/raid1/www/Hosts/bankrupt/TCR_Public/120217.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, February 17, 2012, Vol. 16, No. 47
Headlines
AEOLUS PHARMACEUTICALS: Posts $2.9MM Net Income in Dec. 31 Qtr.
AEROGROW INTERNATIONAL: Incurs $139,000 Net Loss in Dec. 31 Qtr.
AES EASTERN: Committee Taps Ashby & Geddes as Delaware Counsel
AES EASTERN: Committee Taps FTI Consulting as Financial Advisor
AES EASTERN: Committee Taps Kramer Levin as Lead Counsel
AHERN RENTALS: Taps DLA Piper as Co-Counsel
AHERN RENTALS: Panel Seeks OK for Information-Sharing Protocol
AHERN RENTALS: Can Employ Oppenheimer & Co. as Financial Advisor
AHERN RENTALS: Can Employ Sea Port Group as Investment Banker
ALEXANDER GALLO: Plan Votes Deadline Scheduled for March 8
ALLY FINANCIAL: Signs Underwriting Pact with Barclays, Et Al.
AMERICA WEST: George Jarkesy Resigns as Director
AMERICAN AIRLINES: Gets Nod for Codeshare Deal With Hainan Air
AMERICAN AIRLINES: Two Leadership Team Members Resign
AMERICAN AXLE: TIAA-CREF Ceases to Hold 5% Equity Stake
AMERICAN AXLE: Richard Dauch Discloses 9.5% Equity Stake
AMERICAN PACIFIC: Judge Markell Converts Case to Chapter 7
ASARCO LLC: Court Orders Sterlite to Pay $82.75 for Damages
ASCENDIA BRANDS: May Access Wells Fargo DIP Loan Thru March 31
ASSOCIATED ASPHALT: S&P Assigns 'B+' Corporate Credit Rating
ATLANTIC & PACIFIC: Plan Confirmation Hearing Resumes
AVENTINE RENEWABLE: Goldman Sachs Owns 5.9% of Common Shares
AWAL BANK: Gets Exclusive Right to File Plan Through April 23
AXION INTERNATIONAL: R. Rosenblum Ceases to Own 5% Equity Stake
BANKATLANTIC BANCORP: Dimensional Fund Holds 4.1% Equity Stake
BATAA/KIERLAND LLC: Has Access to Cash Collateral Until April 30
BEAZER HOMES: FMR LLC Discloses 5.1% Equity Stake
BEAZER HOMES: Dimensional Fund Discloses 6.6% Equity Stake
BEAZER HOMES: Highbridge International Holds 4.2% Equity Stake
BILLMYPARENTS INC: Incurs $4.2 Million Net Loss in Dec. 31 Qtr.
BION ENVIRONMENTAL: Carret Asset Holds 7.1% Equity Stake
BLUEGREEN CORP: Dimensional Fund Discloses 8.3% Equity Stake
BORGER ENERGY: Moody's Changes Ba3 Rating Outlook to Negative
BUFFETS RESTAURANTS: U.S. Trustee Forms Creditors Committee
BUFFETS RESTAURANTS: Taps Moelis & Company as Financial Advisor
BUFFETS RESTAURANTS: Taps Paul Weiss as Bankruptcy Counsel
BUFFETS RESTAURANTS: Taps PwC to Provide Tax Consulting Services
CAPITOL BANCORP: Principal Trust Discloses 5.5% Equity Stake
CDEX INC: Files for Chapter 11 Bankruptcy Protection
CHESAPEAKE ENERGY: S&P Assigns 'BB+' Rating to Sr. Unsec. Notes
CHINA BAK: Posts $1.8 Million Net Loss in Dec. 31 Quarter
CHINA GINSENG: Posts $421,900 Net Loss in Dec. 31 Quarter
CIRCUS AND ELDORADO: Terminating Senior Secured Notes Offering
CIRCUS AND ELDORADO: Moody's Cuts Corp. Family Rating to 'Ca'
CIRCUS AND ELDORADO: S&P Withdraws 'B-' Rating on $120MM Notes
CIT GROUP: Judge Reserves Decision on $190MM Tyco Tax Claim
CITIZENS REPUBLIC: Wellington Management Holds 9.9% Equity Stake
CITIZENS REPUBLIC: Bay Pond Discloses 6.5% Equity Stake
CITIZENS REPUBLIC: Fine Capital Discloses 5.4% Equity Stake
CLAIRE'S STORES: Selling $400 Million of Senior Secured Notes
CLEAN BURN: Court Appoints Sara A. Conti as Chapter 11 Trustee
CLEAN BURN: Ch. 11 Trustee Taps Northen Blue as Special Counsel
CLEARWIRE CORP: FMR LLC Discloses 15.1% Equity Stake
CLEARWIRE CORP: Chesapeake Holds 4.2% of Class A Shares
CLEARWIRE CORP: Glenview Ceases to Hold 5% of Class A Shares
CLEARWIRE CORP: Highside Capital Holds 4.9% of Class A Shares
CLEARWIRE: Moody's Says FCC Satellite Rejection Credit Positive
CONNAUGHT GROUP: Workers Files Suit Over WARN Act Violation
CONVERSION SERVICES: Messrs. Reisman & Walton Resign from Board
CROWN RANCH: Resumes Construction Projects
CUMULUS MEDIA: Dimensional Fund Holds 1.6% of Class A Shares
CUMULUS MEDIA: Canyon Capital Discloses 6.9% Equity Stake
DRINKS AMERICAS: John Kleinert Discloses 6.2% Equity Stake
EAST HARLEM: Plan Contemplates Membership Interests Sale for $4MM
EASTMAN KODAK: Receives Court Nod of $950-Mil. DIP Financing
EATON MOERY: Wants to Renew Loan to Continue Waste Disposal Biz
EDDIE BAUER: Chamberlain Becomes Interim CEO, Fiske Leaves Company
ELIZABETH ARDEN: Moody's Affirms 'Ba3' Corporate Family Rating
ENDEAVOR INT'L: Moody's Assigns 'Caa1' Rating to $350-Mil. Notes
EPICEPT CORP: Forsakringsaktiebolaget Holds 11.8% Equity Stake
EVERGREEN SOLAR: GLG Partners Owns 1.72% of Common Stock
FIRST SECURITY: ClearBridge Discloses 3.6% Equity Stake
FIRST SECURITY: FSGBank Discloses 5.9% Equity Stake
FIRST SECURITY: Wellington Management Holds 7.7% Equity Stake
FREI NORTH AMERICAN: Moody's Assigns 'Ba3' Rating to Term Loan B
FREIF NORTH AMERICAN: S&P Assigns 'BB-' Rating to Term Loan
FUEL DOCTOR: Faces Complaint Over Breach of Sponsorship Pact
GAC STORAGE: BBT Seeks Additional Adequate Protection Provisions
GARLOCK SEALING: Asbestos Claimants Wants Plan Outline Denied
GETTY PETROLEUM: Aims to Advance Bid to Vacate $230MM Award
GELTECH SOLUTIONS: Peter Cordani Discloses 5.3% Equity Stake
GELTECH SOLUTIONS: Michael Cordani Discloses 3.2% Equity Stake
GELTECH SOLUTIONS: Phillip O'Connell Holds 7.4% Equity Stake
GIBRALTAR KENTUCKY: Files for Chapter 11 Bankruptcy Protection
GRACEWAY PHARMACEUTICALS: Settles Claims With GTCR for $6-Mil.
GREEN EARTH: Incurs $4.6 Million Net Loss in Dec. 31 Quarter
GSC GROUP: Court Confirms Black Diamond-Sponsored Ch. 11 Plan
GULFSTREAM INT'L: Trustee Says Execs Shouldn't Get D&O Cash
HEIDE & COOK: Files for Chapter 11 Bankruptcy to Restructure Debts
HOSTESS BRANDS: U.S. Objects to Bid to Sell Polluted Sites
HOSTESS BRANDS: U.S. Trustee Forms Creditors Committee
HOSTESS BRANDS: Venable LLP OK'd as Employee Benefits Counsel
HOWARD & PHIL'S: Lawmaker-Owner Got Financing From Countrywide
INDEPENDENCE TAX: Reports $2.2 Million Net Income in Dec. 31 Qtr.
INTELLIPHARMACEUTICS: Deloitte & Touche Raises Going Concern Doubt
INTERNATIONAL MEDIA: Wins Court OK to Auction TV Stations
JEFFERSON COUNTY: Moody's Reviews Caa3 Rating on $3.14-Bil. Debt
JMC STEEL: Moody's Affirms 'B2' Corporate Family Rating
KLN STEEL: Says Mystery Buyer Plans to Acquire Assets
LACK'S STORES: Access to Lenders' Cash Collateral Expires June 30
LACK'S STORES: Court Approves Settlement with Secured Lenders
LEO GENTRY: Nursery Files for Chapter 11 Bankruptcy
LEXINGTON ROAD: Gets Court Approval to Use Emergency Fund
LONE STAR ROOFING: Blames Bankruptcy to Staffing, Lender Issues
LSP ENERGY: Meeting to Form Creditors' Panel on Feb. 21
MACCO PROPERTIES: Trustee Can Hire Price Edwards as Broker
MAGLEV INC: Auction Firm Puts Assets Up for Sale March 6
MAJESTIC CAPITAL: Files First Amended Chapter 11 Plan
MARANI BRANDS: GAM Holding Discloses 10.6% Equity Stake
MASCO CORP: Moody's Says 'Ba2' CFR Unaffected by Charges
MEDICAL BILLING: Inks Registration Rights Agreement with Medtrx
MERCER INT'L: Moody's Says Fibrek Offer No Impact on 'B2' CFR
MF GLOBAL: Corporate "Personhood" Issue to Be Heard
NATIONAL HOLDINGS: Kacy Rozelle Appointed to Board of Directors
NEVADA CANCER: Taps Meade & Roach to Handle CMS and HHS Issue
NORTHERN BERKSHIRE: Carl Marks Financial Services Expanded
NUVEEN INVESTMENT: Moody's Assigns Caa1 Rating to $500-Mil. Loan
OCEAN PLACE: Seeks Further Cash Collateral Access Thru Feb. 29
OLD CORKSCREW: Plan Solicitation Period Extended Until March 23
OVERLAND STORAGE: Austin Marxe Discloses 19.9% Equity Stake
PACIFIC MONARCH: Court OKs Lesley Thomas as Tax Accountants
PEAK BROADCASTING: Rabobank Says Acceptances Not in Good Faith
PERPETUAL ENERGY: S&P Affirms Long-Term 'B' Corp. Credit Rating
PISTOL PETE'S: Files for Chapter 11 Bankruptcy Protection
PRECISION DRILLING: S&P Affirms 'BB+' Corporate Credit Rating
QUANTUM FUEL: Settles WB QT $700,000 Promissory Note in Shares
RAILAMERICA INC: Moody's Assigns 'B1' Rating to Term Loan B
REAL ESTATE ASSOC: John McGrath Resigns as Partnership CEO
REGIONS FINANCIAL: Moody's Affirms 'Ba3' Senior Unsecured Rating
RITE AID: Moody's Assigns 'Caa3' Rating to $480-Mil. Sr. Notes
RITE AID: S&P Assigns 'CCC' Rating to $481-Mil. Sr. Unsec. Notes
ROCK-TENN: Moody's Assigns 'Ba1' Rating to Sr. Unsecured Notes
SALON MEDIA: E. Hambrecht & R. Ellis Resign from Board
SEQUENOM INC: BlackRock Discloses 6% Equity Stake
SEQUENOM INC: William Edwards Holds 5.4% Equity Stake
SFVA INC: Officials Intend to Submit Plan Next Week
SNOKIST GROWERS: Creditors Committee Taps Kimel Law as Counsel
STARWOOD HOTELS: S&P Raises Corporate Credit Rating From 'BB+'
STEINWAY MUSICAL: Moody's Reviews 'B1' Corporate for Downgrade
STRATEGIC AMERICAN: Begins Water Injection in Illinois Project
SUNTRICITY POWER: Meeting to Form Creditors' Panel on Feb. 23
TALON INTERNATIONAL: Mark Dyne Discloses 5.1% Equity Stake
TENSAR CORPORATION: Moody's Changes PDR to Caa2/LD
TERRESTAR NETWORKS: DISH to Close Sale Deal After FCC Nod
UNI-PIXEL INC: Austin Marxe Discloses 7% Equity Stake
VINEYARD AT SERRA: Plan Provides Full Payment to All Creditors
WALLDESIGN INC: Awaits Final OK on Cash Collateral Stipulation
WALLDESIGN INC: U.S. Trustee Forms Creditors Committee
WASHINGTON LOOP: Liquidating Plan Outline Hearing Set for Feb. 23
WASHINGTON LOOP: Wants Sale in Conjunction with Plan Approved
WATERS OF AMERICA: Moody's Assigns 'Caa1' Rating to Term Loans
WEIGHT WATCHERS: Moody's Affirms 'Ba1' CFR; Outlook Stable
WPCS INTERNATIONAL: Karen Singer Ceases to Hold 5% Equity Stake
* Moody's Says Low-Rated PE Firms See Demand for Maturing Debt
* Sen. Wants Answers on Exec Bonuses at Bankrupt Companies
* Crowell Loses 6 Partners to Thompson, Weil Amid Scandal
* Solus Snags Deutsche Bank's Distressed Products Leaders
* Third Avenue Investing in Millstein & Co
* Z Capital Founder Pledges $100,000 to UNC Business School
* Departing NY Bankruptcy Chief Leaves Behind 'Mega' Legacy
* BOOK REVIEW: Kenneth M. Davidson's Megamergers
*********
AEOLUS PHARMACEUTICALS: Posts $2.9MM Net Income in Dec. 31 Qtr.
---------------------------------------------------------------
Aeolus Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting
net income of $2.97 million on $2.21 million of contract revenue
for the three months ended Dec. 31, 2011, compared with a net loss
of $7.62 million on $0 of contract revenue for the same period
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $2.77 million
in total assets, $22.85 million in total liabilities, and a
$20.08 million total stockholders' deficit.
Haskell & White LLP, in Irvine, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern
following the fiscal 2011 financial results. The independent
auditors noted that the Company has suffered recurring losses,
negative cash flows from operations and management believes the
Company does not currently possess sufficient working capital to
fund its operations past the second quarter of fiscal 2012.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/xJUDKe
About Aeolus Pharmaceuticals
Based in Mission Viejo, California, Aeolus Pharmaceuticals Inc.
(OTC BB: AOLS) -- http://www.aeoluspharma.com/-- is developing a
variety of therapeutic agents based on its proprietary small
molecule catalytic antioxidants, with AEOL 10150 being the first
to enter human clinical evaluation. AEOL 10150 is a patented,
small molecule catalytic antioxidant that mimics and thereby
amplifies the body's natural enzymatic systems for eliminating
reactive oxygen species, or free radicals. Studies funded by the
National Institutes for Health are currently underway evaluating
AEOL 10150 as a treatment for exposure to radiation, sulfur
mustard gas and chlorine gas. A second compound, AEOL 11207, has
demonstrated efficacy in animal models of Parkinson's disease and
is currently being evaluated as a potential treatment for
epilepsy.
AEROGROW INTERNATIONAL: Incurs $139,000 Net Loss in Dec. 31 Qtr.
----------------------------------------------------------------
Aerogrow International, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting a
net loss of $139,221 on $3.02 million of product sales for the
three months ended Dec. 31, 2011, compared with a net loss of
$1.44 million on $5 million of product sales for the same period
during the prior year.
The Company reported a net loss of $2.71 million on $6.08 million
of product sales for the nine months ended Dec. 31, 2011, compared
with a net loss of $5.29 million on $8.20 million of product sales
for the same period a year ago.
The Company's balance sheet at Dec. 31, 2011, showed $5.66 million
in total assets, $10.03 million in total liabilities, and a
$4.37 million total stockholders' deficit.
"The quarter ended December 31st was another important step
forward in our turnaround," said Mike Wolfe, CEO of AeroGrow. "We
improved our gross margin, kept our costs contained and delivered
solid operating profits, continuing and building upon the positive
trends of the last several quarters."
For Fiscal 2011, the Company's independent auditors expressed
substantial doubt about the Company's ability to continue as a
going concern. As reported in the TCR on Aug. 30, 2011, Eide
Bailly LLP, in Fargo, North Dakota, said the Company does not
currently have sufficient liquidity to meet its anticipated
working capital, debt service and other liquidity needs in the
near term.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/14cOPs
About AeroGrow
Boulder, Colo.-based AeroGrow International, Inc., is a developer,
marketer, direct-seller, and wholesaler of advanced indoor garden
systems designed for consumer use and priced to appeal to the
gardening, cooking, and healthy eating, and home and office decor
markets.
AES EASTERN: Committee Taps Ashby & Geddes as Delaware Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of AES Eastern
Energy, L.P., et al., asks the U.S. Bankruptcy Court for the
District of Delaware for authorization to retain Ashby & Geddes,
P.A., as Delaware counsel and conflicts counsel, nunc pro tunc to
Jan. 23, 2012.
As Delaware counsel and conflicts counsel, Ashby & Geddes, among
others, will:
a. provide legal advice regarding the rules and practices of
the Court applicable to the Committee's powers and duties as
an official committee appointed under Section 1102 of the
Bankruptcy Code;
b. provide legal advice regarding any sale of the Debtors'
assets pursuant to Section 363 of the Bankruptcy Code or
otherwise;
c. provide legal advice regarding any sale of the Debtors'
assets pursuant to Section 363 of the Bankruptcy code or
otherwise; and
d. provide legal advice regarding any disclosure statement and
plan filed in these cases and with respect to the process
for approving or disapproving a disclosure statement and
confirming or denying confirmation of a plan.
William P. Bowden, a member of the firm of Ashby & Geddes, attests
that the firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code and does not represent or
hold an interest adverse to the Committee or the Debtors'
unsecured creditors.
The principal attorneys and paralegal presently designated to
represent the Committee and their current standard hourly rates
are:
William P. Bowden, Member $640
Karen B. Skomorucha, Associate $385
Benjamin W. Keenan, Associate $360
Marie M. Degnan, Associate $235
Christopher P. Warnick, Paralegal $185
About AES Eastern
Ithaca, New York-based AES Eastern Energy, L.P., either directly
or indirectly, control six coal-fired electric generating plants
located in New York State. Currently, the Debtors actively
operate two of the six Power Plants and sell the electricity
generated by those Power Plants, as well as unforced capacity and
ancillary services, into the New York wholesale power market to
utilities and other intermediaries under short-term agreements or
directly in the spot market.
AES Eastern Energy and 13 affiliates filed for Chapter 11
bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on
Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and
Richards, Layton & Finger, P.A., are legal counsel to AES Eastern
Energy and affiliates. Barclays Capital is serving as investment
banker and financial advisor. Kurtzman Carson Consultants serves
as claims and noticing agent. AES Eastern Energy estimated
$100 million to $500 million in assets and $500 million to
$1 billion in debts. The petition was signed by Peter Norgeot,
general manager.
Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer,
Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq.,
Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby
& Geddes, P.A., serve as counsel to the Creditors Committee. FTI
Consulting Inc. is the financial advisor.
AES EASTERN: Committee Taps FTI Consulting as Financial Advisor
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of AES Eastern
Energy, L.P., et al., asks the U.S. Bankruptcy Court for the
District of Delaware for authorization to retain FTI Consulting,
Inc., as financial advisor, nunc pro tunc to Jan. 13, 2012.
As financial advisor to the Committee, FTI Consulting, among
others, will:
1. assist in the review of financial related disclosures
required by the court, including the schedules of assets and
liabilities, the statement of financial affairs and monthly
operating reports;
2. assist in the preparation of analyses required to assess the
use of cash collateral;
3. assist with the assessment and monitoring of the Debtors'
short term cash flow, liquidity, and operating results; and
4. assist with the review of the Debtors' proposed key employee
retention and other employee benefit programs.
FTI will seek payment for compensation on a fixed monthly basis of
$125,000 and a completion fee of $500,000, plus reimbursement of
actual and necessary expenses incurred by FTI, including legal
fees related to this retention application and future fee
applications as approved by the Court. The completion fee will be
considered earned and payable, subject to Bankruptcy Court
approval, upon the earliest occurrence of: (a) confirmation of a
Chapter 11 plan of reorganization or liquidation, or (b) the sale,
disposition, or transfer of the Somerset facilities and related
assets.
In addition, FTI will be compensated at its customary hourly rates
for any services related to the litigation and testimony
associated with the evaluation and analysis of avoidance actions,
including fraudulent conveyances, preferential transfers and
dividends, to wit:
Senior Managing Directors $780 - $895
Directors/Managing Directors $560 - $745
Consultants/Senior Consultants/Managers $280 - $530
Administrative/Paraprofessionals/Project Analyst $115 - $230
Andrew Scruton, a Senior Managing Director with FTI Consulting,
attests that FTI does not hold or represent any interest adverse
to the estate.
About AES Eastern
Ithaca, New York-based AES Eastern Energy, L.P., either directly
or indirectly, control six coal-fired electric generating plants
located in New York State. Currently, the Debtors actively
operate two of the six Power Plants and sell the electricity
generated by those Power Plants, as well as unforced capacity and
ancillary services, into the New York wholesale power market to
utilities and other intermediaries under short-term agreements or
directly in the spot market.
AES Eastern Energy and 13 affiliates filed for Chapter 11
bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on
Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and
Richards, Layton & Finger, P.A., are legal counsel to AES Eastern
Energy and affiliates. Barclays Capital is serving as investment
banker and financial advisor. Kurtzman Carson Consultants serves
as claims and noticing agent. AES Eastern Energy estimated
$100 million to $500 million in assets and $500 million to
$1 billion in debts. The petition was signed by Peter Norgeot,
general manager.
Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer,
Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq.,
Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby
& Geddes, P.A., serve as counsel to the Creditors Committee. FTI
Consulting Inc. is the financial advisor.
AES EASTERN: Committee Taps Kramer Levin as Lead Counsel
--------------------------------------------------------
The Official Committee of Unsecured Creditors of AES Eastern
Energy, L.P., et al., asks the U.S. Bankruptcy Court for the
District of Delaware for authorization to retain Kramer Levin
Naftalis & Frankel LLP as lead counsel for the Committee, nunc pro
tunc to Jan. 12, 2012.
As lead counsel, Kramer Levin's services will include, without
limitation, assisting, advising and representing the Committee
with respect to, among others, the following matters:
1. The administration of these cases and the exercise of
oversight with respect to the Debtors' affairs including all
issues in connection with the Debtors, the Committee and
the Chapter 11 cases;
2. The preparation on behalf of the Committee of necessary
applications, motions, memoranda, orders, reports and other
legal papers;
3. Appearances in Court and statutory meetings of creditors
to represent the interests of the Committee; and
4. The negotiation, formulation, drafting and confirmation of a
plan or plans of reorganization and matters related thereto,
including the negotiation of any "Section 363" sales of any
of the Debtors' assets.
As compensation for its services, Kramer Levin's team will bill:
Robert T. Schmidt and Gregory A. Horowith, both of whom are
partners, at $865 per hour, other partners at a range of $675
through $1,025 per hour, and associates at a range of $375 through
$765 per hour.
Robert T. Schmidt, a member of Kramer Levin, attests that the firm
is "disinterested" as that term is defined in Section 101(14) of
the Bankruptcy Code.
About AES Eastern
Ithaca, New York-based AES Eastern Energy, L.P., either directly
or indirectly, control six coal-fired electric generating plants
located in New York State. Currently, the Debtors actively
operate two of the six Power Plants and sell the electricity
generated by those Power Plants, as well as unforced capacity and
ancillary services, into the New York wholesale power market to
utilities and other intermediaries under short-term agreements or
directly in the spot market.
AES Eastern Energy and 13 affiliates filed for Chapter 11
bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on
Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and
Richards, Layton & Finger, P.A., are legal counsel to AES Eastern
Energy and affiliates. Barclays Capital is serving as investment
banker and financial advisor. Kurtzman Carson Consultants serves
as claims and noticing agent. AES Eastern Energy estimated
$100 million to $500 million in assets and $500 million to
$1 billion in debts. The petition was signed by Peter Norgeot,
general manager.
Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer,
Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq.,
Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby
& Geddes, P.A., serve as counsel to the Creditors Committee. FTI
Consulting Inc. is the financial advisor.
AHERN RENTALS: Taps DLA Piper as Co-Counsel
-------------------------------------------
Ahern Rentals, Inc., asks the U.S. Bankruptcy Court for the
District of Nevada for authorization to employ DLA Piper LLP (US)
as the Debtor's co-counsel, effective as of Jan. 15, 2012.
As co-counsel, DLA will:
1. advise the Debtor with respect to its powers and duties as
debtor and debtor-in-possession in the continued management
and operation of its business and properties;
2. prepare, on behalf of the Debtor, motions, applications,
answers, orders, reports, and papers necessary to the
administration of the estate;
3. prepare and negotiate on the Debtor's behalf a plan of
reorganization, disclosure statement, and all related
agreements and documents, and taking any necessary action on
behalf of the Debtor to obtain confirmation of a plan; and
4. perform other necessary legal services and provide other
necessary legal advice to the Debtor in connection with its
Chapter 11 case.
To the best of the Debtor's knowledge, the partners, counsel, and
associates of DLA are "disinterested persons" as that term is
defined in Bankruptcy Code Section 101(14).
As compensation for their services, DLA professionals bill at
these hourly rates:
Partners $530 - $1,120
Counsel $300 - $940
Associates $320 - $730
Para-professionals $85 - $455
The attorney leading the DLA engagement is Mr. Galardi whose
present hourly rate is $975.
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. Lawyers
at Gordon Silver 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. In its schedules,
the Debtor disclosed $485,807,117 in assets and $649,919,474 in
liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
AHERN RENTALS: Panel Seeks OK for Information-Sharing Protocol
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Ahern Rentals,
Inc., asks the U.S. Bankruptcy Court for the District of Nevada
for authorization (a) to implement an information-sharing protocol
regarding the dissemination of non-public information (about the
Debtor and its business) to the Debtor's unsecured creditors, nunc
pro tunc to Jan. 9, 2012, and (b) to engage Kurtzman Consultants,
LLC, as its website administrator.
The Committee will engage KCC to establish and maintain, subject
to the terms of any order of the Court, the Committee Website to
provide access to the information for unsecured creditors. The
Committee Website Expenses will be treated as administrative
expense claims against the Debtor' estate pursuant to Bankruptcy
code Section 503(b).
A full text copy of the motion, including the proposed information
protocol and the KCC Fee Structure, is available for free at:
http://bankrupt.com/misc/ahernrentals.doc376.pdf
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. Lawyers
at Gordon Silver 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. In its schedules,
the Debtor disclosed $485,807,117 in assets and $649,919,474 in
liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
AHERN RENTALS: Can Employ Oppenheimer & Co. as Financial Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada granted Ahern
Rentals, Inc., permission to employ Oppenheimer & Co. Inc. as
financial advisor and investment banker, nunc pro tunc to the
petition date.
As reported in the TCR on Jan. 18, 2012, as financial advisor and
investment banker, Oppenheimer will render general financial
advisory, investment banking, and restructuring services,
including but not limited to:
a. familiarizing itself with the business, operations,
properties, financial condition and prospects of
Debtor;
b. if the Debtor determines to undertake a "transaction,"
advising and assisting Debtor in structuring and
effecting the financial aspects of such a transaction
or transactions;
c. providing financial advice and assistance to the Debtor
in developing and seeking approval of a plan of
reorganization;
d. if requested by Debtor, providing financial advice and
assistance to Debtor in structuring any new securities or
evidences of indebtedness to be issued under the Plan and
analyzing the feasibility of potential capital structures
for the Debtor;
e. if requested by the Debtor, assisting in negotiations
with entities or groups affected by the Plan; and
If the Debtor's restructuring involves a sale, Oppenheimer will:
1. provide financial advice and assistance to the Debtor in
connection with a sale, identify potential acquirors
and, at Debtor's request, contact such potential
acquirors;
2. at Debtor's request, assist Debtor in preparing a
Sale memorandum; and
3. if requested by Debtor, assist Debtor and/or
participate in negotiations with potential
acquirors.
Further, if the restructuring involves a financing, Oppenheimer
will:
a. provide financial advice and assistance to the Debtor
in structuring and effecting a financing;
b. if Oppenheimer and Debtor deem it advisable, assist
Debtor in developing and preparing a memorandum to be used
in soliciting potential investors, it being agreed that (A)
the financing offering memorandum will be based entirely
upon information supplied by the Company, and (B) the Debtor
will be solely responsible for the accuracy and completeness
of the memorandum; and
c. identify potential investors and contact or assist the
Debtor in contacting, and/or participating in negotiations
with, potential Investors.
As set for the in engagement letter, Oppenheimer will receive:
(a) a monthly fee in the amount of $50,000 per month
beginning on the fifth month of which 50% of the
monthly fee shall be credited toward a restructuring
transaction fee, sale transaction fee, or financing
Fee;
(b) a restructuring transaction fee equal to the greater
of (a) 0.5% of the aggregate amount of Debtor's Second
Priority Notes due 2013 that are reinstated, and
(b) $500,000 but in no even greater than $1,000,000
upon the effectiveness of a Plan;
(c) a sale transaction fee equal to 0.375% of the
transaction value upon the consummation of a
sale;
(d) a financing fee, upon consummation of any financing, equal
to: (i) 0.5% of the aggregate gross commitment of any new
first lien senior secured indebtedness issued or
reinstated; (ii) 1.0% of the aggregate gross commitment of
any new first lien "lastout" or "first-loss" or similar
senior secured indebtedness issued or reinstated; (iii)
1.5% of the aggregate gross proceeds of any new
indebtedness ranked junior to any senior debt issued; (iv)
2.0% of the gross proceeds of any equity or equity-linked
securities or obligations issued; and (v) with respect to
any other securities or indebtedness issued, such placement
fees or other compensation as will be customary under the
circumstances and mutually agreed in good faith by the
Debtor and Oppenheimer; and/or
(e) a DIP financing fee equal to $390,000 earned and
payable upon final approval of the Debtor's
debtor-in-possession credit facility.
The Debtor will only pay either a sale transaction fee or
restructuring transaction fee in the event both are earned as
provided therein, not both. Further, the minimum financing fee
payable to Oppenheimer is $500,000 and the maximum financing fee
payable to Oppenheimer is $1,000,000.
During the 90-day period prior to the Petition Date, Debtor paid
Oppenheimer a total of $175,000, in advance for services to be
rendered and in arrears for expenses incurred.
The Debtor assures the Court that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
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. Lawyers
at Gordon Silver 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. In its schedules,
the Debtor disclosed $485,807,117 in assets and $649,919,474 in
liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
AHERN RENTALS: Can Employ Sea Port Group as Investment Banker
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada has granted
Ahern Rentals, Inc., permission to employ Sea Port Group
Securities, LLC, as financial advisor and investment banker, nunc
pro tunc to the petition date.
As reported in the TCR on Jan. 17, 2012, upon retention, the firm
will, among other things:
a. familiarize itself with the business, operations,
properties, financial condition and prospects of the Debtor;
b. if the Debtor determines to undertake a Transaction, advise
and assist the Debtor in structuring and effecting the
financial aspects of such a transaction or transaction; and
c. provide financial advice and assistance to Debtor in
developing and seeking approval of a plan of reorganization.
The firm will receive:
a. a monthly fee in the amount of $50,000 per month, beginning
on the fifth month of which 50% of the monthly fee will be
credited toward a restructuring transaction fee, sale
transaction fee, or financing fee;
b. a restructuring transaction fee equal to the greater of (a)
0.5% of the aggregate amount of Debtor's Second Priority
Notes due 2013 that are reinstated, and (b) $500,000 but in
no even greater than $1,000,000 upon the effectiveness of a
Plan;
c. a sale transaction fee equal to .375% of the transaction
value upon the consummation of a sale;
d. a financing fee, upon consummation of any financing, equal
to: (i) .5% of the aggregate gross commitment of any new
first lien senior secured indebtedness issued or reinstated;
(ii) 1.0% of the aggregate gross commitment of any new first
lien "last- out" or "first-loss" or similar senior secured
indebtedness issued or reinstated; (iii) 1.5% of the
aggregate gross proceeds of any new indebtedness ranked
junior to any Senior Debt issued; (iv) 2.0% of the gross
proceeds of any equity or equity-linked securities or
obligations issued; and (v) with respect to any other
securities or indebtedness issued, such placement fees or
other compensation as shall be customary under the
circumstances and mutually agreed in good faith by the
Debtor and Oppenheimer; and
e. a DIP financing fee equal to $210,000 earned and payable
upon final approval of the Debtor's debtor-in-possession
credit facility.
The Debtor will only pay either the sale transaction fee or
restructuring transaction fee in the event both are earned as
provided therein, not both. Further, the minimum financing fee
payable to Sea Port is $500,000 and the maximum financing fee
payable to Sea Port is $1,000,000.
In addition to the fees, Sea Port also intends to seek
reimbursement for reasonable expenses incurred in the Chapter 11
case in a manner and at rates consistent with charges generally
made to its other clients, and in accordance with any applicable
Guidelines for Fees and Disbursements for professionals in the
District of Nevada Bankruptcy Cases.
Nicholas W. Tell, Jr. attests that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
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. Lawyers
at Gordon Silver 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. In its schedules,
the Debtor disclosed $485,807,117 in assets and $649,919,474 in
liabilities.
The Official Committee of Unsecured Creditors has tapped Covington
& Burling LLP as counsel, Downey Brand LLP as local counsel, and
FTI Consulting as financial advisor.
ALEXANDER GALLO: Plan Votes Deadline Scheduled for March 8
----------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York will convene a hearing on March 16,
2012, at 10:00 a.m. (prevailing Eastern Time), to consider the
confirmation of Alexander Gallo Holdings LLC, et al.'s First
Modified Joint Plan of Liquidation dated as of Jan. 27, 2012.
Ballots accepting or rejecting the Plan, and any objections are
due 5:00 p.m., on March 8. The Debtors and any other party-in-
interest will file replies, if any, to objections to confirmation
of the Plan by March 13, at 5:00 p.m.
According to the Disclosure Statement, the Plan provides for the
limited substantive consolidation of the Debtors' estates, but
solely for the purposes of the Plan, including voting.
Under the Plan, holders of allowed claims entitled to
distributions under the Plan will be entitled to their share of
assets available for distribution to the claim without regard to
which Debtor was originally liable for the claim.
The Plan also provides that each holder of an Allowed General
Unsecured Claim will receive on account of Allowed General
Unsecured Claim the holder's Pro Rata Share of the proceeds of the
Liquidating Trust Assets, including, but not limited to the
proceeds of the Preserved Actions, until all Allowed General
Unsecured Claims are paid in full or the Liquidating Trust Assets
are exhausted.
A full-text copy of the First Modified Disclosure Statement
for the Debtors' First Modified Joint Plan of Liquidation is
available for free at:
http://bankrupt.com/misc/ALEXANDERGALLO_ds_1stmodified.pdf
About Alexander Gallo
Marietta, Georgia-based Alexander Gallo Holdings LLC --
http://www.alexandergalloholdings.com-- is the largest full
service, IT-enabled court reporting and litigation support
services company in the United States. AGH offers court
reporting, litigation support, trial software and other similar
services and has the only true national footprint in its market,
with roughly 55 offices located throughout the United States, and
a preferred provider network which serves as an extension of
Alexander Gallo's geographic reach. Founded in 1999 by Alexander
J. Gallo, a former court reporter, AGH has made 18 acquisitions
since 2003. Mr. Gallo has remained as CEO.
AGH, along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 11-14220) on Sept. 7, 2011.
Alexander Gallo will sell the business via 11 U.S.C. Sec. 363 to
Bayside Capital Inc., which had acquired $22 million in second-
lien debt. The price wasn't disclosed.
Alexander Gallo disclosed assets of $208 million and debt totaling
$258 million as of June 30, 2011. Liabilities include $47 million
on a first-lien revolving credit and term loan where Wells Fargo
Bank NA is agent. In addition to the second-lien debt held by
Bayside, there is $33 million in junior unsecured subordinated
notes owing to Harvest Equity Partners LLC plus another
$148 million in junior unsecured subordinated notes owing to
insider Gallo Holdings LLC. As reported in the Troubled Company
Reporter on Nov. 1, 2011, the Alexander Gallo disclosed
$41,981,048 in assets and $259,153,046 in liabilities as of the
Chapter 11 filing.
Bayside is providing $20 million in financing for the Chapter 11
effort. The new loan will have a first priority lien on
unencumbered assets and a lien behind the first-lien debt.
Bankruptcy Judge Allan J. Gropper presides over the case. Thomas
R. Califano, Esq., Jeremy R. Johnson, Esq., Esq., and Daniel G.
Egan, Esq., at DLA Piper LLP (US), in New York, serve as the
Debtors' general counsel. Squire, Sanders & Demsey (US) LLP
serves as the Debtor's corporate counsel. The Debtors' financial
advisor is Gordian Group, LLC. Marc L. Pfefferle, a partner at
Carl Marks Advisory Group LLC, serves as the Debtors' chief
restructuring advisor. Kurtzman Carson Consultants LLC serves as
the Debtor's claims agent. KPMG LLP serves as their auditors to
provide auditing, tax compliance and tax consulting services.
As reported in the TCR on Dec. 8, 2011, an affiliate of Bayside
Capital, Inc., completed the acquisition of Alexander Gallo's
assets.
ALLY FINANCIAL: Signs Underwriting Pact with Barclays, Et Al.
-------------------------------------------------------------
Ally Financial Inc. entered into an Underwriting Agreement
incorporating Ally's Underwriting Agreement Standard Provisions
with Barclays Capital Inc., Citigroup Global Markets Inc.,
Goldman, Sachs & Co., and Morgan Stanley & Co. LLC, as
representatives of the several Underwriters, pursuant to which
Ally agreed to sell to the Underwriters $1,000,000,000 aggregate
principal amount of 5.500% Senior Guaranteed Notes due 2017. The
Notes will be guaranteed by Ally US LLC, IB Finance Holding
Company, LLC, GMAC Latin America Holdings LLC, GMAC International
Holdings B.V. and GMAC Continental Corporation, each a subsidiary
of Ally, on an unsubordinated basis.
The Securities were registered pursuant to Ally's shelf
registration statement on Form S-3, which became automatically
effective on Jan. 3, 2011.
The Underwriting Agreement contains customary representations,
warranties and covenants of the Company, conditions to closing,
indemnification obligations of the Company and the Underwriters,
and termination and other customary provisions.
A full-text copy of the Underwriting Agreement is available at:
http://is.gd/eVwBCL
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/
-- is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc.
to advise on a range of issues, including strategic alternatives
for the mortgage business and repayment of taxpayer funds.
The Company's balance sheet at Sept. 30, 2011, showed $181.95
billion in total assets, $162.22 billion in total liabilities and
$19.73 billion in total equity.
The Company reported a net loss of $201 million on $2.72 billion
of Global Automotive Services for the year 2011, compared with net
income of $1.07 billion on $3.11 billion of Global Automotive
Services during the prior year.
ResCap
According to the Form 10-Q for the quarter ended Sept. 30, 2011,
although Ally's continued actions through various funding and
capital initiatives demonstrate support for ResCap, there can be
no assurances for future capital support. Consequently, there
remains substantial doubt about ResCap's ability to continue as a
going concern. Should Ally no longer continue to support the
capital or liquidity needs of ResCap or should ResCap be unable to
successfully execute other initiatives, it would have a material
adverse effect on ResCap's business, results of operations, and
financial position.
Ally has extensive financing and hedging arrangements with ResCap
that could be at risk of nonpayment if ResCap were to file for
bankruptcy. At Sept. 30, 2011, Ally had $1.9 billion in secured
financing arrangements with ResCap of which $1.2 billion in loans
was utilized. At Sept. 30, 2011, the hedging arrangements were
fully collateralized. Amounts outstanding under the secured
financing and hedging arrangements fluctuate. If ResCap were to
file for bankruptcy, ResCap's repayments of its financing
facilities, including those with Ally, could be slower. In
addition, Ally could be an unsecured creditor of ResCap to the
extent that the proceeds from the sale of Ally's collateral are
insufficient to repay ResCap's obligations to the Company. It is
possible that other ResCap creditors would seek to recharacterize
Ally's loans to ResCap as equity contributions or to seek
equitable subordination of Ally's claims so that the claims of
other creditors would have priority over Ally's claims. In
addition, should ResCap file for bankruptcy, Ally's $331 million
investment related to ResCap's equity position would likely be
reduced to zero. If a ResCap bankruptcy were to occur and a
substantial amount of Ally's credit exposure is not repaid to the
Company, it could have an adverse impact on Ally's near-term net
income and capital position, but Ally does not believe it would
have a materially adverse impact on Ally's consolidated financial
position over the longer term.
* * *
As reported by the TCR on May 6, 2011, Standard & Poor's Ratings
Services raised its long-term counterparty credit ratings on both
Ally Financial Inc. (formerly GMAC Inc.) and subsidiary
Residential Capital LLC (ResCap) to 'B+' from 'B'. The outlook on
both ratings is stable. "Ally, an automobile- and mortgage-
finance and servicing company, and ResCap, its mortgage
subsidiary, improved their capital, credit quality, earnings, and
liquidity in recent months," said Standard & Poor's credit analyst
Brendan Browne. They also settled a material portion of their
mortgage repurchase risk and have been profitable.
In February 2011, Moody's Investors Service upgraded the issuer
and senior unsecured ratings of Ally Financial Inc. and its
supported subsidiaries to B1 from B3. Concurrently, Moody's
upgraded the senior secured (second lien) and senior unsecured
ratings of mortgage finance subsidiary Residential Capital LLC to
Caa3 and Ca, respectively, from C. The rating outlook for both
Ally and ResCap is stable.
Moody's said the Ally and ResCap upgrades reflect a decline in
ResCap's exposure to portfolio under-performance and mortgage
repurchase risks and an associated decrease in contingent risks to
Ally relating to its support of ResCap. Additional factors
supporting Ally's upgrade include its strengthened liquidity and
capital positions and prospects for continued profitability in its
core auto finance and mortgage businesses based upon positive
asset quality performance trends.
AMERICA WEST: George Jarkesy Resigns as Director
------------------------------------------------
George Jarkesy, Jr., resigned from his position as a director of
America West Resources, Inc., on Feb. 10, 2012. Mr. Jarkesy's
resignation was not the result of any disagreement with the
company on any matter relating to the Company's operations,
policies or practices.
About America West
Based in Salt Lake City, Utah, America West Resources, Inc., is an
established domestic coal producer engaged in the mining of clean
and compliant (low-sulfur) coal. The majority of the Company's
coal is sold to utility companies for use in the generation of
electricity.
The Company reported a net loss of $16.14 million on
$10.07 million of total revenue for the year ended Dec. 31, 2010,
compared with a net loss of $8.70 million on $11.01 million of
total revenue during the prior year.
The Company reported a net loss of $16.35 million on
$11.08 million of total revenue for the nine months ended
Sept. 30, 2011, compared with a net loss of $13.22 million on
$7.31 million of total revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$31.47 million in total assets, $23.12 million in total
liabilities, and $8.35 million in total stockholders' equity.
As reported by the TCR on April 21, 2011, MaloneBailey, LLP, in
Houston, Texas, expressed substantial doubt about America West's
ability to continue as a going concern, following the 2010
financial results. The independent auditors noted that the
Company has a working capital deficit and has incurred significant
losses.
AMERICAN AIRLINES: Gets Nod for Codeshare Deal With Hainan Air
--------------------------------------------------------------
American Airlines, a founding member of oneworld(R), publicly
thanked the U.S. Department of Transportation (DOT) for granting
its request to approve a reciprocal codeshare agreement with
Hainan Airlines of the People's Republic of China.
"This decision comes after Chinese Vice President Xi Jinping
appeared at the White House on Tuesday with President Barack
Obama, who stressed that the U.S. is focused on building a better
economic and strategic relationship between the two nations," said
Will Ris, American's Senior Vice President - Government Affairs.
"In this spirit, American applauds the president and DOT for their
approval of the proposed codeshare relationship between American
and Hainan Airlines, China's fourth largest carrier.
"This new codeshare relationship will promote travel and tourism
and further strengthen economic and cultural ties between the U.S.
and China," Ris added. "A codeshare relationship will allow
American and Hainan to efficiently connect Chinese air travelers
from cities throughout China to the U.S. via Beijing and Shanghai.
Similarly, the approval will create more convenient travel options
for U.S. consumers when traveling to China."
With this approval, Hainan will be able to display the AA*
designator code on its flights between the U.S. and China
(currently Seattle-Beijing) and on its flights within China beyond
American's Beijing and Shanghai gateways. In addition, American
may now display the HU* code on its flights between the U.S. and
China (currently Chicago-Beijing, Chicago-Shanghai and Los
Angeles-Shanghai) and on flights operated by American within the
U.S. beyond Hainan's Seattle gateway.
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: Two Leadership Team Members Resign
-----------------------------------------------------
American Airlines, a wholly owned subsidiary of AMR Corporation,
today announced the retirement of two Leadership Team members, as
well as additional changes to its global leadership team that will
streamline its management organization and advance its
restructuring objectives. The organizational changes are designed
to further enhance American's focus on customers by fully
integrating all of its customer-facing activities into the
Customer organization, and by consolidating its global Sales and
Marketing functions within the Commercial organization.
Peter J. Dolara, Senior Vice President - Mexico, Caribbean and
Latin America (MCLA), will retire June 30.
Thomas R. Del Valle, Senior Vice President - Airport Services and
Cargo, will retire by June 30.
Craig S. Kreeger, Senior Vice President - Customer, will add
Airport Services and operations for MCLA and Europe and Pacific to
his current management duties.
Virasb Vahidi, Chief Commercial Officer, will assume additional
responsibility for all international Sales and Marketing by adding
Pacific, Mexico, Caribbean and Latin America to his oversight of
Europe.
Art Torno, currently Vice President - New York, has been named
Vice President - MCLA, assuming Dolara's airport and operations
duties and reporting to Kreeger.
AMR Chairman and Chief Executive Officer Tom Horton said, "On
behalf of the company and all of its stakeholders, I want to thank
Peter and Tom for their immeasurable contributions to American
Airlines, and for agreeing to stay on through mid-year to help us
through a critical phase of our restructuring. Their dedication
and commitment to employees, customers and the communities we
serve represent all that is special about American.
"As we review every area of our business to restore American to
profitability, growth, and industry leadership, key to our mission
is an intense focus on our customers. By combining all our
customer contact teams into one organization, and consolidating
our global sales and marketing activities, we will be even better
positioned to continue delivering steady improvements in our
customers' experience. These organizational changes represent a
significant step forward toward realizing the goals of our
business plan," Horton added.
Dolara has provided more than four decades of service to American
and its stakeholders, joining the company in 1971. Based in
Miami, one of American's five key domestic markets and the gateway
to Latin America, he led the development of American's industry-
leading presence throughout the MCLA region.
Dolara has held numerous sales positions and was Sales Manager for
American's Eastern Division, based in New York City and became
Vice President - Atlantic/Caribbean and New York City Sales in
March 1984. He became Senior Vice President in October 1989 and
moved to Greater Miami in 1992.
"When you think of airline industry icons, you think of Peter
Dolara. I remember looking up to him when I joined American, and
my admiration has only grown over the years," Horton said. "Peter
has always put customers first, and we are fortunate that he also
had the foresight to groom and develop many leaders, such as Art
Torno, who will take over operational responsibilities in MCLA and
continue building our leadership there. And that's also why we
can finally allow Peter to enjoy his well-deserved retirement."
Torno returns to the organization where he has spent the majority
of his American Airlines career. Previous to his tenure in New
York, Torno had responsibility for American's Caribbean
operations, which included San Juan along with 24 island
destinations. He also ran American's South American operations
from Santiago, Chile, and served in roles overseeing American's
hubs in Miami and San Juan.
Del Valle has served as Senior Vice President - Airport Services
and Cargo since September 2007. He was previously American's Vice
President of Customer Services beginning in August 1999. In 1989,
he joined the international division as General Manager in
Brussels, Belgium. Del Valle was named President of the American
Eagle's Executive Airlines operation in San Juan in 1992, and in
1997 he was appointed Managing Director - Customer Services for
American Airlines in Los Angeles. Del Valle also has been a
strong advocate of and participant in American's Veterans and
Military initiatives that support current and former service men
and women.
"Tom has served admirably in one of the most challenging jobs one
could have in the airline business, keeping our airports running
smoothly for our customers," Horton said. "There has been no
better advocate for our airport employees or customers, and he has
also given countless hours of his time to help active military,
veterans and their families. He is the type of person and
colleague who characterizes the spirit of American Airlines, and
we wish him well in his retirement."
In his expanded role, Kreeger will add responsibility for Airport
operations worldwide, encompassing North America, Europe and
Pacific, and MCLA. The addition of Airport operations to Kreeger's
current responsibilities combines reservations, inflight and
airport operations, three of the most critical interaction points
within the overall customer experience, into one organization.
This integration will facilitate a more consistent experience for
customers. Previously, as Senior Vice President - International,
Kreeger oversaw all of American's sales and ground operations
activities in Europe and Asia, becoming Senior Vice President -
Customer Experience in 2010.
"Craig has a wealth of experience in the airline business and a
unique ability to manage complex operations and service delivery
channels that span the globe and encompass a broad range of
customer touch points," Horton said. "One of the important
objectives of our management redesign is to ensure we best meet
the needs of our customers and Craig is ideally suited for that
vital mission."
As part of the management redesign, Vahidi will assume additional
responsibility for all international sales and marketing,
including Europe and Pacific, and Mexico, Caribbean and Latin
America (MCLA). Vahidi assumed the role of Chief Commercial
Officer in 2010, with oversight of Sales and Marketing, Network
and Fleet planning, Strategic Alliances, Revenue Management,
Corporate Real Estate and the AAdvantage(R) program.
Horton said, "Virasb has made great strides in strengthening our
Sales and Marketing efforts in North America and Europe. Now, we
have an important opportunity to do an even better job for our
corporate and high-value customers by integrating Pacific and MCLA
Sales and Marketing into his organization. Given Virasb's
oversight of our Strategic Alliances activities, including our
Joint Businesses in the Atlantic and Pacific markets, we believe
these changes will help us be more coordinated, nimble and
effective in meeting the needs of these important customers. As
we expand our global focus with more international flying in the
years ahead, we need an organizational structure best suited to
these objectives."
With these and other changes announced since AMR launched its
restructuring on Nov. 29, 2011, the company's Leadership Team,
which oversees the company's strategy and operations, has been
reduced from 14 to 10 members.
The Leadership Team consists of Horton, Kreeger, Vahidi, Jim Ream,
Senior Vice President - Operations, Bella Goren, Senior Vice
President - Chief Financial Officer, Maya Leibman, Senior Vice
President - Chief Information Officer, Gary Kennedy, Senior Vice
President - General Counsel and Chief Compliance Officer, Jeff
Brundage, Senior Vice President - Human Resources, Will Ris,
Senior Vice President - Government Affairs, and Dan Garton,
President and Chief Executive Officer of American Eagle Airlines.
Today's announcement marks the completion of the first step in the
company's management redesign, which will cascade throughout
American's management organization by the end of summer. During
the next phase, the Leadership Team will begin the process of
designing their organizations, starting with the management layer
that reports directly to them.
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 AXLE: TIAA-CREF Ceases to Hold 5% Equity Stake
-------------------------------------------------------
TIAA-CREF Investment Management, LLC, disclosed in an amended
Schedule 13G filing with the U.S. Securities and Exchange
Commission that, as of Dec. 31, 2011, it beneficially owns
2,410,020 shares of common stock of American Axle & Manufacturing
Holdings representing 3.20% of the shares outstanding. Teachers
Advisors, Inc., beneficially owns 1,436,027 common shares. As
previously reported by the TCR on Feb. 22, 2011, TIAA-CREF
disclosed beneficial ownership of 3,699,938 common shares. A
full-text copy of the amended filing is available for free at:
http://is.gd/6L7jbO
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures,
engineers, designs and validates driveline and drivetrain systems
and related components and chassis modules for light trucks, sport
utility vehicles, passenger cars, crossover vehicles and
commercial vehicles. AXL has financial support from GM, its
largest customer which accounted for 78% of sales in 2009.
The Company's balance sheet as of Dec. 31, 2011, showed
$2.32 billion in total assets, $2.74 billion in total liabilities,
and a $419.6 million stockholders' deficit.
* * *
In June 2011, Standard & Poor's Ratings Services raised its
corporate credit rating on American Axle & Manufacturing Holdings
Inc. to 'BB-' from 'B+'. The outlook is stable. "At the same
time, we raised our issue-level ratings on the company's senior
secured debt to 'BB' from 'BB-' and on the unsecured debt to 'B'
from 'B-'. All the recovery ratings on the debt remain
unchanged," S&P stated. "The upgrade reflects our opinion that
American Axle's credit measures will improve further over the next
12 months under the gradual recovery in North American auto
demand, and that the company's leverage will decline to 3.5x,"
said Standard & Poor's credit analyst Lawrence Orlowski.
As reported by the TCR on June 3, 2011, Moody's Investors Service
raised American Axle's Corporate Family Rating and Probability of
Default Rating to 'B1' from 'B2'. The raising of American Axle's
CFR to B1 incorporates Moody's expectation that the company's
improved year-over-year EBIT margin will largely be sustained over
intermediate-term despite potential temporary automotive
production disruptions and high gasoline prices.
AMERICAN AXLE: Richard Dauch Discloses 9.5% Equity Stake
--------------------------------------------------------
Richard E. Dauch disclosed in an amended Schedule 13G filing with
the U.S. Securities and Exchange Commission that, as of Dec. 31,
2011, it beneficially owns 7,298,687 shares of common stock of
American Axle & Manufacturing Holdings, Inc., representing 9.52%
of the shares outstanding. A full-text copy of the filing is
available for free at http://is.gd/pmteJT
About American Axle
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures,
engineers, designs and validates driveline and drivetrain systems
and related components and chassis modules for light trucks, sport
utility vehicles, passenger cars, crossover vehicles and
commercial vehicles. AXL has financial support from GM, its
largest customer which accounted for 78% of sales in 2009.
The Company's balance sheet as of Dec. 31, 2011, showed
$2.32 billion in total assets, $2.74 billion in total liabilities,
and a $419.6 million stockholders' deficit.
* * *
In June 2011, Standard & Poor's Ratings Services raised its
corporate credit rating on American Axle & Manufacturing Holdings
Inc. to 'BB-' from 'B+'. The outlook is stable. "At the same
time, we raised our issue-level ratings on the company's senior
secured debt to 'BB' from 'BB-' and on the unsecured debt to 'B'
from 'B-'. All the recovery ratings on the debt remain
unchanged," S&P stated. "The upgrade reflects our opinion that
American Axle's credit measures will improve further over the next
12 months under the gradual recovery in North American auto
demand, and that the company's leverage will decline to 3.5x,"
said Standard & Poor's credit analyst Lawrence Orlowski.
As reported by the TCR on June 3, 2011, Moody's Investors Service
raised American Axle's Corporate Family Rating and Probability of
Default Rating to 'B1' from 'B2'. The raising of American Axle's
CFR to B1 incorporates Moody's expectation that the company's
improved year-over-year EBIT margin will largely be sustained over
intermediate-term despite potential temporary automotive
production disruptions and high gasoline prices.
AMERICAN PACIFIC: Judge Markell Converts Case to Chapter 7
----------------------------------------------------------
Aviva Gat at The Deal Pipeline reports that Judge Bruce A. Markell
of the U.S. Bankruptcy Court for the District of Nevada in Las
Vegas on Feb. 9, 2012, granted a motion by American Pacific
Financial Corp.'s Chapter 11 trustee to convert the case to a
Chapter 7 liquidation.
According to the report, Judge Markell converted the Company's
case despite its intent to conduct its own liquidation. In
addition, Judge Markell denied approval of a disclosure statement
filed by the committee and the debtor on the grounds that it did
not contain adequate information.
The report says no orders had been signed as of Feb. 13, 2012.
The report notes that Chapter 11 trustee Christopher R. Barclay of
the Office of C.R. Barclay CPA had requested the case conversion
on Dec. 9, 2011, asserting that an expedited liquidation process
would be most beneficial for the debtor's estate and for its
creditors.
The report relates that APFC and the creditors' committee,
however, disagreed and were pursuing a liquidation plan that could
have provided up to $67.5 million to repay creditors.
Mr. Barclay was appointed on May 15, 2011, at the request of U.S.
Trustee August B. Landis, who alleged APFC's president and owner,
Larry R. Polhill, had committed several fraudulent and dishonest
acts, such as withholding information from investors, and grossly
mismanaged the company.
The report says the Company turned over bank accounts with funds
totaling $53,836 to Mr. Barclay on his appointment. Mr. Barclay
then immediately eliminated unnecessary operating costs and
terminated all unauthorized payments to insiders, allowing the
account balance to increase to $276,201, according to Mr.
Barclay's motion to convert the case. Administrative costs in the
case, however, swelled to $405,000, leaving APFC administratively
insolvent.
The report relates that Mr. Barclay said his task of overseeing
the debtor has been "impeded" by Mr. Polhill's poor record
keeping, which has made tracking investments difficult. Mr.
Barclay called Mr. Polhill's management "Byzantine" and said Mr.
Polhill had drawn or transferred funds for no apparent reason.
The report says the Company has only nominal ongoing operations
and most of its investments are nonperforming, even though the
debtor disclosed $16 million in investments in its schedules.
APFC's largest investment is in Capital Foods LLC, but that
investment generates no current income.
According to the report, Mr. Barclay said he opposed the
liquidation plan proposed in the case because it left Mr. Polhill
in control of key assets and did not provide sufficient
distribution to creditors. Mr. Barclay asserted that a Chapter 7
liquidation would be less costly and more efficient than a
liquidation under Chapter 11. Mr. Barclay also said a Chapter 7
trustee would better be able to pursue claims against Polhill and
other insiders that may have benefited at APFC's expense.
About American Pacific Financial
Las Vegas, Nevada-based American Pacific Financial Corporation has
been involved in private equity and sub-debt investment in various
types of companies since 1978. APFC's assets include loans and
investments in distressed real estate development projects and in
other types of distressed operating companies throughout various
industries. The Company filed for Chapter 11 bankruptcy
protection (Bankr. D. Nev. Case No. 10-27855) on Sept. 21, 2010.
The Company disclosed $16,597,647 in assets and $160,977,435 in
liabilities as of the Chapter 11 filing.
The Debtor is represented by Kaaran Thomas, Esq., and Ryan J.
Works, Esq., at McDonald Carano Wilson, LLP, in Las Vegas, Nevada.
Christopher R. Barclay, the Chapter 11 trustee appointed to take
over management of the assets, has selected Sullivan, Hill, Lewin,
Rez & Engel, as counsel.
The Creditors Committee is represented by Louis M. Bubala III,
Esq., at Armstrong Teasdale LLP.
ASARCO LLC: Court Orders Sterlite to Pay $82.75 for Damages
-----------------------------------------------------------
The U.S. Bankruptcy Court of Southern District of Texas has issued
an order regarding (i) Asarco's breach of contract claim and (ii)
Sterlite's application for refund of $50 million paid to Asarco in
December 2009.
The Bankruptcy Court, vide its order dated Feb 13, 2012, has said
that Asarco is entitled to a gross amount of $132.75 million in
incidental damages. This amount shall be reduced by $50 million
paid to Asarco in December 2009, making Asarco entitled for a net
amount of $82.75 million. Court has rejected Company's application
of refund of $50 million.
Sterlite is examining the order and will take appropriate action
based on legal advice.
About Sterlite Industries
Sterlite Industries -- http://www.sterlite-industries.com/-- is
India's largest non-ferrous metals and mining company with
interests and operations in aluminium, copper, zinc and lead and
power. It is a subsidiary of Vedanta Resources plc, a London
based diversified FTSE 100 metals and mining group. Sterlite
Industries operates in subsidiaries are Hindustan Zinc Limited for
its zinc and lead operations; Zinc International operations in
Namibia, South Africa and Ireland.
About Asarco LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
ASARCO LLC filed for Chapter 11 protection (Bankr. S.D. Tex. Case
No. 05-21207) on Aug. 9, 2005. Attorneys at Baker Botts
L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented
the Debtor in its restructuring efforts.
On Dec. 9, 2009, Asarco Incorporated and Americas Mining
Corporation's Seventh Amended Plan of Reorganization for the
Debtors became effective and the ASARCO Asbestos Personal Injury
Settlement Trust was created and funded with nearly $1 billion in
assets, including more than $650 million in cash plus a $280
million secured note from Reorganized ASARCO. The Plan, which was
confirmed both by the bankruptcy and district courts, reintegrated
ASARCO LLC back to parent Grupo Mexico concluding the four-year
Chapter 11 proceeding.
ASCENDIA BRANDS: May Access Wells Fargo DIP Loan Thru March 31
--------------------------------------------------------------
Judge Brendan Linehan Shannon entered a 16th extension order
authorizing Ascendia Brands, Inc., et al., to obtain postpetition
financing from Wells Fargo Capital Finance, LLC, formerly Wells
Fargo Foothill, Inc., and certain lender parties through March 31,
2012.
As reported in the Troubled Company Reporter on Sept. 11, 2008,
Judge Shannon authorized the Debtors to obtain, on a final basis,
up to $26,428,000 in postpetition financing, pursuant to a DIP
loan agreement dated Aug. 5, 2008. A full-text copy of the
Debtors' DIP loan agreement dated Aug. 5, 2008, is available
for free at http://ResearchArchives.com/t/s?3083
About Ascendia Brands
Headquartered in Hamilton, New Jersey, Ascendia Brands, Inc. --
http://www.ascendiabrands.com/-- was, prior to the sale of
substantially all of its assets during bankruptcy, a manufacturer
and seller of branded and private labeled health and beauty care
products in North America, including Baby Magic, Binaca, Mr.
Bubble, Calgon, Ogilvie, the healing garden, Lander and Lander
Essentials. Remaining assets consist almost entirely of accounts
receivable.
The Company and six of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-11787) on Aug. 5,
2008. Kenneth H. Eckstein, Esq., and Robert T. Schmidt, Esq.,
at Kramer Levin Naftalis & Frankel LLP, represent the Debtors in
their restructuring efforts. M. Blake Cleary, Esq., Edward J.
Kosmoswki, Esq., and Patrick A. Jackson, Esq., at Young, Conaway,
Stargatt & Taylor, LLP, serve as the Debtors' Delaware counsel.
Epiq Bankruptcy Solutions LLC is the notice, claims and balloting
agent to the Debtors.
At July 5, 2008, Ascendia Brands, Inc., had $194,800,000 in total
assets and $279,000,000 in total debts.
ASSOCIATED ASPHALT: S&P Assigns 'B+' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to U.S. liquid asphalt reseller Associated Asphalt
Partners LLC. "At the same time, we assigned a preliminary issue-
level rating of 'B+' and a recovery rating of '4' to the company's
$170 million senior secured term loan B and $20 million delayed
draw term loan. The '4' recovery rating indicates that lenders can
expect average (30% to 50%) recovery if a payment default occurs,"
S&P said.
"Our ratings on Roanoke, Va.-based Associated reflect its 'weak'
business risk profile and 'significant' financial risk profile.
Associated is a reseller of liquid asphalt in the eastern U.S.
Ratings reflect potentially lower product demand due to changes in
roadwork expenditures in its service territory, potential EBITDA
margin compression in a declining crude oil price environment, low
profitability measures inherent to a wholesale commodity business,
and significant working capital requirements," S&P said.
"While the industry's barriers to entry are low, we believe that
Associated maintains a good competitive position in its service
territory due to its long-standing relationships with its customer
base and several key suppliers," said Standard & Poor's credit
analyst Michael Grande.
"The stable outlook on Associated reflects our belief that the
company will achieve EBITDA in 2012 that should result in a debt
to EBITDA ratio below 4x, excluding peak working capital
borrowings. Higher ratings are unlikely at this time, absent a
transforming acquisition or a notably more conservative financial
policy. We could lower the ratings if liquidity becomes
constrained or debt leverage worsens above 4x, excluding working
capital debt," S&P said.
ATLANTIC & PACIFIC: Plan Confirmation Hearing Resumes
-----------------------------------------------------
The hearing to consider confirmation of the Joint Plan of
Reorganization of The Great Atlantic & Pacific Tea Company, Inc.,
et al., continued Feb. 16, 2012 before Judge Robert Drain in New
York.
The latest revised version of the Debtors' Plan is dated Feb. 4,
2012.
The Debtors amended the Plan to, among other things, modify, add
or amend certain language on account of comments received from
various parties-in-interest in the Debtors' Chapter 11 cases and
correct clerical and typographical errors.
The revised Plan specifies that:
-- Reasonable and document fees and expenses incurred by members
of the Official Committee of Unsecured Creditors during the
pendency of the Chapter 11 cases will be allowed
administrative claims in an aggregate amount not to exceed
$378,500; and
-- Any Avoidance Action that was commenced against an Entity by
the Debtors prior to Dec. 31, 2010 is preserved.
A black-lined version of the revised Plan is available for free at
http://bankrupt.com/misc/GREATATLANTIC_PlanBlklineFeb4.PDF
As reported by The Troubled Company Reporter on Feb. 9, 2012, the
Plan hinges on $490 million in new debt and equity financing
from a group led by Ron Burkle's Yucaipa Cos.; and $750 million in
bankruptcy-exit financing, which consists of a $400 million
revolving loan and $350 million term loan, the Debtors secured
from a lender syndicate led by J.P. Morgan Chase & Co. and Credit
Suisse AG. The Debtors will use the new capital and the exit
financing to pay their secured lenders in full and in cash. The
Plan provides that second-lien noteholders owed about $310 million
would be paid in full and in cash as long as they vote in favor of
the plan. Ownership interests in A&P would be canceled, and
shareholders wouldn't receive any payment under the plan.
Unsecured creditors will receive a pro rata share of what's left.
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 a
proposed Chapter 11 plan. On Dec. 20, 2011, the Bankruptcy Court
approved the adequacy of information in the disclosure statement
explaining the Plan. A hearing before the Bankruptcy Court on the
confirmation of the Plan is scheduled for Feb. 6, 2012.
AVENTINE RENEWABLE: Goldman Sachs Owns 5.9% of Common Shares
------------------------------------------------------------
The Goldman Sachs Group, Inc., and Goldman, Sachs & Co. disclose
that as of Dec. 31, 2011, they beneficially owns 443,556 of
Aventine Renewable Holdings, Inc.'s Common Stock, $0.001 par
value, representing 5.9% of the Issuer's outstanding common stock.
This filing does not reflect securities, if any, beneficially
owned by any operating units of The Goldman Sachs Group, Inc., and
its subsidiaries and affiliates whose ownership of securities is
disaggregated from that of the Goldman Sachs Reporting Units in
accordance with the Securities and Exchange Commission Release No.
34-39538 (Jan. 12, 1998).
A copy of the SC 13G is available for free at:
http://is.gd/ljGM8x
About Aventine Renewable
Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc.
(OTC BB: AVRW) -- http://www.aventinerei.com/-- markets and
distributes ethanol to many of the leading energy companies in the
U.S. In addition to producing ethanol, its facilities also
produce several by-products, such as distillers grain, corn gluten
meal and feed, corn germ and grain distillers dried yeast, which
generate revenue and allow the Company to help offset a
significant portion of its corn costs.
The Company and and all of its direct and indirect subsidiaries
filed for Chapter 11 on April 7, 2009 (Bankr. D. Del. Lead Case
No. 09-11214). The Debtors filed their First Amended Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code on
Jan. 13, 201. The Plan was confirmed by order entered by the
Bankruptcy Court on Feb. 24, 2010, and became effective on
March 15, 2010.
The Company reported a net loss of $11.2 million on $221.6 million
of net sales for the three months ended Sept. 30, 2011, as
compared to a net loss of $6.6 million on $97.5 million of net
sales for the same period of 2010.
The Company reported a net loss of $54.3 million on $632.7 million
of net sales for the nine months ended Sept. 30, 2011. The
Company reported a net loss of $266.3 million on $77.7 million of
net sales for the two months ended Feb. 28, 2010 (predecessor
period), and a net loss of $23.0 million on $231.3 million of net
sales for the seven months ended Sept. 30, 2010 (successor
period), for a combined net loss of $289.0 million on
$309.0 million of net sales for the nine months ended Sept. 30,
2010.
For the nine months ended Sept. 30, 2011, seven months ended
Sept. 30, 2010, and two months ended Feb. 28, 2010, the Company
generated net losses of $54.3 million, $23.0 million and
$266.3 million, respectively.
The loss in the nine months ended Sept. 30, 2011, is primarily due
to increased corn costs relative to ethanol values and elevated
conversion costs at Mt. Vernon due to start-up inefficiencies, as
well as a $9.4 million loss incurred on the early extinguishment
of the 13% senior secured notes due 2015. Contributing to the
loss in the seven months ended Sept. 30, 2010, was higher SG&A
expenses associated with the hiring of new executive management in
connection with the Company;'s emergence from bankruptcy. The
loss in the two months ended Feb. 28, 2010, is primarily
attributable to adjustments of $387.7 million required to report
assets and liabilities at fair value under fresh start accounting
and $20.3 million of reorganization items resulting from the
Company's Chapter 11 bankruptcy filing, which were offset by a
gain due to plan effects of $136.6 million.
The Company's balance sheet at Sept. 30, 2011, showed
$415.9 million in total assets, $264.5 million in total
liabilities, and stockholders' equity of $151.4 million.
A copy of the Form 10-Q is available for free at:
http://is.gd/nG57mO
* * *
Standard & Poor's Ratings Services lowered its corporate credit
rating on Aventine Renewable Energy Holdings Inc. to 'CCC+'. "At
the same time, it lowered the $225 million senior secured note
issue rating to 'B-'. S&P removed its ratings on Aventine from
CreditWatch with negative implications, where it placed them on
Sept. 30, 2011. The '2' recovery rating remains unchanged. The
outlook is negative," S&P said.
AWAL BANK: Gets Exclusive Right to File Plan Through April 23
-------------------------------------------------------------
Charles Russell, LLC, as foreign representative and external
administrator of Awal Bank, BSC, won Bankruptcy Court approval for
a third extension of the Debtor's exclusivity period.
Accordingly, the Debtor's exclusive period to file a chapter 11
plan is extended through April 23, 2012. It's exclusive period to
solicit acceptances of that plan is also extended through June 21,
2012.
About Awal Bank
Awal Bank BSC is a Bahrain lender owned by Saudi Arabian Saad
Group. Awal Bank was principally an investment company that
provides wholesale banking services in Bahrain including the
acceptance of deposits and the making of loans.
Awal Bank was taken into administration by the Central Bank of
Bahrain on July 30, 2009, after defaulting on loans. U.S. lawyers
for the bank said last year that under Bahrain law, Awal's
administrator had two years to decide if the bank should liquidate
or be returned to management and shareholders.
Stewart Hey, Esq., at Charles Russell LLP, as external
administrator of Awal Bank, made a voluntary petition under
Chapter 15 of the U.S. Bankruptcy Code for the bank (Bankr.
S.D.N.Y. Case No. 09-15923) on Sept. 30, 2009, following the
administration proceedings.
In 2010, the bank began experiencing a liquidity squeeze brought,
in part, by the global economic crisis. The bank ceased to
operate as a going concern since it was place into administration.
Awal Bank filed a Chapter 11 petition (Bankr. S.D.N.Y. Case
No. 10-15518) in Manhattan on Oct. 21, 2010. The Debtor
estimated $50 million to $100 million and debts in excess of
$1 billion as of the petition date.
The External Administrator is represented in the U.S. proceedings
by lawyers at Brown Rudnick LLP.
Counsel to HSBC Bank USA, National Association, are:
William J. Brown, Esq.
David J. McNamara, Esq.
Allan L. Hill, Esq.
3400 HSBC Center
Buffalo, NY 14203-2887
Tel: (716) 847-7089
E-mail: wbrown@phillipslytle.com
dmcnamara@phillipslytle.com
ahill@phillipslytle.com
AXION INTERNATIONAL: R. Rosenblum Ceases to Own 5% Equity Stake
---------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Richard Rosenblum and his affiliates
disclosed that, as of Dec. 31, 2011, they beneficially own 866,138
shares of common stock of Axion International Holdings, Inc.,
representing 3.4% of the shares outstanding. As previously
reported by the TCR on May 25, 2011, Mr. Rosenblum disclosed
beneficial ownership of 1,534,980 common shares. A full-text copy
of the amended filing is available at http://is.gd/37bL0C
About Axion International
New Providence, N.J.-based Axion International Holdings, Inc. (OTC
BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee
of patented and patent-pending technologies developed for the
production of structural plastic products such as railroad
crossties, pilings, I-beams, T-Beams, and various size boards
including a tongue and groove design that are utilized in multiple
engineered design solutions such as rail track, rail and tank
bridges (heavy load), pedestrian/park and recreation bridges,
marinas, boardwalks and bulk heading to name a few.
As reported by the TCR on May 6, 2011, RBSM LLP, in New York,
expressed substantial doubt about Axion International's ability to
continue as a going concern, following its audit of the Company's
balance sheet as of Dec. 31, 2010, and the related consolidated
statements of operations, stockholders' equity (deficit), and cash
flows for the three month period ended Dec. 31, 2010. The
independent auditors noted that the Company has incurred
significant operating losses in the current year and also in the
past.
The Company also reported a net loss of $6.57 million on
$2.18 million of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $4.46 million on $1.25 million of
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$5.96 million in total assets, $2.37 million in total liabilities,
$6.59 million in 10% convertible preferred stock, and a $3 million
total stockholders' deficit.
BANKATLANTIC BANCORP: Dimensional Fund Holds 4.1% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Dimensional Fund Advisors LP disclosed that,
as of Dec. 31, 2011, it beneficially owns 639,851 shares of common
stock of BankAtlantic Bancorp Inc. representing 4.15% of the
shares outstanding. A full-text copy of the filing is available
for free at http://is.gd/EU9N0p
About BankAtlantic Bancorp
BankAtlantic Bancorp (NYSE: BBX) --
http://www.BankAtlanticBancorp.com/-- is a bank holding company
and the parent company of BankAtlantic. BankAtlantic --
"Florida's Most Convenient Bank" with a Web presence at
http://www.BankAtlantic.com/-- has nearly $6.0 billion in assets
and more than 100 stores, and is one of the largest financial
institutions headquartered junior in Florida. BankAtlantic has
been serving communities throughout Florida since 1952 and
currently operates more than 250 conveniently located ATMs.
* * *
As reported by the TCR on March 1, 2011, Fitch has affirmed its
current Issuer Default Ratings for BankAtlantic Bancorp and its
main subsidiary, BankAtlantic FSB at 'CC'/'C' following the
announcement regarding the regulatory order with the Office of
Thrift Supervision.
BankAtlantic has announced that it has entered into a Cease and
Desist Order with the OTS at both the bank and holding company
level. The regulatory order includes increased regulatory capital
requirements, limits to the size of the balance sheet, no new
commercial real estate lending and improvements to its credit risk
and administration areas. Further, the holding company must also
submit a capital plan to maintain and enhance its capital
position.
The Company reported a net loss of $143.25 million on
$176.31 million of total interest income for the year ended
Dec. 31, 2010, compared with a net loss of $185.82 million on
$223.59 million of total interest income during the prior year.
The Company also reported a net loss of $11.28 million on
$110.36 million of total interest income for the nine months ended
Sept. 30, 2011, compared with a net loss of $96.95 million on
$135.54 million of total interest income for the same period a
year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$3.74 billion in total assets, $3.73 billion in total liabilities,
and $7.12 million in total equity.
BATAA/KIERLAND LLC: Has Access to Cash Collateral Until April 30
----------------------------------------------------------------
The Randolph J. Haines of the U.S. Bankruptcy Court for the
District of Arizona approved a stipulation authorizing
BATAA/KIERLAND, LLC, to use secured creditor JPMCC 2007-CIBC 19
East Greenway, LLC's cash collateral until April 30, 2012.
As reported in the Troubled Company Reporter on Dec. 19, 2011,
pursuant to the stipulation, secured creditor consented to the use
of its claimed cash collateral to fund only the necessary day-to-
day operational expenses and maintain the property, with a 10%
variance per category.
As adequate protection for the use of the secured creditor's cash
collateral, the secured creditor is granted, a replacement lien
upon all categories of property of the Debtor and its estate.
As further adequate protection, the Debtor will continue to
provide the secured creditor with weekly financial reports,
prepared on a cash basis, detailing income, accounts receivable
and accounts payable, in addition to month-end summaries for
actual expenditures versus budgeted expenditures which will be due
15 days after months end.
If there is any breach of the order or the budget, secured
creditor will have the right to seek an emergency hearing and
emergency relief before the Court.
The Court also ordered that any cash collateral received by the
Debtor in excess of that required for operations as authorized by
the order will be held in the Debtor's debtor-in-possession
operating account until the time as senior lender consents to, or
the Court orders, its use.
About Bataa/Kierland
Bataa/Kierland, LLC, owns and operates a Class "A" office building
known as Kierland Corporate Center located at 7047 E. Greenway
Parkway, Scottsdale, Arizona. It filed for Chapter 11 bankruptcy
protection (Bankr. D. Ariz. Case No. 11-05850) on March 9, 2011.
The Debtor estimated its assets and debts at $10 million to
$50 million. Polsinelli Shughart PC serves as the Debtor's
bankruptcy counsel.
The United States Trustee said that a committee under 11 U.S.C.
Sec. 1102 has not been appointed because an insufficient number of
persons holding unsecured claims against Bataa/Kierland have
expressed interest in serving on a committee.
BEAZER HOMES: FMR LLC Discloses 5.1% Equity Stake
-------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission on Feb. 13, 2012, FMR LLC and Edward C.
Johnson 3d disclosed that they beneficially own 3,870,610 shares
of common stock of Beazer Homes USA Incorporated representing
5.123% of the shares outstanding. As previously reported by the
TCR on Oct. 14, 2011, FMR LLC disclosed beneficial ownership of
6,431,597 common shares. A full-text copy of the amended filing
is available for free at http://is.gd/9FKOyR
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
The Company's balance sheet at Dec. 31, 2011, showed $1.87 billion
in total assets, $1.67 billion in total liabilities, and
$200.38 million in total stockholders' equity.
* * *
Beazer carries (i) a 'B-' issuer credit rating, with "stable"
outlook, from Standard & Poor's, (ii) 'Caa1' probability of
default and long term corporate family ratings from Moody's, and
(iii) 'B-' issuer default rating, with stable outlook, from Fitch
Ratings.
Fitch said in November 2010 that the ratings and Outlook for
Beazer reflect the company's healthy liquidity position, improved
capital structure as well as the challenges still facing the
housing market. Fitch expects existing home sales will decline
7.5% in 2010 and increase 6% in 2011.
S&P said that although Beazer's business and liquidity profiles
have improved, S&P doesn't anticipate raising its ratings on the
company over the next 12 months because S&P expects costs
associated with the company's heavy debt load will weigh on
profitability.
The 'Caa1' corporate family rating, Moody's said in November 2010,
reflects its expectation that Beazer has reduced costs
sufficiently that it will continue to reduce losses in fiscal
2011. The impairments and other charges are likely to be less
material going forward, given the company's improving gross margin
performance, stabilizing pricing environment, and increasing
absorptions. However, Moody's expectation is that Beazer's cash
flow performance will weaken in 2011, as the benefits of inventory
liquidation have largely played out. The ratings also reflect the
company's extended debt maturity profile, improved Moody's-
adjusted debt leverage, and increased net worth position.
BEAZER HOMES: Dimensional Fund Discloses 6.6% Equity Stake
----------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Dimensional Fund Advisors LP, disclosed that,
as of Dec. 31, 2011, it beneficially owns 5,038,770 shares of
common stock of Beazer Homes USA Inc. representing 6.67% of the
shares outstanding. As previously reported by the TCR on Feb. 22,
2011, Dimensional Fund disclosed beneficial ownership of 4,837,904
common shares. A full-text copy of the amended filing is
available for free at http://is.gd/uGs2te
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
The Company's balance sheet at Dec. 31, 2011, showed $1.87 billion
in total assets, $1.67 billion in total liabilities, and
$200.38 million in total stockholders' equity.
* * *
Beazer carries (i) a 'B-' issuer credit rating, with "stable"
outlook, from Standard & Poor's, (ii) 'Caa1' probability of
default and long term corporate family ratings from Moody's, and
(iii) 'B-' issuer default rating, with stable outlook, from Fitch
Ratings.
Fitch said in November 2010 that the ratings and Outlook for
Beazer reflect the company's healthy liquidity position, improved
capital structure as well as the challenges still facing the
housing market. Fitch expects existing home sales will decline
7.5% in 2010 and increase 6% in 2011.
S&P said that although Beazer's business and liquidity profiles
have improved, S&P doesn't anticipate raising its ratings on the
company over the next 12 months because S&P expects costs
associated with the company's heavy debt load will weigh on
profitability.
The 'Caa1' corporate family rating, Moody's said in November 2010,
reflects its expectation that Beazer has reduced costs
sufficiently that it will continue to reduce losses in fiscal
2011. The impairments and other charges are likely to be less
material going forward, given the company's improving gross margin
performance, stabilizing pricing environment, and increasing
absorptions. However, Moody's expectation is that Beazer's cash
flow performance will weaken in 2011, as the benefits of inventory
liquidation have largely played out. The ratings also reflect the
company's extended debt maturity profile, improved Moody's-
adjusted debt leverage, and increased net worth position.
BEAZER HOMES: Highbridge International Holds 4.2% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Highbridge International LLC and its
affiliates disclosed that, as of Dec. 31, 2011, they beneficially
own $400,299 aggregate principal amount of 7.5% Mandatory
Convertible Subordinated Notes due 2013, convertible into
1,783,211 shares of common stock, 7.25% Tangible Equity Units,
convertible into 1,507,607 shares of common stock, and call rights
to purchase 50,000 shares of common stock, representing 4.19% of
the shares outstanding. A full-text copy of the filing is
available at http://is.gd/cuoR33
About Beazer Homes
Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/--
headquartered in Atlanta, is one of the country's 10 largest
single-family homebuilders with continuing operations in Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada,
New Jersey, New Mexico, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed
on the New York Stock Exchange under the ticker symbol "BZH."
The Company's balance sheet at Dec. 31, 2011, showed $1.87 billion
in total assets, $1.67 billion in total liabilities, and
$200.38 million in total stockholders' equity.
* * *
Beazer carries (i) a 'B-' issuer credit rating, with "stable"
outlook, from Standard & Poor's, (ii) 'Caa1' probability of
default and long term corporate family ratings from Moody's, and
(iii) 'B-' issuer default rating, with stable outlook, from Fitch
Ratings.
Fitch said in November 2010 that the ratings and Outlook for
Beazer reflect the company's healthy liquidity position, improved
capital structure as well as the challenges still facing the
housing market. Fitch expects existing home sales will decline
7.5% in 2010 and increase 6% in 2011.
S&P said that although Beazer's business and liquidity profiles
have improved, S&P doesn't anticipate raising its ratings on the
company over the next 12 months because S&P expects costs
associated with the company's heavy debt load will weigh on
profitability.
The 'Caa1' corporate family rating, Moody's said in November 2010,
reflects its expectation that Beazer has reduced costs
sufficiently that it will continue to reduce losses in fiscal
2011. The impairments and other charges are likely to be less
material going forward, given the company's improving gross margin
performance, stabilizing pricing environment, and increasing
absorptions. However, Moody's expectation is that Beazer's cash
flow performance will weaken in 2011, as the benefits of inventory
liquidation have largely played out. The ratings also reflect the
company's extended debt maturity profile, improved Moody's-
adjusted debt leverage, and increased net worth position.
BILLMYPARENTS INC: Incurs $4.2 Million Net Loss in Dec. 31 Qtr.
---------------------------------------------------------------
BillMyParents, Inc., filed with the U.S. Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
and comprehensive loss of $4.25 million on $235,176 of revenue for
the three months ended Dec. 31, 2011, compared with a net loss and
comprehensive loss of $1.37 million on $658 of revenue for the
same period during the prior year.
The Company reported a net loss of $14.2 million on $104,030 of
revenues for the fiscal year ended Sept. 30, 2011, compared with a
net loss of $6.9 million on $6,675 of revenues for the fiscal year
ended Sept. 30, 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.95 million
in total assets, $1.37 million in total liabilities, all current,
and $583,366 in total stockholders' equity.
For Fiscal 2011, the Company's independent auditors expressed
substantial doubt about the Company's ability to continue as a
going concern. BDO USA, LLP, in La Jolla, California, noted that
the Company has incurred net losses since inception and has an
accumulated deficit and stockholders' deficiency at Sept. 30,
2011.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/ZXo0MV
About BillMyParents
San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards
with special features aimed at young people and their parents.
BMP is designed to enable parents and young people to collaborate
toward the goal of responsible spending.
BION ENVIRONMENTAL: Carret Asset Holds 7.1% Equity Stake
--------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Carret Asset Management LLC disclosed that,
as of Feb. 10, 2012, it beneficially owns 1,172,619 shares of
common stock of Bion Environmental Technologies, Inc.,
representing 7.15% based on 16,400,000 shares of common stock
outstanding on Feb. 8, 2012. A full-text copy of the filing is
available for free at http://is.gd/omfnGV
About Bion Environmental
Crestone, Colo.-based Bion Environmental Technologies, Inc.
(OTC BB: BNET) -- http://biontech.com/-- has provided
environmental treatment solutions to the agriculture and livestock
industry since 1990. Bion's patented next-generation technology
provides a unique comprehensive treatment of livestock waste that
achieves substantial reductions in nitrogen and phosphorus,
ammonia, greenhouse and other gases, as well as pathogens,
hormones, herbicides and pesticides.
The Company's balance sheet at Dec. 31, 2011, showed $8.60 million
in total assets, $10.01 million in total liabilities, $41,400 in
Series B redeemable convertible preferred stock, and a
$1.45 million total deficit.
The Company has not generated revenues and has incurred net losses
of approximately $6,998,000 and $2,976,000 during the years ended
June 30, 2011, and 2010, respectively. At Dec. 31, 2011, the
Company has a working capital deficit and a stockholders' deficit
of approximately $344,000 and $1,543,000, respectively.
GHP Horwath, PC, in Denver, Colorado, expressed substantial doubt
about the Company's ability to continue as a going concern the
fiscal 2011 financial results. The independent auditors noted
that the Company has not generated revenue and has suffered
recurring losses from operations.
BLUEGREEN CORP: Dimensional Fund Discloses 8.3% Equity Stake
------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Dimensional Fund Advisors LP disclosed that,
as of Dec. 31, 2011, it beneficially owns 2,704,394 shares of
common stock of Bluegreen Corp representing 8.3% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/SLlbaJ
About Bluegreen Corp.
Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides
places to live and play through its resorts and residential
community businesses.
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable. S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010. At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011. While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales. In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.
The Company reported a net loss of $35.87 million on
$365.67 million of revenue for the year ended Dec. 31, 2010,
compared with net income of $3.90 million on $367.36 million of
revenue during the prior year.
The Company also reported a net loss of $11.85 million on $305.43
million of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $14.16 million on $276.99 million of
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $1.12
billion in total assets, $820.20 million in total liabilities and
$306.23 million in total shareholders' equity.
* * *
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
S&P's rating outlook on the Company is stable. S&P believes that
Bluegreen will grow its fee-based sales commission revenue from
$20 million in 2009 to an estimated $50 million in 2010. At this
time, S&P expects that Bluegreen may be able to generate at least
the same amount of commission based revenue in 2011. While the
increase in fee- based revenue allowed Bluegreen to expand the
level of sales that do not require financing, S&P believes that
the company will likely remain heavily reliant on its lines of
credit, receivable- backed warehousing facilities, and access to
the timeshare securitization markets to fund timeshare sales. In
S&P's view, Bluegreen currently has adequate sources of liquidity
to cover its needs over the next 12-18 months mainly due to the
successful closing of a timeshare securitization transaction.
BORGER ENERGY: Moody's Changes Ba3 Rating Outlook to Negative
-------------------------------------------------------------
Moody's Investors Service changed the rating outlook of Borger
Energy Associates, L.P. (Borger: Ba3 senior secured) to negative
from stable.
RATINGS RATIONALE
The change in outlook is due to a recent forced outage at Unit 1
that has reduced revenues from energy and capacity payments and
sales of steam. The impact of this outage combined with a
sustained period of lower gas prices will cause this project's
coverage ratios to be below the level commensurate with the
ratings level through 2012 and into 2013. Borger's Unit 2 remains
in operation.
Borger's Unit 1 experienced a forced outage on December 4, 2011,
when bearings and compressor blades were damaged due to a loss of
oil pressure during a trip related to a fuel sensor failure. The
rotor was shipped to a Siemens subsidiary repair shop in Houston
to assess the damage and complete repairs. The rotor has since
been repaired and returned to the site and is expected to be back
in service by February 23, 2012. As a result of the outage,
however, availability will be impacted, which will in turn affect
capacity revenue. Borger receives capacity payments based upon a
12-month rolling availability and a 5-month summer peak
availability. Only the 12-month rolling availability will be
affected by the outage. Borger will dip below the 92% 12-month
rolling availability threshold required under the PPA with
Southwestern Public Service Company (SPS: Baa1 senior unsecured;
negative outlook) to receive its full capacity payment. As this
availability is calculated on a rolling 12-month basis, it will
therefore take until early 2013 before availability is expected to
rise above the threshold. Overall, the total cost of repairs
should approximate $2 million, of which half should be covered by
an insurance claim after the project's $1 million insurance
deductible.
Compounding this issue is the fact that debt service coverage
levels were already weak during the past year as a result of lower
than expected natural gas prices. This project is highly sensitive
to changes in natural gas prices, which have experienced a
prolonged downward trend. In 2007, the DSCR was 1.37x and declined
to 1.2x in 2008. The project's coverage for 2009 was 1.0x as a
result of unplanned outages that year and low natural gas prices.
The DSCR improved in 2010 to 1.10x due to reduced operational
problems and somewhat higher natural gas prices. During 2011 and
into 2012, Moody's has seen natural gas prices decline materially
leading Moody's Oil & Gas Group to revise downward their
expectation for spot natural gas prices in 2012 to $2.75/MMbtu and
2013 to $3.25/MMbtu. For the full year 2011, debt service coverage
is expected to be just above 1.0x after outlays to fund the major
maintenance reserve. As a result of the outage and the low
forecasted natural gas price, debt service coverages are expected
to remain at or near these levels through 2012.
Moody's notes that this change in outlook is occurring at a time
when Borger is being sold along with a portfolio of other
generating assets by its current owner, affiliates of ArcLight
Capital Partners, LLC (ArcLight), to affiliates of First Reserve
Energy Infrastructure Advisors, L.L.C. (First Reserve). Moody's
understands that as a condition under the purchase and sale
agreement, ArcLight has committed to cover repair costs (including
the deductible) net of insurance proceeds and compensate First
Reserve for any margin shortfall resulting from the outage with an
equity capital contribution. Under the terms of the Borger
Indenture, Moody's understands that the proposed sale can only be
completed if Moody's opines that the proposed transaction will not
in and of itself result in a ratings downgrade for Borger. Moody's
views the proposed transaction in and of itself as being credit
neutral to Borger's credit quality, and the rating of Borger is
affirmed at Ba3. As such, the rating outlook change to negative
from stable is entirely related to chronic operating issues
specific at Borger, complicated by continued low natural gas
prices, which together are expected to further weaken debt service
coverage ratios.
The negative outlook reflects the weak expected coverage levels,
compounded by low natural gas prices, and the fact that the
project will have less financial flexibility to address any
unforeseen issues that arise over the next year. In light of the
negative rating outlook, the rating or outlook is not likely to be
revised upward in the near term. The rating outlook could
stabilize if the project shows improvement in operating and
financial performance, and the rating could be upgraded if Borger
can produce a DSCR above 1.20x on a consistent and sustained
basis. Conversely, the rating could be revised downward if chronic
unplanned operating outages continue, and/or gas prices remain at
depressed levels for an prolonged period, further weakening
coverage ratios. Additionally, downward rating pressure could
surface if ArcLight does not make the stated equity capital
contribution.
The last rating action on Borger was taken on May 7, 2009, when
Moody's confirmed the Ba3 rating.
The principal methodology used in this rating was Power Generation
Projects published in December 2008.
Borger Energy Associates, L.P. is a 230 MW gas-fired cogeneration
facility located near Borger Texas. Power generated by the project
is sold to SPS, and steam is sold to ConocoPhillips (A1; senior
unsecured, under review for downgrade).
BUFFETS RESTAURANTS: U.S. Trustee Forms Creditors Committee
-----------------------------------------------------------
Roberta A. Deangelis, U.S. Trustee for Region 3 appointed five
members to the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Buffets Restaurants Holdings, Inc., et al.
The Committee is consist of:
1. Van Eerden Food Service
Attn: Daniel Van Eerden
650 Ionia Ave., S.W.
P.O. Box 3110
Grand Rapids, MI 49501
Tel: (616) 475-7402
Fax: (616) 774-3973
2. Realty Income Corporation
Attn: Michael Pfeiffer
600 La Terraza Blvd.
Escondido, CA 92025
Tel: (760) 317-2961
Fax: (760) 741-2235
3. The Coca-Cola Company
Attn: Joseph Johnson
P.O. Box 1734
Atlanta, GA 30313
Tel: (404) 676-4150
Fax: (404) 598-4150
4. Brixmor Property Group, Inc.
Attn: Timothy Bruce
420 Lexington Ave., Seventh Floor
New York 10170
Tel: (212) 869-3000
Fax: (212) 302-4776
5. GGP Limited Partnership
Attn: Julie Minnick Bowden
110 North Wacker Drive
Chicago, IL 60606
Tel: (312) 960-2707
Fax: (312) 442-6374
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases.
BUFFETS RESTAURANTS: Taps Moelis & Company as Financial Advisor
---------------------------------------------------------------
Buffets Restaurants Holdings, Inc., et al., ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ Moelis & Company LLC as financial advisor and capital
markets advisor.
Moelis & Co. will, among other things:
-- conduct a business and financial analysis of the Debtors;
-- provide advice to the Debtors to assist them in reviewing
and analyzing a potential restructuring; and
-- provide advice to the Debtors to assist them in determining
whether to pursue a sale transaction or a capital
transaction.
The Debtors have agreed to pay Moelis & Co. in cash under this fee
structure, among other things:
1. a $150,000 monthly fee;
2. a $3,000,000 general restructuring fee;
3. a sale transaction fee of: (i) 1.1% of the sale transaction
value for sale transaction value up to $325,000,000, plus
(ii) 4.0% of sale transaction value in excess of
$325,000,000;
4. a capital transaction fee equal to: (i) 6.5% of the
aggregate gross amount in the case of any capital
transaction other than the any asset-backed debt or debtor-
in-possession financing in connection with a Bankruptcy
case, or (ii) in the case of any asset-backed debt, or
debtor-in-possession financing, in connection with a
Bankruptcy case, 2.0% of the aggregate gross amount of the
capital transaction; and
5. a termination fee equal to 15.0% of any termination fee or
break up fee or similar type of compensation.
Moelis was paid a one-time retainer fee of $250,000 in May 2011.
The Debtors have agreed, as part of the overall compensation, to
certain indemnification, contribution and reimbursement
obligations.
To the best of the Debtors' knowledge, Moelis & Co. is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases.
BUFFETS RESTAURANTS: Taps Paul Weiss as Bankruptcy Counsel
----------------------------------------------------------
Buffets Restaurants Holdings, Inc., et al., ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel.
The Debtors have requested authorization to employ Young, Conaway
Stargatt & Taylor, LLP as their local bankruptcy counsel in the
cases. Paul Weiss will work closely with Young Conaway, and other
professionals that may be retained by the Debtors to avoid any
unnecessary duplication of effort.
Paul Weiss received a $100,000 retainer in November 2011. In
addition, the firm received payments totalling $822,330 in
connection with the general representation of the Debtors
prepetition.
The hourly rates of Paul Weiss' personnel are:
Partners $830 - $1,120
Counsel $760 - $795
Associates $375 - $760
Legal Assistants $85 - $250
The principal attorneys designated to represent the Debtors and
their hourly rates are:
Jeffrey D. Saferstein, partner $1,100
Eric Goodison, partner $1,085
Bruce Gruder, counsel $795
Phillip A. Weintraub, associate $695
Evan R. Zisholtz, associate $575
Justin Pines, associate $575
David Sobel, associate $505
Brooke Filler, paralegal $200
To the best of the Debtors' knowledge, Paul Weiss is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases.
BUFFETS RESTAURANTS: Taps PwC to Provide Tax Consulting Services
----------------------------------------------------------------
Buffets Restaurants Holdings, Inc., et al., ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ PricewaterhouseCoopers LLP as tax consultants.
PwC will, among other things:
-- analyze the capital structure of the Debtors;
-- to the extent necessary, Determine the Debtors' tax basis in
its assets, including in stock of subsidiaries; and
-- prepare a model that illustrates relevant tax consequences
of proposed plans of reorganization including the effects of
available tax elections and tax position of buffets at
emergence.
The hourly rates of PwC's personnel are:
Partner $735
Director $595
Manager $495
Senior Associate $395
Associate $285
To the best of the Debtors' knowledge, PwC is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. The Debtors are seeking to
reject leases for 83 underperforming restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases.
CAPITOL BANCORP: Principal Trust Discloses 5.5% Equity Stake
------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Delaware Charter Guarantee & Trust Company dba
Principal Trust Company as Trustee for the Capitol Bancorp Ltd
401(k) Plan, disclosed that, as of Dec. 31, 2011, it beneficially
owns 2,269,815 shares of common stock of Capitol Bancorp Ltd.
representing 5.53% of the shares outstanding. A full-text copy of
the filing is available for free at http://is.gd/DmCiEM
About Capitol Bancorp Limited
Capitol Bancorp Limited (NYSE: CBC) --
http://www.capitolbancorp.com/-- is a $5.1 billion national
community banking company, with a network of bank operations in 16
states. Founded in 1988, Capitol Bancorp Limited has executive
offices in Lansing, Michigan and Phoenix, Arizona.
In September 2009, Capitol and its second-tier bank holding
companies entered into a written agreement with the Federal
Reserve Bank of Chicago under which Capitol has agreed, among
other things, to submit to the Reserve Bank a written plan to
maintain sufficient capital at Capitol on a consolidated basis and
at Michigan Commerce Bank (as a separate legal entity on a stand-
alone basis); and a written plan to enhance the consolidated
organization's risk management practices, a strategic plan to
improve the consolidated organization's operating results and
overall condition and a cash flow projection.
Certain of Capitol's bank subsidiaries have entered into formal
agreements with their applicable regulatory agencies. Those
agreements provide for certain restrictions and other guidelines
and/or limitations to be followed by the banks.
In 2009, Capitol commenced the deferral of interest payments on
its various trust-preferred securities, as is permitted under the
terms of the securities, to conserve cash and capital resources.
The payment of interest may be deferred for periods up to five
years. During such deferral periods, Capitol is prohibited from
paying dividends on its common stock (subject to certain
exceptions) and is further restricted by Capitol's written
agreement with the Federal Reserve Bank of Chicago. Accrued
interest payable on such securities approximated $18.1 million at
June 30, 2010.
The Company also reported a net loss of $45.04 million on
$82.17 million of total interest income for the nine months ended
Sept. 30, 2011, compared with a net loss of $163.10 million on
$101.45 million of total interest income for the same period
during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$2.46 billion in total assets, $2.56 billion in total liabilities,
and a $93.51 million in total deficit.
As of Sept. 30, 2011, there are several significant adverse
aspects of Capitol's consolidated financial position and results
of operations which include, but are not limited to, the
following:
-- An equity deficit approximating $96 million;
-- Regulatory capital classification on a consolidated basis as
less than "adequately-capitalized" and related negative
amounts and ratios;
-- Numerous banking subsidiaries with regulatory capital
classification as "undercapitalized" or 'significantly-
undercapitalized";
-- Certain banking subsidiaries which are generally subject to
formal regulatory agreements have received "prompt
corrective action" notifications and directives from the
FDIC, which require timely action by bank management and the
respective boards of directors to resolve regulatory capital
ratios which result in classification as less than
"adequately-capitalized" or to submit an acceptable capital
restoration plan to the FDIC, and it is likely additional
PCANs or PCADs may be issued in the future or that the
banking subsidiaries may be unable to satisfactorily resolve
those notices or directives;
-- In 2010 and 2011, Capitol sold several of its banking
subsidiaries and has other divestiture transactions pending.
The proceeds from those divestitures have been redeployed at
certain remaining banking subsidiaries which have
experienced a significant erosion of capital due to
operating losses. While such proceeds have been a
significant source of funds for redeployment, the
Corporation will need to raise significant other sources of
new capital in the future;
-- The Corporation and substantially all of its banking
subsidiaries are operating under various regulatory
agreements which place a number of restrictions on them and
impose other requirements limiting activities and requiring
preservation of capital, improvement in regulatory capital
measures, reduction of nonperforming assets and other
matters for which the entities have not achieved full
compliance;
-- Elevated levels of nonperforming loans and other
nonperforming assets as a percentage of consolidated loans
and total assets, respectively; and
-- Significant losses from continuing operations in 2011, 2010,
2009 and 2008, resulting primarily from provisions for loan
losses, costs associated with foreclosed properties and
other real estate owned and, in 2010, an impairment charge
to operations for the write-off of previously-recorded
goodwill ($64.5 million).
The foregoing considerations raise some level of doubt as to the
Corporation's ability to continue as a going concern.
CDEX INC: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------
CDEX Inc. said that to achieve a debt structure that would allow
the Company to continue to develop its leading edge products in
the healthcare markets with the ValiMed G4 medication safety
system and in the security market with its ID2 Meth Scanner and
Pocket ID2 Meth Scanner -- it has retained the law firm of Eric
Slocum Sparks, P.C. to assist in the financial restructuring
through the voluntary filing of a Chapter 11 reorganization in the
United States Bankruptcy Court for the District of Arizona.
During the restructuring, the Company intends to continue
operating as normal, without interruption.
The Company's Board of Directors determined that Chapter 11
reorganization provides the most effective and efficient means to
restructure with minimal impact on the business, and is in the
best interest of the Company, its stakeholders and customers.
"Although the Company has worked closely with its noteholders and
other creditors and constituents over the past year, which led to
the reduction of certain obligations, the Company needs to
complete its comprehensive restructuring due to its current
inability to negotiate restructuring terms with all noteholders,"
said Jeffrey Brumfield, Chairman and Chief Executive Officer of
CDEX.
CDEX intends to file motions with the Court to ensure the
Company's ability to continue its normal operations, including the
ability to continue the development, sale and service of all of
its products. The Company anticipates receiving approval from the
Court within the next several days. "All forms of debt incurred
prior to the commencement of the Company?s Chapter 11 case that
have not been paid is intended to be resolved through the
Company?s Plan of Reorganization," said Mr. Brumfield.
"Throughout this restructuring process, we are committed to
working as quickly and efficiently as possible to appropriately
restructure CDEX so that it can emerge from Chapter 11 as a strong
company, well-positioned to compete effectively in the
marketplace," continued Mr. Brumfield.
Based in Tucson, Arizona, CDEX Inc. (OTCBB: CEXI) --
http://cdex-inc.com-- develops manufactures and distributes
products for the healthcare and security markets.
CHESAPEAKE ENERGY: S&P Assigns 'BB+' Rating to Sr. Unsec. Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Chesapeake Energy Corp.'s proposed $1.3 billion senior unsecured
notes due 2019. "The recovery rating is '3', which indicates our
expectation of meaningful recovery (50% to 70%) in the event of
a default," S&P said.
"Standard & Poor's affirmed the ratings on Chesapeake and revised
the outlook to negative on Feb. 6, 2012. Apart from its proposed
debt issuance, Chesapeake announced planned funding actions in
2012 totaling $10 billion to $12 billion, in part, to fund the
expected shortfall in its operating cash flow compared with
planned capital spending levels," S&P said. While Chesapeake's
announcements underscore the range of financing options available
to the company, S&P believes the negative outlook remains
appropriate, given:
The extent to which credit metrics could be strained by
persisting weak natural gas prices,
The extent to which some of the funding alternatives (including
volumetric production payment transactions and preferred stock
issuance) are considered debt-like under Standard & Poor's
criteria, and
Uncertainty regarding the company's planned spending levels and
uncertainty about Chesapeake's use of proceeds in excess of
those needed to fund near-term investment requirements.
Ratings List
Chesapeake Energy Corp.
Corporate Credit Rating BB+/Negative/--
Rating Assigned
$1.3 bil sr unsecd notes due 2019 BB+
Recovery rating 3
CHINA BAK: Posts $1.8 Million Net Loss in Dec. 31 Quarter
---------------------------------------------------------
China BAK Battery, Inc., reported a net loss of $1.8 million on
$71.8 million of revenues for the three months ended Dec. 31,
2011, compared with a net loss $3.7 million on $63.5 million of
revenues for the three months ended Dec. 31, 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$462.0 million in total assets, $326.5 million in total
liabilities, and stockholders' equity of $135.5 million.
As reported in the TCR on Dec. 20, 2011, PKF, in Hong Kong, China,
expressed substantial doubt about China BAK's ability to continue
as a going concern, following the Company's results for the fiscal
year ended Sept. 30, 2011. The independent auditors noted that
the Company has a working capital deficiency, accumulated deficit
from recurring net losses incurred for the current and prior years
and significant short-term debt obligations maturing in less than
one year as of Sept. 30, 2011.
A copy of the Form 10-Q is available for free at:
http://is.gd/OwmIXd
Shenzhen, P.R.C.-based China BAK Battery, Inc., is a global
manufacturer of lithium-based battery cells. The Company produces
battery cells for OEM customers and replacement battery
manufacturers.
CHINA GINSENG: Posts $421,900 Net Loss in Dec. 31 Quarter
---------------------------------------------------------
China Ginseng Holdings, Inc., filed its quarterly report on Form
10-Q, reporting a net loss of $421,943 on $1.4 million of revenues
for the three months ended Dec. 31, 2011, as compared to a net
loss of $188,916 on $919,877 of revenues for the three months
ended Dec. 31, 2010.
The Company's balance sheet at Dec. 31, 2011, showed $10.1 million
in total assets, $5.7 million in total liabilities, and
stockholders' equity of $4.4 million.
The Company had an accumulated deficit of $3.7 million as of
Dec. 31, 2011.
As reported in the TCR on Oct. 20, 2011, Meyler & Company, LLC, in
Middletown, N.J., expressed substantial doubt about China
Ginseng's ability to continue as a going concern, following the
Company's results for the fiscal year ended June 30, 2011. The
independent auditors noted that the Company has incurred an
accumulated deficit of $2.8 million since inception, and
there are existing uncertain conditions the Company faces relative
to its ability to obtain working capital and operate successfully.
A complete text of the Form 10-Q is available for free at:
http://is.gd/hjZjzz
China Ginseng Holdings, Inc., headquartered in Changchun City,
China, was incorporated on June 24, 2004, in the State of Nevada.
Since its inception in 2004, the Company has been engaged in the
business of farming, processing, distribution and marketing of
fresh ginseng. Starting August 2010, the Company has gradually
shifted its business focus from farming and selling ginseng to
producing and selling ginseng juice and wine with its crops as raw
materials, although it still maintains its farming and selling
ginseng business. Through leases, the Company controls 3,705
acres of land approved by the Chinese government for ginseng
planting and approximately 750 acres of grape vineyards which are
harvested annually.
CIRCUS AND ELDORADO: Terminating Senior Secured Notes Offering
--------------------------------------------------------------
Circus and Eldorado Joint Venture is terminating its previously
announced offering of senior secured notes due 2020 and cash
tender offer for any and all of the Partnership's outstanding
10 1/8% Mortgage Notes due 2012. The Partnership is pursuing
other sources of financing and is in continuing discussions with
its note holders regarding a restructuring of its obligations
under the 2012 Notes. All 2012 Notes tendered to the Partnership
will be promptly returned to the tendering holders.
About Circus and Eldorado
Reno, Nevada-based Circus and Eldorado Joint Venture, doing
business as Silver Legacy Resort Casino, owns and operates the
Silver Legacy Resort Casino, a themed hotel-casino and
entertainment complex in Reno, Nevada. Silver Legacy is a leader
within the Reno market, offering the largest number of table
games, the second largest number of hotel rooms and the third
largest number of slot machines of any property in the Reno
market.
The Company reported a net loss of $4.0 million on $95.6 million
of revenues for nine months ended Sept. 30, 2011, compared with a
net loss of $3.7 million on $95.1 million of revenues for the same
period last year.
The Company's balance sheet at Sept. 30, 2011, showed
$267.8 million in total assets, $165.4 million in total
liabilities, and partners' equity of $102.4 million.
* * *
As reported by the TCR on Jan. 17, 2012, Standard & Poor's Ratings
Services lowered its ratings on Reno-based gaming operator Circus
and Eldorado Joint Venture (CEJV) to 'CCC-' from 'CCC', including
its corporate credit rating and issue-level rating on CEJV's
mortgage notes. "In addition, we placed all ratings on
CreditWatch with negative implications," S&P said.
"With less than two months to maturity, we believe it is becoming
increasingly likely CEJV will restructure its debt obligations.
Based on our cash flow expectations for 2012 and beyond, and
incorporating the likelihood of higher interest costs given the
company's credit profile and current market conditions, we believe
CEJV will be challenged to generate sufficient cash flow to
support fixed charges under a refinanced capital structure. While
cash balances are relatively sizable and may reduce the amount of
debt CEJV would need in a recapitalization, we believe this excess
cash does not mitigate the refinancing risk," S&P said.
CIRCUS AND ELDORADO: Moody's Cuts Corp. Family Rating to 'Ca'
-------------------------------------------------------------
Moody's Investors Service downgraded Circus and Eldorado Joint
Venture's Corporate Family and Probability of Default ratings, and
its senior secured mortgage notes to Ca from Caa3. Moody's also
withdrew the provisional (P)Caa1 rating on Circus and Eldorado's
$120 million second lien notes due 2020 following the company's
announcement that it terminated the proposed 2020 note offering
and tender offer for the existing 10 1/8% notes due 2012. The
rating outlook is negative.
This concludes the review initiated on February 6, 2012.
Ratings downgraded:
Corporate Family Rating to Ca from Caa3
Probability of Default Rating to Ca from Caa3
$143 million senior secured mortgage notes due 2012 to Ca (LGD 4,
67%) from Caa3 (LGD 3, 48%)
Rating withdrawn:
$120 million proposed second lien notes due 2020 at (P)Caa1 (LGD
4, 56%)
RATINGS RATIONALE
The downgrade of Circus and Eldorado's Corporate Family and
Probability of Default ratings to Ca and the negative rating
outlook reflect Moody's view that the company will not be able to
repay its 10 1/8% mortgage notes on the March 1, 2012 maturity
date, particularly given its recent announcement that it has
terminated a proposed debt offering. Proceeds from that offering
were to be used to repay Circus and Eldorado's $143 million
mortage notes prior to maturity.
In an 8-K dated February 13, 2012, Circus and Eldorado announced
that it had terminated its previously announced offering of $120
million senior secured notes due 2020 and cash tender offer for
any and all of its mortgage notes due 2012. In the 8-K filing, the
company also stated that it is continuing to pursue other sources
of financing and a possible restructuring of its obligations under
the 2012 notes. However, if the company were to negotiate a
restructuring prior to the March 1, 2012 maturity, Moody's
believes there would be some impairment to existing note holders.
a situation that Moody's would likely consider a distressed
exchange.
Ratings would be lowered if Circus and Eldorado does not refinance
its mortgage notes prior to the March 1, 2012 maturity, or if the
company pursues a recapitalization that Moody's considers to be a
distressed exchange. Any ratings improvement would require that
the company refinance its existing debt obligations or obtain the
cash resources necessary to ensure its longer-term viability.
The principal methodology used in rating Circus and Eldorado was
the Global Gaming Industry Methodology published in December 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Circus & Eldorado Joint Venture, a 50/50 joint venture between
Eldorado Limited Liability Company and Galleon, Inc., owns and
operates the Silver Legacy Resort Casino in Reno, Nevada. The
company generates annual net revenues of approximately $120
million.
CIRCUS AND ELDORADO: S&P Withdraws 'B-' Rating on $120MM Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its preliminary 'B-'
issue-level and preliminary '3' recovery ratings on Reno-based
gaming operator Circus And Eldorado Joint Venture's (CEJV's)
proposed $120 million senior secured notes offering. The ratings
withdrawal follows the company's announcement that it has
terminated the offering and is pursuing other sources of
financing.
"Our corporate credit rating on the company remains 'CCC-': It was
placed on CreditWatch with developing implications on Jan. 12,
2012. The CreditWatch listing reflects the downside risk, given
near-term refinancing needs, but also reflects the upside
potential should the company execute a successful refinancing.
CEJV has less than one month to maturity on its existing
approximately $143 million mortgage notes," S&P said.
CIT GROUP: Judge Reserves Decision on $190MM Tyco Tax Claim
-----------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that CIT Group Inc. and
Tyco International Ltd. on Tuesday continued to war over whether
Tyco's $190 million tax claim against the reorganized business
lender should be arbitrated, with a New York bankruptcy judge
refusing to rule just yet.
After hearing dueling motions -- CIT's motion for an injunction
pending appeal and former parent Tyco's motion to compel
arbitration -- U.S. Bankruptcy Judge Allan L. Gropper declined to
issue a decision on the matter until he could familiarize himself
more with the issue, according to Law360.
As reported in Troubled Company Reporter on Nov. 9, 2011, Richard
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.
CITIZENS REPUBLIC: Wellington Management Holds 9.9% Equity Stake
----------------------------------------------------------------
Wellington Management Company, LLP, disclosed in an amended
Schedule 13G filing with the U.S. Securities and Exchange
Commission that, as of Dec. 31, 2011, it beneficially owns
3,983,653 shares of common stock of Citizens Republic Bancorp,
Inc., representing 9.90% of the shares outstanding. A full-text
copy of the filing is available for free at http://is.gd/vNsXcI
About Citizens Republic
Flint, Michigan-based Citizens Republic Bancorp, Inc., is a
diversified banking and financial services company that is
registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended. Citizens provides a full range
of banking and financial services to individuals and businesses
through its banking subsidiary, Citizens Bank.
The Company also reported a net loss of $11.57 million on
$308.48 million of total interest income for the nine months ended
Sept. 30, 2011, compared with a net loss of $186.77 million on
$370.42 million of total interest income for the same period a
year ago.
The Company reported net income of $6.66 million on
$407.82 million of total interest income for the 12 months ended
Dec. 31 2011, compared with a net loss of $292.92 million on
$484.44 million of total interest income during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $9.46 billion
in total assets, $8.44 million in total liabilities, and
$1.02 billion in total shareholders' equity.
* * *
As reported by the TCR on Feb. 8, 2012, Fitch Ratings has upgraded
the long-term Issuer Default Rating (IDR) of Citizens Republic
Bancorp, Inc. (CRBC) and its principal bank subsidiaries two
notches to 'B' from 'CCC'. Fitch's rating action follows CRBC's
three quarters of profitability after having reported losses for
the prior 12 quarters. This has been primarily accomplished
through management's accelerated asset resolution program, whereby
it conducted bulk sales, note sales, and workouts of problem
loans.
CITIZENS REPUBLIC: Bay Pond Discloses 6.5% Equity Stake
-------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Bay Pond Partners, L.P., and Wellington Hedge
Management, LLC, disclosed that, as of Dec. 31, 2011, they
beneficially own 2,641,344 shares of common stock of Citizens
Republic Bancorp, Inc., representing 6.56% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/wws9NG
About Citizens Republic
Flint, Michigan-based Citizens Republic Bancorp, Inc., is a
diversified banking and financial services company that is
registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended. Citizens provides a full range
of banking and financial services to individuals and businesses
through its banking subsidiary, Citizens Bank.
The Company also reported a net loss of $11.57 million on
$308.48 million of total interest income for the nine months ended
Sept. 30, 2011, compared with a net loss of $186.77 million on
$370.42 million of total interest income for the same period a
year ago.
The Company reported net income of $6.66 million on
$407.82 million of total interest income for the 12 months ended
Dec. 31 2011, compared with a net loss of $292.92 million on
$484.44 million of total interest income during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $9.46 billion
in total assets, $8.44 million in total liabilities, and
$1.02 billion in total shareholders' equity.
* * *
As reported by the TCR on Feb. 8, 2012, Fitch Ratings has upgraded
the long-term Issuer Default Rating (IDR) of Citizens Republic
Bancorp, Inc. (CRBC) and its principal bank subsidiaries two
notches to 'B' from 'CCC'. Fitch's rating action follows CRBC's
three quarters of profitability after having reported losses for
the prior 12 quarters. This has been primarily accomplished
through management's accelerated asset resolution program, whereby
it conducted bulk sales, note sales, and workouts of problem
loans.
CITIZENS REPUBLIC: Fine Capital Discloses 5.4% Equity Stake
-----------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Fine Capital Partners, L.P., and its affiliates
disclosed that, as of Feb. 14, 2012, they beneficially own
2,179,765 shares of common stock of Citizens Republic Bancorp,
Inc., representing 5.4% of the shares outstanding. As previously
reported by the TCR on Sept. 1, 2011, Fine Capital disclosed
beneficial ownership of 2,170,787 common shares. A full-text copy
of the amended filing is available at http://is.gd/9TBjGI
About Citizens Republic
Flint, Michigan-based Citizens Republic Bancorp, Inc., is a
diversified banking and financial services company that is
registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended. Citizens provides a full range
of banking and financial services to individuals and businesses
through its banking subsidiary, Citizens Bank.
The Company also reported a net loss of $11.57 million on
$308.48 million of total interest income for the nine months ended
Sept. 30, 2011, compared with a net loss of $186.77 million on
$370.42 million of total interest income for the same period a
year ago.
The Company reported net income of $6.66 million on
$407.82 million of total interest income for the 12 months ended
Dec. 31 2011, compared with a net loss of $292.92 million on
$484.44 million of total interest income during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $9.46 billion
in total assets, $8.44 million in total liabilities, and
$1.02 billion in total shareholders' equity.
* * *
As reported by the TCR on Feb. 8, 2012, Fitch Ratings has upgraded
the long-term Issuer Default Rating (IDR) of Citizens Republic
Bancorp, Inc. (CRBC) and its principal bank subsidiaries two
notches to 'B' from 'CCC'. Fitch's rating action follows CRBC's
three quarters of profitability after having reported losses for
the prior 12 quarters. This has been primarily accomplished
through management's accelerated asset resolution program, whereby
it conducted bulk sales, note sales, and workouts of problem
loans.
CLAIRE'S STORES: Selling $400 Million of Senior Secured Notes
-------------------------------------------------------------
Claire's Stores, Inc., announced the sale of $400 million
aggregate principal amount of 9.00% senior secured first lien
notes due 2019. The Notes were priced at par. The Notes will
initially be issued by Claire's Escrow II Corporation, a wholly-
owned first-tier subsidiary of the Company, created solely to
issue the Notes. Settlement is scheduled to occur on Feb. 28,
2012.
The Escrow Issuer will merge with and into the Company upon the
availability of the Company's financial statements for the fiscal
year ended Jan. 28, 2012, demonstrating compliance with certain
existing debt covenants. Upon the merger, the Notes will be
guaranteed by all of the Company's direct or indirect wholly-owned
domestic restricted subsidiaries and secured on a first-priority
basis by substantially all of the assets of the Company and the
guarantors. The security interests will rank equally with those
securing the Company's senior secured credit facility. If the
merger does not occur by April 2, 2012, the Notes will be redeemed
at par plus all accrued but unpaid interest through the date of
redemption.
The Company intends to use the net proceeds of the offering of the
Notes to reduce outstanding indebtedness under the Company's
current credit facility.
The Notes are being offered only to "qualified institutional
buyers" in reliance on Rule 144A under the Securities Act of 1933,
as amended, and outside the United States only to non-U.S. persons
in reliance on Regulation S under the Securities Act. The Notes
have not been and will not be registered under the Securities Act
or any state securities laws and may not be offered or sold in the
United States absent registration or an applicable exemption from
the registration requirements of the Securities Act and applicable
state securities laws.
About Claire's Stores
Claire's Stores, Inc. -- http://www.clairestores.com/-- operates
as a specialty retailer of fashion accessories and jewelry for
preteens and teenagers, as well as for young adults in North
America and internationally. It offers jewelry products that
comprise costume jewelry, earrings, and ear piercing services; and
accessories, including fashion accessories, hair ornaments,
handbags, and novelty items.
Based in Pembroke Pines, Florida, Claire's Stores operates under
two brands: Claire's(R), which operates worldwide and Icing(R),
which operates only in North America. As of Jan. 31, 2009,
Claire's Stores, Inc., operated 2,969 stores in North America and
Europe. Claire's Stores also operates through its subsidiary,
Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint
venture with AEON, Co., Ltd. The Company also franchises 198
stores in the Middle East, Turkey, Russia, South Africa, Poland
and Guatemala.
The Company's balance sheet at Oct. 29, 2011, showed $2.81 billion
in total assets, $2.86 billion in total liabilities, and a $44.61
million stockholders' deficit.
As reported by the Troubled Company Reporter on March 15, 2011,
Moody's upgraded Claire's Stores' senior secured bank credit
facilities to B3 from Caa1 and its Speculative Grade Liquidity
Rating to SGL-2 from SGL-3. All other ratings were affirmed
including Claire's Caa2 Corporate Family Rating. The rating
outlook is positive.
CLEAN BURN: Court Appoints Sara A. Conti as Chapter 11 Trustee
--------------------------------------------------------------
The Hon. W. Waldrep, Jr., of the U.S. Bankruptcy Court for the
Middle District North Carolina Clean Burn Fuels, LLC denied
motions to convert the Chapter 11 case of Clean Burn Fuels LLC to
one under Chapter 7 of the Bankruptcy Code.
The motions to convert were filed by the Bankruptcy Administrator
and Perdue BioEnergy, LLC.
In this relation, the Court approved the appointment of Sara A.
Conti, finding that she is fit and a disinterested person to
serve, as Chapter 11 trustee for the Debtor.
The Court ordered that:
-- within 30 days, the trustee is to file a report as to the
financial condition of the Debtor and the possible
conversion of the case to a case under Chapter 7; and
-- the bond for the trustee is fixed at $200,000, and the
trustee is authorized and directed to obtain a bond within
the time required by the Bankruptcy Code and Bankruptcy
Rules and the requirements of the Bankruptcy Administrator.
About Clean Burn
Founded in 2005, Clean Burn Fuels LLC is the first company to
produce ethanol in North Carolina. It completed the construction
of its ethanol plant in August 2010 and started producing and
selling ethanol and dried distillers grains with solubles (DDGS)
shortly thereafter.
Clean Burn filed for Chapter 11 bankruptcy protection (Bankr.
M.D.N.C. Case No. 11-80562) on April 3, 2011. John A. Northen,
Esq., at Northen Blue, L.L.P., in Chapel Hill, N.C., represents
the Debtor. Anderson Bauman Tourtellot Vos & Co. serves as
financial consultant and chief restructuring officer. Smith,
Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP serves as
special counsel to assist the Debtor in its state court litigation
matters, including various lawsuits pending in Hoke County, North
Carolina. The Debtor disclosed $79,516,062 in assets and
$79,218,681 in liabilities as of the Chapter 11 filing.
Charles M. Ivey, Esq., at Ivey McClellan Gatton, in Greensboro,
N.C., represents the Creditors' Committee as counsel.
Since the petition date, the Debtor has not operated its ethanol
plant.
CLEAN BURN: Ch. 11 Trustee Taps Northen Blue as Special Counsel
---------------------------------------------------------------
Sara A. Conti, Chapter 11 Trustee for Clean Burn Fuels, LLC, asks
the U.S. Bankruptcy Court for the Middle District North Carolina
for permission to employ special counsel for the estate.
The trustee relates that pursuant to a May 17, 2011, order, John
A. Northen and the firm of Northen Blue, L.L.P., were approved as
bankruptcy counsel for the Debtor.
The trustee wishes to employ Northen Blue as special counsel these
purposes:
a. assist the trustee in finalizing and obtaining Plan
confirmation;
b. represent the trustee in litigation pending against Perdue
BioEnergy, LLC and Cape Fear Farm Credit, ACA;
c. investigate and pursue any other litigation as requested by
the trustee, including any Bankruptcy causes of action
arising under Sections 541, 542, 543, 544, 546, 547, 548,
549, 550 or 553 of the Bankruptcy Code;
d. review claims and file objections thereto; and
e. performing other legal services as may be required by the
trustee in the administration of the Debtor's estate.
Mr. Northen assures the Court that neither he nor any members or
associates of the firm hold or represent any interest adverse to
the Debtor's estate, and therefore, are "disinterested persons" as
the term defined in Section 101(14) of the Bankruptcy Code.
About Clean Burn
Founded in 2005, Clean Burn Fuels LLC is the first company to
produce ethanol in North Carolina. It completed the construction
of its ethanol plant in August 2010 and started producing and
selling ethanol and dried distillers grains with solubles (DDGS)
shortly thereafter.
Clean Burn filed for Chapter 11 bankruptcy protection (Bankr.
M.D.N.C. Case No. 11-80562) on April 3, 2011. John A. Northen,
Esq., at Northen Blue, L.L.P., in Chapel Hill, N.C., represents
the Debtor. Anderson Bauman Tourtellot Vos & Co. serves as
financial consultant and chief restructuring officer. Smith,
Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP serves as
special counsel to assist the Debtor in its state court litigation
matters, including various lawsuits pending in Hoke County, North
Carolina. The Debtor disclosed $79,516,062 in assets and
$79,218,681 in liabilities as of the Chapter 11 filing.
Charles M. Ivey, Esq., at Ivey McClellan Gatton, in Greensboro,
N.C., represents the Creditors' Committee as counsel.
Since the petition date, the Debtor has not operated its ethanol
plant.
CLEARWIRE CORP: FMR LLC Discloses 15.1% Equity Stake
----------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission on Feb. 13, 2012, FMR LLC and Edward C.
Johnson 3d disclosed that they beneficially own 71,365,577 shares
of common stock of Clearwire Corp representing 15.152% of the
shares outstanding. A full-text copy of the filing is available
for free at http://is.gd/L69CCA
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: Chesapeake Holds 4.2% of Class A Shares
-------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Chesapeake Partners Management Co., Inc., and
its affiliates disclosed that, as of Dec. 31, 2011, they
beneficially own 19,502,071 shares of Class A common stock of
Clearwire Corporation representing 4.2% of the shares outstanding.
As previously reported by the TCR on Dec. 9, 2011, Chesapeake
Partners disclosed beneficial ownership of 13,840,269 Class A
shares. A full-text copy of the amended filing is available for
free at http://is.gd/xcY2PK
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: Glenview Ceases to Hold 5% of Class A Shares
------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Glenview Capital Management, LLC, and
Lawrence M. Robbins disclosed that, as of Dec. 31, 2011, they
beneficially own 17,459,027 shares of Class A common stock of
Clearwire Corporation representing 3.86% of the shares
outstanding. As previously reported by the TCR on Aug. 12, 2011,
Glenview Capital disclosed beneficial ownership of 16,228,264
Class A shares. A full-text copy of the amended filing is
available for free at http://is.gd/tuMuls
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: Highside Capital Holds 4.9% of Class A Shares
-------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Highside Capital Management, L.P., and its
affiliates disclosed that, as of Dec. 31, 2011, they beneficially
own 22,396,000 shares of Class A common stock of Clearwire
Corporation representing 4.9% of the shares outstanding. As
previously reported by the TCR on Oct. 20, 2011, Highside
disclosed beneficial ownership of 16,174,400 Class A shares. A
full-text copy of the amended filing is available for free at:
http://is.gd/MSGqLX
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: Moody's Says FCC Satellite Rejection Credit Positive
---------------------------------------------------------------
The Federal Communications Commission (FCC) said it planned to
reject LightSquared's bid to use satellite spectrum for building a
national terrestrial wireless network. An Obama administration
adviser found that the service disrupts navigation gear used by
planes, boats, and automobiles. Moody's views the ruling as a
positive for the credit profile of Clearwire and a long-term
negative for Sprint Nextel's credit profile.
The FCC's ruling eliminates another potentially viable wholesale
competitor for Clearwire (Caa2 stable) and provides the company
increased pricing power over its wireless services. LightSquared
had agreements with more than 30 wholesale customers to use its
planned 4G LTE wireless network, including the third-largest U.S.
wireless carrier Sprint Nextel and U.S. electronics retailer Best
Buy. FreedomPop, a former LightSquared customer, announced it will
use Clearwire's network. Moody's believes it is increasingly
likely that additional wholesale customers will form agreements
with Clearwire to use its wireless network now that LightSquared
is out of the picture. The action also reinforces the value of
Clearwire's extensive spectrum holdings, and the spectrum holdings
of other players (i.e. DISH and broadcast television station
owners), given the near term scarcity of available spectrum for
wireless carriers to broaden their wireless high speed data
services.
Because Lightsquared's business plan incorporated significant
financial, technical and operational challenges in addition to the
spectrum use hurdles, Moody's believes that LightSquared's
rejection is not an immediate threat to the credit profile of
Sprint Nextel (B1 under review for downgrade). However, the
elimination of Lightsquared as an option and counterweight to
Clearwire will impact Sprint in the long-term. Sprint was one of
LightSquared's primary partners and had agreed to build and
operate LightSquared's network in exchange for $9 billion in
payments and an additional $4.5 billion in service credits. Now
that the agreement is likely to fall through, Moody's anticipates
that Sprint will eventually have to pay a higher price to utilize
wholesale capacity on Clearwire's network because of Clearwire's
increased pricing power, and lack of viable alternatives for
Sprint to fully deploy its 4G services in the near term. The
ruling will also cement a closer relationship with Sprint and
Clearwire because of Sprint's relatively shallow spectrum holdings
in comparison to the spectrum holdings of AT&T Mobility and
Verizon Wireless. Finally, any takeout of Clearwire by Sprint will
be more expensive given the reduced alternatives for acquiring
much needed additional spectrum.
The principal methodology used in rating Sprint Nextel and
Clearwire was the Global Telecommunications Industry Methodology,
published December 2010. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009 (and/or the Government-Related Issuers
methodology, published July 2010.
CONNAUGHT GROUP: Workers Files Suit Over WARN Act Violation
-----------------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that a class of
former employees of The Connaught Group Ltd. launched a suit
Tuesday saying the company violated the Worker Adjustment and
Retraining Notification Act by not telling the workers of pending
layoffs before filing for Chapter 11.
The workers say they faced mass layoffs Jan. 30, just more than a
week before the company filed for bankruptcy, without receiving
the 60 days' advance written notice of their terminations as
required by the federal WARN Act or the 90 days' notice required,
according to Law360.
About Connaught Group
New York-based The Connaught Group Ltd., doing business as The
Carlisle Collection, Inc., claims to be the largest direct seller
of high-end women's apparel in the U.S. The current 10 stores,
located in the U.S., operate under the names Limited Editions for
Her and Eccoci. The Company maintains an experienced network of
1,300 independent sales consultants that provide wardrobe
consultations and highly personalized service to business
executives, diplomats, TV personalities and other busy
professional and social women.
Connaught sought bankruptcy protection (Bankr. S.D.N.Y.
Case No. 12-10512) on Feb. 9, 2012. Judge Stuart M. Bernstein
presides over the case. David L. Barrack, Esq., at Fulbright &
Jaworski LLP serves as counsel for the Debtor. Kurtzman Carson
Consultants LLC is the claims and notice agent.
In its petition, Connaught estimated $10 million to $50 million in
assets and $50 million to $100 million in debts. The petition was
signed by William D. Rondina, chief executive officer.
CONVERSION SERVICES: Messrs. Reisman & Walton Resign from Board
---------------------------------------------------------------
Larry Reisman resigned as a member of Conversion Services
International, Inc., board of directors on Jan. 27, 2012.
Mr. Reisman's resignation was not the result of a disagreement
with the Company.
On Jan. 28, 2012, Mr. Brian Walton resigned as a member of the
Company's board of directors. Mr. Walton's resignation was not
the result of a disagreement with the Company.
About Conversion Services Int'l
Conversion Services International, Inc., and its wholly owned
subsidiaries are principally engaged in the information technology
services industry in these areas: strategic consulting, business
intelligence/data warehousing and data management to its customers
principally located in the northeastern United States.
CSI was formerly known as LCS Group, Inc. In January 2004, CSI
merged with and into a wholly owned subsidiary of LCS. In
connection with this transaction, among other things, LCS changed
its name to "Conversion Services International, Inc."
Friedman LLP expressed substantial doubt about the Company's
ability to continue as a going concern after auditing the
Company's financial reports for 2009 and 2010. The accounting
firm noted that the Company has incurred recurring operating
losses, negative cash flows, is not in compliance with a covenant
associated with its Line of Credit, maturing on March 31, 2011 and
has significant future cash flow commitments.
The Company reported a net loss of $733,505 on $11.31 million
of revenue for the nine months ended Sept. 30, 2011, compared with
a net loss of $796,124 on $13.41 million of revenue for the same
period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$3.15 million in total assets, $6.96 million in total liabilities,
and a $3.81 million total stockholders' deficit.
CROWN RANCH: Resumes Construction Projects
------------------------------------------
Catherine Dominguez at Your Houston News reports that Crown Ranch
Development is looking to start construction on the amenities
planned for Crown Ranch, located off FM 1486 near Magnolia, Texas.
"We are full-steam ahead here at Crown Ranch," said Michael
Weingrad, Crown Ranch developer. "We have had great activity and
we are optimistic about the future."
Based in Houston, Texas, Crown Ranch Development Ltd. dba Crown
Ranch filed for Chapter 11 bankruptcy protection on Feb. 21, 2011
(Bankr. E.D. Tex. Case No. 11-90052). Michael Durrschmidt, Esq.,
at Hirsch & Westhelmer, P.C., represents the Debtor. The Debtor
disclosed assets of $471,610, and debts of $21,532,517.
CUMULUS MEDIA: Dimensional Fund Holds 1.6% of Class A Shares
------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Dimensional Fund Advisors LP disclosed that,
as of Dec. 31, 2011, it beneficially owns 2,129,758 shares of
Class A common stock of Cumulus Media Inc. representing 1.66% of
the shares outstanding. As previously reported by the TCR on Feb.
22, 2011, Dimensional disclosed beneficial ownership of 2,751,298
shares of Class A common stock. A full-text copy of the amended
filing is available for free at http://is.gd/Jq8cyr
About Cumulus Media
Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) --
http://www.cumulus.com/-- is the second largest radio broadcaster
in the United States based on station count, controlling 350 radio
stations in 68 U.S. media markets. In combination with its
affiliate, Cumulus Media Partners, LLC, the Company believes it is
the fourth largest radio broadcast company in the United States
when based on net revenues.
The Company's balance sheet at Sept. 30, 2011, showed
$4.07 billion in total assets, $3.65 billion in total liabilities,
$110.93 million in total redeemable preferred stock, and
$306.39 million in total stockholders' equity.
Cumulus Media put AR Broadcasting Holdings Inc. and three other
units to Chapter 11 protection (Bankr. D. Del. Lead Case No.
11-13674) after struggling to pay off debts that topped
$97 million as of June 30, 2011. Holdings estimated debts between
$50 million and $100 million but said assets are worth less than
$50 million. AR Broadcasting are Missouri and Texas radio
stations.
* * *
Standard & Poor's Ratings Services said April it raised its
corporate credit rating on Atlanta-based Cumulus Media Inc. to 'B'
from 'B-'. "The rating remains on CreditWatch, where we placed it
with positive implications Feb. 18, 2011," S&P stated.
Moody's Investors Service in April upgraded Cumulus Media's
Corporate Family Rating to 'B1' from 'Caa1' due to the company's
pending acquisition of CMP Susquehanna Corp. in the second quarter
of 2011 followed by the announced $2.4 billion acquisition of
Citadel Broadcasting Corporation later this year.
CUMULUS MEDIA: Canyon Capital Discloses 6.9% Equity Stake
---------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Canyon Capital Advisors LLC and its affiliates
disclosed that, as of Dec. 31, 2011, they beneficially own
8,894,635 shares of common stock of Cumulus Media Inc.
representing 6.92% of the shares outstanding. A full-text copy of
the filing is available for free at http://is.gd/S37BWL
About Cumulus Media
Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) --
http://www.cumulus.com/-- is the second largest radio broadcaster
in the United States based on station count, controlling 350 radio
stations in 68 U.S. media markets. In combination with its
affiliate, Cumulus Media Partners, LLC, the Company believes it is
the fourth largest radio broadcast company in the United States
when based on net revenues.
The Company's balance sheet at Sept. 30, 2011, showed
$4.07 billion in total assets, $3.65 billion in total liabilities,
$110.93 million in total redeemable preferred stock, and
$306.39 million in total stockholders' equity.
Cumulus Media put AR Broadcasting Holdings Inc. and three other
units to Chapter 11 protection (Bankr. D. Del. Lead Case No.
11-13674) after struggling to pay off debts that topped
$97 million as of June 30, 2011. Holdings estimated debts between
$50 million and $100 million but said assets are worth less than
$50 million. AR Broadcasting are Missouri and Texas radio
stations.
* * *
Standard & Poor's Ratings Services said April it raised its
corporate credit rating on Atlanta-based Cumulus Media Inc. to 'B'
from 'B-'. "The rating remains on CreditWatch, where we placed it
with positive implications Feb. 18, 2011," S&P stated.
Moody's Investors Service in April upgraded Cumulus Media's
Corporate Family Rating to 'B1' from 'Caa1' due to the company's
pending acquisition of CMP Susquehanna Corp. in the second quarter
of 2011 followed by the announced $2.4 billion acquisition of
Citadel Broadcasting Corporation later this year.
DRINKS AMERICAS: John Kleinert Discloses 6.2% Equity Stake
----------------------------------------------------------
John C Kleinert disclosed in a Schedule 13G filing with the U.S.
Securities and Exchange Commission that, as of Jan. 19, 2012, he
beneficially owns 1,291,992 shares of common stock of Drinks
Americas Holdings, Ltd., representing 6.2% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/tNYfJf
About Drinks Americas
Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. --
http://www.drinksamericas.com/-- through its majority-owned
subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T.
Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and
markets unique premium wine and spirits and alcoholic beverages
associated with icon entertainers, celebrities and destinations,
to beverage wholesalers throughout the United States.
The Company reported a net loss of $4.58 million on $497,453 of
net sales for the year ended April 30, 2011, compared with a net
loss of $5.61 million on $890,380 of net sales during the prior
year.
Bernstein & Pinchuk, in New York, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company has incurred
significant losses from operations since its inception and has a
working capital deficiency.
The Company's balance sheet at Oct. 31, 2011, showed $2.52 million
in total assets, $5.35 million in total liabilities, and a
$2.83 million total stockholders' deficiency.
EAST HARLEM: Plan Contemplates Membership Interests Sale for $4MM
-----------------------------------------------------------------
East Harlem Property Holdings, LP, submitted to the U.S.
Bankruptcy Court for the Southern District of New York a plan of
reorganization and disclosure statement dated Feb. 10, 2012.
The Plan contemplates the sale, assignment, and transfer of the
Debtor's right title and interest in its "membership interests" in
27 special purpose entities to SG2-E&M Harlem Portfolio Owner LLC
in exchange for $4 million. The special purpose entities own in
the aggregate 1,200 residential units and 50 commercial units
located within 46 buildings a New York area known as East Harlem.
Distributions to allowed claims and interests under the Plan will
be funded from the sale of the Membership Interests.
With respect to its Class 1 Secured Claim estimated for
$27,561,855, C-III Acquisitions LLC has agreed to release any
liens and claims in and to the Membership Interests and exchange
general releases with the Debtor. Class 2 Priority Claims and
Class 3 Unsecured Claims, estimated at $229,447, will be paid in
full on or within 15 days of the Effective Date. Class 4 Partner
Interests will be paid any funds remaining in the Confirmation
Account after the payment of Allowed Claims.
Allowed Administrative Claims, estimated at $150,000, and Allowed
Priority Tax Claims, estimated at $16,696, will also be paid in
full.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/EASTHARLEM_DSFeb10.PDF
About East Harlem
East Harlem Property Holdings, LP, is a limited partnership formed
in Delaware on March 13, 2007. The Debtor owns 100% of the
limited liability company membership interests in 27 special
purpose entities, which own, in the aggregate, approximately
1,200 residential units and 50 commercial units located within 47
buildings located in New York, New York. The Real Properties are
primarily located in an area bounded by 100th Street to the south,
188th Street to the north, Pleasant Avenue to the east and Park
Avenue to the west.
The Debtor filed for Chapter 11 relief (Bankr. S.D.N.Y. Case No.
11-14368) on Sept. 15, 2011. Judge James M. Peck presides over
the bankruptcy case. Joseph S. Maniscalco, Esq., and Jordan
Pilevsky, Esq., at Lamonica Herbst & Maniscalco, LLP, in Wantagh,
New York, represents the Debtor as counsel. In its schedules, the
Debtor disclosed assets of $230,000,000 and liabilities of
$27,807,999. The petition was signed by Linda Greenfield, vice
president of Harlem Housing, LLC, sole and managing member of East
Harlem GP, LLC, general partner.
EASTMAN KODAK: Receives Court Nod of $950-Mil. DIP Financing
------------------------------------------------------------
Eastman Kodak Company disclosed that Judge Allan L. Gropper of the
U.S. Bankruptcy Court for the Southern District of New York
entered a final order approving the Company's debtor-in-possession
financing for $950 million between Kodak and its lenders and
second-lien bondholders.
Antonio M. Perez, Chairman and Chief Executive Officer, stated:
"Today's agreement is another step towards ensuring that Kodak is
positioned to execute on the goals the Company set out last month:
Bolster our liquidity in the U.S. and abroad, monetize our non-
strategic intellectual property, fairly resolve legacy
liabilities, and enable Kodak to focus on its most valuable
business lines."
Kodak and its U.S. subsidiaries filed to reorganize its U.S.
business under Chapter 11 on Jan. 19. Non-U.S. subsidiaries were
not part of the filing. The $950 million includes the initial
$650 million approved as part of the First Day Motions, as well an
additional $300 million in incremental availability.
The Company and its Board of Directors are being advised by
Lazard, AlixPartners LLP, and Sullivan & Cromwell LLP.
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).
EATON MOERY: Wants to Renew Loan to Continue Waste Disposal Biz
---------------------------------------------------------------
Eaton Moery Environmental Services, Inc., asks the U.S. Bankruptcy
Court for the Eastern District of Arkansas for authorization to
renew a secured debt to First National Bank of Wynne.
The Debtor relates that the bank has requested a Court order
authorizing Debtor to renew the note.
The Debtor's outstanding secured indebtedness to First National
Bank of Wynne is approximately $225,000. The debt is represented
by a promissory note in the name of the Debtor and is secured by a
Certificate of Deposit in the approximate sum of $100,000 owned by
Debtor and bank stock owned by C.B. Moery, Jr., a principal of the
Debtor.
The note relates to a bonding requirement in favor of the State of
Arkansas which is required to be in place for the Debtor to
continue conducting its waste disposal business.
About Eaton Moery Environmental Services
Wynne, Arkansas-based Eaton Moery Environmental Services, Inc.,
dba Delta Environmental Services, Inc., filed for Chapter 11
bankruptcy protection (Bankr. E.D. Ark. Case No. 10-14713) on
June 30, 2010. James F. Dowden, P.A., serves as the Debtor's
bankruptcy counsel. The Company estimated assets at $10 million
to $50 million and liabilities at $1 million to $10 million.
No trustee, examiner, or committee has been appointed in the
Debtor's Chapter 11 cases
EDDIE BAUER: Chamberlain Becomes Interim CEO, Fiske Leaves Company
------------------------------------------------------------------
Katherine Field Boccaccio at Chain Store Age, citing a report from
The Seattle Times, says David Chamberlain, executive chairman of
Eddie Bauer, will serve as the company's interim CEO until a
permanent replacement for chief Neil Fiske is named. Mr. Fiske
will remain with the company as a consultant to ensure a smooth
transition.
According to the report, Mr. Fiske will leave his post effective
March 2, 2012.
The report says the company has not given a reason for Mr. Fiske's
sudden departure.
About Eddie Bauer
Eddie Bauer -- http://www.eddiebauer.com/-- is a specialty
retailer that sells outerwear, apparel and accessories for the
active outdoor lifestyle. Eddie Bauer participates in a joint
venture in Japan and has licensing agreements across a variety of
product categories.
Eddie Bauer, founded in Bellevue, Wash., in 1920, was acquired by
General Mills Inc. in 1971 and then sold to catalog retailer
Spiegel Inc. in 1988. Eddie Bauer Inc. emerged from Spiegel's
2003 Chapter 11 case as a separate, reorganized entity under the
control and ownership of Eddie Bauer Holdings, Inc.
Eddie Bauer Holdings, Inc. (now known as EBHI Holdings, Inc.) and
eight affiliates filed for bankruptcy (Bankr. D. Del. Lead Case
No. 09-12099) on June 17, 2009. Judge Mary F. Walrath presides
over the case. David S. Heller, Esq., Josef S. Athanas, Esq., and
Heather L. Fowler, Esq., at Latham & Watkins LLP, serve as the
Debtors' general counsel. Kara Hammond Coyle, Esq., and Michael
R. Nestor, Esq., at Young Conaway Stargatt & Taylor LLP, serve as
local counsel. The Debtors' restructuring advisors are Alvarez
and Marsal North America LLC. Their financial advisors are Peter
J. Solomon Company. Kurtzman Carson Consultants LLC acts as
claims and notice agent. As of April 4, 2009, Eddie Bauer had
$525,224,000 in total assets and $448,907,000 in total
liabilities.
Eddie Bauer Canada, Inc., and Eddie Bauer Customer Services filed
for protection from their creditors in Canada on June 17, 2009,
the same day the U.S. Debtors filed for creditor protection. The
Canadian Debtors have obtained an initial order of the Canadian
Court staying the proceedings against the Canadian Debtors and
their property in Canada. RSM Richter Inc. was appointed as
monitor in the Canadian proceedings.
On Aug. 4, 2009, Golden Gate Capital closed a deal to acquire
Eddie Bauer Holdings for $286 million. Golden Gate will maintain
the substantial majority of Eddie Bauer's stores and employees in
a newly formed going concern company. Golden Gate beat an
affiliate of CCMP Capital Advisors, LLC, at the auction. The CCMP
unit's $202 million cash offer served as stalking horse bid.
Golden Gate Capital -- http://www.goldengatecap.com/-- is a San
Francisco-based private equity investment firm with roughly
$9 billion of assets under management.
ELIZABETH ARDEN: Moody's Affirms 'Ba3' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service upgraded Elizabeth Arden Inc.'s ("RDEN")
Speculative Grade Liquidity rating to SGL-2 from SGL-3. Moody's
also affirmed the company's existing Ba3 Corporate Family and
Probability of Default ratings. The rating outlook remains stable.
Ratings upgraded include the following:
- Speculative Grade Liquidity rating to SGL-2 from SGL-3
Ratings affirmed include the following (with point estimate
revised):
- Corporate Family Rating at Ba3;
- Probability of Default rating at Ba3; and
- $250 million senior unsecured notes due March 2021 at B1 (LGD 5,
73%) from B2 (LGD 5, 70%)
The outlook is stable
RATINGS RATIONALE
"RDEN's improved liquidity profile reflects its strong operating
performance, healthy cash balances, full access to a committed
asset-based revolving credit facility, and lack of near-term
maturities until March 2021," says Moody's Senior Vice President
Janice Hofferber. "Over the next twelve months, Moody's expects
RDEN to sustain its strong organic sales growth in a range of 4-5%
while continuing to improve operating profit margins and generate
free cash flow," adds Ms. Hofferber.
RDEN's Ba3 Corporate Family Rating is supported by its improving
profitability and modest leverage profile, critical mass of brands
and customers as well as its success in revitalizing classic
brands and introducing new celebrity and designer brands. RDEN's
ratings are constrained by its heavy reliance on fragrances and
relatively small scale, especially given the highly competitive
and fragmented nature of the industry.
RDEN's ratings continue to reflect industry risks, including
pressures from large and financially strong competitors, the need
to continually reinvest in its brands and launch successful new
products, sensitivity to economic downturns and a high degree of
seasonality. RDEN's focus on classic brands and success in
diversifying its geographic and retail channels of distribution
position the company well as the economy gradually rebounds. Also,
the company's ratings will continue to be supported by
management's focus on reducing costs, measured strategy of
acquisitions and licensing. Finally, the company's good liquidity
profile reflects the company's healthy cash balances (albeit
primarily held offshore), full access to a $300 million asset
based revolving credit facility and lack of near-term debt
maturities.
The stable outlook for RDEN reflects Moody's view that the
company's portfolio of long-lived classic brands and newer
celebrity brands will continue to be supported by appropriate
levels of product investment and continue to generate acceptable
levels of profitability and free cash flow.
RDEN's ratings could be upgraded if credit metrics improve such
that EBITA margins are sustained above 10%. In addition, the
company will need to demonstrate that its free cash flow-to-net
debt can be sustained above 10% while maintaining a debt-to-EBITDA
ratio less than 2.5 times (excluding seasonal borrowings). An
upgrade would also require a continued commitment to moderate
financial policies regarding acquisitions and share repurchases.
RDEN's ratings could be downgraded if critical yearly holiday
season sales do not meet expectations and financial metrics
deteriorate such that debt-to-EBITDA (excluding seasonal
borrowings) was sustained above 4.5 times. A large, debt-financed
share repurchase or acquisition could also result in a ratings
downgrade.
The principal methodology used in rating Elizabeth Arden, Inc. was
the 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. Please see the Credit Policy page on
www.moodys.com for a copy these methodologies.
Elizabeth Arden is a global prestige beauty products company with
an extensive portfolio of prestige beauty brands sold in over 100
countries. The company's brand portfolio includes Elizabeth Arden
skincare, color and fragrance products, Prevage anti-aging
formulas, the celebrity fragrance brands of Britney Spears,
Elizabeth Taylor, Mariah Carey, Taylor Swift, and Usher; the
designer fragrance brands of Juicy Couture, Alberta Ferretti,
Alfred Sung, Bob Mackie, Geoffrey Beene, Halston, John Varvatos,
Kate Spade, Lucky Brand, and Rocawear; and the lifestyle fragrance
brands Curve, Giorgio Beverly Hills, and PS Fine Cologne. Sales
during the twelve month period ended December 31, 2011 were
approximately $1.2 billion.
ENDEAVOR INT'L: Moody's Assigns 'Caa1' Rating to $350-Mil. Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Endeavour
International Corporation's (Endeavour) $350 million First
Priority Notes due 2018 and a Caa2 rating to its $150 million
Second Priority Notes due 2018. The Caa1 rating on the company's
initially proposed $500 million senior notes due 2020 has been
withdrawn.
RATINGS RATIONALE
The Caa1 rating on the First Priority Notes and the Caa2 rating on
the Second Priority Notes reflects both the overall probability of
default of Endeavour, to which Moody's assigns a PDR of Caa1, and
loss given defaults of LGD 3 (43%) on the First Priority Notes and
LGD 5 (72%) on the Second Priority Notes. The First Priority and
Second Priority Notes have liens on 65% of the capital stock of
Endeavour's primary foreign subsidiaries and an unsecured
intercompany loan payable by the primary foreign subsidiary and
all future foreign intercompany loans. Therefore the First and
Second Priority Notes have a superior claim to foreign subsidiary
assets over Endeavour's other senior unsecured convertible and
subordinated notes that only have subsidiary guarantees from the
domestic subsidiaries.
The substantial majority of Endeavour's oil and gas reserves are
owned by its foreign subsidiaries. While the First Priority and
Second Priority Notes benefit from a structurally superior
position relative to Endeavour's other unsecured debts, Moody's
has incorporated the company's planned $100 million secured
revolving credit facility and its priority senior secured claim to
the foreign assets in applying Moody's Loss Given Default
Methodology. Given the complexity of Endeavour's capital
structure, Moody's has decided to rate the First Priority Notes
the same as the company's Caa1 Corporate Family Rating (CFR),
reflecting the potential priority claim of the senior secured
revolver offset by the more junior claims of the other debt
instruments. The Second Priority Notes have been rated Caa2 based
on their second lien position to the First Priority Notes.
The principal methodology used in rating Endeavour International
Corporation was the Global Independent Exploration and Production
Industry Methodology published in December 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Endeavour International Corporation is a publicly trade
independent exploration and production company headquartered in
Houston, Texas.
EPICEPT CORP: Forsakringsaktiebolaget Holds 11.8% Equity Stake
--------------------------------------------------------------
Forsakringsaktiebolaget Avanza Pension disclosed in a Schedule 13G
filing with the U.S. Securities and Exchange Commission that, as
of Dec. 31, 2011, it beneficially owns 8,382,956 shares of common
stock of Epicept Corporation representing 11.8% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/wAV1Pd
About EpiCept Corporation
Tarrytown, N.Y.-based EpiCept Corporation (Nasdaq and Nasdaq OMX
Stockholm Exchange: EPCT) -- http://www.epicept.com/-- is focused
on the development and commercialization of pharmaceutical
products for the treatment of cancer and pain. The Company's lead
product is Ceplene(R), approved in the European Union for the
remission maintenance and prevention of relapse in adult patients
with Acute Myeloid Leukemia (AML) in first remission. In the
United States, a pivotal trial is scheduled to commence in 2011.
The Company has two other oncology drug candidates currently in
clinical development that were discovered using in-house
technology and have been shown to act as vascular disruption
agents in a variety of solid tumors. The Company's pain portfolio
includes EpiCept(TM) NP-1, a prescription topical analgesic cream
in late-stage clinical development designed to provide effective
long-term relief of pain associated with peripheral neuropathies.
The Company's recurring losses from operations and the Company's
stockholders' deficit raise substantial doubt about its ability to
continue as a going concern and, as a result, the Company's
independent registered public accounting firm, Deloitte & Touche
LLP, in Parsippany, New Jersey, included an explanatory paragraph
in its report on the Company's consolidated financial statements
for the year ended Dec. 31, 2010, which was included in our Annual
Report on Form 10-K, with respect to this uncertainty.
The Company also reported a net loss of $12.20 million on $737,000
of total revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $12.56 million on $703,000 of total
revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $12.19
million in total assets, $26.44 million in total liabilities and a
$14.25 million total stockholders' deficit.
EVERGREEN SOLAR: GLG Partners Owns 1.72% of Common Stock
--------------------------------------------------------
GLG Partners LP and GLG Partners Limited disclose that as of
Dec. 31, 2011, they may be deemed to beneficially own $500,000
aggregate principal amount of Evergreen Solar, Inc.'s 4.0%
Convertible Subordinated Additional Cash Notes due 2020
convertible into 114,943 Shares, and $6,420,729 aggregate
principal amount of 13.0% Convertible Senior Secured Notes due
2015 convertible into 562,077 Shares. The aggregate amount
beneficially owned by each Reporting Person represents 1.72% of
the Issuer's Common Stock, $0.1 par value.
GLG Partners Limited is the general partner of GLG Partners LP.
About Evergreen Solar
Evergreen Solar, Inc. -- http://www.evergreensolar.com/--
developed, manufactured and marketed String Ribbon solar power
products using its proprietary, low-cost silicon wafer technology.
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.
Evergreen sold the assets piecemeal in three auctions. Max Era
Properties Ltd. from Hong Kong paid $6 million cash and $3.2
million in stock of China Private Equity Investment Holdings
Ltd. for the company name, intellectual property, and wafermaking
assets. Kimball Holdings LLC paid $3.8 million for solar panel
inventory while the secured lenders exchanged $21.5 million of
their $165 million claim for a $171 million claim against Lehman
Brothers Holdings Inc. Max Era Properties Limited and Sovello AG
bought equipment and machinery located at the Debtor's Devens,
Massachusetts facility for $8.9 million.
FIRST SECURITY: ClearBridge Discloses 3.6% Equity Stake
-------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, ClearBridge Advisors, LLC, disclosed that, as
of Dec. 31, 2011, it beneficially owns 59,757 shares of common
stock of First Security Group Inc representing 3.62% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/H8JJbs
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
On Sept. 7, 2010, the Company entered into a Written Agreement
with the Federal Reserve Bank of Atlanta, the Company's primary
regulator, which prohibits the Company from declaring or paying
dividends without prior written consent of the Federal Reserve.
The Company is also prohibited from taking dividends, or any other
form of payment representing a reduction of capital, from the Bank
without prior written consent.
The Company is also required, within 60 days of the Agreement, to
submit to the Federal Reserve a written plan designed to maintain
sufficient capital at the Company and the Bank.
On April 28, 2010, FSGBank, the Company's wholly-owned subsidiary,
consented and agreed to the issuance of a Consent Order by the
Office of the Comptroller of the Currency (OCC). Pursuant to that
Consent Order, within 120 days of the effective date of the Order,
the Bank is required to achieve and thereafter maintain total
capital at least equal to 13% of risk-weighted assets and
Tier 1 capital at least equal to 9% of adjusted total
assets.
As of Sept. 30, 2010, the first financial reporting period
subsequent to the 120 day requirement, the Bank's total capital to
risk-weighted assets was 12.93% and the Tier 1 capital to
adjusted total assets was 7.43%. The Bank has notified the
OCC of the non-compliance.
Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred losses from operations for the past two
years. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
According to the Company, its ability to continue as a going
concern is contingent upon its ability to devise and successfully
execute a management plan to develop profitable operations,
satisfy the requirements of the regulatory actions, and lower the
level of problem assets to an acceptable level.
The Company reported a net loss of $44.34 million on
$54.91 million of total interest income for the year ended
Dec. 31, 2010, compared with a net loss of $33.45 million on
$64.00 million of total interest income during the prior year.
The Company also reported a net loss of $14.53 million on
$32.85 million of total interest income for the nine months ended
Sept. 30, 2011, compared with a net loss of $33.01 million on
$42.53 million of total interest income for the same period during
the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$1.12 billion in total assets, $1.04 billion in total liabilities,
and $78.04 million in total stockholders' equity.
FIRST SECURITY: FSGBank Discloses 5.9% Equity Stake
---------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, First Security Group, Inc. 401(k) and
Employee Stock Ownership Plan and FSGBank, National Association
disclosed that, as of Dec. 31, 2011, they beneficially own
99,363 shares of common stock of First Security Group, Inc.,
representing 5.90% of the shares outstanding. A full-text copy of
the filing is available at http://is.gd/mMpuoT
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
On Sept. 7, 2010, the Company entered into a Written Agreement
with the Federal Reserve Bank of Atlanta, the Company's primary
regulator, which prohibits the Company from declaring or paying
dividends without prior written consent of the Federal Reserve.
The Company is also prohibited from taking dividends, or any other
form of payment representing a reduction of capital, from the Bank
without prior written consent.
The Company is also required, within 60 days of the Agreement, to
submit to the Federal Reserve a written plan designed to maintain
sufficient capital at the Company and the Bank.
On April 28, 2010, FSGBank, the Company's wholly-owned subsidiary,
consented and agreed to the issuance of a Consent Order by the
Office of the Comptroller of the Currency (OCC). Pursuant to that
Consent Order, within 120 days of the effective date of the Order,
the Bank is required to achieve and thereafter maintain total
capital at least equal to 13% of risk-weighted assets and
Tier 1 capital at least equal to 9% of adjusted total
assets.
As of Sept. 30, 2010, the first financial reporting period
subsequent to the 120 day requirement, the Bank's total capital to
risk-weighted assets was 12.93% and the Tier 1 capital to
adjusted total assets was 7.43%. The Bank has notified the
OCC of the non-compliance.
Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred losses from operations for the past two
years. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
According to the Company, its ability to continue as a going
concern is contingent upon its ability to devise and successfully
execute a management plan to develop profitable operations,
satisfy the requirements of the regulatory actions, and lower the
level of problem assets to an acceptable level.
The Company reported a net loss of $44.34 million on
$54.91 million of total interest income for the year ended
Dec. 31, 2010, compared with a net loss of $33.45 million on
$64.00 million of total interest income during the prior year.
The Company also reported a net loss of $14.53 million on
$32.85 million of total interest income for the nine months ended
Sept. 30, 2011, compared with a net loss of $33.01 million on
$42.53 million of total interest income for the same period during
the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$1.12 billion in total assets, $1.04 billion in total liabilities,
and $78.04 million in total stockholders' equity.
FIRST SECURITY: Wellington Management Holds 7.7% Equity Stake
-------------------------------------------------------------
Wellington Management Company, LLP, disclosed in a Schedule 13G
filing with the U.S. Securities and Exchange Commission that, as
of Dec. 31, 2011, it beneficially owns 127,960 shares of common
stock of First Security Group, Inc., representing 7.76% of the
shares outstanding. A full-text copy of the filing is available
for free at http://is.gd/A814Jj
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
On Sept. 7, 2010, the Company entered into a Written Agreement
with the Federal Reserve Bank of Atlanta, the Company's primary
regulator, which prohibits the Company from declaring or paying
dividends without prior written consent of the Federal Reserve.
The Company is also prohibited from taking dividends, or any other
form of payment representing a reduction of capital, from the Bank
without prior written consent.
The Company is also required, within 60 days of the Agreement, to
submit to the Federal Reserve a written plan designed to maintain
sufficient capital at the Company and the Bank.
On April 28, 2010, FSGBank, the Company's wholly-owned subsidiary,
consented and agreed to the issuance of a Consent Order by the
Office of the Comptroller of the Currency (OCC). Pursuant to that
Consent Order, within 120 days of the effective date of the Order,
the Bank is required to achieve and thereafter maintain total
capital at least equal to 13% of risk-weighted assets and
Tier 1 capital at least equal to 9% of adjusted total
assets.
As of Sept. 30, 2010, the first financial reporting period
subsequent to the 120 day requirement, the Bank's total capital to
risk-weighted assets was 12.93% and the Tier 1 capital to
adjusted total assets was 7.43%. The Bank has notified the
OCC of the non-compliance.
Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred losses from operations for the past two
years. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
According to the Company, its ability to continue as a going
concern is contingent upon its ability to devise and successfully
execute a management plan to develop profitable operations,
satisfy the requirements of the regulatory actions, and lower the
level of problem assets to an acceptable level.
The Company reported a net loss of $44.34 million on
$54.91 million of total interest income for the year ended
Dec. 31, 2010, compared with a net loss of $33.45 million on
$64.00 million of total interest income during the prior year.
The Company also reported a net loss of $14.53 million on
$32.85 million of total interest income for the nine months ended
Sept. 30, 2011, compared with a net loss of $33.01 million on
$42.53 million of total interest income for the same period during
the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$1.12 billion in total assets, $1.04 billion in total liabilities,
and $78.04 million in total stockholders' equity.
FREI NORTH AMERICAN: Moody's Assigns 'Ba3' Rating to Term Loan B
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to the $210
million senior secured term loan B due 2019, and the $33 million
funded letter of credit term loan facility also due 2019, for
FREIF North American Power I LLC ("FREIF North American" or
"Borrower"). The rating outlook is stable.
RATINGS RATIONALE
Proceeds from the transaction, together with sponsor equity, will
be used to acquire a portfolio of four power projects from
affiliates of ArcLight Capital Partners, LLC and to pay related
transaction costs. FREIF North American is a special purpose
entity formed by First Reserve Energy Infrastructure Advisors,
L.L.C. ("First Reserve Energy Infrastructure" or "Sponsor") to
acquire the four projects. The portfolio consists of four power
plants totaling 1,068 MWs of net generation. The plants are
located in New Mexico, California, Texas and Connecticut.
First Reserve Energy Infrastructure is a private equity fund
founded by First Reserve Corporation, a private equity investment
firm founded in 1984, and focused exclusively on making private
equity and infrastructure investments in the energy sector. First
Reserve Energy Infrastructure is a fund that was formed in 2011
and has $1.2 billion under management.
The rating reflects the highly contracted nature of the portfolio
of projects, the duration of the contracts, the credit quality of
the contract counterparties and the portfolio diversification
across four states. The generation assets are expected to generate
stable cash flows going forward. However, the recommendation also
considers the high leverage associated with the underlying project
assets, uncertainty surrounding the SRAC (short-run avoided cost)
price, which will drive cash flow levels at the one of the largest
generation assets in the portfolio (Crockett Cogeneration in
California), refinancing risk and the structurally subordinated
position of the holding company lenders.
For further details on the ratings rationale, please refer to
Moody's credit opinion on FREIF North American, which will be
posted on Moodys.com.
The credit facilities will be secured by a perfected first
priority security interest in all the assets of the Borrower, the
Borrower's equity interest in the subsidiary companies and the
Sponsor's interest in the Borrower.
The stable outlook reflects the expectation that the portfolio of
projects will generate relatively stable and predictable cash
flows, since the cash flows are derived from long term contracts
with investment grade counterparties. The outlook also assumes the
near term stability in the credit quality of the project off-
takers and anticipates that the projects will continue to be
operated in a manner that allows them to perform as expected.
The rating is predicated upon final documentation in accordance
with Moody's current understanding of the transaction.
The principal methodology used in this rating was Power Generation
Projects published in December 2008.
FREIF North Amerian Power I LLC is a special purpose entity formed
by First Reserve Energy Infrastructure Advisors, L.L.C. to acquire
a portfolio consisting of four power plants totaling 1,068 MWs of
net generation.
FREIF NORTH AMERICAN: S&P Assigns 'BB-' Rating to Term Loan
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BB-'
ratings to FREIF North American Power I LLC's (FREIF) $210 million
senior secured term loan and letter-of-credit (LOC) facility due
2019. "In addition, we assigned a preliminary recovery rating of
'2' on both series of debt, indicating the expectation for a
substantial (70% to 90%) recovery in the event of payment default.
The preliminary ratings are subject to receipt and review of final
documentation, including acceptable ringfencing provisions, and an
acceptable nonconsolidation opinion of FREIF from its unrated
owners. The outlook is stable," S&P said.
"FREIF will be a special-purpose, bankruptcy-remote entity formed
to own and operate a portfolio of four generation assets. The
portfolio is a closed-end portfolio of equity interests in four
power plants totaling 1,068 megawatts (MW) of net generation. The
assets are in Texas, California, Connecticut, and New Mexico.
Long-term power purchase agreements with investment-grade
counterparties add some cash flow stability, as almost all of the
project's capacity is accounted for through 2024," S&P said.
"The preliminary ratings assume that FREIF will meet Standard &
Poor's special-purpose-entity criteria, including the provision of
a nonconsolidation opinion and independent director,' said
Standard & Poor's credit analyst Andrew Giudici. "We rate FREIF
using Standard & Poor's project developer criteria."
"The stable outlook is based on expectations of good operations
and some stability in cash flow through 2024. We could lower the
rating if the project encounters higher-than-estimated forced
outages or severe operating issues, which result in higher
expenses and lower availabilities, especially at Crockett because
its performance under a new market index formula regime will
be key to the portfolio's credit metrics. Conversely, material
improvements in the risk profiles of several projects--
particularly Crockett and Hobbs, could result in an upgrade," S&P
said.
FUEL DOCTOR: Faces Complaint Over Breach of Sponsorship Pact
------------------------------------------------------------
Fuel Doctor Holdings, Inc., on Feb. 9, 2012, received a summons
stating that on Jan. 11, 2012, Turn One Racing LLC filed a
complaint in the United States District Court for the Western
District of Virginia, Civil No. 4:12-CV-0001-JLK, alleging breach
of contract under the Sponsorship Agreement, dated March 29, 2011,
by and between the Fuel Doctor LLC, the Company's wholly-owned
subsidiary and Plaintiff. Plaintiff is seeking, among other
things, damages of at least $215,081 with interest accruing at the
federal judgment rate form the date of judgment. While the
Company intends to commence negotiations with Plaintiff concerning
the Agreement and the Complaint, there can be no assurance that
the Company and Plaintiff will come to any agreement or settlement
with respect to the litigation or the Agreement. Even if the
Company succeeds in defending against the litigation, the Company
is likely to incur substantial costs and its management's
attention will be diverted from the Company's operations.
About Fuel Doctor
Calabasas, Calif.-based Fuel Doctor Holdings, Inc., is the
exclusive distributor for the United States and Canada of a fuel
efficiency booster (the FD-47), which plugs into the lighter
socket/power port of a vehicle and increases the vehicle's miles
per gallon through the power conditioning of the vehicle's
electrical systems. The Company has also developed, and plans on
continuing to develop, certain related products.
For the nine months ended Sept. 30, 2011, the Company has reported
a net loss of $1.9 million on $811,576 of revenues, compared with
a net loss of $1.7 million on $603,329 of revenues for the
corresponding period last year.
The Company had an accumulated deficit at Sept. 30, 2011, had a
net loss and net cash used in operating activities for the interim
period then ended. "While the Company is attempting to generate
sufficient revenues, the Company's cash position may not be
sufficient to support the Company's daily operations," the Company
said in the filing.
GAC STORAGE: BBT Seeks Additional Adequate Protection Provisions
----------------------------------------------------------------
On Nov. 14, 2012, GAC Storage Lansing, LLC, asked the U.S.
Bankruptcy Court for the Northern District of Illinois for
authorization to use cash collateral of Branch Banking & Trust
Company, as successor in interest to Colonial Bank, on an interim
and final basis. The Debtor intends to use cash collateral to
fund ordinary and necessary costs and expenses of operations,
limited to the amounts set forth on the Cash Projections, as the
same may be supplemented or revised after the Interim Period, i.e.
through and including the week beginning on Nov. 27, 2011.
No liens, cash payments or other adequate protection are being
provided during the Interim Period.
On Feb. 3, 2012, BBT, the Debtor's sole secured creditor with a
blanket lien on all of the Debtor's assets, filed an objection to
the entry of a final order granting use of cash collateral,
citing:
1. It is owed $4.4 million but undersecured by over $1.8 million.
2. BBT objects to any use of its cash collateral for legal or
other professional expenses of the Debtor (the "Disputed Use") and
will shortly be filing a motion to lift the stay in this case, an
objection to the Debtor's motion for extension of its exclusive
rights to file a plan and a motion seeking that Debtor's counsel
return to the estate the current balances in the retainer accounts
originally funded with $125,000 of BBT's cash collateral.
3. BBT will permit temporary use of its cash solely for the other
narrow expenses of managing the Debtor's property as set forth in
the Cash Projections, until the stay is lifted herein or this case
is converted, dismissed, or discharged, or cash collateral use
otherwise terminated by court order.
4. Debtor has no known unencumbered assets with which to provide
BBT with adequate protection for any use of its cash for such
legal fees. The proposed use of cash collateral only benefits
the Debtor's insider guarantors (who should fund this case with
their own money).
5. To further protect its interests in all of its collateral, BBT
requests that the Court require, as part of any final cash
collateral order, additional adequate protection provisions,
including the following: (i) a termination of the Debtor's right
to use of cash upon (a) any conversion or dismissal of this case,
or (b) any termination of the automatic stay herein or of the
Debtor's exclusive right to file a plan, or any failure of the
Debtor to confirm a plan or sustain its burden of proving
continued adequate protection of any interest of BBT in its
collateral; (ii) access for BBT to all books and records of the
Debtor to confirm or monitor the amount, safety and location of
BBT's cash collateral and other collateral; (iii) segregation of
all cash collateral not used for approved operating expenses in an
account separate and apart from the accounts of the Debtor's
affiliates, and (iv) such additional provisions as BBT may propose
prior to any final hearing on the motion, after having had
an opportunity to review additional information from upcoming
discovery and any proposed final order.
About Makena Great
The Makena Great American Anza Company LLC --
http://www.makenacapital.net/-- is a commercial shopping
center developers in Southern California. Makena Great American
leads the way in the acquisition and development of "A-Location"
small commercial shopping centers and corner properties in
Southern California.
The 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 local
counsel to the Debtor. D. Sam Anderson, Esq., and Halliday
Moncure, Esq., at Bernstein, Shur, Sawyer & Nelson, P.A., in
Portland, Maine, serve as counsel to the Debtor. The Debtor
disclosed $13,938,161 in assets and $17,723,488 in liabilities.
About GAC Storage
GAC Storage Lansing, LLC, owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois. The Company filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011.
Jay S. Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure,
Esq., at Bernstein, Shur, Sawyer & Nelson, P.A., represents the
Debtor as counsel. Robert M, Fishman, Esq., and Gordon E.
Gouveia, Esq., at Shaw Gussis Fishman Glantz Wolfson, & Towbin
LLC, in Chicago, represents the Debtor as local counsel. It
estimated $1 million to $10 million in assets and debts. The
petition was signed by Noam Schwartz, secretary and treasurer of
EBM Mgmt Servs, Inc., manager of GAC Storage, LLC.
The Debtors' cases are being jointly administered along with the
Chapter 11 cases of The Makena Great American Anza Company, LLC
("Anza") and San Tan Plaza, LLC ("San Tan," and together with
Anza, the "Related Debtors") under lead case no. 11-40944.
GARLOCK SEALING: Asbestos Claimants Wants Plan Outline Denied
-------------------------------------------------------------
Joseph W. Grier, III, the duly appointed representative for future
asbestos claimants in the Chapter 11 cases of Garlock Sealing
Technologies LLC, et al., asks the U.S. Bankruptcy Court for the
Western District of North Carolina to deny approval of the the
Debtors' Disclosure Statement.
According to Mr. Grier:
-- the Plan of Reorganization impairs the rights of holders of
current GST Asbestos Claims and future GST Asbestos Claims
? the largest creditor constituency in the Debtors' case in
both number and amount ? but simultaneously precludes them
from voting on the Debtors' Plan, thus, the Debtors' Plan
violates Section 1126 of the Bankruptcy Code and is
unconfirmable on its face; and
-- The Disclosure Statement does not contain adequate
information to allow creditors to fairly and effectively
evaluate the Debtors' Plan because, among other things, it
omits critical financial information and does not allow for
an analysis of recoveries by certain classes under the
Debtors' Plan.
As reported in the Troubled Company Reporter on Dec. 2, 2011,
Garlock said in the Disclosure Statement that all asbestos claims
must be paid in full. Full payment enables the plan to allow
continued ownership by parent EnPro Industries Inc.
The Plan will create a trust to fund payment to present and future
asbestos claimants. For currently existing claims, the trust will
have insurance proceeds plus cash from Garlock together with a
promise from EnPro to provide up to $30 million over time. For
future claims, the trust will receive $60 million from Garlock
plus a secured promise by Garlock to supply an additional $140
million. The promise will be secured by 51% of Garlock's stock.
Asbestos claimants have the option of having their claims decided
through a settlement process or through litigation. The draft
disclosure statement has blanks where the estimated amounts of
asbestos claims later will be inserted.
Unsecured creditors with $1.5 million in claims are to be paid in
full. If confirmed, the plan will give releases to EnPro and all
subsidiaries. Previously, Garlock said $194 million of insurance
was remaining.
The FCR is represented by:
A. Cotten Wright, Esq.
GRIER FURR & CRISP, PA
101 North Tryon Street, Suite 1240
Charlotte, NC 28246
Tel: (704) 375-3720
E-mail: cwright@grierlaw.com
- and -
Jonathan P. Guy, Esq.
ORRICK, HERRINGTON & SUTCLIFFE LLP
Columbia Center
1152 15th Street, NW
Washington, DC 20005
Tel: (202) 339-8400
E-mail: jguy@orrick.com
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.
GETTY PETROLEUM: Aims to Advance Bid to Vacate $230MM Award
-----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Getty Petroleum Marketing
Inc. is asking the bankruptcy court for permission to continue
with its bid to overturn a $230 million arbitration award it has
been orders to pay ethanol producer Bionol Clearfield LLC.
About Getty Petroleum
A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing
markets gasolines, hydraulic fluids, and lubricating oils through
a network of gas stations owned and operated by franchise holders.
A former subsidiary of Russian oil giant LUKOIL, the company
operates in the Mid-Atlantic and Northeastern US states. Getty
Petroleum Marketing's primary asset is the more than 800 gas
stations in the Mid-Atlantic states which are located on
properties owned by Getty Realty. After scaling back the
company's operations to cut debt, in 2011 LUKOIL sold Getty
Petroleum Marketing to investment firm Cambridge Petroleum Holding
for an undisclosed price.
Getty Petroleum and three affiliates filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on
Dec. 5, 2011. Judge Shelley C. Chapman presides over the case.
Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq.,
and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New
York, N.Y., serve as Debtors' counsel. Ross, Rosenthal & Company,
LLP, serves as accountants for the Debtors. Getty Petroleum
Marketing, Inc., disclosed $46,592,263 in assets and $316,829,444
in liabilities as of the Petition Date. The petition was signed
by Bjorn Q. Aaserod, chief executive officer and chairman of the
board.
The Official Committee of Unsecured Creditors is represented by
Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North
America, LLC, serves as the Committee's financial advisors.
GELTECH SOLUTIONS: Peter Cordani Discloses 5.3% Equity Stake
------------------------------------------------------------
Peter Cordani disclosed in an amended Schedule 13G filing with the
U.S. Securities and Exchange Commission that, as of Dec. 31, 2011,
he beneficially owns 1,233,232 shares of common stock of GelTech
Solutions, Inc., representing 5.3% of the shares outstanding. A
full-text copy of the filing is available at http://is.gd/WdI2Ai
About GelTech Solutions
Jupiter, Fla.-based GelTech Solutions. Inc. (OTC Bulletin Board:
GLTC) -- http://www.GelTechsolutions.com/-- is a Delaware
corporation organized in 2006. The Company creates innovative,
Earth-friendly, cost-effective products that help industry,
agriculture, and the general public accomplish environmental and
safety goals, such as water conservation and the protection of
lives, homes, and property from fires. The Company's current
business model is focused on the following products: 1)
FireIce(R), a fire suppression product, 2) SkinArmor(TM), an
ointment used for protecting skin from direct flame and high
temperatures, and 3) Soil2O(TM), a line of agricultural moisture
retention products.
The Company reported a net loss of $6.02 million on $221,804 of
sales for the fiscal year ended June 30, 2011, compared with a net
loss of $3.53 million on $566,240 of sales during the prior year.
Salberg & Company, P.A., in Boca Raton, Florida, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has a net loss and net cash used in operating activities in 2011
of $6,026,641 and $3,636,213, respectively, and has an accumulated
deficit of $15,669,827 at June 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed $1.71
million in total assets, $1.92 million in total liabilities, and
a $214,870 total stockholders' deficit.
GELTECH SOLUTIONS: Michael Cordani Discloses 3.2% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Michael Cordani disclosed that, as of
Dec. 31, 2011, he beneficially owns 755,609 shares of common stock
of GelTech Solutions, Inc., representing 3.2% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/UXcYdj
About GelTech Solutions
Jupiter, Fla.-based GelTech Solutions. Inc. (OTC Bulletin Board:
GLTC) -- http://www.GelTechsolutions.com/-- is a Delaware
corporation organized in 2006. The Company creates innovative,
Earth-friendly, cost-effective products that help industry,
agriculture, and the general public accomplish environmental and
safety goals, such as water conservation and the protection of
lives, homes, and property from fires. The Company's current
business model is focused on the following products: 1)
FireIce(R), a fire suppression product, 2) SkinArmor(TM), an
ointment used for protecting skin from direct flame and high
temperatures, and 3) Soil2O(TM), a line of agricultural moisture
retention products.
The Company reported a net loss of $6.02 million on $221,804 of
sales for the fiscal year ended June 30, 2011, compared with a net
loss of $3.53 million on $566,240 of sales during the prior year.
Salberg & Company, P.A., in Boca Raton, Florida, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has a net loss and net cash used in operating activities in 2011
of $6,026,641 and $3,636,213, respectively, and has an accumulated
deficit of $15,669,827 at June 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed $1.71
million in total assets, $1.92 million in total liabilities, and
a $214,870 total stockholders' deficit.
GELTECH SOLUTIONS: Phillip O'Connell Holds 7.4% Equity Stake
------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Phillip D. O'Connell, Jr., disclosed that, as
of Dec. 31, 2011, he beneficially owns 1,710,858 shares of common
stock of GelTech Solutions, Inc., representing 7.4% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/6DRiJN
About GelTech Solutions
Jupiter, Fla.-based GelTech Solutions. Inc. (OTC Bulletin Board:
GLTC) -- http://www.GelTechsolutions.com/-- is a Delaware
corporation organized in 2006. The Company creates innovative,
Earth-friendly, cost-effective products that help industry,
agriculture, and the general public accomplish environmental and
safety goals, such as water conservation and the protection of
lives, homes, and property from fires. The Company's current
business model is focused on the following products: 1)
FireIce(R), a fire suppression product, 2) SkinArmor(TM), an
ointment used for protecting skin from direct flame and high
temperatures, and 3) Soil2O(TM), a line of agricultural moisture
retention products.
The Company reported a net loss of $6.02 million on $221,804 of
sales for the fiscal year ended June 30, 2011, compared with a net
loss of $3.53 million on $566,240 of sales during the prior year.
Salberg & Company, P.A., in Boca Raton, Florida, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has a net loss and net cash used in operating activities in 2011
of $6,026,641 and $3,636,213, respectively, and has an accumulated
deficit of $15,669,827 at June 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed $1.71
million in total assets, $1.92 million in total liabilities, and
a $214,870 total stockholders' deficit.
GIBRALTAR KENTUCKY: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
Paul Brinkmann, reporter at South Florida Business Journal,
reports that Gibraltar Kentucky Development LLC has filed for
Chapter 11 bankruptcy in West Palm Beach, Florida, declaring
assets of more than $100 million, mostly in coal, gas and oil
reserves in Kentucky.
According to the report, the company filed a list of individual
investors with claims in the bankruptcy with addresses in
Michigan, Kentucky, Florida and other states. The Company's
petition also listed a claim of $1 million from Guy Lindley,
ex-CEO of Northeastern International Airways, and his wife Francis
Lindley of Fort Lauderdale; $16,600 from Weston-based J.W.
Wireline Co. The largest equity security holder was McGaugh
Energy LLC of Palm Beach Gardens at 42.15 percent.
"The decision to file was a necessary step related to a series of
non-operationally related events that we are confident will be
resolved before the end of summer 2012," the report quotes
managing member William H. Boyd as stating.
Gibraltar Kentucky Development LLC is an energy development and
mining company.
GRACEWAY PHARMACEUTICALS: Settles Claims With GTCR for $6-Mil.
--------------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that Graceway
Pharmaceuticals LLC on Tuesday asked a Delaware bankruptcy court
to sign off on a $6 million settlement with private equity firm
GTCR Golder Rauner LLC over potential claims from a 2010 tax
distribution.
Law360 relates that under the terms of the settlement, GTCR will
pay $6 million and release the $9.1 million in potential claims
against Graceway, which filed a Chapter 11 plan last month that
calls for the liquidation of substantially all of its remaining
assets and the resolution of all claims against the company.
About Graceway Pharmaceuticals
Based in Bristol, Tennessee, Graceway Pharmaceuticals LLC offers
dermatology, respiratory, and women's health products. Its
Zyclara Cream is used for the treatment of external genital and
perianal warts (EGW) in patients 12 years of age and older. The
company offers products for the treatment of dermatology
conditions, such as actinic keratosis, superficial basal cell
carcinoma, external genital warts, atopic dermatitis, and acne;
and respiratory conditions, such as asthma.
Graceway Pharmaceuticals and its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Lead Case No. 11-13036) on
Sept. 29, 2011.
The company's debt includes $430.7 million owing on a first-lien
revolving credit and term loan. Second-lien debt is $330 million,
with mezzanine debt totaling another $81.4 million.
Attorneys at Young Conaway Stargatt & Taylor LLP serve as counsel
to the Debtors. Latham & Watkins LLP is the co-counsel. Alvarez
and Marsal North America, LLC, is the financial advisor. Lazard
Freres & Co. LLC is the investment banker. PricewaterhouseCoopers
LLP is the tax consultant. BMC Group serves as claims and notice
agent.
Lowenstein Sandler PC serves as the committee counsel.
Graceway Pharmaceuticals LLC completed the sale of the business in
December 2011 to Medicis Pharmaceutical Corp. for $455 million.
GREEN EARTH: Incurs $4.6 Million Net Loss in Dec. 31 Quarter
------------------------------------------------------------
Green Earth Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting a
net loss of $4.68 million on $1.57 million of net sales for the
three months ended Dec. 31, 2011, compared with a net loss of
$2.64 million on $678,000 of net sales for the same period a year
ago.
The Company reported a net loss of $12.20 million on $7.50 million
of net sales for the year ended June 30, 2011, compared with a net
loss of $12.88 million on $2.43 million of net sales during the
prior year.
The Company reported a net loss of $6.95 million on $3.41 million
of net sales for the six months ended Dec. 31, 2011, compared with
a net loss of $5.25 million on $1.14 million of net sales for the
same period during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $3.68 million
in total assets, $9.84 million in total liabilities and a $6.16
million total stockholders' deficit.
Friedman LLP, in East Hanover, New Jersey, noted that the
Company's losses, negative cash flows from operations, working
capital deficit and its ability to pay its outstanding liabilities
through fiscal 2012 raise substantial doubt about its ability to
continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/VZqGf0
About Green Earth Technologies
White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB:
GETG) -- http://www.getg.com/-- markets, sells and distributes
bio-degradable performance and cleaning products. The Company's
product line crosses multiple industries including the automotive
aftermarket, marine and outdoor power equipment markets.
GSC GROUP: Court Confirms Black Diamond-Sponsored Ch. 11 Plan
-------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that after nearly two
years of contentious proceedings, a 10-minute hearing was all it
took to bring GSC Group Inc.'s bankruptcy to a close Tuesday, with
a New York bankruptcy judge approving a Black Diamond Capital
Management LLC-sponsored Chapter 11 plan for the investment
management firm.
Black Diamond's plan was the product of a settlement with GSC's
Chapter 11 trustee approved by the bankruptcy court in December.
As reported by The Troubled Company Reporter on Jan. 24, 2012, the
Fourth Amended BDCM Plan provides for the continued operation of
the Debtors' existing investment management business. BDCM
maintained that its plan is a more preferable and value-preserving
alternative to the GSC Chapter 11 Trustee's Modified Joint Plan of
Liquidation. The BDCM Plan offers all unsecured creditors three
recovery options: (1) a fast cash payout; (2) a partial cash
payment close to the Effective Date plus a delayed cash payout
from the proceeds of the Liquidating Trust; or (3) shares of
Reorganized GSC Group Series B Preferred Stock and shares of
Reorganized GSC Group Convertible Class B Common Stock, which will
comprise between 33% and 49%, at BDCM's discretion, of the
Reorganized GSC Group Common Stock with 24.9% of the voting
rights. The BDCM Plan also provides that Preferred Equity
Interest holders will receive shares of Reorganized GSC Group's
Class A Common Stock equal to between 51% and 67%, at BDCM's
discretion, of the total GSC Common Stock, while the Trustee Plan
does not provide any recovery for the interest holders.
A clean version of the BDCM 4th Amended Disclosure Statement dated
Jan. 12, 2012, is available for free at:
http://bankrupt.com/misc/GSCGrp_DS4thAmdJan12.PDF
In a Dec. 20 stipulation, the Chapter 11 Trustee agreed to support
the BDCM Plan, and adjourned seeking confirmation of its own Plan
to allow BDCM to pursue confirmation of the BDCM Plan provided
that BDCM consummates its Plan by Mar. 31, 2012. In return, BDCM
has provided the Chapter 11 Trustee with $1 million to satisfy
allowed Chapter 11 professional fees and agreed to provide
$4 million in escrow funds for the Reorganized Debtors to use to
satisfy any "Straddle Tax" (i.e., any income tax liability
required to be paid had the Effective Date occurred on or before
Dec. 31, 2011).
About GSC Group
Florham Park, New Jersey-based GSC Group, Inc. --
http://www.gsc.com/-- was a private equity firm that specialized
in mezzanine and fund of fund investments. Originally named
Greenwich Street Capital Partners Inc. when it was a subsidiary of
Travelers Group Inc., GSC became independent in 1998 and at one
time had $28 billion of assets under management. Market reverses,
termination of some funds, and withdrawal of customers'
investments reduced funds under management at the time of
bankruptcy to $8.4 billion.
GSC Group, Inc., filed for Chapter 11 bankruptcy protection
(Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B.
Solow, Esq., at Kaye Scholer LLP, served as the Debtor's
bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the
Debtor's notice and claims agent. Capstone Advisory Group LLC
served as the Debtor's financial advisor. The Debtor estimated
its assets at $1 million to $10 million and debts at $100 million
to $500 million as of the Chapter 11 filing.
Since Jan. 7, 2011, the Debtors have been operated by James L.
Garrity Jr., as Chapter 11 trustee for the Debtors. The Chapter
11 trustee tapped Shearman & Sterling LLP as his counsel, and
Togut, Segal & Segal LLP as his conflicts counsel.
No committee of unsecured creditors has been appointed in the
case.
The Chapter 11 trustee completed the sale of business in July 2011
and filed a liquidating Chapter 11 plan and explanatory disclosure
statement in late August. The bankruptcy court authorized the
trustee to sell the business to Black Diamond Capital Finance LLC,
as agent for the secured lenders. Proceeds were used to pay
secured claims. The price paid by the lenders' agent was designed
for full payment on $256.8 million in secured claims, with
$18.6 million cash left over. Black Diamond bought most assets
with a $224 million credit bid, a $6.7 million note, $5 million
cash, and debt assumption. A minority group of secured lenders
filed an appeal from the order allowing the sale. Through a suit
in state court, the minority lenders failed to halt Black Diamond
from completing the sale.
The Chapter 11 Trustee and Black Diamond have filed rival
repayment plans for GSC Group. As reported in the TCR on Dec. 16,
2011, Hilary Russ at Bankruptcy Law360 related that the Chapter 11
trustee for GSC Group, Inc., reached a handshake deal on Dec. 13,
2011, ending a bitter dispute with Black Diamond that delayed a
$235 million asset sale.
Adam Goldberg, Esq., and Douglas Bacon, Esq., at Latham & Watkins,
represent Black Diamond Capital Management, LLC, as counsel.
Patrick J. Nash, Jr., Esq. and Paul Wierbicki, Esq. of Kirkland &
Ellis LLP serve as counsel to Black Diamond Capital Management,
LLC.
GULFSTREAM INT'L: Trustee Says Execs Shouldn't Get D&O Cash
-----------------------------------------------------------
Pete Brush at Bankruptcy Law360 reports that the liquidating
trustee for Gulfstream International Group Inc., the airline
bought from bankruptcy by private equity firm Victory Park
Capital, objected Monday to a bid by six former executives and
directors for $815,000 in insurance money to pay for a securities
fraud settlement.
Liquidating trustee Kenneth A. Welt told U.S. Bankruptcy Judge
John K. Olson that he has his own claim to the limits of the
National Union Fire Insurance Co. of Pittsburgh policy and notes
that the fraud settlement would bar his own claims, according to
Law360.
About Gulfstream International
Fort Lauderdale, Florida-based Gulfstream International Airlines
(NYSE Amex: GIA) operated a fleet of turboprop Beechcraft 19000
aircraft, and specialized in providing travelers with access to
niche locations not typically covered by major carriers. GIA
operated more than 150 scheduled flights per day, serving nine
destinations in Florida, 10 destinations in the Bahamas, five
destinations from Continental Airline's hub under the Department
of Transportation's Essential Air Service Program and supports
charter service to Cuba through a services agreement with
Gulfstream Air Charter, Inc., an entity otherwise unrelated to the
Debtors. GIA operated as a Continental Connection carrier, as
well as for United Airlines, Northwest Airlines and Copa Airlines,
through code share agreements. GIA has 620 employees, including
530 working full-time.
Gulfstream International Group, Inc., and its units including
Gulfstream International Airline, Inc., filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-44131) on
Nov. 4, 2010. Brian K. Gart, Esq., at Berger Singerman, P.A.,
serves as the Debtors' bankruptcy counsel. Jetstream Aviation
Capital, LLC and Jetstream Aviation Management, LLC, serve as
financial advisors to the Debtors. Robert A. Schatzman, Esq.,
Steven J. Solomon, Esq., and Frank P. Terzo, Esq., at
GrayRobinson, P.A., in Miami, Florida, serve as counsel to the
Official Committee of Unsecured Creditors.
Gulfstream International Airlines disclosed US$15,967,096 in total
assets and US$25,243,099 in total liabilities.
Victory Park provided Gulfstream with up to US$5 million debtor-
in-possession financing to fund the Chapter 11 case.
As reported in the Troubled Company Reporter on May 18, 2011, Dow
Jones' DBR Small Cap said that Victory Park Capital is buckling
again into the airline sector, completing its purchase of
Gulfstream International Group Inc. A prior bankruptcy court
order said there will be a "structured dismissal" of the Chapter
11 case within 30 days of the completion of the sale.
In December 2011, VPAA Co. dba/Gulfstream International Airlines
disclosed its adoption of a new name and brand: Silver Airways.
The name, along with its crisp and distinctive logotype, exemplify
the airline's dynamic growth potential, as well as its unwavering
commitment to providing highly professional, safe and efficient
operations.
HEIDE & COOK: Files for Chapter 11 Bankruptcy to Restructure Debts
------------------------------------------------------------------
Honolulu Star-Advertiser reports that Heide & Cook Ltd. filed on
Feb. 14, 2012, for Chapter 11 bankruptcy in Honolulu, Hawaii,
hoping to restructure debts and continue operations. The report
says the company disclosed assets and debts at about $10 million.
According to the report, the Company's petition stated that it had
been unable to satisfy delinquent debts to lenders, landlords and
equipment lessors despite a restructuring effort announced in
August 2012. Earle Matsuda, Heide & Cook's co-owner, president
and chief operating officer, said in the filing that the company
has more value if it can restructure debts and stay in business.
The report says a bankruptcy plan proposed that a subsidiary of
Chugach Alaska Corp., a Native Alaskan-owned conglomerate, will
provide $500,000 to sustain Heide & Cook through bankruptcy
reorganization. Other details of restructuring debts will be
proposed and subject to Bankruptcy Court approval.
The report notes that Heide & Cook said its 20 largest creditors
with debts not secured by company assets are owed $4.3 million.
Chugach holds a $1 million claim. First Hawaiian Bank holds
$488,956 in credit card debt. Debts owed to 15 vendors and
subcontractors range from about $70,000 to $300,000 each.
Heide & Cook Ltd. operates a mechanical engineering firm.
HOSTESS BRANDS: U.S. Objects to Bid to Sell Polluted Sites
----------------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that the United
States told a New York judge on Tuesday it objected to Hostess
Brands Inc.'s request to sell certain assets without prior court
approval, arguing that an order authorizing the sales would have
to take into account liabilities for environmentally contaminated
property.
According to Law360, the U.S. Attorney for the Southern District
of New York asked Judge Robert Drain to require language in any
order allowing the sales that says that a purchaser of
contaminated property from the bankrupt confectioner would not be
released of the responsibility.
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.
An official committee of unsecured creditors has been appointed in
the case.
HOSTESS BRANDS: U.S. Trustee Forms Creditors Committee
------------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 2, appointed nine
creditors to the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Hostess Brands, Inc., et al.
The Committee is consists of:
1. Bakery & Confectionery Union & Industry International
Pension Fund
Attn: Robert J. Bergin, executive director
10401 Connecticut Avenue
Kensington, MD 20895
Tel: (301) 468-3720
Fax: (301) 468-3815
2. Central States, Southeast & Southwest
Areas Pension Fund
Attn: Brad R. Berliner, associate general counsel
9377 West Higgins Road
Rosemont, IL 60018
Tel: (847) 518-9800, Ext. 3443
Fax: (847) 518-9797
3. Interstate Brands Corporation-International
Brotherhood of Teamsters National Negotiating Committee
Attn: Iain Gold
25 Louisiana Avenue, N.W.
Washington, D.C. 20001
Tel: (202) 624-8757
Fax: (202) 624-6910
4. NYS Teamsters Benefit Funds
Attn: Kenneth R. Stilwell, executive administer
151 Northern Concourse
P.O. Box 4928
Syracuse, NY 13221-4928
Tel: (315) 455-4640
Fax: (315) 455-1237
5. Stationary Engineers Union, Local 39
c/o Christian L. Raisner/Ezekiel D. Carder
Weinberg, Roger & Rosenfeld
1001 Marina Village Parkway, Suite 200
Alameda, California 94501
Tel: (510) 337-1001
Fax: (510) 337-1023
6. I.A.M. National Pension Fund
Attn: Joseph P. Martocci, Jr., manager
1300 Connecticut Avenue, Suite 300
Washington, D.C. 20036
Tel: (202) 857-3795
Fax: (202) 468-8098
7. Caravan Ingredients Inc.
Attn: Curtis Landherr, Esq., vice-president
7905 Quivira Road
Lenexa, KS 66215
Tel: (913) 690-5672
Fax: (913) 866-7085
8. Bakery, Confectionery, Tobacco Workers & Grain Millers
International Union
Attn: Franklin R. Hurt, president
10401 Connecticut Avenue
Kensington, MD 20895
Tel: (301) 933-8600
9. New England Teamsters and Trucking
Industry Pension Fund
Attn: Edward F. Groden, Executive Director
One Wall Street
Burlington, Massachusetts 01803
Tel: (781) 345-4400
Fax: (781) 345-4413
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, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, 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.
An official committee of unsecured creditors has been appointed in
the case.
The bankruptcy judge on Feb. 3 gave Hostess Brands final authority
for $75 million in secured financing. The day following the Jan.
11 Chapter 11 filing, Hostess had secured interim approval for a
$35 million loan.
HOSTESS BRANDS: Venable LLP OK'd as Employee Benefits Counsel
-------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York authorized Hostess Brands, Inc., et
al., to employ Venable LLP as their special employee benefits
counsel.
To the best of the Debtors' knowledge, Venable LLP is a
"disinterested person," as that term is defined in Section 101(14)
of the Bankruptcy Code.
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, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, 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.
An official committee of unsecured creditors has been appointed in
the case.
The bankruptcy judge on Feb. 3 gave Hostess Brands final authority
for $75 million in secured financing. The day following the Jan.
11 Chapter 11 filing, Hostess had secured interim approval for a
$35 million loan.
HOWARD & PHIL'S: Lawmaker-Owner Got Financing From Countrywide
--------------------------------------------------------------
The Associated Press, citing report from the Los Angeles Times,
says U.S. Rep. Howard McKeon received a $315,000 mortgage
refinance in 1998 from the now-defunct Countrywide Financial Corp.
under a VIP program as his family-owned business, Howard & Phil's
Western Wear, was going through a Chapter 11 bankruptcy.
According to the AP, the source cited financial disclosures and
bankruptcy filings that show the Southern California Republican
saw his income plummet in the years before refinancing his
Stevenson Ranch home. In spite of his limited cash flow, Mr.
McKeon received a favorable rate and wasn't required to produce
documentation proving he could repay the mortgage.
According to the AP, the terms were ordered by Countrywide chief
executive Angelo Mozilo, according to documents subpoenaed for a
House inquiry. House investigators are trying to determine
whether Mr. McKeon and three other congressmen, including fellow
California Republican Elton Gallegly, broke rules against gifts
when they received loans as part of a VIP program where some of
the favored customers were known as "Friends of Angelo." The House
ethics panel will also investigate whether they performed any
favorable actions for the lender.
The AP relates that the other two congressmen are Rep. Pete
Sessions, R-Texas, and Rep. Edolphus Towns, D-N.Y. None of the
lawmakers has been accused by the ethics panel of any wrongdoing,
and may never be if they convince investigators they had no
knowledge of the discounts. Preferential terms are not illegal
but can be looked upon as a gift and must be declared in financial
statements.
The Los Angeles Times said one e-mail written by a Countrywide
staffer included this instruction on Mr. McKeon's loan: "Per
Angelo -- take off 1 point, no garbage fees, approve the loan and
make it a no doc." Another notation recorded by a Countrywide
employee said Mr. McKeon seemed "edgy" and "wants to close ASAP."
Howard & Phil's Western Wear operated a chain of cowboy clothing
stores. The Company filed for Chapter 11 protection in 1998.
INDEPENDENCE TAX: Reports $2.2 Million Net Income in Dec. 31 Qtr.
-----------------------------------------------------------------
Independence Tax Credit Plus L.P. II filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q, reporting net income of $2.18 million on $283,685 of total
revenues for the three months ended Dec. 31, 2011, compared with a
net loss of $691,597 on $286,326 of total revenues for the same
period during the prior year.
The Company reported net income of $1.03 million on $850,085 of
total revenues for the nine months ended Dec. 31, 2011, compared
with a net loss of $460,649 on $868,024 of total revenues for the
same period a year ago.
The Company's balance sheet at Dec. 31, 2011, showed
$13.09 million in total assets, $39.39 million in total
liabilities, and a $26.30 million total partners' deficit.
As reported by the TCR on June 30, 2011, Trien Rosenberg Weinberg
Ciullo & Fazzari LLP, in New York, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that at March 31, 2011, the
Partnership's liabilities exceeded assets by $27,415,490 and for
the year then ended incurred net income of $15,984,571, including
gain on sale of properties of $20,284,069 and loss on impairment
of properties of $1,047,336. Partnership management fees of
$4,930,000 will be payable out of sales or refinancing proceeds
only to the extent of available funds after payments on all other
Partnership liabilities have been made and after the Limited
Partners have received a 10% return on their capital
contributions. As such, the General Partner cannot demand payment
of these deferred fees beyond the Partnership's ability to pay
them. In addition, where the Partnership has unpaid partnership
management fees related to sold properties, such management fees
are written off and recorded as capital contributions.
A full-text copy of the Form 10-Q is available for free at:
http://is.gd/IJPOYS
About Independence Tax Credit Plus L.P. II
Based in New York, Independence Tax Credit Plus L.P. II was
organized on Feb. 11, 1992, and commenced its public offering on
Jan. 19, 1993. The general partner of the Partnership is Related
Independence Associates L.P., a Delaware limited partnership. The
general partner of Related Independence Associates L.P. is Related
Independence Associates Inc., a Delaware Corporation. The
ultimate parent of Related Independence Associates L.P. is
Centerline Holding Company.
The Partnership's business is primarily to invest in other
partnerships owning leveraged apartment complexes that are
eligible for the low-income housing tax credit enacted in the Tax
Reform Act of 1986, some of which may also be eligible for the
historic rehabilitation tax credit.
The Partnership is in the process of developing a plan to dispose
of all of its investments.
INTELLIPHARMACEUTICS: Deloitte & Touche Raises Going Concern Doubt
------------------------------------------------------------------
Intellipharmaceutics International Inc. filed with the U.S.
Securities and Exchange Commission on Feb. 8, 2012, its
consolidated financial statements as of and for the fiscal years
ended Nov. 30, 2011, and 2010.
Deloitte & Touche LLP, in Toronto, expressed substantial doubt
about Intellipharmaceutics' ability to continue as a going
concern. The independent auditors noted that of the Company's
recurring losses from operations and stockholders' capital
deficiency.
The Company reported a net loss of US$4.9 million on US$501,814 of
research and development revenue for fiscal 2011, compared with a
net loss of US$5.8 million on US$1.5 million of research and
development revenue for fiscal 2010.
The Company's balance sheet at Nov. 30, 2011, showed
US$6.2 million in total assets, US$9.3 million in total
liabilities, and a stockholders' deficit of US$3.1 million.
The Company's Nov. 30, 2011 consolidated financial statements are
available for free at http://is.gd/Jy75yT
A copy of the 2011 Annual Management Discussion and Analysis is
available for free at http://is.gd/cBx5x3
Based in Toronto, Ontario, Intellipharmaceutics International Inc.
is pharmaceutical company specializing in the research,
development and manufacture of novel or generic controlled-release
and targeted-release oral solid dosage drugs. The Company's
patented Hypermatrix(TM) technology is a multidimensional
controlled-release drug delivery platform that can be applied to
the efficient development of a wide range of existing and new
pharmaceuticals. Based on this technology, the Company has a
pipeline of products in various stages of development including
six ANDAs under review by the FDA, in therapeutic areas that
include neurology, cardiovascular, gastrointestinal tract, pain
and infection.
INTERNATIONAL MEDIA: Wins Court OK to Auction TV Stations
---------------------------------------------------------
Foreign broadcaster International Media Group Inc. got permission
from a bankruptcy judge Tuesday to sell off its three multilingual
television stations in California and Hawaii at a March 22 auction
The Debtor's biggest lender will open the auction with an
$45 million offer.
Lance Duroni at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Mary F. Walrath signed off on bidding procedures for the
assets at a court hearing and scheduled the auction for March 22,
where Texas-based broadcaster and secured lender NRJ TV LLC?s
credit bid could be tested by other offers. Competing bids are due
by March 19.
TVNewsCheck notes that International Media has asked the Federal
Communications Commission for a pro forma transfer of the three
stations -- KSCI Los Angeles, KUAN-LP San Diego and KIKU Honolulu
-- to debtors-in-possession while efforts are made to sell the
stations.
About International Media Group
International Media Group Inc. and its affiliates operate
television station KSCI-TV (Channel 18) Long Beach, California;
KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19)
Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the
large Asian markets of Southern California and Hawaii and offer
programming in six (6) main languages -- (i) Chinese; (ii) Korean;
(iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi)
Japanese. The Television Stations' programming is a mix of
locally produced original news, entertainment, and talk shows,
purchased or syndicated foreign language programming, and paid
programming comprised principally of infomercials, per-inquiry and
direct response television advertisements.
KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC
license for KIKU-TV (Channel 19). KSCI Inc. owns all of the
equity of KHAI and of KSLS Inc., which holds the FCC license for
KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media
Group Inc. owns all of the equity of KSCI.
AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia
Group LLC owns all of the equity of AMG. Non-debtor AsianMedia
Investors I L.P. owns all of the equity of AsianMedia.
International Media Group and six affiliates filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012,
with the intent to sell their business as a going concern under
11 U.S.C. Sec. 363(a).
NRJ TV II LLC, an entity owned by the first lien lender, will be
the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe
$77.3 million on a first lien debt, including $67 million on a
term-loan. Fortress Credit Corp. serves as agent. Unless outbid
at the auction, the pre-petition lenders will acquire the assets
in exchange for a credit bid of $45 million, will assume certain
liabilities, and fund a "carve-out". An auction and sale hearing
is contemplated to be held in March.
Judge Mary F. Walrath oversees the Debtors' cases. International
Media Group tapped Houlihan Lokey Capital, Inc., in October to
market the assets. Houlihan will continue marketing the assets
post-petition. William E. Chipman, Jr., Esq., and Mark D.
Olivere, Esq., at Cousins Chipman & Brown, LLC, in Wilmington,
Delaware, serve as the Debtors' bankruptcy counsel. The Debtors'
claims agent is Epiq Bankruptcy Solutions LLC.
In its petition, International Media Group estimated $100 million
to $500 million in assets and debts. The petition was signed by
Dennis J. Davis, chief restructuring officer.
JEFFERSON COUNTY: Moody's Reviews Caa3 Rating on $3.14-Bil. Debt
----------------------------------------------------------------
Moody's Investors Service continues to review these ratings on
Jefferson County (AL) for possible downgrade: the Caa3 rating on
$3.14 billion in sewer revenue debt; the Caa1 rating on $200.52
million in outstanding general obligation debt; the Caa2 rating on
$83.64 million in outstanding lease revenue warrants, issued
through the Jefferson County Public Building Authority; the B3
rating on $814.08 million in limited obligation school bonds; and
the B3 rating on $32.92 million in special tax bonds issued by the
Birmingham-Jefferson Civic Center Authority and secured by various
county-wide excise taxes and other county revenues.
The ratings were originally placed under review after the County
Commission filed a petition on November 9, 2011 seeking federal
bankruptcy protection under Chapter 9. That petition is currently
before U.S. Bankruptcy Judge Thomas Bennett, who will determine
whether the county may enter Chapter 9 federal bankruptcy
protection. Moody's will continue to evaluate the impact of the
filing on the credit quality of the securities listed above should
the court approve the bankruptcy petition, as well as any other
new information.
Among other issues, Moody's is monitoring the payment of debt
service on the county's various obligations subsequent to the
bankruptcy filing. The initial debt service payment dates after
the bankruptcy filing are 3/2/2012 for sewer revenue debt and
4/1/2012 for general obligation debt. The limited obligation
school bonds and special tax bonds made scheduled debt service
payments on 1/1/2012; their next debt service payment dates are
7/1/2012.
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
JMC STEEL: Moody's Affirms 'B2' Corporate Family Rating
-------------------------------------------------------
Moody's Investors Service changed the rating outlook for JMC Steel
Group (JMC) to negative from stable. At the same time, Moody's
affirmed the B2 Corporate Family Rating and Probability of Default
Rating as well as the B1 rating on the senior secured term loan,
the B3 rating on the $725 million senior unsecured 8.25% notes due
2018 and assigned a B3 rating to the $150 million in senior
unsecured notes being added on to the senior unsecured note issue.
All terms and conditions of the original note offering remain
unchanged.
The change in rating outlook to negative results from JMC's
acquisition of Lakeside Steel Inc. in a cash purchase transaction
for C$0.2983 per share of Lakeside shares outstanding, and the
increased leverage resulting from this acquisition. Based upon the
number of shares outstanding at September 31, 2011, Moody's
estimates the acquisition cost at approximately C$58 million. In
addition, Lakeside had approximately C$53 million in debt
outstanding at September 30, 2011 resulting in a minimum
transaction cost of around C$110 million. On a pro-forma basis,
Moody's estimates the increase in debt to fund the acquisition
would take JMC's leverage, as measured by the debt/EBITDA ratio
(including Moody's standard adjustments) on a twelve month basis
through December 31, 2011 to approximately 5x from the reported
4.5x.
RATINGS RATIONALE
JMC's B2 Corporate Family Rating favorably considers the company's
focus on and progress in increasing its variable cost structure as
a percentage of its total cost basis, successfully reducing its
conversion costs and hence improving its margin on metal, its
large scale, and leading market position for a number of its pipe
and electrical conduit products, as well as its adequate
liquidity. The company's strong position in markets served
provides procurement and sales advantages that enhance its margins
while its size contributes to improving economies of scale and
operating efficiencies. The rating also reflects Moody's
expectations that JMC can successfully apply these strengths to
the Lakeside business footprint and turn Lakeside's recent loss
making operations around through better procurement capability and
efficiencies of scale.
However, the rating reflects Moody's expectations of continuing
weak market conditions for JMC's largest market -- the non
residential construction market -- where Moody's does not expect a
meaningful recovery until 2013 at the earliest, and by the
company's acquisitive nature. In addition, although the company is
achieving success in expanding its customer base into non
construction related markets, this market is expected to remain a
core component in the near term. The rating also considers that
the increase in adjusted absolute debt levels to approximately
$1.4 billion on a pro forma basis is relatively high for a company
in the cyclical steel industry. However, Moody's expects the
industry and markets served by JMC to continue to evidence year-
on-year improvement in earnings and cash flow generation as a more
sustainable recovery takes hold.
The negative outlook reflects the need for JMC to demonstrate that
it can turn around the performance of Lakeside Steel's existing
operations (operating loss of $7.2 million for the quarter through
September 30, 2011) through its efficiencies of scale and steel
procurement abilities, and considers the execution and integration
risks associated with this acquisition. Lakeside currently is a
single site operation in Canada with a major development project
in Alabama to serve the oil country tubular goods (OCTG) market.
This facility is expected to start-up over the balance of 2012.
The negative outlook also considers the need to develop a customer
base for the product from this facility.
Given the increase in absolute debt levels and the need to turn
around the performance of Lakeside, upside rating movement over
the next twelve to eighteen months is unlikely. Should JMC be able
to reduce leverage, on a sustainable basis, as measured by the
debt/EBITDA ratio below 4x and sustain the ratios of EBIT to
interest and free cash flow to debt above 2.2x and 7 respectively,
a change in outlook or rating could be considered.
A downgrade could be considered should JMC not be able to turn
around the performance of Lakeside Steel such that is earnings and
cash flow contributive, leverage, as measured be the debt/EBITDA
ratio increase beyond 5.75x, operating margins deteriorate below
5% or liquidity severely contract.
The principal methodology used in rating JMC Steel Group, Inc was
the Global Steel Industry Methodology published in January 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Headquartered in Chicago, Illinois, JMC manufactures steel pipe,
hollow structural sections (HSS) , electrical conduit products and
tubular products. Revenues for the twelve months ended December
31, 2011 were approximately $2 billion.
KLN STEEL: Says Mystery Buyer Plans to Acquire Assets
-----------------------------------------------------
Patrick Danner at My San Antonio reports that Patricia Tomasco,
Esq., a lawyer for KLN Steel Products Co. LLC and two sister
companies, told U.S. Bankruptcy Judge Craig Gargotta on Feb. 13,
2012, there is an undisclosed party that has submitted a draft
letter of intent to buy the companies.
According to the report, the identity of the prospective buyer
could be known by Feb. 29, 2012, the deadline KLN has set for
filing its reorganization plan. KLN officials hope to have the
plan confirmed by April 15, 2012.
The report says KLN has entered into confidentiality agreements
with 10 parties that presumably are interested in buying the
bankrupt companies.
The report notes that Banco Popular has agreed to allow KLN to
continue using its cash to pay expenses through April 30, 2012.
The bank holds liens on the cash, which KLN needs to continue
operating.
The report adds that, any sale of the three companies would not
include 4200 Pan Am LLC, a related company that owns the 170,000-
square-foot facility where KLN and Dehler operate. The building
owner filed for bankruptcy protection after Banco Popular posted
the property at 4200 Pan Am Expressway for foreclosure. State
corporate records show KLN CEO Edward Herman is affiliated with
4200 Pan Am. Mr. Herman's family purchased KLN from David
Ladensohn in 2006.
About KLN Steel Products
KLN Steel Products Company LLC, Dehler Manufacturing Co. Inc., and
Furniture by Thurston manufacture and market high quality
furniture for multi-person housing facilities and packaged
services for federal government offices and dormitory facilities.
They have two manufacturing facilities. One is in San Antonio,
Texas, which is consolidated and designed to accommodate high
volume fabrication of standard and semi-custom steel furniture and
casegoods of high quality for colleges and universities, military
quarters, and job corps centers, or wherever high quality, long
life, low maintenance furniture is essential. The facility
includes a manufacturing facility of more than 170,000 square feet
capable of producing substantial projects on a timely basis. The
second facility is located in Grass Valley, California, with more
than 61,000 square feet dedicated to the manufacturing of wood
furniture for military and university housing.
KLN Steel filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case
No. 11-12855) on Nov. 22, 2011. Dehler (Case No. 11-12856) and
Furniture by Thurston (Case No. 11-12858) filed on the same day.
Judge Craig A. Gargotta oversees the case. Patricia Baron
Tomasco, Esq., at Jackson Walker LLP, serves as the Debtors'
counsel. Horwood Marcus & Berk Chartered serves as their special
counsel. Conway MacKenzie, Inc., serves as financial advisor.
Each of the Debtors estimated assets and debts of $10 million to
$50 million.
San Antonio, Texas-based 4200 Pan Am LLC filed for Chapter 11
bankruptcy (Bankr. W.D. Tex. Case No. 11-13154) on Dec. 29, 2011.
Judge Gargotta oversees the case, taking over from Judge H.
Christopher Mott. Patricia Baron Tomasco, Esq., at Jackson Walker
LLP, serves as 4200 Pan Am's counsel. In its petition, the Debtor
estimated $10 million to $50 million in assets and debts. The
petition was signed by Edward J. Herman, manager.
4200 Pan Am sought joint administration of its case with those of
affiliates Dehler, Furniture By Thurston, and KLN.
The Official Committee of Unsecured Creditors in the Chapter 11
cases of KLN Steel Products Company, LLC, et al., is represented
by Hall Attorneys, P.C. The Committee tapped Navigant Consulting
(PI), LLC as its financial advisor.
LACK'S STORES: Access to Lenders' Cash Collateral Expires June 30
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas, in
an eighth interim order, authorized Lack's Stores, Incorporated,
et al., to use cash collateral of the Senior Lenders (under that
certain Second Amended and Restated Loan and Security Agreement
dated as of July 10, 2007).
The Debtors set a June 27, 2012, final hearing at 2:30 p.m., on
the Debtors' cash collateral motion. Objections, if any, are due
June 20.
As of the Petition Date, the aggregate principal amount
outstanding under the senior credit agreements is alleged to be
approximately $86,600,000 by the Senior Lenders.
The Debtors would use the cash collateral to pay costs and
expenses that arise in the administration of the Debtors' cases,
and in the maintenance and preservation of the Debtors' businesses
and asset value until June 30.
A 15% variance on a line-item basis will be allowed. In addition
to the variance, any amounts listed in the interim budget that are
unused in any week may be carried over and used by the Debtors in
any subsequent week, on a line-item basis.
As adequate protection, The CIT Group / Business Credit, Inc., as
Agent on behalf of the Senior Lenders, is granted valid and
perfected replacement security interests in the Pre-Petition
Collateral and all property acquired by the Debtors after the
Petition Date that is of the exact nature, kind, or character as
the Pre-Petition Collateral.
About Lack's Stores
Victoria, Texas-based Lack's Stores, Incorporated, is one of the
largest, independently-owned retail furniture chains in the United
States. Lack's Stores is a chain of 36 retail stores and operates
under the trade styles Lacks and Lacks Home Furnishings. The
Company sells a complete line of furnishings for the home
including furniture, bedding, major appliances and home
electronics. The stores are located in South, Central, and West
Texas.
Lack's Stores filed for Chapter 11 bankruptcy protection (Bankr.
S.D. Tex. Case No. 10-60149) on Nov. 16, 2010. Daniel C. Stewart,
Esq., Paul E. Heath, Esq., and Michaela C. Crocker, Esq., at
Vinson & Elkins LLP, in Dallas, Tex., assist the Debtor in its
restructuring effort. The Debtor estimated its assets and debts
at $100 million to $500 million.
Clifford A. Katz, Esq., and Sherri D. Lydell, Esq., at Platzer,
Swergold, Karlin Levine, Goldberg & Jaslow, LLP, in New York; and
S. Margie Venus, Esq., at Strong Pipkin Bissell & Legyard, L.L.P.,
in Houston, Tex., represent the Unsecured Creditors Committee as
counsel.
Affiliates Lack Properties, Inc., Lack's Furniture Centers, Inc.,
and Merchandise Acceptance Corporation filed separate Chapter 11
petitions.
LACK'S STORES: Court Approves Settlement with Secured Lenders
-------------------------------------------------------------
The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern
District of Texas approved a settlement and release agreement
between Lack's Stores, Incorporated, et al., and the senior
secured lenders.
The Court also ordered that on the Effective Date, all proofs of
claim filed by the agent or any of the senior lenders in any cases
will be deemed expunged from the claims register maintained in the
cases without further action by the parties or the Court.
About Lack's Stores
Victoria, Texas-based Lack's Stores, Incorporated, is one of the
largest, independently-owned retail furniture chains in the United
States. Lack's Stores is a chain of 36 retail stores and operates
under the trade styles Lacks and Lacks Home Furnishings. The
Company sells a complete line of furnishings for the home
including furniture, bedding, major appliances and home
electronics. The stores are located in South, Central, and West
Texas.
Lack's Stores filed for Chapter 11 bankruptcy protection (Bankr.
S.D. Tex. Case No. 10-60149) on Nov. 16, 2010. Daniel C. Stewart,
Esq., Paul E. Heath, Esq., and Michaela C. Crocker, Esq., at
Vinson & Elkins LLP, in Dallas, Tex., assist the Debtor in its
restructuring effort. The Debtor estimated its assets and debts
at $100 million to $500 million.
Clifford A. Katz, Esq., and Sherri D. Lydell, Esq., at Platzer,
Swergold, Karlin Levine, Goldberg & Jaslow, LLP, in New York; and
S. Margie Venus, Esq., at Strong Pipkin Bissell & Legyard, L.L.P.,
in Houston, Tex., represent the Unsecured Creditors Committee as
counsel.
Affiliates Lack Properties, Inc., Lack's Furniture Centers, Inc.,
and Merchandise Acceptance Corporation filed separate Chapter 11
petitions.
LEO GENTRY: Nursery Files for Chapter 11 Bankruptcy
---------------------------------------------------
Wendy Culverwell at Portland Business Journal reports that Leo
Gentry Wholesale Nursery Inc., doing business as Eagle Creek
Nursery LLC, filed on Feb. 13, 2012, for Chapter 11 bankruptcy in
the U.S. Bankruptcy Court for the District of Oregon, listing
between $10 million and $50 million in debts.
The report says the firm is led by Leo Gentry, president, and is
being represented by Robert Vanden Bos, a Portland attorney with
the firm of Vanden Bos & Chapman LLP.
According to the report, Leo Gentry signaled its intent to
reorganize its debts and emerge as an ongoing business. Leo
Gentry identified nearly $25.6 million in debt to its 20 unsecured
creditors. Northwest Farm Credit Services PCA in Salem is its
largest creditor, owed $23.7 million, of which $9.7 million is
secured.
The report notes that Leo Gentry said it has between $1 million
and $10 million in assets and between 200 and 999 creditors.
The report adds that Judge Randall Dunn presides over the case.
LEXINGTON ROAD: Gets Court Approval to Use Emergency Fund
---------------------------------------------------------
Richard Craver at Winston-Salem Journal reports that Lexington
Road Properties Inc. has received U.S. Bankruptcy Court permission
to access $50,000 in emergency funding from a post-petition
secured line of credit. The money was deemed necessary to keep
paying the company's expenses through Feb. 28, 2012.
The report notes that the company is asking for an additional
$200,000 to help pay for operating and legal expenses, as well as
environmental testing on its properties and repairs to the former
battery plant to make it more marketable for sale or lease.
According to the report, the Company said the filing does not
affect Douglas Battery & Auto Care, a retail-service center with
shops in Winston-Salem and Lexington. It is owned and operated by
Jim Douglas and Joe Jarvis. Mr. Douglas is the president of
Lexington Road.
The report says Douglas Battery Manufacturing acknowledged in
January 2010 that the current economic downturn did what even the
Great Depression couldn't -- end its run as a world-class battery
manufacturer.
Based in Winston-Salem, North Carolina, Lexington Road Properties
Inc., fka Douglas Battery Manufacturing Company, filed for Chapter
11 protection on Jan. 27, 2012 (Bankr. M.D. N.C. Case No.12-
50121). William B. Sullivan, Esq., at Womble Carlvle Sandridqe &
Rice, LLP, represents the Debtor. The Debtor estimated both
assets and debts of between $1 million and $10 million.
LONE STAR ROOFING: Blames Bankruptcy to Staffing, Lender Issues
---------------------------------------------------------------
According to Austin Business Journal, Lone Star Roofing Inc. filed
for Chapter 11 bankruptcy protection after it experienced a
dramatic drop in business when a competitor hired some of its
employees. The Chapter 11 bankruptcy also was precipitated when
the company's lender, Prosperity Bank, declined to renew the
company's debt when it matured and began collecting.
Based in Texas, Lone Star Roofing Inc. filed for Chapter 11
protection on Feb. 1, 2012 (Bankr. W.D. Tex. Case No.12-10199).
Judge H. Christopher Mott presides over the case. Barbara M.
Barron, Esq., and Stephen W. Sather, Esq., at Barron & Newburger,
P.C., represents the Debtor. The Debtor estimated assets of
between $100,000 and $500,000, and debts of between $1 million and
$10 million.
LSP ENERGY: Meeting to Form Creditors' Panel on Feb. 21
-------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold can organizational meeting on Feb. 21, 2012, at 10:00 a.m. in
the bankruptcy case of LSP Energy Limited Partnership, et al. The
meeting will be held at:
J. Caleb Boggs Federal Building
844 King Street, Room 5209
Wilmington DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
LSP Energy Limited Partnership filed a Chapter 11 petition
(Bankr. D. Del. Case No. 12-10460) on Feb. 10, 2012 in Delaware,
Thomas Joseph Francella, Jr., Whiteford Taylor Preston LLC, in
Wilmington, Delaware serves as counsel to the Debtor. The Debtor
estimated up to 500,000,000 in assets and up to 500,000,000 in
liabilities. The petition was signed by Thomas G. Favinger,
president of LSP Energy, Inc., general partner.
MACCO PROPERTIES: Trustee Can Hire Price Edwards as Broker
----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Oklahoma
authorized Michael E. Deeba, Chapter 11 Trustee for Macco
Properties, Inc., to hire Price Edwards & Company as exclusive
listing broker for the property known as the Charter Business
Bank.
About Macco Properties
Oklahoma City, Oklahoma-based Macco Properties, Inc., is a
property management company that is the sole or controlling member
and/or manager of numerous multi-family residential rental units
in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas,
and several and commercial business properties in Oklahoma City,
Oklahoma, and Holbrook, Arizona.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. The Debtor
disclosed $50,823,581 in total assets, and $4,323,034 in total
liabilities.
The Official Unsecured Creditors' Committee is represented by
Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City,
Oklahoma.
MAGLEV INC: Auction Firm Puts Assets Up for Sale March 6
--------------------------------------------------------
Pittsburgh Business Times reports that the assets of Maglev Inc.
have been listed for sale March 6, 2012.
According to the report, Harry Davis & Co., 1725 Boulevard of the
Allies in Pittsburgh, has several hundred items from Maglev on its
auction Web site. Those items include an IGM dual robotic welding
system, robotic cell welding systems, dollies and pallet jacks,
drafting tables and computer work stations, a microscope and
conference table, among others.
The report notes that there are 289 entries in the auction catalog
listed on the site. The auction begins at 10 a.m. March 6, 2012.
Based in McKeesport, Pennsylvania, MAGLEV, Inc., filed for Chapter
11 bankruptcy protection on July 26, 2011 (Bankr. W.D. Penn. Case
No. 11-24685). Christopher M. Frye, Esq., at Steidl & Steinberg,
represents the Debtor. The Debtor estimated assets of less than
$50,000, and debts of between $1 million and $10 million.
MAJESTIC CAPITAL: Files First Amended Chapter 11 Plan
-----------------------------------------------------
BankruptcyData.com reports that Majestic Capital filed with the
U.S. Bankruptcy Court a First Amended Chapter 11 Plan and related
Disclosure Statement.
According to the Disclosure Statement, "The Plan is designed to
(i) facilitate the orderly wind-down of the Debtors and their two
non-debtor insurance company affiliates, (ii) facilitate the
resolution of more than 2000 claims filed against the Debtors in
an orderly and expeditious format and to (iii) provide an
effective mechanism for the distribution of the Debtors assets to
holders of allowed claims."
About Majestic Capital
Headquartered in Poughkeepsie, New York City, Majestic Capital,
Ltd., formerly known as CRM Holdings Ltd., has two wholly owned
subsidiaries, Majestic USA and Twin Bridges, a Bermuda-based
reinsurance company. Twin Bridges and Majestic Insurance, a
downstream subsidiary of Majestic USA are the two principal
insurance companies.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 11-36225) on April 29, 2011.
Affiliates also sought Chapter 11 protection (Bankr. S.D.N.Y. Case
Nos. 11-36221 - 11-36234) on April 29, 2011. The Debtors
retained Murphy & King, P.C. as their general bankruptcy counsel
and Genova & Malin as their local counsel. The Debtors tapped
Michelman & Robinson, LLP, as special counsel, and Day Seckler,
LLP, as accountants and financial advisors. The Debtor disclosed
$436,191,000 in assets and $421,757,000 in liabilities as of
Dec. 31, 2010.
Bruce F. Smith, Esq., and Steven C. Reingold, Esq., at Jager Smith
P.C., represent the Official Committee of Unsecured Creditors.
The Committee has also tapped J.H. Cohn LLP as its financial
advisors.
MARANI BRANDS: GAM Holding Discloses 10.6% Equity Stake
-------------------------------------------------------
GAM Holding Ltd disclosed in an amended Schedule 13G filing with
the U.S. Securities and Exchange Commission that, as of Dec. 31,
2011, it beneficially owns 21,744,440 shares of common stock of
Marani Brands Inc representing 10.67% based on the total of
203,732,172 common shares outstanding. A full-text copy of the
filing is available for free at http://is.gd/9AaQ8W
About Marani Brands
Based in North Hollywood, Calif., Marani Brands, Inc. (OTC BB:
MRIB) primarily engages in the distribution of wine and spirit
products manufactured in Armenia. The Company's signature product
is Marani Vodka, a premium vodka which is manufactured exclusively
for the Company in Armenia.
The Company's balance sheet at March 31, 2010, showed $1,137,841
in assets and $3,188,227 of liabilities, for a stockholders'
deficit of $2,050,386.
As reported in the Troubled Company Reporter on October 19, 2009,
Gruber & Company, LLC, in Saint Louis, Missouri, expressed
substantial doubt about the Company's ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the years ended June 30, 2009, and 2008.
The auditing firm said that the Company's viability is dependent
upon its ability to obtain future financing and the success of its
future operations.
"As of March 31, 2010, the Company has an accumulated deficit of
$19,595,756. The Company's current business plan requires
additional funding beyond its anticipated cash flows from
operations. These and other factors raise substantial doubt about
the Company's ability to continue as a going concern."
The Company notified the U.S. Securities and Exchange Commission
that due to certain events occurring in the Company's third and
fourth quarters, and the complexity of the review required, the
Company is unable to file the Form 10-K for the fiscal year ended
June 30, 2010, by Sept. 28, 2010, without unreasonable effort or
expense.
MASCO CORP: Moody's Says 'Ba2' CFR Unaffected by Charges
--------------------------------------------------------
Moody's commented that charges approximating $644 million during
the fourth quarter of 2011 have no immediate impact on Masco
Corporation's Ba2 Corporate Family Rating or SGL-1 speculative
grade liquidity assessment. For more information please see the
Issuer Comment posted on moody's.com.
The principal methodology used in rating Masco was the Global
Manufacturing Industry Methodology, published December 2010. Other
methodologies used include Loss Given Default for Speculative
Grade Issuers in the US, Canada, and EMEA, published June 2009.
Masco Corporation, headquartered in Taylor, MI, is one of the
largest manufacturers in North America of a number of home
improvement and building products, including faucets, cabinets,
architectural coatings and windows. It is also one of the largest
installers of insulation and other products for the new home
construction market. The Company generally distributes products
through multiple channels including home builders and wholesale
and retail channels. North American operations generated
approximately 75% of its sales. Revenues for 2011 totaled about
$7.5 billion.
MEDICAL BILLING: Inks Registration Rights Agreement with Medtrx
---------------------------------------------------------------
Medical Billing Assistance, Inc., on Feb. 3, 2012, entered into a
registration rights agreement and common stock warrant with Medtrx
Provider Network, LLC. Pursuant to the Warrant, the Company
issued to Medtrx, for services provided between June 6, 2011, and
Dec. 23, 2011, warrants to purchase up to 7,500,000 shares of
common stock at an exercise price of $0.90 for a term of seven
years. Pursuant to the Registration Rights Agreement, the Company
agreed, subject to the applicable rules, regulations and
interpretations of the Securities and Exchange Commission, to:
(a) use its reasonable best efforts to file a registration
statement with the SEC, covering the resale of the shares
of common stock issuable upon exercise of the Warrant
within 30 days of the earlier of (i) the date when the
Company becomes eligible to file a registration statement
on Form S-3 covering the Registrable Securities, or (ii)
five years from the Effective Date; and
(b) cause that registration statement to become and remain
continuously effective until eight years after the
Effective Date.
Pursuant to the Registration Rights Agreement, the Company also
granted to Medtrx "piggyback" registration rights, pursuant to
which the Company agreed to, at any time and from time to time for
a period of eight years commencing on the Effective Date, if the
Company proposes to file a registration statement, provide written
notice to Medtrx of that proposed filing and offer to Medtrx the
opportunity to register the resale of the Registrable Securities
on such registration statement, subject to (a) the applicable
rules, regulations and interpretations of the SEC, and (b) with
respect to an underwritten offering, the Company's right to
exclude any Registrable Securities from a registration statement
if in the sole discretion of the managing underwriter or
underwriters of such underwritten offering, the inclusion of such
Registrable Securities would adversely affect the underwritten
offering.
About Medical Billing
Melbourne, Fla.-based Medical Billing Assistance, Inc., was
incorporated in the State of Colorado on May 30, 2007, to act as a
holding corporation for I.V. Services Ltd., Inc. ("IVS"), a
Florida corporation engaged in providing billing services to the
medical community. IVS was incorporated in the State of Florida
on Sept. 28, 1987.
On Dec. 29, 2010, the Company entered into a Share Exchange
Agreement with FCID Medical, Inc., a Florida corporation and FCID
Holdings, Inc., a Florida corporation, and the shareholders of
FCID. Pursuant to the terms of the Share Exchange Agreement, the
FCID Shareholders exchanged 100% of the outstanding common stock
of FCID for a total of 40,000,000 shares of common stock of the
Company, resulting in FCID Medical and FCID Holdings being 100%
owned subsidiaries of the Company.
All of the Company's operations are conducted out of its wholly-
owned subsidiaries: IVS, FCID Medical and FCID Holdings. The
Company has real estate holdings through FCID Holdings, Inc.,
under which Marina Towers, LLC, is wholly-owned subsidiary.
Ronald R. Chadwick, P.C., in Aurora, Colo., expressed substantial
doubt about 's ability to continue as a going concern, following
the Company's 2010 results. Mr. Chadwick noted that the Company
has a working capital and stockholders' deficit.
The Company's balance sheet at Sept. 30, 2011, showed
$6.70 million in total assets, $7.79 million in total liabilities,
and a $1.08 million total stockholders' deficit.
MERCER INT'L: Moody's Says Fibrek Offer No Impact on 'B2' CFR
-------------------------------------------------------------
Moody's Investors Service said that Mercer International, Inc.'s
B2 Corporate Family Rating and positive rating outlook are not
immediately impacted by the company's offer to acquire all
outstanding shares of pulp producer Fibrek Inc. (B2, stable) for
CND$1.30 per share, or about CND$170 million.
Based in Washington with corporate offices in Vancouver, British
Columbia, Mercer International, Inc. is a producer of northern
bleached softwood kraft pulp. Moody's ratings cover only the
Restricted Group comprised of the Celgar Mill in western Canada
and the Rosenthal Mill in eastern Germany. The Stendal Mill in
eastern Germany is not included in the restricted group and has
significant non-recourse project financing debt. Annual production
capacity for the Restricted Group is approximately 850 thousand
air-dried metric tons. Mercer generated approximately EUR511
million of revenue for the twelve months ended September 30, 2011.
MF GLOBAL: Corporate "Personhood" Issue to Be Heard
---------------------------------------------------
On March 6, 2012, the controversial legal principle of
"corporations are 'persons'" will be raised and argued before a
Federal Bankruptcy Court in the ongoing MF Global bankruptcy case.
Adam Furgatch, a former MF Global client, filed a motion that asks
the Court to treat MF Global Holdings, Ltd. as a "person" instead
of a corporation. The Court has since placed the motion to be
heard on the docket and on the Court calendar.
The Furgatch Motion asserts that because the U.S. Supreme Court
has ruled that corporations are to be treated as "persons", then
the "parent" company, MF Global Holdings, by definition, must have
a "child" company, MF Global, Inc., the subsidiary brokerage whose
customers are still missing at least $1.2 billion in segregated
funds. The filing then cites clear, specific statutes in the
Bankruptcy Code that mandate that a child's support claims shall
have super-priority status over all other unsecured creditors.
"The Chapter 11 bankruptcy laws apply equally to corporations and
individuals," said Mr. Furgatch in a recent interview. "If,
instead of a corporation, the MF Global Brokerage is treated as
the Child Person of the Parent Company Person, then the statute on
priority status for unsecured creditors' claims is unambiguous.
It's right there in U.S.C. Title 11, Section 507. Spousal and
child support obligations come first, before all other creditors'
claims."
Mr. Furgatch therefore concludes that "If corporations are
persons, JP Morgan Chase and all other unsecured creditors of the
parent will just have to get in line...the Child comes first."
The filing also asks the bankruptcy judge to order the "Parent
Company Person" trustee, Mr. Louis Freeh, to immediately release
from the parent company's declared $41 Billion in assets, all
child support funds necessary to restore the stricken, injured
"Brokerage Child Person" to wholeness and health.
The Furgatch Motion cites Bankruptcy Code statutes that support
the judge's power to grant this request for immediate release of
trustee-controlled assets. The child support funds being asked
for include the reported $1.2 Billion or more in customer
segregated funds that have yet to be returned to the ex-MF Global
Brokerage customers. Mr. Furgatch, a resident of Hawaii, is
currently missing at least 30% of his pre-bankruptcy MF Global
account funds.
The federal judge presiding in the case, Martin Glenn, is expected
to promptly consider the motion and make a ruling.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- is one of the world's leading brokers of commodities and
listed derivatives. MF Global provides access to more than 70
exchanges around the world. The firm is also one of 22 primary
dealers authorized to trade U.S. government securities with the
Federal Reserve Bank of New York. MF Global's roots go back
nearly 230 years to a sugar brokerage on the banks of the Thames
River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-
15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities. It is easily the largest bankruptcy filing so
far this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
MFGH's subsidiaries MF Global Capital LLC, MF Global FX
Clear LLC and MF Global Market Services, LLC filed for bankruptcy
protection on December 19, 2011.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by MF Global Holdings and other insolvency and
bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
NATIONAL HOLDINGS: Kacy Rozelle Appointed to Board of Directors
---------------------------------------------------------------
The Board of Directors of National Holdings Corporation appointed
Kacy R. Rozelle to the Board pursuant to a Securities Purchase
Agreement, dated Jan. 11, 2006, between the Company and St. Cloud
Capital, LLC, whereby St. Cloud is entitled to submit a reasonably
acceptable nominee to the Company to be elected to the Board. Mr.
Rozelle will serve as a Class I director until his term expires at
the 2014 annual meeting of stockholders, at which time he will
stand for reelection by the Company's stockholders. The Company
has not yet appointed Mr. Rozelle to any Board committees.
Mr. Rozelle is a co-founder and Managing Director of St. Cloud, a
Los Angeles-based private equity manager focused on providing
expansion capital to the lower-middle market. Mr. Rozelle has
been involved with nearly every aspect of St. Cloud's day-to-day
operating activities and portfolio management functions since the
firm was founded over ten years ago. Mr. Rozelle's middle and
lower-middle market corporate finance and investment banking
experience also includes an additional ten years at Jefferies &
Company, Inc., where he served as a member of the firm's Taxable
Fixed Income Executive Committee, and where he participated in the
structuring and placement of more than $40 billion of securities,
including more than $10 billion of public and private equity. Mr.
Rozelle began his career at Houlihan Lokey Howard and Zukin, a Los
Angeles-based investment bank, where he assisted on a wide range
of services for middle market companies including mergers and
acquisitions, financial opinions and valuation and advisory
agreements. Mr. Rozelle currently serves on the Board of
Directors of: San Francisco AutoReturn LLC; SAFE Security, Inc.,
and Johnson Products Company, Inc. Mr. Rozelle is also an active
member of the Santa Monica Bay Chapter of the Young Presidents
Organization (YPO) and serves on the City of Los Angeles
Department of Recreation and Parkers, Palisades Park Advisory
Board. Mr. Rozelle earned an MBA from the University of Texas at
Austin and a BS in Finance from Virginia Tech.
On March 31, 2008, and June 30, 2008, the Company entered into two
loans in the aggregate principal amount of $6,000,000 with St.
Cloud as lender, of which all $6,000,000 remains outstanding.
Through holdings in St. Cloud, Mr. Rozelle is party to the loans.
As of Feb. 9, 2012, the Company had paid $2,175,000 in cumulative
interest on the loans since inception, at a rate of 10%. Mr.
Rozelle holds a less than 25% stake in the indebtedness.
About National Holdings
New York, N.Y.-based National Holdings Corporation is a financial
services organization, operating primarily through its wholly
owned subsidiaries, National Securities Corporation, Finance
Investments, Inc., and EquityStation, Inc. The Broker-Dealer
Subsidiaries conduct a national securities brokerage business
through their main offices in New York, New York, Boca Raton,
Florida, and Seattle, Washington.
Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial
doubt about National Holdings' ability to continue as a going
concern. The independent auditors noted that the Company has
incurred significant losses and has a working capital deficit as
of Sept. 30, 2011.
The Company reported a net loss of $4.7 million on $126.5 million
of total revenues for fiscal 2011, compared with a net loss of
$6.6 million on $111.0 million on total revenues for fiscal 2010.
The Company's balance sheet at Sept. 30, 2011, showed
$16.4 million in total assets, $17.8 million in total liabilities,
and a stockholders' deficit of $1.4 million.
NEVADA CANCER: Taps Meade & Roach to Handle CMS and HHS Issue
-------------------------------------------------------------
Nevada Cancer Institute seeks the permission of the U.S.
Bankruptcy Court for the District of Nevada to employ Meade &
Roach, LLP, as the Debtor's special counsel, nunc pro tunc to
Jan. 23, 2012.
The Debtor engaged M&R prepetition to assist the Debtor in
identifying and reconciling the receipt of certain possible
overpayments from the Center for Medicare and Medicaid Services
("CMS"), and in self-reporting the results of its inquiry to the
Department of Health and Human Services ("HHS") in July 2011. The
Debtor did not receive any response to its report until recently,
when it was contacted by HHS to discuss the matter. The Debtor
seeks to employ M&R to continue handling this discrete matter on
behalf of the Debtor.
Given the discrete nature of the engagement and the relatively
small amount of fees likely to be generated, the Debtor seeks to
compensate M&R on its monthly invoices without further application
or order of the Court, subject to a cumulative cap of $75,000.
In light of the nature of the Debtor's mission and nonprofit
status, M&R has agreed to discount its hourly rates. Ryan Meade
and Brian Annulis are the partners expected to be most active in
this case. Their current hourly rate is $495, but for this
engagement M&R has agreed to bill only $450 per hour. Likewise,
Lynn Asher and Chris Fleck are the consultants expected to be most
active in this case. Their current hourly rates are $325 and $250
per hour, but for this engagement M&R has agreed to bill only $280
and $215 per hour, respectively
M&R represented the Debtor prepetition and was paid for those
services in the ordinary course of business. As of the Petition
Date, however, M&R was owed $20,991 on account of services
rendered to the Debtor prepetition. M&R has agreed to waive that
prepetition balance.
To the best of the Debtor's knowledge, M&R and its staff are
disinterested persons who do not hold or represent an interest
adverse to the estate and do not have any connection either with
the Debtor, its creditors, or any other party in interest in this
case or with their respective attorneys or accountants, or with
any judge of the U.S. Bankruptcy Court for the District of Nevada,
the United States Trustee, or any person employed in the Office of
the United States Trustee except in certain matters.
About Nevada Cancer
Founded in 2002, Nevada Cancer Institute is a nonprofit cancer
institute committed to advancing the frontiers of knowledge of
cancer and reducing the burden of cancer on the people of Nevada.
The Debtor previously operated and maintained a state-of-the-art
outpatient cancer treatment and research facility in the Summerlin
community of Las Vegas (the "Flagship Building") and provided
comprehensive management services to physicians employed by the
oncology medical group, Ruckdeschel Manno, Ltd. dba Nevada Cancer
Institute Medical Group (the "Medical Group," and together with
the Debtor, "NVCI"). This cancer treatment facility was
designated by the State of Nevada as the State's official cancer
institute.
Nevada Cancer Institute filed for bankruptcy (Bankr. D. Nev. Case
No. 11-28676) on Dec. 2, 2011, blaming mounting financial
pressures arising from the protracted decline in the economy,
decreases in medical reimbursement rates from managed care payor
entities, increases in operational costs, decreases in the amount
and availability of charitable donations, a reduction in research
funding opportunities and increased competition. Lisa Madar
signed the petition as secretary.
Chief Bankruptcy Judge Mike K. Nakagawa oversees the case.
Michael L. Tuchin, Esq., Martin R. Basrash, Esq., and Courtney E.
Pozmantier, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP; and
Robert M. Charles, Jr., Esq., and Dawn M. Cica, Esq., at Lewis and
Roca LLP, represent the Debtors as bankruptcy counsel. Kurtzman
Carson Consultants LLC serves as the Debtor's claims and
noticing agent. Alvarez & Marsal Healthcare Industry Group LLC
serves as the Debtor's restructuring advisors.
Robert J. Feinstein, Esq., Samuel R. Maizel, Esq., and Shirley s.
Cho., at Pachulski Stang Ziehl & Jones LLP, represents the
Official Committee of Unsecured Creditors as counsel. Lenard E.
Schwartzer, Esq., and Jeanette e. McPherson, Esq., at Schwartzer &
McPherson Law Firm, represents the Committee as local counsel.
The Debtor underwent a significant prepetition operational
restructuring, and, after commencing this case, sold the Flagship
Building to the Regents of the University of California on behalf
of its UC San Diego Health System in a Court-approved sale
pursuant to Bankruptcy Code section 363 that closed on Jan. 31,
2012.
Counsel for Bank of America, N.A., as agent for the prepetition
lenders, are Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at
Pillsbury Winthrop Shaw Pittman LLP.
The Regents of the University of California on behalf of its UC
San Diego Health System, is represented by James W. Kapp, III,
Esq., and Gary B. Gertler, Esq., at McDermott Will & Emery.
NORTHERN BERKSHIRE: Carl Marks Financial Services Expanded
----------------------------------------------------------
The Hon. Henry J. Boroff of the U.S. Bankruptcy Court for the
District of Massachusetts expanded the scope of employment of Carl
Marks Advisory Group LLC as Northern Berkshire Healthcare, Inc.'s
financial advisor.
As reported in the Troubled Company Reporter on Dec. 19, 2011,
upon retention, the firm's scope will include:
(a) assisting the Debtors' management in a comprehensive update
and refinement of the Debtors' financial model and
financial projections and interfacing with the Debtors'
secured bondholders, the Official Committee of Unsecured
Creditors, and their respective financial advisors
regarding the same; and
(b) taking a lead role in negotiations with the bondholders
regarding acceptable terms for a consensual plan of
reorganization.
The Court previous entered an order approving the Debtors' request
to hire Carl Marks Advisory Group as financial advisor in
accordance with the terms and conditions set forth in the
Financial Advisory Agreement.
The Financial Advisory Agreement provides that CMAG will render
certain postpetition professional services to the Debtors
described therein, including services with respect to a
prospective reorganization, sale, merger, or disposition of the
Debtors' assets or any portion thereof in one or more
transactions. The Financial Advisory Agreement further provides
that Mark L. Claster and Christopher K. Wu, partners at CMAG, will
lead the team of professionals at CMAG with respect to providing
the Financial Advisory Services and be available to and serve as
the principal contacts for R&G and the Debtors. Finally, the
Financial Advisory Agreement provides that the Debtors will pay
certain fees to CMAG as compensation for rendering the
Financial Advisory Services to the Debtors, including a fixed
monthly fee of $50,000.
In conjunction with this increased role, the Debtors will increase
the amount of the fixed monthly fee from $50,000 to $77,500.
Christopher K. Wu, partner of Carl Marks Advisory, attests that
the firm is a "disinterested person," as that term is defined in
section 101(14) of the Bankruptcy Code.
About Northern Berkshire Healthcare
Northern Berkshire Healthcare, Inc. is a non-profit healthcare
corporation in northern Berkshire County, Massachusetts. Together
with its affiliates, Northern Berkshire Healthcare operates the
North Adams Regional Hospital and a visiting nurse association and
hospice in North Adams, Massachusetts.
Northern Berkshire Healthcare, Inc., North Adams Regional
Hospital, Inc., Visiting Nurse Association & Hospice of Northern
Berkshire, Inc., Northern Berkshire Healthcare Physicians Group,
Inc., and Northern Berkshire Realty, Inc., filed for Chapter 11
bankruptcy (Bankr. D. Mass. Case No. 11-31114) on June 13, 2011,
to address their overleveraged balance sheet and effect a
reorganization of their operations. On the same day, Northern
Berkshire Community Services, Inc., filed a petition for Chapter 7
relief also in the District of Massachusetts bankruptcy court.
Judge Henry J. Boroff presides over the Debtors' cases. Steven T.
Hoort, Esq., James A. Wright, III, Esq., Jonathan B. Lackow, Esq.,
and Matthew F. Burrows, Esq., at Ropes & Gray LLP, in Boston,
Mass., serve as the Debtors' bankruptcy counsel. The Debtors'
Financial Advisors are Carl Marks Advisory Group LLC. GCG Inc.
serves as claims and noticing agent.
Northern Berkshire disclosed $22,957,933 in assets and
$53,379,652 in liabilities as of the Chapter 11 filing. The
petition was signed by William F. Frado, Jr., president.
William K. Harrington, the U.S. Trustee for Region 1, appointed
five members to the official unsecured creditors' committee in the
Debtors' cases. The Committee tapped Duane Morris LLP as its
counsel.
NUVEEN INVESTMENT: Moody's Assigns Caa1 Rating to $500-Mil. Loan
----------------------------------------------------------------
Moody's Investors Service has assigned B2 and Caa1 ratings to
Nuveen Investment, Inc.'s proposed $500 million extended first
lien term loan facility due May 2017 and a new $500 million senior
secured term loan facility due 2019 respectively, Both have a
positive outlook.
Nuveen Investment, Inc's plan to extend the maturity of $500
million of its scheduled $1.1 billion 2014 debt maturities to May
2017 and issue a new $500 million second lien term loan facility
due May 2019 to refinance its existing $500 million second lien
term loan facility due July 2015. The transactions do not affect
Nuveen's B3 corporate family or debt ratings or positive outlook.
RATINGS RATIONALE
Nuveen's B3 Corporate Family rating reflects the company's weak
financial fundamentals, characterized by high financial leverage,
marginal interest coverage and refinancing risk relative to other
Moody's-rated asset managers. Also incorporated in the rating is
Nuveen's good market position, adequate liquidity profile and
strong distribution capabilities. The company's refinancing and
deleveraging strategy is also reflected in the B3 rating.
The positive outlook reflects Nuveen's strengthening brand and
positive momentum in its operating fundamentals with Moody's
expectations for further improvement in financial credit metrics.
The company's intention to proactively address upcoming maturities
in the next two years with equity or debt refinancing is also
considered in the positive outlook.
Nuveen's ratings could be upgraded if the company removes the
refinancing risk associated with its 2014 and 2015 debt
maturities, particularly the 10.5% senior unsecured notes due in
2015, within the next year. That said, the company's current
ratings and outlook would come under negative pressure if the
likelihood of refinancing or debt reduction decreases over the
next year or if the positive trends in Nuveen's operating
fundamentals deteriorate.
Ratings assigned, all with positive outlooks, include:
$500 million extended first lien term loan due 2017 at B2
$500 million second lien term loan facility due 2019 at Caa1
Rating affirmed, all with positive outlooks, include:
Corporate Family Rating of B3
$193 million senior secured revolver at B2
$1.087 billion senior secured first lien loan due 2014 at B2
$1.057 billion senior secured first lien loan due 2017 at B2
$280 million senior secured incremental term loan due 2017 at B2
$500 million senior secured second lien loan due 2015 at Caa1
$935 million senior unsecured notes due 2015 at Caa2
$300 million senior unsecured notes due 2015 at Caa2
Nuveen Investments, Inc., headquartered in Chicago, is a US-
domiciled holding company whose subsidiaries provide investment
management products and services to retail and institutional
investors predominantly in the US. The company's assets under
management were $220 billion as of December 31, 2011.
The last rating action was on May 18, 2011, when Moody's upgraded
Nuveen's corporate family rating to B3 from Caa1 and debt ratings
of Nuveen Investments, Inc. by one notch. Positive outlooks were
maintained on all ratings.
The principal methodology used in rating Nuveen Investments, Inc.
was Moody's Global Rating Methodology for Asset Management Firms,
published in October 2007, which can be found at www.moodys.com in
the Credit Policy & Methodologies directory, in the Ratings
Methodologies sub-directory under the Research & Ratings tab.
Other methodologies and factors that may have been considered in
the process of rating Nuveen Investments, Inc. can also be found
in the Rating Methodologies sub-directory on Moody's website.
OCEAN PLACE: Seeks Further Cash Collateral Access Thru Feb. 29
--------------------------------------------------------------
Ocean Place Development LLC asks the U.S. Bankruptcy Court for the
District of New Jersey seeks a brief extension of AFP 104 Corp.'s
cash collateral use in accordance with a budget through Feb. 29,
2012.
In return for the short extension, the Debtor will continue to
provide AFP with adequate protection.
The Debtor says that while it was hopeful AFP would consent to a
further use of the cash collateral through February 2012, AFP has
declined the request through a Jan. 27, 2012 e-mail.
The Debtor states that its request relates to events that have
occurred over the last few months. The Debtor filed a bankruptcy
plan in mid-July 2011, however, upon AFP's opposition to the plan,
the Court sua sponte terminated the Debtor's exclusivity period.
AFP then filed its own plan in September 2011. Thus, two
competing plans are before the Court and is now scheduled for
confirmation hearing in late January to early February 2012.
The Debtor anticipates a Court ruling on the plans in February
2012 and thus, needs additional access to the cash collateral
pending approval of a Chapter 11 plan in its case.
About Ocean Place Development
Ocean Place Development, LLC, owns a beachfront resort property in
Long Branch, New Jersey. The Ocean Place resort is sited on 17-
acres featuring 1,000 feet of ocean frontage and is improved with
a 254-room hotel that includes 40,000 square feet of meeting
space, three restaurants, a bar/lounge, a full-service spa, and
numerous resort amenities. It employs between 95 and 340
employees, depending upon the season, through the property
management entity West Paces Hotel Group, LLC.
Ocean Place filed a voluntary Chapter 11 petition (Bankr. D. N.J.
Case No. 11-14295) on Feb. 15, 2011. Kenneth Rosen, Esq., John K.
Sherwood, Esq., and Wojciech F. Jung, Esq., at Lowenstein Sandler,
in Roseland, N.J., serves as the Debtor's bankruptcy counsel. The
Debtor estimated its assets and debts at $50 million to
$100 million.
As of the petition date, the Debtor owed $57,245,372 to AFP 104
Corp. pursuant to a Loan Agreement dated April 25, 2006, as
amended from time to time, entered into by and between the Debtor
as borrower and Barclays Capital Real Estate Inc. as lender.
Joseph L. Schwartz, Esq., and Kevin J. Larner, Esq., at Riker,
Danzig, Scherer, Hyland & Perretti LLP, in Morristown, New Jersey,
represents AFP 104 as counsel.
OLD CORKSCREW: Plan Solicitation Period Extended Until March 23
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extended, according to the case docket, until March 23, 2012, Old
Corkscrew Plantation LLC, et al.'s exclusive period to solicit
acceptances for the proposed Plan of Reorganization.
As reported in the Troubled Company Reporter on Jan. 12, 2012, the
Debtors submitted a Disclosure Statement explaining the proposed
Plan dated as of Dec. 5, 2011, the Court approved filing deadline.
According to the Disclosure Statement, the Plan provides for the
continued ownership and operation of the property of the Debtors'
estates. If the Debtors' request to be substantively consolidated
is granted and the Plan is confirmed by the Bankruptcy Court,
then, on the Effective Date of the Plan and, except as expressly
provided in the Plan, the property of each The primary source of
the funds necessary to implement the Plan initially will be the
funding under the DIP Loan of the Debtors' estates will be
consolidated and will vest in the Reorganized Debtor, and the
Reorganized Debtor will thereafter own and manage the Property and
implement the terms of the Plan, including making distributions of
cash and property to Holders of Allowed Claims, as applicable.
Further, the Plan provides for cash payments to Holders of Allowed
Claims in certain instances.
The primary source of the funds necessary to implement the Plan
initially will be the funding under the DIP Loan. At the present
time, the Debtors believe that the Reorganized Debtor will have
sufficient funds as of the Effective Date through funding of the
DIP Loan to pay in full the expected payments required under the
Plan, including to the Holders of Allowed Administrative Claims,
Allowed Priority Claims, and DIP Lender Allowed Claims. Cash
payments to be made under the Plan after the Effective Date to the
Holders of Allowed Unsecured Claims will be derived from the
operations of Reorganized Debtor.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/OLD_CORKSCREW_ds.pdf
About Old Corkscrew Plantation
Fort Myers, Florida-based Old Corkscrew Plantation LLC, whose
oranges are made into Minute Maid and Tropicana juice, filed
for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-14559) on
July 29, 2011, disclosing $25,264,047 in assets and $60,751,633 in
debts. Old Corkscrew sought Chapter 11 protection along with its
affiliates. Donald G. Scott, Esq., -- dscott@mcdowellrice.com --
at McDowell, Rice, Smith & Buchanan, in Kansas City, Missouri,
serves as the Debtors' bankruptcy co-counsel. Berger Singerman,
P.A., serves as their bankruptcy counsel. Arcadia Citrus
Enterprises, Inc., serves as manager of their citrus growing
properties. Kapila & Company serves as chief restructuring
officer. The Debtors' orange groves are valued at $24 million.
Scott Westlake, the Debtors' managing member, signed the petition.
Mr. Westlake is also listed as the Debtors' largest unsecured
creditor, with $4,827,906 owed. Another $338,511 debt is owed to
Scott and Vicki Westlake.
No trustee or examiner has been appointed in this Chapter 11 case.
An official committee of unsecured creditors was appointed and is
represented by counsel.
OVERLAND STORAGE: Austin Marxe Discloses 19.9% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Austin W. Marxe and David M. Greenhouse
disclosed that, as of Dec. 31, 2011, they beneficially own
3,190,389 common shares and warrants to purchase 5,967,193 common
shares of Overland Storage, Inc., representing 19.99% of the
shares outstanding. A full-text copy of the filing is available
for free at http://is.gd/msG7Iz
About Overland Storage
San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) --
http://www.overlandstorage.com/-- is a global provider of unified
data management and data protection solutions designed to enable
small and medium enterprises (SMEs), corporate departments and
small and medium businesses (SMBs) to anticipate and respond to
change.
The Company reported a net loss of $14.50 million on $70.19
million of net revenue for the fiscal year ended June 30, 2011,
compared with a net loss of $12.96 million on $77.66 million of
net revenue during the prior fiscal year.
Moss Adams LLP, in San Diego, California, noted that the Company's
recurring losses and negative operating cash flows raise
substantial doubt about the Company's ability to continue as a
going concern.
PACIFIC MONARCH: Court OKs Lesley Thomas as Tax Accountants
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
permits Pacific Monarch Resorts, Inc. and its debtor affiliates to
hire Lesley, Thomas, Schwarz & Postma, Inc. as tax and vacation
ownership points accountants effective as of Oct. 24, 2011.
The Troubled Company Reporter related on Feb. 8, 2012, that among
other things, Lesley Thomas will (i) prepare the federal and
corporate tax returns of the Debtors, and (ii) examine the
schedules of changes in vacation ownership points available for
the three months ended Dec. 31, 2011, for the purpose of
expressing an opinion as to whether the schedules of changes in
Points available are presented fairly, in connection with the
Debtors' asset purchase agreement with DPM Acquisition, LLP.
About Pacific Monarch
Pacific Monarch Resorts, Inc., and its affiliated debtors operate
a "timeshare business" business. The Debtors filed voluntary
Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 11-24720)
on Oct. 24, 2011, disclosing $100 million to $500 million in both
assets and debts. The affiliated debtors are Vacation Interval
Realty Inc., Vacation Marketing Group Inc., MGV Cabo LLC,
Desarrollo Cabo Azul, S. de R.L. de C.V., and Operadora MGVM S. de
R.L. de C.V.
Based in Laguna Hills, California, Pacific Monarch and its
affiliates generate revenue primarily from the sale and financing
of "vacation ownership points" in a timeshare program commonly
known and marketed as "Monarch Grand Vacations," a multi-location
vacation timeshare program that establishes a uniform plan for the
development, ownership, use and enjoyment of specified resort
accommodations for the benefit of its members. MGV is a nonprofit
mutual benefit corporation whose members are timeshare owners, and
it is administered by a board of directors elected by MGV members.
As of the Petition Date, MGV owned Resort Accommodations within
these resorts: Palm Canyon Resort (Palm Springs), Riviera Oaks
Resort & Racquet Club (Ramona), Riviera Beach & Spa Resort -
Phases I and II (Dana Point), Riviera Shores Beach (Dana Point),
Cedar Breaks Lodge (Brian Head), Tahoe Seasons Resort (South Lake
Tahoe), Desert Isle of Palm Springs (Palm Springs), the Cancun
Resort (Las Vegas), and the Cabo Azul Resort (Los Cabos, Mexico).
Future Vacation Accommodations are currently in the pre-
development stage in Kona, Hawaii and Las Vegas, Nevada.
Additionally, the Cabo Azul Resort has construction in progress on
two buildings.
The Pacific Monarch entities do not include the entities that
actually own the timeshare properties that have been dedicated to
use by the purchasers of timeshare points. The trusts that own
the properties are not liable for the Pacific Monarch entities'
obligations.
MGV is not a debtor.
Judge Erithe A. Smith presides over the jointly administered
cases. Lawyers at Stutman, Treister & Glatt PC, in Los Angeles,
serve as counsel to the Debtors. The petition was signed by Mark
D. Post, chief executive officer and director.
Houlihan Lokey Capital, Inc., serves as investment baker to the
Debtors. Raymond J. Gaskill, Esq., represents the Debtors as
special timeshare counsel. Greenberg, Whitcombe & Takeuchi, LLP,
serves as the Debtors' special counsel for employment and labor
matters. Lesley, Thomas, Schwarz & Postma, Inc., serves as the
Debtors' tax and vacation ownership points accountants. White &
Case LLP is the Debtors' special tax counsel.
Attorneys at Brinkman Portillo Ronk, PC, serve as counsel to the
Official Committee of Unsecured Creditors.
Creditor Ikon Financial Services is represented by Christine R.
Etheridge. Creditor California Bank & Trust is represented in the
case by Michael G. Fletcher at Frandzel Robins Bloom & Csato, L.C.
Marshall F. Goldberg, Esq. at Glass & Goldberg argues for creditor
Fifth Third Bank. Creditor The Macerich Company is represented by
Brian D. Huben, Esq. at Katten Muchin Rosenman LLP. Interested
Party DPM Acquisition is represented by Joshua D. Wayser, Esq. at
Katten Muchin Rosenman LLP.
PEAK BROADCASTING: Rabobank Says Acceptances Not in Good Faith
--------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Rabobank International, a
secured lender in Peak Broadcasting LLC's Chapter 11 case that has
been withholding support of Peak's restructuring plan, filed a
motion asking the court to disallow certain acceptance votes,
saying they weren't made in good faith.
On the Petition Date, the Debtors filed a Joint Plan of
Reorganization and a related disclosure statement. The Plan is
the product of extensive good-faith, arm's length negotiations
between the Debtors and their primary stakeholders, including
General Electric Capital Corporation, for itself and as agent for
the Debtors' prepetition first lien lenders, and Oaktree Capital
Management, L.P., a key First Lien Lender. GE, Oaktree and their
affiliates own 75% in the aggregate of the outstanding first lien
debt claims.
The Debtors also negotiated the terms of the Plan with members of
the Debtors' Senior Second Lien Lenders and Junior Second Lien
Lenders. The lenders' support for the Plan is evidenced by the
Restructuring Support Agreement, dated Oct. 12, 2011 and as
amended on Dec. 30, 2011. The Plan preserves the Debtors'
business as a going concern, and provides for the consensual
elimination of roughly $85 million to $90 million in prepetition
secured debt. The Restructuring Support Agreement, as amended,
requires the Debtors to consummate the Plan by no later than Feb.
29, 2012 to prevent the Debtors from languishing in bankruptcy.
The Plan calls for the transfer of the Debtors' broadcasting and
other licenses issued by the Federal Communications Commission to
a trust and the appointment of a trustee.
Cooperative Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank
International", New York Branch, the only lender to vote against
the prepackaged Chapter 11 plan, objected to the combined hearing.
Rabobank, citing a 2005 Third Circuit ruling in Congoleum Corp.'s
case, noted that "Pre-packaged plans offer a means of expediting
the bankruptcy process by doing most of the work in advance of
filing. That efficiency, however, must not be obtained at the
price of diminishing the integrity of the process." In re Century
Indemnity Co. v. Congoleum Corp. (In re Congoleum Corp.) 426 F.3d
675, 693 (3d Cir. 2005).
Rabobank said the Debtors' Combined Hearing Motion represents the
Debtors' attempt to rush the Court, under the pretext of
expediency but with no real justification, towards confirmation of
a prepackaged plan which, among other things (i) proposes
impermissible "gifts" to junior creditor classes in contravention
of In re Armstrong World Indus., Inc. 432 F.3d 507 (3d Cir. 2005);
(ii) fails to adequately disclose or justify the retention and
compensation of certain management insiders that will continue to
be employed post-confirmation by the reorganized debtor; (iii)
contains improper non-debtor, third party releases; and (iv)
proposes to treat Rabobank differently than other claimants in its
class.
Rabobank is represented by Brian E. Farnan, Esq., at Farnan LLP,
in Wilmington, Delaware, and Charles A. Beckham, Jr., Esq., and
Christopher L. Castillo, Esq., at Haynes and Boone LLP, in
Houston, Texas.
About PEAK Broadcasting
PEAK Broadcasting LLC, in Fresno, California, filed for Chapter 11
bankruptcy (Bankr. D. Del. Lead Case No. 12-10183) on Jan. 10,
2012. PEAK Broadcasting, founded in 2006-2007, operates radio
stations in Fresno, California, and Boise, Idaho.
Several affiliates also sought Chapter 11 protection: Peak
Broadcasting of Fresno LLC; Peak Broadcasting of Boise LLC; Peak
Broadcasting of Fresno Licenses LLC; and Peak Broadcasting of
Boise Licenses LLC. In its petition, Peak Broadcasting estimated
$50 million to $100 million in assets and debts. The petition was
signed by Todd Lawley, CEO and managing member.
PEAK Broadcasting filed together with the petition a prepackaged
plan of reorganization. The plan provides for payments to the
Company's employees, vendors and other unsecured creditors, and
for the business to continue in the ordinary course with no
disruption. Judge Peter Walsh, who oversees the case, set a
hearing to confirm the prepack plan for Feb. 23.
Sheppard, Mullin, Richter & Hampton LLP serves as the Debtors'
Chapter 11 counsel. Pachulski Stang Ziehl & Jones LLP serves as
their Chapter 11 local counsel. Edinger Associates serves as
special counsel with matters involving the Debtors' Federal
Communications Commission licenses.
PERPETUAL ENERGY: S&P Affirms Long-Term 'B' Corp. Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Alberta-
based Perpetual Energy Inc. to negative from stable. At the same
time, Standard & Poor's affirmed its 'B' long-term corporate
credit and 'B-' senior unsecured debt ratings on the company. The
'5' recovery ratings on the notes is unchanged.
"The outlook revision reflects our expectation that Perpetual's
cash flow will continue to deteriorate through 2012, due to
sustained weak natural gas prices, lack of high-priced gas hedges,
and the company's high levered costs," said Standard & Poor's
credit analyst Aniki Saha-Yannopoulos. "As of Feb. 10, 2012, spot
AECO gas prices were C$2.23 per thousand cubic feet. At the same
time, gas hedges put in place range from C$2.20-C$3.72 per
gigajoule, which we expect to limit cash flow. At our price deck,
we expect Perpetual to exit 2012 with debt-to-EBITDAX above 6x and
less-than-adequate liquidity. In addition, the company's C$75
million convertibles C mature in June 2012, which it plans
to settle with asset sales and borrowings under the revolver, if
necessary, and could stress its less-than-adequate liquidity."
"The ratings reflect what Standard & Poor's views as the company's
limited and small reserve base, meaningful exposure to low natural
gas prices, worsening credit measures, and less-than-adequate
liquidity. In addition, we base the ratings on Perpetual's
operations in a highly cyclical, capital-intensive, and
competitive industry. The ratings also reflect our view of the
company's growth prospects from the Mannville heavy oil play. As
of Sept. 30, 2011, Perpetual had about C$715 million in adjusted
debt, which includes C$75 million in convertible debentures
maturing June 2012 and asset-retirement obligations," S&P said.
"The company's geographic diversity is limited and we don't expect
it to improve materially in the near term. As of 2011, Perpetual
had a small reserve base of approximately 235 billion of cubic
feet equivalent (gross, 88% natural gas, 84% proved developed).
Its proved reserve life is 4.6 years and proved developed reserve
life at 3.9 years, which is shorter than those of its land-focused
peers (5-7 years). We expect the company's production to decline
5%-15% through 2012, due to its budgeted C$65 million capital plan
for 2012 being lower than its maintenance capital of C$85 million.
Perpetual's production for third-quarter 2012 was about 135.5
million cubic feet equivalent per day; its production is mostly
from its shallow conventional natural gas assets in Alberta,
especially in the eastern district," S&P said.
"The negative outlook reflects Standard & Poor's concern that
Perpetual's credit measures will continue to deteriorate due to
weak natural gas prices. We assume the company will continue
focusing on increasing its liquids production, while funding capex
and convertible maturity through cash flow and asset sales. The
outlook also incorporates our expectations that Perpetual's
financial metrics will remain weak through 2012 and it will
maintain its liquidity (about C$60 million). Given the company's
reserves and production, there is little likelihood of an upgrade
during the period of weak natural gas prices. A negative rating
action could occur if debt-to-EBITDA deteriorates above 6.5x
million due to operational issues or if its liquidity (cash on
hand and availability under the revolver) decreases below C$25
million, should Perpetual need to settle the convertibles through
borrowings under the revolver," S&P said.
PISTOL PETE'S: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------------
Elaine Rose at pressofAtlanticCity reports that Pistol Pete's
Steakhouse & Saloon filed on Feb. 9, 2012, for Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court for the
District of New Jersey and remains open under supervision of a
bank manager.
The report, citing papers filed with the court, says the Company
estimated debts between $500,000 and $1 million, and assets
between $100,000 and $500,000.
According to the report, the court deemed the application
incomplete because it did not list the 20 largest unsecured
creditors and other financial information.
Peter Quarelli owns Pistol Pete's. According to the report, Mr.
Quarelli took over the former Press Box bar and opened it as
Pistol Pete's Beef 'n' Beer in November 1998. It became Pistol
Pete's Steakhouse & Saloon in November 2003, and made some changes
to the menu and decor at the time.
PRECISION DRILLING: S&P Affirms 'BB+' Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
corporate credit and senior unsecured debt ratings on Calgary,
Alta.-based Precision Drilling Corp. The outlook is stable. The
'4' recovery rating on the company's senior unsecured debt is
unchanged. Standard & Poor's also removed the ratings from
CreditWatch with negative implications, where they were placed
Nov. 1, 2011. "The '4' recovery rating reflects our expectation of
modest (30%-50%) recovery in a default scenario," S&P said.
"Although we expect persistently weak natural gas prices that have
fallen below the full cycle break-even costs for many producers
will adversely affect near-term natural gas drilling activity, we
believe Precision's long-term contracts provide good visibility to
its revenues and cash flows through our 2012 and 2013 ratings
forecast period. In our view, the company's contracts in place
provide a measure of certainty regarding its prospective operating
cash flow; therefore, we believe its cash flow protection metrics
and capital structure will remain within the ranges we have
established for the 'BB+' rating, despite our expectation of
negative free cash flow generation as the company continues to
reposition its rig fleet through its accelerated new build
program," S&P said.
"We acknowledge the strategic importance of Precision's rig new
build program, as reconfiguring its rig fleet should enable the
company to maintain its market share in the WCSB and U.S. markets
where it operates; however, we believe the company will outspend
its cash flows as it continues to bolster its tier 1 and 2 fleet
size and repositions its rig fleet to better meet future
exploration and development needs," said Standard & Poor's credit
analyst Michelle Dathorne. "Although we expect the company's
leverage will increase in 2012 and 2013, we believe Precision's
financial risk profile should continue to support the 'BB+'
rating," Ms. Dathorne added.
"The ratings on Precision reflect Standard & Poor's opinion of the
company's participation in the cyclical and highly volatile
oilfield services sector, the diminished cash flow generation
profile associated with the persistently weak outlook for
conventional natural gas exploration and production, and
Precision's capital structure. We believe that offsetting these
factors, which hamper the company's overall credit profile, are
its good cost management, the size and geographic diversification
of its drilling and service rig fleet, and the large number of
rigs with deep drilling capabilities in the U.S. and Western
Canada's Sedimentary Basin (WCSB) markets," S&P said.
"Precision operates in North America's principal oil and gas
basins, notably the WCSB. The company also has land rigs
positioned in several high-growth markets in the U.S. With its
current fleet consisting of 339 drilling and 187 service rigs, and
20 snubbing units, the company has one of North America's largest
land drilling rig fleets. Although we expect the pace of tier 1
and 2 rig additions will lag the decommissioning of the company's
tier 3 rigs, we believe Precision will retain its market leading
position in the WCSB," S&P said.
"The stable outlook reflects Standard & Poor's expectation that
Precision will maintain its financial risk profile, specifically
its cash flow protection metrics, at levels we view as appropriate
for the 'BB+' rating. We believe the company's accelerated pace of
new build activity indicates a shift away from its historically
moderate financial policies, because we anticipate it will
generate negative free cash flow during our forecast period as it
spends to reconfigure its rig fleet. We believe Precision should
be able to temper possible market share erosion as it replaces its
tier 3 rigs with the higher complexity tier 1 and 2 rigs, which
are better suited to develop unconventional oil and gas resources.
Based on the long-term contracts in place, we expect the company
should be able to maintain its fully adjusted FFO-to-debt above
35%. In our view, the debt and cash-flow generation underpinning
this metric supports the 'BB+' rating. If operating cash flow
falls below our expectations, and FFO-to-debt decreases below 30%,
we will lower the rating to 'BB'. As we expect capital spending
will remain elevated through our 2012 and 2013 forecast period, we
do not expect Precision will be able to reduce debt levels and
move its financial risk profile into the intermediate category,
which would be required to support a 'BBB-' rating. Nevertheless,
if Precision is able to maintain its fully adjusted FFO-to-debt
in the 45%-50% range in a midcycle industry environment, we would
raise the rating," S&P said.
QUANTUM FUEL: Settles WB QT $700,000 Promissory Note in Shares
--------------------------------------------------------------
Quantum Fuel Systems Technologies Worldwide, Inc.'s senior secured
lender, WB QT, LLC, made a payment demand of $700,000 on the
promissory note. The Company, pursuant to the terms of the
Consent Fee Note, as amended on Feb. 10, 2012, elected to settle
the payment demand in shares. The Company will deliver 735,000
shares of its common stock to WB QT in settlement of the $700,000
payment demand on or before Feb. 14, 2012.
On Feb. 10, 2012, the Company and WB QT entered into an Agreement
and Amendment to, among other things, amend the terms of the
Consent Fee Note. The material amendments to the Consent Fee Note
are:
1. The Company can settle payment demands using shares of its
common stock as long as the volume weighted average price
per share for the three trading days preceding a payment
demand is at least $0.95. Prior to the execution of the
Agreement and Amendment, the VWAP had to be at least $2.00
per share in order for the Company to have the right to
settle a payment demand in shares.
2. After taking into account the $700,000 payment demand, the
aggregate amount of payment demands that WB QT can make
prior to April 10, 2012, is limited to $600,000.
3. With respect to the $700,000 payment demand and for the next
$600,000 of payment demands, a deemed VWAP price of $0.9524
per share will be used to determine the number of shares
to be delivered in settlement of the payment demand if the
Company's elects to settle the demand in shares.
After settlement of the $700,000 payment demand, the remaining
balance due on the Consent Fee Note is $1,690,000.
A full-text copy of the Agreement and Amendment is available for
free at http://is.gd/8PNkkq
About Quantum Fuel
Based in Irvine, California, Quantum Fuel Systems Technologies
Worldwide, Inc., is a fully integrated alternative energy company
and considers itself a leader in the development and production of
advanced clean propulsion systems and renewable energy generation
systems and services.
Quantum Fuel and its senior lender, WB QT, LLC, entered into a
Ninth Amendment to Credit Agreement and a Forbearance Agreement on
Jan. 3, 2011. The Senior Lender agreed to provide the Company
with a $5.0 million non-revolving line of credit, which may be
drawn upon at any time prior to April 30, 2011. Advances under
the New Line of Credit do not bear interest -- unless an event of
default occurs, in which case the interest rate would be 10% per
annum -- and mature on April 30, 2011. The Senior Lender also
agreed to forbear from accelerating the maturity date for any
portion of the Senior Debt Amount and from exercising any of its
rights and remedies with respect to the Senior Debt Amount until
April 30, 2011.
The Company reported a net loss attributable to stockholders of
$11.03 million on $20.27 million of total revenue for the year
ended Apri1 30, 2011, compared with a net loss attributable to
stockholders of $46.29 million on $9.60 million of total revenue
during the prior year.
The Company reported a net loss attributable to stockholders of
$16.26 million on $19.77 million of total revenue for the six
months ended Oct. 31, 2011, compared with a net loss attributable
to stockholders of $3.06 million on $7.44 million of total revenue
for the same period a year ago.
The Company's balance sheet at July 31, 2011, showed
$74.15 million in total assets, $31.62 million in total
liabilities, and $42.53 million total stockholders' equity.
Ernst & Young LLP, in Orange County, California, noted that
Quantum Fuel's recurring losses and negative cash flows combined
with the Company's existing sources of liquidity and other
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
Possible Bankruptcy
The Company anticipates that it will need to raise a significant
amount of debt or equity capital in the near future in order to
repay certain obligations owed to the Company's senior secured
lender when they mature. As of June 15, 2011, the total amount
owing to the Company's senior secured lender was approximately
$15.5 million, which includes approximately $12.5 million of
principal and interest due under three convertible promissory
notes that are scheduled to mature on Aug. 31, 2011, and a $3.0
million term note that is potentially payable in cash upon demand
beginning on Aug. 1, 2011, if the Company's stock is below $10.00
at the time demand for payment is made. If the Company is unable
to raise sufficient capital to repay these obligations at maturity
and the Company is otherwise unable to extend the maturity dates
or refinance these obligations, the Company would be in default.
The Company said it cannot provide any assurances that it will be
able to raise the necessary amount of capital to repay these
obligations or that it will be able to extend the maturity dates
or otherwise refinance these obligations. Upon a default, the
Company's senior secured lender would have the right to exercise
its rights and remedies to collect, which would include
foreclosing on the Company's assets. Accordingly, a default would
have a material adverse effect on the Company's business and, if
the Company's senior secured lender exercises its rights and
remedies, the Company would likely be forced to seek bankruptcy
protection.
RAILAMERICA INC: Moody's Assigns 'B1' Rating to Term Loan B
-----------------------------------------------------------
Moody's Investors Service changed the ratings outlook of
RailAmerica, Inc. to positive from stable in consideration of
strong operating performance at the company's railroads that has
led to an improvement in credit metrics, and an expectation for
stable revenue growth and gradual de-leveraging over the near
term. At the same time, Moody's has assigned a B1 rating to the
company's proposed $585 million term loan B, due 2019.
Moody's confirmed RailAmerica's Corporate Family Rating of B1 and
the Speculative Grade Liquidity Rating of SGL-3.
RATINGS RATIONALE
RailAmerica's positive ratings outlook incorporates Moody's
expectations for steady but modest revenue growth that tracks slow
economic growth in the US. Moody's also expects that RailAmerica
will be able to sustain operating margins in excess of 20% through
2013, while generating moderate levels of free cash flow over the
next few years. This should allow the company to repay modest
amounts of debt over the next 12-18 months, improving credit
metrics to levels that could support upward rating movement.
Moreover, the contemplated refinancing of substantially all of its
senior debt outstanding, whereby high coupon senior notes will be
replaced by lower cost bank debt, will materially lower
RailAmerica's interest expense. This will further improve the
company's interest coverage and cash flow over the near term.
The B1 Corporate Family Rating reflects RailAmerica's high debt
levels relative to its size, tempered by expectation that leverage
will moderate as macroeconomic factors affecting freight movements
in the company's service area improve. Moody's anticipates that
freight volumes at RailAmerica, which fell modestly in 2011 due
primarily to reduced coal and agricultural shipments, will resume
growth at a moderate pace through 2012, similar to trends expected
in the entire railroad sector. Pricing is also expected to improve
gradually over this time. This will result in modest revenue and
margin growth over the near term. Improving profitability, coupled
with lower interest expense associated with the 2012 refinancing
of senior notes, is expected to result in credit metrics that
compare well against issuer in the B1 to Ba3 rating range. Moody's
expects that RailAmerica will generate moderate levels of positive
free cash flow over the next few years, which should allow the
company to repay a modest amount of debt over that time.
Alternatively, cash flow generated should allow the company to
undertake modest acquisitions or light levels of share
repurchases, with no material impact on leverage or liquidity.
Moody's also considers positively, management's ability to deliver
core pricing improvements over the last several years, much as the
larger Class I railroads have done over this time. This supports
expectations that the company will be able to maintain its
relatively strong operating margins going forward.
RailAmerica intends to use proceeds from the new term loan B to
redeem, via tender offer, a significant portion of its existing
senior secured notes due 2017. Guarantors and security provided
under the new term loan facility are similar to those of the
company's existing senior notes, although the proposed term loan
includes provisions for certain financial covenants and mandatory
prepayments. The refinancing will help to lower interest costs.
but will also increase the company's floating interest rate
exposure.
The ratings could be raised if the company can sustain solid
revenue growth while maintaining operating margins in excess of
20% and generating positive free cash flow. Specifically,
sustaining credit metrics such as Debt to EBITDA of less than 4
times or EBIT to Interest in excess of 2 times could warrant
upward rating consideration. A ratings upgrade would also require
the company to maintain a strong liquidity profile, while
undertaking only a modest amount of share repurchases.
Given the company's strengthening trend in credit metrics and
expectations for strong demand in the freight rail sector, it is
unlikely that the ratings would be lowered over the near term.
However, the ratings could face downward revision if there is an
unexpected weakening in freight demand over the near term,
resulting in deteriorating pricing to accompany falling volumes.
Moody's believes that operating margins that fall below 15% for a
prolonged period of time during such a period of depressed
revenues could result in a significant drop in free cash flow, and
materially hinder the company in its ability to reduce debt
through discretionary prepayments. The return to weaker credit
metrics such as Debt to EBITDA in excess of 5.0 times or EBIT to
Interest below 1.5 times could result in a lower ratings
considerations. Ratings could also be lowered if the company
increases its share repurchase policies to levels that exceed free
cash flow, particularly if the company were to take on additional
debt to finance share repurchases.
Assignments:
Issuer: RailAmerica, Inc.
-- Senior Secured Bank Credit Facility, Assigned B1, LGD3, 49%
Outlook Actions:
Issuer: RailAmerica, Inc.
-- Outlook, Changed To Positive From Stable
The principal methodology used in rating RailAmerica was the
Global Freight Railroad Industry Methodology published in March
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.
RailAmerica, Inc., headquartered in Jacksonville, Florida, owns
and operates a portfolio of 43 short-line and regional railroads
throughout the U.S. and Canada.
REAL ESTATE ASSOC: John McGrath Resigns as Partnership CEO
----------------------------------------------------------
AIMCO/Bethesda Holdings, Inc., a wholly-owned subsidiary of AIMCO,
entered into a management agreement with a third party management
services company for the management of a portfolio of
approximately 147 properties with 10,184 units held by entities,
including Real Estate Associates Limited VII, in which Bethesda
Holdings has minority limited and general partner interests. On
Jan. 31, 2012, Bethesda Holdings also entered into an option
agreement with the management company pursuant to which it granted
the company the exclusive option, for a period ending on Dec. 27,
2013, to purchase Bethesda Holdings' minority interests in the
portfolio. AIMCO expects the sale of those interests to be
completed later this year, pending the satisfaction of certain
closing conditions.
In connection with the transactions, effective Feb. 6, 2012, Mr.
John McGrath has resigned as the equivalent of the chief executive
officer of the Partnership. To fill this vacancy, the sole member
of the corporate general partner of the Partnership has appointed
Mr. John Bezzant. Effective Feb. 7, 2012, Mr. Bezzant will serve
as an Executive Vice President of the corporate general partner of
the Partnership and the equivalent of the chief executive officer
of the Partnership. In January 2011, Mr. Bezzant was appointed
Executive Vice President, Transactions of Apartment Investment and
Management Company, the ultimate parent company of the
Partnership's general partner, where he is responsible for
portfolio management and analytics, disposition and acquisition
activities, and asset management of the affordable portfolio. He
joined AIMCO as Senior Vice President - Development in June 2006.
Prior to joining AIMCO, from 2005 to 2006, Mr. Bezzant was a First
Vice President at Prologis, a Denver, Colorado-based real estate
investment trust, and from 1986 to 2005, Mr. Bezzant served as
Vice President, Asset Management at Catellus Development
Corporation, a San Francisco, California-based real estate
investment trust.
About Real Estate Associates
Real Estate Associates Limited VII is a limited partnership which
was formed under the laws of the State of California on May 24,
1983. On February 1, 1984, the Partnership offered 2,600 units
consisting of 5,200 limited partnership interests and warrants to
purchase a maximum of 10,400 additional limited partnership
interests through a public offering managed by E.F. Hutton Inc.
The Partnership received $39,000,000 in subscriptions for units of
limited partnership interests (at $5,000 per unit) during the
period from March 7, 1984 to June 11, 1985.
The Partnership will be dissolved only upon the expiration of 50
complete calendar years -- December 31, 2033 -- from the date of
the formation of the Partnership or the occurrence of various
other events as specified in the Partnership agreement. The
principal business of the Partnership is to invest, directly or
indirectly, in other limited partnerships which own or lease and
operate Federal, state and local government-assisted housing
projects.
The general partners of the Partnership are National Partnership
Investments Corp., a California Corporation, and National
Partnership Investments Associates II. The business of the
Partnership is conducted primarily by NAPICO, a subsidiary of
Apartment Investment and Management Company, a publicly traded
real estate investment trust.
The Partnership holds limited partnership interests in 11 local
limited partnerships as of both March 31, 2010, and December 31,
2009. The Partnership also holds a general partner interest in
Real Estate Associates IV, which, in turn, holds limited
partnership interests in nine additional Local Limited
Partnerships; therefore, the Partnership holds interests, either
directly or indirectly through REA IV, in twenty (20) Local
Limited Partnerships. The general partner of REA IV is NAPICO.
The Local Limited Partnerships own residential low income rental
projects consisting of 1,387 apartment units at both March 31,
2010, and December 31, 2009. The mortgage loans of these projects
are payable to or insured by various governmental agencies.
The Company also reported a net loss of $645,000 on $0 of revenue
for the nine months ended Sept. 30, 2011, compared with net income
of $457,000 on $0 of revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $1.30
million in total assets, $21.22 million in total liabilities and a
$19.92 million total partners' deficit.
REGIONS FINANCIAL: Moody's Affirms 'Ba3' Senior Unsecured Rating
----------------------------------------------------------------
Moody's Investors Service changed the rating outlook for Regions
Financial Corporation and its subsidiaries, including its lead
bank, Regions Bank (long-term deposits Ba1) to stable from
negative. At the same time, Moody's affirmed their ratings,
including Regions Financial Corporation's Ba3 senior unsecured
rating and Regions Bank's D+ unsupported bank financial strength
rating mapping to Ba1 on the long-term scale, long-term deposits
of Ba1, and Not-Prime short-term rating.
RATINGS RATIONALE
Moody's said the outlook change reflects the reduction in Regions'
risk concentrations and signs of stabilization in its asset
quality. Specifically, commercial real estate (CRE) and home
equity (HE) have come down 31% and 8%, respectively, from the
prior-year end. Signs of stabilization in asset quality are
reflected in the declining amount of criticized and classified
loans as well as the reduced inflows of new nonaccrual assets
which were down 33% in 2011.
For positive ratings pressure to emerge, Moody's would need to see
a significant reduction in the level of nonperforming assets
(NPAs, including 90+ and accruing TDRs) as well as improved
earnings. While Regions' pre-provision, pre-tax income is in line
with similarly-rated US banks, Regions' net income is weaker
reflecting its asset quality challenges. Regions' NPAs remain
elevated at 7.91% of loans plus OREO at December 31, 2011. This
remains Regions' primary credit challenge.
Moody's last rating action on Regions was on February 28, 2011
when the holding company's senior rating was confirmed at Ba3 and
the bank's long-term deposits were confirmed at Ba1 and a negative
outlook was assigned.
The principal methodologies used in rating this issuer were
Moody's "Bank Financial Strength Ratings: Global Methodology",
published in February 2007, "Incorporation of Joint-Default
Analysis into Moody's Bank Ratings: A Refined Methodology",
published in March 2007, and "Moody's Guidelines for Rating Bank
Hybrid Securities and Subordinated Debt", published in November
2009. These methodologies are available on http://www.moodys.com
in the Ratings Methodologies sub-directory under the Research &
Ratings tab. Other methodologies and factors that may have been
considered in the process of rating this issuer can also be found
in the Rating Methodologies sub-directory on Moody's website.
Regions Financial Corporation headquartered in Birmingham,
Alabama, reported total assets of $127.1 billion at December 31,
2011.
Outlook Actions:
Issuer: AmSouth Bancorporation
-- Outlook, Changed To Stable From Negative
Issuer: AmSouth Bank
-- Outlook, Changed To Stable From Negative
Issuer: Regions Asset Management Company, Inc.
-- Outlook, Changed To Stable From Negative
Issuer: Regions Bank
-- Outlook, Changed To Stable From Negative
Issuer: Regions Financial Corporation
-- Outlook, Changed To Stable From Negative
Issuer: Regions Financing Trust II
-- Outlook, Changed To Stable From Negative
Issuer: Regions Financing Trust III
-- Outlook, Changed To Stable From Negative
Issuer: Union Planters Bank, National Association
-- Outlook, Changed To Stable From Negative
Issuer: Union Planters Preferred Funding Corp.
-- Outlook, Changed To Stable From Negative
RITE AID: Moody's Assigns 'Caa3' Rating to $480-Mil. Sr. Notes
--------------------------------------------------------------
Moody's Investors Service assigned a Caa3 rating to Rite Aid
Corporation proposed $480 million senior guaranteed notes due
2020. All other ratings including its Caa2 Corporate Family
Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative
Grade Liquidity rating were affirmed. The rating outlook is
stable.
The proceeds of the proposed $480 million senior guaranteed notes
will be used to repay the 8.625% senior guaranteed notes due 2015.
Following the repayment, the senior notes will be retired and its
Caa3 rating withdrawn.
This rating is assigned
$480 million senior guaranteed notes due 2020 at Caa3 (LGD 5, 82%)
This rating will be withdrawn upon their repayment
8.625% senior guaranteed notes due 2015 at Caa3 (LGD 5, 80%)
These ratings are affirmed and LGD point estimates changed
Corporate Family Rating at Caa2
Probability of Default Rating at Caa2
First-lien bank credit facilities at B3 (LGD 2, to 26% from 25%)
First-lien senior secured notes at B3 (LGD 2, to 26% from 25%)
Second-lien secured notes at Caa2 (LGD 4, to 57% from 55%)
Guaranteed senior notes at Caa3 (LGD 5, to 82% from 80%)
Senior notes and debentures at Ca (LGD 6, 95%)
Speculative Grade Liquidity rating at SGL-3
RATINGS RATIONALE
Rite Aid's Caa2 Corporate Family Rating reflects its weak credit
metrics and unsustainable capital structure with debt to EBITDA of
8.8 times and EBITA to interest expense of 0.8 times. Although
Moody's believes that Rite Aid earnings will benefit from
Walgreen's dispute with Express Scripts as well as from the strong
generic pipeline, Moody's anticipates that lower reimbursement
rates will offset some of this positive earnings pressure. Thus,
Moody's forecasts that Rite Aid's credit metrics will remain weak.
In addition, Rite Aid faces a tradeoff between the need to address
its sizable 2014 and 2015 debt maturities against the likelihood
that any refinancing will be at a higher interest rate. Should
Rite Aid successfully refinance its 2014 and 2015 debt maturities,
its borrowing costs will likely increase further weakening Rite
Aid's interest coverage. Consequently, Moody's is concerned that
Rite Aid may choose to voluntarily restructure its debt over the
medium term.
However, positive ratings consideration is given to Rite Aid's
adequate liquidity which provides it with runway to address its
debt maturities. Positive ratings consideration is also given to
Rite Aid's large revenue base and the solid opportunities of the
prescription drug industry.
The stable outlook acknowledges Rite Aid's adequate liquidity and
lack of near dated debt maturities. Rite Aid's next significant
debt maturity is in 2014 when the remaining $1 billion of term
loans is due. In addition, the stable outlook reflects Moody's
expectation that Rite Aid's earnings will modestly improve but
that the improvement will not meaningfully improve its credit
metrics.
A higher rating would require that Rite Aid demonstrate that it
can maintain EBITDA less capital expenditures to interest expense
of at least 1.0 time while reducing absolute debt to levels that
create a capital structure that is more sustainable over the
longer term. In addition, a higher rating would require Rite Aid
to continue to maintain adequate liquidity.
Rite Aid's ratings could be lowered if the company experiences a
decline in earnings or liquidity, should free cash flow become
persistently negative, or should the probability of default
increase including by way of a distressed exchange.
The principal methodology used in rating Rite Aid Corporation was
the Global Retail Industry Methodology published in June 2011.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Rite Aid Corporation, headquartered in Camp Hill, Pennsylvania,
operates about 4,800 drug stores in 31 states and the District of
Columbia. Revenues are about $26 billion.
RITE AID: S&P Assigns 'CCC' Rating to $481-Mil. Sr. Unsec. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' issue-level
rating and '6' recovery rating to the company's $481 million
senior unsecured guaranteed notes due 2020. "The recovery rating
reflects our expectation for negligible (0% to 10%) recovery in
the event of a default. At the same time, we affirmed all other
ratings on the company, including our 'B-' corporate credit
rating. Rite Aid will use proceeds from the debt issue to
refinance its existing $459 million senior unsecured guaranteed
notes due March 2015," S&P said.
"The ratings reflect our expectation that Camp Hill, Pa.-based
retail drugstore chain Rite Aid Corp.'s financial risk profile
will remain 'highly leveraged', despite improving sales trends,
due to its significant debt," said Standard & Poor's credit
analyst Ana Lai.
"In our base case, we forecast debt leverage will remain very
high, at about 9x in fiscal 2012 (ending February 2012), with
liquidity remaining 'adequate,' given our expectations for
positive free cash flow and substantial availability under its
revolving credit facility," S&P said.
"The outlook on Rite Aid is stable, reflecting our expectation
that liquidity remain adequate, with no significant near-term debt
maturities and an improvement in cash flow generation, if
operating performance is within our base case assumptions. We
could lower our rating if cash flow generation weakens because of
underperformance and credit metrics deteriorate such that EBITDA
interest coverage approaches 1x. This could result from sales
decreasing about 3% from our fiscal 2013 forecast and margin
declining 50 basis points," S&P said.
"Although unlikely in the near term, we would consider a higher
rating if the company is successful at turning around its store
performance, thereby increasing profitability and cash flow, with
credit metrics strengthening such that leverage falls to less than
7x. This could occur if revenue outperforms our fiscal 2013
forecast by increasing 5% or better while gross margin increases
50 bps," S&P said.
ROCK-TENN: Moody's Assigns 'Ba1' Rating to Sr. Unsecured Notes
--------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Rock-Tenn
Company's proposed senior unsecured notes due 2019 and 2022. In
addition, the ratings on the company's 2013 senior notes were
raised to Ba1 from Ba2 and the company's Ba1 corporate family
rating and the Ba2 2016 senior notes rating were affirmed. The
company's SGL-2 liquidity rating remains unchanged and the rating
outlook is stable. The proposed refinancing is essentially
leverage neutral, however, it will increase Rock-Tenn's financial
flexibility as proceeds will be used to eliminate a significant
portion of the company's secured debt and provide a slight
improvement in the company's debt maturity profile.
RATINGS RATIONALE
The proposed notes are senior unsecured obligations of Rock-Tenn
and are rated Ba1, consistent with the company's corporate family
rating. The proceeds from the proposed note offering will be used
to prepay the company's term loan B facility ($746 million). Upon
the repayment of the term loan B facility, it is expected that all
of the liens securing the company's existing credit facilities
(unrated) and 2013 senior notes will be released. The proposed
2019 and 2022 notes, the 2013 senior notes and the credit facility
contain a provision such that the liens will be automatically
reinstated in the event that the company's credit ratings are
downgraded beyond an established threshold. The Ba2 rating on the
2016 senior notes reflects a larger expected loss since these
notes do not benefit from this provision. The company intends to
redeem the 2016 notes on March 15, 2012 using the borrowings under
the company's new term loan A-2 facility. The ratings are subject
to the conclusion of the proposed transaction and Moody's review
of final documentation.
Downgrades:
Issuer: Rock-Tenn Company
-- Senior Unsecured Regular Bond/Debenture, Downgraded to 88 ?
LGD5, LGD5, 88 % from 87 - LGD5, LGD5, 87 %
Upgrades:
Issuer: Rock-Tenn Company
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1,
LGD3, 43% from Ba2, LGD5, 71%
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1,
LGD3, 43% from Ba2, LGD5, 71%
Assignments:
Issuer: Rock-Tenn Company
-- Senior Unsecured Regular Bond/Debenture, Assigned a range of
43 - LGD3 to Ba1
-- Senior Unsecured Regular Bond/Debenture, Assigned a range of
43 - LGD3 to Ba1
Rock-Tenn's Ba1 corporate family rating reflects the company's
leading market position in corrugated and consumer packaging and
the expectation of continued good operating and financial
performance as the company integrates the recent Smurfit-Stone
Container Corporation acquisition. The rating also reflects the
benefits of the combined operating platform and the balance of
fiber sourcing between recycled and virgin fiber. These benefits
are partially constrained by the company's adjusted leverage
position that is expected to be weaker than many of its industry
peers over the near term. While income tax efficiencies and
synergies are expected to be realized, this may be offset in the
near term by the requirement to fund the company's significant
pension liability and the investments required to optimize the
company's expanded mill system. In addition, higher than normal
input costs such as recycled fiber, energy, and chemical costs,
during an anticipated flat pricing environment may impede the
speed in which the company is able to de-lever.
The SGL-2 liquidity rating indicates good liquidity supported
primarily with approximately $1.1 billion of availability (as of
December 31, 2011) through a $1.475 billion revolving credit
facility that matures in May 2016 and Moody's expectations of
approximately $150 million of free cash flow over the next four
quarters. In addition, as of December 31 2011, Rock-Tenn had $41
million of cash and essentially no availability under a $625
million borrowing-base receivables facility which matures in May
2014. The company has modest debt maturities of $161 million over
the next year and Moody's expects Rock-Tenn will remain in
compliance with its financial covenants over the near term.
The stable rating outlook primarily reflects Moody's expectation
that Rock-Tenn will successfully integrate and optimize Smurfit-
Stone Container Corporation. Upward rating pressure may result
should Moody's assessment of (RCF-CapEx)/Adjusted Debt be
sustained above 12% and adjusted debt to EBITDA below 3 times. A
downgrade might be associated with deterioration in market demand
or pricing. Should Moody's expectations of normalized (RCF-
CapEx)/Adjusted Debt decline below 7% or total adjusted debt to
EBITDA exceed 4 times, a downgrade would be considered.
The principal methodology used in rating Rock-Tenn was the Global
Paper and Forest Products Industry Methodology published in
September 2009.
Headquartered in Norcross, Georgia, Rock-Tenn Company is a leading
North American integrated manufacturer of corrugated and consumer
packaging, primarily focused on the manufacturer of
containerboard, recycled paperboard, bleached paperboard,
packaging products and merchandising displays. The company
operates facilities in the United States, Canada, Mexico, Chile,
Argentina, Puerto Rico and China. Proforma for the May 2011
acquisition of Smurfit-Stone Container Corporation, the company
has annual sales of approximately $10 billion.
SALON MEDIA: E. Hambrecht & R. Ellis Resign from Board
------------------------------------------------------
The Board of Directors of Salon Media Group, Inc., accepted the
resignations of Elizabeth Hambrecht and Robert Ellis as members of
the Board of Directors of the Company. Neither Ms. Hambrecht nor
Mr. Ellis resigned as a result of any disagreement with the
Company on any matter relating to the Company's operations,
policies or practices. Mr. Ellis also resigned from his position
as member of the Board's Audit Committee.
Effective as of Feb. 9, 2012, to fill one of the two vacancies
created by the foregoing resignations, the Board of Directors of
the Company appointed William Hambrecht as a member of the Board.
As of Feb. 13, 2012, the Board of Directors consists of John
Warnock, Deepak Desai, George Hirsch, James Rosenfield, David
Talbot and William Hambrecht.
Mr. Hambrecht, age 76, founded the San Francisco-based financial
services firm WR Hambrecht + Co in 1998 and serves as its Chairman
and Co-Chief Executive Officer. Prior to WR Hambrecht + Co, he
co-founded and led Hambrecht & Quist, which specialized in
investing in Silicon Valley companies. Mr. Hambrecht has served
as a director for numerous private and public corporations. He is
also the Founder of the United Football League, a new professional
outdoor football league, which premiered in October 2009. In
October 2006, Mr. Hambrecht was inducted into the American Academy
of Arts and Sciences. He also was appointed to the board of the
Presidio Trust by President Barack Obama in 2010. Mr. Hambrecht
graduated from Princeton University in 1957.
About Salon Media
San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB)
-- http://www.Salon.com/-- is an online news and social
networking company and an Internet publishing pioneer.
The Company reported a net loss attributable to common
stockholders of $2.58 million on $4.57 million of net revenues for
the year ended March 31, 2011, compared with a net loss
attributable to common stockholders of $4.86 million on
$4.29 million of net revenues during the prior year.
The Company also reported a net loss of $1.54 million on
$1.95 million of net revenues for the six months ended Sept. 30,
2011, compared with a net loss of $1.34 million on $2.52 million
of net revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$1.57 million in total assets, $11.97 million in total liabilities
and a $10.40 million total stockholders' deficit.
Burr Pilger Mayer, Inc., in San Francisco, California, Salon's
independent registered public accounting firm for the years ended
March 31, 2009, 2010, and 2011, included a "going-concern" audit
opinion on the consolidated financial statements for those years.
As reported by the TCR on July 4, 2011, Burr Pilger expressed
substantial doubt about the Company's ability to continue as a
going concern following the fiscal 2011 results. The independent
auditors noted that the Company has suffered recurring losses and
negative cash flows from operations and has an accumulated deficit
of $108.4 million at March 31, 2011.
SEQUENOM INC: BlackRock Discloses 6% Equity Stake
-------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, BlackRock, Inc., disclosed that, as of
Dec. 30, 2011, it beneficially owns 5,977,467 shares of common
stock of Sequenom, Inc., representing 6.02% of the shares
outstanding. As previously reported by the TCR on April 13, 2011,
BlackRock disclosed beneficial ownership of 10,163,943 common
shares. A full-text copy of the amended filing is available for
free at http://is.gd/0ObFrN
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."
SEQUENOM INC: William Edwards Holds 5.4% Equity Stake
-----------------------------------------------------
William Leland Edwards and his affiliates disclosed in a Schedule
13G filing with the U.S. Securities and Exchange Commission that,
as of Dec. 31, 2011, they beneficially own 5,368,410 shares of
common stock of Sequenom Inc. representing 5.4% of the shares
outstanding. A full-text copy of the filing is available for free
at http://is.gd/ZjKZSG
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."
SFVA INC: Officials Intend to Submit Plan Next Week
---------------------------------------------------
WTOP.com reports that the State Fair of Virginia officials said
they plan to present a proposal next week to allow it to keep The
Meadow Event Park in Caroline County and continue operating.
The report relates that a lawyer for the corporation that runs the
annual event has until March 7 deadline to submit a financing
plan.
WTOP, citing report from the Richmond Times-Dispatch, says that
lender group is owed about $75.6 million. Under a proposed
agreement, the lender group must accept the deal or they can take
over two financial accounts containing a total $20 million. The
money would be used to help pay off the debt.
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.
SNOKIST GROWERS: Creditors Committee Taps Kimel Law as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
case of Snokist Growers asks the U.S. Bankruptcy Court for the
Eastern District of Washington for permission to retain Kimel Law
Offices as its counsel.
The hourly rate of Metiner G. Kimel is $225.
The firm has not received a retainer in relation to the services
to be rendered.
About Snokist Growers
Headquartered in Yakima, Washington Snokist Growers --
http://www.snokist.com/-- is a century-old cooperative of fruit
growers. Snokist provides fresh and processed pears, apples,
cherries, plums, and nectarines.
Snokist Growers filed for Chapter 11 bankruptcy (Bankr. E.D. Wash.
Case No. 11-05868) on Dec. 7, 2011, with plans to liquidate after
sales couldn't recover from allegations that it violated food-
safety rules. Judge Frank L. Kurtz presides over the case.
Lawyers at Bailey & Busey LLC serve as the Debtor's counsel. In
its petition, the Debtor scheduled $69,567,846 in assets and
$73,392,906 in liabilities. The petition was signed by Jim Davis,
president.
Counsel for lender Rabo AgriFinance, as agent for itself and
KeyBank, is James Ray Streinz, Esq. -- rays@mcewengisvold.com --
at McEwen Gisvold, LLP. Counsel for KeyBank National Association
is Bruce W. Leaverton, Esq., at Lane Powell, P.C., in Seattle.
Robert D. Miller Jr., the United States Trustee for Region 14,
appointed three unsecured creditors to serve on the Official
Committee of Unsecured Creditors of Snokist Growers.
The Committee is represented by:
Metiner G. Kimel, Esq.
KIMEL LAW OFFICES
1115 W. Lincoln Ave., Suite 105
Yakima, WA 98902
Tel: (509) 452-1115
STARWOOD HOTELS: S&P Raises Corporate Credit Rating From 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior unsecured ratings on Stamford, Conn.-based Starwood Hotels
& Resorts Worldwide Inc. to 'BBB-' from 'BB+' The rating outlook
is stable.
"The upgrade reflects our belief that the risk of a U.S. recession
has reduced sufficiently (our economist reduced the risk to 25%
from 30% on Feb. 10, 2012) that a decline in hotel room demand in
the U.S. is unlikely over the intermediate term,' said Standard &
Poor's credit analyst Emile Courtney. As a result, we believe
Starwood is likely to sustain an adequate level of cushion
compared with our credit measure thresholds for a 'BBB-' rating.
These thresholds are total adjusted debt to EBITDA under 3.75x and
funds from operations (FFO) to total debt ranging from the low- to
the high-20% area. At December 2011, we estimate that Starwood had
lease- and captive finance-adjusted total debt to EBITDA in the
low-3x area and FFO to total debt in the high-20% area," S&P said.
"We expect that revenue per available room (RevPAR) will grow 3%
to 6% in the U.S. and will be flat in Europe in 2012,' added Mr.
Courtney. In addition, we anticipate 2012 RevPAR growth in many
international markets where Starwood has a presence. Based on
these assumptions, by the end of 2012, we anticipate lease- and
captive finance-adjusted total debt to EBITDA will further improve
to around 3x and FFO to total adjusted debt will be in the high-
20% area. We believe these expected credit metrics represent a
good level of cushion compared with our credit measure thresholds
for the current rating, which is warranted in our view, given the
cash flow volatility exhibited during the recent downturn by all
lodging operators with significant owned hotel positions. We
further believe that U.S. RevPAR will grow in the low-single-digit
area in 2013," S&P said.
"Our stable rating outlook reflects our belief that Starwood is
likely to sustain an adequate level of cushion compared with our
credit measure thresholds for a 'BBB-' rating. These are total
adjusted debt to EBITDA under 3.75x and FFO to total debt ranging
from the low- to high-20% area," S&P said.
"Starwood's adjusted total debt to EBITDA was in the low-3x area
and FFO to total debt was in the high-20% area at December 2011.
By the end of 2012, we expect these measures to be around 3x and
in the high-20% area, respectively, given our expectation that
2012 U.S. RevPAR will grow in the 3% to 6% range, and will
also grow in many international markets where Starwood has a
presence. We believe that these expected credit metrics represent
a good level of cushion compared with our credit measure
thresholds for a 'BBB-' rating, which is warranted, in our view,
given the cash flow volatility during the recent downturn
exhibited by all lodging operators with significant owned hotel
positions," S&P said.
"Although not expected, a lower rating could result if we begin to
believe Starwood will make a higher-than-anticipated level of
share repurchases that would result in leverage being sustained
higher than our thresholds at the current rating. Although
unlikely over the near term, we may consider higher ratings if we
believe Starwood can sustain adjusted leverage below 3x during
periods of RevPAR growth, to accommodate the negative impact of
lodging downturns. We believe this would require a disciplined
approach toward share repurchases in future periods," S&P said.
STEINWAY MUSICAL: Moody's Reviews 'B1' Corporate for Downgrade
--------------------------------------------------------------
Moody's Investors Service placed the credit ratings of Steinway
Musical Instruments on review for possible downgrade following the
announcement that it had reached an agreement in principle to sell
its band division. The SGL-2 speculative grade liquidity rating
was affirmed but could change if the proposed transaction is
completed.
These ratings were placed on review for possible downgrade:
Corporate Family Rating at B1;
Probability of Default Rating at B1;
Senior Unsecured Notes at B2 (LGD5, 75% - assessment not on
review, but subject to change)
Steinway recently announced that it had reached an agreement in
principle to sell its band division to an investor group led by
two current directors of the Company: Dana Messina, former CEO,
and John Stoner, Conn-Selmer President. Samick Musical Instruments
Co. Ltd, the owner of 33% of the Company's common stock, has
agreed to provide a portion of the financing and acquire a
significant equity interest in the buyer.
The parties expect to execute a definitive Purchase and Sale
Agreement, subject to committed financing, in the next 30 to 60
days. The definitive agreement will include a "go-shop" provision
under which the Special Committee of the Board of Directors will
be permitted to solicit, receive, evaluate and enter into
negotiations with respect to alternative proposals for a 60-day
period. The Special Committee, with the assistance of its
advisors, expects to actively solicit alternative proposals during
this period.
RATINGS RATIONALE
"The review will focus on the terms of any proposed transaction,
use of proceeds, the capital structure after the sale and expected
financial policies," stated Kevin Cassidy, Senior Credit Officer
at Moody's Investors Service. The review will also focus on the
company plans, if any, to replace the revenue, earnings and cash
flow of the band division.
The band division accounts for about 40% of the company's revenue.
"While details of the transaction have not yet been disclosed, the
possible loss of the band segments recurring revenue, which is not
as affected by discretionary consumer spending as the Piano
division, is a concern," said Cassidy.
Prior to being placed on review, Steinway's ratings reflected its
modest size with revenue under $350 million, while operating in a
relatively small niche in musical instruments. The ratings were
also constrained by the high degree of volatility in demand of
pianos during weak economic times and the lingering uncertainties
in the macro economy. The ratings were also supported by
Steinway's solid credit metrics, strong brand recognition,
commitment to high product quality, and, at least for the short
term, the recurring revenue of the band instrument segment.
Steinway's strong geographic diversification, growth prospects in
Asia and good liquidity profile also help support the rating.
The principal methodology used in rating Steinway 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.
Steinway Musical Instruments, Inc., headquartered in Waltham,
Massachusetts, is one of the world's leading manufacturers of
musical instruments. The company's products include Steinway &
Sons, Boston and Essex pianos, Selmer Paris saxophones, Bach
Stradivarius trumpets, C.G. Conn French horns, King trombones, and
Ludwig snare drums. Revenues for the twelve months ended September
30, 2011, approximated $340 million.
STRATEGIC AMERICAN: Begins Water Injection in Illinois Project
--------------------------------------------------------------
Strategic American Oil Corporation announced that water injection
has commenced in its Markham City North Water Flood Project
located in Jefferson and Wayne Counties Illinois.
Injection into the V. Pepple No. 1 well marks the beginning of the
pilot phase of the water flood project. As injection continues,
surrounding production wells will be monitored as the injection
water begins to mobilize the oil and re-pressure the reservoir.
Results from the pilot phase will determine further water flood
development plans for the entire field. The pilot project is
located near the middle of the potential waterflood area and is
surrounded by additional leasehold controlled by Strategic and its
partner.
The Markham City North Field produced 1,381,300 barrels of oil
during the primary phase of production from 1943 to 2009.
Management believes significantly more oil remains in the
reservoir which a portion thereof can be recovered by water
flooding. Nearby water flood projects have been water flooded
successfully for many years with some having a secondary to
primary recovery ratio of 1 to 1, making it possible this project
may yield potential gross recoverable reserves in excess of 1
million barrels of oil.
"We are pleased to see the Illinois project enter this new phase
of development. This is an important step toward recovering the
remaining oil in this field, which could be significant. It is
yet another example of our focus on low risk, high reserve
potential projects," noted Jeremy G. Driver, President and Chief
Executive Officer of Strategic American Oil Corporation.
The Markham City North field was farmed-out to and is currently
operated by Core Minerals Operating Co., Inc. As part of the
agreement, Strategic American Oil Corporation retained a 10%
carried working interest. Upon cost recovery by Core of its
initial investment, Strategic will back-in for an additional 15%
working interest. Based in Evansville, Indiana, Core is a
privately held company focused on the acquisition, redevelopment
and management of producing and non-producing oil and natural gas
properties. More information about Core can be found at
www.coreoperating.com.
About Strategic American
Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC
BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth
stage oil and natural gas exploration and production company with
operations in Texas, Louisiana, and Illinois. The Company's team
of geologists, engineers, and executives leverage 3D seismic data
and other proven exploration and production technologies to locate
and produce oil and natural gas in new and underexplored areas.
Strategic American a net loss of $10.28 million on $3.41 million
of revenue for the year ended July 31, 2011, compared with a net
loss of $3.49 million on $531,736 of revenue for the same period
during the prior year.
The Company's balance sheet at Oct. 31, 2011, showed
$24.79 million in total assets, $12.03 million in total
liabilities, and $12.75 million in total stockholders' equity.
MaloneBailey, LLP, in Houston, Texas, the Company's auditors, did
not include a "going concern" qualification in its report on the
Company's financial statements.
As reported by the TCR on March 25, 2011, MaloneBailey expressed
substantial doubt about Strategic American Oil's ability to
continue as a going concern following the Company's results for
the fiscal year ended July 31, 2010. The independent auditors
noted that the Company has suffered losses from operations and has
a working capital deficit.
SUNTRICITY POWER: Meeting to Form Creditors' Panel on Feb. 23
-------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, will
hold an organizational meeting on Feb. 23, 2012, at 11:00 a.m. in
the bankruptcy case of Suntricity Power Corporation. The meeting
will be held at:
J. Caleb Boggs Federal Building
844 King Street, Room 5209
Wilmington DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.
The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code. A representative
of the Debtor, however, may attend the Organizational Meeting, and
provide background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States
Trustee appoint a committee of unsecured creditors as soon as
practicable. The Committee ordinarily consists of the persons,
willing to serve, that hold the seven largest unsecured claims
against the debtor of the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee
may consult with the debtor, investigate the debtor and its
business operations and participate in the formulation of a plan
of reorganization. The Committee may also perform other services
as are in the interests of the unsecured creditors whom it
represents.
Found in 2007, Suntricity Power designs, sells and installs solar
energy systems for residential and commercial customers.
Suntricity Power filed on Feb. 7, 2012, for Chapter 11 bankruptcy
protection (Bankr. D. De. Case No. 12-10431) in Delaware,
estimating assets of between $500,000 and $1 million, and
estimated debts of between $100,000 and $500,000. John D.
McLaughlin, Jr., Esq., at Ciardi Ciardi & Astin, in Wilmington,
Delaware, serves as counsel.
TALON INTERNATIONAL: Mark Dyne Discloses 5.1% Equity Stake
----------------------------------------------------------
Mark Dyne disclosed in an amended Schedule 13G filing with the
U.S. Securities and Exchange Commission that, as of Dec. 31, 2011,
he beneficially owns 1,075,667 shares of common stock of Talon
International, Inc., representing 5.1% based on a total of
21,000,808 shares of the Company's common stock issued and
outstanding on Nov. 9, 2011, as reported on the Company's
Quarterly Report on Form 10-Q filed on Nov. 10, 2011. A full-text
copy of the filing is available at http://is.gd/0xAWkM
About Talon International
Woodland Hills, Calif.-based Talon International, Inc. (OTC BB:
TALN) -- http://www.talonzippers.com/-- is a global supplier of
apparel fasteners, trim and interlining products to manufacturers
of fashion apparel, specialty retailers, mass merchandisers, brand
licensees and major retailers. Talon manufactures and distributes
zippers and other fasteners under its Talon(R) brand, known as the
original American zipper invented in 1893. Talon also designs,
manufactures, engineers, and distributes apparel trim products and
specialty waistbands under its trademark names, Talon, Tag-It and
TekFit, to more than 60 apparel brands and manufacturers including
Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor,
Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen,
Reebok and Juicy Couture. Talon has offices and facilities in the
United States, United Kingdom, Hong Kong, China, and Bangladesh.
The Company reported a net loss of $1.46 million on $41.46 million
of net sales for the year ended Dec. 31, 2010, compared with a net
loss of $2.69 million on $38.67 million of net sales during the
prior year.
The Company also reported net income of $129,377 on $31.38 million
of net sales for the nine months ended Sept. 30, 2011, compared
with a net loss of $1.44 million on $32.48 million of net sales
for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $15.37
million in total assets, $9.41 million in total liabilities,
$19.89 million in Series B Convertible Preferred Stock, and a
$13.93 million total stockholders' deficit.
TENSAR CORPORATION: Moody's Changes PDR to Caa2/LD
--------------------------------------------------
Moody's Investors Service has changed the Probability of Default
Rating of TCO Funding Corp., a special purpose finance vehicle
consolidated by Tensar Corporation, to Caa2/LD from Caa2 to
reflect the limited default caused by Tensar's failure to make its
$40 million first lien term loan amortization payment due January
31, 2011. The ratings are on review direction uncertain pending
the completion of Tensar's ongoing refinancing negotiations with
lenders.
These ratings have been downgraded:
Probability of Default Rating (PDR) to Caa2/LD from Caa2.
RATING RATIONALE
The review will focus on the uncertainty surrounding Tensar's
negotiations with its lenders regarding the refinancing of its
capital structure. Negotiations have been ongoing for several
months and have yet to be completed to alleviate near term
maturities. Moody's review will focus on both the final terms and
the timing of such agreement given the upcoming maturity of its
revolving credit facility on April 30, 2012. Moody's previously
assigned ratings on the proposed refinancing at Tensar Lease
Funding Corp., a newly formed special purpose finance vehicle
consolidated by Tensar Corporation, in October 2011. These
proposed ratings at Tensar Lease Funding Corp. assumed a post-
refinancing Corporate Family Rating (CFR) of B3.
Tensar's CFR will likely be upgraded to B3 if a refinancing occurs
with terms similar to those proposed in October 2011 and there is
no deterioration in business fundamentals. Further, the proposed
ratings could be modified if terms of the refinancing were to
change at close of the refinancing. A negative ratings action
would likely occur if Tensar is unable to execute a refinancing
prior to the maturity of its revolving credit facility.
The principal methodology used in rating Tensar Corporation was
the Global Manufacturing Industry Methodology published in
December 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Tensar Corporation is a US-based multinational holding company
whose subsidiaries develop and manufacture an integrated suite of
products and services that provide soil stabilization, earth
retention, foundation support and erosion and sediment control for
infrastructure end-markets including transportation, commercial
construction and industrial construction. Revenues for the twelve
months ending December 31, 2011 were approximately $240 million.
TERRESTAR NETWORKS: DISH to Close Sale Deal After FCC Nod
---------------------------------------------------------
TerreStar Networks Inc. won court approval of its Chapter 11 plan,
a key step as DISH Network Corp. maneuvers to consolidate its
newly purchased wireless holdings and bring them out of
bankruptcy.
A statement by DISH said, "DISH Network is pleased to announce
that a U.S. bankruptcy court today confirmed TerreStar's
reorganization plan to emerge from bankruptcy. The U.S.
bankruptcy courts previously authorized TerreStar and DBSD to sell
their spectrum licenses to DISH during the middle of 2011.
"DISH is prepared to close both transactions upon receipt of
Federal Communications Commission approval of the license
transfers and associated waiver requests. With these approvals,
DISH would immediately begin the design and construction planning
for the nation's first 100 % LTE network. The requested waivers
are necessary, among other things, to remove an outdated
requirement for every handset to have the capability to establish
a communications link to a satellite. The waiver of this
requirement will allow DISH to provide more meaningful competition
and greater choice for wireless consumers."
About TerreStar Networks
TerreStar Corporation and TerreStar Holdings, Inc., filed
voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for
the Southern District of New York on Feb. 16, 2011.
TSC's Chapter 11 filing joins the bankruptcy proceedings of
TerreStar Networks Inc. and 12 other affiliates, which filed on
Oct. 19, 2010. The October Chapter 11 cases are procedurally
consolidated under TSN's Case No. 10-15446 under Judge Sean H.
Lane.
TSC is the parent company of each of the October Debtors. TSC has
four wholly owned direct subsidiaries: TerreStar Holdings, Inc.,
TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings
Inc.
TSC's case is jointly administered with the cases of seven of the
October Debtors under the caption In re TerreStar Corporation, et
al., Case No. 11-10612 (SHL). The seven Debtor entities who
sought joint administration with TSC are TerreStar New York Inc.,
Motient Communications Inc., Motient Holdings Inc., Motient
License Inc., Motient Services Inc., Motient Ventures Holdings
Inc., and MVH Holdings Inc.
TSC is a Delaware corporation whose main asset is the equity in
non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use
a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by
the Federal Communication Commission. TSC also has an indirect
89.3% ownership interest in TerreStar Network, Inc., which
operates a separate and distinct mobile communications business.
TerreStar Holdings is a Delaware corporation that directly holds
100% of the interests in 1.4 Holdings LLC.
TerreStar Networks -- TSN -- the principal operating entity of
TSC, developed an innovative wireless communications system to
provide mobile coverage throughout the United States and Canada
using satellite-terrestrial smartphones. The system, however,
required an enormous amount of capital expenditures and initially
produced very little in the way of revenue. TSN's available cash
and borrowing capacity were insufficient to cover its funding;
thus, forcing TSN to seek bankruptcy protection in October 2010.
TSC estimated assets and debts of $100 million to $500 million in
its Chapter 11 petition.
Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP,
in New York, serves as counsel for the TSC and TSN Debtors.
Garden City Group is the claims and notice agent. Blackstone
Advisory Partners LP is the financial advisor. The Garden City
Group, Inc., is the claims and noticing agent in the Chapter 11
cases.
Otterbourg Steindler Houston & Rosen P.C. is the counsel to the
Official Committee of Unsecured Creditors formed in TSN's Chapter
11 cases. FTI Consulting, Inc., is the Committee's financial
advisor.
TerreStar Networks sold its business to Dish Network Corp. for
$1.38 billion. It canceled a June 2011 auction because there were
no competing bids submitted by the deadline.
TerreStar Networks previously filed a reorganization plan that
called for secured noteholders to swap more than $850 million in
debt for nearly all the equity in reorganized TerreStar. Junior
creditors, however, would see little recovery under that plan
while existing equity holders would be wiped out. TerreStar
Networks scrapped that plan in 2011 in favor of the auction.
In November 2011, TerreStar Networks filed a liquidating Chapter
11 plan after striking a settlement with creditors. The
creditors' committee initiated lawsuits in July to enhance the
recovery by unsecured creditors.
UNI-PIXEL INC: Austin Marxe Discloses 7% Equity Stake
-----------------------------------------------------
Austin W. Marxe and David M. Greenhouse disclosed in an amended
Schedule 13G filing with the U.S. Securities and Exchange
Commission that, as of Dec. 31, 2011, they beneficially own
495,439 shares of common stock of Uni-Pixel, Inc., representing 7%
of the shares outstanding. A full-text copy of the filing is
available for free at http://is.gd/WlmL9D
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
The Company reported a net loss of $3.81 million on $243,519 of
thin film revenue for the year ended Dec. 31, 2010, compared with
a net loss of $5.37 million on $0 of thin film revenue during the
prior year.
The Company also reported a net loss of $6.69 million on $190,297
of revenue for the nine months ended Sept. 30, 2011, compared with
a net loss of $2.94 million on $140,037 of revenue for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $9.71
million in total assets, $143,600 in total liabilities and $9.57
million in total shareholders' equity.
PMB Helin Donovan, LLP, in Houston, expressed substantial doubt
about the Company's ability to continue as a going concern,
following the Company's 2009 results. The independent auditors
noted that the Company has sustained losses and negative cash
flows from operations since inception.
VINEYARD AT SERRA: Plan Provides Full Payment to All Creditors
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
has authorized The Vineyard at Serra Retreat, LLC,
The Debtor will begin soliciting votes on the Plan following
approval of the adequacy of the information in the Disclosure
Statement.
According to the Disclosure Statement, the Plan will be funded by:
a) the sale of 3314, 3328 and 3410 Serra Road and by capital
contributions that will be used to pay administrative
priority claims and payments to Class 1;
b) if the Debtor is not able to fully satisfy the Bank claim in
the amount allowed as of the Effective Date or the amount of
the claim as agreed by the parties or determined by the
Court order, plus post-Effective Date interest to the Bank,
and satify the obligation to Class 3, general unsecured
claims, by a combination of the sale of the three parcels or
a refinancing of one or more of the parcels by April 1,
2014, the Bank will be entitled to exercise all of its
remedies available to it pursuant to the loan documents.
Under the Plan, the Debtor intends to pay in full all of the
claims. Interest holders will retain their interest in the
Debtor.
General unsecured claims excluding the claim of Rosemary Williams
will be paid in full plus postpetition interest at the federal
rate.
Rosemary Williams will receive no cash distribution pursuant to
her general unsecured claims. Upon full payment of allowed senior
claims, Ms. Williams will retain her ownership interest in the
Debtor.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/THE_VINEYARD_AT_SERRA_ds.pdf
About The Vineyard at Serra Retreat
The Vineyard at Serra Retreat, LLC, in Malibu, California, filed
for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-17323)
on June 15, 2011. Judge Victoria S. Kaufman presides over the
case. The Law Offices of David W. Meadows serves as bankruptcy
counsel. The Company disclosed $19,017,000 in assets and
$27,180,313 in liabilities. The petition was signed by John
Hall, manager.
WALLDESIGN INC: Awaits Final OK on Cash Collateral Stipulation
--------------------------------------------------------------
The Bankruptcy Court continued on Feb. 14, 2012, the final hearing
on the motion to approve stipulation for use of cash collateral.
The continuance of hearing was requested by Walldesign,
Incorporated, Comerica Bank, Painters & Allied Trades, District
Council 15, KCG, Inc., Rew Materials Los Angeles, LLC, and the
Official Committee of Unsecured Creditors.
Under the Stipulation, Comerica is granted a replacement lien in
the Debtor's post-petition cash and accounts receivable and the
proceeds thereof, to the same extent, validity, and priority as
any lien held by Comerica as of Jan. 4, 2012, to the extent cash
collateral is actually used by the Debtor.
No order has been released as of press time.
About Walldesign
Walldesign Inc., incorporated in 1983, has been in the business of
installing drywall, insulation, plaster and providing related
services to single and multi-family construction projects
throughout California, Nevada and Arizona for over 20 years.
Customers include some of the largest homebuilders in the United
States, such as Pulte, DR Horton, K. Hovnanian, Toll Brothers and
KB Homes. In fiscal 2011, Walldesign generated more than $43.5
million in annual revenues.
Walldesign, based in Newport Beach, California, said the global
credit crisis that occurred in the third quarter of 2008 had a
severe negative impact on its business: capital for construction
projects dried up, buyers vacated the market for new homes and
profit margins on new jobs eroded. Although it has significantly
downsized its operations in an effort to remain profitable in the
recessionary conditions, cash flow problems arose during this
process. These problems slowed payments to vendors, precipitating
collection lawsuits forcing it to seek Chapter 11 protection
(Bankr. C.D. Calif. Case No. 12-10105) on Jan. 4, 2012.
Judge Robert N. Kwan presides over the case. Marc J. Winthrop,
Esq., Sean A. O'Keefe, Esq., and Jeannie Kim, Esq., at Winthrop
Couchot, serve as the Debtor's counsel. In its petition, the
Debtor estimated $10 million to $50 million in assets and debts.
The petition was signed by Michael Bello, chief executive officer.
WALLDESIGN INC: U.S. Trustee Forms Creditors Committee
------------------------------------------------------
Frank Cadigan, assistant U.S. Trustee for the Central District of
California, appointed five members to serve on a committee of
creditors holding unsecured claims:
(1) Foam Concepts, Inc.
Attn: Lali Dominguez
4729 E. Wesley Dr.
Anaheim, CA 92807
Tel:(714) 693-1037
Fax:(714) 693-3029
(2) Foam Designs, LLC
Attn: Nathan D. IDE, Esq.
815 W. Center Ave.
Visalia, CA 93291
Tel: (559) 734-9889
Fax: (559) 734-9876
(3) Frazee Paint
Attn: Tom Knapp/Lisa Chappell
6625 Miramar Rd.
San Diego, CA 92121
Tel: (858) 626-3335
Fax: (858) 452-1204
(4) The Chartis Companies
Attn: Sheldon Kleiman/Michelle Levitt
175 Water St., 18th Fl.
New York, NY 10038
Tel: (212) 458-3631
Fax: (877) 224-7801
(5) Painters & Allied Trades, District Council 15
c/o Christian L Raisner/Jordan D. Mazur
Weinberg Roger & Rosenfeld
1001 Marina Village Pkwy, #200
Alameda, CA 94501
Tel: (510) 337-1001
About Walldesign
Walldesign Inc., incorporated in 1983, has been in the business of
installing drywall, insulation, plaster and providing related
services to single and multi-family construction projects
throughout California, Nevada and Arizona for over 20 years.
Customers include some of the largest homebuilders in the United
States, such as Pulte, DR Horton, K. Hovnanian, Toll Brothers and
KB Homes. In fiscal 2011, Walldesign generated more than $43.5
million in annual revenues.
Walldesign, based in Newport Beach, California, said the global
credit crisis that occurred in the third quarter of 2008 had a
severe negative impact on its business: capital for construction
projects dried up, buyers vacated the market for new homes and
profit margins on new jobs eroded. Although it has significantly
downsized its operations in an effort to remain profitable in the
recessionary conditions, cash flow problems arose during this
process. These problems slowed payments to vendors, precipitating
collection lawsuits forcing it to seek Chapter 11 protection
(Bankr. C.D. Calif. Case No. 12-10105) on Jan. 4, 2012.
Judge Robert N. Kwan presides over the case. Marc J. Winthrop,
Esq., Sean A. O'Keefe, Esq., and Jeannie Kim, Esq., at Winthrop
Couchot, serve as the Debtor's counsel. In its petition, the
Debtor estimated $10 million to $50 million in assets and debts.
The petition was signed by Michael Bello, chief executive officer.
WASHINGTON LOOP: Liquidating Plan Outline Hearing Set for Feb. 23
-----------------------------------------------------------------
The Hon. Jeffery P. Hopkins of the U.S. Bankruptcy Court for the
Middle District of Florida will convene a hearing on Feb. 23,
2012, at 9:00 a.m., to consider adequacy of the Second Amended
Disclosure Statement explaining Washington Loop, LLC, et al.'s
proposed Amended Liquidating Plan.
According to the Disclosure Statement dated Jan. 6, 2012, the Plan
contemplates the sale of the Debtor's assets pursuant to its
motion to sell and establish bid, auction and sales procedures.
Under the Plan, the Allowed Secured Claim of the Charlotte County
Tax Collector and of any Tax Lien Certificate Holders will be
paid consistent with the Allowed Amount of the claim, or the
principal amount as may be reflected on the face of the tax lien
certificate, which will constitute its Allowed Claim amount, on
the Effective Date or as soon as practicable thereafter from the
Proceeds resulting from the sale of the property.
The Allowed Amount of the Allowed Secured Claims of the Mortgage
Holders will each be paid in full on the Effective Date.
All Class 3 Allowed Secured Claims holding claims of lien on
personal property being sold as part of the property, will be paid
in full from the proceeds.
Non-Insider Unsecured Creditors holding Non-Insider Allowed Claims
will, to the extent that there is a surplus from the proceeds
after distribution and payment in full to Classes 1 through 3,
receive a pro rata distribution on account of their Allowed Claim
amount.
Unsecured Creditors who are insiders or affiliates of the Debtors
will, to the extent that there is a surplus from the proceeds
after distribution and payment in full to the holders of
Allowed Administrative Expense Claims and the holders of Allowed
Claims in Classes 1 through 4, receive a pro rata distribution on
account of their Allowed Claim amount from any remaining proceeds.
Equity Security Holders will, to the extent that there is a
surplus from the proceeds after distribution and payment in full
to Classes 1 through 5, receive a pro rata distribution on account
of their respective Allowed Equity Interest in the Debtors.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/WASHINGTON_LOOP_2ndamendedds.pdf
Objection Filed
ROBI1956, LLC and LKRT, LLC objected, on a limited basis, to the
Debtor's Second Amended Disclosure Statement.
The creditors related that the Debtor's real estate consist of two
tracts. The first is the real estate actually owned by Washington
Loop, LLC. The second real estate owned by Westpoint Investment
Partners VIII.
ROBI is the first priority mortgage lien holder on the Loop
property, and LKRT is the holder of the first mortgage lien upon
the Westpoints Property.
The creditors asked that the Court deny approval of the Disclosure
Statement because:
-- neither the sale motion nor the Disclosure Statement
contemplate preserving credit bid rights and require
deposits, even from secured creditors;
-- these documents also did not disclose the terms of the sale
or what title work will be available to proposed purchasers.
About Washington Loop
Punta Gorda, Florida-based Washington Loop, LLC, operates an
aggregate mine in Charlotte County, Florida. The Company owns two
parcels of real property and improvements -- the Loop Property and
the Mirror Lakes Property -- which, together, comprise roughly 474
adjoining acres in Punta Gorda, Charlotte County. The Company
filed for Chapter 11 bankruptcy protection on March 31, 2011
(Bankr. M.D. Fla. Case No. 11-06053). Judge Jeffery P. Hopkins
presides over the case. Steven M. Berman, Esq., and Hugo S.
deBeaubien, Esq., at Shumaker, Loop & Kendrick, LLP, in Tampa,
Fla., represent the Debtor as counsel. The Debtor disclosed
$45,098,259 in assets and $19,703,694 in liabilities as of the
Chapter 11 filing.
The Debtor was dismissed from a prior Chapter 11 case (Case No.
10-27981) by order of the Court entered on March 17, 2011. In the
prior Chapter 11 case, the Debtor's Schedule F, as filed under
penalty of perjury, listed some 34 general unsecured creditors
totaling claims of $1,953,354. All Schedule F debts were listed
as non-contingent, liquidated, and undisputed.
The Debtor now declares that all Schedule F debts are
unliquidated. These schedules were filed no less than two weeks
after the dismissal of the prior Chapter 11 case, and only six
weeks after the Debtor filed its Schedule F in that case.
Don Walton, the United States Trustee for Region 21, and Charles
A. Robinson Living Trust, creditor and interest holder against
Washington Loop, filed separate requests to convert the Debtor's
2011 Chapter 11 reorganization case to Chapter 7 liquidation.
Washington Loop filed with the Court a Chapter 11 plan and an
explanatory disclosure statement on Aug. 18, 2011. The Troubled
Company Reporter published a summary of the Plan in its Sept. 6,
2011 edition. The Plan is a reorganization plan accomplished
through the continuation of the Debtor's primary business: the
mining of the 750-acre property in Punta Gorda, Florida. The
Debtor seeks to accomplish payment under the Plan primarily from
the proceeds of the sale of mining materials and or the refinance
of the Washington Loop Property.
The Plan proposes to pay secured creditors -- ROBBIE, Mirror Lakes
V, Mike Treworgy and Wells Fargo Equip Finance -- the present
value of their claim at a market interest rate over an 84-month
period through net income generated from the mining operation and
through a sale or refinance of the Washington Loop Property. The
Effective Date of the proposed Plan is Dec. 15, 2011. The first
payment due under the plan is Jan. 15, 2012. Allowed Class 8
General Unsecured Claims will receive 100% of their allowed claim
on or before the 84th month following the Effective Date.
A full-text copy of the Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?76c8
On Sept. 19, 2011, the Court appointed of Louis X. Amato as
Chapter 11 trustee, which is represented by Shumaker, Loop &
Kendrick, LLP. The trustee tapped Rock Enterprises, Inc., as
engineering consultant, Joseph R. Schortz, C.P.A, PLLC, as
accountants, Douglas Wilson Companies as broker, and Lovina Lehr
as consultant.
No committee has been appointed in either of the Debtors' cases.
WASHINGTON LOOP: Wants Sale in Conjunction with Plan Approved
-------------------------------------------------------------
Louis X. Amato, Chapter 11 trustee for Washington Loop, LLC, and
Westpoints Investment Partners VIII, LLC, asks the U.S. Bankruptcy
Court for the Middle District of Florida to approve the sale of
the Debtors' assets in conjunction with Joint Liquidating Plan
dated Jan. 6, 2012.
Under the Liquidating Plan, the Debtors propose to pay creditors
and make distributions to their respective equity security holders
from funds generated by a sale of all of the Debtors' assets
consisting of the aggregate mining facilities located at 37894
Washington Loop Rd, Punta Gorda, Florida, including the real
property, improvements and equipment located thereon.
The Douglas Wilson Companies was retained to assist Washington
Loop in the sale of the property.
Douglas Wilson anticipates utilizing these proposed timetable on
which to market and sell the property:
Jan. 9 complete preparation of marketing and due
diligence materials and commence
marketing;
March 1 initial offers to be submitted on a
standard purchase and sale agreement
format along with proof of financial
ability to close;
March 2 trustee circulates, to all parties
submitting offers, a copy of the best
submitted offer and invites parties
interested in participating in the auction
to post a $100,000 refundable deposit
entitling the parties to commence formal
due diligence;
March 8 all parties interested in participating in
the auction post their $100,000 refundable
deposits;
March 30 all parties to complete due diligence;
March 31 auction of qualifying bidders (qualified
by timely submission of bid, proof of
financial ability to close, timely posting
of $100,000 refundable deposit and
completion of due diligence),
determination by Court of highest and best
bid and backup bid, determination of good
faith, sale approval, to be followed by
Chapter 11 Plan confirmation hearing;
April 7 both the successful bidder and the back-up
bidder would increase their respective
deposits to $500,000 each and all other
bidders deposits would be released and
returned to the bidders;
April 13 closing and Plan consummation and release
of back-up bidder's deposit.
ROBI1956, LLC and LKRT, LLC asked that the Court deny the Debtors'
sale motion.
About Washington Loop
Punta Gorda, Florida-based Washington Loop, LLC, operates an
aggregate mine in Charlotte County, Florida. The Company owns two
parcels of real property and improvements -- the Loop Property and
the Mirror Lakes Property -- which, together, comprise roughly 474
adjoining acres in Punta Gorda, Charlotte County. The Company
filed for Chapter 11 bankruptcy protection on March 31, 2011
(Bankr. M.D. Fla. Case No. 11-06053). Judge Jeffery P. Hopkins
presides over the case. Steven M. Berman, Esq., and Hugo S.
deBeaubien, Esq., at Shumaker, Loop & Kendrick, LLP, in Tampa,
Fla., represent the Debtor as counsel. The Debtor disclosed
$45,098,259 in assets and $19,703,694 in liabilities as of the
Chapter 11 filing.
The Debtor was dismissed from a prior Chapter 11 case (Case No.
10-27981) by order of the Court entered on March 17, 2011. In the
prior Chapter 11 case, the Debtor's Schedule F, as filed under
penalty of perjury, listed some 34 general unsecured creditors
totaling claims of $1,953,354. All Schedule F debts were listed
as non-contingent, liquidated, and undisputed.
The Debtor now declares that all Schedule F debts are
unliquidated. These schedules were filed no less than two weeks
after the dismissal of the prior Chapter 11 case, and only six
weeks after the Debtor filed its Schedule F in that case.
Don Walton, the United States Trustee for Region 21, and Charles
A. Robinson Living Trust, creditor and interest holder against
Washington Loop, filed separate requests to convert the Debtor's
2011 Chapter 11 reorganization case to Chapter 7 liquidation.
Washington Loop filed with the Court a Chapter 11 plan and an
explanatory disclosure statement on Aug. 18, 2011. The Troubled
Company Reporter published a summary of the Plan in its Sept. 6,
2011 edition. The Plan is a reorganization plan accomplished
through the continuation of the Debtor's primary business: the
mining of the 750-acre property in Punta Gorda, Florida. The
Debtor seeks to accomplish payment under the Plan primarily from
the proceeds of the sale of mining materials and or the refinance
of the Washington Loop Property.
The Plan proposes to pay secured creditors -- ROBBIE, Mirror Lakes
V, Mike Treworgy and Wells Fargo Equip Finance -- the present
value of their claim at a market interest rate over an 84-month
period through net income generated from the mining operation and
through a sale or refinance of the Washington Loop Property. The
Effective Date of the proposed Plan is Dec. 15, 2011. The first
payment due under the plan is Jan. 15, 2012. Allowed Class 8
General Unsecured Claims will receive 100% of their allowed claim
on or before the 84th month following the Effective Date.
A full-text copy of the Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?76c8
On Sept. 19, 2011, the Court appointed of Louis X. Amato as
Chapter 11 trustee, which is represented by Shumaker, Loop &
Kendrick, LLP. The trustee tapped Rock Enterprises, Inc., as
engineering consultant, Joseph R. Schortz, C.P.A, PLLC, as
accountants, Douglas Wilson Companies as broker, and Lovina Lehr
as consultant.
No committee has been appointed in either of the Debtors' cases.
WATERS OF AMERICA: Moody's Assigns 'Caa1' Rating to Term Loans
--------------------------------------------------------------
Moody's Investors Service has assigned a Caa1 to DS Waters of
America, Inc.'s (New) (DSWA) proposed $125 million second-lien
term loans due 2018. The rating on the first lien term loans due
2017, reduced from the originally proposed $465 million to $340
million, remains at B1. These ratings reflect the revised proposal
for the company's post-recapitalization balance sheet. The post-
recapitalization corporate family rating has changed to B2 from
B1. The rating outlook is stable. The ratings are predicated on
the completion of the recapitalization and subject to Moody's
review of final documentation.
These ratings have been assigned to DSWA:
Caa1 (LGD5, 87%) to the $105 million second lien secured term loan
due 2018; and
Caa1 (LGD5, 87%) to the $20 million second lien delayed draw term
loan due 2018.
The following ratings have been lowered at DSWA:
Corporate Family Rating to B2 from B1; and
Probability of Default Rating to B2 from B1.
The following ratings have been affirmed at DSWA:
$285 million first lien term loan due 2017 at B1 (LGD3, 42%); and
$55 million first lien term loan due 2017 at B1 (LGD3, 42%)
RATINGS RATIONALE
The change in the corporate family rating to B2 from B1 reflects
Moody's expectation for weaker interest coverage and tempered cash
flow generation relative to the originally proposed terms for
DSWA's balance sheet recapitalization, due to the incremental
interest burden and increased first lien term loan amortization.
The B2 rating reflects DSWA's moderately leveraged capital
structure and extended maturity profile, weak interest coverage,
and the expectation for modest free cash flow generation following
the proposed recapitalization. Further the rating reflects DSWA's
minimal sales growth and declining EBITDA over the last few years,
exposure to volatile diesel fuel and resin costs, integration risk
from the proposed and executed acquisitions, and narrow product
focus. The rating also incorporates DSWA's leading market position
in the fragmented HOD market, its portfolio of recognizable
regional brands, and high barriers to new competition.
The first lien/second lien structure maintains the total leverage
of the previously proposed recapitalization transaction. The B1
rating on the proposed $340 million first lien secured term loan
reflects its first priority lien on all property and assets
(excluding current assets and certain real estate) and a second
priority lien on all current assets and certain real estate. The
Caa1 rating on the proposed $125 million second lien term loan
reflects its subordinated position in DSWA's capital structure.
DSWA's unrated $70 million asset-based credit facility due 2017
will have a first lien priority interest on the accounts
receivable, inventory and selected real estate and second lien on
all other assets.
Ratings pressure could arise if revenues decline or margins
continue to erode such that interest coverage ((EBITDA-
CAPEX)/Interest) falls below 1.25x (excluding Moody's adjustment
for preferred stock). Further, the ratings could be downgraded if
the company executes any large acquisitions prior to the
integration of the HOD AcqusitionCo acquisition. Further, The
ratings also incorporate Moody's expectation that the term loans
will meaningfully restrict dividends from DSWA to its parent
entities. Therefore, any dividends prior to a material improvement
in the company's financial performance will likely negatively
impact the ratings.
Over the medium term, the ratings could be upgraded if the company
records steady revenue and organic EBITDA growth over a period of
1 to 2 years and Moody's comes to expect that the company's
financial policies will be consistent with interest coverage above
2.0x.
The principal methodology used in rating DSWA was the Global Soft
Beverage Industry Methodology published in December 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
DSWA, headquartered in Atlanta, Georgia, is a provider of bottled
water and related services delivered directly to residential and
commercial customers in the U.S. (operates in 43 states). Its core
business is the bottling and direct delivery of drinking water in
3 and 5 gallon bottles to homes and offices and the rental of
water dispensers. The company also sells water in smaller bottles,
cups, coffee, flavored beverages and powdered sticks, and sells
water filtration devices. Proforma for the restructuring, DSWA
will be owned by Kelso & Co (33%), Group Lenders (55%), consisting
primarily of Glenview Capital Management, GoldenTree Asset
Management and Solar Capital, and management (12%). Revenues for
2011 were roughly $765 million.
WEIGHT WATCHERS: Moody's Affirms 'Ba1' CFR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service affirmed all debt ratings of Weight
Watchers International, Inc., including the corporate family
rating of Ba1. The rating outlook remains stable.
Weight Watchers' plan to debt finance $1.5 billion of share
purchases indicates a shift to more shareholder-friendly financial
policies. Debt to EBITDA (Moody's adjusted) will nearly double to
about 4.5x on a pro-forma basis as of December 31, 2011, although
this higher leverage is from a relatively low level. Nonetheless,
by building on the unique and expandable brand, Moody's
anticipates Weight Watchers will continue to experience strong
operating results and generate solid free cash flow to facilitate
rapid deleveraging to levels consistent with the Ba1 rating level.
Weight Watchers' has a history of reducing leverage and a stated
strategy to deleverage quickly.
The stable outlook anticipates Weight Watchers will lower debt to
EBITDA below 4 times over the coming year and continue to reduce
debt to EBITDA to no more than the mid 3 times level. Moody's also
anticipates the company will maintain strong cash flow metrics,
including free cash flow to debt of at least 10%. Any departure
from the company's deleveraging commitment, or evidence that the
company cannot maintain revenue growth, operating margins or free
cash flow generation could pressure the rating down. The ratings
could be upgraded should Weight Watchers grow profitability or
repay indebtedness such that debt to EBITDA and free cash flow to
debt are sustained at under 3 times and over 15%, respectively,
and set financial targets which are consistent with an investment
grade rating.
Ratings affirmed:
Weight Watchers International Inc.
Corporate Family Rating, Ba1
Probability of Default, Ba2
Senior Secured Credit Facility, Ba1 (LGD3, 33%)
Weight Watchers plans to issue $1.5 billion of new bank debt and
use the proceeds to repurchase stock.
Approximately 52% of Weight Watchers stock is owned by Artal
Holdings Sp. z o.o., ("Artal"), a Luxembourg investment vehicle
advised by Invus Group ("Invus"), a US fund manager; the majority
of Weight Watchers directors are Invus principals. Moody's expects
Artal to seek opportunities to harvest cash through share
repurchases. The contemplated recapitalization is similar to one
undertaken in January 2007.
To finance its share tender offer, Weight Watchers will arrange
for a new bank term loan facility of $950 to 1,050 million, a new
institutional term loan facility of $500 to 600 million and an
amendment and extension offer on $1,357 million of existing
facilities. Simultaneously, the company will launch a Dutch
auction self-tender offer for non-Artal shareholders and a private
share repurchase agreement with Artal committing Weight Watchers
to purchase from Artal a pro rata number of shares to that
purchased from the public shareholders. All parts of the
recapitalization are expected to close in March and fund in March
and early April.
Weight Watchers is a leading global provider of weight management
services and a leading global branded consumer company. Revenues
were approximately $1.8 billion in the fiscal year ended December
31, 2011.
The principal methodology used in rating Weight Watchers
International Inc. was the Global Business & Consumer Service
Industry Methodology published in October 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
WPCS INTERNATIONAL: Karen Singer Ceases to Hold 5% Equity Stake
---------------------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Karen Singer disclosed that, as of Dec. 31,
2011, she ceased to be the beneficial owner of more than 5% of
WPCS International Incorporated's outstanding common shares. A
full-text copy of the filing is available at http://is.gd/0ncXlY
About WPCS International
Exton, Pennsylvania-based WPCS International Incorporated provides
design-build engineering services that focus on the implementation
requirements of communications infrastructure. The Company
provides its engineering capabilities including wireless
communication, specialty construction and electrical power to the
public services, healthcare, energy and corporate enterprise
markets worldwide.
The Company's balance sheet at Oct. 31, 2011, showed $51.88
million in total assets, $27.17 million in total liabilities and
$24.70 million in total equity.
As reported by the TCR on Dec. 8, 2011, WPCS International and its
United Stated based subsidiaries, previously entered into a loan
agreement, dated April 10, 2007, as extended, modified and amended
several times, with Bank of America, N.A. The Company is seeking
alternative debt financing and has conducted discussions with
other senior lenders to replace the Loan Agreement. The Company
may not be successful in obtaining alternative debt financing or
additional financing sources may not be available on acceptable
terms. If the Company is required to repay the Loan Agreement,
the Company has sufficient working capital to repay the
outstanding borrowings.
* Moody's Says Low-Rated PE Firms See Demand for Maturing Debt
--------------------------------------------------------------
Fifteen low-rated US companies (B3 and below) owned by private
equity firms have $62 billion of debt maturing in 2012-2016,
almost half of which is due by 2014. That's a steeper maturity
wall than for the larger population of US nonfinancial
speculative-grade companies, says a new special comment by Moody's
Investors Service.
Despite their weaker credit quality and high likelihood of
default, two of these companies recently saw strong investor
demand for new secured bond offerings as they refinanced portions
of their bank debt. Two other companies have also gone to market.
"Investors appear to have an appetite for the higher-ranked senior
secured bonds of these companies as they search for yield amid
today's low interest rates," said Suzanne Wingo, a Moody's
Assistant Vice President -- Analyst and author of the report.
Senior secured bonds are backed by collateral and provide a higher
likelihood of repayment in case of default than unsecured bonds.
Collateral may not lead to a high recovery, however, if there is
little debt cushion provided by unsecured or subordinated notes in
the capital structure.
Energy Future Holdings (Caa2 negative) subsidiary EFIH Finance
Inc. recently upsized an original $400 million offering to $800
million of senior secured second lien notes. Realogy Corporation
(Caa2 stable) issued about $900 million of high-yield bonds to
take out a maturing term loan and pay down an outstanding revolver
balance.
In addition, casino operator Caesars Entertainment Corp. (Caa2
review for upgrade) launched a $1.25 billion senior secured high-
yield bond offering in February, while Univision Communications,
Inc. (B3 stable) launched a $600 million senior secured note
offering.
The report notes that about half of the 15 companies, including
the five largest by outstanding debt, were among the largest
leveraged buyouts of the 2006-2008 credit boom period.
* Sen. Wants Answers on Exec Bonuses at Bankrupt Companies
----------------------------------------------------------
Amanda Bransford at Bankruptcy Law360 reports that Sen. Chuck
Grassley, R-Iowa, told the U.S. Department of Justice in a letter
last week that he is concerned executives in charge of bankrupt
companies may be receiving outsized bonuses and asked for
information on enforcement of a law designed to prevent this.
* Crowell Loses 6 Partners to Thompson, Weil Amid Scandal
---------------------------------------------------------
Gavin Broady at Bankruptcy Law360 reports that a group of six
partners with real estate, restructuring and arbitration
experience has departed Crowell & Moring LLP for Thompson & Knight
LLP and Weil Gotshal & Manges LLP in the wake of a $7 million real
estate client-theft scandal in which a former Crowell attorney
faces criminal charges, the firms announced Tuesday.
* Solus Snags Deutsche Bank's Distressed Products Leaders
---------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Solus Alternative
Asset Management LP, a $2.5 billion hedge fund manager
specializing in event and credit-related investments, said
Wednesday it hired Deutsche Bank AG's two co-heads of distressed
products group as portfolio managers.
* Third Avenue Investing in Millstein & Co
------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Third Avenue
Management, an investment firm with distressed-debt expertise, is
investing in Millstein & Co., giving the nascent restructuring
advisory firm fresh capital as it ramps up to hire and try to
compete with established investment banks.
* Z Capital Founder Pledges $100,000 to UNC Business School
-----------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that James J. Zenni Jr.
has become the latest private equity professional to make a
charitable donation to an educational institution.
* Departing NY Bankruptcy Chief Leaves Behind 'Mega' Legacy
--------------------------------------------------------------
Hilary Russ at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Arthur J. Gonzalez, the outgoing chief judge of the New York
bankruptcy court, presided over Enron Corp., WorldCom and Chrysler
LLC -- three of the biggest, most complex corporate bankruptcies
in U.S. history -- but never let his skyrocketing reputation
inflate his ego or alter his no-nonsense attitude, attorneys said.
Known for his intelligence, decisiveness and work ethic, Judge
Gonzalez held fast to his even-keeled temperament and his
practical approach, no matter how small ? or how big ? the case,
Law360 relates.
* BOOK REVIEW: Kenneth M. Davidson's Megamergers
------------------------------------------------
Author: Kenneth M. Davidson
Publisher: Beard Books
Hardcover: 427 pages
Listprice: $34.95
Review by Henry Berry
Megamergers are nothing new to the business world. One of the
first occurred in 1901, when Carnegie Steel merged with several
rival steel corporations, resulting in the billion-dollar United
States Steel. Since then, megamergers have been a part of American
business. However, the author notes that megamergers have
historically "occurred sporadically and been understandable" on
face value. By contrast, in recent decades there has been a
"current wave of large mergers [that] is unprecedented."
In Megamergers - Corporate America's Billion-Dollar Takeovers,
Davidson looks at the unprecedented number of megamergers
occurring today and considers whether this signals a change in
the thinking of U.S. business leaders. Legislators, corporate
executives, mergers specialists, and anyone else involved in,
or affected by, megamergers will find this book enlightening.
An announcement of a merger is usually accompanied with the
pronouncements that it will result in greater synergies,
operational efficiencies, and improved servicing of markets.
Mr. Davidson questions whether this has, in fact, been the case.
He analyzes the subsequent financial performance of the corporate
behemoths produced by these megamergers and concludes that the
majority of them were not justifiable nor, ultimately, productive.
Mr. Davidson is an admitted skeptic about the value of mergers to
the overall economy and to employees, stockholders, and consumers.
He is critical of the overly optimistic rationales prevalent in
today's business climate that lead many businesspersons into
mergers. For the most part, though, he keeps his biases in check.
He rejects many of the common criticisms of mergers. For example,
he finds unpersuasive the argument that mergers should be rejected
on the ground that they undermine market competitiveness. Nor,
does he say, is it worthwhile to revisit the ongoing debate over
whether "'risk arbitrageurs are good guys or bad guys."
The author states that his "first intention [is] to paint a
picture of what is happening [to] clarify the issues involved and
areas of dispute." He offers a balanced examination of the
megamerger phenomenon, particularly as it pertains to the energy
and financial services industries. He goes beyond seeing
megamergers only as phenomena of contemporary corporate culture,
and his analyses go beyond mere statistics. Megamergers have
their roots not only in business ambitions and current trends, but
also in human nature. Recognizing this, the author also addresses
the psychology underlying megamergers. As noted in the section
"The Acquisition Imperative," mergers present a temptation to the
decision-making executives of successful companies "look[ing]
beyond their product and consider[ing] the disposal of excess
profits." Mr. Davidson explains why a merger appears to many
executives to be a better option than distributing profits to
shareholders, starting new businesses, or investing in securities.
The informed perspective Mr. Davidson offers in this book, first
published in 2003, is just as relevant today. It is a book that
brings new wisdom to old ways of thinking about megamergers.
An attorney for the U. S. Federal Trade Commission for 25 years,
Kenneth M. Davidson has also been a corporate attorney and a
visiting law professor.
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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
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