/raid1/www/Hosts/bankrupt/TCR_Public/120127.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, January 27, 2012, Vol. 16, No. 26
Headlines
155 EAST TROPICANA: Hooters Casino Hotel to be Auctioned Feb. 17
AES THAMES: To Liquidate After Asset Sale Collapsed
AHERN RENTALS: Final Hearing on DIP Motion Continued to Jan. 27
ALABAMA AIRCRAFT: Judge Tosses Boeing Protest of Airline Sale
ALC HOLDINGS: Files Schedules of Assets and Liabilities
AMERCO: S&P Withdraws 'BB+' Corporate Credit Rating
AMERICAN AIRLINES: USAir Confirms Hiring Advisors for Merger Bid
AMERICAN AIRLINES: S&P Affirms BB Rating on 2005-1G Certificates
AMERICAN GREETINGS: Moody's Affirms 'Ba1' Corp. Family Rating
AMERICAN SCIENTIFIC: Paul Cohen Named to Board of Directors
ATLANTIC & PACIFIC: Feb. 6 and 7 Hearing Slated for Plan
ATLANTIC & PACIFIC: Court OKs $750M Exit Financing Package
BAKERS FOOTWEAR: Wells Fargo Discloses 7.5% Equity Stake
BERNARD L. MADOFF: Mets to Ask Judge to Decide on Trustee's Claims
BLUE COAT: Moody's Assigns 'B2' Corporate Family Rating
BLUE EARTH: Posts $1.7 Million Net Loss in Third Quarter
BOOMERANG SYSTEMS: Joseph Bellantoni Resigns as CFO
CANAL CAPITAL: Incurs $708,503 Net Loss in Fiscal 2011
CAPMARK FINANCIAL: Sued Ex-CEO Over Stock Redemption Payments
CAPMARK FINANCIAL: Reaches $4MM Deal with Feds to End FCA Suit
CAVE LAKES: Hires Neil J. Beller Ltd as Counsel
CDC CORP: Troutman Sanders Approved as Equity Committee Counsel
CENTRAL AMERICAN: Moody's Assigns (P)Ba2 Rating to Senior Notes
CHESTER DOWNS: Fitch Rates Proposed $315-Mil. Sr. Notes at 'BB-'
CHESTER DOWNS: S&P Assigns Prelim. 'B+' Rating to $315MM Notes
CIMA LLC: Sec. 341(a) Creditors' Meeting Continued to Jan. 31
CIMA LLC: U.S. Trustee Unable to Form Committee
CIMA LLC: Hires Ronald F. Suber as Local Counsel
CIT GROUP: Accused by Tyco of Dragging Feet on $190MM Tax Claim
CLEAR CHANNEL: William Eccleshare Named Chief Executive Officer
CLEARWIRE CORP: To Report $362 Million Q4 2011 Revenue
CLEARWIRE CORP: To Offer $300MM Sr. Notes at 100% Issue Price
CLEARWIRE CORP: S&P Assigns 'CCC' Rating to $300MM Secured Notes
CRYOPORT INC: Westcliff Capital Discloses 9.9% Equity Stake
DE TECHNOLOGIES: Files Schedules of Assets and Liabilities
DE TECHNOLOGIES: Court Sets Feb. 24 Claims Bar Date
DISH NETWORK: Fitch Affirms 'BB-' Issuer Default Rating
DRIWATER INC: File for Chapter 7 Liquidation
EASTMAN KODAK: Wins Interim Nod to Access $650MM of Financing
EASTMAN KODAK: Wins Interim Approval to Access Cash Collateral
EASTMAN KODAK: Seeks Approval to Pay Claims of Critical Vendors
EASTMAN KODAK: Taps Alix's Masterharm as Restructuring Chief
DYNEGY INC: Plan Amended to Hike Consideration
DYNEGY INC: U.S. Bank Sues; Debtors Want Claims Disallowed
DYNEGY INC: Appaloosa Says Claims Improperly Grouped Together
DYNEGY INC: Files Report on Facilities; U.S. Bank Balks
DYNEGY INC: Examiner Submits Work Plan; To Cost $4MM
ENER1 INC: Battery Maker Seeks Chapter 11 Protection
ENER1 INC: Case Summary & 20 Largest Unsecured Creditors
EVERGREEN ENERGY: Ch. 7 Trustee Takes Over; No More Employees
EVERGREEN SOLAR: Feb. 1 Hearing on Case Dismissal, Conversion Set
EXIDE TECHNOLOGIES: Time to Remove FDEP Suit Extended to Feb. 29
EXIDE TECHNOLOGIES: Has Stipulation on Trenton City Claim
EXIDE TECHNOLOGIES: Status Report on Suit vs. EnerSys Due Jan. 30
EXIDE TECHNOLOGIES: Files 3rd Quarter 2011 Summary Report
FIBERTOWER: Receives Nasdaq Delisting Notice
FILENE'S BASEMENT: Court Approves Skadden Arps as Counsel
FILENE'S BASEMENT: Hearing on Bid for Examiner Delayed
FULL CIRCLE: Court Approves Dixon Hughes as Tax Accountant
GARDENS OF GRAPEVINE: Court Confirms Reorganization Plan
GARLOCK SEALING: Appeals in Nine Cases Consolidated
GENERAL MARITIME: Court Fixes Feb. 23 as Claims Bar Date
GENERAL MARITIME: Court Approves Jones Day as Committee's Counsel
GENERAL MARITIME: Perella Weinberg OK'd as Panel's Fin'l Advisor
GENERAL MARITIME: Lowenstein Ok'd as Panel's Conflicts Counsel
GENTA INC: FINRA Denies Request to Effect a Reverse Stock Split
GRANITE CITY: Receives NASDAQ Delisting Notice
GRUBB & ELLIS: Appeals NYSE Listing Suspension Determination
GUIDED THERAPEUTICS: Wants Panel to Review PMA for LuViva
HOSTESS BRANDS: Sec. 341(a) Creditors' Meeting Set for Feb. 28
HOSTESS BRANDS: Files Bid to Reject Teamsters, Bakers Union CBAs
HOSTESS BRANDS: Teamsters Warn of Misuse of Chapter 11
IMPLANT SCIENCES: Director Joseph Levangie Dies
INDYMAC BANCORP: Ex-Execs. Accuse FDIC of 'Stunning' Incompetence
INNER CITY: Has Until April 5 to Decide on Unexpired Leases
INVESTORS LENDING: Taps Aron G. Weiner as Special Attorney
JEFFERSON COUNTY, AL: Jim Crane Seeks to Quash Subpoena
KGB: Moody's Downgrades CFR to B1; Outlook Negative
LAKEVIEW BASEBALL CLUB: Wrigley Rooftop Venue Sold for $5MM
LEE ENTERPRISES: Wins Confirmation of Second Amended Plan
LORD & TAYLOR: S&P Assigns 'B+' Corporate Credit Rating
LOS ANGELES DODGERS: Wants Decision on Leases Extended to April 30
LPATH INC: Johnson & Johnson No Longer Owns Common Shares
MAKENA GREAT: Files Schedules of Assets and Liabilities
MAQ MANAGEMENT: Motion to Turnover Cash Collateral Denied
MESA AIR: Asked for May 19 Extension for Closing Report
MESA AIR: Asked for May 19 Extension for Claims Objections
MINOR HOTEL: Files Sale-Based Chapter 11 Plan
MOHEGAN TRIBAL: Has Private Offering to Restructure Debt
MOHEGAN TRIBAL: Moody's Will Consider Offer as Limited Default
MONEY TREE: Bankr. Administrator Names 7-Member Creditors' Panel
MONEY TREE: Unsec. Creditor Wants Case Moved to M.D. of Georgia
NEDAK ETHANOL: Ascendant Completes Capital Restructuring
NEXT 1: Posts $2.8 Million Net Loss in Nov. 30 Quarter
OPEN RANGE: Completes Liquidation of Remaining Assets
PERRY COUNTY: Green Group Substitutes as Purchaser of Assets
PFF BANCORP: Former Execs Ink $8MM Deal to End Securities Suit
PMI GROUP: U.S. Trustee Objects to Employee Incentive Payment
PMI GROUP: Court Sets Feb. 24 General Claims Bar Date
POINT BLANK: Seeks to Expand Venable's Scope of Work
RANCHO LAS FLORES: Sec. 341 Creditors' Meeting Set for Feb. 29
REALOGY CORP: Proposes Two Series of Notes to Pay Down its Debt
REDCO DEVELOPMENT: Amends Plan to Delete Injunction Against Owner
RIM DEVELOPMENT: U.S. Trustee Wants Ch. 11 Converted or Dismissed
SBARRO LLC: S&P Assigns 'B-' Corp. Rating After Bankruptcy Exit
SEQUENOM INC: Files Amended No.1 to $150MM Securities Offering
SHAMROCK-SHAMROCK: Wants to Employ Krimsky as Special Counsel
SHAMROCK-SHAMROCK: Withdraws Motion to Employ Lanigan
SHAMROCK-SHAMROCK: Disclosure OK'd; Confirmation on March 1
SHAW FAMILY: Settles Dispute Over Marilyn Monroe Image Rights
SOUTHERN MONTANA: Regulator Wants to Intervene in Ch. 11
SP NEWSPRINT: Has Final Approval for $20 Million Loan
STATE FAIR OF VIRGINIA: Court OKs Aery as Financial Advisor
STATE FAIR OF VIRGINIA: Can Tap Troutman Sanders as Counsel
STOCKDALE TOWER: Court Approves CBRE as Real Estate Broker
STOCKDALE TOWER: Court Approves Shinault Baker as Accountant
SWIFT TRANSPORTATION: S&P Raises Corporate Credit Rating to 'B+'
THORNBURG MORTGAGE: Goldman Wins Removal of Trustee's $19MM Suit
THORPE INSULATION: Asbestos Plan Not 'Insurance Neutral'
TRIBUNE CO: Court Sets May 16 as Plan Confirmation Hearing
TRIBUNE CO: Objects to WTC Appeal on Subordination
TRIBUNE CO: Sam Zell Sues Shareholders Over 2007 LBO
URBAN BRANDS: Plan of Liquidation Declared Effective
US FIDELIS: Can Employ David Lander as Special Conflicts Counsel
U.S. SECURITY: Moody's Says 'B1' CFR Unaffected by Acquisition
UTAH HOUSING: Moody's Lowers Rating on Revenue Bonds to 'B2'
VANTAGE SPECIALITY: S&P Assigns Prelim. 'B' Corp. Credit Rating
VIASPACE INC: Kevin Schewe Appointed to Board of Directors
VM ASC: Court Denies Motion to Extend Time to File Amended Plan
WASHINGTON MUTUAL: Whitebox to Support Latest Reorganization Plan
WASHINGTON MUTUAL: Judge May Vacate Insider Trading Claims
WESTMORELAND COAL: Offering $125MM Sr. Notes at 95% of Face Value
WINDOW FACTORY: Relief from Involuntary Petition Granted
W.R. GRACE: Contributing $109.3-Mil. to Pension Plan This Year
W.R. GRACE: Proposes February 2013 Extension to ART Facility
W.R. GRACE: LOC Termination Extended Through March 2013
ZAIS INVESTMENT: Prepack Plan Wins Court Confirmation
* U.S. Trustee's New Ch. 11 Fee Rules Rankle Attorneys
* With $300M in Debt, Two New York Hotels Set for Foreclosure
* Private Equity Can Clear Feared Wall of Debt, Experts Say
* Ancela Nastasi Joins Fulbright as Partner in New York
* Garden City Group Moves to Bigger Location in New York
* Great American Appoints Chad Yutka as Valuation Services Head
* Kieran Pinney & Shane Mahmood Join Allegiance Capital
* BOOK REVIEW: Inside Investment Banking, Second Edition
*********
155 EAST TROPICANA: Hooters Casino Hotel to be Auctioned Feb. 17
----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Hooters Casino Hotel in Las Vegas will go up for
auction on Feb. 17 to determine whether there is a better offer to
reorganize the 696-room hotel and casino. Competing bids are due
Feb. 10. If there is an auction, it will be held in court
immediately before the Feb. 17 hearing for approval of the sale.
Mr. Rochelle relates that early this month the owner filed a
Chapter 11 plan where secured creditor Canpartners Realty Holding
Co. IV LLC will acquire the property in exchange for debt.
Canpartners owns 98.4% of the $130 million in 8.75% second-lien
senior secured notes. The bankruptcy court approved a disclosure
statement and scheduled a March 2 confirmation hearing for
approval of the plan.
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 Aug. 8
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.
AES THAMES: To Liquidate After Asset Sale Collapsed
---------------------------------------------------
Evan Weinberger at Bankruptcy Law360 reports that Judge Kevin J.
Carey of the Delaware bankruptcy court on Monday approved the
liquidation of AES Thames LLC after a proposed buyer of the
Connecticut power plant operator's assets could not reach a lease
extension or modification on the property and missed a deadline
for closing the sale.
Judge Carey signed an order converting AES Thames's Chapter 11
bankruptcy proceedings to a Chapter 7 liquidation after S&S
Deconstruction LLC was unable to negotiate a lease extension or
modification with Smurfit-Stone Container Corp., according to
Law360.
About AES Thames
Uncasville, Connecticut-based AES Thames, L.L.C., owns and
operates a coal-fired power plant located in Montville,
Connecticut. The facility generates and sells electricity to
Connecticut Light and Power Company. It also supplies processed
steam to a recycled paperboard mill owned by Smurfit-Stone
Container Corp. AES Thames is a unit of AES Corp., the Arlington,
Virginia-based power producer with operations in 29 countries.
AES Thames filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 11-10334) on Feb. 1, 2011. The increased cost of
energy production and the "uneconomic and onerous provisions" of a
steam sale agreement with Smurfit-Stone's predecessor led AES
Thames to seek bankruptcy protection.
Adam G. Landis, Esq., Kerri K. Mumford, Esq., J. Landon Ellis,
Esq., and Jeffrey R. Drobish, Esq., at Landis Rath & Cobb LLP, in
Wilmington, Delaware, serve as the Debtor's bankruptcy counsel.
The Debtor tapped Murtha Cullina LLP as its special counsel;
Charles River Associates as its regulatory consultant, and
Houlihan Lockey Capital, Inc., as financial advisor and investment
banker.
According to court filings, based on the balance sheet as of
Dec. 1, 2010, total assets were $162 million, and the Debtor has
$52 million in short term liabilities and $122.6 million in long
term debt.
The Official Committee of Unsecured Creditors tapped FTI
Consulting Inc. as its restructuring and financial advisor, and
Blank Rome LLP as its counsel.
AHERN RENTALS: Final Hearing on DIP Motion Continued to Jan. 27
---------------------------------------------------------------
On Jan. 3, 2012, the U.S. Bankruptcy Court for the District of
Nevada entered an amended interim order authorizing Ahern Rentals,
Inc., to obtain postpetition financing under an asset-based
revolving credit facility in an amount up to an aggregate
principal amount $20,000,000 outstanding at any time from Bank of
America, N.A., as DIP Agent for itself and the other DIP Lenders,
pending entry of the final Order for working capital and other
general corporate purposes in accordance with an Initial Budget.
The Debtor is further authorized to continue using the Bank
Products as set forth in the DIP Credit Agreement and DIP Loan
Documents, including without limitation, the Bank of America
Corporate Card Purchasing Agreement dated Aug. 25, 2005. Upon
entry of the Final Order, and closing of the DIP Credit Agreement,
the Prepetition L/Cs will be deemed owing under the DIP Documents
to such bank and secured by the DIP Liens as if such Prepetition
L/Cs were issued under the DIP Documents.
The Debtor is also authorized to use the Prepetition Collateral,
including the Cash Collateral, during the period from the Petition
Date through and including the Termination Date (as defined in the
DIP Agreement) for working capital and general corporate purposes
(including costs related to the Case) in accordance with the terms
and conditions of this Order and the Initial Budget.
A complete text of the amended interim order is available for free
at http://bankrupt.com/misc/ahernrentals.doc95.pdf
As reported in the TCR on Dec. 27, 2011, subject to the entry of
the Final Order, the Debtors have asked the Bankruptcy Court for
authorization to obtain up to the aggregate principal amount of
$350 million outstanding at any time on a final basis (including a
$10 million sub-limit for letters of credit) on the terms and
conditions set forth in the Final Order and the DIP Documents.
The final hearing on DIP motion, originally scheduled for
Jan 17, 2012, at 2:00 pm., was rescheduled to Jan. 27, 2012, at
9:30 a.m.
Kubota Files Objection
BankruptcyData.com reports that Kubota Tractor filed with the U.S.
Bankruptcy Court an objection to Ahern Rentals'' financing motion
and financing motion supplement. Kubota also filed with the Court
"notice of its unwillingness to finance sales of Kubota Equipment
to Debtor under the restrictions of the Financing Motion and the
Financing Motion Supplement." According to BData, the Company's
official committee of unsecured creditors also objected to the
Company's motion for post-petition financing and a stipulation
between the Debtor and its majority term lenders regarding the use
of term lenders' cash collateral.
About Ahern Rentals
Ahern Rentals, Inc. -- http://www.ahern.com/-- is an equipment
rental company in the United States. The company also sells new
and used rental equipment, parts and supplies related to
its rental equipment, and merchandise used by the construction
industry, as well as provides maintenance and repair services.
Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D.
Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain
an extension of the Aug. 21, 2011 maturity of its revolving credit
facility. Judge Bruce T. Beesley presides over the case. Gerald
M. Gordon, Esq., William M. Noall, Esq., Thomas H. Fell, Esq., and
Gabrielle A. Hamm, Esq., at Gordon Silver, in Las Vegas, Nevada;
and Gregg M. Galardi, Esq., at DLA Piper (US) LLP, in New York,
N.Y., serve as the Debtor's counsel. The Debtor's financial
advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman
Carson Consultants LLC serves as claims and notice agent.
Counsel to Bank of America, as the DIP Agent and First Lien
Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq.,
at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer.
Attorneys for the Majority Term Lenders are Paul Aronzon, Esq.,
and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy
LLP. Counsel for the Majority Second Lienholder are Paul V.
Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq.,
at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James
E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is
represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E.
Siegel, Esq., at Dechert LLP argue for certain revolving lenders.
Attorneys for U.S. Bank National Association, as successor to
Wells Fargo Bank, as collateral agent and trustee for the benefit
of holders of the 9-1/4% Senior Secured Notes Due 2013 under the
Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard,
Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland
& Hart.
The Company filed for Chapter 11 because it was unable to extend
the maturity of its revolving credit facility.
The Debtor estimated $500 million to $1 billion in assets and
debts. The Company has $50 million of DIP financing from existing
lenders.
ALABAMA AIRCRAFT: Judge Tosses Boeing Protest of Airline Sale
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that a federal judge threw out
Boeing Co.'s attempt to derail the sale of Birmingham, Ala.-based
Alabama Aircraft Industries Inc., which collapsed into bankruptcy
after running out of big military contracts for aviation repair.
About Alabama Aircraft
Birmingham, Alabama-based Alabama Aircraft Industries Inc. --
http://www.alabamaaircraft.com/-- provided aircraft maintenance
and modification services for the U.S. government and military
customers. Its 190-acre facility, as well as its corporate
office, is located at the Birmingham International Airport.
Alabama Aircraft filed for Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 11-10452) on Feb. 15, 2011. Two
subsidiaries also filed: Alabama Aircraft Industries, Inc.-
Birmingham (Case No. 11-10453) and Pemco Aircraft Engineering
Services, Inc. (Case No. 11-10454).
The Company said the primary goal of the Chapter 11 filing is
to address long-term indebtedness and, in particular, long-term
pension obligations. The Company owed $68.5 million the Pension
Benefit Guaranty Corp. prepetition.
Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway,
Stargatt & Taylor, in Wilmington, Delaware, served as counsel to
the Debtors. Alabama Aircraft estimated assets and debts of
$1 million to $10 million as of the Chapter 11 filing.
The Debtor won Court authority at the end of August 2011 to sell
its assets to a unit of Kaiser Group Holdings Inc. for $500,000
and up to $30 million in recoveries from potential litigation.
ALC HOLDINGS: Files Schedules of Assets and Liabilities
-------------------------------------------------------
American Laser Centers of California LLC filed with the U.S.
Bankruptcy Court for the District of Delaware its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $20,988,454
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $93,357,271
E. Creditors Holding
Unsecured Priority
Claims $70
F. Creditors Holding
Unsecured Non-priority
Claims $6,594,525
----------- -----------
TOTAL $20,988,454 $99,951,866
Debtor-affiliates also filed their respective schedules,
disclosing:
Company Assets Liabilities
------- ------ -----------
ALC Holdings LLC $14,662 $93,744,094
American Laser Centers LLC $6,250,112 $295,604,407
About ALC Holdings LLC
Farmington Hills, Michigan-based ALC Holdings LLC dba American
Laser Centers, and American Laser Skincare, provides laser hair
removal treatments.
The Company and its affiliates filed for Chapter 11 protection
(Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011.
Bankruptcy Judge Mary F. Walrath presides over the case. Landis
Rath & Cobb LLP represents the Debtors in their restructuring
efforts. BMC Group Inc. serves as claims agent; SSG Capital
Advisors, LLC serves as financial advisors; and Traverse, LLC
serves as restructuring crisis manager.
As of Oct. 31, 2011, the Debtors disclosed total assets of
$80.4 million and total liabilities including $40.3 million owing
on a first-lien debt, $51 million in subordinated notes, and
$17.9 million is owing to trade suppliers. The petitions were
signed by Andrew Orr, chief financial officer & VP corporate
operations.
Herrick, Feinstein LLP represents the Official Committee of
Unsecured Creditors. The Committee tapped Ashby & Geddes, P.A. as
Delaware Counsel and J.H. Cohn LLP as its financial advisor.
AMERCO: S&P Withdraws 'BB+' Corporate Credit Rating
---------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'BB+' corporate
credit rating and other ratings on Reno, Nev.-based truck rental
and self-storage company AMERCO. The ratings were withdrawn at the
company's request.
AMERICAN AIRLINES: USAir Confirms Hiring Advisors for Merger Bid
----------------------------------------------------------------
The Wall Street Journal and Bloomberg News report that US Airways
Group Inc.'s Chief Executive Doug Parker confirmed in a telephone
conference call Wednesday that his Company is studying an
acquisition of AMR Corp. and that it has retained advisers to help
assess a possible bid. WSJ relates Mr. Parker said the Company
has retained investment bankers Barclays Capital and Millstein &
Co. and law firm Latham & Watkins LLP to explore the carrier's
options now that AMR is reorganizing in bankruptcy court.
WSJ's Susan Carey and Jack Nicas report that Mr. Parker said it
isn't imperative that US Airways strike a deal because its stand-
alone prospects are strong. WSJ also reports that Mr. Parker said
AMR will be in Chapter 11 "quite some time" and that "our advisers
will be studying the situation for quite some time."
"US Airways is on the prowl for good deals," Mr. Parker said
during the conference call, where US Airways unveiled fourth
quarter and 2011 results.
US Airways, the nation's No. 5 airline by traffic. It is the
product of a 2005 merger with America West Holdings Corp. As of
Dec. 31, 2011, US Airways had $2.31 billion in total cash and
investments, of which $365 million was restricted, up from $2.28
billion, of which $364 million was restricted on Dec. 31, 2010.
WSJ also reports that Delta Air Lines Inc., which has hired
bankers to assess a possible AMR bid, reported results as well on
Wednesday. Delta, the second largest U.S. carrier, is the product
of a 2008 merger with Northwest Airlines. AMR is No. 3.
According WSJ, Delta CEO Richard Anderson declined to answer
questions about a potential deal. "You can ask, but we're not
going to make any comments on the speculation," he said during a
conference call.
Private-equity firm TPG Capital is also considering a deal with
AMR.
WSJ reports AMR on Wednesday declined to comment on US Airways'
potential interest.
In 2006 US Airways made an $8.7 billion hostile takeover bid for
Delta when that carrier was in bankruptcy proceedings. But Delta's
management and creditors preferred for the airline to emerge from
court protection on its own. Two years later, Delta teamed up
with Northwest.
US Airways then had serious talks -- twice -- with UAL Corp., the
parent of United Airlines. Both times, United preferred
Continental Airlines Inc. Continental turned United down the first
time, but in 2010 the pair agreed to create United Continental
Holdings Inc., the nation's top airline.
According to WSJ, people familiar with the matter said US Airways
believes it would have no problem raising capital to fund a merger
and that a deal would provide more value for AMR creditors and
shareholders than if it remains independent.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, 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.
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.
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.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at
Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance
as proposed counsel to the Official Committee of Unsecured
Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011.
The Committee has selected Togut, Segal & Segal LLP as co-counsel
for conflicts and other matters; Moelis & Company LLC as its
investment banker, and Mesirow Financial Consulting, LLC as its
financial advisor.
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)
AMERICAN AIRLINES: S&P Affirms BB Rating on 2005-1G Certificates
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' rating on the
2005-1G pass-through certificates of AMR Corp. subsidiary American
Airlines Inc. (both rated 'D'). Standard & Poor's also affirmed
its 'B-' rating on American's 2005-1 Class B certificates and
removed both these ratings from CreditWatch, where they had
originally been placed on Nov. 17, 2011. ("We subsequently revised
the CreditWatch implications to developing on Nov. 29.," S&P said)
Standard & Poor's assesses the Class G and Class B certificates as
a form of enhanced equipment trust certificate. American chose to
affirm the debt that collateralizes the 2005-1 certificates.
The 2005-1 certificates are secured by spare engines for B757s,
B767s and MD-80 series planes, older technology aircraft than the
planes that American is now buying. "However, those older planes
still form a large portion of the airline's fleet, and
availability of spare engines is crucial to keeping them
in operation," said Standard & Poor's credit analyst Philip
Baggaley.
The 2001-1 pass-through certificates remain on CreditWatch with
developing implications. "Prospects for the 2001-1 pass-through
certificates, secured by older MD-83 planes, are much less certain
than for other rated pass-through certificates we rate," Mr.
Baggaley said. "However, we think American might affirm the debt
or at least renegotiate the leases to keep the planes for
awhile."
AMERICAN GREETINGS: Moody's Affirms 'Ba1' Corp. Family Rating
-------------------------------------------------------------
Moody's Investors Service rated American Greetings Corp's new
senior secured revolver Baa3. All other credit ratings, including
the Ba1 Corporate Family Rating, Ba1 Probability of Default rating
and Ba2 senior unsecured notes rating, were affirmed. The
speculative grade liquidity rating was downgraded to SGL -2 from
SGL -1. The Baa2 rating on the existing revolver was withdrawn.
The rating outlook remains stable.
Ratings assigned:
$400 million revolving credit facility expiring in January 2017 at
Baa3 (LGD 2, 21%);
Senior unsecure shelf rating at (P) Ba2;
Ratings affirmed/assessments revised:
Senior Unsecured Notes Due 2021 at Ba2 (LGD 5, 75% from 72%);
Corporate Family Rating at Ba1;
Probability-of-Default Rating at Ba1:
Rating downgraded:
Speculative Grade Liquidity Rating to SGL-2 from SGL-1
For additional information, please refer to Moody's Credit Opinion
of American Greetings published on Moodys.com.
RATINGS RATIONALE.
"We think revenue will modestly improve or at least stay flat in
fiscal 2013," said Kevin Cassidy, Senior Credit Officer at Moody's
Investors Service. "While fiscal 2013 EBITDA and operating margins
may modestly decline from fiscal 2012 levels, they are both still
in line with a Ba1 rating," he added.
The new $400 million revolver replaces the $350 million revolver.
The new revolver expires in January 2017. The only expected
drawings under the revolver will be to fund the new corporate
head-quarters in fiscal 2013 and 2014. The new revolver is rated
one notch below the existing revolver rating because of the higher
proportion of secured debt in the revised capital structure.
The downgrade of the speculative grade liquidity rating to SGL-2
from SGL-1 reflects weaker than expected free cash flow driven by
a moderation in operating performance and the expected use of cash
and revolver borrowings over the next 12 to 15 months to fund the
new corporate headquarters (the corporate head-quarter project is
expected to last up to 30 months).
American Greetings Ba1 Corporate Family Rating reflects the
business risks inherent in the greeting card industry, which is
characterized by low or in some cases declining growth rates, its
modest size with revenue around $1.7 billion, weak consumer
branding and heavy competition. Furthermore, the company reported
declining EBITDA in the LTM period driven by higher S,G&A
spending. The rating also considers the possibility of American
Greetings being modestly more aggressive with shareholder returns
after a couple of years of modest activity. The ratings are
supported by the company's position in the U.S. greeting card
industry as one of the two leading companies, its long operating
history, predictable demand for its products, and important
relationships with retail customers. A key element to American
Greetings' rating is its efficient cost structure, its recent
strategic acquisitions and the disposition of its retail
operations. This has resulted in solid financial leverage with
debt/EBITDA around 2 times and retained cash flow/net debt of
approximately 40%. However, free cash flow was weak in the LTM
period driven by higher capital and S,G&A spending. Moody's
believes strong credit metrics are necessary to balance the mature
nature of American Greetings' business. Moody's expects credit
metrics to weaken in 2013 and 2014 (debt/EBITDA around 2.5 times
expected) as the company builds a new corporate headquarter
costing between $150 million and $200 million and finances more
than half of the purchase with debt. The remainder will be paid
for with cash.
The stable outlook reflects Moody's belief that American Greetings
operating performance will likely remain at or close to current
levels in the near to mid-term. An increase in debt and decrease
in free cash flow to partially fund the new corporate headquarter
building is reflected in the outlook.
An upgrade is not likely in the near term because of Moody's
expectation of negative free cash flow in both fiscal 2013 and
2014 (driven in part by signifciant capital expenditures related
to its new headquarters) and the possibility that more shareholder
friendly financial policies could be implemented.. The rating
could be upgraded over the longer term if revenue increases on a
sustained basis, credit metrics improve from current levels and
the company demonstrates a commitment to conservative financial
policies.. Specifically, debt/EBITDA would need to be sustained
below 1.5 times and retained cash flow/net debt above 35%.
The rating could be downgraded if the operating performance
weakens considerably or the company increases leverage to fund
shareholder returns or acquisitions such that debt to EBITDA
approaches 3 times on a sustained basis or EBITA/interest
approached 3 times on a sustained basis. The rating could also be
lowered if the company fails to maintain its recent revenue growth
for a sustained period or Moody's comes to expect that free cash
flow generation remains weak over a prolonged time frame.
The principal methodology used in rating American Greetings was
Moody's Global Packaged Goods Industry methodology published in
July 2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
With principal executive offices in Cleveland, Ohio, American
Greetings Corporation is a leading developer, manufacturer and
distributor of greeting cards and social expression products.
Sales were approximately $1.7 billion for the twelve months ended
November 25, 2011.
AMERICAN SCIENTIFIC: Paul Cohen Named to Board of Directors
-----------------------------------------------------------
The board of directors of American Scientific Resources, Inc.,
appointed Mr. Paul Cohen to serve as a member of the Board until
the next annual stockholders' meeting.
Paul Cohen is currently a member of the Board. Mr. Cohen has 42
years of broad based international expertise in manufacturing,
sourcing, product development, marketing, operations, production
and distribution. From 2000 to 2011, Mr. Cohen was the senior
vice president at China Ting Fashion Group (USA) LLC, a highly
respected, major Asian manufacturing facility which is a publicly
traded company on the Hong Kong stock exchange. At ChinaTing USA,
Mr. Cohen designed and opened the USA headquarters for the
company, hired all personnel and created marketing strategies to
build a multi-million dollar business. Prior to joining ChinaTing
USA, from 1998 to 2000, Mr. Cohen served as Senior Vice President,
Business Development at Finity Apparel Group, Inc., a leading
brand name manufacturer of better ladies sportswear. At Finity
Apparel, Mr. Cohen was responsible for:
(i) developing and marketing licensed brands such as Club Med,
American Classics, Faberge Apparel and Survivor;
(ii) marketing direct manufacturing capabilities; and
(iii) developing and managing relationships with major industry
retail contacts.
Mr. Cohen earned a certificate in textile design and merchandising
from the Fashion Institute of Technology in New York City. The
Company believes that Mr. Cohen's experience in East Asian
manufacturing, his marketing expertise and network of contacts
will help the Company develop its business strategies and thus he
will be a valuable addition to the Board.
There is no family relationship between Mr. Cohen and any of the
Company's directors or officers.
About American Scientific
Weston, Fla.-bases American Scientific Resources, Inc., provides
healthcare and medical products. The Company develops,
manufactures and distributes healthcare and medical products
primarily to retail drug chains, retail stores specializing in
sales of products for babies and medical supply dealers. The
Company does sub-component assembly and packaging for the
Disintegrator product line. All of the Company's other products
are manufactured by third parties. The Company was comprised of
three subsidiaries: (i) Kidz-Med, Inc., (ii) HeartSmart, Inc., and
(iii) Ulster Scientific, Inc., of which only Kidz-Med was active
until Dec. 31, 2010. All subsidiaries are currently inactive.
The Company reported a net loss applicable to common shareholders
of $6.92 million on $763,020 of net product sales for the nine
months ended Sept. 30, 2011, compared with a net loss applicable
to common shareholders of $4.78 million on $578,961 of net product
sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$1.26 million in total assets, $9.21 million in total liabilities,
and a $7.95 million total shareholders' deficit.
Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey,
expressed substantial doubt about American Scientific Resources'
ability to continue as a going concern, following the Company's
2010 results. The independent auditors noted that the Company has
suffered recurring losses, its current liabilities exceed its
current assets and it is in default with certain of its
obligations.
ATLANTIC & PACIFIC: Feb. 6 and 7 Hearing Slated for Plan
--------------------------------------------------------
The Hon. Robert D. Drain the U.S. Bankruptcy Court for the
Southern District of New York will convene a hearing on Feb. 6,
2012, at 10:00 a.m., prevailing Eastern Time, and Feb. 7, at
10:00 a.m. to consider the confirmation of The Great Atlantic &
Pacific Tea Company, Inc., et al.'s Plan of Reorganization.
The voting deadline and objections were due Jan. 24.
As reported in the Troubled Company Reporter on Dec. 23, 2011, the
plan was made possible by $490 million in debt and equity
financing to be provided by Yucaipa Cos., Goldman Sachs Group Inc.
and Mount Kellett Capital Management LP.
The TCR also reported that the revised disclosure statement tells
unsecured creditors they can expect to recover to 2.1% to 2.7%.
Dow Jones' Daily Bankruptcy Review reports that a multi-employer
pension fund that represents Super Fresh Food Markets Inc. workers
is objecting to Great Atlantic & Pacific Tea Co.'s Chapter 11 exit
plan, saying its $76.8 million claim is entitled to better
treatment under the plan.
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a supermarket retailer, operating under a variety of
well-known trade names, or "banners" across the mid-Atlantic and
Northeastern United States. Before filing for bankruptcy in 2010,
A&P operated 429 stores in 8 states and the District of Columbia
under the following trade names: A&P, Waldbaum's, Pathmark,
Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super
Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees
prior to the bankruptcy filing.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York.
In its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
A&P obtained court approval for a new contract with C&S Wholesale
Grocers Inc., its principal supplier. The contract is designed to
save A&P $50 million a year when the supermarket operator emerges
from Chapter 11 reorganization.
A&P sold 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.
ATLANTIC & PACIFIC: Court OKs $750M Exit Financing Package
----------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that the Great Atlantic &
Pacific Tea Co. is another step forward on the path out of
bankruptcy, after a New York bankruptcy judge on Tuesday approved
a $750 million exit financing package provided by JPMorgan Chase &
Co. and others.
U.S. Bankruptcy Judge Robert D. Drain approved the package, which
consists of a $400 million senior secured asset-based revolving
credit facility and a $350 million senior secured term loan, as
part of the A&P supermarket owner's bankruptcy plan, Law360
relates.
About Great Atlantic & Pacific
Founded in 1859, Montvale, New Jersey-based Great Atlantic &
Pacific is a supermarket retailer, operating under a variety of
well-known trade names, or "banners" across the mid-Atlantic and
Northeastern United States. Before filing for bankruptcy in 2010,
A&P operated 429 stores in 8 states and the District of Columbia
under the following trade names: A&P, Waldbaum's, Pathmark,
Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super
Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees
prior to the bankruptcy filing.
A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York.
In its petition, A&P reported total assets of $2.5 billion and
liabilities of $3.2 billion as of Sept. 11, 2010.
Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C.
Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J.
Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
serve as counsel to the Debtors. Kurtzman Carson Consultants LLC
is the claims and notice agent. Lazard Freres & Co. LLC is the
financial advisor. Huron Consulting Group is the management
consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and
Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represent the Official Committee of Unsecured Creditors.
A&P obtained court approval for a new contract with C&S Wholesale
Grocers Inc., its principal supplier. The contract is designed to
save A&P $50 million a year when the supermarket operator emerges
from Chapter 11 reorganization.
A&P sold 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.
On Nov. 14, 2011, the Company filed with the Bankruptcy Court the
a proposed Chapter 11 plan. On Nov. 30, 2011, the Company filed
revised versions of the Plan and related Disclosure Statement.
On Dec. 20, 2011, the Bankruptcy Court approved the adequacy of
information in the Disclosure Statement. The deadline for voting
on the Plan is Jan. 24, 2012. A hearing before the Bankruptcy
Court on the confirmation of the Plan is scheduled for Feb. 6,
2012.
BAKERS FOOTWEAR: Wells Fargo Discloses 7.5% Equity Stake
--------------------------------------------------------
In an amended Schedule 13G filing with the Securities and Exchange
Commission, Wells Fargo & Company and its affiliates disclosed
that, as of Dec. 31, 2011, it beneficially owns 702,012 shares of
common stock of Bakers Footwear Group Inc. representing 7.55% of
the shares outstanding. As previously reported by the TCR on
Jan. 25, 2011, Wells Fargo disclosed beneficial ownership of
678,029 shares. A full-text copy of the amended Schedule 13G is
available for free at http://is.gd/2poH4d
About Bakers Footwear
St. Louis, Mo.-based Bakers Footwear Group, Inc. (OTC BB: BKRS.OB)
is a national, mall-based, specialty retailer of distinctive
footwear and accessories for young women. The Company's
merchandise includes private label and national brand dress,
casual and sport shoes, boots, sandals and accessories. The
Company currently operates 231 stores nationwide. Bakers' stores
focus on women between the ages of 16 and 35. Wild Pair stores
offer fashion-forward footwear to both women and men between the
ages of 17 and 29.
The Company reported a net loss of $9.29 million on
$185.62 million of net sales for the fiscal year ended Jan. 29,
2011, compared with a net loss of $9.08 million on $185.36 million
of net sales for the year ended Jan. 30, 2010.
The Company reported a net loss of $14.33 million on
$131.51 million of net sales for the 39 weeks ended Oct. 29, 2011,
compared with a net loss of $14.46 million on $127.39 million of
net sales for the 13 weeks ended Oct. 30, 2010.
The Company's balance sheet at Oct. 29, 2011, showed
$47.12 million in total assets, $67.16 million in total
liabilities and a $20.04 million total shareholders' deficit.
As reported by the TCR on May 6, 2011, Ernst & Young LLP, in St.
Louis, Mo., expressed substantial doubt about Bakers Footwear's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred substantial losses from
operations in recent years and has a significant working capital
deficiency.
Bankruptcy Warning
The Company noted in the Form 10-K that its ability to maintain
and ultimately improve its liquidity position is highly dependent
on sustaining the positive sales trends that began in June 2008
and have continued through April 2011. Comparable store sales for
the last three quarters of fiscal year 2008 increased 4.7% and its
comparable store sales for fiscal years 2009 and 2010 increased
1.3% and 1.7%, respectively. Through the first 12 weeks of fiscal
year 2011 comparable stores sales increased 10.1%.
The Company noted that net losses in recent years have negatively
impacted its liquidity and financial position. As of Jan. 29,
2011, it had negative working capital of $8.7 million, unused
borrowing capacity under our revolving credit facility of $3.1
million, and a shareholders' deficit of $6.0 million.
The Company stated, "If positive sales trends do not continue, or
if we were to incur significant unplanned cash outlays, it would
become necessary for us to obtain additional sources of liquidity,
or take additional cost cutting measures. Any future financing
would be subject to our financial results, market conditions and
the consent of our lenders. We may not be able to obtain
additional financing or we may only be able to obtain such
financing on terms that are substantially dilutive to our current
shareholders and that may further restrict our business
activities. If we cannot obtain needed financing, our operations
may be materially negatively impacted and we may be forced into
bankruptcy or to cease operations and you could lose your
investment in the Company."
BERNARD L. MADOFF: Mets to Ask Judge to Decide on Trustee's Claims
------------------------------------------------------------------
American Bankruptcy Institute reports that the owners of the
New York Mets baseball team will ask a judge to decide remaining
claims of $386 million in a suit from Irving Picard, the trustee
for Bernard Madoff's defunct firm.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of July 15, 2011, a total of US$6.88 billion in claims by
investors has been allowed, with US$794.9 million to be paid by
the Securities Investor Protection Corp. Investors are expected
to receive additional distributions from money recovered by Mr.
Picard from lawsuits or settlements.
Mr. Picard has filed 1,000 lawsuits seeking $100 billion from
banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The
trustee has seen more than $28 billion of his claims tossed by
district judges.
BLUE COAT: Moody's Assigns 'B2' Corporate Family Rating
-------------------------------------------------------
Moody's Investors Service assigned to Blue Coat Systems, Inc. a
first-time B2 Corporate Family (CFR) and Probability of Default
Rating (PDR), a B1 rating to the proposed $360 million senior
secured first-lien term loan and $50 million senior secured
revolver, and Caa1 rating to the proposed $85 million senior
secured second-lien term loan.
RATING RATIONALE
Blue Coat's B2 Corporate Family Rating (CFR) reflects the
company's high pro forma financial leverage, as Moody's calculates
adjusted total debt to EBITDA, of around 6.5x at closing.
Nonetheless, the rating is supported by Moody's expectation that
Blue Coat's cash flows will be solid and fairly knowable owing to
its contractual maintenance and support services model with high
renewal rates of about 90% and a fairly diverse, blue chip and
loyal customer base. Notwithstanding the company's product-line
concentration, Blue Coat's clients are heavily reliant on its
"mission-critical" web-filtering software and appliances that help
protect their Internet-connected PCs and mobile devices from web-
based security threats. Moody's expectation for consistent cash
flow is based on Blue Coat's leading market position in the Anti-
Virus/Web/Malware appliance segment, track record of profitable
growth as a public company, and its relatively stable customer
base which generates high recurring revenue.
The rating also considers Blue Coat's modest size and free cash
flow generation following the increased debt burden. Further, it
reflects Moody's expectation for slowing revenue growth (relative
to historical levels) in low-to-mid single digits. This will
likely keep financial leverage in the range of 4x to 5x adjusted
total debt to EBITDA (with mid-single digit free cash flow to debt
ratios) over the intermediate term. These credit metrics are
comparable to other software issuers currently rated at the B2
rating level. The CFR also reflects Moody's expectation that the
new equity owner will refrain from extracting dividends and apply
excess cash flow towards debt reduction and building balance sheet
cash.
Blue Coat maintains adequate liquidity as evidenced by its cash
flow from operations (projected annual free cash flow of around
$25 million), about $40 million of cash at closing and available
external liquidity consisting of a $50 million revolver, which
will be drawn by $35 million at closing. Blue Coat has a track
record of generating positive free cash flow and enjoys
predictable revenue due to its contractual maintenance and support
services model with high renewal rates. Over the next twelve
months, Moody's expects that the company will comfortably meet
cash needs from cash flow generation and cash-on-hand.
The stable rating outlook reflects the good predictability of Blue
Coat's contractual maintenance and support services business
model, high renewal rates as well as Moody's expectation that the
company will retain its incumbent market leadership in "mission-
critical" network security software and appliances. Moody's
believes enterprises' increasing demand for web filtering,
security and malware detection solutions support continued organic
revenue growth in the low-to-mid single digit range.
Upward rating pressure could occur if the company were to
demonstrate organic revenue growth consistent with historical
double digit rates, free cash flow to debt of at least 15% and the
likelihood of adjusted debt to EBITDA being sustained below 4.5x.
Ratings could be downgraded if financial leverage increases above
7x adjusted debt to EBITDA for a sustained period or liquidity
deteriorates due to a decline in profitability or aggressive
financial policies.
Net proceeds from the $495 million senior secured (first- and
second-lien) credit facilities together with $402.5 million of
Blue Coast's cash and $520.5 million of cash equity from the
private equity sponsor (Thoma Bravo) will be used to purchase Blue
Coat in a $1.3 billion public-to-private leveraged buyout
transaction.
Assignments:
Corporate Family Rating -- B2
Probability of Default Rating -- B2
$ 50 Million Senior Secured Revolver due 2017 -- B1 (LGD-3, 38%)
$360 Million Senior Secured First Lien Term Loan due 2018 -- B1
(LGD-3, 38%)
$ 85 Million Senior Secured Second Lien Term Loan due 2018 -- Caa1
(LGD-5, 89%)
The assigned ratings are subject to review of final documentation
and no material change in the terms and conditions of the
transaction as advised to Moody's.
The principal methodology used in rating Blue Coat was the Global
Software Industry Methodology published in May 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
With headquarters in Sunnyvale, CA and revenue of $467 million for
the latest twelve months ended October 31, 2011, Blue Coat, is a
leading provider of Internet security and wide area network (WAN)
acceleration solutions that permit enterprises to secure and
optimize their IT networks.
BLUE EARTH: Posts $1.7 Million Net Loss in Third Quarter
--------------------------------------------------------
Blue Earth, Inc., filed its quarterly report on Form 10-Q/A,
reporting a net loss of $1.7 million on $1.1 million of revenues
for the three months ended Sept. 30, 2011, compared with a net
loss of $709,239 on $0 revenue for the same period of 2010.
For the nine months ended Sept. 30, 2011, the Company has reported
a net loss of $3.0 million on $3.2 million of revenues, compared
with a net loss of $2.0 million on $0 revenue for the same period
a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$18.4 million in total assets, $6.2 million in total liabilities,
and stockholders' equity of $12.2 million.
At Sept. 30, 2011, the Company had a working capital deficit of
$2.2 million compared with working capital of $2.6 million at
Dec. 31, 2010. At Sept. 30, 2011, the Company had an accumulated
deficit of $12.8 million.
"Our consolidated financial statements were prepared assuming that
we would continue as a going concern irrespective of our recurring
losses, accumulated deficits and negative cash flows from
operations," the Company said in the filing. "Our ability to
continue as a going concern is subject to our ability to generate
profits and/or obtain necessary funding from outside sources,
including by the sale of our securities, or obtaining loans from
lenders, where possible. Our continued net operating losses
increase the difficulty of our meeting these goals, and our
efforts to continue as a going concern may not prove successful.
Nonetheless, the Company expects that it has sufficient cash and
borrowing capacity to meet its working capital needs for at least
the next 12 months."
A copy of the Form 10-Q/A is available for free at:
http://is.gd/NUVr72
Henderson, Nevada-based Blue Earth, Inc. is engaged in the clean
tech industry in general with a focus on the rapidly growing,
multi-billion dollar energy efficiency sector.
BOOMERANG SYSTEMS: Joseph Bellantoni Resigns as CFO
---------------------------------------------------
Joseph R. Bellantoni resigned as chief financial officer of
Boomerang Systems, Inc. Mr. Bellantoni will remain as a director
on the Company's board of directors.
On Jan. 18, 2012, Scott Shepherd was appointed as the Company's
Chief Financial Officer. He previously served as the Company's
controller from February 2011 until January 2012. Mr. Shepherd
served as corporate controller for heavy equipment manufacturer
and distributor, Komatsu Equipment Company, from July 2009 to
February 2011. From May 2008 to July 2009, he served as Chief
Financial Officer for The Levitin Group, an online, interactive
computer based training company. He worked for Eskay Corporation,
a global automated material handling company from 1995 to 2008 and
served as its Chief Financial Officer from 2000 until May 2008.
Mr. Shepherd has an annual base salary of $110,000.
On Jan. 18, 2012, Paul J. Donahue resigned from the Company's
Board of Directors. Mr. Donahue served as a member of the
Compensation Committee, Nominating Committee and Audit Committee.
His resignation was not the result of any disagreement with the
Company.
About Boomerang Systems
Headquartered in Morristown, New Jersey, Boomerang Systems, Inc.
(Pink Sheets: BMER) through its wholly owned subsidiary, Boomerang
Utah, is engaged in the design, development, and marketing of
automated racking and retrieval systems for automobile parking and
automated racking and retrieval of containerized self-storage
units.
The Company reported a net loss of $19.10 million on $1.59 million
of total revenues for the year ended Sept. 30, 2011, compared with
a net loss of $15.78 million on $718,530 of total revenues during
the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$4.27 million in total assets, $8.32 million in total liabilities,
and a $4.05 million total stockholders' deficit.
Bankruptcy Warning
The Company said its operations may not generate sufficient cash
to enable it to service its debt. If the Company were to fail to
make any required payment under the notes and agreements governing
its indebtedness or fail to comply with the covenants contained in
the notes and agreements, the Company would be in default. The
Company's debt holders would have the ability to require that the
Company immediately pay all outstanding indebtedness. If the debt
holders were to require immediate payment, the Company might not
have sufficient assets to satisfy its obligations under the notes
or the Company's other indebtedness. In such event, the Company
could be forced to seek protection under bankruptcy laws, which
could have a material adverse effect on its existing contracts and
its ability to procure new contracts as well as its ability to
recruit or retain employees. Accordingly, a default could have a
significant adverse effect on the market value and marketability
of the Company's common stock.
CANAL CAPITAL: Incurs $708,503 Net Loss in Fiscal 2011
------------------------------------------------------
Canal Capital Corporation filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K, reporting a
net loss of $708,503 on $269,826 of real estate revenues for the
year ended Oct. 31, 2011, compared with net income of $10,505 on
$2.28 million of real estate revenues during the prior year.
The Company's balance sheet as of Oct. 31, 2011, showed $2.41
million in total assets, $2.76 million in total liabilities and
$351,126 in stockholders' deficit.
While the Company is currently operating as a going concern,
certain significant factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company has
suffered recurring losses from operations and is obligated to
continue making substantial annual contributions to its defined
benefit pension plan. Additionally, the accompanying financial
statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the
amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
A full-text copy of the Form 10-K is available at:
http://is.gd/VVFqJv
About Canal Capital
Port Jefferson Station, N.Y.-based Canal Capital Corporation is
engaged in two distinct businesses -- real estate and stockyard
operations.
Canal's real estate properties are located in Sioux City, Iowa,
South St Paul, Minnesota, St Joseph, Missouri, Omaha, Nebraska and
Sioux Falls, South Dakota. The properties consist, for the most
part, of an Exchange Building (commercial office space), land and
structures leased to third parties (rail car repair shops, lumber
yards and various other commercial and retail businesses) as well
as vacant land available for development or resale.
Canal currently operates one central public stockyard located in
St. Joseph, Missouri. Canal closed the stockyard it operated in
Sioux Falls, South Dakota in December 2009.
Canal's stock is no longer listed over-the-counter on the "pink
sheets". The stock was delisted by the SEC as a result of Canal's
filing its fiscal 2009 Form 10-K without benefit of an independent
audit.
CAPMARK FINANCIAL: Sued Ex-CEO Over Stock Redemption Payments
-------------------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that Capmark
Financial Group Inc. on Monday launched an adversary suit against
its former President and CEO William F. Aldinger III and related
trusts, seeking recovery of approximately $16.7 million in stock
redemption payments it made to him following his resignation.
In its suit, filed in Delaware bankruptcy court, the mortgage
lender said it was insolvent at the time an agreement outlining
the payments was signed and the payments were made in December
2008, and claims the debt it incurred should be avoided and the
amounts it, Law360 relates.
About Capmark Financial
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- provided financial services to
investors in commercial real estate-related assets. Capmark has
three core businesses: lending and mortgage banking, investments
and funds management, and servicing. Capmark operates in North
America, Europe and Asia. Capmark has 1,000 employees located in
37 offices worldwide.
On Oct. 25, 2009, Capmark Financial and certain of its
subsidiaries filed voluntary petitions for relief under Chapter 11
(Bankr. D. Del. Lead Case No. 09-13684). Capmark disclosed assets
of US$20 billion against total debts of US$21 billion as of
June 30, 2009.
Capmark's financial advisors were Lazard Freres & Co. LLC and
Loughlin Meghji + Company. Capmark's bankruptcy counsel were
Dewey & LeBoeuf LLP, and Richards, Layton & Finger, P.A. Beekman
Advisors, Inc., is serving as strategic advisor.
KPMG LLP served as tax and accounting advisor. Epiq Bankruptcy
Solutions, LLC, served as claims and notice agent.
The Official Committee of Unsecured Creditors tapped Kramer Levin
Naftalis & Frankel LLP as its counsel and JR Myriad 1LLC as its
commercial real estate business advisors. The Committee also
retained Cutler Pickering Hale and Dorr LLP as its attorneys for
the special purpose of providing legal services in connection with
Federal Deposit Insurance Corporation matters.
Protech Holdings C LLC, an affiliate of Capmark, filed for
Chapter 11 protection on July 29, 2010 (Bankr. D. Del. Case No.
10-12387). Protech estimated assets and debts in excess of
$1 billion as of the filing date.
Since filing for Chapter 11, Capmark completed three sales to
generate more than $1 billion in cash. Berkshire Hathaway Inc.
and Leucadia National Corp. bought most of the business for
$468 million. In April 2011, Greenline Ventures LLC completed the
acquisition of the New Markets Tax Credit division of Capmark
Financial Group Inc. Since inception of the NMTC program,
Capmark's NMTC division has closed over $1.1 billion of NMTC
investment funds and financed over $2.5 billion of projects and
businesses in low income communities nationwide.
Capmark won confirmation of its reorganization plan in August 2011
allowing it to distribute about $4 billion of stock, cash and new
debt to unsecured creditors and streamline operations around its
flagship bank. Unsecured creditors were to receive $900 million
in cash, $1.25 billion in secured notes and 100 million shares in
reorganized Capmark, now a bank holding company. The plan was
declared effective in October.
Also in October 2011, Capmark closed the sale of its low-income
housing tax credit asset portfolio to Hunt Cos. Inc., a national
real estate services company. El Paso, Texas-based Hunt was the
successful bidder in the auction of the assets, paying
$102.4 million.
CAPMARK FINANCIAL: Reaches $4MM Deal with Feds to End FCA Suit
--------------------------------------------------------------
Christopher Norton at Bankruptcy Law360 reports that reorganized
Capmark Finance LLC on Monday asked a Delaware bankruptcy judge to
approve a $3.9 million settlement resolving the federal
government's allegations that Capmark knowingly submitted a false
mortgagor's certification to the U.S. Department of Housing and
Urban Development.
The U.S. sued Capmark in June 2009, claiming Capmark's
certification falsely said the mortgagor had no unpaid obligations
in order to secure federal mortgage insurance benefits. The suit
seeks treble damages amounting to roughly $75 million.
About Capmark Financial
Based in Horsham, Pennsylvania, Capmark Financial Group Inc. --
http://www.capmark.com/-- provided financial services to
investors in commercial real estate-related assets. Capmark has
three core businesses: lending and mortgage banking, investments
and funds management, and servicing. Capmark operates in North
America, Europe and Asia. Capmark has 1,000 employees located in
37 offices worldwide.
On Oct. 25, 2009, Capmark Financial and certain of its
subsidiaries filed voluntary petitions for relief under Chapter 11
(Bankr. D. Del. Lead Case No. 09-13684). Capmark disclosed assets
of US$20 billion against total debts of US$21 billion as of
June 30, 2009.
Capmark's financial advisors were Lazard Freres & Co. LLC and
Loughlin Meghji + Company. Capmark's bankruptcy counsel were
Dewey & LeBoeuf LLP, and Richards, Layton & Finger, P.A. Beekman
Advisors, Inc., is serving as strategic advisor.
KPMG LLP served as tax and accounting advisor. Epiq Bankruptcy
Solutions, LLC, served as claims and notice agent.
The Official Committee of Unsecured Creditors tapped Kramer Levin
Naftalis & Frankel LLP as its counsel and JR Myriad 1LLC as its
commercial real estate business advisors. The Committee also
retained Cutler Pickering Hale and Dorr LLP as its attorneys for
the special purpose of providing legal services in connection with
Federal Deposit Insurance Corporation matters.
Protech Holdings C LLC, an affiliate of Capmark, filed for
Chapter 11 protection on July 29, 2010 (Bankr. D. Del. Case No.
10-12387). Protech estimated assets and debts in excess of
$1 billion as of the filing date.
Since filing for Chapter 11, Capmark completed three sales to
generate more than $1 billion in cash. Berkshire Hathaway Inc.
and Leucadia National Corp. bought most of the business for
$468 million. In April 2011, Greenline Ventures LLC completed the
acquisition of the New Markets Tax Credit division of Capmark
Financial Group Inc. Since inception of the NMTC program,
Capmark's NMTC division has closed over $1.1 billion of NMTC
investment funds and financed over $2.5 billion of projects and
businesses in low income communities nationwide.
Capmark won confirmation of its reorganization plan in August 2011
allowing it to distribute about $4 billion of stock, cash and new
debt to unsecured creditors and streamline operations around its
flagship bank. Unsecured creditors were to receive $900 million
in cash, $1.25 billion in secured notes and 100 million shares in
reorganized Capmark, now a bank holding company. The plan was
declared effective in October.
Also in October 2011, Capmark closed the sale of its low-income
housing tax credit asset portfolio to Hunt Cos. Inc., a national
real estate services company. El Paso, Texas-based Hunt was the
successful bidder in the auction of the assets, paying
$102.4 million.
CAVE LAKES: Hires Neil J. Beller Ltd as Counsel
-----------------------------------------------
Cave Lakes Canyon LLC asks permission from the U.S. Bankruptcy
Court for the District of Nevada to employ Neil J. Beller, Esq. of
Neil J. Beller, Ltd. as counsel.
The Debtor has paid the law offices of Neil J. Beller Ltd.
$10,000.
Neil J. Beller, Ltd. attests that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
Cave Lakes Canyon LLC filed for Chapter 11 bankruptcy (Bankr. D.
Nev. Case No. 12-10008) on Jan. 3, 2012, disclosing $18,010,913 in
assets and $3,984,861 liabilities. Judge Bruce A. Markell
presides over the case.
CDC CORP: Troutman Sanders Approved as Equity Committee Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized the Official Committee of Equity Security Holders in
the Chapter 11 case of CDC Corporation to retain Troutman Sanders
as its counsel.
As reported in the Troubled Company Reporter on Jan. 20, 2012, the
firm will:
(a) provide legal advice with respect to the Committee's rights
and duties under the Bankruptcy Code and the Bankruptcy
Rules;
(b) prepare on behalf of the Committee necessary motions,
applications, orders, reports, pleadings, and other legal
papers;
(c) appear before the Court and the United States Trustee to
represent and protect the interests of the Committee;
(d) represent the Committee and assist with and participate in
negotiations with the Debtor, creditors, and other parties-
in-interest in formulating a plan of reorganization,
drafting such a plan and related disclosure statement, and
taking necessary steps to confirm such a plan;
(e) represent the Committee and assist with and participate in
negotiation with the Debtor, creditors, and other parties-
in-interest for the sale or use of any of the Debtor's
assets, including the formulation of any necessary
documents required to execute any sale or use of the
Debtor's assets;
(f) represent the Committee and assist with and participate in
negotiations with potential financing sources for the
Debtor;
(g) represent the Committee in all adversary proceedings,
contested matters, and other matters involving the
administration of the Debtor's case in which the Committee
has interest; and
(h) perform other legal services that may be necessary for the
preservation of the Committee's rights and interests in the
Debtor's Chapter 11 case.
Troutman Sanders' billing rates for the partners and senior
counsel expected to render services in this representation range
from $325 to $750 per hour, for associates from $210 to $535 per
hour, and for para-professionals from $125 to $275 per hour.
The firm also will seek reimbursement for its expenses including,
messengers, courier mail, computer assisted legal research,
transportation and lodging.
To the best of the Committee's knowledge, Troutman Sanders is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About CDC Corp
Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS). CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing. The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.
CDC Corporation, doing business as Chinadotcom, filed a Chapter
11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011.
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA,
in Atlanta, Georgia, serves as counsel. Moelis & Company LLC
serves as its financial advisor and investment banker. Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer. The Debtor estimated assets and debts at $100 million
to $500 million as of the Chapter 11 filing.
The Official Committee of Equity Security Holders tapped Morgan
Joseph TriArtisan LLC as its financial advisor.
CENTRAL AMERICAN: Moody's Assigns (P)Ba2 Rating to Senior Notes
---------------------------------------------------------------
Moody's Investors Service assigned a provisional (P)Ba2 rating to
The Central American Bottling Corporation's (CABCORP) proposed
US$150 million senior unsecured fixed rate global notes. At the
same time, Moody's assigned a corporate family rating (CFR) of
(P)Ba2 to CABCORP. The outlook is stable.
The ratings were assigned on a provisional basis subject to the
successful placement of the proposed notes. The senior unsecured
ratings are at the same level as the CFR assuming that i) the
proposed notes will rank pari passu with all of the company's
other unsecured senior debt, ii) that pro-forma after the notes
issuance all debt outstanding at the holding company and its
subsidiaries is unsecured and that iii) the covenants contained
within the proposed notes indenture will mitigate potential
structural subordination.
Moody's has reviewed preliminary draft legal documentation for the
proposed notes and the assigned ratings assume that there will be
no material variation from the drafts reviewed and that all
agreements will be legally valid, binding and enforceable.
CABCORP is the 'Anchor Bottler' of PepsiCo for Central America
operating in Guatemala, El Salvador, Honduras and Nicaragua. In
2009 the company acquired PepsiAmericas (PAS) Caribbean
territories, extending its footprint into Puerto Rico, Jamaica and
Trinidad & Tobago. The company also exports some of its products
to the US, Mexico and other Latin American markets.
The company is based in Guatemala which is also its main market,
representing around 38% of total sales. The rest of its Central
American operations represent around 30% of total sales, with the
balance 32% coming from the Caribbean. Puerto Rico is the main
market in the Caribbean region with around 17% of total sales
generated there. CABCORP is a private entity controlled by the
Castillo family through an 82% stake holding; the remaining 18% is
owned by PepsiCo.
The assigned (P)Ba2 ratings are supported by the company's access
to PepsiCo's (PEP) extensive soft beverages portfolio, its solid
market position in its bottler territories, and the strong credit
metrics for the rating category. The ratings also reflect PEP's
relationship with the company through its18% ownership and a seat
in the board which strengthens CABCORP's corporate governance
practices despite being a family owned company. The rating is
constrained by the company's relatively small revenue size and
modest profitability when compared with its peers in the global
soft beverages industry, its presence in some riskier markets and
the ongoing event risk given the company's strategy to pursue M&A
on a regular basis.
The stable outlook reflects Moody's expectation that the company
will be able to execute its acquisition strategy without any major
operational issues while maintaining credit metrics that are in
line with the Ba rating category. Furthermore, the stable outlook
incorporates an expected modest improvement in operating margins
and continued free cash flow generation over the next couple of
years. The rating outlook also considers the fact that the company
will benefit from initiatives to improve its profitability in the
Puerto Rican market.
CABCORP has been able to maintain adequate credit metrics despite
economic downturns, adverse weather conditions and acquisitions.
Since 2009, the company has been able to maintain low leverage at
2.5x or below. For the last twelve months (LTM) ended September
30, 2011, Debt/EBITDA as adjusted by Moody's was 2.0x, which is
strong for a Ba2 rating. Moody's expects the company will be able
to maintain leverage below 3.0x despite the economic slowdown and
potential M&A activity.
Profitability is weak as compared with global soft beverages
peers. Prior to the acquisition of the Caribbean operation in
2009, CABCORP showed an average EBITA margin, as adjusted by
Moody's of around 8.8%. After the acquisition EBITA margin
declined, mainly due to market dynamics in Puerto Rico. As of
September 30, 2011 adjusted EBITA margin was 6.1%. In the Puerto
Rican market, the bulk of the distribution is done through the
large format supermarket channel which typically exhibits lower
margins than distribution of single-serve beverage products
through smaller, mom and pop outlets as is more common in most of
the company's other markets. Also affecting profitability in
Puerto Rico is ongoing price competition which has substantially
decreased average prices. Further, the island has a diminishing
population due to migration which affects sales volumes. The
company is currently implementing new efficiency and marketing
initiatives in Puerto Rico to improve profitability. However,
Moody's expects that it will take several years for CABCORP to
benefit from these initiatives.
The ongoing event risk is a factor constraining CACBORP's ratings.
Through the increase in Livesmart participation and the
acquisition of PAS Caribbean territories, the company remained
active during 2009 in terms of M&A activities. Going forward
Moody's expects acquisitions to continue given i) recent track
record and the strategy to continue expanding geographic footprint
through acquisitions and ii) the consolidation trend in the
industry with recent actions from major participants such as Coca-
Cola FEMSA, Arca-Contal and PepsiCo. Moody's considers that
although positive in terms of scale and diversification, the
company's business and credit profile could weaken should a major
transaction occur, especially if the company faces material
integration challenges and aggressive competition.
Current liquidity is strong with short term maturities of US$ 19
million as of September 30, 2011, which can be addressed by US$ 85
million in cash in hand and LTM free cash flow of US$2.1 million
for the same period. Pro-forma after the issuance, Moody's expects
liquidity to remain strong with maturities scheduled in 2012
amounting US$12 million and US$9 million in 2013. The next
material maturity the company will face will be US$40 million in
2015, which Moody's expects the company will timely refinance.
PRINCIPAL METHODOLOGY
The principal methodology used in rating CABCORP was the Global
Soft Beverage Industry Methodology published in December 2009.
CABCORP is headquartered in Guatemala City, Guatemala. For the 12
months ended September 30, 2011 (LTM), the company reported
revenues and EBITDA of about US$850 million and US$72 million,
respectively.
CHESTER DOWNS: Fitch Rates Proposed $315-Mil. Sr. Notes at 'BB-'
----------------------------------------------------------------
Fitch rates Chester Downs and Marina LLC's (Chester Downs)
proposed $315 million in senior secured notes due 2020 (notes)
'BB-/RR1'. Fitch also affirms Chester Downs' Issuer Default
Rating (IDR) at 'B-' and assigns a 'B-' IDR to Chester Downs
Finance Corp., a co-issuer in this transaction. The Rating
Outlook is Stable.
The proceeds from the notes will refinance approximately $230
million outstanding on Chester Downs' term loan, pay a dividend of
about $72 million to the members and pay the transactions costs.
The notes will be secured by Chester Downs' assets, which mainly
consist of a race track and the 100,000 square foot Harrah's
Chester casino, located 15 miles from downtown Philadelphia.
Chester Downs is 95% owned by Caesars Entertainment Corporation
(Caesars) through its primary operating subsidiary, Caesars
Entertainment Operating Co. (CEOC; 99.5% pro forma for the
minority holders' anticipated put). Fitch rates CEOC's IDR 'CCC',
which reflects, among some other concerns, the company's high
leverage and weak cash flow profile. There are no guarantees or
cross-default provisions between Chester Downs and CEOC.
Chester Downs' stand-alone credit profile is stronger than CEOC's,
characterized by more manageable leverage (around 4.5 times [x] on
a pro forma basis using EBITDA net of management fees) and decent
cash flow levels that are more indicative of at least a mid 'B'
IDR. Chester Downs' 'B-' IDR incorporates moderate linkage to the
weaker parent, which can, up to a point, extract cash from the
subsidiary. However, the ability to increase debt and pay
dividends are largely limited by the notes' covenants, which are
slightly more relaxed, albeit still adequate, compared to those in
the term loan that is being refinanced.
Restricted payments (RP) are mainly governed by an RP basket that
is based on cumulative EBITDA minus 1.55x interest expense (term
loan RP basket was built using 50% of net income). Further, to
pay dividends, fixed charge coverage must remain above 2x (2.25x
per the term loans' covenants) and leverage must be less than 3.0x
(2.5x for the term loans). The general RP carveout has been,
however, reduced to $10 million ($20 million if leverage is less
than 4x) from $25 million.
The fixed charge test continues to govern additional issuance but
is now lowered to 2.0x from 2.25x. There also remains a $50
million carveout for junior debt issuance. As with the term
loans, there are no financial maintenance covenants. Chester
Downs does not have a revolving credit facility, but there is a
$10 million minimum liquidity requirement.
The 'RR1' Recovery Rating (RR) reflects Fitch's expectation of the
recovery prospects for the notes in the 91%-100% range in an event
of default. The RR could be pressured if the expected $315 million
principal amount of notes is up-sized.
Philadelphia Market Under Competitive Pressure:
Chester Downs could come under material competitive pressure in
the near-to-medium term from the announced expansions at
SugarHouse and Parx casinos, which are the primary competitors in
the Philadelphia market. Parx is planning to open up 39,000
square feet of additional gaming space by mid-2012 along with
other amenities. SugerHouse plans to open its expansion by late
2013, which will more than double its gaming floor in terms of
square feet.
Longer term, one remaining category 2 license (permits up to 5,000
slots and 250 tables) remains outstanding in Pennsylvania after a
Mashantucket Pequot-led (Foxwoods) consortium lost the license in
2010. The group planned to construct its project in the
Philadelphia area but it is not clear where the license will get
approved now, if it gets reissued.
Other anticipated competitive pressures that may have a more
modest impact include the spring 2012 openings of Revel in
Atlantic City and gaming operations at the Valley Forge Convention
Center (18 miles away). More on the periphery, there is
considerable gaming expansion happening in New York (Aqueduct and
the governor's proposal to expand non-tribal gaming) and Maryland
(Maryland Live! and the Baltimore license).
Some of the competitive pressure will be offset by continued ramp
up in table games at Chester Downs, which commenced table game
operations in July 2010. Table game revenue grew 15% year-over-
year in the three month period ending Dec. 31, 2011 although
sequential growth in table revenues looks to be tapering off.
Chester Downs will get an additional benefit from tables in
September 2012, when the table tax rate is scheduled to go to 14%
from 16%.
The current ratings incorporate a moderate EBITDA decline stemming
from increased competition that is coming on line over the next
12-24 months.
CHESTER DOWNS: S&P Assigns Prelim. 'B+' Rating to $315MM Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
issue-level rating to Chester, Pa.-based Chester Downs and
Marina's proposed $315 million senior secured notes due 2020, co-
issued by Chester Downs Finance Corp. "In addition, we assigned
the notes a preliminary recovery rating of '1', indicating our
expectation of very high (90% to 100%) recovery for noteholders in
the event of a payment default. The company plans to use the
proceeds to repay its existing term loan debt and make a
distribution to its parent company, Harrah's Chester Downs
Investment Co., which is wholly owned subsidiary of Caesars
Entertainment Operating Co.," S&P said
"At the same time, we affirmed our 'B-' corporate credit rating on
Chester Downs. The rating outlook is stable," S&P related.
"The 'B-' corporate credit rating reflects the 'highly leveraged'
financial risk profile (based on our criteria) and very aggressive
financial policy of Chester Downs' indirect majority owner and
property manager, CEC," explained Standard & Poor's credit analyst
Melissa Long.
"Through its subsidiary, Caesars Entertainment Operating Company
(CEOC), CEC currently owns a 95% stake in Chester. Given CEC's
substantial majority controlling position, Standard & Poor's
Ratings Services views Chester's credit quality as linked to
CEC's. We believe a bankruptcy at CEC could result in a bankruptcy
at Chester, despite its relatively moderate financial burden,
because we believe CEC could decide to include Chester in a
broader bankruptcy proceeding. Management could accomplish this by
buying out the minority investors for a relatively insignificant
sum," S&P said.
"As a standalone entity, our assessment of Chester's financial
risk profile as 'aggressive' and our assessment of Chester's
business risk profile as 'weak' (based on our criteria) might
support a higher rating. However, it is unlikely our rating on
Chester would be higher than our rating on CEC," S&P said.
"Our assessment of Chester's financial risk profile as
'aggressive' reflects Chester's high debt balances, which, pro
forma for the proposed transaction, will consist solely of the
$315 million senior secured notes. Still, under our performance
expectations for the property and incorporating minimal capital
spending needs, we expect positive free operating cash flow
generation," S&P said.
"Our assessment of Chester's business risk profile as 'weak'
reflects its limited diversity as an operator of a single gaming
property and increased competitive pressure in the Philadelphia-
area gaming market in recent years. These factors are partially
offset by the inclusion of the property in Caesars' Total Rewards
player network, which offers some competitive advantage, and
strong market demographics," S&P said.
Chester is 15 miles from downtown Philadelphia, allowing the
facility to benefit from the strong demographics of the greater
Philadelphia market. The property performed well in recent periods
despite increased competition in the Philadelphia gaming market
following the opening of SugarHouse Casino in 2010. Performance
benefited from legislation in Pennsylvania that allowed table
games in casinos starting in mid 2010. Total gaming revenue at the
property increased 7% in 2011, despite a 9.5% decrease in slot
revenues. In the first nine months of 2011, Chester's margins
improved over 400 basis points, driving a mid-double-digit
increase in EBITDA. Chester benefitted from a lower tax rate on
table games and cost efficiencies.
CIMA LLC: Sec. 341(a) Creditors' Meeting Continued to Jan. 31
-------------------------------------------------------------
The U.S. Trustee for Region 21 will continue meeting of creditors
of CIMA, L.L.C. on Jan. 31, 2012, at 2:00 p.m. The meeting will
be held at Room, 182 St. Francis Street, in Mobile, Alabama.
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 CIMA LLC
Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer
and current owner of a 200-acre parcel of land located in Mobile,
Alabama, with frontage on Interstate 10, a major thoroughfare.
The parcel has been subdivided into parcels, and some
infrastructure work has been done. CIMA is finalizing plans with
one or more investor groups for further development of this
parcel.
CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No.
11-33279) on Aug. 22, 2011, disclosing $18,876,064 in assets and
$10,535,230 in liabilities as of the Chapter 11 filing.
Bankruptcy Judge Raymond B. Ray later approved a request by the
secured creditor to transfer the case to Alabama (Bankr. S.D. Ala.
11-04981). Chief Bankruptcy Judge Margaret A. Mahoney is
presiding. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A.,
represents the Debtor.
CIMA LLC: U.S. Trustee Unable to Form Committee
-----------------------------------------------
The United States Trustee said that an official committee under 11
U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of
CIMA, L.L.C. The U.S. Trustee reserves the right to appoint such
a committee should interest developed among the creditors.
Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer
and current owner of a 200-acre parcel of land located in Mobile,
Alabama, with frontage on Interstate 10, a major thoroughfare.
The parcel has been subdivided into parcels, and some
infrastructure work has been done. CIMA is finalizing plans with
one or more investor groups for further development of this
parcel.
CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No.
11-33279) on Aug. 22, 2011, disclosing $18,876,064 in assets and
$10,535,230 in liabilities as of the Chapter 11 filing.
Bankruptcy Judge Raymond B. Ray later approved a request by the
secured creditor to transfer the case to Alabama (Bankr. S.D. Ala.
11-04981). Chief Bankruptcy Judge Margaret A. Mahoney is
presiding. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A.
represents the Debtor.
CIMA LLC: Hires Ronald F. Suber as Local Counsel
------------------------------------------------
CIMA LLC asks the U.S. Bankruptcy Court for the District of
Alabama for permission to employ Ronald F. Suber, Attorney at Law,
as local counsel.
Mr. Suber's current hourly rate is $150 per hour, and, since he is
a sole practitioner, no other attorneys will work on this matter.
The firm received $7,500 as post-petition retainer. The retainer
was paid by Marion Uter, personally, who is the manager of the
Debtor.
Ronald F. Suber, Esq., attests that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer
and current owner of a 200-acre parcel of land located in Mobile,
Alabama, with frontage on Interstate 10, a major thoroughfare.
The parcel has been subdivided into parcels, and some
infrastructure work has been done. CIMA is finalizing plans with
one or more investor groups for further development of this
parcel.
CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No.
11-33279) on Aug. 22, 2011, disclosing $18,876,064 in assets and
$10,535,230 in liabilities as of the Chapter 11 filing.
Bankruptcy Judge Raymond B. Ray later approved a request by the
secured creditor to transfer the case to Alabama (Bankr. S.D. Ala.
11-04981). Chief Bankruptcy Judge Margaret A. Mahoney is
presiding. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A.
represents the Debtor.
CIT GROUP: Accused by Tyco of Dragging Feet on $190MM Tax Claim
---------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that Tyco International
Ltd. moved Friday to compel arbitration with reorganized business
lender CIT Group Inc., saying that although a judge ruled for Tyco
on a $190 million claim in a tax benefits dispute, CIT continues
to fight arbitration.
"The history of this dispute is replete with efforts by CIT to
avoid adjudication of the merits of Tyco's claim," the motion
said. "It is time for that adjudication to take place, in the
arbitral forum that the parties agreed should resolve such
disputes."
As reported in Troubled Company Reporter on Nov. 9, 2011, Richard
Vanderford at Bankruptcy Law360 reports that reorganized CIT Group
Inc. asked a New York bankruptcy judge to kill a lawsuit its
former parent, Tyco International Ltd., brought over a $794
million tax agreement, saying the suit seeks an unfair payday.
Tyco's lawsuit, filed in June, aims to recover cash linked to a
tax agreement it entered into with CIT immediately before it sold
its stake in the lender in a 2002 initial public offering,
according to Law360.
About CIT Group
Founded in 1908, CIT Group (NYSE: CIT) -- http://www.cit.com/
-- is a bank holding company with more than $34 billion in
financing and leasing assets. A member of the Fortune 500, it
provides financing and leasing capital to its more than one
million small business and middle market clients and their
customers across more than 30 industries.
CIT Group Inc. and affiliate CIT Group Funding Company of Delaware
LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-16565) on
Nov. 1, 2009, with a prepackaged Chapter 11 plan of
reorganization. Evercore Partners, Morgan Stanley and FTI
Consulting served as the Company's financial advisors and Skadden,
Arps, Slate, Meagher & Flom LLP served as legal counsel in
connection with the restructuring plan. Sullivan & Cromwell
served as legal advisor to CIT's Board of Directors.
The Court validated the vote of CIT's impaired classes of
creditors and confirmed the Plan on Dec. 8, 2009. The Plan
provided for the conversion to equity or reinstatement of seven
classes of debt issued primarily in the form of notes and
debentures; one class of unsecured notes was exchanged for new
debt. General unsecured creditors, including holders of claims
arising from the rejection of executory contracts, were paid in
full and deemed unimpaired. Holders of preferred and common
stock, as well as subordinated claims, received no recovery.
CIT emerged from bankruptcy protection on Dec. 11, 2009.
* * *
In May 2011, Moody's Investors Service upgraded CIT Group Inc.'s
Corporate Family Rating to 'B2' from 'B3'. The rating outlook is
stable. The upgrade reflects the progress CIT has made addressing
its most immediate organizational, operational, and financial
challenges subsequent to its bankruptcy reorganization in December
2009. Moody's, however, notes that CIT's weak margins and
uncertainty regarding the pace and adequacy of future margin
improvements are constraints on the firm's ratings.
As reported by the Troubled Company Reporter on Aug. 7, 2011,
Dominion Bond Rating Service affirmed CIT's ratings, including its
Issuer Rating of B (high), unchanged following the Company's
second quarter 2011 financial results.
CLEAR CHANNEL: William Eccleshare Named Chief Executive Officer
---------------------------------------------------------------
William C. Eccleshare, was named Chief Executive Officer for Clear
Channel Communications, Inc., overseeing both the Company's
International and Americas operations. Mr. Eccleshare also will
serve as Chief Executive Officer -- Outdoor of the Company's
indirect parent entities, CC Media Holdings, Inc., and CCU. Upon
Mr. Eccleshare's appointment as Chief Executive Officer of the
Company, the Company's interim "Office of the Chief Executive
Officer" ceased to exist, and Thomas W. Casey will continue in his
role as Executive Vice President and Chief Financial Officer of
the Company, CCMH and CCU and Robert H. Walls, Jr. will continue
in his role as Executive Vice President, General Counsel and
Secretary of the Company, CCMH and CCU.
In connection with Mr. Eccleshare's promotion, the Company and Mr.
Eccleshare have agreed to replace his Contract of Employment dated
Aug. 31, 2009, with a new employment agreement.
Mr. Eccleshare's New Employment Agreement will have an initial
term ending on Dec. 31, 2014, and thereafter will provide for
automatic 12-month extensions, beginning on Jan. 1, 2015, unless
either the Company or Mr. Eccleshare gives prior notice electing
not to extend the New Employment Agreement. In his new position,
Mr. Eccleshare will receive an annual base salary of $1,000,000.
The Company will reimburse Mr. Eccleshare for the reasonable costs
and expenses associated with filing his personal income tax
returns.
Ronald H. Cooper Termination
On Jan. 20, 2012, the Company and Ronald H. Cooper agreed that his
service as Chief Executive Officer -- Americas of the Company
would end no later than Feb. 29, 2012. Mr. Cooper's service as
Chief Executive Officer -- Clear Channel Outdoor -- Americas of
CCMH and CCU also will end at that time. In connection with his
separation from the Company, the Company and Mr. Cooper entered
into a Severance Agreement and General Release.
Clear Channel Outdoor Holdings, Inc., an indirect subsidiary of
Clear Channel Communications, Inc., issued a press release, which
included a statement that Clear Channel Outdoor Holdings, Inc.'s
revenues increased 7.4% and 2.9% for the full year 2011 and fourth
quarter 2011, respectively; excluding the impact of movements in
foreign exchange rates, Clear Channel Outdoor Holdings, Inc.'s
revenues rose 4.2% and 2.4% for the full year 2011 and fourth
quarter 2011, respectively. Clear Channel Outdoor Holdings, Inc.
and CC Media Holdings, Inc., the indirect parent entity of CCU and
Clear Channel Outdoor Holdings, Inc., will be reporting their full
financial results on Feb. 21, 2012.
A full-text copy of the Form 8-K disclosure is available at:
http://is.gd/696BFa
About CC Media and Clear Channel
San Antonio, Tex.-based CC Media Holdings, Inc. (OTC BB: CCMO)
-- http://www.ccmediaholdings.com/-- is the parent company of
Clear Channel Communications, Inc. CC Media Holdings is a global
media and entertainment company specializing in mobile and on-
demand entertainment and information services for local
communities and premier opportunities for advertisers. The
Company's businesses include radio and outdoor displays.
CC Media has three reportable business segments: Radio
Broadcasting; Americas Outdoor Advertising; and International
Outdoor Advertising. Approximately half of CC Media's revenue is
generated from its Radio Broadcasting segment.
The Company reported a net loss of $462.8 million on
$5.866 billion of revenue for the fiscal year ended Dec. 31, 2010,
compared with a net loss of $4.049 billion on $5.552 billion of
revenue for the fiscal year ended Dec. 31, 2009.
The Company also reported a net loss of $259.06 million on
$4.50 billion of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $416.42 million on $4.23 billion of
revenue for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $16.51
billion in total assets, $23.96 billion in total liabilities and a
$7.45 billion total member's deficit.
* * *
CC Media Holdings carries 'CCC+' issuer credit ratings from
Standard & Poor's. Clear Channel Carries a 'Caa2' corporate
family rating from Moody's Investors Service and an issuer default
rating of 'CCC' from Fitch Ratings.
Fitch said in November 2010, that its ratings concerns center on
the company's highly leveraged capital structure, with significant
maturities in 2014 and 2016; the considerable interest burden that
pressures free cash flow generation; technological threats and
secular pressures in radio broadcasting; and the company's
exposure to cyclical advertising revenue. The ratings are
supported by the company's leading position in both the outdoor
and radio industries, as well as the positive fundamentals and
digital opportunities in the outdoor advertising space.
In February 2011, Standard & Poor's affirmed it 'CCC+' corporate
credit rating and positive outlook on CC Media Holdings and
operating subsidiary Clear Channel, which S&P views on a
consolidated basis.
S&P said the 'CCC+' corporate credit rating on CC Media Holdings
Inc. reflects the risks surrounding the longer-term viability of
the company's capital structure--in particular, refinancing risk
relating to sizable secured debt maturities in 2014 ($3.2 billion
pro forma for the transaction) and 2016 ($10.4 billion). In S&P's
view, the company has a satisfactory business risk profile, due to
its position as the largest radio and global outdoor advertising
operator, its good geographic and market diversity, and moderate
long-term growth prospects at the outdoor business. S&P views the
financial risk profile as highly leveraged, given the company's
significant refinancing risk, roughly break-even EBITDA coverage
of interest expense, and slim discretionary cash flow.
CLEARWIRE CORP: To Report $362 Million Q4 2011 Revenue
------------------------------------------------------
Clearwire Corporation reported selected preliminary financial and
operating results for fourth quarter 2011.
* Record quarterly revenues of approximately $362 million are
estimated for fourth quarter 2011, representing a more than
doubling of revenues from the prior year's fourth quarter.
Retail revenues are estimated to be approximately
$198 million and wholesale revenues are estimated to be
approximately $164 million for the period, representing 1%
and 20% sequential growth, respectively, over third quarter
2011 retail and wholesale revenues.
* Fourth quarter 2011 net wholesale subscriber additions are
expected to total approximately 900,000, resulting in
approximately 9.1 million ending wholesale subscribers, or
11% growth over third quarter 2011 ending wholesale
subscribers. Combined with approximately 1.3 million retail
subscribers at the end of the year, the company expects total
subscribers at Dec. 31, 2011, to be approximately 10.4
million, representing approximately 140% year over year
growth. These results reflect 2.9% wholesale churn and 3.9%
retail churn in fourth quarter 2011.
* Fourth quarter 2011 aggregate usage by wholesale customers
increased approximately 22% compared to third quarter 2011,
driven primarily by growth in aggregate smartphone usage,
which increased approximately 30% over the same period. Total
4G network usage by wholesale and retail customers increased
165% during 2011.
* As a result of the growth of its subscriber base and
increased network traffic, in conjunction with reductions in
cash operating expenses, the Company estimates that fourth
quarter 2011 Adjusted EBITDA is positive and improved more
than 140% sequentially as compared to the Adjusted EBITDA
loss reported in third quarter 2011.
* The Company estimates that cash and cash equivalents and
investments at Dec. 31, 2011, were approximately $1.11
billion compared to $711 million at September 30, 2011.
Excluding net proceeds from the issuance of additional shares
of $716 million and payment of $237 million interest on debt
in December, the Company estimates that cash utilized during
fourth quarter 2011 was approximately $82 million.
The amounts are subject to the finalization of the Company's
fourth quarter and annual 2011 results. The company plans to
release full fourth quarter and annual 2011 financial results in
the coming weeks.
About Clearwire Corporation
Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR)
-- http://www.clearwire.com/-- through its operating
subsidiaries, is a leading provider of wireless broadband
services. Clearwire's 4G mobile broadband network serves 68
markets, including New York City, Los Angeles, Chicago, Dallas,
Philadelphia, Houston, Miami, Washington, D.C., Atlanta and
Boston.
The Company reported a net loss of $2.30 billion on
$556.82 million of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $1.25 billion on $274.46 million of
revenue during the prior year.
The Company also reported a net loss attributable to Clearwire
Corporation of $480.48 million on $891.59 million of revenue for
the nine months ended Sept. 30, 2011, compared with a net loss
attributable to Clearwire of $359.42 million on $359.95 million of
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $8.76
billion in total assets, $5.15 billion in total liabilities and
$3.61 billion in total stockholders' equity.
* * *
As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings
Services lowered its corporate credit and senior secured first-
lien issue-level ratings on Bellevue, Wash.-based wireless
provider Clearwire Corp. to 'CCC' from 'CCC+'.
"The downgrade reflects our concerns that the company may choose
to skip its $237 million of interest payments due on Dec. 1,
2011," explained Standard & Poor's credit analyst Allyn Arden.
"With about $698 million of cash on the balance sheet, Clearwire
has sufficient funds to pay the remaining interest expense due in
2011, although Standard & Poor's believes that it would still have
to raise significant capital to maintain operations in 2012
despite the cost-reduction measures it has already achieved. If
Clearwire elected to make the interest payment, we believe that it
would exit 2011 with around $350 million to $400 million in cash,
which assumes less than $100 million of capital expenditures and
EBITDA losses. We do not believe that this cash balance will be
sufficient to cover free operating cash flow (FOCF) losses and
a Long-Term Evolution (LTE) wireless network overlay in 2012 and
that the company will require additional funding during the year."
CLEARWIRE CORP: To Offer $300MM Sr. Notes at 100% Issue Price
-------------------------------------------------------------
Clearwire Corporation announced that its operating subsidiary
Clearwire Communications LLC has priced an offering of $300.0
million aggregate principal amount 14.75% first-priority senior
secured notes due 2016 at an issue price of 100%. The Notes will
be the senior secured obligations of the company and will be
guaranteed on a first-priority lien basis by certain of the
Company's domestic subsidiaries. The Notes and the related
guarantees will be secured by a first-priority lien by
substantially all of Clearwire Communications' and the guarantors'
assets.
The Notes will be issued in private offerings that are exempt from
the registration requirements of the Securities Act of 1933, as
amended, to qualified institutional buyers in accordance with Rule
144A and to persons outside the U.S. pursuant to Regulation S
under the Securities Act. The Notes have not been registered
under the Securities Act or any state or other securities laws.
The sale of the Notes is expected to be consummated on or about
Jan. 27, 2012, subject to customary closing conditions. The
Company intends to use the net proceeds of the offering for the
deployment of mobile 4G LTE technology alongside the mobile 4G
WiMAX technology currently on its network and for the operation
and maintenance of its networks and for general corporate
purposes.
About Clearwire Corporation
Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR)
-- http://www.clearwire.com/-- through its operating
subsidiaries, is a leading provider of wireless broadband
services. Clearwire's 4G mobile broadband network serves 68
markets, including New York City, Los Angeles, Chicago, Dallas,
Philadelphia, Houston, Miami, Washington, D.C., Atlanta and
Boston.
The Company reported a net loss of $2.30 billion on
$556.82 million of revenue for the year ended Dec. 31, 2010,
compared with a net loss of $1.25 billion on $274.46 million of
revenue during the prior year.
The Company also reported a net loss attributable to Clearwire
Corporation of $480.48 million on $891.59 million of revenue for
the nine months ended Sept. 30, 2011, compared with a net loss
attributable to Clearwire of $359.42 million on $359.95 million of
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $8.76
billion in total assets, $5.15 billion in total liabilities and
$3.61 billion in total stockholders' equity.
* * *
As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings
Services lowered its corporate credit and senior secured first-
lien issue-level ratings on Bellevue, Wash.-based wireless
provider Clearwire Corp. to 'CCC' from 'CCC+'.
"The downgrade reflects our concerns that the company may choose
to skip its $237 million of interest payments due on Dec. 1,
2011," explained Standard & Poor's credit analyst Allyn Arden.
"With about $698 million of cash on the balance sheet, Clearwire
has sufficient funds to pay the remaining interest expense due in
2011, although Standard & Poor's believes that it would still have
to raise significant capital to maintain operations in 2012
despite the cost-reduction measures it has already achieved. If
Clearwire elected to make the interest payment, we believe that it
would exit 2011 with around $350 million to $400 million in cash,
which assumes less than $100 million of capital expenditures and
EBITDA losses. We do not believe that this cash balance will be
sufficient to cover free operating cash flow (FOCF) losses and
a Long-Term Evolution (LTE) wireless network overlay in 2012 and
that the company will require additional funding during the year."
CLEARWIRE CORP: S&P Assigns 'CCC' Rating to $300MM Secured Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' issue-level
rating and '4' recovery rating to the proposed Rule 144A (without
registration rights) $300 million senior secured first-lien notes
due 2017 to be issued by Clearwire Communications LLC and
Clearwire Finance Inc., direct and indirect subsidiaries of
Bellevue, Wash.-based wireless carrier Clearwire Corp.
"At the same time, we revised the recovery rating on the company's
existing senior secured first lien debt to '4' from '3'. The '4'
recovery rating indicates our expectation for average (30%-50%)
recovery in the event of payment default. The company plans to use
the net proceeds, along with proceeds from its $716 million equity
offering in December 2011, to deploy a fourth-generation (4G)
wireless network using Long-Term Evolution (LTE) technology and to
fund operations," S&P said.
The change in the recovery rating results from the diluted
recovery prospects associated with the higher secured debt
balance.
"The 'CCC' corporate credit rating on Clearwire Corp. is
unchanged, as is the developing outlook. While the additional
funding, combined with the recent equity offering, allows
Clearwire to avoid a near-term restructuring, we still view the
company's liquidity as 'weak', according to our criteria. We
believe that the company would likely run out of cash in the late
2012 to early 2013 time frame absent significant asset sales,
since we view the terms in the December 2011 wholesale agreement
with Sprint Nextel as unfavorable in the near term and will likely
constrain cash inflows in 2012 to 2013. We have not assumed
spectrum sales in our liquidity assessment because of the
uncertainty involved in finding a buyer, as well as timing.
However, if the company could secure sufficient funding for
operations through 2013, we could raise the ratings," S&P said.
"While the amended wholesale agreement reduces uncertainty about
its relationship with majority shareholder Sprint Nextel Corp.
(B+/Negative/--), terms of the agreement are not favorable for
Clearwire in the near term, including fixed payments for unlimited
4G services under the outgoing WiMax standard in 2012 and 2013. As
a result, we believe it will take longer for the company to
achieve positive EBITDA than our original expectations under the
previous agreement with Sprint," S&P said.
The ratings on Clearwire continue to reflect its "highly
leveraged" financial risk profile based on its high debt burden
and "weak" liquidity (both terms as defined in S&P's criteria).
"The ratings also reflect our view that Clearwire has a vulnerable
business position as a developmental-stage company with
significant competition from better capitalized wireless carriers,
including AT&T Mobility and Verizon Wireless, which are deploying
their own 4G wireless services," S&P said.
Ratings List
Clearwire Corp.
Corporate Credit Rating CCC/Developing/--
New Ratings
Clearwire Communications LLC
Clearwire Finance Inc.
Senior Secured
$300 mil first-lien notes
due 2017 CCC
Recovery Rating 4
Ratings Unchanged; Recovery Ratings Revised
To From
Clearwire Corp.
Senior Secured CCC CCC
Recovery Rating 4 3
CRYOPORT INC: Westcliff Capital Discloses 9.9% Equity Stake
-----------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Westcliff Capital Management, LLC, and Richard S.
Spencer III disclosed that, as of Dec. 31, 2011, they beneficially
own 2,956,736 shares of common stock of CryoPort, Inc.,
representing 9.99% of the shares outstanding. A full-text copy of
the filing is available at http://is.gd/ld9Gf1
About CryoPort Inc.
Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB:
CYRXD) -- http://www.cryoport.com/-- provides innovative cold
chain frozen shipping system dedicated to providing superior,
affordable cryogenic shipping solutions that ensure the safety,
status and temperature of high value, temperature sensitive
materials. The Company has developed a line of cost-effective
reusable cryogenic transport containers capable of transporting
biological, environmental and other temperature sensitive
materials at temperatures below 0-degree Celsius.
KMJ Corbin & Company LLP expressed substantial doubt about
CryoPort's ability to continue as a going concern, following
the Company's fiscal 2009 results. The firm noted that the
Company has incurred recurring losses and negative cash flows from
operations since inception.
The Company's balance sheet at Sept. 30, 2011, showed
$6.43 million in total assets, $3.92 million in total liabilities,
and $2.50 million in total stockholders' equity.
DE TECHNOLOGIES: Files Schedules of Assets and Liabilities
----------------------------------------------------------
DE Technologies Inc. filed with the Bankruptcy Court its schedules
of assets and liabilities, disclosing:
Name of Schedule Total Assets Total Liabilities
---------------- ------------ -----------------
A -- Real Property $0
B -- Personal Property $78,399
C -- Property Claimed as
Exempt
D -- Creditors Holding
Secured Claims 0
E -- Creditors Holding Unsecured
Priority Claims $10,262
F -- Creditors Holding Unsecured
Non-priority Claims $545,000
------------ -----------------
Total $78,399 $555,262
The Debtor said assets include a $60,000 account receivable from
e4X (FiftyOne) and the exact value of the receivable is unknown.
The Debtor also listed as assets its contingent claims in pending
lawsuits against IShopUSA and International Checkout pending
before the U.S. District Court for the Western District of
Virginia as well as possible infringement claims against unknown
parties. The value of the claims, the Debtor said, is unknown.
The Debtor also listed patents of unknown value in the U.S., New
Zealand, Australia, Singapore and Mexico.
About DE Technologies
DE Technologies Inc. filed for Chapter 11 bankruptcy (Bankr. W.D.
Va. Case No. 11-72430) on Dec. 5, 2011. Judge Ross W. Krumm
oversees the case. Wood Rogers PLC serves as the Debtor's
counsel. In its petition, the Debtor estimated $10 million to $50
million in assets and $1 million to $10 million in debts. The
petition was signed by Douglas L. Mauer, secretary/treasurer.
The U.S. Trustee has been unable to form an unsecured creditors
committee in the case due to lack of interest.
DE Technologies, founded by Ed Pool, in Blacksburg, Virginia, has
unsuccessfully fought expensive legal battles to recover money
from global shipping companies since the company's controversial
patent cleared in 2002 -- a patent DE Technologies says entitles
it to a small percentage of the value of transport companies'
international shipments. Mr. Pool's patent covers software that
computerizes the entire trade process, including the creation of
customs declarations and shipping documents, along with services
such as insurance and letters of credit.
DE Technologies in 2004 filed its first major patent infringement
lawsuit against Dell, which later settled the dispute by agreeing
to pay a royalty-free license for an amount that Mr. Pool wouldn't
disclose. The company also settled another lawsuit against
FiftyOne Inc. DE Technologies is now fighting two other major
global shipping companies, International Checkout and IShopUSA
Inc., for using the patented process.
DE TECHNOLOGIES: Court Sets Feb. 24 Claims Bar Date
---------------------------------------------------
The Bankruptcy Court set Feb. 24, 2012, as the last day for
creditors, other than governmental agencies, to file proofs of
claim in the Chapter 11 case of DE Technologies Inc. Governmental
units have until March 26, 2012, to file proofs of claim.
About DE Technologies
DE Technologies Inc. filed for Chapter 11 bankruptcy (Bankr. W.D.
Va. Case No. 11-72430) on Dec. 5, 2011. Judge Ross W. Krumm
oversees the case. Wood Rogers PLC serves as the Debtor's
counsel. In its petition, the Debtor estimated $10 million to $50
million in assets and $1 million to $10 million in debts. The
petition was signed by Douglas L. Mauer, secretary/treasurer.
The U.S. Trustee has been unable to form an unsecured creditors
committee in the case due to lack of interest.
DE Technologies, founded by Ed Pool, in Blacksburg, Virginia, has
unsuccessfully fought expensive legal battles to recover money
from global shipping companies since the company's controversial
patent cleared in 2002 -- a patent DE Technologies says entitles
it to a small percentage of the value of transport companies'
international shipments. Mr. Pool's patent covers software that
computerizes the entire trade process, including the creation of
customs declarations and shipping documents, along with services
such as insurance and letters of credit.
DE Technologies in 2004 filed its first major patent infringement
lawsuit against Dell, which later settled the dispute by agreeing
to pay a royalty-free license for an amount that Mr. Pool wouldn't
disclose. The company also settled another lawsuit against
FiftyOne Inc. DE Technologies is now fighting two other major
global shipping companies, International Checkout and IShopUSA
Inc., for using the patented process.
DISH NETWORK: Fitch Affirms 'BB-' Issuer Default Rating
-------------------------------------------------------
Fitch Ratings affirms the 'BB-' Issuer Default Rating (IDR)
assigned to DISH Network Corporation (DISH) and its wholly owned
subsidiary DISH DBS Corporation (DDBS). Fitch has also affirmed
the 'BB-'rating assigned to the senior unsecured notes issued by
DDBS. The rating Outlook for all of DISH's ratings has been
revised to Negative from Stable. As of Sept. 30, 2011, DISH had
approximately $8.4 billion of debt outstanding.
The Negative rating Outlook encompasses the capital and execution
risks associated with DISH's wireless strategy. While DISH has
yet to fully articulate its wireless strategy, the company has
committed nearly $3.5 billion of capital to acquire wireless
spectrum (acquisition of licenses acquired in 2011 are pending
regulatory approval). Fitch believes the incremental capital and
operating costs associated with a potential wireless network build
out will diminish DISH's ability to generate free cash flow, erode
operating margins resulting in a weaker credit profile and
pressuring the current ratings. Fitch believes the business risk
inherent in launching a wireless business limits the flexibility
the company has to increase leverage at the current ratings to
accommodate the incremental capital costs and EBITDA erosion
associated with the launch of a wireless network. Construction of
a stand alone wireless network would have additional negative
rating implications.
DISH's management has indicated the company prefers to leverage
its spectrum holdings (pending regulatory approval) and partner
with an existing wireless network operator to construct a new 4G
network. A partnership in Fitch's view would reduce the capital
costs and execution risks associated with building a greenfield
network and would be more balance sheet efficient. A wireless
network may better enable DISH to address the competitive forces
within the mature multi-channel video programming distribution
market; notably the increasing utility of portable and mobile
devices, the emergence of IP based video distribution and the
expected migration to cloud based services.
Fitch believes the company's overall credit profile is relatively
strong within the current rating category considering the business
risks attributable to DISH's core operations and the current
rating has sufficient flexibility to accommodate DISH's
inconsistent operating performance. However, DISH has one of the
weaker competitive positions within the multi-channel video
programming distributor sector, in Fitch's opinion. DISH's market
positioning as a low cost and value service provider is not
sustainable as all market participants are aggressive with
promotional offers in an increasingly mature video service
industry.
DISH is in the process of re-positioning its brand away from a
value proposition to a more technology and product focus. DISH's
challenge is to re-energize subscriber growth without sacrificing
subscriber economics (arguably already weak) or credit quality.
Key to a successful transition will be the company's ability to
bring to market new products and services valued by subscribers
that are not easily replicated by competition. DISH lost
approximately 344,000 subscribers during the last twelve month
period ended Sept. 30, 2011.
DISH's credit profile has remained stable aside the inconsistent
operating performance during the course of 2011. On a
consolidated basis, total debt as of Sept. 30, 2011 was
approximately $8.4 billion, somewhat elevated when compared with
the $6.5 billion of debt outstanding as of year-end 2010. DISH's
leverage was 2.37 times (x) on an LTM basis as of Sept. 30, 2011;
however, considering the redemption of DDBS' senior notes in
October, DISH's leverage is 2.1x. This leverage is consistent
with year-end 2010 measures and strong for the rating category.
Absent further investment supporting the company's wireless
strategy or shareholder friendly initiatives, Fitch expects DISH's
debt level will remain consistent and for leverage to approach 2x
by year-end 2012.
The company's liquidity position is strong and supported by cash
and marketable securities on hand and expected free cash flow
generation. The company also benefits from a favorable maturity
schedule as the next scheduled maturity is in 2013 totaling $500
million. As of Sept. 30, 2011, DISH had a total of approximately
$3.4 billion of cash and marketable securities (current portion) -
reflecting a modest increase compared with liquidity measures as
of Sept. 30, 2010. Fitch notes that DISH used approximately $915
million of existing cash to redeem its 6.375% notes due 2011 and
used an additional $892 million to fund the special dividend paid
to DISH shareholders on Dec. 1, 2011.
Fitch does note, however, that the company does not maintain a
revolver, which increases DISH's reliance on capital market access
to refinance current maturities, elevating the refinancing risk
within the company's credit profile. The risk is offset by the
company's consistent access to capital markets and strong
execution.
During the first nine months of 2011, DISH reported nearly $1.4
billion of free cash flow (defined as cash flow from operations
less capital expenditures and dividends), nearly double the amount
of free cash flow generated during the same period last year
(2010). Free cash flow during 2011 benefited from lower capital
expenditures (related subscriber acquisition and retention
spending), and lower cash taxes. Fitch expects capital intensity
will be relatively consistent over the near term and that capital
expenditures will continue to focus on subscriber retention and
capitalized subscriber premises equipment. Absent further
investment in a wireless network or other strategic initiative,
Fitch anticipates that DISH will continue generating relatively
stable levels of free cash flow during the current ratings horizon
while incorporating higher levels of cash taxes.
Rating concerns center on DISH's ability to adapt to the evolving
competitive landscape, DISH's lack of revenue diversity and narrow
product offering relative to its cable MSO and telephone company
video competition, and an operating profile and competitive
position that continues to lag behind its peer group. DISH's
current operating profile is focused on its maturing video service
offering and lacks growth opportunities relative to its
competition.
The ratings also incorporate Fitch's belief that DISH's satellite
based infrastructure can put the company at a competitive
disadvantage, relative to the cable MSO and telephone company's
respective technology and network positions, as video content is
expected to be increasingly consumed over alternative platforms
and devices such as wireless (4G) and higher-speed broadband
networks.
Stabilization of the rating Outlook at the current rating level
can occur as the company demonstrates that it can execute its
wireless strategy in a credit neutral manner. Fitch believes
negative rating action will likely coincide with the company's
decision to execute a wireless strategy or other discretionary
management decisions that weaken the company's ability to generate
free cash flow, erode operating margins and increase leverage
without a clear strategy to de-lever the company's balance sheet.
Fitch has affirmed the following ratings with a Negative Rating
Outlook:
DISH Network Corporation
-- IDR at 'BB-'.
DISH DBS Corporation
-- IDR at 'BB-';
-- Senior unsecured notes at 'BB-'.
DRIWATER INC: File for Chapter 7 Liquidation
--------------------------------------------
Steve Hart at The Press Democrat reports that DriWater Inc. has
closed its doors after the recession cut sales to a trickle.
The company filed for Chapter 7 liquidation in Santa Rosa's
bankruptcy court late last month, listing nearly $7.5 million in
debt and $213,000 in assets, the report discloses.
"Housing was a big part of what we did," the Press Democrat quotes
Joseph Paternoster, DriWater's president, as saying. When housing
and other development slowed, so did DriWater's business,
Mr. Paternoster said.
Founded in Santa Rosa, California, in 1990, DriWater Inc. makes
slow-release gel packs for watering plants.
EASTMAN KODAK: Wins Interim Nod to Access $650MM of Financing
-------------------------------------------------------------
Eastman Kodak Company and its debtor affiliates received interim
authority from Judge Allan L. Gropper of the U.S. Bankruptcy Court
for the Southern District of New York to access debtor-in-
possession loans up to an aggregate principal or face amount of
$650,000,000, to be provided by Citigroup Inc. and a consortium of
lenders.
The interim DIP loans approved as part of the first day motions
represents the first portion of the fully-committed, $950 million
debtor-in-possession credit facility that Kodak obtained from
Citigroup to enhance liquidity and working capital.
The $650 million interim amount consists of borrowings of up to an
aggregate principal or face amount of $400,000,000 under the Term
Facility and $225,000,000 under the Revolving Credit Facility,
with up to an additional $25,000,000 under the Revolving Credit
Facility to be made available for borrowing by Kodak Canada, Inc.
Proceeds from the loans will be used for the operation of the
Debtors' business while they continue to negotiate for the sale of
their patent portfolio. Kodak is also involved in a series of
patent litigation battles spanning federal courts and the U.S.
International Trade Commission, and its Chapter 11 filing poses a
challenge to these lawsuits and the Company's desire to sell its
massive patent portfolio. Just how big this patent portfolio
remains unclear.
Kodak and each of its existing and future direct or indirect U.S.
subsidiary have agreed to provide unconditional guarantees of the
obligations under the DIP Credit Agreement. In addition, the U.S.
Guarantors, the Canadian Borrower and each existing and future
direct and indirect Canadian subsidiary of the Canadian Borrower
have agreed to provide unconditional guarantees of the obligations
of the Canadian Borrower under the DIP Credit Agreement.
As disclosed in a regulatory filing with the U.S. Securities and
Exchange Commission, under the terms of the DIP Credit Agreement,
the Company will have the option to have interest on the loans
accrue at a base rate or the then applicable LIBOR Rate (subject
to certain adjustments and, in the case of the term loan facility,
a floor of 1.50%), plus a margin, (x) in the case of the revolving
loan facility, of 2.25% or 3.25%, respectively, and (y) in the
case of the term loan facility, of 7.50% and 8.50%, respectively.
The obligations of the Borrowers and the Guarantors under the DIP
Credit Agreement are secured by a first-priority security interest
in and lien on all of the existing and after-acquired personal
property of the Company and the U.S. Guarantors, including pledges
of all stock or other equity interest in direct subsidiaries owned
by the Company or the U.S. Guarantors -- but only up to 65% of the
voting stock of each direct foreign subsidiary owned by the
Company or any U.S. Guarantor in the case of pledges securing the
Company's and the U.S. Guarantors' obligations under the DIP
Credit Agreement. Similar assets of the Canadian Borrower or any
Canadian subsidiary of the Canadian Borrower are similarly pledged
to secure the obligations of the Canadian Borrower and Canadian
Guarantor under the DIP Credit Agreement. The security and
pledges are subject to certain exceptions.
The DIP Credit Agreement limits, among other things, the
Borrowers' and the Subsidiary Guarantors' ability to (i) incur
indebtedness, (ii) incur or create liens, (iii) dispose of assets,
(iv) prepay subordinated indebtedness and make other restricted
payments, (v) enter into sale and leaseback transactions, and (vi)
modify the terms of any organizational documents and certain
material contracts of the Borrowers and the Subsidiary Guarantors.
In addition to standard obligations, the DIP Credit Agreement
provides for (x) a periodic delivery by the Company of various
financial statements set forth in the DIP Credit Agreement and (y)
specific milestones that the Company must achieve by specific
target dates.
In addition, the Company and its subsidiaries are required not to
permit consolidated adjusted EBITDA to be less than a specified
level for certain periods, with the specified levels ranging from
$(105,000,000) to $175,000,000 depending on the applicable period.
The Company and its subsidiaries must also maintain minimum US
Liquidity ranging from $100,000,000 to $250,000,000 depending on
the applicable period.
The Borrowers drew approximately $400 million in term loans under
the DIP Credit Agreement on Jan. 20, and issued approximately $102
million of letters of credit under the revolving credit facility,
the SEC disclosure noted. After the initial drawdown under the
DIP Credit Agreement and based on the current borrowing base
calculation, as of Jan. 20, the Borrowers have approximately $98
million available under the revolving credit facility and $300
million committed under the term loan facility. Availability
under the DIP Credit Agreement may be further subject to borrowing
base availability, reserves and other limitations, and in the case
of the additional term loans the entry of a final order by the
Bankruptcy Court approving incurrence of the additional term
loans.
The Company, according to the disclosure, paid to Citigroup, as
Agent, arrangement and incentive fees and a customary agency
administration fee in connection with the DIP Credit Agreement and
will pay to the Lenders participation fees and an unused amount
fee and commitment fee as set forth in the DIP Credit Agreement.
Citigroup Inc., the sole arranger of the loan, held a call with
lenders to discuss the financing, Kristen Haunss of Bloomberg News
said, citing a person familiar with the terms, who declined to be
identified because the call wasn't announced publicly. "We're
here to save this company," Marshall Huebner, Esq., representing
Citigroup, said during the DIP hearing, Bloomberg cited.
Kodak Terminates BofA Credit Pact
In connection with entering into the DIP Credit Agreement with
Citigroup, the Company repaid on Jan. 20 all obligations and
terminated all commitments under a Second Amended and Restated
Credit Agreement, dated as of April 26, 2011, by and among the
Company, the Canadian Borrower, subsidiary guarantor parties,
lenders parties, Bank of America, N.A., as administrative agent
and co-collateral agent, Citicorp USA, Inc., as co-collateral
agent, and the other arrangers, agents and bookrunners party. In
addition, the Company obtained the release of the liens granted to
the agents for the benefit of the secured parties in connection
with the Prior Credit Agreement.
Cash-Flow Forecast
Kodak forecasts its cash flow for the next 13 weeks saying it
would have an ending operating cash balance of $336.3 million for
the week ended April 6.
Before restructuring expenses and debt service, Kodak predicts
operating cash flow over the 13 weeks will be negative by $156.2
million, Bloomberg News pointed out in a Jan. 24 report.
Restructuring expenses and interest charges will add another
$207.5 million to the cash drain. Payments to suppliers represent
$120 million of the restructuring costs, Bloomberg noted, citing
Kodak's lender presentation.
For the first 13 weeks in bankruptcy, Kodak predicts receipts will
total $588.4 million, Bloomberg noted.
The lender presentation also predicted that earnings before
interest, taxes, depreciation and amortization in the last quarter
of 2011 will be $81 million, to offset some of the
$302 million in EBITDA losses over the first three quarters,
Bloomberg related.
A draft pro forma 13-week cash flow projection for the Debtors is
available for free at:
http://bankrupt.com/misc/EastmanKodak13WkBudget.pdf
Copies of the Debtors' estimated equity cushion and interim
funding analysis are available for free at Exhibits A and B
of http://bankrupt.com/misc/kodakdipexa.pdf
A full-text copy of the Interim DIP Order is available for free at
http://bankrupt.com/misc/kodakinterimdiporder.pdf
Noteholders Seek Limits on Borrowing, Fees
An ad hoc group of holders of second lien notes issued by Eastman
Kodak represented by their indenture trustee, The Bank of New York
Mellon, argued that there should be "significant restrictions" on
the Company's ability to borrow and spend. The group pointed out
that the Debtors have burned approximately $2 billion in cash,
including losses exceeding $1 billion through the first three
quarters of 2011. The group further noted that the Debtors' 13-
week budget projects that they will spend/lose an additional $364
million during that period. This, the group asserted, must stop.
"The Debtors have continued to adhere to a misguided strategy of
funding businesses that are not profitable or viable," David H.
Botter, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York,
on behalf of the Noteholders, told the Court.
The group also called for setting limits on the fees payable as a
result of the DIP loans.
"Given the economic realities we all currently face, these Debtors
and their creditors should not be further handicapped by the
continuation of poor decision-making and inability to project
performance," Mr. Botter added.
The group is composed of certain holders of the (i) 9.75% Senior
Secured Notes due March 1, 2018 issued pursuant to the Indenture
dated March 5, 2010, by and among Eastman Kodak Company, as
issuer, the guarantors, and The Bank of New York Mellon, as
indenture trustee and (ii) 10.625% Secured Notes due March 15,
2019 issued pursuant to the Indenture dated March 15, 2011, among
EKC, as issuer, the guarantors as defined in the 2019 Indenture,
and The Bank of New York Mellon, as indenture trustee.
* * *
Judge Gropper will convene a hearing to consider final approval of
the request on Feb. 15, 2012, at 11:00 a.m. Objections are due
Feb. 8.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in
Manhattan. Subsidiaries outside of the U.S. are not included in
the filing and will continue to operate as usual.
The Company, founded in 1880 by George Eastman, was once the
world's leading producer of film and cameras. In recent years,
Kodak has been working to transform itself from a business
primarily based on film and consumer photography to a smaller
business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices. Kodak has 8,900 patent and
trademark registrations and applications in the United States, as
well as 13,100 foreign patents and trademark registrations or
pending registration in roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Kodak sought bankruptcy protection amid near-term liquidity issues
brought about by steeper-than-expected declines in Kodak's
historically profitable traditional businesses, and cash flow from
the licensing and sale of intellectual property being delayed due
to litigation tactics employed by a small number of infringing
technology companies with strong balance sheets and an awareness
of Kodak's liquidity challenges.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtor. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EASTMAN KODAK: Wins Interim Approval to Access Cash Collateral
--------------------------------------------------------------
Judge Allan Gropper authorized the Debtors, on an interim basis,
to use all Cash Collateral of any of their Prepetition Secured
Creditors to pay for immediate operating expenses. Each of the
Prepetition Secured Creditors is directed promptly to turn over to
the Debtors all Cash Collateral received or held by them; provided
that the applicable Prepetition Secured Creditors are granted
adequate protection.
The Existing Second Lien Debt holders whose liens will be primed
and whose cash collateral will be authorized for use by the Loan
Parties, will be entitled to receive as adequate protection (i)
liens on the Collateral that are junior to the liens securing the
DIP Facility, the adequate protection liens, and other liens of
the Prepetition First Lien Secured Lien Lenders; and (ii)
administrative claims as provided for in Section 507(b) of the
Bankruptcy Code, junior to the DIP Superpriority Claims.
A full-text copy of the Jan. 20, 2012 Interim DIP Order is
available for free at:
http://bankrupt.com/misc/kodakinterimdiporder.pdf
A draft pro forma 13-week cash flow projection for the Debtors is
available for free at:
http://bankrupt.com/misc/EastmanKodak13WkBudget.pdf
Judge Gropper will convene a hearing to consider final approval of
the request on Feb. 15, 2012, at 11:00 a.m. Objections are due
Feb. 8.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in
Manhattan. Subsidiaries outside of the U.S. are not included in
the filing and will continue to operate as usual.
The Company, founded in 1880 by George Eastman, was once the
world's leading producer of film and cameras. In recent years,
Kodak has been working to transform itself from a business
primarily based on film and consumer photography to a smaller
business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices. Kodak has 8,900 patent and
trademark registrations and applications in the United States, as
well as 13,100 foreign patents and trademark registrations or
pending registration in roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Kodak sought bankruptcy protection amid near-term liquidity issues
brought about by steeper-than-expected declines in Kodak's
historically profitable traditional businesses, and cash flow from
the licensing and sale of intellectual property being delayed due
to litigation tactics employed by a small number of infringing
technology companies with strong balance sheets and an awareness
of Kodak's liquidity challenges.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtor. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EASTMAN KODAK: Seeks Approval to Pay Claims of Critical Vendors
---------------------------------------------------------------
Eastman Kodak Co. and its affiliates acknowledge that the services
and products of certain trade creditors are critical to the
continuation of their business operations. These Critical Vendors
generally fall into two categories: (1) Product Vendors, which are
either raw materials suppliers, custom chemicals suppliers,
merchandise vendors or component vendors; and (2) Corporate
Operations Vendors, which are either Web site management vendors
or information technology vendors.
By this motion, the Debtors ask the Court to authorize them to pay
some or all of the Critical Vendor Claims up to an aggregate of
$40 million, in accordance with a proposed procurement policy.
The Debtors say they have not identified any pre-authorized list
of Critical Vendors whose claims may be paid, but seek to make
claim payments upon determining that that payment is necessary to
ensure that the particular vendor will provide necessary goods and
services to the Debtors on a postpetition basis.
The Debtors propose a Procurement Policy for critical vendors:
a. The Debtors will require a Critical Vendor to enter into a
Critical Vendor Agreement with them, whose agreement will
Include, among other things:
-- the amount of the Critical Vendor Claim;
-- the customary trade terms between the parties; and
-- the Critical Vendor's agreement to continue to extend the
Customary Trade Terms to the Debtors' foreign affiliates.
b. A designation of Critical Vendor Payments, whereby the
Critical Vendor agrees to the terms of a Bankruptcy Court
order to be entered in relation to the Critical Vendor
Payment.
c. If a Critical Vendor refuses to supply goods or services
following receipt of payment on its Critical Vendor Claim,
the Debtors may declare that Vendor in breach of its Critical
Vendor Agreement.
d. The Debtors will maintain a matrix summarizing (a) the name
of each Critical Vendor; (b) the amount paid to each Critical
Vendor; and (c) a brief description of the type of goods and
services provided by each Critical Vendor.
The Debtors estimate that about 40% of the total amount of
Critical Vendor Claims is on account of goods that were received
during the 20-day period before the Petition Date, and therefore,
may be afforded administrative priority under Section 503(b)(9) of
the Bankruptcy Code. For this subset of Critical Vendor Claims,
the Debtors clarify, the relief sought will only affect the
timing, but not the amount, of payment.
The Debtors further ask the Court to authorize financial
institutions to receive, process, honor and pay all related checks
and electronic payment requests relating to the Critical Vendor
Claim payments.
Judge Gropper will convene a hearing on January 26, 2012, to
consider the Debtors' request.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in
Manhattan. Subsidiaries outside of the U.S. are not included in
the filing and will continue to operate as usual.
The Company, founded in 1880 by George Eastman, was once the
world's leading producer of film and cameras. In recent years,
Kodak has been working to transform itself from a business
primarily based on film and consumer photography to a smaller
business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices. Kodak has 8,900 patent and
trademark registrations and applications in the United States, as
well as 13,100 foreign patents and trademark registrations or
pending registration in roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Kodak sought bankruptcy protection amid near-term liquidity issues
brought about by steeper-than-expected declines in Kodak's
historically profitable traditional businesses, and cash flow from
the licensing and sale of intellectual property being delayed due
to litigation tactics employed by a small number of infringing
technology companies with strong balance sheets and an awareness
of Kodak's liquidity challenges.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtor. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EASTMAN KODAK: Taps Alix's Masterharm as Restructuring Chief
------------------------------------------------------------
In a Jan. 23 press release, Eastman Kodak Company said it retained
James A. Mesterharm of AlixPartners LLP as Chief Restructuring
Officer, replacing Dominic DiNapoli for that position.
The scope of the Chief Restructuring Officer's duties, and his
reporting duties, will not change in connection with Mr.
Mesterharm's appointment, the company statement noted. The change
does not reflect any disagreement or difference of opinion between
Mr. DiNapoli and the Company.
AlixPartners will be the Company's restructuring adviser during
the reorganization process, leveraging AlixPartners' knowledge of
the Company based on its preexisting operational enhancement
advisory engagement with the Company over the past several months.
FTI Consulting, Inc. is expected to continue to work on certain
postpetition matters alongside AlixPartners.
Mr. Mesterharm, according to the Company's presentation for
lenders, will oversee bankruptcy and restructuring activities and
support the Company's management team during the Chapter 11 case
to ensure progress in the restructuring plan's objectives to:
-- bolster liquidity in the U.S. and abroad
-- monetize non-strategic intellectual property
-- fairly resolve legacy liabilities
-- focus on Kodak's most valuable business lines
Ted Gavin of NHB Advisors Inc. told Reuters that Kodak may have
discovered a conflict that would prevent FTI from serving as its
restructuring team.
"This is a very unusual move," Mr. Gavin said. "Typically the
relationship of CRO is one, especially in large corporate
bankruptcies like Borders or Kodak, that is vetted early enough
that you have a chance to make sure that anything that gives rise
to a replacement is addressed early in the process."
"I don't think there was a specific falling out," Mike Darland of
turnaround consulting firm CRG Partners and a former Polaroid
executive, told Reuters. "My first instinct was that FTI was
conflicted with creditors or lenders or bondholders and it may not
have been discovered initially."
The Company also said it will not hold a conference call with the
investment community at the time of its fourth quarter earnings
announcement.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in
Manhattan. Subsidiaries outside of the U.S. are not included in
the filing and will continue to operate as usual.
The Company, founded in 1880 by George Eastman, was once the
world's leading producer of film and cameras. In recent years,
Kodak has been working to transform itself from a business
primarily based on film and consumer photography to a smaller
business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.
Having invested significantly in research and development for over
a century, Kodak has a vast portfolio of patents. In 1975, Kodak
scientists invented the first digital camera. Kodak then went on
to develop a vast collection of patented technologies to enhance
digital image capture and processing, technologies that are used
in virtually every modern digital camera, smartphone and tablet,
as well as numerous other devices. Kodak has 8,900 patent and
trademark registrations and applications in the United States, as
well as 13,100 foreign patents and trademark registrations or
pending registration in roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Kodak says it has "significant" legacy liabilities, which include
$1.2 billion in non-U.S. pension liabilities, $1.3 billion of
Other Post-Employment Benefit ("OPEB") liabilities and roughly
$100 million in environmental liabilities.
Kodak has outstanding funded debt in an aggregate amount of
roughly $1.6 billion, consisting primarily of roughly: (a) $100
million outstanding under the first lien revolving credit facility
plus an additional $96 million in face amount of outstanding
letters of credit; (b) $750 million in principal amount of second
lien secured notes; (c) $400 million in principal amount of
convertible notes; and (d) $283 million in principal amount of
other senior unsecured debt. Kodak also has roughly $425 million
in outstanding trade debt.
Kodak sought bankruptcy protection amid near-term liquidity issues
brought about by steeper-than-expected declines in Kodak's
historically profitable traditional businesses, and cash flow from
the licensing and sale of intellectual property being delayed due
to litigation tactics employed by a small number of infringing
technology companies with strong balance sheets and an awareness
of Kodak's liquidity challenges.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtor. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent. A group of second lien lenders are represented by
Akin Gump Strauss Hauer & Feld LLP.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
DYNEGY INC: Plan Amended to Hike Consideration
----------------------------------------------
Dynegy Holdings LLC and its Debtor affiliates filed an amended
Chapter 11 Plan of Reorganization and an accompanying Disclosure
Statement for Dynegy Holdings LLC to the U.S. Bankruptcy Court
for the Southern District of New York on January 19, 2012.
The Amended Plan, among other things, provide for an increase in
the amount of consideration to be provided under the Plan. The
Amended Plan addresses claims against and interests in Dynegy
Holdings only and does not address claims against and interests
in the other Debtors.
The Amended Plan will implement a modified agreement worked out
with holders of $1.8 billion of the $3.5 billion in unsecured
senior notes and the $215 billion in subordinated notes. Under
the Plan, noteholders and other unsecured creditors would share
$400 million in cash, $1.015 billion in seven-year 11% secured
notes, and $2.1 billion in convertible pay-in-kind notes
mandatorily convertible at maturity in December 2015 into 97% of
the equity. Claims on the notes and other general unsecured
claims together will total from $3.67 billion to $3.89 billion.
A hearing will be held before Judge Cecelia G. Morris, bankruptcy
judge of the U.S. Bankruptcy Court for the Southern District of
New York, at 355 Main Street, Poughkeepsie, New York 12601-3315,
on February 24, 2012 at 10:00 a.m. (Prevailing Eastern Time) to
consider the entry of an order approving the Disclosure Statement
filed by Dynegy Holdings LLC and its Debtor affiliates as
containing "adequate information" within the meaning of Section
1125 of the Bankruptcy Code and approving the solicitation
procedures and scheduling set in the Debtors' request to approve
the Disclosure Statement. Objections to the approval of the
Disclosure Statement are due on Feb. 3.
Plan Preferred Stock
The Amended Plan contains additional information regarding the
Debtors' "Plan Preferred Stock," which will be Redeemable
Convertible Preferred Shares, par value $0.01 per share, issued
by Dynegy, Inc. and will accrue dividends, commencing on November
7, 2011, at an annual rate of 4% through December 31, 2013, 8% on
or after January 1, 2014 through December 31, 2014, and 12%
thereafter, compounding. Dividends will not be paid in cash, but
will accrue. The Plan Preferred Stock will not be convertible at
the option of the holder; but, based on the capital structure of
Dynegy anticipated to be in effect as of the effective date of
the Plan, the Plan Preferred Stock will be convertible into 97%
of Dynegy's fully-diluted common stock on the terms set forth in
the Stock Designation. The Plan Preferred Stock may be redeemed
by Dynegy, subject to certain limitations at an aggregate price
equal to:
(i) $1.95 billion if redeemed prior to May 8, 2013;
(ii) $2.0 billion if redeemed on or after May 8, 2013 through
December 31, 2013; and
(iii) $2.1 billion if redeemed on or after January 1, 2014
through the mandatory conversion date of December 31,
2015, in each case, plus accrued and unpaid dividends.
However, if Dynegy redeems less than all of the shares of Plan
Preferred Stock, the amounts set forth in clauses (i) and (ii)
will be replaced with $2.1 billion. Dynegy may only redeem less
than all of the shares of Plan Preferred Stock with the proceeds
of a firm commitment, underwritten issuance of Permitted Stock
that is entered into prior to December 31, 2014.
In addition, Dynegy may not purchase, and may not permit any of
its subsidiaries to purchase, any shares of Plan Preferred Stock
in the open market except as permitted pursuant to the provisions
of the indenture governing the Plan Secured Notes, subject to
certain restrictions set forth in the Stock Designation. The
Plan Preferred Stock will have no voting or governance rights
except that, following the occurrence of a certain trigger event,
the Plan Preferred Stock will vote, on an "as converted" basis
together with the holders of common stock, and subject to the
receipt of any required regulatory approvals, on all matters
submitted to stockholders.
After the Effective Date, the approval of holders of Plan
Preferred Stock will be required for certain actions by Dynegy.
Dynegy and its subsidiaries are restricted from entering into
certain "Affiliate Transactions". Dynegy may, without the
consent of the holders of shares of Plan Preferred Stock, issue
and sell shares of Permitted Stock, subject to certain
restrictions set forth in the Stock Designation and to the right
of first offer of the holders of shares of Plan Preferred Stock
to purchase shares of "Permitted Stock," if immediately following
issuance and sale, all of the outstanding shares of Permitted
Stock issued from and after the Effective Date will comprise or
be convertible into Common Stock comprising less than 30% of the
issued and outstanding Common Stock of Dynegy, calculated on a
fully diluted basis at the time of such issuance and sale.
Est. Range of Allowed Gen. Unsecured Claims
The Amended Plan provides an estimated range of Allowed Claims in
Class 3 - General Unsecured Claims, which is the sole impaired
class under the Plan. The Debtors stated that although every
reasonable effort was made to be accurate, the projected Allowed
range of Class 3 - General Unsecured Claims is only an estimate
as of Jan. 19, 2012, and may vary from the final amounts in Class
3 Allowed by the Bankruptcy Court.
Pursuant to the Amended Plan, claims in Class 3 - General
Unsecured Claims are approximate allowed senior notes claims and
subordinated notes claims:
* 2012 Notes - $90 million
* 2015 Notes - $811 million
* 2016 Notes - $1.092 billion
* 2018 Notes - $181 million
* 2019 Notes - $1.137 billion
* 2026 Notes- $176 million
* Subordinated Notes - $216 million
In estimating the range of Allowed General Unsecured Claims, the
Debtors have assumed that all of the holders of Subordinated
Notes Claims will reduce their Claims pursuant to Section 16.5 of
the Plan. Based on the total estimated range of Allowed General
Unsecured Claims and an assumed total distribution to Class 3 -
General Unsecured Claims of $3.5 billion of value, the estimated
recovery percentage range for Class 3 - General Unsecured Claims
would be approximately 90%-95%.
The Plan provides that Dynegy will issue to DH for the benefit of
holders of Allowed General Unsecured Claims against DH, (i) the
Plan Cash Payment, (ii) the Plan Preferred Stock, and (iii)
either (A) the Plan Secured Notes or (B), in lieu of the Plan
Secured Notes, the Plan Secured Notes Alternative Payment. DH
will thereafter cause the property to be distributed to the
holders of Allowed General Unsecured Claims in accordance with
and pursuant to the Plan.
Dynegy and DH will cause Dynegy Gas Investments, LLC, to cancel
the DH Note and deem that DH Note fully satisfied and
extinguished; Legacy DH, as successor to DH, and Dynegy will
cancel the Undertaking Agreement and Dynegy's obligations under
the Undertaking Agreement will be deemed to be fully satisfied
and extinguished.
Legacy DH will transfer to New DH 100% of the equity interests in
DGIN; DH, its non-Debtor Affiliates, its Estate, and the Plan
Proponents will release, and be deemed to have released, all
Claims and Causes of Action of the types described in the Plan
against all persons and entities referenced in the Plan. Holders
of Claims or Causes of Action arising from or related to the
Prepetition Restructurings, including the Prepetition Lawsuits,
will be enjoined from taking any action in respect of or on
account of those Claims or Causes of Action against DH and all
its successors, Dynegy or its non-Debtor Affiliates, or any of
their current or former respective members, equity holders,
directors, managers, officers, employees, agents, and
professionals, successors and assigns or their respective assets
and property.
Settlement with PSEG Entities
Furthermore, the Amended Plan mentioned the Debtors' settlement
with the PSEG Entities regarding certain leases knows as
"Facility Leases" and attached certain projections and a
liquidation analysis.
Liquidation Analysis
Under the "best interests" of creditors test set in Section
1129(a)(7) of the Bankruptcy Code, the Court may not confirm a
plan of reorganization unless the plan provides each holder of a
claim or interest who does not otherwise vote in favor of the
Plan with property of a value, as of the effective date of the
plan, that is not less than the amount that the holder would
receive or retain if the debtor was liquidated under Chapter 7 of
the Bankruptcy Code.
To demonstrate that the Amended Plan satisfies the "best
interests" of creditors test, the Debtors have prepared a
hypothetical liquidation analysis for Dynegy Holdings, a full-
text copy of which is available for free at:
http://bankrupt.com/misc/DynegyLiqAnal.pdf
A full-text copy of the Amended Plan dated Jan. 19 is available
for free at http://bankrupt.com/misc/DynegyPlanAmd.pdf
A full-text copy of the Disclosure Statement explaining the
Amended Plan is available for free at:
http://bankrupt.com/misc/DynegyDSAmd.pdf
The Chapter 11 Cases were filed in accordance with a Restructuring
Support Agreement, dated Nov. 7, 2011. Dynegy on Dec. 9, 2011,
and Dec. 16, 2011, entered into amendments to the Support
Agreement, which, among other things, extended certain deadlines
for finalizing documentation.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
DYNEGY INC: U.S. Bank Sues; Debtors Want Claims Disallowed
----------------------------------------------------------
U.S. Bank National Association, as successor indenture trustee
under the Indenture of Trust, Mortgage, Assignment of Leases and
Rents and Security Agreement related to Roseton Units 1 and 2 and
successor indenture trustee under the Indenture of Trust,
Mortgage, Assignment of Leases and Rents and Security Agreement
related to Danskammer Units 3 and 4, filed an adversary
proceeding against debtors Dynegy Holdings LLC, Dynegy
Roseton LLC, and Dynegy Danskammer LLC.
U.S. Bank sued after the Debtors filed a motion to reject certain
agreements, including certain personal property leases. U.S. Bank
said leases of personal property. U.S. Bank says its relationship
with the Debtors plainly is one of lender-borrower, and therefore
11 U.S.C. Section 502(b)(6). U.S. Bank says the Debtors should
not be permitted to avoid their obligations to repay the hundreds
of millions of dollars certificate holders loaned to them based on
a re-characterization that is completely divorced from the
economic realities of the Personal Property Leases.
U.S. Bank later filed an amended complaint against Debtors Dynegy
Holdings LLC, Dynegy Roseton LLC, and Dynegy Danskammer LLC noting
the Court's approval of a stipulation entered into by the Parties
for the rejection of the Personal Property Leases, among other
updates. The Amended Complaint also added a "Fifth Claim for
Relief", which is asserted by the Plaintiffs under Section 2201 of
the Federal Declaratory Judgment Act.
George A. Davis, Esq., at Cadwalder Wickersham & Taft LLP, in New
York, relates that pursuant to each of the Personal Property
Leases, upon their termination based on a default by the
applicable "Dynegy Borrower," the Dynegy Borrower and Dynegy
Holdings are obligated to pay to U.S. Bank the sum of any unpaid
scheduled rent due before the termination date, and a certain
termination value, as liquidated damages in lieu of the scheduled
rent due after the termination date; plus any other amounts due
and payable under the Personal Property Lease as of the
termination date; less the present fair value of the Transferred
Personal Property.
Mr. Davis also contends that Dynegy Roseton and Dynegy Danskammer
are obligated to timely perform their obligations under the
Personal Property Leases until they actually turn over possession
and control of those assets. Accordingly, unless and until
Dynegy Roseton and Dynegy Danskammer actually vacate and
relinquish control over the Transferred Personal Property,
Plaintiff continues to accrue as an administrative claim, and the
Dynegy Borrowers are obligated to timely pay, rent due under the
Personal Property Leases.
As rent is paid in arrears under the Personal Property Leases,
the amount of rent due under each Personal Property Lease is:
Nov. 7-8, 2011 Nov. 9, 2011- May 9, 2012
May 8, 2012 Nov. 8, 2012
-------------- ------------- ------------
Roseton $436,634/day $286,829.81/day $247,909.69/day
Danskammer $21,603.97/day $21,603.97/day $436,526.90/day
U.S. Bank may have additional administrative claims against the
Dynegy Borrowers under the Personal Property Leases and
Guaranties related to environmental, maintenance and other issues
concerning the Transferred Personal Property, to the extent those
issues arose after the filing of the Chapter 11 cases.
Accordingly, U.S. Bank says it cannot quantify these claims at
this time.
Mr. Davis notes that U.S. Bank's claims, which aggregate to more
than $919 million are not subject to offset, recoupment, or
counterclaim and U.S. Bank does not waive any right to claim
specific assets, rights to setoff, recoupment or counterclaim, or
any other right, rights of action, causes of action or claims,
whether existing now or hereafter arising, that Plaintiff has or
may have against the Debtors or any other person or entity, and
Plaintiff expressly reserves all those rights.
Debtors Answer Amended Complaint
Dynegy Holdings, Dynegy Roseton, and Dynegy Danskammer contend
that "for all the allegations, claims, and distractions in the
43-page Amended Complaint, this adversary proceeding is nothing
more than a claims allowance proceeding, involving the
adjudication of claims asserted by U.S. Bank against the Debtors
which arise largely from the rejection of two unexpired leases of
real property."
Accordingly, they ask the Court to disallow U.S. Bank's claim in
full.
U.S. Bank's contention that it is owed more than $919 million,
when the Certificate Holders on whose behalf U.S. Bank acts are
owed only $550.4 million, must fail for multiple reasons, Steven
M. Bierman, Esq., at Sidley Austin LLP, in New York, relates.
Mr. Bierman contends that:
-- U.S. Bank can assert a claim only for the gross amount
outstanding under the Notes, or $550.4 million. That is
all that the Certificate Holders on whose behalf U.S. Bank
acts as Indenture Trustee are owed because, as part of the
stipulation allowing the rejection of the Facility Leases,
Dynegy Holdings allowed the PSEG Entities an unsecured
claim amounting $110 million, and the PSEG Entities
released the Debtors from any claims arising under the
relevant agreements, including any rejection damage claims
arising under the Facility Leases;
-- under the express terms of the Facility Leases, the
Defendants are entitled to a credit against any lease
rejection damages in the amount of the fair market value of
the Facilities. That credit, once again, prevents the
Certificate Holders from recovering more than the amount
outstanding on the Notes, as would be the case if they
recovered in full from the Defendants and then were able to
take possession of the Facilities. Accordingly, as part of
the action, the Court should determine the fair market
value of the Facilities, and use the amount so determined
as a direct deduction from the allowed amount of the U.S.
Bank Claim;
-- the U.S. Bank Claim may still exceed the allowable amount
of the claim under Section 502(b)(6) of the Bankruptcy
Code. In that case, the Court should apply the "502(b)(6)
cap" and disallow any portion of the U.S. Bank Claim in
excess of (a) a range from $0 to $45,066,66 with respect to
Dynegy Danskammer, (b) a range from $0 to $113,497,161 with
respect to Dynegy Roseton, and (c) a range from $0 to
$158,563,820 against Dynegy Holdings, subject to proof at
trial or on summary judgment;
-- even as so capped, the U.S. Bank Claim against the
Defendants contains several components which are clearly
disallowable under other provisions of Section 502 of the
Bankruptcy Code, including claims for prepetition
attorneys' fees which are not reimbursable by the
Defendants, as well as claims for postpetition interest
from the Defendants' estates. The Defendants seek to have
all those claims disallowed;
-- once the allowable amount of the U.S. Bank Claim is
determined as against each Defendant, the Court should make
a marshalling of the claims against the primary obligors to
U.S. Bank -- Dynegy Danskammer and Dynegy Roseton -- and
the derivative claims against Dynegy Holdings.
Specifically, in order to prevent U.S. Bank from receiving
more than the allowed amount of its claims, if any, the
Court should determine the value of the non-leased assets
of the primary obligors (Dynegy Roseton and Dynegy
Danskammer) which are available for distribution to U.S.
Bank and credit those recoveries against the Dynegy
Holdings claim;
-- as part of its claim, U.S. Bank seeks to have a portion
thereof afforded administrative expense priority treatment
against the Defendants under Section 503(b)(1) of the
Bankruptcy Code. As set forth herein, no elevated priority
is warranted for any portion of the U.S. Bank Claim. There
is no basis whatsoever under existing law or precedent for
allowance of any administrative expense priority against
Dynegy Holdings, which is merely a guarantor of lease
obligations and has never been in possession, use or
occupancy of the Facilities; and
-- to the extent that the Court allows any portion of the U.S.
Bank Claim against the Defendants, the Court must also
adjudicate the Defendants' claims against U.S. Bank.
Notably, the Defendants have substantially overpaid rent
under the Danskammer and Roseton Facility Leases amounting
$197,453,300 under the Danskammer Facility Lease and
$65,617,003 under the Roseton Facility Lease, which the
Defendants assert is affirmatively recoverable from U.S.
Bank as a security deposit or as prepaid rent under
applicable New York law and pursuant to Section 542 of the
Bankruptcy Code. At the very least, the prepaid rent claim
will reduce on a dollar-for-dollar basis any distribution
to which U.S. Bank would otherwise be entitled on account
of any allowed claim by operation of section 502(d) of the
Bankruptcy Code, as section 502(d) serves to bar allowance
of any claim in favor of U.S. Bank until it has repaid the
overpaid rent amounts in full.
Dynegy Parent and Creditors' Committee Wants to Intervene
In separate filings, Dynegy, Inc. and the Official Committee of
Unsecured Creditors file motions to intervene in the Adversary
Proceeding.
The Committee relates that its intervention is agreed to by
parties pursuant to a stipulation.
Dynegy, Inc. contends that it has the right to intervene as a co-
Plan proponent. It points out that the approval of the Plan is
based on the outcome of the Adversary Proceeding.
U.S. Bank Responds to Dynegy Intervention
U.S. Bank says it does not oppose Dynegy's intervention so that
it can monitor the proceeding. However, the scope of Dynegy
Inc.'s participation in this adversary proceeding should be
consistent with that of an intervenor, and should not extend to
the active prosecution of this proceeding properly reserved for
the Indenture Trustee and the Defendants.
Dynegy 's request to take an active role in discovery, pleadings
and trial is unnecessary to protecting its interests, and will
substantially delay resolution of this adversary proceeding and
significantly increase the burdens on the other parties to the
proceeding, Mr. Bierman tells the Court. Accordingly, he
suggests that the Court should appropriately restrict Dynegy's
intervention in the discovery process related to this adversary
proceeding to a passive "monitoring" role, and should not permit
Dynegy to file pleadings or call witnesses at trial without first
explaining to the Court why such pleadings or witnesses are not
duplicative of those filed or called, or to be filed or called,
by the Defendants.
Dynegy Answers U.S. Bank
Dynegy asserts that is a key stakeholder in the action; it has a
statutory right to intervene; it has its own legal rights that
will inevitably be affected by the proceeding; and permitting
Dynegy to participate will not prejudice the parties or burden
the Court.
J. Christopher Shore, Esq., at White & Case LLP, in New York,
relates that while it is not attempting to usurp in any way the
role of the Debtors, it is not a stranger to the issues in the
Adversary Proceeding and has its own rights and interests to
protect.
Mr. Shore notes that Dynegy is the sole equity holder of the
Debtors, it is the sole non-Debtor Plan proponent with a direct
interest in the allowable amount of U.S. Bank's Claim, and it is
the Court-approved assignee of the PSEG Entities' claims against
U.S. Bank arising out of lease rejection and the Adversary
Proceeding.
"The outcome of the Adversary Proceeding will undoubtedly involve
judicial determinations affecting these interests, and US Bank
does not seem to dispute that point," Mr. Shore notes.
For these reasons, Dynegy asks the Court to grant its request.
U.S. Bank's Rule 2019 Statement
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure, U.S. Bank National Association disclosed that it acts
as Lease Indenture Trustee pursuant to a certain Indenture of
Trust, Mortgage, Assignment of Leases and Rents and Security
Agreement related to Roseton Units 1 and 2, and that certain
Indenture of Trust, Mortgage, Assignment of Leases and Rents and
Security Agreement related to Danskammer Units 3 and 4, each
dated as of May 8, 2001.
In addition, U.S. Bank also acts as Pass Through Trustee pursuant
to a Pass Through Trust Agreement, by and between Dynegy Roseton,
L.L.C., Dynegy Danskammer, L.L.C. and the Pass Through Trustee,
dated as of May 1, 2001.
Pamela J. Wieder, vice president of U.S. Bank, says that at the
time of the filing of the petitions initiating the Chapter 11
cases, and continuing to December 5, 2011, an aggregate principal
sum in excess of $550,400,000, plus accrued and unpaid interest
and certain other liquidated and unliquidated amounts due under
the Personal Property Leases and the other Loan Documents,
remains outstanding on the Notes. Pursuant to the Loan
Documents, the Trustee also has claims against the Debtors for
fees, expenses and liabilities incurred while acting as Lease
Indenture Trustee and Pass Through Trustee under the Loan
Documents, including, without limitation, attorneys' fees.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
DYNEGY INC: Appaloosa Says Claims Improperly Grouped Together
-------------------------------------------------------------
Appaloosa Management L.P. asserts that in a transparent attempt
to disenfranchise the holders of Series B 8.316% Subordinated
Capital Income Securities due 2027 and render their Plan votes
meaningless, Dynegy Holdings LLC and Dynegy Inc., as Plan
proponents, have grouped all General Unsecured Claims into one
single Class 3 under their proposed Plan. Accordingly, Class 3
thus includes, among others, Senior Notes Claims and Subordinated
Notes Claims.
Paul N. Silverstein, Esq., at Andrews Kurth LLP, in New York --
paulsilverstein@andrewskurth.com -- on behalf of Appaloosa,
contends that the Proponents' intentions are obvious because the
proposed Plan does not contemplate payment in full of unsecured
claims against the Debtors. He points out that although it
appears that the holders of Senior Notes Claims would be paid in
full under the proposed Plan, the holders of Subordinated Notes
Claims would receive, at most, 35 cents on the dollar.
"Notwithstanding that Subordinated Notes Claims would not be paid
in full, under the proposed Plan, Dynegy Parent -- Debtor Dynegy
Holdings' sole equity holder -- would be left unimpaired and
would retain its equity interest in Dynegy Holdings," Mr.
Silverstein notes.
If, however, the Subordinated Notes Claims and the Senior Notes
Claims were classified separately -- as is required by Section
1122 of the Bankruptcy Code -- and the class of Subordinated
Notes Claims rejected the Plan, the proposed Plan's distribution
scheme would clearly violate the absolute priority rule of
Section 1129(b)(2)(B) of the Bankruptcy Code and the proposed
Plan could not be confirmed, Mr. Silverstein opines.
Rather than proposing a plan that would comply with the
Bankruptcy Code, the Proponents have classified the Subordinated
Notes Claims together with the Senior Notes Claims in order to
artificially extinguish a dissenting class, Mr. Silverstein
argues. He further asserts that the Proponents' efforts
constitute a blatant attempt to circumvent the "cram down"
provisions of Section 1129(b)(2)(B) in order to provide Dynegy
Parent with a recovery while compromising claims of the Debtors'
creditors, specifically the holders of Subordinated Notes.
"This obvious tactical maneuver -- which is tantamount to
'reverse gerrymandering' -- subverts the rights of holders of
Subordinated Notes Claims by ignoring the requirement of Section
1122(a) that different claims be separately classified," Mr.
Silverstein tells the Court.
Pursuant to Rule 3013 of the Federal Rules of Bankruptcy
Procedure, Appaloosa asks that the Court conduct a hearing on the
Plan's classification scheme -- particularly as it relates to the
classification of Senior Notes Claims and Subordinated Notes
Claims in one class.
Mr. Silverstein contends that a hearing will save time and
resources of the Debtors' estates and parties-in-interest by
testing the Proponents' "illegitimate classification scheme
before an expensive and time-consuming solicitation and
confirmation process is undertaken."
The Court will conduct a hearing on Appaloosa's request on
February 24, 2012 at 10:00 a.m. (EST). Objections must be filed
so as to be actually received no later than February 17, 2012 at
4:00 p.m. (prevailing Eastern Time).
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
DYNEGY INC: Files Report on Facilities; U.S. Bank Balks
-------------------------------------------------------
Dynegy Holdings LLC and its affiliates submitted to the Bankruptcy
Court a status update regarding regulatory matters and transition
of operational control of their facility leases.
As previously reported in the TCR, the Debtors are seeking to
reject "Facility Leases", namely the sale-and-leaseback
transaction pertaining to the Roseton power-generating Units 1 and
2 and Danskammer power-generating Units 3 and 4. The Debtors are
surrendering the Roseton and Danskammer facilities pursuant to the
terms of a restructuring support agreement entered into with key
parties.
They noted that one of the central issues in the Chapter 11 cases
is the rejection of the lease documents connected to the Facility
Leases and the characterization of the claims, if any, arising
from rejection. The Debtors further noted that they have
publicly and consistently maintained since the Petition Date that
the Facility Leases are burdensome and that the Debtors'
continued possession and operation of the facilities is for the
benefit and at the expense of the PSEG Entities and the Pass-
Through Certificate Holders and has been undertaken solely to
comply with applicable non-bankruptcy rules and regulations and
preserve the value of the assets of Debtors Dynegy Roseton,
L.L.C. and Dynegy Daskammer, L.L.C.
As previously reported, the Court entered a stipulated order
granting the Debtors' request to reject the Lease Documents.
Subsequently, the Court entered an amended stipulated order.
The Debtors revealed that on November 8, 2011, they filed an
application with the Federal Energy Regulatory Commission asking
for approval to relinquish control of the Facility Leases and for
control to revert to the "Owner Lessors." They also revealed
that on the same day they filed a verified petition with the New
York State Public Service Commission asking for, among other
things, approval of the reversion of the Facility Leases and
control over their operations to the Owner Lessors.
On January 17, 2012, the Debtors filed a request for abeyance
with the FERC on the basis that discussions among the parties
which may resolve some or all of the issues raised in the FERC
filings are ongoing. Also on January 17, 2012, the Debtors made
a similar filing with the NYPSC seeking an abeyance.
From and after the Petition Date, none of the Debtors have any
financial obligations, including rent payment obligations,
arising under the leases which relate to or otherwise result,
arise or stem from the Debtors' possession and operation of the
Facility Leases to any of the PSEG Entities, the Pass-Through
Certificate Holders or the Indenture Trustee.
The PSEG Entities, including the Owner Lessors, have
affirmatively refused to accept physical possession and
operational control of the facilities, the Debtors relate.
However, the Debtors told the Court that the PSEG Entities have
indicated their desire that the facilities be turned over to the
Pass-Through Certificate Holders or their designee. The Pass-
Through Certificate Holders, in turn, have indicated their desire
that the Leased Facilities be physically turned over to them, and
the PSEG Entities and the Debtors are working diligently to
satisfy that desire.
The Debtors said that while they are prepared to continue to
cooperate with the PSEG Entities and the Pass-Through Certificate
Holders to accomplish the physical turnover of the Leased
Facilities to a Transferee, the continued cooperation cannot be
construed and should not be asserted as a basis to create or
increase any claim of either the PSEG Entities or the Pass-
Through Certificate Holders against any of the Debtors simply
because the Roseton and Danskammer remain in physical possession
and operational control of the facilities until a turnover
occurs.
U.S. Bank Responds
U.S. Bank National Association complained that the document the
Debtors submitted:
(1) provides an incomplete and misleading representation of
current regulatory proceedings and related talks between
the Debtors and U.S. Bank; and
(2) attempts to litigate unrelated issues that are not before
the Court.
On behalf of U.S. Bank, George A. Davis, Esq., at Cadwalader
Wickersham & Taft LLP, in New York, explained that the Debtors
are unable to cede control of or abandon the leased assets at the
Roseton and Danskammer facilities because the Federal Power Act
requires that they first obtain FERC approvals to do so,
regardless of the identity of the proposed transferee. The
Debtors are not operating the Roseton and Danskammer plants for
the benefit of the PSEG Entities or the Pass Through Certificate
Holders; they are operating those facilities because if they stop
doing so before receiving FERC approval they are subject to fines
of up to $1,000,000 per day. Furthermore, any action by the
Debtors that threatens system-wide reliability -- like shutting
down the facilities or transferring them to an entity that is not
licensed to operate them -- would subject them to even greater
regulatory fines and other penalties. Continued possession and
control is for the Debtors' benefit, and no one else's, Mr. Davis
told the Court. A transfer of the Roseton and Danskammer
facilities to the Pass Through Certificate Holders may be
feasible, he said. If a transfer occurs, the Debtors may be
relieved of their regulatory obligations to continue operating
the Roseton and Danskammer facilities -- relief which the Pass
Through Certificate Holders and U.S. Bank have no obligation to
provide under the Bankruptcy Code, other applicable law or any
agreement with the Debtors, Mr. Davis asserted.
U.S. Bank also related that the Debtors announced on the record
at the December 16, 2011 hearing before the Court that they had
reached an agreement with Central Hudson that requires the
Debtors to continue operating the Roseton and Danskammer
facilities until they obtain regulatory approval not to do so.
The Debtors also entered into an agreement with the PSEG Entities
providing, among other things, that the debtors will "(x) operate
the Roseton and Danskammer facilities until they obtain
regulatory approval to not do so, and (y) not contend that [the
PSEG Entities] has an obligation to operate the Roseton and
Danskammer facilities." The Debtors, Mr. Davis pointed out,
therefore have bound their own hands: they must stay in
possession and control of the leased assets for the foreseeable
future to live up to their postpetition agreements with third
parties, not the Indenture Trustee.
Mr. Davis also argued that the Bankruptcy Code and applicable
bankruptcy law are clear regarding the Debtors' continued
obligations under the financing leases unless and until they
actually relinquish possession and control of the leased assets.
"The Debtors' continuing misstatements regarding their regulatory
obligations and the reasons they remain in possession and control
of the leased assets at the Roseton and Danskammer facilities
only serve to confuse the issues that remain to be addressed in
this case and delay resolution of those issues," Mr. Davis said.
However, U.S. Bank said it hopes that the Debtors' future status
updates to the Court will limit themselves to the actual
regulatory proceedings they purport to summarize, avoid making
misstatements of fact and assertions unrelated to those
regulatory proceedings, and forestall the need for U.S. Bank and
other parties-in-interest to file responsive pleadings to correct
the record.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
DYNEGY INC: Examiner Submits Work Plan; To Cost $4MM
----------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed
Susheel Kirpalani, Esq. as Examiner in the Chapter 11 cases of
Dynegy Holdings, LLC, and its debtor affiliates on Jan. 11, 2012.
The appointment was subsequently approved by Judge Cecelia Morris
of the U.S. Bankruptcy Court for the Southern District of New
York.
Mr. Kirpalani is a partner of the firm of Quinn Emanuel Urquhart
& Sullivan, LLP, in New York, and has worked in the Chapter 11
cases of other billion-dollar companies like Lehman Brothers
Holdings, Inc., where he serves as special counsel for the
official committee of unsecured creditors appointed in that case,
Enron Corp., Refco Inc., Station Casinos, Inc., Idearc, Inc.,
among others.
To recall, U.S. Bank National Association in early November last
year filed a motion for the appointment of an examiner to
investigate and report on the conduct of the Debtors and their
directors in connection with certain prepetition restructuring
transactions.
U.S. Bank alleged that the Prepetition Restructuring Transactions
resulted in a significant portion of Dynegy Holdings' assets
being transferred to its non-Debtor parent in exchange for an
unsecured "undertaking" worth less than two thirds of the
$1.25 billion value Dynegy Holdings ascribed to those assets.
Mr. Kirpalani may be reached at:
Susheel Kirpalani, Esq.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
51 Madison Ave., 22nd Floor
New York, NY 10010
Tel: (212) 849-7000
Fax: (212) 849-7100
E-mail: susheelkirpalani@quinnemanuel.com
The Work Plan
Susheel Kirpalani, Esq., the Chapter 11 examiner for Dynegy
Holdings LLC and its affiliates, reveals that one of his first
priorities will be to ascertain the volume and breadth of
documents he will need to review to complete the Investigation.
He says that currently, he has been given access to just a small
subset of the types of documents that will be made available to
him through the course of his investigation. Based on this
limited production and his discussions with the parties, the
Examiner estimates that the quantity of data will include
thousands of emails, terabytes of other electronic data, and
dozens of boxes of hard copy documents.
The Examiner notes that while he has asked for documents from
certain parties, he intends to supplement the materials provided
with additional independent analysis, including depositions.
In furtherance of the investigation, the Examiner filed the Rule
2004 Motion to serve subpoenas on any person or entity that the
Examiner identifies as potentially having documents relevant to
the Investigation. He informs the Court that he intends to
bifurcate this facet of the Investigation into stages.
First, the Examiner will seek documents and other information
from the Debtors, the Debtors' non-Debtor parent and co-Plan
sponsor Dynegy Inc., and their respective current and former
officers, directors, and professionals. To ensure faithful
compliance with the Examiner's information requests, the Examiner
intends to serve Rule 2004 subpoenas on entities that are not
already required to produce information pursuant to the Examiner
Order. This includes the Debtors' former advisors, Dynegy Inc.,
and individuals who are not expressly bound by the Examiner
Order.
Once information has been gathered and a thorough review is
underway, the Examiner will identify any additional third parties
that may be in possession of information relevant to the
Investigation. The Examiner will then serve Rule 2004 subpoenas
and document requests on those parties in order to facilitate
prompt production of information.
With regard to his fees, the Examiner tells the Court that he
currently estimates total fees for him and his advisors will
aggregate approximately $3 million to $4 million, assuming
cooperation is provided and the report can be timely filed as a
result. The Examiner will promptly advise the Court and the
parties if costs are expected to vary significantly from this
preliminary estimate as the Investigation proceeds.
Clarification on Order
Dynegy Holdings LLC and its affiliates ask the Court to clarify if
its previous order granting U.S. Bank National Association's
request for the appointment of a Chapter 11 examiner applies to
the privilege protections pursuant to Rule 502(d) of the Federal
Rules of Evidence to information shared with the examiner's agents
and if the relief applies nunc pro tunc to January 12, 2012, the
date when the examiner was appointed.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000)
ENER1 INC: Battery Maker Seeks Chapter 11 Protection
----------------------------------------------------
Ener1 Inc., the owner of a company that received a $118 million
U.S. Energy Department grant to make electric-car batteries, filed
for bankruptcy protection (Bankr. S.D.N.Y. Case No. 12-10299) to
implement a prepackaged plan of reorganization.
The Plan has been unanimously accepted by all of Ener1's impaired
creditors.
Ener1 Inc. (OTC: HEVV) is a New York-based developer of compact,
lithium-ion-powered energy storage solutions for applications in
the electric utility, transportation and industrial electronics
markets.
The Company disclosed assets of $73.9 million and debt of
$90.5 million as of Dec. 31. It owes $57.3 million on 8.25%
senior notes and $11.2 million under a line of credit provided by
Bzinfin S.A.
Under its restructuring, the Debtor will reduce funded debt from
$91 million to $46 million, under a plan where debt holders will
receive newly issued debt and equity.
Ener1 has been affected by competing battery developers in China
and South Korea, such as LG Chem, which generally have a lower
cost manufacturing base and lower labor and raw material costs.
It added that the demand for EVs did not develop as quickly as
anticipated, which in turn harmed the business and its prospects.
Prospects were further eroded when Norway-based Think Holdings AS
stopped producing electric cars and filed for bankruptcy in June
2011.
"This was a difficult, but necessary, decision for our company.
We are extremely pleased to have the strong support of our primary
investors and lenders to substantially reduce the Company's debt,"
stated Ener1 CEO Alex Sorokin. "Their support demonstrates that
our business partners have an appreciation for our future business
opportunities in providing energy storage solutions for electric
grid, transportation and industrial applications. We expect the
new funding to provide ample liquidity for our subsidiaries to
meet their ongoing obligations to employees, customers and
suppliers."
"We moved aggressively to reduce costs and shift focus when the
marketplace did not evolve as quickly as anticipated. Our
business plan was impacted when demand for lithium-ion batteries
slowed due to lower-than-expected adoption for electric passenger
vehicles," continued Sorokin. "That pressure was exacerbated by
volatility in the debt and equity markets that further limited our
borrowing ability and the loss of a major customer, Think Global,
which filed for bankruptcy in June 2011, and for which we were
exclusively providing commercial lithium-ion battery packs. We
believe that the restructuring plan will enable us to address our
business and financial challenges comprehensively, quickly and
efficiently, and position us to compete much more effectively in
the energy storage market."
Bloomberg News notes that Ener1 makes lithium-ion batteries for
plug-in electric cars, which were scrutinized by federal auto-
safety officials after a General Motors Co. Chevrolet Volt caught
fire, people familiar with the probe said in November. A two-
month federal safety investigation cleared the Volt of danger, and
GM is beginning a marketing effort to tout the car as safe and
innovative.
Bloomberg adds that under President Barrack Obama's economic
stimulus package, the Energy Department awarded grants in an
attempt to create a U.S. electric-car industry. Ener1's EnerDel
unit, based in Indianapolis, was the grant recipient and has
received about $55 million so far.
The Debtor said in a court filing that for the 30-day period
following the petition date, cash receipts will total $4 million
and cash disbursements (excluding professional fees) will total
$5.2 million.
Chapter 11 Exit in 45 Days
Ener1 has reached an agreement with its primary investors and
lenders on a restructuring plan that will significantly reduce its
debt and provide up to $81 million to recapitalize the Company to
support its long-term business objectives and strategic plan.
Ener1 expects to complete the restructuring process in about 45
days.
Under the plan, Ener1 may obtain as much as $81 million of new
capital and reduce existing debt while maintaining operations,
according to court papers. None of Ener1's foreign or domestic
subsidiaries sought protection.
The plan provides for a restructuring of the Company's long-term
debt and the infusion of up to $81 million of equity funding. Of
this amount, a new debtor-in-possession credit facility of up to
$20 million will be available upon Court approval to support
working capital needs during the restructuring. The balance, for
a total of up to $81 million, will be available over the four
years following Court approval of the restructuring plan and
subject to the satisfaction of certain terms and conditions.
In addition to the restructuring of long-term debt, the claims of
Ener1's general unsecured creditors will be unimpaired and paid by
the Company under the restructuring plan. Under the plan, all of
the Company's existing common stock will be canceled, the long-
term debt holders will be receiving a combination of cash, a new
term loan and new common stock in exchange for their claims, and
new preferred stock will be issued to the provider of the post-
petition and exit funding. Suppliers to the Company will be paid
under normal terms for goods and services provided after the
Chapter 11 filing date. Payments for goods and services provided
directly to the Company prior to the filing date have been
previously settled or will be paid pursuant to the restructuring
plan when it is approved by the Court.
All existing common stock will be canceled and new preferred stock
will be issued to the provider of funding for the bankruptcy case.
Current equity holders will not receive any distributions.
The Company's common stock was delisted from NASDAQ on Dec. 12,
2011.
Exit Financing
The aggregate funding to be provided under an equity commitment
agreement will equal up to $81 million less the outstanding
balance under the DIP loan facility. Of that amount, $50 million
will be provided periodically by Bzinfin over a period of 24
months following the effective date of the plan. Bzinfin and
other parties will severally invest their pro rata share of up to
$31 million through the purchase of preferred stock from time to
time through 2013 to 2015.
Reed Smith LLP is Ener1's legal adviser and its financial adviser
is Houlihan Lokey Capital Inc.
No Foreign Subsidiaries Affected
None of the Company's foreign or domestic subsidiaries has
initiated reorganization cases, and they are not expected to be
adversely impacted by the legal proceedings.
The restructuring plan provides for the continued normal operation
of the Company's subsidiary businesses, including EnerDel,
EnerFuel, NanoEner, Emerging Power and Ener1 Korea, all of which
will honor their customer commitments and will continue to pay
their suppliers for goods and services as usual.
The Company's operating subsidiaries do not plan to reduce
employment levels as a direct result of the filing, although they
will continue to monitor market conditions and make adjustments to
the workforce as appropriate.
A court filing says that the Debtor has assets outside the United
States -- comprising 94% ownership of Ener1 Korea Inc., located in
Chugju-si, Chungbuk, Korea, with book value of $60 million.
ENER1 INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Ener1, Inc.
1540 Broadway
Suite 40D
New York, NY 10036
Bankruptcy Case No.: 12-10299
Type of Business: Ener1 Inc. has three business lines, which
the company conducts through three operating
subsidiaries. EnerDel, an 80.5% owned
subsidiary, which is 19.5% owned by Delphi,
develops Li-ion batteries, battery packs and
components such as Li-ion battery electrodes
and lithium electronic controllers for lithium
battery packs. EnerFuel develops fuel cell
products and services. NanoEner develops
technologies, materials and equipment for nano-
manufacturing.
Web site: http://www.ener1.com/-
Chapter 11 Petition Date: Jan. 26, 2012
Court: U.S. Bankruptcy Court
Southern District of New York
Judge: Martin Glenn
Debtor's
Counsel : Edward J. Estrada, Esq.
Michael J. Venditto, Esq.
REED SMITH LLP
599 Lexington Ave
28th Floor
New York, NY 10022
Tel: (212) 549-0247
Fax: (212) 521-5450
E-mail: eestra@reedsmith.com
mvenditto@reedsmith.com
Debtor's
Financial
Advisor : HOULIHAN LOKEY CAPITAL
Debtor's
Claims and
Noticing
Agent : THE GARDEN CITY GROUP
Estimated Assets: $73,900,000 as of Jan. 25, 2012
Estimated Debts: $90,538,529 as of Jan. 25, 2012
The petition was signed by Alex Sorokin, interim chief executive
officer.
Ener1, Inc.'s List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Liberty Harbor Special Senior Notes $39,477,738
Investments, LLC
c/o Goldman Sachs Asset
Management, L.P.
Attn: Thomas Secor
200 West Street
New York, NY 10282
Itochu Corporation Tokvu Senior $10,253,336
Section Convertible
Attn: Hiroaki Murase Notes
Kunihiro Kawakati
5-1, Kita-Aoyama 2-Chome
Tokyo, 107-8077 Japan
Goldman Sachs Palmetto Senior Notes $5,639,798
State Credit Fund
c/o Goldman Sachs Asset
Management, L.P.
Attn: Thomas Secor
200 West Street
New York, NY 10282
Whitebox Multi Strategy Senior Note $7,328,242
Partners, L.P.
c/o Whitebox Advisor LLC
Attn: Dan Philp
Mark Strefling
3033 Excelsior Boulevard
Suite 300
Minneapolis, MN 55416
Whitebox Concentrated Senior Notes $3,406,564
Convertible Arbitr
c/o Whitebox Advisor LLC
Attn: Dan Philp
Mark Strefling
3033 Excelsior Boulevard
Suite 300
Minneapolis, MN 55416
Pandora Select Partners, L.P. Senior Notes $2,824,949
c/o Whitebox Advisor LLC
Attn: Dan Philp
Mark Strefling
3033 Excelsior Boulevard
Suite 300
Minneapolis, MN 55416
Whitebox Creditors Senior Notes $2,259,065
Arbitrage Partners
c/o Whitebox Advisor LLC
Attn: Dan Philp
Mark Strefling
3033 Excelsior Boulevard
Suite 300
Minneapolis, MN 55416
Whitebox Special Senior Note $1,129,979
Opportunities Fund LP
c/o Whitebox Advisor LLC
Attn: Dan Philp
Mark Strefling
3033 Excelsior Boulevard
Suite 300
Minneapolis, MN 55416
Charles Gassenheimer Employment $1
Agreement
Credit Suisse Securities Engagement $1
(USA) LLC Agreement
Florida Department of $1
Revenue
Indiana Department of $1
Revenue
Internal Revenue Service $1
Centralized Insolvency
Operations
NYC Department of Finance $1
NYS Department of Taxation $1
and Finance
Relational, LLC Equipment Lease $1
Universal Tool & Non-Residential $1
Engineering Company Real Property
EVERGREEN ENERGY: Ch. 7 Trustee Takes Over; No More Employees
-------------------------------------------------------------
On Jan. 23, 2012, Evergreen Energy, Inc., and nine of its
subsidiaries filed a voluntary petition for relief under Chapter 7
of the United States Bankruptcy Code (Bankr. D. Del. Case Nos. 12-
10289 to 12-10298).
Effective as of the date of the Bankruptcy Filing, a Chapter 7
trustee assumed control of the Company. The assets of the Company
will be liquidated in accordance with the Code.
The Company also owns and/or controls interests in several non-
operating, dormant companies. These companies were formed in the
normal course of business, but do not currently have any material
assets, liabilities and/or operations. As a consequence, these
subsidiaries did not file for relief under the Code.
The bankruptcy filing triggers Events of Default under all of
Evergreen's and certain subsidiaries' outstanding debt obligations
having an outstanding balance, as of Jan. 23, 2012, of
approximately $4.6 million.
With the installation of the Chapter 7 trustee and concurrent with
the Bankruptcy Filing, on Jan. 23, 2012, the employment of William
G. Laughlin, Executive Vice President, General Counsel and
Secretary, and of Diana L. Kubik, Executive Vice President and
Chief Financial Officer were terminated. As a result, Evergreen
no longer has any employees.
Also, with the installation of the Chapter 7 trustee and
concurrent with the Bankruptcy Filing, on Jan. 23, 2012, directors
Thomas H. Stoner, Jr., Dr. Robert S. Kaplan, Richard B. Perl and
Chester N. Winter resigned as members of the Evergreen's Board of
Directors. The Evergreen has no current members of the Board of
Directors.
Evergreen Energy Inc. reported a net loss of $6.8 million on
$325,000 of total operating revenue for the nine months ended
Sept. 30, 2011, compared with a net loss of $18.0 million on
$303,000 of total operating revenue for the same period of 2010.
The Company's balance sheet at Sept. 30, 2011, showed
$20.3 million in total assets, $18.9 million in total
liabilities, and stockholders' equity of $1.4 million.
Denver, Colo.-based Evergreen Energy Inc.
-- http://www.evgenergy.com/-- offers environmental solutions for
energy production and generation industries, primarily through its
patented clean coal technology, K-Fuel(R).
EVERGREEN SOLAR: Feb. 1 Hearing on Case Dismissal, Conversion Set
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
rescheduled until Feb. 1, 2012, at 11:30 a.m., the hearing to
consider the motion to dismiss or convert the Chapter 11 case of
Evergreen Solar, Inc. to one under Chapter 7 of the Bankruptcy
Code.
As reported in the Troubled Company Reporter on Dec. 23, 2011, the
Official Committee of Unsecured Creditors, in its motion, asked
that, if the case were dismissed, the Court find that holders of
unsecured notes would receive approximately $3,750,000 in
preference proceeds returned under Section 349(b) of the
Bankruptcy Code.
About Evergreen Solar
Evergreen Solar, Inc. -- http://www.evergreensolar.com/--
develops, manufactures and markets String Ribbon solar power
products using its proprietary, low-cost silicon wafer technology.
The Company's patented wafer manufacturing technology uses
significantly less polysilicon than conventional processes.
Evergreen Solar's products provide reliable and environmentally
clean electric power for residential and commercial applications
globally.
The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge
Mary F. Walrath. The Company's balance sheet at April 2, 2011,
showed $373,972,000 in assets, $455,506,000 in total liabilities,
and a stockholders' deficit of $81,534,000.
Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham
McCutchen LLP, serve as general bankruptcy counsel to the Debtor.
Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski
Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial
LLC serves as exclusive marketing and sales agent. Klehr Harrison
Harvey Branzburg serves as special conflicts counsel. Zolfo
Cooper LLC is the financial advisor. UBS Securities, LLC, serves
as investment banker. Epiq Bankruptcy Solutions has been tapped
as claims agent.
In conjunction with the Chapter 11 filing, the Company entered
into a restructuring support agreement with certain holders of
more than 70% of the outstanding principal amount of the Company's
13% convertible senior secured notes. As part of the bankruptcy
process the Company will undertake a marketing process and will
permit all parties to bid on its assets, as a whole or in groups
pursuant to 11 U.S.C. Sec. 363. An entity formed by the
supporting noteholders, ES Purchaser, LLC, entered into an asset
purchase agreement with the Company to serve as a 'stalking-horse"
and provide a "credit-bid" pursuant to the Bankruptcy Code for
assets being sold.
The supporting noteholders are represented by Michael S. Stainer,
Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer &
Feld LLP, in New York.
An official committee of unsecured creditors has retained Pepper
Hamilton and Kramer Levin Naftalis & Frankel as counsel. The
Committee tapped Garden City Group as communications services
agent.
Evergreen Solar is at least the fourth solar company to seek court
protection from creditors since August 2011. Other solar firms
are start-up Spectrawatt Inc., which also filed in August,
Solyndra Inc., which filed early in September, and Stirling Energy
Systems Inc., which filed for Chapter 7 bankruptcy late in
September.
At an auction in November, Evergreen Solar sold some of its core
assets to Max Era Properties Limited.
EXIDE TECHNOLOGIES: Time to Remove FDEP Suit Extended to Feb. 29
----------------------------------------------------------------
Exide Technologies sought and obtained a court order extending to
February 29, 2012, the deadline for filing a notice or petition
to remove the lawsuit filed by the Florida Department of
Environmental Protection.
The case, presently styled State of Florida Dept. of Environ.
Protection v. Exide Technologies, Inc., Case No. 2009-CA-8357,
was filed in the Circuit Court of Orange County, in Florida.
Exide sought the extension to further investigate the claims
asserted in the lawsuit and to determine whether removal of the
lawsuit is appropriate, according to its lawyer, Bruce Grohsgal,
Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington,
Delaware.
Mr. Grohsgal said the company believes the claims arose before it
filed for bankruptcy protection; are enjoined or barred by prior
court orders; and are discharged pursuant to the order confirming
its Joint Plan of Reorganization.
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: Has Stipulation on Trenton City Claim
---------------------------------------------------------
Exide Technologies inked an agreement, which calls for the
settlement of Claim No. 5573 filed by the city government of
Trenton, New Jersey.
Under the agreement, the city government will receive an allowed
non-priority, general unsecured Class P4-A claim for $500,000 to
be distributed in stock in accordance with the terms of Exide's
Joint Plan of Reorganization.
In exchange, the city government agreed to release Exide from any
liability, and to withdraw its other claims asserted in the
company's bankruptcy case.
A full-text copy of the agreement is available without charge at
http://bankrupt.com/misc/Exide_StipTrenton.pdf
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: Status Report on Suit vs. EnerSys Due Jan. 30
-----------------------------------------------------------------
Judge Kevin Carey of the U.S. Bankruptcy Court for the District
of Delaware ordered the lawyers of Exide Technologies to file a
status report on or before January 30, 2012, in connection with
the lawsuit the company filed against EnerSys Delaware Inc.
Failure to do so may result in dismissal of the lawsuit or a
mandatory court appearance to determine whether the lawsuit
should be dismissed for lack of prosecution or whether sanctions
should be imposed for not complying with the district judge's
order.
Exide filed the lawsuit to seek declaratory judgment that the
rights of EnerSys under their pre-bankruptcy agreement constitute
a claim that was discharged by confirmation of Exide's Joint Plan
of Reorganization. The agreement refers to EnerSys' license to
use the Exide trademark on industrial batteries.
The complaint came after the U.S. Court of Appeals for the Third
Circuit issued a ruling that the agreement was not an executory
contract because EnerSys performed its obligations under that
agreement prior to Exide's bankruptcy filing.
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: Files 3rd Quarter 2011 Summary Report
---------------------------------------------------------
Exide Technologies
Post-Confirmation Quarterly Summary Report
Unaudited Condensed Balance Sheets
As of September 30, 2011
(in thousands)
Assets
Current Assets:
Cash $27,246
Accounts receivables, net 126,294
Intercompany receivables 18,444
Inventories 208,123
Prepaid expenses & other 79,985
--------------
Total current assets 460,092
--------------
Property, plant and equipment, net 275,578
--------------
Other Assets:
Other intangibles, net 49,086
Investment in affiliates 1,375
Intercompany notes receivables 201,087
Deferred financing costs and other 68,412
--------------
TOTAL ASSETS $1,055,630
==============
Liabilities and Stockholders' Equity
Current Liabilities
Current maturities of long-term debt $293
Accounts payable 135,215
Accrued expenses 37,080
Accrued interest 10,173
Restructuring reserve 5,299
Liability for warrants
Warranty liability 11,810
--------------
Total current liabilities 199,870
Long-term debt 738,851
Noncurrent retirement obligations 58,718
Other noncurrent liabilities 58,353
--------------
Total liabilities 1,055,792
Total stockholder's equity
(162)
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,055,630
==============
Exide Technologies
Post-Confirmation Quarterly Summary Report
Unaudited Schedule of Cash Flows
Quarter Ended September 30, 2011
(in thousands)
Beginning Cash Balance $57,614
Cash Receipts:
Collection of accounts receivable 372,709
Proceeds from equity issuance
Proceeds from sale of Debtor's assets
All other cash receipts 9,379
--------------
Total Cash Receipts 382,087
--------------
Cash Disbursements:
Disbursements made under the Plan, excluding
payments to bankruptcy professionals
Disbursements made to bankruptcy professionals 588
Repayment of Term Loans
All other disbursements made
in the ordinary course 411,867
--------------
Total Cash Disbursements 412,455
--------------
Ending Cash Balance $27,246
==============
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.
FIBERTOWER: Receives Nasdaq Delisting Notice
--------------------------------------------
FiberTower Corporation has engaged the Corporate Finance &
Restructuring Group of FTI Consulting, Inc., to assist the Company
with identifying and evaluating financial and strategic
alternatives to maximize value for the Company's stakeholders.
The Company disclosed that on Jan. 19, 2012, it received a letter
from the Listing Qualifications Department of the Nasdaq Stock
Market (Nasdaq) notifying FiberTower of its intent to delist the
Company's securities from the Nasdaq. The letter provides that,
absent an appeal of the staff's determination by the Company,
trading in the Company's common stock will be suspended at the
opening of business on Jan. 30, 2012, and Nasdaq will file a Form
25-NSE with the Securities and Exchange Commission to remove the
Company's securities from listing and registration on Nasdaq.
FiberTower previously announced that it received a letter from the
Nasdaq stating that it no longer complied with the rules required
for continued listing on Nasdaq under Nasdaq Listing Rule
5250(c)(1). FiberTower was provided with an initial period of 60
calendar days during which it could submit a plan to regain
compliance. In accordance with Listing Rule 5810(b), Nasdaq has
notified the Company that failure to submit a plan has made it
subject to delisting.
The Company has the right to appeal the Nasdaq staff's
determination to suspend trading in the Company's securities and
its delisting and deregistration from Nasdaq, but does not expect
to do so. Effective Monday, Jan. 30, 2012 the Company anticipates
that its common stock will commence trading under the symbol FTWR
on the OTC Pink-Limited Information Tier, operated by OTC Markets
Group. The Company's common stock will cease trading on Nasdaq at
the opening of the market on Monday, January 30, 2012.
About FiberTower
FiberTower -- http://www.fibertower.com/-- is a backhaul and
access services provider focused primarily on the wireless carrier
market. With its extensive spectrum footprint in 24 GHz and 39
GHz bands, carrier-class fiber and microwave networks in 13 major
markets and master service agreements with nine U.S. wireless
carriers, FiberTower is an alternative carrier for wireless
backhaul. FiberTower also provides backhaul and access service to
government and enterprise markets.
FILENE'S BASEMENT: Court Approves Skadden Arps as Counsel
---------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court approved
Filene's Basement's motions to retain Skadden Arps, Slate, Meagher
& Flom as bankruptcy counsel; Young Conaway Stargatt & Taylor as
conflicts counsel and Alvarez & Marsal North America to provide
each of the Debtors with a president and chief operating officer,
a chief financial officer and certain additional personnel and
designating Jeff Feinberg as each of the Debtors' president and
chief operating officer and Gary Binkoski as each of the Debtors'
chief financial officer.
About Filene's Basement & Syms Corp.
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
disclosed assets of $236 million, including real estate of $97.7
million, and liabilities of $94 million, including $31.1 million
owing on a revolving credit with Bank of America NA as agent. In
addition, there were $11.1 million in letters of credit
outstanding on the revolver.
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.
FILENE'S BASEMENT: Hearing on Bid for Examiner Delayed
------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that a Delaware
bankruptcy judge on Tuesday postponed a hearing on Syms Corp.'s
bid for an examiner to probe alleged misconduct by the defunct
retailer's management to allow for talks between the debtors and
disgruntled minority shareholders on a Chapter 11 plan.
As reported in the Troubled Company Reporter on Dec. 27, 2011,
Syms Corp. and its affiliated debtors ask the U.S. Bankruptcy
Court for the District of Delaware to appoint an examiner.
The examiner will investigate possible estate causes of action
against their directors and officers, and others as the examiner
might determine, for breach of fiduciary duty, mismanagement,
waste and any similar claims arising out of the directors' and
officers' stewardship of the Debtors prior to the petition date.
The investigation would cover the time period from June 2009, when
Syms acquired the assets and business of its Debtor subsidiary,
Filene's Basement LLC, until Nov. 2, 2011, the date the Debtors
commenced these chapter 11 cases.
Dow Jones' DBR Small Cap reports that Syms Corp. is pushing for a
judge to consider appointing an examiner in its bankruptcy case
soon, cautioning that putting off the potential investigation any
longer could harm the company's Chapter 11 plan process.
About Filene's Basement & Syms Corp.
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
disclosed assets of $236 million, including real estate of $97.7
million, and liabilities of $94 million, including $31.1 million
owing on a revolving credit with Bank of America NA as agent. In
addition, there were $11.1 million in letters of credit
outstanding on the revolver.
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.
FULL CIRCLE: Court Approves Dixon Hughes as Tax Accountant
----------------------------------------------------------
Full Circle Dairy LLC sought and obtained permission from the
court to employ Dixon Hughes Goodman LLP as tax accountant.
The scope of the services, duties and responsibilities of Dixon
Hughes include the filing of the 2010 tax returns for the Debtor,
and any associated tax schedules, K-1 schedules, amendments or
restatements of the return, or items of a related matter as
requested by the Debtor.
Matthew Edelman -- info@dhgllp.com -- a member of Dixon Hughes,
assures the court that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
About Full Circle Dairy
Full Circle Dairy, LLC, operates a dairy in Lee, Florida. It
filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case
No. 10-06895) on Aug. 9, 2010. Robert D Wilcox, Esq., at Brennan,
Manna & Diamond, PL, in Jacksonville, Fla., represents the Debtor.
The official committee of unsecured creditors in the Chapter 11
case has tapped John T. Rogerson, III, Esq., at Volpe, Bajalia,
Wickes, Rogerson & Wachs, P.A., in Jacksonville, Fla., as counsel.
The Company disclosed $14,281,637 in assets and $12,879,703 in
liabilities as of the Petition Date.
GARDENS OF GRAPEVINE: Court Confirms Reorganization Plan
--------------------------------------------------------
Judge D. Michael Lynn of the U.S. Bankruptcy Court for the
Northern District of Texas has confirmed The Gardens of Grapevine
Development, L.P., and The Gardens of Grapevine Development GP,
LLC's Second Amended Joint Chapter 11 Plan of Reorganization dated
Dec. 15, 2011.
As reported in the Troubled Company Reporter on Jan. 13, 2012,
the Debtors filed the Plan to provide for the continued sale
and/or development of their most significant asset, approximately
192 acres of land in Texas known as the Gardens of Grapevine. The
Plan specifically contemplates:
* The sale and/or development of the Property over a period of
five years to maximize value of the Property;
* Additional funding of up to $250,000 from the Palmeiros or
one of their entities in order to pay Allowed Administrative
Claims;
* Contribution of up to $2.5 million by the Palmeiros from the
sale of their house in Pebble Beach, California, to fund
interest payments on Secured Claims. The contribution will
be secured by a second lien on the Pebble Beach house until
it is sold;
* Satisfaction of all Allowed Secured Claims in accordance with
terms of the Plan and applicable state law from the net
proceeds of the sales of the Property;
* Distribution to holders of Allowed Unsecured Claims of all
net proceeds received from the sales of the Property after
payment of Allowed Secured, Priority and Administrative
Claims;
* Cancellation of the limited partnership interests in GOG and
the member interests in GOG-GP; and
* The issuance of new limited partnership interests in GOG and
member interests in GOG-GP to Lynne Palmeiro in consideration
for her contribution of her half interest in the Pebble Beach
House as part of the $2.5 million contribution and in
satisfaction of her half interest in the roughly $10 million
owed to the Palmeiros in loans by GOG.
BB&T's secured claim of $19,605,884 will be satisfied by the
issuance of a new promissory note with a term of two years from
the Effective Date of the Plan.
Compass Bank's allowed secured claim of $5,600,000 will be
satisfied by the issuance of a new promissory note with a term of
five years from the Effective Date of the Plan.
Amegy Bank's allowed secured claim of $2,897,695 will be satisfied
by the issuance of a new promissory note with a term of five years
from the Effective Date of the Plan.
A copy of the Plan Order is available for free at:
http://bankrupt.com/misc/GARDENSGRAPEVINE_plan_order.pdf
About Gardens of Grapevine
The Gardens of Grapevine Development, L.P., and The Gardens of
Grapevine Development GP, LLC, filed voluntary Chapter 11
petitions (Bankr. N.D. Tex. Case No. 11-43260) in Fort Worth,
Texas, on June 6, 2011. 50% of GOG-GP and GOG are owned by RP
Financial Holdings LLC, which is jointly owned by Rafael and Lynne
Palmeiro.
Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in
Dallas, Texas, serves as counsel to the Debtor. The Debtor
estimated $50 million to $100 million in assets and $10 million to
$50 million in liabilities as of the Chapter 11 filing.
GARLOCK SEALING: Appeals in Nine Cases Consolidated
---------------------------------------------------
Garlock Sealing Technologies LLC sought and obtained an order from
Judge Leonard P. Stark of the U.S. District Court for the District
of Delaware procedurally consolidating its nine appeals in these
bankruptcy cases:
(1) ACandS, Inc., Case No. 02-12687 (JFK);
(2) Armstrong World Industries, Inc., Case No. 00-04471 (JFK);
(3) Combustion Engineering, Inc., Case No. 03-10495 (JFK);
(4) The Flintkote Company, Case No. 04-11300 (JFK);
(5) Kaiser Aluminum Corp., Case No. 02-10429 (JFK);
(6) Owens Corning, Case No. 00-03837 (JFK);
(7) US Mineral Products Company, Case No. 01-02471 (JFK);
(8) USG Corp., Case No. 01-02094 (JFK); and
(9) W.R. Grace & Co., Case No. 01-01139 (JFK).
The Appeals pending before the District Court arise out from
separate but essentially identical motions filed by Garlock in
each of the nine asbestos-related bankruptcy cases by the
Honorable Judith K. Fitzgerald, United States Bankruptcy Judge for
the Western District of Pennsylvania, sitting by designation in
the United State Bankruptcy Court for the District of Delaware.
Garlock has appealed from identical opinions and orders entered in
each case on October 7, 2011, that denied Garlock's motions.
Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell
LLP, in Wilmington, Delaware -- gwerkheiser@mnat.com -- asserted
that the record relating to Garlock's motions is substantially
identical in all nine Bankruptcy Cases. Garlock believes that the
procedural consolidation of its nine Appeals from the Bankruptcy
Cases will promote judicial economy and efficiency, given the
substantial identity of issues, facts, and parties in the Appeals.
Judge Stark ruled that the deadline for filing Appellee's
answering brief was January 13, 2012, and the Appellant's reply
brief on appeal must be filed by January 27, 2012. The Appeals
will be administered under the first docketed appeal, Civil Action
No. 11-1130-LPS, under the case name "In re Motions for Access of
Garlock Sealing Technologies LLC."
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
stateand 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.
GENERAL MARITIME: Court Fixes Feb. 23 as Claims Bar Date
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has established Feb. 23, 2012, at 5:00 p.m. (prevailing Eastern
Time) as the deadline for any individual or entity to file proofs
of claim against General Maritime Corporation, et al.
The Court also set May 15, 2012, at 5:00 p.m., as the Government
Bar Date.
Proofs of claim must be filed on or before the applicable Bar Date
to:
if by mail:
General Maritime Claims Processing Center
c/o GCG
P.O. Box 9844
Dublin, OH 43017-5744
if by overnight courier:
General Maritime Claims Processing Center
c/o GCG
5151 Blazer Parkway, Suite A
Dublin, OH 43017
if by hand delivery:
United States Bankruptcy Court
Southern District of New York
One Bowling Green, Room 534
New York, NY 10004;
The Court also ordered proofs of claim sent by facsimile, telecopy
or electronic mail will not be accepted.
About General Maritime
New York-based General Maritime Corporation, through its
subsidiaries, provides international transportation services of
seaborne crude oil and petroleum products. The Company's fleet is
comprised of VLCC, Suezmax, Aframax, Panamax and product carrier
vessels. The fleet consisted of 30 owned vessels and three
chartered vessels. The company generates substantially all of its
revenues by chartering its fleet to third-party customers. The
largest customers include major international oil companies, oil
producers, and oil traders such as BP, Chevron Corporation, CITGO
Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess
Corporation, Lukoil Oil Company, Stena AB, and Trafigura.
General Maritime and 56 subsidiaries filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17,
2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer
Levin Naftalis & Frankel LLP, in New York, serve as counsel to the
Debtors. Moelis & Company is the financial advisor. Garden City
Group Inc. is the claims and notice agent.
General Maritime disclosed $1,201,124,132 in assets and
$1,503,375,285 in liabilities as of the Chapter 11 filing.
General Maritime's publicly held securities include 121.5 million
common shares and $300 million in unsecured 12% notes due 2017.
Prepetition, General Maritime reached agreements with its key
senior lenders, including its bank group, led by Nordea Bank
Finland plc, New York Branch as administrative agent, as well as
affiliates of Oaktree Capital Management, L.P., on the terms of a
restructuring. Under terms of the agreements, Oaktree will
provide a $175 million new equity investment in General Maritime
and convert its prepetition secured debt to equity.
In conjunction with the filing, General Maritime has received a
commitment for up to $100 million in new DIP financing from a
group of lenders led by Nordea as administrative agent.
Counsel for Nordea, as the DIP Agent and the Senior Agent, are
Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case
LLP. Counsel for Oaktree Capital Management, the Junior Agent,
are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland &
Ellis, LLP.
The Official Committee of Unsecured Creditors appointed in the
case has retained lawyers at Jones Day as Chapter 11 counsel.
Jones Day previously represented an ad hoc group of holders of the
12% Senior Notes due 2017 issued by General Maritime Corp. This
representation began Sept. 20, 2011, and concluded Nov. 29, 2011,
with the agreement of all members of the Noteholders Committee.
The Creditors Committee also tapped Lowenstein Sandler PC as
special conflicts counsel.
The Noteholders Committee consisted of Capital Research and
Management Company, J.P. Morgan Investment Management, Inc., J.P.
Morgan Securities LLC, Stone Harbor Investment Partners LP and
Third Avenue Focused Credit Fund.
The Creditors Committee is comprised of Bank of New York Mellon
Corporate Trust, Stone Harbor Investment Partners, Delos
Investment Management, and Ultramar Agencia Maritima Ltda.
GENERAL MARITIME: Court Approves Jones Day as Committee's Counsel
-----------------------------------------------------------------
The Hon. Martin Glenn of the U.S. Bankruptcy Court for the
Southern District of New York authorized the Official Committee of
Unsecured Creditors in the Chapter 11 case of General Maritime
Corporation, et al., to retain Jones Day as its counsel.
As reported in the Troubled Company Reporter on Jan. 3, 2012,
Jones Day's hourly rates are:
Partner $625 - $925
Counsel $600 - $725
Associate $325 - $700
Legal Assistant $100 - $275
The TCR also reported that Jones Day won't represent the Committee
in its planned investigation of the Debtors' entry into the
Amended and Restated Credit Agreement, dated May 6, 2011 for a
$200 million secured term loan facility and related transactions
with entities affiliated with Oaktree, and possible litigation
against Oaktree units OCM Administrative Agent LLC and OCM Marine
Investments CTB, Ltd., in connection with the May 2011 Oaktree
Transaction.
To the best of the Committee's knowledge, Jones Day is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About General Maritime
New York-based General Maritime Corporation, through its
subsidiaries, provides international transportation services of
seaborne crude oil and petroleum products. The Company's fleet is
comprised of VLCC, Suezmax, Aframax, Panamax and product carrier
vessels. The fleet consisted of 30 owned vessels and three
chartered vessels. The company generates substantially all of its
revenues by chartering its fleet to third-party customers. The
largest customers include major international oil companies, oil
producers, and oil traders such as BP, Chevron Corporation, CITGO
Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess
Corporation, Lukoil Oil Company, Stena AB, and Trafigura.
General Maritime and 56 subsidiaries filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17,
2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer
Levin Naftalis & Frankel LLP, in New York, serve as counsel to the
Debtors. Moelis & Company is the financial advisor. Garden City
Group Inc. is the claims and notice agent.
General Maritime disclosed $1,201,124,132 in assets and
$1,503,375,285 in liabilities as of the Chapter 11 filing.
General Maritime's publicly held securities include 121.5 million
common shares and $300 million in unsecured 12% notes due 2017.
Prepetition, General Maritime reached agreements with its key
senior lenders, including its bank group, led by Nordea Bank
Finland plc, New York Branch as administrative agent, as well as
affiliates of Oaktree Capital Management, L.P., on the terms of a
restructuring. Under terms of the agreements, Oaktree will
provide a $175 million new equity investment in General Maritime
and convert its prepetition secured debt to equity.
In conjunction with the filing, General Maritime has received a
commitment for up to $100 million in new DIP financing from a
group of lenders led by Nordea as administrative agent.
Counsel for Nordea, as the DIP Agent and the Senior Agent, are
Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case
LLP. Counsel for Oaktree Capital Management, the Junior Agent,
are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland &
Ellis, LLP.
The Official Committee of Unsecured Creditors appointed in the
case has retained lawyers at Jones Day as Chapter 11 counsel.
Jones Day previously represented an ad hoc group of holders of the
12% Senior Notes due 2017 issued by General Maritime Corp. This
representation began Sept. 20, 2011, and concluded Nov. 29, 2011,
with the agreement of all members of the Noteholders Committee.
The Creditors Committee also tapped Lowenstein Sandler PC as
special conflicts counsel.
The Noteholders Committee consisted of Capital Research and
Management Company, J.P. Morgan Investment Management, Inc., J.P.
Morgan Securities LLC, Stone Harbor Investment Partners LP and
Third Avenue Focused Credit Fund.
The Creditors Committee is comprised of Bank of New York Mellon
Corporate Trust, Stone Harbor Investment Partners, Delos
Investment Management, and Ultramar Agencia Maritima Ltda.
GENERAL MARITIME: Perella Weinberg OK'd as Panel's Fin'l Advisor
-----------------------------------------------------------------
The Hon. Martin Glenn of the U.S. Bankruptcy Court for the
Southern District of New York authorized the Official Committee of
Unsecured Creditors in the Chapter 11 case of General Maritime
Corporation, et al., to retain Perella Weinberg Partners LP as its
financial advisor.
As reported in the Troubled Company Reporter on Jan. 6, 2012,
Perella Weinberg will be paid according to this Fee Structure:
(a) A monthly financial advisory fee of $125,000 for each
month of the Engagement, prorated for any partial month,
due and payable in advance commencing on Dec. 1, 2011,
until the earlier of (i) the consummation by the Debtors
of a Transaction or (ii) the termination of the
Engagement. Any Monthly Advisory Fee payable and due
commencing after the sixth month of Perella Weinberg
Partners' engagement will be credited 50% against a
Success Fee.
(b) A success fee greater of (i) $1,000,000 or (ii) 1.25% of
the aggregate Recovery Amount as defined in the
Engagement Letter, payable promptly following the
consummation of a Transaction, provided that the result
of the Transaction provides the Unsecured Creditors with
a recovery in respect of their Claims in an amount more
than $1,000,000 in the aggregate.
(c) Reimbursement of all out-of-pocket expenses.
(d) Additional fees for Perella Weinberg's provision of
expert testimony in any judicial proceeding.
The Committee has agreed to indemnify and to make certain
contributions to Perella Weinberg in accordance with the
indemnification provisions set forth in the Engagement Letter.
Derron S. Slonecker, a partner of Perella Weinberg, attested that
the firm (a) is a "disinterested person" within the meaning of
section 101(14) of the Bankruptcy Code, (b) does not hold or
represent an interest adverse to the Debtors' estates with respect
to the matter on which it is to be employed and (c) has no
connection to the Debtors, their creditors or their related
parties.
Mr. Slonecker disclosed that Perella Weinberg during the 90-day
period immediately before the Petition Date, received $250,657 in
payments from the Debtors.
To the best of the Committee's knowledge, Perella Weinberg
Partners is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
About General Maritime
New York-based General Maritime Corporation, through its
subsidiaries, provides international transportation services of
seaborne crude oil and petroleum products. The Company's fleet is
comprised of VLCC, Suezmax, Aframax, Panamax and product carrier
vessels. The fleet consisted of 30 owned vessels and three
chartered vessels. The company generates substantially all of its
revenues by chartering its fleet to third-party customers. The
largest customers include major international oil companies, oil
producers, and oil traders such as BP, Chevron Corporation, CITGO
Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess
Corporation, Lukoil Oil Company, Stena AB, and Trafigura.
General Maritime and 56 subsidiaries filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17,
2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer
Levin Naftalis & Frankel LLP, in New York, serve as counsel to the
Debtors. Moelis & Company is the financial advisor. Garden City
Group Inc. is the claims and notice agent.
General Maritime disclosed $1,201,124,132 in assets and
$1,503,375,285 in liabilities as of the Chapter 11 filing.
General Maritime's publicly held securities include 121.5 million
common shares and $300 million in unsecured 12% notes due 2017.
Prepetition, General Maritime reached agreements with its key
senior lenders, including its bank group, led by Nordea Bank
Finland plc, New York Branch as administrative agent, as well as
affiliates of Oaktree Capital Management, L.P., on the terms of a
restructuring. Under terms of the agreements, Oaktree will
provide a $175 million new equity investment in General Maritime
and convert its prepetition secured debt to equity.
In conjunction with the filing, General Maritime has received a
commitment for up to $100 million in new DIP financing from a
group of lenders led by Nordea as administrative agent.
Counsel for Nordea, as the DIP Agent and the Senior Agent, are
Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case
LLP. Counsel for Oaktree Capital Management, the Junior Agent,
are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland &
Ellis, LLP.
The Official Committee of Unsecured Creditors appointed in the
case has retained lawyers at Jones Day as Chapter 11 counsel.
Jones Day previously represented an ad hoc group of holders of the
12% Senior Notes due 2017 issued by General Maritime Corp. This
representation began Sept. 20, 2011, and concluded Nov. 29, 2011,
with the agreement of all members of the Noteholders Committee.
The Creditors Committee also tapped Lowenstein Sandler PC as
special conflicts counsel.
The Noteholders Committee consisted of Capital Research and
Management Company, J.P. Morgan Investment Management, Inc., J.P.
Morgan Securities LLC, Stone Harbor Investment Partners LP and
Third Avenue Focused Credit Fund.
The Creditors Committee is comprised of Bank of New York Mellon
Corporate Trust, Stone Harbor Investment Partners, Delos
Investment Management, and Ultramar Agencia Maritima Ltda.
GENERAL MARITIME: Lowenstein Ok'd as Panel's Conflicts Counsel
--------------------------------------------------------------
The Hon. Martin Glenn of the U.S. Bankruptcy Court for the
Southern District of New York authorized the Official Committee of
Unsecured Creditors in the Chapter 11 case of General Maritime
Corporation, et al., to retain Lowenstein Sandler PC as its
conflicts counsel.
As reported in the Troubled Company Reporter on Jan. 4, 2012,
Lowenstein Sandler is representing the Committee in connection
with matters arising in or in connection with the chapter 11 cases
where conflicts prevented Jones Day, the panel's lead counsel,
from representing the Committee.
The current hourly rates for Lowenstein Sandler's professionals
range from $435 to $895 for partners; from $390 to $660 for Senior
Counsel (generally 10 or more years experience); from 350 to $630
for Counsel; from 250 to $40 for Associates (generally less than 6
years experience); and from $145 to $245 for paraprofessionals.
S. Jason Teele, Esq., a member at the firm, attested that
Lowenstein Sandler is "disinterested" within the meaning of
section 101(14) of the Bankruptcy Code and does not represent or
hold an interest adverse to the interest of the Debtors' estates
with respect to the matters with respect to which Lowenstein
Sandler will provide services.
The Court also ordered that if the Committee, prior to
confirmation of any plan of reorganization, seek to expand the
role of Lowenstein Sandler beyond conflicts matters, Lowenstein
Sandler will file with the Court a notice of expanded role,
including a description of the expanded services.
About General Maritime
New York-based General Maritime Corporation, through its
subsidiaries, provides international transportation services of
seaborne crude oil and petroleum products. The Company's fleet is
comprised of VLCC, Suezmax, Aframax, Panamax and product carrier
vessels. The fleet consisted of 30 owned vessels and three
chartered vessels. The company generates substantially all of its
revenues by chartering its fleet to third-party customers. The
largest customers include major international oil companies, oil
producers, and oil traders such as BP, Chevron Corporation, CITGO
Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess
Corporation, Lukoil Oil Company, Stena AB, and Trafigura.
General Maritime and 56 subsidiaries filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17,
2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer
Levin Naftalis & Frankel LLP, in New York, serve as counsel to the
Debtors. Moelis & Company is the financial advisor. Garden City
Group Inc. is the claims and notice agent.
General Maritime disclosed $1,201,124,132 in assets and
$1,503,375,285 in liabilities as of the Chapter 11 filing.
General Maritime's publicly held securities include 121.5 million
common shares and $300 million in unsecured 12% notes due 2017.
Prepetition, General Maritime reached agreements with its key
senior lenders, including its bank group, led by Nordea Bank
Finland plc, New York Branch as administrative agent, as well as
affiliates of Oaktree Capital Management, L.P., on the terms of a
restructuring. Under terms of the agreements, Oaktree will
provide a $175 million new equity investment in General Maritime
and convert its prepetition secured debt to equity.
In conjunction with the filing, General Maritime has received a
commitment for up to $100 million in new DIP financing from a
group of lenders led by Nordea as administrative agent.
Counsel for Nordea, as the DIP Agent and the Senior Agent, are
Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case
LLP. Counsel for Oaktree Capital Management, the Junior Agent,
are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland &
Ellis, LLP.
The Official Committee of Unsecured Creditors appointed in the
case has retained lawyers at Jones Day as Chapter 11 counsel.
Jones Day previously represented an ad hoc group of holders of the
12% Senior Notes due 2017 issued by General Maritime Corp. This
representation began Sept. 20, 2011, and concluded Nov. 29, 2011,
with the agreement of all members of the Noteholders Committee.
The Creditors Committee also tapped Lowenstein Sandler PC as
special conflicts counsel.
The Noteholders Committee consisted of Capital Research and
Management Company, J.P. Morgan Investment Management, Inc., J.P.
Morgan Securities LLC, Stone Harbor Investment Partners LP and
Third Avenue Focused Credit Fund.
The Creditors Committee is comprised of Bank of New York Mellon
Corporate Trust, Stone Harbor Investment Partners, Delos
Investment Management, and Ultramar Agencia Maritima Ltda.
GENTA INC: FINRA Denies Request to Effect a Reverse Stock Split
---------------------------------------------------------------
Genta Incorporated submitted a request to the Financial Industry
Regulatory Authority to process documentation related to a reverse
stock split pursuant to Rule 10b-17 of the Securities Exchange Act
of 1934, as amended, earlier in 2011. After continual
correspondence between the Company and FINRA, on Jan. 23, 2012,
the Company received notice of FINRA's final denial of the
Company's request to process the documentation related to the
Reverse Split. The Company is currently evaluating its
alternatives in connection with the proposed Reverse Split.
About Genta Incorporated
Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB:
GNTA) -- http://www.genta.com/-- is a biopharmaceutical company
engaged in pharmaceutical (drug) research and development. The
Company is dedicated to the identification, development and
commercialization of novel drugs for the treatment of cancer and
related diseases.
EisnerAmper LLP, in Edison, New Jersey, expressed substantial
doubt about Genta's ability to continue as a going concern
following the 2010 financial results. The independent auditors
noted that of the Company's recurring losses from operations,
negative cash flows from operations and current maturities of
convertible notes payable.
Amper, Politziner & Mattia, LLP, in Edison, New Jersey, did not
include a going concern explanatory paragraph in its audit report
on the Company's financial statements for fiscal 2009.
The Company reported a net loss of $167.3 million on $257,000 of
sales for 2010, compared with a net loss of $86.3 million on
$218,000 for 2009.
The Company also reported a net loss of $37.36 million on $170,000
of net product sales for the nine months ended Sept. 30, 2011,
compared with a net loss of $133.43 million on $192,000 of net
product sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$16.82 million in total assets, $32.13 million in total
liabilities, and a $15.30 million total stockholders' deficit.
Bankruptcy Warning
In September 2011, the Company issued $12.7 million of units,
consisting of $4.2 million of senior secured convertible notes and
$8.5 million of senior secured cash collateralized convertible
notes. In connection with the sale of the units, the Company also
issued two types of debt warrants in an amount equal to 100% of
the purchase price for each unit. The Company had direct access
to $4.2 million of the proceeds, and the remaining $8.5 million of
the proceeds were placed in a blocked account as collateral
security for the $8.5 million senior secured cash collateralized
convertible notes. Presently, with no further financing, the
Company projects that it will run out of funds during the first
quarter of 2012. The Company currently does not have any
additional financing in place. If it is unable to raise
additional funds, the Company could be required to reduce its
spending plans, reduce its workforce, license one or more of its
products or technologies that it would otherwise seek to
commercialize itself, sell some or all of its assets, cease
operations or even declare bankruptcy. There can be no assurance
that the Company can obtain financing, if at all, or raise those
additional funds, on terms acceptable to it.
GRANITE CITY: Receives NASDAQ Delisting Notice
----------------------------------------------
Granite City Food & Brewery Ltd. has received a letter from the
Listing Qualifications Staff of The NASDAQ Stock Market notifying
the Company that its common stock is subject to delisting from The
NASDAQ Capital Market at the opening of business on Feb. 1, 2012,
unless the Company requests an appeal of this determination.
The notice stated that the delisting is attributable to the
Company's failure to comply with the minimum shareholders' equity
requirement for continued listing set forth in NASDAQ Listing Rule
5550(b)(1). NASDAQ staff did not accept the Company's plan for
compliance submitted on Jan. 4, 2012.
"We believe our plan for regaining and sustaining compliance
merits continued listing of our common stock and we have therefore
decided to appeal the staff's determination to a listing
qualifications panel," said Chief Financial Officer James G.
Gilbertson. "We believe that many of the actions we have taken
since the CDP transaction have added significant value to the
Company and that we are only beginning to see the results of such
actions, as reflected in our recently filed Form 8-K/A containing
pro forma financials that show the impact of the Cadillac Ranch
asset acquisitions."
The Company anticipates that the listing qualifications panel
hearing will be scheduled within the next four weeks.
If the Company's common stock does not continue to be listed on
The NASDAQ Capital Market, the shares would become subject to
certain rules of the SEC relating to "penny stocks." Such rules
require broker-dealers to make a suitability determination for
purchasers and to receive the purchaser's prior written consent
for a purchase transaction, thus restricting the ability to
purchase or sell the shares in the open market. In addition,
trading, if any, would be conducted in the over-the-counter market
in the so-called "pink sheets" or on the OTC Bulletin Board, which
was established for securities that do not meet NASDAQ listing
requirements. Consequently, selling the shares would be more
difficult because smaller quantities could be bought and sold,
transactions could be delayed, and security analyst and news media
coverage of the Company may be reduced. These factors could result
in lower prices and larger spreads in the bid and ask prices for
the shares. There can be no assurance that the Company's common
stock will continue to be listed on The NASDAQ Capital Market.
Granite City Food & Brewery -- http://www.gcfb.net/-- is a modern
American restaurant and brewery. Everything served at Granite
City is made fresh on site using high quality ingredients,
including Granite City's award-winning signature line of craft
beers. The extensive menu features moderately priced favorites
served in generous portions. Granite City's attractive price
point, high service standards, and great food and beer combine for
a memorable dining experience. The Company opened its first
Granite City restaurant in St. Cloud, Minnesota in 1999 and
currently operates 26 Granite City restaurants in 11 states and 5
Cadillac Ranch restaurants in 4 states.
GRUBB & ELLIS: Appeals NYSE Listing Suspension Determination
------------------------------------------------------------
Grubb & Ellis Company, on Jan. 18, 2012, timely filed its notice
of appeal regarding the determination of the New York Stock
Exchange to suspend the trading of the Company's common stock in
connection with commencing the delisting process of the Company's
common stock on the NYSE. In accordance with the NYSE's policies,
the NYSE will not take any additional action to pursue delisting
of the Company's common stock until the appeal has been fully
exhausted in accordance with the NYSE's procedures.
Pending this review, the Company's common stock has been trading
on the OTCQB Marketplace since Jan. 6, 2012, under the symbol
"GRBE". Trading of the Company's stock to the OTCQB Marketplace
has had no effect on the Company's shares and the Company's
shareholders continue to remain owners of the common stock and are
currently able to trade the stock on the OTCQB Marketplace.
About Grubb & Ellis Company
Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is one of
the largest and most respected commercial real estate services and
investment companies in the world. Our 5,200 professionals in more
than 100 company-owned and affiliate offices draw from a unique
platform of real estate services, practice groups and investment
products to deliver comprehensive, integrated solutions to real
estate owners, tenants and investors. The firm's transaction,
management, consulting and investment services are supported by
highly regarded proprietary market research and extensive local
expertise. Through its investment management business, the
company is a leading sponsor of real estate investment programs.
The Company reported a net loss of $69.7 million on $575.5 million
of revenues for 2010, compared with a net loss of $80.5 million on
$527.9 million of revenues for 2009.
The Company also reported a net loss of $28.61 million on
$378.90 million of total revenue for the nine months ended Sept.
30, 2011, compared with a net loss of $58.56 million on
$372.38 million of total revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$149.77 million in total assets, $152.74 million in total
liabilities, $98.89 million in preferred stock, and a
$101.85 million total deficit.
The Company said it may seek additional financing prior to the
completion of its review of strategic alternatives. It is
anticipated that any strategic alternative would include
provisions to extend, retire or refinance the Colony credit
facility at or prior to maturity. If the Company is unable to
extend, retire or refinance the Colony credit facility prior to
maturity, it could create substantial doubt about the Company's
ability to continue as a going concern for the twelve month period
following the date of these financial statements. The Company
believes that upon completion of its strategic alternative process
the Company will have sufficient liquidity to operate in the
normal course over the next twelve month period.
GUIDED THERAPEUTICS: Wants Panel to Review PMA for LuViva
---------------------------------------------------------
Guided Therapeutics, Inc., plans to seek an independent panel
review of its Pre-market Approval application for the LuViva
Advanced Cervical Scan from the U.S. Food and Drug Administration
after receiving a not-approvable letter from the agency.
Meanwhile, the Company plans to work with FDA to address the
outstanding issues so that they can be successfully resolved.
The Company also announced that it plans to move forward with
international sales of Luviva and imminently file for CE mark
approval.
"We are disappointed that the FDA has issued a not-approvable
letter after previously telling the company that a panel review of
LuViva would not be necessary since the agency understood LuViva's
technology, it understood the clinical application and had also
reviewed similar devices in the past," said Mark L. Faupel, Ph.D.,
president and CEO of Guided Therapeutics. "Similar to the two
most recent spectroscopy cancer diagnostic products approved by
FDA after first receiving not-approvable letters, we plan on
seeking a panel review in order to be granted approval."
"The company plans to focus more on European and Asian regulatory
approvals, while continuing to aggressively pursue approval in the
U.S.," said Dr. Faupel. "With the imminent filing of the CE mark,
sales should begin in Europe in the second half of 2012. Based on
initial agreements with distributors and the national healthcare
structure of medicine in many overseas countries, we believe
LuViva would likely be utilized in many institutions more focused
on Pap test follow up. Therefore, we would expect that a greater
percentage of international sales will come from high margin
disposables. As a result of this sales mix, and the lower capital
requirements for a launch outside the U.S., our path to breakeven
is expected to come as early as 2013, sooner than if we had also
initiated marketing in the U.S. this year."
"In the meantime, our clinical trial data system, two of our
clinical trial sites and one of our major suppliers has already
undergone successful FDA audits and we will continue working with
the agency on a path to approval," said Dr. Faupel.
LuViva was awarded marketing approval for Canada in December 2011
by Health Canada. Also in December, LuViva was selected by the
National Cancer Institute as one of the agency's successful
investments for developing innovative products to fight cancer.
About Guided Therapeutics
Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP)
-- http://www.guidedinc.com/-- is developing a rapid and painless
test for the early detection of disease that leads to cervical
cancer. The technology is designed to provide an objective result
at the point of care, thereby improving the management of cervical
disease. Unlike Pap and HPV tests, the device does not require a
painful tissue sample and results are known immediately. GT has
also entered into a partnership with Konica Minolta Opto to
develop a non-invasive test for Barrett's Esophagus using the
LightTouch technology platform.
The Company reported a net loss of $2.84 million on $3.36 million
of contract and grant revenue for the year ended Dec. 31, 2010,
compared with a net loss of $6.21 million on $1.55 million of
contract and grant revenue during the prior year.
The Company also reported a net loss of $3.88 million on $2.70
million of service revenue for the nine months ended Sept. 30,
2011, compared with a net loss of $2.56 million on $2.30 million
of service revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$2.84 million in total assets, $5 million in total liabilities,
and a $2.16 million total stockholders' deficit.
As reported by the TCR on April 4, 2011, UHY LLP, in Atlanta,
Georgia, noted that the Company's recurring losses from
operations, accumulated deficit and lack of working capital raise
substantial doubt about its ability to continue as a going
concern.
HOSTESS BRANDS: Sec. 341(a) Creditors' Meeting Set for Feb. 28
--------------------------------------------------------------
The United States Trustee for Region 2 will convene a meeting of
creditors pursuant to section 341 of the Bankruptcy Code in
Hostess Brands' Chapter 11 case on Feb. 28, 2012, at 2:30 p.m.
(ET) at the Office of the United States Trustee, 80 Broad Street
4th Floor, in New York.
This is the first meeting of creditors required under Section
341(a) of the U.S. 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 Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for $12
million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, and Kurtzman Carson Consultants LLC as
administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
HOSTESS BRANDS: Files Bid to Reject Teamsters, Bakers Union CBAs
----------------------------------------------------------------
Hostess Brands Inc. and its debtor-affiliates seek Bankruptcy
Court authority to reject their collective bargaining agreements
with the International Brotherhood of Teamsters and the Bakery,
Confectionary, Tobacco Workers and Grain Millers International
Union, and modify certain retiree benefit obligations, pursuant to
Sections 1113(c) and 1114(g) of the Bankruptcy Code.
The IBT and BCT collectively employ roughly 92% of the Debtors'
union workforce. The remaining 8% of the Debtors' union workforce
is represented by 10 other unions.
The Debtors filed an unredacted version of their Motion to Reject
the CBAs under seal.
According to Rachel Feintzeig, writing for Dow Jones' Daily
Bankruptcy Review, Hostess Brands wants to reject the 296 CBAs
that cover the majority of its 19,000 employees, saying it simply
can't survive in the marketplace without significant changes to
its labor obligations. DBR reports that Hostess said Wednesday it
was "fighting for its survival" during its second trip through
bankruptcy despite enacting cost-cutting measures and staging a
reorganization in Chapter 11 just a few years ago. The only way
forward now, the company said, is to rid itself of labor deals
with 141 local affiliates of the Teamsters union and 35 local
affiliates of the Bakers union.
"Hostess simply cannot emerge as a viable competitor unless they
are relieved of a number of significant financial commitments and
arcane work rules imposed by their collective bargaining
agreements," the company, according to DBR.
At the onset of their Chapter 11 case, the Debtors asked the Court
to establish notice procedures, a briefing schedule, and a hearing
date regarding their motion to reject union CBAs and modify
certain retire benefit obligations pursuant to Sections 1113(c)
and 1114(g) of the Bankruptcy Code. The Debtors initiated
discussions with the IBT and the BCT in September. After months
of bargaining, the Debtors were unable to reach agreement with
their unions regarding pensions, health and welfare benefits and
work rule changes before insufficient liquidity necessitated this
filing.
Due to the significant disparity between the percentage of
employees represented by the IBT and the BCT on the one hand and
the Other Unions on the other hand, the Debtors initially focused
their efforts on negotiations with the IBT and the BCT.
According to DBR, under separate proposals Hostess handed to the
IBT and BCT, Hostess would increase its projected pretax earnings
by $239.3 million annually by fiscal 2015. The savings would
result from Hostess no longer participating in pension plans for
the unions, instead contributing to a few different benefit and
contribution plans -- a move that should save it $74.1 million
annually by 2015. The proposal would also cut back on the union
employees' health and welfare plans and wages by implementing a
salary freeze and would tweak work rules that Hostess said "have
created widespread inefficiencies in the debtors' operations."
In addition, DBR relates, Hostess is gearing up to make other
changes to its business that don't touch on labor. These
initiatives include upgrading its vehicle fleet, closing five
bakeries that "operate at low baking capacity," and outsourcing
the production of certain Hostess baked goods -- including
seasonal items like hamburger buns -- to third-party bakeries.
But those measures would only increase the company's projected
annual pre-tax earnings by $76 million by 2016, it said.
In the Scheduling Motion, the Debtors said they intend to continue
negotiating with the IBT and the BCT and to initiate negotiations
with other unions. In the event that a consensual agreement
cannot be reached with the IBT and the BCT prior to Jan. 24, 2011,
the Debtors intend to commence the 1113/1114 Process with respect
to these two unions. After the trial in connection with such
process, the Debtors will commence the 1113/1114 Process with
respect to the Other Unions.
The Debtors also noted that their postpetition financing agreement
requires that the Debtors (a) make a proposal to the IBT and BCT
setting forth proposed modifications to existing employee wages,
benefits, protections and work rules by no later than one business
day after the Petition Date; (b) obtain entry of an order setting
forth notice, discovery and other related procedures and hearing
dates for the 1113/1114 Motion with respect to the IBT and BCT by
no later than five business days after the Petition Date; (c) file
their 1113/1114 Motion with respect to the IBT and BCT by no later
than 14 days after the Petition Date; and (d) obtain satisfactory
resolution of the 1113/1114 Motion with respect to the IBT and BCT
by no later than 75 days after its filing. Silver Point, Monarch
Alternative Capital LP, Gannett Peak CLO I, Ltd. and Credit Value
Partners, LP, have committed to provide up to $75 million in DIP
financing.
On Jan. 19, the Bankruptcy Court issued a Pre-Trial Scheduling
Order in Connection with the Debtors' motions to reject the CBAs
and modify the retiree benefits. The scheduling order provides
that objections to the Debtors' Motions to Reject the CBAs are due
Feb. 11. Discovery will run through Feb. 22. Trial will begin
March 5.
The other unions will have through late March to strike a deal
with the Debtors. Otherwise, the Debtors will commence the
1113/1114 Process for the other unions on March 28 with the filing
of Motions to Reject the other unions' CBAs.
DBR reports that a hearing Thursday, various parties, including
the judge assigned to the case, said they hadn't yet had a chance
to fully review the motion to reject the labor deals, a 78-page
document that Hostess had been expected to file if a deal with the
Teamsters and the bakers' union wasn't reached by Jan. 24.
In a statement released Thursday in response to Hostess's motion,
DBR said Dennis Raymond, the chairman of the Teamsters Bakery and
Laundry Conference, said the group is still "prepared to negotiate
in good faith to reach a consensual agreement." But he warned that
Hostess wouldn't be able to "bully its way to unnecessary
changes."
"Any agreement will be conditioned upon sacrifices by all
stakeholders and an overall restructuring to make sure Hostess
management doesn't lead the company into this situation a third
time," he said.
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for $12
million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, and Kurtzman Carson Consultants LLC as
administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are:
Jeffrey R. Freund, Esq.
BREDHOFF & KAISER, P.L.L.C.
805 Fifteenth Street N.W.
Washington, DC 20005
Telephone: (202) 842-2600
Facsimile: (212) 842-1888
- and -
Ancela R. Nastasi, Esq.
David A. Rosenzweig, Esq.
FULBRIGHT & JAWORSKI L.L.P.
666 Fifth Avenue
New York, NY 10103-3198
Telephone: (212) 318-3000
Facsimile: (212) 318-3400
E-mail: anastasi@fulbright.com
- and -
Camisha L. Simmons, Esq.
FULBRIGHT & JAWORSKI L.L.P.
2200 Ross Avenue, Suite 2800
Dallas, TX 75201-2784
Telephone: (214) 855-8000
Facsimile: (214) 855-8200
E-mail: csimmons@fulbright.com
HOSTESS BRANDS: Teamsters Warn of Misuse of Chapter 11
------------------------------------------------------
The Teamsters Union warned Hostess Brands Inc. not to misuse the
bankruptcy process in an attempt to bully its way to unnecessary
operations changes, saying a consensual resolution with sacrifices
by all stakeholders is what is required.
The company filed motions to reject its collective bargaining
agreements with its major unions: The International Brotherhood of
Teamsters and the Bakery, Confectionary, Tobacco and Grain Millers
Union.
While such filings are an extraordinary move by the company that
has serious ramifications, there are no immediate changes to the
collective bargaining agreements. The filing of the motions
begins a formal negotiation and legal process. The negotiation
phase is intended to bring the parties together to reach a
consensual resolution. If that fails, a formal hearing is
conducted in bankruptcy court where the judge ultimately decides
whether or not to grant the motions.
"We are prepared to negotiate in good faith to reach a consensual
agreement, as I have said repeatedly," said the Chairman of the
Teamsters Bakery and Laundry Conference, Dennis Raymond, "But any
agreement will be conditioned upon sacrifices by all stakeholders
and an overall restructuring to make sure Hostess management
doesn't lead the company into this situation a third time. And if
Hostess management thinks it can bully its way to unnecessary
changes, they are sadly mistaken."
"Though not unexpected at this point and after months of
unsuccessfully dealing with management, the Teamsters remain
disappointed by the company's latest action," added Teamsters
International Vice President Ken Hall. "The company has struggled
as it pursued misguided strategies under revolving management.
"Meanwhile, Teamster Hostess members have sacrificed greatly over
the past seven years. For Hostess to pin the blame on its
employees is unconscionable and demonstrates how out of touch
management is with its workforce," Hall said. "We will work hard
to get a deal. But if a deal proves impossible because executives
refuse to listen to reason, we will work equally hard to defend
against the motions filed by the company to reject its collective
bargaining agreements."
Founded in 1903, the Teamsters Union represents 1.4 million
hardworking men and women throughout the United States, Canada and
Puerto Rico, including more than 7,500 delivery drivers and
merchandisers at Hostess.
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for $12
million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, and Kurtzman Carson Consultants LLC as
administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
IMPLANT SCIENCES: Director Joseph Levangie Dies
-----------------------------------------------
Implant Sciences Corporation announced the death of Joseph E.
Levangie, on Jan. 14, 2012. Mr. Levangie had served on the
Company's Board of Directors since December 12, 2007 and was a
member of the Board's Compensation and Audit Committees.
Mr. Levangie enjoyed a distinguished and successful career. In
1975, Mr. Levangie worked as a Congressional Intern to then-
Representative Paul Tsongas, authoring "Energy, ERDA, and the
Fifth District." This led to an appointment to Division Manager
of Northern Energy Corporation, followed by a Presidential
appointment by President Carter to the post of Executive Vice
President of the Solar Energy & Energy Conservation Bank in
Washington, D.C., a post he held until the subsequent election of
President Reagan. Mr. Levangie held several executive positions
including Chief Financial Officer of GreenMan Technologies, Inc.,
Chief Operating & Financial Officer of Colorgen, Inc., Vice
President, Corporate Development and Chief Financial Officer of
Spire. Since 1981, Mr. Levangie had served as Chief Executive
Officer of JEL & Associates, a business advisory firm.
Mr. Levangie earned a S.B. in Chemical Engineering from the
Massachusetts Institute of Technology and an M.B.A from the
Harvard Graduate School of Business Administration. Mr. Levangie
also served as a director of SatCon Technology Corporation from
December 2004 to December 2007.
Glenn D. Bolduc, Chief Executive Officer and Chairman of the
Board, commented, "We are very saddened by Joe's passing; as a
board member, a mentor, a friend and a tremendous human being.
Since joining our board four years ago, Joe was instrumental in
the strategic initiative to focus the Company on our security
business and provided much counsel and guidance during this
process. Joe's service as a Board Member of the Company was
invaluable and for that we owe him a great deal of gratitude. On
behalf of the Board of Directors and the employees of Implant
Sciences, we offer our sincerest condolences to his wife and
children."
About Implant Sciences
Implant Sciences Corporation (OBB: IMSC.OB) --
http://www.implantsciences.com/-- develops, manufactures and
sells sensors and systems for the security, safety and defense
(SS&D) industries.
The Company also reported a net loss of $15.55 million on $6.65
million of total revenues for the year ended June 30, 2011,
compared with a net loss of $15.52 million on $3.47 million of
total revenues for the same period during the prior year.
Marcum LLP, in Boston, Massachusetts, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company has had recurring net
losses and continues to experience negative cash flows from
operations. As of Sept. 30, 2011, the Company's principal
obligation to its primary lender was approximately $23,115,000
with accrued interest of approximately $1,705,000.
The Company's balance sheet at Sept. 30, 2011, showed
$6.86 million in total assets, $30.37 million in total
liabilities, and a $23.51 million total stockholders' deficit.
Bankruptcy Warning
The Company's ability to comply with its debt covenants in the
future depends on its ability to generate sufficient sales and to
control expenses, and will require the Company to seek additional
capital through private financing sources. In addition, the
Company will require substantial funds for further research and
development, regulatory approvals, and the marketing of its
explosives detection products. The Company's capital requirements
depend on numerous factors, including but not limited to the
progress of the Company's research and development programs; the
cost of filing, prosecuting, defending and enforcing any
intellectual property rights; competing technological and market
developments; changes in the Company's development of
commercialization activities and arrangements; and the hiring of
additional personnel, and acquiring capital equipment. There can
be no assurances that the Company will achieve its forecasted
financial results or that the Company will be able to raise
additional capital to operate its business.
Any failure to comply with the Company's debt covenants, to
achieve its projections or obtain sufficient capital on acceptable
terms would have a material adverse impact on the Company's
liquidity, financial condition and operations and could force the
Company to curtail or discontinue operations entirely or file for
protection under bankruptcy laws.
INDYMAC BANCORP: Ex-Execs. Accuse FDIC of 'Stunning' Incompetence
-----------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that a pair of former
IndyMac executives being sued by the Federal Deposit Insurance
Corp. are accusing the bank regulator of a "stunning display of
incompetence" for failing to preserve key evidence when it took
over receivership of the failed bank.
About IndyMac Bancorp
Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) --
http://www.indymacbank.com/-- is the holding company for IndyMac
Bank FSB, a hybrid thrift/mortgage bank that originated mortgages
in all 50 states of the United States. Through its hybrid thrift-
mortgage bank business model, IndyMac designed, manufactured, and
distributing cost-efficient financing for the acquisition,
development, and improvement of single-family homes. IndyMac also
provided financing secured by single-family homes to facilitate
consumers' personal financial goals and strategically invests in
single-family mortgage-related assets.
On July 11, 2008, the Office of Thrift Supervision closed IndyMac
Bank and appointed FDIC as the bank's receiver. Thacher Proffitt
& Wood LLP was engaged as counsel to the FDIC.
Indymac Bancorp filed for Chapter 7 bankruptcy protection on
July 31, 2008 (Bankr. C.D.Calif., Case No. 08-21752).
Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C.
Weitnauer, Esq. Bloomberg noted that Indymac had about
$32.01 billion in assets as of July 11, 2008. In court documents,
IndyMac disclosed estimated assets of $50 million to $100 million
and estimated debts of $100 million to $500 million.
INNER CITY: Has Until April 5 to Decide on Unexpired Leases
-----------------------------------------------------------
The Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for the
extended until April 5, 2012, Inner City Media Corporation, et
al.'s time to assume or reject some or all of the unexpired
leases.
As reported in the Troubled Company Reporter on Jan. 13, 2012, the
Debtor related that when they filed for bankruptcy, the Debtors
were parties to approximately 20 non-residential real property
leases. They insist that the Unexpired Leases, which include a
headquarters lease, general office space leases and radio tower
leases, are critical to the operation of their business.
The Debtors assured the Court that they are working, in
consultation with their advisors, to make determinations regarding
the assumption and rejection of their executory contracts and
Unexpired Leases. They, however, maintain that they will not be
able to maximize the value of their assets in connection with the
ongoing extensive sale process they undertook if they are forced
to make decisions on the assumption or rejection of the Unexpired
Leases prior to the auction and sale hearing.
About Inner City Media Corp.
On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress
Credit Funding I L.P., and Drawbridge Special Opportunities Fund
Ltd., signed involuntary Chapter 11 petitions for Inner City Media
Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to
11-13979) to collect on a $254 million debt.
The Petitioning Creditors are party to the senior secured credit
Facility pursuant to which they (or their predecessors in
interest) extended $197 million in loans to the Alleged Debtors to
be used for general corporate purposes. More than two years ago,
the Alleged Debtors defaulted under the Senior Secured Credit
Facility, and in any event the entire amount of principal and
accrued and unpaid interest and fees became immediately due and
payable on Feb. 13, 2010.
Inner City Media's affiliates subject to the involuntary Chapter
11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting
Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC-
NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C.,
Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III,
L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi,
L.L.C., and Urban Radio of South Carolina, L.L.C.
Judge Shelley C. Chapman granted each of Inner City Media
Corporation and its debtor affiliates relief under Chapter 11 of
the United States Code. The decision came after considering the
involuntary petitions, and the Debtors' answer to involuntary
petitions and consent to entry of order for relief and reservation
of rights.
Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and
Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J.
Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader,
Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit
Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are
Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth &
Zabel LLP.
Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel.
Rothschild Inc. serves as the Debtors' financial advisors and
investment bankers. GCG Inc. serves as the Debtors' claims agent.
The United States Trustee said that an official committee under 11
U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of
Inner City Media because an insufficient number of persons holding
unsecured claims against the Debtor has expressed interest in
serving on a committee.
INVESTORS LENDING: Taps Aron G. Weiner as Special Attorney
----------------------------------------------------------
Investors Lending Group, LLC, seeks permission from the Bankruptcy
Court to employ Aron G. Weiner, and Weiner, Shearouse, Weitz,
Greenberg & Shawe, LLP, as an attorney to a) handle dispossessory
and foreclosure proceedings; b) prepare contracts and handle real
estate closings; and c) other related matters requiring the
services of an attorney.
Mr. Weiner will be compensated at his standard hourly rate of
$275.
Aron G. Weiner, Esq. -- AWeiner@WSWGS.com -- a member at Weiner,
Shearouse, Weitz, Greenberg & Shawe, LLP, assures the Court that
his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
About Investors Lending Group LLC
Based in Savannah, Georgia, Investors Lending Group LLC filed for
Chapter 11 (Bankr. S.D. Ga. Case No. 11-41963) on Sept. 21, 2011.
Judge Lamar W. Davis Jr. presides over the case. The Debtor
scheduled assets of $14,197,900 and debts of $18,634,570. The
petition was signed by Isaac L. Rabhan, CEO/assistant manager.
James L. Drake, Jr., and James L. Drake, Jr. P.C., acts as counsel
who will represent the company in the matter as debtor-in-
possession.
As reported by the TCR on Nov. 7, 2011, the U.S. Trustee for
Region 21 appointed seven unsecured creditors to serve on the
Official Committee of Unsecured Creditors of Investors Lending.
JEFFERSON COUNTY, AL: Jim Crane Seeks to Quash Subpoena
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Jim Crane, the new owner of the Houston Astros
professional baseball club, says he has no personal knowledge of
the role played by JPMorgan Chase & Co. in the sale of Jefferson
County, Alabama, sewer bonds. For that reason, he wants the judge
to quash a subpoena requiring him to give testimony under oath as
part of the county's investigation. Mr. Crane settled a lawsuit
against the bank regarding his purchase of the bonds. The county
wants him to preserve and turn over documents and testimony
created while his lawsuit was pending.
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.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
KGB: Moody's Downgrades CFR to B1; Outlook Negative
---------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
("CFR") and Probability of Default Rating for kgb to B1 from Ba3.
Moody's also lowered the first lien senior secured credit
facilities to Ba3 from Ba2 and the second lien senior secured term
loan to B3 from B2. The rating outlook is negative, which reflects
Moody's concerns about the credit impact of approaching debt
maturities.
Downgrades:
Issuer: kgb
-- Corporate Family Rating, to B1 from Ba3
-- Probability of Default Rating, to B1 from Ba3
-- First Lien Senior Secured Credit Facilities, to Ba3 (LGD3
32%) from Ba2 (LGD3 33%)
-- Second Lien Senior Secured Credit Facilities, to B3 (LGD5
84%) from B2 (LGD5 85%)
Outlook, Negative
RATINGS RATIONALE
The actions reflect a combination of increased financial risk from
upcoming debt maturities, as well as general business risk
associated with the uncertain growth prospects of new business
lines necessary to offset ongoing secular decline in the core
directory assistance business. While kgb reported $175 million of
cash (9/30/2011) and generates strong EBITDA relative to its debt
levels, increased investment spending on the daily deals business
has reduced free cash flow conversion and it remains uncertain if
the company will generate sufficient cash to repay its debt
obligations without impairing its liquidity position. The
company's undrawn $109 million revolving credit facility and, pro
forma for a $50 million repayment in December 2011, approximately
$206 million of first lien senior secured term loans mature on
December 1, 2012.
In addition, kgb must further develop its new business lines or
improve its credit metrics to maintain a B1 CFR over the
intermediate term due to high business risk relative to rated
peers in the business and consumer services industry. The core
directory assistance business is experiencing secular decline in
call volumes in part due to increasing smartphone penetration. The
company has been able to maintain its EBITDA levels (excluding
start-up losses) through a combination of increased pricing and
cost reduction initiatives. Moody's expects continued pressure on
call volumes will make this more difficult in the future and hold
the view that kgb must develop new business lines to maintain its
operating performance over an extended horizon. Currently, Moody's
estimates adjusted financial leverage in the 3 times range (in the
low 2 times range excluding start-up losses for the daily deals
business), interest coverage in excess of 4 times (EBITDA-
Capex)/Interest, and strong free cash flow.
The negative outlook reflects Moody's concerns about the credit
impact of approaching debt maturities. Moody's could downgrade the
ratings again if kgb does not refinance its credit facilities in a
timely and economical manner. Moody's could also downgrade the
ratings if margin improvements do not keep pace with directory
assistance volume declines, if kgb loses a significant customer,
or if Moody's expects financial leverage to exceed 3.5 times
Debt/EBITDA. Conversely, Moody's could stabilize the rating
outlook if kgb completes a refinancing that reduces financial
leverage to below 3 times Debt/EBITDA. While business risk limits
the likelihood of an upgrade over the near-term, Moody's could
upgrade the ratings if kgb reduces financial leverage to below 3
times and also demonstrates sustained growth in revenues and
EBITDA.
The principal methodology used in rating kgb was the Business &
Consumer Service Industry Methodology published in October 2010.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
LAKEVIEW BASEBALL CLUB: Wrigley Rooftop Venue Sold for $5MM
-----------------------------------------------------------
Max Stendahl at Bankruptcy Law360 reports that U.S. District Judge
Pamela S. Hollis on Tuesday approved the $4.8 million sale of a
rooftop venue overlooking Chicago's Wrigley Field, transferring
ownership of the private club, which had faced foreclosure as the
economy, and the Cubs, floundered.
Judge Hollis granted a motion by Richard M. Fogel, the trustee for
the bankrupt ownership of the Lakeview Baseball Club, to sell the
building to the owner of Brixen Ivy, a neighboring venue at the
Chicago Cubs' famous ballpark.
As reported in the Troubled Company Reporter on July 15, 2011,
Chicago Tribune said that a suburban bank has obtained a
foreclosure judgment of more than $3 million against the owners of
a building that houses a Wrigley Field rooftop club. According to
the report, the Lakeview Baseball Club, 3633 N. Sheffield Ave.,
has been operating in receivership since last year when First
Personal Bank, based in Orland Park, filed a foreclosure suit
alleging that the building's owners defaulted on two loans. The
report relates that the lender issued a $2.8 million loan in 2006
and a second, junior loan for $350,000.
Cook County Circuit Judge Darryl Simko ordered July 8 that the
property be sold at public auction. But the owners are
negotiating to sell the building privately before the public sale,
said their attorney Martin Oberman, a former Chicago alderman,
Chicago Tribune said.
Mr. Oberman represents the children of Robert Racky, a Chicago
developer, who started the first rooftop business in 1988 as a
private club, Chicago Tribune said.
The Lakeview Baseball Club is best known for the tote board under
its rooftop seats that details the years elapsed since the Cubs'
last division, league and World Series titles.
LEE ENTERPRISES: Wins Confirmation of Second Amended Plan
---------------------------------------------------------
Lee Enterprises Inc. and its debtor-affiliates won confirmation of
a second version of their prepackaged Chapter 11 plan of
reorganization.
The Bankruptcy Court on Jan. 23 issued its Findings of Fact,
Conclusions of Law and Order (I) Approving (A) Solicitation and
Disclosure Statement and (B) Prepetition Solicitation and Voting
Procedures and (II) Confirming Second Amended Joint Prepackaged
Plan of Reorganization for Lee. The Second Amended Plan was filed
Jan. 19.
The Plan was amended to include provisions on retiree benefits and
pension plans. The Plan provides that the Debtors will assume and
pay all retiree benefits and contribute to their pension plans the
amount necessary to satisfy the minimum funding standards under
sections 302 and 303 of ERISA, 29 U.S.C. Sections 1082 and 1083,
sections 412 and 430 of the Internal Revenue Code, and 26 U.S.C.
Sections 412 and 430, if any, relating to the Pension Plans. The
Plan, however, indicated that the Reorganized Debtors may modify
the benefits to the extent permitted by applicable law. The
Pension Benefit Guaranty Corporation and the Pension Plans will
not be enjoined or precluded from enforcing the Debtors' liability
as a result of any provision of the Chapter 11 Plan or the
Confirmation Order.
The Amended Plan also clarifies that the DIP Revolving Facility
will convert into the New First Lien Revolving Credit Facility.
Lee said in a statement it is scheduled to emerge from Chapter 11
on Jan. 30, 2012, when the plan of reorganization becomes
effective. The Company also said its refinancing agreements which
underpin the Plan will go into effect on Jan. 30.
The agreements extend the maturities of Lee's borrowings to
December 2015 and April 2017. Implementation required a
voluntary, prepackaged Chapter 11 process to bind a small minority
of non-consenting lenders to the terms.
Lee announced in September that its credit facility would be
amended and extended beyond its current maturity of April 2012 in
a structure of first and second lien debt. The first lien debt
consists of a term loan of $689.5 million, as well as a new $40
million revolving credit facility that is not expected to be drawn
at closing, both of which mature in December 2015. The first lien
debt carries interest at LIBOR plus 6.25%, with a LIBOR floor of
1.25%. Interest on the $40 million revolver is at LIBOR plus
5.5%, with a LIBOR floor of 1.25%. Mandatory amortization
payments for the first lien debt total $5 million for the
remainder of our 2012 fiscal year, $11 million in 2013, $12.75
million in 2014, and $13.5 million prior to the final maturity in
2015. The second lien debt consists of a $175 million term loan
with an interest rate of 15% maturing in April 2017. There are no
mandatory amortization payments required. Second lien creditors
will share in issuance of approximately 6,744,000 shares of Lee
Common Stock, amounting to approximately 13% of outstanding shares
on a pro forma basis as of the closing date.
Agreement on extending Lee's remaining debt, the Pulitzer Notes,
was reached in December. The debt will carry an interest rate of
10.55%, increasing 0.75% in January 2013 and each year thereafter.
Adjusted for principal payments and non-cash fees to be paid to
noteholders, the amended Pulitzer Notes will have a balance of
$126.4 million. Mandatory amortization payments total $1.4
million in 2012 and $6.4 million annually thereafter prior to the
final maturity in December 2015. Both the first lien debt and
Pulitzer Notes also require principal payments based on calculated
excess cash flow and allow for optional repayments.
Lee said under the Plan stockholders retain their interest in the
company with only modest dilution.
Carl Schmidt, vice president, chief financial officer and
treasurer, said that although the refinancing agreements
ultimately received support from roughly 97% of lenders
under the credit facility and all Pulitzer Notes lenders, Lee
needed the court process to complete the transactions due to the
requirement for unanimous approval of certain of the terms of the
amended facilities.
Earlier this month, Lee obtained Bankruptcy Court authority to
employ The Garden City Group Inc. as its noticing and balloting
agent. GCG assisted the Debtors with balloting in connection with
the prepackaged Chapter 11 plan.
Lee also obtained permission to hire KPMG to provide auditing
services while in bankruptcy. The firm has been assisting the
Debtors since 2008. The Debtors have already paid KPMG $960,000
for services for the fiscal year 2011. Accordingly, the Debtors
do not expect to make any payments to KPMG during the period prior
to the Plan Effective Date.
About Lee Enterprises
Lee Enterprises, Inc., headquartered in Davenport, Iowa, publishes
the St. Louis Post Dispatch and the Arizona Daily Star along with
more than 40 other daily newspapers and about 300 weekly
newspapers and specialty publications in 23 states. Revenue for
the 12 months ended December 2010 was $780 million. The Company
has 6,200 employees, with 4,650 working full-time.
Lee Enterprises and certain of its affiliates filed for chapter 11
(Bankr. D. Del. Lead Case No. 11-13918) on Dec. 12, 2011, with a
prepackaged plan of reorganization. The Debtor selected Sidley
Austin LLP as its general reorganization and bankruptcy counsel,
and Young Conaway Stargatt & Taylor LLP as co-counsel; The
Blackstone Group as Financial and Asset Management Consultant; and
The Debtor disclosed total assets of $1.15 billion and total
liabilities of $1.25 billion at Sept. 25, 2011.
Deutsche Bank Trust Company Americas, as DIP Agent and Prepetition
Agent, is represented in the Debtors' cases by Sandeep "Sandy"
Qusba, Esq., and Terry Sanders, Esq., at Simpson Thacher &
Bartlett LLP.
Certain Holders of Prepetition Credit Agreement Claims, Goldman
Sachs Lending Partners LLC, Mutual Quest Fund, Monarch Master
Funding Ltd, Mudrick Distressed Opportunity Fund Global, LP and
Blackwell Partners, LLC have committed to acquire up to a maximum
amount of $166.25 million of loans under a New Second Lien Term
Loan Facility pursuant to the Reorganization Plan. This
commitment also includes the potential payment of up to $10
million as backstop cash to Reorganized Lee Enterprises to acquire
the loans. The Initial Backstop Lenders are represented by
Matthew S. Barr, Esq., and Brian Kinney, Esq., at Milbank, Tweed,
Hadley & McCloy LLP.
LORD & TAYLOR: S&P Assigns 'B+' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to New York City-based Lord & Taylor Holdings LLC.
The outlook is stable.
"At the same time, we assigned our 'BB' issue-level rating and '1'
recovery rating to the company's proposed $450 million term loan
due 2019," S&P said.
"According to the company, it refinanced its existing capital
structure with a new $300 million asset-based revolving credit
facility (unrated), a $450 million first-lien term loan, $280
million of preferred equity, and $147 million of common equity.
The company used the proceeds of the transaction to refinance its
existing CMBS loan and other debt," S&P said.
"The ratings on Lord & Taylor reflect the company's 'highly
leveraged' capital structure (as defined in our criteria) and thin
cash flow protection measures after the proposed refinancing,"
said Standard & Poor's credit analyst David Kuntz. "The company's
'weak' business risk (as we define in our criteria) incorporates
our view of its participation in the highly competitive department
store industry, its geographic concentration, and its relatively
small size compared with its peers. The company's recent robust
performance and our expectation for further operational gains
somewhat offset these factors."
"After the completion of the transaction, we expect the company to
be highly leveraged with thin cash flow protection measures,"
added Mr. Kuntz. "We anticipate that leverage is likely to be in
the upper-5x area and that coverage is likely to be in the mid-2x
area. We expect that performance gains over the next 12 months,
rather than meaningful debt repayment, will be behind the modest
improvement in credit protection metrics. Our assessment of the
company's financial risk profile incorporates its meaningful real
estate holdings."
"The stable outlook reflects our expectation that performance is
likely to improve over the near term, but at a diminished rate. We
believe that the weak economy is likely to dampen consumer
spending over the next 12 months. We expect investments in the
direct business and new-store-opening expenses are likely to
offset margin gains from expense controls and positive operating
leverage. In our view, the company's position as a fashion
retailer of brands somewhat insulates it from higher product
costs," S&P said.
"We could raise the rating if the company can execute well over
the near term with on-trend merchandise that resonates well with
the customer. Under this scenario, same-store sales would be in
the upper-single or low-double digits and margins would be about
50 to 75 basis points (bps) ahead of our expectations. This would
result in leverage in the mid-4x area," S&P said.
"Conversely, we could lower the rating if consumer sentiment
materially weakens or merchandise missteps result in substantial
performance erosion. This would lead to about flat same-store
sales and operating margins declining by about 50 bps. At that
time, leverage would increase to the upper-6x area," S&P said.
LOS ANGELES DODGERS: Wants Decision on Leases Extended to April 30
------------------------------------------------------------------
Los Angeles Dodgers LLC, et al., ask the U.S. Bankruptcy Court for
the District of Delaware to extend, pursuant to Sections 365(d)(4)
of the Bankruptcy Code the deadline for the Debtors to assume or
reject unexpired leases of nonresidential real property through
and including April 30, 2012. Prior to filing of this motion, the
Debtors obtained the written consent of certain landlords to
extend the Assumption/Rejection Deadline to April 30, 2012.
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.
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.
LPATH INC: Johnson & Johnson No Longer Owns Common Shares
---------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Johnson & Johnson and Johnson & Johnson
Development Corporation disclosed that, as of Dec. 31, 2011, they
do not beneficially own 0 shares of common stock of Lpath, Inc. A
full-text copy of the filing is available at http://is.gd/z5sysk
About Lpath, Inc.
San Diego, Calif.-based Lpath, Inc. is a biotechnology company
focused on the discovery and development of lipidomic-based
therapeutics, an emerging field of medical science whereby
bioactive lipids are targeted to treat human diseases.
The Company reported a net loss of $4.60 million on $7.83 million
of total revenues for the year ended Dec. 31, 2010, compared with
net income of $3.98 million on $11.91 million of total revenues
during the prior year.
As reported by the TCR on March 28, 2011, Moss Adams LLP, in San
Diego, Calif., expressed substantial doubt about the Company's
ability to continue as a going concern after auditing the
Company's financial statements at the end of 2009. The
independent auditors noted that the Company had incurred
significant cash losses from operations since inception and
expects to continue to incur cash losses from operations in 2010
and beyond. In its audit report for 2010, the auditor did not
issue a going concern qualification.
The Company's balance sheet at Sept. 30, 2011, showed
$20.04 million in total assets, $15.61 million in total
liabilities, and $4.42 million in total stockholders' equity.
MAKENA GREAT: Files Schedules of Assets and Liabilities
-------------------------------------------------------
Makena Great American Anza Company, LLC filed with the Bankruptcy
Court for the Northern District of Illinois its schedules of
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $11,301,012
B. Personal Property $2,637,149
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $15,693,117
E. Creditors Holding
Unsecured Priority
Claims $163
F. Creditors Holding
Unsecured Non-priority
Claims $2,030,208
----------- -----------
TOTAL $13,938,161 $17,723,488
The Makena Great American Anza Company, LLC --
http://www.makenacapital.net/-- is a commercial shopping center
developer in Southern California. Makena considers itself the
leader in the acquisition and development of "A-Location" small
commercial shopping centers and corner properties in Southern
California.
Makena Great American Anza Company LLC filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 11-48549) on Dec. 1, 2011, in Chicago,
Illinois. Gordon E. Gouveia, Esq., at Shaw Gussis Fishman Glantz
Wolfson & Towbin, LLC, in Chicago, serves as counsel to the
Debtor.
MAQ MANAGEMENT: Motion to Turnover Cash Collateral Denied
---------------------------------------------------------
Judge Erik P. Kimball of the U.S. Bankruptcy Court for the
Southern District of Florida has denied as moot the motion of
secured creditor First National Bank of South Florida to
hold Super Stop Petroleum Inc. in contempt of the previous cash
collateral order and the turnover cash collateral.
The Debtor has filed and provided accounting information to First
National showing that the rent has been placed into the DIP
account for First National. First National has earlier alleged
that the Debtor has failed to deposit $32,119 per month in rent
for First National's secured properties.
First National Bank of South Florida is represented by:
Bruce E. Bloch, Esq.
SAPURSTEIN & BLOCH, PA.
9700 South Dixie Highway, Suite 1000
Miami, Florida 33156
Tel: (305) 670-9500
E-mail: bbloch@sblawfirmfl.com
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.
MESA AIR: Asked for May 19 Extension for Closing Report
-------------------------------------------------------
Mesa Air Group, Inc., and its affiliated debtors and reorganized
debtors ask Judge Martin Glenn of the U.S. Bankruptcy Court for
the Southern District of New York to extend the date within which
they must submit an application for final decree and closing
report through and including May 19, 2012.
John W. Lucas, Esq., at Pachulski Stang Ziehl & Jones LLP, in New
York, relates that the Reorganized Debtors have made significant
progress in their cases. The Plan, he relates, has been
substantially consummated and only a small fraction of the total
claims against the estates remain outstanding.
Approximately 1,800 claims were filed against the Debtors'
estates. Since the Petition Date, the Debtors and Reorganized
Debtors have filed 23 omnibus claim objections. As of Jan. 6,
2012, the Reorganized Debtors have objected to approximately 1,289
proofs of claim, which includes administrative expense claims. In
addition, the Reorganized Debtors have succeeded in negotiating
the settlement of numerous claims asserted against certain of
their estates and obtained the voluntary withdrawal of various
proofs of claim filed in these Chapter 11 cases. Assuming that
all pending objections are granted, as of Jan. 1, 2012, more than
90% of all claims filed in the Chapter 11 cases have been
resolved, Mr. Lucas tells the Court. The Reorganized Debtors
expect the claim reconciliation process to be complete by
March 1, 2012, with final distributions under the Plan to follow
thereafter.
Mr. Lucas asserts that the Reorganized Debtors require additional
time to (i) continue negotiating with certain claimants to resolve
their claims without the need to file objections thereto; (ii)
prosecute the pending claim objections; and (iii) prepare the
final distribution to holders of unsecured claims and certain
taxing authority claims.
Mr. Lucas assures the Court that the extension is not sought for
improper dilatory purposes and will not unduly prejudice any
claimants.
In a pro se filing, Vincent E. Rhynes says he objects to the
request and is asking the Court to take "judicial notice" that "he
is not willing to exchange, buy into, etc. 'other' bankruptcy case
transactions, solicitation against the rights now due under a
'confirmed order' entered 01-20-2011 & plan effective date entered
03-01-2011."
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
(Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New
York, listing assets of $976 million against debt totaling
$869 million as of Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on Jan. 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MESA AIR: Asked for May 19 Extension for Claims Objections
----------------------------------------------------------
Mesa Air Group Inc. and its affiliates ask the Court to extend the
date by which they must file objections to claims through and
including May 19, 2012.
Since the entry of Extension Order No. 2, the Reorganized Debtors
have filed nine omnibus objections with respect to approximately
390 scheduled and filed claims. Hearings were held or will be
held on those objections on November 22, 2011, December 22, 2011
and January 17, 2012. As of Jan. 6, 2012, the Reorganized Debtors
have objected to approximately 1,289 proofs of claim, which
includes administrative expense claims. In addition, the
Reorganized Debtors have succeeded in negotiating the settlement
of numerous claims asserted against certain of the Reorganized
Debtors' estates and obtained the voluntary withdrawal of various
proofs of claim filed in the Chapter 11 cases. Assuming that all
pending objections are granted, as of January 1, 2012, over 90% of
all claims filed in these chapter 11 cases have been resolved,
John W. Lucas, Esq., at Pachulski Stang Ziehl & Jones LLP, in New
York, tells the Court.
While a substantial portion of the claims reconciliation process
has been completed, the Reorganized Debtors require additional
time to continue negotiating with certain claimants to resolve
their claims without the need to file objections thereto and to
finalize the claims reconciliation process, Mr. Lucas says.
Because these matters are ongoing, the Reorganized Debtors require
a further extension of the Claims Objection Deadline to ensure
that the claims reconciliation process proceeds appropriately and
that any remaining disputed claims are not inadvertently
overlooked or allowed claims double counted.
In addition, the Reorganized Debtors seek a further extension of
the Claims Objection Deadline with the intention of finalizing all
claims and making a final distribution so that these chapter 11
cases may be closed as expeditiously as possible, Mr. Lucas adds.
Mr. Lucas says the Reorganized Debtors believe that a further
extension of the Claims Objection Deadline through and including
May 19, 2012 is in the best interest of all parties in interest.
About Mesa Air
Mesa Air currently operates 76 aircraft with approximately 450
daily system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry
and Janie Risley in New Mexico in 1982.
Mesa Air Group Inc. and its units filed their Chapter 11 petitions
(Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New
York, listing assets of $976 million against debt totaling
$869 million as of Sept. 30, 2009.
Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the
Debtors. Imperial Capital LLC is the investment banker. Epiq
Bankruptcy Solutions is claims and notice agent. Brett Miller,
Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison &
Foerster LLP, serve as counsel to the Official Committee of
Unsecured Creditors.
Judge Martin Glenn entered a final order confirming the Third
Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and
its debtor affiliates on Jan. 20, 2011. Under the plan, the
reorganized company will issue new notes, common stock and
warrants to creditors. Unsecured creditors that are U.S. citizens
will receive a combination of new notes and new common stock,
while unsecured creditors that are Non-U.S. citizens will receive
a combination of new notes and new warrants. An agreement with US
Airways paved way for the filing of the plan.
Mesa Air's Plan of Reorganization became effective March 1, 2011.
The Company's restructuring accomplishments included elimination
of 100 excess aircraft and associated leases and debt which
contributed to the deleveraging of Mesa's balance sheet in the
approximate amount of $700 million in capitalized leases and
$50 million in debt, and extending the term of the code-share
agreement with US Airways through September 2015.
Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy
News. The newsletter tracks the Chapter 11 proceedings undertaken
by Mesa Air Group Inc. and its units.
(http://bankrupt.com/newsstand/or 215/945-7000).
MINOR HOTEL: Files Sale-Based Chapter 11 Plan
---------------------------------------------
Minor Family Hotels, LLC, has filed with the Bankruptcy Court for
the Western District of Virginia its proposed plan of liquidation
dated Jan. 13, 2012, and an explanatory disclosure statement.
Under the plan of liquidation, all of the Debtor's real property,
including all improvements, and all of the Debtor's personal
property will be sold to Virginia Hotel Fund, LLC, free and clear
of all liens, claims, and interests, pursuant to Section 363 of
the Bankruptcy Code, for $2,800,000. This purchase offer is
conditioned upon Virginia Hotel Fund, LLC, being entitled to a
break up fee of $100,000 in the event that the Debtor's property
is purchased by someone else at a higher price. The net proceeds
of sale after deduction of expenses of sale, Professional Fees,
amounts due to the Office of the United States Trustee, amounts
due to Dixon Development, and any taxes due as a result of the
sale, will be used to fund distributions under the Plan. An
appraisal filed by Specialty Finance Group in the Georgia State
Court litigation reflected the AS-IS value of the hotel project at
$2,100,000.
The classification and treatment of claims under the Plan are:
A. Unclassified Claims consists of administrative expenses
and priority tax claims. All administrative expenses will
be paid on the effective date of the Plan while priority
tax claim will be regular installments paid over a period
not exceeding 5 years from the order of relief.
Administrative expenses are estimated to be $211,000 and
there are no priority tax claims.
B. Class 1 - Other Priority Unsecured Claims will receive
cash on the effective date of the Plan equal to the
allowed amount of the claim.
C. Class 2 - Real Property Taxes, which are owed to the City
of Charlottesville for $128,183.02 plus accruing penalties
and interest. This Class will be paid in full from the
net proceeds of sale of the Debtor's property.
D. Class 3 - The Mechanics Lien claim of Clancy & Theys,
which total $2,076,545.37 plus accrued interest as of Dec.
5, 2011 of $449,332.87. This Class will be paid Pro Rata
with Class 4 from the net proceeds of sale of the Debtor's
property. In the event that the net proceeds of sale are
not sufficient to pay this Class in full, any amount
remaining due will be treated for payment purposes as a
General Unsecured Claim.
E. Class 4 - The Mechanics Lien claim of R.D. Jones, total
$136,654.51 plus accruing interest, will be paid Pro Rata
with Class 3 from the net proceeds of sale of the Debtor's
property. In the event that the net proceeds of sale are
not sufficient to pay this Class in full, any amount
remaining due will be treated for payment purposes as a
General Unsecured Claim.
F. Class 5 - lien of Specialty Finance Group, determined
to be $13,364,298.77 plus accruing interest, will be paid
from the net proceeds of sale of the Debtor's property.
In the event that the net proceeds of sale are not
sufficient to pay this Class in full, any amount remaining
due will be treated for payment purposes as a General
Unsecured Claim.
G. Class 6 - The judgment lien of Core Group, PC, is in the
amount of $287,652.16. There will be no funds available
to pay this Class and will be treated as a General
Unsecured Claim.
H. Class 7 - General Unsecured Claims. The Debtor does not
believe that there will be sufficient funds after payment
of Administrative Expenses and Secured Claims for any
payment on General Unsecured Claims. However, under the
Plan, Virginia Hotel Fund, LLC has agreed to provide a
Convenience Fund in an amount not to exceed $200,000,
which will pay holders of General Unsecured Claims in the
amount of $100,000 or less who elect to be treated as a
Convenience Claim, 10% of the amount of their claim.
Holders of General Unsecured Claims in excess of $100,000
may elect to reduce their claim to $100,000 and accept a
payment of $10,000 in full satisfaction of the claim.
I. Class 8 - Equity Interest Holders consists of membership
interests in the Debtor. The Debtor does not believe that
there will be funds for any payment to Equity Interest
Holders.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/MINOR_FAMILY_ds.pdf
About Minor Family
Charlottesville, Virginia-based Minor Family Hotels, LLC, is the
owner of the Landmark Hotel project in downtown Charlottesville,
Virginia. Minor Family filed for Chapter 11 bankruptcy protection
(Bankr. W.D. Va. Case No. 10-62543) on September 1, 2010.
Benjamin Webb King, Esq., at Woods Rogers Hazlegrove, serves as
bankruptcy counsel. Minor Family estimated assets and debts at
$10 million to $50 million in its Chapter 11 petition.
Minor Family Hotels filed for Chapter 11 protection to resolve
"burdensome" lawsuits that have delayed the hotel's construction.
Eight lawsuits have been filed in connection with the project.
MOHEGAN TRIBAL: Has Private Offering to Restructure Debt
--------------------------------------------------------
Mohegan Tribal Gaming Authority, the owner of Mohegan Sun Casino,
is taking steps to restructure its debt, announcing an exchange
offer for $1.075 billion in second-lien, senior and subordinated
notes that removes the threat of near-term default.
Amanda Bransford at Bankruptcy Law360 reports that Mohegan Tribal
is struggling under reduced gambling in a tight economy that has
hurt casinos in recent years.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the new notes will extend maturities by as long as
four years. By tendering bonds by Feb. 6, holders will receive
consent fees on top of new notes with face amounts equal to
existing debt. Absent the exchange, the $675 million bank credit
would mature March 9 followed by $250 million of subordinated
notes in April. The exchange offer is accompanied by a three-year
extension of the maturity of the first-lien bank credit that will
be reduced by $200 million to $475 million. The cash is to be
provided by selling $225 million in new first-lien debt.
The offer already has been accepted by holders with more than half
of the notes.
Although the new debt doesn't reduce the principal amount owed and
increases the interest rate by more than 4 percentage points in
some cases, Standard & Poor's said the offer amounts to a
"distressed exchange" because the "increase in pricing does not
adequately compensate lenders for the extension of maturities."
Once the exchange is completed, S&P said the new credit rating is
likely to be B-, compared with the CCC rating that resulted from a
November downgrade.
About Mohegan Tribal Gaming Authority
Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an
instrumentality of the Mohegan Tribe of Indians of Connecticut, or
the Tribe, a federally-recognized Indian tribe with an
approximately 507-acre reservation situated in Southeastern
Connecticut, adjacent to Uncasville, Connecticut. The Authority
has been granted the exclusive authority to conduct and regulate
gaming activities on the existing reservation of the Tribe,
including the operation of Mohegan Sun, a gaming and entertainment
complex located on a 185-acre site on the Tribe's reservation.
Through its subsidiary, Downs Racing, L.P., the Authority also
owns and operates Mohegan Sun at Pocono Downs, a gaming and
entertainment facility located on a 400-acre site in Plains
Township, Pennsylvania, and several off-track wagering facilities
located elsewhere in Pennsylvania.
The Authority's balance sheet at Sept. 30, 2011, showed
$2.2 billion in total assets, $2.0 billion in total liabilities
and $198.7 million total capital.
PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed
substantial doubt about the Authority's ability to continue as a
going concern. The independent auditors noted that of the
Authority's total debt of $1.6 billion as of Sept. 30, 2011,
$811.1 million matures within the next twelve months, including
$535.0 million outstanding under the Authority's Bank Credit
Facility which matures on March 9, 2012, and the Authority's
$250.0 million 2002 8% Senior Subordinated Notes which mature on
April 1, 2012. In addition, a substantial amount of the
Authority's other outstanding indebtedness matures over the
following three fiscal years.
MOHEGAN TRIBAL: Moody's Will Consider Offer as Limited Default
--------------------------------------------------------------
Moody's Investors Service stated that Mohegan Tribal Gaming
Authority's (Caa3/ negative) recently announced exchange offer
will be viewed as a distressed exchange upon closing. Mohegan
Tribal Gaming Authority ("MTGA") announced that it has commenced a
series of debt refinancing transactions designed to extend the
maturity dates of the company's capital structure, including
private par exchange offers and an amendment and restatement of
its credit facility.
Given Moody's view that MTGA's existing capital structure is
unsustainable, the exchange offer will be considered a limited
default upon closing and Moody's will append an /LD to the
Probability of Default Rating.
Consummation of the exchange offer is conditioned upon the tender
of at least $830 million aggregate principal amount of existing
notes. According to an 8-K filing, MTGA has entered into
agreements with certain investors holding approximately $598
million of the company's existing notes whereby these investors
have committed to tender their notes into the exchange offers, and
not to withdraw their tenders pursuant to a support agreement.
The exchange offers are also conditioned upon the expected
concurrent completion of a new first lien debt offering and a
credit facility amendment. MTGA will offer $225 million in new
first-lien debt in a private placement. The proceeds will be used
to repay a portion of the company's credit facility. Additionally,
MTGA is seeking to reduce the size of its bank credit facility to
$475 million from $675 million (consisting of a $200 million
revolver and $275 million term loan) and extend the facility's
maturity date to March 2015 from March 2012.
Noteholders who participate in the exchange must also deliver
consents to certain amendments to the indentures of the existing
notes to remove substantially all restrictive covenants and
certain default provisions. The approval of these proposed
amendments requires the consent of holders of at least a majority
of the aggregate outstanding principal amount of each series of
existing notes.
Although the completion of the exchange will not result in a
reduction in leverage -- pro forma for the exchange offer, MTGA's
debt/EBITDA will remain at about 6.0 times -- it will extend the
company's debt maturity profile. If the exchange offer is
completed and the proposed amendments approved, Moody's will
consider a modest upgrade to MTGA's Corporate Family and
Probability of Default ratings to reflect the improved financial
flexibility afforded by the extended maturity profile. Moody's
will also consider whether to revise the ratings of any non-
tendered notes.
The principal methodologies used in this rating were Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009, and Global Gaming
published in December 2009.
MTGA owns and operates a gaming and entertainment complex located
near Uncasville, Connecticut, known as Mohegan Sun, and a gaming
and entertainment facility offering slot machines and harness
racing in Plains Township, Pennsylvania, known as Mohegan Sun at
Pocono Downs. MTGA generates annual net revenues of about $1.4
billion.
MONEY TREE: Bankr. Administrator Names 7-Member Creditors' Panel
----------------------------------------------------------------
Teresa R. Jacobs, the Bankruptcy Administrator for the Middle
District of Alabama, pursuant to 11 U.S.C. Sec. 1102(a) and (b),
appointed seven unsecured creditors to serve on the Official
Committee of Unsecured Creditors of The Money Tree Inc., et al.
The Creditors Committee members are:
1. John N. McClendon
137 Pye Pond Road
Leesburg, GA 31763
Tel: (229) 432?6510
2. John H. Edgeman
P.O. Box 1539
Rocky Face, GA 30740
Tel: (706) 275?9001
3. Henry Flournoy
105 Pirates Cove
St. Simmons Island, GA 31522
Tel: (912) 571?6949
4. Pink Swink
796 North Etowah Drive
Canton, GA 30114
Tel: (770) 479?4387
5. William D. Bragg
121 Greenwood Drive
Warner Robbins, GA 31093
Tel: (478) 923?2561
6. Catherine T. Brown
2289 Brockton Loop
Jefferson, GA 30549
Tel: (706) 367?1575
7. U.S. Bank National Association
c/o Cindy Woodward, Vice President
60 Livingston Avenue
St. Paul, MN 55107
Tel: (651) 495?3907
About Money Tree
Bainbridge, Georgia-based The Money Tree Inc. --
http://www.moneytreeinc.com/-- operates a network of lending
branches across the Southeast, concentrated in Georgia, Florida
and Alabama. The Company and four affiliates filed for Chapter 11
bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on
Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc.,
The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc.,
and The Money Tree of Georgia of Georgia Inc. Judge William R.
Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr.
Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow,
P.C., serves as the Debtors' counsel. The Debtors hired Warren,
Averett, Kimbrough & Marino, LLC, as restructuring advisors.
Money Tree's consolidated balance sheet reported $34,859,189 in
assets, $92,655,010 in liabilities, and $57,795,821 in total
stockholders' deficit. The petitions were signed by Biladley D.
Bellville, president.
The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is
not a party to the bankruptcy filing and intends to operate its
business in the ordinary course.
MONEY TREE: Unsec. Creditor Wants Case Moved to M.D. of Georgia
---------------------------------------------------------------
Ruby E. Aultman, one of the 20 largest unsecured creditors of the
The Money Tree Inc. debtor-affiliate, Money Tree of Georgia, Inc,
asks the U.S. Bankruptcy Court for the Middle District of Alabama
to transfer venue of the Debtors' bankruptcy cases to the U.S.
Bankruptcy Court for the Middle District of Georgia.
The Debtors have selected venue in the Middle District of Alabama
for the other Money Tree entities by virtue of the of the other
Debtors' status as affiliates on Small Loans, Inc.
Ms. Aultman is supporting the motion filed on Jan. 9, 2012, by
George L. Beck, Jr., United States Attorney for the Middle
District of Alabama on behalf of the United States Department of
the Treasury, and its agency, the United States Internal Revenue
Service, asking the Court to transfer venue of the Debtors'
bankruptcy cases to the U.S. Bankruptcy Court for the Middle
District of Georgia.
The Debtor's address in each petition is identified as 114 South
Broad Street, Bainbridge, Georgia 39817. Bainbridge is located in
Decatur County, Georgia, situated in the Middle District of
Georgia. Each of the Debtors was organized and incorporated in
and under the laws of the State of Georgia. The Debtors'
principal office and center of business is located in Bainbridge,
Georgia, with the remainder of its business located throughout the
southeastern United States. Each of the Debtors list the
individual debtor's "County of Residence or of the Principal Place
of Business" as Decatur County, Georgia, on their respective
petitions.
As shown by the Debtors "skeletal" filings and the affidavit of
Bradley D. Bellville filed in support of the "first-day motions",
over 95% of the Debtors' creditors, representing over 95% of the
unsecured claims, are located in the State of Georgia. All
subordinated debentures, which represent the almost the entirety
of all debt in these cases, were issued by The Money Tree, Inc.,
or The Money Tree of Georgia and purchased by residence of the
State of Georgia.
The Debtors have retained the law firm of Baker, Donaldson,
Bearman, Caldwell & Berkowitz, P.C., which maintains its primary
office at 420 20th Street North, Suite 1600, Birmingham, Alabama
35203. The Debtor's counsel also maintains an office in the
Middle District of Georgia.
Ms. Aultman is represented by:
STONE & BAXTER, LLP
Christopher W. Terry
Fickling & Company Building
577 Mulberry Street, Suite 800
Macon, Georgia 31201
Tel: (478) 750-9898
Fax: (478) 750-9899
E-mail: cterry@stoneandbaxter.com
About Money Tree
Bainbridge, Georgia-based The Money Tree Inc. --
http://www.moneytreeinc.com/-- operates a network of lending
branches across the Southeast, concentrated in Georgia, Florida
and Alabama. The Company and four affiliates filed for Chapter 11
bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on
Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc.,
The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc.,
and The Money Tree of Georgia of Georgia Inc. Judge William R.
Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr.
Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow,
P.C., serves as the Debtors' counsel. The Debtors hired Warren,
Averett, Kimbrough & Marino, LLC, as restructuring advisors.
Money Tree's consolidated balance sheet reported $34,859,189 in
assets, $92,655,010 in liabilities, and $57,795,821 in total
stockholders' deficit. The petitions were signed by Biladley D.
Bellville, president.
The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is
not a party to the bankruptcy filing and intends to operate its
business in the ordinary course.
NEDAK ETHANOL: Ascendant Completes Capital Restructuring
--------------------------------------------------------
Ascendant Financial Partners LLC completed a capital restructuring
for NEDAK Ethanol, LLC, which included the amendment of NEDAK's
credit agreements and the closing of a private equity offering.
Ascendant acted as NEDAK's exclusive financial advisor on the
transaction.
NEDAK operates a 44 million gallon ethanol plant in Atkinson,
Nebraska. The company consumes 18 million bushels of corn
originated from the local corn producers and sells 420,000 tons of
distillers' grain to nearby cattle feeders and feedlots. The
plant is a strong contributor to the Atkinson community. The
capital restructuring reduces NEDAK's debt burden and positions
the company for a successful future.
NEDAK's restructuring consisted of amending its senior loan
facility with AgCountry Farm Credit Services, FLCA (AgCountry) and
its TIF loan with Arbor Bank of Omaha. As part of the
restructuring, NEDAK also raised $10 million of equity capital
from new and existing investors with over half of the new equity
coming from existing members and local producers. In connection
with the restructuring, NEDAK also entered into an Asset
Management Agreement with Tenaska BioFuels, LLC.
Jerome Fagerland, CEO of NEDAK stated, "Ascendant's knowledge and
experience played an important role in assisting NEDAK in
preserving shareholder value and was especially helpful in working
with the senior lender group."
With regard to the relationship with TBF, Jerome Fagerland said
"This AMA is a positive step in the right direction for NEDAK.
The company has been through challenging times, along with the
rest of the ethanol industry, since the second quarter of 2010.
We are looking forward to working with TBF, which has the
financial wherewithal to manage through volatile commodity
markets."
"We are excited to be working with NEDAK and its management team
who have done a great job in improving yields and making this
facility more cost effective. With our AMA agreement in place it
will assist NEDAK in maintaining a balanced physical or financial
position on both feedstocks and finished products; with a goal of
improving NEDAK's financial liquidity and production margin," said
Dave Neubauer, vice president and general manager of TBF.
Mark Jepson, executive vice president and chief credit officer at
Arbor Bank, stated "We believe that the addition of TBF and the
restructuring of the credit facilities is a positive step in the
improving quality of our loan and the future of NEDAK."
About NEDAK Ethanol
Atkinson, Neb.-based NEDAK Ethanol, LLC
-- http://www.nedakethanol.com/-- operates a 44 million gallon
per year ethanol plant in Atkinson, Nebraska, and produces and
sells fuel ethanol and distillers grains, a co-product of the
ethanol production process. Sales of ethanol and distillers
grains began in January 2009.
The Company reported a net loss of $2.08 million on $94.77 million
of revenue for the year ended Dec. 31, 2010, compared with a net
loss of $9.23 million on $67.53 million of revenue during the
prior year.
The Company reported a net loss of $3.56 million on $114.10
million of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $3.61 million on $66.82 million
of revenue for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$80.94 million in total assets, $50.97 million in total
liabilities, all current, and $29.96 million in total members'
equity.
As reported by the TCR on April 7, 2011, McGladrey & Pullen, LLP,
in Sioux Falls, South Dakota, expressed substantial doubt about
the Company's ability to continue as a going concern following the
Company's 2010 results. The independent auditors noted that there
is uncertainty as to the Company's ability to cure credit
agreement defaults and, therefore, to secure additional funds
needed to fund ongoing operations.
Bankruptcy Warning
The Company entered into the following agreements with AgCountry
Farm Credit Services, FLCA, regarding the Company's senior secured
credit facility for the provision of construction and permanent
debt financing for our ethanol plant: a Master Credit Agreement
dated Feb. 14, 2007, and several supplements including the Seventh
Supplement and Forbearance agreement to the Master Credit
Agreement effective Feb. 1, 2011. As of Sept. 30, 2011, the
Company had $34,000,008 outstanding under the Facility.
The Company is actively negotiating with the Lender to convert the
construction financing to operating lines and to modify the loan
covenants to reflect current industry economics. These
negotiations have taken a considerable amount of time due to the
number of lenders involved, the Company's overall liquidity and
the interests of a diverse group of stakeholders. The Company
cannot predict whether the Lender will agree to modify any of
those covenants, but the Company does expect a resolution soon.
To the extent the Company is unable to modify those covenants, it
may not be possible to meet them unless the commodities markets
the Company operates in move in favorable directions. Until the
Company is able to comply with the covenants under the Loan
Agreements, the Lender may take a variety of actions, including
immediately accelerating the repayment of all outstanding debt
under the Loan Agreements. Such acceleration could entitle the
Lender to liquidate all of the Company's assets, and would likely
lead to the Company's bankruptcy, reorganization or winding up of
its affairs.
NEXT 1: Posts $2.8 Million Net Loss in Nov. 30 Quarter
------------------------------------------------------
Next 1 Interactive, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $2.8 million on $410,669 of revenues for
the three months ended Nov. 30, 2011, compared with a net loss of
$5.5 million on $573,126 of revenues for the three months ended
Nov. 30, 2010l
For the nine months ended Nov. 30, 2011, the Company has reported
a net loss of $8.0 million on $1.1 million of revenues, compared
with a net loss of $10.2 million on $1.9 million of revenues for
the nine months ended Nov. 30, 2010.
The Company's balance sheet at Nov. 30, 2011, showed $3.0 million
in total assets, $13.0 million in current liabilities, and a
stockholders' deficit of $10.0 million.
As reported in the TCR on June 22, 2011, Sherb & Co., LLP, in Boca
Raton, Fla., expressed substantial doubt about Next 1
Interactive's ability to continue as a going concern, following
the Company's results for the fiscal year ended Feb. 28, 2011.
The independent auditors noted that the Company had an accumulated
deficit of $53.2 million and a working capital deficit of
$13.4 million at Feb. 28, 2011, net losses for the year ended
Feb. 28, 2011, of $23.2 million and cash used in operations during
the year ended Feb. 28, 2011, of $9.6 million.
A copy of the Form 10-Q is available for free at:
http://is.gd/aWDg1D
Weston, Fla.-based Next 1 Interactive, Inc., is an interactive
media company that focuses on video and media advertising over
Internet, Mobile and Television platforms. Historically, the
Company operated through two divisions, media and travel. A third
(real estate) division is anticipated to be launching during the
fourth quarter of fiscal 2012.
OPEN RANGE: Completes Liquidation of Remaining Assets
-----------------------------------------------------
American Bankruptcy Institute reports that Open Range Open Range
Communications Inc. has concluded the liquidation of its assets as
the telecommunications company sold the remainder of its assets
during an online auction on Jan. 19 and 20, 2012.
About Open Range
Greenwood Village, Colo.-based Open Range Communications Inc., a
provider of wireless broadband services to 26,000 rural customers
in 12 states, filed a Chapter 11 petition (Bankr. D. Del. Case No.
11-13188) on Oct. 6, 2011, to either sell the business or shut
down and liquidate. Open Range disclosed about $115.1 million in
assets and $102.8 million in debts. Open Range started its WiMax
broadband and voice service in late 2009, backed by a $267 million
loan from the U.S. Department of Agriculture's Rural Utility
Service and $100 million invested by One Equity Partners, a
financing arm of JPMorgan Chase & Co.
Judge Kevin J. Carey presides over the case. Marion M. Quirk,
Esq., at Cole, Schotz, Meisel, Forman & Leonard, serves as
bankruptcy counsel. Logan & Co. serves as claims agent. FTI
Consulting, Inc., will provide a chief restructuring officer,
Michael E. Katzenstein; an associate chief restructuring officer,
Chris Lewand; and hourly temporary staff. The petition was signed
by Chris Edwards, chief financial officer.
On filing for Chapter 11 protection, Open Range said it would shut
down and liquidate the network if a buyer couldn't be found.
Roberta A. DeAngelis, the United States Trustee for Region 3,
pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed seven
unsecured creditors to serve on the Official Committee of
Unsecured Creditors of Open Range Communications Inc.
In December 2011, Ann Schrader at the Denver Post reported that
Open Range has shut down operations after failing to get the
broadcast spectrum it needed, problems with network quality and
vendors, and the "sporadic" flow of money from a $267 million
federal loan, of which Open Range owes a balance of $73.5 million.
Open Range hired RB Capital LLC and Heritage Global Partners Inc.
as auctioneers and sales agents to conduct an auction of the
Debtor's assets.
PERRY COUNTY: Green Group Substitutes as Purchaser of Assets
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Alabama has
granted the joint motion of James M. Grady, as Liquidating Trustee
for Perry Uniontown Ventures I, LLC, Perry County Associates, LLC,
and U.S. Bank, N.A., as indenture trustee, to amend the Court's
Dec. 2, 2011 Order to change the purchaser of certain assets of
the Liquidating Trust from Arrowhead III, LLC, to Green Group
Holdings, LLC, or its assignees, Howling Coyote, LLC, and Central
Alabama, LLC because of the failure of AH3 to close the sale.
At the auction that was held on Nov. 30, 2011, AH3 was the highest
bidder for the Sale Assets. Green Group Holdings, LLC, was also a
bidder at the auction that was held on Nov. 30, 2011, but failed
to submit the highest bid.
As ordered by the Court, Green Group will be the purchaser of the
sale assets for $9,000,000.
About Perry County Associates
Atlanta, Georgia-based Perry County Associates, LLC, owns and
operates the Arrowhead Landfill in Uniontown, Alabama (Perry
County). It filed for Chapter 11 bankruptcy protection on
Jan. 26, 2010 (Bankr. S.D. Ala. Case No. 10-00277). Affiliate
Perry Uniontown Ventures I, LLC, filed a separate Chapter 11
bankruptcy petition (Bankr. S.D. Ala. Case No. 10-00276). Jeffery
J. Hartley, Esq. at Helmsing, Leach, Herlon, Newman & Rouse,
assists the Debtors in their restructuring effort. PCA disclosed
$0 in assets and $10,793 in liabilities. Perry Uniontown
disclosed $15,009,538 in assets and $67,489,007 in liabilities.
On Aug. 16, 2010, the Debtors filed their Joint Plan of
Reorganization and Disclosure Statement, as amended pursuant to
the Court's Order approving the Disclosure Statement entered on
Oct. 8, 2010.
On Dec. 15, 2010, the Court entered an order confirming the Plan.
The Court entered an amended order confirming the Plan on Dec. 22,
2010. On May 20, 2011, the Court entered an order approving
certain modifications to the Plan and set May 21, 2011, as the
Effective Date of the Plan
Under the Plan, the Debtors were required to meet certain
milestones including payment in full of the secured debt owed to
the holders of the Notes by October 2011. In the event that those
milestones were not met, the Plan provided that the assets of PUV
and PCA would be placed into a Liquidating Trust and a Liquidating
Trustee would be appointed.
On Sept. 8, 2011, this Court entered an order approving a
settlement agreement between the Debtors, the noteholders and
certain other parties, which, among other things, provided for the
transfer of PUV's assets into the Liquidating Trust and the
appointment of the Liquidating Trustee.
David J. Messina, Esq., and Fernand L. Laudumiey, IV, Esq.,
represent James M. Grady, the Liquidating Trustee of PUV and PCA,
as counsel.
PFF BANCORP: Former Execs Ink $8MM Deal to End Securities Suit
--------------------------------------------------------------
Bibeka Shrestha at Bankruptcy Law360 reports that two former PFF
Bancorp Inc. executives and an insurer on Friday asked a Delaware
bankruptcy court to approve a proposed $8.25 million settlement
with a class of thousands of PFF investors claiming they were
deceived about risky lending practices.
According to Law360, the proposed deal would resolve a suit in
which a slew of named plaintiffs including Oregon Laborers Pension
Trust Fund accused former PFF CEO Kevin McCarthy and former chief
operating officer Gregory Talbott of artificially inflating the
company's stock price and defrauding shareholders.
About PFF Bancorp
PFF Bancorp Inc. -- http://www.pffbank.com/-- was a non-
diversified unitary savings and loan holding company within the
meaning of the Home Owners' Loan Act with headquarters formerly
located in Rancho Cucamonga, California. Bancorp is the direct
parent of each of the remaining Debtors.
Prior to filing for bankruptcy, Bancorp was also the direct parent
of PFF Bank & Trust, a federally chartered savings institution,
and said bank's subsidiaries. PFF Bank & Trust was taken over by
regulators in November 2008, with the deposits transferred by the
Federal Deposit Insurance Corp. to U.S. Bank NA.
PFF Bancorp Inc. and its affiliates sought Chapter 11 protection
on Dec. 5, 2008 (Bankr. D. Del. Case No. 08-13127 to
08-13131). Chun I. Jang, Esq., and Paul N. Heath, Esq., at
Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy
counsel. Kurtzman Carson Consultants LLC serves as the Debtors'
claims agent. Jason W. Salib, Esq., at Blank Rome LLP, represents
the official committee of unsecured creditors as counsel.
PMI GROUP: U.S. Trustee Objects to Employee Incentive Payment
-------------------------------------------------------------
BankruptcyData.com reports that the U.S. Trustee assigned to the
PMI Group case filed with the U.S. Bankruptcy Court an objection
to the Debtors' motion for approval of (i) assumption of
employment contracts, (ii) approval of incentive payments for the
employees and (iii) approval of severance payments.
According to the Trustee, "The Motion is a motion to assume an
executory contract entered into prior to the filing of the
Petition. A motion to assume is not governed by Section 363. A
motion to assume is governed by Section 365 of the Bankruptcy
Code. The assumption of an executory contract may not be used to
circumvent other provisions of the Bankruptcy Code. This motion
attempts to circumvent the provisions of Section 503(c) in this
manner. Second, the proposed Incentive Payments are tied solely to
the occurrence of events and are of the sort typically rejected by
the Courts. Third, the proposed Severance Payments do not comply
with the formula contained in Section 503(c)(2) and must be
rejected."
The Court scheduled a Feb. 7, 2012, hearing on the matter.
About PMI Group
Del.-based The PMI Group, Inc., is an insurance holding company
whose stock had, until Oct. 21, 2011, been publicly-traded on the
New York Stock Exchange. Through its principal regulated
subsidiary, PMI Mortgage Insurance Co., and its affiliated
companies, the Debtor provides residential mortgage insurance in
the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. The Debtor had total assets of
$225 million and total debts of $736 million. Stephen Smith
signed the petition as chairman, chief executive officer,
president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP. Sullivan & Cromwell, LLP,
and Osborn & Maledon, P.A., serve as special counsel to the
Debtor.
PMI GROUP: Court Sets Feb. 24 General Claims Bar Date
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
established Feb. 24, 2012, at 4:00 p.m. as the general bar date
for filing of proofs of claim in the bankruptcy case of The PMI
Group, Inc.
The bar date for governmental units is May 21, 2012, at 4:00 p.m.
If, on or after the date on which the Debtor serves the Bar Date
Notice, the Debtor amends or supplements its Schedules (a) to
reduce the undisputed, noncontingent, or liquidated amount of a
claim, (b) to change the nature or characterization of a claim or
(c) to add a new claim to the Schedules, the affected claimant
will file a Proof of Claim or amend any previously filed Proof of
Claim in respect of the amended scheduled claim so that it is
received on or before the later of (i) the General Bar Date or
(ii) 21 days after the claimant is served with notice of the
applicable amendment or supplement to the Schedules.
In the event the Debtor rejects executory contracts or unexpired
leases pursuant to Section 365 of the Bankruptcy Code, proofs of
claim in connection with Rejection Damages will be filed so that
they are received on or before the later of (a) the General Bar
Date or (b) 30 days after the effective date of such court order.
Proofs of Claim must be sent by first-class mail, overnight
courier, or hand delivery to PMI Claims Processing Center c/o
Kurtzman Carson Consultants LLC, at 2335 Alaska Ave., El Segundo,
CA 90245.
About PMI Group
Del.-based The PMI Group, Inc., is an insurance holding company
whose stock had, until Oct. 21, 2011, been publicly-traded on the
New York Stock Exchange. Through its principal regulated
subsidiary, PMI Mortgage Insurance Co., and its affiliated
companies, the Debtor provides residential mortgage insurance in
the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. The Debtor had total assets of
$225 million and total debts of $736 million. Stephen Smith
signed the petition as chairman, chief executive officer,
president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP. Sullivan & Cromwell, LLP,
and Osborn & Maledon, P.A., serve as special counsel to the
Debtor.
POINT BLANK: Seeks to Expand Venable's Scope of Work
----------------------------------------------------
BankruptcyData.com reports that Point Blank Solutions filed with
the U.S. Bankruptcy Court a supplemental motion to retain Venable
(Contact: Nancy R. Grunberg) as special government contracting,
litigation and government investigation counsel to clarify and
expand the scope of work. Venable will be employed at these
hourly rates: partner and counsel at $420 to $685, associate at
$280 to $475, paraprofessionals and staff at $190 to $295.
About Point Blank
Headquartered in Pompano Beach, Florida, Point Blank Solutions,
Inc. -- http://www.pointblanksolutionsinc.com/-- designs and
produces body armor systems for the U.S. Military, Government and
law enforcement agencies, as well as select international markets.
The Company maintains facilities in Pompano Beach, Florida, and
Jacksboro, Tennessee.
The Company's former chief executive officer and chief operating
officer were convicted in September 2010 of orchestrating a
$185 million fraud.
Point Blank Solutions, formerly DHB Industries, filed for
Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on
April 14, 2010. Laura Davis Jones, Esq., Alan J. Kornfeld, Esq.,
David M. Bertenthal, Esq., and Timothy P. Cairns, Esq., at
Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to
the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves
as corporate counsel. T. Scott Avila of CRG Partners Group LLC is
the restructuring officer. Epiq Bankruptcy Solutions serves as
claims and notice agent.
The U.S. Trustee has appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Equity Security
Holders in the case. Ian Connor Bifferato, Esq., and Thomas F.
Driscoll III, Esq., at Bifferato LLC; and Carmen H. Lonstein,
Esq., Andrew P.R. McDermott, Esq., and Lawrence P. Vonckx, Esq.,
at Baker & McKenzie LLP, serve as counsel for the Official
Committee of Equity Security Holders. Robert M. Hirsh, Esq., and
George P. Angelich, Esq., at Arent Fox LLP, serve as counsel to
the Creditors Committee, and Frederick B. Rosner, Esq., and
Brian L. Arban, Esq., at the Rosner Law Group LLC, serve as
co-counsel.
RANCHO LAS FLORES: Sec. 341 Creditors' Meeting Set for Feb. 29
--------------------------------------------------------------
The U.S. Trustee for the Central District of California will
convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a)
in the chapter 11 cases of Rancho Las Flores, LLC, on Feb. 29,
2012, at 3:00 p.m. at RM 1-159, 411 W Fourth St., Santa Ana,
California.
This is the first meeting of creditors required under Section
341(a) of the U.S. 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.
Dana Point, California-based Rancho Las Flores LLC filed for
Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-10764) on
Jan. 19, 2012. Judge Erithe A. Smith presides over the case.
Todd C. Ringstad, Esq., at Ringstad & Sanders LLP, serves as the
Debtor's counsel. It scheduled $168,276,058 in assets and
$58,080,221 liabilities.
Rancho Las Flores owns parcels of land identified as Rancho Las
Flores in Hesperia, California (valued at $166.3 million); a 124-
acre Weirick property in Hesperia ($570,000); the Afton Canyon
Property in Baker, California ($70,400); and the Derkermus
Property in San Bernardino County ($162,175). It has
communications site license agreements for cell tower operations
with AT&T Wireless and Southern California Edison Company. The
Donald W. Hutchings Living Trust owns 72% of Rancho Las Flores.
Donald W. Hutchings, as president of Countryside Properties Inc.,
the manager of the Debtor, signed the Chapter 11 petition.
A $55.7 million claim by RE Loans LLC is secured by the Rancho Las
Flores property. RE Loans LLC, which for many years was providing
financing to home builders and developers of real property,
together with affiliates are debtors in separate Chapter 11
proceedings (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-
35869) filed Sept. 13, 2011.
REALOGY CORP: Proposes Two Series of Notes to Pay Down its Debt
---------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Realogy Corp., the
Apollo Global Management-backed owner of the Coldwell Banker and
Century 21 real-estate brands, proposed issuing two series of
senior secured notes in a move to pay down its debt.
About Realogy Corp.
Realogy Corp. -- http://www.realogy.com/-- a global provider of
real estate and relocation services with a diversified business
model that includes real estate franchising, brokerage, relocation
and title services. Realogy's world-renowned brands and business
units include Better Homes and Gardens Real Estate, CENTURY 21,
Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group,
ERA, Sotheby's International Realty, NRT LLC, Cartus and Title
Resource Group. Collectively, Realogy's franchise systems have
around 15,000 offices and 270,000 sales associates doing business
in 92 countries around the world.
Headquartered in Parsippany, N.J., Realogy is owned by affiliates
of Apollo Management, L.P., a leading private equity and capital
markets investor. Realogy fully supports the principles of the
Fair Housing Act.
Realogy reported a net loss of $285 million on $3.16 billion of
net revenues for the nine months ended Sept. 30, 2011, compared
with a net loss of $7 million on $3.12 billion of net revenues for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $7.89
billion in total assets, $9.24 billion in total liabilities, and a
$1.34 billion total deficit.
Realogy has 'Caa2' corporate family rating and 'Caa3' probability
of default rating, with positive outlook, from Moody's. The
rating outlook is positive. Moody's said in January 2011 that the
'Caa2' CFR and 'Caa3' PDR reflects very high leverage, negative
free cash flow and uncertainty regarding the timing and strength
of a recovery of the residential housing market in the U.S.
Moody's expects Debt to EBITDA of about 14 times for the 2010
calendar year. Despite the recently completed and proposed
improvements to the debt maturity profile, the Caa2 CFR continues
to reflect Moody's view that current debt levels are unsustainable
and that a substantial reduction in debt levels will be required
to stabilize the capital structure.
In February, Standard & Poor's Ratings Services raised its
corporate credit rating on Realogy Corp. to 'CCC' from 'CC'. The
rating outlook is positive.
REDCO DEVELOPMENT: Amends Plan to Delete Injunction Against Owner
-----------------------------------------------------------------
Redco Development Co., LLC, has filed a third amended disclosure
statement in support of its plan of reorganization dated
Jan. 17, 2012.
The Debtor filed a Second Amended Disclosure Statement and Second
Amended Plan on Aug. 2, 2011. At a confirmation hearing on Oct.
4, 2011, the Court found that an injunction provision which
enjoined creditors from collecting their claims against the
Debtor's owner, Russ Dale, violated the Bankruptcy Code and Ninth
Circuit law. The Court noted that other than the injunction "the
Debtor has satisfied the legal requirements for confirmation under
[11 U.S.C.] Section 1129. Debtor has prepared a Third Amended
Disclosure Statement and Third Amended Plan of Reorganization
which has removed the injunction provision that the Court found to
violate the Bankruptcy Code.
Under the Plan, the Debtor will continue to own and operate the
Miller Building and McCall Condominiums to generate the maximum
revenue possible from those properties while maintaining the
condition of the buildings. Those banks holding claims secured by
the buildings will be paid from that revenue. The reduction in
the interest paid to each bank will result in the Debtor
generating some net revenue. The net revenue will be retained for
other payments required by the plan.
With the reduction in monthly payments and greater revenue from
the new tenants in the McCall Condominiums, the Debtor should be
generating net revenue and will need no further cash contributions
from Russ Dale, the owner. However, Mr. Dale has demonstrated his
ability to make contributions to the Debtor during the course of
this case. If funds are needed, Mr. Dale will contribute funds
from the Plaza Building, an apartment building in downtown Medford
that through the first three months of 2011 has generated net
revenue of $31,176.14.
The Debtor will collect the Northgate Note when due, and pay the
claims of Class 2 and Class 4, the administrative claim of its
attorneys as approved by the Court (estimated to be $110,000), and
any balance owing on the Class 1 claims. The Debtor will retain
$662,500 as a reserve to pay the state and federal taxes
associated with the payoff of the Note. The remaining balance of
the Northgate Note will be paid pro-rata on Class 9 claims.
Primarily because of the reputation and financial strength of Guy
Farthing, its partner in Northgate LLC, the Debtor anticipates
that the Northgate Note will be paid when due, and, if not, the
Debtor will be successful in legal action to collect the Note.
The guarantors have significant real estate and other business
holdings. Also, work continues on building the Northgate Mall,
and recently the City approved Amendments to the Conditions of
Approval to the Northgate Map Amendment to allow "big box" stores
to be built in Northgate Mall and allow the builder to "phase-in"
the off-site traffic mitigation improvements required as part of
the approval.
The balance remaining owing to the Class 9 creditors will be paid
from the additional revenues generated from operations. However,
if the additional revenues fall short, the Debtor can use funds
from the payoff of the Archerd & Dresner Note to make up the
shortfall. Furthermore, any funds left after payment of taxes
from the tax reserve created by the payment of the Northgate Note
will be held and used to pay the Class 9 claims.
A copy of the third amended disclosure statement is available for
free at:
http://bankrupt.com/misc/REDCO_DEVELOPMENT_ds_3rdamended.pdf
As reported in the Troubled Company Reporter on Dec. 20, 2011,
Chief Bankruptcy Judge Frank R. Alley III denied confirmation of
the Second Amended Plan of Reorganization of Redco Development
Co., LLC, saying the injunction provided for by the Plan against a
non-debtor guarantor of the Debtor violates 11 U.S.C. Sec. 524(e)
and relevant case law in the Ninth Circuit.
Secured creditors Sterling Savings Bank and Virann Investments,
LLC. At the confirmation hearing on Oct. 4, 2011, Sterling
reached a settlement with the Debtor disposing of its objection.
Virann disputes the injunction provision.
The Debtor's Second Amended Plan provides for an injunction
enjoining creditors from attempting to collect their claims
against the Debtor's principal and guarantor, Russ Dale, or
against any of his property. The injunction would be dissolved
upon the request of a creditor when all payments under the Plan to
that creditor have been completed, or there is a default under the
Plan with respect to the Plan's treatment of that creditor and the
default has not been cured after 10 days' notice. Secured
creditors will be paid over periods from 10 to 30 years under the
Plan and unsecured creditors with claims over $1,500 will be paid
in full five years after the effective date of the Plan.
Judge Alley noted that the Court of Appeals for the Ninth Circuit
has held that a bankruptcy court lacks the jurisdiction and the
power under 11 U.S.C. Sec. 1051 to enjoin permanently, i.e.,
beyond confirmation of a plan of reorganization, a creditor from
enforcing a state law claim against nondebtor guarantors of the
debtor. In re American Hardwoods, 885 F.2d 621 (9th Cir. 1989).
Whether a bankruptcy court has jurisdiction and power to issue a
temporary injunction in that situation, however, was left
unanswered. That answer was delivered by the Bankruptcy Appellate
Panel in In re Rohnert Park Auto Parts, Inc., 113 B.R. 610 (9th
Cir. BAP 1990), which held that the restrictions set out in
American Hardwoods applied to temporary post-confirmation
injunctions as well.
Judge Alley also noted that the confirmed plan in Rohnert Park
enjoined actions against co-debtors of the debtor for five years
after confirmation. For purposes of its analysis, the BAP
assumed, arguendo, that section 1052 provides the court
jurisdiction to enjoin actions against non-debtors. It ruled,
however, that the temporary injunction violated Code Sec. 5243,
and that Code Sec. 105 does not provide the bankruptcy court with
the power to issue an injunction which is inconsistent with the
more specific provision of the Bankruptcy Code.
Judge Alley said he is bound by Rohnert Park's holding. Judge
Alley, however, said that other than the matter of the injunction,
the Debtor has satisfied the legal requirements for confirmation
under Sec. 1129. He gave the Debtor 30 days to file an amended
plan.
A copy of Judge Alley's Dec. 15, 2011 Memorandum Opinion is
available at http://is.gd/0dCHEefrom Leagle.com.
About Redco Development Co., LLC
Redco Development Co., LLC, in Medford, Oregon, filed for Chapter
11 bankruptcy protection (Bankr. D. Ore. Case No. 10-64783) on
Aug. 3, 2010. James Ray Streinz, Esq., in Portland, Oregon,
assists the Debtor in its restructuring effort. The Debtor
estimated its assets at $10 million to $50 million and debts at
$1 million to $10 million.
The Debtor has a Second Amended Plan and Disclosure Statement
dated Aug. 2, 2011, which incorporates a settlement with RA Global
LLC. The Plan provides that all creditors will be paid in full.
Full-text copies of the Aug. 2 Plan and Disclosure Statement,
including certain exhibits, are available for free at:
http://bankrupt.com/misc/REDCO_PlannDSAug2.PDF
In October 2011, Redco settled plan objections filed by Sterling
Savings Bank. The accord grants Sterling a $1.75 million claim
against the Debtor.
RIM DEVELOPMENT: U.S. Trustee Wants Ch. 11 Converted or Dismissed
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Kansas will convene
a hearing on Feb. 9, 2012, at 10:30 a.m., to consider the motion
to convert or in alternative dismiss the Chapter 11 case of Rim
Development, LLC.
Richard A. Wieland, the United States Trustee for Region 20,
requested the conversion of the Debtor's case because:
a) the Debtor fails to file an acceptable plan and disclosure
statement within a reasonable time; and
b) the Debtor is delinquent on its payment of the statutory
fees in the amount of $9,425.14 for the third quarter of
2011.
The U.S. Trustee is represented by:
Joyce Owen, Esq.
301 North Main, Suite 1150
Wichita, Kansas 67202
Tel: (316) 269-6212
E-mail: Joyce.Owen@usdoj.gov
Roca, Nebraska-based RIM Development, LLC, sought Chapter 11
protection (Bankr. D. Kan. Case No. 10-10132) on Jan. 22, 2010.
Susan G. Saidian, Esq., at Case, Moses, Zimmerman and Martin,
P.A., in Wichita, Kansas, represents the company. The Debtor
disclosed $20.2 million in assets and $11.6 million in liabilities
in its Amended Schedules of Assets and Liabilities delivered to
the Bankruptcy Court in March 2010.
SBARRO LLC: S&P Assigns 'B-' Corp. Rating After Bankruptcy Exit
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Sbarro LLC. "At the same time, we assigned our
'B+' issue-level rating, with a '1' recovery rating, to the
company's $62.3 million first-out term loan facility due 2016.
The '1' recovery rating indicates our expectation of a very high
(90% to 100%) recovery of principal in the event of a payment
default," S&P said.
"In addition, we assigned a 'CCC+' bank loan rating, with a '5'
recovery rating, to Sbarro's $75 million second-out term loan
facility due 2016. The '5' recovery rating indicates our
expectation for a modest (10% to 30%) recovery of principal in the
event of a payment default," S&P said.
"The rating action reflects Sbarro's emergence from Chapter 11
bankruptcy protection on Nov. 28, 2011, and our subsequent review
of the final terms and documentation," S&P said.
On Nov. 17, 2011, the U.S. Bankruptcy Court overseeing the Chapter
11 proceedings of Sbarro issued its order confirming the company's
reorganization plan. Under the plan, Sbarro's capital structure
consists of a $62.3 million first-out term loan and a $75 million
second-out term loan facility.
"The ratings reflect our view that postemergence Sbarro will
remain highly leveraged," said Standard & Poor's credit analyst
Mariola Borysiak. "Although the capital structure of the
reorganized company has about 70% less debt, the pro forma ratio
of total debt to EBITDA remains elevated at over 8x, and
EBITDA coverage of interest is thin at about 1.2x."
Although lower debt levels are more manageable for Sbarro, the
company still faces substantial operating lease commitments, as it
achieved only modest rent savings through renegotiations with its
landlords. In addition, Standard & Poor's believes Sbarro will
accrue a portion of its interest on the second-out term facility
to invest into a turnaround program for its faltering operations.
The stable outlook is based on Standard & Poor's belief that a
more manageable capital structure will allow the company to focus
on its turnaround strategy.
"Although we do not expect a significant improvement of credit
measures, we believe sales trends and profitability will modestly
improve over the near term," said Ms. Borysiak. "We also believe
that liquidity will remain adequate over the next 12 months."
SEQUENOM INC: Files Amended No.1 to $150MM Securities Offering
--------------------------------------------------------------
Sequenom, Inc., filed with the U.S. Securities and Exchange
Commission amendment no.1 to Form S-3 registration statement
relating to the Company's offer to sell up to $150,000,000 of any
of the common stock, preferred stock, debt securities and
warrants, either individually or in combination. The Company may
also offer common stock or preferred stock upon conversion of debt
securities, common stock upon conversion of preferred stock, or
common stock, preferred stock or debt securities upon the exercise
of warrants.
Securities may be sold by the Company to or through underwriters
or dealers, directly to purchasers or through agents designated
from time to time.
The Company's common stock is listed on The NASDAQ Global Market
under the symbol "SQNM." On Dec. 16, 2011, the last reported sale
price of the Company's common stock on The NASDAQ Global Market
was $3.73 per share.
A full-text copy of the amended prospectus is available at:
http://is.gd/snMO7z
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a
life sciences company committed to improving healthcare through
revolutionary genetic analysis solutions. Sequenom develops
innovative technology, products and diagnostic tests that target
and serve discovery and clinical research, and molecular
diagnostics markets. The company was founded in 1994 and is
headquartered in San Diego, California.
Sequenom reported a net loss of $120.85 million on $47.45 million
of total revenue for the year ended Dec. 31, 2010, compared with a
net loss of $71.01 million on $37.86 million of total revenue
during the prior year.
The Company also reported a net loss of $51.98 million on
$40.42 million of total revenues for the nine months ended Sept.
30, 2011, compared with a net loss of $98.82 million on $33.70
million of total revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$152.99 million in total assets, $42.13 million in total
liabilities and $110.85 million in total stockholders' equity.
Ernst & Young LLP of San Diego, California, in its audit report
attached to the 2010 financial statements, did not include a going
concern qualification for Sequenom. E&Y, in its report on the
2009 results, expressed substantial doubt against Sequenom's
ability as a going concern, noting that the Company "has incurred
recurring operating losses and does not have sufficient working
capital to fund operations through 2010."
SHAMROCK-SHAMROCK: Wants to Employ Krimsky as Special Counsel
-------------------------------------------------------------
Shamrock-Shamrock Inc. asks the U.S. Bankruptcy Court for the
Middle District of Florida for authorization to employ:
Beth-Ann Krimsky, Esq.,
GREENSPOON MARDER, P.A.
200 East Broward Boulevard, Suite 1500
Ft. Lauderdale, Florida 33301
Tel: (954) 527-2427
Fax: (954) 333-4027
E-mail: beth-ann.krimsky@gmlaw.com
to represent the Debtor in certain state court proceedings.
The Court has previously approved Kimberly B. Rezanka, Esq., as
attorney for the Estate to handle certain State Court litigation
related to the case currently pending in the Circuit Court of
Volusia County, Florida; 2009-34377 CICI, related to an eminent
domain/taking action filed by Shamrock against the City of Daytona
Beach, Florida. The suit has been pending for over 18 months and
may produce a significant return for the Debtor. These funds
would be used to pay unsecured creditors and/or future business
expenses or secured payments related to the Chapter 11 Plan of the
Debtor.
Ms. Rezanka has requested co-counsel to deal with certain aspects
of the state court litigation that are outside of her specialty
areas of practice. Beth-Ann Krimsky is familiar with the land use
litigation in the pending state court case and would aid the
estate in recovering a significant sum for unsecured creditors.
As reported in the Troubled Company Reporter on Sept. 13, 2011,
the Hon. Arthur B. Briskman of the U.S. Bankruptcy Court for the
Middle District of Florida authorized Shamrock-Shamrock, Inc., to
employ Kimberly B. Rezanka to represent the Debtor in the pending
State Court litigation related to the City of Daytona Beach,
Florida.
About Shamrock-Shamrock Inc.
Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70
parcels of Florida real property. It filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011.
Judge Arthur B. Briskman presides over the case. The Law Offices
of Mickler & Mickler serves as bankruptcy counsel. The Debtor
tapped George Gingo, Esq., to represent the Debtor in certain
claims litigation proceedings; Stephen R. Ponder to represent the
Debtor in certain state court litigation proceedings, and Marshall
J. Gilmore, Esq., to represent in certain state court litigation
proceedings.
The Debtor disclosed in its amended schedules $12,904,154 in
assets and $17,036,102 in liabilities. In the original schedules,
the Company disclosed assets of $12,904,154 and liabilities of
$17,021,201, owing on mortgages to a variety of lenders.
SHAMROCK-SHAMROCK: Withdraws Motion to Employ Lanigan
-----------------------------------------------------
Shamrock-Shamrock Inc. has withdrawn its application to employ
Lanigan & Lanigan PL as attorney.
Judge Arthur Briskman orders that the withdrawal is without
prejudice to Lanigan & Lanigan, P.L., representing the sole
shareholder, Patrick Sullivan, individually and without
compensation from the Estate of the Debtor, in pending state court
litigation.
In the application, the Debtor has sought to tap Lanigan &
Lanigan to represent the Debtor relating to the claims by the
Debtor against PNC Bank for an accounting related to application
of mortgage payments, rent seizure and other accounting
irregularities. The case was filed in the Circuit Court of
Volusia County, Florida (Case No. 2011 30796 CICI) on April 25,
2011.
About Shamrock-Shamrock Inc.
Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70
parcels of Florida real property. It filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011.
Judge Arthur B. Briskman presides over the case. The Law Offices
of Mickler & Mickler serves as bankruptcy counsel. The Debtor
tapped George Gingo, Esq., to represent the Debtor in certain
claims litigation proceedings; Stephen R. Ponder to represent the
Debtor in certain state court litigation proceedings, and Marshall
J. Gilmore, Esq., to represent in certain state court litigation
proceedings.
The Debtor disclosed in its amended schedules $12,904,154 in
assets and $17,036,102 in liabilities. In the original schedules,
the Company disclosed assets of $12,904,154 and liabilities of
$17,021,201, owing on mortgages to a variety of lenders.
SHAMROCK-SHAMROCK: Disclosure OK'd; Confirmation on March 1
-----------------------------------------------------------
Judge Arthur Briskman of the U.S. Bankruptcy Court for the Middle
District of Florida has approved Shamrock-Shamrock, Inc.'s
disclosure statement in support of its plan of reorganization
dated Oct. 7, 2011.
The Court will conduct a confirmation hearing on March 1, 2012,
at 1:30 P.M.
Secured creditor American Home Mortgage Servicing has earlier
filed a limited objection to the disclosure statement, noting that
the Chapter 11 Plan proposed by the Debtor indicates that the
Secured Creditor's claim, labeled as Class #42, will be
surrendered "in full satisfaction of claim." It said that it is
entitled to retain the right to seek a deficiency claim against
the Debtor's bankruptcy estate, if necessary.
American Home is represented by:
Jason A. Weber, Esq.
KAHANE & ASSOCIATES, P.A.
8201 Peters Road, Ste. 3000
Plantation, Florida 33324
Tel: (954) 382-3486
Fax: (954) 382-5380
As reported in the Troubled Company Reporter on Oct. 24, 2011,
Shamrock-Shamrock, Inc., filed with the U.S. Bankruptcy Court for
the Middle District of Florida a plan of reorganization and
accompanying disclosure statement dated Oct. 7, 2011.
The Plan proposes to pay creditors of the Debtor from future
income of the Debtor derived from income generated from the
distribution business the Debtor owns.
The Plan provides for 56 classes of secured claims; 1 class of
unsecured claims; and 1 class of equity security holders.
Unsecured creditors holding allowed claims will receive
distributions, which the proponent of the Plan has valued at
approximately 10 cents on the dollar.
The Plan also provides for the payment of administrative and
priority claims either upon the effective date of the Plan or as
allowed under the Bankruptcy Code.
Full-text copies of the Plan and Disclosure Statement are
available for free at:
http://bankrupt.com/misc/SHAMROCK_PlanOct7.PDF
About Shamrock-Shamrock Inc.
Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70
parcels of Florida real property. It filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011.
Judge Arthur B. Briskman presides over the case. The Law Offices
of Mickler & Mickler serves as bankruptcy counsel. The Debtor
tapped George Gingo, Esq., to represent the Debtor in certain
claims litigation proceedings; Stephen R. Ponder to represent the
Debtor in certain state court litigation proceedings, and Marshall
J. Gilmore, Esq., to represent in certain state court litigation
proceedings.
The Debtor disclosed in its amended schedules $12,904,154 in
assets and $17,036,102 in liabilities. In the original schedules,
the Company disclosed assets of $12,904,154 and liabilities of
$17,021,201, owing on mortgages to a variety of lenders.
SHAW FAMILY: Settles Dispute Over Marilyn Monroe Image Rights
-------------------------------------------------------------
Maria Chutchian at Bankruptcy Law360 reports that the family
archive of the famed, late photographer Sam Shaw on Friday settled
an eight-year legal dispute over photos he took of Marilyn Monroe,
requesting a New York bankruptcy court approve a $3 million deal
giving her estate commercial rights over the photos.
Shaw Family Archives Ltd. stated in its motion that approval of
the settlement is "critical to the debtor's effective
reorganization" and amounts to more income than the archive has
earned in the past three years, according to Law360.
Shaw Family Archives, Ltd., filed for Chapter 11 protection
(Bankr. S.D. New York Case no. 11-23099) on June 1, 2011.
Judge Robert D. Drain presides over the case. Lawrence F.
Morrison, Esq., at The Morrison Law Offices PC, in New York,
represents the Debtor. The Debtor estimated assets and
liabilities between $1 million and $10 million.
SOUTHERN MONTANA: Regulator Wants to Intervene in Ch. 11
--------------------------------------------------------
Pete Brush at Bankruptcy Law360 reports that Montana's state
utilities regulator told U.S. Bankruptcy Judge Ralph B. Kirscher
that it should be allowed to intervene in the Chapter 11 case of
Southern Montana Electric Generation and Transmission Cooperative
Inc. because it oversees utilities that are owed money by the
insolvent co-op.
The Montana Public Service Commission conceded it does not have
direct regulatory authority over the debtor but wants to intervene
anyway, according to Law360.
About Southern Montana Electric
Based in Billings, Montana, Southern Montana Electric Generation
and Transmission Cooperative, Inc., was formed to serve five
other electric cooperatives. The city of Great Falls later joined
as the sixth member. Including the city, the co-op serves a
population of 122,000. In addition to Great Falls, the service
area includes suburbs of Billings, Montana.
Southern Montana filed for Chapter 11 bankruptcy (Bankr. D.
Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana
estimated assets of $100 million to $500 million and estimated
debts of $100 million to $500 million. Timothy Gregori signed the
petition as general manager.
Jon E. Doak, Esq., at Doak & Associates, P.C., in Billings,
Montana, serves as the Debtor's counsel. In December 2011,
Southern Montana also sought permission to employ the Goodrich Law
Firm, P.C., as general co-counsel.
Also in December, Lee A. Freeman was appointed as Chapter 11
trustee. Mr. Freeman retained Horowitz & Burnett, P.C., as his
counsel and Waller & Womack, P.C., as local counsel.
The United States Trustee for Region 18 has appointed an Official
Committee of Unsecured Creditors in the case.
Standard & Poor's Ratings Services in October lowered its issuer
credit rating on SME to 'CC' from 'BBB', and placed the rating on
CreditWatch with developing implications. These actions follow
the cooperative's Oct. 21 bankruptcy filing under Chapter 11 of
the U.S. Bankruptcy Code. According to SME, the filing was in
response to failure on the part of some of its members to honor
contractual obligations, including payment to the cooperative for
services.
SP NEWSPRINT: Has Final Approval for $20 Million Loan
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that SP Newsprint Holdings LLC received final approval for
$20 million in secured financing to support the Chapter 11
reorganization begun Nov. 15. The loan can be increased to $25
million.
Mr. Rochelle notes that before bankruptcy, SP owed $41 million on
a revolving credit and $213 million on a term loan with General
Electric Capital Corp. as a lender and agent. GECC is agent for
the lenders supplying the credit for reorganization.
According to the report, SP said in a court filing this month that
it's negotiating for a going-concern sale of the business in the
"near future." The bankruptcy loan agreement gives the lenders
the right to bid at auction by using existing debt rather than
cash.
About SP Newsprint
Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog
Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers,
Southeastern Paper Recycling and SP Newsprint Merger LLC -- and
three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation
and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy
(Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011.
SP Newsprint Holdings LLC is a newsprint company controlled by
polo-playing mogul Peter Brant. It is one of the largest
producers of newsprint in North America. SP Recycling
Corporation, a Georgia corporation and the Debtors' other
operating company, was established in 1980 as a means for SP to
secure a ready supply of recycled fiber, a key raw material for
its newsprint.
SP Newsprint is the second Brant-owned newsprint company to tumble
into bankruptcy proceedings in recent years. Current and former
affiliated entities are Bear Island Paper Company, L.L.C., Brant
Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint,
Inc., White Birch Paper Company.
Judge Christopher S. Sontchi presides over the case. Joel H.
Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr.,
Esq., at Cahill Gordon & Reindel LLP, serve as the Debtors' lead
counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at
Richards, Layton & Finger, P.A., serve as the Debtors' Delaware
counsel. AlixPartners LLP serves as the Debtors' financial
advisors and The Garden City Group Inc. serves as the Debtors'
claims and noticing agent. In its petition, SP Newsprint Holdings
estimated $100 million to $500 million in assets and debts. The
petitions were signed by Edward D. Sherrick, executive vice
president and chief financial officer.
An official committee of unsecured creditors appointed in the case
tapped BDO Consulting as financial advisor; and Lowenstein Sandler
PC and Ashby & Geddes as counsel.
STATE FAIR OF VIRGINIA: Court OKs Aery as Financial Advisor
-----------------------------------------------------------
The State Fair of Virginia, Inc., obtained permission from the
Bankruptcy Court to employ Aery LLC, as its financial advisor.
Upon retention, Aery will:
(a) analyze the Debtor's assets, liabilities, financial affairs
and financial operations, and assist in the preparation of
certain of the Debtor's financial reports;
(b) assist in the preparation and review of all reports or
filings as required by the Bankruptcy Court or the Office
of the United States Trustee, including any monthly
operating reports;
(c) analyze and advice regarding the preparation of financial
information for distribution to creditors and other
parties-in-interest, including cash receipts and
disbursements analysis, legal entity financial statements,
analysis of various asset and liability accounts, and
analysis of proposed transactions for which Bankruptcy
Court approval is sought;
(d) advise and assist the Debtor with respect to negotiation
with creditors and other parties-in-interest concerning a
plan; the formulation, preparation, and presentation of a
plan; the review and analysis of financial reports,
information, data and projections concerning proposals for
a plan; preparation of such reports as may be appropriate
in connection with a plan; investigation development,
presentation of a disclosure statement; and any other
financial matters relating to the formulation, preparation,
and presentation of a plan; and
(e) consult on financial issues and matters as requested by the
Debtor.
Aery's current hourly rates for the engagement range from $150 for
A. Lynn Ivey, III, to $50 for support staff.
The Debtor agrees to reimburse Aery for its costs and expenses
including, among other things, photocopies, travel expenses, long
distance telephone calls, and delivery and courier services.
For the period from Jan. 1, 2010, through Dec. 31, 2010, Aery
received prepetition payments from the Debtor for fees and
expenses incurred totaling $12,890. In addition, during the
period from Jan. 1, 2011, through Nov. 30, 2011, Aery received
prepetition payments from the Debtor for fees and expenses
incurred totaling $31,616. Aery received a retainer for its
assistance in the bankruptcy case in the amount of $25,000.
Lynn Ivey, president of Aery, LLC, assures the Court that her firm
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
About SFVA Inc.
State Fair of Virginia Inc. -- http://www.statefair.com/-- owns
and operates a state fairgrounds facility known as the "The Meadow
Event Park" located in Doswell, Caroline County, Virginia. SFVA
filed for Chapter 11 bankruptcy (Bank. E.D. Va. Case No. 11-37588)
on Dec. 1, 2011. The Debtor estimated assets of $10 million to
$50 million and estimated debts of $50 million to $100 million.
Curry A. Roberts signed the Petition as president. State Fair
officials said they hope to emerge on a better financial footing
and to do so within 60 days to 90 days.
The Debtor is represented by Jonathan L. Hauser, Esq., at Troutman
Sanders LLP.
As reported by the TCR on Jan. 6, 2012, the U.S. Trustee for
Region 4 appointed five unsecured creditors to serve on the
Official Committee of Unsecured Creditors of State Fair of
Virginia Inc.
STATE FAIR OF VIRGINIA: Can Tap Troutman Sanders as Counsel
-----------------------------------------------------------
The State Fair of Virginia, Inc., obtained permission from the
U.S. Bankruptcy Court for the Eastern District of Virginia to
employ Troutman Sanders LLP as its bankruptcy and restructuring
counsel. Prior to the Petition Date, Troutman Sanders represented
the Debtor in connection with various corporate, financing, and
litigation issues.
Troutman Sanders will, among other things:
(a) advise the Debtor with respect to its powers and duties as
debtor and debtor-in-possession in the continued management
of its properties;
(b) advise and consult on the conduct of the Debtor's
bankruptcy cases, including all of the legal and
administrative requirements of operation in chapter 11;
(c) attend meetings and negotiate with representatives of
creditors, Debtor's employees and other parties-in-
interest;
(d) advise the Debtor in connection with any sales of assets or
business combinations, including the negotiation of asset,
merger or joint venture agreements, evaluating competing
offers, drafting appropriate corporate documents with
respect to the proposed sales, and counseling the Debtor in
connection with the closing of those sales;
(e) advise the Debtor in connection with any postpetition
financing and cash collateral arrangements and negotiate
and draft documents relating thereto, and provide advice
and counsel with respect to any prepetition financing
arrangements; and
(f) advice the Debtor on matters relating to the evaluation of
the assumption, rejection or assignment of unexpired leases
and executory contracts.
Troutman Sanders' current hourly rates are:
Partners $335 to $900
Counsels $290 to $675
Associates $220 to $525
Legal assistants and Support Staff $135 to $290
The Debtor agrees to reimburse Troutman Sanders for its expenses
including, among other things, photocopies, travel expenses, long
distance telephone calls, and delivery and courier services.
For the period from Jan. 1, 2010, through Dec. 31, 2010, Troutman
Sanders received prepetition payments from the Debtor for fees and
expenses incurred totaling $413,685. In addition, during the
period of Jan. 1, 2011, through Nov. 30, 2011, Troutman Sanders
received prepetition payments from the Debtor totaling $127,529.
Troutman Sanders received a retainer of $200,000 for filing of the
bankruptcy case.
Jonathan L. Hauser, Esq., assures the Court that Troutman Sanders
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
About SFVA Inc.
State Fair of Virginia Inc. -- http://www.statefair.com/-- owns
and operates a state fairgrounds facility known as the "The Meadow
Event Park" located in Doswell, Caroline County, Virginia. SFVA
filed for Chapter 11 bankruptcy (Bank. E.D. Va. Case No. 11-37588)
on Dec. 1, 2011. The Debtor estimated assets of $10 million to
$50 million and estimated debts of $50 million to $100 million.
Curry A. Roberts signed the Petition as president. State Fair
officials said they hope to emerge on a better financial footing
and to do so within 60 days to 90 days.
The Debtor is represented by Jonathan L. Hauser, Esq., at Troutman
Sanders LLP.
As reported by the TCR on Jan. 6, 2012, the U.S. Trustee for
Region 4 appointed five unsecured creditors to serve on the
Official Committee of Unsecured Creditors of State Fair of
Virginia Inc.
STOCKDALE TOWER: Court Approves CBRE as Real Estate Broker
----------------------------------------------------------
Stockdale Tower 1, LLC, sought and obtained permission from the
U.S. Bankruptcy Court for the Eastern District of California to
employ CB Richard Ellis as its real estate broker to represent the
Debtor in marketing, selling or leasing the real property.
Based on the terms of the Exclusive Leasing Listing Agreement and
Amendment to Listing Agreement, CBRE will receive a commission on
the sale of the real property in the amount of a 5% of the gross
selling price if it represents both the buyer and the Debtor. Any
compensation paid to CBRE will be paid directly from escrow from
proceeds received from the sale of the real property and will be
subject to approval of the Court. CBRE has not received a
retainer from the Debtor or any other person.
If the property is sold to buyers not represented by CBRE, the
Debtor contemplates that CBRE would be entitled to receive a
commission of up to 2.5% of the gross selling price for services
rendered in representing the estate in marketing the property.
The broker, representing such buyer, would be entitled to receive
a commission of up to 2.5% of the accepted and consummated price.
The estate will not be liable for more than the total 5% for
commissions. The commissions will be payable only to the brokers
involved in the accepted and consummated sale.
CBRE will receive a commission on the lease of real property
summarized as:
a. Gross Leases - where landlord pays all or base year portion
ii. Term of Lease Than 5 Years
6% of total base rental for the first 24 months in
which rent is to be paid, plus
5% of the total base rental for the next 12 months
in which rent is to be paid, plus
4% of the total base rental for the remainder of
the term.
iii. Term of Lease 5 Through 25 years
5% of the total base rental for the first 60 months
in which rent is to be paid, plus
2-1/2% of the total base rental for the next 60
months which rent is to be paid, plus
1-1/2% of the total base rental for the remainder
of the term.
b. Net Leases - where tenant pays all real estate taxes
ii. Term of Lease Less Than 5 Years
7% of total base rental for the first 24 months
in which rent is to be paid, plus
6% of the total base rental for the next 12 months
in which rent is to be paid, plus
5% of the total base rental for the remainder of
the term.
iii. Term of Lease 5 Through 25 Years
6% of the total base rental for the first 60 months
in which rent is to be paid, plus
3-1/2% of the total base rental for the next 60 months
in which rent is to be paid, plus
2-1/2% of the total base rental for the remainder of
the term.
If a lease term is in excess of 25 years then the commission shall
be calculated upon only the base rental to be paid for the first
25 year of the lease term.
CBRE attests it is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
About Stockdale Tower
Bakersfield, California-based Stockdale Tower 1, LLC, filed for
Chapter 11 bankruptcy (Bankr. E.D. Calif. Case No. 11-62167) on
Nov. 7, 2011. Judge W. Richard Lee presides over the case. Scott
T. Belden, Esq., and Jacob L. Eaton, Esq., of Klein, DeNatale,
Goldner, Cooper, Rosenlieb & Kimball, LLP, serve as the Debtor's
bankruptcy counsel. The Debtor disclosed $17,880,755 in assets
and $17,870,212 in liabilities as of the Chapter 11 filing.
STOCKDALE TOWER: Court Approves Shinault Baker as Accountant
------------------------------------------------------------
Stockdale Tower 1, LLC sought and obtained permission from the
U.S. Bankruptcy Court for the District of California to employ
Shinault Baker & Company as accountant.
The firm attests that it is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm's hourly rates are:
Personnel Rates
--------- -----
Michael Shinault, CPA, Partner $200
Larry Baker, CPA, Partner $220
Senior Staff $100-$175
Staff $35- $90
Bakersfield, California-based Stockdale Tower 1, LLC, filed for
Chapter 11 bankruptcy (Bankr. E.D. Calif. Case No. 11-62167) on
Nov. 7, 2011. Judge W. Richard Lee presides over the case. Scott
T. Belden, Esq., and Jacob L. Eaton, Esq., of Klein, DeNatale,
Goldner, Cooper, Rosenlieb & Kimball, LLP, serve as the Debtor's
bankruptcy counsel. The Debtor disclosed $17,880,755 in assets
and $17,870,212 in liabilities as of the Chapter 11 filing.
SWIFT TRANSPORTATION: S&P Raises Corporate Credit Rating to 'B+'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Phoenix-
based trucking company Swift Transportation Co., including the
corporate credit rating to 'B+' from 'B'.
"Swift's profitability and cash generation have improved steadily
along with the general U.S. economy and the trucking industry,"
said Standard & Poor's credit analyst Solomon Samson.
The company is using its cash from operations primarily to invest
in new, more efficient trucks -- but also for modest debt
reduction. As a result, Swift has achieved stronger credit
metrics.
"We believe that this stronger financial profile is sustainable,
based on the positive trends surrounding the company's business,"
Mr. Sampson added.
The rating outlook is stable. Over the next year, the downside
risk to the rating is a contracting economy that leads to lower
revenues and margins for Swift. However, Standard & Poor's base
case scenario foresees the opposite: that the company's
performance will continue to improve along with the general
U.S. economy.
Swift should benefit from trucking more loaded miles. In addition,
more balanced supply and demand for shipping will allow modest
price increases. Still, margins likely won't rise dramatically,
given the fragmented industry structure and the cyclicality of
demand.
THORNBURG MORTGAGE: Goldman Wins Removal of Trustee's $19MM Suit
----------------------------------------------------------------
Roxanne Palmer at Bankruptcy Law360 reports that a Maryland
federal judge moved a $19 million lawsuit claiming Goldman Sachs &
Co. helped Thornburg Mortgage Inc. out of bankruptcy court on
Monday after determining the claims brought by Thornburg's trustee
weren't central to the bankruptcy proceedings.
Trustee Joel Sher hit Goldman with the adversary proceeding in
April, claiming that in addition to making unjustified margin
calls, the investment bank improperly liquidated mortgage-backed
securities that secured repurchase agreements with Thornburg, now
known as TMST Inc., Law360 says.
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.
THORPE INSULATION: Asbestos Plan Not 'Insurance Neutral'
--------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in San Francisco handed
down an opinion on Jan. 24 similar to a ruling in May from the
U.S. Court of Appeals in Philadelphia finding that a Chapter 11
plan dealing with asbestos claims wasn't "insurance neutral."
Mr. Rochelle recounts that the bankruptcy court confirmed the
reorganization plan creating a trust to pay asbestos claims.
Several insurance companies that didn't settle filed an appeal and
lost in the district court where confirmation was upheld.
When the case reached the 9th Circuit in San Francisco, the
appeals court concluded that the plan wasn't "insurance neutral"
because it "may economically affect appellants in substantial
ways."
Because the plan isn't insurance neutral, the circuit court ruled
that the insurance companies had the right to object in the
bankruptcy court and to be heard on appeal, Mr. Rochelle reports.
The circuit court also held that the appeal was not moot under the
doctrine of "equitable mootness." Circuit Judge Ronald M. Gould,
writing the opinion for the three-judge panel, said the appeal
isn't moot because "there are several ways here that appellants
could get some relief without completely upsetting the plan."
The San Francisco case is Motor Vehicle Casualty Co. v. Thorpe
Insulation Co. (In re Thorpe Insulation Co.), 10-56543, 9th U.S.
Circuit Court of Appeals (San Francisco). The Philadelphia case is
Global Industrial Technologies Inc., 08-3650, 3rd U.S. Circuit
Court of Appeals (Philadelphia).
A copy of the Ninth Circuit's Jan. 24 opinion is available at
http://is.gd/jENLABfrom Leagle.com.
About Thorpe Insulation
Based in Long Beach, California, Thorpe Insulation Company
supplied and distributed asbestos thermal insulation in Southern
California before about 1972. The company's products included
pipe and boiler insulation, asbestos cloth and insulating mud.
After 1972, some of Thorpe's operations also involved asbestos and
lead abatement, including repairing insulation that contained
asbestos at commercial and industrial sites.
In December 2004, Thorpe's lender, Pacific Funding Group LLC, sold
its collateral at a foreclosure sale to Farwest Insulation
Consulting owned by Eric and David Fults. Following the
foreclosure, Thorpe ceased operation of its business. To date,
Thorpe has been subjected to about 12,000 claims and lawsuits
related to asbestos.
Thorpe filed for chapter 11 protection on Oct. 15, 2007 (Bankr.
C.D. Calif. Case No. 07-19271). Jeremy V. Richards, Esq., and
Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl & Jones,
LLP, represent the Debtor.
Los Angeles-based Pacific Insulation Company was incorporated in
California by Thorpe on May 23, 2000, to be its wholly owned
subsidiary. On Oct. 1, 2000, Pacific transferred 100% of its
shares to Thorpe in exchange for Thorpe's materials division
assets. Thorpe's sole shareholders and board members, Robert W.
Fults and Linda Fults, own 50.1% and 49.9% of Pacific,
respectively. Pacific is a southwest commercial and industrial
insulation distributor and fabricator with locations in Southern
and Northern California, Arizona, and Nevada. It provides pipe,
air handling, fire barrier, board and blanket insulation as well
as adhesives, mastics and sealants. Pacific has never installed
or sold any materials containing asbestos. It currently has 55
full-time employees.
Pacific filed for chapter 11 petition on Oct. 31, 2007 (Bankr.
C.D. Calif. Case No. 07-20016) due to its alleged asbestos
liability and the failure of Thorpe's insurers to pay asbestos
claims asserted against Thorpe. John A. Lapinski, Esq., Leslie R.
Horowitz, Esq., and Stephen R. Hyam, Esq., at Clark & Trevithick
represent Pacific in its restructuring efforts.
On Nov. 6, 2007, Pacific's case was jointly administered under
Thorpe Insulation's bankruptcy proceeding.
Caplin & Drysdale, Chartered and Heller Ehrman LLP are co-counsels
to the Official Committee of Unsecured Creditors.
The Debtor's schedules showed $6,499,167 in total assets, and
$52,438,167 in total liabilities.
In May 2008, Thorpe, Pacific, the appointed Official Committees of
Unsecured Creditors, and the appointed legal representative for
holders of future asbestos-related claims filed a joint plan of
reorganization. The current and Fifth Amended Plan of
reorganization was filed in December 2009.
TRIBUNE CO: Court Sets May 16 as Plan Confirmation Hearing
----------------------------------------------------------
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware established on January 24, 2012, a schedule
for the resolution of the allocation disputes and confirmation of
the Third Amended Joint Plan of Reorganization filed by Tribune
Company and its debtor affiliates; the Official Committee of
Unsecured Creditors, Oaktree Capital Management, L.P.; Angelo,
Gordon & Co., L.P.; and JPMorgan Chase Bank, N.A.
At the January 11, 2012 status hearing, the Court considered the
proposed schedules filed by the DCL Plan Proponents and Aurelius
Capital Management, LP for resolution of the remaining allocation
disputes and confirmation of the Third Amended DCL Plan.
Following discussion of the proposals, the Court established
dates for the Allocation Disputes, Supplemental Disclosure
Document and confirmation hearings and directed the parties to
confer regarding the establishment of a scheduling order.
Consistent with the Court's directive, the parties met and
reported that they had reached agreement on most issues relating
to the scheduling orders, James F. Conlan, Esq., at Sidley Austin
LLP, in Chicago, Illinois, counsel to the Debtors, relates. The
parties further advised the Court that they would confer on the
remaining issues, he notes.
On January 19, 2012, the parties filed with the Court an agreed
scheduling order for the resolution of the Allocation Disputes
and consideration of the Supplemental Disclosure Document,
Solicitation Procedures Motion and the Third Amended DCL Plan.
The Plan/Allocation Disputes scheduling order was negotiated
among: the Debtors; the Official Committee of Unsecured
Creditors; Deutsche Bank Trust Company Americas, in its capacity
as successor indenture trustee for a certain series of Senior
Notes issued by Tribune Company; Law Debenture Trust Company of
New York, in its capacity as successor indenture trustee for a
certain series of Senior Notes issued by Tribune; Wilmington
Trust Company, in its capacity as successor indenture trustee for
the PHONES Notes issued by Tribune; Aurelius Capital Management,
LP; Brigade Capital Management, LLC; Davidson Kempner Capital
Management LLC; Oaktree Capital Management, LLC; EGI-TRB LLC; and
approximately 200 former employees of The Times Mirror Company.
Judge Carey signed the Agreed Scheduling Order on Jan. 24, 2012.
Allocation Disputes Schedule
The parties identify Allocation Disputes as:
(A) Disputes relating to the PHONES Notes:
* whether and to what extent the Article III Distributions
must be adjusted in order for the distributions under the
Plan to satisfy the applicable requirements of the
Bankruptcy Code in connection with assertions that all or
any portion of the consideration provided by the Senior
Lenders, Bridge Lenders, and Settling Step Two Payees in
respect of the Settlement are or are not subject to the
subordination provisions of the PHONES Notes Indenture;
* whether and to what extent the priority of the
distributions from the Creditors' Trust must be adjusted in
order for the distributions under the Plan to satisfy the
applicable requirements of the Bankruptcy Code in
connection with assertions that all or any distributions
from the Creditors' Trust are or are not subject to the
subordination provisions of the PHONES Notes Indenture;
* whether and to what extent the Article III Distributions or
the priority of distributions from the Creditors' Trust
or the Litigation Trust must be adjusted in order for the
distributions under the Plan to satisfy the applicable
requirements of the Bankruptcy Code in connection with
assertions that any category of Other Parent Claims does or
does not constitute "Senior Indebtedness", as defined by
the PHONES Notes Indenture;
* the Allowed amount of the PHONES Notes Claims;
* whether and to what extent beneficiaries of the
subordination provisions of the PHONES Notes Indenture are
entitled to receive post-petition interest prior to the
Holders of PHONES Notes Claims receiving payment on their
Claims; and
* whether the PHONES Notes are senior in right of payment to
the EGI-TRB LLC Notes; and
(B) Disputes concerning the EGI-TRB LLC Notes:
* whether and to what extent the Article III Distributions
must be adjusted in order for the distributions under the
Plan to satisfy the applicable requirements of the
Bankruptcy Code in connection with assertions that all or
any portion of the consideration provided by the Senior
Lenders, Bridge Lenders, and Settling Step Two Payees in
respect of the Settlement are or are not subject to the
subordination agreement governing the EGI-TRB LLC Notes;
* whether and to what extent the priority of the
distributions from the Creditors' Trust or the
Litigation Trust must be adjusted in order for the
distributions under the Plan to satisfy the applicable
requirements of the Bankruptcy Code in connection with
assertions that all or any distributions from the
Creditors' Trust or the Litigation Trust are or are not
subject to the subordination agreement governing the EGI-
TRB LLC Notes;
* whether and to what extent the Article III Distributions or
the priority of distributions from the Creditors' Trust or
the Litigation Trust must be adjusted in order for the
distributions under the Plan to satisfy the applicable
requirements of the Bankruptcy Code in connection with
assertions that any category of Other Parent Claims does or
does not constitute "Senior Obligations", as defined by the
subordination agreement governing the EGI-TRB LLC Notes;
* whether and to what extent beneficiaries of the
subordination agreement governing the EGI-TRB LLC Notes are
entitled to receive post-petition interest prior to the
Holders of EGI-TRB LLC Notes Claims receiving payment on
their Claims; and
* whether the EGI-TRB LLC Notes are senior in right of
payment to the PHONES Notes.
The parties agree that discovery with respect to the Allocation
Disputes will be limited to:
(a) Discovery directed to the Debtors and/or DBTCA, relating to
the appropriate amount of the PHONES Notes Claims;
(b) Discovery directed to the Retirees and the holders of the
Swap Claim, seeking the operative documents pursuant to which
their claims arise;
(c) Discovery directed to any DCL Plan Proponent or any holder of
an Other Parent Claim asserting that any category of Other
Parent Claim is entitled to the benefit of the PHONES Notes
and/or EGI-TRB LLC Notes subordination provisions, seeking
the documents supporting such assertion;
(d) Discovery directed to EGI-TRB, Debtors or any Party asserting
a position relating to whether the PHONES Notes are senior,
junior or pari passu in right of payment to the EGI-TRB LLC
Notes;
(e) Discovery directed to the Debtors, the Creditors' Committee
or their professionals, relating to the Recovery Chart to the
Supplemental Disclosure Document or any financial information
relied upon by the Debtors or the Creditors' Committee to
support their assertion that the holders of Other Parent
Claims' receipt of equal or higher percentage recoveries in
initial distributions as the Senior Noteholders does not
result in unfair discrimination against the Senior
Noteholders; and
(f) Discovery authorized by the Court upon good cause shown after
notice and an opportunity to be heard.
To reflect the impact of the Court's Reconsideration Order, the
Debtors will provide to the Parties by January 24, 2012 a revised
Recovery Chart incorporating any changes and any other changes
believed to be appropriate.
All initial requests for written discovery with respect to the
Allocation Disputes will be served by January 20, 2012.
With respect to any discovery dispute that may arise, the Parties
to the disputes will meet and confer within two business days of
any Party's request for a meet and confer conference. If the
Parties are unable to resolve their disputes, they may seek Court
intervention utilizing the procedures set forth in the Scheduling
Order.
All discovery on the Allocation Disputes will be completed by no
later than February 17, 2012.
The parties will follow these briefing and hearing dates for the
Allocation Disputes:
January 31, 2012 Deadline to file a preliminary statement
setting forth the Allocation Disputes
that a Party intends to take a position
on, a brief statement of the position
with respect to each Allocation Dispute,
the identification of the Party's trial
witnesses and the anticipated scope of
any direct trial testimony.
February 24, 2012 Deadline to file a brief in support of
the Preliminary Statement.
March 2, 2012 Deadline to file a brief in response to
the Opening Briefs of other Parties.
February 27, 2012, Deadline for each Party to (i) identify
each document on which it intends to
rely at the Allocation Disputes Hearing,
and (ii) if any documents have not yet
been produced, produce those documents.
March 5, 2012 Hearing on the Allocation Disputes. If
necessary, the Allocation Disputes
Hearing will continue on March 6, 2012.
A status conference relating to the Allocation Dispute Hearing
will be held on February 28, 2012 or as soon thereafter as the
Court's schedule will permit to plan for the Allocation Disputes
Hearing and to resolve any open issues.
Plan Confirmation Schedule
The parties agreed to follow this schedule for consideration of
the Supplemental Disclosure Document and Solicitation Procedures
Motion and confirmation of the Third Amended DCL Plan:
February 20, 2012 Deadline for the DCL Plan Proponents
to file any amendments or supplements
to the Supplemental Disclosure
Document, Plan and Solicitation
Procedures Motion. The supplement to
the Solicitation Procedures Motion
will set forth the proposed
Supplemental Voting Record Date, the
filing deadline for Rule 3018 of the
Federal Rules of Bankruptcy Procedure
Motions, the Supplemental Tabulation
Deadline and any additional dates
relating to the confirmation process
not established by the Scheduling
Order.
March 9, 2012 Deadline to file objections to the
Supplemental Disclosure Document or
Solicitation Procedures Motion.
March 16, 2012 Deadline to respond to objections to
the Supplemental Disclosure Document
or Solicitation Procedures Motion.
March 23, 2012 Hearing on the Solicitation Procedures
Motion and Supplemental Disclosure
Document.
March 9, 2012 Deadline to serve initial requests for
written discovery related to Plan
confirmation.
April 30, 2012 All discovery on Plan confirmation
will be completed. The Parties will
meet and confer regarding the nature
and scope of any confirmation related
discovery with the goal of
establishing interim deadlines for the
timely completion of the discovery.
To the extent that the parties are
unable to agree on these matters, they
will be prepared to discuss these
issues at the status conference to be
held in connection with the Allocation
Disputes Hearing.
April 30, 2012 Voting Deadline for the Plan.
April 30, 2012 Deadline to file objections to
confirmation of the Plan.
May 10, 2012 Deadline to file briefs in support of
confirmation of the Plan and replies
to confirmation objections.
May 16, 2012 Confirmation Hearing. If necessary,
the Confirmation Hearing will continue
on May 17, 2012.
Moreover, any determination on the Allocation Disputes will be
made in accord with Rule 7001(8) of the Federal Rules of
Bankruptcy Procedure, and subject to confirmation of a plan,
Judge Carey ruled.
A full-text copy of the Scheduling Order is available for free
at:
http://misc/bankrupt.com/misc/Tribune_0124PlanSchedulingOrder.pdf
Tribune Bankruptcy Exit Possible by October, Says CRO
Tribune Chief Restructuring Officer Don Liebentritt said it is
possible the media company could emerge late in the third quarter
of 2012, Lynne Marek of Crain's Chicago Business reported, citing
the CRO's memo to employees in January.
The CRO made the statement in the wake of the January 11 status
hearing whereby Judge Carey affirmed that he will consider
confirmation of Tribune's Plan in May, the report noted.
Mr. Liebentritt also said in the memo that the Company intends to
seek necessary Federal Communications Commission approval as
"quickly as possible" after confirmation of the Plan, the report
added.
Fitch's Report
In a report published on the eve of third anniversary of the
Tribune Company's Chapter 11 filing approached on Dec. 8, 2011,
Fitch Ratings said the Tribune case has been highly contentious
and has taken longer than usual to be resolved. There have been
protracted negotiations and mediation efforts and numerous
proposed plans of reorganization (PORs) filed by Tribune and
competing creditor groups. Many of the disputes among creditors
center on the 2007 leveraged buyout fraudulence conveyance claims,
the resolution of which is a key issue in the bankruptcy case.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Objects to WTC Appeal on Subordination
--------------------------------------------------
Tribune Company and its debtor affiliates; the Official Committee
of Unsecured Creditors, Oaktree Capital Management, L.P.; Angelo,
Gordon & Co., L.P.; and JPMorgan Chase Bank, N.A., which are
jointly proposing a Chapter 11 plan for Tribune (the DCL Plan)
object to Wilmington Trust Company's motion for leave to appeal
the Court's decision on subordination.
As reported in the Jan. 16, 2012 edition of the TCR, WTC, solely
in its capacity as Indenture Trustee for the PHONES, took an
appeal to the U.S. District Court for the District of Delaware
from Judge Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware's:
* October 31, 2011 order denying confirmation of Competing
Plans and accompanying opinion on confirmation; and
* December 29, 2011 order regarding motions for
reconsideration of the Confirmation Opinion and Order and
the related memorandum on reconsideration.
WTC wants the District Court to review whether:
(1) the Bankruptcy Court erred in reconsidering the
Confirmation Opinion and granting reconsideration where
the standard for reconsideration was not satisfied insofar
as WTC simply disagreed with a prior decision and offered
no new facts or law justifying reconsideration; and
(2) the Bankruptcy Court erred in holding that the
subordination provisions under the PHONES Indenture apply
to recoveries of Chapter 5 of the Bankruptcy Code causes
of action obtained by the Litigation Trust from third
parties.
Now, counsel to the Debtors, James F. Conlan, Esq., at Sidley
Austin LLP, in Chicago, Illinois, argues that although the Court
issued a decision reconsidering a portion of the October 31, 2011
Confirmation Decision involving an interpretation of the PHONES
Notes Indenture, the Court's order granting reconsideration
merely struck the relevant portion of the Confirmation Decision
while leaving in place the order denying confirmation of the
Second Amended DCL Plan. Consequently, WTC has no right or
authority to pursue an appeal of the Court's order granting the
very relief it sought, he contends.
Mr. Conlan avers that WTC lacks standing to appeal the
Confirmation Decision because WTC has not been injured, adversely
affected, or aggrieved by it. WTC further lacks standing to
appeal the Reconsideration Decision because WTC will not be
injured, adversely affected, or aggrieved by it unless and until
the Bankruptcy Court confirms a plan actually embodying the
interpretation of the PHONES Notes Indenture that WTC seeks to
address on appeal, he insists. Even if WTC theoretically had
standing, the orders at issue are not "final" within the meaning
of Section 158(a)(I) of Title 28 of the U.S. Code, he points out.
The Court denied confirmation of the Second Amended DCL Plan and
has not yet considered, much less confirmed, the Third Amended
DCL Plan recently proposed by the DCL Plan Proponents, he
stresses.
Indeed, the Court has set for hearing certain "Allocation
Disputes" that involve questions of contract interpretation that
raise nearly identical issues to the question of contract
interpretation that WTC wants to appeal separately now --
including questions involving interpretation of the very same
passages of the PHONES Notes Indenture raised by WTC in its
appeal, Mr. Conlan avers. Given the confirmation proceedings on
the Third Amended Plan in May, allowing an immediate appeal is
likely to delay rather than speed up the ultimate resolution of
the bankruptcy cases and thereby delay the ability of the Debtors
to exit bankruptcy, he insists.
Noteholders Drop Interlocutory Appeal
Meanwhile, noteholders seek to dismiss their interlocutory appeal
from Judge Carey's October 31, 2011 decision denying confirmation
of the rival Chapter 11 Plans, without prejudice to the
Noteholders' filing of a notice of appeal following entry of a
final order confirming a plan or any other order that makes the
Decision appealable as of right.
Daniel H. Golden, Esq., at Akin Gump Strauss Hauer & Feld LLP,
says the docket has not yet been transmitted to the U.S. District
Court for the District of Delaware, and no briefs have been filed
by either side.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRIBUNE CO: Sam Zell Sues Shareholders Over 2007 LBO
----------------------------------------------------
Sam Zell sued former shareholders of Tribune Company, claiming he
should be paid along with other creditors should a court rule the
2007 leveraged buyout he engineered was a fraud, Steven Church of
Bloomberg News reported.
The lawsuit, filed by the Zell-controlled company EGI-TRB LLC,
defends the buyout as legitimate while attempting to preserve
Mr. Zell's rights of recovery should the court rule otherwise,
Bloomberg relayed.
"If it is determined that the shareholder payments represent
fraudulent conveyances, EGI-TRB is entitled to recover from those
transfers or conveyances in excess of $225 million," EGI-TRB
wrote in court papers filed with the Circuit Court for Cook
County, Bloomberg quoted. EGI-TRB says it holds claims exceeding
$225 million in Tribune's bankruptcy.
That Mr. Zell is suing alongside the creditors is ironic given
that he has been a principal target of their ire, a separate
article by the Los Angeles Times. But because he owns a $225-
million Tribune note, Mr. Zell is also a creditor and filed his
lawsuits in that capacity, the report noted.
The LA Times wrote that the lawsuits make plain Mr. Zell's belief
that the fraudulent conveyance claims lack merit and that
shareholders who benefited from the buyout should be entitled to
their proceeds.
Mr. Zell's attorney David Bradford, Esq., at Jenner & Block LLP,
in Chicago, Illinois, said his client's real aim in filing the
suits is to gain leverage in his attempts to persuade the
creditors to settle their disputes, The LA Times added.
The case filed by Mr. Zell is EGI-TRB LLC V. ABN Amro Clearing
Chicago LLC et al.
Pre-buyout creditors, including Aurelius Capital Management LP
allege that the buyout was a fraudulent conveyance because it put
so much debt on Tribune the company could not survive, Bloomberg
noted.
At Aurelius and other noteholders' behest, the U.S. Bankruptcy
Court for the District of Delaware entered an order on
April 25, 2011 granting automatic relief to the extent the
automatic stay bars commencement by creditors of state law
constructive fraudulent conveyance claims to recover redemption
payments made to Step One Shareholders and Step Two Shareholders.
In the SLCFC Order, the Bankruptcy Court ordered that any
creditor other than those specifically identified in the SLCFC
Order who seeks to file its own complaint with respect to its
SLCFC Claims will file a statement with the Bankruptcy Court
acknowledging that the creditor will stay all actions in the
state court litigation and will otherwise adhere to the terms of
the SLCFC Order.
In connection, EGI-TRB informed the Bankruptcy regarding the
filing of the two complaints to preserve any rights of recovery
EGI-TRB may have against the shareholders related to the 2007
LBO. Consistent with the SLCFC Order, EGI-TRB agrees to stay and
take all necessary and reasonable steps to seek a stay of the
actions it has filed and will otherwise adhere to the Stay Order.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
URBAN BRANDS: Plan of Liquidation Declared Effective
----------------------------------------------------
UBI Liquidating Corp., et al., notified the U.S. Bankruptcy Court
for the District of Delaware that the Effective date of the Plan
of Liquidation occurred on Dec. 1, 2011.
On Oct. 19, 2011, the Court confirmed the Debtor's Plan dated
July 20, 2011.
As reported in the Troubled Company Reporter on Oct. 28, 2011, the
Court approved the Liquidating Trust Agreement, which provides for
the formation of the Liquidating Trust under the Plan. Stephen A.
Feldman is appointed as Liquidating Trustee.
As reported in the Aug. 30, 2011, edition of the TCR, the Plan
divides the various classes and interests against and in the
Debtors into 5 classes. Class 1 Bank of America Secured Lender
Claims, Class 2 Other Secured Claims, and Class 3 Priority Non-Tax
Claims are to paid in full under the Plan. Class 4 General
Unsecured Claims are estimated to have a 3% to 7% recovery on
their claims, while Class 5 Equity Interests will be cancelled on
the Plan Effective Date. A copy of the Disclosure Statement dated
July 20, 2011, is available at:
http://bankrupt.com/misc/urbanbrands.DS.pdf
About Urban Brands
Urban Brands, Inc., owed and retail stores under the Ashley
Stewart brand name, a nationally recognized brand for plus sized
urban women. It sought Chapter 11 bankruptcy protection (Bankr.
D. Del. Case No. 10-13005) on Sept. 21, 2010. The Company
estimated assets of $10 million to $50 million and debts of
$100 million to $500 million in its Chapter 11 petition. Chun I.
Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at
Richards, Layton Finger, P.A., in Wilmington, Delaware, serve as
counsel to the Debtors. BMC Group, Inc., is the claims and notice
agent. The DIP Lender is represented by Donald E. Rothman, Esq.,
at Riemer & Braunstein LLP.
As reported by the Troubled Company Reporter on Oct. 29, 2010,
Urban Brands received Court permission to sell its business for
$16.67 million to an affiliate of Gordon Brothers Group LLC. Bill
Rochelle, the bankruptcy columnist for Bloomberg News, reported
that Gordon Brothers told the judge it would operate at least 175
of the 210 stores. Gordon Brothers would serve as Urban Brands'
agent to run going-out-of-business sales at the locations it won't
buy. Mr. Rochelle said the price to be paid by Gordon Brothers is
subject to downward adjustment. The ultimate price can't be less
than $6 million plus the amount necessary to pay off funding for
the Chapter 11 case. The Debtor has been renamed UBI Liquidating
Corp., et al., following the sale.
In October 2010, the U.S. Trustee appointed seven entities to the
Committee of Unsecured Creditors -- Angel Made in Heaven, Inc.;
Natural Collection Corp.; Signsource, Inc.; Rosenthal & Rosenthal,
Inc.; GGP Limited Partnership; Simon Property Group, Inc.; and
International Inspirations, Ltd. The Committee is represented by
Cooley LLP as lead counsel and Loughlin Meghji + Company as
financial advisor.
US FIDELIS: Can Employ David Lander as Special Conflicts Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Montana has
granted US Fidelis, Inc., permission to employ David A.
Lander and the Law Firm of Gallop, Johnson & Neuman, L.C., as
special conflicts counsel.
As reported in the TCR on Dec. 19, 2011, as special conflicts
counsel, the firm will investigate and prosecute avoidance actions
and claims objections on behalf of the bankruptcy estate in
instances where Lathrop & Gage LLP, as counsel for the Debtor,
and/or Thompson Coburn LLP, as counsel for the Committee,
determine that they are prohibited from representing the estate's
interests due to an actual or potential conflict of interest.
The hourly rate charged by David A. Lander is currently $430.00
per hour. Other attorneys, paralegals, and employees of Gallop,
Johnson & Neuman, L.C., may also provide services to the estate.
The estimated applicable fees range from $130.00 to $470.00 per
hour.
The Debtor assured the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About US Fidelis
Wentzville, Missouri-based US Fidelis, Inc., was a marketer of
vehicle service contracts developed by independent and unrelated
companies. It stopped writing new business in December 2009.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
E.D. Mo. Case No. 10-41902) on March 1, 2010. Brian T. Fenimore,
Esq., Crystanna V. Cox, Esq., James Moloney, Esq, at Lathrop &
Gage L.C., in Kansas City, Mo.; and Laura Toledo, Esq., at Lathrop
& Gage, in Clayton, Mo., assist the Debtor in its restructuring
effort. According to the schedules, the Company had assets of
$74,386,836, and total debts of $25,770,655 as of the petition
date.
Allison E. Graves, Esq., Brian Wade Hockett, Esq., and David A.
Warfield, Esq., at Thompson Coburn LLP, in St. Louis, Mo.,
represent the Official Unsecured Creditors Committee.
U.S. SECURITY: Moody's Says 'B1' CFR Unaffected by Acquisition
--------------------------------------------------------------
Moody's Investors Service said that U.S. Security Associates
Holdings, Inc.'s proposed acquisition of security services
provider Andrews International Holdings LLC is credit neutral and
will not immediately impact U.S. Security's B1 Corporate Family
Rating, Ba3 senior secured bank debt rating, and stable rating
outlook.
U.S. Security Associates Holdings, Inc. is a leading provider of
uniformed security guards in North America. The company is
privately held by Goldman Sachs Capital Partners. The company
reported revenue of approximately $870 million for the twelve
months ended September 30, 2011. On a pro forma basis for
acqusitions, management estimates revenue of $1.25 billion for the
twelve months ended September 30, 2011.
UTAH HOUSING: Moody's Lowers Rating on Revenue Bonds to 'B2'
------------------------------------------------------------
Moody's Investors Service has downgraded to B2 from Ba3 the rating
of Utah Housing Corporation GNMA Collateralized Mortgage Revenue
Bonds (Sunset Ridge Apartments Project), Series 2003A and Series
2003A-T, affecting approximately $14,690,000 of outstanding debt.
This rating action follows the recent downgrade of MBIA to B2 from
Ba3 on December 19th, 2010.
RATINGS RATIONALE
MBIA provides the Guaranteed Investment Contract (GIC) for which
the funds of the Series 2003A and 2003A-T Bond Fund are deposited.
While the mortgage is backed by Ginnie Mae, the rating of the
bonds reflects the rating of MBIA (see Moody's rating
implementation guideline "Methodology Update: Ratings that Rely on
Guaranteed Investment Contracts" published in December 2008).
Outlook
WHAT COULD CHANGE THE RATING - UP
- An upgrade to the rating of the GIC provider
WHAT COULD CHANGE THE RATING - DOWN
- A downgrade to the rating of the GIC provider
- Deterioration to the asset to debt ratio.
The principal methodology used in this rating was GNMA
Collateralized Multifamily Housing Bonds published in June 2001.
VANTAGE SPECIALITY: S&P Assigns Prelim. 'B' Corp. Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
corporate credit rating to Chicago-based Vantage Specialty
Chemicals Inc. (Vantage). "At the same time, we assigned our
preliminary 'B' issue ratings and preliminary '3' recovery
ratings to subsidiary Vantage Specialties Inc.'s proposed $60
million revolving credit facility and $240 million senior secured
term loan. The outlook is stable," S&P said.
"The preliminary ratings on Vantage reflect our assessment of the
company's business risk profile as 'weak' and financial profile as
'highly leveraged' (as our criteria define the terms). The ratings
also reflect Vantage's leading positions in a niche market for
oleochemicals and specialty derivatives, offset by its very
aggressive financial policies," said Standard & Poor's credit
analyst Paul Kurias. "All ratings are based on preliminary terms
and conditions. We expect Vantage to use the proceeds from the
transaction (assuming an undrawn revolving credit facility at
closing) to mainly refinance existing debt following its Jan. 5,
2012, acquisition by private equity sponsor, The Jordan Co."
"Pro forma for the transaction, we expect Vantage's credit metrics
to be consistent with a highly leveraged financial profile, with
the ratio of funds from operations (FFO) to total adjusted debt in
the high-single-digit percentage levels -- the ratio is slightly
below 12% when pay-in-kind (PIK) preferred capital is treated as
equity. We adjust debt to include the present value of operating
leases and PIK preference capital. While we recognize the
qualitative benefits the PIK securities provide to the company in
terms of the lack of debt service from a cash flow standpoint,
these instruments do not receive formal equity credit under our
hybrid criteria for financial ratio analysis because we question
their permanence. We do not expect Vantage to reduce debt levels
significantly over the next several years, but, based on our
scenario forecasts, we expect it to generate positive free cash
flow. In our forecasts, we assume that cash flow will mainly fund
potential growth plans and investments, and not measurable debt
reduction. Still, we expect modest improvements in leverage given
our assumptions for gradual EBITDA improvements and our
expectation that management will approach growth prudently,
generating adequate returns on its investments. Our expectation at
the rating is that FFO to total adjusted debt will remain slightly
below 10% over the next two years," S&P said.
"We expect margins to be stable given the high proportion of
contractual sales with cost pass-throughs in the company's
commodity-like oleochemical business, and the greater ability to
pass on cost increases in its specialty derivate business. We also
expect Vantage to benefit from growth rates in Latin America that
are higher than in the U.S. Still, EBITDA margins are modest,
reflecting in part the negotiating ability of the company's
customers, including large consumer and personal care companies,
which limits Vantage's pricing power. The concentration of
manufacturing capacity in a single location each for its
oleochemical and specialty derivate manufacturing operations
constitute another risk, in our opinion. Customer concentration is
also a risk, but some of this is mitigated by the company's
longstanding relationships with top customers," S&P said.
"The stable outlook reflects our expectations for reasonably
predictable EBITDA and cash flow generation over the next year.
Despite a highly leveraged financial profile, we view Vantage's
annual cash-based debt servicing obligations as being manageable
relative to cash flow generation. We expect modest EBITDA and cash
flow generation improvement based on our overall outlook for
modest economic growth and our expectation that the company's
strengths in the domestic market and presence in Latin American
will contribute to overall better volumes. We assume management
and the company's owners will support credit quality and,
therefore, we have not factored into our analysis any
distributions to shareholders or meaningful debt-funded
capital spending. We expect the company will maintain appropriate
leverage credit metrics within our range of expectations," S&P
said.
"Our base case assumes low-single-digit revenue growth driven by
higher volumes over the next two years; we expect margins will
remain flat at modest 2011 levels over this period," Mr. Kurias
continued. "At the current debt levels, we do not anticipate any
significant improvement in credit quality, and it's unlikely that
we would raise the ratings over the next year. We could lower the
ratings if revenue growth stalled or turned negative, or if
margins declined to single-digit levels, so that FFO to total
adjusted debt, including the PIK securities, declined to 5% or
lower without prospects for improvement."
VIASPACE INC: Kevin Schewe Appointed to Board of Directors
----------------------------------------------------------
VIASPACE Inc. and its subsidiary VIASPACE Green Energy Inc.
announced that Kevin L. Schewe, MD was appointed to the VIASPACE
Board of Directors at the board meeting held on Jan. 19, 2012.
Dr. Schewe is a Board-Certified Radiation Oncologist and a Fellow
of the American College of Radiation Oncology. Dr. Schewe has
devoted his 25-year medical career and practice in the fight
against cancer. He currently serves as Medical Director of
Radiation Oncology at the Red Rocks Medical Center in Golden,
Colorado and also at the Thornton Cancer Center Department of
Radiation Oncology in Thornton, Colorado. The two cancer centers
are co-owned by Dr. Schewe and HealthONE, the Colorado Division of
Hospital Corporation of America which is the largest private
operator of healthcare facilities in the world and listed on the
New York Stock Exchange.
Dr. Schewe has also developed a premium line of skin care and
cosmetic products that help to naturally heal, protect, repair and
subsequently maintain not only the damaged skin of cancer
patients, but also individuals who have experienced skin damage
resulting from aging, dryness, UV exposure, other illnesses, and
environmental pollution. These products are manufactured and sold
by Dr. Schewe's company Elite Therapeutics
http://www.elitetherapeutics.com/
"I am excited and honored to be elected to the VIASPACE Board of
Directors," states Dr. Schewe. "I firmly believe that VIASPACE
has a "game-changing" product with Giant King Grass and its
numerous bioenergy and biochemical applications. In addition, I
believe that Giant King Grass is beautifully a global product --
meaning VIASPACE has the absolute potential to undertake what I've
always dreamed of from a business perspective -- an "instantaneous
global roll-out." There are many geographic points on the globe
that are primed and ready to go forward in a significant way with
a renewable bioenergy product like Giant King Grass and we are now
poised to take advantage of this "perfect timing."
Dr. Carl Kukkonen, VIASPACE CEO states, "I have been in
communication with Dr. Schewe for over a year, and was very
impressed with his enthusiasm, knowledge and commitment to
VIASPACE. I introduced Dr. Schewe to board members and I am
delighted that he was elected to the board and that he accepted."
Dr. Schewe continued, "At this very moment in time, VIASPACE is a
tiny company with an awesome product in Giant King Grass that has
unparalleled potential to positively affect our world's energy
needs in a green way. I believe VIASPACE has a once-in-a-
generation opportunity to make Giant King Grass the global
household name of excellence in green bioenergy solutions, and is
therefore a timely and good business investment. Over the past
three years, I have accumulated 77 million common shares, many in
recent months because I believe the shares are significantly
undervalued. My goal is to acquire another 53 million shares (10%
of the outstanding common shares). On the Board of Directors, I
will represent the voice, concerns and dreams of the common
shareholders. We want to build value in the company that will
increase the share price, and I will help develop the necessary
strategies for both short-term and long-term growth and success."
About VIASPACE Inc.
Irvine, Calif.-based VIASPACE Inc. (OTC Bulletin Board: VSPC -
News) -- http://www.VIASPACE.com/-- is a clean energy company
providing products and technology for renewable and alternative
energy that reduce or eliminate dependence on fossil and high-
pollutant energy sources. Through its majority-owned subsidiary
VIASPACE Green Energy Inc., the Company grows Giant King Grass as
a low carbon fuel for electricity generating power plants and as a
feedstock for cellulosic biofuels.
Goldman Kurland and Mohidin LLP, in Encino, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2010 results. The
independent auditors noted that the Company has suffered recurring
losses from operations. In addition, at Dec. 31, 2010, the
Company has working capital of $235,000 and an accumulated deficit
of $35,568,000.
The Company reported a net loss attributed to Viaspace of
$2.83 million on $3.64 million of total revenues for the year
ended Dec. 31, 2010, compared with a net loss attributed to
Viaspace of $2.91 million on $4.37 million of total revenues
during the prior year.
The Company also reported a net loss of $1.06 million on $5.57
million of total revenues for the nine months ended Sept. 30,
2011, compared with a net loss of $2.26 million on $2.60 million
of total revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $18.08
million in total assets, $7.19 million in total liabilities and
$10.89 million in total equity.
VM ASC: Court Denies Motion to Extend Time to File Amended Plan
---------------------------------------------------------------
As reported in the TCR on Dec. 16, 2011, the U.S. Bankruptcy Court
for the Western District of Pennsylvania had set a hearing for
Dec. 22, 2011, at 10:00 a.m., to consider VM ASC, LLC, et al.'s
motion for the extension of the deadline for the filing of an
amended Disclosure Statement and amended Chapter 11 Plan in the
Debtors' cases.
The plan proponent Gregory S. Morris said he needed additional
time to resolve objections to the Plan and Disclosure Statement
filed on Sept. 12, 2011.
On Dec. 28, 2011, upon oral motion of Plan Proponent Gregory S.
Morris, the Bankruptcy Court decreed that the Disclosure statement
and Plan filed in the Debtors' bankruptcy cases are withdrawn
without prejudice and that the motion to extend the time to amend
the Disclosure Statement and Plan is denied as moot.
Prior to the decision of the Court, the Estate of Joseph Ventura
filed its objection to the motion to extend the time to file an
amended disclosure statement and amended plan.
The Estate of Joseph Ventura told the Court that to the extent
that the motion for enlargement of time is a possible attempt by
the plan proponent and his counsel to improperly delay the market
sales of estate assets as proposed by the Trustees Robert Slone
and Lisa Swope, then the motion should be denied by the Court.
About VM ASC Partnership
Altoona, Pennsylvania-based VM ASC, Partnership, owns commercial
real property located at 1650 N. Atherton Street in State College,
Pennsylvania. The real property has an approximate fair market
value of $11,000,000. VM ASC leases portions of its real estate
to Best Buy and Staples.
The Company filed for Chapter 11 bankruptcy protection on Nov. 12,
2010 (Bankr. W.D. Pa. Case No. 10-71330). Robert O. Lampl, Esq.,
who has an office in Pittsburgh, Pennsylvania, serves as the
Debtor's bankruptcy counsel. The Debtor estimated its assets at
$10 million to $50 million and debts at $1 million to $10 million.
Affiliates 200 East Plank Road, L.P. (Bankr. W.D. Pa. 10-70679),
et al., filed separate Chapter 11 petitions.
WASHINGTON MUTUAL: Whitebox to Support Latest Reorganization Plan
-----------------------------------------------------------------
Whitebox Advisors, LLC and its affiliated funds intends to vote in
favor of the Seventh Amended Joint Plan of Affiliated Debtors
Pursuant to Chapter 11 of the United States Bankruptcy Code
recently filed by Washington Mutual, Inc. Whitebox had previously
indicated that it intended to vote against the Plan.
Whitebox stated, "After careful consideration of all publicly
available data, including the Disclosure Statement, Whitebox has
determined that confirmation and consummation of the Company's
Plan is in the best interests of the holders of the junior PIERs
securities. Whitebox encourages all stakeholders, including PIERs
holders, to vote to accept the Plan."
WMI said, "This is a positive development for the WMI bankruptcy
estate. Whitebox's decision is consistent with the Company's
belief that the Plan and the recoveries for creditors and equity
holders represented by the Plan are in the best interests of the
estate and its stakeholders."
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion
determining that the global settlement agreement, among certain
parties including WMI, the Federal Deposit Insurance Corporation
and JPMorgan, upon which the Plan is premised, and the
transactions contemplated therein, are fair, reasonable, and in
the best interests of WMI. However, the Opinion and related order
denied confirmation, but suggested certain modifications to the
Company's Sixth Amended Joint Plan of Affiliated Debtors that, if
made, would facilitate confirmation.
WaMu filed a Modified Sixth Amended Joint Plan and a related
Supplemental Disclosure Statement, which it believes would address
the Bankruptcy Court's concerns.
On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's
Modified Sixth Amended Plan and granted equity committee standing
to prosecute claims for equitable disallowance but stayed the
ruling pending mediation.
WaMu said it would seek confirmation of a revised plan "as soon as
practicable."
The Plan proposes to pay more than $7 billion to creditors and
incorporates a global settlement agreement resolving issues among
the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp.
in its corporate capacity and as receiver for WaMu Bank, certain
large creditors, certain WMB senior noteholders, and the
creditors' committee. The Settlement Noteholders are Appaloosa
Management, L.P., Aurelius Capital Management LP, Centerbridge
Partners, LP, and Owl Creek Asset Management, L.P.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion
determining that the global settlement agreement, among certain
parties including WMI, the Federal Deposit Insurance Corporation
and JPMorgan, upon which the Plan is premised, and the
transactions contemplated therein, are fair, reasonable, and in
the best interests of WMI. However, the Opinion and related order
denied confirmation, but suggested certain modifications to the
Company's Sixth Amended Joint Plan of Affiliated Debtors that, if
made, would facilitate confirmation.
WaMu filed a Modified Sixth Amended Joint Plan and a related
Supplemental Disclosure Statement, which it believes would address
the Bankruptcy Court's concerns.
On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's
Modified Sixth Amended Plan and granted equity committee standing
to prosecute claims for equitable disallowance but stayed the
ruling pending mediation.
WaMu said it would seek confirmation of a revised plan "as soon as
practicable."
The Plan proposes to pay more than $7 billion to creditors and
incorporates a global settlement agreement resolving issues among
the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp.
in its corporate capacity and as receiver for WaMu Bank, certain
large creditors, certain WMB senior noteholders, and the
creditors' committee. The Settlement Noteholders are Appaloosa
Management, L.P., Aurelius Capital Management LP, Centerbridge
Partners, LP, and Owl Creek Asset Management, L.P.
WASHINGTON MUTUAL: Judge May Vacate Insider Trading Claims
----------------------------------------------------------
Washington Mutual Inc. persuaded a bankruptcy judge to consider
wiping the slate clean of allegations that major hedge funds
engaged in insider trading during the $7 billion bankruptcy.
Lance Duroni at Bankruptcy Law360 reports that a Delaware
bankruptcy judge on Wednesday said she would consider vacating
portions of her opinion rejecting Washington Mutual Inc.'s last
reorganization plan that relate to insider trading claims against
the defunct bank's hedge fund allies.
According to WMI, the hedge funds demanded that the unflattering
findings be excised as part of a pivotal settlement with
shareholders. The bank holding company then moved to vacate the
findings in connection with its upcoming third attempt at
confirming a bankruptcy plan.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion
determining that the global settlement agreement, among certain
parties including WMI, the Federal Deposit Insurance Corporation
and JPMorgan, upon which the Plan is premised, and the
transactions contemplated therein, are fair, reasonable, and in
the best interests of WMI. However, the Opinion and related order
denied confirmation, but suggested certain modifications to the
Company's Sixth Amended Joint Plan of Affiliated Debtors that, if
made, would facilitate confirmation.
WaMu filed a Modified Sixth Amended Joint Plan and a related
Supplemental Disclosure Statement, which it believes would address
the Bankruptcy Court's concerns.
On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's
Modified Sixth Amended Plan and granted equity committee standing
to prosecute claims for equitable disallowance but stayed the
ruling pending mediation.
WaMu said it would seek confirmation of a revised plan "as soon as
practicable."
The Plan proposes to pay more than $7 billion to creditors and
incorporates a global settlement agreement resolving issues among
the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp.
in its corporate capacity and as receiver for WaMu Bank, certain
large creditors, certain WMB senior noteholders, and the
creditors' committee. The Settlement Noteholders are Appaloosa
Management, L.P., Aurelius Capital Management LP, Centerbridge
Partners, LP, and Owl Creek Asset Management, L.P.
WESTMORELAND COAL: Offering $125MM Sr. Notes at 95% of Face Value
-----------------------------------------------------------------
Westmoreland Coal Company, together with Westmoreland Partners,
its indirect wholly-owned subsidiary, as co-issuer, priced its
offering of $125 million principal amount of 10.75% Senior Secured
Notes due 2018 at a price equal to 95.4916% of their face value.
The Notes will be additional notes to the already outstanding $150
million principal amount of existing 10.75% Senior Secured Notes
due 2018. The Notes offering is expected to close on or about
Jan. 31, 2012, concurrently with the closing of the previously
announced acquisition of the Kemmerer Mine, which closing is
subject to certain customary conditions and approvals.
The proceeds from the offering of the Notes will be used primarily
to finance the acquisition of the Kemmerer Mine. The Company
expect to use $74.4 million as cash consideration for the
acquisition and approximately $27.0 million for reclamation
bonding collateral for the Kemmerer Mine. The remainder will be
used to fund the Kemmerer Mine's initial working capital, to pay
all estimated transaction fees and expenses incurred in connection
with this offering, and for general corporate purposes.
The Notes will be sold only to qualified institutional buyers in
the United States in reliance on Rule 144A under the Securities
Act of 1933, as amended, and outside the United States to non-U.S.
persons in reliance on Regulation S under the Securities Act. The
issuance of the Notes will not be registered under the Securities
Act, and may not be offered or sold in the United States absent
registration under the Securities Act or an applicable exemption
from the registration requirements of the Securities Act. This
press release will not constitute an offer to sell, or the
solicitation of an offer to buy, any securities, nor will there be
any sale of securities mentioned in this press release in any
state in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws
of any such state.
About Westmoreland Coal
Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE
AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest
independent coal company in the United States. The Company's coal
operations include coal mining in the Powder River Basin in
Montana and lignite mining operations in Montana, North Dakota and
Texas. Its power operations include ownership of the two-unit
ROVA coal-fired power plant in North Carolina.
The Company reported a net loss of $3.2 million on $506.1 million
of revenues for 2010, compared with a net loss of $29.2 million on
$443.4 million of revenues for 2009. Operating income was
$20.5 million in 2010 compared to a loss of $31.8 million in 2009.
The Company also reported a net loss of $25.07 million on
$372.35 million of revenue for the nine months ended Sept. 30,
2011, compared with a net loss of $621,000 on $378.15 million of
revenue for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $768.96
million in total assets, $286.46 million in total debt, and a
$174.36 million total deficit.
* * *
As reported in the TCR on March 4, 2011, Standard & Poor's Ratings
Services said that it assigned a 'CCC+' corporate credit rating to
Colorado Springs, Colorado-based Westmoreland Coal Co. The rating
outlook is stable.
WINDOW FACTORY: Relief from Involuntary Petition Granted
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
ordered that, in consideration of the involuntary petition filed
by American Integrity Corp., Ajit Ahooja, and Herde Computer
Services against The Window Factory, Inc., an order for relief
under Chapter 11 of Title 11 of the United State Code is granted.
The Debtor is directed to file with the Court its schedules and
statements required by Federal Rule of Bankruptcy Procedure
1007(b) and (c).
On Dec. 8, 2011, American Integrity Corp., Ajit Ahooja, and Herde
Computer Services signed involuntary Chapter 11 petitions for The
Window Factory, Inc., (Bankr. S.D. Calif. Case No. 11-19842).
Judge Laura S. Taylor presides over the case. Jeffrey D.
Schreiber, Esq., at The Schreiber Law Firm, serves as counsel to
the petitioning creditors, which allege $407,000 in total claims.
W.R. GRACE: Contributing $109.3-Mil. to Pension Plan This Year
--------------------------------------------------------------
W.R. Grace & Co. and its debtor affiliates seek authority from
Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware to contribute in 2012 up to approximately
$109.3 million to the trust holding and investing assets for the
benefit of their U.S. defined benefit employee retirement plans.
The 2012 Contribution comprises two components:
(1) A $36.4 million contribution that the Debtors have
contemplated making during 2012, of which approximately
$25.9 million is required by statute; and
(2) An additional contribution of up to $72.9 million.
Contributing the Planned 2012 Pension Contribution and the amounts
set forth in the Debtors' forecast during the 2013 - 2015 years to
the Plan Trust will help maintain Grace Retirement Plans funding
levels through 2015 and beyond, asserts Laura Davis Jones, Esq.,
at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware.
She notes that these contributions also will help the Debtors
avoid the risk of sharp increases in future minimum required
contributions. She adds that the 2012 Additional Contribution is
integral to accomplishing those goals.
The Debtors submit that it will accrue a number of other tangible
benefits from making the 2012 Additional Contribution, including:
-- Generating cash tax savings in 2012 of up to approximately
$25.5 million;
-- Reducing, over the 2012 - 2015 time period, estimated cash
pension contributions by approximately $24.5 million;
-- Generating an internal rate of return of up to 65% over the
2012 - 2015 time period based upon the foregoing cash
savings of up to approximately $50 million;
-- Continuing to reduce volatility in future pension benefit
obligations; and
-- Further optimizing the Reorganized Debtors' capital
structure at exit and in the years following by exchanging
volatile and uncertain unfunded pension benefit obligations
for a fixed amount of debt at a contractual interest rate.
Ms. Jones says the 2012 Contribution may require the Debtors to
increase the anticipated size of their exit financing needs. But
the Debtors, she notes, have concluded that they have more than
ample liquidity and debt capacity to pay all allowed claims
contemplated by the Chapter 11 Plan, regardless of whether their
exit financing needs increase as a result of having made the 2012
Contribution. She informs the Court that on January 13, 2012, the
Debtors contributed $12.1 million in required contributions to the
Plan Trust as part of their strategy to secure an additional $1.6
million reduction in their PBGC premiums.
The Debtors were able to avail themselves of this premium decrease
by adjusting the allocation of credit for the 2011 Additional
Contribution from 2011 to 2010, Ms. Jones relates. She explains
that this adjustment created a statutory requirement for the
Debtors to make the $12.1 million payment on or before January 15,
2012. As part of the relief requested in this Motion, the Debtors
are requesting the Court retroactively approve the January 2012
Contribution.
The Debtors say they intend to contribute the remaining $97.2
million balance of the 2012 Contribution to the Plan Trust by
March 31, 2012, which will allow them to reap certain cash tax
savings in 2012 and to begin generating returns on the investments
made with those funds.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -
- http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace has obtained confirmation from the bankruptcy court of
a plan co-proposed with the Official Committee of Asbestos
Personal Injury Claimants, the Official Committee of Equity
Security Holders, and the Asbestos Future Claimants
Representative. The Chapter 11 plan is built around an April
2008 settlement for all present and future asbestos personal
injury claims, and a subsequent settlement for asbestos property
damage claims. Implementation of the Plan has been held up by
appeals in District Court from various parties, including a group
of prepetition bank lenders and the Official Committee of
Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Proposes February 2013 Extension to ART Facility
------------------------------------------------------------
W.R. Grace & Co. seek the Bankruptcy Court's authority to amend
the credit agreement between W. R. Grace & Co.-Conn. and Advanced
Refining Technologies LLC to extend its termination date to
February 28, 2013.
Since 2001, Grace and Chevron Products Company, a division of
Chevron U.S.A. Inc., have held ART as a joint venture. Each of
Grace and Chevron USA currently holds a 50% equity interest in
ART. ART develops, manufactures and sells hydroprocessing
catalysts, which are used in the petroleum refining industry for
the removal of certain impurities from petroleum feedstock.
Grace and Chevron Capital Corporation, an affiliate of Chevron USA
have entered into separate, substantially identical credit
agreements with ART under which they each provide ART with a
separate $15 million revolving line of credit. The Grace ART
Credit Agreement expires on February 28, 2012.
The ART Credit Agreements provide financing to ART for working
capital requirements so that excess cash from ART's business
operations can be used to pay dividends to Grace and Chevron and
to fund ART growth without cash having to be tied up to fund
periodic working capital "spikes."
In 2012 and thereafter, ART expects to continue experiencing those
spikes in working capital requirements, and it, therefore, will
continue to require the existing lines of credit, particularly if
excess cash has been either distributed in dividends or used to
further invest in the ART joint venture, contends Laura Davis
Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington,
Delaware.
In view of the nature of ART's business operations and working
capital requirements, Grace and Chevron Capital have concluded
that it is more cost-effective to continue the existing lines of
credit than it would be for ART to hold excess cash in order to
meet fluctuations in working capital requirements if and when they
occur.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -
- http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace has obtained confirmation from the bankruptcy court of
a plan co-proposed with the Official Committee of Asbestos
Personal Injury Claimants, the Official Committee of Equity
Security Holders, and the Asbestos Future Claimants
Representative. The Chapter 11 plan is built around an April
2008 settlement for all present and future asbestos personal
injury claims, and a subsequent settlement for asbestos property
damage claims. Implementation of the Plan has been held up by
appeals in District Court from various parties, including a group
of prepetition bank lenders and the Official Committee of
Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: LOC Termination Extended Through March 2013
-------------------------------------------------------
W.R. Grace & Co. and its debtor affiliates sought and obtained
authority from Judge Judith Fitzgerald of the U.S. Bankruptcy
Court for the District of Delaware to (i) enter into the Second
Amendment to Postpetition Letter of Credit Facility Agreement,
extending the Stated Termination Date of their letter of credit
facility from March 1, 2012, to March 1, 2013, and (ii) pay an
amendment fee of $250,000 pursuant to the terms of the Second L/C
Facility Amendment.
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, relates that on February 4, 2011, the Court
approved the First L/C Facility Amendment, which extended the
Stated Termination Date through March 1, 2012, and provided the
Debtors with an option to increase the Total Facility from $100
million to $120 million upon payment of an increase fee of
$50,000. The original L/C Facility's Stated Termination Date was
March 1, 2011.
Ms. Jones contends that the L/C Facility has enabled the Debtors
to provide letters of credit to counterparties on an as-needed
basis during the ordinary course of their business operations
pending their emergence from Chapter 11. The Debtors do not
anticipate emerging from their Chapter 11 cases and entering into
exit financing prior to the Stated Termination Date. Hence, they
negotiated and agreed with Bank of America, N.A., an extension of
the Stated Termination Date until March 1, 2013 on the terms and
conditions set forth in the Second L/C Facility Amendment.
The Second L/C Facility Amendment eliminates the option to
increase the Total Facility, and also requires the Debtors to pay
an Amendment Fee of $250,000, which is the same amount as the
amendment fee for the First L/C Facility Amendment, Ms. Jones
explains. The Debtors submit that, under the circumstances of the
cases, the Amendment Fee is a fair and reasonable fee for
extending the L/C Facility's term for another year. The Debtors
believe that there are no commercially practical alternatives to
having an L/C facility, and were the Debtors to allow this L/C
Facility to expire without it being renewed or replaced, their
business operations could face considerable and entirely
unnecessary disruption.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -
- http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace has obtained confirmation from the bankruptcy court of
a plan co-proposed with the Official Committee of Asbestos
Personal Injury Claimants, the Official Committee of Equity
Security Holders, and the Asbestos Future Claimants
Representative. The Chapter 11 plan is built around an April
2008 settlement for all present and future asbestos personal
injury claims, and a subsequent settlement for asbestos property
damage claims. Implementation of the Plan has been held up by
appeals in District Court from various parties, including a group
of prepetition bank lenders and the Official Committee of
Unsecured Creditors.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
ZAIS INVESTMENT: Prepack Plan Wins Court Confirmation
-----------------------------------------------------
The Hon. Raymond T. Lyons of the U.S. Bankruptcy Court for the
District of New Jersey confirmed the Third Amended Prepackaged
Chapter 11 Plan of Reorganization for Zais Investment Grade
Limited VII.
As reported in the Troubled Company Reporter on Dec. 30, 2011,
GRF Master Fund, L.P., Anchorage Illiquid Opportunities Offshore
Master, L.P. and Anchorage Capital Master Offshore, Ltd. together
with Hildene Capital Management and Hildene Opportunities Master
Fund, Ltd., have filed a Third Amended Plan of Reorganization for
the resolution of all outstanding claims against and old equity
interests in the Debtor that may be commenced in the Bankruptcy
Court.
On the Effective Date, the Debtor will sell and transfer title to
the Designated Assets to NewCo, an exempted limited partnership
organized under the laws of the Cayman Islands to be formed by the
Anchorage Plan Proponents. In exchange for the sale and transfer
of the Designated Assets by the Debtor, NewCo will transfer to the
Debtor (i) on the Effective Date, the New LP Interest and (ii) on
or after the Effective Date, Cash sufficient to fund the Debtor's
senior obligations under the Plan, but solely to the extent that
the Debtor's Cash on the Effective Date and projected Cash
distributions from the New LP Interest are not sufficient to fund
such obligations when due.
All Cash necessary for the Plan Administrator to make payments and
Plan Distributions shall be obtained from the Debtor's Cash on the
Effective Date, Cash received as distributions on account of the
New LP Interest and, if necessary, Cash received from NewCo under
the Exit Facility.
Each Holder of an Allowed Senior Note Claim (Class 3) will receive
its Pro Rata Share of Available Cash; provided, that no holder of
an Allowed Senior Note Claim may receive Cash on account of such
Claim that exceeds an amount equal to the sum of (A) one hundred
percent (100%) of such holder's Allowed Senior Note Claim plus
interest earned on unpaid principal from and after the Effective
Date at the contract rate of interest set forth in the Indenture
for such Senior Notes and (B) one hundred percent (100%) of such
holder's Pro Rata Share of an amount equal to the Allowed Junior
A-2 Note Claims plus any interest earned on unpaid principal from
and after the Effective Date at the contract rate of interest set
forth in the Indenture for the Junior A-2 Notes. Class 3 is
Impaired under the Plan and Holders thereof are entitled to vote.
The Hildene Plan Proponents are the sole beneficial holders of
Junior A-2 Note Claims and will be deemed to have voted to accept
the Plan. Each holder of an Allowed Junior A-2 Note Claim will
receive on the Effective Date its Pro Rata Share of a one time
Cash payment equal to $4,375,000 less the Allowed Hildene 503(b)
Claim. Within two Business Days following the Effective Date the
Hildene Plan Proponents and Babson Management, LLC, will withdraw
the Appeals with prejudice. Without limiting any other rights and
remedies the Anchorage Plan Proponents may have, if such
withdrawal is not accomplished within such time frame, the
Anchorage Plan Proponents are authorized to file a withdrawal of
the Appeals with prejudice on behalf of the Hildene Plan
Proponents and Babson Management, LLC.
Holders of Junior A-2 Note Claims (Class 4), Junior A-3 Note
Claims (Class 5), Junior B-1 Note Claims (Class 6), Junior B-2
Note Claims (Class 7), Subordinated Claims (Class 8), Income Note
Claims (Class 9), General Unsecured Claims (Class 10) are not
entitled to vote and are deemed to reject the Plan.
Old Equity Interests will not receive any property under the Plan.
Holders of Old Equity Interests are not entitled to vote and are
deemed to reject the Plan.
A copy of the Third Amended Plan of Organization of the Anchorage
Plan Proponents and the Hildene Plan Proponents is available for
free at http://bankrupt.com/misc/zaisinvestment.doc261.pdf
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.
* U.S. Trustee's New Ch. 11 Fee Rules Rankle Attorneys
------------------------------------------------------
Hilary Russ at Bankruptcy Law360 reports that in the wake of the
first proposed changes to bankruptcy billing guidelines in 15
years, some attorneys are already complaining that they may be
facing an administrative nightmare and might be forced to disclose
too much information under the new rules.
The Chapter 11 fee application review guidelines were proposed in
November by the U.S. Trustee Program, which oversees bankruptcy
cases, and the public comment period remains open till Jan. 31.
They lay out six main areas of focus, including the submission of
data electronically, Law360 relates.
* With $300M in Debt, Two New York Hotels Set for Foreclosure
-------------------------------------------------------------
Dow Jones' DBR Small Cap reports that after an 18-month court
battle, a New York judge has given an investor group the green
light to move forward with foreclosure on two boutique-style
Manhattan hotels with more than $300 million in unpaid debt and
fees.
* Private Equity Can Clear Feared Wall of Debt, Experts Say
-----------------------------------------------------------
Samuel Howard at Bankruptcy Law360 reports that private equity
firms that kept lenders at bay during the recession now have to
reckon with a massive wall of debt that is coming due, but that
alone is unlikely to cause a rash of restructurings among
portfolio companies, attorneys say.
While portfolio companies are saddled with hundreds of billions of
dollars in maturing debts, with some $20 billion reportedly due by
mid-2013, in all likelihood the healthy businesses will be able to
score refinancings or otherwise ride out the prophesied wave of
restructurings, according to Law360.
* Ancela Nastasi Joins Fulbright as Partner in New York
-------------------------------------------------------
Senior bankruptcy lawyer Ancela R. Nastasi has joined the
international law firm of Fulbright & Jaworski.
Ms. Nastasi -- anastasi@fulbright.com -- joins Fulbright as the
head of the New York office's bankruptcy and insolvency practice
group. Her extensive experience includes prominent roles in
complex restructuring and chapter 11 cases, including insolvency
and bankruptcy related litigation and transactions. Ms. Nastasi
represents lenders, investors, debtors, chapter 11 trustees and
creditors in matters involving myriad industries, including
financial services, telecommunications, manufacturing, hospitality
and real estate.
"Ancela is an accomplished bankruptcy lawyer with an exceptional
reputation," said Steven B. Pfeiffer, the Chair of Fulbright's
Executive Committee. "Her experience complements our solid team of
bankruptcy and insolvency lawyers who offer services to clients in
a vast range of industries."
Ms. Nastasi focuses on working with her clients to devise
innovative and effective solutions in complex transactions and
matters.
"Ancela is accomplished in developing, maintaining and enhancing
critical business relationships," said Louis R. Strubeck, the
chair of the firm's global bankruptcy and insolvency practice
group. "We are confident that she will be instrumental in
expanding and enhancing our practice's footprint, not just in the
New York market, but nationally and internationally as well."
Ms. Nastasi, an Adjunct Professor at New York Law School and
frequent lecturer on restructuring and the chapter 11 process,
said the bankruptcy and insolvency practice group's distinguished
reputation nationwide was a major consideration in her decision to
join the firm.
"Fulbright's bankruptcy practice is staffed with nationally-
renowned partners who are leaders in their field," Nastasi said.
"The practice is poised to increase its capabilities here in New
York, and I am eager to be part of such an impressive team."
Ms. Nastasi received her J.D. from the University of Pennsylvania
Law School in 1989 and her diploma in accounting and finance, with
merit, from the London School of Economics. She earned her B.S. in
mathematics, magna cum laude and phi beta kappa, from Vanderbilt
University.
"We are pleased to have Ancela join the New York office and to
having her take on a leading role within the practice group," said
Linda L. Addison, Partner-in-Charge of Fulbright's New York
office.
* Garden City Group Moves to Bigger Location in New York
--------------------------------------------------------
The Garden City Group, Inc. has relocated its New York City office
to an expanded facility above Grand Central Terminal in the
historic Graybar building.
Driven by an increased demand for GCG's services and its
consistent growth, the expanded facility adds more than seven
times the square footage of the previous location to support the
Company's growing personnel and caseloads. The state-of-the-art
facility boasts around-the-clock security, 24/7 building access
and a convenient location with superior amenities, which will
support client needs and GCG's forward momentum.
"Our move to this new facility provides much-needed space for the
growth of our team and services," said David Isaac, chief
executive officer. "We look forward to our continued success and
remain committed to providing innovative solutions to the legal
community across the country."
For three decades, GCG's top-notch quality and performance has
made the Company the trusted choice for law firms and corporations
when encountering high-profile matters. GCG has been recognized
for its legal expertise and dedication by many prestigious
industry awards, including "Best Class Action Administrator" by
The Recorder, "Best Claims Administrator" by the Legal Times, and
"Best Claims Administrator" by the New York Law Journal for two
years in a row.
A key element to GCG's growth has been its ability to recruit a
staff of legal and business professionals that are unmatched in
the industry, including more attorneys than any other firm in the
business. GCG has grown from a 50-person firm to a company with
more than 1,000 people serving law firms and corporations
nationwide. GCG boasts 11 facilities coast-to-coast and continues
to grow and recruit talented legal and business professionals to
its team.
About The Garden City
Garden City Group, Inc. -- http://www.gcginc.com-- is the
recognized leader in legal administration services for class
action settlements, claims administration, bankruptcy cases, and
legal noticing programs, with more than 1,000 employees in offices
coast-to-coast. GCG has been named Best Claims Administrator by
the New York Law Journal for two years in a row. The firm has
been engaged in many high-profile distribution matters, including
the General Motors bankruptcy, the $6.15 billion WorldCom
settlement, the $3.05 billion Visa/MasterMoney Antitrust
settlement, the $3.4 billion Native American Trust Settlement, and
the $20 billion Gulf Coast Claims Facility.
About Crawford
Based in Atlanta, Ga., Crawford & Company --
http://www.crawfordandcompany.com/-- is the world's largest
independent provider of claims management solutions to the risk
management and insurance industry as well as self-insured
entities, with an expansive global network serving clients in more
than 70 countries. The Crawford System of Claims Solutions(SM)
offers comprehensive, integrated claims services, business process
outsourcing and consulting services for major product lines
including property and casualty claims management, workers
compensation claims and medical management, and legal settlement
administration. The Company's shares are traded on the NYSE under
the symbols CRDA and CRDB.
* Great American Appoints Chad Yutka as Valuation Services Head
---------------------------------------------------------------
Great American Group, LLC has appointed Chad Yutka, ASA, as vice
president and senior appraiser for its corporate valuation
services offering.
Mr. Yutka has led nearly 400 asset valuations within international
and domestic corporations since joining the appraisal profession
in 2003, specializing in the valuation of industrial plants,
machinery, equipment and other tangible assets.
"Chad's broad range of valuation experience, including the insight
he's gained in industrial auctions and liquidation sales, makes
him an important addition to our team," said Mike Petruski,
Executive Vice President and General Manager of Great American
Group's Advisory and Valuation Services Division. "His overall
grasp of our profession will also be an asset for our company,
given the range of services Great American Group has expanded into
over the years."
In his new position, he'll be responsible for financial reporting,
property tax, and risk management valuations, as well as advisory
and litigation support engagements related to corporate valuation
services. Mr. Yutka will be working out of Great American Group's
offices in Plano, Texas.
Mr. Yutka, who received his Accredited Senior Appraiser (ASA)
designation from the American Society of Appraisers in 2008, has
spent most of his professional career working for the nation?s
leading industrial appraisal and liquidation firms.
He received a bachelor's of science degree in finance from the
University of Wisconsin-La Crosse in 2002.
About Great American Group, LLC (GAMR-G)
Great American Group, LLC -- http://www.greatamerican.com-- is a
provider of asset disposition solutions and valuation and
appraisal services to a wide range of retail, wholesale and
industrial clients, as well as lenders, capital providers, private
equity investors and professional service firms. Great American
Group has offices in Atlanta, Boston, Chicago, Dallas, London, Los
Angeles, New York and San Francisco.
* Kieran Pinney & Shane Mahmood Join Allegiance Capital
-------------------------------------------------------
Allegiance Capital Corporation, one of the largest private
investment banks serving the lower middle market, announced that
Kieran Pinney has joined its New York office to serve as a Vice
President as well as adding Shane Mahmood as Vice President in the
Dallas office.
"Allegiance Capital Corporation is pleased to announce the
addition of Kieran Pinney to our New York office," said David
Mahmood Founder and Chairman of Allegiance Capital Corporation.
"Kieran brings a wealth of experience and a unique professional
background which will allow Allegiance Capital Corporation to
further grow its financial vertical. While Kieran has been with
us for only a very short period of time, he is already involved in
closing a transaction in the financial services industry."
Prior to joining Allegiance Capital Corporation, Mr. Pinney worked
for Franklin Hamilton, a middle market mergers and acquisitions
boutique. He provided valuation, joint venture, merger and
acquisitions, and capital raising services to middle market
businesses in the financial services sector, including the
insurance, mortgage and title industries. Mr. Pinney has helped
successfully close over 30 transactions with deal values ranging
from a few million to over $50 million in value.
Shane Mahmood, a veteran of the war in Iraq and a graduate from
Cameron University in southwest Oklahoma, has recently joined
Allegiance Capital in our business development efforts. David
Mahmood added "Shane brings to Allegiance Capital the discipline
and skill to analyze markets, develop business relationships and
work with privately held and closely held business owners who are
interested in selling their business, raising capital or working
towards a transition of their business."
Before working with Allegiance Capital Corporation, Shane Mahmood
honorably served with the U.S. Army. While serving in the U.S.
Army Mr. Mahmood was put into situations that required quick
reaction and critical thinking to solve complex problems that
plagued an embattled country. Mr. Mahmood uses the same skills
learned on the modern battlefield to solve problems that arise in
the M&A industry. Mr. Mahmood's attention to detail and hard work
ethic has allowed him to serve his clients and help them realize
their business goals.
"Both Kieran and Shane bring a wealth of knowledge and experience.
We look forward to these gentlemen making a significant addition
to Allegiance Capital Corporation's future growth," said David
Mahmood.
About Allegiance Capital Corporation
Allegiance Capital Corporation is an investment bank specializing
in financing and selling businesses in the middle market.
* BOOK REVIEW: Inside Investment Banking, Second Edition
--------------------------------------------------------
Author: Ernest Bloch
Publisher: BeardBooks,
Softcover: 430 pages
List Price: $34.95
Review by Henry Berry
Even though Bloch states that "no last word may ever be written
about the investment banking industry," he nonetheless has written
a timely, definitive book on the subject.
Bloch wrote Inside Investment Banking book after discovering that
no textbook on the subject was available when he began teaching a
course on investment banking. Bloch's book is like a textbook,
though one not meant to be restricted to classroom use. It's a
complete, knowledgeable study of the structure and operations of
the field of investment banking. With a long career in the field,
including work at the Federal Reserve Bank of New York, Bloch has
the background for writing the book. He sought the input of many
of his friends and contacts in investment banking for material as
well as for critical guidance to put together a text that would
stand the test of time.
While giving a nod to today's heightened interest in the
innovative securities that receive the most attention in the
popular media, Inside Investment Banking concentrates for the most
part on the unchanging elements of the field. The book takes a
subject that can appear mystifying to the average person and makes
it understandable by concentrating on its central processes,
institutional forms, and permanent aims. The author shows how all
aspects of the complex and ever-changing field of investment
banking, including its most misunderstood topic of innovative
securities, leads to a "financial ecology" which benefits business
organizations, individual investors in general, and the economy as
a whole. "[T]he marketplace for innovative securities becomes,
because of its imitators, a systematic mechanism for spreading
risk and improving efficiency for market makers and investors,"
says Bloch..
For example, Bloch takes the reader through investment banking's
"market making" which continually adapts to changing economic
circumstances to attract the interest of investors. In doing so,
he covers the technical subject of arbitrage, the role of the
venture capitalist, and the purpose of initial public offerings,
among other matters. In addition to describing and explaining the
abiding basics of the field, Bloch also takes up issues regarding
policy (for example, full disclosure and government regulation)
that have arisen from the changes in the field and its enhanced
visibility with the public. In dealing with these issues, which
are to a large degree social issues, and similar topics which
inherently have no final resolution, Bloch deals indirectly with
criticisms the field has come under in recent years.
Bloch cites the familiar refrain "the more things change, the more
they remain the same" and then shows how this applies to
investment banking. With deregulation in the banking industry,
globalization, mergers among leading investment firms, and the
growing number of individuals researching and trading stocks on
their own, there is the appearance of sweeping change in
investment banking. However, as Inside Investment Banking shows,
underlying these surface changes is the efficiency of the market.
Anyone looking for an authoritative work covering in depth the
fundamentals of the field while reflecting both the interest and
concerns about this central field in the contemporary economy
should look to Bloch's Inside Investment Banking.
After time as an economist with the Federal Reserve Bank of New
York, Ernest Bloch was a Professor of Finance at the Stern School
of Business at New York University.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
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firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***