/raid1/www/Hosts/bankrupt/TCR_Public/110920.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, September 20, 2011, Vol. 15, No. 261
Headlines
106 NORTH: Case Summary & 11 Largest Unsecured Creditors
207 REDWOOD: Has Until Oct. 22 to File Reorganization Plan
785 PARTNERS: Files Schedules of Assets & Liabilities
ACCENTIA BIOPHARMA: Revimmune Granted Orphan Drug Status
ADAMIS PHARMACEUTICALS: Committee Approves Stock Option Awards
ADKINS SUPPLY: Case Summary & 20 Largest Unsecured Creditors
AE ESCROW: S&P Assigns 'B' Rating to Senior Notes Due 2020
AFFILIATES & PARTNERS: Case Summary & 4 Largest Unsec Creditors
AFN CORPORATION: Case Summary & 16 Largest Unsecured Creditors
AFFORDABLE MOVING: Case Summary & 20 Largest Unsecured Creditors
ALABAMA INJURY: Chiropractor Files for Chapter 13 Bankruptcy
ALTER COMMUNICATIONS: Confirmation Hearing on Rival Plans Today
AMBAC FINANCIAL: Court Amends $27-MM Securities Settlement Order
AMBAC FINANCIAL: To Revise Plan Outline Ahead of Oct. 5 Hearing
AMBAC FINANCIAL: Proposes to Hire Brattle as Consultant
AMTRUST FINANCIAL: Wins Approval of Disclosure Statement
ANNA NICOLE SMITH: High Court Ruling Taken Up at ABI Conference
ANTS SOFTWARE: To Pay Bonuses After Sale or Merger
ANTS SOFTWARE: Signs Licensed Works Agreement with IBM
APOLLO CASUALTY: A.M. Affirms 'B+' Financial Strength Rating
ARETE INDUSTRIES: Posts $840,300 Net Loss in Second Quarter
AVIS BUDGET: Moody's Affirms 'B1' Rating; Outlook Stable
BANNING LEWIS: Del. Judge Approves Sale to Ultra Resources
BARNES BAY: Class 8 Creditors Group Opposes Plan Confirmation
BBB ACQUISITION: Court Denies Plan Exclusivity Extension
BBB ACQUISITION: Court Won't Convert Case to Ch. 7 Just Yet
BEAR STEARNS: Execs. Cioffi & Tannin to Face Trial in February
BEAR STEARNS: Discovery Ongoing in Securities Suit
BEAR STEARNS: Wells Fargo Sues EMC for Refusal of Repurchase
BERNARD L. MADOFF: Dist. Judge to Rule on Right to Sue Customers
BERNARD L. MADOFF: Investor Wins Bid to Remove $3BB Clawback Suit
BLACK CROW: Could Emerge From Chapter 11 in a Few Months
BORDERS GROUP: To Sell Intellectual Property Assets for $15.75MM
BORDERS GROUP: Remaining Stores to Close This Month
BOYD GAMING: Moody's Affirms 'B2' Corporate Family Rating
BUFFALO GULF: S&P Assigns Prelim. 'BB+' Rating to $275-Mil. Debt
CAPITAL INVESTMENTS: Judge Won't Enjoin Suit vs. S. Williams
CARPENTER CONTRACTORS: Crowe Horwath OK'd to Audit Financials
CARPENTER CONTRACTORS: Ehrenstein Okayed as Substitution Counsel
CENTER COURT: Court Assigns Mediator for Montecito Bank Dispute
CHRYSLER LLC: UAW Extends Contracts as Bargaining Continues
CLAUDIO OSORIO: Proposes to Launch New Company Under Plan
CORONA 3411: Case Summary & 10 Largest Unsecured Creditors
CRYSTAL CATHEDRAL: Judge to Consider Viability of Sale
CULTURE MEDIUM: Posts $174,000 Net Loss in June 30 Quarter
CYBRDI INC: Posts $137,900 Net Loss in Second Quarter
DALLAS STARS: Likely Bidding War May Push Price Tag
DELPHI CORP: DPH Holdings Wants Plan Injunction on Averbukhs
DELPHI CORP: DPH Wants Injunction Against Metaldyne Estate
DELPHI CORP: District Court Rules on DSRA Lawsuit
DYNEGY INC: Begins Offers to Exchange up to $1.25-Bil. Sr. Notes
EL PASO PIPELINE: Moody's Assigns 'Ba1' Rating to New Notes
ENER1 INC: Maturity Date of Bzinfin LOC Extended to July 2013
ENRON CORP: Trust Settles Lawsuit Against Kenneth Lay Estate
EVEREST CROSSING: Rudolph Friedmann's Fees Sliced
EVERGREEN ENERGY: To Restate March 31 & June 30 Quarter Reports
EVERGREEN SOLAR: Can Use Noteholders Cash Collateral Until Nov. 15
EVERGREEN SOLAR: Time to File Schedules Extended to Sept. 30
EXIDE TECHNOLOGIES: Files 2nd Quarter Summary Report
FAIRFIELD SENTRY: Sues Societe Generale for $35.3 Million
FANNIE MAE: BofA, JPMorgan Fail to Make Grade
FERRO CORPORATION: Moody's Raises Ratings to Ba3; Outlook Stable
FIRST CALL: Case Summary & 20 Largest Unsecured Creditors
FONTAINEBLEAU: Ch. 7 Trustee Proposes Ver Ploeg as Counsel
FONTAINEBLEAU: Ch. 7 Trustee Proposes More Work for Genovese
FONTAINEBLEAU: M&M Lienholders Oppose Fees to Advisors
FONTAINEBLEAU: RJF Answers $1.88MM Preferential Suit
FORBES ENERGY: S&P Raises CFR to 'B-'; Outlook Positive
FORD MOTOR: DBRS Upgrades Issuer Rating to 'BB'
FRY'S REDONDO: Voluntary Chapter 11 Case Summary
GENTA INC: Has 595.5 Million Outstanding Common Shares
GLC LIMITED: Frost Brown Has New Cincinnati Office
GO DADDY: S&P Assigns Preliminary 'B' Corporate Credit Rating
GREAT ATLANTIC: May Close 2 Superfresh Stores in Gold Coast
GREAT ATLANTIC: Wants PwC's Audit Services for 2012 Approved
GREAT ATLANTIC: Settlement Agreement with OfficeMax Approved
GREAT ATLANTIC: Brower Piven Files Class Suit for Stock Purchasers
GREEKTOWN HOLDINGS: Bankr. Court Wants Trial on Moelis' Fees
GREYSTONE LOGISTICS: Incurs $847,000 Net Loss in Fiscal 2011
HARRY PAVILACK: Trustee Wants Chapter 7 Liquidation
HEARUSA INC: Terminates Employment of Interim CEO and CFO
HORIZON LINES: Closes on $25 Million Bridge Loan from Noteholders
HOWREY LLP: Citibank Wants Chapter 7 Trustee to Take Over
H.S. RENTAL: Case Summary & 19 Largest Unsecured Creditors
HUDSON HEALTHCARE: Scarinci Quits Due to Alleged Fraud by City
JEFFERSON, AL: Approves Deal Over $3.2 Billion Bond Debt
JMR DEVELOPMENT: Case Summary & 18 Largest Unsecured Creditors
JOHN HENRY: Moody's Revises Outlook to Positive; Affirms B2 CFR
KIEBLER RECREATION: Court OKs Key Agreement on Asses Sale
KIEBLER RECREATION: Ch. 11 Trustee Selling Most Assets
KIEBLER RECREATION: Ch. 11 Trustee Selling Fairways Condominiums
KIEBLER RECREATION: Judge Morgenstern-Clarren Now Handles Case
KT SPEARS: Court Continued Hearing on Case Dismissal Until Oct. 3
LAS VEGAS MONORAIL: Revises Plan to Add Protection to Investors
LAW ENFORCEMENT: Mark White Resigns Officer Positions
LEHMAN BROTHERS: Still Stuck in Court After 3 Years
LEHMAN BROTHERS: Judge Peck Refuses Summary Judgement vs. Barclays
LEHMAN BROTHERS: Removes Guarantees of Securities-Lending Claims
LEHMAN BROTHERS: Has Agreement in Principle With Lehman Europe
LEHMAN BROTHERS: Canary Wharf Claims Reduced to $780 Million
LEHMAN BROTHERS: Wins Nod to Sell Rosslyn Stake for $385MM
LEHMAN BROTHERS: LBI Trustee Defends $345MM Demand vs. RBS
LOS ANGELES DODGERS: Dumps Fox Deal to Auction Television Rights
LOS ANGELES DODGERS: Atty. Fees Opposed for Fighting Commissioner
MARCO POLO: Gains Approval for Revamped Bankruptcy-Loan Deal
M & H REALTY: Case Summary & Largest Unsecured Creditor
MANDA ANN: Case Summary & 20 Largest Unsecured Creditors
MER SOLEIL: Case Summary & 15 Largest Unsecured Creditors
MERIT GROUP: J.H. Cohn OK'd to Probe and Evaluate Causes of Action
MEMORIAL HEALTH: S&P Affirms 'BB+' Rating on $93.695-Mil. Bonds
MERUELO MADDUX: Owners Seek Bonuses After Ouster in Plan
METALDYNE CORP: Trustee Faces Injunction from Delphi
MILESTONE SCIENTIFIC: Joseph D'Agostino Elected COO
MONEYGRAM INT'L: Fitch Affirms Issuer Default Ratings at 'B+'
MOTORS LIQUIDATION: Supplement to June 30 GUC Trust Reports Filed
NASSAU BROADCASTING: Goldman, Fortress File Involuntary Petition
NAVIGATOR HOLDINGS: Completes $40MM Sale of Loan Portfolio
NEUMEDIA INC: Posts $771,000 Net Loss in June 30 Quarter
NEWPAGE PORT: Canadian Unit Authorized to Sell Business
NON-INVASIVE MONITORING: Enters Into $100,000 Promissory Notes
NURSERYMEN'S EXCHANGE: Committee Wants Case Converted to Chapter 7
OMNICARE INC: Moody's Assigns 'Ba3' Rating to Subordinated Notes
OPTIMUMBANK HOLDINGS: Board Elects Two New Directors
ORAGENICS INC: To Resign as Marketing Vice President
PARKER BUILDING: Case Summary & 10 Largest Unsecured Creditors
P&C POULTRY: Converted to Chapter 7 Liquidation
PEARL MANAGEMENT: State Court's Show Cause Order Violates Stay
PINNACLE ENTERTAINMENT Moody's Says 'B2' Unaffected by Expansion
PITT PENN: Has Green Light to Amend Suit Against Tabor Academy
PJ FINANCE: Torchlight Begs Permission to File Plan
RAM ENERGY: Receives Notice of Listing Deficiency From Nasdaq
RENAISSANCE LEARNING: S&P Assigns Prelim. 'B' Corp. Credit Rating
RFH HOLDINGS: Case Summary & 4 Largest Unsecured Creditors
RIVER ROAD: LSAT Urges High Court Review of Credit Bidding Case
RQB RESORT: Goldman Sachs Nears Acquisition of Sawgrass Marriott
SAJ LODGING: Voluntary Chapter 11 Case Summary
SARAI INC: Case Summary & 15 Largest Unsecured Creditors
SARAI SANFORD: Case Summary & 10 Largest Unsecured Creditors
SCANA CORPORATION: Moody's Cuts Subordinated Debt Rating to 'Ba1'
SEAHAWK DRILLING: Committee Seeks Hiring Modification
SEALED AIR: S&P Lowers Corp. Credit Rating to BB; Outlook Stable
SKY LOFTS: CAB Bedford LLC Files Plan; All Creditors Paid in Full
SOLYNDRA LLP: Examiner Sought to Probe Government Guarantee
SOLYNDRA LLC: Hiring Former Governor Weld for Investigations
SOLYNDRA LLC: Taps Imperial Capital as Investment Banker
SOMERSET INTERNATIONAL Posts $245,700 Net Loss in Second Quarter
SPORTSMAN'S WAREHOUSE: Bankr. Court Rules on McGillis Dispute
SULPHCO INC: Files for Chapter 7 Liquidation in Texas
SUPERIOR PLUS: DBRS Cuts Rating on Senior Secured Notes to 'BB'
TEXAS HILL: Sub-lessee Not Entitled to $67T Admin. Expense
TEXTRON INC: Fitch Plans to Rate $500 Mil. Unsec. Notes at 'BB+'
THE X-CHANGE CORPORATION: Posts $64,100 Net Loss in Second Quarter
THUNDERBIRD SEDONA: Case Summary & 10 Largest Unsecured Creditors
THINK3 INC: Judge OKs Settlement With Versata
TITAN ENERGY: Inks Separation Pact with COO Thomas Black
TOOUCHIT TECHNOLOGIES: Posts $605,700 Net Loss in First Half
TRIMEDYNE INC: Posts $429,000 Net Loss in June 30 Quarter
TROPICANA ENT: Delaware Court Approves Trademark Settlement
TROPICANA ENT: LandCo Debtors Proposes Unresolved Claims Reserve
TROPICANA ENT: W. Yung Insists on Dismissal of Lightsway Suit
UNIQUE SEARCH: Case Summary & 13 Largest Unsecured Creditors
US COAL: S&P Withdraws 'B+' Rating on $105-Mil. Sr. Term Loan
US FIDELIS: Mepco Immediately Moves to Dismiss Complaint
VAIL ANGLERS: Case Summary & 20 Largest Unsecured Creditors
VIRGIN OFFSHORE: Involuntary Chapter 11 Case Summary
VYCOR MEDICAL: Posts $1.8 Million Net Loss in Second Quarter
WAGSTAFF MINNESOTA: Has New Motion for Jones & Malhotra as Auditor
WEST NEW YORK: S&P Puts 'BB' GO Debt Rating on Watch Negative
WESTERN INSURANCE: A.M. Best Downgrades FSR to 'E'
WILLIAM LYON: Makes $2.9MM Interest Payment on 7 1/2% Sr. Notes
WOLF KNOW: Voluntary Chapter 11 Case Summary
WORLD HEALTH: Posts $29,400 Net Loss in Second Quarter
WOUND MANAGEMENT: Posts $3.2 Million Net Loss in Second Quarter
ZELPHY'S CHRISTIAN: Case Summary & 3 Largest Unsecured Creditors
* Circuit Court Restates July Opinion on Revesting
* 11th Circuit's Diaz Ruling Expanded to Chapter 11
* House Hearing Held on Bankruptcy Venue Legislation
* Jessica Price Smith Appointed as N.D. Ohio Bankruptcy Judge
* Shon Hastings Appointed as North Dakota Bankruptcy Judge
* UBS Trader Charged in London With Fraud
* Economists Say New U.S. Recession Appears More Likely
* Fitch Says No U.S. High Yield Issuers Defaulted in August
* Moody's: Speculative-Grade Liquidity Good But Has Warning Signs
* S&P's Speculative-Grade Composite Spread Narrows to 725 Bps
* Erika Morabito Rejoins Foley From Patton Boggs
* Large Companies With Insolvent Balance Sheet
*********
106 NORTH: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: 106 North High Street, LLC
dba Lofts At 106 North High
3650 Olentangy River Road # 401
Columbus, OH 43214
Bankruptcy Case No.: 11-59488
Chapter 11 Petition Date: September 15, 2011
Court: U.S. Bankruptcy Court
Southern District of Ohio (Columbus)
Judge: C. Kathryn Preston
Debtor's Counsel: Robert J. Morje, Esq.
P.O. Box 6545
600 South Pearl Street
Columbus, OH 43206
Tel: (614) 224-8000
Fax: (614) 588-8826
E-mail: rmorje.attorney@gmail.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $10,000,001 to $50,000,000
A list of the Company's 11 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/ohsb11-59488.pdf
The petition was signed by H. Brian Haney, manager.
207 REDWOOD: Has Until Oct. 22 to File Reorganization Plan
----------------------------------------------------------
The Hon. Nancy V. Alquist of the U.S. Bankruptcy Court for the
District of Maryland extended 207 Redwood LLC's exclusive periods
to file and solicit acceptances for a Chapter 11 reorganization
until Oct. 22, 2011, and Dec. 30, 2011, respectively.
The Debtor filed its Third Amended Plan on Aug. 23. During the
Aug. 24, hearing, the Court conditionally approved the Debtor's
Disclosure Statement explaining its proposed Plan, subject to
certain revisions.
The Debtor will use the extension to make revisions to the
Third Amended Plan.
About 207 Redwood
Columbia, Maryland-based 207 Redwood LLC was created to own,
rehabilitate and develop a 10-story historic building located at
207 East Redwood Street in downtown Baltimore, Maryland, into a
hotel. The Debtor filed for Chapter 11 protection (Bankr. D. Md.
Case No. 10-27968) on Aug. 6, 2010. James A. Vidmar, Jr., Esq.,
and Lisa Yonka Stevens, Esq., at Logan, Yumkas, Vidmar & Sweeney
LLC, in Annapolis, Md., assist the Debtor in its restructuring
effort. In its amended schedules, the Debtor disclosed
$14.5 million in assets and $24.1 million in liabilities as of the
Petition Date.
785 PARTNERS: Files Schedules of Assets & Liabilities
-----------------------------------------------------
785 Partners LLC filed with the U.S. Bankruptcy Court for the
District of New York, its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $106,000,000
B. Personal Property Unknown
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $95,467,612
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims Unknown
------------ -----------
TOTAL $106,000,000 $95,467,612
About 785 Partners LLC
785 Partners LLC owns a 42-story building on 785 Eighth Avenue,
New York. The developer intended to sell 122 condominium units,
but it failed to obtain the requisite condominium approvals from
the New York State Attorney General.
The Company obtained $84 million of secured financing in January
2007 from PB Capital Corporation, and TD Bank, N.A. First
Manhattan later bought the secured claim and says the claim has
risen to $101 million, which is higher than the market value of
the property.
785 Partners LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case
No. 11-13702) on Aug. 3, 2011. Andrew K. Glenn, Esq., at
Kasowitz, Benson, Torres & Friedman LLP, in New York, serves as
counsel to the Debtor. The Debtor estimated assets and debts of
$100 million to $500 million. The petition was signed by Kevin
O'Sullivan, co-manager.
ACCENTIA BIOPHARMA: Revimmune Granted Orphan Drug Status
--------------------------------------------------------
Accentia Biopharmaceuticals, Inc. and its majority-owned
subsidiary, Biovest International, Inc., jointly announced
Wednesday that the U.S. Food and Drug Administration (FDA) has
granted Orphan Drug Designation to Revimmune(TM), the Company's
proprietary system-of-care based on high-dose administration of
Cytoxan(R) (cyclophosphamide), for the prevention of graft-versus-
host disease (GVHD) following bone marrow transplant. GVHD is a
life-threatening autoimmune complication that can occur after a
stem cell or bone marrow transplant in which the newly
transplanted cells trigger an immune attack on the transplant
recipient's body.
With FDA Orphan Drug Status, Accentia says it gains seven years of
market exclusivity for Revimmune for the prevention of GVHD
following bone marrow transplant upon its approval by the FDA,
thereby offering competitive protection from similar drugs of the
same class. Orphan Drug Status also provides Accentia with
eligibility to receive potential tax credit benefits, potential
grant funding for research and development and significantly
reduces the requisite filing fees for marketing applications.
Dr. Carlos F. Santos, Ph.D., Accentia's Chief Scientific Officer,
commented, "Two Phase I/II clinical trials conducted by physicians
at Johns Hopkins University have provided important data regarding
the safety and efficacy of Revimmune for prevention of GVHD
following partially matched bone marrow transplants. We consider
these outcomes together with data from an additional multi-center
study to be highly encouraging. We are now preparing for meetings
with regulatory agencies, including the FDA, to discuss the next
steps for the regulatory approval of Revimmune for the prevention
of GVHD following bone marrow transplantation, in particular those
from partially-matched donors."
The Company holds an exclusive world-wide license to Revimmune
from Johns Hopkins University and has a strategic agreement with
Baxter Healthcare Corporation covering the commercialization of
Cytoxan, the active ingredient of Revimmune, for the treatment of
a range of autoimmune diseases including multiple sclerosis and
the prevention of graft-versus-host disease following bone marrow
transplant.
About Revimmune(TM)
Accentia holds the worldwide exclusive license to Revimmune for
the treatment of autoimmune diseases, such as multiple sclerosis.
Developed by Dr. Richard Jones, Dr. Robert Brodsky, and colleagues
at Johns Hopkins University School of Medicine, Revimmune uses an
already-approved active pharmaceutical (Cytoxan(R)) in a novel,
patent-pending system-of-care capable of "rebooting" a patient's
immune system. Revimmune therapy is believed to act by completely
eliminating mature lymphocytes throughout the body while
selectively sparing immune stem cells in the bone marrow. Shortly
following a course of Revimmune, a natural "rebooting" process
takes place as bone marrow stem cells repopulate the immune system
with healthy immune cells that no longer possess the traits of
autoimmunity.
A strategic agreement with Baxter Healthcare Corporation provides
Accentia with the exclusive, worldwide right to purchase Baxter's
cyclophosphamide, which is marketed under the brand name Cytoxan,
for the treatment of designated autoimmune diseases including
multiple sclerosis.
About Accentia Biopharmaceuticals
Headquartered in Tampa, Florida, Accentia Biopharmaceuticals, Inc.
(OTC QB: "ABPI") is committed to advancing the autoimmune disease
therapy, Revimmune(TM), as a comprehensive system of care and drug
regimen designed for the treatment of autoimmune diseases.
Revimmune therapy includes an ultra-high-dose regimen of Cytoxanr
(cyclophosphamide), exclusively supplied via a strategic agreement
with Baxter Healthcare Corporation. Clinical trials for Revimmune
are being planned for the treatment of multiple autoimmune
indications.
Accentia holds a majority-ownership stake in Biovest
International, Inc. (OTC QB: "BVTI"), an emerging leader in the
field of active personalized immunotherapies. In collaboration
with the National Cancer Institute, Biovest has developed a
patient-specific, cancer vaccine, BiovaxID(R), with three clinical
trials completed, including a Phase III study for the treatment of
follicular non-Hodgkin's lymphoma.
Additionally, Accentia's wholly-owned subsidiary, Analytica
International, Inc., based in New York City, is a global research
and strategy consulting firm that provides professional services
to the pharmaceutical and biotechnology industries. Since 1997,
Analytica has expertly directed research studies and projects,
including traditional health economic modeling projects, database
studies, structured reviews, heath technology assessments,
reimbursement analyses, and value dossiers.
On Nov. 10, 2008, Accentia BioPharmaceuticals, along with its
subsidiaries filed for Chapter 11 protection (Bankr. M.D. Fla.
Lead Case No. 08-17795). The Company emerged from Chapter 11
protection, and the Plan of Reorganization became effective, on
Nov. 17, 2010.
ADAMIS PHARMACEUTICALS: Committee Approves Stock Option Awards
--------------------------------------------------------------
At a meeting of the Compensation Committee of the Board of
Directors, and the Board of Directors, of Adamis Pharmaceuticals
Corporation held on Sept. 12, 2011, the committee approved the
award of stock options under the Company's 2009 Equity Incentive
Plan to:
(a) Dennis J. Carlo, Ph.D., 600,000;
(b) Karen K. Daniels, 300,000;
(c) Robert O. Hopkins, 125,000;
(d) David J. Marguglio, 125,000; and
(e) Thomas Moll, Ph.D., 300,000.
The exercise price for each such option is $0.19 per share, which
was the fair market value of the common stock on the date of
grant. Each option vests and becomes exercisable as to one-third
of the shares subject to the option as of the grant date, and
vests and becomes exercisable as to the remaining two-thirds of
the option shares monthly over a period of two years from the
grant date. Each option is otherwise subject to the provisions of
the Plan.
In addition, pursuant to the provisions of the Plan, effective
Sept. 13, 2011, each non-employee director of the Company, Kenneth
M. Cohen, Craig A. Johnson, and Tina S. Nova, Ph.D., received a
stock option under the Plan to purchase 35,000 shares of common
stock. The exercise price for each such option is $0.18 per
share, which was the fair market value of the common stock on the
date of grant. Each option vests and becomes exercisable over a
period of three years from the grant date, at a rate of 1/36 of
the option shares each month. Each option is otherwise subject to
the provisions of the Plan.
At the Annual Meeting, five nominees to the Board were elected,
namely: (1) Dennis J. Carlo, Ph.D., (2) Kenneth M. Cohen, (3)
Craig A. Johnson, (4) David J. Marguglio, and (5) Tina S. Nova,
Ph.D. The selection of Mayer Hoffman McCann PC as independent
registered public accounting firm for the year ending March 31,
2012, was also ratified.
About Adamis Pharmaceuticals
San Diego, Calif.-based Adamis Pharmaceuticals Corporation is an
emerging pharmaceutical company engaged in the development and
commercialization of a variety of specialty pharmaceutical
products. Its products are concentrated in major therapeutic
areas including oncology (cancer), immunology and infectious
diseases (viruses) and allergy and respiratory.
The Company's balance sheet at June 30, 2011, showed $687,556 in
total assets, $1.91 million in total liabilities, and a
$1.22 million total stockholders' deficit.
The Company reported a net loss of $6.98 million on $0 revenue for
the fiscal year ended March 31, 2011, compared with a net loss of
$6.71 million on $290,288 of revenue for the fiscal year ended
March 31, 2010.
As reported by the TCR on July 14, 2011, Mayer Hoffman McCann
P.C., in Boca Raton, Fla., expressed substantial doubt about
Adamis Pharmaceuticals' ability to continue as a going concern.
The independent auditors noted that the Company has incurred
recurring losses from operations and has limited working capital
to pursue its business alternatives.
If the Company did not have sufficient funds to continue
operations, it could be required to seek bankruptcy protection or
other alternatives that could result in the Company's stockholders
losing some or all of their investment in the Company. Any
failure to dispel any continuing doubts about the Company's
ability to continue as a going concern could adversely affect the
Company's ability to enter into collaborative relationships with
business partners, make it more difficult to obtain required
financing on favorable terms or at all, negatively affect the
market price of the Company's common stock and could otherwise
have a material adverse effect on the Company's business,
financial condition and results of operations.
ADKINS SUPPLY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Adkins Supply Inc.
P.O. Box 768
Sweetwater, TX 79556
Bankruptcy Case No.: 11-10353
Chapter 11 Petition Date: September 16, 2011
Court: United States Bankruptcy Court
Northern District of Texas (Abilene)
Judge: Robert L. Jones
Debtor's Counsel: Max Ralph Tarbox, Esq.
TARBOX LAW, P.C.
2301 Broadway
Lubbock, TX 79401
Tel: (806) 686-4448
E-mail: kathy@tarboxlaw.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 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txnb11-10353.pdf
The petition was signed by Robert L. Adkins, president.
Debtor-affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
First Call Well Service, Ltd 09/16/11
R.L. Adkins Corp. 11-10241 07/01/11
AE ESCROW: S&P Assigns 'B' Rating to Senior Notes Due 2020
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' issue-level
rating to AE Escrow Corp.'s (to be assumed by Avis Budget Car
Rental LLC and Avis Budget Finance Inc.) senior notes due 2020,
and then placed those ratings on CreditWatch with negative
implications. "The recovery rating on this issue is '5',
indicating our expectation that lenders would receive a modest
(10% to 30%) recovery of principal in the event of a payment
default. AE Escrow is a wholly owned subsidiary of Avis Budget Car
Rental LLC (Avis Budget). Avis Budget is the major operating
subsidiary of Avis Budget Group Inc. Proceeds from the notes
issuance will be held in escrow pending Avis Budget's acquisition
of U.K. car renter Avis Europe PLC, and will be released for the
closing of that transaction. If the acquisition does not occur by
Dec. 13, 2011, the notes will be redeemed in full," S&P stated.
"Avis Budget's ratings remain on CreditWatch, where we placed them
with negative implications on June 14, 2011, after the company
announced its $1.8 billion acquisition of Avis Europe, including
repayment of its debt. Based on our understanding of the recent
debt financings associated with the acquisition, along with cash,
we would likely affirm the corporate credit rating and assign a
stable outlook upon the closing of the proposed acquisition, which
the company expects to close in early October 2011, or possibly
earlier. On Sept. 14, 2011, Avis Budget withdrew its bid to
acquire car renter Dollar Thrifty Automotive Group Inc.," S&P
added.
Rating List
Avis Budget Group Inc.
Avis Budget Car Rental LLC
Corporate credit rating B+/CW Neg/--
New Rating; CreditWatch Action
AE Escrow Corp.
Sr notes due 2020 B/CW Neg
Recovery rating 5
AFFILIATES & PARTNERS: Case Summary & 4 Largest Unsec Creditors
---------------------------------------------------------------
Debtor: Affiliates & Partners of NFH, LLC
fdba North Funeral Home, LLC
405 Sharp Springs Road
Winchester, TN 37398
Bankruptcy Case No.: 11-15115
Chapter 11 Petition Date: September 15, 2011
Court: United States Bankruptcy Court
Eastern District of Tennessee (Winchester)
Judge: Shelley D. Rucker
Debtor's Counsel: Robert S. Peters, Esq.
SWAFFORD, PETERS, PRIEST & HALL
120 North Jefferson Street
Winchester, TN 37398
Tel: (931) 967-3888
Fax: (931) 967-2172
E-mail: rspeters@spphlaw.com
Scheduled Assets: $1,874,000
Scheduled Debts: $1,460,595
A list of the Company's four largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/tneb11-15115.pdf
The petition was signed by Thomas H. North, chief manager.
AFN CORPORATION: Case Summary & 16 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: AFN Corporation
aka Laundry Central
1773 Jesus T Pinero Ave.
Cond. Gallery Plaza Apto 503
De Diego Ave.
San Juan, PR 00911
Bankruptcy Case No.: 11-07858
Chapter 11 Petition Date: September 15, 2011
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtor's Counsel: Jorge Bermudez Torregrosa, Esq.
CUEVAS KUINLAM & BERMUDEZ
Hato Rey Tower Suite 903
Hato Rey, PR 00918
E-mail: bermudez4040_@hotmail.com
Scheduled Assets: $2,534,932
Scheduled Debts: $463,835
A list of the Company's 16 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/prb11-07858.pdf
The petition was signed by Nelson Biaggi Ortiz, president.
AFFORDABLE MOVING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Affordable Moving & Storage, Inc.
1600 S. Abilene Street
Aurora, CO 80012
Bankruptcy Case No.: 11-32008
Chapter 11 Petition Date: September 16, 2011
Court: U.S. Bankruptcy Court
District of Colorado (Denver)
Judge: A. Bruce Campbell
Debtor's Counsel: Stephen C. Nicholls, Esq.
NICHOLLS & ASSOCIATES, P.C.
1850 Race Street
Denver, CO 80206
Tel: (303) 329-9700
E-mail: steve.nicholls@nichollslaw.com
Scheduled Assets: $195,643
Scheduled Debts: $1,288,144
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/cob11-32008.pdf
The petition was signed by David R. Mallon, president.
ALABAMA INJURY: Chiropractor Files for Chapter 13 Bankruptcy
------------------------------------------------------------
The Associated Press reports that James Gordon, the chiropractor
and former Democratic state representative, filed for bankruptcy,
along with his business, the Alabama Injury & Pain Clinic.
According to the report, the move follows what legal records show
to be a mounting trail of financial distress for Gordon and his
once-expansive chiropractic business. Among the troubles is a $1
million verdict that a truck driver won against the business
following a 2006 wreck.
Alabama Injury & Pain Clinic, which has filed for Chapter 11
bankruptcy, is still operating. Mr. Gordon personally filed for
Chapter 13, which usually involves creating a plan to repay
creditors over time.
"We plan to attempt to restructure, so we can be a little bit
leaner and efficient," the report quotes Mr. Gordon as saying. He
attributed his trouble to the bad economy and time he spent away
from the business while in the Legislature. Gordon was elected to
the state House in 2006 and lost in the Democratic primary in
2010.
The report notes the business lists debts to 12 creditors worth
around a total of $2 million. Mr. Gordon declined to discuss
specific debts, saying that he hoped "all the bills of yesteryear
will be addressed in coming weeks." Debts include $1.1 million
owed to Dana Hartley, a Mobile County resident and former truck
driver.
The report says court records show the clinic owes $302,000 to the
IRS for back taxes. Commonwealth National Bank foreclosed on
Gordon's Dauphin Island Parkway office Aug. 23, according to
records, and the clinic's bankruptcy filing lists a debt of
$350,000 to the bank. Three individuals foreclosed on Gordon's
Zeigler Boulevard office in May, citing a debt of nearly $200,000,
records show.
Based in Mobile, Alabama, Alabama Injury and Pain Clinic filed for
Chapter 11 protection (Bankr. S.D. Ala. Case No. 11-03453) on Aug.
26, 2011. Judge William S. Shulman presides over the case.
Vanessa Arnold Shoots, Esq., represents the Debtor. The Debtor
estimated assets between $100,000 and $500,000, and debts between
$1 million and $10 million.
ALTER COMMUNICATIONS: Confirmation Hearing on Rival Plans Today
---------------------------------------------------------------
Gus G. Sentementes at the Baltimore Sun reports that a U.S.
district bankruptcy court judge in Baltimore will convene a
hearing today, Sept. 20, 2011, to consider confirmation of a
Chapter 11 plan for Alter Communications.
According to the repor, Alter filed for Chapter 11 bankruptcy
protection last year after losing a $362,000 judgment to the
printer, H.G. Roebuck & Son Inc. of White Marsh.
Competing plans were filed in the case and ballots were sent to
creditors to select between two plans.
The result of the vote will decide whether Alter Communications,
which has published the weekly newspaper since 1919, will remain
family-owned and operated, or whether the firm will be turned over
to its printer.
Alter's plan would keep the Jewish Times and its other
publications under family direction while a plan to repay
creditors was crafted.
Roebuck proposes taking control of Alter as part of a plan to
repay creditors, according to court documents. Alter had $650,000
in debts when it filed for bankruptcy protection.
The families that run the two companies have been in business
together for decades, Andrew Alter Buerger, Alter's chief
executive officer, said. He said the trouble started a couple of
years ago when he tried to negotiate lower printing rates but
Roebuck wouldn't budge.
Confirmation Set Aside for Competing Plan
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported that a U.S. District Court in Maryland ruled on June 3,
2011, that the decision by the U.S. Supreme Court in a 1999 case
called 203 North LaSalle means that an expert's opinion about
value "simply cannot suffice as it does not expose the stock in
the reorganized debtors to the actual market."
According to Mr. Rochelle, in H.G. Roebuck & Sons Inc. v. Alter
Communications Inc., U.S. District Judge Richard D. Bennett in
Baltimore set aside confirmation of a reorganization plan using
cramdown, ruling that LaSalle requires either competitive bidding
or ending the bankrupt company's exclusive right to propose a
Chapter 11 plan. Because the objecting creditor said it would pay
more for the new stock, Judge Bennett reversed the plan's approval
and sent the case back to the bankruptcy court with instructions
to allow the filing of competing plans.
About Alter Communications
Based in Baltimore, Maryland, Alter Communications publishes the
Baltimore Jewish Times. Other publications include the magazine
Style, with 90,000 circulation, and Chesapeake Life, with a
circulation of 57,000.
Alter Communications filed for Chapter 11 bankruptcy (Bankr. D.
Md. Case No. 10-18241) on April 14, 2010. Alan M. Grochal, Esq.,
and Maria Ellena Chavez-Ruark, Esq., at Tydings and Rosenberg, in
Baltimore, serve as the Debtor's bankruptcy counsel. The Debtor
estimated assets and debts between $1 million and $10 million in
its Chapter 11 petition.
A judgment in favor of the printer precipitated the Chapter 11
filing. The Debt or successfully appealed after the bankruptcy
court approved the reorganization plan in a confirmation order in
December. Insiders retained ownership of 85 percent of the new
stock by paying $35,000.
AMBAC FINANCIAL: Court Amends $27-MM Securities Settlement Order
----------------------------------------------------------------
Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York entered an amended order approving
a $27 million settlement resolving certain securities and
derivative actions against Ambac Financial Group, Inc. The
resolved actions were filed in 2008 by purchasers of the Debtor's
common stock and the Debtor's shareholders.
Judge Chapman authorized the Debtor's entry into and performance
of all of its obligations under the Stipulation of Settlement, as
amended, and the accompanying Insurance Agreement, as amended.
The bankruptcy judge also approved the injunctions and releases
set forth in the Stipulation of Settlement and Insurance
Agreement. However, the injunctions and releases set forth in
the Amended Order do not release or bar the claims arising under
the Employee Retirement Income Security Act at issue in the
action entitled Veera v. Ambac Administrative Committee et al.,
before Judge Harold Baer, Jr. in the U.S. District Court for the
Southern District of New York. Nothing in the Stipulation of
Settlement or its amendments will be deemed a waiver by the
defendants in the Veera Action of their rights to maintain that
any recovery by the Ambac Financial Group Inc. Savings Incentive
Plan pursuant to the Settlement Stipulation approved will offset
any recovery by the plaintiffs in the Veera Action, Judge Chapman
clarified.
The Amended Order excluded a statement from the original July 19,
2011, order that provides that notice was provided to the
plaintiffs of the Derivative Actions.
Claim Nos. 2493 and 2992 were also taken out from the claims
disallowed and expunged by the July 19 Order. Accordingly, upon
occurrence of the effective date of the Stipulation of
Settlement, Claim Nos. 2163, 2165, 2169 and 2170 will be deemed
to be disallowed and expunged from the Debtor's claim register
without further order of the Bankruptcy Court, Judge Chapman
ruled.
The Debtor is directed to file appropriate applications seeking
dismissal of the Derivative Actions.
AFG Files Brief, PFRS Files Support Memorandum
Before entry of the Amended Order, the Debtor submitted a
supplemental brief in support of the Amended Order along with a
declaration of Stephen M. Ksenak, senior managing director and
general counsel of the Debtor.
Under their brief, the Debtor complained that the plaintiffs in
the Derivative Actions, which are out-of-the-money parties, are
trying to hold the heavily negotiated Stipulation of Settlement
hostage to extract value at the expense of the Debtor's
creditors. However, those out-of-the-money derivative plaintiffs
cannot benefit from recovery, if any, in the Derivative Actions
and will not bear any of the costs if the Stipulation of
Settlement falls apart, counsel to the Debtor, Peter A. Ivanick,
Esq., at Dewey & LeBoeuf LLP, in New York, pointed out. Even
assuming the derivative claims had some merit, those claims would
not justify the costs and other adverse consequences of
attempting to pursue them, instead of proceeding with the
Stipulation of Settlement, he asserted.
Mr. Ivanick insisted that the Stipulation of Settlement warrants
Bankruptcy Court approval. He emphasized that if the claims at
issue in the Derivative Actions are not released and barred, the
Settlement of the Securities Actions will collapse, resulting in
considerable expense to the Debtor's estate. He reminded the
Bankruptcy Court that the D&O Insurers have indicated that they
are unwilling to pay their $24,600,000 portion of the Settlement
Amount absent the Bankruptcy Court's approval of the Injunctions
and Releases, which release and bar the claims at issue in the
Derivative Actions.
If the claims at issue in the Derivative Actions and Securities
Actions are not resolved, the Debtor will also be subjected to
discovery requests by the Plaintiffs and other defendants,
causing the Debtor to incur substantial expense responding to
those requests, Mr. Ivanick pointed out. More importantly, the
Debtor's management would be distracted by those discovery
demands at a time when their attention is best served for the
reorganization of the Debtor, he stressed.
In contrast, the Stipulation of Settlement requires no further
payment from the Debtor beyond the sum of $2,500,000, which will
allow the Debtor to avoid the cost of continued litigation, Mr.
Ivanick stated. The Official Committee of Unsecured Creditors,
whose constituents would benefit were there to be recovery on the
claims in the Derivative Actions, agrees with the Debtor that the
release and bar of the derivative claims via the Settlement
Stipulation is in the best interests of the Debtor's estate.
Mr. Ksenak declared that the Stipulation of Settlement has been
the product of a thorough, informed exercise of reasonable
business judgment on the part of the Debtor and endorsed by the
Creditors' Committee.
For its part, the Police and Fire Retirement System submitted a
pre-hearing memorandum in support of its objection to the Amended
Order and an accompanying expert report of Lawrence A. Weiss.
Representing the PFRS, Denis F. Sheils, Esq., at Kohn Swift &
Graf, PC, in Philadelphia, Pennsylvania, insisted that the
proponents of the Settlement Stipulation initially failed to
provide the Court with sufficient information to value the
separate derivative claims that are to be released as part of the
Stipulation of Settlement and the Insurer Agreement.
Accordingly, the PFRS asked the Bankruptcy Court to vacate the
July 19 Order.
Mr. Sheils also contended that the expected recovery from the
derivative claims is far greater than the non-monetary
consideration the Debtor asserts it is receiving for the release
of those claims. Mr. Weiss estimates damages from the defendants
of the Derivative Actions as alleged in the Derivative Complaints
to be in the range of $15.6 billion to $17.1 billion. If the
Bankruptcy Court determines that the derivative claims are worth
more than the cost of pursuing them, then it should not enter the
Amended Order approving the Settlement Stipulation, Mr. Sheils
asserted.
Mr. Sheils argued that the Debtor cannot establish that the
Settlement Stipulation is in the best interests of the estate
because it failed to conduct an appropriate valuation of the
derivative claims. The Debtor, he pointed out, is paying money
from the estate to settle the securities claims, but is also
releasing the derivative claims for no monetary consideration.
The Settlement Stipulation is also neither fair nor equitable to
the Debtor's estate because the members of the board who entered
into the settlement were interested by virtue of their status as
defendants in the Delaware Derivative Action, he maintained.
Mr. Ksenak testified at a September 8, 2011 hearing, and Dr.
Weiss testified at the continuation of the hearing on
September 9, 2011.
As of September 12, 2011, the objections filed by (i) the PFRS,
as plaintiff in a derivative action captioned In re Ambac
Financial Group, Inc. Shareholders Derivative Litigation in the
Court of Chancery of the State of Delaware; and (ii) Catherine
Rubery, a plaintiff In re Ambac Financial Group, Inc. Derivative
Litigation before the U.S. District Court for the Southern
District of New York, remain unresolved.
Bankruptcy Court Explains Entry of Amended Order
In a bench decision dated September 12, 2011, Judge Chapman
determined that the Stipulation of Settlement passes muster under
the factors In re Motorola Inc. v. Official Comm. of Unsecured
Creditors and JP Morgan Chase Bank, N.A. (In re Iridium Operating
LLC), 478 F.3d 452 (2d Cir. 2007) and falls well above the lowest
point in the range of reasonableness.
"Nothing in Iridium or other applicable case law requires a
debtor to gamble with the estate's interest at the behest of an
out-of-the-money party who has nothing to lose by a roll of the
litigation dice," Judge Chapman opined.
Judge Chapman held that the Debtor made a substantial showing
regarding its consideration of the merits of the claims proposed
to be settled and the likelihood of success on those claims.
Indeed, the Debtor has determined, after considering the
extraordinary difficulty of proving bad faith on the part of a
board which was composed of a majority of independent directors,
that the derivative claims are of little to no value under
controlling Delaware law, Judge Chapman recognized.
Judge Chapman noted that Mr. Ksenak provided a plausible
explanation for the timing of the stock sales by the defendant
officers and directors and also provided documentary evidence
that purchases of stock by those individuals continued both
during and after the relevant time period. In contrast, the
Derivative Plaintiffs mistakenly equate what they view as the
Debtor's losses from its exposure to the CDO and CDO-squared
market without any demonstration that the defendant officers and
directors caused those losses, Judge Chapman held.
The Derivative Plaintiffs also failed to present any evidence
showing a likelihood of success in the Derivative Actions which
would yield an extraordinary level of recovery as proferred by
Dr. Weiss, Judge Chapman found. The bankruptcy judge found that
the assumptions on which Dr. Weiss's opinion are based are highly
flawed and at odds with reality. "While the Bankruptcy Court is
sympathetic to the Derivative Plaintiffs' understandable desire
to blame someone for the staggering losses the Debtor sustained,
neither the strength of that desire nor the magnitude of the
losses suffered equates to a demonstration of causation or legal
liability," Judge Chapman stated.
Judge Chapman further held that there is no serious dispute that
absent the Stipulation of Settlement, litigation of the
Securities Litigation and the Derivative Actions could continue
for several years, during which time those costs and delays would
continue. The Debtor has demonstrated that its estate is
receiving value for the release of the derivative claims through
the settlement by (i) avoiding the significant legal costs in the
actions (approximately $20 million, according to Mr. Ksenak's
testimony) which would well exceed the $2.5 million that the
Debtor will pay in connection with the settlement; and (ii)
enabling the Debtor's management to continue to work toward the
Debtor's reorganization, Judge Chapman determined.
The Bankruptcy Court pointed out that the support of the
Creditors' Committee weighs heavily in favor of approval of the
Stipulation of Settlement. "I find that the Creditors' Committee
serves as a very reliable check on the business judgment of the
Debtor, and I place far greater weight on the Committee's support
for the settlement than the views of the Derivative Plaintiffs
who have nothing at stake in terms of potential recovery in the
bankruptcy case," Judge Chapman opined.
Judge Chapman also determined that the releases and injunctions
are one integral aspect of a multi-faceted settlement and said,
"I find no reason to disagree with the Debtor's business judgment
in evaluating the appropriateness of those releases and
injunctions in connection with the overall settlement." The
Debtor has established that that the injunctions and releases
being given through the Stipulation of Settlement are appropriate
in nature and scope and that the settlement would not be
achievable without those provisions, the bankruptcy judge
recognized.
The Bankruptcy Court further held that there has been no evidence
presented that the Stipulation of Settlement was the result of
anything other than arm's-length negotiations. The fact that the
Derivative Plaintiffs did not participate in the mediation
sessions or settlement discussions does not alter this
conclusion, Judge Chapman clarified.
The Bankruptcy Court thus determined that the Debtor has made a
reasonable business judgment that the claims asserted in the
Derivative Actions lack merit and that even if those claims did
have merit, those claims are not worth pursuing. Judge Chapman
further ruled that there is no merit to the Derivative
Plaintiffs' argument that under the Supreme Court's recent
decision in Stern v. Marshall, 131 S. Ct. 2594, the Bankruptcy
Court should abstain from deciding the claims at issue in the
Derivative Actions. "This Court is confident that, as a matter
of law and practice, it most certainly does not stand for the
proposition that the bankruptcy court cannot approve the
compromise and settlement of a claim which is indisputably
property of a debtor's estate," Judge Chapman concluded.
For these reasons and based on the record of the hearings held on
July 19, 2011, August 10, 2011, and September 8 to 9, 2011, the
Bankruptcy Court overruled the Derivative Plaintiffs' objections
and entered the Amended Order.
A full-text copy of the Bench Decision dated September 12, 2011,
is available for free at:
http://bankrupt.com/misc/Ambac_Sept12BenchDecision.pdf
* * *
Judge Chapman read her decision into the record on
Sept. 12, 2011. The opinion took 30 minutes to read, counsel to
the Debtor, Richard Reinthaler, Esq., at Dewey & LeBoeuf LLP, in
New York, stated in an interview with Bloomberg News.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMBAC FINANCIAL: To Revise Plan Outline Ahead of Oct. 5 Hearing
---------------------------------------------------------------
Ambac Financial Group, Inc. is currently revising its disclosure
statement explaining the proposed Chapter 11 Plan of
Reorganization, according to court papers.
To recall, the Debtor, the Office of Commissioner of Insurance
for the State of Wisconsin, Ambac Assurance Corporation, and
other key parties-in-interest in the Debtor's Chapter 11 case
were engaged in mediation with respect to the proposed settlement
embodied in the Plan.
The Court scheduled a hearing to consider adequacy of the
Disclosure Statement for October 5, 2011.
Objections, if any, to the Disclosure Statement are due no later
than September 28, 2011.
Meanwhile, Ambac Financial disclosed in court papers that
discovery in the adversary proceeding it commenced against the
U.S. Internal Revenue Service is in progress. As of Sept. 13,
2011, document discovery and depositions of expert witnesses are
scheduled to be completed by Oct. 5, 2011.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMBAC FINANCIAL: Proposes to Hire Brattle as Consultant
-------------------------------------------------------
Ambac Financial Group, Inc. seeks permission from the Court to
employ The Brattle Group, Inc., as its consultant and possible
expert witness, nunc pro tunc to July 22, 2011.
As the Debtor's consultant, Brattle will provide consulting
services and possible expert witness services to Dewey & LeBoeuf,
LLP, for the benefit of the Debtor, including, among other
things, on economic issues related to the tax treatment of
economic losses suffered by one of the Debtor's indirectly held
subsidiaries on certain CDS contracts. Brattle will serve as
Dewey & LeBoeuf's consultant and possible expert witness with
respect to the adversary proceeding commenced by the Debtor
against the Internal Revenue Service and the Debtor's objection
to the IRS's Claims, each asserting a priority claim of
$807,243,827.
The Debtor will pay Brattle's professionals according to the
firm's customary hourly rates:
Name/Title Rate per Hour
--------- -------------
Dr. Michael I. Cragg, Principal $575
Bin Zhou, Senior Consultant $440
Lisa Cameron, Senior Consultant $395
Associates $290 to $450
Research Staff $200 to $325
Brattle will be reimbursed for all reasonable out-of-pocket
expenses incurred.
Dr. Michael I. Cragg, a principal at The Brattle Group, Inc., in
Cambridge, Massachusetts -- Michael.Cragg@brattle.com --
discloses that his firm is a "disinterested person," as the term
is defined under Section 101(14) of the Bankruptcy Code.
About Ambac Financial
Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.
Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.
Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy. AAC is being restructured by state regulators in
Wisconsin. AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.
Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.
On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.
Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.
Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel. The Blackstone Group LP is the Debtor's
financial advisor. Kurtzman Carson Consultants LLC is the claims
and notice agent. KPMG LLP is tax consultant to the Debtor.
Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors. Lazard Freres
& Co. LLC is the Committee's financial advisor.
Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy
News. The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).
AMTRUST FINANCIAL: Wins Approval of Disclosure Statement
--------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court issued
an order approving the disclosure statement outlining the terms of
AmTrust Financial's Chapter 11 plan.
According to documents filed with the Court, AmFin Financial
Corporation, formerly known as AmTrust Financial, and its five
debtor subsidiaries are seeking votes in favor of their Amended
Joint Plan of Reorganization. The Debtors believe that the AmFin
Plan is the best feasible plan for restructuring the Debtors,
providing for the orderly disposition of their assets and
providing the greatest recovery to creditors and equity interest
holders."
The Court also issued a separate order approving the Debtors'
stipulation with Wilmington Trust Company clarifying the claim
amount and ballot procedure utilized during Plan solicitation.
The Court scheduled an Oct. 25, 2011 hearing to consider
confirming the Amended Joint Plan.
According to the Disclosure Statement, the AmFin Plan incorporates
a proposed compromise and settlement regarding the holders of the
Senior Notes Claims. Specifically, the terms of the Plan provides
that holders of senior notes will have allowed unsecured claims in
an agreed aggregate amount of $100.8 million and that the holders
of subordinated notes will have an allowed unsecured claims in an
agreed aggregate amount of $53.6 million.
About AmTrust Financial
AmTrust Financial Corp (PINK: AFNL) was the owner of the AmTrust
Bank. AmTrust was the seventh-largest holder of deposits in South
Florida, with $4.7 billion in deposits and 21 branches.
In November 2008, the Office of Thrift Supervision issued a cease
and desist order requiring AmTrust to improve its capital ratios.
AmTrust Financial, together with affiliates that include AmTrust
Management Inc., filed for Chapter 11 bankruptcy protection
(Bankr. N.D. Ohio Case No. 09-21323) on Nov. 30, 2009. The debtor
subsidiaries include AmFin Real Estate Investments, Inc., formerly
AmTrust Real Estate Investments, Inc. (Case No. 09-21328).
G. Christopher Meyer, Esq., Christine M. Piepont, Esq., and Sherri
L. Dahl, Esq., at Squire Sanders & Dempsey (US) LLP, in Cleveland,
Ohio; and Stephen D. Lerner, Esq., at Squire Sanders & Dempsey
(US) LLP, in Cincinnati, Ohio, serve as counsel to the Debtors.
Kurtzman Carson Consultants serves as claims and notice agent.
Attorneys at Hahn Loeser & Parks LLP serve as counsel to the
Official Committee of Unsecured Creditors. AmTrust Management
estimated $100 million to $500 million in assets and liabilities
in its Chapter 11 petition.
AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4,
2009, AmTrust Bank was closed by regulators and the Federal
Deposit Insurance Corporation was named receiver. New York
Community Bank, in Westbury, New York, assumed all of the deposits
of AmTrust Bank pursuant to a deal with the FDIC.
ANNA NICOLE SMITH: High Court Ruling Taken Up at ABI Conference
---------------------------------------------------------------
Nick Brown, writing for Reuters Legal, reports that Craig
Goldblatt, one of the lawyers for the estate of ex-Playboy model
Anna Nicole Smith's late husband, tried to temper fears that the
U.S. Supreme ruling in Stern v. Marshall will undermine the
jurisdiction of bankruptcy courts.
Reuters relates that Mr. Goldblatt -- speaking at the American
Bankruptcy Institute's Views from the Bench conference on Friday
-- said he does not think the decision should stop bankruptcy
courts from ruling on asset sales by bankrupt companies. It
should, however, remove disputes over fraudulent conveyances -- a
staple of bankruptcy litigation -- from the bankruptcy court's
jurisdiction.
Mr. Goldblatt is with WilmerHale.
According to Reuters, Judge Robert Drain of the U.S. Bankruptcy
Court for the Southern District of New York at Friday's
conference, said the decision "causes judges to doubt their reason
for being."
But, Reuters adds, Mr. Goldblatt said a "straightforward" two-
pronged analysis should solve most of the uncertainty: issues are
out of the bankruptcy court's hands if they arise directly from
state law claims, or if the claimants are entitled to a jury trial
under the 7th Amendment, he said. That would preserve the
bankruptcy court's right to rule on asset sales, a form of
restructuring becoming increasingly more common under Chapter 11,
Mr. Goldblatt said. But fraudulent conveyance disputes, which
carry the right to a jury trial, would move to federal district
court, he said.
Reuters relates most judges at Friday's conference predicted that
appellate courts will read the ruling narrowly enough to salvage
much of their authority. But that won't stop litigants from
trying to use Stern to gain leverage, said Judge James Peck, who
presides over Lehman Brothers' Chapter 11 in Manhattan.
"I think Stern has been weaponized . . . on the theory that that
which is not nailed down gets picked up," Judge Peck said,
according to Reuters. "This is an argument that gets thrown at me
in settings that I am confident that (Supreme Court Chief) Justice
(John) Roberts never contemplated and would be horrified if he
knew about."
The Supreme Court ruling was reported in the June 30 edition of
the Troubled Company Reporter.
ANTS SOFTWARE: To Pay Bonuses After Sale or Merger
--------------------------------------------------
The Board of Directors of ANTs software inc., upon recommendation
of the Compensation Committee, approved the terms of the ANTs
software inc. Strategic Bonus Plan.
The purpose of the Plan is to attract and retain key employees and
Board members necessary to consummate a strategic transaction in
which either (i) the Company merges with and into another entity,
(ii) the Company sells all or substantially all of its outstanding
capital stock, or (iii) the Company sells all or substantially all
of its assets. The Plan also serves to motivate participants to
achieve certain goals, including the consummation of a strategic
transaction.
Participants in the Plan consist of directors, officers and
certain employees of the Company or a subsidiary of the Company,
as determined by the Compensation Committee.
The Compensation Committee has the authority to control and manage
the operation of the Plan, unless the Compensation Committee
delegates its responsibilities to another person or party, as
permitted by law.
The aggregate bonus pool in connection with a Strategic
Transaction will be equal to 10% of the gross consideration
received by the Company, in cash or securities, if the gross
consideration is less than $35,000,000, or 15% of the gross
consideration if such amount is equal to or greater than
$35,000,000.
The Company's Chief Executive Officer may award bonuses to certain
Company employees in such amounts as he may determine; provided,
however, that the aggregate amount of such employee bonuses may
not exceed an amount equal to (i) $500,000, if the gross
consideration received by the Company is less than $35,000,000, or
(ii) $1,000,000, if the gross consideration received by the
Company is equal to or greater than $35,000,000. Additionally,
only the Compensation Committee may determine the amount of any
bonus awarded to the Chief Executive Officer.
In connection with a Strategic Transaction, the members of the
Board will be entitled to a bonus payment equal to a specified
percentage of the Board Bonus Pool, which is equal to the
difference between the Bonus Pool and the Employee Bonus Pool.
A full-text copy of the Strategic Bonus Plan is available for free
at http://is.gd/9YpMLr
About Ants software
ANTs software inc (OTC BB: ANTS) -- http://www.ants.com/-- has
developed a software solution, ACS, to help customers reduce IT
costs by consolidating hardware and software infrastructure and
eliminating cost inefficiencies. ACS is an innovative middleware
solution that accelerates database consolidation between database
vendors, enabling application portability.
The Company's balance sheet at March 31, 2011, showed
$27.2 million in total assets, $52.3 million in total liabilities,
and a stockholders' deficit of $25.1 million.
As reported in the TCR on April 8, 2011, WeiserMazars LLP, in New
York, expressed substantial doubt about ANTs software's ability to
continue as a going concern, following the Company's 2010 results.
The independent auditors noted that the Company has incurred
significant recurring operating losses, decreasing liquidity, and
negative cash flows from operations.
ANTS SOFTWARE: Signs Licensed Works Agreement with IBM
------------------------------------------------------
ANTs software inc. entered into a Licensed Works Agreement and
accompanying Statement of Work with International Business
Machines Corporation pursuant to which the Company has granted IBM
a non-exclusive license to use, distribute and sublicense a
computer software program known as ANTS Compatibility Server for
Sybase to DB2.
The Licensed Software is designed to migrate applications from the
Sybase ASE database platform to IBM DB2 database platforms. IBM
will pay to the Company a percentage of royalties realized from
license revenue and maintenance fees attributable to the Licensed
Software.
A full-text copy of the Licensed Works Agreement is available for
free at http://is.gd/WwpCpl
About Ants software
ANTs software inc (OTC BB: ANTS) -- http://www.ants.com/-- has
developed a software solution, ACS, to help customers reduce IT
costs by consolidating hardware and software infrastructure and
eliminating cost inefficiencies. ACS is an innovative middleware
solution that accelerates database consolidation between database
vendors, enabling application portability.
The Company's balance sheet at March 31, 2011, showed
$27.2 million in total assets, $52.3 million in total liabilities,
and a stockholders' deficit of $25.1 million.
As reported in the TCR on April 8, 2011, WeiserMazars LLP, in New
York, expressed substantial doubt about ANTs software's ability to
continue as a going concern, following the Company's 2010 results.
The independent auditors noted that the Company has incurred
significant recurring operating losses, decreasing liquidity, and
negative cash flows from operations.
APOLLO CASUALTY: A.M. Affirms 'B+' Financial Strength Rating
------------------------------------------------------------
A.M. Best Co. has revised the outlook to stable from positive and
affirmed the financial strength rating (FSR) of B+ (Good) and
issuer credit ratings (ICR) of "bbb-" of American Independent
Companies (AIC) (headquartered in Conshohocken, PA) and its pool
members.
Concurrently, A.M. Best has upgraded the FSR to B+ (Good) from C++
(Marginal) and the ICR to "bbb-" from "b" of AIC's newly-acquired,
Apollo Casualty Company (ACC) and Delphi Casualty Company (DCC)
(both headquartered in Des Plaines, IL). These ratings have been
removed from under review with positive implications and assigned
a stable outlook.
AIC's revised outlook reflects its reduced level of risk-adjusted
capitalization resulting from a dividend payment to its parent
holding company, Independent Insurance Investments, Inc., and its
increased level of integration and execution risk following the
June 6, 2011 acquisition by Omni Insurance Company (OMNI)
(Atlanta, GA), a member of AIC, of 100% of the stock of ACC, DCC
and Apollo Casualty Company of Florida (ACCF) (Summerfield, FL),
which were owned by American General Holdings, Inc.
Subsequent to the acquisition, AIC received regulatory approval
for the amended intercompany pooling agreements from the Illinois
and Pennsylvania Insurance Departments; thus allowing ACC and DCC
to be added as members to the AIC pool, effective July 1, 2011.
Consequently, with the inclusion of these companies the AIC pool
has seven members.
In addition, A.M. Best has removed from under review with
developing implications and affirmed the FSR of C++ (Marginal) and
ICR of "b" of ACCF. The outlook assigned to both ratings is
negative. ACCF is currently in run off, and the negative outlook
is due to continued declines in surplus and uncertainty regarding
the timing of approval from the Florida Office of Insurance
Regulation for OMNI's assumption of ACCF's liabilities.
Concurrently, A.M. Best has withdrawn the FSR of C++ (Marginal)
and ICR of "b" for American General Holdings Group (AGHG) (Des
Plaines, IL). The ratings were withdrawn due to AGHG no longer
having members.
The FSR of B+ (Good) and the ICR of "bbb-" have been affirmed for
American Independent Companies and its following members:
-- Omni Insurance Company
-- Omni Indemnity Company
-- American Independent Insurance Company
-- The Personal Service Insurance Company
-- Bankers Independent Insurance Company
ARETE INDUSTRIES: Posts $840,300 Net Loss in Second Quarter
-----------------------------------------------------------
Arete Industries, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $840,394 on $15,983 of oil & gas revenue
for the three months ended June 30, 2011, compared with a net loss
of $240,384 on $42,088 of oil & gas revenue for the same period
last year.
For the six months ended June 30, 2011, the Company had a net loss
of $1.29 million on $45,639 of oil & gas revenue, compared with a
net loss of $454,352 on $100,481 of oil & gas revenue for the same
period of 2010.
The Company's balance sheet at June 30, 2011, showed $1.24 million
in total assets, $1.17 million in total liabilities, all current,
and stockholders' equity of $65,331.
Ronald R. Chadwick, P.C., of Aurora, Colo., expressed substantial
doubt about Arete Industries' ability to continue as a going
concern, following the Company's 2010 results. Mr. Chadwick noted
that the Company has suffered recurring losses from operations,
has a working capital deficit and a stockholders' deficit, and is
delinquent on the payment of creditor liabilities including
payroll taxes.
A complete text of the Form 10-Q is available for free at:
http://is.gd/wsaFJk
Westminster, Colo.-based Arete Industries, Inc. (OTC QB: ARETD)
-- http://www.areteindustries.com/-- is the operator of a gas
gathering system and is in the process of buying oil and gas
properties in the Rocky Mountain Region of the United States.
AVIS BUDGET: Moody's Affirms 'B1' Rating; Outlook Stable
--------------------------------------------------------
Moody's Investors Service affirmed the B1 Corporate Family and
Probability of Default Ratings of Avis Budget Group, Inc. (Avis)
and assigned a Ba1 rating to the new $440 million senior secured
term loan of Avis Budget Car Rental LLC. Moody's also assigned a
B2 rating to the $250 million senior unsecured notes of AE Escrow
Corporation (Escrow Issuer). Proceeds from the newly-issued
securities, along with approximately $0.3 billion in cash on hand,
will be used to fund Avis'$1.0 billion acquisition of Avis Europe
plc. Upon completion of the acquisition the unsecured notes issued
by Escrow Issuer will be assumed by Avis Budget Car Rental LLC.
The company's Speculative Grade Liquidity rating remains SGL-3 and
the rating outlook is stable.
RATINGS RATIONALE
These rating actions reflect the very complimentary strategic fit
between the North American car rental operations of Avis and the
European operations of Avis Europe. The combination will provide
Avis with a much-needed global presence, and should enhance its
growth opportunities with multi-national corporate clients and
emerging markets. The proposed financing structure of the
transaction, combined with $30 million in cost savings and Avis
Europe's current run rate of $536 million in gross EBITDA, result
in pro forma consolidated credit metrics that are similar to Avis'
current stand alone metrics. For the LTM through June 2011, Avis'
metrics (reflecting Moody's standard adjustments) were
EBIT/interest of 1.4x, EBITDA/interest of 4.1x, and debt/EBITDA of
4.5x. Financing for the $1.0 billion acquisition will consist of
cash on hand and $690 in proceeds from the new term loan and
unsecured notes. Moody's expects that the credit metrics of the
combined entity will continue to strengthen as a result of the
ongoing cost reduction initiatives of Avis and Avis Europe and the
revenue and cost synergies that the transaction should yield.
Moody's rating actions also reflect Avis' formal withdrawal of its
offer to acquire Dollar Thrifty Automotive Group, Inc.
Avis' Speculative Grade Liquidity rating of SGL-3 indicates
adequate liquidity over the coming twelve months notwithstanding
the proposed acquisition. The key liquidity sources taken into
consideration include: Avis' $1 billion in cash on hand; Avis'
Europe's approximately $160 million in cash; a $1.4 billion
revolving credit facility maturing in 2016; a $1 billion ABS
conduit maturing in 2012; and a $1 billion committed bridge
facility to support the funding of the Avis Europe acquisition.
These liquidity sources provide adequate coverage for the
potential liquidity requirements that might arise which include:
the seasonal build up in Avis' North American vehicle fleet; the
$1 billion to fund the Avis Europe acquisition; and the refunding
of Avis Europe's existing debt. Nevertheless, Moody's SGL
liquidity stress analysis looks for a company to be able to fund
all future cash requirements from internal or committed sources of
liquidity. The SGL-3 indicates Moody's view that Avis' current
liquidity sources can cover all such requirements if necessary.
Upward movement in the rating would require evidence that the
acquisition of Avis Europe was being successfully integrated and
that the company was able to capitalize on the cost and revenue
enhancement opportunities. Credit metrics which might support
upward rating movement include: EBIT/interest that can be
sustained in the area of 2x and debt /EBITDA below 3.5x. An
additional critical consideration in any upward movement in Avis'
rating will be the company's ability to maintain adequate
liquidity given the ongoing need to access debt capital in order
to fund its fleet purchases. This need will likely increase with
the acquisition of Avis Europe. Upward rating movement would also
require progress in reducing Avis' substantial level of corporate
debt. Moody's notes that corporate debt is being increased by the
Avis Europe transaction. Moody's does not anticipate material
progress in this area during the near-term.
The rating could come under pressure if Avis were to encounter
liquidity or operating stress associated with the acquisition or
integration of Avis Europe. Metrics that might signal rating
pressure include EBIT/interest remaining near 1x or debt/EBITDA
exceeding 4.5x.
The principal methodologies used in this rating were Global
Equipment and Automobile Rental Industry published in December
2010, and Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
The last rating action for Avis was an increase in the company's
Corporate Family Rating and Probability of Default Rating to B1 on
April 6, 2011.
BANNING LEWIS: Del. Judge Approves Sale to Ultra Resources
----------------------------------------------------------
Rich Laden at the Gazette reports that a Delaware bankruptcy judge
has approved the sale of the lion's share of the sprawling Banning
Lewis Ranch in Colorado Springs to a Houston-based company that
wants to drill for oil and gas on the property.
But as part of his approval of Ultra Resources' purchase, the
judge agreed that a Colorado bankruptcy court should decide the
thorny issue of whether city land-use agreements that were
intended to govern the ranch's development -- including an
annexation agreement, utilities agreement and other land-use
controls - should remain in effect, according to the report.
The report says the ranch's owners put the 21,500-acre property up
for auction in June after a bankruptcy filing in October of last
year; Ultra submitted the winning bid for 18,000 acres of the
land.
According to the report, Ultra's previous purchase price of
$26.3 million was reduced to $20 million, according to an amended
purchase agreement that accompanied the judge's order approving
the sale. A final sale order and a closing on the property will
take place by Oct. 10, 2011, the amended agreement shows.
About Banning Lewis
Banning Lewis Ranch Co. is the owner of the undeveloped portion of
a 21,000-acre ranch in Colorado Springs, Colo. Banning Lewis
Ranch is a master-planned community in Colorado Springs, Colorado.
The first section built, the 350-acre Northtree Village, opened in
September 2007 and will have 1,000 homes priced from the high
$100,000s to the mid-$300,000s.
Banning Lewis Ranch filed for Chapter 11 bankruptcy protection
from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28,
2010. It estimated assets of $50 million to $100 million and
debts of $100 million to $500 million in its Chapter 11 petition.
An affiliate, Banning Lewis Ranch Development I & II, LLC,
simultaneously filed for Chapter 11 bankruptcy (Bankr. D. Del.
Case No. 10-13446).
Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel
to the Debtors. Edward A. Phillips of Eisner Amper LLP has been
retained as the Company's chief restructuring officer.
BARNES BAY: Class 8 Creditors Group Opposes Plan Confirmation
-------------------------------------------------------------
A group of creditors identified as the Ad Hoc Committee of Class 8
Creditors asks the U.S. Bankruptcy Court for the District of
Delaware to deny the confirmation of the Second Amended, Modified
Plan of Liquidation proposed by Kor Duo Investment Partners II
L.P., Kor Duo II, L.L.C., and Barnes Bay Development, Ltd., and
the Official Committee of Unsecured Creditors. The Ad Hoc
Committee is consists of 35 individual members holding 16 claims
against the Debtors.
The Chapter 11 Plan
As reported in the Troubled Company Reporter on Sept. 16, 2011,
the Debtor filed on Aug. 19, a second amended modified joint
Chapter 11 plan of reorganization to, among other things, address
objections raised by Roberta A. DeAngelis, U.S. Trustee for
Region 3.
The Plan provides for the payment in full of all holders of
General Unsecured Creditors, including all trade vendors.
A redlined version of the Aug. 19 Plan is available for free at
http://ResearchArchives.com/t/s?76be
According to the Ad Hoc Committee's motion, on Aug. 24, the Court
approved the adequacy of the supplemental Disclosure Statement and
authorized the re-solicitation of Class 6 and Class 8.
The modified amended Plan, the Ad Hoc Committee adds, the Plan
provides for cash distributions to the various unsecured classes
as:
Unsecured Creditor Class Proposed Distribution
------------------------ ---------------------
Class 5 General Unsecured Claims 100%
Class 6 PSA Claims (Tier 1) 50%
Class 8 PSA Claims (Tier 3) 15%
Class 9 Prepetition Lender Deficiency Claim 0%
The modified amended Plan indicate that the public auction sale of
substantially all the Debtors' assets was conducted, and that
Starwood was the sole and successful bidder with a bid of
$165 million.
The Ad Hoc Committee explains that, among other things:
-- the modified amended Plan cannot be confirmed, even if the
Class 8 creditor group's expectations of the modified amended
Plan's rejection by the Class 8 are met, the Plan is still not
subject to confirmation because it did not satisfy the
requirements of section 1129 (a) (1) of the Bankruptcy Code;
and
-- the offered justifications support neither the unfair
discrimination nor the separate classification of Class 8
creditors.
The Ad Hoc Committee of Class 8 Creditors is represented by:
William D. Sullivan, Esq.
SULLIVAN, HAZELTINE, ALLINSON LLC
901 North Market Street, Suite 1300
Wilmington, DE 19801
Tel: (302) 428-8191
Fax: (302) 428-8195
John J. Monaghan, Esq.
Diane N. Rallis, Esq.
HOLLAND & KNIGHT LLP
10 St. James Avenue
Boston, MA 02116
Tel: (617) 523-2700
Fax: (617) 523-6850
E-mail: john.monaghan@hklaw.com
diane.rallis@hklaw.com
About Barnes Bay
Beverly Hills, California-based Barnes Bay Development Ltd., owns
the Viceroy Anguilla Resort & Residences on the British West
Indies island of Anguilla. Barnes Bay and two affiliates filed
for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No.
11-10792) on March 17, 2011, to facilitate the sale of the resort.
Barnes Bay disclosed $3,331,282 in assets and $481,840,435 in
liabilities as of the Chapter 11 filing.
Akin Gump Straus Hauer & Feld LLP is the Debtors' bankruptcy
counsel, and Keithley Lake & Associates is the Debtors' special
Anguillan counsel. Kurtzman Carson Consultants LLC is the
Debtors' claims, noticing, solicitation and balloting agent.
The U.S. Trustee appointed five members to the official committee
of unsecured creditors in the Debtors' cases. Brown Rudnick LLP
serves as the Committee's co-counsel, and Womble Carlyle Sandridge
& Rice, PLLC, as its Delaware co-counsel. C.R. Hodge & Associates
is the Committee's foreign counsel. FTI Consulting, Inc., serves
as the Committee's financial advisors.
BBB ACQUISITION: Court Denies Plan Exclusivity Extension
--------------------------------------------------------
The Hon. Peter J. McNiff of the U.S. Bankruptcy Court for the
District of Wyoming denied BBB Acquisition, LLC's request for an
extension of its exclusive period to solicit acceptances for the
proposed Chapter 11 plan.
The Dillard Family Trust objected to the requested extension.
The Debtor, in its exclusivity extension motion, said it needs the
extension to allow it to resolve issues relating to newly acquired
information that Max C. Chapman, an individual who sold various
parcels of real property to the Debtor in 2005, possessed a right
of first refusal with regard to certain real property of the
Debtor, as well as to present a confirmable plan of
reorganization.
The Court finds that, among other things:
1. The size of the BBB case, in terms of dollar amount is
large, but is only complicated by the district court litigation
and pending appeal.
2. The necessity for sufficient time to permit the Debtor to
negotiate a plan and disclosure statement has been delayed as
the Debtor is awaiting and continuing its Tenth Circuit appeal
and delaying proposing a plan.
3. The Debtor has not made good progress towards
reorganization. The Debtor is in nearly the same position as
it was upon filing the Bankruptcy as the issues with the
Dillard Trust as nearly the same, nor has the Debtor sold any
of its property.
Th Court, based on its findings, concluded that the Debtor has not
met the burden of proving cause to extend the exclusivity
deadline.
About BBB Acquisition, LLC
BBB Acquisition, LLC, in Cincinnati, Ohio, is the developer of the
Bar-B-Ranch in Teton County, Wyoming. The residential development
consists of 16 parcels, each in excess of 35 acres in size,
located adjacent to the Snake River. The Debtor filed for
Chapter 11 bankruptcy (Bankr. D. Wyo. Case No. 10-21002) on
Aug. 24, 2010, represented by Brent R. Cohen, Esq. --
bcohen@rothgerber.com -- and Chad S. Caby, Esq. --
ccaby@rothgerber.com -- at Rothgerber Johnson & Lyons LLP, in
Denver, Colorado. The Debtor disclosed $57,239,218 in assets and
$35,613,501 in liabilities.
BBB ACQUISITION: Court Won't Convert Case to Ch. 7 Just Yet
-----------------------------------------------------------
Bankruptcy Judge Peter J. McNiff denied the requests of the
Dillard Family Trust and the United States Trustee to convert the
of the Bankruptcy Code. The Debtor, Fifth Third Bank, Mercer
Reynolds and Linger Longer West objected to the requests. The
Debtor had a plan pending at the time the Court held a hearing to
consider the conversion motion. That Plan was subsequently
withdrawn. Judge McNiff noted that the Debtor is marketing "high
end" parcels in Teton County. The sale of these parcels is
complex and complicated by the requirements necessary to sell the
property and the economy. The overall benefit to the estate and
creditors is best served by not converting the case to a Chapter 7
case at this time. A copy of Judge McNiff's Sept. 16, 2011
Opinion is available at http://is.gd/tTw4cRfrom Leagle.com.
BBB Acquisition, LLC, in Cincinnati, Ohio, is the developer of the
Bar-B-Ranch in Teton County, Wyoming. The residential development
consists of 16 parcels, each in excess of 35 acres in size,
located adjacent to the Snake River. The Debtor filed for
Chapter 11 bankruptcy (Bankr. D. Wyo. Case No. 10-21002) on
Aug. 24, 2010, represented by Brent R. Cohen, Esq. --
bcohen@rothgerber.com -- and Chad S. Caby, Esq. --
ccaby@rothgerber.com -- at Rothgerber Johnson & Lyons LLP, in
Denver, Colorado. The Debtor disclosed $57,239,218 in assets and
$35,613,501 in liabilities.
BEAR STEARNS: Execs. Cioffi & Tannin to Face Trial in February
--------------------------------------------------------------
Ralph Cioffi and Matthew Tannin, former hedge fund managers at
Bear Stearns, will face trial on February 13, 2012, Bloomberg
News reports.
The trial date was set by Judge Frederic Block of the U.S.
District Court for the Eastern District of New York.
The U.S. Attorney's Office and the U.S. Securities and Exchange
Commission previously asserted charges of conspiracy to defraud
investors, manipulative and deceptive devices, and fraud by wire
against Messrs. Cioffi and Tannin.
In November 2009, a jury found Messrs. Cioffi and Tannin not
guilty of conspiracy and securities and wire fraud.
Mr. Cioffi served as former senior portfolio manager and founder
of the Funds and Mr. Tannin served as former portfolio manager of
the Funds.
The Funds, which invested heavily in collateralized debt
obligations backed by U.S. subprime mortgage market, collapsed in
June 2007, causing investors losses of about $1,800,000,000.
"We have had no discussions of substance," Bloomberg quotes a
statement made by John D. Worland, Esq., a lawyer for the SEC, to
Judge Block when the judge asked about the possibility of a
settlement, which would make a trial unnecessary.
About Bear Stearns
New York City-based The Bear Stearns Companies Inc. (NYSE: BSC)
-- http://www.bearstearns.com/-- was a financial services firm
serving governments, corporations, institutions and individuals
worldwide. The investment bank collapsed in 2008 and was sold in
a distressed sale to JPMorgan Chase in a transaction backed by the
U.S. government.
Grand Cayman, Cayman Islands-based Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund Ltd.
and Bear Stearns High-Grade Structured Credit Strategies Master
Fund Ltd. were open-ended investment companies, which sought high
income and capital appreciation relative to the London Interbank
Offered Rate, and designed for long-term investors. On July 30,
2007, the Funds filed winding up petitions under the Companies Law
of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen
Beighton at KPMG were appointed joint liquidators. The joint
liquidators filed for Chapter 15 petitions before the U.S.
Bankruptcy Court for the Southern District of New York the next
day. On August 30, 2007, the Honorable Burton R. Lifland denied
the Funds protection under Chapter 15 of the Bankruptcy Code.
(Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
BEAR STEARNS: Discovery Ongoing in Securities Suit
--------------------------------------------------
Discovery is ongoing in a joined securities class action lawsuit
filed by Bear Stearns shareholders, according to JPMorgan Chase &
Co.'s Company's August 5, 2011 Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended
June 30, 2011.
Various shareholders of Bear Stearns have commenced purported
class actions against Bear Stearns and certain of its former
officers and directors on behalf of all persons who purchased or
otherwise acquired common stock of Bear Stearns between
December 14, 2006, and March 14, 2008. During the Class Period,
Bear Stearns had between 115 million and 120 million common
shares outstanding, and the price per share of those securities
declined from a high of $172.61 to a low of $30 at the end of the
period. The actions, originally commenced in several federal
courts, allege that the defendants issued materially false and
misleading statements regarding Bear Stearns' business and
financial results and that, as a result of those false
statements, Bear Stearns' common stock traded at artificially
inflated prices during the Class Period. Separately, several
individual shareholders of Bear Stearns have commenced or
threatened to commence arbitration proceedings and lawsuits
asserting claims similar to those in the putative class actions.
Certain of these matters have been dismissed or settled. In
addition, Bear Stearns and certain of its former officers and
directors have also been named as defendants in a number of
purported class actions commenced in the United States District
Court for the Southern District of New York seeking to represent
the interests of participants in the Bear Stearns Employee Stock
Ownership Plan during the time period of December 2006 to March
2008. These actions, brought under the Employee Retirement
Income Security Act, allege that defendants breached their
fiduciary duties to plaintiffs and to the other participants and
beneficiaries of the ESOP by (a) failing to manage prudently the
ESOP's investment in Bear Stearns securities; (b) failing to
communicate fully and accurately about the risks of the ESOP's
investment in Bear Stearns stock; (c) failing to avoid or address
alleged conflicts of interest; and (d) failing to monitor those
who managed and administered the ESOP.
Bear Stearns, former members of Bear Stearns' Board of Directors
and certain of Bear Stearns' former executive officers have also
been named as defendants in a shareholder derivative and class
action suit which is pending in the United States District Court
for the Southern District of New York. Plaintiffs assert claims
for breach of fiduciary duty, violations of federal securities
laws, waste of corporate assets and gross mismanagement, unjust
enrichment, abuse of control and indemnification and contribution
in connection with the losses sustained by Bear Stearns as a
result of its purchases of subprime loans and certain repurchases
of its own common stock. Certain individual defendants are also
alleged to have sold their holdings of Bear Stearns common stock
while in possession of material nonpublic information.
Plaintiffs seek compensatory damages in an unspecified amount.
All of the actions filed in federal courts were ordered
transferred and joined for pre-trial purposes before the United
States District Court for the Southern District of New York.
Defendants moved to dismiss the purported securities class
action, the shareholders' derivative action and the ERISA action.
In January 2011, District Court Judge Robert Sweet granted the
motions to dismiss the derivative and ERISA actions, and denied
the motion as to the securities action. Plaintiffs in the
derivative action have filed a motion for reconsideration of the
dismissal as well as an appeal. Plaintiffs in the ESOP action
have filed a motion to alter the judgment and for leave to amend
their amended consolidated complaint. Discovery is ongoing in
the securities action.
Judge Revives ERISA Claims
In January this year, Judge Sweet threw out the ERISA and
derivative claims against Bear Stearns Companies, though he
allowed securities claims in the mammoth case to move forward.
Now the ERISA plaintiffs and their lawyers at Keller Rohrbach and
Kessler Topaz Meltzer & Check get to keep pressing their claims
as well, David Bario at the American Lawyer reported on Sept. 14.
In an opinion dated September 13, Judge Sweet granted the motion
for reconsideration filed by Aaron Howard and Shelden Greenberg
and granted them leave to file a second amended consolidated
complaint.
Messrs. Howard and Greenberg have moved for reconsideration of
the Court's January 19, 2011 Opinion, which dismissed their
amended consolidated complaint. The Plaintiffs seek an amendment
of the Opinion to provide that the dismissal of the ACC was
without prejudice, and they sought leave to file a second amended
consolidated complaint under Rule 15(a) of the Federal Rules of
Civil Procedure.
Judge Sweet noted that the Plaintiffs point to several factors
militating in support of dismissal without prejudice: the ACC
represents the first consolidated complaint in this case;
significant evidence about the collapse of Bear Stearns has
recently come to light; Plaintiffs have not acted in bad faith;
and the Defendants will not be greatly prejudiced by amendment of
the ACC at this stage.
The Court's strong preference for allowing the amendment of
dismissed complaints and the circumstances of Plaintiffs' case,
particularly ACC's status as the first consolidated complaint and
the revelation of new evidence, lead to the conclusion that
justice requires the Court to grant Plaintiffs' request for
dismissal without prejudice, Judge Sweet held.
In a separate opinion, Judge Sweet denied the motion for
reconsideration of the January 2011 Opinion filed by Samuel Cohen
holding that Mr. Cohen:
1. failed to establish that he fits within the fraud exception
to the continuous ownership rule; and
2. failed to establish harm to JPMorgan Chase & Co. and demand
futility with regard to JPMorgan's board.
Judge Sweet pointed out that the fraud exception to the
continuous ownership rule was established in Lewis v. Anderson,
477 A.2d 1040 (Del. 1984), and provides that a shareholder may
maintain his post-merger suit "if the merger itself is the
subject of a claim of fraud, being perpetrated merely to deprive
stockholders of the standing to bring a derivative action." Id.
at 1049. This exception, Judge Sweet held, is narrow, and found
that Plaintiff has failed to sufficiently allege that the merger
between Bear Stearns Companies, Inc., and JPMorgan was under
taken merely to deprive shareholders of a derivative suit. The
Court also noted that Mr. Cohen failed to "explain why the
Federal Reserve would participate in a fraudulent sale."
Judge Sweet also ruled that even if he considers Mr. Cohen's
argument that JPMorgan's board was complicit in Bear Stearns'
alleged fraud, Mr. Cohen does not sufficiently allege in his
complaint that JPMorgan's Board engaged in any wrong doing.
Samuel T. Cohen is represented by:
David A.P. Brower, Esq.
Elizabeth Ann Schmid, Esq.
BROWER PIVEN
488 Madison Avenue
New York, NY 10022
Tel: (212) 594-5300
Fax: (212) 501-0300
E-mail: brower@browerpiven.com
schmid.e@wssllp.com
-- and --
Jeffrey Paul Fink, Esq.
ROBBINS UMEDA, LLP
600 "B" Street
Suite 1900
San Diego, CA 92101
Tel: (619) 525-3990
Fax: (619) 525-3991
E-mail: notice@ruflaw.com
About Bear Stearns
New York City-based The Bear Stearns Companies Inc. (NYSE: BSC)
-- http://www.bearstearns.com/-- was a financial services firm
serving governments, corporations, institutions and individuals
worldwide. The investment bank collapsed in 2008 and was sold in
a distressed sale to JPMorgan Chase in a transaction backed by the
U.S. government.
Grand Cayman, Cayman Islands-based Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund Ltd.
and Bear Stearns High-Grade Structured Credit Strategies Master
Fund Ltd. were open-ended investment companies, which sought high
income and capital appreciation relative to the London Interbank
Offered Rate, and designed for long-term investors. On July 30,
2007, the Funds filed winding up petitions under the Companies Law
of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen
Beighton at KPMG were appointed joint liquidators. The joint
liquidators filed for Chapter 15 petitions before the U.S.
Bankruptcy Court for the Southern District of New York the next
day. On August 30, 2007, the Honorable Burton R. Lifland denied
the Funds protection under Chapter 15 of the Bankruptcy Code.
(Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
BEAR STEARNS: Wells Fargo Sues EMC for Refusal of Repurchase
------------------------------------------------------------
Wells Fargo & Co., the trustee for a mortgage portfolio, sued
JPMorgan Chase & Co.'s EMC Mortgage unit for refusing to buy back
more than 800 defective home loans, Elizabeth Amon at Bloomberg
News reported on September 16.
EMC rejected "repeated repurchase demands" for the loans in the
Bear Stearns Mortgage Funding Trust 2007-AR2, San Francisco-based
Wells Fargo said in a public version of the complaint filed Sept.
14 in Delaware Chancery Court in Wilmington, Ms. Amon related.
The case was initially filed under seal, she added.
"The loans have been plagued by an alarming rate of defaults and
foreclosures," Wells Fargo said in the complaint. "Approximately
three-quarters of the loans in the trust have been modified or
liquidated, or are now seriously delinquent."
The complaint is the second Wells Fargo has filed as trustee
against EMC, Bloomberg noted. The trustee settled a suit brought
in January after EMC agreed to turn over files for more than
2,000 underlying mortgages in the trust.
A review of 948 loan files revealed that at least 840, or about
89 percent, failed to comply with EMC's representations and
warranties, according to the complaint, the report related.
The case is Bear Stearns Mortgage Funding Trust 2007-AR2 by Wells
Fargo Bank NA as Trustee v. EMC Mortgage LLC, CA6861, Delaware
Chancery Court (Wilmington).
About Bear Stearns
New York City-based The Bear Stearns Companies Inc. (NYSE: BSC)
-- http://www.bearstearns.com/-- was a financial services firm
serving governments, corporations, institutions and individuals
worldwide. The investment bank collapsed in 2008 and was sold in
a distressed sale to JPMorgan Chase in a transaction backed by the
U.S. government.
Grand Cayman, Cayman Islands-based Bear Stearns High-Grade
Structured Credit Strategies Enhanced Leverage Master Fund Ltd.
and Bear Stearns High-Grade Structured Credit Strategies Master
Fund Ltd. were open-ended investment companies, which sought high
income and capital appreciation relative to the London Interbank
Offered Rate, and designed for long-term investors. On July 30,
2007, the Funds filed winding up petitions under the Companies Law
of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen
Beighton at KPMG were appointed joint liquidators. The joint
liquidators filed for Chapter 15 petitions before the U.S.
Bankruptcy Court for the Southern District of New York the next
day. On August 30, 2007, the Honorable Burton R. Lifland denied
the Funds protection under Chapter 15 of the Bankruptcy Code.
(Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).
BERNARD L. MADOFF: Dist. Judge to Rule on Right to Sue Customers
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. District Judge Jed Rakoff ruled that he, rather
than the bankruptcy judge, will initially decide whether the
trustee for Bernard L. Madoff Investment Securities Inc. has the
right to sue customers for recovery of so-called fictitious
profits. On July 29, a customer named James Greiff argued that
Judge Rakoff should take a lawsuit away from the bankruptcy court
where Irving Picard, the Madoff trustee, sued him like hundreds of
other customers for taking more cash out of the Madoff firm than
they put in. Judge Rakoff said in a one-page order Sept. 16 that
he would make initial decisions on two issues.
According to the report, Judge Rakoff told Mr. Greiff and the
Madoff trustee to write briefs on two subjects. First, do the
profits shown on account statements represent valid debt to
counter a fraudulent transfer claim? Second, Judge Rakoff wants
the parties to explain whether a provision in bankruptcy law known
as the safe harbor bars suits because they stem from trades in
securities. Judge Rakoff said he will later file a written
opinion giving reasons for his ruling in detail.
Mr. Rochelle adds that Judge Rakoff will revisit the same issues
that were decided in a 26-page opinion on Aug. 31 by U.S. District
Judge Kimba M. Wood, another federal district judge in Manhattan
who made a ruling involving a different Madoff customer. Judge
Wood ruled that the trustee is using valid theories to recover
money customers took out of the Ponzi scheme before the fraud was
discovered. Judge Wood ruled that U.S. Bankruptcy Judge Burton L.
Lifland was correct last year when he found that $34 million in
claims made by Picard against the Ariel and Gabriel funds
controlled by Ezra Merkin withstand attack at the early stages of
a lawsuit. On one of the issues Judge Rakoff said he will decide,
Judge Wood ruled for the Madoff trustee in saying that a defrauded
customer's claim against the broker didn't constitute "value" to
offset a fraud claim.
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: Investor Wins Bid to Remove $3BB Clawback Suit
-----------------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that U.S. District
Judge Jed S. Rakoff on Friday granted a Bernard L. Madoff
Investment Securities Inc. investor's request to remove a
$2.8 billion clawback motion out of bankruptcy court to address
whether the Madoff trustee has the authority to bring the suit.
Law360 relates that Judge Rakoff granted James Greiff's motion to
withdraw the bankruptcy reference from the adversary proceeding in
order to determine whether trustee Irving Picard can use the
avoidance provisions of the Bankruptcy Code to seek transfers
BLMIS made.
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.
BLACK CROW: Could Emerge From Chapter 11 in a Few Months
--------------------------------------------------------
The Dayton Beach News-Journal reports that Black Crow Media LLC
could emerge from Chapter 11 bankruptcy protection in a few months
after reaching a settlement with its biggest creditor.
According to the report, Black Crow settled for $20 million with
GE Capital Credit Corp. at the end of August following the
purchase of that loan by Georgia businessman and broadcaster Paul
Stone. Daytona Beach-based Black Crow settled with its other
creditors for $200,000, CEO Mike Linn said.
The report says Mr. Stone is now Black Crow's majority owner, but
the company will remain distinct from his other businesses and its
management will remain the same. Mr. Linn said he will have a
20 percent share in the equity of the new company.
About Black Crow
Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and
operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak,
Valdosta, Huntsville, Alabama, and Jackson, Tennessee.
Black Crow filed for Chapter 11 protection two days before a
hearing in U.S. district court where GECC was seeking appointment
of a receiver following default on term loans and a revolving
credit.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 10-00172) on Jan. 11, 2010. The Company's
affiliates -- Black Crow Media, LLC, et al. -- also filed separate
Chapter 11 petitions.
H. Jason Gold, Esq., Valerie P. Morrison, Esq., and Dylan G.
Trache, Esq., at Wiley Rein LLP, in McLean, Virginia, serve as the
Debtors' counsel. Mariane L. Dorris, Esq., and R. Scott Shuker,
Esq., at Latham, Shuker, Eden & Beaudine, LLP, have been tapped as
co-counsel. Protiviti Inc. is the Debtors' financial advisor.
Epiq Bankruptcy Solutions, LLC, is the claims and notice agent.
Brian G. Rich, Esq., and Douglas Bates, Esq., at Berger Singerman,
P.A., represent the Official Committee of Unsecured Creditors.
Black Crow disclosed $14,661,198 in assets and $48,830,319 in
Liabilities as of the Chapter 11 filing.
BORDERS GROUP: To Sell Intellectual Property Assets for $15.75MM
----------------------------------------------------------------
Hilco Streambank disclosed on September 15, 2011, that the
auction for the intellectual property assets of Borders Group,
Inc. and its debtor affiliates, which was held on September 14,
2011, resulted in the sale of various IP assets for $15,775,000.
Multiple bidders, including Barnes & Noble and Berjaya Books,
each acquired specific assets, which included a global portfolio
of trademarks, the Borders, Waldenbooks and Brentano's trade
names, Internet domain names, and the Borders.com e-commerce
Web site, according to Hilco.
Ten bidders participated in the robust proceedings, including
booksellers, major publishing companies and internet only
retailers. The auction included more than 50 rounds of bidding
before the winning bidders emerged.
"We are very pleased with the successful auction. The
participants clearly recognized the significant strategic value
in the Borders name and other assets linked to the Borders
customer base, and the Borders estate benefited as a result,"
said Holly Etlin, Borders Group CEO.
A separate sale process for Borders Group's Class B legacy IPV4
addresses is underway. Interested parties may contact Hilco
Streambank and ask for Kirstin DiCecca at 781-444-4940.
Hilco Streambank did not specify which IP assets of Borders rival
Barnes & Noble acquired. The information will be available after
the court presiding over Borders' bankruptcy approves the sale,
and it becomes part of the public record, Hilco Executive Vice
President Richard Kaye said in an e-mail to The Detroit News.
In a separate article, www.AnnArbor.com noted that the Borders
Web site and brand were considered valuable assets. The report
stated that although online sales accounted for only about 3% of
Borders' revenue when the company filed for bankruptcy, the
company's site gets millions of visitors per month. The list of
Borders Rewards customers could be a new customer base for
another bookseller, added Paul Magy, Esq. -- PBK@KOMPC.com -- of
Kupelian, Ormond and Magy P.C., in Southfield, Michigan, The
Detroit News cited.
Hilco Streambank is the intellectual property valuation and
disposition arm of Hilco Trading, LLC.
Counsel to the Debtors, David M. Friedman, Esq., at Kasowitz,
Benson, Torres & Friedman LLP, notified Judge Martin Glenn of the
U.S. Bankruptcy for the Southern District of New York of the
results of the Auction in a notice dated September 15, 2011.
The Winning Bidders and the Assets proposed to be acquired are:
Winning Bidder Assets to be Acquired Bid Amount
-------------- --------------------- -----------
Barnes & Noble, Inc. IP assets, subject to $13,900,000
certain exclusions
and licenses
Pearson Australia License to Marks for $450,000
Group Pty Ltd. Australia & New Zealand
Popular Holdings License to Marks for $100,000
Limited Singapore
Berjaya Books SDN License to Marks for $825,000
BHD Malaysia
Al Maya License to Marks for $500,000
International Ltd. certain Persian Gulf
Countries, including
the United Arab
Emirates
Prior to the Auction, the Debtors chose a $3.5 million bid by PC
Mall as the stalking horse bidder, and agreed, with the consent
and support of the Official Committee of Unsecured Creditors, to
seek approval at the Sale Hearing of a $150,000 payment as a
break-up fee in lieu of the expense reimbursement of up to
$250,000 approved in the IP Assets Bidding Procedures Order.
The Debtors also informed the Court that they may seek to reject
or terminate these licenses:
-- Brand License Agreement among Borders, Inc. (successor by
merger to Borders Properties, Inc.), Borders (UK) Limited
and Borders Books Ireland Limited;
-- Brand License Deed between Borders, Inc. (successor by
merger to Borders Properties Inc.) and Spine NewCo Pty
Ltd.;
-- Area Development and Operation Agreement between Borders
International Services, Inc. and Al Maya International Ltd.
(FZC); and
-- Area Development and Operation Agreement between Borders
International Services, Inc. and Berjaya Books SDN BHD.
The Debtors clarify that they will not be seeking the assignment
of any contracts to the Winning Bidders pursuant to section 365
of the Bankruptcy Code.
The Court adjourned the hearing to consider approval of the
Winning Bid and application documentation for the sale of the IP
Assets from Sept. 20, 2011 to Sept. 22, 2011.
Plaza Las Americas Objects to Lease Auction
Plaza Las Americas, Inc., alleges that the auction of the Second
Round Leases, including a shopping center retail lease, violated
the Lease Bidding Procedures.
Counsel to Plaza Las Americas, Barbra R. Palin, Esq., at Holland
& Knight LLP, in New York -- barbra.parlin@hklaw.com -- contends
that despite repeated requests for information and clear
indications that the landlord would not waive the restrictions in
the PLA Lease, the Debtors permitted unqualified Bidders to
participate in the Auction and bid up the price for the PLA Lease
in an attempt to force the landlord to pay an exorbitant amount
to purchase the PLA Lease and maintain control of the Leased
Premises. The Debtors should not be permitted to thwart the
clear terms of the Lease Bidding Procedures and the protections
of Section 365(b)(3) of the Bankruptcy Code, nor should the Court
permit the Debtors to benefit from the inequitable conduct, he
stresses.
Accordingly, Plaza Las Americas asks the Court to:
(a) find that it was the sole "Qualified Bidder" for the PLA
Lease;
(b) set aside the Auction conducted on September 13, 2011, on
the grounds that Plaza Las Americas' forced overbids
against the unqualified Bidders at the Auction were
wrongfully coerced by the Debtors;
(c) direct the sale of the PLA Lease for the price set forth
in Plaza Las Americas' opening Bid;
(d) award it costs and fees associated with the Auction and
its objection.
The Court rescheduled a hearing to consider the sale of the
Second Round Leases from Sept. 20, 2011, to Sept. 22, 2011.
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 its remaining 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.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000
BORDERS GROUP: Remaining Stores to Close This Month
---------------------------------------------------
The Borders storewide going-out-of-business sale is entering its
final days at all 359 remaining locations, according to the
consortium in charge of liquidating the Debtors' stores on
September 9, 2011. All stores will close by mid-September 2011.
Over $100 million of inventory, including books, puzzles/games,
activity sets, stationery, magazines, music and movie media,
calendars, posters, and more is being liquidated, as well as
store fixtures, furnishings and equipment.
Discounts of at least 70% to 90% are being offered on all
merchandise at every location. Consumers will benefit from very
significant savings on the entire stock of books in every
category, including best sellers, textbooks, rare and collectible
books, and children's books. Prices have been slashed on tens of
thousands of music CDs and video DVDs, calendars, posters,
puzzles, and arts and crafts items. In addition, customers can
still buy store fixtures such as lighting, shelving and racks,
and, at select locations, cafe equipment. Consumers are reminded
that all store fixtures should be picked up before stores close.
All sales made are final.
The liquidation is being managed by a joint venture composed of
Gordon Brothers Group, LLC; Hilco Merchant Resources, LLC; Great
American Group, LLC; SB Capital Group, LLC; and Tiger Capital
Group, LLC. A spokesperson for the joint venture said, "In the
final days of this going-out-of-business sale, consumers can take
advantage of massive discounts on the remaining selection of
literature, entertainment media and much more. Every hour
counts. We strongly encourage consumers to visit their nearest
store now to take advantage of huge savings that are ending in a
matter of days."
Founded in 1903, Gordon Brothers Group --
http://www.gordonbrothers.com/-- is a global advisory,
restructuring and investment firm specializing in the retail,
consumer products, industrial and real estate sectors.
Based in Northbrook, IL, Hilco Merchant Resources --
http://www.hilcomerchantresources.com/-- provides high-yield
analytical, operational, asset monetization, capital investment
and advisory services to help retailers define and execute their
strategic initiatives.
Great American Group, LLC -- http://www.greatamerican.com/-- is
a leading provider of asset disposition solutions and valuation
and appraisal services to a wide range of retail, wholesale and
industrial clients, as well as lenders, capital providers,
private equity investors and professional service firms.
SB Capital Group, a Schottenstein affiliate, is a leader in the
field of asset recovery, rescue finance, restructuring and
strategic store closing events.
Tiger Capital Group -- http://www.tigergroupllc.com/--
specializes in the planning, promotion, and management of store-
closing events in connection with mergers, acquisitions,
downsizing, corporate divestitures and Chapter 11 proceedings.
Ann Arbor Store Also Closed
Borders Group, Inc.'s flagship store in Ann Arbor, Michigan, sold
its final remnants and closed its doors for the last time, The
Associated Press reported.
The store closed early about noon Monday as a single buyer bought
everything that's left of the flagship store, AP related.
The shut down of Borders carves a 40,000-square-foot hole at the
corner of Liberty and Maynard streets and leaves downtown Ann
Arbor without a Borders store for the first time in 40 years,
www.AnnArbor.com commented in a separate article.
Ann Arbor.com recalled that the original Borders store was
located steps away from the current location in an 800-square-
foot space on South State Street. The store then moved to a
former store along Liberty Street in the mid-1990s and stayed
there until today.
Tom and Louis Borders founded the bookstore in 1971 in Ann Arbor,
AP relayed. As of February 2011, Borders had 642 stores all over
the U.S.
Borders filed for Chapter 11 protection in February 2011 to,
among other things, shed about two-thirds of stores that it
cannot afford to keep.
After a $450-million deal with Jahm Najafi to purchase Borders
unraveled, the bookseller decided to liquidate its remaining 399
stores in July 2011.
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 its remaining 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.
Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by Borders Group Inc., the United States' second
largest bookstore chain. (http://bankrupt.com/newsstand/or
215/945-7000
BOYD GAMING: Moody's Affirms 'B2' Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed Boyd Gaming Corporation's B2
Corporate Family and Probability of Default ratings along with the
company's Caa1 senior subordinated note rating and stable rating
outlook. The ratings on Boyd's senior unsecured notes were raised
to B3 from Caa1. Boyd has an SGL-3 Speculative Grade Liquidity
rating.
Ratings affirmed and LGD assessments revised where applicable:
Corporate Family Rating at B2
Probability of Default Rating at B2
$241 million 6.75% senior subordinated notes due 2014 at Caa1 (LGD
6, to 92% from 93%)
$215 million 7.125% senior subordinated notes due 2016 at Caa1
(LGD 6, to 92% from 93%)
Ratings raised:
$500 million 9.125% senior unsecured notes due 2018 to B3 (LGD 5,
76%) from Caa1 (LGD 5, 80%)
Boyd has a 50% partnership interest in Marina District Finance
Company, Inc. ("MDFC"). MDFC is a non-recourse joint venture that
owns and operates the Borgata Hotel Casino in Atlantic City, New
Jersey and has a B2 Corporate Family Rating and stable outlook.
MDFC's ratings were not affected by this rating action. Although
the financial results of MDFC are consolidated into Boyd's
operating results, Boyd and MDFC each have their own Corporate
Family Rating which acknowledges the non-recourse nature of their
respective restricted group financing arrangements.
RATINGS RATIONALE
Boyd's B2 Corporate Family Rating reflects its wholly-owned
restricted group's (excludes MDFC results) high leverage and its
continued significant exposure to the Las Vegas Locals market
which accounts for about 37% of Boyd's property-level EBITDA pro
forma for the recent purchase of the I.P. casino ("I.P.") in
Biloxi, MS. The Las Vegas Locals market was one of the hardest hit
by the recent recession, and in Moody's view, likely to be one of
the last to fully cover. The ratings also incorporate Moody's view
that consumer gaming demand throughout the U.S., already weakened
by several years of decline, will remain challenged.
Positive rating consideration is given to Boyd's size, scale and
diversification which should help it manage through the current
market and economic challenges better than smaller, less
diversified gaming companies. Moody's also views Boyd's
acquisition of I.P. as a favorable event in that it helps
diversify the company away from the Las Vegas Locals market. Also
considered is that despite the company's revenue challenges and
high leverage -- debt/EBITDA for Boyd is likely to remain high at
above 7 times through fiscal year ended Dec. 31 2013 -- Moody's
believes limited capital expenditure plans will help the company
generate positive free cash over the next two years as well as
maintain EBITDA less CAPEX to interest at above 1.5 times.
The upgrade of Boyd's senior unsecured note rating to B3 from Caa1
reflects Moody's view that the recovery prospects for Boyd's
senior unsecured notes have improved relative to its secured debt
given the lower amount of secured debt allowed in the capital
structure as a result of the December 2010 loan amendment,
consistent with Moody's Loss-Given Default methodology.
Boyd's SGL-3 Speculative Grade Liquidity rating indicates adequate
liquidity and considers Moody's expectation that Boyd will
generate positive annual free cash flow in 2012 in the range of
$40 to $80 million as a full year of I.P.'s cash flow is included
in the company's results. Additionally, amendments to its bank
credit facility in December 2010 provided Boyd with additional
financial flexibility by extending a large portion of its maturity
profile and by delaying step down requirements related to total
leverage. However, Moody's still views Boyd's covenant cushion as
modest given that any material decline in operating results would
likely challenge the company's ability to meet the amended
leverage step-down requirement.
The stable rating outlook reflects Boyd's modestly improved credit
profile resulting from the recent EBITDA improvement in its
operating segments along with the additional flexibility afforded
by its December 2010 amendment to its bank agreement. Ratings
could be lowered if it appears that Boyd will not be able to
maintain EBITDA less CAPEX/interest above 1.5 times and
demonstrate some reduction in leverage over the next 12 to 18
months. Ratings could be also pressured if it appears the company
will violate its bank loan covenants and have difficulty obtaining
covenant relief or repaying or refinancing amounts outstanding
under the non-extended portion of its revolving credit facility
that expires in May 2012 of which $332 million is outstanding.
Ratings improvement is limited at this time given Moody's
expectation that weak gaming demand across the U.S. will continue,
and that the company's debt/EBITDA will remain above 7.0 times
through fiscal 2013 without a material improvement in the
operating environment or a leverage reducing transaction. A higher
rating would require that Boyd achieve and maintain debt/EBITDA
below 6 times.
The principal methodology used in rating Boyd was the Global
Gaming Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Boyd Gaming Corporation wholly-owns and operates gaming and
entertainment facilities located in Nevada, Mississippi, Illinois,
Louisiana, and Indiana. These entities comprise Boyd's restricted
group which is defined and governed by the debt agreements in
which Boyd is the direct obligor.
BUFFALO GULF: S&P Assigns Prelim. 'BB+' Rating to $275-Mil. Debt
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' preliminary
rating to Buffalo Gulf Coast Terminals LLC's (BGCT) $275 million
senior secured term loan B and a preliminary recovery rating of
'3'. The outlook on the preliminary ratings is stable. "Assignment
of a final rating is conditional on our receipt and review of
executed documentation and legal opinions. The final rating could
differ if any terms change materially," S&P stated.
Houston-based BGCT is an entity formed to purchase Houston Fuel
Oil Terminal Co. (HFOTCO), a crude oil and residual fuel oil
terminal facility on the Houston Ship Channel. BGCT is purchasing
HFOTCO from AL Gulf Coast Terminals LLC, a 100% owned subsidiary
of ArcLight Energy Partners Fund IV L.P. and its affiliates. BGCT
will rely solely on distributions from operating company HFOTCO to
repay its term loan. HFOTCO has $185 million in existing senior
notes, plus a $150 million revolving credit facility.
BGCT is 100% indirectly owned by Alinda Infrastructure Fund II
L.P. and Alinda Infrastructure Parallel Fund II L.P.
(collectively, Alinda Fund II). Alinda Fund II is an approximately
$4.1 billion fund, one of two closed-end institutional funds
managed by Alinda Capital Partners LLC.
Contracted storage agreements for the project with a weighted
average life of five years provide stable cash flow for the
duration of the contracts.
"In our opinion, additional contracted cash flow from anticipated
expansion projects should modestly improve consolidated debt
service coverage ratios over the debt tenor," said Standard &
Poor's credit analyst Mark Habib.
"We expect that BGCT's direct parent, Buffalo Parent Gulf Coast
Terminals LLC, will meet Standard & Poor's criteria for special-
purpose, bankruptcy-remote entities, including the provision of an
independent director and a non-consolidation opinion," S&P stated.
CAPITAL INVESTMENTS: Judge Won't Enjoin Suit vs. S. Williams
------------------------------------------------------------
Paul Brinkmann at South Florida Business Journal reports that U.S.
Bankruptcy Judge Laurel Isicoff in the bankruptcy case of Nevin
Shapiro's Capitol Investments USA declined to issue a sweeping
order barring future litigation against Naples businessman Sidney
Jack Williams, a major figure in the $900 million Ponzi scheme.
According to the report, several bar orders have been granted in
the fraud workout of Ponzi schemers Scott Rothstein and Bernard
Madoff. Mr. Williams, who funneled $115 million into Shapiro's
fraud, was prepared to pay just $300,000 to settle a lawsuit by
the trustee overseeing Capitol Investments' Chapter 11 case.
Bradley Associates Limited Partnership, South Beach Chicago, LLC,
South Beach Chicago 2008, LLC, Relianz Mortgage, Inc., and Victor
Gonzalez filed an involuntary chapter 7 petition (Bankr. S.D. Fla.
Case No. 09-36408) against Capitol Investments USA, Inc., on
Nov. 30, 2009. The Court appointed Joel L. Tabas as the trustee
on Dec. 16, 2009, and entered an order for relief on Dec. 30,
2009. As reported in the Troubled Company Reporter on July 16,
2010, a federal grand jury indicted Nevin Shapiro, former owner
and Chief Executive Officer of Capitol Investments USA Inc., for
allegedly overseeing a $880 million Ponzi scheme linked to the
Debtors' purported wholesale grocery distribution business.
CARPENTER CONTRACTORS: Crowe Horwath OK'd to Audit Financials
-------------------------------------------------------------
The Hon. Raymond B. Ray of the U.S. Bankruptcy Court for the
Southern District of Florida authorized Carpenter Contractors Of
America, Inc., doing business as R & D Thiel, et al., to extend
the scope of employment of Scott L. Spencer and Crowe Horwath,
LLP.
The Debtors will extend the scope of employment of Crowe Horwath
LLP, an accounting firm, to audit and report on the financial
statements of the CCA Deferred Savings and Profit Plan and
Carpenter Contractors of America, Inc. Employees Pension Plan and
Trust.
Additional professional services to be rendered includes, among
other things:
a) audit and report on the consolidated financial statements of
the CCA Deferred Savings and Profit Sharing Plan;
b) audit and report on the consolidated financial statements of
the Carpenter Contractors of America, Inc. Employees Pension
Plan and Trust; and
c) examine and evaluate the accounting principles used,
including the amounts and disclosures in the Debtor's
consolidated financial statements.
The Debtor related that these services were already covered under
the scope of the initial employment application and that its
filing of the motion was in abundance of caution and for full
disclosure purposes.
The Debtor also added that as a previous condition of
representation, Crowe has waived its prepetition claim of $13,755.
To the best of the Debtors knowledge, the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Carpenter Contractors
Pompano Beach, Florida-based Carpenter Contractors of America,
Inc., dba R&D Thiel, provides carpentry services to builders of
new homes primarily in Illinois and Florida. It also manufactures
building components and distributes construction materials in
Illinois, Florida, and North Carolina.
CCA Midwest Inc. provides carpentry services to builders of new
homes in Illinois. It is a wholly-owned subsidiary of Carpenter
Contractors.
Carpenter Contractors and CCA Midwest filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-42604) on
Oct. 25, 2010. Chad P. Pugatch, Esq., and Christian Savio, Esq.,
at Rice Pugatch Robinson & Schiller, P.A., in Ft. Lauderdale, Fl.,
serve as the Debtors' bankruptcy counsel. Attorneys at Shaw
Gussis Fishman Glantz Wolfson & Towbin LLC, serve as special
counsel. GlassRatner Advisory & Capital Group, LLC, led by Thomas
Santoro, is the Debtors' financial advisor, and Scott L. Spencer,
CPA and Crowe Horwath, LLP. is the Debtors' accountant for audit
work. Carpenter Contractors disclosed $42,900,573 in assets and
$25,861,652 in liabilities as of the Chapter 11 filing.
The U.S. Trustee for Region 21 notified the Court that until
further notice, he will not appoint a committee of creditors.
CARPENTER CONTRACTORS: Ehrenstein Okayed as Substitution Counsel
----------------------------------------------------------------
The Hon. Raymond B. Ray of the U.S. Bankruptcy Court for the
Southern District of Florida approved a stipulation for
substitution of counsel in the Chapter 11 cases of Carpenter's
Pension Fund of Illinois, a debtor-affiliate of Carpenter
Contractors of America, Inc., doing business as R&D Thiel.
Pursuant to the stipulation, Robert Paul Charbonneau, Esq., and
the law firm of Ehrenstein Charbonneau Calderin are substituted as
counsel of record for the fund, and D. Marcus Braswell, Jr. of the
law firm of Sugarman & Susskind, P.A., are relieved of any and all
further responsibilities to represent or act on behalf of the fund
in the matter.
All future pleadings, correspondence and documents addressed to
the fund in this action are to be sent to:
EHRENSTEIN CHARBONNEAU CALDERIN
c/o Robert Paul Charbonneau, Esq.
Counsel for the Fund
501 Brickell Key Drive, Suite 300
Miami, FL 33131
Tel: (305) 722-2002
Fax: (305) 722-2001
E-mail: rpc@ecclegal.com
About Carpenter Contractors
Pompano Beach, Florida-based Carpenter Contractors of America,
Inc., dba R&D Thiel, provides carpentry services to builders of
new homes primarily in Illinois and Florida. It also manufactures
building components and distributes construction materials in
Illinois, Florida, and North Carolina.
CCA Midwest Inc. provides carpentry services to builders of new
homes in Illinois. It is a wholly-owned subsidiary of Carpenter
Contractors.
Carpenter Contractors and CCA Midwest filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-42604) on
Oct. 25, 2010. Chad P. Pugatch, Esq., and Christian Savio, Esq.,
at Rice Pugatch Robinson & Schiller, P.A., in Ft. Lauderdale, Fl.,
serve as the Debtors' bankruptcy counsel. Attorneys at Shaw
Gussis Fishman Glantz Wolfson & Towbin LLC, serve as special
counsel. GlassRatner Advisory & Capital Group, LLC, led by Thomas
Santoro, is the Debtors' financial advisor, and Scott L. Spencer,
CPA and Crowe Horwath, LLP. is the Debtors' accountant for audit
work. Carpenter Contractors disclosed $42,900,573 in assets and
$25,861,652 in liabilities as of the Chapter 11 filing.
The U.S. Trustee for Region 21 notified the Court that until
further notice, he will not appoint a committee of creditors.
CENTER COURT: Court Assigns Mediator for Montecito Bank Dispute
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
assigned the dispute of Center Court Partners, LLC, with Montecito
Bank & Trust, to the Bankruptcy Mediation Program of the district.
The Court also appointed a mediator and an alternative mediator to
handle the dispute titled Center Court Partners, LLC v. Montecito
Bank & Trust:
1. Mediator:
Leslie Cohen, Esq.
LESLIE COHEN LAW
506 Santa Monica Blvd., Suite 200
Santa Monica, CA 90401
Tel: (310) 394-5900
E-mail: leslie@lesliecohenlaw.com
2. Alternate mediator:
John Graham, Esq.
JEFFER, MANGELS BUTLER & MITCHELL
1900 Avenue of the Stars, 7th Floor
Los Angeles, CA 90067
Tel: (310) 203-8080
E-mail: JAG@jmbm.com
About Center Court
Based in Agoura Hills, California, Center Court Partners LLC owns
a commercial property located at 29501 Canwood Street, Agoura
Hills, Calif. The monthly rent receipts are the Debtor's sole
source of income. The Company filed for Chapter 11 bankruptcy
protection (Bankr. C.D. Calif. Case No. 11-13715) on March 25,
2011. Judge Maureen Tighe presides over the case. Martin D.
Gross, Esq., represents the Debtor as counsel. The Debtor
estimated both assets and debts between $10 million and
$50 million as of the Chapter 11 filing.
CHRYSLER LLC: UAW Extends Contracts as Bargaining Continues
-----------------------------------------------------------
American Bankruptcy Institute reports that the United Auto Workers
union extended its contracts with General Motors Co. and Chrysler
Group LLC after the sides failed to meet a deadline to reach a new
agreement.
About Chrysler
Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles
and products. Headquartered in Auburn Hills, Michigan, Chrysler
Group LLC's product lineup features some of the world's most
recognizable vehicles, including the Chrysler 300, Jeep Wrangler
and Ram Truck. Fiat will contribute world-class technology,
platforms and powertrains for small- and medium-sized cars,
allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.
Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002). Chrysler hired Jones Day, as lead counsel;
Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory
Group LLC, and Greenhill & Co. LLC, for financial advisory
services; and Epiq Bankruptcy Solutions LLC, as its claims agent.
Chrysler has changed its corporate name to Old CarCo following its
sale to a Fiat-owned company. As of Dec. 31, 2008, Chrysler
had $39,336,000,000 in assets and $55,233,000,000 in debts.
Chrysler had $1.9 billion in cash at that time.
In connection with the bankruptcy filing, Chrysler reached an
agreement with Fiat SpA, the U.S. and Canadian governments and
other key constituents regarding a transaction under Section 363
of the Bankruptcy Code that would effect an alliance between
Chrysler and Italian automobile manufacturer Fiat. As part of the
deal, Fiat acquired a 20% equity interest in Chrysler Group.
Under the terms approved by the Bankruptcy Court, the company
formerly known as Chrysler LLC on June 10, 2009, formally sold
substantially all of its assets, without certain debts and
liabilities, to a new company that will operate as Chrysler Group
LLC.
The U.S. and Canadian governments provided Chrysler with
$4.5 billion to finance its bankruptcy case. Those loans are to
be repaid with the proceeds of the bankruptcy estate's
liquidation.
In April 2010, the Bankruptcy Court confirmed Chrysler's repayment
plan.
CLAUDIO OSORIO: Proposes to Launch New Company Under Plan
---------------------------------------------------------
The South Florida Business Journal reports that Claudio Osorio has
proposed to launch a new company in bankruptcy, with the promise
that it will generate enough cash to pay off creditors from his
former company, InnoVida Holdings.
According to the report, Mr. Osorio outlined his proposed new
company, called SPV, in a Chapter 11 plan. The plan proposes to
pay off more than $50 million owed to creditors in all of his
bankruptcy cases -- his personal case and those associated with
InnoVida.
The report says, if approved by his current creditors and the
bankruptcy court, the new company would manufacture construction
panels made from resin and fiber, the same thing InnoVida did.
The plan is already controversial. At least one creditor in the
InnoVida case -- Miami Beach businessman Christopher Korge -- was
opposed to allowing Osorio to file a plan. Mr. Korge and other
InnoVida investors have alleged that Mr. Osorio fraudulently
misappropriated their investments. And a representative of the
U.S. Trustee earlier argued against allowing the plan.
Mr. Osorio's attorney Geoffrey Aaronson said he is cautiously
optimistic that the plan can be approved. "I believe that the plan
is significantly more beneficial to the creditors than anything
they would achieve in a Chapter 7 (liquidation), and we hope that
the creditors will understand this," Mr. Aaronson said.
In court documents accompanying the plan, Mr. Osorio provides the
first public explanation for what apparently happened to some of
the money that InnoVida had reported, although the explanation is
not detailed: "Incorrect disclosures apparently were provided to
various investors regarding the amount of funds invested in Royal
Bank of Canada. This has been an issue in state court litigation
and in the bankruptcy case. The company did not properly
reconcile its accounts. Neither did the company audit the
accuracy or correctness of bank statements received. This plan
seeks to remedy this issue by paying back all creditors 100 cents
on the dollar. It is a good-faith effort to refund all
investment, whether or not the investor relied upon the incorrect
disclosures."
The report notes most of the money to fund the new company would
come from the sale of M. Osorio's or InnoVida's assets, including
$4 million from the sale of three homes owned by Mr. Osorio. But
the plan also proposes a potential $2 million loan from a Chinese
company called Green Energy Ltd.
The report relates that the plan proposes that former InnoVida
contracts would simply be picked up again: "InnoVida had contracts
for the sale of ten factories, of which four factories were built
(Miami, United Arab Emirates, Oman and Turkey). This plan
contemplates the renewal of these factory contracts with the SPV
and the sale of new factories elsewhere."
The report adds some assets and patents held by InnoVida were sold
to an affiliate of Brazilian conglomerate Inepar.
According to the plan: "This plan provides for the substantive
consolidation of all Debtors and 100% payment to all allowed
creditors...It contemplates the sale of real estate and the
formation of a new entity, the SPV. It contemplates the
distribution of cash...which will derive from the sale of real
estate, the Miami factory proceeds, other funds remaining in the
consolidated estate as of the time of entry of the confirmation
order, and the SPV enterprise. It is contemplated that the sale
of real estate alone will generate over $4 million dollars, which
will pay allowed claims under the plan. There also will be
approximately $500,000 devoted to distributions under the plan
from the Miami factory proceeds. Over a period not to exceed
five-and-a-half years, the SPV enterprise is projected to generate
sufficient funds to pay their remaining allowed claims in full."
About InnoVida and Osorio
Receiver Mark S. Meland, at Meland Russin & Budwick, PA, filed a
Chapter 11 petition for InnoVida Holdings, LLC, fdba COEG, LLC
(Bankr. S.D. Fla. Case No. 11-17702) on March 24, 2011. Separate
Chapter 11 petitions were also filed for these affiliates:
InnoVida MRD, LLC (Case No. 11-17704), InnoVida Services, Inc.
(Case No. 11-17705), and InnoVida Southeast, LLC (Case No. 11-
17706). Peter D. Russin, Esq., at Meland Russin & Budwick, P.A.,
serves as bankruptcy counsel. InnoVida Holdings has under $50,000
in assets and $10 million to $50 million in debts, according to
the petition.
Founder Claudio Eleazar and Amarilis Osorio filed a separate
Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-17075) on
March 17, 2011. Mr. Osorios is being accused of fraud and
mismanagement.
Bankruptcy Judge Robert A. Mark in Miami authorized the
appointment of Mark S. Meland as trustee for InnoVida.
Mr. Meland, who had been serving as a receiver for the business in
the wake of the allegations against Mr. Osorio, was the one who
ushered InnoVida into bankruptcy.
According to DBR, the ruling paved the way for the federal
bankruptcy watchdog assigned to the case to place Mark S. Meland
in the role. Mr. Meland, who had been serving as a receiver for
the business in the wake of the allegations against Mr. Osorio,
was the one who ushered InnoVida into bankruptcy on March 24.
CORONA 3411: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Corona 3411, LLC
8787 N. Scottsdale Road, #126
Paradise Valley, AZ 85253
Bankruptcy Case No.: 11-26510
Chapter 11 Petition Date: September 16, 2011
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: Blake D. Gunn, Esq.
LAW OFFICE OF BLAKE D. GUNN
P.O. Box 22146
Mesa, AZ 85277-2146
Tel: (480) 270-5073
E-mail: blake.gunn@gunnbankruptcyfirm.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 10 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/azb11-26510.pdf
The petition was signed by Mark Doerflein, member.
CRYSTAL CATHEDRAL: Judge to Consider Viability of Sale
------------------------------------------------------
Daily News Wire Services reports that a federal bankruptcy judge
will consider the viability of a plan to sell the Crystal
Cathedral in Garden Grove, California.
According to the report, the creditors' committee is considering
options to pay off the mega-church's approximate $50 million debt
filed a plan in August that called for the sale of Crystal
Cathedral and threatened founding pastor Robert Schuller and
family members with legal action if they try to block the sale.
The report says if the judge approves the plan, then the bids for
the property will go to the creditors for a vote in the next 30 to
45 days. The Roman Catholic Diocese of Orange appears to have the
upper hand with a $53.6-million bid to be paid in cash on closing.
The report notes Chapman University in Orange is offering to pay
$50 million. Norco-based My Father's House Church International
is also offering $50 million, but the committee called its bid
"inferior" because there is apparently not as much up-front cash
as the other bidders.
Debtor Hopes to Keep Church
Crystal Cathedral on July 31 said that its board has voted to
forego choosing a buyer of its Crystal Cathedral property, as part
of its bankruptcy reorganization plan. The church says it hopes
to raise $50 million in order to fend off the sale being pushed by
the Official Committee of Unsecured Creditors.
The church itself began the sale process by proposing a plan where
the campus would be sold to Greenlaw Partners LLC and leased back
in a $46 million transaction. Greenlaw would develop some of the
property. Chapman University made a similar $46 million proposal.
Needing a larger cathedral, the Roman Catholic Diocese of Orange
County, California, later made an offer to purchase the church and
its property for $50 million.
The judge previously approved sale procedures where bids were due
July 22 in advance of an Aug. 5 auction and a hearing on Aug. 9 to
approve the sale.
About Crystal Cathedral
Crystal Cathedral Ministries is a Southern California-based
megachurch founded by television evangelist Robert Schuller. The
church, known for its television show "The Hour of Power."
Mr. Schuller retired from his role as senior pastor of Crystal
Cathedral in 2006. His daughter Sheila Schuller Coleman has been
senior pastor since July 2009. Contributions declined 24% in
2009, in part on account of "unsettled leadership."
Crystal Cathedral filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor
disclosed $72,872,165 in assets and $48,460,826 in liabilities as
of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop
Couchot P.C. represent the Debtor.
Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the
Official Committee of Unsecured Creditors.
CULTURE MEDIUM: Posts $174,000 Net Loss in June 30 Quarter
----------------------------------------------------------
Culture Medium Holdings Corp. filed its quarterly report on Form
10-Q, reporting a net loss of $174,054 on $1.1 million of revenue
for the three months ended June 30, 2011, compared with a net loss
of $100,317 on $nil revenue for the same period last year.
The Company's balance sheet at June 30, 2011, showed $2.1 million
in total assets, $1.8 million in total liabilities, and
stockholders' equity of $333,992.
As reported in the TCR on Aug. 31, 2011, Madsen & Associates
CPA's, Inc., in Murray, Utah, expressed substantial doubt about
Culture Medium Holdings' ability to continue as a going concern,
following the Company's results for the fiscal year ended
March 31, 2011. The independent auditors noted that the Company
will need additional working capital to service its debt and for
its planned activity.
A complete text of the Form 10-Q is available for free at:
http://is.gd/1zsg0z
Las Vegas, Nev.-based Culture Medium Holdings Corp., formerly
Brand Neue Corp., was incorporated on March 15, 2007, in the State
of Nevada. The Company's original business purpose was to engage
in the business of acquisition, exploration and development of
natural resource properties. The Company has shifted its business
to concentrate on bringing innovative products to market. In the
past year it formed a subsidiary, Voyager Health Technologies
Corp., to market nutriceutical products. It began operations on
Jan. 28, 2011.
CYBRDI INC: Posts $137,900 Net Loss in Second Quarter
-----------------------------------------------------
Cybrdi, Inc., filed its quarterly report on Form 10-Q, reporting a
net loss of $137,996 on $123,419 of revenue for the three months
ended June 30, 2011, compared with a net loss of $210,386 on
$146,942 of revenue for the same period last year.
For the six months ended June 30, 2011, the Company had a net loss
of $326,695 on $237,230 of revenue, compared with a net loss of
$562,630 on $339,386 of revenue for the same period of 2010.
The Company's balance sheet at June 30, 2011, showed
$10.2 million in total assets, $5.5 million in total liabilities,
and stockholders' equity of $4.7 million.
KCCW Accountancy Corp., in Diamond Bar, Calif., expressed
substantial doubt about Cybrdi, Inc.'s ability to continue as a
going concern, following the Company's 2010 results. The
independent auditors noted that the Company has incurred recurring
losses, accumulated deficit, and working capital deficit at
Dec. 31, 2010, and 2009.
A complete text of the Form 10-Q is available for free at:
http://is.gd/0MFz3t
Cybrdi, Inc., is a holding company incorporated with 80% equity in
Chaoying Biotech, which is engaged in biotechnology manufacturing,
and research and development. Through Chaoying Biotech, Cybrdi
also controls SD Chaoying, a cultural and entertainment company,
which is also developing a casino. The Company is headquartered
in Xi'an, the capital of Shaanxi province, and a sub-provincial
city in the People's Republic of China.
DALLAS STARS: Likely Bidding War May Push Price Tag
---------------------------------------------------
Eric Morath, writing for Dow Jones' Daily Bankruptcy Review,
reports that Chuck Greenberg, who doggedly pursued the Texas
Rangers baseball team through a bankruptcy-court auction last
year, said Monday via his attorney that he is eyeing the Dallas
Stars. DBR says a bidding war between Mr. Greenberg and Stars lead
bidder Tom Gaglardi could cause the price paid for the team,
expected to be as much as $265 million even without competing
bidders, to soar.
DBR relates Mr. Gaglardi's offer, as it stands now, promises to
repay a $50 million loan from the NHL, set aside $100 million for
the lenders of current owner Tom Hicks's HSG Sports Group and pick
up the team's other outstanding debts and expenses. A source
familiar with the offer pegged that number at between $100 million
and $115 million, bringing the total bid to as much as $265
million.
DBR recounts a bidding war between Mr. Greenberg and then-partner
Nolan Ryan, against Dallas Mavericks owner Mark Cuban in a
bankruptcy-court auction for the Rangers pushed the Rangers' price
by nearly $100 million from the opening bid and sold for $593
million.
DBR says if a similar scenario played out for the Stars, the team
could fetch upwards of $300 million.
Dallas Stars, L.P., Dallas Arena LLC, Dallas Stars U.S. Holdings
Corp., and StarCenters LLC filed for Chapter 11 to effectuate a
sale, through a competitive auction process, of substantially all
of the assets of the Debtors, including (i) the professional ice
hockey team that is a member of the National Hockey League and is
known as "the Dallas Stars"; (ii) their interests in ice arenas
and related assets located in the Dallas-Fort Worth metroplex
known as the "Dr Pepper StarCenters"; and (iii) all of the
ownership interests held by Dallas Arena in and to Center
Operating Company, L.P. and Center GP, LLC, which own the leases
and agreements related to the American Airlines Center, the arena
where the NHL Stars play their home games.
The Debtors said the purpose of the Sale is to allow for a
transition in ownership of the Stars, while ensuring that the team
continues to play professional ice hockey at the AAC in Dallas.
Before filing for bankruptcy, the Debtors engaged in a lengthy
marketing process and substantial discussions, which involved
input from the NHL and certain of the Debtors' senior secured
lenders. The Debtors finalized an asset purchase agreement with
Mr. Gaglardi's Dallas Sports & Entertainment, LP and certain of
its affiliates. The deal is subject to NHL approval and underpins
a prepackaged plan of reorganization that the Debtors filed
together with their petitions.
The Debtors intend to proceed according to this timeline:
Commencement of Solicitation September 1, 2011
Voting Deadline September 13, 2011
Chapter 11 Commencement Date September 15, 2011
Mailing of Bidding Procedures/
Scheduling Hearing Notice September 16, 20113
Hearing to Consider Bidding
Procedures and to Determine
Confirmation Schedule September 22, 2011
Mailing of Summary and Notice September 26, 2011
Bid Deadline October 22, 2011
Sale Objection Deadline October 25, 2011
Reply Date (if any) October 31, 2011
Auction Date November 21, 2011
Combined Hearing November 23, 2011
The Debtors are asking the Bankruptcy Court to approve bidding
procedures as well as sale- and Plan-related schedules.
The Debtors propose to pay Mr. Gaglardi's firm a $4 million
breakup fee -- representing 1.5% of the transaction value under
the Stalking Horse Asset Purchase Agreement -- and an Expense
Reimbursement in an amount not to exceed $500,000 in the event the
Debtors close a deal with another buyer.
Rival bidders are required to make a $15 million good faith
deposit.
About Dallas Stars
Frisco, Texas-based Dallas Stars, L.P. -- http://stars.nhl.com/--
operates as a professional men's ice hockey team. The company was
formerly known as Minnesota North Stars and changed its name to
Dallas Stars, L.P. in 1993.
Dallas Stars and three affiliates filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case Nos. 11-12935 to 11-12938) on Sept. 15, 2011.
The affiliates are Dallas Arena LLC, Dallas Stars U.S. Holdings
Corporation, and StarCenters LLC. Judge Peter J. Walsh presides
over the cases. Martin A. Sosland, Esq., and Ronit J. Berkovich,
Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel
to the Debtors. John H. Knight, Esq., at Richards Layton &
Finger, P.A., serves as the Debtors' Delaware counsel. Garden
City Group serves as the Debtors' claims agent. In its petition,
the Debtors estimated $100 million to $500 million in assets and
debts. The petitions were signed by Robert L. Hutson, chief
financial officer.
The team is owned by Dallas businessman Thomas O. Hicks' HSG
Sports Group. Mr. Hicks was the former owner of the Texas
Rangers. The Texas Rangers were sold in a bankruptcy court-
supervised auction to a group led by Hall of Fame pitcher Nolan
Ryan for $593 million.
The Stars are the second NHL team to file for bankruptcy since
2009, after the Phoenix Coyotes.
DELPHI CORP: DPH Holdings Wants Plan Injunction on Averbukhs
------------------------------------------------------------
DPH Holdings Corp. and its debtor affiliates ask Judge Robert D.
Drain of the U.S. Bankruptcy Court for the Southern District of
New York to enforce the June 16, 2009 order approving
modifications to the First Amended Plan of Reorganization, the
Modified First Amended Joint Plan of Reorganization and its
July 30, 2009 confirmation order, and the order on the 47th
Omnibus Claims Objection in order to permanently enjoin the
estate of Boris Averbukh from pursuing a Maryland state court
action.
In September 2009, after the Administrative Claim Bar Date had
lapsed, an administrative expense claim request was submitted
under the name of Alla Averbukh for damages relating to the
injuries arising out of the death of her husband, Boris Averbukh.
In November 2009, Mr. Averbukh's two sons, Vladimir and
Aleksandr, and Ms. Averbukh commenced an action in the Circuit
Court for Prince George's County, Maryland, against Delphi
Corporation and Delphi Automotive Systems LLC for the alleged
wrongful death of Boris Averbukh.
In April 2010, under their 47th Omnibus Claims Objection, the
Reorganized Debtors asserted that they have no liability to the
Averbukh Claim as per their books and records. In May 2010, the
Bankruptcy Court expunged the Claim. The Averbukhs, however,
have continued to prosecute their wrongful death claim in the
Maryland Court.
Cynthia J. Haffey, Esq., at Butzel Long, in Detroit, Michigan,
argues that the Maryland Action should be dismissed because the
Bankruptcy Court already held that it is barred in the Averbukh
Claim Expungement Order. She explains that under Maryland law,
only a single wrongful death claim can be brought, and it is
brought on behalf of all beneficiaries. In this case, both the
expunged Claim and the Maryland Action assert claims for injuries
as well as for wrongful death, she stresses. Against this
backdrop, the Maryland Action is barred by the Averbukh Claim
Expungement Order and the July 30 Confirmation Order, and the
maintenance of the Maryland Action violates the injunction
contained in the July 30 Confirmation Order, Ms. Haffey insists.
Notwithstanding the fact that the wrongful death claim accrued on
April 7, 2007, and was a claim within the definition of Section
101(5) of the Bankruptcy Code and thus covered by the June 16
Modification Procedures Order, the Averbukhs did not file an
administrative expense claim form by the Administrative Claim Bar
Date, Ms. Haffey points out. She avers that by operation of the
June 16 Modification Procedures Order, the Claim became forever
barred, thereby estopping and enjoing the Averbukhs from
asserting the Claim against the Reorganized Debtors or their
property.
Ms. Haffey further contends that the effect of the Reorganized
Debtors' discharge under the July 30 Confirmation Order is set
forth in Section 524(a) of the Bankruptcy Code, under which that
discharge operates as a permanent injunction against the
commencement or continuation of any action to recover discharged
claims against the Reorganized Debtors. She avers that the pre-
confirmation claims against the Debtors held by the Averbukhs
were discharged. Indeed, the Averbukhs received adequate and
sufficient constructive notice of the Administrative Claim Bar
Date via publication, she states. Notwithstanding the
sufficiency of constructive notice on the Averbukhs, they would
be deemed as a matter of law to have had actual notice of the
Administrative Claim Bar Date in 2009 and of the Averbukh Claim
Expungement Order in 2010 by virtue of their representation by
The Kulhman Law Firm, which filed the Claim, she maintains.
For these reasons, the Reorganized Debtors ask the Bankruptcy
Court to direct the Averbukh plaintiffs to dismiss the Maryland
Action against the Debtors to recover on claims that have been
barred, discharged, and expunged in their Chapter 11 cases.
The Bankruptcy Court will consider the Reorganized Debtors'
request on September 22, 2011. Objections are due no later than
September 15.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- was a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization
became effective. A Master Disposition Agreement executed among
Delphi Corporation, Motors Liquidation Company, General Motors
Company, GM Components Holdings LLC, and DIP Holdco 3, LLC,
divides Delphi's business among three separate parties -- DPH
Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000
DELPHI CORP: DPH Wants Injunction Against Metaldyne Estate
----------------------------------------------------------
DPH Holdings Corp. and its debtor affiliates ask Judge Robert
Drain to permanently enjoin the trustee for The Oldco M
Distribution Trust from pursuing an adversary proceeding by
enforcing the June 16, 2009 Modification Procedures Order, the
Modified First Amended Joint Plan of Reorganization, and its
related July 30, 2009 confirmation order.
The trust is the successor-in-interest to certain assets and
claims of Metaldyne Corporation and certain of its affiliates,
former Chapter 11 debtors, whose cases were presided over by
Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern
District of New York.
In May 2011, almost two years after the Administrative Bar Claim
Date, the Oldco Trustee filed an adversary proceeding in the
Metaldyne Bankruptcy against Delphi Automotive Systems, LLC, to
recover $199,134 of preference payments Metaldyne allegedly made
to DAS in May 2009.
Despite receiving actual notice of the July 15, 2009
Administrative Claim Bar Date, Metaldyne did not file proof of an
administrative expense claim to preserve its preference claim in
Delphi's Chapter 11 cases, Thomas B. Radom, Esq., at Butzel Long,
in Bloomfields, Michigan -- radom@butzel.com -- asserts. As
indicated in an affidavit of service, on or before June 20, 2009,
Reorganized Delphi mailed notice of the Administrative Claims Bar
Date Notice to Metaldyne at several locations, including two
separate locations for its attorneys of record, he discloses.
Accordingly, Reorganized Delphi provided more than adequate
notice under the law, and the Oldco Trustee cannot credibly claim
that Metaldyne did not receive actual notice of the
Administrative Claim Bar Date, he asserts.
Moreover, the Oldco Trustee's preference claims were claims under
the June 16 Modification Procedures Order and the Bankruptcy
Code, Mr. Radom avers. All pre-confirmation "claims" against
Reorganized Delphi held by Metaldyne were discharged, he points
out. Because the Oldco Trustee's preference claims arose before
the Administrative Claim Bar Date, and because Metaldyne had
actual notice of the Administrative Claim Bar Date, they were
required to file the preference claims as administrative expense
claims by the Administrative Claim Bar Date, or they would be
forever discharged, he states. However, Metaldyne failed to do
so and, as result, the preference claims are forever barred and
discharged by the June 16 Modification Procedures Order, and the
Oldco Trustee is estopped and enjoined from asserting those
claims against DAS, he maintains.
Accordingly, Reorganized Delphi further ask the Bankruptcy Court
to direct the Oldco Trustee to dismiss the adversary proceeding
to recover discharged claim.
The Bankruptcy Court will consider Reorganized Delphi's request
on September 22, 2011. Objections due are no later than
September 15.
In a supporting declaration, Dean R. Unrue, claims administrator
for the Reorganized Debtors, affirms that Metaldyne or any
affiliate that has the name of Metaldyne in it, did not file
proof of an administrative expense claim by the July 15, 2009
Administrative Expense Bar Date, nor is there any record of
Metaldyne or any affiliate filing proof of an administrative
expense claim after the Administrative Claim Bar in Reorganized
Delphi's Chapter 11 cases.
About Metaldyne Corp.
Metaldyne Corp. was a global designer and supplier of metal based
components, assemblies and modules for transportation related
powertrain applications including engine, transmission/transfer
case, driveline, and noise and vibration control products to the
motor vehicle industry.
Metaldyne and its affiliates filed for Chapter 11 protection on
May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did
not include the company's non-U.S. entities or operations.
Richard H. Engman, Esq., at Jones Day represented the Debtors in
their restructuring. Judy A. O'Neill, Esq., at Foley & Lardner
LLP served as conflicts counsel; Lazard Freres & Co. LLC and
AlixPartners LLP as financial advisors; and BMC Group Inc. as
claims agent. A committee of Metaldyne creditors was represented
by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed
Smith LLP, and the committee tapped Huron Consulting Services,
LLC, as its financial advisor. For the fiscal year ended
March 29, 2009, the company recorded annual revenues of
approximately US$1.32 billion. As of March 29, 2009, utilizing
book values, the Company had assets of US$977 million and
liabilities of $927 million.
Judge Glenn approved the sale of substantially all assets to
Carlyle Group in Nov. 2009 for approximately $496.5 million, and
confirmed the Debtors' liquidating chapter 11 plan on Feb. 23,
2010. Under the terms of the confirmed liquidation plan, Oldco M
Distribution Trust is the post-confirmation entity charged with
prosecuting all claim objections and distributing all plan assets
pursuant to the terms of the plan. The Trust is represented by
Kimberly E.C. Lawson, Esq., at Reed Smith LLP, in Wilmington, Del.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- was a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization
became effective. A Master Disposition Agreement executed among
Delphi Corporation, Motors Liquidation Company, General Motors
Company, GM Components Holdings LLC, and DIP Holdco 3, LLC,
divides Delphi's business among three separate parties -- DPH
Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000
DELPHI CORP: District Court Rules on DSRA Lawsuit
-------------------------------------------------
On September 2, 2011, Judge Arthur Tarnow of the U.S. District
Court for the Eastern District of Michigan issued two rulings
regarding the lawsuit being pursued by the Delphi Salaried
Retirees Association, according to a public statement dated
September 6, 2011.
The District Court ruled that the Retirees' claims against the
Pension Benefit Guaranty Corporation could proceed, and that the
case should proceed to discovery so that the Retirees could
pursue documents and other evidence related to their claim that
the Salaried Plan was improperly terminated for political
reasons. On Friday, Judge Tarnow issued a new ruling reiterating
that discovery was to proceed on all four counts against the
PBGC, and rejecting out-of-hand the PBGC's argument that the
court should limit its review of the Salaried Plan's termination
to a deferential administrative record review. The District
Court also granted the Salaried Retirees' proposed Scheduling
Order, in which the parties will have until the end of April 2012
to complete discovery. The schedule entitles the Retirees
approximately seven months to assemble evidence in the form of
documents and deposition testimony from those directly involved
in these decisions.
The judge also issued a ruling dismissing the claims against the
U.S. Department of the Treasury defendants, finding that the
Complaint, as currently stated, fails to include sufficient
factual allegations against those defendants. The District Court
noted that it felt this result was required by two recent U.S.
Supreme Court decisions emphasizing the need for fact-specific
allegations, and the District Court went so far as to note that
perhaps the claims against the Treasury Defendants would not have
been subject to dismissal had the Complaint been considered under
the law as it existed prior to the Supreme Court's recent
rulings.
Notwithstanding that the claims against the Treasury defendants
were dismissed, the District Court did not preclude the Retirees
from asking to be allowed to amend the complaint at a later time
to add additional factual allegations.
The judge also stated in his ruling: "The District Court also
anticipates that [the Retirees] will continue to utilize the
political process to pursue the relief they seek." In fact, he
specifically said "the subject of the complaint may be a matter
that is best resolved through the political process."
The Retirees will now begin to depose individuals who have direct
knowledge of the decision-making process and will demand the
documents the PBGC has worked to keep hidden. They will also
continue to work with local, state and national political figures
in the hope that a political solution can be achieved. The
Retirees are asking only to be treated in a fair and equitable
manner by their government which has either caused or allowed
taxes paid by all Americans to be used only for specific and
politically favored groups. These are decisions that the UAW
leadership has called "a grave injustice" and have also been a
matter considered in four separate hearings in the United States
Senate and the House of Representatives, most recently in June
where representatives from the Obama Administration and the PBGC
were questioned.
In letters dated August 8 to 18, 2011, to the Treasury Department
and deputy director of the PBGC, Representative Darrell E. Issa,
chairman of the Committee on Oversight and Government Reform,
renewed his requests for documents relating to the decision to
"top up" the pensions for hourly Delphi workers in the midst of
the General Motors bankruptcy and bailout while leaving salaried,
non-unionized employees with only the modified retirement plans
underwritten by the PBGC.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- was a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization
became effective. A Master Disposition Agreement executed among
Delphi Corporation, Motors Liquidation Company, General Motors
Company, GM Components Holdings LLC, and DIP Holdco 3, LLC,
divides Delphi's business among three separate parties -- DPH
Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000
DYNEGY INC: Begins Offers to Exchange up to $1.25-Bil. Sr. Notes
----------------------------------------------------------------
Dynegy Inc. commenced offers to exchange up to $1,250,000,000
principal amount of the outstanding notes, debentures and capital
income securities (the Old Notes) of Dynegy Holdings, LLC (DH),
its direct, wholly-owned subsidiary, for Dynegy's new 10% Senior
Secured Notes due 2018 (the New Notes) and cash.
Under the terms of the Exchange Offers, Old Notes that are validly
tendered (and not validly withdrawn) on or prior to 5:00 p.m., New
York City time, on Sept. 28, 2011, unless extended by Dynegy, will
receive the applicable Early Tender Payment. Holders that tender
their notes after the Early Tender Date and before midnight, New
York City time, on Oct. 13, 2011, unless extended or earlier
terminated by Dynegy, will receive consideration for their Old
Notes in the amount of the applicable Exchange Payment. Holders
may withdraw tenders of Old Notes prior to 5:00 p.m., New York
City time, on Sept. 28, 2011, unless extended by Dynegy. Holders
may not withdraw tendered Old Notes on or after the Withdrawal
Time. Participating holders of Old Notes will receive accrued and
unpaid interest in cash on their accepted Old Notes, up to, but
not including, the Settlement Date.
If more than $1,250,000,000 of Old Notes are validly tendered (and
not validly withdrawn) at the Expiration Date, Dynegy will accept
tenders of Old Notes based on the acceptance priority levels, with
level 1 being the highest priority level, subject to proration as
described more fully in the Offering Circular and the related
Letter of Transmittal, each dated Sept. 15, 2011.
Completion of the Exchange Offers is subject to the satisfaction
or waiver of a number of conditions as described in the Offering
Circular. Dynegy has the right to terminate or withdraw any of
the Exchange Offers at any time and for any reason. Dynegy has
the right to amend any of the Exchange Offers and extend the
Expiration Date, Early Tender Date or Withdrawal Date for any of
the Exchange Offers.
Dynegy has retained Credit Suisse Securities (USA) LLC to serve as
lead dealer manager, and Barclays Capital Inc., Deutsche Bank
Securities Inc., Jefferies & Company, Inc., and Lazard Capital
Markets LLC to serve as co-dealer managers and D.F. King & Co.,
Inc., to serve as the exchange agent and information agent (the
Exchange Agent and Information Agent) for the exchange offers.
Requests for documents, including the Offering Circular and Letter
of Transmittal, may be directed to D.F. King & Co., Inc., by
telephone at (212) 269-5550 (brokers and banks) or (800) 697-6975
(all others) or in writing at 48 Wall Street, 22nd Floor, New
York, New York 10005. Questions regarding the Exchange Offers may
be directed to Credit Suisse Securities (USA) LLC at (800) 820-
1653 (toll free) or (212) 538-2147 (collect).
A full-text copy of the press release is available for free at:
http://is.gd/9iUIWi
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE:DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
Failed Sale
The Troubled Company Reporter has chronicled Dynegy's attempts to
sell itself. In August 2010, Dynegy struck a deal to be acquired
by an affiliate of The Blackstone Group at $4.50 a share or
roughly $4.7 billion. That offer was raised to $5.00 a share in
November. Through Carl Icahn and investment fund Seneca's
efforts, shareholders thumbed down both offers.
In December 2010, an affiliate of Icahn commenced a tender offer
to purchase all of the outstanding shares of Dynegy common stock
for $5.50 per share in cash, or roughly $665 million in the
aggregate. In February 2011, Icahn Enterprises L.P. terminated
the proposed merger agreement with the Company after it failed to
garner the required number of shareholder votes.
Goldman, Sachs & Co. and Greenhill & Co., LLC, served as financial
advisors and Sullivan & Cromwell LLP served as legal counsel to
Dynegy on the sale efforts.
Bankruptcy Warning
Dynegy warned shareholders in March it might be forced into
bankruptcy if it is unable to renegotiate the terms of its
existing debt.
The Company's balance sheet at March 31, 2011, showed $9.82
billion in total assets, $7.15 billion in total liabilities and
$2.67 billion in total stockholders' equity.
Ernst & Young LLP, in Houston, said Dynegy projects that it is
likely that it will not be able to comply with certain debt
covenants throughout 2011. "This condition and its impact on
Dynegy Inc.'s liquidity raises substantial doubt about Dynegy
Inc.'s ability to continue as a going concern."
* * *
In July 2011, Moody's downgraded Dynegy Holdings' probability of
default rating to 'Ca' from 'Caa3'. "The downgrade of DHI's PDR
and senior unsecured notes to Ca reflects the increased likelihood
of a distressed debt exchange transaction occurring within the
next several months following announcement of a corporate
reorganization that seeks to modify asset ownership within DHI
through the formation of several wholly-owned subsidiaries", said
A.J. Sabatelle, Senior Vice President of Moody's. "Separate
financing arrangements being established at these subsidiaries
will have annual limits placed on the amount of cash flow that can
be paid to their indirect parent, which Moody's believes raises
default prospects for DHI's senior unsecured notes and the
company's lease", added Mr. Sabatelle.
EL PASO PIPELINE: Moody's Assigns 'Ba1' Rating to New Notes
-----------------------------------------------------------
Moody's Investors Service rated El Paso Pipeline Operating
Company, L.L.C.'s (EPB Operating) new notes Ba1. The notes are
fully and unconditionally guaranteed by El Paso Pipeline Partners,
L.P. (EPB). The proceeds of the new notes will be used to fully
repay the $420 million of borrowings under EPB Operating's credit
facility and for general partnership purposes. The rating outlook
is positive.
RATINGS RATIONALE
"EPB Operating's rating continues to be constrained by the overall
leverage at El Paso Corporation," said Stuart Miller, Moody's Vice
President -- Senior Analyst. "The positive outlook reflects the
potential for ratings improvement after the spin-off of EP Energy
Corporation and further debt reductions at the El Paso Corporation
(El Paso) level."
The Ba1 CFR for EPB Operating also reflects the structural
complexity of the El Paso organization and the high distribution
payout associated with the MLP structure of EPB. EPB and EPB
Operating are closely related to El Paso through El Paso's 2%
general partnership interest, its 42% limited partnership
interest, and its co-ownership of assets from time to time.
Given the connection to El Paso and the existing two notch
differential between El Paso's rating and EPB Operating's rating,
El Paso's ratings would need to move higher for EPB Operating's
ratings to be upgraded. An upgrade of El Paso could be considered
as the company finalizes the structural details of the E&P spinoff
and provides stronger visibility to achieving and maintaining a
debt to EBITDA ratio of less than 5.0x.
EPB Operating's rating could face negative pressure if its
leverage approaches 5.0x or if unit distribution growth becomes
more aggressive which may put additional pressure on EPB
Operating's cash flows and liquidity. In addition, if El Paso is
unsuccessful in executing the spin off, the outlook for El Paso
and EPB Operating could be moved back to stable.
After application of the note proceeds, EPB Operating will have
full availability under its $1 billion unsecured credit facility.
The credit facility matures in May 2016 and has a leverage
maintenance covenant of 5.0x. Moody's projects that the company
will remain in compliance with this covenant, and therefore will
have full access to its credit facility.
Under Moody's Loss Given Default (LGD) methodology, the new and
existing notes are rated the same as the CFR. The notes are ranked
pari-passu with the senior revolving credit facility, which is
also unsecured, making up the majority of the liability waterfall
under LGD.
The principal methodologies used in rating El Paso were Midstream
Energy Companies and Partnerships Industry Rating Methodology
published in September 2007, and Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
El Paso Pipeline Partners Operating Company, L.L.C. owns 86% of
Colorado Interstate Gas Company, L.L.C., and 100% of Southern
Natural Gas Company, L.L.C., Wyoming Interstate Company, L.L.C.,
El Paso Elba Express Company, L.L.C., and Southern LNG Company,
L.L.C. The company is headquartered in Houston, Texas.
ENER1 INC: Maturity Date of Bzinfin LOC Extended to July 2013
-------------------------------------------------------------
Ener1, Inc., and Bzinfin S.A., on Sept. 12, 2011, entered into an
amendment to the Line of Credit Agreement dated June 29, 2011.
Under the LOC Agreement, Bzinfin established a line of credit for
the Company in the aggregate principal amount of $15,000,000, of
which approximately $11,241,000 has been borrowed by the Company.
Under the terms of the Amendment, the maturity date for the
repayment of all advances under the LOC Agreement and all unpaid
accrued interest thereon was extended to July 2, 2013, and the
interest rate at which all outstanding advances will bear interest
from and after Sept. 12, 2011, was increased to 15% per year.
All interest accrued on the outstanding advances through and
including Sept. 12, 2011, and accruing thereafter prior to the
maturity date is payable on a quarterly basis. Bzinfin, however,
is subject to a subordination agreement, and so long as such
agreement is in effect, quarterly interest payments may only be
made in shares of our common stock to the extent requested by
Bzinfin and permitted under such subordination agreement. Stock
payments will be valued at the greater of the closing price and
book value of the Company's common stock on the trading day
immediately preceding the applicable interest payment date. If
any quarterly interest payment is not made, then those amounts
will be added to the principal of the outstanding advances and
continue to accrue interest until paid in full.
If Bzinfin elects to convert any indebtedness into the Company's
common stock in accordance with the LOC Agreement, then they will
be entitled to receive a "make-whole" premium on the amount so
converted. That is, the amount being converted will be increased
by an amount equal to the additional interest that would have
accrued on the indebtedness being converted if held through
maturity.
Finally, the Company is not permitted to draw down any additional
advances under the LOC Agreement.
Bzinfin is the sole owner of Ener1 Group, Inc., the Company's
largest shareholder. Bzinfin and Ener1 Group collectively own
approximately 41.3% of the Company's outstanding common stock and,
with warrants and convertible securities, beneficially own
approximately 51.7% of the Company's common shares on a fully
diluted basis as of Sept. 15, 2011. Bzinfin is controlled by
Boris Zingarevich, who is a director of Ener1.
About Ener1
Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- has three
business lines, which the company conducts through three operating
subsidiaries. EnerDel, an 80.5% owned subsidiary, which is 19.5%
owned by Delphi, develops Li-ion batteries, battery packs and
components such as Li-ion battery electrodes and lithium
electronic controllers for lithium battery packs. EnerFuel
develops fuel cell products and services. NanoEner develops
technologies, materials and equipment for nanomanufacturing.
ENRON CORP: Trust Settles Lawsuit Against Kenneth Lay Estate
------------------------------------------------------------
The Official Committee of Unsecured Creditors, in January 2003,
sued Kenneth Lay, former Chairman and Chief Executive Officer of
Enron Corp., and his wife Linda, to recover alleged fraudulent
transfers made to them by Enron.
The fraudulent transfers relates to certain loans made to Mr. Lay
by Enron that were repaid by him with Enron common stock prior to
Enron's bankruptcy filing and a purchase, sale and reconveyance
agreement, pursuant to which Enron agreed to purchase from the
Lays (i) variable annuity contract policy No. 002105676, and (ii)
variable annuity contract policy No. 002155712, each for $5
million.
In the Purchase Agreement, Enron agreed to re-convey the Annuity
Contracts to Mr. Lay upon either (i) his completion of a
continuous period of employment by Enron from the effective date
of the Purchase Agreement to December 31, 2005, or (ii) the
termination of his employment due to his retirement with the
consent of the majority of the members of the Board, disability,
involuntary termination other than a termination "for cause," or
departure for "good reason."
In 2010, settlement discussions between Mrs. Lay and Enron
Creditors Recovery Corp., successor-in-interest to Enron,
resumed. Mediation between the parties commenced February 2011.
In connection with the mediation, Mrs. Lay asserted, among other
things, that she is entitled to both Annuity Contracts because
Mr. Lay's departure from Enron fulfilled the conditions set forth
in the Purchase Agreement. ECRC disputed the contention. The
mediation resulted in a settlement in principle resolving the
causes of action asserted by the Committee in the Adversary
Proceeding, as well as all questions regarding the ownership of
the Annuity Contracts.
ECRC and Mrs. Lay negotiated a settlement agreement to embody the
terms of the settlement-in-principle they reached at the February
mediation. Despite extensive discussions between ECRC, Mrs. Lay
and John Hancock Life Insurance Company (U.S.A.), as issuer of
the Annuity Contracts, they have been unable to resolve the
issues raised in John Hancock's motion to amend its interpleader
motion regarding the Kenneth Lay Annuity Benefits.
Subsequently, ECRC and Linda Lay have negotiated in good faith
and wish to resolve all outstanding issues between them,
including the ownership of the Annuity Contracts and the
fraudulent transfer claims asserted in the Adversary Proceeding.
Substantively, the Settlement Agreement:
* provides that ECRC will own the Linda Lay Annuity and Linda
Lay, individually, will own the Kenneth Lay Annuity;
* provides for mutual releases between ECRC and Linda Lay,
individually and as Executrix;
* preserves John Hancock's right to litigate in another forum
the issues raised in its Motion to Amend regarding the
Kenneth Lay Annuity Benefits; and
* requires dismissal of this Adversary Proceeding and certain
other lawsuits currently pending in other courts.
The ECRC asserts that issues surrounding the Kenneth Lay Annuity
Benefits need not delay approval of the Settlement Agreement and
dismissal of this Adversary Proceeding.
Accordingly, ECRC asks the Court to approve the Settlement
Agreement.
John Hancock Objects
John Hancock argues that ECRC and Mrs. Lay seek to use a two-
party proposed settlement and Rule 9019 of the Federal Rules of
Bankruptcy Procedure to terminate a four-party adversary
proceeding and to bind John Hancock to an outcome that
circumvents the interpleader process.
James v. O'Gara, Esq., at Kelley Drye & Warren LLP, in New York,
contends that John Hancock opposes the request to approve the
Settlement Agreement because the requested relief would: (1)
terminate the entire proceeding despite the fact that John
Hancock's existing interpleader and declaratory relief claims
have not been resolved; (2) deprive John Hancock of the benefits
of interpleader by forcing it to commence a new action to resolve
issues that are already pending here; and (3) bind John Hancock
to a resolution to which it does not consent, and in which it did
not participate, with respect to a dispute which John Hancock is
entitled to have determined by an Article III court.
"Stated simply, the proposed settlement between ECRC and Lay is
not dispositive of John Hancock's request for interpleader and
declaratory relief, and the proposed order goes well beyond even
the scope of the Agreement and Release," Mr. O'Gara says.
Approval should be denied, and John Hancock should be provided
with an opportunity to litigate its interpleader and declaratory
relief claims, as well as the issues raised in its pending Motion
to Amend, Mr. O'Gara asserts.
ECRC Responds
The ECRC explains that under the terms of the Settlement
Agreement, John Hancock will obtain the relief it originally
sought in its Interpleader Complaint -- an order settling the
ownership of the Annuity Contracts.
"The Settlement Agreement unequivocally and finally settles the
ownership of the Annuity Contracts and eliminates any risk of
double liability on the part of John Hancock in connection with
either Annuity Contract," David S. Cohen, Esq., at Milbank Tweed
Hadley & McCloy LLP, in Washington, D.C. says.
John Hancock's opposition to the Settlement Agreement stems
solely from its desire to litigate ancillary issues that were
first asserted in its Motion to Amend the Interpleader Complaint,
Mr. Cohen contends. He asserts that the ancillary issues, which
have nothing to do with the subject matter of the Adversary
Proceeding and are currently not part of the Interpleader
Complaint, should not delay the resolution of the Adversary
Proceeding, which has been pending before the Court for almost a
decade and which the original parties have finally resolved.
The approval of the Settlement Agreement and the dismissal of the
Adversary Proceeding would in no way prejudice John Hancock's
right to seek any resolution of any dispute it may someday have
with Mrs. Lay, Mr. Cohen says. He explains that should the Court
approve the Settlement Agreement, the only consequence for John
Hancock would be that it would have to resolve any dispute in
some other lawsuit or forum.
Mr. Cohen points out that John Hancock concedes that the claims
could not be litigated in the Bankruptcy Court in any event. He
says that there is no reason to require ECRC to continue to
expend time and money in litigating the resolution of disputes
between John Hancock and Mrs. Lay.
Mr. Cohen also notes that none of the other parties-in-interest
in the Adversary Proceeding, including the Internal Revenue
Service and the creditors of Kenneth Lay's probate estate
objected to the relief sought therein.
Court Approves Settlement Agreement
On August 10, 2011, the Court has ruled that:
* the Agreement and Release, dated as of June 17, 2011,
between ECRC and Mrs. Lay, individually and as executrix to
the estate of Mr. Lay is approved;
* the Settling Parties are authorized and directed to execute
the Settlement Agreement and to implement all of the
transactions contemplated thereby;
* on and after the Transfer Date (i) ECRC will own that
certain variable annuity contract policy No. 002155712 and
(ii) Mrs. Lay will own that certain variable annuity
contract policy No. 002105676, in each case free from any
claims or interests of any other party, with all rights as
"Owner" of the Annuity Contracts; provided, however, that
nothing in the Settlement Agreement or the Order will be
interpreted to create any inference with respect to the
ownership of either Annuity Contract at any time prior to
the Transfer Date, or the availability of contractual
benefits which may flow from such ownership at any time
prior to the Transfer Date;
* Interpleader Plaintiff John Hancock will cooperate with the
Settling Parties and the Settling Parties will cooperate
with John Hancock to effectuate the terms of the Settlement
Agreement, including by providing or promptly completing all
forms and other documents reasonably required to be
completed to ensure that, as of the Transfer Date, (i) ECRC
is reflected on the books and records of John Hancock as the
"Owner" of the Linda Lay Annuity and (ii) Linda Lay is
reflected on the books and records of John Hancock as the
"Owner" of the Kenneth Lay Annuity;
* upon receipt of all documents and forms necessary to be
completed by the Settling Parties, Interpleader Plaintiff
John Hancock will confirm in writing to the Settling Parties
that (i) ECRC will be treated by John Hancock as the Owner
of the Linda Lay Annuity and (ii) Mrs. Lay will be treated
by John Hancock as the Owner of the Kenneth Lay Annuity;
* ECRC will give John Hancock 30 days advance notice if it
seeks modification of the Court's Order Granting Motion of
Reorganized Debtors to Amend Document Disposal Procedures
dated July 16, 2009;
* the failure to include any particular provision of the
Settlement Agreement in the Order will not diminish or
impair the effectiveness of the provision, it being the
intent of the Court that the Settlement Agreement be
approved in its entirety, and as set forth in the Order;
* the Motion to Amend Interpleader Complaint filed by John
Hancock on April 15, 2011 is deemed moot;
* upon the occurrence of the Transfer Date, the Adversary
Proceeding will be dismissed with prejudice; provided,
however, that neither the dismissal will be with prejudice
to the rights of John Hancock to initiate litigation against
Mrs. Lay, or the rights of Mrs. Lay to initiate litigation
against John Hancock, in the event there is a substantial
and immediate controversy as to the benefits owed pursuant
to the Kenneth Lay Annuity.
About Enron Corp.
Based in Houston, Texas, Enron Corporation filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001,
following controversy over accounting procedures that caused its
stock price and credit rating to drop sharply.
Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal &
Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its
bankruptcy case. The Official Committee of Unsecured Creditors in
the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP.
The Debtors won confirmation of their Plan in July 2004, and the
Plan was declared effective on Nov. 17, 2004. After approval of
the Plan, the new board of directors decided to change the name of
Enron Corp. to Enron Creditors Recovery Corp. to reflect the
current corporate purpose. ECRC's sole mission is to reorganize
and liquidate certain of the operations and assets of the "pre-
bankruptcy" Enron for the benefit of creditors.
ECRC has been involved in the MegaClaims Litigation, an action
against 11 major banks and financial institutions that ECRC
believes contributed to Enron's collapse; the Commercial Paper
Litigation, an action involving the recovery of payments made to
commercial paper dealers; and the Equity Transactions Litigation,
which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG,
Credit Suisse and Bear Stearns to recover payments made to the
four banks on transactions involving Enron's stock while the
company was insolvent.
EVEREST CROSSING: Rudolph Friedmann's Fees Sliced
-------------------------------------------------
Bankruptcy Judge Frank J. Bailey slashed Rudolph Friedmann, LLP's
fees in Everest Crossing, LLC's bankruptcy case, pursuant to a
Sept. 16 Memorandum of Decision. Rudolph Friedmann, for its
nearly 12 months' service as counsel to Everest Crossing, seeks
compensation of $198,582.75, reimbursement of expenses of
$3,668.28, and a premium of $40,000. Everest and its sole
shareholder, Solmon Chowdhury, oppose the application on numerous
grounds, including failures of disclosure, misrepresentations, and
abandonment of the Debtor in mid-case, and ask for disallowance of
roughly half the compensation requested and denial of a premium.
They further ask for a determination that the Firm agreed to
accept payment of its fee over time and is now bound by that
agreement for purposes of plan confirmation. Judge Bailey granted
the Firm $100,000 in fees, denied the balance and any premium,
and, in lieu of even more severe disallowance of compensation,
permitted payment of the administrative claim over a period of 24
months. A copy of Judge Bailey's Sept. 16, 2011 Memorandum of
Decision is available at http://is.gd/WcBKKPfrom Leagle.com.
About Everest Crossing
Everest Crossing, LLC, operates a restaurant known as OM
Restaurant in the Harvard Square section of Cambridge,
Massachusetts. The restaurant occupies leased space in the
Crimson Galleria under a 2005 lease agreement. It sought Chapter
11 protection (Bankr. D. Mass. Case No. 09-16664) on July 15,
2009, is represented by Herbert Weinberg, Esq., at Rosenberg &
Weinberg in North Andover, Mass., and estimated its assets at
$500,001 to $1 million and debts at $1 million to $10 million at
the time of the filing.
EVERGREEN ENERGY: To Restate March 31 & June 30 Quarter Reports
---------------------------------------------------------------
Evergreen Energy Inc. management recommended to the Audit
Committee of the Company's Board of Directors that the Company
correct certain components of its condensed consolidated balance
sheet, the components of the Company's condensed consolidated
statements of operations and the components of the Company's
condensed consolidated statement of shareholders' deficit as of
and for the three and six months ended March 31, 2011, and June
30, 2011. The Audit Committee agreed with management's
recommendation, and it was concluded that the financial statements
as of and for the aforementioned periods should no longer be
relied upon. Management has discussed this matter with Hein and
Associates LLP, the Company's independent registered public
accounting firm.
The identified errors related to: (i) accounting for a liability
that was incurred during the three months ended March 31, 2011,
which was not properly recorded in the previously filed Form 10-Q;
and (ii) to appropriately account for certain prior period items,
including: the abandonment of certain patents, an impairment of
certain office assets and to adjust depreciation for certain
assets.
As a result of these errors, the Company determined that the
condensed consolidated balance sheet, condensed consolidated
statements of operations, and the condensed consolidated statement
of shareholders' deficit for the three months ended March 31,
2011, and at March 31, 2011, and for the three and six months
ended June 30, 2011, and at June 30, 2011, should be restated on
Forms 10-Q/A for the applicable periods. The Company evaluated
these adjustments both quantitatively and qualitatively and
determined that no other prior periods needed to be restated,
principally due to the non-cash nature of the prior period
adjustments.
The Company anticipates that the 10-Q/A for three months ended
March 31, 2011, and the 10-Q/A for the three and six months ended
June 30, 2011, will be filed in the coming days.
A full-text copy of the filing is available for free at:
http://is.gd/DLV0xA
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.
EVERGREEN SOLAR: Can Use Noteholders Cash Collateral Until Nov. 15
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware entered, on
Sept. 8, 2011, a final order authorizing Evergreen Solar, Inc., to
use cash collateral in which the Prepetition Secured Parties may
have an interest, until Nov. 15, 2011, unless extended pursuant to
the Restructuring Support Agreement entered into by and between
the Debtor and noteholders.
The RSA contains the parties' agreements and undertakings with
respect to the Debtor's restructuring.
Not later than one month prior to the expiration of the Approved
Budget, the Debtor will provide counsel to the Indenture Trustee,
counsel to the Supporting Noteholders and counsel to the Committee
an updated budget for an additional 13-week period, which, upon
acceptance by the Requisite Supporting Noteholders in their sole
discretion, will become the Approved Budget for such period for
purposes of this Final Order.
In the event the Debtor and the Requisite Supporting Noteholders
fail to agree on a Supplemental Approved Budget, the Debtor's
right to use cash collateral will terminate.
As adequate protection of the Prepetition Secured Parties'
interests in their respective Prepetition Collateral, including
cash collateral, the Debtor is authorized and directed to pay,
when due and payable and without regard to whether the fees and
expenses were incurred prepetition or postpetition, the reasonable
fees and expenses incurred by: (i) the Supporting Noteholders;
(ii) counsel to the Supporting Noteholders; (iii) local counsel to
the Supporting Noteholders; (iv) the financial advisor to the
Supporting Noteholders; (v) the Indenture Trustee (U.S. Bank
National Association); (vi) counsel to the Indenture Trustee;
(vii) local counsel to the Indenture Trustee; and (viii) other
Noteholder Professionals.
In addition, the Debtor will pay $12.5 million to the Indenture
Trustee for the benefit of the Noteholders, which payment was made
on Aug. 19, 2011, and which funds will reduce the total allowed
claim of the Noteholders, to the extent not disgorged.
Further, subject to the Carve-Out, the Indenture Trustee, for the
benefit of the Noteholders, is granted: (i) first priority post
petition security interests on all of the prepetition and post
petition property of the Debtor; and (ii) first-priority
superpriority administrative expense clams under Bankruptcy Code
Section 507(b).
The Debtor was liable to the Prepetition Secured Parties in
respect of obligations under the Indenture dated as of April 26,
2010, for (i) the aggregate principal amount of not less than
$165 million (plus accrued and unpaid interest) and (ii) unpaid
fees, expenses, disbursements, indemnifications, obligations, and
charges or claims, secured by valid priority liens upon the
Debtor's assets.
A complete text of the Final Cash Use Order is available for free
at http://is.gd/GYxYUP
About Evergreen Solar
Evergreen Solar, Inc. -- http://www.evergreensolar.com/--
develops, manufactures and markets String Ribbon solar power
products using its proprietary, low-cost silicon wafer technology.
The Company's patented wafer manufacturing technology uses
significantly less polysilicon than conventional processes.
Evergreen Solar's products provide reliable and environmentally
clean electric power for residential and commercial applications
globally.
The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge
Mary F. Walrath. The Company's balance sheet at April 2, 2011,
showed $373,972,000 in assets, $455,506,000 in total liabilities,
and a stockholders' deficit of $81,534,000.
Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham
McCutchen LLP, serve as general bankruptcy counsel to the Debtor.
Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski
Stang Ziehl & Jones LLP, serve as co-counsel. Zolfo Cooper LLC is
the financial advisor. Epiq Bankruptcy Solutions has been tapped
as claims agent.
In conjunction with the Chapter 11 filing, the Company entered
into a restructuring support agreement with certain holders of
more than 70% of the outstanding principal amount of the Company's
13% convertible senior secured notes. As part of the bankruptcy
process the Company will undertake a marketing process and will
permit all parties to bid on its assets, as a whole or in groups
pursuant to 11 U.S.C. Sec. 363. An entity formed by the
supporting noteholders, ES Purchaser, LLC, entered into an asset
purchase agreement with the Company to serve as a "stalking-horse"
and provide a "credit-bid" pursuant to the Bankruptcy Code for
assets being sold.
The supporting noteholders are represented by Michael S. Stainer,
Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer &
Feld LLP, in New York.
EVERGREEN SOLAR: Time to File Schedules Extended to Sept. 30
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
extended the time within which Evergreen Solar must file (i) its
schedules of assets and liabilities, (ii) schedules of executory
contracts and unexpired leases, (iii) lists of equity holders,
(iv) schedules of current income and expenditures and (v)
statements of financial affairs, for an additional 16 days through
and including Sept. 30, 2011.
About Evergreen Solar
Evergreen Solar, Inc. -- http://www.evergreensolar.com/--
develops, manufactures and markets String Ribbon solar power
products using its proprietary, low-cost silicon wafer technology.
The Company's patented wafer manufacturing technology uses
significantly less polysilicon than conventional processes.
Evergreen Solar's products provide reliable and environmentally
clean electric power for residential and commercial applications
globally.
The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge
Mary F. Walrath. The Company's balance sheet at April 2, 2011,
showed $373,972,000 in assets, $455,506,000 in total liabilities,
and a stockholders' deficit of $81,534,000.
Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham
McCutchen LLP, serve as general bankruptcy counsel to the Debtor.
Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski
Stang Ziehl & Jones LLP, serve as co-counsel. Zolfo Cooper LLC is
the financial advisor. Epiq Bankruptcy Solutions has been tapped
as claims agent.
In conjunction with the Chapter 11 filing, the Company entered
into a restructuring support agreement with certain holders of
more than 70% of the outstanding principal amount of the Company's
13% convertible senior secured notes. As part of the bankruptcy
process the Company will undertake a marketing process and will
permit all parties to bid on its assets, as a whole or in groups
pursuant to 11 U.S.C. Sec. 363. An entity formed by the
supporting noteholders, ES Purchaser, LLC, entered into an asset
purchase agreement with the Company to serve as a "stalking-horse"
and provide a "credit-bid" pursuant to the Bankruptcy Code for
assets being sold.
The supporting noteholders are represented by Michael S. Stainer,
Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer &
Feld LLP, in New York.
EXIDE TECHNOLOGIES: Files 2nd Quarter Summary Report
----------------------------------------------------
Exide Technologies
Post-Confirmation Quarterly Summary Report
Unaudited Condensed Balance Sheets
As of June 30, 2011
(in thousands)
Assets
Current Assets:
Cash $57,613
Accounts receivables, net 129,823
Intercompany receivables 15,582
Inventories 211,332
Prepaid expenses & other 77,737
--------------
Total current assets 492,088
--------------
Property, plant and equipment, net 271,260
--------------
Other Assets:
Other intangibles, net 50,305
Investment in affiliates 1,375
Intercompany notes receivables 200,183
Deferred financing costs and other 76,084
--------------
TOTAL ASSETS $1,091,295
==============
Liabilities and Stockholders' Equity
Current Liabilities
Current maturities of long-term debt $286
Accounts payable 130,572
Accrued expenses 54,077
Accrued interest 25,791
Restructuring reserve 5,399
Liability for warrants
Warranty liability 10,890
--------------
Total current liabilities 227,015
Long-term debt 735,153
Noncurrent retirement obligations 62,537
Other noncurrent liabilities 55,714
--------------
Total liabilities 1,080,418
Total stockholder's equity 10,877
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,091,295
==============
Exide Technologies
Post-Confirmation Quarterly Summary Report
Unaudited Schedule of Cash Flows
Quarter Ended June 30, 2011
(in thousands)
Beginning Cash Balance $53,359
Cash Receipts:
Collection of accounts receivable 391,622
Proceeds from equity issuance
Proceeds from sale of Debtor's assets
Refinancing
All other cash receipts 33,011
--------------
Total Cash Receipts 424,633
--------------
Cash Disbursements:
Disbursements made under the Plan, excluding
payments to bankruptcy professionals
Disbursements made to bankruptcy professionals 515
Repayment of Term Loans
All other disbursements made
in the ordinary course 419,863
--------------
Total Cash Disbursements 420,378
--------------
Ending Cash Balance $57,613
==============
About Exide Technologies
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products.
The Company filed for Chapter 11 protection (Bankr. Del. Case No.
02-11125) on April 14, 2002. Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill,
Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors
in their successful restructuring. The Court confirmed Exide's
Amended Joint Chapter 11 Plan on April 20, 2004. The plan took
effect on May 5, 2004. While it has emerged from Bankruptcy,
reorganized Exide is still resolving claims filed against it in
the Bankruptcy Court.
* * *
Reorganized Exide carries 'B' issuer credit ratings from Standard
& Poor's. "The ratings on Exide Technologies reflect what we
consider to be the Company's aggressive financial risk profile,
which incorporates S&P's expectation that sales and profitability
will improve gradually as demand increases," said Standard &
Poor's credit analyst Nancy Messer.
Exide has 'B3' corporate family and probability of default ratings
from Moody's Investors Service. In July 2008, Moody's upgraded
the rating to 'B3' from 'Caa1'. Exide's B3 Corporate Family
Rating continues to incorporate the company's leveraged profile,
cyclical industry characteristics, and raw material pricing
pressure, Moody's said in January 2011.
FAIRFIELD SENTRY: Sues Societe Generale for $35.3 Million
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the liquidators for Fairfield Sentry Ltd. and
affiliated funds filed a lawsuit last week for $35.3 million
against Societe Generale Bank & Trust SA to recover money taken
out of the funds within three years before the Bernard L. Madoff
Investment Securities Inc. Ponzi scheme surfaced. The Societe
Generale suit was filed in bankruptcy court in Manhattan.
Mr. Rochelle discloses that the Fairfield liquidators' suit is
based in part on the notion that investors in the fund were
entitled to make redemptions only from stock investments. Since
money derived from the Madoff firm was in reality stolen from
other investors, the redemptions weren't proper, the suit claims.
The Fairfield liquidators' suit and others like it fall within the
ambit of a settlement reached in June with the trustee for the
Madoff firm. In the settlement, the liquidators and the Madoff
trustee agreed how to split up recoveries against investors in the
Fairfield funds. The settlement gave the Madoff trustee a $3.054
billion judgment against the Fairfield funds.
About Fairfield Sentry
Fairfield Sentry is being liquidated under the supervision of the
Commercial Division of the High Court of Justice in the British
Virgin Islands. It is one of the funds owned by the Fairfield
Greenwich Group, an investment firm founded in 1983 in New York
City. Fairfield Sentry and other Greenwich funds had among the
largest exposures to the Bernard L. Madoff fraud.
Fairfield Sentry Limited filed for Chapter 15 protection (Bankr.
S.D.N.Y. Case No. 10-13164) on June 14, 2010.
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.
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 US$3.55 billion that Fairfield
withdrew from Madoff during the period from 2002 to Mr. Madoff's
arrest in December 2008. Since 1995, the Fairfield funds invested
about US$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.
FANNIE MAE: BofA, JPMorgan Fail to Make Grade
---------------------------------------------
American Bankruptcy Institute reports that Fannie Mae said that
Bank of America Corp., the largest U.S. mortgage servicer, failed
to make a list of companies doing a satisfactory job of assisting
homeowners struggling to pay their mortgage.
About Fannie Mae
Federal National Mortgage Association, aka Fannie Mae, is a
government-sponsored enterprise that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold.
The Company's balance sheet at Dec. 31, 2010 showed
$3.222 trillion in total assets, $3.224 trillion in total
liabilities and a $2.52 billion total deficit.
Fannie Mae has been under conservatorship, with the Federal
Housing Finance Agency acting as conservator, since September 6,
2008. As conservator, FHFA succeeded to all rights, titles,
powers and privileges of the company, and of any shareholder,
officer or director of the company with respect to the company and
its assets. The conservator has since delegated specified
authorities to Fannie Mae's Board of Directors and has delegated
to management the authority to conduct day-to-day operations.
The U.S. Department of the Treasury owns Fannie Mae's senior
preferred stock and a warrant to purchase 79.9% of its common
stock, and Treasury has made a commitment under a senior preferred
stock purchase agreement to provide Fannie with funds under
specified conditions to maintain a positive net worth.
FERRO CORPORATION: Moody's Raises Ratings to Ba3; Outlook Stable
----------------------------------------------------------------
Moody's Investors Service raised Ferro Corporation's Corporate
Family Rating (CFR) to Ba3 from B1 and its Speculative Grade
Liquidity (SGL) rating to SGL-2 from SGL-3 reflecting the improved
cash flow generation and overall improvement of Ferro's liquidity
profile. The positive ratings move also reflects the financial
flexibility gained by Ferro's debt reduction initiatives and the
successful negotiation of less restrictive precious metals lease
agreements. The outlook was moved to stable from positive.
"The upgrade reflects improved operating performance, reduced debt
levels and the prospect of sustainably stronger credit metrics
going forward," said Bill Reed, Moody's Vice President.
RATINGS RATIONALE
Ferro's Ba3 CFR reflects the prospect of continued positive
operating performance in 2011 and 2012, which began in the third
quarter of 2009. The improved operating results were enhanced by
the meaningful reduction in debt ($353 million at the end of June
2011 - reduced by over $300 million since peak levels in 2009),
extension of the maturity profile, the renegotiated terms of the
precious metals lease lines requiring less cash collateral, and
the success of varied restructuring efforts.
The stable outlook reflects Ferro's good liquidity and stable
operations. Supportive of the outlook are the anticipated cost
reduction program benefits, the realization of a meaningful
reduction in leverage and interest expense, as well as the
supportive liquidity cushion. If Ferro's leverage remains below
2.5x, EBITDA margins remain above 11%, and free cash flow as a
percentage of debt remains above 5% on a sustainable basis,
Moody's could assess the appropriateness of a higher rating. There
is minimal negative pressure on the rating at this time due to the
debt reduction, improvements to the precious metals lease lines,
and operating improvements.
The upgrade to SGL-2 Speculative Grade Liquidity rating, from SGL-
3, reflects the impact of Ferro's positive operating performance
as well as the negotiation of the release of a significant portion
of the precious metals cash collateral and the increase in the
size of many of the precious metals lease lines and the addition
of new lines. The SGL-2 rating also reflects Ferro's cash balances
and the approximate $350 million in availability under the
revolver due August 2015. The liquidity is improved,
notwithstanding the rising raw materials prices which have been a
use of cash through natural increase in inventory levels.
Additionally, there are no near-term maturities and overall
Moody's anticipates that they will remain in comfortably in
compliance through 2012.
Ratings Raised:
Corporate Family Rating, to Ba3 from B1
Probability of Default Rating to Ba3 from B1
$33.8 million Senior Unsecured Convertible 6.5% Notes due 2013 to
B1, LGD4, 67% from B2 LGD5, 71%
7.875% Senior Notes due 2018 to B1, LGD4, 67% from B2 LGD5, 72%
The last rating action on Ferro was on May 13, 2010 when Moody's
changed Ferro's outlook to positive.
The principal methodology used in rating Ferro was Moody's Global
Chemical Industry Methodology published in December 2009.
Ferro headquartered in Cleveland, Ohio, is a global producer of an
array of specialty materials and chemicals including coatings,
enamels, pigments, plastic compounds, and specialty chemicals for
use in industries ranging from construction, and
telecommunications. Revenues were $2.2 billion for the LTM ended
June 30, 2011.
FIRST CALL: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: First Call Well Service, LTD
P.O. Box 840
Sweetwater, TX 79556
Bankruptcy Case No.: 11-10354
Chapter 11 Petition Date: September 16, 2011
Court: United States Bankruptcy Court
Northern District of Texas (Abilene)
Judge: Robert L. Jones
Debtor's Counsel: Max Ralph Tarbox, Esq.
TARBOX LAW, P.C.
2301 Broadway
Lubbock, TX 79401
Tel: (806) 686-4448
E-mail: kathy@tarboxlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txnb11-10354.pdf
The petition was signed by Robert L. Adkins, president.
FONTAINEBLEAU: Ch. 7 Trustee Proposes Ver Ploeg as Counsel
----------------------------------------------------------
Soneet R. Kapila, the Debtors' Chapter 7 trustee, sought and
obtained authority from the Court to retain Jason S. Mazer, Esq.
at Ver Ploeg & Lumpkin, P.A., as special counsel to represent the
Trustee in connection with insurance coverage and bad faith
issues involving the pursuit of claims related to the Debtors'
directors and officers, nunc pro tunc to May 30, 2011.
Mr. Mazer will be the person primarily responsible for the
representation of the Trustee as special counsel. He and his
firm will perform these services:
(a) advise the Trustee with respect to any available insurance
coverage;
(b) advise, counsel and assist the Trustee concerning the
efficacy of litigation of any insurance coverage disputes,
or bad faith claims, relating to any claims against the
Debtors' insurer; and
(c) negotiate with insurers and their counsel on behalf of the
Trustee.
Ver Ploeg will be paid a five percent contingency fee of all
gross recoveries on the claims of the directors and officers,
which will be separate from and in addition to any contingency
fee paid to Genovese Joblove and Battista, P.A., the Trustee's
special litigation counsel to pursue claims against the former
officers and directors.
Ver Ploeg will also be paid for normal and customary out-of-
pocket expenses incurred in connection with the professional
services provided.
Mr. Mazer assured the Court that he and his firm are each a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is
constructing a luxury resort, Fontainebleu Las Vegas, on the
northern end of the Las Vegas Strip.
Fontainebleau Las Vegas Holdings, LLC and its units filed for
Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case
No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena
Price & Axelrod LLP, represented the Debtors in their
restructuring effort. The Debtors' claims agent is Kurtzman
Carson Consulting LLC. Attorneys at Genovese Joblove & Battista,
P.A., and Fox Rothschild, LLP, represent the Official Committee of
Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
In February 2010, Icahn Enterprises L.P. acquired from
Fontainebleau Las Vegas and certain affiliated entities, the
Fontainebleau property and improvements thereon located in Las
Vegas, Nevada, for an aggregate purchase price of around
$150 million. The bankruptcy case was subsequently converted to
Chapter 7.
Soneet R. Kapila has been named the trustee for the Chapter 7 case
of Fontainebleau Las Vegas.
FONTAINEBLEAU: Ch. 7 Trustee Proposes More Work for Genovese
------------------------------------------------------------
The bankruptcy court previously authorized Soneet R. Kapila,
Fontainebleau Las Vegas' Chapter 7 Trustee, to retain Paul J.
Battista, Esq., and the law firm of Genovese Joblove & Battista,
P.A., as his special litigation counsel.
In a subsequent filing, the Trustee seeks to modify the terms of
the order. He explains that the reason is to allow Genovese
Joblove to provide advice and assistance at the request and sole
discretion of the Trustee with respect to general litigation and
estate administration matters that relate to the director and
officer liability and insider avoidance actions pending by the
estate, with a modification of fee terms to permit, hourly fees
and costs for the limited aspect of the representation.
The Trustee proposes that compensation for hourly services be
awarded to Genovese Joblove after the filing of interim or final
applications and a hearing consistent with the requirements of
Sections 327, 330 and 331 of the Bankruptcy Code, Rules 2002 and
2016 of the Federal Rules of Bankruptcy Procedure and Rule 2016-1
of the Local Rules of Bankruptcy Procedure.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is
constructing a luxury resort, Fontainebleu Las Vegas, on the
northern end of the Las Vegas Strip.
Fontainebleau Las Vegas Holdings, LLC and its units filed for
Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case
No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena
Price & Axelrod LLP, represented the Debtors in their
restructuring effort. The Debtors' claims agent is Kurtzman
Carson Consulting LLC. Attorneys at Genovese Joblove & Battista,
P.A., and Fox Rothschild, LLP, represent the Official Committee of
Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
In February 2010, Icahn Enterprises L.P. acquired from
Fontainebleau Las Vegas and certain affiliated entities, the
Fontainebleau property and improvements thereon located in Las
Vegas, Nevada, for an aggregate purchase price of around
$150 million. The bankruptcy case was subsequently converted to
Chapter 7.
Soneet R. Kapila has been named the trustee for the Chapter 7 case
of Fontainebleau Las Vegas.
FONTAINEBLEAU: M&M Lienholders Oppose Fees to Advisors
------------------------------------------------------
The M&M Lienholders and JMB Capital Partners Master Fund LP ask
the bankruptcy court not to approve the fee applications of these
professionals:
* First Interim Fee Application by Furr & Cohen, P.A., Special
Counsel for the Chapter 7 Trustee, Soneet Kapila;
* First Interim Application of Russell M. Blain & Stichter,
Reidel, Blain & Prosser, P.A., for Allowance & Payment of
Compensation for Services Rendered & Reimbursement of
Expenses Incurred as Attorneys for Chapter 7 Trustee;
* First Interim APP for Allowance & Payment of Compensation &
Reimbursement of Expenses of Kasowitz, Benson, Torres &
Friedman LLP as Special Litigation Counsel for Fontainebleau
Las Vegas Holdings, LLC, et al., for the Period from April
13, 2010 to May 31, 2011 [ECF No. 3072];
* First & Final Fee Application, for Investigatory Phase of
Retention Agreement, for Paul J. Battista Esq. and Genovese,
Joblove & Battiista, P.A. as Special Litigation Counsel to
Soneet R. Kapila, Chapter 7 Trustee;
* First Interim Application of Accountant, Kapila & Company
CPAs; and
* First Interim Fee Application of Consultant, Risk Management
Solutions, Inc.
Philip J. Landau, Esq., at Shraiberg Ferrara & Landau P.A., in
Boca Raton, Florida, points out that the Trustee previously
disclosed that the estate has $3,346,546 in "unencumbered funds
in operating accounts."
It is the belief of the M&M Lienholders and JMB that the
'unencumbered funds' are not unencumbered, but is the collateral
of the Mechanics' Lien Claimants, Mr. Landau says. He explains
that the funds are unused proceeds from the debtor-in-possession
financing from Icahn Nevada Gaming Acquisition LLC.
The Debtors required the use of approximately $18 million in the
Term Lenders' cash collateral to operate during the Chapter 11
proceedings and had no unencumbered funds at the time of the sale
of the Project, Mr. Landau contends.
"The only cash in the possession of the Debtors upon the
conversion of the Chapter 11 case to a Chapter 7 case were unused
proceeds from the DIP Credit Facility," Mr. Landau tells the
Court.
Therefore, the allegedly "unencumbered funds" are Remaining DIP
Proceeds, Mr. Landau reasons. He argues that as proceeds of the
DIP Credit Facility, the Remaining DIP Proceeds are part of the
proceeds of the sale of the Project and are thus subject to the
security interest of the Mechanics' Lien Claimants.
The purchase price of the Project was $156,209,985, consisting of
$105 million in cash and a credit bid of the DIP Credit Facility
amounting to $51,209,985.
However, the Debtors did not utilize the entire DIP Credit
Facility, which is why there are Remaining DIP Proceeds amounting
to $3,346,546, Mr. Landau points out.
As fully encumbered collateral, the Remaining DIP Proceeds may
not be used to pay estate expenses without the consent of the
Mechanics' Lien Claimants pursuant to Section 363(e) of the
Bankruptcy Code unless adequate protection is provided.
The Mechanics' Lien Claimants do not consent, and no adequate
protection has been offered or provided, nor could it be, as the
estate has no other assets worth $3,346,546 in which it could
provide a replacement lien, Mr. Landau further contends.
Court Approves Genovese Joblove Fee
The Court has approved the final fee application of Paul J.
Battista, Esq., at Genovese Joblove & Battista P.A., the Chapter
7 Trustee's special litigation counsel. Genovese Joblove is
awarded compensation for services rendered as special litigation
counsel to the Trustee in the investigatory phase of its
retention aggregating $75,000 and reimbursement of expenses
incurred for $3,564, for the September 6, 2010, through May 31,
2011 period.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is
constructing a luxury resort, Fontainebleu Las Vegas, on the
northern end of the Las Vegas Strip.
Fontainebleau Las Vegas Holdings, LLC and its units filed for
Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case
No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena
Price & Axelrod LLP, represented the Debtors in their
restructuring effort. The Debtors' claims agent is Kurtzman
Carson Consulting LLC. Attorneys at Genovese Joblove & Battista,
P.A., and Fox Rothschild, LLP, represent the Official Committee of
Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
In February 2010, Icahn Enterprises L.P. acquired from
Fontainebleau Las Vegas and certain affiliated entities, the
Fontainebleau property and improvements thereon located in Las
Vegas, Nevada, for an aggregate purchase price of around
$150 million. The bankruptcy case was subsequently converted to
Chapter 7.
Soneet R. Kapila has been named the trustee for the Chapter 7 case
of Fontainebleau Las Vegas.
FONTAINEBLEAU: RJF Answers $1.88MM Preferential Suit
----------------------------------------------------
RJF International Corp., one of the recipients of alleged
preferential or avoidable transfers, filed an answer to the
Chapter 7 Trustee's complaint.
The company allegedly received $1,800,819 in preferential
transfers.
In its response, RJF International asserts that it is without
knowledge or information sufficient as to the truth of the
Trustee's allegations and denies all the allegations. The
company also demanded a trial by jury to applicable issues.
Subsequently, in a separate filing, Kenneth B. Jacobs, Esq., at
Grayrobinson P.A., in Jacksonville, Florida, notifies parties-in-
interest that RJF International withdraws its answer and demand
for a jury trial. No reason was given for the withdrawal.
About Fontainebleau Las Vegas
Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is
constructing a luxury resort, Fontainebleu Las Vegas, on the
northern end of the Las Vegas Strip.
Fontainebleau Las Vegas Holdings, LLC and its units filed for
Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case
No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena
Price & Axelrod LLP, represented the Debtors in their
restructuring effort. The Debtors' claims agent is Kurtzman
Carson Consulting LLC. Attorneys at Genovese Joblove & Battista,
P.A., and Fox Rothschild, LLP, represent the Official Committee of
Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than
$1 billion in debt and a similar amount in assets, while each of
Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas
Holdings, LLC, listed less than $50,000 in assets and more than
$1 billion in debts.
In February 2010, Icahn Enterprises L.P. acquired from
Fontainebleau Las Vegas and certain affiliated entities, the
Fontainebleau property and improvements thereon located in Las
Vegas, Nevada, for an aggregate purchase price of around
$150 million. The bankruptcy case was subsequently converted to
Chapter 7.
Soneet R. Kapila has been named the trustee for the Chapter 7 case
of Fontainebleau Las Vegas.
FORBES ENERGY: S&P Raises CFR to 'B-'; Outlook Positive
-------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on oilfield services company Forbes Energy Services Ltd. to
'B-' from 'CCC+'. "We removed the rating from CreditWatch with
positive implications where it was placed on May 15 following the
announcement that it would refinance its $192.5 million senior
secured notes and enter into a new $75 million credit facility.
The outlook is positive," S&P related.
"At the same time we assigned a 'B-'issue rating to Forbes' $280
million senior unsecured notes due 2019. We assigned a '4'
recovery rating to the notes, indicating our expectation of
average (30% to 50%) recovery for lenders in the event of a
payment default," S&P related.
"In addition, we have withdrawn our ratings on the $205 million
senior secured notes of subsidiary Forbes Energy Services LLC and
Forbes Energy Capital Inc. Proceeds from the $280 million senior
unsecured notes of Forbes Energy Services Ltd. were used to repay
the senior secured notes," S&P stated.
"The upgrade reflects the company's much improved liquidity
following the close of the $75 million credit facility and note
refinancing," said Standard & Poor's credit analyst Paul Harvey.
"In addition, we currently expect near-term demand for Forbes'
well servicing and fluid logistics equipment to remain solid.
Favorable crude oil prices and the resulting increase in North
American drilling activity, particularly in South Texas' Eagle
Ford Shale, continue to drive high utilization of equipment across
the industry."
"Before the company's debt refinancing, liquidity was very
limited. Operating cash flows lagged the rapid recovery of the
industry, compounded by the absence of a credit facility. We
currently expect cash flows will materially improve for the
remainder of 2011 and into 2012. We also expect capital spending
to remain largely within cash flows over the next 12 to 18 months.
Based on current market conditions, we expect adjusted debt
leverage to improve to about 3.5x to 4.0x during 2012 from over
4.5x in 2010. Likewise, adjusted EBITDA coverage of interest
expense should improve to about 3x from under 2x over the same
period," S&P stated.
"The outlook is positive, reflecting the combination of improving
cash flows and their positive impact to financial measures. Over
the next 12 months we could raise ratings if run-rate adjusted
debt leverage falls to around 3.5x, combined with a still
favorable outlook for oilfield services demand. We could stabilize
ratings if the outlook for market conditions materially weakens,
or Forbes aggressively outspends operating cash flows," S&P
stated.
FORD MOTOR: DBRS Upgrades Issuer Rating to 'BB'
-----------------------------------------------
DBRS has upgraded the Issuer Rating of Ford Motor Company (Ford or
the Company) to BB from BB (low). Pursuant to DBRS's Rating
Methodology for Leveraged Finance, the ratings of Ford's Senior
Secured Credit Facilities and Long-Term Debt have also been
upgraded to BBB (low) and B (high), respectively. Concurrently,
the Issuer & Long-Term Debt rating of Ford Motor Credit Company
LLC (Ford Credit) and the Long-Term Debt rating of Ford Credit
Canada Limited have been upgraded to BB (high) from BB. (This
rating action reflects the maintenance of the one-notch rating
differential between the parent company and the credit company.)
The short-term ratings of both finance subsidiaries have been
confirmed at R-4. The trend on all ratings is Stable.
The ratings upgrade reflects the Company's continuously improving
performance, with Ford becoming significantly profitable from 2010
through the first half of 2011. The Company's progress in its
core North American market has been impressive amid industry
conditions that, while improved vis-…-vis the recent automotive
downturn, remain well below historical norms. Additionally, the
Company's financial profile continues to be restored; Ford has
paid down substantial further industrial indebtedness, with the
automotive segment having a net cash position of $8 billion as of
June 30, 2011.
Ford has continued to generate solid momentum in its core North
American market, with the Company gaining further market share
(which in total approached 17% through the first eight months of
2011 in the United States, with more profitable retail share
estimated at approximately 14% over the same period). The market
share gains reflect Ford's strong product cadence, as the
Company's model replacement rate exceeds the industry average.
The Company's consistently well-received product launches have
significantly bolstered its brand reputation and improved its
quality image (notwithstanding a nominal setback this spring
associated with Ford's interactive driver communication systems).
DBRS also notes that Ford has managed to meaningfully expand its
product range with the Fiesta and recently launched Focus models
being very competitive in the car segment (and achieving
significant conquest sales away from other original equipment
manufacturers (OEMs)). Persistent pricing gains and higher
equipment levels across the Company's product portfolio have
significantly increased per unit revenues. Ford has also
effectively marketed its EcoBoost technology, not only in cars but
also (perhaps more significantly) in trucks, with the turbocharged
powertrains selling at a premium vis-…-vis larger displacement
conventionally aspirated engines. The combination of the above
amid moderately higher industry volumes and the Company's
significantly revamped cost structure has enabled Ford to generate
significant profitability in North America.
Given its solid cash generation and healthy liquidity, Ford is
continuing to take steps to reduce its debt burden and improve its
balance sheet, having reduced the indebtedness of the automotive
operations by more than $13 billion in the last twelve months
ending June 2011. Notable debt reductions over this period
include Ford paying down all of its secured revolving credit
facility (of which the Company retains full availability).
Additionally, the Company paid down $3.4 billion of its secured
term loan (with the remaining $1.8 billion also being repaid as of
September 15, 2011). Ford also satisfied all obligations toward
the United Auto Workers (UAW) Voluntary Employee Beneficiary
Association (VEBA) Trust. Through stock conversion offers, the
Company achieved reductions in its unsecured convertible notes
from $3.5 billion to $900 million. Finally, Ford wholly redeemed
its subordinated convertible debentures. As a result of these
debt reductions and strong cash flow, Ford's balance sheet has
been substantially improved, with the automotive segment having a
net cash position of $8 billion as of June 30, 2011.
Regarding the Company's financial profile, DBRS notes that income-
and coverage-based credit metrics (e.g., debt-to-EBITDA, EBIT-to-
interest) effectively exceed levels commensurate with the current
ratings. With respect to Ford's balance sheet, DBRS notes that
the Company's equity base stands to be substantially bolstered in
the near term (i.e., by year-end 2011) through the expected
release of tax valuation allowances of an amount estimated at $14
billion (DBRS estimate).
Notwithstanding Ford's considerable recent progress, DBRS notes
that the Company continues to face some challenges. First, while
the Company's turnaround in North America has been remarkable,
Ford presently remains too dependent on its home market with
respect to earnings. Ford Europe's results over the past two
years have been significantly undermined by negative volume and
mix effects in line with challenging industry conditions. In
addition to turning around its performance in Europe, Ford must
also work toward increasing its presence in the BRIC markets,
particularly since emerging markets are expected to represent the
majority of growth for the global automotive industry going
forward. Second, the performance of the Lincoln luxury brand has
been underwhelming in recent years, with the Company's turnaround
focused on its 'One Ford' strategy. Ford is attempting to address
this through several forthcoming launches of Lincoln products in
the near future; DBRS notes that these models will play a
significant role in determining Lincoln's long-term viability.
With respect to the Company's current contract negotiations with
the UAW, Ford is the most vulnerable of the Detroit Three as it is
the only company possibly subject to strike action (in the UAW's
efforts to regain some of the concessions made during the
automotive downturn). Thus far, a strike has been averted,
although negotiations have persisted such that an extension of the
current contract (which expired on September 14, 2011) was
necessary (as expected by DBRS). While DBRS assumes that the
resolution of a new labor agreement will likely come at some cost
to the Company, DBRS expects that Ford will be able to readily
absorb such increases given its significantly improved financial
profile (as well as the materially diminished representation of
its U.S. hourly workforce). (The assumption of a prudent
resolution of the UAW negotiations is incorporated in today's
ratings action.)
The Stable trend on the ratings reflects the above-cited headwinds
facing the Company, in addition to a lackluster economic
environment in Ford's native U.S. market. However, should the
Company's performance momentum persist and Ford demonstrate
progress in Europe as well as an ability to successfully turn
around Lincoln, the ratings could be subject to further positive
action.
FRY'S REDONDO: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Fry's Redondo Investment LLC
710 Adelaide Place
Santa Monica, CA 90402
Bankruptcy Case No.: 11-49225
Chapter 11 Petition Date: September 16, 2011
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Barry Russell
Debtor's Counsel: Dana M. Douglas, Esq.
DANA M. DOUGLAS, ATTORNEY AT LAW
11024 Balboa Boulevard, #431
Granada Hills, CA 91344
Tel: (818) 360-8295
Fax: (818) 360-9852
E-mail: dmddouglas@hotmail.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 Frydoun Sheikhpour, sole member.
GENTA INC: Has 595.5 Million Outstanding Common Shares
------------------------------------------------------
The number of outstanding shares of Genta Incorporated common
stock par value $0.001 as of Sept. 16, 2011, was 595,535,162.
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.
GLC LIMITED: Frost Brown Has New Cincinnati Office
--------------------------------------------------
The law firm of Frost Brown Todd LLC, counsels for GLC Limited
notified the U.S. Bankruptcy Court for the Southern District of
Ohio that it has relocated its Cincinnati, Ohio office from 2200
PNC Center, 201 East Fifth Street, Cincinnati, Ohio.
The firm adds that the telephone numbers, facsimile numbers and
e-mail addresses remain the same. The new mailing address for the
counsel for the Debtor is now:
Ronald E. Gold, Esq.
Joseph B. Wells, Esq.
Lindsey F. Baker, Esq.
FROST BROWN TODD LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, OH 45202
About GLC Limited
Proctorville, Ohio-based GLC Limited is a retail liquidation
company in the wholesale/retail distribution industry. It offers
large selections of name brand products in many categories. It
distributes its goods through a network of wholesale distributors,
retail chains and discount and surplus centers. It owns four
warehouses for its goods which are located in Proctorville and
Columbus, Ohio and Huntington, West Virginia.
GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio
Case No. 11-11090) on Feb. 28, 2011. James R. Burritt, chief
restructuring officer, signed the Chapter 11 petition. The Debtor
disclosed $18,231,434 in assets and $28,095,356 in liabilities as
of the Chapter 11 filing.
Ronald E. Gold, Esq., and Joseph B. Wells, Esq., at Frost Brown
Todd LLC, serve as the Debtor's bankruptcy counsel. James R.
Burritt is the Chief Restructuring Officer and Leon C. Ebbert, PC,
CPA, has been tapped as accountants. The Official Committee of
Unsecured Creditors in GLC Limited's Chapter 11 bankruptcy case
has tapped Morris, Manning & Martin, LLP, as counsel.
GO DADDY: S&P Assigns Preliminary 'B' Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
corporate credit rating to Scottsdale, Ariz.-based Go Daddy
Operating Co. LLC. The outlook is stable.
"At the same time, we assigned the company's proposed $825 million
senior secured credit facilities a preliminary issue-level rating
of 'B' (at the same level as the preliminary corporate credit
rating), with a preliminary recovery rating of '3', indicating our
expectation of meaningful (50% to 70%) recovery for debtholders in
the event of a payment default. The senior secured credit
facilities consist of a $75 million revolver due 2016 and a $750
million term loan due 2018," S&P related.
"The rating and outlook reflect our expectation that Go Daddy will
generate positive discretionary cash flow and steadily reduce
debt, absent a leveraging transaction," said Standard & Poor's
credit analyst Chris Valentine. "We expect the debt leverage will
decline over time, consistent with our expectation of EBITDA
growth, and that positive discretionary cash flow will be used in
part to pay down debt."
GREAT ATLANTIC: May Close 2 Superfresh Stores in Gold Coast
-----------------------------------------------------------
Tom Risen at Ocean City Today reports that the Great Atlantic &
Pacific Tea Company, the Superfresh grocery closed its Gold Coast
Mall location, in Maryland earlier this year, could close the
remaining two locations in the area.
"While the decision to put these non-core stores up for sale will
unfortunately impact some of our customers, partners, communities
and Associates, this is a necessary step in our efforts to restore
the Company to long-term financial health," the report quotes the
company's Chief Executive Officer Sam Martin in a press release.
The report says the locations at Ocean City at 94th Street and in
West Ocean City were the only two in the state not included in the
April sale. There is also a Superfresh Phramacy in Salisbury that
has been put up for sale. Now that the summer season has ended,
supermarkets such as Superfresh and Food Lion are no longer open
24 hours as of September to cater to tourist traffic.
GREAT ATLANTIC: Wants PwC's Audit Services for 2012 Approved
------------------------------------------------------------
The Great Atlantic & Pacific Tea Company, Inc., et al., ask the
U.S. Bankruptcy Court for the Southern District of New York to
authorize the expansion of services of PricewaterhouseCoopers LLP
as auditor, to include audit services for an additional year, the
year ending Feb. 25, 2012.
The additional services to be provided by PwC will include:
a) audit the consolidated financial statements of A&P at
Feb. 25, 2012, and for the year then ending;
b) review A&P's unaudited consolidated quarterly financial
statements for each of first three quarters in the year ending
Feb. 25, 2012; and
c) perform incremental audit and review procedures for the 2011
financial statement and quarterly reviews.
The Debtors assures the Court that PwC's services will not
duplicate or overlap with the services authorized by the original
application or those provided by the Debtors' other retained
consultants and advisors. The Debtors have retained and may
retain additional professionals during the term of the
engagement and will work cooperatively with PwC and other
professionals to avoid duplication of services.
The Debtors propose to: (a) compensate PwC for its auditing
services rendered with the estimated fixed fee range of $1,945,000
- $2,045,0004.
The hourly rates of PwC's personnel are:
Partner $860 - $995
Managing Director $610 - $995
Director $700
Senior Manager $525 - $770
Manager $415 - $430
Senior Associate $225 - $310
Associate $145 - $235
To the best of the Debtors' knowledge, PwC is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code.
The Debtors set a Sept. 26 hearing on the requested additional
services of PwC. Objections, if any, are due Sept. 19, at
4:00 p.m. (prevailing Eastern Time).
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a supermarket retailer, operating under a variety of
well-known trade names, or "banners" across the mid-Atlantic and
Northeastern United States. Before filing for bankruptcy in 2010,
A&P operated 429 stores in 8 states and the District of Columbia
under the following trade names: A&P, Waldbaum's, Pathmark,
Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super
Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees
prior to the bankruptcy filing.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In
its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
A&P obtained court approval for a new contract with C&S Wholesale
Grocers Inc., its principal supplier. The contract is designed to
save A&P $50 million a year when the supermarket operator emerges
from Chapter 11 reorganization.
A&P sold postpetition 12 Super-Fresh stores in the Baltimore-
Washington area for $37.83 million, plus the value of inventory.
Thirteen other locations didn't attract buyers at auction and were
closed mid-July 2011.
GREAT ATLANTIC: Settlement Agreement with OfficeMax Approved
------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved the settlement agreement
between The Great Atlantic & Pacific Tea Company, Inc., et al.,
certain of the Debtors' officers and OfficeMax, Inc.
As reported in the Troubled Company Reporter on Aug. 17, 2011, the
Debtors had reached a settlement with OfficeMax Inc. in a suit
alleging A&P improperly poached OfficeMax executives and
interfered with their nonsolicitation agreements.
The TCR reported that OfficeMax filed the underlying suit in
Illinois state court in August 2010, claiming that former chief
operating officer Sam Martin, currently the CEO of A&P, had
improperly recruited other OfficeMax executives, including Carter
Knox, current A&P senior vice president of human resources, and
Paul Hertz.
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a supermarket retailer, operating under a variety of
well-known trade names, or "banners" across the mid-Atlantic and
Northeastern United States. Before filing for bankruptcy in 2010,
A&P operated 429 stores in 8 states and the District of Columbia
under the following trade names: A&P, Waldbaum's, Pathmark,
Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super
Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees
prior to the bankruptcy filing.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In
its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
A&P obtained court approval for a new contract with C&S Wholesale
Grocers Inc., its principal supplier. The contract is designed to
save A&P $50 million a year when the supermarket operator emerges
from Chapter 11 reorganization.
A&P sold postpetition 12 Super-Fresh stores in the Baltimore-
Washington area for $37.83 million, plus the value of inventory.
Thirteen other locations didn't attract buyers at auction and were
closed mid-July 2011.
GREAT ATLANTIC: Brower Piven Files Class Suit for Stock Purchasers
------------------------------------------------------------------
Brower Piven, A Professional Corporation disclosed that a class
action lawsuit has been commenced in the United States District
Court for the District of New Jersey on behalf of purchasers of
the common stock of The Great Atlantic & Pacific Tea Company, Inc.
during the period between July 23, 2009 and December 10, 2010,
inclusive (the "Class Period").
If you have suffered a net loss for all transactions in A&P common
stock during the Class Period, you may obtain additional
information about this lawsuit and your ability to become a lead
plaintiff by contacting Brower Piven at
http://www.browerpiven.com/, by email at hoffman@browerpiven.com,
by calling 410/415-6616, or at Brower Piven, A Professional
Corporation, 1925 Old Valley Road, Stevenson, Maryland 21153.
Attorneys at Brower Piven have combined experience litigating
securities and class action cases of over 60 years.
No class has yet been certified in the above action. Members of
the Class will be represented by the lead plaintiff and counsel
chosen by the lead plaintiff. If you wish to choose counsel to
represent you and the Class, you must apply to be appointed lead
plaintiff no later than November 8, 2011 and be selected by the
Court. The lead plaintiff will direct the litigation and
participate in important decisions including whether to accept a
settlement and how much of a settlement to accept for the Class in
the action. The lead plaintiff will be selected from among
applicants claiming the largest loss from investment in the
Company during the Class Period. You are not required to have
sold your shares to seek damages or to serve as a Lead Plaintiff.
The complaint accuses the defendants of violations of the
Securities Exchange Act of 1934 by virtue of the Company's failure
to disclose during the Class Period that A&P was facing increased
low-cost competition from retailers such as Wal-Mart and Target
Corp. which was negatively impacting the Company's business and
financial condition; that the Company's acquisition of Pathmark
was unfavorable because Pathmark's operations were in far worse
condition than had been represented to investors; and that A&P was
not operating according to internal expectations. After, on
December 10, 2010, A&P revealed that the Company was performing so
far below expectations and that its purported turnaround strategy
was failing such that the Company would likely be forced to file
for bankruptcy protection, the value of A&P shares declined
significantly.
If you choose to retain counsel, you may retain Brower Piven
without financial obligation or cost to you, or you may retain
other counsel of your choice. You need take no action at this
time to be a member of the class.
Charles J. Piven
Brower Piven, A Professional Corporation
Stevenson, Maryland
Tel: 410/415-6616
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a supermarket retailer, operating under a variety of
well-known trade names, or "banners" across the mid-Atlantic and
Northeastern United States. Before filing for bankruptcy in 2010,
A&P operated 429 stores in 8 states and the District of Columbia
under the following trade names: A&P, Waldbaum's, Pathmark,
Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super
Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees
prior to the bankruptcy filing.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In
its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
A&P obtained court approval for a new contract with C&S Wholesale
Grocers Inc., its principal supplier. The contract is designed to
save A&P $50 million a year when the supermarket operator emerges
from Chapter 11 reorganization.
A&P sold postpetition 12 Super-Fresh stores in the Baltimore-
Washington area for $37.83 million, plus the value of inventory.
Thirteen other locations didn't attract buyers at auction and were
closed mid-July 2011.
GREEKTOWN HOLDINGS: Bankr. Court Wants Trial on Moelis' Fees
------------------------------------------------------------
Bankruptcy Judge Walter Shapero denied Greektown Holdings,
L.L.C.'s motion in limine to preclude extrinsic or parol evidence
at hearing on Moelis & Company LLC's application for payment of
"Capital Transaction Fee" or "Restructuring Transaction Fee".
Moelis served as Greektown's investment banker.
The Debtors request (1) that the Court find the language of the
parties' engagement letter with respect to "Capital Transaction
Fees" and "Restructuring Transaction Fees" is unambiguous on its
face and (2) that the Court enter an order precluding the use of
extrinsic evidence to contradict that language at the hearing on
Moelis's fee application.
In its Objection, Moelis argues that (a) the terms of the
Engagement Letter unambiguously entitle Moelis to the requested
fees, and, in the alternative, (b) if the Court determines that
the Engagement Letter does not unambiguously entitle it to the
requested fees, the Court should find that the Engagement Letter
is ambiguous and extrinsic evidence should be admitted.
According to Judge Shapero, "[w]hat is discoverable is broader
than what might be admissible as evidence during the trial of a
proceeding. If . . . the very existence or non-existence of
ambiguity depends not only on cognizance of the terms of the
document itself, but also possibly on cognizance of 'customs,
practices, usages and terminology as generally understood in the
particular trade or business,' the latter is, and becomes, germane
to a decision relating to application of the parol evidence rule.
Such are thus fit subjects for discovery and, being such, preclude
a premature ruling of ambiguity or lack thereof, which is what
Debtors are seeking at this time."
"It is also conceivable that some kinds or types of parol evidence
might be admissible as evidence at a trial for some purpose or to
prove some point that might affect the outcome, even if the Court
were to then or ultimately conclude the provisions in question are
not ambiguous. While it might be nice for the Court and possibly
less expensive for the parties if some important evidence issues
could be determined, and the breadth and length of the trial
process thus possibly reduced, in [Greektown's] situation it is
preferable that the question of the existence of ambiguity and
what a decision on it portends by way of admissible evidence, be
decided in the context of the actual trial itself," Judge Shapero
said.
A copy of Judge Shapero's Sept. 12, 2011 Opinion is available at
http://is.gd/tbKeWBfrom Leagle.com.
About Greektown Casino
Based in Detroit, Michigan, Greektown Holdings, LLC, and its
affiliates -- http://www.greektowncasino.com/-- operate world-
class casino gaming facilities located in Detroit's historic
Greektown district featuring more than 75,000 square feet of
casino gaming space with more than 2,400 slot machines, over 70
tables games, a 12,500-square foot salon dedicated to high limit
gaming and the largest live poker room in the metropolitan Detroit
gaming market.
The Company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No.
08-53104). The Debtors hired Daniel J. Weiner, Esq., Michael E.
Baum, Esq., and Ryan D. Heilman, Esq., at Schafer and Weiner PLLC,
as their bankruptcy counsel; Judy B. Calton, Esq., at Honigman
Miller Schwartz and Cohn LLP, as their special counsel; Conway
MacKenzie & Dunleavy as their financial advisor, and Kurtzman
Carson Consultants LLC as claims, noticing, and balloting agent.
The Official Committee of Unsecured Creditors tapped Clark Hill
PLC as its counsel.
Greektown Holdings listed assets and debts of $100 million to
$500 million in its bankruptcy petition.
On June 1, 2009, the Debtors filed a proposed Chapter 11 Plan of
Reorganization. On Dec. 7, 2009, certain noteholder entities, the
Official Committee of Unsecured Creditors of the Debtors, and
Deutsche Bank Trust Company Americas, as indenture trustee,
proposed their own plan of reorganization for the Debtors. On
Jan. 22, 2010, the Bankruptcy Court entered an order confirming
the Noteholder Plan. The Plan was declared effective on June 30,
2010, after Greektown Casino Hotel obtained unanimous approval
from the Michigan Gaming Control Board on June 28 of the transfer
of the Company's ownership from the Sault Ste. Marie Tribe of
Chippewa Indian to new investors.
GREYSTONE LOGISTICS: Incurs $847,000 Net Loss in Fiscal 2011
------------------------------------------------------------
Greystone Logistics, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K reporting a net
loss of $847,204 on $20.50 million of sales for the fiscal year
ended May 31, 2011, compared with net income of $503,320 on $16.23
million of sales during the prior year.
The Company's balance sheet at May 31, 2011, showed $11.02 million
in total assets, $20.72 million in total liabilities and a $9.70
million total deficit.
HoganTaylor LLP, in Tulsa, Oklahoma, said Company has a working
capital deficit of $5,141,078, stockholders' deficit of
$14,206,077 and total deficit of $9,704,991. The independent
auditors noted that these deficits raise substantial doubt about
the Company's ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
http://is.gd/aYFwTk
About Greystone Logistics
Tulsa, Okla.-based Greystone Logistics, Inc. (OTC BB: GLGI.OB -
News) -- http://www.greystonelogistics.com/-- manufactures and
sells plastic pallets through its wholly owned subsidiary,
Greystone Manufacturing, LLC. Greystone sells its pallets through
direct sales and a network of independent contractor distributors.
Greystone also sells its pallets and pallet leasing services to
certain large customers direct through its President, Senior Vice
President of Sales and Marketing and other employees.
HARRY PAVILACK: Trustee Wants Chapter 7 Liquidation
---------------------------------------------------
David Wren at The Sun News reports that Robert Anderson, trustee
in charge of Myrtle Beach lawyer Harry Pavilack's personal
bankruptcy, has asked a judge to convert the case to a straight
liquidation, saying Pavilack will never have enough money to pay
off the $72.5 million in mostly real-estate related debts he owes
to creditors.
"The claims against him are in the tens and tens of millions of
dollars," the report quotes Robert Anderson, the Columbia-based
trustee who took over the case in April, as saying. "He won't
live long enough to fully repay his creditors."
Mr. Anderson said he continues to look for assets that
Mr. Pavilack might have fraudulently transferred between his
corporations in the months leading up to his bankruptcy. If
property involved in such transfers has value, Mr. Anderson could
ask a judge to reverse the transfer and give him authority to sell
it to raise money for creditors.
According to the report, Mr. Anderson also has asked a judge for
permission to conduct Rule 2004 examinations -- bankruptcy law's
version of a deposition -- with dozens of Pavilack's current and
previous business partners.
Based in Myrtle Beach, South Carolina, Harold H. Pavilack aka
Harry H. Pavilack filed for Chapter 11 bankruptcy protection
(Bankr. S.D. S.C. Case No. 10-06503) on Sept. 7, 2010. Judge John
E. Waites presides over the case. Cheevin Ty Gardner, Esq., at
Harry Pavilack And Associates, represents the Debtor. The Debtor
estimated assets of less than $50,000, and debts of between
$10 million and $50 million in its Chapter 11 petition.
HEARUSA INC: Terminates Employment of Interim CEO and CFO
---------------------------------------------------------
As reported in the TCR on Sept. 16, 2011, HearUSA, Inc. completed
the previously announced sale of substantially all of its assets
to Siemens Hearing Instruments, Inc. through Siemens' newly formed
subsidiary, Audiology Distribution, LLC, in a sale conducted under
the provisions of Section 363 of the U.S. Bankruptcy Code. The
U.S. Bankruptcy Court for the Southern District of Florida, West
Palm Beach Division, had previously entered the order approving
the sale on Aug. 17, 2011.
On Sept. 9, 2011, in connection with the closing requirements set
forth in the Asset Purchase Agreement dated as of July 29, 2011,
the Company terminated the employment of its interim chief
executive officer, Gino Chouinard, and its chief financial
officer, Frank Pu¤al.
In connection with the closing of the transactions contemplated by
the Asset Purchase Agreement, on Sept. 13, 2011, the Company filed
a Certificate of Amendment to its Restated Certificate of
Incorporation with the Delaware Secretary of State in order to
change its name to "HUSA Liquidating Corporation". The
Certificate of Amendment was effective on the date of filing.
A copy of the Certificate of Amendment to the Restated Certificate
of Incorporation is available for free at http://is.gd/tZighe
About HearUSA Inc.
HearUSA, Inc., which sells hearing aids in 10 states, filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No.
11-23341) on May 16, 2011, to sell the business for $80 million to
William Demant Holdings A/S. The Debtor said that assets are
$65.6 million against debt of $64.7 million as of March 31, 2010.
HearUSA owes $31.3 million to Siemens Hearing Instruments Inc.,
the principal supplier and primary secured lender.
Judge Erik P. Kimball presides over the case. Brian K. Gart,
Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at
Berger Singerman, P.A., represent the Debtor. The Debtor has
tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC,
investment banker; Development Specialist Inc., restructuring
advisor ans Joseph J. Luzinski as chief restructuring officer; and
AlixPartners LLC, as communications consultant. Trustee Services,
Inc., serves as claims and notice agent.
The Official Committee of Unsecured Creditors has been appointed
in the case. Robert Paul Charbonneau, Esq., and Daniel L. Gold,
Esq., at Ehrenstein Charbonneau Calderin, represent the Creditors
Committee.
An Official Committee of Equity Security Holders has also been
appointed. Mark D. Bloom, Esq., at Greenberg Traurig P.A., in
Miami, Fla., represents the Equity committee as counsel.
As reported in the TCR on Aug. 31, 2011, the U.S. Bankruptcy Court
for the Southern District of Florida approved on Aug. 17, 2011,
the sale of substantially all of the assets of the Company to
Audiology Distribution, LLC, a wholly owed subsidiary of Siemens
Hearing Instruments, Inc., who submitted the highest and best bid
for the assets in the July 29, 2011 Section 363 auction.
Pursuant to the terms of the Asset Purchase Agreement, the
purchaser has agreed to purchase the acquired assets for a
purchase price estimated at approximately $109 million. The
purchase price is comprised of $66.8 million in cash plus certain
assumed liabilities (which includes repayment or assumption of the
$10 million debtor-in-possession (DIP) financing provided by the
stalking horse bidder, William Demant Holdings A/S), plus the
payment of cure costs for assumed contracts, and the assumption of
various liabilities of the company.
HORIZON LINES: Closes on $25 Million Bridge Loan from Noteholders
-----------------------------------------------------------------
Horizon Lines, Inc., has closed on a bridge loan facility of up to
$25.0 million from certain of its 4.25% convertible note holders,
as part of the comprehensive refinancing agreement between the
company and its note holders announced late last month.
The Company also reached an agreement with its existing bank group
to amend its current credit facility to accommodate the bridge
loan.
The Company also has made the $7.0 million semi-annual interest
payment on its existing $330.0 million of 4.25% convertible notes.
The interest payment was originally due on Aug. 15, 2011, but the
company elected to make the payment within the 30-day grace
period.
"We very much appreciate the support of both our note holders and
lender group as we proceed with a transaction that will culminate
in the comprehensive refinancing of the company's capital
structure," said Michael T. Avara, executive vice president and
chief financial officer. "Our refinancing remains on schedule and
the new bridge loan, when combined with existing revolver
availability, provides us with more than $35 million of liquidity
to bridge the company to the closing of the refinancing."
At the closing of the refinancing of the Company's capital
structure, the $25.0 million amount of the bridge loan will be
exchanged for a like principal amount of debt that will be
included in the $100.0 million of new second-lien 13%-to-15%
secured notes to be issued as part of the refinancing.
Exchange Offer Documents Clarifications
The Company filed on Sept. 13, 2011, an amendment to its
Registration Statement on Form S-4 and an amendment to Schedule TO
relating to its previously announced exchange offer and consent
solicitation for its $330.0 million of existing unsecured 4.25%
convertible senior notes. The exchange offer documents were
revised in response to comments received by the Securities and
Exchange Commission to:
(i) further clarify what exchange consideration holders of the
2012 convertible notes who are non-U.S. citizens will
receive;
(ii) provide additional terms of the redemption notes;
(iii) revise the summary of the material terms of the new
convertible secured notes to be issued in the exchange
offer;
(iv) update the pro forma financial statements; and
(v) other updating and conforming changes.
The Company also provided the form of U.S. citizenship
questionnaire as an exhibit to the Registration Statement on Form
S-4. The SEC is continuing to review the Company's Registration
Statement on Form S-4 relating to the exchange offer and consent
solicitation and has not yet declared the Registration Statement
effective, which is a condition of the exchange offer, among
others.
As part of the exchange offer, the Company is also seeking
consents from all holders of the 2012 convertible notes to remove
substantially all of the restrictive covenants and certain events
of default from the indenture governing the 2012 convertible
notes.
The Company will exchange the 2012 convertible notes for shares of
the Company's common stock and new 6.0% series A convertible
senior secured notes and 6.0% series B mandatorily convertible
senior secured notes.
The Company said that it continues to work with the financial and
legal advisors to the informal committee of noteholders to
finalize the documentation and terms of the recapitalization plan,
of which the exchange offer and consent solicitation are a part.
The Company expects to complete the exchange offer of the existing
2012 convertible notes by the end of September, at which time it
expects to close the entire refinancing.
As discussed in the exchange offer documents, each participating
holder in the exchange offer must confirm their U.S. citizenship
by completing a questionnaire and certifying that such holder is a
U.S. citizen prior to the company accepting such holder's tender
and consent of its 2012 convertible notes in the exchange offer.
The completed questionnaire and any additional information,
correspondence or requests for reconsideration of citizenship
determination may be sent to the attention of Michael F. Zendan
II, Senior Vice President, General Counsel and Secretary of
Horizon Lines, Inc., who may be contacted by telephone at 704-973-
7029, by fax at 704-973-7010, or by e-mail at
MZendan@HorizonLines.com. The information and exchange agent for
the exchange offer and consent solicitation is Global Bondholder
Services Corporation.
About Horizon Lines
Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the
nation's leading domestic ocean shipping and integrated logistics
company. The Company owns or leases a fleet of 20 U.S.-flag
containerships and operates five port terminals linking the
continental United States with Alaska, Hawaii, Guam, Micronesia
and Puerto Rico. The Company provides express trans-Pacific
service between the U.S. West Coast and the ports of Ningbo and
Shanghai in China, manages a domestic and overseas service partner
network and provides integrated, reliable and cost competitive
logistics solutions.
The Company's balance sheet at June 26, 2011, showed
$794.96 million in total assets, $793.45 million in total
liabilities, and a stockholders' deficit of $1.51 million.
The Company expects to experience a covenant breach under the
Senior Credit Facility in connection with the amended financial
covenants upon the close of the third fiscal quarter of 2011.
As reported in the TCR on March 30, 2011, Ernst & Young LLP, in
Charlotte, North Carolina, expressed substantial doubt Horizon
Lines' ability to continue as a going concern, following the
Company's results for the fiscal year ended Dec. 26, 2010. The
independent auditors noted that there is uncertainty that Horizon
Lines will remain in compliance with certain debt covenants
throughout 2011 and will be able to cure the acceleration clause
contained in the convertible notes.
* * *
As reported by the TCR on Aug. 26, 2011, Standard & Poor's Ratings
Services lowered its long-term corporate credit rating on Horizon
Lines Inc. to 'SD' from 'CCC'.
The rating action on Horizon Lines follow the company's decision
to defer the interest payment on its $330 million senior
convertible notes due August 2012, exercising the 30-day grace
period. "Under our criteria, we view failure to make an interest
payment within five business days after the due date for
payment a default, regardless of the length of the grace period
contained in an indenture," said Standard & Poor's credit analyst
Funmi Afonja.
HOWREY LLP: Citibank Wants Chapter 7 Trustee to Take Over
---------------------------------------------------------
Liz Hoffman at Bankruptcy Law360 reports that Citibank NA asked a
California bankruptcy judge Friday to convert the Chapter 11
liquidation of Howrey LLP to Chapter 7 and require a trustee to
oversee the wind-down, citing an impasse in negotiations between
the now-dissolved law firm and its biggest creditor.
After allowing the firm to use about $5.8 million in cash
collateral in June, Citibank said it is losing confidence in
Howrey's ability to collect outstanding client bills, which would
secure much of the $49 million the firm still owes the bank,
according to Law360.
Leigh Jones at Thomson Reuters says Citibank filed papers Thursday
in San Francisco bankruptcy court asking to convert Howrey's
voluntary bankruptcy action to an involuntary one or, in the
alternative, to appoint a trustee in the ongoing voluntary action.
In either case, a trustee would handle the liquidation for the
benefit of the creditors.
According to the motion, Citibank is owed about $50 million and
has been funding the wind down of Howrey's business. Citibank's
motion states that it has loaned Howrey about $5.8 million to
conclude business, even as the law firm continues to owe it money
from before the bankruptcy filing. Citibank asserts that debtor
Howrey has repeatedly failed to adhere to a budget set for the
money that it should be recovering from former clients to pay
off its debt.
The report says Citibank's motion comes four days after Winston &
Strawn announced that former Howrey chairman Robert Ruyak had
joined the firm as a partner. Ruyak is on the Howrey dissolution
committee. When Winston made the announcement on Monday, Ruyak
said that much of his work in closing Howrey's was done. Mr.
Ruyak said Friday that he is working with Howrey bankruptcy
counsel to consider Howrey's next move. "I don't even know how
this works," Mr. Ruyak said. He said that he did not see a
connection with the announcement of his new job and Citibank's
motion. "We tried as best we could to keep the accounts
receivable moving along," he said.
The court converted the involuntary action to a voluntary Chapter
11 action in June, as Citibank and Howrey said they would work
together to close its books.
About Howrey LLP
Three creditors filed an involuntary Chapter 7 petition (Bankr.
N.D. Calif. Case No. 11-31376) on April 11, 2011, against the
remnants of the Washington-based law firm Howrey LLP. The filing
was in San Francisco, where the firm had an office. The firm
previously was known as Howrey & Simon and Howrey Simon Arnold &
White LLP. The firm at one time had more than 700 lawyers in 17
offices. The partners voted to dissolve in March.
The firm specialized in antitrust and intellectual-property
matters. The three creditors filing the involuntary petition
together have $36,600 in claims, according to their petition.
The involuntary chapter 7 petition was converted to a chapter 11
case in June at the request of the firm. In its schedules filed
in July, the Debtor disclosed assets of $138.7 million and
liabilities of $107.0 million.
H.S. RENTAL: Case Summary & 19 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: H.S. Rental Properties, Inc.
P.O. Box 22100
Albuquerque, NM 87154-2100
Bankruptcy Case No.: 11-14122
Chapter 11 Petition Date: September 16, 2011
Court: U.S. Bankruptcy Court
District of New Mexico (Albuquerque)
Judge: Robert H. Jacobvitz
Debtor's Counsel: Koo Im Sakayo Tong, Esq.
MOORE, BERKSON, & GANDARILLA, P.C.
P.O. Box 7459
Albuquerque, NM 87194
Tel: (505) 242-1218
Fax: (505) 242-2836
E-mail: kooimt@swcp.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 19 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nmb11-14122.pdf
The petition was signed by Phyllis Smith, president.
HUDSON HEALTHCARE: Scarinci Quits Due to Alleged Fraud by City
--------------------------------------------------------------
Molly Gamble at Becker's Hospital Review, a citing report from the
Herald News, says that Donald Scarinci, the former attorney for
Hudson Healthcare, the non-profit operator of Hoboken University
Medical Center, said he quit due to his fear that the city was
committing fraud by orchestrating the bankruptcy of its hospital.
Mr. Scarinci said Hoboken Municipal Hospital Authority, the
city-backed authority that oversees HUMC, withheld millions in
contractual payments to make it appear as though the facility was
in financial distress and push it into bankruptcy, according to
the report.
"I was the firsthand witness to a pattern of conduct by the
Hoboken Municipal Hospital Authority board members to intimidate,
threaten, control, abuse and attempt to force the CEO of [the
hospital] and members of the board to take actions adverse to its
charter and otherwise violate the laws of the state of New
Jersey," the report quotes Mr. Scarinci as saying.
About Hudson Healthcare
Hudson Healthcare Inc. is the nonprofit operator of Hoboken
University Medical Center in Hoboken, New Jersey. Hudson
Healthcare filed for Chapter 11 protection (Bankr. D. N.J. Case
No. 11-33014) in Newark on Aug. 1, 2011, estimating assets and
debt of less than $50 million. Affiliate Hoboken Municipal
Hospital Authority also sought Chapter 11 protection.
Judge Donald H. Steckroth presides over the cases. Attorneys at
Trenk, Dipasquale, Webster, et al., serve as counsel to the
Debtor. Epiq Bankruptcy Solutions, LLC is the noticing and claims
agent.
In August 2011, the New Jersey Health Planning Board voted to
recommend to the Commissioner of Health to approve the sale of
Hoboken University Medical Center to HUMC Holdco, a private group
that also owns Bayonne Medical Center. Holdco has pledged to
maintain it as a hospital for at least seven years. The proposed
transaction totals $91.7 million, including a $51.6 million cash
payment to extinguish Hobokens' bond guarantee. The new owners
have pledged to put $20 million in capital improvements in the
hospital.
JEFFERSON, AL: Approves Deal Over $3.2 Billion Bond Debt
--------------------------------------------------------
Jefferson County, Ala., on Friday approved a settlement with
creditors over $3.2 billion in bond debt, averting what would have
been the largest municipal bankruptcy on record.
Bankruptcy Law360 relates that the county's commissioners voted 4-
1 to approve the deal, which includes about $1.1 billion in
concessions from JPMorgan Chase & Co. and other bondholders that
financed an overhaul of the county's crumbling sewer system a
decade ago, a project ultimately mired in corruption and failed
derivatives transactions.
Commissioners of Jefferson County voted 4-1 on Friday to accept a
term sheet with creditors, allowing it restructure and partially
write off its $3.14 billion debt, the Birmingham News reported.
The decision provides a framework for a formal deal and signals
that -- for now -- the county will not file for Chapter 9
protection.
According to DailyFinance, the deal brings state lawmakers into
the negotiations, and county commissioners say bankruptcy is still
a possibility. A central tenet of the settlement increases sewer
prices for residents over the next several years, including an
average $3-a-month increase in citizens' wastewater bills in the
first year of the rate hike. The settlement also outlines a
program for low-income assistance.
Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes
that the agreement hinges on creation of a sewer authority to take
over ownership of the sewer system and raise rates. The state
legislature must approve the compromise through a special session
the governor will convene. The re-negotiated debt would be backed
by a so-called moral obligation of the state. A definitive
agreement also must be drafted and negotiated. The workout, if
implemented, would avoid the largest municipal bankruptcy in U.S.
history. JPMorgan Chase & Co. is providing $750 million of the
concessions.
Statement from Receiver
Jefferson County sewer receiver John Young, Jr. said that
Jefferson County Commissioners did the right thing in approving a
conceptual settlement with its wastewater-related creditors
allowing all parties to begin working toward a final settlement of
the County's wastewater debt crisis.
"This courageous action taken by the County Commission is a
critical first step toward avoiding the largest municipal
bankruptcy in U.S. history and starts us down a path that allows
the County to begin to lift the dark cloud that has been hanging
over Jefferson County," said Young.
Young spent several months facilitating settlement discussions
between the County and its creditors, but cautioned that a great
deal of work still needs to be done.
"This is the first step of the settlement process, but it is a
very important day for all residents of Jefferson County," said
Young. "The terms have many milestones the County, State and
creditors need to meet to reach the day when all terms of the
settlement are in place and the County's wastewater debt is
refinanced."
Young has said from the beginning that a negotiated solution was
the County's best option and the most important thing that could
happen for the future of the wastewater system. He said
stabilizing the massive problem with the system's finances ensures
that customers can count on the right investment being made that
will protect the public health and environment as well as minimize
future rate increases.
Young said the work done by Commissioners David Carrington and
Jimmy Stephens over the past several weeks was critical to the
final outcome.
"It took the Commissioners being directly involved in negotiations
to iron out the important details and allow the parties to reach a
place where they could agree to concepts included in the term
sheet," said Young.
Young also commended the work of Governor Robert Bentley and his
office, and especially the role played by his Chief of Staff,
David Perry:
"From the beginning, the involvement of the Governor's office, and
especially his Chief of Staff, David Perry, was a game-changer,"
said Young. "While most of the attention has been focused on the
sewer debt, the reality is that the increasing pressure on the
general fund has also put the County in an extremely difficult
situation. The Commission and the Governor wanted to solve both
issues and the Governor's involvement offers that possibility to
the County. I think it is fair to say we would not be here were
it not for the courage of the County Commission and the efforts of
Governor Bentley and his team."
The Commission voted to accept a conceptual settlement that
includes:
-- A reduction of the sewer debt by more than $1 billion due to
concessions from the creditors. The term sheet calls for
refinancing approximately $2.05 billion in debt. Refinancing
would be completed by June 30, 2012.
-- Based on the term sheet, the maximum increase in residential
sewer rates will be 8.2% annually over the next three years
with 3.25% increases projected after the first three years.
The average monthly residential wastewater bill will increase
approximately $3 in the first year of the rate increase.
-- Implementation of a low-income assistance program.
-- Subject to approval of the State Legislature, creation of a
Government Utility Service Corporation (GUSC) to manage the
wastewater system once the debt is refinanced.
-- Enough money to fund the next 40 years of currently projected
capital improvements for the wastewater system without any
additional borrowing.
"To be able to know that money will be available to continue to
invest in the wastewater system is a tremendous benefit to the
customers and the community," said Young. "Our ability to keep
the public safe and to protect the environment is based on the
ability to continue to invest in the wastewater system."
Young said all parties will begin work on the next steps needed to
finalize the agreement. These include designing and funding the
low-income assistance program, finalizing the rate increase
schedule, setting a public hearing on rates and beginning work on
the definitive settlement agreements between all parties as well
as supporting the County and the Governor with the State
Legislature.
"There is much work to be done," said Young, "but today's action
by the Commission is a huge step forward in solving one of the
most difficult issues ever faced by any community. The Commission
is to be applauded for their courage and dedication to taking this
step toward solving the problem."
Young said the conceptual agreement maintains his role as receiver
until the new corporation is in place and the debt is refinanced.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000. It ended its 2006 fiscal year with a
$42.6 million general fund balance, according to Standard &
Poor's.
Jefferson County is trying to restructure $3.14 billion in sewer
debt. A bankruptcy by Jefferson County stands to be the largest
municipal bankruptcy in U.S. history. It could beat the record of
$1.7 billion set by Orange County, California in 1994.
In September 2010, Alabama Circuit Court Judge Albert Johnson
named John S. Young Jr. LLC as receiver for the sewer system.
Jefferson County has retained Kenneth Klee, Esq., at Klee Tuchin
Bogdanoff & Stern LLP to represent the county in the event of
bankruptcy. Mr. Klee is considered to be a municipal-bankruptcy
expert, having handled Orange County, Calif.'s bankruptcy case in
1994.
A Chapter 9 filing Jefferson County would be the largest in U.S.
municipal history.
JMR DEVELOPMENT: Case Summary & 18 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: JMR Development Group, Corp.
aka Lighthouse Hotel & Casino
aka Best Western Hotel & Casino Cofresi
aka Tropical Lighthouse-Inn Hotel
P.O. Box 1317
Cabo Rojo, PR 00623-1317
Bankruptcy Case No.: 11-07907
Chapter 11 Petition Date: September 16, 2011
Court: United States Bankruptcy Court
District of Puerto Rico (Ponce)
Debtor's Counsel: Charles Alfred Cuprill, Esq.
CHARLES A CURPILL, PSC LAW OFFICE
356 Calle Fortaleza
Second Floor
San Juan, PR 00901
Tel: (787) 977-0515
E-mail: cacuprill@cuprill.com
Scheduled Assets: $12,732,474
Scheduled Debts: $48,587,611
Affiliate that sought Chapter 11 protection:
Petition
Debtor Case No. Date
------ -------- ----
JMR Tourist Development Group, Corp. 11-07911 9/16/11
Scheduled Assets: $5,432,693
Scheduled Debts: $79,484,465
The petitions were signed by Jorge III Medina Ramirez, president.
A. JMR Development Group's List of 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Banco Popular Co-debtor in $12,925,682
De Puerto Rico Affiliate's
Bankruptcy Dept
GPO Box 366818
San Juan, PR 00936
Karimar Construction Construction work $2,782,673
Inc.
P.O. Box 8000
Aguada, PR 00602
Bermudez, Longo, Construction work $899,490
Diaz-Masso SE
P.O. Box 191213
San Juan, PR 00919-1213
JER Architectural Const. contractor $124,000
Project Management & Construction work $65,000
Engineering
Tamrio, Inc. Const. materials $34,979
Victor E Rivera Consulting engineers $21,035
Associates inc.
PR Electric Power Electric power $15,604
(PREPA) services
Aut Acueductos Water services $11,914
Alcantarillados
Maderas Alfa, Inc. Const. materials $3,030
State Insurance Fund Workmen's compensa- $471
Corp. tion insurance
Departamento de Income tax withheld $470
Hacienda de PR
Jonas Saez Plaza Complaint $1
Manuel Jose Morell Suit- Tort Action $1
Martienez
Ruben Ramos Alvarez Complaint $1
Hector J Medina Complaint $1
Rodriguez
Angel D Qui¤ones Complaint $1
Maldonado
Limarie Rodriguez Complaint $1
Correa
B. JMR Tourist's List of five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Banco Popular De Co-Debtor in $38,416,562
Puerto Rico Affiliate's
Bankcruptcy Department
GPO Box 366818
San Juan PR 00936
Aut Acueductos Water services $16,806
Alcantarillados
P.O. Box 7066
San Juan, PR 00916-7066
CRIM Personal property $4,587
P.O. Box 195387 taxes
San Juan, PR 00919-5387
Departamento de Income tax withheld $4,134
Hacienda de PR
State Insurance Fund Workmen compensation $550
Corp. insurance
JOHN HENRY: Moody's Revises Outlook to Positive; Affirms B2 CFR
---------------------------------------------------------------
Moody's Investors Service revised the rating outlook to positive
for John Henry Holdings, Inc. ("JHH"), a wholly owned subsidiary
of Multi Packaging Solutions, Inc. ("MPS"). Moody's also affirmed
the B2 Corporate Family Rating ("CFR"), B2 Probability of Default
Rating, and B2 ratings on the senior secured credit facilities.
Rating Affirmations:
Issuer: John Henry Holdings, Inc.
-- Corporate Family Rating, B2
-- Probability of Default Rating, B2
-- Senior Secured Credit Facilities, B2 (LGD3 47%)
Outlook, Positive (revised from stable)
RATINGS RATIONALE
The revision to a positive outlook reflects Moody's view that
improved market conditions, cost reduction activities, and
acquisition-related synergies will enable the company to continue
to improve its operating income and cash flow. Credit metrics are
currently strong for the rating category, but the company used the
majority of its balance sheet cash and assumed incremental debt to
finance a recent strategic acquisition. The outlook acknowledges
that strengthening credit metrics and improved liquidity could
support a rating upgrade over the near-term as the company
integrates the acquired business and demonstrates progress towards
completing business realignment and expansion activities. The
outlook revision further reflects the benefits of size and scale
improvements from growth achieved over the past several years.
The B2 CFR continues to reflect small scale, moderate debt
leverage and an acquisitive financial philosophy. Moody's
estimates leverage in the high 3 times Debt/EBITDA range pro forma
for the acquisition of CD Cartondruck AG in June 2011, which
Moody's views as complementary to the company's existing portfolio
of print and packaging products. The rating favorably considers
long-term customer relationships, diverse and relatively
recession-resistant end markets, and a track record of
successfully integrating acquired businesses. Moody's continues to
believe the company has good liquidity to support operations over
the near-term due to expectations for positive free cash flow and
minimal usage of the undrawn $30 million revolving credit
facility.
We could upgrade the CFR if the company successfully integrates
Cartondruck, maintains a good liquidity position while funding
integration expenses and expansionary capital spending, and is
expected to maintain leverage below 4 times Debt/EBITDA and
interest coverage above 2 times (EBITDA-CapEx)/Interest. Negative
pressure could develop if liquidity deteriorates, profitability
declines, or management undertakes debt-financed acquisitions such
that leverage rises above 5 times and interest coverage falls
below 1.5 times.
The principal methodology used in rating John Henry was the Global
Paper and Forest Products Industry Methodology published in
September 2009. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
John Henry Holdings, Inc., a wholly-owned subsidiary of Multi
Packaging Solutions, Inc., is a leading print and packaging
company for the healthcare, horticultural, media, and value-added
consumer end markets. The company produces products such as
folding cartons, blister cards, labels, inserts/outserts, pixie
tags, and flexible packaging. Headquartered in New York, NY, the
company is privately held and reported revenues of $500 million
for the twelve months ended March 31, 2011.
KIEBLER RECREATION: Court OKs Key Agreement on Asses Sale
---------------------------------------------------------
The Hon. Randolph Baxter of the U.S. Bankruptcy Court for the
Northern District of Ohio approved the stipulation related to the
sale of substantially all assets of Kiebler Recreation, LLC.
The stipulation was entered among David Simon, Esq., as trustee
for the Debtor's estate, The Huntington National Bank, The
Official Committee of Unsecured Creditors, Thompson Hine, formerly
the attorneys for the Debtor, Kiebler Recreation LLC, Brouse
McDowell, special counsel to Kiebler, Inglewood Associates,
financial advisors to Kiebler, Hahn Loeser + Parks LLP, attorneys
for the Official Committee of Unsecured Creditors and RSM
McGladrey, Inc., financial advisors to the Committee.
The stipulation provides for, among other things:
-- At the discretion of Huntington after analyzing the Debtor's
financial condition, Huntington may provide the Debtor with
financing. The Chapter 11 Loan would be secured by all of the
Debtor's assets (except for the Fairways Condominiums and any
chapter 5 causes of action which the Debtor may decide to
commence) including all cash collateral of the Debtor. The
Chapter 11 loan will be repaid as a superpriority
administrative expense from the sale proceeds of the Debtor's
assets and cash in the Debtor's operating account. No portion
of the Chapter 11 Loan will be used for the payment of any
professional fees or expenses. Huntington's intent is to act
in good faith toward providing sufficient Chapter 11 financing
to provide the Debtor with funds to operate through the
conclusion of the sale process.
-- the Debtor will retain Jones Lang Lasalle America, Inc. and
Alpine Realty Capital, LLC, who have agreed to co-market the
Kiebler assets (the Resort) on a contingency, success fee
basis. Barry Lefkowitz will assume the position of
restructuring officer to assist the trustee in the management
of the Debtor's operations for the duration of the sale process
through the closing of a transaction. The RO is necessary
because, among other reasons, Kiebler's chief financial officer
resigned. The RO will be directly paid from operating funds.
The RO, with the assistance of other employees of the Debtor,
will advise the trustee regarding the financial and cash
management functions and in connection with the investment
banker, will generate and provide financial information
required to prepare an offering memorandum to potential
purchasers of the Resort. In addition, the RO will provide
advice and guidance to the trustee on the economical operation
of the Resort and will provide specific recommendations
regarding cost cutting which will not impair the continuing
viability of the resort. The RO will not be responsible for any
aspects of the Debtor's bankruptcy not directly related to the
business operations of the Resort or its sale. Moreover, the
RO will not hold the Debtor's attorney client privilege.
-- The parties agree that Huntington holds an allowed secured
claim in the amount of $16.0 million, together with collection
costs which are in excess of $1 million, which claim is secured
by first priority liens on the Debtor's assets including, but
not limited to, the hotel, ski areas, golf courses and related
amenities (the Resort) and certain condominiums (the Ridgeview
Condominiums) but explicitly excluding the Fairways
Condominiums, as set forth in Huntington's secured proof of
claim filed in the Debtor's chapter 11 case, including a first
priority perfected security interest in all cash proceeds and
cash held by the Debtor except proceeds related to the Fairways
Condominiums.
-- Huntington will be paid its Allowed Claim at the closing of
any sale of the Debtor's assets. However, pursuant to the
terms of the Agreement, Huntington will provide a carve out
from the net purchase price paid to Huntington.
-- To the extent that there is a stalking horse bidder, any
such stalking horse bidder and any asset purchase agreement
will be approved in writing by Huntington before the Trustee
signs the APA. If the stalking horse bidder is not the
selected bidder because of a higher and better offer which
actually is consummated, the stalking horse bidder may be
entitled to reasonable expense reimbursement approved by the
Bankruptcy Court which will be no greater than $50,000.
-- Huntington will prepare a bid procedures order which will
permit Huntington to credit bid as set forth below up to an
amount which represents (a) the Allowed Claim plus (b) the
unpaid amount of the Chapter 11 Loan. If Huntington is the
successful bidder through a credit bid, any applicable carve
out payments will not be due and owing until the earlier of (i)
the date on which the Debtor's property is ultimately sold by
Huntington, or (ii) 12 months from the bankruptcy sale to
Huntington.
-- Under the bid procedures, all of the Debtor's assets will be
sold in three separate, contemporaneous sales: (i) the Resort,
(ii) the Ridgeview Condominiums, and (iii) the Fairways
Condominiums. The Parties agree that, as part of its Allowed
Claim, Huntington holds a first priority lien on the Resort in
the amount of $13,364,000, inclusive of collection costs, and a
first priority lien on the Ridgeview Condominiums in the amount
of $3,636,000 and that sale proceeds on these properties will
be allocated accordingly for purposes of distribution under
the agreement. The Parties will agree that no portion of the
purchase price will be allocated to the one-acre vacant real
property located in Pennsylvania, the titled motor vehicles, or
the shares in Kiebler Sewage Services, Inc. and Kiebler Water
Services, Inc. The purchaser will also be required to assume
the equipment leases or purchase the equipment subject to such
leases.
-- The hearing on the sale of the Debtor's assets will take
place on Sept. __, 2011 and the bankruptcy sale of the Debtor's
assets must be completed no later than Sept. 30, 2011. As a
condition to the agreement, the parties will sign a stipulated
order for modification of the automatic stay which will provide
that Huntington is allowed to continue its foreclosure action
without further order of the Court, which will be held in
escrow by Huntington pending the completion of the sale. In
the event that the sale is not completed by Sept. 30, 2011, for
any reason, Huntington is entitled to present the stipulated
order to the Court for its consideration and approval and the
parties to the agreement agree not to oppose the modification
of the automatic stay or any foreclosure action commenced by
Huntington in state court.
Huntington is represented by:
Stephen A. Donato, Esq.
Joseph Zagraniczny, Esq.
BOND SCHOENECK & KING
One Lincoln Center
Syracuse, NY 13202-1355
Tel: (315) 218-8000
Fax: (315) 218-8100
E-mail: sdonato@bsk.com
jzagraniczny@bsk.com
The Committee is represented by:
Daniel A. DeMarco, Esq.
HAHN LOESER & PARKS LLP
200 Public Square, Suite 2800
Cleveland, OH 44114-2301
Tel: (216) 621-0150
Fax: (216) 241-2824
E-mail: dademarco@hahnlaw.com
The Debtor's financial advisor is:
John K. Lane, managing director
INGLEWOOD ASSOCIATES, LLC
22239 Parnell Road
Shaker Heights, OH 44122
Tel: (216) 839-6700
E-mail: jlane@ingw.com
The Committee's financial advisor is:
T. Steven Blake
RSM MCGLADREY, INC.
1001 Lakeside Ave E, Suite 1400
Cleveland, OH 44114
Tel: (216) 523-1900
E-mail:t.steven.blake@mcgladrey.com
The U.S. Trustee is represented by:
Ronna Jackson, Esq.
U.S. Department of Justice
Office of the U.S. Trustee
H.M. Metzenbaum U.S. Courthouse
201 Superior Ave., No. 441
Cleveland, OH 44114-1240
Tel: (216) 522-7800, ext. 253
Fax: (216) 522-7193
E-mail: Ronna.G.Jackson@usdoj.gov
About Kiebler Recreation
Peek'n Peak Resort -- http://www.pknpk.com/-- is a recreational
and leisure facility in Findley Lake, New York.
Kiebler Recreation, LLC, dba Peek'n Peak Resort, filed for Chapter
11 bankruptcy protection (Bankr. N.D. Ohio Case No. 10-15099) on
May 26, 2010. Robert C. Folland, Esq., at Thompson Hine LLP, has
withdrawn as counsel to the Debtor. The Company estimated assets
and debts at $10 million to $50 million as of the Petition Date.
David O. Simon was appointed by the U.S. Trustee as acting
bankruptcy trustee to the Debtor on June 8, 2011. Kohrman,
Jackson & Krantz P.L.L. serves as counsel to the Trustee. The
Trustee tapped Jones Lang LaSalle Americas, Inc., as investment
banker/business broker to market the Debtor's assets.
An affiliate, Kiebler Slippery Rock, LLC, filed a separate Chapter
11 petition on September 25, 2009 (Bankr. N.D. Ohio Case No. 09-
19087).
KIEBLER RECREATION: Ch. 11 Trustee Selling Most Assets
------------------------------------------------------
The Hon. Randolph Baxter of the U.S. Bankruptcy Court for the
Northern District of Ohio authorized David Simon, Esq., as trustee
for Kiebler Recreation, LLC to sell substantially all of the
Debtor's assets, except for the Fairways Condominiums.
As reported in the Troubled Company Reporter on Aug. 26, 2011,
Scott Enterprises, the Erie-based hospitality development company
with significant local holdings, has emerged as the top bidder for
the Peek'n Peak Resort.
The TCR reported that Scott submitted the top bid of $11.3 million
in proceedings held in the Court where the Resort's former owners,
Kiebler Recreation LLC, filed for Chapter 11 protection in May
2010.
Nick Scott Jr., Scott Enterprises vice president, said his family-
run company will evaluate the entire Peek'n Peak operation before
determining what improvements and renovations need to take place,
the TCR added.
The Court ordered that the sale proceeds will be allocated based
on the Huntington National Bank's allowed claim, under which
Huntington holds a first priority lien on the Resort in the amount
of $12,144,000, inclusive of collection costs, and a first
priority lien on the Ridgeview Condominiums in the amount of
$3,636,000. Huntington will be paid at the closing $12,144,000
from the net purchase price. Any amounts received on the Resort
in excess of $12,144,000 of the net purchase price will be split
with 50% of the proceeds paid to Huntington and 50% of the
proceeds allocated to the Cross Estates -- the estates of Norbert
Cross and Eugene Cross.
The Cross Estates will receive any and all proceeds of the sale of
the Resort in excess of $13,144,000 and any and all proceeds of
the sale of the Ridgeview Condominiums in excess of $3,636,000 up
to the full amount of the Cross Estates' allowed secured claim and
the right to receive the funds will be the Cross Estates' only
recovery and right as a secured creditor in this chapter 11 case.
No portion of the purchase price will be allocated to the one-acre
vacant real property located in Pennsylvania, the titled motor
vehicles, or the shares in Kiebler Sewage Services, Inc. and
Kiebler Water Services, Inc.
Huntington Bank does not hold a security interest in the Fairways
Condominiums. The trustee will obtain a separate order approving
procedures for the sale of the Fairways Condominiums.
Other conditions to the sale includes, among other things:
-- Any purchaser of the property will also be required to
assume the equipment leases or purchase the equipment located
on or used in conjunction with the property in which Huntington
has a secured interest and is the lessor of a lease;
-- Any purchaser of the property may offer purchase or lease
equipment located on the property which is not subject to a
Huntington lien or a Huntington lease, excluding equipment
owned, financed and leased by Bottling Group LLC DBA Pepsi
Beverages Co. and by Textron Financial Corp., and if the
purchaser elects not to purchase or lease any item of Non-HNB
Equipment, the trustee will, after obtaining proper Court
approvals, tender said Non-HNB Equipment to the owner or
lessor.
-- Any purchaser of the property may purchase the certain
equipment located on the property that is subject to the first
lien and security interest of Textron, with the proceeds of
sale being paid to Textron to the full extent of its allowed
secured claim, and excess proceeds, if any, being paid to
Huntington pursuant to its junior lien and security interest.
If the purchaser and Textron cannot agree upon the terms of
sale of the Textron Equipment, the trustee will, after
obtaining proper Court approvals, surrender said Textron
Equipment to Textron.
-- The equipment owned by Pepsi and located at the Resort, is
not among the assets offered for sale. Any agreement to
purchase or lease the Pepsi Equipment must be negotiated
directly with Pepsi.
-- The Successful Bidder will close the purchase agreement by
Sept. 27, 2011.
-- Huntington agrees to provide a carve out from the net
purchase price paid to Huntington provided that the remainder
of the net purchase price is paid directly to Huntington at
closing until the Allowed Claim is satisfied.
-- Huntington will be permitted the right to credit bid on the
property up to an amount which represents (a) the Allowed Claim
plus (b) the unpaid amount of the DIP Loan, if any.
On 27 July, 2011, the Court approved a settlement relating to the
sale, among the trustee, Huntington, the Official Committee of
Unsecured Creditors, overruling the Cross Estates' objection;
sustaining the objection of Pepsi, the response of the trustee;
and the reply of Huntington.
About Kiebler Recreation
Peek'n Peak Resort -- http://www.pknpk.com/-- is a recreational
and leisure facility in Findley Lake, New York.
Kiebler Recreation, LLC, dba Peek'n Peak Resort, filed for Chapter
11 bankruptcy protection (Bankr. N.D. Ohio Case No. 10-15099) on
May 26, 2010. Robert C. Folland, Esq., at Thompson Hine LLP, has
withdrawn as counsel to the Debtor. The Company estimated assets
and debts at $10 million to $50 million as of the Petition Date.
David O. Simon was appointed by the U.S. Trustee as acting
bankruptcy trustee to the Debtor on June 8, 2011. Kohrman,
Jackson & Krantz P.L.L. serves as counsel to the Trustee. The
Trustee tapped Jones Lang LaSalle Americas, Inc., as investment
banker/business broker to market the Debtor's assets.
An affiliate, Kiebler Slippery Rock, LLC, filed a separate Chapter
11 petition on September 25, 2009 (Bankr. N.D. Ohio Case No. 09-
19087).
KIEBLER RECREATION: Ch. 11 Trustee Selling Fairways Condominiums
----------------------------------------------------------------
David O. Simon, the Chapter 11 trustee in the bankruptcy estate of
Kiebler Recreation, LLC, asks the U.S. Bankruptcy Court for the
Northern District of Ohio authorize the sale of certain real
property and personal property known as the Fairways Condominiums
contiguous to and part of the Peek 'N Peak Resort, located in
French Creek, New York.
The Trustee related that PNC Bank, National Association, as
successor to National City Bank asserted a secured claim in the
Fairways Condominiums. The Trustee has given notice to PNC that
he has reason to challenge PNC's secured claim.
PNC and the Trustee have settled the claims between them by
entering into a settlement term sheet, which is subject to the
approval of the Bankruptcy Court.
The settlement provides:
-- that PNC and the trustee agree that a sale of the Fairways
Condominiums is in the best interests of the Debtor's estate;
-- for a carve out from PNC's lien position, which first will
be applied to the payment of the trustee's fees and expenses
and those of his counsel associated with the alleged lien
avoidance issue and the sale of the Fairways Property -- 50% of
the balance of the carve out would flow into the estate of the
Debtor to be distributed according to the Bankruptcy Code The
settlement provides for a carve out from PNC's lien position,
which first will be applied to the payment of the trustee's
fees and expenses and those of his counsel associated with the
alleged lien avoidance issue and the sale of the Fairways
Property, and 50% of the balance of the carve out would flow
into the estate of the Debtor to be distributed according to
the Bankruptcy Code;
-- for a significant percentage (36%) of the sale proceeds from
the Fairways Property to be carved out of the PNC lien position
and paid to benefit the estate, first to pay the lien avoidance
and sale expenses of the Trustee, and then to benefit of
creditors and for pre-trustee professional administrative
creditors;
-- PNC will be permitted to credit bid on the Fairways
Property up to the amount of its Allowed Claim ($2,845,788);
and
-- the successful bidder will close the Fairways Purchase
Agreement by Sept. 28, 2011. The trustee scheduled a Aug. 24
auction for the asset.
The Chapter 11 Trustee is represented by:
Mary K. Whitmer, Esq.
James W. Ehrman, Esq.
David S. Blocker, Esq.
KOHRMAN JACKSON & KRANTZ PLL
1375 E. 9th Street, 20th Floor
One Cleveland Center
Cleveland, OH 44114-1793
Tel: (216) 696-8700
Fax: (216) 621-6536
E-mail: mkw@kjk.com
jwe@kjk.com
dsb@kjk.com
About Kiebler Recreation
Peek'n Peak Resort -- http://www.pknpk.com/-- is a recreational
and leisure facility in Findley Lake, New York.
Kiebler Recreation, LLC, dba Peek'n Peak Resort, filed for Chapter
11 bankruptcy protection (Bankr. N.D. Ohio Case No. 10-15099) on
May 26, 2010. Robert C. Folland, Esq., at Thompson Hine LLP, has
withdrawn as counsel to the Debtor. The Company estimated assets
and debts at $10 million to $50 million as of the Petition Date.
David O. Simon was appointed by the U.S. Trustee as acting
bankruptcy trustee to the Debtor on June 8, 2011. Kohrman,
Jackson & Krantz P.L.L. serves as counsel to the Trustee. The
Trustee tapped Jones Lang LaSalle Americas, Inc., as investment
banker/business broker to market the Debtor's assets.
An affiliate, Kiebler Slippery Rock, LLC, filed a separate Chapter
11 petition on September 25, 2009 (Bankr. N.D. Ohio Case No. 09-
19087).
KIEBLER RECREATION: Judge Morgenstern-Clarren Now Handles Case
--------------------------------------------------------------
Kiebler Recreation, LLC, notified all creditors and parties-in-
interest that the U.S. Bankruptcy Court for the Northern District
Of Ohio has transferred its Chapter 11 case from Judge Randolph
Baxter to Judge Pat E. Morgenstern-Clarren effective Aug. 16,
2011.
About Kiebler Recreation
Peek'n Peak Resort -- http://www.pknpk.com/-- is a recreational
and leisure facility in Findley Lake, New York.
Kiebler Recreation, LLC, dba Peek'n Peak Resort, filed for Chapter
11 bankruptcy protection (Bankr. N.D. Ohio Case No. 10-15099) on
May 26, 2010. Robert C. Folland, Esq., at Thompson Hine LLP, has
withdrawn as counsel to the Debtor. The Company estimated assets
and debts at $10 million to $50 million as of the Petition Date.
David O. Simon was appointed by the U.S. Trustee as acting
bankruptcy trustee to the Debtor on June 8, 2011. Kohrman,
Jackson & Krantz P.L.L. serves as counsel to the Trustee. The
Trustee tapped Jones Lang LaSalle Americas, Inc., as investment
banker/business broker to market the Debtor's assets.
An affiliate, Kiebler Slippery Rock, LLC, filed a separate Chapter
11 petition on September 25, 2009 (Bankr. N.D. Ohio Case No. 09-
19087).
KT SPEARS: Court Continued Hearing on Case Dismissal Until Oct. 3
-----------------------------------------------------------------
The Hon. John E. Waites of the U.S. Bankruptcy Court for the
Southern District of Texas has continued until Oct. 3, 2011, at
9:00 a.m., the hearing to consider the request to dismiss the
Chapter 11 case of KT Spears Creek, LLC, for bad faith filing.
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.
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.
LAS VEGAS MONORAIL: Revises Plan to Add Protection to Investors
---------------------------------------------------------------
Tim O'Reiley at THE Las Vegas Review-Journal reports that the Las
Vegas Monorail has filed a revised version of its bankruptcy
reorganization plan that should clear away the last barriers to
exiting Chapter 11.
The report notes that that the changes are mainly technical,
designed to give added protections to the investors who hold the
bonds with the highest repayment priority. For example, the IOUs
the bondholders will receive from the case will be called bonds
instead of notes, the monorail company can borrow as much as $6
million for each of two new stations only after its board of
directors unanimously approves it, and the bondholders hold a
potential veto over the financing of any expansion.
The Las Vegas Review-Journal notes the bondholders, owed $500.2
million, will be repaid with three sets of new bonds totaling
$44.5 million. The legal disputes between these bondholders and
another set of bondholders owed $158.7 million were settled in
August.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
recounts that the existing reorganization plan would have paid a
small portion of secured debt. Unsecured creditors, with claims
totaling up to $175,000, would have been paid fully in
installments over a year. The plan allowed them to vote. If the
existing plan were confirmed, holders of $500 million in first-
lien bonds would have received $15 million in new 10 percent
first-lien notes to mature in June 2019. The first-lien
bondholders would also share $19.5 million in second-lien notes to
mature in June 2019. For their unsecured deficiency claim, the
first-lien bondholders were put into a separate class to receive
$10 million in third-lien notes. Much of the interest on new debt
would have been paid with more debt. Holders of $158.7 million in
second-tier bonds and $48.5 million in third-tier bonds were to
receive nothing in the plan.
A hearing on the bankruptcy plan is scheduled for Nov. 14.
About Las Vegas Monorail
Las Vegas, Nevada-based Las Vegas Monorail Company, organized by
the State of Nevada in 2000 as a nonprofit corporation, owns and
manages the Las Vegas Monorail. The Monorail is a seven-stop,
elevated train system that travels along a 3.9-mile route near the
Las Vegas Strip. LVMC has contracted with Bombardier Transit
Corporation to operate the Monorail. Though it benefits from its
tax-exempt status due to being a nonprofit entity, LVMC claims to
be the first privately-owned public transportation system in the
nation to be funded solely by fares and advertising. LVMC says it
receives no governmental financial support or subsidies.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Nev. Case No. 10-10464) on Jan. 13, 2010. Gerald M. Gordon, Esq.,
at Gordon Silver, assists the Company in its restructuring effort.
Alvarez & Marsal North America, LLC, is the Debtor's financial
advisor. Stradling Yocca Carlson & Rauth is the Debtor's special
bond counsel. Jones Vargas is the Debtor's special corporate
counsel. The Company disclosed $395,959,764 in assets and
$769,515,450 in liabilities as of the Petition Date.
In April 2010, bondholder Ambac Assurance Corp. lost in its bid to
halt the bankruptcy after U.S. Bankruptcy Judge Bruce A. Markell
ruled that Monorail isn't a municipality and is therefore entitled
to reorganize in Chapter 11. U.S. District Judge James Mahan in
Reno upheld the ruling in October 2010.
LAW ENFORCEMENT: Mark White Resigns Officer Positions
-----------------------------------------------------
On Sept. 8, 2011, Mark White gave notice to Law Enforcement
Associates Corporation that effectively immediately he was
resigning from his positions as an officer of the Company and of
the Company's wholly-owned subsidiary, Law Enforcement Associates,
Inc. Since January of 2006, Mr. White has served as the Company's
Senior Vice President of Technical Operations. Effective
Sept. 30, 2011, he will resign from his role as Senior Vice
President of Technical Operations.
About Law Enforcement
Law Enforcement Associates Corporation was formed on Dec. 3, 2001
when the Company acquired all the outstanding stock of Law
Enforcement Associates, Inc., a New Jersey company, incorporated
in 1972, doing business in North Carolina. The Company's
operations consist of the manufacturing and providing of
surveillance and intelligence gathering products and vehicle
inspection equipment. Products are used by law enforcement
agencies, the military, security, and correctional organizations.
Law Enforcement Associates Corporation filed a Chapter 11
bankruptcy petition (Bankr. E.D.N.C. Case No. 11-05686) on
July 27, 2011. William P. Janvier, Esq., at Janvier Law Firm,
PLLC, in Raleigh, North Carolina, serves as counsel. In the
petition, the Debtor estimated assets of up to $50,000 and debts
of up to $10 million.
LEHMAN BROTHERS: Still Stuck in Court After 3 Years
---------------------------------------------------
Three years after its collapse, Lehman Brothers Holdings Inc. is
still stuck in bankruptcy court but for its lawyer, three years
is "not a particularly long period."
"For the largest bankruptcy case in the world? Three years is
not a particularly long period," said the company's lawyer,
Harvey Miller, Esq., at Weil Gotshal & Manges LLP, in New York,
in an interview with Alison Frankel of Thomson Reuters News &
Insight.
Lehman filed for bankruptcy protection with $639 billion in
assets on September 15, 2008. Its bankruptcy case may soon be
drawing to a close, the news agency noted. Late last month, the
company obtained an order from the U.S. Bankruptcy Court for the
Southern District of New York allowing its creditors to vote on
its $65 billion Chapter 11 plan.
The company hopes to get the plan confirmed on December 6, 2011,
and begin making payouts to creditors early next year.
Mr. Miller said the final obstacle will be getting the votes from
creditors needed to approve its payout plan, Reuters reported.
The Lehman lawyer said the biggest hurdle is an objection by
Lehman's European affiliate over whether its $8.9 billion claim
can be treated as a customer claim. If so, it would receive
higher payback priority and would be more likely to be repaid in
full at the expense of other claims, according to the report.
"It's been a remarkable case," Mr. Miller told Reuters. "Think
of all the different interests and conflicting views, and over a
period of time, the parties have come together to reach a
consensus." (Most major creditors have jumped on board Lehman's
plan, though others may take more convincing, the news agency
noted.) Mr. Miller, the report said, was quick to point out that
of the 110,000 creditors to receive Lehman's disclosure
statement, only 17 have objected. That's not bad for a firm
facing $360 billion in allowed claims, most of which won't be
repaid, Reuters opined.
LBHI and Lehman Brothers International Europe, the largest of the
company's foreign affiliates, announced in a September 16, 2011
statement that they have reached an agreement in principle
resolving the claims.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Judge Peck Refuses Summary Judgement vs. Barclays
------------------------------------------------------------------
Judge James Peck of the U.S. Bankruptcy Court for the Southern
District of New York denied Lehman Brothers Holdings Inc.'s motion
for summary judgment against Barclays Capital Inc.
The company in May asked the bankruptcy judge to grant a summary
judgment with respect to its claim for breach of contract under
Count II of its complaint. LBHI also demanded payment of
approximately $500 million in damages for Barclays Capital Inc.'s
failure to pay the company in full when the U.K. bank bought its
North American business in 2008.
Barclays allegedly paid only $1.5 billion of the $2 billion it
was supposed to pay for the bonuses of Lehman employees who were
transferred to the U.K. bank as part of the deal.
In a September 14, 2011 decision, Judge Peck said that LBHI no
longer has liabilities to the employees for bonuses and has not
suffered damages.
"In common vernacular, this is a 'no harm, no foul' situation in
which Lehman has not been hurt regardless of the amounts paid by
Barclays to transferred employees," Judge Peck said. He further
said that the $2 billion was only an estimate of the total
compensation amounts that were to be assumed by Barclays in the
deal.
Judge Peck, in the Decision, went on to say that the Lehman
Motion relies on the truth of three propositions, but, upon
examination, not one of these is valid and sustainable. The
propositions are: (i) a presumed finding of fact within the 60(b)
Opinion regarding the agreement to compensate Transferred
Employees that is not to be found within the text of the opinion,
(ii) an alleged but non-existent firm commitment to pay $2
billion in bonus compensation to these employees that is
contradicted by the trial record, and (iii) an asserted right to
breach of contract damages that Lehman has not suffered and is
unable to demonstrate.
Barclays' lawyer, Jonathan Schiller, Esq., at Boies Schiller &
Flexner LLP, in New York, said that the decision confirms that
the U.K. bank acted in good faith in its dealings with Lehman
just as the bankruptcy court held in its February decision
rejecting Lehman's effort to modify its sale order, according to
a September 14, 2011 report by Bloomberg News.
A full-text copy of the Decision from Leagle.com is available for
free at http://is.gd/wvmk3I
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Removes Guarantees of Securities-Lending Claims
----------------------------------------------------------------
Lehman Brothers Holdings Inc., sought and obtained approval from
Judge James Peck of the U.S. Bankruptcy Court for the Southern
District of New York to further changes to the disclosure
statement describing its proposed Chapter 11 plan.
LBHI revised the disclosure statement to remove guarantees of
securities-lending claims from the list of its senior debt. The
company determined that claims against it arising from guarantees
of subsidiaries' securities-lending agreements are not entitled
to be treated as "senior" obligations under the terms of the
indentures pursuant to which LBHI issued various series of
subordinated notes. The Debtors seek to modify the description
of the types of Claims that are included in LBHI Class 5 (Senior
Third-Party Guarantee Claims).
The Chapter 11 Plan provides that only claims asserted by third-
parties based on LBHI's guarantee of obligations that are senior
to the subordinated notes are entitled to be included in LBHI
Class 5. This change, the Debtors assert, is intended to conform
the Disclosure Statement description to the terms of the Chapter
11 Plan.
A copy of the corrected page of the disclosure statement is
available without charge at:
http://bankrupt.com/misc/LBHI_DSDescriptionClass5.pdf
Unless Judge James Peck in confirming the plan overrules LBHI's
opinion about the status of securities-lending guarantee claims,
holders of the claims will have a smaller recovery because they
won't benefit from the subordination of parent-company
subordinated debt, according to a September 12, 2011 report from
Bloomberg News.
In a court filing, the Official Committee of Unsecured Creditors
said that it does not oppose court approval of the proposed
revision to the disclosure statement.
The Creditors' Committee said the revision does not affect the
rights of any claimant and does not effect reclassification of
claims but merely conforms the disclosure statement to Lehman's
interpretation of the plan with respect to the securities-lending
claims.
Judge Peck will hold a hearing today at 10:00 a.m. to consider
approval of the proposed revision.
Lehman Inks Deal For Provisional Allowance of Claims
In a related development, LBHI entered into agreements with
several groups of creditors in connection with its proposed
Chapter 11 plan:
* Acenden Limited (f/k/a Capstone Mortgage Services Limited);
Eldon Street (Raven) Limited; Grace Hotels Limited; LB
Equity (Nominees Number 7) Ltd.; LB Holdings Intermediate 2
Limited; LB SF No. 1 Ltd.; LB UK RE Holdings Limited; LBQ
Funding (UK); Lehman Brothers (Indonesia) Limited; Lehman
Brothers Europe Limited; Lehman Brothers Holdings PLC;
Lehman Brothers International (Europe); Lehman Brothers
Limited; Lehman Brothers Nominees Limited; Lehman Brothers
UK Holdings Limited; Lehman Brothers Commercial Conduit
Limited; Mable Commercial Funding Limited; MBAM Investor
Limited; Monaco NPL (No. 1) Limited; Preferred Mortgages
Limited; Resetfan Limited; Southern Pacific Funding 3
Limited; Southern Pacific Mortgage Limited; Storm Funding
Limited; Thayer Group Limited; Thayer Properties (Jersey)
Limited; Thayer Properties Limited; and Zestdew Limited;
* MacKay Shields Credit Strategy Fund Ltd. and MacKay Shields
Credit Strategy Partners LP;
* GLG European Long-Short Fund;
* GLG Investments IV PLC: Sub-Fund GLG Performance
(Distributing) Fund;
* GLG Investments PLC: Sub-Fund GLG Performance Fund;
* GLG Investments IV PLC: Sub-Fund GLG Capital Appreciation;
* GLG Market Neutral Fund; and
* GLG North American Opportunity Fund.
The agreements call for the provisional allowance of claims of
the creditors solely for the purpose of allowing them to vote on
the proposed plan. The agreements are subject to bankruptcy
court approval.
Full-text copies of the agreements are available without charge
at:
http://bankrupt.com/misc/LBHI_StipLBIEPlanVoting.pdf
http://bankrupt.com/misc/LBHI_StipGLGEmergingVoting.pdf
http://bankrupt.com/misc/LBHI_StipGLGEuropeanVoting.pdf
http://bankrupt.com/misc/LBHI_StipGLGInvestmentsIVVoting.pdf
http://bankrupt.com/misc/LBHI_StipGLGInvestmentsPLCVoting.pdf
http://bankrupt.com/misc/LBHI_StipGLGInvestmentsVoting.pdf
http://bankrupt.com/misc/LBHI_StipGLGMarketVoting.pdf
http://bankrupt.com/misc/LBHI_StipGLGNorthAmVoting.pdf
http://bankrupt.com/misc/LBHI_StipMacKayVoting.pdf
Debtors Ink Stipulation with Mizuho
The Debtors and Mizuho Corporate Bank, Ltd., ask the Court to
approve a stipulation providing that the Debtors will send an
individual ballot to each lender identified by Mizuho for
purposes of voting to accept or reject the Debtors' Plan.
Mizuho, while remaining an agent for the Lenders for other
purposes, will not be required to complete a Master Ballot on
behalf of the Lenders.
Mizuho is lead arranger and agent in a seven-year credit
agreement for $JPY35 billion LBHI entered into in May 2007.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Has Agreement in Principle With Lehman Europe
--------------------------------------------------------------
Lehman Brothers Holdings Inc. (LBHI) and Lehman Brothers
International Europe (LBIE), the largest of LBHI's foreign
affiliates, disclosed that they have reached an agreement in
principle resolving the claims among the two entities and certain
of their affiliates including Lehman Brothers Special Financing
(LBSF).
The complex agreement incorporating this resolution is subject to
documentation and various approvals, including Bankruptcy Court
approval as part of LBHI's plan confirmation. There is no
assurance at this time that an agreement among the parties will be
consummated.
No details about the agreement in principle are available at this
time.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009 or
more than a year after LBHI and its other affiliates filed their
bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on Sept. 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on Sept. 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Canary Wharf Claims Reduced to $780 Million
------------------------------------------------------------
Bankruptcy Judge James Peck approved Lehman Brothers Holdings
Inc.'s stipulation with Heron Quays (HQ2) T1 Limited and Heron
Quays (HQ2) T2 Limited, Canary Wharf Management Ltd. and Canary
Wharf Contractors Ltd., which would resolve certain of the
disputes concerning the Canary Wharf Claims.
Under the stipulation, the Canary Wharf Claims will be reduced to
these maximum amounts:
Claimant Claim No. Filed Amount Reduced Amount
-------- --------- ------------ --------------
Management Co. 14824 $195,550,000 $9,150,000
Contractor 14825 $832,995 $850,000
Heron Quays 14826 $4,280,970,000 $770,000,000
------------- -----------
TOTAL $4,477,352,995 $780,000,000
In consideration of the Canary Wharf Entities agreeing to the
aggregate maximum allowable amount of their Claims, LBHI agrees
that it will reserve against payment of the maximum allowable
amount, until the time as the Canary Wharf Claims are settled or
finally adjudicated, an amount equal to the sum which would have
been distributed in respect of the maximum allowed amount had the
same been allowed as Class 3 claims under the Plan.
The Canary Wharf Entities further agree not to object to the
Disclosure Statement or the confirmation of the Plan or, subject
to the requirements of Section 1125 of the Bankruptcy Code,
including the approval by the Bankruptcy Court of the Disclosure
Statement and its transmittal to creditors and other parties in
interest, to vote against the Plan. The Parties agree that any
dispute as to the Canary Wharf Claims, including classifications,
will be resolved after confirmation of the Plan, if the same is
confirmed.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: Wins Nod to Sell Rosslyn Stake for $385MM
----------------------------------------------------------
Bankruptcy Judge James Peck authorized Lehman Brothers affiliate
Rosslyn LB Syndication Partner LLC to sell its stake in Rosslyn
Syndication Partners JV LP.
Under the deal, Rosslyn LB will sell its stake for not less than
$385 million to a subsidiary or affiliate of a joint venture,
U.S. Real Estate Opportunities I L.P.
Rosslyn LB, an indirect subsidiary of LBHI, holds a 78.5% limited
partnership interest in Rosslyn Syndication which owns a 10-
property office building portfolio in Virginia.
Ashish Gupta, senior vice-president at LAMCO LLC, expressed
support for the transaction, saying it would allow LBHI to
receive significant value on account of its interest in the joint
venture especially that the commercial real estate and capital
markets have now significantly recovered.
Under the deal, Rosslyn LB will sell its stake to a subsidiary or
affiliate of U.S. Real Estate Opportunities I L.P., a joint
venture in which Goldman Sachs & Co. is the general partner.
U.S. Real Estate may terminate the deal if LBHI fails to obtain
court approval by September 30, 2011. It may make a claim
against Rosslyn LB for breach of representation and warranties
for a period to be agreed upon after closing, subject to floor
and caps.
Lehman Commercial Paper Inc. will guarantee the post-closing
obligations of Rosslyn LB in an aggregate amount not to exceed
$15 million.
The sale must be completed 20 business days after its approval by
the Court, according to court papers.
A private sale is appropriate because LBHI has "thoroughly
marketed" Rosslyn LB's interest and believes that any further
marketing would not result in any increased value to its estate,
according to Lehman lawyer, Alfredo Perez, Esq., at Weil Gotshal
& Manges LLP, in Houston, Texas.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
LEHMAN BROTHERS: LBI Trustee Defends $345MM Demand vs. RBS
----------------------------------------------------------
James W. Giddens, as trustee for the liquidation of the business
of Lehman Brothers Inc. pursuant to the Securities Investor
Protection Act of 1970, contends that the motion of The Royal
Bank of Scotland N.V. to dismiss his motion asking the Court to
compel RBS to pay more than $345 million constitutes an attempt
to cut off consideration of his earlier filed contested
proceeding under Sections 105(a) and 362 of the Bankruptcy Code
and Rule 9014 of the Federal Rules of Bankruptcy Procedure.
Representing the LBI Trustee, Richard G. Menaker, Esq., at
Menaker & Herrmann, in New York, argues that the RBS Motion is
misconceived because it ignores the major predicate for the LBI
Trustee's motion -- namely, that RBS has conceded in writing that
it is holding $347,501,344 in cash belonging to the LBI estate.
After deducting the sum of $1,562,719 scheduled in RBS's proof of
claim in this proceeding, the net amount being withheld is
$345,938,625, he explains. He asserts that RBS's only claimed
defense is its claim of a right to cross-affiliate or triangular
setoff.
Mr. Menaker contends that the LBI Trustee has repeatedly advised
RBS, as successor to ABN AMRO Bank N.V., that its continued
holding of the Withheld Funds is improper. He notes that RBS
has, nevertheless, continued to hold the Withheld Funds without
having sought relief from the automatic stay and the stay in
LBI's liquidation order. He points out that it was because of
this failure to honor the Stays that on June 29, 2011, following
prior notice to RBS, that the LBI Trustee's motion was filed
seeking relief under Sections 105(a) and 362 of the Bankruptcy
Code.
The conduct of RBS in this matter may be compared with the course
followed by several other similarly situated parties -- UBS,
Metavante and Swedbank -- against which either the LBI Trustee or
the parent company debtor also brought motions under Sections
105(d) and 362 to recover property of the estate, and which
opposed those motions on the merits without multiplying the
proceedings, Mr. Menaker argues. Simply stated, he contends, the
present motion by RBS is a dilatory tactic, insupportable as a
matter of law, and should, therefore, be denied.
RBS Seeks Withdrawal of Reference
RBS filed a motion withdrawing the reference from the U.S.
District Court for the Southern District of New York to the U.S.
Bankruptcy Court for the Southern District of New York of the
Motion of LBI Trustee for an Order Enforcing the Automatic Stay
and Compelling Payment of Amounts Payable by RBS N.V.
The District Court should withdraw its reference to the
Bankruptcy Court of the LBI Trustee's Motion to Compel because,
among other reasons, the Supreme Court determined in Stern v.
Marshall that an Article I bankruptcy court cannot exercise the
essential attributes of Article III judicial power over a
bankruptcy estate's prepetition state law counterclaim against a
claimant, which is exactly what the LBI Trustee is asking the
Bankruptcy Court to do in this case, Martin J. Bienenstock, Esq.,
at Dewey & LeBoeuf LLP, in New York, argues.
Mr. Bienenstock points out that in Stern v. Marshall, the Supreme
Court held that an Article I bankruptcy court could not
constitutionally determine the estate's prepetition counterclaim
if it is not resolved by ruling on the claimant's proof of claim.
Here, RBC's proof of claim is for $1.562 million of underwriting
fees. Therefore, Mr. Bienenstock asserts, the Article I
Bankruptcy Court cannot determine the LBI Trustee's counterclaim,
which has nothing to do with underwriting fees. Thus, in Stern
v. Marshall, the Second Circuit's primary indicator of reference
withdrawal -- the need for an Article III court -- is present
here, Mr. Bienenstock points out.
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)
LOS ANGELES DODGERS: Dumps Fox Deal to Auction Television Rights
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Los Angeles Dodgers baseball club announced that
the team is abandoning the pre-bankruptcy agreement for a 14-year
extension of the existing television rights contract with Fox
Entertainment Group Inc. Instead, the team will auction rights
to broadcast 150 games beginning with the 2014 season.
According to the report, the Dodgers said in their Sept. 16 filing
in Delaware bankruptcy court that the auction will generate enough
cash for full payment of $150 million in financing for the Chapter
11 case, $55 million owing by an affiliate, and the claims of all
creditors. In addition, the team estimates the auction will
generate enough excess cash to provide financial security for five
years.
Mr. Rochelle notes that to hold the auction, the Dodgers must
convince the bankruptcy judge that Fox can't enforce a right of
first negotiation in the current television deal that precludes
the team from negotiating with anyone else until November 2012.
In addition, the court must void a right of first refusal that
would give Fox the right to match any other offers made after the
exclusive bargaining period ends.
Fox, Mr. Rochelle points out, has other arguments to complicate
the proposed auction. Fox can contend that the first refusal and
first negotiation rights are part of an overall contract that the
team must either accept in full or reject entirely. If the
Dodgers are required to reject the existing TV agreement running
through the 2013 season, Fox could have a significant damage
claim. Although an unsecured pre-bankruptcy claim, it would have
to be paid in full so owner Frank McCourt could retain ownership.
Mr. Rochelle discloses that the hearing for approval of auction
and sale procedures is currently set for Oct. 12. If the judge
allows the sale process to proceed, the Dodgers say they will
negotiate exclusively with Fox for 45 days before commending a
60-day marketing effort with other prospective telecasters. The
process would end with an auction where buyers could bid for part
although not all of the TV rights. Once the best bid is selected,
the Dodgers say the commissioner of baseball will be asked to
approve the sale. If he doesn't, the team says it will ask the
judge to overrule the commissioner's decision on the ground that
it wasn't made in good faith.
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.
LOS ANGELES DODGERS: Atty. Fees Opposed for Fighting Commissioner
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Trustee in Delaware filed papers saying two
law firms for the Los Angeles Dodgers baseball club should lose
$340,000 in fees because they continued fighting for court
approval of $150 million in secured financing from Highbridge
Capital Management LLC after the Commissioner of Major League
Baseball offered a $150 million unsecured loan.
According to the report, the U.S. Trustee, the Justice
Department's bankruptcy watchdog, argues that continuing to oppose
an unsecured loan from the Commissioner was "neither necessary to
the administration of the case nor reasonably likely to benefit
the debtors' estates." The offer for an unsecured loan gave the
Dodgers a "duty to negotiate with [MLB]," the U.S. Trustee said.
The objection was lodged to compensation requests by the team's
two law firms for the period from the beginning of the case on
June 27 until July 31. Together, Dewey & LeBoeuf LLP and Young
Conaway Stargatt & Taylor LLP are seeking almost $2 million for
the first month of the case.
The bankruptcy judge wrote an opinion on July 22 refusing to
approve secured financing from Highbridge, an affiliate of
JPMorgan Chase & Co. Instead, he told the team to work out details
of an unsecured loan from the Commissioner.
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.
MARCO POLO: Gains Approval for Revamped Bankruptcy-Loan Deal
------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Marco Polo Seatrade BV won
permission to tap a revamped bankruptcy financing package from a
lender it had previously sparred with in the case.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the threat that Royal Bank of Scotland would prevail
on the bankruptcy judge to dismiss the Chapter 11 case of Dutch
ship owner Seaarland Shipping Management evidently brought the
parties together on an interim settlement. Edinburgh-based RBS,
the holder of mortgages on three of the company's six vessels,
will provide $2.4 million in financing for the Chapter 11 case, in
place of financing from a Seaarland affiliate. In return, the ship
owner agreed to file a reorganization plan by Dec. 15 satisfactory
to RBS "in form and substance."
The agreement requires approval of the plan in a confirmation
order by March 30. A term sheet for the plan is to be delivered
by Nov. 15. The loan prohibits Seaarland from using any of the
loan to pay attorneys' fees in an attempt at changing the terms of
RBS's existing loan.
Mr. Rochelle recounts that RBS filed a motion on Sept. 12 asking
the bankruptcy judge in New York to dismiss the bankruptcy. The
bank contended that the ship owner had virtually no contacts with
the U.S. and therefore no right to reorganize in this country.
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. Kurtzman
Carson Consultants LLC serves as notice and claims agent.
The petition noted that the Debtors' assets and debt are both
more than US$100 million and less than US$500 million.
Tracy Hope Davis, United States Trustee for Region 2, appointed
three members to serve on the Official Committee of Unsecured
Creditors. The Committee has retained Blank Rome LLP as its
attorney.
Secured lender Credit Agricole Corporate and Investment Bank is
represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg
Sarma, Esq., at Watson, Farley & Williams (New York) LLP.
M & H REALTY: Case Summary & Largest Unsecured Creditor
-------------------------------------------------------
Debtor: M & H Realty, Inc.
c/o Munir T. Mustafa
540 Belle Pointe Loop
Madisonville, LA 70447
Bankruptcy Case No.: 11-12997
Chapter 11 Petition Date: September 15, 2011
Court: United States Bankruptcy Court
Eastern District of Louisiana (New Orleans)
Judge: Jerry A. Brown
Debtor's Counsel: Phillip K. Wallace, Esq.
2027 Jefferson Street
Mandeville, LA 70448
Tel: (985) 624-2824
Fax: (985) 624-2823
E-mail: PhilKWall@aol.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
In its list of 20 largest unsecured creditors, the Company placed
only one entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Jaime R. Mustafa Loan $280,000
888 Cross Gates Blvd
Slidell, LA 70461
The petition was signed by Munir T. Mustafa, president.
MANDA ANN: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Manda Ann Convalescent Home, Inc.
7441 Coffee Street
Houston, TX 77033
Bankruptcy Case No.: 11-37950
Chapter 11 Petition Date: September 16, 2011
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Letitia Z. Paul
Debtor's Counsel: Christopher Adams, Esq.
OKIN ADAMS & KILMER LLP
1113 Vine Street, Suite 201
Houston, TX 77002
Tel: (713) 228-4100
Fax: (888) 865-2118
E-mail: cadams@oakllp.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 20 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/txsb11-37950.pdf
The petition was signed by Jaromey Roberts, II, president.
MER SOLEIL: Case Summary & 15 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Mer Soleil, LLC
105 N. Royal Ascot Drive
Las Vegas, NV 89147
Tel: (702) 896-5555
Bankruptcy Case No.: 11-24633
Chapter 11 Petition Date: September 16, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: Talitha B. Gray, Esq.
GORDON & SILVER, LTD.
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, NV 89169
Tel: (702) 796-5555
E-mail: athalrose@gordonsilver.com
Estimated Assets: $1,000,001 to $10,000,000
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/nvb11-24633.pdf
The petition was signed by Gregory R. Rosebeck, general partner of
Roses Investments LP, manager.
MERIT GROUP: J.H. Cohn OK'd to Probe and Evaluate Causes of Action
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of South Carolina
authorized the Official Committee of Unsecured Creditors in the
Chapter 11 case of The Merit Group Inc., et al., to expand the
scope of retention of J.H. Cohn as financial advisors, effective
Aug. 1, 2011.
The Committee said that in addition to monitoring post-sale
activities, J.H. Cohn will (a) assist and advise the Committee in
investigating and evaluating potential causes of action of
the Debtors' estates, including but not limited to, causes of
action under Chapter 5 of the Bankruptcy Code; (b) assist and
advise the Committee with respect to the joint plan of
reorganization or liquidation and confirmation thereof; and (c)
providing testimony, as necessary, at the hearing on confirmation
of the joint plan of reorganization or liquidation.
The professionals from J.H. Cohn designated to have primary
responsibility in representing the Committee, and their standard
hourly rates, are:
Clifford A. Zucker, partner $650
Roberta Probber, manager $480
The range of the the professionals' hourly rates are:
Partners $580 - $790
Managers, Senior Managers,
and Directors $420 - $610
Other Professional Staff $260 - $400
To the best of the Committee's knowledge, J.H. Cohn is a
"disinterested person" as that term is defined in section 101(14)
of the Bankruptcy Code.
About Merit Group
Based in Spartanburg, South Carolina, The Merit Group Inc.,
formerly Lancaster Distributing Company, serves as one of the
leading paint sundries distributors in the United States. Its
markets also include Mexico, the Caribbean Islands, Central
America and South America.
Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D.
S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E.
Burris presides over the case. Michael M. Beal, Esq., McNair Law
Firm PA, represents the Debtors. The Debtors selected Kurtzman
Carson Consultants LLC as their claims agent; and Morgan Joseph
TriArtisan LLC, investment banker, and Alvarez & Marsal North
America, LLC, as financial advisors. Merit Group disclosed
7,004,048 in assets and $66,609,946 in liabilities as of the
Chapter 11 filing.
DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet
Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP.
The U.S. Trustee has named seven members to the Official Committee
of Unsecured Creditors. The Committee is represented by Cole,
Schotz, Meisel, Forman & Leonard, P.A. The Committee tapped
McCarthy Law Firm LLC as co-counsel, J.H. Cohn LLP as its
financial advisor.
MEMORIAL HEALTH: S&P Affirms 'BB+' Rating on $93.695-Mil. Bonds
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to stable
from negative, and affirmed its 'BB+' rating on Chatham County
Hospital Authority, Ga.'s $93.695 million revenue bonds series
2001A and 2004A, issued for Memorial Health University Medical
Center.
"The outlook revision reflects significant improvement in
operating results for the six months ended June 2011," said
Standard & Poor's credit analyst Stephen Infranco. Memorial
reported an operating surplus of $807,000 (0.3% margin), which
compares favorably to sizable operating deficits in previous
years. Furthermore, there had been instability at the senior
management level due to higher-than-normal turnover in key
positions. However, the change in the CEO in January 2011, coupled
with the announcement that the chief operating officer would
assume the CEO role, has coincided with turnaround initiatives
that have contributed to the improved operations year to date.
The rating reflects Memorial's solid position as a regional
referral center in the greater Savannah region, history of fiscal
challenges, and relatively light un unrestricted liquidity.
MERUELO MADDUX: Owners Seek Bonuses After Ouster in Plan
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Richard Meruelo and John Maddux, who controlled
Meruelo Maddux Properties Inc. until it was taken over in July
when shareholder Charlestown Capital Advisors LLC confirmed a
Chapter 11 plan, filed papers in U.S. Bankruptcy Court in Woodland
Hills, California, claiming they're owed some $3 million for
bonuses and other compensation. The two point to their pre-
bankruptcy employment agreements calling for minimum annual
bonuses equal to half their base salaries. Early in the case, the
bankruptcy court approved base salaries while deferring a ruling
on the bonuses in view of creditor opposition. The confirmed plan
calls for paying claims in full that arose during the Chapter 11
case, Meruelo and Maddux contend. Messrs. Meruelo and Maddux
believe they are entitled to their bonuses for 2009, 2010 and part
of 2011, plus other unpaid compensation and benefits. The
bankruptcy court will sort out the dispute at an Oct. 13 hearing.
About Meruelo Maddux
Meruelo Maddux and its affiliates filed for Chapter 11 protection
(Bankr. C.D. Calif. Lead Case No. 09-13356) on March 26, 2009.
John N. Tedford, IV, Esq., and Enid M. Colson, Esq., at Danning
Gill, Diamond & Kollitz, LLP, in Los Angeles, represent the
Debtors in their restructuring effort. The Debtors' financial
condition as of Dec. 31, 2008, showed $681,769,000 in assets and
$342,022,000 of debts.
FTI Consulting, Inc., serves as the Debtors' financial advisors,
Ernst & Young as independent auditors and tax advisors, DLA Piper
LLP (US) as special securities and litigation counsel, and Waldron
& Associates, Inc. as real estate appraiser.
The U.S. Trustee appointed an official committee of unsecured
creditors and a separate official shareholders' committee in the
case. SulmeyerKupetz, APC, serves as the Creditors Committee's
counsel and Kibel Green, Inc., as its financial advisor. The
equity committee has sought to retain Ron Orr & Professionals,
Inc., Rodiger Law Office, and Jenner & Block as counsel, and Kibel
Green, Inc. as its financial advisor. The Debtors have hired
Kurtzman Carson Consultants as solicitation and balloting agent.
The Debtors; Legendary Investors Group No. 1, LLC, and East West
Bank; and Charlestown Capital Advisors, LLC and Hartland Asset
Management Corporation have proposed rival reorganization plans in
the case. In mid-January 2011, the Debtors struck a deal with the
Legendary Group to drop the group's competing plan.
Legendary Investors Group No. 1, LLC, is represented in the case
by Jeremy V. Richards, Esq., and Jeffrey W. Dulberg, Esq., at
Pachulski Stang Ziehl & Jones LLP; and Surjit P. Soni, Esq., at
The Soni Law Firm. East West Bank is represented by Curtis C.
Jung, Esq., and Monica H. Lin, Esq., at Jung & Yuen, LLP, and
Elmer Dean Martin III, Esq.
Charlestown Capital Advisors, LLC and Hartland Asset Management
Corporation are represented in the case by Christopher E. Prince,
Esq., Matthew A. Lesnick, Esq., and Andrew R. Cahill, Esq., at
Lesnick Prince LLP.
Charlestown Capital Advisors, LLC's and Hartland Asset Management
Corporation's plan of reorganization for MMPI and its subsidiaries
became effective July 26. Under the Plan, Charlestown Capital
obtained control of the reorganized company.
METALDYNE CORP: Trustee Faces Injunction from Delphi
----------------------------------------------------
DPH Holdings Corp. and its debtor affiliates ask Judge Robert
Drain to permanently enjoin the trustee for The Oldco M
Distribution Trust from pursuing an adversary proceeding by
enforcing the June 16, 2009 Modification Procedures Order, the
Modified First Amended Joint Plan of Reorganization, and its
related July 30, 2009 confirmation order.
The trust is the successor-in-interest to certain assets and
claims of Metaldyne Corporation and certain of its affiliates,
former Chapter 11 debtors, whose cases were presided over by
Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern
District of New York.
In May 2011, almost two years after the Administrative Bar Claim
Date, the Oldco Trustee filed an adversary proceeding in the
Metaldyne Bankruptcy against Delphi Automotive Systems, LLC, to
recover $199,134 of preference payments Metaldyne allegedly made
to DAS in May 2009.
Despite receiving actual notice of the July 15, 2009
Administrative Claim Bar Date, Metaldyne did not file proof of an
administrative expense claim to preserve its preference claim in
Delphi's Chapter 11 cases, Thomas B. Radom, Esq., at Butzel Long,
in Bloomfields, Michigan -- radom@butzel.com -- asserts. As
indicated in an affidavit of service, on or before June 20, 2009,
Reorganized Delphi mailed notice of the Administrative Claims Bar
Date Notice to Metaldyne at several locations, including two
separate locations for its attorneys of record, he discloses.
Accordingly, Reorganized Delphi provided more than adequate
notice under the law, and the Oldco Trustee cannot credibly claim
that Metaldyne did not receive actual notice of the
Administrative Claim Bar Date, he asserts.
Moreover, the Oldco Trustee's preference claims were claims under
the June 16 Modification Procedures Order and the Bankruptcy
Code, Mr. Radom avers. All pre-confirmation "claims" against
Reorganized Delphi held by Metaldyne were discharged, he points
out. Because the Oldco Trustee's preference claims arose before
the Administrative Claim Bar Date, and because Metaldyne had
actual notice of the Administrative Claim Bar Date, they were
required to file the preference claims as administrative expense
claims by the Administrative Claim Bar Date, or they would be
forever discharged, he states. However, Metaldyne failed to do
so and, as result, the preference claims are forever barred and
discharged by the June 16 Modification Procedures Order, and the
Oldco Trustee is estopped and enjoined from asserting those
claims against DAS, he maintains.
Accordingly, Reorganized Delphi further ask the Bankruptcy Court
to direct the Oldco Trustee to dismiss the adversary proceeding
to recover discharged claim.
The Bankruptcy Court will consider Reorganized Delphi's request
on September 22, 2011. Objections due are no later than
September 15.
In a supporting declaration, Dean R. Unrue, claims administrator
for the Reorganized Debtors, affirms that Metaldyne or any
affiliate that has the name of Metaldyne in it, did not file
proof of an administrative expense claim by the July 15, 2009
Administrative Expense Bar Date, nor is there any record of
Metaldyne or any affiliate filing proof of an administrative
expense claim after the Administrative Claim Bar in Reorganized
Delphi's Chapter 11 cases.
About Metaldyne Corp.
Metaldyne Corp. was a global designer and supplier of metal based
components, assemblies and modules for transportation related
powertrain applications including engine, transmission/transfer
case, driveline, and noise and vibration control products to the
motor vehicle industry.
Metaldyne and its affiliates filed for Chapter 11 protection on
May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did
not include the company's non-U.S. entities or operations.
Richard H. Engman, Esq., at Jones Day represented the Debtors in
their restructuring. Judy A. O'Neill, Esq., at Foley & Lardner
LLP served as conflicts counsel; Lazard Freres & Co. LLC and
AlixPartners LLP as financial advisors; and BMC Group Inc. as
claims agent. A committee of Metaldyne creditors was represented
by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed
Smith LLP, and the committee tapped Huron Consulting Services,
LLC, as its financial advisor. For the fiscal year ended
March 29, 2009, the company recorded annual revenues of
approximately US$1.32 billion. As of March 29, 2009, utilizing
book values, the Company had assets of US$977 million and
liabilities of $927 million.
Judge Glenn approved the sale of substantially all assets to
Carlyle Group in Nov. 2009 for approximately $496.5 million, and
confirmed the Debtors' liquidating chapter 11 plan on Feb. 23,
2010. Under the terms of the confirmed liquidation plan, Oldco M
Distribution Trust is the post-confirmation entity charged with
prosecuting all claim objections and distributing all plan assets
pursuant to the terms of the plan. The Trust is represented by
Kimberly E.C. Lawson, Esq., at Reed Smith LLP, in Wilmington, Del.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- was a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq.,
John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, represented the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represented the Official Committee of Unsecured Creditors. As of
June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000
in total assets and US$23,742,000,000 in total debts.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan
was not consummated after a group led by Appaloosa Management,
L.P., backed out from their proposal to provide US$2,550,000,000
in equity financing to Delphi. At the end of July 2009, Delphi
obtained confirmation of a revised plan, build upon a sale of the
assets to a entity formed by some of the lenders who provided
$4 billion of debtor-in-possession financing, and General Motors
Company.
On Oct. 6, 2009, Delphi Corp.'s Chapter 11 plan of reorganization
became effective. A Master Disposition Agreement executed among
Delphi Corporation, Motors Liquidation Company, General Motors
Company, GM Components Holdings LLC, and DIP Holdco 3, LLC,
divides Delphi's business among three separate parties -- DPH
Holdings LLC, GM Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and
eventual closing of the Chapter 11 cases as well as the
disposition of certain retained assets and payment of certain
retained liabilities as provided under the Modified Plan.
Bankruptcy Creditors' Service, Inc., publishes Delphi Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings of Delphi
Corp. and its debtor-affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000
MILESTONE SCIENTIFIC: Joseph D'Agostino Elected COO
---------------------------------------------------
Joseph D'Agostino, CFO of Milestone Scientific Inc., was elected
Chief Operating Officer effective as of Sept. 12, 2011. In
connection his election, the Company awarded Mr. D'Agostino
100,000 shares of restricted common stock of the Company and no
changes were made to his current salary and benefits.
About Milestone Scientific
Piscataway, N.J.-based Milestone Scientific Inc. (OTC BB: MLSS)
-- http://www.milestonescientific.com/-- is engaged in pioneering
proprietary, highly innovative technological solutions for the
medical and dental markets. Central to the Company's IP platform
and product development strategy is its patented CompuFlo(R)
technology for the improved and painless delivery of local
anesthetic.
The Company's balance sheet at June 30, 2011, showed $7.38 million
in total assets, $5.27 million in total liabilities and $2.11
million in total stockholders' equity.
As reported by the TCR on April 4, 2011, Holtz Rubenstein Reminick
LLP, in New York, noted that the Company has suffered recurring
losses from operations since inception, which raises substantial
doubt about its ability to continue as a going concern.
MONEYGRAM INT'L: Fitch Affirms Issuer Default Ratings at 'B+'
-------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for
MoneyGram International Inc. (MoneyGram) and MoneyGram Payment
Systems Worldwide, Inc. (Worldwide) at 'B+'.
The rating and Outlook are supported by the following
considerations:
-- Moneygram's leading market position as the second largest
provider of international remittances with 244,000 agent
locations worldwide.
-- Fitch expects the market for remittance services to be as
stable, if not more so, than the overall global economy,
buoyed by favorable secular trends of labor migration.
-- Fitch believes that MoneyGram should be able to continue to
increase its share of the overall remittance market at the
expense of smaller, less well-capitalized competitors which
are disadvantaged by increasingly stringent changes to global
regulatory requirements.
-- Moneygram also benefits from a high degree of variable cost
in its business model as most agent locations are compensated
by commissions and the company itself owns very few retail
locations.
Ratings concerns include the following:
-- MoneyGram's largest agent is Walmart, which accounts for
approximately 30% of its total revenue. The company's
agreement with Walmart expires in January 2013. A failure to
extend this relationship could significantly challenge the
company financially given its relatively high leverage ratio.
Of note, the current agreement with Walmart was last extended
in 2008 in conjunction with MoneyGram's 2008
recapitalization. As part of that agreement, the company's
private equity owners entered into a side agreement with
Walmart to share a portion of profits from the deal. Fitch
notes that ownership remains largely unchanged from 2008 and
this has the potential to support any effort to extend the
Walmart relationship.
-- The compliance risks associated with regulations governing
MoneyGram's business in numerous jurisdictions worldwide;
-- The risk of adverse political environments or legislation
affecting migration flows, although this risk is mitigated by
the company's broad geographic diversification;
-- MoneyGram has been informed that it is being investigated by
a federal grand jury in connection with its consumer anti-
fraud and anti-money laundering program matters for the
period 2004 to early 2009. A prior similar investigation led
to MoneyGram paying an $18 million fine, although that is not
necessarily indicative of the potential liability related to
this latest investigation.
-- The company's ability to invest in new remittance
technologies, such as mobile phone payments, which pose a
long-term competitive threat.
In May 2011, MoneyGram completed a conversion of its preferred
series-B shares into common stock (including a portion into common
stock equivalent series-D preferred shares). The company paid
preferred shareholders a total of $218 million to effect the
transaction, but eliminated the 10% preferred series-B share
dividend. Thomas H Lee (THL) and Goldman Sachs now own
approximately 85% of the common stock of the company (on an as-
converted basis), including THL with a 55% stake.
The ratings reflect the following financial expectations:
-- Revenue growth in the mid-single digits based on current
economic forecast - Could be down low single digits in a
global recession;
-- EBITDA growth should largely track revenue growth although
higher SG&A spending in 2011 will dampen the current-year
margin;
-- Free cash flow which should range below $100 million
annually. Fitch estimates free cash flow was approximately
$80 million in 2010 after adjusting for changes in restricted
assets;
-- Fitch expects that MoneyGram will continue to use excess cash
to reduce debt outstanding under its term loan. The company
had repaid approximately $350 million in debt from 2008
through the March 2011 quarter before increasing debt by $200
million in the June 2011 quarter to fund its preferred share
conversion (this does not include approximately $50 million
which was borrowed and repaid intraquarter June 2011).
Liquidity as of June 30, 2011 was adequate and includes $141
million available under the company's senior secured revolving
credit facility which expires May 2016, and $233 million in
unrestricted assets. MoneyGram historically has categorized its
entire cash balance as substantially restricted due to the
liquidity requirements of its Payment Systems business.
Total debt as of June 30, 2011 was $839 million which includes
$339 million outstanding, a senior secured term loan due November
2017, and $500 million of 13.25% senior secured second lien notes
which mature in March 2018.
The Recovery Ratings (RRs) for MoneyGram reflect Fitch's recovery
expectations under a distressed scenario, as well as Fitch's
expectation that the enterprise value of MoneyGram, and hence
recovery rates for its creditors, will be maximized in a
restructuring scenario (as a going concern) rather than a
liquidation scenario. In deriving a distressed enterprise value,
Fitch estimates a distressed EBITDA value of $143 million,
representing a 40% discount to MoneyGram's estimated pro forma
operating EBITDA of approximately $239 million, which is roughly
equivalent to the level of EBITDA necessary for MoneyGram to cover
its Fitch estimated fixed charges (cash interest expense and
maintenance capital expenditures). Fitch then applies a 6 times
(x) distressed EBITDA multiple, which considers comparable current
and historical market multiples, as well as the assumption that a
stress event would likely lead to multiple contraction relative to
historical levels. As is standard with Fitch's recovery analysis,
the revolver is fully drawn and cash balances fully depleted to
reflect a stress event. Fitch also adjusts MoneyGram's distressed
enterprise value for liquidity requirements to cover any estimated
shortfall in restricted asset coverage for a stress scenario. The
'RR1' for MoneyGram's senior secured first lien bank facility
reflects Fitch's belief that 91%-100% recovery is realistic. The
'RR3' for MoneyGram's senior secured second lien reflects Fitch's
belief that 51%-70% recovery is realistic.
Fitch's Recovery Ratings (RR) are a relative indicator of creditor
recovery prospects on a given obligation within an issuers'
capital structure in the event of a default. A broad overview of
Fitch's RR methodology as it relates to specific sectors can be
found at 'www.fitchratings.com/recovery'
Fitch has affirmed the following ratings for MoneyGram:
-- IDR at 'B+'.
Fitch has affirmed the following ratings for Worldwide:
-- IDR at 'B+';
-- Senior secured first lien credit facility at 'BB+/RR1'; and
-- Senior secured second lien notes at 'BB-/RR3'.
The Rating Outlook is Stable.
MOTORS LIQUIDATION: Supplement to June 30 GUC Trust Reports Filed
-----------------------------------------------------------------
On Sept. 14, 2011, Wilmington Trust Company, solely in its
capacity as trust administrator and trustee of the Motors
Liquidation Company GUC Trust (the "Trust"), acting pursuant to
Section 6.2 of the Motors Liquidation Company GUC Trust Agreement
dated as of March 30, 2011, and between the parties thereto (the
GUC Trust Agreement"), filed a supplement to the Trust's June 30,
2011 GUC Trust Reports (as such term is defined in the GUC Trust
Agreement) (the "Supplement to June 30 GUC Trust Reports") with
the Bankruptcy Court for the Southern District of New York.
A copy of the Supplement to June 30 GUC Trust Reports is available
for free at http://is.gd/eoFKc7
As reported in the TCR on Aug. 5, 2011, Wilmington Trust Company
filed, on Aug. 1, 2011, the GUC Trust Reports as of June 30, 2011,
with the U.S. Bankruptcy Court for the Southern District of New
York.
As of June 30, 2011, the Motors Liquidation Company GUC Trust had
total assets of $2.420 billion in total assets, $274.5 million in
total liabilities, and $2.146 billion in net assets in
liquidation.
The GUC Trust ended June 2011 with $226,000 in cash and cash
equivalents.
The Motors Liquidation Company GUC Trust is a successor to Motors
Liquidation Company (formerly known as General Motors Corp.)
within the meaning of Section 1145 of the United States
Bankruptcy Code. The GUC Trust holds, administers and directs the
distribution of certain assets pursuant to the terms and
conditions of the Motors Liquidation Company GUC Trust Agreement,
dated as of March 30, 2011, and pursuant to the Second Amended
Joint Chapter 11 Plan, dated March 18, 2011, of MLC and its
debtor affiliates, for the benefit of holders of allowed general
unsecured claims against the Debtors.
A copy of the June 30 GUC Trust Reports is available at:
http://is.gd/zwWli7
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,
and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is
also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is
providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP serve as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long serve as counsel regarding
supplier contract matters. FTI Consulting, Inc., serves as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Committee. Legal Analysis Systems, Inc., serves as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effective on March 31.
NASSAU BROADCASTING: Goldman, Fortress File Involuntary Petition
----------------------------------------------------------------
Affiliates of Goldman Sachs Group Inc. and Fortress Investment
Group LLC were two of the three secured lenders that filed
involuntary Chapter 7 bankruptcy petitions (Bankr. D. Del. Case
No. 11-12934) on Sept. 15 against Nassau Broadcasting Partners LP,
the owner of 45 radio stations in the northeastern U.S.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the lender group said in court papers that they are
owed $83.8 million secured by all of Nassau's property.
Involuntary petitions were also filed against three affiliates of
Nassau, which is based in Princeton, New Jersey.
According to the report, only unsecured creditors are permitted to
file involuntary bankruptcy petitions. To qualify, the lenders
said in a court filing that they waived $30,000 in secured claims
so they would have the required unsecured claims. The lenders say
the stations aren't worth enough to pay them in full.
The report relates that Nassau will be in a liquidating Chapter 7
bankruptcy officially if it consents or doesn't oppose. If Nassau
opposes, the lenders must show that Nassau is insolvent or
generally not paying its debts as they mature. Nassau also has
the right to fend off Chapter 7 liquidation by putting itself into
a Chapter 11 reorganization. The third lender filing the
involuntary petition was P.E. Capital LLC from Denver.
NAVIGATOR HOLDINGS: Completes $40MM Sale of Loan Portfolio
----------------------------------------------------------
Navigator Holdings LLC (Navigator) President Bobby Lazenby
announced today the sale of nearly $40 million in subprime, asset-
backed loans. The sale comes as an increasing number of investors
look to build balance sheets with high yielding assets.
After nearly three turbulent years, companies remaining in the
subprime industry have started to feel the benefits of expanded
credit. In the last year, several start-ups have also found
capital and are aggressively trying to establish their own
footprint in the marketplace.
"I'm happy to say the subprime market has rebounded nicely over
the past year with fresh or renewed capital sources becoming
available to lenders. We are seeing several industry players with
a strong desire to take advantage of what they believe is a void
in the marketplace. This has created a fairly competitive
marketplace and has led to some of the strongest pricing in years
for subprime, asset-backed receivables," said Lazenby.
Navigator Holdings LLC is the result of a Chapter 13 bankruptcy
restructuring of Manchester Inc. Manchester, then a publicly
traded company, failed after less than a year of operations, but
not before acquiring four companies and well over $100 million in
assets. In June 2008, Manchester emerged from bankruptcy, under
the direction of Bobby Lazenby, as the newly restructured
Navigator Holdings after the secured lenders agreed to a stock for
debt swap that left many of the unsecured creditors without
recourse.
Navigator Holdings owns and operates a captive finance company,
Navigator Acceptance. Navigator Acceptance specializes in
providing financing directly to those consumers with other than
prime credit.
About Manchester
Based in Dallas, Texas, Manchester Inc. (OTCBB: MNCS) --
http://www.manchesterinc.net/-- is in the Buy-Here/Pay-Here
auto business. Buy-Here/Pay-Here dealerships sell and finance
used cars to individuals with limited credit histories or past
credit problems, generally financing sales contacts ranging from
24 to 48 months. It operates six automotive sales lots, which
focus on the Buy-Here/Pay-Here segment of the used car market.
The company and its seven affiliates filed for Chapter 11
protection on Feb. 7, 2008 (Bankr. N.D. Tex. Case No.08-30703).
Winston & Strawn LLP represents the Debtors in their
restructuring efforts. Eric A. Liepins, Esq., is the Debtors'
local counsel. The U.S. Trustee for Region 6 appointed creditors
to serve on an Official Committee of Unsecured Creditors in these
cases. Powell Goldstein LLP represents the Committee as counsel.
As of the Debtors' bankruptcy filing, it listed total assets of
$131,582,157 and total debts of $123,881,668.
Manchester nka as Navigator Holdings LLC and its subsidiaries,
emerged from Chapter 11 bankruptcy protection effective as of
June 23, 2008. Pursuant to the terms of the Company's Third
Amended Chapter 11 Plan confirmed on June 17, 2009, Manchester's
senior lender, Palm Beach Multi-Strategy Fund, LLC, now owns
100% of the new stock in the Company.
NEUMEDIA INC: Posts $771,000 Net Loss in June 30 Quarter
--------------------------------------------------------
NeuMedia, Inc., filed its quarterly report on Form 10-Q, reporting
a net loss of $771,000 on $1.9 million of revenues for the three
months ended June 30, 2011, compared with net income of
$2.6 million on $2.9 million for the same period last year.
The Company's balance sheet at June 30, 2011, showed $13.5 million
in total assets, $11.4 million in total liabilities, and
stockholders' equity of $2.1 million.
As reported in the TCR on July 29, 2011, SingerLewak LLP, in Los
Angeles, expressed substantial doubt about NeuMedia's ability to
continue as a going concern, following the Company's results for
the fiscal year ended March 31, 2011. The independent auditors
noted that the Company has suffered recurring losses from
operations and is in a negative working capital position.
A complete text of the Form 10-Q is available for free at:
http://is.gd/Ibp6mM
Los Angeles-based NeuMedia, Inc. (OTC Bulletin Board: MNDL)
through its wholly-owned subsidiary Twistbox Entertainment, Inc.,
is a global producer and publisher of mobile entertainment.
NEWPAGE PORT: Canadian Unit Authorized to Sell Business
-------------------------------------------------------
On Sept. 9, 2011, NewPage Port Hawkesbury Corp. filed for and
obtained protection under the Companies' Creditors Arrangement
Act. Pursuant to an Order of the Court dated September 9, 2011,
Ernst & Young Inc. was appointed as Monitor in the CCAA
proceedings. Documents relating to the CCAA proceedings can be
obtained from the Monitor's Web site at http://www.ey.com/ca/npph/
NPPH operates a paper mill on Cape Breton Island, owns
approximately 50,000 acres of timberland and manages 1.5 million
acres of licensed crown timberland in Nova Scotia. The NPPH mill
consists of one newsprint paper machine and one supercalendered
paper machine with a combined annual production capacity of
545,000 metric tonnes. Supercalendered paper is a form of
enhanced newsprint that is a value added grade of paper used in
catalogues, magazines, inserts and flyers. Additionally, NPPH's
mill operates a thermo-mechanical pulp operation to provide the
bulk of its fibre requirements.
On Sept. 9, 2011, NPPH obtained a court order authorizing NPPH and
the Monitor to implement a sales process to sell NPPH's assets and
business. Sanabe & Associates LLC has been retained by NPPH to
assist in the sales process. The assets offered for sale include
the property and assets, and any liabilities required to be
assumed in connection with the purchase of the business of NPPH.
The sale of the Assets is on an "as is, where is" basis and
without surviving representations and warranties of any kind to
the purchaser. Subject to order of the Court, all rights, title
and interests of NPPH in and to the Assets will be sold free and
clear of all claims. In addition, a sale will be subject to court
approval.
The deadline for submission of a non-binding letter of intent
("LOI") is 5:00 p.m. EST on September 28, 2011. Information which
must be included in the LOI and information on the process for
submission can be found in Schedule "A" of the Sales Process Order
which can be found on the Monitor's website at
http://www.ey.com/ca/npph/
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
NON-INVASIVE MONITORING: Enters Into $100,000 Promissory Notes
--------------------------------------------------------------
Non-Invasive Monitoring Systems, Inc., on Sept. 12, 2011, entered
into a Promissory Note in the principal amount of $50,000 with
Frost Gamma Investments Trust, a trust controlled by Dr. Phillip
Frost, which beneficially owns in excess of 10% of the Company's
common stock. Also, on Sept. 12, 2011, NIMS entered into a
Promissory Note in the principal amount of $50,000 with Marie
Wolf. The interest rate payable by NIMS on both the Frost Gamma
Note and the Wolf Note is 11% per annum, payable on the maturity
date of Sept. 12, 2014, of the respective notes. Each of the
Frost Gamma Note and the Wolf Note may be prepaid in advance of
the Maturity Date.
About Non-Invasive Monitoring
Based in Miami, Florida, Non-Invasive Monitoring Systems, Inc.,
(OTC BB: NIMU) -- http://www.nims-inc.com/-- is primarily engaged
in the research, development, manufacturing and marketing of a
line of motorized, non-invasive, whole body, periodic acceleration
platforms, which are intended as aids to improve circulation and
joint mobility, relieve minor aches and pains, relieve morning
stiffness, relieve troubled sleep and as mechanical feedback
devices for slow rhythmic breathing exercise for stress
management.
The Company's balance sheet at April 30, 2011, showed
$1.27 million in total assets, $1.32 million in total liabilities,
and a stockholders' deficit of $53,000.
As reported in the Troubled Company Reporter on Nov. 3, 2010,
Morrison, Brown Argiz & Farra, LLP, in Miami, Florida, expressed
substantial doubt about Non-Invasive Monitoring Systems' ability
to continue as a going concern, following the Company's fiscal
year ended July 31, 2010. The independent auditors noted that the
Company has experienced recurring net losses, cash outflows from
operating activities and has an accumulated deficit and
substantial purchase commitments.
NURSERYMEN'S EXCHANGE: Committee Wants Case Converted to Chapter 7
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Tally One, Inc.,
formerly known as Nurserymen's Exchange, Inc., asks the U.S.
Bankruptcy Court for the Northern District of California to
convert the Debtor's Chapter 11 case to a case under Chapter 7 of
the Bankruptcy Code.
The Committee avers that there is cause to convert or dismiss the
case under 11 U.S.C. Section 1112(b), because the sale of the
Debtor's operating assets has left the estate without a reasonable
likelihood of rehabilitation and unnecessary Chapter 11
administrative costs are causing diminution of the estate.
Further, the sale and the accompanying termination of the Debtor's
employees left the Debtor without a business to operate and
without any employees or estate representatives, other than equity
holders, who are unable to act as appropriate estate fiduciaries
because of inherent conflicts between their self-interests and the
best interests of the estate.
Conversion, the Committee says, is in the best interest of
creditors and the estate, as opposed to dismissal of the Chapter
11 case or appointment of a Chapter 11 trustee, because there are
significant assets remaining to be administered, and that
administration can be performed more efficiently by a Chapter 7
trustee than a Chapter 11 trustee.
After the sale of the 39 acre Nursery Property and all of the
personal property assets associated with the Debtor's business
were transferred to Floramonda, Inc., on Aug. 5, 2011, the
Committee relates that the only significant assets left in the
Debtor's estate are the approximately 28 acres described as
"Planned Unit Development Land, the approximately 408 acres
described as "Open Space Land," avoidance actions, and claims and
causes of action, including claims against the Debtor's insiders,
which the Committee notes, can be liquidated without specialized
knowledge of experience with the Debtor's operations.
About Nurserymen's Exchange
Founded in 1941 as a San Francisco bulb brokerage business, and
currently based in Half Moon Bay in the San Francisco Bay Area,
Nurserymen's Exchange, Inc., is a producer, broker and wholesaler
of home decor products incorporating indoor blooming plants,
specialty foliage, holiday grow kits, and potted edibles.
Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D.
Calif. Case No. 11-31985) in San Francisco, California, on May 23,
2011. Stephen D. Finestone, Esq., in San Francisco, serves as
counsel to the Debtor. Omni Management Group, LLC, is the claims
and notice agent. C&A, Inc., serves as financial advisor. The
Debtor disclosed $34,755,036 in assets and $24,772,945 in
liabilities in its schedules.
An official committee of unsecured creditors has been appointed in
the case. The panel has tapped lawyers at Landau Gottfried &
Berger LLP as counsel.
Katten Muchin & Rosenmann, LLP, serves as the Debtor's special
counsel. Chelliah & Associates is its restructuring and
turnaround consultants and advisors. FocalPoint Securities, LLC,
is the Debtor's investment banker and financial advisor. Calegari
& Morri is the Debtor's accountant. The Abernathy MacGregor
Group, Inc., is the Debtor's corporate communications consultant.
OMNICARE INC: Moody's Assigns 'Ba3' Rating to Subordinated Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Omnicare,
Inc.'s ("Omnicare") $100 million senior subordinated note
offering, which represents a tack-on to its senior subordinated
notes due 2020. All of Omnicare's debt ratings, including the Ba3
senior subordinated note rating and its Ba3 Corporate Family
Rating are under review for possible downgrade. Existing ratings
were placed under review on August 23, 2011 when the company
announced that it had proposed to purchase PharMerica stock for
$15 per share or about $716 million including net debt of
PharMerica.
Rating assigned and under review for possible downgrade:
Omnicare, Inc.
New $100 million tack-on senior subordinated notes at Ba3, LGD4,
53%
RATINGS RATIONALE
Moody's expects proceeds from this tack-on offering to be used to
refinance remaining senior subordinated notes due 2015.
The review for possible downgrade reflects concerns regarding the
potential for higher leverage if Omnicare acquires PharMerica, at
a time when leverage already is high relative to Moody's
expectations.
Assuming the transaction occurs, Moody's review will consider: (1)
financing plans and impact on leverage; (2) potential for
synergies as well as challenges; and (3) management's ongoing
growth strategy and financial policies. Even if the proposed
transaction is terminated, the ratings could be downgraded if
Moody's believes that management's appetite for acquisitions and
debt, or potential changes to reimbursement, will limit ongoing
deleveraging.
Omnicare's current Ba3 CFR incorporates Moody's expectation that
the company will continue to see improvement in operating
performance. Because of uncertainty associated with the
reimbursement environment for long-term care pharmacy operators,
the ratings assume that Omnicare's credit metrics will trend
toward those above a "Ba3" rating level, including debt/EBITDA
below 3.5 times. The federal government's recent debt reduction
initiative raises uncertainty surrounding government funded
healthcare programs.
Prior to the PharMerica announcement, Moody's outlook for
Omnicare's ratings was already negative, reflecting Moody's
concerns that despite some recent stabilization, fundamental
operating conditions, including declining bed counts, competitive
pricing pressures and the potential for negative effects from
recent cuts in nursing home reimbursement rates, may not result in
metrics that are in line with Moody's expectations for the Ba3
rating. For the twelve months ended June 30, 2011, debt/EBITDA is
estimated at 4.3 times.
Omnicare, Inc.'s ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Omnicare, Inc.'s core
industry and believes Omnicare, Inc.'s ratings are comparable to
those of other issuers with similar credit risk. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Omnicare, Inc. (OCR), headquartered in Covington, Kentucky, is the
leading provider of institutional pharmacy services to the long
term care sector.
OPTIMUMBANK HOLDINGS: Board Elects Two New Directors
----------------------------------------------------
Optimumbank Holdings, Inc.'s Board of Directors elected two new
directors, Moishe Gubin and Seth Gillman. Each new director has
been elected for a term that will expire at the 2011 annual
meeting of the Company's shareholders. Mr. Gubin, a resident of
South Bend, Indiana, has served as a director of OptimumBank, the
Company's subsidiary bank, since March 2011. Mr. Gubin is a
principal in several companies in the health care and pharmacy
fields located in Illinois. Since 2010, he has served as the
Chief Executive Officer of United Rx, LLC, a long term care
pharmacy. Since 2005, he has served as the Chief Financial
Officer of New York Boys Management, LLC, which provides
consulting services for health care facilities, Tricare Rehab,
which provides rehabilitation services for health care facilities,
and Crestmark of Roselawn, a nursing facility located in Demotte,
Indiana. Mr. Gubin is a licensed CPA in the State of New York.
Seth Gillman, a resident of Lincolnwood, Illinois, has served
since 2005 as founder, administrator and managing member of
Passages Hospice, LLC, a hospice care provider located in Elgin,
Illinois. From 2001 to 2005, Mr. Gillman served as general
counsel, director of business development and corporate secretary
to ASTA Healthcare Company, Inc., a management company for nursing
home facilities. Mr. Gillman is licensed as an attorney and
nursing home administrator in the State of Illinois.
Mr. Gillman and Mr. Gubin are each expected to be named to the
Company's compensation and audit committees. The election of each
new director was not pursuant to any arrangement or understanding
between the new director and any third party. As of the date of
this report, no new director or any member of his immediate family
is a party, either directly or indirectly, to any transaction that
is required to be reported pursuant to Item 404(a) of Regulation
S-K under the Securities Exchange Act of 1934.
Each new director is entitled to be compensated for his services
on the Company's Board of Directors in accordance with the
Company's compensation arrangements for non-employee directors.
Each non-employee director is entitled to receive a $500 fee for
each regularly scheduled monthly board meeting attended unless the
director voluntarily waives the fee.
About OptimumBank Holdings
Fort Lauderdale, Fla.-based OptimumBank Holdings, Inc. is a
is a one-bank holding company and owns 100% of OptimumBank, a
state (Florida)-chartered commercial bank. The Bank offers a
variety of community banking services to individual and corporate
customers through its three banking offices located in Broward
County, Florida. The Bank's wholly-owned subsidiaries are OB Real
Estate Management, LLC, OB Real Estate Holdings, LLC, OB Real
Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC,
all of which were formed in 2009. OB Real Estate Management, LLC,
is primarily engaged in managing foreclosed real estate. OB Real
Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB
Real Estate Holdings 1695, LLC, hold and dispose of foreclosed
real estate.
OptimumBank is currently operating under a Consent Order issued by
the Federal Deposit Insurance Corporation ("FDIC") and the State
of Florida Office of Financial ("OFR"), effective as of April 16,
2010. As of Sept. 30, 2010, the Bank was considered
"undercapitalized" under these FDIC requirements. As an
"undercapitalized" institution, the Bank is subject to
restrictions on capital distributions, payment of management fees,
asset growth and the acceptance, renewal or rollover of brokered
and high-rate deposits. In addition, the Bank must obtain prior
approval of the FDIC prior to acquiring any interest in any
company or insured depository institution, establishing or
acquiring any additional branch office, or engaging in any new
line of business.
"The Bank [OptimumBank] has experienced recent and continuing
increases in nonperforming assets, declining net interest margin,
increases in provisions for loan losses, continuing high levels of
noninterest expenses related to the credit problems, and eroding
regulatory capital which raise substantial doubt about the Bank's
ability to continue as a going concern," the Company said in its
Form 10-Q for the quarter ended Sept. 30, 2010.
The Company's balance sheet at June 30, 2011, showed
$176.15 million in total assets, $177.32 million in total
liabilities, and a $1.16 million total stockholders' deficit.
The Company reported a net loss of $8.45 million on $8.78 million
of total interest income for the year ended Dec. 31, 2010,
compared with a net loss of $11.48 million on $14.00 million of
total interest income during the prior year.
The Company's continuing high levels of nonperforming assets,
declining net interest margin, continuing high levels of
noninterest expenses related to the credit problems, and eroding
regulatory capital raise substantial doubt about the Company's
ability to continue as a going concern.
Moreover, as reported by the TCR on April 20, 2011, Hacker,
Johnson & Smith PA, in Fort Lauderdale, Florida, noted that the
Company's operating and capital requirements, along with recurring
losses raise substantial doubt about its ability to continue as a
going concern.
ORAGENICS INC: To Resign as Marketing Vice President
----------------------------------------------------
Mr. Gerry David, Vice President of Marketing, tendered his
resignation with Oragenics, Inc., to be effective Sept. 30, 2011,
in order to pursue a leadership position with another public
company.
About Oragenics Inc.
Tampa, Fla.-based Oragenics, Inc. -- http://www.oragenics.com/--
is a biopharmaceutical company focused primarily on oral health
products and novel antibiotics. Within oral health, Oragenics is
developing its pharmaceutical product candidate, SMaRT Replacement
Therapy, and also commercializing its oral probiotic product,
ProBiora3. Within antibiotics, Oragenics is developing a
pharmaceutical candidate, MU1140-S and intends to use its
patented, novel organic chemistry platform to create additional
antibiotics for therapeutic use.
The Company's balance sheet at June 30, 2011, showed $1.3 million
in total assets, $6.3 million in total liabilities, and a
stockholders' deficit of $5.0 million.
As reported in the TCR on April 5, 2011, Kirkland, Russ, Murphy &
Tapp, P.A., in Clearwater, Fla., expressed substantial doubt about
Oragenics' ability to continue as a going concern, following the
Company 2010 results. The independent auditors noted that the
Company has incurred recurring operating losses, negative
operating cash flows and has an accumulated deficit.
PARKER BUILDING: Case Summary & 10 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Parker Building LLC
434 State Street
Schenectady, NY 12305
Bankruptcy Case No.: 11-12900
Chapter 11 Petition Date: September 16, 2011
Court: U.S. Bankruptcy Court
Northern District of New York (Albany)
Judge: Robert E. Littlefield, Jr.
Debtor's Counsel: Richard H. Weiskopf, Esq.
O'CONNELL & ARONOWITZ
54 State Street, 9th Floor
Albany, NY 12207
Tel: (518) 462-5601
Fax: (518) 462-2670
E-mail: rweiskopf@oalaw.com
Scheduled Assets: $1,131,958
Scheduled Debts: $2,570,753
A list of the Company's 10 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nynb11-12900.pdf
The petition was signed by Christopher J. Myers, managing member.
P&C POULTRY: Converted to Chapter 7 Liquidation
-----------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that P&C Poultry Distributors Inc. and affiliate Custom
Processors Inc. had their Chapter 11 cases converted to
liquidation in Chapter 7 last week. The handwriting was on the
wall when the U.S. Bankruptcy Judge in Los Angeles ended the use
of cash and gave the lender East West Bank permission to foreclose
in August.
About P&C Poultry and Custom Processors
City of Industry, California-based P&C Poultry Distributors, Inc.,
and its affiliate Custom Processors, Inc., are a further processes
and distributes processed poultry products operating out of a
U.S.D.A.-certified facility in the City of Industry, California.
P&C produces value-added frozen and fresh poultry products for
re-sale to major fast food restaurant chains and casual dining
services, including CKE Restaurants, Inc. (Carl's Jr., Hardee's),
Yum! Brands, Inc. (KFC, Taco Bell), the Carlson Companies (Pickup
Stix, T.G.I. Friday's) and Daphne's Greek Cafe.
P&C filed for Chapter 11 bankruptcy protection on Aug. 27, 2010
(Bankr. C.D. Calif. Case No. 10-46350). Brian L. Davidoff, Esq.,
C. John M. Melissinos, Esq., David Y. Joe, Esq., and Claire E.
Shin, Esq., at Los Angeles, Calif., represent the Debtors. The
Debtor estimated assets and debts at $10 million to $50 million.
Custom Processors filed a separate Chapter 11 petition on the same
day. The cases are jointly administered.
East West Bank at the outset was owed $5.5 million on a revolving
credit and $3.3 million on a term loan. It has liens on all the
assets.
Scott Blakeley, Esq., at Blakely & Blakeley LLP, in Irvine,
Calif., represents the creditors' committee.
PEARL MANAGEMENT: State Court's Show Cause Order Violates Stay
--------------------------------------------------------------
Katony Corporation and Stanley Mitchell obtained a judgment
against Pearl Management Corporation, Steven Vannoy and Patricia
Vannoy, and Kidz Playland Corporation in the Wayne County Circuit
Court on Oct. 1, 2009. The Vannoys are husband and wife and are
the principals, owners, and operating officers and managers of the
Debtors; They both have and continue to take an active role in its
affairs. On Oct. 15, 2009, the state court entered an Order
Appointing Receiver over the judgment Debtors with respect to nine
specified properties "in the possession of, under the control of,
or held in the name of" the judgment Debtors, with the ultimate
goal of liquidating them and applying the proceeds to the
Receivership expenses and the judgment debt. The receiver,
Gregory Saffady, took steps to sell some or all of said
properties. He also initiated proceedings to seek state court
approval of some of those sales and for other relief, some of
which was contested by the Debtors or the Vannoys.
On Feb. 10, 2011, the Receivership Order was expanded, apparently
by an order dated July 20, 2010, to encompass "all of Defendants'
non-exempt property" and to provide for actions with respect to
specified property of Patricia Vannoy. The state court order
restrained the Defendants "from any action or transfer of rights
or assets that might reduce Receiver's ability to carry out" that
order.
After filing for bankruptcy, the Debtors moved to have all of the
realty covered by the Receivership Order or the proceeds of any
previously effected sales, turned over to the Debtors, pursuant to
11 U.S.C. Sec. 543.
On Aug. 4, 2011, the Receiver's state court attorney asked that
court to enter its "order directing that the following persons
appear before the Court and show cause why they should not be held
in contempt for failure to comply with the court's order and/or
for interfering with the Court's appointed receiver in carrying
out his duties:
* Defendant Steven Vannoy
* Defendant Patricia Vannoy
* Defendants' Bankruptcy Attorney, Robert Reed
* Defendants' Bankruptcy Hearing Witness who offered to
purchase Receivership property in an obviously sham
transaction"
On Aug. 5, 2011, the state court issued its Order to Show Cause.
On Aug. 29, 2011, the Debtors filed a motion to quash the state
court Show Cause Order and a motion to stay further state court
proceedings.
On Aug. 31, 2011, the Court held that all nine parcels of real
estate which were the subject of the original Receivership Order
"are property of the bankruptcy estate." That Order permits, and
directs, the state court receiver to (a) consummate sales of any
of such properties that were the subject of a signed purchase
agreement prior to the filing of the bankruptcy case, and (2) turn
over to the Debtors of the remaining properties and all proceeds
of all sales.
In a Sept. 12, 2011 Opinion and Order, Bankruptcy Judge Walter
Shapero held that the state court's Show Cause Order as worded is
overly broad and clearly encompasses, and its language allows for,
the very real possibility of that court finding Mr. and Mrs.
Vannoy and their bankruptcy attorney, Robert Reed, to be in
contempt with respect to matters involving those nine parcels of
property and the very acts which the Receiver is precluded from
engaging in under the Bankruptcy Court's Aug. 31 Order with
reference to that property.
"[A]ny actions the Receiver may pursue and/or the state court
might take at that hearing related to those indicated properties
(or the disposition thereof) or the indicated individuals, which
is in any way inconsistent with the provisions of this Court's
August 31, 2011, Order, can and will be considered by this Court
to be in violation of that Order, and likely to be in violation of
the 11 U.S.C. Sec. 362 stay," Judge Shapero said.
Judge Shapero said the state court proceeding may go forward, but
only with respect to the Vannoys; and only then, (a) with respect
to any of their personally owned non-exempt property -- other than
their interests in the Debtors or the property of the bankruptcy
estate -- to the extent that such individually owned property may
presently be the subject of the existing Receivership Order; and
(b) with respect only to any actions of the Vannoys in their
individual capacities, and not in their capacities as members,
principals, employees, officials, managers of, or agents acting on
behalf of the Debtors.
The Bankruptcy Court will hold an evidentiary hearing on Oct. 5,
2011, at 10:00 a.m., for the purpose of determining whether or
not, or the extent to which, if any, the Court should enjoin
proceedings against the Vannoys during some part of the bankruptcy
case on the grounds that those may materially adversely affect the
reorganization process.
A copy of Judge Shapero's ruling is available at
http://is.gd/ucdiQXfrom Leagle.com.
Pearl Management Corporation filed for Chapter 11 bankruptcy
(Bankr. E.D. Mich. Case No. 11-47422) on March 18, 2011, listing
under $1 million in assets and debts. A copy of the Chapter 11
petition is available at no charge at
http://bankrupt.com/misc/mieb11-47422.pdf
PINNACLE ENTERTAINMENT Moody's Says 'B2' Unaffected by Expansion
----------------------------------------------------------------
Moody's Investors Service said Pinnacle Entertainment Inc.'s
announcement that it plans to spend $82 million on an expansion at
its River City Casino in south St. Louis County, MO, will not have
an immediate impact on the company's B2 Corporate Family Rating or
stable rating outlook.
The principal methodologies used in rating Pinnacle were the
Global Gaming rating methodology published in December 2009, and
the Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Other methodologies and factors that may have been considered in
the process of rating this issuer can also be found on Moody's
website.
Pinnacle Entertainment Inc. owns and operates seven casinos,
located in Louisiana, Missouri, Indiana and Nevada and a racetrack
in Ohio. The company is also developing L'Auberge Casino & Hotel
Baton Rouge, which is scheduled to open in the summer of 2012. In
August 2011, Pinnacle acquired a 26% ownership stake in Asian
Coast Development (Canada) Ltd., an international development and
real estate company currently developing a resort in Vietnam.
PITT PENN: Has Green Light to Amend Suit Against Tabor Academy
--------------------------------------------------------------
Bankruptcy Judge Brendan Linehan Shannon granted, in part, and
denied, in part, a motion filed by Tabor Academy to dismiss the
lawsuit, Industrial Enterprises of America, Inc., v. Tabor
Academy, Hawken School, and The Lou Frey Institute of Government
and Politics, Adv. Proc. No. 11-51879 (Bankr. D. Del.).
The Plaintiff on April 30, 2011, filed the Complaint against
Tabor, Hawken School, and The Lou Frey Institute of Government and
Politics, alleging an elaborate scheme masterminded by two former
executives of IEAM, John Mazzuto and James Margulies, to defraud
IEAM and its shareholders and creditors out of millions of
dollars. The Plaintiff asserts that, among other acts of
misconduct, Messrs. Mazzuto and Margulies inflated the value of
IEAM stock, illegally issued shares of IEAM, and retained at least
some of the proceeds of the sale of such stock, all to IEAM's
detriment. To perpetrate the improper issuance of IEAM stock, the
Plaintiff alleges that Messrs. Mazzuto and Margulies illegally
used a Form S-8 employee stock option plan, which IEAM filed with
the Securities and Exchange Commission, as a conduit for
distributing millions of shares to various non-employees,
including Tabor and the other Defendants. The Plaintiff also
alleges that Tabor, a preparatory school in Massachusetts,
received IEAM stock without providing any consideration in
exchange for such stock, and then sold the stock on the open
market at a profit. The Plaintiff asserts that between January
2005 and August 2007, Tabor received a total of approximately
305,000 IEAM shares of and subsequently sold such shares for
approximately $1.52 million.
Tabor filed the motion to dismiss the Complaint in its entirety as
it pertains to Tabor. As to the fraudulent transfer claims in the
complaint, Tabor contends that the transferred stock at issue was
not issued by IEAM and was thus not property of the estate. Tabor
further alleges that such stock had no value and that IEAM cannot
simultaneously assert that such stock had value that is now
recoverable by the Plaintiff while also asserting that IEAM was
insolvent when the stock transfers were made. Tabor also argues
that the intentional fraud allegations fail because the Plaintiff
is judicially estopped from asserting that IEAM made the transfers
with the requisite fraudulent intent when it has recently filed
certain complaints in the Court against former IEAM attorneys and
insiders in which it has alleged that IEAM was a victim of various
frauds perpetrated by these defendants. Tabor additionally
asserts that 11 U.S.C. Sec. 546(e) insulates the allegedly
fraudulent stock transfers, that the Plaintiff has failed to
identify a creditor that could assert the Sec. 544 claim, and that
certain of the allegedly fraudulent transfers under Sections 544
and 548 are outside the applicable statute of limitations. As to
the unjust enrichment claim, Tabor contends that if the claim is
construed as an estate cause of action, then the claim must fail
because IEAM could not have been harmed by the stock transfers. On
the other hand, if the claim is construed as a shareholder claim,
then Tabor argues that the claim is outside the applicable statute
of limitations, and that the Plaintiff lacks standing and has
failed to identify the shareholders on whose behalf the claim is
being alleged.
In a Sept. 16 Opinion, Judge Shannon said Tabor has established
that dismissal is warranted with respect to the Sec. 544 claim and
the unjust enrichment claim asserted in the Complaint, but with
leave to amend the Complaint. A copy of the decision is available
at http://is.gd/SNeEP2from Leagle.com.
About Industrial Enterprises
Pittsburgh, Pennsylvania-based Industrial Enterprises of America,
Inc., f/k/a Advanced Bio/Chem, Inc., filed for Chapter 11
protection (Bankr. D. Del. Case No. 09-11508) on May 1, 2009.
Pitt Penn Holding Co., Inc., and Pitt Penn Oil Co., LLC, each
filed voluntary petitions for Chapter 11 relief (Bankr. D. Del.
Case Nos. 09-11475 and 09-11476) on April 30, 2009. EMC
Packaging, Inc., filed a voluntary petition for Chapter 11 relief
(Bankr. D. Del. Case No. 09-11524) on May 4, 2009. Unifide
Industries, LLC, and Today's Way Manufacturing LLC, each filed a
voluntary petition for Chapter 11 relief (Bankr. D. Del. Case Nos.
09-11587 and 09-11586) on May 6, 2009.
PPH, PPO, EMC, Unifide, and Today's Way are each subsidiaries of
IEAM. The cases are jointly administered under Case No. 09-11475.
Christopher D. Loizides, Esq., at Loizides, P.A., in Wilmington,
Del., represents the Debtors as counsel. In its petition,
Industrial Enterprises disclosed total assets of $50,476,697 and
total debts of $17,853,997.
Industrial Enterprises originally operated as a holding company
with four wholly owned subsidiaries, PPH, EMC, Unifide, and
Today's Way. PPH, through its wholly owned subsidiary, PPO, was a
leading manufacturer, marketer and seller of automotive chemicals
and additives.
EMC's original business consisted of converting hydrofluorocarbon
gases R134a and R152a into branded private label refrigerant and
propellant products. Unifide was a leading marketer and seller of
automotive chemicals and additives. Today's Way manufactured and
packaged the products which were sold by Unifide.
PJ FINANCE: Torchlight Begs Permission to File Plan
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that PJ Finance Co. LLC will face Torchlight Loan Services
LLC at a requested Sept. 21 hearing where the special servicer for
$475 million in mortgage-backed securities will ask the bankruptcy
judge in Delaware to end the company's exclusive right to propose
a Chapter 11 plan.
According to the report, Torchlight says that administrative costs
in the six-month-old reorganization are "out of control." The
lender claims the apartment owner is trying to "cajole Torchlight
into accepting its unreasonable proposal" for a Chapter 11 plan
that would "enrich equity holders at the expense of Torchlight."
The lender argues that "no viable solution seems in sight" while
"nothing has happened in these cases other than a run-up in
professional fees." Torchlight says it's the only significant
creditor in the case, because unsecured debt is only $4.4 million.
Since bankruptcy, the lender says that less than $5 million has
been paid toward $15 million in accrued interest.
PJ's exclusive right to propose a plan is currently set to expire
on Sept. 21.
Torchlight had been seeking dismissal of the case, contending the
Chapter 11 filing was not 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.
RAM ENERGY: Receives Notice of Listing Deficiency From Nasdaq
-------------------------------------------------------------
RAM Energy Resources, Inc. received a letter from The Nasdaq Stock
Market notifying the company, that for the 30 consecutive business
days preceding the date of the letter, the bid price of the
company's common stock had closed below the $1.00 per share
minimum bid price required for continued listing on The Nasdaq
Global Market pursuant to Nasdaq's listing requirements. This
notification is simply a notice of deficiency, not of imminent
delisting, and has no effect on the listing or trading of RAM's
common stock on The Nasdaq Global Market at this time.
RAM believes that the minimum bid requirement is the only Nasdaq
listing condition which the company does not currently meet.
Accordingly, RAM has 180 days to regain compliance with the
minimum bid price rule, defined as meeting or exceeding the $1.00
per share minimum closing price for a period of at least 10
consecutive trading days (but generally no more than 20
consecutive trading days) to demonstrate the company's ability to
maintain long-term compliance. In addition, provided the company
meets all other listing standards at the end of the initial 180
day compliance period, except that of the $1.00 minimum bid, RAM
will be afforded a second 180 day period in which to comply with
the minimum bid requirement. If the company does not qualify for
the second compliance period or fails to regain compliance during
the second 180 day period, then Nasdaq will notify RAM of its
determination to delist the company's common stock.
RENAISSANCE LEARNING: S&P Assigns Prelim. 'B' Corp. Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
corporate credit rating to Wisconsin Rapids, Wisc.-based
Renaissance Learning Inc. The outlook is stable.
"We also assigned preliminary 'BB-' issue-level and preliminary
'1' recovery ratings to Renaissance's proposed $195 million senior
secured credit facilities. The preliminary '1' recovery rating
indicates our expectations for very high (90%-100%) recovery in
the event of payment default," S&P stated.
The proposed senior secured credit facilities consist of a $20
million revolving credit facility due 2016 and a $175 million term
loan B due 2017. The company intends to use the proceeds, along
with a proposed $75 million second-lien term loan due 2018
(unrated) an equity contribution of $197 million from the sponsor,
and $33 million cash on hand, to fund the purchase of Renaissance.
Ratings are based on preliminary documentation and are subject
to the proposed transaction closing and review of final documents.
"The ratings on Renaissance reflect government budget headwinds
and its highly leveraged financial profile," said Standard &
Poor's credit analyst David Tsui. Renaissance's incumbency
position in its fragmented niche market, highly recurring
subscription revenue base, and good free operating cash flow
characteristics are partly offsetting factors.
RFH HOLDINGS: Case Summary & 4 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: RFH Holdings, LLC
202 Nadine Court
Incline Village, NV 89451
Bankruptcy Case No.: 11-38027
Chapter 11 Petition Date: September 15, 2011
Court: U.S. Bankruptcy Court
District of Oregon
Judge: Elizabeth L. Perris
Debtor's Counsel: Martin P. Meyers, Esq.
SUSSMAN SHANK LLP
1000 SW Broadway, #1400
Portland, OR 97205
Tel: (503) 227-1111
E-mail: martin@sussmanshank.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's four largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/orb11-38027.pdf
The petition was signed by Jean S. Solberg, president of Jean S.
Solberg, Inc., manager.
RIVER ROAD: LSAT Urges High Court Review of Credit Bidding Case
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Loan Syndication & Trading Association filed
papers on Sept. 13 urging the U.S. Supreme Court to hear an appeal
and resolve a split among the federal appellate courts on the
question of whether a secured creditor can force a bankrupt
company to hold an auction where the lender would have a right to
bid its secured debt rather than cash.
The report relates that although the LSAT believes the U.S. Court
of Appeals in Chicago correctly decided the issue, the industry
trade group wants the high court to affirm the right of secured
creditors to make so-called credit bids. A group of law school
professors also filed papers telling the Supreme Court it should
review the case.
According to Mr. Rochelle, the LSAT said in its papers that
preventing credit bidding "presents a serious risk of favoritism
to equity-holders or corporate managers, jeopardizing the
paramount aim of estate maximization for the benefit of
creditors."
The LSAT believes that the Seventh Circuit in Chicago properly
followed the plain meaning of the statute. Should the Supreme
Court take the case, it will be presented with an interesting case
involving the plain meaning doctrine because the U.S. Court of
Appeals in New Orleans ruled that the opposite result was
commanded by the language of the law itself.
About River Road Hotel
River Road Hotel Partners, LLC, developed and manages the
InterContinental Hotel Chicago O'Hare located in Rosemont,
Illinois. Affiliate RadLAX Gateway Hotel LLC owns the Radisson
hotel at Los Angeles International Airport. Both are ultimately
controlled owned by Harp Group.
River Road and its affiliates filed Chapter 11 in Chicago,
Illinois (Bankr. N.D. Ill. Lead Case No. 09-30029) on Aug. 17,
2009. Based in Oak Brook, Illinois, River Road estimated assets
of as much as $100 million and debt of as much as $500 million in
its Chapter 11 petition. River Road disclosed $0 in assets and
$14,400,000 in liabilities as of the Chapter 11 filing. Terrence
O'Brien & Co. serves as the Debtors' appraiser, and Madigan &
Getzendanner as serves as the Debtors' special counsel.
RadLAX and its affiliates filed a separate chapter 11 petition
(Bankr. N.D. Ill. Case No 09-30047), estimating assets at
$50 million to $100 million.
David M. Neff, Esq., at Perkins Coie LLP, serves as counsel to the
River Road and RadLAX debtors. The two cases, however, are not
jointly administered.
The Official Committee of Unsecured Creditors is represented by
Stephen T. Bobo and Ann E. Pille at Reed Smith LLP.
Adam A. Lewis, Esq., and Norman S. Rosenbaum, Esq., of Morrison
Foerster LLP of San Francisco, California; and John W. Costello,
Esq., and Mary E. Olson, Esq., of Wildman, Harrold, Allen & Dixon
LLP of Chicago, Illinois, represent Amalgamated Bank. John
Sieger, Esq., and Andrew L. Wool, Esq., of Katten Muchin Rosenman
LLP represent U.S. Bank.
RQB RESORT: Goldman Sachs Nears Acquisition of Sawgrass Marriott
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that secured lender Goldman Sachs Mortgage Co. is in line
to assume ownership of the Sawgrass Marriott Resort in Ponte Vedra
Beach, Florida, if the U.S. Bankruptcy Court in Jacksonville,
Florida, ultimately approves the revised Chapter 11 plan filed
last week alongside a hearing for approval of the explanatory
disclosure statement.
Since the reorganization began in March 2010, the case was beset
with squabbles between New York-based Goldman Sachs and the
resort. January marked a turning point when the bankruptcy judge
ruled in favor of Goldman Sachs by concluding that the property
was worth $132 million, compared with the $193 million balance on
the lender's mortgage. The resort filed a motion for
reconsideration and lost.
The plan gives Goldman Sachs ownership and an unsecured deficiency
claim for almost $64 million. Trade suppliers with $190,000 in
claims will recover half their debt. The plan calls for
terminating the management agreement with Interstate Hotels &
Resorts LLC. Interstate's claim will be in a separate class with
the Goldman Sachs deficiency claim. Together, the disclosure
statement says they will recover about 3% from splitting up some
$2.3 million in cash. In return for ownership, Goldman Sachs
agreed to give releases to the resort's principals. The franchise
agreement with Marriott International Inc. will continue under
Goldman Sachs' ownership, the plan says.
About RQB Resort LP
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.
The resort's owners' exclusive right to propose a plan expired
this month when the Chapter 11 case was 18 months old.
SAJ LODGING: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: SAJ Lodging, Inc.
fdba Super 8 Motel
dba Royal Inn and Suites
4750 S.R. 46 West
Sanford, FL 32771
Bankruptcy Case No.: 11-14088
Chapter 11 Petition Date: September 16, 2011
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Debtor's Counsel: Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
115 N. MacDill Avenue
Tampa, FL 33609-1521
Tel: (813) 877-4669
Fax: (813) 877-5543
E-mail: Buddy@tampaesq.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Jayant Patel, president.
SARAI INC: Case Summary & 15 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Sarai, Inc.
19700 US Hwy 441
Mount Dora, FL 32757
Bankruptcy Case No.: 11-14022
Chapter 11 Petition Date: September 15, 2011
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Debtor's Counsel: R. Scott Shuker, Esq.
LATHAM SHUKER EDEN & BEAUDINE LLP
P.O. Box 3353
Orlando, FL 32802
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: bankruptcynotice@lseblaw.com
Scheduled Assets: $4,381,152
Scheduled Debts: $5,542,997
A list of the Company's 15 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/flmb11-14022.pdf
The petition was signed by Bharat Desai, president.
SARAI SANFORD: Case Summary & 10 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Sarai Sanford, LLC
dba Holiday Inn Express
3401 S. Orlando Drive
Sanford, FL 32773
Bankruptcy Case No.: 11-14026
Chapter 11 Petition Date: September 15, 2011
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Debtor's Counsel: R. Scott Shuker, Esq.
LATHAM SHUKER EDEN & BEAUDINE LLP
P.O. Box 3353
Orlando, FL 32802
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: bankruptcynotice@lseblaw.com
Scheduled Assets: $2,877,243
Scheduled Debts: $7,865,878
A list of the Company's 10 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/flmb11-14026.pdf
The petition was signed by Nikesh Shah, manager.
SCANA CORPORATION: Moody's Cuts Subordinated Debt Rating to 'Ba1'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of SCANA
Corp. (SCANA), including the senior unsecured debt and Issuer
Rating to Baa3 from Baa2, the subordinated debt to Ba1 from Baa3
and the short-term rating for commercial paper to Prime-3 from
Prime-2. Moody's also downgraded South Carolina Electric & Gas
Company's (SCE&G), senior unsecured debt and Issuer Rating to Baa2
from Baa1, as well as the senior unsecured debt rating of
affiliate South Carolina Generating Company Inc. (GENCO) to Baa3
from Baa2. At the same time Moody's is correcting the rating for
Ser. 2003 4.875% Pollution Control Revenue Bonds issued by the
County of Berkeley, SC (for which GENCO is the borrower and SCANA
is the guarantor) to Baa3 from WR. The rating was previously
withdrawn on August 17, 2011 due to an internal administrative
error.
Concurrent with this rating action, Moody's affirmed the first
mortgage bond rating of SCE&G at A3, along with the short-term
rating for commercial paper of Prime-2 for SCE&G and for South
Carolina Fuel Company Inc. The rating action concludes the rating
review for possible downgrade that had commenced on August 1,
2011. The rating outlook for SCANA and SCE&G is stable.
Downgrades:
Issuer: SCANA Corporation
-- Issuer Rating, Downgraded to Baa3 from Baa2
-- Senior Unsecured, Downgraded to Baa3 from Baa2
-- Junior Subordinate, Downgraded to Ba1 from Baa3
Issuer: South Carolina Electric & Gas Company
-- Issuer Rating, Downgraded to Baa2 from Baa1
Issuer: South Carolina Generating Company, Inc.
-- Senior Unsecured, Downgraded to Baa3 from Baa2
Affirmations:
Issuer: South Carolina Electric & Gas Company
-- First Mortgage Bond, Affirmed at A3
-- Senior Secured Shelf, Affirmed at (P)A3
-- Commercial Paper Rating (P-2)
Issuer: South Carolina Fuel Company Inc.: Commercial Paper
Rating (P-2)
RATINGS RATIONALE
The downgrade of SCE&G's senior unsecured and Issuer Rating to
Baa2 considers the heightened risk associated with a large nuclear
construction program extending through 2019 that is expected to be
about 50% debt financed and will pressure future financial
metrics. In general, Moody's expects that utilities embarking on a
nuclear construction cycle will have financial metrics that are
robust for their rating category. In Moody's view, SCE&G's
financial metrics meet that criterion for a Baa2 rating, but not
for a Baa1 rating. Moody's rating also takes into account a
credit-supportive regulatory regime. South Carolina legislation
that incentivizes nuclear construction and very manageable
environmental compliance requirements, which is balanced against
the extreme asset concentration that the Summer station will
represent upon completion. SCE&G's first mortgage bond rating of
A3 reflects Moody's typical two notch uplift for senior secured
obligations of regulated utilities with stable outlooks.
The downgrade of SCANA's senior unsecured and Issuer rating to
Baa3 considers the extent to which SCE&G's nuclear construction
program will dominate the risk profile of SCANA and will pressure
the group's future consolidated financial metrics. Moody's rating
also takes into account the credit-supportive regulatory regimes
in all states of operation, legislation in South Carolina that is
highly supportive of nuclear construction, the extreme asset
concentration that the Summer station will represent upon
completion, the structural subordination of the creditors to the
holding company, a sizeable debt load at the parent and an ongoing
need to access capital markets.
Moody's views the $5.8 billion Summer nuclear construction project
as transformative for SCE&G and out of scale to the size of the
company, which has total assets of $10.6 billion and total equity
of $3.5 billion. Nuclear generation (all from one plant) will
increase from 21% of total in 2010 to 56% in 2019, a fuel type
concentration second only to Exelon (spread across seventeen
plants). The asset concentration at Summer will be nearly unique
in the industry (by comparison, Palo Verde represents about 45% of
MWH generation of El Paso Electric and 27% of Arizona Public
Service). Moody's estimates that the three Summer units will
represent over 40% of SCE&G's total assets and approximately 59%
of electric rate base.
Moody's acknowledges a regulatory and legislative framework that
specifically encourages nuclear construction. The South Carolina
Base Load Review Act provides an up-front determination of
prudence and usefulness on a nuclear power plants and related
transmission as well as an incentive rate of return of 11%. It
further provides that nuclear CWIP will be earn a return on
capital, adjusted annually, as well as a high degree of certainty
that the costs of construction, including AFUDC, will be recovered
by the utility in the event of abandonment, including a return of
capital and a return on the unamortized balance. Moody's notes
that SCE&G's receipt of the NRC's Final Safety Evaluation Report
was a significant step toward obtaining a Combined Operating
License and that construction, at this relatively early stage, is
slightly under budget. Nonetheless, the technology has not yet
been deployed elsewhere and the long construction period increases
the likelihood of cost overruns. SCE&G's average electric rates
are already high compared to peers and are expected to increase
substantially. Moody's is concerned that rate fatigue caused by
Summer could put pressure on regulators in the future to find
offsetting reductions in non-Summer rates, especially if high
rates deter the industrial and commercial investment that has been
a mainspring of South Carolina's economic development strategy.
The stable rating outlook for both companies reflects the SCANA
group's high percentage of the regulated earnings, assets and cash
flow (close to 95%), the excellent legislative underpinnings to
SCE&G's construction program (including strong mechanisms for
recovery if an abandonment of the nuclear project becomes
necessary), the company's highly constructive relationship with
regulators in all jurisdictions, and near-term expectations that
credit metrics will remain well positioned as a mid-Baa rated
utility.
Ratings upgrades appear unlikely over the near term, primarily due
the size and duration of the Summer construction program.
Nevertheless, if the companies were to substantially de-lever
leading to a stronger set of key financial credit metrics,
including a ratio of CFO pre-w/c to debt (excluding bonus
depreciation) on a sustainable basis above 22% for SCE&G and above
19% for SCANA, ratings could be upgraded. Also, if construction
were abandoned (e.g. if a COL were denied), the resultant decrease
in business risk combined with expected full or near-full recovery
on the abandonment coupled with implementation of a cost-effective
alternative resource plan could be the basis for a ratings upgrade
at SCE&G and SCANA.
SCE&G's and SCANA's ratings could be downgraded if Moody's were to
change its current assessment of the regulatory framework or the
ability to recover costs and earn returns (e.g., if rate-increase
fatigue causes the SC PSC to seek a material reduction in the
utility's non-Summer returns), or if Summer incurs material cost
overruns that are not included in the approved budget.
Furthermore, if key metrics show a deterioration (e.g, if CFO-W/C
to Debt were below 17% for SCE&G or below 15% for SCANA, in each
case with no improvement clearly visible) ratings could be
downgraded.
The principal methodology used in this rating was Regulated
Electric and Gas Utilities published in August 2009.
Headquartered in Cayce, South Carolina, SCANA has assets of
approximately $13 billion at June 30, 2011 and is an energy-based
holding company principally engaged, through subsidiaries, in
electric and natural gas utility operations and other energy-
related businesses. SCANA's primary operating subsidiary is SCE&G,
a Columbia, South Carolina-based regulated public utility engaged
in the generation, transmission, distribution and sale of
electricity to approximately 661,000 retail and wholesale
customers as well as the purchase, sale and transportation of
natural gas at retail to approximately 314,000 customers. SCANA
also wholly owns Public Service Company of North Carolina (senior
unsecured debt A3, stable outlook), a North Carolina based local
gas distribution company.
SEAHAWK DRILLING: Committee Seeks Hiring Modification
-----------------------------------------------------
BankruptcyData.com reports that Seahawk Drilling's official
committee of equity security holders filed with the U.S.
Bankruptcy Court a motion to modify terms of employment of Duff &
Phelps Securities as financial advisor in order to authorize
related entity D&P LLC (Contact: Daniel Beaulne) to provide
additional support on Blake Platform Rigs and Pride International
matters. Both Blake and Pride have filed proofs of claim against
the Debtors. D&P's hourly rates are as follows: managing director
at $625, director at $550, vice president at $450, senior
associate at $350, analyst at $250 and research analyst at $160.
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.
SEALED AIR: S&P Lowers Corp. Credit Rating to BB; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Elmwood Park, N.J.-based Sealed Air Corp. to 'BB' from
'BB+'. The outlook is stable.
"The ratings reflect Sealed Air's satisfactory business risk
profile and aggressive financial risk profile, including the
increased debt leverage resulting from the pending $4.5 billion
acquisition of Diversey Holdings Inc.," said Standard & Poor's
credit analyst Liley Mehta.
Standard & Poor's also lowered the ratings on Sealed Air's
existing senior unsecured notes to 'BB' (same as the corporate
credit rating) from 'BB+' and revised the recovery rating to '4'
from '3'. Sealed Air's proposed $1.5 billion in senior unsecured
notes (maturing in eight to 10 years) were assigned 'BB' issue
ratings and '4' recovery ratings. The '4' recovery ratings
indicate prospects for average (30% to 50%) recovery in the event
of a payment default.
Standard & Poor's also affirmed its 'BB+' issue ratings and '2'
recovery ratings on Sealed Air's $3 billion senior secured credit
facilities. The corporate credit and issue-level ratings on
Diversey remain on CreditWatch with positive implications.
"Following close of the transaction, we expect Diversey's senior
secured debt and unsecured notes to be repaid and therefore
to withdraw our ratings on this debt," Ms. Mehta said.
The acquisition of Diversey solidifies Sealed Air's strong
business risk profile while providing growth opportunities in
emerging markets and in food and food processing end markets. With
pro forma sales of about $7.9 billion for the 12 months ended June
30, 2011, Sealed Air is a leading global manufacturer of a wide
range of packaging and performance-based materials and equipment
systems that serve an array of food, industrial, medical, and
consumer applications. Diversey is a leading global manufacturer
and marketer of cleaning and hygiene products and related services
for institutional and industrial cleaning.
"Potential integration challenges pose some credit risk, given the
large size of the acquisition, global scale of operations, and
different product offerings of the two companies," Ms. Mehta said.
However, "the relative predictability and consistency of operating
results across both companies is a key credit strength," she
added.
During the next few years, Standard & Poor's expects Sealed Air to
use discretionary cash flow primarily for debt reduction and to
limit share repurchases until credit measures strengthen to
appropriate levels. Given the need for improvement in the
financial profile, the ratings would not support additional debt-
financed acquisitions and large share repurchases until credit
measures improve to appropriate levels.
SKY LOFTS: CAB Bedford LLC Files Plan; All Creditors Paid in Full
-----------------------------------------------------------------
Creditor CAB Bedford LLC has filed a first disclosure statement
for its Plan of Reorganization of Sky Lofts, LLC, dated Aug. 10,
2011.
The CAB Plan is premised on a prompt sale of the Debtor and S&Y
Enterprises, LLC's real property to CAB Bedford for an amount at
least sufficient to pay Allowed Claims against the Debtors in full
in cash. On the Effective Date, CAB Bedford will be deemed to
waive any and all Claims arising from the Debtors' rejection of
their prepetition contract with CAB Bedford for the sale of the
Property.
S&Y Enterprises, which filed for Chapter 11 on Nov. 11, 2010, in
the Eastern District of New York (Case No. 10-50623) is an entity
that shares the same management and equity ownership as the
Debtor. Sky Lofts is the owner of certain real estate located at
242-246 Bedford Avenue, Brooklyn, New York. Its affiliate, S&Y
Enterprises, is the owner of certain adjoining real estate located
at 130 North 4th St. (a/k/a 193 Berry Street Street, a/k/a 240
Bedford Ave.), Brooklyn, New York (together, the "Property").
CAB Bedford believes that, because CAB Bedford's Claims would
increase proportionately with each additional dollar offered for
the Property by a party other than CAB Bedford and because only
CAB Bedford can waive these claims, CAB Bedford is the only party
capable of proposing a plan that leaves all creditors of the
Debtors unimpaired.
The essence of the New CAB Offer is that CAB Bedford will (i) pay
$21,969,118 to the Debtor's estates for the Property at closing,
with any excess sale proceeds remaining in the Disputed Non-
Insider Claims Reserve after all non-Insider Claims are resolved
to be paid to the Debtors' estates, and any excess sales proceeds
remaining in the Disputed Insider Claim Reserve after all Insider
Claims are resolved to be paid to CAB Bedford or its designee,
(ii) waive any and all claims arising from the Debtors' rejection
of the Original Sale Agreement, and (iii) close within 14 days
after entry of an order confirming this Plan.
CAB Bedford's Plan designates 5 Classes of Claims and Interests.
The Banco Popular Secured Claim in Class 1 will be paid in full in
cash on the Initial Distribution Date.
Priority Unsecured Claims of the New York State Department of
Taxation and the New York City Water Board in Class II
will be paid in full in cash on the Initial Distribution Date.
All non-Insider general unsecured Claims in Class III, to the
extent allowed, will be paid in full in cash on the Initial
Distribution Date.
All Insider general unsecured Claims, to the extend Allowed on the
Effective Date, will be paid in cash on the Initial Distribution
Date.
Equity Interest Holders in Class V will, upon the Effective Date,
retain their Interests in the Debtor's estates.
Counsel for CAB Bedford LLC can be reached at:
Kelley A. Cornish, Esq.
PAUL WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New Yor, N.Y. 10019
A copy the CAB Bedford's first disclosure statement for its Plan
of Reorganization of Sky Lofts, LLC, is available for free at:
http://is.gd/wD4tNe
Brooklyn, New York-based Sky Lofts, LLC, owns and maintains real
estate. It filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case
No. 10-51510) on Dec. 8, 2010, Judge Elizabeth S. Stong presiding.
The Law Offices of David Carlebach, Esq. -- david@carlebachlaw.com
-- serves as bankruptcy counsel. The Debtor estimated its assets
at $10 million to $50 million and debts at $1 million to
$10 million.
Affiliates Twin City Lofts, LLC (Bankr. E.D. N.Y. Case No.
10-50625) and S & Y Enterprises, LLC (Bankr. E.D. N.Y. Case No.
10-50623) filed separate Chapter 11 petitions on Nov. 11, 2010.
SOLYNDRA LLP: Examiner Sought to Probe Government Guarantee
-----------------------------------------------------------
Eric Morath, writing for Dow Jones' Daily Bankruptcy Review,
reports that the Republican chairman of the House Judiciary
Committee is calling for Attorney General Eric Holder to appoint
an examiner in Solyndra LLC's bankruptcy case to investigate the
financial relationship between the Department of Energy and the
company.
Recent reports about the firm's Chapter 11 filing "have raised
suspicion about the extent to which the Obama administration may
have singled out Solyndra for special treatment . . . because of
the president's political relationship with one of the company's
major investors, George Kaiser," wrote House Judiciary Committee
Chairman Lamar Smith (R., Texas) in a letter to Mr. Holder,
according to the report.
Mr. Kaiser, the Fremont, Calif., company's largest backer, was a
major fund-raiser in President's Barack Obama's 2008 campaign.
According to DBR, Mr. Smith wrote the examiner is needed to "shed
light on the circumstances" that led to the Energy Department
offering the guarantee and the subsequent restructuring of the
company's debt. That restructuring made the repayment of
government-backed loans a lower priority than claims of some
private investors.
According to court papers, Solyndra must pay $69.3 million owed to
lenders led by Argonaut Ventures I LLC before it pays back some
$527 million in loans that the government guaranteed.
DBR says a spokeswoman for the U.S. trustee program was not
immediately available to comment. A Justice Department spokesman
deferred comment to the trustee's office. DBR also relates a
spokesman for Mr. Smith's Democratic colleagues on the Judiciary
Committee could not immediately comment. An attorney for Solyndra
didn't return a call seeking comment.
About Solyndra LLC
Founded in 2005, Solyndra LLC 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.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Solyndra 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.
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.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser.
SOLYNDRA LLC: Hiring Former Governor Weld for Investigations
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Solyndra LLC is hiring former Massachusetts Governor
William F. Weld, now with the law firm McDermott Will & Emery, to
represent the company in government investigations and related
litigation. Mr. Weld was a two-term Republican governor. A
graduate of Harvard Law School, he also served as U.S. Attorney
for Massachusetts. Solyndra filed papers on Sept. 16 for
expedited approval of the engagement.
Mr. Rochelle relates Solyndra is setting up procedures designed to
sell the assets no later than Dec. 1. The Company requested that
the bankruptcy court in Delaware hold a Sept. 27 hearing to decide
on auction and sale procedures. If the bankruptcy judge goes
along with a timeline in papers filed Sept. 16, bids would be due
initially on Oct. 25, followed by an Oct. 28 auction and a hearing
on Nov. 2 for approval of the sale.
About Solyndra LLC
Founded in 2005, Solyndra LLC 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.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Solyndra 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.
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.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser.
American Bankruptcy Institute reports that though Solyndra Inc.
was supposed to be a marquee example of how private and public
capital could vault innovative companies to commercial success,
investors say that the $535 million government loan guarantee may
have ultimately contributed to the Company's undoing.
SOLYNDRA LLC: Taps Imperial Capital as Investment Banker
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Solyndra LLC, the solar energy developer whose
bankruptcy has the Obama administration in the political hot seat,
is proposing to hire Imperial Capital LLC as the company's
investment banker and financial adviser. The Debtor proposes to
use Los Angeles-based Imperial Capital in negotiating a sale or
financing. The firm would also put values on the Company either
in liquidation or through reorganization.
The report relates that assuming the bankruptcy judge goes along
at a Sept. 27 hearing, the firm would receive a monthly fee of
$150,000. In addition there would be $1 million paid if Solyndra
confirms a Chapter 11 plan. The fee is cut in half to $500,000 if
the plan results from liquidation. If there is a sale, Imperial
would earn a fee equal to the greater of $1 million or 2% of the
purchase price. Should Solyndra attract new debt or equity
capital, there would be a 1% fee for secured debt, 3% of
subordinated debt, and 5% of any equity investment.
About Solyndra LLC
Founded in 2005, Solyndra LLC 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.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Solyndra 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.
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.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser.
SOMERSET INTERNATIONAL Posts $245,700 Net Loss in Second Quarter
----------------------------------------------------------------
Somerset International Group, Inc., filed its quarterly report on
Form 10-Q, reporting a net loss of $245,788 on $770,073 of
revenues for the three months ended June 30, 2011, compared with
a net loss of $418,137 on $936,424 of revenues for the same period
last year.
For the six months ended June 30, 2011, the Company had a net loss
of $709,270 on $1.5 million of revenues, compared with a net loss
of $766,755 on $1.8 million of revenues for the same period of
2010.
The Company's balance sheet at June 30, 2011, showed $3.4 million
in total assets, $9.0 million in total liabilities,
all current, and a stockholders' deficit of $5.6 million.
"Currently, the Company does not have significant cash or other
material assets, nor does it have operations or a source of
revenue which is adequate to cover its administrative costs for a
period in excess of one year and allow it to continue as a going
concern," the Company said in the filing.
"Management is actively involved in exploring additional business
opportunities which they believe will allow the Company to
increase shareholder's value and allow it to continue as a going
concern. The Company will require financing to fund its current
operations and will require additional financing to acquire or
develop other business opportunities."
"These conditions raise substantial doubt about the Company's
ability to continue as a going concern."
A complete text of the Form 10-Q is available for free at:
http://is.gd/tpv8Jj
Somerset International Group, Inc., is in the business of
acquiring profitable or near term profitable private small and
medium sized businesses that provide proprietary security products
and solutions for people and enterprises -- from personal safety
to information security -- and maximizing the profitability of its
acquired entities and to act as a holding company for such
entities. The Company's executive office is located at 90
Washington Valley Road, in Bedminster, New Jersey. Customers are
located primarily in the northeastern United States.
SPORTSMAN'S WAREHOUSE: Bankr. Court Rules on McGillis Dispute
-------------------------------------------------------------
McGillis/Eckman Investments-Billings LLC to dismiss the adversary
proceeding, Sportsman's Warehouse, Inc., v. McGillis/Eckman
Investments-Billings, LLC; and McGillis/Eckman Investments-
Billings, LLC, v. Sportsman's Warehouse, Inc., Adv. Proc. No. 10-
50818, 10-52913 (Bankr. D. Del.). McGillis asserts that the Court
lacks subject matter jurisdiction over two of the six counts in
the complaint. In the alternative, McGillis requests that the
Court abstain from hearing those counts. McGillis also argues
that five of the six counts should be dismissed because they fail
to state claims upon which relief can be granted.
In a Sept. 16, 2011 Opinion, Judge Christopher Sontchi held that
it has, at minimum, related-to jurisdiction over the disputed
counts and that abstention is not appropriate in the case. The
Court also held that while Count V and a portion of Count VI of
the SWI Complaint warrant dismissal, the remaining counts do not.
Accordingly, the Court granted the motion in part and denied it in
part. A copy of the Court's decision is available at
http://is.gd/KKeJhifrom Leagle.com.
About Sportman's Warehouse
Headquartered in Midvale, Utah, Sportsman's Warehouse, Inc. --
http://www.sportsmanswarehouse.com/-- and its affiliates sell
indoors and outdoor gears and equipment. The Companies filed for
Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No.
09-10990) on March 20, 2009. Gregg M. Galardi, Esq., at Skadden,
Arps, Slate, Meagher, assisted the Companies in their
restructuring efforts. Kurtzman Carson Consultants served as the
Company's claims agent. Roberta DeAngelis, U.S. Trustee for
Region 3, appointed seven members to the official committee of
unsecured creditors of Sportsman's Warehouse Inc. Greenberg
Traurig LLP represented the Committee. The Company disclosed
assets of $436 million and debt totaling $452 million as of
December 31, 2008. The Company emerged from chapter 11 in
August 2009 under the terms of a Second Amended Plan projecting
that general unsecured claims, owed $130 million, would
recover about 15% from future cash flows.
SULPHCO INC: Files for Chapter 7 Liquidation in Texas
-----------------------------------------------------
In a regulatory filing Friday, SulphoCo, Inc., discloses that on
Sept. 16, 2011, it filed for relief under Chapter 7 of the
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of Texas. Effective as of the date of the bankruptcy
filing, the Bankruptcy Court assumed jurisdiction and control of
the Company. The Bankruptcy Court will name a receiver, trustee,
fiscal agent or similar officer at a later date. The assets of
the Company will be liquidated in accordance with federal
bankruptcy code.
On Sept. 16, 2011, and concurrent with the bankruptcy filing, the
employment of Mr. M. Clay Chambers, the Company's Chief Operating
Officer, will terminate. Following the first meeting of
creditors, the employment of Mr. Stanley W. Farmer, the Company's
President, Chief Financial Officer, Treasurer and Corporate
Secretary will terminate and the Company will no longer have any
employees.
Also, on Sept. 16, 2011. and concurrent with the bankruptcy
filing, directors Fred S. Zeidman, Robert J. Hassler, Lawrence G.
Schafran, Larry D. Ryan, Orri Hauksson and Robert van Maasdijk
resigned as members of the Company's Board of Directors. The'
Company has no current members of the Board of Directors.
A copy of the Form 8-K is available for free at:
http://is.gd/MX1F4g
About SulphCo Inc.
Houston-based SulphCo, Inc., is an energy technology company
focused on the development and commercialization of an oxidative
desulfurization ("ODS") process for crude oil products, crude
oils, natural gasoline and condensate streams. SulphCo's
oxidative desulfurization process consists of (1) the ultrasound
assisted conversion of the sulfur compounds to their oxidized
analogs employing its patented and proprietary SonocrackingT
technology, and (2) the subsequent removal of these oxidized
compounds via adsorption, extraction, water wash or other similar
separation techniques.
As reported in the TCR on Aug. 19, 2011, the Company reported a
net loss of $1.33 million on $0 revenue for the six months ended
June 30, 2011, compared with a net loss of $4.48 million on $0
revenue for the same period last year.
The Company's balance sheet at June 30, 2011, showed $1.25 million
in total assets, $1.59 million in total liabilities, and a
stockholders' deficit of $341,612.
* * *
Hein & Associates LLP, in Houston, Texas, expressed substantial
doubt about SulphCo's ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has suffered recurring losses from
operations.
SUPERIOR PLUS: DBRS Cuts Rating on Senior Secured Notes to 'BB'
---------------------------------------------------------------
DBRS has downgraded the Senior Secured Notes and Senior Unsecured
Debentures ratings of Superior Plus LP (Superior) to BB (high) and
BB (low), respectively, from BBB (low) and BB (high),
respectively, with both trends changed to Stable from Negative.
Pursuant to DBRS's leveraged finance rating methodology, recovery
ratings of RR3 and RR6, respectively, have been assigned to the
above-noted securities. The two-notch downgrade and RR6 recovery
rating on the Senior Unsecured Debentures incorporate the large
amount of Senior Secured Notes that rank in priority to the Senior
Unsecured Debentures. Finally, DBRS has assigned an Issuer Rating
of BB (high) with a Stable trend to Superior. Superior is a 99.9%
owned subsidiary of Superior Plus Corporation (the Corporation),
which converted from an income fund at year-end 2008.
The rating downgrades reflect DBRS's review of the Corporation's
Q2 2011 financial results, its 2011 public financial outlook and
its medium-term plans in the context of ongoing economic weakness
in its key North American markets. Based on its review and year-
to-date results, DBRS expects that the moderate pace of
improvement in credit metrics to date in 2011 will result in a
longer transition period to more conservative financial metrics
than previously anticipated. Consequently, DBRS no longer expects
Superior's financial profile to be consistent with an investment-
grade rating over the near to medium term in the absence of
substantial corrective measures. DBRS believes that Superior's
business risk profile remains relatively unchanged compared with
prior years, although with modestly higher exposure to seasonal
weather conditions following the 2009-2010 acquisitions noted
below. The Stable trends assigned reflect DBRS expectation of
moderate improvement in credit metrics going forward.
In its August 31, 2010, press release, DBRS stated that the rating
confirmations on that date (although the trends were changed to
Negative from Stable) reflected "DBRS's expectation of a gradual
recovery of the Corporation's credit metrics to relatively strong
2008 levels by the end of 2011 in order to maintain the current
ratings." This was supported by expected contributions from the
various acquisitions (totalling $468.4 million) completed between
late Q3 2009 and early Q1 2010 and the ramp-up of activity at the
Port Edwards chloralkali facility, which was converted to membrane
technology over a two-year period ending in Q4 2009, for a total
cost of $157.7 million. The Corporation raised significant
financing, roughly one-third each of common equity, senior debt
and convertible subordinated debentures, between year-end 2007 and
June 30, 2010. Consequently, DBRS calculated pro forma credit
metrics that included the estimated impact of these transactions
as if they occurred at the beginning of the respective periods.
On a pro forma DBRS-adjusted basis, the Corporation's total debt-
to-EBITDA ratio improved from 6.2 times at year-end 2010 to 5.5
times for the 12 months ending June 30, 2011 (12M June 2011), but
remained above the 5.3 times level in 12M June 2010 and well above
the 3.4 times level achieved at year-end 2008. Concurrently, its
pro forma DBRS-adjusted senior debt-to-EBITDA ratio (which
includes the senior secured notes, the bank facility, amounts
previously due under the off-balance sheet accounts receivable
securitization program (terminated in June 2011) and the senior
unsecured debentures) improved from 3.2 times at year-end 2010 to
2.9 times in 12M June 2011, but was only marginally stronger than
the 3.1 times level in 12M June 2010 and well above the 2.4 times
level achieved at year-end 2008. The Corporation's pro forma
DBRS-adjusted senior secured debt-to-EBITDA ratio (which excludes
the senior unsecured debentures), improved to 2.3 times in 12M
June 2011 from 2.4 times at year-end 2010 and in 12M June 2010,
but remained well above the 1.8 times level achieved at year-end
2009. Superior is required, under its credit facility, to
restrict its senior secured debt-to-EBITDA ratio to not more than
3.0 times. (Note that the convertible subordinated debentures,
upon which the Corporation may elect to pay principal upon
maturity or redemption by issuing shares to the debenture holders,
are treated as 100% debt for "total debt" ratios and are excluded
from "senior debt" ratios and financial covenant calculations.)
Finally, the pro forma DBRS-adjusted cash flow-to-total debt ratio
improved from 11% at year-end 2010 to 13% in 12M June 2011, but
was marginally weaker than the 14% level in 12M June 2010 and
remained far below the 23% level achieved at year-end 2008. The
latest ratios remain outside the acceptable range for Superior's
previous ratings.
The deterioration in the Corporation's key credit metrics between
year-end 2008 and year-end 2010 was mainly due to: (1) weaker
earnings and cash flow as a result of ongoing economic weakness
and the negative impact of warmer-than-expected weather in the
2009-2010 winter; (2) higher debt levels resulting from partial
debt financing for the various acquisitions and growth capital
expenditures noted above; and (3) lower-than-expected earnings
from the various acquisitions, largely related to the factors
cited in (1) above. Modest improvement in 12M June 2011 was
mainly due to improved results in its Energy Services segment,
lower cash dividends and improved accounts receivable collections
at its Superior Propane business unit.
The above factors also negatively affected the Corporation's DBRS-
adjusted dividend payout ratio, which rose to 123% in 2010 from
85% in 2009 and 74% in 2008, leading to a 26% dividend reduction
in Q1 2011 and a 93% ratio for 12M June 2011 (approximately 80%
pro forma). Similarly, the DBRS-adjusted total EBITDA interest
coverage ratio declined to 3.0 times in 2010 from 4.5 times in
2009 and 6.3 times in 2008 before recovering slightly to 3.1 times
in 12M June 2011. Superior restarted its dividend re-investment
program (DRIP) during Q2 2010, commencing with the payment of its
May 2010 dividend and reduced its dividend from $0.135 per share,
or $1.62 per share annualized, to $0.10 per share, or $1.20 per
share annualized, in Q1 2011.
Superior's liquidity remains reasonable, with no major maturities
until year-end 2012, when the Corporation has $175 million of
5.75% convertible subordinated debentures maturing, although it
may elect to pay principal upon maturity or redemption by issuing
shares to the holders. At June 30, 2011, Superior had credit
lines totalling $615 million ($337.4 million of borrowings and
$32.2 million of letters of credit outstanding), expandable to
$750 million, maturing on June 27, 2014.
TEXAS HILL: Sub-lessee Not Entitled to $67T Admin. Expense
----------------------------------------------------------
Chief Bankruptcy Judge James M. Marlar said Texas Hill
Enterprises, GP's misuse of the bankruptcy process, which led to
the appointment of a Chapter 11 trustee, does not per se entitle
sub-lessee Sandstone Marketing, Inc., to an administrative expense
for $67,038.
Sandstone leased land from the Debtors. On July 23, 2010,
Sandstone made its periodic lease payment to the Debtors. The
amount was $97,001.80. The Debtors did not use any of those
monies to pay the Debtors' lease payments to their landlord,
Diamond A Products. Instead, they used the money in operations;
they failed to pay Diamond A.
The Chapter 11 Trustee in the case rejected the Diamond A lease as
of Sept. 24, 2010. Diamond A then demanded that Sandstone either
vacate the premises or pay $60,000 to remain long enough to allow
Sandstone to harvest its crops. Sandstone also agreed to spend
$7,308 to restore the ground that it eventually vacated.
Sandstone maintains that the $67,308 it paid, in order to remain
on the land, which land lease the Debtor rejected, entitles it to
be an administrative expense creditor.
Judge Marlar held that the monies paid by Sandstone to Diamond A
did not benefit the estate. The estate had abandoned its interest
in the land, as of Sept. 24, 2010, when the estate walked away
from the Diamond A lease. Nothing Sandstone did, after the
rejection, benefited the estate in any way. Its actions and
payments only benefited itself. While there may be some type of
breach of contract claim available, that claim cannot qualify as
administrative in nature, the judge said.
A copy of Judge Marlar's Sept. 15, 2011 Memorandum Decision is
available at http://is.gd/00O3BCfrom Leagle.com.
About Texas Hill
Roll, Arizona-based Texas Hill Enterprises GP, dba Texas Hill
Farms, and Texas Hill Diamante Cooling LLC filed for Chapter 11
bankruptcy (Bankr. D. Ariz. Case Nos. 10-11121 and 10-11126) on
April 15, 2010. Daniel P. Collins, Esq., and Allysse M. Medina,
Esq., at Collins, May, Potenza, Baran & Gillespie, represent the
Company in its restructuring effort. Texas Hill Enterprises
disclosed $15,382,990 in assets and $14,041,190 in liabilities.
Edward Burr was appointed the Chapter 11 trustee in the Debtors'
cases on Aug. 25, 2010. Mr. Burr is represented Philip R. Rudd,
Esq., at Polsinelli Shughart PC. Sierra Consulting Group, LLC
serves as the financial advisor to the Chapter 11 trustee.
TEXTRON INC: Fitch Plans to Rate $500 Mil. Unsec. Notes at 'BB+'
----------------------------------------------------------------
Fitch Ratings expects to assign a rating of 'BB+' to Textron
Inc.'s (TXT) planned issuance of approximately $500 million of
five- and 10-year senior unsecured notes. Proceeds will be used
to tender for part of the outstanding $600 million 4.5%
convertible notes, together with any option value related to the
convertible notes. The Rating Outlook is Positive.
Depending on the amount of convertible notes tendered, Textron's
total debt and leverage could increase by a modest amount, but
TXT's credit metrics would still be within a range anticipated by
Fitch. The modification to TXT's debt structure would also
stretch out scheduled maturities and provide additional financial
flexibility. At July 2, 2011, gross debt/EBITDA at TXT's
manufacturing business was 2.46 times (x), roughly flat compared
to the end of 2010 and below the level of 4.0x at the end of 2009,
partly reflecting substantial debt reduction by TXT during 2010.
Fitch estimates that leverage could increase to around 2.6x-2.7x
upon completion of TXT's new debt issuance and tender offer. The
Positive Outlook reflects Fitch's expectation that free cash flow
will be sufficient to control and potentially reduce debt and
leverage in the near to medium term.
TXT's ratings are supported by steady performance at its defense-
related businesses, ongoing liquidation of the TFC portfolio, and
steady but still-weak demand in Cessna's business jet market. An
eventual recovery in Cessna's business jet market, along with
further operating improvements in the business, can be expected to
support future results although the improvement may be slow. The
Outlook also incorporates Fitch's expectation that support
required by TFC will diminish as TFC continues to liquidate its
non-captive portfolio. TFC's ratings reflect the overall adequacy
of TFC's portfolio assets to support repayment of TFC's debt and
maintain sufficient liquidity, as well as declining losses as
TFC's portfolio is reduced.
TFC's ratings are linked to TXT's ratings through a support
agreement and other factors. The support agreement requires TXT
to maintain full ownership, minimum net worth of $200 million and
fixed charge coverage of 1.25x. Other factors supporting the
rating linkage include a shared corporate identity, common
management, including the integration of TFC's treasury and
certain other functions, and the extension of intercompany loans
to TFC.
Fitch views TXT's financial profile, including the planned
restructuring of TFC, as consistent with a low investment grade
rating. Fitch believes TXT has the capacity to support TFC's
efforts to liquidate the non-captive assets at anticipated loss
rates and re-balance TFC's operations and capital structure.
However, if cash generated from the liquidation of TFC's non-
captive portfolio is less than expected due to higher credit
losses or discounting, the impact on TXT's liquidity could be
material and limit TXT's ability to invest in its manufacturing
business. This would likely alter current positive rating
momentum.
Other rating concerns include the marginal credit quality of TFC's
remaining non-captive portfolio, particularly the timeshare and
golf mortgage assets, which represent the largest components of
the remaining non-captive exposure. The liquidation of these
assets is proceeding as expected, but a significant deterioration
in asset quality could impair TFC's ability to generate expected
proceeds from the liquidation of timeshare and golf mortgage
assets. TXT-related rating concerns reflect low unit deliveries
and margins at Cessna, pension contributions, and U.S. defense
spending after fiscal 2012.
TXT's support for TFC is expected to include both capital
contributions and intercompany loans to TFC. TFC's ongoing losses
require TXT to contribute capital under a support agreement, but
TFC's liquidity was sufficient in 2010 to pay dividends to TXT
well in excess of capital contributions. Future capital
contributions, net of dividends, may be nominal given TFC's
estimate that the liquidation of its non-captive portfolio can be
completed within existing capital levels. TFC currently expects
to report losses through 2012 but at declining levels. It expects
the captive business to reach break-even by the end of 2011.
Fitch believes TXT has sufficient liquidity to support TFC at
modest levels based on TXT's cash balances and free cash flow. At
July 2, 2011 consolidated cash totaled $651 million including $610
million at the manufacturing businesses. TXT's manufacturing free
cash flow after pension contributions and dividends in 2010 was
$429 million and could increase in 2011. TXT expects to
contribute $250 million to its pension plans in 2011, including
approximately $150 million of voluntary contributions. It
contributed $189 million in the second quarter. Contributions in
subsequent years could be significant depending on market
conditions.
Covenant compliance under TXT's and TFC's bank facilities is less
of a concern than in the past. TXT repaid its bank facility in
2010 and put a new $1 billion revolver in place during the first
quarter of 2011. Debt maturities at TXT are modest through 2012,
at less than $200 million. Approximately $900 million is due in
2013, including $600 million face amount of convertible debt that
TXT plans to reduce through the tender offer mentioned above.
TFC's debt declined by $2 billion in 2010 and $1.2 billion during
the first half of 2011, including a $690 million paydown of the
bank facility. The balance on the facility at July 2, 2011 was
$500 million which TFC plans to repay before maturity in 2012.
Some of TFC's debt reduction was supported by loans from TXT which
totaled $722 million outstanding at July 2, 2011.
Overall performance at TXT's manufacturing businesses is supported
by defense business in the Bell and Systems segments and by the
segments' substantial installed base which generates service
revenue. Helicopters and unmanned aerial vehicles are well
supported in the U.S. defense budget although they could be
subject to pressure on the defense budget and to margin pressure.
Cessna represents near-term operating concerns due to low volumes,
especially at the light end of the business jet market. Low
productivity associated with volumes is contributing to low
margins. During 2011, dollar sales could increase at a higher
pace than deliveries which are currently expected to improve
slightly during the year. The relative performance in units and
dollars reflects a mix shift toward larger aircraft. However,
margins at Cessna likely will remain low despite previous
restructuring until the recovery strengthens, which may not occur
before 2012. Ongoing industry concerns include the availability
of financing and competitive pressure as the business jet market
becomes more global, partly offset by positive signs of increased
aircraft utilization. In the Industrial segment, sales volumes
are generally stable as demand for automotive fuel systems at
Kautex and demand for tools and other equipment at Greenlee
mitigate weak conditions in the segment's construction and golf
markets.
Fitch's current ratings for TXT and TFC are as follows:
TXT
-- Issuer Default Rating (IDR) 'BB+';
-- Senior unsecured bank facilities 'BB+';
-- Senior unsecured debt 'BB+';
-- Short-term IDR 'B';
-- Commercial paper 'B'.
TFC
-- IDR 'BB+';
-- Senior unsecured bank facilities 'BB+';
-- Senior unsecured debt 'BB+';
-- Junior subordinated notes 'B+'.
Approximately $5.1 billion of debt outstanding at July 2, 2011 is
affected by the ratings, including $2.6 billion at TXT and $2.5
billion at TFC. Fitch includes in debt the full $600 million of
TXT's 4.5% convertible notes, rather than the discounted amount as
reported.
THE X-CHANGE CORPORATION: Posts $64,100 Net Loss in Second Quarter
------------------------------------------------------------------
The X-Change Corporation filed its quarterly report on Form 10-Q,
reporting a net loss of $64,115 for the three months ended
June 30, 2011, compared with a net loss of $99,010 for the same
period last year.
For the six months ended June 30, 2011, the Company had a net loss
of $179,360, compared with a net loss of $228,107 for the same
period of 2010.
The Company had no revenue for either of the six or three month
periods ended June 30, 2011 and 2010, respectively.
The Company's balance sheet at June 30, 2011, showed $1,750,000
million in total assets, $1,294,495 in total liabilities, and
stockholders' equity of $455,505.
S. W. Hatfield, CPA, in Dallas, Texas, expresses substantial doubt
about The X-Change Corporation's ability continue as a going
concern following the Company's 2010 results. The independent
auditors noted that the Company has no operations or significant
assets and is dependent upon significant stockholders to provide
sufficient working capital to maintain the integrity of the
corporate entity.
A complete text of the Form 10-Q is available at:
http://is.gd/44JgS8
Dallas, Texas-based The X-Change Corporation was incorporated
under the laws of the State of Delaware on Feb. 5, 1969.,and
changed its corporate domicile to the State of Nevada on Oct. 4,
2000.
The Company's business plan is to seek an acquisition or merger
with a private operating company which offers an opportunity for
growth and possible appreciation of its stockholders' investment
in the then issued and outstanding common stock.
THUNDERBIRD SEDONA: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Thunderbird Sedona, LLC
4585 Dean Martin Drive, #201
Las Vegas, NV 89103
Bankruptcy Case No.: 11-24656
Chapter 11 Petition Date: September 16, 2011
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: Robert Atkinson, Esq.
KUPPERLIN LAW GROUP, LLC
10120 S. Eastern Avenue, Suite 202
Henderson, NV 89052
Tel: (702) 614 0600
Fax: (702) 614 0647
E-mail: robert@kupperlin.com
Scheduled Assets: $972,207
Scheduled Debts: $3,637,529
A list of the Company's 10 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/nvb11-24656.pdf
The petition was signed by Wilburn Poole, principal.
THINK3 INC: Judge OKs Settlement With Versata
---------------------------------------------
A federal bankruptcy judge has approved an agreement between
think3 Inc. and Versata FZ-LLC that settles the rights and
ownership interests of Versata and other matters at issue in
think3's Chapter 11 bankruptcy case.
Judge H. Christopher Mott of the United States Bankruptcy Court
for the Western District of Texas, Austin Division, approved the
settlement in the case (No. 11-11252) on Sept. 12.
The dispute arose when think3, an Austin-based global leader in
the computer-aided design and product lifecycle management
software (PLM) market, was put into an involuntary bankruptcy
proceeding in Bologna, Italy. The trustee appointed in the
Italian proceeding purported to terminate a license agreement
between think3 and Versata and took other actions against Versata.
Versata is a Dubai-based U.A.E. company. The Italian trustee's
actions resulted in Versata suing think3 in federal district court
in Austin and prompted the Chapter 11 filing.
Following a two-day hearing, Judge Mott ruled that the license
agreement between think3 and Versata had been negotiated in good
faith and at arms length. He also found that full consideration
had been paid to think3 by Versata and that the resulting
exclusive license constituted a full sale of think3's intellectual
property rights to Versata (except for the rights to the China
market). The Judge further noted that think3's chief
restructuring officer made reasonable but unsuccessful efforts to
cooperate with the Italian trustee, including through US court-
ordered mediation in late August.
Settlement terms provide a number of benefits to the think3
Chapter 11 estate, including a cash settlement in the amount of
$250,000, a license to use and sub-license certain TD PLM software
worldwide without the risk of patent infringement liability, the
ability for think3 to exploit its China market opportunities using
Versata's IP, service capabilities, and research and development
without cost to the Chapter 11 estate and without risk of patent
infringement liability, and an increase in the commitment for
debtor-in-possession financing to $2.3M with an option for think3
to deem its obligations satisfied in full if it terminates the TD
PLM license. The settlement also empowers think3 to propose a
plan of reorganization and enables the two companies to
collaborate in serving customers of think3 products.
In addition, Judge Mott denied a petition filed by the Italian
trustee that sought recognition of the Italian bankruptcy
proceeding under Chapter 15 of the U.S. Bankruptcy Code. The
Judge affirmed that think3's chief restructuring officer, Rebecca
A. Roof, has full authority to administer the assets and affairs
of the company.
About think3
Think3 Inc. develops computer-aided design software. Think3 has
been a debtor in corporate reorganization proceedings under the
laws of Italy pending before the Court of Bologna since March 14,
2011. Dr. Andrea Ferri was appointed to act as trustee in the
Italian Proceedings.
Think3 sought Chapter 11 protection (Bankr. W.D. Tex. Case No.
11-11252) on May 18, 2011, in Austin, its hometown, three months
after creditors filed an involuntary bankruptcy petition against
the company in a court in Bologna, Italy. The company didn't
oppose the involuntary bankruptcy. Rebecca Roof was appointed as
chief restructuring officer.
The Italian trustee filed a Chapter 15 petition (Bankr. W.D. Tex.
Case No. 11-11925) for Think3 in bankruptcy court in Austin on
Aug. 1, claiming she has the right to control the company's
restructuring through the Italian court.
Since the Italian bankruptcy was filed, there have been
continuing disputes over the right to control the company's
assets. ESW Capital LLC acquired Think3 in September. The
primary debt is a US$23 million tax liability in Italy.
The Italian Trustee is represented by Duane Morris LLP.
The Debtor disclosed US$0 in assets and US$45,447,716 in
liabilities as of the Chapter 11 filing.
Versata FZ-LLC, Versata Development Group, Inc., Versata
Software, Inc., ESW Capital, LLC, the parent of Think3, and
Gensym Cayman L.P., the DIP Lender, are represented by Fulbright
& Jaworski L.L.P., and Morrison & Foerster LLP.
TITAN ENERGY: Inks Separation Pact with COO Thomas Black
--------------------------------------------------------
Titan Energy Worldwide, Inc., on Sept. 15, 2011, entered into a
Separation Agreement with Thomas Black pursuant to which Mr. Black
resigned from his positions as Chief Operating Officer and
Director of the Company effective on Sept. 9, 2011.
Pursuant to the Separation Agreement, Mr. Black will receive a
severance payment in the aggregate sum of $17,250, payable in two
bi-weekly installments in the amount of $8,625 each, subject to
normal withholding tax and deductions. Mr. Black will also
receive payment for accrued but unpaid salary in the amount of
$60,000, payable in 12 equal monthly installments commencing two
weeks after the full settlement of the severance payment;
Mr. Black also agreed to waive all unused but accrued vacation
time in consideration for payment in the amount of $24,750,
payable in three bi-weekly installments in the amount of $8,250
each, subject to normal withholdings and deductions. Such sum is
payable after the payment of the accrued salary as set forth
above. In addition, the Company agreed to extend the term of
stock options granted to Mr. Black for a period of one year from
the expiry thereof, during which Extension Period, Mr. Black may
exercise those options at a price of $0.25 per share in the event
that during that Extension Period, the Company's common stock
shall close at a price of $0.25 per share or greater.
The Separation Agreement further contains a non-solicitation
provision wherein for a period of 12 months from the effective
date thereof, Mr. Black agreed that he will not solicit any of the
Company's existing customers for equipment sales and/or service
business. The Separation Agreement also contains a
confidentiality provision pursuant to which Mr. Black has agreed
to preserve all confidential and proprietary information relating
to the Company's business for a period of two years from the date
of the Separation Agreement.
About Titan Energy
New Hudson, Mich.-based Titan Energy Worldwide, Inc., is a
provider of onsite power generation, energy management and energy
efficiency products and services.
The Company's balance sheet at June 30, 2011, showed $5.83 million
in total assets, $7.14 million in total liabilities and a $1.31
million total stockholders' deficit.
As reported in the TCR on April 12, 2011, UHY LLP, in Southfield,
Mich., expressed substantial doubt about Titan Energy Worldwide's
ability to continue as a going concern, following the Company's
2010 results. The independent auditors noted that of the
Company's recurring losses and accumulated deficit.
TOOUCHIT TECHNOLOGIES: Posts $605,700 Net Loss in First Half
------------------------------------------------------------
TouchIT Technologies, Inc., reported a net loss of $605,745 on
$914,867 of sales for the six months ended June 30, 2011, compared
with net income of $271,788 on $2.2 million of revenue for the
same period last year.
The financial condition and results of operations of the Company
are based on the financial statements of both TouchIT Tech KS and
TouchIT Ed.
The Company's balance sheet showed $1.4 million in total assets,
$2.0 million in total liabilities, and a stockholders' deficit of
$621,460.
The Company has suffered recurring losses from operations and has
a stockholders' deficit of $621,460. The Company believes these
factors raise substantial doubt about TouchIT Tech KS and TouhIT
Ed's ability to continue as a going concern.
A complete text of the Form 10-Q is available for free at:
http://is.gd/0vdSH4
Istanbul, Turkey-based TouchIT Technologies, Inc., manufactures
touch-based visual communication products for the education and
corporate worldwide marketplaces.
TouchIT Technologies, Inc., was incorporated in the State of
Nevada as "Hotel Management Systems, Inc." On May 7, 2010, the
Company entered into a share exchange agreement, with TouchIT
Technologies Koll Sti ("TouchIT Tech KS"), TouchIT Education Koll
Sti ("TouchIT Ed"), and the stockholders of TouchIT Tech KS and
Touch Ed.
Both TouchIT Tech KS and TouchIT Ed are corporations formed under
the laws of Turkey and are based in Istanbul, Turkey. The closing
of the transaction took place on May 7, 2010. Subsequently, the
Company amended its Articles of Incorporation to change its name
to TouchIT Technologies, Inc.
TRIMEDYNE INC: Posts $429,000 Net Loss in June 30 Quarter
---------------------------------------------------------
Trimedyne, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $429,000 on $1.41 million of revenues for
the three months ended June 30, 2011, compared with a net loss of
$62,000 on $1.52 million of revenues for the same period last
year.
For the nine months ended June 30,2011, the Company had a net loss
of $797,000 on $4.92 million of revenues, compared with a net loss
of $669,000 on $4.90 million of revenue for the same period of
2010.
The Company's balance sheet at June 30, 2011, showed $6.48 million
in total assets, $1.34 million in total liabilities, and
stockholders' equity of $5.14 million.
"The Company's working capital has declined and we have incurred
losses from from operations during the past four years," the
Company said in the filing. "There can be no assurance that the
Company will be able to maintain or achieve sales growth to offset
these losses, or that the Company will again become profitable."
"Based on its current cash flow projections, the Company expects
its existing resources will be sufficient to fund operations
through March 31, 2012."
"However, management is unsure if the Company's liquidity and
anticipated revenues will be sufficient to meet its obligations as
they become due for the next 12 months from the balance sheet
date. This raises substantial doubt about the Company's ability
to continue as a going concern."
A complete text of the Form 10-Q is available for free at:
http://is.gd/T0TcOV
Lake Forest, Calif.-based Trimedyne, Inc., is engaged in the
development, manufacturing and marketing of 80 and 30 watt Holmium
"cold" pulsed lasers ("Lasers") and a variety of disposable and
reusable, fiber optic laser energy delivery devices ("Fibers",
"Needles" and "Tips") for use in a broad array of medical
applications.
TROPICANA ENT: Delaware Court Approves Trademark Settlement
-----------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized the Tropicana OpCo and LandCo
Debtors as well as certain related parties to enter into the
agreement resolving ownership and use issues of the "TROPICANA"
and "TROP" trademarks.
The Court approved the parties' trademark settlement agreement in
its entirety in an order dated Sept. 13, 2011.
The Settlement resolves numerous pending matters among the parties
before the Bankruptcy Court and the U.S. District Court for the
District of Nevada. It essentially provides for the mutual
release of all claims related to the trademarks. The OpCo Parties
and the LandCo Parties will have the right to use the trademarks
in their own territory without any payment.
A full-text copy of the Settlement Agreement is available at no
charge at:
http://bankrupt.com/misc/Tropi_TrademarkSettlement080911.pdf
All objections to the Settlement not otherwise withdrawn, waived
or resolved are overruled on the merits, Judge Carey ruled.
Kirkland & Ellis' Concern
Before the entry of Judge Carey's ruling, Kirkland & Ellis LLP
made known to the Bankruptcy Court its concern of how the
Trademark Settlement and order will affect its pending fee
applications. The firm specifically sought protection of its
rights.
K&E, as bankruptcy counsel to the Tropicana Debtors, has no direct
interest in the Settlement; but it expressed concern that the
LandCo Debtors might use the terms of the settlement to impair or
prejudice its claim for allowance of fees and expenses against the
LandCo estates. K&E thus asked the Bankruptcy Court to include
certain language ensuring that the Settlement cannot be used to
prejudice its rights.
In response, the LandCo Debtors asserted that K&E's request is
baseless.
Counsel to the LandCo Debtors, Garvan F. McDaniel, Esq., at
Bifferato Gentilotti LLC, in Wilmington, Delaware, clarified that
the LandCo Parties objected to K&E's fees in part because at the
time the firm represented both the LandCo and the OpCo Debtors,
the firm "abdicated" its duties to the LandCo Debtors by
"vigorously and openly advocating for the interests of its OpCo
debtor clients -- and against the interests of its LandCo Debtor
clients -- in connection with the trademark matters."
The LandCo Debtors want to be assured that they are not prohibited
from referencing or otherwise confirming, among other things, the
existence of the Trademark Settlement in prosecuting their
objection to K&E's final fee applications.
For their part, the OpCo Parties said they consent to the
inclusion of K&E's proposed language in the order as well as
language that the LandCo Parties. The OpCo Parties added that
they find K&E's requested language unnecessary as the Settlement
does not concern bankruptcy professionals' fees and expenses and
is "purely on a compromise of disputed claims basis."
Court Includes Requested Language
Shortly before the Sept. 13 hearing, the Bankruptcy Court noted
that an agreed form of order resolving all pending objections with
respect to the Trademark Settlement Motion was filed.
A notice dated Sept. 12, 2011, filed with the Court reflected that
K&E withdrew its limited objection to the Trademark Settlement
Motion.
Accordingly, Judge Carey's Sept. 13 order makes clear that nothing
in his Order or the Trademark Settlement prejudices or otherwise
adversely impacts the rights of K&E in connection with its pending
Final Fee Applications, provided that in connection with the
pending objections to the Final Fee Applications and any related
matters, the LandCo Parties will not be prohibited from
referencing that the dispute between the Parties regarding their
rights to ownership and use of the TROPICANA and TROP trademarks
and other related matters were compromised by the Parties pursuant
to the terms and conditions of the Trademark Settlement.
The Bankruptcy Court further finds that the publication notice of
the Trademark Settlement Motion constitutes due, proper, and
sufficient notice on any and all parties-in-interest to the
Motion. The advertising clerk of The Wall Street Journal
submitted an affidavit attesting that the settlement notice was
published in The Wall Street Journal for national distribution for
the date Aug. 17, 2011.
About Tropicana Entertainment
Tropicana Entertainment Inc. is a publicly reporting company that,
along with its affiliates, owns or operates nine casinos and
resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey.
The Company owns approximately 6,000 rooms, 9,000 slot positions
and 250 table games. In addition, the Company owns a development
property in Aruba. The company is based in Las Vegas, Nevada.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Tropicana Entertainment Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TROPICANA ENT: LandCo Debtors Proposes Unresolved Claims Reserve
----------------------------------------------------------------
Tropicana Las Vegas Holdings, LLC, and its debtor affiliates,
otherwise referred to as the LandCo Debtors, ask the Honorable
Kevin J. Carey to:
(i) approve a proposed LandCo claims reserve procedure,
including the amount of LandCo claims reserve; and
(ii) allow interim distributions to Allowed Class 4 LandCo
General Unsecured Claims based on the LandCo Claims
Reserve Procedure and the LandCo Claims Reserve.
Gen. Unsecured Claims Distributions
under LandCo Plan
The Liquidating LandCo Debtors' confirmed Chapter 11 Plan provides
for Class 4 Allowed LandCo General Unsecured Claims and Class 6
Allowed Insider Claims to receive, among other things, a pro rata
share of the "Settlement Payment," which is defined to be "a
payment in Cash in an amount equal to the lesser of: (a) 25% of
the aggregate amount of each of Allowed Class 4 Claims and Allowed
Class 6 Claims; and (b) $400,000 in the aggregate."
The total amount of Allowed LandCo General Unsecured Claims
currently exceeds $3,800,000, and so the Settlement Payment amount
is $400,000, according to M. Blake Cleary, Esq., at Young Conaway
Stargatt & Taylor, LLP, in Wilmington, Delaware.
Mr. Cleary elaborates that as of the LandCo Plan Effective Date, a
number of large disputed Class 4 Claims were outstanding and
unresolved and so, it was not practicable to make an interim
distribution to holders of Class 4 Claims as it would have been
necessary to reserve all of the $400,000 to account for the
unresolved claims.
The LandCo Debtors relate that since the Effective Date, they have
worked diligently to reconcile and resolve the disputed general
unsecured claims and thus, there remains four categories of
unresolved Class 4 and Class 6 Claims:
(1) Claims asserted by Tropicana Atlantic City Corp.
(2) Insider Claims asserted by William J. Yung, III, and other
Yung Entities
(3) Contingent and unliquidated indemnification claims of
former directors and officers of the LandCo Debtors other
than the William Yung Claims
(4) A claim asserted by the IUPAT Industry Pension Fund for
contingent statutory withdrawal liability
As a result, Mr. Cleary reveals, the LandCo Debtors (1) have
resolved the Tropicana Atlantic City Claims, including reaching a
settlement to resolve trademark issues and other matters; (2) have
concurrently filed an objection seeking to disallow the D&O
Claims; and (3) have reached a tentative agreement that will
result in the withdrawal of the IUPAT Claim. Assuming the
Trademark Settlement Motion and the D&O Claim Objection are
approved, and the IUPAT Claim Settlement is executed, only the
Yung Claims will remain unresolved, he points out.
The Yung Claims are the subject of pending objections, including
objections based on potential rights of setoff on account of
liability that may be established in the adversary proceeding
captioned Lightsway Litigation Services, LLC, as trustee of
Tropicana Litigation Trust v. William J. Yung III, et al., Adv.
Proc. No. 10-50289 (KJC).
Given the pendency of the Litigation Trust Proceeding, it is
likely that the Yung Claims will remain unresolved for a
substantial period of time, Mr. Cleary says. However, given the
LandCo Debtors' progress in resolving all other unresolved
unsecured claims, they believe that it is appropriate and
reasonably practicable at this time to make a partial distribution
of the Settlement Payment to Holders of Allowed LandCo General
Unsecured Claims, provided that appropriate reserves can be
established for the Yung Claims.
LandCo Claims Reserve Process
The LandCo Debtors propose to reserve $100,000 for the Yung Claims
solely for purposes of the initial distribution of the Settlement
Payment to Holders of Allowed Class 4 and Class 6 Claims under the
LandCo Plan and to facilitate the initial distribution.
The Proposed Reserve Amount is solely based on the outcome of
settlement discussions between counsel to the LandCo Debtors and
counsel to the holders of the Yung Claims to facilitate the
initial distribution, according to Mr. Cleary. The potential
allowed amounts of the Yung Claims have yet to be determined.
The Proposed Reserve Amount for the Yung Claims is without
prejudice to the holders of the Yung Claims to seek allowance of
the claims in the future and is without prejudice to the holders
of the Yung Claims receiving a pro rata share of subsequent
distributions in amounts higher than agreed to, Mr. Cleary
clarifies.
To the extent any Yung Claim becomes an Allowed Insider Claim, in
accordance with the LandCo Plan, the Distribution Agent will
distribute the respective pro rata share of the Settlement Payment
to the Holder of the Allowed Insider Claim, and the reserve of the
Settlement Payment will be adjusted appropriately.
To the extent any Yung Claim is disallowed, the amount of the
Settlement Payment reserved on account of the claim will be
distributed to Holders of Allowed LandCo General Unsecured Claims
in accordance with the LandCo Plan, and the reserve of the
Settlement Payment will be adjusted appropriately.
This will enable an interim distribution of approximately $300,000
of the $400,000 Settlement Payment to Holders of Allowed LandCo
General Unsecured Claims, or approximately 7.9 cents on the dollar
of the Allowed amounts of these claims, Mr. Cleary tells the
Court.
Written responses or objections to the motion must be received on
or before September 20, 2011, at 4:00 p.m., Eastern Time.
If responses or objections are timely filed, a hearing will be
held on September 27, 2011, at 1:00 p.m.
About Tropicana Entertainment
Tropicana Entertainment Inc. is a publicly reporting company that,
along with its affiliates, owns or operates nine casinos and
resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey.
The Company owns approximately 6,000 rooms, 9,000 slot positions
and 250 table games. In addition, the Company owns a development
property in Aruba. The company is based in Las Vegas, Nevada.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Tropicana Entertainment Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TROPICANA ENT: W. Yung Insists on Dismissal of Lightsway Suit
-------------------------------------------------------------
Defendants William J. Yung, III, Wimar Tahoe Corporation f/k/a
Tropicana Casino & Resorts, Inc., and Columbia Sussex Corporation
maintain that the amended complaint of Lightsway Litigation
Services, LLC, as trustee of the Tropicana Litigation Trust, must
be dismissed in its entirety and that Lightsway must not be
permitted any further attempts to adequately plead a claim.
Representing the Defendants, Sandra G.M. Selzer, Esq., at
Greenberg Traurig, LLP, in Wilmington, Delaware, states that:
* Lightsway's Memorandum of Law in Opposition to Defendants'
Motion to Dismiss the First Amended Complaint merely
restates the deficient pleadings of the First Amended
Complaint, thereby affirming the infirmities that it
attempts to defend;
* As part of its "futile" attempt to save the Amended
Complaint, Lightsway's Memorandum in Opposition
mischaracterizes the legal principles governing the
dispositive issues raised in the Defendants' Opening and
does not set forth any cognizable basis for denying the
Defendants' "well-supported" Motion to Dismiss; and
* Despite its "bald" representations to the contrary,
Lightsway has not complied with the Court's clear
directives regarding the matters that were required to be
set forth in the Amended Complaint.
With respect to Lightsway's claim for breach of fiduciary duty,
Ms. Selzer argues that the Plaintiff still has presented no basis
to overcome the preclusion of its fiduciary duty claim as a matter
of law. She says that Lightsway "does not understand [the]
Defendants' arguments regarding the pleading deficiencies in the
Amended Complaint" relating to the establishment of a cause of
action for breach of fiduciary duty.
The Defendants do not submit that Lightsway's inadequate pleadings
prevented them from filing an answer, nor are they requesting that
the Plaintiff file a more definite statement of its claims.
Rather, the Defendants contend that Lightsway's failure to plead
essential facts regarding where and when the purported fiduciary
duty either arose or was breached prevents them from determining
which controlling principles of state law should be applied,
thereby preventing a statute of limitations analysis and argument
that could form the basis for immediate dismissal, Ms. Selzer
tells the Court. Similarly, the insufficiencies of Lightsway's
pleadings prohibit an analysis of other applicable dispositive
defenses, which could form other basis for dismissing the
Plaintiff's claims, she adds.
With regards to Lightsway's claim for aiding and abetting, Ms.
Selzer argues that the Plaintiff has not alleged that anyone other
than Mr. Yung, whether individually or through the corporations
that he allegedly "entirely directed," had any involvement with
the supposed breach of fiduciary duty. She asserts that Lightsway
has failed to meet the essential element requiring the involvement
of at least two separate parties in order to state a claim for
abetting and aiding.
On Lightsway's breach of contract claim and Lightsway's argument
that it was unnecessary for it to attach all of the controlling
Service Agreements underlying its claim "because the Agreements
contain identical provisions," Ms. Selzer points out that
Lightsway does not allege anywhere in the Amended Complaint that
all of the Service Agreements are identical. Even if the Service
Agreements were identical, Lightsway still has not alleged the
provisions that were allegedly breached, she notes.
In connection with Lightsway's claim for breach of the implied
covenant of fair dealing, Ms. Selzer states that "despite [the]
Plaintiff's convolute contentions to the contrary, this claim is
duplicative of Plaintiff's breach of contract claim."
Other than accusing the Defendants of ignoring its so-called
"detailed factual allegations," Lightsway still does not identify
the factual underpinnings of its equitable subordination claim,
Ms. Selzer asserts. Lightsway also presents no legitimate basis
to overcome the well-established principle set forth in Section
510(c) of the Bankruptcy Code that only an allowed claim can be
subject to equitable subordination. Lightsway fails to identify
any claim in the Amended Complaint that would be subject to
equitable subordination, she asserts.
Briefing Completed, Defendants Seek Oral Argument
On Sept. 14, 2011, in accordance with the Court's procedures,
pursuant to Bankruptcy Court Local Rule 7007-4, Defendants William
J. Yung, III, Wimar Tahoe Corporation, f/k/a Tropicana Casinos and
Resorts, Inc., and Columbia Sussex Corporation provided
notification that the briefing in the Adversary Proceeding has
been completed.
In addition, pursuant to Bankruptcy Court Local Rule 7007-3, the
Defendants request for oral argument, to be held at the Court's
convenience.
About Tropicana Entertainment
Tropicana Entertainment Inc. is a publicly reporting company that,
along with its affiliates, owns or operates nine casinos and
resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey.
The Company owns approximately 6,000 rooms, 9,000 slot positions
and 250 table games. In addition, the Company owns a development
property in Aruba. The company is based in Las Vegas, Nevada.
Tropicana Entertainment LLC and certain affiliates filed for
Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-
10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. Their financial advisor is Lazard Ltd.
Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors'
Web site administration agent. AlixPartners LLP is the Debtors'
restructuring advisor. Stroock & Stroock & Lavan LLP and Morris
Nichols Arsht & Tunnell LLP represent the Official Committee of
Unsecured Creditors in this case. Capstone Advisory Group LLC is
financial advisor to the Creditors' Committee.
The OpCo Debtors, a group of Tropicana entities owning casinos and
resorts in Atlantic City, New Jersey and Evansville, Indiana
obtained confirmation from the Bankruptcy Court of a
reorganization plan. On April 29, 2009, non-debtor units of the
OpCo Debtors, designated as the New Jersey Debtors -- Adamar of
New Jersey, Inc., and its affiliate, Manchester Mall, Inc. --
filed for Chapter 11 (Bankr. D. N.J. Lead Case No. 09- 20711) to
effectuate a sale of the Atlantic City Resort and Casino to a
group of Investors-led by Carl Icahn. Judge Judith H. Wizmur
presides over the cases. Manchester Mall is a wholly owned
subsidiary of Adamar that owns and operates certain real property
utilized in the New Jersey Debtors' business operations.
Effective March 8, Tropicana Entertainment successfully emerged
from the Chapter 11 reorganization process as an Carl Icahn-owned
entity.
A group of Tropicana entities, known as the LandCo Debtors, which
own Tropicana casino property in Las Vegas, have obtained approval
of a separate Chapter 11 plan.
Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz,
Meisel, Forman & Leonard, in Hackensack, New Jersey, represented
the New Jersey Debtors. Kurtzman Carson Consultants LLC acts as
their claims and notice agent. Adamar disclosed $500 million to
$1 billion both in total assets and debts in its petition.
Manchester Mall disclosed $1 million to $10 million in total
assets, and less than $50,000 in total debts in its petition.
Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have
merged into Adamar of NJ In Liquidation, LLC. The merger and name
change is in accordance with an Amended and Restated Purchase
Agreement, which governs the sale and transfer of the operations
of the Tropicana Casino and Resort - Atlantic City, including
substantially all of the New Jersey Debtors' assets, to Tropicana
Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana
AC Sub Corp., free and clear of any and all liens, claims and
encumbrances.
Bankruptcy Creditors' Service, Inc., publishes Tropicana
Bankruptcy News. The newsletter tracks the Chapter 11 proceedings
of Tropicana Entertainment Inc. and its debtor-affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
UNIQUE SEARCH: Case Summary & 13 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Unique Search, Inc.
P.O. Box 6303
Santa Rosa Unit
Bayamon, PR 00960
Bankruptcy Case No.: 11-07916
Chapter 11 Petition Date: September 16, 2011
Court: United States Bankruptcy Court
District of Puerto Rico (Old San Juan)
Debtor's Counsel: Teresa M. Lube Capo, Esq.
LUBE & SOTO LAW OFFICES PSC
1130 Ave FD Roosevelt
San Juan, PR 00920-2906
Tel: (787) 722-0909
Fax: (787) 977-1709
E-mail: lubeysoto@gmail.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 13 largest unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/prb11-07916.pdf
The petition was signed by John Bruno Pereira, president.
US COAL: S&P Withdraws 'B+' Rating on $105-Mil. Sr. Term Loan
-------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its preliminary 'B+'
issue-level rating on Lexington, Ky.-based U.S. Coal Corp.'s
proposed $105 million senior secured term loan at the company's
request. The company indicted that it was unable to complete the
deal because of the current volatility in the capital markets.
US FIDELIS: Mepco Immediately Moves to Dismiss Complaint
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the creditors' committee for US Fidelis Inc. filed a
lawsuit on Sept. 6 to subordinate the $57 million secured claim
filed by Mepco Finance Corp. Less than a week later, Mepco shot
back a motion to dismiss the entire lawsuit. Mepco says there
can't be a lawsuit because the bankruptcy court decreed in
approving financing that the secured debt was inviolable. A
hearing on the motion to dismiss is set for Oct. 5.
According to the report, Mepco also contends that the committee
doesn't have the right to subordinate Mepco's claim. The lender
theorizes that the subordination claim belongs to individual
creditors. Because the committee itself isn't a creditor, it
can't sue, the theory goes. On the offensive, Mepco contends in a
court filing that the lawsuit, unless dismissed, will wreck a
settlement with states' attorneys general where a consumer trust
will be set up. It also says the allegations in the complaint are
"baseless and absurd."
Mepco provided the $6 million in financing for the Chapter 11
case. Fidelis, which had been a marketer of automobile service
contracts, received most of the financing for the business from
Mepco.
About US Fidelis
Wentzville, Missouri-based US Fidelis, Inc., was a marketer of
vehicle service contracts developed by independent and unrelated
companies. It stopped writing new business in December 2009.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
E.D. Mo. Case No. 10-41902) on March 1, 2010. Brian T. Fenimore,
Esq., and Crystanna V. Cox, Esq., at Lathrop & Gage L.C., in
Kansas City, Mo.; and Robert E. Eggmann, Esq., and Thomas H.
Riske, Esq., at Lathrop & Gage, in Clayton, Mo., assist the Debtor
in its restructuring effort. According to the schedules, the
Company had assets of $74,386,836, and total debts of $25,770,655
as of the petition date.
Allison E. Graves, Esq., and Brian Wade Hockett, Esq., at Thompson
Coburn LLP, in St. Louis, Mo., represent the Official Unsecured
Creditors Committee.
VAIL ANGLERS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Vail Anglers, LLC
P.O. Box 88
Spruce Creek, PA 16683
Bankruptcy Case No.: 11-32059
Chapter 11 Petition Date: September 16, 2011
Court: U.S. Bankruptcy Court
District of Colorado (Denver)
Judge: Elizabeth E. Brown
Debtor's Counsel: Aaron A. Garber, Esq.
KUTNER MILLER BRINEN, P.C.
303 E. 17th Avenue, Suite 500
Denver, CO 80203
Tel: (303) 832-2400
E-mail: aag@kutnerlaw.com
Estimated Assets: Not Stated
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's 20 largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/cob11-32059.pdf
The petition was signed by Donny Beaver, manager.
VIRGIN OFFSHORE: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: Virgin Offshore USA, Inc.
909 Poydras Street, Suite 2200
New Orleans, LA 70112
Case Number: 11-13028
Type of Business: Oil and Gas
Involuntary Chapter 11 Petition Date: September 16, 2011
Court: Eastern District of Louisiana (New Orleans)
Judge: Jerry A. Brown
Petitioners' Counsels: Michael A. Crawford, Esq.
TAYLOR PORTER BROOKS & PHILLIPS LLP
451 Florida Street
8th Floor Bank One Centre
Baton Rouge, LA 70801
Tel: (225) 387-3221
Fax: (225) 346-8049
E-mail: mike.crawford@taylorporter.com
H. Kent Aguillard, Esq.
YOUNG, HOYCHICK AND AGUILLARD
P.O. Drawer 391
Eunice, LA 70535-0391
Tel: (337) 457-9331
Fax: (337) 457-2917
E-mail: kaguillard@yhalaw.com
Jacque B. Pucheu, Jr., Esq.
PUCHEU, PUCHEU & ROBINSON, LLP
106 Park Avenue
Eunice, LA 70535
Tel: (337) 457-9075
Fax: (337) 457-4858
E-mail: jacque@pprlaw.com
Creditors who signed the involuntary Chapter 11 petition:
Petitioner Nature of Claim Claim Amount
---------- --------------- ------------
Dynamic Energy Oilfield Service Work $542,376
Services, LLC
c/o Brent Upton, Manager
6260 Hwy 73
Geismar, LA 70734
Precision Drilling Oilfield Service Work $1,161,826
Company, LP
c/o Heather Stickel
Manager, Credit
& Collections
10350 Richmond Ave
Houston, TX 77042
Tanner Services, LLC Oilfield Service Work $191,622
c/o Brian Tanner
Manager/CEO
P. O. Box 1434
Eunice, LA 70535
Debtor-affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Virgin Oil Company, Inc. 09-11899 06/25/2009
VYCOR MEDICAL: Posts $1.8 Million Net Loss in Second Quarter
------------------------------------------------------------
Vycor Medical, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $1.8 million on $142,331 of revenue for
the three months ended June 30, 2011, compared with a net loss of
$420,185 on $74,817 of revenue for the same period last year.
For the six months ended June 30, 2011, the Company had a net loss
of $2.8 million on $287,453 of revenue, compared with a net loss
of $761,802 on $139,103 of revenue for the comparable period of
2010.
The Company's balance sheet at June 30, 2011, showed $4.7 million
in total assets, $2.8 million in total liabilities, and a
stockholders' deficit of $1.9 million.
As reported in the TCR on April 11, 2011, Paritz & Company, P.A.,
in Hackensack, New Jersey, expressed substantial doubt about Vycor
Medical's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has incurred a loss since inception, has a net accumulated
deficit and may be unable to raise further equity.
A complete text of the Form 10-Q is available for free at:
http://is.gd/7yEJ9a
Boca Raton, Fla.-based Vycor Medical, Inc., operates two distinct
business units within the medical device industry: Vycor Medical
Inc.and NovaVision, Inc. Vycor Medical is a medical device
company that designs, develops and markets medical devices for use
in neurosurgery. NovaVision develops non-invasive, computer-based
visual neuro-stimulation therapy ("VRT") for patients suffering
from vision field deficits resulting from neurological trauma such
as Stroke and TBI, and screening and diagnostic products for
physicians.
WAGSTAFF MINNESOTA: Has New Motion for Jones & Malhotra as Auditor
------------------------------------------------------------------
Wagstaff Minnesota, Inc., et al., filed on Sept. 13, 2011, an
amended motion with the U.S. Bankruptcy Court for the District of
Minnesota asking for permission to employ Jones & Malhotra as
auditor.
On Sept. 7, 2011, the Hon. Nancy C. Dreher denied the Debtors'
request because according to the Court (i) the application
appeared to circumvent the normal rules regarding payment of
professionals; and (ii) was not in compliance with sections 327
and 330, of the Federal Rules of Bankruptcy Procedure 2016, and
the instructions applicable to early paydown of professionals.
The Debtors believe the amended application will address the
Court's concerns, including that the auditor will have its fees
and expenses approved by the Court.
Jones & Malhotra will perform the audit of the Debtors' 401(k)
plans. The Debtors relate that pursuant to Employee Retirement
Income Security Act of 1974, the Department of Labor's rules and
regulations, and Internal Revenue Service, the Debtors are
required to perform an audit of their 401(k) plans.
To date, the Debtors have not paid any fees or expenses to Jones
in connection with the audit.
Jones will perform the required audit for a flat fee of $12,000
and no more than $500 in expenses.
To the best of the Debtors' knowledge, Jones is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Wagstaff Properties
Hanford, California-based Wagstaff Properties LLC and its debtor-
affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case
No. 11-43074) on April 30, 2011.
The cases are jointly administered with Wagstaff Minnesota, Inc.
(Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher presides
over the cases. Fredrikson & Byron, PA, and Peitzman Weg &
Kempinsky LLP represent the Debtors in their restructuring
efforts. Wagstaff Properties estimated assets and liabilities at
$10 million to $50 million.
WEST NEW YORK: S&P Puts 'BB' GO Debt Rating on Watch Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' underlying
rating (SPUR) on West New York, N.J.'s general obligation debt on
CreditWatch with negative implications.
"This action follows our repeated attempts to obtain timely
information of satisfactory quality to maintain our rating on the
securities in accordance with our applicable criteria and
policies," said Standard & Poor's credit analyst Nicole Ridberg.
If Standard & Poor's does not receive the requested information by
Sept. 30, 2011, it will likely suspend the rating, preceded, in
accordance with its policies, by any change to the rating it
considers appropriate given available information.
WESTERN INSURANCE: A.M. Best Downgrades FSR to 'E'
--------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating (FSR)
to E (Under Regulatory Supervision) from B (Fair) and the issuer
credit rating (ICR) to "rs" from "bb" of Western Insurance Company
(WIC). A.M. Best also has downgraded the FSR to C (Weak) from B
(Fair) and the ICR to "ccc" from "bb" of WIC's affiliate, Western
Bonding Company (WBC). The ratings for WBC have been placed under
review with negative implications. All companies are domiciled in
Salt Lake City, UT.
The rating actions on WIC follow A.M. Best's recent confirmation
of a Rehabilitation Order issued by the State of Utah against the
company on August 25, 2011.
The rating actions, including the under review status, on WBC
reflects the company's limited profile, including geographic and
product concentration, limited sources of distribution and
execution risk in developing and implementing a business plan to
profitably grow the company. In addition, the rehabilitation
order at WIC may indirectly impact WBC as the loss of WIC's
financial assets and income could place a strain on the
capitalization and liquidity of the parent holding company, A and
H Insurance, Inc., which could in turn place pressure on WBC. The
under review status reflects the need for A.M. Best to review
WBC's business and operational plans going forward. A.M. Best
expects to resolve this issue within 90 days.
WILLIAM LYON: Makes $2.9MM Interest Payment on 7 1/2% Sr. Notes
---------------------------------------------------------------
William Lyon Homes, Inc., made a $2.92 million semi-annual
interest payment on its 7 1/2% Senior Notes due 2014, which
payment was made within the 30-day grace period provided by the
Indenture governing the Notes.
As reported in the Company's Current Report filed with the SEC on
Aug. 17, 2011, the Company did not make that interest payment on
Aug. 15, 2011. Non-payment of interest on the scheduled due date
is not an event of default under the indenture governing the Notes
unless the interest payment is not made within thirty days after
the scheduled due date.
The 2014 Notes have an aggregate principal amount outstanding of
approximately $77.8 million.
About William Lyon Homes
Based in Newport Beach, California, William Lyon Homes and
subsidiaries -- http://www.lyonhomes.com/-- are primarily engaged
in designing, constructing and selling single family detached and
attached homes in California, Arizona and Nevada.
The Company's balance sheet at June 30, 2011, showed $611.15
million in total assets, $610.25 million in total liabilities and
$896,000 in equity.
* * *
William Lyon carries 'CCC' issuer credit ratings from Standard &
Poor's.
"S&P raised its rating on William Lyon Homes because S&P believes
that near-term liquidity pressure has eased somewhat following the
partial funding of a secured term loan and reduced maturing credit
facility debt," said credit analyst James Fielding in November
2009 when S&P raised the rating on William Lyon to 'CCC' from
'CCC-'. He added, "However, this privately held homebuilder
remains very highly leveraged and may face challenges repaying or
refinancing intermediate-term debt maturities if its business
prospects don't improve in the interim."
Standard & Poor's Ratings Services raised its rating on William
Lyon Homes' 10.75% senior unsecured notes due 2013 to 'CC' from
'D' after the company repurchased $10.5 million of outstanding
principal for $9.0 million. S&P lowered its rating on the notes
to 'D' because S&P considered the discounted repurchase to be
tantamount to default under its criteria for exchange offers and
similar restructurings. In accordance with its criteria, S&P is
now raising its rating on these notes because the company
completed its repurchase, and S&P is not aware of additional
discounted repurchases at this time.
As reported by the TCR on Sept. 6, 2011, Moody's Investors Service
lowered the ratings of William Lyon Homes, including its corporate
family and probability of default ratings to Ca from Caa2 and the
ratings on its public senior unsecured notes to C from Caa3. The
rating outlook is negative.
These rating actions result from the company's recently missed
interest payment of $2.92 million on its 7.5% senior unsecured
notes due 2/15/2014. Moody's will attempt to determine the
company's reasons for missing the coupon payment in light of its
apparent availability of funds to make the payment and its plans
to address what Moody's considers to be an untenable capital
structure.
WOLF KNOW: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Wolf Knob, Inc.
P.O. Box 156
Lutz, FL 33548
Bankruptcy Case No.: 11-17439
Chapter 11 Petition Date: September 16, 2011
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Debtor's Counsel: Christopher C. Todd, Esq.
MCINTYRE, PANZARELLA, THANASIDES, ET AL
400 N. Ashley Drive, Suite 1500
Tampa, FL 33602
Tel: (813) 899-6059
Fax: (813) 899-6069
E-mail: chris@mcintyrefirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Anne E. Williams, president.
WORLD HEALTH: Posts $29,400 Net Loss in Second Quarter
------------------------------------------------------
World Health Energy Holdings, Inc., filed its quarterly report on
Form 10-Q, reporting a net loss of $29,401 for the three months
ended June 30, 2011, compared with a net loss of $0 for the same
period last year.
Revenues for the quarter ended June 30, 2011, were $0 as compared
to $0 for the quarter ended June 30, 2010.
For the six months ended June 30, 2011, the Company had a net loss
of $57,628 on $0 revenue, compared with a net loss of $9,699 on $0
revenue for the same period of 2010.
The Company's balance sheet at June 30, 2011, showed $48.3 million
in total assets, $172,751 in total liabilities, all
current, and stockholders' equity of $48.1 million.
Hamilton, PC, in Denver, Colorado, expressed substantial doubt
about World Health Energy Holdings' ability to continue as a going
concern, following the Company's 2010 results. The independent
auditors noted that the Company has suffered recurring losses from
operations.
A complete text of the Form 10-Q is available for free at:
http://is.gd/Hp7J1C
West Palm Beach Fla.-based World Health Energy Holdings, Inc.,
formerly Advanced Plant Pharmaceuticals, Inc., focuses on the sale
of plant based dietary health supplements. The Company owns the
rights to a thirteen step manufacturing process which utilizes
whole plants to manufacture all natural dietary supplements. The
Company intends to use this process to manufacture products for
distribution worldwide.
WOUND MANAGEMENT: Posts $3.2 Million Net Loss in Second Quarter
---------------------------------------------------------------
Wound Management Technologies, Inc., filed its quarterly report on
Form 10-Q, reporting a net loss of $3.2 million on $227,896 of
revenues for the three months ended June 30, 2011, compared with
a net loss of $663,006 on $114,977 of revenues for the same period
last year.
For the six months ended June 30, 2011, the Company had a net loss
of $5.9 million on $1.2 million of revenues, compared with a net
loss of $1.9 million on $180,957 of revenue for the same period of
2010.
The Company's balance sheet at June 30, 2011, showed $9.3 million
in total assets, $3.9 million in total liabilities, and
stockholders' equity of $5.4 million.
As reported in the TCR on April 26, 2011, Pritchett, Siler &
Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt
about Wound Management Technologies' ability to continue as a
going concern, following the Company's 2010 results. The
independent auditors noted that the Company has incurred
substantial losses and has a working capital deficit.
A complete text of the Form 10-Q is available for free at:
http://is.gd/5kJca9
Fort Worth, Texas-based Wound Management Technologies, Inc.
(OTC QB: WNDM) provides, through its wholly-owned subsidiary Wound
Care Innovations, LLC., its patented CellerateRX(R) product in the
quickly expanding advanced wound care market, particularly with
respect to diabetic wound applications.
ZELPHY'S CHRISTIAN: Case Summary & 3 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Zelphy's Christian Learning Center, Inc.
530-532 North High Street
Millville, NJ 08332
Bankruptcy Case No.: 11-37140
Chapter 11 Petition Date: September 15, 2011
Court: U.S. Bankruptcy Court
District of New Jersey (Camden)
Judge: Judith H. Wizmur
Debtor's Counsel: Carrie J. Boyle, Esq.
LAW OFFICE OF SCOTT H. MARCUS & ASSOCIATES
121 Johnson Road
Turnersville, NJ 08012
Tel: (856) 227-0800
Fax: (856) 227-7939
E-mail: cboyle@marcuslaw.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A list of the Company's three largest unsecured creditors filed
together with the petition is available for free at:
http://bankrupt.com/misc/njb11-37140.pdf
The petition was signed by Cecelia Thomas-Still, director of
operations/vice president.
* Circuit Court Restates July Opinion on Revesting
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that in July the U.S. Court of Appeals in San Francisco
harmonized two provisions in Chapter 13 by saying that the "plain
language" of Section 1327(b) of the Bankruptcy Code revests
property of the estate in the bankrupt on confirmation, unless the
debtor elects otherwise in the plan.
Consequently, the appeals court, according to the report, ruled in
July that state taxing authorities were not enjoined from
collecting taxes which arose after a prior Chapter 13 plan was
confirmed. There being no suspension of the ability to collect,
the tax debt was discharged because it arose more than three years
before the second bankruptcy filing and after the prior Chapter 13
confirmation.
According to the report, state taxing authorities sought
rehearing, contending that the July opinion was based on an issued
not briefed or argued. In response, the panel of three judges
withdrew the July opinion and filed a new opinion with the same
result.
The replacement opinion is California Franchise Tax Board v.
Kendall (In re Jones), 10-60000, U.S. 9th Circuit Court of
Appeal (San Francisco).
* 11th Circuit's Diaz Ruling Expanded to Chapter 11
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a decision was handed down last week in a Florida
district court following a ruling in late July by the U.S. Court
of Appeals in Atlanta holding that even if a bankruptcy court
fixes the amount owing for child support, the issue can be
relitigated outside bankruptcy court. In the new case, a former
husband confirmed a Chapter 11 plan, listing a child-support
obligation for $180,000 as disputed. The wife did not file a
proof of claim until after the bar date and after the plan was
confirmed. The bankruptcy judge, ruling before the circuit
court's July 27 decision in Florida Dept. of Revenue v. Diaz,
disallowed the claim. Later, Florida authorities brought suit in
state court to collect child support. The district court, in a
Sept. 13 opinion by District Judge Virginia Covington, reversed
the order of the bankruptcy court halting efforts to collect child
support. Judge Covington ruled that the case before her was in
most ways similar to Diaz's case. In the Diaz case, the 11th
Circuit in Atlanta ruled that "no part of child-support debt is
dischargeable under any circumstances in a Chapter 13 case." The
circuit court ruled that the bankruptcy court's determination of
the amount of the claim was only to decide how much would be paid
under the Chapter 13 plan. Covington's decision makes the Diaz
ruling applicable in Chapter 11. The new case is Florida
Department of Revenue v. Davis (In re Davis), 10-2216, U.S.
District Court, Middle District Florida (Tampa).
* House Hearing Held on Bankruptcy Venue Legislation
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the House subcommittee on Courts, Commercial and
Administrative Law held a hearing on a bill that would prevent
bankruptcy courts in Delaware and New York from playing host to
most of the country's major corporate reorganizations. U.S.
Bankruptcy Judge Frank J. Bailey, chief bankruptcy judge in the
District of Massachusetts, said in prepared testimony that the
current system "simply has not worked out the way Congress
intended." Allowing companies to reorganize far from where they
operate, in Judge Bailey's opinion, makes participation difficult
or expensive for small creditors, vendors, employees and
pensioners.
According to the report, Judge Bailey said that the "driving force
in venue decisions" has "become what is best for the lawyers and
other turnaround and workout professionals." Since 2000, Judge
Bailey counted at least 30 large- and mid-cap Massachusetts
companies that reorganized elsewhere.
The report relates that the bill was introduced in the U.S. House
of Representatives in July by Lamar Smith of Texas, the Republican
chairman of the House Judiciary Committee, and by John Conyers
Jr. of Michigan, the committee's ranking Democrat.
Melissa B. Jacoby, a professor at the University of North Carolina
at Chapel Hill, also favored ending the dominant role of New York
and Delaware. Ms. Jacoby, a member of the National Bankruptcy
Conference, reported that 70% of the largest 200 public-company
filings since 2005 ended up in New York or Delaware.
Ms. Jacoby pointed out how the late Lawrence P. King of New York
University didn't support having the state of incorporation as a
proper venue. Mr. King was the country's leading authority on
bankruptcy law and a principal author of the Collier bankruptcy
treatise.
Mr. Rochelle notes that the present system wasn't without
supporters. David A. Skeel of the University of Pennsylvania Law
School testified that "removing the domicile and affiliate options
would be an enormous mistake." Mr. Skeel said a change "would
undermine the effectiveness of our corporate bankruptcy system."
Mr. Skeel predicted that changing venue rules "would not help the
very parties the proposal is ostensibly designed to help" because
it would "increase the administrative costs of the system."
Attorney Peter C. Califano, Esq., from San Francisco testified in
favor of the bill for the Commercial Law League of America. The
bill, H.R. 2533, titled the "Chapter 11 Bankruptcy Venue Reform
Act of 2011," would permit "a corporation" to file under Chapter
11 only where it has its principal assets or principal place of
business. Current law allows companies to file where they are
incorporated or where even a small affiliate has filed. The
proposed new law would allow a company to file in the same
district with an affiliate only if the affiliate owns more than
half the voting stock.
Previous efforts to change bankruptcy venue rules died in the
Senate. Those then opposing a change in venue rules included
Vice President Joe Biden, a senator from Delaware at the time.
* Jessica Price Smith Appointed as N.D. Ohio Bankruptcy Judge
-------------------------------------------------------------
The Sixth Circuit Court of Appeals appointed Bankruptcy Judge
Jessica E. Price Smith to a fourteen-year term of office for the
Northern District of Ohio at Cleveland, effective Aug. 22, 2011,
(vice, Randolph Baxter). The term expires Aug. 23, 2025.
Judge Smith can be reached at:
Honorable Jessica E. Price Smith
U.S. Bankruptcy Judge
Howard M. Metzenbaum U.S. Courthouse
201 Superior Avenue
Cleveland, OH 44114
Office Number: 216-615-4442
Fax Number: 216-615-4360
Judicial Assistant: Lametria Davis
Law Clerk: Vacant
* Shon Hastings Appointed as North Dakota Bankruptcy Judge
----------------------------------------------------------
The Eighth Circuit Court of Appeals appointed Bankruptcy Judge
Shon Kaelberer Hastings, fourteen-year term of office for the
District of North Dakota, Fargo, effective Sept. 9, 2011, (vice,
William. A. Hill). The term expires Sept. 8, 2025.
Judge Hastings can be reached at:
Honorable Shon Kaelberer Hastings
U.S. Bankruptcy Court
Quentin N. Burdick United States Courthouse
655 1st Ave. N. Suite 210
Fargo, ND 58102-4932
Chambers Staff:
Jenny Gourde, Law Clerk
Telephone: 701-297-7141
May Beth Hegstad, Law Clerk
Telephone: 701-297-7143
* UBS Trader Charged in London With Fraud
-----------------------------------------
Chapter11Cases.com notes that UBS trader Kweku Adoboli didn't
enter a plea in a London court as prosecutors began to outline
alleged wrongdoing that stretches back as far as October 2008.
Adoboli faces charges of fraud and false accounting.
Bloomberg's Lindsay Fortado and Ben Moshinsky reported Friday that
the 31-year-old UBS trader was taken into custody at a magistrates
court in London Thursday until Sept. 22, when he can make an
application for bail. Mr. Adoboli's false accounting offenses
started in October 2008, according to the court charge sheet. He
is also charged with fraud dating back to January 2009.
According to the Bloomberg report, Adoboli "dishonestly abused"
his position as a senior trader, which required him "to safeguard,
or not to act against, the financial interests of UBS," according
to court documents.
* Economists Say New U.S. Recession Appears More Likely
-------------------------------------------------------
Dow Jones' DBR Small Cap reports that economists see a one-in-
three chance the U.S. will slip into recession over the next 12
months and doubt any steps the Federal Reserve might take at its
meeting next week could change that.
* Fitch Says No U.S. High Yield Issuers Defaulted in August
-----------------------------------------------------------
Dow Jones' DBR Small Cap reports that August was the third month
this year to end with no high-yield defaults in the U.S.,
according to Fitch Ratings, though it said the recent bankruptcy
filing by paper company NewPage Corp. will move the default rate
up again in September.
* Moody's: Speculative-Grade Liquidity Good But Has Warning Signs
-----------------------------------------------------------------
Moody's Liquidity Stress Index (LSI) ticked up to 4.1% by mid-
September after three months at a record-low 3.9%, Moody's said
Monday in the latest Speculative Grade Liquidity (SGL) Monitor.
This reading remains low by historical standards and is well off
the high of 20.9% recorded in March 2009, but the increase is a
sign that global economic pressures and tighter credit markets may
be starting to squeeze US speculative-grade companies.
"Companies in certain sectors are challenged by sluggish economic
growth and investors, concerned about the US economy and the
threat of contagion from the European debt crisis, are requiring
higher risk premiums on weaker credits," says John Puchalla, a
Moody's Vice President and Senior Credit Officer.
The current low LSI reading reflects previous refinancing and
healthy corporate earnings. The index would likely climb higher
if cash flow starts to weaken and bond issuance remains soft. The
LSI measures the percentage of companies with the lowest SGL
rating (SGL-4) and increases when liquidity appears to decrease.
Four companies received SGL rating downgrades in September and two
saw their liquidity ratings upgraded. This may be the third
consecutive month that the number of downgrades outpaced upgrades.
Liquidity-rating downgrades last outpaced upgrades for multiple
months during a seven-month stretch from October 2008 through
April 2009, at the height of the previous economic downturn.
Moody's Covenant Stress Index was also unchanged in August at
1.8%, its lowest level since March 2005, but Moody's estimates it
inched up to 2.0% in early September. The index measures the
extent to which speculative-grade companies are at risk of
violating debt covenants and increases when covenant cushion
appear to decrease.
Covenants could become a source of liquidity pressure if earnings
projections are revised lower in the face of a weaker economic
environment. This would be a concern even for companies that do
not have near-term maturities as it could create liquidity hurdles
if amending covenants becomes costlier.
The report also highlights recent anemic bond issuance, which
indicates potential difficulties for low-rated borrowers if the
pace of activity does not recover. Average US daily speculative
bond issuances is down about 90% year-to-year so far this month,
notes the report. While high yield issuance was slow toward the
end of the summer, it has not picked up as is usually the case
after Labor Day.
Please see the full report "SGL Monitor: Liquidity Remains Good --
Warning Signs Emerging" on http://www.moodys.com/
* S&P's Speculative-Grade Composite Spread Narrows to 725 Bps
-------------------------------------------------------------
Standard & Poor's speculative-grade composite spread narrowed by
2 basis points (bps) on Friday to 725 bps, and the investment-
grade composite spread remained unchanged at 215 bps. By rating,
the 'AA' spread narrowed by one basis point to 152 bps, and the
'A' and 'BBB' spreads remained unchanged at 191 bps and 261 bps,
respectively. The 'BB' and 'B' spreads narrowed by 2 bps each, to
520 bps and 766 bps, respectively, and the 'CCC' spread narrowed
by 4 bps to 1,130 bps.
By industry, financial institutions and telecommunications
tightened by one basis point each, to 341 bps and 360 bps,
respectively. Banks narrowed by 2 bps to 342 bps, industrials
remained unchanged at 342 bps, and utilities widened by one basis
point to 215 bps.
The investment-grade composite spread is currently at its high for
the year. The investment-grade spread is above its one-year
moving average of 180 bps and below its five-year moving average
of 231 bps. The speculative-grade composite spread is higher than
both its one- and five-year moving averages of 558 bps and 682
bps, respectively. S&P expects continued volatility in the near
term, especially in the speculative-grade segment, which could
result from both positive and negative factors. On the positive
side, S&P expects U.S. corporate defaults to remain low in the
short term. On the negative side, an increase in volatility in the
financial markets, influenced by weakening economic conditions,
could continue to weigh on risky assets.
* Erika Morabito Rejoins Foley From Patton Boggs
------------------------------------------------
Foley & Lardner LLP announced on September 15 that Erika L.
Morabito has rejoined the firm's Bankruptcy & Business
Reorganizations Practice as a partner in its Washington, D.C.
office. Morabito rejoins Foley from Patton Boggs LLP.
Ms. Morabito focuses her practice on bankruptcy, creditors'
rights, debtor reorganizations and out-of-court restructurings.
She represents Chapter 11 debtors and creditors' committees, and
frequently advises and represents clients in creditors' rights
litigation, out-of-court restructurings and the purchase and sale
of assets under the Bankruptcy Code. Morabito also handles a
variety of commercial litigation, commercial real estate, FDA
litigation and loan transactions.
"Erika brings a well-regarded and sophisticated national practice
to our national bankruptcy capabilities," said Mark L. Prager,
chair of the firm's Bankruptcy & Business Reorganizations
Practice. "We know Erika well, and beyond her notable Chapter 11
representations and restructuring efforts she is an accomplished
litigator, which is increasingly important to our clients in this
space."
Earlier this month, bankruptcy and finance attorneys Christopher
Celentino, Mikel R. Bistrow and Kathryn M.S. Catherwood joined
Foley's San Diego office from Duane Morris LLP.
"It's exciting to rejoin Foley as its bankruptcy practice
continues to expand around the country," said Morabito. "As
bankruptcy matters grow more complex - and contested - I look
forward to working together with my colleagues throughout Foley to
provide the best restructuring and litigation solutions for our
clients."
"We are very pleased to welcome Erika back to our team here in
D.C.," said Scott L. Fredericksen, managing partner of Foley's
Washington, D.C. office. "Erika is a well-recognized figure in the
legal community and her bankruptcy and litigation experience is a
perfect complement to our growing presence here."
Ms. Morabito's litigation practice has involved a wide variety of
complex commercial litigation cases in state and federal courts
across the country, including business tort, breach of contract,
employment, large commercial collection, FDA, construction
litigation, and non-compete actions. She is particularly active
representing clients in the state and federal courts of Virginia
while also actively litigating in several other courts throughout
the country.
Ms. Morabito is a frequent lecturer for the Arlington, Virginia
Bar Association and the District of Columbia Bar on a variety of
bankruptcy and litigation issues. She also serves on judicial
interview panels and provides recommendations for future
appointments of judges in the Commonwealth of Virginia.
Foley's Bankruptcy & Business Reorganizations Practice is one of
the nation's largest and most prestigious. Its highly regarded
attorneys have extensive experience in all aspects of bankruptcy
law and practice, and have represented various constituents in
several of the largest and most complex Chapter 11 cases in the
United States.
* Large Companies With Insolvent Balance Sheet
----------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Liabilities Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ ----------- -------
ABSOLUTE SOFTWRE ABT CN 116.7 (13.2) (2.9)
ACCO BRANDS CORP ABD US 1,135.8 (28.3) 339.3
ALASKA COMM SYS ALSK US 615.6 (37.7) 20.4
AMC NETWORKS-A AMCX US 2,110.5 (1,099.4) 514.7
AMER AXLE & MFG AXL US 2,195.4 (357.9) 50.1
AMERISTAR CASINO ASCA US 2,067.1 (121.9) (40.8)
AMR CORP AMR US 25,787.0 (4,509.0) (1,769.0)
ANOORAQ RESOURCE ARQ SJ 1,016.8 (119.1) 20.8
AUTOZONE INC AZO US 5,884.9 (1,119.5) (655.3)
BLUEKNIGHT ENERG BKEP US 327.4 (45.5) (90.0)
BOSTON PIZZA R-U BPF-U CN 146.1 (101.0) 1.3
CABLEVISION SY-A CVC US 6,975.1 (5,439.8) (703.4)
CANADIAN SATEL-A XSR CN 174.4 (29.8) (55.9)
CARBONITE INC CARB US 42.6 (11.4) (18.2)
CC MEDIA-A CCMO US 16,882.1 (7,270.0) 1,501.0
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CENVEO INC CVO US 1,410.8 (330.1) 223.4
CHEFS WAREHOUSE CHEF US 95.8 (45.1) 6.9
CHENIERE ENERGY CQP US 1,726.6 (559.0) 22.7
CHENIERE ENERGY LNG US 2,619.8 (430.3) (103.2)
CHOICE HOTELS CHH US 441.3 (27.9) 6.5
CINCINNATI BELL CBB US 2,658.5 (633.6) 30.5
CLOROX CO CLX US 4,163.0 (86.0) (86.0)
DENNY'S CORP DENN US 286.7 (99.5) (39.9)
DIRECTV-A DTV US 19,177.0 (1,399.0) 1,270.0
DISH NETWORK-A DISH US 12,827.7 (92.6) 2,164.2
DISH NETWORK-A EOT GR 12,827.7 (92.6) 2,164.2
DOMINO'S PIZZA DPZ US 487.0 (1,171.4) 167.9
DUN & BRADSTREET DNB US 1,767.1 (567.8) (483.7)
ECOSYNTHETIX INC ECO CN 45.2 (346.7) 32.2
EXELIXIS INC EXEL US 454.2 (81.8) 90.2
FRANCESCAS HOLDI FRAN US 69.7 (0.1) 22.8
FREESCALE SEMICO FSL US 4,583.0 (4,401.0) 1,329.0
GENCORP INC GY US 987.3 (161.1) 94.3
GLG PARTNERS INC GLG US 400.0 (285.6) 156.9
GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9
GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5
HANDY & HARMAN L HNH US 391.4 (6.5) 18.5
HCA HOLDINGS INC HCA US 23,877.0 (7,534.0) 2,613.0
HOVNANIAN ENT-B HOVVB US 1,697.8 (399.4) 1,028.2
HUGHES TELEMATIC HUTC US 100.6 (94.9) (28.3)
INCYTE CORP INCY US 416.7 (136.3) 281.3
IPCS INC IPCS US 559.2 (33.0) 72.1
ISTA PHARMACEUTI ISTA US 135.7 (66.5) 10.4
JUST ENERGY GROU JE CN 1,471.5 (208.2) (299.7)
LIZ CLAIBORNE LIZ US 1,247.3 (211.1) (52.7)
LORILLARD INC LO US 2,498.0 (831.0) 904.0
MAINSTREET EQUIT MEQ CN 475.2 (10.5) -
MANNKIND CORP MNKD US 228.4 (245.4) 5.3
MEAD JOHNSON MJN US 2,526.1 (184.5) 652.4
MERITOR INC MTOR US 2,838.0 (963.0) 226.0
MOODY'S CORP MCO US 2,744.6 (16.6) 691.1
MORGANS HOTEL GR MHGC US 604.4 (51.3) 112.0
NATIONAL CINEMED NCMI US 817.6 (329.8) 62.2
NEXSTAR BROADC-A NXST US 558.0 (183.4) 35.4
NPS PHARM INC NPSP US 253.3 (27.3) 201.5
OTELCO INC-IDS OTT US 317.0 (8.6) 21.8
OTELCO INC-IDS OTT-U CN 317.0 (8.6) 21.8
PALM INC PALM US 1,007.2 (6.2) 141.7
PDL BIOPHARMA IN PDLI US 284.3 (293.5) (4.6)
PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9)
PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9)
PRIMEDIA INC PRM US 208.0 (91.7) 3.6
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
QUALITY DISTRIBU QLTY US 279.4 (113.4) 47.2
QWEST COMMUNICAT Q US 16,849.0 (1,560.0) (2,828.0)
RAPTOR PHARMACEU RPTP US 20.5 (14.6) (21.4)
REGAL ENTERTAI-A RGC US 2,367.9 (538.3) (72.9)
RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4)
REVLON INC-A REV US 1,100.0 (677.5) 144.6
RSC HOLDINGS INC RRR US 2,949.6 (59.2) (205.0)
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 1,725.5 (260.7) 429.3
SINCLAIR BROAD-A SBGI US 1,497.3 (135.3) 69.0
SINCLAIR BROAD-A SBTA GR 1,497.3 (135.3) 69.0
SKULLCANDY INC SKUL US 108.5 (12.5) 33.2
SMART TECHNOL-A SMT US 574.8 (17.3) 194.3
SMART TECHNOL-A SMA CN 574.8 (17.3) 194.3
SUN COMMUNITIES SUI US 1,322.8 (65.4) -
TAUBMAN CENTERS TCO US 2,495.4 (426.8) -
THERAVANCE THRX US 303.1 (37.5) 253.4
TOWN SPORTS INTE CLUB US 450.6 (4.3) (35.4)
UNISYS CORP UIS US 2,642.9 (661.8) 374.7
VECTOR GROUP LTD VGR US 941.2 (50.1) 257.6
VERISIGN INC VRSN US 1,795.6 (4.2) 873.4
VERISK ANALYTI-A VRSK US 1,408.1 (144.4) (216.1)
VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3)
VONAGE HOLDINGS VG US 235.9 (75.0) (65.6)
WARNER MUSIC GRO WMG US 3,583.0 (289.0) (630.0)
WEIGHT WATCHERS WTW US 1,104.5 (542.4) (274.4)
WORLD COLOR PRES WC CN 2,641.5 (1,735.9) 479.2
WORLD COLOR PRES WCPSF US 2,641.5 (1,735.9) 479.2
WORLD COLOR PRES WC/U CN 2,641.5 (1,735.9) 479.2
*********
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 ***