/raid1/www/Hosts/bankrupt/TCR_Public/111130.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, November 30, 2011, Vol. 15, No. 332
Headlines
155 EAST: Canpartners Offers "Superior" Competing Plan
216 WEST 18: May Use Mortgage Lender's Cash Through Jan. 31
3900 BISCAYNE: Wants Plan Exclusivity Amid Lien Litigation
AES CORPORATION: Moody's Raises Corp. Family Rating to 'Ba3'
AMBAC FINANCIAL: Has $75.5 Million Net Loss for 3rd Quarter
AMBAC FINANCIAL: AAC Has $7.99-Bil. in Assets at June 30
AMERISTAR CASINOS: Moody's Says Gaming Would Be Long-Term Positive
AMERICAN AIRLINES: Files for Chapter 11 to Cut Labor Costs
AMERICAN AIRLINES: Case Summary & 50 Largest Unsecured Creditors
AMERICAN AIRLINES: Says It's Business As Usual While in Ch. 11
AMERICAN AIRLINES: G. Arpey Resigns as CEO on Day of Bankr. Filing
AMERICAN AIRLINES: PBGC Says $1-Bil. Would Be Lost if Plan Ended
AMERICAN AIRLINES: Filing to Have Negligible Impact to AAR
AMR CORP: Flyers Rights Notes of Some Risks
AMERICAN AIRLINES: AFA Union to Protect American Eagle Attendants
ARTHUR KLAPSTEIN: Chapter 15 Case Summary
AR BROADCASTING: Hires Landis Rath as Bankruptcy Counsel
AR BROADCASTING: Taps DLS Claims Administration as Notice Agent
ATLANTIC & PACIFIC: Seeks Court Nod for New Labor Deals
BEAR MOUNTAIN: Court Denies Secured Financing From North Cascade
BOBBY ROWE: Auctioneers to Conduct Bankruptcy Sale of Assets
BOCA BRIDGE: Intends to Seek Plan Outline Approval on Dec. 9
BOWE BELL: Court OKs Stahl Cowen as Retiree Committee Counsel
BOWE BELL: Court OKs Thorp Reed as Retiree Committee Co-Counsel
CENTRAL FALLS, R.I.: Inks Agreement with Labor Unions
CENTURY PLAZA: Section 341(a) Meeting Continues to Dec. 9
CHRISTIAN BROTHERS: Court OKs Four Seasons as Broker
COSTA DORADA: Files Debt Stipulation With Scotia de Puerto Rico
DIPPIN' DOTS: Hiring Farmer & Wright as Bankruptcy Counsel
DIPPIN' DOTS: Sec. 341 Creditors' Meeting Set for Dec. 8
DIPPIN' DOTS: DIP Financing Requires Asset Sale by June 2012
DPL INC: Moody's Lowers Unsecured Rating to 'Ba1'
ENERGY CONVERSION: Names New CEO, Taps Restructuring Chief
EVANS OIL: Disclosure Statement Hearing Slated for Dec. 8
EXIDE TECHNOLOGIES: Wants Until Jan. 31 to Object to Claims
EXIDE TECHNOLOGIES: MRE Wants $308K Claim Allowed
FILENE'S BASEMENT: Syms Creditors Seek to Disband Equity Committee
FILENE'S BASEMENT: Hilco to Auction Intellectual Property Assets
GARLOCK SEALING: Hires FTI Consulting as Financial Advisor
GELT PROPERTIES: Hires O'Kelly for Customers Bank Litigation
GREYSTONE PHARMA: U.S. Govt. Wants Case Dismissal for Unpaid Taxes
HARGATE PROPERTIES: Chateau in Receivership, Continues Operations
HOLDINGS OF EVANS: Hearing on Further Cash Access on Dec. 2
HOLDINGS OF EVANS: Wants to Obtain $100,000 of DIP Financing
HUBBARD PROPERTIES: Amends Schedules of Assets and Liabilities
INT'L ENVIRONMENTAL: Sec. 341 Creditors' Meeting Set for Dec. 16
JEFFERSON COUNTY: Sheriff Seeks Protection From Lawsuits
JEFFERSON COUNTY: Bankruptcy to Test Muni-Bond Assumptions
KINGSBURY CORP: Has Final Nod to Continue Borrowing Until Dec. 30
KT SPEARS: Court Slates Dec. 12 Plan Confirmation Hearing
LEHMAN BROTHERS: Bankruptcy Plan Supported by 95% of Creditors
LITTLETON APARTMENTS: All Creditors Paid 100% From Asset Sale
LOS ANGELES DODGERS: Fights With Fox About Hearing Agenda
LUIS SOTO RIOS: 1st Cir. Affirms Ruling Over Mortgages
M WAIKIKI: Court OKs Bickel & Brewer as Special Litig. Counsel
M&M STONE: Court Denies Extension to Obtain Bankruptcy Counsel
M&M STONE: U.S. Trustee Wants Ch. 11 Case Converted or Dismissed
M&M STONE: Committee Seeks to Retain EisnerAmper as Accountants
M&M STONE: Committee Seeks to Retain Thorp Reed as Counsel
MANISTIQUE PAPERS: Seeks Extension to File Chapter 11 Plan
MAQ MANAGEMENT: Plan Offers 10 Cents on Dollar to Unsec. Creditors
MATTRESS FIRM: Moody's Assigns 'B2' Corporate Family Rating
MF GLOBAL: CUSTOMERS' Plea for Commodity Brokers Committee Denied
MF GLOBAL: SIPA Trustee Wins Nod to Make $520MM Distribution
MF GLOBAL: SIPA Trustee to Pay Out All $3.7 Billion in His Control
MF GLOBAL: SIPA Trustee Proposes Parallel Claims Processes
MF GLOBAL: Bank of America Proposes Trading Via Ethical Wall
MF GLOBAL: Elliott Mgt. Wins Nod for Information Blocking Protocol
MF GLOBAL: L. Stern, et al., Asks OK for Withdrawal of Property
MF GLOBAL: Senator Calls On Corzine to Testify at Hearing
MINE RECLAMATION: Lobel Firm Approved as Substitute Counsel
NATIONAL GRAPHICS: Section 341(a) Meeting Scheduled for Dec. 21
NETFLIX INC: S&P Lowers Corp. Credit Rating to 'BB-' on Net Loss
NEWPAGE CORP: Court Allows Committee to Retain Advisor & Banker
NEWPAGE CORP: Seeks to Employ Ciardi as Special Counsel
NEWPAGE CORP: S&P Withdraws 'D' Ratings on Various Note Issues
NEWPAGE CORP: Plum Creek Seeks to End Fiber Supply
NNN 2400: Wants to Complete Financing 60 days After Dec. 22
NEXTWAVE WIRELESS: Extends Refinancing Deadline to Dec. 15
NORTHERN BERKSHIRE: Bondholders to Receive New MDFA & MHEFA Notes
OASIS AT WILD HORSE: Court Rejects Sanctions Against Fernandos
OCEAN PLACE: Can Access AFP 104's Cash Collateral Until Nov. 30
OILSANDS QUEST: Obtains Creditor Protection Under CCAA
OLDE PRAIRIE: Winner's Development to Provide $40.2MM Cash Equity
ORANGE COUNTY: S&P Lowers Rating on Revenue Bonds to 'BB-'
ORBITAL SCIENCES: S&P Affirms 'BB+' Corporate Credit Rating
OTERO COUNTY: Asks Court to Extend Plan Filing Period to Sept. 14
PALM HARBOR: Joint Plan of Liquidation Confirmed
PARC AT ROGERS: Section 341(a) Meeting Rescheduled for Dec. 29
PITTSBURG CORNING: Settles With Hartford Insurance
PLATINUM PROPERTIES: Seeks Approval of $600,000 DIP Facility
PMI GROUP: S&P Lowers Corp. Credit Rating to 'D' on Bankruptcy
POMPANO CREEK: Case Dismissal/Conversion Hearing Set for Dec. 13
PURE BEAUTY: Creditors Have Until Jan. 13 to File Proofs of Claim
PURE BEAUTY: Court Approves SSG Capital as Investment Banker
PURE BEAUTY: Court Approves Young Conaway as Attorneys
RCR PLUMBING: Court Deems City of California Adequate Assured
RCR PLUMBING: PAC Financing Deal OK'd; Further Amendment Allowed
R.E. LOANS: Court Approves Land Advisors as Real Estate Broker
REDDY ICE: Receives Additional Notice Regarding NYSE Listing
ROTTLUND HOMES: Ceases Business; Appoints Receiver to Sell Assets
RUDEN MCCLOSKY: Committee Wants to Retain Segall Gordich
RUDEN MCCLOSKY: To Employ Shafritz and Braten as Litig. Counsel
SEA TRAIL: Can Access Waccamaw Cash Collateral Until Nov. 30
SEAHAWK DRILLING: Draws Made on Letters of Credit on Trust
SIX FLAGS: Moody's Rates Proposed Credit Facility at 'B1'
SPECTRAWATT INC: To Employ Lynn Tillotson as Litigation Counsel
STELLAR GT: The Georgian in Silver Spring Sold for $193 Million
SWADENER INVESTMENT: Has Access to Cash Collateral Until March 31
TASANN TING: Court Considers Case Conversion Plea on Dec. 13
TENNESSEE COMMERCE: Receives Notice of Deficiency From NASDAQ
THORNBURG MORTGAGE: First Amendment Doesn't Shelter Ratings Firms
TOWN CENTER: Committee Retains Genovese, Joblove as Counsel
TOWNSEND CORP: Has GlassRatner to Find Buyers for Dealership
UNIONBANCAL: Moody's Changes Outlook to Stable
ZAIS INVESTMENT: Noteholder Plan Heads for Approval Hearing
* Final Bids for Distressed Property Loans Due
* Distressed Property Level Rising, But Investor Demand Subdued
* Upcoming Meetings, Conferences and Seminars
*********
155 EAST: Canpartners Offers "Superior" Competing Plan
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Canpartners Realty Holding Company IV LLC asks the U.S. Bankruptcy
Court for the District of Nevada to terminate East Tropicana, LLC,
and 155 East Tropicana Finance Corp.'s exclusive periods to file a
plan and to solicit acceptances thereof, so that Canpartners may
file its own proposed plan of reorganization.
Canpartners tells the Court that its plan will be far superior to
any "new value" plan put forth by the Debtors. Specifically, the
Canpartners Plan will provide for payment in full on the
effective date of all of the Debtors' unsubordinated unsecured
creditors. The Canpartners Plan will also provide for the sale of
the Debtors' assets through a foreclosure or Section 363 sale, in
either case providing for a full right of Canpartners and U.S.
Bank, as indenture trustee for the holders of Debtors' senior
secured notes, to credit bid.
Canpartners, the holder of approximately 98.1% of the Debtors'
senior secured notes, puts forth the following reasons in support
of its motion:
* First, despite their fiduciary obligations to maximize
recoveries for creditors, the Debtors appear to have no interest
in considering a sale, despite that a sale of the property is the
best (and only) way to maximize value.
* Second, the Canpartners Plan would be significantly more
beneficial to creditors than any plan the Debtors could propose.
The Canpartners Plan would pay all of the Unsubordinated Creditors
in cash on the effective date. No plan of Debtors could achieve
such a favorable result for creditors, because Debtors could not
provide the Unsubordinated Creditors with more favorable
treatment than the treatment afforded to the Noteholders'
deficiency claim. Canpartners, however, can achieve that result
under the Canpartners Plan, because the Noteholders can consent to
(but cannot be forced to accept) less favorable treatment than
that provided for the Unsubordinated Creditors.
* Third, cause exists for terminating exclusivity because the
Canpartners Plan would move these cases to conclusion far more
quickly than the plan Debtors intend to propose. Judicial
resources would be saved, and alternatives could be given to all
creditors, if Canpartners is allowed to file a competing plan.
The Debtors recently filed a motion to extend the Exclusive
Periods for an aggregate of 150 days (60 more days to file its
plan and an additional 90 days to April 28, 2012, to confirm
Debtors' plan).
* Fourth, while Canpartners could confirm its plan quickly and
ensure that all Unsubordinated Creditors are paid in full, the
Debtors' plan will not be confirmable over Canpartners'
objection.
* Fifth and finally, the Debtors simply don't need any more
time. The Debtors began their restructuring efforts more than
three years ago (pre-petition). They have already spent more than
$3 million on those restructuring efforts. These efforts have
been abject failures and have eroded value to creditors. Debtors
neither need nor deserve additional time to continue down this
same path.
About 155 East Tropicana
155 East Tropicana LLC owns the world's first Hooters Casino
Hotel, a 696-room and 4-suite hotel located one block from the Las
Vegas Strip and across Tropicana Blvd. from MGM Grand.
155 East Tropicana, along with an affiliate, sought Chapter 11
protection (Bankr. D. Nev. Case No. 11-22216) on Aug. 1, 2011.
155 East sought bankruptcy protection to stop a scheduled
foreclosure of the second-lien debt. The two secured credit
facilities were accelerated early this year.
Canpartners Realty Holding Co. IV LLC acquired 98.4% of the
$130 million in 8.75% second-lien senior secured notes. An
additional $32.2 million of interest is owing on the second-lien
debt, with US Bank NA as the indenture trustee. Holders of the
$14.5 million in first-lien debt have Wells Fargo Capital Finance
Inc. as their agent. The first-lien obligation is fully secured.
Interest has been paid at the default rate.
Gerald M. Gordon, Esq., and Brigid M. Higgins, Esq., at Gordon
Silver, in Las Vegas, Nevada, serve as counsel to the Debtors.
Garden City Group, Inc., is the claims agent. William G. Kimmel &
Associates has been hired to provide an appraisal of the Debtors'
casino hotel/property. Alvarez & Marsal serves as financial and
restructuring advisor. Innovation Capital LLC serves as financial
advisor for capital raising transactions and M&A transactions.
216 WEST 18: May Use Mortgage Lender's Cash Through Jan. 31
-----------------------------------------------------------
Bankruptcy Judge Stuart M. Bernstein will hold a final hearing
Dec. 29, 2011 at 10:00 a.m. (Eastern Time) on the request of 216
Owner LLC, 216 West Mezz LLC, and 216 West 18 Holder LLC to use
cash collateral and provide adequate protection to 216 W 18 Lender
LLC, the mortgage lender, for any diminution in value of its
interests.
The Debtors intend to use Cash Collateral for the general purpose
of operating its mortgaged property through confirmation of their
proposed plan of liquidation, pursuant to a budget. The Debtors
believe that the Mortgage Lender is the only party that has a
cognizable interest in the Cash Collateral.
Early this month, the Court granted the Debtors interim authority
to use Cash Collateral through the earlier of Jan. 31, 2012, or
upon an event of termination, which include failure by the Debtors
to obtain entry of a confirmation order for its chapter 11 plan by
Dec. 15, 2011.
The Court's interim order also directed a receiver to immediately
turn over all property of the Debtors, including all Cash
Collateral, to the Chief Restructuring Officer. Prior to the
Petition Date, the Debtors engaged Steven A. Carlson as the
Debtors' CRO to oversee all aspects of the Debtors' business and
operations. Prior to the Petition Date, Andrew L. Herz was
appointed as temporary receiver for the Mortgaged Property in a
foreclosure action pending as Index No. 650622/2009 E in the
Supreme Court of the State of New York, County of New York.
Judge Bernstein said the CRO will have the authority to delegate
to the Receiver the power to perform services with respect to the
Mortgaged Property in substantially the same manner as the
Receiver did prepetition, to the extent and as directed by the
CRO.
The Mortgage Lender, an affiliate of Fishman Holdings North
America Inc., purchased the Mortgage Loan from Bank of America
N.A. As of Nov. 1, 2011, the total amount outstanding under the
Mortgage Loans aggregate $74,342,445.
The Mortgage Lender also purchased a mezzanine loan from BofA.
The bank, in turn, acquired the Mezz Loan from Torchlight Debt
Opportunity Fund II Mezzanine Sub LLC, f/k/a ING Clarion Debt
Opportunity Fund II Mezzanine Sub LLC. As of Sept. 14, 2011, the
total amount outstanding under the Mezz Loan aggregate
$24,632,345.
About 216 West 18
216 West 18 Owner LLC, 216 West 18 Mezz LLC and 216 West 18 Holder
LLC own a parcel of improved real estate at 218 West 18th Street
in New York. 216 West 18 Owner is wholly owned by 216 West 18
Mezz. Mezz is wholly owned by 216 West 18 Holder LLC. Holder is
owned 94.2% by HAJ 18 LLC and 5.8% by JK 18 LLC. HAJ 18, wholly
owned by Harry Jeremias, is the managing member of Holder. The
216 West 18 entities do not have any employees.
The 216 West 18 entities, through their restructuring officer,
Steven A. Carlson, filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case Nos. 11-15110 to 11-15112) on Nov. 1, 2011. In its
petition, 216 West 18 Owner estimated $50 million to $100 million
in both assets and debts.
The Debtors filed for bankruptcy to implement a prepackaged plan
of liquidation originally proposed by Atlas Capital Group LLC.
The Plan provides for the transfer of the Mortgaged Property to
their mortgage lender.
Atlas is represented by Greenberg Traurig LLP. HAJ 18 LLC is
represented by Herrick Feinstein LLP.
The mortgage lender, 216 West 18 Lender, an affiliate of Fishman
Holdings North America, is represented by Alston & Bird LLP.
3900 BISCAYNE: Wants Plan Exclusivity Amid Lien Litigation
----------------------------------------------------------
3900 Biscayne, LLC, asks the Bankruptcy Court to extend its
exclusive period to solicit acceptances of its Plan of
Reorganization up to and including seven days after the date of
the confirmation hearing, to be scheduled by the Court. The
Debtor will negotiate with parties-in-interest and attempt to
resolve any issues and/or objections to the Plan.
Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., tells the
Court that the hearing to consider approval of the Disclosure
Statement was held on Aug. 9, 2011, after which the Court entered
an Order directing the Debtor to file an Adversary Proceeding and
ordering that the hearing to consider the approval of the
Disclosure Statement is continued and will be rescheduled to a
date after the adjudication of the Adversary Proceeding. The
Adversary Proceeding was filed on Sept. 20, 2011, seeking to
determine validity, extent and priority of liens. The Debtor has
and will continue to try and expedite the Adversary Proceeding.
About 3900 Biscayne, LLC
3900 Biscayne, LLC, is a Florida limited liability company which
owns real property located at 3900 Biscayne, in Miami, currently
leased to Miami Arts, Inc., a tuition-free public charter school
offering college-preparatory academic curriculum and conservatory-
style training in the visual and performing arts. The Company
filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-22948)
on May 12, 2011, in Miami, Florida. Judge A. Jay Cristol presides
over the case. James C. Moon, Esq., and Peter D. Russin, Esq., at
Meland Russin & Budwick, P.A., in Miami, represent the Debtor in
its Chapter 11 effort. The Debtor disclosed $14,857,484 in total
assets and $13,691,533 in total liabilities as of the Chapter 11
filing.
AES CORPORATION: Moody's Raises Corp. Family Rating to 'Ba3'
------------------------------------------------------------
Moody's Investors Service upgraded several ratings of The AES
Corporation (AES), including its Corporate Family Rating,
Probability of Default Rating, and senior unsecured debt rating to
Ba3 from B1 as well as the company's trust preferred rating to B2
from B3. Concurrent with this rating action, Moody's affirmed the
company's senior secured bank credit facilities at Ba1. The rating
outlook is stable. The rating action was driven by the completion
of AES' acquisition of DPL, Inc. (DPL) for cash consideration of
$3.5 billion.
Upgrades:
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3
from B1
-- Trust Preferred Securities, Upgraded to B2 from B3
-- Corporate Family Rating, Upgraded to Ba3 from B1
Probability of Default Rating, Upgraded to Ba3 from B1
Affirmations:
-- Senior Secured Bank Credit Facilities, Affirmed at Ba1
Outlook Actions:
Issuer: The AES Corporation
-- Outlook, Changed To Stable from Positive
LGD Point Estimate Changes:
-- Senior Secured Credit Facilities, to LGD2, 17% from LGD1, 7%
-- Senior Unsecured Regular Bond/Debenture, to LGD4, 55% from
LGD4, 60%
RATINGS RATIONALE
"The acquisition of DPL has strengthened AES' financial position
by improving the scale, diversity and cash flow quality of its
North American asset base and offsets the company's business
concentration in South America" said Moody's Vice President Scott
Solomon.
Distributions from DPL, expected to range between $200-300 million
annually, will increase the scale of cash flows to AES and drive
an expected improvement in key parent level financial metrics.
Specifically, Moody's anticipates AES' ratios of parent operating
cash flow (POCF, defined as total subsidiary distributions less
parent overhead costs and parent interest expense) to parent level
debt and parent interest coverage to exceed 12% and 2.5 times,
respectively, beginning 2012 compared to 9% and 2 times,
respectively, during the twelve months ended December 31, 2010.
This expected improvement in AES' financial performance underpins
the rating action.
Additionally, the DPL acquisition will result in an increase in
cash flow generated by AES' regulated utility subsidiaries,
thereby reducing the company's overall risk profile. Regulated
cash flows are typically more stable and predictable than those
generated by contracted or competitive power generation, AES' two
other significant lines of businesses. According to Moody's
calculations, the introduction of DPL will increase parent level
cash flows generated by AES' regulated utility subsidiaries to
approximately 40% of its total from 25%. Moreover, Dayton Power
and Light Company (DP&L), DPL's primary operating subsidiary,
operates in a fairly supportive regulatory jurisdiction, is
provided a reasonable opportunity to recover costs and has
historically generated fairly stable cash flows. AES' most
significant regulated subsidiaries are located primarily in the
United States and Brazil.
The rating action takes into consideration various shareholder-
friendly measures initiated by AES over the past 18-months,
including significant share repurchases (approximately 34 million
shares have been repurchased from July 2010 through November 3,
2011 at a total cost of $378M) and the intention to pay a dividend
beginning the fourth quarter of 2012.
While credit dilutive, Moody's notes that the company's dividend
will be fairly modest at $120 million annually. The dividend will
be supported by the predictable cash flows derived from DPL and
the completion of certain construction projects that, combined,
are expected to increase subsidiary distributions to approximately
$1.5 billion annually from $1.0-$1.1 billion. The level of
dividends and share repurchases are limited by a covenant in the
company's bank facilities concerning restricted payments.
The affirmation of AES' speculative grade liquidity rating at SGL-
2 reflects the company's strong parent operating cash flows and
adequate headroom under its existing financial covenants. While
the funding of the DPL acquisition has greatly reduced AES' cash
balance, Moody's expects the company to quickly enhance its
liquidity position with the generation of parent free cash flow
and from the proceeds of previously announced assets sale. Going
forward, Moody's expects AES to maintain a minimum liquidity
target in the range of $350-$500 million, an amount that appears
adequate based on the company's business requirements.
The stable rating outlook for AES reflects expectations for
predictable POCF over the next several years as the company
integrates the DPL acquisition and completes certain construction
projects. The stable rating outlook further considers that
shareholder rewards programs, including share repurchases and the
payment of dividends will be managed in a way that is neutral to
the parent's credit quality.
In light of the upgrade and the introduction of a common dividend,
the prospects of a rating upgrade in the near-term is limited.
However. AES' CFR could be upgraded if the company's ratio of POCF
to parent level recourse debt exceeds 14% and cash coverage of
parent interest expense is above 3.0x on a sustainable basis.
Conversely, AES' rating could be downgraded if a more aggressive
financial policy emerges.
The AES Corporation is a global power company with generation and
distribution assets in Europe, Asia, Latin America, Africa and the
United States.
The methodologies used in this rating were Regulated Electric and
Gas Utilities published in August 2009, and Unregulated Utilities
and Power Companies published in August 2009.
AMBAC FINANCIAL: Has $75.5 Million Net Loss for 3rd Quarter
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Ambac Financial Group, Inc. (OTC: ABKFQ) (Ambac) announced on
November 9, 2011, a third quarter 2011 net loss of $75.5 million,
or a net loss of $0.25 per share. This compares to third quarter
2010 net income of $76.0 million, or net income of $0.25 per
share. Relative to third quarter 2010, third quarter 2011
results were primarily driven by derivative product losses, a
decline in other (loss) income, and a higher provision for income
taxes, partially offset by lower net loss and loss expenses.
As previously announced, on November 8, 2010, Ambac filed for a
voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for
the Southern District of New York and will continue to operate in
the ordinary course of business as "debtor-in-possession" in
accordance with the applicable provisions of the Bankruptcy Code
and the orders of the Bankruptcy Court.
Third Quarter 2011 Summary
Relative to the third quarter of 2010:
Net premiums earned declined $41 million to $102.1 million
Net investment income increased $11.8 million to $81.6
million
Net loss and loss expenses incurred were down $225.6 million,
resulting in a net benefit of $60.2 million
Other (loss) income declined $191.9 million to a loss of $5.0
million
Income on variable interest entities ("VIEs") increased $28.6
million to $55.0 million
Net losses in the financial services segment, primarily
relating to derivative product losses, increased $135.0
million to $211.9 million
Provision for income taxes increased $74.9 million to $75.0
million
Corporate interest and other expense declined $41.8 million
to $1.8 million, primarily as a result of lower interest
expense, as Ambac no longer accrues interest on its debt
listed under Liabilities Subject to Compromise, following its
bankruptcy filing on November 8, 2010
Unrestricted cash, short-term securities and bonds at the
holding company (Ambac Financial Group, Inc.) decreased $5.0
million to $46.3 million
Financial Results
Net Premiums Earned
Net premiums earned for the third quarter of 2011 were $102.1
million, down 29% from $143.1 million earned in the third quarter
of 2010. Net premiums earned include accelerated premiums, which
result from refundings, calls, and other accelerations recognized
during the quarter. Accelerated premiums were $18.8 million in
the third quarter of 2011, down 37% from $30.0 million in the
third quarter 2010. This was primarily driven by the continued
decline in the volume of calls and refundings in the public
finance sector in 2011 relative to the prior year. Normal net
premiums earned, which exclude accelerated premiums, were $83.2
million in the third quarter of 2011, down 26% from $113.1
million in the third quarter of 2010. Normal net premiums earned
for the period have been negatively impacted by the lack of new
business written and the continued runoff of the insured
portfolio.
Net Investment Income
Net investment income for the third quarter of 2011 was $81.6
million, an increase of 17% over $69.8 million earned in the
third quarter of 2010. The increase was primarily attributable
to a higher average portfolio yield and an increase in the size
of the long term invested asset base. The higher average
portfolio yield was achieved through the ongoing re-allocation of
portfolio investments from tax exempt municipals to taxable
securities having higher pre-tax yields and the impact of holding
a greater position in Ambac Assurance guaranteed securities
versus the same period in 2010.
Financial Guarantee Loss Reserves
Loss and loss expenses for the three months ended September 30,
2011 was a net benefit of $60.2 million as compared to a net loss
of $165.4 million for the three month period ending September 30,
2010. Losses for the three months ended September 30, 2011 were
driven by lower estimated losses in the first-lien RMBS and
student loan portfolios, offset by an increase in estimated
losses for the second-lien RMBS portfolio and for certain
structured finance credits.
Loss and loss expenses paid, net of recoveries from all policies,
amounted to a net recovery of $18.2 million during the third
quarter 2011 versus $63.9 million net paid for the same period in
2010. The amount of actual claims paid during each period was
impacted by the payment moratorium imposed on March 24, 2010 by
the court overseeing the Segregated Account rehabilitation.
Claims presented to Ambac Assurance and unpaid during the third
quarter of 2011 amounted to $337.5 million versus $428.3 million
during the same period in 2010. Since the establishment of the
Segregated Account in March 2010, a total of $2,451.2 million of
claims have been presented to Ambac Assurance and remain unpaid
due to the moratorium.
Loss reserves (gross of reinsurance and net of subrogation
recoveries) for all RMBS insurance exposures as of September 30,
2011, were $3,688.6 million, including $2,442.1 million relating
to claims on RMBS exposures that have been presented since March
24, 2010 and unpaid as a result of the claims moratorium. RMBS
reserves as of September 30, 2011 are net of $2,570.2 million of
estimated remediation recoveries. The estimate of remediation
recoveries related to material representation and warranty
breaches is down 0.1% from $2,573.3 million reported as of June
30, 2011. Ambac has initiated and will continue to initiate
lawsuits and other methods to achieve compliance with the
repurchase obligations in the securitization documents with
respect to sponsors who disregard their obligations to
repurchase.
Net Change in Fair Value of Credit Derivatives
The net change in fair value of credit derivatives, which
consists of realized and unrealized gains/(losses) and other
settlements on credit derivatives, was a net gain of $4.5 million
for the third quarter of 2011, down 52% from a net gain of $9.4
million for the third quarter of 2010. The net gain on change in
fair value of credit derivatives for the three months ended
September 30, 2011 resulted primarily from CDS fees earned and
the reversal of unrealized losses associated with terminations,
partially offset by declines in certain reference obligation
prices particularly related to student loan securitizations.
Other (Loss) Income
Other (loss) income for the three months ended September 30, 2011
was a loss of $5.0 million compared to income of $186.9 million
for the three months ended September 30, 2010. The third quarter
2011 loss was primarily attributable to mark-to-market losses
related to Ambac's option to call up to $500 million par of
surplus notes at 20% of par value, and the impact of the movement
in the British Pound and the Euro to U.S. Dollar exchange rates
on premium receivables. Other income in third quarter 2010 was
driven by a net gain of $157.8 million resulting from the
consolidating effect of terminating the reinsurance agreement
between Ambac Assurance and Ambac UK.
Income on Variable Interest Entities
Income on variable interest entities for the three months ended
September 30, 2011 was $55.0 compared to $26.4 million for the
three month period ending September 30, 2010. Included within
income on variable interest entities are gains or losses
attributable to consolidating or deconsolidating VIEs and the
financial results of the VIEs during the period after elimination
of intercompany transactions (generally financial guarantee
contracts). Most VIE assets and liabilities consolidated by
Ambac are carried at fair value with changes included in
earnings. However, the net gains for the three months ended
September 30, 2011 primarily related to a VIE consolidated
effective April 1, 2011, which contains significant intangible
assets, the carrying values of which are amortized through
earnings over time. For the three months ended September 30,
2011, adverse changes in the expected performance of this
transaction resulted in a net gain of $53.1 million in
consolidation, reflecting a decrease in the fair value of the
VIE's liabilities, partially offset by an impairment charge
against its intangible assets. Income for the three months ended
September 30, 2010 reflects an increase in the fair value of VIE
net assets plus net cash receipts by Ambac's insurance
subsidiaries on financial guarantee policies associated with
these VIEs.
Financial Services
The financial services segment consists of the investment
agreement business and the derivative products business, both of
which are in run-off. The derivatives products business has been
positioned to record gains in a rising interest rate environment
in order to provide a hedge against the impact of rising rates on
certain exposures within the financial guarantee segment. For the
current quarter, the financial services segment produced a net
loss of $211.9 million compared to a net loss of $76.9 million
for the third quarter of 2010. Results for both periods
primarily reflect the impact of mark to market losses in the
derivative products portfolio arising from declining interest
rates, partially offset by the impact of Ambac's credit risk on
the fair value of uncollateralized derivative liabilities.
Reorganization Items, Net
For purposes of presenting an entity's financial evolution during
a Chapter 11 reorganization, the financial statements for periods
including and after filing the Chapter 11 petition distinguish
transactions and events that are directly associated with the
reorganization from the ongoing operations of the business.
Reorganization items in the third quarter of 2011 totaled $8.5
million and were primarily related to professional advisory fees.
Provision for Income Taxes
Provision for income tax expense was $75.0 million for the three
months ended September 30, 2011 compared to $0.1 million for the
three month period ending September 30, 2010. This increase
primarily related to the accrual of additional Federal income tax
expense to bring the overall reserve for income taxes in line
with Ambac's intent to settle the IRS Dispute, inclusive of
amounts contributed by both the Company and Ambac Assurance as
contemplated by the Mediation Agreement with the Creditors'
Committee, Ambac Assurance and OCI.
Balance Sheet and Liquidity
Total assets decreased during the third quarter of 2011, from
$27.9 billion at June 30, 2011 to $27.6 billion, primarily due to
a decline in the amount of VIE assets during the current period,
partially offset by an increase in premium receivables.
The fair value of the consolidated non-VIE investment portfolio
decreased from $7.08 billion (amortized cost of $6.6 billion) as
of June 30, 2011 to $7.06 billion (amortized cost of $6.6
billion) as of September 30, 2011.
The financial guarantee non-VIE investment portfolio had a fair
value of $6.2 billion (amortized cost of $5.7 billion) as of
September 30, 2011. The portfolio consists of primarily high
quality municipal and corporate bonds, asset backed securities,
U.S. Agencies, Agency MBS, as well as non-agency MBS, including
Ambac Assurance guaranteed RMBS.
Liabilities subject to compromise totaled approximately $1.7
billion at September 30, 2011. As required by ASC Topic 852, the
amount of Liabilities subject to compromise represents Ambac's
estimate of known or potential pre-petition claims to be
addressed in connection with the Chapter 11 filing. Such claims
are subject to future adjustments potentially resulting from,
among other things, negotiations with creditors, rejection of
executor contracts and orders of the bankruptcy court. As of
September 30, 2011, liabilities subject to compromise consist of
the following:
Accrued interest payable $68,123
Other 17,176
Senior unsecured notes 1,222,189
Directly-issued Subordinated capital securities 400,000
-----------
Consolidated liabilities subject to compromise $1,707,488
Overview of Ambac Assurance Statutory Results
As of September 30, 2011, Ambac Assurance reported statutory
capital and surplus of approximately $273.1 million, down from
$476.4 million as of June 30, 2011. Ambac Assurance's statutory
financial statements include the combined results of Ambac
Assurance's general account and the Segregated Account (formed on
March 24, 2010). Statutory capital and surplus were impacted by
a statutory net loss of $181 million for the three-months ended
September 30, 2011. This net loss was primarily attributable to
an increase in income taxes incurred and impairment losses on
intercompany loans to Ambac Assurance's derivative products
subsidiary.
Ambac Assurance's claims-paying resources amount to approximately
$6.6 billion as of September 30, 2011, down $0.3 billion from
$6.9 billion at June 30, 2011. This excludes Ambac Assurance UK
Limited's claims-paying resources of approximately $1.0 billion.
The decline in claims paying resources was primarily attributable
to the items.
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 filed for a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code in the
Bankruptcy Court. The Company 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 Financial Group, Inc.'s common stock
trades in the over-the-counter market under the ticker symbol
ABKFQ.
Ambac's principal operating subsidiary, Ambac Assurance
Corporation, is a guarantor of public finance and structured
finance obligations.
* * *
Ambac Assurance filed on November 14, 2011, statutory financial
statements as of and for the quarter ended September 30, 2011,
for AAC, its Segregated Account and Everspan Financial Guarantee
Corporation.
Full-text copies of the 3rd Quarter Reports are available for
free at:
* AAC's Quarter Report
http://bankrupt.com/misc/AAC3Q2011Rpt.pdf
* AAC's Segregated Account's Quarter Report
http://bankrupt.com/misc/SegregatedAcct3Q2011Rpt.pdf
* Everspan's Quarter Report
http://bankrupt.com/misc/Everspan3Q2011Rpt.pdf
AFG posted in its Web site, a supplement to the third quarter
2011 results, including tables on key financial data, largest
domestic public finance exposures, largest structured finance
exposures, and largest international finance exposures. A full-
text copy of the supplement is available for free at:
http://bankrupt.com/misc/Ambac_3Q2011Supp.pdf
AFG filed with the U.S. Securities and Exchange Commission on
November 9, 2011, a quarterly report on Form 10-Q for the period
ended September 30, 2011, a copy of which is available for free
at http://ResearchArchives.com/t/s?7753
Ambac Financial Group Inc. and Subsidiaries
Consolidated Balance Sheets
As of September 30, 2011
ASSETS
Investments:
Fixed income securities, at fair value $5,976,941,000
Fixed income securities pledged as collateral,
at fair value 262,032,000
Short-term investments 824,126,000
Other 100,000
-------------------
Total investments 7,063,199,000
Cash and cash equivalents 21,316,000
Restricted cash and cash equivalents 2,500,000
Receivable for securities sold 36,085,000
Investment income due and accrued 41,008,000
Premium receivables 2,103,193,000
Reinsurance recoverable on paid and unpaid losses 154,141,000
Deferred ceded premium 229,451,000
Subrogation recoverable 714,496,000
Deferred acquisition costs 225,429,000
Loans 20,035,000
Derivative assets 205,215,000
Other assets 126,672,000
Variable interest entity assets
Fixed income securities, at fair value 2,106,447,000
Restricted cash and cash equivalents 42,813,000
Investment income due and accrued 1,322,000
Loans 14,255,451,000
Derivative assets -
Intangible assets 254,163,000
Other assets 23,646,000
-------------------
Total assets $27,626,582,000
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Liabilities subject to compromise $1,707,488,000
Unearned premiums 3,520,801,000
Losses and loss expense reserve 6,359,409,000
Ceded premiums payable 120,843,000
Obligations under investment and
payment agreements 556,204,000
Obligations under investment
repurchase agreements 34,040,000
Current taxes 98,532,000
Long-term debt 220,440,000
Accrued interest payable 141,162,000
Derivative liabilities 456,522,000
Other liabilities 107,242,000
Payable for securities purchased 7,481,000
Variable interest entity liabilities:
Accrued interest payable 700,000
Long-term debt 14,638,183,000
Derivative liabilities 1,816,627,000
Other liabilities 21,484,000
-------------------
Total liabilities 29,807,158,000
Stockholders' deficit:
Ambac Financial Group, Inc.
Preferred stock -
Common stock 3,080,000
Additional paid-in capital 2,172,027,000
Accumulated other comprehensive income (loss) 478,218,000
Accumulated deficit (5,076,708,000)
Common stock held in treasury at cost (411,419,000)
-------------------
Total Ambac Financial Group, Inc.
stockholders' deficit (2,834,802,000)
Non-controlling interest 654,226,000
-------------------
Total stockholders' deficit (2,180,576,000)
-------------------
Total liabilities and stockholders' deficit $27,626,582,000
===================
Ambac Financial Group, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended September 30, 2011
REVENUES:
Financial Guarantee:
Net premiums earned $102,055,000
Net investment income 81,588,000
Other-than-temporary impairment losses
Total other-than-temporary impairment losses (17,729,000)
Portion of loss recognized in other
comprehensive income 7,659,000
-------------------
Net other-than-temporary impairment losses
recognized in earnings (10,070,000)
Net realized investment gains 4,722,000
Change in fair value of credit derivatives:
Realized (losses) and gains and other
settlements 3,829,000
Unrealized gains (losses) 676,000
-------------------
Net change in fair value of credit derivatives 4,505,000
Other income (4,963,000)
(Loss) income on variable interest entity
activities 55,008,000
Financial Services:
Investment income 9,039,000
Derivative products (215,774,000)
Other-than-temporary impairment losses:
Total other-than-temporary impairment losses (1,942,000)
Portions of loss recognized in other
comprehensive income 1,125,000
-------------------
Net other-than-temporary impairment
losses recognized in earnings (817,000)
-------------------
Net realized investment gains 362,000
Net mark-to-market losses on non-trading
derivative contracts -
Corporate and Other:
Other income 62,000
Net realized gains -
-------------------
Total revenues before reorganization items 25,717,000
-------------------
EXPENSES:
Financial Guarantee:
Losses and loss expenses (60,238,000)
Underwriting and operating expenses 40,340,000
Interest expense on surplus notes 31,131,000
Financial Services:
Interest from investment and payment agreements 1,943,000
Operating expenses 2,719,000
Corporate and other:
Interest -
Other expenses 1,801,000
-------------------
Total expenses before reorganization items 17,696,000
-------------------
Pre-tax (loss) income from continuing
operations before reorganization items 8,021,000
Reorganization items 8,519,000
-------------------
Pre-tax (loss) income from continuing operations (498,000)
Provision (benefit) for income taxes 75,011,000
-------------------
Net loss 75,509,000
Less: net gain (loss) attributable to
the noncontrolling interest (2,000)
-------------------
Net loss attributable to Ambac
Financial Group, Inc. $75,507,000
===================
Ambac Financial Group Inc. and Subsidiaries
Consolidated Statements of Cash Flow
Nine Months Ended September 30, 2011
(Unaudited)
Cash flows from operating activities:
Net loss attributable to common shareholders ($997,218,000)
Noncontrolling interest in subsidiaries' earnings 45,000
-------------------
Net loss (997,173,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 2,924,000
Amortization of bond premium and discount (134,312,000)
Reorganization items 39,794,000
Share-based compensation (15,459,000)
Current income taxes 75,998,000
Deferred acquisition costs 25,220,000
Unearned premiums, net (451,678,000)
Loss and loss expense, net 1,053,373,000
Ceded premiums payable (20,607,000)
Investments income due and accrued 4,058,000
Premium receivables 319,403,000
Accrued interest payable 79,454,000
Net mark-to-market (gains) losses (6,513,000)
Net realized investment gains (8,125,000)
Other-than-temporary impairment charges 30,178,000
Variable interest entity activities (51,236,000)
Other, net 253,599,000
-------------------
Net cash provided by (used in)
operating activities 198,898,000
-------------------
Cash flows from investing activities:
Proceeds from sales of bonds 350,579,000
Proceeds from matured bonds 513,169,000
Purchases of bonds (955,873,000)
Change in short-term investments 167,441,000
Loans, net 132,000
Change in swap collateral receivable (50,943,000)
Other, net 5,400,000
-------------------
Net cash provided by investing activities 29,905,000
-------------------
Cash flows from financing activities:
Dividends paid - subsidiary shares to
noncontrolling interest -
Proceeds from issuance of investment and
payment agreements 30,000
Payments for investment and payment draws (214,574,000)
Net cash collateral paid/received (2,440,000)
-------------------
Net cash used in financing activities (216,984,000)
-------------------
Net cash flow 11,819,000
-------------------
Cash and cash equivalents at January 1 9,497,000
-------------------
Cash and cash equivalents at September 30 $21,316,000
===================
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: AAC Has $7.99-Bil. in Assets at June 30
--------------------------------------------------------
Ambac Assurance Corporation filed on August 12, 2011, statutory
financial statements as of and for the quarter ended June 30,
2011, for AAC, its Segregated Account and Everspan Financial
Guarantee Corporation.
As of June 30, 2011, AAC reported $7,989,323,816 in total assets,
$7,512,945,247 in total liabilities, and $476,378,569 in equity.
AAC posted a net loss of $472,591,700 for the quarter ended
June 30, 2011.
AAC estimated $512,619,523 in cash, cash equivalents and short
term investments at the beginning of 2011, and $834,370,608 of
cash and cash equivalents at the end of the same period.
Full-text copies of the 2nd Quarter Reports are available for
free at:
* AAC's Quarter Report
http://bankrupt.com/misc/AAC2Q2011Rpt.pdf
* AAC's Segregated Account Quarter Report
http://bankrupt.com/misc/SegregatedAcct2Q2011Rpt.pdf
* Everspan's Quarter Report
http://bankrupt.com/misc/Everspan2Q2011Rpt.pdf
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).
AMERISTAR CASINOS: Moody's Says Gaming Would Be Long-Term Positive
------------------------------------------------------------------
Moody's Investors Service said: The addition of a casino in
Massachusetts to Ameristar Casinos, Inc.'s (B1, stable) existing
portfolio of gaming assets would be a long-term positive for the
company's credit profile, assuming it is awarded a license in the
state.
The principal methodologies used in rating Ameristar Casinos Inc.
were Global Gaming published in December 2009, and 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 Web site.
Ameristar Casinos, Inc. (Ameristar) owns and operates eight
hotel/casinos in seven jurisdictions. The company generates
approximately $1.2 billion of consolidated net revenues.
AMERICAN AIRLINES: Files for Chapter 11 to Cut Labor Costs
----------------------------------------------------------
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection in Manhattan after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
Fort Worth, Texas-based AMR disclosed $24.7 billion in assets and
$29.6 billion in debt as of Sept. 30, 2011, including:
$4.6 billion of secured variable and fixed rate
indebtedness outstanding with maturities through 2023;
$2.0 billion of enhanced equipment trust certificates
-- EETCs -- outstanding with maturities through 2021; and
$1.6 billion in aggregate principal amount of special
facility revenue bonds accounted for as debt by AMR as
of September 30, 2011, with maturities through 2036.
Most of the debt is publicly traded.
Thomas W. Horton, 50, most recently AMR's president, replaced
Gerard Arpey effective on the Petition Date, as chairman and CEO.
Mr. Horton said normal flight schedules will continue on American
and its American Eagle regional unit for now, along with the
airline's frequent-flier program, the company said. A spinoff of
American Eagle, which already had been delayed from this year into
2012, is on hold, Mr. Horton said.
Mr. Arpey, 53, opted to retire after the board asked him to stay,
Mr. Horton said. Mr. Arpey will join Emerald Creek Group LLC, a
private-equity firm founded by former Continental Airlines Inc.
CEO Larry Kellner, on Dec. 1, the firm said in a statement.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
As of Nov. 1, 2011, American Airlines had a fleet of more than 600
aircraft and Eagle had a fleet of approximately 300 aircraft.
American Airlines expects to acquire 460 narrowbody aircraft
beginning during the period 2013-2022. Included in the entire
package of acquisition agreements is $13 billion of committed
financing from the aircraft manufacturers.
AMR employs more than 88,000 people domestically and abroad.
AMR Corp.'s shares of common stock, par value $1, are publicly
traded under the symbol "AMR" on the New York Stock Exchange. As
of Oct. 13, 2011, there were 335,227,024 shares of AMR Corp.
common stock outstanding.
AMR's board of directors determined that a Chapter 11
reorganization is in the best interest of the Company and its
stakeholders. Just as with the Company's major airline
competitors in recent years, the Chapter 11 process enables
American Airlines and American Eagle to continue conducting normal
business operations while they restructure their debt, costs and
other obligations.
AMR said it must address its cost structure, including labor
costs, to enable it to capitalize on the foundational strengths it
has put in place and secure its future.
"[Bankruptcy] was a difficult decision, but it is the necessary
and right path for us to take -- and take now -- to become a more
efficient, financially stronger, and competitive airline," Mr.
Horton said.
AMR has $4.1 billion of unrestricted cash and short-term
investments as of Nov. 25, 2011. The aggregate net book value of
all assets located outside the United States as of Nov. 28, 2011,
is roughly $550 million.
The cash, as well as cash generated from operations, is
anticipated to be more than sufficient to assure that its vendors,
suppliers and other business partners will be paid timely and in
full for goods and services provided during the Chapter 11 process
in accordance with customary terms.
AMR expects that for the 30-day period following the Chapter 11
filing, cash receipts will total $1.85 billion and cash
disbursements will aggregate $2.15 billion. Unpaid obligations
will be $3.1 billion and unpaid receivables will total $1 billion.
American said in court filings that it needed permission to pay
$50 million in claims from critical vendors. According to
Bloomberg News, Harvey Miller, Esq., at Weil, Gotshal & Manges
LLP, said the company will later request approval to pay an
additional $35 million in claims.
At the "first day" hearing Nov. 29, U.S. Bankruptcy Judge Sean
Lane approved American's requests to pay employees, continue its
customer programs, and pay what the company said are vendors that
are critical to maintaining its operations.
The Wall Street Journal reports the bankruptcy filing sent AMR
shares down 84% to 26 cents each in 4 p.m. trading Nov. 29 on the
New York Stock Exchange, capping a 12-month period in which the
company's stock price already had fallen by nearly 80%.
The Journal's Doug Cameron, Mike Spector and Jack Nicas report
that AMR's decision to enter bankruptcy protection surprised some
industry observers but drew praise from bankruptcy experts, who
said troubled companies often wait too long to file. They also
said AMR will likely benefit from the experience of its
competitors in bankruptcy.
WSJ also says the bankruptcy filing could trigger industry
consolidation, with US Airways Group Inc., the product of an
earlier merger, seen by analysts as a potential fit. Any
attempted merger, however, would unleash huge integration issues,
further upset labor groups and face antitrust concerns.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
To receive AMERICAN AIRLINES BANKRUPTCY NEWS, please call or send
e-mail to:
Bankruptcy Creditors' Service, Inc.
572 Fernwood Lane
Fairless Hills, PA 19030
Telephone: (215) 945-7000
Facsimile: (215) 945-7001
E-mail: peter@bankrupt.com
AMERICAN AIRLINES: Case Summary & 50 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: AMR Corporation
4333 Amon Carter Boulevard, MD5675
Fort Worth, TX 76155
http://www.aa.com/
Bankruptcy Case No.: 11-15463
Eighteen Debtor-affiliates filing separate Chapter 11 petitions:
Case No. Debtor Entity
-------- -------------
11-15464 American Airlines, Inc.
11-15465 AMR Eagle Holding Corporation
11-15466 Americas Ground Services, Inc.
11-15467 PMA Investment Subsidiary, Inc.
11-15468 SC Investment, Inc.
11-15469 American Eagle Airlines, Inc.
11-15470 Executive Airlines, Inc.
11-15471 Executive Ground Services, Inc.
11-15472 Eagle Aviation Services, Inc.
11-15473 Admirals Club, Inc.
11-15474 Business Express Airlines, Inc.
11-15475 Reno Air, Inc.
11-15476 AA Real Estate Holding GP LLC
11-15477 AA Real Estate Holding L.P.
11-15478 American Airlines Marketing Services LLC
11-15479 American Airlines Vacations LLC
11-15480 American Aviation Supply LLC
11-15481 American Airlines IP Licensing Holding, LLC
Chapter 11 Petition Date: Nov. 29, 2011
Bankruptcy Court: U.S. Bankruptcy Court
Southern District of New York
Bankruptcy Judge: Honorable Sean H. Lane
Debtors' Counsel: Stephen Karotkin, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Telephone: (212) 310-8350
Facsimile: (212) 310-8007
E-mail: stephen.karotkin@weil.com
Debtors' Special
Counsel: PAUL HASTINGS LLP
875 15th Street, N.W.
Washington, DC 20005
- and -
DEBEVOISE & PLIMPTON LLP
919 Third Avenue
New York, NY 10022
- and -
GROOM LAW GROUP, CHARTERED
1701 Pennsylvania Avenue, N.W.
Washington, DC 20006
Debtors'
Financial
Advisors: ROTHSCHILD INC.
1251 Avenue of the Americas, 51st Floor
New York, NY 10020
Debtors'
Claims Agent: GARDEN CITY GROUP INC.
Total Assets: $24,719,000,000 as of Sept. 30, 2011
Total Liabilities: $29,552,000,000 as of Sept. 30, 2011.
The petition was signed by Kenneth W. Wimberly, AMR Corporate
Secretary.
A. List of Holders of More Than 5% of AMR Securities:
There are 335,227,024 shares of AMR Corporation common stock
outstanding as of Oct. 13, 2011. Entities who own, control, or
hold, with power to vote, 5% or more of the voting securities of
the Debtor are:
PRIMECAP Management Company 12.4%
Capital Global Research Investors 9.3%
Capital World Investors 8.4%
Asia Mountain Investment Co., Ltd.
and certain affiliates 7.3%
B. Consolidated List of the Debtors' 50 Largest Unsecured
Creditors:
Entity Nature of Claim Amount
------ --------------- ------
WILMINGTON TRUST AMR CORPORATION $460,000,000
MICHAEL OLLER 6.25% CONVERTIBLE
mikeoller@wilmingtontrust.com SENIOR NOTES DUE
RODNEY SQUARE NORTH, 1100 2014
NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: 302-651-1000
Fax: 302-636-4145
MANUFACTURERS AND TRADERS ALLIANCEAIRPORT $357,130,000
TRUST COMPANY AUTHORITY, INC.
FARRAH T. WELSH SPECIAL FACILITIES
fwelsh@mtb.com REVENUE
25 SOUTH CHARLES STREET REFUNDING BONDS
11TH FL 5.25% DUE 2029
BALTIMORE, MD 21201
Tel: 410-244-3712
Fax: 410-244-4236
MANUFACTURERS AND TRADERS DALLAS FORT $199,160,000
TRUST COMPANY WORTH FACILITIES
FARRAH T. WELSH IMPROVEMENT
fwelsh@mtb.com CORP. BONDS
25 SOUTH CHARLES STREET 6.375% DUE 2035
11TH FL
BALTIMORE, MD 21201
Tel: 410-244-3712
Fax: 410-244-4236
WILMINGTON TRUST AMR PUBLIC $150,000,000
MICHAEL OLLER INCOME NOTES
mikeoller@wilmingtontrust.com 7.875% DUE 2039
RODNEY SQUARE NORTH, 1100
NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: 302-651-1000
Fax: 302-636-4145
MANUFACTURERS AND TRADERS DALLAS FORT $131,735,000
TRUST COMPANY WORTH FACILITIES
FARRAH T. WELSH IMPROVEMENT
fwelsh@mtb.com CORP. REFUNDING
25 SOUTH CHARLES ST, 11TH FL BONDS SERIES
BALTIMORE, MD 21201 5.50% DUE 2030
Tel: 410-244-3712
Fax: 410-244-4236
MANUFACTURERS AND TRADERS DALLAS FORT $126,240,000
TRUST COMPANY WORTH FACILITIES
FARRAH T. WELSH IMPROVEMENT
fwelsh@mtb.com CORP. SERIES 1995
25 SOUTH CHARLES ST, 11TH FL 6.00% DUE 2014
BALTIMORE, MD 21201
Tel: 410-244-3712
Fax: 410-244-4236
LAW DEBENTURE TRUST COMPANY PUERTO RICO $115,600,000
OF NEW YORK PORTS AUTHORITY
GREGG WEISSMAN SPECIAL FACILITIES
400 MADISON AVENUE, 4TH FLOOR REVENUE BONDS,
NEW YORK, NY 10017 SERIES A 6.25% DUE
Tel: 212-750-6474 2026
Fax: 212-750-1361
THE BANK OF NEW YORK MELLON CHICAGO O'HARE $108,675,000
DARRYL POMYKALA INTERNATIONAL
darryl.l.pomykala@bnymellon.com AIRPORT SPECIAL
1 WALL ST. FACILITY REVENUE
NEW YORK, NY 10286 REFUNDING BONDS,
Tel: 212-495-1784 SERIES 2007 5.50%
Fax: 212-635-1799 DUE 2024
MANUFACTURERS AND TRADERS DALLAS FORT $103,000,000
TRUST COMPANY WORTH FACILITIES
FARRAH T. WELSH IMPROVEMENT
fwelsh@mtb.com CORP. REFUNDING
25 SOUTH CHARLES ST, 11TH FL BONDS SERIES 2000
BALTIMORE, MD 21201 A3 9.125% DUE 2029
Tel: 410-244-3712
Fax: 410-244-4236
WILMINGTON TRUST AMR DEBENTURES $75,759,000
MICHAEL OLLER 9.00% DUE 2012
mikeoller@wilmingtontrust.com
RODNEY SQUARE NORTH, 1100
NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: 302-651-1000
Fax: 302-636-4145
MANUFACTURERS AND TRADERS DALLAS FORT $65,000,000
TRUST COMPANY WORTH FACILITIES
FARRAH T. WELSH IMPROVEMENT
fwelsh@mtb.com CORP. REFUNDING
25 SOUTH CHARLES ST, 11TH FL BONDS SERIES 2000
BALTIMORE, MD 21201 A2 9.00% DUE 2015
Tel: 410-244-3712
Fax: 410-244-4236
THE BANK OF NEW YORK MELLON AMR DEBENTURES $60,943,156
MARY MISELIS 9.00% DUE 2016
mary.miselis@bnymellon.com
101 BARCLAY STREET
NEW YORK, NY 10286
Tel: 212-815-4812
Fax: 212-635-1799
MANUFACTURERS AND TRADERS ALLIANCEAIRPORT $49,525,000
TRUST COMPANY AUTHORITY, INC.
FARRAH T. WELSH SPECIAL FACILITIES
fwelsh@mtb.com REVENUE
25 SOUTH CHARLES ST, 11TH FL REFUNDING BONDS,
BALTIMORE, MD 21201 SERIES 1991 7.00%
Tel: 410-244-3712 DUE 2011
Fax: 410-244-4236
LAW DEBENTURE TRUST COMPANY PUERTO RICO $39,705,000
OF NEW YORK PORTS AUTHORITY
GREGG WEISSMAN SPECIAL FACILITIES
400 MADISON AVENUE, 4TH FLOOR REVENUE BONDS,
NEW YORK, NY 10017 1993 SERIES A 6.30%
Tel: 212-750-6474 DUE 2023
Fax: 212-750-1361
U.S. BANK, N.A. PUERTO RICO $36,160,000
SUSAN MERKER INDUSTRIAL,
susan.merker@usbank.com MEDICAL, HIGHER
225 ASYLUM STREET, 23RD FL EDUCATION AND
HARTFORD, CT ENVIRONMENTAL
Tel: 860-241-6815 POLLUTION
Fax: 860-241-6897 CONTROL
FACILITIES
FINANCING
AUTHORITY, SERIES
1985 6.45% DUE 2025
WILMINGTON TRUST AMR DEBENTURES $32,162,000
MICHAEL OLLER 10.00% DUE 2021
mikeoller@wilmingtontrust.com
RODNEY SQUARE NORTH, 1100
NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: 302-651-1000
Fax: 302-636-4145
HEWLETT PACKARD TRADE DEBT $30,862,960
MARGARET WHITMAN
3000 HANOVER ST.
PALO ALTO, CA 94304
Tel: 650-857-1501
Fax: 650-857-5518
MIAMI DADE COUNTY CLAIMS $25,000,000
COUNTY CHAIR ADMINISTRATION
111 NW 1ST STREET, SUITE 220 AGREEMENT
MIAMI, FL 33136
Tel: 305-375-5511
Fax: 305-375-5883
ROLLS-ROYCE INC ROLLS-ROYCE INC TRADE DEBT $27,000,000
JAMES M. GUYETTE
1875 EXPLORER STREET, SUITE 200
RESTON, VA 20190
Tel: 703-834-1700
Fax: 703-709-6086
THE BANK OF NEW YORK MELLON NEW JERSEY $17,855,000
TAMMY BAUMGARTEN ECONOMIC
tammy.baumgarten@bnymellon.com DEVELOPMENT
525 WILLIAM PENN PLACE, 38TH AUTHORITY
FLOOR ECONOMIC
PITTSBURGH, PA 15259 DEVELOPMENT
Tel: 412-234-4100 BONDS 7.10% DUE
2031
THE BANK OF NEW YORK MELLON AMR DEBENTURES $17,525,500
MARY MISELIS 10.20% DUE 2020
mary.miselis@bnymellon.com
101 BARCLAY STREET
NEW YORK, NY 10286
Tel: 212-815-4812
Fax: 212-635-1799
WILMINGTON TRUST AMR DEBENTURES $15,700,000
MICHAEL OLLER 9.75% DUE 2021
mikeoller@wilmingtontrust.com
RODNEY SQUARE NORTH, 1100
NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: 302-651-1000
Fax: 302-636-4145
BOEING COMMERCIAL AIRLINES TRADE DEBT $15,305,751
JIM ALBAUGH
100 NORTH RIVERSIDE
CHICAGO, IL 98124
Tel: 312-544-2000
Fax: 312-544-2082
THE BANK OF NEW YORK MELLON AMR DEBENTURES $7,889,000
MARY MISELIS 9.88% DUE 2020
mary.miselis@bnymellon.com
101 BARCLAY STREET
NEW YORK, NY 10286
Tel: 212-815-4812
Fax: 212-635-1799
WILMINGTON TRUST AMR MEDIUM TERM $7,701,000
MICHAEL OLLER NOTES, SERIES C
mikeoller@wilmingtontrust.com 9.20% DUE 2012
RODNEY SQUARE NORTH, 1100
NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: 302-651-1000
Fax: 302-636-4145
HONEYWELL HONEYWELL TRADE DEBT $7,678,974
DAVID M. COTE
101 COLUMBIA ROAD, MAILSTOP
M6/LM
MORRISTOWN , NJ 07962
Tel: 973-455-2114
Fax: 973-455-4807
DFW INTERNATIONAL AIRPORT TRADE DEBT $7,296,370
JEFFREY P. FEGAN
P O DRAWER 619428
DFW AIRPORT, TX 75261-9428
Tel: 972-973-5200
Fax: 972-973-5751
MANUFACTURERS AND TRADERS DALLAS FORT $7,110,000
TRUST COMPANY WORTH FACILITIES
FARRAH T. WELSH IMPROVEMENT
fwelsh@mtb.com CORP. SERIES 2002
25 SOUTH CHARLES ST, 11TH FL 8.25% DUE 2036
BALTIMORE, MD 21201
Tel: 410-244-3712
Fax: 410-244-4236
SKY CHEFS TRADE DEBT $7,032,964
SONDRA LEHMAN
6200 LONGHORN RD
IRVING, TEXAS 75063
Tel: 972-793-9000
Fax: 972-793-9738
ALLEGIS GROUP SERVICE TRADE DEBT $6,930,422
INCORPORATED
JIM DAVIS
7301 PARKWAY DRIVE
HANOVER, MD 21076
Tel: 410-579-3000
Fax: 410-540-7556
CHROMALLOY TRADE DEBT $5,648,368
ARMAND LAUZON
200 PARK AVE
NEW YORK, NY 10166
Tel: 212-692-2087
Fax: 212-692-2645
CITGO PETROLEUM CORPORATION TRADE DEBT $5,561,378
ALEJANDRO GRANADO
agranado@citgo.com
1293 ELDRIDGE PARKWAY
HOUSTON, TEXAS 77077-1670
Tel: 832-486-4000
Fax: 713-570-5309
WILMINGTON TRUST AMR DEBENTURES $5,065,000
MICHAEL OLLER 9.80% DUE 2021
mikeoller@wilmingtontrust.com
RODNEY SQUARE NORTH, 1100
NORTH MARKET STREET
WILMINGTON, DE 19890
Tel: 302-651-1000
Fax: 302-636-4145
FLINT HILLS RESOURCES, LP TRADE DEBT $4,318,839
BRADLEY RAZOOK
brad.razook@fhr.com
1401 ELM STREET, 5TH FLOOR
DALLAS, TX 75284-0569
Tel: 316-828-3477
Fax: 316-828-8566
AVIALL DISTRIBUTION SERVICES TRADE DEBT $4,028,277
DAN KOMNENOVICH
2750 REGENT BLVD
DFW AIRPORT, TX 75261
Tel: 972-586-1000
Fax: 972-586-1361
WORLD FUEL SERVICES TRADE DEBT $3,886,383
PAUL H. STEBBINS
pstebbins@wfscorp.com
9800 NW. 41ST, SUITE 400
MIAMI, FL 33178
Tel: 305-428-8000
Fax: 305-392-5600
MIAMI DADE COUNTY AVIATION TRADE DEBT $3,735,216
DEPT
JOE A. MARTINEZ
4200 NW 36TH ST
MIAMI, FL 33142
Tel: 305-876-0939
Fax: 305-876-0948
THE BANK OF NEW YORK MELLON AMR MEDIUM TERM $3,725,000
MARY MISELIS NOTES, SERIES B
mary.miselis@bnymellon.com 10.55% DUE 2021
101 BARCLAY STREET
NEW YORK, NY 10286
Tel: 212-815-4812
Fax: 212-635-1799
CITY OF CHICAGO TRADE DEBT $3,481,770
RUFUS WILLIAMS
333 SOUTH STATE STREET
CHICAGO, IL 60604-3976
Tel: 773-686-2200
Fax: 312-674-1915
ALLIED AVIATION TRADE DEBT $3,422,995
ROBERT L ROSE - PRESIDENT
462 7TH AVENUE, 17TH FL
NEW YORK, NY 10018
Tel: 941-312-0303
Fax: 941-312-2484
MORGAN STANLEY CAPITAL GROUP TRADE DEBT $3,322,781
STEVE KNOX
steven.knox@morganstanley.com
2000 WESTCHESTER AVENUE
PURCHASE, NY 10577
Tel: 212-761-4000
Fax: 914-225-9301
PETROBRAS DISTRIBUIDORA SA TRADE DEBT $3,013,278
CLAUDIO DISSENHA PORTES
RUA GENERAL CANABARRO, 500 - 11
ANDAR MARACANA
RIO DE JANEIRO - CEP 22271-900
Tel: 55 21 2354 4479
Fax: 55 21-3876-4990
BCD TRAVEL USA LLC TRADE DEBT $2,744,263
JOOP DRECHSEL
ceo@bcdtravel.com
SIX CONCOURSE PARKWAY
NORTHEAST
ATLANTA, GA 30328
Tel: 678-441-5200
Fax: 404-846-3833
AIR TOTAL INTERNATIONAL TRADE DEBT $2,712,890
THIERRY DE FEYDEAU
thierry.de-feydeau@total.com
LA DEFENSE CEDEX
PARIS, FRANCE 92907
Tel: 33 1 41 35 94 91
Fax: 33 1 41 35 72 21
ROCKWELL INTERNATIONAL TRADE DEBT $2,693,404
CLAYTON M. JONES
400 COLLINS ROAD NE
CEDAR RAPIDS, IA 52498
Tel: 319-295-1000
Fax: 319-295-1523
ZODIAC, INC. TRADE DEBT $2,688,513
OLIVIER ZARROUATI
ozarrouari@zodiac.com
ZODIAC - 2, RUE MAURICE MALLET
92130 ISSY-LES-MOULINCAUX -
FRANCE
Tel: 33 (0) 1041023022060
Fax: 33 (0) 1 41 23 23 10
THE BANK OF NEW YORK MELLON AMR MEDIUM TERM $2,365,000
MARY MISELIS NOTES, SERIES B
mary.miselis@bnymellon.com 10.29% DUE 2021
101 BARCLAY STREET
NEW YORK, NY 10286
Tel: 212-815-4812
Fax: 212-635-1799
CARLSON WAGONLIT TRAVEL TRADE DEBT $2,510,485
DOUGLAS ANDERSON
701 CARLSON WAY, MAIL STOP 82
MINNEAPOLIS, MN 55305
Tel: 800-213-7295
Fax: 763-212-2409
WEBER AIRCRAFT INCORPORATED TRADE DEBT $2,226,056
JEFF JOHNSTON
jeff.johnston@zodiacaerospace.com
2000 WEBER DR.
GAINESVILLE, TX 76240
Tel: 940-668-4187
Fax: 940-668-4195
EQUILON ENTERPRISES LLC PREPAID FUEL $2,167,973
PETRA DREYER-DECHER SUPPLIERS
petra.dreyerdecher@shell.com
DEUTSCHLAND OIL GMBH DIA/2
SUHRENKAMP 71-77 D-22284
HAMBURG
Tel: 49-40-694-64-367
Fax: 49-40-671-03-897
AMERICAN AIRLINES: Says It's Business As Usual While in Ch. 11
--------------------------------------------------------------
MR Corporation, the parent company of American Airlines, Inc. and
AMR Eagle Holding Corporation, disclosed that in order to achieve
a cost and debt structure that is industry competitive and thereby
assure its long-term viability and ability to continue delivering
a world-class travel experience for its customers, the Company and
certain of its U.S.-based subsidiaries (including American and
American Eagle), filed voluntary petitions for Chapter 11
reorganization in the U.S. Bankruptcy Court for the Southern
District of New York.
AMR's Board of Directors determined that a Chapter 11
reorganization is in the best interest of the Company and its
stakeholders. Just as with the Company's major airline
competitors in recent years, the Chapter 11 process enables
American Airlines and American Eagle to continue conducting normal
business operations while they restructure their debt, costs and
other obligations.
American Airlines and American Eagle are operating normal flight
schedules today, and their reservations, customer service,
AAdvantage(R) program, Admirals Clubs and all other operations are
conducting business as usual. Likewise, throughout the Chapter 11
process, American and American Eagle expect to continue to:
-- provide safe and reliable service;
-- fly normal schedules;
-- honor tickets and reservations, and make exchanges and refunds
as usual;
-- fully maintain AAdvantage frequent flyer and other customer
service programs, and ensure all AAdvantage miles and elites
status earned by members remain secure and intact;
-- provide Admirals Club access and similar amenities to members
and eligible customers;
-- remain an integral member of the oneworld(R) alliance, of which
American is a founding member, and continue its codeshare
partnerships;
-- provide employee wages, healthcare coverage, vacation, and \
other benefits, without interruption; and
-- pay suppliers for goods and services received during the
reorganization process.
These filings have no direct legal impact on American's operations
outside the United States.
Thomas W. Horton, Chairman, Chief Executive Officer and President
of AMR and American Airlines, said, "This was a difficult
decision, but it is the necessary and right path for us to take -
and take now - to become a more efficient, financially stronger,
and competitive airline.
"We have met our challenges head on, taking all possible action to
secure our long-term position. In recent years, even as the
airline industry faced unprecedented challenges, American
strengthened our domestic and global network; fortified our
alliances with the best partners around the world; launched a
transformational fleet deal that will give American the youngest
and most efficient fleet in the industry; and invested in our
product, service and technology to build a world class customer
experience.
"But as we have made clear with increasing urgency in recent
weeks, we must address our cost structure, including labor costs,
to enable us to capitalize on these foundational strengths and
secure our future. Our very substantial cost disadvantage
compared to our larger competitors, all of which restructured
their costs and debt through Chapter 11, has become increasingly
untenable given the accelerating impact of global economic
uncertainty and resulting revenue instability, volatile and rising
fuel prices, and intensifying competitive challenges.
"Our Board decided that it was necessary to take this step now to
restore the Company's profitability, operating flexibility, and
financial strength. We are committed to working as quickly and
efficiently as possible to appropriately restructure American so
that it can emerge from Chapter 11 well-positioned to assure the
Company's long term viability and its ability to compete
effectively in the marketplace," Horton stated.
Horton continued, "Throughout the restructuring process, as
always, our customers remain our top priority and they can
continue to depend on us for the safe, reliable travel and high
quality service they know and expect from us. We intend to
maintain a strong presence in domestic and international markets,
including our cornerstones in Dallas/Fort Worth, Chicago, New
York, Miami and Los Angeles. As we and all airlines routinely do,
we will continue to evaluate our operations and service, assuring
that our network is as efficient and productive as possible.
"Achieving the competitive cost structure we need remains a key
imperative in this process and, as one part of that, we plan to
initiate further negotiations with all of our unions to reduce our
labor costs to competitive levels."
"American Airlines has a strong, proud history and we will have a
successful future. Working through this difficult, but necessary
action and process, I am confident we will succeed in enhancing
our reputation as a global leader known for excellence and
innovation, a travel partner customers seek out, and a carrier
that serves communities throughout the world," Mr. Horton
concluded.
The Company has approximately $4.1 billion in unrestricted cash
and short-term investments. This cash, as well as cash generated
from operations, is anticipated to be more than sufficient to
assure that its vendors, suppliers and other business partners
will be paid timely and in full for goods and services provided
during the Chapter 11 process in accordance with customary terms.
Because of the Company's current cash position, the need for
debtor-in-possession financing is neither considered necessary nor
anticipated.
American is filing motions with the Court seeking interim relief
that will ensure the Company's continued ability to conduct normal
operations, including the ability to:
-- provide employee wages, healthcare coverage, vacation, and
other benefits without interruption;
-- honor pre-petition obligations to customers and continue
customer programs including American's AAdvantage frequent
flyer program;
-- pay for fuel under existing fuel supply contracts, and honor
existing fuel supply, distribution and storage agreements; and
-- assume and honor contracts relating to interline agreements
with other airlines.
AMR's lead counsel is Weil, Gotshal & Manges LLP and its financial
advisor is Rothschild, Inc.
AMR will be filing monthly operating reports with the Bankruptcy
Court and also plans to post these monthly operating reports on
the Investor Relations section of AA.com. The company will
continue to file quarterly and annual reports with the Securities
and Exchange Commission, which will also be available in the
Investor Relations section of AA.com.
About American Airlines
American Airlines, American Eagle and the AmericanConnection(R)
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
About AMR Corporation
Headquartered in Fort Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company reported a net loss of $884 million on $18.02
billion of total operating revenues for the nine months ended
Sept. 30, 2011. AMR recorded a net loss of $471 million in the
year 2010, a net loss of $1.5 billion in 2009, and a net loss of
$2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
AMERICAN AIRLINES: G. Arpey Resigns as CEO on Day of Bankr. Filing
------------------------------------------------------------------
The Board of Directors of AMR Corporation named Thomas W. Horton
chairman and chief executive officer of the Company, succeeding
Gerard Arpey, who informed the Board of his decision to retire.
Horton will also succeed Arpey as chairman and chief executive
officer of American. Mr. Horton will continue to serve as
President of AMR and American.
". . . . we entered a new phase in the evolution of this great
company with a talented and experienced new leader, Tom Horton,
succeeding Gerard Arpey, who skillfully led our company through
some of its most challenging times," said Armando M. Codina, lead
independent director of AMR. "With more than 22 years at
American, Tom is ideally suited to guide the company through this
next important period. Tom's experience in a different company
and industry gives him a unique blend of experience and
objectivity that will serve the company well as we work through
this process to achieve a competitive cost structure. The Board
has great confidence that, together, Tom and the industry's best
workforce and management team will reaffirm American's position of
pride and leadership among global airlines.
"For 30 years Gerard Arpey has given his all to this company,
especially during the last decade," Mr. Codina continued. "Gerard
is a person of exceptional integrity, intelligence and commitment,
and he helped our company to achieve amazing things against
sometimes staggering odds. Although we had asked that he continue
to lead American, we understand and respect his decision to retire
and entrust the company he loves to a new leader for a new time.
This Board will always be grateful for Gerard's unwavering
commitment to what is best for the company."
"It is a privilege and an honor to lead this company and I intend
to do everything in my power to help restore its position of
leadership in the global airline industry," said Mr. Horton.
"This is a difficult business in the best of times, and I cannot
think of anyone I would rather have worked with or had as a friend
for over two decades than Gerard Arpey. He is not only a great
business leader; he is also a man of honor. With characteristic
selflessness, he decided it was time for a new leader to take the
company forward and I am grateful for his - and our Board's -
confidence. I know we can all count on Gerard's friendship and
encouragement as we work to reaffirm American's place among the
world's premier airlines."
"The process launched will no doubt require far-ranging and
sometimes difficult change, but it represents an opportunity to
rebuild American in a way that assures its ability to compete in a
changed world," Mr. Arpey said. "I appreciate the Board's
confidence in me, but I also believe that executing on this plan
requires a new leader for a new time. That is why I informed the
Board of my decision to retire and, with my enthusiastic support,
the Board decided to appoint Tom as CEO. It has been an honor to
serve this company alongside the men and women of American
Airlines who have met challenge after challenge with perseverance,
skill, determination, and grace. I know they will continue to do
so."
Thomas W. Horton Background
Thomas W. Horton was named as Chairman and Chief Executive Officer
AMR and American Airlines in November 2011. He was named
President of AMR and American in July 2010. Previously, Horton
served as Executive Vice President - Finance and Planning and
Chief Financial Officer of AMR and American. He was named to that
position in March 2006 upon returning to American from AT&T Corp.,
where he had been Vice Chairman and Chief Financial Officer.
Mr. Horton initially joined AMR in 1985 and held a range of senior
financial positions with AMR, including Vice President and
Controller. From 1998 to 2000, he was vice president responsible
for the airline's Europe business, based in London.
In January 2000, Mr. Horton became Senior Vice President and Chief
Financial Officer of AMR.
In 2002, Mr. Horton joined AT&T, where he served first as Chief
Financial Officer and then as Vice Chairman and CFO. In 2005,
Horton led the evaluation of strategic alternatives, ultimately
leading to the combination with SBC, which formed the new AT&T.
Mr. Horton holds an MBA degree from the Cox School of Business at
Southern Methodist University and graduated with a BBA degree,
magna cum laude, from Baylor University. Mr. Horton serves on the
Board of Directors of Qualcomm, Inc., a leading developer and
innovator of advanced wireless technologies and data solutions.
Mr. Horton also serves on the Executive Board of the Cox School of
Business at SMU.
About American Airlines
American Airlines, American Eagle and the AmericanConnection(R)
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
About AMR Corporation
Headquartered in Fort Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company reported a net loss of $884 million on $18.02
billion of total operating revenues for the nine months ended
Sept. 30, 2011. AMR recorded a net loss of $471 million in the
year 2010, a net loss of $1.5 billion in 2009, and a net loss of
$2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
AMERICAN AIRLINES: PBGC Says $1-Bil. Would Be Lost if Plan Ended
----------------------------------------------------------------
Pension Benefit Guaranty Corporation Director Josh Gotbaum
released this statement on the Bankruptcy Filing of AMR Corp.:
". . . . American Airlines' parent company filed for bankruptcy.
When this happens employees and retirees worry ? and they should.
In past bankruptcies, workers and retirees have lost their
healthcare and seen their pensions cut. Based on our estimates
American Airlines employees could lose a billion dollars in
pension benefits if American terminates their plans.
"This is true even if PBGC becomes responsible for those plans,
because Congress has limited the size of the pensions we can pay.
Unfortunately, when the agency assumed airline plans in the past,
many people's pensions were cut, in some cases dramatically.
That's why PBGC always tries first to preserve plans, even after
companies enter bankruptcy. As we did with Visteon, and with some
plans at Delta and Northwest Airlines, we will encourage American
to fix its financial problems and still keep its pension plans."
American Airlines sponsors four traditional pension plans that
cover almost 130,000 participants. At present, the plans
collectively had about $8.3 billion in assets to cover about $18.5
billion in benefits. If American Airlines were to end their
plans, the agency would be responsible for paying about $17
billion in benefits; about $1 billion in benefits would be lost.
A termination would also weaken the financial condition of PBGC,
which has a record $26 billion deficit as a result of failed plans
the agency has already assumed.
In cases where plans cannot be saved, PBGC steps in and pays
benefits. Currently, the agency is responsible for about 1.5
million people in more than 4,300 failed plans. Each month, on
average, PBGC pays about $460 million to more than 870,000
retirees and is responsible for future payments to 628,000 people
who haven't retired.
About PBGC
PBGC protects the pension benefits of 44 million Americans in
27,500 private-sector pension plans. The agency is directly
responsible for paying the benefits of more than 1.5 million
people in failed pension plans. PBGC receives no taxpayer dollars
and never has. Its operations are financed by insurance premiums
and with assets and recoveries from failed plans.
About AMR Corporation
Headquartered in Fort Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company reported a net loss of $884 million on $18.02
billion of total operating revenues for the nine months ended
Sept. 30, 2011. AMR recorded a net loss of $471 million in the
year 2010, a net loss of $1.5 billion in 2009, and a net loss of
$2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
AMERICAN AIRLINES: Filing to Have Negligible Impact to AAR
----------------------------------------------------------
In response to investor inquiries, AAR CORP., a leading
independent provider of products and services to the commercial
aviation and government and defense industries, disclosed that it
expects negligible financial impact as a result of the Chapter 11
bankruptcy filing of American Airlines and its parent company, AMR
Corp.
The Company's aggregate accounts receivable exposure to American
Airlines is less than $500,000 and current sales to American
Airlines account for less than one half of one percent of the
Company's annual sales.
AAR is a leading provider of products and value-added services to
the worldwide aerospace and government and defense industries.
With facilities and sales locations around the world, AAR uses its
close-to-the-customer business model to serve customers through
four operating segments: Aviation Supply Chain; Maintenance,
Repair and Overhaul; Structures and Systems; and Government and
Defense Services.
About American Airlines
American Airlines, American Eagle and the AmericanConnection(R)
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
About AMR Corporation
Headquartered in Fort Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company reported a net loss of $884 million on $18.02
billion of total operating revenues for the nine months ended
Sept. 30, 2011. AMR recorded a net loss of $471 million in the
year 2010, a net loss of $1.5 billion in 2009, and a net loss of
$2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
AMR CORP: Flyers Rights Notes of Some Risks
-------------------------------------------
FlyersRights.org said in a statement that AMR Corp, American
Airlines' parent corporation, said it was seeking chapter 11
bankruptcy protection due to significant losses over the last few
years, leaving many passengers to ask what protections they have
in the event American Airlines fails.
-- There is risk that tickets will not be honored by AA should
their restructuring fail.
-- Ticket holders are unsecured creditors, last on the list of
creditors, so if AA shuts their doors there will be little to
NO relief for affected ticket holders.
-- Reciprocity rules, under which airlines were required to honor
other airlines' tickets in cases such as this, expired in 2007.
Ticket holders will be left holding the bag if AA does fall.
-- Some airlines may have insurance to guard against passenger
loss in this situation, but it is not known if American
Airlines has insurance that would cover the kind of volume that
AA would have to cover if they fail entirely.
FlyersRights.org is the largest non-profit airline passenger
rights organization in the world with 50k members.
About American Airlines
American Airlines, American Eagle and the AmericanConnection(R)
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
About AMR Corporation
Headquartered in Fort Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company reported a net loss of $884 million on $18.02
billion of total operating revenues for the nine months ended
Sept. 30, 2011. AMR recorded a net loss of $471 million in the
year 2010, a net loss of $1.5 billion in 2009, and a net loss of
$2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
AMERICAN AIRLINES: AFA Union to Protect American Eagle Attendants
-----------------------------------------------------------------
The Association of Flight Attendants-CWA (AFA) International
President Veda Shook issued this statement after AMR Corp, the
parent company of American Eagle and American Airlines, filed for
Chapter 11 bankruptcy reorganization:
"As details emerge regarding the restructuring of American Eagle
and American Airlines, AFA is prepared to represent the best
interests of the American Eagle Flight Attendants. The AFA
leadership at American Eagle is fully engaged in responding to the
bankruptcy filing and, along with our financial and legal
advisors, will monitor developments closely. We also are
committed to working closely with the Association of Professional
Flight Attendants, coordinating efforts as we protect our Flight
Attendant careers.
"AFA will continue to defend the jobs, pay and benefits for the
over 1,500 Flight Attendants at American Eagle. We are committed
to protecting American Eagle Flight Attendants, ensuring the long-
term success of the airline and working swiftly through the
bankruptcy process with as little disruption as possible. The
filing does not change pay, benefits or working conditions for
Flight Attendants as their contract remains intact.
"Flight Attendants will continue our work as the safety
professionals we are proud to be. We will work closely with all
of our fellow front-line workers and their unions throughout the
bankruptcy. As members of AFA, American Eagle Flight Attendants
remain proud of the contributions they make daily to the airline.
Chapter 11 is not an excuse to lay failed business decisions on
the backs of the hard-working Flight Attendants. Pure and simple:
Flight Attendants and other front-line workers are the airline's
greatest asset and they should be recognized and respected as
such.
"AFA will ensure Flight Attendants play an integral role in the
reshaping and rebuilding of American Eagle. AFA and our team of
bankruptcy experts will work tirelessly to see that creative
solutions are utilized throughout this process. We know -- and
management knows -- what happens when a carrier fights with its
workers in bankruptcy. The key to successful bankruptcy
reorganization is commitment to working together toward a strong
future.
"AFA has vast experience in restructuring and we have been
successful in preserving our profession along the way. With AFA's
legal and collective bargaining experience, American Eagle Flight
Attendants have industry-leading resources at their disposal."
The Association of Flight Attendants is the world's largest Flight
Attendant union. Focused 100 percent on Flight Attendant issues,
AFA has been the leader in advancing the Flight Attendant
profession for over 65 years. Serving as the voice for Flight
Attendants in the workplace, in the aviation industry, in the
media and on Capitol Hill, AFA has transformed the Flight
Attendant profession by raising wages, benefits and working
conditions. Nearly 60,000 Flight Attendants at 24 airlines come
together to form AFA, part of the 700,000-member strong
Communications Workers of America (CWA), AFL-CIO.
About American Airlines
American Airlines, American Eagle and the AmericanConnection(R)
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
About AMR Corporation
Headquartered in Fort Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. As of Dec. 31, 2009, American provided scheduled jet
service to approximately 160 destinations throughout North
America, the Caribbean, Latin America, Europe and Asia.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
The Company reported a net loss of $884 million on $18.02
billion of total operating revenues for the nine months ended
Sept. 30, 2011. AMR recorded a net loss of $471 million in the
year 2010, a net loss of $1.5 billion in 2009, and a net loss of
$2.1 billion in 2008.
The Company's balance sheet at Sept. 30, 2011, showed
$24.72 billion in total assets, $29.55 billion in total
liabilities, and a $4.83 billion stockholders' deficit.
ARTHUR KLAPSTEIN: Chapter 15 Case Summary
-----------------------------------------
Chapter 15 Petitioner: Mackay & Company, Ltd.
Chapter 15 Debtor: Arthur Cecil Klapstein
aka Art Klapstein
c/o Joseph WM. Kruchek
Kutak Rock LLP
8601 N. Scottsdale Road, Suite 300
Scottsdale, AZ 85253
Tel: (480) 429-5000
Chapter 15 Case No.: 11-32589
Chapter 15 Petition Date: November 28, 2011
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Petitioner's
Counsel: Joseph WM. Kruchek, Esq.
KUTAK ROCK LLP
8601 N. Scottsdale Road, Suite 300
Scottsdale, AZ 85253
Tel: (480) 429-5000
Fax: (480) 429-5001
E-mail: joseph.kruchek@kutakrock.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $100,000,001 to $500,000,000
The Debtor did not file a list of creditors together with its
petition.
AR BROADCASTING: Hires Landis Rath as Bankruptcy Counsel
--------------------------------------------------------
AR Broadcasting Holdings, Inc., and its debtor-affiliates are
asking the Bankruptcy Court for authority to employ Landis Rath &
Cobb LLP as their Chapter 11 counsel. Adam G. Landis and William
E. Chipman, Jr., partners of Landis Rath, Mark D. Olivere and J.
Landon Ellis, associates of Landis Rath, as well as other partners
and associates of Landis Rath, will be involved in the Debtors'
cases.
Landis Rath will charge for its legal services on an hourly basis
in accordance with its ordinary and customary hourly rates in
effect on the date services are rendered:
Partners range from $475 to $690 per hour;
Associates range from $295 to $425 per hour;
Paralegals range from $190 to $225 per hour; and
Legal assistants range from $95 to $125 per hour
Between Nov. 16 and 17, 2011, Landis Rath received advanced fee
retainers of $74,938 in advance payment for actual and estimated
professional fees and disbursements to be incurred thereafter.
William E. Chipman, Jr., Esq., attests that his firm neither holds
nor represents any interest adverse to the Debtors' estates and is
a "disinterested person" within the meaning of sections 327(a) and
101(14) of the Bankruptcy Code.
About AR Broadcasting
AR Broadcasting Holdings Inc., AR Broadcasting LLC, and AR
Licensing LLC sought bankruptcy protection (Bankr. D. Del. Case
Nos. 11-13674 to 11-13676) on Nov. 17, 2011. AR Broadcasting et
al., are struggling Missouri and Texas Radio stations owned by
Cumulus Media Inc. The Chapter 11 filing is a move to restructure
the debt-heavy finances of the subsidiary companies that control
them.
Based in Atlanta, Georgia, Cumulus Media Inc. is the second
largest radio broadcaster in the United States based on station
count, controlling 350radio stations in 68 U.S. media markets.
Judge Brendan Linehan Shannon presides over the case. DLS Claims
Administration, LLC, is the claims and notice agent. AR
Broadcasting Holdings estimated $10 million to $50 million in
assets and $50 million to $100 million in debts. The petitions
were signed by Linda Hill, vice president and principal accounting
officer.
AR BROADCASTING: Taps DLS Claims Administration as Notice Agent
---------------------------------------------------------------
AR Broadcasting Holdings, Inc., and its debtor-affiliates said the
size of their creditor and interested party body will likely
impose heavy administrative and other burdens on the Debtors, the
Court and the Office of the Clerk of the Court. For ease of
administration of its estates, the Debtors seek Bankruptcy Court
permission to employ DLS Claims Administration, LLC, as their
notice, claims and balloting agent.
The claims agent may be reached at:
Ty S. Workman, Esq.
DLS CLAIMS ADMINISTRATION, LLC
1001 North Jefferson Street, #100
Wilmington, DE 19801
Telephone: (302) 442-7852
Facsimile: (302) 888-2042
E-mail: tyworkman@dlsclaims.com
Web site: http://www.dlsclaims.com
Ty S. Workman, the Managing Director and General Counsel for DLS,
attests that (a) DLS is a "disinterested person" within the
meaning of section 101(14) of the Bankruptcy Code; (b) DLS holds
no interest materially adverse to the Debtors and their estates
with respect to matters that the Debtors seek to employ DLS to
handle; and (c) DLS has no material connection to the Debtors,
their creditors or related parties.
About AR Broadcasting
AR Broadcasting Holdings Inc., AR Broadcasting LLC, and AR
Licensing LLC sought bankruptcy protection (Bankr. D. Del. Case
Nos. 11-13674 to 11-13676) on Nov. 17, 2011. AR Broadcasting et
al., are struggling Missouri and Texas Radio stations owned by
Cumulus Media Inc. The Chapter 11 filing is a move to restructure
the debt-heavy finances of the subsidiary companies that control
them.
Based in Atlanta, Georgia, Cumulus Media Inc. is the second
largest radio broadcaster in the United States based on station
count, controlling 350radio stations in 68 U.S. media markets.
Judge Brendan Linehan Shannon presides over the case. Adam G.
Landis, Esq., and Landon Ellis, Esq., at Landis Rath & Cobb LLP,
in Wilmington, Delaware, serve as counsel to the Debtors. AR
Broadcasting Holdings estimated $10 million to $50 million in
assets and $50 million to $100 million in debts. The petitions
were signed by Linda Hill, vice president and principal accounting
officer.
ATLANTIC & PACIFIC: Seeks Court Nod for New Labor Deals
-------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Great Atlantic &
Pacific Tea Co. is requesting court approval to tweak labor
agreements with more than a dozen local unions, a move the
grocery-store chain says is essential to its restructuring.
As reported in the Nov. 29, 2011 edition of the TCR, Great
Atlantic & Pacific Tea Co. reached an accord with its 13 union
locals on 34 new collective bargaining agreements, surmounting the
last major obstacle to emerging from bankruptcy reorganization,
the company said in a court filing.
The U.S. Bankruptcy Court in White Plains, New York, will hold a
hearing on Dec. 5 for approval of contracts with locals affiliated
with the United Food & Commercial Workers International Union.
Terms of the revised agreements will be disclosed tomorrow after
union members have been briefed by their leader on what the
contracts mean for them, a court filing said.
About Great Atlantic
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 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.
A&P filed a proposed Chapter 11 plan founded upon a $490 million
debt and equity financing announced this month. The proposed
financing, tentatively approved by the bankruptcy judge, allows
A&P to accept a better offer if one appears. New investors
sponsoring the plan include Yucaipa Cos., Goldman Sachs Group Inc.
and Mount Kellett Capital Management LP.
BEAR MOUNTAIN: Court Denies Secured Financing From North Cascade
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
has denied the motion of Bear Mountain Ranch Holdings, LLC, for
authorization to obtain secured credit, filed Oct. 21, 2011.
As reported in the TCR on Nov. 10, 2011, the Debtor asked the
Bankruptcy Court for authorization to obtain secured credit from
North Cascade National Bank that would be disbursed to cure
defaults under a certain promissory note.
The promissory note was executed by Scofield Corporation in favor
of GBI Holdings, LLC, as payee, and secured by a deed of trust
against certain real property owned by Scofield, and commonly
known as the Boathouse Parcel.
The Debtor related that the promissory note is in default, and a
non-judicial deed of trust foreclosure is pending, with a
Trustee's sale that was set for Nov. 4, 2011, and is continued to
Nov. 18, 2011. The amount necessary to cure the defaults as of
Nov. 7, 2011, is estimated to be $58,920.
The Debtor explained that the Boathouse Parcel serves as the
access point for a water distribution system that is the sole
source of irrigation water to the orchard operations of BMRH, as
well as the sole source of irrigation water to the golf course
that is owned and operated by Bear Mountain Ranch Golf Course,
LLC, and the residence and adjoining property owned and occupied
by Jerry Scofield and Mary Pat Scofield. Overall, the Water
System provides 75 million gallons of irrigation water per year to
these users. The Boathouse Parcel and the Water System provide an
indispensable source of water to BMRH that would be lost at the
Trustee's Sale.
About Bear Mountain Ranch Holdings
Chelan, Washington-based Bear Mountain Ranch Holdings, LLC, fka
Bear Mountain, LLC, and dba Bear Mountain Orchards, filed for
Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 11-04354) on
Sept. 1, 2011, before Judge Patricia C. Williams. Barry W.
Davidson, Esq. -- cnickerl@dbm-law.net -- at Davidson Backman
Medeiros PLLC, serves as the Debtor's counsel. The Debtor
disclosed $13,005,047 in assets and $4,439,811 in liabilities as
of the Chapter 11 filing.
Robert D. Miller Jr., U.S. Trustee informed the Court that he is
not appointing an official committee of unsecured creditors in the
Debtor's bankruptcy case due to the lack of entities eligible to
serve on the unsecured creditors' committee.
BOBBY ROWE: Auctioneers to Conduct Bankruptcy Sale of Assets
------------------------------------------------------------
National Commercial Auctioneers disclosed the auction of four
valuable oil & gas leases covering 360 acres in Okmulgee County,
Okla., on Wednesday, Dec. 14, 2011, at 10am local time, pursuant
to case (09-81217) Bobby Rowe Energy, Inc., in Chapter 11 U.S.
Bankruptcy Court of the Eastern District of Oklahoma, according to
Stephen Karbelk, CAI, AARE, CEO and Founder of the company.
"This is a tremendous opportunity to take advantage of the
exceptional upside potential of these underserved, owner-operated
oil and gas leases," explained Karbelk. "Three of the leases have
recent oil production and one lease has recent gas production."
The leases will be offered individually, in combinations and as a
whole to the highest bidder. Total production capacity of this
offering for the past 12 months, based on the available records,
is the following: Adams lease, oil -- 1,483 barrels, gas -- 1,742
MCF; George James lease, oil -- 114 barrels; E.E. Lee lease, oil -
- 178 barrels; W.E. Lee lease, last recorded production of 149
barrels in 2009.
"There are approximately 360 acres of leaseholds," Karbelk said.
"The leases are in close proximity to each other and will be
offered with no minimum bid and no reserve price, but only subject
to customary bankruptcy court approval."
The auction will be conducted at the U.S. Bankruptcy Court, 111 W.
4th Street, Courtroom 215, in Okmulgee. Additional documents are
available to be reviewed, including available title documents.
Bobby Rowe Energy, Inc, filed a Chapter 11 petition (Bankr. D.
Okla. Case No. 09-81217) on July 27, 2009 in Okmulgee,
Oklahoma, Jeff Potts, Esq. at Potts & Jones LLP, in Okmulgee,
Oklahoma serves as counsel to the Debtor. The Debtor estimated up
to $10,000,000 in assets and up to $10 million in liabilities.
The petition was signed by Stephen P. Rowe, president of the
Company.
BOCA BRIDGE: Intends to Seek Plan Outline Approval on Dec. 9
------------------------------------------------------------
Boca Bridge LLC, asks the U.S. Bankruptcy Court for the Southern
District of Florida to convene a hearing on Dec. 9, 2011, to
conditionally approve the Disclosure Statement explaining the
proposed Amended Plan of Reorganization dated Nov. 11, 2011.
As reported in the Troubled Company Reporter on Nov. 24, 2011, the
funds to be used to make cash payments under the Plan will be
derived from proceeds from the Closing Loan and the operation of
the Debtor's business in the ordinary course prior to and after
the Effective Date.
Under the Plan, classes 1, 2, 6, 7 and 8 are impaired while
classes 3, 4 and 5 are unimpaired. The Debtor estimated 100%
recovery for classes 1 through 6 while recovery for classes 7 and
8 are unknown.
The plan includes unclassified claims, consisting of
administrative expense claims, priority tax claims, U.S. Trustee
fees, and PACA claims, which will be paid in full in cash. Total
unclassified claims are estimated to total $371,107.
The Plan divides the Claims against and Interests in the Debtor
into several classes:
A. Class 1 (Allowed Lender Secured Claim) will receive the
treatment described in the Restructuring Agreement to be
documented in the form of the New Loan Documents as
provided for in the Restructuring Agreement. Class 1
Claims, estimated to total $10 million, is impaired under
the Plan.
B. Class 2 (Allowed GFS Secured Claim) will receive monthly
payments commencing on the last business day of the first
month of January 2012, with an interest rate of 5%,
amortized over 25 years, for a period of 6 years, with a
balloon payment at the end of the sixth year in an amount
that provides GFS with the total amount of its Allowed GFS
Secured Claim. Class 2 claims, estimated to be
$70,742, is impaired under the Plan.
C. Class 3 (Allowed US Bancorp Secured Claim) will receive
the Debtor's assumption of the lease agreement evidencing
and relating to this debt, and payment in the ordinary
course under the lease agreement evidencing and relating
to this debt. The Class 3 Claim is unimpaired.
D. Class 4 (Allowed Secured Taxing Authority Claims) will
receive payment in the ordinary course, upon the latter of
(i) the Effective Date, or, (ii) the date on which an
order approving payment of the Allowed Secured Taxing
Authority Claim becomes a Final Order, generated from the
Debtor's business operations. The Class 4 Claim,
estimated to be $233,091, is unimpaired under the Plan.
E. Class 5 (Allowed Unsecured Priority Claims) will receive
100% of the claim in cash upon the latter of (i) the
Effective Date or, (ii) the date on which an order
approving payment of the Allowed Unsecured Priority Claim
becomes a Final Order, generated from the Debtor's
business operations. The Class 5 Claim, estimated to
total $137,000, is unimpaired under the Plan.
F. Class 6 (Allowed General Unsecured Claims) will receive,
subject to the waterfall provisions of the Restructuring
Agreement, quarterly payments, commencing on the last
business day of the first month of January 2012, with an
interest rate of 4.5% amortized over 25 years, for a
period of 6 years, with a balloon payment at the end of
the sixth year in an amount that provides each holder of
an Allowed General Unsecured Claim the total amount of its
Allowed General Unsecured Claim, with no prepayment
penalty, generated from the Debtor's business operations.
Class 6 Claims, estimated to be $418,000, is impaired
under the Plan.
G. Class 7 (Allowed Pre-Petition Lender Claim) will receive,
after the Lender is indefeasibly paid in cash in full and
the Debtor acknowledges and agrees to the same, payments
as arranged by the Debtor and the holder of the Allowed
Pre-Petition Lender Claim; provided that, the holder of
the Allowed Pre-Petition Lender Claims will be entitled to
receive the payments set forth in the Restructuring
Agreement.
H. Class 8 (Allowed Subordinated Insider Claims) will
receive, after the Lender is indefeasibly paid in cash in
full and the Debtor acknowledges and agrees to the same,
payments as arranged by the Debtor and the holders of the
Allowed Subordinated Insider Claims. The Class 8 Claims,
estimated to total $2,000,000, are impaired.
I. Class 9 (Equity Interests) will retain their Equity
Interest in the Debtor and will receive no Distribution
under the Plan on account of the Equity Interests. These
parties will continue to own the Reorganized Debtor: (i)
Chop Investments, LLC will own 15%, (ii) HHH Bridge, Inc.
will own 28.125%, (iii) IHG Realty, LLC will own 18.75%,
(iv) Matap I, LLC will own 13.l25%, and (v) Mitchell
Kaminsky Trust will own 25%. The Class 9 Claims are
impaired under the plan.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/BOCABRIDGE_ds.pdf
About Boca Bridge LLC
In August 2010, 10 creditors owed $69,400 filed an involuntary
Chapter 11 petition (Bankr. S.D. Fla. Case No. 10-34538) against
Boca Bridge LLC, the owner of the Boca Raton Bridge Hotel. In
November, the bankruptcy judge entered ruling placing the Boca
Bridge into Chapter 11. The Debtor disclosed $10,286,336 in
assets and $11,850,060 in liabilities as of the Chapter 11 filing.
Bernice C. Lee, Esq., and Bradley Shraiberg, Esq., at Shraiberg,
Ferrara & Landau, P.A., in Boca Raton, Florida, represent the
Debtor as counsel.
BOWE BELL: Court OKs Stahl Cowen as Retiree Committee Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Retiree Committee of Mail Systems, Liquidation Inc.,
formerly known as Bowe Systec, Inc., et al., to retain Stahl Cowen
Crowley Addis LLC as its counsel. The Retiree Committee hired
Stahl Cowen to, among other things, investigate the financial
condition of the estate (post-sale), evaluate any contingent
assets of the estate, and review pertinent documents to accurately
identify all effected retirees.
The hourly rates of Stahl Cowen's personnel are:
Partners $420 - $595
Associates $180 - $355
Legal Assistants/Paralegals $120 - $180
About Bowe Bell
Headquartered in Wheeling, Ill., BOWE BELL + HOWELL --
http://www.bowebellhowell.com/-- provides high performance
document management solutions and services. In 1936, the company
pioneered gripper arm mail-inserting systems. The company
currently has a complete portfolio of inserting, sorting, plastic
card, integrity, cutting, packaging, print-on-demand and software
solutions. In addition to its headquarters offices, the company
maintains major manufacturing and service locations in Durham,
N.C. and Bethlehem, Penn.
Bowe Bell + Howell sought bankruptcy protection in the U.S. as
part of a deal to itself to creditor Versa Capital Management Inc.
to pay off debt.
Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other
affiliates, including Bowe Bell + Howell Holdings, Inc., filed
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on
April 18, 2011. Bowe Systec estimated assets and debt of $100
million to $500 million as of the bankruptcy filing.
Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel.
McDermott Will & Emery is the Debtors' special corporate counsel.
Focus Management Group is the Debtors' financial advisors. Lazard
Middle Market LLC is the Debtors' investment banker. The Garden
City Group, Inc is the Debtors' claims and notice agent.
Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary,
commenced parallel ancillary proceeding under Part IV of the
Companies' Creditors Arrangement Act. BBH Canada, as the proposed
foreign representative for the Debtors in the ancillary
proceeding, will ask an Ontario Superior Court judge to recognize
the bankruptcy proceedings in the U.S. PricewaterhouseCoopers
Inc. is the prospective Information Officer in the Canadian
Proceeding.
The U.S. Trustee has formed an Official Committee of Unsecured
Creditors and an Official Retirees' Committee. The Retiree
Committee tapped Thorp Reed & Armstrong, LLP, as co-counsel.
Versa Capital Management, Inc. in June 2011 completed its
acquisition of the assets of Bowe Bell + Howell and the formation
of a new company and brand, Bell and Howell, LLC. Versa, having
purchased the $121 million secured term loan and revolving credit,
signed a contract to buy the business in exchange for secured
debt, the loan financing the Chapter 11 case, the cost of curing
contract defaults, and $315,000 for the Canadian assets.
BOWE BELL: Court OKs Thorp Reed as Retiree Committee Co-Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the official retiree committee in the Chapter 11 case of Mail
Systems Liquidation, Inc., formerly known as Bowe Systec, Inc., et
al., to retain Thorp Reed & Armstrong, LLP, as co-counsel. Upon
retention, the firm will, among other things, counsel the Retiree
Committee with respect to understanding the bankruptcy estate,
advise the Retiree Committee members with respect to their
fiduciary duties, and communicate with the retiree constituency.
Current customary hourly rates of Thorp Reed attorneys range from
$175 to $485.
About Bowe Bell
Headquartered in Wheeling, Ill., BOWE BELL + HOWELL --
http://www.bowebellhowell.com/-- provides high performance
document management solutions and services. In 1936, the company
pioneered gripper arm mail-inserting systems. The company
currently has a complete portfolio of inserting, sorting, plastic
card, integrity, cutting, packaging, print-on-demand and software
solutions. In addition to its headquarters offices, the company
maintains major manufacturing and service locations in Durham,
N.C. and Bethlehem, Penn.
Bowe Bell + Howell sought bankruptcy protection in the U.S. as
part of a deal to itself to creditor Versa Capital Management Inc.
to pay off debt.
Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other
affiliates, including Bowe Bell + Howell Holdings, Inc., filed
Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on
April 18, 2011. Bowe Systec estimated assets and debt of $100
million to $500 million as of the bankruptcy filing.
Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel.
McDermott Will & Emery is the Debtors' special corporate counsel.
Focus Management Group is the Debtors' financial advisors. Lazard
Middle Market LLC is the Debtors' investment banker. The Garden
City Group, Inc is the Debtors' claims and notice agent.
Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary,
commenced parallel ancillary proceeding under Part IV of the
Companies' Creditors Arrangement Act. BBH Canada, as the proposed
foreign representative for the Debtors in the ancillary
proceeding, will ask an Ontario Superior Court judge to recognize
the bankruptcy proceedings in the U.S. PricewaterhouseCoopers
Inc. is the prospective Information Officer in the Canadian
Proceeding.
The U.S. Trustee has formed an Official Committee of Unsecured
Creditors and an Official Retirees' Committee. The Retiree
Committee tapped Thorp Reed & Armstrong, LLP, as co-counsel.
Versa Capital Management, Inc. in June 2011 completed its
acquisition of the assets of Bowe Bell + Howell and the formation
of a new company and brand, Bell and Howell, LLC. Versa, having
purchased the $121 million secured term loan and revolving credit,
signed a contract to buy the business in exchange for secured
debt, the loan financing the Chapter 11 case, the cost of curing
contract defaults, and $315,000 for the Canadian assets.
CENTRAL FALLS, R.I.: Inks Agreement with Labor Unions
-----------------------------------------------------
The Associated Press reports that the Rhode Island appointed
receiver in Central Falls and public-sector unions for the
insolvent city on Nov. 23 inked new contracts outside of
bankruptcy proceedings that were described as critical in helping
return the municipality to fiscal health.
According to the report, Joseph Whelan, one of the lead
negotiators for the receiver's office, said that while the new
five-year contracts include annual pay hikes, they also include
"tremendous" savings derived from health benefit and pension cuts.
There will also be significant reductions in overtime through a
consolidation of fire, police and dispatch service; outsourcing of
those services, which had been a possibility, will not be
necessary, he added. Under the agreements, there also will be no
additional layoffs, the report notes.
Matthew McGowan, an attorney representing retirees, told The AP
those talks have been "positive" but declined to say whether he's
hopeful an agreement can be reached. He said in a court filing
this month that the city doesn't meet the requirements for
bankruptcy protection because it didn't undertake "good faith"
negotiations with the retirees ahead of time, as required,
according to the AP.
The AP notes that the new contracts were described by union
leaders as tough to swallow, but were nevertheless approved
overwhelmingly. The union representing city workers, Council 94,
approved the contract 23-0. The police and fire unions approved
their contracts by votes of 17-1 and 28-1, respectively.
About Central Falls
Central Falls is a city in Providence County, Rhode Island. The
population was 18,928 at the 2000 census. Central Falls is the
smallest and most densely populated city in Rhode Island.
Central Falls sought bankruptcy protection under Chapter 9 of the
U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1,
2011. The Chapter 9 filing was made after former Rhode Island
Supreme Court Judge Robert Flanders, who serves as state-appointed
receiver for the city, was unable to negotiate significant
concessions from unions representing police officers, firefighters
and other city workers. The city grappled with an $80 million
unfunded pension and retiree health benefit liability that is
nearly quadruple its annual budget of $17 million. Judge Robert
Flanders succeeded the role from retired Superior Court Associate
Justice Mark A. Pfeiffer, who was appointed in July 2010. The
Central Falls receivership, the state's first, has left the mayor
and council without any power to govern.
Judge Frank Bailey presides over the Chapter 9 case. Theodore
Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy
counsel to the receiver.
The receiver is negotiating new contracts with unions representing
city workers. The receiver filed a proposed debt adjustment plan
for the city in September. It won't affect bondholders.
CENTURY PLAZA: Section 341(a) Meeting Continues to Dec. 9
---------------------------------------------------------
The U.S. Trustee for Region 10 will continue a meeting of
creditors of Century Plaza LLC previously set for Dec. 2, 2011,
has been continued to Dec. 9, 2011, at 9:30 a.m. The meeting will
be at Hammond -- 1st Floor, Suite 1700.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
About Century Plaza
Based in Merrillville, Indiana, Century Plaza LLC owns and
operates a commercial shopping center known as "Century Plaza".
Century Plaza filed for Chapter 11 bankruptcy (Bankr. N.D. Ind.
Case No. 11-24075) on Oct. 18, 2011. The Debtor estimated assets
and debts of $10 million to $50 million. The petition was signed
by Richard Dube, president of Tri-Land Properties, Inc., manager.
CHRISTIAN BROTHERS: Court OKs Four Seasons as Broker
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized The Christian Brothers' Institute, et al., to employ
Four Seasons Real Estate Center as their real estate broker under
the Exclusive Right to Sell Agreement, in connection with the
marketing and sale of the real property located at 117 North 10th
Avenue, Mount Vernon, New York.
The property is a single family house which was formerly utilized
as a residence to house Brothers. Currently, the property is
vacant and CBI had listed the property for sale months before the
Chapter 11 filing.
Upon sale of the property, Four Seasons will be paid a commission
of 5% of the sales price.
About The Christian Brothers' Institute
The Christian Brothers' Institute and The Christian Brothers of
Ireland filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011.
In its schedules, The Christian Brothers' Institute disclosed
assets of $63,418,267 and liabilities of $8,484,853 as of the
Petition Date. In its schedules, CBOI discloses assets of
$1,091,084 and liabilities of $3,622,500 as of the Petition Date.
Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New
York, serves as the Debtors' bankruptcy counsel. The Debtors
tapped McInnes Cooper as their special Canadian litigation
counsel; Re/Max "10" as its real estate broker; Omni Management
Group as (i) claims, noticing and balloting agent, and (ii)
administrative agent.
On May 11, 2011, the U.S. Trustee appointed an Official Committee
of Unsecured Creditors. No trustee has been appointed.
COSTA DORADA: Files Debt Stipulation With Scotia de Puerto Rico
---------------------------------------------------------------
Debtor Costa Dorada Apartments Corp. and secured creditor
Scotiabank de Puerto Rico asks the U.S. Bankruptcy Court for the
District of Puerto Rico to approve a stipulation for the payment
of the Debtor's loan to Scotiabank "within the process of its
Chapter 11 Plan."
Scotiabank is a secured creditor of the Debtor as the holder in
due course of three mortgage notes that were given in pledge to
warrant a commercial loan originated for the principal sum of
$2,500,000 and later increased to $3,150,000. The loan is secured
by a first mortgage on two (2) properties of the Debtor.
The agreement was reached under these terms:
(a) The Debtor accepts that as of Sept. 15, 2011, it owes
Scotiabank $1,100,441 for principal, accrued interest in the
amount of $171,068, $95,547 for escrow account and $315,000
for prepetition attorney fees. Interest will increase at a
rate of $158.28 daily.
(b) The Debtor has agreed to pay this debt thorough the Chapter
11 plan. Notwithstanding, in the event the instant case is
dismissed, Scotiabank may continue with this agreement,
subject to Debtor's compliance. Otherwise, Scotiabank may
modify or terminate it.
(c) The Debtor will have a term of twenty four (24) months,
counted from the date the agreement is signed, to sell the
units and complete the payment in full of Scotiabank's loan.
(d) All units will be sold for a price of no less than $150,000
unless the parties mutually agree to a different price.
(f) If the Debtor is not able to sell enough units to complete
the payment of Scotiabank's loan within the twenty four
months period it will agree to the lifting of the stay in
favor of Scotiabank on all the unsold units that are part of
the collateral. The stay will be lifted to allow the bank
to continue with its foreclosure action now pending on the
State Court. The stay will be lifted upon a written
certification to the Court that the sale period has elapsed
and the loan remains unpaid.
g) A realtor will be retained for the marketing and sale of
apartment units. It will be hired by mutual agreement of
the parties. In case the parties are not able reach an
agreement on the hiring of the realtor the matter will be
taken to the consideration of the Court. Each party will
submit a candidate from which the court will make a final
determination.
(h) While the sale of the apartment units is being completed the
Debtor will make monthly post-petition adequate protection
payments to Scotiabank in the amount of $6,000 starting with
the signature of this stipulation and every months
thereafter.
(i) All payments received by Scotiabank from the monthly
payments and the proceeds of the sales will be first applied
to the accrued interest of the loan. The rest will be
applied to the principal of the loan.
(j) This stipulation will become integral part any
reorganization plan the Debtor submits for the approval of
the Court and its creditors.
Pursuant to Rule 4001 of the Federal Rules of Bankruptcy Procedure
(FRBP), the movants request that should no objection to this
agreement be filed within twenty one (21) days from notice of the
same, an Order approving all the terms and conditions above stated
be entered.
A copy of the Secured Debt Stipulation is available for free at:
http://bankrupt.com/misc/costadorada.dkt65.pdf
Costa Dorada Apartments Corp., dba Villas De Costa Dorada, in
Isabela, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D.
P.R. Case No. 11-03960) on May 10, 2011. The Debtor disclosed
$10.7 million in assets and $8.6 million in liabilities as of the
Chapter 11 filing. The petition was signed by Carlos R. Fernandez
Rodriguez, its president. Wigberto Lugo Mender, Esq., at Lugo
Mender & Co., in Guaynabo, Puerto Rico, represents the Debtor as
counsel.
DIPPIN' DOTS: Hiring Farmer & Wright as Bankruptcy Counsel
----------------------------------------------------------
Dippin' Dots, Inc., is asking the Bankruptcy Court for authority
to employ Todd A. Farmer and Samuel J. Wright, with Farmer &
Wright, PLLC, as Chapter 11 counsel. The firm has represented the
Debtor over the past year in an attempt to restructure its debts
and in defense of a foreclosure action filed by its largest
creditor. The Debtor does not owe counsel any fees at the time of
filing.
The Debtor proposes to pay $225 per hour for Mr. Farmer and $205
per hour for Mr. Wright. Paralegal time will be billed at $85 per
hour. The firm's other professionals who may provide services in
the case are Stephanie B. Rumfelt, Paralegal; and Melody N.
Roberts, Paralegal.
The attorneys have been paid $75,000 as a general retainer (plus
$1,046 in filing fees). Counsel is also holding $25,000 in its
escrow account which the Debtor believes will be used for the
retention of other professionals in this case upon approval by the
Court.
Neither Messrs. Farmer and Wright nor the firm has any connection
with the Debtor, creditors, United States Trustee, or any person
employed in the Office of the United States Trustee or any other
party in interest, or their attorneys. Counsel is disinterested
within the meaning of 11 U.S.C. Sec. 101(14).
About Dippin' Dots
Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc.
manufactures quirky and colorful ice cream beads, which are flash
frozen using liquid nitrogen. It owns a 120,000-square-foot plant
in Kentucky that can produce more than 25,000 gallons of frozen
dots a day. It has about 140 Dippin' Dots retail locations, which
are mostly controlled by franchisees, and agreements with 9,952
small vendors who sell the ice cream at fairs, festivals and
sports games. Dippin' Dots isn't sold in grocery stores because
of its extreme cooling requirements.
Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No.
11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H.
Fulton presides over the case. The Debtor disclosed $20,233,130
in assets and up to $20,233,130 in debts. The petition was signed
by Curt Jones, president.
Regions Bank, the Debtor's secured lender, is represented by:
Brian H. Meldrum, Esq.
STITES & HARBISON PLLC
400 W. Market Street, Suite 1800
Louisville, KY 40202
Tel: 502-681-0578
E-mail: bmeldrum@stites.com
DIPPIN' DOTS: Sec. 341 Creditors' Meeting Set for Dec. 8
--------------------------------------------------------
The Office of the U.S. Trustee in Louisville, Kentucky, will hold
a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the
bankruptcy case of Dippin' Dots, Inc., on Dec. 8, 2011, at 12:30
p.m. at Paducah Courthouse, Federal Building, 5th & Broadway, in
Paducah, Kentucky.
A status hearing was scheduled in the case on Nov. 7, 2011.
Dippin' Dots' deadline to file a Chapter 11 Plan and accompanying
Disclosure Statement is March 2, 2012.
About Dippin' Dots
Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc.
manufactures quirky and colorful ice cream beads, which are flash
frozen using liquid nitrogen. It owns a 120,000-square-foot plant
in Kentucky that can produce more than 25,000 gallons of frozen
dots a day. It has about 140 Dippin' Dots retail locations, which
are mostly controlled by franchisees, and agreements with 9,952
small vendors who sell the ice cream at fairs, festivals and
sports games. Dippin' Dots isn't sold in grocery stores because
of its extreme cooling requirements.
Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No.
11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H.
Fulton presides over the case. Farmer & Wright, PLLC, represents
the Debtor as Chapter 11 counsel. The Debtor disclosed
$20,233,130 in assets and up to $20,233,130 in debts. The
petition was signed by Curt Jones, president.
Regions Bank, the Debtor's secured lender, is represented by Brian
H. Meldrum, Esq., at Stites & Harbison PLLC.
DIPPIN' DOTS: DIP Financing Requires Asset Sale by June 2012
------------------------------------------------------------
Judge Thomas H. Fulton set a hearing for Jan. 19, 2012, at 10:00
a.m. (Central Time) to grant final approval on the request of
Dippin' Dots, Inc., to use cash collateral of Regions Bank, its
primary secured lender, as well as the Debtor's bankruptcy loan
provided by the bank.
The DIP loan requires the Debtor to meet certain milestones on the
sale of its assets.
Dippin' Dots on Nov. 7 obtained interim authority to use cash
collateral. At a hearing on Nov. 17, the Debtor won interim
permission to borrow $201,842 from Regions Bank.
Regions Bank consented to the Debtor's interim use of cash
collateral through Nov. 17, as provided in the Nov. 7 Interim Cash
Collateral Order. The bank, however, objected to the Debtor's
continued use of collateral.
Regions Bank holds a validly perfected security interest on
inventory, accounts receivable, cash, furniture and fixtures, and
other intangibles. As of the bankruptcy filing date, Regions Bank
is owed $11,100,000 collectively, on eight different promissory
notes.
In its motion, the Debtor said Regions Bank is under-secured, but
the use of cash collateral will not jeopardize or impair the
bank's security interest but will allow the Debtor to continue to
conduct its business and maximize the value for both Regions and
the unsecured creditors.
Regions Bank thinks otherwise. The bank said the Debtor is not
capable of providing adequate protection in exchange of the cash
collateral use. Regions said it would agree to the cash
collateral use if the Debtor would commit itself to a timeline
under which its assets would be sold as a going concern pursuant
to 11 U.S.C. Sec. 363, subject to competitive bidding and auction.
The Interim DIP Order provides that, unless the Debtor and Regions
have agreed in writing to the terms of a consensual plan of
reorganization, the Debtor will seek to sell substantially all of
its assets pursuant to Sec. 363 according to these milestones:
January 6, 2012 The Debtor will obtain from the Court
an order authorizing the retention of a
broker for the purpose of coordinating
and assisting with the Sale Process.
March 6, 2012 The Debtor will file a sale and bid
procedures motion.
March 20, 2012 The Debtor will obtain entry from the
Bankruptcy Court of an order approving
bid procedures, which order shall
authorize (1) credit bids by the Lender
on account of both the Pre-Petition
Indebtedness and the DIP Facility; (2)
deem the Lender a "Qualified Bidder";
and (3) the solicitation of bids for the
sale of the Debtor's assets and which
shall set a deadline to receive bids
related to such sale of no later than
April 30, 2012.
May 10, 2012 The Debtor will conduct any auction.
May 30, 2012 The Debtor will obtain entry of an
order approving the sale and proposed
Asset Purchase Agreement.
June 1, 2012 The Debtor will close the sale.
The use of Cash Collateral will terminate effective on the earlier
to occur of (a) receipt by the Debtor of written notice from the
Lender of the occurrence and continuance of an Event of Default;
and (b) 11:59 p.m. (prevailing Eastern time) on June 2, 2012.
Upon the Termination Date, Regions may move for the expedited
appointment of a Chapter 11 Trustee.
Regions also consents to the Debtor paying its principal
shareholder and CEO, Curt Jones, a gross monthly salary of no
greater than $15,000 per month.
About Dippin' Dots
Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc.
manufactures quirky and colorful ice cream beads, which are flash
frozen using liquid nitrogen. It owns a 120,000-square-foot plant
in Kentucky that can produce more than 25,000 gallons of frozen
dots a day. It has about 140 Dippin' Dots retail locations, which
are mostly controlled by franchisees, and agreements with 9,952
small vendors who sell the ice cream at fairs, festivals and
sports games. Dippin' Dots isn't sold in grocery stores because
of its extreme cooling requirements.
Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No.
11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H.
Fulton presides over the case. Farmer & Wright, PLLC, represents
the Debtor as Chapter 11 counsel. The Debtor disclosed
$20,233,130 in assets and up to $20,233,130 in liabilities. The
petition was signed by Curt Jones, president.
Regions Bank, the Debtor's secured lender, is represented by Brian
H. Meldrum, Esq., at Stites & Harbison PLLC.
DPL INC: Moody's Lowers Unsecured Rating to 'Ba1'
------------------------------------------------
Moody's Investors Service downgraded DPL Inc.'s (DPL) unsecured
rating to Ba1 from Baa1 and downgraded Dayton Power & Light
Company's (DP&L) Issuer Rating to Baa2 from A2 and First Mortgage
Bond rating to A3 from Aa3 following the closing of The AES
Corporation's (AES) acquisition of DPL and its subsidiaries. The
rating outlook for DPL and DP&L is stable.
Moody's also assigned a Ba1 senior unsecured rating to Dolphin Sub
II, Inc. (Dolphin), a wholly owned special purpose subsidiary of
AES, which had previously raised funds via a $1.25 billion
unsecured notes issuance to fund the acquisition. Upon the release
of such funds from a single purpose escrow account established at
the time of issuance, DPL assumed the obligations under such
senior notes.
RATINGS RATIONALE
"The downgrades reflect the significantly increased credit risk of
the utility and its parent due to their acquisition by AES, a
lower rated entity, as well as the significant incremental parent
level debt added to completed the transaction," said Moody's
Analyst Mitchell Moss. "The higher leverage at the parent
pressures consolidated credit metrics cash flow for debt service
and other parent level requirements.."
DPL's Ba1 senior unsecured rating is driven by the increase in
parent leverage and the resulting negative impact on the company's
credit profile. Including the debt originally issued by Dolphin,
DPL's parent debt accounts for about 65% of consolidated debt. As
a result, DPL's consolidated credit metrics are expected to
decline substantially. Specifically, key consolidated financial
metrics of cash from operations before changes in working capital
to debt and interest coverage are expected to weaken to below 13%
and 3.3x, respectively, during the first few years following the
acquisition. Moody's views the consolidated entity as marginally
investment grade; however, the parent's Ba1 rating also factors in
the degree of structural subordination that exists for parent
level creditors. In addition, DPL's anticipated dividend payout to
AES is expected to reduce consolidated retained cash flow and some
of its financial flexibility.
The Ba1 rating also reflects an overall increase in the company's
business risk since the AES parent has a much weaker credit
profile and DPL will have an increasing dependence on cash flow
generated from its unregulated operations, primarily its retail
energy marketing business.
DP&L's Issuer Rating reflects the increased credit risk at the
utility due to the parent's added leverage and the higher need for
dividends from the utility for debt service with minimal ring-
fencing provisions in place. The rating also reflects DP&L's
reasonably supportive regulatory framework in Ohio although the
utility has some uncertainty with its upcoming Electric Security
Plan (ESP) rate filing in 2012. Moody's anticipates that the
supportive regulatory framework, comparable to other Ohio
utilities, will continue. Standalone credit metrics are expected
to be strong for the rating but are constrained by the substantial
level of DPL holding company debt.
DPL's and DP&L's stable outlook reflects the supportive regulatory
framework in place for the utility and assumes a reasonable
outcome in the 2012 ESP filing as well as moderately increasing
reliance on unregulated cash flows.
In light of the rating action, limited prospects exists for DPL
and DP&L to be upgraded. Longer-term, the rating for DPL and DP&L
could be upgraded should DPL significantly reduce the level of
parent company debt.
The rating for DPL and DP&L could be downgraded if DPL's credit
metrics weaken such that cash flow to debt falls below 10% or if
it increases its exposure to unregulated operations.
The principal methodology used in this rating was Regulated
Electric and Gas Utilities published in August 2009.
ENERGY CONVERSION: Names New CEO, Taps Restructuring Chief
----------------------------------------------------------
Energy Conversion Devices Inc. has named a pair of executives to
lead the struggling solar products company's operations and
restructuring efforts.
The Company announced Monday that its Board of Directors has
appointed Julian Hawkins as Chief Executive Officer and President
and a member of the Board of Directors, effective December 5,
2011. In addition, the Board has appointed Jay Knoll as Executive
Vice President and Chief Restructuring Officer and a member of the
Board of Directors effective December 5, 2011.
Energy Conversion Devices, through its United Solar Ovonic (USO)
subsidiary, is engaged in building-integrated and rooftop
photovoltaics (PV). The Company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using technology.
The Company reported a net loss of $56.1 million on $22.0 million
of revenue for three months ended Sept. 30, 2011, compared with a
net loss of $13.5 million on $53.3 million of revenue in the same
period in 2010.
The balance sheet at Sept. 30, 2011, showed $318.4 million in
assets and $56.6 million in current liabilities and $292.5 million
in long term liabilities. The long-term debt includes the $235.8
million owing under the $316.3 million of Convertible Senior Notes
issued in 2008 and due June 15, 2013.
In its Form 10-Q for the quarter ended Sept. 30, 2011, Energy
COnversion disclosed, "The Company may consider various financing
or refinancing options for the Notes before June 15, 2013. If
these options are not successful, there is no assurance that
sufficient cash will be generated from operations to enable the
Company to repay this debt when it comes due. In connection with
the foregoing, we have begun discussions with representatives of
an informal group of noteholders regarding our repositioning
efforts and to explore the group's interest in restructuring our
obligations under the Notes. Our discussions are at a preliminary
stage. If we are unable to reach an accord with the noteholders
or execute sufficiently on one or more of the strategies that we
are considering to attract required investment, results of
operations, financial condition and cash flows could be materially
adversely affected and we may choose to seek reorganization under
the U.S. Bankruptcy Code."
EVANS OIL: Disclosure Statement Hearing Slated for Dec. 8
---------------------------------------------------------
Evans Oil Company LLC, et al., will seek approval of the
disclosure statement accompanying their proposed Amended Joint
Chapter 11 Plan of Reorganization at a hearing scheduled for
Dec. 8, 2011, at 10:30 a.m.
Objections to the Disclosure Statement dated Oct. 27, 2011, are
due Dec. 1, 2011.
After the Effective Date of the order confirming the Plan, the
Reorganized Debtors will be managed by Randy M. Long, the Debtors'
sole member and manager, at the direction of the Plan's equity
sponsor.
In consideration of the investment, the interests in the
Reorganized Debtors will be issued solely to the Equity Sponsor.
The Plan does not contemplate Mr. Long or any prepetition holder
of equity retaining any equity in the Reorganized Debtors.
Under the Plan, Fifth Third Plan's secured claim -- to the extent
determined at a "valuation motion -- will be unimpaired. Fifth
Third's deficiency claim and general unsecured claims will share
in an "unsecured creditor distribution pool" of $116,000 on a pro
rata basis.
A copy of the Disclosure Statement and the Amended Plan is
available for free at http://bankrupt.com/misc/evansoil.dkt474.pdf
About Evans Oil
Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC,
distributes bulk oil, gas, diesel and lubricant products. Evans
Oil, together with affiliates, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30,
2011.
Attorneys at Hahn Loeser & Parks LLP serve as bankruptcy counsel
to the Debtors. Garden City Group Inc. is the claims and notice
agent. The Parkland Group Inc. is the restructuring advisor.
Evans Oil estimated assets and debts at $10 million to $50 million
as of the Chapter 11 filing.
EXIDE TECHNOLOGIES: Wants Until Jan. 31 to Object to Claims
-----------------------------------------------------------
Exide Technologies sought and obtained approval from the U.S.
Bankruptcy Court for the District of Delaware to extend the
deadline for filing objections to claims to January 31, 2012.
The extension will give Exide enough time to review and resolve
the approximately 33 remaining claims, according to Bruce
Grohsgal, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware.
More than 6,100 proofs of claim were filed against Exide in the
total sum of approximately $4.4 billion. These do not include
about 1,100 unliquidated claims, according to court papers.
As of October 28, 2011, about 6,079 claims had been resolved,
reducing the total amount of outstanding claims by more than $4.2
billion. Exide has already completed 26 quarterly distributions
to creditors under its confirmed Joint Plan of Reorganization,
consisting of distributions on approximately 2,625 claims in the
aggregate amount of approximately $1.76 billion.
Since July 31, 2011, Exide has reached a number of settlements,
has filed individual objections to claims, and has generally made
considerable advancements with respect to the remaining, more
complex claims, according to Mr. Grohsgal.
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.
EXIDE TECHNOLOGIES: MRE Wants $308K Claim Allowed
-------------------------------------------------
Material Recovery Enterprises PRP Group asks the bankruptcy court
to allow its claims against Exide Technologies in the full amount
of $308,000.
The move comes after Exide proposed to reduce and allow Claim
Nos. 2936, 3028 and 5537 as a general unsecured, non-priority
Class P4-A claim for $195,075. The company also proposed to
distribute the allowed claim in stock in accordance with its
restructuring plan.
James Yoder, Esq., at White and Williams LLP, in Wilmington,
Delaware, says MRE Group has already filed supporting evidence
that Exide owes it $308,000.
"[Exide] makes no effort to controvert or refute that evidence,
it simply ignores it," Mr. Yoder says in court papers.
MRE Group filed the claims to recover between $250,000 and
$300,000 on account of the costs it allegedly incurred in the
remediation of an Exide site in Ovalo, Texas.
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.
FILENE'S BASEMENT: Syms Creditors Seek to Disband Equity Committee
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the unsecured creditors' committee for discount
retailers Syms Corp. and subsidiary Filene's Basement LLC filed
papers last week to disband the newly formed official committee
representing shareholders. The U.S. Trustee formed the equity
committee based on Syms' declaration at the outset of the
Chapter 11 case that the company is solvent, with money to be left
over for distribution to shareholders.
According to the report, the Creditors Committee contends there
need be no committee because Chief Executive Marcy Syms, who owns
more than 54% of the stock, by herself adequately represents
interests of shareholders. Short of disbanding the equity
committee, the creditors' panel wants the bankruptcy judge at a
Dec. 14 hearing to cap the equity panel's fees and expenses at
$500,000.
Although Syms stock closed Nov. 28 at $9.51, up 11 cents a share
in over-the-counter trading, David Tawil, co-founder and portfolio
manager from Maglan Capital, believes the stock price is too high.
Mr. Tawil, who said in an interview that he shorted Syms stock,
estimates the liquidation will generate between $2.98 and $8.40 a
share, with a midpoint recovery of $5.69 a share.
Bloomberg relates that Mr. Tawil estimates Syms' real estate will
generate between $135 million and $160 million while claims for
termination of leases will range between $45 million and
$25 million. He's projecting a recovery of $21.9 million to
$24.3 million on the inventory.
About Filene's Basement
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22
(Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by
lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy
Solutions serves as claims and notice agent. The Debtors
estimated $50 million to $100 million in assets and $100 million
to $500 million in debts.
The 2009 Debtor was formally renamed FB Liquidating Estate,
following the sale of all of its assets to Syms Corp. in June
2009.
Pursuant to the Liquidating Plan confirmed in January 2010,
secured creditors in the Chapter 11 case have been paid in full,
and holders of priority, administrative and convenience class
claims have received 100% of their allowed claims. As reported by
the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen,
Chairman of Abacus Advisors LLC and Chief Restructuring Officer
for FB Liquidating Estate disclosed that a second distribution of
dividend checks to Filene's unsecured creditors amounting to 12.5%
of approved claims has been made, bringing the cumulative
distributions on unsecured claims to 62.5%.
On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and
two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos.
11-13511 to 11-13514) after a failed bid to sell the business.
The two units are Syms Clothing Inc. and Syms Advertising Inc.
Judge Kevin J. Carey presides over the case. Lawyers at Skadden
Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The
Debtors tapped Rothschild Inc. as investment banker and Cushman
and Wakefield Securities, Inc., as real estate financial advisors.
Syms is conducting going-out-of-business sales at all 46 stores.
Syms shuttered its namesake and Filene's Basement outlets upon the
bankruptcy filing and tapped a joint venture of Gordon Brothers
Retail Partners LLC and Hilco Merchant Resources LLC to run the
going-out-of-business sales. The sale may continue until Jan. 31,
2012. The 15 owned stores will be sold after the GOB sales.
Filene's Basement estimated $1 million to $10 million in assets
and $50 million to $100 million in debts. The petitions were
signed by Gary Binkoski, authorized representative of Filene's
Basement.
The official committee of unsecured creditors appointed in the
2011 case has retained Hahn & Hessen LLP as legal counsel.
Holders of equity in Syms Corp. pushed for an official
shareholders' committee and separation of the Syms and Filene's
Basement bankruptcy estates.
Gordon Brothers and Hilco are represented by Goulston & Storrs,
P.C. and Ashby & Geddes, P.A.
FILENE'S BASEMENT: Hilco to Auction Intellectual Property Assets
----------------------------------------------------------------
The trademarked Running of the Brides(R) name and Filene's
Basement(R) trade name are just two of many highly-valued
intellectual property assets slated to be sold at auction by Hilco
Streambank as part of the liquidation of bankrupt discount-
clothing retailers Syms Corp. (SYMS) and Filene's Basement, LLC.
Subject to approval by the U.S. Bankruptcy Court, District of
Delaware (Wilmington), the yet-to-be-scheduled auction will also
include the Syms(R) trade name, various trade marks, Internet
URLs, websites and other assets.
The retention of Hilco Streambank to conduct the auction is
expected to be filed with the Court this week. Hilco Streambank
has already begun marketing the assets and is seeking a stalking
horse bidder. Bids will be considered for the complete portfolio
or individual brands.
"Even though most Filene's Basement and Syms stores are located
east of the Mississippi, we regard both brands as truly national
in scope," said Jack Hazan, Executive Vice President with Hilco
Streambank. "Who hasn't seen Running of the Brides(R) news
stories on the Today Show, Good Morning America or The Early Show?
It has become a piece of Americana. Additionally, the Syms brand
has become synonymous with first quality men's suits as well as
woman's and children's apparel through their famous slogan 'An
educated consumer is our best customer.(R)'"
Mr. Hazan added, "It is no surprise that we have already received
expressions of interest in the IP from apparel retailers and
investment firms specializing in brand revitalization and
management. We fully expect a robust auction."
On Wednesday, November 16, going-out-of-business sales began at 19
Syms, 14 Filene's Basement and 6 combined store locations in 12
states and the District of Columbia. Discounts up to 30% off the
lowest ticketed price were being offered on over $100 million
worth of inventory, including men's and women's business attire,
sportswear, outerwear and children's apparel, many carrying famous
name designer labels. Sales are expected to run through the
holiday season.
About Hilco Streambank
Hilco Streambank -- http://www.hilcostreambank.com-- is an
advisory firm, specializing in the marketing, sale and valuation
of intangible assets for businesses at all stages. Hilco
Streambank identifies, preserves, and extracts value for clients
through the application of experience, diligence and creativity.
SOURCE: Hilco Streambank
About Filene's Basement
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22
(Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by
lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy
Solutions serves as claims and notice agent. The Debtors
estimated $50 million to $100 million in assets and $100 million
to $500 million in debts.
The 2009 Debtor was formally renamed FB Liquidating Estate,
following the sale of all of its assets to Syms Corp. in June
2009.
Pursuant to the Liquidating Plan confirmed in January 2010,
secured creditors in the Chapter 11 case have been paid in full,
and holders of priority, administrative and convenience class
claims have received 100% of their allowed claims. As reported by
the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen,
Chairman of Abacus Advisors LLC and Chief Restructuring Officer
for FB Liquidating Estate disclosed that a second distribution of
dividend checks to Filene's unsecured creditors amounting to 12.5%
of approved claims has been made, bringing the cumulative
distributions on unsecured claims to 62.5%.
On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and
two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos.
11-13511 to 11-13514) after a failed bid to sell the business.
The two units are Syms Clothing Inc. and Syms Advertising Inc.
Judge Kevin J. Carey presides over the case. Lawyers at Skadden
Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The
Debtors tapped Rothschild Inc. as investment banker and Cushman
and Wakefield Securities, Inc., as real estate financial advisors.
Syms shuttered its namesake and Filene's Basement outlets upon the
bankruptcy filing and tapped a joint venture of Gordon Brothers
Retail Partners LLC and Hilco Merchant Resources LLC to run the
going-out-of-business sales. The sale may continue until Jan. 31,
2012.
Filene's Basement estimated $1 million to $10 million in assets
and $50 million to $100 million in debts. The petitions were
signed by Gary Binkoski, authorized representative of Filene's
Basement.
The official committee of unsecured creditors appointed in the
2011 case has retained Hahn & Hessen LLP as legal counsel.
Holders of equity in Syms Corp. pushed for an official
shareholders' committee and separation of the Syms and Filene's
Basement bankruptcy estates.
Gordon Brothers and Hilco are represented by Goulston & Storrs,
P.C. and Ashby & Geddes, P.A.
GARLOCK SEALING: Hires FTI Consulting as Financial Advisor
----------------------------------------------------------
Garlock Sealing Technologies LLC asks the Bankruptcy Court for the
Western District of North Carolina to employ FTI Consulting, Inc.
as financial advisors.
Upon retention, the firm will, among other things:
-- assist the Debtors in the preparation of financial related
disclosures required by Court;
-- assist the Debtors in the preparation of financial
information for distribution to creditors and others,
including, but not limited to, cash flow projections and
budgets, cash receipts and disbursement analysis, analysis
of various assets and liability accounts, and analysis of
proposed transactions for which Court approval is sought;
-- assist in the preparation of information and analysis
necessary for the confirmation of a plan in the chapter 11
proceedings.
FTI Consulting told the Debtors that, aside from the disclosure of
Timothy J. Dragelin, a senior managing director of FTI Consulting,
it is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
The farm's rate is $480 per hour plus reimbursement of actual and
necessary expenses incurred by the firm including legal fees
related to its retentions and fee applications
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more
than a century, Garlock has been helping customers efficiently
seal the toughest process fluids in the most demanding
applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group Ltd., also filed for bankruptcy.
The filing covers only Garlock operations in Palmyra, New York and
Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex,
Pikotek, Technetics, Garlock Europe and Garlock operations in
Canada, Mexico or Australia are not affected by the filing, nor is
EnPro Industries or any other EnPro operating subsidiary.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A.,
represents the Debtor in its Chapter 11 effort. Garland S.
Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel
for asbestos matters.
The Official Committee of Asbestos Personal Injury Claimants in
the Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C. 20005.
Joseph W. Grier, III, the Court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan
P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co-
counsel.
About 124,000 asbestos claims are pending against Garlock in
state and federal courts across the country. The Company says
majority of pending asbestos actions against it is stale and
dormant -- almost 110,000 or 88% were filed more than four years
ago and more than 44,000 or 35% were filed more than 10 years ago.
GELT PROPERTIES: Hires O'Kelly for Customers Bank Litigation
------------------------------------------------------------
Gelt Properties, LLC, and Gelt Financial Corporation ask the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania for
permission to employ Kelly Ernst Bielli & Wallen, LLC, as special
counsel to represent Debtor's interests in the pending litigation
by New Century Bank, d/b/a Customers Bank in the Philadelphia
Court of Common Pleas.
Prior to the filing of the bankruptcy case, OEB&W represented the
Debtors in various legal matters, and as of the Petition Date, no
outstanding fees were owed by the Debtors for these services.
OEB&W has no connection with the Debtors and is not an insider or
affiliate of the debtors.
About Gelt Properties
Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC,
and affiliate Gelt Financial Corporation borrow money from
traditional lenders and make loans to commercial borrowers. They
also acquire and manage real estate.
Gelt Properties and Gelt Financial filed for Chapter 11 bankruptcy
(Bankr. E.D. Pa. Case Nos. 11-15826 and 11-15826) on July 25,
2011. Judge Magdeline D. Coleman presides over the cases. Albert
A. Ciardi, III, Esq., Jennifer E. Cranston, Esq., and Thomas
Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., in
Philadelphia, Pa., serve as the Debtors' bankruptcy counsel. The
petitions were signed by Uri Shoham, the Debtors' chief financial
officer. The Debtors' other professionals include: Eisenberg,
Gold & Cettei P.C. as its special counsel to provide proper legal
counsel to the Debtors with regard to defending against certain
actions, Cohen and Forman as their special counsel to advise them
upon all matters which may arise or which may be incident to the
bankruptcy proceedings.
Gelt Properties disclosed $4,727,090 in assets and $4,842,792 in
liabilities as of the Chapter 11 filing. Its affiliate, Gelt
Financial, has filed its schedules disclosing $20,340,725 in
assets and $17,050,558 in liabilities as of the Chapter 11 filing.
On Sept. 15, 2011, a committee of unsecured creditors was
appointed. Schoff McCabe, P.C. represents the Committee.
GREYSTONE PHARMA: U.S. Govt. Wants Case Dismissal for Unpaid Taxes
------------------------------------------------------------------
The United States of America, a creditor acting through the
Internal Revenue Service, asks the U.S. Bankruptcy Court Western
District of Tennessee to dismiss the Chapter 11 case of Greystone
Pharmaceuticals, Inc.
According to the U.S.A., the Debtor has failed to file federal tax
returns for these periods:
1. Form 941, Employment Tax Return, for period ending
March 31, 2010;
2. Form 941, Employment Tax Return, for period ending
June 30, 2010;
3. Form 941, Employment Tax Return, for period ending
Sept. 30. 2010;
4. Form 941, Employment Tax Return, for period ending
Dec. 31, 2010;
5. Form 940, Unemployment Tax return, for period ending
Dec. 31, 2010;
6. Form 941, Employment Tax Return, for period ending
March 31, 2011;
7. Form 941, Employment Tax Return, for period ending
June 30, 2011.
The IRS, a party-in-interest, relates that these returns and tax
debt are owed after the date of the order of relief in this case
pursuant to Section 1112(b)(1) and 1112(b)(4)(I) of the Bankruptcy
Code.
The U.S.A. is represented by:
EDWARD L. STANTON, Esq., U.S Attorney
Barbara M. Zoccola, Esq., Assistant U.S. Attorney
200 Jefferson Avenue, Suite 811
Memphis, TN 38103
Tel: (901) 544-4010
About Greystone Pharmaceuticals, Inc.
Fort Myers, Florida-based Greystone Pharmaceuticals, Inc. -- aka
Greystone Medical, Inc., and Greystone Medical Group, Inc. --
operates a pharmaceutical company. The Company filed for Chapter
11 bankruptcy protection (Bankr. W.D. Tenn. Case No. 09-32236) on
Nov. 2, 2009. Kevin Crumbo has been appointed as Chapter 11
trustee in the Debtor's case. Butler, Snow, O'Mara, Stevens &
Cannada PLLC serves as the trustee's counsel. David J. Cocke,
Esq., at Evans Petree PC, in Memphis, Tenn., represents the
Unsecured Creditors' Committee as counsel. In its schedules, the
Debtor disclosed $25,467,546 in assets, and $22,601,150 in
liabilities as of the Petition Date.
HARGATE PROPERTIES: Chateau in Receivership, Continues Operations
-----------------------------------------------------------------
Edmonton Sun reports that Crowne Plaza Chateau Lacombe has gone
into receivership, along with other businesses owned by Hargate
Properties Inc.
According to the report, Don Manning, president of D. Manning and
Associates, said hotel and restaurant employees at the Chateau
Lacombe will continue to be paid and the businesses will continue
to operate.
"We intend to operate the hotel property until further notice. . .
We've retained the staff; we've retained the management. We're
going to continue to offer the service that people have booked
until further notice."
Hargate was put into receivership on Nov. 15 by order of a judge
of the Edmonton Court of Queen's Bench. The appointment for
capital partners was on Nov. 25, the report notes.
The report discloses that other property, including condominiums
on Jasper Avenue and 116 Street may be foreclosed, although
Canadian Western Bank was unable to confirm the information.
Mr. Manning said they are in the process of securing the revenue
stream, making arrangements with creditors and taking control of
the property, the report relates.
The receiver can be reached at:
Don Manning
D. MANNING AND ASSOCIATES
Suite 520 - 625 Howe Street
Vancouver, B.C. Canada, V6C 2T6
Tel: (604) 683-8030
Fax: (604) 683-8327
E-mail: dnm@manning-trustee.com
In August 2010, Crowne Plaza Chateau Lacombe --
http://www.chateaulacombe.com/-- was acquired by Hargate
Properties Ltd. Crowne Plaza owns and operates a hotel for
business or leisure travelers. Its amenities include guest rooms,
event and meeting facilities, and restaurants. The company also
provides catering menus, including banquet dinner, desserts, and
soups and salads, as well as wedding consulting services for
functions and meetings. In addition, it offers online reservation
services. Crowne Plaza is based in Edmonton, Canada.
HOLDINGS OF EVANS: Hearing on Further Cash Access on Dec. 2
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Georgia has
continued until Dec. 2, 2011, at 10:00 a.m., the hearing to
consider Holdings of Evans, LLC's motion to use cash collateral.
Previously, the Court authorized, on an interim basis, the Debtor
to use the cash collateral which 2010-1 SFG Venture LLC asserts an
interest.
The Debtor owns an improved real property located at 156 Classic
Road in Athens, Georgia, and is engaged in the business of
operating a hotel commonly known as Candlewood Suites.
The Debtor is obligated to SFG, as assignee, under a Promissory
Note dated Nov. 14, 2008, in the original principal amount of
$6,196,200. As of the Petition Date, SFG asserts that the debt
owed ia at least $5,316,441, exclusive of accruing interest, fees,
costs and other charges as may be allowed under the Bankruptcy
Code.
The Debtor will at all times (a) sequester, segregate, and account
for all cash collateral that comes into its possession, custody of
control; (b) keep and provide on a periodic basis records
reasonably sufficient for SFG to determine the status of cash
collateral collections and expenditures; (c) provide to SFG copies
of the monthly operating reports filed with the Court and with the
Office of the U.S. Trustee and provide SFG with copies of any and
all pleadings, documents and correspondence filed with the Court.
U.S. Trustee's Objection
Donald F. Walton, the U.S. Trustee for Region 21, objected to
SFG's proposed order granting SFG a superpriority administrative
claim to the extent there is a failure of adequate protection.
SFG's proposed order provides that the 11 U.S.C. Sec. 507(b) claim
will have priority over costs of estate administration under
Section 726 if the case is subsequently converted to Chapter 7.
The U.S. Trustee states that a Chapter 7 trustee's costs of
administration pursuant to Section 726(b) are superior to a
secured creditor's Section 507(b) claim. Accordingly, any
proposed order must provide that SFG's Section 507(b) claim is
subordinate to the Chapter 7 trustee's costs of estate
administration in the event that the case is subsequently
converted to Chapter 7.
About Holdings of Evans
Martinez, Georgia-based Holdings of Evans LLC, dba Candlewood
Suites, filed for Chapter 11 bankruptcy (Bankr. S.D. Ga. Case No.
11-11756) on Sept. 2, 2011. Judge Samuel L. Kay presides over the
case. Shepard Plunkett Hamilton Boudreaux LLC serves as the
Debtor's Chapter 11 counsel. The Debtor disclosed $11,115,538 in
assets and $6,784,463 in liabilities as of the Chapter 11 filing.
The petition was signed by GB Sharma, managing member.
HOLDINGS OF EVANS: Wants to Obtain $100,000 of DIP Financing
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Georgia
will convene a hearing on Dec. 2, 2011, at 10:00 a.m., to consider
Holdings of Evans, LLC's motion to obtain financing.
On Nov. 15, 2011, the Debtor asked for authorization to obtain
postpetition financing from G.B. Sharma of up to $100,000. G.B.
Sharma is the president and CEO of the Debtor.
The Debtor related that its inability to reach a consensual
agreement regarding the use of 2010-1 SFG Venture, LLC's cash
collateral, and the conditions required for the use of cash
collateral upon which SFG insists had made circumstances unlikely
that G.B. Dharma would provide the necessary financing.
In this regard, Mr. Sharma proposed to provide credit pursuant to
these terms:
1. In lieu of seeking the use the cash collateral of SFG, the
Debtor seeks to utilize the financing offered by G.B. Sharma to
pay SFG the value of its cash collateral as of the Petition Date
and to provide additional financing as needed for the Debtor's
operations.
2. In exchange Mr. Sharma seeks first in priority lien against
the cash collateral assets -- rents, rent equivalents, monies
payable as damages or in lieu rent or rent equivalents, accounts,
cash, cash deposits and all other collateral of the Debtor. SFG
would retain its first priority lien as to all other assets.
3. As of the Petition Date, the cash collateral of SFG
consisted of the Bank of America checking account with a balance
of $20,631, a checking account at Vista Bank with a balance of
$1,523, and accounts receivable of $28,076.
4. Within 10 days of the entry of the order approving the
financing arrangements and grant of a postpetition superpriority
lien to the extent of the funds advanced to the Debtor, Mr. Sharma
will pay to SFG the value of cash deposits of $22,156; all
prepetition accounts receivables that have been collected
postpetition; all prepetition receivable collected subsequent to
entry of the order will be sequestered in a separate account and
paid to SFG within 10 days of collection.
5. Payments will extinguish SFG's lien in the cash collateral.
First priority secured creditor SFG is asking the Court to deny
the Debtor's motion, stating that the Debtor failed to site any
legal authority in support of extinguishing SFG's lien in the
postpetition collateral and has failed to sufficiently plead or
provide any evidence that the Debtor has even attempted to obtain
credit on an unsecured basis from other sources. In addition, the
Debtor cannot provide SFG with adequate protection of its interest
in postpetition cash collateral, other than turning over the cash
collateral to SFG, because SFG already has a first priority lien
on all postpetition cash collateral.
About Holdings of Evans
Martinez, Georgia-based Holdings of Evans LLC, dba Candlewood
Suites, filed for Chapter 11 bankruptcy (Bankr. S.D. Ga. Case No.
11-11756) on Sept. 2, 2011. Judge Samuel L. Kay presides over the
case. Shepard Plunkett Hamilton Boudreaux LLC serves as the
Debtor's Chapter 11 counsel. The Debtor disclosed $11,115,538 in
assets and $6,784,463 in liabilities as of the Chapter 11 filing.
The petition was signed by GB Sharma, managing member.
HUBBARD PROPERTIES: Amends Schedules of Assets and Liabilities
--------------------------------------------------------------
Hubbard Properties, LLC, filed with the U.S. Bankruptcy Court for
the Middle District of Florida second amended schedules of assets
and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $12,000,000
B. Personal Property $572,058
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $22,030,000
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $1,819,378
----------- -----------
TOTAL $12,572,058 $23,849,378
A full-text copy of the Second Amended Schedules is available for
free at:
http://bankrupt.com/misc/HUBBARDPROPERTIES_sal_2ndamended.pdf
In the previous schedules, the Debtor disclosed Creditors Holding
Unsecured Non-priority Claims of $1,809,228, total liabilities of
$23,839,228.
About Hubbard Properties
Hubbard Properties owns tourist and entertainment center John's
Pass Village in Madeira Beach, Florida. Hubbard Properties said
it owes $22 million to Investors Warranty of America.
Hubbard Properties, LLC, filed for Chapter 11 protection (Bankr.
M.D. Fla. Case No. 11-01274) in Tampa, Florida, on Jan. 27, 2011.
David S. Jennis, Esq., Kathleen I. DiSanto, Esq., and J. A.
McPheeters, Esq., at Jennis & Bowen, P.L., in Tampa, Fla., serve
as bankruptcy counsel. The Debtor also tapped Bacon & Bacon,
P.A., as special counsel; Tony Buzbee and The Buzbee Law Firm as
special counsel in connection with the assessment and recovery of
the Debtor's BP oil spill claim, Van Middlesworth and Company,
P.A., as accountant; and Claims Strategies Group, LLC, as claim
consultant.
Donald F. Walton, U.S. Trustee for Region 21, appointed three
unsecured creditors to the Official Committee of Unsecured
Creditors in the Debtor's case. Hill, Ward & Henderson, P.A.,
represents the Committee.
INT'L ENVIRONMENTAL: Sec. 341 Creditors' Meeting Set for Dec. 16
----------------------------------------------------------------
The United States Trustee for the Central District of California
will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec.
341(a) meeting in the bankruptcy case of International
Environmental Solutions on Dec. 16, 2011, at 2:30 p.m. at Suite
300, 3685 Main St., in Riverside, California.
International Environmental Solutions, based in Menifee,
California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif.
Case No. 11-44755) on Nov. 11, 2011. Judge Wayne E. Johnson
presides over the case. Howard S. Levine, Esq. --
howard@cypressllp.com -- at Cypress LLP, serves as the Debtor's
counsel. In its petition, the Debtor estimated $10 million to $50
million in both assets and debts. The petition was signed by Gary
Allen, president.
JEFFERSON COUNTY: Sheriff Seeks Protection From Lawsuits
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the sheriff of Jefferson County, Alabama, filed
papers Nov. 28 asking the bankruptcy judge to rule on whether the
Chapter 9 bankruptcy filing automatically halts lawsuits against
the sheriff and his deputies.
According to the report, the sheriff explained that his office has
no insurance, leaving the county exposed to paying judgments and
thus affecting the county's financial condition. On the question
of whether the sheriff is protected by the county's automatic
stay, court papers say the sheriff is a state official, although
funding comes from the county. The office is not a department of
the county, nor are the sheriff and his deputies county employees.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff &
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
JEFFERSON COUNTY: Bankruptcy to Test Muni-Bond Assumptions
----------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Jefferson County,
Ala., didn't roil the $2.9 trillion municipal bond market when it
filed the largest-ever municipal bankruptcy, but it is likely to
stir up things when a U.S. Bankruptcy Court judge decides how to
treat its debt obligations.
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
The county is represented by Klee Tuchin Bogdanoff & Stern
LLP, led by the firm's founder, Kenneth Lee.
The county's bankruptcy will have a "material adverse impact" on
the financial condition of bond insurer Syncora Guarantee Inc.,
the company said in its most recent quarterly filing.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
KINGSBURY CORP: Has Final Nod to Continue Borrowing Until Dec. 30
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire has
granted, on a final basis, the motion of Kingsbury Corporation for
authorization to obtain postpetition financing from Diamond
Business Credit, LLC. The order is deemed effective as of
Oct. 31, 2011. Debtor's authority to continue borrowing and using
cash collateral will expire on Dec. 30, 2011, unless otherwise
ordered by the Bankruptcy Court.
The Debtor and Diamond are authorized to continue the transactions
set forth in the Diamond Loan Documents, in accordance with said
documents and with the parties' usual practices as they existed
prior to the Petition Date (including, without limitation, monthly
payment of interest and monthly fees due under the Diamond Loan
Documents on Diamond's prepetition loans and DIP loans). The
Debtor is authorized to borrow funds, and to make expenditures,
substantially as set forth in a budget.
Diamond will have a valid, perfected, first-priority lien on all
of the Debtor's accounts, inventory and intellectual property in
order to secure the Debtor's obligations with respect to post-
petition advances made by Diamond pursuant to the Diamond Loan
Documents, provided, however, that the Committee may, within 30
days from the entry of this Order, challenge the validity,
perfection, or priority of Diamond's security interest in
Diamond's prepetition collateral.
As adequate protection of its interests in property of the estate,
to, among other things, continue to and further secure Diamond's
pre-petition loans and its DIP Loan the Court authorizes the
Debtor to grant a security interest to Diamond in the items of
collateral identified in the Diamond Loan Documents, with the
Diamond Replacement Lien having the same priority as the security
interests granted to Diamond by the Debtor prior to the Petition
Date. In addition, if Diamond becomes entitled to an allowable
claim under 11 U.S.C. Section 507(a)(2), then Diamond will have a
claim under 11 U.S.C. Section 507(b), but only to the extent that
the Diamond Replacement Lien is not adequate to protect Diamond's
interest in the pre-petition collateral from a diminution in
value.
A copy of the Final Order is available for free at:
http://bankrupt.com/misc/kingsburycorp.dkt188.pdf
As reported in the Troubled Company Reporter on Oct. 20, 2011, the
Debtor required the proposed postpetition financing in order to
rehire employees and purchase supplies necessary to restart its
operations and meet other critical postpetition obligations in the
ordinary course. The proceeds of the DIP Financing will be used
to pay the expenses set forth in a Budget, such as payroll, vendor
and supplier costs, and other expenses necessary to restart and
maintain operations. Absent this relief, the Debtor will be
forced to liquidate its assets quickly, to the substantial
detriment of its creditors. The DIP Financing is necessary to
preserve, protect and maintain the going concern value of the
Debtor's assets and maximize the value of its estate.
According to Jennifer Rood, Esq., at Berstein, Shur, Sawyer &
Nelson, the Debtor is unable to obtain unsecured credit sufficient
to operate or reorganize its business by providing an
administrative expense claim. The DIP Financing was obtained on
the most favorable terms available to the Debtor following
discussions with various lending sources. Under existing time
constraints and conditions, and considering the limited available
collateral of the Debtor, alternative financing was not and is not
available at all, or on a timely basis.
Ms. Rood informed the Court that the Debtor does not have an
alternative source of working capital with which to continue its
operations and to pay its ordinary course obligations, as those
owed to suppliers, employees, insurers, and taxing authorities.
In order for the Debtor to continue operating its business during
the case, the Debtor needs a source of working capital.
About Kingsbury Corp.
Kingsbury Corp. -- http://www.kingsburycorp.com/-- makes and
assembles machine systems.
Kingsbury Corporation and affiliate Ventura Industries, LLC, filed
Chapter 11 petition (Bankr. D. N.H. Case Nos. 11-13671 and 11-
13687) on Sept. 30, 2011. Jennifer Rood, Esq., and Robert J.
Keach, Esq., at Berstein, Shur, Sawyer & Nelson, serve as counsel
to the Debtors. In its schedules, the Debtor disclosed
$10,134,679 in assets, and $24,534,973 in liabilities as of the
petition date.
Donnelly Penman & Partners serves as its investment banker.
William K. Harrington, the U.S. Trustee for Region 1, appointed
five unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Kingsbury Corporation.
KT SPEARS: Court Slates Dec. 12 Plan Confirmation Hearing
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of South Carolina has
approved the amended disclosure statement, as filed on Nov. 3,
2011, for the amended plan filed by KT Spears Creek, LLC, dated
Nov. 3, 2011.
The Court fixed Dec. 5, 2011, as the last day for filing ballots
accepting or rejecting the plan.
The hearing on the confirmation of the plan will be held on
Dec. 12, 2011 at 1:30 p.m.
The Debtor proposes to reorganize its debts by reducing its total
debt, through the sale and development of the two unimproved
parcels, and the marketing and sale of the Greenhill Apartment
Complex. The proceeds from the sale of the property will be used
to repay the Debtor's creditors.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/ktspears.dkt136.pdf
As reported in the TCR on Sept. 26, 2011, the Plan designates 7
Classes of Claims and Interests.
Administrative Claims in Class 4 and Priority Claims in Class 5
are unimpaired under the Plan.
Class 1. Secured Claim of RBC Bank
RBC asserts a first priority secured claim of $22,494,711 on the
Debtor's 240 unit apartment complex as of the Petition Date.
The Debtor proposes to retain the 240-unit Greenhill Parish
Apartment Complex for a period of 2 years, during which the Debtor
will attempt to market the property and sell it for the benefit of
RBC Bank, or alternatively, refinance the loan with another
lender.
During the marketing period, the Debtor will continue to employ
Greystar as its property management company. Greystar will use
the funds received from the property rents to cover its costs and
expenditures as the property manager. Any funds received in
excess of the Greystar operating costs will be used to make
interest payments on the RBC debt.
The Debtor is proposing that the outstanding balance due to RBC
Bank be restructured and the excess funds be used to make payments
related to that balance. The note will accrue interest at 4%.
The revised note will pay RBC Bank 4% monthly interest over a two
(2) year term and any funds received in excess of the interest
will go to pay principal.
Class 2. Secured Claim of Plantation Federal
With respect to the Debtor's 66-acre raw land which is located
close to the Debtor's Greenhill Parish Apartments, first mortgage
holder Plantation Federal has agreed to give the Debtor 18 months
to market and sell the property, or market and develop the
property.
This agreement, which has not been finalized, calls for the Debtor
to meet certain milestones to stay in compliance with the
Plantation Settlement. The Debtor will have until March 15, 2012,
to sell the first $1,000,000 of Plantation Federal's collateral or
have a ready, willing and able purchaser of property that will net
Plantation Federal that amount of money.
If the Debtor meets this first milestone, the Debtor will have
until Sept. 15, 2012, to sell or have ready and willing buyers of
$1,000,000 net from the collateral.
If the Debtor meets this second milestone, the Debtor will have
until March 15, 2013, to dispose of all Plantation Federal
property or have a ready and willing buyer as defined by the
Plantation Settlement.
The Debtor believes that even after the sale of all of Plantation
Federal's collateral, a surplus of funds will be available to pay
to the unsecured creditors in Class 6, even after paying all Class
4 and 5 creditors.
Class 3. Secured Claim of First Palmetto
First Palmetto is the mortgage holder of the Two Notch Road
Frontage that is subject to a condemnation suit by the local
county government to convert part of the property into a turn lane
to handle increased traffic. Debtor proposes to assist First
Palmetto in addressing this condemnation suit so that First
Palmetto may achieve a favorable result. Any funds received from
the condemnation suit will be paid to First Palmetto, until First
Palmetto is paid in full.
First Palmetto has agreed to allow the Debtor 10 months to market
and sell the property in order to repay the debt and generate
funds in excess of the outstanding obligations. In exchange for
this time, the Debtor has agreed to make adequate protection
payments monthly to First Palmetto in the amount of $5,000.
Class 6. General Unsecured Creditors
No payment to the unsecured creditors will be made until such time
as the Debtor has sold assets to generate funds in excess of the
Secured Claims, the Administrative Claims, and the Priority
Unsecured Claims in Classes 1-5. The funds will only be paid pro
rata after the Debtor has finished its Claims objections,
but distributions to Class 6 creditors will only be made after the
payment of all Claims in Class 5. The Debtor believes significant
equity exists in the properties that would allow it to
make a distribution to the Unsecured Creditors in Class 6.
Class 7. Equity Interests
Class 7 is comprised of the Equity Interests of Kyle Tauch, whose
Equity Interests and any Claims he may hold will be treated as
subordinate to all other Claims against the Estate.
Holders of Equity Interests will receive a pro rata share of
distributions based upon the Equity Interests held as of the date
of confirmation, only after payment in full of Allowed Claims in
all prior Classes (Classes 1-6). As of the Effective Date, all
Equity Interests will be deemed only to represent the right to
receive distributions hereunder, and holders of Equity Interests
will be enjoined from transferring their Equity Interests or from
taking other action that may adversely impact the Estate,
including the taking of a worthless stock deduction.
About KT Spears
KT Spears Creek, LLC, in Houston, Texas, is a South Carolina
limited liability company that owns three parcels of property.
The Debtor has already developed Phase 1 of of a planned two-phase
apartment community. The other two parcels are in the
planning/marketing stages of development. The Company 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. G. William McCarthy, Jr., Esq., Daniel J. Reynolds,
Jr., Esq., and Sean P. Markham, Esq., at McCarthy Law Firm, LLC,
in Columbia, S.C., represent the Debtor as counsel.
RBC Bank is represented by:
R. William Metzger, Jr., Esq.
Thomas W. Bunch, II, Esq.
ROBINSON MCFADDEN & MOORE, P.C.
1901 Main Street, Suite 1200
Columbia, SC 29201
Tel: (803) 227-1130
Fax: (803) 744-1550
E-mail: bmetzger@robinsonlaw.com
tbunch@robinsonlaw.com
- and -
Constance L. Young, Esq.
JOHNSTON, ALLISON & HORD, P.A.
1065 East Morehead Street
Charlotte, NC 28204
Tel: (704) 332-1181
Fax: (704) 376-1628
E-mail: cyoung@jahlaw.com
LEHMAN BROTHERS: Bankruptcy Plan Supported by 95% of Creditors
--------------------------------------------------------------
In documents filed in the U.S. Bankruptcy Court for the Southern
District of New York, Lehman Brothers Holdings Inc. and its
affiliated debtors reported overwhelming support among every class
of creditors eligible to vote for their Third Amended Joint
Chapter 11 Plan. In total, the Plan and related settlements are
supported by 95% of creditors in number and 98% of creditors in
amount of those creditors who have voted. Every single class
voted to accept the Plan. A confirmation hearing is scheduled to
begin on Dec. 6, 2011 before Judge James M. Peck.
The Plan is supported by the Creditors' Committee; members of the
ad hoc group of senior bondholders; virtually all of the
proponents of the non-consolidation chapter 11 plan; numerous
holders of notes issued by Lehman Brothers Treasury Co. B.V., who
asserted substantial guarantee claims against LBHI; eight foreign
administrators managing 87 foreign affiliates; and most other
significant creditors.
In addition, Lehman said it has resolved the majority of the Plan
objections and informal comments through good-faith negotiations
and the addition of certain non-material amendments of the Plan.
Bryan Marsal, LBHI's Chief Executive Officer, said: "It has taken
Herculean effort by many people to reach this point. The
overwhelming support the Plan has received demonstrates that,
while reaching a mutual agreement among these disparate parties
was complex and challenging, it was worth the effort and was
clearly the right path to take."
Lori Fife, one of Lehman's lead bankruptcy attorneys, said: "To
approach confirmation with virtually unanimous support of
creditors who asserted claims in the amount of $450 billion is
unprecedented. The Global Settlements should avoid contentious
litigation and allow for accelerated distributions to creditors."
The Lehman bankruptcy is the largest and most complex in history.
Before the bankruptcy, Lehman Brothers had assets of $639 billion
on its balance sheet and operated as a truly global firm with over
7,000 legal entities in more than 40 countries. Lehman's
insolvency has resulted in over 75 separate and distinct
bankruptcy proceedings, with the non-United States proceedings
managed by a number of court appointed administrators,
liquidators, trustees, receivers, and like office holders.
LBHI and its affiliated chapter 11 debtors, through their
restructuring advisers at Alvarez & Marsal and their attorneys at
Weil, Gotshal & Manges LLP, filed the Third Amended Joint Chapter
11 Plan and Disclosure Statement with the United States Bankruptcy
Court for the Southern District of New York.
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)
LITTLETON APARTMENTS: All Creditors Paid 100% From Asset Sale
-------------------------------------------------------------
Littleton Apartments LLC and MS 128 Littleton Limited Partnership
have filed a disclosure statement to accompany their proposed
Joint Plan of Reorganization dated Nov. 10, 2011.
The Plan provides for the sale of substantially all of the assets
of Littleton, including the luxury property known as the Alexan
Downtown Littleton. The Debtors anticipate selling the property
for at least $60,000,000.
As a result of the sale, all creditors of the Debtors will receive
payment in full of all of their Allowed Claims. In the event that
the Sale is not consummated for any reason, the Plan provides for
the alternative treatment of reinstatement of certain claims which
will then be paid in accordance with the terms of the agreements
between such creditors and the Debtors, and the payment in full of
other Allowed Claims.
From and after the Effective Date, the Debtors will retain title,
ownership, possession, and control over the management of all
assets in their Estates.
The Debtors believe that all creditors and equity holders are
unimpaired under the Plan and no creditors or equity holders are
entitled or required to vote on the Plan.
The Holder of the Class 3 Allowed Senior Secured Claim against
Littleton (Estimated Amount: $40,568,366 will receive, on or as
soon as reasonably practicable after the latest of (i) the
Effective Date, or (ii) the Allowance Date with respect to the
Allowed Senior Secured Claim, an amount of Cash from the Net
Proceeds equal to the Allowed Senior Secured Claim, together with
postpetition interest for the period from the Petition Date
through the Effective Date.
The Holder of the Class 4 Allowed Mezzanine Secured Claim against
MS 128 (Estimated Amount: $13,514,399) will be satisfied and
discharged by the payment in full of the Allowed Mezzanine
Unsecured Claim under the Plan.
The Holder of the Class 5 Allowed Mezzanine Secured Claim against
Littleton (Estimated Amount: $13,514,399) will receive from
Littleton, on or as soon as reasonably practicable after the
latest of (i) the Effective Date, (ii) the Allowance Date with
respect to the Allowed Mezzanine Unsecured Claim, an amount of
Cash from the Net Proceeds equal to the Allowed Mezzanine
Unsecured Claim, together with postpetition interest for the
period from the Petition Date through the Effective Date.
Each Holder of a Class 6 Allowed General Unsecured Claim
(Estimated Amount: $184,378) will receive an amount of Cash equal
to the amount of such Allowed General Unsecured Claim, together
with postpetition interest at the Case Interest Rate for the
period from the Petition Date through the Effective Date.
The Holder of Interests in Littleton (Class 7A) and the Holders of
Interests in MS 128 (Class 7B) will retain their respective
Interests.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/littletonapartments.dkt128.pdf
Based in Dallas, Texas, Littleton Apartments LLC owns a newly
constructed 350-unit luxury apartment property in downtown
Littleton, Colorado, known as the "Alexan Downtown Littleton". MS
128 Littleton Limited Partnership owns 100% of the membership
interests in Littleton and has no other assets. Neither Littleton
nor MS 128 have any employees. The Property is managed by GREP
Southwest, LLC d/b/a Greystar, pursuant to a Management Agreement.
Littleton and MS 128 filed separate Chapter 11 petitions (Bankr.
N.D. Tex. Case Nos. 11-34564 and 11-34563) on July 14, 2011. The
cases are jointly administered. Judge Stacey G. Jernigan presides
over the cases. Patrick J. Neligan, Jr., Esq., at Neligan Foley
LLP, serves as counsel. Littleton Apartments disclosed $571,814
in assets and $54,293,432 in liabilities. Affiliate MS 128
Littleton Limited Partnership also filed its schedules disclosing
assets of $100 and liabilities of $0. The petitions were signed
by Timothy J. Hogan, vice president.
LOS ANGELES DODGERS: Fights With Fox About Hearing Agenda
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Los Angeles Dodgers baseball club and Fox
Entertainment Group Inc. can't even agree about the agenda for the
hearing Nov. 29, in bankruptcy court. The team believes the
bankruptcy judge will hold a full-blown hearing and decide if the
existing broadcasting agreement with Fox can be overridden by the
early solicitation of bids for the right to carry Dodgers games
beginning with the 2014 season.
According to the report, Fox contends that the hearing is a "mere
status conference," to use the team's words from a court filing.
The Dodgers reported in a court filing that the official
creditors' committee does not object to an extension of the club's
exclusive right to propose a Chapter 11 plan. The committee,
however, wants exclusivity pushed out only until Jan. 31, not the
full six months the Dodgers are seeking.
The report relates that the Dodgers contend that Fox made
"completely irrelevant" arguments against putting broadcasting
rights up for auction next year. The team contends Fox made
"personal attacks" on owner Frank McCourt "in desperation."
The baseball club argues that Fox's opposition to bidding for
telecasting rights is designed to drive down the price. Where Fox
contends it must know details of the settlement between the team
and the commissioner of Major League Baseball, the Dodgers contend
that the settlement is irrelevant to whether the bankruptcy court
has power to hold an auction for television rights. Although the
Dodgers announced reaching agreement with the commissioner early
this month to allow a sale of the entire team, the terms of the
agreement remain secret.
About 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. In its schedules, the LA Dodgers baseball club
disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA
Real Estate LLC disclosed $161,761,883 in assets and $0 in
liabilities.
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. Public relations specialist Kekst and
Company has been hired for crisis support. Covington & Burling
LLP serves as special counsel.
An official committee of unsecured creditors has been appointed in
the case. The panel has tapped Lazard Freres & Co. as financial
adviser and investment banker, and Morrison & Foerster LLP and
Pinckney, Harris & Weidinger, LLC as counsel.
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.
LUIS SOTO RIOS: 1st Cir. Affirms Ruling Over Mortgages
------------------------------------------------------
The U.S. Court of Appeals for the First Circuit affirmed decisions
by the lower federal courts rejecting the efforts of Luis Soto-
Rios and Brenda Tosado-Arbelo to avoid three mortgages, and to
prevent any post-petition actions that would perfect them.
In 2004 and 2005, the debtors executed the three mortgage deeds to
secure two loans. The mortgagee Banco Popular De Puerto Rico, in
turn, presented the documents for recording to the Registry of the
Property for Puerto Rico. Two deeds were presented in October
2004, and the third 10 months later in 2005. Due to an
administrative backlog, however, the three presented mortgage
deeds were still pending recordation when the debtors filed for
bankruptcy nearly three years later.
During the bankruptcy proceedings, Banco Popular filed a secured
proof of claim regarding the loan debts putatively secured by the
three mortgage deeds. In response, the debtors filed an adversary
proceeding asserting their right to avoid the mortgages under
certain provisions of the Bankruptcy Code, including the automatic
stay, the "strong arm" power and the avoidance of preferential
transfers. After an exchange of pleadings, the parties agreed
that the case could be resolved on summary judgment and
subsequently filed competing motions. The bankruptcy court
granted Banco Popular's motion and dismissed the debtors'
adversary action. In ruling that exceptions to the automatic stay
and strong arm power applied, 11 U.S.C. Sections 362(b)(3),
546(b)(1)(A), the court rejected the debtors' argument that, until
the deeds were fully recorded, Banco Popular lacked a pre-petition
property interest. The bankruptcy court also ruled that the
debtors failed to establish the necessary elements of a
preferential transfer, 11 U.S.C. Sections 547(b), 547(e)(1)(A).
After an unsuccessful appeal to the district court, the debtors
elevated the matter to the Appeals Court.
The appellate case is LUIS A. SOTO-RIOS; BRENDA TOSADO-ARBELO,
Plaintiffs, Appellants, v. BANCO POPULAR DE PUERTO RICO,
Defendant, Appellee, No. 10-2270 (1st Cir.). The panel consists
of Circuit Judges Kermit Victor Lipez, Kenneth Francis Ripple of
the Seventh Circuit, sitting by designation, and Jeffrey R.
Howard, who wrote the opinion. A copy of the Appeals Court's Nov.
23, 2011 decision is available at http://is.gd/7lCrFKfrom
Leagle.com.
The Debtors are represented in the appeal by:
Isabel M. Fullana, Esq.
GARCIA-ARREGUI & FULLANA, P.S.C.
165 Avenue Ponce De Leon #
San Juan, PR 00917
Lucas A. Cordova-Ayuso, Esq., and Patrick D. O'Neill, Esq., at
O'Neill & Gilomore, P.S.C., argued for the bank.
Luis A. Soto Rios and Brenda Tosado Arbelo, dba Ferrerteros Soto,
sought Chapter 11 protection (Bankr. D. P.R. Case No. 08-01890) on
March 29, 2008, are represented by Andres Garcia Arregui, Esq., at
Garcia Arregui & Fullana in San Juan, and disclosed $2,929,650 in
assets and debts of $2,894,962 at the time of the filing.
M WAIKIKI: Court OKs Bickel & Brewer as Special Litig. Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Hawaii authorized M
Waikiki to employ Bickel & Brewer as special litigation counsel,
nunc pro tunc to Aug. 31, 2011. Bickel & Brewer will advise,
counsel, and represent the Debtor in the pending litigation "M
Waikiki LLC v. Marriott Hotel Services, Inc., I.S. International
LLC and Ian Schrager," Index No. 65147/11, in the Supreme Court of
the State of New York, County of New York: Trial Term Part 3 as
well as any litigation in this court or any other court arising
out of or related to the disputes that are the subject of the New
York Litigation.
Bickel & Brewer will charge for its legal services at 50% of its
ordinary and customary rates in effect on the date services are
rendered, and, in consideration of its reduced fees, Bickel &
Brewer will have 20% contingent interest in the net proceeds, if
any, recovered in the Marriott Litigation.
The Debtor will reimburse Bickel & Brewer for its reasonable
costs.
The hourly rates of the professionals expected to have primary
responsibility for providing services to the Debtor are:
William A. Brewer III, partner $1,250
James S. Renard, partner $875
Michael S. Gardner, partner $725
Alexander D. Widell, partner $700
Anand Sambhwani, associate $425
David E. Matthiesen, director of consulting $625
About M Waikiki
M Waikiki owns the Modern Honolulu, a world-class, luxury hotel
property located close to Waikiki Beach in Hawaii. The hotel is
being managed by Modern Management Services LLC, an affiliate of
Aqua Hotels and Resorts.
M Waikiki is a Hawaii limited liability company with its principal
place of business located in San Diego, California. It is a
special purpose entity, having roughly 75 indirect investors,
which was formed to acquire the Hotel.
The Company filed for Chapter 11 protection (Bankr. D. Hawaii Case
No. 11-02371) on Aug. 31, 2011. Judge Robert J. Faris presides
over the case. Patrick J. Neligan, Esq., at Neligan Foley LLP,
and Simon Klevansky, Esq., at Klevansky Piper, LLP, represent the
Debtor. The Debtor tapped XRoads Solutions Group, LLC and XRoads
Case Management Services, LLC, as its financial and restructuring
advisor. Klevansky Piper LLP serves as its general counsel. The
Debtor disclosed $216,116,142 in assets and $135,085,843 in
liabilities as of the Chapter 11 filing.
Modern Management is represented by Christopher J. Muzzi, Esq.,
atMoseley Biehl Tsugawa Lau & Muzzi LLC.
Marriott Hotel Services, which used to provide management
services, is represented by Susan Tius, Esq., at Rush Moore LLP
LLP, and Carren B. Shulman, Esq., at Sheppard Mullin Richter &
Hampton LLP.
M&M STONE: Court Denies Extension to Obtain Bankruptcy Counsel
--------------------------------------------------------------
The Hon. Bruse I. Fox of the U.S. Bankruptcy Court for the Eastern
District of Pennsylvania denied M&M Stone Co.'s motion to extend
the time to obtain counsel.
On Oct. 20, 2011, the Court denied Debtor authority to employ
Gregory R. Noonan, Esq., and the law firm of Walfish & Noonan,
LLC, and directed the Debtor to obtain bankruptcy counsel
by Nov. 10, 2011.
The Debtor related that as of Nov. 11, 2011, it has not yet
obtained a bankruptcy counsel.
About M&M Stone Co.
Telford, Pennsylvania-based M&M Stone Co. owns a quarry with a
recycling center. The Company filed for Chapter 11 protection
(Bankr. E.D. Pa. Case No. 11-17266) on Sept. 18, 2011. Judge Eric
L. Frank presides over the case. The Company disclosed
$18,977,748 in assets and $8,987,589 in liabilities as of the
Chapter 11 filing. The petition was signed by Brian L. Carpenter,
president. As of Nov. 11, 2011, the Debtor has not yet obtained a
bankruptcy counsel.
Affiliate Drum Construction Company, Inc. (Bankr. E.D. Pa. Case
No. 11-14857) filed for Chapter 11 on June 17, 2011.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
four unsecured creditors to serve on the Official Committee of
Unsecured Creditors of M&M Stone Co.
M&M STONE: U.S. Trustee Wants Ch. 11 Case Converted or Dismissed
----------------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, asks the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to
dismiss or convert the Chapter 11 case of M&M Stone Co. to one
under Chapter 7 of the Bankruptcy Code.
The U.S. Trustee explains that as of the Nov. 14 filing of this
motion, the Debtor has not retained counsel to represent it in the
bankruptcy proceeding.
The U.S. Trustee notes that on Oct. 20, 2011, the Court denied the
Debtor's application for approval to employ the law firm of
Walfish & Noonan, LLC., to represent in the bankruptcy proceeding.
The U.S. Trustee avers that this corporation must have counsel to
represent it in this bankruptcy proceeding.
The U.S. Trustee is represented by:
Kevin P. Callahan, Esq.
Office of the U.S. Trustee
833 Chestnut Street, Suite 500
Philadelphia, PA 19107
Tel: (215) 597-4411
Fax: (215) 597-5795
About M&M Stone Co.
Telford, Pennsylvania-based M&M Stone Co. owns a quarry with a
recycling center. The Company filed for Chapter 11 protection
(Bankr. E.D. Pa. Case No. 11-17266) on Sept. 18, 2011. Judge Eric
L. Frank presides over the case. The Company disclosed
$18,977,748 in assets and $8,987,589 in liabilities as of the
Chapter 11 filing. The petition was signed by Brian L. Carpenter,
president. As of Nov. 11, 2011, the Debtor has not yet obtained a
bankruptcy counsel.
Affiliate Drum Construction Company, Inc. (Bankr. E.D. Pa. Case
No. 11-14857) filed for Chapter 11 on June 17, 2011.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
four unsecured creditors to serve on the Official Committee of
Unsecured Creditors of M&M Stone Co.
M&M STONE: Committee Seeks to Retain EisnerAmper as Accountants
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of M&M Stone Co.
seeks permission from the U.S. Bankruptcy Court for the Eastern
District of Pennsylvania to retain EisnerAmper LLC as its
accountants and financial advisors. The Committee has selected
EisnerAmper because of that firm's expertise in the matters upon
which it is to be engaged and its experience in insolvency matters
generally.
The Committee determined it was necessary to immediately retain
accountants and financial advisors to investigate the financial
affairs of the Debtor, including the formulation and evaluation of
a plan of reorganization, the investigation of potential avoidance
actions, and analysis of the Debtor's transactions with insiders
and affiliates, and other matters necessary to permit the
Committee to carry out its statutory duties and responsibilities.
Upon retention, EisnerAmper will:
(a) analyze the Debtor's books, records, financial and other
information to assess the Debtor's financial and
operational viability;
(b) analyze the Debtor's books, records, financial and other
information to determine potentially avoidable pre- and
post-petition transfers of money or property and
actionable related-party transactions and evaluate the
likelihood and sufficiency of defenses assertable by
defendants in connection with those potential avoidance
actions;
(c) analyze the Debtor's transactions with insiders and
affiliates;
(d) evaluate any plan of reorganization proposed by the Debtor,
including issues pertaining to the feasibility of any that
plan;
(e) review the Debtor's monthly operating reports and other
information filed with the Court concerning the Debtor's
postpetition operations and profitability; and
(f) do any other services which the Committee requests its
accountants and financial advisors to perform.
EisnerAmper says it is willing to render the foregoing
professional services and to be compensated therefore in
accordance with the firm's normal hourly rates.
Edward A. Phillips, a partner of EisnerAmper, assures the Court
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
About M&M Stone Co.
Telford, Pennsylvania-based M&M Stone Co. owns a quarry with a
recycling center. The Company filed for Chapter 11 protection
(Bankr. E.D. Pa. Case No. 11-17266) on Sept. 18, 2011. Judge Eric
L. Frank presides over the case. Gregory R. Noonan, Esq., at
Walfish & Noonan, LLC, serves as counsel to the Debtor. The
Company disclosed $18,977,748 in assets and $8,987,589 in
liabilities as of the Chapter 11 filing. The petition was signed
by Brian L. Carpenter, president.
Affiliate Drum Construction Company, Inc. (Bankr. E.D. Pa. Case
No. 11-14857) filed for Chapter 11 on June 17, 2011.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
four unsecured creditors to serve on the Official Committee of
Unsecured Creditors of M&M Stone Co.
M&M STONE: Committee Seeks to Retain Thorp Reed as Counsel
----------------------------------------------------------
The Official Committee of Unsecured Creditors asks permission from
the U.S. Bankruptcy Court for the Eastern District of Pennsylvania
to retain Thorp Reed & Armstrong, LLP, as its counsel. The
Committee seeks to retain Thorp Reed because of the firm's
experience and expertise in complex Chapter 11 cases.
Upon retention, Thorp Reed will:
(a) advise the Committee with respect to its powers and duties
under Section 1103 of the Bankruptcy Code;
(b) take all necessary actions to preserve, protect and
maximize the value of the Debtor's estate for the benefit
of the Debtor's general unsecured creditors, including but
not limited to, investigating the acts, conduct, assets,
liabilities, and financial condition of the Debtor, the
operation of the Debtor's business and the desirability of
continuing such business, and any other matter relevant to
these cases;
(c) prepare motions, applications, answers, proposed orders,
reports and papers that may be necessary to preserve and
further the Committee's interests in the Chapter 11 case;
(d) participate in the formulation of a plan as may be in the
best interests of general unsecured creditors of the
Debtor's estate;
(e) appear before the Court, any appellate courts, and protect
the interests of the Committee and the value of the
Debtor's estate before those courts;
(f) consult with the Debtor's counsel on behalf of the
Committee regarding tax, intellectual property, labor and
employment, real estate, corporate, litigation matters, and
general business operational issues; and
(g) perform all other necessary legal services and provide all
other necessary legal advice to the Committee in connection
with the Chapter 11 case.
The firm's hourly rates range from $175 to $510. Thorp Reed also
charge its clients in all areas of practice for all expenses
incurred.
Jeffery M. Carbino, Esq., assures the Court that Thorp Reed is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be contacted at:
Jeffrey M. Carbino, Esq.
THORP REED & ARMSTRONG, LLP
One Commerce Square
2005 Market Street, Suite 1000
Philadelphia, PA 19103
Tel: 215 640 8548
Fax: 215 640 8501
E-mail: jcarbino@thorpreed.com
- and -
William C. Price, Esq.
THORP REED & ARMSTRONG, LLP
One Oxford Centre
301 Grant St, Mth Floor
Pittsburgh, PA 15219
Telephone: 412 394 7776
Facsimile: 412 394 2555
E-mail: wprice@thorpreed.com
About M&M Stone Co.
Telford, Pennsylvania-based M&M Stone Co. owns a quarry with a
recycling center. The Company filed for Chapter 11 protection
(Bankr. E.D. Pa. Case No. 11-17266) on Sept. 18, 2011. Judge Eric
L. Frank presides over the case. Gregory R. Noonan, Esq., at
Walfish & Noonan, LLC, serves as counsel to the Debtor. The
Company disclosed $18,977,748 in assets and $8,987,589 in
liabilities as of the Chapter 11 filing. The petition was signed
by Brian L. Carpenter, president.
Affiliate Drum Construction Company, Inc. (Bankr. E.D. Pa. Case
No. 11-14857) filed for Chapter 11 on June 17, 2011.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
four unsecured creditors to serve on the Official Committee of
Unsecured Creditors of M&M Stone Co.
MANISTIQUE PAPERS: Seeks Extension to File Chapter 11 Plan
----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Manistique Papers Inc. is
seeking a four-month extension of its exclusive right to file
creditor-payment plan while it searches for a buyer for its
assets.
The Court will convene a hearing Dec. 13 to consider approval of
the request to set up sale procedures. No buyer is yet under
contract, and under the proposed rules, an auction will be held
Feb. 13. Initial bids would be due Feb. 8..
Manistique at the same hearing will request an extension until
April 13 of the exclusive right to propose a Chapter 11 plan.
About Manistique Papers
Manistique Papers Inc. operates a landfill in Manistique,
Michigan, whereby residuals resulting from paper production are
deposited. It owns a 125,000 ton-a-year plant making specialty
papers from recycled fiber. Manistique Papers filed for Chapter
11 bankruptcy protection (Bankr. D. Del. Case No. 11-12562) on
Aug. 12, 2011.
Godfrey & Kahn, S.C. represents the Debtor in its restructuring
effort. Morris, Nichols, Arsht & Tunnell LLP serves as its
Delaware bankruptcy co-counsel. Vector Consulting, L.L.C., serves
as its financial advisor. Baker Tilly Virchow Krause, LLC, serves
as its accountant.
The Official Committee of Unsecured Creditors appointed in the
Chapter 11 cases of Manistique Papers is represented by Lowenstein
Sandler PC as lead counsel and Ashby & Geddes, P.A., as Delaware
counsel. J.H. Cohn LLC serves as the panel's financial advisor.
Manistique Papers disclosed $19,688,471 in assets and $24,633,664
in liabilities as of the Chapter 11 filing.
MAQ MANAGEMENT: Plan Offers 10 Cents on Dollar to Unsec. Creditors
------------------------------------------------------------------
MAQ Management, Inc., Super Stop Petroleum, Inc., Super Stop
Petroleum, I, Inc., and Super Stop Petroleum IV, Inc., filed their
joint Disclosure Statement in support of their Amended Chapter 11
Plan of Reorganization with the U.S. Bankruptcy Court for the
Southern District of Florida.
The Debtor plans to auction several properties which will enable
the Claimants to receive the release prices for their respective
collateral in full satisfaction of their claims. In the event a
particular claimant's collateral is not sold above the release
price, the Debtor will surrender the collateral in full
satisfaction of the Claim. The Proposed Auction liquidates vacant
and/or non- or underperforming collateral and reduces the Debtors'
overall obligations by nearly $14 million.
The Debtors intend to sell its property at 1403 North Ocean in
Hollywood, Fla., pursuant to a state court settlement in full
satisfaction of BB&T's claim relating to the 1403 North Ocean
property, relieving the Debtors of $900,000 in obligations.
The order confirming the Plan will provide for the merger of MAQ,
SSP I and SSP IV with and into SSP, with SSP being the surviving
entity. After the Effective Date of the Order confirming the
Debtors' Plan, the Debtors will merge with SSP as the surviving
entity. Mahammad A. Qureshi will be the President and sole
Director of the reorganized Debtor post-confirmation. The post-
confirmation annual salary for Mr. Qureshi the first year
following the Effective Date will be $200,000 per year.
The Plan designates 16 Classes of Claims and Interests:
Class 1 - Priority Claims
Class 2 - County Tax Collectors
Class 3 - Branch Banking and Trust Company
Class 4 - Giant Oil, Inc.
Class 5 - Fifth Third Bank
Class 6 - 1st National Bank of South Florida
Class 7 - First State Bank of Arcadia
Class 8 - Wauchula State Bank
Class 9 - Iberia Bank
Class 10 - Premier American Bank, N.A.
Class 11 - Capital Bank, N.A. (f/k/a NAFH National Bank)
Class 12 - [INTENTIONALLY OMMITTEE]
Class 13 - General Unsecured Claims (of the Class 3?12 Claimants)
Class 14 - Unsecured Deficiency Claims
Class 15 - Related Party Unsecured Claims
Class 16 - Equity Interests of the Debtors
Holders of allowed Class 1 Priority Claims will be paid in full
within 30 days of the effective date of the Plan.
Secured creditors (Classes 3 through 11) will be paid from cash
flow generated from future operations and future income of the
Debtors. The precise treatment of the claims of secured creditors
in Classes 3 through 12 are found in pages 12 to 23 of the plan.
Upon default of the Plan provisions which is not cured by the
Debtors within 60 days of such default with respect to Classed 3
through 12, the Debtors consent to entry of a foreclosure judgment
with respect to the collateral securing the defaulted Claim.
The Allowed Class 13 General Unsecured Creditors claims will be
paid ten cents on the dollar of their allowed claims in 20 equal
quarterly installments beginning on the later of 90 days following
(x) the Effective Date or (y) the claims objection deadline,
except that those allowed Class 13 Claims totaling $1,000 or less
will not be paid in installments but will receive their entire pro
rata distribution in one lump sum within 365 days of the Effective
Date.
The Allowed Class 14 Unsecured Deficiency Claims of Classes 3
through 12, if any, will be paid their pro rata portion a lump sum
of $100,000 to be distributed by the Estates on a pro rata basis
in 20 equal quarterly installments beginning on the later of 90
days following (x) the Effective Date or (y) the claims objection.
The Allowed Class 15 Unsecured Claims of affiliates, insiders and
related parties of the Debtors will be subordinated to all allowed
claims to be distributed by the Estates and will receive no
distribution until the Debtors have made all payments due to the
Class 13 and Class 14 Creditors.
A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/MAQ_ds.pdf
About MAQ Management
Based in Boca Raton, Florida, MAQ Management, Inc., and three
other affiliates serve as commercial landlords to convenience
stores and gas stations in primarily in South Florida. They filed
for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to
11-26574) on June 15, 2011. Affiliates that sought Chapter 11
protection are Super Stop Petroleum, Inc., Super Stop Petroleum I,
Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball
presides over the case. MAQ Management estimated assets and
debts of $1 million to $10 million. Super Stop estimated assets
and debts of $10 million to $50 million. The petitions were
signed by Mahammad A. Qureshi, CEO.
Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at
McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L.,
in Tampa, Florida, serve the Debtors as substitute counsel.
The U.S. Trustee announced that until further notice, it will not
appoint a committee of creditors for the Debtors' cases.
stores and gas stations in primarily in South Florida.
As reported in the TCR on Oct. 21, 2011, MAQ Management, Inc., et
al., filed their Consolidated Chapter 11 Plan of Reorganization,
with the U.S. Bankruptcy Court for the Southern District of
Florida, in compliance with the Court's Order.
MATTRESS FIRM: Moody's Assigns 'B2' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
(CFR) and a speculative grade liquidity rating of SGL-2 to
Mattress Firm Holding Corporation (Mattress Firm), parent of
Mattress Holding Corp. The outlook is stable. In a separate
action, Moody's withdrew the B3 CFR and PDR of Mattress Holding
Corp. to reflect the consolidated entity's new reporting
structure. Mattress Holding Corp. is the sole operating entity of
Mattress Firm and the borrower under bank credit facilities which
are rated B1.
"The effective upgrade in the corporate family rating to B2
reflects the company's deleveraging as a result of its recent
IPO," said Moody's analyst Mariko Semetko. The upgrade also
recognizes the company's strong operating performance, driven by
solid comparable sales growth (averaging around 19% in the first
three quarters of 2011) and revenues from new store openings.
Moody's anticipates pro-forma debt/EBITDA to approximate 6.1x
(inclusive of Moody's standard analytical adjustment for operating
leases), based on operating performance for the twelve month
period ended August 2, 2011.
On November 23, 2011, Mattress Firm Holding Corporation completed
an initial public offering of its common stock. Proceeds of
approximately $98 million net of fees were used to repay about $85
million in unsecured debt ("2009 Loan Facility") and provide
working capital liquidity. Additionally, convertible and PIK notes
were converted to equity in conjunction with the offering,
resulting in approximately $180 million of total debt reduction
based on the debt balances reported as of August 2, 2011. Mattress
Holding Corp.'s $230 million term loan (rated B1) is the only
outstanding debt following the IPO. The company also has a $25
million revolver (rated B1) which is expected to remain undrawn
except for minor letters of credit uses.
RATINGS RATIONALE
The B2 corporate family rating reflects the company's high
financial leverage, its small scale and geographic footprint as a
regionally concentrated chain relative to globally rated
retailers, and its limited product diversification as a specialty
retailer. Its susceptibility to cyclical factors that impact
discretionary consumer spending is also a rating constraint. The
company's ongoing investments in new stores will limit free cash
flow available for meaningful debt reduction, accentuating the
importance of earnings growth for credit metric improvement. The
rating is supported by the company's good liquidity (as denoted in
the SGL-2) and its competitive position within its markets of
operation.
The stable outlook incorporates Moody's expectation for modest
credit metric improvements over the next 12 to 18 months despite
continued macroeconomic uncertainty. The outlook also reflects
Moody's expectations that Mattress Firm will continue to grow
earnings through new store expansion and comparable sales growth.
An upgrade is unlikely in the near term given the company's
limited track record as a publicly traded company, its small scale
and its high financial leverage. Moody's would consider an upgrade
with expectations for debt/EBITDA at 4.75x and EBITA/interest
expense sustained above 2.25x for a prolonged period.
Downward rating pressures will rise if macro economic factors and
consumer spending deteriorate such that same store sales or
margins decline. Ratings could be downgraded if debt/EBITDA was
sustained above 6.5x, EBITA/interest expense dropped below 1.25x,
or liquidity materially eroded.
Moody's took the following rating actions for Mattress Firm
Holding Corp.:
Corporate Family Rating assigned at B2
Probability of Default Rating assigned at B2
Speculative Grade Liquidity Rating assigned at SGL-2
Moody's took the following rating actions and modified LGD for
Mattress Holding Corp.:
$25 million senior secured revolving credit facility rating
affirmed at B1 (to LGD3, 38% from LGD2, 29%)
$230 million senior secured term loan rating affirmed at B1 (to
LGD3, 38% from LGD2, 29%)
Corporate Family Rating withdrawn at B3
Probability of Default Rating withdrawn at B3
The principal methodology used in rating Mattress Firm Holding
Corp. was the Global Retail Industry Methodology published in June
2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Mattress Firm Holding Corp. is a specialty retailer of
conventional and specialty mattresses, operating about 640 stores
throughout the Southern and Midwestern United States primarily
under the Mattress Firm banner. Revenues for the twelve month
period ended August 2, 2011 approached $600 million.
MF GLOBAL: CUSTOMERS' Plea for Commodity Brokers Committee Denied
-----------------------------------------------------------------
Bankruptcy Judge Martin Glenn denied David Rosen, Daniel Shak,
Gary Parziale, Michael Caponiti and David Kotz, commodities
customers of MF Global Inc.'s request for the appointment of an
official committee of commodity broker customers in MFGI's
liquidation proceeding under the Securities Investors Protection
Act.
On November 7, 2011, a group of commodity broker customers of MFGI
convened to form an ad hoc committee to protect their interests in
the SIPA Proceeding. The ad hoc group includes 66 commodity
customers.
Andrew P. DeNatale, Esq., at Stroock & Stroock & Lavan LLP, in New
York -- adenatale@stroock.com -- argued that the appointment of an
official committee of commodity broker customers is necessary and
appropriate in this SIPA proceeding. As reflected in the numerous
letters filed with the Court, customers are dependent upon a
prompt return of their customer property with which to continue
their businesses, he stressed.
Among other things, identification of the commodity customer
property estate, potential augmentation of that estate through
avoidance under Section 764 of the Bankruptcy Code, implementation
of regulations of the Commodity Futures Trading Commission
regarding the customer property estate and distribution of
customer property, which includes other property of the debtor in
the customer property estate to the extent there would be a
shortfall are all complicated issues where commodity customers
will benefit from a Customer Committee's participation and
oversight, Mr. DeNatale cited.
More importantly, the commodity broker customers have enormous
amounts of collateral frozen at MFGI, Mr. DeNatale stressed. It
appears that approximately $5.4 billion of commodity customer
funds were required to be segregated by MFGI, and over $600
million of those funds is reported missing, he said. Those funds
are the lifeblood of their businesses and must be returned to
their rightful owners in a prompt and fair manner, he emphasized.
Prompt distribution to these customers is critical to their
viability and thus safeguards the commodity future business as a
whole, he insisted.
While the Steering Committee does not question James W. Giddens,
the trustee for the liquidation of the business of MFGI under the
SIPA's diligence here, the oversight of a Customer Committee which
consists of business people cannot but help ensure the expeditious
resolution of the MFGI Proceeding, Mr. DeNatale averred. Any
protracted delay could be disastrous to MFGI's commodity customers
and to the markets in which they trade, he maintained.
The Steering Committee further asked that the Customer Committee
be initially consist of Messrs. Rosen, et al. The Steering
Committee also asked the Court to approve compensation of fees and
expenses of committee professionals as administrative expenses of
the commodity customer property estate.
Allowing the payment of fees and expenses of the Customer
Committee professionals would not only be permissible pursuant to
Section 105(a) of the Bankruptcy Code, it would be appropriate in
this case since these services are necessary and would provide a
clear benefit to MFGI's estate, Mr. DeNatale stated.
Mr. Rosen filed a declaration affirming the statements in the
Steering Committee's Motion.
In another request, the Commodity Customer Coalition asked the
U.S. Trustee for Region 2 to appoint a Customer Committee.
On November 17, 2011, representatives of the CCC met with the SIPA
Trustee and others in an effort to craft a unified approach to the
distribution of commodity customer funds to those whose funds have
been frozen in this proceeding. Unfortunately no resolution was
reached and the CCC believes now, more than ever, that the Court
should direct the U.S. Trustee for Region 2 to appoint a committee
comprised of the various factions which comprise the commodities
industry and are creditors in the SIPA proceeding.
Counsel to the CCC, Deborah L. Thorne, Esq., at Barnes & Thornburg
LLP, in New York -- deborah.thorne@btlaw.com -- argued that the
appointment of a balanced and representative committee comprised
of the various commodity industry creditor parties in this case
will both aid the SIPA Trustee in his job but will also provide a
voice for commodity industry creditors who have been so greatly
impacted by the inability to gain access to their segregated
accounts. There is no insurance for the commodity-related
interests as there are for the securities industry interests, she
said. Thus, it is extremely important that the commodity industry
and customers have a voice, and that the process be as transparent
as possible, she insisted.
Virginia Power Energy Marketing Inc., Dominion Energy Marketing
Inc. and Virginia Electric and Power Company supported the
Steering Committee's Motion to the extent the Court ensures that
the customers appointed to the Customer Committee are
representative of each diversely situated group of MFGI customers.
SIPA Trustee, et al., Object
The SIPA Trustee and other oversight agencies believe that the
requests to form a Customer Committee or a creditors' committee in
MFGI's proceeding is not supported by the SIPA and other
bankruptcy rules.
On behalf of the SIPA Trustee, James B. Kobak, Esq., at Hughes
Hubbard & Reed LLP, in New York, argued that the Customers
improperly attempt to establish a Customer Committee to be paid
from MFGI's commodity customer property estate. However, there is
no authority or precedent for the relief the Customers seek, he
pointed out. "The establishment of a self-nominated committee of
commodity broker customers with self-selected counsel that is
unrepresentative of differently situated commodities claimants,
securities claimants, and other creditors, in the unorthodox
manner sought by the Customers, would only serve to cause a
duplication of efforts and a waste of customer assets in a
proceeding in which efficient administration and preservation of
customer assets is the paramount concern," he insisted.
The Official Committee of Unsecured Creditors asserted that the
Customers' relief requires the Court to effectively rewrite
Section 705 of the Bankruptcy Code, which simply does not
authorize compensation for professionals to a committee from
estate resources in a Chapter 7 case. The Creditors' Committee's
counsel, Martin J. Bienenstock, Esq., at Dewey & LeBoeuf LLP, in
New York, pointed out that the Customers cannot articulate a
single example how the SIPA Trustee, the Chapter 7 trustee, and
the Securities Investor Protection Corporation will fail to carry
out their statutory duties and protect their interests.
On behalf of the SIPC, Christopher H. LaRosa, Esq., in Washington,
D.C. -- clarosa@sipc.org -- insisted that appointment of a
Customer Committee is unnecessary in light of the oversight and
participation in this proceeding by the SIPC as well as the role
of the Commodity Futures Trading Commission. Less than three
weeks into the liquidation, the SIPA Trustee sought and obtained
permission to transfer in bulk approximately three million open
commodity contract positions and approximately $1.5 billion in
associated collateral, and more recently, approximately $520
million as to about 21,000 commodities customers of MFGI, he told
Judge Glenn.
Tracy Hope Davis, the U.S. Trustee for Region 2, as amicus curiae,
submitted to the Court separate comments on the motions filed by
the Steering Committee and the CCC.
In response to the Steering Committee's Motion, Brian S. Masumoto,
Esq., U.S. trial attorney, argued that court appointment of a
committee clearly conflicts with Section 705(a), which calls for
the election of a committee by creditors that would also be
eligible to vote in a trustee election. He noted that the problem
with the proposed committee is that its membership is improperly
limited to customers holding commodities accounts at MFGI.
Moreover, a decision allowing Chapter 7 creditors' committee
professionals to be compensated
from the estate could lead to a significant increase in the number
of Chapter 7 creditors' committee elections, he stressed. Chapter
7
creditors' committees are very rare, he said. At best, Chapter 7
estates should not be burdened with committee professionals,
particularly given the small dividends generally available to
creditors in those liquidations, he stated.
As to the CCC's Motion, Mr. Matsumoto clarified that U.S. Trustees
do not appoint committees in Chapter 7. Rather, Section 705(a)
provides for the election of a committee of unsecured creditors at
the meeting held pursuant to Section 341(a) of the Bankruptcy
Code, he explained.
Bimbo Foods, Inc. and Bimbo Hungria Company asked the Court to
deny any payment of fees and expenses of the ad hoc customer
professionals as administrative expenses of the commodity customer
property estate.
Virginia Power, et al., is represented by:
Dion W. Hayes, Esq.
Shawn R. Fox, Esq.
McGUIREWOODS LLP
1345 Avenue of the Americas
Seventh Floor
New York, NY 10105
Tel: (212) 548-2100
Fax: (212) 548-2150
E-mail: dhayes@mcguirewoods.com
sfox@mcguirewoods.com
Bimbo Foods is represented by:
Geraldine Ponto, Esq.
BAKER & HOSTETLER LLP
45 Rockefeller Plaza
New York, NY 10111
Tel: (212) 589-4200
Fax: (212) 589-4201
E-mail: gponto@bakerlaw.com
* * *
In a memorandum of opinion explaining the Nov. 23 order, Judge
Glenn held that despite customers' frustration, the SIPA Trustee
has demonstrated that he is responsive to customers' concerns.
The bankruptcy judge determined that no authority exists for the
appointment of a Customer Committee. In the absence of statutory
authority, the Court concluded that it does not have the power to
grant the sought relief. "Even if the Court had the discretion to
authorize the appointment of an official committee in these
circumstances, I would not do so," Judge Glenn said.
The bankruptcy judge acknowledged that the concerns expressed by
customers in the MFGI Liquidation are real and substantial. "The
collapse of MFGI has given rise to a commodities broker
liquidation of immense scope and complexity," Judge Glenn stated.
Indeed, the SIPA Trustee reported on November 22, 2011 that the
actual shortfall may be in excess of $1.2 billion. Although SIPC
replaces missing stocks and other securities -- that is, "money,
stocks and other securities that are stolen by a broker or put at
risk when a brokerage fails for other reasons" -- where it is
possible to do so, the SIPC does not protect commodity futures
contracts, Judge Glenn noted.
The bankruptcy judge opined that the supposed benefits stated by
the Steering Committee are clearly the responsibility of the SIPA
Trustee with oversight by SIPC and the CFTC, subject to approval
of the Court. There is no role to be played by an official
committee, according to Judge Glenn.
Even if the Court could authorize election or appointment of a
Customers Committee in MFGI's case, the Court could not authorize
compensation for the committee's professionals from estate
property. In those Chapter 7 cases where a creditors' committee
is elected, Section 705 does not contemplate the payment of fees
and expenses of committee professionals as administrative
expenses, Judge Glenn stated.
"Mr. Giddens is a very experienced SIPA Trustee, represented by
very experienced counsel, with mandated oversight provided by
SIPC and the CFTC, and, of course, by the Court. MFGI's customers
can continue to participate actively in this case, as they have to
date, with or without the assistance of counsel. There is no
demonstrated need or justification to saddle this already heavily
burdened estate with the expenses attendant to an official
committee," Judge Glenn opined.
Thus, the Steering Committee Motion (and other motions seeking
similar relief) is denied, the bankruptcy judge ruled.
A full-text copy of the Nov. 23 memorandum opinion and order is
available for free at:
http://bankrupt.com/misc/MFGlobal_Nov23Opinion.pdf
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: SIPA Trustee Wins Nod to Make $520MM Distribution
------------------------------------------------------------
Judge Martin Glenn authorized James W. Giddens, the trustee for
the liquidation of the business of MF Global Inc. under the
Securities Investor Protection Act, to return a 60% distribution
to former MFGI customers that had only cash in their accounts as
of October 31, 2011 to approximately 21,000 customers with a total
of more than $869 million in cash, worth $520 million.
The SIPA Trustee, in coordination with the U.S. Department of
Justice, the Commodity Futures Trading Commission and other
regulators, and the Securities Investor Protection Corporation,
continues to conduct a thorough, deliberate, and independent
investigation of, among other things, the apparent shortfall in
property that MFGI should have segregated for its customers prior
to bankruptcy.
"The extent of the apparent shortfall is not known at this time,
but, aided by the guarantee of the CME, the SIPA Trustee has
determined that the extraordinary relief sought herein within
three
weeks of the filing date is prudent and consistent with the
purpose
of SIPA and the regulations of the CFTC to provide prompt but fair
treatment to customers to the extent possible," counsel to the
SIPA
Trustee, James B. Kobak, Jr., Esq., at Hughes Hubbard & Reed LLP,
in New York, told Judge Glenn. He added that the SIPA Trustee's
Motion complements the November 2 Bulk Transfer Order and the
expedited parallel claims process.
With respect to approximately 15,000 customers, the SIPA Trustee
determined that a cash transfer of approximately $520 million to
customers through one or more transferee futures commodity
merchants or FCMs is appropriate and would significantly advance
the equitable treatment of MFGI's former futures customers,
according to Mr. Kobak. Approximately 6,000 other customers with
small accounts also may be accommodated by the transfer, he
related. This figure represents a distribution of 60% of the
total
cash balances of the Cash-Only Customers, he said.
The distribution covered by the SIPA Trustee's Motion will be
based
upon the books and records of MFGI, with the reconciliation and
other information as the SIPA Trustee and his professionals deem
advisable, Mr. Kobak explained. As part of the expedited claims
process, all former customers of MFGI will be asked to submit a
claim. In compliance with the expedited claims process, the SIPA
Trustee will determine their final pro rata share of the customer
property -- and will true up any difference as between the net
equity of recipients and the amounts to be transferred, he stated.
The SIPA Trustee expects to be able to make one or more additional
interim distributions as part of the expedited claims process,
with
the goal of ensuring equal treatment of all of MFGI's customers in
advance of the final determination of the pro rata share to which
they are each entitled, Mr. Kobak disclosed.
The SIPA Trustee believes that the proposed distribution will not
result in over-payments, Mr. Kobak assured the Court. The Chicago
Mercantile Exchange Group, Inc. has agreed to continue cooperating
in these transfers, including providing accountings and other
assistance already, he noted. Indeed, the CME has proposed to
provide a $250,000,000 guarantee to the Debtor's estate to provide
security for the nonrecovery of potential overpayments, he stated.
The SIPA Trustee and CME continue to discuss the details of the
CME
Guarantee. This constructive commitment from the CME has given
the
SIPA Trustee additional assurance that a distribution of this
magnitude is prudent and in the best interests of customers and
the
markets generally, he maintained.
Before entry of the order, the CFTC said it supports the SIPA
Trustee's Motion as it will put in place mechanisms for the prompt
initiation of the claims process for MFGI commodity customers and
for the transfer to accounts accessible to those customers of 60%
of funds now held in cash-only commodity accounts with MFGI. The
CFTC added that it will continue to work diligently to identify
and
recover all MFGI commodity customer funds.
In a memorandum supporting the SIPA Trustee's Motion, the SIPC
stated that the SIPA Trustee's proposal to limit any distribution
to 60% of account property should protect against the risk that
any
distribution to a customer will exceed the amount to which that
customer is ultimately entitled in the liquidation as a result of
a
shortfall in customer property. If made, the $250 million
Guarantee would provide additional protection against the
realization of that risk, the SIPC said.
However, certain MFGI customers objected to the SIPA Trustee's
proposal, arguing that selective distributions are inequitable and
inconsistent.
The MFGI customers contended that limiting the distribution to
Cash-Only Customers will not constitute a ratable distribution to
all customers. Essentially, the SIPA Trustee's Motion would have
the unfortunate effect of furthering the disparate treatment among
former customers of MFGI that resulted from the previous
distribution by the SIPA Trustee, the MFGI Customers pointed out.
The MFGI customers also believe that the 60% distribution is
unjustifiably conservative. They demanded that the distribution
should be among all accounts and all customer property held or
controlled by the SIPA Trustee and that a distribution of 85% or
greater is appropriate.
Yield Curve Trading, LLC, sought to amend the SIPA Trustee's
request so that the 60% distribution applies to cash held as of
the
filing of the Bulk Transfer Motion, rather than October 31, 2011.
Mirae Asset Securities Co. Ltd. objects insofar as the SIPA
Trustee
with respect to the remainder 40% of the Customer Cash proposes a
Trueing Up, whereby as a result of the claims process the SIPA
Trustee will determined the final pro rata share of the customer
property to true up any difference as between the net equity of
recipients.
The other objecting MFGI Customers are:
* Lee B. Stern, Jeffrey Stern, Daniel Stern, Richard Stark,
Transcend Investments LLC and Steven M. Abraham Revocable
Trust.
* Royce Corporation
* Dearborn Capital Management LLC; Grant Park Fund LP;
Wedington Capitals Ltd.; Jonathan A. Reiss; Francis H.
Trainer, Jr.; Brandywine Symphony Preferred Fund, L.P.;
Windsail Holdings SA; Jaqston Trading Limited; AKBF
Investments Limited; Investment Company MG Securities LLC;
Diksion Trading Limited; Tribeca Ltd.; Nepless Trading Ltd.;
Exante Limited; Agrosugar Ltd.; Promton Investments Ltd.;
Bank Soyuz; Everest Trading SPC; Eldred Holdings Ltd.;
Teltor Global S.A.; Rich Hedging Investment; Gold Spectrum
Trading Co. Ltd.; Joystep International Asia Ltd.; John
Barrett; Larry Evangelides and Warren Louis DeMaio Trust.
* Christensen Farms & Feedlots, Inc.; New Fashion Pork LLP;
Schwartz Farms, Inc.; Schwartz Finishing LLC; and Wakefield
Pork, Inc.
* The Liteanu Group.
Green Eco Investments SA joined in Dearborn, et al.'s objection.
* * *
Per the Nov. 17 Order, Judge Glenn ruled that the SIPA Trustee
will
use his best efforts to complete (a) the transfers and
distributions to qualified FCMs that have agreed to accept the
Customer Cash for the benefit of MFGI's commodities futures
customers and (b) the "trueing up" as described in the SIPA
Trustee's request.
The SIPA Trustee -- upon advice and approval of the SIPC -- will
seek and may use the assistance of the Chicago Mercantile
Exchange,
and other registered derivatives clearing organizations that agree
to facilitate the transfers, and the Facilitating DCOs will
cooperate in the transfers, including providing accountings and
other assistance already and continuing to do so.
The transfers may not be avoided under Section 764(b) of the
Bankruptcy Code.
The Facilitating DCOs and participating FCMs are authorized to
consummate the transfers to the Transferees, and to take all other
actions reasonably necessary in furtherance thereof to complete
the
transfers directed by the SIPA Trustee, and will have no liability
for any actions taken in furtherance of this order consistent with
and in accordance with applicable law.
The automatic stay is vacated to the extent necessary to allow the
Facilitating DCOs to take any of the actions.
Judge Glenn acknowledged that the completion of the transfers is a
necessary step to implement the MFGI Liquidation Order and the
purposes of the SIPA liquidation as described at the time of
execution of the MFGI Liquidation Order.
RWA Raiffeisen Ware Austria AG and its subsidiary Genol
Gesellschaft m.b.H. & Co KG filed with the Court a statement in
support of various motions and letters to extend transfers beyond
customers.
RWA believes that the transfer that is currently being processed
pursuant to the SIPA Trustee's Motion should also cover RWA's and
Genol's "cash only" accounts. Otherwise the order granting the
Emergency Transfer Motion would perpetuate the preferential
treatment of CME customers who have already received 60% of their
collateral together with their open positions in the course of the
first "bulk transfer," RWA insists.
Messrs. Stern, et al., are represented by:
Sander L. Esserman, Esq.
Robert T. Brousseau, Esq.
Peter C. D'Apice, Esq.
David A. Klinger, Esq.
STUTZMAN, BROMBERG, ESSERMAN & PLIFKA
2323 Bryan Street, Suite 2000
Dallas, TX 25201-2689
Tel: (214) 969-4900
Fax: (214) 969-4999
E-mail: esserman@sbep-law.com
brousseau@sbep-law.com
d'apice@sbep-law.com
Royce Corp. is represented by:
Maria J. DiConza, Esq.
Kaitlin R. Walsh, Esq.
GREENBERG TRAURIG LLP
200 Park Avenue
New York, NY 10166
Tel: (212) 801-9200
Fax: (212) 801-6400
E-mail: diconzam@gtlaw.com
walshkr@gtlaw.com
Dearborn, et al., is represented by:
Michael J. Edelman, Esq.
VEDDER PRICE P.C.
1633 Broadway, 47th Floor
New York, NY 10019
Tel: (212) 407-7700
Fax: (212) 407-7799
E-mail: medelman@vedderprice.com
-- and --
Douglas J. Lipke, Esq.
William W. Thorsness, Esq.
VEDDER PRICE P.C.
222 North LaSalle Street, Suite 2600
Chicago, IL 60601
Tel: (312) 609-7500
Fax: (312) 609-5005
E-mail: dlipke@vedderprice.com
wthorsness@vedderprice.com
Christensen Farms, et al., is represented by:
Christopher J. Updike, Esq.
CADWALADER, WICKERSHAM & TAFT LLP
One World Financial Center
New York, NY 10281
Tel: (212) 504-6000
Fax: (212) 504-6666
E-mail: christopher.updike@cwt.com
-- and --
Peter M. Friedman, Esq.
CADWALADER, WICKERSHAM & TAFT LLP
700 Sixth Street, N.W.
Washington, D.C. 20001
Tel: (202) 862-2200
Fax: (202) 862-2400
E-mail: peter@friedman@cwt.com
The Liteanu Group is represented by:
Scott Adkins, Esq.
MENZER & HILL, P.A.
2200 N.W. Corporate Blvd., Suite 406
Boca Raton, FL 33431
Tel: (561) 327-7206
Fax: (561) 431-4611
E-mail: sadkins@menzerhill.com
Green Eco is represented by:
Michael T. Conway, Esq.
LECLAIR RYAN
885 Third Avenue, Sixteenth Floor
New York, NY 10022
Tel: (212) 430-8032
Fax: (212) 430-8062
E-mail: michael.conway@leclairryan.com
Yield Curve is represented by:
Jonathan L. Flaxer, Esq.
GOLENBOCK EISEMAN ASSOR BELL & PESKOE LLP
437 Madison Avenue
New York, NY 10022
Tel: (212) 907-7300
Fax: (212) 754-0330
E-mail: jflaxer@golenbock.com
Mirae is represented by:
Jui H. Lee, Esq.
SHIN & KIM
Ace Tower, 4th Floor
C.P.O. Box 8261
1-170, Soonhwa-dong, Jung-gu
Seoul 100-712, Korea
Tel: +(82) 2-316-4414
Fax: +(82) 2-765-6226
E-mail: jhynglee@shinkim.com
RWA is represented by:
Christopher R. Donoho, III, Esq.
HOGAN LOVELLS US LLP
875 Third Avenue
New York, NY 10022
Tel: (212) 918-3000
Fax: (212) 918-3100
E-mail: Chris.Donoho@hoganlovells.com
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: SIPA Trustee to Pay Out All $3.7 Billion in His Control
------------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported the trustee liquidating MF Global Inc., the commodities
broker, said his plans to distribute 60% of customers' collateral
will exhaust all of the $3.7 billion he brought under his control.
The trustee, James W. Giddens, said in a statement that the
shortfall in customers' collateral is $1.2 billion "or more."
The broker's trustee already transferred 14,500 accounts along
with
$1.5 billion in collateral. He is now in process of distributing
$520 million in cash. Giving 60% to customers with only cash in
23,300 accounts will consume the remaining $1.6 billion in the
trustee's control, according to his statement.
The brokerage trustee was given approval to return wire transfers
that were mistakenly sent to the firm after bankruptcy. The
bankruptcy judge authorized Mr. Giddens to charge a fee of 1%, or
no more than $5,000, for each wire he sends back.
The CME Group Inc. futures exchange said it is increasing its
"financial guarantee" to the broker's trustee to $550 million from
$250 million. The additional funds, according to CME Group, will
allow the trustee to distribute 75 percent in December rather than
60 percent, enabling the trustee to distribute $4 billion of the
$5.5 billion owing to customers.
In the statement, CME Group said it's "confident" that reports of
the larger $1.2 billion shortfall are "incorrect."
In other developments, Jon S. Corzine, MF Global's former chairman
and chief executive officer, was called to testify in Congress
next
week. He was also named as a defendant in a class action lawsuit.
Before joining MF Global, Corzine had been a U.S. senator from New
Jersey and the state's governor.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: SIPA Trustee Proposes Parallel Claims Processes
----------------------------------------------------------
James W. Giddens, the trustee for the liquidation of the business
of MF Global Inc., sought and obtained authority from Judge Glenn
to establish parallel claims processes for commodity futures
customer and securities customer claims.
The SIPA Trustee will follow the procedures set forth in the SIPA
for determining claims and making payments to securities
customers,
and, to the extent not inconsistent with the SIPA, will utilize
the
procedures prescribed in the Commodity Broker Liquidation
Provisions and the Part 190 Regulations for determining claims and
making distributions to commodity futures customers. General
creditor claims will be treated in accordance with the Bankruptcy
Code and SIPA.
The two parallel expedited customer claims proceedings will
advance
and streamline the review, determination and distribution process,
and help to facilitate potential interim distributions to
customers, insofar as the pool of customer property subject to pro
rata distribution to commodity futures customers is separate and
distinct from the pool of customer property subject to pro rata
distribution to securities customers (and only securities
customers
may be eligible for SIPC advances), James B. Kobak, Esq., at
Hughes
Hubbard & Reed LLP, in New York asserted.
Although separate, many procedural aspects of the two customer
claims proceedings will overlap as a result of practical
considerations and similar procedural requirements under SIPA, the
Commodity Broker Liquidation Provisions and the Part 190
Regulations. In general, the SIPA Trustee will take these
actions:
(A) Promptly making claim forms and instructions available for
download on the SIPA Trustee's Web site,
www.mfglobaltrustee.com to enable claimants to download and
submit completed claim forms promptly by mail to the Trustee,
and strongly encouraging customers with claims to do so in
order to expedite the claims process;
(B) Publication and mailing of the notice of commencement of this
proceeding along with claim forms and instructions to all
potential claimants identified in MFGI's books and records;
(C) Prompt review of claims, on a rolling basis, as they are
filed, and communication with individual claimants by
telephone and email to answer questions and obtain threshold
information that is missing from a customer's filed claim and
supporting documentation, which may be necessary to evaluate
claims and facilitate a potential interim distribution to
customers;
(D) Determination of claims, and resolution of disputes with
claimants who may object to the SIPA Trustee's determination,
by working with those claimants on an informal and
cooperative basis, and, as necessary, following formal
procedures for obtaining a hearing before the Court; and
(E) Distributions of customer property and general estate
property, including -- to the extent legally and practicably
possible -- interim distributions of customer property, to
satisfy allowed customer claims.
Specifically, the SIPA Trustee will cause the Notice of
Commencement to be published no later than December 2, 2011 in all
editions of The New York Times, all editions of The Wall Street
Journal, all editions of The Financial Times and all editions of
The Chicago Tribune.
The SIPA Trustee will cause these documents to be mailed to
persons
who, as identified from the Debtor's books and records, may
potentially assert claims as securities customers, commodity
futures customers, or general creditors, on or before December 2,
2011:
* Notice of Commencement;
* Securities Customer Claim Information (including Explanatory
Letter to Customers, Explanatory Letter to Broker-Dealers,
Securities Customer Claim Form Instructions, Securities
Customer Claim Form);
* Commodity Futures Customer Claim Information (including
Commodity Futures Customer Claim Form Instruction Letter and
Commodity Futures Customer Claim Form); and
* General Creditor Claim Information (including Explanatory
Letter to General Creditors and General Creditor Claim Form).
The SIPA Trustee will cause those documents to be made available
on
his Web site, www.mfglobaltrustee.com, for download, no later than
the day after the date of entry of this order.
The SIPA Trustee will have the authority, as provided in Section
78fff-2(b) of SIPA, to satisfy securities customer claims, insofar
as the claims agree with the Debtor's books and records, or are
otherwise established to the SIPA Trustee's satisfaction, without
further orders of the Court.
With respect to securities customer net equity claims, the SIPA
Trustee will have the authority to satisfy claims out of moneys
made available to the SIPA Trustee by the SIPC notwithstanding the
fact that there has not been any showing or determination that
there are sufficient funds of the Debtor available to satisfy such
claims.
With respect to securities customer claims relating to, or
securities customer net equities based upon, securities of a class
and series of an issuer which are ascertainable from the books and
records of the Debtor or are otherwise established to the
satisfaction of the Trustee, the SIPA Trustee will have the
authority to deliver securities of such class and series, if and
to
the extent available to satisfy those claims in whole or in part,
with partial deliveries to be made pro rata to the greatest extent
considered practicable by the SIPA Trustee.
The SIPA Trustee will implement the procedures prescribed in
Section 190.08 of Title 17 of the Code of Federal Regulations for
allocation and distribution of commodity futures customer
property,
to satisfy commodity futures customer claims, insofar as the
claims
agree with the Debtor's books and records, or are otherwise
established to the SIPA Trustee's satisfaction.
The SIPA Trustee will use these procedures for securities customer
claims, as defined in the SIPA, and commodity futures customer
claims, as defined in the Commodity Broker Liquidation Provisions
and the Part 190 Regulations, which are not allowed as filed:
(A) The SIPA Trustee will notify the claimant that he has
determined that the claimant's claim has been disallowed in
whole or in part or has otherwise not been approved for
satisfaction as filed.
(B) The claimant may file a written opposition to the SIPA
Trustee's determination in accordance with the instructions
included with the SIPA Trustee's determination. The claimant
will file the written opposition with the Bankruptcy Court in
accordance with local rules, and serve upon the SIPA
Trustee's counsel. The request will include: (i) the claim
number; (ii) a detailed statement of the reasons for the
claimant's objection to the SIPA Trustee's determination;
(iii) copies of any document or other writing upon which the
claimant relies; and (iv) mailing, phone, and email contact
information for the claimant.
(C) The SIPA Trustee will, within 120 days of the date on which
the claimant filed a written opposition to his determination,
use his best effort to schedule a status conference regarding
the claim determination dispute or file a motion seeking to
uphold his determination of the claim. If within 120 days of
the date that the claimant filed a written opposition, the
SIPA Trustee does neither of those actions, the claimant may
then ask the Court to schedule a hearing on the claim
determination dispute. Notwithstanding the procedures
outlined, the claimant and the SIPA Trustee may stipulate to
informally resolve their dispute and/or any extensions of any
of the timeframes without further leave of the Court.
(D) Prior to the SIPA Trustee's filing of a motion to uphold his
determination, or the claimant's allowed motion for a
hearing, no discovery or other motion practice will occur
regarding the SIPA Trustee's determination of claim or facts
giving rise to the determination, absent prior Court
approval.
(E) If a claimant fails to file a written opposition within
30 days of the mailing of the SIPA Trustee's determination or
if the claimant fails to appear at a scheduled hearing, then
the SIPA Trustee's determination shall be final.
The SIPA Trustee will have the authority to compromise and settle
any customer claim at any time, as appropriate, without further
order of this Court and all parties to this proceeding are
directed
to cooperate with the SIPA Trustee to the maximum extent possible
to achieve swift resolution of claims where possible.
Any claim of a securities customer for net equity under the SIPA
which is received by the Trustee after the expiration of a 60-day
time period beginning on the date of publication of the Notice of
Commencement need not be paid or satisfied in whole or in part out
of customer property, and, to the extent the claim is satisfied
from monies advanced by the SIPC, it will be satisfied in cash or
securities as the SIPA Trustee determines is most economical to
the
estate.
Judge Glenn established bar dates for these claims:
January 31, 2012 -- the bar date for Claims of
commodity futures Customers.
January 31, 2012 -- the bar date for receiving the
maximum possible protection for
securities customer claims under
the SIPA.
June 2, 2012 -- the bar date for general claims.
Claims against the Debtor in this proceeding will be filed with
the
SIPA Trustee electronically online at www.mfglobaltrustee.com, or
sent to the SIPA Trustee via certified mail, return receipt
requested, through the SIPA Trustee's claims agent, Epiq
Bankruptcy
Solutions, LLC at:
(i) for delivery via first class mail, MF Global Inc. Claims
Processing Center, c/o Epiq Bankruptcy Solutions, LLC,
P.O. Box 3656, Portland, OR 97208-3656; or
(ii) for delivery via overnight courier or hand delivery, MF
Global Inc. Claims Processing Center, c/o Epiq Bankruptcy
Solutions, LLC, 10300 SW Allen Blvd., Beaverton, OR 97005.
In furtherance of the SIPA Trustee's efforts to communicate with
and provide information to customers and creditors, a meeting of
customers and creditors will take place on January 12, 2012 at
10:00 a.m., at the New York Marriott Downtown, 85 West Street, New
York, NY 10006.
The SIPA Trustee will also file his first report pursuant to
Section 78fff-1(c) of the SIPA within six months after publication
of the Notice of Commencement, and will file interim reports at
least every six months thereafter. The SIPA Trustee will also
file
status updates regarding implementation of this Order every 60
days
from November 23, 2011, but those status updates will not be
duplicative of interim reports.
Nothing in this order will prevent the U.S. Trustee for Region 2
from agreeing to procedures for intercompany claims as the SIPA
Trustee may determine is in the best interests of the MFGI estate,
Judge Glenn clarified.
In another filing, the Securities Investor Protection Corporation
insisted that the SIPA Trustee's Motion provides the guidance
necessary to implement the provisions of the SIPA and to provide
for an orderly liquidation of the Debtor. Separately, the
Commodity Futures Trading Commission expects that the SIP Trustee
will use the mechanisms put in place to move as promptly as is
practicable and prudent to determine commodity customers' pro rata
share of MFGI customer funds, return funds to customers, and place
all customers on an equal footing.
Commodity Customers Object,
SIPA Trustee Files Omnibus Reply
The Commodity Customer Coalition and other customers of MFGI
objected to the SIPA Trustee's parallel claims processes.
Kathleen L. Matsoukas, Esq., at Barnes & Thornburg LLP, in
Chicago,
Illinois -- kathleen.matsoukas@btlaw.com -- counsel to the
Coalition argued that the most glaring flaw of the SIPA Trustee's
Motion is that it does not necessarily account for the priority
that commodity investors should receive. Indeed, the SIPA
Trustee's request seems to favor the SIPC in the liquidation. She
further pointed out that no creditor claims should be processed
until 100% of customer funds held in customer segregated accounts
have been returned. In an amended objection, the Coalition
complained that the SIPA Trustee refused input from the industry -
-
and clearly does not understand the industry, she asserted. At a
November 17, 2011 meet and confer session, counsel for the SIPA
Trustee argued that the only purpose of the meet and confer was to
discuss the claim form and left the meeting without discussing the
claim process itself, outside of the form, she stated.
Separately, Dearborn Capital Management LLC, et al., demanded for
a
more streamlined claims filing and objections procedures for
commodities claims.
Thomas A. Butler, Jr.; Stuart Satullo and Adam Loos pointed out
that the SIPA Trustee's Motion is vague about the length of time
it
will take to make final distributions of customer funds, sets
forth
no time estimates for most of the steps in the process, and where
there is a definite time period set forth a time period that is
needlessly long.
George Lichtenstein sought clear guidance as to the process for
the
return of his property and assurance that the property will not be
liquidated. Mr. Lichtenstein also asked the Court to establish
clear procedures for dealing with commodity customers' property,
including requests for return of specifically identifiable
property. In a supplemental objection, Mr. Lichtenstein proposed
certain customer protections, including separate notice to
customers who filed instructions for return of specifically
identifiable property before November 15, 2011, and that notice of
compliance with the Nov. 15 deadline will not result in
liquidation
of customer property.
Lee B. Stern, et al., insisted that the claims process should
provide expedited review of the claims of customers who have
received little of their property from the SIPA Trustee compared
with other types of claims, like customers having small trade
positions who are frozen out of accessing their cash balances or
other property.
Counsel to the SIPA Trustee, Mr. Kobak related that eight formal
objections, supplemental statements, and amended objections were
filed in response to the SIPA Trustee's Motion, 165 letters that
have been received by the Court (most of which do not address the
SIPA Trustee's Motion), and numerous additional informal limited
objections that were received via e-mail or phone. A list of the
letters is available for free at:
http://bankrupt.com/misc/MFGlobal_CustomerLetters.pdf
At the Court's directive, on November 17, 2011, the SIPA Trustee's
counsel, along with a representative of the CFTC, held a meet and
confer session with more than two dozen participants, to address
and resolve the Objections. Mr. Kobak pointed out that many of
the
Objections -- both formal and informal-- raise common objections,
suggestions and concerns. In response to the Objections, and in
order to clarify and improve the expedited claims process for the
benefit of customers, the SIPA Trustee incorporated many of the
suggestions and much of the feedback received and has sought to
address potential claimants' concerns by amending the proposed
forms and proposed order.
A chart listing each of the Objections (both formal and informal),
and the SIPA Trustee's corresponding responses and amendments is
available for free at:
http://bankrupt.com/misc/MFGlobal_ClaimsProcsObjsSumm.pdf
A full-text copy of the amended proposed order is available for
free at:
http://bankrupt.com/misc/MFGlobal_RevPropClaimsProcsOrd.pdf
Mr. Kobak told Judge Glenn that the SIPA Trustee has addressed and
resolved the majority of the objections, suggestions, concerns and
feedback interposed by the Objections by amending the proposed
forms and the proposed order. Notably, the proposed claims
process
for securities customers was not the subject of any specific
Objection, he said. Counsel for the SIPA Trustee is available and
will, to the extent possible, provide sought information and
respond to and answer specific questions that those claimants may
have. As to other concerns, the SIPA Trustee insisted that it
sought approval of the parallel customer claims process without
prejudice to additional alternative efforts to return customer
property.
In a supplemental response, the SIPC clarified that neither it nor
the SIPA Trustee sought to alter the priorities governing the
distribution of customer property owed to commodities customers.
The SIPC maintained that the procedures adopted by the SIPA
Trustee
with respect to "specifically identifiable property" fully
conformed with the applicable provisions of the Bankruptcy Code
and
the CEA regulations.
Mr. Lichtenstein is represented by:
George P. Angelich, Esq.
George V. Utlik, Esq.
ARENT FOX LLP
1675 Broadway
New York, NY 10019-5874
Tel: (212)484-3900
E-mail: angelich.george@arentfox.com
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: Bank of America Proposes Trading Via Ethical Wall
------------------------------------------------------------
Bank of America, N.A., and its affiliates seek permission from
Judge Glenn to trade in the securities upon the establishment and
implementation of "ethical wall."
Specifically, BofA asks the Court to determine that it and its
affiliates, acting in any capacity will neither violate their
fiduciary duties as a member of the Official Committee of
Unsecured
Creditors or otherwise, nor subject their claims to possible
disallowance, subordination or other adverse treatment by trading:
(i) stock, notes, including but not limited to these notes
issued by the Debtors: the 1.875% convertible notes, the
6.25% senior unsecured notes, the 3.375% convertible
senior notes, and the 9% convertible notes, bonds,
debentures, participations, bank loans, including, but not
limited to the Debtors' $1.2 billion unsecured revolving
credit facility and $300 secured subsidiary credit
facility or derivatives based upon or relating to, any of
the Debtors' or their non-debtor affiliates' debt
obligations or equity interests; or
(ii) any other claims against or interests in any one or more
Debtors estates or their non-debtor affiliates that
constitute "Securities" within the meaning of applicable
United States or state securities laws or both, or the
securities laws of any other jurisdictions, whether or not
covered by Rule 3001(e) of the Federal Rules of Bankruptcy
Procedure as long as an Ethical Wall Entity that engages
in any transaction establishes and effectively implements
an Ethical Wall and procedures to prevent the misuse of
any material non-public information obtained as a result
of BofA's performance of Committee-related activities.
To that end, BofA intends to implement Ethical Wall procedures
designed to prevent trading personnel and investment personnel of
BofA from receiving any non-public information concerning the
Debtors through BofA personnel, representatives or agents
performing activities related to the Creditors' Committee.
Margot B. Schonholtz, Esq., at Wilkie Farr & Gallagher LLP, in New
York -- mschonholtz@willkie.com -- relates that BofA is directly
itself or is affiliated with investment advisors or managers that
provide investment-advisory services to institutional, pension,
mutual fund and high net-worth clients and affiliated funds and
accounts. BofA may also buy and sell the Securities for their own
portfolios. Although BofA owes fiduciary duties to the unsecured
claimholders of the Debtors' estates, it also has fiduciary duties
to maximize returns to its respective clients including through
trading the Securities, she stresses.
Thus, if BofA is barred from trading the Securities during the
pendency of the Debtors' Chapter 11 cases because of its duties to
other creditors, it may risk the loss of a beneficial investment
opportunity for itself or its clients and, may breach its
fiduciary
duty to such clients, Ms. Schonholtz asserts. In the alternative,
if BofA resigns from the Creditors' Committee, the role of the
Creditors' Committee and its duties to other creditors may be
compromised by virtue of BofA taking a less active role in the
reorganization process, she points out.
As evidence of its implementation of the procedures, Eric T. Sieke
of Bank of America, N.A. filed with the Court an Ethical Wall
declaration. A full-text copy of the Declaration is available for
free at
http://bankrupt.com/misc/BofA_EthicalWallDec.pdf
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: Elliott Mgt. Wins Nod for Information Blocking Protocol
------------------------------------------------------------------
Judge Martin Glenn approved Elliott Management Corp. and its
affiliates' information blocking procedures, which are designed to
prevent the misuse of Official Committee of Unsecured Creditors
information and which are acceptable to the U.S. Trustee for
Region 2 or otherwise consistent with those policies and
procedures.
Judge Glenn ruled that Elliott will not violate its duties as a
Committee member and, accordingly, will not subject its claims to
possible disallowance, subordination, or other adverse treatment,
by trading in the Covered Claims during the pendency of the
Debtors' Chapter 11 cases, provided that Elliott establishes and
effectively implements and strictly adheres to the information
blocking procedures detailed in the Screening Wall Declarations or
otherwise approved in writing by the U.S. Trustee and ordered by
the Court. Likewise, Elliott's trading in the Covered Claims will
not constitute a breach of this order provided that it establishes
and effectively implements and strictly adheres to the information
blocking procedures detailed in the Screening Wall Declarations or
otherwise approved in writing by the Office of the U.S. Trustee,
according to the bankruptcy judge.
Should any entity related to or affiliated with the Debtor file a
bankruptcy petition at any time after the entry of this order, and
should Elliott contemplate trading in that new debtor's Covered
Claims, Elliott will file additional disclosures articulating the
informational blocking procedures that will be implemented by
Elliott that are designed to prevent the misuse of Committee
information. In the event that any other individual Elliott
representative is chosen to replace Elliott's representative on
the
Creditors' Committee, the individual will deliver to the U.S.
Trustee a declaration affirming his or her compliance with the
screening procedures described herein prior to accepting any
responsibilities in connection with these Chapter 11 Cases.
Nothing in this order will prejudice the right of the U.S. Trustee
to take the action as she deems appropriate in these Chapter 11
cases, including the removal of any Creditors' Committee member
pursuant to Section 1102 of the Bankruptcy Code.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: L. Stern, et al., Asks OK for Withdrawal of Property
---------------------------------------------------------------
Lee B. Stern and certain futures and commodities traders ask the
Court to lift the automatic stay to permit them to withdraw, or
cause to be transferred to accounts maintained at one or more
different registered Futures Commission Merchants, their
specifically identifiable property and the highest percentage of
their other MF Global account assets as the Court determines would
be fair, equitable and otherwise appropriate.
The moving parties are Mr. Stern, Jeffrey Stern, Daniel Stern,
Richard Stark -- the Warehouse Receipt Claimants -- and Trascend
Investments LLC and Steven M. Abraham Revocable Trust -- Cash
Claimants.
Peter C. D'Apice, Esq., at Stutzman, Bromberg, Esserman & Plifka,
in Dallas, Texas, asserts that all the Claimants have been and are
being subjected to great hardship by the uncertainty and delay in
materially reuniting them with so much of their property from
their
accounts with MF Global that the ratable distribution by the SIPA
Trustee contemplated by Section 766(h) of the Bankruptcy Code may
still be accomplished. Due to MF Global's status until late last
month as clearing firm for a large percentage of commodity and
futures traders and a large volume of trades in the broader
market,
the ongoing confusion, delay, and
disruption associated with its liquidation threatens their ability
to continue commodity and futures trading, he stresses.
As widely reported, approximately $600 million of additional
customer funds are missing, which means that MF Global would have
almost 90% of the segregated customer funds it is supposed to
have,
Mr. D'Apice states. That alone puts the SIPA Trustee on a firm
footing for a substantial interim distribution, he insists. In
addition, the CME Group announced that it was willing to provide
the Trustee a $250 million guarantee, which puts the SIPA Trustee
on even firmer ground for returning substantial property to MF
Global account holders on an interim basis-- even above the 90%
threshold -- very soon, he points out. "It would seem therefore,
that the Claimants and others similarly situated could be reunited
almost immediately with a substantial percentage of their MF
Global
account assets, thus greatly minimizing their individual hardships
and the ongoing disruption of the
larger commodities and futures trading market," he tells Judge
Glenn.
Accordingly, lifting the stay to permit the Claimants to access
90%
or thereabouts of their MF Global accounts while maintaining the
remaining portion under the SIPA Trustee's control subject to a
future claims process is a solution, Mr. D'Apice maintains.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MF GLOBAL: Senator Calls On Corzine to Testify at Hearing
---------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Sen. Debbie
Stabenow (D., Mich.) Monday called on Jon Corzine, the former
chief executive of MF Global Holdings Ltd., to testify at a Dec.
13 hearing about funds missing from the failed broker-dealer.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
MINE RECLAMATION: Lobel Firm Approved as Substitute Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
authorized Mine Reclamation, LLC, to substitute Natalie C.
Boyajian and Sharon Z. Weiss, at Holme Roberts & Owen, LLP with:
William N. Nobel and Mike D. Neue
LOBEL FIRM, LLP
840 New Port Center Drive, Suite 750
Newport Beach, CA 92660
Tel: (949) 999-2860
as counsel.
Mine Reclamation, LLC, filed for Chapter 11 bankruptcy (Bankr.
C.D. Calif. Case No. 11-43596) on Oct. 30, 2011, estimating
$50 million to $100 million in assets. Judge Scott C. Clarkson
presides over the case. Natalie C Boyajian, Esq., and Sharon Z.
Weiss, Esq. -- natalie.boyajian@hro.com and sharon.weiss@hro.com
-- at Holme Roberts & Owen LLP, served as the Debtors' counsel.
NATIONAL GRAPHICS: Section 341(a) Meeting Scheduled for Dec. 21
---------------------------------------------------------------
The U.S. Trustee for Region 11 will convene a meeting of creditors
Corporation/Partnership Asset Case of National Graphics, Inc. on
Dec. 21, 2011, at 10:00 a.m. The meeting will be held at in
Milwaukee, U.S. Courthouse, Room 428.
The deadline to file a complaint to determine dischargeability of
certain debts is set for Feb. 21, 2012.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
National Graphics, Inc. filed a Chapter 11 petition (Bankr. E. D.
Wi. Case No. 11-36818) on Nov. 7, 2011 in Milwaukee, Wisconsin,
Leonard G. Leverson, Esq. at Leverson & Metz S.C. in Milwaukee,
Wisconsin serves as counsel to the Debtor. The Debtor estimated
up to $50 million in assets and up to $10 million in liabilities.
NETFLIX INC: S&P Lowers Corp. Credit Rating to 'BB-' on Net Loss
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Los
Gatos, Calif.-based Netflix Inc. to 'BB-' from 'BB'. The rating
outlook is stable.
"At the same time, we lowered our issue-level rating on the
company's debt by one notch in conjunction with the downgrade. The
recovery rating on the debt issue remains unchanged," S&P said.
"The 'BB-' corporate credit rating and stable outlook on Netflix
reflect," said Standard & Poor's credit analyst Andy Liu, "our
expectation that escalating content commitments will lower
profitability over the intermediate term, international expansion
will have a greater impact on overall profitability, and a return
of domestic subscriber growth could occur slightly later than we
initially expected." "While acknowledging Netflix's growing
programming commitments, we view the company as likely to maintain
moderate debt usage as it expands into international markets and
invests in new technology and content to grow market share."
"The stable outlook is based on our expectation of subscriber
growth in 2012. We are still concerned with the company's
escalating content costs and aggressive international expansion
plans. Netflix's profit warning for 2012 is driven by its
international expansion. If Netflix is unable to increase
domestic paid subscribers at a rate commensurate with its
spiraling content commitments (which grew to about $3.5 billion as
of Sept. 30, 2011, from about $1 billion at the end of 2010), we
could lower the rating. It is unlikely that we will raise the
rating over the near term. That would likely entail very healthy
subscriber growth, which more than offsets its growing content
commitments," S&P said.
NEWPAGE CORP: Court Allows Committee to Retain Advisor & Banker
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the official committee of unsecured creditors of NewPage
Corporation, et al., to retain Alvarez & Marsal North America LLC
as its financial advisor and Moelis & Company LLC as its
investment banker.
The Court granted the applications even without the guaranteed
completion fee. The Court will consider completion fee requests
of Alvarez & Marsal and Moelis & Company at the conclusion of the
case under 11 U.S.C. Sec. 330 review.
The Committee indicated that it wanted the opportunity to consult
with Alvarez & Marsal and Moelis & Company to see if they were
willing to serve without a guaranteed completion fee and the Court
therefore scheduled a hearing for Dec. 1, 2011, at 10:00 a.m.
To avoid any confusion, the Court has ruled as stated above and
has not been asked to reconsider its ruling. If the Committee is
asking for reconsideration or has different terms to propose, it
must file an appropriate pleading asking for reconsideration of
the original terms or consideration of revised terms.
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.
At an organizational meeting of creditors held on Sept. 21, 2011,
the Committee selected Paul Hastings LLP as its bankruptcy
counsel. On Sept. 21, 2011, the Committee also selected Young
Conaway Stargatt & Taylor, LLP to act as its Delaware and
conflicts counsel.
NewPage Corp. prevailed over most objections from the official
creditors' committee and won agreement from the bankruptcy judge
on final approval of $600 million in secured financing.
Moody's Investors Service assigned a Ba2 rating to the
$350 million first-out revolving debtor-in-possession credit
facility and a B2 rating to the $250 million second-out debtor-in-
possession term loan for NewPage.
NEWPAGE CORP: Seeks to Employ Ciardi as Special Counsel
-------------------------------------------------------
NewPage Corporation and certain of its subsidiaries and affiliates
seek permission from the U.S. Bankruptcy Court for the District of
Delaware to employ Ciardi Ciardi & Astin as their special counsel,
nunc pro tunc to Oct. 27, 2011, primarily to represent them in
connection with issues relating to the official committee of
unsecured creditors' proposed employment of financial
professionals. The Debtors have selected Ciardi as their special
counsel because of the firm's experience and knowledge in business
restructurings under Chapter 11 of the Bankruptcy Code and, more
specifically, professional employment and compensation issues
arising in those bankruptcy cases.
The current hourly rates of Ciardi professionals are $250 to $560
for attorneys and $95 to $180 for paraprofessionals.
The Debtors agree to reimburse Ciardi for its expenses incurred
including, among other things, photocopying services, printing,
delivery charges and filing fees.
The Debtors attest that Ciardi is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code, a
modified by Section 1107(b).
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.
At an organizational meeting of creditors held on Sept. 21, 2011,
the Committee selected Paul Hastings LLP as its bankruptcy
counsel. On Sept. 21, 2011, the Committee also selected Young
Conaway Stargatt & Taylor, LLP to act as its Delaware and
conflicts counsel.
NewPage Corp. prevailed over most objections from the official
creditors' committee and won agreement from the bankruptcy judge
on final approval of $600 million in secured financing.
Moody's Investors Service assigned a Ba2 rating to the
$350 million first-out revolving debtor-in-possession credit
facility and a B2 rating to the $250 million second-out debtor-in-
possession term loan for NewPage.
NEWPAGE CORP: S&P Withdraws 'D' Ratings on Various Note Issues
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'D' issue-level
ratings on Miamisburg, Ohio-based NewPage Corp.'s first-lien
notes, second-lien notes, and senior subordinated notes. "We also
withdrew our '4' recovery rating on the company's first-lien
notes, indicating our expectation of average recovery (30% to
50%), and '6' recovery rating on the company's second-lien notes
and senior subordinated notes, indicating our expectation of
negligible recovery (0% to 10%)," S&P said.
The ratings actions follow the company's filing of a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code to implement
its restructuring plan on Sept. 7, 2011. NewPage plans to continue
operating its U.S. businesses as usual during the Chapter 11
restructuring and has obtained debtor-in-possession (DIP)
financing, consisting of a $250 million DIP term loan and a $350
million DIP revolving credit facility.
"As of Nov. 28, 2011, we continue to estimate NewPage's gross
enterprise value for recovery purposes at about $1.4 billion, and
so our recovery projections for these obligations remain unchanged
notwithstanding the $250 million DIP term loan and the potential
for DIP revolving borrowings," S&P said.
NEWPAGE CORP: Plum Creek Seeks to End Fiber Supply
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Plum Creek Timber Co. believes it has the right to
stop supplying wood fiber even though paper maker NewPage Corp.
filed for Chapter 11 protection in September. To insure there is
no inadvertent violation of the automatic stay, Plum Creek filed
papers in U.S. Bankruptcy Court in Delaware for a ruling that the
fiber-supply agreement is a forward commodity contract that can be
terminated regardless of bankruptcy.
According to the report, Plum Creek, based in Seattle, explains
how it signed NewPage to a 10-year contract in 2005. Over the
years, Plum Creek says it sold $111.7 million in fiber to NewPage.
Plum Creek believes the contract qualifies as a forward
commodities contract under the Bankruptcy Code. If it's correct,
bankruptcy law contains an exception to the automatic stay
allowing Plum Creek to terminate as a result of NewPage's
bankruptcy.
There will be a hearing in bankruptcy court on Dec. 13 for
permission to give a notice terminating the obligation to supply
wood fiber in 2012.
About NewPage Corp.
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, 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.
At an organizational meeting of creditors held on Sept. 21, 2011,
the Committee selected Paul Hastings LLP as its bankruptcy
counsel and Young Conaway Stargatt & Taylor, LLP to act as its
Delaware and conflicts counsel.
NewPage prevailed over most objections from the official
creditors' committee and won agreement from the bankruptcy judge
on final approval of $600 million in secured financing.
Moody's Investors Service assigned a Ba2 rating to the
$350 million first-out revolving debtor-in-possession credit
facility and a B2 rating to the $250 million second-out debtor-in-
possession term loan for NewPage.
NNN 2400: Wants to Complete Financing 60 days After Dec. 22
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
will convene a hearing on Dec. 15, 2011, at 2:00 p.m., to consider
NNN 2400 West Marshall 19, LLC's request to extend time to
complete refinancing.
The Debtor seeks for an order (i) extending the date by which it
must complete refinancing of secured creditor's collateral from
Dec. 22, 2011, to a date 60 days after the order. The Court, on
Oct. 17, entered an order resolving calculation of amount due to
secured creditor MLMT 2005-CIP1 West Marshall Drive, LLC, and
extending time to complete refinancing.
According to the Debtor, there seems to be no scenario that the
order will become final before Dec. 22, 2011, or in time for
Debtor to complete its refinancing. The Debtor relates that it
has made significant progress toward refinancing, including
securing a potential lender, G.E. Commercial Finance Business
Property Corporation, who would loan $6,500,000, but will not act
further until the order determining the amount due to secured
creditor becomes final. The completion of refinancing thereafter
will require at least 60 days, including the proper noticing and
bringing of appropriate motions before the Court for approval of
the refinancing and dismissal of these Chapter 11 proceedings
concurrent with the close of the refinancing escrow.
In a separate motion, MLMT 2005-CIP1 asks that the Court (i) amend
the payoff order to allow the payment of default interest to
holder in the amount of 408,912; and (ii) grant holder other and
further relief as is just and proper.
On Oct. 17, 2011, the Court entered the payoff order, which, among
other things, set the amount due at $5,919,525. The amount due
does not include any default interest.
The holder seeks entry of an order amending the payoff order to
grant holder default interest to which it is entitled under the
loan documents and pursuant to the Bankruptcy Code.
The holder states that it is clear that the Debtor knew or must
have known that holder did not intend to waive default interest.
The holder's counsel never, either verbally or in writing,
discussed the full waiver of default interest with the Debtor or
the Debtor's counsel.
MLMT 2005-CIP1 is represented by:
Charles R. Gibbs, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
1700 Pacific Avenue, Suite 4100
Dallas, TX 75201
Tel: (214) 969-2800
Fax: (214) 969-4343
- and -
Christina M. Padien, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
2029 Century Park East, Suite 2400
Los Angeles, CA 90067
Tel: (310) 229-1000
Fax: (310) 229-1001
About NNN 2400 West Marshall 19
NNN 2400 West Marshall 19, LLC, filed for Chapter 11 bankruptcy
(Bankr. S.D. Calif. Case No. 11-01454) on Jan. 31, 2011. Its
primary, if not sole, asset is an undivided 6.375% tenant-in-
common interest in real and personal property, known as Lockheed
Martin Office/Tech Center, located at 2400 West Marshall Drive, in
Grand Prairie, Texas. The sole tenant of the Property, Lockheed
Martin Corporation, has a leasehold interest with a three-month
cancellation provision. In its schedules, the Debtor disclosed
$11 million in total assets consisting of the TIC; and
$6.875 million in total liabilities. Darvy Mack Cohan, Esq. --
dmc@cohanlaw.com -- serves as the Debtor's bankruptcy
counsel.counsel.
NEXTWAVE WIRELESS: Extends Refinancing Deadline to Dec. 15
----------------------------------------------------------
NextWave Wireless Inc. disclosed that its senior note holders have
agreed to a further extension to Dec. 15, 2011 of the deadline for
the Company to complete a refinancing transaction. On Aug. 1,
2011, the Company entered into an agreement with the holders of
its secured notes pursuant to which such holders agreed to forbear
from exercising their respective rights and remedies in connection
with the Company's failure or anticipated failure to pay amounts
coming due under the agreements relating to each class of notes.
The forbearance agreement required the Company to complete a
refinancing transaction within a specified time frame, initially
set to expire on Sept. 30, 2011 and subsequently extended by the
senior note holders to Nov. 30, 2011. Any extension of the
forbearance period beyond Dec.15, 2011 will require the consent of
each of the Company's secured note holders.
NextWave continues to seek alternative financing to refinance and
extend its substantial secured debt, with an aggregate principal
amount of $983.6 million at Oct. 1, 2011, and its ability to
obtain such financing or alternative accommodations from its note
holders prior to the expiration of the forbearance period on
Dec. 15, 2011 remains subject to substantial risks. NextWave's
Senior Secured Notes, having an aggregate principal amount of $133
million at October 1, 2011, matured on July 17, 2011, and
NextWave's Senior-Subordinated Secured Second Lien Notes due 2011,
having an aggregate principal amount of $186.3 million at
Oct. 1, 2011, will mature on Nov. 30, 2011, and the holders of
such notes will be permitted to seek to enforce their payment
rights upon expiration of the forbearance period. In addition,
NextWave's Senior-Subordinated Secured Third Lien Notes due 2011,
having an aggregate principal amount of $664.3 million at
Oct. 1, 2011, will mature on Dec. 31, 2011. As previously
disclosed, NextWave's cash reserves are not sufficient to meet
these payment obligations at the current maturity dates.
Inability to obtain a refinancing transaction, maturity extension
or other accommodation from NextWave's noteholders prior to the
expiration of the term of the forbearance agreement would
significantly restrict the Company's ability to operate and could
cause it to seek relief through a filing in the United States
Bankruptcy Court. Any alternative financing and/or maturity
extension of NextWave's notes may be costly to obtain, and could
involve the issuance of equity securities that could cause
significant dilution to its existing stockholders.
The forbearance agreement and the contemplated refinancing
transaction were described in detail in NextWave's Current Report
on Form 8-K filed with the Securities and Exchange Commission on
Aug. 2, 2011.
About NextWave Wireless
San Diego, Calif.-based NextWave Wireless Inc. (OTC QB: WAVE)
-- http://www.nextwave.com/-- is a wireless technology company
that manages and maintains worldwide wireless spectrum licenses.
Bankruptcy Warning
The Company's current cash reserves are not sufficient to meet its
payment obligations under its secured notes at their current
maturity dates. Additionally, the Company will not be able to
consummate sales of its wireless spectrum assets yielding
sufficient proceeds to retire this indebtedness at the current
scheduled maturity dates. If the Company is unable to extend
maturity beyond 2011, or identify and successfully implement
alternative financing to repay the Senior Notes and Second Lien
Notes, the holders of the Company's secured notes could proceed
against the assets pledged to collateralize these obligations.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Insufficient capital to
repay the Company's debt at maturity would significantly restrict
its ability to operate and could cause the Company to seek relief
through a filing in the United States Bankruptcy Court. Any
alternative financing or maturity extension of the Company's
secured notes may be costly to obtain, and could involve the
issuance of equity securities that could cause significant
dilution to the Company's existing stockholders and potentially
limit the Company's net operating loss carry forwards.
Going Concern Doubt
As reported in the TCR on March 23, 2011, Ernst & Young LLP, in
San Diego, Calif., expressed substantial doubt about NextWave
Wireless's ability to continue as a going concern, following the
Company's 2010 results. The independent auditors noted that the
Company has incurred recurring operating losses and has a working
capital deficiency, primarily comprised of the current portion of
long term obligations of $784.6 million at Jan. 1, 2011, that is
associated with the maturity of its debt. "The Company currently
does not have the ability to repay this debt at maturity."
NORTHERN BERKSHIRE: Bondholders to Receive New MDFA & MHEFA Notes
-----------------------------------------------------------------
Northern Berkshire Healthcare, Inc., et al., have filed a first
amend disclosure statement to accompany the Debtors' first amended
plan of reorganization.
Pursuant to Section 4.3 of the Plan, each of the Debtors, as
Reorganized Debtors, will continue to exist on and after the
Effective Date as a separate legal entity, with all the powers
available to such legal entity under applicable law and pursuant
to the applicable New Constituent Documents.
Except for Class 5 ? Other Priority Claims ? all Classes of Claims
are Impaired under the Plan. Holders of Claims in Class 5 will be
paid in full in Cash. Holders are deemed to have accepted and are
not entitled to vote on the Plan.
If the Plan is confirmed by the Bankruptcy Court, the Holders of
Allowed Secured Claims related to the MDFA and MHEFA Notes will
respectively receive, in full satisfaction and discharge of their
Claims, the New MDFA Note and New MHEFA Note; the Holders of
Allowed Deficiency Claims related to the MDFA and MHEFA Notes will
respectively receive, in full satisfaction and discharge of their
Claims, the ECF Notes (and, if NARH or NBH affiliates with another
healthcare institution under certain conditions, the Affiliation
Notes). The non interest bearing ECF Notes have a 30 year term.
The amount of the new note in respect of the MDFA Note will be
$3,850,999. The amount of the new note in respect of the
MHEFA Note will be $8,149,001.
The Holder of the Allowed VNA Hoosac Bank Secured Claim will
receive proceeds of the sale of the VNA Building up to the Allowed
amount of its Secured Claim.
The Holders of Allowed Secured Claims unrelated to the MDFA and
MHEFA Notes or the VNA Building will each receive, in full
satisfaction and discharge of their Claims, a New Note secured by
the same collateral or other collateral of like value except as
otherwise provided in the Plan.
The Holders of Allowed PBGC Prepetition Claims, Allowed General
Unsecured Claims, and the Allowed VNA Hoosac Bank Deficiency Claim
will receive, in full satisfaction and discharge of their Claims,
their Pro-Rata Share of the Post-Effective Trust Interests.
All distributions under the Plan will be made on or as soon as
practicable after the Effective Date, except as otherwise provided
in the Plan.
About Northern Berkshire Healthcare
Northern Berkshire Healthcare, Inc. is a non-profit healthcare
corporation in northern Berkshire County, Massachusetts. Together
with its affiliates, Northern Berkshire Healthcare operates the
North Adams Regional Hospital and a visiting nurse association and
hospice in North Adams, Massachusetts.
Northern Berkshire Healthcare, Inc., North Adams Regional
Hospital, Inc., Visiting Nurse Association & Hospice of Northern
Berkshire, Inc., Northern Berkshire Healthcare Physicians Group,
Inc., and Northern Berkshire Realty, Inc., filed for Chapter 11
bankruptcy (Bankr. D. Mass. Case No. 11-31114) on June 13, 2011,
to address their overleveraged balance sheet and effect a
reorganization of their operations. On the same day, Northern
Berkshire Community Services, Inc., filed a petition for Chapter 7
relief also in the District of Massachusetts bankruptcy court.
Judge Henry J. Boroff presides over the Debtors' cases. Steven T.
Hoort, Esq., James A. Wright, III, Esq., Jonathan B. Lackow, Esq.,
and Matthew F. Burrows, Esq., at Ropes & Gray LLP, in Boston,
Mass., serve as the Debtors' bankruptcy counsel. The Debtors'
Financial Advisors are Carl Marks Advisory Group LLC. GCG Inc.
serves as claims and noticing agent.
Northern Berkshire disclosed $22,957,933 in assets and
$53,379,652 in liabilities as of the Chapter 11 filing. The
petition was signed by William F. Frado, Jr., president.
William K. Harrington, the U.S. Trustee for Region 1, appointed
five members to the official unsecured creditors' committee in the
Debtors' cases. The Committee tapped Duane Morris LLP as its
counsel.
OASIS AT WILD HORSE: Court Rejects Sanctions Against Fernandos
--------------------------------------------------------------
Chief Bankruptcy Judge James M. Marlar denied a motion for fees
and costs, in the nature of sanctions, filed by corporate
principals, Russell and Mary Sholes, in the chapter 11 case of
Oasis at Wild Horse Ranch, LLC. The Sholes seek $80,335.78 in
attorneys' fees and costs for their prevailing effort in gaining
early dismissal of the Debtor's voluntary Chapter 11 case. The
monetary award is sought -- not against the Debtor -- but against
the other corporate principals, Judy and Raynu Fernando.
According to Judge Marlar, the Sholes have cited no specific
statute, nor rule, under which their prayer for relief falls,
other than their general feeling that 11 U.S.C. Sec. 105(a), and
the court's "inherent powers," will remedy what they perceive as
an abuse of the bankruptcy system. The judge explained that in
the federal court system, courts follow the "American Rule" when
it comes to considering attorneys' fee awards. The American Rule
denies attorneys' fees to a litigant in federal court in the
absence of contract, applicable statute or other exceptional
circumstances.
"In the absence of binding authority from our Circuit or its
Bankruptcy Appellate Panel, which would authorize an award of fees
in the circumstances present [in the case], this court is
reluctant to rule favorably on the Sholes' plea," Judge Marlar
said. "For that relief, they will have to convince an appellate
court that this court's authority ranges that far afield. If
remanded, this court can then determine, with clear guidance from
a higher court, how best to proceed in order to resolve the
dispute."
A copy of Judge Marlar's Nov. 23, 2011 Memorandum Decision is
available at http://is.gd/Jgj1xVfrom Leagle.com.
Oasis At Wild Horse Ranch, LLC, in Tucson, Arizona, filed for
Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-01124) on Jan.
14, 2011. Elizabeth S. Fella, Esq., and Kasey C. Nye, Esq. --
elizabeth.fella@quarles.com and kasey.nye@quarles.com -- at
Quarles & Brady LLP, serve as the Debtor's counsel. In its
petition, the Debtor estimated $1 million to $10 million in assets
and under $1 million in debts. The petition was signed by Judy
Fernando, manager.
"In its essence, this case was delivered into the hands of the
bankruptcy court as a continuing outgrowth of a deadlocked battle
for control of the Debtor entity. This court perceived the
bankruptcy case was simply a tactical end-run, and that the real
dispute, by necessity and reason, had to be logically and legally
played out in other forums," Judge Marlar said.
OCEAN PLACE: Can Access AFP 104's Cash Collateral Until Nov. 30
---------------------------------------------------------------
U.S. Bankruptcy Judge Michael B. Kaplan has extended Ocean Place
Development LLC's right to use cash collateral of AFP 104 Corp.,
pursuant to the terms of the Final Order Authorizing Use of Cash
Collateral and providing adequate protection on Aug. 1, 2011, as
set in a budget, through and including Nov. 30, 2011.
A copy of the consent order extending the Debtor's use of cash
collateral is available for free at:
http://bankrupt.com/misc/oceanplace.dkt280.pdf
As reported in the TCR on Aug. 22, 2011, Judge Kaplan authorized,
on a final basis, Ocean Place Development LLC, to use the cash
collateral of AFP 104 Corp., until Oct. 18, 2011.
The Debtor would use the cash collateral to pay ordinary and
reasonable operating expenses.
As adequate protection for any diminution in value of the lenders'
collateral, the Debtors will grant AFP a replacement lien in the
Debtor's postpetition property and proceeds thereof, and a
superpriority administrative claims status.
About Ocean Place Development
Ocean Place Development, LLC, owns a beachfront resort property in
Long Branch, New Jersey. The Ocean Place resort is sited on 17-
acres featuring 1,000 feet of ocean frontage and is improved with
a 254-room hotel that includes 40,000 square feet of meeting
space, three restaurants, a bar/lounge, a full-service spa, and
numerous resort amenities. It employs between 95 and 340
employees, depending upon the season, through the property
management entity West Paces Hotel Group, LLC.
Ocean Place filed a voluntary Chapter 11 petition (Bankr. D. N.J.
Case No. 11-14295) on Feb. 15, 2011. Kenneth Rosen, Esq., John K.
Sherwood, Esq., and Wojciech F. Jung, Esq., at Lowenstein Sandler,
in Roseland, N.J., serves as the Debtor's bankruptcy counsel. The
Debtor estimated its assets and debts at $50 million to
$100 million.
As of the petition date, the Debtor owed $57,245,372 to AFP 104
Corp. pursuant to a Loan Agreement dated April 25, 2006, as
amended from time to time, entered into by and between the Debtor
as borrower and Barclays Capital Real Estate Inc. as lender.
Joseph L. Schwartz, Esq., and Kevin J. Larner, Esq., at Riker,
Danzig, Scherer, Hyland & Perretti LLP, in Morristown, New Jersey,
represents AFP 104 as counsel.
OILSANDS QUEST: Obtains Creditor Protection Under CCAA
------------------------------------------------------
Oilsands Quest Inc. has requested and obtained an Order from the
Alberta Court of Queen's Bench providing creditor protection under
the Companies' Creditors Arrangement Act (Canada). While under
CCAA protection, the Company will continue with its day to day
operations.
On Nov. 28, 2011, the third party that had signed a Letter of
Intent to purchase the Company's Wallace Creek asset notified
Oilsands Quest that they could not meet the terms of that Letter
of Intent. Negotiations on the proposed Wallace Creek sale have
ended, and the Board of Directors of Oilsands Quest has therefore
decided to seek CCAA protection after considering all available
alternatives. The Company has been hindered in recent months by
market and financial challenges, details of which will soon be
available on the website www.ey.com/ca/oilsandsquest. CCAA
protection stays creditors and others from enforcing rights
against the Company and affords Oilsands Quest the opportunity to
restructure its financial affairs. The Court has granted CCAA
protection until Dec. 21, 2011, to be further extended as required
and approved by the Court.
"We made the difficult decision to seek creditor protection
because we believe this step to be in the best interest of all our
stakeholders," said Garth Wong, Oilsands Quest Chief Executive
Officer. "We have been actively seeking options to manage our
liquidity and to raise the capital we need to proceed with
developing our assets. To protect those assets and find a
solution that will enable them to be developed, we are seeking
options to restructure our affairs up to and including the sale of
the company."
While under CCAA protection, the Board of Directors maintains its
usual role and management of the Company remains responsible for
the day to day operations, under the supervision of a Court-
appointed monitor, Ernst & Young Inc., who will be responsible for
reviewing Oilsands Quest's ongoing operations, assisting with the
development and filing of a Plan of Arrangement that is
established by management, liaising with creditors and other
stakeholders and reporting to the Court. The Board of Directors
and management will be primarily responsible for determining
whether a Plan for restructuring the Company's affairs is
feasible. Affected stakeholders will have an opportunity to vote
on the Plan. Before the Plan is implemented it must be approved
by the requisite number and value of affected stakeholders
contemplated by law and approved by the Court.
CCAA protection enables the Company to continue with its day to
day operations until the CCAA status changes. The implications of
this process for Oilsands Quest shareholders will not be known
until the end of the restructuring process. If the affected
stakeholders do not approve a Plan in the manner contemplated by
law, Oilsands Quest will likely be placed into receivership or
bankruptcy. If by Dec. 21, 2011, Oilsands Quest has not filed a
Plan or obtained an extension of the CCAA protection, creditors
and others will no longer be stayed from enforcing their rights.
Oilsands Quest will issue a further press release on or before
Dec. 21, 2011 to provide an update.
The NYSE Amex ("NYSE") has halted trading in the common shares of
the Company (symbol:BQI). The NYSE may proceed to delist the
company for failure to meet the continued listing requirements of
the NYSE as a result of the Company proceeding under the CCAA.
BQI's common shares will remain suspended from trading until a
delisting occurs, or until the NYSE permits the resumption of
trading.
"We remain confident that our in situ oil sands assets will some
day be developed into commercial facilities," Mr. Wong concluded.
"Oil sands development is a long-term, capital-intensive business.
The timing for our planned pilot project unfortunately coincided
with a downturn in the capital markets that has impacted our
ability to access capital or to identify strategic alternatives to
enable us to proceed. We hope that through this process, we will
be able to arrive at a satisfactory solution for all our
stakeholders, including our shareholders."
About Oilsands Quest
Oilsands Quest Inc. -- http://www.oilsandsquest.com/-- is
exploring and developing oil sands permits and licences, located
in Saskatchewan and Alberta, and developing Saskatchewan's first
commercial oil sands discovery.
OLDE PRAIRIE: Winner's Development to Provide $40.2MM Cash Equity
-----------------------------------------------------------------
Olde Prairie Block Owner, LLC, has filed a disclosure statement
for the Debtor's Updated Third Amended Plan of Reorganization.
The Debtor has received and accepted a written offer from Winner's
Development, LLC 3 indicating its agreement to provide a cash
equity contribution in an amount up to $40,200,000 which would be
sufficient to (i) pay in full the DIP Claims, (ii) pay in full the
outstanding principal amount of the CenterPoint loans and its
prepetition costs and expenses and otherwise satisfy CenterPoint's
claims against the Debtor and its assets, (iii) pay in full all
administrative expense claims, and (iv) provide to holders of all
Allowed unsecured claims the cash distributions. As consideration
for making the Cash Equity Contribution, the Plan Investor will
receive a to-be-determined percentage of the Interests in the
Reorganized Debtor.
Upon confirmation of the Third Amended Plan, the Reorganized
Debtor will continue its legal existence as an Illinois limited
liability company and will be vested with title to all property
of its estate. From and after the Effective Date, the Reorganized
Debtor will utilize the revenues generated from operation of the
Property and Parking Lease to implement the Third Amended
Plan.
A copy of the disclosure statement for the Debtor's Updated Third
Amended Plan of Reorganization is available for free at:
http://bankrupt.com/misc/oldeprairie.dkt1094.pdf
About Olde Prairie Block Owner
Olde Prairie Block Owner, LLC, owns two parcels of real estate:
(a) a parcel known as the "Olde Prairie Property" located at 230
E. Cermak Road in Chicago, and (b) a parcel known as the "Lakeside
Property" located across the street at 330 E. Cermak Road in
Chicago. It also holds a long-term lease with the Metropolitan
Pier and Exposition Authority that allows it rent-free use of 450
parking spaces at the McCormick Place parking garage until the
year 2203.
Olde Prairie Block Owner sought chapter 11 protection (Bankr. N.D.
Ill. Case No. 10-22668) on May 18, 2010. The Debtor is
represented by John Ruskusky, Esq., George R. Mesires, Esq., Nile
N. Park, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris
LLP, in Chicago. Wildman, Harrold, Allen & Dixon LLP, and Marcus,
Clegg & Mistretta, P.A., serve as special counsels to the Debtor.
The Debtor estimated assets at $100 million to $500 million and
liabilities at $10 million to $50 million at the time of the
filing.
The Court previously found that the total value of the Real
Properties and the Parking Lease was $81,150,000, far more than
the $48,000,000 that CenterPoint claims to be owed by the Debtor.
No trustee, examiner, or committee has been appointed in this
case.
ORANGE COUNTY: S&P Lowers Rating on Revenue Bonds to 'BB-'
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'BB-'
from 'BB' on Orange County, Calif.'s apartment development revenue
bonds series 1998C, issued for the Orange Gardens Apartment
Project.
"The rating action reflects our analysis of updated financial
information based on our current stressed reinvestment rate
assumptions for all scenarios as set forth in the related criteria
articles," S&P said.
"We believe that revenues from mortgage debt service payments and
investment earnings will be insufficient to pay the final debt
service and fees on the bonds," said Standard & Poor's credit
analyst Jose Cruz. "Furthermore, in the event of prepayment, we
believe there will be insufficient funds to cover reinvestment
risk based on the 30-day minimum notice period required for
special redemption beyond November 2013."
The preceding credit weaknesses are mitigated in part by S&P's
view of:
The very strong credit quality of the assets, which consist of
a Fannie Mae passthrough certificate, and
Investments that are held in JP Morgan U.S. Government Money
Market Fund (AAAm).
ORBITAL SCIENCES: S&P Affirms 'BB+' Corporate Credit Rating
-----------------------------------------------------------
Standard & Poor's Rating Services affirmed its 'BB+' corporate
credit rating on Dulles, Va.- based Orbital Sciences Corp. "We
also raised the rating on the company's subordinated debt to 'BB'
from 'BB-' and revised the recovery rating to '5' from '6'. The
outlook is stable," S&P said.
"Our affirmation of the corporate credit rating reflects our
belief that Orbital Sciences will generate improved credit metrics
next year as the company completes the development of its new
Taurus II rocket," said Standard & Poor's credit analyst Lisa
Jenkins. "However, we believe the improvement will be insufficient
to offset the risks associated with the company's limited program
diversity and the riskiness of its launch business."
"Orbital is a leading provider of small-launch vehicles and small-
and medium-sized geostationary communications satellites, boost
vehicles, and targets for missile defense programs. Standard &
Poor's believes Orbital will generate solid revenue growth over
the coming year given its sizeable firm backlog ($2.17 billion at
Sept. 30, 2011; about 1.6x trailing-12-month revenues) and its
focus on programs that we believe will continue to receive
healthy funding, despite anticipated cuts in U.S. Department of
Defense (DoD) and NASA budgets. We characterize the company's
business risk profile as 'fair' and its financial risk profile as
"intermediate," as our criteria define the terms," S&P said.
"The outlook is stable. In our view, generally favorable prospects
for the company's key missile defense and space programs and a
firm backlog should support moderate revenue growth for the coming
year. We expect Orbital to maintain an overall credit profile
consistent with the current ratings," S&P said.
"Although unlikely, we could lower the ratings if leverage
increases substantially (debt to EBITDA of more than 3.0x) and if
we believe that it will stay there for an extended period, which
could happen as a result of an acquisition, product development
problems, or cancellation of a major contract. An upgrade is also
unlikely, as business risks and challenges (which include reliance
on a relatively few programs and the risk of a launch failure)
constrain the current rating," S&P said.
OTERO COUNTY: Asks Court to Extend Plan Filing Period to Sept. 14
-----------------------------------------------------------------
Otero County Hospital Association Inc. asks the U.S. Bankruptcy
Court for the District of New Mexico to extend its exclusive
periods to file a plan and to solicit acceptances of a filed plan
through and including Sept. 14, 2012, and Nov. 14, 2012,
respectively.
The Debtor relates that since June of 2010, it has been subject to
an onslaught of personal injury lawsuits stemming from a series of
procedures performed at the Hospital between 2006 and 2008. Over
fifty individuals who underwent such procedures have filed
lawsuits.
The Debtor tells the Court that it should extend the exclusive
periods in order to allow it to continue to consensually and in
good faith resolve the lawsuits and if such attempts fail, to
permit it sufficient time to prepare for an estimation hearing.
In addition, the Claims Bar Date is Dec. 21, 2011, which extends
past the Dec. 14, 2011 exclusive filing period and, thus, the
Debtor will not know the universe of claims at the time the
original exclusive filing period expires.
About Otero County Hospital
Otero County Hospital Association Inc. filed for Chapter 11
protection (Bankr. D. N.M. Case No. 11-13686) in Albuquerque, New
Mexico, on Aug. 16, 2011. The Alamogordo, New Mexico-based
nonprofit developed and operates the Gerald Champion Regional
Medical Center. GCRMC serves a total population of approximately
70,000 people. The Debtor disclosed $124,186,104 in assets and
$40,506,759 in liabilities as of the Chapter 11 filing.
Otero County Hospital Association also does business as Mountain
View Catering.
Judge Robert H. Jacobvitz presides over the case. Craig H. Averch,
Esq., and Roberto J. Kampfner, Esq., at White & Case, LLP, in Los
Angeles; and John D. Wheeler, Esq., at John D. Wheeler &
Associates, PC, in Alamogordo, New Mexico, serve as bankruptcy
counsel. Kurtzman Carson Consultants, LLC, serves as claims
agent.
The Debtor disclosed $124,186,104 in assets and $40,506,759 in
liabilities as of the Chapter 11 filing.
Alice Nystel Page, United States Trustee for Region 20 appointed
five unsecured creditors to serve on the Official Committee of
Unsecured Creditors of the Debtor.
The U. S. Trustee appointed E. Marissa Lane PLLC as patient care
ombudsman on Sept. 13, 2011.
PALM HARBOR: Joint Plan of Liquidation Confirmed
------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware has confirmed the joint plan of
liquidation of PHH Liquidation Trust, et. al., on Nov. 17, 2011.
Following a court-approved sale process, Palm Harbor in March 2011
sold its business for $85.25 million to Fleetwood Enterprises
Inc., a venture between Cavco Industries Inc. and a fund advised
by Third Avenue Management LLC.
As reported in the Troubled Company Reporter on Nov. 17, 2011, the
disclosure statement predicted that holders of 3.25% convertible
senior notes would recognize a recovery of between 16.7% and 21%
on their $54.8 million in claims. General unsecured creditors
with $36.4 million to $47.3 million in claims are to receive an
identical recovery.
A copy of the confirmation order is available at:
http://bankrupt.com/misc/PHH_liquidationorder.pdf
About Palm Harbor Homes
Addison, Texas-based Palm Harbor Homes, Inc. --
http://www.palmharbor.com/-- manufactured and marketed factory-
built homes. The Company marketed nationwide through vertically
integrated operations, encompassing manufactured and modular
housing, financing and insurance.
Palm Harbor, along with affiliates, filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 10-13850) on
Nov. 29, 2010. Palm Harbor Homes disclosed assets of at least
$103,061,759 and liabilities of at least $1,244,977.
Brian Cejka at Alvarez & Marsal is the Debtors' chief
restructuring officer. Raymond James and Associates, Inc., is the
Debtors' investment banker. Alvarez & Marshal North America, LLC,
is the Debtors' financial advisor. BMC Group, Inc., is the
Debtors' claims agent. Pachulski Stang Ziehl & Jones LLP serves
as counsel to the Official Committee of Unsecured Creditors.
Following a court-approved sale process, Palm Harbor in March 2011
sold its business for $85.25 million to Fleetwood Enterprises
Inc., a venture between Cavco Industries Inc. and a fund advised
by Third Avenue Management LLC. Fleetwood is providing up to $55
million in secured financing for Palm Harbor's reorganization.
Palm Harbor Homes has changed its corporate name and case caption
to PHH Liquidation Trust.
PARC AT ROGERS: Section 341(a) Meeting Rescheduled for Dec. 29
--------------------------------------------------------------
The U.S. Trustee for Region 6 has rescheduled the meeting of
creditors of Parc at Rogers Limited Partnership to Dec. 29, 2011,
at 10:15 a.m. The meeting will be held at Dallas, Room 976.
Proofs of claims are due by March 5, 2012.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
About Parc at Rogers
Parc at Rogers Limited Partnership in Dallas, Texas, owns and
operates the Parc at Rogers Apartment Homes, an apartment complex
in Rogers, Arkansas. It filed for Chapter 11 bankruptcy (Bankr.
N.D. Tex. Case No. 11-37025) on Oct. 31, 2011. Judge Barbara J.
Houser presides over the case. John Paul Stanford, Esq. --
jstanford@qsclpc.com -- at Quilling, Selander, Cummiskey and
Lownds, serves as the Debtor's counsel. In its petition, the
Debtor estimated assets and debts of $10 million to $50 million.
The petition was signed by Steven A. Shelley, vice president of T.
Whitman, LLC, the Debtor's general partner.
PITTSBURG CORNING: Settles With Hartford Insurance
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Pittsburgh Corning Corp., a joint venture between
Corning Inc. and PPG Industries Inc. approaching 12 years in
Chapter 11, negotiated a settlement with insurance companies
belonging to Hartford Financial Services Group Inc. The
settlement calls for the insurance companies to pay $8.17 million.
Pittsburg Corning says the payment will exhaust the insurance
companies' liability under the "products or completed operations"
portion of the policies.
Bloomberg News recounts that this year, the bankruptcy judge for a
second time refused to confirm the reorganization plan designed to
shed Pittsburg Corning, Corning, and PPG of liability for asbestos
claims arising from Pittsburg Corning's business. The judge again
said the plan was too broad because it would bar claims that were
independent of Pittsburg Corning's business. The plan is designed
to deal with 140,000 claims arising from an asbestos pipe
insulation that wasn't manufactured after 1972.
About Pittsburgh Corning
Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000,
to address numerous claims alleging personal injury from exposure
to asbestos. At the time of the bankruptcy filing, there were
about 11,800 claims pending against the Company in state court
lawsuits alleging various theories of liability based on exposure
to Pittsburgh Corning's asbestos products and typically requesting
monetary damages in excess of $1 million per claim.
The Hon. Judith K. Fitzgerald presides over the case. Reed Smith
LLP serves as counsel and Deloitte & Touche LLP as accountants to
the Debtor.
The United States Trustee appointed a Committee of Unsecured Trade
Creditors on April 28, 2000. The Bankruptcy Court authorized the
retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to
the Committee of Unsecured Trade Creditors, and Pascarella &
Wiker, LLP, as financial advisor.
The U.S. Trustee also appointed a Committee of Asbestos Creditors
on April 28, 2000. The Bankruptcy Court authorized the retention
of these professionals by the Committee of Asbestos Creditors: (i)
Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell &
Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as
special insurance counsel; (iv) Legal Analysis Systems, Inc., as
Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L.
Tersigni Consulting, P.C. as financial advisor, and (vi) Professor
Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered.
On Feb. 16, 2001, the Court approved the appointment of Lawrence
Fitzpatrick as the Future Claimants' Representative. The
Bankruptcy Court authorized the retention of Meyer, Unkovic &
Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as
his special counsel, and Analysis, Research and Planning
Corporation as his claims consultant.
In 2003, a plan of reorganization was agreed to by various
parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court
issued an order denying the confirmation of that plan, citing that
the plan was too broad in addressing independent asbestos claims
that were not associated with Pittsburgh Corning.
On Jan. 29, 2009, an amended plan of reorganization (the Amended
PCC Plan) -- which addressed the issues raised by the Court when
it denied confirmation of the 2003 Plan -- was filed with the
Bankruptcy Court.
PLATINUM PROPERTIES: Seeks Approval of $600,000 DIP Facility
------------------------------------------------------------
Platinum Properties, LLC, asks the U.S. Bankruptcy Court for
the Southern District of Indiana for authority to obtain
postpetition financing of up to $600,000 from Palmer Properties,
LLC, in the form of a secured line of credit, to allow the Debtor
to pay its ordinary and necessary operating expenses.
The proposed postpetition financing grants the Lender a first
priority mortgage lien on twelve (12) platted lots in the
Bellewood subdivision located in Hamilton County, Indiana.
First Internet Bank of Indiana has a first priority security
interest in and lien on the DIP Collateral to secure the Debtor's
obligation to First Internet of approximately $56,000. As part of
the DIP Financing, First Internet will be fully repaid from the
initial draw at closing under the approved DIP loan. First
Internet will contemporaneously therewith release its lien on the
DIP Collateral.
The total principal outstanding under the Loan Documents will not
exceed the lesser of (i) $600,000 or (ii) an amount equal to 60%
of the aggregate Gross Sales Price of the DIP Collateral that is
subject to the Lender's mortgage at any given time of reference.
Upon a sale of any lot comprising the DIP Collateral, the Debtor
will make a payment in the amount equal to the remainder of the
Gross Sales Price of the purchased lot less the sum of the Builder
Deposit Credit and all closing costs to be paid by the Debtor in
connection with each sale.
The Loan will be made at the rate of 12% per annum. Interest will
become due and payable with each payment and at maturity.
The Note will mature on Dec. 31, 2013.
The Lender is entitled to an expedited hearing seeking termination
of the automatic stay as to the DIP Collateral upon an Event of
Default.
A copy of the financing motion is available for free at:
http://bankrupt.com/misc/platinumproperties.dkt270.pdf
About Platinum Properties and PPV LLC
Indianapolis, Indiana-based Platinum Properties, LLC, is a
residential real estate developer. Platinum acquires land,
designs the projects, obtains zoning and other approvals, and
constructs roads, drainage, utilities, and other infrastructure of
residential subdivisions. Platinum then sells the finished,
platted lots. Platinum also has an ownership interest in several
special purpose entities that in turn own, operate and manage
individual projects.
PPV LLC is a joint venture between Platinum and a non-debtor
entity, Pittman Partners, Inc., each of whom hold an equity
interest in PPV. PPV owned four projects directly and owns 100%
of the membership interest of Sweet Charity Estates, LLC.
Platinum Properties and PPV LLC filed for Chapter 11 protection
(Bankr. S.D. Ind. Case Nos. 11-05140 and 11-05141) on April 25,
2011. Lawyers at Baker & Daniels LLP, in Indianapolis, Indiana,
serve as the Debtors' bankruptcy counsel. Platinum Properties
disclosed $14,624,722 in assets and $181,990,960 in liabilities as
of the Chapter 11 filing.
The U.S Trustee has not yet appointed a creditors committee in the
Debtor's case. The U.S. Trustee reserves the right to appoint
such a committee should interest developed among the creditors.
PMI GROUP: S&P Lowers Corp. Credit Rating to 'D' on Bankruptcy
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
rating on The PMI Group Inc. (TPG) to 'D' from 'CC'.
On Nov. 23, 2011, TPG released a statement indicating that it had
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code in Delaware. This action followed
the Arizona Department of Insurance seizing TPG's primary
operating subsidiaries on Oct. 20, 2011. TPG filed a motion to
vacate this seizure on Oct. 28, 2011. However, the Superior Court
of the State of Arizona denied the motion on Nov. 22, 2011. As a
result of filing for bankruptcy, TPG's $685 million of senior
unsecured notes and $51.5 million of junior subordinated unsecured
notes have become due and payable.
POMPANO CREEK: Case Dismissal/Conversion Hearing Set for Dec. 13
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
will convene a hearing on Dec. 13, 2011, at 10:30 a.m., to
consider motion to dismiss or convert the Chapter 11 case of
Pompano Creek Associates, LLC, to one under Chapter 7 of the
Bankruptcy Code.
Donald F. Walton, U.S. Trustee for Region 21, requested for the
dismissal or conversion of the Debtor's case because:
-- the Debtor has failed to file monthly operating reports for
the months of July, August, and September 2011; and
-- the case was filed over 10 months ago and the Debtor has not
yet filed a plan of reorganization.
The U.S. Trustee is represented by:
Zana M. Scarlett, Esq.
United States Department of Justice
Office of the United States Trustee
51 SW 1st Ave., Room 1204
Miami, FL 33130
Tel: (305) 536-7285
Fax: (305) 536-7360
E-mail: Zana.M.Scarlett@usdoj.gov
About Pompano Creek Associates, LLC
Pompano Creek Associates, LLC, filed for Chapter 11 bankruptcy
(Bankr. S.D. Fla. Case No. 11-11989) on Jan. 26, 2011, Judge
John K. Olson presiding. The Debtor disclosed $24,000,000 in
assets and $6,028,539 in liabilities as of the Chapter 11 filing.
The United States Trustee has not appointed a committee of
unsecured creditors.
PURE BEAUTY: Creditors Have Until Jan. 13 to File Proofs of Claim
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
established Jan. 13, 2012, as the last day for any individual or
entity to file proofs of claim against Pure Beauty Salons &
Boutiques, Inc., et al.
The governmental bar date is set for April 2, 2012, at 4:00 p.m.,
prevailing Eastern Time.
Proofs of claim must be filed or be received on or prior to the
deadlines on these addresses:
If by first-class mail:
Pure Beauty Salons & Boutiques, Inc.
Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
FDR Station P.O. Box. 5283
New York, NY 10150-5283
If by hand delivery or overnight mail:
Pure Beauty Salons & Boutiques, Inc.
Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
757 Third Avenue, 3rd Floor
New York, NY 10017
About Pure Beauty
Pure Beauty Salons & Boutiques, Inc., has 436 mall-based locations
operating beauty salons and retailing hair-care products.
Franchisees are operating additional 22 BeautyFirst and 7 Trade
Secret stores. Trade names include Trade Secret, Beauty Express,
BeautyFirst, PureBeauty, and Winston's Barber Shop. About 2,330
people are employed.
Pure Beauty Salons was formed in 2010 by the Luborsky Family Trust
II 2009 for the purpose of acquiring roughly 465 retail stores
from Trade Secret Inc., and its affiliated Chapter 11 debtors
(Bankr. D. Del. Case No. 10-12153) through a sale pursuant to
Section 363 of the Bankruptcy Code. The consideration for the
purchased stores was a credit bid by Regis Corp. of $32.5 million
and the assumption by Pure Beauty Salons of $13 million in TSI's
liabilities.
Pure Beauty Salons filed for bankruptcy (Bankr. D. Del. Case No.
11-13159) on Oct. 4, 2011. Affiliate BeautyFirst Franchise Corp.
filed a separate petition (Bankr. D. Del. Case No. 11-13160).
Judge Mary F. Walrath was initially assigned to the case. Judge
Peter J. Walsh took over. Andrew L. Magaziner, Esq., and Joseph
M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as
the Debtors' counsel. The Debtors' investment banker is SSG
Capital Advisors' J. Scott Victor -- jsvictor@ssgca.com The
Debtors' notice, claims solicitation, and balloting agent is Epiq
Bankruptcy Solutions. The Debtor estimated assets and debts both
at $10 million to $50 million. The Debtors owe $15 million to
vendors and landlords. The petition was signed by Brian Luborsky,
chief executive officer.
Secured lender Regis Corp. is represented in the case by Michael
L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey
P.A., and Kathleen M. Miller, Esq., at Smith Katzenstein & Furlow
LLP.
PURE BEAUTY: Court Approves SSG Capital as Investment Banker
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Pure Beauty Salons & Boutiques, Inc., et al., to employ SSG
Capital Advisors, LLC, as their investment banker.
The Debtors have selected SSG Capital based on the firm's
experience and expertise in providing investment banking services
in chapter 11 cases and based on SSG Capital's familiarity with
their business.
SSG Capital will:
(a) prepare an information memorandum describing the Debtors,
their historical performance and prospects, including
existing contracts, market and sales, labor force,
management and anticipated financial results of the
Debtors;
(b) assist the Debtors in developing a list of suitable
potential buyers who will be contacted to determine
interest in acquiring substantially all of the assets of
the Debtors;
(c) coordinate the execution of confidentiality agreements for
potential buyers wishing to review the information
memorandum;
(d) assist the Debtors in populating the electronic data room
and in meetings for interested buyers;
(e) solicit competitive offers from potential buyers;
(f) appear in court and testify as to the sale process and any
related issues;
(g) advise and assist the Debtors in structuring the sale
transaction and negotiate the sale transaction agreements;
and
(h) otherwise assist the Debtors, their attorneys and
accountants, as necessary, through closing of the sale
transaction.
The Debtors will pay SSG Capital as follows:
(i) An initial fee equal to $50,000 paid prior to the Petition
Date.
(ii) Monthly fees of $50,000 for the first month payable on
Nov. 1, 2011, and $10,000 per month thereafter until the
earlier of (x) the closing of a sale transaction and (y)
Jan. 31, 2012. The Monthly Fee, in the aggregate, will not
exceed $120,000.
(iii) Upon consummation of a Sale Transaction with any party,
other than Regis Corporation, any insider of the Debtors or
any entity affiliated with the Luborsky Family Trust II,
the Debtors will pay SSG Capital a fee at, and as a
condition of, closing that transaction, equal to the
greater of $400,000 or 2.0% of Total Consideration. For
clarification purposes, in the event that the Sale
Transaction is closed with Regis Corporation, any insider
of the Debtors or any entity affiliated with the Luborsky
Family Trust II, then SSG Capital will not receive a Sale
Fee.
(iv) In addition, whether or not a Sale Transaction is
consummated, the Debtors agree to reimburse SSG Capital for
all of SSG Capital's necessary and reasonable out-of-pocket
expenses, incurred in connection with the subject matter of
the engagement.
The Debtors have also agreed to indemnify, defend and hold
harmless SSG Capital and its respective partners, directors,
officers, agents and employees and its affiliates from and against
any and all losses, claims, damages, liabilities or costs.
To the best of the Debtors' knowledge, SSG Capital is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Pure Beauty
Pure Beauty Salons & Boutiques, Inc., has 436 mall-based locations
operating beauty salons and retailing hair-care products.
Franchisees are operating additional 22 BeautyFirst and 7 Trade
Secret stores. Trade names include Trade Secret, Beauty Express,
BeautyFirst, PureBeauty, and Winston's Barber Shop. About 2,330
people are employed.
Pure Beauty Salons was formed in 2010 by the Luborsky Family Trust
II 2009 for the purpose of acquiring roughly 465 retail stores
from Trade Secret Inc., and its affiliated Chapter 11 debtors
(Bankr. D. Del. Case No. 10-12153) through a sale pursuant to
Section 363 of the Bankruptcy Code. The consideration for the
purchased stores was a credit bid by Regis Corp. of $32.5 million
and the assumption by Pure Beauty Salons of $13 million in TSI's
liabilities.
Pure Beauty Salons filed for bankruptcy (Bankr. D. Del. Case No.
11-13159) on Oct. 4, 2011. Affiliate BeautyFirst Franchise Corp.
filed a separate petition (Bankr. D. Del. Case No. 11-13160).
Judge Mary F. Walrath was initially assigned to the case. Judge
Peter J. Walsh took over. Andrew L. Magaziner, Esq., and Joseph
M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as
the Debtors' counsel. The Debtors' investment banker is SSG
Capital Advisors' J. Scott Victor -- jsvictor@ssgca.com The
Debtors' notice, claims solicitation, and balloting agent is Epiq
Bankruptcy Solutions. The Debtor estimated assets and debts both
at $10 million to $50 million. The Debtors owe $15 million to
vendors and landlords. The petition was signed by Brian Luborsky,
chief executive officer.
Secured lender Regis Corp. is represented in the case by Michael
L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey
P.A., and Kathleen M. Miller, Esq., at Smith Katzenstein & Furlow
LLP.
PURE BEAUTY: Court Approves Young Conaway as Attorneys
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Pure Beauty Salons & Boutiques, Inc., et al., to employ Young
Conaway Stargatt & Taylor, LLP, as their bankruptcy counsel. The
Debtors have selected Young Conaway because of the firm's
extensive knowledge, expertise, and experience in the field of
debtors' and creditors' rights and business reorganization under
Chapter 11 of the Bankruptcy Code.
As bankruptcy counsel, Young Conaway will:
(a) provide legal advise with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their business and management of their
properties;
(b) provide legal advice regarding a sale or other strategic
alternative with respect to the Debtors' businesses or
assets, and to prepare and pursue court approval of that
sale or strategic alternative;
(c) pursue confirmation of a Chapter 11 plan and approval of
the corresponding solicitation procedures and disclosure
statement;
(d) prepare on behalf of the Debtors necessary applications,
motions, answers, orders, reports and other legal papers;
(e) appear in Court and otherwise protect the interests of the
Debtors before the Court; and
(f) perform all other legal services for the Debtors that may
be necessary and proper in the proceedings.
The principal attorneys and paralegal presently designated to
represent the Debtors and their current standard hourly rates are:
Joseph M. Barry, Partner $510 per hour
Kenneth J. Enos, Associate $375 per hour
Ryan M. Bartley, Associate $315 per hour
Andrew L. Magaziner, Associate $290 per hour
Melissa Bertsch, Paralegal $170 per hour
Young Conaway received a retainer of $100,000, in connection with
the planning and preparation of a chapter 11 filing and the post-
petition representation of the Debtors.
The Debtors will reimburse Young Conaway for all other expenses
incurred including, among other things, telephone and telecopier
toll and other charges, document processing, and travel expenses.
To the best of the Debtors' knowledge, Young Conaway is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code, as modified by Section 1107(b).
The firm can be contacted at:
Andrew L. Magaziner, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
The Brandywine Building, 17th Floor
1000 N. West Street
Wilmington, DE 19801
Tel: (302) 571-6600
E-mail: bankfilings@ycst.com
- and -
Joseph M. Barry, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
The Brandywine Building, 17th Floor
1000 West Street
Wilmington, DE 19801
Tel: (302) 571-6600
E-mail: bankfilings@ycst.com
About Pure Beauty
Pure Beauty Salons & Boutiques, Inc., has 436 mall-based locations
operating beauty salons and retailing hair-care products.
Franchisees are operating additional 22 BeautyFirst and 7 Trade
Secret stores. Trade names include Trade Secret, Beauty Express,
BeautyFirst, PureBeauty, and Winston's Barber Shop. About 2,330
people are employed.
Pure Beauty Salons was formed in 2010 by the Luborsky Family Trust
II 2009 for the purpose of acquiring roughly 465 retail stores
from Trade Secret Inc., and its affiliated Chapter 11 debtors
(Bankr. D. Del. Case No. 10-12153) through a sale pursuant to
Section 363 of the Bankruptcy Code. The consideration for the
purchased stores was a credit bid by Regis Corp. of $32.5 million
and the assumption by Pure Beauty Salons of $13 million in TSI's
liabilities.
Pure Beauty Salons filed for bankruptcy (Bankr. D. Del. Case No.
11-13159) on Oct. 4, 2011. Affiliate BeautyFirst Franchise Corp.
filed a separate petition (Bankr. D. Del. Case No. 11-13160).
Judge Mary F. Walrath was initially assigned to the case. Judge
Peter J. Walsh took over. Andrew L. Magaziner, Esq., and Joseph
M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as
the Debtors' counsel. The Debtors' investment banker is SSG
Capital Advisors' J. Scott Victor -- jsvictor@ssgca.com The
Debtors' notice, claims solicitation, and balloting agent is Epiq
Bankruptcy Solutions. The Debtor estimated assets and debts both
at $10 million to $50 million. The Debtors owe $15 million to
vendors and landlords. The petition was signed by Brian Luborsky,
chief executive officer.
Secured lender Regis Corp. is represented in the case by Michael
L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey
P.A., and Kathleen M. Miller, Esq., at Smith Katzenstein & Furlow
LLP.
RCR PLUMBING: Court Deems City of California Adequate Assured
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
approved a stipulation deeming the City of Riverside, California
to be adequately assured of future payment within the meaning of
Section 366 of the Bankruptcy Code.
The stipulation entered between the Debtor RCR Plumbing and
Mechanical, Inc., and the City provides for, among other things:
1. the City will continue to provide utility services to the
Debtor after the Petition Date;
2. the Debtor will pay to the city cash deposits of $746 and
$306 as adequate assurance of payment to the City for the Debtor's
continued access to and use of the City's services. The City
agreed that the deposits are satisfactory and that each of the
Deposits constitutes adequate assurance of payment.
3. The City may only use the deposits to insure and secured
payment of the Debtor's postpetition payment obligations to the
City. The City may not use any portion of the Deposits to offset
against or otherwise secured any amounts the Debtor may owe to the
City for utility services rendered prior to the Petition Date.
About RCR Plumbing
Founded in 1977, Riverside, California-based RCR Plumbing and
Mechanical Inc. is one of the largest plumbing subcontractors in
the West Coast. In 1999, RCR Plumbing was acquired by American
Plumbing and Mechanical Inc. On Oct. 13, 2003, AMPAM and its
affiliated entities, including RCR Plumbing, filed for Chapter 11
bankruptcy (Bankr. W.D. Tex. Lead Case No. 03-55789) in San
Antonio. Pursuant to a plan of reorganization, RCR Plumbing
received a discharge of any liability arising from contracts
completed prior to Aug. 2, 2004, the date the plan was confirmed.
The plan disaggregated RCR Plumbing from AMPAM.
RCR Plumbing filed for Chapter 11 bankruptcy (Bankr. C.D. Calif.
Case No. 11-41853) on Oct. 12, 2011. RCR Plumbing blamed a weak
construction market and increased insurance costs. Judge Wayne E.
Johnson oversees the case. Evan D. Smiley, Esq., and Kyra E.
Andrassy, Esq. -- esmiley@wgllp.com and kandrassy@wgllp.com -- at
Weiland, Golden, Smiley et al., serve as the Debtor's counsel.
BSW & Associates as financial advisor. Kurtzman Carson
Consultants LLC serves as noticing agent. In its petition, RCR
Plumbing estimated $10 million to $50 million in assets and debts.
The petition was signed by Robert C. Richey, president/CEO.
RCR PLUMBING: PAC Financing Deal OK'd; Further Amendment Allowed
----------------------------------------------------------------
The U.S. Bankruptcy Court for the U.S. Bankruptcy Court for the
Central District of California authorized, on a final basis, RCR
Plumbing and Mechanical, Inc., to:
a) enter into the premium finance agreement;
b) grant Premium Assignment Corporation, or its successors or
assigns a first priority lien on and security interest in
unearned premiums; and
c) pay PAC or its successor or assigns all sums due under
the Financing Agreement.
The Court ordered that without limitation, the liens, security
interests and rights in unearned premiums granted under the
Financing Agreement are senior to the lien of any DIP Lender in
the case and are senior to any claims under Sections 503, 506(b)
or 507(b) of the Bankruptcy Code.
If additional premiums become due to insurance companies under the
policies financed under the Financing Agreement, the Debtor and
PAC or its successor or assigns are authorized to modify the
Financing Agreement as necessary to pay the additional premiums
without the necessity of further hearing or order of the Court.
As reported in the Troubled Company Reporter on Nov. 15, 2011, the
terms of the financing agreement includes:
Total premium: $1,183,071
Cash Down Payment: $323,500
Unpaid Premium Balance: $859,571
Finance Charge $14,715
Total of Payments: $874,286
Annual Percentage Rate: 4.09%
Payment Term: 9 months
Monthly Payment: $97,142
The Debtor's obligations under the financing agreement will be
secured by unearned premiums.
The Debtor related that the interests of secured creditors PNC
Bank and the Richey Family Trust are over-secured and adequately
protected. The Debtor noted that its indebtedness to PNC Bank and
Richey, as an individual and as trustee of the Robert C. Richey
Family Truste dated Jan. 20, 1997, are secured by substantially
all of the Debtor's assets.
About RCR Plumbing
Founded in 1977, Riverside, California-based RCR Plumbing and
Mechanical Inc. is one of the largest plumbing subcontractors in
the West Coast. In 1999, RCR Plumbing was acquired by American
Plumbing and Mechanical Inc. On Oct. 13, 2003, AMPAM and its
affiliated entities, including RCR Plumbing, filed for Chapter 11
bankruptcy (Bankr. W.D. Tex. Lead Case No. 03-55789) in San
Antonio. Pursuant to a plan of reorganization, RCR Plumbing
received a discharge of any liability arising from contracts
completed prior to Aug. 2, 2004, the date the plan was confirmed.
The plan disaggregated RCR Plumbing from AMPAM.
RCR Plumbing filed for Chapter 11 bankruptcy (Bankr. C.D. Calif.
Case No. 11-41853) on Oct. 12, 2011. RCR Plumbing blamed a weak
construction market and increased insurance costs. Judge Wayne E.
Johnson oversees the case. Evan D. Smiley, Esq., and Kyra E.
Andrassy, Esq. -- esmiley@wgllp.com and kandrassy@wgllp.com -- at
Weiland, Golden, Smiley et al., serve as the Debtor's counsel.
BSW & Associates as financial advisor. Kurtzman Carson
Consultants LLC serves as noticing agent. In its petition, RCR
Plumbing estimated $10 million to $50 million in assets and debts.
The petition was signed by Robert C. Richey, president/CEO.
R.E. LOANS: Court Approves Land Advisors as Real Estate Broker
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized R.E. Loans LLC and its debtor-affiliates to employ Land
Advisors Organization as real estate brokers to market and sell
certain of the Debtors' properties.
LAO and the brokers will not be required to file fee applications
in the Debtors' Chapter 11 cases. The firm agreed to accept as
compensation for its services a commission of 2% of the gross
sales price.
About R.E. Loans
R.E. Loans LLC was, for many years, in the business of providing
financing to home builders and developers of real property. R.E.
Future LLC and Capital Salvage own the real property obtained
following foreclosure proceedings initiated by R.E. Loans against
its borrowers. R.E. Loans is the sole shareholder of Capital
Salvage and the sole member of R.E. Future. B-4 Partners LLC is
the sole member of R.E. Loans. As a result of the multiple
defaults by R.E. Loans' borrowers, R.E. Loans has transitioned
from being a lender to becoming a property management company.
Lafayette, California-based R.E. Loans, R.E. Future and Capital
Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case
Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge
Barbara J. Houser presides over the case. Stutman, Treister &
Glatt and Gardere, Wynne and Sewell, represent the Debtors as
counsel. James A. Weissenborn at Mackinac serves as R.E. Loans'
chief restructuring officer. The Debtors tapped Hines Smith
Carder as their litigation and outside general counsel. R.E.
Loans disclosed $713,622,015 in assets and $886,002,786 in
liabilities as of the Chapter 11 filing.
William T. Neary, the U.S. Trustee for Region 6, appointed 12
members to the Official Committee of Noteholders of R.E. Loans
LLC.
REDDY ICE: Receives Additional Notice Regarding NYSE Listing
------------------------------------------------------------
Reddy Ice Holdings, Inc. has been notified by NYSE Regulations,
Inc. that it is not in compliance with one of the continued
listing standards of the New York Stock Exchange.
Reddy Ice is considered below the continued listing criteria
established by the NYSE because the Company's average closing
price has been less than $1.00 over a consecutive 30 trading-day
period.
In accordance with NYSE procedures, Reddy Ice has six months from
the receipt of the notice on Nov. 28, 2011 to bring its share
price and average share price above $1.00. If, at the expiration
of the six month period, the Company fails to achieve both a $1.00
share price and average share price over the preceding 30 trading
days, the Company will be subject to suspension and delisting
proceedings. As required by the NYSE's rules, the Company plans
to notify the NYSE within 10 days of receipt of the non-compliance
notice of the Company's intent to remedy its non-compliance.
The Company previously announced on Sept. 27, 2011 that it had
been notified by the NYSE regarding the Company's non-compliance
with the NYSE's $50 million minimum market capitalization
requirements. On Nov. 21, 2011, the Company announced that its
plan to restore compliance with continued listing standards had
been accepted by the NYSE.
The Company's common stock remains listed on the NYSE under the
symbol "FRZ," but has been assigned a ".BC" indicator by the NYSE
to signify that the Company is not currently in compliance with
the NYSE's continued listing standards. The Company is required
to maintain compliance with other applicable NYSE continued
listing requirements, including the minimum global market
capitalization standard, which requires the Company to maintain an
average global market capitalization of at least $15 million over
a consecutive 30 trading-day period. Failure to maintain
compliance with this requirement would result in the NYSE promptly
initiating suspension and delisting procedures. On Nov. 28, 2011,
Reddy Ice's common stock had a closing price of $0.69 per share,
equating to a market capitalization of approximately $16.1
million, and a 30 trading-day average closing price of $0.93 per
share.
About Reddy Ice
Reddy Ice Holdings, Inc. is a manufacturer and distributor of
packaged ice in the United States. With approximately 1,500 year-
round employees, the Company sells its products primarily under
the widely known Reddy Ice(R) brand to a variety of customers in
34 states and the District of Columbia. The Company provides a
broad array of product offerings in the marketplace through
traditional direct store delivery, warehouse programs and its
proprietary technology, The Ice Factory(R). Reddy Ice serves most
significant consumer packaged goods channels of distribution, as
well as restaurants, special entertainment events, commercial
users and the agricultural sector.
ROTTLUND HOMES: Ceases Business; Appoints Receiver to Sell Assets
-----------------------------------------------------------------
The Star Tribune reports that Minnesota-based homebuilder Rottlund
Homes will cease operations by year's end, a victim of the brutal
downturn in the local housing market.
The Star Tribune relates that Rottlund has confirmed that it had
appointed a receiver to liquidate its assets after failing to
secure financing to stave off the downturn or find a buyer.
"We fought the valiant fight," the report quotes Steven Kahn, the
firm's chief financial officer, as saying. "For the past five
years, we've tried to continue to build homes in what has become a
very, very difficult housing market."
According to the report, Mr. Kahn said the company tried to work
with three banks to secure financing but was unable to craft a
deal. A search for a buyer proved futile, he added.
"The last five years have been a housing depression," Star Tribune
quotes David Siegel, executive director of the Builders
Association of the Twin Cities, as saying. "Some call it a
recession. We call it a depression."
The Star Tribune, citing data distributed by the Builders
Association, discloses that Rottlund in 2006 reported $130 million
in gross revenue and closed on 512 homes. By the end of 2010,
gross revenue had declined to $38 million, with just 190 closings.
Mr. Kahn, as cited by the Star Tribune, said Rottlund has already
sold its operations in Iowa and is in the process of selling off
assets at its Florida division. Just 18 employees remain at its
Roseville headquarters, down from a high of 225 at the three
divisions. Twenty homes in the Twin Cities will be completed
around year's end, Mr. Kahn said, while promising all
subcontractors will be paid in full. "This will be an orderly
liquidation; no one will get stiffed," he said.
RUDEN MCCLOSKY: Committee Wants to Retain Segall Gordich
--------------------------------------------------------
The Official Committee of Unsecured Creditors of Ruden McClosky,
P.A., asks the U.S. Bankruptcy Court for the Southern District of
Florida for permission to employ Segall Gordich, P.A., as its
counsel, nunc pro tunc to Nov. 8, 2011. The Committee selected
Segall Gordich because its attorneys have considerable expertise
in the fields of bankruptcy, insolvency, reorganizations,
liquidations, and debtors' and creditors' rights.
Segall Gordich will:
(a) assist, advise and represent the Committee in its
consultation with the Debtor relative to the administration
of the Chapter 11 case and the possible sale of
substantially all of the Debtor's assets;
(b) assist, advise and represent the Committee in analyzing the
Debtor's assets and liabilities and in reviewing the
proposed asset sales and dispositions;
(c) attend meetings and negotiate with the representatives of
the Debtor, secured creditors and other parties-in-
interest;
(d) assist and advise the Committee in its examination and
analysis of the conduct of the Debtor's affairs;
(e) assist the Committee in the review, analysis and
negotiation of any plans of reorganization that may be
filed and assist the Committee in the review, analysis and
negotiation of the disclosure statements accompanying any
plans of reorganization;
(f) assist the Committee in the review, analysis and
negotiation of any financing or funding arrangements;
(g) take all necessary action to protect and preserve the
interests of the Committee, including without limitation,
prosecuting actions on its behalf, negotiating all
litigation in which the Debtor is involved, and reviewing
and analyzing all claims filed against the Debtor's estate;
(h) prepare on behalf of the Committee all necessary motions,
applications, answers, orders, reports and papers in
support of positions taken by the Committee;
(i) appear, as appropriate, before the bankruptcy court, the
appellate courts, and other courts in which matters may be
heard and protect the interests of the Committee before
those courts; and
(j) perform all other necessary legal services.
The current hourly rates for attorneys at Segall Gordich range
from $270 to $490. The current hourly rate for paralegals is
$100.
Segall Gordich will charge the Debtors for its actual, reasonable
and necessary out-of-pocket disbursements.
Lawrence A. Gordich, Esq., assures the Court that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be contacted at:
Lawrence A. Gordich, Esq.
Florida Bar No. 378097
SEGALL GORDICH, P.A.
801 Brickell Avenue, Suite 900
Miami, FL 33131
Tel: (305) 755-4930
Fax: (305) 438-7438
E-mail: lag@segallgordich.com
About Ruden McClosky
Founded in 1959, Ruden McClosky P.A., fdba Ruden, McClosky, Smith,
Schuster & Russell, P.A. -- http://www.ruden.com/-- was a full-
service law firm serving the legal needs of clients throughout
Florida, the U.S., and internationally. It had eight offices in
Florida.
In August 2011, the firm was reportedly in merger talks with
Cleveland, Ohio-based Benesch firm. In September 2011, founder
Donald McClosky died after a long battle with cancer.
Ruden McClosky filed for Chapter 11 protection (Bankr. S.D. Fla.
Case No. 11-40603) on Nov. 1, 2011, in its hometown of Fort
Lauderdale, with a plan to sell a substantial portion of its
assets to Fort Lauderdale-based Greenspoon Marder.
Judge Raymond B. Ray oversees the case. Leslie Gern Cloyd, Esq.,
and Paul Steven Singerman, Esq. -- lcloyd@bergersingerman.com and
singerman@bergersingerman.com -- at Berger Singerman, P.A., serve
as the Debtor's counsel. Development Specialists, Inc., serves as
the Debtor's restructuring advisors. Kurtzman Carson Consultants
LLC serves as the Debtor's claims and noticing agent. In its
petition, the Debtor estimated $10 million to $50 million in both
assets and debts. The petition was signed by Joseph J. Luzinski,
chief restructuring officer.
An official committee of unsecured creditors has been appointed in
the case, and is represented by Segall Gordich, P.A.
Counsel to the Debtor's lender, Wells Fargo Bank, N.A., is
Jonathan Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen,
P.C. Counsel to Greenspoon Marder, the proposed purchaser, is R.
Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP.
RUDEN MCCLOSKY: To Employ Shafritz and Braten as Litig. Counsel
---------------------------------------------------------------
Ruden McClosky P.A. seeks permission from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Shafritz and
Braten, P.A., as its special litigation counsel to provide legal
services in connection with collection of accounts receivable nunc
pro tunc to the Petition Date and authorization to settle accounts
receivable claims in the ordinary course of business. The Debtor
selected Shafritz and Braten because of the firm's extensive
experience and knowledge in the field of collections law.
Prior to the Petition, Shafritz and Braten served as counsel to
the Debtors in connection with the representation of the Debtor in
accounts receivable collection matters.
Shafritz and Braten will charge for its services on a 33 1/3%
contingency fee basis, with costs to be advanced by the Debtor,
including for any filing fees required to file lawsuits, if
lawsuits are to be filed. The contingent fee will be paid, if at
all, from funds collected by Shafritz and Braten. Because it will
be paid on a contingency fee basis, Shafritz and Braten will not
maintain detailed, contemporaneous records of time but will
maintain records of any actual and necessary expenses incurred in
connection with the rendering of legal services.
Steven R. Braten, Esq., at Shafritz and Braten, P.A., in Delray
Beach, Florida, assures the Court that neither he nor his firm
holds or represents any interest adverse to the Debtor or its
estate with respect to the matters for which the firm is being
employed.
About Ruden McClosky
Founded in 1959, Ruden McClosky P.A., fdba Ruden, McClosky, Smith,
Schuster & Russell, P.A. -- http://www.ruden.com/-- was a full-
service law firm serving the legal needs of clients throughout
Florida, the U.S., and internationally. It had eight offices in
Florida.
In August 2011, the firm was reportedly in merger talks with
Cleveland, Ohio-based Benesch firm. In September 2011, founder
Donald McClosky died after a long battle with cancer.
Ruden McClosky filed for Chapter 11 protection (Bankr. S.D. Fla.
Case No. 11-40603) on Nov. 1, 2011, in its hometown of Fort
Lauderdale, with a plan to sell a substantial portion of its
assets to Fort Lauderdale-based Greenspoon Marder.
Judge Raymond B. Ray oversees the case. Leslie Gern Cloyd, Esq.,
and Paul Steven Singerman, Esq. -- lcloyd@bergersingerman.com and
singerman@bergersingerman.com -- at Berger Singerman, P.A., serve
as the Debtor's counsel. Development Specialists, Inc., serves as
the Debtor's restructuring advisors. Kurtzman Carson Consultants
LLC serves as the Debtor's claims and noticing agent. In its
petition, the Debtor estimated $10 million to $50 million in both
assets and debts. The petition was signed by Joseph J. Luzinski,
chief restructuring officer.
An official committee of unsecured creditors has been appointed in
the case, and is represented by Segall Gordich, P.A.
Counsel to the Debtor's lender, Wells Fargo Bank, N.A., is
Jonathan Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen,
P.C. Counsel to Greenspoon Marder, the proposed purchaser, is R.
Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP.
SEA TRAIL: Can Access Waccamaw Cash Collateral Until Nov. 30
------------------------------------------------------------
U.S. Bankruptcy Judge Stephani W. Humrickhouse has entered a
second interim consent order authorizing Sea Trail Corporation to
use cash collateral of Waccamaw Bank for its post-petition,
necessary and reasonable operating expenses solely for preserving
and maintaining Waccamaw Bank's collateral under 11 U.S.C. Section
506(c), as shown in the budget, only after first exhausting all
non-cash collateral.
The Debtor will maintain one or more bank accounts, into which it
will deposit all cash, checks, and other cash items.
The order wlll remain in full force and effect until the earlier
of the (a) entry of an Order by the Court modifying the terms of
this Order; (b) entry of an Order by the Court terminating this
Order for cause, including but not limited to breach of its terms
and conditions; (c) upon filing of a notice of default as provided
in this Order; or (d) Nov. 30, 2011.
Waccamaw Bank is a secured creditor of the Debtor by virtue of two
promissory notes secured by senior deed of trust liens on all of
the Debtor's real estate and rents defined as all present and
future rents, revenues, income, issues, royalties, profits, and
other benefits derived from the real estate.
Prior to the filing, Waccamaw Bank took a security interest in
certain real property owned by the Debtor as well as rents,
pursuant to two deeds of trust and assignments of rents, all
recorded with the Brunswick County Registry, in order to secure
the obligations arising under two promissory notes. The deeds of
trust and assignments of rents encumber the majority of the
Debtor's real property, including the golf courses, the convention
center buildings, and the real estate held by the Debtor for
development and all revenue flowing from the real estate.
Waccamaw Bank filed on Oct. 4, 2011, a proof claim in the amount
of $15,880,408.04 filed on Oct. 4, 2011.
A copy of the Second Interim Consent Order is available for free
at
Headquartered in Sunset Beach, North Carolina, Sea Trail
Corporation operates the Sea Trail Golf Resort and Conference
Center. The Debtor's business operations are comprise of three
operating divisions, including the golf division, the convention
and resort division, and the real estate division.
Sea Trail Corporation filed a Chapter 11 petition (Bankr. E.D.N.C.
Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina.
The Debtor reported $34,222,281 in assets and $22,174,201 in
liabilities as of the Chapter 11 filing. Stubbs & Perdue P.A. is
the Debtors' attorney.
Sea Trail Corporation's official committee of unsecured creditors
had retained J.M. Cook and his firm, J.M. Cook, P.A., as counsel.
SEAHAWK DRILLING: Draws Made on Letters of Credit on Trust
----------------------------------------------------------
On or about Nov. 15, 2011, draw requests by Servicio de
Administracion Tributaria an agency of the Secretaria de Hacienda
y Credito Publico of Mexico, Mexico's governmental tax authority
on four letters of credits in the aggregate amount of
MXN 600,136,853.00 were honored by Scotiabank Inverlat, S.A., an
affiliate of The Bank of Nova Scotia. As a result of these draws,
Pride International, Inc. may now assert that its contingent
claims under the Tax Support Agreement with Seahawk Drilling, Inc.
in the approximate amount of US$49,732,488.00 against the
bankruptcy estate of Seahawk Drilling, Inc. et al., Case No. 11-
20089 in the United States Bankruptcy Court of the Southern
District of Texas, Corpus Christi Division have now been
liquidated.
The Seahawk Liquidating Trust, as the indirect shareholder of the
taxing paying entities in Mexico, is currently contesting the
legality of these draws in Mexico.
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.
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.
SIX FLAGS: Moody's Rates Proposed Credit Facility at 'B1'
---------------------------------------------------------
Moody's Investors Service changed Six Flags Theme Parks Inc.'s
(Six Flags) rating outlook to positive from stable and assigned a
B1 rating to the company's proposed senior secured credit
facility. The rating outlook change reflects Moody's expectation
that Six Flags' debt-to-EBITDA leverage will continue to decline
steadily through earnings growth driven by improvements in per
capita spending and margins as well as modest attendance growth.
Six Flags' B1 Corporate Family Rating (CFR) and SGL-4 speculative-
grade liquidity rating are not affected. Moody's updated the loss
given default assessments based on the proposed changes to the
debt structure.
Assignments:
Issuer: Six Flags Theme Parks, Inc.
-- Senior Secured Bank Credit Facility Revolver, Assigned a B1,
LGD3 - 48%
-- Senior Secured Bank Credit Facility Term Loan, Assigned a
B1, LGD3 - 48%
-- Senior Secured Bank Credit Facility Term Loan, Assigned a
B1, LGD3 - 48%
Outlook Actions:
Issuer: Six Flags Theme Parks, Inc.
-- Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Six Flags has performed well following its emergence from
bankruptcy in April 2010 with cost reductions, new marketing
campaigns, and yield enhancement strategies driving meaningful
margin and EBITDA growth despite relatively flat attendance.
Moody's believes ongoing pricing discipline to reduce discounting
and enhance yield will continue to lift earnings and reduce
leverage over the next 12-18 months. Moody's anticipates Six
Flags' slate of new attractions will contribute to modest
attendance gains notwithstanding a sluggish economic environment,
although EBITDA is still expected to improve if attendance remains
flat.
The revised credit agreement would loosen the limitations on
restricted payments and Moody's expects Six Flags will utilize the
bulk of its excess cash balance and projected free cash flow for
shareholder distributions. Share repurchases managed within
internally generated cash resources would thus not preclude an
upgrade if leverage continues to decline. Debt reduction will
likely be limited to required term loan amortization
(approximately $13 million in the first year after closing) and an
excess cash flow sweep based on a multiple of leverage.
Approximately 50% of Six Flags' ownership base is comprised of
distressed debt/hedge fund investors that obtained their equity
positions as part of the bankruptcy reorganization. Moody's views
uncertainty regarding the timing and form of their exit strategy
as a meaningful credit overhang. A full or partial exit could
increase Six Flags' leverage and this is a consideration in
maintaining the CFR at B1 at this time. Absent such exit
transactions, the board and management have indicated a
willingness to allow leverage to decline as earnings increase.
Moody's believes the risk of exit transactions to existing credit
facility lenders is partially mitigated by change of control and
financial maintenance covenants and that good stock price
performance can diminish pressure for aggressive financial
actions.
The proposed refinancing will favorably extend the maturity of the
facility and reduce cash interest expense. This will improve free
cash flow, although Moody's believes Six Flags will distribute the
bulk of its free cash flow to shareholders. The facility is
secured by a first priority lien on substantially all of Six
Flags' wholly-owned domestic subsidiaries (this excludes the
partnership parks) and guaranteed by Six Flags Entertainment
Corporation (SFEC, Six Flags' parent). Ratings on the existing
credit facility will be withdrawn upon closing of the new
facility.
Six Flags' B1 CFR reflects the sizable attendance and revenue
generated from the geographically diversified regional amusement
park portfolio, vulnerability to cyclical consumer spending, high
leverage, liquidity and funding risks associated with minority
holders' annual right to put their share of partnership parks to
Six Flags, and event risk relating to control by a group of
opportunistic distressed debt/hedge fund investors. The amusement
park industry is mature and operators must compete with a wide
variety of leisure and entertainment activities to generate
consumer interest, with attendance growth in the low single digit
range expected over the next 3-5 years. The new management team
installed after Six Flags emerged from bankruptcy has driven
meaningful earnings growth and significantly reduced the margin
gap relative to other regional theme park operators. Moody's
believes ongoing management actions along with alleviating the
burden of the previously over-levered capital structure will
continue to lead to improved park performance. Debt-to-EBITDA
leverage (approximately 4.5x LTM 9/30/11 incorporating Moody's
standard adjustments and the partnership park puts as debt) is
high but is projected to continue declining to a 4x range over the
next 12-18 months absent any leveraging transactions.
The SGL-4 speculative-grade liquidity rating reflects the risk
associated with funding minority interest puts should holders
exercise the maximum amount of potential obligations putable (the
puts are exercisable annually from March 31 through late April and
Six Flags must fund any exercises by May 15th). The liquidity
rating would be higher absent the puts. Moody's assumes a full
exercise in its liquidity analysis, although historical put
exercises have been below $10 million annually (except for $66
million in 2009). This is a level that is comfortably manageable
within Six Flags existing cash ($305 million as of 9/30/11) and
unused capacity on the proposed revolver factoring in a projected
cash burn in the $150 million range between September 30 and mid-
May based on Moody's estimates for operating performance, cost
efficiencies and dividends. The timing of the put option is
crucial as they must be funded by mid-May near the peak of the
company's seasonal cash needs.
The positive rating outlook reflects Moody's view that Six Flags
could be positioned for an upgrade within 12-18 months if leverage
continues to decline and operations are stable or improving. The
liquidity and funding overhang from the partnership puts and event
risks related to the controlling shareholder group are primary
constraining factors at this time, but do not preclude an upgrade
if leverage continues to decline such that financial capacity to
manage these risks increases.
Downward rating pressure could result if acquisitions, cash
distributions to shareholders, ownership transitions, or declines
in attendance and earnings driven by competition or a prolonged
economic downturn lead to debt-to-EBITDA above 5.75x or free cash
flow-to-debt less than 4%. Ratings could also be pressured if
liquidity weakens - including if concerns arise regarding the
company's ability to meet partnership put obligations -- or the
company's financial policies become more aggressive.
A good liquidity position including sufficient cash, projected
free cash flow and committed financing to fully cover potential
partnership park put exercises would be necessary for an upgrade.
Stable to improving operating performance and margins, management
of shareholder distributions within excess cash and free cash
flow, and a conservative leverage profile could position the
company for an upgrade. The nature of the ownership-related event
risk is challenging to quantify, but increased financial capacity
to manage such event risks (such as debt-to-EBITDA in a 4x range
or lower and strong free cash flow-to-debt) would be necessary for
an upgrade.
Please see the ratings tab on Six Flags' issuer page on
www.Moodys.com for the last credit rating action and rating
history. Please see Six Flags' credit opinion on www.Moodys.com
for additional information on the company's ratings.
Six Flags' 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 Six Flags' core industry and
believes Six Flags' 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.
SFEC, headquartered in Dallas, TX, is a regional theme park
company that operates 19 North American parks. The park portfolio
includes 15 wholly-owned facilities (including parks near New York
City, Chicago and Los Angeles) and three consolidated partnership
parks - Six Flags over Texas (SFOT), Six Flags over Georgia
(SFOG), and White Water Atlanta - as well as Six Flags Great
Escape Lodge, which is a consolidated joint venture. Six Flags
currently owns 53.0% of SFOT and approximately 29.7% of SFOG/White
Water Atlanta. Revenue including full consolidation of the
partnership parks and joint venture was approximately $997 million
for the LTM period ended 9/30/11.
SPECTRAWATT INC: To Employ Lynn Tillotson as Litigation Counsel
---------------------------------------------------------------
Spectrawatt, Inc., seeks permission from the U.S. Bankruptcy Court
for the Southern District of New York to employ Lynn Tillotson
Pinker & Cox, LLP, as its special litigation counsel.
The Debtor engaged Lynn Tillotson effective as of Oct. 27, 2011,
to serve as its special litigation counsel regarding potential
claims against SUMCO USA Sales Corporation. The Debtor chose Lynn
Tillotson to act as its litigation counsel because the firm has
substantial commercial litigation expertise and experience.
Lynn Tillotson will, among other things:
(a) consult with the Debtor as the Debtor desires;
(b) present or defend the Debtor in Court with respect to the
case if necessary;
(c) prepare and review pleadings, arrange for filing and
support activities; and
(d) participate in discovery and provide research if necessary.
Lynn Tillotson will be entitled to receive 40% of any "Net
Recovery" obtained by way of settlement, judgment, payment or
other compensation that results directly or indirectly from the
Case. The Contingent Fee will be earned when any payment or
consideration of any kind is obtained as a result of the
litigation of the Cases. Payment of the Contingency Fee will
occur at the same time that funds are received by Debtor.
The Debtor agrees to be directly responsible for all expenses
incurred by Lynn Tillotson in the bankruptcy case.
To the best of the Debtor's knowledge, Lynn Tillotson is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About SpectraWatt Inc.
Based in Hopewell Junction, New York, SpectraWatt Inc. was spun
off from Intel in June 2008 and raised $50 million through a sale
of preferred stock to its former parent and other investors
including Goldman Sachs Group Inc.'s Cogentrix Energy LLC, PCG
Clean Energy and Berlin-based solar panel maker Solon SE. The
Company has also issued about $36.7 million in senior secured
convertible notes.
The Company has a manufacturing facility in Hopewell Junction
designed to generate over 200 megawatts of production per year.
The plant began operations in January 2010 with an initial
capacity of only 30 megawatts per year.
The Company began winding down its affairs late last year after
encountering setbacks and shut down the lone manufacturing
facility in March, and fired all its workers.
SpectraWatt filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No.
11-37366) on Aug. 19, 2011, in Poughkeepsie, New York.
SpectraWatt estimated as much as $50 million in both debt and
assets as of the Chapter 11 filing.
Mark W. Wege, Esq., and Scott Davidson, Esq., at King & Spalding
LLP, in Houston, Texas, is the proposed counsel for the Debtor.
STELLAR GT: The Georgian in Silver Spring Sold for $193 Million
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that The Georgian, an 891-unit apartment project in Silver
Spring, Maryland, can be sold for $193 million to Lowe Real Estate
Group-East Inc. under a Chapter 11 plan for the project's owner
that was approved last week in a confirmation order signed by the
U.S. Bankruptcy Court in Greenbelt, Maryland.
According to the report, if the buyer doesn't complete the
acquisition, the plan has alternative terms where the existing
loan will be restructured so the lender ends up with ownership.
Ninety percent occupied, the project has twin 14-story towers on a
3.25-acre plot. There are $185 million in original principal
amount of first mortgages, not including a $30 million mezzanine
loan.
About Stellar GT TIC and VFF TIC
Stellar GT TIC LLC and VFF TIC LLC, owners of the Georgian
apartments located at 8750 Georgia Avenue in Silver Spring,
Maryland, filed for Chapter 11 bankruptcy protection (Bankr. D.
Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge
Wendelin I. Lipp oversees the case. Michelle Maloney-Raymond is
the case administrator. Matthew G. Summers, Esq., at Ballard
Spahr LLP, serves as the Debtors' counsel.
The Debtors negotiated a plan of reorganization before filing for
Chapter 11. The proposed plan is premised on either (1) a sale of
the project pursuant to an auction process or (2) a consensual
restructuring of the secured debt. Broker CB Richard Ellis Inc.
has been hired to conduct the sale.
The auction rules provide that a first-round sealed bid would be
required to be submitted by Aug. 24, 2011. The broker would then
have until Sept. 5 to negotiate with the first-round bidders.
Second- round sealed bids would be due Sept. 5. The highest
second-round bid would be identified by Sept. 12. The highest bid
would be submitted for approval at the confirmation hearing in
October.
Wells Fargo, the holder of a $207.6 million secured debt, can bid
at the auction. The Lender is represented by Mark Taylor, Esq.,
at Kilpatrick Townsend & Stockton LLP, and Jantra Van Roy, Esq.,
at Zeichner Ellman & Krause LLP.
The U.S. Trustee for Region 4 notified the Court that he has not
appointed an unsecured creditors' committee in the Chapter 11
cases of Stellar GT TIC LLC and VFF TIC LLC.
SWADENER INVESTMENT: Has Access to Cash Collateral Until March 31
-----------------------------------------------------------------
United States Bankruptcy Judge Terrence L. Michael has authorized
Swadener Investment Properties, LLC, to use cash collateral
through and including March 31, 2012. Debtor will be allowed a
variance of 10% on each budgeted item. Furthermore, to the extent
an expense is not fully used during a particular month, that
unused portion will carry forward to the next month.
NBC Bank and Valley National Bank are granted replacement liens in
and to the future rents of the Debtor to the extent the Debtor
uses cash collateral.
As reported in the TCR on Oct. 3, 2011, the Debtor asked the U.S.
Bankruptcy Court for the Northern District of Oklahoma for
authorization to use cash collateral in which Valley National Bank
and NBC Bank each assert an interest from Oct. 1, 2011, to
March 31, 2012.
Valley National Bank and NBC Bank assert that they hold first
mortgages on the commercial building owned by the Debtor, which
include Assignment of Rent clauses.
The Debtor will use the cash collateral to pay postpetition wages,
insurance, utilities, repair, and maintenance expenses to continue
operations and to maintain and preserve the bankruptcy estate.
About Swadener Investment
Tulsa, Oklahoma-based Swadener Investment Properties, LLC, owns
and operates four commercial office buildings and a retail
shopping Center. The Company filed for Chapter 11 bankruptcy
protection (Bank. N.D. Okla. Case No. 11-10322) on Feb. 18, 2011.
Scott P. Kirtley, Esq., and Karen C. Walsh, Esq., at Riggs, Abney,
Neal, Turpen, Orbison, & Lewis, in Tulsa, Okla., serve as the
Debtor's bankruptcy counsel. The Debtor disclosed $14,796,520 in
assets and $12,057,950 in liabilities as of the Chapter 11 filing.
Affiliate Pecan Properties, Inc. (Bankr. N.D. Okla. Case No.
11-10323) filed a separate Chapter 11 petition.
TASANN TING: Court Considers Case Conversion Plea on Dec. 13
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
will convene a hearing on Dec. 13, 2011, at 2:15 p.m., to consider
the motion to convert the Chapter 11 case of Tasann Ting Group
Inc. to one under Chapter 7 of the Bankruptcy Code.
August B. Landis, Acting U.S. Trustee for Region 17 requested for
the conversion of the Debtor's case because:
1) the case has been pending for almost one year and the Debtor
has failed to file a viable disclosure statement or plan; and
2) the Debtor is operating at a significant monthly deficit and
there is no likelihood of rehabilitation.
The U.S. Trustee is represented by:
Edwina E. Dowell, Esq., Assistant U.S. Trustee
Nanette Dumas, Esq.
John S. Wesolowski, Esq.
Emily S. Keller, Esq.
Office of the United States Trustee
U. S. Department of Justice
280 S. First Street, Suite 268
San Jose, CA 95113-0002
Tel: (408) 535-5525
Fax: (408) 535-5532
About Tasann Ting Group, Inc.
Sunnyvale, California-based Tasann Ting Group, Inc. A Calif. Corp
owns and operates a 250,000 square foot commercial warehouse
facility located at 39889 Eureka Drive, Newark, California. It
filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif.
Case No. 10-63154) on Dec. 28, 2010. Ted Z. Wolny, Esq., at
Miller Wolny Legal Group, serves as the Debtor's bankruptcy
counsel. According to its schedules, the Debtor disclosed
$19,440,960 in total assets and $21,052,736 in total debts as of
the Petition Date.
TENNESSEE COMMERCE: Receives Notice of Deficiency From NASDAQ
-------------------------------------------------------------
Tennessee Commerce Bancorp, Inc. reported that on Nov. 22, 2011,
it received a deficiency letter from The NASDAQ Stock Market LLC
indicating that the Company was not in compliance with the
requirements for continued listing under NASDAQ Listing Rule
5250(c)(1), which requires that NASDAQ-listed companies file their
required periodic financial reports with the U.S. Securities and
Exchange Commission on a timely basis. The Deficiency Letter was
issued in accordance with standard NASDAQ procedures as a result
of the Company not yet having filed its Form 10-Q for the period
ended September 30, 2011 (the "Form 10-Q") with the SEC.
The Deficiency Letter states that the Company has 60 calendar days
or until Jan. 23, 2012 to submit a plan to NASDAQ to regain
compliance with the filing requirements for continued listing on
the NASDAQ Global Market. If the Plan is accepted, the Company
can be granted an exception of up to 180 calendar days or until
May 14, 2012, to regain compliance.
Pending submission of the Plan, the Company's common stock will
continue to be listed for trading on the NASDAQ Global Market.
The Company expects to resolve the matter as soon as possible or
otherwise timely file the Plan; however, there can be no assurance
that the Plan will be accepted by NASDAQ. In the event the Plan
is not accepted, the Company has the right to appeal to the NASDAQ
Hearings Panel. The Company currently believes that it will be
able to file its Form 10-Q for the period ended September 30, 2011
prior to Jan. 23, 2012.
About Tennessee Commerce
Tennessee Commerce Bancorp, Inc. -- http://
www.tncommercebank.com/ -- is the parent company of Tennessee
Commerce Bank (the "Bank"). The Bank provides a wide range of
banking services and is primarily focused on business accounts.
Its corporate and banking offices are located in Franklin,
Tennessee. The Company's common stock is traded on the NASDAQ
Global Market under the symbol "TNCC."
THORNBURG MORTGAGE: First Amendment Doesn't Shelter Ratings Firms
-----------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that a federal judge
has ruled that the First Amendment doesn't bar investors from
suing credit rating companies over losses on mortgage-backed
securities issued by failed lender Thornburg Mortgage Inc., a blow
to firms that had argued their ratings were protected.
About Thornburg Mortgage
Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA)
-- http://www.thornburgmortgage.com/-- was a single-family
residential mortgage lender focused principally on prime and
super-prime borrowers seeking jumbo and super-jumbo adjustable
rate mortgages. It originated, acquired, and retained investments
in adjustable and variable rate mortgage assets. Its ARM assets
comprised of purchased ARM assets and ARM loans, including
traditional ARM assets and hybrid ARM assets.
Thornburg Mortgage and its four affiliates filed for Chapter 11
bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009.
Thornburg changed its name to TMST, Inc.
Judge Duncan W. Keir is handling the case. David E. Rice, Esq.,
at Venable LLP, in Baltimore, Maryland, served as counsel to
Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as
special counsel. Jim Murray, and David Hilty, at Houlihan Lokey
Howard & Zukin Capital, Inc., served as investment banker and
financial advisor. Protiviti Inc. served as financial advisory
services. KPMG LLP served as the tax consultant. Epiq Systems,
Inc., serves claims and noticing agent. Thornburg disclosed total
assets of $24.4 billion and total debts of $24.7 billion, as of
Jan. 31, 2009.
On Oct. 28, 2009, the Court approved the appointment of Joel I.
Sher as the Chapter 11 Trustee for the Company, TMST Acquisition
Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging
Strategies, Inc. He is represented by Shapiro Sher Guinot &
Sandler.
TOWN CENTER: Committee Retains Genovese, Joblove as Counsel
-----------------------------------------------------------
The Official Unsecured Committee of Town Center at Doral LLC,
Landmark at Doral East LLC, Landmark at Doral South LLC, Landmark
Club at Doral LLC and Landmark at Doral Developers LLC asks the
U.S. bankruptcy Court for the District of Florida to retain Glenn
D. Moses, Esq. of Genovese, Joblove & Batista, P.A. as counsel.
Upon retention, the firm will, among other things:
-- advise the Committee with respect to its rights, powers, and
duties in these Chapter 11 cases;
-- assist and advise the Committee in its consultations with
the Debtors relative to the administration of these Chapter
11 cases; and
-- assist the Committee in analyzing the claims of the Debtors'
creditors in the negotiations with such creditors.
Glenn D. Moses, Esq., shareholder of Genovese, Joblove & Batista,
P.A., attests that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm's rates are:
Personnel Rates
--------- -----
Attorneys $200-$600
Legal assistants $125-$180
About Town Center
Town Center at Doral LLC, Landmark at Doral East LLC, Landmark at
Doral South LLC, Landmark Club at Doral LLC and Landmark at Doral
Developers LLC, companies associated with the aborted Landmark at
Doral development, filed for Chapter 11 bankruptcy (Bankr. S.D.
Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19, 2011, almost
three years after AmTrust Bank sought to foreclose on the project.
Town Center at Doral LLC posted assets of $29,297,300 and
liabilities of $166,133,171. Isaac Kodsi signed the petitions as
vice president.
Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP
in Miami, serves as counsel to the Debtors.
Cleveland, Ohio-based AmTrust filed for foreclosure in October
2008 based on the $124.4 million in mortgages that were granted
the developer in 2005. Several projects started by EB Developers
fell into foreclosure after owner and CEO Elie Berdugo died in
February 2008.
TOWNSEND CORP: Has GlassRatner to Find Buyers for Dealership
------------------------------------------------------------
Townsend Corporation seeks permission from the U.S. Bankruptcy
Court for the Central District of California to employ GlassRatner
Advisory & Capital Group, LLC, as its financial advisor and
investment banker.
GlassRatner will identify buyers for the Debtor's dealership and
seek to consummate a sale of the Debtor's dealership by among
other things:
(a) preparing an offering memorandum for distribution to
prospective buyers;
(b) developing a list of prospective buyers;
(c) distributing the offering memorandum and related documents
to prospective buyers;
(d) assisting in negotiations with any prospective stalking
horse bidder;
(e) bringing additional prospective bidders to the auction of
the Debtor's dealership in order to maximize sale proceeds;
and
(f) assisting with the approval and closing of any sale
transaction.
In the event of a sale, GlassRatner's fee will be equal to the sum
of $200,000, plus 10% of the amount by which the goodwill exceeds
$3 million in a closed sale transaction for both dealerships. In
the event that GlassRatner sells only one of the dealerships, the
fee will be equal to the sum of $100,000, plus 10% of the amount
by which the goodwill exceeds $1.5 million.
To the best of the Debtor's knowledge, GlassRatner is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Townsend Corp. and LRJC
Auto dealers Townsend Corporation, d/b/a Land Rover Jaguar Anaheim
Hills, and LRJC, Inc., d/b/a Land Rover Jaguar Cerritos, filed for
Chapter 11 bankruptcy (Bankr. C.D. Calif. Case Nos. 11-22690 and
11-22695) on Sept. 9, 2011. Judge Robert N. Kwan presides over
the cases. Martin J. Brill, Esq., and Todd M. Arnold, Esq. --
mjb@lnbyb.com and tma@nbyb.com -- at Levene, Neale, Bender, Yoo &
Brill LLP, in Los Angeles, represent the Debtors. Each of the
Debtors estimated $10 million to $50 million in both assets and
debts. The petitions were signed by Ernest W. Townsend, IV, the
president.
McQueen & Ashman LLP as is the Debtor's special corporate and
litigation counsel.
UNIONBANCAL: Moody's Changes Outlook to Stable
----------------------------------------------
Moody's Investors Service changed the rating outlook on
UnionBanCal Corporation and subsidiaries to stable from negative.
Moody's also affirmed the long-term ratings of UnionBanCal
Corporation (subordinated debt of Baa1) and its subsidiary, Union
Bank, N.A. (long-term bank deposits of A2 and its bank financial
strength rating of C+).
These actions had no impact on the FDIC-guaranteed debt issued by
Union Bank, N.A., which remains at Aaa with a negative outlook.
RATINGS RATIONALE
The change in rating outlook is based on UnionBanCal's superior
credit metrics in its residential mortgage and home equity
portfolio, which accounts for 45% of its total loans. UnionBanCal
has targeted wealthy borrowers in the metropolitan and coastal
areas of California. Its residential portfolio is conservatively
underwritten with high FICOs and low LTVs. These characteristics
resulted in better performance than Moody's had previously
anticipated. Residential net charge-offs were 0.32% in the third
quarter of 2011, which is better than most similarly-rated peers.
Regarding UnionBanCal's total loan portfolio, its nonperforming
assets, including 90 days past due and accruing TDRs, as a
percentage of total loans and OREO were 1.8% (excluding FDIC
covered assets), which is a relatively low level.
Moody's last rating action was on April 13, 2009 when
UnionBanCal's long-term ratings were downgraded with a negative
outlook.
The methodologies used in this rating were "Bank Financial
Strength Ratings: Global Methodology" published in February 2007,
"Incorporation of Joint-Default Analysis into Moody's Bank
Ratings: A Refined Methodology" published in March 2007, and
"Moody's Guidelines for Rating Bank Hybrid Securities and
Subordinated Debt published in November 2009.
UnionBanCal Corporation, which is headquartered in San Francisco,
CA reported total assets of $84 billion as of September 30, 2011.
ZAIS INVESTMENT: Noteholder Plan Heads for Approval Hearing
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a reorganization plan for Zais Investment Grade Ltd.
VII will come to U.S. Bankruptcy Court in Trenton, New Jersey for
approval at a Feb. 6 confirmation hearing. The disclosure
statement explaining the plan proposed by Hildene Capital
Management was approved last week.
The report relates that Zais was a theoretically bankruptcy-remote
special purpose company created to own collateralized debt
obligations. The case began with the filing of an involuntary
Chapter 11 petition in April by Anchorage Capital Group LLC.
Bloomberg relates that after a group of junior noteholders led by
Hildene failed in an effort at having the bankruptcy dismissed,
junior noteholders filed their own plan. The plan will continue
the business of holding the investments and paying out receipts,
first paying off the $184.1 million in senior-most notes. The
disclosure statement says that the most senior notes will be fully
paid over time. The second tier of notes, amounting to
$27 million, are predicted to have an eventual 68.5% recovery. The
second-tier noteholders will waive their claims for post-
bankruptcy interest and in return receive the new common stock.
The disclosure statement predicts no recovery for more than $148
million in more junior tranches of notes.
About Zais Investment Grade Limited
Zais Investment Grade Limited VII is based in Grand Cayman.
On April 1, 2011, Anchorage Capital Master Offshore, Ltd., GRF
Master Fund, L.P., and Anchorage Illiquid Opportunities Offshore
Masters, L.P. filed an involuntary Chapter 11 petition against
Zais Investment Grade Limited VII. On April 26, 2011, the U.S.
Bankruptcy Court for the District of New Jersey entered an order
for relief under chapter 11 of the Bankruptcy Code.
The Debtor tapped Wollmuth Maher & Deutsch LLP as general
bankruptcy counsel, and Jones Day as special counsel.
The Debtor disclosed $365,771,549 in liabilities in its schedules.
* Final Bids for Distressed Property Loans Due
----------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that final bids for a
GBP1 billion ($1.6 billion) portfolio of distressed commercial
property loans being sold by Lloyds Banking Group PLC are due on
Wednesday, people familiar with the situation told Dow Jones.
* Distressed Property Level Rising, But Investor Demand Subdued
---------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that the level of
distressed commercial property available around the world is
expected to rise in the final three months of 2011, but demand
from cautious investors is much lower as the deepening global
financial stresses take their toll, according to a survey from the
Royal Institute of Chartered surveyors.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 3-5, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Grand Hyatt Atlanta, Atlanta, Ga.
Contact: http://www.turnaround.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
November 1-3, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Westin Copley Place, Boston, Mass.
Contact: http://www.turnaround.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
October 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
*********
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
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A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
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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
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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
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re-mailing and photocopying) is strictly prohibited without prior
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*** End of Transmission ***