/raid1/www/Hosts/bankrupt/TCR_Public/120330.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, March 30, 2012, Vol. 16, No. 89
Headlines
3210 RIVERDALE: Initial Case Conference Set for April 19
99c ONLY: Moody's Says Loan Amendment No Impact on 'B2' CFR
ACTUANT CORP: S&P Ups Corp. Credit Rating to 'BB+'; Outlook Stable
AFFINION GROUP: S&P Lowers Corp. Credit Rating to 'B' on High Debt
AGE REFINING: Ch. 11 Trustee Wants Release from Duties and Bond
ALLY FINANCIAL: Elliott Urges Ally Against ResCap Bankruptcy
AMACORE GROUP: To Amend 2009 Financials Due to Accounting Errors
AMARU INC: Wilson Morgan Replaces Mendoza Berger as Accountant
AMERICAN AIRLINES: Parties Agree on Retiree Committee Formation
AMERICAN AIRLINES: Starts Process for Ending 9 CBAs
AMERICAN AIRLINES: Eagle to Fire 600, Reduce Union Costs
AMERICAN AIRLINES: Unions Prepared to Fight Rejection of CBAs
AMERICAN AIRLINES: US Airways Said to Talk Merger With Creditors
AMERICAN APPAREL: Has New 3-Year Contract with CEO Dov Charney
AVISTAR COMMUNICATIONS: Offering 1.6MM Shares Under Equity Plan
AXION INTERNATIONAL: BDO USA Replaces RBSM LLP as Accountant
BAUSCH AND LOMB: Moody's Says ISTA Acquisition Credit Negative
BERNARD L. MADOFF: UniCredit Wants Case in District Court Again
CASCADE BANCORP: Incurs $47.3 Million Net Loss in 2011
BIOLIFE SOLUTIONS: Incurs $41,000 Net Loss in Fourth Quarter
BIOCORAL INC: Delays 2011 Annual Report
CENGAGE LEARNING: S&P Rates $575-Mil. Senior Secured Notes 'B'
CENTURYLINK INC: S&P Retains 'BB' Corporate Credit Rating
CHINA DU KANG: Delays Form 10-K for 2011
CHRIST HOSPITAL: Court Approves Sale to Hudson Hospital
CIRCLE ENTERTAINMENT: Incurs $5.3 Million Net Loss in 2011
CIRTRAN CORP: Has Forbearance Agreements with YA Global and ABS
CONQUEST PETROLEUM: Shortage of Funds Causes Delay of Form 10-K
CLARE AT WATER TOWER: Sets April 24 Plan Confirmation
CONTRACT RESEARCH: May Use $2.4 Million of Freeport DIP Loan
CONTRACT RESEARCH: Meeting to Form Creditors' Panel on April 5
CONVERGYS CORP: Moody's Issues Summary Credit Opinion
DEEP DOWN: Reports $2.1 Million Net Income in 2011
DENBURY RESOURCES: S&P Hikes Sr. Subordinated Debt Ratings to 'BB'
DETROIT, MI: S&P Lowers Tax General Obligation Bond Rating to 'B'
EASTMAN KODAK: Wins Approval for E&Y as Tax Services Provider
EASTMAN KODAK: Wins OK for PwC as Auditor and Tax Advisor
EASTMAN KODAK: Amends KESIP Plan to Eliminate Investment Option
EL CENTRO MOTORS: Has Interim Authority to Use Cash Collateral
ELPIDA MEMORY: U.S. Court Issues Ruling Halting Lawsuits
ENERGY CONVERSION: Gets Court's Nod to Employ Auctioneers
ENERGY CONVERSION: Creditors Block Final Order on Collateral Use
ENERGY CONVERSION: Can Hire Quarton Partners as Investment Banker
EPAZZ INC: Auditor Lacks Time, Form 10-K for 2011 Delayed
EURONET WORLDWIDE: S&P Affirms, Withdraws 'BB+' Credit Rating
FIRST DATA: Amendment to Credit Suisse Credit Pact Takes Effect
EXTERRA ENERGY: Former Judge McConnell Named Ch. 11 Trustee
FLOWSERVE CORP: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Pos
FLURIDA GROUP: Enterprise CPAs Raises Going Concern Doubt
FRITZ LLC: Case Summary & 4 Largest Unsecured Creditors
GENTA INC: Incurs $69.4 Million Net Loss in 2011
GMX RESOURCES: S&P Raises Corp. Credit Rating From 'SD' to 'CCC+'
GUIDED THERAPEUTICS: Incurs $6.6 Million Net Loss in 2011
GUITAR CENTER: Incurs $236.9 Million Net Loss in 2011
GRAND CHINA: Defaults on Payments to Titan Petrochemicals
GRUBB & ELLIS: BGC to Close Purchase Shortly
HANDY & HARMAN: S&P Gives 'B' Corp. Credit Rating; Outlook Stable
HD SUPPLY: Moody's Upgrades Corporate Family Rating to 'Caa1'
HEALTH CARE REIT: Fitch Rates $1 Billion Preferred Stock 'BB+'
HEARTHSTONE HOME: U.S. Trustee Appoints 7-Member Creditors' Panel
HECKMANN CORP: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable
HERCULES OFFSHORE: Prices Public Offering of 20MM Common Stock
HERCULES OFFSHORE: Prices offering of Senior Secured Notes
HIGH RIVER: Submits First Default Status Report
HORNE INTERNATIONAL: Incurs $121,000 Comprehensive Loss in 2011
HUSSEY CORP: Plan Exclusivity Extension Hearing on April 30
INNER CITY: Seeks to Borrow $3 Million Pending Sale to Lenders
INTERNATIONAL MEDIA: Court Okays Sale to Lenders
KANSAS CITY SOUTHERN: S&P Raises Corporate Credit Rating to 'BB+'
KB HOME: S&P Cuts Corp. Credit Rating to 'B' on Weak First Quarter
LIBERATOR INC: Settles with Donald Cohen for $72,465
LOS ANGELES DODGERS: McCourt Won't Reap Parking Profits
LOUISIANA HOUSING: S&P Raises Series 2006 Bonds Rating From 'B-'
MARCO POLO: Seaarland Reneged on Plan Outline, Lenders Allege
MARCO POLO: In Deal Talks With Potential Strategic Investor
MAUI LAND: Adele Sumida Resigns as Controller and Secretary
MCCLATCHY CO: Gary Pruitt Has 125,000 Stock Appreciation Rights
MEDLINK INTERNATIONAL: Suspending Filing of Reports with SEC
MERITAGE HOMES: S&P Rates New $250-Mil. Senior Notes 'B+'
MOHAWK INDUSTRIES: Moody's Lifts Rating on Sr. Unsec Notes to Ba1
MONEYGRAM INT'L: Moody's Issues Summary Credit Opinion
MORGANS HOTEL: R. Burkle, et al., Equity Stake Down to 28.9%
NCO GROUP: Minimum Consents to Tender Offers Satisfied
NEBRASKA BOOK: J.P. Morgan, Other Creditors Protest Exit Plan
NEOMEDIA TECHNOLOGIES: To Sell $450,000 Debenture to YA Global
NET TALK.COM: Files Form 10-KT; Incurs $3.4-Mil. in Dec. 31 Qtr.
NEW CENTAUR: Moody's Rates $180MM 1st Lien Credit Facilities B1
NEW GOLD: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable
NESCO LLC: Moody's Assigns 'B3' CFR, Rates Sr. Sec. Notes 'Caa1'
NORTHCORE TECHNOLOGIES: Paul Godin Named New Board Chairman
OFFICEMAX INCORPORATED: Moody's Issues Summary Credit Opinion
OPTIONS MEDIA: Terminates Merger Agreement with Illume Software
ORAGENICS INC: Has $2.5 Million Loan Agreement with Koski Family
OVERLAND STORAGE: Closes Sale of 3.6 Million Common Shares
PATIENT SAFETY: Incurs $1.8 Million Net Loss in 2011
PEREGRINE PHARMACEUTICALS: Gets Bid Price Notice From NASDAQ
PLAZA SOUTH: Case Summary & 13 Largest Unsecured Creditors
PHYSICAL PROPERTY: Incurs HK$524,000 Comprehensive Loss in 2011
PREFERRED PROPPANTS: Moody's Rates $125MM Add-on Term Loan 'B2'
PRUDENTIAL FIN'L: Moody's Assigns (P)Ba1 Preferred Stock Ratings
QUALTEQ INC: Files Third Amended Plan Disclosures
QUALTEQ INC: Judge Eugene R. Wedoff Now Assigned to Handle Cases
QUANTUM FUEL: Capital Ventures Holds 9.9% Equity Stake
QUANTUM FUEL: Hudson Bay Discloses 9.9% Equity Stake
QUANTUM FUEL: Incurs $38.5-Mil. Loss in 8 Months Ended Dec. 31
RYAN INTERNATIONAL: $4.5MM DIP Facility With INTRUST Approved
RYAN INTERNATIONAL: Hardin Bank Asks Court to Bar Cash Use
RYAN INTERNATIONAL: Sec. 341 Creditors' Meeting Set for May 4
SEALY CORP: H Partners Buys More Shares, Now Owns to 15.3% Stake
SEJWAD HOTELS: Files Schedules of Assets and Liabilities
SELECTIVE INVESTMENTS: Case Summary & 14 Largest Unsec Creditors
SIERRA CASCADE: Case Summary & 20 Largest Unsecured Creditors
SKILLED HEALTHCARE: Moody's Raises Corp. Family Rating to 'B1'
SMART-TEK SOLUTIONS: Delays Form 10-K for 2011
SMITHFIELD FOODS: S&P Raises Corporate Credit Rating to 'BB'
SNOKIST GROWERS: Truitt Bro Gets Extension to Line Up Financing
SOUTHERN FOREST: Sec. 341 Creditors' Meeting Set for May 17
SQUARE 67: Case Summary & 11 Largest Unsecured Creditors
SP NEWSPRINT: Axis Crane Wants to Foreclose on Oregon Property
STRATUM HOLDINGS: MaloneBailey LLP Raises Going Concern Doubt
SUITE DREAMS: Voluntary Chapter 11 Case Summary
SUMMIT STREET: Case Summary & 6 Largest Unsecured Creditors
SUNRISE REAL ESTATE: CFO Liu Zen Yu Resigns; Wang Hua Takes Over
SUZANNE S. CLIFTON: Funds From Northwestern IRA Are Exempted
TALON INTERNATIONAL: Reports $729,000 Net Income in 2011
TALON THERAPEUTICS: Incurs $18.8 Million Net Loss in 2011
TBS INTERNATIONAL: Wins Confirmation of Reorganization Plan
THERMODYNETICS INC: Inks 9th Amendment to Baker Purchase Pact
THERMOENERGY CORP: Delays Form 10-K for 2011
TMM HOLDINGS: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable
TOUSA INC: Appeal Argued, One Lender-Defendant Settles
TOWNSQUARE RADIO: Moody's Assigns 'B2' Corporate Family Rating
TRAILER BRIDGE: Has Until June 13 to Decide on Unexpired Leases
UNITED RETAIL: To Seek Approval of Sale to Versa April 3
UNITED RETAIL: Court Sets April 27, 2012 Claims Bar Date
USG CORP: Matthew Hilzinger Succeeds Richard Fleming as EVP & CFO
USG CORP: Launches Private Offering of $250-Mil. Sr. Notes
VERENIUM CORP: Receives $37 Million from Sale of Assets to DSM
W.R. GRACE: Proposes to Settle Claims Over High Point Site
W.R. GRACE: Wins Court OK for Otis Pipeline Settlement
W.R. GRACE: Libby Claimants Back Changes to Jan. 30 Plan Order
W.R. GRACE: Anderson, BNSF Win Extension for Plan Appeal
WASHINGTON MUTUAL: Debtor Abandons Equity Interests in Bank
WASHINGTON MUTUAL: Plea to Reconsider Plan Confirmation Denied
WASHINGTON MUTUAL: Court OKs Estimated Maximum of Equity Interests
WINDOW FACTORY: Richard Kipperman Appointed as Chapter 11 Trustee
WPCS INTERNATIONAL: EVP Voacolo Resigns for Personal Reasons
ZOO ENTERTAINMENT: David Smith Discloses 71.9% Equity Stake
* Lawyer's Travel Time May Be Fully Compensable, 9th Cir. Says
* Bankrupt Lawyers Not Presumed to Know Texas Homestead Law
* FHA Bailout Risk Looming Larger After Guarantee Binge: Moody's
* Ex-Hogan Lovells Atty. Admits $2-Million Fraud
* Marvell Founders Amending FINRA Claims vs. Goldman
* Moody's Says Wildlife Protection Hits Renewable Energy Sector
* Moody's Says Non-financial Corp. Ratings Indicators of Default
* P. Kalek Joins Chadbourne as Int'l Partner in Warsaw
* Paneth & Shron Names Two New Partners and One Principal
* Joseph Karel Joins Focus Management as Managing Director
* 2nd Cir. Appoints Paul Warren as W.D.N.Y. Bankruptcy Judge
* Fredrick Clement Appointed E.D. Calif. Bankruptcy Judge
* BOOK REVIEW: The Health Care Marketplace
*********
3210 RIVERDALE: Initial Case Conference Set for April 19
--------------------------------------------------------
Judge James M. Peck set an Initial Case Conference for April 19,
2012, in the chapter 11 case of 3210 Riverdale Development LLC.
The Debtor is required to file its schedules of assets and
liabilities and statement of financial affairs April 3. A Chapter
11 plan and explanatory disclosure statement are due by July 18.
Bronx, New York-based 3210 Riverdale Development LLC filed for
Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-11109) on March
20, 2012, listing $10 million to $50 million in both assets and
debts. Judge James M. Peck presides over the bankruptcy case.
The Law Offices of Mark J. Friedman P.C. serves as the Debtor's
counsel.
3210 Riverdale owns certain real property and improvements located
at 3210 Riverdale Ave., 3217 Irwin Ave., and 3219 Irwin Ave., in
Bronx. The Chapter 11 filing stays an auction scheduled by the
secured lender. At the behest of HSBC Capital (USA) Inc.,
administrative lender, New York auctioneer Sheldon Good & Company
was set to conduct a public auction March 21 of 100% of the
limited liability company interests in 3210 Riverdale, pledged by
the Debtor to the lenders.
Riemer & Braunstein LLP, in New York, represented HSBC Capital in
the proposed sale.
99c ONLY: Moody's Says Loan Amendment No Impact on 'B2' CFR
-----------------------------------------------------------
Moody's Investors Service commented that 99› Only Stores proposed
amendment to its term loan has no impact on its B2 Corporate
Family Rating, its B2 senior secured term loan rating, and its
Caa1 senior unsecured notes.
The principal methodology used in rating 99› Only Stores was the
was the Global Retail Industry Methodology published in June 2011.
99› Only Stores is a regional dollar store chain headquartered in
City of Commerce, California. They currently operate 291 stores
located in California, Arizona, Nevada, and Texas. The company is
84% owned by Ares Management and Canada Pension Plan Investment
Board. While the remaining 16% is owned by management. Revenues
are approximately $1.5 billion.
ACTUANT CORP: S&P Ups Corp. Credit Rating to 'BB+'; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on
Milwaukee, Wis.-based Actuant Corp., including the corporate
credit rating to 'BB+' from 'BB'. The outlook is stable.
"The upgrade reflects the company's good credit measures,
including funds from operations to total adjusted debt approaching
40%, along with our expectations that the company will continue to
benefit from recovering global economic trends--specifically in
its profitable energy and industrial segments," said Standard &
Poor's credit analyst Gregoire Buet.
"Actuant's financial policies have also remained consistent with
management's stated financial leverage objectives. We believe that
the company has now built up substantial debt capacity for
external growth initiatives," said Mr. Buet. "We currently
estimate that the company could increase debt by about $500
million (assuming associated profits and cash flows) without
affecting its credit profile."
"Standard & Poor's expects Actuant will continue to benefit from
the global recovery in industrial markets, and our ratings assume
revenue growth in the high-single-digit area in fiscal 2012, along
with steady margins. We also expect Actuant to redeploy its
consistent free cash flow to complement organic growth with
acquisitions, while maintaining adjusted total debt to EBITDA
leverage under 3.0x. We currently estimate that the company's
additional debt capacity for such initiatives is about $500
million (assuming associated profits and cash flows)," S&P said.
"We could lower the rating if FFO to total debt fell and appeared
likely to remain less than 25%, for example because of a downturn
in its end markets caused by declining global industrial
production or by a sharp decline in oil prices, or because of
more-aggressive than expected financial policies. A higher rating
is unlikely in the near-term; however, over the long-term, we
could raise the ratings if Actuant's operating prospects remain
positive and its growth initiatives continue to strengthen and
diversify its business profile and if it demonstrates financial
policies in line with an investment-grade rating, notably by
continuing to pursue a disciplined acquisition strategy," S&P
said.
AFFINION GROUP: S&P Lowers Corp. Credit Rating to 'B' on High Debt
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Stamford, Conn.-based Affinion Group Holdings Inc. to
'B' from 'B+'. The rating outlook is negative.
"In conjunction with the downgrade, we also lowered our issue-
level ratings on the company's debt by one notch. Our recovery
ratings on these debt issues remain unchanged," S&P said.
Total debt at the company was $2.3 billion as of Dec. 31, 2011.
"The downgrade reflects our view that leverage will remain high
over the intermediate term, reflecting ongoing risks of member
attrition," noted Standard & Poor's credit analyst Hal Diamond.
"Credit measures have remained elevated, as the benefit of the
January 2011 equity-financed acquisition of online marketing
services company Webloyalty Holdings Inc. did not offset debt-
financed special dividends in the first quarter of 2011. Operating
performance is under pressure as a result of challenges
experienced in the financial services industry, the company's
largest client pool, and increased marketing costs and commissions
aimed at restoring revenue growth. We expect that Affinion's
margin of compliance with its net debt leverage covenant will
diminish to under 10% with the June 30, 2012 step-down to 5.75x,
and because of weaker operating performance resulting from an
increase in marketing spending in the first half of 2012," S&P
said.
"We consider the company's business risk profile as 'weak,'
because of continued membership attrition in many of its services,
some affinity partner concentration (especially in the financial
services industry), and competitive pressures in the membership
marketing business. Relatively high leverage, a record of
acquisitions and special dividends, and low discretionary cash
flow to debt underpin our view of Affinion's financial risk
profile as 'highly leveraged.' The company operates in the direct
marketing industry, which we consider mature, and which relies
heavily on ongoing investment in acquiring new members," S&P said.
"Affinion is a leading direct marketer of membership, insurance,
and credit card ancillary services, primarily sold under the names
of affinity partner institutions, such as financial institutions
and retailers. Revenue from its existing customer base has
historically generated a significant percentage of sales, but
organic growth has been minimal over the past few years,
reflecting weak conditions in the financial services industry.
Direct mail, which we view as facing declining fundamentals,
remains a significant marketing channel for the company to acquire
new members. We expect the company to continue to expand its
online marketing efforts, though response rates could decline
accordingly because many players are pursuing a similar strategy,"
S&P said.
"Under our base-case scenario, we expect 2012 and 2013 revenue and
EBITDA to increase at a low-single-digit percentage rate. Our base
case suggests lease-adjusted gross debt leverage will modestly
decline to the mid-7x area for 2012 and the low- to mid-7x area
for 2013, based on our outlook for a slight uptick in performance
as a result of new member acquisitions," S&P said.
AGE REFINING: Ch. 11 Trustee Wants Release from Duties and Bond
---------------------------------------------------------------
Eric J. Moeller, the Chapter 11 trustee in the case of Age
Refining, Inc., asks the U.S. Bankruptcy Court for the Western
District of Texas to:
-- discharge him as Chapter 11 trustee;
-- terminate his obligations and authority vis-a-vis the
Debtor's estate; and
-- releasing him the bond and liberty from any further
liability from the date of the trustee's discharge.
According to Mr. Moeller, the Effective Date of the Plan of
Reorganization occurred on Jan. 20, 2012; and Randolph N. Osherow,
the liquidating trustee, has assumed his duties pursuant to the
terms of the Liquidating Trust as approved by the Fourth Amended
Chapter 11 Plan of Reorganization, well as the Confirmation order.
About Age Refining
Age Refining, Inc. owned a refinery in San Antonio, Texas. It
manufactured, refined and marketed jet fuels, diesel products,
solvents and other highly specialized fuels.
The Company filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Tex. Case No. 10-50501) on Feb. 8, 2010. The Company
estimated $10 million to $50 million in assets and $100 million to
$500 million in liabilities in its bankruptcy petition. David S.
Gragg, Esq., and Steven R. Brook, Esq., at Langley & Banack,
Incorporated, in San Antonio, Texas, represent Eric J. Moeller,
Chapter 11 Trustee, as general counsel.
Eric Moeller has been named chapter 11 trustee to take management
of the Debtor from CEO Glen Gonzalez. In November 2010, the
trustee filed suit against Mr. Gonzalez, alleging he breached his
fiduciary duty by dipping into Company coffers for his personal
use while paying himself an excessive salary and stock
distributions.
David S. Gragg, Esq., Steven R. Brook, Esq., Natalie F. Wilson,
Esq., and Allen M. DeBard, Esq., at Langley & Banack, Inc., in San
Antonio, Tex., serve as general counsel to the Chapter 11 Trustee.
ALLY FINANCIAL: Elliott Urges Ally Against ResCap Bankruptcy
------------------------------------------------------------
American Bankruptcy Institute reports that Hedge fund Elliott
Management sent a letter to Ally Financial's board last week
saying a bankruptcy filing for its mortgage subsidiary would
trigger a protracted legal battle against the lender and make its
proposed public offering "nearly impossible" for several years.
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%.
Ally 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.
Ally'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.
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 said it 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.
Ally also said that, 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.
* * *
In February 2012, Fitch Ratings downgraded the long-term Issuer
Default Rating (IDR) and the senior unsecured debt rating of Ally
Financial and its subsidiaries to 'BB-' from 'BB'. The Rating
Outlook is Negative.
The downgrade primarily reflects deteriorating operating trends in
ResCap, which has continued to be a drag on Ally's consolidated
credit profile, as well as exposure to contingent mortgage-related
rep and warranty and litigation issues tied to ResCap, which could
potentially impact Ally's capital and liquidity levels.
AMACORE GROUP: To Amend 2009 Financials Due to Accounting Errors
----------------------------------------------------------------
The Amacore Group, Inc., in November 2010, received a comment
letter from the Securities and Exchange Commission with respect to
the Company's Annual Report on Form 10-K for the year ended
Dec. 31, 2009, and certain other filings the Company made with the
SEC.
In addition to requesting that certain disclosures be modified,
the comment letter also raised a number of accounting issues,
including whether the Company properly classified and accounted
for certain redeemable convertible preferred stock, options and
warrants in its financial statements for the year ended Dec. 31,
2009. While the Company has not yet completed its review of the
accounting and other issues raised by the SEC in the comment
letter or responded to the SEC comment letter, on March 23, 2012,
the Company's Board of Directors concluded that the Company had
improperly classified and accounted for all or some of the
Convertible Securities in its previously issued financial
statements for the year ended Dec. 31, 2009, and the quarterly
periods ended June 30, and Sept. 30, 2009, and March 31 and June
30, 2010. As a result, on the same date, the Board of Directors
concluded that the Subject Financial Statement should no longer be
relied upon.
The Company has outstanding an aggregate of 4,455 shares of Series
A, G, H, I and L convertible Preferred Stock. Subject to the
terms and conditions of the Preferred Stock, it is convertible
into the Company's Class A Common Stock at the option of the
holder of the Preferred Stock. In addition, the Company has
outstanding various options and warrants exercisable for the
Company's Class A Common Stock. The Company currently does not
have a sufficient number of authorized, but unissued shares of
Class A Common Stock to satisfy the conversion of all the
outstanding Convertible Securities. As a result of the Company's
insufficient number of authorized, but unissued shares of Class A
Common Stock to settle the conversions of the Convertible
Securities, the Company believes that its redeemable convertible
preferred stock should have been classified as mezzanine equity
rather than as permanent equity and options and warrants that were
classified as permanent equity should have been fair valued and
re-classified as liabilities on the Company's balance sheets in
the Subject Financial Statements under United States Generally
Accepted Accounting Principles.
The Company is currently reviewing the classification of the
Company's Convertible Securities and has not yet determined the
impact any misclassification of the Convertible Securities may
have had on the Company's financial statements. However, the
Company believes that the impact was material and that the Subject
Financial Statements will have to be restated. In addition, in
its review of the other accounting issues raised by the SEC in its
November, 2010, comment letter, the Company may conclude that
there are also other accounting issues that require a restatement
of the Subject Financial Statements. The Company at this time is
unable to predict when it will be able to file restated financial
statements.
About The Amacore Group
Based in Maitland, Florida, The Amacore Group, Inc., (OTC BB:
ACGI) -- http://www.amacoregroup.com/-- is primarily a provider
and marketer of healthcare related products, including healthcare
benefits, vision and dental networks, and administrative services
such as billing, fulfillment, patient advocacy, claims
administration and servicing.
* * *
In its March 31, 2010 report, McGladrey & Pullen, LLP in Orlando,
Florida, raised substantial doubt about the Company's ability to
continue as a going concern. The auditor said the Company has
suffered recurring losses from operations and has not generated
sufficient cash flows from operations to meet its needs.
The Company's balance sheet at June 30, 2010, showed $8,595,986 in
total assets, $25,985,443 in total liabilities, and a $17,147,252
stockholders' deficit.
Amacore Group last filed financial statements with the SEC in
August 2010, when the company submitted its Form 10-Q for the
quarter ended June 30 2010.
AMARU INC: Wilson Morgan Replaces Mendoza Berger as Accountant
--------------------------------------------------------------
Amaru, Inc., on Feb. 3, 2011, received a notice from its
independent registered public accounting firm, Mendoza Berger &
Company, LLP, that it had resigned due to a change in the firm's
organization structure, effective as of that date.
The Company's Board of Directors accepted that resignation on
Feb. 6, 2012.
Mendoza Berger's audit reports on the financial statements of the
Company for the years ended Dec. 31, 2010, and 2009 did not
contain an adverse opinion or a disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope, or
accounting principles, other than an explanatory paragraph
regarding the Company's ability to continue as a going concern.
On Feb. 8, 2012, the Company retained Wilson Morgan LLP as the
Company's new independent registered public accounting firm. This
engagement was approved by the Board of Directors.
During the years ended Dec. 31, 2010, and 2009 and any subsequent
interim period through the March 26, 2012, the Company has not
consulted with Wilson Morgan LLP regarding the application of
accounting principles related to a specified transaction, either
completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements or as to any
disagreement or reportable event as described in Item
304(a)(1)(iv) and Item 304(a)(1)(v) of Regulation S-K under the
Securities Act of 1933, as amended.
About Amaru Inc.
Singapore-based Amaru, Inc., a Nevada corporation, is in the
business of broadband entertainment-on-demand, streaming via
computers, television sets, PDAs (Personal Digital Assistant) and
the provision of broadband services. The Company's business
includes channel and program sponsorship (advertising and
branding); online subscriptions, channel/portal development
(digital programming services); content aggregation and
syndication, broadband consulting services, broadband hosting and
streaming services and E-commerce.
The Company's balance sheet at Sept. 30, 2011, showed
$2.86 million in total assets, $3.42 million in total liabilities,
and a $566,201 total stockholders' deficit.
As reported in the TCR on April 26, 2011, Mendoza Berger &
Company, LLP, in Irvine, California, expressed substantial doubt
about Amaru, Inc.'s ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has sustained accumulated losses from
operations totaling $38.5 million at Dec. 31, 2010.
AMERICAN AIRLINES: Parties Agree on Retiree Committee Formation
---------------------------------------------------------------
Judge Sean H. Lane approved a stipulation directing the
appointment under Section 1114(d) of the Bankruptcy Code of an
official committee of American Airlines retired employees. The
parties to the stipulation are:
-- AMR Corp. and its affiliates;
-- the Official Committee of Unsecured Creditors;
-- AMR Retirees Pension Protection Corporation;
-- the Ad Hoc Committee of Passenger Service Agents;
-- AMRRC Inc.;
-- Transport Workers Union of America, AFL-CIO;
-- U.S. Grey Eagles, Inc.; and
-- the Association of Professional Flight Attendants
The stipulation resolves the motions of AMR Retirees Pension
Protection Corporation and Ad Hoc Committee of Passenger Service
Agents to form a retirees committee.
In an effort to reach consensus as to the Motions, the Parties
engaged in good-faith negotiations that culminated in the
agreement of the Parties to the formation of a Retiree Committee,
subject to certain reservations of rights.
Specifically, the Court will order the appointment of a single
committee of the Debtors' retired employees consisting of retired
unionized and non-unionized employees pursuant to Sections
1114(c) and (d). Appointment of a single Retiree Committee is
without prejudice to the right of any Party or other party-in-
interest to subsequently seek appointment of a second retiree
committee.
The U.S. Trustee for Region 2 will appoint the non-unionized
members of the Retiree Committee. The U.S. Trustee will file a
statement with the Court that (a) identifies the names and
affiliations of the non-unionized members of the Retiree Committee
appointed pursuant to Section 1114(d); (b) identifies the
procedure used to solicit the authorized representatives pursuant
to the Stipulation and Order together with such other information
as the U.S. Trustee may deem appropriate; and (c) provides a
recommendation to the Court of the names and affiliations of
Authorized Representatives that the Court may appoint to the
Retiree Committee pursuant to Section 1114(c).
The scope of duties and rights of the Retiree Committee will be
consistent with and governed by Section 1114, but without
prejudice to any challenge by any party-in-interest as to whether
Section 1114 applies to the Other Post-Employment Benefits
proposed to be modified or otherwise terminated by the Debtors or
whether the modification or termination of such OPEB is within
the scope of the duties of the Retiree Committee.
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, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the 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: Starts Process for Ending 9 CBAs
---------------------------------------------------
AMR Corporation, American Airlines, Inc. and their debtor-
affiliates seek permission from Judge Sean H. Lane of the U.S.
Bankruptcy Court for the Southern District of New York to reject
nine separate collective bargaining agreements.
American has roughly 65,000 active employees, 70% of whom are
represented by one of three labor unions under nine separate CBAs.
American began negotiations after outlining its $2 billion
restructuring plan, which primarily entails $1.25 billion in
annual labor cost savings and 13,000 job cuts, David McLaughlin
and Mary Schlangenstein of Bloomberg News reported.
At a March 22, 2012 hearing, American told the Court that it plans
to reject labor contracts after failing to reach a deal to cut
labor costs, Bloomberg noted. "We must start the process if we
are going to bring these cases to a successful conclusion within a
reasonable period of time," Harvey R. Miller, Esq., at Weil,
Gotshal & Manges LLP, in New York, counsel to the Debtors, told
Judge Lane on March 22.
"With losses mounting and oil prices rising, there is growing
urgency to move more quickly," AMR Chief Executive Officer Thomas
W. Horton said in a March 27, 2012 letter to employees.
Mr. Horton noted that while the Company is pursuing the rejection
of contracts under Section 1113 of the Bankruptcy Code, he
recognized that the best outcome is consensually negotiated new
contracts. "This will remain the ultimate objective of all
parties as we proceed and we will continue to work with our union
negotiating committees to reach agreement," the CEO said.
A full-text copy of CEO Horton's Letter is available for free
at http://bankrupt.com/misc/AMRCEOMarch27Letter.pdf
Sec. 1113 Rejection is Necessary
for Company's Enterprise Viability
In court papers dated March 27, the Debtors specifically seek to
reject CBAs with the Allied Pilots Association, the Association of
Professional Flight Attendants, and the Transport Workers Union of
America, AFL-CIO, pursuant to Section 1113(c).
Mr. Miller said the Debtors' proposed rejection of the CBAs rests
on three unpleasant but undeniable facts:
(1) American Airlines, Inc. will not survive if it does not
restructure. American lost $1.06 billion in 2011, bringing
its cumulative losses since 2001 to more than $10 billion.
American has financed these persistent losses by borrowing
money -- accumulating a total of $16.8 billion in debt as
of 2011.
(2) While American has been staggering with billions in losses
and a crushing debt load, its long-time competitors have
reorganized in Chapter 11 and have thrived: Delta, United,
and US Airways were all profitable in 2011. In 2000,
American was the largest passenger airline in the world,
measured by capacity; today American ranks fourth, behind
post-merger, post-bankruptcy rivals United and Delta.
(3) Although American's financial peril has multiple sources,
the greatest single challenge is its labor agreements.
Collectively, American's collective bargaining agreements
with the Unions saddle the Company with the highest labor
costs in the industry.
AMR notes there exists to be an overall $600 million to
$800 million labor cost gap between American and other carriers.
Mr. Miller related American has negotiated for years with
each of its unions to remedy these structural impediments to
profitability, but those negotiations have failed to produce
results. In addition to imposing higher direct labor costs,
American's CBAs contain an array of archaic rules and other
restrictions that constrain American's ability to generate
revenues and shackle it to operations that cannot be economically
justified, he pointed out.
"If American is to survive -- if it is to continue to provide its
employees with good jobs -- it must be allowed to deploy its
people and its other assets rationally, as its competitors do now
and as businesses in nearly every other industry take for
granted," Mr. Miller told the Court. With these CBAs in place,
American cannot successfully reorganize, he insisted.
American's Business Plan, Mr. Miller noted, is built on non-labor
cost reductions in every aspect of its business -- some already
accomplished, some that lie ahead in these cases -- and
fundamentally contemplates cost reductions from all employee
groups, union and non-union alike. "Without these labor cost
reductions, American will be unable to exit Chapter 11 as a going
concern because it will not be able to attract the capital it
needs to operate," he asserted.
To achieve the Business Plan's contemplated $1.25 billion annual
labor cost reductions, American proposed that each employee group
-- management, non-union and unionized -- bear an equal share of
the necessary reductions: an approximate 20% reduction in their
current total labor costs. Based on this calculation, American
seeks an annual cost savings average of:
* $370 million from pilots;
* $230 million from flight attendants;
* $235 million from mechanics & related employees, stock clerks
and maintenance control technicians; and
* $159 million from fleet service employees, dispatch, ground
school & simulator instructors and simulator technicians
If the Court does not grant the relief sought here, American will
have no viable business enterprise, Mr. Miller emphasized. It is
important to note that, even if American implements the Section
1113 Proposals, American's employees will still have good pay and
benefits in comparison with most other workers in the United
States, and comparable to, or better than, those at many other
U.S. airlines, he stated. Indeed, American understands that to
be successful in the long run it needs agreements with its
Unions, he said.
American hopes that the Court is never required to decide this
motion, because it hopes that the Motion will facilitate
bargained-for solutions for each employee group, Mr. Miller
added. Nonetheless, American's survival hinges on its success in
promptly resolving this indispensable element of its
reorganization, he stressed. American hopes that this motion
accelerates that process, he added.
"Achieving the savings and entrepreneurial freedoms set out in
the Company's Section 1113 Proposals is necessary to American's
successful reorganization," Mr. Miller maintained.
The Debtors prepared memoranda of law in support of their Section
1113 Motion, full-text copies of which are available for free at:
http://bankrupt.com/misc/AmAir_APACBARejMemo.pdf
http://bankrupt.com/misc/AMAir_APFACBAMemo.pdf
http://bankrupt.com/misc/AmAir_TWUMechanicsCBAMemo.pdf
http://bankrupt.com/misc/AmAir_TWUFleetServiceCBAMemo.pdf
The Court will consider the Debtors' bid to reject the CBAs on
April 10, 2012; however, Judge Lane could push back the hearing to
April 17, The Wall Street Journal noted. The Journal cited a
provision of the Bankruptcy Code, wherein a just must issue a
ruling within 30 days of the beginning of the hearing, unless
parties agree to extend the deadlines. The Journal noted that in
most cases, the companies and their unions managed to agree on
concessions and the unions preserved contractual protections.
Objections are due no later than April 3.
In conjunction, the Debtors seek the Court's permission to file
under seal documents in connection with the Sec. 1113 Motion.
The Confidential Material contains sensitive and confidential
information that should not be publicly disclosed, and the
disclosure of which could harm the Debtors, Mr. Miller said. The
documents proposed to be filed under seal are:
* Declarations of Beverly K. Goulet; Visrasb Vahidi; David L.
Resnick; Alex Dichter; Carolyn E. Wright; Brian McMenamy;
Dennis Newgren; and
* Memoranda in Support of Section 1113 Motion.
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, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the 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: Eagle to Fire 600, Reduce Union Costs
--------------------------------------------------------
AMR Eagle Holding Corporation, the wholly owned, regional airline
subsidiary of AMR Corporation, posted a restructuring update on
March 12, 2012.
The American Eagle restructuring plan aims to reduce union annual
spending by $75 million and cut 600 jobs, according to The Wall
Street Journal. The Journal noted that AMR did not detail plans
for American Eagle when it unveiled its proposal at American on
Feb. 1.
American Eagle said that provided it reaches consensual
agreements, its plan is for employees to share in its success
with a new profit sharing plan, beginning at the first dollar of
pre-tax income. Proceeds will be distributed based on salary
earned during the year.
Robert Barrow, president of the Association of Flight Attendants-
CWA at American Eagle, said in a statement: "It is outrageous
that American Eagle flight attendants are facing an attack on
their contract simply because the cloak of bankruptcy allows for
it," Martin Bricketto of BankruptcyLaw360 wrote on March 21.
A presentation of American Eagle's restructuring plan filed with
the U.S. Securities and Exchange Commission is available for free
at http://is.gd/JyWKOG
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, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the 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: Unions Prepared to Fight Rejection of CBAs
-------------------------------------------------------------
In the wake of AMR Corp.'s proposal to reject collective
bargaining agreements, unions say they are prepared to preserve
their rights to wages and benefits.
Transport Workers Union President James C. Little said AMR's
court filing does not change the fact that TWU negotiators are
still at the bargaining table trying to work out an agreement
with the company, The Wall Street Journal reported. The TWU is,
however, prepared to appear before the Court "to vigorously
represent our members in court and explore options," Mr. Little
told The Journal.
Capt. Dave Bates, president of the Allied Pilots Association,
said in a memo that AMR's recent move is "emblematic of their
refusal to commit to good-faith bargaining," The Journal relayed.
The union leader said the union is absolutely committed to
identifying the best available alternatives to secure a contract
that is at the every least comparable to what our network peers
obtained in restructuring," the report added.
Flight Attendants Union's President Laura Glading accused
American of "overreaching" and said the union will use "every
available resource" to preserve wages and benefits, Bloomberg
News relayed, citing a public statement. "The company can
succeed only if it convinces the judge that the contract changes
are necessary, fair and equitable," Ms. Glading asserted. "In
reality, its Draconian demands are none of those things."
"I don't see how they have a choice," Anthony Sabino, a professor
at St. John's University, said about AMR's recent move, Bloomberg
relayed. Mr. Sabino noted that the parties face risks if the
request to reject the contracts leads to a prolonged court
battle, Bloomberg said. He also predicted American and its
unions will eventually reach a deal, the report noted.
Stamford, Connecticut-based independent airline analyst Jeff
Straebler said that a deadline will focus the union leadership
teams, Bloomberg related. "It will come down to their making a
choice of getting the best deal in negotiations or rolling the
dice with the judge." Bloomberg added that rejecting the
contracts may put American at risk of takeover attempts as
suitors offer workers less drastic terms.
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, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the 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: US Airways Said to Talk Merger With Creditors
----------------------------------------------------------------
US Airways Group Inc. is discussing a merger plan with some
creditors of American Airlines Inc. and their advisers, said
people knowledgeable of the talks, Mary Schlangenstein and
Jeffrey McCracken of Bloomberg News reported.
US Airways CEO Doug Parker confirmed that they have hired
advisers to investigate the American situation, the report noted.
"That work continues, I suspect it will for quite some time."
Executives have laid out details of US Airways' proposal for a
combined airline to some members of AMR's Official Committee of
Unsecured Creditors and gotten a positive reception, disclosed
the people, who declined to be named because of the private
nature of the talks, Bloomberg relayed. The goal, said the
people, would be to complete a merger before AMR exits
bankruptcy, the report added.
Bloomberg recalled that US Airways has been making the overtures
as American works toward its target of exiting Chapter 11 as a
standalone company. US Airways has said it learned the value of
labor and creditor backing after its hostile bid for Delta Air
Lines Inc. collapsed in 2007, said Bloomberg.
Hunter Keay, an analyst at New York-based Wolfe Trahan & Co.,
noted that US Airway's move is all part of the bigger plan to win
"the hearts and minds of the major stakeholders of AMR,"
Bloomberg said. "There's probably a lot of fear and uncertainty
among the unsecured creditors committee right now and they are
exploring their options," the report relayed.
Mr. Keay added that the leverage pendulum has swung fairly
decisively towards US Airways "if the company should choose to
come to AMR's labor groups with alternatives to what's probably
going to be fairly draconian cuts," Bloomberg relayed. Tom
Hoban, on behalf of the Allied Pilots Association, said that if
the union could not reach a consensual labor agreement with AMR,
the group might be willing to work with new management as a
result of the merger, the report added.
AMR spokesperson Andy Backover maintained that the company
remains focus on its own plan "to achieve revenue growth and debt
structure," said in a statement to Bloomberg. US Airways
spokesperson Todd Lehmacher said the airline has no comment.
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, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the 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 APPAREL: Has New 3-Year Contract with CEO Dov Charney
--------------------------------------------------------------
American Apparel, Inc., and Dov Charney, the Company's Chairman
and Chief Executive Officer, entered into a new employment
agreement. Under the Employment Agreement, Mr. Charney will
continue to serve as the Company's Chief Executive Officer for an
initial term of three years commencing on April 1, 2012. The term
will automatically extend for successive one-year periods unless
earlier terminated by the Company.
Mr. Charney will receive a minimum base salary of $800,000 per
year, subject to increase based on an annual Compensation
Committee review. Mr. Charney also will be eligible to receive an
annual incentive compensation award with a target payment equal to
150% of his base salary during the relevant year. That award will
be subject to the terms of the Company's annual bonus plan and
other criteria set by the Company's Board of Directors or
Compensation Committee.
The Employment Agreement also provides that Mr. Charney will be
granted 7,500,000 shares of the Company's common stock upon the
achievement of specified EBITDA-related performance goals. If the
issuance of all or a portion of such stock award would not be
exempt from the deduction limitations of Section 162(m) of the
Internal Revenue Code, the Board may provide for a cash award in
an amount sufficient for Mr. Charney to purchase such number of
shares in the open market.
Mr. Charney will also participate in the benefit plans that the
Company maintains for its executives and receive certain other
standard benefits.
The Employment Agreement also provides that upon termination of
Mr. Charney's employment for any reason, he agrees to resign, as
of the date of such termination and to the extent applicable, from
the boards of directors (and any committees) of, and as an officer
of, the Company and any of the Company's affiliates and
subsidiaries.
A copy of the Employment Agreement is available for free at:
http://is.gd/A2xzlD
About American Apparel
Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP)
-- http://www.americanapparel.com/-- is a vertically integrated
manufacturer, distributor, and retailer of branded fashion basic
apparel. As of September 2010, American Apparel employed over
10,000 people and operated 278 retail stores in 20 countries,
including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the
Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan,
South Korea and China.
Amid liquidity problems and declining sales, American Apparel in
early 2011 reportedly tapped law firm Skadden, Arps, Slate,
Meagher & Flom and investment bank Rothschild Inc. for advice on a
restructuring.
In April 2011, American Apparel said it raised $14.9 million in
rescue financing from a group of investors led by Canadian
financier Michael Serruya and private equity firm Delavaco Capital
Corp., allowing the casual clothing retailer to meet obligations
to its lenders for the time being. Under the deal, the investors
were buying 15.8 million shares of common stock at 90 cents
apiece. The deal allows the investors to purchase additional 27.4
million shares at the same price
Going Concern Doubt
Marcum LLP, in New York, in its audit report on American Apparel's
financial statements for the year ended Dec. 31, 2010, expressed
substantial doubt about the Company's ability to continue as a
going concern.
The Company also reported a net loss of $28.15 million on
$389.76 million of net sales for the nine months ended Sept. 30,
2011, compared with a net loss of $67.01 million on
$389.02 million of net sales for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $323.64
million in total assets, $267.51 million in total liabilities and
$56.12 million in total stockholders' equity.
Bankruptcy Warning
According to the Form 10-Q for the quarter ended Sept. 30, 2011,
the Company incurred a loss from operations of $20,942 for the
nine months ended Sept. 30, 2011, compared to a loss from
operations of $38,167 for the nine months ended Sept. 30, 2010.
The current operating plan indicates that losses from operations
will be incurred for all of fiscal 2011. Consequently, the
Company may not have sufficient liquidity necessary to sustain
operations for the next twelve months and this raises substantial
doubt that the Company will be able to continue as a going
concern.
The Company said there can be no assurance that management's plan
to improve its operating performance and financial position will
be successful or that the Company will be able to obtain
additional financing on commercially reasonable terms or at all.
As a result, the Company's liquidity and ability to timely pay its
obligations when due could be adversely affected. Any new
financing also may be substantially dilutive to existing
stockholders and may require reductions in exercise prices or
other adjustments of the Company's existing warrants.
Furthermore, the Company's vendors and landlords may resist
renegotiation or lengthening of payment and other terms through
legal action or otherwise. If the Company is not able to timely,
successfully or efficiently implement the strategies that it is
pursuing to improve its operating performance and financial
position, obtain alternative sources of capital or otherwise meet
its liquidity needs, the Company may need to voluntarily seek
protection under Chapter 11 of the U.S. Bankruptcy Code.
AVISTAR COMMUNICATIONS: Offering 1.6MM Shares Under Equity Plan
---------------------------------------------------------------
Avistar Communications Corporation filed with the U.S. Securities
and Exchange Commission a Form S-8 relating to the offering of
1.6 million common shares to be issued under the 2009 Equity
Incentive Plan. The proposed maximum aggregate offering price is
$602,974. A copy of the prospectus is available for free at:
http://is.gd/LwQxd6
About Avistar Communications
Headquartered in San Mateo, California, Avistar Communications
Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a
portfolio of 80 patents for inventions in video and network
technology and licenses IP to videoconferencing, rich-media
services, public networking and related industries. Current
licensees include Sony Corporation, Sony Computer Entertainment
Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and
Emblaze-VCON.
The Company reported a net loss of $6.43 million in 2011, compared
with net income of $4.45 million during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $5.16 million
in total assets, $18.10 million in total liabilities, and a
$12.93 million total stockholders' deficit.
AXION INTERNATIONAL: BDO USA Replaces RBSM LLP as Accountant
------------------------------------------------------------
The Board of Directors of Axion International Holdings, Inc.,
replaced RBSM LLP as the Company's independent registered public
accounting firm, and appointed BDO USA, LLP, as the Company's new
independent registered public accounting firm.
RBSM LLP's reports on the Company's consolidated financial
statements for the three-month transitional period ended Dec. 31,
2010, and for the fiscal year ended Dec. 31, 2011, did not contain
an adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or
accounting principles.
The reports of RBSM LLP on the Company's financial statements for
each of the three-month transitional period ended Dec. 31, 2010,
and fiscal year ended Dec. 31, 2011, contained an explanatory
paragraph, which noted that there was substantial doubt about the
Company's ability to continue as a going concern.
During the three-month transitional period ended Dec. 31, 2010,
and the fiscal year ended Dec. 31, 2011, and through the Dismissal
Date, there were no disagreements between the Company and RBSM LLP
on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to RBSM LLP's satisfaction, would
have caused them to make reference thereto in their reports on the
Company's financial statements for those periods.
During the two most recent fiscal years and through the current
date, neither the Company nor anyone on its behalf consulted with
BDO regarding the application of accounting principles to a
specified transaction or the type of audit opinion that might be
rendered on the Company's financial statements.
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.
RBSM LLP, in New York, the auditor, issued a going concern
qualification each in the Company's financial statements for the
years ended Dec. 31, 2010 and 2011. RBSM LLP noted that the
Company has incurred significant operating losses in current year
and also in the past. These factors, among others, raise
substantial doubt about the Company's ability to continue as a
going concern, it said.
Axion International reported a net loss of $8.06 million on $3.88
million of revenue for the 12 months ended Dec. 31, 2011, compared
with a net loss of $7.10 million on $1.56 million of revenue for
the 12 months ended Sept. 30, 2010.
The Company's balance sheet at Dec. 31, 2011, showed $5.54 million
in total assets, $2.86 million in total liabilities, $6.80 million
in 10% convertible preferred stock, $242,500 in redeemable common
stock, and a $4.36 million total stockholders' deficit.
BAUSCH AND LOMB: Moody's Says ISTA Acquisition Credit Negative
--------------------------------------------------------------
Moody's Investors Service said that Bausch and Lomb's announced
acquisition of ISTA Pharmaceuticals is credit negative although
there is no impact on Bausch's ratings, including its B2 CFR, at
this time.
Bausch & Lomb Incorporated, headquartered in Rochester, New York,
is a leading worldwide provider of eye care products, including
contact lens, lens care, ophthalmic pharmaceuticals, and surgical
products.
BERNARD L. MADOFF: UniCredit Wants Case in District Court Again
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that, even though UniCredit SpA and subsidiary UniCredit
Bank Austria AG won dismissal in federal district court of most of
the $59 billion in claims brought by the trustee liquidating
Bernard L. Madoff Investment Securities Inc., the bank wants the
bulk of the remainder of the suit reverted to district court.
Mr. Rochelle recounts that the Madoff trustee argued that Bank
Medici AG and Sonja Kohn, its founder, worked hand-in-hand with
Madoff as far back as the mid-1980s. UniCredit and its
affiliates, according to the trustee's complaint, were part of the
scheme for funneling money into the Madoff firm through feeder
funds. When U.S. District Judge Jed Rakoff dismissed most of the
suit in February, he sent the remainder of the claims back to the
bankruptcy judge for further processing.
According to the report, UniCredit filed a motion to have most the
remaining claims taken back to district court. The bank said the
remaining case involves non-bankruptcy law questions of whether
transfers from a non-U.S. feeder fund are immune from attack under
U.S. law. The bank also argues that the transfers are immune from
clawback under U.S. bankruptcy law because they were payments on
account of securities.
The UniCredit case in bankruptcy court is Picard v. Kohn,
10-05411, U.S. Bankruptcy Court, Southern District of New York
(Manhattan).
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of Feb. 17, 2012 and in the 38 months since his appointment,
the SIPA Trustee has recovered or entered into agreements to
recover more than $9 billion, representing roughly 52% of the
roughly $17.3 billion in principal estimated to have been lost in
the Ponzi scheme by BLMIS customers who filed claims. The
recoveries exceed prior restitution efforts related to Ponzi
schemes both in terms of dollar value and percentage of stolen
funds recovered. Pro rata distributions from the Customer Fund to
BLMIS customers whose claims have been allowed by the SIPA Trustee
totaled $325.7 million.
Mr. Picard has filed 1,000 lawsuits seeking $100 billion from
banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The
trustee has seen more than $28 billion of his claims tossed by
district judges.
CASCADE BANCORP: Incurs $47.3 Million Net Loss in 2011
------------------------------------------------------
Cascade Bancorp filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$47.27 million on $67.10 million of total interest and dividend
income in 2011, a net loss of $13.65 million on $84.98 million of
total interest and dividend income in 2010, and a net loss of
$114.83 million on $106.81 million of total interest and dividend
income in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $1.30 billion
in total assets, $1.17 billion in total liabilities and $132.88
million in total stockholders' equity.
A copy of the Form 10-K is available for free at:
http://is.gd/IeBdEc
About Cascade Bancorp
Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its
wholly-owned subsidiary, Bank of the Cascades, offers full-service
community banking through 32 branches in Central Oregon, Southern
Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho.
Cascade Bancorp has no significant assets or operations other than
the Bank.
Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank
of The Cascades. The rating company says that the institution
currently demonstrates what it considers to be significant
weaknesses and has also failed some of the basic tests it uses to
identify fiscal stability. "Even in a favorable economic
environment," Weiss says, "it is our opinion that depositors or
creditors could incur significant risks." As of March 31, 2010,
the bank's balance sheet showed $2.088 billion in assets.
BIOLIFE SOLUTIONS: Incurs $41,000 Net Loss in Fourth Quarter
------------------------------------------------------------
BioLife Solutions, Inc., reported a net loss of $411,170 on
$809,564 of total revenue for the three months ended Dec. 31,
2011, compared with a net loss of $470,638 on $575,994 of total
revenue for the same period during the prior year.
The Company reported a net loss of $1.95 million on $2.75 million
of total revenue in 2011, compared with a net loss of $1.98
million on $2.08 million of total revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.16 million
in total assets, all current, $12.84 million in total liabilities
and a $11.18 million total shareholders' deficiency.
Mike Rice, Chief Executive Officer, commented on the outlook for
BioLife by stating, "We had very strong growth in 2011 and expect
this momentum to accelerate in 2012. Our best-in-class
proprietary biopreservation media products are now used by
hundreds of customers in the regenerative medicine, biobanking,
and drug discovery markets. This continued product adoption,
along with a significant contract manufacturing customer we gained
late in 2011, will enable BioLife to grow total revenue by 50%
over 2011."
A copy of the press release is available for free at:
http://is.gd/5pVHl9
About BioLife Solutions
Bothell, Washington-based BioLife Solutions, Inc. develops and
markets patented hypothermic storage and cryopreservation
solutions for cells, tissues, and organs, and provides contracted
research and development and consulting services related to
optimization of biopreservation processes and protocols.
The Company has been unable to generate sufficient income from
operations in order to meet its operating needs and has an
accumulated deficit of approximately $53 million at June 30, 2011.
This raises substantial doubt about the Company's ability to
continue as a going concern.
Peterson Sullivan LLP, in Seattle, Wash., expressed substantial
doubt about the Company's ability to continue as a going concern,
following the 2010 financial results. The accounting firm noted
that the Company has been unable to generate sufficient income
from operations in order to meet its operating needs and has an
accumulated deficit of approximately $52 million at Dec. 31, 2010.
BIOCORAL INC: Delays 2011 Annual Report
---------------------------------------
Biocoral Inc. informed the U.S. Securities and Exchange Commission
that it will be late in its Annual Report on Form 10-K for the
period ended Dec. 31, 2011.
About Biocoral, Inc.
Headquartered in La Garenne Colombes, France, Biocoral, Inc.
-- http://www.biocoral.com/-- was incorporated under the laws of
the State of Delaware on May 4, 1992. Biocoral is a holding
company that conducts its operations primarily through its wholly-
owned European subsidiaries. The Company's operations consist
primarily of research and development and manufacturing and
marketing of patented high technology biomaterials, bone
substitute materials made from coral, and other orthopedic, oral
and maxillo-facial products, including products marketed under the
trade name of Biocoral. Most of the Company's operations are
conducted from Europe. The Company has obtained regulatory
approvals to market its products throughout Europe, Canada and
certain other countries. The Company owns various patents for its
products which have been registered and issued in the United
States, Canada, Japan, Australia and various countries throughout
Europe. However, the Company has not applied for the regulatory
approvals needed to market its products in the United States.
As reported by the TCR on April 11, 2011, Michael T. Studer CPA
P.C., in Freeport, New York, expressed substantial doubt about
Biocoral's ability to continue as a going concern. Mr. Studer
noted that the Company had net losses of approximately $703,300
and $452,600 in 2010 and 2009, respectively. "The Company had a
working capital deficiency of approximately $2,125,700 and
$1,585,300, at Dec. 31, 2010, and 2009, respectively. The Company
also had a stockholders' deficit of approximately $4,734,700 and
$4,040,800 at Dec. 31, 2010, and 2009, respectively."
The Company also reported a net loss of $591,487 on $208,822 of
net sales for the nine months ended Sept. 30, 2011, compared with
a net loss of $485,577 on $212,079 of net sales for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$1.57 million in total assets, $6.90 million in total liabilities,
and a $5.33 million total stockholders' deficit.
CENGAGE LEARNING: S&P Rates $575-Mil. Senior Secured Notes 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned Stamford, Conn.-based
Cengage Learning Acquisitions Inc.'s $575 million Rule 144A senior
secured notes due 2020 its issue-level rating of 'B' (one notch
higher than the 'B-' corporate credit rating on parent Cengage
Learning Holdings II L.P.). "We also assigned the notes a recovery
rating of '2', indicating our expectation of substantial (70% to
90%) recovery for lenders in the event of a payment default. We
expect that the company will use proceeds from the notes to repay
30% of its extended term loan due 2017 at par, which is a
condition to the credit facility's amendment and extension being
effective. Cengage Learning Holdings II L.P.'s total debt was $5.5
billion as of Dec. 31, 2011," S&P said.
"The corporate credit rating on Cengage Learning Holdings II L.P.
is 'B-' and the rating outlook is stable. The rating reflects our
expectation that debt to EBITDA (after amortization of
prepublication costs) will remain high at more than 8x over the
near term, though operating performance will remain relatively
stable. We view Cengage's financial risk profile as 'highly
leveraged' as per our criteria, reflecting high debt to EBITDA,
thin pro forma interest coverage, and low discretionary cash flow
compared with its debt burden," S&P said.
"We consider the company's business risk profile as 'fair,' based
on Cengage's strong business position in U.S. higher education and
professional training publishing. The company is the second-
largest U.S. college textbook publisher, and has a good market
position in the new textbook market. The growth of the rental
textbook market, which has increased the availability of
discounted used books, has adversely affected Cengage and its
competitors. The company is also exhibiting declining sales to
for-profit educational institutions, which are experiencing
enrollment pressures as a result of regulation that significantly
tightens their marketing practices. In addition, lower funding
from state and local governments continues to hurt the company's
library reference business, though this is a small contributor to
revenues," S&P said.
"The rating outlook is stable. Prospects of increasing enrollments
over the intermediate term, relatively stable operating
performance, and positive discretionary cash flow generation
should help the company to slowly reduce leverage. Still, we could
downgrade the rating to 'CCC+' if we become convinced that revenue
and EBITDA will not grow as we currently expect, that leverage
will increase to above 9x, or that discretionary cash flow will
swing negative. This scenario could occur if enrollments decline
or pressure increases from textbook rentals, and weakness in the
library reference business continues. In this case, an EBITDA
decline of 10% over the next year would reduce pro forma EBITDA
coverage of total interest (after prepublication costs) to only
1.1x. Although a more remote possibility, we could raise the
rating to 'B' if the company resumes sustainable EBITDA growth,
generates increasing discretionary cash flow, and restores
interest coverage to about 1.5x," S&P said.
RATINGS LIST
Cengage Learning Holdings II L.P.
Corporate Credit Rating B-/Stable/--
New Rating
Cengage Learning Acquisitions Inc.
$575M Rule 144A sr secd nts due 2020 B
Recovery Rating 2
CENTURYLINK INC: S&P Retains 'BB' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB-' issue-level
rating and '1' recovery rating to Qwest Corp.'s proposed senior
notes. "The '1' recovery rating indicates our expectation for very
high (90% to 100%) recovery in the event of payment default. The
company intends to use proceeds from the notes, along with
available cash or additional borrowings under parent CenturyLink
Inc.'s revolving credit facility, to fund its tender offer to
spend up to $500 million to purchase certain of its outstanding
notes due 2015 and 2016. Qwest is a subsidiary of Monroe, La.-
based telecommunications carrier CenturyLink," S&P said.
"The long-term corporate credit rating on CenturyLink is unchanged
at 'BB' and the rating outlook remains stable. The rating reflects
significant competition in its core consumer wireline phone
business from cable telephony and wireless substitution; Standard
& Poor's expectation for continued revenue declines because of
ongoing access-line losses, which were about 6.6% annually for the
12 months ended Dec. 31, 2011, pro forma for the Qwest
acquisition; integration risk related to the Qwest and Savvis
acquisitions; and an aggressive shareholder-oriented financial
policy with a substantial dividend payout, which limits debt
reduction," S&P said.
"Tempering factors include a favorable market position as the
third-largest incumbent wireline carrier in the U.S.; solid
operating margins and free cash flow generation; modest growth in
high-speed data services, which helps mitigate revenue declines
from access-line losses; and geographic diversity. We consider the
financial risk profile 'significant', with pro forma adjusted
leverage of about 3.2x as of Dec. 31, 2011. Our leverage
calculation includes the present value of operating leases and
unfunded postretirement obligations," S&P said.
RATINGS LIST
CenturyLink Inc.
Corporate Credit Rating BB/Stable/--
New Ratings
Qwest Corp.
Senior Unsecured nts BBB-
Recovery Rating 1
CHINA DU KANG: Delays Form 10-K for 2011
----------------------------------------
China Du Kang Co., Ltd. advised the U.S. Securities and Exchange
Commission that it won't timely file its annual report on Form 10-
K for year ended Dec. 31, 2011. The auditor has advised that the
audit of the Company's financial statements could not be completed
by the end of the period. The Company plans to file within the
extension period.
About China Du Kang
Headquartered in Xi'an, Shaanxi, in the PRC, China Du Kang Co.,
Ltd., was incorporated as U.S. Power Systems, Inc., in the State
of Nevada on Jan. 16, 1987. The Company is principally engaged in
the business of production and distribution of distilled spirit
with the brand name of "Baishui Dukang". The Company also
licenses the brand name to other liquor manufactures and liquor
stores.
The Company also reported a net loss of $1 million on
$1.96 million of gross revenue for the nine months ended Sept. 30,
2011, compared with a net loss of $895,853 on $1.51 million of
gross revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$14.75 million in total assets, $22.30 million in total
liabilities and a $7.54 million total shareholders' deficit.
As reported in the Troubled Company Reporter on April 14, 2010,
Keith Z. Zhen, CPA, in Brooklyn, N.Y., expressed substantial doubt
about China Du Kang's ability to continue as a going concern,
following the Company's 2009 results. The independent auditor
noted that the Company has incurred an operating loss in 2009 and
2008 and has a working capital deficiency and a shareholders'
deficiency as of Dec. 31, 2009.
CHRIST HOSPITAL: Court Approves Sale to Hudson Hospital
-------------------------------------------------------
Christ Hospital won bankruptcy court approval sell its 367-bed
acute-care hospital in Jersey City to Hudson Hospital Holdco LLC
from Philadelphia.
Hudson Hospital Holdco, LLC has released this statement:
"We are very pleased that the Bankruptcy Court approved our bid
for Christ Hospital, allowing us to move forward with the sale
process. We would like to thank the Board of Christ Hospital for
their confidence in our vision for the future of the hospital. We
also very much appreciate the very vocal support of Christ
Hospital's doctors and staff, numerous senior City and County
officials from Bayonne, Hoboken, Jersey City, and Hudson County,
and the local community, all of whom were instrumental in allowing
this process to move forward.
We believe our vision for the hospital's continuation as a full-
service acute care facility -- and, more broadly, our ability to
include Christ Hospital in our plan to create an integrated
healthcare system for the County -- will be tremendously
beneficial for the residents of Jersey City and the surrounding
communities in Hudson County, as well as for Christ Hospital
physicians and staff.
We recognize the State's demand, made clear during the recent
court proceedings, that the successful bidder implement the
Navigant report as quickly as possible, which will be our focal
point in the immediate term. We are extremely committed to
working with all the healthcare providers in the region toward
what has always been our ultimate common goal: providing access to
the highest quality healthcare for all residents, both insured and
uninsured, of Jersey City and Hudson County."
About Christ Hospital
Christ Hospital filed for Chapter 11 bankruptcy (Bankr. D. N.J.
Case No. 12-12906) on Feb. 6, 2012. Christ Hospital, founded in
1872 by an Episcopalian priest, is a 367-bed acute care hospital
located in Jersey City, New Jersey at 176 Palisade Avenue, serving
the community of Hudson County. The Debtor is well-known for its
broad range of services from primary angioplasty for cardiac
patients to intensity modulated radiation therapy for those
battling cancer. Christ Hospital is the only facility in Hudson
County to offer IMRT therapy, which is the most significant
breakthrough in cancer treatment in recent years.
Christ Hospital filed for Chapter 11 after an attempt to sell the
assets fell through. Judge Morris Stern presides over the case.
Lawyers at Porzio, Bromberg & Newman, P.C., serve as the Debtor's
counsel. Alvarez & Marsal North America LLC serves as financial
advisor. Logan & Company Inc. serves as the Debtor's claim and
noticing agent.
The Health Professional and Allied Employees AFT/AFI-CIO is
represented in the case by Mitchell Malzberg, Esq., at Mitnick &
Malzberg P.C.
DIP lender HFG is represented in the Debtor's case by Benjamin
Mintz, Esq., at Kaye Scholer LLP and Paul R. De Filippo, Esq., at
Wollmuth Maher & Deutsch LLP.
Andrew H. Sherman, Esq., at Sills, Cummis & Gross, serves as
counsel to the Official Committee of Unsecured Creditors. J.H.
Cohn LLP serves as financial advisor to the committee.
Suzanne Koenig of SAK Management Services, LLC, has been appointed
as patient care ombudsman. She is represented by Greenberg
Traurig as counsel.
Hudson Hospital Holdco is represented in the case by McElroy,
Deutsch, Mulvaney & Carpenter, LLP. Community Healthcare
Associates is represented in the case by Lowenstein Sandler PC.
Liberty Healthcare System, Inc., d/b/a Jersey City Medical Center,
which joined in CHA's bid, is represented by Duane Morris LLP.
CIRCLE ENTERTAINMENT: Incurs $5.3 Million Net Loss in 2011
----------------------------------------------------------
Circle Entertainment Inc. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $5.27 million on $0 of revenue in 2011, compared with
net income of $346.81 million on $0 of revenue in 2010.
The Company generated net profit in 2010 after recording a
$390.75 million gain from discharge of net assets of Las Vegas
Property Subsidiary due to a bankruptcy plan.
The Company's balance sheet at Dec. 31, 2011, showed $6.20 million
in total assets, $12.08 million in total liabilities, and a
$5.87 million stockholders' deficit.
L.L. Bradford & Company, LLC, in Las Vegas, Nevada, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has limited available cash, has a working capital deficiency and
will need to secure new financing or additional capital in order
to pay its obligations.
A copy of the Form 10-K is available for free at:
http://is.gd/xfDztM
About Circle Entertainment
Circle Entertainment Inc. (CEXE.PK), formerly FX Real Estate and
Entertainment Inc., owns 17.72 contiguous acres of land located at
the southeast corner of Las Vegas Boulevard and Harmon Avenue in
Las Vegas, Nevada. The Las Vegas Property is currently occupied
by a motel and several commercial and retail tenants with a mix of
short and long-term leases. On June 23, 2009, as a result of the
default under the first mortgage loan, the first lien lenders had
a receiver appointed to take control of the property. The Company
is headquartered in New York City.
The Company's Las Vegas subsidiary filed for Chapter 11 bankruptcy
on April 21, 2010, and a plan of liquidation or reorganization
will eventually be implemented under which the Company will
surrender ownership of the Las Vegas Property. Under such a plan,
it is extremely unlikely the Company will receive any material
interest or benefit.
CIRTRAN CORP: Has Forbearance Agreements with YA Global and ABS
---------------------------------------------------------------
CirTran Corporation has entered into two new Forbearance
Agreements with two creditors.
CirTran said that an amended Forbearance Agreement with YA Global
Investments, L.P. of Jersey City, N.J., includes a loan repayment
schedule that started this month and extends through March 2014.
The agreement relates to debentures issued by CirTran to YA
Global, formerly Cornell Capital Partners, LP, with an aggregate
current outstanding balance of approximately $4.0 million.
CirTran also announced a new Forbearance Agreement with Advanced
Beauty Solutions, LLC (ABS) of Los Angeles, continuing a business
relationship that began in 2005 and which includes the purchase of
certain ABS assets in mid-2006 including True Ceramic Pro flat
iron and hair dryer kits marketed and sold via TV infomercials.
The restructured agreement calls for payment from CirTran to ABS
through 2016.
"These agreements bode well for CirTran, now and in the coming
years," said Iehab J. Hawatmeh, the Company's chairman and
president. "We particularly value the backing we have had for
years from YA Global and its management team, and appreciate the
confidence in our evolving business plan and growth."
A copy of the YA Global Forbearance Agreement is available at:
http://is.gd/Qeo1Nk
A copy of the ABS Forbearance Agreement is available at:'
http://is.gd/mHyk1T
About CirTran Corporation
West Valley City, Utah-based CirTran Corporation (OTC BB: CIRC)
-- http://www.CirTran.com/-- markets and manufactures energy
drinks under the Playboy brand pursuant to a license agreement
with Playboy Enterprises, Inc. The Company also provides turnkey
manufacturing services and products using various high-tech
applications for electronics manufacturers in various industries.
The Company reported a net loss of $4.95 million in 2010, compared
with a net loss of $5.81 million in 2009. The Company also
reported a net loss of $4.83 million for the nine months ended
Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2011, showed
$3.46 million in total assets, $26.23 million in total liabilities
and a $22.76 million total stockholders' deficit.
As reported by the TCR on April 21, 2011, Hansen, Barnett &
Maxwell, P.C., Salt Lake City, Utah, noted that the Company has an
accumulated deficit, has suffered losses from operations and has
negative working capital that raise substantial doubt about its
ability to continue as a going concern.
CONQUEST PETROLEUM: Shortage of Funds Causes Delay of Form 10-K
---------------------------------------------------------------
Conquest Petroleum Incorporated has received abatements and made
payments on delinquent payroll taxes which has substantially
affected the balance sheet.
Shortly after assuming control of management and the Board of
Directors of the Company, the new management team discovered that
payroll taxes had not been paid for the employees despite
deductions from employee pay checks dating back to 2007. Further,
it was discovered that the proper reports had not been filed or
were not filed in a timely manner. The total delinquency was
$846,907. Management retained an outside firm with expertise in
this area and to date, the Company has been granted abatements of
$476,128 in penalties. Additionally, the Company has paid
$180,997 in back taxes, mainly corresponding with withheld payroll
deductions and the Company has arranged an installment payment for
other amounts due.
Robert D. Johnson, CEO, states that, "Management has continually
experienced matters from the past that have drained its limited
capital resources and diverted funds from development projects
necessary to monetize the Company's substantial undeveloped
acreage. Management now feels that it has identified the
remaining liabilities. As evidenced by the improvement of the
financials (Loss per Share; 2008 - $2.34, 2009 - $1.13, and 2010 -
$.33), progress is being made; but, the Company must find a source
of capital to complete the recovery. The shortage of funds will
cause a delay in the filing of the annual Form 10K."
About Conquest Petroleum
Spring, Tex.-based Conquest Petroleum Incorporated (OTC BB: CQPT)
-- http://www.conquestpetroleum.com/-- is an independent oil and
natural gas company engaged in the production, acquisition and
exploitation of oil and natural gas properties geographically
focused on the onshore United States. The Company's areas of
operation include Louisiana and Kentucky.
The Company reported a net loss of $14.49 million in 2010 and a
net loss of $23.26 million in 2009. The Company reported a net
loss of $4.77 million for the nine months ending Sept. 30, 2011.
The Company's balance sheet as of Sept. 30, 2011, showed
$1.99 million in total assets, $32.56 million in total
liabilities, and a $30.57 million total stockholders' deficit.
As reported by the TCR on April 21, 2011, M&K CPAS, PLLC, in
Houston, Texas, noted that Conquest Petroleum has insufficient
working capital and reoccurring losses from operations, all of
which raises substantial doubt about its ability to continue as a
going concern.
CLARE AT WATER TOWER: Sets April 24 Plan Confirmation
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that The Clare at Water Tower will be in bankruptcy court
on April 24 at a confirmation hearing for approval of the
reorganization plan. The Debtor obtained approval of the
explanatory disclosure statement at a hearing March 20.
According to the report, by distributing proceeds of the sale
roughly in accordance with priorities in bankruptcy law, holders
of $232.8 million in secured bonds should recover 15%, according
to the explanatory disclosure statement. The plan will carry out
a sale to Chicago Senior Care LLC under contract for $29.5 million
in cash. In case another buyer wishes to make better offer, there
will be an auction on April 12.
The report notes that unsecured creditors won't receive any
distribution unless the price rises at auction to almost $230
million, according to the disclosure statement. Current and
former residents, who may vote on the plan, are being offered a
modified program for repaying their deposits when they leave the
facility. The existing refund policy is above the market and will
inhibit the sale of the project unless modified, according to the
disclosure statement.
About The Clare at Water Tower
The Clare at Water Tower is an upscale 334-unit high-rise
continuing-care retirement community in Chicago, Illinois. The
project is only 42% occupied because the target population either
hasn't been able to sell homes or lacks sufficient cash to make
required deposits as the result declining investments following
the recession. The facility is a 53-story building on land rented
from Loyola University of Chicago. The facility is managed and
developed by a unit of the Franciscan Sisters of Chicago, who
invested more than $14 million. The project opened in December
2008. Residents must make partially refundable deposits ranging
from $263,000 to $1.2 million. Monthly fees are an additional
$2,700 to $5,500.
The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case
No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million
in tax-exempt bond financing used to build the project.
Judge Susan Pierson Sonderby presides over the case. Matthew M.
Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel.
Houlihan Lokey Capital, Inc., as its investment banker and
financial advisor. Deloitte Financial Advisory Services LLP
serves as restructuring advisor. Epiq Bankruptcy Solutions serves
as claims and noticing agent. The Debtor, in its amended
schedules, disclosed $56,778,671 in assets and $321,747,63 in
liabilities. The petition was signed by Judy Amiano, president.
The Official Committee of Unsecured Creditors proposed to retain
SNR Denton US LLP as counsel. The Committee also tapped FTI
Consulting, Inc., as its financial advisor.
CONTRACT RESEARCH: May Use $2.4 Million of Freeport DIP Loan
------------------------------------------------------------
Contract Research Solutions Inc. and its debtor-affiliates won an
interim order authorizing them to obtain postpetition secured
financing and utilize cash collateral securing their obligations
to the prepetition lenders.
The DIP lenders have committed to provide up to $15 million under
a senior secured, super-priority, non-amortizing revolving credit
facility. Freeport Financial LLC serves as the sole lead arranger
and bookrunner, and as administrative agent and collateral agent.
Under the Interim DIP Order, the Debtors may use up to $2.4
million of the DIP funds.
Freeport is the agent under the Debtors' prepetition first lien
and second lien credit facilities. As of the petition date, the
Debtors owed $115.8 million under the first lien facility,
comprised of $5 million in principal amount of US revolving loans;
$75 million in principal amount of US term loans; and $35.8
million in principal amount of Canadian term loans.
Freeport serves as the US agent under that facility while Bank of
Montreal, serves as the Canadian agent.
As of the petition date, the Debtors owed $25 million under the
second lien facility.
The DIP facility also provides for the roll up of $15 million of
US Term Loan B.
The Debtors have prepared a rolling 14-week cash flow budget.
The DIP facility and the cash collateral use will expire on the
earliest of June 29; the closing of the sale of substantially all
of the Debtors' assets; or the filing of a chapter 11 plan that is
not consented by the DIP lenders. The DIP agreement permits the
secured lenders to credit bid.
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Banrk. D. Del. Case No. 12-11004) March 26 in
Wilmington, Delaware. Cetero plans to sell the business to first-
lien secured lenders in exchange for $50 million in debt, absent
higher and better offers.
CONTRACT RESEARCH: Meeting to Form Creditors' Panel on April 5
--------------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3, will
hold an organizational meeting on April 5, 2012, at 10:00 a.m. in
the bankruptcy case of Contract Research Solutions, Inc., et al.
The meeting will be held at:
J. Caleb Boggs Federal Building
844 King Street, Room 2112
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtor's 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.
Contract Research Solutions, Inc. filed a Chapter 11 petition
(Bankr. D. Del. Case No. 12-11004) on March 26, 2012 in Delaware,
Jaime Luton Chapman, Esq., at Young Conaway Stargatt & Taylor,
LLP, in Newark, serves as counsel to the Debtor. The Debtor
posted $205 million in assets and $248 million in liabilities.
CONVERGYS CORP: Moody's Issues Summary Credit Opinion
-----------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Convergys Corporation and includes certain regulatory disclosures
regarding its ratings. The release does not constitute any change
in Moody's ratings or rating rationale for Convergys Corporation.
Moody's current ratings on Convergys Corporation are:
Convergys Corporation
LT Corporate Family Ratings (domestic currency) Rating of Ba1
Probability of Default Rating of Ba1
Speculative Grade Liquidity Rating of SGL-1
Senior Unsec. Shelf (domestic currency) Rating of (P)Ba1
LGD Senior Unsec. Shelf (domestic currency) Assessment of 44 -
LGD3
Pref. Shelf (domestic currency) Rating of (P)Ba2
LGD Pref. Shelf (domestic currency) Assessment of 97 - LGD6
Commercial Paper (domestic currency) Rating of NP
Ratings Rationale
Convergys' Ba1 corporate family rating reflects the company's
leading customer care market share, low financial leverage, and
very good liquidity. The core customer care business has proven
fairly resilient to economic cycles as clients place a higher
priority on customer retention in the midst of cost reduction
initiatives which helps to mitigate call volume declines.
Nonetheless, the Ba1 rating also takes into account Convergys'
high customer concentration and increased business line
concentration to the lower margin call center outsourcing
business. This concentration follows the sale of the HR business
and proposed sale of the Information Management segment, which has
not recovered from the loss of higher margin AT&T and Sprint
revenues.
Given the inability to diversify the business, Convergys has
refocused its strategy to grow the core customer care business.
Moody's believes Convergys could need to engage in more aggressive
financial policies to support organic revenue and profit growth.
This is because operating margins are relatively low (high single
digits) with the majority of the contact center workforce already
located in low cost geographies. So despite the low leverage (less
than 2x on a Moody's adjusted basis) and ample liquidity, Moody's
feels the long-term, sustainable capital structure remains
uncertain given Moody's expectation of increased acquisition and
share repurchase activity.
Rating Outlook
The stable outlook reflects the expectations of steady operating
performance and that the core Customer Management segment will
achieve slight revenue growth and improved profitability in 2012.
What Could Change the Rating - Up
An upgrade is considered unlikely in the intermediate term given
the concentrated business profile, lack of sustained organic
growth, and the low operating margins of the core customer care
business. However, over the long term, Convergys' Ba1 rating could
be raised following organic growth in customer care revenue and
improved profitability (e.g., mid to high single digit revenue
growth with 12% operating margins), free cash flow-to-debt (after
Moody's standard adjustments) in excess of 20%, and adjusted debt-
to-EBITDA maintained at about 2x on a sustained basis.
What Could Change the Rating - Down
Convergys' Ba1 rating could be lowered if customer care revenues
and profitability decline significantly (greater than 5%), free
cash flow-to-debt is expected to fall below the 12% level, or its
liquidity position deteriorates with cash falling below $100
million.
The principal methodology used in rating Convergys 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.
DEEP DOWN: Reports $2.1 Million Net Income in 2011
--------------------------------------------------
Deep Down, Inc., reported net income of $2.13 million on
$27.44 million of revenue in 2011, compared with a net loss of
$17.41 million on $42.47 million of revenue in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $32.44
million in total assets, $7.66 million in total liabilities and
$24.78 million in total stockholders' equity.
Ronald E. Smith, Chief Executive Officer stated, "Our 2011
finished strong and we have been able to control costs and
concentrate on project performance, which has resulted in net
income. Although the first quarter 2011 was disappointing, we
were able to recover during the remainder of the year and deliver
on our projects and build a solid basis to start 2012. We decided
to discontinue the implementation of our ERP system, which was
being designed for a much larger entity and would have been too
expensive to maintain. In an effort to reduce significant ongoing
costs, we are streamlining our existing system. As a result of
this decision, we took a one-time charge of $0.94 million. We
have recently been awarded multiple large projects and are
continuing to see positive market indications of increased
activity in 2012. As a result, we believe we are poised for
profitability in 2012 and beyond. We continue to focus on
increasing the profitability of our core business by increasing
margins through efficient project management and by continuing to
reduce overhead costs wherever possible."
A copy of the press release is available for free at:
http://is.gd/oEQrc2
About Deep Down
Houston, Tex.-based Deep Down, Inc. --
http://www.deepdowncorp.com/-- is an oilfield services company
specializing in complex deepwater and ultra-deepwater oil
production distribution system support services, serving the
worldwide offshore exploration and production industry.
During the Company's fiscal years ended Dec. 31, 2010 and 2009,
the Company has supplemented the financing of its capital needs
through a combination of debt and equity financings. Most
significant in this regard has been the Company's debt facility
the Company has maintained with Whitney National Bank. The
Company's loans outstanding under the Amended and Restated Credit
Agreement with Whitney become due on April 15, 2012. The Company
will need to raise additional debt or equity capital or
renegotiate the existing debt prior to such date. The Company is
currently in discussions with several lenders who have expressed
interest in refinancing its debt. The Company's plan is to
refinance the outstanding indebtedness under the Restated Credit
Agreement or seek terms with Whitney that will provide an
extension of such Restated Credit Agreement along with additional
liquidity. However, the Company cannot provide any assurance that
any financing will be available to it on acceptable terms or at
all. If the Company is unable to raise additional capital or
renegotiate its existing debt, this would have a material adverse
impact on the Company's business or would raise substantial doubt
about its ability to continue as a going concern. In addition, as
of Dec. 31, 2010, the Company was not in compliance with the
financial covenants under the Restated Credit Agreement. On
March 25, 2011 the Company obtained a waiver for these covenants
as of Dec. 31, 2010.
DENBURY RESOURCES: S&P Hikes Sr. Subordinated Debt Ratings to 'BB'
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its senior subordinated
debt ratings on Plano, Texas-based exploration and production
(E&P) company Denbury Resources Inc. to 'BB' (the same as the
corporate credit rating) from 'BB-'. "We simultaneously revised
the recovery rating on these issues to '4', indicating the
expectation of average (30% to 50%) recovery in the event of a
payment default, from '5'," S&P said.
"The revised recovery rating reflects changes to Denbury's reserve
values following a company-provided PV-10 report using year-end
2011 reserve values at our stressed price assumptions of $45 per
barrel of West Texas Intermediate (WTI) crude oil and $4.00 per
million British Thermal Units (BTU) of Henry Hub natural gas," S&P
said.
"The corporate credit rating on Denbury reflects the capital-
intensive, high-cost nature of its tertiary oil operations, its
aggressive capital spending program, and negative free cash flow
expectations for the next several years. The ratings also reflect
its focus on oil and its lower risk exploitation strategy. We
consider the financial risk profile to be 'aggressive' and the
business risk profile to be 'fair'," S&P said.
RATINGS LIST
Denbury Resources Inc.
Corporate credit rating BB/Stable/--
Issue ratings raised; Recovery ratings revised
To From
Denbury Resources Inc.
Senior subordinated
7.5% notes due 2014 BB BB-
Recovery rating 4 5
9.75% notes due 2016 BB BB-
Recovery rating 4 5
8.25% notes due 2020 BB BB-
Recovery rating 4 5
6.375% notes due 2021 BB BB-
Recovery rating 4 5
DETROIT, MI: S&P Lowers Tax General Obligation Bond Rating to 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its rating on
Detroit, Mich.'s unlimited- and limited-tax general obligation
(GO) bonds to 'B' from 'BB'. Standard & Poor's also lowered its
rating on the city's pension obligation certificates to 'B' from
'BB'; as a contractual obligation of the city, the certificates
are rated on par with the rating on the city's limited-tax GO
debt. The outlook on the bonds is negative.
"Despite the city's ongoing efforts to regain structural balance
and eliminate its accumulated general fund deficit, it has slipped
further into financial distress," said Standard & Poor's credit
analyst Jane Hudson Ridley. "The recent trigger of an additional
swap interest payment, reportedly of up to $350 million, places
even greater uncertainty on the city's already precarious
financial position. The short-term prognosis of the rating remains
unclear as the city works with the state to solve its financial
problems, and it is Standard & Poor's opinion that the confluence
of events - including projections of cash flow shortfalls during
April, May, and June when the city has debt service payments due -
results in a notably weaker credit with considerably more
uncertainty regarding repayment of principal and interest to
bondholders."
"The 'B' rating reflects our view of the current state of the
city's cash flows with projected shortfalls over the next several
months, a particularly critical time given the timing of many debt
service payments that occur late in the fiscal year," S&P said.
An additional rating factor is the ongoing uncertainty regarding
Detroit's relationship with, and/or level of oversight from, the
state, and any potential assistance the state could offer as part
of a consent decree compromise.
"The negative outlook reflects our view of the significant
uncertainty facing the city from a variety of sources, including
the projected cash flow shortfalls, potential termination payment,
union negotiations, and a potential consent decree. Should all of
these be resolved in a manner that is notably advantageous to
Detroit and result in an improved financial position, Standard &
Poor's could raise the rating over the two-year time horizon of
the outlook. However, if these concerns end negatively, or any
other unforeseen negative events occur, we could lower the
rating," S&P said.
EASTMAN KODAK: Wins Approval for E&Y as Tax Services Provider
-------------------------------------------------------------
Eastman Kodak Co. obtained approval from the U.S. Bankruptcy Court
in Manhattan to hire Ernst & Young LLP to assist the company in
preparing carve-out financial statement, and provide valuation and
tax services.
Eastman Kodak tapped the firm to assist the company in preparing
carve-out financial statement, and provide valuation and tax
services.
Specifically, Ernst & Young will provide tax services related to
the company's bankruptcy case, and valuation of its real and
personal property and other assets. The firm will also assist in
the operational carve-out and financial statement preparation of
certain businesses, among other services.
Ernst & Young will be paid for those services on an hourly basis
at these rates:
Personnel Classification Hourly Billing Rate
------------------------ -------------------
Partners, Principals, Directors $645 - $795
Executive Director $570 - $675
Senior Managers $485 - $550
Managers $425 - $475
Seniors $325 - $390
Staff $200 - $280
Ernst & Young will also provide property tax compliance and
advisory services for the 2012-2014 tax years, which include
preparing and filing annual renditions, tracking real estate
notices, and reviewing property tax bills. For these services,
the firm will get a fixed fee, which is based on a "per property"
fee of $300.
Eastman Kodak agreed to reimburse the firm for any expenses
incurred related to its employment.
In court papers, Eugene Gramza Jr., a partner at Ernst & Young,
disclosed that the firm does not hold or represent interest
adverse to Eastman Kodak.
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. were not included in
the filing and were expected to continue to operate as usual.
Kodak, 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 Debtors. 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.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EASTMAN KODAK: Wins OK for PwC as Auditor and Tax Advisor
---------------------------------------------------------
Eastman Kodak Co. obtained approval to hire PricewaterhouseCoopers
LLP and PricewaterhouseCoopers Aarata to provide independent
audit, accounting and tax advisory services.
PwC LLP will serve as auditor and accounting adviser of the
company and its affiliated debtors in accordance with their 2011
letter agreements.
Under the 2011 letter agreements, PwC LLP agreed to audit the
financial statements of Eastman Kodak, provide accounting
consultation and other services requested by the company. The
firm will get a $4.129 million fixed fee in return for its
services.
PwC LLP also agreed to audit the financial statements of Kodak
Polychronie Graphics Finance Barbados SRL, Kodak Polychrome
Graphics Company Ltd., and Creo SRL, and will get $70,000 fixed
fee for those services.
Meanwhile, PwC Aarata's services include translating the English
version of Eastman Kodak's financial statements and other
documents into Japanese. The firm will get a JPY4 million fixed
fee.
PwC LLP will also provide independent audit services as well as
tax advisory services pursuant to the terms of the letter
agreements it executed with Eastman Kodak on January 19, 2012.
For its audit services, the firm will be paid on an hourly basis
at these rates:
Personnel Classification Hourly Billing Rate
------------------------ -------------------
Partners $775 - $995
Managing Directors/Directors $573 - $708
Senior Managers/Managers $297 - $575
Senior Associates/Associates $134 - $302
Paraprofessional Staff $129 - $148
Meanwhile, the hourly rates for PwC LLP's tax advisory services
range from $650 to $850 for partners; $550 to $650 for managing
directors and directors; $450 to $550 for senior managers and
managers; $200 to $300 for senior associates and associates; and
$100 to $175 for the paraprofessional staff.
Jeff Sorensen, a partner at New York-based PwC LLP, disclosed in
court papers that the firms do not hold or represent interest
adverse to Eastman Kodak, and that they are disinterested under
Section 101(14) of the Bankruptcy Code.
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. were not included in
the filing and were expected to continue to operate as usual.
Kodak, 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 Debtors. 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.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Eastman Kodak and its affiliates
(http://bankrupt.com/newsstand/or 215/945-7000).
EASTMAN KODAK: Amends KESIP Plan to Eliminate Investment Option
---------------------------------------------------------------
Eastman Kodak Co. disclosed in a March 23 regulatory filing with
the U.S. Securities and Exchange Commission that the Eastman Kodak
Employees' Savings and Investment Plan has been amended to
eliminate the investment option that invested in Kodak securities,
therefore, plan interests are exempt from registration.
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. were not included in
the filing and were expected to continue to operate as usual.
KODAK, 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 Debtors. 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.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
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).
EL CENTRO MOTORS: Has Interim Authority to Use Cash Collateral
--------------------------------------------------------------
El Centro Motors obtained authority from the Bankruptcy Court to
use, on an interim basis, the cash collateral securing the
Debtor's obligations to its prepetition lender.
The Interim Cash Collateral Order did not set a final hearing on
the request.
El Centro Motors also won authority to (1) pay pre-petition
priority wages; (2) honor accrued vacation and leave benefits; and
(3) honor prepetition obligations to customers.
The Court also barred utility service providers from halting or
modifying service to the Debtor in view of the bankruptcy. The
Debtor is authorized to provide adequate assurance of payment
under 11 U.S.C. Sec. 366(b) for the continuation of utility
services.
The Debtor is required to file its schedules of assets and
liabilities and statement of financial affairs by April 4, 2012.
The Chapter 11 plan and accompanying disclosure statement are due
by July 19.
The U.S. Trustee for Region 15 in San Diego will convene a Meeting
of Creditors under 11 U.S.C. Sec. 341(a) on April 17, 2012, at
2:00 p.m. The meeting will be held at 402 W. Broadway, Emerald
Plaza Building, Suite 660 (B), Hearing Room B, in San Diego.
El Centro Motors, dba Mighty Auto Parts, operates a Ford-Lincoln
automobile dealership in El Centro, California. It filed a
Chapter 11 petition (Bankr. S.D. Calif. Case No. 12-03860) on
March 21, 2012, listing $10 million to $50 million in assets and
debts. Chief Judge Peter W. Bowie presides over the case. Krifor
Meshefajian, Esq., at Levene, Neale, Bender, Yon & Brill LLP,
serves as counsel.
The prior owner of the dealership operated the business since
1932. The business is presently owned by Dennis Nesselhauf and
Robert Valdes.
The Debtor claims that its assets, which include the property
constituting the dealership in El Centro, and new and used
vehicles, have a value of $14 million. The Debtor owes Ford Motor
Credit Company $4.3 million on a term-loan secured by a first
priority deed of trust against the El Centro property, 380,000 on
a revolving credit line, and $6 million on a flooring line of
credit used to purchase vehicle inventory. The Debtor also owes
$1.03 million to Community Valley Bank, which loan is secured by a
second priority deed of trust against the property. In addition
to $3.95 million arbitration award owed to Dealer Computer
Systems, Inc., the Debtor owes $3 million in unsecured debt.
According to a court filing, the dealership generally operated at
a profit, until it suffered the same economic setbacks suffered by
dealerships across the country. In 2007, the Debtor suffered an
$806,000 loss; in 2008, it had a $4.5 million loss, and in 2009,
it suffered a $957,000 loss.
In addition, Dealer Computer Services, which provided the dealer
management system, obtained in November 2001, an arbitration award
in the amount of $3.95 million, following a breach of contract
lawsuit it filed against the Debtor. DCS has commenced collection
efforts attempting to levy the Debtor's bank accounts and place
liens on its assets.
The Debtor filed for bankruptcy to preserve and maximize the
Debtor's estate for the benefit of creditors, to provide the
Debtor a reprieve from highly disruptive and financially
detrimental collection efforts, and to provide the Debtor an
opportunity to reorganize its financial affairs in as efficient a
manner as possible.
ELPIDA MEMORY: U.S. Court Issues Ruling Halting Lawsuits
--------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Tokyo-based chip
maker Elpida Memory Inc. secured some breathing room for it and
its customers facing patent-infringement lawsuits in U.S. courts,
which Elpida said is crucial to its ability to successfully
restructure under a Japanese court's protection.
About Elpida Memory
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
Tokyo, Japan-based Elpida Memory Inc. sought the U.S.
bankruptcy court's recognition of its reorganization proceedings
currently pending in Tokyo District Court, Eight Civil Division.
Yuko Sakamoto, as foreign representative, filed a Chapter 15
petition (Bankr. D. Del. Case No. 12-10947) for Elpida on
March 19, 2012.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed
for corporate reorganization proceedings in Tokyo District Court
on Feb. 27, 2012.
The Tokyo District Court immediately rendered a temporary
restraining order to restrain creditors from demanding repayment
of debt or exercising their rights with respect to the company's
assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
ENERGY CONVERSION: Gets Court's Nod to Employ Auctioneers
---------------------------------------------------------
Energy Conversion Devices, Inc., et al., sought and obtained
permission from the Hon. Thomas J. Tucker of the U.S. Bankruptcy
Court for the Eastern District of Michigan to retain and employ
(i) Heritage Global Partners, Inc.; (ii) Hilco Industrial, LLC;
(iii) Maynards Industries (1991) Inc.; (iv) Counsel RB Capital,
LLC; and (v) Van Acker Associates, LLC, collectively as marketing
and sales agents to the Debtors.
The Debtors are pursuing a going concern sale of substantially all
of their assets and have sought approval of bidding procedures to
conduct a going concern sale. "However, in the event the Debtors
do not complete a going concern sale, in the alternative, the
Debtors contemplate selling their assets by auction. Further,
even if a going concern sale is completed, the Debtors have
surplus and burdensome assets that the Debtors intend to sell by
one or more auctions," Aaron M. Silver, Esq., at Honigman Miller
Schwartz And Cohn LLP, counsel for the Debtors, stated.
Anticipating the possibility of multiple separate auctions at
different times and locations, the Debtors are seeking approval of
a master agreement under which the Auctioneers will conduct
multiple separate auctions, if necessary, and charge a fixed
percentage fee in connection with each separate auction sale.
The consolidated group of five Auctioneers submitted a joint
competitive bid to conduct the auctions as a single joint venture
unit. The Debtors benefit by combining five Auctioneers because
the significant experience and combined customer lists of the
Auctioneers are expected to maximize returns on an expedited
timeline. Mr. Silver said that there is no additional cost to the
Debtors for this combined proposal, each participant is jointly
and severally liable and the joint ventures proposal was
competitive in comparison with other bids received. Accoridng to
Mr. Silver, the Debtors believe that sales of the Assets will
operate efficiently and cost effectively, thereby providing
greater return to the Debtors' estates, if they are coordinated by
the same group of experienced Auctioneers with the appropriate
industry knowledge and bankruptcy-related auction experience and
the Debtors are provided the flexibility of conducting multiple
auctions at a fixed percentage fee with control over auction-
related expenses.
The Auctioneers will, among other things:
a. develop and implement an advertising and marketing plan
for the sale of the Assets;
b. prepare for the sale of the Assets, including gathering
specifications and photographs for pictorial brochures and
arranging the Assets in a manner, which in the
Auctioneers' judgment would be designed to enhance the net
recovery on the Assets;
c. provide fully qualified and experienced personnel who will
prepare for and sell the Assets; and
d. charge and collect on behalf of the Debtors from all
purchasers any purchase price together with all applicable
taxes in connection therewith.
Subject to the rebate obligation, the Auctioneers will be entitled
to charge and retain for their own account a buyers' premium for
Assets that are sold of 15%. For purposes of clarification, the
Buyers' Premium is a fee charged in addition to the sale price of
any Assets that are sold by the Auctioneers pursuant to the AMA
and is paid for by the buyer of the Asset(s). The Buyers'
Premium, less the rebate will (i) be shared among the Auctioneers;
(ii) together with the Auction Expenses, constitute the
Auctioneers' sole form of compensation under the AMA; (iii) be
segregated by the Auctioneers upon collection of proceeds from the
applicable buyer(s); and (iv) be retained by the Auctioneers,
subject to the rebate to be paid pursuant to the rebate
obligation. The Auctioneers will pay the Debtors a rebate of 7%
of the Assets sold, which will be paid from the collected Buyers'
Premiums. The Auctioneers will remit such payment to the Debtors
within 30 days after the sale of each Asset.
Mr. Silver attested that the Auctioneers are "disinterested
persons" within the meaning of section 101(14) of the Bankruptcy
Code; and does not hold or represent an interest adverse to the
Debtors' estates in connection with any matter on which the firms
will be employed. The Auctioneers' disinterestedness are also
attested by (i) Ross Dove, Managing Partner of Heritage Global
Partners, Inc.; (ii) Ian S. Fredericks, Vice President and
Assistant General Counsel of Hilco Trading, LLC, the Managing
Member of Hilco Industrial, LLC; (iii) Adam M. Reich, Co-CEO of
Counsel RB Capital, LLC; (iv) Taso Sofikitis, President of
Maynards Industries (1991) Inc.; and (v) Wim van Acker, Manager of
Van Acker Associates, LLC.
About Energy Conversion Devices
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor estimated assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
ENERGY CONVERSION: Creditors Block Final Order on Collateral Use
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Energy Conversion
Devices, Inc., and United Solar Ovonic LLC have filed with the
U.S. Bankruptcy Court for the Eastern District of Michigan an
objection to the entry of a final order on the Debtors' motion for
approval of their cash management system, including approval of
use of cash collateral and intercompany transfers on an
administrative expense basis.
John A. Simon, Esq., at Foley & Lardner LLP, the proposed counsel
for the Committee, says that the Debtors unsuccessfully marketed
their assets for the better part of the past year and have been
unable to find a stalking horse buyer. According to Mr. Simon,
the Debtors have now ceased substantially all of their
manufacturing operations and are seeking to sell substantially all
of their assets through an auction process. Pursuant to that
process, bids are due by April 17, 2012. Every dollar of the cost
to preserve and market the Debtors' assets for this sale is being
paid by the unsecured creditors because there is no third party
lender with a security interest in all of the Debtors' assets and
no returns are expected on account of equity. "Therefore, the
Committee supports an expeditious and value-maximizing sale,
provided it is cost-effective given this is a liquidating Chapter
11. However, the Debtors have proposed an unnecessary cash burn
(both in amount and duration) in a budget that exceeds their needs
in pursuing a sale of their assets," Mr. Simon states.
The Debtors' proposed budget includes expenses in excess of those
necessary to effect a sale. The Debtors have budgeted, during
just a 13-week period, the consumption of over $12 million in
alleged cash collateral and administrative expense advances to USO
from USO's parent company and fellow debtor-in-possession, ECD.
Mr. Simon says that the Debtors' burn rate of almost $1 million
per week is alarming to the Committee because the Debtors have
allegedly reduced their operations to only "core" activities
necessary to preserve assets pending the proposed sale.
The Committee's financial advisor has identified costs in excess
of $1 million that can be eliminated while the Debtors pursue a
sale, as well as an additional $5 million in additional costs not
included in the Budget that are expected to be borne by ECD
(including for such expenses as the unnecessary employee
retention, executive incentive and severance packages for which
the Debtors are currently seeking approval).
"Moreover, the Debtors' proposed budget unjustifiably provides for
the continued maintenance of the Debtors' business operations
beyond the April 17, 2012 bid deadline, regardless of whether or
not a buyer emerges. However, if qualified bids are not received
by the Bid Deadline, the attempt to sell the assets as a going
concern will have failed and there may be no further justification
for costly maintenance of the Debtors as a going concern. Rather,
the Debtors should be required to seek additional authorization to
use cash collateral and obtain administrative expense financing
after reviewing the offers received, if any, and determining which
expenses are necessary to preserve the assets likely to be sold to
the potential buyers," Mr. Simon states.
According to Mr. Simon, the Committee has had insufficient time to
review the prepetition transactions between the Debtors that
purported to create ECD's security interest in USO's cash and the
request for administrative expense priority for the post-petition
advances from ECD to USO to determine the appropriate treatment
and legitimacy of the prepetition transactions and post-petition
advances. Thus, any use of cash collateral or post-petition
administrative expense advances should be authorized subject to a
reservation of all rights of the Committee to review and challenge
the underlying loans, the continuation of any security interest,
and the grant of administrative priority for post-petition loans.
The Committee believes that any order authorizing use of cash
collateral or post-petition loans should contain several
modifications to reduce the risks to these estates and ensure that
the Committee has the ability to review the propriety of the
transfers between the Debtors, while facilitating the Debtors'
need to maintain their core business operations pending a sale of
their assets.
Mr. Simon claims that the Budget overstates the Debtors' necessary
expenses and must be revised to be limited to only those expenses
absolutely essential to preserve the Debtor's assets pending the
sale. Over half of the $12 million is designated for "Employee
Costs". This is excessive considering all U.S. operations have
been effectively "shut-in". The Debtors have not justified a
significant portion of these expenses. The budget must include a
cap on USO's expenses through the bid deadline and not to exceed
thresholds for each line item.
The Court's authorization to use the alleged cash collateral and
the granting of administrative priority status for the
intercompany transfers should only extend through April 20, 2012
(3 business days after the Bid Deadline). Depending on the
quality and characteristics of the bids received, the budget for
the period between April 20, 2012, through the closing date could
be materially different.
The Advances to the foreign subsidiaries should be secured. The
Debtors propose to advance $1.8 million, or 13% of the amount
requested in the budget, to the foreign subsidiaries. This
includes considerable costs related to the Mexican facility to
continue limited manufacturing runs. However, the Committee
believes that the Mexican facility has considerable liabilities,
including over $200,000 per month in rent, and activities at the
facility should be minimized while simultaneously developing an
exit plan for such facility if it is not sold by the Debtors. The
Committee believes that the Debtors can make considerable
reductions in these expenditures during the sale period.
About Energy Conversion Devices
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor estimated assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
ENERGY CONVERSION: Can Hire Quarton Partners as Investment Banker
-----------------------------------------------------------------
The Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the
Eastern District of Michigan has granted Energy Conversion
Devices, Inc., et al., permission to employ Quarton Partners, LLC,
as investment banker.
As reported by the Troubled Company Reporter on March 16, 2012,
the Debtors sought to retain Quarton to perform certain investment
banking and consulting services in connection with the
formulation, analysis, negotiation, and implementation of a going
concern sale or other strategic alternatives relating to the
Debtors' remaining operating businesses and assets, as described
more fully in the second amended and restated engagement letter
dated January 31, 2012 between Quarton and the Debtors.
On March 9, 2012, Daniel M. McDermott, U.S. Trustee, filed an
objection on the Debtors' motion to employ Quarton. The Trustee
objects to the Indemnification attached to Quarton's retention
letter, a copy of which is available for free at:
http://is.gd/t3sSw7
The U.S. Trustee says indemnification is contrary to the interests
of this estate as they are calculated to negate or limit the
estate's recovery of damages for any subsequent wrongdoing by
Quarton and to impose future unknown fees, costs and other
administrative expenses upon the estates without any demonstrated
benefit in return. "These provisions are also inconsistent with
the duty of care and high degree of professionalism and expertise
with which Quarton purports to perform its investment banker
services to justify the amount of compensation it will receive in
these cases," the Trustee had said.
On March 21, 2012, the Debtors, along with the Official Committee
of Unsecured Creditors and the Trustee, informed the Court that
they have reached a stipulation on the employment of Quarton
Partners, saying that the objections have resulted in further
agreed upon amendments to the proposed engagement letter. A copy
of the revised proposed engagement letter is available for free
at http://is.gd/Rhq42k
About Energy Conversion Devices
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor estimated assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169.
EPAZZ INC: Auditor Lacks Time, Form 10-K for 2011 Delayed
---------------------------------------------------------
Epazz, Inc., has experienced delays in completing its financial
statements for the year ended Dec. 31, 2011, as its auditor has
not had sufficient time to review the financial statements for the
year ended Dec. 31, 2011. As a result, the Company is delayed in
filing its Form 10-K for the year ended Dec. 31, 2011.
About EPAZZ Inc.
Chicago, Ill.-based EPAZZ, Inc., was incorporated in the State of
Illinois on March 23, 2000, to create software to help college
students organize their college information and resources. The
idea behind the Company was that if the information and resources
provided by colleges and universities was better organized and
targeted toward each individual, the students would encounter a
personal experience with the college or university that could lead
to a lifetime relationship with the institution. This concept is
already used by business software designed to retain relationships
with clients, employees, vendors and partners.
The Company's balance sheet at Sept. 30, 2011, showed
$2.09 million in total assets, $1.42 million in total liabilities
and $669,483 in total stockholders' equity.
As reported in the TCR on April 26, 2011, Lake & Associates, CPA's
LLC, in Schaumburg, Illinois, expressed substantial doubt about
EPAZZ, Inc.'s ability to continue as a going concern, following
the Company's 2010 results. The independent auditors noted that
the Company has a significant accumulated deficit and continues to
incur losses.
Bankruptcy Warning
According to the Form 10-Q for the quarter ended Sept. 30, 2011,
the Company currently anticipates that it will only be able to
continue its business operations for the next three months with
its current cash on hand and the revenues it generates and will
need approximately $100,000 to continue its operations for the
next 12 months, including any funds the Company will need to make
payments under its note payables.
The Company cannot be certain that any such financing will be
available on acceptable terms, or at all, and the Company's
failure to raise capital when needed could limit its ability to
continue and expand its business. The Company intends to overcome
the circumstances that impact its ability to remain a going
concern through a combination of the commencement of additional
revenues, of which there can be no assurance, with interim cash
flow deficiencies being addressed through additional equity and
debt financing. The Company's ability to obtain additional
funding for the remainder of the 2011 year and thereafter will
determine its ability to continue as a going concern.
There can be no assurances that these plans for additional
financing will be successful. Failure to secure additional
financing in a timely manner to repay the Company's obligations
and supply the Company sufficient funds to continue its business
operations and on favorable terms if and when needed in the future
could have a material adverse effect on the Company's financial
performance, results of operations and stock price and require the
Company to implement cost reduction initiatives and curtail
operations. Furthermore, additional equity financing may be
dilutive to the holders of the Company's common stock, and debt
financing, if available, may involve restrictive covenants, and
strategic relationships, if necessary to raise additional funds,
and may require that the Company relinquish valuable rights. In
the event that the Company is unable to repay its current and
long-term obligations as they come due, the Company could be
forced to curtail or abandon its business operations, or file for
bankruptcy protection; the result of which would likely be that
the Company's securities would decline in value or become
worthless.
EURONET WORLDWIDE: S&P Affirms, Withdraws 'BB+' Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
counterparty credit rating on Euronet Worldwide Inc.
"Subsequently, we withdrew the rating at the company's request. At
the time of withdrawal, the outlook was stable," S&P said.
"Standard & Poor's ratings on Euronet Worldwide reflected the
firm's strong, high-quality earnings, first-mover strategic
advantage in multiple markets, and solid funding base. Offsetting
factors included exposure to exchange rate fluctuations and
material debt relative to earnings. Management's investment in
expanding three business lines simultaneously tempered earnings
and entailed considerable operational risk," S&P said.
FIRST DATA: Amendment to Credit Suisse Credit Pact Takes Effect
---------------------------------------------------------------
The 2012 Extension Amendment that First Data Corporation entered
into on March 13, 2012, relating to its Credit Agreement, dated as
of Sept. 24, 2007, as amended, with several lenders and Credit
Suisse AG, Cayman Islands Branch, as administrative agent, became
effective.
Among other things, the Amendment Agreement:
(i) converts approximately $3.2 billion of the existing term
loans maturing in 2014 under the Company's senior secured
term credit facilities into a new dollar-denominated term
loan tranche and a new euro-denominated term loan tranche,
which will each mature on March 24, 2017;
(ii) permits the Company to provide a loan extension request
upon such shorter notice period as may be agreed by the
administrative agent;
(iii) permits the deduction of fees and expenses related to any
loan extensions from the net cash proceeds of any
substantially concurrent debt offering related thereto that
are being used to repay term loans under its senior secured
credit facilities;
(iv) increases the Maximum Incremental Facilities Amount by the
amount of outstanding 2014 Term Loans, provided such
increased amount may only be used for the incurrence of
indebtedness the net cash proceeds of which are
substantially concurrently used to prepay 2014 Term Loans;
(v) increases the Maximum Incremental Facilities Amount by the
amount of any permanent reduction or termination of the
revolving credit commitments after the effectiveness date
of the Amendment Agreement;
(vi) permits voluntary prepayments of term loans to be directed
to a class of Extended Term Loans without requiring a
prepayment of existing term loans from which such Extended
Term Loans were converted; and
(vii) provides for an increase in the interest applicable to the
2017 Term Loans to a rate equal to, at the Company's
option, either (i) LIBOR for deposits in the applicable
currency plus 500 basis points or (ii) with regard to
dollar-denominated borrowings, a base rate plus 400 basis
points.
In connection with the Amendment Agreement, First Data effected a
prepayment of the outstanding 2017 Term Loans under the Amended
Credit Agreement from the net cash proceeds of the issuance of its
additional 7.375% Senior Secured Notes due 2019 in an amount equal
to approximately $806.5 million.
On March 23, 2012, First Data issued and sold $845,000,000
aggregate principal amount of additional 7.375% Senior Secured
Notes due 2019, which mature on June 15, 2019, pursuant to an
indenture governing the 7.375% Senior Secured Notes due 2019 that
were issued on April 13, 2011, by and among the Company, the
guarantors party hereto and Wells Fargo Bank, National
Association, as trustee. The additional notes are expected to be
treated as a single series with the Existing 7.375% Notes and will
have the same terms as those of the Existing 7.375% Notes. The
additional notes and the Existing 7.375% Notes will vote as one
class under the Indenture. The Company used the net proceeds from
the issue and sale of the additional notes to repay existing 2017
Term Loan debt under its senior secured credit facilities.
About First Data
Based in Atlanta, Georgia, First Data Corporation, with over
$10 billion of revenue for the 12 months ended June 30, 2010,
provides commerce and payment solutions for financial
institutions, merchants, and other organizations worldwide.
The Company reported a net loss of $336.10 million in 2011, a net
loss of $846.90 million in 2010, and a net loss of $1.01 billion
on $9.31 million in 2009.
The Company's balance sheet as of Dec. 31, 2011, showed
$40.27 billion in total assets, $36.80 billion in total
liabilities, and $3.40 billion in total equity.
* * *
The Company's carries a 'B3' corporate family rating, with a
stable outlook, from Moody's Investors Service, a 'B' corporate
credit rating, with stable outlook, from Standard & Poor's, and
a 'B' long-term issuer default rating from Fitch Ratings.
Standard & Poor's Ratings Services in December 2010 assigned its
'B-' issue rating with a '5' recovery rating to First Data Corp.'s
(B/Stable/--) $2 billion of 8.25% second-lien cash-pay notes due
2021, $1 billion $8.75% second-lien pay-in-kind-toggle notes due
2022, and $3 billion 12.625% unsecured cash-pay notes due 2021.
The '5' recovery rating indicates lenders can expect modest (10%-
30%) recovery in the event of payment default. Under S&P's
default analysis, there is insufficient collateral to fully cover
First Data's first-lien debt. As a result, the remaining value of
the company (generated by non-U.S. assets and not pledged) would
be shared pari passu among the uncovered portion of first-lien
debt, new second-lien debt, and new and existing unsecured debt.
EXTERRA ENERGY: Former Judge McConnell Named Ch. 11 Trustee
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Michael McConnell, a lawyer in Forth Worth, Texas,
was selected by the U.S. Trustee to serve as Chapter 11 trustee
for Exterra Energy Inc. The bankruptcy judge in Fort Worth called
for the appointment of a trustee on March 14.
According to the report, Mr. McConnell, formerly a bankruptcy
judge in Fort Worth, is "intelligent, low-key and a man of his
word," according to Michael "Buzz" Rochelle, Esq., a bankruptcy
lawyer in Dallas who is the brother of Bill Rochelle.
Exterra Energy Inc., an oil and natural-gas exploration and
production company in Amarillo, Texas, filed a bare-bones Chapter
11 petition (Bankr. N.D. Tex. Case No. 11-46956) on Dec. 15, 2011,
in Fort Worth. Two weeks later, Exterra filed its schedules of
assets and liabilities claiming to have property worth $19.4
million. The company also filed a balance sheet from February
listing assets of $5.1 million. The formal bankruptcy lists show
total debt of $7.5 million, including $4.6 million in secured
claims. The company's Web site says Exterra has 12 wells in Pecos
County, Texas, plus interests in another 50.
FLOWSERVE CORP: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Pos
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Irving,
Texas-based Flowserve Corp. to positive from stable. "We also
affirmed our other ratings on the company, including the 'BB+'
corporate credit rating and the 'BB+' secured bank loan ratings.
Our '3' recovery rating on the debt remains unchanged," S&P said.
"This action recognizes the good performance at Flowserve," said
Standard & Poor's credit analyst John Sico, "and if financial
policy remains disciplined, we could raise the rating in the
intermediate term."
"The ratings on precision-engineered flow control equipment
manufacturer Flowserve reflect our view of the company's
'satisfactory' business risk profile and 'significant' financial
risk profile," S&P said.
"Management's focus on improving operations brought about good
internal cash generation and better-than-expected debt leverage,"
added Mr. Sico. "Although the company may adopt a more aggressive
acquisition growth strategy that may include a large debt-funded
acquisition, we view the company's debt capacity as sufficient to
sustain metrics, notwithstanding a transformative acquisition. The
company's end markets (such as the oil and gas industries) are
doing well, but we still have some uncertainty about the weak
global economic conditions. We also view Flowserve's liquidity as
'adequate.'"
"The outlook is positive, reflecting the company's strong
operating metrics and our expectation of a continuation of this
performance over the next couple of years. Although order rates
have improved, we continue to watch the pace of the orders to
monitor their effects on the company's currently good
profitability and cash flow. Given its geographic and product
diversity, as well as its substantial aftermarket business, we
believe that Flowserve can maintain its strong internal cash
generation," S&P said.
"Management has improved operating performance and refrained from
any meaningfully large debt-financed acquisitions. We would
consider raising the ratings on the company in the next 12 months,
if it continues to remain disciplined with respect to financial
and acquisition policies," S&P said.
"Nonetheless, we could lower the ratings if FFO to total debt
declines to less than 25% as a result of weaker end-market
conditions, greater-than-expected shareholder-friendly activity,
or any large debt-financed acquisitions," S&P said.
FLURIDA GROUP: Enterprise CPAs Raises Going Concern Doubt
---------------------------------------------------------
Flurida Group, Inc., filed on March 26, 2012, its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2011.
Enterprise CPAs, Ltd., in Chicago, says that the Company's
operating history and its customer concentration may raise doubt
about its ability to continue as a going concern.
The Company's major customer is Electrolux located in various
countries.
The Company reported net income of $200,501 on $13.8 million of
revenues for 2011, compared with net income of $211,205 on
$11.2 million of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $3.6 million
in total assets, $2.0 million in current liabilities, and
stockholders' equity of $1.6 million.
The Company said that Electrolux discontinuing purchases is "very
unlikely in near future". The Company also pointed to its "close
relationship" with its suppliers, Zhong Nan Fu Rui and Qingdao
Fubida Electronics Co., which are 100% owned by the founder,
Jianfeng Ding. As a result, Zhong Nan Fu Rui and Qingdao Fubida
Electronics Co.'s current customers can be served by the Company
for the same quality of products and services.
The Company also noted that as of Dec. 31, 2011, the cash and cash
equivalent balance was $741,230. Management believes that the
revenues will be generated and its cash flows will be maintained
to cover its operational costs and the risk of going concern in
long term is significantly low.
A copy of the Form 10-Q is available for free at:
http://is.gd/UlQ8Xo
Chicago-based Flurida Group, Inc.'s business is the sale of
appliance parts in Asia, Europe, Australia, North and South
America.
FRITZ LLC: Case Summary & 4 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Fritz, LLC
dba Spring Haven Apartments
dba Castle Apartments
525 NE Sanchez Avenue
Ocala, FL 34470
Bankruptcy Case No.: 12-02002
Chapter 11 Petition Date: March 27, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Jacksonville)
Debtor's Counsel: Jason A. Burgess, Esq.
THE LAW OFFICES OF JASON A. BURGESS, LLC
118 West Adams Street, Suite 900
Jacksonville, FL 32202
Tel: (904) 354-5065
E-mail: jason@jasonaburgess.com
Scheduled Assets: $1,171,384
Scheduled Liabilities: $2,419,784
A copy of the Company's list of its four largest unsecured
creditors is available for free at
http://bankrupt.com/misc/flmb12-02002.pdf
The petition was signed by Lawrence D. Breech, managing member.
GENTA INC: Incurs $69.4 Million Net Loss in 2011
------------------------------------------------
Genta Incorporated filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$69.42 million on $194,000 of net product sales for the year ended
Dec. 31, 2011, compared with a net loss of $167.30 million on
$257,000 of net product sales during the prior year.
The Company reported $32.05 million on $24,000 of net product
sales for the three months ended Dec. 31, 2011, compared with a
net loss of $33.86 million on $65,000 of net product sales for the
same period a year ago.
The Company's balance sheet at Dec. 31, 2011, showed $14.49
million in total assets, $53.74 million in total liabilities and a
$39.24 million total stockholders' deficit.
EisnerAmper LLP, in Edison, New Jersey, noted that the Company's
recurring losses from operations and negative cash flows from
operations and current maturities of convertible notes payable
raise substantial doubt about its ability to continue as a going
concern.
Bankruptcy Warning
According to the Form 10-K for the year ended Dec. 31, 2011, the
Company in September 2011, issued $12.7 million of units,
consisting of $4.2 million of senior secured convertible notes and
$8.5 million of senior secured cash collateralized convertible
notes. In connection with the sale of the units, the Company also
issued two types of debt warrants in an amount equal to 100% of
the purchase price for each unit. The Company had direct access
to $4.2 million of the proceeds, and the remaining $8.5 million of
the proceeds were placed in a blocked account as collateral
security for the $8.5 million senior secured cash collateralized
convertible notes. Presently, with no further financing, the
Company projects that it will run out of funds during the first
quarter of 2012. The Company currently does not have any
additional financing in place. If it is unable to raise
additional funds, the Company could be required to reduce its
spending plans, reduce its workforce, license one or more of its
products or technologies that it would otherwise seek to
commercialize itself, sell some or all of its assets, cease
operations or even declare bankruptcy. There can be no assurance
that the Company can obtain financing, if at all, or raise those
additional funds, on terms acceptable to it.
A copy of the Form 10-K is available for free at:
http://is.gd/Bfi0If
About Genta Incorporated
Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB:
GNTA) -- http://www.genta.com/-- is a biopharmaceutical company
engaged in pharmaceutical (drug) research and development. The
Company is dedicated to the identification, development and
commercialization of novel drugs for the treatment of cancer and
related diseases.
GMX RESOURCES: S&P Raises Corp. Credit Rating From 'SD' to 'CCC+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on GMX Resources Inc. to 'CCC+' from 'SD' (selective
default). "At the same time, we assigned a 'CCC+' senior secured
rating to the company's $283.5 million senior secured notes due
2017, and a recovery rating of '4', indicating expectations for
average (30% to 50%) recovery in the event of a payment default.
The outlook is developing," S&P said.
"As a result of the 2011 exchange offer and subsequent tender of
about 99% of the GMX's $200 million senior notes due 2019, we are
withdrawing the rating on those notes," S&P said.
"The 'CCC+' corporate credit rating reflects Standard & Poor's
continued doubts about GMX's ability to maintain sufficient
liquidity during 2012," said Standard & Poor's credit analyst Paul
Harvey. "Planned 2012 capital spending of $97 million, combined
with the February 2013 maturity of the remaining $59.4 million of
GMX's 5% convertible notes, pose significant obstacles to
maintaining sufficient near-term liquidity."
"We note that we would have viewed recent common stock exchanges
for about $13 million of the 2013 convertible notes as a selective
default under our criteria. Future distressed exchanges on the
2013 notes will not trigger a selective default, as we
incorporated that transaction into the former 'SD' rating.
Finally, GMX's Bakken acreage remains highly prospective; only
three operated wells were completed as of March 1, 2012. If future
drilling results do not meet expectations, liquidity and access to
capital markets could be restricted," S&P said.
"The outlook is developing. The developing outlook reflects the
potential for both positive and negative rating actions within the
next 12 months, depending on GMX's ability to (1) resolve the
February 2013 maturity of its 5% convertible notes and (2) to
maintain sufficient liquidity to fund near-term interest expense
and capital spending. We could lower ratings if GMX can't find a
timely solution to refinance its $59.4 million 5% convertible
notes and maintain liquidity to cover interest expense and near-
term spending needs. We could raise ratings if GMX can maintain
$25 million of liquidity entering 2013, refinance the remaining
convertible notes due February 2013, and achieve good operating
results from its Bakken development drilling during 2012," S&P
said.
GUIDED THERAPEUTICS: Incurs $6.6 Million Net Loss in 2011
---------------------------------------------------------
Guided Therapeutics, Inc., filed with the U.S. Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a
net loss of $6.64 million on $3.59 million of contract and grant
revenue for the year ended Dec. 31, 2011, compared with a net loss
of $2.84 million on $3.36 million of contract and grant revenue
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $4.31 million
in total assets, $2.73 million in total liabilities and $1.57
million in total stockholders' equity.
UHY LLP, in Sterling Heights, Michigan, noted that the Company's
recurring losses from operations and accumulated deficit raise
substantial doubt about its ability to continue as a going
concern.
Bankruptcy Warning
According to the Form 10-K for the year ended Dec. 31, 2011, the
Company's capital-raising efforts are ongoing. If sufficient
capital cannot be raised during the fourth quarter of 2012, the
Company has plans to curtail operations by reducing discretionary
spending and staffing levels, and attempting to operate by only
pursuing activities for which it has external financial support,
such as under the Konica Minolta development agreement and
additional NCI or other grant funding. However, there can be no
assurance that such external financial support will be sufficient
to maintain even limited operations or that the Company will be
able to raise additional funds on acceptable terms, or at all. In
that a case, the Company might be required to enter into
unfavorable agreements or, if that is not possible, be unable to
continue operations, and to the extent practicable, liquidate or
file for bankruptcy protection.
A copy of the Form 10-K is available for free at:
http://is.gd/v0UHvX
About Guided Therapeutics
Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP)
-- http://www.guidedinc.com/-- is developing a rapid and painless
test for the early detection of disease that leads to cervical
cancer. The technology is designed to provide an objective result
at the point of care, thereby improving the management of cervical
disease. Unlike Pap and HPV tests, the device does not require a
painful tissue sample and results are known immediately. GT has
also entered into a partnership with Konica Minolta Opto to
develop a non-invasive test for Barrett's Esophagus using the
LightTouch technology platform.
GUITAR CENTER: Incurs $236.9 Million Net Loss in 2011
-----------------------------------------------------
Guitar Center Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $236.94 million on $2.08 billion of net sales in 2011,
a net loss of $56.37 million on $2.01 billion of net sales in
2010, and a net loss of $189.85 million on $2 billion of net sales
in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $1.85 billion
in total assets, $1.93 billion in total liabilities and a $78.06
million total stockholders' deficit.
Bankruptcy Warning
If the Company's cash flows and capital resources are insufficient
to fund its debt service obligations, the Company may be forced to
reduce or delay capital expenditures, sell assets or operations,
seek additional capital or restructure or refinance its
indebtedness, including the notes. The Company cannot provide any
assurance that it would be able to take any of these actions, that
these actions would be successful and permit the Company to meet
its scheduled debt service obligations or that these actions would
be permitted under the terms of the Company's existing or future
debt agreements, including its senior secured credit facilities.
In the absence of those operating results and resources, the
Company could face substantial liquidity problems and might be
required to dispose of material assets or operations to meet the
Company's debt service and other obligations. The Company's
senior secured credit facilities and the indentures that govern
the notes will restrict its ability to dispose of assets and use
the proceeds from the disposition. The Company may not be able to
consummate those dispositions or to obtain the proceeds which the
Company could realize from them and these proceeds may not be
adequate to meet any debt service obligations then due.
If the Company cannot make scheduled payments on its debt, the
Company will be in default and, as a result:
* the Company's debt holders could declare all outstanding
principal and interest to be due and payable;
* the lenders under the Company's senior secured credit
facilities could terminate their commitments to lend the
Company money and foreclose against the assets securing
their borrowings; and
* the Company could be forced into bankruptcy or liquidation.
A copy of the Form 10-K is available for free at:
http://is.gd/pTB1zl
About Guitar Center
Guitar Center, Inc., headquartered in Westlake Village, Calif., is
the largest musical instrument retailer with 312 stores and a
direct response segment, which operates its websites. It operates
three distinct musical retail business - Guitar Center (about 70%
of revenue), Music & Arts (about 7% of revenue), and Musician's
Friend (its direct response subsidiary with 24% of revenue).
Total revenue is about $2 billion.
* * *
As reported in the Troubled Company Reporter on Feb. 28, 2011,
Moody's Investors Service affirmed Guitar Center, Inc.'s Caa2
Corporate Family Rating and the $622 million existing term loan
rating of Caa1 due October 2014. The Probability of Default
Rating was revised to Caa2/LD from Caa2 while the Speculative
Grade Liquidity assessment was changed to SGL-2 from SGL-3. The
rating outlook remains stable.
The Caa2/LD Probability of Default rating reflects Moody's view
that the extended deferral of interest on the Holdco notes
constitutes a distressed exchange under Moody's definition and
also anticipates that additional exchanges of this nature are
possible over the near term. The Limited Default designation was
prompted by the company's executed amendment of the HoldCo notes,
which allows for a deferral of 50% of the interest payments for 18
months. Moody's views this as a distressed exchange that provides
default avoidance. This LD designation applies to the proposed
follow-on amendment to defer the HoldCo note interest payments by
another six months. Subsequent to the actions, Moody's will
remove the LD designation and the PDR will be Caa2 going forward.
GRAND CHINA: Defaults on Payments to Titan Petrochemicals
---------------------------------------------------------
Dow Jones' DBR Small Cap reports that Titan Petrochemicals Group
said Grand China Logistics, the HNA Group-controlled shipping unit
accused last year of withholding payments on vessel charters, has
defaulted on payment obligations to it.
GRUBB & ELLIS: BGC to Close Purchase Shortly
--------------------------------------------
BGC Partners, Inc. has received approval from the U.S. Bankruptcy
Court for the Southern District of New York to acquire
substantially all the assets of Grubb & Ellis Company. BGC
expects to close the transaction shortly.
The combination of the two companies will give Newmark Knight
Frank and Grubb & Ellis more than100 offices in North America, 250
million square feet in Property and Facilities Management, and a
national Appraisal business.
"As we welcome the Grubb & Ellis team to the BGC family, we intend
to apply our financial strength, powerful proprietary technology,
and deep marketplace relationships to provide Grubb & Ellis and
its professionals with the resources they need to thrive and
grow," said Howard W. Lutnick, Chairman and Chief Executive
Officer of BGC.
"Alongside Newmark Knight Frank, the acquisition of Grubb &
Elliscreates a game-changing platform that further positions BGC
as one of the most innovative and dynamic players in commercial
real estate. As BGC continues to attract the best talent, invest
in our world-class technology, and apply capital to build and
expand into new markets, we are committed to providing Grubb &
Ellis with the right tools and support to increase its strength
and scale."
Michael Lehrman, Global Head of Real Estate at BGC, said, "The
expansion of BGC's commercial real estate platform creates
exciting new opportunities for our entire organization --
including the talented Grubb & Ellis real estate professionals who
are coming on board, as well as new opportunities for them to
provide outstanding value to their clients. Together we are
creating one of the most exciting platforms in the real estate
market, one that is well positioned to deliver the unwavering
service excellence that our clients expect, while enhancing
opportunities for our brokers and employees." "With Newmark
Knight Frank's strategic consultative approach to creating value
for clients and leading position in the New York market, along
with Grubb & Ellis' strength in transactional, management, and
valuation services, our two organizations are highly
complementary," said Barry M. Gosin, ChiefExecutive Officer of
Newmark Knight Frank.
"We share a client-focused culture, and together, Grubb &Ellis and
Newmark Knight Frank create a powerhouse in real estate with a
significant competitive advantage, built upon the foundation of
BGC's proven and powerful model. "James D. Kuhn, President of
Newmark Knight Frank, said "Since becoming part of BGC last fall,
Newmark Knight Frank has benefited substantially from BGC's
capital strength, proprietary technologies, and relationships with
the world's leading financial institutions and other
organizations. The addition of Grubb & Ellis will dramatically
increase our footprint and expand our business lines, including
Grubb &Ellis' prominent industrial practice. We are firm in our
conviction that Grubb & Ellis will deepen its capabilities,
attract the best talent, and deliver outstanding performance just
as Newmark Knight Frankhas as part of the BGC platform. Many of
the Grubb & Ellis business lines including the hotel, multifamily,
private client investment sales, and the financial asset strategic
management groups, will enhance our Capital Markets program." The
transaction was implemented as an asset sale under Section 363 of
the U.S. Bankruptcy Code. Cantor Fitzgerald & Co., an affiliate
of Cantor Fitzgerald, L.P. acted as a financial adviser to BGC in
connection with this transaction.
About BGC Partners
BGC Partners, Inc. -- http://www.bgcpartners.com/-- is a leading
global brokerage company primarily servicing the wholesale
financial markets, has over 4,000 employees in New York, London
and more than 30 other major financial centers around the world,
and conducts over $200 trillion in financial transactions for
customers annually.
About Grubb & Ellis
Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a
commercial real estate services and property management company
with more than 3,000 employees conducting throughout the United
States and the world. It is one of the oldest and most recognized
brands in the industry.
Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy
(Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell
almost all its assets to BGC Partners Inc. The Santa Ana,
California-based company disclosed $150.16 million in assets and
$167.2 million in liabilities as of Dec. 31, 2011.
Judge Martin Glenn presides over the case. The Debtors have
engaged Togut, Segal & Segal, LLP as general bankruptcy counsel,
Zuckerman Gore Brandeis & Crossman, LLP, as general corporate
counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor
in the Chapter 11 case. Kurtzman Carson Consultants is the claims
and notice agent.
Pursuant to the term sheet signed by the parties, BGC will buy the
assets for $30.02 million, consisting of a credit bid the full
principal amount outstanding under the (i) $30 million credit
agreement dated April 15, 2011, with BGC Note, (ii) the amounts
drawn under the $4.8 million facility, and (iii) the cure amounts
due to counterparties. BGC can terminate the contract if the sale
order has not been entered by the bankruptcy court in 25 days
after the execution of the Asset Purchase Agreement.
BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co.,
L.P., the DIP lender and Prepetition Secured Lender, are
represented in the case by Emanuel C. Grillo, Esq., at Goodwin
Procter LLP.
HANDY & HARMAN: S&P Gives 'B' Corp. Credit Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
corporate credit rating to Handy & Harman Group Ltd., a subsidiary
of Handy & Harman Ltd. The rating outlook is stable.
"At the same time, we assigned a preliminary 'B' (the same as the
corporate credit rating) issue-level rating to Handy & Harman
Group Ltd.'s proposed $200 million term loan B due 2018. The
preliminary recovery rating on the proposed notes is '4',
indicating our expectation of average (30% to 50%) recovery in
the event of payment default," S&P said.
The company plans to use proceeds from the proposed transaction to
repay outstanding debt as well as to pay related fees and
expenses.
"The preliminary 'B' corporate credit rating on White Plains,
N.Y.-based Handy & Harman reflects our assessment of its
'vulnerable' business risk and 'aggressive' financial risk," said
Standard & Poor's credit analyst Megan Johnston. "We view key
business risks to include the company's reliance upon cyclical
construction as well as repair and remodeling markets, some
exposure to highly volatile costs for raw materials such as silver
and steel, and a somewhat aggressive growth strategy. These
factors are partially offset by its good position in niche markets
and low customer concentration. Standard & Poor's Ratings Services
considers Handy & Harman's financial risk profile to be aggressive
given our expectation that it will maintain leverage between 4x
and 5x by the end of fiscal 2012. This leverage assumption
incorporates the expectation that any future acquisitions would be
financed in a manner that won't negatively impact the company's
financial risk profile."
"Our baseline scenario anticipates that demand for Handy &
Harman's diversified industrial products will modestly increase as
the economy rebounds and construction markets recover. We expect
that sales for the company overall could grow in the mid-to-high
single digits given continued market share gains. We are
forecasting adjusted EBITDA for 2012 of between $80 million and
$90 million, compared with about $75 million in 2011 due to
increased sales, offset by flat margins due to higher raw material
costs. Key risks to our forecast include a significant downturn in
the company's key end markets, namely cyclical residential and
commercial construction, or the inability to offset higher raw
material costs (particularly silver and steel) through hedging or
price increases," S&P said.
"The rating outlook is stable, reflecting our belief that Handy &
Harman's credit measures will remain in-line with the 'B'
corporate credit rating, given our expectation for a modest
improvement in the company's end markets (namely, commercial and
residential construction as well as repair and remodeling
markets), as well as potential market share gains. We expect
leverage to be maintained at 5x or lower over the next several
quarters. Our ratings incorporate the expectation that any
potential acquisitions would be financed in a manner that won't
negatively impact the company's financial risk profile. We also
expect the company's liquidity to remain adequate to fund internal
working capital needs as well as capital expenditures," S&P said.
"We could take a negative rating action if credit measures were to
weaken from current levels because, among other considerations,
the company's key end markets were to significantly weaken further
from current levels or if the company could not offset a sharp
increase in raw material costs with price increases resulting in a
material decline in EBITDA margins. Moreover, we could take a
negative rating action if the company uses debt for acquisitions
or shareholder-friendly actions," S&P said.
"We view a positive rating action as unlikely over the near term
given our view of the company's vulnerable business risk profile,"
S&P said.
HD SUPPLY: Moody's Upgrades Corporate Family Rating to 'Caa1'
-------------------------------------------------------------
Moody's Investors Service upgraded HD Supply, Inc.'s ("HDS")
Corporate Family Rating to Caa1 from Caa2 and its Probability of
Default Rating to Caa1 from Caa2. This rating action reflects
improvement in the company's operations and improved credit
metrics. Also, HDS is implementing a refinancing of its existing
capital structure which will extend its maturity profile
effectively by one year to 2015. The speculative grade liquidity
assessment remains SGL-3. The rating outlook is stable.
The following ratings/assessments were affected by this action:
Corporate Family Rating upgraded to Caa1 from Caa2;
Probability Default Rating upgraded to Caa1 from Caa2;
1st Lien Term Loan B due 2015 assigned B2 (LGD2, 29%);
1st Lien Sr. Sec. Notes due 2015 assigned B2 (LGD2, 29%);
2nd Lien Sr. Sec. Notes due 2015 assigned Caa1 (LGD4, 52%);
Sr. Unsec. PIK Notes due 2020 assigned Caa2 (LGD4, 66%); and,
$1.8 billion Sr. Sub. Notes due 2015 upgraded to Caa3 (LGD5,
87%) from Ca (LGD6, 90%).
Speculative grade liquidity assessment remains SGL-3.
Ratings Rationale
The upgrade of HDS' corporate family rating to Caa1 from Caa2
reflects improvement in its operations and strengthening credit
metrics. HDS' is reaping the benefits of cost reduction programs,
achieving an adjusted EBITA margin of 6.6% for FY11 ended 01/29/12
versus 5.4% for the previous year. As a result Debt-to-EBITDA
leverage improved to 9.5 times at FYE11 versus 10.8 times at FYE10
(all ratios incorporate Moody's standard adjustments). While still
weak, Moody's anticipates that HDS' credit metrics will continue
to improve, becoming more supportive of the Caa1 Corporate Family
Rating.
HDS is substantially refinancing its debt capital restructure,
effectively extending its debt maturity profile by one year to
2015 and giving the company more time to benefit from a rebound in
key end markets. However, benefits from the refinancing remain
limited by springing maturities for most of the proposed credit
facilities. The springing maturities are based on the amount of
HDS' Sr. Subordinated Notes that remain outstanding at their
maturity, which is September 2015. Once theses notes are
refinanced prior to April 2015, most of the maturities of the new
facilities will be extended with the soonest being April 2017 when
the proposed revolving credit facility would then come due.
The change in rating outlook to stable from negative reflects
Moody's view that availability of about $1.0 billion on a pro
forma basis under the company's proposed revolving credit facility
gives HDS sufficient ability to meet potential shortfalls in
operating cash flows, especially as the Sr. Subordinated Notes due
2015 are now cash pay, and to fund working capital requirements
and growth levels of capital expenditure.
HDS is recapitalizing most of its debt capital structure with new
debt instruments: $1.5 billion asset-based senior secured
revolving credit facility (unrated), about $1.9 billion of first
lien debt equally split between a term loan and notes that will be
pari passu to each other (each rated B2), $775 million of second
lien debt (rated Caa1), and about $757 million of unsecured debt
(rated Caa2). A drawdown of about $175 million under the revolving
credit facility and proceeds from the other proposed debt
issuances will be used to refinance approximately $3.2 billion of
existing debt - at which time the ratings for all existing
facilities will be withdrawn with the exception of HDS' Sr. Sub.
PIK Notes due 2015 - to pay about $130 million of accrued
interest, and the remaining balance used to pay related fees and
expenses, OID, and call premiums. HDS' Sr. Subordinated PIK Notes
due 2015 are upgraded to Caa3 from Ca since the amount of more
senior debt in HDS' capital structure will be reduced by proceeds
from asset sales, giving these notes better values in a recovery
scenario.
Although Moody's believes the extension of HDS' maturity profile
by one year is a credit positive, future positive rating actions
are unlikely until the company contends with about $6.0 billion of
committed facilities coming due in 2015. Moody's also recognizes
that HDS' maturity profile would be extended once the Sr.
Subordinated Notes due 2015 are refinanced.
Developments that could lead to downward rating pressures include
any erosion in the company's financial performance due to a
downturn in its end markets. Deterioration in HDS' liquidity
profile could negative impact the ratings and its speculative
grade liquidity assessment. Redemption of debt at deep discounts
or conversion of debt for equity could negatively impact the
ratings as well.
The principal methodology used in rating HD Supply was the Global
Distribution and Supply Chain Services Industry Methodology,
published in November 2011. Other methodologies used include Loss
Given Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.
HD Supply, Inc., located in Atlanta, GA, is one of the largest
North American wholesale distributors supporting residential and
non-residential construction and, to a lesser extent, electrical
consumption and repair and remodeling. HDS also provides
maintenance, repair and operations ("MRO") services. Its
businesses are organized around three segments: Infrastructure and
Energy; Maintenance, Repair & Improvement; and, Specialty
Construction. HDS operates throughout the U.S. and Canada serving
contractors, government entities, maintenance professionals, home
builders and professional businesses. The Carlyle Group, Bain
Capital, and Clayton, Dubilier & Rice, through their respective
affiliates (collectively the "Sponsors"), are the primary owners
of HDS. The Home Depot, Inc. retains a 12.5% minority ownership in
HDS. Revenues for twelve months through January 29, 2012 totaled
approximately $7.7 billion.
HEALTH CARE REIT: Fitch Rates $1 Billion Preferred Stock 'BB+'
--------------------------------------------------------------
Fitch Ratings assigns a credit rating of 'BBB' to the $600 million
4.125% senior unsecured notes due April 1, 2019 issued by Health
Care REIT, Inc. (NYSE: HCN). The notes were issued at 99.694% of
par to yield 4.176%.
HCN intends to use the net proceeds from the offering to redeem or
settle upon conversion approximately $126 million aggregate
outstanding principal amount of its 4.75% convertible senior notes
due 2026, repay up to $226 million of secured debt, and for
general corporate purposes, including investing in health care and
seniors housing properties. Fitch views the issuance positively
as it further demonstrates HCN's healthy access to capital at
favorable interest rates and grows the unencumbered portfolio.
Fitch currently rates HCN as follows:
-- Issuer Default Rating (IDR) 'BBB';
-- $2 billion senior unsecured credit facility 'BBB';
-- $4.2 billion senior unsecured notes 'BBB';
-- $788.1 million senior unsecured convertible notes 'BBB';
-- $1 billion preferred stock 'BB+'.
The Rating Outlook is Stable.
The 'BBB' IDR takes into account HCN's broad healthcare real
estate platform that contributes toward a fixed-charge coverage
ratio that is consistent with the rating, as well as leverage that
is appropriate for a 'BBB' rated healthcare real estate investment
trust (REIT) when normalizing earnings from recent acquisitions
and pro forma for recently announced acquisitions and the $1.1
billion common equity raise in February 2012. HCN also has good
access to capital and a solid liquidity position, including
contingent liquidity from unencumbered assets.
Credit concerns include operational volatility associated with the
company's RIDEA-related investments, regulatory risks affecting
the healthcare REIT sector, and modest operator concentration
related to Genesis HealthCare.
Fixed-charge coverage is appropriate for the 'BBB' rating. For
2011, fixed-charge coverage (recurring operating EBITDA including
Fitch's estimate of recurring cash distributions from
unconsolidated entities less recurring capital expenditures and
straight-line rent adjustments divided by total interest incurred
and preferred dividends) was 2.3 times (x), down from 2.6x in 2010
and 3.1x in 2009. Significant debt issuances prior to
acquisitions during 2011 had a negative impact on coverage. Fitch
anticipates that coverage will increase to the mid-to-high 2.0x
range through 2013, driven principally by solid projected
operating fundamentals. In a more adverse case than anticipated
by Fitch, coverage could decline to 2.1x in 2013, which is more
commensurate with a 'BBB-' rating for a healthcare REIT.
Leverage is appropriate for the 'BBB' rating. Net debt as of Dec.
31, 2011 to fourth quarter 2011 (4Q'11) annualized recurring
operating EBITDA was 6.5x. However, leverage is expected to
stabilize in the mid 5.0x range after adjusting EBITDA for the
timing of 4Q'11 acquisitions and pro forma for $1 billion of
acquisitions year to date in 2012, the $1.1 billion common equity
raise in February 2012, and the $600 million unsecured notes
issuance. In a more adverse case than currently anticipated by
Fitch, leverage could rise above 8.0x over the next 12 to 24
months, which would be consistent with a rating lower than 'BBB'.
HCN exhibits strong access to capital, having raised $2 billion
of common and preferred equity and unsecured debt in 2012, in
addition to $4.3 billion of total debt and equity in 2011 to fund
acquisition and development.
The company's liquidity is strong pro forma for the recent capital
raises and announced acquisitions subsequent to year end. Sources
of liquidity (unrestricted cash, unsecured revolving credit
facility availability and projected retained cash flows from
operating activities after dividends) divided by uses of liquidity
(debt maturities, projected recurring capital expenditures and
projected development expenditures) was 1.8x for Jan. 1, 2012 to
Dec. 31, 2013. Liquidity coverage would improve to 2.5x if 80% of
secured debt is refinanced.
The company also benefits from a well-laddered maturity schedule.
Through 2013 the company has only 11.7% of total debt maturing
(including HCN's pro rata share of joint venture debt maturities),
and no more than 15% of total debt maturing in any given year
through 2018.
HCN also has good contingent liquidity due to the presence of
a large unencumbered property pool. Unencumbered assets
(unencumbered annualized 4Q'11 net operating income [NOI] divided
by a stressed 9% cap rate) to unsecured debt was 2.0x, which is
appropriate for the 'BBB' rating.
The portfolio exhibits the potential for increased cash flow
volatility from recent acquisitions in RIDEA operating
partnerships, which represent 13.9% of total annualized 4Q'11 NOI.
Separately, the Centers for Medicare and Medicaid Services (CMS)
announced in July 2011 that it is reducing Medicare skilled-
nursing facility (SNF) Prospective Payment System (PPS) payments
in fiscal 2012 by $3.87 billion or 11.1% relative to fiscal 2011.
While HCN's tenants exhibit adequate rent (EBITDARM) coverage of
1.38x for the seniors housing triple net portfolio and 2.22x for
the SNF portfolio, reductions in SNF PPS will likely result in
moderate declines in cash flow coverage. This change in
reimbursement is indicative of the overall regulatory risk that
the healthcare REIT sector will continue to endure, especially
given government budget issues.
HCN's portfolio exhibits moderate tenant concentration resulting
from the 2011 acquisition of certain assets of Genesis HealthCare.
As of Dec. 31, 2011, Genesis was the largest tenant, representing
17.2% of invested capital. The next largest tenant is Merrill
Gardens at 7.9% of invested capital. The large concentration
exposes HCN to increased individual tenant credit risk.
The Stable Outlook centers on HCN's solid normalized credit
metrics, laddered debt maturity schedule and strong liquidity
position. The Outlook also takes into account Fitch's view that
assets within the senior healthcare sector will continue to
benefit from solid fundamentals, positive demographic trends, and
limited new supply.
The two-notch differential between HCN's IDR and preferred stock
rating is consistent with Fitch's criteria for corporate entities
with an IDR of 'BBB'. Based on Fitch research titled 'Treatment
and Notching of Hybrids in Nonfinancial Corporate and REIT Credit
Analysis', these preferred securities are deeply subordinated and
have loss absorption elements that would likely result in poor
recoveries in the event of a corporate default.
The following factors may result in positive momentum in the
ratings and/or Rating Outlook:
-- Fixed-charge coverage sustaining above 3.0x (for 2011, fixed
charge coverage was 2.3x but is expected to improve pro forma
for recent acquisitions and the 1Q'12 common and preferred
equity offerings);
-- Leverage sustaining below 5.0x (as of Dec. 31, 2011, leverage
was 6.5x but is expected stabilize in the mid 5.0x range pro
forma for recent acquisitions and capital raises);
-- Unencumbered assets-to-unsecured debt sustaining above 3.0x
(unencumbered annualized 4Q'11 NOI divided by a stressed 9%
cap rate to unsecured debt was 2.0x as of Dec. 31, 2011).
The following factors may result in negative momentum in the
ratings and/or Rating Outlook:
-- Fixed-charge coverage sustaining below 2.5x;
-- Leverage sustaining above 6.0x;
-- Deteriorating tenant/operator cash flow coverage of rent;
-- Unencumbered assets-to-unsecured debt sustaining below 2.0x;
-- A base case liquidity coverage ratio sustaining below 1.0x.
HEARTHSTONE HOME: U.S. Trustee Appoints 7-Member Creditors' Panel
-----------------------------------------------------------------
Nancy J. Gargula, U.S. Trustee for Region 13, pursuant to 11
U.S.C. Sec. 1102(a) and (b), appointed seven unsecured creditors
to serve on the Official Committee of Unsecured Creditors of
Hearthstone Homes, Inc.
The Creditors Committee members are:
1) Christensen Lumber, Inc.
Attn: Tom Christensen, Committee Chairman
and Shannon Morrissey
714 South Main Street
Fremont, NE 68025
Tel: (402) 721-3212
E-mail: tom@christensenlumber.com
and shannon@christensenlumber.com
2) WP Plumbing LLC
Attn: Don Schnicke
P.O. Box 152
Bennington, NE 68007
Tel: (402) 917-1993
E-mail: wpplumbing@me.com
3) Poured Foundations, Inc.
Attn: Doug Lynch
8709 South 9th Street
Bellevue, NE 68147
Tel: (402) 510-1541
E-mail: pfidoug@pfinc.omhcoxmail.com
4) Nelson Builders Inc.
Attn: Wesley J. Nelson
6775 South 118th Street, Suite 103
Omaha, NE 68137
Tel: (402) 505-3400
E-mail: nelsoncompanies.wes@nb.omhcoxmail.com
5) Peterson Building Group
Attn: Troy L. Peterson
3004 North 170th Street
Omaha, NE 68116
Tel: (402) 960-1085
E-mail: pbg@cox.net
6) Imperial Tile Company, Inc.
Attn: Larry McKee
14723 Industrial Road
Omaha, NE 68144
Tel: (402) 333-0808
E-mail: larry@imperialtileinc.com
7) AA American HVAC
Attn: Corwin Keller
1702 South 10th Street
Omaha, NE 68108
Tel: (402) 342-4843
E-mail: corwink@AAAHeat.com
Hearthstone Homes, Inc., filed a Chapter 11 petition in Omaha,
Nebraska (Bankr. D. Neb. Case No. 12-80348) on Feb. 24, 2012.
ketv.com reported that HearthStone Homes filed for Chapter 11
bankruptcy protection after a deal to sell the company fell
through. Hearthstone Homes' principal business activities have
been the purchase, development and sale of residential real
property for 40 years.
Chief Judge Thomas L. Saladino presides over the case. The Debtor
is represented by Robert F. Craig, P.C. Hearthstone estimated
assets and debts of $10 million to $50 million as of the Chapter
11 filing.
Wells Fargo N.A., the primary lender, is represented by lawyers at
Croker Huck Kasher DeWitt Anderson & Gonderinger LLC.
HECKMANN CORP: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services has assigned its preliminary
'B+' corporate credit rating to Coraopolis, Pa.-based Heckmann
Corp. The outlook is stable.
"At the same time, we assigned our preliminary 'B-' issue-level
and '6' recovery ratings to the company's proposed $250 million
senior unsecured notes. The '6' recovery rating indicates our
expectation for a negligible (0% to 10%) recovery for lenders in
the event of a payment default. We have assigned our ratings based
on preliminary terms and conditions," S&P said.
"The company intends to use the note proceeds, along with $75
million from an equity issuance, $17.5 million of equity held in
escrow, and $63 million of existing cash to acquire Scottsdale,
Ariz.-based oil recycler Thermo Fluids Inc. (TFI; unrated), a
provider of used oil recycling services in the Western U.S. The
company will also use the proceeds to repay its existing secured
credit facilities, to pay for transaction fees and expenses, and
for general corporate purposes," S&P said.
"The preliminary ratings on Heckmann reflect the company's 'weak'
business risk profile and 'aggressive' financial risk profile,"
said Standard & Poor's credit analyst Henry Fukuchi. "Heckmann
transports and disposes of water used in the hydraulic fracturing
process of oil and gas exploration in shale regions. Pro forma for
the TFI acquisition, we expect the company's traditional water-
related businesses--Heckmann Water Resources, or HWR--to account
for 58% of revenues and the acquired oil-related businesses to
account for 42%. The company's operations are subject to the
supplies and pricing of oil and gas, since adverse commodity price
movements may impact the future development and growth rates of
shale fracking. The company has grown significantly during the
past three years, increasing sales from less than $4 million in
2009 to $157 million in 2011. We expect sales to hit $380 million
in 2012."
"The company is acquiring TFI for approximately $245 million. We
expect that $227.5 million of the purchase price will come in the
form of cash consideration and $17.5 million as equity issued to
the former owners of TFI, which include equity sponsor CIVC
Partners," S&P said.
"We believe Heckmann's traditional HWR business benefits from a
good market position, because the company has a large asset base
in the specialized field of frack water disposal, with more than
635 trucks in service and more than 1,100 frack tanks that are
available for its customers to lease. A key feature highlighting
the company's competitive position is its underground pipelines
around Haynesville, La., one of which is a PVC pipeline spanning
40 miles to provide fresh water used in the fracking process and
another is a fiberglass pipeline that stretches for 50 miles to
dispose of the produced water into its network of 21 salt water
disposal (SWD) wells in the region. The company also has five SWD
wells near Eagle Ford, Texas, and two SWD wells around the
Tuscaloosa Marine Shale area in Louisiana and Mississippi, with a
handful of SWD permits in other regions," S&P said.
"We characterize Heckmann's financial risk profile as
'aggressive'. Despite its public ownership, Heckmann is still a
relatively new and growing company without an established track
record of prudent financial policies. Because the fracking
industry is in a high-growth stage, the company has had to fund
large capital expenditures in order to build the infrastructure
necessary to capitalize on this trend. We still anticipate high
capital expenditures during the next year, though we note that
these expenditures are largely discretionary as opposed to
mandatory, and should ease over time. In addition, we expect the
company to engage in tuck-in acquisitions from time to time, which
could involve additional borrowings. However, the ratings are
based on the expectation that the company will successfully
execute the equity offering to help fund the TFI acquisition,
which we expect will keep credit measures appropriate for the
rating," S&P said.
"The stable outlook reflects our expectation that hydraulic
fracturing activity will remain favorable to support solid sales
and profitability over the next couple of years, while reductions
in discretionary capital spending will improve the company's free
cash flow generation. Our base case assumes that, over the next
year, Heckmann will be able to maintain adjusted EBITDA margins of
around 25%, with FFO to debt of 25% as well," S&P said.
"We could lower the ratings if downside risks to our forecast were
to materialize, such as insufficient proceeds from the pending
equity offering, greater-than-expected debt incurrence to fund the
TFI acquisition, unfavorable economic trends that reduce the
profitability of hydraulic fracturing, environmental-related
regulations that curtail drilling activity and investment, a
disruption in water pipelines, other operating problems that
could constrain liquidity, or significant debt incurrence to fund
a shareholder distribution," Mr. Fukuchi continued. "Based on our
scenario forecasts, we could take a negative rating action if the
company's sales growth in 2012 were to fail to meet expectations
and its EBITDA margins decreased to 21%. If this were to happen,
Heckmann's FFO to total adjusted debt would likely fall to the 15%
area."
"We could raise the ratings modestly within the next 12 months if
the company establishes and maintains a track record of reliable
operating performance and its business prospects remain robust.
While the hydraulic fracturing industry appears to be strong at
present, changes in oil and gas prices could affect profitability
in certain regions, forcing some service providers to incur
unexpected costs as they move manpower and equipment to other
regions," S&P said.
"Another important factor in our consideration of a higher rating
is whether Heckmann maintains adequate liquidity levels despite
high capital spending and seasonal working capital-related
borrowings," S&P said.
HERCULES OFFSHORE: Prices Public Offering of 20MM Common Stock
--------------------------------------------------------------
Hercules Offshore, Inc., has priced an underwritten public
offering of 20,000,000 shares of common stock at a public offering
price of $5.10 per share. The offering is expected to close on
March 28, 2012.
The Company has also granted the underwriters a 30-day option to
purchase up to 3,000,000 additional shares to cover over-
allotments, if any. The Company intends to use 50% of the net
proceeds from the offering, including the proceeds from any
exercise of the underwriters' over-allotment option, to repay
indebtedness outstanding under the Company's term loan facility
and to use the remaining net proceeds to fund a portion of the
purchase price for its previously announced acquisition of the
drilling rig Ocean Columbia as well as the costs associated with
the repair, upgrade and mobilization of Ocean Columbia.
Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co. and
Deutsche Bank Securities Inc. are serving as Joint Book-Running
Managers of the offering.
About Hercules Offshore
Hercules Offshore Inc. (NASDAQ: HERO) --
http://www.herculesoffshore.com/-- provides shallow-water
drilling and marine services to the oil and natural gas
exploration and production industry in the United States, Gulf of
Mexico and internationally. The Company provides these services
to integrated energy companies, independent oil and natural gas
operators and national oil companies. The Company operates in six
business segments: Domestic Offshore, International Offshore,
Inland, Domestic Liftboats, International Liftboats and Delta
Towing.
The Company reported a net loss of $76.12 million in 2011, a
net loss of $134.59 million in 2010, and a net loss of $91.73
million in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $2 billion in
total assets, $1.09 billion in total liabilities, and
$908.55 million in stockholders' equity.
* * *
The Troubled Company Reported said on March 23, 2012, that
Moody's Investors Service upgraded Hercules Offshore, Inc.
Corporate Family Rating (CFR) and Probability of Default Rating
(PDR) to B3 from Caa1 contingent upon the completion of its
recently announced recapitalization plan.
Hercules' B3 CFR reflects its jackup fleet, which consists
primarily of standard specification rigs with an average age of
about 30 years. Its rigs are geographically concentrated in the
Gulf of Mexico (GoM), a market that experienced a slow-down after
the Macondo well incident. However, over the last year a pick-up
in permitting and activity levels in the GoM, has led to higher
dayrates. For Hercules, the improving market conditions have
stabilized its cash flow from operations, which are expected
continue to improve for at least the next 18 to 24 months as old
contracts roll into new contracts with higher dayrates. These
improving market conditions support the decision to upgrade
Hercules' CFR at this time.
As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings
Services revised its outlook on Houston-based Hercules Offshore
Inc. to stable from negative and affirmed its 'B-' corporate
credit rating on the company. "The rating on the company's senior
secured credit facility remains 'B-' (the same as the corporate
credit rating on the company) with a recovery rating of '3',
indicating our expectation of a meaningful (50% to 70%) recovery
in the event of payment default," S&P said.
"Our ratings on Hercules reflect its participation in the highly
volatile and competitive shallow-water drilling and marine
services segments of the oil and gas industry. The ratings also
incorporate our expectation that day rates and utilization for the
company's jack-up rigs in the U.S. Gulf of Mexico will remain
robust throughout 2012. Moreover, we expect the company's domestic
offshore operations will provide the majority of EBITDA generation
in 2012, since its international offshore segment will perform
more weakly compared with 2011 due to lower contract renewal day
rates reflecting current market conditions. The ratings also
incorporate the company's geographic and product diversification
(provided by the its liftboat segments) and adequate liquidity, as
well as the risks associated with the Securities and Exchange
Commission's investigation into possible violations of securities
law, including possible violations of the Foreign Corrupt
Practices Act. The company is also the subject of a review by the
U.S. Department of Justice (DOJ)," S&P said.
HERCULES OFFSHORE: Prices offering of Senior Secured Notes
----------------------------------------------------------
Hercules Offshore, Inc., has priced a private placement of
$300,000,000 aggregate principal amount of senior secured notes
due 2017, which will bear an interest rate of 7.125% per annum.
The Company also announced that it has priced a private placement
of $200,000,000 aggregate principal amount of senior notes due
2019, which will bear an interest rate of 10.25% per annum.
The notes are being sold at par. Hercules Offshore expects to use
the net proceeds from the notes offering to repay all of the
indebtedness outstanding under the Company's existing secured term
loan.
As a result of the repayment of the Company's term loan, the
Company's outstanding 10.5% Senior Secured Notes will become
unsecured. The Company expects to use the remaining net proceeds
for general corporate purposes, including to fund a portion of the
purchase price for the previously announced acquisition of the
drilling rig Ocean Columbia as well as the costs associated with
the repair, upgrade and mobilization of the Ocean Columbia.
About Hercules Offshore
Hercules Offshore Inc. (NASDAQ: HERO) --
http://www.herculesoffshore.com/-- provides shallow-water
drilling and marine services to the oil and natural gas
exploration and production industry in the United States, Gulf of
Mexico and internationally. The Company provides these services
to integrated energy companies, independent oil and natural gas
operators and national oil companies. The Company operates in six
business segments: Domestic Offshore, International Offshore,
Inland, Domestic Liftboats, International Liftboats and Delta
Towing.
The Company reported a net loss of $76.12 million in 2011, a
net loss of $134.59 million in 2010, and a net loss of $91.73
million in 2009.
The Company's balance sheet at Dec. 31, 2011, showed $2 billion in
total assets, $1.09 billion in total liabilities, and
$908.55 million in stockholders' equity.
* * *
The Troubled Company Reported said on March 23, 2012, that
Moody's Investors Service upgraded Hercules Offshore, Inc.
Corporate Family Rating (CFR) and Probability of Default Rating
(PDR) to B3 from Caa1 contingent upon the completion of its
recently announced recapitalization plan.
Hercules' B3 CFR reflects its jackup fleet, which consists
primarily of standard specification rigs with an average age of
about 30 years. Its rigs are geographically concentrated in the
Gulf of Mexico (GoM), a market that experienced a slow-down after
the Macondo well incident. However, over the last year a pick-up
in permitting and activity levels in the GoM, has led to higher
dayrates. For Hercules, the improving market conditions have
stabilized its cash flow from operations, which are expected
continue to improve for at least the next 18 to 24 months as old
contracts roll into new contracts with higher dayrates. These
improving market conditions support the decision to upgrade
Hercules' CFR at this time.
As reported by the TCR on Jan. 23, 2012, Standard & Poor's Ratings
Services revised its outlook on Houston-based Hercules Offshore
Inc. to stable from negative and affirmed its 'B-' corporate
credit rating on the company. "The rating on the company's senior
secured credit facility remains 'B-' (the same as the corporate
credit rating on the company) with a recovery rating of '3',
indicating our expectation of a meaningful (50% to 70%) recovery
in the event of payment default," S&P said.
"Our ratings on Hercules reflect its participation in the highly
volatile and competitive shallow-water drilling and marine
services segments of the oil and gas industry. The ratings also
incorporate our expectation that day rates and utilization for the
company's jack-up rigs in the U.S. Gulf of Mexico will remain
robust throughout 2012. Moreover, we expect the company's domestic
offshore operations will provide the majority of EBITDA generation
in 2012, since its international offshore segment will perform
more weakly compared with 2011 due to lower contract renewal day
rates reflecting current market conditions. The ratings also
incorporate the company's geographic and product diversification
(provided by the its liftboat segments) and adequate liquidity, as
well as the risks associated with the Securities and Exchange
Commission's investigation into possible violations of securities
law, including possible violations of the Foreign Corrupt
Practices Act. The company is also the subject of a review by the
U.S. Department of Justice (DOJ)," S&P said.
HIGH RIVER: Submits First Default Status Report
-----------------------------------------------
High River Gold Mines Ltd. is providing its first Default Status
Report in accordance with National Policy 12-203 - Cease Trade
Orders for Continuous Disclosure Defaults.
On March 1, 2012, High River announced that the Ontario Securities
Commission has noted the Company in default of its continuous
disclosure obligations under Ontario securities law due to the
Company not having filed National Instrument 43-101 compliant
technical reports to support the current mineral reserves and
mineral resources at its Zun-Holba and Irokinda mines. A
management cease trade order in respect of the Company was issued
by the OSC on March 15, 2012.
High River previously disclosed that it anticipated that a new
technical report for each of the Zun-Holba and Irokinda mines
would be completed by March 30, 2012 and the Company would file
such reports concurrently with its annual filings. However, the
preparation of the Technical Reports is taking longer than
anticipated and consequently the anticipated filing date of the
Technical Reports has been delayed. High River currently
anticipates filing the new Technical Reports by April 16, 2012.
Other than this delay in the anticipated filing date for the
Technical Reports, High River reports that since announcing the
original Notice of Default on March 1, 2012, there have not been
any material changes to the information contained therein, nor any
failure by High River to fulfill its intentions as stated therein,
and there are no additional defaults or anticipated defaults
subsequent to such announcement. Furthermore, there have been no
additional material changes in respect of High River and its
affairs that have not been generally disclosed.
About High River
High River is an unhedged gold company with interests in producing
mines, development and advanced exploration projects in Russia and
Burkina Faso. Two underground mines, Zun-Holba and Irokinda, are
situated in the Lake Baikal region of Russia. Two open pit gold
mines, Berezitovy in Russia and Taparko-Bouroum in Burkina Faso,
are also in production. Finally, High River has a 90% interest in
a development project, the Bissa gold project in Burkina Faso, and
a 50% interest in an advanced exploration project with NI 43-101
compliant resource estimates, the Prognoz silver project in
Russia.
HORNE INTERNATIONAL: Incurs $121,000 Comprehensive Loss in 2011
---------------------------------------------------------------
Horne International, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net and total comprehensive loss of $121,000 on $5.68 million of
revenue for the 12 months ended Dec. 25, 2011, compared with a net
and total comprehensive loss of $1.04 million on $3.43 million of
revenue for the 12 months ended Dec. 26, 2010.
The Company's balance sheet at Dec. 25, 2011, showed $1.33 million
in total assets, $2.18 million in total liabilities and a $853,000
total stockholders' deficit.
For 2011, Stegman & Company, in Baltimore, Maryland, expressed
substantial doubt as to the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has experienced continuing net losses for each of the last four
years and as of Dec. 25, 2011, current liabilities exceeded
current assets by $900,000.
A copy of the Form 10-K is available for free at:
http://is.gd/OnGVvn
About Horne International
Fairfax, Va.-based Horne International, Inc., is an engineering
services company focused on provision of integrated, systems
approach based solutions to the energy and environmental sectors.
HUSSEY CORP: Plan Exclusivity Extension Hearing on April 30
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Hussey Copper Corp. sold the business for $107.75
million and said in a court filing it can't work out details on a
liquidating Chapter 11 plan until there's resolution of a
"significant" claim of the Pension Benefit Guaranty Corp. Hussey
made the statements in a motion for a 45-day expansion of the
exclusive right to propose a plan. If granted by the bankruptcy
court at an April 30 hearing, the new deadline would be May 5.
According to the report, Hussey said it circulated a draft plan on
March 14 to the creditors' committee. The plan can't be
consensual without resolution of claims asserted by the PGBC, the
filing says.
About Hussey Copper
Hussey Copper Corp., based in Leetsdale, Pennsylvania, is one of
the leading manufacturers of copper products in the United States.
Hussey Copper was founded in Pittsburgh in 1848. The Company and
its affiliates, which operate one manufacturing facility in
Leetsdale and two facilities in Eminence, Kentucky, manufacture "a
wide range of value-added copper products and copper-nickel
products. The Company has more than 500 full-time employees.
Hussey Copper Corp. filed a Chapter 11 petition (Bankr D. Del.
Case No. 11-13010) on Sept. 27, 2011, with a deal to sell
substantially all assets. Five other affiliates also filed
separate petitions (Case Nos. 11-13012 to 11-13016). Hussey
Copper Ltd. estimated $100 million to $500 million in assets and
debts. Hussey Copper Corp. estimated up to $50,000 in assets and
up to $100 million in debts.
Mark Minuti, Esq., at Saul Ewing LLP, serves as counsel to the
Debtors. Donlin Recano & Company Inc. is the claims and notice
agent. The Debtors tapped Winter Harbor, LLC in substitution for
Huron Consulting Services LLC.
An official creditors' committee has been appointed in the case.
The panel selected Lowenstein Sandler PC as counsel. The panel
selected FTI Consulting, Inc. as restructuring and financial
advisor.
The stalking horse bidder, KHC Acquisitions LLC, a unit of Kataman
Metals LLC, is represented in the case by David D. Watson, Esq.,
and Scott Opincar, Esq., at McDonald Hopkins LLC, in Cleveland.
Counsel to PNC Bank NA, as lender, issuer and agent for the
Debtors' secured lenders, are Lawrence F. Flick II, Esq., Blank
Rome LLP, in New York, and, Regina Stango Kelbon, Esq., at Blank
Rome LLP, in Wilmington.
US private equity firm Patriarch Partners officially acquired
Hussey Copper on Dec. 16, 2011. The buyout firm of distressed
debt mogul Lynn Tilton acquired Hussey Copper for $107.8 million
after a nine-hour, 34-round auction.
Bankruptcy Judge Brendan L. Shannon approved the name change of
Hussey Copper Corp. et al., to HCL Liquidation Ltd.
INNER CITY: Seeks to Borrow $3 Million Pending Sale to Lenders
--------------------------------------------------------------
Dow Jones' DBR Small Cap reports that Inner City Media Corp. says
it's relocating its New York headquarters to save money and needs
to borrow $3 million from its senior lenders, who've been cleared
to buy the company out of Chapter 11, to do so.
About Inner City
On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress
Credit Funding I L.P., and Drawbridge Special Opportunities Fund
Ltd., signed involuntary Chapter 11 petitions for Inner City Media
Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to
11-13979) to collect on a $254 million debt.
The Petitioning Creditors are party to the senior secured credit
Facility pursuant to which they (or their predecessors in
interest) extended $197 million in loans to the Alleged Debtors to
be used for general corporate purposes. More than two years ago,
the Alleged Debtors defaulted under the Senior Secured Credit
Facility, and in any event the entire amount of principal and
accrued and unpaid interest and fees became immediately due and
payable on Feb. 13, 2010.
Inner City Media's affiliates subject to the involuntary Chapter
11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting
Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC-
NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C.,
Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III,
L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi,
L.L.C., and Urban Radio of South Carolina, L.L.C.
Judge Shelley C. Chapman granted each of Inner City and its debtor
affiliates relief under Chapter 11 of the United States Code. The
decision came after considering the involuntary petitions, and the
Debtors' answer to involuntary petitions and consent to entry of
order for relief and reservation of rights.
Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and
Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J.
Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader,
Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit
Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are
Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth &
Zabel LLP.
Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel.
Rothschild Inc. serves as the Debtors' financial advisors and
investment bankers. GCG Inc. serves as the Debtors' claims agent.
The United States Trustee said that an official committee under 11
U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of
Inner City Media because an insufficient number of persons holding
unsecured claims against the Debtor has expressed interest in
serving on a committee.
INTERNATIONAL MEDIA: Court Okays Sale to Lenders
------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware has approved on March 23, 2012, International
Media Group, Inc., et al.'s sale of the assets to lenders NRJ TV
LA OpCo, LLC, NRJ TV LA License Co., LLC, NRJ TV Hawaii Opco, LLC,
and NRJ TV Hawaii License Co., LLC.
Under the Asset Purchase Agreement, the Debtors will sell
substantially all of their assets, free and clear of all liens,
claims, encumbrances, and interests. A copy of the Agreement is
available for free at:
http://bankrupt.com/misc/INTERNATIONAL_MEDIA_apa.pdf
As reported by the Troubled Company Reporter on March 8, 2012, the
Court authorized the Debtors to sell their assets in an auction
led by lenders. There were no competing bids, and thus the
auction was canceled.
NRJ TV II LLC, an entity created by Fortress Credit Corp., the
agent to the first lien lenders, will purchase the assets.
Fortress assumed the debt obligations from General Electric
Capital Corporation. As of Jan. 9, 2012, the total outstanding
balance under the first lien debt was $77.3 million, including $67
million on a term-loan. The Stalking Horse Bidder's offer
consists of $45 million in credit bid plus assumption of certain
liabilities and the funding of a carve-out for payment of wind-
down costs, professional fees and expenses, and U.S. Trustee fees
and clerk of court fees.
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.
KANSAS CITY SOUTHERN: S&P Raises Corporate Credit Rating to 'BB+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Kansas
City, Mo.-based Kansas City Southern, including raising the
corporate credit rating to 'BB+' from 'BB'. The outlook is
positive.
"Our rating actions reflect KCS' stronger operating profitability,
cash flow adequacy, and asset protection measures," said Standard
& Poor's credit analyst Anita Ogbara.
"Over the past year, KCS has refinanced a substantial portion of
its higher-interest debt and extended maturities. Standard &
Poor's characterizes the company's business risk profile as
'satisfactory,' financial risk profile as 'significant,' and
liquidity as 'adequate,' according to our criteria," S&P said.
KCS' financial risk profile, though improving, remains somewhat
weaker than most of its Class 1 peer railroads.
"The ratings incorporate our expectation that KCS will manage
capital expenditures, growth initiatives, and shareholder rewards,
if any, in a disciplined manner," Ms. Ogbara said.
"The positive outlook reflects that over the next year, Standard &
Poor's expects KCS' revenues to benefit from modest pricing
increases and volumes to benefit from the gradually improving
economy in the U.S. and Mexico," S&P said.
"We believe sequential improvement in freight volumes and pricing,
ongoing expense reduction, and moderate capital spending will
result in increased earnings and cash flow for the remainder of
2012 and early 2013," Ms. Ogbara added.
KCS is significantly smaller and less diversified than its peers,
but it operates a critical rail network in the south-central U.S.
and Mexico. KCS has fully integrated its Kansas City Southern de
Mexico S.A. de C.V. (KCSM) subsidiary with the operations of
Kansas City Southern Railway Co. (KCSR), KCS' principal U.S.
subsidiary. KCS influences the management of KCSM's daily
operations, but KCSM and KCSR have retained separate legal
identities and continue to finance their operations separately.
KB HOME: S&P Cuts Corp. Credit Rating to 'B' on Weak First Quarter
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on U.S. homebuilder KB Home to 'B' from 'B+'. "We also
lowered our rating on the company's senior notes to 'B' from 'B+',
affecting $1.6 billion in rated debt. The '4' recovery rating on
the notes is unchanged and indicates our expectation for an
average (30%-50%) recovery in the event of default. The outlook is
negative," S&P said.
"We lowered our corporate credit rating on KB Home due to weaker-
than-expected first-quarter performance related, in part, to
mortgage challenges," said credit analyst George Skoufis. "We
attribute the challenges to particularly weak mortgage service and
performance by KB Home's current mortgage provider, as well as
other third-party lenders, as the company transitions to a new
preferred mortgage provider. This contributed to higher
cancellations and lower order activity during the company's
recently reported first quarter ended Feb. 29, 2012."
"Our negative outlook acknowledges the potential that the
company's recent buyer mortgage financing challenges related to
its preferred mortgage provider transition could weigh on new
order activity over the next couple of quarters and slow
operational improvement, especially key EBITDA-derived credit
metrics. We would lower the rating if KB Home does not maintain an
adequate liquidity profile or if its operating results weaken
further. We could return the outlook to stable if KB Home
efficiently transitions to its new preferred mortgage lender,
maintains adequate liquidity, and its operations stabilize," S&P
said.
LIBERATOR INC: Settles with Donald Cohen for $72,465
----------------------------------------------------
Liberator, Inc., on March 23, 2012, finalized the settlement with
Donald Cohen, a former officer, director and independent sales
representative of the Company.
Under the settlement, the Company repaid a shareholder loan owed
to Don Cohen in the amount of $29,948 plus accrued interest of
$2,990, and paid a settlement amount of $40,000 for a total cash
payment of $72,465. In return, Don Cohen agreed to file with the
court a dismissal with prejudice of the litigation (previously
reported as Cohen v. WES Consulting, Inc., OneUp Innovations,
Inc., OneUp Acquisitions, Inc., Liberator, Inc., f/k/a Remark
Enterprises, Inc., Remark Enterprises, Inc., Belmont Partners LLC,
Louis Friedman, Ronald Scott and Leslie Vogelman, Civil Action
File No. 100V10590-8. in the Superior Court of Dekalb County,
Georgia.)
About Liberator Inc.
Headquartered in Atlanta, Georgia, Liberator, Inc. is a provider
of goods and information to consumers who believe that sensual
pleasure and fulfillment are essential to a well-lived and healthy
life. The information that the Company provides consists
primarily of product demonstration videos that the Company shows
on its Web sites and instructional DVD's that the Company sells.
The Company had a net loss of $801,252 for the year ended June 30,
2011, following a net loss of $1.03 million during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $4.21 million
in total assets, $5.13 million in total liabilities and a $920,159
total stockholders' deficit.
Gruber & Company, LLC, in Lake Saint Louis, Missouri, noted that
conditions exist which raise substantial doubt about the Company's
ability to continue as a going concern unless it is able to
generate sufficient cash flows to meet its financing requirements
and attain profitable operations.
LOS ANGELES DODGERS: McCourt Won't Reap Parking Profits
-------------------------------------------------------
Ramona Shelburne, writing for ESPNLosAngeles.com, reports that the
joint venture between the ownership group led by Magic Johnson and
soon-to-be former Los Angeles Dodgers owner Frank McCourt for land
around Dodger Stadium will not allow Mr. McCourt to reap any
profits from parking revenue, according to three sources with
knowledge of the situation.
According to ESPNLosAngeles.com, the new ownership group has
control over the parking lots and land around the stadium. Mr.
McCourt, the sources said, is only in line to see future profit
from the land if it is developed in the future. However, two
sources said there is no plan for development in the near future.
"Frank's not involved in the team, baseball, any of that," Mark
Walter, CEO of Guggenheim Partners, who will become the
controlling owner of the Dodgers once it is final and baseball's
owners officially approve it, told ESPNLosAngeles.com on
Wednesday. "What Frank does have is an economic interest in land,
but we control the parking and all the fan experience and that's
of the utmost importance to us."
ESPNLosAngeles.com notes the land around Dodgers Stadium was not
part of the initial sale offering because it was held by one of
Mr. McCourt's companies that did not seek bankruptcy protection.
As reported by the Troubled Company Reporter, the Dodgers unveiled
an agreement under which Guggenheim Baseball Management LLC will
acquire the club for $2 billion. The purchasing group includes
Mark R. Walter, CEO of financial services firm Guggenheim
Partners, as controlling partner; former National Basketball
Association star Earvin "Magic" Johnson; Mandalay Entertainment
CEO Peter Guber; Stan Kasten, the former president of the Atlanta
Braves and Washington Nationals; Guggenheim Partners president
Todd Boehly; and Bobby Patton, who operates oil and gas properties
among his investments.
About Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr.
D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
The petition estimates assets of up to $500 million and debts of
up to $1 billion. In its schedules, the LA Dodgers baseball club
disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA
Real Estate LLC disclosed $161,761,883 in assets and $0 in
liabilities.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent. Public relations specialist Kekst and
Company has been hired for crisis support. Covington & Burling
LLP serves as special counsel.
An official committee of unsecured creditors has been appointed in
the case. The panel has tapped Lazard Freres & Co. as financial
adviser and investment banker, and Morrison & Foerster LLP and
Pinckney, Harris & Weidinger, LLC as counsel.
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection.
The reorganization is being financed with a $150 million unsecured
loan from the Commissioner of Major League Baseball. The loan
gives the Commissioner few of the controls lenders often demanded
from bankrupt companies.
LOUISIANA HOUSING: S&P Raises Series 2006 Bonds Rating From 'B-'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term rating on
Louisiana Housing Finance Agency's (Meadowbrook Apartments
Project) multifamily housing revenue bonds series 2006 to 'AA+'
from 'B-'. The outlook is negative. Standard & Poor's has received
updated cash flows showing that, assuming 0% reinvestment
earnings, there will be sufficient assets available to pay full
and timely debt service until maturity.
The rating reflects S&P's view of:
* An irrevocable standby Fannie Mae credit enhancement facility
for the mortgage loan backing the bonds, which S&P considers to
be 'AA+' eligible;
* The sufficiency of revenues from mortgage debt service
payments, assuming 0% investment earnings, to pay full and
timely debt service on the bonds until maturity; and
* An asset-to-liability ratio of 100.73% as of Feb. 17, 2012.
The rating also continues to reflect the strong credit quality of
the assets and credit support underlying the issue. The revenue
fund is invested in JP Morgan Treasury Plus Money Market Fund
(AAAm).
MARCO POLO: Seaarland Reneged on Plan Outline, Lenders Allege
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Seaarland Shipping Management said it's on the cusp
of filing a reorganization plan satisfactory to secured lenders.
The next day, the lenders filed papers saying there is no
agreement because Seaarland reneged on a term sheet outlining a
negotiated plan.
According to the report, the company filed a motion requesting a
two-month extension until May 31 of the exclusive right to propose
a reorganization. The motion said there was agreement with two
lenders, and only one business point unresolved with the third.
The hearing on the motion for longer exclusivity is scheduled for
April 3.
The report relates Seaarland said a potential investor has shown
interest in providing new capital to finance a reorganization.
The company therefore said it's pursuing a dual track, with a plan
to be filed by March 31 implementing agreement with the lenders or
reorganizing around additional capital from the new investor.
The lenders, by contrast, accuse Seaarland of walking away from a
term sheet negotiated early this month in favor of striking out on
a different path with the new investor. The lenders are demanding
that the bankruptcy judge allow them to file their own plan. They
contend that the company is using the motion for longer
exclusivity as "leverage" against the lenders.
The lenders asking to file their own plan are Royal Bank of
Scotland Group Plc, Norddeutsche Landesbank Girozentrale and
Credit Agricole Corporate & Investment Bank.
About Marco Polo
Marco Polo Seatrade B.V. operates an international commercial
vessel management company that specializes in providing commercial
and technical vessel management services to third parties.
Founded in 2005, the Company mainly operates under the name of
Seaarland Shipping Management and maintains corporate headquarters
in Amsterdam, the Netherlands. The primary assets consist of six
tankers that are regularly employed in international trade, and
call upon ports worldwide.
Marco Polo and three affiliated entities filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29,
2011. The other affiliates are Seaarland Shipping Management
B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V.
Marco Polo is the sole owner of Seaarland, which in turn is the
sole owner of Cargoship, and also holds a 5% stake in Magellano.
The remaining 95% stake in Magellano is owned by Amsterdam-based
Poule B.V., while another Amsterdam company, Falm International
Holding B.V. is the sole owner of Marco Polo. Falm and Poule
didn't file bankruptcy petitions.
The filings were prompted after lender Credit Agricole Corporate
& Investment Bank seized one ship on July 21, 2011, and was on
the cusp of seizing two more on July 29. The arrest of the
vessel was authorized by the U.K. Admiralty Court. Credit
Agricole also attached a bank account with almost US$1.8 million
on July 29. The Chapter 11 filing precluded the seizure of the
two other vessels. The company started a lawsuit against the two
creditors in January 2012.
The cases are before Judge James M. Peck. Evan D. Flaschen, Esq.,
Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell
& Giuliani LLP, in New York, serve as the Debtors' bankruptcy
counsel. Kurtzman Carson Consultants LLC serves as notice and
claims agent.
The petition noted that the Debtors' assets and debts are both
more than US$100 million and less than US$500 million.
Tracy Hope Davis, the United States Trustee for Region 2,
appointed three members to serve on the Official Committee of
Unsecured Creditors. The Committee has retained Blank Rome LLP as
its attorney.
Creditor Credit Agricole Corporate and Investment Bank is
represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg
Sarma, Esq., at Watson, Farley & Williams (New York) LLP.
Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J.
Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New
York, represents secured creditor and post-petition lender The
Royal bank of Scotland plc.
MARCO POLO: In Deal Talks With Potential Strategic Investor
-----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Marco Polo Seatrade BV said
it has been negotiating with a potential investor that is
considering funneling new capital into the reorganized business
and supporting a Chapter 11 exit plan for the shipping company.
About Marco Polo
Marco Polo Seatrade B.V. operates an international commercial
vessel management company that specializes in providing commercial
and technical vessel management services to third parties.
Founded in 2005, the Company mainly operates under the name of
Seaarland Shipping Management and maintains corporate headquarters
in Amsterdam, the Netherlands. The primary assets consist of six
tankers that are regularly employed in international trade, and
call upon ports worldwide.
Marco Polo and three affiliated entities filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29,
2011. The other affiliates are Seaarland Shipping Management
B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V.
Marco Polo is the sole owner of Seaarland, which in turn is the
sole owner of Cargoship, and also holds a 5% stake in Magellano.
The remaining 95% stake in Magellano is owned by Amsterdam-based
Poule B.V., while another Amsterdam company, Falm International
Holding B.V. is the sole owner of Marco Polo. Falm and Poule
didn't file bankruptcy petitions.
The filings were prompted after lender Credit Agricole Corporate
& Investment Bank seized one ship on July 21, 2011, and was on
the cusp of seizing two more on July 29. The arrest of the
vessel was authorized by the U.K. Admiralty Court. Credit
Agricole also attached a bank account with almost US$1.8 million
on July 29. The Chapter 11 filing precluded the seizure of the
two other vessels. The company started a lawsuit against the two
creditors in January 2012.
The cases are before Judge James M. Peck. Evan D. Flaschen, Esq.,
Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell
& Giuliani LLP, in New York, serve as the Debtors' bankruptcy
counsel. Kurtzman Carson Consultants LLC serves as notice and
claims agent.
The petition noted that the Debtors' assets and debts are both
more than US$100 million and less than US$500 million.
Tracy Hope Davis, the United States Trustee for Region 2,
appointed three members to serve on the Official Committee of
Unsecured Creditors. The Committee has retained Blank Rome LLP as
its attorney.
Creditor Credit Agricole Corporate and Investment Bank is
represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg
Sarma, Esq., at Watson, Farley & Williams (New York) LLP.
Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J.
Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New
York, represents secured creditor and post-petition lender The
Royal bank of Scotland plc.
MAUI LAND: Adele Sumida Resigns as Controller and Secretary
-----------------------------------------------------------
Adele H. Sumida tendered her resignation as Controller and
Secretary of Maui Land & Pineapple Company, Inc., effective
April 6, 2012. In her capacity as Controller, Ms. Sumida served
as the Company's Principal Accounting Officer. Ms. Sumida's
resignation was not due to any disagreement with the Company
relating to its operations, policies or practices.
About Maui Land & Pineapple Co.
Maui Land & Pineapple Company, Inc. (NYSE: MLP) --
http://mauiland.com/-- develops, sells, and manages residential,
resort, commercial, and industrial real estate. The Company owns
approximately 23,000 acres of land on Maui and operates retail,
utility operations, and a nature preserve at the Kapalua Resort.
The Company's principal subsidiary is Kapalua Land Company, Ltd.,
the operator and developer of Kapalua Resort, a master-planned
community in West Maui.
The Company's balance sheet at Dec. 31, 2011, showed
$64.07 million in total assets, $90.32 million in total
liabilities, and a $26.25 million stockholders' deficiency.
Following the financial results for the year ended Dec. 31, 2011,
the Company's independent auditors expressed substantial doubt
about the Company's ability to continue as a going concern.
Deloitte & Touche LLP, in Honolulu, Hawaii, noted that the
Company's recurring negative cash flows from operations and
deficiency in stockholders' equity raise substantial doubt
about the Company's ability to continue as a going concern.
MCCLATCHY CO: Gary Pruitt Has 125,000 Stock Appreciation Rights
---------------------------------------------------------------
The McClatchy Company filed Amendment No. 1 to its Current Report
on Form 8-K to correct a numerical error that was reported in the
original Form 8-K filed on March 22, 2012, announcing Mr. Gary B.
Pruitt's intention to resign from his roles as Chairman, President
and Chief Executive Officer of the Company and retire from the
Company, effective after the Company's 2012 annual meeting of
shareholders.
The amendment was filed to report that Mr. Pruitt's retirement
will result in the immediate vesting of 125,000 stock appreciation
rights representing the final tranche of a grant made in December
2008 that was scheduled to vest on March 1, 2013, not 62,500 stock
appreciation rights as erroneously reported in the Original
Filing.
About The McClatchy Company
Sacramento, Calif.-based The McClatchy Company (NYSE: MNI)
-- http://www.mcclatchy.com/-- is the third largest newspaper
company in the United States, publishing 30 daily newspapers, 43
non-dailies, and direct marketing and direct mail operations.
McClatchy also operates leading local websites in each of its
markets which extend its audience reach. The websites offer users
comprehensive news and information, advertising, e-commerce and
other services. Together with its newspapers and direct marketing
products, these interactive operations make McClatchy the leading
local media company in each of its premium high growth markets.
McClatchy-owned newspapers include The Miami Herald, The
Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City
Star, The Charlotte Observer, and The News & Observer (Raleigh).
The Company's balance sheet at Dec. 25, 2011, showed $3.04 billion
in total assets, $2.86 billion in total liabilities and $175.18
million in stockholders' equity.
* * *
McClatchy carries a 'Caa1' corporate family rating from Moody's
Investors Service. In May 2011, Moody's changed the rating
outlook from stable to positive following the company's
announcement that it closed on the sale of land in Miami for
$236 million. The outlook change reflects Moody's expectation
that McClatchy will utilize the net proceeds to reduce debt,
including its underfunded pension position, which will reduce
leverage by approximately half a turn and lower required
contributions to the pension plan over the next few years.
MEDLINK INTERNATIONAL: Suspending Filing of Reports with SEC
------------------------------------------------------------
MedLink International, Inc., filed a Form 15 notifying of its
suspension of its duty under Section 15(d) to file reports
required by Section 13(a) of the Securities Exchange Act of 1934
with respect to its Class A Common Stock, par value $0.001 per
share, Class B Common Stock, par value $0.001 per share, and
Preferred Stock, par value $0.001 per share. Pursuant to Rule
12g-4, the Company is suspending reporting because there are
currently less than 500 holders of record of the shares. There
were only 324 holders of Class A shares, one holder of Class B
Shares and two holders of preferred stock as of March 26, 2012.
About Medlink
Ronkonkoma, New York-based MedLink International, Inc. (OTC BB:
MLKNA) -- http://www.medlinkus.com/-- is a leading healthcare
information technology company focused on clinical, information
and connectivity solutions that are focused on improving the
quality and efficiency of care.
On Nov. 29, 2011, the Company entered into a Forbearance Agreement
with Investors holding an aggregate of $1,250,000 of the
$1,250,000 previously issued to the Investors. Pursuant to the
terms of the Forbearance Agreement, the Company has acknowledged
that certain "Events of Default" as defined in the Debenture and
the security agreement entered into by and between the Company and
the Investors, have occurred. In connection with the Investors
agreement to forebear from enforcing their rights and remedies,
the Company has agreed to the amendments and modifications to the
transaction documents entered into by and between the Company and
the Investors on Nov. 26, 2010.
MERITAGE HOMES: S&P Rates New $250-Mil. Senior Notes 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issue rating
and '3' recovery rating to Meritage Homes Corp.'s proposed
offering of $250 million of senior notes due 2022. "Our '3'
recovery rating indicates our expectation for meaningful (50%-70%)
recovery prospects in the event of a payment default," S&P said.
"The company plans to use proceeds from the offering along with
cash on hand to tender for the existing $285 million in 6.25%
senior notes due 2015. The proposed transaction will extend the
company's debt tenor and its next maturity is not until 2017 when
the $126 million in senior subordinated notes come due.
Effectively, the company's weighted average term to maturity
shifts from about five to eight years," S&P said.
"The company is the issuer of the proposed 10-year notes and
similar to the existing senior notes due 2020, the notes will be
guaranteed by substantially all wholly owned subsidiaries on a
joint and several, basis," S&P said.
"Our ratings on Scottsdale, Ariz.-based Meritage Homes reflect the
homebuilder's aggressive financial profile as evidenced by EBITDA-
based credit metrics that remain weak for the current rating. The
current weak EBITDA metrics are offset by the company's adequate
liquidity position and manageable capital needs, including the
fact that after the proposed transaction, Meritage will have no
debt maturities until 2017. We consider the company's business
risk profile as weak, given Meritage's comparatively small and
geographically concentrated platform, which is more susceptible to
operating volatility relative to some larger, more diversified
peers," S&P said.
"Our stable outlook reflects our expectations for modest growth in
Meritage's unit volume at stable pricing to support current gross
margins and strengthen EBITDA. We also expect that the company
will maintain an adequate liquidity position in the $200 million
range. An upgrade is unlikely at this time, given still-weak
market conditions and credit metrics that remain weak for the
current rating. We would lower our ratings if EBITDA fails to
strengthen from current levels," S&P said.
RATINGS LIST
Meritage Homes Corp.
Corporate credit rating B+/Stable/--
RATINGS ASSIGNED
Meritage Homes Corp.
$250 million senior notes B+
Recovery rating 3
MOHAWK INDUSTRIES: Moody's Lifts Rating on Sr. Unsec Notes to Ba1
-----------------------------------------------------------------
Moody's Investors Service upgraded Mohawk Industries, Inc.'s
rating on its senior unsecured notes to Ba1 from Ba2 because the
security and guarantee provisions of the company's credit facility
were recently removed. All other ratings (including the Ba1
Corporate Family Rating) were affirmed. The outlook remains
positive.
"The security and guarantee provisions of the credit facility were
eliminated when Mohawk was upgraded to investment grade by another
rating agency earlier this month," said Kevin Cassidy, Senior
Credit Officer at Moody's Investors Service. As a result, the
notes are no longer effectively subordinated to the credit
facility, improving their relative strength within the capital
structure.
The following ratings were upgraded/LGD assessments revised:
$400 million ($336 million outstanding) 7.20% senior unsecured
notes, due April 15, 2012 to Ba1 (LGD 4, 62%) from Ba2 (LGD 5,
83%);
$900 million 6.125% senior unsecured notes, due 2016 to Ba1 (LGD
4, 62%) from Ba2 (LGD 5, 83%);
The following ratings were affirmed:
Corporate Family Rating at Ba1;
Probability of Default Rating at Ba1;
Speculative Grade Liquidity rating at SGL-1
Ratings Rationale
The Ba1 Corporate Family Rating reflects Mohawk's leading market
share in floor covering (carpet, floor tiling and laminate),
strong cash flow and its generally conservative financial
policies. The Corporate Family Rating also reflects the size of
the company with more than $5.6 billion of revenue and significant
geographic diversification throughout the U.S. and in Europe,
Mexico and China. Mohawk management has been focused in recent
years on reducing expenses in order to make its cost structure
more efficient, which helps it offset high raw material prices.
Moody's expects revenue to modestly increase in 2012 due to
promising signs in the macro economy and demand expansion in both
the commercial and residential market. The rating is constrained
by uncertain US housing market trends and by the reluctance of
consumers to pay higher prices, especially when gas prices are
increasing rapidly. Nonetheless, Moody's believes Mohawk's credit
metrics will improve in 2012 as demand increases, operations
remain efficient, and debt is reduced.
The positive outlook reflects Moody's belief that that residential
and commercial floor covering demand will continue improving over
the near to medium term, helping Mohawks'' financial performance.
Further debt repayment and credit metric improvement are
considered in the outlook.
The rating could be upgraded if residential and commercial demand
keeps improving and the macro economy continues to stabilize.
Certain credit metrics also need to improve. For example,
debt/EBITDA needs to approach 2.5 times (currently 2.9 times) and
EBITA margins need to approach double digits (currently 8.1%). For
the debt/ EBITDA upgrade threshold to be met, EBITDA needs to
increase by about $135 million or debt needs to decrease by around
$335 million.
The rating could be downgraded if discretionary consumer spending
resumes a rapid and significant decline, which Moody's does not
expect, or operating performance otherwise weakens. Key credit
metrics which could drive a downgrade would be debt/EBITDA
sustained above 4 times, retained cash flow to net debt falling to
the low to mid teens (currently about 30%) for a sustained period,
or EBITA margins in the low single digits. A rapid deterioration
in liquidity or adoption of a more aggressive financial policy
could also trigger a downgrade. In order for the debt/EBITDA to
rise above 4 times, EBITDA would need to decrease by about $200
million or debt increase by approximately $800 million.
The principal methodologies used in this rating were Global
Consumer Durables 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.
Headquartered in Calhoun, Georgia, Mohawk Industries is a leading
producer of floor covering products for residential and commercial
applications in the U.S. Mohawk products includes brands such as
Mohawk, Unilin, Karastan, Ralph Lauren, Lees, Bigelow, Dal-Tile
and American Olean. Revenue for the year ended December 31, 2011,
approximated $5.6 billion.
MONEYGRAM INT'L: Moody's Issues Summary Credit Opinion
------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
MoneyGram International, Inc. and includes certain regulatory
disclosures regarding its ratings. The release does not constitute
any change in Moody's ratings or rating rationale for MoneyGram
International, Inc.
Moody's current ratings on MoneyGram International, Inc. are:
MoneyGram International, Inc.
LT Corporate Family Ratings (domestic currency) Rating of B1
Probability of Default Rating of B1
LT Issuer Rating (domestic currency) Rating of B1
MoneyGram Payment Systems Worldwide Inc.
Senior Secured Bank Credit Facility (domestic currency) Rating
of Ba2
LGD Senior Secured Bank Credit Facility (domestic currency)
Assessment of 27 - LGD2
Ratings Rationale
MoneyGram's B1 rating reflects the company's strong market
position in its core money transfer business and Moody's view of
the favorable long-term characteristics of the worldwide money
transfer industry. MoneyGram's money transfer business has shown
resiliency during economic cycles. Despite the fallout and
distractions caused by the portfolio investment losses several
years ago, the company has managed to produce consistent cash
flows and operating profitability. While Moody's expects the
Financial Payments Products (FPP) segment profitability to remain
modest relative to the money transfer business, FPP will generate
stable profitability due to a conservative investment portfolio
and revised fee structure. Moody's anticipates MoneyGram should be
able to generate at least mid single digit annual revenue and
profit growth over the next year given its strong market position,
expanding global presence, and growing migrant population.
Rating Outlook
The positive rating outlook reflects the potential for MoneyGram
to lower debt to EBITDA to below 4 times by the end of 2012, and
then sustain leverage around 3.5x. The potential improvement is
supported by expectations for: (i) solid performance of the core
money transfer business, where revenue growth has exceeded the
World Bank's estimate of global remittances in recent years, (ii)
growth in global cross-border remittances in the mid-to-high
single digits annually over the next two years, and, (iii)
management's commitment to conservative financial policies, which
includes steady debt reduction from free cash flow.
The positive outlook also considers Moody's expectation for
MoneyGram to maintain its #2 market share within the worldwide
money transfer industry, which is expected to grow over the long-
term. Despite the slowly recovering global economy, Moody's
believes the company will benefit from its strong global brand,
breadth of agent locations worldwide, and continued expansion of
new products and opportunities abroad.
What Could Change the Rating - Up
The B1 corporate family rating could be upgraded if it becomes
apparent that MoneyGram will achieve and maintain debt to EBITDA
at or below 3.5 times for an extended period of time, with solid
and growing free cash flow from the core money transfer business
producing retained cash flow to net debt of at least 20%.
What Could Change the Rating - Down
A ratings downgrade is considered unlikely over the near term.
However, long term, MoneyGram's B1 rating could experience
downward rating pressure if its Global Fund Transfer business
revenue and profitability were to experience sustained annual
declines or leverage as measured by adjusted debt to EBITDA were
to exceed 5x on a sustained basis, or if the relationship with
Wal-Mart weakens materially.
The principal methodology used in rating MoneyGram 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.
MORGANS HOTEL: R. Burkle, et al., Equity Stake Down to 28.9%
------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, Ronald W. Burkle and his affiliates disclosed
that, as of March 20, 2012, they beneficially own 12,511,545
shares of common stock of Morgans Hotel Group Co. representing
28.9% of the shares outstanding.
In August 2011, Mr. Burkle reported beneficial ownership of
13,850,145 common shares or 32.2% equity stake.
On March 20, 2012, Mr. Burkle, et al., sold 1.3 million shares.
A copy of the amended filing is available for free at:
http://is.gd/q3QLeQ
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $87.95 million in 2011, a net
loss of $83.64 million in 2010, and a net loss of $101.60 million
in 2009.
The Company's balance sheet at Dec. 31, 2011, showed
$557.65 million in total assets, $642.12 million in total
liabilities, $5.17 million in redeemable noncontrolling interest,
and a $89.64 million total deficit.
NCO GROUP: Minimum Consents to Tender Offers Satisfied
------------------------------------------------------
NCO Group, Inc., announced the successful early tender results of
its two cash tender offers and consent solicitations for any and
all of its $200,000,000 aggregate principal amount of 11.875%
Senior Subordinated Notes due 2014 and $165,000,000 aggregate
principal amount of Floating Rate Senior Notes due 2013.
As of March 27, 2012, there were $199,577,000 Subordinated Notes
were tendered and consented and $150,000,000 of the Floating Rate
Senior Notes were tendered and consented.
Based on the Notes tendered and consents delivered as of the
Consent Deadline, the proposed amendments to the indentures
governing the Notes have been approved, as the consent of the
holders of at least a majority in aggregate principal amount of
such series of Notes have been received. The primary purpose of
the Consent Solicitations and the proposed amendments to the
indentures governing the Notes is to eliminate substantially all
of the restrictive covenants and certain events of default and
related provisions contained in the indentures governing the
Notes. Adoption of the proposed amendments could have adverse
consequences upon non-tendering holders of the Notes because Notes
that remain outstanding after consummation of the applicable Offer
will not be entitled to the benefits of the restrictive covenants
or event of default and related provisions that are eliminated by
the adoption of those amendments.
Each Offer will expire at 12:01 a.m., New York City time, on
April 11, 2012, unless extended. Holders who do not wish to
retain the Notes that will not have the benefit of the restrictive
covenants and certain events of default and related provisions
contained in the indentures governing the Notes may tender their
Notes prior to the Expiration Date.
As the Minimum Consents Condition has been satisfied, Notes
tendered and consents delivered may not be withdrawn. Holders who
validly tender their Notes after the Consent Deadline, but on or
prior to the Expiration Date, will receive $1,025.94 per $1,000
principal amount of the 2014 Notes and $992.50 per $1,000
principal amount of the 2013 Notes, plus, in each case, any
accrued and unpaid interest on the Notes up to, but not including,
the payment date for those Notes. Holders of Notes tendered after
the Consent Deadline will not receive a consent payment.
As the Minimum Consents Condition has been satisfied, the Company
announced that it intends to execute the eighth supplemental
indentures, which will amend the indentures governing the Notes.
The proposed amendments to the indentures governing the Notes will
become effective only if the Company accepts for purchase and pays
for all the Notes tendered.
The Company has engaged Barclays Capital Inc. as Dealer Manager
and Solicitation Agent for the Offer. Persons with questions
regarding the Offer should contact Barclays Capital Inc. at (212)
528-7581 (Call Collect) or (800) 438-3242 (Toll Free). The
complete terms and conditions of the Offers are described in the
Offer to Purchase. The Company reserves the right to amend the
terms of the Offers or extend the Expiration Date, in its sole
discretion, at any time. Requests for copies of the Offer to
Purchase or other tender offer materials may be directed to D.F.
King & Company, Inc., the Tender Agent and Information Agent, at
(800) 714-3313.
About NCO Group Inc.
Based in Horsham, Pennsylvania, NCO is a global provider of
business process outsourcing services, primarily focused on
accounts receivable management and customer relationship
management. NCO has over 25,000 full and part-time employees who
provide services through a global network of over 100 offices.
The company is a portfolio company of One Equity Partners and
reported revenues of about $1.2 billion for the twelve month
period ended Sept. 30, 2007.
The Company also reported a net loss of $104.49 million on
$1.15 billion of total revenues for the nine months ended
Sept. 30, 2011, compared with a net loss of $73.45 million on
$1.18 billion of total revenues for the same period during the
prior year. The Company reported a net loss of $155.71 million in
2010, compared with a net loss of $88.14 million in 2009.
The Company's balance sheet at Sept. 30, 2011, showed
$1.12 billion in total assets, $1.14 billion in total liabilities,
and a $17.89 million total stockholders' deficit.
* * *
In December 2011, Standard & Poor's Ratings Services affirmed its
'CCC+' issuer credit rating on NCO Group Inc. and removed the
rating from CreditWatch with positive implications.
"The rating action follows NCO's recent announcement that it is
not proceeding with the previously proposed $300 million notes
offering that it planned to use, in conjunction with a proposed
$870 million new senior secured credit facility, to repay its
existing debt and to help finance its merger with APAC Customer
Services Inc.," said Standard & Poor's credit analyst Kevin Cole.
Concurrent with the closing of the debt offerings, it was planning
to change its name to Expert Global Solutions Inc.
NEBRASKA BOOK: J.P. Morgan, Other Creditors Protest Exit Plan
-------------------------------------------------------------
Dow Jones' Daily Bankruptcy Review reports that Nebraska Book
Co.'s new Chapter 11 proposal has drawn howls of outrage from
major creditors, including J.P. Morgan Chase & Co., which controls
nearly one-quarter of the company's outstanding debt.
About Nebraska Book
Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States. Nebraska Book and seven affiliates filed
separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002
to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over
the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The
Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC. As of the Petition Date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.
JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.
An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick. An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.
The Official Committee of Unsecured Creditors selected Lowenstein
Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow
Financial Inc. as financial advisers.
Nebraska Book has been unable to confirm a pre-packaged Chapter 11
plan that would have swapped some of the existing debt for new
debt, cash and the new stock, due to an inability to secure
$250 million in exit financing.
NEOMEDIA TECHNOLOGIES: To Sell $450,000 Debenture to YA Global
--------------------------------------------------------------
NeoMedia Technologies, Inc., on March 26, 2012, entered into an
Agreement to issue and sell a secured convertible debenture to YA
Global Investments, L.P., in the principal amount of $450,000. In
addition to the Debenture, the Company also issued a warrant to
the Buyer to purchase 1,000,000 shares of the Company's common
stock, par value $0.001 per share, for an exercise price of $0.15
per share.
The Debenture will mature on July 29, 2012, and will accrue
interest at a rate equal to 14% per annum and that interest will
be paid on the Maturity Date in cash or, provided that certain
Equity Conditions are satisfied, in shares of Common Stock at the
applicable Conversion Price. At any time, the Buyer will be
entitled to convert any portion of the outstanding and unpaid
principal and accrued interest thereon into fully paid and non-
assessable shares of Common Stock at a price equal to the lesser
of $0.10 and 95% of the lowest volume weighted average price of
the Common Stock during the 60 trading days immediately preceding
each conversion date.
In connection with the Agreement, the Company also entered into
those certain Irrevocable Transfer Agent Instructions with the
Buyer, an escrow agent and WorldWide Stock Transfer, LLC, the
Company's transfer agent.
The Company will not affect any conversion, and the Buyer will not
have the right to convert any portion of the Debenture to the
extent that after giving effect to that conversion, the Buyer
would beneficially own in excess of 9.99% of the number of shares
of Common Stock outstanding immediately after giving effect to
such conversion, except for not less than 65 days prior written
notice from the Buyer.
The Company will have the right to redeem a portion or all amounts
outstanding in the Debenture via Optional Redemption by paying the
amount equal to the principal amount being redeemed plus a
redemption premium equal to 10% of the principal amount being
redeemed, and accrued interest.
About NeoMedia Technologies
Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile
barcode scanning solutions. The Company's technology allows
mobile devices with cameras to read 1D and 2D barcodes and provide
"one click" access to mobile content.
The Company has historically incurred net losses from operations
and expects it will continue to have negative cash flows as it
implements its business plan. The Company said there can be no
assurance that its continuing efforts to execute its business plan
will be successful and that it will be able to continue as a going
concern.
The Company's balance sheet at Sept. 30, 2011, showed $8.02
million in total assets, $65.98 million in total liabilities, all
current, $5.43 million in Series C convertible preferred stock,
$2.36 million in Series D convertible preferred stock, and a
$65.75 million total shareholders' deficit.
Kingery & Crouse, P.A, in Tampa, Fla., expressed substantial doubt
about the Company's ability to continue as a going concern. The
accounting firm noted that the Company has suffered recurring
losses from operations and has ongoing requirements for additional
capital investment.
NET TALK.COM: Files Form 10-KT; Incurs $3.4-Mil. in Dec. 31 Qtr.
----------------------------------------------------------------
Net Talk.com, Inc., filed with the U.S. Securities and Exchange
Commission a Form 10-KT disclosing a net loss of $3.44 million on
$1.29 million of revenue for the three months ended Dec. 31, 2011,
compared with a net loss of $1.22 million on $470,374 of revenue
for the same period a year ago.
The Company's balance sheet at Dec. 31, 2011, showed $7.64 million
in total assets, $9.80 million in total liabilities, $10.38
million in redeemable preferred stock, and a $12.54 million total
stockholders' deficit.
A copy of the transition report is available for free at:
http://is.gd/R7VJ6Z
About Net Talk.com
Based in Miami, Fla., Net Talk.com, Inc., is a telephone company,
who provides, sells and supplies commercial and residential
telecommunication services, including services utilizing voice
over internet protocol technology, session initiation protocol
technology, wireless fidelity technology, wireless maximum
technology, marine satellite services technology and other similar
type technologies.
The Company reported a net loss of $26.17 million $2.72 million of
revenue for the year ended Sept. 30, 2011, compared with a net
loss of $6.30 million on $737,498 of revenue during the prior
year.
NEW CENTAUR: Moody's Rates $180MM 1st Lien Credit Facilities B1
---------------------------------------------------------------
Moody's Investors Service assigned a B1 to New Centaur, LLC's
proposed $180 million first lien senior secured credit facilities
that will consist of a $10 million 5-year senior secured revolving
credit facility and a $170 million 5-year senior secured term
loan. At the same time, Moody's withdrew the B2 rating on
Centaur's cancelled $240 million senior secured credit facility
transaction that was assigned on February 24, 2012. Centaur has a
B3 Corporate Family Rating, B3 Probability of Default Rating, and
a stable rating outlook.
Proceeds from the proposed senior secured facility will be used to
refinance the Centaur's existing $160 million first lien term loan
due 2016 (not-rated) and $10 million first lien revolver due 2017.
The B1 rating assigned to Centaur's proposed $180 million senior
secured credit facility -- two notches above the company's B3
Corporate Family Rating -- reflects the benefits of the proposed
credit facility's first priority perfected lien on substantially
all assets along with the credit support provided by the company's
lower-priority $62.7 million second lien term loan (not-rated) and
$51.7 million HoldCo PIK Notes (not-rated).
New ratings assigned:
$10 million 5-year first lien senior secured revolving credit
facility -- B1 (LGD 2, 29%)
$170 million 5-year first lien senior secured term loan -- B1 (LGD
2, 29%)
Ratings withdrawn:
$10 million 5-year first lien senior secured revolving credit
facility -- B2 (LGD 3, 41%)
$230 million 6-year first lien senior secured term loan -- B2 (LGD
3, 41%)
Ratings Rationale
Centaur's B3 Corporate Family Rating reflects the company's small
size, single asset profile, and Moody's expectation that
debt/EBITDA (including the 15-year Holdco PIK Notes) will likely
remain high, at above 6.0 times in the next 12-18 months despite
the fact the company's pre-petition debt obligations were reduced
by more than half through the Chapter 11 reorganization process.
Additionally, Hoosier Park Racing & Casino near Indianapolis, IN -
- Centaur's only gaming asset and sole source of debt repayment --
will face additional competition as large casinos in Ohio open and
other neighboring states contemplate either legalizing or
expanding gaming in the near to medium term.
Positive rating consideration is given to Hoosier Park's
established market position, favorable demographics and population
density within 75 miles of the casino site and continued growth in
slot win per unit per day. Additionally, Moody's expects that the
Indianapolis market will continue to grow at a low single digit
pace, which will help offset some of the competitive pressure in
the outer markets.
The stable rating outlook reflects Moody's view that near term
revenue growth will be constrained by new competition, the still
weak overall economy and a lack of new growth catalysts, such as
the opening of table games at Hoosier Park. The outlook also
anticipates a good liquidity profile, supported by a meaningful
cash balance, modest free cash flow generation and maintenance of
borrowing capacity under the new $10 million revolver.
A higher rating would require the company to improve and sustain
debt/EBITDA to below 5.0 times and EBIT/interest above 2.0 times.
Downward rating pressure could arise if debt/EBITDA increases
above 7.0 times or if EBIT/interest drops below 1.0 times and
liquidity deteriorates.
The principal methodology used in rating Centaur Holdings, LLC 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.
New Centaur, LLC, through its subsidiary, Hoosier Park, LLC, is
the owner and operator of Hoosier Park Racing & Casino, a casino
and race track located approximately 35 miles northeast of
Indianapolis, Indiana. Hoosier Park currently features 1,880 slot
machines and 19 electronic table games. For the LTM period ended
December 31, 2011, Hoosier Park generated net revenue of $230.2
million.
NEW GOLD: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
corporate credit rating and stable outlook to Toronto-based gold
miner New Gold Inc.
"At the same time, Standard & Poor's assigned its 'BB-' issue-
level rating and '3' recovery rating to New Gold's US$300 million
senior unsecured notes. A '3' recovery rating indicates our
expectation of meaningful (50%-70%) recovery in a default
scenario," S&P said.
"We understand that proceeds from the unsecured notes issuance
will be used to fund the repayment of the company's senior secured
notes outstanding and for general corporate purposes," S&P said.
"The ratings on New Gold reflect our view of the company's limited
operating diversity, exposure to volatile metals prices, and short
reserve lives at the company's gold mines," said Standard & Poor's
credit analyst Donald Marleau. "These risks are counterbalanced by
what we consider the company's low debt leverage, its attractive
second-quartile cost position, low political risk, and expected
double-digit growth rates in gold production," Mr. Marleau added.
New Gold operates three gold mines in the U.S., Mexico, and
Australia, and holds interests in various advanced development
projects that include New Afton in British Columbia and El Morro
in Chile.
"Standard & Poor's considers New Gold's business risk profile as
weak due to the company's limited operating diversity and a
reliance on volatile and generally correlated gold, silver, and
copper prices. This is counterbalanced by its attractive second-
quartile cost position and assets that are located in low-risk
mining jurisdictions. New Gold's operating diversity is limited by
its exposure to only three producing mines. That said, earnings
contributions are fairly even among the three assets, posing
unusually low cash flow concentration for an issuer with such
limited mine diversity. We expect that the ramp-up of New Afton in
the second half of 2012 will improve operating diversity modestly,
adding a high-quality asset to its portfolio, but eventually
concentrating its cash flows as New Afton's attractive earnings
contribution significantly outweighs the other three assets," S&P
said.
"The stable outlook reflects our view that New Gold's expanding
production profile at declining cash costs should support steady
credit measures in the next few years while debt increases to
build El Morro. We estimate that a 2012 gold price of $1,400 per
oz should allow New Gold to generate fully adjusted debt to EBITDA
of less than 1.5x and funds from operations (FFO) to debt above
60%, with positive free cash flow in the second half of 2012 as
New Afton capital spending moderates," S&P said.
"We could lower the rating if unexpected operational disruptions,
higher costs, or weaker metals prices compress the company's gold
margins while debt grows, contributing to debt to EBITDA of more
than 4x and FFO to debt below 35%. We could consider a positive
rating action if New Gold continues to enhance its operating
profile by adding producing assets that optimize cash flow
diversity and reserve life, while maintaining its significant
financial risk profile," S&P said.
NESCO LLC: Moody's Assigns 'B3' CFR, Rates Sr. Sec. Notes 'Caa1'
----------------------------------------------------------------
Moody's Investors Service has assigned first time ratings of B3
Corporate Family (CFR) and Probability of Default (PDR) to NESCO,
LLC. Concurrently, Moody's has assigned a Caa1 to the company's
new $275 million senior secured notes, the proceeds of which will
be used in part to repay a portion of the current revolver
balance, refinance their interim financing, and pay a dividend.
The rating outlook is stable.
Ratings Rationale
The B3 ratings reflect NESCO's established position as a provider
of specialty rental equipment for the electrical power
transmission and distribution industry serving contractors and
utilities balanced against the company's small scale and limited
end market diversity. NESCO is one of the smallest rated equipment
rental companies with revenues surpassing $100 million for the
first time in 2011. The company's rating reflects its high
leverage, in part due to a dividend, which will be over 6 times
pro forma (on a Moody's adjusted basis) following the March 2012
recapitalization. Moody's expects leverage to decrease below 6
times over the course of 2012 but to remain elevated, as the
company's cash flows, after considering equipment sales, are
expected to support only modest deleveraging. The B3 rating also
reflects NESCO's high debt to sales, high goodwill and
intangibles, and low profitability. These risk factors are weighed
against the expectation for consistent demand for NESCO's
products, the company's very strong EBITDA margins compared to
other rental companies, and its relatively young fleet. Moody's
also considers NESCO's adequate liquidity in the B3 rating. While
the company maintains very modest cash balances, it has no near-
term debt maturities, and Moody's expects NESCO will maintain
compliance with its debt covenants over the near-term.
In October 2011, NESCO was acquired by an affiliate of Platinum
Equity, a private equity firm. NESCO is now issuing the new senior
secured notes to recapitalize the acquisition financing put in
place at the acquisition's close. Moody's expects that NESCO will
utilize the proceeds from the notes to repay the company's
existing interim financing, repay a portion of the current
revolver balance, and provide a one-time dividend to Platinum and
other minority shareholders. The company's high post-dividend
leverage may reduce the company's flexibility to manage through
another downturn. Moody's expects that the company will continue
to maintain a balance outstanding under the revolving credit
facility for the foreseeable future.
The Caa1 rating on the company's second lien senior secured notes
reflects their second priority status after NESCO's $175 million
first-lien senior secured asset-based revolving credit facility
(not rated). These notes are co-issued by NESCO Holdings Corp.,
(Holdings), which is a holding company entity. NESCO is a wholly
owned subsidiary of Holdings, which pushed down all of its debt,
related interest expense, and debt issue costs to NESCO. Following
the recapitalization, NESCO's debt capitalization will consist of
only the revolver and the senior secured notes.
Assignments:
Issuer
NESCO, LLC
CFR at B3
PDR at B3
$275 million senior secured second lien notes rated Caa1,
LGD5-70.
The rating outlook is stable.
The stable outlook reflects the view that the company will likely
continue to benefit from industry growth trends and maintain
strong operating margins, however, given the current credit
metrics profile, the company will not likely significantly
deleverage its balance sheet over the near-term. Moody's
anticipates that the rate of improvement in the company's credit
metrics will be relatively slow.
The rating is unlikely to improve over the intermediate term given
the company's small scale, high leverage, and low free cash flow
generation. The ratings or outlook may benefit if debt to EBITDA
fell below 5 times (on a Moody's adjusted basis) or free cash flow
to debt improved to over 5%, and Moody's expected a consistent
pattern of strong fleet rental rates and utilization. EBITA
coverage of interest over 2 times would also be supportive of a
change in outlook or positive ratings traction while EBITA
coverage of interest under 1.5 times could cause ratings pressure
as would a significant decline in fleet utilization rates or
EBITDA margins.
The principal methodology used in rating NESCO and subsidiaries
was the Global Equipment and Automobile Rental 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 July 2010.
NESCO, LLC, based in Bluffton, Indiana, is a wholly owned
subsidiary of NESCO Holdings Corp. NESCO rents and sells a broad
range of new and used equipment for the electric transmission and
distribution industry. The company services customers across 32
locations throughout the United States and Canada.
NORTHCORE TECHNOLOGIES: Paul Godin Named New Board Chairman
-----------------------------------------------------------
Northcore Technologies Inc. has appointed Paul Godin to the role
of Chairman of the Board of Directors.
Anthony DeCristofaro has elected to step down as Chairman to
pursue his new venture in the social media space and Paul Godin
has agreed to join Northcore in the role of chair. Mr. Godin was
the founder and Chief Executive Officer of Northcore and charted
its initial explosive growth as Canada's first publicly listed
Internet company. In addition, Mr. Godin was the inventor
responsible for the Dutch auction process patent, which continues
to be a cornerstone of the Northcore suite of IP holdings.
Subsequent to his tenure with the firm, Mr. Godin has held senior
leadership roles in a number of successful private and publicly
held corporations. With the company positioned for unprecedented
growth through multiple organic and non-organic initiatives, Mr.
Godin was overwhelmingly confirmed as the choice to help helm the
firm though this crucial period.
"I would first like to thank Anthony for his contributions to the
progress that the company has made during his tenure as chairman.
His friends at Northcore wish him well as he shifts his focus to
that of full time CEO at Qnext Corporation focused in the private
cloud computing arena," said Amit Monga, CEO of Northcore
Technologies. "On the heels of this progress, we are extremely
excited to welcome Paul Godin as our incoming chair. Paul's
historic contributions are woven into the fabric of Northcore and
his passion and unbridled enthusiasm will have a huge impact in
our future successes."
"It is rare for a technology company to survive the trials of time
and remain relevant. It is even more rare for that firm to find
itself resurgent and poised for a major breakthrough almost twenty
years later. This company was always ahead of its time, but now
the convergence of circumstance, technologies and consumer
appetites means that we have the right products at the right
time," said Paul Godin, incoming Chair of Northcore Technologies.
"Social Commerce, Cloud Computing and Mobile Engagement have long
been core to this company before they were stamped into the
industry lexicon. I am proud to have returned to Northcore at
this point in her history and look forward to telling the story
and driving growth during this exciting time."
About Northcore
Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment. Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.
Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE. Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.
The Company reported a loss and comprehensive loss of C$3.93
million for the year ended Dec. 31, 2011, compared with a loss and
comprehensive loss of C$3.03 million during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed C$2.91
million in total assets, C$415,000 in total liabilities and C$2.49
million in total shareholders' equity.
OFFICEMAX INCORPORATED: Moody's Issues Summary Credit Opinion
-------------------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
OfficeMax, Incorporated and includes certain regulatory
disclosures regarding its ratings. The release does not constitute
any change in Moody's ratings or rating rationale for OfficeMax,
Incorporated.
Moody's current ratings on OfficeMax, Incorporated are:
Long Term Corporate Family Ratings (domestic currency) ratings
of B1
Probability of Default ratings of B1
Senior Unsecured (domestic currency) ratings of B2
Senior Unsecured MTN (domestic currency) ratings of (P)B2
Speculative Grade Liquidity Rating ratings of SGL-1
LGD Senior Unsecured (domestic currency) ratings of 75 - LGD5
LGD Senior Unsecured MTN (domestic currency) ratings of 75 -
LGD5
BACKED Senior Unsecured (domestic currency) ratings of B2
BACKED Long Term IRB/PC (domestic currency) ratings of B2
Ratings Rationale
The B1 rating considers OMX's credit metrics, which are weak,
though Moody's expects them to continue to improve over the next
12-18 months. The company's very good liquidity provides critical
support for the rating. The rating also focuses on OMX's
competitive position, which is solid and improving despite its
number three sales position in the segment. Its revenue balance of
51% contract and 49% retail is one of the best in the segment, and
this mix should prove beneficial once the economy begins to
recover. The rating also considers the fragmented nature of the
office supply segment, as well as the lack of resilience this
segment has demonstrated during the macroeconomic downturn.
The stable outlook reflects Moody's belief that OMX's debt
protection will begin showing sequential improvement over the next
12-18 months, and also recognizes the positive impact on the
rating of the company's very good liquidity.
Ratings could be upgraded if operating performance improves
sufficiently to result in debt/EBITDA being sustained well below 5
times and EBITA/interest being sustained well above 1.5 times.
This also assumes that financial policy remains conservative with
respect to acquisitions and shareholder returns.
Ratings could be downgraded if credit metrics do not continue to
improve, or if the company's financial policy were to become more
aggressive either via debt-financed acquisitions or increased
returns to shareholders. Quantitatively, if debt/EBITDA trends
toward 5.5 times, or if EBITA/interest does not remain solidly
above 1.25 times, a downgrade could occur.
The principal methodology used in rating OfficeMax, Incorporated
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.
OPTIONS MEDIA: Terminates Merger Agreement with Illume Software
---------------------------------------------------------------
Options Media Group Holdings, Inc., on Jan. 25, 2012, entered into
an Agreement and Plan of Merger with Illume Software, Inc., and I
Acq. Corp., for the acquisition of Illume by the Company. As of
March 16, 2012, the Company and Illume decided to terminate the
Merger Agreement and instead proceeded with a licensing
arrangement for Illume's iZup enterprise software pursuant to
which the Company has received licenses for six enterprise
customers.
In connection with the termination of the Merger Agreement, on
March 16, 2012, Leo J. Hindery, Jr., an Illume shareholder who was
appointed to the Company's Board of Directors in anticipation of
the merger, resigned from the Company's Board of Directors. Mr.
Hindery advised the Company that his resignation was necessary due
to a conflict of interest created by the termination of the Merger
Agreement and his continuing position with Illume. Mr. Hindery's
resignation was not the result of any disagreement with the
Company or any matter relating to the Company's operations,
policies or practices.
On March 15, 2012, the Company sold to three investors 2,500
shares of its Series H Convertible Preferred Stock and 50,000,000
warrants to purchase its common stock for an aggregate purchase
price of $250,000. Each share of Series H is convertible into
20,000 shares of common stock immediately upon the filing with the
State of Nevada of Articles of Amendment of the Company's Articles
of Incorporation to increase the Company's total authorized shares
of Common Stock and the warrants have an exercise price of $0.01
per share.
The Series H and warrants were issued pursuant an exemption from
the registration requirements of the Securities Act of 1933, as
amended contained in Section 4(2) of the Securities Act for
transactions by an issuer not involving a public offering.
As a result of the foregoing financing, the conversion price of
the Company's Series A Preferred Stock will be reduced from $0.01
to $0.005 per share. In addition, the holders of 158,160,749
warrants to purchase Company common stock will have their exercise
price reduced from $0.01 per share to $0.005 per share, the
holders of 25,000,000 warrants to purchase Company common stock
will have their exercise price reduced from $0.02 per share to
$0.005 per share, and the holders of 62,000,000 warrants will have
their exercise price reduced from $0.03 per share to $0.005 per
share.
About Options Media
Boca Raton, Fla.-based Options Media Group Holdings, Inc., had
historically been an Internet marketing company providing e-mail
services to corporate customers. Additionally, Options Media has
a lead generation business and disposed of its SMS text messaging
delivery business. In 2010, Options Media transitioned by
changing its focus to smart phones and acquiring a robust anti-
texting program that prohibits people in vehicles from texting, e-
mailing, and reading such communications while moving. As part of
its focus on mobile software applications, Options Media has also
broadened its suite of products by continuing to improve the
features of its Drive Safe(TM) anti-texting software. In
conjunction with this change of focus, in February 2011, Options
Media sold its e-mail and SMS businesses. Options Media retains
its lead generation business.
The Company also reported a net loss of $11.93 million on $525,103
of net revenues for the nine months ended Sept. 30, 2011, compared
with a net loss of $5.79 million on $633,208 of net revenues for
the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed
$3.37 million in total assets, $5.76 million in total liabilities,
and a $2.39 million total stockholders' deficit.
As reported in the TCR on May 31, 2011, Salberg & Company, P.A.,
in Boca Raton, Florida, expressed substantial doubt about Options
Media Group Holdings' ability to continue as a going concern,
following the Company's 2010 results. The independent auditors
noted that the Company has a net loss of $9.86 million, and net
cash used in operations of $2.02 million for the year ended
Dec. 31, 2010, and a working capital deficit and an accumulated
deficit of $524,157, and $22.74 million respectively at Dec. 31,
2010. The independent auditors noted that the Company has also
discontinued certain operations.
ORAGENICS INC: Has $2.5 Million Loan Agreement with Koski Family
----------------------------------------------------------------
Oragenics, Inc., entered into a new loan agreement with the Koski
Family Limited Partnership for $2.5 million in secured funding in
two equal advances with the first advance occurring on March 23,
2012.
On March 23, 2012, the Company also entered into an Exchange of
Notes for Equity Agreement with the KFLP. Pursuant to the
Agreement, KFLP agreed to the cancellation of $8.737 million of
indebtedness owed to the KFLP under the Oragenic's existing
unsecured revolving credit facility in exchange for 6.285 million
shares of Company common stock based on a price per share of $1.39
per share. The KFLP also received 1.571 million warrants in
exchange for the cancellation of the indebtedness and an
additional 599,520 warrants in connection with the Loan Agreement
which warrants are exercisable for shares of Company common stock
at a price of $2.00 per share at any time over the next three
years.
"The additional financial resources and improved balance sheet
resulting from these transactions will help Oragenics to continue
its progress toward becoming a leader in oral care probiotics.
Support from the KFLP comes at an important time in our strategic
development," stated John N. Bonfiglio, Ph.D., Chief Executive
Officer and President of Oragenics.
A copy of the Form 8-K is available for free at:
http://is.gd/MioXxg
About Oragenics Inc.
Tampa, Fla.-based Oragenics, Inc. -- http://www.oragenics.com/--
is a biopharmaceutical company focused primarily on oral health
products and novel antibiotics. Within oral health, Oragenics is
developing its pharmaceutical product candidate, SMaRT Replacement
Therapy, and also commercializing its oral probiotic product,
ProBiora3. Within antibiotics, Oragenics is developing a
pharmaceutical candidate, MU1140-S and intends to use its
patented, novel organic chemistry platform to create additional
antibiotics for therapeutic use.
The Company reported a net loss of $5.73 million on $1.04 million
of net revenues for the nine months ended Sept. 30, 2011, compared
with a net loss of $5.63 million on $1.01 million of net revenues
for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $1.22
million in total assets, $7.80 million in total liabilities,
and a $6.58 million total shareholders' deficit.
As reported in the TCR on April 5, 2011, Kirkland, Russ, Murphy &
Tapp, P.A., in Clearwater, Fla., expressed substantial doubt about
Oragenics' ability to continue as a going concern, following the
Company 2010 results. The independent auditors noted that the
Company has incurred recurring operating losses, negative
operating cash flows and has an accumulated deficit.
OVERLAND STORAGE: Closes Sale of 3.6 Million Common Shares
----------------------------------------------------------
On March 23, 2012, Overland Storage, Inc., entered into an
underwriting agreement with Needham & Company, LLC, pursuant to
which the Company agreed to sell 3,200,000 shares of the Company's
common stock, no par value per share, for $2.00 per share, less a
6.5% underwriting commission.
Under the terms of the Underwriting Agreement, the Company granted
the Underwriter an option to purchase up to an additional 480,000
shares of Common Stock at the public offering price, less a 6.5%
underwriting commission, within 30 days from the date of the
Underwriting Agreement to cover over-allotments, if any. The
offering was made pursuant to the Company's effective registration
statement on Form S-3, as amended, and the prospectus supplement
dated March 23, 2012.
On March 26, 2012, the Underwriter elected to partially exercise
its over-allotment option to purchase 440,000 of the Additional
Shares. The closing of the sale of an aggregate of 3,640,000
Shares occurred on March 28, 2012.
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.
PATIENT SAFETY: Incurs $1.8 Million Net Loss in 2011
----------------------------------------------------
Patient Safety Technologies, Inc., filed with the U.S. Securities
and Exchange Commission its Annual Report on Form 10-K disclosing
a net loss of $1.89 million on $9.46 million of revenue for the
year ended Dec. 31, 2011, compared with net income of $2 million
on $14.79 million of revenue during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $13.95
million in total assets, $3.92 million in total liabilities, all
current, and $10.03 million total stockholders' equity.
A copy of the Form 10-K is available for free at:
http://is.gd/CZZohQ
About Patient Safety Technologies
Patient Safety Technologies, Inc. (OTC: PSTX) --
http://www.surgicountmedical.com/-- through its wholly owned
operating subsidiary SurgiCount Medical, Inc., provides the
Safety-Sponge(TM) System, a system designed to improve the
standard of patient care and reduce health care costs by
preventing the occurrence of surgical sponges and other retained
foreign objects from being left inside patients after surgery.
RFOs are among one of the most common surgical errors.
PEREGRINE PHARMACEUTICALS: Gets Bid Price Notice From NASDAQ
------------------------------------------------------------
Peregrine Pharmaceuticals, Inc. received a notice from The NASDAQ
Stock Market indicating that the company's minimum bid price has
fallen below $1.00 for 30 consecutive business days, and
therefore, was not in compliance with NASDAQ Marketplace Rule
5550(a)(2). The company has been provided 180 calendar days, or
until Sept. 24, 2012, to regain compliance with the minimum bid
price requirement. To regain compliance, the closing bid price of
the company's common stock must be at least $1.00 per share for a
minimum of 10 consecutive business days. This notice does not
impact the company's listing on The NASDAQ Stock Market at this
time.
If the company does not regain compliance within the initial 180-
day period, but otherwise meets the continued listing requirement
for market value of publicly held shares and all other initial
listing standards for The NASDAQ Capital Market, except for the
bid price requirement, the company will be granted an additional
180 calendar days to regain compliance. If the company is not
eligible for an additional compliance period, NASDAQ will notify
the company that its securities will be subject to delisting. At
that time, the company may appeal this determination to delist its
securities to a Listing Qualification Panel.
About Peregrine Pharmaceuticals
Tustin, California-based Peregrine Pharmaceuticals, Inc., is a
clinical-stage biopharmaceutical company driven to develop and
manufacture first-in-class monoclonal antibodies for the treatment
of cancer and viral infections.
For the six months ended Oct. 31, 2011, the Company has reported a
net loss of $20.1 million on $9.9 million of revenues, compared
with a net loss of $15.2 million on $7.9 million of revenues for
the six months ended Oct. 31, 2010.
The Company's balance sheet at Oct. 31, 2011, showed $27.3 million
in total assets, $14.8 million in total liabilities, and
stockholders' equity of $12.5 million.
As reported in the TCR on July 19, 2011, Ernst & Young LLP, in
Irvine, California, expressed substantial doubt about Peregrine
Pharmaceuticals' ability to continue as a going concern, following
the Company's results for the fiscal year ended April 30, 2011.
The independent auditors noted that of the Company's recurring
losses from operations and recurring negative cash flows from
operating activities.
PLAZA SOUTH: Case Summary & 13 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: The Plaza South Tower Commercial Condominium
Association, Inc
19 E Central Blvd
Orlando, FL 32801
Bankruptcy Case No.: 12-04035
Chapter 11 Petition Date: March 27, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Orlando)
Debtor's Counsel: R. Scott Shuker, Esq.
LATHAM SHUKER EDEN & BEAUDINE LLP
P.O. Box 3353
Orlando, FL 32802
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: bankruptcynotice@lseblaw.com
Estimated Assets: $100,001 to $500,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 13 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/flmb12-04035.pdf
The petition was signed by Daniel Hunt, president.
PHYSICAL PROPERTY: Incurs HK$524,000 Comprehensive Loss in 2011
---------------------------------------------------------------
Physical Property Holdings Inc. filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss and total comprehensive loss of HK$524,000 on HK$835,000
of rental income for the year ended Dec. 31, 2011, compared with a
net loss and total comprehensive loss of HK$640,000 on HK$765,000
of rental income during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed HK$10.35
million in total assets, HK$11.36 million in total liabilities,
all current, and a HK$1.01 million total stockholders' deficit.
For 2011, Mazars CPA Limited, in Hongkong, noted that the Company
had a negative working capital as of Dec. 31, 2011, and incurred
loss for the year then ended, which raised substantial doubt about
its ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/FRdtxQ
About Physical Property
Physical Property Holdings Inc. (formerly known as Physical Spa &
Fitness Inc.), through its wholly-owned subsidiary Good Partner
Limited, owns five residential apartments located in Hong Kong.
The Company was incorporated on Sept. 21, 1988, under the laws
of the United States of America.
PREFERRED PROPPANTS: Moody's Rates $125MM Add-on Term Loan 'B2'
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Preferred
Proppants, LLC's proposed $125 million term loan B add-on
facility, and affirmed its B2 corporate family rating and a B3
probability of default. Proceeds will be used to repurchase shares
from minority owners and make a dividend distribution. In
addition, Moody's affirmed the B2 ratings of its $30 million
revolver, $175 million term loan A, and $225 million term loan B.
Ratings Assigned:
$125 million add-on senior secured Term Loan B due 2016,
B2 (LGD3, 35%)
Ratings Rationale
The B2 corporate family rating and B3 probability of default
rating balances the company's limited scale, end market
concentration, and near term execution risks against its strong
operating margins, significant barriers to entry, large base of
proven mineral reserves, and moderate debt leverage. The company's
pursuit of substantial growth through acquisitions and organic
expansion of existing facilities presents various near term
integration and execution risks. However, if these risks are
successfully overcome, the growth strategy may improve the
company's scale and credit profile over the intermediate term.
Preferred's $125 million term loan B add-on increases its pro-
forma leverage from 4.0x at December 2011 to 4.4x. Proceeds will
be used to repurchase shares from minority shareholders and fund a
distribution. However, its recent acquisition of Winn Bay is
expected to provide significant levels of volume and earnings,
while enhancing the company's ability to serve customers. At a
result Moody's expects Preferred to de-lever over the next 18
months. The company is expected to maintain comfortable liquidity
levels, based on projected free cash flow, availability under its
$30 million senior secured revolving credit facility, and adequate
covenant compliance cushion.
The stable outlook presumes that adjusted debt-to-EBITDA returns
below 3.5x and EBIT-to-Interest above 3.0x over the next several
quarters. It presumes the company will carefully balance its
leverage and other credit metrics with its acquisition strategy.
The ratings could experience upward pressure if the company
continues to grow organically and accomplishes de-levering.
Evidenced stability and improved scale will support upward rating
consideration.
The ratings would be considered for a downgrade in the event that
the company's liquidity were to tighten, adjusted debt-to-EBITDA
leverage exceeded 4.5x, or the company faced an unexpectedly sharp
decline in pricing or volume due to a downturn in drilling and
other industrial markets. Additional large debt financed
distributions could also pressure the rating.
The principal methodology used in rating Preferred was the Global
Building Materials 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.
Preferred Proppants, LLC headquartered in Radnor, PA, is a
producer of frac sand and proppant materials, used predominately
in oil and gas drilling. Revenues in the fiscal year ended
December 31, 2011 totaled $172 million.
PRUDENTIAL FIN'L: Moody's Assigns (P)Ba1 Preferred Stock Ratings
----------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)Baa2
rating to the senior unsecured debt of Prudential Financial,
Inc.'s multiple security shelf. Moody's has also assigned
provisional preferred stock ratings of (P)Baa3 to the trust
preferred securities that may be issued by Prudential Financial
Capital Trusts II and III -- special purpose vehicles, established
by Prudential for the sole purpose of issuing these securities.
Other provisional ratings assigned are listed below. The shelf
rating renews and replaces a similar universal shelf registration
that expired on March 11, 2012. All of the ratings have a positive
outlook, in line with the outlook on Prudential and its
affiliates.
Rating Rationale
Moody's said that Prudential's Baa2 senior unsecured debt rating
and the A2 insurance financial strength rating of its US life
insurance operating companies are based primarily on the group's
strong brand name and leading market positions for a number of
life insurance offerings, including individual life insurance,
variable annuities, group life, and retirement and stable value
products. The current positive outlook on Prudential reflects
positive earnings momentum, a strong capital position, and
continuing improvement in financial flexibility, which in
combination are strengthening its credit profile relative to its
current ratings.
According to Scott Robinson, Senior Vice President, "These credit
strengths are tempered by an above average amount of operating and
financial debt, higher than average equity market sensitivity,
exposure to commercial real estate, and modest -- albeit improving
-- earnings coverage ratios."
Moody's noted that the following could result in an upgrade to the
current ratings: 1) GAAP net income resulting in ROCs for the U.S.
life insurance operations in the high single digits; 2) Continued
reduction in total leverage (eventually getting to 40%); 3)
Earnings coverage anticipated to be over 6 times.
Conversely, the following could change the outlook back to stable:
1) Investment losses of over $500 million are sustained or are
deemed likely to occur in 2012; 2) There is little progress in
reducing leverage; 3) Earnings coverage is not anticipated to be
over 6 times.
The following provisional ratings were assigned with a positive
outlook:
Prudential Financial, Inc. -- provisional senior unsecured debt
rating at (P)Baa2; provisional subordinated debt rating at
(P)Baa3; provisional preferred stock rating at (P)Ba1;
provisional non-cumulative preferred stock rating at (P)Ba1;
senior unsecured medium-term note program at (P)Baa2;
Prudential Financial Capital Trust II -- provisional trust
preferred stock rating at (P)Baa3;
Prudential Financial Capital Trust III -- provisional trust
preferred stock rating at (P)Baa3;
Prudential Financial, Inc. is an insurance and investment
management organization headquartered in Newark, New Jersey. As of
December 31, 2011, the company had total assets of $625 billion
and total shareholders' equity of $37.8 billion.
The principal methodologies used in rating Prudential was Moody's
Global Rating Methodology for Life Insurers published in May 2010.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to pay punctually senior
policyholder claims and obligations.
QUALTEQ INC: Files Third Amended Plan Disclosures
-------------------------------------------------
Qualteq, Inc., et al., submitted to the U.S. Bankruptcy Court for
the Northern District of Illinois a Disclosure Statement
explaining the proposed Third Amended Joint Plan of
Reorganization.
According to the Disclosure Statement, the Plan provides that on
or after the Confirmation Date, the applicable Debtors or
Reorganized Debtors may enter into Restructuring Transactions and
may take actions as the Debtors or the Reorganized Debtors
determine to be necessary or appropriate to (i) effect a corporate
restructuring of their respective businesses; (ii) to simplify the
overall corporate structure of the Reorganized Debtors; or (iii)
to preserve the value of any available net operating losses and
other favorable tax attributes; or (iv) to maximize the value of
the Reorganized Debtors, all to the extent not inconsistent with
any other terms of the Plan or existing law. The Restructuring
Transactions may include one or more transfers, mergers,
consolidations, conversions, restructurings (including the
issuance or redemption of one or more series of Equity Interests
in one or more of the Reorganized Debtors), dispositions,
liquidations or dissolutions, as may be determined by the Debtors
or the Reorganized Debtors (at any time on or prior to the
Effective Date) to be necessary or appropriate.
Class Estimated Percentage Recovery
----- -----------------------------
Class 1 Other Secured Claims 100%
Class 2 Priority Claims 100%
Class 3 Secured Lender Claims 100%
Class 4 Current Vendor Claims 100%
Class 5 Other Unsecured Claims 100%
Class 6 Intercompany Ordinary Course Claims 100%
Class 7 Intercompany Loan Claims 100%
Class 8 Debtor Equity Interests N/A
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/QUALTEQ_INC_ds_3rdamendedplan.pdf
About QualTeq Inc.
South Plainfield, New Jersey-based QualTeq, Inc., engages in the
design, manufacture, and personalization of plastic cards in the
United States. The company manufactures magnetic, contact, and
dual interface smart cards.
Qualteq Inc. and 17 affiliated companies filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on
Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf,
Esq., at Fox Rothschild LLP, serve as local counsel to the
Debtors. K&L Gates LLP is the general bankruptcy counsel.
Eisneramper LLP is the accountants and financial advisors.
Scouler & Company is the restructuring advisors. Lowenstein
Sandler PC is counsel to the Committee. Avadamma LLC disclosed
$38,491,767 in assets and $36,190,943 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four
unsecured creditors to serve on the Official Committee of
Unsecured Creditors.
QUALTEQ INC: Judge Eugene R. Wedoff Now Assigned to Handle Cases
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
has transferred the Chapter 11 cases of Qualteq, Inc., et al., to
Chief Judge Bruce W. Black for reassignment.
On Feb. 21, Judge A. Benjamin Goldgar ordered for the transfer of
the cases for reassignment because Judge Donald R. Cassling
recuses himself from hearing the Debtors' cases due to a conflict
of interest.
In this relation, Judge Black has reassigned the Debtors' cases to
Judge Eugene R. Wedoff in accordance with the Rules of the U.S.
Bankruptcy Court and pertinent general orders.
The cases were transferred from the U.S. Bankruptcy Court for the
District of Delaware to the Northern District of Illinois.
About QualTeq Inc.
South Plainfield, New Jersey-based QualTeq, Inc., engages in the
design, manufacture, and personalization of plastic cards in the
United States. The company manufactures magnetic, contact, and
dual interface smart cards.
Qualteq Inc. and 17 affiliated companies filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on
Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf,
Esq., at Fox Rothschild LLP, serve as local counsel to the
Debtors. K&L Gates LLP is the general bankruptcy counsel.
Eisneramper LLP is the accountants and financial advisors.
Scouler & Company is the restructuring advisors. Lowenstein
Sandler PC is counsel to the Committee. Avadamma LLC disclosed
$38,491,767 in assets and $36,190,943 in liabilities as of the
Petition Date.
Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four
unsecured creditors to serve on the Official Committee of
Unsecured Creditors.
QUANTUM FUEL: Capital Ventures Holds 9.9% Equity Stake
------------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Capital Ventures International and Heights Capital
Management, Inc., disclosed that, as of March 16, 2012, they
beneficially own 4,538,793 shares of common stock of Quantum Fuel
Systems Technologies Worldwide, Inc., which represents 9.9% of the
shares outstanding. A copy of the filing is available at no
charge at http://is.gd/Q30Rsn
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.
Quantum Fuel reported a net loss attributable to stockholders of
$38.49 million on $24.47 million of total revenue for the eight
months ended Dec. 31, 2011, compared with a net loss attributable
to stockholders of $6.52 million on $10.51 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.
QUANTUM FUEL: Hudson Bay Discloses 9.9% Equity Stake
----------------------------------------------------
In a Schedule 13G filed with the U.S. Securities and Exchange
Commission, Hudson Bay Master Fund Ltd., Hudson Bay Capital
Management, L.P., and Sander Gerber disclosed that, as of
March 16, 2012, they beneficially own 1,848,290 shares of common
stock and warrants to purchase up to 6,949,679 shares of common
stock of Quantum Fuel Systems Technologies Worldwide, Inc.,
representing 9.99% of the shares outstanding. A copy of the
filing is available for free at http://is.gd/Kog4le
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.
Quantum Fuel reported a net loss attributable to stockholders of
$38.49 million on $24.47 million of total revenue for the eight
months ended Dec. 31, 2011, compared with a net loss attributable
to stockholders of $6.52 million on $10.51 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.
QUANTUM FUEL: Incurs $38.5-Mil. Loss in 8 Months Ended Dec. 31
--------------------------------------------------------------
Quantum Fuel Systems Technologies Worldwide, Inc., filed with the
U.S. Securities and Exchange Commission its transition report on
Form 10-KT disclosing a net loss attributable to stockholders of
$11.03 million on $20.27 million of total revenue for the year
ended April 30, 2011. The Company reported a net loss
attributable to stockholders of $38.49 million on $24.47 million
of total revenue for the eight months ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2011, showed $46.43
million in total assets, $20.86 million in total liabilities and
$25.57 million in total equity.
Haskell & White LLP, in Irvine, California, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that Company incurred significant
operating losses and used a significant amount of cash in
operations during the eight months ended Dec. 31, 2011.
A copy of the Form 10-KT is available for free at:
http://is.gd/mULj1p
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.
RYAN INTERNATIONAL: $4.5MM DIP Facility With INTRUST Approved
-------------------------------------------------------------
Ryan International Airlines Inc. and its debtor-affiliates
obtained final authority to up to $4.5 million under a revolving
advance note from INTRUST Bank N.A., the Debtor's prepetition
lender. The DIP facility includes credit card commitments of
$500,000.
The DIP Facility matures no later than July 9, 2012, but may be
extended for an additional three months upon INTRUST Bank's
consent.
As of the petition date, INTRUST Bank is owed $53.2 million under
a prepetition credit facility. The debt is secured by liens on
the Debtors' assets. The Debtors obtained a final court order
authorizing them to use cash collateral of INTRUST Bank and grant
adequate protection to the lender. The Debtors may use cash
collateral through July 9, 2012.
The DIP loan bears interest at 7% per annum. A loan origination
fee of 0.005% of the principal amount of DIP Facility will also be
charged. The DIP Lender will also be entitled to reimbursement of
attorney's fees of not more than $50,000.
The DIP Facility was approved on an interim basis on March 8.
About Ryan International
Ryan International Airlines, Inc., filed for Chapter 11 protection
(Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford,
Illinois, on March 6, 2012. Ryan International, which filed for
bankruptcy along with 10 affiliates, estimated assets and debts of
up to $100 million.
Ryan and its affiliates -- http://www.flyryan.com/-- provide
commercial air charter services, to a diverse mix of customers
including U.S., Canadian and British military entities, the
Department of Homeland Security, the U.S. Marshall Service,
leisure travelers, professional and college sports teams and an ad
hoc charter services. Ryan has 460 employees, with the cockpit
crew, flight attendants and dispatchers are represented by labor
unions.
Judge Manuel Barbosa presides over the case. Thomas J. Lester,
Esq., at Hinshaw & Culbertson LLP, serves as the Debtors' counsel.
Silverman Consulting serves as financial advisor. The petition
was signed by Mark A. Robertson, executive vice president.
INTRUST Bank, the prepetition lender owed $53.2 million, is
represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP;
and Edward J. Nazar, Esq., at Redmond & Nazar LLP.
RYAN INTERNATIONAL: Hardin Bank Asks Court to Bar Cash Use
----------------------------------------------------------
Hardin County Savings Bank has appeared in the bankruptcy cases of
Ryan International Airlines Inc. and its debtor-affiliates, asking
the Court to bar the Debtors from using the bank's cash
collateral.
Hardin County Savings Bank said it is the owner and holder of a
first priority secured claim against Ryan's debtor-affiliate,
Sundowner 102 LLC, in the approximate amounts of $2,107,425 and
$312,229. Hardin County Savings Bank said it has not consented to
the use of cash collateral by Sundowner. The bank said it is
secured by all of the account receivables and related proceeds of
Sundowner.
Hardin County Savings Bank is represented by:
Mark D. Walz, Esq.,
DAVIS, BROWN, KOEHN, SHORS & ROBERTS, P.C.
4201 Westown Parkway, Suite 300
West Des Moines, IA 50266
Tel: 515-246-7898
E-mail: mark.walz@lawiowa.com
- and -
James E. Stevens, Esq.
Steven G. Balsley, Esq.
BARRICK, SWITZER, LONG, BALSLEY & VAN EVERA LLP
6833 Stalter Drive
Rockford, IL 61108
Tel: 815-962-6611
E-mail: jstevens@bslbv.com
sbalsley@bslbv.com
About Ryan International
Ryan International Airlines, Inc., filed for Chapter 11 protection
(Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford,
Illinois, on March 6, 2012. Ryan International, which filed for
bankruptcy along with 10 affiliates, estimated assets and debts of
up to $100 million.
Ryan and its affiliates -- http://www.flyryan.com/-- provide
commercial air charter services, to a diverse mix of customers
including U.S., Canadian and British military entities, the
Department of Homeland Security, the U.S. Marshall Service,
leisure travelers, professional and college sports teams and an ad
hoc charter services. Ryan has 460 employees, with the cockpit
crew, flight attendants and dispatchers are represented by labor
unions.
Judge Manuel Barbosa presides over the case. Thomas J. Lester,
Esq., at Hinshaw & Culbertson LLP, serves as the Debtors' counsel.
Silverman Consulting serves as financial advisor. The petition
was signed by Mark A. Robertson, executive vice president.
INTRUST Bank, the prepetition lender owed $53.2 million, is
represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP;
and Edward J. Nazar, Esq., at Redmond & Nazar LLP.
RYAN INTERNATIONAL: Sec. 341 Creditors' Meeting Set for May 4
-------------------------------------------------------------
The United States Trustee for Region 11 will convene a Meeting of
Creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy
cases of Ryan International Airlines, Inc., and its debtor-
affiliates on May 4, 2012, at 10:00 a.m. at Stewart Square, 308
West State Street, Rm. 40, in Rockford, Illinois.
The last day to object to dischargeability is July 3, 2012.
About Ryan International
Ryan International Airlines, Inc., filed for Chapter 11 protection
(Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford,
Illinois, on March 6, 2012. Ryan International, which filed for
bankruptcy along with 10 affiliates, estimated assets and debts of
up to $100 million.
Ryan and its affiliates -- http://www.flyryan.com/-- provide
commercial air charter services, to a diverse mix of customers
including U.S., Canadian and British military entities, the
Department of Homeland Security, the U.S. Marshall Service,
leisure travelers, professional and college sports teams and an ad
hoc charter services. Ryan has 460 employees, with the cockpit
crew, flight attendants and dispatchers are represented by labor
unions.
Judge Manuel Barbosa presides over the case. Thomas J. Lester,
Esq., at Hinshaw & Culbertson LLP, serves as the Debtors' counsel.
Silverman Consulting serves as financial advisor. The petition
was signed by Mark A. Robertson, executive vice president.
INTRUST Bank, the prepetition lender owed $53.2 million, is
represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP;
and Edward J. Nazar, Esq., at Redmond & Nazar LLP.
SEALY CORP: H Partners Buys More Shares, Now Owns to 15.3% Stake
----------------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, H Partners Management, LLC, and its
affiliates disclosed that, as of March 27, 2012, they beneficially
own 15,480,935 shares of common stock of Sealy Corporation
representing 15.3% of the shares outstanding.
As previously reported by the TCR on March 15, 2012, H Partners
Management may be deemed to beneficially own 14,616,441 Shares of
the Company (as of March 12, 2012), comprising approximately 14.5%
of the outstanding Shares of the Company, based on 100,916,228
Shares outstanding as reported in the Company's Form 10-K filed
on Jan. 18, 2012.
On March 20, 2012, the H Partners acquired 864,494 shares at $1.70
apiece.
A copy of the amended filing is available for free at:
http://is.gd/HHBdN0
About Sealy Corp.
Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) --
http://www.sealy.com/-- is the largest bedding manufacturer in
the world with sales of $1.5 billion in fiscal 2008. The Company
manufactures and markets a broad range of mattresses and
foundations under the Sealy(R), Sealy Posturepedic(R), including
SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns &
Foster(R), and Bassett(R) brands. Sealy operates 25 plants in
North America, and has the largest market share and highest
consumer awareness of any bedding brand on the continent. In the
United States, Sealy sells its products to approximately 3,000
customers with more than 7,000 retail outlets.
The Company reported a net loss of $9.88 million for the 12 months
ended Nov. 27, 2011, and a net loss of $13.74 million during the
prior year. The Company reported a net loss of $15.20 million
for the three months ended Nov. 27, 2011.
The Company's balance sheet as of Nov. 27, 2011, showed
$919.19 million in total assets, $999.75 million in total
liabilities, and a $80.56 million stockholders' deficit.
* * *
Sealy carries 'B' local and issuer credit ratings from Standard &
Poor's.
SEJWAD HOTELS: Files Schedules of Assets and Liabilities
--------------------------------------------------------
Sejwad Hotels & Development, LLC, filed with the Bankruptcy Court
for the Central District of California its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $13,000,000
B. Personal Property $1,015
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $8,100,000
E. Creditors Holding
Unsecured Priority
Claims $134,729
F. Creditors Holding
Unsecured Non-priority
Claims $493,755
----------- -----------
TOTAL $13,001,015 $8,728,483
A copy of the schedules is available for free at:
http://bankrupt.com/misc/SEJWAD_HOTELS_sal.pdf
Headquartered in Artesia, California, Sejwad Hotels & Development,
LLC, filed for Chapter 11 protection (Bankr. C. Calif. Case No.
12-14521) on Feb. 8, 2012. The petition was signed by Ashvin
Patel, managing member. Michael G. Spector, Esq., at Law Offices
of Michael G. Spector, in Santa Ana, California, serves as
counsel. Judge Julia W. Brand presides over the case.
SELECTIVE INVESTMENTS: Case Summary & 14 Largest Unsec Creditors
----------------------------------------------------------------
Debtor: Selective Investments, IV, LLC
817 S.E. 5th Court
Ft. Lauderdale, FL 33301-2905
Bankruptcy Case No.: 12-04347
Chapter 11 Petition Date: March 27, 2012
Court: United States Bankruptcy Court
Middle District of Florida (Tampa)
Judge: Michael G. Williamson
Debtor's Counsel: Jay B. Verona, Esq.
ENGLANDER AND FISCHER, LLP
721 1st Avenue North
St. Petersburg, FL 33701
Tel: (727) 898-7210
Fax: (727) 898-7218
E-mail: jverona@eandflaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 14 largest unsecured creditors
is available for free at http://bankrupt.com/misc/flmb12-04347.pdf
The petition was signed by Phillip Chinnock, manager.
Affiliate that filed separate Chapter 11 petition:
Petition
Debtor Case No. Date
------ -------- ----
Selective Investments, III, LLC 11-08643 05/04/11
SIERRA CASCADE: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Sierra Cascade LLC
P.O. Box 166
Chemult, OR 97731-0166
Bankruptcy Case No.: 12-61198
Chapter 11 Petition Date: March 27, 2012
Court: United States Bankruptcy Court
District of Oregon
Judge: Thomas M. Renn
Debtor's Counsel: C Casey White, Esq.
10 Crater Lake Ave.
Medford, OR 97504
Tel: (541) 779-4912
E-mail: ckcwhite@msn.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
A copy of Company's the list of its 20 largest unsecured creditors
is available for free at http://bankrupt.com/misc/orb12-61198.pdf
The petition was signed by Bradley Van Pelt, manager.
SKILLED HEALTHCARE: Moody's Raises Corp. Family Rating to 'B1'
--------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
Skilled Healthcare Group, Inc. to B1 and affirmed the B2
probability of default rating. Concurrently, Moody's affirmed the
B1 rating on the company's term loan that is proposed to be
upsized by $100 million to $442 million from current $342 million
(expected to be paid down to $321 million before the transaction).
The B1 rating of the $100 million revolving credit facility was
also affirmed and the speculative grade liquidity rating was
upgraded to SGL-2 from SGL-3. The outlook is stable.
The upgrade of the corporate family rating to B1 reflects Skilled
Healthcare's ability to maneuver around the difficult operating
environment and continue to produce industry leading EBITDA
margins while demonstrating prudent cost management and increased
focus on operational efficiencies, all of which are a key to the
company's current and future operating performance.
The company is upsizing its term loan by $100 million in order to
refinance its $130 million senior subordinated notes that are due
January 15, 2014. To complete the refinancing, the company is also
expected to utilize its $100 million revolving credit facility
with advances of $35 million.
The following rating actions were taken (LGD point estimates are
subject to change and all ratings are subject to review of final
documentation):
Corporate family rating, upgraded to B1 from B2;
Probability of default rating, affirmed at B2;
$442 million ($342 million outstanding, $100 million upsize)
senior secured term loan, affirmed at B1; LGD rate changed to
LGD3, 34% from LGD3, 37%;
$100 million senior secured revolving credit facility, affirmed
at B1; LGD rate changed to LGD3, 34% from LGD3, 37%;
Loss-given-default rate changed to 35% from 50%;
Speculative-grade liquidity rating, upgraded to SGL-2 from
SGL-3.
If the transaction closes as proposed, Moody's will withdraw the
rating on the company's $130 million subordinated notes.
Ratings Rationale
The B1 corporate family rating also considers Moody's expectations
for the company to use a significant portion of free cash flow
toward debt repayment. Moody's also recognizes the company's real
estate ownership strategy, ability to attract higher acuity
patients, and the elimination of near term refinancing risk post
the close of the proposed transaction as the nearest maturity will
be moved to 2015 from 2013.
Moody's also considers the impact of Medicare reimbursement rate
reductions on the company's credit profile. While a negative to
the credit profile, the company should be able to maintain a B1
credit profile as Moody's believes it will be able to mitigate a
portion of the reimbursement rate reduction impact. However,
overall longer-term reimbursement environment is a concern and
continues to weigh on the rating and potential upgrade. Further
constraining the rating are Skilled Healthcare's modest size and
concentration of revenues in two states (California -- 41% and
Texas -- 21%). Moody's expects Skilled Healthcare to continue to
make smaller, tuck-in acquisitions that are financed with cash
flow.
Moody's could upgrade the ratings if the company were to
experience growth in EBITDA and/or repay debt such that adjusted
debt leverage is sustained below 3.0 times and free cash flow to
debt is sustained above 10%. An upgrade would also be supported by
the expectation of relative stability in government reimbursement
rates to nursing homes and increased revenue diversification by
geography.
The ratings could be downgraded if the company's debt-to-EBITDA
would increase above 4.8 times on a sustained basis and free cash
flow-to-debt would decline below 5% on a sustained basis. In
addition, a deterioration in liquidity profile and/or material
negative developments in the reimbursement environment could
impact the rating.
The principal methodology used in rating Skilled Healthcare Group,
Inc. was the Global Healthcare Service Providers 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.
Headquartered in Foothill Ranch, CA, Skilled Healthcare Group,
Inc. operates long-term care facilities and provides a variety of
post-acute care services. The company operates skilled nursing
facilities, assisted living facilities, hospice and home health
locations. Further, the company provides ancillary services such
as physical, occupational and speech therapy in its facilities and
unaffiliated facilities as well as is a member of a joint venture
providing institutional pharmacy services in Texas. Skilled
Healthcare recognized revenues of approximately $870 million for
2011.
SMART-TEK SOLUTIONS: Delays Form 10-K for 2011
----------------------------------------------
Smart-Tek Solutions Inc. notified the U.S. Securities and Exchange
Commission that it will be late in filing its Annual Report on
Form 10-K for the period ended Dec. 31, 2011. The review of the
financials by the outside auditors will be completed on or about
April 6, 2012.
About Smart-tek Solutions
Newport Beach, Calif.-based Smart-tek Solutions Inc. has two
business lines. Through its wholly owned subsidiary Smart-Tek
Communications Inc. the Company specializes in the design and
development of Radio Frequency Identification (RFID) integration,
monitoring and tracking solutions to meet industry demands.
Through its wholly owned subsidiary Smart-Tek Automated Services
Inc. the Company provides professional employer organization
services.
The Company reported a comprehensive loss of $3.19 million on
$15.25 million of revenue for the nine months ended Sept. 30,
2011, compared with a comprehensive income of $1.40 million on
$10.11 million of revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed $6.40
million in total assets, $8.38 million in total liabilities, all
current, and a $1.98 million total stockholders' deficit.
John Kinross-Kennedy, of Irvine, California, expressed substantial
doubt about the Company's ability to continue as a going concern.
Mr. Kinross-Kennedy noted that that the Company has suffered
recurring losses until the latest fiscal year, and has a working
capital deficiency of $994,278 and a stockholders' deficiency of
$438,164 at June 30, 2010.
SMITHFIELD FOODS: S&P Raises Corporate Credit Rating to 'BB'
------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Smithfield Foods Inc. to 'BB' from 'BB-'. The outlook is
stable.
"We also raised the issue-level ratings on the company's senior
secured debt to 'BBB-' from 'BB+' (two notches above the corporate
credit rating), with an unchanged recovery rating of '1',
indicating our expectation for very high (90%-100%) recovery in
the event of a payment default. In addition, we raised the issue-
level ratings on the company's senior unsecured debt to 'BB' from
'BB-' (the same as the corporate credit rating), with an unchanged
recovery rating of '3' indicating our expectations for meaningful
recovery (50%-70%) in the event of a payment default. While the
estimated recovery value for the unsecured notes is in the 70%-90%
range, we cap the recovery rating at '3', according to our
criteria on unsecured debt of issuers in the 'BB' category.
Smithfield Foods had about $2 billion in reported debt outstanding
as of Jan. 31, 2012," S&P said.
"The upgrade reflects our opinion that Smithfield's business risk
profile has improved, in part because of better industry
fundamentals, but also because we believe the company has adopted
a more prudent approach to managing earnings volatility, including
reducing its exposure to volatile agricultural commodity costs
like corn," said Standard & Poor's credit analyst Chris Johnson.
"Although we do not believe the company has eliminated the
commodity price risk inherent in its businesses (particularly the
volatility inherent in hog production), we believe the company's
reduced debt levels and adequate liquidity position should help
minimize credit measure deterioration during weaker earnings
cycles."
"The stable outlook reflects our opinion that Smithfield's
improved operating performance and credit measures will likely be
sustained and that free cash flow will remain positive. This
includes our estimate that debt to EBITDA will remain below 2.5x
and that FFO to debt will approach 30%. We would consider lowering
the ratings if the company's earnings were to deteriorate,
resulting in debt to EBITDA increasing to 3.5x or more on a
sustained basis and FFO to total debt at or below 20%. We believe
this could occur if the company's key packaged meats segments
suffered an operating margin decline of more than 300 basis points
because it is unable to pass through higher prices, while hog
production losses returned because of lower-than-expected hog
prices in fiscal 2013. We do not believe a higher rating is likely
over the outlook period given the inherently volatile nature of
Smithfield's earnings, and would not consider it unless Smithfield
were able to significantly improve and sustain its credit measures
and reduce its earning volatility," S&P said.
SNOKIST GROWERS: Truitt Bro Gets Extension to Line Up Financing
---------------------------------------------------------------
Dow Jones' DBR Small Cap reports that the U.S. Bankruptcy Court in
Spokane, Wash., has granted Truitt Brothers Inc. 45 more days to
try to obtain financing to purchase fruit cooperative Snokist
Growers out of Chapter 11 bankruptcy but didn't rule out a new
lead bid from Del Monte Corp.
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., at Kimel Law
Offices.
Keybank is represented by Bruce W. Leaverton, Esq., and Tereza
Simonyan, Esq., at Lane Powell PC
SOUTHERN FOREST: Sec. 341 Creditors' Meeting Set for May 17
-----------------------------------------------------------
The U.S. Trustee for the Middle District of Alabama will hold a
Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11
case of Southern Forest Land, Inc., on May 17, 2012, at 10:00 a.m.
at Dothan Federal Courthouse, U.S. Bankruptcy Court.
Proofs of claim are due in the case by July 16, 2012.
Troy, Alabama-based Southern Forest Land, Inc., filed for Chapter
11 bankruptcy (Bankr. M.D. Ala. Case No. 12-10464) on March 20,
2012, listing $10 million to $50 million in both assets and debts.
Judge William R. Sawyer presides over the case. Collier H. Espy,
Jr., at Espy, Metcalf & Espy, P.C., serves as the Debtor's
counsel. The petition was signed by Grable L. Ricks, III,
president.
SQUARE 67: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Square 67 Limited Partnership
400 S. Zang, Suite 1220
Dallas, TX 75208
Bankruptcy Case No.: 12-31870
Chapter 11 Petition Date: March 27, 2012
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtor's Counsel: Mark MacDonald, Esq.
MACDONALD PLUS MACDONALD, P.C.
10300 N. Central Exprwy, Suite 335
Dallas, TX 75231
Tel: (214) 922-9050
Fax: (214) 890-0818
E-mail: mark@macdonaldlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $100,001 to $500,000
A copy of the Company's list of its 11 largest unsecured creditors
is available for free at http://bankrupt.com/misc/txnb12-31870.pdf
The petition was signed by Ralph Isenberg, Isenberg Management
Associates, Inc., general partner.
SP NEWSPRINT: Axis Crane Wants to Foreclose on Oregon Property
--------------------------------------------------------------
Parties-in-interest ask the U.S. Bankruptcy Court for the District
of Delaware for relief of automatic stay on SP Newsprint Holdings,
LLC, et al.'s assets to maintain the validity and priority of its
construction lien under Oregon law.
Specifically, Axis Crane, LLC, and Professional Mechanical, Inc.,
request stay relief to permit them to commence a foreclosure
action in Oregon state court.
Prepetition, Axis and PMI contracted with the Debtors to provide
services for SP Newsprint Co., LLC at the Debtors' property
located at 1301 Wynooski Street, Newberg, Oregon.
Axis completed its labor and crane services under contract on
Oct. 27, 2011. There remains due and owing $71,460 as of Jan. 6,
2012.
PMI completed its mechanical services under contract on Oct. 15,
2011. There remains due and owing under the contract $104,101 as
of Dec. 12, 2011.
The parties set an April 9, 2012, hearing at 11:00 (ET), on its
request for automatic stay. Objections, if any, are due April 2.
About SP Newsprint
Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog
Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers,
Southeastern Paper Recycling and SP Newsprint Merger LLC -- and
three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation
and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy
(Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011.
SP Newsprint Holdings LLC is a newsprint company controlled by
polo-playing mogul Peter Brant. It is one of the largest
producers of newsprint in North America. SP Recycling
Corporation, a Georgia corporation and the Debtors' other
operating company, was established in 1980 as a means for SP to
secure a ready supply of recycled fiber, a key raw material for
its newsprint.
SP Newsprint is the second Brant-owned newsprint company to tumble
into bankruptcy proceedings in recent years. Current and former
affiliated entities are Bear Island Paper Company, L.L.C., Brant
Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint,
Inc., White Birch Paper Company.
Judge Christopher S. Sontchi presides over the case. Joel H.
Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr.,
Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and
rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as
the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D.
Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at
Richards, Layton & Finger, P.A., serve as the Debtors' Delaware
counsel. AlixPartners LLP serves as the Debtors' financial
advisors and The Garden City Group Inc. serves as the Debtors'
claims and noticing agent. SP Newsprint Co., LLC, disclosed
$317,992,392 in assets and $322,674,963 in liabilities as of the
Chapter 11 filing. The petitions were signed by Edward D.
Sherrick, executive vice president and chief financial officer.
The Official Committee of Unsecured Creditors is represented by
Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its
Delaware counsel, and BDO Consulting serves as its financial
advisor.
STRATUM HOLDINGS: MaloneBailey LLP Raises Going Concern Doubt
-------------------------------------------------------------
Stratum Holdings, Inc., filed its annual report on Form 10-K for
the fiscal year ended Dec. 31, 2011.
MaloneBailey LLP, in Houston, expressed substantial doubt about
Stratum Holdings' ability to continue as a going concern. The
independent auditors noted that the Company has losses from
continuing operations and has a working capital deficit.
The Company reported net income of $2.7 million on $3.0 million of
oil and gas sales for 2011, compared with a net loss of $217,865
on $2.6 million of oil and gas sales for 2010. Income from
discontinued operations, net of income taxes, was $3.5 million for
2011 versus $302,000 for 2010.
The Company had an operating loss of $784,500 in 2011, compared
with an operating loss of $930,000 in 2010. Stratum generated net
profit in 2011 after generating a gain from discontinued
operations. The Company in June entered into a Stock Purchase
Agreement with a private company to sell the capital stock of its
Canadian Energy Services subsidiaries, Decca Consulting, Ltd. and
Decca Consulting, Inc., for a total sales price of $4.6 million
(plus a working capital adjustment). The Company recognized a
pre-tax gain from this sale in the year ended December 31, 2011 in
the amount of $2.69 million.
The Company's balance sheet at Dec. 31, 2011, showed $9.7 million
in total assets, $7.1 million in total liabilities, and
stockholders' equity of $2.6 million.
A copy of the Form 10-K is available for free at:
http://is.gd/27ZSj0
Stratum Holdings, Inc., is a holding company headquartered in
Houston, Texas, whose operations are presently focused on the
domestic Exploration & Production business. In that business, its
wholly-owned subsidiaries, CYMRI, L.L.C., and Triumph Energy,
Inc., own working interests in approximately 60 producing oil and
gas wells in Texas and Louisiana, with net production of
approximately 700 MCF equivalent per day.
Through June 3, 2011, the Company also operated in the Canadian
Energy Services business via its ownership of Decca Consulting,
Ltd., and Decca Consulting, Inc. On that date, it sold the
outstanding capital stock of Decca to a private company for a
total sales price of $4.6 million.
SUITE DREAMS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Suite Dreams America, Inc.
dba Hotel Chester
101 N. Jackson
Starkville, MS 39759
Bankruptcy Case No.: 12-11290
Chapter 11 Petition Date: March 27, 2012
Court: United States Bankruptcy Court
Northern District of Mississippi (Aberdeen)
Debtor's Counsel: Joseph N. Studdard, Esq.
STUDDARD LAW FIRM
P.O. Box 1346
Columbus, MS 39703
Tel: (662) 327-6744
E-mail: joe@studdardlaw.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with the petition.
The petition was signed by David Mollendor, president.
SUMMIT STREET: Case Summary & 6 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Summit Street Development Company, LLC
P.O. Box 12147
Lansing, MI 48901
Bankruptcy Case No.: 12-02865
Chapter 11 Petition Date: March 27, 2012
Court: United States Bankruptcy Court
Western District of Michigan (Grand Rapids)
Judge: James D. Gregg
Debtor's Counsel: Rozanne M. Giunta, Esq.
LAMBERT LESER ISACKSON COOK & GIUNTA PC
916 Washington Ave, Suite 309
Bay City, MI 48708
Tel: (989) 893-3518
E-mail: rmgiunta@lambertleser.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its six largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/miwb12-02865.pdf
The petition was signed by Harry H. Hepler, managing member.
SUNRISE REAL ESTATE: CFO Liu Zen Yu Resigns; Wang Hua Takes Over
----------------------------------------------------------------
Sunrise Real Estate Group, Inc.'s Chief Financial Officer, Mr. Liu
Zhen Yu, has submitted his resignation and approved by the Company
on March 23, 2012. His resignation was not due to any
disagreement with the Company or its management regarding any
matter relating to the Company's operations, policies or
practices.
On March 23, 2012, the Company appointed Mrs. Wang Wen Hua as the
interim CFO, who will hold the office from March 23 to April 15,
2012. Ms. Wang, 46 years old, has been with the Company,
specifically the Company's subsidiary, Shanghai Xi Ji Yang, since
its inception more than 10 years ago. She started with the
Company as a financial manager and later as a senior comptroller
since 2011.
On March 23, 2012, the Company also appointed Mr. Wang Wen Yan as
the CFO, effective on April 15, 2012. During the interim, Mr.
Wang will be preparing the first quarter financial report of the
Company as well participating in the day to day operation.
Mr. Wang, 32 years old, was previously the financial controller
and CFO of the Company. Mr. Wang had been with the Company since
May 2005 and left on March 17, 2011. He worked in a real estate
development company for 4 years before joining the Company. He
graduated from Shanghai University with a Bachelor's degree in
accounting and has a Master's degree at the Shanghai University of
Finance and Economics.
About Sunrise Real
Headquartered in Shanghai, the People's Republic of China, Sunrise
Real Estate Group, Inc. was initially incorporated in Texas on
Oct. 10, 1996, under the name of Parallax Entertainment, Inc.
On Dec. 12, 2003, Parallax changed its name to Sunrise Real
Estate Development Group, Inc. On April 25, 2006, Sunrise Estate
Development Group, Inc. filed Articles of Amendment with the Texas
Secretary of State, changing the name of Sunrise Real Estate
Development Group, Inc. to Sunrise Real Estate Group, Inc.,
effective from May 23, 2006.
The Company and its subsidiaries are engaged in the property
brokerage services, real estate marketing services, property
leasing services and property management services in China.
The Company also reported a net loss of US$2.04 million for the
nine months ended Sept. 30, 2011, compared with net profit of
US$492,320 for the same period a year ago.
The Company's balance sheet at Sept. 30, 2011, showed US$18.26
million in total assets, US$22.20 million in total liabilities,
US$1.04 million in non-controlling interests of consolidated
subsidiaries and a US$4.98 million total shareholders' deficit.
Going Concern
The Company has accumulated losses of $10,563,169 for the year
ended June 30, 2011. The Company's net working capital deficiency
and significant accumulated losses raise substantial doubt about
the Company's ability to continue as a going concern.
However, management believes that the Company is able to generate
sufficient cash flow to meet its obligations on a timely basis and
ultimately to attain successful operations in respect of the
agency sales and property management operations.
As reported by the TCR on April 21, 2011, Kenne Ruan, CPA, P.C.,
in Woodbridge, CT, USA, noted that the Company has significant
accumulated losses from operations and has a net capital
deficiency that raise substantial doubt about its ability to
continue as a going concern.
SUZANNE S. CLIFTON: Funds From Northwestern IRA Are Exempted
------------------------------------------------------------
Bankruptcy Judge Randy D. Doub denied the request of Walter L.
Hinson, the duly appointed Chapter 7 trustee for the estate of
Suzanne S. Clifton, to declare the funds in an Individual
Retirement Account with Northwestern Mutual Investment Services,
LLC, as not exempt and for turnover. The Court said the Chapter 7
Trustee failed to show the funds are not exempt.
Suzanne S. Clifton filed a voluntary Chapter 11 petition (Bankr.
E.D.N.C. Case No. 09-02379) on March 24, 2009. At the time the
petition was filed, the Debtor had an interest in a 401k plan
designated as The Castleton Group 401(k) Plan. The Debtor's
Schedule C, filed on April 8, 2009, claimed as exempt the 401(k)
Plan pursuant to N.C.G.S. Sec. 1C-1601(a)(9). Schedule C stated
the 401(k) Plan "funds have been frozen pursuant to Order entered
in Castleton Group Chapter 7 case." The Amended Schedule C filed
on March 8, 2012, listed the same asset as exempt. Castleton
Group, Inc., is a company that provides payroll and human
resources services to their clients. The Debtor is the President
of Castleton Group. Over 1,000 employees had 401(k) retirement
plans with Castleton Group. Transamerica Financial Life Insurance
Company provided recordkeeping and third-party administration
services with respect to Castleton Group. Castleton Group filed a
voluntary Chapter 7 petition (Bankr. E.D.N.C. Case No. 07-02896)
on Dec. 22, 2007.
On Sept. 14, 2011, the Debtor's case was converted to one under
Chapter 7 of the Bankruptcy Code and Walter L. Hinson was duly
appointed as the Chapter 7 Trustee. The 401(k) Plan was
determined to be an exempt asset pursuant to the Bankruptcy
Court's order entered on Feb. 15, 2012. At the hearing on March
12, 2012, the Debtor testified that in early January 2012, the
401(k) Plan funds were rolled over into an Individual Retirement
Account with Northwestern Mutual Investment Services, LLC. After
the rollover occurred, the Debtor withdrew funds from the
Northwestern IRA.
The Chapter 7 Trustee asserts that the Northwestern IRA was not
scheduled or disclosed to the Court and is a non-exempt asset.
The Trustee represents that the original investment in the
Northwestern IRA was $231,012 and that on Jan. 9, 2012, the Debtor
withdrew roughly $100,000 from the Northwestern IRA, leaving
$130,998 remaining in the Northwestern IRA.
The Chapter 7 Trustee contends that Northwestern is a custodian of
the invested funds, and should be directed to immediately turn
over the property of the estate to the Trustee as required by
Section 542 of the Bankruptcy Code. Further, the Trustee requests
the Court order the Debtor to tur nover the $100,000 that was
withdrawn from the Northwestern IRA.
In response, the Debtor contends the funds in the 401(k) Plan were
ERISA qualified and were claimed as exempt in the Debtor's
original schedules and that these funds were merely rolled over
into the Northwestern IRA in January 2012. Therefore, the Debtor
argues the funds continue to be exempt. Further, the Debtor
represents that the rollover contribution from the 401(k) Plan was
$181,012 and that in early January 2012, the Debtor withdrew
$50,000 from the account, not $100,000 as alleged by the Trustee.
At the hearing, the Debtor testified that the 401(k) Plan was
established around 1997 with Castleton Group. Over 1,000
employees had 401(k) retirement plans with Castleton Group. In
early 2008, the IRS froze the 401(k) plans for all participants.
The Debtor was unable to continue contributing to her 401(k) Plan
once it was frozen. In November of 2011, the participants were
notified that their 401(k) plans were unfrozen. Transamerica
provided the participants with forms to elect what they wished to
do with their 401(k) plan funds. The Debtor chose to roll her
401(k) Plan funds over to Northwestern in January 2012.
Northwestern did not have 401(k) plans, so the funds were rolled
over into an IRA.
The Debtor also testified she is 68 years of age and this is her
only retirement account. She testified that she withdrew $50,000
from the Northwestern IRA in January 2012, and she used the funds
for various expenses and bills.
A copy of the Court's March 26, 2012 Order is available at
http://is.gd/RwxvGvfrom Leagle.com.
TALON INTERNATIONAL: Reports $729,000 Net Income in 2011
--------------------------------------------------------
Talon International, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing net
income of $729,133 on $41.66 million of net sales for the year
ended Dec. 31, 2011, compared with a net loss of $1.46 million on
$41.46 million of net sales during the prior year.
The Company reported net income of $599,756 on $10.28 million of
net sales for the three months ended Dec. 31, 2011, compared with
a net loss of $23,687 on $8.97 million of net sales for the same
period a year ago.
The Company's balance sheet at Dec. 31, 2011, showed $16.36
million in total assets, $9.60 million in total liabilities,
$20.67 million in Series B convertible preferred stock, and a
$13.91 million total stockholders' deficit.
"Our sales results for 2011 were up modestly from the prior year,
as we added new brands reflecting strong growth in the second half
of the year, and overshadowed a soft first half due to increased
competition within the mass merchandiser market sector," noted
Lonnie Schnell, Talon's CEO. "For the full year 2011 we added in
excess of $6 million in sales from new products and private label
brands who chose Talon over former suppliers to serve their
apparel trim requirements going forward. In addition more than a
dozen new retailers nominated Talon in 2011 to become their zipper
supplier and these new nominations constituted approximately 10%
of our zipper sales for the year. These strategic gains in image-
focused specialty brands more than offset the decline we
experienced in the sales of price sensitive generic zippers and
trim products to non-branded mass merchandisers and licensing
customers who have targeted their purchases to the lowest cost
products available."
A copy of the Form 10-K is available for free at:
http://is.gd/xTqCl4
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.
TALON THERAPEUTICS: Incurs $18.8 Million Net Loss in 2011
---------------------------------------------------------
Talon Therapeutics, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $18.82 million for the year ended Dec. 31, 2011,
compared with a net loss of $25.98 million during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $2.48 million
in total assets, $30.86 million in total liabilities, $30.64
million in redeemable convertible preferred stock, and a $59.02
million total stockholders' deficit.
The Company does not generate significant recurring revenue and
has incurred significant net losses in each year since its
inception. The Company expects to incur substantial losses and
negative cash flow from operations for the foreseeable future, and
the Company may never achieve or maintain profitability.
BDO USA, LLP, in San Jose, California, noted that the Company has
suffered recurring losses from operations and has a net capital
deficiency that raise substantial doubt about its ability to
continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/AnfDBp
About Talon Therapeutics
Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc.
(TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical
company dedicated to developing and commercializing new,
differentiated cancer therapies designed to improve and enable
current standards of care. The company's lead product candidate,
Marqibo, potentially treats acute lymphoblastic leukemia and
lymphomas. The Company has additional pipeline
opportunities some of which, like Marqibo, improve delivery and
enhance the therapeutic benefits of well characterized, proven
chemotherapies and enable high potency dosing without increased
toxicity.
Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to
Talon Therapeutics Inc. The name change was effected by merging
Talon Therapeutics, Inc., a wholly-owned subsidiary of the
Company, with and into the Company, with the Company as the
surviving corporation in the merger.
TBS INTERNATIONAL: Wins Confirmation of Reorganization Plan
-----------------------------------------------------------
TBS International plc disclosed that the U.S. Bankruptcy Court for
the Southern District of New York has confirmed the Company's Plan
of Reorganization, paving the way for the reorganized Company's
expedited emergence from chapter 11 proceedings, less than 60 days
after its February 6 filing. The Plan reflects overwhelming
support from its voting lenders to restructure the Company's
secured debt and to pay in full in cash all allowed claims of
unsecured creditors, including all vendors. As a result, the
reorganized Company will emerge from its pre-packaged
restructuring with a healthy capital structure, including
approximately $40.0 million in new money financing provided by its
existing lenders, which will provide ample liquidity for the
Company and enable the Company to maintain its position as a
market leader in the shipping industry.
"We are very pleased with this extraordinary vote of confidence in
our long term sustainability provided by our lenders," said Joseph
E. Royce, Chairman, Chief Executive Officer and President. "We
look forward to renewing our focus on growing and managing our
business. As a result of this restructuring, our company will be
positioned to successfully compete in our global markets."
At emergence, the reorganized Company will have reduced its debt
by over $100 million since Sept. 30, 2011. Under the Plan, the
Debtor-in-Possession financing claims and pre-petition secured
debt will be restructured so as to provide new liquidity, extended
maturity dates, and other terms that are expected to ensure the
Company's future viability.
Most importantly, the Company has always and continues to be
committed to its customers and vendors. The Company will have
considerable flexibility to acquire strategic long and short term
charters, which will enable it to meet a wide variety of customer
needs going forward. In addition, all trade vendors will be paid
in full in cash for all allowed claims. In fact, the vast
majority of the Company's vendors have already been paid for all
amounts due and continue to maintain positive business relations
with TBS. Upon emergence from chapter 11, the Company will have
eliminated any possibility of valid vessel arrest due to the
bankruptcy process.
Gregg McNelis, Senior Executive Vice President and Chief Operating
Officer, remarked on the loyalty of key clients throughout the
restructuring process. "TBS has always put our customers first,
and we have deeply appreciated their continued support as we
worked with our lenders to restructure our bank facilities in the
current difficult operating environment. TBS is now positioned to
compete even more strongly and to meet all of our customers'
shipping logistics needs."
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reported earlier that TBS International Plc received approval from
the bankruptcy judge to sell the 30-year-old M.V. Mohawk Princess
for $3.85 million to NKD Maritime Ltd. TBS will apply the
proceeds to pay down a portion of the financing for the Chapter 11
case. The sale will enable the company to charter a newer vessel,
according to court papers.
About TBS International
TBS International plc, TBS Shipping Services Inc. and its various
subsidiaries and affiliates -- http://www.tbsship.com/-- filed
for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-22224)
on Feb. 6, 2012. TBS provides ocean transportation services that
offer worldwide shipping solutions to a diverse client base of
industrial shippers in more than 20 countries to over 300
customers. Through a 41-vessel fleet of multipurpose tweendeckers
and handysize and handymax dry bulk carriers, TBS, in conjunction
with a network of affiliated service companies, offers (a) liner,
parcel and bulk transportation services and (b) time charter
services.
TBS's global headquarters, located in Yonkers, New York, oversees
all major corporate and operational decision-making, including in
connection with drydocking of vessels and other capital
expenditures, fleet positioning, and cargo arrangements with third
parties, including major vendors and customers. As of the
Petition Date, TBS has roughly 140 employees worldwide, the vast
majority of whom work in the corporate headquarters. For the year
ended Dec. 31, 2011, TBS's consolidated net revenue was roughly
$369.7 million. Its consolidated debt is roughly $220 million.
TBS filed together with the petition its Joint Prepackaged Plan of
Reorganization dated Jan. 31, 2012. As of the Petition Date, the
Debtors have received overwhelming acceptance of the Plan from all
voting classes. If confirmed, the Plan will implement an agreed
restructuring of the Debtors' obligations to their prepetition
secured lenders, provide for the payment of all general unsecured
claims in full, and effect the cancellation of existing equity
interests at the parent holding company levels and the issuance of
new equity interests to certain of the Debtors' lenders and key
management. To implement this restructuring, the Debtors have
obtained commitments to provide $42.8 million in debtor-in-
possession financing and an equivalent amount of exit financing.
The Debtors are requesting a hearing to confirm the Plan within 35
days of the Petition Date.
Judge Robert D. Drain presides over the case. Michael A.
Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn &
Crutcher LLP, serve as the Debtors' counsel. The Debtors'
investment banker is Lazard Freres & Co. LLC, the financial
advisor is AlixPartners LLP. Cardillo & Corbett serves as special
maritime and corporate counsel, Garden City Group serves as
administrative agent and Gibson, Dunn & Crutcher as counsel.
The petition was signed by Ferdinand V. Lepere, executive vice
president and chief financial officer.
TBS disclosed US$143 million in assets and US$220 million in
debt.
No official committee has yet been appointed by the Office of the
United States Trustee.
THERMODYNETICS INC: Inks 9th Amendment to Baker Purchase Pact
-------------------------------------------------------------
Thermodynetics, Inc., on March 20, 2012, entered into the Ninth
Amendment to a May 2011 Purchase and Sale Agreement for the sale
by the Company, as the seller, of one of its real estate
properties: 50 Baker Hollow Road, Windsor, Connecticut.
The buyer was Baker Hollow Road, LLC, a Connecticut limited
liability company, with its principal offices at c/o 111 Broad
Brook Road, Enfield, Connecticut.
The Purchase Agreement provided for the sale of the Property for
the purchase price of $875,000 before fees, adjustments and
transaction expenses. The purchase price was paid at closing;
however a balance of $2,500 was placed in escrow pending a
property tax penalty appeal. The Company paid off its mortgage in
full which was secured by the Property with the proceeds.
A copy of the amendment is available for free at:
http://is.gd/llPauQ
About Thermodynetics
Thermodynetics, Inc., is engaged in managing its real estate and
business holdings, and investing in other companies. In June 2011
the Company acquired the rights to a software program that is to
be marketed in the wagering industry. The software is designed to
assist individuals in selecting winning wagers in horse racing
events.
The Company is currently in default on their line of credit and
its long-term mortgages. During June, 2010, the Company's bank
commenced two legal proceedings. Certain of the Company's assets
are being offered for sale which, upon consummation of a
successful sale, would be expected to cure the defaults.
THERMOENERGY CORP: Delays Form 10-K for 2011
--------------------------------------------
ThermoEnergy Corporation's annual report on Form 10-K for the
period ended Dec. 31, 2011, cannot be filed within the prescribed
time period because of delays due to a change in the Company's
independent public accounting firm late in the reporting period.
These delays could not be eliminated without unreasonable effort
or expense. The Company expects to file the Form 10-K within the
time period permitted by Rule 12b-25.
About ThermoEnergy Corporation
Little Rock, Ark.-based ThermoEnergy Corporation is a clean
technologies company engaged in the worldwide development of
advanced municipal and industrial wastewater treatment systems and
carbon reducing clean energy technologies.
As reported by the TCR on April 7, 2011, Kemp & Company, a
Professional Association, in Little Rock, Arkansas, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has incurred net losses since inception and will require
substantial capital to continue commercialization of the
Company's technologies and to fund the Companies liabilities.
The Company reported a net loss of $11.87 million on $3.57
million of revenue for the nine months ended Sept. 30, 2011,
compared with a net loss of $8.49 million on $2.05 million of
revenue for the same period a year ago.
The Company reported a net loss of $9.85 million in 2010,
following a net loss of $12.98 million in 2009.
The Company's balance sheet at Sept. 30, 2011, showed
$4.27 million in total assets, $11.09 million in total
liabilities, and a $6.81 million total stockholders' deficiency.
TMM HOLDINGS: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to TMM Holdings L.P. (Taylor Morrison), the parent
of operating subsidiaries Taylor Morrison Communities Inc. and
Monarch Communities Inc. The outlook is stable. "At the same time,
we assigned a 'BB-' issue-level rating and a '2' recovery rating
to the proposed offering of $500 million of senior unsecured notes
due 2020, co-issued by the operating subsidiaries and guaranteed
by the parent. The '2' recovery rating indicates prospects for
substantial recovery (70% to 90%) of principal in the event of a
payment default," S&P said.
"Our ratings on Scottsdale, Ariz.-based Taylor Morrison reflect
the company's 'weak' business risk profile," said credit analyst
Susan Madison. "Although Taylor Morrison is one of the larger
North American homebuilders, the homebuilding industry is very
fragmented and highly cyclical. Taylor Morrison has benefited from
its geographic diversity over the past few years, and the company
is one of the first of our rated homebuilders to return to
consistent profitability since the housing downturn, and its gross
margin of approximately 22% for full-year 2011 compares well
against its peers."
"Our stable outlook on Taylor Morrison reflects our expectation
that moderate improvement in U.S. home building operations will
temper the impact of lower Canadian high rise deliveries in 2012,
resulting in only a modest year-over-year deterioration in credit
metrics, which are currently stronger than those of its peers,"
S&P said.
TOUSA INC: Appeal Argued, One Lender-Defendant Settles
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Tousa Inc. received bankruptcy court approval of a
settlement where Monarch Alternative Capital LP will pay at least
$19.5 million to settle claims as one of the so-called senior
Transeastern lenders. If the creditors win an appeal argued this
week in the U.S. Court of Appeals in Atlanta, Monarch will be
liable to pay as much as $13 million more under the settlement
approved on March 21 by the U.S. Bankruptcy Court in Fort
Lauderdale, Florida. The settlement ends Monarch's involvement in
a lawsuit where it and senior Transeastern lenders won a victory
in February 2011 when the district court reversed the bankruptcy
judge and voided a fraudulent transfer judgment.
According to the report, Monarch, which now holds more than 43% of
the loans involved in the lawsuit, was exposed to paying $175
million if dismissal of the suit were overturned in the appeals
court. The suit involves allegations by creditors regarding a
$500 million secured loan made six months before bankruptcy. The
loan was taken down so Tousa could bail out and refinance a joint
venture in a homebuilder named Transeastern Properties Inc.
About Tousa Inc.
Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate
Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case
No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz,
Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in
New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman,
in Miami, Fla., represent the Debtors in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and
debts of $1 million to $10 million in its Chapter 11 petition.
The official committee of unsecured creditors has filed a proposed
chapter 11 liquidating plan for Tousa. However, the committee
said that it no longer intends to pursue approval of its
liquidation plan because of the pending appeal of its fraudulent
transfer case in the U.S. Court of Appeals for the Eleventh
Circuit. A district court in February 2011 held that the
bankruptcy judge was wrong in ruling that lenders who were paid
off received fraudulent transfers when Tousa gave liens on
subsidiaries' properties to bail out and refinance a joint
venture. Daniel H. Golden, Esq., and Philip C. Dublin, Esq., at
Akin Gump Strauss Hauer & Feld LLP, in New York, N.Y., represent
the creditors committee.
Tousa's reorganization plan is on hold either temporarily or
permanently pending appeal to the Court of Appeals from a ruling
by a U.S. district judge in February reversing the bankruptcy
judge. The district court held that the bankruptcy judge was
wrong in ruling that other lenders who were paid off before
bankruptcy received fraudulent transfers when Tousa gave liens on
subsidiaries' properties to bail out and refinance a joint
venture. The Tousa committee filed a Chapter 11 plan in July 2010
based on an assumption it would win the appeal.
TOWNSQUARE RADIO: Moody's Assigns 'B2' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating
("CFR") and a B2 Probability of Default Rating ("PDR") to
Townsquare Radio, LLC. Moody's also assigned B3, LGD4 -- 58%
ratings to the company's proposed $265 Million Senior Notes.
Proceeds from the new debt issuance will be used primarily to
refinance existing unrated debt. The rating outlook is stable.
Assignments:
Issuer: Townsquare Radio, LLC
Corporate Family Rating: Assigned B2
Probability of Default Rating: Assigned B2
New $265 Million Senior Notes: Assigned B3, LGD4 -- 58%
Outlook Actions:
Issuer: Townsquare Radio, LLC
Outlook is Stable
Ratings Rationale
The B2 corporate family rating reflects the company's high pro
forma debt-to-EBITDA ratio of 5.5x as of December 31, 2011
(including Moody's standard adjustments), risks associated with
assimilating recent mergers in combination with potential future
debt funded acquisitions, as well as the mature and cyclical
nature of radio advertising demand. Ratings are supported by the
company's leading revenue share (#1 or #2 rank in 40 of 43
markets) and audience ratings generated by defensible, well-
clustered stations. Management is focused on growing local
advertising revenues in small to mid-size markets with cross-
promotion capabilities using its digital and live events
businesses. Approximately two-thirds of its markets are ranked
between #100 and #300 by population, and Moody's believes that
competition is limited in these locations given Townsquare's peer
group, including deep-pocketed broadcasters, have chosen to
operate primarily in larger sized markets. Moody's expects
revenues and EBITDA to grow in the low to mid-single digit range
over the rating horizon, allowing for credit metrics including
debt-to-EBITDA leverage and interest coverage ratios to improve in
the absence of debt funded acquisitions. Townsquare is the largest
operator focused solely on serving small and mid-sized markets. In
contrast to traditional radio operators, executive management has
diverse media experience and does not come exclusively from legacy
broadcasters. Moody's believes management is focused on achieving
its operating targets and brings experience in revenue generation
from new media sources, including the Internet, evidenced by its
successful track record growing cellular/wireless businesses in
partnership with financial sponsors. Since being brought in to
replace executives of the predecessor company in May 2010,
management has acquired stations and generated organic revenue and
EBITDA growth. Liquidity is good with a minimum $10 million of
balance sheet cash, an undrawn $10 million revolver, and more than
4% free cash flow-to-debt ratios.
The B3 rating on the proposed unsecured senior notes is one notch
below the B2 loss given default model implied rating to reflect
Moody's expectation that Townsquare may raise incremental secured
credit facilities to fund additional station purchases, consistent
with management's acquisition strategy. Secured debt would rank
ahead of the new notes, and the B3 instrument rating incorporates
the company raising at least 40% of the amount permitted under the
debt agreements.
The stable outlook reflects Moody's view that revenue and EBITDA
will track management's plan particularly for stations in its key
markets within New Jersey, Texas and New York. The outlook also
incorporates Moody's expectation that debt-to-EBITDA ratios will
remain below 6.0x (including Moody's standard adjustments) over
the rating horizon with free cash flow-to-debt ratios of 4% or
more. The outlook does not incorporate dividends nor debt financed
transactions that would increase debt-to-EBITDA ratios above 6.0x.
Ratings could be downgraded if performance were to deteriorate due
to increased competition in one or more key markets or if debt
financed acquisitions were to result in EBITDA margin erosion or
debt-to-EBITDA ratios above 6.0x. Deterioration in liquidity could
also result in a downgrade. Ratings could be upgraded if debt-to-
EBITDA ratios are sustained below 5.0x with free cash flow-to-debt
ratios remaining above 7%. Liquidity would need to remain good and
Moody's would need assurances that the company will operate in a
financially prudent manner consistent with a higher rating.
The principal methodology used in rating Townsquare Radio, LLC was
the Global Broadcast Industry Methodology published in June 2008.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Townsquare Radio, LLC is a privately held media company that owns
and operates approximately 202 radio stations and related websites
in 43 small to mid-sized markets with the majority of stations
operating in markets ranked #100 -- #300 based on population.
Headquartered in Greenwich, CT, the predecessor company was
formerly known as Regent Communications and emerged from Chapter
11 protection in April 2010 with 60 stations in 13 markets.
Subsequent to emerging, the company acquired additional small to
mid-sized market stations from GAP Radio Broadcasting, Millennium
Radio Group, and Double O Corporation. Shareholders include prior
debt holders, the largest of which are Oaktree Capital, GE
Capital, and MSD Capital. Pro forma for the 2011 acquisitions,
revenues of Townsquare for the 12 months ended December 2011
totaled $202 million.
TRAILER BRIDGE: Has Until June 13 to Decide on Unexpired Leases
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extending until June 13, 2012, Trailer Bridge, Inc.'s time to
assume or reject unexpired leases of nonresidential real property.
About Trailer Bridge
Headquartered in Jacksonville, Florida, Trailer Bridge, Inc. --
http://www.trailerbridge.com/-- provides integrated trucking and
marine freight service to and from all points in the lower 48
states and Puerto Rico and Dominican Republic. This total
transportation system utilizes its own trucks, drivers, trailers,
containers and U.S. flag vessels to link the mainland with Puerto
Rico via marine facilities in Jacksonville, San Juan and Puerto
Plata.
Trailer Bridge filed a voluntary Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 11-08348) on Nov. 16, 2011, one day
after its $82.5 million 9.25% Senior Secured Notes became due.
Gardner F. Davis, Esq., at Foley & Lardner LLP, and DLA Piper LLP
(US) serve as the Debtor's counsel. Global Hunter Securities LLC
serves as the Debtor's investment banker. RAS Management Advisors
LLC serves as the Debtor's financial advisor. Kurtzman Carson
Consultants LLC serves as claims, noticing, and balloting agent.
The Debtor disclosed $97,345,981 in assets, and $112,538,934 in
liabilities.
On Dec. 6, 2011, the U.S. Trustee appointed an Official Committee
of Unsecured Creditors in the Debtor's case.
UNITED RETAIL: To Seek Approval of Sale to Versa April 3
--------------------------------------------------------
United Retail Group, Inc. is seeking court approval for the
acquisition of its operating business by an affiliate of Versa
Capital Management, LLC, the successful bidder.
Pending court approval by the U.S. Bankruptcy Court for the
Southern District of New York and the successful closing of the
transaction, Versa, a private equity firm with significant
experience in revitalizing retail operations, has agreed to
acquire a majority of the company's operating assets and to assume
certain liabilities all as set forth in an asset purchase
agreement signed on Feb. 1, 2012.
A hearing to consider approval of the sale is scheduled for
April 3, 2012 and the transaction is expected to close by mid-
April. Following the sale, Avenue's branded business will operate
under Versa's control while United Retail will remain in Chapter
11 to wind down its affairs and distribute the sale proceeds to
its pre-petition creditors.
United Retail Group Chief Executive Officer Dawn Robertson said,
"I have enjoyed developing the new strategy for Avenue and leading
it through the Chapter 11 proceedings and the sale process as
quickly as possible. Avenue's operating business is now
positioned on a sustainable path forward." Robertson will be
leaving United Retail Group to join another apparel company.
Versa has named Elizabeth Williams, a former member of Charming
Shoppes' leadership team and president of its Fashion Bug brand,
to serve as CEO of the new company following the closing. Jim
Smith, who serves as CFO of Bob's Stores, a Versa portfolio
company, will become Chief Financial Officer. Both managers have
a long history of successful retail turnaround experience.
"We are extremely pleased to complement our existing retail
portfolio with such a well-known brand in this growing segment of
women's fashion apparel," commented Gregory L. Segall, CEO of
Versa. "I want to thank Dawn Robertson personally for her
tireless work and pivotal role in taking this business through a
challenging transition. We wish Dawn well and know she will be
successful in her next venture as well."
Segall continued, "At the same time, we are very pleased to be
able to bring in such high-caliber retail professionals as Liz
Williams and Jim Smith to ensure a smooth transition and great
start for the new company. Both Liz and Jim will serve on an
interim basis until completion of a search for permanent senior
management for this business. We expect to conduct the searches
in the near future and both Liz and Jim will be actively
considered as candidates for their respective roles. In the
meantime, we are excited about the prospects for the Avenue stores
and anticipate exploring new opportunities to better serve its
customers nationwide."
United Retail Group's chief executive officer, Dawn Robertson,
comments, "I have enjoyed developing the new strategy for Avenue
and leading it through the Chapter 11 proceedings and the sale
process as quickly as possible. Avenue's operating business is now
positioned on a sustainable path forward." Robertson will be
leaving United Retail Group to join another apparel company."
Versa has named Elizabeth Williams, a former member of Charming
Shoppes' leadership team and president of its Fashion Bug brand,
to serve as C.E.O. of the new company following the closing. Jim
Smith, who serves as C.F.O. of Bob's Stores, a Versa portfolio
company, will become chief financial officer. Both managers have a
long history of successful retail turnaround experience.
United Retail Group is advised by legal advisor Kirkland & Ellis
LLP; financial advisor Peter J. Solomon Company; and restructuring
advisor AlixPartners. Versa Capital's legal advisor is Sullivan &
Cromwell LLP.
Auction Cancelled
The Debtors related that they had canceled the March 23, auction
since no competing qualified bids were received for the Debtors'
assets before the March 20, bid deadline.
The assets will be sold pursuant to the terms of an Asset Purchase
Agreement, dated as of Feb. 1, 2012, by and among the Debtors,
their parent Redcats USA Inc., and the Versa affiliate.
The Versa deal is valued at roughly $83.5 million.
The Debtors also propose to hand over to the Versa unit the right
to act as liquidating agent in connection with the disposition of
merchandise contained in any of the Stores that cannot be sold on
a going concern basis pursuant to the terms substantially set
forth in a Sales Agency Agreement, dated as of Feb. 1, 2012, by
and among the Debtors, the Stalking Horse Bidder, and Versa.
The Debtors will also assume and assign certain executory
contracts and unexpired leases to the Buyer.
The sale proceeds will be used first to repay the Debtors'
obligations under the Wells Fargo DIP facility. Wells Fargo has a
first-priority in substantially all of the Debtors' assets. Wells
Fargo's consent to the Sale was conditioned on this right.
About Versa Capital Management
Versa Capital Management, Inc. --http://www.versa.com/-- is a
private equity investment firm with $1.2 billion of assets under
management and is focused on control investments in special
situations involving middle market companies in a variety of
industries across the United States.
About United Retail Group
United Retail Group Inc., owner of the Avenue brand of women's
fashion apparel and a subsidiary of Redcats USA, sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1,
2012, as it seeks to sell the business to Versa Capital Management
for $83.5 million, subject to higher and better offers.
The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners
LLP serves as restructuring advisor and Peter J. Solomon Company
serves as financial advisor and investment banker; and Donlin
Recano & Company Inc. is the notice, claims and administrative
agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP.
Avenue has 433 stores and an e-commerce site --
http://www.avenue.com/. Avenue employs roughly 4,422 employees,
roughly 294 of which are located at Avenue's corporate
headquarters in Rochelle Park, New Jersey or at the Troy
Distribution Facility. The Company disclosed $117.2 million in
assets and $67.3 million in liabilities as of the Chapter 11
filing.
Cooley LLP serves as counsel for the Official Committee of
Unsecured Creditors.
UNITED RETAIL: Court Sets April 27, 2012 Claims Bar Date
--------------------------------------------------------
The U.S. Bankruptcy Court Southern District of New York has
established April 27, 2012, at 5:00 p.m. (Eastern Time) as the
deadline for any individual or entity to file proofs of claim
against United Retail Group, Inc., et al.
The Court also set 5:00 p.m. Eastern Time on July 30, as the
governmental bar date.
Each proof of claim must be filed, including supporting
documentation, by U.S. mail, overnight mail or other hand delivery
system, so as to be actually received on or before the applicable
bar date in accordance with this Bar Date Order, at one of these
addresses:
If delivered by first-class U.S. mail:
Donlin, Recano & Company, Inc.
Re: United Retail Group, Inc., et al.
P.O. Box 2007
Murray Hill Station
New York, NY 10156
If delivered by overnight mail:
Donlin, Recano & Company, Inc.
Re: United Retail Group, Inc., et al.
419 Park Avenue South, Suite 1206
New York, NY 10016
If delivered by hand delivery:
Donlin, Recano & Company, Inc.
Re: United Retail Group, Inc., et al.
419 Park Avenue South, Suite 1206
New York, NY 10016
The United States Bankruptcy Court for the Southern
District of New York
One Bowling Green, Room 534
New York, New York 10004
About United Retail Group
United Retail Group Inc., owner of the Avenue brand of women's
fashion apparel and a subsidiary of Redcats USA, sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1,
2012, as it seeks to sell the business to Versa Capital Management
for $83.5 million, subject to higher and better offers.
The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners
LLP serves as restructuring advisor and Peter J. Solomon Company
serves as financial advisor and investment banker; and Donlin
Recano & Company Inc. is the notice, claims and administrative
agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP.
United Retail has arranged a $40 million Debtor-in-Possession
facility from its existing revolving credit lender, Wells Fargo,
to provide sufficient working capital for Avenue to continue to
operate the business as usual. Wells Fargo is represented in the
case by Jonathan N. Helfat, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C.
Avenue has 433 stores and an e-commerce site --
http://www.avenue.com/. Avenue employs roughly 4,422 employees,
roughly 294 of which are located at Avenue's corporate
headquarters in Rochelle Park, New Jersey or at the Troy
Distribution Facility. The Company disclosed $117.2 million in
assets and $67.3 million in liabilities as of the Chapter 11
filing.
USG CORP: Matthew Hilzinger Succeeds Richard Fleming as EVP & CFO
-----------------------------------------------------------------
USG Corporation elected Matthew F. Hilzinger to the position of
executive vice president and chief financial officer, effective
May 1, 2012. Mr. Hilzinger, former senior vice president and
chief financial officer with Exelon Corporation, succeeds Richard
H. Fleming, who will remain with USG as Executive Vice President
until his expected retirement later this year.
Mr. Hilzinger will serve as USG's chief financial officer,
overseeing the execution all financial activities including
financial reporting, treasury, risk management, tax, and investor
relations, and will also oversee strategic planning and IT.
James S. Metcalf, Chairman, President and Chief Executive Officer
of USG commented, "We are thrilled to have Matt join our team. He
is a talented, experienced and highly regarded financial executive
who will certainly contribute to the success of the company's
growth strategy. He will be a strong successor to Rick Fleming,
who has been a major contributor to USG's many successes for more
than 30 years."
Mr. Hilzinger, 48, became senior vice president and chief
financial officer of Exelon Corporation in January 2008 after
joining Exelon as vice president and corporate controller in April
2002. Most recently, he has been executive vice president and
chief integration officer, responsible for the merger-related
integration of Exelon and Constellation Energy. Mr. Hilzinger's
career spans more than twenty years of financial and operating
experience in a variety of international and domestic operations.
Prior to joining Exelon, Mr. Hilzinger was with Kmart Corporation
in Troy, Michigan where he held a number of financial positions
including vice president, controller, assistant treasurer and
divisional vice president, logistics finance and planning. Prior
to Kmart, Hilzinger held various financial and operating positions
at Handleman Company, also in Troy, Michigan. Mr. Hilzinger began
his career at Arthur Andersen & Co. in Detroit.
Mr. Hilzinger received his bachelor's of business administration
degree in 1985 from the University of Michigan in Ann Arbor and
received his certification as a certified public accountant in
1987.
Mr. Hilzinger's initial base salary will be at an annual rate of
$525,000. Effective April 16, 2012, Mr. Hilzinger will receive
awards under the Company's Long-Term Incentive Plan of
nonqualified stock options, restricted stock units and performance
shares having an aggregate grant date value of $2,500,000.
About USG Corporation
Based in Chicago, Ill., USG Corporation -- http://www.usg.com/--
through its subsidiaries, manufactures and distributes building
materials producing a wide range of products for use in new
residential, new nonresidential and repair and remodel
construction, as well as products used in certain industrial
processes.
The company filed for Chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). When the Debtors filed for
protection from their creditors, they disclosed $3,252,000,000 in
assets and $2,739,000,000 in debts. The Debtors emerged from
bankruptcy protection on June 20, 2006.
The Company reported a net loss of $390 million in 2011 and a net
loss of $405 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $3.71 billion
in total assets, $3.56 billion in total liabilities and $156
million in total stockholders' equity.
* * *
As reported by the TCR on Aug. 15, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on USG Corp. to 'B'
from 'B+'.
"The downgrade reflects our expectation that USG's operating
results and cash flow are likely to be strained over the next year
due to the ongoing depressed level of housing starts and still-
weak commercial construction activity," said Standard & Poor's
credit analyst Thomas Nadramia. "It is now more likely, in
our view, that any meaningful recovery in housing starts may be
deferred until late 2012 or into 2013. As a result, the risk that
USG's liquidity in the next 12 to 24 months will continue to erode
(and be less than we incorporated into our prior ratings) has
increased. The ratings previously incorporated a greater
improvement in housing starts, which would have enabled USG to
reduce its negative operating cash flow in 2012 and achieve
breakeven cash flow or better by 2013."
In the Sept. 14, 2011, edition of the TCR, Fitch Ratings has
downgraded USG Corporation's Issuer Default Rating (IDR) to 'B-'
from 'B'. The Rating Outlook remains Negative.
The ratings downgrade and the Negative Outlook reflect Fitch's
belief that underlying demand for the company's products will
remain weak through at least 2012 and the company's liquidity
position is likely to deteriorate in the next 18 months. With the
recent softening in the economy and lowered economic growth
expectations for 2011 and 2012, the environment may at best
support a relatively modest recovery in housing metrics over the
next year and a half. Fitch had previously forecast a slightly
more robust housing environment in 2011 and 2012. Moreover, new
commercial construction is expected to decline further this year
and may only grow moderately next year.
USG CORP: Launches Private Offering of $250-Mil. Sr. Notes
----------------------------------------------------------
USG Corporation launched a private offering of $250 million
aggregate principal amount of senior notes. The New Notes will be
the unsecured obligations of USG. USG's obligations under the New
Notes will be guaranteed on a senior unsecured basis by certain of
its domestic subsidiaries.
USG intends to use all or a portion of the net proceeds from the
sale of the New Notes to repurchase its outstanding 9.75% Senior
Notes due 2014 that are tendered pursuant to the cash tender offer
that USG commenced on March 14, 2012, and to pay all related costs
and expenses. As of March 27, 2012, approximately $117.9 million
principal amount of the outstanding 2014 Notes had been validly
tendered in the tender offer. After repurchasing 2014 Notes
pursuant to the tender offer, USG intends to use any remaining net
proceeds from the sale of the New Notes for working capital and
other general corporate purposes, which may include the repurchase
or other acquisition of 2014 Notes or USG's other outstanding
indebtedness through open market purchases, privately negotiated
transactions, redemptions, other tender offers or otherwise.
The New Notes will be offered and sold only to qualified
institutional buyers in accordance with Rule 144A under the
Securities Act of 1933, as amended, and to non-U.S. persons in
accordance with Regulation S under the Securities Act. When
issued, the New Notes will not have been registered under the
Securities Act or 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 USG Corporation
Based in Chicago, Ill., USG Corporation -- http://www.usg.com/--
through its subsidiaries, manufactures and distributes building
materials producing a wide range of products for use in new
residential, new nonresidential and repair and remodel
construction, as well as products used in certain industrial
processes.
The company filed for Chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). When the Debtors filed for
protection from their creditors, they disclosed $3,252,000,000 in
assets and $2,739,000,000 in debts. The Debtors emerged from
bankruptcy protection on June 20, 2006.
The Company reported a net loss of $390 million in 2011 and a net
loss of $405 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $3.71 billion
in total assets, $3.56 billion in total liabilities, and
stockholders' equity of $156 million.
* * *
As reported by the TCR on Aug. 15, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on USG Corp. to 'B'
from 'B+'.
"The downgrade reflects our expectation that USG's operating
results and cash flow are likely to be strained over the next year
due to the ongoing depressed level of housing starts and still-
weak commercial construction activity," said Standard & Poor's
credit analyst Thomas Nadramia. "It is now more likely, in
our view, that any meaningful recovery in housing starts may be
deferred until late 2012 or into 2013. As a result, the risk that
USG's liquidity in the next 12 to 24 months will continue to erode
(and be less than we incorporated into our prior ratings) has
increased. The ratings previously incorporated a greater
improvement in housing starts, which would have enabled USG to
reduce its negative operating cash flow in 2012 and achieve
breakeven cash flow or better by 2013."
In the Sept. 14, 2011, edition of the TCR, Fitch Ratings has
downgraded USG Corporation's Issuer Default Rating (IDR) to 'B-'
from 'B'. The Rating Outlook remains Negative.
The ratings downgrade and the Negative Outlook reflect Fitch's
belief that underlying demand for the company's products will
remain weak through at least 2012 and the company's liquidity
position is likely to deteriorate in the next 18 months. With the
recent softening in the economy and lowered economic growth
expectations for 2011 and 2012, the environment may at best
support a relatively modest recovery in housing metrics over the
next year and a half. Fitch had previously forecast a slightly
more robust housing environment in 2011 and 2012. Moreover, new
commercial construction is expected to decline further this year
and may only grow moderately next year.
VERENIUM CORP: Receives $37 Million from Sale of Assets to DSM
--------------------------------------------------------------
Verenium Corporation filed with the U.S. Securities and Exchange
Commission an amendment to its Tender Offer Statement on Schedule
TO relating to the right of each holder of the Company's 5.5%
Convertible Senior Notes due 2027, to sell and the obligation of
the Company to repurchase the Notes pursuant to the terms of and
subject to the conditions set forth in the Indenture, dated as of
March 28, 2007, between the Company and Wells Fargo Bank, National
Association, as trustee.
On March 26, 2012, the Company received aggregate consideration of
$37 million in connection with its sale of certain of its assets
related to its oil seed processing business to DSM Food
Specialties B.V. Proceeds from the Asset Sale Transaction will be
used by the Company to fund its repurchase of the Notes upon the
exercise by any Holder of the Put Option.
Going Concern
The Company had a loss from operations of $6.5 million for year
ended Dec. 31, 2011, and had an accumulated deficit of $600.8
million as of Dec. 31, 2011. The holders of the 2007 Notes have
the right to require the Company to purchase the 2007 Notes for a
total cash amount equal to $34.9 million on April 2, 2012, plus
accrued and unpaid interest to that date. The Company expects the
holders of the 2007 Notes to exercise this right and, based on the
Company's current cash resources and 2012 operating plan, the
Company's existing cash resources will not be sufficient to meet
the cash requirements to fund the Company's required repurchase of
the 2007 Notes, planned operating expenses, capital expenditures
and working capital requirements without additional sources of
cash.
If the Company is unable to fund the repurchase of the 2007 Notes
when required or otherwise raise additional capital, the Company
will need to defer, reduce or eliminate significant planned
expenditures, restructure or significantly curtail the Company?s
operations, sell some or all its assets, file for bankruptcy or
cease operations.
To the extent the Company restructures rather than repurchases all
or any portion of the 2007 Notes, the Company may issue common
shares or other convertible debt for the 2007 Notes that are
restructured, which would result in substantial dilution to the
Company's equityholders. There can be no assurance that the
Company will be able to obtain any sources of financing on
acceptable terms, or at all.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
A copy of the amendment is available for free at:
http://is.gd/fYnWG1
About Verenium Corporation
Cambridge, Mass.-based Verenium Corporation (NASDAQ: VRNM) --
http://www.verenium.com/-- is a pioneer in the development and
commercialization of high-performance enzymes for use in
industrial processes. Verenium currently sells enzymes developed
using its R&D capabilities to industrial customers globally for
use in markets including biofuels, animal health and oil seed
processing.
As of Dec. 31, 2011, Verenium had $65.3 million in total assets
and $55.4 million in total liabilities ad $9.9 million in total
stockholders' equity.
The Company reported net income of $5.12 million in 2011 compared
with a net loss of $5.35 million in 2010.
W.R. GRACE: Proposes to Settle Claims Over High Point Site
----------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates seek authority from
Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware to enter into a settlement resolving the U.S.
Government's claim related to the High Point, North Carolina site.
Zonolite operated a vermiculite exfoliation plant at the 2.65-acre
High Point Site as early as 1955. The Debtors operated the
facility from 1963 until 1989. On November 30 and December 1,
2009, the U.S. Environmental Protection Agency and its Superfund
Technical Assistance and Response Team contractor conducted
aggressive air sampling, activity-based air sampling, and bulk
material sampling at the High Point Site. Additional bulk soil
sampling was conducted on March 21, 2011.
On November 29, 2011, the EPA notified the Debtors that it
considered the Debtors to be potentially responsible parties with
respect to removal activities and response costs at the High Point
Site, as well as potentially responsible parties for any and all
other claims, liabilities or obligations of the Debtors to the
Claimant under Section 107(a) of the Comprehensive Environmental
Response, Compensation, and Liability Act and Section 7003 of the
Resource Conservation and Recovery Act. The EPA also notified the
Debtors that it considered the High Point Site to be an
"Additional Site," as that term is defined in EPA's multi-site
agreement resolving the United States Claims regarding certain
environmental matters, dated May 14, 2008.
Since receiving the November 29 notice, the Debtors and the EPA
have cooperated in preparing the Administrative Settlement
Agreement and Order on Consent, which anticipates that the Debtors
will perform removal actions on the Site. Laura Davis Jones,
Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington,
Delaware, relates that the Parties now desire, without any
admission of fact, law or liability, to proceed with a remedy for
environmental remediation of the High Point Site and resolve the
EPA's claims and demands relating to the High Point Site.
The AOC specifically resolves (a) the EPA's claims for the High
Point Site as an Additional Site under the Multi-Site Agreement,
and (b) the demands for performance of or, alternatively payment
of costs associated with, the proposed Work as set forth in the
AOC.
The EPA estimates its cost to perform the remedial actions at the
High Point Site to be approximately $1.7 million. The Debtors'
cost estimate for the same work is estimated to be less than
$1 million. The Debtors have also agreed under the AOC to pay
$131,825 to the EPA for its past response costs incurred through
January 13, 2012. The AOC further provides that the Debtors will
pay EPA's future response costs as they become due, within 30 days
of their having received a bill for the Future Response Costs.
In return for the obligations to be assumed by the Debtors under
the AOC, the Government will provide the Debtors with a covenant
not to sue for matters addressed under the AOC. Additionally, and
also pursuant to the terms of the AOC and the EPA Multi-Site
Agreement, once the EPA issues a Notice of Completion of Work and
the Debtors pay all Response Costs and other amounts required to
be paid under the AOC, the High Point Site removal action will be
considered a general unsecured claim that has been liquidated in
the amount of $0, and to which the Section 1141 discharge of the
Bankruptcy Code will apply.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Wins Court OK for Otis Pipeline Settlement
------------------------------------------------------
Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware granted in its entirety the request of W.R.
Grace & Co. and its debtor affiliates for authority to enter into
and perform under a consent decree with the U.S. Government and a
settlement with private parties relating to a jet fuel and
aviation gasoline pipeline called the Otis Pipeline.
The parties to the Consent Decree and the Private Parties
Settlement are:
-- Debtors W.R. Grace & Co., W.R. Grace & Co.-Conn., and Grace
Energy Corporation;
-- the U.S. Government, including the U.S. Air Force, the U.S.
Army and other agencies, branches and department of the
federal government;
-- NuStar Pipeline Operating Partnership L.P., f/k/a Kaneb
Pipeline Operating Partnership, NuStar Energy L.P., NuStar
Terminals Services, f/k/a Support Terminal Services, Inc.,
and NuStar Terminals Operations Partnership L.P.; and
-- Samson Investment Company and SGH Enterprises, Inc., f/k/a
Samson Hydrocarbons Company.
Upon confirmation and the effective date of the Plan of
Reorganization, Judge Fitzgerald authorized the Reorganized
Debtors to execute, perform, comply with, and consummate the
Private Parties Agreement and the Consent Decree and any related
settlement documents.
The Settlement fully and finally resolves longstanding disputes
among the Parties with respect to certain alleged environmental
contamination and response costs in connection with a site on Cape
Cod, Massachusetts, according to the Debtors' counsel, Adam Paul,
Esq., at Kirkland & Ellis LLP, in Chicago, Illinois.
The Dispute
The dispute concerns certain hydrocarbon-related contaminants in
the sole source aquifer for Cape Cod, Massachusetts. The U.S.
Government alleges that a jet fuel and aviation gasoline pipeline,
known as the Otis Pipeline, running from a terminal at the Cape
Cod Canal to the Otis Air Force Base on the Massachusetts Military
Reservation spilled fuel in at least two locations at the MMR in
the late 1960s or early 1970s and that the fuel contaminated the
groundwater. The MMR and areas into which contamination has
migrated therefrom have been designated a federally-listed
Superfund site. The U.S. Government alleges that two of the
plumes of contamination, called FS-12 and FS-13, originated from
the pipeline at the MMR and have impacted and are impacting
groundwater flowing under or off the MMR.
The United States military, under the direction of the National
Guard Bureau and the Air Force Center for Engineering and the
Environment, formerly known as the Air Force Center for
Environmental Excellence, have installed expensive air sparging
and pump-and-treat systems to extract contaminants, like ethylene
dibromide and benzene, from the groundwater, Mr. Paul tells the
Court.
The pipeline and terminal were built in 1965 and operated by
Standard Transmission Corporation, which was acquired by Cleary
Petroleum Corporation in 1971. Through several corporate
transactions, Cleary became a subsidiary of W. R. Grace & Co.-
Conn., and later became a subsidiary of Debtor Grace Energy
Corporation. In 1978, Grace allegedly transferred assets relating
to the military pipeline business of the Standard Transmission
Division of Cleary to Standard Transpipe Corp., a newly formed
subsidiary. Cleary later changed its name to Grace Petroleum
Corporation.
In 1993, Grace Energy sold Standard Transpipe Corp. to Kaneb
Pipeline Operating Partnership, L.P., which transaction involved
the merger of Standard Transpipe into Support Terminal Services,
Inc., and the sale of Support Terminal to Kaneb Pipeline Operating
Partnership, L.P. Support Terminal is now known as NuStar
Terminals Services, Inc., and Kaneb Pipeline is now known as
NuStar Pipeline Operating Partnership L.P. Also in 1993, Grace
Energy sold Grace Petroleum to Samson Investment Company. Grace
Petroleum changed its name to Samson Natural Gas Company. Samson
Natural Gas changed its name to SNG Production Company. SNG
Production changed its name to Samson Hydrocarbons Company, which
also changed its name to SGH Enterprises, Inc.
In the 1990s, the federal government began addressing the
contamination allegedly associated with FS-12 and FS-13. The
Government alleges that the federal government has spent in excess
of $54 million to date investigating and remediating the FS-12
groundwater contamination and that the present value of what it
will continue to spend in the future is approximately $17 million,
for a total of more than $70 million attributable to
FS-12. The Government also alleges that the federal government
has incurred substantial costs relating to FS-13. The Government
adds that Standard Transmission "caused" the contamination within
the meaning of the Massachusetts Oil and Hazardous Material
Release Prevention Act. The Government further alleges that
NuStar TS and Samson Hydrocarbons, as successors of Standard
Transpipe Corp. and Grace Petroleum, are jointly and severally
liable for the entire costs of this remedial effort.
Samson Hydrocarbons argues that Grace Energy's contract for the
sale of Grace Petroleum to Samson Investment, as well as other
agreements, contain indemnity provisions requiring indemnity for
the claims made by the U.S. Government. Samson Hydrocarbons filed
several proofs of claim against Grace in the Debtors' bankruptcy
cases identified Claim Nos. 13946, 13947, 18518, 18520, 18521,
18526, and 18527, as amended. In its claims, Samson Hydrocarbons
asserts indemnity claims against the Debtors for, among other
things, the full amount of the U.S. Government's Otis Pipeline
claim, for any other claim arising out of the Otis Pipeline
facilities or operations, and for defense costs. Samson
Hydrocarbons also asserts claims unrelated to the Otis Pipeline,
which are not the subject of this Motion.
Grace Energy brought a lawsuit against Kaneb Pipe Line Operating
Partnership, L.P. and Support Terminal Services, Inc., claiming
that the liabilities associated with the Otis Pipeline are owned
by and the responsibility of Kaneb and its affiliates, as the
successors of Standard Transmission Corporation and all of its
liabilities. After a partial summary judgment and a successful
jury trial in 2000, Grace Energy obtained a judgment against
Kaneb, et al., declaring that the Otis Pipeline assets and
liabilities, if any, were conveyed to what is now a NuStar entity.
Kaneb, et al., appealed the judgment, and Grace Energy also
appealed to complain about certain aspects of the judgment. The
appeal was abated due to the Grace bankruptcy proceeding.
In 2001-2002, the U.S. Department of Justice on behalf of the
Government, sent letters to counsel for Samson Hydrocarbons and
NuStar TS stating that it would file a lawsuit against them in
Boston, Massachusetts, to recover all costs incurred in connection
with the cleanup of FS-12 and FS-13 and indicating that the U.S.
would be willing to engage in settlement negotiations. The
Massachusetts General Laws require that parties to a cleanup
dispute confer in good faith prior to the plaintiff bringing a
lawsuit. To comply with the good faith requirements of the
statute, the Parties agreed to mediate. The Government, Grace,
Samson Hydrocarbons, and NuStar selected a mediator and engaged in
mediation involving multiple meetings and a site visit, spanning
July, August, September, and October 2009. Ultimately the parties
were successful in negotiating a settlement, which is embodied in
the Consent Decree and the Private Parties Agreement.
Proposed Settlement
Among other things, the Consent Decree:
(a) resolves the U.S. Government's claims and potential claims
against the Private Parties for the matters addressed in
the Consent Decree relating to the Otis Pipeline, by
providing a covenant not to sue by the U.S. Government for
those matters in exchange for the payment to the U.S.
Government of $21,000,000, plus interest from November 15,
2009, through the date of payment;
(b) resolves Samson Hydrocarbons' claims for indemnification
by Grace for claims and potential claims of the U.S.
Government against Samson Hydrocarbons relating to the
Otis Pipeline by providing that, upon the effective date
of the Consent Decree, Samson Hydrocarbons will have the
Samson Hydrocarbons Allowed Otis Claim against Grace for
$7,440,000, plus interest from November 15, 2009, through
the date of payment, which Samson Hydrocarbons will assign
to the U.S. Government; and
(c) provides for the funding of the settlement payment to the
U.S. Government as:
* NuStar will pay $11,700,000, plus applicable interest;
* Grace will pay $7,440,000, plus applicable interest, in
fulfillment of the Samson Hydrocarbons Allowed Otis
Claim; and
* Samson Hydrocarbons will pay $1,860,000, plus applicable
interest, all payments as directed by the Consent Decree
and Private Parties Agreement and liability for each
payment being several and not joint.
The Private Parties Agreement resolves all differences among the
Debtors, the NuStar Entities and the Samson Entities arising out
of their claims relating to Otis Pipeline liabilities in return
for, among other things, the arrangement by which the monetary
obligations to the federal government will be funded by the
Debtors, Samson Hydrocarbons, and NuStar. The Private Parties
Agreement also contains agreements concerning potential future
liabilities, if any, related to the Otis Pipeline.
Grace Energy and Kaneb will file a motion with the Texas appellate
court asking that the judgment in the Kaneb lawsuit be vacated and
the case dismissed, ending a 13 year-long litigation. NuStar will
also withdraw its objection to the Debtors' plan of
reorganization. Part of the consideration being paid by the
Debtors towards the Consent Decree settlement is specifically for
NuStar's agreement, with respect to the Otis Pipeline and the MMR,
not to pursue any rights under any insurance policies NuStar had
or believed it had as successor of Grace's former subsidiary.
NuStar contends that those policies might provide it defense,
indemnity or other rights relating to Otis Pipeline liabilities.
NuStar has filed a motion to lift stay in the Bankruptcy Court,
which was denied without prejudice, to pursue coverage under some
25 insurance policies, many of which have been settled pursuant to
agreements containing claw-back provisions which, in the event the
insurer pays any claims to NuStar, would entitle the insurer to
seek repayment of the amounts paid from the Debtors.
All disputes among the Debtors, NuStar and Samson Hydrocarbons
pertaining to the claims of the Government against NuStar and
Samson Hydrocarbons that in general terms relate to (i) the
construction, installation, operation of and abandonment of the
Otis Pipeline which is located, in part, on a portion of the MMR;
(ii) alleged releases from the Otis Pipeline; (iii) remediation of
the releases that the U.S. attributes to the Otis Pipeline, and
(iv) all U.S. natural resource damage claims related to the Otis
Pipeline, including the disputes relating to the portion of Samson
Hydrocarbons Otis Pipeline Related Claims pertaining to the U.S.
Claims, and methods for handling future claims, are also settled
and resolved.
Samson Hydrocarbons is granted an allowed claim for $7.44 million
on account of the portion of the Samson Hydrocarbons Proofs of
Claim pertaining to the U.S. Claims bearing interest from November
15, 2009, through the date of payment, compounded annually, which
will be assigned to the U.S. under the terms set forth in the
Consent Decree and the Private Parties Agreement. Likewise, all
disputes between NuStar and Samson Hydrocarbons relating to the
U.S. Claims are resolved.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Libby Claimants Back Changes to Jan. 30 Plan Order
--------------------------------------------------------------
The so-called Libby Claimants have expressed their support to the
motion filed by plan proponents, namely, W.R. Grace & Co. and its
debtor affiliates, the Official Committee of Equity Security
Holders, the Official Committee of Asbestos-related Personal
Injury Claimants, and the Future Claims Representative, to amend
Judge Ronald L. Buckwalter's January 30, 2012 memorandum decision
affirming the Debtors' Joint Plan of Reorganization. The motion
seeks, inter alia, to amend the District Court's analysis of their
jury trial rights contained in the Memorandum Opinion to remove
all references therein to an incorrect premise -- that the Libby
Claimants have the right to elect, in lieu of receiving a
distribution from the Asbestos PI Trust established under the
Plan, to recover from Grace by obtaining a jury trial in the tort
system.
The Libby Claimants said they agree with the Plan Proponents that
this premise is indeed incorrect.
Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington,
Delaware -- landis@lrclaw.com -- notes that as previously
disclosed to the District Court, Libby Claimants and the Plan
Proponents have reached an agreement to settle the Libby
Claimants' objections to the Plan, including those involving jury
trial rights, subject to certain conditions for the Settlement
Effective Date to occur. The Libby Claimants, hence, do not
oppose the other clarifications and amendments sought by the Plan
Proponents' request.
Debtors' Request
W.R. Grace and the other Plan Proponents are asking the District
Court to make two limited and specific amendments to Judge
Buckwalter's memorandum opinion and order. The Plan Proponents
seek:
(1) an addition to the Affirmation Order to clarify that all
the injunctions and releases in the Joint Plan, not just
the injunction under Section 524(g) of the Bankruptcy
Code, are approved, issued and affirmed; and
(2) revisions to two paragraphs of the Memorandum Opinion to
conform the opinion more closely to the language of the
Joint Plan regarding jury trials.
The Plan Proponents believe it would be prudent at this stage and
would not cause any delay to modify the Order and the jury trial
section of the Memorandum Opinion.
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, relates that Sealed Air Corporation and
Fresenius Medical Care Holdings, Inc., whose settlement agreements
provide for payment of more than $1 billion to the trusts created
by the Joint Plan, have pointed out to the Plan Proponents that
the language in the Order does not expressly reference certain of
the Joint Plan's injunctions, in addition to the Section 524(g)
injunction, and releases that protect their rights, and have
suggested certain modification to the Order to clarify the breadth
and force of the injunctions.
Sealed Air and Fresenius are contemporaneously filing their own
motion requesting identical revised language in the Order,
according to Ms. Jones.
The section of the Memorandum Opinion relating to Libby Claimants'
jury trial argument states that, in addition to certain settlement
and alternative dispute resolution options, Asbestos PT Claimants
have a "second option" for a jury trial, Ms. Jones relates.
However, she notes, the Memorandum Opinion goes on to say that
Asbestos PT Claimants have a "third option" as well for a jury
trial outside of the Joint Plan, when in fact, the Joint Plan does
not provide a "third option," albeit it does provide an Asbestos
PT Claimant the right to pursue a jury trial against the Asbestos
PT Trust' in the tort system, in the jurisdiction where the
claimant resides, was exposed to asbestos, or filed a prepetition
lawsuit.
Ms. Jones contends that the Plan Proponents' requested wording
changes do not alter any of the Court's analysis or the bases on
which it upheld the Joint Plan's treatment of jury trial rights.
She points out that the Plan Proponents merely ask the Court to
modify certain wordings to ensure that the Memorandum Opinion is
consistent with the terms of the Joint Plan that the Memorandum
Opinion is affirming.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Anderson, BNSF Win Extension for Plan Appeal
--------------------------------------------------------
Judge Ronald L. Buckwalter of the U.S. District Court for the
District of Delaware granted the motions of Anderson Memorial
Hospital and BNSF Railway Company for an extension of time to file
a notice of appeal from Judge Buckwalter's memorandum opinion and
order affirming the confirmation of the Debtors' Joint Plan of
Reorganization dated January 30, 2012.
Judge Buckwalter ruled that each and every party to the appeals
will have 30 days to file a notice of appeal computed from the
last date of the District Court's entry of an order regarding any
and of these motions:
-- Garlock Sealing Technologies LLC's motion for reargument,
rehearing, and to alter or amend the judgment;
-- Plan Proponents' motion to amend the memorandum opinion;
and
-- the Joint Motion of Sealed Air Corporation, Cryovac, Inc.,
and Fresenius Medical Care Holdings, Inc. for order
amending and clarifying Memorandum Opinion and Order.
Anderson and BNSF said Rule 4(a)(1)(A) of the Federal Rules of
Appellate Procedures provides that a party may file a notice of
appeal of an order within 30 days after its entry "for good
cause." They argued that there is good cause to extend the
deadline to file the notice of appeal.
BNSF said granting an extension will provide parties to the
settlement with Libby Claimants additional time to finalize their
respective settlements, and to engage in the process of obtaining
approval from the bankruptcy court.
About W.R. Grace & Co.
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
WASHINGTON MUTUAL: Debtor Abandons Equity Interests in Bank
-----------------------------------------------------------
On Dec. 12, 2011, WMI Holdings Corp. (formerly known as Washington
Mutual, Inc.) and its wholly-owned subsidiary, WMI Investment
Corp., filed with the U.S. Bankruptcy Court for the District of
Delaware the Seventh Amended Joint Plan of Affiliated Debtors
Pursuant to Chapter 11 of the United States Bankruptcy Code and a
related disclosure statement. The filed Plan was subsequently
modified by the Modification of Seventh Amended Plan dated Jan. 9,
2012, the Second Modification of Seventh Amended Plan dated
Jan. 12, 2012, and the Third Modification of Seventh Amended Plan
dated Feb. 16, 2012.
On Feb. 24, 2012, the Court entered an order confirming the filed
Plan as modified by the modifications
On March 16, 2012, as permitted by the orders of the Court
authorizing (but not requiring) the abandonment of their equity
interests in the outstanding stock of Washington Mutual Bank
("WMB"), and pursuant to the notice filed with the Court on
March 16, 2012, WMI and its Chapter 11 estate abandoned their
equity interests in the outstanding stock of WMB and surrendered
all right, title and interest to such stock. A copy of the
Notice of Abandonment is available at no charge at:
http://is.gd/KwqceD
On March 19, 2012, the Plan became effective and a notice of the
Effective Date of the Plan was filed with the Court.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
Records filed Jan. 24, 2012, say that Washington Mutual Inc.,
former owner of the biggest U.S. bank to fail, has spent
$232.8 million on bankruptcy professionals since filing its
Chapter 11case in September 2008.
As reported in the Troubled Company Reporter on March 21, 2012,
the Debtors disclosed that their Seventh Amended Joint Plan of
Affiliated Debtors, as modified, and as confirmed by order,
dated Feb. 23, 2012, became effective, marking the successful
completion of the chapter 11 restructuring process.
WASHINGTON MUTUAL: Plea to Reconsider Plan Confirmation Denied
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware denied the
request for relief in reference to the confirmation of Washington
Mutual Inc.'s Seventh Amended Plan of Reorganization.
On March 7, 2012, individual PIERS shareholders -- George M.
Dodson and Kaye R. Dodson, Mike Peters, Mark Evans, Michael
Rozenfeld, Ganezan Jayaraman, Glenn Gardipee and Florin Matache --
asked that the Court reconsider its order confirming the Debtors'
Plan, explaining that, among other things:
1. PIERS holders that exercised their right to vote could not
make an intelligent decision on the Plan releases; and
2. (i) due to ambiguous language, the subordination agreement
does not properly alert junior creditors to the various risks and
(ii) New York law governs the interpretation of the PIERS
indentures.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
Records filed Jan. 24, 2012, say that Washington Mutual Inc.,
former owner of the biggest U.S. bank to fail, has spent $232.8
million on bankruptcy professionals since filing its Chapter 11
case in September 2008.
As reported in the Troubled Company Reporter on March 21, 2012,
the Debtors disclosed that their Seventh Amended Joint Plan of
Affiliated Debtors, as modified, and as confirmed by order,
dated Feb. 23, 2012, became effective, marking the successful
completion of the chapter 11 restructuring process.
WASHINGTON MUTUAL: Court OKs Estimated Maximum of Equity Interests
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Washington Mutual Inc., to estimate the maximum amount of certain
equity interests for purposes of establishing reserves under the
Debtors' Seventh Amended Plan.
The Court also ordered that the estimated interests are "Disputed
Equity Interests under the Plan and will remain so unless and
until they are disallowed or become "Allowed Equity Interests"
under the Plan.
A full-text copy of the order and list of estimated claims is
available for free at
http://bankrupt.com/misc/WASHINGTONMUTUAL_plan_estimateclaim_order
.pdf
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
Records filed Jan. 24, 2012, say that Washington Mutual Inc.,
former owner of the biggest U.S. bank to fail, has spent
$232.8 million on bankruptcy professionals since filing its
Chapter 11 case in September 2008.
As reported in the Troubled Company Reporter on March 21, 2012,
the Debtors disclosed that their Seventh Amended Joint Plan of
Affiliated Debtors, as modified, and as confirmed by order,
dated Feb. 23, 2012, became effective, marking the successful
completion of the chapter 11 restructuring process.
WINDOW FACTORY: Richard Kipperman Appointed as Chapter 11 Trustee
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
approved the appointment of Richard Kipperman as Chapter 11
trustee in the cases of The Window Factory Inc.
Pursuant to the Feb. 29, 2012, order, Tiffany L. Carroll,
Assistant U.S. Trustee for Region 15 appointed Mr. Kipperman as
Chapter 11 trustee. The Chapter 11 trustee bond is initially set
at $10,000. The bond may require adjustment as the trustee
collects and liquidates assets of the estate; and the trustee is
directed to inform the Office of the U.S. Trustee when changes to
the bond amount are required or made.
To the best of the U.S. Trustee's knowledge, Mr. Kipperman is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
As reported in the Troubled Company Reporter on Feb. 28, 2012,
creditor American Integrity Corporation asked the Court to appoint
a trustee in the Chapter 11 case of the Debtor. American
Integrity explained that in the instant case, the compelling
reason for the appointment of a trustee is the fact of
a corporate Debtor without representation by counsel. The
principals of the Debtor have stated the Debtor does not have the
ability to retain counsel to represent the corporate Debtor and
the only way to protect the interests of creditors is by the
appointment of a trustee. Further, with the Debtor not having
counsel, a trustee would be able to more effectively and
efficiently accomplish the goal of a chapter 11 case than would
the Debtor.
About The Window Factory, Inc.
On Dec. 8, 2011, American Integrity Corp., Ajit Ahooja, and Herde
Computer Services signed involuntary Chapter 11 petitions for The
Window Factory, Inc., (Bankr. S.D. Calif. Case No. 11-19842).
Judge Laura S. Taylor presides over the case. Jeffrey D.
Schreiber, Esq., at The Schreiber Law Firm, serves as counsel to
the petitioning creditors, which allege $407,000 in total claims.
As reported in the Troubled Company Reporter on Jan. 27, 2012, the
Court ordered that, in consideration of the involuntary petition
filed by American Integrity Corp., Ajit Ahooja, and Herde
Computer Services against The Window Factory, Inc., an order for
relief under Chapter 11 of Title 11 of the United State Code is
granted.
WPCS INTERNATIONAL: EVP Voacolo Resigns for Personal Reasons
------------------------------------------------------------
Jeffrey Voacolo resigned for personal reasons, effective
immediately, as Executive Vice President of WPCS International
Incorporated and as an officer, director and employee of the
Company's subsidiaries. In submitting his resignation, Mr.
Voacolo did not express any disagreement with the Company on any
matter relating to the Company's operations, policies or
practices.
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.
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.
The Company reported a net loss attributable to WPCS of $12.02
million for the nine months ended Jan. 31, 2012, compared with a
net loss attributable to WPCS of $9.80 million for the same period
during the prior year.
The Company's balance sheet at Jan. 31, 2012, showed
$37.69 million in total assets, $23.21 million in total
liabilities, and $14.48 million in total equity.
ZOO ENTERTAINMENT: David Smith Discloses 71.9% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13D filed with the U.S. Securities and
Exchange Commission, David E. Smith and his affiliates disclosed
that, as of March 26, 2012, they beneficially own 21,938,659
shares of common stock of Zoo Entertainment, Inc., which
represents 71.9% of the shares outstanding. MMB Holdings LLC
beneficially owns 19,722,369 shares. Mr. Smith last disclosed
beneficial ownership of 20,926,159 shares or 70.9% equity stake as
of March 9, 2012. A copy of the amended filing is available for
free at http://is.gd/E4Igbs
About Zoo Entertainment
Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG)
is a developer, publisher and distributor of interactive
entertainment for Internet-connected consoles, handheld gaming
devices, PCs, and mobile devices.
The Company reported a net loss of $19.74 million on $8.59 million
of revenue for the nine months ended Sept. 30, 2011, compared with
a net loss of $837,000 on $43.71 million of revenue for the same
period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $6.19
million in total assets, $13.03 million in total liabilities and a
$6.84 million total stockholders' deficit.
As reported in the TCR on Apr 26, 2011, EisnerAmper LLP, in
Edison, N.J., expressed substantial doubt about Zoo
Entertainment's ability to continue as a going concern, following
the Company's 2010 results. The independent auditors noted that
the Company has both incurred losses and experienced net cash
outflows from operations since inception.
* Lawyer's Travel Time May Be Fully Compensable, 9th Cir. Says
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in San Francisco ruled
March 27 that a bankruptcy court may sometimes award compensation
to a lawyer for time spent traveling at the attorney's full hourly
rate. Upholding the bankruptcy appellate panel, the appeals court
said it wasn't an "easy question" to decide if full compensation
could be awarded for travel time. The unsigned opinion said full
rates may be reasonable sometimes and sometimes not. The case is
Thomas v. Namba (In re Thomas), 10-60028, 9th U.S. Circuit Court
of Appeals (San Francisco).
* Bankrupt Lawyers Not Presumed to Know Texas Homestead Law
-----------------------------------------------------------
The U.S. Court of Appeals in New Orleans ruled March 26 that a
bankrupt lawyer admitted to practice in Texas isn't presumed to
have knowledge of the state's homestead exemption law. In an
unsigned opinion reversing the two lower courts, the three-judge
panel for the 5th Circuit said there could be no presumption when
the bankrupt never practiced bankruptcy law and wasn't acting as
his own attorney. U.S. Circuit Judge Carolyn King was on the
panel of three judges. The case is Cipolla v. Roberts (In re
Cippola), 11-50391, 5th U.S. Circuit Court of Appeals (New
Orleans).
* FHA Bailout Risk Looming Larger After Guarantee Binge: Moody's
----------------------------------------------------------------
American Bankruptcy Institute reports that the Federal Housing
Administration will not be able to earn its way to financial
health this year, increasing the chance it will need a taxpayer
bailout, based on an updated forecast from Moody's Analytics,
which provides the agency's housing-market analysis.
* Ex-Hogan Lovells Atty. Admits $2-Million Fraud
------------------------------------------------
Sindhu Sundar at Bankruptcy Law360 reports that a former Hogan
Lovells senior partner and bankruptcy expert pled guilty in the
U.K. on Tuesday to obtaining GBP1.2 million ($1.9 million) in
fraudulent travel expenses claims from the firm, which fired him
in May after uncovering the theft.
According to Law360, Christopher Grierson, a former veteran
litigator at the U.K.-based law firm, admitted to four counts
related to 57 fraudulent travel claims he had filed along with
false and misleading documents over the course of four years.
* Marvell Founders Amending FINRA Claims vs. Goldman
----------------------------------------------------
The founders of Marvell Technology Group, Dr. Sehat Sutardja and
Ms. Weili Dai, are preparing to amend their claim filed with the
San Francisco office of the Financial Industry Regulatory
Authority (FINRA) against Goldman Sachs and two account
executives, alleging Goldman Sachs defrauded the two Silicon
Valley executives of several hundreds of millions of dollars in
the midst of the 2008 financial crisis. At that time, Dr.
Sutardja and Ms. Dai were two of the largest victims of fraud by
Goldman's Private Wealth Management Group. The breaking news
reveals there will be an amended FINRA Claim based on new evidence
that Goldman Sachs engaged in secret re-titling into Goldman's
name alone of over 20 million shares owned by two founders of
Marvell, Dr. Sutardja and Ms. Dai. In a series of transactions
eerily similar to MF Global, currently under Congressional
investigation for misusing client funds, the amended FINRA Claim
will allege Goldman Sachs secretly instructed the stock transfer
agent to obtain title to the Marvell shares only in Goldman Sachs'
name, without their clients' permission.
Recent information revealed Goldman Sachs re-titled over 20
million shares of its clients' Marvell stock so that, as will be
asserted in the amended FINRA Claim, Goldman could trade on its
own account, create a market for its affiliated hedge funds and,
ultimately, recapitalize its accounts to be used to help save the
Firm from financial ruin at the height of the 2008 financial
crisis. In the midst of a financial crisis, the FINRA Claim
contends Goldman put its own interests ahead of its clients'
interests.
A linchpin of Dr. Sutardja and Ms. Dai's FINRA Claim is the
allegation Goldman unlawfully re-titled into Goldman's name alone
over 20 million Marvell shares owned by Dr. Sutardja and Ms. Dai
without client knowledge or authorization. Newly discovered hard
evidence establishes this claim. It is questionable whether,
under federal regulations, a brokerage firm is permitted to cause
a client's shares to be placed in the brokerage firm's name absent
the express consent of the client. It was not until April 2011
that Dr. Sutardja and Ms. Dai discovered Goldman's re-titling.
Thus, Goldman Sachs had over 20 million shares in its name alone
from January 2008 to April 2011, even though the shares were
actually owned by its clients.
"The best circumstantial evidence supporting our clients' FINRA
Claim is the amount of money Goldman Sachs made in proprietary
trading during the time frame 2008-2011," said attorney Joseph
Cotchett, of Cotchett, Pitre & McCarthy, LLP, one of the attorneys
representing Marvell's co-founders.
In January, 2008, under the guise of a margin account, Goldman
undertook steps to re-title in its own name "GOLDMAN, SACHS & CO"
over 20,000,000 Marvell shares then held by Dr. Sutardja and Ms.
Dai. Goldman had represented all re-registered shares would
indicate on the face of the stock certificate "GOLDMAN, SACHS &
CO. FOR BENEFIT OF SEHAT SUTARDJA" or, in the alternative,
"GOLDMAN, SACHS & CO. FOR BENEFIT OF WEILI DAI."
Clear instructions were transmitted to the American Stock Transfer
& Trust Company of Brooklyn, New York to indicate "GOLDMAN, SACHS
& CO. FOR BENEFIT OF SEHAT SUTARDJA" or, in the alternative,
"GOLDMAN, SACHS & CO. FOR BENEFIT OF WEILI DAI" on the face of the
stock certificate. At the specific request of Goldman Sachs, these
instructions were not followed.
As recently confirmed by an email from the American Stock Transfer
& Trust Company, "The requests (to re-title the shares) came in
from Goldman Sachs, and ... by their instruction letter, it was
requested that we place (the shares) in the name of Goldman
Sachs."
Thus, the American Stock Transfer & Trust Company confirmed that,
instead of re-registering Dr. Sutardja and Ms. Dai's Marvell
shares into Goldman's name for the benefit of Dr. Sutardja or Ms.
Dai, Goldman re-titled over 20 million of Claimant's Marvell
shares into Goldman's name alone. Indeed, on the transfer
assignment control forms Goldman filed with the Depository Trust
Company, Goldman indicated Dr. Sutardja and Ms. Dai's shares were
"TO BE REGISTERED IN THE NAME OF GOLDMAN SACHS & CO" alone.
The significance of Goldman's re-registering shares then worth
over $120 million dollars goes to Goldman's motives behind the
unlawful transfers. Under federal securities laws regulating short
sales, before a short sale can be made, the shares must be
borrowed. Often hedge funds pay brokerage firms such as Goldman
Sachs to loan shares to the fund. By re-titling Claimants' shares
into Goldman's name alone, Goldman created liquidity, i.e., it
could trade, lend, and put up as collateral Claimants' Marvell
shares for Goldman's own account, without Claimants' consent, i.e.
proprietary trading.
The FINRA Claim contends Goldman Sachs used the 2008 financial
crisis to take advantage of Sehat Sutardja and Weili Dai. The
FINRA filing asserts that in the wake of the 2008 financial
crisis, Goldman Sachs was under great stress -- incurring its
first quarterly loss in its history ($2.1 billion, 4th quarter
2008) and losing two-thirds of its stock value in less than four
months.
According to attorney Joseph Cotchett, "Through a series of
extraordinary and deceitful acts geared to save Goldman Sachs at
the expense of its clients, the FINRA Claim expressly alleges the
firm used customer accounts to leverage its own profits without
regard to the consequences to Sehat and Weili. Our clients became
the victims of one of the largest acts of corporate greed and
avarice in the history of our financial markets."
As United States Attorney for the Southern District of New York,
Preet Bharara, working with the Federal Bureau of Investigation
and the Securities and Exchange Commission to bring down insider
trading rings, recently explained in a statement:
"The charges unsealed allege a corrupt circle of friends who
formed a criminal club whose purpose was profit and whose members
regularly bartered lucrative inside information so their
respective funds could illegally profit," Bharara explained in a
statement Wednesday afternoon.
"And profit they allegedly did -- to the tune of more than $61m on
illegal trades of a single stock -- much of it coming in a $53
million short trade," he said. "Here, The Big Short was The Big
Illegal Short. We have demonstrated through our prosecutions that
insider trading is rampant and has its own social network, a
network we intend to dismantle. We will be unrelenting in our
pursuit of those who think they are above the law." Excerpts
quoted in The Register.
These insider trading schemes, including the ring allegedly
involving Daniel Longueuil, Samir Barai, Jason Pflaum, and Noah
Freeman, include obtaining inside information, such as detailed
financial earnings. Among the prominent public companies
victimized by the insider trading rings are Marvell and NVIDIA
Corporation.
As SEC Chairman Mary Schapiro commented recently in connection
with curbing conflicts of interest for firms such as Goldman Sachs
through implementing the Volcker Rule, "[T]he Volcker Rule...
generally prohibits certain banking entities from engaging in
proprietary trading or sponsoring or investing in a hedge fund or
private equity fund. The statute is intended to curb the
proprietary interests of commercial banks and their affiliates in
order to protect taxpayers and consumers by prohibiting insured
depository institutions from engaging in risky proprietary
trading." Chairman Schapiro went on to state that implementation
of the Volcker Rule "would be a step forward in reducing conflicts
of interests between the self-interests of banking entities and
the interests of their customers. The statute is aimed at
constraining banking entities' proprietary trading, protecting the
provision of essential financial services and promoting the
stability of the U.S. financial system."
The Volcker Rule, which has become one of the most controversial
parts of the 2010 Dodd-Frank financial oversight law, seeks to add
distance between the world of speculative trading and commercial
banking. The proposal bans banks from proprietary trading, or
trades that are made solely for their own profit, and limits their
investments in hedge funds. It would mostly affect large banks,
such as Goldman Sachs. See Thomson Reuters News and Insight.
Further, by re-titling Claimants' Marvell shares in Goldman's name
alone, Goldman was able to de-leverage and capitalize its own
accounts. Goldman needed this liquidity in the midst of the
financial crisis to convert from an investment bank to a bank
holding company, which it did in September, 2008.
Goldman is not the only firm alleged to be guilty of betraying its
clients' interests, breaching its fiduciary duty of loyalty, and
breaking the law. Threatened with bankruptcy, MF Global is
alleged to have used client accounts in a last ditch effort to
recapitalize the firm. According to Bloomberg News, MF Global CEO
and former Co-Chairman of Goldman Sachs Jon Corzine "gave 'direct
instructions' to transfer $200 million from a customer fund
account to meet an overdraft in brokerage account with JP Morgan
Chase & Co. (JPM)." The New York Times added, "[i]n its final
days, MF Global tapped its customers' accounts to meet its own
financial obligations, people briefed on the matter have said. The
act violated a fundamental Wall Street regulation that firms never
commingle customer money with company funds."
A House Financial Services subcommittee is investigating what
caused an estimated $1.6 billion shortfall in customer funds at MF
Global, which collapsed into bankruptcy on Oct. 31, 2011. The
Congressional subcommittee is focusing on instructions to move
$200 million from an MF Global Holdings Ltd. account containing
customer funds just three days before the collapse of the
securities firm. The transfer was allegedly needed to cure a $175
million overdraft in an MF Global bank account.
Just as MF Global purportedly misappropriated client accounts, the
FINRA Claim asserts Goldman Sachs misappropriated Dr. Sutardja and
Ms. Dai's stock. Goldman Sachs has recently been the subject of
numerous claims of misuse of client funds and shares in connection
with securities lending. As one New York Times article pointed
out.
"While few investors understand or care about the mechanics of
securities lending, the area has come under increased regulatory
scrutiny. The Securities and Exchange Commission has brought
several cases in recent years accusing market participants of
failing to borrow shares they or their customers had sold short,
improperly creating a supply of additional stock to sell.
Along with a handful of traders at smallish firms, Goldman's
securities lending unit has been cited by regulators for lapses.
In 2010, the S.E.C. sued Goldman on accusations that it
'willfully' had failed to preborrow shares as required for its
short-selling clients in January 2009. . . . The improprieties
involved 385 short sales in which the firm had not located shares
for its brokerage clients to borrow. Goldman paid $450,000 to
settle the case without admitting or denying the accusations."
Recently, a former Goldman Sachs Executive Director, Greg Smith,
resigned from the firm and wrote a scathing Op-Ed article in The
New York Times. In his Op-Ed article, Mr. Smith contended the
Goldman Sachs culture had become toxic and the firm had placed its
own interests ahead of those of its customers.
The FINRA Claim of Dr. Sutardja and Ms. Dai has become a large
concern in the Asian-American community.
In conclusion, the amended FINRA Claim will allege Goldman Sachs
secretly took title in only its name to over 20 million of Dr.
Sutardja and Ms. Dai's Marvell shares, worth over $120 million at
the time and over $315 million today. Based on the breaking news,
Dr. Sehat Sutardja and Ms. Weili Dai will be amending their FINRA
Claim to allege Goldman Sachs secretly instructed the stock
transfer agent to obtain title to the Marvell shares in Goldman
Sachs' name alone, without their clients' permission. It is
asserted this undisclosed re-titling resulted in Dr. Sutardja and
Ms. Dai becoming two of the largest victims of the culture of
greed at Goldman Sachs. This use of client shares is similar to
the alleged use of client funds by MF Global, currently under
Congressional investigation for misusing client funds. The FINRA
Claim seeks return of several hundreds of millions of dollars and
punitive damages.
* Moody's Says Wildlife Protection Hits Renewable Energy Sector
---------------------------------------------------------------
The costs of wildlife protection for renewable energy projects are
rising somewhat unexpectedly and are turning out to have
potentially significant financial consequences and credit risks
for some renewable energy projects, says Moody's Investors Service
in a new report.
"Protecting the environment by building renewable energy projects
and protecting endangered species are increasingly coming into
conflict," said Moody's Analyst Charles Berckmann. "For now,
Moody's-rated renewable energy projects remain unaffected by
threats of environmental litigation but that does not mean they
will be immune to potential environmental threats prior to debt
maturity."
He added that environmental concerns associated with endangered
species protection are already increasing renewable energy project
costs and notes there is a distinction between environmental costs
during the construction phase compared with those during the
operating phase.
"Well-planned renewable projects typically get permits from the
wildlife and fisheries commissions prior to financing and
construction with costs built into the economics of the project,"
said Berckmann. "The more challenging risks involve projects that
are in operation and then subsequently find they are facing
unanticipated environmental issues."
Such event risk may expose projects to unexpected or hidden margin
erosion as the costs associated with endangered species protection
may not be fully mitigated within most power purchase agreements
or PPAs, exposing a potential weakness, according to the Moody's
report.
Heightened risk of environmental curtailment could reduce project
cash flows, a credit negative, reports Moody's Berckmann.
Increased permitting scrutiny will likely lead to higher costs
followed by higher litigation costs as the avenue to address these
risks can only be partially borne by contracts.
"The conflict between environmental policy in support of renewable
and environmentally friendly projects and endangered species
protection is not necessarily unexpected," said Berckmann. "In
fact, it is now considered just another cost of doing business."
* Moody's Says Non-financial Corp. Ratings Indicators of Default
----------------------------------------------------------------
Moody's non-financial corporate debt ratings provided a strong
advance warning of default in 2011, says Moody's Investors Service
in a new special comment assessing the most recent one-year and
five-year performance of its global ratings.
"Through the 2008-09 financial crisis and accompanying global
recession, Moody's nonfinancial corporate ratings provided a
strong rank-ordering of credit risk across companies and strong
advance warning of default," said Kenneth Emery, a Moody's Senior
Vice President and author of the report. "In 2011, Moody's ratings
continued to perform strongly, with the vast majority of
defaulters given low ratings well in advance of default."
Twenty-eight of the 29 (97%) defaulters in 2011 were rated Caa1 or
lower one year prior to their default (seven rating levels below
investment grade), with the remaining defaulter rated B2 (five
rating levels below investment grade), indicating that Moody's
ratings provided strong advance warning of default.
Additionally, one-year cumulative default rates through December
2011 by rating category sequentially increase moving down the
rating scale, demonstrating that Moody's ratings provided a strong
rank-ordering of credit risk, says the report.
Moody's also updates the five-year performance of its January 2007
ratings that include performance during the financial crisis and
subsequent recession that included a large number of corporate
defaults, and notes that these ratings also provided a strong
rank-ordering of credit risk.
Moody's corporate debt ratings provide accurate measures of
relative credit as determined by each issuer's fundamental
creditworthiness. The report examines how well Moody's ratings
performed in rank-ordering credit risk and assigning low ratings
to defaults well in advance of default.
* P. Kalek Joins Chadbourne as Int'l Partner in Warsaw
------------------------------------------------------
The international law firm Chadbourne & Parke LLP announced that
Przemyslaw Kalek has joined the firm as an international partner
in the Warsaw office project finance group.
Mr. Kalek focuses his practice on energy and infrastructure
projects. In his many years working in Poland, Mr. Kalek has
advised both regionally-based and international energy companies
in relation to energy law, regulatory issues and antitrust aspects
of their activities, and has been involved in a number of mergers
& acquisitions, project financings and privatizations in the
Polish energy sector.
During his career, Mr. Kalek has represented energy companies
before the Polish regulatory authority, the common, anti-monopoly
and administrative courts and the Polish Supreme Court in energy
and antitrust legal proceedings, as well as in disputes relating
to the development and maintenance of electricity systems. His
expertise also covers power generation project development and
financing, including renewables, drafting and negotiating the full
range of electricity and gas supply contracts, as well as
contracts on grid interconnection, distribution and transmission.
"We are proud to welcome Przemyslaw to the Firm," said Chadbourne
Managing Partner Andrew A. Giaccia. "Przemyslaw's impressive
experience and intimate knowledge of the Polish and European
energy sectors make him a tremendous asset for our Polish and
international clients."
Mr. Kalek comes to Chadbourne after serving as counsel and co-head
of the energy practice at a leading Polish firm Soltysinski
Kawecki & Szlezak. Prior to this, Mr. Kalek spent six years
in-house at the Polish division of one of the largest energy
companies in Europe, RWE Polska S.A. (German RWE AG subsidiary),
where he held a number of positions including head of both the
Legal Department and the Management Board Office.
"With Przemyslaw's arrival, Chadbourne continues to build its
formidable energy and project finance practice and strengthen our
capabilities in Central and Eastern Europe," said Igor Muszynski,
Warsaw office Executive Partner and Head of its Energy and Project
Finance Practice. "We are seeing an increase of clients' needs in
the energy sector. The breadth of Przemyslaw's unique front and
back-end energy experience in domestic and European markets will
be a valuable addition to our existing team and will help us to
satisfy this growth in demand."
Mr. Kalek earned his L.L.M. in Polish Law from Adam Mickiewicz
University in Poznan. He also received a Masters in German Law
from the European University Viadrina in Frankfurt, Germany.
About Chadbourne & Parke
Chadbourne & Parke LLP -- http://www.chadbourne.com/ -- an
international law firm headquartered in New York City, provides a
full range of legal services, including mergers and acquisitions,
securities, project finance, private funds, corporate finance,
venture capital and emerging companies, energy/renewable energy,
communications and technology, commercial and products liability
litigation, arbitration/IDR, securities litigation and regulatory
enforcement, special investigations and litigation, intellectual
property, antitrust, domestic and international tax, insurance and
reinsurance, environmental, real estate, bankruptcy and financial
restructuring, executive compensation and employee benefits,
employment law, trusts and estates and government contract
matters. Major geographical areas of concentration include
Russia, Central and Eastern Europe, Turkey, the Middle East and
Latin America, with a focus on emerging markets generally. The
Firm has offices in New York, Washington DC, Los Angeles, Mexico
City, Sao Paulo, London, Moscow, Warsaw, Kyiv, Almaty, Istanbul,
Dubai and Beijing.
* Paneth & Shron Names Two New Partners and One Principal
---------------------------------------------------------
New York-area accounting firm Marks Paneth & Shron LLP (MP&S) has
appointed two new partners and a principal to its Tax Practice.
Based in MP&S' headquarters in Manhattan, they have significant
experience advising high-net-worth individuals, closely held
businesses, family groups and small businesses on tax matters.
"These superb professionals' deep experience advances our ability
to serve our sophisticated client base as it navigates challenges
of the current economic environment," said Mark Levenfus, CPA, and
Harry Moehringer, CPA, managing partners of Marks Paneth & Shron.
The new partners and principal in MP&S' Tax Practice are:
-- Alan Blecher, JD, Principal, 52, assists high-income and
high-net-worth individuals and their closely held businesses with
tax planning. With a particular focus on partnerships, limited
liability and S-Corps, he advises clients on such issues as public
debt offerings, sales of family businesses and restructurings of
distressed entities. Mr. Blecher holds a B.S. and J.D. from
Fordham University and is a member of the American Bar
Association, Section of Taxation. He is a resident of New York
City.
-- Laura LaForgia, CPA, Partner, advises on tax issues affecting
high-net-worth individuals, family groups, estates, trusts and
private foundations. She provides guidance on income tax, estate
and gift tax, foreign transaction reporting, multi-state taxation
and financial planning. Ms. LaForgia holds a B.B.A. in Accounting
from Adelphi University and an M.S. in Taxation from Long Island
University. She is a member of the Estate Planning Council of New
York City, the National Association of Female Executives and the
New York State Society of CPAs (NYSSCPA).
-- Martin Hyman, CPA, Partner, 52, specializes in tax affecting
high net-worth individuals, family groups, small businesses and
their owners. He has 25 years of public accounting experience and
serves on the New York, Multistate and Local Taxation Committee of
the New York State Society of CPAs (NYSSCPA). Mr. Hyman holds a
B.S. in Accounting from the State University of New York at
Plattsburgh and an MBA from Hofstra University. He is a resident
of New York City.
About Marks Paneth & Shron
Marks Paneth & Shron LLP is an accounting firm with nearly 475
people, of whom approximately 60 are partners and principals. The
firm provides businesses with a full range of auditing,
accounting, tax, consulting, bankruptcy and restructuring services
as well as litigation and corporate financial advisory services to
domestic and international clients. The firm also specializes in
providing tax advisory and consulting for high-net-worth
individuals and their families, as well as a wide range of
services for international, real estate, media, entertainment,
nonprofit, professional and financial services, and energy
clients. The firm has a strong track record supporting emerging
growth companies, entrepreneurs, business owners and investors as
they navigate the business life cycle.
* Joseph Karel Joins Focus Management as Managing Director
----------------------------------------------------------
Dow Jones' DBR Small Cap reports that Joseph "Joe" Karel has
joined Focus Management Group as managing director and will help
with business development. According to the report, most
recently, Karel worked at the global headquarters of the
Turnaround Management Association, where he was director of fund
development.
In addition to his turnaround management experience, he has also
worked with corporate renewal and sales and marketing, the report
notes.
* 2nd Cir. Appoints Paul Warren as W.D.N.Y. Bankruptcy Judge
------------------------------------------------------------
The Second Circuit Court of Appeals appointed Bankruptcy Judge
Paul R. Warren to a fourteen-year term of office in the Western
District of New York, Rochester, effective March 15, 2012, (vice,
Ninfo).
Judge Warren can be reached at:
Honorable Paul R. Warren
1400 United States Bankruptcy Court
100 State Street
Rochester, NY 14614
Telephone: (585) 613-4250
Fax: (585) 613 4251
Judicial Assistant: Michele A. Telesca
Telephone: (585) 613-4256
Law Clerk: Timothy P. Lyster
Telephone: (585) 613-4251
Term expiration: March 14, 2026
* Fredrick Clement Appointed E.D. Calif. Bankruptcy Judge
---------------------------------------------------------
The Ninth Circuit Court of Appeals appointed Bankruptcy Judge
Fredrick E. Clement to a fourteen-year term of office in the
Eastern District of California, Fresno, effective March 16, 2012,
(vice, Rimel).
Judge Clement can be reached at:
Honorable Fredrick E. Clement
United States Bankruptcy Court
2500 Tulare Street, Suite 2501
Fresno, CA 93721
Telephone: (559) 499-5860
Fax: (599) 499-5864
Judicial Assistant: Kathy Torres
Law Clerk: Anna Kaluzny
(will be replace by Joe Flack on 4/16/12)
Term expiration: March 15, 2026
* BOOK REVIEW: The Health Care Marketplace
------------------------------------------
Author: Warren Greenberg, Ph.D.
Publisher: Beard Books
Softcover: 179 pages
List Price: $34.95
Review by Henry Berry
Greenberg is an economist who analyzes the healthcare field from
the perspective that "health care is a business [in which] the
principles of supply and demand are as applicable . . . as to
other businesses." This perspective does not ignore or minimize
the question of the quality of health, but rather focuses sharply
on the relationship between the quality of healthcare and economic
factors and practices.
For better or worse, the American healthcare system to a
considerable degree embodies the beliefs, principles, and aims of
a free-market capitalist economic system driven by competition.
In the early sections of The Health Care Marketplace, Greenberg
takes up the question of how physicians and how hospitals compete
in this system. "Competition among physicians takes place locally
among primary care physicians and on a wider geographical scale
among specialists. There is competition also between M.D.s and
allied practitioners: for example, between ophthalmologists and
optometrists and between psychiatrists and psychologists.
Regarding competition between physicians in a fee-for-service
practice and those in managed care plans, Greenberg cites
statistics and studies that there was lesser utilization of
healthcare services, such as hospitalization and tests, with
managed care plans.
Some of the factors affecting the economics of different areas of
the healthcare field are self-evident, albeit may be little
recognized or little realized by consumers. One of these factors
is physician demeanor. Most readers would see a physician's
demeanor as a type of personality exhibited during the course of
the day. But after the author notes that "[c]ompetition also
takes place in professional demeanor, location, and waiting time,"
the word "demeanor" takes on added meaning. The demeanor of a big-
city plastic surgeon, for example, would be markedly different
from that of a rural pediatrician. Thus, demeanor has a
relationship to the costs, options, services, and payments in the
medical field, and also a relationship to doctor education and
government funding for public health.
Greenberg does not follow his economic data and summarizations
with recommendations or advice. He leaves it to the policymakers
to make decisions on the basis of the raw economic data and
indisputable factors such as physician demeanor. Nor does he take
a political position when he selects what data to present or
emphasize. It is this apolitical, unbiased approach that makes
The Health Care Marketplace of most value to readers interested in
understanding the economics of the healthcare field.
Without question, a thorough understanding of the factors
underlying the healthcare marketplace is necessary before changes
can be made so that the health needs of the public are better met.
Conditions that are often seen as intractable because they are
regarded as social or political problems such as the overcrowding
of inner-city health centers or preferential treatment of HMOs
are, in Greenberg's view, problems amenable to economic solutions.
According to the author, the basic economic principle of supply-
and-demand goes a long way in explaining exorbitantly high medical
costs and the proliferation of specialists.
Greenberg's rigorous economic analysis similarly yields an
informative picture of the workings of other aspects of the
healthcare field. Among these are hospitals, insurance, employee
health benefits, technology, government funding of health
programs, government regulation, and long-term health care. In
the closing chapter, Greenberg applies his abilities as a keen-
eyed observer of the economic workings of the U.S. healthcare
field to survey healthcare systems in three other countries:
Canada, Israel, and the Netherlands. "An analysis of each of the
three systems will explain the relative doses of competition,
regulation, and rationing that might be used in financing of
health care in the United States," he says. But even here, as in
his economic analyses of the U.S. healthcare system, Greenberg
remains nonpartisan and does not recommend one of these three
foreign systems over the other. Instead he critiques the
Canadian, Israel, and Netherlands systems -- "none [of which]
makes use of the employer in the provision of health insurance,"
he says -- to prompt the reader to look at the present state and
future of U.S. healthcare in new ways.
The Health Care Marketplace is not a book of limited interest, and
the author's focus on the economics of the health field does not
make for dry reading. Healthcare is a central concern of every
individual and society in general. Greenberg's book clarifies the
workings of the healthcare field and provides a starting point for
addressing its long-recognized problems and moving down the road
to dealing effectively with them.
Warren Greenberg is Professor of Health Economics and Health Care
Sciences at George Washington University, and also a Senior Fellow
at the University's Center for Health Policy Research. Prior to
these positions, in the 1970s he was a staff economist with the
Federal Trade Commission. He has written a number of other books
and numerous articles on economics and healthcare.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***