRMH) -- http://www.graymarkhealthcare.com/-- is one of the
largest providers of care management solutions to the sleep
disorder market based on number of independent sleep care centers
and hospital sleep diagnostic programs operated in the United
States.
As reported in the TCR on April 5, 2011, Eide Bailly LLP, in
Greenwood Village, Colo., expressed substantial doubt about
Graymark Healthcare's ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has suffered significant losses from
operations, anticipates additional losses in the next year and has
insufficient working capital as of Dec. 31, 2010, to fund the
anticipated losses.
The Company's balance sheet at June 30, 2011, showed
$31.32 million in total assets, $23.76 million in total
liabilities, and $7.56 million in total equity.
GREENWICH SENTRY: Disclosure Hearing Rescheduled to Sept. 20
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has adjourned the hearing on Greenwich Sentry, L.P.'s motion to
approve the adequacy of the Disclosure Statements, previously
scheduled on Sept. 1, 2011, to Sept. 20, 2011, at 10:00 A.M.
As reported in the TCR on Aug. 10, 2011, Greenwich Sentry, L.P.
and Greenwich Sentry Partners L.P., submitted to the U.S.
Bankruptcy Court of Southern District of New York their disclosure
statements explaining their respective plans of reorganizations
dated as of July 20, 2011.
According to the Disclosure Statements, the Plans have
substantially similar operative terms, with the exception of
certain monetary amounts and other numbers involved that are
specific to each Debtor.
The primary components of both Debtors' plan are:
-- the payment in full of allowed administrative expense
claims, allowed professional fee claims, allowed priority tax
claims, allowed priority claims and allowed general unsecured
claims;
-- the implementation of a settlement with the BLMIS trustee
for the estate of Bernard L. Madoff Investment Securities; and
-- the establishment of two trusts to hold the retained assets
left in the Debtor's estate after consummation of the BLMIS
trustee settlement and payment of allowed claims with priority
over the allowed limited partner interests of certificates
representing the beneficial ownership of the trusts.
The central feature of Greenwich Sentry Partners, L.P.'s Plan is
the BLMIS trustee settlement, wherein the Debtor believing,
pursuant to its good faith business judgment, that avoidance
action claims of the BLMIS trustee would be difficult to defend,
has agreed, in sum, to allow the BLMIS trustee a claim and
judgment in the amount of $5,985,000 and the BLMIS trustee has
agreed to seek recovery of his claim only from certain specified
assets of the Debtor, to allow the Debtor's customer claim against
BLMIS in the amount of $2,011,304, to share recovery on certain
litigation claims with the Debtor, and to provide for the
distribution of the retained assets to creditors and limited
partners free and clear of the BLMIS trustee claims.
The central feature of Greenwich Sentry, L.P.'s Plan is the BLMIS
trustee settlement, wherein the Debtor, believing, pursuant to its
good faith business judgment, that avoidance action claims of the
BLMIS trustee would be difficult to defend, has agreed, in sum, to
allow the BLMIS trustee a claim and judgment in the amount of $206
million, and the BLMIS trustee has agreed to seek recovery of his
claim only from certain specified assets of the Debtor, to allow
the Debtor's customer claim against BLMIS in the amount of $35
million, to share recovery on certain litigation claims with the
Debtor, and to provide for the distribution of the retained assets
to creditors and limited partners free and cler of the BLMIS'
trustee's claims.
The BLMIS trustee agreed to support the Plans and Disclosure
Statement and to vote his claim in favor of the Plans pursuant to
the settlement agreements. BLMIS is a broker-dealer registered
with the Securities and Exchange Commission, though customer
accounts maintained by the Debtors at BLMIS. The Debtors have
been informed that holder of not less than $60 million in limited
partner interests in GS also favor the Court's approval of the
Disclosure Statements and confirmation of the Plans.
The Plans provide the Debtors' creditors with substantial
recoveries and allows for recovery of equity.
Full-text copies of the Disclosure Statements are available for
free at:
http://bankrupt.com/misc/GREENWICHSENTRY_DS.pdf
http://bankrupt.com/misc/GREENWICHSENTRYPartners_DS.pdf
About Greenwich Sentry
Liquidators of Fairfield Sentry Limited, filed a Chapter 15
petition for Fairfield in June 2010 (Bankr. S.D.N.Y. Case No.
10-13164). In July 2010, Kenneth Krys and Christopher Stride of
Krys & Associates (BVI) Limited, the liquidators of Fairfield
Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda
Limited obtained cross-border recognition as foreign main
proceedings by the U.S. Bankruptcy Court of the funds' insolvency
proceedings, pending in the British Virgin Islands. The
liquidators are represented in the U.S. by Brown Rudnick LLP.
Fairfield Sentry Limited was the largest "feeder fund" to Bernard
L. Madoff Investment Securities LLC, and invested approximately
95% of its assets with BLMIS. BLMIS was placed into liquidation
proceedings in the United States in December 2008, after it was
revealed that Bernard Madoff operated BLMIS as a Ponzi scheme for
many years. Fairfield Sigma Limited and Fairfield Lambda Limited
were both feeder funds of Fairfield Sentry Limited, and invested
all of their assets with Fairfield Sentry Limited.
Greenwich Sentry, L.P., and an affiliate filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-16229) on Nov. 19, 2010,
hoping to settle lawsuits filed against it in connection with its
investments with Bernard L. Madoff. Paul R. DeFilippo, Esq., at
Wollmuth Maher & Deutsch LLP, in New York, represents the Debtors
in the Chapter 11 cases.
Bernard L. Madoff was charged by the Securities and Exchange
Commission in December 2008 of orchestrating the largest Ponzi
scheme in history, with losses topping US$50 billion. In March
2009, Mr. Madoff pleaded guilty to 11 federal crimes and admitted
to turning his wealth management business into a Ponzi scheme. A
trustee was appointed to liquidate and has been filing clawback
suits against investors who withdrew phony profits from Mr.
Madoff.
On May 18, 2009, Irving H. Picard, the trustee liquidating the
estate of Mr. Madoff and his firm, Bernard L. Madoff Investment
Securities, LLC, filed a lawsuit against Fairfield Sentry and
Greenwich, seeking the return of $3.55 billion that Fairfield
withdrew from Madoff during the period from 2002 to Madoff's
arrest in December 2008. Since 1995, the Fairfield funds invested
about $4.5 billion with BLMIS.
Mr. Picard claims that Fairfield knew or should have known about
the fraud give that it received from BLMIS unrealistically high
and consistent annual returns of between 10% and 21% in contrast
to the vastly larger fluctuations in the S&P 100 Index.
In schedules filed with the Court, Greenwich Sentry disclosed
$317,073,770 in total assets and $206,337,244 in total
liabilities.
GREYSTONE PHARMA: Can Sell QuickDerm to Vet Care, Cash Restricted
-----------------------------------------------------------------
Kevin Crumbo, the duly appointed trustee for Greystone
Pharmaceuticals, Inc., sought and obtained an order from the
Honorable Paulette J. Delk granting in part and denying in part a
motion to sell certain property free and clear of liens and to use
the sale proceeds to relocate and preserve the Debtor's books and
records.
The terms of the sale of the Debtor's product known as QuickDerm
to TENNTEX, Inc. d/b/a Vet Care, Inc. were agreed upon in large
part before the appointing of the Trustee. The product has been
specifically made and packaged for Vet Care, and has salable value
only to the Purchaser. The Court found that the sale of the
product, QuickDerm, to Vet Care presents the only means of
maximizing the value of this property of the estate. The purchase
price is $12,000.
The sale of QuickDerm to Vet Care is a sale in the ordinary course
of business under Sec. 363(c)(1) of the Bankruptcy Code; the
Trustee filed the Motion out of an abundance of caution.
All valid liens, security interests and rights in the QuickDerm
product will attach to the sale proceeds, which are cash
collateral as defined in Sec. 363(a). The sale proceeds are
subject to restrictions under Sec. 363(c)(2)(a) and (c)(2)(b).
Fifth Third Bank objected to the Motion, contending that any order
on the proposed sale should condition the use of the sale proceeds
upon the consent of BLN Capital Funding, LLC, which holds a
perfected security interest and liens in substantially all of the
Debtor's assets. Fifth Third, in turn, holds a first priority
security interest in substantially all assets of BLN Capital.
According to Fifth Third, BLN Capital's current obligations to it
aggregate approximately $19,000,000.
The Court noted that Fifth Third has not consented to the use of
the cash collateral as contemplated in Section 363(c)(2). In the
Order, the Court stated that it has not heard any "persuasive
evidence" that the objecting creditor's interest will be
adequately protected if the cash collateral is used by the
Trustee.
Accordingly, the Court ruled that:
* The Trustee may complete the sale to Vet Care free and
clear of liens; and
* The Trustee will not use the proceeds of the sale to Vet
Care to transport books and records of the estate, or for
any other purpose.
In his Motion, the Trustee related that the Debtor's estate
currently has less than $2,000 available and that he is in
"immediate need" of funds to relocate and preserve the Debtor's
books and records, both physical and electronic, from at least two
of the three business locations of the Debtor to a new centralized
location.
The Trustee asserted that the relocation is "critical at this
time" because the Debtor is or anticipates being evicted from
certain locations due to lack of funds for rent. Further, the
records can be utilized by interested parties to conduct due
diligence related to the other assets of the Debtor, specifically
but not limited to the intellectual property, thus advancing
toward the sale of more significant assets to benefit the Debtor's
estate or otherwise bringing value to the estate, he said.
A sua sponte case management conference pursuant to Section
105(d)(1) of the Bankruptcy Code was scheduled for Sept. 6.
About Greystone Pharmaceuticals, Inc.
Fort Myers, Florida-based Greystone Pharmaceuticals, Inc. -- aka
Greystone Medical, Inc., and Greystone Medical Group, Inc. --
operates a pharmaceutical company. The Company filed for Chapter
11 bankruptcy protection (Bankr. W.D. Tenn. Case No. 09-32236) on
Nov. 2, 2009. David J. Cocke, Esq., at Evans Petree PC, in
Memphis, Tenn., represents the Unsecured Creditor's Committee as
counsel. In its schedules, the Debtor disclosed $25,467,546 in
assets, and $22,601,150 in liabilities as of the Petition Date.
H.J. HEINZ FINANCE: Fitch Rates Series B Preferred Stock at 'BB+'
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BBB' rating to H.J. Heinz Company's
(Heinz) $300 million 2.0% senior unsecured notes due Sept. 12,
2016 and $400 million 3.125% senior unsecured notes due Sept. 12,
2021. Fitch currently rates Heinz and its subsidiaries as
follows:
H.J. Heinz Co.
-- Long-term Issuer Default Rating (IDR) 'BBB';
-- Bank facilities 'BBB';
-- Senior unsecured debt 'BBB';
-- Short-term IDR 'F2';
-- Commercial paper (CP) 'F2'.
H.J. Heinz Finance Co. (HFC)
-- Long-term IDR 'BBB';
-- Bank facilities 'BBB';
-- Senior unsecured debt 'BBB';
-- Series B Preferred Stock 'BB+';
-- Short-term IDR 'F2';
-- Commercial paper 'F2'.
H.J. Heinz Finance UK Plc.
-- Long-term IDR 'BBB';
-- Senior unsecured debt 'BBB'.
The Rating Outlook is Positive.
Heinz plans to use the net proceeds from this debt issuance for
general corporate purposes, including repayment of commercial
paper. Fitch does not expect this issuance to result in an
increase in total debt. The new notes contain a Change of Control
Triggering Event. Upon the occurrence of both a Change of Control
and rating downgrades below investment grade, unless Heinz
exercises its right to redeem the notes, the company will be
required to make an offer to purchase the notes at a price equal
to 101% of the aggregate principal amount plus accrued and unpaid
interest. The notes were issued under Heinz's indenture dated
July 15, 2008, which contains restrictions on secured debt but
does not contain financial covenants.
Heinz's ratings continue to reflect the company's solid cash flow
generating ability, its product and geographic diversification and
its leading market positions in major product categories. Heinz
generates more than 60% of its sales outside the U.S., so currency
fluctuations periodically impact earnings. Approximately 23% of
sales were from emerging markets in the first fiscal quarter of
2012, and emerging markets are expected to remain the company's
primarily growth driver. However, growth in developed markets,
where Heinz generated 77% of its sales in the most recent quarter,
is challenged due to high unemployment, cost conscious consumers,
and higher pricing to help offset heightened commodity inflation.
The Positive Outlook reflects Heinz's improvement in leverage over
the past two years through earnings growth and modest debt
reduction. Fitch is likely to upgrade Heinz's ratings if the
company continues on this trajectory of slightly lower leverage in
the near to intermediate term via earnings growth and repayment of
a portion of its upcoming debt maturities. Although Heinz
completed approximately $600 million of acquisitions in fiscal
2011, total debt has remained relatively flat, as overseas cash
was primarily used to fund the acquisitions. Fitch believes Heinz
is likely to continue its bolt-on acquisitions strategy funded
mainly using overseas cash.
Heinz's major product categories include its namesake ketchup, as
well as condiments and sauces, frozen food, soup, beans, infant
food and other processed foods. Ketchup, condiments and sauces
comprise slightly more than 40% of sales. EBITDA margins have
remained in the high teens over the past several years, and are in
the top tier for the packaged food industry, despite commodity
inflation which peaked at approximately 12% in fiscal 2009 and
remains volatile. Heinz's gross inflation on commodities was
about 5% in fiscal 2011 and is expected to be approximately 7% in
fiscal 2012 as it moderates in the back half of the year from
approximately 8% in the quarter ending July 27, 2011. Heinz's
inflation drivers are sweeteners, oils, dairy and resin. Heinz
still incurred a significant lag between input costs and pricing
actions in the most recent quarter, particularly in U.S.
Foodservice with national account contracts.
Heinz's internally generated liquidity is substantial. The
company has generated more than $450 million of average annual
free cash flow (cash flow from operations less dividends and
capital expenditures) during the past four years, including
significant pension contributions. Fitch expects free cash flow
in fiscal 2012 to be down moderately from its four year average,
driven by $130 million of cash restructuring costs, higher capital
expenditures and dividends. Cash and cash equivalents were $677.7
million at July 27, 2011. Heinz's cash flow priorities include
growing its dividend, bolt-on acquisitions, debt reduction, and
keeping a steady level of shares outstanding. Fiscal 2012 constant
currency sales growth of 7-8% is expected to be driven by emerging
markets growth, acquisitions and higher pricing in developed
markets.
At July 27, 2011, there were no borrowings on Heinz and HFC's
$1.5 billion committed credit facility expiring in June 2016. In
addition, Heinz had approximately $400 million of short-term
foreign credit lines available. Upcoming debt maturities are
manageable and include $600 million 6% notes due March 15, 2012
and $500 million 5.35% notes due July 15, 2013. Also, the company
is required to remarket $119 million securities due December 2020
on Dec. 1, 2011 or repurchase the securities at 100% of principal
plus accrued interest. For the latest 12 months ended July 27,
2011, Heinz's total debt-to-operating EBITDA was 2.5 times (x),
funds from operations (FFO) adjusted leverage was 3.2x, and
operating EBITDA-to-gross interest expense was 7.1x. Heinz's
total debt was $5 billion, factoring in Fitch's adjustment to
include the face amount of HFC's $931 million 7.125% notes due
2039 in total debt.
HAWAII MEDICAL: Patient Care Umpire Taps Lyons Brandt as Counsel
----------------------------------------------------------------
Diane M. Okumura, the duly appointed patient care ombudsman in the
Chapter 11 cases of Hawaii Medical Center, et al., asks the U.S.
Bankruptcy Court for the District of Hawaii for permission to
retain Lyons, Brandt, Cook & Hiramatsu as her counsel.
The firm will assist the ombudsman in the preparation of reports
and motions and in the performance of her statutory duties.
To the best of the ombudsman'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:
LYONS, BRANDT, COOK & HIRAMATSU
James N. Duca, Esq.
1800 Davies Pacific Center
841 Bishop Street
Honolulu, HI 96813
Tel: (808) 524-7030
Fax: (808) 533-3011
E-mail: jduca@lbchlaw.com
About Hawaii Medical Center
The Hawaii Medical Center, along with its affiliates, filed for
Chapter 11 bankruptcy (Bankr. D. Hawaii Lead Case No. 11-01746) on
June 21, 2011, just a year after exiting court protection. Hawaii
Medical Center owns two hospital campuses -- HMC East in North
Honolulu and HMC West in Ewa Beach. The two hospitals have 342
licensed beds and have a total of more than 1,000 employees. The
hospitals were known as St. Francis Medical Center before Hawaii
Medical purchased the hospitals in 2007.
Judge Robert J. Faris presides over the 2011 case. Lawyers at
Moseley Biehl Tsugawa Lau & Muzzi, in Honolulu, Hawaii, and
McDonald Hopkins LLC, in Cleveland, Ohio, serve as the Debtors'
counsel. The Debtors' financial advisors are Scouler & Company,
LLC. In its petition, Hawaii Medical Center estimated $50 million
to $100 million in assets and $100 million to $500 million in
debts. The petitions were signed by Kenneth J. Silva, member of
the board of directors.
Attorneys at Wagner Choi & Verbrugge, in Honolulu, Hawaii, and
Pachulski Stang Ziehl & Jones LLP, in Los Angeles, represent the
Official Committee of Unsecured Creditors as counsel.
The Debtors' prepetition debt structure is comprised of (i) the
Prepetition Revolving Loan with MidCap Financial, LLC, and the
Prepetition Term Loan with St. Francis Healthcare Systems of
Hawaii. As of the petition Dte, the aggregate outstanding
principal on the Prepetion MidCap Revolving Loan and the
Prepetition St. Francis Term Loan is approximately $46,851,772.
The principal balance of the Prepetion MidCap Revolving Loan is
approximately $7,676,495. The amount owed under the Prepetition
St. Francis Term Loan is approximately $39,175,277, secured by St.
Francis's first priority lien on, among other things, all real
property of the Debtors.
Through this Chapter 11 filing, the Debtors plan to return the
hospitals to the control of St. Francis.
In the prior case, HMC and its affiliated debtors were converted
to new, Hawaii non-profit corporations. CHA Hawaii, one of HMC's
affiliated debtors and a subsidiary of Cardiovascular Hospitals of
America, LLC, discontinued management of the reorganized Debtors.
Wichita, Kansas-based CHA Hawaii LLC, and its affiliates --
including Hawaii Medical Center LLC -- filed for Chapter 11
protection on Aug. 29, 2008 (Bankr. D. Del. Case No. 08-12027).
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP
represented the Debtors in their restructuring efforts. CHA
Hawaii estimated assets of up to $10 million and debts between
$50 million and $100 million when it filed for bankruptcy. The
Debtors obtained confirmation of their Chapter 11 plan in May 2010
and emerged from bankruptcy in August 2010.
The Debtor disclosed $74,713,475 in assets and $91,599,563 in
liabilities as of the Chapter 11 filing.
HAWKER BEECHCRAFT: "KJ" Tjon Appointed Chief Financial Officer
--------------------------------------------------------------
Hawker Beechcraft Corporation announced the appointment of Karin-
Joyce "KJ" Tjon as its new Chief Financial Officer. Tjon joins
the Company's Senior Leadership Team and will be responsible for
the management and direction of the Company's finance and
accounting organization.
Ms. Tjon brings more than 20 years of experience in all facets of
management and international corporate finance in both public and
private environments. She joins HBC from Alvarez & Marsal, LLC, a
leading global professional services firm, where she spent
approximately 10 years, most recently as Managing Director. Ms.
Tjon has held CFO positions for several companies in a variety of
industries, such as manufacturing, transportation, and
telecommunications, where she built world-class international
finance teams. She has also worked on numerous performance
improvement projects in the areas of cash management, operations
and acquisition integration.
Ms. Tjon's compensation program includes: (i) an annual base
salary of $300,000; (ii) participation in the Management Incentive
Plan with a target incentive of 75% of her base annual salary,
pro-rated from September through December for 2011; (iii) a
$100,000 signing bonus payable within four weeks of beginning her
employment; and (iv) a relocation allowance of $3,000 per month
for 30 months. Subject to approval by the HBI Board of Directors,
Ms. Tjon Sien Fat will receive a grant of 80,000 restricted stock
units that will be exchangeable for shares of common stock of HBI
under certain circumstances. In addition, Ms. Tjon Sien Fat will
be entitled to 18 months of severance pay if, as a result of a
change in control, her scope of authority is materially diminished
from the level in effect on her hiring date, and such diminishment
is not for cause. There will be no severance payable if there is
a change in control and she maintains her position as Chief
Financial Officer of the Company or the business that consists of
substantially all of the assets of the Company, notwithstanding
the fact that she may no longer be the Chief Financial Officer of
HBI, the parent company.
Ms. Tjon holds an MBA in finance from Columbia University's
Graduate School of Business and a bachelor's degree in management
and organizational behavior from Ohio University.
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 June 30, 2011, showed $3.01 billion
in total assets, $3.33 billion in total liabilities and a $317.30
million in total deficit.
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.
HOLLIFIELD RANCHES: Committee & Keyank Object to Plan Disclosures
-----------------------------------------------------------------
The Official Unsecured Creditors Committee of Hollifield Ranches,
Inc., objects to the adequacy of the Disclosure Statement proposed
by the Debtor because it fails to provide adequate information as
required by Section 1125(b) of the Bankruptcy Code that would
allow the unsecured creditors to make an informed judgment about
their treatment in the proposed Chapter 11 Plan
The Committee states that the Disclosure Statement fails to
provide adequate information regarding:
a. A liquidation analysis of the Debtor; and
b. An analysis of current market and other factors affecting
the Debtor's proposed distribution to unsecured creditors
under the Chapter 11 Plan. During the hearings on cash
collateral and at other times after Debtor's petition in
this case, Debtor has represented its intention to pay
100% of the unsecured claims. The Disclosure Statement
and the Chapter 11 Plan now indicate less than a 100%
payment to unsecured creditors. The Debtor has not
provided any explanation to the unsecured creditors as to
the change in Debtor's representations.
c. An analysis of how Debtor will overcome the absolute
priority rule given proposed payments of substantially
less than 100% to unsecured creditors.
The Committee is represented by:
J. Justin May, Esq.
Glenn W. Godfrey, Esq.
MAY, BROWNING & MAY
1419 W. Washington
Boise, Idaho 83702
Tel: (208) 429-0905
Fax: (208) 342-7278
E-mail: jmay@may-law.com
KeyBank National Association, a secured creditor of Hollifield
Ranches, Inc., also opposes the Debtor's Disclosure Statement and
requests that approval be delayed until the Debtor has provided
adequate information.
KeyBank states that the Disclosure Statement does not reflect
adequate information as required by Section 1125 of the Bankruptcy
Code because:
* It does not explain the basis and logic behind the proposed
4.25% interest rate that is fixed over a period of 20
years. The Disclosure Statement should discuss the current
applicable market rate to the proposed loan.
* It does not reflect any feasibility analysis to determine
the future operation of Debtor over the life of the
proposed Plan.
* It does not explain whether the Debtor has engaged in
post-petition commodity trading, without Court approval.
* It does not explain why Debtor has sold substantially more
alfalfa than projected.
* It does not explain why Debtor has spent $150,703.33 less
for "Veterinary & Medicine" as projected, through
June 15, 2011.
* It does not explain why the dairy operation has
underperformed projections by nearly $500,000, despite
receiving nearly $250,000 more in cull cattle and calf
income than originally projected.
* It does not explain why the dairy operation has experienced
a significant decrease of cattle since last fall.
* It is out of date, having been filed with the Court on
April 15, 2011.
* While it states that "secured debts will be paid to the
extent of their values," no such values are reflected in
the Disclosure Statement.
* It states that the total secured indebtedness owed to
KeyBank is $12,668,960.16. In fact, and as stated in the
Proof of Claim filed by KeyBank in this case on Oct. 19,
2011, the total indebtedness owed by Debtor to KeyBank is
$13,100,148.67, plus accruing costs, interest, and attorney
fees.
* It now states that unsecured claims will be paid at the
rate of 50% of each such claim. On the last day of the
cash collateral hearing, Debtor's counsel represented to
this Court and to interested parties that Debtor would
propose a 100% payout plan. The Disclosure Statement
contains no explanation for such discrepancy, which is
critical to all parties in interest in this action.
* It does not reflect how Debtor will overcome the absolute
priority rule to preserve current equity interests when
payments of only 50% of the total amount due are proposed
to the unsecured creditor class.
* It does not include a liquidation analysis necessary so
that creditors can determine if Debtor's Plan meets the
best interest of creditors test.
* It does not reflect Debtor's income and expenses for the
most pertinent period-involving Debtor's operation of its
various farm operations since the date of the filing of the
bankruptcy, and reflecting Debtor's ability to meet income
and expense provisions reflected in the Budget attached to
this Court's Cash Collateral Order.
* While it states that Debtor intends to abandon certain
property, it contains no details as to what property will
be abandoned, and no detail as to why Debtor has determined
that such particular property is burdensome, of
inconsequential value, or burdensome to the estate.
* It attaches "pertinent parts of the debtor's income tax
returns for 2004 through 2009, which show debtor's actual
income and expenses for the past six years." Such
information, without attendant schedules and forms relative
to the tax returns of Debtor, is not sufficient information
to provide adequate information to parties in interest.
* It does not reflect the status of numerous leases that were
apparently assumed by Debtor.
* It contains no information regarding the entities that were
merged pre-petition into Debtor.
KeyBank is represent by:
Randall A. Petennan, Esq.
Noah G. Hillen, Esq.
MOFFATI THOMAS BARRETT ROCK & FIELDS, CHARTERED
101 S. Capitol Blvd., 10th Floor
Boise, Idaho 83701
Phone: (208) 345-2000
Fax: (208) 385-5384
E-mail: rap@moffatt.com
ngh@moffatt.com
The hearing on the Disclosure Statement is set on Sept. 27, 2011,
at 9:00 a.m.
About Hollifield Ranches, Inc.
Hansen, Idaho-based Hollifield Ranches, Inc., filed for Chapter 11
bankruptcy protection (Bankr. D. Idaho Case No. 10-41613) on
Sept. 9, 2010. Brent T. Robinson, Esq., in Rupert, Idaho,
represents the Debtor. The Debtor estimated assets and debts at
$10 million to $50 million as of the Chapter 11 filing.
Robert D. Miller, Jr., the United States Trustee for Region 18,
has appointed three creditors to serve as members of the Unsecured
Creditors' Committee in the Chapter 11 case of Hollifield Ranches,
Inc. J. Justin May, Esq., at May, Browning & May represents the
Official Committee of Unsecured Creditors.
J.C. EVANS: To Employ Buttler Burgher as Real Estate Appraiser
--------------------------------------------------------------
J.C. Evans seeks permission from the U.S. Bankruptcy Court for the
District Texas to employ Butler Burgher Group, LLC as Real Estate
appraiser.
Upon retention, the firm has agreed to, among other things:
(a) appraise the HQ Properties;
(b) to the extent possible within the time constraints of this
engagement, draft and deliver an appraisal report
containing the Firm's findings and conclusions; and
(c) provide litigation services, if necessary, including
pre-trial preparation and consulting, deposition testimony,
and/or court testimony.
The Debtors are unaware of any circumstances where the Firm is or
was adverse to the Debtors or otherwise has a conflict of interest
or connection with the Debtors that would disqualify it from
providing services for the Debtors in the Chapter 11 cases.
Accordingly, the Debtors believe that the employment of the Firm
in these Cases is permissible under the Bankruptcy Code and is in
the best interest of all parties in interest.
Under the Agreement, the Debtors agree to pay the Firm a fee of
$10,000, of which $5,000 will be paid to the Firm as a retainer to
secure the Firm's employment. Additionally, to the extent that
the Debtors require the Firm to provide litigation consulting
services, the Firm will bill at rates ranging from $250 per hour
to $350 per hour, depending on the experience of the professional
providing such services and/or the type of service to be provided.
The Debtors also agree to reimburse the Firm for reasonable
expenses incurred in connection with its provision of litigation
consulting services. The employment and compensation of the Firm
is governed by the requirements set out in Sec. 327, 328, and 504
of the Bankruptcy Code and F.R.B.P. Rule 2014.
About J.C. Evans Construction
With roots stretching back over 55 years, J.C. Evans is a heavy
equipment construction company based in Leander, Texas. Through
J.C. Evans Construction Co., L.P., a Texas limited partnership
d/b/a/ American Aggregates, the Company owns and operates a
construction company specializing in heavy site preparation on
commercial, pipeline, utility and highway projects, including
excavating, trenching, site preparation and construction. Through
Adkins Land Development, L.P., a Texas limited partnership, the
Company owns a 700-acre quarry, which produces aggregate for use
in road construction.
J.C. Evans Construction Holdings is the holding company that owns
directly or indirectly each of the other entities. In turn,
Holdings is owned by a trust for the benefit of the current and
former employees of J.C. Evans through an Employee Stock Ownership
Plan.
Six affiliated companies filed for Chapter 11 (Bankr. W.D. Tex.
Case Nos. 11-11926 to 11-11931) on Aug. 1, 2011. These are JCE
Delaware Inc., J.C. Evans Construction Holdings, J.C. Evans
Nevada, LLC, EQUUS Development Inc., J.C. Evans Construction and
Adkins Land Development. The cases are jointly administered
before Judge Craig A. Gargotta. George H. Tarpley, Esq., and
Mark E. Andrews, Esq., at Cox Smith Matthews Incorporated, serve
as bankruptcy counsel. In its petition, JCE Delaware estimated
$50 million to $100 million in both assets and debts.
J.C. EVANS: Hires Tittle Advisory to Solicit DIP Financing
----------------------------------------------------------
J.C. Evans seeks permission from the U.S. Bankruptcy Court for the
District Texas to employ Title Advisory Group, Inc. as financial
advisors.
Upon retention, the firm, will among other things:
(a) advise the Debtors in obtaining DIP financing;
(b) solicit DIP financing on behalf of the Debtors; and
(c) evaluate DIP financing offers.
The Debtors are unaware of any circumstances where TAG is or was
adverse to the Debtors or otherwise has a conflict of interest or
connection with the Debtors that would disqualify it from
providing services for the Debtors in the Cases. Accordingly, the
Debtors believe that the employment of TAG in the Chapter 11 cases
is permissible under the Bankruptcy Code and is in the best
interest of all parties in interest.
Under the Agreement, the Debtors agree to pay TAG on an hourly
basis up to a maximum fee of $10,000. TAG will receive a $10,000
retainer to secure its employment. TAG will support the Fee with
hourly charges, based upon the applicable hourly rates of the TAG
professionals performing services are:
Personnel Hourly Rate
--------- -----------
John Little $350
Other professionals $150-$250
About J.C. Evans Construction
With roots stretching back over 55 years, J.C. Evans is a heavy
equipment construction company based in Leander, Texas. Through
J.C. Evans Construction Co., L.P., a Texas limited partnership
d/b/a/ American Aggregates, the Company owns and operates a
construction company specializing in heavy site preparation on
commercial, pipeline, utility and highway projects, including
excavating, trenching, site preparation and construction. Through
Adkins Land Development, L.P., a Texas limited partnership, the
Company owns a 700-acre quarry, which produces aggregate for use
in road construction.
J.C. Evans Construction Holdings is the holding company that owns
directly or indirectly each of the other entities. In turn,
Holdings is owned by a trust for the benefit of the current and
former employees of J.C. Evans through an Employee Stock Ownership
Plan.
Six affiliated companies filed for Chapter 11 (Bankr. W.D. Tex.
Case Nos. 11-11926 to 11-11931) on Aug. 1, 2011. These are JCE
Delaware Inc., J.C. Evans Construction Holdings, J.C. Evans
Nevada, LLC, EQUUS Development Inc., J.C. Evans Construction and
Adkins Land Development. The cases are jointly administered
before Judge Craig A. Gargotta. George H. Tarpley, Esq., and
Mark E. Andrews, Esq., at Cox Smith Matthews Incorporated, serve
as bankruptcy counsel. In its petition, JCE Delaware estimated
$50 million to $100 million in both assets and debts.
JULIUS GRAY: Dist. Ct. Affirms Dismissal of Bankruptcy Case
-----------------------------------------------------------
District Judge Sean F. Cox tossed an appeal of the Estate of
Julius Gray challenging the order by Hon. Marci B. McIvor granting
the United States Trustee's motion to dismiss the Estate's Chapter
11 case. The Chapter 11 case was filed by Jeanine Gray, the
spouse of Mr. Gray, deceased. The Estate asserts the bankruptcy
court erred when it found that the Estate is not a "person" under
the bankruptcy code, and therefore ineligible for bankruptcy
relief. The Estate also appeals the bankruptcy court's decision
to dismiss the bankruptcy case nunc pro tunc. The appellees are
the U.S. Trustee, Daniel M. McDermott, and the foreclosing lender
of the Estate's property, Fifth Third Bank.
In June 2007, Julius Gray, now deceased, purchased a home at 20946
Richmond Drive, Northville, Michigan. Mr. Gray executed two
mortgages on the home -- a first mortgage in the amount of
$1,000,000 held by Fifth Third, and a $100,000 home equity line of
credit, held by Chase Bank. Mr. Gray's wife, Jeanine, was not
listed as a title-holder to the property or as a liable party to
either of the mortgages. Mr. Gray committed suicide on April 3,
2009, and after his death, Ms. Gray fell behind on the monthly
mortgage payments. For almost a year-and-half, Ms. Gray and Fifth
Third discussed the possibility of a loan modification, which
would have required Ms. Gray to assume the mortgage note, but the
negotiations did not result in a resolution between the parties.
According to the Estate, the Estate was fully probated in state
court during this time and its only remaining asset was the
property.
Fifth Third scheduled a foreclosure sale for Sept. 7, 2010, at
10:00 a.m. The negotiator for Fifth Third refused to adjourn for
the foreclosure sale. Less than 4 minutes before the foreclosure
sale, Ms. Gray filed a Chapter 11 bankruptcy petition to stop the
foreclosure sale. Rather than filing the bankruptcy petition
under her name and social security number, however, Ms. Gray filed
the bankruptcy petition in the name of the Estate and under the
social security number of Mr. Gray. In its brief, the Estate
explains that, "If the Surviving Spouse filed the bankruptcy
petition under her social security number, it would destroy her
credit rating making it impossible for her to obtain financing
(e.g., debtor in possession "DIP" financing) to pay off the Bank
and/or HELOC." Fifth Third proceeded with the foreclosure sale
and the property sold for $800,000, which is $300,000 less than
the debts owed on the home.
The U.S. Trustee argues the Estate cannot be a "debtor" as defined
in the Bankruptcy Code. Fifth Third concurred with the U.S.
Trustee and also filed its own motion to dismiss the case and to
declare the automatic stay void nunc pro tunc.
In dismissing the case, the Bankruptcy Court held that if the
debtor wants to keep her house that badly and she believes that
she has an asset that can be renegotiated in bankruptcy, she has
to file. "If the debtor wants to keep her house that badly and
she believes that she has an asset that can be renegotiated in
bankruptcy, she has to file. You can't file an asset . . . on the
grounds that it will potentially harm the owner of the asset's
credit if she files for bankruptcy. If this is her house and she
wants to renegotiate the debt in bankruptcy, she can file. Ruining
her credit is not a defense to a motion to dismiss against the
estate," Judge McIvor had said.
The District Court affirmed, saying the Bankruptcy Court did not
err when it held that a probate estate is not a "person" under the
Bankruptcy Code.
A copy of the District Court's Sept. 6, 2011 Opinion and Order is
available at http://is.gd/vUaHkmfrom Leagle.com.
A voluntary Chapter 11 petition was filed for The Estate of Julius
Gray by Jeanine Gray, Surviving Spouse & Heir (Bankr. E.D. Mich.
Case No. 10-67918) on Sept. 7, 2010. Jack B. Wolfe, Esq. --
thewolfelawgroup@yahoo.com -- at The Wolfe Law Group, presides
over the case. The Estate scheduled $600,000 in assets and
$1,147,000 in debts.
KEVEN MCKENNA: Accuses U.S. Trustee of "Seeking Revenge"
--------------------------------------------------------
Tracy Breton at the Providence Journal reports that Keven A.
McKenna, the former state representative and municipal court judge
who last year ran for attorney general, claims in court papers
that a United States trustee's claim that he made "materially
false" claims in his Chapter 11 bankruptcy filings should be
thrown out.
According to the report, in papers filed with the U.S. Bankruptcy
Court in Providence, Mr. McKenna asserts that Asst. U.S. Trustee
Gary L. Donahue is "seeking revenge" against him because McKenna
exercised his First Amendment rights and called for Mr. Donahue's
firing from his public office for "misuse of his powers."
Mr. Donahue is the lawyer representing William K. Harrington, the
Boston-based United States Trustee for U.S. Bankruptcy Court in
Providence who has filed an adversary complaint against McKenna.
Mr. McKenna currently has personal and business bankruptcy cases
open.
The report says, last month, Mr. Harrington filed a complaint
against Mr. McKenna -- yet to be scheduled for hearing -- in which
he alleges that Mr. McKenna knowingly lied under oath in his
bankruptcy filings, understating his income and other assets,
including $93,000 in legal fees he recently tried to collect from
a Bristol estate. The U.S. Trustee also alleges that Mr. McKenna
"failed to disclose" that he paid his wife, Sheila Bentley
McKenna, $58,250 in February 2009 and an additional $55,000 on
Oct. 23, 2009 -- the year before he filed for bankruptcy.
Mr. Mckenna said in his newly filed court papers that he is not
trying to cheat any legitimate creditors and wants to pay them 100
percent of what they're owed. He also denies that he knowingly or
fradulently tried to conceal assets or his income.
In addition to seeking dismissal of Harrington's complaint, he is
asking Bakruptcy Judge Arthur N. Votolato to award him costs and
reasonable attorney's fees, notes the report.
About Keven A. McKenna
Keven A. McKenna filed for Chapter 11 bankruptcy for himself and
Keven A. McKenna law firm (Bankr. D. R.I. Case No. 10-10274)
on Jan. 25, 2010. Mr. McKenna disclosed $751,000 in assets and
$45,700 in liabilities in his bankruptcy petition. His firm
estimated debts of between $100,000 and $500,000. Mr. McKenna's
case was dismissed but his personal bankruptcy protection claim
remains active as he continues to fight a Workers' Compensation
Court order that he pay his former paralegal Summer D. Stone for
injuries.
At the behest of the Official Committee of Unsecured Creditors,
the Bankruptcy Court on Nov. 18, 2010, appointed Providence
bankruptcy lawyer Thomas P. Quinn as Chapter 11 trustee of McKenna
PC to take over management of the law firm. Chief District Judge
Mary M. Lisi affirmed the Chapter 11 trustee appointment order in
a May 31, 2011 Memorandum and Order.
KT SPEARS: Wants First Savers' Request for Stay Relief Denied
-------------------------------------------------------------
KT Spears Creek, LLC, asks the U.S. Bankruptcy Court for the
District of South Carolina to deny First Savers Bank and
Plantation Federal Bank's request for relief from the automatic
stay.
As reported in the Troubled Company Reporter on Aug. 17, 2011,
First Savers, a division of Plantation Federal Bank, asked the
Court for relief from the automatic stay to permit it to foreclose
its lien on a 65.94-acre tract of unimproved land in Richland
County, South Carolina, owned by the Debtor, if necessary, to
redeem the Property with respect to a tax sale.
Pursuant to motion, as of the Petition Date, the total outstanding
amount owed to First Savers is alleged to be $6,753,339. First
Savers allege that they are also entitled to per diem interest of
$1,154.90, pursuant to the 7% contract rate.
According to the Debtor, First Savers' motion alleges that it is
entitled to relief from the automatic stay for cause because: (1)
the Debtor has no equity in the First Savers property; (2) First
Savers is not adequately protected; and (3) the Bankruptcy
Petition was allegedly filed in bad faith.
The Debtor notes that First Savers asserts it is not adequately
protected, but does not list any type of diminution in value to
the property.
The Debtor explains that First Savers is adequately protected
through its equity cushion in the First Savers property thus
obviating the need for adequate protection payments.
Also, First Savers has not made any assertions that there has been
or will be any diminution in the value of their collateral
postpetition. The Debtor hereby asserts that no such diminution
of value is occurring.
The Debtor further explains that it is in the process of preparing
a plan of reorganization to show how it will rehabilitate its
operations. The Debtor is operating an apartment complex that
after paying ongoing expenses has sufficient funds to protect that
secured creditor. Such income will assist with the
reorganization.
About KT Spears
KT Spears Creek, LLC, in Houston, Texas, filed for Chapter 11
bankruptcy (Bankr. S.D. Tex. Case No. 11-33991) on May 3, 2011,
Judge Letitia Z. Paul presiding. The Debtor estimated $10 million
to $50 million in both assets and debts. The petition was signed
by Kyle D. Tauch, sole
member.
The Hon. Letitia Z. Paul transferred the Debtor's Chapter 11 case
to the Bankruptcy Court for the District of South Carolina. The
Case No. is 11-04241. The case was assigned to Chief Judge John
E. Waites. Daniel J. Reynolds, Jr., Esq., and G. William
McCarthy, Jr., Esq., at McCarthy Law Firm, LLC, represent the
Debtor as counsel.
KT SPEARS: Opposes RBC Centura's Case Dismissal Request
-------------------------------------------------------
KT Spears Creek, LLC, asks the U.S. Bankruptcy Court District Of
South Carolina to deny a motion seeking dismissal of its Chapter
11 case.
As reported in the Troubled Company Reporter on Aug. 5, 2011, RBC
Bank (USA), Inc., asked the Court to dismiss the Debtor's Chapter
11 case, citing that the case was filed in bad faith to thwart RBC
from completing its foreclosure of the property.
In support of its claim that this is a "bad faith" filing, RBC
Bank related that the Debtor is a single asset real entity, has
no employees, the cash flow generated by the apartment complex is
insufficient to fund a confirmable plan of reorganization, and the
Debtor has no or relatively few unsecured creditors.
Further, RBC Bank said that prior to the filing of the
foreclosure, Kyle Tauch, the Debtor's principal, caused over
$350,000 to be diverted to an affiliated company and failed to pay
over the $800,000 in taxes owed on the property securing the
Bank's debt. RBC Bank noted also that the Chapter 11 case is
nothing more that a dispute between the Debtor and its secured
lenders, and that it believes that that Debtor has no hope for a
successful Plan of Reorganization.
Pursuant to RBC's motion, as of the Petition Date, the total
outstanding amount owed to RBC Bank is alleged to be $22,494,711
RBC Bank alleges that they are also entitled to per diem interest
of $9,507, pursuant to an 18% default rate.
According to the Debtor, in order to warrant a dismissal of the
bankruptcy proceeding as a bad faith filing, RBC must first show
the objective futility of the Debtor's Chapter 11 case. RBC's
motion provides little, if any, factual support in order for the
Court to find objective futility.
The Debtor continued that there exist unsubstantiated allegations
by RBC of a misappropriation of funds by the Debtor, but the
Debtor asserts it can show that the funds were sent to an
affiliate in the ordinary course of dealings and were used for the
benefit of the Debtor.
About KT Spears
KT Spears Creek, LLC, in Houston, Texas, filed for Chapter 11
bankruptcy (Bankr. S.D. Tex. Case No. 11-33991) on May 3, 2011,
Judge Letitia Z. Paul presiding. The Debtor estimated $10 million
to $50 million in both assets and debts. The petition was signed
by Kyle D. Tauch, sole
member.
The Hon. Letitia Z. Paul transferred the Debtor's Chapter 11 case
to the Bankruptcy Court for the District of South Carolina. The
Case No. is 11-04241. The case was assigned to Chief Judge John
E. Waites. Daniel J. Reynolds, Jr., Esq., and G. William
McCarthy, Jr., Esq., at McCarthy Law Firm, LLC, represent the
Debtor as counsel.
LBP PROPERTIES: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: LBP Properties, LLC
fdba Texas Land Liquidators, LLC
100 Interstate 45 North, Suite 109
Conroe, TX 77301
Bankruptcy Case No.: 11-37712
Chapter 11 Petition Date: September 6, 2011
Court: U.S. Bankruptcy Court
Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Jeffery Dayne Carruth, Esq.
WEYCER, KAPLAN, PULASKI & ZUBER, P.C.
3030 Matlock Road, Suite 201
Arlington, TX 76015
Tel: (817) 795-5046
Fax: (866) 666-5322
E-mail: jcarruth@wkpz.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Thomas E. Aikin, member/president.
LEE ENTERPRISES: Has Out-of-Court Deal With Lenders
---------------------------------------------------
Lee Enterprises, Incorporated LEE has reached agreement with a
significant majority of the holders of its revolving credit and
term loan facilities to provide for extension of maturities to
2015 and 2017.
"This is excellent news for Lee stockholders and employees," said
Mary Junck, Lee chairman and chief executive officer. "It will
allow us to refinance our bank debt on good terms and keep Lee on
solid financial footing as we continue to expand our digital
platforms, build audiences, drive revenue performance and improve
our balance sheet."
Lee's current credit facility will be amended and extended beyond
its current maturity of April 2012 in a structure of first and
second lien debt. The first lien consists of a term loan of $689.5
million, along with a $40 million revolving credit facility that
is not expected to be drawn at closing. The second lien consists
of a $175 million term loan.
Among provisions of the arrangements:
- The first lien term loan of $689.5 million carries interest at
LIBOR plus 6.25 percent with a LIBOR floor of 1.25 percent.
The maturity is December 2015. Interest on the $40 million
revolver is LIBOR plus 5.0 percent with a LIBOR floor of 1.25
percent. Quarterly amortization payments for the term loan
total $10 million annually in the first year, beginning June
2012, increasing to $12 million in the second year and to $13.5
million thereafter. A quarterly cash flow sweep will also be
used to reduce debt. Covenants include a minimum interest
coverage ratio, maximum total leverage ratio and capital
expenditure limitation.
- The second lien term loan of $175 million carries an interest
rate of 15 percent and matures in April 2017. It requires no
amortization and has no affirmative financial covenants.
Creditors will share in the issuance of approximately 6,744,000
shares of Lee Common Stock, an amount equal to 13 percent of
outstanding shares on a pro forma basis as of the closing date.
- As a condition to the agreement, Lee will be required to
refinance the remainder of its debt, the Pulitzer Notes, with a
separate $175 million loan still to be arranged. The current
obligation matures in April 2012.
Carl Schmidt, Lee vice president, chief financial officer and
treasurer, said the method for implementing the agreement is
expected to be determined within the next few weeks. "Getting the
support of more than 90 percent of our creditors is a significant
milestone and allows us to turn our attention to refinancing the
Pulitzer Notes. Assuming successful completion of that financing,
we expect to implement the transactions out of court if we can get
lender support up to 95 percent. Otherwise we will seek to
implement the transactions through a favorable prepackaged Chapter
11 filing. Such a filing, if necessary, would be expected to have
no adverse impact on company operations, employees, vendors,
advertisers or subscribers. Subject to dilution resulting from
the issuance of the new shares, current stockholders' interests in
the equity of the company would be preserved."
The Blackstone Group is serving as Lee's financial adviser for the
transactions.
In a letter to stockholders and employees, Junck said:
"The refinancing will remove a cloud that has obscured Lee's
formidable strengths in our markets, how far we have advanced
against the challenge of the national economy, and how
successfully we are seizing emerging opportunities in the changing
media landscape:
- We have more journalists in our markets than all of our
competitors combined and provide news vital to our communities.
Without us, most local news would never come to light.
- We also have more sales representatives, and no competitor can
match the results we deliver for advertisers. Because of our
strong products and sales culture, Lee has outpaced the industry
in advertising revenue performance for eight years running.
- More than 80 percent of adults in our larger markets read or use
our print and digital products each week. More than two-thirds
of 18- to 29-year-olds read or use our newspapers. We deliver
news, information and advertising around the clock on our
websites, mobile sites, smartphone apps and tablet apps.
- We continue to drive rapid digital growth, with year-over-year
digital advertising revenue up 22 percent in the June quarter.
Unique visitors to our digital sites increased 29 percent to
21.6 million in the month of June versus a year ago, while
mobile page views jumped 220 percent. This summer, we have
deployed latest-generation iPhone applications in all 53 of our
markets and upgraded our smartphone apps for local sports. We
also are in the process of rolling out iPad apps in 10 of our
larger markets, with others to follow.
- Through the recession and the slow economic recovery, we have
continued to readjust our business model and produce strong cash
flow, allowing us to reduce debt by $760 million since June
2005.
"In brief, we believe the refinancing agreement, together with our
many strengths and accomplishments, helps reinforce a solid
foundation for Lee's future."
t.
About Lee Enterprises
Lee Enterprises, Inc., headquartered in Davenport, Iowa, publishes
the St. Louis Post Dispatch and the Arizona Daily Star along with
more than 40 other daily newspapers and about 300 weeklies.
Revenue for the 12 months ended December 2010 was approximately
$780 million.
The Company's balance sheet at June 26, 2011, showed $1.18 billion
in total assets, $1.26 billion in total liabilities, and a
$75.71 million total deficit.
* * *
As reported by the Troubled Company Reporter on May 16, 2011,
Standard & Poor's lowered its preliminary corporate credit rating
on Lee to 'B-' from 'B'. The rating outlook is negative. "The
downgrade is based on the company's significant near-term
maturities and our belief that alternative refinancing options
will likely be costly," said Standard & Poor's credit analyst Hal
F. Diamond. "We withdrew our 'B' preliminary issue rating on Lee
Enterprises' proposed $680 million first-lien senior secured notes
due 2017 with a preliminary recovery rating of '3' (also
withdrawn), indicating our expectation of meaningful (50%-70%)
recovery for lenders in the event of a payment default," S&P
related.
As reported by the TCR on May 6, 2011, Moody's withdrew its
ratings on Lee after the publisher cancelled a planned refinancing
that would have included the upsizing of its first lien senior
secured notes due 2017 to $680 million from $675 million, and
shifting of the coupon on the $375 million senior secured notes
due 2018 to a cash/PIK combination from all cash. Moody's had
previously assigned Caa1 Corporate Family Rating on Lee.
LEHMAN BROTHERS: St. Note Holders Concerns' Nearing Resolution
--------------------------------------------------------------
Zamansky & Associates said in a statement that recent months have
brought a flurry of activity for investors who purchased Lehman
structured notes, particularly through UBS. Each of the
developments may have an impact on the legal rights of those
investors.
First, in June, UBS suffered its largest loss before a FINRA
arbitration panel, the investor recovering over $2 million as a
result of UBS's misconduct. This award follows a string of
arbitration cases awarding compensation for Lehman note losses.
Next, a federal judge in New York ruled in a UBS -- Lehman note
class action case that the offering documents that described
Lehman's so-called "principal protection" notes were false and
misleading. UBS has always defended itself by arguing that even
if its sales practices were faulty, its customers received
adequate risk disclosure in these materials. That defense is now
gone.
And finally, it appears that the bankruptcy proceeding is moving
toward a resolution for creditors, including structured note
holders. The court overseeing the unwinding of Lehman has
approved a plan that would pay creditors--including holders of
structured products--about 20 cents on the dollar. The bankruptcy
court's ruling paves the way for a creditors' vote this Fall, so a
partial payout may finally be in sight.
In light of these important developments, it now appears that
Lehman note holders who were sold their notes by UBS should take
action. First, they should consider whether they want to "opt out"
of the class action and seek justice on an individual basis. And
second, they should carefully track the bankruptcy proceedings to
see what the amount of their partial recovery will be.
Zamansky & Associates won the first case--and has now won the
largest case--against UBS regarding Lehman structured products,
and represents dozens of additional UBS customers who are working
to hold UBS responsible for its misconduct.
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)
LEVELLAND/HOCKLEY: Withdraws Motion to Revise Tenaska Agreement
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
approved Levelland/Hockley County Ethanol, LLC's withdrawal of its
amended and restated to approve entry into revised asset
management agreement with Tenaska BioFuels, LLC.
The Debtor filed its motion on Aug. 8.
As reported in the Troubled Company Reporter on June 8, 2011,
Tenaska BioFuels has backed out of a proposed processing agreement
with Levelland's ethanol plant after a federal bankruptcy judge
turned down the plant's request to seal the draft agreement from
public view.
The TCR reported that GE Business Financial Services, which
represents the Levelland-Hockley County Ethanol plant's largest
secured creditor had objected to the request, as did the unsecured
creditors committee.
Under the deal, Tenaska would have supplied grain, natural gas and
chemicals to the plant and marketed the ethanol and distilled
grains. The plant would have received net sales proceeds minus a
processing fee paid to Tenaska on the ethanol sales.
GE expressed concerns at the time that such a deal would prevent
the plant from being used for other purposes.
About Levelland Ethanol
Levelland/Hockley County Ethanol LLC is a Texas limited liability
company that owns and operates a 40 million gallon per annum
Ethanol production plant located in Levelland, Hockley county,
Texas. The LLC has over 100 members many of whom are local
farmers, business people and civic leaders. A recent appraisal
Of its facility values its assets, with the Plant under full
operation, at over $51.5 million.
Levelland Ethanol filed for Chapter 11 bankruptcy (Bankr. N.D.
Tex. Case No. 11-50162) on April 27, 2011. The Debtor is
represented by I. Richard Levy at Block & Garden, LLP, in Dallas.
The Debtor disclosed total assets of $60,451,124 and total
liabilities of $47,557,432 in its schedules.
On May 9, 2011, William T. Neary, U.S. Trustee for Region 6,
appointed unsecured creditors to the Official Committee of
Unsecured Creditors in the Debtor's cases. Haynes and Boone, LLP,
represents the Committee.
L.I.F.T. LLC: Summoned to Answer Bankruptcy Allegations
-------------------------------------------------------
L.I.F.T. (Louisiana Institute of Film Technology), LLC, has been
summoned to appear before the Bankruptcy Court to answer
bankruptcy allegations.
New Orleans, Louisiana-based L.I.F.T. is the subject of an
involuntary Chapter 11 bankruptcy petition (Bankr. E.D. La. Case
No. 11-12806) filed on Aug. 26, 2011, by Malcolm Petal, c/o Ruth
Petal, also of New Orleans. Judge Jerry A. Brown presides over
the case. Malcolm Petal asserts a claim for $1,218,500 on account
of a loan.
LIGHTHOUSE FINANCIAL: Lindenwood Associates Appointed as Trustee
----------------------------------------------------------------
On August 31, Lindenwood Associates, LLC was appointed Trustee of
the Post-Confirmation Trust of Lighthouse Global Partners, LLC and
Lighthouse Financial Group.
For more information, contact Nat Wasserstein, Administrator at
646-349-9617.
Lindenwood Associates -- http://www.lindenwoodassociates.com--is
an end stage crisis management firm located in New York. For more
information.
Lighthouse Financial Group LLC, a former securities brokerage
firm, filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y.
Case No. 10-16506) on December 8, 2010, disclosing $4,119,919 in
assets and $14,577,070 in debts.
Holding company Lighthouse Global Partners also filed for
Chapter 11, estimating up to $10 million in debt and under
$1 million in assets.
Adam L. Rosen, Esq., at Silverman Acampora LLP, in Jericho, New
York, represents the Debtors.
LONGVIEW ALUMINUM: Member With Voting Power Still Insider
---------------------------------------------------------
Joe Celentine at Courthouse News Service reports that a board
member with voting power is still an insider for the purpose of
corporate bankruptcy recovery proceedings, even if other members
blocked his access to company records, the 7th Circuit ruled.
According to the report, before Longview Aluminum filed for
Chapter 11 bankruptcy, Dominic Forte was one of the Company's five
board members and held a 12 percent interest in the Company. From
2001 to June 2002, Mr. Forte was repeatedly denied requests to
view the Company's business records. The executive filed suit
against the board member with the highest percentage interest in
Longview, Michael Lynch, alleging that Lynch had used his
controlling interest to bar access to the records and was
excluding Forte from management decisions.
The report notes, on Aug. 20, 2002, the board members executed a
majority written consent suspending Mr. Forte's right to access
Longview's information and records, and investigating whether the
requests were made for an improper purpose.
Mr. Forte was eventually offered $400,000, plus attorneys' fees
and costs, in exchange for his agreement to leave the board. He
agreed and received a $200,000 cashier's check the same day. A
$15,000 check for attorneys' fees followed. But when Longview
filed for Chapter 11 in March 2003, the bankruptcy trustee brought
an adversary action to recover the payments made to Forte.
Mr. Forte said he surrendered $15,000, conceding that payments
made within three months of the date of a Chapter 11 filing can be
recovered. But he refused to refund the $200,000, claiming that
he was not an "insider" and was thus not subject to a one-year
recovery period.
Though once a board member, Forte argued that he had been stripped
of his decision-making authority and insider status by the board's
majority written consent and subsequent settlement.
A bankruptcy judge, U.S. District Court judge and three-judge
panel of the 7th Circuit rejected this logic.
About Longview Aluminum
Longview Aluminum, L.L.C., operated a high-purity aluminum
smelting facility and sought chapter 11 protection on March 4,
2003 (Bankr. D. Del. Case No. 03-10642, subsequently transferred
to Bankr. N.D. Ill. Case No. 03-12184). Longview estimated its
assets and debts at less than $10 million at the time of the
filing. William A. Brandt serves as the Chapter 11 trustee for
the estate of Longview Aluminum, L.L.C., and is represented by
Daniel A. Zazove, Esq., and Kathleen A. Stetsko, Esq., at Perkins
Coie, LLP, in Chicago.
LOS ANGELES DODGERS: Committee Hiring Lazard as Investment Bankers
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the creditors' committee for the Los Angeles Dodgers
baseball club filed papers this week for authority to hire Lazard
Freres & Co. as the panel's financial adviser and investment
banker. If approved by the bankruptcy judge at a Sept. 26
hearing, the firm would receive a $125,000 monthly fee plus
$1.25 million for a successful restructuring. The fee will be
earned if the team has a restructuring, reorganization,
recapitalization or sale.
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.
The reorganization is being financed with a $150 million unsecured
loan from the Commissioner of Major League Baseball. The loan
gives the Commissioner few of the controls lenders often demanded
from bankrupt companies.
The U.S. Trustee has formed an Official Committee of Unsecured
Creditors. The Major League Players Association is co-chair of
the Committee.
MADISON 92: Hotel Case Facing Dismissal, Chapter 11 Trustee
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Madison 92nd Street Associates LLC, faces a hearing
on Sept. 13 where some of the Company's owners will seek dismissal
of the Chapter 11 case or appointment of a trustee.
According to the report, the hotel's manager, Courtyard Management
Corp., filed papers saying it supports having a Chapter 11 trustee
because of a deadlock in management and doesn't oppose dismissal.
As reported in the Sept. 8 edition of the TCR, Robert Gladstone,
as co-managing member of the Debtor Madison 92nd Street
Associates, LLC, John Lesher and Andrew Harris, as members
of the Debtor, have filed a motion seek an order from the U.S.
Bankruptcy Court for the Southern District of New York (i)
dismissing the Chapter 11 case pursuant to Section 1112(b) of the
Judiciary and Judicial Procedure Code, or, (ii) in the
alternative, appointing a (y) Chapter 11 trustee pursuant to
Sections 1104(a)(1) and (2) of the Judiciary and Judicial
Procedure Code or (z) Chapter 11 examiner pursuant to Section
1104(c)(1) of the Judiciary and Judicial Procedure Code.
On behalf of the Gladstone Parties, Adam H. Friedman, Esq., at
Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York,
asserts that the case should either be dismissed or a Chapter 11
trustee or examiner appointed because the Debtor's purported co-
managing members -- 92nd St. Hotel Associates LLC, controlled by
Louis Taic, and JKNY, LLC, owned by Jeffrey Kosow -- have:
(i) Filed the bankruptcy case without corporate authority in
direct contravention of the provisions of the Debtor's
Operating Agreement; and
(ii) Breached their fiduciary duty to the Debtor and its
members by "knowingly" violating the Operating Agreement,
by Hotel Associates reneging on its commitment to sign a
fully negotiated $86,000,000 stalking horse sale contract,
which would have paid creditors in full and provided a
significant return to equity, and engaging in a strategy
to "squeeze" the Gladstone Parties to sell their
membership interest at a steep discount.
About Madison 92nd Street Associates
Madison 92nd Street Associates, LLC, owns real property improved
by a hotel located at 410 East 92nd Street, New York, known as the
Upper East Side Courtyard by Marriott. It filed for Chapter 11
bankruptcy protection as lender General Electric Capital Corp.,
owed $74 million, has scheduled a foreclosure sale for Aug. 24,
2011. The petition (Bankr. S.D.N.Y Case No. 11-13917) was filed
Aug. 16, 2011, before Judge Stuart M. Bernstein. J. Ted Donovan,
Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as the
Debtor's counsel. It scheduled $84,471,069 in assets and
$75,398,580 in debts. The petition was signed by Louis Taic,
managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow,
managing member of JKNY, LLC, members of the Debtor.
Courtyard Management Corporation, which manages and operates the
hotel pursuant to a management agreement, is represented by:
Thomas R. Califano, Esq.
William M. Goldman, Esq.
DLA PIPER LLP (US)
1251 Avenue of the Americas
New York, NY 10020
Telephone: (212) 335-4500
Facsimile: (212) 335-4501
E-mail: william.m.goldman@dlapiper.com
thomas.califano@dlapiper.com
MARCO POLO: Hearing on DIP Loan, Cash Collateral Set for Sept. 15
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing on Sept. 15, 2011, at 10:00 a.m. (ET) to
consider Marco Polo Seatrade B.V., et al.'s request to obtain
debtor-in-possession financing, and use the prepetition lenders'
cash collateral. Objections, if any, are due Sept. 9, 2011, at
4:00 p.m.
The Debtors asked the Court for authorization:
a. to borrow up to $2,400,000 in principal amount, on an
interim basis, and up to $4,800,000 in principal amount, on
a final basis, of postpetition financing;
b. to grant certain priming liens and superpriority claims to
the DIP lender to secure the Debtors' obligations under the
DIP agreement;
c. for the DIP Lender to require repayment of the DIP Facility
in full or conversion into equity pursuant to a plan of
reorganization, or any combination of the foregoing, upon an
event triggering the Stated Maturity Date in accordance with
the DIP Agreement; and
e. to schedule a final hearing on Sept. 30, to consider entry
of a final order.
The Debtors relate that they were able to acquire postpetition
financing on favorable terms from Futmarine, B.V., a non-debtor
joint venture 50% owned by MPS, whose only assets are two
unencumbered bank accounts holding about $4.89 million. The cash
is the net proceeds generated by the sale of unfinished shipping
assets and will be used to provide the DIP facility.
The Debtors will use the money to fund new voyages, operate their
businesses and administer these cases, the Debtors believe that
the DIP Facility will enable them to maximize the value of their
assets for the benefit of all stakeholders.
As of the Petition Date, the Debtors had prepetition secured
indebtedness of approximately $211,743,838, consisting of these:
a. Credit Agricole Facility: $89,743,8385 outstanding under
that certain loan agreement, dated as of Sept. 22, 2005,
among MPS, the several lenders party thereto from time to
time, and Credit Agricole, as agent; and
b. Royal Bank of Scotland Facility: $117,664,9536 outstanding
under that certain loan agreement, dated as of Aug. 14,
2007, among MPS, the several lenders party thereto from time
to time, and RBS as agent.
Summary of the proposed material terms of the DIP Documents:
DIP Credit Agreement Parties:
Borrower: Seaarland Shipping Management B.V.
Guarantors: Marco Polo Seatrade B.V., Magellano Marine C.V. and
Cargoship Maritime B.V.
DIP Lender: Futmarine B.V. or its designee.
Maturity:
The DIP Facility terminates on the earliest to occur of:
(i) Aug. 1, 2012; (ii) the effective date of any plan of
reorganization with respect to any obligor; (iii) the date of
conversion of any case to a case under Chapter 7 of the
Bankruptcy Code; (iv) the date of any termination of the
exclusivity period for any obligor; and (v) the date of any
appointment of a Chapter 11 trustee or other disinterested
person with expanded powers.
Standby Nature; Use of Proceeds:
The Debtors plan to use the cash collateral of the prepetition
lenders. During the term of the cash collateral order, the
Borrower will be entitled to draw on the DIP Facility. After
any termination of the cash collateral Order, the Borrower will
be entitled to draw on the DIP Facility (i) to pay necessary
expenses to operate, insure and maintain the vessels and (ii)
to pay other administrative expenses, including allowed
professional fees and expenses of the Debtors.
To the extent the Prepetition Lenders have final allowed
adequate protection claims under the cash collateral Order for
a diminution in value, the Borrower will be required to draw on
the DIP Facility to pay the claims.
Interest Rates:
Borrower to pay 5% interest per annum, which will accrue and be
payable on the Stated Maturity Date.
Liens and Priorities:
DIP Liens. The obligations of the Borrowers under the DIP
Facility will be secured by these liens:
a. First Priority Liens. The DIP Facility will be secured by
a perfected first priority security interest and lien on
all now owned or hereafter acquired assets and property of
the obligors.
b. Junior Priority Liens. The DIP Facility will be secured
by a perfected junior security interest and lien on the
DIP Collateral to the extent that such DIP Collateral is
subject to valid, perfected and unavoidable liens that
were in existence immediately prior to the Petition Date.
c. Priming Liens. The DIP Facility will be secured by a
perfected first priority priming security interest and
lien on the DIP Collateral ahead of (i) the liens securing
the Credit Agricole Collateral, (ii) the liens securing
the RBS Collateral, (iii) any actual or asserted rights of
setoff by the Prepetition Lenders, and (iv) liens or
interests of any other party other than those holding
valid, perfected and not avoidable maritime liens under
applicable law for "necessaries" (but excluding any such
liens asserted by any of the parties referred to in the
foregoing clauses (i) through (iv)).
Adequate Protection. Substantially, the same as provided in the
cash collateral order, but subject to the DIP Liens and the
DIP Facility Administrative Priorities.
Carve-Out on certain expenses.
Cash Collateral Objection
The Official Committee of Unsecured Creditors filed its limited
objection to the Debtors' cash collateral motion. The Committee
related that since its formation, the Committee has not had an
opportunity to investigate the claims and liens asserted by Credit
Agricole Corporate and Investment Bank and The Royal Bank of
Scotland, plc and the extent, validity, or enforceability of the
asserted claims and liens.
According to the Committee, Credit Agricole Corporate and
Investment Bank and The Royal Bank of Scotland, plc each assert
liens on the Debtors' vessels and upon related cash collateral.
The Committee requested: (i) that it have a sufficient opportunity
to review, comment and be heard on any final cash collateral
order(s) and budget(s) before their entry; (ii) that the Court
condition entry of any final cash collateral order(s) on the
requested changes and clarifications sought.
Based upon the Committee's review of the interim cash collateral
order, the Committee submitted that the entry of any final cash
collateral order(s) must be conditioned on, among other things:
-- Any adequate protection liens provided to ca and rbs will
exclude avoidance actions and the proceeds thereof;
-- Any adequate protection liens and adequate protection
superpriority claims will be subject to the adequate
protection condition (i.e., valid only to the extent
that the senior lenders' prepetition claims exist, are
valid, prior to all others, and not subject to defense,
offset, avoidance or subordination);
-- The carve-out for Committee professionals for allowed fees
and expenses after use of cash collateral is terminated will
be no less than $50,000; and
-- Any reports or statements provided to a senior lender will
be simultaneously provided to the Committee professionals.
The Committee is represented by:
BLANK ROME LLP
Marc E. Richards, Esq.
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
Tel: (212) 885-5000
Objections to A.P. Moller-Maersk's Request
The Royal Bank of Scotland plc, Credit Agricole, and the Committee
objected to A.P. Moller-Maersk's request to condition the Debtors'
use of cash collateral on providing adequate protection or, in the
alternative, providing relief from the automatic stay.
RBS related that as a threshold matter, Maersk has failed to
sustain its burden of proof. Mere allegations by Maersk of having
made a prima facie case do not supplant proof of the alleged
property interest under applicable non-bankruptcy laws.
Additionally, Maersk's asserted security interest is contradicted
by the RBS Loan Agreement and the Tripartite Assignments, each of
which includes a negative pledge concerning the assets pledged to
RBS.
The Committee stated that Maersk stated that the letter assignment
creates a protectible interest in the Debtors' cash collateral.
Based on its motion, the interest could be in the nature of a
transfer of ownership, a lien granted, or a setoff. The Maersk
Motion does not specify as much.
According to Credit Agricole, Maersk has failed to allege or prove
that its alleged security interest has obtained priority over the
security interest of Credit Agricole. Maersk has also failed to
show what consideration was given to the Debtors for the alleged
grant of the security interest.
Credit Agricole noted that pursuant to the Tripartite Assignment,
it has a security interest in the Debtor's assets. Credit
Agricole stated that as security for amount borrowed under the
loan agreement, MPS as owner, Debtor Magellano Marine C.V. as
operator and Credit Agricole (as successor-in-interest to Calyon)
as security trustee entered into a Tripartite Assignment dated
Sept. 26, 2005, with respect to, inter alia, the earnings of the
vessel DIANA, owned by MPS. In the Tripartite Assignment, the
Debtors MPS and Megallano ganted a security interest in the
earnings of he vessel DIANA, including any pool revenues, and the
Debtors assigned all their rights and interests in the earnings
and pool revenues to Credit Agricole.
RBS is represented by:
Gregory M. Petrick, Esq.
Ingrid Bagby, Esq.
Sharon J. Richardson, Esq.
One World Financial Center
New York, NY 10281
Tel: (212) 504-6000
Fax: (212) 504-6666
E-mail: gregory.petrick@cwt.com
ingrid.bagby@cwt.com
sharon.richardson@cwt.com
Credit Agricole is represented by:
Alfred E. Yudes, Jr., Esq.
Jane Freeberg, Sarma, Esq.
WATSON, FARLEY & WILLIAMS (New York) LLP
1133 Avenue of the Americas, 11th Floor
New York, NY 10036
Tel: (212) 922-2200
Fax: (212) 922-1512
About Marco Polo
Marco Polo Seatrade B.V. operates an international commercial
vessel management company that specializes in providing
commercial and technical vessel management services to third
parties. Founded in 2005, the Company mainly operates under the
name of Seaarland Shipping Management and maintains corporate
headquarters in Amsterdam, the Netherlands. The primary assets
consist of six tankers that are regularly employed in
international trade, and call upon ports worldwide.
Marco Polo and three affiliated entities filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29,
2011. The other affiliates are Seaarland Shipping Management
B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V.
Marco Polo is the sole owner of Seaarland, which in turn is the
sole owner of Cargoship, and also holds a 5% stake in Magellano.
The remaining 95% stake in Magellano is owned by Amsterdam-based
Poule B.V., while another Amsterdam company, Falm International
Holding B.V. is the sole owner of Marco Polo. Falm and Poule
didn't file bankruptcy petitions.
The filings were prompted after lender Credit Agricole Corporate
& Investment Bank seized one ship on July 21, 2011, and was on
the cusp of seizing two more on July 29. The arrest of the
vessel was authorized by the U.K. Admiralty Court. Credit
Agricole also attached a bank account with almost US$1.8 million
on July 29. The Chapter 11 filing precluded the seizure of the
two other vessels.
Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J.
Schoulder, Esq., at Bracewell & Giuliani LLP, serve as bankruptcy
counsel. The cases are before Judge James M. Peck.
The petition noted that the Debtors' assets and debt are both
more than US$100 million and less than US$500 million.
MARTHA REYNOLDS TRUST: Not Eligible to Chapter 12 Conversion
------------------------------------------------------------
The Martha Reynolds Trust's attorney alluded to the possibility of
conversion of the Debtor's case to a case under chapter 12 in his
argument and response brief to the U.S. Trustee's motion to
dismiss. "Although it would not have changed the court's decision
about dismissing the case even if debtor qualified to be a chapter
12 debtor, I do not think it would qualify as a 'family
fisherman,'" Bankruptcy Judge Herb Ross said in a Sept. 7, 2011
Memorandum, a copy of which is available at http://is.gd/iDPY4p
from Leagle.com. The judge said to qualify, the debtor would have
to be conducting a "commercial fishing operation." 11 USC Sec.
109(A)(B). What the debtor describes in its response is more like
a "sport fishing" charter operation, than a "commercial fishing
operation."
The Martha Reynolds Trust filed for Chapter 11 bankruptcy
(Bankr. D. Alaska Case No. 11-00616) on Aug. 9, 2011. A copy
of the Debtor's petition is available at no charge at
http://bankrupt.com/misc/akb11-00616.pdf
METROGAS S.A.: Posts ARS17.7MM Net Loss in 6 Months Ended June 30
-----------------------------------------------------------------
MetroGAS S.A. filed its unaudited consolidated interim financial
statements as of June 30, 2011, reporting a net loss of
ARS17.7 million on ARS544.4 million of sales for the six months
ended June 30, 2011, compared with a net loss of ARS38.4 million
on ARS519.0 million of sales for the same period of 2010.
The Company's balance sheet at June 30, 2011, showed total assets
of ARS2.541 billion, total liabilities of ARS1.732 billion,
minority interest of ARS621,000, and shareholders' equity of
ARS808.2 million.
Reorganization Proposal to All Unsecured Creditors
On July 12, 2011, the Company presented before the Court a
Reorganization Proposal to all unsecured creditors with proved and
admissible claims. The offer consists of the payment of the
unsecured claims, either proved or admissible, by means of the
delivery, in exchange for and payment of such credits, of
negotiable obligations payable in 14 years, in American Dollars,
for forty five per cent (45%), measured in American Dollars, of
the unsecured claims verified or declared admissible (the
"Negotiable Obligations").
The Negotiable Obligations will be amortized 1% per year from year
3 to, and including, year 13, and the remaining balance (89%) will
be amortized at the maturity of the Negotiable Obligations, in the
year 14. The Negotiable Obligations will accrue interest at an
annual fixed rate of 4% and will be issued in two series under
substantially the same terms and conditions. Both will be offered
in public bids. One of the series will be offered in exchange to
those creditors with unsecured claims who hold existing negotiable
obligations with public offer, and the other series will be
offered to the other unsecured creditors who are not bondholders.
Going Concern Doubt
As reported in the TCR on May 3, 2011, Price Waterhouse & Co.
S.R.L., in Buenos Aires, Argentina, expressed substantial doubt
about MetroGas S.A.'s ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted of uncertainties related to the suspension of the original
regime for tariff adjustments and the Company's petition for
voluntary reorganization in an Argentine Court on June 17, 2010.
A copy of the Company's unaudited consolidated interim financial
statements for the six months ended June 30, 2011, is available
at http://is.gd/tHZ1nC
About MetroGas
Buenos Aires, Argentina-based MetroGAS S.A., which listed its
American Depositary Shares on the New York Stock Exchange and
Buenos Aires Stock Exchange in November 1994, is Argentina's
largest natural gas distribution company in terms of number of
customers and volume of gas deliveries, according to the 2010
annual report of ENARGAS, an agency of the Argentine Government,
which has broad authority over the gas distribution and
transportation industries, including their tariffs. The Company
has approximately 2.2 million customers in its service area (the
city of Buenos Aires and southern and eastern greater metropolitan
Buenos Aires). The Company is one of nine natural gas
distribution companies formed in connection with the privatization
of Gas del Estado.
The suspension of the original regime for tariff adjustments and
the inability to generate sufficient cash flows to pay its
financial debt obligations led the Company to file a petition for
a voluntary reorganization proceeding (concurso preventivo) in an
Argentine court on June 17, 2010.
MOHEGAN TRIBAL: Four Members Elected to Tribal Council
------------------------------------------------------
The Mohegan Tribal Gaming Authority is governed by a nine-member
Management Board, whose members also comprise the Mohegan Tribal
Council, the governing body of the Mohegan Tribe of Indians of
Connecticut. Any change in the composition of the Tribal Council
results in a corresponding change in the Authority's Management
Board. The registered voters of the Tribe elect all members of
the Tribal Council.
On Aug. 30, 2011, the Tribe announced the results of its general
election wherein four of the nine seats on the Tribal Council were
chosen pursuant to staggered term provisions under the Tribe's
Constitution. Thayne D. Hutchins, Jr., Mark F. Brown, Cheryl A.
Todd and Mark M. Sperry were elected as members of the Tribal
Council. Each of the newly elected Tribal Council members will
serve four-year terms, commencing Oct. 3, 2011.
Thayne D. Hutchins, Jr., Mark F. Brown and Cheryl A. Todd are
currently members of the Tribal Council. Mark M. Sperry will
succeed Allison D. Johnson, who will remain as a member of the
Tribal Council until her successor is seated on Oct. 3, 2011.
Information concerning material related transactions between the
newly elected Tribal Council members and the Authority, as well as
information regarding the committees of the Authority's Management
Board that the newly elected Tribal Council members will be named
to after they are seated, was unavailable as of Sept. 6, 2011.
About Mohegan Tribal
Headquartered in Uncasville, Conn., Mohegan Tribal Gaming
Authority conducts and regulates gaming activities on Tribal
lands, which are federally recognized Indian tribe reservations in
southeastern Connecticut.
The Authority has noted that its Bank Credit Facility matures on
March 9, 2012 and its 2002 Senior Subordinated Notes mature on
April 1, 2012. In addition, a substantial portion of the
Authority's remaining indebtedness matures over the following
three fiscal years. The Authority believes that it will need to
refinance all or part of its indebtedness at or prior to each
maturity thereof in order to maintain sufficient resources for its
operations. The Authority has engaged Blackstone Advisory
Partners, L.P. to assist in its strategic planning relating to its
debt maturities.
The Company's balance sheet at June 30, 2011, showed $2.17 billion
in total assets, $1.99 billion in total liabilities, and
$176.04 million in total capital.
* * *
At the end of November 2010, Moody's Investors Service downgraded
Mohegan Tribal Gaming Authority's Corporate Family and Probability
of Default ratings to Caa2 from B3. All of MTGA's rated long-term
debt was also lowered. The rating outlook is negative.
The ratings downgrade reflects Moody's view that MTGA could
find it difficult to refinance significant upcoming debt
maturities without some impairment to bondholders given its high
leverage -- debt/EBITDA is over 7 times -- limited near-term
growth prospects for Mohegan Sun Casino, the likely continuation
of weak consumer gaming demand trends in the Northeastern U.S.,
and the strong possibility of gaming in Massachusetts. The
company's $675 million revolver ($527 million outstanding at
Sept. 30, 2010) expires in March 2012 and its $250 million 8%
senior subordinated notes mature in April 2012. Combined, these
debt items account for about 50% of MTGA's total debt outstanding.
MTGA has announced that it hired Blackstone Group to help deal
with its capital structure issues, although no details have been
made available regarding MTGA's options. Given the company's
recently announced weak fiscal fourth quarter results along with
the significant near- and long-term challenges previously
mentioned, Moody's believes a restructuring that involves some
impairment to bondholders will be considered.
The negative ratings outlook reflects the relatively short time
frame in which MTGA has to address what Moody's believes to be a
significant capital structure issue. If MTGA is not able to
refinance by March 2011 its $675 million revolver will be become
current. The same holds true for the company's $250 million 8%
senior subordinated notes to the extent these notes are not
refinanced by April 1, 2011.
MOORE SORRENTO: Has Until Sept. 14 to Files Schedules & Statement
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
extended the time, until Sept. 14, 2011, within which Moore
Sorrento LLC can file its schedules of assets and liabilities,
and statements of financial affairs.
According to the Troubled Company Reporter on Sept. 5, 2011,
J. Robert Forshey, Esq., at Forshey & Prostok, LLP, in Ft. Worth,
Texas, contends that ample cause exists to grant the sought
extension because the Debtor does not have any direct employees to
complete the collection, review and assembly of information for
the Schedules and Statements. He reminds the Court that the
individuals that perform work for the Debtor are employed by third
parties, including Wayne Meckley, CFO of the Debtor's property
manager, Burk Collins & Co., Ltd.
The meeting of creditors required by Section 341 of the Bankruptcy
Code is currently scheduled for September 21, 2011. If the
extension is granted, the Schedules and Statements will be file in
advance of that meeting, with ample time being afforded to all
creditors and parties-in-interest to review the Schedules and
Statements prior to the meeting, Mr. Forshey asserts.
About Moore Sorrento
Hurst, Texas-based Moore Sorrento, LLC, owns real property located
in Moore, Oklahoma, commonly known as the Shops at Moore, which
the Company operates as a retail shopping center. The center's
current 23 tenants offer various goods and services to retail
customers.
Moore Sorrento filed Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 11-44651) on Aug. 17, 2011. J. Robert Forshey,
Esq., and Matthew G. Maben, Esq., at Forshey & Prostok, LLP, serve
as the Debtor's counsel. Moore Sorrento estimated assets of up to
$100 million and debts of up to $50 million as of the Chapter 11
filing.
NATIONAL ENVELOPE: Tosses Out Plea to Use Cash Collateral
---------------------------------------------------------
National Envelope Corporation and its debtor-affiliates withdrew
their request for approval to use of cash collateral. The Debtors
said its withdrawal is in accordance with the settlement agreement
entered with ACE American Insurance Co. and ESIS Inc., which was
approved by the Court on July 20, 2011.
About NEC Holdings
Uniondale, New York-based National Envelope Corporation was the
largest manufacturer of envelopes in the world with 14
manufacturing facilities and 2 distribution centers and
approximately 3,500 employees in the U.S. and Canada.
NEC Holdings Corp., together with affiliates, including
National Envelope Inc., filed for Chapter 11 (Bankr. D. Del. Lead
Case No. 10-11890) on June 10, 2010. Kara Hammond Coyle, Esq., at
Young Conaway Stargatt & Taylor LLP, serves as bankruptcy counsel
to the Debtors. David S. Heller, Esq., at Josef S. Athanas, Esq.,
and Stephen R. Tetro II, Esq., at Latham & Watkins LLP, serve as
co-counsel. The Garden City Group is the claims and notice agent.
Bradford J. Sandler, Esq., and Robert J. Feinstein, Esq., at
Pachuiski Stang Ziehl & Jones LLP, represent the Official
Committee of Unsecured Creditors. Morgan Joseph & Co., Inc., is
the financial advisor to the Committee. NEC Holdings estimated
assets and debts of $100 million to $500 million in its Chapter 11
petition.
In September 2010, National Envelope's key assets were bought in
a roughly $208 million deal by The Gores Group LLC, a West Coast
private equity firm that manages about $2.9 billion of capital.
NATIONAL LABORATORY: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: National Laboratory Specialists, Inc.
aka NLS, Inc.
103 Roundabout Lane
Huntsville, TX 77320-0549
Bankruptcy Case No.: 11-37699
Chapter 11 Petition Date: September 5, 2011
Court: U.S. Bankruptcy Court
Southern District of Texas (Houston)
Judge: Jeff Bohm
Debtor's Counsel: Margaret Maxwell McClure, Esq.
LAW OFFICE OF MARGARET M. MCCLURE
909 Fannin, Suite 3810
Houston, TX 77010
Tel: (713) 659-1333
Fax: (713) 658-0334
E-mail: margaret@mmmcclurelaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Gene Cornstubble, president.
NEBRASKA BOOK: Court Approves Plan Support Agreement
----------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court approved
Nebraska Book Company's motion for approval of the execution and
implementation of a plan support agreement between the Debtors,
the 8.625% Noteholders, the AcqCo Noteholders and Weston Presidio.
Under the agreement, in exchange for Weston Presidio's support of
the Plan, the Debtors have agreed to provide an enhanced package
of new warrants.
Prepetition, Nebraska Book reached an agreement on a restructuring
plan with holders of more than 95% of its 8.625% senior
subordinated notes and more than 75% of its 11% discount notes.
Nebraska Book's bankruptcy plan will give control of the 96-year-
old company to bondholders, according to Reuters. Nebraska Book's
prepackaged" plan calls for holders of its 8.625% subordinated
notes to get a 78 percent equity stake, $110 million of new
unsecured notes and $30.6 million in cash. They would recover
about 87 cents on the dollar.
Holders of Nebraska Book's 11% senior discount notes would get the
remaining equity, and recover about 7 cents on the dollar, Reuters
relates.
Secured lenders, owed about $26.3 million, and secured
noteholders, owed about $200 million, would be paid in full with
cash.
If the owners of the holding company's equity interests don't
oppose the plan, they would get warrants to purchase some of the
reorganized company's equity, according to Bloomberg News.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/NEBRASKA_DS.pdf
A full-text copy of the Chapter 11 Plan is available for free
at http://bankrupt.com/misc/NEBRASKA_PLAN.pdf
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 and Stevens & Lee, P.C., 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.
NEWPAGE CORP: Receives Approval of First Day Motions
----------------------------------------------------
NewPage Corporation disclosed that its corporate parent, NewPage
Group Inc., and certain of its U.S. subsidiaries have received
approval from the United States Bankruptcy Court for the District
of Delaware on all of the First Day Motions related to its
voluntary Chapter 11 restructuring that were scheduled to be
heard. The remaining motions (dealing with certain professionals)
will be scheduled for a hearing at a later date. These approvals
give the Company the authority to continue to conduct its business
as usual without interruption in U.S. employee wages and benefits
programs or customer programs, among other stakeholder
protections.
Among the First Day Motions granted, the Company received interim
approval of its $600 million Debtor in Possession (DIP) financing
committed by JPMorgan Chase Bank, N.A., Barclays Bank PLC and
Wells Fargo Capital Finance, LLC. These facilities help ensure
the Company has adequate liquidity to continue to operate and
compete successfully while it works with its creditors and other
stakeholders to complete a Chapter 11 plan for its U.S.
operations.
Additionally, the Company emphasized that, following approval of
the motions:
It has authority to continue its pre-existing customer programs
without interruption. The Company fully intends to deliver the
same high level of quality and service its customers expect both
during and after the restructuring.
It has authority to continue its existing employee wage and
benefit programs, including expense reimbursement, vacation, sick
leave and holiday pay, as well as retirement and savings plans in
the normal course. The Company believes that protecting employees
is integral to its future success.
It has received approval to use cash collateral and to continue
its current cash management system for operations.
The Company previously stated that it fully intends to pay
suppliers for all goods and services delivered on or after the
September 7, 2011 filing date. Supplier claims for goods and
services provided before the filings are typically dealt with as
part of the Chapter 11 plan. The Company values and looks forward
to continuing its relationships with its suppliers.
"Securing Court approval of our First Day Motions was a critical
first step in our Court-supervised restructuring process," said
George F. Martin, president and chief executive officer of NewPage
Corporation. "We believe the intended balance sheet restructuring
will enable us to fully realize the benefits of our prior
operational improvements and make continued investments in the
business. Building upon the consistency and exceptional service
for which NewPage has been known, we will continue to create
quality paper that is in high demand from our customers."
NewPage Group Inc. and certain of its U.S. subsidiaries filed
voluntary petitions under Chapter 11 of the United States
Bankruptcy Code on September 7, 2011. Separately, the company's
Canadian subsidiary, NewPage Port Hawkesbury Corp., commenced
proceedings before the Supreme Court of Nova Scotia under the
Companies' Creditors Arrangement Act of Canada ("CCAA").
About NewPage Corporation
Headquartered in Miamisburg, Ohio, NewPage Corporation is the
leading producer of printing and specialty papers in North
America, based on production capacity, with $3.6 billion in net
sales for the year ended December 31, 2010. The company's product
portfolio is the broadest in North America and includes coated
freesheet, coated groundwood, supercalendered, newsprint and
specialty papers. These papers are used for corporate collateral,
commercial printing, magazines, catalogs, books, coupons, inserts,
newspapers, packaging applications and direct mail advertising.
NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan,
Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a
total annual production capacity of approximately 4.1 million tons
of paper, including approximately 2.9 million tons of coated
paper, approximately 1.0 million tons of uncoated paper and
approximately 200,000 tons of specialty paper.
NewPage Corporation, along with affiliates, filed Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on
Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq.,
and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York,
serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel.
Lazard Freres & Co. LLC is the investment banker, and FTI
Consulting Inc. is the financial advisor. Kurtzman Carson
Consultants LLC is the claims and notice agent. In its balance
sheet, the Debtors disclosed $3.4 billion in assets and $4.2
billion in total liabilities as of June 30, 2011
NNN CHATSWORTH: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: NNN Chatsworth Business Park 37, LLC
21605 Plummer Street
Chatsworth, CA 91311
Bankruptcy Case No.: 11-20545
Chapter 11 Petition Date: September 2, 2011
Court: U.S. Bankruptcy Court
Central District of California (San Fernando Valley)
Judge: Victoria S. Kaufman
Debtor's Counsel: Stuart J. Wald, Esq.
LAW OFFICES OF STUART J. WALD
36154 Coffee Tree Place
Murrieta, CA 92562
Tel: (310) 429-3354
E-mail: stuart.wald@gmail.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $10,000,001 to $50,000,000
The list of unsecured creditors filed together with its petition
does not contain any entry.
The petition was signed by Dr. W. Reed Jaussi, managing member.
PHOENIX CENTER: Council Okays Land Transfer
-------------------------------------------
Ed Pruneau at Missourian reports that Washington City Council
members have signed off on the transfer of property in the Phoenix
Center II commercial development which was placed in receivership
earlier this year.
The action was taken at a special council meeting, Sept. 1. It is
part of an effort by Joe Vernaci, the developer, to refinance the
struggling retail development, according to the report.
The report notes that Mark Piontek, city counselor, said under the
refinancing plan one of the lender's, Cantor Commercial Real
Estate Lending L.P. (CCRE) requires that buildings in the
development owned by Vernaci be transferred to a "bankruptcy-
remote" special purpose entity known as PC Vertical II LLC.
PC Vertical II LLC will be controlled by the developer who intends
to transfer lots 1, 2, 6C and 15A, to the entity which will then
grant a deed of trust against those lots to CCRE, according to a
letter from the city to Vernaci, the report relates.
The report discloses that under terms of the development agreement
for Phoenix Center II, both the city and county must consent to
any transfer of property in the shopping center.
The Franklin County Commission approved an order last week
consenting to the transfer, the report says.
Back in January, the 142-acre development was placed in
receivership after lenders alleged that the Phoenix Center II
Development Co., LLC had defaulted on its loans, the report
recalls.
PJ FINANCE: Lender Gets Court to Grant Short Exclusivity
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that PJ Finance Co. is receiving an extension in dribs and
drabs of the exclusive right to propose a Chapter 11 plan. In
July, the so-called exclusivity was extended to the end of August,
with a proviso that failure to file a plan acceptable to the
secured lender would be a default under the agreement allowing the
use of cash representing the lenders' collateral. PJ, the
official creditors' committee, and Torchlight Loan Services LLC,
the special servicer for $475 million in mortgage-backed
securities, reached agreement this week precluding anyone other
than the company from filing a Chapter 11 plan before Sept. 21.
The September date is also the deadline for coming up with a plan
acceptable to Torchlight. Absent a plan, the right to use cash
ends. Torchlight had been arguing for dismissal of the
bankruptcy, contending the Chapter 11 filing wasn't made in good
faith.
About PJ Finance
Chicago, Illinois-based PJ Finance Company, LLC, owns apartment
communities in the states of Arizona, Florida, Georgia, Tennessee
and Texas. PJ Finance owns or holds ownership interests in 32
apartment communities that collectively have more than 9,500
rentable units. It has 20 apartment locations in Texas, and the
remaining 12 in Arizona, Florida, Georgia and Tennessee. The day-
to-day operations of the portfolio are managed by a third party,
WestCorp Management Group One, Inc.
PJ Finance and various affiliates filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 11-10688). Michelle E.
Marino, Esq., and Stuart M. Brown, Esq., at DLA Piper LLP (US), in
Wilmington, Delaware, serve as bankruptcy counsel. Kurtzman
Carson Consultants, LLC, is the Debtors' claims and notice agent.
An official committee of unsecured creditors has been named in the
case. Christopher A. Jarvinen, Esq., and Mark T. Power, Esq., at
Hahn & Hessen LLP, represent the committee as lead counsel.
Richard Scott Cobb, Esq., and William E. Chipman, Jr., Esq., at
Landis Rath & Cobb, in Wilmington, Del., serve as the committee's
local counsel.
The Debtors estimated total assets of at least $275 million
(estimated value of portfolio securing loan to Bank of America)
and total debts of at least $479 million ($475 million owed to
BofA, $4.4 million trade debt).
PJ Finance said it has a commitment for Gaia Real Estate
Investments LLC to invest $42 million and serve as the foundation
for a reorganization plan.
PLATINUM PROPERTIES: Can Deliver Amended Forbearance Deal to BofA
-----------------------------------------------------------------
The Hon. Basil H. Lorch III of the U.S. Bankruptcy Court for the
Southern District of Indiana authorized Platinum Properties, LLC,
and PPV, LLC, to execute and deliver to Bank of America the
First Amendment to Second Forbearance Agreement.
Bank of America, is successor by merger to LaSalle Bank National
Association, PPV, and the guarantors.
As reported in the Troubled Company Reporter on Aug. 11, 2011,
the amendment will reduce the minimum lot sale price and the
release price for the additional lots.
It is also a modification of the terms and conditions pursuant to
which BofA consents to the Debtors' use of cash collateral. The
cash collateral would fund the purchases contemplated in the
assumption motion.
The Debtors noted that, absent the amendment, the Debtors'
reorganization efforts will be impaired by the loss of otherwise
available revenue and reduction of the BofA obligations that would
occur upon the sale of the additional lots.
About Platinum Properties and PPV LLC
Indianapolis, Indiana-based Platinum Properties, LLC, is a
residential real estate developer. Platinum acquires land, designs
the projects, obtains zoning and other approvals, and constructs
roads, drainage, utilities, and other infrastructure of
residential subdivisions. Platinum then sells the finished,
platted lots. Platinum also has an ownership interest in several
special purpose entities that in turn own, operate and manage
individual projects.
PPV LLC is a joint venture between Platinum and a non-debtor
entity, Pittman Partners, Inc., each of whom hold an equity
interest in PPV. PPV owned four projects directly and owns 100%
of the membership interest of Sweet Charity Estates, LLC.
Platinum Properties and PPV LLC filed for Chapter 11 protection
(Bankr. S.D. Ind. Case Nos. 11-05140 and 11-05141) on April 25,
2011. Lawyers at Baker & Daniels serve as the Debtors' bankruptcy
counsel. Platinum Properties disclosed $14,624,722 in assets and
$181,990,960 in liabilities as of the Chapter 11 filing.
The U.S Trustee has not yet appointed a creditors committee in the
Debtor's case. The U.S. Trustee reserves the right to appoint
such a committee should interest developed among the creditors.
POINT BLANK: Wants Liquidation of LifeStone Materials Approved
--------------------------------------------------------------
Point Blank Solutions, Inc., et al., ask the U.S. Bankruptcy Court
for the District of Delaware to approve the term sheet and the
contemplated out-of-court liquidation of LifeStone Materials, LLC.
On Aug. 1, 2011, PBSS, LLC, and FMS Technologies, LLC, entered
into the term sheet for the sale of LifeStone Materials.
LifeStone Materials is a non-debtor joint venture in which PBSS
has a 50% membership interest.
The term sheet provides for the liquidation of LifeStone's assets
as:
1. The assets of LifeStone being sold or liquidated are
inventory, plant property, equipment, furniture, and
computer equipment.
2. A liquidator will be chosen by and acceptable to both FMS
and PBSS to run an auction of all the assets of the
business. The costs of the sale and liquidation of the
assets, including the costs of the liquidator, will be paid
from proceeds received by LifeStone from the sale of the
assets.
3. In order to facilitate the sale of the Assets, to the extent
that there are any liens on the assets, they will be
released by the lien holders before sale.
4. The net proceeds from the liquidation of the assets and from
the liquidation of any other assets of LifeStone, including
without limitation, any recovery on the Proof of Claim, will
be distributed, first to payment of all debts, liabilities,
and obligations of LifeStone (including the payment of
expenses of liquidation of LifeStone and the establishment
of a reasonable reserve in an amount estimated by the board
of managers to be sufficient to pay any amounts reasonably
anticipated to be required to be paid by LifeStone), and
second, equally to FMS and PBSS in accordance with the terms
of the LLC Agreement (which contemplates the prior repayment
of the Member Loans, among other debts, liabilities and
obligations of LifeStone).
5. After liquidation of all assets, liquidation of any other
assets of LifeStone, including the Proof of Claim,
resolution of all remaining debts, liabilities, obligations,
taxes, professional fees and costs owed by LifeStone, and
distribution of all liquidation proceeds, LifeStone will be
dissolved in accordance with the LLC Agreement.
About Point Blank
Headquartered in Pompano Beach, Florida, Point Blank Solutions,
Inc. -- http://www.pointblanksolutionsinc.com/-- designs and
produces body armor systems for the U.S. Military, Government and
law enforcement agencies, as well as select international markets.
The Company maintains facilities in Pompano Beach, Florida, and
Jacksboro, Tennessee.
The Company's former chief executive officer and chief operating
officer were convicted in September 2010 of orchestrating a
$185 million fraud.
Point Blank Solutions, formerly DHB Industries, filed for
Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on
April 14, 2010. Laura Davis Jones, Esq., Alan J. Kornfeld, Esq.,
David M. Bertenthal, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to
the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves
as corporate counsel. T. Scott Avila of CRG Partners Group LLC is
the restructuring officer. Epiq Bankruptcy Solutions serves as
claims and notice agent.
On April 26, 2010, the U.S. Trustee has appointed an Official
Committee of Unsecured Creditors and on July 27, 2010, the U.S.
Trustee appointed a separate Official Committee of Equity Security
Holders in the case. Ian Connor Bifferato, Esq., and Thomas F.
Driscoll III, Esq., at Bifferato LLC; and Carmen H. Lonstein,
Esq., Andrew P.R. McDermott, Esq., and Lawrence P. Vonckx, Esq.,
at Baker & McKenzie LLP, serve as counsel for the Official
Committee of Equity Security Holders. Robert M. Hirsh, Esq., and
George P. Angelich, Esq., at Arent Fox LLP, serve as counsel to
the Creditors Committee, and Frederick B. Rosner, Esq., and Brian
L. Arban, Esq., at the Rosner Law Group LLC, serve as co-counsel.
POINT BLANK: Sept. 15 Hearing on Barrier-Led Sale Protocol
----------------------------------------------------------
Point Blank Solutions Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to approve their
proposed bidding procedures for the sale of substantially all of
their assets related to operation of their bullet, fragmentation
and stab resistant apparel manufacturing business.
A hearing is set for Sept. 15, 2011, at 2:00 p.m., to consider the
Debtors' request.
The Debtors tell the Court that they retained CRG Partners Group
LLC prepetition as their financial advisor and investment banker
to advise the Debtors on restructuring and business matters,
including the potential marketing and sale of their assets.
On Aug. 26, 2011, the Debtors entered into an asset purchase
agreement with Barrier Acquisition LLC, the stalking-horse bidder.
Barrier Acquisition is expected to receive a break-up fee of
$750,000 in the event the Debtors consummate the sale to another
party.
The Debtors propose a sale hearing on Oct. 19, 2011.
The Debtors tell the Court that the assets to be sold are Point
Blank Solutions Inc., Point Blank Body Armor Inc., and Protective
Apparel Corporation of America.
Interested buyers for the Debtors' assets are required to submit a
good-faith deposit of $1.5 million two businesss day before the
auction.
About Point Blank
Headquartered in Pompano Beach, Florida, Point Blank Solutions,
Inc. -- http://www.pointblanksolutionsinc.com/-- designs and
produces body armor systems for the U.S. Military, Government and
law enforcement agencies, as well as select international markets.
The Company maintains facilities in Pompano Beach, Florida, and
Jacksboro, Tennessee.
The Company's former chief executive officer and chief operating
officer were convicted in September 2010 of orchestrating a
$185 million fraud.
Point Blank Solutions, formerly DHB Industries, filed for
Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on
April 14, 2010. Laura Davis Jones, Esq., Alan J. Kornfeld, Esq.,
David M. Bertenthal, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to
the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves
as corporate counsel. T. Scott Avila of CRG Partners Group LLC is
the restructuring officer. Epiq Bankruptcy Solutions serves as
claims and notice agent.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Equity Security
Holders in the case. Ian Connor Bifferato, Esq., and Thomas F.
Driscoll III, Esq., at Bifferato LLC; and Carmen H. Lonstein,
Esq., Andrew P.R. McDermott, Esq., and Lawrence P. Vonckx, Esq.,
at Baker & McKenzie LLP, serve as counsel for the Official
Committee of Equity Security Holders. Robert M. Hirsh, Esq., and
George P. Angelich, Esq., at Arent Fox LLP, serve as counsel to
the Creditors Committee, and Frederick B. Rosner, Esq., and Brian
L. Arban, Esq., at the Rosner Law Group LLC, serve as co-counsel.
PRECISION OPTICS: Maturity of $600,000 Note Extended to Sept. 30
----------------------------------------------------------------
Precision Optics Corporation, Inc., entered into a Purchase
Agreement, as amended on Dec. 11, 2008, with certain accredited
investors pursuant to which the Company sold an aggregate of
$600,000 of 10% Senior Secured Convertible Notes. The Investors
amended the Notes on several dates to extend the "Stated Maturity
Date" of the Notes. On Aug. 31, 2011, the Investors further
amended the Notes to extend the "Stated Maturity Date" to
Sept. 30, 2011. The Company believes the Investors will continue
to work with us to reach a positive outcome on the Note repayment.
About Precision Optics
Headquartered in Gardner, Massachusetts, Precision Optics
Corporation, Inc., has been a developer and manufacturer of
advanced optical instruments since 1982. The Company designs and
produces high-quality micro-optics, medical instruments and other
advanced optical systems. The Company's medical instrumentation
line includes laparoscopes, arthroscopes and endocouplers and a
world-class product line of 3-D endoscopes for use in minimally
invasive surgical procedures.
The Company's balance sheet as of March 31, 2011, showed
$1.33 million in total assets, $2.27 million in total liabilities,
and a stockholders' deficit of $940,471.
As reported in the TCR on Sept. 27, 2010, Stowe & Degon LLC, in
Westborough, Mass., expressed substantial doubt about Precision
Optics' ability to continue as a going concern, following the
Company's results for the fiscal year ended June 30, 2010. The
independent auditors noted that the Company has suffered recurring
net losses and negative cash flows from operations.
PRESTON/WADE, L.P.: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Preston/Wade, L.P.
8413 Fisher Road
Frisco, TX 75034
Bankruptcy Case No.: 11-42758
Chapter 11 Petition Date: September 2, 2011
Court: U.S. Bankruptcy Court
Eastern District of Texas (Sherman)
Debtor's Counsel: Jason Michael Katz, Esq.
CURTIS CASTILLO PC
901 Main Street, Suite 6515
Dallas, TX 75202
Tel: (214) 752-2222
Fax: (214) 752-0709
E-mail: jkatz@curtislaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
Debtor-affiliate filing separate Chapter 11 petition:
Entity Case No. Petition Date
------ -------- -------------
Preston/Wade-Office, L.P. 11-42757 09/02/11
Assets: $1,000,001 to $10,000,000
Debts: $1,000,001 to $10,000,000
A list of Preston/Wade, L.P.'s 10 largest unsecured creditors
filed together with the petition is available for free at:
http://bankrupt.com/misc/txeb11-42758.pdf
A list of Preston/Wade-Office, L.P.'s 10 largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/txeb11-42757.pdf
The petitions were signed by Jim Lee, manager of general partner.
PRIDE EMS: Case Summary & 7 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Pride EMS, LLC
3802 Dividend
Garland, TX 75042
Bankruptcy Case No.: 11-35764
Chapter 11 Petition Date: September 6, 2011
Court: U.S. Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
E-mail: eric@ealpc.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's seven largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/txnb11-35764.pdf
The petition was signed by Robert Sarlay, president.
QUANTUM FUEL: H&W Replaces E&Y as New Independent Accountants
-------------------------------------------------------------
Quantum Fuel Systems Technologies WOrldwide, Inc., dismissed Ernst
& Young LLP as its independent registered public accounting firm.
On Sept. 2, 2011, the Company engaged Haskell & White LLP as its
new independent registered public accounting firm effective
immediately. The Audit Committee of the Company's Board of
Directors participated in and approved the decision to change
independent registered accounting firms in furtherance of the
Company's initiatives to reduce expenses.
Other than an explanatory statement included in Ernst & Young
LLP's audit report for the Company's fiscal year ended April 30,
2011, relating to the uncertainty of the Company's ability to
continue as a going concern, the audit report of Ernst & Young LLP
on the Company's financial statements for the last two fiscal
years ended April 30, 2011, and April 30, 2010 did not contain an
adverse opinion or a disclaimer opinion, nor was it qualified or
modified as to uncertainty, audit scope or accounting principles.
During the Company's 2011 and 2010 fiscal years and through the
date of this Current Report on Form 8-K, there were no
disagreements with Ernst & Young LLP on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved
to Ernst & Young LLP's satisfaction, would have caused them to
make reference to the subject matter of the disagreements in
connection with their report, and there were no reportable events
as that term is described in Item 304(a)(1)(v) of Regulation S-K.
During the Company's 2011 and 2010 fiscal years and through the
date of this Current Report on Form 8-K, the Company did not
consult with Haskell & White LLP regarding any matters or
reportable events as that term is described in Items 304(a)(2)(i)
and (ii) of Regulation S-K.
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.
QUINCY MEDICAL: Ombudsman Seeks to Retain Counsel and Advisor
-------------------------------------------------------------
Suzanne Koenig, the patient care ombudsman appointed in the
Chapter 11 cases of Quincy Medical Center, Inc., QMC ED
Physicians, Inc., and Quincy Physician Corporation, seeks to
retain (i) Madoff & Khoury LLP as her counsel, and (ii) SAK
Management Services, LLC as her medical operations advisor, nunc
pro tunc to Aug. 10, 2011.
About Quincy Medical Center
Quincy Medical Center is a 196-bed, nonprofit hospital in Quincy,
Massachusetts.
Quincy Medical Center, Inc. together with two affiliates, sought
Chapter 11 protection (Bankr. D. Mass. Lead Case No. 11-16394) on
July 1, 2011.
John T. Morrier, Esq., at Casner & Edwards, LLP, in Boston, serves
as counsel to the Debtors. Navigant Capital Advisor LLC and
Navigant Consulting Inc. serve as financial advisors. Epiq
Bankruptcy Solutions LLC is the claims, noticing, and balloting
agent.
Quincy disclosed assets of $73 million and liabilities of
$79.4 million. Debt includes $56.4 million owing on secured bonds
issued through a state health-care finance agency. There is
another $2.5 million secured obligation owing to Boston Medical
Center Corp. Accrued liabilities are $18.2 million.
On July 12, 2011, the U.S. Trustee for the District of
Massachusetts appointed the Official Committee of Unsecured
Creditors.
R&G FINANCIAL: May Solicit Ch. 11 Plan Acceptances Until Oct. 31
----------------------------------------------------------------
The Hon. Enrique S. Lamoutte Inclan of the U.S. Bankruptcy Court
for the District of Puerto Rico has continued until Sept. 26,
2011, at 10:00 a.m., the hearing to consider adequacy of the
Disclosure Statement explaining R&G Financial Corp.'s Chapter 11
Plan.
The Disclosure Statement hearing was scheduled for Aug. 16.
On May 31, 2011, the Debtor filed its Debtor's Chapter 11 Plan of
Liquidation and its corresponding Disclosure Statement.
In an attempt to consensually resolve all potential comments and
objections to the Disclosure Statement, the Debtor reached an
agreement with several interested parties to extend their deadline
to submit objections to the Disclosure Statement beyond the
Aug. 2, deadline set by the Court.
The Debtor relates that despite its best effort to resolve the
issues, it now appears that the Debtor will not be able to resolve
all potential Plan and Disclosure Statement comments.
The Debtor notes that the continuation of the Disclosure Statement
hearing will be necessary and appropriate because the Debtor
needed to make additional modifications to the Plan and Disclosure
Statement in order to ensure that these documents address the
comments and concerns that it has received from interested parties
and comply with the requirements necessary to solicit acceptances
of its Plan.
As reported in the Troubled Company Reporter on June 16, 2011,
pursuant to the Plan, liquidating RGFC will continue in operation
in order to monetize the remaining assets, continue litigation
with the FDIC and potentially pursue litigation against other
parties, and make distributions under the Plan. The Plan
Administrator will be appointed on the Effective Date of the Plan
and will be responsible for implementing the Plan, subject to the
oversight of the Plan Committee.
The Plan designates 7 classes of claims and interests:
Class Claim Status Voting Rights
----- -------------------- ---------- ---------------------
1 RGFC Secured Claims Unimpaired No (deemed to accept)
2 Non-FDIC Priority Unimpaired No (deemed to accept)
Claims
3 FDIC Priority Claims Impaired Yes
4 RGFC General Unsecured Impaired Yes
Claims
5 Subordinated Notes Impaired Yes
Claims
6 RGFC Preferred Stock Impaired No (deemed to reject)
Interests
7 RGFC Common Stock Impaired No (deemed to reject)
Interests
Absent a successful resolution of the FDIC Priority Claims, no
distributions will be made to holders of Allowed Claims in
any RGFC Classes, other than Class 1 and Class 2.
Each holder of an Allowed Class 3 Claim will receive all Net Free
Cash as it is available until such Allowed Claim is paid in full.
The FDIC filed a Proof of Claim in the Chapter 11 case in an
unliquidated amount, but in excess of $3.4 million, based on an
alleged capital maintenance commitment made to a Federal
depository institutions regulatory agency, but does not include
documentation or evidence to substantiate the existence of its
alleged capital maintenance claim.. The Debtor believes that
ultimately, an FDIC Priority Claim will not be Allowed in any
amount.
Each Allowed General Unsecured Claim under Class 4, estimated to
range between $10.9 million and $15.4 million, will receive a Pro
Rata distribution of the Residual Net Free Cash. The Projected
Recovery under the Plan is 0.30%-2.3%.
Each Allowed Subordinated Notes Claims under Class 5, estimated at
approx. $385 million, will receive a Pro Rata distribution of the
Residual Net Free Cash. Projected Recovery under the Plan is
0.30%-2.3%.
RGFC Preferred Stock Interests under Class 6, and RGFC Common
Stock Interests under Class 7, are deemed canceled.
A copy of the disclosure statement is available at:
http://bankrupt.com/misc/r&gfinancial.DS.pdf
In a separate order, the Court extended until Oct. 31, the
Debtor's exclusive periods to solicit acceptances for the proposed
Chapter 11 Plan.
Amended Plan
BankruptcyData.com reports that R&G Financial filed with the U.S.
Bankruptcy Court a First Amended Chapter 11 Plan of Liquidation
and related Disclosure Statement.
According to the Disclosure Statement, "On the Effective Date, all
of the Debtor's assets shall be transferred to, and vest in,
Liquidating RGFC. The Plan provides for the appointment of
Clifford Zucker, CPA as the Plan Administrator and Wilmington
Trust Company as the Plan Consultant to oversee the activities of
Liquidating RGFC . . . In accordance with the Plan, on the
Effective Date, the persons then acting as directors, officers,
representatives and/or contract managers of the Debtor shall be
released and discharged from all further authority, duties,
responsibilities and obligations relating to and arising from the
Debtor or the Chapter II Case. Nothing contained in the Plan shall
release the Debtor's officers and directors from claims for
actions taken before the Effective Date, including, but not
limited to, any claims or actions that may be investigated by
Wilmington Trust pursuant to the Derivative Standing Order, other
than as provided in Article IX of the Plan."
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.
RASER TECHNOLOGIES: Court Confirms Plan of Reorganization
---------------------------------------------------------
On Aug. 30, 2011, the U.S. Bankruptcy Court for the District of
Delaware confirmed the Third Amended Plan of Reorganization of
Raser Technologies, Inc., and its affiliated Debtors.
Among other things, the Plan provides that all common stock and
other equity ownership interests in the Company are canceled and
that the holders of those securities do not receive any property
or distribution under the Plan.
A copy of the Third Amended Plan is available at:
http://bankrupt.com/misc/raser.3rdamendedjointplan.pdf
A copy of the Third Amended Disclosure Statement with respect to
the Third Amended Plan is available at:
http://bankrupt.com/misc/raser.3rdamendedDS.pdf
About Raser Technologies
Raser Technologies Inc. (NYSE: RZ) is a renewable energy company
focusing on geothermal power development. The Company has one
operating plant in Utah and another eight early and development
stage projects in Utah, New Mexico, Nevada and Oregon. The
Company invested $120 million in Thermo No. 1, its sole operating
plant, which is near Beaver, Utah, and has a power generation
capacity of 10 megawatts. The City of Anaheim, California, agreed
in 2008 to buy the generated electricity for 20 years.
Provo, Utah-based Raser Technologies, Inc., also known as Wasatch
Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D.
Del. Case No. 11-11315) on April 29, 2011.
Other Debtor affiliates filed for separate Chapter 11 protection
on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350).
Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton
& Williams LLP represent the Debtors in their restructuring
efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia
Ross Friedman Ference LLP serves as the Debtors' corporate
counsel. The Debtors' financial advisor is Canaccord Genuity.
A three-member official committee of unsecured creditors has been
formed in the Chapter 11 case. Foley & Lardner LLP represents the
Committee. The Committee also tapped Womble Carlyle Sandridge &
Rice, PLLC, as co-counsel, BDO Consulting, a division of BDO USA,
LLP, as its financial advisor and accountant; and BDO Capital
Advisors, LLC its investment banker.
The Company reported a net loss of $101.80 million on
$4.25 million of revenue for the fiscal year ended Dec. 31, 2010,
compared with a net loss of $20.90 million on $2.19 million of
revenue during the prior year.
The Company's balance sheet at Dec. 31, 2010, showed
$41.84 million in total assets, $107.78 million in total
liabilities, $5.00 million of Series A-1 cumulative convertible
preferred stock, and a stockholders' deficit of $70.94 million.
ROBB & STUCKY: Gets Court Approval to Commence Case Dismissal
-------------------------------------------------------------
The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the
Middle District of Florida authorized Robb & Stucky Limited LLP to
pursue dismissal of its case.
A further hearing to consider dismissal of the Debtor's case is
set for Oct. 4, 2011 at 2:00 p.m., at the Sam M. Gibbons United
States Courthouse, 801 N. Florida Avenue, Courtroom 9A in Tampa,
Florida. Objections, if any, are due Sept. 28, 2011.
According to the Troubled Company Reporter on Sept. 7, 2011, the
United States Trustee for Region 21 filed a motion on August 30
seeking the conversion of the Chapter 11 bankruptcy case of Robb &
Stucky Limited LLLP to a Chapter 7 case.
The Company has sold substantially all of its assets through a
court-approved going out of business sale process.
In early August, Robb & Stucky asked the bankruptcy court to
approve a settlement between the Company, the Official Committee
of Unsecured Creditors appointed in the case, and certain of the
company's lenders. That motion also sought approval of procedures
for the dismissal of the bankruptcy case and asked the court to
set a deadline (or bar date) for administrative claimants to file
their claims.
The U.S. Trustee's motion argues that Robb & Stucky's bankruptcy
estate is administratively insolvent and that the $480,000 fund to
be provided for administrative claimants under the proposed
settlement will be "insufficient to satisfy all . . .
administrative claims" other than fees of professionals retained
in the bankruptcy cases. Therefore, the Trustee asserts that
"[c]onversion to chapter 7 would also provide the best opportunity
for the fair and equitable distribution of the assets of the
estate" because it would result in "a neutral party being
appointed to redistribute the funds among the administrative
claimants, and ensure that all administrative creditors are
treated equally, as required by the Bankruptcy Code." A chapter 7
conversion would also offer lower costs of administration than the
debtor's proposed wind-down procedures, according to the U.S.
Trustee.
About Robb & Stucky
Sarasota, Florida-based Robb & Stucky Limited LLLP -- dba Robb &
Stucky; Robb & Stucky Interiors; Fine Design Interiors, a division
of Robb & Stucky; Robb & Stucky Patio; R&S Home of Fine
Decorators; and Home of Fine Design by Robb & Stucky --
operated a chain of 24 retail stores offering "high-end home
furnishings" in five states.
Robb & Stucky filed for Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 11-02801) on Feb. 18, 2011. Paul S. Singerman,
Esq., and Jordi Guso, Esq., at Berger Singerman PA, serve as the
Debtor's bankruptcy counsel. FTI Consulting, Inc., is the
Debtor's advisor and Kevin Regan is the Debtor's chief
restructuring officer. Bayshore Partners, LLC, is the Debtor's
investment banker. AlixPartners, LLP, serves as the Debtor's
communications consultants. Epiq Bankruptcy Solutions, LLC,
serves as the Debtor's claims and notice agent. In its schedules,
the Debtor disclosed $77,705,081 in assets and $91,859,125 in
liabilities as of the Chapter 11 filing.
Donald F. Walton, U.S. Trustee for Region 21, appointed the
Official Committee of Unsecured Creditors in the Debtor's case.
The Committee tapped Cooley LLP as its lead counsel; Broad and
Cassel as its local bankruptcy counsel; and BDO USA LLP as its
financial advisor.
ROBB & STUCKY: U.S. Trustee Objects to Approval of BofA Agreement
-----------------------------------------------------------------
Donald F. Walton, the U.S. Trustee for Region 21, objects to the
motion of Robb & Stucky Limited LLLP to approve its settlement and
release agreement with Bank of America and asks the U.S.
Bankruptcy Court for the Middle District of Florida to deny the
Motion to the extent that it binds a subsequently appointed
trustee.
Substantially all of the Debtor's assets were sold free and clear
through an action conducted on Mar. 7, 2011. This resulted in the
Court's approval of a going-out-of-business sale.
On Jun. 22, 2011, the Debtor filed the Motion, seeking approval of
an agreement which released Bank of America from any claim for
surcharge, recoupment, disgorgement, or other challenge; provided
for the acknowledgement by the Debtor of the validity of the
prepetition and postpetition claims of Bank of America; and
provided for a "Cash Reserve" for any future claims or costs, and
draws against a letter of credit. The Court entered an interim
order on Aug. 3, 2011, including a provision that binds any
subsequently appointed trustee. The hearing on the final approval
of the Motion has been rescheduled for Oct. 4, 2011.
Theresa M. Boatner, attorney for the U.S. Trustee, notes that on
Aug. 5, 2011, the Debtor filed a motion seeking, inter alia,
approval of procedures for the dismissal of the case, the
establishment of a bar date for administrative claims, the
approval of a settlement agreement among the Debtor, the Official
Committee of Unsecured Creditors and the Collier Lenders, and a
final hearing schedule to consider dismissal and approval of the
Collier settlement. The Court entered an interim order on Aug.
26. A final hearing on the motion to dismiss the case and to
approve the Collier settlement is set for Oct. 4.
Based upon the motion seeking approval of procedures for the
dismissal of the case as well as other pleadings and documents,
the estate is administratively insolvent, Mr. Boatner says.
Moreover, the Dismissal Procedures Motion appears to propose that
administrative claimants will not be paid pari passu, since
professionals will be paid in full -- in an amount which exceeds
$3,000,000 -- while other administrative creditors will share in a
fund of $480,000, which is insufficient to satisfy all other
administrative claims, Ms. Boatner asserts. For this reason,
among others, the U.S. Trustee filed its motion to convert the
case to Chapter 7, so that a Chapter 7 trustee can effect the
equitable distribution of funds to all administrative creditors,
she relates.
According to Ms. Boatner, as the "posture" of the case has
recently changed, based on the Debtor's Dismissal Procedures
Motion and the U.S. Trustee's Motion to Convert, the Court should
deny the approval of the proposed settlement with Bank of America,
at least to the extent that it binds a subsequently appointed
trustee.
About Robb & Stucky
Sarasota, Florida-based Robb & Stucky Limited LLLP -- dba Robb &
Stucky; Robb & Stucky Interiors; Fine Design Interiors, a division
of Robb & Stucky; Robb & Stucky Patio; R&S Home of Fine
Decorators; and Home of Fine Design by Robb & Stucky --
operated a chain of 24 retail stores offering "high-end home
furnishings" in five states.
Robb & Stucky filed for Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 11-02801) on Feb. 18, 2011. Paul S. Singerman,
Esq., and Jordi Guso, Esq., at Berger Singerman PA, serve as the
Debtor's bankruptcy counsel. FTI Consulting, Inc., is the
Debtor's advisor and Kevin Regan is the Debtor's chief
restructuring officer. Bayshore Partners, LLC, is the Debtor's
investment banker. AlixPartners, LLP, serves as the Debtor's
communications consultants. Epiq Bankruptcy Solutions, LLC,
serves as the Debtor's claims and notice agent. In its schedules,
the Debtor disclosed $77,705,081 in assets and $91,859,125 in
liabilities as of the Chapter 11 filing.
Donald F. Walton, U.S. Trustee for Region 21, appointed the
Official Committee of Unsecured Creditors in the Debtor's case.
The Committee tapped Cooley LLP as its lead counsel; Broad and
Cassel as its local bankruptcy counsel; and BDO USA LLP as its
financial advisor.
ROUND TABLE: Has Until March 2012 to Decide on Leases
-----------------------------------------------------
The Hon. Roger Efremsky of the U.S. Bankruptcy Court for the
Northern District of California extended the time to assume or
reject the office lease dated Oct. 31, 2002, of Round Table Pizza
Inc. until March 7, 2012, or 30 days after the confirmation of a
plan of reorganization.
About Round Table
Based in Concord, California, Round Table Pizza, Inc. --
http://www.roundtablepizza.com/-- is a private, 100% employee-
owned company with corporate offices based in Concord, California.
Round Table is largely owned by an Employee Stock Ownership Plan,
with 3,190 participants. The ESOP is designed and intended to
provide a source of retirement income to Round Table's loyal,
long-term employees.
Round Table filed for Chapter 11 bankruptcy protection (Bankr.
N.D. Calif. Case No. 11-41431) on Feb. 9, 2011. Judge Roger L.
Efremsky presides over the case. Scott H. McNutt, Esq., at McNutt
Law Group serves as the Debtor's bankruptcy counsel. The Debtors
also tapped Frank, Rimerman & Co. as an auditor and accountant.
Round Table disclosed $1,066,524 in assets and $35,625,649 in
liabilities as of the Chapter 11 filing.
The case is jointly administered with affiliates -- The Round
Table Franchise Corporation, Round Table Development Company, and
Round Table Pizza Nevada LLC.
The official committee of unsecured creditors has tapped
Brownstein Hyatt Farber Schreck, LLP as counsel. The Debtor also
tapped First Bankers Trust Services, Inc. as discretionary,
independent, and institutional ESOP Trustee, and Johanson Berenson
LLP as an ESOP counsel.
First Bankers Trust Services, Inc., was appointed as institutional
trustee of the Round Table Restated Employee Stock Ownership Plan
and Trust (ESOP). Johanson Berenson LLP serves as an ESOP
counsel.
RQB RESORT: Marriott Unit Supports Push for Trustee
---------------------------------------------------
Dow Jones' DBR Small Cap reports that the manager of a Courtyard
Marriott in uptown Manhattan is backing a recent push for an
independent official to take the reins in the bankruptcy case of
the hotel's owner.
RQB Resort LP and RQB Development LP own Florida's Sawgrass
Marriott Resort, the site of the U.S. PGA Tour's Tournament
Players Championship.
Ponte Vedra Beach, Florida-based RQB Resort, LP, aka Sawgrass
Marriott Resort & Cabana Club, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Case No. 10-01596) on March 1, 2010.
The Company's affiliate -- RQB Development, LP, aka Sawgrass
Marriott Golf Villas & Spa -- filed a separate Chapter 11
petition. The Company estimated its assets and debts at
$100 million to $500 million in its Chapter 11 petition.
SAAB AUTOMOBILE: Files for Creditor Protection to Raise Funds
-------------------------------------------------------------
Ola Kinnander at Bloomberg News reports that Saab Automobile, the
64-year-old Swedish automaker that halted production in June,
applied for protection from creditors on Wednesday in a bid to
raise money to restart operations.
According to Bloomberg, Saab said in a statement that the filing
was made at the Vaenersborg District Court to shield Saab from a
potential bankruptcy petition by its unions. Pending court
approval, the reorganization process will last at least three
months and can be extended to up to a year, Bloomberg notes.
"We have concluded that a voluntary reorganization process will
provide us with the necessary time, protection and stabilization
of the business," Bloomberg quotes Chief Executive Officer Victor
Muller as saying in the statement.
Saab, as cited by Bloomberg, said that the company plans to
present a restructuring plan to its creditors within three weeks
to lower costs and create a "viable, competitive and independent
organization".
Saab proposed Guy Lofalk as administrator, Bloomberg discloses.
The Swedish lawyer oversaw Saab's reorganization under GM in
2009, Bloomberg notes. Bloomberg says the administrator can
apply for state guarantees to pay workers and Saab expects wages
to be paid shortly after court approval.
According to Bloomberg, Darko Davidovic, counsel at the union,
which represents about 1,500 Saab workers, said that IF Metall,
Saab's biggest union, will hold off on a filing to force the
company into bankruptcy.
"A reorganization would be much quicker than a bankruptcy process
in ensuring that our members get their state salary guarantee,"
Mr. Davidovic, as cited by Bloomberg, said on Wednesday by phone.
"It also gives Saab another chance."
Bloomberg notes that Saab on Wednesday said the company is
"confident" of securing short-term funding for its reorganization
and is currently in negotiations with several parties. The
carmaker said that financing to exit reorganization would be
provided by agreements with Pang Da Automobile Trade Co. and
Zhejiang Youngman Lotus Automobile Co. if they receive approval,
Bloomberg relates.
Ally Financial Inc., Saab's financing partner in the U.S. and
Europe, said it would continue to provide loans to Saab dealers
and consumers during the reorganization process, Bloomberg notes.
According to Bloomberg, NYSE Euronext said in a statement on
Wednesday that trading in Saab owner Swedish Automobile NV's
shares was suspended in Amsterdam at the request of the
regulator.
As reported by the Troubled Company Reporter-Europe on Aug. 29,
2011, Bloomberg News related that Saab delayed paying wages for
the third month in a row. Saab was scheduled to pay factory
workers on Aug. 25 and administrative employees on Aug. 26,
Bloomberg disclosed. The Swedish government's Debt Enforcement
Agency started collection proceedings last month at the request
of component suppliers with unpaid bills, Bloomberg recounted.
Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV.
SAMSHI HOMES: Court Allows Bank Lender to Commence Foreclosure
--------------------------------------------------------------
Bankruptcy Judge Letitia Z. Paul lifted the automatic stay in
Samshi Homes, LLC's bankruptcy case to allow Texas Community Bank
to foreclose on the Debtor's assets. TCB seeks relief from stay,
both to exercise remedies under applicable law as to the Prospect
Townhomes, the Riverside Lot, and the Calumet Lot, and also to
continue its litigation against the Debtor and the Debtor's
guarantors. With the accrual of postpetition interest, the
Debtor's debt to TCB was $2,785,000 as of July 15, 2011. The debt
accrues interest at $33,000 per month.
The Court held that, presuming the aggregate valuations of the
Prospect Townhomes, the Riverside Lot, and the Calumet Lot are
correct, the Debtor had an equity cushion of $375,694.51 on the
petition date. On the date of the hearing on the bank's motion,
again presuming aggregate valuations are correct, the Debtor had
an equity cushion of $17,432.48, excluding the effect of any
postpetition interest allowable on the claims of the taxing
authority and the property tax lender, and excluding the accrual
of additional interest on the TCB debt after July 15, 2011.
If an equity cushion continues to exist to protect TCB's interest
in the property, the Court said that the cushion is rapidly
eroding due to the accrual of postpetition taxes, as well as
interest on the debts owed to TCB and creditors with senior liens
and the Debtor's failure to make any payments. The case has been
pending for over a year. The Debtor has not proposed a confirmable
plan and has no plan presently before the court. The Debtor, when
authorized to use cash collateral, used it for a purpose not
authorized under the cash collateral budget. As to the pending
litigation, there is no evidence that any hardship will result to
the Debtor independent of that otherwise addressed in authorizing
TCB to exercise its applicable rights with respect to the
property. There is a hardship to TCB in not permitting a final
resolution of the issues between Debtor and TCB. There is no
evidence as to who would prevail on the merits as between the
Debtor and TCB. Based on the totality of the circumstances, the
stay should be lifted both to allow the litigation between the
parties to proceed, and to allow TCB to exercise its remedies
under applicable law, the Court said.
A copy of the Court's Sept. 6, 2011 Memorandum Opinion is
available at http://is.gd/zNK2kkfrom Leagle.com.
Samshi Homes, LLC, filed a voluntary Chapter 11 petition (Bankr.
S.D. Tex. Case No. 10-37643) on Sept. 3, 2010. Pre-bankrutpcy,
the Debtor acquired three lots in Houston, Texas. On the first
lot, located at 2540 Prospect St., the Debtor developed seven
townhomes. The Debtor also holds real property platted for
townhomes, located at 2616 Riverside and 2531 Calumet, for further
development.
SBARRO INC: Presses for Chapter 11 Auction Plan
-----------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that Sbarro Inc. on
Tuesday urged a New York bankruptcy judge to brush aside
objections from creditors and move ahead with the pizza chain's
proposed auction that is underpinned by a planned debt-equity swap
with lenders.
The Company's motion said the proposed reorganization plan and
overbid auction process would maximize value and creditor
recoveries. While the lender-sponsored plan cuts Sbarro's debt
from about $405 million to $110 million, the debtor also seeks to
solicit higher bids through an auction, according to Law360.
About Sbarro Inc.
The Sbarro family started its business after moving to Brooklyn,
New York, from Naples, Italy, in 1956. Today Sbarro is a leading,
global Italian quick service restaurant concept with approximately
5,170 employees, 1,045 restaurants throughout 42 countries, and
annual revenues in excess of $300 million.
Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr.
S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million
in debt. The Debtor disclosed $51,537,899 in assets and
$460,975,646 in liabilities as of the Chapter 11 filing.
Sbarro said it has reached an agreement with all of its second-
lien secured lenders and approximately 70% of its senior
noteholders on the terms of a reorganization plan that will
eliminate more than half of the Company's total indebtedness.
Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland &
Ellis, LLP, serve as the Debtors' general bankruptcy counsel.
Rothschild, Inc., is the Debtors' investment banker and financial
advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy
consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors'
special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle
LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy
Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co
is the Debtors' communications advisor.
SBARRO INC: Committee Wants Flexible Bidding Procedures
-------------------------------------------------------
The Official Committee of Unsecured Creditors of Sbarro, Inc., et
al. believes, in general, that the sale process is adequate with
respect to the sale of the business as a whole, and the Committee
is not challenging the Debtors' proposed sale of substantially all
of their assets pursuant to a sale or plan process.
The Creditors' Committee, however, believes that certain aspects
of the proposed bidding procedures hamper the goal of maximizing
value for the Debtors' estates, and should be modified.
The Debtors propose, in essence, that any qualified bid must be
for the purchase of their business or assets as a whole. The
Creditors' Committee notes that the proposed procedures do not
permit bidding on just parts of the Debtors' business or specific
"buckets" of assets. The Creditors' Committee submits that this
restriction on qualified bids will discourage potential bidding
from parties that may be interested in less than all of the
Debtors' assets.
Without flexibility in the Bidding Procedures to allow for bids
for less than the whole of the Debtors' business, the procedures
are "flawed" and must be corrected, the Creditors' Committee says.
There is no harm, but rather, only possible upside, in proceeding
as suggested, the Committee adds.
The Creditors' Committee asks the Court to modify the Bidding
Procedures in order to allow any party to bid on all or some of
the Debtors' assets.
About Sbarro Inc.
The Sbarro family started its business after moving to Brooklyn,
New York, from Naples, Italy, in 1956. Today Sbarro is a leading,
global Italian quick service restaurant concept with approximately
5,170 employees, 1,045 restaurants throughout 42 countries, and
annual revenues in excess of $300 million.
Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr.
S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million
in debt. The Debtor disclosed $51,537,899 in assets and
$460,975,646 in liabilities as of the Chapter 11 filing.
Sbarro said it has reached an agreement with all of its second-
lien secured lenders and approximately 70% of its senior
noteholders on the terms of a reorganization plan that will
eliminate more than half of the Company's total indebtedness.
Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland &
Ellis, LLP, serve as the Debtors' general bankruptcy counsel.
Rothschild, Inc., is the Debtors' investment banker and financial
advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy
consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors'
special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle
LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy
Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co
is the Debtors' communications advisor.
SEAHAWK DRILLING: Confirmation Hearing Rescheduled to Sept. 19
--------------------------------------------------------------
Judge Richard S. Schmidt has approved the agreement between
Seahawk Drilling, Inc., the Official Committee of Equity Security
Holders, the Official Committee of Unsecured Creditors, Hercules
Offshore, Inc. and SD Drilling, LLC, Pride International, Inc.,
Blake International USA Rigs, LLC and Blake Platform Rigs,
S. de R.L. de C.V., Gregory Powell, Arena Offshore, Inc. and the
U.S. Trustee regarding the hearing of the First Amended Joint Plan
of Reorganization of the Debtors.
The plan confirmation hearing, which was previously set for
Aug. 30, 2011, is reset to Sept. 19, 2011, at 2:30 p.m. Central
Time. The Debtors will file their responses to objections to the
Plan on or before Sept. 12, 2011, at 5:00 p.m. Central Time.
As reported in the TCR on July 12, 2011, Seahawk Drilling, Inc.,
et al., filed on July 6, 2011, their First Amended Joint Plan of
Reorganization of the Debtors and Debtors-In-Possession Under
Chapter 11 of the Bankruptcy Code and proposed Disclosure
Statement with the Bankruptcy Court.
General Unsecured Claims in Class 4, with estimated allowed claims
of between $16 million and $18 million, will receive either (i) a
Distribution of Hercules Common Stock equal to the due and unpaid
portion of such Allowed Claim, plus (A) pre-petition interest, (B)
post-petition interest at the contractual rate of interest and, if
a contractual default rate is provided in the contract, at the
contractual default rate of interest, or, at the Plan Rate, and
(C) reasonable attorney's fees and costs.
On the Effective Date all existing Interests will, without any
further action, be canceled, annulled and extinguished and any
certificated or electronic shares representing such Interests will
become null, void and of no force or effect, and all such shares
will immediately be delisted from all exchanges and other trading
facilities.
A copy of the First Amended Joint Plan of Reorganization is
available at http://is.gd/GagBCu
A copy of the Disclosure Statement is available at
http://is.gd/xPwBh8
About Seahawk Drilling
Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup
rig business in the United States, Gulf of Mexico, and offshore
Mexico. It offers rigs and drilling crews on a day rate
contractual basis.
The Company and several affiliates filed for Chapter 11 bankruptcy
protection (Bankr. S.D. Tex. Lead Case No. 11-20089) on Feb. 11,
2011. Berry D. Spears, Esq., and Jonathan C. Bolton, Esq., at
Fullbright & Jaworkski L.L.P., in Houston, serve as the Debtors'
bankruptcy counsel. Shelby A. Jordan, Esq., and Nathaniel Peter
Holzer, Esq. at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in
Corpus Christi, Texas, serve as the Debtors' co-counsel. Alvarez
and Marsal North America, LLC, is the Debtors' restructuring
advisor. Simmons & Company International is the Debtors'
transaction advisor. Kurtzman Carson Consultants LLC is the
Debtors' claims agent. Judy A. Robbins, U.S. Trustee for
Region 7, appointed three creditors to serve on an Official
Committee of Unsecured Creditors of Seahawk Drilling Inc. and its
debtor-affiliates. Heller, Draper, Hayden, Patrick & Horn,
L.L.C., represents the creditors committee.
In its amended schedules, Seahawk Drilling disclosed $208,190,199
in assets and $438,458,460 in liabilities as of the petition date.
Seahawk filed for Chapter 11 protection to complete the sale of
all assets to Hercules Offshore, Inc. As reported by the Troubled
Company Reporter on April 11, 2011, the Bankruptcy Court approved
an Asset Purchase Agreement between Hercules Offshore and its
wholly owned subsidiary, SD Drilling LLC, and Seahawk Drilling,
pursuant to which Seahawk agreed to sell to Hercules, and Hercules
agreed to acquire from Seahawk, all 20 of Sellers' jackup rigs and
related assets, accounts receivable and cash and certain
liabilities of Sellers in a transaction pursuant to Section 363 of
the U.S. Bankruptcy Code. The deal was valued at about
$176 million when it received court approval.
Based on previous TCR reports, the purchase price for the
acquisition will be funded by the issuance of roughly 22.3 million
shares of Hercules Offshore common stock and cash consideration of
$25 million, which will be used primarily to pay off Seahawk's
Debtor-in-Possession loan. The number of shares of Hercules
Offshore common stock to be issued will be proportionally reduced
at closing, based on a fixed price of $3.36 per share, if the
outstanding amount of the DIP loan exceeds $25 million, with the
total cash consideration not to exceed $45 million.
The deal closed on April 27, 2011.
SOLYNDRA INC: Rep. Stark Urges Benefits for 1,100 Fired Employees
-----------------------------------------------------------------
Wes Bowers at Milpitas Post reports Rep. Pete Stark, D-Fremont,
last Friday called for Solyndra's chief executive officer to
provide compensation and benefits to all 1,100 employees his firm
laid off Aug. 31, 2011.
According to the report, Mr. Stark alleged the firm's actions may
violate provisions of the Worker Adjustment and Retraining
Notification Act.
"The decision by Solyndra's executives to terminate more than
1,000 of its hardworking employees without warning and to
immediately cut off further payment and benefits was reckless,
irresponsible and heartless," the report quotes Mr. Stark as
saying. "It may also be illegal. I urge Solyndra's leaders to
quickly revisit their decision and do right by their employees."
Mr. Stark sent CEO Brian Harrison a letter urging him to provide
such benefits as soon as possible.
However, in the letter, Stark said whether the act applies to
Solyndra may be a matter for courts to decide. He added the firm
has to prove its inability to meet the conditions of the WARN Act,
notes the report.
About Solyndra LLC
Founded in 2005, Solyndra is a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had approximately 968 full
time employees and 211 temporary employees. Solyndra has sold
more than 500,000 of its panels since 2008 and generated
cumulative sales of over $250 million.
Solyndra LLC and an affiliate sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6,
2011.
Bruce Grohsgal, Esq., at Pachulski, Stang, Ziehl, Young, Jones,
serve as Debtor's counsel. The Company estimated its assets and
debts at $500 million to $1 billion as of the Petition Date.
SOLYNDRA LLC: Judge Approves $2.5MM DIP Loans to Fund Sale
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Solyndra LLC walked away from the first hearing in
bankruptcy court Sept. 7 with interim authority to borrow $2.5
million from a promised $4 million loan. Solyndra's lawyer told
the bankruptcy judge that two groups are interested in buying the
business, which was financed in part with a
$535 million loan from the U.S. Energy Department. A government
lawyer told the judge that the loan agreement prohibits buying the
equipment and removing it from the U.S. The final hearing on
financing is scheduled for Sept. 27.
About Solyndra LLC
Fremont, California-based Solyndra LLC and an affiliate sought
Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No.
11-12799) on Sept. 6, 2011.
Solyndra LLC is at least the third solar company to seek court
protection from creditors since August.
Solyndra LLC owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date. The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.
Founded in 2005, Solyndra is a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had approximately 968 full
time employees and 211 temporary employees. Solyndra has sold
more than 500,000 of its panels since 2008 and generated
cumulative sales of over $250 million.
In the Chapter 11 cases, the Debtors are pursuing a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors are unable to identify any such
potential buyers, an orderly liquidation of the Debtors' assets
for the benefit of their creditors.
The Company has tapped Pachulski Stang Ziehl & Jones LLP as legal
adviser.
SOLYNDRA INC: Faces Lawsuit From Laid Off Employee
--------------------------------------------------
KGO-TV/DT reports that an employee recently laid off by Solyndra
has filed a lawsuit against the company. Solyndra laid off all
1,100 of its employees and announced it was filing for Chapter 11
bankruptcy on Aug. 31, 2011.
According to the report, the new lawsuit claims Solyndra violated
state and federal rules that require companies to give 60 days
notice before laying off more than 50 workers.
The report says Solyndra had previously stated it did not file
notice because it was working to find out a way to save the jobs
right up until the bankruptcy announcement. The suit is seeking
class action status on behalf of every employee laid off by the
company.
About Solyndra LLC
Fremont, California-based Solyndra LLC and an affiliate sought
Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No.
11-12799) on Sept. 6, 2011.
Solyndra LLC is at least the third solar company to seek court
protection from creditors since August.
Solyndra LLC owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date. The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.
Founded in 2005, Solyndra is a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had approximately 968 full
time employees and 211 temporary employees. Solyndra has sold
more than 500,000 of its panels since 2008 and generated
cumulative sales of over $250 million.
In the Chapter 11 cases, the Debtors are pursuing a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors are unable to identify any such
potential buyers, an orderly liquidation of the Debtors' assets
for the benefit of their creditors.
The Company has tapped Pachulski Stang Ziehl & Jones LLP as legal
adviser.
SPRING POINTE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Spring Pointe Development, LLC
2000 West 700 North
Springville, UT 84663
Bankruptcy Case No.: 11-32972
Chapter 11 Petition Date: September 2, 2011
Court: United States Bankruptcy Court
District of Utah (Salt Lake City)
Judge: Joel T. Marker
Debtor's Counsel: Michael R. Johnson, Esq.
RAY QUINNEY & NEBEKER P.C.
36 South State Street, Suite 1400
P.O. Box 45385
Salt Lake City, UT 84145-0385
Tel: (801) 532-1500
Fax: (801) 532-7543
E-mail: mjohnson@rqn.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Milton Christensen, managing member.
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
SPRINGLEAF FINANCE: Fitch Downgrades Long-Term IDR to 'CCC'
-----------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) and
unsecured debt ratings on Springleaf Finance, Inc. (Springleaf)
and affiliates to 'CCC' from 'B-'.
In addition, Fitch has taken the following rating actions:
Springleaf Finance, Inc.
-- Long-term IDR to 'CCC' from 'B-'.
Springleaf Finance Corp.
-- Long-term IDR to 'CCC' from 'B-';
-- Senior debt to 'CCC/RR4' from 'B-/RR4'.
AGFC Capital Trust I
-- Preferred stock to 'C'/RR6' from 'CC/RR6'.
Approximately $10 billion of unsecured debt and preferred stock is
affected by these rating actions. The Rating Watch Negative has
been removed.
The downgrade of Springleaf's IDR was driven by Fitch's continued
concerns regarding the company's lack of meaningful liquidity and
funding flexibility, as $2 billion of unsecured debt matures in
2012. Minimal progress has been made in implementing a long-term
funding plan since the acquisition by Fortress Investment Group
LLC (Fortress) in November 2010; therefore, barring meaningful
access to the securitization market over the next several months,
Springleaf may have insufficient flexibility to address its near-
term debt maturities.
Barring an increase in funding alternatives, Fitch believes that
ownership may seek to engage in a restructuring of the firm's
capital structure, which could lead to a restricted default on the
IDR and all classes of debt, if Fitch believes there is a
reduction in terms.
Additionally, Fitch believes Springleaf's weak operating
performance and relatively high leverage continue to weigh on the
rating. Operating losses continue to mount as funding costs
increase and asset quality metrics stabilize at relatively high
levels. While the company is focused on originating a larger
percentage of higher yielding personal loans to help improve the
margins, Fitch does not expect the volume of originations will be
sufficient to overcome continued margin pressure.
Fitch expects credit costs will also continue to pressure
profitability as delinquency levels remain high, at 6.56% at June
30, 2011. A weak economic environment, high unemployment, and
depressed real estate values are expected to continue to weigh on
the subprime consumer, thus preventing meaningful credit
improvement over the near term at Springleaf
Fitch views Springleaf's leverage, as measured by debt-to-equity
is high relative to the risk characteristics of the balance sheet.
Leverage has increased substantially over the past year as
Springleaf's equity base has been reduced by operating losses.
Leverage was 8.90 times (x) at June 30, 2011, up from 6.35x at
June 30, 2010. Fitch does not expect any improvement over the
near term as the equity base will be hampered by continued
operating losses.
Implementation of a long-term funding plan, which includes
meaningful funding flexibility and enhanced liquidity, a return to
portfolio growth and consistent operating profitability, and
sustained improvement in asset quality performance could lead to
positive rating momentum.
Springleaf was incorporated in Indiana in 1927 as successor to a
business started in 1920. From Aug. 29, 2001 until the completion
of its sale in November 2010, Springleaf was an indirect wholly
owned subsidiary of AIG. The consumer finance products of
Springleaf and its subsidiaries include non-conforming real estate
mortgages, consumer loans, retail sales finance and credit-related
insurance.
SUGARLEAF TIMBER: Court Approves Cantrell Rea as Appraiser
----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Sugarleaf Timber LLC to employ Cantrell Real Estate,
Inc. and Heyward M. Cantrell, MAI, as consulting property
appraiser.
According to the Debtor, it has selected CRE and Mr. Cantrell
because of their extensive collective experience in the appraisal
of real property in Clay County and other areas of Northeast
Florida. The Debtor believes that CRE and Mr. Cantrell are well-
qualified to advise it and its counsel in this Chapter 11 case.
The Debtor says Mr. Heyward's engagement involves an hourly fee of
$295 per hour.
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About Sugarleaf Timber
Sugarleaf Timber, LLC, in Jacksonville, Florida, filed for Chapter
11 bankruptcy (Bankr. M.D. Fla. Case No. 11-03352) on May 8, 2011.
Chief Bankruptcy Judge Paul M. Glenn presides over the case.
Robert D. Wilcox, Esq., at Brennan, Manna & Diamond, PL, serves as
the Debtor's bankruptcy counsel.
In its Schedules, the Debtor disclosed assets of $31,016,486 and
liabilities of $26,781,079. The petition was signed by Victoria
D. Towers, manager of Diversified Investments of Jacksonville LLC,
which serves as manager to the Debtor.
SUGARLEAF TIMBER: Court to Hear Farm Credit's Stay Bid on Nov. 9
----------------------------------------------------------------
Judge Paul M. Glenn of the U.S. Bankruptcy Court for the Middle
District of Florida scheduled a final evidentiary hearing on Farm
Credit of Florida, ACA's motion for relief from the automatic stay
or to dismiss the Chapter 11 case of Sugarleaf Timber, LLC for
November 9, 2011 at 9:00 a.m. in Jacksonville, Florida.
Earlier, the Court abated the hearing on Farm Credit until service
has been made in accordance with Rule 7004 of the Federal Rules of
Bankruptcy Procedure. The bankruptcy judge found that Farm Credit
has failed to serve the motion in the manner provided by Rule 2004
and as required by Rule 9014 of the Federal Rules of Bankruptcy
Procedure.
The automatic stay will continue until further order of the Court.
In its request, Farm Credit seeks relief from the automatic stay
to allow it to proceed to exercise all of its rights and remedies
to enforce its security interest in approximately 7,700 acres of
real property located in Clay County, Florida under state law and
loan documents.
Counsel to Farm Credit, Brian P. Hall, Esq., at Smith, Gambrell &
Russell, LLP, in Atlanta, Georgia -- bhall@sgrlaw.com -- argues
that the Debtor has not filed its bankruptcy case in good faith.
The Debtor owns a beneficial interest in a land trust, and there
is no operational business enterprise employing persons in the
community or with ongoing business operations, he points out.
Indeed, the Debtor was formed for the sole purpose of owning the
Real Property for future development and there is no business
which can be reorganized under Chapter 11, he stresses. The
Debtor's financial situation is essentially a two-party dispute
between itself and Farm Credit, and that dispute is fully capable
of being resolved through state court proceedings, he insists.
In the alternative, Farm Credit seeks dismissal of the Debtor's
Chapter 11 case. If Farm Credit were to obtain relief from
the automatic stay, the Debtor would be left with no business or
assets on which a reorganization or a liquidation could be based,
and the case would be destined for dismissal in any case, Mr. Hall
asserts.
In response, the Debtor asks the Court to strike Farm Credit's
Motion.
Representing the Debtors, Robert D. Wilcox, Esq., at Brennan,
Manna & Diamond, P.L., in Jacksonville, Florida, argues that there
is simply no cause to grant stay relief to Farm Credit. Indeed,
the Debtor's schedules sworn under penalty of perjury, assert that
the value of the Real Property exceeds $31,000,000, which is well
in excess of the alleged debt owed to Farm Credit, he points out.
Contrary to Farm Credit's allegations, the Debtor is and will
be producing income, he asserts. Indeed, the Debtor (a) currently
maintains insurance on the Properties, and (b) Debtor's schedules
in this Chapter 11 case demonstrate an equity cushion, he
maintains.
Mr. Wilcox further argues that the Court should strike Farm
Credit's Motion because it is improper to join a motion for relief
from stay with a motion to dismiss pursuant to the Advisory Notes
to section 362(e) of the Bankruptcy Code.
About Sugarleaf Timber
Sugarleaf Timber, LLC, in Jacksonville, Florida, filed for Chapter
11 bankruptcy (Bankr. M.D. Fla. Case No. 11-03352) on May 8, 2011.
Chief Bankruptcy Judge Paul M. Glenn presides over the case.
Robert D. Wilcox, Esq., at Brennan, Manna & Diamond, PL, serves as
the Debtor's bankruptcy counsel.
In its Schedules, the Debtor disclosed assets of $31,016,486 and
liabilities of $26,781,079. The petition was signed by Victoria
D. Towers, manager of Diversified Investments of Jacksonville LLC,
which serves as manager to the Debtor.
SUMMER VIEW: Has Until Sept. 21 to File Schedules and Statement
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has extended the time for Summer View Sherman Oaks LLC to file its
schedules of assets and liabilities, statement of financial
affairs, list of equity security holders, and all other
deficiencies, to Sept. 21, 2011.
Summer View Sherman Oaks LLC, aka Summer View Sherman Oaks
Apartments LLC, a single-asset real estate company, is the owner
of a 169-unit apartment building locate at 15353 Weddington
Street, in Sherman Oaks, California. The Company filed for
bankruptcy under Chapter 11 (Bankr. C.D. Calif. Case No. 11-19800)
on Aug. 15, 2011. The West Hollywood, California-based Company
estimated assets and liabilities of $10 million to $50 million.
Judge Alan M. Ahart presides over the case. Terry D. Shaylin,
Esq., at Karasik Law Group, LLP, serves as the Debtor's bankruptcy
counsel. The petition was signed by Sonia Sobol, member.
SUN HB: Voluntary Chapter 11 Case Summary
-----------------------------------------
Debtor: Sun HB 63, LLC
140 Linden Avenue, #402
Long Beach, CA 90802
Bankruptcy Case No.: 11-47769
Chapter 11 Petition Date: September 2, 2011
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Sheri Bluebond
Debtor's Counsel: Stuart J. Wald, Esq.
LAW OFFICES OF STUART J. WALD
36154 Coffee Tree Place
Murrieta, CA 92562
Tel: (310) 429-3354
E-mail: stuart.wald@gmail.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
The petition was signed by Ramon Garcia, managing member.
TEN X: Hires Gould & Ratner as Special Real Estate Counsel
----------------------------------------------------------
Ten X Capital Partners III, LLC (Series B) sought and obtained
authority from the U.S. Bankruptcy Court for the Northern District
of Illinois to employ Joseph W. Marzo and Jessica Lingertat of the
firm Gould & Ratner LLP as well as other members of the firm who
may be necessary, as its special real estate counsel, effective on
the petition Date, to negotiate and to document the sale of
certain property of the Debtor.
The Debtor's assets consist of a commercial building located at
601 W. Polk Street, in Chicago, Illinois. The Debtor has engaged
in negotiations with various parties concerning the sale of its
real estate at 601 W. Polk Street and other tangible property
located at the Real Estate -- collectively, the Property.
According to the Debtor, the price for which the Property will be
sold will be sufficient to fully satisfy all claims of its
creditors and to enable the Chapter 11 case to be dismissed.
The Debtor relates that the firm has previously represented Cole
Taylor Bank and Colliers Bennett & Kahnweiler, both of which are
creditors of the Debtor, in unrelated matters. The firm is not
currently representing either of the creditors.
About Ten X Capital Partners
Ten X Capital Partners III, LLC (Series B) operates an industrial
real property located at 601 W. Polk Street, Chicago, Illinois, as
a telecom hotel and storage facility. Ten X Capital Partners III,
LLC (Series B) filed a voluntary Chapter 11 petition (Bankr. N.D.
Ill. Case No. 11-27294) on June 30, 2011. Judge John H. Squires
presides over the case. The Debtor is represented by Chester H.
Foster, Jr., Esq., at Foster & Smith. 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 John W. Branch,
manager of RM Advisors, LLC.
TENET HEALTHCARE: Moody's Affirms B2 CFR; Outlook Positive
----------------------------------------------------------
Moody's Investors Service changed the rating outlook for Tenet
Healthcare Corporation (Tenet) to positive from stable. Moody's
also affirmed the existing ratings of the company, including the
B2 Corporate Family and Probability of Default Ratings.
Following is a list of ratings affirmed and LGD assessments
revised.
9.0% senior secured notes due 2015, to B1 (LGD3, 39%) from B1
(LGD3, 38%)
10.0% senior secured notes due 2018, to B1 (LGD3, 39%) from B1
(LGD3, 38%)
8.875% senior secured notes due 2019, to B1 (LGD3, 39%) from B1
(LGD3, 38%)
6 3/8% senior notes due 2011, Caa1 (LGD5, 86%)
6.5% senior notes due 2012, Caa1 (LGD5, 86%)
7 3/8% senior notes due 2013, Caa1 (LGD5, 86%)
9 7/8% senior notes due 2014, Caa1 (LGD5, 86%)
9 1/4% senior notes due 2015, Caa1 (LGD5, 86%)
8% senior notes due 2020, Caa1 (LGD5, 86%)
6 7/8% senior notes due 2031, Caa1 (LGD5, 86%)
Corporate Family Rating, B2
Probability of Default Rating, B2
Speculative Grade Liquidity Rating, SGL-2
RATINGS RATIONALE
The positive outlook reflects Moody's expectation that EBITDA
growth will continue and result in gradually improving free cash
flow generation and reduced leverage. Furthermore, the company has
made good progress in improving its maturity profile and
alleviated refinancing risk with no material debt due until 2015.
Tenet's B2 Corporate Family Rating remains constrained by Moody's
expectation of modest free cash flow generation and continued high
geographic concentration. Furthermore, industry challenges like
high bad debt expense, weak volume trends and changes in mix as
commercial volumes decline, will likely challenge organic growth.
However, the rating also incorporates Moody's expectation that the
company will continue to see improvements in operating
performance, driven by cost savings initiatives and benefits from
capital investment.
Moody's could upgrade the rating if the company is able to manage
growth of the business such that leverage remains at or below the
current level while earnings growth continues to result in
improving credit metrics.
Moody's could downgrade the rating if a decline in operating
performance results in an expectation that debt to EBITDA will
rise above 5.5 times or if free cash flow, prior to discretionary
reinvestment in the business, is expected to be negative.
Furthermore, a significant debt financed acquisition could result
in a downgrade of the ratings.
For further details, refer to Moody's Credit Opinion for Tenet
Healthcare Corporation on moodys.com.
The principal methodology used in rating Tenet was the Global For-
Profit Hospital Industry Methodology published in Spetember 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.
Tenet, headquartered in Dallas, TX, is one of the largest for-
profit hospital operators by revenues. At June 30, 2011 the
company operated 49 general hospitals and a critical access
hospital in 11 states. Tenet generated revenue from continuing
hospital operations of approximately $9.4 billion for the twelve
months ended June 30, 2011.
TIB FINANCIAL: NAFH Board Adopts Merger with TIB
------------------------------------------------
The board of directors of North American Financial Holdings, Inc.,
the owner of approximately 94.5% of TIB Financial Corp., adopted,
on Sept. 1, 2011, a plan of merger pursuant to which TIB Financial
will merge with and into NAFH, with NAFH as the surviving
corporation. The Plan of Merger was adopted under a provision of
Florida law that permits holders of at least 80% or more of the
stock of a subsidiary to merge with that subsidiary without the
approval of the subsidiary's shareholders.
The Plan of Merger provides that each share of TIB Financial
common stock issued and outstanding immediately prior to the
completion of the Merger, except for shares for which appraisal
rights are properly exercised and except for specified shares of
TIB Financial common stock held by NAFH or TIB Financial, will be
converted into the right to receive 0.7205 of a share of NAFH
Class A common stock, with cash in lieu of any fractional shares.
The warrant to purchase 11,666,667 shares of TIB Financial's
common stock owned by NAFH will be canceled in connection with the
merger. There is currently no public market for NAFH's Class A
common stock. Concurrently with the completion of the Merger,
NAFH expects to complete an initial public offering of its Class A
common stock and apply for listing of its shares on The Nasdaq
Global Select Market.
On or about Sept. 9, 2011, TIB Financial expects to mail to its
shareholders a letter announcing the adoption of the Plan of
Merger by the board of directors of NAFH and attaching the text of
the Plan of Merger as an exhibit thereto.
In connection with the pending Merger of NAFH and TIB Financial,
NAFH plans to file with the SEC a registration statement on Form
S-4 that will include a prospectus of NAFH relating to the NAFH
Class A common stock to be issued in the Merger. NAFH and TIB
Financial also plan to file with the SEC other relevant documents
in connection with the pending Merger.
About TIB Financial Corp.
Headquartered in Naples, Florida, TIB Financial Corp.
-- http://www.tibfinancialcorp.com/-- is a financial services
company with approximately $1.7 billion in total assets and 28
full-service banking offices throughout the Florida Keys,
Homestead, Naples, Bonita Springs, Fort Myers, Cape Coral and
Venice. TIB Financial Corp. is also the parent company of Naples
Capital Advisors, Inc., a registered investment advisor with
approximately $169 million of assets under advisement. TIB
Financial Corp., through its wholly owned subsidiaries, TIB Bank
and Naples Capital Advisors, Inc., serves the personal and
commercial banking and investment management needs of local
residents and businesses in its market areas.
As reported in the Troubled Company Reporter on April 6, 2010,
Crowe Horwath LLP, in Fort Lauderdale, Fla., expressed substantial
doubt about the Company's ability to continue as a going concern,
following its 2009 results. The independent auditors noted that
the Company incurred net losses in 2009, 2008 and 2007, primarily
from loan and investment impairments. In addition, the Company's
bank subsidiary is operating under an informal agreement with bank
regulatory agencies that requires, among other provisions, higher
regulatory capital requirements. The Bank did not meet the higher
capital requirement as of Dec. 31, 2009, and therefore is not
in compliance with the regulatory agreement. Failure to comply
with the regulatory agreement may result in additional regulatory
enforcement actions. The 2010 Annual Report did not contain a
going concern doubt.
The Company's balance sheet at June 30, 2011, showed $210.10
million in total assets, $30.06 million in total liabilities and
180.03 million in total shareholders' equity.
THORNBURG MORTGAGE: Countrywide, BofA Get More Time to Respond
--------------------------------------------------------------
In the lawsuit, JOEL I. SHER, CHAPTER 11 TRUSTEE for TMST, Inc.
f/k/a Thornburg Mortgage, Inc., and ZUNI INVESTORS, LLC, v.
COUNTRYWIDE HOME LOANS, INC. and BANK OF AMERICA CORPORATION, Adv.
Proc. No. 11-00337 (Bankr. D. Md.), Bankruptcy Judge Duncan W.
Keir signed off on a stipulation extending the defendants' time to
respond to the amended complaint and modifying briefing schedule.
Countrywide and Bank of America have until Sept. 9 to respond to
the Amended Complaint. The Chapter 11 Trustee and Zuni have until
Sept. 30 to oppose. The Defendants may also file a new motion to
transfer venue of the adversary proceeding and motion to withdraw
the reference. A copy of the Sept. 7 Stipulation is available at
http://is.gd/uUy64Dfrom Leagle.com.
Attorneys for Zuni Investors are David J. Grais, Esq., Mark B.
Holton, Esq., and Leanne M. Wilson, Esq. --
dgrais@graisellsworth.com mholton@graisellsworth.com and
lwilson@graisellsworth.com -- at Grais & Ellsworth LLP, in New
York.
Attorneys for Bank of America Corporation are Jonathan Rosenberg,
Esq., and William J. Sushon -- jrosenberg@omm.com and
wsushon@omm.com -- O'Melveny & Myers LLP in New York.
Attorneys for Countrywide Home Loans, Inc., are Lawrence D.
Coppel, Esq. -- lcoppel@gfrlaw.com -- at Gordon, Feinblatt,
Rothman, Hoffberger & Hollander LLC in Baltimore, Maryland; Joseph
F. Yenouskas, Esq. -- jyenouskas@goodwinprocter.com -- at Goodwin
Procter LLP, in Washington DC; and Brian E. Pastuszenski, Esq.,
John J. Falvey, Jr., Esq., and Matthew G. Lindenbaum, Esq. --
bpastuszenski@goodwinprocter.com jfalvey@goodwinproctor.com and
mlindenbaum@goodwinproctor.com -- at Goodwin Procter in Boston,
Massachusetts.
As reported by the Troubled Company Reporter on May 3, 2011, the
TMST Trustee sued Wall Street banks for $2.2 billion, alleging
they engaged in series of "collusive" and "predatory" schemes that
eventually drove Thornburg into bankruptcy. The defendants
include:
* J.P. Morgan Chase & Co.,
* Citigroup Inc.,
* Goldman Sachs Group Inc.,
* Bank of America,
* Countrywide Home Loans,
* subsidiaries of Barclays PLC,
* Credit Suisse Group,
* Royal Bank of Scotland Group PLC, and
* UBS AG
In the suit against BofA and Countrywide, the Trustee contends
Countrywide misrepresented the nature of hundreds of home loans
securitized and sold to Thornburg in 2006; and that Bank of
America, now Countrywide's parent, has "engaged in an elaborate
corporate shell game" intended to shed Countrywide's liabilities.
The Trustee is asking the bankruptcy judge overseeing the
Thornburg case to force the bank to repurchase the loans.
About Thornburg Mortgage
Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA)
-- http://www.thornburgmortgage.com/-- was a single-family
residential mortgage lender focused principally on prime and
super-prime borrowers seeking jumbo and super-jumbo adjustable
rate mortgages. It originated, acquired, and retained investments
in adjustable and variable rate mortgage assets. Its ARM assets
comprised of purchased ARM assets and ARM loans, including
traditional ARM assets and hybrid ARM assets.
Thornburg Mortgage and its four affiliates filed for Chapter 11
bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009.
Thornburg changed its name to TMST, Inc.
Judge Duncan W. Keir is handling the case. David E. Rice, Esq.,
at Venable LLP, in Baltimore, Maryland, served as counsel to
Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as
special counsel. Jim Murray, and David Hilty, at Houlihan Lokey
Howard & Zukin Capital, Inc., served as investment banker and
financial advisor. Protiviti Inc. served as financial advisory
services. KPMG LLP served as the tax consultant. Epiq Systems,
Inc., serves claims and noticing agent. Thornburg disclosed total
assets of $24.4 billion and total debts of $24.7 billion, as of
Jan. 31, 2009.
On Oct. 28, 2009, the Court approved the appointment of Joel I.
Sher as the Chapter 11 Trustee for the Company, TMST Acquisition
Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging
Strategies, Inc. He is represented by Shapiro Sher Guinot &
Sandler.
UNIVERSAL HEALTH: Fitch Affirms Issuer Default Rating at 'BB-'
--------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Universal Health
Services, Inc. (UHS) as follows:
-- Issuer Default Rating at 'BB-';
-- Senior secured bank facility at 'BB';
-- Senior secured notes at 'BB';
-- Senior unsecured notes at 'B+'.
The Rating Outlook is Stable. The ratings apply to approximately
$3.78 billion of debt at June 30, 2011.
The ratings reflect the following key credit factors:
-- UHS' has a history of strong acute care operations and
leading market positions in regions with favorable
demographics.
-- Debt levels remain high subsequent to the acquisition of
Psychiatric Solutions, Inc. (PSYS); but it has afforded the
company increased scale in and exposure to the more
profitable and stable behavioral health industry.
-- Fitch expects relatively robust cash flows for UHS over the
ratings horizon. This could contribute to reduced leverage
if cash is directed to repaying debt.
-- Strong pricing trends and a low cost inflation environment
have offset the impact of weak acute care volume trends.
However, Fitch does not believe these positive factors will
show as prominently in the intermediate term.
-- There is a good deal of uncertainty surrounding healthcare
reform and budget debates at both the federal and state
level. Fitch believes further cuts to government
reimbursement are likely in the near-to-intermediate term,
although it is unlikely that these cuts will be excessive.
Maintenance of a 'BB-' IDR will require unadjusted debt-to-EBITDA
generally maintained between 3.0 times (x) and 3.8x. Fitch
acknowledges that UHS currently has a moderate degree of
flexibility at its current ratings. A positive rating action
could result from aggressive repayment of debt leading to leverage
of around 3.0x over the next 6 - 12 months. Robust cash flows and
evidence of success in integrating legacy PSYS operations would be
expected to achieve a positive rating action.
UHS has historically maintained strong acute care operations with
volume and pricing metrics often toward the upper end of the
industry for the past several years. W eak volume growth across
the industry has persisted for the last 10 or more quarters, with
aggregate same-store (SS) admission growth of less than 0.5% in
each quarter since 6/30/2009. UHS was able to maintain positive
SS admissions growth until 3Q'10, mostly driven by favorable
demographics in its most concentrated markets.
For the most recent quarter, UHS' acute care business saw an
uncharacteristically steep year-over-year SS volume decline of
2.5% -- slightly below that of the Fitch-rated group average of -
2.0%. Looking ahead, volumes will likely remain weak due to
elevated unemployment and the postponement of elective procedures.
Prior to the PSYS acquisition, UHS was the only Fitch-rated FPH
with investment grade ratings. Leverage at 9/30/10 was about 1.4x.
However, subsequent to the PSYS acquisition, total debt balances
increased by more than four times and pro forma leverage increased
to about 3.6x. Fitch sees limited opportunities in the current
landscape for similarly leveraging transactions. Nevertheless,
the PSYS deal illustrated management's willingness to stress its
credit profile for an M&A opportunity.
Fitch does believe that UHS' purchase of PSYS was strategically
sound and bodes well for longer-term growth prospects. Behavioral
health revenues of $1.39 billion and $1.31 billion accounted for
30% and 25% of UHS' total revenues in 2010 and 2009, respectively.
(Approximately 1.5 months of PSYS business was included in 2010
figures.) Fitch forecasts that behavioral health revenues will
account for approximately 45% of total unadjusted net revenues, or
$3.4 billion, in 2011. The behavioral health business is more
profitable and generally more stable than acute care, and this
business shift should continue to favorably impact UHS' overall
margins and cash flows in the future.
Despite weak macroeconomic conditions and poor volume metrics, UHS
has experienced good growth in cash flows over the past few years.
LTM FCF for UHS as of 6/30/11 was $366 million. This figure
represents an increase of nearly 300% since the year ended
12/31/08. Contributing to this FCF growth is a paring back of
capex ($380 million in 2009 compared to $250 million in the most
recent LTM period) and good levels of operational cash flow.
Fitch expects UHS to produce FCF of around $400 million annually
over the next three years. To the extent management prioritizes
debt repayment as a use of cash, leverage could trend toward 3.0x
by the end of 2011.
High unemployment has caused uninsured admissions to rise in the
mid-single digit range since 2009. Industry participants are
beginning to report payor mix stabilization, as uninsured volume
growth has seemingly plateaued for now. Nevertheless commercial
volumes largely do not appear to have improved as of yet. Fitch
expects unemployment and overall macroeconomic indicators to
remain weak for much of the ratings horizon, which will likely
hold down overall volume growth while continuing to cause the
number of uninsured and Medicaid-covered admissions to remain
elevated.
Maintenance of profitability through the trough of the economic
recession was driven by good cost control and aided by low
inflation in labor and supply costs. Fitch believes it is
unlikely that operators will be able to continue to control costs
to the same degree they have, especially if unemployment and other
macroeconomic indicators remain weak for an extended period of
time.
While strength in pricing has recently further supported the
industry's profitability, pricing pressure will probably increase
in the near-term. Fitch believes that decreased reimbursement
from government payors is highly likely over the ratings horizon.
A variety of factors are driving this dynamic including the
implementation of healthcare reform as well as state and federal
fiscal pressures. UHS is forecasting Medicaid reimbursement cuts
of 3 - 4% in 2H'11.
As of June 30, 2011, UHS had adequate liquidity consisting of
approximately $35 million in cash and equivalents and $590 million
of availability under its $800 million revolver due 2015. The
company's $240 million accounts receivable facility due 2013 was
fully drawn. Fitch estimates UHS' debt maturities as follows:
$224 million for the remainder of 2011; $48 million in 2012; $315
million in 2013; $79 million in 2014, $1.06 billion in 2015, and
$2.05 billion thereafter. Current liquidity and forecasted FCF
should be more than sufficient to cover debt maturities. Fitch
expects that UHS will use proceeds from its revolver to refinance
its $200 million secured notes issuance when it comes due in
November 2011.
WHITTEN ENTERPRISES: Case Summary & 15 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Whitten Enterprises, Inc.
dba Allyn Medical Services
6010 Milwee
Houston, TX 77092
Bankruptcy Case No.: 11-35765
Chapter 11 Petition Date: September 6, 2011
Court: U.S. Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Barbara J. Houser
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
E-mail: eric@ealpc.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 15 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/txnb11-35765.pdf
The petition was signed by Robert Sarlay, vice president.
* David C. Wolinsky Joins Otterbourg
------------------------------------
David C. Wolinsky has joined Otterbourg, Steindler, Houston &
Rosen, P.C., as Of Counsel. Wolinsky was formerly in-house
counsel at the Bank of Tokyo-Mitsubishi and HSH Nordbank AG. He
has also been in-house counsel at two multi-billion dollar hedge
fund managers, including acting as the first General Counsel and
Chief Compliance Officer for one fund.
During his career, Wolinsky has represented banks and other
financial institutions in a wide variety of domestic and cross-
border corporate finance transactions, bank loans, commercial
mortgage loans and customized financial products. In his position
as General Counsel for a hedge fund manager, Wolinsky advised on
sophisticated secondary market trading operations, including work
on high-yield offerings, distressed debt transactions and
leveraged loans. In addition, Wolinsky has created, implemented
and operated compliance programs for investment advisers, and
documented prime brokerage, swap and other capital market
transactions.
Wolinsky received his B.A. from the University of Chicago, and his
J.D. from Temple University School of Law, where he was a member
of the Temple Law Quarterly. Wolinsky began his legal career in
the New York office of O'Melveny & Myers LLP, where he obtained
extensive experience in real estate law.
"The firm is fortunate to have David join us," said Daniel Wallen,
chairman of Otterbourg. "The expertise that David brings to the
firm reflects our ongoing commitment to the representation of our
clients across the spectrum of financial products and services
they offer."
About Otterbourg
For over 100 years, Otterbourg has offered sophisticated legal
services and practical solutions to its clients and is known for
its integrity, stability and business knowledge. The firm
specializes in the representation of financial institutions and
creditors, including commercial banks, investment banks, asset-
based lenders, hedge funds and insurance companies as well as
corporations and other business entities, including private equity
firms, in all aspects of their businesses, including the
structuring and documentation of loan transactions, acquisitions,
litigation and alternative dispute resolution, real estate
transactions, workouts, restructurings and bankruptcy proceedings.
The firm has experience in leveraged finance, asset based lending
and second lien loans, whether within the United States or cross-
border, as well as the representation of committees of unsecured
creditors in large and complex bankruptcy reorganization cases
throughout the United States. Otterbourg is well known for its
representation of individual institutional lenders, bank groups,
commercial enterprises and other secured and unsecured creditors
in complex, high profile litigation and its role as co-general
counsel for the Commercial Finance Association.
* Moody's Trims Outlook for North American Parts Suppliers
----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Moody's Investors Service
lowered its outlook for North American auto parts suppliers,
citing expectations of softer global demand growth for light
vehicles through 2012, as well as concerns about rising costs.
* BOOK REVIEW: The Outlaw Bank
------------------------------
Authors: Jonathan Beaty and S. C. Gwynne
Beard Books, Washington, D.C. 2004 (reprint of book published by
Random House in 1993). 399 pages. $34.95 trade paper,
ISBN 1-58798-146-7.
Toward the end of their labyrinthine study of an international
financial scam running over 20 years, the authors are prophetic:
"Since none of the rules [allowing for the BCCI scam] have
changed, there is nothing to prevent other BCCIs from springing up
in the artfully created regulatory gaps. And no one in authority
wants the rules to change." The BCCI scam which was disclosed in
the early 1990s prefigured the scams in the field of finance and
investing that have come to light in 2008 and are continuing to be
reported and investigated. The $20 million involved in the BCCI
scandal made it the biggest financial scandal in history up to the
1990s. The investigative reporters Beaty and Gwynne see that BCCI
and the worldwide network of individuals at all levels of private
business and government became exposed because of their excesses.
If they had been less greedy and a little more discreet, the BCCI
operation could likely have continued indefinitely. But this is
how such scandals usually come to an end--the greed becomes
uncontrollable, those involved become reckless. Beaty and Gwynne
track how BCCI originated, how it grew phenomenally, and how it
came apart at the seams.
BCCI stands for Bank of Credit and Commerce. The Pakistani Agha
Hasan Abedi founded the bank in 1972. Promoting it as the Third
World's first multinational bank, he was soon getting involvement
from sponsors and investors throughout the Middle East and in the
United States. Bert Lance, Jimmy Carter's short-lived budget
director, and Clark Clifford, at the time legendary Washington
D.C. "fixer", were early sponsors profiting from BCCI's growth and
connections.
The book grew from the authors reporting on the unfolding BCCI
scandal for Time magazine. This account has more dimensions than
even a long-running investigative journalism report given much
space in a news periodical could hope to deal with. With
unparalleled maneuverability to expose the story from their
association with the major news magazine Time and consummate
investigative journalism skills, Beaty and Gwynne accomplish the
best account possible of the mind-boggling scandal. But as their
prophecy near the end implies, there is no neat conclusion nor
sense of finality to the story. Some of the perpetrators and some
of the enablers such as Clifford have faced prosecution and have
plea bargained or been found guilty. But rather than been brought
to accountability, nearly all those involved have been instead
dispersed to become involved in other enterprises whose bases and
aims are bound to be suspect. Several of the key players who
provided much of the inside information to the dogged authors are
given pseudonyms so as not to put them at risk for reprisals by
any of the dozens of persons involved in BCCI who are going about
their lives as if nothing had happened.
The book is not a reworking or even simple expansion of the
authors' investigative journalism for Time magazine. Even those
familiar with the BCCI story will find the book engaging. With
the colorful characters continually popping up, the high financial
states, international scope, and touches of danger, it reads like
a gripping espionage novel.
Both authors were leaders in investigative reporting in their
careers at Time magazine. Now retired, Jonathan Beaty is writing
a book on the CIA and Middle East arms dealing. S. C. "Sam" Gwynne
was an international banker at one time, and is now executive
editor of Texas Monthly Magazine.
*********
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
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***