/raid1/www/Hosts/bankrupt/TCR_Public/120509.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, May 9, 2012, Vol. 16, No. 128
Headlines
261 EAST 78: Has Until July 20 to File Plan of Reorganization
3210 RIVERDALE: Section 341(a) Creditors' Meeting Today
4KIDS ENTERTAINMENT: To Auction Yu-Gi-Oh! Licenses on June 5
AEOLUS PHARMACEUTICALS: Has 4 Additional Projects with JMPS
AEROGROW INTERNATIONAL: Lazarus Discloses 16.9% Equity Stake
AMERICAN HOME: S&P Gives 'B+' Counterparty Credit Rating
AMERICANWEST BANCORP: Holdco Plan Outline Hearing on June 27
AMWINS GROUP: Moody's Assigns 'B2' Corp. Family Rating
AS SEEN ON TV: Files Form S-1 for 50.49 Million Shares
ATP OIL: Moody's Affirms 'Caa2' CFR; Outlook Developing
AVISTAR COMMUNICATIONS: Files Form 10-Q; Incurs $1.4MM Loss in Q1
AXION INTERNATIONAL: Has MOU to Issue $1.6MM Notes to Investors
BAKERS FOOTWEAR: Reports $3.4 Million Net Income in Q1
BALQON CORPORATION: Issues $891,000 of Conv. Promissory Notes
BEEF PRODUCTS: Closes 3 of 4 Facilities Amid 'Pink Slime' Uproar
BERNARD L. MADOFF: Trustee Sues Madoff Sons' Wives for $57.5MM
BERWIND REALTY: Section 341(a) Meeting Set for May 14
BERWIND REALTY: Wants to Hire Cuprill as Attorney
BERWIND REALTY: Files Schedules of Assets and Liabilities
BRIER CREEK: Court Approves Bidencope to Valuate Property
BRIER CREEK: Bankr. Administrator Unable to Form Committee
BRIER CREEK: Can Hire Northen Blue as Bankruptcy Counsel
BROADSIGN INT'L: JEDFam Had No Competition to Buy Business
BUILDERS FIRSTSOURCE: Files Form 10-Q, Posts $19.2MM Loss in Q1
BURLINGTON COAT: S&P Rates New $950.5-Mil. Term Loan Facility 'B'
CENTRAL FALLS, RI: Rejection of Cop's Employment Contract Affirmed
CENTRAL FEDERAL: Amends 20-Mil. Shares Offering Prospectus
CHINA SHENGHUO: Won't File Form 15 at This Time
CHRIST HOSPITAL: Has Final OK to Obtain $5MM Deposit Financing
CLEARWATER SEAFOODS: S&P Assigns 'B' Corporate; Outlook Stable
COMMERCIAL VEHICLE: Reports $12 Million Net Income in Q1
CONSOL ENERGY: S&P Affirms 'BB' Corporate Credit Rating
CYBERDEFENDER CORP: Guthy-Renker Approved to Buy Business
DELTA PETROLEUM: To Reorganize Under Laramie Energy II Venture
DELTA PETROLEUM: Wins OK to Hire Pinckney as Conflicts Counsel
DELTA PETROLEUM: Class Plaintiff Objects to Bar D&O Lawsuits
DENNY'S CORP: Files Form 10-Q; Posts $5.8MM Net Income in Q1
DEWEY & LEBOEUF: Associates Told Their Jobs Would End Next Week
DEWEY & LEBOEUF: Ex-Vice Chairman Pierce Asserts $61-Mil. Claim
EAGLE POINT: Wants to Extend Plan Filing Deadline Until July 2
EAGLE POINT: Gets Court OK to Hire Scott Law as Conflicts Counsel
EAGLE POINT: Has Nod to Hire Shirley Delsman Botts as Accountant
DYNEGY INC: Levi & Korsinsky Commences Class Action Lawsuit
EAST PROVIDENCE: Moody's Confirms 'Ba1' GO Rating; Outlook Stable
EMMIS COMMUNICATIONS: Board Adopts New Bonus Plan for 2013
EMMIS COMMUNICATIONS: T. Stabosz Holds 3.2% of Class A Shares
ENERGY CONVERSION: Cancels Going Concern Auction of United Solar
ENERGY CONVERSION: Hearings on May 9 & 16 on Equity Panel Bid
FAIRFAX FINC'L: Fitch Affirms 'BB' Rating on 5 Pref. Shares Series
FIFTH STREET TOWERS: Sold for $1 Plus Debt in Foreclosure Sale
FIRST NATIONAL: Fitch Affirms 'B' Short-Term Issuer Default Rating
FREDERICK'S OF HOLLYWOOD: Hires Advisor to Explore Sale, Options
GAC STORAGE: Copley Plan Outline Hearing Scheduled for May 10
GAC STORAGE: May 25 Set as Copley Creditors' Claims Bar Date
GAC STORAGE: El Monte Plan Exclusivity Extended Until July 3
GAC STORAGE: Lansing Has Standstill Stipulation with BBT
H & M OIL: Prospect Capital Wants Management Ousted
HARTFORD COMPUTER: Court Sets June 12 as Claims Bar Date
HARTFORD COMPUTER: Has Until June 29 to Propose Chapter 11 Plan
HARTFORD COMPUTER: Nexicore Services Now Known as Old NS, LLC
HAWKER BEECHCRAFT: Chapter 11 Prompts Moody's to Cut PDR to 'D'
HMC/CAH: Court Extends Cash Collateral Use Until Sept. 28
HMC/CAH: Exclusive Period to File Plan Extended to June 6
HOMER CITY: Sr. Notes Cut by S&P to 'CC' on Bankruptcy Risk
HOSTESS BRANDS: May End Contracts With Bakery Workers' Union
HURLEY MEDICAL: Moody's Affirms 'Ba1' Long-Term Rating
HUSSEY COPPER: Seeks Extension of Plan-Filing Rights
ICON HEALTH: S&P Puts 'B+' Corp. Credit Rating on Watch Negative
INFUSYSTEM HOLDINGS: Sean McDevitt Discloses 8.1% Equity Stake
ISTAR FINANCIAL: Agrees to Sell $275 Million of 9% Senior Notes
KB TOYS: Claims-Trade Ruling Sets Stage for Final Payout
LIBERATOR INC: Taps Equities Awareness for Investor Relations
LITTLE MOUNTAIN: Wants to Hire Cook Group as Real Estate Appraiser
LITTLE MOUNTAIN: Taps Highland Commercial as Real Estate Broker
LITTLE MOUNTAIN: Has Nod to Hire Holland & Hart as Bankr. Counsel
LOCATION BASED TECH: Gets $500,000 from Promissory Note
LOCATION BASED TECH: Inks Consulting Agreement with Dr. Gadget
LOUISIANA-PACIFIC: Moody's Rates $300MM Sr. Unsecured Notes 'B1'
LUCID INC: Square 1 Bank Forbearance Expired May 7
MADISON 92ND: Plan Confirmation Hearing Scheduled for May 17
MAGNUM HUNTER: Moody's Assigns B3 CFR, Rates $450MM Notes Caa1
MARIANA RETIREMENT FUND: More Retirees Seek Case Dismissal
MARKET STREET: Disclosure Statement Hearing Date Reset to May 29
MARONDA HOMES: Chapter 11 Reorganization Case Closed
MATTERHORN NURSERY: Shuts Down Business in Mid-April
MAUI LAND: Files Form 10-Q; Incurs $244,000 Net Loss in Q1
MCCALTCHY CO: Files Form 10-Q; Incurs $2.1MM Net Loss in Q1
NASSAU BROADCASTING: Reaps $49MM in Sale of 19 Stations
NASSAU BROADCASTING: Wants Until August 7 to File Chapter 11 Plan
NEVADA CANCER: Court Sets June 27 as Governmental Claims Bar Date
NEW ENGLAND BUILDING: Deering Lumber Buys Stores in Maine
NORTHERN OIL: Moody's Rates new $250MM Sr. Unsecured Notes 'Caa1'
NORTHWEST AIRLINES: 6th Cir. Nixes Pilots' Age Discrimination Suit
OXYSURE SYSTEMS: Converts $251K Notes to Shares
PEMCO WORLD: Committee Retains Otterbourg as Lead Counsel
PEMCO WORLD: Committee Taps Cousins Chipman as Co-Counsel
PEMCO WORLD: Files Schedules of Assets and Liabilities
PENN VIRGINIA: Moody's Rates New $450MM Sr. Unsecured Notes 'B2'
PHILADELPHIA ORCHESTRA: To File Chapter 11 Plan This Month
PINNACLE AIRLINES: USW Outraged With PinnPro Services Unit Closure
PINNACLE AIRLINES: Hearing on Lease Deals Extension Set for May 16
QUANTUM FUEL: Fails to Meet Nasdaq's $1 Bid Price Requirement
RAYMOND JAMES: Moody's Issues Summary Credit Opinion
REDDY ICE: Shareholders Want Official Equity Committee
RESIDENTIAL CAPITAL: Ally Has Treasury Approval on Bankruptcy
ROBERTS HOTELS: Comfort Inn Hotel in Tampa Files for Bankruptcy
SELECT MEDICAL: Moody's Lifts CFR/PDR to 'B1'; Outlook Stable
SHOREBANK CORP: J.H. Cohn Okayed as Committee's Advisor
SNOKIST GROWERS: Truitt Brothers Drops From Bidding
STERLING SHOES: Discloses Late Filing of Annual Financials
TELKONET INC: Names Richard Mushrush as CFO, Matthew Koch as COO
THELEN LLP: Seyfarth Challenges Bankruptcy Trustee's Lawsuit
THOMPSON CREEK: Moody's Cuts CFR to 'Caa1'; Outlook Stable
TRANS-LUX CORP: Board Adopts Amended and Restated Bylaws
TRIMAS CORP: S&P Raises Corporate Credit Rating to 'BB-'
VOLKSWAGEN-SPRINGFIELD: Virginia Dealership Files for Chapter 11
* 9th Cir. Judge Browning Pass Away
* Upcoming Meetings, Conferences and Seminars
*********
261 EAST 78: Has Until July 20 to File Plan of Reorganization
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended 261 East 78 Realty Corp.'s deadline to file its plan of
reorganization through July 20, 2012.
261 East 78 Realty Corp. owns real property located at 261 East
78th Street, in New York. The premises consist of seven
commercial units, three of which are currently occupied. 261 East
78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case
No. 11-15624) on Dec. 6, 2011. The case was assigned to Judge
Robert E. Gerber. The Chapter 11 filing was precipitated by the
commencement of foreclosure proceedings on the premises. The
Debtor scheduled $20.2 million in assets and $18.8 million in
liabilities. The petition was signed by Lee Moncho, president.
3210 RIVERDALE: Section 341(a) Creditors' Meeting Today
-------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of creditors
of 3210 Riverdale Associates LLC on May 9, 2012, at 2:00 p.m. The
meeting will be held at 80 Broad St., 4th Floor, USTM.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
3210 Riverdale Associates LLC filed a Chapter 11 petition
(Bankr. S.D. NY Case No. 12-11286) on March 29, 2012 in Manhattan,
New York, Mark J. Friedman, Esq., at The Law Offices of Mark J.
Friedman P.C., serves as counsel to the Debtor. The Debtor
estimated up to $50 million in assets and up to $50 million in
liabilities.
4KIDS ENTERTAINMENT: To Auction Yu-Gi-Oh! Licenses on June 5
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that 4Kids Entertainment Inc. will hold an auction June 5
testing whether a $10 million offer from Kidsco Media Venture LLC
is the best offer for the licenses for the Yu-Gi-Oh! Animated
television programs. Competing bids are due May 31. A hearing to
approve the sale is set for June 11. The offer from Kidsco
includes debt assumption that's worth another $3.5 million.
About 4Kids Entertainment
New York-based 4Kids Entertainment, Inc., dba 4Kids, is an
entertainment and media company specializing in the youth oriented
market, with operations in these business segments: (i) licensing,
(ii) advertising and media broadcast, and (iii) television and
film production/distribution. The parent entity, 4Kids
Entertainment, was organized as a New York corporation in 1970.
4Kids filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code to protect its most valuable asset -- its rights
under an exclusive license relating to the popular Yu-Gi-Oh!
series of animated television programs -- from efforts by the
licensor, a consortium of Japanese companies, to terminate
the license and force 4Kids out of business.
4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the
Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC,
is the Debtors' claims and notice agent. BDO Capital Advisors,
LLC, is the financial advisor and investment banker. EisnerAmper
LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids
Entertainment disclosed $78,397,971 in assets and $86,515,395 in
liabilities as of the Chapter 11 filing.
Hahn & Hessen LLP serves as counsel to the Official Committee of
Unsecured Creditors. Epiq Bankruptcy Solutions LLC is the
information agent for the Committee.
The Consortium consists of TV Tokyo Corporation, which owns and
operates a television station in Japan; ASATSU-DK Inc., a Japanese
advertising company; and Nihon Ad Systems, ADK's wholly owned
subsidiary. The Consortium is represented by Kyle C. Bisceglie,
Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason
Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP,
in New York.
In January 2012, the bankruptcy judge ruled in favor of 4Kids,
deciding that the Yu-Gi-Oh! property license agreement between the
Debtor and the licensor was not effectively terminated prior to
the bankruptcy filing. Following the ruling, 4Kids entered into a
settlement where it would receive $8 million to end the dispute
over its valuable Yu-Gi-Oh! Property.
AEOLUS PHARMACEUTICALS: Has 4 Additional Projects with JMPS
-----------------------------------------------------------
On Feb. 18, 2011, Aeolus Pharmaceuticals, Inc., entered into a
Research and Manufacturing Agreement with Johnson Matthey
Pharmaceutical Materials, Inc., doing business as Johnson Matthey
Pharma Services, pursuant to which the Company engaged JMPS to,
among other things, analyze, assess and develop a reliable
separations or manufacturing process for certain chemical
compounds as required by the Company and to perform additional
work as may be required or agreed upon by the parties and to
manufacture compounds for the Company. The Company entered into
the JMPS Agreement in furtherance of the Company's efforts under
the development agreement with the Office of Biomedical Research
and Development Authority for the development of AEOL 10150, the
Company's lead compound, as a medical countermeasure against the
pulmonary sub-syndrome of acute radiation syndrome that the
Company announced on Feb. 15, 2011. JMPS provides services to the
Company under the JMPS Agreement through one or more project
engagements, and each project has a detailed project description
and separate fee agreement based on the nature and duration of the
project and the specific services to be performed by JMPS.
On April 30, 2012, the Company and JMPS entered into four
additional project engagements pursuant to the JMPS Agreement.
Under the Additional Projects, JMPS has agreed, among other
things, to conduct oxidation state studies, solid form screening
and characterization, structural elucidation and material testing
with respect to AEOL 10150, as well as perform scale-up
development activities, lab demonstrations and plant-scale
demonstrations of the manufacture of AEOL 10150 under current good
manufacturing processes and other manufacturing processes. JMPS
has also agreed to provide program support to the Company with
respect to the preparation of supporting documents, and to conduct
process and analytical development activities with respect to AEOL
10150.
The term of the JMPS Agreement will continue until the later of
Feb. 16, 2016, or the date on which all projects under the
agreement have been completed or terminated. Other than the
addition of the Additional Projects, the terms of the JMPS
Agreement remain unchanged.
About Aeolus Pharmaceuticals
Based in Mission Viejo, California, Aeolus Pharmaceuticals Inc.
(OTC BB: AOLS) -- http://www.aeoluspharma.com/-- is developing a
variety of therapeutic agents based on its proprietary small
molecule catalytic antioxidants, with AEOL 10150 being the first
to enter human clinical evaluation. AEOL 10150 is a patented,
small molecule catalytic antioxidant that mimics and thereby
amplifies the body's natural enzymatic systems for eliminating
reactive oxygen species, or free radicals. Studies funded by the
National Institutes for Health are currently underway evaluating
AEOL 10150 as a treatment for exposure to radiation, sulfur
mustard gas and chlorine gas. A second compound, AEOL 11207, has
demonstrated efficacy in animal models of Parkinson's disease and
is currently being evaluated as a potential treatment for
epilepsy.
The Company's balance sheet at Dec. 31, 2011, showed $2.77 million
in total assets, $22.85 million in total liabilities, and a
$20.08 million total stockholders' deficit.
Haskell & White LLP, in Irvine, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern
following the fiscal 2011 financial results. The independent
auditors noted that the Company has suffered recurring losses,
negative cash flows from operations and management believes the
Company does not currently possess sufficient working capital to
fund its operations past the second quarter of fiscal 2012.
AEROGROW INTERNATIONAL: Lazarus Discloses 16.9% Equity Stake
------------------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, Lazarus Investment Partners LLLP, Lazarus Management
Company LLC and Justin B. Borus disclosed that, as of April 11,
2012, they beneficially own 73,049,427 shares of common stock of
AeroGrow International, Inc., representing 16.9% of the shares
outstanding. A copy of the filing is available for free at:
http://is.gd/cnzA4e
About AeroGrow
Boulder, Colo.-based AeroGrow International, Inc., is a developer,
marketer, direct-seller, and wholesaler of advanced indoor garden
systems designed for consumer use and priced to appeal to the
gardening, cooking, and healthy eating, and home and office decor
markets.
The Company reported a net loss of $2.71 million on $6.08 million
of product for the nine months ended Dec. 31, 2011. It had a net
loss of $7.9 million on $11.3 million of product sales for the
year ended March 31, 2011, following a net loss of $6.3 million on
$17.3 million of product sales in fiscal 2010.
The Company's balance sheet at Dec. 31, 2011, showed $5.66 million
in total assets, $10.03 million in total liabilities, and a
$4.37 million total stockholders' deficit.
After auditing the Company's fiscal 2011 results, the Company's
independent auditors expressed substantial doubt about the
Company's ability to continue as a going concern. Eide Bailly
LLP, in Fargo, North Dakota, said the Company does not currently
have sufficient liquidity to meet its anticipated working capital,
debt service and other liquidity needs in the near term.
AMERICAN HOME: S&P Gives 'B+' Counterparty Credit Rating
--------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
counterparty credit rating on American Home Mortgage Servicing
Inc. (AHMSI). The outlook is stable.
"Our ratings on AHMSI are based on its short operating history,
concentration in subprime mortgage servicing, dependence on
wholesale funding, and operational risks associated with the
firm's rapid growth," said Standard & Poor's credit analyst Jeff
Zaun. "Good earnings, adequate leverage, and favorable industry
conditions partly offset these weaknesses. The support that
AHMSI has received from its private equity sponsor and strong
elements of its enterprise risk management also support the
rating. As the economy improves, the strong demand for subprime
servicing could moderate, which tempers our overall view of
AHMSI's business model."
"AHMSI was incorporated as a subprime residential loan servicer in
September 2007 when WL Ross & Co. LLC purchased the servicing
platform and related mortgage servicing rights of American Home
Mortgage Holdings Inc. as part of that predecessor company's
Chapter 11 proceedings. The firm subsequently began originating
higher-credit-quality, government sponsored entity (GSE)-
conforming mortgage loans with the aim of establishing not only an
additional revenue source, but also an engine for generating
servicing rights when the demand for subprime servicing abates,"
S&P said.
"AHMSI is exposed to operational risks as it grows its business.
The company has acquired approximately $122 billion in unpaid
principal balance of servicing assets between September 2007 and
February 2009 in three large acquisition transactions. In
addition, management intends to ramp up prime originations. At the
same time, the company has taken steps to expand into other
business lines that will complement its servicing arm, including
real estate brokerage services, valuation services, and insurance
products. Although increased diversification could support the
rating, the growth process adds incremental risk," S&P said.
"Regulatory changes could enhance the firm's strategic positions
by pushing banks to scale back residential origination and
servicing. The firm's recent earnings also support the rating,"
S&P said.
"The stable outlook reflects our belief that the company will grow
fairly quickly and benefit from strong demand for subprime
servicing," said Mr. Zaun. "We also expect the company to ramp up
its prime originations. An upgrade is unlikely in 2012-2013."
"As mortgage markets stabilize and the effect of regulatory
changes becomes clearer, we could raise the rating if the company
is able to manage the risks associated with its growth strategy
and if it reports stable earnings and leverage through 2012-2013.
Specifically, after markets and the firm's business mix stabilize,
we could upgrade AHMSI if its pretax margins remain in excess of
25% and its EBITDA coverage of interest (after adjusting for
nonrecourse debt) remains above 2x. We could lower the rating if
operational miscues or poor market conditions result in multiple
quarters of losses, increase recourse leverage, or limit the
firm's ability to obtain servicing advances or warehouse funding
for originations," S&P said.
AMERICANWEST BANCORP: Holdco Plan Outline Hearing on June 27
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
continued until June 27, 2012, at 2:00 p.m., the hearing to
consider adequacy of the Disclosure Statement explaining Holdco
Advisors L.P.'s proposed Plan of Reorganization for AmericanWest
Bancorporation.
Holdco Plan
According to the Disclosure dated Dec. 19, 2011, Holdco's Plan
provides for the reorganization of the Debtor and for holders of
certain Allowed Claims to receive equity in the Reorganized
Debtor, with the option for each holder of TOPrS Unsecured Claims
and General Unsecured Claims to receive instead a "cash out" right
of payment or a security that results in cash from certain of the
Debtor's assets, including Cash held by the Reorganized Debtor as
of the Effective Date. The Plan Proponent believes the Plan will
maximize the value of the estate. In order to effectuate the
Distributions, the Plan provides that all of the assets of the
Debtor's Estate (including Causes of Action not expressly released
under the Plan) will vest in the Reorganized Debtor, and that the
former officer and director causes of action will vest in the Plan
Trust. The Reorganized Debtor will continue to operate the
Debtor's business as a going concern in the real estate and
financial services sectors, and will pursue litigation (with the
exception of Former Officer and Director Causes of Action, which
will be pursued by the Plan Trustee) and make Distributions under
the Plan. The new board will be appointed as of the Effective
Date and will be responsible for implementing the Plan and
operating the business of the Reorganized Debtor.
Under the Plan, the creditors are projected to recover:
Class 1 Secured Claims 100%
Class 2 TOPrS Unsecured Claims Unknown
Class 3 General Unsecured Claims Unknown
Class 4 Convenience Claims 100%
Class 5 Equity Interests N/A
A full-text copy of the Holdco Disclosure Statement is available
for free at http://bankrupt.com/misc/AMERICANWEST_ds.pdf
The Debtor's Plan
On March 15, 2011, the Debtor filed its Plan of Distribution,
pursuant to which the Debtor proposed to make distributions to
creditors and wind up the Debtor's affairs. The Liquidating Plan
contemplated that, following the plan's effective date, the
Reorganized Debtor's board of directors would be reduced to one
individual, with one remaining shareholder. The single remaining
director was to act as distribution agent, and commence
distributions to all holders of allowed claims under the
Liquidating Plan, which distributions would be made from the sale
proceeds and remaining cash held in the Debtor's bank accounts.
The distribution agent would then be responsible for winding up
the Debtor's business affairs. During a Nov. 3, 2011, status
conference, the Court authorized Holdco to submit a competing plan
which would be considered for confirmation alongside the Debtor's
Liquidating Plan.
About AmericanWest Bancorporation
Headquartered in Spokane, Washington, AmericanWest Bancorporation
(OTC BB: AWBC) -- http://www.awbank.net/-- was a bank holding
company whose principal subsidiary was AmericanWest Bank, which
included Far West Bank in Utah operating as an integrated division
of AmericanWest Bank. AmericanWest Bank was a community bank with
58 financial centers located in Washington, Northern Idaho and
Utah.
AmericanWest Bancorporation filed for Chapter 11 protection
(Bankr. E.D. Wash. Case No. 10-06097) on Oct. 28, 2010. The
banking subsidiary was not included in the Chapter 11 filing.
Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at
Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as
bankruptcy counsel. G. Larry Engel, Esq., at Morrison & Foerster
LLP, also serves as counsel.
The Debtor estimated assets of $1 million to $10 million and debts
of $10 million to $50 million in its Chapter 11 petition.
AmericanWest Bancorporation's estimates exclude its banking unit's
assets and debts. In its Form 10-Q filed with the Securities and
Exchange Commission before the Petition Date, AmericanWest
Bancorporation reported consolidated assets -- including its bank
unit's -- of $1.536 billion and consolidated debts of
$1.538 billion as of Sept. 30, 2010.
In December 2010, AmericanWest completed the sale of all
outstanding shares of AmericanWest Bank to a wholly owned
subsidiary of SKBHC Holdings LLC, in a transaction approved by the
U.S. Bankruptcy Court.
AMWINS GROUP: Moody's Assigns 'B2' Corp. Family Rating
------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and a B2 probability of default rating to AmWINS
Group, Inc., based on the company's proposed recapitalization.
AmWINS is partnering with private equity firm New Mountain Capital
in a recapitalization valued at approximately $1.3 billion.
Funding sources will include equity and subordinated debt funded
by New Mountain Capital, equity retained by the AmWINS management
team, and new secured credit facilities. AmWINS' management team
will retain an ownership stake of at least 30 percent, valued at
over $160 million. The transaction is subject to customary
regulatory approvals and closing conditions and is expected to
close by June 2012. The rating outlook for AmWINS is stable.
Ratings Rationale
"AmWINS' ratings reflect its strong presence in wholesale and
specialty markets and its steady growth in revenues and EBITDA
over the past several years," said Bruce Ballentine, Moody's lead
analyst for AmWINS. "While financial leverage will be elevated
following the recapitalization, we expect the credit metrics to
improve in the year ahead." AmWINS benefits from broad product and
geographic diversification and from its expertise in purchasing
and integrating small and mid-sized firms. These strengths are
tempered by the proposed increase in financial leverage and by
potential liabilities arising from errors and omissions, a risk
inherent in professional services.
Based on Moody's estimates, which incorporate the subordinated
loan from New Mountain Capital, AmWINS' adjusted debt-to-EBITDA
ratio will be in the range of 6.5x-7x following the
recapitalization. The rating agency views such leverage as
aggressive for the rating category and expects it to drop below
6.5x over the next 12-18 months.
Proceeds from the recapitalization will be used to repay AmWINS'
existing debt of approximately $470 million, to purchase all
equity held by the current private equity sponsor and a portion of
the equity currently held by management, and to pay related fees
and expenses. Upon closing of the transaction, Moody's expects to
withdraw AmWINS' existing ratings, including B1 first-lien and
Caa1 second-lien facility ratings (now listed under AmWINS Group,
Inc. (Old) on www.moodys.com), as these facilities will be repaid
and terminated.
Factors that could lead to an upgrade of AmWINS' ratings include:
(i) adjusted (EBITDA - capex) coverage of interest exceeding 2.5x,
(ii) adjusted free-cash-flow-to-debt ratio exceeding 6%, and (iii)
adjusted debt-to-EBITDA ratio below 4.5x.
Factors that could lead to a rating downgrade include: (i)
adjusted (EBITDA - capex) coverage of interest below 1.5x, (ii)
adjusted free-cash-flow-to-debt ratio below 3%, or (iii) adjusted
debt-to-EBITDA ratio remaining above 6.5x.
Moody's has assigned the following ratings (and loss given default
(LGD) assessments):
Corporate family rating B2;
Probability of default rating B2;
$75 million first-lien revolving credit facility Ba2 (LGD2, 16%);
$295 million first-lien term loan Ba2 (LGD2, 16%);
$350 million second lien term loan B3 (LGD4, 65%).
The principal methodology used in this rating was Moody's Global
Rating Methodology for Insurance Brokers and Service Companies
published in February 2012.
Based in Charlotte, North Carolina, AmWINS is a leading wholesale
distributor of specialty insurance products and services. The firm
operates through four divisions: Brokerage, Underwriting, Group
Benefits and International. AmWINS generated total revenues $406
million and net income of $19 million in 2011 on consolidated GAAP
financial statements.
AS SEEN ON TV: Files Form S-1 for 50.49 Million Shares
------------------------------------------------------
As See on TV, Inc., filed with the U.S. Securities and Exchange
Commission a Form S-1 registration statement relating to periodic
offers and sales of 50,491,190 shares of common stock by Steve
Moger, Thomas Jones III, Octagon Capital Partners, et al., which
includes:
-- up to 20,635,313 shares of common stock issued and
outstanding as of the date of this prospectus;
-- up to 609,937 shares of common stock issuable upon the
possible exercise of outstanding warrants exercisable at
$3.00 per share;
-- up to 254,063 shares of common stock issuable upon the
possible exercise of outstanding warrants exercisable at
$5.00 per share;
-- up to 240,000 shares of common stock issuable upon the
possible exercise of outstanding warrants exercisable at
$10.00 per share;
-- up to 8,789,064 shares of common stock issuable upon the
possible exercise of outstanding warrants exercisable at
$0.64 per share;
-- up to 19,800,313 shares of common stock issuable upon the
possible exercise of outstanding warrants exercisable at
$1.00 per share;
-- up to 50,000 shares of common stock issuable upon the
possible exercise of outstanding warrants exercisable at
$7.00 per share;
-- up to 75,000 shares of common stock issuable upon the
possible exercise of outstanding warrants exercisable at
$3.15 per share; and
-- up to 37,500 shares of common stock issuable upon the
possible exercise of outstanding warrants exercisable at
$1.80 per share.
The Company will not receive any of the proceeds from the sale of
common stock covered under this prospectus. To the extent the
warrants are exercised on a cash basis, the Company will receive
proceeds of the exercise price. The Company intends to use those
proceeds for working capital and other general corporate purposes.
The shares of common stock are being offered for sale by the
selling security holders at prices established on the OTC Markets
during the term of this offering. These prices will fluctuate
based on the demand for the shares of common stock.
The selling security holders may sell their shares of common stock
in the public market based on the market price at the time of sale
or at negotiated prices or in transactions that are not in the
public market.
The Company's common stock is quoted on the OTC Markets under the
symbol "ASTV".
A copy of the prospectus is available for free at:
http://is.gd/qBRFXr
About As Seen on TV
Clearwater, Fla.-based As Seen On TV, Inc., is a direct response
marketing company. It identifies, develops, and markets consumer
products.
The Company reported a net loss of $10.20 million on $3.35 million
of revenue for the nine months ended Dec. 31, 2011, compared with
a net loss of $1.22 million on $848,941 of revenue for the same
period during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed
$13.27 million in total assets, $32.73 million in total
liabilities, all current, and a $19.46 million total stockholders'
deficiency.
EisnerAmper LLP, in Edison, New Jersey, expressed substantial
doubt about the Company's ability to continue as a going concern,
following the Company's results for the fiscal year ended
March 31, 2011. The independent auditors noted of the Company's
recurring losses from operations and negative cash flows from
operations.
ATP OIL: Moody's Affirms 'Caa2' CFR; Outlook Developing
-------------------------------------------------------
Moody's Investors Service changed ATP Oil & Gas Corporation's
(ATP) rating outlook to developing from negative. At the same
time, Moody's affirmed ATP's Caa2 Corporate Family Rating (CFR)
and Caa2 secured second lien note rating. The company's SGL-4
Speculative Grade Liquidity rating was unchanged, reflecting weak
liquidity.
Issuer: ATP Oil & Gas Corporation
Outlook Actions:
Outlook, Changed To Developing From Negative
Ratings Rationale
"The outlook change captures the recent liquidity injections that
will allow ATP to more adequately address its capital requirements
through early 2013," said Sajjad Alam, Moody's analyst. "However,
the company's long term success will continue to hinge on its
ability to ramp up production in the Gulf of Mexico (GOM), secure
additional external financing and delever from current burdensome
levels given its looming 2015 debt maturities and substantial
funding needs through 2013."
In March 2012, ATP secured $335 million of additional liquidity by
granting a $100 million overriding royalty interest (ORRI) in its
Clipper property and a $60 million ORRI in its Gomez property, by
monetizing $20 million of net prepaid swaps, and by expanding its
term loan facility by $155 million. These funds along with
internally generated cash flows should reasonably plug the large
funding hole the company is facing this year. ATP also has some
flexibility to defer a portion of its 2012 drilling capex at the
Gomez property and payments related to Octabuoy, the floating
production platform that is currently being built in China.
While these transactions reduce near term funding risks, ATP's
ability to deliver on its production promises will ultimately
dictate its survivability in the high-risk high-payoff deepwater
market. Based on the company's stated production guidance for
Telemark and Clipper and projected decline rates, Moody's
estimates the company is targeting an exit rate that could be as
high as 40,000-44,000 barrels of oil equivalent per day (boe/d)
compared to first quarter 2012 production level of roughly 20,000-
21,000 boe/d. However, Moody's believes the actual exit rate will
be lower, in the 35,000-40,000 boe/d range, given the company's
track record of not meeting its production guidance in the past.
Extremely high debt burden relative to production and cash flow
and ongoing high debt service cost will continue to pressure ATP's
liquidity and financial flexibility beyond 2012. In addition,
ATP's mounting net profits interests and overriding royalty
interest obligations will leave limited cash flow available for
reinvestment in its core oil and gas activities. At December 31,
2011 ATP's debt to average daily production ($89,000/boe) and debt
to PD ($80/boe) were among the highest within Moody's rated E&P
universe, even before factoring in the company's large net profits
interests (NPIs) and ORRIs. Without substantial deleveraging by
2014, the company will be challenged to refinance the $1.86
billion debt maturing in 2015.
The Caa2 Corporate Family Rating reflects ATP's small production
and cash flow base, low drilling risk diversification, high
proportion of proved undeveloped reserves and short PD (proved
developed) reserve life, extremely high leverage and chronic
liquidity challenges. The CFR also takes into account the
projected heavy capital spending in excess of operating cash flow
in through 2013 and the improving but higher cost regulatory
regime in the Gulf of Mexico. The ratings benefit from ATP's
modest proved reserve base, its liquids-weighted (66% in the
fourth quarter of 2011) production profile, and the company's
infrastructure assets. The rating also considers ATP's long
history of acquiring non-producing Gulf of Mexico and North Sea
properties from other producers and subsequently funding,
drilling, developing, completing, and bringing them to production.
The 11.875% second-lien notes comprise a significant majority of
ATP's capital structure and thus, are rated at the same level as
the Caa2 CFR per Moody's Loss Given Default methodology. The notes
are structurally and effectively subordinated to $365 million
first-lien secured debt, liens arising from production platform
and infrastructure monetization, deferred trade payables and
claims on future production arising from substantial net profits
and overriding royalty interests sold to raise liquidity. The
notes are guaranteed by future domestic unrestricted subsidiaries
but not by existing domestic subsidiaries, primarily because
substantially all of the company's domestic assets are currently
held at the parent level. Second lien collateral comprises the
majority of ATP's reserves plus two-thirds of the equity in
foreign subsidiaries.
The developing outlook reflects the execution risk surrounding the
projected steep ramp up in production in the back half of 2012 and
the financing risk involving Octabuoy. A stable outlook will be
considered when these risks have been mitigated.
An upgrade is unlikely in the foreseeable future given ATP's tight
liquidity and very high leverage. In considering an upgrade,
Moody's would look for a debt to production ratio that can be
sustained below $40,000 per boe.
The rating could be downgraded to Caa3 if ATP is unable to bring
the two Clipper wells to production in 2012 and attain an exit
production of rate of 35,000 boe/d by year end. Tight liquidity
could also prompt a downgrade.
The principal methodology used in rating ATP was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
ATP Oil & Gas Corporation (ATP) is a 100% offshore oil and gas
exploration and production (E&P) company based in Houston, Texas.
AVISTAR COMMUNICATIONS: Files Form 10-Q; Incurs $1.4MM Loss in Q1
-----------------------------------------------------------------
Avistar Communications Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $1.44 million on $2.49 million of revenue
for the three months ended March 31, 2012, compared with a net
loss of $2.42 million on $1.39 million of total revenue for the
same period during the prior year.
The Company's balance sheet at March 31, 2012, showed
$3.25 million in total assets, $17.31 million in total liabilities
and a $14.05 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/zkUCxx
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.
AXION INTERNATIONAL: Has MOU to Issue $1.6MM Notes to Investors
---------------------------------------------------------------
Axion International Holdings, Inc., entered into a Memorandum of
Understanding with Melvin Lenkin, Samuel Rose and Allen Kronstadt.
Pursuant to the MOU, the Company agreed to issue to the Investors
or their assigns demand promissory notes in the principal amount
of $1,666,666 with respect to the Demand Note issued to Lenkin or
assigns, $1,666,667 with respect to the Demand Note issued to Rose
or assigns and $1,666,667 with respect to the Demand Note issued
to Kronstadt or assigns. Interest accrues on the unpaid principal
balance of each Demand Note at a rate of 8.00% per annum. The
principal balance of each Demand Note, together with accrued and
unpaid interest, is due and payable at any time after June 30,
2012, on demand.
Pursuant to the terms of the MOU, the Company and the Investors
agree to use commercially reasonable efforts to negotiate and
execute definitive agreements pursuant to which the Investors
shall severally purchase an aggregate of $10,000,000 of
convertible debt from the Company, $5,000,000 of which will be
paid for by converting the outstanding principal balance of the
Demand Notes, and $5,000,000 of which will be paid for in cash on
Dec. 1, 2012.
On Nov. 9, 2011, the Company and Rose entered into a Revolving
Credit Agreement pursuant to which Rose agreed to lend up to
$2,000,000 to the Company on a revolving basis. The obligations
under the Revolving Credit Agreement are secured pursuant to the
Security Agreement, dated Nov. 9, 2011, between the Company and
Rose, and are evidenced by the Revolving Credit Note, dated
Nov. 9, 2011, issued by the Company in favor of Rose.
Based on the Company's records and a Schedule 13G filed by Rose
and Julie Walters on Feb. 9, 2012, Rose and Julie Walters
beneficially own approximately 7.7% of the outstanding shares of
common stock of the Company. Based on the Company's records,
Lenkin beneficially owns approximately 8.2% of the outstanding
shares of common stock of the Company.
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.
BAKERS FOOTWEAR: Reports $3.4 Million Net Income in Q1
------------------------------------------------------
Bakers Footwear Group, Inc., reported net income of $3.37 million
on $53.57 million of net sales for the 13 weeks ended Jan. 28,
2012, compared with net income of $5.16 million on $58.23 million
of net sales for the 13 weeks ended Jan. 29, 2011.
The Company reported a net loss of $10.95 million on
$185.09 million of net sales for the 52 weeks ended Jan. 28, 2012,
compared with a net loss of $9.29 million on $185.62 million of
net sales for the 52 weeks ended Jan. 29, 2011.
The Company's balance sheet at Jan. 28, 2012, showed
$41.71 million in total asset, $58.32 million in total liabilities
and a $16.61 million shareholders' deficit.
Peter Edison, chairman and chief executive officer of Bakers
Footwear Group commented, "As we anticipated, our fourth quarter
performance reflected a difficult dress boot season, which
resulted in lower fourth quarter sales and margins. On a positive
note, we achieved profitability in the quarter, and advanced our
cost reduction goals while positioning our inventory to capitalize
on the spring season. In 2011, we made progress toward the
priorities we set at the start of the year to position our Company
for improved sales productivity and achieving long term
profitability. We achieved our fourth consecutive year of
positive comparable store sales and increased the percentage of
exclusive brands in our Bakers stores to provide further
differentiation in our offerings. We also generated strong growth
in our multi-channel sales which grew by 31.2% in fiscal 2011.
As we begin fiscal 2012 we are focused on delivering $10 million
in margin enhancements and cost cuts while providing our customers
with compelling fashion. We are pleased to see a positive
response to our spring assortments and remain confident in our
strategies and our ability to realize improved operating results
in fiscal 2012."
A copy of the press release is available for free at:
http://is.gd/8MOTcV
About Bakers Footwear
St. Louis, Mo.-based Bakers Footwear Group, Inc. (OTC BB: BKRS.OB)
is a national, mall-based, specialty retailer of distinctive
footwear and accessories for young women. The Company's
merchandise includes private label and national brand dress,
casual and sport shoes, boots, sandals and accessories. The
Company currently operates 231 stores nationwide. Bakers' stores
focus on women between the ages of 16 and 35. Wild Pair stores
offer fashion-forward footwear to both women and men between the
ages of 17 and 29.
The Company reported a net loss of $10.95 million for the
year ended Jan. 28, 2012, a net loss of $9.29 million for the year
ended Jan. 29, 2011, and a net loss of $9.08 million for the year
ended Jan. 30, 2010.
After auditing the Company's financial results for fiscal 2012,
Ernst & Young LLP, in St. Louis, Missouri, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
substantial losses from operations in recent years and has a
significant working capital deficiency.
Bankruptcy Warning
The Company said in the Form 10-K for the year ended Jan. 28,
2012, that if it does not achieve its updated business plan and
its margin improvement and cost reduction plan, or if the Company
were to incur significant unplanned cash outlays, it would become
necessary for the Company to quickly seek additional sources of
liquidity, or to find additional cost cutting measures. Any
future financing would be subject to the Company's financial
results, market conditions and the consent of the Company's
lenders. The Company may not be able to obtain additional
financing or it may only be able to obtain such financing on terms
that are substantially dilutive to the Company's current
shareholders and that may further restrict the Company's business
activities. If the Company cannot obtain needed financing, its
operations may be materially negatively impacted and the Company
may be forced into bankruptcy or to cease operations.
BALQON CORPORATION: Issues $891,000 of Conv. Promissory Notes
-------------------------------------------------------------
During March and June 2009, Balqon Corporation issued to 34
accredited investors (i) an aggregate of $1,000,000 of its 10%
Unsecured Subordinated Convertible Promissory Notes which were
convertible into shares of the Company's common stock at a
conversion price of $1.00 per share and (ii) three-year warrants
to purchase an aggregate of 1,000,000 shares of the Company's
common stock at an exercise price of $1.50 per share. The
Original Warrants expired on March 31, 2012.
On April 12, 2012, the Company entered into separate Amendment and
Exchange Agreements effective as of March 30, 2012, with the
holders of $891,000 of the $916,500 in outstanding principal of
the Original Notes. Under the terms of the Exchange Agreements,
the maturity date of the Original Notes held by the Exchange
Holders was extended from March 31, 2012, to April 30, 2012. On
April 30, 2012, the Company consummated the transactions
contemplated by the Exchange Agreements.
On April 30, 2012, under the terms of the Exchange Agreements, the
Company issued to the Exchange Holders (i) an aggregate of
$891,000 of its 10% Secured Subordinated Convertible Promissory
Notes in exchange for the $891,000 in principal of Original Notes
held by the Exchange Holders and (ii) warrants to purchase an
aggregate of 975,000 shares of the Company's common stock at an
exercise price of $0.40 per share, subject to adjustment.
The Exchange Notes will mature on March 31, 2013. Interest on the
Exchange Notes is payable in cash quarterly at a rate of 10% per
annum, commencing with the quarter ending June 30, 2012. The
Exchange Notes are convertible at any time prior to repayment, in
whole or in part, into shares of the Company's common stock at a
conversion price of $0.40 per share, subject to adjustment
including full ratchet anti-dilution protection.
The Exchange Notes are secured under the terms of a Security
Agreement entered into between the Company, the Exchange Holders
and Michaels Law Group, as collateral agent, on April 30, 2012.
Under the terms of the Security Agreement the Exchange Holders
were granted a senior subordinated security interest in certain of
the Company's personal property. The security interest granted
under the terms of the Security Agreement is subordinated to (i)
certain outstanding senior indebtedness of the Company and (ii) up
to $2,500,000 of indebtedness incurred by the Company from any
bank, savings and loan or other commercial or financial
institutions.
The New Warrants are exercisable, in whole or in part, at any time
prior to March 31, 2015, into 975,000 shares of the Company's
common stock at an exercise price of $0.40 per share, subject to
adjustment including full ratchet anti-dilution protections.
About Balqon Corporation
Harbor City, California-based Balqon Corporation is a developer
and manufacturer of electric drive systems, charging systems and
battery systems for trucks, tractors, buses, industrial equipment
and renewable energy storage devices. The Company also designs
and assembles electric powered yard tractors, short haul drayage
tractors and inner city trucks utilizing our proprietary drive
systems, battery systems and charging systems.
Following the Company's 2011 results, Weinberg & Company, P.A., in
Los Angeles, California, expressed substantial doubt about
Balqon's ability to continue as a going concern. The independent
auditors noted that the Company has a shareholders' deficiency and
has experienced recurring operating losses and negative operating
cash flows since inception.
The Company reported a net loss of $7.05 million on $2.13 million
of revenues for 2011, compared with a net loss of $4.30 million on
$677,745 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.94 million
in total assets, $7.02 million in total liabilities, and a
stockholders' deficit of $4.08 million.
BEEF PRODUCTS: Closes 3 of 4 Facilities Amid 'Pink Slime' Uproar
----------------------------------------------------------------
The Wall Street Journal's David Kesmodel reports that Beef
Products Inc., said it would close three of its four plants as it
struggles to recover from the "pink slime" controversy. Beef
Products plans to close facilities in Amarillo, Texas; Garden
City, Kan.; and Waterloo, Iowa, on May 25. The move will trigger
more than 650 job cuts.
BPI said it would continue to operate its plant in South Sioux
City, Neb., at reduced capacity.
"While we had hoped to be able to resume operation at those
plants, that is not going to be possible in the immediate future,"
Beef Products spokesman Rich Jochum said in an emailed statement
Tuesday, according to WSJ.
BPI makes ground-beef additive dubbed "pink slime" by critics.
WSJ recounts BPI suspended operations at the three plants about
five weeks ago, after the beef additive fell victim to a social-
media feeding frenzy fueled in part by replays of a year-old
television clip in which celebrity chef Jamie Oliver criticized
how it is made. WSJ notes the additive has been used for nearly
two decades, and the U.S. Department of Agriculture says it is
safe. But several big supermarket chains, including Safeway Inc.,
said they would stop buying the additive amid the uproar on
Facebook, Twitter and other social-media sites.
BERNARD L. MADOFF: Trustee Sues Madoff Sons' Wives for $57.5MM
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the trustee liquidating Bernard L. Madoff Investment
Securities LLC revised his complaint against the Madoff family by
adding a wife, a widow, and a former wife of the sons of Bernard
Madoff as defendants on $57.5 million in claims. The claims
against the spouses are part of an existing $255 million complaint
against the Madoff family.
According to the report, the revised complaint on May 4 was made
possible by an April 4 ruling from the bankruptcy judge who
allowed trustee Irving Picard to make some claims for the first
time against the spouses. In the same decision, U.S. Bankruptcy
Judge Burton R. Lifland blocked Mr. Picard from belatedly suing
the spouses on most of the claims already pending against other
family members. The lawsuit was originally filed in October 2009.
The report recounts that before the new claims were added last
week, Mr. Picard was suing Madoff's two sons and other family
members to recover $255 million they received that was allegedly
stolen from customers. Judge Lifland said it was too late to sue
the two wives and one former wife on most of those claims. Judge
Lifland nonetheless said the trustee was in time to sue the wives
and a former wife for what they later received that was initially
given to other family members. Judge Lifland also said the
trustee was in time to sue the wives for constructive trust and
unjust enrichment, even though he might later rule that the
socalled in pari delicto defense bars the claims.
The report relates that the new complaint adds Stephanie Mack,
Mark Madoff's widow, and Deborah Madoff, Andrew Madoff's wife, as
defendants on $54.5 million in claims for unjust enrichment. Mr.
Picard also now sues for $3 million that was later transferred to
the two wives and to Susan Elkin, Mark Madoff's first wife.
The family lawsuit is Picard v. Estate of Mark Madoff,
09-01503, U.S. District 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.)
The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.
Mr. Picard has so far made only one distribution in October of
$325 million for 1,232 customer accounts. Uncertainty created by
the appeals has limited Mr. Picard's ability to distribute
recovered funds. Outstanding appeals include the $5 billion
Picower settlement and the $1.025 billion settlement.
BERWIND REALTY: Section 341(a) Meeting Set for May 14
-----------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of creditors
of Berwind Realty, LLC, on May 14, 2012, at 3:00 p.m. The
meeting will be held at 341 meeting room, Ochoa Building, 500
Tanca Street, First Floor, San Juan, Puerto Rico.
Creditors are requested to file their proofs of claim by Aug. 13,
2012, for non-governmental units and Oct. 9, 2012, 2012, for
governmental units.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
About Berwind Realty
Berwind Realty, LLC, filed a Chapter 11 petition (Bankr. D. P.R.
Case No. 12-02701) in Old San Juan, Puerto Rico, on April 5, 2012.
Berwind Realty, a real estate firm, scheduled assets of $53.8
million and liabilities of $58.1 million. Saleh Yassin signed the
petition as president. The Debtor is represented by Charles
Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law Offices.
BERWIND REALTY: Wants to Hire Cuprill as Attorney
-------------------------------------------------
Berwind Realty, LLC, seeks permission from the Bankruptcy Court to
employ Charles A. Cuprill, Esq., P.S.C., Law Offices, as its
counsel.
The Debtor has retained Cuprill as its attorneys on the basis of
$25,000 retainer, against which the law firm will bill on the
basis of $350 per hour, plus expenses, for work performed or to be
performed by Charles A. Cuprill-Hernandez, $250 per hour for any
senior associate, $125 for junior associates, and $85 per hour for
paralegals.
The Debtor assures the Court that Cuprill is a disinterested
person as defined in Section 101(14) of the Bankruptcy Code.
About Berwind Realty
Berwind Realty, LLC, filed a Chapter 11 petition (Bankr. D. P.R.
Case No. 12-02701) in Old San Juan, Puerto Rico, on April 5, 2012.
Berwind Realty, a real estate firm, scheduled assets of $53.8
million and liabilities of $58.1 million. Saleh Yassin signed the
petition as president. The Debtor is represented by Charles
Alfred Cuprill, Esq., at Charles A Cuprill, PSC Law Offices.
BERWIND REALTY: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Berwind Realty LLC filed with the Bankruptcy Court its schedules
of assets and liabilities disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $52,431,410
B. Personal Property $1,402,936
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $55,291,646
E. Creditors Holding
Unsecured Priority
Claims $11,806
F. Creditors Holding
Unsecured Non-priority
Claims $2,823,145
----------- -----------
TOTAL $53,834,346 $58,126,598
A copy of the filing is available for free at:
http://bankrupt.com/misc/BERWIND_sal.pdf
About Berwind Realty
Berwind Realty, LLC, a real estate firm, filed a Chapter 11
petition (Bankr. D. P.R. Case No. 12-02701) in Old San Juan,
Puerto Rico, on April 5, 2012. Saleh Yassin signed the petition
as president. The Debtor is represented by Charles Alfred
Cuprill, Esq., at Charles A Cuprill, PSC Law Offices.
BRIER CREEK: Court Approves Bidencope to Valuate Property
---------------------------------------------------------
The Bankruptcy Court approved the retention of Damon Bidencope and
the firm of Bidencope & Associates by Brier Creek Corporate Center
Associates Limited Partnership, et al., to prepare written
appraisals and to the extent needed, supporting testimony in
deposition and at trial, with respect to the fair market value of
certain property owned by the Debtors.
The Court authorized a flat fee of $22,300 for appraisals of the
Property, which has been paid by the Debtors prior to the Petition
Date. The Court also approved additional compensation for time
and expenses incurred in connection with preparation for and
testimony in deposition or at trial, at customary hourly rates,
and subject to allowance and approval in accordance with the
provisions of the Bankruptcy Code.
About Brier Creek
Brier Creek Corporate Center Associates Limited, Whitehall
Corporate Center #4, LLC, and seven other related entities
affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead
Case No. 12-01855) on March 9, 2012. The Debtors own real
property located in Wake County, North Carolina and Mecklenburg
County, North Carolina. In most instances, the real property
owned by the Debtors consists of land upon which is constructed
commercial or industrial buildings consisting of office, service
or retail space.
The affiliates that also sought bankruptcy protection are: Brier
Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail
at Brier Creek, LLC; Service Retail at Whitehall II L.P.; Shopton
Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall
Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC.
Brier Creek is a 106-acre development that is to have 2.8 million
square feet of commercial space. Whitehall has 146 acres and will
have 4 million square feet on completion. Brier Creek Corporate
scheduled assets of $19.7 million and liabilities of $18.1
million.
Judge Stephani W. Humrickhouse oversees the case. Northen Blue,
LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr.
and the firm Rayburn Cooper & Durham, P.A., serve as special
counsel. Grant Thornton LLP is the accountant. Bidencope &
Associates is the appraiser. The petitions were signed by Terry
Bradshaw, vice president.
BRIER CREEK: Bankr. Administrator Unable to Form Committee
----------------------------------------------------------
The Bankruptcy Administrator for the Eastern District of North
Carolina informed the Bankruptcy Court that it was unable to
organize and recommend to the Court the appointment of a committee
of creditors holding unsecured claims against Brier Creek
Corporate Center Associates Limited Partnership, et al. As of the
date of the 11 U.S.C. Sec. 341 meeting of creditors, there were
insufficient indications of willingness to serve on a committee.
About Brier Creek
Brier Creek Corporate Center Associates Limited, Whitehall
Corporate Center #4, LLC, and seven other related entities
affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead
Case No. 12-01855) on March 9, 2012. The Debtors own real
property located in Wake County, North Carolina and Mecklenburg
County, North Carolina. In most instances, the real property
owned by the Debtors consists of land upon which is constructed
commercial or industrial buildings consisting of office, service
or retail space.
The affiliates that also sought bankruptcy protection are: Brier
Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail
at Brier Creek, LLC; Service Retail at Whitehall II L.P.; Shopton
Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall
Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC.
Brier Creek is a 106-acre development that is to have 2.8 million
square feet of commercial space. Whitehall has 146 acres and will
have 4 million square feet on completion. Brier Creek Corporate
scheduled assets of $19,713,147 and liabilities of $18,086,183.
Judge Stephani W. Humrickhouse oversees the case. Northen Blue,
LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr.
and the firm Rayburn Cooper & Durham, P.A., serve as special
counsel. Grant Thornton LLP is the accountant. Bidencope &
Associates is the appraiser. The petitions were signed by Terry
Bradshaw, vice president.
BRIER CREEK: Can Hire Northen Blue as Bankruptcy Counsel
---------------------------------------------------------
The Bankruptcy Court authorized Brier Creek Corporate Center
Associates Limited Partnership and its debtor-affiliates to employ
John A. Northen and the firm of Northen Blue, LLP, as its
bankruptcy counsel.
John A. Northen, Esq., a partner at the firm, will lead the
engagement. Mr. Northen's customary rate is $450 per hour.
About Brier Creek
Brier Creek Corporate Center Associates Limited, Whitehall
Corporate Center #4, LLC, and seven other related entities
affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead
Case No. 12-01855) on March 9, 2012. The Debtors own real
property located in Wake County, North Carolina and Mecklenburg
County, North Carolina. In most instances, the real property
owned by the Debtors consists of land upon which is constructed
commercial or industrial buildings consisting of office, service
or retail space.
The affiliates that also sought bankruptcy protection are: Brier
Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail
at Brier Creek, LLC; Service Retail at Whitehall II L.P.; Shopton
Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall
Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC.
Brier Creek is a 106-acre development that is to have 2.8 million
square feet of commercial space. Whitehall has 146 acres and will
have 4 million square feet on completion. Brier Creek Corporate
scheduled assets of $19,713,147 and liabilities of $18,086,183.
Judge Stephani W. Humrickhouse oversees the case. Northen Blue,
LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr.
and the firm Rayburn Cooper & Durham, P.A., serve as special
counsel. Grant Thornton LLP is the accountant. Bidencope &
Associates is the appraiser. The petitions were signed by Terry
Bradshaw, vice president.
BROADSIGN INT'L: JEDFam Had No Competition to Buy Business
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that BroadSign International Inc. didn't succeed in
attracting any competing bids. Consequently, the May 8 auction
was canceled. At a May 10 hearing, BroadSign will ask the
bankruptcy court in Delaware to approve sale of the business to
JEDFam Group LLC in exchange for $5.5 million in secured debt plus
the amount needed to cure defaults on contracts going along with
the sale.
About BroadSign International
BroadSign International Inc., a Boise, Idaho-based developer of
software for digital signs, filed a Chapter 11 petition (Bankr.
D. Del. Case No. 12-10789), estimating assets of less than
$10 million and debts of up to $50 million.
Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as
bankruptcy counsel to the Debtor, SSG Capital Advisors, LLC, is
the investment banker, and Walker, Truesdell, Roth & Associates,
is the provider of staffing services.
BUILDERS FIRSTSOURCE: Files Form 10-Q, Posts $19.2MM Loss in Q1
---------------------------------------------------------------
Builders FirstSource, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $19.18 million on $219.38 million of sales for the
three months ended March 31, 2012, compared with a net loss of
$21.24 million on $162.82 million of sales for the same period a
year ago.
The Company's balance sheet at March 31, 2012, showed
$495.31 million in total assets, $412.87 million in total
liabilities, and $82.44 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/CdrLx7
About Builders FirstSource
Headquartered in Dallas, Texas, Builders FirstSource Inc. --
http://www.bldr.com/-- supplies and manufactures building
products for residential new construction. The Company operates
in 9 states, principally in the southern and eastern United
States, and has 55 distribution centers and 51 manufacturing
facilities, many of which are located on the same premises as its
distribution facilities.
Builders FirstSource reported a net loss of $95.51 million on
$700.34 million of sales for the year ended Dec. 31, 2010,
compared with a net loss of $61.85 million on $677.88 million of
sales during the prior year. The Company also reported a net loss
of $48.29 million for the nine months ended Sept. 30, 2011.
* * *
In April 2012, Standard & Poor's Ratings Services revised its
outlook on Builders FirstSource Inc. to positive from negative.
S&P also affirmed its 'CCC' corporate credit rating on the
company.
"The outlook revision reflects our assessment that Builders
FirstSource's operating conditions are improving such that we now
expect the building products manufacturer and distributor to post
positive annual EBITDA for the first time since 2007, albeit at
very low levels," said Standard & Poor's credit analyst James
Fielding. "In our view, improved profitability will better
position the company to refinance some of its expensive floating
rate debt and possibly close its interest coverage shortfall over
the next 12 months."
BURLINGTON COAT: S&P Rates New $950.5-Mil. Term Loan Facility 'B'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned Burlington, N.J.-based
Burlington Coat Factory Warehouse Corp.'s (BCF) proposed $950.5
million senior secured term loan B-1 facility due 2017 its issue-
level rating of 'B' (one notch above the 'B-' corporate credit
rating on the company). 'We also assigned this debt a recovery
rating of '2', indicating our expectation of substantial (70% to
90%) recovery for lenders in the event of a payment default," S&P
said.
"At the same time, we raised the issue-level rating on BCF's $1
billion senior secured term loan B facility due 2017 to 'B' from
'B-' (one notch above the corporate credit rating). We also
revised the recovery rating to '2' from '3'. The '2' recovery
rating indicates our expectation of substantial (70% to 90%)
recovery for lenders in the event of a payment default," S&P said.
"The company plans to use the proceeds from the new term loan B-1
to repay the existing term loan B. Upon completion of the
refinancing and the repayment of the existing term loan B
facility, we will withdraw our ratings on the term loan facility.
The ratings on the new issues are subject to review of final
terms and documents," S&P said.
"In addition, we affirmed our 'B-' corporate credit rating on the
company. The rating outlook is stable," S&P said.
"We also affirmed our 'CCC' senior unsecured debt rating on BCF's
$450 million 10% senior unsecured notes. The '6' recovery rating
on the unsecured notes remains unchanged and indicates our
expectation of negligible (0% to 10%) recovery in the event of a
payment default," S&P said.
"The ratings on BCF, a specialty off-price apparel and home goods
retailer, reflect Standard & Poor's view that the company's
financial risk profile will remain 'highly leveraged' with thin
cash flow protection measures despite modestly improving operating
performance and sustained margins in 2012," S&P said.
"We estimate that the company should be able to maintain
'adequate' liquidity with moderate cash balances," said Standard &
Poor's credit analyst Jayne Ross. "We assess the company's
business risk profile as 'vulnerable,' given its participation in
the intensely competitive and highly fragmented off-price apparel
and home goods industry. In addition, we continue to expect the
business to be highly seasonal, with more than 50% of the
company's sales occurring between September and January. We
believe its business will remain subject to macroeconomic
factors."
"Our stable rating outlook mostly reflects BCF's adequate
liquidity position and our expectation that the business will
generate sufficient cash flow from improving operating performance
so that credit measures remain at or close to current levels," S&P
said.
"We expect the company to have a cushion of at least 25% under its
most restrictive term loan covenants over the next year. If the
covenant cushion declines to less than 15%, we could consider a
negative rating action. Although unlikely, we could consider a
negative action if the sluggish U.S. economy stresses BCF's
profitability and credit metrics deteriorate, with EBITDA interest
coverage declining to about 1.6x or less. We estimate that if
margins were compressed by about 200 basis points (bps) or more,
then EBITDA interest coverage would fall to about this level. A
very steep decline in EBITDA could also significantly narrow the
company's covenant cushion to 15% or less," S&P said.
"Conversely, we could consider a positive rating action if
business conditions improve such that operating performance
(including comparable-store sales) remains positive and credit
measures also continue to improve, including total debt to EBITDA
sustained below 6x or less despite the company's expansion plans.
For this to occur, we estimate that EBITDA and margins, or some
combination of the two, would need to increase by more than 200
bps and be sustained at that level," S&P said.
CENTRAL FALLS, RI: Rejection of Cop's Employment Contract Affirmed
------------------------------------------------------------------
Chief District Judge Mary M. Lisi affirmed the Bankruptcy Court
ruling authorizing the state-appointed receiver for the City of
Central Falls to reject an employment contract between the City
and Joseph P. Moran, III, the city's former chief of police,
pursuant to which Mr. Moran was engaged to serve as "Colonel" of
the Central Falls Police Department for a period of five years.
Mr. Moran took an appeal from the Order, arguing that the
Receiver's rejection of the Contract was the result of "bad faith,
whim, or caprice." The District Court, however, held that the
Bankruptcy Court applied the correct legal standard in reviewing
the City's request for approval to reject the Contract.
The case is JOSEPH P. MORAN, III, Appellant, v. CITY OF CENTRAL
FALLS, Appellee, C.A. No. 11-494-ML (D. R.I.). A copy of the
Court's May 4, 2012 Decision and Order is available at
http://is.gd/vGXsLzfrom Leagle.com.
CENTRAL FEDERAL: Amends 20-Mil. Shares Offering Prospectus
----------------------------------------------------------
Central Federal Corporation filed with the U.S. Securities and
Exchange Commission a post-effective amendment no. 1 to its Form
S-1. The Company is conducting a rights offering and, if
necessary, an offering of common stock to the public on a best
efforts basis at a price of $1.50 per share. The Company is
distributing, at no charge to its stockholders, non-transferable
subscription rights to purchase up to 17,000,000 shares of the
Company's common stock.
Each subscription right will entitle holders to purchase 20.5901
shares of the Company's common stock at the subscription price of
$1.50 per share.
The Company has separately entered into standby purchase
agreements with certain standby purchasers. Pursuant to the
standby purchase agreements, the Standby Purchasers have agreed to
acquire from the Company, at the subscription price of $1.50 per
share, a total of 3,000,000 shares of common stock. The Standby
Purchasers have conditioned their purchase of shares of common
stock upon the receipt by Central Federal Corporation, referred to
as CFC, of $13.5 million in net proceeds from the rights offering
and the public offering, if any. As a result, the purchase by the
Standby Purchasers (3,000,000 shares of common stock) is
conditioned on the sale by CFC of 10,000,000 shares in the rights
offering and the public offering, if any. Although the 3,000,000
shares subscribed for by the Standby Purchasers are included in
the registration statement of which this prospectus forms a part,
the shares subscribed for by the Standby Purchasers are in
addition to the up to 17,000,000 shares offered in the rights
offering and the public offering, if any. The aggregate maximum
number of shares that may be sold in the rights offering, any
public offering and to the Standby Purchasers is 20,000,000.
A copy of the filing is available for free at:
http://is.gd/OoYjYi
About Central Federal
Fairlawn, Ohio-based Central Federal Corporation (Nasdaq: CFBK) is
the holding company for CFBank, a federally chartered savings
association formed in Ohio in 1892. CFBank has four full-service
banking offices in Fairlawn, Calcutta, Wellsville and Worthington,
Ohio.
Central Federal reported a net loss of $5.42 million in 2011, a
net loss of $6.87 million in 2010, and a net loss of $9.89 million
in 2009.
The Company's balance sheet at Dec. 31, 2011, showed
$250.92 million in total assets, $240.97 million in total
liabilities and $9.94 million in total stockholders' equity.
Following the 2011 results, Crowe Horwath LLP, in Cleveland, Ohio,
expressed substantial doubt about the Company's ability to
continue as a going concern. The Company's auditors noted that
the Holding Company and its wholly owned subsidiary (CFBank) are
operating under regulatory orders that require among other items,
higher levels of regulatory capital at CFBank. The Company has
suffered significant recurring net losses, primarily from higher
provisions for loan losses and expenses associated with the
administration and disposition of nonperforming assets at CFBank.
These losses have adversely impacted capital at CFBank and
liquidity at the Holding Company. At Dec. 31, 2011, regulatory
capital at CFBank was below the amount specified in the regulatory
order. Failure to raise capital to the amount specified in the
regulatory order and otherwise comply with the regulatory orders
may result in additional enforcement actions or receivership of
CFBank.
Regulatory Matters
On May 25, 2011, Central Federal Corporation and CFBank each
consented to the issuance of an Order to Cease and Desist (the
Holding Company Order and the CFBank Order, respectively, and
collectively, the Orders) by the Office of Thrift Supervision
(OTS), the primary regulator of the Holding Company and CFBank at
the time the Orders were issued.
The Holding Company Order required it, among other things, to: (i)
submit by June 30, 2011, a capital plan to regulators that
establishes a minimum tangible capital ratio commensurate with the
Holding Company's consolidated risk profile, reduces the risk from
current debt levels and addresses the Holding Company's cash flow
needs; (ii) not pay cash dividends, redeem stock or make any other
capital distributions without prior regulatory approval; (iii) not
pay interest or principal on any debt or increase any Holding
Company debt or guarantee the debt of any entity without prior
regulatory approval; (iv) obtain prior regulatory approval for
changes in directors and senior executive officers; and (v) not
enter into any new contractual arrangement related to compensation
or benefits with any director or senior executive officer without
prior notification to regulators.
The CFBank Order required CFBank to have by Sept. 30, 2011, and
maintain thereafter, 8% Tier 1 (Core) Capital to adjusted total
assets and 12% Total Capital to risk weighted assets. CFBank will
not be considered well-capitalized as long as it is subject to
individual minimum capital requirements.
CFBank did not comply with the higher capital ratio requirements
by the Sept. 30, 2011 required date.
CHINA SHENGHUO: Won't File Form 15 at This Time
-----------------------------------------------
China Shenghuo Pharmaceutical Holdings, Inc., disclosed in a
filing with the U.S. Securities and Exchange Commission its intent
not to file Form 15 at this time and continue to be a reporting
company until such time as it is allowed to suspend its reporting
obligations.
On April 20, 2012, the Company announced its intention to file a
Form 15, which would, upon such filing, suspend the Company's
obligations to file certain reports with the U.S. Securities &
Exchange Commission, including reports on Form 10-K, 10-Q,and 8-K.
It was anticipated that such Form 15 would be filed on or about
May 10, 2012, upon the effectiveness of the Form 25 - Notification
of Removal from Listing and/or Registration under Section 12(b) of
the Securities Exchange Act of 1934, as amended, filed in
connection with the Company's voluntary delisting of its common
stock from trading on NYSE Amex.
In discussions between the Company's legal counsel and the SEC,
the SEC has taken the position that the exemption that the Company
had sought to rely upon under Section 15(d) of the Exchange Act to
suspend its reporting obligations is unavailable to it at this
time. As such, the Company at this time will not file a Form 15,
and it will continue to be a reporting company under Section 15(d)
of the Exchange Act until such time as it is allowed to suspend
its reporting obligations, which the Company expects to be no
later than the first quarter of 2013. The Company therefore is
preparing its quarterly report on Form 10-Q for the three months
ended March 31, 2012, and expects to file it as soon as
practicable.
About China Shenghuo
Located in Kunming National Economy & Technology Developing
District, China, China Shenghuo Pharmaceutical Holdings, Inc.,
was incorporated in the State of Delaware on May 24, 2005. The
Company is primarily engaged in the research, development,
manufacture, and marketing of pharmaceutical, nutritional
supplement and cosmetic products. Almost all of the Company's
products are derived from the medicinal herb Panax notoginseng,
also known as Sanqi, Sanchi or Tienchi. Panax notoginseng is a
greyish-brown or greyish-yellow plant that only grows in a few
geographic locations on earth, one of which is Yunnan Province in
southwest China, where the Company's operations are located. The
main root of Panax notoginseng is cylindrically shaped and is
most commonly one-to-six centimeters long and one-to-four
centimeters in diameter. Panax notoginseng saponins (PNS), the
active ingredient in Panax notoginseng, is extracted from the
plant using high-tech equipment and in accord with Good
Manufacturing Practice ("GMP") standards. The Company's main
product, Xuesaitong Soft Capsules, accounted for approximately
84.5% of the Company's sales for the year ended Dec. 31, 2011.
Following the 2011 results, Marcum Bernstein & Pinchuk LLP, in New
York, N.Y., expressed substantial doubt China Shenghuo's ability
to continue as a going concern. The independent auditors noted
that the Company has a significant working capital deficiency.
The Company reported net income $131,707 on $44.16 million of
sales for 2011, compared with net income of $1.28 million on
$32.70 million of sales for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$58.31 million in total assets, $52.80 million in total
liabilities, and stockholders' equity of $5.51 million.
CHRIST HOSPITAL: Has Final OK to Obtain $5MM Deposit Financing
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey entered a
final order authorizing Christ Hospital to obtain postpetition
financing in a form of cash advances and other extensions of
credit from Hudson Hospital Propco, LLC, and Hudson Hospital Opco,
LLC, in the aggregate principal amount of $5 million through a
multi-draw term loan.
The Court found that the Debtor has an immediate need to obtain
the Deposit DIP Financing and to continue with the current post-
petition financing from HFG Healthco-4 LLC and Healthcare
Finance Group LLC. The Debtor does not have sufficient available
sources of working capital and financing to carry on the operation
of its business until the closing of the sale of substantially all
of its assets without the Deposit DIP Financing and HFG Financing.
All of the Deposit DIP Financing will have the status of an
allowed superpriority administrative expense claim pursuant to
Section 364(c) of the Bankruptcy Code, having priority over any
and all administrative expenses, adequate protection claims and
all other claims against the Debtor.
The Debtor is authorized to use the Cash Collateral during the
period from April 16, 2012, until the occurrence and continuation
of a breach of the Deposit DIP Financing.
As security for the full and timely payment of the good faith
deposit, the Deposit Lender is granted liens on, and security
interest in, all of the Collateral, subject only to the carve-out
and senior liens.
A copy of the DIP Final Order is available for free at:
http://bankrupt.com/misc/CHRIST_dipfinalord.pdf
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.
CLEARWATER SEAFOODS: S&P Assigns 'B' Corporate; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Halifax, N.S.-based Clearwater Seafoods
L.P. The outlook is stable.
"We also assigned our 'BB-' issue-level rating (two notches above
the corporate credit rating on the company) to Clearwater's
proposed C$75 million senior secured term loan A due 2017 and
proposed US$135 million senior secured term loan B due 2018. We
assigned a recovery rating of '1' to the debt, indicating our
expectation of very high (90%-100%) recovery for creditors in the
event of default. We do not rate the company's proposed C$65
million senior secured revolving credit facility due 2017," S&P
said.
"The company is in the process of refinancing its debt, which will
consolidate most of its existing loans, extend maturities, and
lower pricing once completed," said Standard & Poor's credit
analyst Lori Harris. "We understand that proceeds from the
proposed term loans will be used to repay much of the existing
debt," Ms. Harris added.
"The ratings on Clearwater reflect what Standard & Poor's
considers the company's highly leveraged financial risk profile
and weak business risk profile. Our financial risk assessment is
based on the company's weak cash flow and credit protection
measures, as well as historically volatile operating performance.
Our business risk assessment reflects Clearwater's narrow product
focus and participation in the commodity-oriented commercial
fishing industry, partially offset by the company's position as
the largest holder of shellfish quota in Canada, improved
operating performance, and a proven record of operating under the
seafood industry's highly regulated environment," S&P said.
"The stable outlook on Clearwater reflects our view that the
company's operating performance and credit protection measures
will continue to improve in the medium term. Furthermore, we
expect the company to generate positive free cash flow this year,
thereby increasing Clearwater's financial flexibility. We could
raise the ratings in the medium term if the company strengthens
its operating performance, cash flow, and adjusted credit metrics
on a sustainable basis, including a minimum funds from operations
(FFO) to debt of 20%, a maximum debt leverage of 4x, and a minimum
EBITDA cushion of 15% within its financial covenants.
Alternatively, we could lower the ratings if the company's
operating performance falls below our expectations or if
Clearwater's adjusted credit ratios or financial flexibility
weaken, resulting in FFO to debt below 10%, debt to EBITDA above
5x, or a covenant cushion of less than 10%," S&P said.
COMMERCIAL VEHICLE: Reports $12 Million Net Income in Q1
--------------------------------------------------------
Commercial Vehicle Group, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $11.99 million on $236.99 million of revenue for the
three months ended March 31, 2012, compared with net income of
$3.27 million on $182.51 million of revenue for the same period
during the prior year.
The Company's balance sheet at March 31, 2012, showed
$437.09 million in total assets, $409.29 million in total
liabilities and $27.80 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/h8jFZ8
About Commercial Vehicle Group
New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq:
CVGI) supplies fully integrated system solutions for the global
commercial vehicle market, including the heavy-duty truck market,
the construction and agricultural markets, and the specialty and
military transportation markets. The Company has facilities
located in the United States in Arizona, Indiana, Illinois, Iowa,
North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington
and outside of the United States in Australia, Belgium, China,
Czech Republic, Mexico, Ukraine and the United Kingdom.
* * *
In January 2012, Standard & Poor's Ratings Services raised its
corporate credit rating on New Albany, Ohio-based Commercial
Vehicle Group Inc. (CVG) to 'B' from 'B-'. "Our rating outlook is
stable," S&P said.
"The upgrade reflects the progress made by CVG during the past two
years of North American commercial vehicle production expansion to
improve revenues, EBITDA, and leverage," said Standard & Poor's
credit analyst Nancy Messer. "We believe that for 2011, CVG will
have reduced lease-adjusted leverage to below 5x and earned
adjusted EBITDA of about $67 million. We expect free cash flow in
2012 to break even or move into positive territory."
* * *
This concludes the Troubled Company Reporter's coverage of
Commercial Vehicle until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.
CONSOL ENERGY: S&P Affirms 'BB' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB' corporate credit rating, on Canonsburg, Pa.-based Consol
Energy Inc. "At the same time, we revised the rating to stable
from positive," S&P said.
"The rating affirmation and stable rating outlook reflect our view
that the company's performance and cash generation should be
strong enough to maintain credit metrics within our expectations
for the 'BB' rating and fund its reduced, but still substantial,
capital programs," said Standard & Poor's credit analyst Marie
Shmaruk. "Our rating incorporates our expectation that debt to
EBITDA will remain below 5x and funds from operations (FFO) to
total debt between 15% and 20% during the next year or so. It also
reflects our view that along with the rest of the coal industry,
Consol is facing a number of challenges that will cause
performance to fall short of its 2011 results. These include lower
metallurgical (met) coal prices from lower global demand and fewer
weather-related supply disruptions in Australia, higher costs for
safety and environmental compliance, rising labor costs, and low
natural gas prices that affect the demand for coal and decrease
earnings in its natural gas business. Moreover, over the next
several years, more-stringent environmental regulations for power
plants make it less likely that new coal-fired generation plants
will be built in the U.S. and could reduce the demand for coal and
pressure prices."
"The 'BB' corporate credit rating reflects the combination of what
we consider to be Consol's 'satisfactory' business risk profile
and 'significant' financial risk profile. The company is an
efficient producer of underground coal, has a significant reserve
base, and, over time, we expect it to benefit from its energy-
diversification strategy. The ratings also reflect its high degree
of operating leverage, the challenges inherent in coal mining
(including increasing regulatory scrutiny), and lower-than-
anticipated natural gas prices. Consol's significant financial
risk profile reflects high financial leverage, large ongoing
capital expenditures, and high adjusted debt levels. As of March
31, 2012, total debt was about $6.5 billion (adjusted for $345
million of capitalized operating leases, $422 million of tax-
effected asset-retirement obligations, $2.3 billion of tax-
effected postretirement benefit obligations, and $230 million of
other adjustments)," S&P said.
"We expect EBITDA for 2012 to be $1.4 billion to $1.7 billion,
compared with $2.1 billion in 2011, and do not expect meaningful
improvements in 2013. These expectations assume steam coal prices
of about $62 per ton, reflecting current firm tonnage pricing; met
coal of about $150 per ton at the mine, reflecting weaker global
prices; unhedged natural gas prices of about $2.00; and roughly a
10%-15% increase in costs, reflecting a potential 2 million to 3
million tons reduction in volumes. We estimate that debt to EBITDA
will be below 5x and FFO to total debt will be between 15% and
20%, consistent with the 'BB' rating at this point in the cycle.
As of March 31, 2012, debt to EBITDA was 3.3x and FFO to total
debt about 18%," S&P said.
"In the longer term, we expect that demand for Northern
Appalachian coal will improve as it replaces some higher-cost
Central Appalachian coal and that met coal prices will improve as
global economic activity improves, benefitting from strong global
demand and limited supply. Natural gas, despite our expectations
for continued relatively low prices, should remain a significant
and growing contributor to Consol's performance as volumes
increase. To the extent markets are weak and Consol generates less
cash flow than we currently anticipate, we would expect the
company to pare back capital spending and take other steps to
improve its financial profile, including potential further asset
sales," S&P said.
"Consol has significant coal and gas reserves -- 4.5 billion tons
of coal reserves and 3.5 Tcfe (trillion cubic feet) of proved gas
reserves -- ensuring long-term production. Its coal reserves are
conducive to long-wall mining, a very efficient underground mining
method that accounts for the vast majority of its coal production.
However, long-wall mining is also capital intensive, resulting in
relatively high fixed costs," S&P said.
"The company has benefitted over the past couple of years from
exporting a portion of its Northern Appalachian steam coal into
the seaborne met coal market, which has higher prices than
realized domestically, somewhat offsetting higher costs and
natural gas price weakness. As of March 31, 2012, the company had
most of its planned 2012 steam coal volumes committed and priced,
at about $62 per ton, but most of its high quality met coal
remains uncommitted. About 48% of planned 2012 natural gas
production is hedged at $5.25 per Mcf (thousands of cubic feet),
but the company is still significantly exposed to currently low
(under $3.00 per Mcf) gas prices," S&P said.
"The stable outlook reflects our view that Consol's credit metrics
will remain consistent with our expectations for the 'BB' rating.
Pressure on mining costs, persistent low natural gas prices,
volatile met coal prices, and regulatory and environmental
pressures on the company's businesses could make it difficult to
show sustained improvements during the next couple of years. As a
result, in 2012 and 2013 we expect credit measures to remain
consistent with the 'BB' rating with debt to EBITDA below 5x and
FFO to total debt to between 15% and 20%," S&P said.
"We could take a positive rating action if over time economic
improvement and lower production from higher-cost Central
Appalachia supports steady demand and sufficient pricing for the
company's coal to offset cost pressures, and if natural gas prices
rebound, resulting in credit metrics consistent with a higher
rating. We would expect that Consol would be able to maintain on
average EBITDA of $1.8 billion to $2.0 billion, debt to EBITDA
below 4x, and FFO to total debt about 20%. We also assume that
debt levels will not increase significantly from current levels,
reflecting our expectations that Consol's capital expenditure
program will be funded with internally generated funds," S&P said.
"We could take a negative rating action if the company is unable
to realize sufficient pricing to fund its significant plans to
increase gas production, if a disruption were to occur at one of
its key coal operations, if costs escalate meaningfully, or if
coal demand deteriorates unexpectedly, resulting in weaker credit
measures. Specifically, we would consider a negative rating action
if debt to EBITDA rose to more than 5x and FFO to total debt fell
below 15%, and these measures were likely to be maintained at
those levels for an extended period," S&P said.
CYBERDEFENDER CORP: Guthy-Renker Approved to Buy Business
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that CyberDefender Corp. was given permission by the
bankruptcy court on Monday to sell the business to Guthy-Renker
LLC in exchange for $12 million in debt and $250,000 cash. There
were no competing bids, so an auction was canceled. Guthy-Renker
is a direct marketer. It is owed $11.6 million in secured debt
and another $3.3 million under a services agreement.
About CyberDefender
Los Angeles, Calif.-based CyberDefender Corporation provides
remote LiveTech services and security and computer optimization
software to the consumer and small business market. The Company's
mission is to bring to market advanced solutions to protect
computer users against Internet viruses, spyware, identity theft
and related security threats.
In regulatory filings, the Company disclosed $7.96 million in
total assets, $42.54 million in total liabilities, and a
$34.58 million total stockholders' deficit, as of Sept. 30, 2011.
CyberDefender filed for Chapter 11 protection (Bankr. D. Del. Case
No. 12-10633) on Feb. 23, 2012. The Company entered into an asset
purchase agreement with GR Match, an affiliate of Guthy-Renker, to
sell substantially all of its assets to GR Match. The buyer
committed to provide up to $4.6 million in debtor-in-possession
financing.
XRoads Solutions Group, LLC serves as financial advisor to the
Company and Pachulski Stang Ziehl & Jones LLP (James E. O'Neill)
serves as bankruptcy counsel.
DELTA PETROLEUM: To Reorganize Under Laramie Energy II Venture
--------------------------------------------------------------
Delta Petroleum Corporation on Tuesday obtained the Bankruptcy
Court's blessing to negotiate and enter into a plan sponsorship
agreement with Laramie Energy II, LLC. Judge Kevin Carey,
however, directed the Debtors to return to Court to seek further
approval of any breakup fee that may be paid to Laramie in the
event the Debtors close a deal with another entity.
At the hearing, the Debtors did not proceed with respect to the
assumption and assignment of any unexpired leases or executory
contracts as part of the plan sponsorship deal. All objections
related to assumption or assignment or cure amounts are continued
to a date to be determined.
Carl E. Lakey, President and Chief Executive Officer of Delta,
said the Debtors have determined that Laramie's Plan sponsorship
proposal, which is outlined in a "Summary of Company Formation
Documents", was the highest and best offer for the Debtors'
assets.
Pursuant to the Summary of Company Formation Documents, Laramie
and the Reorganized Debtors will form Piceance Energy, LLC, to
serve as an asset holding company which owns the oil and gas,
surface real estate, and related assets formerly owned by each of
Laramie and Delta in Garfield and Mesa Counties, Colorado. The
Assets, and any subsequent interests acquired by Piceance, will be
maintained, operated, developed, and sold under the direction of
Laramie as manager.
Laramie will assign assets free and clear of all liens, except for
existing JPMorgan Chase Bank mortgage liens, in exchange for a
66.66% Membership Interest in Piceance. Delta, subject to an
order confirming its bankruptcy-exit plan, will assigns free and
clear of all liens, claims and interests to the fullest extent
permitted under Sections 363(f)and 1129(b)(2)(A)(ii) of the
Bankruptcy Code, including without limitation any claims based on
a successor liability theory or that Piceance or Laramie is a
successor of Delta in any respect, and with approval of the
Bankruptcy Court under the Plan, in exchange for a 33.34%
Membership Interest.
The deal is expected to close July 31, 2012. Thereafter, Piceance
as directed by Laramie will enter into a four-year $400 million
Secured Revolving Credit Facility with J.P.Morgan Securities and
Wells Fargo Bank, N.A. The initial Borrowing Base will be not
less than $140 million. Laramie and Delta will guarantee the debt
on a several basis (i.e. not joint and several).
According to Mr. Lakey, Laramie has offered the highest overall
economic value as compared to the other bids received to date
because of the combined value offered as a result of (i) the
significant value of the assets that Laramie has agreed to
contribute to a joint venture with Delta in which Delta will be
provided a 33.34% interest and (ii) the cash component of the
offer.
Delta has since late 2008 explored a variety of strategic
alternatives, including but not limited to joint venture
opportunities, equity sales and asset sales. Around that time,
the Debtors hired an investment banker to conduct a marketing
process targeted at attracting interested parties but were unable
to consummate a transaction with any entity. Since that time, the
Debtors have continued to pursue a wide array of restructuring
alternatives, including the possibility of a sale of their assets.
To assist them with their efforts, the Debtors hired Evercore
Group L.L.C. in December 2009 to assist with their strategic
alternatives process and in December 2011 hired Evercore to serve
as their investment banker in connection with their chapter 11
cases. The Debtors have engaged in several rounds of marketing
efforts to sell part or all of their assets since December 2009,
and in fact did sell their significant portions of their noncore
assets prior to the petition date.
In December 2011, the Debtors sought authority to pursue a sale
pursuant to section 363 of the Bankruptcy Code. By Order dated
Jan. 11, 2012, the Court established bidding procedures for a 363
Sale.
Evercore subsequently continued to solicit prospective bidders to
determine whether they would be interested in pursuing a sale or
restructuring transaction with the Debtors. The Debtors worked
together with Evercore to provide due diligence information to all
prospective bidders that entered into confidentiality agreements
with the Debtors.
The Debtors later determined that Delta's significant tax
attributes could be utilized by another future party to
potentially create additional value for Delta's stakeholders.
However, the tax attributes were at risk of being lost by the
Debtors under a 363 Sale structure due to relevant statutory
provisions. As a result, on March 15, 2012, the Debtors sought
entry of an order amending the terms of the bidding procedures to
allow interested bidders to submit, and for the Debtors to
consider, bids to sponsor a plan of reorganization.
By Order dated March 22, 2012, the Court approved an amendment to
the Bidding Procedures Order that provided additional time for
interested parties to conduct due diligence regarding, among other
things, Delta's tax attributes, which enabled certain parties to
submit proposals to be sponsors of a Plan, and extended the date
to receive proposals for a 363 Sale or a Plan from March 21, 2012
to April 18, 2012.
Prior to the bid deadline, the Debtors received nine bids from
interested parties. These bids included both 363 Sale and Plan
bids. These bids were received from a variety of entities,
including both public and private entities.
After considering the bids received, the Debtors decided that the
best way to maximize value would be to conduct an informal
competitive process to consider bids for Plan sponsorship as well
as bids for the Debtors' assets rather than hold a pure section
363 auction.
Six prospective bidders, along with the Debtors and their
noteholders, attended a competitive negotiation process on April
24 and 25, 2012.
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors' restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
DELTA PETROLEUM: Wins OK to Hire Pinckney as Conflicts Counsel
--------------------------------------------------------------
Delta Petroleum Corporation and its debtor-affiliates obtained
approval from the Bankruptcy Court to employ Pinckney, Harris &
Weidinger, LLC, as special conflicts counsel at these hourly
rates:
Attorneys $275 - $400
Paralegal Staff $170
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors' restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
DELTA PETROLEUM: Class Plaintiff Objects to Bar D&O Lawsuits
------------------------------------------------------------
Delta Petroleum Corporation was slated to appear in Wilmington,
Delaware Bankruptcy Court Tuesday, May 8, 2012, at 3:00 p.m. on
its request to extend the automatic stay to lawsuits against its
current officers or directors. At the hearing, Delta was to
square off with plaintiffs in a class action lawsuit who objected
to the request. The directors and officers subject to the
lawsuits are Daniel J. Taylor, Carl E. Lakey and Kevin K. Nanke.
George Darwin is the proposed lead plaintiff in a putative
securities class action lawsuit filed on April 18, 2012 in the
United States District Court for the District of Colorado,
entitled George Darwin, Individually and on Behalf of All Others
Similarly Situated v. Daniel J. Talor, et al., Civ. Act. No. 12-
cv-01038-CMA-CBS, on behalf of all persons who purchased or
otherwise acquired the publicly traded securities of Delta between
Nov. 9, 2010 and Nov. 9, 2011, inclusive, for damages arising from
violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder, by certain of
Delta's current officers or directors.
Delta said that under the terms of its D&O insurance policy, it is
somehow obligated to fund, on a post-petition basis, a $1,000,000
retention on behalf of the Non-Debtor Defendants.
According to Mr. Darwin, the Debtor seeks the extraordinary remedy
of enjoining the Securities Litigation brought by a non-debtor,
from proceeding against the Non-Debtor Defendants. As a basis for
the extraordinary relief requested in the Motion, Delta asserts,
in the most conclusory fashion and with no evidentiary support,
that (i) the Securities Class Action seeks property of Delta's
estate by virtue of Delta's purported indemnification obligation;
(ii) the risk of collateral estoppel, vicarious liability and
evidentiary prejudice; and (iii) the Non-Debtor Defendants will be
distracted from focusing their efforts on Delta's reorganization
if compelled to defend the Securities Litigation.
"These arguments have no merit and therefore, while the Motion
fundamentally fails on an evidentiary and substantive basis, the
Court need not even address the merits of the Motion, because the
Motion is deficient on several threshold grounds," Mr. Darwin
said.
Mr. Darwin also said the Debtor's Motion is a request for a
preliminary injunction which may only be pursued by way of an
adversary proceeding. Therefore, the Court should deny the Motion
because it is not the appropriate means to obtain injunctive
relief.
Mr. Darwin also pointed out that the Debtor has employed a chief
restructuring officer, who apparently will oversee the
reorganization, as well as financial advisors who, it appears,
will have primary roles in the Chapter 11 process, thereby leaving
little from which the Non-Debtor Defendants will be distracted.
Bankruptcy Counsel for George Darwin are:
Michael S. Etkin, Esq.
Ira M. Levee, Esq.
LOWENSTEIN SANDLER PC
65 Livingston Avenue
Roseland, NJ 07068
Tel: (973) 597-2500
Fax: (973) 597-2481
Counsel for Mr. Darwin is:
Trig Smith, Esq.
ROBBINS GELLER RUDMAN & DOWD LLP
655 West Broadway, Suite 1900
San Diego, CA 92101
Tel: (619) 231-1058
Fax: (619) 231-7423
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors' restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
The U.S. Trustee told the bankruptcy judge that there was
insufficient interest from creditors to form an official committee
of unsecured creditors.
DENNY'S CORP: Files Form 10-Q; Posts $5.8MM Net Income in Q1
------------------------------------------------------------
Denny's Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $5.86 million on $126.73 million of total operating revenue for
the quarter ended March 28, 2012, compared with net income of
$4.12 million on $135.80 million of total operating revenue for
the same period during the prior year.
The Company's balance sheet at March 28, 2012, showed
$336.24 million in total assets, $338.88 million in total
liabilities, and a $2.64 million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/c5thDT
About Denny's Corporation
Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ:
DENN) -- http://www.dennys.com/-- Denny's is one of America's
largest full-service family restaurant chains, consisting of 1,348
franchised and licensed units and 232 company-owned units, with
operations in the United States, Canada, Costa Rica, Guam, Mexico,
New Zealand and Puerto Rico.
The Company said in its annual report for the year ended Dec. 28,
2011, that as the Company is heavily franchised, its financial
results are contingent upon the operational and financial success
of its franchisees. The Company receives royalties, contributions
to advertising and, in some cases, lease payments from its
franchisees. The Company has established operational standards,
guidelines and strategic plans for its franchisees; however, the
Company has limited control over how its franchisees' businesses
are run. While the Company is responsible for ensuring the
success of its entire chain of restaurants and for taking a longer
term view with respect to system improvements, the Company's
franchisees have individual business strategies and objectives,
which might conflict with the Company's interests. The Company's
franchisees may not be able to secure adequate financing to open
or continue operating their Denny's restaurants. If they incur
too much debt or if economic or sales trends deteriorate such that
they are unable to repay existing debt, it could result in
financial distress or even bankruptcy. If a significant number of
franchisees become financially distressed, it could harm the
Company's operating results through reduced royalties and lease
income.
* * *
Denny's carries 'B2' corporate family and probability of default
ratings from Moody's Investors Service and a 'B+' corporate credit
rating from Standard & Poor's.
As reported by the TCR on April 20, 2012, Standard & Poor's
Ratings Services withdrew all of its ratings, including the 'B+'
corporate credit rating on Spartanburg, S.C.-based Denny's Corp.
at the company's request. There is no rated debt outstanding.
DEWEY & LEBOEUF: Associates Told Their Jobs Would End Next Week
---------------------------------------------------------------
The Wall Street Journal's Steve Eder and Jennifer Smith report
that a lawyer at Dewey & LeBoeuf LLP said some associate attorneys
at the firm were told Tuesday that their employment will end next
week. WSJ also says the firm's secretaries were told on Monday
that Friday will be their last day.
The Journal notes that for many associates, Tuesday's meeting was
the first real communication regarding their fate, even as scores
of partners defected and basic law-firm functions were cut off,
including mailroom services and cars to ferry attorneys home after
late nights at the office.
"We are pretty happy to have some closure, instead of this drip
torture," one associate said, according to WSJ.
A person familiar with the matter told WSJ a syndicate of banks
that lent Dewey $75 million is in continued talks with the firm
and has largely gained control over the firm's expenditures. The
firm and the banks have until May 15 to work out a deal, according
to the person.
A spokesman for Dewey & LeBoeuf didn't respond to a request
seeking comment, WSJ says.
DEWEY & LEBOEUF: Ex-Vice Chairman Pierce Asserts $61-Mil. Claim
---------------------------------------------------------------
Peter Lattman, writing for The New York Times, reports that Morton
A. Pierce, a former vice chairman of Dewey & LeBoeuf, has told the
law firm that it owes him $61 million. Mr. Pierce submitted his
resignation on Friday and moved to White & Case with seven other
partners. NY Times relates Mr. Pierce informed Dewey of the
amount of money he claimed that he was owed in his resignation
letter, according to a person with direct knowledge of the matter
who requested anonymity because he was not authorized to speak
publicly about it.
Reached at White & Case on Monday, Mr. Pierce declined to comment,
NY Times says.
NY Times notes Mr. Pierce, 63, was one of the highest-paid
partners at Dewey, garnering a package paying him $6 million a
year for six years. He was the chairman of the legacy firm Dewey
Ballantine, which in 2007 merged with LeBoeuf, Lamb, Greene &
MacRae to form Dewey & LeBoeuf. A mergers-and-acquisitions
specialist, Mr. Pierce has deep ties to the major banks and has
done numerous deals for the Walt Disney Company.
NY Times says it is unclear what the $61 million comprises, but
Dewey's partners' losses could come from a combination of money
they invested in the firm, deferred compensation and retirement
funds, legal industry experts say.
EAGLE POINT: Wants to Extend Plan Filing Deadline Until July 2
--------------------------------------------------------------
Arthur Critchell Galpin and Eagle Point Developments, LLC, ask the
U.S. Bankruptcy Court for the District of Oregon to extend by 62
days the May 2, 2012 deadline set forth to retain the benefits of
the automatic stay in this case by either filing a confirmable
plan of reorganization or commencing monthly payments to secured
lenders.
EPD has tentatively reached in concept a comprehensive settlement
with US Bank, its secured lender with a lien against a significant
portion of EPD's real property. The settlement, if and when
finalized, would either be incorporated into a plan of
reorganization, but could alternatively obviate the need for
further reorganization of EPD and result in the dismissal of its
bankruptcy case and thereafter payment in full to all of its
creditors. However, the settlement has not been documented and
likely will not be documented and noticed to the Court and the
creditors to this case until sometime after May 2, 2012.
To the extent that the settlement is not finalized, or not
approved by the Court, or is better incorporated into a plan
rather than approved, EPD will need to keep its ability to
reorganize and US Bank subject to the automatic stay.
EPD, with US Bank's consent, requests to extend the deadline to
commence payments or file a plan through July 2, 2012.
About Eagle Point Developments
Eagle Point, in Medford, Oregon, developed the Eagle Point Golf
Course, which was built in 1996. Eagle Point filed for Chapter 11
bankruptcy (Bankr. D. Ore. Case No. 12-60353) on Feb. 1, 2012.
Judge Thomas M. Renn oversees the case, taking over from Judge
Frank R. Alley III. Sussman Shank LLP serves as bankruptcy
attorneys. The petition was signed by Arthur Critchell Galpin,
managing member.
Eagle Point's case is jointly administered with Arthur Critchell
Galpin's personal bankruptcy case (Bankr. D. Ore. Case No. 12-
60362), which is the lead case. In schedules, Mr. Galpin
disclosed total assets of $35.7 million and total liabilities of
$51.7 million.
EAGLE POINT: Gets Court OK to Hire Scott Law as Conflicts Counsel
-----------------------------------------------------------------
Arthur Critchell Galpin and Eagle Point Developments, LLC, sought
and obtained permission from the U.S. Bankruptcy Court for the
District of Oregon to employ Loren S. Scott and the firm The Scott
Law Group as independent conflicts counsel for the purpose of
assisting Debtor with analysis of potential defenses to a
potential claim by the estate of Arthur Critchell Galpin for
purposes of participating as necessary in the drafting of a Joint
Disclosure Statement and Plan of Reorganization.
The Debtor wishes to engage Scott Law pursuant to a stipulation
between Debtor and the Office of the U.S. Trustee on March 21,
2012, to perform the special purpose engagement, with
representation to be effective as of April 13, 2012; provided
however, that no services will be undertaken as to the special
purpose engagement except upon further written request of Debtor,
following the completion of services to be performed by Philip
Scott McCleery and Gartland Nelson McCleery & Wade on behalf of
the estate of Arthur Critchell Galpin.
Scott Law currently holds a retainer in the amount of $8,570 to
secure payment of the services to be rendered.
To the best of the Debtor's knowledge, Scott Law is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Eagle Point Developments
Eagle Point, in Medford, Oregon, developed the Eagle Point Golf
Course, which was built in 1996. Eagle Point filed for Chapter 11
bankruptcy (Bankr. D. Ore. Case No. 12-60353) on Feb. 1, 2012.
Judge Thomas M. Renn oversees the case, taking over from Judge
Frank R. Alley III. Sussman Shank LLP serves as bankruptcy
attorneys. The petition was signed by Arthur Critchell Galpin,
managing member.
Eagle Point's case is jointly administered with Arthur Critchell
Galpin's personal bankruptcy case (Bankr. D. Ore. Case No. 12-
60362), which is the lead case. In schedules, Mr. Galpin
disclosed total assets of $35.7 million and total liabilities of
$51.7 million.
EAGLE POINT: Has Nod to Hire Shirley Delsman Botts as Accountant
----------------------------------------------------------------
Arthur Critchell Galpin and Eagle Point Developments, LLC, sought
and obtained permission from the U.S. Bankruptcy Court for the
District of Oregon to employ Shirley Delsman Botts as certified
public accountant for the purpose of assisting the Debtor with
preparation of income tax returns.
Ms. Botts will advise, prepare and file federal and state income
tax returns, for an hourly rate of $175.
To the best of the Debtor's knowledge, Ms. Botts is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Eagle Point Developments
Eagle Point, in Medford, Oregon, developed the Eagle Point Golf
Course, which was built in 1996. Eagle Point filed for Chapter 11
bankruptcy (Bankr. D. Ore. Case No. 12-60353) on Feb. 1, 2012.
Judge Thomas M. Renn oversees the case, taking over from Judge
Frank R. Alley III. Sussman Shank LLP serves as bankruptcy
attorneys. The petition was signed by Arthur Critchell Galpin,
managing member.
Eagle Point's case is jointly administered with Arthur Critchell
Galpin's personal bankruptcy case (Bankr. D. Ore. Case No. 12-
60362), which is the lead case. In schedules, Mr. Galpin
disclosed total assets of $35.7 million and total liabilities of
$51.7 million.
DYNEGY INC: Levi & Korsinsky Commences Class Action Lawsuit
-----------------------------------------------------------
Levi & Korsinsky announces that a class action lawsuit has been
commenced in the United States District Court for the Southern
District of New York on behalf of investors who purchased Dynegy
Inc. between Sept. 2, 2011, and March 9, 2012.
The complaint alleges that defendants made materially false and
misleading statements and failed to disclose materially adverse
information about the Company's business and operations. In
particular, the complaint alleges that the Company knew or
recklessly failed to inform investors that Dynegy's wholly-owned
subsidiary fraudulently transferred direct ownership in one of
Dynegy's indirectly owned subsidiaries to the Company.
On March 9, 2012, a bankruptcy-court examiner disclosed that
Dynegy improperly acquired direct ownership of the indirectly
owned subsidiary through a fraudulent transfer. According to an
article in The Wall Street Journal, this "asset reshuffling"
specifically "benefited billionaire Carl Icahn and other
shareholders at the expense of creditors." Upon this news, Dynegy
stock fell approximately 35% below the closing price of the
previous day.
Levi & Korsinsky is a national firm with offices in New York and
Washington D.C. The firm has extensive expertise in prosecuting
securities litigation involving financial fraud, representing
investors throughout the nation in securities and shareholder
lawsuits. The attorneys at Levi & Korsinsky have been appointed
by numerous courts throughout the country to serve as lead counsel
on behalf of shareholders in major securities lawsuits and have
successfully recovered multimillion-dollar damages awards on
behalf of investors.
About Dynegy Inc.
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
In August, Dynegy implemented an internal restructuring that
created two units, one owning eight primarily natural gas-fired
power generation facilities and another owning six coal-fired
plants.
Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and
said it was discussing options for managing its debt load with
certain bondholders.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7 to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet.
Dynegy Holdings disclosed assets of $13.77 billion and debt of
$6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each
estimated $100 million to $500 million in assets and debt.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues.
Dynegy was advised by Lazard Freres & Co. LLC and the Debtor
Entities' financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors has tapped Akin Gump
Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16,
2011.
Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY
NEWS. The newsletter tracks the Chapter 11 proceeding undertaken
by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or
215/945-7000).
EAST PROVIDENCE: Moody's Confirms 'Ba1' GO Rating; Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has confirmed the City of East
Providence's (RI) Ba1 general obligation rating, affecting
approximately $28.7 million in outstanding parity debt; the
outlook is stable. The bonds are secured by a general obligation
unlimited tax pledge. Concurrently, Moody's has also confirmed the
Baa2 rating on the Rhode Island Health and Education Building
Corporation Bond Issue, Series 2007C; the outlook is stable.
Summary Rating Rationale
Confirmation of the Ba1 rating reflects: the city's deteriorated
financial position, compounded by a large accumulated deficit in
the school unrestricted fund; a continued reliance on cash flow
borrowing; and increasing fixed costs related to pension and OPEB
liabilities. The rating also incorporates the recent appointment
of a budget commission by the state, to provide additional
oversight to the city as it manages its ongoing fiscal challenges.
Assignment of the stable outlook reflects Moody's belief that the
city's demonstrated progress in addressing its structural
challenges will provide near term-stability to its credit quality.
Strengths
- Moderately-sized tax base
- State appointed budget commission in place to help stabilize
financial position
- City is budgeting for full pension and OPEB funding in 2013
- City has identified several new revenue streams and
significantly cut expenditures
Challenges
- Continued weakness in financial operations
- Heavy reliance on cash-flow borrowing, with uncertain market
access
- Severely underfunded pension funds and increasing fixed costs,
including pension obligations
- Limited financial flexibility from growing accumulated deficit
in the School Unrestricted Fund
- Limited ability to raise property tax revenue under city and
state property tax caps
Outlook
The stable outlook reflects Moody's expectation that the city will
make appropriate adjustments as needed to maintain fiscal
stability. The city's ability to make progress toward structural
budget balance, address its accumulated deficit and improve its
liquidity will be important to future credit analysis.
What could change the rating - UP
- Reduced reliance on cash-flow borrowing
- Return to, and maintenance of, structurally balanced operations
and improved liquidity levels
- Elimination of the accumulated deficit in the School
Unrestricted Fund
- Significant expenditure reductions
- Improved pension liability funding status and full funding of
public safety pension ARC
What could change the rating - DOWN
- Failure to obtain necessary future cash-flow borrowing
- Failure to produce a balanced fiscal 2013 budget
- Failure to achieve and maintain structural balance
- Weakening of General Fund and School Fund balance positions
- Further weakening of public safety pension plan and an absence
of increased contribution levels
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
EMMIS COMMUNICATIONS: Board Adopts New Bonus Plan for 2013
----------------------------------------------------------
The Compensation Committee of Emmis Communications Corporation's
Board of Directors adopted a new bonus plan for the fiscal year
ending Feb. 28, 2013.
Under the plan, bonuses paid to the Company's executive officers
will be based entirely on the attainment of specified EBITDA
goals. At the end of each fiscal quarter, the Committee will
determine the extent to which pre-established quarterly domestic
radio EBITDA, international radio EBITDA, interactive EBITDA and
total Company EBITDA performance goals were achieved. The
Committee will award a quarterly bonus to each participant based
upon the extent to which the quarterly performance goal was
achieved, with no quarterly bonus to be paid under the plan if
less than 95% of the quarterly performance goal was achieved. The
quarterly bonus, if any, will be up to 20% of the participant's
annual target bonus amount. At the end of the fiscal year, the
Committee will determine the extent to which the pre-established
annual domestic radio EBITDA, international radio EBITDA,
interactive EBITDA and total Company EBITDA performance goals were
achieved and will award an annual bonus to each participant based
upon the extent to which the annual performance goal was achieved,
with no annual bonus to be paid under the plan if less than 95% of
the annual performance goal was achieved. The annual bonus, if
any, will be up to the participant's annual target bonus amount
less quarterly bonuses received during the year. The Company will
also establish an excess bonus pool of 10% of the amount by which
total Company EBITDA for the year exceeds the total Company EBITDA
goal for the year. Each participant in the plan who achieves
their specified annual EBITDA goal will participate in the excess
bonus pool in proportion to their annual target bonus amount.
Quarterly bonuses, if any, will be paid following the filing of
the Company's quarterly report on Form 10-Q for the applicable
quarter, and annual bonuses, if any, will be paid following the
filing of the Company's annual report on Form 10-K. Bonuses are
expected to be paid in cash, but may be paid in shares of the
Company's Class A Common Stock if the Committee determines to do
so. The plan is generally designed to comply with Internal
Revenue Code Section 162(m) to maximize the tax deductibility of
any bonuses paid under the plan. As such, the plan is
administered under the Company's 2010 Equity Compensation Plan.
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation -- http://www.emmis.com/-- owns and operates 22 radio
stations serving New York, Los Angeles, Chicago, St. Louis,
Austin, Indianapolis, and Terre Haute, as well as national radio
networks in Slovakia and Bulgaria. The company also publishes six
regional and two specialty magazines.
For the nine months ended Nov. 30, 2011, the Company reported net
income attributable to common shareholders of $97.72 million on
$185.08 million of net revenues.
The Company had a net loss of $11.54 million on $251.31 million of
net revenues for the year ended Feb. 28, 2011, compared with a net
loss of $118.49 million on $242.56 million of net revenues during
the prior year.
The Company's balance sheet at Nov. 30, 2011, showed
$365.70 million in total assets, $344.92 million in total
liabilities, $56.38 million in series A cumulative convertible
preferred stock, and a $35.60 million total deficit.
* * *
Emmis carries Caa2 corporate family rating and a Caa3 probability
of default rating from Moody's.
In July 2011, Moody's Investors Service placed the ratings of
Emmis on review for possible upgrade following the company's
earnings release for 1Q12 (ended May 31, 2011) including
additional disclosure related to the pending sale of controlling
interests in three radio stations. The sale of the majority
ownership to GCTR will generate estimated net proceeds of
approximately $100 million to $120 million, after taxes, fees and
related expenses. Emmis will retain a minority equity interest in
the operations of the three stations and Moody's expects senior
secured debt to be reduced resulting in improved credit metrics.
EMMIS COMMUNICATIONS: T. Stabosz Holds 3.2% of Class A Shares
-------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Timothy John Stabosz disclosed that, as of
April 30, 2012, he beneficially owns 1,103,301 shares of Class A
common stock of Emmis Communications Corporation representing 3.2%
of the shares outstanding.
Mr. Stabosz previously reported beneficial ownership of 1,790,150
Class A common shares or a 5.3% equity stake as of March 1, 2012.
A copy of the amended filing is available for free at:
http://is.gd/vZiSos
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation -- http://www.emmis.com/-- owns and operates 22 radio
stations serving New York, Los Angeles, Chicago, St. Louis,
Austin, Indianapolis, and Terre Haute, as well as national radio
networks in Slovakia and Bulgaria. The company also publishes six
regional and two specialty magazines.
The Company reported a consolidated net loss of $11.54 million on
$251.31 million of net revenues for the year ended Feb. 28, 2011,
compared with a consolidated net loss of $118.49 million on
$242.56 million of net revenues during the prior year.
For the nine months ended Nov. 30, 2011, the Company reported net
income attributable to common shareholders of $97.72 million on
$185.08 million of net revenues, compared with a net loss
attributable to common shareholders of $7.92 million on $193.24
million of net revenues for the same period during the prior year.
The Company's balance sheet at Nov. 30, 2011, showed $365.70
million in total assets, $344.92 million in total
liabilities,$56.38 million in series A cumulative convertible
preferred stock and a $35.60 million total deficit.
* * *
Emmis carries Caa2 corporate family rating and a Caa3 probability
of default rating from Moody's.
In July 2011, Moody's Investors Service placed the ratings of
Emmis on review for possible upgrade following the company's
earnings release for 1Q12 (ended May 31, 2011) including
additional disclosure related to the pending sale of controlling
interests in three radio stations. The sale of the majority
ownership to GCTR will generate estimated net proceeds of
approximately $100 million to $120 million, after taxes, fees and
related expenses. Emmis will retain a minority equity interest in
the operations of the three stations and Moody's expects senior
secured debt to be reduced resulting in improved credit metrics.
ENERGY CONVERSION: Cancels Going Concern Auction of United Solar
----------------------------------------------------------------
Energy Conversion Devices, Inc. and its wholly-owned subsidiary
United Solar Ovonic LLC disclosed that they are canceling the
auction of the going concern sale of USO scheduled for May 8, 2012
and discontinuing the court-approved sale process because of the
failure to receive an acceptable qualified bid by the bid
deadline. Quarton Partners, the companies' investment banker, is
continuing to work with prospective buyers on alternative
transactions. In addition, the companies have retained auction
services provider Hilco Industrial to prepare for an orderly sale
of the companies' assets.
"Today's announcement is one that everyone here at ECD and UNI-
SOLAR worked extremely hard to avoid," said Julian Hawkins, ECD's
President and CEO. "On behalf of the management team and the
board, I wish to express the sincere thanks to past and present
members of the ECD/UNI-SOLAR team for their dedication, commitment
and passion. Each one of you has played an integral role in
forever changing the world of clean energy."
In connection with these activities, the companies will
immediately begin reducing their workforce, terminating
approximately 300 employees worldwide. The companies will retain
a smaller workforce to support the bankruptcy process and the sale
of its solar and other assets, including ECD's interest in Ovonyx,
Inc. USO is also retaining a small number of employees to continue
to develop its core solar technologies under government-funded
contracts.
About Energy Conversion
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.
ECD filed for Chapter 11 protection (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).
An official committee of unsecured creditors has been appointed in
the case.
ECD is seeking to sell assets on a going concern basis. An
auction is currently set for May 8. The auction was previously
scheduled for April 24.
Cassandra Sweet, writing for Dow Jones Newswires, reported that
company executives told a bankruptcy court in Detroit earlier in
April the auction might not bring in enough proceeds to pay off
the company's $249 million in debt and likely won't be enough to
pay shareholders.
A group of shareholders hoping to recover money from the auction
had asked a bankruptcy judge to allow it to form an official
committee with lawyers and expenses paid for by the company.
The company had estimated in court papers that it was worth $986
million, based on nearly $800 million of investment in the
manufacturing unit. But the company said it was unlikely to
recover that amount from the auction and didn't expect to raise
enough to pay off its debts and pay shareholders.
The Troubled Company Reporter on April 19, 2012, citing a report
by Garret Ellison at mlive.com, said Salamon Group has offered
about $2.5 million to acquire United Solar Ovonic. According to
the report, Salamon is offering up to 5 million shares in their
company in exchange for all shares of bankrupt flexible solar
panel maker Energy Conversion Devices. The offer amounts to about
$2.5 million based on Salamon's 49 cents per share mid-day trading
price on April 17.
ENERGY CONVERSION: Hearings on May 9 & 16 on Equity Panel Bid
-------------------------------------------------------------
Tom Henderson at Crain's Detroit Business reports that a hearing
will be held May 9, 2012, in U.S. Bankruptcy Court in Detroit on a
brief filed by a former shareholder of Energy Conversion Devices
Inc. to halt the sale of ECD's assets and to appoint an attorney
to represent the interests of those who owned company stock on
Feb. 13, the day before it filed for Chapter 11 bankruptcy
protection. The report relates John Murphy, a finance professor
at Oakland University, bought ECD stock in December when it was
trading at 20 cents.
The report relates Mr. Murphy sold most of his stock on Feb. 14,
when it was trading at 29 cents. Mr. Murphy said he was upset
that ECD officials filed for bankruptcy over $263 million in
unsecured debt that wasn't owed to bondholders for more than a
year. He said the company's board trampled on the rights of
shareholders to please New York hedge funds. He said, instead of
filing bankruptcy, the company should have negotiated a reduced
payment for its bondholders, who were unsecured debtors.
The report notes a second hearing will be held in bankruptcy court
May 16 on a motion by a Houston-based law firm McKool Smith PC
that asks Judge Thomas Tucker to appoint an equity committee to
protect the rights of current owners of common stock.
The report notes the company's stock traded as high as $1.46 the
day before the announcement that the company had filed for
bankruptcy, fell to 29 cents on Feb. 14 and opened May 4 at
6 cents.
An auction of the stock or assets that comprises the Debtors'
solar business unit was scheduled to be held at 10:00 a.m.
(Eastern Time) on May 8. But on the eve of the auction date, the
Debtors notified the Court they're canceling the auction because
they have failed to receive a qualified bid at an acceptable
value. The Debtors said they are not at this time rescheduling
the auction.
The report also notes one of ECD's bondholders -- Eric Wagoner,
general partner of Compass Point Partners LP of Westport, Conn., a
small fund that does distressed investing, including buying shares
or bonds of companies in bankruptcy -- thinks the timing of the
bankruptcy filing was extremely odd.
The report relates Mr. Wagoner said his fund bought ECD bonds
after the bankruptcy filing for 50 cents on the dollar. He said
he has heard that a Chinese photovoltaic firm has made a bid for
ECD's assets, particularly its United Solar Ovonic LLC subsidiary.
Mr. Wagoner, according to the report, expects the assets will be
sold for enough to allow bondholders to get their bonds redeemed
at face value or close to it, once proceeds are combined with the
$140 million in cash ECD holds.
The report also notes Michael Matvieshen, president and CEO of
Modesto, Calif.-based Salamon Group Inc., a builder and manager of
renewable energy projects that made an offer in April to buy
shares of ECD's stock to take advantage of $1 billion in previous
losses he could apply to his company's profits, agrees with Mr.
Wagoner.
About Energy Conversion
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.
ECD filed for Chapter 11 protection (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).
An official committee of unsecured creditors has been appointed in
the case.
A group of shareholders had asked a bankruptcy judge to allow it
to form an official committee with lawyers and expenses paid for
by the company.
The company had estimated in court papers that it was worth $986
million, based on nearly $800 million of investment in the
manufacturing unit.
FAIRFAX FINC'L: Fitch Affirms 'BB' Rating on 5 Pref. Shares Series
------------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Fairfax Financial
Holdings Limited as follows:
-- Issuer Default Rating (IDR) at 'BBB';
-- Senior debt at 'BBB-'.
Fitch has also affirmed the ratings of Fairfax's subsidiaries. In
addition, Fitch has assigned an 'A-' insurer financial strength
(IFS) rating to First Mercury Insurance Company reflecting its
100% reinsurance into the Crum & Forster Insurance Group (Crum &
Forster).
The Rating Outlook is Stable.
Fitch's rationale for the affirmation of Fairfax's ratings
reflects the company's sizable cash position and favorable
financial flexibility. The ratings also reflect anticipated
challenges in the overall competitive, but generally improving
property/casualty market rate environment, the potential for
additional adverse reserve development, particularly on older
accident years and in runoff operations, earnings volatility from
catastrophes and investments and increased financial leverage.
Fairfax posted limited recent net earnings of $0.1 million in the
first quarter of 2012 following $47.8 million for full year 2011.
Results in 2012 have benefited thus far from more modest
catastrophe losses, as full year 2011 included $1 billion of
catastrophe losses from the Japanese earthquake and tsunami,
Thailand floods, U.S. tornados, New Zealand earthquake, Hurricane
Irene, Denmark floods, Australian storms and Cyclone Yasi.
However, the improved 2012 underwriting results were offset by
weaker investment results with $41 million of net losses on
investments (includes both realized and unrealized) in the first
quarter of 2012 compared to $691 million of net gains on
investments in full year 2011. Gains have been driven by fixed
income securities, while losses have been incurred from CPI-linked
derivatives (deflation hedge that dropped in market value with
CPI-index increasing), foreign currency and overall net equity
losses (in 2011) after equity hedges.
Fairfax's combined ratio was 98.7% in the first three months of
2012 compared to 114.2% for full year 2011, which included 19.3
points for catastrophe losses. Excluding the impact of
catastrophes (2.0 points) and favorable reserve development (0.1
points) in ongoing operations, Fairfax's combined ratio for the
first three months of 2012 was 96.8%, up slightly from 96.6% for
full year 2011.
Fairfax's financial leverage ratio (adjusted for equity credit and
unrealized gains on fixed income investments) was 34.1% at March
31, 2012, up from 33.2% at Dec. 31, 2011, and 28.5% at Dec. 31,
2010, as Fairfax issued hybrid preferred shares in 2012 and
increased overall debt in 2011. Fitch expects Fairfax's financial
leverage ratio to remain below 35% with more normal shareholders'
equity growth in 2012. The increase in leverage was also due to a
6% decline in Fairfax's common shareholders' equity since year-end
2010 to $7.2 billion at Mar. 31, 2012, as common and preferred
share dividends more than offset the company's limited earnings.
Fairfax continues to maintain a sizable amount of holding company
cash, short-term investments and marketable securities of $1.0
billion at March 31, 2012, which Fitch believes provides Fairfax a
sufficient cushion in meeting potential subsidiary cash flow
shortages and liquidity to service its debt. Fairfax also
continues to demonstrate favorable financial flexibility with Crum
& Forster, Northbridge Financial Insurance Group, Zenith Insurance
Group, and Odyssey Reinsurance Company serving as key sources of
dividends as wholly owned major ongoing operating subsidiaries.
The key rating triggers that could result in an upgrade include
consistent underwriting profitability and operating results in
line with peers and industry averages, overall flat-to-favorable
loss reserve development, financial leverage maintained below 20%,
and continued maintenance of at least $1 billion of holding
company cash, short-term investments and marketable securities.
The key rating triggers that could result in a downgrade include
declines in book value per share for an extended time period,
sizable adverse loss reserve development, movement to materially
below-average underwriting or investment performance, financial
leverage maintained above 35%, operating earnings plus holding
company cash based interest and preferred dividend coverage of
less than 4x, significant acquisitions that reduce the company's
financial flexibility and a substantial decline in the holding
company's cash position.
Fitch affirms the following ratings with a Stable Outlook:
Fairfax Financial Holdings Limited
-- IDR at 'BBB';
-- Senior debt at 'BBB-';
-- US$82 million 8.25% due Oct. 1, 2015 at 'BBB-';
-- US$48 million 7.75% due June 15, 2017 at 'BBB-';
-- US$144 million 7.375% due April 15, 2018 at 'BBB-';
-- C$400 million 7.5% due Aug. 19, 2019 at 'BBB-';
-- C$275 million 7.25% due June 22, 2020 at 'BBB-'.
-- US$500 million 5.8% due May 15, 2021 at 'BBB-';
-- C$400 million 6.4% due May 25, 2021 at 'BBB-';
-- US$92 million 8.3% due April 15, 2026 at 'BBB-';
-- US$91 million 7.75% due July 15, 2037 at 'BBB-';
-- C$250 million series C preferred shares at 'BB';
-- C$200 million series E preferred shares at 'BB';
-- C$250 million series G preferred shares at 'BB';
-- C$300 million series I preferred shares at 'BB';
-- C$230 million series K preferred shares at 'BB'.
Fairfax, Inc.
-- IDR at 'BBB'.
Crum & Forster Holdings Corp.
-- IDR at 'BBB';
-- US$6 million 7.75% due May 1, 2017 at 'BBB-'.
Crum & Forster Insurance Group:
Crum and Forster Insurance Company
Crum & Forster Indemnity Company
The North River Insurance Company
United States Fire Insurance Company
-- IFS at 'A-'.
Northbridge Financial Insurance Group:
Federated Insurance Company of Canada
Northbridge Commercial Insurance Corporation
Northbridge General Insurance Corporation
Northbridge Indemnity Insurance Corporation
Northbridge Personal Insurance Corporation
Zenith Insurance Company (Canada)
-- IFS at 'A-'.
Odyssey Re Holdings Corp.
-- IDR at 'BBB';
-- US$50 million series A unsecured due March 15, 2021 at BBB-;
-- US$50 million series B unsecured due March 15, 2016 at BBB-;
-- US$40 million series C unsecured due Dec. 15, 2021 at 'BBB-';
-- US$183 million 7.65% due Nov. 1, 2013 at 'BBB-';
-- US$125 million 6.875% due May 1, 2015 at 'BBB-'.
Odyssey Reinsurance Company
-- IFS at 'A-'.
Zenith National Insurance Corp.
-- IDR at 'BBB'.
Zenith Insurance Company
ZNAT Insurance Company
-- IFS at 'A-'.
Fitch assigns the following rating:
First Mercury Insurance Company
-- IFS at 'A-'.
Fitch has withdrawn the following rating as it is no longer
considered analytically meaningful, as effective May 1, 2012 the
company no longer issues new or renewal policies:
Commonwealth Insurance Company of America
-- IFS at 'A-'.
FIFTH STREET TOWERS: Sold for $1 Plus Debt in Foreclosure Sale
--------------------------------------------------------------
The Wall Street Journal's Maura Webber Sadovi reports that a
venture of Zeller Realty Corp. of Chicago and a fund formed by
Invesco Ltd., of Atlanta and billionaire Wilbur Ross Jr.'s
company, which is an affiliate of Invesco, bid $1 more than the
debt, or $110,700,000.66, to acquire Fifth Street Towers, a
1.1 million-square-foot downtown office property in Minneapolis,
Minn., in a foreclosure auction last month.
The report notes the mortgage had been held by MetLife Inc. and
was in default because the building's former owner, Strategic Real
Estate Advisors, or StratReal, of the U.K., didn't repay it when
it matured last fall.
"No one else raised their hands and right then I knew we'd gotten
it," says James Gearen, president of Zeller, a commercial real-
estate investment and management firm, the report notes.
WSJ notes one third of the space in the Fifth Street Towers
building is vacant and the net income is so low that the venture's
initial annual return on its investment will be just over 5%.
WSJ also reports most of the capital for the purchase of Fifth
Street Towers came from Invesco Mortgage Recovery Fund, which is
co-managed by Invesco and WL Ross & Co.
FIRST NATIONAL: Fitch Affirms 'B' Short-Term Issuer Default Rating
------------------------------------------------------------------
Fitch Ratings has affirmed First National of Nebraska's (FNNI)
long- and short-term Issuer Default Ratings (IDR) at 'BB+' and
'B', respectively. The Rating Outlook has been revised to
Positive from Stable.
The affirmation of FNNI's IDR reflects the company's more stable
operating performance, an improvement in asset quality ratios, as
well as stronger regulatory capital ratios.
Fitch's Positive Outlook reflects the view that FNNI's operating
performance could strengthen over the near-to-medium term and
potentially warrant a higher rating. This view is predicated on
Fitch's belief that FNNI's earnings and profitability should
improve as it pursues additional strategic partnerships in its
credit card portfolio and that the company's overall credit
quality continues to improve.
Fitch believes the potential positives described above should also
allow FNNI to continue to enhance capital ratios, which Fitch
notes could allow FNNI to compare more favorably with higher rated
entities.
Fitch notes that FNNI's loan portfolio has experienced positive
credit trends as both past due loans and non-accruals loans were
down 37% and 33%, respectively over the past year compared to
fiscal year 2010 (FY10). Classified, special mention and net-
charge offs also experienced significant improvements after
peaking in the first quarter of 2010 (1Q10). Fitch expects these
trends to continue.
Fitch highlights that these positive credit quality trends have
occurred throughout FNNI's loan book, including the credit card
portfolio, which accounts for roughly 40% of loans, as well as the
remainder of the portfolio, which is represented mostly by
commercial real-estate (CRE) and agriculture loans.
Historically, Fitch has considered FNNI's capital management to be
aggressive; however, the company has since improved its capital
ratios which have been boosted through retained earnings, the sale
of FNNI's merchant processing business, and more optimal levels of
risk-weighted assets.
FNNI's risk based Tier 1 ratio improved to 12.46% at FY11 compared
to 10.50% in FY10, representing an almost 19% increase. Fitch
also considers holding company liquidity to be noticeably
improved, as this was previously considered a ratings weakness.
In evaluating the Positive Outlook, Fitch will assess FNNI's
ability to achieve sustainable core return on assets of at least
0.75% while maintaining stable to improving credit quality. In
addition, Fitch's assessment will also consider FNNI's capital
buffer above minimum regulatory requirements, as well as relative
to the capital ratios of similarly rated entities.
Alternatively, factors that could negatively weigh on FNNI's
ratings include stagnant operating performance, a reversal of the
currently positive credit trends, as well as any significant
shareholder capital distributions.
The latter could constrain upward ratings momentum to the extent
that distributions either slow FNNI's capital build relative to
similarly rated institutions or even cause the company's capital
ratios to decline on an absolute basis.
FNNI is a $15.3 billion bank holding company headquartered in
Omaha, NE, with operations spanning Nebraska, South Dakota,
Colorado, Texas and Illinois. The main operating bank, First
National Bank of Omaha, represents over 85% of consolidated
assets. In 2002, FNNI became a private company and is controlled
by the Lauritzen family.
Fitch has affirmed the following ratings:
First National of Nebraska, Inc.
-- Long-term IDR at 'BB+';
-- Short-term IDR at 'B';
-- Viability rating at 'bb+';
-- Support rating at '5';
-- Support rating floor at 'NF'.
First National Bank of Omaha
-- Long-term IDR at 'BB+';
-- Short-term IDR at 'B';
-- Viability rating at 'bb+';
-- Support rating at '5';
-- Support rating floor at 'NF';
-- Long-term deposits at 'BBB-';
-- Short-term deposits at 'F3';
-- Subordinated debt at 'BB'.
Following the merger into First National Bank of Omaha, Fitch has
withdrawn the ratings for the following:
First National Bank (Fort Collins)
-- Long-term IDR at 'BB+';
-- Short-term IDR at 'B';
-- Viability rating at 'bb+';
-- Support rating at '5';
-- Support rating floor at 'NF';
-- long-term deposits at 'BBB-';
-- short-term deposits at 'F3';
First National Bank (North Platte)
-- Long-term IDR at 'BB+';
-- Short-term IDR at 'B';
-- Viability rating at 'bb+';
-- Support rating at '5';
-- Support rating floor at 'NF';
-- Long-term deposits at 'BBB-';
-- Short-term deposits at 'F3';
The Rating Outlook is Positive.
FREDERICK'S OF HOLLYWOOD: Hires Advisor to Explore Sale, Options
----------------------------------------------------------------
Frederick's of Hollywood Group Inc. said it has retained New York-
based investment bank Allen & Company LLC to assist the Board of
Directors in evaluating and exploring a broad range of strategic
alternatives, including but not limited to a sale of the Company
or a business combination.
Thomas Lynch, the Company's chairman and chief executive officer,
stated, "Over the past few months, the Board has received several
inquiries regarding various transactions. We believe it is an
appropriate time to formalize the process by engaging a world-
class advisor that can assist us in identifying and reviewing a
wide array of strategic alternatives that can maximize value for
our shareholders."
The Company does not have a defined timeline for the strategic
review, and there can be no assurance that the review will result
in any specific action or transaction. The Company does not
intend to comment further regarding the evaluation of strategic
alternatives, unless a definitive agreement for a specific
transaction is entered into, the process is concluded, or it
otherwise deems further disclosure is appropriate or required.
According to Bloomberg News, Frederick's of Hollywood, which was
founded as a mail-order lingerie business more than 60 years ago
and pioneered the pushup bra, has posted four consecutive years of
losses on shrinking sales as competition has increased in the U.S.
Limited Brands Inc.'s Victoria's Secret chain in contrast has been
thriving, and posted an 11% sales gain last year.
Frederick's had a net loss of $3.54 million, or 9 cents a share,
in the quarter ended Jan. 28. Second-quarter sales dropped 0.2%
to $32.5 million after Frederick's reduced prices and sold
clearance items, Bloomberg News reported.
About Frederick's of Hollywood
Frederick's of Hollywood Group Inc. (NYSE Amex: FOH) --
http://www.fredericks.com/-- through its subsidiaries, sells
women's intimate apparel, swimwear and related products under its
proprietary Frederick's of Hollywood brand through 122 specialty
retail stores, a world-famous catalog and an online shop.
Frederick's of Hollywood sought bankruptcy in July 10, 2000. On
Dec. 18, 2002, the court approved the company's plan of
reorganization, which became effective on Jan. 7, 2003, with the
closing of the Wells Fargo Retail Finance exit financing facility.
GAC STORAGE: Copley Plan Outline Hearing Scheduled for May 10
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
will convene a hearing on May 10, 2012, at 10:30 a.m., to consider
approval of the disclosure statement explaining GAC Storage Copley
Place, LLC's proposed Plan of Reorganization dated March 30, 2012.
The Debtor will begin soliciting votes on the Plan following
approval of the adequacy of the information in the Disclosure
Statement.
As reported in the Troubled Company Reporter on May 1, 2012,
according to the Disclosure Statement, the Plan provides for the
reorganization of the Debtor's business and the resolution of all
outstanding claims against and interests in the Debtor. The Plan
also contemplates the issuance of new equity interests in the
Reorganized Debtor to an entity owned by Ronnie Schwartz and other
third-party investors in exchange for substantial equity
contributions. Neither GAC Storage, LLC, the Debtor's current
owner, nor any of the guarantors of the Bank Claim will have any
ownership interest in the Reorganized Debtor or Newco.
The Plan will be funded from (i) the Reorganized Debtor's
available cash, (ii) the Reorganized Debtor's business operations,
and (ii) the New Equity Contributions of Newco.
The Plan proposes to pay all allowed administrative expense claims
and allowed priority claims in full on the Plan's effective date,
with holders of allowed unsecured claims receiving a single cash
distribution based on pro rata share of $10,000 within 60 days of
the Effective Date.
The Allowed Bank Claim, which the Debtor estimates will total
$9.80 million, as of the Effective Date, will be treated in one of
these ways under the Plan, at the sole and exclusive discretion of
the holder of the claim, Bank of America, N.A.:
Bank Option 1: The Reorganized Debtor will pay to the Holder of
the Allowed Bank Claim (A) the aggregate amount of any unpaid non-
default rate interest that may have accrued in accordance with the
Bank Loan Documents prior to the Effective Date, which amount will
be paid in Cash on the Effective Date; (B) monthly principal and
interest payments on the unpaid balance of the Allowed Bank Claim,
based on a 30 year amortization, with interest calculated at 4%
per annum for year 1 through year 4 and 5% per annum for year 5
through year 7 of the Plan, which Monthly Payments will commence
to accrue on the Effective Date, become payable on the fifth day
of the first full month after the Effective Date, and continue to
be paid on the same day of each month thereafter until the earlier
of the date the Allowed Bank Claim is paid in full or the Maturity
Date; and (C) a balloon payment of the unpaid balance of the
Allowed Bank Claim plus any accrued and unpaid interest, which
balloon payment will occur and will be due and payable on the
Maturity Date; or
Bank Option 2: The Allowed Bank Claim will be reduced by the
sum of $1,000,000 as of the Effective Date, and the Reorganized
Debtor will pay to the Holder of the reduced, Allowed Bank Claim:
(A) the aggregate amount of (x) $1,000,000, plus (y) any unpaid
non-default rate interest that may have accrued in accordance with
the Bank Loan Documents prior to the Effective Date, which amount
will be paid in Cash on the Effective Date and will be applied
against the unpaid balance of the reduced, Allowed Bank Claim,
with the Lump Sum Payment applied to unpaid principal and the
balance of the cash applied to the unpaid interest payable on the
Effective Date; (B) monthly principal and interest payments on
the unpaid balance of the Allowed Bank Claim, based on a 30 year
amortization, with interest calculated at 4.50% per annum, which
Monthly Payments will commence to accrue on the Effective Date,
become payable on the First Payment Date, and continue to be paid
on the same day of each month thereafter until the earlier of the
date the Allowed Bank Claim is paid in full or the Maturity Date;
and (C) a balloon payment of the unpaid balance of the Allowed
Bank Claim plus any accrued and unpaid interest, which balloon
payment will occur and shall be due and payable on the Maturity
Date.
If the Holder of the Allowed Bank Claim selects Bank Option 1,
Newco will make an equity contribution to the Reorganized Debtor
to establish a "Payment Reserve" in the amount of $385,000, which
is approximately equal to one year of interest under the proposed
treatment of the Allowed Bank Claim. The Payment Reserve will be
used by the ReorganizedDebtor to supplement the Monthly Payments
under Bank Option 1 above, as needed, in the event that the
Reorganized Debtor is unable to make the Monthly Payments from its
own cash at the time any Monthly Payment is due. Any balance of
the Payment Reserve that remains when the Allowed Bank Claim is
paid in full in accordance with the provisions of the Section
2.2.2 will be retained by the Reorganized Debtor.
If the Holder of the Allowed Bank Claim selects Bank Option 2,
Newco will make an equity contribution to the Reorganized Debtor
to fund the Lump Sum Payment. In the event that the Holder of the
Allowed Bank Claim does not elect either Bank Option 1 or 2 above,
or votes to reject the Plan, then for purposes of confirmation of
the Plan under Section 1129(b) and Section 3.3 of the Plan, the
Holder of the Allowed Bank Claim will be deemed to have selected
Bank Option 1.
Estimated Recoveries
Class Claim Recovery
----- ----- --------
1 Priority Non-Tax Claims 100%
2 Bank Claim 100%
3 Other Secured Claims 100%
4 General Unsecured Claims 50%
5 Interests 0%
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/GAC_STORAGE_ds.pdf
About GAC Storage
GAC Storage Lansing, LLC, owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois. The Company filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011.
Jay S. Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure,
Esq., at Bernstein, Shur, Sawyer & Nelson, P.A., represents the
Debtor as counsel. Robert M, Fishman, Esq., and Gordon E.
Gouveia, Esq., at Shaw Gussis Fishman Glantz Wolfson, & Towbin
LLC, in Chicago, represents the Debtor as local counsel. It
estimated $1 million to $10 million in assets and debts. The
petition was signed by Noam Schwartz, secretary and treasurer of
EBM Mgmt Servs, Inc., manager of GAC Storage, LLC.
The Debtors' cases are being jointly administered along with the
Chapter 11 cases of The Makena Great American Anza Company, LLC
("Anza") and San Tan Plaza, LLC ("San Tan," and together with
Anza, the "Related Debtors") under lead case no. 11-40944.
GAC STORAGE: May 25 Set as Copley Creditors' Claims Bar Date
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
established May 25, 2012, as the last day for any individual or
entity to file proofs of claim against GAC Storage Copley Place,
LLC.
Copley Place is a debtor-affiliate of GAC Storage Lansing, LLC.
In a separate order, the Court approved the procedures for the
filing of proofs of claim. Proofs of claim must, among other
things:
A. conform substantially to the proof of claim form;
B. be filed either by mailing or delivering the original proof
of claim by hand or overnight courier to Hartford Computer
Claims Processing, c/o Kurtzman Carson Consultants, LLC,
2335 Alaska Avenue, El Segundo, California;
C. be deemed filed only when received by Kurtzman Carson
Consultants, LLC on or before the applicable bar date; and
D. (i) be signed; (ii) include supporting documentation (if
voluminous, attach a summary) or an explanation as to why
documentation is not available; (iii) be in the English
language; and (iv) be denominated in United States currency.
Proofs of claim are public documents and will be treated as if
filed with the Office of the Clerk of the Bankruptcy Court.
Further, proofs of claim must be filled out in their entirety by
the applicable bar date or forever be barred.
About GAC Storage
GAC Storage Lansing, LLC, owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois. The Company filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011.
Jay S. Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure,
Esq., at Bernstein, Shur, Sawyer & Nelson, P.A., represents the
Debtor as counsel. Robert M, Fishman, Esq., and Gordon E.
Gouveia, Esq., at Shaw Gussis Fishman Glantz Wolfson, & Towbin
LLC, in Chicago, represents the Debtor as local counsel. It
estimated $1 million to $10 million in assets and debts. The
petition was signed by Noam Schwartz, secretary and treasurer of
EBM Mgmt Servs, Inc., manager of GAC Storage, LLC.
The Debtors' cases are being jointly administered along with the
Chapter 11 cases of The Makena Great American Anza Company, LLC
("Anza") and San Tan Plaza, LLC ("San Tan," and together with
Anza, the "Related Debtors") under lead case no. 11-40944.
GAC STORAGE: El Monte Plan Exclusivity Extended Until July 3
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
extended GAC Storage El Monte, LLC's exclusive periods to file and
solicit acceptances for the proposed chapter 11 plan until May 1,
2012, and July 3, respectively.
El Monte, a debtor-affiliate of GAC Storage Lansing, LLC,
requested for exclusivity extension to file a proposed plan until
May 4.
In a separate order, the Court also extended debtor-affiliates --
The Makena Great American Anza Company, LLC, and San Tan Plaza,
LLC's exclusive periods to file and solicit acceptances for the
proposed plan until May 1 and July 2.
As reported in the Troubled Company Reporter on March 22, 2012,
the Debtors related that they are working diligently on plans of
reorganization to comply with the various timeliness of their
respective cases. They asserted that the proposed extensions of
the Exclusive Periods will provide them with a reasonable
opportunity to formulate and file plans of reorganization along
with the other Debtors.
Anza and San Tan clarified that they are not seeking extensions of
the Exclusive Periods to pressure creditors regarding
reorganization demands, but rather to preserve the opportunity to
formulate plans and to engage in negotiations with the prepetition
lenders.
On Jan. 30, 2012, GAC Lansing, GAC Copley and GAC El Monte filed a
combined motion to extend their exclusive periods to May 4 and
July 3, respectively. The Court, on Feb. 3, 2012, granted the
Motion as to GAC Lansing. The exclusivity motion is pending as to
GAC Copley and GAC El Monte and is scheduled for a status hearing
on March 20. The exclusive periods for GAC Copley and GAC El
Monte have been extended pending the Court's ruling on the motion
pursuant to order of the Court dated February 7.
GAC Copley and Bank of America, N.A., have tentatively agreed to
an April 1 extension of the exclusive period within which GAC
Copley may file a Chapter 11 plan in conjunction with a final cash
collateral order. GAC El Monte and Wells Fargo has tentatively
agreed upon a May 1 extension of the exclusive period within which
GAC El Monte may file a Chapter 11 plan in conjunction with a
final cash collateral order.
About GAC Storage
GAC Storage Lansing, LLC, owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois. The Company filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011.
Jay S. Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure,
Esq., at Bernstein, Shur, Sawyer & Nelson, P.A., represents the
Debtor as counsel. Robert M, Fishman, Esq., and Gordon E.
Gouveia, Esq., at Shaw Gussis Fishman Glantz Wolfson, & Towbin
LLC, in Chicago, represents the Debtor as local counsel. It
estimated $1 million to $10 million in assets and debts. The
petition was signed by Noam Schwartz, secretary and treasurer of
EBM Mgmt Servs, Inc., manager of GAC Storage, LLC.
The Debtors' cases are being jointly administered along with the
Chapter 11 cases of The Makena Great American Anza Company, LLC
("Anza") and San Tan Plaza, LLC ("San Tan," and together with
Anza, the "Related Debtors") under lead case no. 11-40944.
GAC STORAGE: Lansing Has Standstill Stipulation with BBT
--------------------------------------------------------
GAC Storage Lansing, LLC, and Branch Banking and Trust Company ask
the U.S. Bankruptcy Court for the Northern District of Illinois
to:
a) extend the terms of the final cash collateral order;
b) extend the Debtor's exclusive periods to propose its
chapter 11 plan and solicit acceptances; and
c) continuing BBT's motion to lift stay .
The parties explain that they need additional time to continue
negotiating the details of a pending proposal by BBT to (i)
resolve a dispute regarding BBT's lien rights with respect to a
portion of the Debtor's real property; and (ii) hold an auction
for the sale of the real and personal property constituting the
Debtor's storage facility, including the Disputed Parcels in which
BBT would have the right to credit bid its debt for purchase of
all of the property.
In this relation, the parties entered into a stipulation, which
provides for a standstill while the parties work to resolve their
issues.
The terms of the stipulation are summarized as:
-- The standstill period will initially be from the entry of
the order approving the stipulation until June 12, 2012, and
may be extended by written agreement of the parties without
further court order;
-- The terms of the stipulation and final order (i)
authorizing use of cash collateral, and (ii) granting
adequate protection will be extended until the expiration
date;
-- The Debtor's exclusive periods to propose a plan and solicit
acceptances will be extended until the expiration date and
60 days after the expiration date, respectively;
-- BBT's motion for relief from the automatic stay to enforce
rights against collateral will be continued for status
hearing only on the expiration date, or soon as practicable
thereafter as determined by the Court;
-- The Debtor will not file any plan of reorganization during
the standstill period; and
-- The Debtor explicitly and irrevocably waives any right to
file any plan of reorganization at any time that does not
permit BBT to credit bid for the purchase of certain of the
Debtor's real property. The Debtor reserves the right to
dispute and object to BBT's ability to credit bid for the
purchase of any other real property owned by the Debtor,
specifically including the Disputed Parcels.
The stipulation refers to a supplemental budget that extends the
final cash collateral order through the expiration date. The
parties are still working on the supplemental budget and intend to
submit it at the hearing on the motion.
The parties believe their resources would be better spent
finalizing the terms of a consensual resolution of the case rather
than litigating over BBT's pending motion to lift stay or any non-
sale plan the Debtor might propose.
About GAC Storage
GAC Storage Lansing, LLC, owns and operates a warehouse and
storage facility with 522 storage units, generally located at 2556
Bernice Road, Lansing, Illinois. The Company filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Case No. 11-40944) on Oct. 7, 2011.
Jay S. Geller, Esq., D. Sam Anderson, Esq., and Halliday Moncure,
Esq., at Bernstein, Shur, Sawyer & Nelson, P.A., represents the
Debtor as counsel. Robert M, Fishman, Esq., and Gordon E.
Gouveia, Esq., at Shaw Gussis Fishman Glantz Wolfson, & Towbin
LLC, in Chicago, represents the Debtor as local counsel. It
estimated $1 million to $10 million in assets and debts. The
petition was signed by Noam Schwartz, secretary and treasurer of
EBM Mgmt Servs, Inc., manager of GAC Storage, LLC.
The Debtors' cases are being jointly administered along with the
Chapter 11 cases of The Makena Great American Anza Company, LLC
("Anza") and San Tan Plaza, LLC ("San Tan," and together with
Anza, the "Related Debtors") under lead case no. 11-40944.
H & M OIL: Prospect Capital Wants Management Ousted
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that secured lender Prospect Capital Corp., owed
$88.8 million, filed papers asking the bankruptcy judge to appoint
a Chapter 11 trustee for H & M Oil & Gas LLC. The lender says H&M
lacks funds to drill new wells and as a result will lose its
interest in some leases. The bankruptcy judge in Dallas scheduled
a hearing on May 10 to consider the request for appointing a
trustee. Prospect also filed papers for permission to foreclose.
H & M Oil & Gas, LLC, filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 12-32785) in its hometown Dallas on
April 30, 2012. Another entity, Anglo-American Petroleum Corp.
(Case No. 12-32786) simultaneously filed for Chapter 11.
Each of the Debtors estimated assets and debts of $50 million to
$100 million.
H&M Oil & Gas, an oil and gas production and development company
headquartered in Dallas, TX. H&M, through its operating company,
H&M Resources, LLC is currently focused on developing its leases
in the permian basin and Texas panhandle. Dallas, Texas-based
Anglo-American Petroleum -- http://www.angloamericanpetroleum.com/
-- is the holding corporation for H & M Oil.
The Debtors are represented by Keith William Harvey, Esq., at
Anderson Tobin PLLC, in Dallas.
HARTFORD COMPUTER: Court Sets June 12 as Claims Bar Date
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
established 5:00 p.m. (prevailing Central time) on June 12, 2012,
as the deadline for any individual or entity to file proofs of
claim against Hartford Computer Hardware, Inc., et al.
Proofs of claim must be filed either by mailing or delivering the
original proof of claim by hand or overnight courier to:
Hartford Computer Claims Processing
c/o Kurtzman Carson Consultants, LLC
2335 Alaska Avenue
El Segundo, CA 90245
About Harford Computer
Schaumburg, Illinois-based Hartford Computer Hardware Inc. and its
affiliated entities are one of the leading providers of repair and
installation services in North America for consumer electronics
and computers. Hartford Computer Hardware operates in three
complementary business lines: parts distribution and repair, depot
repair, and onsite repair and installation. Products serviced
include laptop and desktop computers, commercial computer systems,
flat-screen television, consumer gaming units, printers,
interactive whiteboards, peripherals, servers, POS devices, and
other electronic devices. Hartford Computer Hardware, though all
U.S. companies, operates a significant portion of their business
in Markham, Ontario, Canada.
Hartford Computer Hardware and three units filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Lead Case No. 11-49744) on Dec. 12,
2011. The affiliates are Hartford Computer Group Inc. (Case No.
11-49750); Hartford Computer Government Inc. (Case No. 11-49752)
and Nexicore Services LLC (Case No. 11-49754). Judge Pamela S.
Hollis oversees the case. John P. Sieger, Esq., Paige E. Barr,
Esq., and Peter A. Siddiqui, Esq. -- john.sieger@kattenlaw.com ,
paige.barr@kattenlaw.com and peter.siddiqui@kattenlaw.com -- at
Katten Muchin Rosenman LLP, serve as the Debtors' counsel. The
Debtors' investment banker is Paragon Capital Partners, LLC; the
special counsel is Thornton Grout Finnigan LLP; and the notice and
claims agent is Kurtzman Carson Consultants LLC.
The Debtors disclosed $19,013,862 in assets and $72,984,394 in
liabilities as of the Chapter 11 filing. The petitions
were signed by Brian Mittman, chief executive officer.
Hartford Computer Hardware Inc. obtained Court permission to act
as the foreign representative of the Debtors in Canada in order to
seek recognition of the Chapter 11 case on the Debtors' behalf,
and request the Ontario Superior Court of Justice (Commercial
List) to lend assistance to the Bankruptcy Court in protecting the
Debtors' property.
Avnet Inc., proposed buyer for Nexicore and HCG, is represented by
Frank M. Placenti, Esq., at Squire, Sanders & Dempsey L.L.P.
Delaware Street, the DIP lender, is represented in the case by
Landon S. Raiford, Esq., and Michael S. Terrien, Esq., at Jenner &
Block. Matthew J. Botica, Esq., and Nancy G. Everett, Esq., at
Winston & Strawn LLP, argue for lenders ARG Investments, Enable
Systems, Inc., MRR Venture LLC, SKM Equity Fund II, L.P. and SKM
Investment Fund II.
The Official Committee of Unsecured Creditors in the Debtors'
cases tapped to retain Levenfeld Pearlstein, LLC, as its counsel
and Crowe Horwath LLP as its financial analysts.
HARTFORD COMPUTER: Has Until June 29 to Propose Chapter 11 Plan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
extended Hartford Computer Hardware, Inc., et al.'s exclusive
periods to file and solicit acceptances for the proposed chapter
11 plan until June 29, 2012, and Aug. 31, respectively.
The Debtors explained that they needed more time to formulate a
plan of liquidation because:
-- They need to determine the amount of claims against the
Debtors, including the amount of administrative expense and
priority claims that must be paid upon confirmation of any
plan; and
-- The Official Committee of Unsecured Creditors' investigation
period is pending, pursuant to a final order authorizing the
Debtors' cash collateral use, the Committee was provided
until May 31, 2012, to investigate any claims it may have
against Delaware Street Master Fund, LP, the Debtors'
prepetition senior secured lender.
The Court's order provides that objections to the requested
extension are overruled.
The Committee, in its objection, related that, among other things:
-- The extensions of exclusivity are premised upon the Debtors
having an actual business to reorganize or sell but the
Debtors had no business to reorganize and no assets left to
sell;
-- The Debtors are controlled by its primary lender, Street
Master Fund, LP, which is also the primary target of the
Committee's present investigative efforts; and
-- The Debtors' professed reason for seeking exclusivity does
not warrant extending the Debtors' exclusive periods.
About Harford Computer
Schaumburg, Illinois-based Hartford Computer Hardware Inc. and its
affiliated entities are one of the leading providers of repair and
installation services in North America for consumer electronics
and computers. Hartford Computer Hardware operates in three
complementary business lines: parts distribution and repair, depot
repair, and onsite repair and installation. Products serviced
include laptop and desktop computers, commercial computer systems,
flat-screen television, consumer gaming units, printers,
interactive whiteboards, peripherals, servers, POS devices, and
other electronic devices. Hartford Computer Hardware, though all
U.S. companies, operates a significant portion of their business
in Markham, Ontario, Canada.
Hartford Computer Hardware and three units filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Lead Case No. 11-49744) on Dec. 12,
2011. The affiliates are Hartford Computer Group Inc. (Case No.
11-49750); Hartford Computer Government Inc. (Case No. 11-49752)
and Nexicore Services LLC (Case No. 11-49754). Judge Pamela S.
Hollis oversees the case. John P. Sieger, Esq., Paige E. Barr,
Esq., and Peter A. Siddiqui, Esq. -- john.sieger@kattenlaw.com ,
paige.barr@kattenlaw.com and peter.siddiqui@kattenlaw.com -- at
Katten Muchin Rosenman LLP, serve as the Debtors' counsel. The
Debtors' investment banker is Paragon Capital Partners, LLC; the
special counsel is Thornton Grout Finnigan LLP; and the notice and
claims agent is Kurtzman Carson Consultants LLC.
The Debtors disclosed $19,013,862 in assets and $72,984,394 in
liabilities as of the Chapter 11 filing. The petitions
were signed by Brian Mittman, chief executive officer.
Hartford Computer Hardware Inc. obtained Court permission to act
as the foreign representative of the Debtors in Canada in order to
seek recognition of the Chapter 11 case on the Debtors' behalf,
and request the Ontario Superior Court of Justice (Commercial
List) to lend assistance to the Bankruptcy Court in protecting the
Debtors' property.
Avnet Inc., proposed buyer for Nexicore and HCG, is represented by
Frank M. Placenti, Esq., at Squire, Sanders & Dempsey L.L.P.
Delaware Street, the DIP lender, is represented in the case by
Landon S. Raiford, Esq., and Michael S. Terrien, Esq., at Jenner &
Block. Matthew J. Botica, Esq., and Nancy G. Everett, Esq., at
Winston & Strawn LLP, argue for lenders ARG Investments, Enable
Systems, Inc., MRR Venture LLC, SKM Equity Fund II, L.P. and SKM
Investment Fund II.
The Official Committee of Unsecured Creditors in the Debtors'
cases tapped to retain Levenfeld Pearlstein, LLC, as its counsel
and Crowe Horwath LLP as its financial analysts.
HARTFORD COMPUTER: Nexicore Services Now Known as Old NS, LLC
-------------------------------------------------------------
The Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Hartford Computer
Hardware, Inc., et al., to change the corporate name of debtor-
affiliate Nexicore Services, LLC, to Old NS, LLC.
About Harford Computer
Schaumburg, Illinois-based Hartford Computer Hardware Inc. and its
affiliated entities are one of the leading providers of repair and
installation services in North America for consumer electronics
and computers. Hartford Computer Hardware operates in three
complementary business lines: parts distribution and repair, depot
repair, and onsite repair and installation. Products serviced
include laptop and desktop computers, commercial computer systems,
flat-screen television, consumer gaming units, printers,
interactive whiteboards, peripherals, servers, POS devices, and
other electronic devices. Hartford Computer Hardware, though all
U.S. companies, operates a significant portion of their business
in Markham, Ontario, Canada.
Hartford Computer Hardware and three units filed for Chapter 11
bankruptcy (Bankr. N.D. Ill. Lead Case No. 11-49744) on Dec. 12,
2011. The affiliates are Hartford Computer Group Inc. (Case No.
11-49750); Hartford Computer Government Inc. (Case No. 11-49752)
and Nexicore Services LLC (Case No. 11-49754). Judge Pamela S.
Hollis oversees the case. John P. Sieger, Esq., Paige E. Barr,
Esq., and Peter A. Siddiqui, Esq. -- john.sieger@kattenlaw.com ,
paige.barr@kattenlaw.com and peter.siddiqui@kattenlaw.com -- at
Katten Muchin Rosenman LLP, serve as the Debtors' counsel. The
Debtors' investment banker is Paragon Capital Partners, LLC; the
special counsel is Thornton Grout Finnigan LLP; and the notice and
claims agent is Kurtzman Carson Consultants LLC.
The Debtors disclosed $19,013,862 in assets and $72,984,394 in
liabilities as of the Chapter 11 filing. The petitions
were signed by Brian Mittman, chief executive officer.
Hartford Computer Hardware Inc. obtained Court permission to act
as the foreign representative of the Debtors in Canada in order to
seek recognition of the Chapter 11 case on the Debtors' behalf,
and request the Ontario Superior Court of Justice (Commercial
List) to lend assistance to the Bankruptcy Court in protecting the
Debtors' property.
Avnet Inc., proposed buyer for Nexicore and HCG, is represented by
Frank M. Placenti, Esq., at Squire, Sanders & Dempsey L.L.P.
Delaware Street, the DIP lender, is represented in the case by
Landon S. Raiford, Esq., and Michael S. Terrien, Esq., at Jenner &
Block. Matthew J. Botica, Esq., and Nancy G. Everett, Esq., at
Winston & Strawn LLP, argue for lenders ARG Investments, Enable
Systems, Inc., MRR Venture LLC, SKM Equity Fund II, L.P. and SKM
Investment Fund II.
The Official Committee of Unsecured Creditors in the Debtors'
cases tapped to retain Levenfeld Pearlstein, LLC, as its counsel
and Crowe Horwath LLP as its financial analysts.
HAWKER BEECHCRAFT: Chapter 11 Prompts Moody's to Cut PDR to 'D'
---------------------------------------------------------------
Moody's Investors Service has lowered the probability of default
rating of Hawker Beechcraft Acquisition Company, LLC to D from
Ca/LD following the May 3rd filing for protection under Chapter 11
of the US Bankruptcy Code. All ratings will be subsequently
withdrawn.
Ratings are:
Probability of Default, to D from Ca/LD
Corporate Family, Ca
$240.3 million first-lien revolver due 2013, Caa3 LGD3, 33%
$1212.8 million first-lien term loan due 2014, Caa3 LGD3, 33%
$184.8 million first-lien incremental term loan due 2014, Caa3
LGD3, 33%
$75.0 million synthetic letter of credit facility due 2014, Caa3
LGD3, 33%
$182.9 million senior unsecured notes due 2015, C LGD5, 81%
$302.6 million senior unsecured PIK-election notes due 2015, C
LGD5, 81%
$145.1 million senior subordinated notes due 2017, C LGD6, 95%
Speculative Grade Liquidity, SGL-4
Outlook, to Stable from Negative
RATINGS RATIONALE
The principal methodology used in rating Hawker Beechcraft
Acquisition Company, LLC was the Global Aerospace and Defense
Industry Methodology published in June 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.
Hawker Beechcraft Acquisition Company, LLC manufactures business
jets, turboprops and piston aircraft for corporations, governments
and individuals. The company operates in three business segments:
Business and General Aviation, Trainer/Attack Aircraft, and
Customer Support. The operations were acquired from Raytheon by
affiliates of Onex Corporation and Goldman Sachs Capital Partners
in March 2007 for roughly $3.4 billion. In 2011 revenues were $2.4
billion.
HMC/CAH: Court Extends Cash Collateral Use Until Sept. 28
---------------------------------------------------------
The Bankruptcy Court authorized HMC/CAH Consolidated, Inc., et
al., to continue using cash collateral until Sept. 28, 2012.
As previously reported by the TCR on Dec. 27, 2011, the Bankruptcy
Court, in a final order, authorized the Debtors to use cash
collateral securing the Debtors' obligations to their prepetition
lenders.
In their motion, the Debtors sought to use cash collateral in
order to continue their operations, meet their payroll and other
necessary, ordinary course business expenditures, administer and
preserve the value of their estates, and maintain adequate access
to cash in order to maintain customer and vendor confidence.
Pursuant to the Final Order, and as adequate protection for any
diminution in value of the lenders' collateral, the Debtors will
grant the prepetition lenders:
1. replacement liens;
2. a superpriority administrative expense claim status;
3. these monthly adequate protection payments:
(i) to Gemino Healthcare Finance, L.L.C., $75,000, which was
paid upon the entry of an Agreed Interim Order, for the
Petition Date through the entry of the Agreed Interim
order; and $90,000 payable on or before the 5th day of
each month, which started on Dec. 5, 2011;
(ii) to First Liberty Bank, $61,767 per month, which started
on Nov. 11, 2011;
(iii) to CFG Community Bank, $26,293 which was paid
immediately upon the entry of the Agreed Interim Order,
and which will continue on the first (1st) day of each
month thereafter (starting on Dec. 1, 2011) during the
term of the Final Order;
(iv) to Citizens Bank, N.A., $14,766 per month on loan
No. 23467017, which was to begin upon the entry of the
Agreed Interim Order and $8,831 per month on Loan No.
23467018, beginning Dec. 15, 2011, and continue on the
15th day of each month thereafter;
(v) to Midland Loan Services, Inc., $50,570 (principal and
interest only; with taxes and insurance, the total
payment is $61,824), which began on Oct. 31, 2011; and
(vi) to Fidelity Security Life Insurance Company, et al.,
$21,083, which will begin on Jan. 6, 2012.
About HMC/CAH Consolidated
Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the
business of acquiring and operating a system of acute care
hospitals located in rural communities that are certified by The
Centers for Medicare and Medicaid Services as Critical Access
Hospitals or CAHs. The core focus of HMC/CAH's business plan is
to replace the technologically out of date and operationally
inefficient medical facilities of its CAHs with newly constructed
state-of-the art facilities. Since its incorporation, HMC/CAH has
purchased 12 rural hospitals certified as Critical Access
Hospitals. These CAH Hospitals are located in Kansas (3),
Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2).
The CAH Hospitals are the lifeline of the communities that they
serve. The CAH Hospitals provide critical health services to
rural residents, including emergency medical services.
HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr.
W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge
Dennis R. Dow presides over the case. Mark T. Benedict, Esq., at
Husch Blackwell Sanders LLP, represents the Debtors as counsel.
In its petition, the Debtors estimated $10 million to $50 million
in assets and debts. The petition was signed by Dennis Davis,
chief legal officer.
Nancy J. Gargula, U.S. Trustee for Region 13, appointed five
members to serve on the Official Committee of Unsecured Creditors
of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP
serves as the committee's counsel.
HMC/CAH: Exclusive Period to File Plan Extended to June 6
---------------------------------------------------------
The Bankruptcy Court extended HMC/CAH Consolidated, Inc., et al.'s
deadline to file a plan through June 6, 2012, and the Debtors'
exclusive period to solicit acceptances of a Plan until Aug. 6.
This extension, according to the Debtors, will allow them to
establish a bar date to consider the claims exposure of the
various Debtors, to negotiate with various parties-in-interest,
and provide the Debtors the opportunity to formulate, propose, and
solicit a plan, without the distraction and disruption of their
efforts that might be caused by the filing of competing plans by
non-Debtor parties.
About HMC/CAH Consolidated
Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the
business of acquiring and operating a system of acute care
hospitals located in rural communities that are certified by The
Centers for Medicare and Medicaid Services as Critical Access
Hospitals or CAHs. The core focus of HMC/CAH's business plan is
to replace the technologically out of date and operationally
inefficient medical facilities of its CAHs with newly constructed
state-of-the art facilities. Since its incorporation, HMC/CAH has
purchased 12 rural hospitals certified as Critical Access
Hospitals. These CAH Hospitals are located in Kansas (3),
Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2).
The CAH Hospitals are the lifeline of the communities that they
serve. The CAH Hospitals provide critical health services to
rural residents, including emergency medical services.
HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr.
W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge
Dennis R. Dow presides over the case. Mark T. Benedict, Esq., at
Husch Blackwell Sanders LLP, represents the Debtors as counsel.
In its petition, the Debtors estimated $10 million to $50 million
in assets and debts. The petition was signed by Dennis Davis,
chief legal officer.
Nancy J. Gargula, U.S. Trustee for Region 13, appointed five
members to serve on the Official Committee of Unsecured Creditors
of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP
serves as the committee's counsel.
HOMER CITY: Sr. Notes Cut by S&P to 'CC' on Bankruptcy Risk
-----------------------------------------------------------
Standard & Poor's Rating Services lowered its rating on Homer City
Funding LLC's senior secured notes due 2019 and 2026 to 'CC' from
'CCC'. "We removed the rating from CreditWatch with negative
implications, where we placed it on Feb. 29, 2012. The '1'
recovery rating on the debt is unchanged, but applies to the
existing capital profile. The outlook is negative," S&P said.
"The downgrade reflects the heightened prospect of a bankruptcy or
distressed debt exchange, which we would consider equivalent to a
default. While lenders under the proposed terms would receive the
same face value, rate, and maturity date, payment of interest can
be delayed from October 2012 and will initiate in April 2014 in
exchange for payment-in-kind, and repayment of principal is
suspended during the payment-in-kind period. Favorably, lenders'
collateral position would improve," S&P said.
"The restructuring proposal results from the inability of Homer
City to make all debt payments and fund about $725 million in
required emissions-control equipment over the next four years,"
said Standard & Poor's credit analyst Terry Pratt.
Under the original terms, debt service is high at $160 million in
2012, but drops to $89 million by 2016. The proposed restructuring
smoothes out the debt repayment profile to address the current low
power prices and capital spending needs.
"If the project files for bankruptcy or bondholders agree to a
restructuring that we consider to be a distressed exchange, we
would lower the rating on the debt to 'D' upon consummation of any
such agreement, in accordance with our rating criteria," S&P said.
HOSTESS BRANDS: May End Contracts With Bakery Workers' Union
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Hostess Brands Inc. was given authority from the
bankruptcy court on May 4 to terminate contracts with the Bakery,
Confectionery, Tobacco Workers & Grain Millers International
Union.
According to the report, unlike the Teamsters, the bakery workers'
union elected not to oppose Hostess at trial last month on
termination of existing contracts with about 70 union locals. As
a result, the bankruptcy judge signed an order on May 4 allowing
the company to terminate the contracts if they haven't already
expired. In place of the terminated or expired contracts, the
judge approved terms of a new contract that Hostess may implement.
Rather than use its resources to fight rejection of the contracts,
the bakery workers' union decided instead to use the threat of a
strike to negotiate concessions with the company.
The report relates that the bankruptcy judge also permitted
Hostess to end retiree benefits for former bakery workers' union
members.
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for
$12 million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
An official committee of unsecured creditors has been appointed in
the case. The committee selected New York law firm Kramer Levin
Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein
head the legal team for the committee.
Hostess in April concluded the trial seeking authorization to
terminate contracts with the Teamsters and bakery workers, the two
largest unions. The trial to reject contracts with other unions
is scheduled to begin May 21. The company says costs must be
reduced to attract new capital required to exit bankruptcy.
HURLEY MEDICAL: Moody's Affirms 'Ba1' Long-Term Rating
------------------------------------------------------
Moody's Investors Service has affirmed Hurley Medical Center's Ba1
long-term rating. This action affects approximately $88 million of
outstanding bonds issued through the City of Flint Hospital
Building Authority. The outlook remains stable.
Ratings Rationale
SUMMARY RATING RATIONALE: The affirmation of the Ba1 rating and
stable outlook reflects Moody's expectation that Hurley will
improve operating margins and continue to sustain adequate debt
coverage ratios and balance sheet ratios at the Ba1 rating level.
Moody's notes that Hurley continues to operate in a challenged and
competitive service area. Failure to improve and sustain operating
margins and the possibility of new debt in the coming years could
pressure Hurley's rating over the long term.
Strengths
* Differentiation of essential high-end tertiary services (e.g.,
burn unit and Level I trauma) generates a draw of patients beyond
the City of Flint and Genesee County. Management reports that more
than 40% of Hurley's business is derived from patients outside the
City of Flint.
* Adequate debt coverage for a Ba rated credit, with 96% cash-to-
debt, 5.5 times debt-to-cash flow, 2.1 times maximum annual debt
service (MADS) coverage, and 22% debt-to-total operating revenues
based on nine-months fiscal year (FY) 2012 results annualized (as
of March 31, 2012).
* Adequate balance sheet ratios for a Ba rated credit with 81
days cash on hand at fiscal year end (FYE) 2011 and 77 days at
March 31, 2012. Conservative balance sheet management with debt
all in fixed rate mode and cash and cash equivalents comprising
84% of Hurley's unrestricted cash and investments.
* Hurley management is committed to reinvesting in the hospital's
physical plant. Hurley's capital spending ratio has averaged 1.9
times over the last five years (including through nine months FY
2012).
Challenges
* Modest operating margins for a Ba rated credit (2.9% adjusted
operating cash flow margin through nine months FY 2012).
* Weak demographic characteristics in the City of Flint as
Medicaid represented a high 39% of gross revenues in FY 2011.
* Challenged economy and state budget in Michigan. Hurley relies
significantly on special funding from the state such as Medicaid
disproportionate share (DSH), which accounts for a sizeable share
of cash flow (just under $60 million in FY 2011, according to
management). While this funding demonstrates significant public
policy support from the state, Moody's views these revenues as "at
risk" and any contraction of these funds will require commensurate
cost reductions.
* Competitive service area, with the presence of two like-sized
competitors in the immediate Flint area, both of which are part of
larger healthcare systems.
* Hurley management is expecting to issue new debt in the coming
years, although management notes that the new debt issuance would
not raise Hurley above the peak level of debt achieved after the
issuance of the Series 2010 bonds.
* Heavily unionized workforce as Hurley employees are represented
by nine different labor bargaining units.
* Hurley's CEO since 2005 left the organization in February 2012
to pursue a CEO position at a three hospital healthcare system in
Massachusetts. In April 2012, the Hurley Board of Managers
appointed Melany Gavulic RN, MBA, as President and CEO. Most
recently, Ms. Gavulic served as the Hurley COO and has served in a
variety of capacities over a 14 year career with Hurley.
Outlook
The stable outlook reflects Moody's expectation that Hurley will
improve operating margins and continue to sustain adequate debt
coverage ratios and balance sheet ratios at the Ba1 rating level.
Failure to improved and sustain operating margins and the
possibility of new debt in the coming years could pressure
Hurley's rating over the long term.
What Could Make The Rating Go Up
Sustained material improvement in cash flow generation and
operating margins leading to improved debt ratios; stronger
balance sheet ratios; significant market share gain
What Could Make The Rating Go Down
Continued thin operating margins; material decline in balance
sheet measures; weaker debt ratios; significant increase in debt
without commensurate growth in cash and cash flow
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in March 2012.
HUSSEY COPPER: Seeks Extension of Plan-Filing Rights
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Hussey Copper Corp. for a second time is seeking an
enlargement of the exclusive right to propose a liquidating
Chapter 11 plan. The company delivered a draft plan and
disclosure statement to the official creditors' committee in late
April. Proceeding with the plan must await disposition of what the
company previously said were the "significant" claims of the
Pension Benefit Guaranty Corp. If approved by the bankruptcy
court at a May 21 hearing, the new plan-filing deadline would be
stretched out by two months to July 4.
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.
ICON HEALTH: S&P Puts 'B+' Corp. Credit Rating on Watch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'B+' corporate credit rating, on Logan, Utah-based fitness
equipment maker ICON Health & Fitness Inc. on CreditWatch with
negative implications.
"The CreditWatch listing follows a continued weakening of credit
measures and a deterioration of free operating cash flow (FOCF)
generation through the first nine months of fiscal 2012 (ICON's
fiscal year ends May 31). As of March 3, 2012, operating lease-
adjusted leverage and interest coverage were 5.6x and 1.9x
compared with 3.5x and 2.8x, respectively, as of March 5, 2011. We
view this level of leverage as weak for the current rating, given
our assessment of ICON's business risk profile. Additionally, FOCF
generation during the nine months ended March 3, 2012 was
meaningfully negative," S&P said.
"The weakening of credit measures and cash flow resulted from a
20% year-over-year decline in EBITDA during the first three
quarters of fiscal 2012," said Standard & Poor's credit analyst
Ariel Silverberg. "Although revenue over this period was
relatively stable, EBITDA margin declined about 200 basis points
(bps). The EBITDA decline resulted from a nearly 70-bp increase in
cost of sales, and about a 135-bp increase in selling expenses.
The increase in cost of sales was primarily the result of
manufacturing issues the company experienced early in fiscal 2012.
Even though the company has begun to take measures to address
these issues, we believe it could take several more quarters and
incremental costs to fully resolve them. Furthermore, though the
increase in selling expenses was largely due to a one-time fee
paid to a retailer in connection with a sales agreement, we expect
selling expenses to remain elevated, given our belief that ICON
will continue pursuing sales growth through direct channels, as
well as expanding relationships with a larger base of retailers.
We believe EBITDA could continue to decline over the next few
quarters," S&P said.
"In resolving our CreditWatch listing, we expect to meet with
management to discuss their plans to resolve current manufacturing
challenges as well as for building additional, and enhancing
existing, customer relationships. We will consider a downgrade if
we do not believe there is a likely and timely path for improving
EBITDA margin back in line with fiscal 2011 levels. Absent
improved profitability, it is unlikely that credit measures will
support the existing rating," S&P said.
INFUSYSTEM HOLDINGS: Sean McDevitt Discloses 8.1% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Sean McDevitt disclosed that, as of April 24,
2012, he beneficially owns 1,732,361 shares of common stock of
Infusystem Holdings, Inc., representing 8.1% of the shares
outstanding.
Mr. McDevitt acquired $250,000 worth of common stock to be paid in
three installments pursuant to the terms of a Consulting Agreement
entered into by and between Mr. McDevitt and the Company, dated
April 24, 2012. The consideration for the shares is the
consulting services to be provided by Mr. McDevitt to the Company
and the termination of a Share Award Agreement between the Company
and Mr. McDevitt. The first installment under the Consulting
Agreement occurred on May 2, 2012, in the amount of 38,017 shares.
Those number of shares was calculated using the Market Value of
the Common Stock on May 2, 2012.
In addition, Tripletail, LLC, disclosed beneficial ownership of
1,234,044 common shares or a 5.8% equity stake. Tripletail is a
limited liability company of which Mr. McDevitt is the sole
member, formed for the sole purpose of holding shares of Common
Stock and uses the same address as Mr. McDevitt.
A copy of the amended filing is available for free at:
http://is.gd/wjX4tX
About InfuSystem Holdings
InfuSystem Holdings, Inc., operates through operating
subsidiaries, including InfuSystem, Inc., and First Biomedical,
Inc. InfuSystem provides infusion pumps and related services.
InfuSystem provides services to hospitals, oncology practices and
facilities and other alternate site healthcare providers.
Headquartered in Madison Heights, Michigan, InfuSystem delivers
local, field-based customer support, and also operates pump
service and repair Centers of Excellence in Michigan, Kansas,
California, and Ontario, Canada.
The Company reported a net loss of $45.44 million in 2011,
compared with a net loss of $1.85 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$76.26 million in total assets, $36.09 million in total
liabilities, and $40.16 million in total stockholders' equity.
After auditing the Company's 2011 financial statements, Deloitte &
Touche LLP, in Detroit, Michigan, said that the possibility of a
change in the majority representation of the Board and consequent
event of default under the Credit Facility, which would allow the
lenders to cause the debt of $24.0 million to become immediately
due and payable, raises substantial doubt about the Company's
ability to continue as a going concern.
ISTAR FINANCIAL: Agrees to Sell $275 Million of 9% Senior Notes
---------------------------------------------------------------
iStar Financial Inc. has agreed to sell $275 million aggregate
principal amount of its 9.00% Senior Notes due 2017 at 98.012% of
their principal amount in a private offering. iStar will use the
net proceeds from the offering to repay unsecured indebtedness
maturing in 2012.
The Notes were offered only to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as
amended, and to non-U.S. persons outside the United States in
reliance upon Regulation S under the Securities Act.
About iStar Financial
New York-based iStar Financial Inc. (NYSE: SFI) provides custom-
tailored investment capital to high-end private and corporate
owners of real estate, including senior and mezzanine real estate
debt, senior and mezzanine corporate capital, as well as corporate
net lease financing and equity. The Company, which is taxed as a
real estate investment trust, provides innovative and value added
financing solutions to its customers.
The Company reported a net loss of $25.69 million in 2011,
compared with net income of $80.20 million in 2010.
The Company's balance sheet at March 31, 2012, showed $7.58
billion in total assets, $6.08 billion in total liabilities and
$1.50 billion in total equity.
* * *
As reported by the TCR on March 29, 2011, Fitch Ratings has
upgraded the Issuer Default Rating to 'B-' from 'C'.
The upgrade of iStar's IDR is based on the improved liquidity
profile of the company, pro forma for the new senior secured
credit agreement (the new financing) that extends certain of the
company's debt maturities, relieving the overhang of significant
secured debt maturities in June 2011.
As reported by the Troubled Company Reporter on March 22, 2011,
Standard & Poor's said that it raised its counterparty credit
rating on iStar Financial Inc. to 'B+' from 'CCC' and removed it
from CreditWatch where it was placed with positive implications on
Feb. 23. The outlook is stable.
"The upgrade reflects the company's closing of a $2.95 billion
senior secured credit facility, which it will use to refinance the
company's existing secured bank facilities and repay a portion of
the company's unsecured debt," said Standard & Poor's credit
analyst Jeffrey Zaun. If S&P's analysis of the new secured
facility indicates 100% or more collateral coverage, S&P will rate
the issue 'BB-'. If S&P's analysis of collateral indicates less
than 100% coverage, S&P will rate the issue 'B+'.
KB TOYS: Claims-Trade Ruling Sets Stage for Final Payout
--------------------------------------------------------
Peg Brickley at Dow Jones' DBR Small Cap reports that in a
decision that will be closely read in the community of firms that
trade in the bills of bankrupt companies, a judge knocked out
$650,000 worth of claims asserted against defunct retailer KB
Toys.
About KB Toys
Headquartered in Pittsfield, Massachusetts, KB Toys, Inc. --
http://www.kbtoys.com/-- operated a chain of retail toy stores.
On Jan. 14, 2004, the Debtor and 69 of its affiliates filed for
protection under Chapter 11 of the Bankruptcy Code, which were
administratively consolidated under Case No. 04-10120. Two of the
200 bankruptcy cases remain open, KB Toys Inc. and KB Toy of
Massachusetts Inc. In connection with the emergence of KB Toys
from bankruptcy in August 2005, and the subsequent organizational
restructuring, the assets and operations of many of these prior
debtors were transferred among then existing debtor entities and
consolidated with KB Toys Group. Furthermore, most of the
entities involved were either dissolved or were merged into
surviving entities, and several of them changed their names.
The company, together with eight of its affiliates, again filed
for Chapter 11 on December 11, 2008 (Bankr. D. Del. Lead Case No.
08-13269). Joel A. Waite, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in
their restructuring efforts. The Debtors proposed Wilmer Cutler
Pickering Hale and Dorr LLP as their co-counsel, FTI Consulting
Inc. as financial and restructuring advisor, and Epiq Bankruptcy
Solutions LLC as claims and noticing agent.
KB disclosed assets of $241 million against debt totaling $362
million in its Chapter 11 petition filed. The debts include $143
million in unsecured claims; and $200 million in secured claims,
including $95.1 million owed to first-lien creditors where General
Electric Capital Corp. serves as agent; and $95 million owed to
second-lien creditors.
The Hon. Kevin Carey of the U.S. Bankruptcy Court for the District
of Delaware allowed KB Toys Inc. to start going-out-of-business
sales promptly after the Chapter 11 filing.
LIBERATOR INC: Taps Equities Awareness for Investor Relations
-------------------------------------------------------------
Liberator, Inc., has engaged Equities Awareness Group to assist
the Company in its investor relations efforts and to increase the
investment community's awareness of the Company. Those services
to include investor relations campaign planning, development and
distribution of Company investor relations information through
third-party investor databases and other channels.
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 $920,000
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.
LITTLE MOUNTAIN: Wants to Hire Cook Group as Real Estate Appraiser
------------------------------------------------------------------
Little Mountain Rabbit Patch LLC seeks permission from the U.S.
Bankruptcy Court for the District of Utah to employ The Cook Group
as a real estate appraiser.
The Debtor's main asset consists of 48.37 acres parcel of real
property located at 791 S. 9350 West in Ogden, Utah. Of the 48.37
total acreage, 20.61 acres contain three buildings: Building A,
Building B and Building C. The remaining 27.76 acres are
considered excess land.
The Debtor intends to sell the property, either as a whole or in
subdivided parcels, either through a confirmed plan or through an
order under Section 363 of the U.S. Bankruptcy Code. The Debtor
may seek to subdivide the Property as part of the sales process,
if it is determined that subdivision will enhance the value of the
Property.
The Debtor wants Cook to conduct an appraisal of the Property.
The purpose of the appraisal will be to determine the value of the
Property in its current condition and in various parcels assuming
a subdivision of the Property as part of the Debtor's
reorganization efforts.
Cook has agreed to prepare the appraisal for a fee of $7,000. It
is anticipated that the work will be performed by or at the
direction of Richard Cook, a principal of Cook. In the event
deposition or courtroom testimony is required, Cook will charge
the Debtor $250 per hour for Mr. Cook's time. Sid Thatcher, the
majority owner of the Debtor, has agreed to pay $7,000 fee for the
appraisal and to treat that payment as a capital contribution to
the Debtor.
To the best of the Debtor's knowledge, Cook is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Little Mountain
North Salt Lake, Utah-based Little Mountain Rabbit Patch, LLC,
filed for Chapter 11 bankruptcy protection (Bankr. D. Utah Case
No. 12-22554) on March 5, 2012. In its schedules, the Debtor
disclosed $6.86 million in total assets and $9.19 million in total
liabilities. Holland & Hart, LLP, serves as the Debtor's
bankruptcy counsel. Judge Joel T. Marker presides over the case.
LITTLE MOUNTAIN: Taps Highland Commercial as Real Estate Broker
---------------------------------------------------------------
Little Mountain Rabbit Patch LLC asks for authorization from the
U.S. Bankruptcy Court for the District of Utah to employ Highland
Commercial, Inc., as real estate brokerage firm on a commission
basis.
The Debtor's main asset consists of 48.37 acres parcel of real
property located at 791 S. 9350 West in Ogden, Utah. Of the 48.37
total acreage, 20.61 acres contain three buildings: Building A,
Building B and Building C. The remaining 27.76 acres are
considered excess land.
The Debtor intends to sell the property, either as a whole or in
subdivided parcels, either through a confirmed plan or through an
order under Section 363 of the U.S. Bankruptcy Code. The Debtor
may seek to subdivide the Property as part of the sales process,
if it is determined that subdivision will enhance the value of the
Property.
The Debtor wants Highland as its broker to list the Property on a
commission basis pursuant to the terms of the Listing Agreement
and Agency Disclosure between the Debtor and Highland. Under that
agreement, the Debtor grants the firm, including its agent Gary
R. Nelson, for the period of six months starting on the date
of bankruptcy court approval of the agreement, and ending at
5:00 p.m. on the 180th day following the approval, the exclusive
right to effect a sale of the Property for $3.850 million, or such
other price and terms to which the Debtor may agree in writing.
Upon the closing of a sale of all or a portion of the Property,
Highland will be paid 6.0% of the gross sale price. In the event
of a sale of all or a portion of the Property in which there is no
participating broker, Highland will be paid 5.0% of the gross sale
price. In the event of a sale of the Property before Highland
begins actively marketing the Property, Highland will be paid 2.5%
of the gross sale price. In the event of any other disposition of
the Property, the Debtor will pay Highland a brokerage fee
equivalent to the number of hours worked times these hourly rates,
plus out-of-pocket costs and expenses:
Gary R. Nelson $300
David M. Anderson $200
Daniel G. Nelson $200
Colson Kramer $100
Joseph D. Nelson $100
Other Staff Members $50
To the best of the Debtor's knowledge, Highland is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Little Mountain
North Salt Lake, Utah-based Little Mountain Rabbit Patch, LLC,
filed for Chapter 11 bankruptcy protection (Bankr. D. Utah Case
No. 12-22554) on March 5, 2012. In its schedules, the Debtor
disclosed $6.86 million in total assets and $9.19 million in total
liabilities. Holland & Hart, LLP, serves as the Debtor's
bankruptcy counsel. Judge Joel T. Marker presides over the case.
LITTLE MOUNTAIN: Has Nod to Hire Holland & Hart as Bankr. Counsel
-----------------------------------------------------------------
Little Mountain Rabbit Patch LLC obtained permission from the U.S.
Bankruptcy Court for the District of Utah to employ the law firm
of Holland & Hart, LLP, as bankruptcy counsel.
As reported by the Troubled Company Reporter on April 20, 2012,
the Debtor proposed that Holland & Hart will be compensated in
these hourly rates:
Doyle S. Byers $345
Mona L. Burton $420
Other Attorneys $190-$715
Paralegals $135-$195
North Salt Lake, Utah-based Little Mountain Rabbit Patch, LLC,
filed for Chapter 11 bankruptcy protection (Bankr. D. Utah Case
No. 12-22554) on March 5, 2012. In its schedules, the Debtor
disclosed $6.86 million in total assets and $9.19 million in total
liabilities. Holland & Hart, LLP, serves as the Debtor's
bankruptcy counsel. Judge Joel T. Marker presides over the case.
LOCATION BASED TECH: Gets $500,000 from Promissory Note
-------------------------------------------------------
Location Based Technologies, Inc., entered into a Securities
Purchase Agreement with an accredited investor pursuant to which
the Company issued a promissory note and common stock warrants to
the Investor and the Company received $500,000 in cash from the
Investor.
The Note is unsecured and has a term of 6 months. The loan can be
converted into equity at the end of the term only if the principal
and interest are not repaid. The loan can also be converted into
equity prior to the end of the loan term if the Company defaults
by violating a covenant. The number of shares issued upon
conversion will be the conversion amount divided by the conversion
price. The Note was issued at an original issue discount of 10%.
If the loan is repaid within the first 90 days, no additional
interest will be charged. If Company extends the loan beyond the
first 90 days, an additional 12% interest shall be charged for the
next 90 days. There shall be no further extensions beyond 180
days.
The Warrants permit the Investor to purchase 1,086,957 shares of
common stock at $0.23 per share. The Warrants will be exercisable
for 60 months and are subject to adjustment for stock splits,
dividends and similar recapitalization transactions and have
piggyback registration rights.
The Company will use the proceeds from the raise for general and
administrative purposes.
About Location Based Technologies
Headquartered in Irvine, Calif., Location Based Technologies, Inc.
(OTC BB: LBAS) -- http://www.locationbasedtech.com/-- designs,
develops, and sells personal, pet, and vehicle locator devices and
services.
Comiskey & Company, in Denver Colorado, expressed substantial
doubt about the Company's ability to continue as a going concern
following the 2011 results. The independent auditors noted that
the Company has incurred recurring losses since inception and has
an accumulated deficit in excess of $37 million. There is no
established sales history for the Company's products, which are
new to the marketplace.
The Company's balance sheet at Feb. 29, 2012, showed $7.35 million
in total assets, $4.07 million in total liabilities, $520,432 in
commitments and contingencies, and $2.75 million in total
stockholders' equity.
LOCATION BASED TECH: Inks Consulting Agreement with Dr. Gadget
--------------------------------------------------------------
Location Based Technologies, Inc., has signed a Consulting
Agreement with Dave Dettman (a.k.a. Dr. Gadget). Under the terms
of the Agreement, Mr. Dettman will help LBT build a comprehensive
retail marketing plan and establish a product and location
services awareness campaign. Mr. Dettman has previously worked
with LBT and presented PocketFinder products on television shows
The View and Extra!
"We are committed to making a concerted marketing push this year,"
said CEO, Dave Morse. "Dr. Gadget is a well-known television
personality and he is a trusted name in consumer electronics. His
assistance will help commercialize our products in a very credible
way."
"In the ever changing world of consumer electronics PocketFinder
has proven itself to be a fan favorite," said Dettman. "I am
truly excited to work with the LBT team to develop its awareness
and market presence."
About Location Based Technologies
Headquartered in Irvine, Calif., Location Based Technologies, Inc.
(OTC BB: LBAS) -- http://www.locationbasedtech.com/-- designs,
develops, and sells personal, pet, and vehicle locator devices and
services.
Comiskey & Company, in Denver Colorado, expressed substantial
doubt about the Company's ability to continue as a going concern
following the 2011 results. The independent auditors noted that
the Company has incurred recurring losses since inception and has
an accumulated deficit in excess of $37,000,000. There is no
established sales history for the Company's products, which are
new to the marketplace.
The Company's balance sheet at Feb. 29, 2012, showed $7.35 million
in total assets, $4.07 million in total liabilities, $520,432 in
commitments and contingencies, and $2.75 million in total
stockholders' equity.
LOUISIANA-PACIFIC: Moody's Rates $300MM Sr. Unsecured Notes 'B1'
----------------------------------------------------------------
Moody's Investors Service affirmed Louisiana-Pacific Corporation's
("LP") Ba3 corporate family rating and assigned a B1 senior
unsecured rating to the company's proposed $300 million senior
unsecured notes due 2020. Proceeds from the proposed debt offering
will be primarily used to fund the company's recently announced
cash tender offer for all of the outstanding 13.0% senior secured
notes due 2017. LP's Speculative Grade Liquidity rating is SGL-2
and the rating outlook remains stable.
Moody's took the following rating actions:
- Assigned B1 rating to proposed senior unsecured notes due 2020
Ratings Rationale
The Ba3 corporate family rating reflects the company's leading
market share, broad North American footprint and expectations that
the company's financial position will improve as the US housing
market moves toward trend levels. The rating also reflects the
company's strong cash position and increasing Latin American
presence. The company's rating is challenged by the volatility of
the company's primary product -- oriented strand board (OSB), the
lack of product diversity and the company's exposure to the
cyclical housing market. The protracted housing construction
slowdown has created a severe slump in demand for OSB as well as
the company's other products, engineered wood products and siding.
The proposed notes are senior unsecured obligations of LP and are
rated B1, one notch below the company's corporate family rating,
reflecting the priority of the proposed notes behind the company's
secured debt, including the $100 million secured credit facility
and Chilean term credit facility (both unrated). The company's
existing 13.0% senior secured notes due 2017 (currently rated Ba3)
are expected to be repaid from the proceeds of the proposed note
offering and their ratings will be withdrawn. The ratings are
subject to the conclusion of the proposed transaction and Moody's
review of final documentation.
The SGL-2 speculative grade liquidity rating reflects good
liquidity as indicated by the company's large cash position,
availability under third party liquidity arrangements and modest
cash burn over the next year. The company's primary source of
liquidity is its unrestricted cash that stood at approximately
$280 million on March 31, 2012. The company has no borrowings
outstanding under its $100 million committed asset-based credit
facility (the ABL), which will mature in October 2016. The
availability under the ABL credit facility is subject to a
borrowing base, which is calculated based on certain percentages
of accounts receivable and inventory. In addition, the ABL credit
facility contains a covenant requiring the company to maintain a
fixed charge coverage ratio of at least 1.1 to 1.0 at any time
that the company's unused borrowing base capacity falls below $15
million. Incorporating the unavailability due to the fixed charge
coverage test and approximately $9 million letters of credit
usage, the availability under the ABL was about $76 million on
March 31, 2012. Moody's estimates modest cash burn of
approximately $20 million over the next year. The company has no
significant debt maturities over the next 12 months.
The stable outlook reflects Moody's expectation that the company's
financial results will remain volatile with a gradual improvement
as US housing starts move closer to trend levels. The company
could face a pullback if OSB supply is not properly managed with
respect to demand. The rating could be lowered if it appears that
the company's liquidity deteriorates significantly and if
TD/EBITDA does not trend towards 5x over the next 2 years. An
upgrade would depend on a sustained improvement in the company's
financial performance. An upgrade may be considered if liquidity
remains good and if normalized RCF/TD and (RCF-Capex)/TD measures
approach 20% and 12%, respectively, on a sustainable basis.
The principal methodologies used in this rating were Global Paper
and Forest Products Industry published in September 2009, and Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Headquartered in Nashville, Tennessee, Louisiana-Pacific
Corporation (LP) is a leading manufacturer and distributor of
wood-based building materials. It is North America's largest
producer of OSB (oriented strand board) with an approximate 22%
market share (based on production). LP currently operates 21 OSB,
siding and EWP (engineered wood products) facilities in the U.S.
and Canada, two OSB facilities in Chile and one OSB facility in
Brazil. Most of LP's products are used in new home construction,
repair and remodeling and manufactured housing.
LUCID INC: Square 1 Bank Forbearance Expired May 7
--------------------------------------------------
Lucid, Inc., entered into a First Amendment to Forbearance
Agreement and Second Amendment to Loan and Security Agreement with
Square 1 Bank, relating to the Loan and Security Agreement dated
as of July 20, 2011, as amended and the Forbearance Agreement and
First Amendment to Loan and Security Agreement dated as of
March 30, 2012, as amended.
Among other things, the Amendment:
(a) extends the forbearance period to May 7, 2012;
(b) provides a new term loan maturity date, which is May 7,
2012; and
(c) requires immediate repayment of $500,000 in principal
amount of the term loans by the Company upon effectiveness
of the Amendment.
A copy of the First Amendment is available for free at:
http://is.gd/mhzcen
As of May 8, 2012, Lucid has announced an extension of the
forbearance agreement.
About Lucid Inc
Rochester, N.Y.-based Lucid, Inc., is a medical device company
that designs, manufactures and sells non-invasive cellular imaging
devices that assist physicians in the early detection of disease.
The Company's VivaScope(R) platform produces rapid noninvasive,
high-resolution cellular images for subsequent diagnostic review
by physicians, pathologists and other diagnostic readers.
For 2011, Deloitte & Touche LLP, in Rochester, New York, expressed
substantial doubt about Lucid's ability to continue as a going
concern. The independent auditors noted that of the Company's
recurring losses from operations, deficit in equity, and projected
need to raise additional capital to fund operations.
The Company reported a net loss of $9.05 million for 2011,
compared with a net loss of $4.30 million 2010.
The Company's balance sheet at Dec. 31, 2011, showed $6.29 million
in total assets, $6.96 million in total liabilities, and a
stockholders' deficit of $665,220.
MADISON 92ND: Plan Confirmation Hearing Scheduled for May 17
------------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York will convene a hearing on May 17,
2012, at 10:00 a.m., Eastern Time, to consider the confirmation of
Madison 92nd Street Associates, LLC's First Amended Plan of
Reorganization, dated April 4, 2012.
The Court set May 11, at 4:00 p.m., as the deadline for ballots
accepting or rejecting Plan, and for objections, if any, to the
Plan confirmation.
The Court also authorized the Debtor to make non-material changes
to the Disclosure
Statement, the Plan and related documents (including the
appendices thereto and exhibits to this Disclosure Statement
Order) before distributing Solicitation Materials to each creditor
or other party-in-interest in accordance with the terms of this
Disclosure Statement Order without further
order of the Bankruptcy Court.
According to the Disclosure Statement, the cornerstone of the Plan
is the sale of the hotel and pursuit of causes of action against
Courtyard and other Marriott Parties. It is expected, but not
guaranteed, that the net sale proceeds will be sufficient to pay
all creditors in full. In the event that the sale results in the
rejection of the Management Agreement, Courtyard intends to assert
a rejection claim in the many millions of dollars. While the
Debtor believes that no such claim should be allowed, it believes
that any such claim will be below $500,000, and possibly zero.
However, in the event that the Bankruptcy Court approves a larger
rejection claim than the Debtor expects, that the confirmation of
the Plan will not delayed, as the Plan is essentially a "pot
plan", whereby the net proceeds of the sale of the hotel will be
distributed to creditors in order of priority in accordance with
the terms of the Plan. However, the existence of a large
Courtyard rejection claim may affect the amount and timing of
creditor distributions.
Estimated Recoveries
Class Claims Recovery
----- ------ --------
N/A Unclassified Claims 100%
Class 1 Priority Non-Tax Claims 100%
Class 2 GECC Secured Claim Undetermined, but as high
as 100%
Class 3 General Unsecured Claims Undetermined, but as high
as 100%
Class 4 Other Unsecured Claims Undetermined, but as high
as 100%
Class 5 Equity Interests Undetermined
A full-text copy of the Disclosure Statement is availability for
free at http://bankrupt.com/misc/MADISON_92ND_ds_firstamended.pdf
About Madison 92nd
Madison 92nd Street Associates, LLC, owns real property improved
by a hotel located at 410 East 92nd Street, New York, known as the
Upper East Side Courtyard by Marriott. It filed for Chapter 11
bankruptcy protection as lender General Electric Capital Corp.,
owed $74 million, has scheduled a foreclosure sale for Aug. 24,
2011. The petition (Bankr. S.D.N.Y. Case No. 11-13917) was filed
Aug. 16, 2011, before Judge Stuart M. Bernstein. J. Ted Donovan,
Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as the
Debtor's counsel. Cushman & Wakefield Sonnenblick Goldman, LLC
serves as financial advisors. It scheduled $84,471,069 in assets
and $75,398,580 in debts. The petition was signed by Louis Taic,
managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow,
managing member of JKNY, LLC, members of the Debtor.
Courtyard Management Corporation, which manages and operates the
hotel pursuant to a management agreement, is represented by Thomas
R. Califano, Esq., and William M. Goldman, Esq., at DLA Piper LLP
(US).
The Bankruptcy Judge appointed an examiner to explore the best
route to reorganization for the Debtor amid a rift between two
investor groups. Thomas R. Slome, the examiner, tapped his firm,
Meyer, Suozzi, English & Klein, P.C., as his counsel.
The cornerstone of the Debtor's Plan is the sale of the hotel and
pursuit of causes of action. It is expected, but not guaranteed,
that the net sale proceeds will be sufficient to pay all creditors
in full.
The Court authorized Debtor to sell substantially all of the
estate's real estate assets in an auction led by CIM Group
Acquisitions, LLC.
MAGNUM HUNTER: Moody's Assigns B3 CFR, Rates $450MM Notes Caa1
--------------------------------------------------------------
Moody's Investors Service assigned first time ratings to Magnum
Hunter Resources Corporation (MHR), including a B3 Corporate
Family Rating (CFR), a B3 Probability of Default Rating (PDR), and
a Caa1 rating to the company's proposed $450 million senior
unsecured notes. Moody's also assigned an SGL-3 Speculative Grade
Liquidity Rating reflecting adequate liquidity. The rating outlook
is stable.
Net proceeds from the note issue will be used to repay outstanding
balances under MHR's existing senior secured term loan and
revolving bank facilities and to fund acquisitions.
Issuer: Magnum Hunter Resources Corporation
Assignments:
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3
US$450M Senior Unsecured Regular Bond/Debenture, Assigned
Caa1
US$450M Senior Unsecured Regular Bond/Debenture, Assigned a
range of LGD4, 67
Speculative Grade Liquidity Rating, Assigned SGL-3
Ratings Rationale
"The B3 CFR reflects MHR's small scale early stage E&P operations;
high leverage relative to current production and reserves levels;
and the execution and financing risks surrounding the company's
planned transformation into a sizeable unconventional oil and gas
producer over the next two years," commented Sajjad Alam, Moody's
analyst. "Despite building a substantial acreage position in
several liquids-rich shale plays since 2009, MHR has conducted
limited developmental drilling to date, and will need to spend
heavily though 2014 to prove up reserves, grow production and
preserve land leases."
The B3 CFR is supported by MHR's significant and growing oil
production, repeatable unconventional properties that have
predictable geology and contain a large inventory of drilling
locations, and its diversified presence in several prolific
liquids-rich hydrocarbon basins in North America. The rating also
considers MHR's experienced management team, above-market natural
gas price hedges through 2013, and the value in the company's
midstream assets.
The $450 million senior unsecured notes are rated Caa1, one notch
below the B3 CFR given the size of the $212.5 million secured
revolving borrowing base credit facility and its priority ranking
within MHR's liability structure. The Caa1 rating on the senior
unsecured notes reflects both the overall probability of default
of MHR, to which Moody's assigns a PDR of Caa1, and a loss given
default of LGD4 (67%) under Moody's Loss Given Default
Methodology.
While MHR has been able to stage strong organic production growth
since the third quarter of 2011, the company's current production
level of roughly 14,000 barrels of oil equivalent (boe) per day
and proved reserves of 59 million boe (proforma for the North
Dakota property acquisition from Baytex Energy Corp.) are small
compared to higher rated B2 E&P companies. Consequently, the
company's ability to translate its resource potential into
meaningful production and reserves growth demonstrating capital
efficiency, sustainability and financial flexibility will be keys
to gaining upward rating momentum.
Shale drilling is technologically challenging and very capital
intensive. Furthermore, the geological profile of the company's
core shale properties has not been fully established. Despite
MHR's substantial drilling plan and capital commitments, there are
risks that the company could be challenged in the initial years
while optimizing production and returns that could lead to slower
than expected ramp up in production and cash flows. Continued
weakness in natural gas prices could also undermine cash flow
generation beyond 2013, given that gas will continue to comprise
roughly 30% to 40% of MHR's production on a volumetric basis.
However, the ongoing strategy to invest the vast majority of the
company's capital towards oily targets should partially offset the
natural gas exposure.
MHR should have adequate liquidity through mid-2013, which is
captured in Moody's SGL-3 rating. Proforma for the $450 million
note and $200 million equity issuances, the company will have
approximately $49 million of cash and full availability under its
$235 million borrowing base revolver at closing. The company plans
to spend heavily through mid-2013 to grow production and reserves,
and therefore, will significantly outspend internal cash flows.
The revolver should cover any funding gap. The borrowing base
should increase over time as the company adds reserves throughout
2012 and 2013. The company was in breach of its working capital
covenant (minimum current ratio of 1x) at December 31, 2011, which
was subsequently waived by the banks. However, the covenant has
been amended and reduced to 0.85x for June 30, 2012 and Moody's
believes the company will be in compliance with this ratio through
mid 2013 because of higher revolver availability following the
proposed note issue and the Baytex property acquisition.
MHR's midstream assets (Eureka Hunter) are not pledged to MHR's
bank lenders and could provide alternate liquidity. While Eureka
Hunter has its own $75 million credit facilities (non-recourse to
MHR), given the modest amount of debt relative to asset value in
the midstream entity, MHR could monetize a portion of its
ownership in a distressed situation.
The stable outlook assumes MHR will fund its growth without
materially increasing leverage or depleting liquidity.
Successful execution of MHR's drilling and capital plan will be
keys to a stronger credit profile. An upgrade would be considered
if it appears that production can be sustained above 20,000
boe/day and debt to average daily production sustained below
$37,000 per boe.
The rating could be downgraded if MHR acquires additional non-
producing properties using debt, and/or significantly outspends
its operating cash flows pushing debt to average daily production
above the $48,000 per boe level. Any significant erosion of
liquidity could also trigger a downgrade.
The principal methodologies used in rating MHR were Independent
Exploration and Production (E&P) Industry published in December
2011, and Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Magnum Hunter Resources Corporation (MHR) is a Houston, Texas
based publicly traded oil and gas exploration and production (E&P)
company with principal assets in the states of West Virginia,
Kentucky, Ohio, Texas, North Dakota and Saskatchewan, Canada.
MARIANA RETIREMENT FUND: More Retirees Seek Case Dismissal
----------------------------------------------------------
Ferdie de la Torre at Saipan Tribune reports that two retirees and
members of the Northern Mariana Islands Retirement Fund are
joining the move to have the Fund's Chapter 11 bankruptcy petition
dismissed.
The report notes Joaquin Q. Atalig and Jesus I. Taisague, through
counsel Ramon K. Quichocho, Esq., have submitted to the Court a
notice of joinder to a motion to dismiss that was filed earlier by
two unnamed retirees.
According to the report, Mr. Quichocho said his clients are
joining Jane Roe and John Doe -- the unnamed retirees represented
by attorney Bruce Jorgensen's group -- in seeking the dismissal of
the Fund's Chapter 11 petition because the Fund does not meet the
Chapter's requirements. Unquestionably, Mr. Quichocho said, the
Fund is not a "person that may be a debtor under Chapter 7," and
therefore the Fund cannot be a debtor under Chapter 11.
The report relates Mr. Quichocho said the Fund is a "governmental
unit" that is ineligible to file for Chapter 11 bankruptcy. He
said the Fund was fully aware that it is a "governmental unit" and
not a "person" under the Bankruptcy Code. He added that the
filing of the bankruptcy was not lawful nor was it properly
authorized because the Fund board has no power to declare
bankruptcy on behalf of the Fund.
The report notes the U.S. Trustee had also asked the Court over
the weekend to dismiss the bankruptcy petition. Assistant U.S.
Trustee Curtis Ching echoed the position of Mr. Jorgensen's
unnamed clients that the Fund's structure and statutory existence
makes it clear that it is a "governmental unit" of the CNMI.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that U.S. Bankruptcy Judge Robert J. Faris will convene a
hearing May 31 in the afternoon in Honolulu to consider the
requests by the individuals and the U.S. Trustee to dismiss the
Chapter 11 case. Mr. Rochelle notes the individuals also argue
that the fund's resolution to file bankruptcy was made without
public notice under the island government's open meetings law.
According to the report, in addition to urging dismissal, the U.S.
Trustee argues that the fund has no power to change benefits.
About NMI Retirement Fund
The Northern Mariana Islands Retirement Fund --
http://www.nmiretirement.com/-- is a public corporation of the
Commonwealth of the Northern Mariana Islands that receives and
invests retirement contributions and pays certain benefits to or
on account of certain retirees of the Commonwealth government,
their survivors, and certain disabled persons.
The Fund, through its administrator Richard Villagomez, filed a
Chapter 11 bankruptcy petition in the U.S. District Court for the
Northern District of Mariana Islands in Saipan (Case No. 12-00003)
on April 17, 2012.
The Fund is represented by Brown Rudnick LLP and the Law Office of
Braddock J. Huesman, LLC.
The Fund said in court papers that the Chapter 11 filing was
precipitated by the discrepancy between the Debtor's current
ability to pay benefits to beneficiaries and the Debtor's current
obligations to those same beneficiaries. The Fund said it would
exhaust its cash by July 2014. It has been unable to collect a
$325 million judgment against the islands' government, and the
commonwealth decided to reduce contributions toward workers'
pensions.
As a result of continuous underfunding, which necessitated
withdrawing from its portfolio to cover funding shortfalls, the
value of the Fund's assets has fallen from $353,475,412 in 2009 to
its current level of $268,448,997, the Debtor's counsel has said.
The counsel also said the Fund is subject to liabilities (both
current and actuarial) totaling about $911 million.
MARKET STREET: Disclosure Statement Hearing Date Reset to May 29
----------------------------------------------------------------
Rebecca Mowbray at The Times-Picayune reports that the hearing
date to consider approval of the disclosure statement explaining
the bankruptcy-exit plan of Market Street Properties, the owner of
the Market Street power plant, has been rescheduled for May 29
after a creditor filed a limited objection and Market Street
Properties amended the plan outline. The hearing had originally
been scheduled for May 2.
According to the report, creditor Boxer Finance wanted more detail
placed in the disclosure statement about an agreement it struck
last year with Market Street, and wanted a "more realistic
estimate" of the size of the pool of unsecured creditors.
The report notes in the original filing, Market Street had
estimated that unsecured creditors had about $23.9 million in
claims. Boxer says there are more than $64 million in secured and
unsecured claims.
Under the plan, unsecured creditors would share any money made
available to compensate them on a pro-rata basis, the report says.
About Market Street Properties
Oceanside, New York-based Market Street Properties, L.L.C., owns a
roughly 500,000 square-foot power plant, two substations, and
three parcels of vacant land. It filed for Chapter 11 bankruptcy
(Bankr. E.D. La. Case No. 09-14172) on Dec. 23, 2009, represented
by Christopher T. Caplinger, Esq., Joseph Patrick Briggett, Esq.,
and Stewart F. Peck, Esq., at Lugenbuhl Wheaton Peck Rankin &
Hubbard, in New Orleans. Cupkovic Architecture LLC serves as the
Debtor's architect; and Patrick J. Gros, CPA, as accountant.
James E. Fitzmorris, Jr., serves as political consultant and
advisor. The Company disclosed $52,404,026 in assets and
$26,848,596 in liabilities as of the Chapter 11 filing.
An official committee of unsecured creditors has not been
appointed in the Debtor's case.
MARONDA HOMES: Chapter 11 Reorganization Case Closed
----------------------------------------------------
The U.S. Bankruptcy Court for the Western District of
Pennsylvania, according to Maronda Homes, Inc.'s case docket,
closed the Chapter 11 case of the Debtor.
As reported in the Troubled Company Reporter on Jan. 5, 2012, the
Court entered an order granting final approval of the disclosure
statement and confirming and its affiliated debtors' Joint Chapter
11 Plan of Reorganization dated Aug. 12, 2011.
Class 1 (Secured Lenders) and Class 5 (Equity Class), the two
voting classes, both voted to accept the Plan.
A copy of the Order approving the joint disclosure statement and
confirming the Debtors' joint Chapter 11 Plan of Reorganization,
with findings of fact and conclusions of law, is available for
free at http://bankrupt.com/misc/marondahomes.doc245.pdf
As reported in the TCR on Sept. 1, 2011, pursuant to the Plan,
Debtors will continue in business with a revised credit agreement
in place with most or all of its lenders.
Under the Plan, all undisputed claims of creditors other than the
Debtors' secured lenders and equity holders are paid in full.
A full-text copy of the Disclosure Statement is available at
http://bankrupt.com/misc/marondahomes.DS.pdf
About Maronda Homes
Maronda Homesm Inc., based in Clinton, Pennsylvania, near
Pittsburgh, builds homes in Florida, Pennsylvania, Georgia and
Kentucky. It filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Pa. Case No. 11-22418) on April 18, 2011. Joseph F.
McDonough, Esq., and James G. McLean, Esq., at Manion Mcdonough &
Lucas, P.C., serve as the Debtor's bankruptcy counsel. In its
schedule, Maronda Homes disclosed $83,784,549 in assets and
$91,773,703 in liabilities.
Affiliates Maronda Homes, Inc. of Ohio (Bankr. W.D. Pa. Case No.
11-22422) and Maronda Homes of Cincinnati, LLC (Bankr. W.D. Pa.
Case No. 11-22424) also filed separate Chapter 11 petitions.
MATTERHORN NURSERY: Shuts Down Business in Mid-April
----------------------------------------------------
Garden Center magazine reports that Matterhorn Nursery abruptly
closed its doors in mid-April. According to the report, the
nursery held an auction April 28 through May 1, selling everything
from windows and bike racks to paintings and fountains.
Matterhorn owners Matt and Ronnie Horn filed for Chapter 11
bankruptcy protection in 2010 after the Town of Ramapo pulled out
of a deal to purchase 15 acres of Matterhorn's land.
Matterhorn Nursery, Inc., filed for Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 10-23887) on Sept. 10, 2010. Dana Patricia
Brescia, Esq., at Alter, Goldman & Brescia, LLP, in New York,
serves as counsel to the Debtor. The Debtor estimated assets and
debts of $1 million to $10 million.
MAUI LAND: Files Form 10-Q; Incurs $244,000 Net Loss in Q1
----------------------------------------------------------
Maui Land & Pineapple Company, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $244,000 on $5.31 million of total
operating revenues for the three months ended March 31, 2012,
compared with net income of $12.42 million on $3.84 million of
total operating revenue for the same period during the prior year.
The Company's balance sheet at March 31, 2012, showed
$64.03 million in total assets, $90.12 million in total
liabilities, and a $26.09 million stockholders' deficiency.
Liquidity
The Company has two primary credit facilities that have financial
covenants requiring among other things, a minimum of $4 million in
liquidity, a maximum of $175 million in total liabilities, and a
limitation on new indebtedness. Failure to satisfy the minimum
liquidity covenants or to otherwise default under one credit
agreement could result in a default under both credit agreements
resulting in all outstanding borrowings becoming immediately due
and payable. The Company has pledged a significant portion of its
real estate holdings as security for borrowings under these credit
facilities.
The Company's cash outlook for the next twelve months and its
ability to continue to meet its financial covenants is highly
dependent on selling certain real estate assets in a difficult
market. If the Company is unable to meet its financial covenants
resulting in the borrowings becoming immediately due, the Company
would not have sufficient liquidity to repay those outstanding
borrowings. In addition, the Company is subject to several
purchase commitments and contingencies that could negatively
impact its future cash flows, including commitments of up to $35
million to purchase the spa, beach club improvements and the
sundry store of Kapalua Bay Holdings, LLC (Bay Holdings), a U.S.
Equal Employment Opportunity Commission (EEOC) matter related to
the Company's discontinued agricultural operations, and funding
requirements related to the Company's defined benefit pension
plans.
The aforementioned circumstances raise substantial doubt about the
Company's ability to continue as a going concern. There can be no
assurance that the Company will be able to successfully achieve
its initiatives in order to continue as a going concern.
In response to these circumstances, the Company continues to
undertake efforts to generate cash flow by employing its real
estate assets in leasing and other arrangements, by the sale of
several real estate assets and by continued cost reduction
efforts. The Company is currently in discussions with the other
members of Bay Holdings and the lenders to negotiate the terms of
the purchase and sale of the Amenities.
A copy of the Form 10-Q is available for free at:
http://is.gd/2cZ5vF
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.
MCCALTCHY CO: Files Form 10-Q; Incurs $2.1MM Net Loss in Q1
-----------------------------------------------------------
The McClatchy Company filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.08 million on $288.30 million of revenues for the three
months ended March 25, 2012, compared with a net loss of $1.96
million $303.73 million of revenues for the three months ended
March 27, 2011.
The Company's balance sheet at March 25, 2012, showed
$2.91 billion in total assets, $2.74 billion in total liabilities
and $173.68 million in stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/obGFRr
In a separate filing, McClatchy registered with the SEC 12.6
million shares of Class A common stock issuable under the
Company's 2012 Omnibus Incentive Plan. The proposed aggregate
maximum offering price is $34.04 million. A copy of the Form S-8
prospectus is available for free at http://is.gd/pK9XAU
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).
* * *
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.
NASSAU BROADCASTING: Reaps $49MM in Sale of 19 Stations
-------------------------------------------------------
Dow Jones Newswires reports that Nassau Broadcasting Partners LP
announced ahead of its sale hearing that an affiliate of Goldman
Sachs Group Inc. purchased the majority of Nassau's radio stations
at auction with a $37.8 million credit bid, which uses debt as
currency.
According to the report, Goldman Sachs Credit Partners LP was the
successful bidder during the May 3 auction for 11 radio stations
-- a combination of AM and FM -- located in Pennsylvania and New
Jersey. The Goldman Sachs affiliate was one of three petitioning
creditors that pushed Nassau into bankruptcy in September,
claiming that the company owed it $69.8 million in an involuntary
petition.
Other auction results, according to Dow Jones:
$6.4 million -- amount paid by Manning Broadcasting Inc. to
acquire three Maryland radio stations. Two of
those radio stations had belonged to Maryland
radio-station owner Manning Broadcasting prior
to 2004, according to the Herald-Mail. Nassau
paid at least $18 million for two radio
stations -- one that it sold back to Manning
and another that it didn't -- in 2004.
$2.7 million -- amount paid by John H. Garabedian, the host of
a weekend pop-music show called Open House
Party, to purchase three Cape Cod, Mass., FM
radio stations.
$250,000 -- amount paid by Presence Radio Network Inc., a
Catholic radio-station operator, for one
station in Maine; and
$150,000 -- amount paid by Mainestream Media LLC for
another station in Maine.
Nassau Broadcasting Partners LP is a radio-station owner and
operator. Three secured lenders -- affiliates of Goldman Sachs
Group Inc., Fortress Investment Group LLC and P.E. Capital LLC --
filed involuntary Chapter 7 bankruptcy petitions (Bankr. D. Del.
Case No. 11-12934) on Sept. 15, 2011, against Nassau Broadcasting
Partners LP, the owner of 45 radio stations in the northeastern
U.S. The lender group said in court papers that they are owed
$83.8 million secured by all of Nassau's property. Involuntary
petitions were also filed against three affiliates of Nassau,
which is based in Princeton, New Jersey. The lenders said the
stations aren't worth enough to pay them in full.
Nassau Broadcasting in October won a Delaware bankruptcy court's
blessing to convert its involuntary Chapter 7 bankruptcy --
pressed by creditors including Goldman Sachs Lending Partners LLC
-- to a proceeding on its own terms in Chapter 11.
NASSAU BROADCASTING: Wants Until August 7 to File Chapter 11 Plan
-----------------------------------------------------------------
Dow Jones Newswires notes Nassau Broadcasting Partners LP asked
the Court to extend the timeline until Aug. 7 for it to
exclusively file a Chapter 11 plan. The deadline was originally
set to expire May 9. Nassau also asked to be allowed to
exclusively solicit acceptance of the plan until Oct. 8. This
would be Nassau's second extension of the deadline.
About Nassau Broadcasting
Nassau Broadcasting Partners LP is a radio-station owner and
operator. Three secured lenders -- affiliates of Goldman Sachs
Group Inc., Fortress Investment Group LLC and P.E. Capital LLC --
filed involuntary Chapter 7 bankruptcy petitions (Bankr. D. Del.
Case No. 11-12934) on Sept. 15, 2011, against Nassau Broadcasting
Partners LP, the owner of 45 radio stations in the northeastern
U.S. The lender group said in court papers that they are owed
$83.8 million secured by all of Nassau's property. Involuntary
petitions were also filed against three affiliates of Nassau,
which is based in Princeton, New Jersey. The lenders said the
stations aren't worth enough to pay them in full.
Nassau Broadcasting in October won a Delaware bankruptcy court's
blessing to convert its involuntary Chapter 7 bankruptcy --
pressed by creditors including Goldman Sachs Lending Partners LLC
-- to a proceeding on its own terms in Chapter 11.
NEVADA CANCER: Court Sets June 27 as Governmental Claims Bar Date
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada established
June 27, 2012, as the last day for any governmental units to file
proofs of claim against Nevada Cancer Institute.
Proofs of claim may be filed by mail, in person, or by courier at
this address:
NVCI Claims Processing
c/o Kurtzman Carson Consultants, LLC
2335 Alaska Avenue
El Segundo, CA 90245
About Nevada Cancer
Founded in 2002, Nevada Cancer Institute is a nonprofit cancer
institute committed to advancing the frontiers of knowledge of
cancer and reducing the burden of cancer on the people of Nevada..
It formerly maintained a state-of-the-art outpatient cancer
treatment and research facility in the Summerlin area of Las
Vegas.
Nevada Cancer Institute filed for bankruptcy (Bankr. D. Nev. Case
No. 11-28676) on Dec. 2, 2011, blaming mounting financial
pressures arising from the protracted decline in the economy,
decreases in medical reimbursement rates from managed care payor
entities, increases in operational costs, decreases in the amount
and availability of charitable donations, a reduction in research
funding opportunities and increased competition. Lisa Madar
signed the petition as secretary.
Klee, Tuchin, Bogdanoff & Stern LLP, serves as the Debtor's
bankruptcy counsel; Lewis and Roca LLP as reorganization co-
counsel; Alvarez & Marsal Healthcare Industry Group LLC as the
Debtor's restructuring advisors. Kurtzman Carson Consultants LLC
serves as the Debtor's claims and noticing agent.
Chief Bankruptcy Judge Mike K. Nakagawa, who oversees the case,
ruled in January that the appointment of a patient care ombudsman
is not necessary.
Robert J. Feinstein, Esq., Samuel R. Maizel, Esq., and Shirley s.
Cho., at Pachulski Stang Ziehl & Jones LLP, represent the
Official Committee of Unsecured Creditors as counsel. Lenard E.
Schwartzer, Esq., and Jeanette E. McPherson, Esq., at Schwartzer &
McPherson Law Firm, represents the Committee as local counsel.
Counsel for Bank of America, N.A., as agent for the prepetition
lenders, are Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at
Pillsbury Winthrop Shaw Pittman LLP.
The Debtor underwent a significant prepetition operational
restructuring, and, after filing for bankruptcy, sold key assets
to the Regents of the University of California, on behalf of its
UC San Diego Health System, for $18 million in a Court-approved
sale pursuant to Bankruptcy Code section 363 that closed Jan. 31,
2012. The Regents of the University of California on behalf of
its UC San Diego Health System, is represented by James W. Kapp,
III, Esq., and Gary B. Gertler, Esq., at McDermott Will & Emery.
NEW ENGLAND BUILDING: Deering Lumber Buys Stores in Maine
---------------------------------------------------------
Building-Products.com reports that Deering Lumber has acquired
stores in Sanford and Springvale, Maine, from bankrupt New England
Building Materials.
According to the report, NEBM was left with its store and Lavalley
Pine eastern white pine sawmill in Sanford, Maine. At the end of
April, the Sanford showroom reopened under the Deering name, while
the Springvale location is being remodeled in hopes of reopening
in June. NEBM retained the sawmill, and its products will be sold
at Deering stores.
About New England Building Materials
Based in Sanford, Maine, New England Building Materials LLC,
fka Lavalley Lumber Company LLC and Poole Brothers, filed for
Chapter 11 bankruptcy (Bankr. D. Maine Case No. 12-20109) on
Feb. 14, 2012. New England Building Materials is engaged in the
business of manufacturing and selling, at wholesale, Eastern White
Pine lumber and related products. It was also engaged in the
business of selling lumber products at retail, through outlets in
Maine and Massachusetts, although, as of the bankruptcy filing
date, it has made the determination to cease retail activities.
Chief Judge James B. Haines Jr. presides over the case. Lawyers
at Marcus, Clegg & Mistretta, P.A., serve as the Debtor's counsel.
In its petition, the Debtor estimated $10 million to $50 million
in assets and debts. The petition was signed by Richard I.
Thompson, chief financial officer.
NORTHERN OIL: Moody's Rates new $250MM Sr. Unsecured Notes 'Caa1'
-----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Northern Oil
and Gas, Inc.'s (NOG) proposed $250 million senior unsecured notes
due 2020. Moody's also assigned a B3 Corporate Family Rating, B3
Probability of Default Rating, and a SGL-3 Speculative Grade
Liquidity (SGL) rating to NOG. The proceeds from the proposed
notes offering will be used to repay borrowings under NOG's
secured revolving credit facility, fund capital expenditures and
for general corporate purposes. This is the first time that
Moody's has rated NOG. The rating outlook is stable.
Ratings Rationale
Northern's B3 Corporate Family Rating reflects the company's
growing but still small production profile, limited operating
history at its current size, high capital spending needs to
develop the company's resources, as well as its limited control
over the pace of this development due to its non-operator status.
The B3 rating is supported by the company's strong acreage
position in the Williston Basin, considerable well diversity for a
company of its size, and the diversity and operational track
record of its operating partners. The rating also considers NOG's
high oil weighted production, resulting in strong cash margins,
returns and cash flow coverage of debt and helping to partially
offset high leverage in terms of debt/production.
NOG's business model is focused on owning non-operated working
interests in oil and gas wells and acreage primarily in the Bakken
and Three Forks formations within the Williston Basin. With net
average daily production of 8,500 boe/d for the first quarter
2012, Northern is one of the smaller companies in Moody's rated
E&P peer group and has concentration risk. However, the company
has an attractive and growing acreage position in the core Bakken
and Three Forks plays that is supportive of a large, lower risk
drilling inventory and has considerable well diversity for a
company of its size.
With only 34% of NOG's proved reserves and 37% of its total
acreage position developed, as well as a significant acreage
position not held by production, the company faces considerable
capital spending needs to develop its resources. Even assuming
strong oil prices and production growth, Moody's expects these
capital spending needs will outstrip operating cash flows for the
next several years. This high spending requirement necessitates
that Northern maintains good liquidity. With the proposed bond
issuance, the company's 2012 funding needs should be sufficiently
met. Moody's also positively notes that the company has a good
track record of equity funding its capital needs.
NOG's non-operated model limits the company's control over its
capital spending because it must fund its proportion of the
drilling costs for any wells its operators elect to drill or lose
its interest in those wells. As such, the pace, as well as the
success, of the development of NOG's acreage is subject to the
discretion and ability of its various operating partners. Given
the supportive oil price outlook and strong returns generated from
oil wells in the basin, Moody's expects the spending pace of NOG's
operating partners to remain robust. In addition, NOG should
benefit from the sound operating track record of its 25-plus
operating partners.
Given Northern's oil weighted production (93% of 2011 production
was oil), the company has and should continue to generate strong
cash margins and returns. Moody's expects NOG to generate
unlevered cash margins in excess of $70/barrel in 2012, which more
than sufficiently covers rising interest costs and Moody's
expectation of higher F&D costs. NOG's oil focus also supports
good cash flow coverage of debt for the rating. Moody's projects
that retained cash flow/debt (as adjusted for Moody's standard
adjustments) will approximate 60% in 2012. This strong cash flow
coverage of debt helps to partially mitigate high leverage in
terms of debt/production, which Moody's estimates will
approximately $35,000 per day in 2012.
NOG's SGL-3 rating reflects the expectation for adequate liquidity
through 2012, supported by the company's pro forma undrawn
borrowing base revolver and cash balances, which should fund
negative free cash flow generation this year. Pro forma for the
notes issuance, NOG will have $69 million of cash and no drawings
under its $188 million borrowing base credit facility due January
2017, as of March 31, 2012. The SGL-3 rating also reflects the
company's oil weighted production and significant hedges of
projected 2012 production. The SGL-3 rating is tempered by the
company's significant capital spending needs, which are expected
to outstrip cash flow over in 2012 by $183 million, the lack of
alternate sources of liquidity given that the revolving credit
facility is secured by substantially all of the company's assets,
and by the borrowing base mechanism on the credit facility.
The Caa1 rating on the proposed notes reflects both the overall
probability of default of NOG, to which Moody's assigns a
Probability of Default of B3, and a loss given default of LGD 5
(70%). The company has a $750 million ($188 million borrowing
base, pro forma for the notes issuance) secured revolving credit
facility. The proposed notes are unsecured and therefore are
subordinate to NOG's senior secured credit facility's first lien
claim to the company's assets. This results in the notes being
notched one rating beneath the B3 Corporate Family Rating under
Moody's Loss Given Default Methodology. However, the Caa1 rating
on the unsecured notes could be double notched below the Corporate
Family Rating if secured debt levels increased materially over an
extended period.
The stable rating outlook assumes that NOG will maintain adequate
liquidity in order to fund its capital spending needs. The ratings
could be upgraded if NOG achieves net average daily production in
excess of 15 MBOE per day while maintaining strong cash flow
coverage of debt (retained cash flow to debt above 40%). On the
other hand, the ratings could be downgraded if NOG fails to
maintain adequate liquidity to fund its capital program or the
production response to capital spending is not in line with
forecasts.
Northern Oil and Gas, Inc. is headquartered in Wayzata, Minnesota.
NORTHWEST AIRLINES: 6th Cir. Nixes Pilots' Age Discrimination Suit
------------------------------------------------------------------
Ben James, writing for Law360.com, reports that the U.S. Court of
Appeals for the Sixth Circuit on Monday rejected a bid from a
group of ex-Northwest Airlines Inc. pilots to revive a case
alleging the Air Line Pilots Association discriminated against
older union members when it divvied up an $888 million claim from
NWA's bankruptcy. A three-judge appeals court panel upheld a
Michigan federal court's decision to grant the union summary
judgment on the plaintiffs' claims for breach of duty of fair
representation under the Railway Labor Act and violations of the
federal Age Discrimination in Employment Act.
The case is Frederick N. Bondurant; Malcolm D. Corner; Robert F.
Holliker; Mark E. Kunnen; David P. Mathison; Estate of William E.
Thompson III, Plaintiffs-Appellants, v. Air Line Pilots
Association, International; Northwest Airlines Master Executive
Council, Defendants-Appellees, No. 10-1904 (6th Cir.). A copy of
the Sixth Circuit's decision dated May 7, 2012, is available at
http://is.gd/kLMuSOfrom Leagle.com.
Northwest Airlines and 12 affiliates filed for Chapter 11
protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
17930). On May 21, 2007, the Court confirmed the Northwest
Debtors' amended plan. That amended plan took effect May 31,
2007.
On Dec. 31, 2009, Northwest merged with and into Delta.
Delta and 18 affiliates filed for Chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented
the Delta Debtors in their restructuring efforts. On April 25,
2007, the Court confirmed the Delta Debtors' plan. That plan
became effective on April 30, 2007.
OXYSURE SYSTEMS: Converts $251K Notes to Shares
-----------------------------------------------
OxySure Systems, Inc., received fully executed agreements
documenting the extension of the maturities of that certain First
Landlord Note and Second Landlord Note, and the conversion of the
Notes into common stock.
The First Landlord Note, a subordinated convertible note with a
principal amount of $125,000, and the Second Landlord Note, a
subordinated convertible note with a principal amount of $126,407
were issued to the Company's landlord, Sinacola Commercial
Properties, Limited, on Dec. 10, 2009. The Agreements received on
May 3, 2012, provide inter alia, for the following:
(1) With an effective date of March 30, 2012, the First
Landlord Note was converted into 125,000 shares of
restricted common stock at a conversion price of $1.00 per
share, in accordance with the conversion provisions of the
First Landlord Note;
(2) With an effective date of March 30, 2012, the Second
Landlord Note was converted into 84,271 shares of
restricted common stock at a conversion price of $1.50 per
share, in accordance with the conversion provisions of the
Second Landlord Note; and
(3) With an effective date of May 3, 2012, upon receipt of the
fully executed Agreements the Landlord was issued with
21,819 restricted shares of common stock for no additional
consideration.
About OxySure Systems
Frisco, Tex-based OxySure Systems, Inc., was formed on Jan. 15,
2004, as a Delaware "C" Corporation for the purpose of developing
products with the capability of generating medical grade oxygen
"on demand," without the necessity of storing oxygen in compressed
tanks. The Company developed a unique technology that generates
medically pure (USP) oxygen from two dry, inert powders. Other
available chemical oxygen generating technologies contain hazards
that the Company believes make them commercially unviable for
broad-based emergency use by lay rescuers or the general public.
The Company's launch product is the OxySure Model 615 portable
emergency oxygen system. The Company believes that the OxySure
Model 615 is currently the only product on the market that can be
safely pre-positioned in public and private venues for emergency
administration of medical oxygen by lay persons, without the need
for training.
The Company reported a net loss of $1.53 million in 2011, compared
with a net loss of $1.57 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $947,934 in
total assets, $3.72 million in total liabilities, and a
$2.77 million total stockholders' deficit.
For the year ended Dec. 31, 2011, Sam Kan & Company, in Alameda,
California, noted that the Company has suffered recurring losses
and has experienced negative cash flows from operations, which
raises substantial doubt about the Company's ability to continue
as a going concern.
PEMCO WORLD: Committee Retains Otterbourg as Lead Counsel
---------------------------------------------------------
The Official Committee of Unsecured Creditors of Pemco World Air
Services, Inc., et al., seeks permission from the Bankruptcy Court
to retain Otterbourg, Steindler, Houston & Rosen, P.C., as its
lead counsel.
OSH&R will, among other things:
(a) assist and advise the Committee in its consultation with
the Debtors relative to the administration of these cases;
(b) attend meetings and negotiate with the representatives of
the Debtors and other parties-in-interest;
(c) to assist and advise the Committee in its examination and
analysis of the conduct of the Debtors' affairs; and
(d) assist the Committee in the review and analysis of any
financing agreements.
To the best of the Committee's knowledge, the members and
associates of OSH&R do not have any connection with the Debtors,
their creditors or any other party-in-interest.
OSH&R's current hourly rates are:
Partner/Counsel $570-$895
Associate $255-$610
Paralegal $225-$245
The firm will also seek for reimbursement of actual and necessary
expenses incurred by it in connection with its representation of
the Committee.
About Pemco World Air Services
Headquartered in Tampa, Florida Pemco World Air Services --
http://www.pemcoair.com/-- performs large jet MRO services, and
has operations in Dothan, AL (military MRO and commercial
modification), Cincinnati/Northern Kentucky (regional aircraft
MRO), and partner operations in Asia.
Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case
No. 12-10799) on March 5, 2012, with a $37.8 million DIP financing
and a "stalking horse" bid from an affiliate of its current owner,
Sun Aviation Services, LLC.
Young Conaway Stargatt & Taylor, LLP has been tapped as general
bankruptcy counsel; Kirkland & Ellis LLP as special counsel for
tax and employee benefits issues; AlixPartners, LLP as financial
advisor; Bayshore Partners, LLC as investment banker; and Epiq
Bankruptcy Solutions LLC as notice and claims agent.
On March 14, 2012, the U.S. Trustee appointed an official
committee of unsecured creditors.
On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case
No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun
Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS
Aviation Services Holding Corp., which in turn owns 100% of the
stock of debtor WAS Aviation Services Inc., which itself owns 100%
of the stock of Pemco World Air Services Inc. Pemco also owes Sun
Aviation $5.6 million. As a result, Sun Aviation is seeking
separate counsel. However, Sun Aviation obtained an order jointly
administering its case with those of the Pemco debtors.
PEMCO WORLD: Committee Taps Cousins Chipman as Co-Counsel
---------------------------------------------------------
The Official Committee of Unsecured Creditors in the chapter 11
cases of Pemco World Air Services, Inc., et al., seeks permission
from the Bankruptcy Court to retain Cousins Chipman & Brown, LLP,
as its co-counsel nunc pro tunc to March 23, 2012. Cousins
Chipman will, among other things:
(a) provide legal advice with respect to the rights, powers and
duties of the Committee;
(b) assist the Committee in its investigation and analysis of
the acts, conduct, assets, liabilities and financial
condition of the Debtors, the operation of the Debtors'
business and any other matter relevant to the Debtors'
cases as and to the extent those matters may affect the
Debtors' creditors;
(c) participate in negotiations with parties-in-interest with
respect to any disposition of the Debtors' assets, plan of
reorganization and disclosure statement in connection with
that plan, and otherwise protect and promote the interests
of the Debtors' creditors;
(d) prepare all necessary applications, motions, responses,
objections, answers, orders, reports and other legal papers
on behalf of the Committee, and appear on behalf of the
Committee at Court hearings as necessary and appropriate in
connection with the Debtors' cases;
(e) represent the Committee in all matters arising in the
Chapter 11 cases, including any disputes or issues with the
Debtors, alleged secured creditors and other third parties;
and
(f) represent the Committee in all aspects of confirmation
proceedings.
CCB's current hourly rates are:
Professional Rate Per Hour
------------ -------------
Scott D. Cousins $645
Mark D. Olivere $435
Ann M. Kashishian $250
Partners $495-$645
Associates $250-$450
Legal Assistants/Paralegals $150-$225
CCB will also charge its clients in all areas of practice for all
other expenses incurred in connection with the client's case.
The Committee believes that CCB is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
About Pemco World Air Services
Headquartered in Tampa, Florida Pemco World Air Services --
http://www.pemcoair.com/-- performs large jet MRO services, and
has operations in Dothan, AL (military MRO and commercial
modification), Cincinnati/Northern Kentucky (regional aircraft
MRO), and partner operations in Asia.
Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case
No. 12-10799) on March 5, 2012, with a $37.8 million DIP financing
and a "stalking horse" bid from an affiliate of its current owner,
Sun Aviation Services, LLC.
Young Conaway Stargatt & Taylor, LLP has been tapped as general
bankruptcy counsel; Kirkland & Ellis LLP as special counsel for
tax and employee benefits issues; AlixPartners, LLP as financial
advisor; Bayshore Partners, LLC as investment banker; and Epiq
Bankruptcy Solutions LLC as notice and claims agent.
On March 14, 2012, the U.S. Trustee appointed an official
committee of unsecured creditors.
On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case
No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun
Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS
Aviation Services Holding Corp., which in turn owns 100% of the
stock of debtor WAS Aviation Services Inc., which itself owns 100%
of the stock of Pemco World Air Services Inc. Pemco also owes Sun
Aviation $5.6 million. As a result, Sun Aviation is seeking
separate counsel. However, Sun Aviation obtained an order jointly
administering its case with those of the Pemco debtors.
PEMCO WORLD: Files Schedules of Assets and Liabilities
------------------------------------------------------
Pemco World Air Services, Inc., filed with the Bankruptcy Court
its schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $0
B. Personal Property $57,804,482
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $37,437,895
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $16,529,838
----------- -----------
TOTAL $57,804,482 $53,967,733
A copy of the Schedules is available for free at:
http://bankrupt.com/misc/PEMCO_sal.pdf
Was Aviation Services Holding Corp filed with the Court its
Schedules disclosing $0 assets and $14.3 million liabilities
comprising mainly of claims against secured creditors. A copy of
the Schedules is available for free at:
http://bankrupt.com/misc/PEMCOWAS_sal.pdf
Was Aviation Services, Inc., also filed its Schedules disclosing
$0 assets and $38.03 million of liabilities, a copy of which is
available for free at:
http://bankrupt.com/misc/PEMCOSERVICES_sal.pdf
About Pemco World Air Services
Headquartered in Tampa, Florida Pemco World Air Services --
http://www.pemcoair.com/-- performs large jet MRO services, and
has operations in Dothan, AL (military MRO and commercial
modification), Cincinnati/Northern Kentucky (regional aircraft
MRO), and partner operations in Asia.
Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case
No. 12-10799) on March 5, 2012, with a $37.8 million DIP financing
and a "stalking horse" bid from an affiliate of its current owner,
Sun Aviation Services, LLC.
Young Conaway Stargatt & Taylor, LLP has been tapped as general
bankruptcy counsel; Kirkland & Ellis LLP as special counsel for
tax and employee benefits issues; AlixPartners, LLP as financial
advisor; Bayshore Partners, LLC as investment banker; and Epiq
Bankruptcy Solutions LLC as notice and claims agent.
On March 14, 2012, the U.S. Trustee appointed an official
committee of unsecured creditors.
On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case
No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun
Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS
Aviation Services Holding Corp., which in turn owns 100% of the
stock of debtor WAS Aviation Services Inc., which itself owns 100%
of the stock of Pemco World Air Services Inc. Pemco also owes Sun
Aviation $5.6 million. As a result, Sun Aviation is seeking
separate counsel. However, Sun Aviation obtained an order jointly
administering its case with those of the Pemco debtors.
PENN VIRGINIA: Moody's Rates New $450MM Sr. Unsecured Notes 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Penn Virginia
Resource Partners, L.P.'s (PVR) proposed $450 million of senior
unsecured notes. PVR's other ratings remained unchanged. The
outlook is negative.
Net proceeds from this note issue will be used to partially cover
the approximately $1.0 billion purchase price of Chief Gathering
LLC's midstream assets in the Marcellus Shale. This note issue is
consistent with Moody's expectation, and the company's intention,
to use roughly 45% debt and 55% equity in the financing mix.
Assignments:
Issuer: Penn Virginia Resource Partners, L.P.
Senior Unsecured Regular Bond/Debenture, Assigned B2, LGD5, 81%
Multiple Seniority Shelf, Assigned a range of (P)B2 to (P)B3
Ratings Rationale
PVR's Ba3 Corporate Family Rating (CFR) reflects the partnership's
high leverage following the acquisition of Chief's midstream
assets; project execution, capital and throughput volume risks
surrounding the expansion of pipeline capacity in the dry gas
producing region of the Marcellus Shale; and its MLP structure
that imposes high distribution burden. The rating is supported by
PVR's substantial coal royalty business that has historically
generated steady cash flows under long term contracts, as well as
by the strong growth prospects of its geographically diversified
midstream operations. The negative outlook reflects PVR's elevated
leverage following the Chief acquisition.
Under Moody's Loss Given Default (LGD) methodology, PVR's $750
million senior unsecured notes are rated B2 (LGD5, 81%), two
notches below the Ba3 CFR given the substantial size of the $1.0
billion secured revolving credit facility in PVR's capital
structure, which has a first-lien claim to substantially all of
the partnership's assets.
The rating outlook could be revised to stable if PVR can
substantially achieve its growth volumes, lower the debt/EBTIDA
leverage below 4.5x and maintain sufficient availability under the
credit facility.
An upgrade in unlikely in 2012. However, positive rating momentum
could develop if PVR reduced leverage below 3.5x with its current
suite of assets.
The rating could be downgraded if leverage remains above 5x over
an extended period.
The principal methodologies used in rating PVR were the Global
Midstream Energy Rating Methodology published in December 2010 and
the Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA Methodology published in
June 2009.
Penn Virginia Resource Partners, L.P. which is headquartered in
Radnor, Pennsylvania, is principally engaged in the management of
coal and natural resource properties and the gathering and
processing of natural gas in the United States.
PHILADELPHIA ORCHESTRA: To File Chapter 11 Plan This Month
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Philadelphia Orchestra intends to file a Chapter
11 plan this month that would be financed partly by a fundraising
drive intended to raise between $3 million and $4 million, mostly
from the ensemble's more than 70 board members, said the
orchestra's attorney, Lawrence G. McMichael.
According to the report, On May 4 the orchestra filed its fourth
request for an extension of the exclusive right to propose a plan.
If approved at a May 21 hearing by the U.S. Bankruptcy Court in
Philadelphia, the new deadline will be Aug. 9.
The orchestra negotiated a new contract with musicians and won
authority to terminate the existing musicians' pension plan.
Negotiations are almost complete on a new lease for the Kimmel
Center, where the orchestra performs.
About Philadelphia Orchestra
The Philadelphia Orchestra -- http://www.philorch.org/-- claims
to be among the world's leading orchestras. Bloomberg News says
the orchestra became the first major U.S. symphony to file for
bankruptcy protection, surprising the music world.
Previous conductors include Fritz Scheel (1900-07), Carl Pohlig
(1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80),
Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and
Christoph Eschenbach (2003-08). Charles Dutoit is currently chief
conductor, and Yannick Nezet-Seguin has assumed the title of music
director designate until he takes up the baton as The Philadelphia
Orchestra's next music director in 2012.
The Philadelphia Orchestra Association, Academy of Music of
Philadelphia, Inc., and Encore Series, Inc., filed separate
Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to
11-13100) on April 16, 2011. Judge Eric L. Frank presides over
the case. The Philadelphia Orchestra Association is being advised
by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal,
its financial advisor. Curley, Hessinger & Johnsrud serves as its
special counsel. Philadelphia Orchestra disclosed $15,950,020 in
assets and $704,033 in liabilities as of the Chapter 11 filing.
Encore Series, Inc., tapped EisnerAmper LLP as accountants and
financial advisors.
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
seven members to the official committee of unsecured creditors in
the Debtors' case. Reed Smith LLP serves as the Committee's
counsel.
The orchestra postpetition signed a new contract with musicians
and authority to terminate the existing musicians' pension plan.
PINNACLE AIRLINES: USW Outraged With PinnPro Services Unit Closure
------------------------------------------------------------------
The United Steelworkers issued this statement concerning Pinnacle
Airlines Corporation's announcement that the bankrupt airline
plans to shutter its PinnPro Professional Ground Services unit:
The USW is outraged that more than 800 hardworking men and women
will be losing their jobs as a result of Pinnacle management's
mistakes.
The company has issued a three-page "Q&A" concerning the closure
of the PinnPro business where management describes the benefits
that it intends to offer employees at closure. The USW has
reminded both its members and management that the economic terms
of any such package will and must be subject to negotiations with
our union.
The USW is committed to making sure Pinnacle management is held
accountable throughout the bankruptcy process and will fight at
the bargaining table to ensure that workers are not asked to
sacrifice their jobs, wages and benefits so that the company's top
managers can continue to give themselves raises.
The USW also represents approximately 1,800 flight attendants at
Pinnacle Airlines and its subsidiary, Colgan Air. The USW says
that negotiations with Pinnacle over collective bargaining
agreements for the more than 2,600 USW-represented flight
attendants and ground service personnel have not yet begun.
The USW will need the support of all of its members at Pinnacle to
push management for better terms than those outlined in the
company's initial communication about the announcement.
The USW represents about 850,000 working men and women in the
United States, Canada and the Caribbean in a wide variety of
industries, ranging from glass making to mining, paper, steel,
tire and rubber and other manufacturing environments to the public
sector, service and health care industries.
About Pinnacle Airlines
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems -
Bankruptcy Solutions serves as the claims and noticing agent. The
petition was signed by John Spanjers, executive vice president and
chief operating officer.
Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53
billion in total assets, $1.42 billion in total liabilities and
$112.31 million in total stockholders' equity.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
A seven-member official committee of unsecured creditors has been
appointed in the case.
PINNACLE AIRLINES: Hearing on Lease Deals Extension Set for May 16
------------------------------------------------------------------
Pinnacle Airlines Corp., et al., will present, before the
Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the
Southern District of New York on May 16, 2012, at 9:45 a.m.,
(prevailing Eastern Time), for approval of a stipulation extending
until May 31 the lease agreements. Objections, if any, are due
May 9, at 4:00 p.m.
Certain Debtors and CSA Leasing Corp. are parties to certain lease
agreements regarding two Saab 340B aircraft serial numbers 340B-
339 and 340B-356.
The Court entered on April 23, an omnibus order approving (i) the
rejection of certain aircraft, engine and propeller leases
effective as of the Petition Date; and (ii) the satisfaction of
the surrender and return provisions of Section 1110 of the
Bankruptcy Code, which approved the rejection of the leases
effective as of April 30.
The stipulation provides that the rejection effective date of the
leases will be May 31, or such later date as may be agreed in
writing by the Debtors and CSA.
In a separate filing, the Debtors ask the Court for authorization
to reject leases for the engines effective as of April 27. The
Debtors relate that to preserve the value of the engines before GE
Engine Leasing Holdings, Inc. takes possession, the Debtors will
maintain their insurance coverage and continue the existing
storage maintenance program pursuant to the Debtors' Federal
Aviation Administration.
The Debtors explain that the engines no longer fit into the
Debtors' business plans and, accordingly, the Debtors will no
longer use them. Similarly, the leases expire soon and compliance
with the return conditions of the leases would be burdensome and
expensive and provide no corresponding benefit.
The Debtors set a May 16, hearing at 9:45 a.m., on the relief
requested.
Additionally, the Debtors request that the Court approve
procedures for the rejection of contracts and leases and for
the abandonment of expendable property.
A full-text copy of the procedures is available for free at
http://bankrupt.com/misc/PINNACLEAIRLINES_rejectexecutorycontracts
.pdf
About Pinnacle Airlines
Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/--
a $1 billion airline holding company with 7,800 employees, is the
parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.;
and Colgan Air, Inc. Flying as Delta Connection, United Express
and US Airways Express, Pinnacle Airlines Corp. operating
subsidiaries operate 199 regional jets and 80 turboprops on more
than 1,540 daily flights to 188 cities and towns in the United
States, Canada, Mexico and Belize. Corporate offices are located
in Memphis, Tenn., and hub operations are located at 11 major U.S.
airports.
Pinnacle Airlines Inc. and its affiliates, including Colgan Air,
Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East
Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012.
Judge Robert E. Gerber presides over the case. Lawyers at Davis
Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve
as the Debtors' counsel. Barclays Capital and Seabury Group LLC
serve as the Debtors' financial advisors. Epiq Systems -
Bankruptcy Solutions serves as the claims and noticing agent. The
petition was signed by John Spanjers, executive vice president and
chief operating officer.
Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53
billion in total assets, $1.42 billion in total liabilities and
$112.31 million in total stockholders' equity.
Delta Air Lines, Inc., the Debtors' major customer and post-
petition lender, is represented by David R. Seligman, Esq., at
Kirkland & Ellis LLP.
A seven-member official committee of unsecured creditors has been
appointed in the case. The Committee selected Goodrich
Corporation as its chairperson. The Committee tapped Morrison &
Foerster LLP as its counsel.
QUANTUM FUEL: Fails to Meet Nasdaq's $1 Bid Price Requirement
-------------------------------------------------------------
Quantum Fuel Systems Technologies Worldwide, Inc., received a
letter from Nasdaq notifying the Company that, based on its
closing bid price for the last 30 consecutive business days, it no
longer meets the minimum bid price of $1.00 per share required
under Nasdaq Marketplace Rule 5450(a)(1). The notice has no
immediate effect on the listing of Company's securities, and its
common stock will continue to trade on the Nasdaq Global Market
under the symbol "QTWW."
The notice also states that the Company will be provided 180
calendar days, or until Oct. 29, 2012, to regain compliance with
the minimum bid requirement. To regain compliance, the bid price
of the Company's common stock must close at or above $1.00 per
share for a minimum of 10 consecutive business days. If the
Company does not regain compliance prior to Oct. 29, 2012, then
the Company may be eligible for a second 180 day period to regain
compliance. In order to qualify for the additional time, the
Company must apply to transfer its securities to the Nasdaq
Capital Market by Oct. 29, 2012, and, at the time transfer
application is submitted, the Company must satisfy the Nasdaq
Capital Market's requirements for listing, with the exception of
the $1.00 bid price requirement, and meet certain other
requirements. The Company's transfer to the Nasdaq Capital Market
is subject to review by Nasdaq staff. If Nasdaq staff concludes
that the Company will not be able to cure the deficiency, or
should the Company elect not to submit a transfer application,
Nasdaq will provide written notification to the Company that its
common stock will be subject to delisting from the Nasdaq Global
Market. At that time, the Company may appeal Nasdaq's decision to
a Nasdaq Hearing Panel.
The Company intends to monitor the closing bid price of its common
stock between now and Oct. 29, 2012, and to consider available
options if its common stock does not trade at a price likely to
result in the Company regaining compliance with the minimum bid
price requirement.
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 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 reported a
net loss of $11.03 million for the year ended April 30, 2011,
following a net loss of $46.29 million during the prior year.
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.
RAYMOND JAMES: Moody's Issues Summary Credit Opinion
----------------------------------------------------
Moody's Investors Service issued a summary credit opinion on
Raymond James Financial, Inc. and includes certain regulatory
disclosures regarding its ratings. The release does not
constitute any change in Moody's ratings or rating rationale for
Raymond James Financial, Inc. and its affiliates.
Moody's current ratings on Raymond James Financial, Inc. and its
affiliates are:
Long Term Issuer (domestic currency) rating of Baa2
Senior Unsecured (domestic currency) ratings of Baa2
Senior Unsecured Shelf (domestic currency) ratings of (P)Baa2
Subordinate Shelf (domestic currency) ratings of (P)Baa3
Junior Subordinate Shelf (domestic currency) ratings of (P)Ba1
Preferred Shelf (domestic currency) ratings of (P)Ba1
Preferred shelf -- PS2 (domestic currency) ratings of (P)Ba2
RJF Capital Trust I
BACKED Preferred Shelf (domestic currency) ratings of (P)Ba1
RJF Capital Trust II
BACKED Preferred Shelf (domestic currency) ratings of (P)Ba1
RJF Capital Trust III
BACKED Preferred Shelf (domestic currency) ratings of (P)Ba1
RATING RATIONALE
On April 3, 2012, Moody's confirmed the Baa2 Long Term Issuer
Rating for Raymond James Financial, Inc.'s (Raymond James). The
rating outlook was also changed to stable from ratings under
review for possible downgrade.
Moody's notes that Raymond James' recent acquisition of Morgan
Keegan is based on a sound strategic rationale that will provide
Raymond James with increased scale in its core private client
franchise and its agency-focused capital markets business.
Although the acquisition has increased Raymond James' debt burden,
the company's pro forma cash flow leverage is still consistent
with a Baa2 rating. In addition, Raymond James has been successful
in signing Morgan Keegan's most productive financial advisors and
the company has also executed a litigation risk indemnification
agreement with Regions Financial that should adequately protect
Raymond James from Morgan Keegan-related litigation.
Raymond James has a dual broker model with a traditional full-
service brokerage channel where the broker is an employee of
Raymond James, and an independent contractor channel where the
company provides back-office and compliance related support to
registered independent investment advisors. Compared to larger
full-service broker dealer peers, Raymond James' operating metrics
are modest - its typical advisor generates less commission and
fees revenues compared to wire houses, and they keep more of the
revenue that they generate. As a result, Raymond James pre-tax
profit per advisor is competitive with regional or independent
brokers, but is materially lower than its larger full-service
peers. On the other hand, Raymond James' high broker payout ratio
combined with its well established brand and stable performance,
has enabled the company to attract new advisors and client assets
over the past few years. Notwithstanding the inherent compliance,
reputational, and litigation related risks, Moody's expects the
Private Client business to remain the mainstay in generating core
earnings and a key factor in supporting Raymond James'
creditworthiness.
Raymond James' credit profile also benefits from its well
capitalized balance sheet and the low risk profile of its capital
markets business. With projected gross leverage of 6.5x and $2.5
billion in tangible common equity (RJ standalone), Raymond James'
capital adequacy is strong - especially in comparison to the
modest trading and principal investing it takes. The company's
capital markets business is predominantly agency-based and focused
on liquid assets.
Franchise Value : Strong retail brokerage franchise producing
ample cash flow to service debt
Balance Sheet Strength : Well-capitalized balance and relatively
simple balance sheet
Risk Profile : Primarily agency-only business model, and business
diversification from combined Raymond James and Morgan Keegan
Loan Provisions : Likelihood of higher loan provisions from
Raymond James Bank portfolio
Profitability : Modest operating profitability metrics compared to
best in class peers
Challenged Environment : Reduced trading volumes and low interest
rate environment that has constrained operating profitability
Reputational/Compliance/Regulatory Risks : Endemic to the retail
brokerage business model
Rating Outlook
The rating outlook for Raymond James is stable, reflecting the
company's plan to maintain an agency-only focus within its
combined capital markets business, its relatively simple balance
sheet, and the significant proportion of earnings derived from its
less volatile core retail private client franchise. The Baa2
rating also anticipates a successful merger execution.
Moody's notes that Raymond James faces two principal execution
risks with its acquisition of Morgan Keegan. These include: i)
maintaining the profitability of its core retail brokerage
franchise in the midst of lower trading volumes and a low interest
rate environment, and ii) managing the inherent volatility of its
capital markets business, controlling market risk, and limiting
the company's risk appetite.
What Could Change the Rating - Up
Moody's views Raymond James rating as well positioned. However, a
sustainable improvement in operating metrics that leads to pre-tax
margins improving to the 20% range could put positive pressure on
the rating.
What Could Change the Rating - Down
If Raymond James were to significantly increase its trading
inventories, private equity investments or its value at risk this
could lead to downward pressure on the rating.
The methodology used in these ratings was the Global Securities
Industry Methodology published in December 2006.
REDDY ICE: Shareholders Want Official Equity Committee
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that shareholders of Reddy Ice Holdings Inc. say the
company is solvent and are asking the bankruptcy judge in Dallas
to appoint an official equity holders' committee at a hearing
May 11. The shareholders believe Reddy Ice is worth $470 million
to $503 million, according to an appraisal by Blackhill Partners
LLC. Total debt of Reddy Ice is $471.5 million, they say, thus
making the company "clearly solvent." When the U.S. Trustee
declined to appoint an official equity committee, the shareholders
filed papers last week asking the judge for their own committee.
Reddy Ice's Chapter 11 plan is designed to give control to funds
affiliated with private-equity investor Centerbridge Capital
Partners LLC. Shareholders can receive as much as 17 cents a
share through the plan. The shareholders want to upset the
schedule, in which there will be a confirmation hearing on May 18
to approve the reorganization plan on which creditors voted before
the Chapter 11 filing.
About Reddy Ice
Reddy Ice Holdings Inc. and wholly owned subsidiary Reddy Ice
Corp. manufacture and distribute packaged ice in the United
States. As of Dec. 31, 2011, the Company had assets totaling
$434 million and total liabilities of $531 million. The bulk of
the liabilities were total debt outstanding of $471.5 million.
Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12-
32349 and 12-32350) together with a plan of reorganization and
accompanying disclosure statement to complete a previously
announced plan to strengthen its balance sheet and ensure strong
financial footing for the future. As part of the restructuring,
Reddy Ice seeks to pursue a strategic acquisition of all or
substantially all of the businesses and assets of Arctic Glacier
Income Fund and its subsidiaries, including Arctic Glacier Inc., a
major producer, marketer and distributor of packaged ice in North
America.
Arctic Glacier on Feb. 22, 2012, filed for protection under the
Companies' Creditors Arrangement Act in Canada and Chapter 15 of
the Bankruptcy Code in the United States. Arctic is seeking sale
or investment proposals from qualified bidders.
Reddy Ice's Plan provides for the restructuring of the Company's
obligations with respect to $300 million of First Lien Notes;
$139.4 million of Second Lien Notes; and $11.7 million of Discount
Notes. If the Plan is approved, all Second Lien Notes will be
exchanged and will be retired and cancelled and all Discount Notes
will be cancelled. Reddy Ice said the Plan has the support of a
majority of its lenders and major creditors, led by Centerbridge
Capital Partners II, L.P. A hearing to approve the Disclosure
Statement and confirm the Plan has been set for May 18, 2012.
Judge Stacey G. Jernigan presides over the case. Reddy Ice's
financial advisors are Jefferies & Company, Inc. and FTI
Consulting, Inc. Kurtzman Carson Consultants serves as claims and
notice agent.
Centerbridge Partners is represented by Jonathan S. Zinman, Esq.,
Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup
Sathy, Esq., at Kirkland & Ellis.
Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq.,
and David R. Seligman, Esq., also at Kirkland & Ellis.
The ad hoc group of First Lien and Second Lien Noteholders is
represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton
Rosen & Katz. Wells Fargo Bank, National Association, serves as
First Lien and Second Lien Agent.
RESIDENTIAL CAPITAL: Ally Has Treasury Approval on Bankruptcy
-------------------------------------------------------------
Dakin Campbell, writing for Bloomberg News, reports that Ally
Financial Inc. received U.S. Treasury Department approval to put
its Residential Capital unit into bankruptcy as the government
seeks to recover bailout funds.
According to Bloomberg, an Obama administration official, who
asked for anonymity because the arrangements haven?t been made
public, said the Treasury will support directors at Ally and
ResCap if they decide that filing for court protection from
creditors is the best course for the mortgage unit. That person
said the approval is conditioned on a review of terms.
"Treasury wants its money back," Jody Lurie, a corporate credit
analyst at Janney Montgomery Scott LLC in Philadelphia, said in a
telephone interview, according to Bloomberg. "This sign-off is an
indication that Ally has a good-enough plan to prove they can
eventually pay back the government. The only feasible opportunity
for them to get their money back is to split up or sell Ally."
Ally received bailout funds exceeding $17 billion that left the
U.S. Treasury with a 74% stake. Ally has since repaid $5.5
billion through dividends and the sale of Ally securities, Gina
Proia, a company spokeswoman, said in an e-mailed statement,
according to Bloomberg. Matt Anderson, a Treasury spokesman,
declined to comment.
The New York Post, citing unidentified people with knowledge of
the matter, reported that Fortress Investment Group Inc., the
private-equity and hedge fund manager, will probably buy assets
from Ally for $3 billion. The Post also said New York-based
Fortress may pay $2 billion for ResCap and $1 billion for a
portfolio of mortgage-servicing rights Ally holds.
Bloomberg also reports Joshua Rosner, an analyst at Graham Fisher
& Co., said a ResCap bankruptcy may accelerate putback claims,
where holders of mortgage-backed securities issued by the unit try
to force the company to buy back soured loans backing the bonds.
The report notes the claims may saddle Ally with years of lawsuits
that prevent the planned IPO and delay repayment of the bailout.
Ally faced $1.2 billion in outstanding claims at the end of the
first quarter.
"If Treasury waited 12 to 18 months, ResCap would be clean," Mr.
Rosner said, according to Bloomberg. "By filing it they are going
to force an acceleration of claims. The only way they can justify
the filing is if they have a plan that they assume would resolve
it faster than 12 to 18 months."
About Ally Financial & Rescap
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.
Residential Capital is Ally's mortgage subsidiary.
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 reported a net loss of $157 million in 2011, compared with
net income of $1.07 billion in 2010. Net income was $310 million
for the three months ended March 31, 2012. Ally's balance sheet
at March 31, 2012, showed $186.35 billion in total assets, $166.68
billion in total liabilities and $19.66 billion in total equity.
Sources told Reuters in March 2012 that White & Case, which
announced in January it represents some ResCap secured
bondholders, is currently representing investors who hold more
than 45% of junior secured notes at ResCap. The sources also said
billionaire Warren Buffett's Berkshire Hathaway has another 45% of
the junior secured notes and also holds a significant portion of
ResCap unsecured notes that mature in May 2012.
The U.S. Treasury owns a 73.8% stake in Ally after a bailout
during the financial crisis in 2008, while GM and its trust have
9.9% and Cerberus Capital Management owns 8.9%.
* * *
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.
ROBERTS HOTELS: Comfort Inn Hotel in Tampa Files for Bankruptcy
---------------------------------------------------------------
Lisa Brown, writing for The St. Louis Post-Dispatch, reports that
Roberts Hotels Tampa LLC, a Florida hotel owned by the St. Louis-
based Roberts Cos., filed for bankruptcy on May 7, 2012, marking
the fourth time a Roberts hotel has sought bankruptcy protection
since December.
The report notes the Comfort Inn hotel at 820 East Busch Blvd. in
Tampa is closed.
According to the report, the hotel's estimated assets range
between $1 million and $10 million and its liabilities range
between $10 million and $50 million.
The Roberts Cos., led by brothers Michael and Steven Roberts, own
11 hotels in several states. The company has come under financial
distress in recent months in both its real estate holdings and
broadcasting business.
The report relates, in April, Bank of America sued the Roberts
brothers for more than $34 million, alleging they are in default
on a loan connected to multi-million dollar renovations to several
hotels they own outside of Missouri, including Tampa.
The report relates the Roberts brothers said they planned to seek
bankruptcy protection for some of the hotels named in the Bank of
America lawsuit. In addition to Tampa, the Roberts' hotels
included in the Bank of America suit are located in Atlanta,
Dallas, Houston, Shreveport, La., and Spartanburg, S.C.
One of the Roberts Cos. hotels, in Jackson, Miss., which is not
related to the Bank of America lawsuit, filed for bankruptcy in
December.
About Roberts Hotels
Roberts Hotels Spartanburg, LLC, filed a bare-bones Chapter 11
petition (Bankr. E.D. Mo. Case No. 12-43756) in its hometown in
St. Louis, Missouri, on April 19, 2012. The Debtor estimated
assets of up to $50 million and debts of up to $10 million.
Roberts Hotels Spartanburg owns the Clarion Hotel, formerly named
Radisson Hotel & Suites Spartanburg. The Debtor is represented by
A. Thomas DeWoskin, Esq., at Danna McKitrick, PC, in St. Louis.
Roberts Hotels Houston LLC, dba Holiday Inn Houston and Holiday
Inn Southwest, filed for Chapter 11 bankruptcy (Bankr. E.D. Mo.
Case No. 12-43590) on April 16, 2012. Judge Charles E. Rendlen
III presides over the case. The Danna McKitrick firm also serves
as counsel. Roberts Hotels Houston estimated under $50,000 in
assets and $10 million to $50 million in debts. The petition was
signed by Michael W. Kirtley, chief operating officer.
On Dec. 15, 2011, Roberts Hotels Jackson LLC, which owns Roberts
Walthall Hotel, filed for Chapter 11 protection (Bankr. S.D. Miss.
Case No. 11-04341), estimating both assets and debts of between $1
million and $10 million. John D. Moore, P.A., represents the
Debtor.
SELECT MEDICAL: Moody's Lifts CFR/PDR to 'B1'; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family and
Probability of Default Ratings of Select Medical Holdings
Corporation to B1 from B2. Moody's also assigned a B3 (LGD 5, 80%)
rating to the proposed offering of $365 million of senior
unsecured notes by Select Medical Corporation, a wholly owned
subsidiary of Select Medical Holdings Corporation (collectively
Select Medical). As detailed below, Moody's also upgraded the
ratings on the company's existing senior secured credit
facilities, senior floating rate notes and senior subordinated
notes, which are expected to be repaid with the proceeds of the
proposed offering. Moody's will withdraw the rating on the senior
subordinated notes upon completion of the proposed transaction.
The outlook for the ratings is stable.
"While regulatory risk remains, Select Medical's lower leverage
and healthy cash flow should see the company through near term
uncertainty without risk to the higher B1 Corporate Family
Rating," said Dean Diaz, a Moody's Senior Credit Officer. "Further
improvement in the company's maturity profile through the current
bond offering also supports the upgrade," said
Mr. Diaz.
Following is a summary of Moody's rating actions.
Ratings assigned:
Select Medical Corporation
Senior unsecured notes due 2020, B3 (LGD 5, 80%)
Ratings upgraded:
Select Medical Corporation
Senior secured revolving credit facility expiring 2016, to Ba2
(LGD 2, 28%) from Ba3 (LGD 3, 30%)
Senior secured term loan due 2018, to Ba2 (LGD 2, 28%) from Ba3
(LGD 3, 30%)
7.625% senior subordinated notes due 2015, to B3 (LGD 5, 80%)
from Caa1 (LGD 5, 81%) (to be withdrawn following the close of
the contemplated transaction)
Select Medical Holdings Corporation
Senior floating rate notes due 2015, to B3 (LGD 6, 94%) from
Caa1 (LGD 6, 95%)
Corporate Family Rating, to B1 from B2
Probability of Default Rating, to B1 from B2
Ratings affirmed:
Select Medical Holdings Corporation
Speculative Grade Liquidity Rating, SGL-2
Ratings Rationale
Select Medical's B1 Corporate Family Rating reflects Moody's
expectation that the company will continue to generate strong free
cash flow that can be used to repay debt and invest in growth
opportunities. The rating also reflects Moody's consideration of
Select Medical's considerable scale and position as one of the
largest LTCH and outpatient rehabilitation providers in the US.
However, Moody's continues to believe that the company's reliance
on the specialty hospital segment for the majority of its EBITDA
presents risk given the concentration of revenue from Medicare in
these operations.
The stable outlook reflects Moody's expectation that the company
can continue to reduce leverage through debt repayment with
available cash flow and EBITDA growth. Additionally, Moody's
believes the company's stronger balance sheet, in terms of lower
leverage and improved maturity profile, provides flexibility given
the still unsettled regulatory environment for LTCHs. The outlook
also reflects Moody's expectation that the company will remain
disciplined with respect to the use of additional leverage for
acquisitions or shareholder initiatives until the LTCH sector sees
longer term stability.
Moody's could upgrade the rating if the company is expected to
maintain leverage below 4.0 times either through additional debt
repayment or EBITDA growth. Moody's would also have to be
comfortable that the current operations could absorb potential
negative regulatory developments at the higher rating level or see
evidence that the regulatory environment was becoming more benign.
The considerable reduction in leverage over the last two years and
the improvement in the maturity profile of the company mitigates
the likelihood of a rating downgrade in the near term. Moody's
could downgrade the rating if adverse developments in Medicare
reimbursement result in significant margin deterioration or cash
flow coverage metrics or if the company completes a material debt
financed acquisition or shareholder initiative. More specifically,
Moody's could downgrade the rating if leverage is expected to rise
and be sustained above 5.0 times.
For further details, refer to Moody's Credit Opinion for Select
Medical Holdings Corporation on moodys.com.
The principal methodology used in rating Select Medical 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.
Select Medical, headquartered in Mechanicsburg, PA, provides long-
term acute care hospital (LTAC) services and inpatient acute
rehabilitative care through its specialty hospital segment. The
company also provides physical, occupational, and speech
rehabilitation services through its outpatient rehabilitation
segment. Select Medical recognized approximately $2.9 billion in
revenue, before considering the provision for bad debt, in the 12
months ended March 31, 2012.
SHOREBANK CORP: J.H. Cohn Okayed as Committee's Advisor
-------------------------------------------------------
The Bankruptcy Court authorized the Official Committee of
Unsecured Creditors in the bankruptcy case of The Shorebank
Corporation, et al., to retain J.H. Cohn LLP as its financial
advisor, nunc pro tunc to March 23, 2012.
JHC will be entitled to compensation and reimbursement of expenses
in accordance with the procedures set forth in Sections 330 and
331 of the Bankruptcy Code, the applicable Federal Rules of
Bankruptcy Procedures, and other provisions.
The firm will charge the Debtor's estates on an hourly basis in
accordance with its customary rates, subject to a 10% reduction:
Professional Position Hourly Rate
------------ -------- -----------
Clifford A. Zucker Partner $670
Adam Hanover Director $550
Roberta Probber Manager $490
Rosellen Martoken Staff $275
Maria Valle Paraprofessional $180
About ShoreBank
Organized in 1973 and incorporated under the state of Illinois,
The ShoreBank Corporation was America's first and leading
community development and environmental bank holding company. SBK
was a registered bank holding company for, among others, its
subsidiary, ShoreBank in Chicago, a state chartered non-member
bank. The Bank was subject to oversight and regulation by its
primary regulator, the Illinois Department of Financial and
Professional Regulation.
On Aug. 20, 2010, the Bank was closed by the IDFPR, and the
Federal Deposit Insurance Corp. was named receiver. The FDIC sold
substantially all of the Bank's assets to Urban Partnership Bank.
SBK's principal asset and source of income was its investment in
the Bank. The Bank Closure has had a significant adverse affect
on SBK's liquidity, capital resources, and financial condition.
On Jan. 9, 2012, SBK and 11 affiliates commenced Chapter 11 cases
(Bankr. N.D. Ill. Lead Case No. 12-00581) to liquidate their
remaining assets and wind down their estates.
The case was initially assigned to Judge Jacqueline P. Cox. On
Jan. 10, she recused herself and the case was sent to Judge A.
Benjamin Goldgar's chambers.
George Panagakis, Esq., leads a team of lawyers at Skadden, Arps,
Slate, Meagher & Flom LLP, who represent the Debtors. Garden City
Group Inc. serves as the Debtors' claims agent. The petition was
signed by George P. Surgeon, president and CEO.
The Debtor filed an Amended Disclosure Statement dated April 10,
2012, and on April 12, obtained approval of the document and
permission to begin soliciting votes on the Plan.
The confirmation hearing is scheduled for June 13, 2012, at 10:30
a.m. Objections are due May 30.
SNOKIST GROWERS: Truitt Brothers Drops From Bidding
---------------------------------------------------
Dan Wheat at Capital Press reports that a U.S. bankruptcy court
judge was scheduled to consider final bids on May 7, 2012, for
purchase of Snokist Growers of Yakima.
The report notes Truitt Brothers Inc. of Salem, Ore., is out of
the game. "We were ultimately unsuccessful in getting our
financing. We're no longer a qualified bidder," the report quotes
Peter Truitt, president of Truitt Brothers, as saying.
According to the report, Del Monte Foods of San Francisco is the
apparent main bidder with other companies bidding for parts of
Snokist assets including vehicles and fruit bins.
The report notes Truitt Brothers, a fruit and vegetable processor,
initially bid $42.25 million for Snokist in March. Judge Frank
Kurtz extended the bidding process after listening to arguments
and testimony of competing bids from Truitt and Del Monte.
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., 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.
STERLING SHOES: Discloses Late Filing of Annual Financials
----------------------------------------------------------
Sterling Shoes Inc. disclosed that the filing of its annual
financial statements, management's discussion and analysis and
related officer certifications for the financial year ended on
Dec. 31, 2011 will be delayed beyond the filing deadline of
April 30, 2012. On Oct. 21, 2011, the Company received protection
under an initial order (the "Order") granted pursuant to the
Companies' Creditors Arrangement Act (Canada). As a result of the
Company's ongoing review process while under CCAA protection,
there is a high degree of measurement uncertainty with respect to
the appropriate carrying value of certain of the Company's assets
on its balance sheet and as a result the Company is unable to
prepare its Annual Filings.
The Company intends to file with securities regulatory authorities
throughout the period in which it is in default, the same
information it provides to its creditors when the information is
provided to the creditors and in the same manner as it would file
a material change report. While under CCAA protection, the
Company's board of directors maintains its usual role and its
management remains responsible for Company's day-to-day
operations, under the supervision of the Court-appointed monitor.
Currently, the stay period under the Order will end on June 30,
2012 but may be extended upon further order of the British
Columbia Supreme Court. The Company also intends to satisfy the
provisions of the alternate information guidelines of National
Policy 12-203 - Cease Trade Orders for Continuous Disclosure
Defaults ("NP 12- 203") as long as it is in default of the filing
requirements. This news release constitutes a "default
announcement" made under pursuant to NP 12-203. Any recovery for
creditors and other stakeholders, including shareholders, is
uncertain and is highly dependent upon a number of factors,
including the outcome of the Company proceedings under the CCAA.
Sterling Shoes is headquartered in Vancouver, B.C. and is a
leading independent footwear retailer offering a broad selection
of private label and brand name shoes and accessories. Founded in
1987, Sterling Shoes LP operates over 100 stores across Canada.
TELKONET INC: Names Richard Mushrush as CFO, Matthew Koch as COO
----------------------------------------------------------------
Telkonet, Inc., appointed Richard E. Mushrush to the position of
Chief Financial Officer of the Company and appointed Matthew P.
Koch to the position of Chief Operating Officer of the Company.
Mr. Koch is the successor in the position to Jeffrey J. Sobieski,
who was appointed to the position of Chief Technology Officer of
the Company.
Mr. Mushrush, 43, served as Acting Chief Financial Officer of the
Company from November 2010 to April 2012 and as the Company's
Controller from January 2009 to 2010. Prior to joining the
Company, Mr. Mushrush was Controller and Business Unit Manager for
a division of Illinois Tool Works from 2004 to 2009.
Mr. Koch, 34, served as Vice President of Operations of the
Company from December 2007 to April 2012, as Director of
Engineering for EthoStream, LLC, the Company's wholly-owned
subsidiary from April 2007 to December 2007, as lead engineer for
Ethostream from March 2004 to April 2007. Prior to joining the
Company, Mr. Koch was a system administrator for Geneva OnLine
from 2001 to 2004 and from 1998 to 2000.
In connection with their appointments, Mr. Mushrush and Mr. Koch
each entered into an employment agreement with the Company for a
term commencing as of May 1, 2012, and expiring as of May 1, 2013.
Under these employment agreements, Mr. Mushrush and Mr. Koch will
receive a base salary of $110,000 per year and $130,000 per year,
respectively, and bonuses and benefits based on the Company's
internal policies and on participation in the Company's incentive
and benefits plans. The term of each of their employment
agreements will automatically renew for an additional 12 months
unless the parties mutually agree or unless the agreement is
terminated.
In addition, on May 1, 2012, the Company entered into an
employment agreement with each of Jason L. Tienor and Jeffrey J.
Sobieski for a term commencing as of May 1, 2012, and expiring as
of May 1, 2014. The terms of each of these employment agreements
will automatically renew for an additional 24 months unless the
parties mutually agree or unless the agreement is terminated.
Pursuant to their respective employment agreements, Mr. Tienor and
Mr. Sobieski will receive a base salary of $200,000 and $190,000,
respectively, and bonuses and benefits based on the Company's
internal policies and on participation in the Company's incentive
and benefit plans.
Effective May 1, 2012, the Company appointed Mr. Sobieski, 36, to
the position of Chief Technology Officer of the Company. Mr.
Sobieski served as Chief Operating Officer of the Company from
June 2008 to April 2012, as the Company's Executive Vice
President, Energy Management, from December 2007 to June 2008 and
as Chief Information Officer of EthoStream until December 2007.
Mr. Tienor and Mr. Sobieski each previously executed an employment
agreement with the Company dated April 11, 2011, and,
notwithstanding the expiration of those agreements, they continued
to be employed and to perform services pursuant to the terms of
those agreements pending completing of replacement agreements.
On May 1, 2012, the Company entered into an employment agreement
with Gerrit J. Reinders for a term commencing as of May 1, 2012,
and expiring as of May 1, 2013. The term of his employment
agreement will automatically renew for an additional 12 months
unless the parties mutually agree or unless the agreement is
terminated. Pursuant to his employment agreement, Mr. Reinders
will receive a base salary of $150,000, and bonuses and benefits
based on the Company's internal policies and on participation in
the Company's incentive and benefit plans.
About Telkonet
Milwaukee, Wisconsin-based Telkonet, Inc., is a clean technology
company that develops and manufactures proprietary energy
efficiency and smart grid networking technology.
The Company reported a net loss of $1.90 million in 2011,
compared with a net loss of $2.17 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$13.19 million in total assets, $4.58 million in total
liabilities, $2.36 million in total redeemable preferred stock,
and $6.24 million in total stockholders' equity.
Following the 2011 results, Baker Tilly Virchow Krause, LLP, in
Milwaukee, Wisconsin, noted that the Company continues to incur
significant operating losses, has an accumulated deficit of
$118.34 million and has a working capital deficiency of $775,000
that raise substantial doubt about the Company's ability to
continue as a going concern.
THELEN LLP: Seyfarth Challenges Bankruptcy Trustee's Lawsuit
------------------------------------------------------------
Max Stendahl, writing for Law360.com, reports that Seyfarth Shaw
LLP on Friday blasted a suit brought by Thelen LLP's bankruptcy
trustee seeking to recoup fees from partners who joined Seyfarth,
saying an adverse ruling would make attorneys of dissolving firms
"toxic" to the legal marketplace. Trustee Yann Geron filed nearly
100 adversary complaints Sept. 15 against former Thelen partners.
The report notes when Thelen's remaining partners voted to
dissolve the firm, they added language to its partnership plan
waiving its right to any unfinished business.
About Thelen LLP
Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner
-- http://thelen.com/-- is a bicoastal American law firm in
process of dissolution. It was formed as a product between two
mergers between California and New York-based law firms, mostly
recently in 2006. Its headcount peaked at roughly 600 attorneys
in 2006, and had 500 early in 2008, with offices in eight cities
in the United States, England and China.
In October 2008, Thelen's remaining partners voted to dissolve the
firm. As reported by the Troubled Company Reporter on Sept. 22,
2009, Thelen LLP filed for Chapter 7 protection. The filing was
expected due to the timing of a writ of attachment filed by one of
Thelen's landlords, entitling the landlord to $25 million of the
Company's assets. The landlord won approval for that writ in June
2009, but Thelen could void the writ by filing for bankruptcy
within 90 days of that court ruling. Thelen, according to AM Law
Daily, has repaid most of its debt to its lending banks.
THOMPSON CREEK: Moody's Cuts CFR to 'Caa1'; Outlook Stable
----------------------------------------------------------
Moody's Investors Service downgraded Thompson Creek Metals Company
Inc.'s Corporate Family Rating (CFR) and probability of default
rating to Caa1 from B3, assigned a Caa2 rating to proposed new
$200 million senior unsecured notes due 2019, and affirmed Caa2
ratings on the existing senior unsecured debt as well as the
(P)Caa2 rating for unsecured debt issued under the company's shelf
registrations. A Caa2 rating was also assigned to the debt
component of the tangible common equity units (tMEDs) proposed by
the company. The total issuance of tMEDs is expected to be $200
million, of which senior unsecured amortizing notes will account
for approximately $30 to $40 million, while a three year prepaid
stock purchase contract (unrated) will account for the rest. The
$200 million notes and the tMeds were issued under the company's
shelf registrations, rated (P)Caa2 for senior unsecured debt. In
addition, Moody's affirmed the company's Speculative Grade
Liquidity rating of SGL-4. The outlook is stable.
Downgrades:
Issuer: Thompson Creek Metals Company Inc.
Probability of Default Rating, Downgraded to Caa1 from B3
Corporate Family Rating, Downgraded to Caa1 from B3
Upgrades:
Issuer: Thompson Creek Metals Company Inc.
Senior Unsecured Regular Bond/Debenture, Upgraded to LGD5,
73% from LGD5, 79%
Assignments:
Issuer: Thompson Creek Metals Company Inc.
Senior Unsecured Regular Bond/Debenture, Assigned Caa2, 73 -
LGD5
Senior Unsecured Regular Bond/Debenture, Assigned Caa2, 73 -
LGD5
Outlook Actions:
Issuer: Thompson Creek Metals Company Inc.
Outlook, Changed To Stable From Negative
Ratings Rationale
The company's announcement of a $400 million capital raise of
senior unsecured notes and tangible common equity units, as well a
credit facility amendment to allow additional headroom under
covenants, will allow for short-term relief from some of the
liquidity pressures the company was facing. However, over the
intermediate term, the ratings reflect Moody's expectation that
the company's leverage, excluding the equity component of tMEDs,
will be in 7x - 10x range in 2012, and in 4x -- 7x range by the
end of 2013, depending when Mt Milligan production comes on line
(currently scheduled for fourth quarter 2013). The ratings also
reflect a possibility that minimum liquidity condition in the
company's credit facility will limit revolver availability in the
second half of 2013, potentially requiring the company to raise
additional funds should Mt Milligan's capital costs increase more
than expected or the production start date is delayed.
The speculative grade liquidity rating of SGL-4 reflects Moody's
expectation of negative free cash generation over the next 12 to
18 months, as well as potential restrictions on availability under
the company's secured revolver. The company's current liquidity
position includes almost $163 million in cash and approximately
$200 million of availability under their revolver, after
accounting for the $75 million minimum liquidity requirement, as
well as approximately $172 million in payments expected to be
received from Royal Gold in connection with the gold stream sale
late in 2011. However, negative free cash flow due to high
development costs will erode the liquidity position going forward,
while the revolver's minimum liquidity restrictions may limit
availability. That said, Moody's expects that the amended credit
facility covenants will allow for sufficient headroom through the
end of 2013.
Thompson Creek's Caa1 CFR reflects its concentration in
molybdenum, relatively small size, heavy reliance currently on two
mines, and the need for favorable volume and price trends in order
to meet its increasingly aggressive capital expenditure
requirements over the next several years. The rating anticipates
meaningful negative free cash flow (operating cash flow minus
dividends and capital expenditures), and tight liquidity. The
ratings also reflect the anticipated decrease in production
volumes at the Thompson Creek mine in 2012, as compared to 2011
levels, due to waste removal activities there, although this will
be somewhat offset by the increased production at Endako following
the completion of its mine expansion.
The rating is supported by the long operating history of Thompson
Creek's mines and its Langeloth metallurgical facility, as well as
the company's low political risk profile given the location of its
operations in the U.S. and Canada. Further favorable factors in
the rating include the fact that a significant portion of the
company's production is on a contract basis ensuring minimum
offtakes, as well as good relationships with its customer base.
The Caa2 rating on the senior unsecured notes reflects their lower
rank in the capital structure behind the $300 million secured
revolver and up to $132 million in secured equipment financing to
fund the mobile fleet needed at the Mt. Milligan project. The one
notch differential between the senior unsecured rating and the CFR
(as opposed to two notches prior to the new issuance) reflects the
larger amount of senior unsecured debt in the capital structure
following the new issuance.
The stable outlook reflects Moody's expectation that market
conditions and prices for molybdenum over the next twelve to
eighteen months will remain stable and that the company will not
face any further significant increases in capital expenditures at
Mt. Milligan.
Upward rating pressure is limited at this time due to the heavy
debt burden and the significant capital expenditures required over
the next several years. That said, an upgrade will be considered
if Debt/EBITDA is expected to be sustained at less than 5x and
there are no significant liquidity concerns.
The ratings could be lowered further if the company is unable to
control the development costs for Mt. Milligan or if its liquidity
position continues to erode. In addition, the ratings could be
lowered if Debt/EBITDA is expected to exceed 6x beyond 2012.
The principal methodology used in rating Thompson Creek Metals
Company Inc. was the Global Mining Industry Methodology published
in May 2009. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Thompson Creek Metals Company Inc., one of the world's largest
producers of molybdenum, operates through two open pit mines and
two processing centers. The company owns 100% of the Thompson
Creek open-pit mine in Idaho, 100% of the Langeloth processing
facility in Pennsylvania, and 75% of the Endako mine,
concentrator, and roaster in British Columbia. It is currently in
the process of constructing the Mount Milligan copper-gold mine in
northern British Columbia, whose operations are expected to
commence in 2013. In 2011, Thompson Creek produced 28.3 million
pounds of molybdenum and generated approximately $669 million of
revenues.
TRANS-LUX CORP: Board Adopts Amended and Restated Bylaws
--------------------------------------------------------
The Board of Directors adopted the Amended and Restated Bylaws of
Trans-Lux Corporation effective May 3, 2012. The bylaws have been
amended to:
(i) clarify that the chairperson of any shareholders meeting
will also have the power to adjourn that meeting, as well
as a majority of the voting power of the stockholders
present in person or by proxy;
(ii) clarify that all matters decided at a shareholders
meeting, other than elections of directors, will be
determined by a majority of votes cast affirmatively or
negatively, except as otherwise required by law or the
rules of any stock exchange upon which the Corporation's
securities are listed; and
(iii) delete Section 13 relating to the Corporation's
Independent Public Auditors.
A copy of the Amended Bylaws is available for free at:
http://is.gd/2VH9OC
About Trans-Lux Corporation
Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a
designer and manufacturer of digital signage display solutions for
the financial, sports and entertainment, gaming and leasing
markets.
The Company reported a net loss of $1.42 million in 2011, compared
with a net loss of $7.03 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $27.45
million in total assets, $23.60 million in total liabilities,
$6.13 million in redeemable convertible preferred stock, and a
$2.28 million total stockholders' deficit.
TRIMAS CORP: S&P Raises Corporate Credit Rating to 'BB-'
--------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on TriMas
Corp., including the corporate credit rating to 'BB-' from 'B+'.
The outlook is stable. "The upgrade reflects TriMas' continued
good operating performance and credit measures," said Standard &
Poor's credit analyst John Sico.
"While economic prospects are increasingly mixed, we believe
TriMas' cash balance and current credit measures provide it some
cushion to absorb an economic downturn, even with future covenant
step-downs, at the higher rating," he added.
At the same time, Standard & Poor's raised its issue ratings on
TriMas' senior secured credit facilities and second-lien notes.
The recovery ratings on the debt remain unchanged.
"In Standard & Poor's assessment, TriMas has a 'fair' business
risk profile and an 'aggressive' financial risk profile. The
company has maintained good credit ratios due to steady free cash
flow generation and continued focus on debt reduction. TriMas'
operating performance should continue to benefit from moderate
demand in the company's global industrial markets in 2012 and
further improvement in productivity and efficiency," S&P said.
"TriMas' products include towing systems and trailer components,
packaging systems, aerospace fastening systems, and engineered
components products. The company serves certain commercial,
industrial, and consumer application markets," S&P said.
VOLKSWAGEN-SPRINGFIELD: Virginia Dealership Files for Chapter 11
----------------------------------------------------------------
Springfield, Virginia-based Volkswagen-Springfield, Inc., filed a
Chapter 11 petition (Banrk. E.D. Va. Case No. 12-12905) in
Alexandria on May 7, 2012.
The Debtor operates one of the largest Volkswagen franchised
dealerships in the Mid-Atlantic region. From 1993-1997 it was
recognized as one of the top two Volkswagen dealerships in the
nation based upon sales and customer care. The dealership is
operated from two buildings located on Backlick Road in
Springfield, Virginia; a 50,000 square foot facility for the sale
of new vehicles, and a 20,000 square foot facility for the sale of
used vehicles. The Debtor owns the improvements on this site
(subject to mortgage) and leases the site from an affiliate of
Volkswagen of America, Inc.
Annual revenues for 2011 were $40.8 million based upon sales of
almost 1,600 new and used vehicles. In the first quarter of 2012,
revenues were approximately $12.1 million. The Debtor has 103
employees.
The Debtor estimated assets and debts of $10 million to $50
million as of the Chapter 11 filing.
On the Petition Date, the Debtor filed emergency motions to use
cash collateral, pay prepetition wages and salaries, and pay
prepetition sales and use taxes. It said that the relief
requested in the first day motions is critical to maintaining the
Debtor's ongoing operations and the value of the bankruptcy
estate.
The Debtor is represented by Dylan G. Trache, Esq., and John T.
Farnum, Esq., at Wiley Rein LLP, in McLean, Virginia.
According to a court filing, the move to a newly built facility in
late 2004 -- when the Debtor gave up its Subaru franchise --
increased fixed operating expenses. In addition, beginning in
2006, the Debtor suffered a decline in business that carried
through 2009, which required the Debtor to incur significant
indebtedness to Branch Banking and Trust Company.
Pursuant to recent default notices, BB&T has asserted that it is
owed $19.6 million. The Debtor believes that the value of its
assets is greater than the amount owed to BB&T and seeks to use
the Chapter 11 process to restructure its obligations to BB&T, VW
as well as its other unsecured creditors.
* 9th Cir. Judge Browning Pass Away
-----------------------------------
Judge James R. Browning, a member of the U.S. Court of Appeals for
the Ninth Circuit for more than 50 years, died at age 93 on May 5.
He served as his court's chief judge for 12 years, and was Clerk
of the U.S. Supreme Court before his judicial appointment.
"While we are always saddened by the loss of a valued colleague,
the passing of John Browning truly marks the end of an era for the
Ninth Circuit," said Chief Judge Alex Kozinski. "His name became
synonymous with that of the Ninth Circuit and he is rightfully the
eponym for our historic headquarters building in San Francisco."
Judge Browning was born in Great Falls, Montana, on Oct. 1, 1918.
He received his law degree from the University of Montana School
of Law in 1941. Chief Justice Earl Warren appointed Judge
Browning to serve as clerk of the Supreme Court in 1958, and three
years later was appointed by President John F. Kennedy to the
appeals court.
Judge Browning served as an active judge for nearly 40 years
before taking senior status in 2000, and continued to hear cases
for many years thereafter.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Oct. 14, 2011
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Tampa Convention Center, Tampa, Fla.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Oct. __, 2011
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
Dublin, Ireland
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Oct. 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Nov. 28, 2011
BEARD GROUP, INC.
18th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York City
Contact: 1-240-629-3300
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
April 3-5, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Grand Hyatt Atlanta, Atlanta, Ga.
Contact: http://www.turnaround.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
November 1-3, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Westin Copley Place, Boston, Mass.
Contact: http://www.turnaround.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800 ;
http://www.abiworld.org/
April 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
October 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
Last Updated: Sept. 17, 2011
*********
Monday's edition of the TCR delivers a list of indicative prices
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Each Tuesday edition of the TCR contains a list of companies with
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A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
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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
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Copyright 2012. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***