/raid1/www/Hosts/bankrupt/TCR_Public/120521.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, May 21, 2012, Vol. 16, No. 140
Headlines
1555 WABASH: Can Continue Use of Cash Collateral to June 30
38 STUDIOS: Seeks Rhode Island Aid to Stay Solvent
AE BIOFUELS: Unit Sells Land for $1.1 Million to Repay Debt
AEOLUS PHARMACEUTICALS: Registers 88.7 Million Common Shares
ALABAMA TRUST: Closed; Southern States Bank Assumes Deposits
ALASKA COMMS: Bank Debt Trades at 10% Off in Secondary Market
AMARU INC: Incurs $156,000 Net Loss in First Quarter
AMERICA WEST: Delays Form 10-Q for First Quarter
AMERICAN DEFENSE: Incurs $395,000 Net Loss in First Quarter
AMERICAN NATURAL: Incurs $1.2 Million Net Loss in First Quarter
AMERICAN PATRIOT: Reports $21,600 Net Income in First Quarter
ANGEL MARTINEZ: 1st. Cir. BAP Affirms Case Dismissal
APOLLO MEDICAL: Incurs $720,000 Net Loss in Fiscal 2012
APPLIED DNA: Incurs $1.5 Million Net Loss in March 31 Quarter
ARCAPITA BANK: Wants to Make $30MM Loan to Golf Course Unit
ARCAPITA BANK: Court Denies Commerzbank's Bid to Deliver Notice
ARCAPITA BANK: May 30 Final Hearing on Alvarez & Marsal Employment
ARKANOVA ENERGY: Delays Form 10-Q for First Quarter
ARTHUR NADEL: Receiver Okayed for Initial Distributions
AXESSTEL INC: Swings to $472,000 Net Income in First Quarter
BERNARD L. MADOFF: Trustee Claws Back $29MM in Trotanoy Deal
BIOVEST INTERNATIONAL: Incurs $5.9-Mil. Net Loss in March 31 Qtr.
BIOZONE PHARMACEUTICALS: Delays Form 10-Q for First Quarter
BOYD GAMING: Peninsula Acquisition No Impact on Moody's 'B2' CFR
BROWNIE'S MARINE: Delays Form 10-Q for First Quarter
BUFFETS RESTAURANTS: Seeks to Retain Exclusive Chapter 11 Control
CAGLE'S INC: Koch Unit Seeks to Close Purchase This Summer
CALYPTE BIOMEDICAL: Incurs $290,000 Net Loss in First Quarter
CAMBRIDGE HEART: Incurs $1.8 Million Net Loss in First Quarter
CARROLS RESTAURANT: Moody's Assigns 'B3' CFR & Sr. Notes Rating
CATASYS INC: Incurs $3.4 Million Net Loss in First Quarter
CDC CORP: Equity Panel Balks at China.com's Amended Plan Outline
CF2 LLC: Case Summary & 3 Largest Unsecured Creditors
CGO ENTERPRISE: Watchdog Seeks Dismissal of Pot Grower's Case
CHAI-NA-TA CORP: Shareholders Approve Voluntary Liquidation
CHINA DU KANG: Reports $365,000 Net Income in First Quarter
CHINA GREEN: Delays Form 10-Q for First Quarter
CHINA TEL GROUP: Has $7 Million Financing Contract with ZTE
CICERO INC: Delays Form 10-Q for First Quarter
CIRCUS AND ELDORADO: Silver Legacy Resort Casino in Bankruptcy
COMMONWEALTH BIOTECH: Incurs $110,000 Net Loss in 1st Quarter
COMMUNICATION INTELLIGENCE: Incurs $819,000 in First Quarter
COMMUNITY SHORES: Incurs $64,000 Net Loss in First Quarter
COMPETITIVE TECHNOLOGIES: Delays Form 10-Q for First Quarter
COMSTOCK MINING: Incurs $7.3 Million Net Loss in 1st Quarter
CONCREATE USL: Bridge to Resume Work Under New Contractor
CONTRACT RESEARCH: Judge Approves Sale to Creditors
CORD BLOOD: CEO Resigns; Form 10-Q for Q1 Delayed
COUGAR OIL: Secured Lender Stymies CCAA Case
CREATIVE VISTAS: Incurs $72,700 Comprehensive Loss in Q1
CUSTOM AUTO: Case Summary & 20 Largest Unsecured Creditors
CYCLONE POWER: Delays Form 10-Q for First Quarter
DECISION INSIGHT: Credit Amendment No Impact on Moody's 'B2' CFR
DECOR PRODUCTS: Delays Form 10-Q for First Quarter
DEEP DOWN: Incurs $300,000 Net Loss in First Quarter
DEX MEDIA EAST: Bank Debt Trades at 46% Off in Secondary Market
DIALOGIC INC: Incurs $14.7 Million Net Loss in First Quarter
DIPPIN' DOTS: Fischer Enterprises Completes Acquisition
DRINKS AMERICAS: Douglas Cole Elected to Board of Directors
DUTCH GOLD: Delays Form 10-Q for First Quarter
EMPIRE RESORTS: Incurs $118,000 Net Loss in First Quarter
ENERGY CONVERSION: Fires Two Top Executives
FENTURA FINANCIAL: Delays Q1 Form 10-Q Due to Management Changes
FLORIDA GAMING: Incurs $3.8 Million Net Loss in 1st Quarter
FONAR CORP: Reports $1.5 Million Net Income in March 31 Quarter
FRONTIER COMMUNICATIONS: Fitch Rates New $500MM Sr. Notes 'BB+'
FRONTIER COMMUNICATIONS: Moody's Rates $500MM Note Issuance 'Ba2'
FUSION TELECOMMUNICATIONS: Incurs $786,000 Net Loss in Q1
GALP CNA: Case Dismissed; Wentwood Roundhill Case Continues
GENERAL MOTORS: Judge Dismisses OnStar Analog MDL Claims
GRANDSUN REALTY: Case Summary & 5 Largest Unsecured Creditors
GREENMAN TECHNOLOGIES: Incurs $1.1-Mil. Loss in March 31 Quarter
GREENSHIFT CORP: Incurs $697,000 Net Loss in First Quarter
HAMPTON ROADS: Fitch Upgrades Rating on $9-Mil. Notes to 'BB'
HAWKER BEECHCRAFT: Proposes Bankruptcy Advisors
HEARTLAND MEMORIAL: Bankr. Ct. to Hear Motion in Suit v. DLA Piper
HOSTESS BRANDS: Seeks to Pay Board Members Amid Sale Process
IMH FINANCIAL: Incurs $7.8 Million Net Loss in First Quarter
LA JOLLA: Delays Form 10-Q for First Quarter
LAGRAVE RECONSTRUCTION: Files Schedules of Assets and Liabilities
LIFECARE HOLDINGS: Incurs $4.6 Million Net Loss in 1st Quarter
LIGHTSQUARED INC: Wins Approval of First Day Motions
LIQUIDMETAL TECHNOLOGIES: Incurs $1.1 Million Net Loss in Q1
LOS ANGELES COLISEUM: Faces Insolvency as Cash Dries Up
LOS ANGELES DODGERS: Confirmed Plan Declared Effective on April 30
MARIANA RETIREMENT FUND: Files Schedules of Assets and Debts
MARIANA RETIREMENT FUND: Committee Wants Chapter 11 Case Dismissed
MASTER SILICON: Delays Form 10-Q for First Quarter
MEMC ELECTRONIC: Moody's Reviews 'B2' CFR/PDR for Downgrade
MERITAGE HOMES: Fitch Affirms 'B+' Issuer Default Rating
MPM TECHNOLOGIES: Delays Form 10-Q for First Quarter
NATIONAL HOLDINGS: Incurs $1.7MM Net Loss in March 31 Quarter
NCOAT INC: Amended Joint Plan of Reorganization Confirmed
NEBRASKA BOOK: EBITDA at $39 Million for Fiscal 2012
NEDAK ETHANOL: Incurs $3.6 Million Net Loss in First Quarter
NEOMEDIA TECHNOLOGIES: Incurs $165.5MM Net Loss in 1st Quarter
NEONODE INC: Incurs $1.6 Million Net Loss in First Quarter
NEONODE INC: Two Directors Elected at Annual Meeting
NET TALK.COM: Incurs $3.5-Mil. Net Loss in March 31 Quarter
NORD RESOURCES: Incurs $2.5 Million Net Loss in First Quarter
NYTEX ENERGY: Incurs $6.5 Million Net Loss in First Quarter
ONE PELICAN HILL: Villa del Lago Mansion Sold for $18.5 Million
PATIENT SAFETY: Incurs $1.3 Million Net Loss in First Quarter
PENINSULA GAMING: Boyd Acquistion No Impact on Moody's 'B2' CFR
PMI GROUP: Wants to Sell Certificate to Safeco for $1.5 Million
REAL ESTATE ASSOCIATES: No Investment in Yorkview & Mt. Union
REDDY ICE: Expects to Emerge From Bankruptcy in Late May
ROOMSTORE INC: Will Have Consumer Privacy Ombudsman
SAVOY GROUP: Case Summary & 13 Largest Unsecured Creditors
SEARCHMEDIA HOLDINGS: Incurs $13.4 Million Net Loss in 2011
SECUREALERT INC: Incurs $2.5-Mil. Net Loss in March 31 Quarter
SFW ENTERPRISES: Buyer Not Entitled to Damages Against Landlord
SHENGDATECH INC: Submits Chapter 11 Plan of Reorganization
SHENANDOAH LIFE: Exits Receivership After $60MM Funding
SOUTHBRIDGE MALL: Continues Operation Amid Receivership
SPANISH BROADCASTING: Incurs $3.6 Million Net Loss in Q1
SPORTS AUTHORITY: Moody's Affirms Ratings, Revises Outlook to Neg
STANADYNE HOLDINGS: Incurs $1.1 Million Net Loss in First Quarter
STOCKTON, CA: Expects to Reach Deal to Avoid Bankruptcy
SUNRISE REAL ESTATE: Delays Form 10-Q for First Quarter
T3 MOTION: Incurs $1.5 Million Net Loss in First Quarter
THERMOENERGY CORP: Delays Form 10-Q for First Quarter
TOUSA INC: Cash Collateral Hearing Rescheduled to June 5
TRAILER PARK ACQUISITION: 6-Acre Lot Worth $1.87 Million
TRONOX INC: Accuses Ex-Kerr-McGee General Counsel of Fraud
TTC PLAZA: Vargo's Restaurant Ceases Business Operations
TRANS ENERGY: Incurs $1.5 Million Net Loss in First Quarter
TRANS-LUX CORP: Delays Form 10-Q for First Quarter
TWIN CITY HOSPITAL: Chapter 7 Trustee's Suit Goes to State Court
UNIVERSAL BIOENERGY: Delays Form 10-Q for First Quarter
USA SPRINGS: Can Pursue Either Bankruptcy Financing or Sale
VERTICAL COMPUTER: Incurs $337,000 Net Loss in First Quarter
WASTEQUIP LLC: Moody's Assigns 'B2' Corp. Family Rating
WESTERLY HOSPITAL: Lawrence & Memorial Pursues Hospital
WORLDSPACE INC: Seeks to Convert Ch. 11 Case to Liquidation
WYLE SERVICES: Moody's Upgrades CFR/PDR to 'B2'; Outlook Stable
Z TRIM HOLDINGS: Incurs $5 Million Net Loss in First Quarter
ZOGENIX INC: Incurs $10.3 Million Net Loss in First Quarter
* Moody's Says Liquidity Key Consideration in US REIT Ratings
* Keating Muething Names Rachael Rowe as Executive Partner
* BOND PRICING -- For Week From May 7 to 11, 2012
*********
1555 WABASH: Can Continue Use of Cash Collateral to June 30
-----------------------------------------------------------
The Bankruptcy Court extended 1555 Wabash LLC's authority to use
of cash collateral of AMT CADC Venture LLC and Weyerhauser Realty
Investors to June 30, 2012, as set forth in a budget, plus no more
than 10% of the total proposed expenses.
In return for the Debtor's interim use of cash collateral and as
adequate protection to the lenders, the Debtor will:
1. permit the Lenders to inspect, upon reasonable notice,
within reasonable hours, the Debtor's books and records;
2. maintain and pay premiums for insurance to cover all of
its assets from fire, theft and water damage;
3. maintain sufficient cash reserves for the payment of
postpetition real estate taxes when the real estate taxes
become due and payable;
4. make available to the Lenders evidence of the Lenders'
collateral or proceeds; and
5. properly maintain the Property in good repair and properly
manage the property.
The Senior Lender also will be granted a priority claim and valid,
perfected, enforceable security interests in and to the Debtor's
post-petition assets.
A full text copy of the cash collateral order and budget is
available for free at:
http://bankrupt.com/misc/1555WABASH_cashcollorder.pdf
The final hearing on the motion is set for June 26, 2012, at
10:00 a.m.
As reported in the Troubled Company Reporter on Jan. 10, 2012,
1555 Wabash sought Court authority to use certain cash and cash
equivalents that allegedly serve as collateral for claims asserted
against the Debtor and its property by AMT CADC Venture and
Weyerhauser as junior lender.
The cash collateral issues in the Chapter 11 case relate to the
rents generated at the Debtor's property and the funds on deposit
in accounts maintained by the Debtor. The Senior Lender asserts a
first position mortgage lien and claim against the Property which
purportedly secures a senior mortgage debt of $42,126,967. In
addition to its mortgage lien on the Property, the Senior Lender
asserts a security interest in and lien upon the rents being
generated at the Property. The Junior Lender asserts a mortgage
lien and claim against the Property which secures a second
subordinate mortgage debt of $7,492,743. In addition to its
mortgage lien on the Property, the Junior Lender asserts a
security interest in and lien upon the rents being generated at
the Property.
The Debtor said it needs access to cash collateral to continue to
operate its business and manage its financial affairs and
effectuate an effective reorganization.
According to papers filed by the Debtor in court, the original
mortgage lender was seized by regulators with all loans (including
the Debtor's loan) and related assets being acquired by and
transferred to the Senior Lender. The Debtor attempted to
negotiate a re-setting of the required sale prices for the
condominium units so as to reflect realistic values for such
condominium units in light of the economic downturn. Both the
regulators and, then, the Senior Lender refused to adjust the sale
prices. As a result, the Debtor has been unable to sell the
condominium units (as the sale prices are grossly in excess of
that justified in the marketplace) and has turned to renting the
unsold condominiums as apartment units.
The Debtor said its operational and profitability problems are
principally due to the general economic problems facing the
country over the last several years (particularly in real estate).
Despite these issues, the Debtor said it generates substantial
rental income at the Property that will serve as the basis for the
formulation and implementation of an exit strategy from the
Chapter 11 case.
In partial response to an action brought by the Debtor against its
prior mortgage lender and other mechanics lien creditors in the
Circuit Court of Cook County, Illinois, the Senior Lender filed a
counterclaim which, among other things, seeks to foreclose on the
Property. On Dec. 22, 2011, the State Court entered an order in
the foreclosure action appointing a receiver for the Property.
The Chapter 11 case was filed before the receiver took possession
of the Property.
The Debtor has attempted to resolve all of the issues with the
Senior Lender, thus far without success. The Debtor intends to
continue with settlement negotiations with the Senior Lender.
About 1555 Wabash
1555 Wabash LLC owns and operates a 14-story mixed use building
located at 1555 South Wabash, in Chicago, Illinois. The property
is comprised of 176 residential units plus 11,000 square feet of
commercial space located on the first floor of the building. The
property was originally developed as condominium units to be sold
at designated sale prices to qualified buyers. Construction
was generally completed as of the middle of 2009. Only 36 of the
100 sale contracts closed. As of the Petition Date, 1555 Wabash
leased 115 of the remaining 140 residential apartment units --
roughly 82% -- to qualified tenants, while the commercial space is
presently vacant.
1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill.
Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the
property. Judge Jacqueline P. Cox oversees the case. David K.
Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the
Debtor's counsel. The Debtor scheduled $90,055 in personal
property and said the current value if its condo building is
unknown. The Debtor disclosed $51.6 million in liabilities. The
petition was signed by Theodore Mazola, president of New West
Realty Development Corp, sole member and manager of the Debtor.
38 STUDIOS: Seeks Rhode Island Aid to Stay Solvent
--------------------------------------------------
Shack News reports that 38 Studios, the owner of developer Big
Huge Games (Kingdoms of Amalur: Reckoning) may be facing financial
difficulties, and has turned to the Rhode Island government to
stay solvent. State officials have been meeting with the game
studio, though specific measures aren't being discussed yet.
"We're always working to keep Rhode Island companies solvent, and
that's what we're doing with 38 Studios," Governor Lincoln Chafee
told local TV station NBC 10, according to Shack News. "We're
working with 38 Studios on different issues.
Shack News says the company was originally formed in
Massachusetts, but Rhode Island offered a $75 million loan
guarantee in 2010. Shack News relates that this was to bring jobs
and tax revenue into the state, but the loan was a contentious
topic during the recent election season. When Reckoning was
released, studio founder Curt Schilling reassured the state that,
"the only way taxpayers lose is if the company failed," the report
notes.
AE BIOFUELS: Unit Sells Land for $1.1 Million to Repay Debt
-----------------------------------------------------------
Sutton Ethanol, LLC, a subsidiary of Aemetis, Inc. (formerly known
as AE Biofuels, Inc.), sold 195 acres of land located in Sutton,
Nebraska for gross consideration of $1,126,867 to Timothy and Joan
Johnson. Proceeds from the sale were used to repay a portion of
the outstanding indebtedness owed to Third Eye Capital
Corporation, as Agent, under the Note and Warrant Purchase
Agreement dated May 16, 2008 as amended from time to time.
About AE Biofuels
AE Biofuels, Inc. (OTC BB: AEBF) -- http://www.aebiofuels.com/--
is a biofuels company based in Cupertino, California, developing
sustainable solutions to address the world's renewable energy
needs. The Company is commercializing its patent-pending next-
generation cellulosic ethanol technology that enables the
production of biofuels from both non-food and traditional
feedstocks. Its wholly-owned Universal Biofuels subsidiary built
and operates a nameplate 50 million gallon per year biodiesel
production facility on the east coast of India.
The Company reported a net loss of $1.72 million on $1.59 million
of sales for the three months ended Sept. 30, 2010, compared with
a net loss of $3.78 million on $4.05 million of sales for the same
period a year earlier.
BDO Seidman, LLP, in San Jose, Calif., expressed substantial doubt
about AE Biofuels' ability to continue as a going concern,
following the Company's 2009 results. The independent auditors
noted that the Company has incurred recurring losses, and has a
working capital deficit and total stockholders' deficit as of
December 31, 2009.
The Company's balance sheet at Sept. 30, 2010, showed
$20.23 million in total assets, $29.03 million in total
liabilities, all current, and a stockholders' deficit of
$8.80 million. The Company has not filed financial reports after
filing its Form 10-Q for the quarter ended Sept. 30, 2010.
AEOLUS PHARMACEUTICALS: Registers 88.7 Million Common Shares
------------------------------------------------------------
Aeolus Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission a Form S-1 registration statement relating to
the offer and sale from time to time of up to 88,714,577 shares of
the Company's common stock, par value $0.01 per share, including
an aggregate of 60,800,125 shares of common stock issuable upon
exercise of warrants, which are held by Xmark Opportunity Fund,
L.P., JJK Partners, LLC, MAPA, LLC, et al. The proposed maximum
aggregate offering price is $26.70 million.
The shares of common stock and warrants were issued in three
separate private placement transactions each of which private
placements was made in reliance on Section 4(2) of the Securities
Act of 1933, as amended.
Pursuant to a registration rights agreement entered into in
connection with the Company's recent private placement which
closed on March 30, 2012, and April 4, 2012, the Company agreed to
register for resale the shares of common stock issued to the
selling stockholders. Investors who participated in private
placements that closed in August 2010 and October 2009 have also
exercised their rights, pursuant to registration rights agreements
entered into in connection with those private placements, to
include their registrable securities within this registration
statement.
The Company is not selling any common stock under this prospectus
and will not receive any of the proceeds from the sale of shares
by the selling stockholders, however the Company will receive the
proceeds of any cash exercise of the warrants.
The Company's common stock is quoted on the OTC Bulletin Board
under the symbol "AOLS." On May 10, 2012, the closing price of
the Company's common stock was $0.31 per share.
A copy of the filing is available for free at:
http://is.gd/Yzeb4G
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.
ALABAMA TRUST: Closed; Southern States Bank Assumes Deposits
------------------------------------------------------------
Alabama Trust Bank, National Association, of Sylacauga, Ala., was
closed on Friday, May 18, by the Office of the Comptroller of the
Currency, which appointed the Federal Deposit Insurance
Corporation as receiver. To protect the depositors, the FDIC
entered into a purchase and assumption agreement with Southern
States Bank of Anniston, Ala., to assume all of the deposits of
Alabama Trust Bank, National Association.
The sole branch of Alabama Trust Bank, National Association will
reopen during its normal business hours as a branch of Southern
States Bank. Depositors of Alabama Trust Bank, National
Association, will automatically become depositors of Southern
States Bank. Deposits will continue to be insured by the FDIC, so
there is no need for customers to change their banking
relationship in order to retain their deposit insurance coverage
up to applicable limits. Customers of Alabama Trust Bank,
National Association, should continue to use their existing branch
until they receive notice from Southern States Bank that it has
completed systems changes to allow other Southern States Bank
branches to process their accounts as well.
As of March 31, 2012, Alabama Trust Bank, National Association had
around $51.6 million in total assets and $45.1 million in total
deposits. In addition to assuming all of the deposits of the
failed bank, Southern States Bank agreed to purchase essentially
all of the assets.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-405-8124. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/alabamatrust.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $8.9 million. Compared to other alternatives, Southern
States Bank's acquisition was the least costly resolution for the
FDIC's DIF. Alabama Trust Bank, National Association, is the 24th
FDIC-insured institution to fail in the nation this year, and the
first in Alabama. The last FDIC-insured institution closed in the
state was Superior Bank, Birmingham, on April 15, 2011.
ALASKA COMMS: Bank Debt Trades at 10% Off in Secondary Market
-------------------------------------------------------------
Participations in a syndicated loan under which Alaska
Communications Systems is a borrower traded in the secondary
market at 89.90 cents-on-the-dollar during the week ended Friday,
May 18, 2012, a drop of 1.65 percentage points from the previous
week according to data compiled by Loan Pricing Corp. and reported
in The Wall Street Journal. The Company pays 400 basis points
above LIBOR to borrow under the facility. The bank loan matures
on Oct. 18, 2016, and carries Moody's Ba3 rating and Standard &
Poor's BB- rating. The loan is one of the biggest gainers and
losers among 116 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
About Alaska Communications
Alaska Communications Systems Holdings, Inc., is a leading
integrated communications provider based in Anchorage, Alaska.
ACSH is the state's incumbent wireline operator, owns an extensive
IP backbone serving the enterprise segment and also operates an
extensive 3G wireless network in the state of Alaska.
In October 2011, Moody's affirmed ACSH's B1 Corporate Family
Rating, its B1 Probability of Default Rating and the company's
SGL-3 Speculative Grade Liquidity rating. The outlook is stable.
The B1 CFR reflects the ACSH's deteriorating legacy wire-line
subscriber base and the competitive challenges within the wireless
segment. The company's ILEC operations face the typical
subscriber loss characteristics common in the industry, as
wireless substitution erodes the company's customer base. ACSH
has done well in offsetting this decline through enterprise
business growth, but not without suffering modest margin
compression. Going forward, Moody's expect this trend to
continue, as wire-line customers abandon traditional telephone
services and rely upon wireless.
AMARU INC: Incurs $156,000 Net Loss in First Quarter
----------------------------------------------------
Amaru, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
including noncontrolling interest of $156,011 on $2,359 of total
revenue for the three months ended March 31, 2012, compared with a
net loss including noncontrolling interest of $500,013 on $3,143
of total revenue for the same period during the prior year.
Amaru reported a net loss from operations of $1.37 million in
2011, compared with a net loss from operations of $1.50 million in
2010.
The Company's balance sheet at March 31, 2012, showed $2.74
million in total assets, $3.41 million in total liabilities and a
$670,975 total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/vVvSb8
About Amaru Inc.
Singapore-based Amaru, Inc., a Nevada corporation, is in the
business of broadband entertainment-on-demand, streaming via
computers, television sets, PDAs (Personal Digital Assistant) and
the provision of broadband services. The Company's business
includes channel and program sponsorship (advertising and
branding); online subscriptions, channel/portal development
(digital programming services); content aggregation and
syndication, broadband consulting services, broadband hosting and
streaming services and E-commerce.
After auditing the 2011 results, Wilson Morgan, LLP, in Irvine,
California, noted that the Company has sustained accumulated
losses from operations totalling $40.7 million at Dec. 31, 2011.
This condition and the Company's lack of significant revenue,
raise substantial doubt about the Company's ability to continue as
going concern, the auditors said.
AMERICA WEST: Delays Form 10-Q for First Quarter
------------------------------------------------
America West Resources, Inc., is in the process of preparing and
reviewing the financial and other information to be disclosed in
the quarterly report on Form 10-Q for the period ended March 31,
2012, and management does not believe the Form 10-Q can be
completed on or before the prescribed due date without
unreasonable effort or expense.
About America West
Based in Salt Lake City, Utah, America West Resources, Inc., is an
established domestic coal producer engaged in the mining of clean
and compliant (low-sulfur) coal. The majority of the Company's
coal is sold to utility companies for use in the generation of
electricity.
The Company reported a net loss of $16.35 million on
$11.08 million of total revenue for the nine months ended
Sept. 30, 2011. The Company had a net loss of $16.14 million on
$10.07 million of total revenue for the year ended Dec. 31, 2010,
Following a net loss of $8.70 million on $11.01 million of total
revenue during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$31.47 million in total assets, $23.12 million in total
liabilities, and $8.35 million in total stockholders' equity.
As reported by the TCR on April 21, 2011, MaloneBailey, LLP, in
Houston, Texas, expressed substantial doubt about America West's
ability to continue as a going concern, following the 2010
financial results. The independent auditors noted that the
Company has a working capital deficit and has incurred significant
losses.
AMERICAN DEFENSE: Incurs $395,000 Net Loss in First Quarter
-----------------------------------------------------------
American Defense Systems, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $395,269 on $1.88 million of contract revenues earned
for the three months ended March 31, 2012, compared with net
income of $11.96 million on $2.51 million of contract revenues
earned for the same period during the prior year.
The Company's balance sheet at March 31, 2012, showed $2.10
million in total assets, $2.70 million in total liabilities, all
current, and a $604,504 total shareholders' deficiency.
A copy of the Form 10-Q is available for free at:
http://is.gd/5wy1D7
About American Defense
Hicksville, N.Y.-based American Defense Systems, Inc., is a
defense and security products company engaged in three business
areas: customized transparent and opaque armor solutions for
construction equipment and tactical and non-tactical transport
vehicles used by the military; architectural hardening and
perimeter defense, such as bullet and blast resistant transparent
armor, walls and doors. The Company also operates the American
Institute for Defense and Tactical Studies. The Company is in the
process of negotiating a sale or disposal of the portion of its
business related to the operation of a live-fire interactive
tactical training range location in Hicksville, N.Y. The portion
of the Company's business related to vehicle anti-ram barriers
such as bollards, steel gates and steel wedges that deploy out of
the ground was sold as of March 22, 2011.
After auditing the 2011 financial statements, Marcum LLP, in
Melville, New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company had a working capital deficiency
of $867,000, an accumulated deficit of $17.0 million,
shareholders' deficiency of $235,000 and cash on hand of $132,000.
The Company had operating losses of $3.30 million and
$3.69 million for the years ended Dec. 31, 2011 and 2010,
respectively. The Company had income from continuing operations
for the year ended Dec. 31, 2011, of $6.83 million, including a
gain of $12.8 million on the redemption of mandatorily redeemable
preferred stock, and a loss from continuing operations for the
year ended Dec. 31, 2010, of $8.17 million. The Company had net
income (losses) of $9.37 million and $(9.38 million) for the years
ended Dec. 31, 2011 and 2010, respectively.
AMERICAN NATURAL: Incurs $1.2 Million Net Loss in First Quarter
---------------------------------------------------------------
American Natural Energy Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $1.20 million on $464,243 of revenue for
the three months ended March 31, 2012, compared with a net loss of
$620,649 on $663,671 of revenue for the same period a year ago.
The Company reported a net loss of $905,792 in 2011, compared with
a net loss of $2.06 million in 2010.
The Company's balance sheet at March 31, 2012, showed $17.15
million in total assets, $10.47 million in total liabilities and
$6.67 million total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/qu6Xv5
About American Natural
American Natural Energy Corporation (TSX Venture: ANR.U) is a
Tulsa, Oklahoma-based independent exploration and production
company with operations in St. Charles Parish, Louisiana.
In its audit report accompanying the 2011 financial statements,
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company incurred a net loss in
2011 and has a working capital deficiency and an accumulated
deficit at Dec. 31, 2011.
AMERICAN PATRIOT: Reports $21,600 Net Income in First Quarter
-------------------------------------------------------------
American Patriot Financial Group, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing net income of $21,637 million on $983,669 of total
interest and dividend income for the three months ended March 31,
2012, compared with a net loss of $281,885 on $989,785 of total
interest and dividend income for the same period during the prior
year.
The Company reported a net loss of $1.18 million in 2011, compared
with a net loss of $2.29 million in 2010.
The Company's balance sheet at March 31, 2012, showed $92.82
million in total assets, $91.75 million in total liabilities and
$1.06 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/WGUEH9
About American Patriot
Based in Greenville, Tenn., American Patriot Financial Group, Inc.
is a one-bank holding company formed as a Tennessee corporation to
own the shares of American Patriot Bank. The Bank is the only
subsidiary of the Corporation.
American Patriot Bank commenced operations as a state chartered
bank on July 9, 2001. The Bank had total assets of roughly
$118 million at Dec. 31, 2009. The Bank is not a member of
the Federal Reserve System.
The Bank's customer base consists primarily of small to medium-
sized business retailers, manufacturers, distributors, land
developers, contractors, professionals, service businesses and
local residents.
On Aug. 18, 2010, the Company received from the Federal Deposit
Insurance Corporation, a Supervisory Prompt Corrective Action
Directive, dated August 17, 2010, due to American Patriot Bank's
"significantly undercapitalized" status. The Directive requires
that the Bank submit an acceptable capital restoration plan on or
before August 31, 2010, providing that, among other things, at a
minimum, the Bank will restore and maintain its capital to the
level of "adequately capitalized."
In its audit report for the 2011 results, Hazlett, Lewis & Bieter,
PLLC, in Chattanooga, Tennessee, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has incurred
significant losses for the past five years resulting in a retained
deficit of $7.15 million at Dec. 31, 2011. At Dec. 31, 2011 and
2010, the Company and its subsidiary were significantly
undercapitalized based on regulatory standards and has consented
to an Order to Cease and Desist with its primary federal regulator
that requires, among other provisions, that it achieve regulatory
capital thresholds that are significantly in excess of its current
actual capital levels. The Company's nonperforming assets have
increased significantly during 2011 and 2010 related primarily to
deterioration in the credit quality of its loans collateralized by
real estate. The Company, at the holding company level, has a
note payable that was due Feb. 28, 2011, which is now in default.
This note is securitized by 100 percent of the stock of the
subsidiary.
ANGEL MARTINEZ: 1st. Cir. BAP Affirms Case Dismissal
----------------------------------------------------
The U.S. Bankruptcy Appellate Panel for the First Circuit shot
down an appeal taken by Angel Luis Colon Martinez from an order of
the U.S. Bankruptcy Court for the District of Puerto Rico dated
Nov. 22, 2011, dismissing the Debtor's chapter 11 case and
disqualified him from filing a new case for 180 days pursuant to
11 U.S.C. Sec. 109(g).
"The record amply supports the bankruptcy court's conclusion that,
notwithstanding its extraordinary patience and its accommodations
made to the Debtor, there was cause to both dismiss the Debtor's
chapter 11 case pursuant to [11 U.S.C. Sec. 1112(b)], and
disqualify him from any further case filing for 180 days," said
Bankruptcy Judge Henry J. Boroff, as member of the Bankruptcy
Appellate Panel, who wrote the opinion. Other members of the
panel are Judges J. Michael Deasy and Frank J. Bailey.
Allied Financial, Inc., the Debtor's largest secured creditor
holding secured claims totaling $665,000, sought dismissal of the
case, arguing that it was filed in bad faith. Allied also said
the Debtor's conduct throughout the bankruptcy proceedings
"evidence[d] a record of delay."
Allied's collateral covers three out of the Debtor's four real
estate properties.
The Debtor filed a disclosure statement and plan of reorganization
on Nov. 21, 2011, roughly six weeks after the Court-ordered
deadline.
A copy of the First Circuit BAP's May 14, 2012 decision is
available at http://is.gd/UDS845from Leagle.com.
About Angel Luis Colon Martinez
Angel Luis Colon Martinez, a retired physician who owns various
real estate properties in Santurce, Hato Rey, Guanica and Caguas,
filed a pro se Chapter 11 bankruptcy petition (Bankr. D.P.R. Case
No. 10-09746) on Oct. 18, 2010. Mr. Martinez owns a home,
residential rental property, unimproved land, and a commercial
building. In his schedules, the Debtor reported that, as of the
Petition Date, the total value of the Properties was
$1.97 million.
APOLLO MEDICAL: Incurs $720,000 Net Loss in Fiscal 2012
-------------------------------------------------------
Apollo Medical Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $720,346 on $5.11 million of revenue for the year
ended Jan. 31, 2012, compared with a net loss of $156,331 on $3.89
million of revenue during the prior year.
The Company's balance sheet at Jan. 31, 2012, showed $1.36 million
in total assets, $1.78 million in total liabilities and a $421,220
total stockholders' deficit.
Kabani & Company, Inc., in Los Angeles, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Jan. 31, 2012, citing accumulated
deficit of $2,117,708 as of Jan. 31, 2012, negative working
capital of $266,044 and cash flows used in operating activities of
$385,455, which raised substantial doubt about the Company's
ability to continue as a going concern. .
A copy of the Form 10-K is available for free at:
http://is.gd/Nqh73t
About Apollo Medical
Glendale, Calif.-based Apollo Medical Holdings, Inc., provides
hospitalist services in the Greater Los Angeles, California area.
Hospitalist medicine is organized around the admission and care of
patients in an inpatient facility such as a hospital or skilled
nursing facility and is focused on providing, managing and
coordinating the care of hospitalized patients.
APPLIED DNA: Incurs $1.5 Million Net Loss in March 31 Quarter
-------------------------------------------------------------
Applied DNA Sciences, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $1.54 million on $518,402 of revenue for the three
months ended March 31, 2012, compared with a net loss of $2.59
million on $140,443 of revenue for the same period during the
prior year.
The Company reported a net loss of $3.95 million on $1.03 million
of revenue for the six months ended March 31, 2012, compared with
a net loss of $3.94 million on $458,260 of revenue for the same
period a year ago.
The Company reported a net loss of $10.51 million for the fiscal
year ended Sept. 30, 2011, compared with a net loss of $7.91
million during the prior year.
The Company's balance sheet at March 31, 2012, showed $1.45
million in total assets, $638,232 in total liabilities, all
current, and $813,783 in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/sSi4qv
About Applied DNA
Stony Brook, N.Y.-based Applied DNA Sciences, Inc., is principally
devoted to developing DNA embedded biotechnology security
solutions in the United States.
RBSM LLP, in New York, noted in its report on Applied DNA's fiscal
2011 financial results that the Company has suffered recurring
losses and does not have significant cash or other material
assets, nor does it have an established source of revenues
sufficient to cover its operations, which raises substantial doubt
about its ability to continue as a going concern.
ARCAPITA BANK: Wants to Make $30MM Loan to Golf Course Unit
-----------------------------------------------------------
Arcapita Bank B.S.C.(c) and certain of its subsidiaries and
affiliates, seeks Bankruptcy Court permission to fund an
intercompany loan of up to $30,400,000 to support its indirect
interest in Lusail Golf Development LLC, a Qatari limited
liability company, which owns real estate.
The property is located within the only master-planned development
in Lusail City, which is located roughly 15 miles from Doha, the
largest city in Qatar. The property is currently undeveloped. It
is currently contemplated that the Lusail Land will be developed
into a residential real estate golf community. Significantly,
this use could change in a way highly beneficial to the Debtors
based on ongoing developments in connection with the selection
last year of Qatar as the site of the 2022 World Cup.
The Debtors said one of the key assets they seek to preserve is an
option to repurchase shares representing a 50% interest in the
Lusail Joint Venture. The Debtors said the Option, which is
already well "in the money," arises out of a series of agreements
pursuant to which Arcapita, in a Shari'ah compliant manner,
implemented a prepetition financing transaction with the QIB Group
which raised roughly $200 million; for Shari'ah reasons, the
transaction was structured as a sale of the Shares, together with
a right to lease back the underlying land held by the Lusail Joint
Venture.
Arcapita received a right to buy back the Shares at any time prior
to March 5, 2015, for a strike price of only $220 million. In
effect, the sale of the Shares provided necessary working capital
for the operation of Arcapita and its affiliates, the combination
of the lease payments and the Option exercise price compensates
QIB for entering into these series of agreements, and the Option
effectively enables Arcapita and its affiliates to maintain their
interest in the Lusail Joint Venture and realize the underlying
value of the Shares for the benefit of stakeholders of the
Arcapita Group. This is a structure that has frequently been used
by Arcapita, including in a prior agreement with QIB with respect
to the very same Shares, to provide financing for Arcapita's
business operations and investments in portfolio companies.
According to the Debtors, numerous direct benefits will inure to
the estates if the financing is authorized, chief among them being
(a) Arcapita's Option to repurchase the valuable Shares will be
preserved; (b) the Arcapita Group's equity interest in the Lusail
Joint Venture will not be diluted by its joint venture partner;
(c) Arcapita will not be compelled to sell its interests to its
joint venture partner at an unreasonably low price; and (d) the
value of the non-Debtor joint venture will be preserved by
avoiding a potential default on the Land Purchase Agreement.
The Court will hold a hearing on the Debtors' request on May 31,
2012 at 2:00 p.m. (Eastern Time). Objections are due May 24, 2012
at 2:00 p.m. (Eastern Time).
Separately, the Debtors seek permission to file redacted copies of
contracts, leases and agreements related to the Lusail Joint
Venture and file unredacted copies of those documents under seal.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita that
previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage I,
L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas
Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
ARCAPITA BANK: Court Denies Commerzbank's Bid to Deliver Notice
---------------------------------------------------------------
Commerzbank Aktiengesellschaft failed to advance on its request to
modify the automatic stay so it could deliver to Arcapita Bank
B.S.C.(c) a claim notice under a pre-bankruptcy guarantee.
Frankfurt-based Commerzbank made a EUR125 million loan to Arcapita
subsidiary PVC (Lux) Holding Co. Sarl. As reported by the
Troubled Company Reporter on April 25, Commerzbank sought limited
stay relief to allow delivery of a claim notice to Arcapita with
respect to the Guarantee made by Arcapita in support of deferred
payment obligations of PVC Lux -- one of Arcapita's indirect
subsidiaries -- as purchaser under a Murabaha Facility Agreement
dated as of May 16, 2008. Commerzbank said the relief will allow
Commerzbank to perfect, crystallize and otherwise preserve its
claim under the Laws of Bahrain which govern the Guarantee. This
would also avoid the unjust result that Arcapita could use the
imposition of the automatic stay as a basis to challenge the
validity of Commerzbank's claims under the Guarantee, according to
Commerzbank.
The Debtors and the Official Committee of Unsecured Creditors
objected to the request. As noted by the TCR on May 3, citing
report from Bloomberg News' bankruptcy columnist Bill Rochelle,
unlike an ordinary guarantee that's automatically enforceable,
Arcapita argued its guarantee doesn't kick in until it's given a
notice by Commerzbank. When Arcapita filed for Chapter 11
protection in March, the notice hadn't been given.
Commerzbank said giving notice is a mere ministerial act. To the
contrary, Arcapita said that the notice goes to the heart of the
obligation. Arcapita wants the Court to prevent serving the
notice so the pool of creditors will be smaller because the
guarantee won't be enforceable.
Commerzbank is one of seven members on Arcapita's official
committee representing unsecured creditors.
"The Motion is denied without prejudice, as more fully explained
at the Hearing, because movant has failed to establish cause to
lift the stay, see Sonnax Indus., Inc. v. Tri Component Prods.
Corp., 907 F.2d 1280, 1285 (2d Cir. 1990), including that
Commerzbank has not established that its proposed claim notice
would simply preserve its rights as opposed to constituting a step
towards collection of a debt," Judge Sean H. Lane ruled on
Thursday.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita that
previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage I,
L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas
Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
ARCAPITA BANK: May 30 Final Hearing on Alvarez & Marsal Employment
------------------------------------------------------------------
The Bankruptcy Court will hold another hearing May 31 to consider
final approval of the request of Arcapita Bank B.S.C., and its
debtor-affiliates to employ Alvarez & Marsal North America, LLC,
as financial advisors.
On May 15, the Court gave the Debtors interim authority to hire
A&M. Terms of the employment were reported in the April 11
edition of the Troubled Company Reporter.
Arcapita also obtained Bankruptcy Court orders authorizing the
employment of:
-- Gibson, Dunn, & Crutcher LLP as lead bankruptcy counsel;
-- Linklaters LLP as special counsel;
-- Trowers & Hamlins LLP as Bahraini counsel; and
-- certain professionals utilized in the ordinary course of
the Debtors' business.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19,
2012. The Debtors said they do not have the liquidity necessary
to repay a US$1.1 billion syndicated unsecured facility when it
comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita that
previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage I,
L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas
Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP
as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
ARKANOVA ENERGY: Delays Form 10-Q for First Quarter
---------------------------------------------------
Arkanova Energy Corporation was unable to file, without
unreasonable effort and expense, its Form 10-Q quarterly report
for the period ended March 31, 2012, because the Company is still
compiling information for the Form 10-Q. It is anticipated that
the Form 10-Q, along with the unaudited interim financial
statements, will be filed on or before the deadline.
About Arkanova Energy
The Woodlands, Tex.-based Arkanova Energy Corporation is currently
participating in oil and gas exploration activities in Arkansas,
Colorado and Montana. All of Arkanova's oil and gas properties
are located in the United States.
The Company reported a net loss of $2.06 million for the year
ended Sept. 30, 2011, compared with a net loss of $13.87 million
during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $2.88 million
in total assets, $8.21 million in total liabilities and a $5.32
million total stockholders' deficit.
After auditing the fiscal 2011 financial statements, the Company's
independent auditors expressed substantial doubt about the
Company's ability to continue as a going concern. MaloneBailey,
LLP, in Houston, Texas, said the Company has incurred losses since
inception, which raises substantial doubt about its ability to
continue as a going concern.
ARTHUR NADEL: Receiver Okayed for Initial Distributions
-------------------------------------------------------
The law firm of Wiand Guerra King announced on behalf of Receiver,
Burton W. Wiand, that the Honorable Richard A. Lazzara, United
States District Judge, of the District Court for the Middle
District of Florida entered an Order approving a Motion made on
Mr. Wiand's behalf authorizing the initial distribution of
proceeds from the Receivership estate to investor victims of the
Arthur Nadel Ponzi scheme. Mr. Wiand was appointed Receiver with
respect to this massive fraud at the suggestion of the Securities
and Exchange Commission and since January of 2009 has been engaged
in efforts to secure and liquidate assets and collect funds for
the benefit of defrauded investors and other creditors. Since
starting with only approximately $600,000 in receivership accounts
in January of 2009, the efforts of Mr. Wiand and his attorneys,
accountants, and others have resulted in net recoveries for the
Receivership estate to date in excess of $34 million. The Order
entered by Judge Lazzara authorizes the distribution of
approximately $26 million that will result in an initial return to
defrauded investors of 20% of their approved claims.
The funds that have been collected for distribution to date have
been gathered from settlement of clawback lawsuits, claims against
financial institutions that worked with Arthur Nadel, and recovery
and liquidation of assets that had been acquired by Arthur Nadel,
his wife and others who worked with Arthur Nadel's fraudulent
scheme. Mr. Wiand still has clawback lawsuits pending against
individuals and entities who received profits from the Ponzi
scheme or who unfairly benefited from distributions made by Nadel.
Significant lawsuits are also pending against Holland & Knight,
the law firm that represented Nadel and his entities, and Wells
Fargo Bank, an institution that provided banking services to
Nadel. Additional funds are being recovered from the U.S.
Treasury Department by Mr. Wiand's team through the filing of
amended income tax returns on behalf of participants in Nadel's
scheme who paid taxes on non-existent profits. Mr. Wiand stated
that, "this has been a long and difficult process in order to
recover assets and funds from individuals and entities that
benefited from Mr. Nadel's Ponzi scheme. Most of these recoveries
have required litigation and substantial efforts by attorneys of
Wiand Guerra King and other law firms who have assisted me in
connection with gathering these assets. I am delighted to have
reached the point in time when the victims of Mr. Nadel's crimes
can begin to receive a return of some of the funds that they had
lost." The team of lawyers, accountants, and other professionals
who are working for the Receiver will continue vigorous efforts to
secure funds owed to the Receivership estate in order to return to
investor-victims and creditors as much of what they have lost as
possible.
The distribution of funds and Judge Lazzara's Order was delayed
for over a week by objections interposed by Wells Fargo Bank, N.A.
Mr. Wiand has instituted suit against Wells Fargo and has denied
many of the bank's asserted interests in proceeds of the
Receivership alleging that activities of the bank facilitated and
assisted Arthur Nadel in perpetration of his fraudulent Ponzi
scheme. Judge Lazzara, in a separate Order today denying Wells
Fargo's objection to the distribution of funds to defrauded
investors ruled that the position of Wells Fargo was "totally
unfounded".
AXESSTEL INC: Swings to $472,000 Net Income in First Quarter
------------------------------------------------------------
Axesstel, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $472,268 on $12.03 million of revenue for the three months
ended March 31, 2012, compared with a net loss of $538,753 on
$12.63 million of revenue for the same period a year ago.
"The first quarter of 2012 marks our third consecutive quarter of
profitability since completing the transition of our business in
mid-2011," said Clark Hickock, chief executive officer of
Axesstel. "The results of that transition were evident this
quarter with a swing in profitability of more than $1.0 million
compared to the same period last year, despite slightly lower
revenues."
The Company's balance sheet at March 31, 2012, showed
$13.01 million in total assets, $24.16 million in total
liabilities, all current, and a $11.14 million in total
stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/xzgkze
About Axesstel, Inc.
San Diego, Calif.-based Axesstel, Inc. (OTC BB: AXST)
-- http://www.axesstel.com/-- is a provider of fixed wireless
voice and broadband access solutions for the worldwide
telecommunications market.
The Company's independent auditors expressed substantial doubt
about the Company's ability to continue as a going concern
following the Company's 2011 results. Gumbiner Savett Inc., in
Santa Monica, Calif., noted that although the Company generated
net income in 2011, the Company has historically incurred
substantial losses from operations and the Company may not have
sufficient working capital or outside financing available to meet
its planned operating activities over the next twelve months.
Additionally, there is uncertainty as to the impact that the
worldwide economic downturn may have on the Company's operations.
BERNARD L. MADOFF: Trustee Claws Back $29MM in Trotanoy Deal
------------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that a New York
bankruptcy judge Tuesday approved a $29 million cash settlement
between Trotanoy Investment Co. Ltd. and Irving Picard, the
trustee for Bernard L. Madoff Investment Securities LLC, who
originally sought to claw back $180 million in the adversary
proceeding.
Law360 relates that Mr. Picard had targeted Trotanoy, a Guernsey-
based investment firm, along with Geneva-based Hyposwiss Private
Bank Geneve SA and Guernsey-based Palmer Fund Management Services
Ltd., in connection with money Trotanoy transferred from BLMIS and
subsequently channeled to the other defendants.
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.
BIOVEST INTERNATIONAL: Incurs $5.9-Mil. Net Loss in March 31 Qtr.
-----------------------------------------------------------------
Biovest International, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $5.91 million on $1.21 million of total reevnue for
the three months ended March 31, 2012, compared with net income of
$82,000 on $1.22 million of total revenue for the same period
during the prior year.
The Company reported a net loss of $7.39 million on $2.28 million
of total revenue for the six months ended March 31, 2012, compared
with a net loss of $11.59 million on $2.05 million of total
revenue for the same period a year ago.
The Company's balance sheet at March 31, 2012, showed $5.14
million in total assets, $41.81 million in total liabilities and a
$36.66 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/oGqWFH
About Biovest International
Biovest International, Inc. -- http://www.biovest.com/-- is an
emerging leader in the field of active personalized
immunotherapies. In collaboration with the National Cancer
Institute, Biovest has developed a patient-specific, cancer
vaccine, BiovaxID(R), with three clinical trials completed,
including a Phase III study, demonstrating evidence of safety and
efficacy for the treatment of indolent follicular non-Hodgkin's
lymphoma.
Headquartered in Tampa, Florida, with its bio-manufacturing
facility based in Minneapolis, Minnesota, Biovest is publicly-
traded on the OTCQB(TM) Market with the stock-ticker symbol
"BVTI", and is a majority-owned subsidiary of Accentia
Biopharmaceuticals, Inc. (OTCQB: "ABPI").
Biovest, along with its subsidiaries, Biovax, Inc., AutovaxID,
Inc., Biolender, LLC, and Biolender II, LLC, filed for Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Case No. 08-17796) on
Nov. 10, 2008. Biovest emerged from Chapter 11 protection, and
its reorganization plan became effective, on Nov. 17, 2010.
In its audit report for the fiscal 2011 financial statements,
CHERRY, BEKAERT, & HOLLAND L.L.P., in Tampa, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
incurred cumulative net losses since inception of approximately
$161 million and cash used in operating activities of
approximately $4.6 million during the two years ended Sept. 30,
2011, and had a working capital deficiency of approximately
$2.2 million at Sept. 30, 2011.
The Company reported a net loss of $15.28 million on $3.88 million
of total revenue for the year ended Sept. 30, 2011, compared with
a net loss of $8.58 million on $5.35 million of total revenue
during the prior year.
BIOZONE PHARMACEUTICALS: Delays Form 10-Q for First Quarter
-----------------------------------------------------------
Biozone Pharmaceuticals, Inc., informed the U.S. Securities and
Exchange Commission that it will be late in filing its quarterly
report for the period ended March 31, 2012. The Company said the
compilation, dissemination and review of the information required
to be presented in the Form 10-Q for the relevant quarter has
imposed time constraints that have rendered timely filing of the
Form 10-Q impracticable without undue hardship and expense. The
Company undertakes the responsibility to file that quarterly
report no later than five days after its original due date.
About Biozone Pharmaceuticals
Biozone Pharmaceuticals, Inc., formerly, International Surf
Resorts, Inc., was incorporated under the laws of the State of
Nevada on Dec. 4, 2006, to operate as an internet-based provider
of international surf resorts, camps and guided surf tours. The
Company proposed to engage in the business of vacation real estate
and rentals related to its surf business and it owns the website
isurfresorts.com. During late February 2011, the Company began to
explore alternatives to its original business plan. On Feb. 22,
2011, the prior officers and directors resigned from their
positions and the Company appointed a new President, Director,
principal accounting officer and treasurer and began to pursue
opportunities in medical and pharmaceutical technologies and
products. On March 1, 2011, the Company changed its name to
Biozone Pharmaceuticals, Inc.
Since March 2011, the Company has been engaged primarily in
seeking opportunities related to its intention to engage in
medical and pharmaceutical businesses. On May 16, 2011, the
Company acquired substantially all of the assets and assumed all
of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an
Asset Purchase Agreement dated as of that date. Aero manufactures
markets and distributes a line of dermatological products under
the trade name of Baker Cummins Dermatologicals.
On June 30, 2011, the Company acquired the Biozone Labs Group
which operates as a developer, manufacturer, and marketer of over-
the-counter drugs and preparations, cosmetics, and nutritional
supplements on behalf of health care product marketing companies
and national retailers.
Biozone reported a net loss of $5.45 million in 2011, compared
with a net loss of $319,813 in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $7.54 million
in total assets, $10.31 million in total liabilities and a $2.76
million total shareholders' deficiency.
For 2011, Paritz and Company. P.A., in Hackensack, N.J., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
does not have sufficient cash balances to meet working capital and
capital expenditure needs for the next twelve months. In
addition, as of Dec. 31, 2011, the Company has a shareholder
deficiency and negative working capital of $4.37 million. The
continuation of the Company as a going concern is dependent on,
among other things, the Company's ability to obtain necessary
financing to repay debt that is in default and to meet future
operating and capital requirements.
BOYD GAMING: Peninsula Acquisition No Impact on Moody's 'B2' CFR
----------------------------------------------------------------
Boyd Gaming Corporation's announcement that it has entered into a
definitive agreement to acquire Peninsula Gaming, LLC, for total
consideration of $1.45 billion is viewed favorably by Moody's,
although there is no immediate impact on Boyd's B2 Corporate
Family Rating, stable rating outlook, or SGL-3 Speculative Grade
Liquidity rating. Peninsula has B2 Corporate Family Rating and
stable outlook.
In Moody's view, the acquisition of Peninsula will be a long-term
benefit to Boyd as it will complement the company's already large,
existing portfolio of casino properties, as well as reduce its
exposure to what Moody's considers to be a stagnant Las Vegas
Locals market. Peninsula owns five casino properties that operate
in locations with limited gaming supply and stable regulatory
environments -- Louisiana, Iowa, and Kansas. These properties also
have property-level EBITDA margins greater than Boyd's existing
casinos. Moody's expects these higher margin assets will improve
Boyd's overall free cash flow profile and provide the company with
the opportunity to reduce its leverage over the next few years, a
condition that would likely be necessary for the company to
maintain its B2 Corporate Family Rating.
However, despite Moody's favorable view of the acquisition, its
decision to maintain Boyd's B2 Corporate Family Rating considers
that Moody's continues to characterize the company's leverage as
high. Pro forma debt/EBITDA is about 7.0 times, slightly above the
company's 6.7 times debt/EBITDA for the 12-month period ended
March 31, 2012, and a full turn above the 6.0 times debt/EBITDA
target that would likely be needed for Boyd to be considered for a
ratings upgrade.
The transaction is expected to close by the end of 2012 and is
subject to various closing conditions and regulatory approval. The
purchase price represents an EBITDA multiple of 7.0 times based on
the trailing 12-month EBITDA of $109 million for Peninsula's Iowa
and Louisiana properties, an annualized run-rate for Peninsula's
Kansas Star Casino based on its first-quarter 2012 EBITDA of $26.8
million -- the casino opened in December 2011 -- and corporate
expense of $10 million. Under the terms of the transaction, Boyd
is obligated to make an additional payment in 2016 if Kansas
Star's EBITDA exceeds $105 million in 2015. The additional payment
would be 7.5 times additional EBITDA over $105 million.
Boyd has disclosed that it intends to fund the transaction with
$200 million in cash, approximately $1.2 billion mostly in pre-
payable bank debt at the Peninsula subsidiary for which Boyd has
obtained committed financing, and a $144 million seller note
provided by Peninsula. The $1.2 billion pre-payable bank debt will
be held in an unrestricted subsidiary until such time that this
debt can be refinanced on a restricted basis. As a result, Moody's
intends to directly incorporate the results and debt at the
Peninsula level into Moody's analysis of Boyd.
Moody's analysis and rating of Boyd, however, will continue to
exclude the operating results and capital structure of Marina
District Finance Company, Inc. MDFC is a non-recourse joint
venture that owns and operates the Borgata Hotel Casino in
Atlantic City, New Jersey and has a B2 Corporate Family Rating and
stable outlook. Although the financial results of MDFC are
consolidated into Boyd's operating results, Boyd and MDFC each
have their own Corporate Family Rating which acknowledges the non-
recourse nature of their respective restricted group financing
arrangements.
Independent of any change in Boyd's Corporate Family Rating, the
company's senior secured bank loan rating could be lowered as the
proposed transaction is expected to increase the amount of senior
secured debt in Boyd's capital structure. Any issue specific
rating changes, however, would depend on the ultimate amount and
terms of the financing obtained to initially fund the acquisition,
along with any other financing activities that take place between
now and closing.
Boyd Gaming Corporation wholly owns and operates gaming and
entertainment facilities located in Nevada, Mississippi, Illinois,
Louisiana, and Indiana. Boyd also has a 50% partnership interest
in Marina District Finance Company, Inc., a non-recourse joint
venture that owns and operates the Borgata Hotel Casino in
Atlantic City, New Jersey.
The principal methodology used in rating Boyd Gaming Corporation
was the Global Gaming Industry Methodology published in December
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Boyd Gaming Corporation wholly owns and operates gaming and
entertainment facilities located in Nevada, Mississippi, Illinois,
Louisiana, and Indiana. Boyd also has a 50% partnership interest
in Marina District Finance Company, Inc., a non-recourse joint
venture that owns and operates the Borgata Hotel Casino in
Atlantic City, New Jersey.
BROWNIE'S MARINE: Delays Form 10-Q for First Quarter
----------------------------------------------------
Brownie's Marine Group, Inc., notified the U.S. Securities and
Exchange Commission that it will be delayed in filing its
quarterly report on Form 10-Q for the period ended March 31, 2012.
The Company said certain financial and other information necessary
for an accurate and full completion of the Report could not be
provided within the prescribed time period without unreasonable
effort or expense.
About Brownie's Marine
Brownie's Marine Group, Inc. (OTC BB: BWMG) --
http://www.brownismarinegroup.com/-- designs, tests, manufactures
and distributes recreational hookah diving, yacht based scuba air
compressor and nitrox generation systems, and scuba and water
safety products. BWMG sells its products both on a wholesale and
retail basis, and does so from its headquarters and manufacturing
facility in Fort Lauderdale, Florida.
The Company reported a net loss of $3.77 million in 2011, compared
with a net loss of $1.18 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.97 million
in total assets, $2.74 million in total liabilities and a $762,401
total stockholders' deficit.
After auditing the 2011 results, L.L. Bradford & Company, LLC, in
Las Vegas, Nevada, noted that the Company has a working capital
deficiency and recurring losses and will need to secure new
financing or additional capital in order to pay its obligations,
all of which raise substantial doubt about the Company's ability
to continue as a going concern.
Bankruptcy Warning
According to the Form 10-K for the period ended Dec. 31, 2011, if
the Company fails to raise additional funds when needed, or do not
have sufficient cash flows from sales, the Company may be required
to scale back or cease operations, liquidate its assets and
possibly seek bankruptcy protection.
BUFFETS RESTAURANTS: Seeks to Retain Exclusive Chapter 11 Control
-----------------------------------------------------------------
Marie Beaudette at Dow Jones' DBR Small Cap reports that Buffets
Restaurants Holdings Inc. is seeking to keep exclusive control
over its Chapter 11 case for 60 days as it works to win creditor
backing for its restructuring plan.
About Buffets Inc.
Buffets Inc., the nation's largest steak-buffet restaurant
company, operates 494 restaurants in 38 states, comprised of 483
steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R)
restaurants, and franchises 3 steak-buffet restaurants in two
states. The restaurants are principally operated under the Old
Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire
Mountain(R) brands. Buffets employs 28,000 team members and
serves 140 million customers annually.
Buffets Inc. and all of its subsidiaries filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18,
2012, after it reached a restructuring support agreement with 83%
of its lenders to eliminate virtually all of the Company's roughly
$245 million of outstanding debt. In its schedules Buffets Inc.
disclosed $384,810,974 in assets and $353,498,404 in liabilities.
The Debtors are seeking to reject leases for 83 underperforming
restaurants.
Buffets had 626 restaurants when it began its prior bankruptcy
case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged
from bankruptcy in April 2009.
Higher gasoline and energy costs, along with a decline in guest
count, have hampered the Debtors' ability to service their long-
term debt and caused a liquidity strain, forcing the Company to
return to Chapter 11 bankruptcy.
In the new Chapter 11 case, Buffets Inc.'s legal advisors are
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway,
Stargatt & Taylor, LLP. The Company's financial advisor is
Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims,
noticing and balloting agent.
An ad hoc committee of secured lenders is represented by Willkie
Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del
Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP
Agent and Prepetition First Lien Agent, is represented by Skadden
Arps Slate Meagher & Flom as counsel.
The U.S. Trustee has appointed a 5-member Official Committee of
Unsecured Creditors in the Debtors' cases.
In March 2012, Buffets Inc. received court approval for an
incentive bonus program that may pay as much as $2.3 million to
executives if cash flow targets are met. There was an April 30
hearing schedule on another program to pay bonuses for a
successful sale of the business that could cost $2.7 million.
In April 2012, Buffets Inc. filed an amended bankruptcy exit plan
that proposes to pay $4 million to a pool of unsecured creditors
who are owed more than $44 million. Unsecured creditors are
expected to recover about 9% of their claims.
CAGLE'S INC: Koch Unit Seeks to Close Purchase This Summer
----------------------------------------------------------
Christopher Quinn at The Atlanta Journal-Constitution reports JCG
Foods, an entity affiliated with Koch Foods Inc., JCG hopes to
close the deal to acquire Cagle's this summer.
The report notes Mark Kaminsky, the chief financial officer of JCG
said if the purchase of Cagle's goes through, JCG may continue
using the Cagle name.
"The plan is to continue operating the facilities," said Mr.
Kaminsky, according to the report, "We are not planning on
shutting any of them at this time."
According to the report, JCG has made an offer that could approach
$80 million to buy Cagle's. The report says the U.S. Department
of Justice must approve the attempt by JCG to pay cash and take
over Cagle's inventory and accounts.
Koch Foods makes prepared and uncooked chicken for retail sale. It
is not related to Koch Industries.
As reported by the Troubled Company Reporter on May 16, 2012,
Cagle's Inc. was authorized by the bankruptcy court on May 11 to
sell its assets for not less than $69.5 million to an affiliate of
Koch Foods. The TCR, citing Bill Rochelle, the bankruptcy
columnist for Bloomberg News, said the price rose about $12
million after the May 10 auction where a bidder competed with
Koch. The report said Koch is buying the business for $49.7
million plus the value of inventory and accounts receivable less
accounts payable to be assumed. Any purchase price in excess of
$69.5 million will be paid with a one-year note bearing interest
at 8%. The first payment on the note will be due in February.
About Cagle's
Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages
in the production, marketing, and distribution of fresh and frozen
poultry products in the United States.
Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed
on Oct. 19, 2011, voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and
11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in
Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves
as the Debtors' financial advisors. Kurtzman Carson LLC serves as
their claims, noticing, and balloting agent.
In its schedules, Cagle's Inc. disclosed $81,998,077 in assets and
$55,304,599 in liabilities as of the Petition Date.
The Official Committee of Unsecured Creditors is represented by
McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel.
J.H. Cohn LLP serves as its financial advisors.
No trustee or examiner has been appointed in the Debtors'
bankruptcy cases.
CALYPTE BIOMEDICAL: Incurs $290,000 Net Loss in First Quarter
-------------------------------------------------------------
Calypte Biomedical Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $290,000 on $71,000 of product sales for the three
months ended March 31, 2012, compared with net income of $101,000
on $263,000 of product sales for the same period a year ago.
The Company reported a net loss of $693,000 in 2011, compared with
net income of $8.84 million in 2010.
The Company's balance sheet at March 31, 2012, showed $1.95
million in total assets, $6.43 million in total liabilities, and a
$4.48 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/c4iLLg
About Calypte Biomedical
Portland, Oregon-based Calypte Biomedical Corporation develops,
manufactures, and distributes in vitro diagnostic tests, primarily
for the diagnosis of Human Immunodeficiency Virus ("HIV")
infection.
Following the Company's 2011 results, OUM & Co. LLP, in San
Francisco, California, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has suffered recurring operating
losses and negative cash flows from operations, and management
believes that the Company's cash resources will not be sufficient
to sustain its operations through 2012 without additional
financing.
Bankruptcy Warning
The Company said in the 2011 annual report that, in July 2010 the
Company entered into a series of agreements providing for (i) the
restructuring of the Company's outstanding indebtedness to Marr
and SF Capital and (ii) the transfer of the Company's interests in
the two Chinese joint ventures, Beijing Marr and Beijing Calypte,
to Kangplus. Under the Debt Agreement, $6,393,353 in outstanding
indebtedness was agreed to be converted to 152,341,741 shares of
the Company's common stock, and the Company's remaining
indebtedness to Marr, totaling $3,000,000 was cancelled. In
consideration for that debt restructuring, the Company transferred
its equity interests in Beijing Marr to Kangplus pursuant to the
Equity Transfer Agreement and transferred certain related
technology to Beijing Marr. The Company has also agreed to
transfer its equity interests in Beijing Calypte to Marr
or a designate of its choosing. The transactions contemplated by
the Debt Agreement and the Equity Transfer Agreement are subject
to Chinese government registration of the transfer of the equity
interests. This registration has now been approved, and the
Shares were issued in March 2012. Under the debt agreement with
SF Capital, $2,008,259 in outstanding indebtedness was converted
to 47,815,698 shares of the Company's common stock.
Notwithstanding this debt restructuring, the Company's significant
working capital deficit and limited cash resources place a high
degree of doubt on its ability to continue its operations. In
light of the Company's existing operations and financial
challenges, the Company is exploring strategic and financing
options. Failure to obtain additional financing will likely cause
the Company to seek bankruptcy protection.
CAMBRIDGE HEART: Incurs $1.8 Million Net Loss in First Quarter
--------------------------------------------------------------
Cambridge Heart, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.84 million on $554,155 of revenue for the three months ended
March 31, 2012, compared with a net loss of $1.33 million on
$637,061 of revenue for the same period during the prior year.
The Company reported a net loss of $5.40 million in 2011, compared
with a net loss of $5.17 million in 2010.
The Company's balance sheet at March 31, 2012, showed $2.54
million in total assets, $4.68 million in total liabilities,
$12.74 million in convertible preferred stock, and a $14.89
million total stockholders' deficit.
"In the first quarter of 2012, 103 MTWA Modules were shipped to
customers, which although lower than the cyclical high in the
fourth quarter of last year, was in line with our expectations"
commented Ali Haghighi-Mood, Cambridge Heart's CEO. "Our sales
and clinical specialist teams are making progress relative to
installing the Modules and training practice personnel, and are
very focused on reducing the time between Module shipment and the
initial clinical utilization."
As of May 15, 2012, 100,112,960 shares of the Company's common
stock were outstanding. On an as-converted basis, the Company has
124,659,416 shares of common stock issued and outstanding,
including 100,112,960 shares of common stock issued, 4,180,602
shares issuable upon conversion of the Series C-1 Convertible
Preferred Stock and 20,365,854 shares issuable upon conversion of
the Series D Convertible Preferred Stock.
A copy of the Form 10-Q is available for free at:
http://is.gd/moczR3
About Cambridge Heart
Tewksbury, Mass.-based Cambridge Heart, Inc., is engaged in the
research, development and commercialization of products for the
non-invasive diagnosis of cardiac disease.
For the year ended Dec. 31, 2011, McGladrey & Pullen, LLP, in
Boston, Massachusetts, expressed substantial doubt about Cambridge
Heart's ability to continue as a going concern. The independent
auditors noted that of the Company's recurring losses, inability
to generate positive cash flows from operations, and liquidity
uncertainties from operations.
CARROLS RESTAURANT: Moody's Assigns 'B3' CFR & Sr. Notes Rating
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Carrols
Restaurant Group, Inc.'s proposed $140 million guaranteed senior
secured second lien notes. Moody's also assigned a B3 Corporate
Family Rating and B3 Probability of Default Rating to the company.
The rating outlook is stable.
On March 26, 2012, Carrols announced that its indirect subsidiary,
Carrols LLC, will acquire 278 Burger King Corp. (rated B2 /
Negative) company-owned restaurants. As a part of the transaction,
Carrols will commit to remodel approximately 455 Burger King
restaurants over the next three and half years. Proceeds from the
proposed notes will be used to refinance existing debt at Carrols
LLC and put cash on the balance sheet to fund the remodeling. The
acquisition of BKC's restaurants is conditioned upon obtaining the
financing to fund the remodeling program and the refinancing of
Carrols LLC debt. On May 7, 2012, Carrols completed the spin-off
of Fiesta Restaurant Group, Inc. (rated B2 / Stable), into a
separate, publicly traded company.
Ratings assigned:
-- Corporate Family Rating (CFR) at B3
-- Probability of Default Rating (PDR) at B3
-- $140 million guaranteed senior secured second lien notes due
2020 at B3 (LGD3, 45%)
-- SGL-2 Speculative Grade Liquidity Rating
The ratings outlook is stable.
Ratings Rationale
Carrols' B3 Corporate Family Rating reflects the company's high
pro forma debt load and weak credit metrics stemming from the
proposed acquisition, as well as its limited scale, single brand
focus and geographic concentration. Following the completion of
the transaction, pro forma leverage is expected to exceed 6.5
times, and interest coverage will be less than 1.0 time. The
rating also reflects the significant risk inherent in such a large
acquisition, which effectively doubles the size of the company.
These risks include the uncertainty with regards to achieving
targeted operating improvements at the acquired units and/or
realizing the required return on the large remodeling investment
to be made over the next 3.5 years. The Burger King system has
been in transition over the past several quarters due to the
implementation of BKC's brand enhancement and transformational
initiatives. While traffic trends have recently begun to improve,
the sustainability of this improvement is yet to be determined.
Carrols' rating gains significant support from the expectation for
good liquidity, which is reflected in the SGL-2 Speculative Grade
Liquidity Rating. Balance sheet cash and excess revolver
availability appear sufficient to cover cash outflows over the
next 12-18 months, including remodeling capital spending and cash
interest expense. This should provide the company with time to
implement its margin improvement initiatives at the acquired
stores and begin remodeling a significant number of acquired
units. Carrols' position as the largest franchisee in the Burger
King system, the brand's strong position among its peers, and its
relatively well balanced day-part division also provide ratings
support.
The stable ratings outlook reflects Moody's belief that both BKC's
transformational activities and Carrols' experience in operating
and integrating Burger King restaurants should result in material
cost savings and credit metric improvement over the near-to-
intermediate term. The outlook also reflects the expectation for
continued good liquidity.
Greater than expected declines in cash balances or increased
reliance on revolver borrowing could be viewed as sign that the
company is not achieving expected results, this jeopardizing the
stable outlook. Factors that could result in a downgrade include
any deterioration in operating performance, particularly if
positive traffic trends are not sustained or if the company does
not achieve targeted cost savings. Any deterioration in liquidity,
particularly through a faster-than-expected cash burn, could lead
to a downgrade. Specifically, a downgrade could occur if EBITA
coverage of interest expense remains below 1.0 time or lease
adjusted debt/EBITDA remains above 6.0 times through 2013.
Factors that could result in an upgrade include sustained
improvement in credit metrics driven in part by sustainable
positive same store sales trends - particularly traffic, and
improved unit-level economics at the acquired units.
Quantitatively, a higher rating would require debt to EBITDA to
improve below 5.5 times and EBITA coverage of gross interest of
over 1.5 while maintaining adequate liquidity.
The principal methodology used in rating Carrols Corporation was
the Global Restaurants Industry Methodology published in June
2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Carrols Restaurant Group, Inc., through its indirect operating
subsidiary, Carrols LLC, owns and operates 297 Burger King
restaurants through franchise agreements. The company is in the
process of acquiring 278 units from Burger King Corporation. Pro
forma for the acquisition, revenue for the year ended
December 31, 2012 was about $640 million
CATASYS INC: Incurs $3.4 Million Net Loss in First Quarter
----------------------------------------------------------
Catasys, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $3.37 million on $93,000 of total revenues for the three months
ended March 31, 2012, compared with a net loss of $1.95 million on
$87,000 of total revenues for the same period during the prior
year.
The Company reported a net loss of $8.12 million in 2011, compared
with a net loss of $19.99 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$2.63 million in total assets, $9.57 million in total liabilities,
and a $6.93 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/LFsFAD
About Hythiam, Inc.
Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys,
Inc., is a healthcare services management company, providing
through its Catasys(R) subsidiary specialized behavioral health
management services for substance abuse to health plans.
For 2011, Rose, Snyder & Jacobs LLP, in Encino, California,
expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred significant operating losses and negative
cash flows from operations during the year ended Dec. 31, 2011.
Bankruptcy Warning
As of March 28, 2012, the Company had a balance of approximately
$95,000 cash on hand. The Company had working capital deficit of
approximately $2.2 million at Dec. 31, 2011, and has continued to
deplete its cash position subsequent to Dec. 31, 2011. The
Company has incurred significant net losses and negative operating
cash flows since its inception. The Company could continue to
incur negative cash flows and net losses for the next twelve
months.
The Company's current cash burn rate is approximately $450,000 per
month, excluding non-current accrued liability payments. The
Company expects its current cash resources to cover expenses into
April 2012, however delays in cash collections, revenue, or
unforeseen expenditures could impact this estimate. The Company
will need to immediately obtain additional capital and there is no
assurance that additional capital can be raised in an amount which
is sufficient for the Company or on terms favorable to its
stockholders, if at all. If the Company does not immediately
obtain additional capital, there is a significant doubt as to
whether it can continue to operate as a going concern and the
Company will need to curtail or cease operations or seek
bankruptcy relief.
CDC CORP: Equity Panel Balks at China.com's Amended Plan Outline
----------------------------------------------------------------
BankruptcyData.com reports that CDC's official committee of equity
security holders filed with the U.S. Bankruptcy Court an objection
to China.com's First Amended Disclosure Statement for it First
Amended Chapter 11 Plan of Reorganization.
The committee asserts, "Instead of a beneficial interest in a
liquidation trust as proposed under the Joint Plan, under the
China.com Plan Equity Holders will be given an option to receive
either (a) a pro rata distribution of shares in the Reorganized
Debtor, or (b) to exchange such shares in the Reorganized Debtor
for 'a portion of the Cash Election Software Distribution
corresponding to the value of the Reorganized Debtor Shares being
so exchanged' . . . The Disclosure Statement does not explain how
the 'value' of the Reorganized Debtor Shares being so exchanged
will be determined." CDC also filed an objection to the Disclosure
Statement, explaining, " . . . the First Amended China.com
Disclosure Statement does not contain adequate information within
the meaning of Section 1125 of the Bankruptcy Code."
About CDC Corp.
Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS). CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing. The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.
CDC Corp., doing business as Chinadotcom, filed a Chapter 11
petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011.
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA,
in Atlanta, Georgia, serves as counsel. Moelis & Company LLC
serves as its financial advisor and investment banker. Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer. The Debtor estimated assets and debts at US$100 million
to US$500 million as of the Chapter 11 filing.
The Official Committee of Equity Security Holders of CDC Corp. is
represented by Troutman Sanders. The Committee tapped Morgan
Joseph TriArtisan LLC as its financial advisor.
The stock of CDC Software Corp. was sold for $249.8 million to an
affiliate of Vista Equity Holdings.
The Debtor's Plan provides that in addition to paying creditors in
full and distributing the excess to shareholders, the plan would
allow filing lawsuits against insiders who CDC claims were behind
the motion to dismiss. China.com filed a competing reorganization
plan. CDC interprets the plan as giving releases of claims that
CDC's plan would prosecute instead.
CF2 LLC: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: CF2, L.L.C.
2700 S. Woodlands Village Boulevard
Flagstaff, AZ 86001
Bankruptcy Case No.: 12-10796
Chapter 11 Petition Date: May 16, 2012
Court: U.S. Bankruptcy Court
District of Arizona (Phoenix)
Judge: Redfield T. Baum, Sr.
Debtor's Counsel: Jerry L. Cochran, Esq.
COCHRAN LAW FIRM, P.C.
2929 E. Camelback Road, Suite 118
Phoenix, AZ 85016
Tel: (602) 952-5300
Fax: (602) 952-7010
E-mail: jcochran@cochranlawfirmpc.com
Scheduled Assets: $1,700,000
Scheduled Liabilities: $4,328,001
A copy of the Company's list of its three largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/azb12-10796.pdf
The petition was signed by George F. Tibsherany, member.
CGO ENTERPRISE: Watchdog Seeks Dismissal of Pot Grower's Case
-------------------------------------------------------------
Katy Stech at Dow Jones' DBR Small Cap reports that a federal
court watchdog wants a judge to dismiss the Chapter 11 bankruptcy
case of CGO Enterprise LLC, arguing that the company shouldn't be
allowed to reorganize its finances in a way that would allow it to
continue profiting from criminal activity.
CGO Enterprise LLC is a Colorado medical marijuana grower.
CGO filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-
19010) on May 1, 2012.
Assets as of the bankruptcy filing include $130,000 worth of
unharvested marijuana leaves. CGO said it owes about $800,000 to
its landlord, which has moved to evict it for nonpayment.
CHAI-NA-TA CORP: Shareholders Approve Voluntary Liquidation
-----------------------------------------------------------
Chai-Na-Ta Corp. announced that at its annual and special meeting
of shareholders held on May 11, 2012, the shareholders approved a
special resolution providing for (A) the voluntary liquidation of
the Corporation pursuant to section 211 of the Canada Business
Corporations Act, through the distribution of its remaining assets
to its shareholders, after providing for outstanding liabilities,
contingencies and costs of the liquidation, (B) the appointment of
a liquidator if and when deemed appropriate by the board of
directors of the Corporation, and Copyright the ultimate
dissolution of the Corporation in the future once all of the
liquidation steps have been completed.
Headquartered in Richmond, Canada, Chai-Na-Ta Corp., together with
its subsidiaries, farms, processes, and distributes North American
ginseng as bulk root. It sells its products directly to brokers
and distributors primarily in China, Hong Kong, and southeast
Asia.
CHINA DU KANG: Reports $365,000 Net Income in First Quarter
-----------------------------------------------------------
China Du Kang Co., Ltd., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $365,386 on $614,377 of sales of liquor for the
three months ended March 31, 2012, compared with a net loss of
$200,428 on $427,679 of sales of liquor for the same period during
the prior year.
The Company reported a net loss of $696,001 in 2011, compared with
a net loss of $897,194 in 2010.
The Company's balance sheet at March 31, 2012, showed $15.84
million in total assets, $5.94 million in total liabilities and
$9.89 million in total shareholders' equity.
A copy of the Form 10-Q is available for free at:'
http://is.gd/8bOE31
About China Du Kang
Headquartered in Xi'an, Shaanxi, in the PRC, China Du Kang Co.,
Ltd., was incorporated as U.S. Power Systems, Inc., in the State
of Nevada on Jan. 16, 1987. The Company is principally engaged in
the business of production and distribution of distilled spirit
with the brand name of "Baishui Dukang". The Company also
licenses the brand name to other liquor manufactures and liquor
stores.
After auditing the 2011 financial statements, Keith K. Zhen, CPA,
in Brooklyn, New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the company incurred an operating loss for
each of the years in the two-year period ended Dec. 31, 2011, and
as of Dec. 31, 2011, had an accumulated deficit.
CHINA GREEN: Delays Form 10-Q for First Quarter
-----------------------------------------------
China Green Creative, Inc., notified the U.S. Securities and
Exchange Commission that it will be delayed in filing its
quarterly report for the period ended March 31, 2012. The Company
did not obtain all the necessary information prior to the filing
date, the attorney and accountant could not complete the required
legal information and financial statements and management could
not complete the Management's Discussion and Analysis of such
financial statements prior to May 15, 2012.
About China Green
China Green Creative, Inc., located in Shenzhen, Guangdong
Province, People's Republic of China, is principally engaged in
the distribution of consumer goods and electronic products in the
PRC.
After auditing the 2011 results, Madsen & Associates CPA's, Inc.,
in Salt Lake City, Utah, expressed substantial doubt about China
Green Creative's ability to continue as a going concern. The
independent auditor noted that the Company does not have the
necessary working capital to service its debt and for its planned
activity.
The Company reported a net loss of $344,901 on $1.93 million of
revenues for 2011, compared with a net loss of $3.35 million on
$2.78 million of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$5.59 million in total assets, $8.15 million in total liabilities,
and a stockholders' deficit of $2.56 million.
CHINA TEL GROUP: Has $7 Million Financing Contract with ZTE
-----------------------------------------------------------
VelaTel Global Communications, formerly known as China Tel
Group Inc., has finalized its financing contracts with ZTE
Corporation to increase its equipment and software order to deploy
and expand wireless networks in Montenegro and Croatia. The
announcement follows VelaTel's successful closing of its
acquisition of Herlong Investments Limited and its operating
subsidiaries, Novi-Net and Montenegro Connect, which allows
VelaTel to report the financial results of these subsidiaries on
its consolidated financial statements.
"VelaTel will raise the bar again for mobile broadband services by
providing networks with greater speeds and capacity than any other
network in those regions," said George Alvarez, VelaTel's Chairman
and CEO. "Our leadership in launching wireless broadband networks
will soon benefit the citizens of Croatia and Montenegro, as well
as our shareholders."
The signed contracts with ZTE includes improved pricing compared
to an earlier preliminary order that covered only a portion of the
total equipment required, based on now completed engineering. The
revised orders will now deliver all the necessary equipment and
software for Phase 1 deployments of both networks.
"This is another example that demonstrates the importance of our
ZTE relationship," commented Colin Tay, President of VelaTel. "We
are able to leverage our exclusive financing packages in order to
dramatically minimize our costs, while having access to the
industry's most compelling and advanced equipment. Although the
price negotiations for the final engineered order took longer than
expected, the cost savings more than justified the extra time."
The 1,800 subscriber existing network base in Croatia (Novi-Net)
covers the city of Cakovec and its surrounding area (population
25,000), and will not be expanded during Phase 1 of VelaTel?s
deployment. Instead, VelaTel will target densely populated areas,
including the capital city of Zagreb with a population of over 1
million, where potential business and government customers are
concentrated. Simultaneously, VelaTel will be deploying a
wireless broadband network in Montenegro, which is a "greenfield"
operation. Phase 1 will similarly focus on urban areas, including
the capital city of Podgorica (population 150,000), and the
commercial and government customers concentrated in those urban
areas.
"With these critical contracts now in place, we can focus on the
expansion of our network, which is needed to satisfy the enormous
appetites of our wireless subscribers," said Novi-Net's Founder
and CEO Karlo Vlah. "We are very excited to be working with
VelaTel and begin seeing our subscriber numbers increase
exponentially."
The aggregate price of the goods covered by the three contracts
and the purchase order associated with each contract is
$7,001,870.
About China Tel
Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/--
provides high speed wireless broadband and telecommunications
infrastructure engineering and construction services. Through its
controlled subsidiaries, the Company provides fixed telephony,
conventional long distance, high-speed wireless broadband and
telecommunications infrastructure engineering and construction
services. ChinaTel is presently building, operating and deploying
networks in Asia and South America: a 3.5GHz wireless broadband
system in 29 cities across the People's Republic of China with and
for CECT-Chinacomm Communications Co., Ltd., a PRC company that
holds a license to build the high speed wireless broadband system;
and a 2.5GHz wireless broadband system in cities across Peru with
and for Perusat, S.A., a Peruvian company that holds a license to
build high speed wireless broadband systems.
The Company, in the untimely filed Form 10-K, reported a net loss
of $21.79 in 2011, compared with a net loss of $66.62 million in
2010.
The Company's balance sheet at Dec. 31, 2011, showed $12.83
million in total assets, $22.76 million in total liabilities and a
$9.92 million total stockholders' deficiency.
After auditing the 2011 results, Kabani & Company, Inc., in Los
Angeles, California, expressed substantial doubt as to the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred a net loss for the
year ended Dec. 31, 2011, cumulative losses of $253,660,984 since
inception, a negative working capital of $16,386,204 and a
stockholders' deficiency of $9,928,838.
CICERO INC: Delays Form 10-Q for First Quarter
----------------------------------------------
Cicero Inc. notified the U.S. Securities and Exchange Commission
that it will be late in filing its quarterly report on Form 10-Q
for the period ended March 31, 2012. The Company said the
compilation, verification and review by its independent auditors
of the information required to be presented in the Form 10-Q has
required additional time rendering timely filing of the Form 10-Q
impracticable without undue hardship and expense to the Company.
About Cicero Inc.
Cary, N.C.-based Cicero, Inc., provides business integration
software solutions and also provides technical support, training
and consulting services as part of its commitment to providing
customers with industry-leading solutions.
The Company focuses on the customer experience management market
with emphasis on desktop integration and business process
automation with its Cicero XM(TM) products. Cicero XM enables the
flow of data between different applications, regardless of the
type and source of the application, eliminating redundant entry
and costly mistakes.
The Company has extended the maturity dates of several debt
obligations that were due in 2011 to 2012, to assist with
liquidity and may attempt to extend these maturities again if
necessary. Despite the recent additions of several new clients,
the Company continues to struggle to gain additional sources of
liquidity on terms that are acceptable to the Company.
The Company reported a net loss of $2.97 million in 2011,
compared with a net loss of $459,000 in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $5.04 million
in total assets, $14.66 million in total liabilities, and a
$9.62 million total stockholders' deficit.
CIRCUS AND ELDORADO: Silver Legacy Resort Casino in Bankruptcy
--------------------------------------------------------------
Steve Green at Vegas Inc. reports The Silver Legacy Resort Casino
in Reno, half owned by MGM Resorts International, voluntarily
filed for Chapter 11 bankruptcy reorganization in
U.S. Bankruptcy Court for Nevada.
In a statement, Silver Legacy said the bankruptcy wouldn't
affect its operations.
The Company did not make the required principal payment of its
10.125% mortgage notes on the maturity date of March 1, 2012. The
company also elected not to make the scheduled interest payment.
As a result, an aggregate of $142,800,000 principal amount of
Notes were outstanding and accrued interest of $7,229,250 on the
Notes, as of March 1, 2012, is due and payable.
The casino operator had been in talks with noteholders about
restructuring the debt. The Company faced a May 14, 2012 deadline
to finalize a $142.8 million debt restructuring agreement.
The report relates one plan on the table called for noteholders to
receive $100 million in cash for their notes to be funded by a new
$70 million first-lien loan, $15 million in cash from the property
partners and $15 million in cash from the property's cash
balances. The property also would issue $27.5 million in new
second-lien notes under this plan, Silver Legacy said in a court
filing.
The report further relates Silver Legacy said it has been cash-
flow positive and hopes to quickly reorganize thanks to the
support of a restructuring agreement by Capital Research and
Management Co., the holder of a "substantial portion" of its debt.
The report notes MGM Resorts International had written off its
investment in Silver Legacy to zero in the fourth quarter of 2011,
taking a $23 million charge against earnings at the time, and it
is not liable for the notes. The $360 million Silver Legacy
opened in July 1995 in downtown Reno. It has 1,711 hotel rooms,
six restaurants and a casino with 1,399 slot machines and 63 table
games.
The report adds the other half of Silver Legacy is owned by
Eldorado LLC, owner of the nearby Eldorado Hotel & Casino.
Silver Legacy Resort Casino operates a luxury hotel in Reno,
Nevada.
About Circus and Eldorado
Reno, Nevada-based Circus and Eldorado Joint Venture, doing
business as Silver Legacy Resort Casino, owns and operates the
Silver Legacy Resort Casino, a themed hotel-casino and
entertainment complex in Reno, Nevada. Silver Legacy Resort
Casino is a 35-story, 1,700-room hotel that opened in 1995 at a
cost of $350 million.
CEJV is a joint venture of affiliates of MGM Resorts International
and Eldorado Resorts LLC.
CEJV reported a net loss of $4.0 million on $95.6 million of
revenues for nine months ended Sept. 30, 2011, compared with a net
loss of $3.7 million on $95.1 million of revenues for the same
period last year.
CEJV's balance sheet at Sept. 30, 2011, showed $267.8 million in
total assets, $165.4 million in total liabilities, and partners'
equity of $102.4 million.
COMMONWEALTH BIOTECH: Incurs $110,000 Net Loss in 1st Quarter
-------------------------------------------------------------
Commonwealth Biotechnologies, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $109,577 on $0 of revenue for the three
months ended March 31, 2012, compared with a net loss of $80,560
on $0 of revenue for the same period during the prior year.
The Company reported a net loss of $227,888 on $0 of revenue in
2011, compared with a net loss of $1 million on $0 of revenue in
2010.
The Company's balance sheet at March 31, 2012, showed $1.30
million in total assets, $1.78 million in total liabilities and a
$478,727 total stockholders' deficit.
For 2011, Witt Mares, PLC, in Richmond, Virginia, noted that the
Company's recurring losses from operations and inability to
generate sufficient cash flow to meet its obligations and sustain
its operations raise substantial doubt about its ability to
continue as a going concern.
A copy of the Form 10-Q is available for free at:
http://is.gd/7ZsrXb
About Commonwealth Biotechnologies
Based in Midlothian, Virginia, Commonwealth Biotechnologies, Inc.,
was a specialized life sciences outsourcing business that offered
cutting-edge expertise and a complete array of Peptide-based
discovery chemistry and biology products and services through its
wholly owned subsidiary Mimotopes Pty Limited.
Commonwealth Biotechnologies Inc. filed for Chapter 11 bankruptcy
protection (Bankr. E.D. Va. Case No. 11-30381) on Jan. 20, 2011.
Judge Kevin R. Huennekens presides over the case. Paula S. Beran,
Esq., at Tavenner & Beran, PLC, represents the Debtor. The Debtor
estimated both assets and debts of between $1 million and
$10 million.
On April 7, 2011, the Bankruptcy Court approved the private sale
of Mimotopes for a gross sales price of $850,000. The sale closed
on April 29, 2011. Mimotopes was deconsolidated during the second
quarter of 2011.
COMMUNICATION INTELLIGENCE: Incurs $819,000 in First Quarter
------------------------------------------------------------
Communication Intelligence Corporation filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $819,000 on $667,000 of total
revenue for the three months ended March 31, 2012, compared with a
net loss of $1.32 million on $277,000 of total revenue for the
same period a year ago.
The Company reported a net loss of $4.50 million for 2011,
compared with a net loss of $4.16 million for 2010.
The Company's balance sheet at March 31, 2012, showed $2.59
million in total assets, $3.31 million in total liabilities and a
$713,000 total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/cIVMIa
About Communication Intelligence
Redwood Shores, California-based Communication Intelligence
Corporation is a supplier of electronic signature products and the
recognized leader in biometric signature verification.
In its audit report accompanying the financial statements for
2011, PMB Helin Donovan, LLP, in San Francisco, Calif.,
expressed substantial doubt about Communication Intelligence's
ability to continue as a going concern. The independent auditors
noted that of the Company's significant recurring losses and
accumulated deficit.
COMMUNITY SHORES: Incurs $64,000 Net Loss in First Quarter
----------------------------------------------------------
Community Shores Bank Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $64,101 on $2.33 million of total
interest income for the three months ended March 31, 2012,
compared with a net loss of $734,219 on $2.79 million of total
interest income for the same period a year ago.
The Company reported a net loss of $2.46 million in 2011, compared
with a net loss of $8.88 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$219.42 million in total assets, $220.94 million in total
liabilities, and a $1.52 million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/InR37p
About Community Shores
Muskegon, Mich.-based Community Shores Bank Corporation, organized
in 1998, is a Michigan corporation and a bank holding company.
The Company owns all of the common stock of Community Shores Bank.
The Bank was organized and commenced operations in January 1999 as
a Michigan chartered bank with depository accounts insured by the
FDIC to the extent permitted by law. The Bank provides a full
range of commercial and consumer banking services primarily in the
communities of Muskegon County and Northern Ottawa County.
After auditing the 2011 results, Crowe Horwath LLP, in Grand
Rapids, Michigan, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant recurring
operating losses, is in default of its notes payable
collateralized by the stock of its wholly-owned bank subsidiary,
and the subsidiary bank is undercapitalized and is not in
compliance with revised minimum regulatory capital requirements
under a formal regulatory agreement which has imposed limitations
on certain operations.
COMPETITIVE TECHNOLOGIES: Delays Form 10-Q for First Quarter
------------------------------------------------------------
Competitive Technologies, Inc., has experienced delays in
completing its financial statements for the fiscal quarter ended
March 31, 2012. As a result, the Company is delayed in filing its
Form 10-Q for the quarter then ended.
About Competitive Technologies
Fairfield, Conn.-based Competitive Technologies, Inc. (OTC QX:
CTTC) -- http://www.competitivetech.net/-- was established in
1968. The Company provides distribution, patent and technology
transfer, sales and licensing services focused on the needs of its
customers and matching those requirements with commercially viable
product or technology solutions. Sales of the Company's
Calmare(R) pain therapy medical device continue to be the major
source of revenue for the Company.
The Company's balance sheet at Sept. 30, 2011, showed
$5.95 million in total assets, $6.36 million in total liabilities,
all current, and a $409,428 total shareholders' deficit.
The Company reported a net loss of $3.59 million in 2011. The
Company reported a net loss of $2.40 million on $163,993 of
product sales for the five months ended Dec. 31, 2010.
The Company's balance sheet at Dec. 31, 2011, showed $5.14 million
in total assets, $6.77 million in total liabilities, all current,
and a $1.62 million total shareholders' deficit.
After auditing the 2011 results, Mayer Hoffman McCann CPAs, in New
York, expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has incurred operating losses since fiscal year 2006.
COMSTOCK MINING: Incurs $7.3 Million Net Loss in 1st Quarter
------------------------------------------------------------
Comstock Mining Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $7.33 million on $111,722 of hotel revenue for the three months
ended March 31, 2012, compared with a net loss of $2.38 million on
$0 of hotel revenue for the same period a year ago.
The Company reported a net loss of $11.61 million in 2011,
compared with a net loss of $60.32 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$40.97 million in total assets, $14.64 million in total
liabilities, and $26.33 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/fAY7Vj
About Comstock Mining
Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based,
gold and silver mining company with extensive, contiguous property
in the historic Comstock district. The Company began acquiring
properties in the Comstock in 2003. Since then, the Company has
consolidated a substantial portion of the Comstock district,
secured permits, built an infrastructure and brought the
exploration project into test mining production. The Company
continues acquiring additional properties in the Comstock
district, expanding its footprint and creating opportunities for
exploration and mining. The goal of the Company's strategic plan
is to deliver stockholder value by validating qualified resources
(measured and indicated) and reserves (probable and proven) of
3,250,000 gold equivalent ounces by 2013, and commencing
commercial mining and processing operations by 2011, with annual
production rates of 20,000 gold equivalent ounces.
CONCREATE USL: Bridge to Resume Work Under New Contractor
---------------------------------------------------------
Brendan Wedley at Peterborough Examiner reports that
Peterborough's $13.34-million restoration of the Hunter Street
Bridge over the Otonabee River in Ontario, Canada, could resume
under a new agreement after ConCreate USL Ltd. that won the
contract in 2010 couldn't pay its bills and went into receivership
in March.
The restoration project was about 85% complete when the company
went into receivership, Mayor Daryl Bennett said, according to
Peterborough Examiner.
The report notes that the city would enter into a new agreement
with Guarantee Company of North America -- the bonding company
that guaranteed the work under the original contract. The report
relates that the city and the bonding company would agree to hire
Horseshoe Hill Construction Inc. to complete the work under the
terms of the original contract.
The city required companies that bid on the original contract to
include a performance bond, which is like an insurance policy, in
their proposals, explained Blair Nelson, the city's design and
construction manager, the report notes.
Grant Thornton Ltd. is the receiver for ConCreate's assets.
CONTRACT RESEARCH: Judge Approves Sale to Creditors
---------------------------------------------------
U.S. Bankruptcy Judge Kevin J. Carey on Thursday approved the sale
of Cetero Research to its secured creditors in a stalking horse
deal worth approximately $80 million.
Peg Brickley at Dow Jones' DBR Small Cap reports that Freeport
Financial LLC got the nod Thursday to take drug investigator
Cetero Research out of Chapter 11 with a revamped balance sheet.
Jamie Santo at Bankruptcy Law360 relates that Judge Carey signed
off on the purchase agreement following a morning hearing. An
auction set for May 15 had been canceled when no qualified bids
apart from the stalking horse were presented by the May 11
deadline.
About Cetero
Contract Research Solutions Inc., doing business as Cetero, a
provider of early-phase clinical research services for
pharmaceutical and biotechnology firms, filed a Chapter 11
petition (Bankr. D. Del. Case No. 12-11004) on March 26, 2012.
Cetero's 19 affiliates also sought bankruptcy protection (Bankr.
D. Del. Case Nos. 12-11005 to 12-11023).
Cetero plans to sell the business, including their rights to
pursue avoidance actions, to first-lien secured lenders in
exchange for $50 million in debt, absent higher and better offers.
Cetero has filed a motion seeking approval of procedures that will
govern the bidding and auction. The first-lien lenders have
formed entities that will acquire the business -- CSRI Holdings
LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd,
as Canadian Purchasers. Together, they will serve as stalking
horse bidders and have offered to exchange $50 million in secured
debt and assume $30 million in liabilities to buy the assets.
First lien lenders are also providing a $15 million loan to
finance the Chapter 11 effort.
Assets are $205 million, with debt total $248 million. There is
$185 million in debt for borrowed money, including $116 million on
a first-lien term loan and revolving credit. The second-lien loan
is $25 million. Second-lien lenders have agreed to the sale.
Freeport Financial LLC serves as the sole lead arranger and
bookrunner, and as U.S. administrative agent and collateral agent
under the first lien facility. Bank of Montreal serves as the
Canadian agent. Freeport is also the agent under the second lien
facility.
Judge Kevin Gross oversees the case. Lawyers at Young Conaway
Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the
Debtors' counsel. Stikeman Elliott LLP serves as Canadian
counsel. Carl Marks Advisory Group LLC serves as restructuring
advisor. Epiq Bankruptcy Solutions serves as claims and notice
agent. The petitions were signed by Michael T. Murren, CFO.
The first lien lenders and the stalking horse buyers are
represented by Peter Knight, Esq., at Latham & Watkings, LLP; and
Wael Rostom, Esq., at McMillan LLP.
Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three
persons to the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Contract Research Solutions, Inc., et al.
CORD BLOOD: CEO Resigns; Form 10-Q for Q1 Delayed
-------------------------------------------------
Mathew Schissler resigned from his positions as Chairman, Chief
Executive Officer, Secretary, and as a Director of Cord Blood
America, Inc. As a result of his resignations, effective as of
May 15, 2012, Mr. Schissler was removed from all his officer and
director positions with all wholly owned subsidiaries of the
Company.
On May 15, 2012, the Board of Directors of the Company appointed
Joseph R. Vicente as Chairman and President of the Company. As a
result of this appointment, Mr. Vicente resigned from his
positions as Chief Operating Officer and Vice President.
Joseph R. Vicente joined Cord Blood America, Inc., as a director
of the Company in April 2004. Prior to his appointment as
Chairman and President of the Company, he also served as the
Company's Chief Operating Officer and Vice President. From July
2002 through October 2004, Mr. Vicente was an independent
consultant where he provided strategic consulting services to
organizations on acquisitions, operational practices and
efficiencies, and sales management. From July 1993 through April
2002, he was a Vice President at System One/TMP Worldwide, Inc.,
where he held various positions with profit and loss
responsibility. Mr. Vicente is a 1985 graduate of Bowling Green
State University with a B.S. in Marketing, and a 1992 graduate of
the University of Tampa with an MBA.
On May 15, 2012, the Board of Directors of the Company appointed
Stephen Morgan as its Vice President and Secretary. Mr. Morgan
also remains in his non-officer role as General Counsel.
Stephen Morgan has been General Counsel of the Company since
August 2010. Prior to his employment with the Company, Mr. Morgan
worked for law firms in Los Angeles, California, representing
clients in a broad range of transactional and litigation matters.
Mr. Morgan earned his Bachelor of Science degree from the
University of Minnesota in 1999, and his Juris Doctor from Loyola
Law School in Los Angeles, California in 2005.
Effective May 14, 2012, the Company and Pyrenees Consulting, LLC,
terminated their arrangement, and Pyrenees no longer provides
services for the Company.
Form 10-Q Filing Delayed
The Company a Form 12b-25 with the U.S. Securities and Exchange
Commission informing that the compilation, dissemination and
review of the information required to be presented in the Form
10-Q for the period ended March 31, 2012, has imposed time
constraints that have rendered timely filing of the Form 10-Q
impracticable without undue hardship and expense to the Company.
The Company undertakes the responsibility to file that report no
later than five days after its original prescribed due date.
About Cord Blood America
Based in Las Vegas, Nevada, Cord Blood America, Inc., is primarily
a holding company whose subsidiaries include Cord Partners, Inc.,
CorCell Co. Inc., CorCell Ltd.; CBA Professional Services, Inc.
D/B/A BodyCells, Inc.; CBA Properties, Inc.; and Career Channel
Inc, D/B/A Rainmakers International. Cord specializes in
providing private cord blood stem cell preservation services to
families. BodyCells is a developmental stage company and intends
to be in the business of collecting, processing and preserving
peripheral blood and adipose tissue stem cells allowing
individuals to privately preserve their stem cells for potential
future use in stem cell therapy. Properties was formed to hold
the corporate trademarks and other intellectual property of CBAI.
Rain specializes in creating direct response television and radio
advertising campaigns, including media placement and commercial
production.
Cord Blood reported a net loss attributable to the Company of
$5.97 million in 2011, compared with a net loss attributable
to the Company of $8.09 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $7.35 million
in total assets, $8.22 million in total liabilities and a $878,836
total stockholders' deficit.
For 2011, Rose, Snyder & Jacobs, LLP, in Encino, California,
expressed substantial doubt substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has sustained recurring operating losses,
continues to consume cash in operating activities, and has
insufficient working capital and an accumulated deficit at
Dec. 31, 2011.
COUGAR OIL: Secured Lender Stymies CCAA Case
--------------------------------------------
Hayley Kaplan at The Deal Pipeline reports that Cougar Oil and Gas
Canada Inc.'s stay under Canada's Companies' Creditors Arrangement
Act has ended after its secured lender placed it in receivership.
Peter Chisholm of Ernst & Young LLP, the company's former monitor
in the CCAA proceedings and receiver Canadian Western Bank put the
company into receivership on May 11, according to The Deal.
Therefore, the report relates that the receivership terminates the
debtor's CCAA proceedings.
The Deal notes that Mr. Chisholm said Ernst & Young has been
appointed as Cougar's receiver and will seek to auction off the
company's oil and gas assets. Advertisements to interested
parties will probably be sent out this week, and letters of intent
for the assets will likely be due in the next four weeks, Mr.
Chisholm said, the report relays.
The Deal discloses that prior to being placed under receivership,
Justice Adele Kent of the Court of Queen's Bench of Alberta
approved Cougar's request to increase its new-money debtor-in-
possession loan to C$2.15 million ($2.19 million) from C$1.7
million, Mr. Chisholm said.
The Deal recalls that Cougar said in an April 27 monitor's report
that it entered into an amended DIP agreement with DIP lender
Zentrum Energie Trust AG that would increase its DIP loan to
C$2.15 million.
None of the terms of the DIP changed from the original loan
facility except for the administrative expenses Cougar is required
to pay Zentrum, The Deal notes.
The report says that the DIP accrues 16% per annum interest in
addition to a 2% fee on each DIP advance. Cougar is responsible
for all Zentrum's administrative expenses associated with the DIP
up to C$75,000. Cougar was responsible for C$40,000 in expenses
under the original DIP facility, The Deal notes.
The DIP will be given to the debtor over a period of three months,
which began one day after the court approved it, The Deal
discloses.
The Deal notes Cougar is required to repay the DIP no later than
one year after it was approved, which means it will mature on
Feb. 23, 2013. Kent initially approved the company's DIP on
Feb. 23 before it increased the loan, The Deal relays.
The loan will be used to pay a C$1.29 million security deposit
that Canada's Energy Resources Conservation Board has against the
debtor, which will get Cougar's wells back in production, The Deal
says.
At the time of the April 27 monitor's report, Cougar had also
entered into an agreement to sell leases for four parcels of
undeveloped land in the Trout Lake region of Alberta to Zentrum
for C$50,000, The Deal adds
About Cougar Oil
Headquartered in Calgary, Canada, Cougar Oil and Gas Canada, Inc.,
formerly Ore-More Resources, Inc., was incorporated under the laws
of the Province of Alberta, Canada on June 20, 2007. The
Company's principal activity is in the exploration, development,
production and sale of oil and natural gas. The Company's main
operations are currently in the Alberta and British Columbia
provinces of Canada.
The Company reported a net loss of C$5.1 million on C$1.9 million
of oil & gas sales for the nine months ended Sept. 30, 2011,
compared with a net loss of C$1.2 million on C$2.5 million of
oil & gas sales for the same period in 2010.
The Company's balance sheet at Sept. 30, 2011, showed
C$14.2 million in total assets, C$14.3 million in total
liabilities, and a stockholders' deficit of C$120,184.
In February 2012, Cougar Oil requested and obtained an Order
from the Alberta Court of Queen's Bench providing creditor
protection under the Companies' Creditors Arrangement Act
(Canada). The CCAA filing was made after a purchaser defaulted on
a November 2011 agreement to acquire some of the Company's non-
core assets. Proceeds would have been used for deposit
requirements by the Energy Resources Conversation Board. The ERCB
ordered closing of wells and facilities of Cougar Oil due to te
failure to pay the deposit.
CREATIVE VISTAS: Incurs $72,700 Comprehensive Loss in Q1
--------------------------------------------------------
Creative Vistas, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a
comprehensive loss of $72,700 on $1.47 million of contract and
service revenue for the three months ended March 31, 2012,
compared with a comprehensive loss of $306,025 on $2.27 million of
contract and service revenue for the same period a year ago.
The Company's balance sheet at March 31, 2012, showed $3.64
million in total assets, $5.13 million in total liabilities and a
$1.49 million stockholders' deficiency.
A copy of the Form 10-Q is available for free at:
http://is.gd/5488u6
About Creative Vistas
Headquartered in Whitby, Ontario, Canada, Creative Vistas, Inc.,
provides security-related technologies and systems. The Company
also provides the deployment of broadband services to the
commercial and residential market. The Company primarily operates
through its subsidiaries AC Technical Systems Ltd. and Iview
Digital Video Solutions Inc., to provide integrated electronic
security-related technologies and systems.
In its audit report for the year ended Dec. 31, 2011 results,
Kingery & Crouse, P.A., in Tampa, Florida, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has suffered
recurring losses from continuing operations and has working
capital and stockholder deficiencies.
CUSTOM AUTO: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Custom Auto, LLC
325 N. Holmes
Idaho Falls, ID 83401
Bankruptcy Case No.: 12-40684
Chapter 11 Petition Date: May 16, 2012
Court: U.S. Bankruptcy Court
District of Idaho (Pocatello)
Debtor's Counsel: Robert J. Maynes, Esq.
MAYNES TAGGART, PLLC
P.O. Box 3005
Idaho Falls, ID 83403-3005
Tel: (208) 552-6442
E-mail: mayneslaw@hotmail.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
is available for free at http://bankrupt.com/misc/idb12-40684.pdf
The petition was signed by James Brendle, manager.
CYCLONE POWER: Delays Form 10-Q for First Quarter
-------------------------------------------------
Cyclone Power Technologies, Inc., was unable to file its quarterly
report on Form 10-Q for the period ended March 31, 2012, by the
prescribed date without unreasonable effort or expense because the
Company's financial review with its auditors is in process and has
not been completed. The Company believes that the quarterly
report will be completed within the five day extension period
provided under Rule 12b-25 of the Securities Exchange Act of 1934.
About Cyclone Power
Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink
Sheets: CYPW) is a clean-tech engineering company, whose business
is to develop, commercialize and license its patented Rankine
cycle engine technology for applications ranging from renewable
power generation to transportation. The Company is the successor
entity to the business of Cyclone Technologies LLLP, a limited
liability limited partnership formed in Florida in June 2004.
Cyclone Technologies LLLP was the original developer and
intellectual property holder of the Cyclone engine technology.
The Company reported a net loss of $23.70 million in 2011,
compared with a net loss of $2.02 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.09 million
in total assets, $3.67 million in total liabilities, and a
$2.58 million total stockholders' deficit.
In its audit report for the year ended Dec. 31, 2011 results,
Mallah Furman, in Fort Lauderdale, FL, noted that the Company's
dependence on outside financing, lack of sufficient working
capital, and recurring losses raises substantial doubt about its
ability to continue as a going concern.
DECISION INSIGHT: Credit Amendment No Impact on Moody's 'B2' CFR
----------------------------------------------------------------
Moody's Investors Service said that Decision Insight Information
Group (US) I, Inc.'s proposed amendment to its credit agreement is
a positive development but has no impact on the company's ratings
(B2 corporate family and Ba3 senior secured) or negative outlook.
Decision Insight Information Group (US) I, Inc., is a leading
supplier of property information and related solutions to the
financial services sector in the U.S., Canada, U.K. and Ireland.
The company was formed in January 2011 when TPG Capital, L.P.
acquire the Information Products division of MacDonald, Dettwiler
and Associates, Ltd.
DECOR PRODUCTS: Delays Form 10-Q for First Quarter
--------------------------------------------------
Decor Products International, Inc., informed the U.S. Securities
and Exchange Commission it could not complete the filing of its
quarterly report on Form 10-Q for the quarter ended March 31,
2012, due to a delay in obtaining and compiling information
required to be included in its Form 10-Q, which delay could not be
eliminated by Company without unreasonable effort and expense. In
accordance with Rule 12b-25 of the Securities Exchange Act of
1934, the Company will file its Form 10-Q no later than the fifth
calendar day following the prescribed due date.
About Decor Products
Decor Products International, Inc., through its subsidiaries,
mainly engages in the manufacture and sale of furniture decorative
paper and related products in the People's Republic of China. The
Company is headquartered in Chang'an Town, Dongguan, Guangdong
Province, between Shenzhen and Guangzhou in southern China.
The Company's balance sheet at Dec. 31, 2011, showed US$42.64
million in total assets, US$9.08 million in total liabilities and
US$33.55 million in total stockholders' equity.
For the year ended Dec. 31, 2011, HKCMCPA Company Limited, in Hong
Kong, China, noted that the Company has made default in repayment
of convertible notes and promissory notes that raise substantial
doubt about its ability to continue as a going concern.
DEEP DOWN: Incurs $300,000 Net Loss in First Quarter
----------------------------------------------------
Deep Down, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $300,000 on $4.87 million of revenue for the three months ended
March 31, 2012, compared with a net loss of $1.75 million on $6.28
million of revenue for the same period during the prior year.
The Company's balance sheet at March 31, 2012, showed $31.91
million in total assets, $7.35 million in total liabilities and
$24.56 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/svfBdi
About Deep Down
Houston, Tex.-based Deep Down, Inc. --
http://www.deepdowncorp.com/-- is an oilfield services company
specializing in complex deepwater and ultra-deepwater oil
production distribution system support services, serving the
worldwide offshore exploration and production industry.
During the Company's fiscal years ended Dec. 31, 2010 and 2009,
the Company has supplemented the financing of its capital needs
through a combination of debt and equity financings. Most
significant in this regard has been the Company's debt facility
the Company has maintained with Whitney National Bank. The
Company's loans outstanding under the Amended and Restated Credit
Agreement with Whitney become due on April 15, 2012. The Company
will need to raise additional debt or equity capital or
renegotiate the existing debt prior to such date. The Company is
currently in discussions with several lenders who have expressed
interest in refinancing its debt. The Company's plan is to
refinance the outstanding indebtedness under the Restated Credit
Agreement or seek terms with Whitney that will provide an
extension of such Restated Credit Agreement along with additional
liquidity. However, the Company cannot provide any assurance that
any financing will be available to it on acceptable terms or at
all. If the Company is unable to raise additional capital or
renegotiate its existing debt, this would have a material adverse
impact on the Company's business or would raise substantial doubt
about its ability to continue as a going concern. In addition, as
of Dec. 31, 2010, the Company was not in compliance with the
financial covenants under the Restated Credit Agreement. On
March 25, 2011 the Company obtained a waiver for these covenants
as of Dec. 31, 2010.
DEX MEDIA EAST: Bank Debt Trades at 46% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media East LLC
is a borrower traded in the secondary market at 54.00 cents-on-
the-dollar during the week ended Friday, May 18, 2012, a drop of
0.95 percentage points from the previous week according to data
compiled by Loan Pricing Corp. and reported in The Wall Street
Journal. The Company pays 250 basis points above LIBOR to borrow
under the facility. The bank loan matures on Oct. 24, 2014. The
loan is one of the biggest gainers and losers among 116 widely
quoted syndicated loans with five or more bids in secondary
trading for the week ended Friday.
About R.H. Donnelley & Dex Media East
Dex One, headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex
Media East LLC, Dex Media West LLC and Dex Media Inc., filed for
Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09-
11833 through 09-11852). They emerged from bankruptcy on Jan. 29,
2010. On the Effective Date and in connection with its emergence
from Chapter 11, RHD was renamed Dex One Corporation.
Dex One reported a net loss of $518.96 million in 2011 compared
with a net loss of $923.59 million for the eleven months ended
Dec. 31, 2010.
* * *
As reported in the April 2, 2012 edition of the TCR, Moody's
Investors Service has downgraded the corporate family rating (CFR)
for Dex One Corporation's to Caa3 from B3 based on Moody's view
that a debt restructuring is inevitable. Moody's has also changed
Dex's Probability of Default Rating (PDR) to Ca/LD from B3
following the company's purchase of about $142 million of par
value bank debt for about $70 million in cash. The Caa3 rating
also reflects Moody's view that additional exchanges at a discount
are likely in the future since the company amended its bank
covenants to make it possible to repurchase additional bank debt
on the open market through the end of 2013.
As reported by the TCR on April 4, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Cary, N.C.-based
Dex One Corp. and related entities to 'CCC' from 'SD' (selective
default). "The upgrade reflects our assessment of the company's
credit profile after the completion of the subpar repurchase
transaction in light of upcoming maturities, future subpar
repurchases, and our expectation of a continued week operating
outlook," explained Standard & Poor's credit analyst Chris
Valentine.
DIALOGIC INC: Incurs $14.7 Million Net Loss in First Quarter
------------------------------------------------------------
Dialogic Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common shareholders of $14.78 million on $41.10
million of total revenue for the three months ended March 31,
2012, compared with a net loss attributable to common shareholders
of $21.27 million on $44.86 million of total revenue for the same
period during the prior year.
The Company reported a net loss of $54.81 million in 2011,
compared with a net loss of $46.71 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$155.66 million in total assets, $185.24 million in total
liabilities, and a $29.58 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/gSCg1D
About Dialogic
Milpitas, Calif.-based Dialogic Inc. provides communications
platforms and technology that enable developers and service
providers to build and deploy innovative applications without
concern for the complexities of the communication medium or
network.
Bankruptcy Warning
The Company said in its 2011 annual report that in the event of an
acceleration of the Company's obligations under the Term Loan
Agreement or Revolving Credit Agreement and its failure to pay the
amounts that would then become due, the Revolving Credit Lender or
Term Lenders could seek to foreclose on the Company's assets. As
a result of this, or if the Company's stockholders do not approve
the Private Placement and the Notes become due and payable, the
Company would likely need to seek protection under the provisions
of the U.S. Bankruptcy Code or the Company's affiliates might be
required to seek protection under the provisions of applicable
bankruptcy codes. In that event, the Company could seek to
reorganize its business, or the Company or a trustee appointed by
the court could be required to liquidate the Company's assets.
DIPPIN' DOTS: Fischer Enterprises Completes Acquisition
-------------------------------------------------------
Dippin' Dots, LLC has finalized its acquisition of Dippin' Dots,
Inc, the Kentucky-based manufacturer of the popular flash-frozen
ice cream. The acquisition closed after the U.S. Bankruptcy Court
in Louisville, Kentucky approved the purchase earlier this month.
As reported by the TCR last month, the Debtor has received
approval to sell the business to an entity affiliated with
investment firm Fischer Enterprises LLC for $12.67 million. In
the cash transaction, the affiliate -- Dippin' Dots LLC --
would assume ownership of the cash, accounts, inventory, real
estate, brand rights, intellectual property and more to bring
Dippin' Dots Inc. out of Chapter 11,
"The acquisition process went smoothly," Scott Fischer, president
of Dippin' Dots, LLC, said. "Dippin' Dots is an outstanding
brand, and thanks to the continued dedication of our Dippin' Dots
employees, we are in a unique position to reconstruct the business
model of one of the most recognizable brands in the retail market
and to realize growth on an international scale. We have set
internal milestones for substantial growth within the first year.
Presently, there are more than 1,600 Dippin' Dots locations
worldwide. By the close of 2012, the company plans to raise that
number to 2,000."
Dippin' Dots, LLC, will maintain its headquarters in Paducah,
Kentucky, where approximately 165 people are employed at their
production facility. The company sells the ice cream to theme
parks, concert and sports venues and to a network of over 125
franchisees nationwide. Dippin' Dots also sells internationally
to customers and licensees in Canada, Europe, South Korea, Brazil,
Japan and Australia.
Dippin' Dots Founder and CEO Curt Jones commented on the company's
new ownership. "When I had the idea for Dippin' Dots, I knew we
had something special, and we saw a lot of early success after
starting the company in 1988. Although recent financial
limitations have curtailed the company's growth, the new ownership
has brought with them a dedication to exploring new opportunities
with us, while maximizing profitability. Their commitment to our
concept, our employees, and to the brand's growth at national and
international levels, speaks well for the future of Dippin' Dots."
"Dippin' Dots has a legacy it can be proud of, a legacy supported
by its impressive popularity among consumers," said Fischer. "My
job is to make sure we take a focused approach to elevating the
business and delivering this exceptional product to consumers
worldwide. To that end, we have acquired the Dippin' Dots
franchising business and a portion of the international business
to complement our acquisition of Dippin' Dots, Inc. By doing so,
we have assembled a complete package with which we can move
forward and grow. We look forward to reinvigorating the brand and
introducing new products to the market."
Harpeth Capital served as investment banker to Dippin' Dots, Frost
Brown Todd served as legal counsel to Dippin' Dots and McAfee &
Taft served as legal advisor to the buyer. Greg Charleston, from
the financial consulting firm of Conway MacKenzie, served as Chief
Restructuring Officer of Dippin' Dots throughout the sale process.
About Dippin' Dots
Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc.
manufactures quirky and colorful ice cream beads, which are flash
frozen using liquid nitrogen. It owns a 120,000-square-foot plant
in Kentucky that can produce more than 25,000 gallons of frozen
dots a day. It has about 140 Dippin' Dots retail locations, which
are mostly controlled by franchisees, and agreements with 9,952
small vendors who sell the ice cream at fairs, festivals and
sports games. Dippin' Dots isn't sold in grocery stores because
of its extreme cooling requirements.
Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No.
11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H.
Fulton presides over the case. Farmer & Wright, PLLC, represents
the Debtor as Chapter 11 counsel. The Debtor disclosed
$20,233,130 in assets and up to $20,233,130 in debts. The
petition was signed by Curt Jones, president.
Regions Bank, the Debtor's secured lender, is represented by Brian
H. Meldrum, Esq., at Stites & Harbison PLLC.
In February 2012, Regions Bank filed a motion seeking appointment
of a Chapter 11 trustee. After talks with the Debtor, Regions
consented to having a chief restructuring officer. Regions wanted
a trustee in part based on allegations that the company's chief
executive fraudulently transferred his ownership of a franchising
affiliate to prevent the bank from attaching the affiliate in
satisfaction of debt on a guarantee.
DRINKS AMERICAS: Douglas Cole Elected to Board of Directors
-----------------------------------------------------------
Douglas D. Cole, age 57, was elected to the board of directors of
Drinks Americas Holdings, Ltd., on May 15, 2012. Since September
2006, Mr. Cole worked with Objective Equity LLC, a boutique
Investment Bank based in New York. Mr. Cole focuses most of his
time on initial financing, corporate structure and M&A. From
February 2003 to February 2006, Mr. Cole served as the Executive
Vice Chairman, Chief Executive Officer and President of TWL
Corporation (TWLP.OB), now based in Carrollton, Texas. TWL
Corporation is a provider of integrated learning solutions for
compliance, safety, emergency preparedness, continuing education
and skill development in the workplace. During his tenure at TWL
Corporation, Mr. Cole lead the acquisitions of similar companies
in Australia, Norway, South Africa and the US, including the
acquisition of Primedia Workplace Learning. Mr. Cole also serves
on the board of directors for Longwei Petroleum Investment Holding
Limited (NYSE Amex: LPH). Mr. Cole received a B.A. from
University of California Berkeley in 1978.
There is no family relationship between Mr. Cole and any other
executive officer or director of the Company. In addition, Mr.
Cole has not been involved in any transaction with the Company
that would require disclosure under Item 404(a) of the Regulation
S-K.
About Drinks Americas
Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. --
http://www.drinksamericas.com/-- through its majority-owned
subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T.
Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and
markets unique premium wine and spirits and alcoholic beverages
associated with icon entertainers, celebrities and destinations,
to beverage wholesalers throughout the United States.
The Company reported a net loss of $4.58 million on $497,453 of
net sales for the year ended April 30, 2011, compared with a net
loss of $5.61 million on $890,380 of net sales during the prior
year.
Bernstein & Pinchuk, in New York, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company has incurred
significant losses from operations since its inception and has a
working capital deficiency.
The Company's balance sheet at Jan. 31, 2012, showed $6.74 million
in total assets, $4.39 million in total liabilities, and
$2.35 million in total stockholders' equity.
DUTCH GOLD: Delays Form 10-Q for First Quarter
----------------------------------------------
Dutch Gold Resources, Inc., was unable to compile the necessary
financial information required to prepare a complete filing of its
quarterly report for the period ended March 31, 2012. Thus, the
Company was unable to file the periodic report in a timely manner
without unreasonable effort or expense. The Company expects to
file within the extension period.
About Dutch Gold
Based in Atlanta, Ga., Dutch Gold Resources, Inc. (OTC: DGRI)
-- http://www.dutchgoldresources.com/-- is a junior gold miner
focused on developing its existing mining properties in North
America and acquiring and developing new mines that can enter into
production in 12 to 24 months.
The Company reported a net loss of $4.58 million on $0 of sales in
2011, compared with a net loss of $3.69 million on $0 of revenue
in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.64 million
in total assets, $7.30 million in total liabilities and a $4.65
million total stockholders' deficit.
After auditing the 2011 results, Hancock Askew & Co., LLP, in
Norcross, Georgia, noted that the Company has limited liquidity
and has incurred recurring losses from operations and other
conditions exist which raise substantial doubt about the Company's
ability to continue as a going concern.
EMPIRE RESORTS: Incurs $118,000 Net Loss in First Quarter
---------------------------------------------------------
Empire Resorts, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
applicable to common shares of $118,000 on $17.28 million of net
revenues for the three months ended March 31, 2012, compared with
a net loss applicable to common shares of $946,000 on $14.91
million of net revenues for the same period during the prior year.
The Company reported a net loss of $24,000 in 2011, compared with
a net loss of $17.57 million in 2010.
The Company's balance sheet at March 31, 2012, showed $50.38
million in total assets, $25.05 million in total liabilities and
$25.33 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/cBHGTa
About Empire Resorts
Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY)
-- http://www.empireresorts.com/-- owns and operates Monticello
Casino & Raceway, a video gaming machine and harness racing track
and casino located in Monticello, New York, 90 miles northwest of
New York City.
ENERGY CONVERSION: Fires Two Top Executives
-------------------------------------------
Karl Henkel at Detroit News reports Energy Conversion Devices Inc.
fired two of its top executives. The report, citing documents
filed with the U.S. Securities & Exchange Commission, says Julian
Hawkins, president and CEO, and Joseph P. Conroy, executive vice
president of operations, were both fired last week. Mr. Hawkins
also resigned from the board Wednesday. Both are entitled to
certain severance benefits, the filing stated.
The report relates Mr. Hawkins, who was hired in 2011, received a
$440,000 salary and a $300,000 bonus at the time. He was set to
receive a restricted stock unit award of about 1.6 million shares,
according to a filing last year, but only if he remained employed
at the company for one year. Mr. Hawkins was named president and
CEO of the solar panel and advanced battery manufacturing firm on
Nov. 21, 2011.
About Energy Conversion Devices
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D.
Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker
presides over the case. Aaron M. Silver, Esq., Judy B. Calton,
Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz &
Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel.
The Debtor estimated assets and debts of between $100 million and
$500 million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president. Affiliate United
Solar Ovonic LLC filed a separate Chapter 11 petition on the same
day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar
Integrated Technologies, Inc., filed a petition for relief under
Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-
43169.
FENTURA FINANCIAL: Delays Q1 Form 10-Q Due to Management Changes
----------------------------------------------------------------
Fentura Financial, Inc., informed the U.S. Securities and Exchange
Commission that it will be late in filing its Form 10-Q for the
period ended March 31, 2012. Due to changes in executive
management additional time was needed to review all aspects of the
financial statements and ensure accuracy of presentation.
About Fentura Financial
Based in Fenton, Michigan, Fentura Financial, Inc., is a
registered bank holding company, owns and controls The State Bank,
Fenton, Michigan, and West Michigan Community Bank, Hudsonville,
Michigan, both state nonmember banks, and two nonbank
subsidiaries. Fentura Financial shares are traded over the
counter under the FETM trading symbol.
Fentura Financial, Inc., entered into a Written Agreement with
the Federal Reserve Bank of Chicago on Nov. 4, 2010. Among
other things, the Written Agreement requires that the Company
obtain the approval of the FRB prior to paying a dividend;
requires that the Company obtain the approval of the FRB prior to
making any distribution of interest, principal, or other sums on
subordinated debentures or trust preferred securities; prohibits
the Company from purchasing or redeeming any shares of its stock
without the prior written approval of the FRB; requires the
submission of a written capital plan by Jan. 3, 2011, and;
requires the Company to submit cash flow projections for the
Company to the FRB on a quarterly basis.
The Company reported a net loss of $1.51 million in 2011, compared
with a net loss of $5.38 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$298.86 million in total assets, $284.20 million in total
liabilities, and $14.66 million in total stockholders' equity.
FLORIDA GAMING: Incurs $3.8 Million Net Loss in 1st Quarter
-----------------------------------------------------------
Florida Gaming Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $3.87 million on $14.36 million of net revenues for
the three months ended March 31, 2012, compared with a net loss of
$1.73 million on $2.89 million of net revenues for the same period
during the prior year.
The Company reported a net loss of $21.76 million in 2011,
compared with a net loss of $4.84 million in 2010.
The Company's balance sheet at March 31, 2012, showed $97.05
million in total assets, $128.37 million in total liabilities and
a $31.32 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/D37rVP
About Florida Gaming
Florida Gaming Corporation operates live Jai Alai games at
frontons in Ft. Pierce, and Miami, Florida through its Florida
Gaming Centers, Inc. subsidiary. The Company also conducts
intertrack wagering (ITW) on jai alai, horse racing and dog racing
from its facilities. Poker is played at the Miami and Ft. Pierce
Jai-Alai, and dominoes are played at the Miami Jai-Alai. In
addition, the Company operates Tara Club Estates, Inc., a
residential real estate development located near Atlanta in Walton
County, Georgia. Approximately 46.2% of the Company's common
stock is controlled by the Company's Chairman and CEO either
directly or beneficially through his ownership of Freedom Holding,
Inc. The Company is based in Miami, Florida.
After auditing the 2011 results, King & Company, PSC, in
Louisville, Kentucky, noted that the Company has experienced
recurring losses from operations, cash flow deficiencies, and is
in default of certain credit facilities, all of which raise
substantial doubt about its ability to continue as a going
concern.
FONAR CORP: Reports $1.5 Million Net Income in March 31 Quarter
---------------------------------------------------------------
Fonar Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $1.55 million on $9.51 million of net total revenues for the
three months ended March 31, 2012, compared with net income of
$1.25 million on $8.65 million of net total revenues for the same
period during the prior year.
The Company reported net income of $5.13 million on $28.45 million
of net total revenues for the nine months ended March 31, 2012,
compared with net income of $3 million on $25.35 million of net
total revenues for the same period a year ago.
The Company's balance sheet at March 31, 2012, showed
$34.82 million in total assets, $24.16 million in total
liabilities and $10.65 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/FkGxDE
About FONAR Corp.
FONAR was incorporated in 1978, making it the first, oldest and
most experienced MRI company in the industry. FONAR introduced
the world's first commercial MRI in 1980, and went public in 1981.
Since its inception, nearly 300 recumbent-OPEN MRIs and 150
UPRIGHT(R) Multi-Position(TM) MRI scanners worldwide have been
installed. FONAR's stellar product line includes the Upright(TM)
MRI (also known as the Stand-Up(TM) MRI), the only whole-body MRI
that performs Position(TM) imaging (pMRI(TM)) and scans patients
in numerous weight-bearing positions, i.e. standing, sitting, in
flexion and extension, as well as the conventional lie-down
position.
After auditing the financial statements for fiscal 2011, the
Company's independent auditors expressed substantial doubt about
the Company's ability to continue as a going concern. Marcum,
LLP, in New York, noted that the Company has negative working
capital at June 30, 2011, and is dependent on asset sales to fund
its operations.
FRONTIER COMMUNICATIONS: Fitch Rates New $500MM Sr. Notes 'BB+'
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Frontier
Communications Corporation's (Frontier) (NYSE: FTR) proposed
offering of $500 million of senior unsecured notes due 2021.
Frontier will use the proceeds to partially tender for its 2014
8.25% notes due 2014 and 7.875% notes due 2015, of which there are
$600 million and $500 million outstanding, respectively. Fitch's
Issuer Default Rating (IDR) on Frontier is 'BB+', and the Rating
Outlook is Stable.
Frontier's 'BB+' IDR reflects the meaningful improvement in its
credit profile following the acquisition of access lines in 14
states from Verizon on July 1, 2010. Frontier has articulated a
long-term leverage target of approximately 2.5 times (x). The
company is still above this target as gross debt-to-EBITDA for the
last 12 months ending March 31, 2012 was 3.4x. In 2012, Fitch
expects leverage to improve to 3.3x, pro forma for the repayment
of a $580 million maturity in mid-January 2013.
Fitch believes Frontier's 47% dividend reduction in February 2012
affirms management's commitment to improving its longer-term
leverage metrics. The reduction is expected to save $348 million
on an annual basis.
In Fitch's view, Frontier's credit metrics have the potential to
strengthen, but improvements will be restrained through 2012. An
Outlook revision to Negative may result if the company's leverage
metrics do not improve from year-end 2011 levels of 3.4x after the
line integration is completed and if the company does not show
continued progress in growing revenues from business and data
services. To accomplish the latter, Fitch believes an improvement
in the performance of the former Verizon properties under
Frontier's rurally-focused business model will need to be
demonstrated.
Ongoing competitive pressures are also factored into the ratings
of Frontier. Its operations are showing a slow and relatively
stable rate of decline due to competitive pressures and
technological substitution; the sluggish economy is also having an
effect. The marketing of additional services -- including high
speed data -- as well as cost controls have been mitigating the
effect of access line losses to cable operators and wireless
providers. Recently announced regulatory reforms are not expected
to have a significant impact on the company in the near term.
Frontier has ample liquidity which is derived from its cash
balances, its $750 million revolving credit facility, and, on a
forward basis, FCF. At March 31, 2012, Frontier had $366 million
in cash and an additional $139 million of restricted cash was
available to fund certain capital expenditures. Over the last 12
months, FCF after dividends was a negative $59 million. FCF in
the period was pressured by the timing of working capital needs
due to the system conversion and broadband buildout as well as
integration and accelerated broadband capital spending.
As a result of the effect of the dividend reduction in 2012, Fitch
expects FCF to improve materially, given the lower dividend will
reduce dividend requirements by $348 million annually. Fitch
expects 2012 FCF to be in a range of $360 million to $400 million
after dividends and integration expenses. FCF expectations
reflect Frontier's capital spending guidance of $725 million to
$775 million plus integration capital spending of $40 million.
Capital spending is expected to decline by $100 million in 2013 as
the broadband expansion is completed.
Liquidity is provided by a $750 million senior unsecured credit
facility, which is in place until Jan. 1, 2014. The $750 million
facility is available for general corporate purposes but may not
be used to fund dividend payments. The main financial covenant in
the revolving credit facility requires the maintenance of a net
debt-to-EBITDA level of 4.5x or less during the entire period.
Net debt is defined as total debt less cash exceeding $50 million.
Frontier has $94 million due in 2012, $639 million in 2013 and
$658 million in 2014. Fitch expects the company to use cash
balances to repay the 2013 maturity, and the 2014 maturity will be
reduced by the tender offer.
The company's $100 million unsecured letter of credit facility
matures Sept. 20, 2012. The facility has no financial ratio
covenants, and other negative covenants are similar to those in
its revolving credit facility. A letter of credit was issued to
the West Virginia Public Service Commission to guarantee capital
expenditure commitments in the state with respect to the
acquisition of the Verizon lines.
FRONTIER COMMUNICATIONS: Moody's Rates $500MM Note Issuance 'Ba2'
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 (LGD 4-56%)
instrument rating to Frontier Communications, Inc.'s proposed $500
million note issuance due 2021 that will rank pari passu with the
company's existing senior unsecured debt. The proceeds of the
notes will be used to redeem existing debt and for general
corporate purposes.
Issuer: Frontier Communications Corporation
Assignments:
US$500M Senior Unsecured Regular Bond/Debenture, Assigned Ba2
US$500M Senior Unsecured Regular Bond/Debenture, Assigned a
range of LGD4, 56 %
Ratings Rationale
The company's Ba2 Corporate Family Rating largely reflects the
turnaround challenge the Company continues to face in assuming the
much larger Verizon operations as the downward pressure on
wireline revenue and cash flow weighs on the ratings. At the same
time, the ratings benefit from the predictability of the Company's
cash flow generation and management's stated commitment to delever
its balance sheet and drive credit metrics towards investment
grade levels. Moody's notes that Frontier continues to generate
positive free cash flow.
However the Company's progress in materially improving its credit
metrics to be in line with investment grade ratings is tracking
behind Moody's expectations. Frontier is likely to exceed its
stated cost reduction targets. Revenue losses in the acquired
Verizon properties, particularly driven by ongoing access line
declines and pressure on ARPU weigh on the performance. Moody's
believes that in order for the company to materially improve its
credit metrics, it will need to reverse the revenue declines, and
begin to take market share back in voice lines and high speed data
connections in the acquired properties.
What Could Change the Rating - Up
Positive rating momentum could develop if Frontier's financial
profile strengthens as evidenced by margin expansion and topline
improvement. Moody's could upgrade Frontier's rating if the
Company's leverage (total adjusted debt-to-EBITDA) could be
sustained under 3.0x and its free cash flow increases to mid
single digit percentage of its total debt.
What Could Change the Rating - Down
Negative rating pressure could develop if Frontier's operating
performance deteriorates, or if the Company's liquidity becomes
strained as a result of significant delays in realizing merger
synergies.
The principal methodology used in rating Frontier Communications
was the Global Telecommunications Industry Methodology published
in December 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
FUSION TELECOMMUNICATIONS: Incurs $786,000 Net Loss in Q1
---------------------------------------------------------
Fusion Telecommunications International, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $785,951 on $11.53 million of
revenue for the three months ended March 31, 2012, compared with a
net loss of $1.22 million on $10.20 million of revenue for the
same period during the prior year.
The Company reported a net loss of $4.45 million in 2011, compared
with a net loss of $5.79 million in 2010.
The Company's balance sheet at March 31, 2012, showed $3.90
million in total assets, $14.27 million in total liabilities and a
$10.37 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/87Tft6
About Fusion Telecommunications
New York City-based Fusion Telecommunications International, Inc.
(OTC BB: FSNN) is a provider of Internet Protocol based digital
voice and data communications services to corporations and
carriers worldwide.
Rothstein, Kass & Company, P.C., in Roseland, New Jersey, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2011, citing that the
Company has had negative working capital balances, incurred
negative cash flows from operations and net losses since
inception, and has limited capital to fund future operations that
raises a substantial doubt about their ability to continue as a
going concern.
GALP CNA: Case Dismissed; Wentwood Roundhill Case Continues
-----------------------------------------------------------
The U.S. Bankruptcy Court ruled that the Chapter 11 case of GALP
CNA Limited Partnership will be close effective immediately.
The only other pending chapter 11 case -- jointly administered
under Case No. 10-38975 -- Wenthwood Roundhill I L.P., Case No.
10-38984, continues to be maintained with the Court.
Houston, Texas-based GALP CNA Limited Partnership filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No.
10-38975) on Oct. 4, 2010. The Debtor estimated its assets and
debts at $1 million to $10 million at the Petition Date.
Wentwood Woodside I, L.P. (Case No. 10-38981), Wentwood Roundhill
I, L.P., Wentwood Rollingbrook, L.P., and GALP Cypress Limited
Partnership (Case No. 10-38991) filed separate Chapter 11
petitions on the same day. Wentwood Woodside estimated assets of
$10 million to $50 million and debts of $1 million to $10 million.
The cases are jointly administered, with GALP CNA as lead case.
The Law Offices of Matthew Hoffman, P.C., assists the Debtors in
their restructuring efforts.
GENERAL MOTORS: Judge Dismisses OnStar Analog MDL Claims
--------------------------------------------------------
Jonathan Randles at Bankruptcy Law360 reports that a Michigan
federal judge on Thursday dismissed all claims against Motors
Liquidation Co., General Motors Co.'s bankruptcy court entity, in
multidistrict litigation over the failure of analog
telecommunications equipment used in OnStar LLC's safety systems.
According to Law360, the plaintiffs agreed to voluntarily dismiss
the claims against GM earlier this week. All the claims against
GM had been stayed in the current action since the company filed
for bankruptcy protection in June 2009 in the Southern District of
New York.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of
the world's largest automakers, traces its roots back to 1908.
GM employs 208,000 people in every major region of the world and
does business in more than 120 countries. GM and its strategic
partners produce cars and trucks in 30 countries, and sell and
service these vehicles through the following brands: Baojun,
Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang,
Opel, Vauxhall, and Wuling. GM's largest national market is
China, followed by the United States, Brazil, the United Kingdom,
Germany, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. was formed to acquire the operations of
General Motors Corp. through a sale under 11 U.S.C. Sec. 363
following Old GM's bankruptcy filing. The U.S. government once
owned as much as 60.8% stake in New GM on account of the
financing it provided to the bankrupt entity. The deal was
closed July 10, 2009, and Old GM changed its name to Motors
Liquidation Co.
On Nov. 1, 2011, Moody's Investors Service raised New GM's
Corporate Family Rating and Probability of Default Rating to Ba1
from Ba2, and its secured credit facility rating to Baa2 from
Baa3. Moody's also raised the Corporate Family Rating of GM's
financial services subsidiary -- GM Financial -- to Ba3 from B1.
On Oct. 7, 2011, Fitch Ratings upgraded the Issuer Default
Ratings of New GM, General Motors Holdings LLC, and General
Motors Financial Company Inc., to 'BB' from 'BB-'.
On Oct. 3, 2011, Standard & Poor's Ratings Services raised its
corporate credit rating on New GM to 'BB+' from 'BB-'; and
revised the rating outlook to stable from positive. "We also
raised our issue-level rating on GM's debt to 'BBB' from 'BB+';
the recovery rating remains at '1'," S&P said.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq.,and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
GRANDSUN REALTY: Case Summary & 5 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Grandsun Realty LLC
720 Sunrise Highway
Baldwin, NY 11510
Bankruptcy Case No.: 12-73158
Chapter 11 Petition Date: May 16, 2012
Court: U.S. Bankruptcy Court
Eastern District of New York (Central Islip)
Judge: Dorothy Eisenberg
Debtor's Counsel: Gerard M. Bambrick, Esq.
One Old Country Road, Suite 385
Carle Place, NY 11514
Tel: (516) 747-2110
Fax: (888) 419-0412
E-mail: bambrickryan@netscape.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its five largest unsecured
creditors filed with the petition is available for free at:
http://bankrupt.com/misc/nyeb12-73158.pdf
The petition was signed by Joseph J. Koch, managing member.
GREENMAN TECHNOLOGIES: Incurs $1.1-Mil. Loss in March 31 Quarter
----------------------------------------------------------------
GreenMan Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $1.11 million on $572,884 of net sales for the three
months ended March 31, 2012, compared with a net loss of $2.30
million on $517,921 of net sales for the same period during the
prior year.
The Company reported a net loss of $2.25 million on $968,901 of
net sales for the six months ended March 31, 2012, compared with a
net loss of $3.79 million on $878,123 of net sales for the same
period a year ago.
The Company reported a net loss of $6.81 million for the year
ended Sept. 30, 2011, compared with a net loss of $5.64 million
the year before.
The Company's balance sheet at March 31, 2012, showed $4 million
in total assets, $7.92 million in total liabilities, and a
$3.92 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/zDDxsI
About Greenman Technologies
Lynnfield, Mass.-based GreenMan Technologies, Inc. (OTC QB: GMTI)
through its two alternative energy subsidiaries, American Power
Group, Inc. ("APG") and APG International, Inc. ("APGI"), provides
a cost-effective patented dual fuel conversion technology for
diesel engines and diesel generators.
Schechter Dokken Kanter Andrews & Selcer, Ltd., in Minneapolis,
Minnesota, issued a "going concern" qualification on the
consolidated financial statements for the fiscal year ended
Sept. 31, 2011, indicating that the Company has continued to incur
substantial losses from operations, has not generated positive
cash flows and has insufficient liquidity to fund its ongoing
operations that raise substantial doubt about the Company's
ability to continue as a going concern.
GREENSHIFT CORP: Incurs $697,000 Net Loss in First Quarter
----------------------------------------------------------
Greenshift Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $696,766 on $2.91 million of revenue for the three months ended
March 31, 2012, compared with net income of $10.13 million on
$7.71 million of total revenue for the same period during the
prior year.
The Company's balance sheet at March 31, 2012, showed
$5.95 million in total assets, $50.45 million in total
liabilities, and a $44.49 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/N2MSlR
About Greenshift Corporation
Headquartered in New York, GreenShift Corporation develops and
commercializes clean technologies designed to integrate into and
leverage established production and distribution infrastructure to
address the financial and environmental needs of its clients by
decreasing raw material needs, facilitating co-product reuse, and
reducing waste and emissions.
In its audit report for the financial statements for 2011,
Rosenberg Rich Baker Berman & Company, in Somerset, NJ, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has suffered losses from operations and has a working capital
deficiency as of Dec. 31, 2011.
HAMPTON ROADS: Fitch Upgrades Rating on $9-Mil. Notes to 'BB'
-------------------------------------------------------------
Fitch Ratings has upgraded the ratings for the following classes
of Hampton Roads PPV, LLC military housing taxable revenue bonds
(Hampton Roads Unaccompanied Housing Project), 2007 series A (the
bonds):
-- Approximately $210 million class I to 'A+' from 'A-';
-- Approximately $58 million class II to 'BBB-' from 'BB+';
-- Approximately $9 million class III to 'BB' from 'B+'.
The bonds have a Stable Outlook.
SECURITY
The bonds are special limited obligations of the issuer and are
primarily secured by a first lien on all receipts from the
operation of the unaccompanied housing project known as Hampton
Roads at Norfolk Naval Complex. The absence of a cash funded debt
service reserve fund limits protections afforded bondholders.
KEY RATING DRIVERS
STABILIZED DEBT SERVICE COVERAGE: The ratings on the bonds are
being upgraded based on the 2011 debt service coverage ratios
(DSCR) of 1.59x, 1.23x and 1.15x, respectively and the projected
DSCRs of 1.60x, 1.23x and 1.17x based on the 2012 budget at
current occupancy levels. While these coverage ratios are well
below initial underwriting projections, they have stabilized and
are in line with the upgraded rating levels.
OPERATING EXPENSES & INCREASED DEBT SERVICE: Managing expenses
will continue to be a challenge for the project operator as
operating expenses far exceed initial projections (largely due to
high turnover levels, staffing and utilities). Additionally, bond
debt service increases to it maximum beginning in 2013 (from $17.7
million in 2011 to $19.2 in 2013).
PROJECT MANAGEMENT & OCCUPANCY: The project has experienced
adequate occupancy levels since construction completion in July
2010 and the current occupancy is sound at 95% as of March 2011.
This follows a recent dip in occupancy to 93% in February/March
due to a group of ships deploying. Project management will
continue to be challenged by the potential for future deployments
and the need to reoccupy units.
FUTURE BAH FLUCTUATIONS: The 2012 Basic Allowance for Housing
(BAH) rates demonstrated a 1.36% decline from 2011 rates and the
most recent budget projections from the property sponsor reflect
the new rate. Fitch expects that 2013 BAH rates may also decrease
slightly as rental rates in the area for 2012-2013 (based on third
party Property and Portfolio Research projections for apartment
rent levels in the Norfolk area) are expected to decline by -0.5%
in 2012 and -0.8% in 2013.
WHAT COULD TRIGGER A DOWNGRADE ON THE BONDS
-- A material decrease in BAH rates for the Norfolk market area;
-- Management's inability to maintain current occupancy levels
and control project operating expenses.
CREDIT PROFILE
PROJECT OVERVIEW
The housing project located on Norfolk Naval Complex base in
Virginia (known as Hampton Roads) is providing apartment
residences for single (i.e., unaccompanied) U.S. Navy enlisted
personnel. Hampton Roads is providing 1,189 two-bedroom, two-bath
apartments, each with a kitchen and living room. In addition to
the new units, existing housing facilities were renovated to
provide another 39 units.
In April 2010, Fitch took severe rating action on the bonds
reflecting a delay in the construction of units to be delivered.
Upon the receipt of the developer's revised pro forma cash flows
(which incorporated construction delays, reduced occupancy levels,
increased operating expenses, and reduced interest income), the
ratings were downgraded to A-, BB+ and B+, respectively. After
meeting the revised unit delivery schedule, the project has been
successful in occupying units as they become available and meeting
the revised budget numbers.
DEBT SERVICE COVERAGE
The project's 2011 respective debt service coverage ratios of
1.59x, 1.23x and 1.15x, demonstrate the continued stabilization of
the project. The 2012 budget for the property incorporates a 4.4%
economic vacancy assumption and assumes no change in BAH in
addition to demonstrating the following expectation for DSCRs for
2012:
-- Class I bonds: 1.60x
-- Class II bonds: 1.23x
-- Class III bonds: 1.17x
Debt service, as originally planned, will increase to $19.3
million in 2013 (from $17.7 million in 2011) with principal
starting to amortize. Debt service remains level throughout the
life of the bonds. When the increased debt service is assumed and
applied to the 2012 budgeted net operating income, the bonds
demonstrate the following DSCRs:
-- Class I bonds: 1.46x
-- Class II bonds: 1.13x
-- Class III bonds: 1.09x
Fitch views unaccompanied military housing projects as having more
risk than military family housing projects given the varied
profile of the respective tenant bases. Unaccompanied housing
projects tend to be subject to higher levels of physical wear and
higher annual turnover which leads to higher operating expenses.
Therefore, Fitch expects that the DSCRs for an unaccompanied
project will be higher than those of military family housing
transactions at the same rating level to account for this dynamic.
Property management reports that the project continues to
experience operating expenses that are approximately 20% higher
than what was originally anticipated.
OCCUPANCY AND DEPLOYMENT
The project has experienced adequate occupancy levels since
construction completion in July 2010 and the current occupancy is
sound at 95% as of March 2011. This follows a recent dip in
occupancy to 93% in February/March due to a group of ships
deploying. Management reports that the project experienced 76%
turnover in 2011 largely driven by the deployment of existing
tenants. Project management will continue to be challenged by the
potential for future deployments and the need to reoccupy units.
DEBT SERVICE RESERVE FUND
The bonds have a debt service reserve fund whereby AMBAC serves as
the surety bond provider sized at maximum annual debt service.
Fitch does not assign any value to the AMBAC surety bond and does
not rely on its presence in the event of project financial
deterioration. In addition, there is an excess collateral
agreement in place in the amount of $6.5 million which acts as a
line of credit to the project from Merrill Lynch (rated 'A/F1';
Stable Outlook by Fitch) with a wrap from AIG (rated 'BBB';
Positive Outlook). At this time the surety bond and excess
collateral agreement providers have had their creditworthiness
downgraded or withdrawn completely since the issuance of the
bonds. As a result, Fitch no longer gives any credit in the
analysis to those agreements.
HAWKER BEECHCRAFT: Proposes Bankruptcy Advisors
-----------------------------------------------
BankruptcyData.com reports that Hawker Beechcraft Acquisition
Company filed with the U.S. Bankruptcy Court motions to retain:
* Perella Weinberg Partners (Contact: Michael Kramer) as
investment banker and financial advisor for a monthly fee
of $175,000 and a restructuring fee of $10,000,000;
* Curtis, Mallet-Prevost, Colt & Mosle (Contact: Steven J.
Reisman) as conflicts counsel at these hourly rates:
partner at $730 to $830, counsel at $510 to $625,
associate at $300 to $590, paraprofessional at $190 to
$230, managing clerk at $450 and other support personnel
at $325; and
* Kirkland & Ellis (Contact: Paul M. Basta) as attorney at
these hourly rates: partner at $670 to $1,045, of counsel
at $560 to $1,045, associate at $370 to $750 and
paraprofessional at $150 to $320.
About Hawker Beechcraft
Hawker Beechcraft Inc., a designer and manufacturer of light and
medium-sized jet, turboprop and piston aircraft, filed for Chapter
11 reorganization together with 17 affiliates (Bankr. S.D.N.Y.
Lead Case No. 12-11873) on May 3, 2012, having already negotiated
a plan that eliminates $2.5 billion in debt and $125 million of
annual cash interest expense.
The plan, to be filed by June 30, will give 81.9% of the new stock
to holders of $1.83 billion of secured debt, while 18.9% of the
new shares are for unsecured creditors. The proposal has support
from 68% of secured creditors and holders of 72.5% of the senior
unsecured notes.
Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp. The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in total
liabilities and a $956.90 million total deficit. Other claims
include pensions underfunded by $493 million.
Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy
Solutions LLC is the claims and notice agent.
The Pension Benefit Guaranty Corp. is represented by Kelley Drye &
Warren LLP.
Sidley Austin LLP serves as legal counsel and Houlihan Lokey
Howard & Zukin Capital Inc. serves as financial advisor to the DIP
Agent and the Prepetition Agent.
Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of
senior secured prepetition lenders holding 70% of the loans.
Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee
of holders of the 8.500% Senior Fixed Rate Notes due 2015 and
8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker
Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes
Company. The members of the Ad Hoc Committee -- GSO Capital
Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims
or manage accounts that hold claims against the Debtors' estates
arising from the purchase of the Senior Notes. Deutsche Bank
National Trust Company, the indenture trustee for senior fixed
rate notes and the senior PIK-election notes, is represented by
Foley & Lardner LLP.
HEARTLAND MEMORIAL: Bankr. Ct. to Hear Motion in Suit v. DLA Piper
------------------------------------------------------------------
District Judge Theresa L. Springmann declined DLA Piper (US) LLP's
request for the District Court to hear the Amended Motion for
Leave to File Second Amended Complaint lodged by David Abrams, the
Liquidating Trustee and court-appointed manager of Heartland
Memorial Hospital LLC.
On Feb. 26, 2009, the Liquidating Trustee filed a Complaint
against DLA in bankruptcy court, Adversary Proceeding 09-02049,
seeking to avoid $100,000 in allegedly preferential transfers and
to disallow the firm's claim in the bankruptcy. On March 2, 2009,
the Liquidating Trustee filed an Amended Complaint, alleging four
counts involving fraudulent and preferential transfers.
On March 3, 2009, the Liquidating Trustee filed a Complaint
against DLA in Case No. 09L002543 in the Circuit Court of Cook
County, Illinois, alleging legal malpractice and breach of
fiduciary duty. On Oct. 5, 2011, the Cook County judge dismissed
that Complaint with prejudice, finding that the liquidating plan
required the Liquidating Trustee to pursue legal malpractice
claims in bankruptcy court. The Liquidating Trustee filed a
notice of appeal of the Cook County dismissal order on Oct. 14,
2011.
On Oct. 5, 2011, the Liquidating Trustee filed an Amended Motion
for Leave to File Second Amended Complaint against DLA in
Adversary Proceeding 09-02049, seeking to add the claims for legal
malpractice and breach of fiduciary duty to the other claims
already before the bankruptcy court, seeking to add a new party
plaintiff to those counts, and seeking a determination that the
amendments to the complaint would relate back to Feb. 26, 2009 --
the date of the filing of the original Complaint in Adversary
Proceeding 09-02049.
DLA filed its Motion to Withdraw Reference on Nov. 7, 2011. The
Liquidating Trustee objected.
Judge Springmann, in denying DLA's request, ruled that the
bankruptcy court is in a better position to oversee litigation,
including the pending Amended Motion for Leave to File Second
Amended Complaint.
"The Defendant's arguments present reasons why the claims that
would be added by a Second Amended Complaint should be removed to
this Court, but the Defendant has not persuasively shown why this
Court, instead of the bankruptcy court, should decide the pending
motion," Judge Springmann said. "The Defendant effectively argues
it would be a 'waste of judicial resources' for the bankruptcy
court to decide a motion which would be subject to this Court's de
novo review. But the bankruptcy court is intimately familiar with
the facts and circumstances relating to the bankruptcy
proceeding."
DLA proffered an Order in the case of Abrams v. McGuireWoods LLP,
No. 2:11-CV-21, and now asks the District Court to withdraw the
reference as Judge Simon did in that case.
Judge Springmann, however, held that Judge Simon's Order
distinguishable for five reasons. Judge Simon granted the motion
to withdraw the reference where the Liquidating Trustee brought a
complaint in the bankruptcy court involving legal malpractice
against McGuireWoods LLP. Significantly, the Liquidating Trustee
did not have an adversary proceeding already pending against
McGuireWoods LLP, so he was filing an entirely new complaint
instead of a motion for leave to amend. The Court finds the
McGuireWoods LLP case distinguishable, first, because McGuireWoods
LLP already had a right to a jury trial due to the nature of the
Liquidating Trustee's claims, whereas DLA does not yet have a jury
trial right on the claims that are presently before the bankruptcy
court. Judge Simon's Order is distinguishable, secondly, because
the Liquidating Trustee's claims against McGuireWoods LLP were all
non-core claims, whereas the claims presently before the
bankruptcy court all appear to be core bankruptcy matters. Judge
Simon's third and fourth reasons for granting the motion to
withdraw the reference were that it would be inefficient for the
bankruptcy court to decide non-core matters which the district
court would have to review de novo, and that the bankruptcy court
had no familiarity with the adversary proceeding against
McGuireWoods LLP. But both reasons are distinguishable because it
is more efficient for the bankruptcy court to administer the
progress of the adversary proceeding against DLA by deciding the
Amended Motion for Leave to File Second Amended Complaint, and
because the bankruptcy court is intimately familiar with the
adversary proceeding against DLA. The McGuireWoods LLP case is
distinguishable, lastly, because withdrawal in that case to the
district court did not cause delay or increase costs, whereas
withdrawal of the adversary proceeding against DLA at this point
will likely cause delay and increase costs as a new court
familiarizes itself with the facts and circumstances underlying
the adversary proceeding.
The case before the District Court is, DAVID ABRAMS, not
individually but solely as the Liquidating Trustee and court-
appointed manager of Heartland Memorial Hospital, LLC, Plaintiff,
v. DLA PIPER (US) LLP, a Maryland Limited Liability partnership,
Defendant, Cause No. 2:12-CV-19-TLS (N.D. Ind.). A copy of the
District Court's May 15, 2012 Opinion and Order is available at
http://is.gd/yrKpjYfrom Leagle.com.
David Abrams, not individually but solely as the Liquidating
Trustee and court-appointed manager of agent of Heartland Memorial
Hospital LLC, is represented by Elizabeth E. Richert, Esq., and
Eugene J. Schiltz, Esq., at Coleman Law Firm, and Mark E. Leipold,
Esq., at Gould & Ratner LLP.
DLA Piper US LLP is represented by Martin J O'Hara, Much Shelist
PC.
About Heartland Memorial Hospital
In January 2007, creditors filed an involuntary Chapter 7
bankruptcy petition against Heartland Memorial Hospital, LLC. On
March 2, 2007, the bankruptcy court granted relief against the
Debtor and converted the case to Chapter 11. On Nov. 19, 2008,
the bankruptcy court confirmed the Debtor's liquidating plan of
reorganization and appointed David Abrams, as liquidating trustee.
HOSTESS BRANDS: Seeks to Pay Board Members Amid Sale Process
------------------------------------------------------------
Rachel Feintzeig at Dow Jones' Daily Bankruptcy Review reports
that Hostess Brands Inc., which was recently dealt a setback in
its attempt to emerge from bankruptcy for the second time, wants
permission to pay the independent directors who sit on its board
$100,000 a year each.
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.
IMH FINANCIAL: Incurs $7.8 Million Net Loss in First Quarter
------------------------------------------------------------
IMH Financial Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $7.89 million on $1.26 million of total revenue for
the three months ended March 31, 2012, compared with a net loss of
$5.40 million on $1.02 million of total revenue for the same
period a year ago.
The Company reported a net loss of $35.19 million in 2011, a net
loss of $117.04 million in 2010, and a net loss of $74.47 million
in 2009.
The Company's balance sheet at March 31, 2012, showed
$236.09 million in total assets, $78.98 million in total
liabilities, and $157.10 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/slKroc
About IMH Financial
Scottsdale, Ariz.-based IMH Financial Corporation was formed from
the conversion of IMH Secured Loan Fund, LLC, or the Fund, a
Delaware limited liability company, on June 18, 2010. The
conversion was effected following a consent solicitation process
pursuant to which approval was obtained from a majority of the
members of the Fund to effect the Conversion Transactions and
involved (i) the conversion of the Fund from a Delaware limited
liability company into a Delaware corporation named IMH Financial
Corporation, and (ii) the acquisition by the Company of all of the
outstanding shares of the manager of the Fund Investors Mortgage
Holdings Inc., or the Manager, as well as all of the outstanding
membership interests of a related entity, IMH Holdings LLC, or
Holdings on June 18, 2010.
The Company is a commercial real estate lender based in the
southwest United States with over 12 years of experience in many
facets of the real estate investment process, including
origination, underwriting, documentation, servicing, construction,
enforcement, development, marketing, and disposition. The Company
focuses on a niche segment of the real estate market that it
believes is underserved by community, regional and national banks:
high yield, short-term, senior secured real estate mortgage loans.
The intense level of underwriting analysis required in this
segment necessitates personnel and expertise that many community
banks lack, yet the requisite localized market knowledge of the
underwriting process and the size of the loans the Company seeks
often precludes the regional and community banks from efficiently
entering this market.
LA JOLLA: Delays Form 10-Q for First Quarter
--------------------------------------------
La Jolla Pharmaceutical Company was unable to file its quarterly
report on Form 10-Q for the quarter ended March 31, 2012, within
the prescribed time period for a smaller reporting company because
the Company is having difficulty obtaining certain information
relating to exercises of convertible securities that is necessary
for the completion of the Company's financial statements and other
disclosures. The Company intends to file its Quarterly Report on
Form 10-Q on or before the 5th calendar day following the
prescribed due date.
About La Jolla Pharmaceutical
San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB:
LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company
that has historically focused on the development and testing of
Riquent as a treatment for Lupus nephritis.
La Jolla reported a net loss of $11.54 million in 2011, compared
with a net loss of $3.76 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed $5.10 million
in total assets, $15.52 million in total liabilities, all current,
$5.13 million in Series C-1 redeemable convertible preferred
stock, and a $15.55 million total stockholders' deficit.
After auditing the 2011 results, BDO USA, LLP, in San Diego,
California, expressed raise substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has suffered recurring losses from
operations, has an accumulated deficit of $439.6 million and a
stockholders' deficit of $15.6 million as of Dec. 31, 2011, and
has no current source of revenues.
LAGRAVE RECONSTRUCTION: Files Schedules of Assets and Liabilities
-----------------------------------------------------------------
LaGrave Reconstruction Company L.L.C. filed with the Bankruptcy
Court for the Northern District of Texas its schedules of assets
and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $5,100,000
B. Personal Property $40,100
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $12,645,464
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $98,794
----------- -----------
TOTAL $5,140,100 $12,744,258
A full text copy of the company's schedules of assets and
liabilities is available free at:
http://bankrupt.com/misc/LAGRAVE_RECONSTRUCTION_sal.pdf
LaGrave Reconstruction Company L.L.C., owner of the LaGrave Field
outdoor baseball stadium located just north of downtown Fort
Worth, Texas, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex.
Case No. 12-40099) on Jan. 2, 2012, to halt a planned foreclosure
of the stadium. The Fort Worth Cats minor league baseball team
played at the stadium. Judge D. Michael Lynn presides over the
case.
LIFECARE HOLDINGS: Incurs $4.6 Million Net Loss in 1st Quarter
--------------------------------------------------------------
Lifecare Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $4.59 million on $126.41 million of net patient
service revenue for the three months ended March 31, 2012,
compared with a net loss of $3.60 million on $94.91 million of net
patient service revenue for the same period during the prior year.
The Company reported a net loss of $34.83 million in 2011,
compared with net income of $2.63 million on $358.25 million in
2010.
The Company's balance sheet at March 31, 2012, showed
$495.99 million in total assets, $546.90 million in total
liabilities, and a $50.91 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/GJqQ7O
About LifeCare Holdings
Plano, Tex.-based LifeCare Holdings, Inc. --
http://www.lifecare-hospitals.com/-- operates 19 hospitals
located in nine states, consisting of eight "hospital within a
hospital" facilities (27% of beds) and 11 freestanding facilities
(73% of beds). Through these 19 long-term acute care hospitals,
the Company operates a total of 1,057 licensed beds and employ
approximately 3,200 people, the majority of whom are registered or
licensed nurses and respiratory therapists. Additionally, the
Company holds a 50% investment in a joint venture for a 51-bed
LTAC hospital located in Muskegon, Michigan.
* * *
LifeCare Holdings carries "Caa1" corporate family and probability
of default ratings, with negative outlook, from Moody's Investors
Service and a 'CCC-' corporate credit rating, with negative
outlook from Standard & Poor's Ratings Services.
In November 2010, Standard & Poor's Ratings lowered its corporate
credit rating on LifeCare Holdings to 'CCC-' from 'CCC+'. "The
downgrade reflects the imminent difficulty the company may
have in meeting its bank covenant requirements and the risk of it
successfully refinancing significant debt maturing in 2011 and
2012," said Standard & Poor's credit analyst David Peknay. The
likelihood of a debt covenant violation is heightened by the
company's lack of appreciable operating improvement coupled with a
large upcoming tightening of is debt covenant in the first quarter
of 2011. Additional equity by the company's financial sponsor may
be necessary to avoid a covenant violation. Accordingly, S&P
believes the chances of bankruptcy have increased.
As reported by the TCR on May 26, 2011, Standard & Poor's Rating
Services affirmed its 'CCC-' corporate credit rating and its
senior subordinated debt rating on Plano, Texas-based LifeCare
Holdings Inc. "The low-speculative-grade rating on LifeCare
reflects its narrow focus in a competitive business heavily
reliant on uncertain Medicare reimbursement," said Standard &
Poor's credit analyst David Peknay, "and its highly leveraged
financial risk profile highlighted by very weak cash flow
protection measures, slim liquidity, and very high debt level."
LIGHTSQUARED INC: Wins Approval of First Day Motions
----------------------------------------------------
Joseph Checkler at Dow Jones Daily Bankruptcy Review reports
Bankruptcy Judge Shelley C. Chapman approved several first-day
motions filed by LightSquared Inc., including allowing it to
continue using its bank accounts and pay its 168 employees.
According to the report, Milbank, Tweed, Hadley & McCloy LLP's
Matthew S. Barr, a lawyer for LightSquared, told the Court at the
First Day hearing, "We're not here because of the Federal
Communications Commission's issues," but rather the need for time
to solve them."
"We believe there is a reasonable solution here," he added, saying
several times that the company hopes to use bankruptcy as a
"runway" to agreements with both regulators and its creditors.
The report says White & Case LLP's Thomas E. Lauria, a lawyer for
the group owed more, said in court that the issues with the FCC
could take "years to resolve" and that he was concerned the
company could burn through its nearly $200 million in cash during
that time.
About LightSquared
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, as the Company seeks to resolve regulatory issues
that have prevented it from building its coast-to-coast integrated
satellite 4G wireless network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties,
prompting the bankruptcy filing.
As of the Petition Date, the Debtors employed roughly 168 people
in the United States and Canada. As of Feb. 29, 2012, the Debtors
had $4.48 billion in assets (book value) and $2.29 billion in
liabilities.
LightSquared also sought ancillary relief in Canada on behalf of
all of the Debtors, pursuant to the Companies' Creditors
Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the
Ontario Superior Court of Justice (Commercial List) in Toronto,
Ontario, Canada. The purpose of the ancillary proceedings is to
request the Canadian Court to recognize the Chapter 11 cases as a
"foreign main proceeding" under the applicable provisions of the
CCAA to, among other things, protect the Debtors' assets and
operations in Canada. The Debtors named affiliate LightSquared LP
to act as the "foreign representative" on behalf of the Debtors'
estates.
Judge Shelley C. Chapman presides over the Chapter 11 case.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Kurtzman Carson Consultants LLC serves as claims and
notice agent.
Counsel to UBS AG as agent under the October 2010 facility is
Melissa S. Alwang, Esq., at Latham & Watkins LLP.
The ad hoc secured group of lenders under the Debtors' October
2010 facility was formed in April 2012 to negotiate an out-of-
court restructuring. The members are Appaloosa Management L.P.;
Capital Research and Management Company; Fortress Investment
Group; Knighthead Capital Management LLC; and Redwood Capital
Management. Counsel to the ad hoc secured group is Thomas E.
Lauria, Esq., at White & Case LLP.
Philip Falcone's Harbinger Capital Partners indirectly owns 96% of
LightSquared's outstanding common stock. Harbinger and certain of
its managed and affiliated funds and wholly owned subsidiaries,
including HGW US Holding Company, L.P., Blue Line DZM Corp., and
Harbinger Capital Partners SP, Inc., are represented in the case
by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP.
LIQUIDMETAL TECHNOLOGIES: Incurs $1.1 Million Net Loss in Q1
------------------------------------------------------------
Liquidmetal Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $1.06 million on $196,000 of total revenue for the
three months ended March 31, 2012, compared with a net loss of
$1.39 million on $504,000 of total revenue for the same period
during the prior year.
The Company's balance sheet at March 31, 2012, showed
$2.02 million in total assets, $4.86 million in total liabilities,
and a $2.84 million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/scvp0g
About Liquidmetal Technologies
Based in Rancho Santa Margarita, Calif., Liquidmetal Technologies,
Inc. and its subsidiaries are in the business of developing,
manufacturing, and marketing products made from amorphous alloys.
Liquidmetal Technologies markets and sells Liquidmetal(R) alloy
industrial coatings and also manufactures, markets and sells
products and components from bulk Liquidmetal alloys that can be
incorporated into the finished goods of its customers across a
variety of industries. The Company also partners with third-
party licensees and distributors to develop and commercialize
Liquidmetal alloy products.
After auditing the 2011 financial statements, Choi, Kim & Park,
LLP, in Los Angeles, California, said that the Company's
significant operating losses and working capital deficit raise
substantial doubt about its ability to continue as a going
concern.
LOS ANGELES COLISEUM: Faces Insolvency as Cash Dries Up
-------------------------------------------------------
The Ballpark Digest reports that iconic Los Angeles Coliseum,
former home of the Los Angeles Dodgers, is facing insolvency and
could be handed over to the University of Southern California.
According to the report, it's a tough situation for the facility
first built to honor World War I veterans. The Ballpark Digest
relates that the state doesn't have the money to maintain the
facility, and the cash reserves for the Coliseum are running low.
The report says USC wants to take control of the stadium and have
pledged to put $70 into stadium improvements.
The Ballpark Digest notes that the stadium is currently managed by
a commission (with members appointed by the state, the county and
the city) that's proven to be unable to implement a workable
financial plan to maintain the facility. Hence the move to lease
it to USC, but that move is being met with resistance by some in
the local community.
The Coliseum opened in June 1923 and over the years served as home
to multiple Olympic games, the NFL, Super Bowls and Southern Cal
football. The Dodgers played there in the 1958-1961 seasons until
Dodger Stadium was completed.
LOS ANGELES DODGERS: Confirmed Plan Declared Effective on April 30
------------------------------------------------------------------
The Los Angeles Dodgers LLC filed a notice with the Bankruptcy
Court that the effective date of the confirmed plan of
reorganization is April 30, 2012. The bar date for administrative
expense and professional fee claims is May 30, 2012.
As reported in the Troubled Company Reporter on May 3, 2012,
the Los Angeles Dodgers, on schedule, emerged from bankruptcy
reorganization on April 30.
The bankruptcy judge signed an order confirming the Chapter 11
Plan on April 13. The plan is based on a $2.15 billion sale of
the baseball club and Dodger Stadium to Guggenheim Baseball
Management.
The Dodgers and (former owner) Frank McCourt unveiled the deal
with Guggenheim on March 28, 2012. The buyers acquired the team
for $2 billion. Mr. McCourt and certain affiliates of the
purchasers also formed a joint venture to acquire the parking lots
at Dodgers Stadium for an additional $150 million.
Members of the new ownership group include Mark Walter, chief
executive of Guggenheim Partners; Peter Guber, a Hollywood
producer and co-owner of the National Basketball Association's
Golden State Warriors; and Magic Johnson, a Hall of Fame
basketball player.
The bankruptcy began in June when the team was on the brink of
missing payroll because the commissioner of Major League Baseball
refused to approve a sale of television broadcasting rights.
The Second Amended Plan, filed on April 6, pays all creditors in
full, with the excess going to Mr. McCourt. The buyers consist of
partner Mark Walter of Guggenheim Partners, former Los Angeles
Lakers basketball player Magic Johnson, longtime baseball
executive Stan Kasten, Los Angeles entertainment executive Peter
Guber, and investors Bobby Patton and Todd Boehly.
About Los Angeles Dodgers
Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a
professional Major League Baseball club in the Los Angeles
metropolitan area. Frank McCourt, a Boston real-estate developer
who unsuccessfully bid for the Boston Red Sox, bought the Dodgers
from Rupert Murdoch's Fox Entertainment Group Inc. in 2004 for
$330 million. Mr. McCourt also bought the Dodgers Stadium from
Fox for $100 million.
Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr.
D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB
Commissioner Bud Selig rejected a television deal with News
Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for
June 30 and July 1. Fox Sports has exclusive cable television
rights for Dodgers games until the end of 2013 baseball season.
Chapter 11 filings were also made for LA Real Estate LLC, an
affiliated entity which owns Dodger Stadium, and three other
related holding companies.
The petition estimated assets of up to $500 million and debts of
up to $1 billion. In its schedules, the LA Dodgers baseball club
disclosed $78.0 million in assets and $4.70 million in
liabilities. LA Real Estate LLC disclosed $161.8 million in
assets and $0 in liabilities.
According to Forbes, the Dodgers is worth about $800 million,
making it the third most valuable baseball team after the New York
Yankees and the Boston Red Sox.
Judge Kevin Gross presides over the case. Lawyers at Young,
Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the
Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent. Public relations specialist Kekst and
Company has been hired for crisis support. Covington & Burling
LLP serves as special counsel.
An official committee of unsecured creditors has been appointed in
the case. The panel has tapped Lazard Freres & Co. as financial
adviser and investment banker, and Morrison & Foerster LLP and
Pinckney, Harris & Weidinger, LLC as counsel.
The LA Dodgers is the 12th sports team in North America to have
sought bankruptcy protection.
The reorganization is being financed with a $150 million unsecured
loan from the Commissioner of Major League Baseball. The loan
gives the Commissioner few of the controls lenders often demanded
from bankrupt companies.
MARIANA RETIREMENT FUND: Files Schedules of Assets and Debts
------------------------------------------------------------
The Northern Mariana Islands Retirement Fund filed with the
Bankruptcy Court its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $3,165,775
B. Personal Property $606,834,237
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $0
E. Creditors Holding
Unsecured Priority
Claims $0
F. Creditors Holding
Unsecured Non-priority
Claims $93,183
------------ -----------
TOTAL $610,000,012 $93,183
The Fund said $297,879,389 of its personal property consists of
receivables owed to the Debtor by the Commonwealth of the Northern
Mariana Islands and certain of the local government's agencies and
public corporations.
The Fund also said a significant portion of the Debtor's
unsecured, non-priority, liabilities consist of un-liquidated
amounts owed to Fund members. The Fund said liquidation of those
amounts will likely require completion of the Debtor's ongoing
actuarial analysis.
The Fund is seeking to file portions of its statement of financial
affairs under seal.
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.
The Office of the U.S. Trustee for Region 15 appointed seven
members to serve on the official committee of unsecured creditors
in the Chapter 11 case of the Northern Mariana Islands Retirement
Fund.
As reported by the Troubled Company Reporter, requests seeking
dismissal of the Fund's bankruptcy have been filed by two unnamed
clients of lawyer Bruce Jorgensen, the office of the United States
Trustee and the CNMI government. Two retirees and members of the
NMI Retirement Fund joined in the Dismissal Motion. A hearing has
been set for June 1 on the Motions to Dismiss.
The Commonwealth Ports Authority intervened in the case, seeking
dismissal of the petition. It is represented by:
Robert Tenorio Torres, Attorney at Law
P.O. Box 503758
Plata Dr., Whispering Palms
Chalan Kiya
Saipan, MP 96950
Tel: (670) 234-7850
Fax: (670) 234-5749
E-mail: rttlaw@pticom.com
MARIANA RETIREMENT FUND: Committee Wants Chapter 11 Case Dismissed
------------------------------------------------------------------
Alexie Villegas Zotomayor at Marianas Variety reports the official
committee of unsecured creditors of the Northern Mariana Islands
Retirement Fund now joins the swelling tide in favor of the
dismissal of the Fund's Chapter 11 bankruptcy petition.
According to the report, at the Commonwealth Retirement
Association meeting, director Sapuro Rayphand, a member of the
creditors committee, reported to the CRA board that the committee
unanimously adopted a position in favor of case dismissal.
The Creditors Committee met before the CRA meeting.
The report also relates the Committee is choosing which among
three Hawaii-based law firms to hire as counsel. The Committee
decided not to pick up a Texas- or a New York-based firm due to
the fees sought by those firms. According to the report, Mr.
Rayphand said one of the firms had already indicated favoring the
bankruptcy filing, which for him "does not represent our desire."
The report also relates Mr. Rayphand said he wanted the committee
to see what the two other firms have to offer before making the
decision to go with Gelber & Ingersoll.
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.
The U.S. Trustee and certain retirees have sought dismissal of the
Chapter 11 case, saying the Fund is not eligible to file one. A
hearing is slated for June 1 on the Motions to Dismiss.
MASTER SILICON: Delays Form 10-Q for First Quarter
--------------------------------------------------
Master Silicon Carbide Industries, Inc., filed a Form 12b-25
notifying that it requires additional time to prepare,
substantiate and verify the accuracy of its financial reports.
The Company is in the process of preparing and reviewing its
financial information. The process of compiling and disseminating
the information required to be included in the Form 10-Q for the
relevant fiscal quarter, as well as the completion of the required
review of its financial information, could not be completed
without incurring undue hardship and expenses.
About Master Silicon
Located in Lakeville, Connecticut, Master Silicon Carbide
Industries, Inc., through its indirectly wholly-owned operating
subsidiary Yili Master Carborundum Production Co., Ltd. ("Yili
China"), manufactures and sells in China mostly high quality
"green" silicon carbide and some lower-quality "black" silicon
carbide, a non-metallic compound that is widely used in industries
such as semiconductors, solar energy, ceramics, abrasives and
optoelectronics.
Child, Van Wagoner & Bradshaw, PLLC, in Salt Lake City, Utah,
issued a "going concern" qualification on the consolidated
financial statements for the year ended Dec. 31, 2011, citing
cash flow constraints, accumulated deficit, and recurring losses
from operations, which raised substantial doubt about the
Company's ability to continue as a going concern.
The Company reported a net loss of $3.14 million of $15.94 million
of revenues for 2011, compared with net income of $232,979 on
$12.95 million of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$27.97 million in total assets, $11.15 million in total
liabilities, $10.00 million of Redeemable Preferred Stock-A,
$10.00 million of Redeemable Preferred Stock-B, and a
stockholders' deficit of $3.18 million.
MEMC ELECTRONIC: Moody's Reviews 'B2' CFR/PDR for Downgrade
-----------------------------------------------------------
Moody's Investors Service placed the long-term ratings of MEMC
Electronic Materials, Inc. under review for downgrade -- corporate
family, probability of default and senior notes. Moody's also
lowered the speculative grade liquidity (SGL) rating to SGL-4 from
SGL-3. This rating review follows MEMC's much larger than expected
cash burn during the first quarter of 2012 and the announced
departure of several senior executives. The SGL downgrade reflects
the lower than expected cash position. The review will focus on:
(i) the working capital and long term financing needs of the solar
project development business, (ii) the impact of the recently
announced US tariffs on imports of Chinese-made solar panels,
(iii) the solar project development pipeline, (iv) the cash
operating costs of both the semiconductor wafer and solar wafer
manufacturing operations, (v) alternative sources of liquidity,
and (vi) management's strategy for the solar operations, which are
increasingly focused on the US market as financing in the European
market has become constrained. Moody's expects to conclude the
review within several weeks.
Downgrades:
Issuer: MEMC Electronic Materials, Inc.
Speculative Grade Liquidity Rating, Downgraded to SGL-4 from
SGL-3
On Review for Possible Downgrade:
Issuer: MEMC Electronic Materials, Inc.
Probability of Default Rating, Placed on Review for Possible
Downgrade, currently B2
Corporate Family Rating, Placed on Review for Possible
Downgrade, currently B2
Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently B3
Outlook Actions:
Issuer: MEMC Electronic Materials, Inc.
Outlook, Changed To Rating Under Review From Negative
The principal methodology used in rating MEMC was the Global
Semiconductor Industry Methodology published in November 2009.
Other methodologies used include Loss Given Default for
Speculative GradeIssuers in the US, Canada, and EMEA, published in
June 2009.
MEMC, based in St. Peters, Missouri, is a supplier of polysilicon
semiconductor wafers to semiconductor foundries and integrated
device manufacturers. MEMC also develops, constructs, and operates
solar energy power projects through its SunEdison LLC subsidiary.
MERITAGE HOMES: Fitch Affirms 'B+' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed its ratings for Meritage Homes
Corporation (NYSE: MTH), including the company's Issuer Default
Rating (IDR) at 'B+'. The Rating Outlook is Stable.
The ratings and Outlook for MTH are influenced by the company's
execution of its business model, conservative land policies,
geographic and product line diversity, acquisitive orientation and
healthy liquidity position.
While Fitch expects somewhat better prospects for the housing
industry this year, there are still significant challenges facing
the housing market, which are likely to meaningfully moderate the
early stages of this recovery. Nevertheless, MTH has the
financial flexibility to navigate through the still challenging
market conditions and continue to selectively and prudently invest
in land opportunities.
MTH will likely be profitable in 2012 and leverage and coverage
ratios should improve.
Builder and investor enthusiasm have surged so far in 2012, but
housing metrics have not kept pace. Single-family housing starts,
new home sales, and existing pending home sales dipped in February
relative to January and were below expectations. The decline in
the Case-Shiller home prices in January (versus December and year
over year) also was not reassuring. Certain March statistics were
somewhat stronger. In any case, for the large public homebuilders
spring has so far been a success. However, as Fitch noted in the
past, the housing recovery will likely occur in fits and starts.
Fitch's housing forecasts for 2012 have been raised since the
beginning of the year but still assume a relatively modest rise
off a very low bottom. In a slowly growing economy with slightly
muted distressed home sales competition, less competitive rental
cost alternatives, and new home inventories at historically low
levels, single-family housing starts should improve about 10%,
while new home sales increase approximately 8% and existing home
sales grow 4%.
MTH's sales are reasonably dispersed among its 14 metropolitan
markets within seven states. The company ranks among the top 10
builders in such markets as Houston, Dallas/Fort Worth, San
Antonio and Austin, TX, Orlando, FL, Phoenix, AZ, Riverside/San
Bernardino, CA, Denver, CO, and Sacramento, CA. The company also
builds in the East Bay/Central Valley, CA, Las Vegas, NV, Inland
Empire, CA, Tucson, AZ and Raleigh-Durham, NC. The company will
be opening its first communities in Tampa, FL during the second
quarter of 2012. Currently, about 65 - 70% of MTH's home
deliveries are to first and second time trade up buyers, 25 - 30%
to entry level buyers, less than 5% are to luxury home buyers and
approximately 5% to active adult (retiree) buyers.
MTH employs conservative land and construction strategies. The
company typically options or purchases land only after necessary
entitlements have been obtained so that development or
construction may begin as market conditions dictate.
Under normal circumstances, MTH extensively uses lot options, and
that is expected to be the future strategy in markets where it is
able to do so. The use of non-specific performance rolling
options gives the company the ability to renegotiate price/terms
or void the option which limits down side risk in market downturns
and provides the opportunity to hold land with minimal investment.
However, as of March 31, 2012 only 17.4% of MTH's lots were
controlled through options - a much lower than typical percentage
due to considerable option abandonments and write-offs in recent
years. Additionally, there are currently fewer opportunities to
option lots and, in certain cases, the returns for purchasing lots
outright are far better than optioning lots from third parties.
Total lots controlled, including those optioned, were 17,216 at
March 31, 2012. This represents a 5.1 year supply of total lots
controlled based on trailing 12 months deliveries. On the same
basis, MTH's owned lots represent a supply of 4.2 years.
MTH successfully managed its balance sheet during the severe
housing downturn, allowing the company to accumulate cash and pay
down its debt as it pared down inventory. The company had
unrestricted cash of $90.6 million and investments and securities
of $174 million at March 31, 2012. The company's debt totaled
$606.6 million at the end of the first quarter.
On April 10, 2012, MTH completed an offering of $300 million
aggregate principal amount of 7.00% senior notes due 2022.
Concurrent with the offering, through a tender offer, the company
repurchased an aggregate principal amount of approximately $259.2
million of its 6.25% senior notes due 2015. MTH also repurchased
an aggregate principal amount of about $26.1 million of its 7.731%
senior notes due 2017. The company intends to retire the
remaining $25.4 million, untendered 2015 notes through a call for
redemption and has provided notice of such call to the holders of
the 2015 notes.
MTH's next major debt maturity is in April 2017 when approximately
$100 million of senior subordinated notes mature.
Fitch expects MTH to be cash flow negative in 2012 by about $125
million as the company continues to rebuild its land position.
Fitch expects the company will moderately increase its land
spending in 2012 to about $300 million from the $246.6 million
spent in 2011. Fitch is comfortable with this strategy given the
company's liquidity position and debt maturity schedule. Fitch
expects that over the next few years MTH will maintain liquidity
(consisting of cash and investments and a revolving credit
facility) of at least $200 - 250 million, a level which Fitch
believes is appropriate given the challenges still facing the
industry.
Future ratings and Outlooks will be influenced by broad housing
market trends as well as company specific activity, such as trends
in land and development spending, general inventory levels,
speculative inventory activity (including the impact of high
cancellation rates on such activity), gross and net new order
activity, debt levels and especially free cash flow trends and
uses, and the company's cash position. Negative rating actions
could occur if the anticipated recovery in housing does not fully
materialize and the company prematurely steps up its land and
development spending, leading to consistent and significant
negative quarterly cash flow from operations and diminished
liquidity position. Positive rating actions may be considered if
the recovery in housing is better than Fitch's current outlook and
shows durability; MTH shows sustained improvement in credit
metrics; and the company continues to maintain a healthy liquidity
position.
Fitch has affirmed the following ratings for MTH with a Stable
Outlook:
-- Long-term IDR at 'B+';
-- Senior unsecured debt at 'BB-/RR3';
-- Senior subordinated debt at 'B-/RR6'.
The Recovery Rating (RR) of 'RR3' on the company's senior
unsecured debt indicates good recovery prospects for holders of
these debt issues. MTH's exposure to claims made pursuant to
performance bonds and joint venture debt and the possibility that
part of these contingent liabilities would have a claim against
the company's assets were considered in determining the recovery
for the unsecured debt holders. The 'RR6' on MTH's senior
subordinated debt indicates poor recovery prospects in a default
scenario. Fitch applied a liquidation value analysis for these
RRs.
MPM TECHNOLOGIES: Delays Form 10-Q for First Quarter
----------------------------------------------------
MPM Technologies, Inc., informed the U.S. Securities and Exchange
Commission that it will be delayed in filing its quarterly report
on Form 10-Q for the period ended March 31, 2012. The Company
said additional time is needed to prepare financial statement from
the Company's accounting data.
About MPM Technologies
Headquartered in Parsippany, N.J., MPM Technologies Inc.
(OTC BB: MPML) -- http://www.mpmtech.com/-- operates through its
three wholly owned subsidiaries: AirPol Inc., NuPower Inc. and MPM
Mining Inc. During the year ended Dec. 31, 2007, AirPol was the
only revenue generating entity. AirPol operates in the air
pollution control industry. It sells air pollution control
systems to companies in the United States and worldwide.
The company through its wholly owned subsidiary NuPower is engaged
in the development and commercialization of a waste-to-energy
process known as Skygas. These efforts are through NuPower's
participation in NuPower Partnership, in which MPM has a 58.21%
partnership interest. NuPower Partnership owns 85% of the Skygas
Venture. In addition to its partnership interest through NuPower
Inc., MPM also owns 15% of the Venture.
The Company's balance sheet at Sept. 30, 2010, showed
$1.17 million in total assets, $15.32 million in total
liabilities, all current, and a stockholders' deficit of
$14.15 million.
The Company recorded a net loss of $1.56 million for 2009 from a
net loss of $1.72 million for 2008.
NATIONAL HOLDINGS: Incurs $1.7MM Net Loss in March 31 Quarter
-------------------------------------------------------------
National Holdings Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $1.76 million on $33.21 million of total revenues
for the three months ended March 31, 2012, compared with a net
loss of $2.94 million on $33.65 million of total revenues for the
same period during the prior year.
The Company reported a net loss of $2.76 million on $58.60 million
of total revenues for the six months ended March 31, 2012,
compared with a net loss of $2.05 million on $68.62 million of
total revenues for the same period a year ago.
The Company had a net loss of $4.7 million on $126.5 million
of total revenues for fiscal year ended Sept. 30, 2011, compared
with a net loss of $6.6 million on $111.0 million on total
revenues for fiscal 2010.
The Company's balance sheet at March 31, 2012, showed $18.21
million in total assets, $22 million in total liabilities, $15,000
in non-controlling interest, and a $3.80 million stockholders'
deficit.
Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial
doubt about National Holdings' ability to continue as a going
concern. The independent auditors noted that the Company has
incurred significant losses and has a working capital deficit as
of Sept. 30, 2011.
Bankruptcy Warning
The Company said its quarterly report that its future is dependent
on its ability to sustain profitability and obtain additional
financing. If the Company fails to do so for any reason, it would
not be able to continue as a going concern and could potentially
be forced to seek relief through a filing under the U.S.
Bankruptcy Code.
A copy of the Form 10-Q is available for free at:
http://is.gd/XMoYTN
About National Holdings
New York, N.Y.-based National Holdings Corporation is a financial
services organization, operating primarily through its wholly
owned subsidiaries, National Securities Corporation, Finance
Investments, Inc., and EquityStation, Inc. The Broker-Dealer
Subsidiaries conduct a national securities brokerage business
through their main offices in New York, New York, Boca Raton,
Florida, and Seattle, Washington.
NCOAT INC: Amended Joint Plan of Reorganization Confirmed
---------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina confirmed nCoat, Inc., and its affiliates' amended joint
plan of reorganization dated Jan. 9, 2012.
As reported in the Troubled Company Reporter on Jan. 16, 2012,
nCoat Inc., the Plan provides for the orderly liquidation of
assets and the distribution of the Net Sales Proceeds to pay all
Allowed Administrative Expenses incurred through the Effective
Date, Allowed Priority Unsecured Claims, and Allowed Secured
Claims of the Debtors, with any remaining Net Sales Proceeds to be
divided equally between the estates of the Debtors and, after
payment of Allowed Administrative Expenses incurred after the
Effective Date, distributed to unsecured creditors in each case in
accordance with the priorities established by the Bankruptcy
Code. The Debtors do not anticipate that any excess funds will be
available from the subsidiary estates to pay claims of creditors
of nCoat. If confirmed, a claims review process regarding Allowed
Claims is anticipated to take roughly 180 days after the
Confirmation Date.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/NCOAT_dsamended.pdf
About nCoat Inc.
nCoat, Inc., filed for Chapter 11 protection (Bankr. M.D.N.C. Case
No. 10-11512) on Aug. 16, 2010. John A. Northern, Esq., and Vicki
L. Parrott, Esq., in Chapel Hill, North Carolina, represent the
Debtor. The Debtor disclosed $1,375,746 in assets and
$913,619,139 in debts.
Affiliates High Performance Coatings, Inc. (Bankr. M.D.N.C. Case
No. 10-11515); MCC Inc., dba Jet Hot (Bankr. M.D.N.C. Case No.
10-11514); and nTech Inc. (Bankr. M.D.N.C. Case No. 10-11513)
filed separate Chapter 11 petitions on Aug. 16, 2010.
Julie B. Pape, Esq., and William B. Sullivan, Esq., at Womble
Carlyle Sandridge & Rice, PLLC, in Winston-Salem, N.C., represent
the Official Committee of Unsecured Creditors.
On Sept. 28, 2010, the Bankruptcy Court approved the sale
substantially all of the Debtors' assets to Fort Ashford Funds,
LLC, subject to higher and better bids at an auction. No bids
were received by the Debtors other than the initial bid of
Fort Ashford. The sale closed on Oct. 1, 2010.
After the Sale Date, the Debtors ceased all business operations,
paid all undisputed secured claims, assumed and assigned certain
executory contracts and unexpired leases to the designee of Fort
Ashford, and retained two employees to close the books and records
and wind up the business affairs of the Debtors.
The Debtors, prior to the Sale Date, specialized in nanotechnology
research, licensing, and the commercialization, distribution and
application of nano-structured as well as multiple non-nano
structured surface coatings. The Debtors' specialized coatings
were used by the automotive, diesel engine, trucking, recreational
vehicle, motorcycle, aerospace and oil and gas industries for heat
management, corrosion resistance, friction reduction, bond
strength and appearance.
NEBRASKA BOOK: EBITDA at $39 Million for Fiscal 2012
----------------------------------------------------
Nebraska Book Company, Inc. and its affiliated debtors and debtors
in possession have completed their year-end financial closing
process for the fiscal year ended March 31, 2012. Preliminary
results indicate that, while revenue was in-line with forecasts,
the Company's EBITDA for the fiscal year ended March 31, 2012,
will fall short of forecasts.
The Company initially projected EBITDA of approximately $40
million to $43 million for the fiscal year; the Company currently
anticipates that their adjusted EBITDA (after adjusting for
approximately $17 million in non-recurring charges related to
shut-down costs at approximately 50 unprofitable off-campus
stores) will be approximately $39 million over that period.
The Company anticipates the causes of the EBITDA shortfall will
have only a minor negative effect on their go-forward business
plan, will not materially affect long-term prospects for growth,
nor will result in any material modifications to the Company's
plan of reorganization. Notwithstanding the adjusted EBITDA
shortfall, growth at the Company's wholesale rental program is
overall exceeding expectations and the Company remains confident
in the strength of their business model going forward.
Barry Major, the Company's Chief Operating Officer and President,
said, "We are thankfully nearing the end of our restructuring and
our go-forward business remains strong. We look forward to
emerging from chapter 11 and executing on our business plan."
The Company has made significant progress towards emerging from
chapter 11 over the past several months. The voting deadline for
the Company's Third Amended Joint Plan of Reorganization of
Nebraska Book Company, Inc., et al., Pursuant to Chapter 11 of the
Bankruptcy Code [Docket No. 1086] (the "Plan") is May 21, 2012.
The Company has scheduled a hearing to request confirmation of the
Plan for May 30, 2012.
About Nebraska Book
Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the
leading providers of new and used textbooks for college students
in the United States. Nebraska Book and seven affiliates filed
separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002
to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over
the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang
Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The
Debtors; restructuring advisors are AlixPartners LLC; the
investment bankers are Rothschild, Inc.; the auditors are Deloitte
& Touche LLP; and the claims agent is Kurtzman Carson Consultants
LLC. As of the Petition Date, the Debtors had consolidated assets
of $657,215,757 and debts of $563,973,688.
JPMorgan Chase Bank N.A., as administrative agent for the DIP
lenders, is represented by lawyers at Richards, Layton & Finger,
P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment
Management Inc., the DIP arranger, is represented by lawyers at
Bayard, P.A., and Willkie Farr & Gallagher LLP.
An ad hoc committee of holders of more than 50% of the Debtors'
Second Lien Notes is represented by lawyers at Brown Rudnick. An
ad hoc committee of holders of the Debtors' 8.625% unsecured
notes are represented by Milbank, Tweed, Hadley & McCloy LLP.
The Official Committee of Unsecured Creditors selected Lowenstein
Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow
Financial Inc. as financial advisers.
Nebraska Book has been unable to confirm a pre-packaged Chapter 11
plan that would have swapped some of the existing debt for new
debt, cash and the new stock, due to an inability to secure
$250 million in exit financing.
NEDAK ETHANOL: Incurs $3.6 Million Net Loss in First Quarter
------------------------------------------------------------
Nedak Ethanol, LLC, filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $3.59 million on $5.22 million of revenue for the three months
ended March 31, 2012, compared net income of $248,000 on $35
million of revenue for the same period a year ago.
NEDAK Ethanol reported a net loss of $781,940 on $152.11 million
of revenue in 2011, compared with a net loss of $2.08 million on
$94.77 million of revenue in 2010.
The Company's balance sheet at March 31, 2012, showed
$73.42 million in total assets, $33.68 million in total
liabilities, $10.80 million in preferred units Class B, and
$28.93 million in total members' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/AXNNGK
About NEDAK Ethanol
Atkinson, Neb.-based NEDAK Ethanol, LLC
-- http://www.nedakethanol.com/-- operates a 44 million gallon
per year ethanol plant in Atkinson, Nebraska, and produces and
sells fuel ethanol and distillers grains, a co-product of the
ethanol production process. Sales of ethanol and distillers
grains began in January 2009.
Amends Agreement with AgCountry
In February 2007, the Company entered into a master credit
agreement with AgCountry Farm Credit Services FCA regarding a
senior secured credit facility. As of Dec. 31, 2010, and
throughout 2011, the Company was in violation of several loan
covenants required under the original credit agreement and
therefore, the Company was in default under the credit agreement.
However, the Company entered into a forbearance agreement with
AgCountry which remained effective until June 30, 2011. This
default resulted in all debt under the original credit agreement
being classified as current liabilities effective as of Dec. 31,
2010. The loan covenants under the original credit agreement
included requirements for minimum working capital of $6,000,000,
minimum current ratio of 1.20:1.00, minimum tangible net worth of
$41,000,000, minimum owners' equity ratio of 50%, and a minimum
fixed charge coverage ratio of 1.25:1.00, and also included
restrictions on distributions and capital expenditures.
On Dec. 31, 2011, the Company and AgCountry entered into an
amended and restated master credit agreement pursuant to which the
parties agreed to restructure and re-document the loans and other
credit facilities provided by AgCountry.
Under the amended agreement, the Company is required to make level
monthly principal payments of $356,164 through Feb. 1, 2018.
Beginning on Sept. 30, 2012, and the last day of the first,
second, and third quarters thereafter, the Senior Lender will make
a 100% cash flow sweep of the Company's operating cash balances in
excess of $3,600,000 to be applied to the principal balance. In
addition, the Company is required to make monthly interest
payments at the one month LIBOR plus 5.5%, but not less than 6.0%.
The interest rate was 6.0% as of Dec. 31, 2011. In addition to
the monthly scheduled payments, the Company made a special
principal payment in the amount of $7,105,272 on Dec. 31, 2011.
As of Dec. 31, 2011, and 2010, the Company had $26,000,000 and
$38,026,321 outstanding on the loan, respectively.
NEOMEDIA TECHNOLOGIES: Incurs $165.5MM Net Loss in 1st Quarter
--------------------------------------------------------------
NeoMedia Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $165.53 million on $726,000 of revenue for the three
months ended March 31, 2012, compared with net income of $8.79
million on $369,000 of revenue for the same period during the
prior year.
The Company reported a net loss of $849,000 in 2011, compared
with net income of $35.09 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$7.88 million in total assets, $236.06 million in total
liabilities, all current, $4.84 million series C convertible
preferred stock, $989,000 series D preferred stock, and a
$234 million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/V8H5aT
About NeoMedia Technologies
Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile
barcode scanning solutions. The Company's technology allows
mobile devices with cameras to read 1D and 2D barcodes and provide
"one click" access to mobile content.
After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa,
FL, expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has suffered recurring losses from operations and has
ongoing requirements for additional capital investment.
NEONODE INC: Incurs $1.6 Million Net Loss in First Quarter
----------------------------------------------------------
Neonode, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.58 million on $1.16 million of net revenues for the three
months ended March 31, 2012, compared with a net loss of $9.72
million on $539,000 of net revenues for the same period during the
prior year.
The Company reported a net loss of $17.14 million in 2011,
compared with a net loss of $31.62 million in 2010.
The Company's balance sheet at March 31, 2012, showed $14.96
million in total assets, $2.80 million in total liabilities and
$12.16 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/luVjen
About Neonode Inc.
Lafayette, Calif.-based Neonode Inc. (OTC BB: NEON)
-- http://www.neonode.com/-- provides optical touch screen
solutions for hand-held and small to midsize devices.
NEONODE INC: Two Directors Elected at Annual Meeting
----------------------------------------------------
Neonode Inc. held its annual meeting of Stockholders on May 10,
2012, wherein:
-- Per Bystedt and Thomas Eriksson were reelected to the Board
of Directors for a three year term;
-- the advisory vote related to executive compensation was
ratified;
-- annual Say-on-Pay vote on executive compensation was
approved;
-- the appointment of KMJ Corbin & Company to serve as the
Company's independent auditors for the year ended Dec. 31,
2012, was ratified; and
-- the proposal to amend the Company's Certificate of
Incorporation to decrease the Company?s authorized stock was
ratified.
About Neonode Inc.
Lafayette, Calif.-based Neonode Inc. (OTC BB: NEON)
-- http://www.neonode.com/-- provides optical touch screen
solutions for hand-held and small to midsize devices.
The Company reported a net loss of $17.14 million in 2011,
compared with a net loss of $31.62 million in 2010.
The Company's balance sheet at March 31, 2012, showed $14.96
million in total assets, $2.80 million in total liabilities and
$12.16 million in total stockholders' equity.
NET TALK.COM: Incurs $3.5-Mil. Net Loss in March 31 Quarter
-----------------------------------------------------------
Net Talk.com, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a loss
applicable to common stockholders of $3.53 million on $1.05
million of revenue for the three months ended March 31, 2012,
compared with a loss applicable to common stockholders of
$24.16 million on $611,779 of revenue for the same period during
the prior year.
The Company reported a net loss of $26.17 million $2.72 million of
revenue for the year ended Sept. 30, 2011, compared with a net
loss of $6.30 million on $737,498 of revenue during the prior
year.
The Company's balance sheet at March 31, 2012, showed
$6.64 million in total assets, $12.46 million in total
liabilities, $9.19 million in redeemable preferred stock, and a
$15 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/bua6BF
About Net Talk.com
Based in Miami, Fla., Net Talk.com, Inc., is a telephone company,
who provides, sells and supplies commercial and residential
telecommunication services, including services utilizing voice
over internet protocol technology, session initiation protocol
technology, wireless fidelity technology, wireless maximum
technology, marine satellite services technology and other similar
type technologies.
NORD RESOURCES: Incurs $2.5 Million Net Loss in First Quarter
-------------------------------------------------------------
Nord Resources Corporation reported a net loss of $2.50 million on
$2.37 million of net sales for the three months ended March 31,
2012, compared with a net loss of $2.27 million on $4.75 million
of net sales for the same period during the prior year.
Nord Resources reported a net loss of $10.31 million on
$14.48 million of net sales in 2011, compared with a net loss of
$21.20 million on $28.64 million of net loss in 2010.
The Company's balance sheet at March 31, 2012, showed
$54.81 million in total assets, $65.15 million in total
liabilities, and a $10.34 million total stockholders' deficit.
"Since July 2010, when we suspended mining new ore in order to
reduce our expenses and maximize cash flow, we have been producing
copper by leaching the ore previously placed on our three pads and
processing it through the Johnson Camp Mine's SX-EW plant," said
Wayne Morrison, Chief Executive and Chief Financial Officer. "Our
financial results through the first three months of 2012 reflect
the expected continuing decline in copper production from the
leaching process, the recent decline in the average price of
copper, and the need to recognize abnormal production costs."
A copy of the press release is available for free at:
http://is.gd/Le88vS
About Nord Resources
Based in Tuczon, Arizona, Nord Resources Corporation
(TSX:NRD/OTCBB:NRDS.OB) -- http://www.nordresources.com/-- is a
copper mining company whose primary asset is the Johnson Camp
Mine, located approximately 65 miles east of Tucson, Arizona.
Nord commenced mining new ore in February 2009.
On June 2, 2010, Nord Resources appointed FTI Consulting to advise
on refinancing structures and strategic alternatives.
NYTEX ENERGY: Incurs $6.5 Million Net Loss in First Quarter
-----------------------------------------------------------
NYTEX Energy Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $6.56 million on $21.01 million of total revenues
for the three months ended March 31, 2012, compared with a net
loss of $16.80 million on $18.70 million of total revenues for the
same period during the prior year.
The Company's balance sheet at March 31, 2012, showed $76.92
million in total assets, $68.30 million in total liabilities and
$8.61 million in total equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/tDCpVu
About NYTEX Energy
Located in Dallas, Texas, Nytex Energy Holdings, Inc., is an
energy holding company with operations centralized in two
subsidiaries, Francis Drilling Fluids, Ltd. ("FDF") and NYTEX
Petroleum, Inc. ("NYTEX Petroleum"). FDF is a 35 year old full-
service provider of drilling, completion and specialized fluids
and specialty additives; technical and environmental support
services; industrial cleaning services; equipment rentals; and
transportation, handling and storage of fluids and dry products
for the oil and gas industry. NYTEX Petroleum, Inc., is an
exploration and production company focusing on early stage
development of minor oil and gas resource plays within the United
States.
For 2011, Whitley Penn LLP, in Dallas, Texas, expressed
substantial doubt about Nytex Energy's ability to continue as a
going concern. The independent auditors noted that the Company is
not in compliance with certain loan covenants related to two debt
agreements.
ONE PELICAN HILL: Villa del Lago Mansion Sold for $18.5 Million
---------------------------------------------------------------
Stefanos Chen, writing for The Wall Street Journal, reports an
unfinished, 16,600-square-foot mansion at One Pelican Hill Road
North in Newport Beach, California, once listed for $57 million
has sold at auction for just $18.5 million, according to Sean
O?Keefe, who represents the property's owners.
WSJ reports the mansion was last listed for $37 million before
being brought to auction in the last week of April. According to
WSJ, the deal is subject to approval of entities that include the
lender and a list of subcontractors. The buyer has not yet been
revealed.
WSJ recounts Mr. O'Keefe said real-estate agent John McMonigle
formed a limited partnership in 2003 to buy the 12.5-acre parcel
of land for $3.42 million. Mr. McMonigle did not return calls for
comment, and he is no longer represented by Mr. O?Keefe. Mr.
McMonigle's current attorney, Michael Nicastro, declined to
comment on the sale.
WSJ also notes Mr. O'Keefe's group took out several loans
including a $21.6 million loan in 2007 from La Jolla Bank, to
build the eight-bedroom, 17-bathroom estate. La Jolla Bank was
closed by regulators in 2010 and One West Bank acquired the loans.
WSJ recounts by early 2011, One West Bank sought foreclosure on
the property prompting the owners filed for Chapter 11 bankruptcy
protection. Mr. McMonigle left the partnership shortly before the
filing. WSJ notes Corey Gulbranson, a current managing member of
the partnership selling the property, said Mr. McMonigle resigned,
but would not comment on his reasons.
WSJ notes the property is still unfinished, and listing agent Rob
Giem, of HOM Sotheby's International Realty, estimates that the
buyer will have to put in another $3 million to complete the
original plans for the property. He said the home is about "90%
to 95%" complete.
About One Pelican Hill Road North
One Pelican Hill Road North LP, owned the Villa del Lago, a 12.5-
acre hillside property, once valued as high as $87 million,
featuring a 17,000-square-foot, three-story mansion, a private
lake, tennis court, vineyard and horse stables. It filed for
Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-17998) on
June 6, 2011, to halt a foreclosure sale by OneWest Bank that had
been scheduled for June 20.
Judge Robert N. Kwan presides over the case. Marc J. Winthrop,
Esq., at Winthrop Couchot PC, serves as the Debtor's bankruptcy
counsel. Spach Capaldi & Waggaman, LLP, serves as the Debtor's
special litigation counsel. In its petition, the Debtor estimated
assets and debts of $10 million to $50 million. The Debtor said
the value of the property is in excess of $30 million. The
petition was signed by Corey Gulbranson, managing member of VDL
One Pelican Hill, LLC, its general partner.
PATIENT SAFETY: Incurs $1.3 Million Net Loss in First Quarter
-------------------------------------------------------------
Patient Safety Technologies, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $1.30 million on $3.10 million of revenue
for the three months ended March 31, 2012, compared with a net
loss of $628,542 on $1.97 million of revenue for the same period
during the prior year.
The Company's balance sheet at March 31, 2012, showed $13.99
million in total assets, $5.09 million in total liabilities, all
current, and $8.90 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/wAWfDX
About Patient Safety Technologies
Patient Safety Technologies, Inc. (OTC: PSTX) --
http://www.surgicountmedical.com/-- through its wholly owned
operating subsidiary SurgiCount Medical, Inc., provides the
Safety-Sponge(TM) System, a system designed to improve the
standard of patient care and reduce health care costs by
preventing the occurrence of surgical sponges and other retained
foreign objects from being left inside patients after surgery.
RFOs are among one of the most common surgical errors.
PENINSULA GAMING: Boyd Acquistion No Impact on Moody's 'B2' CFR
---------------------------------------------------------------
Moody's Investors Service says Peninsula Gaming, LLC's B2
Corporate Family Rating (CFR) and stable outlook are not affected
by the announcement concerning the company's pending acquisition
by Boyd Gaming Corporation (NYSE:BYD, B2 stable) for total
consideration of $1.45 billion. The purchase price represents an
EBITDA multiple of 7.0x times based on the trailing 12-month
EBITDA of $109 million for Peninsula's Iowa and Louisiana
properties, an annualized run-rate for Peninsula's Kansas Star
Casino based on its first full quarter 2012 EBITDA of $26.8
million, and corporate expense of $10 million. The transaction is
subject to customary closing conditions and receipt of required
regulatory approvals, and is expected to close by the end of 2012.
If the transaction is closed and the company's bonds are paid in
full, Moody's will withdraw all ratings on Peninsula in accordance
with Moody's policies on rating withdrawals. In the interim,
Peninsula's ratings will continue to be based on a stand-alone
fundamentals.
Peninsula Gaming, LLC ("PGL") is a holding company whose primary
assets are its equity interests in its wholly owned subsidiaries.
PGL's main subsidiaries include (i) Diamond Jo, LLC ("DJL"), which
owns and operates the Diamond Jo casino in Dubuque, Iowa; (ii) The
Old Evangeline Downs, LLC ("EVD"), which owns and operates the
Evangeline Downs Racetrack and Casino in St. Landry Parish,
Louisiana, and four off-track betting parlors in Louisiana; (iii)
Diamond Jo Worth , LLC ("DJW"), which owns and operates the
Diamond Jo Worth casino in Worth County, Iowa; (iv) Belle of
Orleans, LLC which owns and operates Amelia Belle Casino (ABC)
located in Amelia, Louisiana; and (v) Kansas Star Casino, LLC
("KSC"), which owns and operates the newly opened Kansas Star
Casino, Hotel and Event Center in Mulvane, Kansas.
PMI GROUP: Wants to Sell Certificate to Safeco for $1.5 Million
---------------------------------------------------------------
BankruptcyData.com reports that PMI Group filed with the U.S.
Bankruptcy Court a motion for approval to sell Impact Funding LLC
Commercial Mortgage Pass Through Certificates Series 2001-A to
Liberty Mutual Group Asset Management on behalf its client Safeco
Insurance Company of America for 82% of its face value, or
approximately $1.5 million. The Court scheduled a June 6, 2012
hearing on the matter.
About The PMI Group
Del.-based The PMI Group, Inc., is an insurance holding company
whose stock had, until Oct. 21, 2011, been publicly-traded on the
New York Stock Exchange. Through its principal regulated
subsidiary, PMI Mortgage Insurance Co., and its affiliated
companies, the Debtor provides residential mortgage insurance in
the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor
disclosed $167,963,354 in assets and $770,362,195 in liabilities.
Stephen Smith signed the petition as chairman, chief executive
officer, president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP.
The Official Committee of Unsecured Creditors appointed in the
case retained Morrison & Foerster LLP and Womble Carlyle Sandridge
& Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company
serves as the Committee's financial advisor.
REAL ESTATE ASSOCIATES: No Investment in Yorkview & Mt. Union
-------------------------------------------------------------
Real Estate Associates Limited VII holds a 99.9% general partner
interest in Real Estate Associates IV, which, in turn, holds a
98.99% limited partnership interest in Yorkview Estates, Ltd. On
May 11, 2012, Yorkview sold its investment property to The Orlean
Company, an Ohio Corporation, in exchange for (i) full
satisfaction of the non-recourse note payable due to an affiliate
of the Purchaser, (ii) the assumption of the outstanding mortgage
loan encumbering the property, and (iii) the sum of $150,000.
After payment of closing costs, the Partnership received a
distribution from the sale of Yorkview of $105,000. The
Partnership had no investment balance remaining in Yorkview at
March 31, 2012.
REA IV also holds a 98.99% limited partnership interest in Mount
Union Apartments, Ltd. On May 11, 2012, Mount Union sold its
investment property to the Purchaser in exchange for (i) full
satisfaction of the non-recourse note payable due to an affiliate
of the Purchaser, (ii) the assumption of the outstanding mortgage
loan encumbering the property, and (iii) the sum of one dollar.
The Partnership did not receive any proceeds from the sale. The
Partnership had no investment balance remaining in Mount Union at
March 31, 2012.
About Real Estate Associates
Real Estate Associates Limited VII is a limited partnership which
was formed under the laws of the State of California on May 24,
1983. On February 1, 1984, the Partnership offered 2,600 units
consisting of 5,200 limited partnership interests and warrants to
purchase a maximum of 10,400 additional limited partnership
interests through a public offering managed by E.F. Hutton Inc.
The Partnership received $39,000,000 in subscriptions for units of
limited partnership interests (at $5,000 per unit) during the
period from March 7, 1984 to June 11, 1985.
The Partnership will be dissolved only upon the expiration of 50
complete calendar years -- December 31, 2033 -- from the date of
the formation of the Partnership or the occurrence of various
other events as specified in the Partnership agreement. The
principal business of the Partnership is to invest, directly or
indirectly, in other limited partnerships which own or lease and
operate Federal, state and local government-assisted housing
projects.
The general partners of the Partnership are National Partnership
Investments Corp., a California Corporation, and National
Partnership Investments Associates II. The business of the
Partnership is conducted primarily by NAPICO, a subsidiary of
Apartment Investment and Management Company, a publicly traded
real estate investment trust.
The Partnership holds limited partnership interests in 11 local
limited partnerships as of both March 31, 2010, and December 31,
2009. The Partnership also holds a general partner interest in
Real Estate Associates IV, which, in turn, holds limited
partnership interests in nine additional Local Limited
Partnerships; therefore, the Partnership holds interests, either
directly or indirectly through REA IV, in twenty (20) Local
Limited Partnerships. The general partner of REA IV is NAPICO.
The Local Limited Partnerships own residential low income rental
projects consisting of 1,387 apartment units at both March 31,
2010, and December 31, 2009. The mortgage loans of these projects
are payable to or insured by various governmental agencies.
The Partnership reported a net loss of $861,000 on $0 of revenue
in 2011, compared with net income of $171,000 on $0 of revenue in
2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.23 million
in total assets, $21.37 million in total liabilities and a $20.14
million total partners' deficit.
After auditing the 2011 results, Ernst & Young LLP, in Greenville,
South Carolina, expressed substantial doubt about the
Partnership's ability to continue as a going concern. The
independent auditors noted that the Partnership continues to
generate recurring operating losses. In addition, notes payable
and related accrued interest totalling $16.2 million are in
default due to non-payment.
REDDY ICE: Expects to Emerge From Bankruptcy in Late May
--------------------------------------------------------
Reddy Ice Holdings, Inc. disclosed that the U.S. Bankruptcy Court
for the Northern District of Texas, Dallas Division confirmed the
first amended joint plan of reorganization of the Company and its
direct subsidiary, Reddy Ice Corporation under Chapter 11 of the
Bankruptcy Code. The Company currently expects to emerge from
Chapter 11 in late May 2012 after the conditions to effectiveness
of the Plan are satisfied.
All voting classes of creditors voted in favor of the Plan, with
over 80% in amount and over 90% in number of the Debtors' first
and second lien noteholders and 100% of the Company's senior
discount noteholders voting in favor of the Plan.
The Plan will substantially deleverage the Debtors' balance sheet
and position the Debtors to be a financially stronger enterprise
post-emergence. Through the Plan, (i) the Debtors' financial debt
will be reduced by approximately $145 million, (ii) the Debtors'
cash interest expense will be reduced by approximately $20 million
annually, and (iii) the Debtors will receive new equity capital
infusions totaling approximately $25 million, including a $7.5
million preferred stock investment by Centerbridge Capital
Partners II, L.P. or one or more of its parallel funds and a $17.5
million preferred stock rights offering to holders of the Debtors'
pre-petition second lien secured notes backstopped by
Centerbridge.
In connection with the Plan, the Debtors entered into, and the
Bankruptcy Court approved, settlement agreements in respect of
certain outstanding litigation matters including (i) the putative
direct purchaser class action claims, (ii) the putative indirect
purchaser class action claims and (iii) the putative securities
class action claims.
Under the Plan, holders of common stock of the Company will share
in approximately $2.4 million in cash, with the option for holders
of at least 25,000 shares of common stock to elect to receive
common stock of the reorganized Company in lieu of cash. Subject
to certain conditions, in the event that the Company consummates
an acquisition of Arctic Glacier Income Fund, holders of common
stock of the Company will share in an additional approximately
$1.2 million in cash or, with respect to holders who elected to
receive common stock of the reorganized Company, additional common
shares of the reorganized Company.
Gilbert M. Cassagne, the Company's Chairman, Chief Executive
Officer and President, said, "The confirmation of our Plan
represents the last major milestone prior to completing our
restructuring and we are proud of what we have accomplished in
partnership with Centerbridge and other stakeholders. We believe
that we have established a foundation to emerge as a stronger and
more competitive company without the distraction of any material
ongoing litigation and with the resources to execute on our
strategic vision. I would like to thank our customers and vendors
for their support throughout this process as well as our employees
for their ongoing commitment to Reddy Ice."
DLA Piper LLP (US) is serving as the Company's legal advisor, and
Jefferies & Company, Inc. is serving as the Company's financial
advisor.
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.
ROOMSTORE INC: Will Have Consumer Privacy Ombudsman
---------------------------------------------------
RoomStore, Inc. sought and obtained permission to appoint a
consumer privacy ombudsman in connection with the Debtor's
proposed sale of its customer information for its stores within
the state of Texas.
The Debtor is seeking to sell certain assets to Furniture Asset
Acquisition, LLC.
The United States Trustee is directed to appoint one disinterested
person to serve as the consumer privacy ombudsman.
About RoomStore Inc.
Richmond, Virginia-based RoomStore, Inc., operates retail
furniture stores and offers home furnishings through
Furniture.com, a provider of Internet-based sales opportunities
for regional furniture retailers. RoomStore was founded in 1992
in Dallas, Texas, with four retail furniture stores. With more
than $300 million in net sales for its fiscal year ending 2010,
RoomStore was one of the 30 largest furniture retailers in the
United States.
RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case
No. 11-37790) on Dec. 12, 2011, following store-closing sales at
four of its retail stores, located in Hoover, Alabama;
Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore,
Maryland. When it filed for bankruptcy, the Company operated a
chain of 64 retail furniture stores, including both large-format
stores and clearance centers in eight states: Pennsylvania,
Maryland, Virginia, North Carolina, South Carolina, Florida,
Alabama, and Texas. It also had five warehouses and distribution
centers located in Maryland, North Carolina, and Texas that
service the Retail Stores.
RoomStore also owns 65% of Mattress Discounters Group LLC, which
operates 83 mattress stores (as of Aug. 31, 2011) in the states of
Delaware, Maryland and Virginia and in the District of Columbia.
RoomStore acquired the Mattress Discounters stake after it filed
its second bankruptcy in 2008. Mattress Discounters sought
Chapter 11 relief on Sept. 10, 2008 (Bankr. D. Md. Case Nos.
08-21642 and 08-21644). It filed the first Chapter 11 bankruptcy
on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330), and emerged on
March 14, 2003.
Judge Douglas O. Tice, Jr., presides over RoomStore's case.
Lawyers at Lowenstein Sandler PC and Kaplan & Frank, PLC serve as
the Debtor's bankruptcy counsel. FTI Consulting, Inc., serves as
the Debtor's financial advisors and consultants.
RoomStore's balance sheet at Aug. 31, 2011, showed $70.4 million
in total assets, $60.3 million in total liabilities, and
stockholders' equity of $10.1 million. The petition was signed by
Stephen Girodano, president and chief executive officer.
Liquidator Hilco Merchant Resources, Inc., is represented in the
case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert
S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler
Fleischer, P.C.
The U.S. Trustee for Region 4 named seven members to the official
committee of unsecured creditors in the case.
SAVOY GROUP: Case Summary & 13 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: The Savoy Group
3620 Highway 280
Alexander City, AL 35010
Bankruptcy Case No.: 12-31193
Chapter 11 Petition Date: May 16, 2012
Court: U.S. Bankruptcy Court
Middle District of Alabama (Montgomery)
Judge: William R. Sawyer
Debtor's Counsel: George W. Thomas, Esq.
KAUFMAN, GILPIN, MCKENZIE, P.C.
P.O. Drawer 4540
Montgomery, AL 36103-4540
Tel: (334) 244-1111
Fax: (334) 244-1969
E-mail: gthomas@kgmlegal.com
Scheduled Assets: $4,710,000
Scheduled Liabilities: $2,612,903
A copy of the Company's list of its 13 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/almb12-31193.pdf
The petition was signed by Narendra Patel, manager.
SEARCHMEDIA HOLDINGS: Incurs $13.4 Million Net Loss in 2011
-----------------------------------------------------------
Searchmedia Holdings Limited filed with the U.S. Securities and
Exchange Commission its annual report on Form 20-F disclosing a
net loss of $13.45 million on $55.57 million of advertising and
services revenues in 2011, a net loss of $46.63 million on $48.96
million of advertising services revenues in 2010, and a net loss
of $22.64 million on $37.74 million of advertising services
revenues in 2009.
The Company's balance sheet at Dec. 31, 2011, showed
$50.44 million in total assets, $63.90 million in total
liabilities and a $13.45 million total shareholders' deficit.
In its audit report accompanying the 2011 results, Marcum
Bernstein & Pinchuk LLP, in New York, noted that the Company has
suffered recurring losses and has a working capital deficiency of
approximately $31,000,000 at Dec. 31, 2011, which raises
substantial doubt about its ability to continue as a going
concern.
A copy of the Form 20-F is available for free at:
http://is.gd/3aUZVv
About SearchMedia
SearchMedia is a leading nationwide multi-platform media company
and one of the largest operators of integrated outdoor billboard
and in-elevator advertising networks in China. SearchMedia
operates a network of high-impact billboards and one of China's
largest networks of in-elevator advertisement panels in 50 cities
throughout China. Additionally, SearchMedia operates a network of
large-format light boxes in concourses of eleven major subway
lines in Shanghai. SearchMedia's core outdoor billboard and in-
elevator platforms are complemented by its subway advertising
platform, which together enable it to provide a multi-platform,
"one-stop shop" services for its local, national and international
advertising clients.
SECUREALERT INC: Incurs $2.5-Mil. Net Loss in March 31 Quarter
--------------------------------------------------------------
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common stockholders of $2.58 million on $4.90
million of total revenues for the three months ended March 31,
2012, compared with a net loss attributable to common stockholders
of $2.92 million on $3.88 million of total revenues for the same
period a year ago.
The Company reported a net loss attributable to common
stockholders of $4.80 million on $10.45 million of total revenues
for the six months ended March 31, 2012, compared with a net loss
attributable to common stockholders of $5.60 million on $7.56
million of total revenues for the same period during the prior
year.
The Company reported a net loss of $9.85 million on $17.96 million
of total revenues for the fiscal year ended Sept. 30, 2011,
compared with a net loss of $13.92 million on $12.45 million of
total revenues during the prior year.
The Company's balance sheet at March 31, 2012, showed $24.76
million in total assets, $10.24 million in total liabilities and
$14.52 million in total equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/9lPHXR
About SecureAlert Inc.
Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA)
-- http://www.securealert.com/-- is an international provider of
electronic monitoring systems, case management and services widely
utilized by more than 650 law enforcement agencies worldwide.
For fiscal 2011, the Company's independent auditors expressed
substantial doubt about the Company's ability to continue as a
going concern. Hansen, Barnett & Maxwell, P.C., in Salt Lake
City, Utah, noted that the Company has incurred losses, negative
cash flows from operating activities and has an accumulated
deficit.
SFW ENTERPRISES: Buyer Not Entitled to Damages Against Landlord
---------------------------------------------------------------
In the case, DDR SAU NASHVILLE WILLOWBROOK, LLC, Plaintiff, v. R&M
IMAGES, INC., d/b/a CICI'S PIZZA, Defendant, Case No. 308-09966
(Bankr. M.D. Tenn.), DDR SAU Nashville Willowbrook, as landlord,
sued to repossess real property located at 61 East Thompson Lane,
Nashville, Tennessee, and for judgment against R&M Images, Inc.,
d/b/a CiCi's Pizza for unpaid rents or the value of its occupancy
since it began operating from the Property in 2009. In response,
R&M, which acquired the lease from SFW Enterprises Nashville,
Inc., asserts that the Landlord's claims are barred by laches or
equitable estoppel, and R&M seeks damages against the Landlord for
loss of revenues caused by the Landlord's failure to lease the
Property under the terms of the Court's prior orders.
In a May 15 Memorandum Opinion available at http://is.gd/GJNtb7
from Leagle.com, Bankruptcy Judge Marian F. Harrison ruled that
the Landlord is entitled to unpaid rents and that R&M is not
entitled to any damages.
SFW Enterprises Nashville, Inc., operated a CiCi's Pizza
restaurant on the Property. On Oct. 27, 2008, SFW Enterprises
filed its voluntary Chapter 11 petition. Thereafter, on Aug. 15,
2009, the U.S. Trustee appointed Gary M. Murphey to serve as the
Chapter 11 Trustee in the bankruptcy case. The Court approved the
appointment on Aug. 18, 2009.
On Nov. 19, 2009, the Chapter 11 Trustee filed an expedited motion
for the approval of assignment of unexpired lease and an expedited
motion to sell substantially all of the estate assets. The Asset
Purchase Agreement provided that R&M would purchase the franchise
and assume the Debtor's lease on the real property. The rent
would stay the same as under the Debtor's lease, however, the
first three months would be rent free with the provision that the
lease be extended an additional three months. Default amounts
owed by the Debtor under the lease were to be forgiven as of the
closing date for $10.
The Landlord did not participate at anytime during the process,
and the Asset Purchase Agreement specifically provided that R&M
was required to work out an agreement with the Landlord regarding
rental obligations. The Chapter 11 Trustee's motions were granted
by the Court on Nov. 25, 2009.
David W. Houston, IV, Esq., represented the Chapter 11 Trustee in
the bankruptcy proceedings. He testified that the Chapter 11
Trustee tried to get the Landlord involved in the process for
several months but was unsuccessful. Mr. Houston further
testified that while he was certain that the Landlord received
notice of the motions, the Landlord remained unresponsive. R&M
completed its purchase of the franchise and certain personal
property used to operate a CiCi's Pizza restaurant through the
Chapter 11 Trustee on Nov. 18, 2010.
Mr. Houston testified that Ronald Neff, the owner of R&M, was
aware of the circumstances regarding the Landlord but chose to go
forward with the sale. Moreover, Mr. Houston testified that Mr.
Neff was never told that the Landlord could be forced to accept
the terms of the lease. Mr. Neff testified that he believed that
an agreement had been reached with the Landlord. Regardless, it
is uncontested that R&M has never had a lease agreement with the
Landlord.
Despite having no lease agreement, R&M operated the CiCi's
restaurant at the Property, beginning on Dec. 1, 2009. The sale
was completed on Nov. 18, 2010, and three months later, Mr. Neff
estimated common area maintenance charges and sent a check for
$8,700 to the Landlord to cover rent for the partial month of
February 2011 and for the month of March 2011. After a
representative of the Landlord notified Mr. Neff that R&M owed
$200,000, Mr. Neff stopped payment on the check and contacted an
attorney. R&M has not paid any rent for the location, and the
Landlord has not received any rent or compensation for the use of
the Property since prior to January 2010.
Mr. Neff testified the Landlord's failure to sign a lease
agreement effectively precluded R&M from making necessary upgrades
to the location and from investing in any advertising or promotion
of the location. He estimated R&M's total losses at this location
to be in excess of $120,000.
The Landlord finally filed a complaint in state court to remove
R&M from the premises on Aug. 16, 2011. The action was removed to
the Bankruptcy Court on Sept. 26, 2011.
SHENGDATECH INC: Submits Chapter 11 Plan of Reorganization
----------------------------------------------------------
ShengdaTech, Inc. has filed a Chapter 11 Plan of Reorganization
and proposed Disclosure Statement with the U.S. Bankruptcy Court
for the District of Nevada.
The Bankruptcy Court has set June 25, 2012 as the hearing date on
the adequacy of the Disclosure Statement. Assuming the Disclosure
Statement is approved on June 25, 2012, the Company is targeting
Aug. 30, 2012 for confirmation of the Plan.
If the Plan is confirmed, it would provide for the wind down of
the U.S. public Company's affairs and the distribution of
available assets to creditors. The Plan establishes, among other
things, a liquidating trust that, in its discretion, will pursue
the Company's outstanding litigation in the People's Republic of
China, hold and ultimately sell the Company's shares of Faith
Bloom Limited, the Company's wholly-owned subsidiary, execute,
process and facilitate distributions to holders of claims and
equity interests, and resolve disputed claims. Confirmation of
the Plan is subject to a number of conditions, including
Bankruptcy Court approval of the Plan and Disclosure Statement,
the execution of definitive documentation, the establishment of a
liquidating trust and appointment of a liquidating trustee
pursuant to a liquidating trust agreement, and the receipt of
necessary acceptances from creditor classes and equity interest
holders. The Company believes that the Plan provides the best,
most cost-effective and most prompt possible recovery to holders
of claims or equity interests.
The Chapter 11 Plan
The Plan provides for the wind-down of the Debtor's affairs and
the Distribution of the Debtor's remaining assets to Creditors.
The Plan establishes, among other things, a Liquidating Trust that
will pursue the PRC litigation, hold and ultimately sell the Faith
Bloom's shares, prosecute certain Causes of Action, pursue any
objections to Claims, execute the provisions governing
Distributions to Holders of Allowed Claims or Allowed Equity
Interests and facilitate the process for resolving Disputed Claims
Filed against the Debtor.
The Plan will be funded by the cash held by the Debtor as of the
Effective Date, and thereafter by the proceeds of the Liquidating
Trust Assets.
The classification and treatment of claims under the plan are:
A. Unclassified (Administrative Claims) will receive: (a)
cash equal to the amount of such Allowed Administrative
Claim; or (b) other treatment as agreed to by the Holder.
The estimated amount of administrative claims is $900,000
and the recovery is expected to be 100%.
B. Class 1 (Other Priority Claims) will receive (a) cash
equal to the amount of the Allowed Class 1 Claim; or (b)
other treatment as agreed to by the Holder. The estimated
recovery is expected to be 100%.
C. Class 2 (Secured Claims) will receive (a) one of the
treatments specified in Section 1124 of the Bankruptcy
Code; or (b) other treatment as agreed to by the Holder.
The estimated recovery is expected to be 100%.
D. Class 3 (General Unsecured Claims) will receive its Pro
Rata share of Liquidating Trust Assets remaining after
payment in full in cash of all prior claims and expenses
of the Liquidating Trust. The estimated amount of general
unsecured claims is $173 million and the recovery is
unknown but is expected to be more than 1%.
E. Class 4 (Noteholders' Securities Claims) will receive its
Pro Rata share of Liquidating Trust Assets remaining after
payment of all prior claims and any expenses of the
Liquidating Trust. The recovery is unknown but is
expected to be more than 0%.
F. Class 5 (Shareholders' Securities Claims) will receive its
Pro Rata share of Liquidating Trust Assets remaining after
payment of all prior claims and any expenses of the
Liquidating Trust. The recovery is unknown but is
expected to be more than 0%.
G. Class 6 (Equity Interests) will receive its Pro Rata share
of Liquidating Trust Assets remaining after payment of all
prior claims and any expenses of the Liquidating Trust.
The recovery is unknown but is expected to be more
than 0%.
A full text copy of the disclosure statement is available for free
at http://bankrupt.com/misc/SHENGDATECH_INC_ds.pdf
About ShengdaTech
Headquartered in Shanghai, China, ShengdaTech, Inc., makes nano
precipitated calcium carbonate for the tire industry.
ShengdaTech converts limestone into nano-precipitated calcium
carbonate (NPCC) using its proprietary and patent-protected
technology. NPCC products are increasingly used in tires, paper,
paints, building materials, and other chemical products. In
addition to its broad customer base in China, the Company
currently exports to Singapore, Thailand, South Korea, Malaysia,
India, Latvia and Italy.
ShengdaTech sought Chapter 11 bankruptcy protection from creditors
(Bankr. D. Nev. Case No. 11-52649) on Aug. 19, 2011, in Reno,
Nevada, in the United States.
The Shanghai-China based company said in its bankruptcy filing it
would fire all of its officers and restructure to try to recover
from an accounting scandal.
The Company disclosed US$295.4 million in assets and US$180.9
million in debt as of Sept. 30, 2011.
The Company's legal representative in its Chapter 11 case is
Greenberg Traurig, LLP. On Aug. 23, 2011, the Court entered an
interim order confirming the Board of Directors Special
Committee's appointment of Michael Kang as the Debtor's chief
restructuring officer.
Alvarez & Marsal North America, LLC, is the Company's chief
restructuring officer.
As reported in by the Troubled Company Reporter on Sept. 7, 2011,
the United States Trustee appointed AG Ofcon, LLC, The Bank of New
York, Mellon (in its role as indenture trustee for bondholders),
and Zazove Associates, LLC, to serve on the Official Committee of
Unsecured Creditors of ShengdaTech, Inc.
Hogan Lovells US serves as counsel for ShengdaTech's official
committee of unsecured creditors.
SHENANDOAH LIFE: Exits Receivership After $60MM Funding
-------------------------------------------------------
Shenandoah Life Insurance Co. disclosed that following a $60
million capital infusion, it has successfully exited receivership
-- a rare occurrence in the industry.
Shenandoah Life, which has been serving policyholders since its
founding in 1914, will continue to be based in Roanoke as a
subsidiary of its new owner, privately held Prosperity Life
Insurance Group LLC. Prosperity Life is led by an experienced
group of insurance and investment professionals, including Jose
Montemayor, the former three-term Commissioner of the Texas
Department of Insurance, who will join Shenandoah's newly
appointed Board of Directors.
The transaction, finalized today by order of the Virginia State
Corporation Commission, means the company will resume normal
operations, including continuing to fulfill all of its commitments
to policyholders.
"Very few insurance companies have emerged from receivership to
resume business. Shenandoah's ability to do so is a tribute to the
company's solid operations and talented employees," said
Montemayor, President of Prosperity Life. "We sincerely
appreciate the patience and loyalty of our policyholders and
agents throughout the nation as we worked through the legal and
regulatory process. With the receivership behind us, we look
forward to continuing a proud heritage of outstanding service."
The company today also introduced industry veteran Hans
Carstensen, former President and CEO of Aviva Life Insurance Co.,
as Shenandoah Life's new Roanoke-based President and Chief
Executive Officer.
"Policyholders can be assured that Shenandoah Life policies remain
secure and that we will continue to provide the high-quality
customer service they expect," Carstensen said. "We are working
diligently to honor the needs of our customers and agents as we
re-invent our company.
"We would not be here if it weren't for the dedication, loyalty
and commitment of our employees, which was certainly a factor in
Prosperity Life's decision to invest in Shenandoah Life,"
Carstensen added.
He added that Shenandoah Life is committed to the Roanoke Valley
community.
"This important step out of receivership gives us a chance to once
again be fully involved and engaged in the community," Carstensen
said. "We intend to support the Roanoke Valley's deep tradition of
neighbors helping neighbors, and we look forward to celebrating
our 100th anniversary in Roanoke in 2014."
About Hans Carstensen
Hans Carstensen was previously President and CEO of Aviva Life
Insurance Co. from 1996-2007. Aviva USA and its associated
subsidiaries were the U.S. operations of Aviva plc, which was the
fifth largest insurance conglomerate in the world at that time.
Prior to leaving Aviva USA, Carstensen assisted Aviva plc in
acquiring the AmerUs Group of insurance companies, subsequently
combining the two organizations.
Earlier in his career he served in key roles at GNA Corp. and GE
Financial Assurance, an insurance subsidiary of GE Capital. He
also worked at Weyerhaeuser Co. in finance and lobbying roles.
Carstensen received his MBA in finance and bachelor's degree in
political science from Stanford University.
About Shenandoah Life
Shenandoah Life Insurance Co., founded in 1914 and based in
Roanoke, Va., is an insurance company specializing in providing
life insurance, specialty health insurance and annuities to
middle-market consumers across the country. Shenandoah has more
than 175,000 insurance policies in-force, providing its customers
with solutions to help protect against unexpected loss and to
assist in building a strong financial foundation for retirement.
Shenandoah has more than $1.4 billion in assets. Prosperity Life
was selected to sponsor the rehabilitation, conversion and
acquisition of Shenandoah Life, which was completed in May 2012.
SOUTHBRIDGE MALL: Continues Operation Amid Receivership
-------------------------------------------------------
Globe Gazette reports that Southbridge Mall officials said it will
continue to operate as it always has despite being placed in
receivership with at least $12.6 million in debts.
Mall Associates LLC, the Minnesota company that owns the mall, has
more than $10 million in past-due mortgage payments and another $2
million in penalties and other fees, according to legal papers
filed this month by U.S. Bank National Association, according to
Globe Gazette. The report relates that the bank filed foreclosure
papers in Cerro Gordo County District Court on May 9.
Globe Gazette notes that Judge Colleen Weiland previously granted
the bank's request that the mall property be placed into
receivership with Jones Lang LaSalle Americas Inc.
The report discloses that Glenys Schloemer, mall manager, said the
mall is 85 percent occupied and only one of its 34 tenants is
behind in the rent.
Globe Gazette relays that U.S. Bank National Association,
headquartered in Minneapolis and holder of the mortgage, said in
court papers that Mall Associates signed a promissory note for the
principal amount of $10.6 million on Sept. 17, 2004, and made
other financial commitments.
No payment has been made on the principal or the interest since
July 2011, the report adds.
Globe Gazette, citing court papers, notes that as of March 16,
Mall Associates owed:
- the unpaid principal balance of $9,638, 881,
- accrued interest of $405,676,
- default interest of $995,742,
- interest accruing after March 16 at a rate of $3,331 per
day,
- late charges of $69,111,
- a prepayment premium of $1,294,330,
- verification, document processing, release and termination
fees of $442, and
- protective advances of $73.
Jones Lang LaSalle is headquartered in Chicago but its retail
division headquarters are in Atlanta.
SPANISH BROADCASTING: Incurs $3.6 Million Net Loss in Q1
--------------------------------------------------------
Spanish Broadcasting System, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $3.66 million on $32.09 million of net
revenue for the three months ended March 31, 2012, compared with
net income of $310,000 on $30.77 million of net revenue for the
same period during the prior year.
The Company's balance sheet at March 31, 2012, showed
$468.90 million in total assets, $417.37 million in total
liabilities, $92.34 million in cumulative exchangeable redeemable
preferred stock, and a $40.82 million total stockholders' deficit.
"Our first quarter financial results improved considerably over
the prior year," commented Raul Alarc¢n, Jr., Chairman and CEO.
"Moreover, we have continued to strengthen our operations through
strategic investments in our content, marketing and digital
resources. We remain committed to employing a disciplined
approach to managing our operations, with the goal of driving
improved financial results. Looking ahead, the advertising market
remains volatile, but our brands remain strong across our market
footprint and we are continuing to build on our revitalized sales
force. We remain very optimistic about our long-term outlook
given the ongoing dramatic growth of the Hispanic population and
the increasing need for advertisers to pursue this important and
influential audience."
A copy of the Form 10-Q is available for free at:
http://is.gd/2Bo0ow
About Spanish Broadcasting
Headquartered in Coconut Grove, Florida, Spanish Broadcasting
System, Inc. -- http://www.spanishbroadcasting.com/-- owns and
operates 21 radio stations targeting the Hispanic audience. The
Company also owns and operates Mega TV, a television operation
with over-the-air, cable and satellite distribution and affiliates
throughout the U.S. and Puerto Rico. Its revenue for the twelve
months ended Sept. 30, 2010, was approximately $140 million.
* * *
In November 2010, Moody's Investors Service upgraded the corporate
family and probability of default ratings for Spanish Broadcasting
System, Inc., to 'Caa1' from 'Caa3' based on improved free cash
flow prospects due to better than anticipated cost cutting and the
expiration of an unprofitable interest rate swap agreement.
Moody's said Spanish Broadcasting's 'Caa1' corporate family rating
incorporates its weak capital structure, operational pressure in
the still cyclically weak economic climate, generally narrow
growth prospects (though Spanish language is the strongest growth
prospect) given the maturity and competitive pressures in the
radio industry, and the June 2012 maturity of its term loan
magnify this challenge.
In July 2010, Standard & Poor's Ratings Services raised its
corporate credit rating on Miami, Fla.-based Spanish Broadcasting
System Inc. to 'B-' from 'CCC+', based on continued improvement in
the company's liquidity position. The rating outlook is stable.
"The rating action reflects S&P's expectation that, despite very
high leverage, SBS will have adequate liquidity over the
intermediate term to meet debt maturities, potential swap
settlements, and operating needs until its term loan matures on
June 11, 2012," said Standard & Poor's credit analyst Michael
Altberg.
SPORTS AUTHORITY: Moody's Affirms Ratings, Revises Outlook to Neg
-----------------------------------------------------------------
Moody's Investors Service revised the outlook for The Sports
Authority Inc. to negative from stable. The company's B3 Corporate
Family Rating, Probability of Default Rating, and the $300 million
term loan rating were affirmed.
The Sport Authority's financial leverage and interest coverage are
currently weak for the B3 rating. The change in rating outlook was
based on Moody's view that the company's credit metrics could
remain weak if it is unable to improve its inventory management or
if its same-store sales growth continues to underperform peers.
According to Moody's Analyst Mariko Semetko, "the negative outlook
also reflects the possibility that fourth-quarter 2012 earnings
may be negatively affected if the company is not successful in
clearing inventories". The company's debt/EBITDA was 7.1x and its
EBITDA/interest expense was 1.0x as of January 28, 2012.
Ratings Rationale
The Sports Authority's B3 Corporate Family Rating reflects the
company's high leverage and weak interest coverage, the highly
competitive sports retail environment, and the company's weak
recent same store sales growth. At the same time, the company's
well-recognized brand name, national footprint, management
initiatives to reduce costs and improve store efficiencies, and
adequate liquidity profile support its rating.
The following ratings have been affirmed and LGD point estimates
changed:
- Corporate Family Rating at B3
- Probability of Default Rating at B3
- $300 million term loan due 2017 at B3 (to LGD3, 44% from 45%)
The negative outlook reflects Moody's view that credit metrics may
remain weak in the near term if new management initiatives to
improve profitability and cash flow are not successful. The
outlook could be stabilized if as a result of successful
implementation of planned revenue growth and cost reduction
initiatives the company sustains debt/EBITDA materially below 7.0x
and EBITA/interest expense above 1.0x.
Ratings could be downgraded if debt/EBITDA is sustained at or
above 7.0x or EBITA/interest expense remains at or below 1.0x.
Further, any deterioration in liquidity may result in a downgrade.
Given the company's substantial balance sheet leverage, an upgrade
is unlikely in the near to medium term. However, over the longer
term, sustained same store sales growth, improvement in operating
performance and ongoing deleveraging could have positive rating
implications. Specifically, ratings could be upgraded if
debt/EBITDA approaches 5.5 times and EBITA/interest expense is
sustained above 1.5 times.
The principal methodology used in rating The Sports Authority,
Inc., was the Global Retail Industry Methodology published in June
2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
The Sports Authority, Inc., under The Sports Authority and S.A.
Elite banners, is a full-line sporting goods retailer operating
about 470 stores in 45 states. Revenues for the twelve months
ended January 28, 2012 were approximately $2.7 billion. The
company is owned by private equity firm Leonard Green & Partners,
L.P.
STANADYNE HOLDINGS: Incurs $1.1 Million Net Loss in First Quarter
-----------------------------------------------------------------
Stanadyne Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $1.09 million on $68.29 million of net sales for the
three months ended March 31, 2012, compared with a net loss of
$5.41 million on $58.83 million of net sales for the same period
during the prior year.
The Company reported a net loss of $32.50 million in 2011. The
Company previously reported a net loss of $9.98 million in 2010,
following a net loss of $23.70 million in 2009.
The Company's balance sheet at March 31, 2012, showed
$374.88 million in total assets, $422.82 million in total
liabilities, $728,000 in redeemable non-controlling interest and a
$48.66 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/VVlZte
About Stanadyne Holdings
Stanadyne Corporation, headquartered in Windsor, Connecticut,
is a designer and manufacturer of highly-engineered precision-
manufactured engine components, including fuel injection equipment
for diesel engines. Stanadyne sells engine components to original
equipment manufacturers and the aftermarket in a variety of
applications, including agricultural and construction vehicles and
equipment, industrial products, automobiles, light duty trucks and
marine equipment. Revenues for LTM ended Sept. 30, 2010 were
$240 million.
* * *
In January 2011, Moody's Investors Service confirmed Stanadyne
Holdings, Inc.'s Caa1 Corporate Family Rating and revised the
rating outlook to stable. The CFR confirmation reflects the
remediation of the Stanadyne's previous inability to file
financial statements in accordance with financial reporting
requirements contained in its debt agreements and expectations for
modest continued improvement in operating performance. Improved
operations, largely the result of positive momentum in key end
markets and restructuring activities, have allowed Stanadyne to
maintain positive funds from operations despite increased cash
interest expense. The company's $100 million 12% senior discount
notes began paying cash interest in February 2010.
In March 2012, Standard & Poor's Ratings Services revised its
long-term outlook to negative from stable on Windsor, Conn.-based
Stanadyne Corp. At the same time, Standard & Poor's affirmed its
ratings, including the 'CCC+' corporate credit rating, on
Stanadyne.
"The outlook revision reflects the risk that Stanadyne may not be
able to service debt obligations of its parent, Stanadyne Holdings
Inc. as early as August 2012," said Standard & Poor's credit
analyst Dan Picciotto.
STOCKTON, CA: Expects to Reach Deal to Avoid Bankruptcy
-------------------------------------------------------
Reuters reports that Mayor Ann Johnston said Stockton, California,
officials are hopeful of a settlement with the city's creditors to
avoid a municipal bankruptcy filing.
"Avoiding [bankruptcy] is our goal," the report quotes Mayor
Johnston as saying.
The report relates Mayor Johnston made her remarks during a state
of the city speech webcast by The Record newspaper in Stockton, a
city of 292,000 people 85 east of San Francisco.
According to Reuters, a potential bankruptcy filing has been under
discussion in recent months in Stockton's City Hall.
According to the report, mediation between Stockton and its
creditors could wrap up at the end of this month unless a majority
of the parties in the talks request an extension. Stockton is the
first big city in California to test a new law requiring mediation
after its leaders in February endorsed a restructuring plan for
the city's finances.
The report notes the law requiring mediation was approved in
response to Vallejo, California's controversial bankruptcy filing
in 2008. Vallejo emerged from bankruptcy last year.
The report relates Stockton's restructuring plan includes
mediation and, to the shock of many in the U.S. municipal debt
market, defaulting on some debt payments during the remainder of
the current fiscal year through June. Rating agencies have
slashed Stockton's credit rating in response. State Controller
John Chiang's office is investigating the city's financial
practices.
The report adds city officials have said sloppy bookkeeping
contributed to Stockton's financial troubles along with a severe
slump in revenue, state raids on the city's coffers, taking too
much debt and providing city workers with high pay and generous
benefits in retirement.
The report notes mediation is confidential so city officials and
parties on the other side of the negotiating table -- including
bond insurers and groups representing city employees and retired
city workers -- will not comment on the talks.
According to the report, Ralph Mabey, Esq., senior counsel with
the Los Angeles law firm of Stutman Treister & Glatt, was selected
in late March as mediator. Mr. Mabey is a former U.S. bankruptcy
court judge and mediator in the Lehman Brothers Chapter 11
bankruptcy case.
The report says Mayor Johnston's speech followed a budget message
to Stockton's city council from its city manager that included a
revised estimate for the city's general fund deficit. It is now
projected to be in the range of $26 million to $43 million,
compared with a prior estimate of a deficit in the range of $20
million and $38 million.
Reuters notes Stockton's economy has been hit hard by the housing
market's steep downturn in inland California, slashing the city's
revenue. Mayor Johnston noted that only 150 new homes were built
in the city last year compared with 3,000 in 2007 and that the
city has cut $90 million in spending over the last three years,
the report says.
SUNRISE REAL ESTATE: Delays Form 10-Q for First Quarter
-------------------------------------------------------
Sunrise Real Estate Group, Inc., said it will be delayed in the
filing of its 10-Q for the period ended March 31, 2012, due to a
delay in the preparation of its financial statements.
About Sunrise Real
Headquartered in Shanghai, the People's Republic of China, Sunrise
Real Estate Group, Inc. was initially incorporated in Texas on
Oct. 10, 1996, under the name of Parallax Entertainment, Inc.
On Dec. 12, 2003, Parallax changed its name to Sunrise Real
Estate Development Group, Inc. On April 25, 2006, Sunrise Estate
Development Group, Inc. filed Articles of Amendment with the Texas
Secretary of State, changing the name of Sunrise Real Estate
Development Group, Inc. to Sunrise Real Estate Group, Inc.,
effective from May 23, 2006.
The Company and its subsidiaries are engaged in the property
brokerage services, real estate marketing services, property
leasing services and property management services in China.
The Company reported a net loss of US$1.22 million in 2011,
compared with a net loss of US$25,487 in 2010.
The Company's balance sheet at Dec. 31, 2011, showed US$22.17
million in total assets, US$25.25 million in total liabilities and
a US$3.08 million total shareholders' deficit.
For 2011, Kenne Ruan, CPA, P.C., in Woodbridge. CT, USA, noted
that the Company has significant accumulated losses from
operations and has a net capital deficiency that raise substantial
doubt about its ability to continue as a going concern.
T3 MOTION: Incurs $1.5 Million Net Loss in First Quarter
--------------------------------------------------------
T3 Motion, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.57 million on $1.40 million of net revenues for the three
months ended March 31, 2012, compared with a net loss of $640,585
on $996,562 of net revenues for the same period during the prior
year.
The Company reported a net loss of $5.50 million in 2011, compared
with a net loss of $8.32 million in 2010.
The Company's balance sheet at March 31, 2012, showed $3.37
million in total assets, $2.47 million in total liabilities and
$903,439 in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/rFuhKO
About T3 Motion
Costa Mesa, Calif.-based T3 Motion, Inc., develops and
manufactures T3 Series vehicles, which are electric three-wheel
stand-up vehicles that are directly targeted to the public safety
and private security markets.
After auditing the 2011 results, KMJ Corbin & Company LLP, in
Costa Mesa, California, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant operating
losses and has had negative cash flows from operations since
inception, and at Dec. 31, 2011, has an accumulated deficit of
$54.9 million.
THERMOENERGY CORP: Delays Form 10-Q for First Quarter
-----------------------------------------------------
ThermoEnergy Corporation's quarterly report on Form 10-Q for the
period ended March 31, 2012, was not filed within the prescribed
time period because the Company experienced delays in the
completion of its audited consolidated financial statements as of,
and for the year ended, Dec. 31, 2011 and, until completion of
those audited consolidated financial statements, the Company was
unable to complete its unaudited consolidated financial statements
for the period ended March 31, 2012, that are required to be
included in the Form 10-Q. These delays could not be eliminated
without unreasonable effort or expense. The Company expects to
file its Form 10-Q within the time period permitted by Rule 12b-
25.
About ThermoEnergy Corporation
Little Rock, Ark.-based ThermoEnergy Corporation is a clean
technologies company engaged in the worldwide development of
advanced municipal and industrial wastewater treatment systems and
carbon reducing clean energy technologies.
The Company reported a net loss of $17.38 million in 2011,
compared with a net loss of $14.85 million during the prior year.
The Company's balance sheet at Dec. 31, 2011, showed $8.78 million
in total assets, $13.39 million in total liabilities, and a
$4.60 million total stockholders' deficiency.
After auditing the 2011 results, Grant Thornton LLP, in Boston,
Massachusetts, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company incurred a net loss for the year ended Dec.
31, 2011, and, as of that date, the Company's current liabilities
exceeded its current assets by $3,387,000 and its total
liabilities exceeded its total assets by $4,603,000.
TOUSA INC: Cash Collateral Hearing Rescheduled to June 5
--------------------------------------------------------
The Bankruptcy Court rescheduled the hearing to consider entry of
an Interim Cash Collateral Order on a final basis in TOUSA, Inc.'s
Chapter 11 case to June 5, 2012 at 1:30 p.m. (ET).
As reported in the Troubled Company Reporter on April 13, 2012,
TOUSA seeks entry of an order authorizing the Debtors to use cash
collateral of the Debtors' prepetition lenders on and after May 1,
2012.
Due to an appeal by the Committee from the terms of the Debtors'
authority to use Cash Collateral, the Debtors, the Prepetition
Lenders and the Creditors' Committee determined, pursuant to the
Tenth Cash Collateral Order, to permit the Debtors to use Cash
Collateral through April 30, 2012, on terms similar to those
included in previous orders authorizing the Debtors to use Cash
Collateral. Importantly, and consistent with previous iterations
of consensual cash collateral orders, the Tenth Cash Collateral
Order includes a feature that affords any party to seek review and
revision of the terms by the Court in connection with appeals
relating to the Committee Judgment.
Because a decision has not yet been made with respect to the
Committee Appeal, the Debtors, the Prepetition Lenders and the
Creditors' Committee currently are in discussions regarding the
continued use of Cash Collateral. The Debtors expect to reach an
agreement with the parties on terms nearly identical to those
included in the Tenth Cash Collateral Order but these terms have
not been finalized yet.
The Debtors will provide additional information regarding the
proposed terms of Cash Collateral use to the Court and other
parties-in-interest by filing a proposed order at the earliest
possible date, but in any event no later than three days before
the hearing on this motion. To the extent that the parties agree
upon the proposed terms, the proposed order will reflect that
agreement; to the extent that the parties are unable to reach
agreement, the Debtors will seek to use Cash Collateral on terms
proposed by the Debtors, and the Debtors will file a supplement to
the motion seeking interim authorization for Cash Collateral use
notwithstanding objections.
Paul Singerman, Esq., at Berger Singerman LLP, submits that it is
critical that the Debtors maintain access to Cash Collateral to
permit the Debtors to complete implementation of their wind-down
business plan and continue to fund the administrative expenses of
these chapter 11 cases. In the event the Debtors are unable to
reach an agreement with the Prepetition Lenders regarding
consensual use of Cash Collateral, the Debtors will file a
supplemental motion with the Court seeking authority to use Cash
Collateral over their objection. To the extent necessary, the
Debtors will demonstrate in their pleadings and at the hearing on
this motion that the interests of the Prepetition Lenders are
adequately protected by the proposed terms of the Debtors'
continued use of Cash Collateral as required under the applicable
provisions of the Bankruptcy Code.
The hearing on the cash collateral motion was originally scheduled
for April 25, 2012.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A.
Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P.,
TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder
in the United States, operating in various metropolitan markets in
10 states located in four major geographic regions: Florida, the
Mid-Atlantic, Texas, and the West.
The Debtor and its debtor-affiliates filed for separate
Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case
No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz,
Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in
New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman,
in Miami, Fla., represent the Debtors in their restructuring
efforts. Lazard Freres & Co. LLC is the Debtors' investment
banker. Ernst & Young LLP is the Debtors' independent auditor and
tax services provider. Kurtzman Carson Consultants LLC acts as
the Debtors' Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008
(Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and
debts of $1 million to $10 million in its Chapter 11 petition.
The official committee of unsecured creditors has filed a proposed
chapter 11 liquidating plan for Tousa. However, the committee
said it would no longer pursue approval of its liquidation plan
because of the pending appeal of its fraudulent transfer case in
the U.S. Court of Appeals for the Eleventh Circuit. A district
court in February 2011 held that the bankruptcy judge was wrong in
ruling that lenders who were paid off received fraudulent
transfers when Tousa gave liens on subsidiaries' properties to
bail out and refinance a joint venture. Daniel H. Golden, Esq.,
and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, N.Y., represent the creditors committee.
The Tousa committee filed a Chapter 11 plan in July 2010 based on
an assumption it would win the appeal.
TRAILER PARK ACQUISITION: 6-Acre Lot Worth $1.87 Million
--------------------------------------------------------
Bankruptcy Judge A. Jay Cristol pegged the value of Trailer Park
Acquisition LLC's six-acre real property located at 7600 NW 27th
Avenue, in Miami, Florida, at $1,875,000, using the income
capitalization approach, which the court held was the most
reliable method to determine the value of the Property.
The Property is being operated as a mobile home trailer park
community known as the Palm Lake Mobile Home Park. The Property
contains roughly 118 individually owned mobile homes which rent
land at the Property from the Debtor.
Branch Banking & Trust Co. filed Claim No. 3-1 against the
Debtor's estate, asserting a $11,061,625 debt, allegedly secured
by the Property. The validity, priority and extent of BB&T's
claim, including its lien against the Property, is subject to
dispute in a pending adversary proceeding.
According to the Court's ruling, for purposes of the income
capitalization approach to value, (i) the appropriate effective
gross income for the Property is $641,532; (ii) the appropriate
total estimated expenses for the Property is $330,141, for an
estimated net operating income of $311,391; (iii) the appropriate
capitalization rate applicable to the property is 12%; and (iv)
the appropriate deduction for completion of the wastewater
treatment plant is approximately $706,737. Ultimately, these
considerations result in an estimated "As Is" Value (rounded) for
the Property under the income capitalization approach to be
$1,900,000.
Taking into account an estimate for a downward adjustment to
account for certain values derived from far less reliable methods,
the Court finds the value of the Property is $1,875,000 as of
April 12, 2012.
A copy of the Court's May 15, 2012 Memorandum Opinion and Order is
available at http://is.gd/8XQngofrom Leagle.com.
Trailer Park Acquisition LLC filed for Chapter 11 bankruptcy
(Bankr. S.D. Fla. Case No. 11-31948) on Aug. 4, 2011, represented
by:
Michael L. Schuster, Esq.
GENOVESE JOBLOVE & BATTISTA, P.A.
Miami, FL
Tel: (305) 349-2300
Fax: (305) 349-2310
E-mail: mschuster@gjb-law.com
TRONOX INC: Accuses Ex-Kerr-McGee General Counsel of Fraud
----------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that on the third trial
day of Tronox Inc.'s $25 billion suit alleging former parent Kerr-
McGee Corp.'s 2006 spinoff doomed the pigment maker, Tronox's
attorney sought Thursday to demonstrate that an ex-Kerr-McGee in-
house attorney admitted to a fraudulent plan to avoid
environmental liabilities.
In a hearing before U.S. Bankruptcy Judge Allan L. Gropper, Andrew
A. Kassof of Kirkland & Ellis LLP questioned Roger Addison, former
in-house counsel at Kerr-McGee and later at the subsidiary, about
the developments that allegedly led to Tronox's 2009 Chapter 11
filing, according to Law360.
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-
10156) on Jan. 13, 2009, before Hon. Allan L. Gropper. Richard M.
Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at
Kirkland & Ellis LLP in New York, represented the Debtors. The
Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel;
Rothschild Inc. as investment bankers; Alvarez & Marsal North
America LLC, as restructuring consultants; and Kurtzman Carson
Consultants served as notice and claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders were appointed in the cases.
The Creditors Committee retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Until Sept. 30, 2008, Tronox was publicly traded on the New
York Stock Exchange under the symbols TRX and TRX.B. Since then,
Tronox has traded on the Over the Counter Bulletin Board under the
symbols TROX.A.PK and TROX.B.PK. As of Dec. 31, 2008, Tronox
had 19,107,367 outstanding shares of class A common stock and
22,889,431 outstanding shares of class B common stock.
On Nov. 17, 2010, the Bankruptcy Court confirmed the Debtors'
First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated Nov. 5, 2010. Under the Plan, Tronox
reorganized around its existing operating businesses, including
its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi;
Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia.
TTC PLAZA: Vargo's Restaurant Ceases Business Operations
--------------------------------------------------------
Pete Holley at chron.com reports Vargo's Restaurant, owned by TTC
Plaza Ltd., has closed.
According to the report, real estate broker Dennis Johnston said
the property is in the process of being sold. It had a $9 million
asking price, but he declined to reveal the purchase price. As
for the future of the 12,000-square-foot building at 2401 Fondren,
"It won't be a restaurant," he said.
TTC Plaza L.P. filed for Chapter 11 bankruptcy (Bankr. S.D. Tex.
Case No. 11-38381) on Oct. 3, 2011, before Judge Marvin Isgur.
Jack Nicholas Fuerst, Esq., in Houston, Texas, represents the
Debtor. The Debtor scheduled assets of $12,016,768 and
liabilities of $5,312,263. The petition was signed by William Wu,
managing partner.
The Troubled Company Reporter on May 11, 2012, reported Judge
Isgur ordered the conversion of the Chapter 11 case to one under
Chapter 7.
TRANS ENERGY: Incurs $1.5 Million Net Loss in First Quarter
-----------------------------------------------------------
Trans Energy, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.49 million on $2.91 million of revenue for the three months
ended March 31, 2012, compared with net income of $11.53 million
on $1.63 million of revenue for the same period during the prior
year.
The Company's balance sheet at March 31, 2012, showed
$55.15 million in total assets, $28.96 million in total
liabilities, and $26.18 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/PQhCUS
About Trans Energy
St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG)
-- http://www.transenergyinc.com/-- is an independent energy
company engaged in the acquisition, exploration, development,
exploitation and production of oil and natural gas. Its
operations are presently focused in the State of West Virginia.
In its audit report on the Company's 2011 results, Maloney +
Novotny, LLC, in Cleveland, Ohio, noted that the Company has
generated significant losses from operations and has a working
capital deficit of $18.37 million at Dec. 31, 2011, which together
raises substantial doubt about the Company's ability to continue
as a going concern.
TRANS-LUX CORP: Delays Form 10-Q for First Quarter
--------------------------------------------------
Trans-Lux Corporation was unable to file its report on Form 10-Q
for the quarter ending March 31, 2012, within the prescribed time
period because of pending additional information necessary for
finalizing its Form 10-Q.
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.
TWIN CITY HOSPITAL: Chapter 7 Trustee's Suit Goes to State Court
----------------------------------------------------------------
Bankruptcy Judge Russ Kendig granted the requests of Carol
Hoffman, Marge Jentes, Darrell Pancher, John Rypien, Bill Surber,
Jim Weaver, Dr. Gregg Andrews, Fred Bollon, Greg DiDonato, Tim
McKnight, Rod Rafael, and Doug Ross asking the Court to abstain
from hearing pursuant to 28 U.S.C. Sec. 1334(c)(1) -- or in the
alternative, to withdraw bankruptcy court reference pursuant to 28
U.S.C. Sec. 157(d) of -- the adversary proceeding commenced by
Mark D. Kozel, the chapter 7 trustee of Twin City Hospital.
The lawsuit, filed Jan. 23, 2012, asserts breach of the duty of
care, negligence, breach of fiduciary duty, reckless conduct, and
misrepresentation against the defendants. The Chapter 7 Trustee
asserts that the Defendants acted improperly by issuing roughly
$17.3 million in tax exempt revenue bonds to fund new construction
and renovations to the Debtor's facilities and to refinance the
Debtor's outstanding long term obligations while the Debtor's
finances were in poor condition. On May 2, 2012, the court
entered an order confirming that the adversary is a non-core
proceeding.
The Defendants have divided themselves into two groups, one group
comprised of Carol Hoffman, Marge Jentes, Darrell Pancher, John
Rypien, Bill Surber, Jim Weaver and the other group comprised of
Dr. Gregg Andrews, Fred Bollon, Greg DiDonato, Tim McKnight, Rod
Rafael, and Doug Ross. Both groups are represented by the same
law firm. Despite this self-imposed division, both groups filed
the motion for abstention and filed other pleadings related to
this matter either jointly or by filing identical pleadings.
The Defendants asked the Court to exercise its permissive
authority to abstain from hearing the adversary proceeding
pursuant to 28 U.S.C. Sec. 1334(c)(1) and allow the matter to be
heard by the Tuscarawas County Court of Common Pleas. The
Defendants argue that permissive abstention is warranted because
the adversary proceeding is non-core, based entirely on state law,
involves only non-debtor defendants, and requires a trial by jury.
In addition, the Defendants assert that the adversary proceeding
is similar to another case pending in Tuscarawas County and bears
no connection to Federal law except that the Debtor filed
bankruptcy. Alternatively, the Defendants request that, if the
Bankruptcy Court does not abstain, the District Court withdraw the
reference pursuant to 28 U.S.C. Sec. 157(d).
The lawsuit is, MARK D. KOZEL, Chapter 7 TRUSTEE, Plaintiff, v.
GREGG ANDREWS, et al., Defendants, Adv. Proc. No. 12-6005 (Bankr.
N.D. Ohio). A copy of the Court's May 16, 2012, Memorandum of
Opinion is available at http://is.gd/LHQZ0Afrom Leagle.com.
About Twin City Hospital
Dennison, Ohio-based Twin City Hospital filed for Chapter 11
bankruptcy protection (Bankr. N.D. Ohio Case No. 10-64360) on Oct.
13, 2010. Shawn M. Riley, Esq., at McDonald Hopkins LLC,
represents the Debtor in its restructuring effort. The Debtor
estimated its assets and debts at $10 million to $50 million.
Twin City Hospital has sold substantially all of its assets to
Trinity Hospital Twin City, an affiliate of the Franciscan
Services Corp. for $4.85 million. The case was converted from a
chapter 11 to a chapter 7 on June 28, 2011, following the sale.
Mark D. Kozel was appointed as Chapter 7 trustee.
UNIVERSAL BIOENERGY: Delays Form 10-Q for First Quarter
-------------------------------------------------------
Universal Bioenergy, Inc., has been unable to complete its Form
10-Q for the quarter ended March 31, 2012, within the prescribed
time because of delays in completing the preparation of its
financial statements and its management discussion and analysis.
Those delays are primarily due to the Company's management's
dedication of such management's time to business matters. This
has taken a significant amount of management's time away from the
preparation of the Form 10-Q and delayed the preparation of the
unaudited financial statements for the quarter ended March 31,
2012.
About Universal Bioenergy
Universal Bioenergy Inc., is an alternative energy company
headquartered in Irvine, California. The Company's new strategic
direction is to develop and market a diverse product line of
alternative and natural energy products including, natural gas,
solar, biofuels, wind, wave, tidal, and green technology products.
The Company reported a net loss of $2.11 million in 2011,
compared with a net loss of $2 million in 2010.
The Company's balance sheet at Dec. 31, 2011, showed
$11.21 million in total assets, $10.91 million in total
liabilities and $295,890 in total stockholders' equity.
After auditing the 2011 results, Bongiovanni & Associates, CPA'S,
in Cornelius, North Carolina, noted that the Company has suffered
recurring operating losses, has an accumulated deficit, has
negative working capital, and has yet to generate an internal cash
flow that raises substantial doubt about its ability to continue
as a going concern.
USA SPRINGS: Can Pursue Either Bankruptcy Financing or Sale
-----------------------------------------------------------
Bob Sanders at New Hampshire Business Review reports that Judge
J. Michael Deasy said USA Springs could continue to pursue
financing that has so far proved elusive in an attempt to bail
itself out of bankruptcy, or it could put itself up for auction,
but it can't do both for very long.
"I don't see how you can have both processes live at the same
time," the report quotes Judge Deasy as saying.
The report relates a hearing was held over objections to USA
Springs' proposed sale procedures. The Company seeks to auction
itself July 20 if a $60 million loan from Switzerland-based Malom
Group AG fails to materialize.
The report says Malom insisted that its long-delayed deal is
imminent, but the proposed auction would throw everything off.
The report notes Malom had promised to raise the $60 million by
October 2011, but the financing has faced one obstacle after
another, including the detention by Swiss authorities of two of
Malom's principals relating to fraud charges against another
company and the company's difficulty in converting to cash some
dubious Brazilian notes.
The report relates Hans-Jurg Lips, one of Malom's principals, said
Malom missed its previous April 30 deadline and it expects to miss
its latest deadline because a "death in the family of an account
holder" prevented confirmation from Brazil and India to go
through.
The report notes Mr. Lips said the deal is expected to close in
the next few days, but at a lower price than initially expected.
Still, it would result in about $6 million in initial funding for
USA Springs, Mr. Lips said.
According to the report, creditors, including Roswell Commercial
Mortgage, objected to the sale procedures. Roswell originally
lent the Company about $8 million, but now claims it is owed about
$13.2 million with interest.
The report says Roswell insisted that it has the right to buy back
the property with a "credit bid" if there wasn't enough raised at
the auction -- something USA Springs had agreed to in the past.
It dismissed USA Springs' attempt to sweeten the deal by throwing
a noncontiguous property owned by a related trust, noting that the
two acres were secured with a $200,000 mortgage but is assessed at
$76,400.
The report says the trustee seconded Roswell's motion on the
credit bid and raised a host of issues of its own, including how
the funds would be distributed after auction.
About USA Springs
Based in Nottingham, New Hampshire, USA Springs Inc. filed for
Chapter 11 bankruptcy protection (D. N.H. Case No. 08-11816) on
June 27, 2008. Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and
Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its
restructuring efforts. An Official Committee of Unsecured
Creditors has been appointed in the case. The Committee's
counsel is Terrie Harman, Esq., at Harman Law Offices. In its
schedules, the Debtor disclosed $127.0 million in assets and
$13.9 million in liabilities.
VERTICAL COMPUTER: Incurs $337,000 Net Loss in First Quarter
------------------------------------------------------------
Vertical Computer Systems, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss available to common stockholders of $336,732
on $1.38 million of total revenues for the three months ended
March 31, 2012, compared with a net loss available to common
stockholders of $74,719 on $1.62 million of total revenues for the
same period during the prior year.
The Company reported a net loss of $167,588 in 2011, compared with
a net loss of $245,164 in 2010.
The Company's balance sheet at March 31, 2012, showed $1.32
million in total assets, $13.17 million in total liabilities,
$9.90 million in convertible cumulative preferred stock, and a
$21.74 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/sTXL0r
About Vertical Computer
Richardson, Tex.-based Vertical Computer Systems, Inc., is a
multinational provider of Internet core technologies, application
software, and software services through its distribution network
with operations or sales in the United States, Canada and Brazil.
For 2011, MaloneBailey, LLP, in Houston, Texas, noted that the
Company suffered net losses and has a working capital deficiency,
which raises substantial doubt about its ability to continue as a
going concern.
WASTEQUIP LLC: Moody's Assigns 'B2' Corp. Family Rating
-------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and probability of default rating to Wastequip, LLC
(Wastequip). In addition, Moody's assigned a Ba2 rating to the
proposed $40 million first out senior secured revolving credit
facility and a B3 to the proposed $150 million first lien senior
secured term loan. The rating outlook is stable.
Wastequip has recently announced a solicitation of lender votes on
a consensual recapitalization. The recapitalization would use the
proposed $40 million revolver (undrawn at close), $150 million
term loan and cash to refinance its existing senior secured credit
facility. At the same time, Moody's anticipates that all existing
junior debt and equity will be converted to new equity and/or
cancelled.
The following ratings have been assigned at Wastequip LLC. These
ratings are predicated on the completion of the proposed
recapitalization and subject to Moody's review of final
documentation.:
B2 Corporate family rating;
B2 Probability of default rating;
Ba2 (LGD1, 9%) to the proposed $40 million first out senior
secured revolver due 2017; and
B3 (LGD4, 61%) to the proposed $150 million senior secured term
loan due 2018.
Moody's will treat the recapitalization of Wastequip Inc.'s
(predecessor entity) existing debt as a distressed exchange in
accordance with Moody's Definition of Default. At close, Moody's
will assign a "/D" modifier to the PDR at Wastequip Inc.
(predecessor entity) to designate the default and will withdraw
all ratings at this entity shortly thereafter.
Ratings Rationale
"The proposed recapitalization is expected to substantially
improve Wastequip's capital structure and benefit cash flows as
interest burden and debt amortization requirements are reduced,"
stated Moody's analyst Brian Grieser. The B2 CFR reflects
Wastequip's small scale, high leverage, 4.2x proforma for the
recapitalization and exposure to sectors that remain under
pressure, including residential and commercial construction and
local and state municipal spending. The rating benefits from the
company's leadership position in the North American waste
equipment market, national footprint in a fragmented, regional
industry, recent manufacturing reorganization and workforce
reductions as well as its proven ability to maintain relatively
stable margins in periods of sales decline. With a tenable capital
structure in place, Moody's anticipates Wastequip will be able to
reduce leverage as it generates cash flows and improves earnings.
Moody's expects Wastequip's recent enhancement in its operating
performance to continue as its bookings and backlog trends have
been steadily improving in both its steel and specialty waste
handling businesses. While Moody's believes volatility in
quarterly earnings is inherent in the business due to the size of
its orders and timing of their delivery, Moody's expects annual
EBITDA trends and cash flows to gradually improve and support
Wastequip's effort to reduce balance sheet leverage.
The stable outlook reflects Moody's expectation that Wastequip's
earnings will modestly improve and that it will remain committed
to maintaining an adequate liquidity profile over the next twelve
months.
The Ba2 rating on the $40 million senior secured revolving credit
facility reflects its first out priority over the $150 million
senior secured term loan. Conversely, the B3 rating on the term
loan reflects its effective subordination to the revolver's first
out rights. Both facilities benefit from a first lien on
substantially all assets of the borrower and guarantor, the
capital stock of the borrower and each domestic subsidiary and 65%
of the capital stock of each foreign subsidiary .
Given Wastequip's small scale, high leverage and cash flow
volatility, Moody's does not anticipate a ratings upgrade over the
next twelve months. Positive rating pressure could surface if
Wastequip were to generate free cash flow on a sustainable basis
with leverage maintained permanently below 4.0x.
Ratings pressure would arise if the company is unable to generate
modest free cash flow and is therefore required to access its
revolver for an extended period. In addition, if Debt/EBITDA
reaches 5.0x, the ratings could be downgraded.
The principal methodology used in rating Wastequip Inc. was the
Global Manufacturing Industry Methodology published in December
2010. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Wastequip is the largest manufacturer of waste handling and
recycling equipment used to collect, process, and transport solid
and liquid waste in North America. The company operates two
businesses, the steel group and specialty group which primarily
service retail, housing and commercial construction and municipal
markets. Revenue for the twelve months ending March 31, 2012 were
$344 million.
WESTERLY HOSPITAL: Lawrence & Memorial Pursues Hospital
-------------------------------------------------------
Hartford Business, citing The Day of New London, reports that
Attorney Mark Russo, the court-appointed special master in The
Westerly Hospital receivership proceedings, may request a
"stalking horse" bid from one of the health care companies -- New
London's Lawrence & Memorial Hospital among them -- that have
expressed interest in buying the financially troubled hospital.
Theday.com said that Mr. Russo would negotiate an agreement with a
proposed partner, according to Hartford Business. The report
relates that the identity of the proposed partner would remain
confidential, but the terms would be disclosed to other potential
bidders who would be invited to make an offer with more favorable
terms.
Hartford Business notes that offers also came from South County
Hospital in Wakefield, R.I., and Westerly Hospital Holdco, a for-
profit New Jersey hospital management company affiliated with IJKG
Opco.
The proposed plan for the "stalking horse" bid was described by
Town Manager Steve Hartford in a report to the Town Council about
the hospital, Hartford Business relates.
Mr. Hartford is a member of the Westerly Hospital Community Group,
comprising residents, doctors, business owners and other community
stakeholders.
The "stalking horse" bidding procedure, Hartford said in his
report, would allow the special master to solicit bids from
interested parties that would be subject to a court evaluation.
Russo is expected to determine this week whether one of the
parties that have expressed interest in the hospital would be
willing to submit a "stalking horse" bid, Mr. Hartford said in his
report obtained by the news agency.
Hartford Business notes that at least two nonprofit hospitals and
one for-profit hospital company have made non-binding expressions
of interest in purchasing the hospital.
Mr. Hartford said that minimum terms of the "stalking horse" bid
would include that the hospital remain an acute care hospital;
that its governance represent the Westerly-Stonington community;
that there be no immediate reduction of services; that specific
sums be committed to capital expenses; that job preservation be a
priority; and that new services to make the hospital profitable be
added, Hartford Business discloses.
WORLDSPACE INC: Seeks to Convert Ch. 11 Case to Liquidation
-----------------------------------------------------------
BankruptcyData.com reports that WorldSpace, Inc., filed with the
U.S. Bankruptcy Court a motion to convert the Chapter 11 case to a
liquidation under Chapter 7.
WorldSpace explains, "The Debtors do not believe that they will be
able to propose or confirm a plan in these cases, and are
incurring administrative expenses. Based on these circumstances,
the Debtors request that the Court grant the Motion to convert
these cases as soon as possible."
The Court scheduled a June 6, 2012 hearing on the matter.
About WorldSpace, Inc.
WorldSpace, Inc. (OTC US: WRSPQ) provided satellite-based radio
and data broadcasting services to paying subscribers in 10
countries throughout Europe, India, the Middle East, and Africa.
WorldSpace, Inc., was founded in 1990 and is headquartered in
Silver Spring, Maryland.
The Debtor and two of its affiliates filed for Chapter 11
bankruptcy protection (Bankr. D. Del., Case No. 08-12412 - 08-
12414) on Oct. 17, 2008. James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl
& Jones, LLP, serve as the Debtors' bankruptcy counsel. Kurtzman
Carson Consultants serves as claims and notice agent. Neil
Raymond Lapinski, Esq., and Rafael Xavier Zahralddin-Aravena,
Esq., at Elliot Greenleaf, represent the Official Committee of
Unsecured Creditors. The Debtors disclosed $307.3 million in
assets and $2.12 billion in debt as of the Chapter 11 filing.
WorldSpace, Inc., and certain of its affiliates completed the sale
of substantially all the assets related to business effective
June 23, 2010.
WYLE SERVICES: Moody's Upgrades CFR/PDR to 'B2'; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service upgraded Wyle Services Corporation's
ratings including its corporate family and probability of default
ratings to B2 from B3 reflecting the progress the company has made
in moderately reducing debt, expectation of continued debt
reduction from free cash flow generation over the intermediate
term as well as a good backlog providing near term revenue
visibility. The rating outlook is stable.
The following ratings were upgraded:
Corporate family rating, to B2 from B3
Probability of default rating, to B2 from B3
$35 million first lien senior secured revolving credit facility
due 2016, to Ba3 (LGD-2, 23%) from B1 (LGD-2, 24%)
$290 million first lien term loan due 2017, to Ba3 (LGD-2, 23%)
from B1 (LGD-2, 24%)
$175 million 10.5% subordinated notes due 2018, to Caa1 (LGD-5,
87%) from Caa2 (LGD- 5, 88%)
Ratings Rationale
The ratings upgrade recognizes the improvement in the company's
leverage metric since the CAS, Inc. acquisition in September 2010
and its sustainability given its strong backlog and expected
continued moderate debt reductions. The ratings include the
expectation of operating performance in line with a B2 rating
level including debt/EBITDA trending towards 5.0 times and
EBITA/interest coverage remaining at roughly 2.0 times. The rating
does consider a degree of revenue/earnings volatility from order
deferrals and negative pressure on the U.S. defense budget due to
fiscal budget pressures.
The B2 corporate family rating reflects Wyle's well-established
and diversified position within the Department of Defense, NASA
and other federal agencies. The corporate family rating also
considers Wyle's strong backlog and good re-compete and new
business win rates. Effective management of working capital
contributing to free cash flow generation and benefits derived
from being the prime contractor on RIAC (the DoD's "Reliability
Information Analysis Center") task orders also support the
ratings. The rating is counterbalanced by the company's high
leverage although this metric is expected to improve over the
intermediate term. Overall trends in the US defense budget
constrain the rating including overall trend of defense
contractors contending with delays in the Federal Government's
procurement process and increasing competition among service
contractors due to lower anticipated defense budget outlays and
attendant pressure on contractor margins.
The stable outlook is supported by Wyle's good liquidity profile
as well as degree of revenue visibility provided by its backlog.
The outlook also reflects the expectation that revenues from the
RIAC contract and new business wins could partially offset the
lower anticipated level of future U.S. defense budget outlays.
Developments that could establish negative pressure on the ratings
include significant declines in revenues and margins, a meaningful
reduction in free cash flow or an elevation of its debt/EBITDA
above 5.8 times on a sustained basis and EBITA/interest falling
below the 1.5 times level. Any meaningful largely debt-financed
acquisition could also pressure the ratings and/or outlook.
Factors that could lead to a positive outlook or stronger ratings
include demonstrating an ability to continue growing sales while
maintaining current margins and ample free cash flow generation,
lowering its debt/EBITDA to 4.0 times and demonstrating
EBITA/interest coverage at or above 2.5 times on a sustained
basis.
The principal methodology used in rating Wyle Services Corporation
was the Global Aerospace and Defense Methodology, published June
2010. Other methodologies used include Loss Given Default for
Speculative Grade Issuers in the US, Canada, and EMEA, published
June 2009.
Wyle Inc. is a provider of engineering and information technology
services to the federal government. The company generated 2011
revenue of roughly $1 billion. Wyle is majority owned by the
private equity firm Court Square Capital.
Z TRIM HOLDINGS: Incurs $5 Million Net Loss in First Quarter
------------------------------------------------------------
Z Trim Holdings, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $5.03 million on $318,383 of total revenues for the three
months ended March 31, 2012, compared with a net loss of
$6.27 million on $247,366 of total revenues for the same period
during the prior year.
The Company reported a net loss of $6.94 million in 2011, compared
with a net loss of $10.91 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$4.54 million in total assets, $15.28 million in total
liabilities, $5.05 million in total commitment and contingencies
and a $15.79 million total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/5CllHo
About Z Trim
Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food
ingredient company which provides custom product solutions that
help answer the food industry's problems. Z Trim's revolutionary
technology provides value-added ingredients across virtually all
food industry categories. Z Trim's all-natural products, among
other things, help to reduce fat and calories, add fiber, provide
shelf-stability, prevent oil migration, and add binding capacity
-- all without degrading the taste and texture of the final food
products.
M&K CPAs,PLLC, in Houston, Texas, expressed substantial doubt
about the Company's ability to continue as a going concern
following the 2011 financial results. The independent auditors
noted that the Company had a working capital deficit and
reoccurring losses as of Dec. 31, 2011.
ZOGENIX INC: Incurs $10.3 Million Net Loss in First Quarter
-----------------------------------------------------------
Zogenix, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $10.29 million on $18.34 million of total revenue for the three
months ended March 31, 2012, compared with a net loss of $18.98
million on $9.04 million of total revenue for the same period
during the prior year.
The Company reported a net loss of $83.90 million in 2011,
compared with a net loss of $73.56 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$82.28 million in total assets, $82 million in total liabilities,
and $278,000 in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/Vn9c57
About Zogenix Inc.
Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and
Emeryville, California, is a pharmaceutical company
commercializing and developing products for the treatment of
central nervous system disorders and pain.
As reported in the TCR on March 8, 2011, Ernst & Young LLP, in San
Diego, Calif., expressed substantial doubt about Zogenix's ability
to continue as a going concern, following the Company's 2010
results. The independent auditors noted that of the Company's
recurring losses from operations and lack of sufficient working
capital.
* Moody's Says Liquidity Key Consideration in US REIT Ratings
-------------------------------------------------------------
Proactive liquidity management continues to be extremely important
to the credit quality of US real estate investment trusts (REITs)
and real estate operating companies (REOCs), given that REITs have
limited ability to retain cash and real estate is a capital-
intensive business, says Moody's Investors Service in the report
"REITs: Liquidity Considerations in US REIT Ratings."
"Liquidity is of ongoing importance for US REITs, no matter how
favorable capital market conditions are at a particular point in
time," says Philip Kibel, a Moody's Senior Vice President. "As we
observed during the 2008-2009 financial crisis, market access can
quickly erode."
Moody's assessment of a real estate company's liquidity focuses on
the relationship between its visible sources of liquidity and its
intermediate-term fixed obligations.
In its credit analysis for REITs, Moody's classifies sources of
liquidity in terms of their flexibility, accessibility and
reliability. Sources of liquidity may include revolver borrowing
capacity, cash balances, operating cash flow and unencumbered
assets.
Uses of liquidity encompass interest and principal payments of
bond, mortgage and credit facility debt, capital expenditures,
development projects and dividend payments.
In assessing the liquidity strength of a REIT, Moody's compares
the coverage from its various sources against expected liquidity
needs. Reliable sources of liquidity that cover foreseeable
liquidity uses support the credit rating of a REIT, while weaker
sources of liquidity or sources that do not cover short and
intermediate term needs may lead to negative pressure on ratings.
* Keating Muething Names Rachael Rowe as Executive Partner
----------------------------------------------------------
Cincinnati law firm Keating Muething & Klekamp (KMK(R)) recently
announced the appointment of Rachael A. Rowe to serve as the
firm's Executive Partner. Rowe, a partner in the Litigation Group
at KMK, will share responsibility for the day-to-day management of
the firm with Managing Partner Paul V. Muething and will take on a
more visible role with clients and in the business and civic
communities as a leader of the firm.
"This is a significant step in our succession planning initiative,
and we are confident that Rachael will help drive the firm's
continued success," stated Paul Muething. "Rachael and I will
work closely together to develop and implement strategic
initiatives that address and meet our clients' changing business
and legal needs," Muething continued.
Rowe has been an attorney with KMK since 1997 and was named
partner in 2003. She has served as co-leader of the Litigation
practice group at KMK since 2011, but will step down from that
role as she takes on her new responsibilities. Rowe will continue
to actively serve clients in her practice of law.
One of the initiatives Rowe will help lead is expanding the firm's
platform through the strategic acquisition of attorneys. "Our
goal is to deliver enhanced synergies to current clients as well
as enable the firm to pursue new clients and industries. KMK is
on the precipice of growth that is truly exciting," said Rowe.
"Paul Muething has managed our law firm from a business standpoint
in a way that is unparalleled amongst our peers in the industry.
He has driven results and service to our clients at a level that
is nothing less than extraordinary," Rowe said. "Paul understands
my passion for insisting that we have the best talent here. I am
excited to help the firm identify the people we want to be our
partners next year and in 10 years and demonstrate to them that
KMK is the best firm in the region to offer them opportunities to
grow professionally and personally," she stated.
Rowe currently serves on the board of Big Brothers/Big Sisters of
Greater Cincinnati. She volunteers as a Juvenile Court Magistrate
for Hamilton County, Ohio. Rowe earned her J.D. from Cincinnati
College of Law in 1996 and is licensed to practice law in Ohio and
Kentucky. She graduated from Miami University in 1993, magna cum
laude, Phi Beta Kappa. She has been listed in The Best Lawyers in
America(R) and Ohio Super Lawyers(R). Rowe was a member of
Leadership Cincinnati (Class XXXII), and she was a 2002 Fellow of
the Cincinnati Academy of Leadership for Lawyers.
About Keating Muething & Klekamp
The law firm of Keating Muething & Klekamp PLL --
http://www.kmklaw.com/-- based in Cincinnati, Ohio, is a
nationally-recognized law firm delivering sophisticated legal
solutions to businesses of all sizes -- from Fortune 100
corporations to start-up companies. Chambers USA: America's
Leading Business Lawyers(R) 2012 recognized KMK as a leading law
firm in Ohio in Bankruptcy & Restructuring, Corporate and Mergers
& Acquisitions, and General Commercial Litigation. The National
Law Journal named KMK to its 2012 Midsized Hot List which
recognizes the top 20 midsized law firms in the U.S. The 2011
Super Lawyers(R) Business Edition named KMK the Top Large Law Firm
in Ohio in Business and Transactions Law. KMK received 28 first
tier rankings in the 2011-12 Best Law Firms survey (Metropolitan
Cincinnati) by U.S. News and Best Lawyers. Founded in 1954, KMK
has approximately 105 lawyers and a support staff of 150
employees.
* BOND PRICING -- For Week From May 7 to 11, 2012
-------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
AMBAC INC 9.375 8/1/2011 18.200
AMBAC INC 9.500 2/15/2021 18.500
AMBAC INC 7.500 5/1/2023 19.100
AMBAC INC 6.150 2/7/2087 0.625
AES EASTERN ENER 9.000 1/2/2017 26.500
AGY HOLDING COR 11.000 11/15/2014 36.027
AHERN RENTALS 9.250 8/15/2013 63.850
ALION SCIENCE 10.250 2/1/2015 41.750
AMER GENL FIN 5.200 5/15/2012 98.799
AMR CORP 9.000 8/1/2012 48.550
AM AIRLN PT TRST 10.180 1/2/2013 67.550
AM AIRLN PT TRST 7.379 5/23/2016 31.000
A123 SYSTEMS INC 3.750 4/15/2016 30.000
BROADVIEW NETWRK 11.375 9/1/2012 86.500
BLOCKBUSTER INC 11.750 10/1/2014 1.688
CHRCH CAP FNDING 6.600 5/15/2013 25.000
DELTA AIR 1992B1 9.375 9/11/2017 26.625
DELTA AIR 1993A1 9.875 4/30/2049 19.260
DIRECTBUY HLDG 12.000 2/1/2017 18.375
DIRECTBUY HLDG 12.000 2/1/2017 18.375
DUNE ENERGY INC 10.500 6/1/2012 92.750
EDISON MISSION 7.500 6/15/2013 74.125
EASTMAN KODAK CO 7.250 11/15/2013 29.100
EASTMAN KODAK CO 7.000 4/1/2017 28.000
EASTMAN KODAK CO 9.950 7/1/2018 30.100
EASTMAN KODAK CO 9.200 6/1/2021 28.375
ENERGY CONVERS 3.000 6/15/2013 51.250
FIRST METRO 6.900 1/15/2019 15.000
GLB AVTN HLDG IN 14.000 8/15/2013 33.250
GMX RESOURCES 5.000 2/1/2013 73.256
GMX RESOURCES 5.000 2/1/2013 73.750
GMX RESOURCES 4.500 5/1/2015 44.000
GLOBALSTAR INC 5.750 4/1/2028 49.250
HAWKER BEECHCRAF 8.500 4/1/2015 19.000
HAWKER BEECHCRAF 8.875 4/1/2015 19.000
HAWKER BEECHCRAF 9.750 4/1/2017 3.026
ELEC DATA SYSTEM 3.875 7/15/2023 95.000
HSBC FIN CORP 7.000 5/15/2012 100.016
LEHMAN BROS HLDG 0.250 12/8/2012 22.000
LEHMAN BROS HLDG 0.250 12/8/2012 22.000
LEHMAN BROS HLDG 1.000 12/9/2012 22.000
LEHMAN BROS HLDG 1.500 3/29/2013 22.000
LEHMAN BROS HLDG 1.000 10/17/2013 22.000
LEHMAN BROS HLDG 0.250 12/12/2013 22.000
LEHMAN BROS HLDG 0.250 1/26/2014 22.000
LEHMAN BROS HLDG 1.250 2/6/2014 22.000
LEHMAN BROS HLDG 1.000 3/29/2014 22.000
LEHMAN BROS HLDG 1.000 8/17/2014 22.000
LEHMAN BROS HLDG 1.000 8/17/2014 22.000
LEHMAN BROS INC 7.500 8/1/2026 10.250
LIFECARE HOLDING 9.250 8/15/2013 59.500
MASHANTUCKET PEQ 8.500 11/15/2015 10.600
MF GLOBAL LTD 9.000 6/20/2038 45.875
MANNKIND CORP 3.750 12/15/2013 56.000
NEWPAGE CORP 10.000 5/1/2012 2.000
NETWORK EQUIPMNT 7.250 5/15/2014 35.100
PMI GROUP INC 6.000 9/15/2016 22.100
PENSON WORLDWIDE 8.000 6/1/2014 31.160
PENSON WORLDWIDE 12.500 5/15/2017 41.500
POWERWAVE TECH 3.875 10/1/2027 21.393
POWERWAVE TECH 3.875 10/1/2027 21.500
REDDY ICE HLDNGS 10.500 11/1/2012 55.500
REDDY ICE CORP 13.250 11/1/2015 28.000
REAL MEX RESTAUR 14.000 1/1/2013 46.000
RESIDENTIAL CAP 6.500 4/17/2013 35.000
RESIDENTIAL CAP 6.875 6/30/2015 47.470
SUPERVALU INC 7.500 5/15/2012 100.000
THORNBURG MTG 8.000 5/15/2013 8.750
TOUSA INC 9.000 7/1/2010 32.000
TOUSA INC 9.000 7/1/2010 31.000
TRAVELPORT LLC 11.875 9/1/2016 36.375
TRAVELPORT LLC 11.875 9/1/2016 37.500
TIMES MIRROR CO 7.250 3/1/2013 35.000
TRIBUNE CO 5.250 8/15/2015 35.750
TRICO MARINE 3.000 1/15/2027 0.750
TRICO MARINE 3.000 1/15/2027 0.031
TERRESTAR NETWOR 6.500 6/15/2014 10.000
TEXAS COMP/TCEH 7.000 3/15/2013 15.000
TEXAS COMP/TCEH 10.250 11/1/2015 21.125
TEXAS COMP/TCEH 10.250 11/1/2015 23.750
TEXAS COMP/TCEH 10.250 11/1/2015 21.450
TEXAS COMP/TCEH 15.000 4/1/2021 29.500
TEXAS COMP/TCEH 15.000 4/1/2021 30.000
USEC INC 3.000 10/1/2014 45.500
WASH MUT BANK FA 6.875 6/15/2011 0.010
WASH MUT BANK FA 5.650 8/15/2014 0.010
WASH MUT BANK FA 5.125 1/15/2015 0.010
WASH MUT BANK NV 6.750 5/20/2036 0.875
XEROX CORP 5.500 5/15/2012 100.000
OSI PHARMACEUTIC 3.000 1/15/2038 79.510
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
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firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***