/raid1/www/Hosts/bankrupt/TCR_Public/120726.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, July 26, 2012, Vol. 16, No. 206
Headlines
1717 MARKET PLACE: Schedules & Statements Due Aug. 1
2279-2283 THIRD AVENUE: Hiring Rattet Pasternak as Counsel
2279-2283 THIRD AVENUE: Sec. 341 Creditors Meeting Set for Aug. 24
400 BLAIR: Court to Consider Confirmation of Amended Plan Today
ABOUND SOLAR: Chapter 7 Threatens Colorado Firm's Viability
ALCO CORP: Aug. 29 Hearing on Amended Disclosure Statement
ALLIANCE ONE: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable
ALTAMONT GLOBAL: Judge Freezes Assets Over $13MM Fraud
ANDRE ROCHAT: Judge Markell Approves Chapter 11 Plan
AZURE DYNAMICS: Has C$4 Million Bankruptcy Financing
AZURE DYNAMICS: Canadian Filing Recognized as Main Proceeding
BASS LTD: Dispute Over Billboard Lease Goes Back to State Court
BEACHWALK LP: Sec. 341 Creditors' Meeting Set for Aug. 24
BEACHWALK LP: Files Schedules of Assets and Liabilities
BEACHWALK LP: Seeks Court Approval of Freeland Firm as Counsel
BETSEY JOHNSON: Files Suit Against H&S Fashion Over Fabric Sales
BUFFETS INC: Chapter 11 Reorganization Plan Declared Effective
CAREFREE WILLOWS: Contribution Raised; Plan Hearing on Aug. 13
CDC CORP: Ver Ploeg & Lumpkin OK'd to Handle Insurance Coverage
CHURCH STREET: Taps Robert J. Welhoelter as Co-Bankruptcy Counsel
CHART INDUSTRIES: Moody's Reviews 'Ba3' CFR/PDR for Upgrade
CIRCUS AND ELDORADO: Responds to Noteholder Objection
COMMUNITY HOME FIN'L: Has Interim Access to Cash Collateral
CONSTRUCTION SUPERVISION: HD Supply Suit Remanded to State Court
CONVERGYS CORP: S&P Affirms 'BB+' Corp. Credit Rating; Off Watch
CORROZI-FOUNTAINVIEW: Trustee Wants Case Converted or Dismissed
CRESCENT HOLDINGS: S&P Assigns 'B' Corporate Credit Rating
CRESCENT RESOURCES: Moody's Rates $325MM Sr. Secured Notes 'Caa2'
DALLAS ROADSTER: Wants to Employ Dohmeyer as Valuation Expert
DAZ VINEYARDS: To Present Plan for Confirmation Aug. 29
DIGITALGLOBE INC: S&P Puts 'BB' Corp. Credit Rating on Watch Neg
DREIER LLP: Taps Constellation as Advisor, Witness
EASTMAN KODAK: Judge Delays Ruling in Patent Row With Apple
EDWIN RITTER JONAS: Fails to Stay Case Dismissal
EVERGREEN SOLAR: Plan of Liquidation Declared Effective
EXIDE TECHNOLOGIES: S&P Affirms 'B' Rating on Sr. Secured Notes
FENTON SUB: Files Second Amended Plan of Reorganization
FOOTHILLS TEXAS: Contract With MTGLQ Investors Not Executory
FSJ IMPORTS: Court Rules Case Filed in Bad Faith, Orders Dismissal
GENCORP INC: Moody's Reviews 'B1' CFR for Possible Downgrade
GENCORP INC: S&P Puts 'B' Corp. Credit Rating on Watch Developing
GEORGES MARCIANO: Appellate Court Stops Sale Proceedings
GLOBAL AVIATION: Can Pay $137,031 in Bonuses to 5 Employees
GRANITE DELLS: AED Says Plan Outline Contains Misleading Info
HARDAGE HOTEL: OneWest Consents to Use of Cash During Standstill
HAWKER BEECHCRAFT: U.S. Trustee Objects to $5 Million Bonus Plan
HOLYOKE HOSPITAL: Moody's Affirms 'Ba3' Rating on Bonds
HOSPITAL AUTHORITY OF CHARLTON: Appeals Case Dismissal Order
HOSTESS BRANDS: Seeks to Tap Cash as Union Talks Ongoing
IBI CORP: Canadian Securities Agencies Issued Cease Trade Orders
IL LUGANO: Plan of Reorganization Wins Court Approval
INNOPHOS INC: S&P Raises Corp Credit Rating to BB+; Outlook Stable
ISLE OF CAPRI: Moody's Rates $350MM Senior Subordinated Notes
ISLE OF CAPRI: S&P Rates New $350MM Sr. Subordinated Notes 'CCC+'
JETSTAR PARTNERS: U.S. Trustee Balks at Plan Outline Approval
KB HOME: Fitch Rates $250-Mil. Debt Issue 'B+'/RR4'; Outlook Neg.
KB HOME: Moody's Rates $250MM Sr. Unsecured Note Offering 'B2'
KB HOME: S&P Rates Proposed $250-Mil. Senior Notes Due 'B'
LAUREATE EDUCATION: Notes Upsize No Impact on Moody's 'B2' Rating
LIQUID CAPITAL: CFTC to Revoke Registrations Over Ponzi Scheme
LEHMAN BROTHERS: Liquidates Yellowcake Uranium
LEHMAN BROTHERS: Asian Unit Creditors Get 9% Recovery on Claims
LSP ENERGY: Potential Bidder Objects to $249MM Stalking Horse Deal
MA BB OWEN: Plan Confirmation Hearing Scheduled for Aug. 20
METRO-GOLDWYN-MAYER: Mulls Public Stock Offering
MF GLOBAL: Trustee Considering Suits Against U.K. Staff
NORTHSTAR AEROSPACE: Wins Court OK to Assets for $70 Million
OLSEN AGRICULTURAL: Plan Confirmation Hearing on Aug. 22
PEREGRINE FIN'L: Trustee Allowed to Pay for Bond With Firm Funds
PEREGRINE FIN'L: CFTC Seeks Advice From Accounting Board
PEREGRINE FIN'L: Bankruptcy Trustee Obtains Role-Clarifying Order
PEREGRINE FIN'L: Judge Eases Trustee Access to Missing Funds
PINNACLE HOLDCO: $20MM Debt Upsize Does Not Affect S&P's 'B' CCR
POSTMEDIA NETWORK: Moody's Lowers CFR to 'B3'; Outlook Stable
PRINCE SPORTS: Gets Final Order to Obtain $2.5MM DIP Financing
PRINCE SPORTS: Plan Confirmation Hearing Scheduled Tomorrow
PRUDENTIAL FINANCIAL: Moody's Affirms '(P)Ba1' Pref. Shelf Rating
REITTER CORP: Plan Confirmation Hearing on Oct. 2
RESIDENTIAL CAPITAL: Proposes Bradley Arant as Special Counsel
RESIDENTIAL CAPITAL: Proposes Severson as Calif. Litigation Atty.
RESIDENTIAL CAPITAL: Proposes Fortace LLC as RMBS Consultant
RESIDENTIAL CAPITAL: Taps Mercer as Compensation Consultant
RESIDENTIAL CAPITAL: Spars With Creditors Over Deal Deadline
RG STEEL: Court Approves Management Incentive Plan
RICHARD ROSS: Non-Debtor Wife Can't Avoid Transfer of Interest
RIVER CANYON: Wants to Employ Dennis Hogan as Accountant
ROOMSTORE INC: Judge Converts Case to Chapter 7
SAVIENT PHARMACEUTICALS: No Default Under Conv. Notes, Court Rules
SINCLAIR BROADCAST: Station Acquisition Won't Hit Moody's Rating
SHAMROCK-SHAMROCK: Wins Plan Confirmation After PNC Deal Reached
SHUBH HOTELS PITTSBURGH: Loan Advances Recharacterized as Equity
SPANSION INC: Pushes 3rd Circ. to Overturn Bar on Apple Suit
STERLING SHOES: Provides Default Status Update
SWIFT ENERGY: Moody's Confirms 'B2' CFR; Outlook Positive
T-L BRYWOOD: Exclusive Plan Filing Period Extended to Oct. 10
TRONOX INC: Trial on $25-Bil. Suit vs. Kerr-McGee Resumes
UNITED WESTERN: Can Exclusively File Plan Until Oct. 1
UNIVERSAL HOSPITAL: Moody's Rates New $425MM Secured Notes 'B3'
UNIVERSAL HOSPITAL: S&P Rates Proposed $425MM 2nd Lien Notes 'B+'
WINDSTREAM CORP: Moody's Rates New $900MM Sr. Secured Debt 'Baa3'
WISP RESORT: 2-Day Trial in December in Lawsuit Against BB&T
Y-ME NATIONAL: Breast Cancer Charity Closes Doors, Files Chapter 7
* Personal Bankruptcy Expected to Drop by 11%, Fitch Says
* Sallie Mae, CFPB to Back Student-Loan Changes at Senate Hearing
* Burleson LLP Adds Attorney Elizabeth M. Guffy
* Oaktree Law's Moradi-Lopes Named LAPPL Panel Atty. for Bankr.
* Resilience Capital Partners Completes Fundraising for Fund III
* Recent Small-Dollar & Individual Chapter 11 Filings
*********
1717 MARKET PLACE: Schedules & Statements Due Aug. 1
----------------------------------------------------
Judge Arthur B. Federman issued an Order to Show Cause requiring
1717 Market Place, L.L.C., to file financial and other documents
including its schedules of assets and liabilities and statement of
financial affairs by Aug. 1. Otherwise, the Court will dismiss
the bankruptcy case.
1717 Market Place LLC, a grocery-store business, filed for Chapter
11 protection (Bankr. W.D. Mo. Case No. 12-bk-00984) on July 17,
2012, in Springfield, Missouri. The Debtor estimated assets and
liabilities of at least $10 million. G&S Holdings LLC owns 98% of
the company and the remaining 2% is owned by J. Scott Schaefer and
Richard T. Gregg, according to court papers.
1717 Market Place said it is a defendant in a lawsuit brought by
Regions Bank in Joplin, Missouri, relating to a promissory note.
The bank is seeking the appointment of a receiver.
David Schroeder Law Offices, P.C., serves as the Debtor's counsel.
2279-2283 THIRD AVENUE: Hiring Rattet Pasternak as Counsel
----------------------------------------------------------
2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue
Development LLC filed papers in Court seeking formal approval to
employ Rattet Pasternak, LLP, in Harrison, New York, as their
bankruptcy attorneys to file and prosecute the Chapter 11 cases
and all related matters.
The Debtors propose to pay Rattet Pasternak at these hourly rates:
Partners $475 to $650
Of Counsel $475
Associates $250 to $450
Paraprofessionals $150
Rattet Pasternak has received $25,000 as prepetition retainer from
the Debtors.
To the best of the Debtors' knowledge, Rattet Pasternak does not
hold or represent any interest adverse to the Debtors' estates,
and is a "disinterested person" as defined in Bankruptcy Code Sec.
101(14).
Rattet Pasternak, however, also represents the Debtor 3210
Riverdale Associates LLC, who has the same managing member, and
whose Chapter 11 plan of reorganization is scheduled for
confirmation on Aug. 7, 2012. Notwithstanding, Third Avenue
Associates has no other connection to or financial transactions or
activities with the Debtors in the Chapter 11 cases. In addition,
the Debtors have conducted no financial transactions or activities
between them.
About 2279-2283 Third Avenue
2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue
Development LLC sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case Nos. 12-13092 and 12-13093) on July 17, 2012. Third
Avenue Associates owns two contiguous multi residential buildings
located at 2279-2283 Third Avenue, in New York. Third Avenue
Development is the sole member of Associates. The Property is
Associate's primary asset, while Development's membership
interests in Associates is its sole asset.
The managing member of each of the Debtors is Michael Waldman. He
is also the managing member of 3210 Riverdale Associates LLC and
the managing member of the sole member of 3210 Riverdale
Development LLC, other Chapter 11 proceedings currently pending
before the SDNY Court under Case Nos. 12-11286 and 12-11109.
Third Avenue Associates obtained financing from commerce bank of
$14 million and Development obtained mezzanine financing from HSBC
Capital (USA) Inc. in the amount of $6 million. HSBC refused to
grant additional $700,000 in financing requested by the Debtor to
fund build-outs required by the Internal Revenue Service.
The Commerce note -- which was assigned to TD Bank and then to
LSV-JCR 124th LLC -- was secured by a mortgage on the Properties,
and the HSBC obligation is secured by a mortgage on Associates'
membership interest owned by Development.
The HSBC note matured in 2011 and HSBC called the loan into
default and commenced a foreclosure action. The state court
entered an order appointing Steven Weiss as receiver of rents.
THSBC has assigned its mezzanine note to LCP-GC LLC.
On July 3, 2012, the Debtors and their two secured lenders, LSV-
JCR 124th LLC and LCP-GC LLC entered into a settlement that
requires the Debtors to transfer ownership of the buildings to the
secured lenders through a Chapter 11 plan.
Judge James Peck oversees the case. Lawyers at Rattet Pasternak,
LLP, serve as the Debtors' counsel.
Third Avenue Associates estimated up to $50 million in both assets
and debts.
2279-2283 THIRD AVENUE: Sec. 341 Creditors Meeting Set for Aug. 24
------------------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of creditors
under 11 U.S.C. Sec. 341(a) in the Chapter 11 cases of 2279-2283
Third Avenue Associates LLC and 2279-2283 Third Avenue Development
LLC on Aug. 22, 2012 at 3:00 p.m. at 80 Broad St., 4th Floor,
USTM.
The Debtors are required to file their schedules of assets and
liabilities and statement of financial affairs by July 31. A
Chapter 11 Plan and Disclosure Statement must be filed by Nov. 14.
The Court will hold an Initial Case Conference by Aug. 16.
About 2279-2283 Third Avenue
2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue
Development LLC sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case Nos. 12-13092 and 12-13093) on July 17, 2012. Third
Avenue Associates owns two contiguous multi residential buildings
located at 2279-2283 Third Avenue, in New York. Third Avenue
Development is the sole member of Associates. The Property is
Associate's primary asset, while Development's membership
interests in Associates is its sole asset.
The managing member of each of the Debtors is Michael Waldman. He
is also the managing member of 3210 Riverdale Associates LLC and
the managing member of the sole member of 3210 Riverdale
Development LLC, other Chapter 11 proceedings currently pending
before the SDNY Court under Case Nos. 12-11286 and 12-11109.
Third Avenue Associates obtained financing from commerce bank of
$14 million and Development obtained mezzanine financing from HSBC
Capital (USA) Inc. in the amount of $6 million. HSBC refused to
grant additional $700,000 in financing requested by the Debtor to
fund build-outs required by the Internal Revenue Service.
The Commerce note -- which was assigned to TD Bank and then to
LSV-JCR 124th LLC -- was secured by a mortgage on the Properties,
and the HSBC obligation is secured by a mortgage on Associates'
membership interest owned by Development.
The HSBC note matured in 2011 and HSBC called the loan into
default and commenced a foreclosure action. The state court
entered an order appointing Steven Weiss as receiver of rents.
THSBC has assigned its mezzanine note to LCP-GC LLC.
On July 3, 2012, the Debtors and their two secured lenders, LSV-
JCR 124th LLC and LCP-GC LLC entered into a settlement that
requires the Debtors to transfer ownership of the buildings to the
secured lenders through a Chapter 11 plan.
Judge James Peck oversees the case. Lawyers at Rattet Pasternak,
LLP, serve as the Debtors' counsel.
Third Avenue Associates estimated up to $50 million in both assets
and debts.
400 BLAIR: Court to Consider Confirmation of Amended Plan Today
---------------------------------------------------------------
The Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the
District of New Jersey will convene a hearing today, July 26,
2012, at 10 a.m., to consider the confirmation of 400 Blair Realty
Holdings, LLC's Chapter 11 Plan dated June 29, 2012.
According to the First Modified Disclosure Statement, the Plan
provides for the Debtor to continue to own and operate the
property -- consisting of a 181,000 sq. ft. industrial building
situated on 14.7 acres located at 400 Blair Road, Carteret, New
Jersey, including leasing, possibly selling or the combination of
both.
The Plan will be funded by (i) the monies held by the receiver,
(ii) from United States Land Resources, L.P., and (iii) the
$310,000 sanction monies to the extent that the District Court
releases same to the Debtor or the receiver and any future rents
derived from the property.
With respect to the $310,000 held by the District Court, Wells
Fargo Bank Minnesota, N.A., as trustee for the registered holders
of Solomon Brothers Mortgage Securities VII, Inc., Commercial
Mortgage Pass-Through Certificates, Series 2000-C2, and the Debtor
will make a joint application to the District Court requesting
that the monies be disbursed to SBMS to be added to the SBMS
escrow.
The Debtor will also be permitted to collect and use any future
rents that may be derived from the property so as to reduce the
sums to be advanced by USLR, to the extent permitted in, and
subject to the terms of, the SBMS loan documents.
The terms of the Plan include, among other things:
* The allowed secured claim of the Borough of Carteret, not
impaired, will be paid in full on or before the effective
Date of the Plan.
* The secured claim of Wells Fargo Bank, which is impaired,
will be paid in accordance with a settlement.
* Holders of general unsecured claims will be paid (i)
interest at the Interest Rate from and after the Effective
Date; (ii) monthly constant principal and interest payments
at the interest rate starting on the first day of the second
month succeeding the Effective Date with a balloon together
with the forty-eighth payment; and (iii) amortization over
20 years.
* Interest holders are not impaired and will retain their
interests.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/400_BLAIR_ds_1modified.pdf
About 400 Blair Realty Holdings
400 Blair Realty Holdings, LLC, in Morristown, New Jersey, was
formed in June 2000 to acquire real property improved with 181,000
sq. ft industrial building situated on 14.7 acres located at 400
Blair Road, Carteret, Middlesex County, New Jersey. The Property
was acquired on Aug. 6, 1999.
United States Land Resources, L.P., holds a 50% equity interest in
400 Blair. USLR's general partner is United States Realty
Resources, Inc., and Lawrence S. Berger is the president of USRR.
400 Blair's other member is Success Treuhand GmbH, which holds a
50% equity interest. Success is a trust set up under German law.
Success operates much like a United States trust company.
Success' sole owner is Eckart Straub, a German national.
400 Blair filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No.
11-37887) on Sept. 23, 2011, after a court appointed a receiver
for its property and ordered a foreclosure sale. Judge Michael B.
Kaplan presides over the case. In its petition, the Debtor
estimated $10 million to $50 million in assets and $1 million to
$10 million in debts. The petition was signed by Lawrence S.
Berger, manager.
The Debtor's bankruptcy counsel is Morris S. Bauer, Esq., at
Norris McLaughlin & Marcus, PA, in Bridgewater, New Jersey.
ABOUND SOLAR: Chapter 7 Threatens Colorado Firm's Viability
-----------------------------------------------------------
Stephanie Gleason at Dow Jones' DBR Small Cap reports that storage
and shipping company Colorado Distribution Group LLC is asking a
bankruptcy court for permission either to sell or collect rent on
the property Abound Solar Inc. has at its facility, saying the
situation is threatening its ability to stay in business.
Abound Solar Inc., a recipient of a federal loan guarantee from
the U.S. Department of Energy, filed for Chapter 7 bankruptcy
liquidation (Bankr. D. Del. Case No. 12-11972.) on July 2.
Abound Solar was awarded a $400 million loan guarantee from the
U.S. Department of Energy in July 2010 to build a facility in
Indiana and expand its Longmont facility.
Abound Solar joins fellow panel makers Solyndra LLC and Evergreen
Solar Inc. in the Delaware bankruptcy court, those firms having
sought Chapter 11 protection in September and August,
respectively.
ALCO CORP: Aug. 29 Hearing on Amended Disclosure Statement
----------------------------------------------------------
U.S. Bankruptcy Judge Mildred Caban Flores will convene a hearing
Aug. 29, 2012 at 9:00 a.m. to consider the adequacy of the
disclosure statement in explaining the terms of Alco Corporation's
Chapter 11 plan. Objections, if any, are due 14 days prior to the
hearing.
A June 20 hearing was previously scheduled with respect to the
original version of the Disclosure Statement.
According to the First Amended Disclosure Statement dated June 26,
2012, the Plan considers the full payment of all administrative,
secured creditors and priority claims and a 50% dividend to the
general unsecured creditors on monthly installments within 5 years
from the effective date.
The liquidation analysis shows that in a liquidation scenario, the
estimated dividend for the unsecured creditors is 21% considering
full liability to Mapfre. In the even Mapfre's claim is not owed,
the 21% dividend will increase to 34%. In contrast the Plan
proposes that holders of general unsecured claims estimated to
aggregate $5.81 million will receive 50% of their claims on
monthly installments during a five-year term.
Mapfre claims to have a security interest over some of the
Debtor's assets as a consequence of an indemnity agreement. The
Disclosure Statement says that the any liability to Mapfre is
"contingent and undetermined." Any amounts owed to Mapfre will be
paid in full under the Plan with interest at the prime rate
existing on confirmation date or upon the sale of any collateral
that may guarantee the claim.
The Debtor listed Banco Popular de Puerto Rico as a secured
creditor owed $874,000. The Debtor has paid BPPR $295,000 from
the proceeds of the sale of the asphalt plant located at Toa Alta,
Puerto Rico. The parties are currently reconciling the amounts
owed by the Debtor. The allowed claim, which is impaired under
the Plan, will be paid under an amortization table of 15 years at
the prime rate existing at confirmation date, with payments not
less than $4,734 per month.
The owner -- LRG Investment Corp. -- will retain its equity
interest in the Debtor.
A copy of the Disclosure Statement dated June 26, 2012, is
available at:
http://bankrupt.com/misc/Alco_Corp_Amended_DS.pdf
About Alco Corp.
Alco Corporation in Dorado, Puerto Rico, filed for Chapter 11
bankruptcy (Bankr. D. P.R. Case No. 12-00139) on Jan. 12, 2012.
Carmen D. Conde Torres, Esq., and C. Conde & Associates represent
the Debtor in its restructuring effort. Alco tapped Jimenez
Vasquez & Associates, PSC, as accountants. The Debtor scheduled
$11.2 million in assets and $7.76 million in debts. The petition
was signed by Alfonso Rodriguez, president.
ALLIANCE ONE: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'B' corporate
credit rating on Morrisville, N.C.-based Alliance One
International Inc. (AOI), and revised its outlook on the company
to stable from negative. "We also affirmed our 'BB-' rating on the
company's senior secured debt. The recovery rating on AOI's
secured debt remains '1', indicating our expectation for very high
recovery (90% to 100%) in the event of a payment default," S&P
said.
"At the same time, we lowered our rating on the company's senior
unsecured notes to 'B-' from 'B', and revised the recovery rating
to '5' from '4', indicating our expectation of modest (10% to 30%)
recovery for noteholders in the event of a payment default," S&P
said.
"Our rating on the company's $115 million convertible notes due
2014 remains 'CCC+', with a recovery rating of '6', indicating our
expectation of negligible (0% to 10%) recovery in the event of a
payment default," S&P said.
"The lowering of the issue-level rating on the company's $635
million unsecured notes due 2016 primarily reflects our view that
recovery prospects will be weaker in the event of a payment
default under our simulated default scenario," said Standard &
Poor's credit analyst Mark Salierno. "This is based on higher
senior secured priority claims following the company's upsized
accounts receivable securitization program, which was increased to
$250 million from $125 million."
"Our affirmation of the 'B' corporate credit rating and outlook
revision to stable reflects our expectation that the tobacco leaf
company's operating performance will continue to improve in fiscal
2013 (ended March 31) and that the company will achieve sales
growth and maintain EBITDA margins such that leverage strengthens
closer to the 6x area (adjusted for committed inventories) by the
end of the fiscal year, compared to about 6.8x at the fiscal year
ended March 31, 2012."
"The ratings on AOI reflect Standard & Poor's view that the
company will maintain a 'weak' business risk profile, reflecting
highly competitive global competition, susceptibility to supply
and demand imbalances that can be tied to external factors such as
weather and political unrest, risk of further shifting towards
direct leaf sourcing, and its exposure to foreign currency
volatility. We also believe the company will continue to maintain
a 'highly leveraged' financial risk profile, based on our view
that the company's financial policy will remain aggressive, cash
flows will continue to be volatile, and key credit metrics will be
indicative of the company's financial profile through the end of
fiscal 2013; this includes the ratio of total debt to EBITDA
remaining above 5x and funds from operations to total debt
remaining below 12%," S&P said.
ALTAMONT GLOBAL: Judge Freezes Assets Over $13MM Fraud
------------------------------------------------------
Judge Gregory Presnell, of the U.S. District Court for the Middle
District of Florida, on July 16, 2012, entered an emergency order
freezing the assets of Philip Leon of Altamonte Springs, Fla.,
Paul Rangel of Apopka, Fla., John Wilkins of Chuluota, Fla., and
their company, Altamont Global Partners LLC, of Longwood, Fla.
The order also prohibits the defendants from destroying or
altering books and records. The judge set a hearing date for
July 30, 2012.
The order arises from a federal court enforcement action filed by
the U.S. Commodity Futures Trading Commission on July 16, 2012,
charging the defendants with futures, foreign currency (forex),
and options fraud, and misappropriation. The CFTC complaint also
charges the defendants with making false statements to the
National Futures Association (NFA). AGP and Wilkins are
registered with the CFTC and are NFA members.
The complaint alleges that since at least March 2009 until at
least June 22, 2012, defendant AGP -- owned and operated by Leon,
Rangel, and Wilkins -- solicited approximately $13 million from
approximately 198 participants who invested in two investment
pools operated by AGP: The McKinley Fund, LLC (McKinley) and The
Matterhorn Fund, LLC (Matterhorn). These pools traded futures,
options, and off-exchange forex contracts, according to the
complaint. The defendants allegedly misappropriated more than
$5.2 million of pool funds, using the funds to cover AGP's
operating expenses, commission payments, travel, meals,
entertainment expenses, $140,000 in credit card payments for
Leon's wife, and at least one loan AGP made to Leon. The
misappropriation also allegedly included the use of pool funds to
pay "loans" and "advances" of approximately $1,419,000 to Leon,
$615,000 to Rangel, and $651,000 to Wilkins.
To perpetuate their fraud and misappropriation, the defendants
allegedly prepared and distributed false quarterly account
statements to pool participants that purported to show pool
participants earning profits on their investments. According to
the complaint, as of the quarter ending March 31, 2012, AGP issued
quarterly statements to pool participants that, collectively,
showed that the Matterhorn pool participants' interests were
approximately $10 million, and the McKinley pool participants'
interests were approximately $6.5 million. However, in actuality,
as of March 31, 2012, the value of all assets held by Matterhorn
was approximately $1 million and the value of all assets held by
McKinley was approximately $2.2 million, according to the
complaint.
AGP and Wilkins allegedly attempted to hide their fraud from the
NFA. During a June 2012 examination, AGP and Wilkins allegedly
provided the NFA with several oral and written false statements in
an attempt to conceal the defendants' trading losses and
misappropriation of pool funds. Notably, AGP and Wilkins provided
the NFA with false balance sheets stating that, as of March 31,
2012, Matterhorn had a purported net asset balance of $9.9 million
and McKinley had a purported next asset balance of $6.5 million,
according to the complaint. Eventually, Wilkins admitted to NFA
staff that AGP had been providing falsely inflated quarterly
statements to Matterhorn and McKinley pool participants since
2009, according to the complaint.
In its continuing litigation, the CFTC seeks civil monetary
penalties, restitution, rescission, disgorgement of ill-gotten
gains, trading and registration bans, and preliminary and
permanent injunctions against further violations of the federal
commodities laws, as charged.
The CFTC appreciates the assistance of the NFA and the U.S.
Marshals Service.
CFTC Division of Enforcement staff responsible for this case are
Rachel Hayes, Peter Riggs, Stephen Turley, Jessica Harris, Charles
Marvine, Rick Glaser, and Richard Wagner.
ANDRE ROCHAT: Judge Markell Approves Chapter 11 Plan
----------------------------------------------------
Tim O'Reiley at Las Vegas Review-Journal reports that the U.S.
Bankruptcy Court Judge Bruce Markell approved the Chapter 11
reorganization plans for Andre Rochat and three of his companies,
including Andre's Restaurant and Lounge in the Monte Carlo and
Alize atop the Palms. With completion of a few administrative
tasks, Mr. Rochat can close the case just over a year after it was
filed.
According to the report, Mr. Rochat slimmed his $4.7 million debt
by more than half by getting a bank to accept a short sale on his
former downtown location at 401 S. Sixth St., and by paying off
others in installments running as long as five years.
The report, citing court documents, says Alize cleared just
$71,000 on $4.8 million in revenues during the 51 weeks ended
June 30, while Andre's made $27,000 on $2.4 million.
The report notes the key break toward financial reorganization
came in September, when Plaza Bank agreed to accept a $572,000
short sale on the downtown Andre's property. This cleared a debt
that stood at $2.6 million.
Marius Andre Rochat, his Alize restaurant at the top of the Palms
Casino Resort, Andre's at Monte Carlo, and Mr. Rochat's
restaurant-management company, Gastronomy Management Group, filed
Chapter 11 petitions (Bankr. D. Nev. Case No. 11-20808) on July 8,
2011. Mr. Rochat's petition estimated $100,000 to $500,000 in
assets and $1 million to $10 million in debts. Mr. Rochat is
represented by The Law Offices of Richard McKnight.
AZURE DYNAMICS: Has C$4 Million Bankruptcy Financing
----------------------------------------------------
Judge Walter Shapero of the U.S. Bankruptcy Court for the Eastern
District of Michigan authorized Ernst & Young Inc., the court-
appointed monitor and authorized foreign representative of Azure
Dynamics Corporation, to enforce in the United States the order by
the Canadian Court approving C$4 million in postpetition financing
from RAM Inc.
Deborah Kovsky-Apap, Esq., at Pepper Hamilton LLP in Southfield,
Mich., representing the Foreign Representative, tells the Court
that the cash position of the Azure Group at the commencement of
the Canadian Proceedings and the Chapter 15 cases was limited.
Without post-petition financing, the Azure Group is facing a
serious liquidity crisis and the ability for the Azure Group to
maximize value for its creditors and other stakeholders will be
compromised. In the absence of collecting a material amount of
outstanding accounts receivable and/or sourcing strategic funding,
the Azure Group will not have sufficient funds to maintain its
operations as a going concern while it pursues a dual-track
process of carrying out a sale and investment solicitation process
and, at the same time, formulating and negotiating a plan of
compromise or arrangement with its creditors.
Ms. Kovsky-Apap states the Azure Group has engaged in discussions
with its key stakeholders in respect of continuing financial and
other support for its existing product offerings. As a result of
those discussions, the Azure Group focused its efforts on sourcing
DIP Financing to allow for an opportunity to pursue a partnership,
a sale or investment within the Canadian Proceedings.
With the assistance of the Monitor, Ms. Kovsky-Apap relates the
Azure Group prepared a presentation for potential DIP lenders
outlining, among other things, (i) a restructuring plan including,
a new business plan, key austerity measures and the DIP Financing
requirement during the restructuring period; (ii) estimated net
book value of assets; and (iii) a timeline for both the
restructuring plan and the DIP Financing. This presentation was
provided to seven interested parties, after they had executed a
form of confidentiality agreement.
From April 2-10, 2012, the Azure Group received proposed term
sheets from four parties, including two term sheets from financial
parties and two term sheets from strategic parties. Due to the
limited cash position of the Azure Group, management used the
following criteria to evaluate each DIP term sheet: (i) access to
immediate cash liquidity with negligible conditions precedent;
(ii) sufficient liquidity to complete a sale and investment
process; (iii) sufficient cash to support existing product lines;
and (iv) the priority ranking of the DIP Charge relative to
existing charges.
Following extensive negotiations with each of the parties, the
Azure Group determined that moving forward with the term sheet
proposed by RAM Inc. would maximize the value of the Azure Group's
assets for the benefit of its creditors and other stakeholders.
The terms of the DIP Agreement have been approved by the Canadian
Court.
The DIP Agreement provides:
A. the borrowers under the DIP Facility are Azure Dynamics
Corporation, Azure Dynamics Inc., Azure Dynamics
Incorporated and Azure Dynamics Limited;
B. the DIP Lender will provide the Azure Group with a secured
superpriority debtor-in-possession revolving credit
facility in the maximum principal amount of C$4 million;
C. availability under the DIP Facility is based on the Cash
Flow Budget agreed to between the Azure Group and the DIP
Lender; (d) the DIP Facility may be used to pay (i)
expenditures provided for in the Cash Flow Budget; (ii)
fees and expenses associated with the DIP Facility; and
(iii) such other expenditures as the Lender shall have
consented to in writing;
E. obligations under or in connection with the DIP Agreement
are secured by a security interest, charge and mortgage
in, and a Court-ordered charge on all of the Azure Group's
assets;
F. the DIP Charge will rank behind the charges created by the
Initial Order and the encumbrances listed in the Canadian
DIP Order, including the security for the SVB credit
facility and the registered security interests in favor of
JCI;
G. the rate of interest under the DIP Facility is 10.5% per
annum;
H. a Commitment Fee of 1.5% of the Maximum DIP Credit Amount
shall be paid at the time of the initial advance under the
DIP Facility;
I. the DIP Facility must be repaid on the earlier of (i)
Sept. 30, 2012, (ii) the date of the termination of the
stay period under the Initial Order of the Canadian Court
or any extension orders, or (iii) the date the DIP Lender
demands repayment of the DIP Agreement after the
occurrence of an Event of Default under the DIP Agreement;
J. upon repayment of the DIP Facility, the Azure Group is
required to pay an exit fee which is the greater of: (i)
C$400,000; and (ii) 10% of (a) the aggregate proceeds
realized on the sale of the assets or business of the
Azure Group or (b) the enterprise value of the Azure Group
if the Azure Group is refinanced, in either case minus the
aggregate interest paid to the DIP Lender under the DIP
Agreement, provided in no event will the exit fee payable
by the Azure Group result in the Lender receiving an
effective annual rate of interest greater than 35%;
K. the Azure Group is required to pay all out-of-pocket
expenses of the DIP Lender;
L. the Events of Default under the DIP Agreement are: (i)
failure to pay any amount owing to the DIP Lender when
due; (ii) any payment is made by the Azure Group that is
not contemplated by or within the Cash Flow Budget or
approved in writing by the DIP Lender; (iii) any
representation or warranty made or deemed to be made by
any of the Azure Group in the DIP Agreement or in any
other document in connection with the DIP Agreement shall
prove to have been false in any material respect at the
time made or deemed made; and (iv) any member of the Azure
Group shall default in the observance or performance of
any other covenant or obligation under the DIP Agreement
which, if curable, is not cured within five business
days after written notice from the DIP Lender;
M. the DIP Agreement is governed by the law of the Province
of British Columbia and the federal laws of Canada
applicable in the Province of British Columbia.
About Azure Dynamics Corp.
Azure Dynamics Corporation and its affiliates filed a petition in
the Supreme Court of British Columbia for an initial order under
the Companies' Creditors Arrangement Act on March 26, 2012. Kevin
B. Brennan at Ernst & Young, Inc., was appointed as the CCAA
monitor.
On the same day, the monitor commenced bankruptcy cases under
Chapter 15 of the U.S. Bankruptcy Code for Azure Dynamics
Incorporated aka Azure Dynamics U.S. Inc.; Azure Dynamics Corp.;
Azure Dynamics Inc.; and Azure Dynamics Limited (Bankr. E.D. Mich.
Case Nos. 12-47496, 12-47498, 12-47501 and 12-47502), seeking
recognition of the CCAA proceedings. The cases are jointly
administered.
Azure -- http://www.azuredynamics.com/-- considered itself a
world leader in the development and production of hybrid electric
and electric components and powertrain systems for light and
medium duty commercial vehicles. Azure targets the commercial
delivery vehicle and shuttle bus markets and is currently working
internationally with a variety of partners and customers. The
Company is committed to providing customers and partners with
innovative, cost-efficient, and environmentally-friendly energy
management solutions.
As of Dec. 31, 2011, the Azure Group had total, consolidated
assets with a net book value of $42.475 million, comprising
current assets of $31.18 million and non-current assets of
$11.30 million. As at Dec. 31, 2011, the Azure Group had total,
consolidated liabilities of $29.20 million, comprising current
liabilities of $20.6 million and non-current liabilities of
$8.58 million.
Judge Walter Shapero oversees the cases. Lawyers at Pepper
Hamilton LLP represent the Chapter 15 petitioner.
AZURE DYNAMICS: Canadian Filing Recognized as Main Proceeding
-------------------------------------------------------------
Judge Walter Shapero of the U.S. Bankruptcy Court for the Eastern
District of Michigan entered an order granting recognition of the
proceedings commenced by Azure Dynamics Corporation and its
affiliates under Canada's Companies' Creditors Arrangement Act
before the Supreme Court of British Columbia, as "foreign main
proceedings" pursuant to Chapter 15 of the U.S. Bankruptcy Code.
9 Forbes Road Investments, LLC, filed an objection to the motion.
9 Forbes is the landlord for premises located in Woburn, Mass.,
leased to Azure US pursuant to a Lease dated Oct. 1, 2001. The
parties have entered to a Settlement Agreement dated May 8, 2012,
between Azure US and the Landlord, with the consent of the Ernst &
Young, Inc., Canadian Monitor. The settlement resolves the
Objection, allows the Landlord's claim against Azure US at
US$850,0000, authorizes the Landlord to apply security held by it
in the form of cash and a letter of credit to satisfy the
Landlord's allowed claim in full and return US$150,000 to Azure
US, and transfers Azure US' right, title and interest in and to
the property remaining at the Premises to the Landlord with the
consent of Silicon Valley Bank and Residual Asset Management Inc.
About Azure Dynamics Corp.
Azure Dynamics Corporation and its affiliates filed a petition in
the Supreme Court of British Columbia for an initial order under
the Companies' Creditors Arrangement Act on March 26, 2012. Kevin
B. Brennan at Ernst & Young, Inc., was appointed as the CCAA
monitor.
On the same day, the monitor commenced bankruptcy cases under
Chapter 15 of the U.S. Bankruptcy Code for Azure Dynamics
Incorporated aka Azure Dynamics U.S. Inc.; Azure Dynamics Corp.;
Azure Dynamics Inc.; and Azure Dynamics Limited (Bankr. E.D. Mich.
Case Nos. 12-47496, 12-47498, 12-47501 and 12-47502), seeking
recognition of the CCAA proceedings. The cases are jointly
administered.
Azure -- http://www.azuredynamics.com/-- considered itself a
world leader in the development and production of hybrid electric
and electric components and powertrain systems for light and
medium duty commercial vehicles. Azure targets the commercial
delivery vehicle and shuttle bus markets and is currently working
internationally with a variety of partners and customers. The
Company is committed to providing customers and partners with
innovative, cost-efficient, and environmentally-friendly energy
management solutions.
As of Dec. 31, 2011, the Azure Group had total, consolidated
assets with a net book value of $42.475 million, comprising
current assets of $31.18 million and non-current assets of
$11.30 million. As at Dec. 31, 2011, the Azure Group had total,
consolidated liabilities of $29.20 million, comprising current
liabilities of $20.6 million and non-current liabilities of
$8.58 million.
Judge Walter Shapero oversees the cases. Lawyers at Pepper
Hamilton LLP represent the Chapter 15 petitioner.
BASS LTD: Dispute Over Billboard Lease Goes Back to State Court
---------------------------------------------------------------
Bankruptcy Judge Robert Summerhays remanded to state court the
lawsuit, Bass, Ltd., Plaintiff v. City of New Iberia and Spanish
Town Investments, LLC, Defendants, Adv. Proc. No. 11-05048 (Bankr.
W.D. La.), saying the only remaining claims are purely state law
claims. The lawsuit involves a dispute between Bass Ltd. and the
City of New Iberia over a billboard lease. The City owns land
that is subject to a recorded billboard lease with Bass. The City
plans to use that land in connection with a municipal construction
project. Bass originally entered into the lease with Segura
Enterprises, Ltd. Segura subsequently sold the leased property to
Spanish Towne Development, LLC. Spanish Towne ultimately sold the
property to the City. Despite the presence of a right of first
refusal in the lease, Bass was not informed of these sales at the
time that each sale occurred, nor was Bass afforded the
opportunity to exercise its right of first refusal. Nevertheless,
Bass did not challenge any of the sales at the time that they
occurred, but instead tendered lease payments to the new owners.
The dispute arose when the City attempted to terminate the lease
in April and May 2011. Bass sued the City and Spanish Towne in
the 16th JDC, Parish of New Iberia, seeking declaratory relief and
money damages. The state case was removed after Bass filed for
relief under Chapter 11 bankruptcy in September 2011. A copy of
the Court's July 20, 2012 Memorandum Opinion is available at
http://is.gd/N0k4FTfrom Leagle.com.
Lafayette, Louisiana-based Bass Ltd. and Bass Digital Sign Sales
LLC filed for Chapter 11 bankruptcy (Bankr. W.D. La. Case Nos. 11-
51393 and 11-51396) on Sept. 27, 2011. Judge Robert Summerhays
presides over the case. Louis M. Phillips, Esq., and Ryan James
Richmond, Esq., at Gordon, Arata, McCollam, Duplantis & Eagan LLC.
Bass Ltd. estimated $1 million to $10 million in both assets and
debts. Bass Digital estimated $500,001 to $1 million in assets
and $1 million to $10 million in debts.
The petitions were signed by Stephen Sonnier, managing member.
BEACHWALK LP: Sec. 341 Creditors' Meeting Set for Aug. 24
---------------------------------------------------------
The U.S. Trustee for the Northern District of Indiana will hold a
Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11
case of Beachwalk Limited Partnership, a Partnership, on Aug. 24,
2012, at 2:30 p.m. at One Michiana Square, 5th Floor in South
Bend, Indiana.
Objection to dischargeability of certain debts are due Oct. 23,
2012. Proofs of claim are due by Nov. 23, 2012. Government
entities have until Jan. 14, 2013, to file proofs of claim.
A Chapter 11 Plan and Disclosure Statement are due in the case by
Dec. 24, 2012.
About Beachwalk
Michigan City, Indiana-based Beachwalk Limited Partnership, a
Partnership, filed a bare-bones Chapter 11 petition (Bankr. N.D.
Ind. Case No. 12-32547) on July 18, 2012. The Debtor estimated
assets of $10 million to $50 million and debts of $1 million to
$10 million.
Related entities Moss Family LP and Beachwalk Limited Partnership
filed Chapter 11 petitions (Case Nos. 12-32540 and 12-32541) on
July 17.
Judge Harry C. Dees, Jr. presides over the case. Daniel L.
Freeland & Associates PC serves as the Debtors' counsel. The
petition was signed by Tom Moss, authorized agent.
BEACHWALK LP: Files Schedules of Assets and Liabilities
-------------------------------------------------------
Beachwalk Limited Partnership, a Partnership, filed with the
Bankruptcy Court its schedules of assets and liabilities,
disclosing:
Name of Schedule Total Assets Total Liabilities
---------------- ------------ -----------------
A - Real Property $14,635,000
B - Personal Property $121,305
C - Property Claimed
as Exempt
D - Creditors Holding Secured
Claims $6,722,561
E - Creditors Holding Unsecured
Priority Claims $0
F - Creditors Holding Unsecured
Non-Priority Claims $1,968,630
------------ -----------------
$14,756,305 $8,680,191
About Beachwalk
Michigan City, Indiana-based Beachwalk Limited Partnership, a
Partnership, filed a bare-bones Chapter 11 petition (Bankr. N.D.
Ind. Case No. 12-32547) on July 18, 2012. The Debtor estimated
assets of $10 million to $50 million and debts of $1 million to
$10 million.
Related entities Moss Family LP and Beachwalk Limited Partnership
filed Chapter 11 petitions (Case Nos. 12-32540 and 12-32541) on
July 17.
Judge Harry C. Dees, Jr. presides over the case. Daniel L.
Freeland & Associates PC serves as the Debtors' counsel. The
petition was signed by Tom Moss, authorized agent.
BEACHWALK LP: Seeks Court Approval of Freeland Firm as Counsel
--------------------------------------------------------------
Beachwalk Limited Partnership, a Partnership, filed papers in
court seeking formal approval of Daniel L. Freeland & Associates
PC as its Chapter 11 counsel. The firm attests it has no
connection with creditors or any other party in interest or their
respective attorneys.
The firm's hourly rates are $400 for partners and between $270 and
$200 for associates. The firm has received a $5,000 retainer from
the Debtors pre-bankruptcy.
About Beachwalk
Michigan City, Indiana-based Beachwalk Limited Partnership, a
Partnership, filed a bare-bones Chapter 11 petition (Bankr. N.D.
Ind. Case No. 12-32547) on July 18, 2012. The Debtor estimated
assets of $10 million to $50 million and debts of $1 million to
$10 million.
Related entities Moss Family LP and Beachwalk Limited Partnership
filed Chapter 11 petitions (Case Nos. 12-32540 and 12-32541) on
July 17.
Judge Harry C. Dees, Jr. presides over the case. The petition was
signed by Tom Moss, authorized agent.
BETSEY JOHNSON: Files Suit Against H&S Fashion Over Fabric Sales
----------------------------------------------------------------
Max Stendahl at Bankruptcy Law360 reports that Betsey Johnson LLC
on Monday launched a suit in New York federal court claiming a
Manhattan fabric company improperly sold $300,000 worth of its
material to third parties and refused to turn over the proceeds.
According to Bankruptcy Law360, Betsey Johnson said in an
adversary complaint that H&S Fashion had recently sold the fabric
-- some of which bore Betsey Johnson labels -- in violation of a
court-ordered automatic stay.
About Betsey Johnson
New York-based women's fashion retailer Betsey Johnson LLC filed a
Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 12-11732)
on April 26, 2012, to effectuate a sale of its assets.
Formed as B.J. Vines by its namesake, iconic fashion designer
Betsey Johnson in 1978, the Debtor sells clothing, footwear,
handbags and a signature fragrance through 63 Betsey Johnson
retail stores and outlets in the U.S. The Company, which has 400
employees, also sells its products in department and specialty
stores worldwide, including Macy's and Lord & Taylor, and online
at http://www.betseyjohnson.com/ Non-debtor subsidiaries operate
five stores in Canada and one store in England.
In 2010, Steven Madden Ltd. a footwear designer and marketer,
swapped US$27.4 million of secured debt for ownership of Betsey
Johnson's trademarks and intellectual property. The deal
satisfied all outstanding debt under a US$50 million term loan
used to finance the business' acquisition by Castanea Partners.
At the same time, Castanea, the company's majority owner, made a
new capital investment of US$3 million as part of the deal with
Madden.
Betsey Johnson estimated assets and debts of US$10 million to
US$50 million as of the Chapter 11 filing.
Judge James Peck oversees the case. The Debtor tapped the law
firm of Goulston & Storrs, as counsel; Togut, Segal & Segal, LLP,
as co-counsel; and Donlin Recano & Company as claims and notice
agent. The petition was signed by Jonathan Friedman, chief
financial officer.
Hahn & Hessen LLP serves as the Official Committee of Unsecured
Creditors' counsel.
In May 2012, Betsey Johnson received court approval to begin
liquidation after the Debtor failed to attract going concern
bidders. Liquidators Gordon Brothers Group Inc. and Hilco
Merchant Resources LLC offered the top bid for the right to run
the chain's going-out-of-business sales. The bid will bring the
Debtor about $5.2 million immediately, and more money could
trickle in to pay off its debts if the liquidation effort brings
in more money than expected.
Hilco is represented by Chris L. Dickerson, Esq., at DLA Piper
LLP (US). Counsel for Steven Madden, Ltd., is Neil Herman, Esq.,
at Morgan, Lewis & Bockius LLP. Counsel for First Niagara
Commercial Finance, Inc., the DIP Lender, is James C. Fox, Esq.,
at Ruberto, Israel & Weiner.
BUFFETS INC: Chapter 11 Reorganization Plan Declared Effective
--------------------------------------------------------------
Buffets Restaurants Holdings, Inc., et al., notified the U.S.
Bankruptcy Court for the District of Delaware that the Effective
date of Plan of Reorganization occurred on July 18, 2012.
The Debtors had emerged from Chapter 11 bankruptcy after shedding
$255 million in debt and $35 million in annual interest payments.
The bankruptcy judge signed on June 27 confirming a Chapter 11
reorganization plan for Buffets Inc. All voting classes were in
favor of the plan.
In April 2012 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 6% to 9% of their claims. Previously, unsecured creditors
were to receive nothing. The plan will also create a trust for
unsecured creditors that will pursue lawsuits. First-lien lenders
are receiving the new stock in return for $251.8 million owing on
the existing first-lien facility and $34.8 million in outstanding
letters of credit.
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.
CAREFREE WILLOWS: Contribution Raised; Plan Hearing on Aug. 13
--------------------------------------------------------------
The hearing to consider approval of the amended Chapter 11 plan
and explanatory disclosure statement for Carefree Willows LLC has
been continued to Aug. 13, 2012 at 9:30 a.m. The plan has been
amended a number of times and the hearings have been continued a
number of times, according to the case docket.
According to the latest amendment of the Plan filed in May, the
Plan contemplates the contribution of $9 million for its
implementation, with the funds to be contributed by Templeton
Investment Corp.
The prior version provided for a contribution of $7,132,177 from a
combination of:
* Kenneth L. Templeton,
* Carefree Holdings, LP,
* MLPGP, LLC, and
* the Templeton Family Trust Dated October 8, 1992, and
* the Ken II Trust Dated May 4, 1998.
Pursuant to the Plan, the Debtor will distribute all amounts
necessary to effectuate the Plan, and estimates these
disbursements will be made:
1. Payment of all Allowed Administrative Claims of the
Debtor, estimated at $250,000. This amount will be paid
directly by the contributing entities to administrative
claimants.
2. Payment of $250,000 to Willows Account, LLC, on account of
the claim identified as PSACP Investments.
3. The sub of $10,000 will be applied to the payment of
all allowed unsecured creditors electing the first
alternative.
4. The sum of $2,702,177 will be applied to the payment of
all allowed AG/ICC Willows Loan Owner L.L.C.'s deficiency
claims.
5. The balance of the contributed funds, estimated at
$5,787,823, will be applied to AG's secured claim.
AG will have an allowed secured claim of $30 million. The claim
will be paid down by the remaining contribution estimated at
$5,787,823, which balance shall be defined as the "AG Amortized
Secured Balance." The AG Amortized Secured Balance shall bear
interest at the rate of 3.75% per annum from and after the
Effective Date, or, in the event of objection by AG, such other
rate as the Court shall determine is appropriate at the
Confirmation Hearing after considering the evidence. On or before
the 15th day of each and every month, commencing on the 15th day
of the next month following the Effective Date, the Debtor will
make a monthly payment to AG based upon a 30-year amortization of
the AG Amortized Secured Balance at the AG Interest Rate. The
balance owed on the AG Amortized Secured Balance, together with
any and all accrued interest, fees and costs due thereunder, will
be paid on or before 39 months following the Effective Date.
According to the Fourth Amended Disclosure Statement, holders of
allowed unsecured claims may elect one of two alternatives:
(1) be paid 95% of their Allowed Claims, without interest, on
the Effective Date.
(2) be paid 5.37% of their allowed claim on the Effective
Date, and will receive 50% of the net proceeds above the
amount of $35,000,000 derived from any sale or refinance
of the Property under the terms of the Plan up to a
maximum amount of 14% of the Allowed Claim of the
creditor.
Holders of membership interests will retain their interests in the
reorganized Debtor.
Solicitation of votes will be required from AG and unsecured
creditors.
A copy of the First Amendment to the Fourth Amended Plan of
Reorganization dated May 26, 2012, is available for free
http://bankrupt.com/misc/Carefree_Willows_Plan_052612.pdf
About Carefree Willows LLC
Carefree Willows LLC is the owner of a 300-unit senior housing
complex, located 3250 S. Town Center Drive, in Las Vegas,
Nevada. Carefree Willows filed a Chapter 11 petition (Bankr. D.
Nev. Case No. 10-29932) on Oct. 22, 2010. The Law Offices of Alan
R. Smith, in Reno, Nevada, serves as counsel to the Debtor. The
Debtor disclosed $30,604,014 in assets and $36,531,244 in
liabilities as of the Chapter 11 filing.
CDC CORP: Ver Ploeg & Lumpkin OK'd to Handle Insurance Coverage
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
authorized CDC Corporation to employ Ver Ploeg & Lumpkin, P.A., as
special counsel for insurance coverage and litigation matters.
As reported in the Troubled Company Reporter on July 20, 2012, an
action was filed in the Supreme Court of the State of New York,
New York County, styled: Evolution Capital Management, LLC,
Evolution CDC SPV Ltd., Global Opportunities Fund Ltd., SPV,
Segregated Portfolio M, Evo China Fund and El Fund Ltd.,
Plaintiffs, against CDC Software Corporation, Wong Chung Kiu, Yip
Hak Yung, Asia Pacific Online Limited, Ch'ien Kuo Fung, Francis
Kwok-Yu Au, Donald L. Novajosky, Monish Bahl, Thomas M. Britt III,
Wong Kwong Chi, and Wang Cheung Yue, Defendants.
The New York Action is brought against former employees, officers,
or directors, of the Debtor, well as CDC Software Corporation and
Asia Pacific Online, Ltd.
Each of the defendants named in the New York Action has asserted,
or may have the right to assert, a claim against the Debtor for
indemnification of any loss arising out of the New York Action.
Ver Ploeg will, among other things:
a. review and analyze of the policies and insurance-related
documents;
b. advise and assist the Debtor with regard to available
insurance coverage under the policies; and
c. advise the Debtor as to the appropriate steps necessary to
assert claims against the insurers under the Policies.
The Debtor has agreed to pay Ver Ploeg's at its standard hourly
rates. No compensation will be paid by the Debtor to said law
firm except upon application to and approval by the Bankruptcy
Court after notice and hearing as required by law.
To the best of the Debtor's knowledge, the Ver Ploeg & Lumpkin
firm represents no interest adverse to Debtor's estate.
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.
CHURCH STREET: Taps Robert J. Welhoelter as Co-Bankruptcy Counsel
-----------------------------------------------------------------
Church Street Health Management, LLC, now known as, CS DIP, LLC,
et al., ask the U.S. Bankruptcy Court for the Middle District of
Tennessee for permission to employ Robert J. Welhoelter as co-
bankruptcy counsel to the Debtors.
Mr. Welhoelter serves as the Debtors' co-bankruptcy counsel
effective as of the Petition Date. Early on in the Chapter 11
cases, the Debtors' primary bankruptcy counsel, Waller Lansden
Dortch & Davis LLP, included Mr. Welhoelter in its retention
application and disclosures.
Recently, the U.S. Trustee requested that Mr. Welhoelter be
separately retained as co-counsel with the retention to be
effective as of the Petition Date.
Mr. Welhoelter will, among other things:
a. advise the Debtors regarding the requirements of the
Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy
Rules, and the requirements of the U.S. Trustee pertaining
to the administration of the Debtors' estates;
b. advise and represent the Debtors concerning the rights and
remedies of their estates in regards to the assets of the
estates; and
c. prepare motions, applications, answers, orders, memoranda,
reports, and other documents in connection with the
administration of the Debtors' estates.
To the best of the Debtors' knowledge, Mr. Welhoelter does not
hold nor represent any interest adverse to the Debtors' estates.
Mr. Welhoelter disclosed that it has not received any retainer
payments from the Debtors during his employment. As of the
Petition Date, Mr. Welhoelter was not a creditor of the Debtors'
estates, having been paid in full through retainer funds held by
Waller Lansden Dortch & Davis, LLP, the Debtors' counsel.
A hearing is scheduled for Aug. 21, 2012, at 9 a.m., prevailing
Central Time. Objections, if any, are due Aug. 3, at 5 p.m.
About Church Street
Church Street Health Management, LLC, a provider of management
services for 67 dental practices in 22 states, filed a Chapter 11
petition (Bankr. M.D. Tenn. Case No. 12-01573) in Nashville,
Tennessee on Feb. 20, 2012.
The following day, four affiliates, Small Smiles Holding Company,
LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC, filed
their Chapter 11 petitions (Case Nos. 12-01574 to 12-01577).
As of the Petition Date, the Debtors' assets have book value of
$895 million, with debt totaling $303 million. There is about
$131.5 million owing on first-lien obligations, plus $25.6 million
on a second-lien obligation. There is an additional $152 million
on three subordinated debts. The company's finances are
structured to comply with Islamic Shariah financing regulations.
In the Chapter 11 cases, the Debtors have engaged Waller Lansden
Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal
Healthcare Industry Group, LLC, as financial and restructuring
advisor. Martin McGahan, a managing director at A&M, will serve
as chief restructuring officer of Church Street. Morgan Joseph
TriArtisan, LLC, is the investment banker. Garden City Group is
the claims and notice agent.
Garrison Investment Group is providing funding for the Chapter 11
case. The credit agreement will provide the Debtor with up to an
aggregate principal amount of $12 million in a revolving credit
facility.
Church Street Health Management LLC changed its name as a result
of the sale of the business to existing first-lien lenders in
exchange for $25 million in debt. The new name for the company in
Chapter 11 is CS DIP LLC.
CHART INDUSTRIES: Moody's Reviews 'Ba3' CFR/PDR for Upgrade
-----------------------------------------------------------
Moody's Investors Service placed Chart Industries, Inc.'s
Corporate Family Rating (CFR) and Probability of Default Rating
(PDR) of Ba3, and the Ba1 credit facilities ratings under review
for possible upgrade following Chart's announcement that it has
signed a definitive agreement to acquire AirSep Corporation for
$170 million in cash and approximately $10 million in assumed
debt. The transaction is expected to close in the third quarter of
2012 and is subject to the receipt of regulatory approvals.
Moody's expects to conclude the review following the completion of
the acquisition.
The review for upgrade will focus on the acquisition's expected
synergies, integration risks and impact on earnings and cash
flows. In addition, Moody's will evaluate whether Chart's
financial policies and leverage targets are likely to remain
consistent with a higher rating given the cyclical nature of its
operations and its willingness to execute large acquisitions,
considering that the AirSep acquisition is expected to consume a
large portion of the company's existing cash balances.
The SGL-1 speculative grade liquidity rating remains unchanged
because, despite the expected reduction in the company's internal
liquidity in conjunction with the AirSep acquisition, Moody's
anticipates that Chart will maintain meaningful cash balances in
foreign subsidiaries, generate free cash flow and maintain
substantial access to its $300 million revolving credit facility
over the next twelve months.
Chart Industries, Inc.'s current ratings are:
Corporate Family Rating, Ba3 on review for upgrade
Probability of Default Rating, Ba3 on review for upgrade
$300 million senior secured revolving credit facility due 2017,
Ba1 (LGD2, 18%) on review for upgrade; and
$75 million senior secured term loan due 2017, Ba1 (LGD2, 18%)
on review for upgrade.
Outlook: Under review for upgrade
Ratings Rationale
The Ba3 corporate family rating reflects the company's improving
credit metrics and the expectation for continued strong financial
performance. Chart should continue to benefit from solid demand
for liquefied natural gas processing, transport and storage.
Moody's anticipates that Chart will report credit metrics that are
stronger for the Ba3 rating category, on a proforma basis,
following the acquisition. The Ba3 CFR is constrained by the
cyclicality of the business as evidenced by the significant
decline in revenues and operating margins during the 2009-2010
downturn and Moody's expectation that Chart's European operations
will underperform its core U.S. operations. The ratings benefit
from the company's broad geographic reach and recent growth in its
backlog.
The principal methodology used in rating Chart Industries, 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.
Chart Industries, Inc. is a global manufacturer of products used
for low temperature and cryogenic systems. Chart's products are
used in energy, industrial, commercial and biomedical
applications. It operates in three business segments: Distribution
and Storage ("D&S") (approximately 49% of 2011 revenues); Energy
and Chemicals ("E&C") (26%); and Biomedical (25%). Revenues for
the trailing twelve months ended March 31, 2012 totaled roughly
$848 million.
Airsep is a manufacturer of pressure swing absorption and vacuum
pressure swing oxygen concentrators and generators for medical and
industrial applications. Revenues are expected to be roughly $130
million.
CIRCUS AND ELDORADO: Responds to Noteholder Objection
-----------------------------------------------------
Stephanie Gleason at Dow Jones' DBR Small Cap reports that Circus
and Eldorado Joint Venture responded to an objection from New York
Bank of Mellon Trust Co., which is representing noteholders in the
venture's bankruptcy case, saying the objections ignore several
issues.
The New York Bank of Mellon said the information the company is
providing to creditors and lenders about its restructuring plan is
"woefully inadequate."
A hearing on the disclosure statement explaining the Chapter 11
plan is set for July 23, 2012, at 2 p.m. As reported in the July
12, edition of the TCR, according to the Disclosure Statement, the
terms of the Plan include, among other things:
Class Claims/Interest Treatment
----- --------------- ---------
1 Other Secured Claims Paid in full in Cash or
otherwise left Unimpaired
2 Other Priority Claims Paid in full in Cash or
otherwise left Unimpaired
3 Mortgage Note Claims If Class 3 Acceptance
occurs, each holder will
receive its respective Pro
Rata share of (i) the Class 3
Consensual Cash Distribution
and (ii) the New Second Lien
Notes.
If Class 3 Acceptance does
not occur, each holder will
receive its pro rata share of
(i) the Class 3 Cram-Down Cash
Distribution and (ii) the
Cram-Down Notes.
4 US Foods Secured Claims Paid in full in Cash, but no
payment of accrued interest on
the Allowed US Foods Secured
Claim
5 General Unsecured Claims Paid in full in Cash in four
equal quarterly installments,
the last of which will occur no
later than one year after the
Effective Date, with interest
accruing at a rate of 5% per
annum from the Petition Date
through the date that the
Allowed General Unsecured Claim
is paid in full, provided that,
in the event that any
distribution to be made to
a Holder of an Allowed
General Unsecured Claim
(on account of the principal
amount of such Allowed General
Unsecured Claims) in the
aggregate totals less than
$15,000, the Debtors, the
Reorganized Debtors, and
the Disbursing Agent, as
applicable, will make
any distribution in a
single lump sum on the
Effective Date, without
interest.
6 Equity Interests Rights remain unaltered by
the Plan.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/CIRCUS_ds_1amended.pdf
About Circus and Eldorado
Circus and Eldorado Joint Venture and Silver Legacy Capital Corp.
filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 12-51156
and 12-51157) on May 17, 2012.
Circus and Eldorado Joint Venture owns and operates the Silver
Legacy Resort Casino, a 19th century silver mining themed hotel,
casino and entertainment complex located in downtown Reno, Nevada.
The casino and entertainment areas at Silver Legacy are connected
by skyway corridors to the neighboring Eldorado Hotel & Casino and
the Circus Circus Hotel and Casino, each of which are owned by
affiliates of the Debtors. Together, the three properties
comprise the heart of the Reno market's prime gaming area and room
base.
Silver Legacy Capital is a wholly owned subsidiary of the Joint
Venture and was created and exists for the sole purpose of serving
as a co-issuer of the mortgage notes due 2012. SLCC has no
operations, assets or revenues.
Eldorado Hotel & Casino and Circus Circus Hotel and Casino are not
debtors in the Chapter 11 cases.
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 $142.8 million principal amount of
Notes were outstanding and accrued interest of $7.23 million on
the Notes, as of March 1, 2012, is due and payable.
The Debtors have entered into a Restructuring Support Agreement
with Capital Research and Management Company, a holder of a
substantial portion of the mortgage notes. A copy of the RSA
dated March 15, 2012, is available for free at http://is.gd/diDPh3
The RSA contemplates a proposed plan will be filed no later than
June 1, 2012. The plan will contain creditor treatments that
have already been negotiated with and agreed to by creditor
constituents. The Debtors will seek approval of the explanatory
disclosure statement within 45 days after the Petition Date and
obtain confirmation of the Plan 60 days later.
Judge Bruce T. Beesley presides over the case. Paul S. Aronzon,
Esq., and Thomas P. Kreller, Esq., at Milbank, Tweed, Hadley &
McCloy LLP; and Sallie B. Armstrong, Esq., at Downey Brand LLP,
serve as the Debtors' counsel. The Debtors' financial advisor is
FTI Consulting Inc. The claims agent is Kurtzman Carson
Consultants LLC.
The Bank of New York Mellon Trust Company, N.A., the trustee for
the Debtors' 10-1/8% Mortgage Notes due 2012, is represented by
Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at Pillsbury
Winthrop Shaw Pittman LLP.
Circus and Eldorado Joint Venture disclosed $264,649,800 in assets
and $158,753,490 in liabilities as of the Chapter 11 filing.
The petitions were signed by Stephanie D. Lepori, chief financial
officer.
The Plan dated June 1, 2012, pays much of its debt in cash and the
balance with new secured liens.
August B. Landis, Acting U.S. Trustee for Region 17, appointed
three creditors to serve in the Official Committee of Unsecured
Creditors in the Debtors' Chapter 11 cases. Stutman, Treister &
Glatt Professional Corporation represents the Committee.
COMMUNITY HOME FIN'L: Has Interim Access to Cash Collateral
-----------------------------------------------------------
Judge Edward Ellington has authorized Community Home Financial
Services, Inc., to access the cash collateral of Edwards Family
Partnership LP (EFP) and Beher Holdings Trust (BHT), on an interim
basis, subject to several terms and conditions.
On the 10th day of each month, beginning on July 10, 2012, the
Debtor will make monthly adequate protection payments to EFPIBHT
on the Home Improvement Loan Transaction. The amount of the
monthly payment will be equal to all principal payments collected
on any loans for the previous month plus interest calculated at
the rate of 7% per annum on the principal balance as of the first
day of the month ($18,300,000 as of June 1, 2012). Any principal
payments will reduce the principal balance of the EFP/BHT Loan
Transaction. The payment of 7% interest will be without prejudice
to EFPIBHT's rights to seek additional payment of interest at the
rate provided for the EFP and BHT notes. The first payment will
include all principal payments received by the Debtor on any loans
in the Home Improvement Loan Transaction since the date of the
petition.
Edwards Family Partnership LP (EFP) and Beher Holdings Trust
(BHT), secured creditors of Community Home Financial Services,
earlier asked the Bankruptcy Court to prohibit the use of cash
collateral, and require the Debtor to segregate funds related to
the various joint ventures by and among EFP, BHT and the Debtor.
EFP and BHT also asked the Court to prohibit the Debtor from using
any funds related to the joint ventures and requiring payment to
the funds collected to EFP and BHT.
About Community Home Financial Services
Community Home Financial Services, Inc., filed a Chapter 11
petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012.
Community Home Financial is a specialty finance company located in
Jackson, Mississippi, providing contractors with financing for
their customers. CHFS operates from one central location
providing financing through its dealer network throughout 25
states, Alabama, Delaware, and Tennessee. The Debtor estimated
assets and debts of $10 million to $50 million. Judge Edward
Ellington presides over the case.
CONSTRUCTION SUPERVISION: HD Supply Suit Remanded to State Court
----------------------------------------------------------------
Bankruptcy Judge Randy D. Doub granted the plaintiff's request to
remand the lawsuit, H.D. Supply Waterworks, Ltd., Plaintiff, v.
Robert Spivey; Construction Supervision Services, Inc.; FSC II,
LLC d/b/a/ Fred Smith Company; GS BrightLeaf Subsidiary, LLC;
Greystar Development and Construction, L.P.; Fred Smith Company,
Defendants, Adv. Proc. No. 12-00111 (Bankr. E.D.N.C.). In
essence, the action is about whether the Plaintiff can enforce a
lien on funds or a subgrogated lien on real estate against the
non-debtor owner of the project. The Court said the matter is
best left to the state court. The Court modified the automatic
stay to the extent to allow any claims against the Debtor to be
determined by the General Court of Justice, Superior Court
Division, Durham County.
Pursuant to a credit agreement, the Plaintiff supplied water and
sewer construction materials to the Debtor for use on a
construction project known as the BrightLeaf Project located in
Durham County, North Carolina. Pursuant to the same credit
agreement, Robert Spivey executed a personal guaranty for all
amounts owed from the Debtor to the Plaintiff. The Debtor was a
subcontractor on the Brightleaf Project and contracted with FSC
II, LLC d/b/a Fred Smith Company or Fred Smith Company to perform
a portion of the work. Fred Smith had contracted with Greystar,
who was either the general contractor or developer/agent for the
owner of the real property that was improved by the project,
BrightLeaf. The Debtor failed to timely pay the outstanding
balance owed to the Plaintiff for the construction materials
supplied to the Debtor for the Brightleaf Project.
On Dec. 19, 2011, the Plaintiff served a Claim of Lien on Real
Property and Notice of Claim of Lien on Funds on the Debtor, Fred
Smith, Greystar and Brightleaf for the outstanding balance owed to
the Plaintiff on the project. The liens were filed with the Clerk
of Superior Court of Durham County, North Carolina. On the same
day, the Plaintiff commenced a civil action in Durham County
Superior Court, alleging breach of contract against the Debtor and
Mr. Spivey, in relation to the credit agreement and guaranty and
against Fred Smith, Greystar, and Brightleaf to foreclose on the
lien. Additionally, the Plaintiff asserted a claim against each
of the defendants under the theory of quantum meruit.
A copy of the Court's July 20, 2012 Order is available at
http://is.gd/Bfha10from Leagle.com.
Based in Garner, North Carolina, Construction Supervision
Services, Inc., filed a Chapter 11 petition (Bankr. E.D.N.C. Case
No. 12-00569) on Jan. 24, 2012. Judge Randy D. Doub presides over
the case. William P. Janvier, Esq., at Janvier Law Firm, PLLC,
serves as the Debtor's counsel. The Debtor scheduled assets of
$8,203,552 and liabilities of $8,976,014. The petition was signed
by Jeremy Spivey, president.
CONVERGYS CORP: S&P Affirms 'BB+' Corp. Credit Rating; Off Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on Cincinnati-based Convergys Corp. "At the same
time, we removed the ratings from CreditWatch, where they were
placed with negative implications on March 26, 2012 due to the
announced sale of the company's information management (IM)
business, which reduced its business diversity. The rating outlook
is stable," S&P said.
"In addition, we affirmed our 'BB-' issue-level rating on the
5.75% junior subordinated convertible debt due 2029. The recovery
rating on the convertible debt remains unchanged at '6',
indicating expectations for negligible (0%-10%) recovery in the
event of a payment default," S&P said.
"This action follows our assessment of the company's credit
profile, pro forma for the sale of the IM business to NEC Corp.,
which closed on May 16, 2012," S&P said.
"We believe that the business risk profile is modestly worse due
to reduced business diversity and concomitant increased reliance
on the more economically sensitive call-center business,"
explained Standard & Poor's credit analyst Michael Altberg. "This
is tempered by our reassessment of the financial risk profile to
'modest' from 'intermediate.' Convergys maintains financial
measures (pro forma leverage at 1.3x and funds from operations
[FFO] to debt of over 90%) supportive of a modest financial risk
profile."
"The ratings on Convergys reflect what Standard & Poor's considers
a 'weak' business risk profile, incorporating revenue pressure
from economic sensitive call volume in its Customer Management
(CM) business and high customer and sector concentrations. Despite
these risks, we expect improving performance into 2013, following
four consecutive quarters of revenue growth (7.9% for the first
quarter of 2012), and operating margin improvement to 7.9% for the
first quarter. Additional offsetting factors include modest
leverage for the rating, leading to our modest financial risk
profile assessment and 'strong' liquidity," S&P said.
"The stable rating outlook reflects our expectations that leverage
will not exceed 2x on a sustained basis. We could lower the rating
if the company institutes a more aggressive financial policy,
resulting in a substantial increase in debt and leverage rising to
over 2x on a sustained basis, or if its operating performance
weakens significantly, which would warrant a reassessment of the
business risk profile. We also consider a downgrade unlikely over
the next year," S&P said.
"Conversely, given our assessment of the call-center business as
weak, it is highly unlikely that we could raise the rating over
the next few years, unless there is a transformative acquisition
outside the call-center business that we view as having a
significantly better business risk profile," S&P said.
CORROZI-FOUNTAINVIEW: Trustee Wants Case Converted or Dismissed
---------------------------------------------------------------
Roberta A. DeAngelis, United States Trustee for Region 3, asks the
Bankruptcy Court for entry of an order converting Chapter 11 case
to Chapter 7, or alternatively, dismissing Chapter 11 case.
Since the case was commenced on March 31, 2010, no plan or
disclosure statement has ever been filed. Based on the Monthly
Operating Reports on file, the Debtor owes $6,502.80 in unpaid
quarterly fees, not including any fees that may be assessable for
the second calendar quarter of 2012.
David L. Buchbinder, Esq., representing the U.S. Trustee, relates
that this is one of five related cases. The other four cases have
all been either dismissed or converted to cases under Chapter 7 of
the Bankruptcy Code. In the related converted case of Doveview,
LLC, the Chapter 7 trustee recently initiated an Adversary
Complaint against the present Debtor.
According to Mr. Buchbinder, the Debtors' primary asset is an
unfinished condominium and townhouse project known as Village of
Fountainview on Fountainview Drive in Newark, Del. The
condominium project has been substantially completed but few units
have sold. Relief from the automatic stay was granted in favor of
Artisan Bank earlier in this case with respect to the townhouse
portion of the project.
Mr. Buchbinder believes that ample cause exists for conversion or
dismissal because there does not appear to be any likelihood of
rehabilitation of this debtor. The case has been pending for more
than two years and the Debtor has not proposed a plan. The
monthly operating reports on file disclose continuing losses by
the estate. The Debtor has also failed to pay quarterly fees due
and currently owes $6,502.80 in unpaid quarterly fees through
March 31, 2012.
In response to the motion, Joseph Grey, Esq., at Cross & Simon
LLC, representing the Debtor, states that, while the Debtor
regrets that a plan has not yet been proposed in this case yet,
this does not provide grounds for conversion or dismissal. The
Debtor also notes that the construction of Building 2 represents
significant progress towards rehabilitation.
Mr. Grey acknowledges that it is also true that the Debtor is
currently incurring operating losses. But this was disclosed and
expected over a year ago when the Debtor proposed a DIP facility.
The Debtor has to complete Building 2 before it can be expected to
sell a substantial number of Units. There are relatively few
unsold Units left in the other two buildings. Once
construction is completed, the Debtor's monthly expenses should
decrease dramatically, and it is hoped that Unit sales will
generate significant income. Furthermore, the risk that the
Debtor will be unable to pay its administrative expenses is being
born primarily by PNC pursuant to the DIP Order. PNC has not
proposed to dismiss or convert this case. Accordingly, this
factor does not present cause sufficient to warrant conversion or
dismissal either.
Mr. Grey notes that the fact that the Debtor paid the latest
quarterly payment of United States Trustee's fees late is
certainly something to be avoided in the future, but it does not
provide cause for dismissal or conversion of the case. The Debtor
would ask the Court to consider all the fees which the Debtor has
paid so far in the two-plus years this case has been pending. In
addition, there was never a risk that the fees would not be paid.
There was only a regrettable but short delay in payment.
The Debtor believes that conversion or dismissal at this time is
not in the best interests of creditors and other parties.
Dismissal or conversion would constitute a default under the terms
of the DIP Order and the DIP facility. A default would allow PNC
to take possession of the Debtor's assets. Construction of
Building 2 would cease immediately and the workmen and vendors who
are providing goods and services for that project would abruptly
lose a source of income. Other people who stand to profit from
the sales of Units will lose that opportunity. Persons who have
already purchased Units would suffer from yet another substantial
delay in the construction project. And the chance -- limited as
it now appears to be -- that any unsecured creditor will receive a
distribution from this case will shrink to an impossibility.
About Corrozi-Fountainview
Wilmington, Delaware-based Corrozi-Fountainview, LLC, a single
asset real estate, filed for Chapter 11 protection (Bankr. D. Del.
Case No. 10-11090) on March 31, 2010. Cross & Simon LLC
represents the Debtor as its as counsel. In its schedules, the
Debtor disclosed total assets of $15,962,545 and total liabilities
of $15,279,958 as of the Chapter 11 filing.
CRESCENT HOLDINGS: S&P Assigns 'B' Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Crescent Holdings LLC (Crescent) and its
subsidiaries Crescent Resources LLC and Crescent Ventures Inc. "We
also assigned a 'B+' issue rating and a '2' recovery rating to the
proposed $325 million senior secured notes to be issued by
Crescent Resources LLC and guaranteed by Crescent. Our '2'
recovery rating indicates our expectation for a substantial (70%-
90%) recovery in the event of default," S&P said.
"Our rating on Crescent reflects a 'weak' business risk profile,
which is based on our view of the company's transaction-dependent
business, whereby a significant portion of revenues is tied to the
speculative development of residential/multifamily projects," said
credit analyst George Skoufis. "We acknowledge the current
juncture in the housing cycle may support development and
monetization of assets over the next one-two years, but Crescent's
business is very cyclical and seasonal, and timing of sales can be
unpredictable. We view the company's financial risk profile as
'highly leveraged,' owing to weak EBITDA-based metrics; although,
we believe liquidity will be adequate to meet capital needs over
the near term."
"The stable outlook reflects our view that the company has
sufficient liquidity to funds its current capital needs.
Additionally, fundamentals in the residential industry are coming
off the bottom, and we expect multifamily fundamentals to remain
favorable over the next one-two years. We do not expect to raise
Crescent's rating over the next year due to our expectation the
company will remain highly leveraged. Longer term, we would
consider an upgrade if the company can execute on its plan to
monetize existing assets, profitably reinvest in new projects,
including its growing multifamily platform, and successfully
manage its capital expenditures. We would lower our rating on
Crescent if liquidity becomes constrained due to weaker-than-
expected asset sales and/or aggressive capital spending," S&P
said.
CRESCENT RESOURCES: Moody's Rates $325MM Sr. Secured Notes 'Caa2'
-----------------------------------------------------------------
Moody's Investors Service assigned a first-time rating of Caa2 to
the seven-year, $325 million senior secured notes of Crescent
Resources, LLC, proceeds of which will be used to retire the
company's existing first and second lien term loans. As part of
the same rating action, Moody's assigned Caa2 corporate family
("CFR") and probability of default ratings. The rating outlook is
stable.
Ratings Rationale
The homebuilding industry, and even more so the land development
industry (which encompasses Crescent), is volatile, highly
cyclical, and requires substantial capital to support expansion in
either a steady state or growth environment or to permit survival
in a prolonged and extensive downturn such as Moody's has been
experiencing. Uncertainties continue to abound in the potential
recovery of homebuilding and land development, from the stubbornly
high level of unemployment to the risk of a double-dip economic
downturn to the large shadow inventory of foreclosed homes
weighing down home prices. While a case for a modestly improved
2012 can certainly be made, the macro drivers for a recovery
remain somewhat elusive as well, and major risks can still either
delay the recovery for another year, until 2013, or even cause
homebuilding and land development to turn down again (as a result
of a double-dip economic scenario).
The Caa2 CFR reflects Crescent's small size in an industry that is
extremely volatile and cyclical, negative GAAP interest coverage
and GAAP cash flow generation, debt leverage (as measured by
Moody's-adjusted debt/capitalization) that the rating agency
expects to rise, the fact that none of the cash generated by land
and property sales is likely to be devoted to debt repayment, and
underpinning all of this, the shaky homebuilding, land development
and macroeconomic environment.
At the same time, Moody's recognizes that Crescent has emerged
from bankruptcy with what should be a manageable debt load with no
mandatory principal repayments for seven years, an adequate
liquidity profile supported by cash on the balance sheet and the
new revolving credit facility, a long land position (including a
low cost basis legacy land base) that could permit the company to
harvest cash flow if it limits its property and project
investments, healthy gross margins, and markets that should
participate in any meaningful homebuilding recovery. In addition,
the $100 million equity subscription agreement with Crescent's
sponsors ($50 million current, $50 million in the future) will
help the company complete projects currently in development and
invest in new ones.
The stable outlook reflects the apparent stabilization of the
housing market and the company's opportunity to capitalize on
inventory liquidation for several years to generate cash.
The following ratings were assigned:
Caa2 rating (LGD4-59%) on the $325 million of secured notes
due 2019
Caa2 corporate family rating
Caa2 probability of default Rating
The secured notes were rated the same as the company's corporate
family rating because they constitute the preponderance of debt
within a capital structure that also includes a $50 million first
lien senior secured revolving credit facility (unrated by
Moody's). The secured notes have a second lien on the same assets
as the revolver.
Crescent would need to begin generating steady revenue growth,
greater than 1x EBIT coverage of interest, and more than modestly
positive GAAP cash flow, while maintaining Moody's-adjusted debt
leverage below 60% on a sustained basis and improving its
liquidity position to be considered for a Caa1 CFR.
The need for covenant relief, continued negative GAAP interest
coverage and GAAP cash flow generation, Moody's-adjusted debt
leverage above 70%, and/or reduced liquidity could prompt a rating
reduction.
The principal methodology used in rating Crescent was the Global
Homebuilding Industry Methodology published in March 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Crescent Resources, LLC, founded in 1969 and headquartered in
Charlotte, North Carolina, develops residential, commercial and
multifamily real estate properties, and manages land. The company
has a presence in North Carolina, South Carolina, Georgia,
Florida, Texas and Arizona. In the trailing 12-month period ending
March 31, 2012, Crescent's revenues and net loss were $69 million
and $65 million, respectively. In 2011, revenues from continuing
operations were $107 million.
DALLAS ROADSTER: Wants to Employ Dohmeyer as Valuation Expert
-------------------------------------------------------------
IEDA Enterprise, Inc., and Dallas Roadster, Limited, ask the
Bankruptcy Court for authority to employ Dohmeyer Valuation Corp.
(DVC) as Business Valuation Expert.
The Debtors own four separate parcels of real property, which
serves as collateral for Texas Community Bank. The Debtors
currently lease out two of the four lots and one of the lots is
vacant. From the remaining lot the Debtors operate a used car
dealership. It is critical to the Debtors' plan of reorganization
that the Real Property and business enterprise be valued.
The Debtors have selected DVC based upon his expertise valuing
business enterprises as well as his expertise regarding present
value discount rates. Subject to the control and further Court
order, DVC will be required to render these services to the
Debtor:
A. value the Debtors' business enterprise, including without
limitation the used car dealership and the leasehold lots;
B. perform an insolvency analyses;
C. perform present value and/or discount rate analyses;
D. perform such other valuation tasks deemed necessary by the
Debtors during the course of these bankruptcy cases;
E. provide expert testimony and any necessary reports or
documentation during ay trial or hearing regarding any of
the foregoing.
Robert Dohmeyer will be the primary individual rendering the
valuation services. In consideration of the services, DVC will
charge a flat fee of $2,500 for the valuation of the Debtors'
business enterprise, including the leasehold properties, as well
as a present value/discount rate analyses which amount will be
payable upon completion of those services. The Debtors request
that they be authorized to make such payment without further order
of the Court. For all other services DVC will charge an hourly
rate of $225, which will be sought through appropriate fee
applications filed and subject to further Court approval.
About Dallas Roadster and IEDA Enterprises
Dallas Roadster Ltd. owns and operates an auto dealership with
locations in both Richardson and Plano, Texas. IEDA Enterprises,
Inc., is the general partner of Roadster.
Dallas Roadster and IEDA Enterprises filed for Chapter 11
bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on
Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases.
Michael S. Mitchell, Esq., and Robert T. DeMarco, Esq., at
DeMarco-Mitchell, PLLC, serves as the Debtors' bankruptcy counsel.
Dallas Roadster estimated $10 million to $50 million in assets.
The Debtors' assets were placed under the care of a receiver on
Nov. 16, 2011, pursuant to a state court action by Texas Capital
Bank, National Association.
No trustee has been appointed in the Chapter 11 cases.
DAZ VINEYARDS: To Present Plan for Confirmation Aug. 29
-------------------------------------------------------
Judge Robin Riblet in Santa Barbara, California, will convene a
hearing to consider confirmation of Daz Vineyard LLC's Chapter 11
Plan of Reorganization on Aug. 29 at 11:00 a.m.
According to the June 18 order approving the disclosure statement,
creditors must return ballots with regard to the Plan by Aug. 1.
Plan objections are also due that day.
There's a stipulation between the Debtor and Investor's Warranty
of America, Inc., setting Aug. 31 as the deadline to confirm the
Plan and Sept. 30 deadline for the Plan to be declared effective.
A prior iteration of the stipulation set the deadlines to July 31
and Aug. 15, respectively.
In the Disclosure Statement explaining the Third Amended Chapter
11 Plan dated June 7, 2012, the Debtor said that after it has made
adjustments to its business operations, it believes that it has
attained sufficient profitability to sustain the necessary
payments to fund the Plan through operations alone.
The Debtor also said it has negotiated Plan treatment with most of
its secured creditors.
Secured creditor Investors Warranty, impaired under the Plan, will
be paid in full in accordance with a loan modification agreement
dated Feb. 28, 2011. Silicon Valley Bank will be paid in full
with interest at 7% per annum in quarterly payments of $12,000,
and will receive the remaining balance in March 1, 2015. Other
secured creditors will also receive payments in instalments and
will receive full payment within one year to three years.
Holders of unsecured claims ($515,500 undisputed plus $4.279
million disputed) will share payments totaling $120,00 payable at
$8,000 per quarter commencing 3 months after the effective date
and every three months thereafter. Creditors will receive between
10% and 23% of their unsecured claims, depending on the success of
the claims objection.
Holders of membership interests in the Debtor will retain their
interests.
A copy of the Disclosure Statement dated June 7, 2012, is
available at http://bankrupt.com/misc/DAZ_Vineyards_DS_060712.pdf
About DAZ Vineyards
Los Olivos, California-based DAZ Vineyards, LLC, a producer of
grapes and manufacturer and seller of fine wines doing business as
Demetria Estate Winery, filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Calif. Case No. 10-10689) on Feb. 15, 2010. William
C. Beall, Esq., at Beall and Burkhardt, serves as the Debtor's
bankruptcy counsel. In its schedules, the Debtor disclosed
$32,071,232 in assets and $11,418,337 in liabilities.
DIGITALGLOBE INC: S&P Puts 'BB' Corp. Credit Rating on Watch Neg
----------------------------------------------------------------
Standard & Poor's Rating Services placed its ratings on Longmont,
Colo.-based DigitalGlobe Inc., including the 'BB' corporate credit
rating, on CreditWatch with negative implications.
"The CreditWatch listing reflects the potential for higher
leverage following the acquisition of GeoEye Inc., which the
companies expect to complete by the first quarter of 2013, subject
to regulatory and shareholder approvals. DigitalGlobe plans to
refinance GeoEye's debt in the weeks leading up to the acquisition
closing. It will also likely issue preferred shares to Cerberus,
which would receive 50% debt treatment under our adjustments. Our
base-case scenario also incorporates the elimination of revenues
from GeoEye's National Geospatial-Intelligence Agency (NGA)
service-level agreement (SLA)," S&P said.
"However, we expect DigitalGlobe to continue to benefit from
revenues from its own SLA with the NGA, and from the increased
presence in the commercial imagery processing and analytic
services markets provided by GeoEye," said Standard & Poor's
credit analyst Michael Weinstein. "We also believe management's
targeted cost synergies are largely attainable, although we still
expect leverage and funds from operations to debt to be elevated
for the 'BB' rating in 2013, at above 4x and below 20%. We could
therefore revise our financial risk profile to 'aggressive' from
'significant,' especially if we determine that improvement
prospects could be delayed or impaired by a potential drop in
business from U.S. government agencies, which are likely to
comprise about 50% of total 2013 pro forma revenues."
"Within the next six to eight weeks, we plan to assess the overall
business risk profile of the combined company and the time frame
for it to achieve improvement in credit metrics. At that time, we
will either affirm the ratings and remove them from CreditWatch,
or leave them on CreditWatch, and indicate that we will lower them
at completion of the transaction, which is subject to numerous
regulatory approvals," S&P said.
DREIER LLP: Taps Constellation as Advisor, Witness
--------------------------------------------------
Sheila M. Gowan, the Chapter 11 trustee for Dreier LLP, asks the
U.S. Bankruptcy Court for the Southern District of New York for
permission to retain Constellation Investment Consulting Corp. as
special litigation advisor, and potentially testifying expert
witness, concerning the investment and due diligence performed by
hedge fund participants in the Marc Dreier Ponzi scheme, nunc pro
tunc to June 28, 2012.
The Trustee previously commenced these adversary proceedings
pertinent to the application:
* Gowan v. Amaranth Advisors LLC, et. al, Case No. 10-3493
(SMB);
* Gowan v. The Patriot Group, LLC, et. al, Case No. 10-3524
(SMB); and
* Gowan v. Westford Asset Management LLC, et. al, Case No. 10-
5447 (SMB).
In the adversary proceedings, the trustee alleges that Marc S.
Dreier, DLLP perpetrated a Ponzi scheme involving the sale of
fictitious promissory notes, that each of the defendants named in
the adversary proceedings invested in the Note Fraud, that the
defendants received transfers from DLLP pursuant to the note
fraud, and that those transfers constituted avoidable fraudulent
transfers, well as under applicable sections of the New York
Debtor & Creditor Law.
According to the trustee, Constellation is the best candidate to
advise her in the pursuit to recover over $150 million that was
paid to defendants as a result of their investments in the note
fraud.
Constellation will assist the trustee, among other things, (i) in
reviewing due diligence practices relating to investments, and
other relevant data relating to the Debtor; (ii) in preparing the
trustee's and her counsel to depose defendants' witnesses in which
due diligence issues and the defendants' investment practices will
be addressed; and (iii) in providing an expert report and trial
testimony regarding due diligence and investment practices and the
significance of information available to the defendants at all
relevant times.
The hourly rates of Constellation range from $90 to $625 per hour.
To the best of the trustee's knowledge, Constellation is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Marc Dreier and Dreier LLP
Marc Dreier founded New York-based law firm Dreier LLP --
http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S.
Securities and Exchange Commission filed a suit, alleging that Mr.
Dreier made fraudulent offers and sales of securities in several
cities, selling fake promissory notes to hedge and other private
investment funds. The SEC asserted that Mr. Dreier also
distributed phony financial statements and audit opinions, and
recruited accomplices in connection with that scheme. Mr. Dreier,
currently in prison, was charged by the U.S. government for
conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No.
09-cr-00085).
Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul,
Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel.
The Debtor estimated assets of $100 million to $500 million, and
debts between $10 million and $50 million in its Chapter 11
petition.
Sheila M. Gowan, a partner with Diamond McCarthy, was appointed
Chapter 11 trustee for the Dreier law firm. Ms. Gowan is
represented by Jason Porter, Esq., at Diamond McCarthy LLP.
Wachovia Bank National Association, the Dreier LLP Chapter 11
trustee, and Steven J. Reisman as post-confirmation representative
of the bankruptcy estate of 360networks (USA) Inc. signed a
petition that put Mr. Dreier into bankruptcy under Chapter 7 on
Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier,
60, pleaded guilty to fraud and other charges in May 2009. The
scheme to sell $700 million in fake notes unraveled in late 2008.
Mr. Dreier is serving a 20-year sentence in a federal prison in
Minneapolis.
EASTMAN KODAK: Judge Delays Ruling in Patent Row With Apple
-----------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Allan L. Gropper on Tuesday declined to rule immediately on
Eastman Kodak Co.'s summary judgment bid in a suit over 10 digital
camera patents that Apple Inc. and spinoff FlashPoint Technology
Inc. have laid claim to.
Bankruptcy Law360 relates that Judge Gropper heard arguments from
the three parties and said he'd issue a ruling as soon as possible
in the adversary proceeding, in which Kodak accuses the defendants
of attempting to derail a planned asset sale that it says is vital
to its reorganization.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
Kodak disclosed $5.10 billion in assets and $6.75 billion in
liabilities as of Sept. 30, 2011. The net book value of all
assets located outside the United States as of Dec. 31, 2011 is
$13.5 million.
Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors. FTI Consulting,
Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is
the investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
The Official Committee of Unsecured Creditors has tapped
Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.
Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.
Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.
EDWIN RITTER JONAS: Fails to Stay Case Dismissal
------------------------------------------------
Bankruptcy Judge Ralph B. Kirscher denied the request of Edwin
Ritter Jonas, III, for a stay of the Court ruling dismissing his
Chapter 11 case pending appeal. Mr. Jonas' former spouse, Linda,
filed an objection. Judge Kirscher said the Debtor failed to
prove that he will suffer irreparable harm if his motion for stay
pending appeal is not granted.
Among other things, Mr. Jonas argues that Linda's counsel and a
receiver appointed under a charging order in state court have
taken steps to take control of Mr. Jonas' 50% interest in
Blacktail Mountain Ranch Co. LLC, and he will lose the faith of
his customer base as well as his ability to conduct business if
the receiver takes control, as well as lose his home. Mr. Jonas'
testimony establishes that the LLC's cattle are loose, having
escaped the fence on leased land where he placed them, and are
wandering in the mountains and across highways. Linda seeks to
have the receiver placed into possession of the LLC to protect the
LLC assets. Mr. Jonas has admitted in his testimony that he
failed to keep control of the LLC's cattle. According to the
Court, the LLC's cattle appear to be in more harm under his
control than they would be under a receiver's control.
A copy of the Court's July 23, 2012 Memorandum of Decision is
available at http://is.gd/UJG4FQfrom Leagle.com.
Edwin Ritter Jonas, III, in Rollins, Montana, filed for Chapter 11
bankruptcy (Bankr. D. Mont. Case No. 10-60248) on Feb. 19, 2010.
Edward A. Murphy, Esq. -- murphylawoffices@yahoo.com -- and Murphy
Law Offices, PLLC, serve as the Debtor's counsel. In his
petition, the Debtor estimated $1 million to $10 million in assets
and debts. A full-text copy of the Debtor's petition, including a
list of its 18 largest unsecured creditors, is available for free
at http://bankrupt.com/misc/mtb10-60248.pdf
Linda was represented by Quentin H. Rhoades, Esq. Ronald F.
Waterman, Esq. -- rfw@gsjw.com -- appeared on behalf of several
creditors.
EVERGREEN SOLAR: Plan of Liquidation Declared Effective
----------------------------------------------------------------
Evergreen Solar, Inc., notified the U.S. Bankruptcy Court for the
District of Delaware that the Effective Date of its Plan of
Liquidation, as modified, occurred on July 16, 2012.
As reported in the Troubled Company Reporter on July 18, 2012, the
Court confirmed the Debtor's Plan, which, among other things,
provides for a Plan Administrator to liquidate or otherwise
dispose of the estate's remaining assets.
The Plan Administrator will distribute all net proceeds to
creditors in accordance with the priority scheme under the
Bankruptcy Code, subject to certain exceptions and qualifications,
including the proposed retention by the Liquidating Debtor of
certain property which will be liquidated by the Plan
Administrator to fund the payment of, as necessary, plan expenses
and claims other than those of the 13% Secured Noteholders.
The Plan is consistent with, and implements in part, a settlement
entered by the Bankruptcy Court on March 6, 2012, which order
approved a settlement by and among the Debtor, the Committee,
certain holders of the 13% Secured Notes, and the 13% Secured
Notes Indenture Trustee, that, among other things, provided for
certain assets to be transferred to the 13% Secured Notes
Indenture Trustee, for certain assets to be transferred to an
'Unsecured Creditor Vehicle' (established for the benefit of
general unsecured creditors), and for certain assets to be
retained by the Debtor in order to pay Administrative Claims,
Priority Claims, and Plan Expenses, with any residual value to be
provided to general unsecured creditors.
As a result of the Settlement, the Committee and the Supporting
Secured Noteholders supported the confirmation of the Plan.
The Court also ordered that administrative claims must be filed by
Aug. 16.
About Evergreen Solar
Evergreen Solar, Inc. -- http://www.evergreensolar.com/--
developed, manufactured and marketed String Ribbon solar power
products using its proprietary, low-cost silicon wafer technology.
The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy
(Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge
Mary F. Walrath. The Company's balance sheet at April 2, 2011,
showed $373,972,000 in assets, $455,506,000 in total liabilities,
and a stockholders' deficit of $81,534,000.
Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham
McCutchen LLP, serve as general bankruptcy counsel to the Debtor.
Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski
Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial
LLC serves as exclusive marketing and sales agent. Klehr Harrison
Harvey Branzburg serves as special conflicts counsel. Zolfo
Cooper LLC is the financial advisor. UBS Securities, LLC, serves
as investment banker. Epiq Bankruptcy Solutions has been tapped
as claims agent.
In conjunction with the Chapter 11 filing, the Company entered
into a restructuring support agreement with certain holders of
more than 70% of the outstanding principal amount of the Company's
13% convertible senior secured notes. As part of the bankruptcy
process the Company will undertake a marketing process and will
permit all parties to bid on its assets, as a whole or in groups
pursuant to 11 U.S.C. Sec. 363. An entity formed by the
supporting noteholders, ES Purchaser, LLC, entered into an asset
purchase agreement with the Company to serve as a 'stalking-horse"
and provide a "credit-bid" pursuant to the Bankruptcy Code for
assets being sold.
The supporting noteholders are represented by Michael S. Stainer,
Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer &
Feld LLP, in New York.
An official committee of unsecured creditors has retained Pepper
Hamilton and Kramer Levin Naftalis & Frankel as counsel. The
Committee tapped Garden City Group as communications services
agent.
Evergreen Solar is at least the fourth solar company to seek court
protection from creditors since August 2011. Other solar firms
are start-up Spectrawatt Inc., which also filed in August,
Solyndra Inc., which filed early in September, and Stirling Energy
Systems Inc., which filed for Chapter 7 bankruptcy late in
September.
Evergreen sold the assets piecemeal in three auctions. Max Era
Properties Ltd. from Hong Kong paid $6 million cash and
$3.2 million in stock of China Private Equity Investment Holdings
Ltd. for the company name, intellectual property, and wafermaking
assets. Kimball Holdings LLC paid $3.8 million for solar panel
inventory while the secured lenders exchanged $21.5 million of
their $165 million claim for a $171 million claim against Lehman
Brothers Holdings Inc. Max Era Properties Limited and Sovello AG
bought equipment and machinery located at the Debtor's Devens,
Massachusetts facility for $8.9 million.
EXIDE TECHNOLOGIES: S&P Affirms 'B' Rating on Sr. Secured Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its recovery rating on
battery manufacturer Exide Technologies' senior secured notes
downward to '4' from '3'. "We affirmed the 'B' issue rating on the
notes," S&P said.
"The '4' recovery rating indicates our expectation for average
(30%-50%) recovery for noteholders following a payment default.
Our reduced recovery expectation results from our lower assumption
of gross enterprise value at emergence, given Exide's recent
weaker-than-expected operating performance. This view is
consistent with our expectation that Exide's restricted ability
to recover rising costs by raising prices will limit prospects for
any meaningful margin expansion, especially if aftermarket demand
softens further, coupled with the ongoing challenges of executing
several restructuring actions," S&P said.
"Our 'B' corporate credit rating and negative outlook on Milton,
Ga.-based Exide Technologies remain unchanged," S&P said.
RATINGS LIST
Exide Technologies
Corporate credit rating B/Negative/--
Rating Affirmed; Recovery Rating Revised
Senior secured B
Recovery rating 4 3
FENTON SUB: Files Second Amended Plan of Reorganization
-------------------------------------------------------
Fenton Sub Parcel D, LLC and Bowles Sub Parcel D, LLC, filed with
the U.S. Bankruptcy Court for the District of Minnesota a Second
Amended Joint Plan of Reorganization dated July 13, 2012.
The Disclosure Statement filed by the proponents on May 7, 2012,
was approved.
According to the Second Amended Plan, the Reorganized Debtors may,
at their discretion, sell some or all of the parcels comprising
the Pool D Properties or refinance the Class 1-A claim. Proceeds
from such a sale or refinancing will be applied . In the event of
refinancing, payments to the new secured lender will have priority
over payments to Holders of Class 2-A claims.
Confirmation of the Plan will constitute approval of a settlement
of pending litigation in Hennepin County District Court between
the Debtors and Tim Mulcahy. The settlement involves rejection of
the executory contract by Debtors, the withdrawal of claims
by Mr. Mulcahy, and the division of an escrow in the principal
amount of $50,000 with 70% to Mr. Mulcahy and 30% to the Debtors.
The Second Amended Plan terms include:
Class 1-A: Secured claim of Wells Fargo Bank N.A., trustee
for the registered holders of J.P. Morgan Chase Commercial
Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2004-LN2, whose agent is the special
servicer) -- the Debtors will pay to the secured lender the full
amount of its allowed secured claim. Interest will accrue at the
rate of 5.04%, or such lower rate as the Court determines.
Class 1-B: Steven B. Hoyt -- on the Effective Date, Mr. Hoyt
will receive an allowed Class 2-A claim in the amount of
$1,319,712.
Class 2-A: General Unsecured Claims ($2,376,864) -- holders
of allowed claims will receive up to 100% of their allowed claims,
with no interest, by receiving their pro rata share of four annual
distributions from the Excess Cash Fund.
Equity holders: On the Effective Date, interest holders will
retain their equity interests in the Debtors, but will not receive
any distributions from the Debtors unless holders of allowed
claims in Class 2-A receive payment in full.
A copy of the Second Amended Plan is available for free at
http://bankrupt.com/misc/FENTON_SUB_plan_2amended.pdf
In a July 16 order, the Hon. Robert J. Kressel granted the
Debtors' expedited relief and deeming acceptance of the Debtors'
Second Plan. The Court said that those holders of claims who
voted to accept the Debtors' First Amended Plan dated May 7, 2012,
are deemed to have accepted the Debtors' Second Amended Plan.
The Debtors filed separate stipulations with Wells Fargo Bank
N.A., in relation to the Plan.
http://bankrupt.com/misc/FENTONSUB_stipulation.pdf
http://bankrupt.com/misc/FENTONSUB_stipulation_b.pdf
http://bankrupt.com/misc/FENTONSUB_stipulation_c.pdf
http://bankrupt.com/misc/FENTONSUB_stipulation_d.pdf
Previously, Wells Fargo, submitted its objection to the First
Amended Plan, stating that (i) the Plan is not feasible; (ii) the
Plan cannot be crammed down over lender's objection; and (iii) the
Plan attempts to establish lender's secured claim at a level that
is incorrect.
Daniel Mcdermott, the U.S. Trustee for Region 12, joined in the
objections raised by Wells Fargo Bank N.A.
About Fenton Sub Parcel D and Bowles Sub Parcel D
Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own
industrial multi-tenant properties located in the Twin Cities.
They are controlled by StoneArch II/WCSE Minneapolis Industrial
LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and
of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100%
member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is
the 100% member of Fenton Sub Parcel D, LLC. In 2007, StoneArch
acquired various LLCs, which in turn owned 27 industrial multi-
tenant properties located in the Twin Cities. The properties were
divided into four separate pools: A, B, C, and D. Fenton Sub
Parcel D and Bowles Sub Parcel D jointly own the properties in
pool D. As tenants in common, Fenton Sub Parcel D has an
undivided 74.5394% interest and Bowles Sub Parcel D has an
undivided 25.4606% interest. The Pool D Properties consist of six
parcels of real property located in Anoka, Dakota, and Hennepin
Counties, Minnesota. The Debtors expect the Pool D Properties to
be worth $13,135,656 as of the Petition Date.
Although they are two separate legal entities, Fenton Sub Parcel D
and Bowles Sub Parcel D have consistently been treated as one
enterprise. Hoyt Properties, Inc., acts as agent in managing the
Pool D Properties.
Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11
bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on
June 29, 2011. The Debtors' petitions were signed by Steven Bruce
Hoyt, chief manager, who is also a debtor (Bankr. D. Minn. Case
No. 11-43816). He is separately represented by Michael C. Meyer,
Esq., at Ravich Meyer Kirkman McGrath & Nauman, P.A. The cases
were originally assigned to Judge Dennis D. O'Brien and reassigned
to Judge Robert J. Kressel as the cases are related to the Hoyt
case, which was filed earlier before Judge Kressel.
Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M.
Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors.
FOOTHILLS TEXAS: Contract With MTGLQ Investors Not Executory
------------------------------------------------------------
In 2006, Foothills Texas, Inc., et al., executed an instrument in
favor of MTGLQ Investors, L.P., which conveyed to MTGLQ an
"overriding royalty interest" of 5% of the working interest in oil
and gas produced from a certain land. MTGLQ timely and properly
recorded the Instrument soon after it was executed.
In 2009, the Debtors filed for bankruptcy. After filing the
petition, the Debtors made post-petition transfers to MTGLQ under
the Instrument. In addition, prior to confirmation, the Debtors
scheduled the Instrument as an executory contract that was subject
to rejection. In January 2010, the Court confirmed the Debtors'
Plan, which deemed any "executory contracts" listed in the
Debtor's schedules (such as the Instrument) to be rejected. The
Court retained jurisdiction to hear disputes concerning executory
contracts.
The Debtors argue that the Instrument was an executory contract.
They commenced a lawsuit seeking a declaration that the Instrument
was rejected and that any remaining obligations under it have been
terminated. Assuming the Instrument was rejected, the Debtors
also demand the return of the unidentified post-petition
transfers. MTGLQ argues that the Court should dismiss the suit
for lack of subject-matter jurisdiction or for failure to state a
claim.
The Bankruptcy Court in Delaware on Friday sided with MTGLQ.
According to Bankruptcy Judge Christopher Sontchi, the Instrument
is a single integrated agreement, did not qualify as an "executory
contract" under 11 U.S.C. Sec. 365, and, consequently, could not
be rejected as an executory contract.
The lawsuit is, Foothills Texas, Inc., et al., Plaintiffs, v.
MTGLQ Investors, L.P., Defendant, Adv. Proc. No. 10-51308 (Bankr.
D. Del.). A copy of the Court's Opinion dated July 20, 2012, is
available at http://is.gd/GFw6Bhfrom Leagle.com.
About Foothills Texas
Foothills Texas, Inc. -- http://www.foothills-resources.com/--
and its affiliates are independent energy companies engaged in the
acquisition, exploration, exploitation and development of oil and
natural gas properties. Foothills Texas sought protection under
Chapter 11 (Bankr. D. Del. Case No. 09-10452) on Feb. 11, 2009.
Lawyers at Akin Gump Strauss Hauer & Feld, LLP, in Dallas, Texas,
and Cole, Schotz, Meisel, Forman & Leonard, in Wilmington,
Delaware, served as counsel to the Debtor. In its Chapter 11
petition, the Debtor disclosed $89.5 million in assets and $78.8
million in liabilities, of which $71.2 million is owed to secured
lenders. Regiment Capital Special Situations Fund III LP provided
$2.5 million of postpetition financing.
FSJ IMPORTS: Court Rules Case Filed in Bad Faith, Orders Dismissal
------------------------------------------------------------------
Bankruptcy Judge Novalyn L. Winfield dismissed the Chapter 11
cases of FSJ Imports LLC and FSJ LLC, saying the cases were filed
in bad faith to gain a tactical litigation advantage.
In September 2010, Joseph Lehey, one of the investors, sued the
Companies and their owners Tim Goldburt and his son Matt Sandy and
others in the Supreme Court of the State of New York for breach of
contract, fraud, conversion, breach of fiduciary duty and unjust
enrichment.
In his testimony before the Bankruptcy Court, Mr. Sandy testified
that FSJ and Imports filed Chapter 11 cases because of mounting
debt, declining cash flows, problems with the LED component
manufacturing, the cost and distraction of the New York Litigation
and cash that didn't come in from anticipated sources.
The Bankruptcy Court noted those statements are in direct
contradiction to statements made by Messrs. Sandy and Goldburt in
affidavits filed in the New York Litigation dated Feb. 28, 2012,
less than 90 days before the Chapter 11 cases were filed. In his
affidavit, Mr. Sandy unequivocally stated: "I understand that
Lehey has alleged that FSJ is insolvent. This allegation is false.
FSJ has assets which exceed its liabilities and is able to pay all
of its obligations as they become due." Mr. Sandy elaborated
that: "Although Lehey's failure to complete his investment
obligation caused a temporary cash flow crisis for FSJ which
caused FSJ Imports to fall temporarily in arrears on the warehouse
fees charged by Gateway Warehouse to house the inventory, those
issues have been resolved with Gateway, and FSJ and FSJ Imports
have negotiated a payment plan that will permit FSJ Imports to pay
the arrears from the proceeds of future sales of MEDEA Vodka.
Gateway Warehouse has confirmed to me that it does not intend to
exercise any warehouseman's lien on the inventory (which in any
event would cover only a small portion of the inventory) or to
interfere in any with FSJ Imports' removal of inventory from the
warehouse to cover current sales."
Mr. Goldburt also stated in his Feb. 28, 2012 affidavit that: "FSJ
is not insolvent. It has a small amount of working capital, its
assets exceed its liabilities, and it is able to pay its bills as
they become due from the proceeds of sales of MEDEA Vodka."
On June 4, 2012, FSJ and Imports filed a Joint Plan of
Reorganization and Disclosure Statement. The Plan would be funded
by the Debtors' cash on hand at the Effective Date and income
thereafter. In addition, Tim Goldburt would infuse $1,000,000 as
new value and obtain 40% of the Reorganized Debtors' ownership
interest. Prepetition equity in FSJ will be reduced to 60%
ownership in the Reorganized Debtors.
According to the Bankruptcy Court, the Plan evidences the reality
that the purpose of the Chapter 11 cases was to remove FSJ and
Imports from the jurisdiction of the Supreme Court of the State of
New York, New York County and to continue Mr. Goldburt's control.
Mr. Goldburt acknowledged under cross-examination that he could
infuse $1 million into the Companies and pay the creditors, but
stated that he was unwilling to do so outside of the proposed plan
because it was the best way to achieve reorganization of the case.
Michael D. Sirota, Esq., and Ryan T. Jareck, Esq., at Cole,
Schotz, Meisel, Forman & Leonard, PA, in Hackensack, New Jersey,
serve as counsel to Joseph Lehey.
A copy of the Court's July 23, 2012 Opinion is available at
http://is.gd/7KJtdpfrom Leagle.com.
About FSJ Imports
FSJ Imports, LLC, and FSJ, LLC, filed Chapter 11 petitions (Bankr.
D. N.J. Case No. 12-22402 and 12-22403) on May 11, 2012. An
Unsecured Creditors' Committee was formed by the U.S. Trustee on
June 5, 2012. FSJ was formed for the "sole purpose of
commercializing and exploiting the concept of a wireless
'billboard on a bottle' by creating a new and original vodka
brand." FSJ owns (i) the brand name MEDEA, (ii) the exclusive
worldwide marketing and distribution rights for the vodka, and
(iii) the exclusive marketing and distribution rights to sell
MEDEA vodka using the billboard on the vodka package and vodka
bottle design. Imports was formed as an agent of FSJ for the
purpose of importing and distributing MEDEA vodka.
FSJ LLC scheduled assets of $2,501,000 and liabilities of
$2,631,319. FSJ Imports estimated under $1 million in assets and
debts.
Richard D. Trenk, Esq., Joao F. Magalhaes, Esq., at Trenk,
DiPasquale, Della Fera & Sodono, PC, serve as counsel to the
Debtors.
GENCORP INC: Moody's Reviews 'B1' CFR for Possible Downgrade
------------------------------------------------------------
Moody's Investors Service has placed ratings of GenCorp Inc.,
including the B1 Corporate Family Rating, under review for
downgrade. This action follows the announcement of GenCorp's
signing a definitive agreement to acquire Pratt & Whitney
Rocketdyne from United Technologies Corp. for $550 million subject
to adjustment for working capital and other specified items. The
transaction will be financed with cash on hand along with the
issuance of debt. The purchase, contingent upon approval from
regulatory agencies, is expected to close in the first half of
2013. The SGL-2 Speculative Grade Liquidity rating remains
unchanged indicating expectation of a continued good liquidity
profile for the next year supported by cash generation, access to
the recently extended and increased $150 million revolving credit
facility (unrated by Moody's) and cash on the balance sheet.
Ratings placed under review:
Corporate Family Rating B1;
Probability of Default Rating B1;
2 1/4% convertible sub. notes due 2024 B3 (LGD5, 87%).
Speculative Grade Liquidity rating SGL-2, affirmed.
Ratings Rationale
The acquisition of Rocketdyne, the largest liquid rocket
propulsion company in the U.S., will re-enter GenCorp into the
large space launch engine market and should complement GenCorp's
existing Aerojet's operations while nearly doubling its overall
scale. The transaction will however initially reverse GenCorp's
recent record of debt reduction and leverage improvement and will
likely push out previously expected improvement of free cash flow
generation.
The review will focus on the company's capital structure following
the transaction and the impact on instrument ratings, market
prospects, liquidity profile and the financial policies of the
expanded company. In addition the review will assess the expected
cost benefits of the acquisition and the impact on pension and
environmental liabilities.
The last rating action on GenCorp was on May 16, 2012 when the B1
CFR was affirmed and the rating outlook was upgraded to Positive.
The principal methodology used in rating GenCorp Inc. was the
Global Aerospace and Defense Industry Methodology published in
June 2010. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
GENCORP INC: S&P Puts 'B' Corp. Credit Rating on Watch Developing
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'B' corporate credit rating, on U.S.-based GenCorp Inc. on
CreditWatch with developing implications.
The CreditWatch action follows GenCorp's announcement that it
plans to acquire Pratt & Whitney Rocketdyne (PWR) from United
Technologies for $550 million.
"It will fund the purchase with a combination of cash on hand and
new debt, which we believe will result in a modest deterioration
in key credit metrics," said Standard & Poor's credit analyst
Chris Mooney.
"However, the acquisition likely will improve GenCorp's market
position and product diversity and almost double its revenue base.
PWR is the largest U.S. producer of liquid propulsion systems for
launch vehicles, including the primary heavy-launch systems used
by NASA and the U.S. Department of Defense. The acquisition is
contingent upon regulatory approval, which could take up to a year
to achieve," S&P said.
"Standard & Poor's will assess the long-term impact on GenCorp's
business prospects and financial profile to resolve the
CreditWatch. We could raise the rating if we believe the
improvement in the business risk profile is sufficient enough to
offset the increased debt load. Conversely, we could lower the
rating if we believe the higher leverage, integration risks, and
long-term demand uncertainty outweigh the likely improvement in
GenCorp's competitive position. We could also affirm the ratings
if we believe the risks and benefits of the transaction are
neutral to overall credit quality," S&P said.
GEORGES MARCIANO: Appellate Court Stops Sale Proceedings
--------------------------------------------------------
The United States Court of Appeals has sided with Georges Marciano
ordering that all procedures regarding the involuntary bankruptcy
be suspended thereby ordering the US trustee David Gottlieb to
cease all procedures, including the sale Mr. Marciano's belongings
and four properties in the Los Angeles area.
Guess Jeans founder Georges Marciano, involved in a California
court saga, appealed Judge Elizabeth White's ruling to pay $260
million in moral and punitive damages to former employees and
affiliated parties solely by default; this verdict was rendered
without giving Mr. Marciano the opportunity to present any
defense. For Mr. Marciano's US attorneys, Daniel J. McCarthy and
Michael E. Reznick, this latest Court of Appeal ruling is a
significant step in the right direction recognizing the merit of
Mr. Marciano's position.
This decision from the U.S.Court of Appeals is a second win for
Mr. Marciano in recent weeks since he has also just won a case
before the California Court of Appeal, which deemed the damages of
$55 million awarded by Judge Elizabeth White in one case to Gary
Iskowitz, his wife and his business partner, to "shock the
conscience," being based on insufficient proof. The three judges
at the California Court of Appeal unanimously reversed that award
and ordered the matter to be remanded to a different judge,
finding Judge White abusive and that she had repeatedly
personalized the issue of damages. The appeal from the remaining
$205 million in judgments remains pending before the same State
Court of Appeals.
Furthermore, on Dec. 8, 2011, Honourable Justice Mark Schrager of
the Superior Court of Quebec deemed the seizures of goods
belonging to Mr. Marciano and third parties (money, property,
artworks, luxury cars, jewels, and so forth) by the US trustee
David Gottlieb to be illegal and cancelled them. He ordered the
US trustee and PricewaterhouseCoopers to return, at their own
expense, all assets seized from Mr. Marciano and the third parties
involved, including the documents that were seized.
About Georges Marciano
Georges Marciano is the co-founder of the apparel company Guess?,
Inc. and an investor in various companies and real estate
ventures. Three of the five former employees of Mr. Marciano,
who won a $370 million libel judgment against him in July 2009,
filed an involuntary chapter 11 bankruptcy petition (Bankr. C.D.
Calif. Case No. 09-39630) against the Guess? Inc. co-founder on
Oct. 27 2009. Mr. Marciano challenged the involuntary petition
for 14 months, and Judge Victoria S. Kaufman entered an order for
relief against Mr. Marciano on Dec. 29, 2010.
GLOBAL AVIATION: Can Pay $137,031 in Bonuses to 5 Employees
-----------------------------------------------------------
Chief Bankruptcy Judge Carla E. Craig gave Global Aviation
Holdings, Inc., the green light to implement a key employee
retention plan over the objections of the U.S. Trustee and the
Official Committee of Unsecured Creditors.
The U.S. Trustee and the Committee argued the Debtors are
improperly seeking to pay bonuses (i) to insiders without
satisfying the requirements set forth in 11 U.S.C. Sec. 503(c)(1)
or (ii) to the extent the KERP recipients are non-insiders,
without establishing that the proposed bonus payments are
"justified by the facts and circumstances of the case" as required
by Sec. 503(c)(3).
An evidentiary hearing was held on July 11, 2012. According to
Judge Craig, the employees eligible to receive compensation under
the KERP are not insiders of the Debtors, and the Debtors have
established that the KERP is "justified by the facts and
circumstances of the case."
Pursuant to the KERP, the Debtors intend to pay bonuses to five
employees of its North American Airlines Inc. unit:
* Director of Safety: $18,050
* Vice President, Flight Operations: $50,696
* Chief Pilot: $29,355
* Senior Director of Maintenance: $15,750
* Director, Quality Assurance and Projects: $23,180
The total amount is $137,031.
The proposed bonus payments under the KERP are structured as a
percentage of each KERP Employee's base salary and in accordance
with the Debtors' pre-petition annual bonus plan. The proposed
payouts are intended to ensure that each of the KERP Employees
remains with the Debtors through the relocation of North
American's operations from JFK International Airport to Peachtree
City, Georgia. Each KERP Employee will receive the bonus upon the
approval by the Federal Aviation Administration of the transfer of
North American's operations to Georgia.
A copy of the Court's July 24, 2012 Decision is available at
http://is.gd/mhkSDlfrom Leagle.com.
About Global Aviation Holdings
Global Aviation Holdings Inc., based in Peachtree City, Ga., is
the parent company of North American Airlines and World Airways.
Global is the largest commercial provider of charter air
transportation for the U.S. military, and a major provider of
worldwide commercial global passenger and cargo air transportation
services. North American Airlines, founded in 1989 and based in
Jamaica, N.Y., operates passenger charter flights using B757-200ER
and B767-300ER aircraft. World Airways, founded in 1948 and based
in Peachtree City, Ga., operates cargo and passenger charter
flights using B747-400 and MD-11 aircraft.
Global Aviation, along with affiliates, filed Chapter 11 petitions
(Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012.
Global's lead counsel in connection with the restructuring is
Kirkland & Ellis LLP and its financial advisor is Rothschild.
Kurtzman Carson Consultants LLC is the claims agent.
The Debtors disclosed $589.8 million in assets and $493.2 million
in liabilities as of Dec. 31, 2011. Liabilities include $146.5
million on 14% first-lien secured notes and $98.1 million on a
second-lien term loan. Wells Fargo Bank NA is agent for both.
Global said it will use Chapter 11 to shed 16 of 30 aircraft.
In addition, Global said it will use Chapter 11 to negotiate new
collective bargaining agreements with its unions and deal with
liabilities on multi-employer pension plans.
On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven
member official committee of unsecured creditors in the case. The
Committee tapped Lowenstein Sandler PC as its counsel, and
Imperial Capital, LLC as its financial advisor.
GRANITE DELLS: AED Says Plan Outline Contains Misleading Info
-------------------------------------------------------------
Arizona Eco Development LLC, asks the U.S. Bankruptcy Court for
the District of Arizona to deny approval of a Disclosure Statement
explaining Granite Dells Ranch Holdings, LLC's Plan of
Reorganization dated June 11, 2012.
According to AED, the Disclosure Statement must be denied because:
i) the Debtor filed the Disclosure Statement a week after it
was ordered to do so by the Court;
ii) the Debtor did not provide proper notice of the Disclosure
Statement Hearing; and
iii) it failed to provide adequate information about the
"Debtor's Plan of Reorganization and contained misleading
and inaccurate characterizations of the facts.
As reported in the Troubled Company Reporter on July 6, 2012,
Tri-City Investment & Development, LLC, asked the Court for
authorization to file a plan of reorganization and terminate any
exclusivity in whole or in part of Granite Dells Ranch Holdings,
LLC. Tri-City is an equity security holder in the Debtor, owning
39.25% of the members' interest of the Company. According to Tri-
City, it has communicated with the Debtor in hope of formulating a
mutually agreeable Plan but has not succeeded in its effort. Tri-
City requested for the opportunity to solicit votes for a
competing plan based on the allegations of improper expenditures
within the Debtor's operations -- the current management has
incurred debt a substantial portion of which was
used to pay management fees and insider compensation.
The Chapter 11 Plan
The TCR reported on June 28, 2012, that the Plan provides for the
continuation of the management and development of the property --
approximately 15,000 acres in Yavapai County, Arizona, near the
city of Prescott.
The Plan also provides that the operations of the Reorganized
Debtor will be funded from revenues from mining and grazing
leases, sale of parcels of the property, loans from third parties,
and equity contributions made by participating investors and
holders of Interests that elect to contribute additional capital
and to participate.
Under the Plan, priority Claims will be paid in full on the
Effective Date or in installments over specified periods. Secured
Claims will be paid in full, in installments over time and as
parcels of the property are sold. Holders of Unsecured Claims
will receive installments payments over eight years from the
Unsecured Creditor Fund, to be funded by Debtor in the aggregate
amount of $5 million. Holders of Investor Claims and holders of
equity interest will be provided an election to participate in the
funding of approximately $20 million over three years, to cover
payments to creditors and other anticipated costs of development
of the property.
The Interests of Equity Holders who do not choose to participate
in the funding of the Reorganized Debtor will be canceled and the
Equity Holders will receive nothing on account of their Interests.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/GRANITE_DELLS_ds.pdf
About Granite Dells Ranch Holdings
Scottsdale, Arizona-based Granite Dells Ranch Holdings LLC filed a
bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-04962)
in Phoenix on March 13, 2012. Judge Redfield T. Baum PCT Sr.
oversees the case. The Debtor is represented by Alan A. Meda,
Esq., at Stinson Morrison Hecker LLP. The Debtor disclosed
$2.22 million in assets and $157 million in liabilities as of the
Chapter 11 filing.
Cavan Management Services, LLC is the Debtor's manager. David
Cavan, member of the firm, signed the Chapter 11 petition.
Arizona ECO Development LLC, which acquired a $83.2 million 2006
loan by the Debtor, is represented by Snell & Wilmer L.L.P. The
resolution authorizing the Debtor's bankruptcy filing says the
Company is commencing legal actions against Stuart Swanson, AED,
and related entities relating to the purchase by Mr. Swanson of a
promissory note payable by the Company to the parties that sold a
certain property to the Company. According to Law 360, AED sued
Granite Dells on March 6 asking the Arizona court to appoint a
receiver. Arizona ECO is foreclosing on a secured loan backed by
15,000 acres of Arizona land.
The United States Trustee said that an official committee has not
been appointed in the bankruptcy case of Granite Dells because an
insufficient number of unsecured creditors have expressed interest
in serving on a committee.
HARDAGE HOTEL: OneWest Consents to Use of Cash During Standstill
----------------------------------------------------------------
Hardage Hotels I, LLC, asks the U.S. Bankruptcy Court for the
Western District of Texas to enter an order:
i) continuing the May 25 hearing and the June 4 hearing for a
60-day period or such date as determined by the Bankruptcy
Court; and
ii) approving the Modified Third Extension subject to the
Debtor uploading for entry of a proposed order with a date
determined by the Bankruptcy Court and containing an agreed
budget.
Subject to obtaining the Court's approval to extend the May 25 and
June 4 hearings, the Debtor and OneWest Bank, FSB have agreed to a
60 day standstill of all litigation pending before the Court
during the time all litigation involving the Debtor and OneWest
will be tolled so that the parties can focus on negotiations
regarding a global settlement.
On May 21, 2012, the Debtor filed a motion to compel OneWest to
comply with certain discovery requests.
OneWest has also agreed to extend the Debtor's right to use cash
collateral during the standstill. The extension of the use of
cash collateral will be pursuant to the terms of the modified
third order extending interim order authorizing the use of cash
collateral of OneWest.
As reported in the Troubled Company Reporter on March 14, 2012,
Bankruptcy Judge H. Christopher Mott granted the Debtor interim
authority to use hotel revenues that constitute cash collateral of
OneWest Bank, FSB.
OneWest Bank is the lender on three different hotel properties of
the Debtor located in Lincoln, Nebraska, El Paso, Texas, and
Dublin, Ohio.
Pursuant to the Interim Order, the cash generated by the hotels on
which OneWest has a lien will be segregated and not be commingled
with the collateral accounts of any other lender on any other
hotel. The Debtor may expend, pay and use Cash Collateral only as
authorized by the Interim Order and in accordance with a budget
filed with the Court.
To the extent OneWest can establish that it has liens on the
hotels securing the obligations owing to it, the Interim Order
provides that OneWest will continue to have a lien in the Debtor's
postpetition assets to the same extent and priority as those
prepetition liens. In addition, as adequate protection for the
use of Cash Collateral, OneWest is granted a ?like kind?
replacement lien and security interest in, to and against all
property acquired by the Debtor.
The Replacement Lien will not extend to Chapter 5 causes of action
and will be limited to the diminution, if any, in the value of
OneWest's collateral.
About Hardage Hotels
Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr.
W.D. Tex. Case No. 12-30443) on March 6, 2012. The petition was
signed by Samuel A. Hardage, president. Hardage is a hotel and
real estate development company headquartered in San Diego,
California.
Hardage operates seven hotels in seven states under the brand of
"Chase Suites". The hotels are located in El Paso, Texas;
Overland Park, Kansas; Newark, California; Kansas City, Missouri;
Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio. Hardage
operates the hotels under the "Chase Suites" name pursuant to
franchise agreements with Hardage Hospitality, LLC. The Debtor
has no employees -- all employees at the hotels are employed by
non-debtor Hardage Hospitality, which provides hotel management
services.
The Debtor has outstanding secured debt of $34.2 million plus
interest. The lenders are OneWest Bank, FSB; California First
National Bank, N.A., and Security Bank of Kansas City. OneWest
is the lender under a $5.74 million Dublin loan agreement, a
$5.3 million Lincoln loan agreement, and an $11.5 million El Paso
loan agreement.
Hardage was forced to file for bankruptcy when Hardage reached an
out-of-court restructuring of its debts with OneWest and then
OneWest reneged on its commitment. In September 2010, OneWest
filed a collection against Hardage and sought the appointment of a
receiver over the El Paso property. A receivership order was
entered but was vacated, although Hardage was ordered to make
payments to OneWest. The parties then entered into a series of
tolling agreements, under which Hardage paid OneWest $700,000 so
that OneWest would not pursue any further action. Following
negotiations, the parties signed a "final term sheet" on a
restructuring on Dec. 2, 2011.
But, according to the Debtor, OneWest reneged on the agreement.
In November, OneWest sought foreclosure of, and a receiver for,
the Dublin and El Paso properties.
The Debtor on March 5, 2012, initiated a lawsuit against OneWest
in the Superior Court of the State of California for the County of
Los Angeles, Central District. The suit alleges several causes of
action, including fraud and breach of contract.
Judge H. Christopher Mott presides over the Chapter 11 case. The
Debtor has tapped Haynes and Boone LLP as attorneys, and
Transitional Finance Partners LLC as financial advisor.
In its schedules, the Debtor disclosed $39,203,540 in total assets
and $31,119,611 in total liabilities.
Brinkman Portillo Ronk, PC, serves as counsel to the Official
Committee of Unsecured Creditors.
No trustee or examiner has been requested or appointed in this
Chapter 11 case.
HAWKER BEECHCRAFT: U.S. Trustee Objects to $5 Million Bonus Plan
----------------------------------------------------------------
The U.S. Trustee objects to Hawker Beechcraft Inc.'s proposal to
pay more than $5 million in bonuses to its top management as part
of its key employee incentive and retention plan.
Carla Main, substituting for Bloomberg bankruptcy columnist Bill
Rochelle, reports that U.S. Bankruptcy Trustee Tracey Hope Davis
said in a filing that the Debtors seek to pay in excess of
$5 million in bonuses to eight "insiders" without establishing
that recipients of the bonuses must meet "challenging metrics."
"In the absence of demonstrating that the metrics are challenging,
the bonuses to these eight insiders appear to be disguised
retention awards," Ms. Davis said in the filing.
Earlier this month, Hawker Beechcraft had said it needed to offer
incentives to the eight-member senior leadership team to see it
through its reorganization.
The Debtor is involved in a restructuring effort involving "a
consensual debt-to-equity recapitalization transaction," in which
senior management play a "key role," the company said in court
papers. The incentive plan is supported by a majority of the
holders of the prepetition secured debt and the Official Committee
of Unsecured Creditors, the debtor told U.S. Bankruptcy Judge
Stewart M. Bernstein in its motion.
A hearing on the motion is scheduled for today, July 26.
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 Beechcraft
disclosed assets of $1,831,097 plus undetermined amounts, and
liabilities of $1,704,736,958 plus undetermined amounts.
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.
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.
An Official Committee of Unsecured Creditors appointed in the case
has selected Daniel H. Golden, Esq., and the law firm of Akin Gump
Strauss Hauer & Feld LLP as legal counsel. The Committee tapped
FTI Consulting, Inc., as its financial advisor.
HOLYOKE HOSPITAL: Moody's Affirms 'Ba3' Rating on Bonds
-------------------------------------------------------
Moody's Investors Service has affirmed the Ba3 rating assigned to
Holyoke Hospital's bonds. The outlook remains negative.
Ratings Rationale
The Ba3 rating reflects continued fundamental operating challenges
at Holyoke including patient volume declines, a challenging local
economy, operating reliance on supplemental funding from the
Commonwealth of Massachusetts, and high exposure to Medicaid.
Nevertheless, challenged core operating performance is mitigated
by the Massachusetts Medicaid Waiver agreement signed in December
2011 which provides supplemental funding to Holyoke through June
2014 of approximately $8 million, annually. This funding will
likely help the organization maintain adequate balance sheet
metrics and debt coverage metrics. The negative outlook reflects
the fundamental challenges facing Holyoke.
Strengths
* Holyoke will receive $8.2 million of supplemental funding
annually through June 2014. The payments are part of an updated
waiver agreement between CMS (Center for Medicare and Medicaid)
and the Commonwealth of Massachusetts signed in December 2011.
Holyoke was explicitly named in the waver and Massachusetts has
already appropriated the money for SFY 2012 and has included it in
the preliminary budget for SFY 2013.
* Receipt of $7.0 million in supplemental funding in FY 2011
allowed Holyoke to significantly improve operating performance
over the prior year with operating cash flow margin of 4.4% and an
operating profit of $1.4 million (1.0%) in FY 2011. Absent the
supplemental funding, the organization would have recorded an
operating loss of $5.6 million.
* Low absolute and relative levels of direct debt outstanding,
although comprehensive debt measures (including unfunded pension
liability) are significantly higher. With only $11.5 million of
debt outstanding at FYE 2011, cash-to-debt measures a strong 123%
and debt-to-cash flow is low at 1.75 times. Holyoke added
approximately $3 million of debt subsequent to fiscal year 2011
end. At February 28, 2012, cash-to-debt measured 119%.
* Absolute unrestricted cash balances have stabilized, in large
part due to supplemental funding. At February 28, 2012, Holyoke
had $16.5 million of cash, translating into 42 days cash on hand
and 119% cash to debt.
* Due to low levels of absolute debt, leverage metrics are
adequate. Through February 28, 2012 debt-to-cash flow is 2.53
times and Moody's adjusted MADS coverage is 1.92 times.
Challenges
* Core operating performance is challenged and absent
supplemental funding, Holyoke would record significant operating
losses.
* Long-term trend of declining patient volumes, notwithstanding
moderate gains in some departments through five months FY 2011.
* Defined pension plan with unfunded liability of $39.3 million
(61% funding on PBO basis); although plan is frozen annual cash
contributions averaging in excess of $2 million limit Holyoke's
ability to make other strategic investments. Cash to comprehensive
debt is low 24% at FYE 2011
* Steadily rising average age of plant; average age of plant hit
a very high 23.2 years at FYE 2011 and although capital spending
more than doubled in FY 2011 to $5.7 million it has averaged just
$3.6 million over the last five fiscal years (average capital
spending ratio of 0.7 times). (Moody's notes that the age of plant
figure is affected by management policies regarding write off of
assets, which in this case may lead to an overstated ratio.)
* High Medicaid exposure of 28.8% of gross revenue
Outlook
The negative outlook reflects Holyoke's challenging operating
environment and overall financial performance.
What Could Make the Rating Go Up
Increasing patient volumes; improved and consistent profitability;
increase in unrestricted cash and improvement in balance sheet
metrics
What Could Make the Rating Go Down
Further volume declines; further weakening of the balance sheet;
continued weak operating performance
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in March 2012.
HOSPITAL AUTHORITY OF CHARLTON: Appeals Case Dismissal Order
------------------------------------------------------------
Charlton County Herald reports Harley Hickox, chairman of Charlton
County Hospital Authority, said an appeal from the court order
dismissing Charlton Memorial Hospital's Chapter 9 bankruptcy
petition is already underway.
As reported by the Troubled Company Reporter on July 9, 2012,
Judge John Dalis held that Charlton Memorial Hospital is not
eligible for either Chapter 9 or Chapter 11 debt relief.
According to Charlton County Herald, the authority had hoped to
buy time with the bankruptcy filing to reorganize and possibly
find a buyer for the hospital. The report notes the Charlton
County Commission earlier this year assumed responsibility for a
$950,000 note between the hospital and a local bank after the
financial institution expressed concern that the loan was
"underperforming" because of slow repayment by the hospital. The
county stopped all funding to the hospital at that time to use the
money to repay the note. In addition, the commissioners took over
operation of EMS/ambulance services in May after the hospital said
it was losing money as the operator, according to the report.
About Hospital Authority of Charlton
Hospital Authority of Charlton County, Georgia, filed a Chapter 9
petition (Bankr. S.D. Ga. Case No. 12-50305) in Waycross, Georgia,
on April 30, 2012. The authority owns the Charlton Memorial
Hospital in Fall River, Georgia. The Charlton Memorial Hospital
is a 25-bed critical access hospital and treats 67,000 patients in
its emergency department each year. The hospital is/was managed
by St. Vincent's.
The Hospital Authority and the Charlton County are defendants to a
contract suit filed by St. Vincent's Health System, Inc., in
district court (M.D. Fla. Case No. 3:2012cv00285) on March 14,
2012, according to Justia.com.
Bankruptcy Judge John S. Dalis oversees the case. C. James
McCallar, Jr., Esq., at McCallar Law Firm, serves as the Debtor's
counsel. The Debtor scheduled $8,937,298 in total assets and
$4,919,654 in total liabilities in its Chapter 9 petition.
On July 3, 2012, the Court held the authority is not eligible to
seek Chapter 9 bankruptcy protection and dismissed the case.
HOSTESS BRANDS: Seeks to Tap Cash as Union Talks Ongoing
--------------------------------------------------------
Rachel Feintzeig at Dow Jones' Daily Bankruptcy Review reports
that Hostess Brands Inc. wants to extend its access to cash
pledged to its lenders, warning that it could soon lack the
liquidity necessary to continue operating and continue negotiating
a potential deal with its unions.
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.
IBI CORP: Canadian Securities Agencies Issued Cease Trade Orders
----------------------------------------------------------------
IBI Corp, a junior international mining and investment company,
received conditional approval on Feb. 3, 2012 for listing and
trading of its common shares on the Canadian National Stock
Exchange.
Furthermore, the TSX Venture Exchange advised IBI that, with
effect from the opening on Feb. 10, 2012, IBI's common shares were
suspended from trading on the TSX Venture Exchange. Also, as of
the close of business on July 20, 2012, IBI's common shares were
delisted from the Exchange for failure of the company to pay the
annual 2012 sustaining fee of $5,875.00 in March 2012. The common
shares of IBI had been halted on the TSX Venture Exchange since
March 2011 pending clarification of the Company's affairs in
respect of failure to meet certain exchange requirements such as
the timing of annual meetings.
The listing on the CNSX is conditional on and subject to the
following:
* Submission of an expanded technical report on the Mubende
uranium property in Uganda;
* Closing of proposed financing;
* Holding of IBI Annual Shareholder Meetings for 2009 and 2010;
* Completion of any remaining CNSX listing documentation.
A meeting has been held with Dr. James Misener, IBI's Qualified
Person, to arrange for the expansion of the existing technical
report to meet this requirement.
IBI has received an undertaking for initial financing which will
enable it to complete a number of conditional matters to proceed
with the CNSX listing. Terms for this proposed financing are
currently being finalized.
Because of the unavailability of cash, the Company has been unable
to set a date for and proceed with the Annual Shareholder
Meetings. Also, because of unpaid fees of the auditor, the audit
for the year ended December 31, 2011 has not yet been completed,
and therefore the Company was unable to file annual audited
financial statements for the 2011 fiscal year by the deadline of
April 30, 2012. Accordingly, the securities commissions of
Ontario, British Columbia and Alberta proceeded to issue Cease
Trade orders prohibiting trading in the company's shares until the
filing of the financial statements and related documents are up-
to-date.
The draft financial statements for the year ended Dec. 31, 2011
have been prepared by management.
Until the conditions are satisfied for an effective date of the
CNSX listing, members are prohibited from trading in the
securities of the Company during the period of the
delisting/cease-trade order or until further notice.
IBI Corp is a junior international mining and investment company.
IL LUGANO: Plan of Reorganization Wins Court Approval
-----------------------------------------------------
The Hon. Alan H. W. Shiff of the U.S. Bankruptcy Court for the
District of Connecticut confirmed IL Lugano, LLC's Amended Plan of
Reorganization dated April 25, 2012.
The Court also ordered that the Debtor must file an application
for final decree by Dec. 21, 2012, unless that time is extended by
the order of the court.
As reported in the Troubled Company Reporter on June 15, 2012,
according to the Disclosure Statement, the sources of cash
necessary for the payment of Allowed Claims under the Plan will be
cash on hand as of the Effective Date from the operations of the
Debtor, the net proceeds from the sale of the Debtor's assets, and
any cash generated or received by the Debtor after the Effective
Date from any other source.
Under the Plan, holders of general unsecured claims aggregating
$1,067,837 will receive from the Debtor a cash payment equal to
the Allowed amount of the Claim within 30 days after the later of
(a) the closing on a sale of a specified collateral or (b) the
allowance date with respect to an allowed general unsecured claim.
Holders of small unsecured claims aggregating $129,962 will each
receive the lesser of (a) the allowed amount of its claim in full
or (b) $10,000 in cash.
The equity holder will retain its interests in reorganized Debtor.
A full-text copy of the Disclosure Statement is available for free
at http://bankrupt.com/misc/IL_LUGANO_ds.pd
About Il Lugano
Il Lugano LLC's main asset is a four-star, boutique-styled, luxury
condominium and hotel property located in Ft. Lauderdale,
Florida.
Il Lugano filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case
No. 08-50811) on Aug. 29, 2008, Judge Alan H.W. Shiff presiding.
Douglas J. Buncher, Esq. -- dbuncher@neliganlaw.com-- at Neligan
Foley LLP in Dallas, Texas, and James Berman, Esq. --
jberman@zeislaw.com-- at Zeisler and Zeisler in Bridgeport,
Connecticut, serve as the Debtor's bankruptcy counsel. When the
Debtor filed for protection from its creditors, it estimated
assets between $50 million and $100 million and debts between
$1 million and $10 million.
IL Lugano filed for bankruptcy to prevent any adverse judgment and
subsequent enforcement actions against IL Lugano in a lawsuit
filed by EPI NCL, LLLC, in the Circuit Court of the 17th Judicial
Circuit of Broward County, Florida, which was set for trial on
September 2, 2008, and to allow adequate time for completion of
the restaurant and sale of the property.
SageCrest II is also in chapter 11 proceedings (Bankr. D. Conn.
Case No. 08-50754) before the Connecticut Bankruptcy Court.
INNOPHOS INC: S&P Raises Corp Credit Rating to BB+; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Cranbury Township, N.J.-based Innophos Inc. to 'BB+'
from 'BB'. The outlook is stable.
"The upgrade reflects Innophos' continued progress in diversifying
its supply chain, including since 2010 shifting to three major
suppliers of phosphate rock from one, while increasing its
operational flexibility to process multiple grades of rock," said
Standard & Poor's credit analyst Daniel Krauss.
"Additionally, the company has moderately reduced earnings
volatility, which was particularly evident in 2008 and 2009, since
it reworked its raw material contracts. The majority of the
contracts now allow for prices to be reset under a three to six
month lag to raw material cost changes, as opposed to one year or
longer. We expect that the company will pursue its strategy of
growth through bolt-on acquisitions, while maintaining moderate
financial policies and credit metrics appropriate for the current
rating," S&P said.
"The ratings on Innophos reflect its narrow product line in a
mature market and exposure to pricing volatility in its commodity
raw materials. The company's leading market position, solid EBITDA
margins, and moderate financial policies partially offset these
factors. Standard & Poor's characterizes the company's business
risk profile as 'fair' and financial risk profile as
'intermediate'," S&P said.
Innophos is a manufacturer of specialty phosphates and has sales
of about $840 million annually. Specialty phosphates are used in a
variety of food and beverage, consumer product, pharmaceutical,
and industrial applications.
ISLE OF CAPRI: Moody's Rates $350MM Senior Subordinated Notes
-------------------------------------------------------------
Moody's Investors Service assigned a Caa1 to Isle of Capri
Casinos, Inc.'s proposed $350 million senior subordinated notes
due 2020. Isle's B2 Corporate Family Rating, B2 Probability of
Default Rating, Ba3 senior secured bank loan rating, B3 senior
unsecured note rating, and Caa1 senior subordinated note rating
were affirmed. The rating outlook is stable.
Proceeds from the proposed note offering will be used to fund the
purchase and making of consent payments with respect to Isle's
existing 7% senior subordinated notes due 2014, and the redemption
of any and all 7% senior subordinated notes that remain
outstanding following consummation of the tender offer for these
notes. The Caa1 rating assigned to the proposed is subject to its
closing along with the receipt and review of final documentation.
The rating on the existing 7% senior subordinated notes will be
withdrawn once the proposed transaction closes.
The affirmation of Isle's B2 Corporate Family Rating considers
that the proposed transaction will not result in a reduction of
the company's high leverage. Moody's expects Isle's lease-adjusted
debt/EBITDA will remain at or above 6.0 times during the next 12
to 18 month period. Additionally, the issuance of the proposed
notes could result in a higher overall cost of debt to the extent
the interest rate on the proposed notes exceeds the 7% rate on
Isle's existing senior subordinated debt. However, the proposed
transaction, if completed, would significantly extend Isle's
overall debt maturity profile. Pursuant to Isle's bank agreement,
the credit facility matures on November 1, 2013 unless the
company's existing 7% senior subordinated notes are refinanced on
or prior to that date. If Isle is successful in refinancing its 7%
senior subordinated debt prior to November 1, 2013, its revolving
line of credit maturity will be extended to 2016 and its term loan
maturity would be extended to 2017.
The Caa1 rating assigned to the proposed senior subordinated notes
considers the substantial amount of debt that ranks senior to
these notes, including a $300 million revolver, $500 million term
loan, and $300 million of senior unsecured notes. The proposed
senior subordinated notes are similar to Isle's existing senior
subordinated notes in that they are fully and unconditionally
guaranteed on an unsecured senior subordinated basis, jointly and
severally, by each of Isle's domestic subsidiaries that guarantee
the company's senior secured credit facility.
Ratings affirmed and LGD assessments revised:
Corporate Family Rating at B2
Probability of Default Rating at B2
$800 million senior secured credit facility at Ba3 (LGD 2, 24%)
$300 million 7.75% senior unsecured notes due 2019 at B3 (LGD 4,
67%)
New rating assigned:
Proposed $350 million senior subordinated notes due 2020 at Caa1
(LGD 5, 89%)
Rating affirmed and to be withdrawn upon transaction closing:
$357 million 7% senior subordinated notes due March 2014 at Caa1
(LGD 6, 90%)
Ratings Rationale
In addition to Isle's high leverage and possible increase in
overall cost of debt, the B2 Corporate Family Rating reflects
Moody's view that the improvement in US gaming revenue that took
hold late last year appears to be stalling, and that any resulting
and meaningful reduction of consumer spending on gambling -- a
highly discretionary form of entertainment -- prompted by fears of
slow economic growth could have a negative impact on Isle's
consolidated earnings and free cash flow generating ability. It
could also make it difficult for the company's $135 million Cape
Girardeau casino development in Missouri -- scheduled to open in
November 2012 -- to achieve its targeted return profile.
Positive rating consideration is given to isle's geographic
diversification. Isle operates fifteen gaming facilities in six
jurisdictions. The company generates a considerable amount of
revenues from each one of these jurisdictions. Also providing
rating support is Moody's view that, despite a relatively
difficult gaming demand environment over the past few years, Isle
has generated free cash flow, significantly lowered its cost
structure and total debt burden, extended its debt maturity
profile, and improved its overall liquidity profile. Moody's
believes these factors, in combination, will help Isle invest in
growing and improving its asset profile while dealing with the
economic challenges that it and other US gaming companies will
continue to face going forward.
The stable outlook acknowledges Isle's pending sale of its lower
margin Biloxi, MS property for $45 million -- the sale is expected
to close later this year -- along with Moody's current view that
Isle's Cape Girardeau casino development will provide an annual
EBITDA-based return on assets that will contribute to a reduction
in the company's consolidated leverage over the longer-term. At
the same time, the stable rating outlook recognizes that because
of development spending related to Cape Girardeau, Moody's expects
that Isle will be slightly free cash flow negative in fiscal 2013.
As a result, further absolute debt reduction is not expected and
adjusted debt/EBITDA is not expected to improve materially until
Cape Girardeau starts to generate EBITDA.
Ratings could be lowered if it appears that Isle will not be able
to achieve and sustain debt/EBITDA of 6 times -- a key assumption
supporting the B2 Corporate Family Rating -- over the longer-term
for any reason. A higher rating would require that Isle
demonstrate an ability to achieve and sustain debt/EBITDA at or
below 5 times.
The principal methodology used in rating Capri 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.
Isle owns and operates 15 gaming and entertainment facilities in
Louisiana, Mississippi, Missouri, Iowa, Colorado and Florida. Isle
also operates a harness racing track at casino in Florida. Annual
net revenue for the fiscal year ended April 29, 2012 was about
$980 million.
ISLE OF CAPRI: S&P Rates New $350MM Sr. Subordinated Notes 'CCC+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' issue-level
rating to St. Louis-based Isle of Capri Casino Inc.'s planned $350
million senior subordinated notes due 2020. "The recovery rating
is '6', indicating our expectation for negligible (0% to 10%)
recovery for noteholders in the event of a payment default. Isle
plans to use the proceeds to refinance its 7% senior subordinated
notes due 2014 ($357 million outstanding)," S&P said.
"We are placing our issue-level rating on the company's 7.75%
senior notes due 2019 on CreditWatch with positive implications.
As part of the senior subordinated notes refinancing, the
maturities of the company's revolving credit facility and term
loan will be extended to 2016 and 2017 from 2013. With the
extended maturities, our default year under our simulated default
scenario has been pushed out versus our previous analysis,
resulting in a lower level of secured debt outstanding and
improved recovery prospects for the senior notes. On completion of
the new notes offering, we expect to revise our recovery rating on
the 7.75% senior notes upward to '4' (expectation of 30% to 50%
recovery) from '5' (10% to 30% recovery) and raise our issue-level
rating to 'B' from 'B-', in accordance with our notching
criteria," S&P said.
"The corporate credit rating on Isle is 'B' and the rating outlook
is stable. The rating reflects our assessment of Isle's financial
risk profile as 'highly leveraged' and its business risk profile
as 'fair,' according to our rating criteria," S&P said.
"Our assessment of Isle's financial risk profile as highly
leveraged reflects our expectation that adjusted leverage will
remain over 6x in the near term and our expectation that the
company will generate negative free operating cash flow in fiscal
2013. These factors are offset by minimal near-term maturities,
the company's good interest coverage, and 'adequate' liquidity,"
S&P said.
"Our assessment of Isle's business risk profile as fair reflects
its geographically diverse portfolio, despite locations facing
competitive pressures because of the second-tier market position
of many of its properties, and the company's focus on regional
gaming markets, which experienced a lower level of revenue
volatility over the last economic cycle than destination markets.
Additionally, the near-term opening of the Cape Girardeau casino
will improve Isle's diversity and its opening, along with planned
asset refurbishment projects across the portfolio, will enhance
the company's asset quality."
"In resolving our CreditWatch listing, we will monitor the
progress of the proposed transactions, including the tender offer
for the senior subordinated notes due 2014, and expect to raise
our issue-level rating on the senior notes once the transactions
are completed," S&P said.
JETSTAR PARTNERS: U.S. Trustee Balks at Plan Outline Approval
-------------------------------------------------------------
The U.S. Trustee for Region 6, asks the U.S. Bankruptcy Court for
the Northern District of Texas to deny the disclosure statement
explaining Jetstar Partners Ltd.'s Plan of Reorganization dated
June 5, 2012.
According to the U.S. Trustee says that the Disclosure Statement
and Plan Were not proposed in good faith. It noted that the
documents were filed two days after the Debtor's primary secured
lender moved for stay relief. The Plan is not feasible because
its treatment of creditors is vague and undefined, the U.S.
Trustee points out.
The Chapter 11 Plan
According to the Disclosure Statement, the Reorganized Debtor will
make all distributions required under the Plan. The Reorganized
Debtor will continue to operate using the funds generated from its
leases and no exit financing will be obtained.
The Plan terms include:
1. Symetra, estimated to have an allowed claim of
$7.61 million, will be paid the full amount of the claim
within 30 days of the closing of the sale of the real
property securing the claim.
2. Holders of secured tax claims will recover 100% of their
allowed claims, but "potentially paid over time"
3. Holders of other secured claims are unimpaired.
4. Holders of convenience clams, i.e. small unsecured claims
aggregating $42,000, will recover 80% of their allowed
claims.
5. Holders of other general unsecured claims will recover 10%
of allowed claim, but paid over time. They will be paid
interest at a rate not to exceed 5% and the monthly payment
of principal and interest would not exceed $1,000.
4. Holders of interests will retain any property on account of
the interests.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/JETSTAR_PARTNERS_ds.pdf
About Jetstar Partners
Jetstar Partners, Ltd., was formed on Oct. 14, 1999, for the
purpose of owning and developing real property in Dallas County,
Texas. Jetstar owns and operates certain real property in Irving,
Dallas County. Collinternational IV, Inc., a Texas corporation,
is the sole general partner of Jetstar.
Jetstar Partners, Ltd., filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 12-31444) on March 5, 2012. In its
schedules, the Debtor disclosed $11,435,476 in total assets and
$7,860,399 in total liabilities. Judge Harlin DeWayne Hale
oversees the case.
KB HOME: Fitch Rates $250-Mil. Debt Issue 'B+'/RR4'; Outlook Neg.
-----------------------------------------------------------------
Fitch Ratings has assigned a 'B+/RR4' rating to KB Home's (NYSE:
KBH) $250 million senior notes due 2022. The Rating Outlook is
Negative. This issuance extends a meaningful portion of KBH's
maturities to 2022 and improves the ratio of cash to remaining
2013 - 2016 maturities, although at the cost of higher interest
rates.
The issue will be ranked on a pari passu basis with other senior
unsecured debt. Proceeds from the new debt issue will be used to
fund the recently announced cash tender offers for any and all of
its 5.75% senior notes due 2014, and up to $150 million in
aggregate principal amount, less the amount of 2014 notes accepted
for purchase, of its 5.875% senior notes due 2015 and 6.25% senior
notes due 2015. Any remaining net proceeds from the offering will
be used for general corporate purposes, which may include the
purchase from time to time of any remaining 2014 and 2015 notes.
A full list of ratings follows at the end of this press release.
KBH's ratings reflect the moderately stronger prospects for the
housing sector in 2012 as well as the successful execution of its
business model, its leadership role in constructing and marketing
energy efficient homes, its conservative building practices, its
effective utilization of return on invested capital criteria as a
key element of its operating model, and the resolution of the
South Edge liabilities. The ratings also take into account KBH's
sharp contraction in liquidity since the end of fiscal 2010.
The Negative Outlook incorporates KBH's current over-exposure to
the credit challenged entry level market (65% of the total),
underperformance relative to its peers in certain operational and
financial categories during recent quarters, and capital structure
which remains in some flux as a result of the company's multi-step
financing plan.
Builder and investor enthusiasm have for the most part surged so
far in 2012. However, housing metrics have not entirely kept
pace. Year-over-year (yoy) comparisons have been solidly positive
on a consistent basis. However, month-to-month statistics
(single-family starts, new home sales, and existing home sales)
have been erratic and, at times, below expectations. In any case,
year to date these housing metrics are well above 2011 levels. As
Fitch has noted in the past, 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 only a moderate rise off a
very low bottom. In a slowly growing economy with relatively
similar distressed home sales competition, less competitive rental
cost alternatives, and new home inventories at historically low
levels, single-family housing starts should improve about 12%,
while new home sales increase approximately 10.5% and existing
home sales grow 5.6%. Further moderate improvement is forecast
for 2013.
KBH employs what it labels as the KBnxt operational business
model. This strategy includes regular detailed product preference
surveys, primarily acquisition of developed and entitled land in
markets with high growth potential, generally commencement of
construction of a home only after a purchase contract has been
signed, establishment of an even-flow production, pricing homes to
compete with existing homes, and utilizing design centers to
customize homes to the preferences of home buyers. Also, KBH
strives to be among the top five builders or, in very large
markets, top 10 homebuilders in order to have access to the best
land and subcontractors.
Most of KBH's communities now feature the 'Open Series' product
designs which have been value engineered to reduce production
costs and cycle times, enabling the company to more effectively
compete on price with existing homes in the current market. Also,
KBH is one of a handful of public builders aggressively marketing
energy efficient homes as a way of differentiating its homes from
other builders' product and existing homes for sale.
The company maintains a 7.4-year supply of lots (based on last 12
months deliveries), 73.3% of which are owned and the balance
controlled through options. (The options share of total lots
controlled is down sharply over the past five years as the company
has written off substantial numbers of options.)
KBH's most recent credit metrics, while improving in certain
cases, remain stressed. Debt to capitalization was 81.1% as of
May 31, 2012, up from 78.2% at year-end 2011. Net debt to
capitalization was 77.4%, up from 72.5% as of Nov. 30, 2011. Debt
to LTM EBITDA, excluding real estate impairments, was 28.0x times
(x) and was 37.0x at the end of 2011. Funds from operations (FFO)
adjusted leverage was 24.2x at the conclusion of the 2012 second
quarter and 21.7x a year earlier. Adjusted interest coverage was
0.5x as of May 31, 2012 and 0.9x as of May 31, 2011, while FFO
interest coverage was 0.5x as of May 31, 2012, down from 0.7x the
prior year. The gross inventory has been stable in 2012 and 2011
at 0.7x. The sales value of backlog represented 40% of
construction debt at the conclusion of the 2012 second quarter, up
from 30% a year ago.
KBH's unrestricted cash and equivalent was sharply reduced during
the past year and a half from $904.4 million at Nov. 30, 2010 to
$415.0 million at Nov. 30, 2011 and $314.3 million at May 31,
2012. The reduction in cash position largely resulted from land
and development spending, repayment of maturing senior notes and
other debt and $251.9 million in payments relating to legal
matters surrounding the South Edge, LLC joint venture. The
company currently has adequate liquidity to fund working capital
and debt service. The challenge in 2012 will be to absorb annual
interest expense of about $130 million and manage land and
development expenditures to a level that does not meaningfully
deplete the current cash position.
The company reported $89.9 million negative cash flow from
operations (CFFO) during the first half of 2012 despite positive
CFFO of $19.7 million for the second quarter. On a LTM basis CFFO
was a negative $166.1 million. For all of fiscal 2012, Fitch
expects KBH to be $50 - 75 million cash flow negative. The
company is likely to spend about $550 million on land and
development this year. It expended $553 million in 2011 and $478
million in 2010.
KBH terminated its revolving credit facility, effective March 31,
2010. Consistent with Fitch's comment on certain homebuilders'
termination and reduction of revolving credit facilities, in the
absence of a revolving credit line, a consistently higher level of
cash and equivalents than was typical should be maintained on the
balance sheet, especially in these still uncertain times.
As of May 31, 2012, KBH had an investment of $121.4 million in
eight unconsolidated joint ventures (JVs). These JVs have no debt.
During the 2011 fourth quarter, the bankruptcy and lender-related
legal matters concerning South Edge, LLC and KBH's obligations
with respect to those matters were essentially resolved. A $6.6
million gain on loan guaranty during the fourth quarter reflected
the consummation of a consensual plan of reorganization of South
Edge, LLC that was confirmed by a bankruptcy court in November
2011 and included, among other things, the satisfaction of a
limited several repayment guaranty the company provided to the
administrative agent for the lenders to South Edge, LLC. In
connection with the reorganization plan and the settlement of
other South Edge-related legal matters, KBH made payments of
$251.9 million in the fourth quarter of 2011.
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, free cash flow trends and uses, and the
company's cash position.
Negative rating actions could occur if the early stage of the
housing recovery is not sustained and the company steps up its
land and development spending prematurely, leading to consistent
and significant negative quarterly cash flow from operations and a
diminished liquidity position below $350 million.
Underperforming operating metrics could also contribute to a
rating action. Positive rating actions may be considered if the
recovery in housing is maintained and is much better than Fitch's
current outlook, KB Home shows continuous improvement in credit
metrics, and maintains a healthy liquidity position.
Fitch currently rates KB Home as follows:
-- IDR 'B+';
-- Senior unsecured debt 'B+/RR4'.
The Outlook is Negative.
KB HOME: Moody's Rates $250MM Sr. Unsecured Note Offering 'B2'
--------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to KB Home's
proposed $250 million senior unsecured note offering due 2022,
proceeds of which will be used for debt retirement and to add to
liquidity. In the same rating action, Moody's affirmed the
company's B2 corporate family rating, B2 probability of default
rating, B2 rating on the existing senior unsecured notes, P(B2)
rating on the senior unsecured shelf, and downgraded speculative
grade liquidity assessment to SGL-3 from SGL-2. The rating outlook
remains stable.
The following rating actions were taken:
Proposed $250 million senior unsecured notes due 2022, assigned a
B2 (LGD4, 52%);
Existing senior unsecured notes, affirmed at B2 (LGD4, 52%);
Corporate family rating, affirmed at B2;
Probability of default rating, affirmed at B2;
Senior Unsecured shelf registration, affirmed at P(B2);
Speculative grade liquidity assessment, downgraded to SGL-3 from
SGL-2;
Rating outlook is stable.
Rating Rationale
The proceeds from the offering will be used to retire up to $150
million aggregate principal amout of KB Home's outstanding 5.75%
senior unsecured notes due 2014, 5.875% senior unsecured notes due
2015 and 6.25% senior unsecured notes due 2015. The tender offer
for these notes was announced on July 11, 2012. The remainder of
the proceeds, of about $100 million, will increase the company's
cash balance. The proposed notes will be issued under the
company's shelf registration for well-known seasoned issuers filed
in September 2011. The note offering could be upsized, depending
on the amount of the duly tendered notes that are accepted for
payment.
The B2 corporate family rating reflects KB Home's elevated
homebuilding debt leverage (pro forma 82.3%), negative earnings
and cash flow generation, and Moody's expectation that credit
metrics will remain weak and improvement in the operating
performance will be limited over the next 12 months, as the
homebuilding industry slowly gains traction. The company generated
negative cash from operations of $348 million in FY 2011, ending
November 30, 2011, which in Moody's view is likely to remain
negative in fiscal 2012 and 2013.
At the same time, the ratings reflect the enhanced liquidity
resulting from the extension of debt maturities as per the
proposed transactions, Moody's expectation that KB Home's credit
metrics will gradually begin to improve in the intermediate time
horizon, and by the elimination of its contractual joint venture
debt.
Despite the liquidity boost as a result of these transactions
(i.e., pushing debt out and adding to cash balances), the SGL
assessment was lowered because the company has burned significant
cash in the past two years and will be operating with lower cash
balances than much of its peer group.The company's SGL-3
speculative grade liquidity assessment is supported by the
unrestricted cash position of $314 million at May 31, 2012, lack
of financial maintenance covenants, and the extension of $150
million of debt maturities to 2022 by the proposed transaction.
Liquidity is constrained by the company's negative cash flow
generation, the absence of external liquidity sources (since the
company does not have a committed revolving credit facility), and
by relatively limited opportunities to monetize excess assets
quickly.
The stable rating outlook presumes that the company will begin to
increase its revenue generation in line with the rest of the
industry and improve its gross margins and other credit metrics
over the intermediate time horizon, as its adequate liquidity
profile provides a bridge to a potentially better operating
environment. That said, if general economic weakness continues to
hamper new household creation and new home purchases, additional
negative rating pressure will build as larger maturities then loom
closer on the horizon and improvement in credit metrics is pushed
further out.
Moody's does not foresee any upgrade potential in the next 12 to
18 months as the company's debt metrics place it at the lower end
of the B2 rating category. Longer term, a return to consistent
profitability and debt leverage below 60% could lead us to
consider the rating for an upgrade.
Continued losses, weakening liquidity, debt/capitalization
remaining above 80% on a sustained basis, deteriorating margins,
and/or under performance vs. the industry on revenue generation
could create downward pressure on the ratings.
The principal methodology used in rating KB Home was the Global
Homebuilding Industry Methodology published in March 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Headquartered in Los Angeles, KB Home is one of the country's
largest homebuilders, with presence in 32 markets and four
geographic regions, including the West, Southwest, Central, and
Southeast. In the last twelve months ending May, 2012, the
company's homebuilding revenues and a consolidated net loss were
$1.4 billion and $66 million, respectively.
KB HOME: S&P Rates Proposed $250-Mil. Senior Notes Due 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating and '4'
recovery rating to KB Home's proposed issuance of $250 million of
senior notes due 2021. "Our '4' recovery rating indicates our
expectation for an average (30%-50%) recovery in the event of
Default," S&P said.
"On July 11, 2012, the company announced a tender offer for up to
$250 million of its 2015 and 2015 senior notes. The tender
comprises an any and all tender for its $193.5 of its 5.75% senior
notes due 2014 and up to $150 million of its $169.7 million 5.625%
senior notes and $296.2 million 6.25% senior notes due 2015. The
early tender offer ended July 23, 2012, with valid tenders
aggregating $243.4 million. The tender offer expires Aug. 7, 2012.
KB intends to fund all or a portion of the tender with proceeds
from the sale of the proposed senior notes, with any excess
proceeds used to enhance its cash position ($314 million at May
31, 2012). KB Home intends to use the additional liquidity for
general corporate purposes, which may include investment in new
land positions. This transaction will reduce near term maturity
risk, most notably its next maturity in 2014, but the company will
still face relatively large 2015 maturities in excess of $300
million. If KB Home raises incremental debt (over and above the
debt repurchased), it will improve its cash liquidity position,
which is a key credit support, but at the same time leverage would
remain very high for the rating," S&P said.
"Our rating on KB Home primarily reflects the company's 'highly
leveraged' financial profile. The prolonged housing downturn
substantially reduced KB Home's revenues and negatively affected
profitability and EBITDA-based credit metrics, despite meaningful
debt reduction since the downturn began. Our 'fair' business risk
assessment reflects our view that KB Home's market position in
certain key metropolitan areas and investments in new product and
communities should contribute to modest volume growth in 2012, but
profitability will be elusive in the current fiscal year, which
ends Nov. 30, 2012," S&P said.
"Our negative outlook acknowledges the potential that the
company's recent challenges related to its preferred mortgage
provider transition could weigh on new order activity over the
next couple of quarters and slow operational improvement,
especially key EBITDA-derived credit metrics. We would lower the
rating if KB Home does not maintain an adequate liquidity profile
or if its operating results weaken further. We could return the
outlook to stable if KB Home efficiently transitions to its new
preferred mortgage lender, maintains adequate liquidity, and its
operations stabilize," S&P said.
Ratings List
KB Home
Corp. Credit Rating B/Negative
New Ratings
KB Home
Senior unsecured
$250 million senior notes due 2021 B
Recovery rating 4
LAUREATE EDUCATION: Notes Upsize No Impact on Moody's 'B2' Rating
-----------------------------------------------------------------
Moody's Investors Service commented that the upsizing of Laureate
Education, Inc.'s (B2 stable) senior unsecured notes offering to
$350 million from $300 million is credit neutral and will not
impact the company's credit ratings, including the Caa1 assigned
to the notes, and the stable rating outlook.
Laureate Education, Inc. is based in Baltimore, Maryland, and
operates a leading international network of accredited campus-
based and online universities with more than 50 institutions in 24
countries, offering academic programs to approximately 700,000
students through over 100 campuses and online delivery. Laureate
had revenues of approximately $3.34 billion for the twelve months
ended March 31, 2012.
LIQUID CAPITAL: CFTC to Revoke Registrations Over Ponzi Scheme
--------------------------------------------------------------
The U.S. Commodity Futures Trading Commission filed a notice of
intent to revoke the registrations of Brian Kim and Liquid Capital
Management, LLC. LCM is a registered Commodity Pool Operator and
Commodity Trading Advisor. Kim is registered as an Associated
Person of LCM and is the sole principal of LCM.
The notice, filed on July 24, 2012, alleges that Kim and LCM are
subject to statutory disqualification from CFTC registration based
on a default judgment and permanent injunction entered by the U.S.
District Court for the Southern District of New York on April 15,
2011. That injunction prohibits defendants from committing
further fraud, among other violations. Additionally, the default
judgment includes findings that Kim fraudulently misappropriated
at least $2 million of pool participant funds, fraudulently
solicited prospective pool participants, and made material false
statements to pool participants.
In the default judgment order, Kim and LCM were held liable for
fraud in connection with operating a Ponzi scheme. The court also
ordered that Kim and LCM pay $3,129,161 in restitution to victims
of the fraud and a $9,387,483 civil monetary penalty.
The registration revocation action is further based on Kim's and
LCM's multiple felony convictions in state criminal actions
arising out of the operation of the Ponzi scheme (see People v.
Brian Kim, case No. 05965-2009 (N.Y. Sup. Ct.); People v. Brian
Kim and Liquid Capital Management, LLC, Case No. 00086-2011 (N.Y.
Sup. Ct.) and a federal criminal action against Kim for making a
false statement in a passport application (see United States v.
Kim, 1:11-cr-00642-CM-1 (S.D.N.Y.)).
Kim and LCM each entered guilty pleas in connection with the
various criminal charges against them. Kim was sentenced to
federal and state prison terms totaling more than 16 years.
CFTC Division of Enforcement staff members responsible for this
action are Lara Turcik, Manal M. Sultan, Lenel Hickson Jr.,
Stephen J. Obie, and Vincent A. McGonagle.
LEHMAN BROTHERS: Liquidates Yellowcake Uranium
----------------------------------------------
Lehman Brothers Holdings Inc. recently liquidated 450,000 pounds
of yellowcake uranium, which was acquired as part of a commodities
contract, according to a July 19 report by Financial Post.
The uranium was sold at prices ranging from US$51 to US$65 per
pound, the report said citing Versant Partners analyst Rob Chang
as its source.
Uranium prices fell 60 U.S. cents to US$50.15 in the week ending
July 16, according to Ux Consulting.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. Lehman is set to make its first payment to creditors
under its $65 billion payout plan on April 17, 2012.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LEHMAN BROTHERS: Asian Unit Creditors Get 9% Recovery on Claims
---------------------------------------------------------------
Lehman Brothers Asia Holdings Limited, which is in liquidation,
declared the third and interim dividend to its creditors on
July 13, 2012. The company will pay 9% for ordinary claims.
The company's liquidators are:
Edward Middleton
Patrick Cowley
8th Floor, Prince's Building
10 Chater Road
Central, Hong Kong
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. Lehman is set to make its first payment to creditors
under its $65 billion payout plan on April 17, 2012.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LSP ENERGY: Potential Bidder Objects to $249MM Stalking Horse Deal
------------------------------------------------------------------
Lana Birbrair at Bankruptcy Law360 reports that a potential bidder
objected Tuesday to LSP Energy LP's motion to approve a
$249 million stalking horse bid for its assets, arguing that the
bankrupt power plant operator had engaged in stalking horse
negotiations in violation of the court's approved bidding
procedures.
Bankruptcy Law360 relates that Quantum Utility Generation LLC said
South Mississippi Electric Power Association's $249 million
stalking horse bid for assets primarily including a Mississippi
natural gas-fired generation plant had been obtained through
extensive negotiations that ignored the bankruptcy court's bidding
procedures providing for an auction and sale.
About LSP Energy
LSP Energy Limited Partnership, LSP Energy, Inc., LSP Batesville
Holding, LLC, and LSP Batesville Funding Corporation filed
separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case
No. 12-10460) on Feb. 10, 2012.
LSP owns and operates an electric generation facility located in
Batesville, Mississippi. The Facility consists of three gas-fired
combined cycle electric generators with a total generating
capacity of roughly 837 megawatts and is electrically
interconnected into the Entergy and Tennessee Valley Authority
transmission systems. LSP's principal assets are the Facility and
the 58-acre parcel of real property on which it is located, as
well as its rights under a tolling agreements.
LSP filed bankruptcy to complete an orderly sale of its assets or
the ownership interests of LSP Holding in LSP, LSP Energy and LSP
Funding for the benefit of all stakeholders. The remaining three
Debtors filed bankruptcy due to their relationship as affiliates
of LSP and their ultimate obligations on a significant portion of
LSP's secured bond debt. The Debtors also suffered losses due to
a mechanical failure of a combustion turbine at their facility and
resultant business interruption.
LSP Energy is the general partner of LSP. LSP Holding is the
limited partner of LSP and the 100% equity holder of LSP Energy
and LSP Funding. LSP Funding is a co-obligor on the Debtors' bond
debt, and each of LSP Energy and LSP Holding has pledged their
equity interests in LSP and LSP Funding as collateral for the bond
debt.
No statutorily authorized creditors' committee has yet been
appointed in the Debtors' cases by the United States Trustee.
Judge Mary F. Walrath oversees the case. Lawyers at Whiteford
Taylor & Preston LLC serve as the Debtors' counsel.
MA BB OWEN: Plan Confirmation Hearing Scheduled for Aug. 20
-----------------------------------------------------------
MA-BBO Five, LP, and MA BB Owen, LP., will ask Bankruptcy Judge
Brenda T. Rhoades to confirm at a hearing Aug. 20, 2012, at 10:30
a.m. their Third Amended Plan of Reorganization.
Confirmation objections to the Third Amended Plan dated March 12,
2012, are due Aug. 15, according to the Court's order approving
the disclosure statement. Ballots on the Plan are due Aug. 17.
The United States Trustee on July 17 objected to the Plan, saying
the Debtors are delinquent in the payment of quarterly fees and
the Debtors have failed to make appropriate provision for the
quarterly fees payable under 28 U.S.C. Sec. 1930.
Chapter 11 Plan
According to the Second Amended Disclosure Statement filed
March 12, 2012, the real estate properties of the Debtors were
sold at an auction. As a result, Hillcrest Bank and Heritage Bank
were both paid the amount of their secured claims from the sales
proceeds. Part of the sale involved an agreement that the estate
would receive $125,000 from the sales proceeds. This amount is
being distributed to the creditors pursuant to the Plan.
The classification and treatment of claims under the Plan are:
A. Class 1 (Allowed Administrative Claims) will be paid in
full by the Debtors the later of the Effective Date or
within 10 days of becoming an Allowed Claim. These
claims are priority claims, including claims for Debtors'
attorney's fees and U.S. Trustee's fees.
B. Class 2 (Allowed General Unsecured Non-Insider Claims)
will receive a pro-rata distribution from the funds on
hand after the payment of the Allowed Class 1 Claims.
C. Class 3 (Allowed General Unsecured Insider Claims) will
receive no payment under the Plan.
D. Class 4 (Equity Holders) will be retained on Confirmation.
A full-text copy of the Second Amended Disclosure Statement is
available for free at:
http://bankrupt.com/misc/MA_BB_ds_secondamended.pdf
About MA BB Owen
MA BB Owen LP and MA-BBO Five LP are single-purpose entities
created by Marlin Atlantis, a Dallas, Texas-based commercial real
estate developer. MA BB Owen purchased 1,115 acres of land in the
City of McKinney, Texas, using a $22.8 million loan from Hillcrest
Bank. MA-BBO Five acquired 592 acres of land adjacent to the
property utilizing an $11.07 million loan from Heritage bank.
MA-BBO Five and MA BB Owen filed for Chapter 11 bankruptcy
protection (Bankr. E.D. Tex. Case Nos. 11-40644 and 11-40645) on
Feb. 28, 2011. Joyce W. Lindauer, Esq., serves as bankruptcy
counsel. MA BB estimated its assets at $10 million to $50
million. MA-BBO Five estimated assets of up to $10 million and
liabilities of $50 million to $100 million.
METRO-GOLDWYN-MAYER: Mulls Public Stock Offering
------------------------------------------------
Michelle Kung and Mike Spector, writing for The Wall Street
Journal, report MGM Holdings, Inc., the parent of Metro-Goldwyn-
Mayer, is planning a possible public stock offering. MGM has
filed documents with the Securities and Exchange Commission late
Tuesday. MGM gave neither a timeline nor any terms for the
potential IPO. An MGM spokeswoman declined to comment further.
MGM has hired Goldman Sachs Group Inc. as a lead manager.
According to WSJ, depending on how a public offering is received,
it could be a boon for Anchorage Advisors and other hedge funds
that own MGM, including Highland Capital Management, Davidson
Kempner Capital Management and Solus Alternative Asset Management.
The funds purchased MGM debt at discounts as the studio foundered
in 2009 and 2010, then converted those holdings to ownership
stakes when the company emerged from bankruptcy proceedings.
About Metro-Goldwyn-Mayer Studios
Metro-Goldwyn-Mayer Studios Inc. -- http://www.mgm.com/-- is
actively engaged in the worldwide production and distribution of
motion pictures, television programming, home video, interactive
media, music, and licensed merchandise. The company owns the
world's largest library of modern films, comprising around 4,100
titles. Operating units include Metro-Goldwyn-Mayer Studios Inc.,
Metro-Goldwyn-Mayer Pictures Inc., United Artists Films Inc., MGM
Television Entertainment Inc., MGM Networks Inc., MGM Distribution
Co., MGM International Television Distribution Inc., Metro-
Goldwyn-Mayer Home Entertainment LLC, MGM ON STAGE, MGM Music, MGM
Consumer Products and MGM Interactive. In addition, MGM has
ownership interests in domestic and international TV channels
reaching over 130 countries.
Metro-Goldwyn-Mayer Inc. and 160 of its affiliates on Nov. 3,
2010, filed Chapter 11 cases (Bankr. S.D.N.Y. Lead Case No.
10-15774), to seek confirmation of their "pre-packaged" plan of
reorganization. As of Sept. 30, 2010, the Debtors' unaudited
consolidated financial statements included $2,673,772,000 in total
assets and $3,451,493,000 in total liabilities.
Jay M. Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, served as bankruptcy counsel to the Debtors. Moelis
& Company is the financial advisor. Donlin Recano & Company,
Inc., is the claims and notice agent. CAIR Management, LLC,
Stephen F. Cooper, and Zolfo Cooper Management LLC, provided
management services.
MGM's restructuring became effective in December 2010, with exit
financing of $500 million in place. The "pre-packaged" plan of
reorganization was confirmed Dec. 2, 2010. As part of the
bankruptcy, MGM eliminated $5 billion in debt and converted other
debt into stock. In February 2012, MGM said its lenders helped
retire the old debt that was left and loaned the studio $500
million in a revolving credit facility.
MF GLOBAL: Trustee Considering Suits Against U.K. Staff
-------------------------------------------------------
Jeremy Hodges and Kit Chellel at Bloomberg News report that the
bankruptcy trustee of MF Global Holdings Ltd. is seeking to
interview former London employees of the failed broker as it
considers lawsuits against the U.K. unit and its staff.
According to the report, Louis Freeh, the trustee for MF Global's
parent company in New York, is seeking to recover at least $233
million that was transferred into the U.K. in the days before the
brokerage's collapse, according to papers from a July 20 London
court hearing. Those payments "may give rise to substantial
claims" against the company or employees, Freeh's lawyers said in
the documents.
The report notes that former MF Global Chairman Jon Corzine, and
other executives who oversaw $6.3 billion in trades on European
national debt, may face negligence lawsuits in the U.S. for their
role in the company's downfall, according to a June report by the
separate trustee for the MF Global Inc. brokerage arm. The trades
led to margin calls and credit downgrades before the firm filed
the eighth-largest U.S. bankruptcy in October.
The report relates that lawyers for Mr. Freeh appeared at a London
court hearing on July 20 to seek permission to bring claims in the
U.K., and work out a schedule for litigation. Mr. Freeh is
seeking several hundred million dollars from MF Global UK Ltd. for
internal repurchase agreements used to move money to the U.K. unit
to meet margin calls.
In the summer of 2011, MF Global UK staff told the British
Financial Services Authority they had sufficient liquidity to
meet the margin calls, even though they knew the firm wouldn't
be able to cope with requests for $900 million, Freeh's lawyers
said in court papers.
Freeh has made contact with at least 11 former MF Global UK
employees including its former European treasurer Russell Haley,
his lawyers said in court documents. They haven't co-operated with
requests for interviews.
Duncan Aldred, a lawyer at London firm CMS Cameron McKenna
LLP, is representing former employees of MF Global UK.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
was one of the world's leading brokers of commodities and listed
derivatives. MF Global provided access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
NORTHSTAR AEROSPACE: Wins Court OK to Assets for $70 Million
------------------------------------------------------------
Lance Duroni at Bankruptcy Law360 reports that Northstar Aerospace
USA Inc. and its Canadian parent won court approval on Tuesday to
sell their assets to Illinois-based private equity firm Wynnchurch
Capital Ltd. for $70 million.
At a joint hearing linked by video between Delaware and Toronto,
U.S. Bankruptcy Judge Mary F. Walrath and her counterpart in
Canada, Justice Geoffrey Morawetz of the Ontario Superior Court of
Justice, signed off on the sale despite an objection from Canadian
environmental regulators, Bankruptcy Law360 relates.
About Northstar Aerospace
Chicago, Illinois-based Northstar Aerospace --
http://www.nsaero.com/-- is an independent manufacturer of flight
critical gears and transmissions. With operating subsidiaries in
the United States and Canada, Northstar produces helicopter gears
and transmissions, accessory gearbox assemblies, rotorcraft drive
systems and other machined and fabricated parts. It also provides
maintenance, repair and overhaul of components and transmissions.
Its plants are located in Chicago, Illinois; Phoenix, Arizona and
Milton and Windsor, Ontario. Northstar employs over 700 people
across its operations.
Northstar Aerospace, along with affiliates, filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington,
Delaware, on June 14, 2012, to sell its business to affiliates of
Wynnchurch Capital, Ltd., absent higher and better offers.
Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel
to the Debtors. The Debtors have obtained approval to hire Logan
& Co. Inc. as the claims and notice agent.
Certain Canadian affiliates are also seeking protection pursuant
to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36,
as amended.
As of March 31, 2012, Northstar disclosed total assets of
$165.1 million and total liabilities of $147.1 million.
Approximately 60% of the assets and business are with the U.S.
debtors.
OLSEN AGRICULTURAL: Plan Confirmation Hearing on Aug. 22
--------------------------------------------------------
Olsen Agricultural Enterprises LLC will seek confirmation of its
reorganization plan at a hearing on Aug. 22, at 10:00 a.m., in
bankruptcy court in Eugene, Oregon.
Objections to confirmation and ballots accepting or rejecting the
Plan are due seven days prior to the hearing, according to the
June 28, 2012 order approving the disclosure statement.
Olsen Agricultural amended the prior iteration of the Plan after
the Debtor's members reached a settlement that, among other
things, resolved their dispute over the final allocation and
ownership of the equity ownership interest in the Debtor.
According to the Third Amended Disclosure Statement dated June 25,
2012, secured claims held by Rabo Agrifinance Inc. and West Coast
Bank are impaired under the Plan. Rabo, which provided the Debtor
with DIP and exit financing, will be paid in accordance with a
settlement. Other classes of secured claims are not impaired.
General unsecured creditors will recover under the Plan more than
they would in a Chapter 7 case. Under the Plan, each unsecured
creditor may elect to receive either (i) a one-time cash payment
within 30 days after the Effective Date equal to 50% of the
allowed amount the claim, up to $1,000, or (ii) cash distributions
over a period of up to six years after the Effective Date until
the allowed amount of the claim, together with interest thereon
from and after the Effective Date at the rate of 5% per annum, is
paid in full. Unsecured claims are expected to aggregate $3.25
million.
All legal, equitable and contractual rights of the equity interest
holders with regard to their respective equity interests will
remain unaltered.
A copy of the Disclosure Statement dated June 25, 2012, is
available at http://bankrupt.com/misc/Olsen_Agri_DS_062512.pdf
About Olsen Agricultural Enterprises
Based in Monmouth, Oregon, Olsen Agricultural Enterprises LLC is
the surviving entity of a merger transaction that was consummated
on June 1, 2011. In the merger transaction, Olsen Agricultural
Company, Inc., an Oregon corporation, Jenks-Olsen Land Co., an
Oregon general partnership, Olsen Vineyard Company, LLC, an Oregon
limited liability company and The Olsen Farms Family Limited
Partnership were merged with and into Olsen Agricultural
Enterprises.
Olsen Agricultural Enterprises filed for Chapter 11 bankruptcy
(Bankr. D. Ore. Case No. 11-62723) on June 1, 2011. Judge Frank
R. Alley III presides over the case. Clyde A. Hamstreet &
Associates, LLC, serves as the Debtor's restructuring consultant
and financial advisor. The petition was signed by Robin G. Olsen,
operations director.
An official committee of unsecured creditors has been appointed in
the case.
PEREGRINE FIN'L: Trustee Allowed to Pay for Bond With Firm Funds
----------------------------------------------------------------
Andrew Harris at Bloomberg News reports that Peregrine Financial
Group Inc.'s Chapter 7 bankruptcy trustee won the right to spend
part of the $24 million of the failed firm's money to pay for a
supplemental bond insuring its assets.
According to the report, U.S. Bankruptcy Judge Carol A. Doyle
granted trustee Ira Bodenstein's request at a hearing July 25 in
Chicago. There were no objections.
The report relates that Mr. Bodenstein, in a July 19 filing, told
Judge Doyle the standard $8 million "blanket bond" maintained by
him and his peers in the region covered by the Chicago-based
bankruptcy court may not be sufficient to insure Peregrine's
assets.
"The trustee has determined that acquiring an additional bond is
necessary to sufficiently insure the funds and estate property he
is responsible for," Mr. Bodenstein's lawyers said in the filing.
The attorneys told the Court they have identified about
$24 million in unencumbered "house account" money and asked for
permission to apply it toward the $25,475 annual premium for a
$25 million bond.
Schedules
Carla Main, substituting for Bloomberg bankruptcy columnist Bill
Rochelle, reports that the bankruptcy trustee asked a judge to
give him 43 extra days to report on the defunct futures
brokerage's assets and liabilities. His report would be filed
Sept. 6, ahead of a creditors meeting set for Sept. 10, he said in
a filing in bankruptcy court in Illinois.
About Peregrine Financial
Peregrine Financial Group Inc. on July 10, 2012, filed to
liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D.
Ill. Case No. 12-27488), disclosing between $500 million and
$1 billion of assets, and between $100 million and $500 million of
liabilities.
Earlier on July 10, at the behest of the U.S. Commodity Futures
Trading Commission, a U.S. district judge appointed a receiver and
froze the firm's assets. The firm put itself into bankruptcy
liquidation in Chicago later the same day. The CFTC had sued
Peregrine, saying that more than $200 million of supposedly
segregated customer funds had been "misappropriated." The CFTC
case is U.S. Commodity Futures Trading Commission v. Peregrine
Financial Group Inc., 12-cv-5383, U.S. District Court, Northern
District of Illinois (Chicago).
Peregrine's Chief Executive Russell R. Wasendorf Sr.
unsuccessfully attempted suicide outside a firm office in Cedar
Falls, Iowa, on July 9.
The bankruptcy petition was signed in his place by Russell R.
Wasendorf Jr., the firm's chief operating officer. The resolution
stated that Wasendorf Jr. was given a power of attorney on July 3
to exercise if Wasendorf Sr. became incapacitated.
Peregrine Financial Group Inc. is the regulated unit of the
brokerage PFGBest.
At a quickly convened hearing on July 13, the bankruptcy judge
authorized the Chapter 7 trustee to operate Peregrine's business
on a "limited basis" through Sept. 13.
PEREGRINE FIN'L: CFTC Seeks Advice From Accounting Board
--------------------------------------------------------
Jamila Trindle, writing for Dow Jones Newswires, reports the
Commodity Futures Trading Commission is seeking advice from the
Public Company Accounting Oversight Board after coming under
attack for missing red flags of an alleged 20-year fraud at
Peregrine Financial Group Inc.
According to the report, CFTC Chairman Gary Gensler said at a
House Agriculture Committee hearing Wednesday that the commission
is seeking "insights and expertise." Mr. Gensler said the
commission was considering tightening other rules and that CFTC
staff is reviewing the agency's oversight of industry-funded self-
regulatory organizations that are directly responsible for
auditing firms like Peregrine.
About Peregrine Financial
Peregrine Financial Group Inc. on July 10, 2012, filed to
liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D.
Ill. Case No. 12-27488), disclosing between $500 million and
$1 billion of assets, and between $100 million and $500 million of
liabilities.
Earlier on July 10, at the behest of the U.S. Commodity Futures
Trading Commission, a U.S. district judge appointed a receiver and
froze the firm's assets. The firm put itself into bankruptcy
liquidation in Chicago later the same day. The CFTC had sued
Peregrine, saying that more than $200 million of supposedly
segregated customer funds had been "misappropriated." The CFTC
case is U.S. Commodity Futures Trading Commission v. Peregrine
Financial Group Inc., 12-cv-5383, U.S. District Court, Northern
District of Illinois (Chicago).
Peregrine's Chief Executive Russell R. Wasendorf Sr.
unsuccessfully attempted suicide outside a firm office in Cedar
Falls, Iowa, on July 9.
The bankruptcy petition was signed in his place by Russell R.
Wasendorf Jr., the firm's chief operating officer. The resolution
stated that Wasendorf Jr. was given a power of attorney on July 3
to exercise if Wasendorf Sr. became incapacitated.
Peregrine Financial Group Inc. is the regulated unit of the
brokerage PFGBest.
At a quickly-convened hearing on July 13, the bankruptcy judge
authorized the Chapter 7 trustee to operate Peregrine's business
on a "limited basis" through Sept. 13.
PEREGRINE FIN'L: Bankruptcy Trustee Obtains Role-Clarifying Order
-----------------------------------------------------------------
American Bankruptcy Institute reports that Peregrine Financial
Group Inc.'s bankruptcy trustee obtained a federal court order
clarifying his role in the marshaling of assets belonging to the
collapsed commodity futures.
About Peregrine Financial
Peregrine Financial Group Inc. on July 10, 2012, filed to
liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D.
Ill. Case No. 12-27488), disclosing between $500 million and
$1 billion of assets, and between $100 million and $500 million of
liabilities.
Earlier on July 10, at the behest of the U.S. Commodity Futures
Trading Commission, a U.S. district judge appointed a receiver and
froze the firm's assets. The firm put itself into bankruptcy
liquidation in Chicago later the same day. The CFTC had sued
Peregrine, saying that more than $200 million of supposedly
segregated customer funds had been "misappropriated." The CFTC
case is U.S. Commodity Futures Trading Commission v. Peregrine
Financial Group Inc., 12-cv-5383, U.S. District Court, Northern
District of Illinois (Chicago).
Peregrine's Chief Executive Russell R. Wasendorf Sr.
unsuccessfully attempted suicide outside a firm office in Cedar
Falls, Iowa, on July 9.
The bankruptcy petition was signed in his place by Russell R.
Wasendorf Jr., the firm's chief operating officer. The resolution
stated that Wasendorf Jr. was given a power of attorney on July 3
to exercise if Wasendorf Sr. became incapacitated.
Peregrine Financial Group Inc. is the regulated unit of the
brokerage PFGBest.
At a quickly-convened hearing on July 13, the bankruptcy judge
authorized the Chapter 7 trustee to operate Peregrine's business
on a "limited basis" through Sept. 13.
PEREGRINE FIN'L: Judge Eases Trustee Access to Missing Funds
------------------------------------------------------------
Howard Packowitz and Jacob Bunge at Dow Jones' Daily Bankruptcy
Review report that a federal judge in Chicago granted a motion
Monday that is expected to free up about $24 million in assets
from the bankrupt brokerage firm Peregrine Financial Group Inc.
About Peregrine Financial
Peregrine Financial Group Inc. on July 10, 2012, filed to
liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D.
Ill. Case No. 12-27488), disclosing between $500 million and
$1 billion of assets, and between $100 million and $500 million of
liabilities.
Earlier on July 10, at the behest of the U.S. Commodity Futures
Trading Commission, a U.S. district judge appointed a receiver and
froze the firm's assets. The firm put itself into bankruptcy
liquidation in Chicago later the same day. The CFTC had sued
Peregrine, saying that more than $200 million of supposedly
segregated customer funds had been "misappropriated." The CFTC
case is U.S. Commodity Futures Trading Commission v. Peregrine
Financial Group Inc., 12-cv-5383, U.S. District Court, Northern
District of Illinois (Chicago).
Peregrine's Chief Executive Russell R. Wasendorf Sr.
unsuccessfully attempted suicide outside a firm office in Cedar
Falls, Iowa, on July 9.
The bankruptcy petition was signed in his place by Russell R.
Wasendorf Jr., the firm's chief operating officer. The resolution
stated that Wasendorf Jr. was given a power of attorney on July 3
to exercise if Wasendorf Sr. became incapacitated.
Peregrine Financial Group Inc. is the regulated unit of the
brokerage PFGBest.
At a quickly-convened hearing on July 13, the bankruptcy judge
authorized the Chapter 7 trustee to operate Peregrine's business
on a "limited basis" through Sept. 13.
PINNACLE HOLDCO: $20MM Debt Upsize Does Not Affect S&P's 'B' CCR
----------------------------------------------------------------
Standard & Poor's Ratings Services said Pinnacle Holdco S.a.r.l.'s
announcement about the upsizing of its proposed credit facilities
to $480 million from $460 million does not affect S&P's
preliminary 'B' corporate credit rating on the company or S&P's
preliminary issue-level or recovery ratings previously assigned to
its proposed credit facilities. The company will increase the
amount of the proposed first-lien term loan to $305 million from
$290 million and the proposed second-lien loan to $135 million
from $130 million. The upsizing only modestly increases pro forma
leverage to the low-6x area for 2012, from about 6x.
"The ratings on Pinnacle, parent company of the Paradigm group of
companies, reflect the company's 'weak' business profile,
characterized by its position in a fairly narrow segment of the
exploration and production (E&P) services market as a provider of
software solutions and the 'highly leveraged' nature of its
proposed capital structure. Offsetting some of these factors is
the critical role its products play in the E&P process, a strong
and rising position in its segment, and a highly recurring revenue
base," S&P said.
RATINGS LIST
Pinnacle Holdco S.a.r.l.
Corporate Credit Rating B(prelim)/Stable/--
$305 mil. first-lien term ln B+(prelim)
Recovery Rating 2(prelim)
$135 mil. second-lien term ln CCC+(prelim)
Recovery Rating 6(prelim)
POSTMEDIA NETWORK: Moody's Lowers CFR to 'B3'; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service downgraded Postmedia Network Inc.'s
corporate family rating to B3 from B2 while also downgrading the
company's probability of default rating to B3 from B2 and, as part
of the same rating action, the company's senior secured credit
facility was downgraded to Ba3 from Ba2 and its second lien notes
were downgraded to Caa1 from B3. The company's speculative grade
liquidity rating was downgraded to SGL-3 (adequate) from SGL-2
(good). The rating outlook is stable.
The rating action was prompted by the company's recent
announcement of a significant restructuring, which, in addition to
highlighting the rapid pace of change the company faces as it
transitions to a digital model, also highlights the uncertain
outcome and financial implications of transformation actions. As
the restructuring announcement also indicates reduced cash
generation and higher restructuring expenses, it also points to
potential difficulties in complying with financial covenants
applicable to senior secured credit facilities, and adds another
set of uncertainties to a situation already lacking clarity.
The following summarizes rating action along with Postmedia's
ratings:
Issuer: Postmedia Network Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3 from B2
Outlook, Unchanged at Stable
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Senior Secured Bank Credit Facility, Downgraded to Ba3 (LGD2,
22%) from Ba2 (LGD2, 22%)
Senior Secured Regular Bond/Debenture, Downgraded to Caa1
(LGD5, 71%) from B3 (LGD5, 70%)
Ratings Rationale
Postmedia Network Inc.'s (Postmedia) B3 ratings are influenced
primarily by the significant use of debt financing by a company
that is transforming its operations and by the related material
execution risks and very poor forward-looking earnings visibility.
As the company transitions to a digital age news gathering and
distribution operation, the magnitude and sustainability of
related cash flow is entirely unknown. Reciprocally, the magnitude
and sustainability of legacy print-based cash flow, which is
needed to both bridge-fund the transition and to service debt, is
also quite speculative. Until the business transformation is
completed, the requisite risks argue for minimal debt levels and,
while management has been disciplined in reducing the company's
debt burden, the serviceability of the company's remaining debts
is uncertain. While Moody's assesses near term liquidity as being
adequate, in the event of unforeseen difficulties, Postmedia's $60
million revolving credit facility ($45 million available) may
provide only moderate flexibility to assist with bridging
execution setbacks as it is somewhat small at only 5.0% of
revenues.
Rating Outlook
The rating outlook is stable as a consequence of management's
continued discipline in reducing debt levels and in light of
proactive steps taken to reconfigure the business model given the
ongoing evolution of the company's business environment.
What Could Change the Rating -- Up
A near terms ratings upgrade is not likely, however, should the
conversion to a digital business model be completed and with it,
should revenue and EBITDA stabilize, and should Moody's expects
Debt/EBITDA to be sustained below 3.5x while Free Cash Flow/Debt
exceeds 5%, and presuming maintenance of good liquidity
arrangements, an upgrade would be considered.
What Could Change the Rating -- Down
Over the near term, it is likely that liquidity-related matters
will signal or precipitate downwards rating activities. In this
regard, Moody's would consider Postmedia's ratings for potential
downgrade if the company's safety cushion of unused liquidity was
eroded, likely owing to minimal or negative free cash flow
generation.
The principal methodology used in rating Postmedia Network Inc was
the Global Publishing Industry Methodology published in December
2011. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
PRINCE SPORTS: Gets Final Order to Obtain $2.5MM DIP Financing
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware, in a final
order, authorized Prince Sports, Inc., et al., to:
-- obtain up to $2,500,000 of secured postpetition financing
from ABG-Prince, LLC; and
-- use the cash collateral; and
-- grant the DIP lender first priority security interest in all
of the DIP collateral, and superpriority administrative
expense claim, subject to carve out on certain expenses.
The Debtors would use the money to fund the operation of their
business until Aug. 20, 2012.
The Debtors are indebted not less than $66 million to ABG-Prince,
LLC, as successor-in-interest to General Electric Corporation as
agent, syndication agent and lender and the other lenders from
time to time party thereof.
The DIP Lender and prepetition lender will have the unqualified
ability to credit bid for any assets of the Debtors that are
subject to the DIP liens and prepetition liens, according to the
final DIP order.
A copy of the order is available for free at
http://bankrupt.com/misc/PRINCESPORTS_CC_finalorder.pdf
About Prince Sports
Prince Sports, Inc. and its U.S. affiliates filed voluntary
petitions for Chapter 11 reorganization (Bankr. D. Del. Lead Case
NO. 12-11439) on May 1, 2012, with a Chapter 11 plan that
contemplates the transfer of ownership to Authentic Brands Group
(ABG)-Prince LLC.
Founded in 1970, Prince Sports has a 42-year track record of
developing premium quality products for the racquet sports
industry. The Company pioneered many innovative designs,
including the "oversized" racquet, the "longbody" racquet, and
technology for racquet applications such as Triple Threat, 03 and
EX03. Prince sells its products through brands like "Ektelon,"
which sells racquetball racquets, footwear and gloves and "Viking
Athletics," through which it sells platform tennis paddles, balls
and gloves. Prince is distributed in over 100 countries.
Lincolnshire Management Inc. acquired Prince from Benneton Group,
the parent company of United Colors of Benneton, in 2003.
Lincolnshire Management sold Prince to Nautic Partners in August
2007.
The Debtor has a Chapter 11 plan where (ABG)-Prince LLC, which
acquired the secured debt from GE Capital and Madison Capital,
will be acquiring 100% of the new equity in exchange of the
discharge of the debt.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. The Debtors have also tapped FTI Consultin, Inc., to
provide David J. Woodward as Chief Restructuring Officer, and
provide additional personnel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent.
An official committee of unsecured creditors has been appointed in
the case.
PRINCE SPORTS: Plan Confirmation Hearing Scheduled Tomorrow
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
commence a hearing on July 27, 2012, at 10 a.m., to consider the
confirmation of Prince Sports, Inc., et al.'s Plan of
Reorganization, amended as of June 18, 2012.
As reported in the Troubled Company Reporter on July 2, 2012, the
plan calls for an affiliate of Authentic Brands Group LLC to take
ownership in exchange for $67.2 million in secured debt it
purchased. The plan proposes to give cash and lawsuit recoveries
to unsecured creditors, for an expected recovery of 29% on $13.8
million in claims.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/PRINCESPORTS_ds_2Amended.pdf
About Prince Sports
Prince Sports, Inc. and its U.S. affiliates filed voluntary
petitions for Chapter 11 reorganization (Bankr. D. Del. Lead Case
NO. 12-11439) on May 1, 2012, with a Chapter 11 plan that
contemplates the transfer of ownership to Authentic Brands Group
(ABG)-Prince LLC.
Founded in 1970, Prince Sports has a 42-year track record of
developing premium quality products for the racquet sports
industry. The Company pioneered many innovative designs,
including the "oversized" racquet, the "longbody" racquet, and
technology for racquet applications such as Triple Threat, 03 and
EX03. Prince sells its products through brands like "Ektelon,"
which sells racquetball racquets, footwear and gloves and "Viking
Athletics," through which it sells platform tennis paddles, balls
and gloves. Prince is distributed in over 100 countries.
Lincolnshire Management Inc. acquired Prince from Benneton Group,
the parent company of United Colors of Benneton, in 2003.
Lincolnshire Management sold Prince to Nautic Partners in August
2007.
The Debtor has a Chapter 11 plan where (ABG)-Prince LLC, which
acquired the secured debt from GE Capital and Madison Capital,
will be acquiring 100% of the new equity in exchange of the
discharge of the debt.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. The Debtors have also tapped FTI Consultin, Inc., to
provide David J. Woodward as Chief Restructuring Officer, and
provide additional personnel. Epiq Bankruptcy Solutions LLC is the
claims and notice agent.
An official committee of unsecured creditors has been appointed in
the case.
PRUDENTIAL FINANCIAL: Moody's Affirms '(P)Ba1' Pref. Shelf Rating
-----------------------------------------------------------------
Moody's Investors Service has affirmed the debt ratings of
Prudential Financial, Inc. ("Prudential"; NYSE: PRU, senior debt
at Baa2), and the insurance financial strength (IFS) ratings of
its life insurance operating subsidiaries at A2. A complete list
of affected ratings is given below. The rating outlook on
Prudential and all of its insurance affiliates remains positive.
Rating Rationale
According to Moody's Senior Vice President Scott Robinson, "The
affirmation of Prudential's ratings reflects the company's strong
financial profile, which is driven by the company's positive
earnings momentum, strong statutory capital position, and its
improving financial flexibility." As of December 31, 2011,
Prudential Insurance Company of America ("PICA", IFS A2/positive),
the lead life insurance operating company of Prudential, reported
a very strong NAIC Risk Based Capital ratio of 491%. Commenting on
the positive outlook, Moody's notes that despite current financial
market challenges, Prudential has taken steps to reduce financial
and operational risk within its global organization, including
reducing financial leverage and lowering product risk.
Moody's commented that Prudential's Baa2 senior unsecured debt
rating and the A2 IFS rating of its US life insurance operating
companies are based primarily on the group's strong brand name and
leading market positions for a number of life insurance offerings,
including individual life insurance, variable annuities, group
life, and retirement and stable value products. Prudential's
International Insurance segment, which includes its Japanese
insurance business, has become an important contributor to the
overall earnings for the enterprise. In 2011, the segment's share
of total pre-tax adjusted operating earnings was $2.7 billion, or
50% of the consolidated group. The rating agency also noted that
Prudential continues to have ample liquidity at the holding
company, with over $3.0 billion of net cash (excludes inter-
company liquidity account balances and outstanding commercial
paper) as of March 31, 2012.
These credit strengths are tempered by still high levels of
operating and financial debt, higher than average equity market
sensitivity, a complex capital structure (particularly with
respect to intercompany holdings across affiliates), and modest--
albeit improving--earnings coverage ratios. Sustained improvements
in these areas would likely lead to a reassessment of the rating.
Rating Drivers -- U.S. insurance operating companies
Moody's noted that the following could result in an upgrade to the
insurance operating companies' A2 IFS ratings: 1) GAAP net income
resulting in returns on capital for the U.S. life insurance
operations in the high single digits; 2) total leverage sustained
below 40%; and 3) GAAP earnings coverage above 6 times.
Conversely, the following could result in changing the outlook
back to stable: 1) investment losses of over $500 million are
sustained or are deemed likely to occur over the next 12 months;
2) Total leverage is anticipated to remain above 40%; or 3) GAAP
earnings coverage is not anticipated to be over 6 times.
Rating Drivers - holding company
The rating agency said the following could result in an upgrade to
Prudential's ratings: 1) increase in cash flow diversity available
to the holding company, with ordinary dividends from the company's
non-U.S. life insurance subsidiaries accounting for a
significantly higher percentage of holding company cash flows; and
2) upgrade of PICA or improvement in the credit profile of the
Japanese operations.
Conversely, the following could result in changing Prudential's
outlook back to stable: 1) downgrade of PICA or deterioration in
the credit profile of the Japanese operations; 2) total leverage
is anticipated to remain above 40%; or 3) GAAP earnings coverage
is not anticipated to be over 6 times.
Affirmed with a positive outlook:
Issuer: PRICOA Global Funding I
Senior Secured Medium-Term Note Program Affirmed at (P)A2
Senior Secured Regular Bond/Debenture Affirmed at A2
Issuer: Prudential Financial Capital Trust II
Pref. Stock Shelf Affirmed at (P)Baa3
Issuer: Prudential Financial Capital Trust III
Pref. Stock Shelf Affirmed at (P)Baa3
Issuer: Prudential Financial, Inc.
Issuer Rating Affirmed at Baa2
Junior Subordinated Regular Bond/Debenture Affirmed at
Baa3 (hyb)
Senior Unsecured Shelf Affirmed at (P)Baa2
Subordinate Shelf Affirmed at (P)Baa3
Preferred Shelf Affirmed at (P)Ba1
Senior Unsecured Medium-Term Note Program Affirmed at (P)Baa2
Senior Unsecured Regular Bond/Debenture Affirmed at Baa2
Commercial Paper Affirmed at P-2
Issuer Rating Affirmed at P-2
Issuer: Prudential Funding, LLC
Commercial Paper Affirmed at P-2
Senior Unsecured Commercial Paper Affirmed at P-2
Senior Unsecured Medium-Term Note Program Affirmed at (P)A3
Senior Unsecured Medium-Term Note Program Affirmed at (P)P-2
Senior Unsecured Regular Bond/Debenture Affirmed at A3
Issuer: Prudential Holdings, LLC
Senior Secured Regular Bond/Debenture Affirmed at Baa1
Senior Secured Underlying Regular Bond/Debenture Affirmed at
Baa1
Issuer: Prudential Insurance Company of America
Subordinate Surplus Notes Affirmed at Baa1 (hyb)
Insurance Financial Strength Rating Affirmed at A2
Issuer: Pruco Life Insurance Company
Insurance Financial Strength Rating Affirmed at A2
Issuer: Prudential Retirement Insurance and Annuity Company
Insurance Financial Strength Rating Affirmed at A2
Unaffected ratings:
Issuer: Prudential Holdings, LLC
Backed Senior Secured with a Financial Guaranty Insurance
Policy from Assured Guaranty Municipal Corp
Prudential Financial, Inc. is an insurance and investment
management organization headquartered in Newark, New Jersey. As of
March 31, 2012, the company had total assets of $638 billion and
total shareholders' equity of $35.5 billion.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to pay punctually senior
policyholder claims and obligations.
The principal methodology used in rating Prudential was Moody's
Global Rating Methodology for Life Insurers published in May 2010.
REITTER CORP: Plan Confirmation Hearing on Oct. 2
-------------------------------------------------
Judge Enrique S. Lamoutte Inclan will convene a hearing on Oct. 2
at 10:00 a.m. in Old San Juan, Puerto Rico, to consider
confirmation of the Chapter 11 Plan of Reitter Corp.
The judge entered an order approving the explanatory disclosure
statement on July 12 and said confirmation objections are due 21
days prior to the hearing.
As reported by the Troubled Company Reporter, the Debtor on
March 27 filed an Amended Plan that will prevent the loss of over
300 direct and indirect jobs, and will result in the creation of
additional direct and indirect jobs while it will enable the
Debtor to continue providing healthcare services as successfully
as in the past. The Plan's projected growth includes an increase
in jobs as well as beds.
Under the Second Amended Plan, the Debtor intends to make these
payments to creditors:
1. Payment of all administrative expenses on the later of
the Effective Date and the date the Administrative Claims
become allowed.
2. Secured Creditor Banco Popular Puerto Rico (BPPR) will be
paid by Debtor and its claim treated pursuant to a Plan
Settlement.
3. Priority Secured Creditor will be paid by Debtor in
full within 37 months from the Effective Date, plus
the statutory interest rate.
4. Payment of 100% of all allowed priority tax claims in
monthly payments to be made within the sixth year of the
date of assessment of each particular claim.
5. Payment of 100% of all claims from holders of Executory
contracts that are being assumed by Debtor within 36
months from the Effective Date.
6. Payment of approximately 1% of allowed unsecured claims
in 36 monthly payments, without interest, to begin on the
Effective Date or 30 days after the claim is allowed by a
final order.
The Plan will be funded from the Operating Margin being generated
by the ongoing operation which, since the bankruptcy filing, has
improved to the point where all payroll taxes are being paid on
time, and the operating budget submitted to the bank is running
ahead of projections. Furthermore, capital contributions from
Debtor's shareholders of at least $250,000 annually will be made
during the three years of the plan of reorganization in order to
fund the plan.
The classes and treatment of claims under the plan are:
A. Class I consists of administrative expense claims
amounting to approximately $113,254, will be paid in cash
and in full on the later of the Effective Date or as soon
as feasible after the claim becomes allowed.
B. Class II consists of priority claims totaling $4,756,950
will receive 100% of the allowed amount of the claim in
in monthly payments within the sixth year of the date of
assessment of each claim.
C. Class III consists of The BPPR Allowed Secured Claim in
the total amount of $9,955,887.67, and secured by
substantially all of Debtor's assets, will be paid
pursuant to a settlement agreement.
D. Class IV consists of priority secured claim of the IRS in
the total estimated amount of $959,292 and secured by
Debtor's accounts receivable and equipment, will be paid
in full as per the IRS Plan Settlement.
E. Class V consists of unsecured creditors holders of
executory contracts, which as of the Effective Date will
only include Infomedika with claims totaling
approximately $80,389.96. The Infomedika contract is
being assumed by the Debtor. The claim will be paid
arrears in 36 monthly payments concurrently with their
monthly payment.
F. Class VI consists of unsecured creditors with no
executory contracts and claims totaling approximately
$16,818,996. Unsecured claims will be paid
approximately 1% of their claim in 36 monthly payments
beginning on the Effective Date of the Plan.
G. Class VII consists of interests of common shareholders,
who will retain their interest.
A full text copy of the Second Amended Disclosure Statement is
available for free at:
http://bankrupt.com/misc/REITTER_CORPORATION_ds_2ndamended.pdf
About Reitter Corporation
San Juan, Puerto Rico-based Reitter Corporation dba Hospital San
Gerardo filed for Chapter 11 protection (Bankr. D. P.R. Case No.
10-07152) on Aug. 6, 2010. In its schedules, the Debtor disclosed
US$20,440,765 in total assets and US$17,250,033 in total debts.
Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, in San
Juan, P.R., represents the Debtor as counsel.
RESIDENTIAL CAPITAL: Proposes Bradley Arant as Special Counsel
--------------------------------------------------------------
Residential Capital LLC and its affiliates seek the Bankruptcy
Court's authority to employ Bradley Arant Boult Cummings LLP as
their special litigation and compliance counsel, nunc pro tunc to
May 14, 2012. The Debtors also ask the Court to approve their
alternative billing arrangement with BABC.
Since January 2008, the Debtors have employed BABC to represent
them and/or the investors for which the Debtors provide servicing
or sub-servicing services in approximately 600 open litigation
files related to a variety of causes of action, like claims
asserted under the Truth in Lending Act (TILA), the Home Ownership
and Equity Protection Act (HOEPA), the Fair Debt Collection
Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), the
Real Estate Settlement Procedures Act (RESPA), the Racketeer
Influenced and Corrupt Organizations Act (RICO), and state
deceptive trade practice laws. BABC's representation of the
Debtors has also included matters related to pooling and servicing
agreements, loan repurchase disputes, secondary market
representations and warranties, servicing matters, and settlement
services issues. BABC has further represented the Debtors in
numerous pre-litigation situations with borrowers, state agencies
and consumer advocacy groups and has assisted the Debtors with
numerous non-litigation legal projects related to their daily
mortgage servicing operations, including related regulatory and
compliance matters. In addition, BABC has represented the Debtors
with respect to their duties as servicer to manage, maintain,
dispose of, and pursue claims with respect to various "REO" (real
estate owned) properties upon which the Debtors have foreclosed,
including claims against insurers of the REO properties and claims
involving boundary and lien disputes. Further, on behalf of the
Debtors, BABC has responded to informal and formal inquiries by
state attorneys general (both individual state subpoenas and
multi-state civil investigative demands (CIDs)), the Department of
Justice, the Office of Inspector General of the Department of
Housing and Urban Development (HUD), and the United States
Attorney's office. Finally, BABC has assisted the Debtors in the
negotiation of, and compliance with their obligations under, the
Consent Order, the Consent Judgment, and the Related Agreements.
As Special Litigation and Compliance Counsel to the Debtors, BABC
is expected to continue to:
(a) represent the Debtors and/or the investors for which the
Debtors provide servicing or sub-servicing services in
existing or future litigation concerning claims related to
mortgage loans and related servicing practices brought by
borrower against the Debtors and/or such investors
primarily, but not exclusively, within the jurisdictions
of Alabama, Florida, Kentucky, Mississippi, North
Carolina, Oklahoma, South Carolina, Tennessee, and Texas;
(b) represent the Debtors and/or the investors for which the
Debtors provide servicing or sub-servicing services in
existing or future consumer and class action litigation
relating to the Debtors' mortgage servicing operations;
(c) advise the Debtors regarding the performance and
satisfaction of their obligations under and in compliance
with (i) the Board of Governors of the Federal Reserve
System Consent Order, dated April 13, 2011, by and among
AFI, Ally Bank, Residential Capital, LLC, GMAC Mortgage,
LLC, the Board of Governors of the Federal Reserve System,
and the Federal Deposit Insurance Corporation, (ii) the
consent judgment entered April 5, 2012 by the District
Court for the District of Columbia, dated February 9,
2012, and (iii) all related agreements with the Debtors
and their respective affiliates;
(d) advise the Debtors regarding compliance with various
federal, state, and local laws, statutes, regulations,
orders, and similar restrictions regarding the operation
of the Debtors' businesses and the performance of their
obligations under their servicing, sub-servicing, and
related contracts and agreements;
(e) counsel and otherwise advise and assist the Debtors in the
development, drafting, review, and revision of practices,
policies, and procedures relating to the operation of the
Debtors' businesses; and
(f) counsel and otherwise advise and assist the Debtors with
regard to research and review projects as needed and
directed by the Debtors in furtherance of the Debtors'
ongoing business operations.
With respect to the Prepetition Matters, the Debtors employed BABC
both on an hourly rate basis and pursuant to an alternative
billing arrangement. The Debtors seek to continue postpetition
these same employment and compensation arrangements with BABC.
Some of the material terms of the alternative billing arrangement
between the Debtors and BABC were:
* The Alternative Billing Arrangement extends through
December 31, 2012; provided that either the Debtors or BABC
can terminate the arrangement on 90 day's notice.
* The Debtors agreed to pay BABC $7,300 per matter for all
legal fees and expenses (exclusive of certain expenses),
subject to Safety Valve/Stop Loss adjustments, for all
matters within the scope of the Alternative Billing
Arrangement.
* With respect to any individual matter, if the fees
(exclusive of expenses) incurred by BABC with respect to
any case exceed $18,000 -- the "Safety Valve Level" -- that
case would be removed from the Alternative Billing
Arrangement and would convert to an hourly-rate payment
arrangement, including payment of out of pocket expenses
incurred from and after the month in which the matter
converted to hourly billing. BABC would provide the Debtors
with a list each month of all cases subject to the agreement
in which the legal fees exceeded $7,000.
* BABC agreed to absorb the first $11,000 in fee overages on
each case plus expenses until the month of conversion.
* The Debtors agreed to reimburse BABC for the fees of expert
witnesses engaged on behalf of the Debtors for all cases
within the scope of the agreement.
* BABC submits monthly invoices generally in conformity with
the Debtors' billing policies.
* BABC and the Debtors agreed to hold regular 90-Day Reviews
with administrative staff, joined where appropriate by more
senior legal personnel, to consider all aspects of the
engagement relationship with the view toward improving
efficiency in administrative functions, identifying any
problem areas and discussing mutual outlooks and resource
demands.
The current hourly billing rates for BABC professionals expected
to spend a significant time on the Special Counsel Matters range
from $236 to $603 for partners, $184 to $341 for associates, and
$65 to $150 for paralegals. BABC customarily charges its clients
for reimbursable expenses incurred.
BABC received payment of a $750,000 retainer to cover fees for
future services rendered and costs incurred. The Debtors made
additional retainer payments to BABC in the amounts of $250,000
and $750,000 on March 8, 2012 and May 4, 2012, respectively.
During the 90 days prior to the Petition Date, BABC received in
the ordinary course of business numerous payments from the Debtors
totaling $10,109,383 to pay for services rendered and costs
incurred by BABC on the Debtors' behalf.
On May 14, 2012, BABC applied $1,013,465 of its retainer against
billed but unpaid fees and expenses owed by the Debtors to BABC
and an additional $550,000 to accrued but unbilled amounts of work
in process and unbilled expenses. BABC advised the Debtors that,
upon reconciling the final amount of Prepetition WIP owed to BABC,
BABC would return to its retainer account any funds applied
against Prepetition WIP that were in excess of the final
reconciled Prepetition WIP amount.
As of July 9, 2012, BABC held $292,986 in retainage with respect
to the Debtors' account. The Debtors seek the Court's permission
for BABC to apply a portion of the retainer that BABC received
prior to the Petition Date to its unpaid fees and costs, if any,
and ratification of its prepetition payment of the Prepetition
WIP from the retainer, as well as permission to apply any
remaining portions of the retainer as a credit toward postpetition
fees and expenses relating to the Special Counsel Matters incurred
to date and ongoing, after those postpetition fees and expenses
are approved by the Court.
Robert R. Maddox, Esq., a partner of Bradley Arant Boult Cummings
LLP, assures the Court BABC has no connection with the interested
parties in the Debtors' cases, except as disclosed, and BABC does
not represent or hold any interest adverse to the Debtors or the
Debtors' estates with respect to the Special Counsel Matters.
In his supplemental declaration, Mr. Maddox relates additional
detail regarding the services performed and to be performed by
BABC on the Debtors' behalves has been requested by the United
States Trustee. Specifically, the United States Trustee has
requested that BABC provide additional information about the
manner in which BABC is compensated for its work on the Government
Matters and the types of matters that fall within the Alternative
Billing Arrangement with the Debtors.
Mr. Maddox also responded to an objection filed by Patrick Hopper,
currently a pro se defendant in a litigious foreclosure action
initiated by GMAC Mortgage, LLC, in Florida in December 2009, in
which GMACM is represented by BABC. Mr. Hopper has filed several
affirmative defenses and counterclaims in the Foreclosure
Proceeding. Mr. Maddox notes the Hopper Objection arises out of
the Foreclosure Proceeding. Because Mr. Hopper does not agree
with the propositions advocated on GMACM's behalf by BABC in the
Foreclosure Proceeding, Mr. Hopper asserts that BABC has taken
"inaccurate, false and misleading statements and discovery."
Despite these allegations, Mr. Hopper has not filed any requests
for sanctions in the Foreclosure Proceeding. Contrary to his
assertions, BABC has not engaged in any misconduct in the
Foreclosure Proceeding and has represented the Debtors ethically
in that matter. As counsel for the Debtors, BABC believes that it
is not warranted to require BABC, as requested by Mr. Hopper, to
provide sworn statements verifying the compliance and accuracy of
documents filed on the Debtors' behalf in cases where they are
represented by BABC.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Proposes Severson as Calif. Litigation Atty.
----------------------------------------------------------------
Residential Capital LLC and its affiliates seek the Bankruptcy
Court's authority to employ Severson & Werson PC as their Special
California Litigation Counsel, nunc pro tunc to May 14, 2012.
The Debtors want Severson & Werson to continue providing legal
services in connection with, inter alia, (a) defending claims
brought in California by individual borrowers pertaining to
consumer lending issues, (b) defending class action claims
regarding consumer lending issues, and (c) defending claims in
California bankruptcy courts with respect to consumer lending
issues brought by individual borrowers in their respective
bankruptcy cases.
Severson & Werson will coordinate with Morrison & Foerster so that
the services provided by both Severson & Werson and Morrison &
Foerster are complimentary of each other and not duplicative.
Specifically, the firm is expected to:
(a) defend claims brought in California by individual
borrowers pertaining to consumer lending issues,
including, but not limited to, allegations of wrongful
foreclosure, irregularities in the foreclosure process,
violation of applicable statutes related to pre-
foreclosure requirements, breach of alleged oral
modification, breach of promises to forebear from
foreclosing, quiet title and partition actions, unfair
business practices act claims and other mortgage lending
issues;
(b) defend class action claims regarding alleging
improprieties with loan origination and/or servicing;
(c) defend mass tort actions and qui tam actions raising
document recording issues and relating to the utilization
of Mortgage Electronic Registration Systems services;
(d) defend claims objections, contested relief from stay
motions and adversary proceedings related to consumer
lending issues brought by individual borrowers in their
respective bankruptcy cases pending in California; and
(e) provide any other services as mutually agreed upon by the
Debtors and Severson & Werson.
The hourly billing rates approved by the Debtors for Severson &
Werson professionals expected to spend significant time on these
cases range from $340 to $480 for members and special counsel,
$250 to $350 for associates, and $150 for paralegals. In
addition to the hourly billing rates set forth herein, Severson &
Werson customarily charges its clients for all reimbursable
expenses incurred.
As of the Petition Date, Severson & Werson holds a prepetition
claim for $212,052 for services rendered to the Debtors. The
Debtors believe that holding such a claim does not create an
interest materially adverse to the Debtors, their creditors, or
other parties-in-interest on the matters for which Severson &
Werson would be employed and is not disqualifying under section
327(e) of the Bankruptcy Code.
Mary Kate Sullivan, Esq., a member of Severson & Werson PC,
assures the Court that except as disclosed in her declaration,
Severson & Werson does not represent or hold any interest adverse
to the Debtors or the Debtors' estates with respect to the
matters on which Severson & Werson is to be employed in the
Debtors' Chapter 11 cases. Ms. Sullivan filed a supplemental
declaration pointing out that her firm has not represented
potential parties-in-interest in matters related to the Debtors'
bankruptcy cases.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Proposes Fortace LLC as RMBS Consultant
------------------------------------------------------------
Residentail Capital LLC and its affiliates seek the Court's
authority to employ Fortace LLC as a consultant and possible
expert witness, nunc pro tunc to May 21, 2012.
Fortace will provide these consulting services and possible expert
witness services to Morrison & Foerster LLP, for the benefit of
the Debtors:
(a) Develop an expert report and opinion with respect to the
RMBS Settlement and related Plan Support Agreements
entered into on May 13, 2012 with a group of residential
mortgage-backed securities institutional investors and the
reasonableness of the corresponding settlement amount; and
(b) Provide other expert related testimony, consulting or
advisory services as requested by M&F on behalf of the
Debtors.
Fortace proposes to charge the Debtors these hourly rates:
Expert Report Deposition & Court
& Consulting Testimony Hourly Rates
Personnel Category Hourly Rates (4 hour minimum)
------------------ ------------- ----------------------
Administrative Analyst $75 N/A
Document Specialist $65 N/A
Document Supervisor $95 N/A
Business Analyst $150 N/A
Subject Matter Expert $200 $275
Senior Manager $250 $325
Project Manager $325 $395
Partner $395 $475
Frank Sillman, a co-founder and managing partner of Fortace LLC,
believes that Fortace is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code, as modified by
Section 1107(b) of the Bankruptcy Code. Mr. Sillman filed a
supplemental affidavit disclosing additional parties-in-interest
and reiterating that his firm does not anticipate its
representation of the Debtors will require it to be adverse to
its other clients.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Taps Mercer as Compensation Consultant
-----------------------------------------------------------
Residential Capital LLC and its affiliates sought and obtained the
Court's authority to employ Mercer (US) Inc. as compensation
consultant, nunc pro tunc to the Petition Date, to assist the
Debtors with the assessment of any employee incentive and
retention plans to be proposed in the Chapter 11 cases.
The Debtors will pay Mercer for its services on an hourly basis:
$50 to $150 for research, $150 to $300 for analysts, $250 to $400
for associate, $350 to $550 for senior associate, $500 to $700
for principal, and $700 to $950 for partner. The firm will also
be reimbursed for any necessary out-of-pocket expenses. The
Debtors have also agreed to indemnify and reimburse Mercer in
certain discrete circumstances.
John Dempsey, a partner at Mercer (US) Inc., assured the Court
that his firm is a "disinterested person" as the term is defined
under Section 101(14) of the Bankruptcy Code, as modified by
Section 1107(b) of the Bankruptcy Code, and does not represent
any interest adverse to the Debtors and their estates. Mr.
Dempsey also disclosed that prior to the Petition Date, the
Debtors paid Mercer $51,000. As of the Petition Date, Mercer
held a prepetition claim against the Debtors in the amount of
$23,381 for fees and expenses. Mercer said it has agreed to
waive its prepetition claim against the Debtors in connection
with its retention.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RESIDENTIAL CAPITAL: Spars With Creditors Over Deal Deadline
------------------------------------------------------------
Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that
Residential Capital LLC on Tuesday sparred with creditors over a
proposed $8.7 billion settlement with mortgage securities
investors, with some creditors arguing the company has proposed
too quick a timetable for them to analyze the offer.
About Residential Capital
Residential Capital LLC, the unprofitable mortgage subsidiary of
Ally Financial Inc., filed for bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012.
Neither Ally Financial nor Ally Bank is included in the bankruptcy
filings.
ResCap, one of the country's largest mortgage originators and
servicers, was sent to Chapter 11 with 50 subsidiaries amid
"continuing industry challenges, rising litigation costs and
claims, and regulatory uncertainty," according to a company
statement.
ResCap disclosed $15.68 billion in assets and $15.28 billion in
liabilities as of March 31, 2012.
ResCap is selling its mortgage origination and servicing
businesses to Nationstar Mortgage LLC, and its legacy portfolio,
consisting mainly of mortgage loans and other residual financial
assets, to Ally Financial. Together, the asset sales are expected
to generate approximately $4 billion in proceeds.
Centerview Partners LLC and FTI Consulting are acting as financial
advisers to ResCap. Morrison & Foerster LLP is acting as legal
adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is
the conflicts counsel. Rubenstein Associates, Inc., is the public
relations consultants to the Company in the Chapter 11 case.
Morrison Cohen LLP is advising ResCap's independent directors.
Kurtzman Carson Consultants LLP is the claims and notice agent.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves
as counsel to Ally Financial.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RG STEEL: Court Approves Management Incentive Plan
--------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
WP Steel Venture LLC, et al., to adopt and implement a Management
Incentive Plan; and make payments consistent with the MIP.
As reported in the Troubled Company Reporter on July 20, 2012, the
MIP, as amended, will reward executives based on the revenue
realized from the sale of the company's assets, but only those
that are sold as going concerns.
The Court also ordered that the authorization granted to make
payments to the key managers under the MIP will not create any
obligation on the part of the Debtors of the DIP lenders or their
respective officers, directors, attorneys or agent to make
payments under the MIP and none of these persons will have any
liability on account of any decision by the Debtors not to honor
the MIP.
Additionally, the Court said that no funds will be deposited into
the bonus pool until any and all principal, interest, fees, costs,
expenses and other amount due and owing under the ratification
agreement and senior credit agreement have been paid in full in
cash or otherwise satisfied in a manner satisfactory to the
agents.
The junior lender bonus pool will be remitted to the bonus pool
contemporaneously with the distribution of any proceeds to the
junior lenders on account of the junior lenders' claim under the
junior credit agreement.
The Renco Group, Inc., Bonus Pool Amount will be remitted to the
bonus pool contemporaneously with the distribution of any proceeds
to the Renco account of Renco's claims under the Renco
Subordinated Notes.
A copy of the MIP is available for free at
http://bankrupt.com/misc/RGSTEEL_incentivepay_amended.pdf
The TCR also reported that Judge Kevin J. Carey signed off on the
amended incentive plan, which the Debtors submitted after both the
U.S. Trustee and the official committee of unsecured creditors
objected to the plan as originally proposed June 26.
Previously, Wells Fargo Capital Finance, LLC, as administrative
and co-collateral agent to the Debtor-In-Possession lenders, filed
with the Court a limited objection to the Debtors' motion for
authority to pay incentive to key members of management.
According to Wells Fargo, the incentive compensation Plan provides
that no funds will be deposited into the bonus pool until all
amounts owed to the lending group are paid in full in cash. While
the motion and proposed order indicate that the Debtors intend to
repay the lending group in full prior to funding the bonus pool,
Wells Fargo requests that any order approving the incentive
compensation plan (i) provide for the payment in full of all
amount owed to Wells Fargo and other members of the lending group
in accordance with the terms of the loan documents and final DIP
order prior to the funding of the bonus pool; and (ii) provide
that the lending group will in no way be obligated to fund or
otherwise contribute to the bonus pool.
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owns Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-
11661) on May 31, 2012, to pursue a sale of the business. The
bankruptcy was precipitated by liquidity shortfall and a dispute
with Mountain State Carbon, LLC, and a Severstal affiliate, that
restricted the shipment of coke used in the steel production
process.
The Debtors estimated assets and debts in excess of $1 billion as
of the Chapter 11 filing. The Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors.
Conway MacKenzie, Inc., serves as the Debtors' financial advisor
and The Seaport Group serves as lead investment banker. Donald
MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson
Consultants LLC is the claims and notice agent.
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
An official committee of unsecured creditors has been appointed in
the case. Kramer Levin Naftalis & Frankel LLP represents the
Committee. Huron Consulting Services LLC serves as its financial
advisor.
RICHARD ROSS: Non-Debtor Wife Can't Avoid Transfer of Interest
--------------------------------------------------------------
Bankruptcy Judge S. Martin Teel, Jr., ruled that a debtor may
avoid the transfer of his interest in tenants by the entirety
property, but left intact his wife's transfer of her interest.
Richard Ross, Plaintiff, v. State of Maryland, Department of
Business and Economic Development, Defendant, Adv. Proc. No.
11-10060 (D.D.C), seeks to set aside a deed of trust against a
District of Columbia real property, known as Swann House, owned by
him and his wife, Mary Ross, as tenants by the entirety. In 2009,
the Rosses personally guaranteed the debt owed to the Department
by a related entity, Milestone Tarant, LLC. The deed of trust
executed by the Rosses secured payment of that joint liability.
Mr. Ross's bankruptcy case ensued in 2011.
At the pretrial conference of July 3, 2012, the Department
conceded that Mr. Ross had shown that his transfer, pursuant to
the deed of trust, of his interest in Swann House was an avoidable
preference under 11 U.S.C. Sec. 547(b), and that the Department
was unable to produce evidence at this juncture to rebut that
showing.
The Department contends that Mr. Ross is guilty of unclean hands
because the delay in the recording of the Department's deed of
trust was procured by and at the request of Mr. Ross. The Court,
however, said the doctrine of "unclean hands" is no defense to a
preference action.
A copy of the Court's July 23, 2012 Memorandum Decision is
available at http://is.gd/4l0TOhfrom Leagle.com.
Richard Ross filed for Chapter 11 bankruptcy (Bankr. D.D.C. Case
No. 11-00757) on Oct. 11, 2011.
RIVER CANYON: Wants to Employ Dennis Hogan as Accountant
--------------------------------------------------------
River Canyon Real Estate Investments, LLC, asks the Bankruptcy
Court for permission to employ Dennis Hogan & Associates P.C. as
accountants nunc pro tunc May 23, 2012.
The Debtor desires to employ DHA as accountants in this bankruptcy
case to assist the Debtor in preparing tax returns and tax-related
documents and schedules, and to assist the Debtor in general
accounting and tax matters including the preparation of monthly
operating reports. The Debtor has selected DHA by reason of its
expertise and experience in tax preparation and accounting matters
and believes that DHA is well qualified to assist the Debtor.
Since 2001, DHA has provided accounting services to the Debtor.
DHA will bill the Debtor on an hourly basis. Mr. Hogan is the
individual likely to perform the services on behalf of the Debtor,
and Mr. Hogan's hourly rate is $185. Other employees of DHA who
may provide services to the Debtor currently bill at the hourly
rate range of $55 to $160.
River Canyon Real Estate Investments, LLC, is the developer of the
Ravenna residential real estate project in Douglas County,
Colorado and the owner of The Golf Club at Ravenna, among other
assets.
River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No.
12-20763) on May 23, 2012, in Denver as part of its settlement
negotiations with lender Beal Bank Nevada, and to preserve the
value of its assets.
At the behest of Beal Bank, Cordes & Company was named, effective
Oct. 15, 2010, as receiver for the 643-acre real estate
development with golf course in Douglas County, Colorado.
The Debtor disclosed assets of $19.7 million and liabilities of
$45.3 million in its schedules. The property and golf course are
estimated to be worth $11 million, and secures a $45 million debt.
Judge Elizabeth E. Brown presides over the case. The Debtor is
represented by Sender & Wasserman, P.C., as its Chapter 11
counsel.
Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of
the Debtor. Mr. Jacks, which has a 12.8% membership interest,
signed the Chapter 11 petition.
ROOMSTORE INC: Judge Converts Case to Chapter 7
-----------------------------------------------
Larry Thomas at Furniture Today reports that Judge Douglas Tice
has agreed to convert the Chapter 11 bankruptcy case of RoomStore
Inc. to a Chapter 7 liquidation.
According to the report, a trustee will soon be appointed to
oversee the sale of the company's remaining assets -- primarily
its 65% stake in bedding retailer Mattress Discounters and a
distribution center in Rocky Mount, N.C.
The report says the decision capped a struggle between RoomStore
Inc. and its unsecured creditors committee that had become
increasingly contentious in recent weeks as the two parties traded
accusations of mismanagement in a series of court documents.
The report notes RoomStore had asked Judge Tice to convert the
case to Chapter 7, but the committee filed a motion to keep the
case in Chapter 11 while appointing a trustee to oversee the wind-
down of operations. The committee accused the RoomStore board of
gross mismanagement that led to "complete and utter financial
ruin" while attempting to reorganize under bankruptcy protection.
The report adds the committee's 81-page motion says RoomStore,
among other things, failed to pay $2 million in sales taxes
collected during various going-out-of-business sales; didn't
comply with a court order to sell its 65% stake on bedding
retailer Mattress Discounters; allowed stores to accept payments
from consumers knowing the merchandise would never be delivered;
and burned through $10 million in operating funds while "wildly
missing sales and cash forecasts."
According to the report, the committee also claimed that board
chairman Steven Gidumal secretly offered Mattress Discounters CEO
Ray Bojanowski $2 million for his 35% stake in the retailer.
The report, citing court documents, says RoomStore denied the
committee's allegations and argued that converting the case to
Chapter 7 would give the company more leverage against Salus
Capital Partners, which recently terminated the company's debtor-
in-possession financing and is threatening to take possession of
what's left of RoomStore's assets.
The report notes RoomStore also accuses Salus and the creditors
committee of trying to sell the Mattress Discounters stake "behind
the back of the Debtor while withholding approval . . . to hire an
investment banker to properly market and sell the (Mattress
Discounters) interest."
The report notes RoomStore said in a court filing Salus took the
money set aside for sales taxes and applied it to the balance due
on the DIP loan. Salus then refused RoomStore's request to return
the money so taxes could be paid.
The report says RoomStore contended that financial advisors to the
creditors committee played a critical role in formulating an
advertising and marketing plan for February and March that
"ultimately turned out not to be successful." "The committee
insisted (the financial advisors) be involved, but has never taken
any responsibility for the poor media plan," the report quotes the
company as saying.
About RoomStore Inc.
With more than $300 million in net sales for its fiscal year
ending 2010, Richmond, Virginia-based RoomStore, Inc., was one of
the 30 largest furniture retailers in the United States.
RoomStore also offers its home furnishings through Furniture.com,
a provider of Internet-based sales opportunities for regional
furniture retailers.
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. At the time of the filing, 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 80 mattress stores (as of Nov. 30, 2011) in the states of
Delaware, Maryland and Virginia and in the District of Columbia.
RoomStore acquired the MDG stake after MDG's second bankruptcy in
2008. MDG 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 serve as the Debtor's bankruptcy
counsel. Kaplan & Frank, PLC, serves as local counsel. FTI
Consulting, Inc., serves as the Debtor's financial advisors and
consultants. American Legal Claims Services, LLC, serves as its
notice and claims agent. Lucy L. Thomson of Alexandria, Virginia,
was appointed as consumer privacy ombudsman.
RoomStore filed a plan of liquidation in June 2012 that provides
for the sale of inventory and remaining assets to generate
sufficient cash to pay secured and unsecured creditors in full.
RoomStore's balance sheet at Nov. 30, 2011, showed $59.57 million
in total assets, $57.75 million in total liabilities, and
stockholders' equity of $1.82 million. The Debtor disclosed
$44,624,007 in assets and $34,746,919 in liabilities as of the
Chapter 11 filing. 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. The Creditors
Committee tapped Hunton & Williams LLP as its counsel.
SAVIENT PHARMACEUTICALS: No Default Under Conv. Notes, Court Rules
------------------------------------------------------------------
Savient Pharmaceuticals, Inc. disclosed that the Delaware Court of
Chancery has issued a bench ruling granting both of Savient's
motions in the lawsuit brought against the Company by Tang Capital
Partners, LP and certain other holders of Savient's convertible
notes.
The Court of Chancery decided that the plaintiff noteholders do
not have standing to bring an action to appoint a receiver for
Savient and that an event of default has not occurred under
Savient's convertible notes. The Court has not yet come to a
conclusion on the plaintiff's claims for breach of fiduciary duty
and waste. Savient continues to believe that all outstanding
claims alleged by the plaintiffs are without merit, and intends to
vigorously defend this lawsuit to its completion. The Court of
Chancery's decision is subject to appeal by the plaintiffs. In
addition, Savient's claim for damages against Tang Capital remains
outstanding.
About Savient Pharmaceuticals
Savient Pharmaceuticals, Inc. -- http://www.savient.com/-- is a
specialty biopharmaceutical company focused on developing and
commercializing KRYSTEXXA(R) (pegloticase) for the treatment of
chronic gout in adult patients refractory to conventional therapy.
Savient has exclusively licensed worldwide rights to the
technology related to KRYSTEXXA and its uses from Duke University
and Mountain View Pharmaceuticals, Inc.
On May 1, 2012, San Diego-based Tang Capital Partners LP sued the
drugmaker's board in Delaware Chancery Court to get a receiver to
liquidate the company's assets, and other creditors soon joined in
the complaint. They allege Savient management is burning through
cash at an alarming rate.
SINCLAIR BROADCAST: Station Acquisition Won't Hit Moody's Rating
---------------------------------------------------------------
Moody's Investors Service stated that Sinclair Broadcast Group,
Inc. announced on July 19, 2012 that it's agreement to purchase
the broadcast assets of six television stations and the rights for
two LMA's collectively owned or operated by Newport Television for
$412.5 million. There is no immediate impact to ratings nor the
stable outlook as Moody's expects overall financial metrics and
operating performance to remain within the Ba3 category for the
Corporate Family Rating. Moody's projects
2-year average debt-to-EBITDA ratios to be sustained below Moody's
downgrade trigger of 5.50x (including Moody's standard
adjustments) pro forma for this transaction and prior acquisitions
which closed earlier this year.
The eight stations from Newport consist of two CBS affiliates, two
NBC, plus one each of FOX, CW, MyTV, and an independent in markets
ranked #35 to #67 with some overlap with Sinclair's existing
footprint. The transaction is subject to FCC approval as well as
antitrust clearance and is expected to close at the end of 4th
quarter 2012 or the beginning of 1st quarter 2013. The purchase
price reflects an estimated 9.75x EBITDA multiple (blended
odd/even year) for Newport and a preliminary 7.2x buyer EBITDA
multiple (blended odd/even year) for Sinclair incorporating
planned operating synergies. Management indicated that funding for
this transaction would come from a minimum of $41.2 million in
cash for the upfront deposit and up to $370 million from the
issuance of new debt facilities. This transaction represents
Sinclair's third largely debt-financed acquisition this year
following the purchase of Freedom Communications stations in April
2012 and Four Points Media in January 2012. The three acquisitions
expand Sinclair's footprint to an estimated 27.3% of US households
and bring geographic diversification within the company's focus on
mid-sized markets. In addition, the purchases provide an improved
mix of network affiliations given the continuing addition of non-
Fox affiliates to the company's station portfolio. Moody's notes
that financing for each of these transactions results in debt-to-
EBITDA ratios remaining below 5.75x, consistent with management's
stated intent to avoid increasing leverage ratios more than 0.5x,
pro forma for planned synergies, when making an acquisition. At
March 31, 2012, Sinclair's debt-to-EBITDA ratio was just under
5.0x on a trailing 8 quarter basis (including Moody's standard
adjustments and prior to this Newport transaction).
Other Recent Events
On July 17, 2012, Sinclair entered into an agreement to purchase
the assets of Bay Television, Inc., which owns WTTA-TV (MyTV) in
the Tampa/St. Petersburg, FL market, for $40 million, or less than
a 7x buyer multiple. Bay Television, Inc. is majority owned by the
Smith family and required a fairness opinion. The transaction is
expected to be funded with cash, supplemented with revolver
advances if needed, and is likely to close in the fourth quarter
of 2012, subject to FCC approval.
Sinclair Broadcast Group, Inc., headquartered in Hunt Valley, MD,
and founded in 1986, is a television broadcaster, currently
operating 74 stations in 45 markets primarily through Sinclair
Television Group, Inc. The station group reaches 26.3% of U.S.
television households and includes FOX, ABC, MyTV, CW, CBS, NBC,
and Azteca affiliates.
SHAMROCK-SHAMROCK: Wins Plan Confirmation After PNC Deal Reached
----------------------------------------------------------------
A bankruptcy judge in Orlando this month signed an order
confirming the Chapter 11 Plan of Reorganization of Shamrock-
Shamrock Inc.
At the confirmation hearing on April 2, 2012, secured creditor PNC
Bank, N.A. and the Debtor announced a settlement of confirmation
and other issues between them. As of the ballot deadline, there
were insufficient votes from unsecured creditors to have the class
vote in favor of the Plan, however, sufficient votes were obtained
after PNC's negative vote was changed to a positive vote. PNC
Bank is the largest unsecured creditor of the Debtor. Based on
the value of PNC's collateral, PNC's under-secured debt is $1.72
million.
PNC Bank had complained that with respect to its secured claim,
interest at only 4.5% per annum for an extended term of 30 years
is not reasonable given the Debtor's past performance and lack of
creditworthiness. The bank also noted that the Plan violates the
absolute priority rule -- the existing equity owner has not
contributed additional capital to the Debtor, or in connection
with the proposed Plan to justify the existing equity owner
continuing to own the reorganized Debtor when the PNC classes of
creditors, who are superior classes of creditors, are not being
paid in full.
SunTrust Mortgage, Inc., holder of a secured claim, also filed an
objection, saying that the 4.5% interest rate is not fair and
equitable.
The settlement agreement with PNC Bank provides that:
1. With respect to properties identified in Classes 7 through
17, the stipulated value of each property will be the amount
of PNC's secured claim on that property, and with regard to
the Nova properties identified in Classes 18 to 26, the note
and documents related to the Nova properties will be
modified to have a principal balance of $1.779 million.
With respect to Classes 2 through 17, PNC will be paid 23
consecutive, equal monthly payments of principal and
interest based on a 10 year amortization. For the Nova
properties, Shamrock will pay PNC 23 consecutive, equal
monthly payments of accrued interest only on the amount of
PNC's allowed claim at the Daily LIBOR Rate plus 300 basis
points, provided that interest rate will never be less than
5% per annum.
2. PNC's allowed, unsecured claim will be $1.88 million and PNC
will receive a pro rata distribution along with other
general unsecured claims at a rate no less than the
percentage paid other general unsecured claims.
3. PNC has agreed to reduce the amount which Shamrock owes
under the final judgment of foreclosure to $638,600
effective as of the effective Date of the Plan. The reduced
judgment amount will accrue interest at 6.25%.
4. Shamrock has agreed to repay PNC the sum of $68,616 which is
the amount of money PNC advanced under its loan documents to
pay delinquent real estate taxes subject to the final
judgment.
About Shamrock-Shamrock Inc.
Based in Daytona Beach, Florida Shamrock-Shamrock Inc. owns
70 parcels of Florida real property. It filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011.
Judge Arthur B. Briskman presides over the case. The Law Offices
of Mickler & Mickler serves as bankruptcy counsel. The Debtor
tapped George Gingo, Esq., to represent the Debtor in certain
claims litigation proceedings; Stephen R. Ponder to represent the
Debtor in certain state court litigation proceedings, and Marshall
J. Gilmore, Esq., to represent in certain state court litigation
proceedings.
The Debtor disclosed in its amended schedules $12,904,154 in
assets and $17,036,102 in liabilities. In the original schedules,
the Company disclosed assets of $12,904,154 and liabilities of
$17,021,201, owing on mortgages to a variety of lenders.
SHUBH HOTELS PITTSBURGH: Loan Advances Recharacterized as Equity
----------------------------------------------------------------
Bankruptcy Judge Jeffery A. Deller rejected Shubh Hotels, LLC's
$15,227,670 general unsecured claim against Shubh Hotels
Pittsburgh, LLC, saying Shubh Hotels's loan advances to the Debtor
are actually equity contributions. The Court denied Shubh Hotels'
request for trial and granted summary judgment on the claim
objection filed by Dr. Kiran C. Patel and Pittsburgh Grand, LLC.
Shubh Hotels is a limited liability company that at the direction
of its sole managing member, Atul Bisaria, transferred funds
between various hotel entities in which Mr. Bisaria maintained an
interest. Mr. Bisaria had full authority to act on behalf of
Shubh Hotels and was the decision maker for Shubh Hotels
Pittsburgh. The Debtor is a limited liability company consisting
of two members: Shubh Hotels Pittsburgh Investments, LLC and Shubh
Hotels Pittsburgh Acquisitions, LLC that formerly operated the
Pittsburgh Hilton Hotel at 600 Commonwealth Place, Pittsburgh,
Pennsylvania.
Dr. Kiran C. Patel and Pittsburgh Grand filed a Modified Second
Amended Chapter 11 Plan and a Modified Second Amended Disclosure
Statement Dated April 6, 2011. On April 22, 2011, the Plan
Proponents objected to the Claim, arguing that to the extent the
funds were transferred from Shubh Hotels to the Debtor, they
constituted equity contributions and not loans. The Official
Committee of Unsecured Creditors of Shubh Hotels Pittsburgh joined
in the Plan Proponents' objection to the Claim for the limited
purpose of preventing Shubh Hotels from voting on the proposed
plan.
On May 4, 2011, Shubh Hotels filed a motion seeking temporary
allowance of its Claim for voting purposes only. Following a
hearing held May 12, the Court denied the motion. The Court
entered an order confirming the plan on May 20. The Plan became
effective June 9, 2011. A Creditor Trust was created that
appointed Meridian Financial Advisors, Ltd. as trustee. The
Creditor Trust filed a supplemental objection to the Claim
asserting that as the possible recipient of fraudulent transfers
or recoverable property, Shubh Hotels' claim should be denied
pursuant to 11 U.S.C. Sec. 502(d).
The case is DR. KIRAN C. PATEL, PITTSBURGH GRAND, LLC and MERIDIAN
FINANCIAL ADVISORS, LTD, Trustee of the Shubh Hotel Creditor
Trust, Objectors, v. SHUBH HOTELS, LLC, Claimant, Bankruptcy No.
10-26337JAD (Bankr. W.D. Pa.). A copy of the Court's July 24,
2012 Memorandum Opinion is available at http://is.gd/M4XqMkfrom
Leagle.com.
About Shubh Hotels Pittsburgh
Boca Raton, Florida-based Shubh Hotels Pittsburgh, LLC, owns and
operates the largest hotel in the city of Pittsburgh. For roughly
50 years, the Hotel operated as a Hilton franchise. Hilton
terminated the Hilton Franchise Agreement by letter dated Sept. 1,
2010.
Shubh Hotels Pittsburgh filed for Chapter 11 bankruptcy (Bankr.
W.D. Pa. Case No. 10-26337) on Sept. 7, 2010, Judge Jeffery A.
Deller presiding. The Debtor estimated assets of $10 million to
$50 million and debts of $50 million to $100 million.
David K. Rudov, Esq., at Rudov & Stein; and Scott M. Hare, Esq.,
served as the Debtor's bankruptcy counsel. James R. Walsh was
appointed as Chapter 11 Trustee on Feb. 7, 2011, and was
represented by lawyers at his firm, Spence, Custer, Saylor, Wolfe
& Rose.
An Official Committee of Unsecured Creditors was appointed in the
case, represented by The Law Office of Christopher A. Boyer and
David W. Lampl, Esq. and John M. Steiner, Esq., at Leech Tishman
Fuscaldo & Lampl LLC. The Committee retained Meridian Financial
Advisors, Ltd., as its financial advisors.
SPANSION INC: Pushes 3rd Circ. to Overturn Bar on Apple Suit
------------------------------------------------------------
Richard Vanderford at Bankruptcy Law360 reports that Spansion Inc.
on Monday urged the Third Circuit to let it sue Apple over flash
memory patents, arguing that a deal that ended the litigation
should have been thrown out in Spansion's bankruptcy.
Spansion, which said it could get more money suing Apple than it
could under a settlement that made it a primary Apple supplier,
asked the appeals court to reinstate a bankruptcy court order
terminating the deal, according to Bankruptcy Law360.
About Spansion
Spansion Inc. -- http://www.spansion.com/-- is a
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive,
networking and consumer electronics applications. Spansion,
previously a joint venture of AMD and Fujitsu, is the largest
company in the world dedicated exclusively to designing,
developing, manufacturing, marketing, selling and licensing Flash
memory solutions.
Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion
International, Inc., and Cerium Laboratories LLC filed voluntary
petitions for Chapter 11 bankruptcy on March 1, 2009 (Bankr. D.
Del. Lead Case No. 09-10690). On Feb. 9, 2009, Spansion's
Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into
a proceeding under the Corporate Reorganization Law (Kaisha Kosei
Ho) of Japan to obtain protection from its creditors as part of
the company's restructuring efforts. None of Spansion's
subsidiaries in countries other than the United States and Japan
are included in the U.S. or Japan filings. Michael S. Lurey,
Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at
Latham & Watkins LLP, served as bankruptcy counsel. Michael R.
Lastowski, Esq., at Duane Morris LLP, served as the Delaware
counsel. Epiq Bankruptcy Solutions LLC, is the claims agent.
The United States Trustee appointed an official committee of
unsecured creditors in the case. As of Sept. 30, 2008, Spansion
disclosed total assets of US$3,840,000,000, and total debts of
US$2,398,000,000.
Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009
(Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's
counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. Spansion
Japan had US$10 million to US$50 million in assets and US$50
million to US$100 million in debts.
Spansion submitted its first plan of reorganization on Oct. 26,
2009, and gained approval from the U.S. Bankruptcy Court on its
amended disclosure statement on Dec. 22, 2009. Spansion
received confirmation from the U.S. Bankruptcy Court for its plan
on April 16, 2010, and emerged from Chapter 11 protection May 10,
2010.
Spansion entered Chapter 11 reorganization with more than
$1.5 billion in debt. Spansion emerged a well-capitalized company
with less than $480 million in debt and roughly $230 million in
cash, which is supplemented with an undrawn credit line of up to
$65 million.
STERLING SHOES: Provides Default Status Update
----------------------------------------------
Sterling Shoes Inc. on July 23 provided its bi-weekly Default
Status Report under National Policy 12-203 - Cease Trade Orders
for Continuous Disclosure Defaults.
As previously announced, the Company did not file its interim
financial statements for the quarter ended March 31, 2012,
management discussion and analysis and related chief executive
officer and chief financial officer certifications nor its annual
financial statements for the financial year ended Dec. 31, 2011,
management discussion and analysis and related chief executive
officer and chief financial officer certifications (collectively,
the "Year End Filings" and together with the Interim Filings, the
"Required Filings") by the applicable filing deadlines. The
British Columbia Securities Commission placed the Company on its
list of defaulting issuers on May 4, 2012.
Since the company's last default status announcement on July 9,
2012, there have not been any material changes to the information
contained therein; nor any failure by the Company to fulfill its
intentions as stated therein with respect to satisfying the
provisions of the alternative information guidelines, and there
are no additional defaults or anticipated defaults subsequent to
such announcement. Further, there have been no additional
material changes respecting the Company and its affairs.
Until the Required Filings are filed, the company intends to
continue to satisfy the provisions of the alternative information
guidelines specified in Section 4.4 of NP 12-203 by issuing bi-
weekly Default Status Reports, each of which will be issued in the
form of a news release. The Company intends to file, if required,
its next Default Status Report by Aug. 6, 2012.
About Sterling Shoes
Sterling Shoes is headquartered in Vancouver, B.C. and is a
leading independent footwear retailer offering a broad selection
of private label and brand name shoes and accessories. Founded in
1987, Sterling Shoes LP operates over 100 stores across Canada.
In October 2011, Sterling Shoes Inc. Sterling Shoes GP Inc.
(general partner of Sterling Shoes Limited Partnership) sought
protection from the Supreme Court of British Columbia under the
Companies' Creditors Arrangement Act (Canada), R.S.C. 1985, c. C-
36, as amended.
Alvarez & Marsal Canada Inc. has been appointed Monitor pursuant
to such orders.
SWIFT ENERGY: Moody's Confirms 'B2' CFR; Outlook Positive
---------------------------------------------------------
Moody's Investors Service confirmed Swift Energy Company's B2
Corporate Family Rating (CFR) and its B3 senior unsecured notes
rating. The outlook was changed to positive. Moody's has also
assigned a Speculative Grade Liquidity rating of SGL-3 to Swift.
This action concludes Moody's review for upgrade, which commenced
on April 2, 2012.
"The rating confirmation and positive outlook reflect the progress
Swift has evidenced in growing its production and proved reserves
while maintaining a modestly levered financial profile," commented
Andrew Brooks, Moody's Vice President. "Through the focused
development of its liquids and liquids-rich reserve base, the
company is solidifying its reversal of past years' negative trends
in production and reserve growth."
Ratings Rationale
Swift Energy's B2 CFR reflects its scale in terms of production
and proved reserves, a balanced production profile with liquids
growing to 50% of the total, declining finding and development
(F&D) costs, and its relatively stable debt leverage. Three
consecutive years of declining production aggregating 31% was
reversed in 2011 with a 26% rebound to 28,840 barrels of oil
equivalent (Boe) per day, accompanied by a 20% increase in proved
reserves to 159.6 million Boe. These gains reflect significantly
improved capital productivity as the company more efficiently
exploited its US Gulf Coast resource base. Another 15%-20%
increase in production, and a 10%-15% increase in proved reserves,
is expected in 2012.
Swift Energy operates in three core Texas-Louisiana producing
regions; its principal focus is the Olmos formation and the
liquids-rich Eagle Ford Shale in South Texas, which represented
78% and 56%, respectively of 2011's total proved reserves and
production. The company is guiding full year 2012 capital spending
in a range of $575-$625 million, up as much as 24% from 2011's
level, driving continuing production gains, which were up 6% in
2012's first quarter. Approximately 60% of 2012's spending will be
allocated to continuing Eagle Ford development.
The SGL-3 rating reflects adequate liquidity through mid-2013.
Swift's November 2011 $250 million notes issuance pre-funded a
portion of 2012's planned capital spending, which could exceed
internally generated cash from operations by approximately that
amount. While the company could continue to outspend cash flow
into 2013, Moody's believes Swift has the financial discipline to
reduce activity levels to better balance its cash flow and capital
spending should commodity prices weaken to the extent it would be
prudent to do so. At March 31, 2012, Swift's cash balance was $127
million and its $300 million secured borrowing base revolving
credit facility ($300 million commitment, $375 million borrowing
base) was fully available. The revolver is scheduled to mature in
May 2016. Moody's expects the company to be well in compliance
with its financial covenants through mid-2013. Given the secured
nature of its revolving credit, any potential asset sales offer
limited prospects as alternative sources of liquidity.
Moody's positive outlook is based on the expectation that Swift
will continue to grow production and reserves on a sustainable
basis while maintaining its relative use of debt at a level
consistent with historical levels. At March 31, 2012 debt to
average daily production was $25,845 per Boe, a level
approximating the B1 rated peer group median. Should Swift
successfully execute on its growth initiatives, increasing
production on a sustainable basis to in excess of 35,000 Boe per
day, while holding F&D costs under $15 per Boe and maintaining
debt to average daily production at or below $25,000 per Boe,
Moody's could upgrade its CFR to B1. Given the positive outlook, a
rating downgrade is unlikely. However, should lackluster drilling
results reverse production gains and reserve adds, with production
failing to approach 35,000 Boe per day, or should F&D costs re-
inflate, the positive outlook could be returned to stable. The
rating could be downgraded should production fall back towards
25,000 Boe per day. Additionally, Moody's would expect capital
spending to better align itself with cash flow, unlike 2012, or
look to equity funding as the company has done in the past to
maintain an appropriate capital structure.
The B3 senior unsecured notes rating reflects both the overall
probability of default of Swift, to which Moody's assigns a PDR of
B2, and a loss given default of LGD-4 (66%). Swift's senior
unsecured notes are subordinate to its $300 million secured
revolving credit facility's potential priority claim to the
company's assets. The size of the potential senior secured claims
relative to Swift's outstanding senior unsecured notes results in
the notes being rated one-notch below the B2 CFR under moody's
Loss Given Default methodology.
The principal methodology used in rating Swift Energy was the
Global Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Swift Energy Company is headquartered in Houston, Texas.
T-L BRYWOOD: Exclusive Plan Filing Period Extended to Oct. 10
-------------------------------------------------------------
Judge Donald R. Cassling of the U.S. Bankruptcy Court for the
Northern District of Illinois extended T-L Brywood LLC's exclusive
periods to file and solicit acceptances of a plan of
reorganization, through and including Oct. 10, 2012, and Dec. 10,
2012, respectively.
The Debtor said it has been diligently pursuing the administration
of the Chapter 11 case with a view toward formulating a prompt
exit strategy. However, given the general overall economic
concerns especially facing the real estate markets, it is
impossible for the Debtor to propose a Plan and implement a
Chapter 11 exit strategy within the existing Exclusive Periods.
The Debtor continues to seek refinancing sources to replace the
lender or capital investments that would be utilized to fund a
Plan.
About T-L Brywood
T-L Brywood LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Ill.
Case No.12-09582) on March 12 , 2012. T-L Brywood owns and
operates a commercial shopping center known as the "Brywood
Centre" -- http://www.brywoodcentre.com/-- in Kansas City,
Missouri. The Property encompasses roughly 25.6 acres and
comprises 183,159 square feet of retail space that is occupied by
12 operating tenants. The occupancy rate for the Property is
approximately 80%.
The Debtor and lender The PrivateBank and Trust Company reached an
impasse over the terms and conditions of another extension of a
mortgage loan on the Property. As a result, the Debtor filed the
Chapter 11 case to protect the Property from foreclosure while the
Debtor formulates an exit strategy from the reorganization case.
As of the Petition Date, no foreclosure relating to the Property
had been filed by the Lender.
Judge Donald R. Cassling oversees the case. The Debtor is
represented by David K. Welch, Esq., Arthur G. Simon, Esq., and
Jeffrey C. Dan. Esq., at Crane, Heyman, Simon, Welch & Clar, in
Chicago.
The Debtor disclosed total assets of $16,666,257 and total
liabilities of $13,970,622 in its schedules. The petition was
signed by Richard Dube, president of Tri-Land Properties, Inc.,
manager.
PrivateBank is represented by William J. Connelly, Esq., at
Hinshaw & Culbertson LLP.
TRONOX INC: Trial on $25-Bil. Suit vs. Kerr-McGee Resumes
---------------------------------------------------------
Trial resumed Tuesday in Tronox Inc.'s $25 billion suit against
ex-parent Kerr-McGee Corp. following failed talks.
Lisa Uhlman at Bankruptcy Law360 reports that the defendant's
first witness testified that a 2000 acquisition of a titanium
dioxide business carried latent environmental liabilities that the
company didn't know about.
Carla Main, substituting for Bloomberg bankruptcy columnist Bill
Rochelle, reports that David Zott, a lawyer for the U.S. and
Tronox, told U.S. Bankruptcy Judge Allan Gropper in opening
comments July 24 in Manhattan that the plaintiffs planned to enter
one more document before turning the case over to the defense.
Neither the judge nor lawyers for either side mentioned the
settlement talks, which were confidential, according to Bloomberg.
Ms. Main notes that the lawsuit, over environmental claims and
tort claims related to Tronox's 2005 spinoff, tests whether money
can be recovered from a successor to a polluting company, even
after a bankruptcy ostensibly cleaned the slate. Tronox initially
sued Anadarko in 2009. The Justice Department took over the case
on behalf of the Environmental Protection Agency.
The government seeks to recover $25 billion to clean up 2,772
polluted sites and compensate about 8,100 tort claimants.
Anadarko's defense will include testimony from George
Christiansen, who formerly worked in its uranium mining business
and worked on setting reserves for environmental damages, and
Joseph A. Flake, a former vice president at Kerr-McGee's
chemical business, according to transcripts of depositions filed
in court papers.
In its lawsuit, the U.S. alleged that the company didn't
set aside enough money for environmental obligations to the EPA
and other agencies, and knew that the titanium-dioxide business
wouldn't be strong enough to support the environmental debts
once Tronox was spun off.
The lawsuit is Tronox Inc. v. Anadarko Petroleum Corp. (In re
Tronox Inc.), 09-1198, U.S. Bankruptcy Court, Southern District of
New York (Manhattan).
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.
UNITED WESTERN: Can Exclusively File Plan Until Oct. 1
------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court approved
the joint motion filed by United Western Bancorp and Matrix
Bancorp Trading to extend the exclusive period during which the
Company can file a Chapter 11 plan and solicit acceptances thereof
by 120 days through and including Oct. 1, 2012 and Nov. 27, 2012,
respectively.
About United Western
United Western Bancorp, Inc., along with two affiliates, filed for
Chapter 11 protection (Bankr. D. Colo. Case No. 12-13815) on
March 2, 2012. Harvey Sender, Esq., at Sender & Wasserman, P.C.,
represents the Debtor. Judge A. Bruce Campbell presides over the
case.
The Debtor, formerly known as Matrix Bancorp Inc., estimated
assets of up to $10 million and debts of $50 million to
$100 million as of the Chapter 11 filing. The schedules say that
liabilities total $53.3 million, of which $40.5 million is
unsecured.
UNIVERSAL HOSPITAL: Moody's Rates New $425MM Secured Notes 'B3'
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Universal
Hospital Services, Inc.'s proposed $425 million senior secured
second lien notes. At the same time, Moody's affirmed the
Corporate Family and Probability of Default Ratings at B2. The
rating outlook is stable.
The proceeds from the new second lien notes will be used to tender
for the company's existing $405 million senior secured second lien
fixed rate PIK toggle notes due June 2015, and pay transaction
fees and expenses. The ratings incorporate Moody's assumption that
the company will successfully amend and extend its existing
revolving credit facility (not rated by Moody's), which will be
upsized to $235 million.
Moody's assigned the following ratings:
$425 million senior secured second lien fixed rate notes due 2020,
B3 (LGD4, 60%)
Moody's affirmed the following ratings (with LGD point-estimate
revisions):
$230 million second lien floating rate notes due June 2015 at B3
(LGD4, 60%) from (LGD4, 57%)
Moody's expects to withdraw the following ratings upon close of
the transaction:
$405 million senior secured second lien 8.5% PIK toggle notes due
June 2015, B3 (LGD4, 57%)
Ratings Affirmed:
Corporate Family Rating at B2
Probability of Default Rating at B2
Speculative Grade Liquidity Rating at SGL-2
All ratings are subject to review of final documentation.
Rating Rationale
The B2 Corporate Family Rating reflects UHS' small size on both an
absolute basis and relative to larger competitors, as well as the
company's considerable financial leverage and weak interest
coverage. On a pro forma basis for the refinancing of the
company's senior secured fixed rate notes, Moody's estimates
adjusted leverage of approximately 5.5 times. UHS' business is
extremely capital intensive and requires significant amounts of
capital expenditures in order to achieve revenue and EBITDA
growth. Also constraining the rating is the company's negative
free cash flow resulting from high growth capital expenditures.
Nevertheless, the ratings are supported by UHS' leading market
position in the medical outsourcing service business, its national
footprint, and diverse customer base. The company's credit profile
also benefits from its ability to achieve revenue and earnings
growth even through difficult economic conditions. The rating has
also benefited from UHS' good liquidity position, including
significant availability under the company's asset-based revolver
and the ability to reduce capital expenditures (at the expense of
growth). Given the company's weak credit metrics, there is very
little cushion within the current rating for additional leverage
or weaker interest coverage.
The stable outlook is supported by UHS' good liquidity profile and
stable revenue sources. Moody's expects free cash flow to remain
at weak levels given the magnitude of anticipated growth capital
expenditures needed to support incremental revenues.
Moody's could lower the ratings if weakness in hospital census or
reduced demand from hospitals results in a sustained reduction in
core rental revenue and EBITDA. The ratings could be downgraded if
the company sustains adjusted debt to EBITDA above 6.0 times.
Further, if the company's access to external liquidity sources
were to deteriorate, or if UHS were to engage in a significant
debt-financed acquisition or shareholder distribution, ratings
could be downgraded.
While not expected over the near-term due to the company's small
absolute size, high leverage and weak interest coverage, Moody's
could upgrade the ratings if the company sustains leverage below
5.0 times and free cash flow to adjusted debt above 5%. Interest
coverage would also need to materially improve in order for
Moody's to consider an upgrade.
The principal methodology used in rating Universal Hospital
Services, Inc. was the Global Business & Consumer Service Industry
Methodology published in Octoner 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.
Universal Hospital Services, Inc. is a leading nationwide provider
of medical outsourcing and lifecycle services to the United States
health care industry. The company primarily rents patient-ready
medical equipment to hospitals and alternate site providers, and
also offers a range of preventative maintenance, inspection,
repair, logistic and consulting services. UHS is owned by private
equity sponsors Irving Place Capital Merchant III, L.P., and
reported revenues of approximately $395 million for the twelve
months ended March 31, 2011.
UNIVERSAL HOSPITAL: S&P Rates Proposed $425MM 2nd Lien Notes 'B+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Minneapolis-based movable medical equipment provider Universal
Hospital Services Inc.'s (UHS) proposed issue of $425 million of
second-lien notes due 2020, along with a '4' recovery rating. "The
'4' recovery rating indicates our expectation for average (30% to
50%) recovery for senior secured second-lien lenders in the event
of a payment default," S&P said.
"Our 'BB' issue-level and '1' recovery ratings on the company's
existing $195 million revolver are unchanged, as are our 'B+'
issue rating and '4' recovery rating on the company's $405 million
senior secured second-lien pay-in-kind (PIK) toggle notes, pending
their withdrawal in conjunction with the refinancing. We affirmed
our 'B+' corporate credit rating on UHS. The outlook remains
stable," S&P said.
"In addition, our 'B+' issue and '4' recovery ratings on the
company's existing $230 million floating-rate notes remain
unchanged on the relatively small increase in debt," S&P said.
The amount and interest rate on the new credit facilities will be
determined by market conditions.
"We expect the transaction to add some $20 million in debt to fund
transaction fees and premium," said Standard & Poor's credit
analyst Michael Kaplan, "but at a cost insufficient to alter our
view of the company's financial risk profile or liquidity. The
maturity extensions will address much of the company's refinancing
risk in 2014 and 2015."
"The ratings on UHS are characterized by the company's 'fair'
business risk profile and 'highly leveraged' financial risk
profile, according to our criteria. We believe UHS' narrow focus
in the capital-intense business of providing movable medical
equipment to health care facilities is unlikely to meaningfully
change in the foreseeable future. In our opinion, the financial
sponsorship of UHS and likely debt-financed acquisitions will
preclude any significant reduction in its heavy use of borrowing,"
S&P said.
"Our rating outlook on UHS is stable. We anticipate that some
EBITDA improvement will accompany lower margin revenue growth in
the year ahead, given acquisitions and the addition of asset
management contracts. We also believe that capital spending to
maintain and expand the existing business will preclude the
generation of FOCF for any meaningful debt reduction. Accordingly,
with a $20 million debt increase for the proposed refinancing, we
expect debt leverage to hover near the mid-5x range," S&P said.
"We could lower our rating if a sudden customer shift away from
equipment outsourcing leads to prospects for flat revenues and an
extended margin contraction, because this might suggest a revision
in our assessment of the business risk profile to 'weak' from
fair. Alternatively, a dividend that would maintain leverage above
6x and squeeze liquidity also might lead to a downgrade," S&P
said.
"We are unlikely to raise our rating without a change in company
ownership and financial policies. We believe that, even if there
are a number of large contract wins that boosted organic revenue
growth into double digits and margins remained flat, the financial
sponsor would use the debt capacity afforded by associated
leverage decline to below 5x, to pay a dividend or increase its
acquisition activity and maintain leverage in the 5x-6x range,"
S&P said.
WINDSTREAM CORP: Moody's Rates New $900MM Sr. Secured Debt 'Baa3'
-----------------------------------------------------------------
Moody's Investors Service has assigned Baa3 (LGD 2-17%) ratings to
Windstream Corporation's proposed $300 million Term Loan A due
2017 and $600 million Term Loan B due 2019. The proceeds will be
used to repay existing borrowings on the company's revolving
credit facility and for general corporate purposes. Loss given
default assessments were updated to reflect the revised debt mix.
The rating outlook is stable.
Windstream's serial acquisitions have stressed its credit profile,
and resulted in weaker profit margins and higher capital
intensity. The resulting weaker operating free cash flow is
sufficient to support the company's high dividend payout, but
leaves only a narrow margin of safety. These factors could
jeopardize Windstream's Ba2 corporate family rating, which
incorporates Moody's expectation that the company will execute
crisply to expand margins such that leverage falls to 3.5x and
free cash flow grows to 2-3% of debt (both on a Moody's adjusted
basis). Moody's views Windstream's current dividend payout as
unsustainable in the context of its Ba2 corporate family rating
without the expected improvement in margins and capital intensity.
By repaying its revolver, Windstream will improve immediate
liquidity. However, the timing of 2013 debt maturities now factors
into Moody's liquidity assessment. Therefore, due to the $1.1
billion of 2013 maturities, Moody's has lowered Windstream's
speculative grade liquidity rating to SGL-2 from SGL-1. Moody's
anticipates that Windstream will have the capacity to refinance
2013 maturities with its revolving credit facility, if necessary,
but this would limit the company's financial flexibility. Even
still, Windstream's SGL-2 liquidity assessment reflects Moody's
view of good liquidity.
Issuer: Windstream Corporation
Assignments:
US$300 million Senior Secured Bank Credit Facility, Assigned
Baa3 (LGD2, 17%)
US$600 million Senior Secured Bank Credit Facility, Assigned
Baa3 (LGD2, 17%)
Downgrades:
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from
SGL-1
LGD Updates:
Senior Secured Bank Credit Facility, Changed to LGD2, 17%
from LGD2, 14% (no change to Baa3 rating)
Senior Unsecured Regular Bond/Debenture, Changed to LGD5, 79%
from LGD5, 76% (no change to Ba3 rating)
Ratings Rationale
Windstream's Ba2 corporate family rating broadly reflects Moody's
expectations that the company's adjusted Debt/EBITDA leverage will
move towards 3.5x over the next few years after remaining elevated
as result of the acquisition of Paetec. Moody's expects merger
synergies from recent acquisitions and ongoing cost cutting
efforts to result in EBITDA margin expansion despite flat or
slightly lower revenues.
Windstream has successfully diversified its revenue base through
the acquisitions of regional wireline operators, data centers and
competitive local exchange carriers, and the company has a good
track record of successful merger integration. The Paetec
acquisition is a continuation of the company's strategy to
increase its exposure to business customers and offset the decline
in residential revenues. However, leverage has increased due to
these acquisitions and the capital investment needs related to the
acquired businesses. In addition to temporarily stressing its
credit metrics, Windstream's acquisitive growth strategy increases
its business complexity. As such, the company's Ba2 rating cannot
accommodate operational missteps that would either delay expected
merger benefits or result in lower service quality and higher
customer churn.
Windstream has $800 million of unsecured notes and $300 million of
secured debt due in 2013. If the company chooses to refinance the
unsecured debt with secured debt, in accordance with Moody's Loss
Given Default framework, the Baa3 ratings on secured debt at
Windstream Corp. could be downgraded by one or more notches
(assuming no change to Windstream's corporate family rating.)
Windstream's ratings could face downward pressure if free cash
flow weakens, which could result from a failure to realize
expected merger synergies or a deterioration in business
fundamentals. Further, the ratings could be lowered if Moody's
believes that leverage is not on track to fall below 3.75x
(Moody's adjusted) on a sustainable basis by year-end 2013.
Although unlikely in the intermediate term, positive rating
momentum could develop if free cash flow exceeds 8% of debt and
leverage falls below 3x, both on a sustainable basis.
The principal methodology used in rating Windstream Corporation
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.
Windstream Corporation is a communications services provider to
businesses nationwide. In addition, the company provides voice and
broadband services to residential customers , primarily in rural
markets. The company was formed by the merger of Alltel
Corporation's wireline operations and Valor Communications Group
in July 2006. The company has continued to grow through targeted
acquisitions that have expanded its business services capabilities
and market share.
WISP RESORT: 2-Day Trial in December in Lawsuit Against BB&T
------------------------------------------------------------
Bankruptcy Judge Wendelin I. Lipp will hold a two-day trial in
December in the lawsuits:
-- Wisp Resort Development, Inc., Plaintiff, v. Branch
Banking and Trust Co., Defendant, Adv. Proc. No. 11-00961
(Bankr. D. Md.); and
-- Recreational Industries, Inc., Plaintiff, v. Branch
Banking and Trust Co., Defendant, Adv. Proc. No. 11-00960
(Bankr. D. Md.)
Trial is set for Dec. 3 and 4, 2012, beginning at 10:00 a.m.
According to the Stipulation, the Defendant believes that a longer
trial time is needed.
Louis J. Ebert, Esq., and Joshua D. Bradley, Esq. --
lebert@rosenbergmartin.com -- at Rosenberg Martin Greenberg, LLP,
in Baltimore, Maryland, serve as counsel to Branch Banking and
Trust Company.
A copy of the July 18, 2012 Stipulation and Consent Order
Modifying Scheduling Order is available at http://is.gd/JktRQz
from Leagle.com.
About Wisp Resort
Recreational Industries, Inc., D.C. Development, LLC, Wisp Resort
Development, Inc., and The Clubs at Wisp, LLC, operate a ski
resort and real estate development companies located in Garrett
County, Maryland generally known as Wisp Resort. The Wisp Resort
comprises approximately 2,200 acres of master planned and fully
entitled land, 32 ski trails covering 132 acres of skiable terrain
with 12 lifts and two highly-rated golf courses.
Financial problems were caused by a guarantee given to Branch
Banking & Trust Co. to secure a $29.6 million judgment the bank
obtained on a real estate development within the property.
Recreational Industries, D.C. Development, Wisp Resort Development
and The Clubs at Wisp filed for Chapter 11 bankruptcy (Bankr. D.
Md. Lead Case No. 11-30548) on Oct. 15, 2011. D.C. Development
disclosed $91,155,814 in assets and $46,141,245 in liabilities as
of the Chapter 111 filing.
The Debtors engaged Logan, Yumkas, Vidmar & Sweeney LLC as counsel
and tapped Invotex Group as financial restructuring consultant.
SSG Capital Advisors, LLC, serves as exclusive investment banker
to the Debtors. The Official Committee of Unsecured Creditors has
tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as counsel.
Y-ME NATIONAL: Breast Cancer Charity Closes Doors, Files Chapter 7
------------------------------------------------------------------
Jacqueline Palank, writing for Dow Jones Newswires, reports that
Y-Me National Breast Cancer Organization Inc., a breast-cancer
charity, filed to liquidate under Chapter 7 bankruptcy in Chicago
on July 17, two days after it shut down operations. According to
Dow Jones, the shutdown prompted an Illinois senator to ask the
state's attorney general to investigate.
According to Dow Jones, a spokeswoman for Illinois Attorney
General Lisa Madigan said the office is in the beginning stages of
a review of Y-Me's finances but said that's "standard" procedure
when an organization notifies Ms. Madigan's office of an impending
closure. Ms. Madigan hasn't made any allegations of wrongdoing.
According to Dow Jones, the Chicago Tribune reported Monday that
the nonprofit, founded in 1978, was eventually elbowed out by a
proliferation of breast cancer focused groups that now compete for
the public's attention and dollars. At the time of its creation,
there was little public information or discussion about a disease
that, today, is hard to avoid.
Dow Jones relates Y-Me reported $500,000 to $1 million in debts
versus $100,000 to $500,000 in assets in its bankruptcy petition.
The law firm of Jenner & Block is representing Y-Me in the
bankruptcy case on a pro-bono basis, court papers show.
* Personal Bankruptcy Expected to Drop by 11%, Fitch Says
---------------------------------------------------------
Fitch believes personal bankruptcy filings are likely to decline
by 11% for the current year. The expectation follows data
indicating that filings in first half of this year were running
well below initial expectations. According to The National
Bankruptcy Research Center (NBKRC), U.S. personal bankruptcy
filings decreased by 13% in the first half of this year
The drop in bankruptcy filings is having a direct and positive
impact on consumer asset-backed securities (ABS), particularly in
the credit card sector, by holding many risk measures at cyclical
lows. Fitch expects performance to hold at or near current levels
through the end of the year. Bankruptcy filings typically
comprise approximately 30% to 40% of overall credit card chargeoff
results and the improvements are helping offset unemployment
pressures for consumers.
Fitch believes the pace of improvement will level off later this
year, as banks appear to have begun loosening underwriting
standards recently. Consumer borrowing rose by $17.1 billion in
May from April, according to the Federal Reserve. That pushed
total borrowing to a seasonally adjusted $2.57 trillion,
approaching the high reached in July 2008. Increases over the
previous 18 months had been attributed to auto and student loans,
while credit card usage declined or stayed the same. That abruptly
changed in May when credit card debt increased by $8 billion, its
largest one-month jump in nearly five years.
The decline in bankruptcy applications began in 2011, after four
years of increases. In 2010, NBKRC reported 1.5 million filings.
That was the highest level since 2005, when the Bankruptcy Abuse
Prevention and Consumer Protection Act reduced the likelihood and
amount of discharged debt in personal bankruptcy cases. In 2011,
amid signs of slow improvement in the labor and real estate
markets, personal filings declined by 11.6% to 1,353,186. The
improvements in bankruptcies have come amid a pullback in consumer
credit usage and overall reduction in household debt.
Contact:
Michael R. Dean
Managing Director
Asset Backed Securities
Tel: +1 212 908-0556
1 State Street Plaza
New York, NY
Rob Rowan
Senior Director
Fitch Wire
+1 212 908-9159
* Sallie Mae, CFPB to Back Student-Loan Changes at Senate Hearing
-----------------------------------------------------------------
Carla Main, substituting for Bloomberg bankruptcy columnist Bill
Rochelle, reports that a U.S. consumer protection official told a
Senate panel on July 24 that borrowers struggling with private
student-loan debt would benefit from more refinancing options.
The testimony follows a government report recommending changes to
bankruptcy law regarding dischargeability of private student
loans.
Congress should focus more attention on expanding modification and
refinancing options in the private market, Rohit Chopra, student
loan ombudsman for the Consumer Financial Protection Bureau, told
a Senate Banking subcommittee hearing. The country's mounting
student loan debt threatens to "act as a drag on economic
recovery," he said.
According to the report, the Senate panel held its hearing less
than a week after publication of a government report that said
students were victims of a "subprime-style" private loan market
that contracted after the 2008 credit crisis. Congress should
consider changing a bankruptcy procedure law enacted in 2005 that
prevents private student loans from being discharged during
bankruptcy, the report said.
* Burleson LLP Adds Attorney Elizabeth M. Guffy
-----------------------------------------------
Burleson LLP disclosed that Elizabeth M. Guffy, who has practiced
law for more than two decades, has joined the energy law firm's
Bankruptcy and Restructuring Practice Group.
Ms. Guffy is a seasoned corporate attorney who has an extensive
background representing foreign and domestic energy companies,
both as creditors and as debtors. She is well versed in a
spectrum of matters related to bankruptcy and finance, and is
particularly experienced in bankruptcy exposure and risk, chapter
11 cases, bankruptcy litigation, regulatory requirements, and the
effects of regulatory actions.
"Burleson has built a reputation as one of the largest and most
comprehensive oil and gas law firms in the country, with some of
the best attorneys in the industry," said Ms. Guffy. "Their
unique ability to recognize business objectives and achieve
practical solutions to fiscal problems really appeals to me. They
are responsive, knowledgeable, and efficient, and those qualities
are tremendously beneficial to the clients we serve."
Rick Burleson, managing partner of Burleson, added, "Outside of
her ability to counsel companies on a wide range of issues,
Elizabeth is skilled in understanding the larger implications that
come with distressed financial conditions. She is well known for
her depth of knowledge and perspective, and has made a name for
herself both in and out of the energy industry. She's a great
attorney and is, without a doubt, a great addition to our firm."
Prior to joining Burleson, Guffy worked as a sole practitioner.
She also served as Special Counsel at Dewey & LeBoeuf after
practicing at Baker Botts LLP for 11 years.
Guffy has presided over the liquidation of oil and gas companies;
analyzed gas and power trading transactions under master
agreements, including ISDA agreements; and represented energy
companies in insolvency issues.
Her background in financial matters includes representing the FDIC
in the structured sale of non-performing loans; analyzing legal
isolation, true sale, and non-consolidation issues associated with
asset securitizations, project financings, structured leases, and
other financial transactions; and structuring energy- and
mortgage-related secured financings and repurchase agreements.
Guffy has represented secured and unsecured creditors in chapter
11 cases, analyzed the effects of bankruptcy on contract rights,
handled debtor-in-possession issues in various capacities,
formulated chapter 11 plans, and served as trustee in both chapter
11 and chapter 7 cases.
In addition to developing litigation strategies for protecting
bankruptcy claims, she has defended and prosecuted claim
objections and avoidance actions, prosecuted involuntary
bankruptcy petitions, and represented clients in mediation. She
has also handled appeals in courts from bankruptcy court to
district and circuit courts, and has drafted petitions for writ of
certiorari to the U.S. Supreme Court.
Guffy graduated with a Bachelor of Science degree from Rice
University. She earned her law degree, with honors, from the
University of Houston Law Center, where she served as articles
editor for the Houston Law Review and was a member of the Order of
the Coif.
About Burleson LLP
With more than 120 attorneys in offices in Houston, San Antonio,
Pittsburgh, and Denver, Burleson LLP --
http://www.burlesonllp.com/-- is the largest law firm in the
country dedicated primarily to serving the oil and gas industry.
* Oaktree Law's Moradi-Lopes Named LAPPL Panel Atty. for Bankr.
---------------------------------------------------------------
Julie J. Moradi-Lopes was recently approved by the Los Angeles
Police Protective League (LAPPL) board of directors to become the
organization's first panel attorney specializing in bankruptcy and
foreclosure defense law. LAPPL is an organization that represents
Los Angeles police officers, assisting them primarily with
employment law and other matters related directly to security and
fairness within the workplace. Panel attorneys are approved by
the full board of directors and are made available to members who
need their specific legal expertise. Moradi-Lopes will be the
first panel bankruptcy and foreclosure attorney in Los Angeles to
represent league members who are struggling with mortgage
problems.
"Oaktree Law has always been committed to helping homeowners who
are struggling with their mortgage," explains Moradi-Lopes.
"We're honored to provide that same kind of care and assistance to
the Los Angeles police force." As the owner and lead attorney of
Oaktree Law, Moradi-Lopes has been the driving force behind the
office since its inception. Under her guidance, Oaktree Law has
been able to provide foreclosure help in Orange County for
numerous homeowners during California's housing crisis.
About Oaktree Law
Founded by Julie J. Moradi-Lopes, Oaktree Law --
http://oaktreelaw.com/-- offers bankruptcy assistance and
foreclosure defense in the Los Angeles and greater Orange County
area.
* Resilience Capital Partners Completes Fundraising for Fund III
----------------------------------------------------------------
Resilience Capital Partners, a private equity firm focused on
buying and improving lower mid-market companies in a broad range
of industries, on July 25 announced that it completed the final
close of The Resilience Fund III, L.P., on May 31, 2012 with
$222.5 million of committed capital. Fund III exceeded its target
of $200 million through the participation of a global
institutional investor base that includes pension funds, insurance
companies, foundations and endowments, fund of funds, wealth
managers and investment consultants.
Resilience specializes in helping businesses emerge from fatigued
ownership or lending relationships, over-leveraged balance sheets
and a variety of special situations such as turnarounds,
restructurings or corporate divestitures. The firm invests in
niche-oriented manufacturing companies and business services
companies located in the Midwestern and Mid-Atlantic United States
with sustainable market positions and a clear path to cash flow
improvement to guide them through a cyclical downturn, an adverse
credit situation or ownership transition.
"We are very pleased to complete our fundraising for Fund III and
receive commitments from some of the world's most respected
private equity investors. The confidence they have placed in us
is a testament to the results we have generated since founding the
firm in 2001," said Bassem Mansour, Co-CEO of Resilience. "We
believe businesses will survive and thrive if they are properly
capitalized with both human and performance-improvement capital."
"Our team generates results through a roll-up-the-sleeves approach
that transforms good companies into more profitable and successful
enterprises," said Steve Rosen, Co-CEO of Resilience. "We invest
in what we know -- the lower middle-market in the heartland of
America -- and draw on a deep bench of operating expertise to
enhance a company's cash flow, competitive positioning and
prospects.
Fund III's capital comes from a variety of sources including
pension funds, insurance companies, foundations and endowments,
fund of funds, wealth managers and investment consultants.
Approximately 60 percent of the fund?s capital was provided by
investors domiciled in the U.S., with the remainder from investors
domiciled in Europe and the Caribbean.
"We are delighted that Resilience was able to exceed their target
in a very challenging fundraising environment", said Paul Delaney,
a Senior Managing Director at Griffin Financial Group LLC, which
served as the global financial advisor and placement agent for
Fund III. "We appreciate the strong support new institutional
limited partners placed in the Resilience team and their focused
investment strategy."
Fund III currently has three platforms in place including North
Coast Minerals (industrial minerals and silica sands); WT
Hardwoods Group (hardwood lumber and flooring); and Thermal
Solutions Manufacturing (heavy-duty heat exchange components).
Resilience expects to build a portfolio of 10 to 12 platform
companies in Fund III that participate in a range of
manufacturing, business services and distribution industries.
Griffin Financial Group, LLC and Jones Day served as placement
agent and legal counsel, respectively, to Resilience for Fund III.
About Resilience Capital Partners
Headquartered in Cleveland, Ohio, Resilience Capital Partners --
http://www.resiliencecapital.com-- invests in niche-oriented
manufacturing and business service companies located in the
Midwestern and Mid-Atlantic United States with sustainable market
positions and a clear path to cash flow improvement. Resilience
targets platform businesses with $25 to $250 million in revenues
across a broad range of industries where it can improve a
company's operations, competitive positioning and profitability.
Since its founding in 2001, Resilience Capital has invested in 24
companies under 17 platforms. Its portfolio companies today
employ more than 5,000 people in 14 states and collectively
represent over $2 billion in revenues. Resilience manages in
excess of $320 million for its global investor base which includes
pension funds, insurance companies, foundations and endowments,
fund of funds, wealth managers, and investment consultants.
* Recent Small-Dollar & Individual Chapter 11 Filings
-----------------------------------------------------
In re Thomas Barcello
Bankr. D. Conn. Case No. 12-51344
Chapter 11 Petition filed July 17, 2012
In re Vasili Tchersak
Bankr. D. Conn. Case No. 12-51345
Chapter 11 Petition filed July 17, 2012
In re James H. Chen Jr., D.M.D., P.A. OF N. PALM BEACH
Bankr. S.D. Fla. Case No. 12-27196
Chapter 11 Petition filed July 17, 2012
See http://bankrupt.com/misc/flsb12-27196.pdf
represented by: Angelo A. Gasparri, Esq.
THE LAW OFFICES OF ANGELO A. GASPARRI, PA
E-mail: angelo@drlclaw.com
In re Shushma Gupta
Bankr. S.D. Fla. Case No. 12-27228
Chapter 11 Petition filed July 17, 2012
In re Kerry D. Brown, LLC
Bankr. E.D. La. Case No. 12-12111
Chapter 11 Petition filed July 17, 2012
See http://bankrupt.com/misc/laeb12-12111.pdf
Filed Pro Se
In re Jesus Sarmiento
Bankr. D. Mass. Case No. 12-42643
Chapter 11 Petition filed July 17, 2012
In re Behavioral Home Care, Inc.
Bankr. D. N.M. Case No. 12-12680
Chapter 11 Petition filed July 17, 2012
See http://bankrupt.com/misc/nmb12-12680p.pdf
http://bankrupt.com/misc/nmb12-12680c.pdf
represented by: Steven Tal Young, Esq.
TAL YOUNG, P.C.
E-mail: talyoung@yahoo.com
In re Commercial Liquidation Auctioneers, Inc.
Bankr. E.D. Pa. Case No. 12-16739
Chapter 11 Petition filed July 17, 2012
See http://bankrupt.com/misc/paeb12-16739.pdf
represented by: Allen B. Dubroff, Esq.
ALLEN B. DUBROFF, ESQ. & ASSOCIATES, LLC
E-mail: allen@dubrofflawllc.com
In re Abdul Pirani
Bankr. E.D. Tex. Case No. 12-41916
Chapter 11 Petition filed July 17, 2012
In re Sandra Hicks
Bankr. E.D. Va. Case No. 12-73059
Chapter 11 Petition filed July 17, 2012
In re Wholesale Trophies, Inc.
Bankr. N.D. Ala. Case No. 12-82311
Chapter 11 Petition filed July 18, 2012
See http://bankrupt.com/misc/alnb12-82311.pdf
represented by: Kevin D. Heard, Esq.
Heard Ary, LLC
E-mail: kheard@heardlaw.com
In re Julie Piatt
Bankr. C.D. Calif. Case No. 12-16472
Chapter 11 Petition filed July 18, 2012
In re MBE Digital, Inc.
Bankr. C.D. Calif. Case No. 12-34701
Chapter 11 Petition filed July 18, 2012
See http://bankrupt.com/misc/cacb12-34701.pdf
represented by: Robert S. Altagen, Esq.
Law Offices of Robert S Altagen
E-mail: rsaink@earthlink.net
In re Paula Gonzalez
Bankr. C.D. Calif. Case No. 12-34796
Chapter 11 Petition filed July 18, 2012
In re Sandra Miller
Bankr. C.D. Calif. Case No. 12-18636
Chapter 11 Petition filed July 18, 2012
In re Stephen Coon
Bankr. C.D. Calif. Case No. 12-18656
Chapter 11 Petition filed July 18, 2012
In re Robert Freeny
Bankr. C.D. Calif. Case No. 12-12722
Chapter 11 Petition filed July 18, 2012
In re Michael McCracken
Bankr. N.D. Calif. Case No. 12-32117
Chapter 11 Petition filed July 18, 2012
In re The Bernstein Company, LLC
Bankr. N.D. Ga. Case No. 12-42142
Chapter 11 Petition filed July 18, 2012
See http://bankrupt.com/misc/ganb12-42142.pdf
represented by: Larry Russell, Esq.
E-mail: larry31141@yahoo.com
In re Stephens Holdings, Inc.
dba L.B.S. Holdings, Inc.
dba Heaven Scent, Inc.
dba Carriage House Flowers & Gifts
Bankr. N.D. Ind. Case No. 12-12372
Chapter 11 Petition filed July 18, 2012
See http://bankrupt.com/misc/innb12-12372.pdf
represented by: Frederick W. Wehrwein, Esq.
Fred Wehrwein, P.C.
E-mail: wehrweinPC@aol.com
In re International Tower Supply, LLC
Bankr. D.N.J. Case No. 12-27848
Chapter 11 Petition filed July 18, 2012
See http://bankrupt.com/misc/njb12-27848.pdf
represented by: Gary Schafkopf, Esq.
Hopkins & Schafkopf, LLC
E-mail: gschafkopf@gmail.com
In re Thomas Cherenack
Bankr. D.N.J. Case No. 12-27830
Chapter 11 Petition filed July 18, 2012
In re Avruhom Spinka
Bankr. E.D.N.Y. Case No. 12-45195
Chapter 11 Petition filed July 18, 2012
In re Jacob Vose-Rossi
Bankr. D. Ore. Case No. 12-35593
Chapter 11 Petition filed July 18, 2012
In re Francis Puleo
Bankr. E.D. Pa. Case No. 12-16773
Chapter 11 Petition filed July 18, 2012
In re Richard Witzberger
Bankr. M.D. Tenn. Case No. 12-06536
Chapter 11 Petition filed July 18, 2012
In re Avery Dickens
Bankr. E.D. Tex. Case No. 12-41930
Chapter 11 Petition filed July 18, 2012
In re Phillip Klingler
Bankr. D. Ariz. Case No. 12-16136
Chapter 11 Petition filed July 19, 2012
In re Sudnj Uwah-El
Bankr. C.D. Calif. Case No. 12-26974
Chapter 11 Petition filed July 19, 2012
In re Dreams Footwear Inc.
Bankr. C.D. Calif. Case No. 12-34927
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/cacb12-34927.pdf
represented by: Steven P. Chang, Esq.
LAW OFFICES OF STEVEN P. CHANG
E-mail: attorney@spclawoffice.com
In re Dustin Oliver
Bankr. C.D. Calif. Case No. 12-34949
Chapter 11 Petition filed July 19, 2012
In re Pornpetch Assavarungnirund
Bankr. E.D. Calif. Case No. 12-33343
Chapter 11 Petition filed July 19, 2012
In re Julie Yarbrough-Langford
Bankr. N.D. Calif. Case No. 12-46050
Chapter 11 Petition filed July 19, 2012
In re Mostafa El-Erian
Bankr. D. D.C. Case No. 12-00515
Chapter 11 Petition filed July 19, 2012
In re Donald Wainwright
Bankr. M.D. Fla. Case No. 12-04697
Chapter 11 Petition filed July 19, 2012
In re Mary Pinion
Bankr. M.D. Fla. Case No. 12-10964
Chapter 11 Petition filed July 19, 2012
In re James Pinion
Bankr. M.D. Fla. Case No. 12-10965
Chapter 11 Petition filed July 19, 2012
In re Herman Levy
Bankr. S.D. Ga. Case No. 12-20802
Chapter 11 Petition filed July 19, 2012
In re Realestate, Mister Inc.
Bankr. D. Kans. Case No. 12-41128
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/ksb12-41128.pdf
represented by: Todd Allison, Esq.
LAW OFFICE OF TODD ALLISON, P.A.
E-mail: todd@toddallisonlaw.com
In re Central Center, LLC
Bankr. W.D. Ky. Case No. 12-10994
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/kywb12-10994.pdf
represented by: Scott A. Bachert, Esq.
HARNED BACHERT & MCGEHEE PSC
E-mail: bachert@hbmfirm.com
In re Felix's, Inc.
Bankr. E.D. La. Case No. 12-12137
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/laeb12-12137.pdf
Filed Pro Se
In re Cuppa Joe, L.L.C.
Bankr. W.D. Mich. Case No. 12-06700
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/miwb12-06700.pdf
represented by: Jeffrey C. Alandt, Esq.
JEFFREY C. ALANDT, ATTORNEY AT LAW
E-mail: jalandt@sbcglobal.net
In re Anthony Spinicchia
Bankr. D. Nev. Case No. 12-18460
Chapter 11 Petition filed July 19, 2012
In re JNJ Restaurant Supplies Inc.
dba JNJ International
Bankr. E.D.N.Y. Case No. 12-45258
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/nyeb12-45258.pdf
represented by: Ehsanul Habib, Esq.
LAW OFFICE OF EHSANUL HABIB
E-mail: ehsanulhbb@yahoo.com
In re 415 West 150 LLC
Bankr. S.D.N.Y. Case No. 12-13141
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/nysb12-13141.pdf
Filed Pro Se
In re George Eason
Bankr. E.D.N.C. Case No. 12-05220
Chapter 11 Petition filed July 19, 2012
In re Cheer's Entertainment and Sport Lounge, Inc.
aka Cheers Entertainment & Sport Lounge, Inc.
Cheer's Entertainment and Sports Lounge
Bankr. W.D. Pa. Case No. 12-23646
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/pawb12-23646p.pdf
See http://bankrupt.com/misc/pawb12-23646c.pdf
represented by: Steven T. Shreve, Esq.
E-mail: steveshreve@comcast.net
In re Kimberly Mills
Bankr. N.D. Tex. Case No. 12-44061
Chapter 11 Petition filed July 19, 2012
In re The Miller Professional Group, Inc.
dba MPG
Bankr. W.D. Wash. Case No. 12-45046
Chapter 11 Petition filed July 19, 2012
See http://bankrupt.com/misc/wawb12-45046.pdf
represented by: Andrew J. Liese, Esq.
CAIRNCROSS & HEMPELMANN PS
E-mail: aliese@cairncross.com
In re Wen Jiang
Bankr. C.D. Calif. Case No. 12-27015
Chapter 11 Petition filed July 20, 2012
In re Henk, LLC
Bankr. D. Conn. Case No. 12-21762
Chapter 11 Petition filed July 20, 2012
See http://bankrupt.com/misc/ctb12-21762.pdf
represented by: Ronald Chorches, Esq.
LAW OFFICES OF RONALD I. CHORCHES
E-mail: ronchorcheslaw@sbcglobal.net
In re Michael Boyle
Bankr. M.D. Fla. Case No. 12-04731
Chapter 11 Petition filed July 20, 2012
In re Fernando Malamud
Bankr. N.D. Fla. Case No. 12-50360
Chapter 11 Petition filed July 20, 2012
In re Pantera Boats, Inc.
Bankr. S.D. Fla. Case No. 12-27490
Chapter 11 Petition filed July 20, 2012
See http://bankrupt.com/misc/flsb12-27490.pdf
represented by: Dolores K. Sanchez, Esq.
LAW OFFICE OF DOLORES K. SANCHEZ
E-mail: dolores@bizhall.net
In re Jeffrey Smith
Bankr. D. Nev. Case No. 12-51688
Chapter 11 Petition filed July 20, 2012
In re Pampered Pet Resort, LLC
Bankr. D. N.J. Case No. 12-28125
Chapter 11 Petition filed July 20, 2012
See http://bankrupt.com/misc/njb12-28125.pdf
represented by: Barry W. Frost, Esq.
TEICH GROH
E-mail: bfrost@teichgroh.com
In re Alva Carter
Bankr. D. N.M. Case No. 12-12740
Chapter 11 Petition filed July 20, 2012
In re Alan Carter
Bankr. D. N.M. Case No. 12-12741
Chapter 11 Petition filed July 20, 2012
In re Mary Helen Carter
Bankr. D. N.M. Case No. 12-12742
Chapter 11 Petition filed July 20, 2012
In re SG&S Properties, LLC
aka North Carolina State Turpentine, LLC
Bankr. M.D.N.C. Case No. 12-81081
Chapter 11 Petition filed July 20, 2012
See http://bankrupt.com/misc/ncmb12-81081.pdf
represented by: Teadra Geshon Pugh, Esq.
CAROLINA LAW PARTNERS
E-mail: tgp@carolinalawpartners.com
In re Dennis Moses
Bankr. D. Ore. Case No. 12-35629
Chapter 11 Petition filed July 20, 2012
In re Armando Mena-Amador
Bankr. D. P.R. Case No. 12-05759
Chapter 11 Petition filed July 20, 2012
In re Fernando Salinas Dones
Bankr. D. P.R. Case No. 12-05766
Chapter 11 Petition filed July 20, 2012
In re Division Properties, LLC
Bankr. N.D. Tex. Case No. 12-34679
Chapter 11 Petition filed July 20, 2012
See http://bankrupt.com/misc/txnb12-34679.pdf
represented by: William F. Kunofsky, Esq.
LAW OFFICE OF WILLIAM F. KUNOFSKY
Email: ecffilings@debtfighters.com
In re Dung Nguyen
Bankr. W.D. Wash. Case No. 12-45054
Chapter 11 Petition filed July 20, 2012
In re Ofer Mizrahi
Bankr. S.D. Fla. Case No. 27559
Chapter 11 Petition filed July 22, 2012
In re Denise Downing
Bankr. N.D. Ill. Case No. 12-28932
Chapter 11 Petition filed July 22, 2012
In re Thomas Stanley
Bankr. S.D. Ala. Case No. 12-02518
Chapter 11 Petition filed July 23, 2012
In re Brandon Brown
Bankr. D. Ariz. Case No. 12-16359
Chapter 11 Petition filed July 23, 2012
In re Craig Steinhoff
Bankr. D. Ariz. Case No. 12-16437
Chapter 11 Petition filed July 23, 2012
In re Joann Saylor
Bankr. D. Ariz. Case No. 12-16393
Chapter 11 Petition filed July 23, 2012
In re Chungill Kim
Bankr. E.D. Calif. Case No. 12-33540
Chapter 11 Petition filed July 23, 2012
In re Gregory Tomalin
Bankr. D. Colo. Case No. 12-25374
Chapter 11 Petition filed July 23, 2012
In re ACE Hardware of New Smyrna Beach, Inc.
Bankr. M.D. Fla. Case No. 12-04767
Chapter 11 Petition filed July 23, 2012
See http://bankrupt.com/misc/flmb12-04767.pdf
represented by: Ronald Cutler, Esq.
Ronald Cutler PA
E-mail: ronaldcutlerpa@bellsouth.net
In re SkinSpa of Naples, Inc.
Bankr. M.D. Fla. Case No. 12-11162
Chapter 11 Petition filed July 23, 2012
See http://bankrupt.com/misc/flmb12-11162.pdf
represented by: Linda Kay Yerger, Esq.
Yerger/Tyler P.A.
E-mail: lkyerger@embarqmail.com
In re Jeffrey Ekiert
Bankr. S.D. Fla. Case No. 12-27647
Chapter 11 Petition filed July 23, 2012
In re Zen Group, Inc.
dba Barrio Urban Taqueria
Bankr. N.D. Ill. Case No. 12-28937
Chapter 11 Petition filed July 23, 2012
See http://bankrupt.com/misc/ilnb12-28937.pdf
represented by: John Ellsworth, Esq.
John Ellsworth Law Offices
E-mail: ellsworthlegal@yahoo.com
In re Christine Tash
Bankr. E.D. Mich. Case No. 12-57097
Chapter 11 Petition filed July 23, 2012
In re Kevin Tash
Bankr. E.D. Mich. Case No. 12-57097
Chapter 11 Petition filed July 23, 2012
In re William Coleman
Bankr. N.D. Miss. Case No. 12-13006
Chapter 11 Petition filed July 23, 2012
In re DP Construction Enterprise, Inc.
Bankr. W.D. Mo. Case No. 12-61375
Chapter 11 Petition filed July 23, 2012
See http://bankrupt.com/misc/mowb12-61375.pdf
represented by: Ted L. Tinsman, Esq.
The Courtney Law Firm, P.C.
E-mail: ted@thecourtneylawfirm.com
In re Oliver Sagebrush Dr
Bankr. D. Nev. Case No. 12-18558
Chapter 11 Petition filed July 23, 2012
See http://bankrupt.com/misc/nvb12-18558.pdf
represented by: Ryan Alexander, Esq.
Law Offices of Ryan Alexander
E-mail: ryan@thefirm-lv.com
In re AAZ Realty Corp
Bankr. E.D.N.Y. Case No. 12-74520
Chapter 11 Petition filed July 23, 2012
See http://bankrupt.com/misc/nyeb12-74520.pdf
Filed Pro Se
In re Charles Willis
Bankr. E.D. Pa. Case No. 12-16917
Chapter 11 Petition filed July 23, 2012
*********
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
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herein is obtained from sources believed to be reliable, but is
not guaranteed.
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*** End of Transmission ***