/raid1/www/Hosts/bankrupt/TCR_Public/120730.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, July 30, 2012, Vol. 16, No. 210
Headlines
30DC INC: CEO Edward Dale Discloses 27.5% Equity Stake
3210 RIVERDALE: Combined Plan Hearing on Aug. 7
38 STUDIOS: EDC Documents Provide Insight to Collapse
AMERICA CAPITAL: Fitch to Rate $600-Mil. Term Loan at 'BB/RR1'
AMERICAN AIRLINES: Sent Nondisclosure Agreement to US Airways
AMERICAN AIRLINES: USAir Hopes for Fair Merger Evaluation
AMERICAN AIRLINES: FA's Union Sends Offer for Voting
AMERICAN AIRLINES: Proposes Settlement With U.S. Bank
AMERICAN AIRLINES: To Assume Chicago Airport Lease
AMERICAN AIRLINES: Proposes Ford & Harrison as Special Counsel
AMERICAN PETRO-HUNTER: Appoints Andrew Lee as COO and Director
BAKERS FOOTWEAR: Four Directors Elected at Annual Meeting
BELMONT COMPANIES: Case Summary & 20 Largest Unsecured Creditors
BERNARD L. MADOFF: 2nd Payment of $1.5BB to $2.4BB to Customers
BILLMYPARENTS INC: Issues Pref. Shares & Warrants for $390,000
BOYD ACQUISITION: Moody's Assigns 'B2' CFR; Outlook Stable
BROADVIEW NETWORKS: Out-Of-Court or Ch. 11 Deadline Aug. 24
BROWNSTONE LOFTS: U.S. Trustee Wants Case Dismissal or Conversion
BROWNSTONE LOFTS: Taps Coleman Frost as General Bankruptcy Counsel
BRUNSWICK CORP: 11.25% Notes Call No Impact on Moody's Ba3 CFR
CAESARS ENTERTAINMENT: Bank Debt Trades at 12.42% Off
CAESARS ENTERTAINMENT: Stockholders OK Stock Exchange Program
CHINA BISTRO: S&P Gives 'B' Corp. Credit Rating; Outlook Stable
CHINA TEL GROUP: Unregistered Securities Sale Exceeds Threshold
CLEAR CHANNEL: Bank Debt Trades at 22.77% Off in Secondary Market
COEUR D'ALENE: Case Summary & 20 Largest Unsecured Creditors
COMMUNITY FIRST: Jon Thompson Named Bank VP and CFO
COMMUNITY SHORES: S. Bolhuis No Longer Has Shares as of June 25
CONVERGEX HOLDINGS: Moody's Cuts Corporate Family Rating to 'B2'
COVERINGS ETC.: Case Summary & 20 Largest Unsecured Creditors
CYMILL MOTORS: Case Summary & 15 Unsecured Creditors
DAE AVIATION: S&P Affirms 'B-' Corp. Credit Rating; Outlook Neg
DAIS ANALYTIC: Platinum-Montaur Discloses 9.9% Equity Stake
DEX MEDIA WEST: Bank Debt Trades at 40.21% Off in Secondary Market
DHILLON PROPERTIES: Final Hearing on Plan Confirmation on Sept. 4
DYNEGY INC: Taps Epiq Bankruptcy as Administrative Advisor
DYNEGY INC: Taps Epiq Bankruptcy as Notice and Claims Agent
EASTMAN KODAK: Apple Wants to Move Patent Case Out of Bankruptcy
EMMIS COMMUNICATIONS: J. Smulyan Holds 20.9% of Class A Shares
FIRST BANKS: Reports $7.1 Million Net Income in Second Quarter
FREDERICK'S OF HOLLYWOOD: TTG to Resell 28.4MM Common Shares
FREEDOM GROUP: S&P Alters Outlook to Negative, Keeps 'B+' CCR
FREEDOM GROUP: Moody's Rates $75MM Term Loan Add-On 'Ba3'
GARDNER ASSOCIATES: Case Summary & 2 Unsecured Creditors
GENERAL AUTO: Disclosure Statement Hearing on Sept. 24
GNC HOLDINGS: S&P Raises Corp. Credit Rating to BB; Outlook Stable
GLOBAL ARENA: To Acquire GACC Shares from Broad Sword and JSM
GOOD SAM: Reports $13.4% Revenue Growth in Second Quarter
GUAM POWER: Fitch Affirms 'B+' Rating on $56.1MM Revenue Bonds
HAMPTON ROADS: Incurs $5.7 Million Net Loss in Second Quarter
HAMPTON ROADS: Files Form S-1, Registers 64.3-Mil. Common Shares
HAWKER BEECHCRAFT: Deloitte OK'd as Tax Advisory Services Provider
HAWKER BEECHCRAFT: Martin Pringle OK'd as General Business Counsel
HAWKER BEECHCRAFT: Mercer OK'd as Benefit and Pension Consultants
HAWKER BEECHCRAFT: Bank Debt Trades at 28.37% Off
INOVA TECHNOLOGY: To Offer 375 Million Shares of Common Stock
INTELSAT SA: To Sell U.S. Headquarters to SL 4000 for $85 Million
JASPER BANKING: Closed; Stearns Bank Assumes All Deposits
JEFFERSON COUNTY, AL: BNY Mellon Demands to See Books, Sewer Data
JEFFERSON COUNTY, AL: Moody's Confirms 'Caa3' on Sewer Rev. Debt
JEWISH COMMUNITY CENTER: Aug. 6 Hearing on Plan Outline, Dismissal
JRG PROPERTIES: Case Summary & 5 Unsecured Creditors
LAKSILU, INC.: Case Summary & 20 Largest Unsecured Creditors
LEHMAN BROTHERS: Settles Dispute Over Swap Deal With Deutsche
LEHMAN BROTHERS: U.S. Trustee Opposes $33MM in Contribution Fees
LEHMAN BROTHERS: SIPA Trustee Proposes BlackRock Claims
LEHMAN BROTHERS: LBI Trustee Resolves Repo Claims Objections
LEVEL 3: To Sell $300 Million of 8.875% Senior Notes Due 2019
LIFEPOINT HOSPITALS: Fitch Rates New $450MM Senior Bank Loan 'BB+'
LIFEPOINT HOSPITALS: Moody's Rates New Sr. Sec. Facilities 'Ba1'
MANHATTAN CONTRACTING: Case Summary & Creditors List
MEDICAL CARD: S&P Alters Watch Status on 'CCC' CCR to Developing
MICHAELS STORES: John Menzer Resigns as CEO for Health Reasons
MOTHER EARTH'S ALTERNATIVE: Marijuana Dispensary Files Chapter 11
MOTORS LIQUIDATION: No Distribution of Units in Second Quarter
MPG OFFICE: Reports $80.2 Million Net Income in Second Quarter
NATIONAL HOLDINGS: Has Agreement to Pay $3MM Note on Jan. 31
NAVISTAR INT'L: Icahn Equity Stake Slightly Up to 14.5%
NATIONAL LITHO: Case Summary & 20 Largest Unsecured Creditors
NC MUTUAL: A.M. Best Affirms 'C++' Financial Strength Rating
NEOGENIX ONCOLOGY: Case Summary & Unsecured Creditor
NEW LEAF: Appoints Terry Kinder to Board of Directors
NEXSTAR BROADCASTING: Signs Asset Purchase Agreement with Newport
NORTHAMPTON GENERATING: Aug. 14 Hearing on Exclusivity Extension
NORTHSTAR AEROSPACE: Wins Approval of Assets Sale
OTOLOGICS, L.L.C.: Case Summary & 20 Largest Unsecured Creditors
PATIENT SAFETY: Five Directors Elected at Annual Meeting
PENINSULA GAMING: S&P Gives 'B+' Prelim Rating on $825MM Term Loan
PILOT TRAVEL: S&P Lowers Corp. Credit Rating to 'BB'
PLYMOUTH OIL: Case Summary & 20 Largest Unsecured Creditors
POLLACK ACADEMIC: S&P Cuts Rating on Series 2010 Bond to 'BB'
POSITIVEID CORP: Ironridge to Resell 34 Million Common Shares
POSITIVEID CORP: To Issue Add'l 19-Mil. Shares Under 2011 Plan
PRIUM SPOKANE: U.S. Trustee Withdraws Plea to Oust Management
RACKWISE INC: Kenneth Spiegeland Resigns from Board
RESIDENTIAL CAPITAL: U.S. Trustee Has Objections to Applications
RESIDENTIAL CAPITAL: Allstate Has Screening Wall for Trading
RESIDENTIAL CAPITAL: 6 State Court Suits Remain Stayed
RESIDENTIAL CAPITAL: FHFA Allowed to Access Loan Tapes, Other Info
REVEL ENTERTAINMENT: Bank Debt Trades at 18.25% Off
RITZ CAMERA: To Auction Assets on September 6
ROSCOE LLC: Faces Liquidation Under Chapter 7
ROSETTA GENOMICS: Ranit Aharonov-Gal Resigns as R&D EVP
SAN JOSE FINANCING: Fitch Keeps 'BB' Rating on $35MM Revenue Bonds
SAND TECHNOLOGY: Top Executives Quit Amid Strategic Review
SAVTIRA CORP: Judge Converts Case to Chapter 7 Proceeding
SAYA HOSPITALITY: Case Summary & 4 Unsecured Creditors
SEA REAL ESTATE: Voluntary Chapter 11 Case Summary
SIAG AERISYN: Wants Plan Filing Period Extended to Oct. 31
SNOHOMISH PUBLIC HOSPITAL: Fitch Cuts Rating on $2.9MM Bonds to B
SOUTHERN PRODUCTS: Incurs $881,000 Net Loss in May 31 Quarter
TALON THERAPEUTICS: James Flynn Ownership Down to 46.8%
TECHNEST HOLDINGS: Issues $100,000 Conv. Note to Southridge
THERAPEUTICSMD INC: Steven Johnson Discloses 9.5% Equity Stake
THERAPEUTICSMD INC: Robert Smith Discloses 9.5% Equity Stake
TOYS R US: Fitch Rates $350-Mil. Senior Unsecured Notes 'B'
TOYS R US: Moody's Assigns 'B3' Rating to $350MM Sr. Unsec. Notes
TOYS R US: S&P Rates $350MM Senior Notes Due 2017 at 'CCC+'
TRIBUNE CO: Bank Debt Trades at 27.91% Off in Secondary Market
TRONOX LTD: S&P Assigns 'BB' Corp. Credit Rating; Outlook Stable
TXU CORP: Bank Debt Trades at 36.65% Off in Secondary Market
TXU CORP: Bank Debt Trades at 32% Off in Secondary Market
UNI-PIXEL INC: Begins First Shipments of Diamond Guard
UNI-PIXEL INC: No Longer Considers Raptor Funds as Affiliates
UNI-PIXEL INC: Amends Form S-3 Registration Statement
UNIVERSAL AMERICAN: A.M. Best Affirms 'bb' Issuer Credit Rating
VANN'S INC: Major Lender Cuts Credit Line
VOICE ASSIST: Inks Software Development Contract with Augme
W.R. GRACE: Has $69.3 Million Net Income in Second Quarter
W.R. GRACE: Settles U.S. Claims Over Weedsport Site
W.R. GRACE: Anderson Fails to Win Plan Relief in Dist. Court
W.R. GRACE: Proposes Grant Thornton as Tax Advisor
W.R. GRACE: 8 Parties Bring Plan Appeals to Third Circuit
WAVEDIVISION HOLDINGS: S&P Assigns 'B+' Corp. Credit Rating
WEATHERFORD INT'L: Moody's Affirms 'P(Ba1)' Pref. Shelf Rating
WORLD SURVEILLANCE: Shareholders Elect Two Directors to Board
ZOGENIX INC: Has Public Offering of 32.5 Million Units
ZOGENIX INC: Has $22-Mil. Cash & Cash Equivalents as of June 30
* Jasper Bank Failure Brings Year's Total to 39 Banks
* Moody's Sees Developing Risks for US Higher Education Sector
* S&P's Global Corporate Default Tally Rises to 48
* 4th Circuit Appoints Rebecca Connelly as W.Va. Bankruptcy Judge
* White & Case's Gerard Uzzi Moves to Milbank Tweed
* BOND PRICING -- For Week From July 23 to 27, 2012
*********
30DC INC: CEO Edward Dale Discloses 27.5% Equity Stake
------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Edward W. Dale, chief executive officer and
director of 30DC, Inc., disclosed that, as of June 26, 2012, he
beneficially owns 20,036,440 shares of common stock of the Company
representing 27.47% of the shares outstanding.
Marillion Partnership beneficially owns 18,188,440 common shares
as of June 26. The Marillion Trust is a partner of the Marillion
Partnership. Mr. Dale is a beneficiary of the Marillion Trust.
A copy of the filing is available for free at:
http://is.gd/Z8rBXY
About 30DC Inc.
New York-based 30DC, Inc., provides Internet marketing services
and related training to help Internet companies in operating their
businesses. It operates in two divisions, 30 Day Challenge and
Immediate Edge.
The Company reported a net loss of $1.44 million for the fiscal
year ended June 30, 2011, following a net loss of $1.06 million in
fiscal 2010.
The Company's balance sheet at Dec. 31, 2011, showed $1.77 million
in total assets, $2.08 million in total liabilities and a $315,408
total stockholders' deficiency.
As of Dec. 31, 2011, the Company has a working capital deficit of
$1,873,000 and has accumulated losses of $3,050,100 since its
inception. The Company's ability to continue as a going concern
is dependent upon its ability of the Company to obtain the
necessary financing to meet its obligations and pay its
liabilities arising from normal business operations when they come
due and upon attaining profitable operations. The Company does
not have sufficient capital to meet its needs and continues to
seek loans or equity placements to cover those cash needs. No
commitments to provide additional funds have been made and there
can be no assurance that any additional funds will be available to
cover expenses as they may be incurred. If the Company is unable
to raise additional capital or encounters unforeseen
circumstances, it may be required to take additional measures to
conserve liquidity, which could include, but not necessarily be
limited to, issuance of additional shares of the Company's stock
to settle operating liabilities which would dilute existing
shareholders, curtailing its operations, suspending the pursuit of
its business plan and controlling overhead expenses. The Company
cannot provide any assurance that new financing will be available
to it on commercially acceptable terms, if at all. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
As reported in the TCR on Dec. 19, 2011, Marcum LLP, in New York,
expressed substantial doubt about 30DC's ability to continue as a
going concern, following the Company's results for the fiscal year
ended June 30, 2011. The independent auditors noted that the
Company has had recurring losses, and has a working capital and
stockholders' deficiency as of June 30, 2011.
3210 RIVERDALE: Combined Plan Hearing on Aug. 7
-----------------------------------------------
Judge James M. Peck will convene a combined hearing on the joint
plan of reorganization and disclosure statement of 3210 Riverdale
Associates LLC and on Aug. 7, 2012.
Objections to confirmation of the Plan and the adequacy of the
information in the Disclosure Statement are due July 31.
The Plan, which is co-proposed by the Debtor and senior lender
3210 Riverdale Avenue Partners LLC, provides that the senior
lender, owed $22.7 million would have a 78% recovery. In
satisfaction of the claim, the Debtor has agreed to convey its
property to the lender or its buyer designee. The lender would
waive its right to distribution on account of its unsecured
deficiency claim but retained the right to vote on account of the
claim.
Holders of unsecured claims totaling $230,000 to $1,000,000 would
have a recovery of 5% to 21.74%. Each would receive its pro rata
share of cash from a "plan funding account."
Equity holders would receive no distribution under the Plan.
In April, the senior lender filed a motion to dismiss the case or
for relief from the automatic stay to proceed with foreclosure.
The parties later reached a settlement. They agreed that the
Debtor would transfer its real estate property to the lender, that
the senior lender would provide "distributions to holders of
unsecured creditors."
Although equity holders won't receive anything, Michael F.
Waldman, who is the indirect holder of the equity interests, will
be employed by the buyer designee under a consulting agreement.
According to the Disclosure Statement, there is a cap of $75,000
on the overall contribution required by the senior lender, which
cap may be waived in the lender's sole discretion. The Debtor
belies that the distributions required to be made under the Plan
do not exceed that limit.
The Liquidation Analysis says that other than the secured claim of
the senior lender, no other creditors would likely receive a
distribution if the Debtor's assets were liquidated in a
hypothetical chapter 7 case.
A copy of the Disclosure Statement, dated July 2, 2012, is
available for free at:
http://bankrupt.com/misc/3210_Riverdale_DS_070212.pdf
About 3210 Riverdale
Bronx, New York-based 3210 Riverdale Development LLC filed for
Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-11109) on
March 20, 2012. Judge James M. Peck is assigned to the Debtor's
bankruptcy case.
3210 Riverdale owns certain real property and improvements located
at 3210 Riverdale Ave., 3217 Irwin Ave., and 3219 Irwin Ave., in
Bronx. The Chapter 11 filing stays an auction scheduled by the
secured lender. At the behest of HSBC Capital (USA) Inc.,
administrative lender, New York auctioneer Sheldon Good & Company
was set to conduct a public auction March 21 of 100% of the
limited liability company interests in 3210 Riverdale, pledged by
the Debtor to the lenders.
Riemer & Braunstein LLP, in New York, represented HSBC Capital in
the proposed sale.
Mark J. Friedman P.C., withdrew as counsel to the Debtor due to
breakdown in communication.
The Debtor is currently represented by:
Jonathan S. Pasternak, Esq.
RATTET PASTERNAK, LLP
550 Mamaroneck Avenue, Suite 510
Harrison, NY 10528
E-mail: jpasternak@rattetlaw.com
The parties behind 3210 Riverdale Avenue Partners LLC are:
Michael Davis
PLYMOUTH GROUP
450 West 33rd Street, Suite 187
New York, NY 10001
Tel: 212-695-7930
Fax: 646-403-4618
E-mail: Michael.davis@plymouthgroup.com
- and -
Laurence Rappaport
KABR GROUP
10 Forest Avenue
Paramus, NJ 07652
Tel: 201-845-2555
Fax: 201-843-0745
E-mail: lrappaport@kabrgroup.com
The senior lenders are represented by:
Andrew C. Gold, Esq.
HERRICK, FEINSTEIN LLP
2 Park Avenue
New York, NY 10016
Tel: 212-592-1459
E-mail: agold@herrick.com
38 STUDIOS: EDC Documents Provide Insight to Collapse
-----------------------------------------------------
Ted Nesi, WPRI.com Reporter, and Tim White, Target 12
Investigator, report that former Boston Red Sox pitcher Curt
Schilling's video game company 38 Studios blew through more than
$133 million before it collapsed into bankruptcy in June,
according to documents newly obtained by WPRI.com.
The report relates the nearly 1,100 pages of memos, e-mails and
financial statements provided by the R.I. Economic Development
Corporation under a public records request shed new light on how
in less than two years 38 Studios went from a high-profile company
championed by former Gov. Don Carcieri and House Speaker Gordon
Fox to a bankrupt enterprise that defaulted on its obligations and
laid off roughly 400 workers.
The report relates 38 Studios' operating expenses totaled $118
million between its founding in August 2006 and the end of 2011,
the documents show. 38 Studios earned no revenue during that
period; the bills were paid out of Mr. Schilling's personal
fortune and, starting in November 2010, proceeds from a $75
million taxpayer-backed loan awarded by the R.I. Economic
Development Corporation.
During the first three months of this year 38 Studios spent
another $15.4 million, including $5.4 million in March alone, but
also booked its first $27.7 million in revenue, the documents
show. Bankruptcy records show a 38 Studios subsidiary received a
$28.7 million advance from Electronic Arts in January after it
finished its first game, "Kingdoms of Amalur: Reckoning," which EA
published in February.
The report also relates the documents obtained by WPRI.com raise
new questions about whether 38 Studios executives were
overoptimistic about the company's prospects. Their business plan
projected the company would take in $109 million in revenue over
the course of this year, including $6.5 million a month from April
to June; $476,333 a month from July to September; and $19.9
million a month from October on.
According to the report, the documents don't offer a rationale for
those numbers, but 38 Studios executives told a bankruptcy trustee
they'd projected "Reckoning" would sell more than the 2 million
copies necessary for them to break even on the EA advance and
begin earning royalties. Actual sales totaled around 1.3 million
copies.
The report also notes analysts said 38 Studios' bigger problem was
its failure to attract investors other than Schilling himself and
the state of Rhode Island, which together kicked in an estimated
$100 million over the years.
AMERICA CAPITAL: Fitch to Rate $600-Mil. Term Loan at 'BB/RR1'
--------------------------------------------------------------
Fitch Ratings expects to rate American Capital's (ACAS) senior
secured revolver and $600 million term loan 'BB/RR1'. Proceeds
from the revolver and term loan will be used to repay all senior
secured and unsecured debt outstanding and for working capital and
general corporate purposes.
The expected ratings reflect the solid asset coverage on the term
loan and revolver as a result of the first lien on ACAS's assets
pledged to each facility and the joint first lien on the stock of
portfolio company, American Capital LLC. The ratings also reflect
ACAS's improved core operating performance, reduced leverage,
decline in non-accrual levels and appropriate leverage levels
relative to the company's significant equity investment exposure.
On June 26, 2012, Fitch revised the Rating Outlook on ACAS's long-
term IDR to Positive from Stable, revised the Recovery Ratings for
ACAS's secured debt to 'RR1' from 'RR2' and upgraded the debt and
recovery ratings for its unsecured debt to 'B+/RR1' from 'B-/RR6'
to reflect improved recovery prospects for creditors given an
increase in available collateral, reduced balance sheet leverage,
and shortened risk horizon to maturity. For more information on
Fitch's rating rationale and/or rating sensitivities, please see
the rating action commentary, 'Fitch Affirms BDC Ratings Following
Industry Peer Review; ACAS Outlook Revised' dated June 26, 2012.
Rating constraints include the potential impact of capital markets
volatility on leverage, given the need to fair value the portfolio
each quarter, which can generate material unrealized depreciation
on ACAS's outsized equity portfolio, dependence on capital markets
to fund portfolio growth, and relatively higher payment-in-kind
income levels versus industry peers.
ACAS is an internally managed business development company (BDC),
headquartered in Bethesda, MD, and completed its initial public
offering in August 1997. ACAS is the largest BDC by market
capitalization and asset size, with $6.4 billion of assets as of
March 31, 2012. The company's stock is listed on Nasdaq under the
ticker ACAS.
Fitch expects to assign the following ratings:
American Capital, Ltd
-- Senior secured revolver at 'BB/RR1';
-- $600 million senior secured term loan at 'BB/RR1'.
AMERICAN AIRLINES: Sent Nondisclosure Agreement to US Airways
-------------------------------------------------------------
The Wall Street Journal's Susan Carey and Mike Spector report that
American Airlines parent AMR Corp., which recently committed to
exploring possible merger scenarios as an alternative to its plan
to emerge from bankruptcy reorganization on its own, sent a
nondisclosure agreement to suitor US Airways Group Inc., according
to an internal memo sent to AMR managers.
The memo, reviewed by The Wall Street Journal, said the terms of
the confidentiality agreements, which would allow the potential
partners to learn proprietary information about AMR's business in
return for sharing the same about their own, were developed in
"full collaboration" with AMR's creditors committee. The memo
said AMR's goal is to seek the "highest value for our creditors
and the best outcome for our people."
The memo said copies of the same confidentiality agreement are
being sent to "others," presumably airlines that AMR has
identified as potential merger partners.
The report says US Airways late Friday said it received the
nondisclosure agreement and is reviewing it, but declined further
comment.
WSJ notes AMR, in consultation with its creditors committee,
targeted deal exploration with US Airways and four smaller
carriers JetBlue Airways; Alaska Air Group Inc.; Republic Airways
Holdings Inc.'s Frontier Airlines unit; and closely held Virgin
America.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: USAir Hopes for Fair Merger Evaluation
---------------------------------------------------------
US Airways Group Inc. Chief Executive Officer Doug Parker said he
expects AMR Corp. to set up a fair, transparent process to
evaluate merger options against its own Chapter 11 plan, according
to a July 25 report by Bloomberg News.
Mr. Parker said during a July 24 conference call that US Airways
should get documents from American Airlines Inc. soon that will
lay out the procedure and let the carriers examine each other's
financial records, Bloomberg reported.
US Airways has been pushing for a merger with its larger
competitor since January. It has been lobbying AMR creditors and
bondholders to build support for a merger, which would create the
world's largest airline.
Earlier, AMR Chief Executive Officer Tom Horton had said the
company is ready to evaluate possible mergers as an alternative
to a restructuring plan that would see it exit bankruptcy
protection on its own, according to a July 24 report by The Wall
Street Journal.
Mr. Horton said the evaluation process is going to be a "fair and
disciplined process."
AMR plans to hold discussions with other airlines and private-
equity firms. In a recent meeting with creditors, Mr. Horton
named four other airlines besides US Airways that the company
will study for possible deals, The Journal reported.
US Airways has not made a formal merger bid and is waiting for
AMR to set terms that would allow rivals to scour its financial
information to decide on a possible offer, Bloomberg reported.
Meanwhile, rising prices for AMR bonds are pointing toward success
for US Airways in its push to merge with AMR.
The most-actively traded debt, $460 million of 6.25% convertible,
unsecured notes due 2014, have almost quadrupled to 65 cents on
the dollar from 17.75 cents on November 29, when AMR filed for
bankruptcy, Bloomberg reported, citing Trace, the bond-price
reporting system of the Financial Industry Regulatory Authority,
as its source.
The debt jumped 3.3 cents on July 19 after the chief executive
officers of the airlines met to discuss a merger, according to the
report.
"The fact that the bonds are recovering shows that the unsecured
creditors think there will be a deal," Bloomberg News quoted Vicki
Bryan, a senior bond analyst with Gimme Credit LLC, as saying.
"No one is confident about their revenue generation plan. It's
worth more only on the idea that someone else will buy it."
Last week, AMR posted a quarterly profit of $95 million and said
sales rose to a record of $6.45 billion with higher fares.
Ray Neidl, an airline analyst with Maxim Group LLC, said the
improved results also boosted the bonds, Bloomberg reported.
"There's confidence in the value of the reorganization with or
without an acquisition," Bloomberg News quoted Mr. Neidl as
saying. "Those bonds started recovering long before US Airways
stepped in because there was confidence in the recovery. The
extra mileage in the increase is the US Airways potential
acquisition."
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: FA's Union Sends Offer for Voting
----------------------------------------------------
American Airlines flight attendants' union will send the bankrupt
carrier's final contract offer to members for a vote, becoming the
last labor group to do so, Carla Main of Bloomberg News reported.
The Association of Professional Flight Attendants executive
committee voted July 20 to send the plan to its 16,000 members,
the union said, according to Bloomberg. The terms include a
payment of $1,500 to every active flight attendant on the date of
signing, according to a union statement.
AMR Corp.'s American, the third-largest U.S. carrier, is counting
on labor for $1.25 billion of the $2 billion in cost reductions
needed for its restructuring plan, Bloomberg pointed out. Pilots
and mechanics will begin voting on Fort Worth, Texas-based
American's final offers, and baggage handlers and other airport
ground workers have accepted concessions sought by the airline.
The APFA negotiating team worked for more than four years on a
contract deal before talks were halted in November by American's
bankruptcy filing, union President Laura Glading said in a
statement to members, Bloomberg cited.
Balloting is occurring after American asked the judge overseeing
its bankruptcy for permission to throw out existing contracts and
impose new wage and work rules to reach needed savings. U.S.
Bankruptcy Judge Sean Lane has said he will rule on that request
Aug. 15 if agreements aren't obtained by then.
The APFA, Allied Pilots Association and Transport Workers Union,
which represent more than 55,000 American employees, reached
labor agreements in April with US Airways Group Inc., which has
said it wants to merge with American, Bloomberg pointed out.
Those labor accords take effect only if the carriers combine.
TWA Pilots Motion to Intervene Denied
Meanwhile, Judge Sean Lane shot down as untimely a bid by a
company representing former Trans World Airline pilots, now
subsumed into bankrupt AMR Corp. unit American Airlines Inc.,
objecting to AMR's plans to jettison union agreements, Lisa Uhlman
of Bankruptcy Law360 reported on July 19.
Judge Lane rejected TWA Pilots Seniority Defense Fund LLC's
motion to intervene in the dispute as essentially too much, too
late, the report said.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Proposes Settlement With U.S. Bank
-----------------------------------------------------
AMR Corp. and its affiliated debtors asked the U.S. Bankruptcy
Court for the Southern District of New York to approve a
settlement of claims related to six aircraft leased by the
company.
The settlement was entered into by AMR's subsidiary American
Airlines Inc., U.S. Bank N.A., and certificate holders of loan
under certain financing transactions.
The deal, if approved, will resolve the claims of the certificate
holders and U.S. Bank, which serves as trustee under the
indentures related to the six aircraft identified by U.S. Federal
Aviation Administration Nos. N59523, N614AA, N626AA, N629AA,
N632AA and N648AA.
The proposed settlement is memorialized in six separate
agreements, which are not publicly available as they reportedly
contain "sensitive commercial" information, according to court
papers.
AMR leased the six aircraft prior to its bankruptcy filing.
Pursuant to a court order issued late last year, the company
rejected the leases and returned the aircraft effective
February 29, 2012.
A court hearing to consider approval of the settlement is
scheduled for August 8. Objections are due by August 1.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: To Assume Chicago Airport Lease
--------------------------------------------------
AMR Corp. seeks permission from the U.S. Bankruptcy Court for the
Southern District of New York to assume a contract between
American Airlines Inc. and the City of Chicago.
American Airlines, an AMR subsidiary, entered into the contract in
1990 to lease commercial space at the Chicago O'Hare International
Airport.
AMR lawyer, Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in
New York, said the lease is "critical" to the company's business
operations and "enhances the value" of AMR estate.
A court hearing is scheduled for August 8. Objections are due by
August 1.
In a separate filing, the Debtors submitted to Court an amended
exhibit of assumed leases and consensual lease extensions. In
particular, the Debtors removed its Maintenance Base Lease with
the Tulsa Municipal Airport Trust from the list of assumed leases
and placed it on the list of consensual lease extensions.
In an agreed order signed by Judge Sean H. Lane, the Debtors are
authorized to assume 18 agreements with Dallas/Fort Worth
International Airport Board in their entirety as they currently
exist including, without limitation, all amendments and
modifications thereto and all rights and interests in and
respecting the Assumed DFW Agreements and further including
without limitation, all insurance coverage, environmental and
other indemnification obligations contained in the Assumed DFW
Agreements. The Court granted DFW an allowed claim in the
aggregate amount of $11,006,198 in cure of all agreed existing
defaults under the Assumed DFW Agreements.
The Debtors and the City of Phoenix earlier agreed to the
Debtors' assumption of three leases between the Debtors and the
City and that at least $266,558 is owed in connection with the
City Agreements. The Court approved the Debtors' assumption of
the City Agreements. The Debtors have reserved their rights on
the issue of whether any agreement they assumed pursuant to the
Order is an unexpired lease of nonresidential real property, a
true lease, or a financing arrangement. The Parties have agreed
to the Additional Cure Amount due and owing to the City. In a
Court-approved stipulation, the Parties agree that the Additional
Cure Amount for the City Agreements will be $11,996, which must
be paid on or before July 27, 2012.
The Debtors and the Port Authority of New York and New Jersey
earlier agreed to the Debtors' assumption of eleven agreements
between the Debtors and the Port Authority. The Court approved
the Debtors' assumption of the Port Authority Agreements. The
Debtors have reserved their rights on the issue of whether any
agreement they assumed pursuant to the Order is an unexpired
lease of nonresidential real property, a true lease, or a
financing arrangement. Now, the Parties have agreed to the Cure
Amount due and owing to the Port Authority. In a Court-approved
stipulation, the Parties agree that the Cure Amount for the Port
Authority Agreements will be $7,633,208. Of this amount,
$6,167,094 is owed by American Airlines, Inc., and $1,466,114 is
owed by American Eagle Airlines, Inc. The Debtors will pay the
Cure Amount on or before July 27, 2012.
The Court authorized the Debtors to assume nine additional
unexpired leases of non-residential real property -- three of the
leases are with Dallas/Fort Worth International Airport, one is
with Boston-Logan International Airport, one is with John F.
Kennedy International Airport while four are with Philadelphia
International Airport. Except for the $224,432 cure amount due
to Philadelphia International Airport, the rest had $0 cure
amounts.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Proposes Ford & Harrison as Special Counsel
--------------------------------------------------------------
AMR Corp. and its affiliated debtors filed an application to hire
Ford & Harrison LLP as their special counsel.
Ford & Harrison has served as an "ordinary course" professional
of the company. The firm's compensation, however, is expected to
exceed the $500,000 cap, prompting AMR to file the application
pursuant to Section 327 of the Bankruptcy Code.
As special counsel, Ford & Harrison will continue to provide
legal services, which include assisting the company and its
subsidiaries in their collective bargaining agreements with labor
unions. AMR will also continue to assign grievance arbitrations
to the firm.
Ford & Harrison will be paid on hourly basis for its services and
will be reimbursed of its expenses. The attorneys expected to be
the most active in AMR's bankruptcy case and their respective
hourly rates are:
Attorneys Billing Rates
--------- -------------
Thomas Kassin $465
Marc Esposito $435
Doug Hall $435
Julie Showers $415
Dave Driscoll $415
Lilia Bell $415
Thomas French $415
Mark Konkel $400
M. Blake Martin $275
The firm does not represent interests materially adverse to the
interests of AMR's estate, according to a declaration by Thomas
Kassin, Esq., a partner at Ford & Harrison.
A court hearing is scheduled for August 8. Objections are due by
August 1.
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN PETRO-HUNTER: Appoints Andrew Lee as COO and Director
--------------------------------------------------------------
American Petro-Hunter, Inc., appointed Andrew Lee as Chief
Operating Officer and as member of the Company's Board of
Directors.
Mr. Lee is the Director of Operations at ASYM Energy Partners LLC,
where he is responsible for the development and direction of
ASYM's reservoir development strategy, resource exploitation
initiatives and all facets of due diligence related matters.
Prior to joining ASYM, Mr. Lee worked as an equity analyst for
Palo Alto Investors, a hedge fund where he covered the E&P and
Oilfield Service sectors. From 1999-2006, Mr. Lee worked for
ExxonMobil, where he distinguished himself as Lead Drilling
Engineer on the firm's multi-billion dollar European Development
Drilling Project in Norway for four years, during which time he
drilled multiple world-class extended reach wells. Mr. Lee also
has drilling experience in the Rockies, West Texas and the Gulf of
Mexico. Mr. Lee graduated from MIT with dual BS degrees in
Mechanical Engineering and Political Science and received his MBA
from The Wharton School, University of Pennsylvania.
Mr. Lee will be immediately responsible for all field operations
in the development of the Company's oil and gas projects in
Oklahoma and Kansas.
In other related news, Mr. John Lennon has resigned from the Board
to pursue other ventures and the Company thanks him for his
services. Company President & CEO Mr. Robert McIntosh has agreed
to act and assume the duties as interim Chief Financial Officer
until a suitable replacement is identified and hired.
About American Petro-Hunter
Scottsdale, Ariz.-based American Petro-Hunter, Inc., is an oil and
natural gas exploration and production (E&P) company with current
projects in Kansas and Oklahoma. As of March 15, 2012, the
Company has two producing wells in Kansas and six producing wells
in Oklahoma. It also has rights for the exploration and
production of oil and gas on an aggregate of approximately 6,230
acres in those states. This includes the Company's core assets
with rights to explore on 2,000 acres in Oklahoma, near the town
of Ripley on the North Oklahoma Mississippi Project and a forty
percent (40%) working interest in 3,000 acres in south-central
Oklahoma (the "South Oklahoma Lease").
The Company's balance sheet at March 31, 2012, showed $1.88
million in total assets, $1.90 million in total liabilities, and a
stockholders' deficit of $24,688.
The Company's balance sheet at Dec. 31, 2011, showed $2.1 million
in total assets, $4.2 million in current liabilities, and a
stockholders' deficit of $2.1 million.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Weaver Martin &
Samyn, LLC, in Kansas City, Missouri, expressed substantial doubt
about American Petro-Hunter's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses from operations and is dependent upon
the continued sale of its securities or obtaining debt financing
for funds to meet its cash requirements.
The Company reported a net loss of $2.7 million on $317,900 of
revenue for the year 2011, compared with a net loss of
$2.5 million on $92,800 of revenue for 2010.
BAKERS FOOTWEAR: Four Directors Elected at Annual Meeting
---------------------------------------------------------
Bakers Footwear Group, Inc., held its annual meeting of
shareholders on July 18, 2012. The shareholders elected four
directors to serve until the Company's 2013 Annual Meeting, or
until a successor is elected and qualified, namely: (1) Peter A.
Edison, (2) Timothy F. Finley, (3) Harry E. Rich, and (4)
Scott C. Schnuck. The shareholders ratified the appointment of
Ernst & Young LLP as the Company's independent registered public
accounting firm for fiscal year 2012.
About Bakers Footwear
St. Louis, Mo.-based Bakers Footwear Group, Inc. (OTC BB: BKRS.OB)
is a national, mall-based, specialty retailer of distinctive
footwear and accessories for young women. The Company's
merchandise includes private label and national brand dress,
casual and sport shoes, boots, sandals and accessories. The
Company currently operates 231 stores nationwide. Bakers' stores
focus on women between the ages of 16 and 35. Wild Pair stores
offer fashion-forward footwear to both women and men between the
ages of 17 and 29.
The Company reported a net loss of $10.95 million for the
year ended Jan. 28, 2012, a net loss of $9.29 million for the year
ended Jan. 29, 2011, and a net loss of $9.08 million for the year
ended Jan. 30, 2010.
After auditing the Company's financial results for fiscal 2012,
Ernst & Young LLP, in St. Louis, Missouri, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has incurred
substantial losses from operations in recent years and has a
significant working capital deficiency.
The Company reported a net loss of $10.95 million on
$185.09 million of net sales for the 52 weeks ended Jan. 28, 2012,
compared with a net loss of $9.29 million on $185.62 million of
net sales for the 52 weeks ended Jan. 29, 2011.
The Company's balance sheet at April 28, 2012, showed $41.90
million in total assets, $59.49 million in total liabilities and a
$17.59 million total shareholders' deficit.
Bankruptcy Warning
The Company said in the Form 10-K for the year ended Jan. 28,
2012, that if it does not achieve its updated business plan and
its margin improvement and cost reduction plan, or if the Company
were to incur significant unplanned cash outlays, it would become
necessary for the Company to quickly seek additional sources of
liquidity, or to find additional cost cutting measures. Any
future financing would be subject to the Company's financial
results, market conditions and the consent of the Company's
lenders. The Company may not be able to obtain additional
financing or it may only be able to obtain such financing on terms
that are substantially dilutive to the Company's current
shareholders and that may further restrict the Company's business
activities. If the Company cannot obtain needed financing, its
operations may be materially negatively impacted and the Company
may be forced into bankruptcy or to cease operations.
BELMONT COMPANIES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: The Belmont Companies, a California corporation
dba Yankee Doodles
4100 E. Ocean Boulevard
Long Beach, CA 90803
Bankruptcy Case No.: 12-35150
Chapter 11 Petition Date: July 21, 2012
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Sandra R. Klein
Debtor's Counsel: Kirk Brennan, Esq.
CALIFORNIA LAW OFFICE, P.C.
21250 Hawthorne Boulevard, Suite 500
Torrance, CA 90503
Tel: (310) 922-9330
Fax: (310) 375-6141
E-mail: calilawofficeecf@gmail.com
Scheduled Assets: $80,450
Scheduled Liabilities: $1,036,158
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/cacb12-35150.pdf
The petition was signed by Mark Nevin, president.
BERNARD L. MADOFF: 2nd Payment of $1.5BB to $2.4BB to Customers
---------------------------------------------------------------
Irving H. Picard, the SIPA Trustee for the liquidation of Bernard
L. Madoff Investment Securities LLC, on Thursday filed a motion in
the U.S. Bankruptcy Court for the Southern District of New York
seeking approval for an allocation of recovered monies to the
BLMIS Customer Fund and for a second pro rata interim distribution
-- of a minimum of approximately $1.5 billion and up to
approximately $2.4 billion -- from the Customer Fund to BLMIS
customers with allowed claims.
Linda Sandler at Bloomberg News reports that some investors found
the amount disappointing. "I'm hearing from investors that they
were expecting a larger distribution," said Joseph Sarachek,
managing director of claims trading at CRT Capital Group LLC,
which buys and sells distressed debt including that of Madoff's
brokerage. "I think the trustee is doing a great job in moving the
ball forward."
Customers received a total of $333 million from the first
distribution.
Bloomberg notes that court challenges had been tying up the
majority of the $9 billion that Mr. Picard has raised in the 3-1/2
years since Mr. Madoff's 2008 arrest, mostly through settlements.
According to a statement by Mr. Picard, the second interim
distribution, when combined with the funds already returned to
BLMIS customers would -- at a minimum -- satisfy roughly 46% of
the current allowed claims in the BLMIS liquidation and could
satisfy up to roughly 50% of the current allowed claims.
On June 25, 2012, the United States Supreme Court declined to
review the net equity calculation formula in the Madoff
liquidation, thus making funds held in reserve for net equity
available for distribution. In addition, on July 16, 2012, the
deadline for further appeals of the approximately $7.2 billion
Picower forfeiture to the United States Government expired, making
the forfeiture order final. This released the $5 billion Picower
settlement funds to the SIPA Trustee, a portion of which will be
included in this distribution.
"This distribution motion is another major milestone in the
worldwide Madoff recovery effort," said Mr. Picard. "The denial of
certiorari by the Supreme Court and the release of the Picower
settlement funds are great news for BLMIS customers and we will
move quickly to make the distribution."
The motion requests approval from the Bankruptcy Court to allocate
approximately $5.5 billion to the Customer Fund from which the
distribution will be made. A large portion of the allocated funds
must be held in reserve pending the resolution of objections
seeking inflation or interest adjustments to claim amounts, as
well as appeals to other settlements. Additional funds must also
be held in reserve in the Customer Fund pending the outcome of
litigation involving 237 claims that may become allowed once those
litigations are resolved.
"Distributing more money to customers with allowed claims brings
us closer to our goal. However, we continue to grapple with
issues, mostly objections, that seek to redirect funds that could
be going to approved claimants now," said David J. Sheehan, Chief
Counsel to the SIPA Trustee. "An objection that in particular
affects the amount of the second interim distribution is the
question of whether claimants are entitled to 'time-based
damages,' which are payments based on the time elapsed while
customer monies were deposited with BLMIS. This is the reason why
a significant portion of the Customer Fund cannot be distributed
at this time."
More than 1,240 objections have been filed relating to the time-
based damages issue. The objections relate to additional payments
based on an existing New York state statutory rate of 9%,
inflation, or other damages calculations.
"These arguments are specious at best," said Mr. Sheehan. "The
Securities Investor Protection Act (SIPA) does not provide for
interest or inflationary adjustments and no basis in common law
exists either. In addition, time-based damages run afoul of the
court rulings on net equity, because those payments would come at
the expense of 'net losers,' who have not yet recouped their
initial BLMIS principal investment."
Mr. Sheehan noted that even though there is no basis for such
damages, until the issue is resolved by the court and there is a
final, nonappealable order on which to proceed, the SIPA Trustee
must nevertheless establish a reserve.
"If the objections were withdrawn, the SIPA Trustee would not be
required to maintain any reserve for this issue, and he could
distribute more than $3 billion, or approximately 42 percent of
each allowed claim amount, unless the claim is fully satisfied,"
said Mr. Sheehan. "By contrast, if we must maintain the maximum
reserve reflecting a 9 percent interest rate for time-based
damages, which is the highest rate that objecting claimants have
asserted they are entitled to, the SIPA Trustee is only able to
distribute approximately $1.5 billion, or approximately 20.5
percent of each allowed claim amount, unless the claim is fully
satisfied. For customers with allowed claims who have waited
patiently for more than three years to receive some recovery of
their stolen principal, the difference between the two
distribution percentages is clearly substantial."
Mr. Sheehan said that the SIPA Trustee, recognizing that a 9%
interest rate is unrealistic in the current economic environment
and would not likely be approved by any court, is seeking approval
from the Bankruptcy Court for a reserve based on a 3% interest
rate, which reflects a more reasonable basis for the reserve on
the time-based damages issue. If objections to the 3% reserve are
filed by third parties and cannot be resolved prior to the entry
of an allocation and distribution order, the SIPA Trustee may opt
to seek approval for an order to use a 9% reserve.
Under the 3% reserve scenario, 1,229 BLMIS accounts will receive a
distribution of approximately $2.5 billion or approximately 33.5%
of their allowed claim amount, unless the claim is fully
satisfied. The average payment would be nearly $2 million. Of
these accounts, 181 will become fully satisfied, bringing the
total of fully satisfied account holders to 1,067 (1,048 accounts
will remain partially satisfied and will be entitled to
participate in future interim distributions).
Under the 9% reserve scenario, the 1,229 accounts will receive a
distribution of approximately $1.5 billion or approximately 20.5%
of their allowed claim amount, unless the claim is fully
satisfied. The average payment would be more than $1.2 million. Of
these accounts, 100 will become fully satisfied, bringing the
total of fully satisfied account holders to 986 (1,129 accounts
will remain partially satisfied and will be entitled to
participate in future interim distributions).
Additional interim distributions are conditioned upon the
resolution of other settlement appeals including a $1.025 billion
Tremont settlement and a $220 million settlement with the Norman
F. Levy family. In addition, the IRS settlement requires a $103
million settlement reserve.
Mr. Sheehan also noted that there are 237 claims that are still
subject to litigation. Once the related litigation is resolved,
these claims may become allowed and would become eligible for all
pro rata distributions to date. The SIPA Trustee must set aside
sufficient funds for this scenario; thus the related pool of
monies being held in reserve in the Customer Fund is currently
approximately $3.036 billion under a 9% time-based damages
scenario and approximately $1.861 billion under a 3% time-based
damages scenario.
The SIPA Trustee has recovered or reached agreements to recover
more than $9.1 billion, equivalent to approximately $7 million a
day for BLMIS customers since his appointment in December 2008.
These recoveries exceed prior recovery efforts related to all
other Ponzi schemes, in terms of dollar value and percentage of
stolen funds recovered.
To date, the SIPA Trustee in the BLMIS liquidation has distributed
more than $1.1 billion to Bernard Madoff's victims. The first
interim pro rata distribution of approximately $335.5 million in
recovered monies from the BLMIS Customer Fund to BLMIS customers
-- on allowed claims relating to 1,243 accounts, or about 4.6% of
each allowed claim amount, unless the claim has been fully
satisfied -- commenced on October 5, 2011. In addition, the SIPA
Trustee has paid approximately $802.3 million in advances from
SIPC to BLMIS customers with allowed claims.
"Additional, significant interim distributions are still ahead for
the victims of the Madoff fraud," said Mr. Picard. "We anticipate
recovering more stolen assets through litigation and settlements.
Final resolution of disputes will permit us to reduce reserve
amounts and distribute those funds to customers in the future. As
these uncertainties are resolved, we will seek authorization for
further allocations and distributions as quickly as possible."
Information on overall recoveries to date, each settlement, the
appeal status of a particular settlement and many other issues can
be found on the SIPA Trustee's Web site --
http://www.madofftrustee.com/
A copy of the Customer Fund Allocation and Distribution Motion is
available on the SIPA Trustee's Web site at
http://www.madofftrustee.comas well as on the United States
Bankruptcy Court's Web site at http://www.nysb.uscourts.gov/;
docket number Bankr. S.D.N.Y., No. 08-01789 (BRL).
A hearing on the motion has been set for August 22, 2012.
In addition to Mr. Sheehan, other Baker Hostetler attorneys who
worked on the distribution and related filings include: Seanna
Brown, Jorian Rose, Jacqlyn Rovine, Thomas Wearsch, Bik Cheema and
Brian Bash.
The Madoff brokerage liquidation case is Securities Investor
Protection Corp. v. Bernard L. Madoff Investment Securities LLC,
08-01789, U.S. Bankruptcy Court, Southern District of New York
(Manhattan).
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New York granted the application of the Securities Investor
Protection Corporation for a decree adjudicating that the
customers of BLMIS are in need of the protection afforded by the
Securities Investor Protection Act of 1970. The District Court's
Protective Order (i) appointed Irving H. Picard, Esq., as trustee
for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP
as his counsel, and (iii) removed the SIPA Liquidation proceeding
to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789)
(Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims
agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
The SIPA Trustee has said that as of March 31, 2012, through
prepetition litigation and other settlements, he has successfully
recovered, or reached agreements to recover, more than $9 billion
-- over 50% of the principal lost in the Ponzi scheme by those who
filed claims -- for the benefit of all customers of BLMIS.
The liquidation has so far has cost the Securities Investor
Protection Corp. $1.3 billion, including $791 million to pay a
portion of customers' claims.
Mr. Picard has so far made only one distribution in October of
$325 million for 1,232 customer accounts. Uncertainty created by
the appeals has limited Mr. Picard's ability to distribute
recovered funds. Outstanding appeals include the $5 billion
Picower settlement and the $1.025 billion settlement.
BILLMYPARENTS INC: Issues Pref. Shares & Warrants for $390,000
--------------------------------------------------------------
BillMyParents, Inc., entered into subscription agreements with
five accredited investors pursuant to which the Company issued 390
shares of its Series B Preferred Stock (convertible into 975,000
shares of the Company's Common Stock), five year warrants to
purchase up to an additional 243,750 shares of the Company's
Common Stock at an exercise price of $0.60 per share, in exchange
for gross proceeds totaling $390,000.
This financing transaction resulted in net proceeds to the Company
of approximately $345,000 after deducting fees and expenses. The
placement agent, a FINRA registered broker-dealer, in connection
with the financing received a cash fee totaling $39,000 and will
receive warrants to purchase up to 97,500 shares of Common Stock
at an exercise price of $0.60 per share as compensation.
Each investor received one share of the Company's Series B
Preferred Stock for the purchase price of $1,000 per share
(convertible into 2,500 shares of our Common Stock). Each
investor who invested less than $500,000 also received a warrant
to purchase up to 625 shares of our Common Stock for each share
purchased at an exercise price of $0.60 per share. Each investor
who invested $500,000 or more in the offering received a warrant
to purchase up to 2,500 shares of our Common Stock for each share
purchased at an exercise price of $0.50 per share.
A copy of the Subscription Agreement is available for free at:
http://is.gd/fQnbbT
About BillMyParents
San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards
with special features aimed at young people and their parents.
BMP is designed to enable parents and young people to collaborate
toward the goal of responsible spending.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, BDO USA, LLP,
expressed substantial doubt about the Company's ability to
continue as a going concern. BDO noted that the Company has
incurred net losses since inception and has an accumulated deficit
and stockholders' deficiency at Sept. 30, 2011.
The Company reported a net loss of $14.2 million for the fiscal
year ended Sept. 30, 2011, compared with a net loss of
$6.9 million for the fiscal year ended Sept. 30, 2010.
The Company's balance sheet at March 31, 2012, showed
$1.19 million in total assets, $1.18 million in total liabilities,
all current, and $6,797 in total stockholders' equity.
BOYD ACQUISITION: Moody's Assigns 'B2' CFR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family and
Probability of Default rating to Boyd Acquisition Sub, LLC. A B1
rating was assigned to the company's proposed $825 million 5-year
first lien term loan and a Ba2 was assigned to its $50 million
super priority 5-year revolver. The rating outlook is stable.
Boyd Acquisition Sub, LLC was created to fund Boyd Gaming
Corporation's ("Boyd"; B2, stable) pending acquisition of
Peninsula Gaming, LLC ("Peninsula"; B2, stable). On May 16, 2012,
Boyd announced that it had signed an agreement to acquire
Peninsula for $1.45 billion in cash and debt. At that time, Boyd
publicly stated that it intended to fund the transaction with $200
million in cash, approximately $1.2 billion in mostly pre-payable
bank debt at Boyd Acquisition Sub, LLC, the subsidiary for which
Boyd has obtained committed financing, and a $144 million seller
note provided by Peninsula. Proceeds from the proposed $875
million credit facilities will be used to partly fund Boyd's
acquisition of Peninsula. Moody's ratings on Boyd Acquisition Sub,
LLC assume the acquisition will close and be funded according to
Boyd's publicly stated financing plan. The proposed credit
facility is expected to close and fund simultaneously with the
closing of the acquisition, which is currently scheduled to close
by December 31, 2012. Upon closing, Boyd Acquisition Sub, LLC will
be a 100% wholly-owned unrestricted subsidiary of Boyd, and will
be merged into Peninsula Gaming, LLC who will assume all the
obligations of Boyd Acquisition Sub LLC..
The bond indentures of Peninsula's existing senior secured notes
due 2015 and senior unsecured notes due 2017 contain change of
control provisions that would require the company to repurchase
all bonds outstanding if the proposed acquisition is completed. If
the bonds are paid in full, Moody's will withdraw all ratings on
Peninsula in accordance with Moody's policies on rating
withdrawals. In the interim, Peninsula's ratings will continue to
be based on the company's stand-alone fundamentals and underlying
credit attributes, adjusted as circumstances warrant.
New ratings assigned:
Corporate Family Rating at B2
Probability of Default Rating at B2
$50 million 5-year superpriority revolver at Ba2 (LGD 1, 1%)
$825 million 5-year first lien term loan at B1 (LGD 3, 33%)
Ratings Rationale
The B2 Corporate Family Rating reflects Boyd Acquisition Sub,
LLC's high pro forma leverage of about 6.7 times. This is a direct
result of the 7.6 times purchase price multiple. This multiple is
based on a $200 million run-rate EBITDA amount for Peninsula which
incorporates a full-year estimate of its Kansas Star casino
facility (opened December 2011) less $10 million of corporate
expenses.
Positive rating consideration is given to the successful ramp-up
and favorable outlook of Peninsula's Kansas Star Casino. Moody's
expects this property will continue to benefit from limited amount
of direct competition, generate a relatively high property-level
EBITDA margin, and soon become Peninsula's largest revenue and
EBITDA contributor. Also considered is the strong performance of
the company's Iowa casinos that currently account for about 43% of
Peninsula's consolidated net revenue and about 38% of the
company's consolidated property-level EBITDA.
The B1 rating on the proposed $825 million term loan, one-notch
above Boyd Acquisition Sub, LLC's Corporate Family Rating,
considers the pro forma credit support that will be provided by
the $350 million senior unsecured notes that Boyd Acquisition Sub,
LLC plans to offer as part of the overall acquisition financing,
and the $144 million seller note that will also be part of the
acquisition financing. The Ba2 rating on the $50 million revolver
considers that while it shares the same collateral as the term
loan, it has a super priority status over the term loan.
The stable rating outlook incorporates Moody's view that while
Peninsula's EBITDA will grow, and the company is expected to
generate a meaningful amount of free cash flow, debt/EBITDA will
likely remain above 5.5 times during the next two years, a level
that is consistent with a 'B' category Corporate Family Rating,
according to Moody's Global Gaming methodology.
The stable outlook also considers Moody's view that Boyd will
ultimately engage in a separate and distinct financing sometime
after the initial acquisition closes that will allow the company
to fold the Peninsula assets into its restricted group structure.
Given Moody's understanding of Boyd's longer-term plans to fold
Peninsula into its restricted group structure sometime after the
acquisition closes, a higher rating is not likely in the
foreseeable future. A lower rating could occur if Peninsula's
stand-alone results deteriorate materially for any reason prior to
the acquisition becoming effective. Ratings could also be lowered
if it appears that Peninsula as a stand-alone entity will not be
able to improve its leverage over the next 12-month period.
The principal methodology used in rating Boyd Acquisition Sub, LLC
was the Global Gaming Industry Methodology published in December
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Boyd Acquisition Sub, LLC is a 100% wholly-owned subsidiary of
Boyd Gaming Corporation and was created to fund Boyd Gaming
Corporation's pending acquisition of Peninsula Gaming, LLC. Upon
acquisition closing, Boyd Acquisition Sub, LLC will remain a 100%
wholly-owned unrestricted subsidiary of Boyd, and will be merged
into Peninsula Gaming, LLC.
Peninsula Gaming, LLC is an owner and operator of five locals-
oriented gaming properties, two of which are located in Iowa, two
in Louisiana and the recently opened Kansas Star Casino in
Mulvane, Kansas.
Boyd Gaming Corporation wholly-owns and operates gaming and
entertainment facilities located in Nevada, Mississippi, Illinois,
Louisiana, and Indiana. Boyd also has a 50% partnership interest
in Marina District Finance Company, Inc., a non-recourse joint
venture that owns and operates the Borgata Hotel Casino in
Atlantic City, New Jersey.
BROADVIEW NETWORKS: Out-Of-Court or Ch. 11 Deadline Aug. 24
-----------------------------------------------------------
Broadview Networks Holdings, Inc., and each of its direct and
indirect subsidiaries entered into the First Amendment to the
Restructuring Support Agreement, dated July 13, 2012, with holders
representing more than 66 2/3% of the Company's outstanding
11 3/8% Senior Secured Notes due 2012 to amend the terms of the
Support Agreement to, among other things, extend certain
milestones and limit the applicability of select termination
rights to the Required Consenting Noteholders.
Among other things, the First RSA Amendment extends the date by
when the Company is required to consummate the restructuring or
commence chapter 11 cases prior to a termination triggering event
from Aug. 17, 2012, to Aug. 24, 2012.
On July 18, 2012, the Company, Broadview Networks, Inc., Broadview
Networks of Massachusetts, Inc., Broadview Networks of Virginia,
Inc., and Bridgecom International, Inc., entered into a Senior
Revolving DIP Facility Commitment Letter with The CIT
Group/Business Credit, Inc., pursuant to which CITBC has committed
to provide to the Borrowers a Senior Revolving Debtor in
Possession Credit Facility in an amount not to exceed $25,000,000.
In the event that the chapter 11 cases are not commenced on or
before Sept. 5, 2012, or the initial borrowing in respect of the
DIP Credit Facility is not made on or before the fourth business
day following the commencement of the chapter 11 cases, the DIP
Commitment Letter and the commitment and undertakings of CITBC
thereunder will automatically terminate unless CITBC, in its sole
discretion, agrees to an extension. Before that date, CITBC may
terminate its obligations under the DIP Commitment Letter as
expressly provided therein.
On July 19, 2012, the Company entered into Amendment No. 5 to the
Credit Agreement, dated Aug. 23, 2006, by and among the Borrowers,
the Lenders named therein and CITBC, as administrative agent,
collateral agent and documentation agent. As a result of the
Fifth Credit Agreement Amendment, the maturity date of the
Company's revolving credit facility was extended from Aug. 1,
2012, to Sept. 5, 2012.
A copy of the Amended Restructuring Agreement is available at:
http://is.gd/Lp3WCF
A copy of the Amended Credit Agreement is available at:
http://is.gd/V2PTwk
About Broadview Networks
Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a
communications and IT solutions provider to small and medium sized
business ("SMB") and large business, or enterprise, customers
nationwide, with a historical focus on markets across 10 states
throughout the Northeast and Mid-Atlantic United States, including
the major metropolitan markets of New York, Boston, Philadelphia,
Baltimore and Washington, D.C.
Ernst & Young LLP, in New York, N.Y., issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2011. The independent auditors noted that the
Company has in excess of $300 million of debt due on or before
September 2012. "In addition, the Company has incurred net losses
and has a net stockholders' deficiency."
The Company reported a net loss of $11.9 million for 2011,
compared with a net loss of $18.8 million for 2010.
The Company's balance sheet at March 31, 2012, showed $258.32
million in total assets, $373.35 million in total liabilities and
a $115.03 million total stockholders' deficiency.
* * *
In the July 23, 2012, edition of the TCR, Moody's Investors
Service downgraded Broadview Networks Holdings, Inc. Corporate
Family Rating (CFR) to Caa3 from Caa2 and the Probability of
Default Rating (PDR) to Ca from Caa3 in response to the company's
announcement that it has entered into a restructuring support
agreement with holders of approximately 70% of its preferred stock
and approximately 66 2/3% of its Senior Secured Notes. The
company is expected to file a pre-packaged Chapter 11 Plan of
Reorganization or complete an out of court exchange offer.
As reported by the TCR on July 25, 2012, Standard & Poor's Ratings
Services lowered its corporate credit rating on wireline operator
Broadview Networks Holdings Inc. to 'D' from 'CC'.
"This action follows the company's announced extension on its
revolving credit facility. We expect to lower the issue-level
rating on the notes to 'D' once the company files for bankruptcy,
or if it misses the Sept. 1, 2012 maturity payment on the notes,"
S&P said.
BROWNSTONE LOFTS: U.S. Trustee Wants Case Dismissal or Conversion
-----------------------------------------------------------------
August B. Landis, the Acting U.S. Trustee for the Northern
District of California asked that the Bankruptcy Court to convert
Brownstone Lofts, LLC's case to one under Chapter 7 of the
Bankruptcy Code, or in the alternative, dismiss the case.
The U.S. Trustee argues, among other things:
-- relief from stay was granted to the creditor in January 2012
with respect to Debtor's sole real property and the Debtor
appears to have abandoned the case;
-- the Debtor has been in chapter 11 for several months without
filing any monthly operating reports; and
-- the Debtor has not paid any quarterly fees due the U.S.
Trustee and owes a minimum of $975 through the first quarter
of 2012.
About Brownstone Lofts LLC
San Mateo, California-based Brownstone Lofts LLC filed for Chapter
11 bankruptcy (Bankr. N.D. Calif. Case No. 11-33495) on Sept. 26,
2011. Judge Dennis Montali presides over the case. Gregory A.
Rougeau, Esq., at the Law Offices of Manasian and Rougeau, serves
as the Debtor's counsel. The Debtor disclosed $29,040,050 in
assets and $14,189,156 in liabilities. The petition was signed by
Monica Hujazi, managing member.
BROWNSTONE LOFTS: Taps Coleman Frost as General Bankruptcy Counsel
------------------------------------------------------------------
Brownstone Lofts, LLC, asks the U.S. Bankruptcy Court for the
Northern District of California for authorization to employ
Coleman Frost LLP as general bankruptcy counsel effective as of
June 11, 2012.
The Debtor relates that on June 20, the Court granted the Debtor's
previous counsel Manasian & Rougeau's motion to withdraw as
attorney. According to Manasian & Rougeau's motion, the Debtor
has not paid any funds for debt counseling or bankruptcy, as the
Debtor's funds were insufficient to retain counsel. The firm's
retainer was initially paid by a non-insider, non-creditor third
party, and later by a non-creditor affiliate of Monica Hujazi, the
sole managing member of the Debtor.
Coleman will charge the Debtor for services at the rate of $425
per hour. The Debtor has not paid Coleman any money to date.
Ms. Hujasi has guaranteed the Debtor's payment for services
rendered. The guarantee payor has provided the applicant a $7,500
retainer.
To the best of the Debtor's knowledge, Coleman does not hold or
represent any interest adverse to the Debtor's estate.
Coleman can be reached at:
Derrick F. Coleman, Esq.
COLEMAN FROST LLP
429 Santa Monica Boulevard, Suite 700
Santa Monica, CA 90401
Tel: (301) 576-7312
E-mail: derrick@colemanfrost.com
About Brownstone Lofts LLC
San Mateo, California-based Brownstone Lofts LLC filed for Chapter
11 bankruptcy (Bankr. N.D. Calif. Case No. 11-33495) on Sept. 26,
2011. Judge Dennis Montali presides over the case. Gregory A.
Rougeau, Esq. -- rougeau@mrlawsf.com -- at the Law Offices of
Manasian and Rougeau, serves as the Debtor's counsel. The Debtor
disclosed $29,040,050 in assets and $14,189,156 in liabilities.
The petition was signed by Monica Hujazi, managing member.
BRUNSWICK CORP: 11.25% Notes Call No Impact on Moody's Ba3 CFR
--------------------------------------------------------------
Brunswick Corporation's announcements on July 26 that it will call
the remaining $71.5 million of its 11.25% notes and that it posted
an increase in Q2 2012 operating profit are credit positives. The
debt reduction lowers financial leverage and improves liquidity by
eliminating near term debt maturities, but will not change
Brunswick's Ba3 Corporate Family Rating or stable outlook, says
Moody's.
Rating Rationale
Brunswick's Ba3 Corporate Family Rating reflects the highly
discretionary nature of pleasure boats and marine related
products, which makes Brunswick's revenues and earnings highly
sensitive to economic weakness. This was demonstrated during the
economic downturn when the company suffered a dramatic revenue and
earnings decline. But the ratings also reflect the company's
moderate leverage and solid interest coverage -- highlighted by
debt/EBITDA under 4 times and EBITA/interest over 2 times. Moody's
expects additional operating performance and credit metrics
improvement as the company pays down debt with free cash flow and
marine industry demand continues to improve. A critical component
of the rating is Brunswick's strong liquidity profile. Other
factors supporting the rating are: the relatively stable boating
participation trends, good operating performance of Brunswick's
dealership network and the company's strong parts & accessories
business. The company's stable Bowling & Billiards and Fitness
businesses, seasoned management team and its joint venture
agreement with General Electric Capital Corporation for its
floorplan financing also support the rating.
CAESARS ENTERTAINMENT: Bank Debt Trades at 12.42% Off
-----------------------------------------------------
Participations in a syndicated loan under which Caesars
Entertainment, Inc., is a borrower traded in the secondary market
at 87.58 cents-on-the-dollar during the week ended Friday, July
27, 2012, a drop of 1.65 percentage points from the previous week,
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. The Company pays 525 basis
points above LIBOR to borrow under the facility. The bank loan
matures on Jan. 1, 2018, and carries Moody's B2 rating and
Standard & Poor's B rating. The loan is one of the biggest
gainers and losers among 166 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
--http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010.
Caesars reported a net loss of $281.10 million on $2.27 billion of
net revenues for the quarter ended March 31 2012. The Company
incurred a net loss of $666.70 million in 2011, and a net loss of
$823.30 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$28.40 billion in total assets, $27.56 billion in total
liabilities and $849.20 million in total equity.
* * *
As reported by the TCR on March 28, 2012, Moody's Investors
Service upgraded Caesars Entertainment Corp's Corporate Family
Rating (CFR) and Probability of Default Rating both to Caa1 from
Caa2. The upgrade of Caesars' ratings reflects very good
liquidity, an improving operating outlook for gaming in a number
of the company's largest markets that is expected to drive
earnings growth, the completion of a bank amendment that resulted
in the extension of debt maturities to 2018 from 2015, and the
public listing of the company's equity that increases financial
flexibility by providing it with another potential source of
capital. The upgrade of the SGL rating reflects minimal debt
maturities over the next few years, significant cash balances
(approximately $900 million at December 31, 2011) and revolver
availability that will be more than sufficient to fund the
company's cash interest and capital spending needs.
CAESARS ENTERTAINMENT: Stockholders OK Stock Exchange Program
-------------------------------------------------------------
Caesars Entertainment Corporation filed a Definitive Information
Statement on July 24, 2012, with the Securities and Exchange
Commission, relating to an action taken by written consent of the
Company's stockholders on July 23, 2012, approving:
(1) a one-time stock option exchange program, to permit the
Company to cancel certain stock options held by some of the
Company's employees, service providers and directors in
exchange for new, or replacement, options; and
(2) an amendment to the Caesars Entertainment Corporation 2012
Performance Incentive Plan to increase the maximum number
of shares of the Company's common stock with respect to
which stock options and stock appreciation rights may be
granted during any calendar year to any individual under
the 2012 Plan from 3,433,509 shares to 6,500,000 shares.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.
--http://www.caesars.com/-- is one of the world's largest casino
companies, with annual revenue of $4.2 billion, 20 properties on
three continents, more than 25,000 hotel rooms, two million square
feet of casino space and 50,000 employees. Caesars casino resorts
operate under the Caesars, Bally's, Flamingo, Grand Casinos,
Hilton and Paris brand names. The Company has its corporate
headquarters in Las Vegas.
Harrah's announced its re-branding to Caesar's on mid-November
2010.
The Company reported a net loss of $666.70 million in 2011, and a
net loss of $823.30 million in 2010.
The Company's balance sheet at March 31, 2012, showed $28.40
billion in total assets, $27.56 billion in total liabilities and
$849.20 million in total equity.
* * *
As reported by the TCR on March 28, 2012, Moody's Investors
Service upgraded Caesars Entertainment Corp's Corporate Family
Rating (CFR) and Probability of Default Rating both to Caa1 from
Caa2. The upgrade of Caesars' ratings reflects very good
liquidity, an improving operating outlook for gaming in a number
of the company's largest markets that is expected to drive
earnings growth, the completion of a bank amendment that resulted
in the extension of debt maturities to 2018 from 2015, and the
public listing of the company's equity that increases financial
flexibility by providing it with another potential source of
capital. The upgrade of the SGL rating reflects minimal debt
maturities over the next few years, significant cash balances
(approximately $900 million at December 31, 2011) and revolver
availability that will be more than sufficient to fund the
company's cash interest and capital spending needs.
CHINA BISTRO: S&P Gives 'B' Corp. Credit Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Scottsdale, Ariz.-based Asian-themed restaurant
operator P.F. Chang's China Bistro Inc. The outlook is stable.
"At the same time, we assigned 'B+' issue-level ratings with '2'
recovery ratings to the revolver and term loan. The '2' recovery
ratings indicate our expectation for substantial (70% to 90%)
recovery of principal in the event of a payment default. We also
assigned a 'CCC+' issue-level rating with a '6' recovery rating to
the notes. The '6' recovery rating indicates our expectation for
negligible (0% to 10%) recovery of principal in the event of a
payment default," S&P said.
"P.F. Chang's funded the transaction with almost $525 million in
Centerbridge common equity, the term loan, and the notes. The
company used the proceeds from the acquisition mainly to purchase
$1.1 billion in public stock," S&P said.
"The rating on P.F. Chang's reflects our expectation that the
company's financial risk profile will remain 'highly leveraged'
and its business risk profile will remain 'vulnerable' this year
despite efforts to improve operations and grow sales at both
flagship Bistros and smaller Pei Wei Asian Diners," said Standard
& Poor's credit analyst Diya Iyer.
"The stable outlook reflects our expectation that modest
operational erosion, coupled with limited debt reduction, will
result in flat credit measures in the coming year. We could lower
the rating if negative same-store sales trends persist and the new
owners do not reduce food and labor costs in the coming year. This
would result in gross margin falling 200 bps and EBITDA declining
about 15% from our expectations for fiscal 2012. It could also
occur if SG&A grows at more than double the 10% rate we are
forecasting. In this scenario, interest coverage would fall below
2.0x, leverage would approach 6.5x, and FFO to total debt would
decline below 10%. Given P.F. Chang's expected credit measures and
restaurant expansion plans and our industry outlook, we are not
expecting to raise our ratings over the near term," S&P said.
CHINA TEL GROUP: Unregistered Securities Sale Exceeds Threshold
---------------------------------------------------------------
VelaTel Global Communications, Inc., formerly known as China Tel
Group Inc., has issued the unregistered securities, namely shares
of the Company's Series B common stock. The Company filed a Form
8-K because the aggregate number of Series B Shares issued exceeds
5% of the total number of Series B Shares issued and outstanding
as of the Company's latest filed Report, on Form 10-Q filed on
July 5, 2012.
On July 18, 2012, the Company issued 22,060,607 Series B Shares to
Kenneth L. Waggoner, the Company's General Counsel, Executive
Vice-President Legal and Secretary; 22,060,607 Series B Shares to
Carlos Trujillo, the Company's Chief Financial Officer; and
22,060,608 Series B Shares to Kenneth Hobbs, the Company's Vice-
President of Mergers & Acquisitions. Each issuance independently
represents approximately 11% of the total number of Series B
Shares that are outstanding immediately following the three
issuances in the aggregate. There was no financial consideration
for the Series B Issuance to Officers. Therefore, each issuance
is subject to reduction at a ratio of 100:1.
As of July 18, 2012, and immediately following the Series B
Issuance to Officers, the Company has issued and outstanding
1,172,270,160 shares of its Series A common stock, with a par
value of $0.001, and 200,000,000 of its Series B Shares, with a
par value of $0.001.
Amendments to Bylaws
On July 18, 2012, the Company filed a Certificate of Change with
the Nevada Secretary of State, which has the effect of amending
the Company's Articles of Incorporation to reduce by a ratio of
100:1 each of the following categories of the Company's equity
securities: (i) issued Series A Shares, (ii) authorized Series A
Shares, (iii) issued Series B Shares, and (iv) authorized Series B
shares.
On July 23, 2012, the Company received approval from the Financial
Industry Regulatory Agency of the Reverse Stock Split, which will
become effective on July 24, 2012, as to the Company's issued and
outstanding Series A Shares. The Company's Series A Shares will
be quoted under the symbol "VELAD." The final letter "D" will
drop off 20 business days after July 24, 2012 at which point the
Company's Series A Shares will again be quoted under the symbol
"VELA."
Immediately following final approval of the Reverse Stock Split,
there were 20,000,000 Series A Shares authorized, of which
11,722,702 were issued and outstanding; and 2,000,000 Series B
Shares authorized, of which 2,000,000 were issued and outstanding.
About China Tel
Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/--
provides high speed wireless broadband and telecommunications
infrastructure engineering and construction services. Through its
controlled subsidiaries, the Company provides fixed telephony,
conventional long distance, high-speed wireless broadband and
telecommunications infrastructure engineering and construction
services. ChinaTel is presently building, operating and deploying
networks in Asia and South America: a 3.5GHz wireless broadband
system in 29 cities across the People's Republic of China with and
for CECT-Chinacomm Communications Co., Ltd., a PRC company that
holds a license to build the high speed wireless broadband system;
and a 2.5GHz wireless broadband system in cities across Peru with
and for Perusat, S.A., a Peruvian company that holds a license to
build high speed wireless broadband systems.
After auditing the 2011 results, Kabani & Company, Inc., in Los
Angeles, California, expressed substantial doubt as to the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred a net loss for the
year ended Dec. 31, 2011, cumulative losses of $254 million since
inception, a negative working capital of $16.4 million and a
stockholders' deficiency of $9.93 million.
The Company reported a net loss of $21.79 million in 2011,
compared with a net loss of $66.62 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$13.57 million in total assets, $19.53 million in total
liabilities and a $5.95 million total stockholders' deficiency.
CLEAR CHANNEL: Bank Debt Trades at 22.77% Off in Secondary Market
-----------------------------------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications, Inc., is a borrower traded in the secondary market
at 77.23 cents-on-the-dollar during the week ended Friday, July
27, 2012, a drop of 2.50 percentage points from the previous week
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. The Company pays 365 basis
points above LIBOR to borrow under the facility. The bank loan
matures on Jan. 30, 2016, and carries Moody's Caa1 rating and
Standard & Poor's CCC+ rating. The loan is one of the biggest
gainers and losers among 166 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Clear Channel
San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) --
http://www.ccmediaholdings.com/-- is the parent company of Clear
Channel Communications, Inc. CC Media Holdings is a global media
and entertainment company specializing in mobile and on-demand
entertainment and information services for local communities and
premier opportunities for advertisers. The Company's businesses
include radio and outdoor displays.
Clear Channel had a net loss of $143.63 million on $1.36 billion
of revenue for the three months ended March 31, 2012. It reported
a net loss of $302.09 million on $6.16 billion of revenue in 2011,
compared with a net loss of $479.08 million on $5.86 billion of
revenue in 2010. The Company had a net loss of $4.03 billion on
$5.55 billion of revenue in 2009.
The Company's balance sheet at March 31, 2012, showed $16.48
billion in total assets, $24.29 billion in total liabilities, and
a $7.80 billion total members' deficit.
At March 31, 2012, the Company had $20.7 billion of total
indebtedness outstanding.
Bankruptcy Warning
The Company said in its quarterly report for the period ended
March 31, 2012, that its ability to restructure or refinance the
debt will depend on the condition of the capital markets and the
Company's financial condition at that time. Any refinancing of
the Company's debt could be at higher interest rates and increase
debt service obligations and may require the Company and its
subsidiaries to comply with more onerous covenants, which could
further restrict the Company's business operations. The terms of
existing or future debt instruments may restrict the Company from
adopting some of these alternatives. These alternative measures
may not be successful and may not permit the Company or its
subsidiaries to meet scheduled debt service obligations. If the
Company and its subsidiaries cannot make scheduled payments on
indebtedness, the Company or its subsidiaries, as applicable, will
be in default under one or more of the debt agreements and, as a
result the Company could be forced into bankruptcy or liquidation.
* * *
The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings
has affirmed the 'CCC' Issuer Default Rating of Clear Channel
Communications, Inc., and the 'B' IDR of Clear Channel Worldwide
Holdings, Inc., an indirect wholly owned subsidiary of Clear
Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor
advertising subsidiary. The Rating Outlook is Stable.
Fitch's ratings concerns center on the company's highly leveraged
capital structure, with significant maturities in 2014 and 2016;
the considerable and growing interest burden that pressures free
cash flow; technological threats and secular pressures in radio
broadcasting; and the company's exposure to cyclical advertising
revenue. The ratings are supported by the company's leading
position in both the outdoor and radio industries, as well as the
positive fundamentals and digital opportunities in the outdoor
advertising space.
COEUR D'ALENE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Coeur D'Alene Marina Project, LLC
aka Coeur D'Alene Marina Project Resort LLC
24 Roy Street, Suite 475
Seattle, WA 98109
Bankruptcy Case No.: 12-20886
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
District of Idaho (Coeur dAlene)
Judge: Terry L Myers
Debtor's Counsel: D. Blair Clark, Esq.
LAW OFFICES OF D. BLAIR CLARK PLLC
1513 Tyrell Lane, Suite 130
Boise, ID 83706
Tel: (208) 475-2050
Fax: (208) 475-2055
E-mail: dbc@dbclarklaw.com
Scheduled Assets: $5,694,086
Scheduled Liabilities: $3,066,075
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/idb12-20886.pdf
The petition was signed by Paul Martinez, managing member of Prime
Assets, LLC.
COMMUNITY FIRST: Jon Thompson Named Bank VP and CFO
---------------------------------------------------
Community First, Inc., on May 18, 2012 intended to appoint,
subject to receipt of required regulatory approvals, Jon Thompson,
as Chief Financial Officer of the Company and its wholly owned
bank subsidiary, Community First Bank & Trust.
The Bank was notified by the Federal Deposit Insurance Corporation
that the FDIC would not object to the appointment of Jon Thompson
as Chief Financial Officer of the Bank. Accordingly, on July 17,
2012, the board of directors of the Bank appointed Mr. Thompson as
Vice President and Chief Financial Officer of the Bank effective
immediately.
The Company sought similar no objection from the Federal Reserve
Bank of Atlanta for the appointment of Mr. Thompson as Chief
Financial Officer of the Company. The FRB Atlanta has notified
the Company that it would not object to a provisional appointment
of Mr. Thompson as the Interim Chief Financial Officer of the
Company while the FRB-Atlanta completed its review of the
Company's request to appoint Mr. Thompson as Chief Financial
Officer. Accordingly, the board of directors of the Company has
appointed Mr. Thompson as Interim Vice President and Chief
Financial Officer of the Company. Upon receipt of final
confirmation from the FRB Atlanta that it does not object to Mr.
Thompson's permanent appointment as Chief Financial Officer of the
Company, Mr. Thompson will become the Vice President and Chief
Financial Officer of the Company.
Mr. Thompson, age 31, has served as the Assistant Vice President
and Controller of the Bank since August 2008. Prior to joining
the Bank, Mr. Thompson served as a senior staff member of Crowe
Chizek and Company, LLC, an independent registered public
accounting firm, from January 2005 through August 2008.
Mr. Thompson does not have an employment agreement with the Bank
and will serve at the discretion of the board of directors of the
Bank. He will receive a base salary of $110,000 per annum. He is
not currently a party to any other material plan, contract or
arrangement with the Bank or with the Company. Prior to his
appointment as the Bank's Chief Financial Officer, Mr. Thompson
had been party to a bonus and retention agreement with the Bank.
Pursuant to that agreement, Mr. Thompson had been paid a bonus on
May 31, 2011, and was scheduled to receive an additional bonus
payment on Nov. 10, 2013. This bonus and retention agreement was
terminated on May 18, 2012.
About Community First
Columbia, Tennessee-based Community First, Inc., is a registered
bank holding company under the Bank Holding Company Act of 1956,
as amended, and became so upon the acquisition of all the voting
shares of Community First Bank & Trust on Aug. 30, 2002. An
application for the bank holding company was approved by the
Federal Reserve Bank of Atlanta (the "FRB") on Aug. 6, 2002. The
Company was incorporated under the laws of the State of Tennessee
as a Tennessee corporation on April 9, 2002.
After auditing the Company's 2011 results, Crowe Horwath LLP, in
Brentwood, Tennessee, expressed substantial doubt about Community
First's ability to continue as a going concern. The independent
auditors noted that the Company's bank subsidiary, Community First
Bank & Trust, is not in compliance with a regulatory enforcement
action issued by its primary federal regulator requiring, among
other things, a minimum Tier 1 Leverage capital ratio at the Bank
of not less than 8.5%, a minimum Tier 1 capital to risk-weighted
assets ratio of not less than 10.0% and a minimum Total capital to
risk-weighted assets ratio of not less than 12.0%. "The Bank's
Tier 1 Leverage capital ratio was 4.92%, its Tier 1 capital to
risk-weighted assets ratio was 7.22% and its Total-capital to risk
weighted assets ratio was 8.51% at Dec. 31, 2011. Continued
failure to comply with the regulatory enforcement action may
result in additional adverse regulatory action."
The Company reported a net loss of $15.0 million on $19.6 million
of net interest income (before provision for loan losses) in 2011,
compared with a net loss of $18.2 million on $21.0 million of net
interest income (before provision for loan losses) in 2010. Total
non-interest income was $3.4 million for 2011, compared with
$4.7 million for 2010.
The Company's balance sheet at March 31, 2012, showed
$583.77 million in total assets, $572.78 million in total
liabilities, and $10.99 million in total shareholders' equity.
COMMUNITY SHORES: S. Bolhuis No Longer Has Shares as of June 25
---------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Steven R. Bolhuis, Sr., disclosed that, as of
June 25, 2012, he does not beneficially owns any shares of common
stock of Community Shores Bank Corporation.
Mr. Bolhuis previously reported beneficial ownership of
75,000 common shares or a 5.1% equity stake as of Dec. 30, 2011.
A copy of the amended filing is available for free at:
http://is.gd/krFs9G
About Community Shores
Muskegon, Mich.-based Community Shores Bank Corporation, organized
in 1998, is a Michigan corporation and a bank holding company.
The Company owns all of the common stock of Community Shores Bank.
The Bank was organized and commenced operations in January 1999 as
a Michigan chartered bank with depository accounts insured by the
FDIC to the extent permitted by law. The Bank provides a full
range of commercial and consumer banking services primarily in the
communities of Muskegon County and Northern Ottawa County.
After auditing the 2011 results, Crowe Horwath LLP, in Grand
Rapids, Michigan, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant recurring
operating losses, is in default of its notes payable
collateralized by the stock of its wholly-owned bank subsidiary,
and the subsidiary bank is undercapitalized and is not in
compliance with revised minimum regulatory capital requirements
under a formal regulatory agreement which has imposed limitations
on certain operations.
The Company reported a net loss of $2.46 million in 2011, compared
with a net loss of $8.88 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$219.42 million in total assets, $220.94 million in total
liabilities, and a $1.52 million total shareholders' deficit.
CONVERGEX HOLDINGS: Moody's Cuts Corporate Family Rating to 'B2'
----------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
of ConvergEx Holdings, LLC to B2 from B1, the Senior Secured first
lien term loan rating to B2 from B1, and the second lien term loan
rating from B2 to B3. The ratings remain under review for further
downgrade.
Ratings Rationale
The downgrade reflects Moody's expectation of continued pressure
on ConvergEx's operating profits due to the general downward
market trend in trading volumes and less portfolio rebalancing
among asset managers and other financial intermediaries that
ConvergEx serves. The ratings review reflects Moody's concerns
regarding continued uncertainty over the potential outcome from
the DOJ/SEC probe announced in 2011. In Moody's view, if the
resolution of the probe involves significant sanctions and/or
penalties it could significantly impair ConvergEx's market
reputation and franchise. Furthermore, Moody's noted that if
ConveregEx were required to pay a substantial settlement to
resolve the DOJ/SEC matter, that it would significantly limit the
company's financial flexibility going forward.
The last rating action on ConvergEx was on January 27, 2012, when
Moody's confirmed the ratings of ConvergEx Holdings, LLC's
(ConvergEx, CFR at B1) but changed the outlook to negative from
stable.
The principal methodology used in this rating was Global
Securities Industry Methodology published in December 2006.
COVERINGS ETC.: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Coverings Etc., Inc.
3110 Sheridan Avenue
Miami Beach, FL 33140
Bankruptcy Case No.: 12-27560
Chapter 11 Petition Date: July 22, 2012
Court: U.S. Bankruptcy Court
Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: Scott Alan Orth, Esq.
LAW OFFICES OF SCOTT ALAN ORTH, P.A.
3880 Sheridan Street
Hollywood, FL 33021
Tel: (305) 757-3300
Fax: (305) 757-0071
E-mail: orthlaw@bellsouth.net
Scheduled Assets: $0
Scheduled Liabilities: $5,581,254
A copy of the Company's list of its 20 largest unsecured creditors
is available for free at http://bankrupt.com/misc/flsb12-27560.pdf
The petition was signed by Ofer Mizrahi, president.
CYMILL MOTORS: Case Summary & 15 Unsecured Creditors
----------------------------------------------------
Debtor: Cymill Motors, Inc.
5950 Convington Highway
Decatur, GA 30035-3705
Bankruptcy Case No.: 12-68238
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: William T. Payne, Esq.
150 E. Ponce de Leon Avenue, Suite 130
Decatur, GA 30030
Tel: (404) 377-1100
E-mail: wtplaw1100@aol.com
Estimated Assets: $0 to $50,000
Estimated Debts: $0 to $50,000
A copy of the Company's list of its 15 unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/ganb12-68238.pdf
The petition was signed by Millern Jarrett-Thrope, CEO.
DAE AVIATION: S&P Affirms 'B-' Corp. Credit Rating; Outlook Neg
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
its 'B-' corporate credit rating, on DAE Aviation Holdings Inc.
and revised the outlook to negative from stable.
"The outlook revision reflects our concerns about covenant
compliance in 2012 and the company's ability to refinance
essentially all of its debt, which comes due in the next three
years," said Standard & Poor's credit analyst Christopher
Denicolo. "We expect the already-narrow cushion under the leverage
covenant in the firm's credit facility to tighten throughout 2012
as EBITDA (as defined in the company's credit agreement) is likely
to decline modestly and the covenant steps down in December. In
addition, the revolver matures in July 2013, and the company's
term loan and notes mature in 2014 and 2015," S&P said.
"Standard & Poor's ratings on DAE Aviation reflect a 'highly
leveraged' financial risk profile because of high debt leverage,
weak cash generation, and 'less-than-adequate' liquidity. The
company's 'weak' business risk profile reflects its exposure to
the competitive and cyclical general aviation markets, which are
recovering from a recent downturn, and its leading positions in
the markets it serves, which have fairly high barriers to entry,"
S&P said.
"We expect revenues in 2012 to increase 4%-5% as a result of
recovery in the business jet market and increased revenues from
servicing larger engines (such as the CF-34 and CFM-56), but
margins are likely to remain flat. Therefore, credit protection
measures are likely to improve modestly, but remain weak, in 2012.
We expect total adjusted debt to EBITDA of 5.5x to 6x, FFO to
total debt of about 10%, and EBITDA interest coverage of 2x to
2.5x. However, we expect free cash flow to be negative $45 million
for the year because of higher inventory levels resulting from
delays in obtaining spare parts and additional cash usage until
the 'power by the hour' maintenance contract with Delta Air Lines
Inc. (B/Positive/--) (where DAE Aviation provides engine
maintenance for a fixed rate per flight hour) terminates in
August. The recent arbitration ruling that enabled DAE Aviation to
terminate the contract, which has had higher costs and lower
revenues than the company expected, also allows it to recover
different types of damages related to the contract that could
total up to $60 million. We have not included this possible
recovery in our forecast because of the uncertainty about the
timing and amount," S&P said.
"Revenues and earnings suffered in 2009 and 2010 from losses at
the completions business (5%-10% of sales) and declining business
jet use (25%-30% of revenues). Although business jet operations
have begun to increase, they are still operating at depressed
levels. The company has returned the completions business to
modest profitability by replacing management and redesigning work
processes. A shift in the mix of engines serviced will constrain
margin improvement, and we expect EBITDA margins to be 9.5%-10%,"
S&P said.
"DAE Aviation is a leading provider of maintenance, repair, and
overhaul (MRO) services to engines for business and regional jets.
In addition, the company provides component and airframe repairs,
large business jet completions and modifications, and MRO services
for certain military aircraft engines. The company operates in
five segments: airline and fleets (about 37% of revenues),
business and general aviation (26%), military MRO services (21%),
services (includes helicopters, components, and industrial gas
turbines) (11%), and Associated Air Center (5%)," S&P said.
"The company has original equipment manufacturer authorizations
for a range of engines that popular regional and business aircraft
use. The MRO business competes with other providers, including the
original manufacturers of the engines, numerous large and small
independent MRO shops, airlines (for regional jets), and military
depots (for military aircraft). However, DAE Aviation has a No. 1
or No. 2 market share position in almost all of its key engine
types. The key factors for MRO services are hours flown and the
size of the aircraft fleet--both of which are growing. DAE
Aviation has expanded its engine MRO capabilities to include
larger engines for narrowbody aircraft, which should be a
significant revenue source in the future. Demand in the military
segment is uncertain because of overall budget cuts, lower flight
hours, and depots keeping less inventory. We expect sales to be
down in the near term," S&P said.
"The outlook is negative. Despite the company's efforts to improve
profitability, a recovery in the business jet market, and
increasing revenues from servicing larger engines, credit
protection measures are still fairly weak. Covenant compliance is
likely to be an issue as the leverage covenant steps down over the
next nine months and earnings are flat. In addition, the
company has a significant amount of debt coming due within the
next two to three years. Cash generation remains weak, although it
should improve in the later part of 2012 as the Delta contract is
phased out and the drain on working capital from supplier delays
eases," S&P said.
"We could lower ratings if the company violates financial
covenants in its credit facility, if cash and revolver
availability declines below $35 million (approximately six months
of interest payments), or if the company is not able to extend the
July 2013 maturity of the revolver. Although less likely, we could
also lower the ratings if key markets and operating performance
deteriorates because of a weakening economy, resulting in debt to
EBITDA above 7x, which we believe may make it more difficult for
the company to refinance," S&P said.
"We could revise the outlook to stable if the company is able to
refinance and extend its credit facility, increase covenant
headroom, and recover a significant portion of losses under the
Delta contract. Improvements in key markets and profitability
would also need to result in a sustained improvement in credit
protection measures and cash generation, such that debt to EBITDA
falls below 5x," S&P said.
DAIS ANALYTIC: Platinum-Montaur Discloses 9.9% Equity Stake
-----------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Platinum-Montaur Life Sciences, LLC,
disclosed that, as of March 22, 2011, it beneficially owns
3,748,009 shares of common stock of Dais Analytic Corporation
representing 9.99% of the shares outstanding. A copy of the
filing is available for free at http://is.gd/vNARQZ
About Dais Analytic
Odessa, Fla.-based Dais Analytic Corporation has developed and
patented a nano-structure polymer technology, which is being
commercialized in products based on the functionality of these
materials. The initial product focus of the Company is ConsERV,
an energy recovery ventilator. The Company also has new product
applications in various developmental stages.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Cross, Fernandez & Riley LLP, in
Orlando, Florida, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant losses since
inception and has a working capital deficit and stockholders'
deficit of $3.22 million and $4.90 million at Dec. 31, 2011.
The Company reported a net loss of $2.33 million in 2011,
compared with a net loss of $1.43 million in 2010.
The Company's balance sheet at March 31, 2012, showed $1.56
million in total assets, $6.44 million in total liabilities and a
$4.87 million total stockholders' deficit.
DEX MEDIA WEST: Bank Debt Trades at 40.21% Off in Secondary Market
------------------------------------------------------------------
Participations in a syndicated loan under which Dex Media West LLC
is a borrower traded in the secondary market at 59.79 cents-on-
the-dollar during the week ended Friday, July 27, 2012, a drop of
0.80 percentage points from the previous week according to data
compiled by LSTA/Thomson Reuters MTM Pricing and reported in The
Wall Street Journal. The Company pays 450 basis points above
LIBOR to borrow under the facility. The bank loan matures on Oct.
24, 2014, and carries Moody's Caa3 rating and Standard & Poor's D
rating. The loan is one of the biggest gainers and losers among
166 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About R.H. Donnelley & Dex Media
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun &
Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the U.S.
It offers print directory advertising products, such as yellow
pages and white pages directories. R.H. Donnelley Inc., Dex
Media, Inc., and Local Launch, Inc., are the company's only direct
wholly owned subsidiaries.
Dex Media East LLC is a publisher of the official yellow pages and
white pages directories for Qwest Communications International
Inc. in the states, where Qwest is the primary incumbent local
exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New
Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media
East LLC, Dex Media West LLC and Dex Media, Inc., filed for
Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-
11852) on May 28, 2009, after missing a $55 million interest
payment on its senior unsecured notes. James F. Conlan, Esq.,
Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork,
Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago,
represented the Debtors in their restructuring efforts. Edmon L.
Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor LLP, in Wilmington, Delaware, served as the
Debtors' local counsel. The Debtors' financial advisor was
Deloitte Financial Advisory Services LLP while its investment
banker was Lazard Freres & Co. LLC. The Garden City Group, Inc.,
served as claims and noticing agent. The Official Committee of
Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen
O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its
financial advisor and forensic accountant, and The Blackstone
Group, LP, as its financial and restructuring advisor. The
Debtors emerged from Chapter 11 bankruptcy proceedings at the end
of January 2010.
* * *
In early April 2012, Standard & Poor's Ratings Services raised its
corporate credit rating on Cary, N.C.-based Dex One Corp. and
related entities to 'CCC' from 'SD' (selective default). The
rating outlook is
negative.
"At the same time, we affirmed our issue-level rating on Dex Media
East Inc.'s $672 million outstanding term loan, Dex Media West
Inc.'s $594 million outstanding term loan, and R.H. Donnelley
Inc.'s $866 million outstanding term loan due 2014 at 'D'. The
recovery rating on these loans remains at '5', indicating our
expectation of modest (10% to 30%) recovery for lenders in the
event of a payment default," S&P said.
"The company's March 9, 2012 amendment allows for ongoing subpar
repurchases of its term debt until 2013, as long as certain
conditions are met. Additionally, on March 22, 2012, the company
announced the commencement of a cash tender offer to purchase a
portion of its senior subordinated notes due in 2017 below par.
The term loan and subordinated notes are trading at a significant
discount to their par values, providing the company an economic
incentive to pursue a subpar buyback. We believe that these
circumstances suggest a high probability of future subpar
buybacks, which are tantamount to default under our criteria," S&P
said.
"The 'CCC' corporate credit rating reflects our view that Dex
One's business will remain under pressure given the unfavorable
outlook for print directory advertising. We view the company's
rising debt leverage, low debt trading levels, weak operating
outlook, and steadily declining discretionary cash flow as
indications of financial distress. As such, we continue to assess
the company's financial risk profile as 'highly leveraged,' based
on our criteria. We regard the company's business risk profile as
'vulnerable,' based on significant risks of continued structural
and cyclical decline in the print directory sector. Structural
risks include increased competition from online and other
distribution channels as small business advertising expands across
a greater number of marketing channels," S&P said.
DHILLON PROPERTIES: Final Hearing on Plan Confirmation on Sept. 4
-----------------------------------------------------------------
Last month the U.S. Bankruptcy Court for the District of Nevada
conditionally approved Dhillon Properties, LLC's disclosure
statement in connection with the solicitation of acceptances of
its Third Amended Plan of Reorganization dated June 11, 2012.
The hearing on final approval of the Third Amended Disclosure
Statement and confirmation of the Debtors Third Amended Plan of
Reorganization will be held on Sept. 4, 2012, at 10:00 a.m.
All objections to the Debtor's Third Amended Plan of
Reorganization, or to the adequacy of the Debtor?s Third Amended
Disclosure Statement, will be filed and served upon the Debtor?s
counsel on or before Aug. 21, 2012.
All ballots for the acceptance or rejection of the Debtor's Third
Amended Plan of Reorganization must be received by Debtor's
counsel on or before Aug. 21, 2012.
The Debtor will file a ballot summary pursuant to Local Rule 3018
on or before Aug. 30, 2012.
The Debtor designates five classes of claims: Secured Claims of
Wells Fargo Bank (Class 1), Secured Claim of City of Elko (Class
2), Secured Claim of Elko Gold Mine, LLC (Class 3), Unsecured
Claims (Class 4), Membership Interest (Class 5).
Administrative Claims, which are unclassified, will be paid in
full on or before the Effective Date.
The Debtor has scheduled against it secured claims totaling
$11.68 million: (1) $11.56 million to Wells Fargo Bank and (2)
$124,803 to City of Elko. The Debtor has scheduled against it
unsecured claims totaling $311,055.
The amount of the Wells Fargo Secured Claim (Class 1) will be the
sum of $6,706,136, plus additional post petition collection costs
and fees subsequent to Sept. 15, 2011, as agreed upon by the
Debtor. Commencing on the 11th day of the next month following
the Confirmation Date, the Debtor will distribute to Wells Fargo a
sum equal to the normal amortized monthly payment based on the
Wells Fargo Interest Rate (5.25% p.a.) and a 30-year amortized
mortgage term. The balance owed on the Wells Fargo Secured Claim,
together with any and all accrued interest, fees and costs due,
will be paid on or before May 11, 2017.
Wells Fargo will have a deficiency claims against the Debtor in
the amount of $4,854,672. In the event of a default by the Debtor
under the Plan, and in the event Debtor fails to cure such default
within 15 days after notice, there will a Default under the Plan,
and Wells Fargo will be entitled to enforce all of the terms of
the Wells Fargo Deed of Trust and the Wells Fargo Note, in
addition to all rights available under Nevada law, including,
without limitation, foreclosure upon the Property and the
opportunity to credit bid the entire amount of the Wells Fargo
Note at any foreclosure sale.
The Secured Claim of the City of Elko (Class 2) and the Secured
Claim of Elko Gold Mine, LLC (Class 3) will be paid by equal
monthly payments over a period of 60 months.
Allowed Unsecured Claims (Class 4) will receive quarterly pro rata
disbursements of $3,000 over a period of 5 years. To the extent
that the Debtor is unable to make payment, Dhillon Holdings, Inc.,
the sole member of the Debtor, or an affiliate company, will
contribute to the Debtor sufficient funds to make the payment.
The member will retain its membership interest, but will receive
no distribution until all claims are paid in full.
Pursuant to the Plan, the Debtor will continue to operate the
Holiday Inn Express post-confirmation. The income generated
therefrom will be used to fund the Plan. The Debtor will sell or
refinance the Property between 48 months and 63 months following
the Effective date. The proceeds from such sale or refinance will
be used to fund the Plan.
Dhillon Holdings, Inc., the sole member of the Debtor, or an
affiliate company, will contribute funds as are necessry to
implement the Plan, specifically any sums necessary to cure
executory contracts.
A copy of the Third Amended Disclosure Statement is available for
free at: http://bankrupt.com/misc/dhillonproperties.doc242.pdf
About Dhillon Properties LLC
Elko, Nevada-based Dhillon Properties, LLC, owns the Holiday Inn
Express located at 3019 Idaho Street, in Elko, Nevada. The
Company filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case
No. 09-54640) on Dec. 31, 2009. In its schedules, the Company
disclosed assets of $13,217,541, and total debts of $9,260,886.
Alan R. Smith, Esq., at the Law Offices of Alan R. Smith, in Reno,
Nev.; and AJ Kung, Esq., and Brandy Brown, Esq., at Kung &
Associates, in Las Vegas, Nev., represent the Debtor as counsel.
DYNEGY INC: Taps Epiq Bankruptcy as Administrative Advisor
----------------------------------------------------------
Dynegy Inc. asks the U.S. Bankruptcy Court for the Southern
District of New York for permission to employ and retain Epiq
Bankruptcy Solutions, LLC, as its administrative advisor under
Section 327 of the Bankruptcy Code, nunc pro tunc to the Petition
Date. Dynegy Inc. has also filed an application for authorization
to retain Epiq to serve as its notice and claims agent.
As Dynegy, Inc.'s administrative advisor, Epiq will:
a. Assist with, among other things, solicitation, balloting and
tabulation and calculation of votes, as well as preparing any
appropriate reports, as required in furtherance of confirmation of
plan(s) of reorganization;
b. Generate an official ballot certification and testifying, if
necessary, in support of the ballot tabulation results;
c. Gather data in conjunction with the preparation, and assisting
with the preparation or necessary amendments, of DI?s schedules
of assets and liabilities and statements of financial affairs;
d. Generate, provide, and assist with claims reports, claims
objections, exhibits, claims reconciliation, and related matters;
e. Provide a confidential data room;
f. Provide a call center or other creditor hotline, responding to
creditor inquiries via telephone, letter, email, facsimile, or
otherwise, as appropriate, and related services;
g. Manage and coordinate the publication of legal notices, as
requested;
h. Manage any distributions pursuant to a confirmed plan of
reorganization; and
i. Provide such other claims processing, noticing, solicitation,
balloting, and other administrative services described in the
Services Agreement, but not included in the Section 156(c)
Application, as may be requested from time to time by DI, the
Court, or the Clerk.
To the best of its knowledge, Epiq does not (a) hold or represent
an interest materially adverse to Dynegy Inc.'s estate with
respect to any matter for which it will be employed or (b) have
any materially adverse connection to Dynegy Inc., its creditors,
or other relevant parties.
The fees that Epiq will charge are set forth in the Services
Agreement. Epiq will also seek reimbursement from Dynegy Inc. for
reasonable expenses in accordance with the terms of the Services
Agreement.
About Dynegy
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7, 2011, to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet. Dynegy Holdings disclosed assets of
$13.77 billion and debt of $6.18 billion.
Dynegy Inc. on July 6, 2012, filed a voluntary petition to
reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to
effectuate a merger with Dynegy Holdings, pursuant to Holdings'
Chapter 11 plan.
A settlement, which has already been approved by the bankruptcy
court, provides for Dynegy Inc. and Holdings to merge and for the
administrative claim granted to Dynegy Inc. in the Holdings
Chapter 11 case to be transferred out of Dynegy Inc. for the
benefit of its shareholders.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues. The financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors in Holdings' cases
has tapped Akin Gump Strauss Hauer & Feld LLP as counsel.
Dynegy Inc. is represented by White & Case LLP and advised by
Lazard Freres & Co. LLC.
DYNEGY INC: Taps Epiq Bankruptcy as Notice and Claims Agent
-----------------------------------------------------------
Dynegy Inc. asks the U.S. Bankruptcy Court for the Southern
District of New York for authorization to employ and retain Epiq
Bankruptcy Solutions, LLC, as its notice and claims agent, under
Section 156(c) of the Bankruptcy Code, nunc pro tunc to the
petition date.
As notice and claims agent, Epiq will provide, among other things,
these administrative services:
a. Notifying all potential creditors of the filing of the
bankruptcy petition under the proper provisions of the Bankruptcy
Code and the Federal Rules of Bankruptcy Procedure as determined
by DI's counsel;
b. Preparing and serving required notices in the DI Case,
including:
i. a notice of the commencement of the DI Case;
ii. notices of objections to claims (if necessary);
iii. notices of any hearings on a disclosure statement and
confirmation of a plan or plans of reorganization; and
iv. such other miscellaneous notices and other pleadings as DI
or Court may deem necessary or appropriate for an orderly
administration of the DI Case;
c. Maintaining an official copy of DI's schedules of assets and
liabilities and statement of financial affairs, listing DI's known
creditors and the amounts owed thereto;
d. Processing all proofs of claim / interests submitted;
e. Creating and maintaining an electronic database for creditor /
party in interest information provided by DI and creditors /
parties in interest; and
f. Creating and maintaining a publicly-accessible case
administration website containing information about the DI Case,
including, but not limited to, the Court's docket and important
documents.
To the best of its knowledge, Epiq does not (a) hold or represent
an interest materially adverse to DI's estate with respect to any
matter for which it will be employed or (b) have any materially
adverse connection to DI, its creditors, or other relevant
parties.
The fees Epiq will charge in connection with its services to DI
are set forth in the Services Agreement. Additionally, Epiq will
seek reimbursement from DI for reasonable expenses in accordance
with the terms of the Services Agreement.
About Dynegy
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) Nov. 7, 2011, to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet. Dynegy Holdings disclosed assets of
$13.77 billion and debt of $6.18 billion.
Dynegy Inc. on July 6, 2012, filed a voluntary petition to
reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to
effectuate a merger with Dynegy Holdings, pursuant to Holdings'
Chapter 11 plan.
A settlement, which has already been approved by the bankruptcy
court, provides for Dynegy Inc. and Holdings to merge and for the
administrative claim granted to Dynegy Inc. in the Holdings
Chapter 11 case to be transferred out of Dynegy Inc. for the
benefit of its shareholders.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues. The financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors in Holdings' cases
has tapped Akin Gump Strauss Hauer & Feld LLP as counsel.
Dynegy Inc. is represented by White & Case LLP and advised by
Lazard Freres & Co. LLC.
EASTMAN KODAK: Apple Wants to Move Patent Case Out of Bankruptcy
----------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that Apple Inc., which is fighting Eastman
Kodak Co. over ownership of patents, argued a federal judge should
transfer a Kodak lawsuit against the iPhone-maker out of
bankruptcy court. Apple told U.S. District Judge George Daniels
at a court hearing Thursday in Manhattan that Kodak's complaint
over patent ownership should be considered in federal district
court. Apple argued in court papers that the bankruptcy court
doesn't have the authority or "necessary expertise" to decide the
dispute. Kodak opposes withdrawal of the case. The hearing is
continuing.
Kodak and Apple are grappling over 10 patents that are included in
a portfolio of patents Kodak is planning to sell as part of its
bankruptcy restructuring. Kodak sued Apple in June in bankruptcy
court, seeking an order that Apple doesn't own the assets.
The Apple lawsuit is Eastman Kodak Co. v. Apple Inc., 12-01720,
U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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.
EMMIS COMMUNICATIONS: J. Smulyan Holds 20.9% of Class A Shares
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Jeffrey H. Smulyan and his affiliates
disclosed that, as of July 20, 2012, they beneficially own
8,659,816 shares of Class A common stock of Emmis Communications
Corporation representing 20.9% of the shares outstanding.
Mr. Smulyan previously reported beneficial ownership of
8,212,850 Class A shares representing 19.8% of the shares
outstanding.
A copy of the amended filing is available for free at:
http://is.gd/8DOCmG
About Emmis Communications
Headquartered in Indianapolis, Indiana, Emmis Communications
Corporation -- http://www.emmis.com/-- owns and operates 22 radio
stations serving New York, Los Angeles, Chicago, St. Louis,
Austin, Indianapolis, and Terre Haute, as well as national radio
networks in Slovakia and Bulgaria. The company also publishes six
regional and two specialty magazines.
The Company's balance sheet at May 31, 2012, showed $350.94
million in total assets, $360.51 million in total liabilities,
$46.88 million in series A cumulative convertible preferred stock,
and a $56.45 million total deficit.
* * *
Emmis carries Caa2 corporate family rating and a Caa3 probability
of default rating from Moody's.
In July 2011, Moody's Investors Service placed the ratings of
Emmis on review for possible upgrade following the company's
earnings release for 1Q12 (ended May 31, 2011) including
additional disclosure related to the pending sale of controlling
interests in three radio stations. The sale of the majority
ownership to GCTR will generate estimated net proceeds of
approximately $100 million to $120 million, after taxes, fees and
related expenses. Emmis will retain a minority equity interest in
the operations of the three stations and Moody's expects senior
secured debt to be reduced resulting in improved credit metrics.
FIRST BANKS: Reports $7.1 Million Net Income in Second Quarter
--------------------------------------------------------------
First Banks, Inc., reported net income of $7.12 million on $43.60
million of net interest income for the three months ended June 30,
2012, compared with a net loss of $17.97 million on $46.77 million
of net interest income for the same period during the prior year.
The Company reported net income of $13.96 million on $87.37
million of net interest income for the six months ended June 30,
2012, compared with a net loss of $24.06 million on $95.60 million
of net interest income for the same period a year ago.
Cash and cash equivalents were $323.9 million at June 30, 2012,
compared to $499.4 million at March 31, 2012, $474.2 million at
Dec. 31, 2011, and $628.8 million at June 30, 2011. The decrease
in cash and cash equivalents of $175.4 million during the second
quarter of 2012 primarily resulted from a decrease in deposits of
$125.9 million and an increase in the investment securities
portfolio of $191.1 million, partially offset by a net decrease in
loans of $125.0 million and certain other factors.
Terrance M. McCarthy, President and Chief Executive Officer of the
Company, said, "We continue to have a significant amount of
success in decreasing the overall level of our nonperforming
assets and potential problem loans which is reflected in the
dramatic decline in the provision for loan losses year-over-year.
During the second half of 2012, we look to continue the positive
trend in asset quality improvement and further improve our core
earnings performance."
A copy of the press release is available for free at:
http://is.gd/NBFSRB
About First Banks
First Banks, Inc., is a registered bank holding company
incorporated in Missouri in 1978 and headquartered in St. Louis,
Missouri. The Company operates through its wholly owned
subsidiary bank holding company, The San Francisco Company, or
SFC, headquartered in St. Louis, Missouri, and SFC's wholly owned
subsidiary bank, First Bank, also headquartered in St. Louis,
Missouri.
FREDERICK'S OF HOLLYWOOD: TTG to Resell 28.4MM Common Shares
------------------------------------------------------------
Frederick's of Hollywood Group Inc. filed with the U.S. Securities
and Exchange Commission a Form S-3 relating to the resale of up to
28,405,331 shares of the Company's common stock by TTG Apparel,
LLC. The proposed maximum aggregate offering price is $11.07
million.
The Company will not receive any proceeds from the sale of its
shares by the selling shareholder; however, the Company will
receive payment in cash upon exercise of certain warrants held by
that selling shareholder.
The Company's common stock is traded on the NYSE MKT under the
symbol "FOH." The last reported sale price of our common stock on
the NYSE MKT on July 16, 2012, was $0.39 per share.
A copy of the prospectus is available for free at:
http://is.gd/ybHcUc
About Frederick's of Hollywood
Frederick's of Hollywood Group Inc. (NYSE Amex: FOH) --
http://www.fredericks.com/-- through its subsidiaries, sells
women's intimate apparel, swimwear and related products under its
proprietary Frederick's of Hollywood brand through 122 specialty
retail stores, a world-famous catalog and an online shop.
Frederick's of Hollywood sought bankruptcy in July 10, 2000. On
Dec. 18, 2002, the court approved the company's plan of
reorganization, which became effective on Jan. 7, 2003, with the
closing of the Wells Fargo Retail Finance exit financing facility.
The Company's balance sheet at April 28, 2012, showed $43.69
million in total assets, $45.65 million in total liabilities and a
$1.95 million total shareholders' deficiency.
The Company reported a net loss of $2.55 million on $91.06 million
of net sales for the nine months ended April 28, 2012, compared
with a net loss of $4.87 million on $93.79 million of net sales
for the nine months ended April 30, 2011.
FREEDOM GROUP: S&P Alters Outlook to Negative, Keeps 'B+' CCR
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
Madison, N.C.-based Freedom Group Inc, including its 'B+'
corporate credit rating. "However, we revised our rating outlook
on the company to negative from stable," S&P said.
"At the same time, we affirmed our 'B+' issue-level rating on
Freedom Group's term loan due 2019, which is expected to total
$405 million, following the completion of the proposed $75 million
add-on. We revised our recovery rating on the term loan to '4'
from '3', reflecting weaker recovery prospects for the lenders of
the term loan as a result of the greater amount of term loan debt
outstanding at default than that used in our previous analysis.
The '4' recovery rating indicates our expectation of average (30%
to 50%) recovery for lenders in the event of a payment default,"
S&P said.
"We expect proceeds from the $75 million additional term loan to
be used to refinance all outstanding preferred equity ($30 million
at June 30, 2012), repay outstanding balances under Freedom
Group's ABL revolver ($20 million at June 30, 2012), fund fees and
expenses, and provide additional cash to the balance sheet, which
we believe it could potentially use for acquisitions," S&P said.
"The outlook revision to negative reflects our expectation that,
following the proposed term loan add-on and based on our current
forecast for 2012 and 2013, adjusted leverage will increase above
6x in 2013 (our threshold for Freedom Group at the 'B+' rating
level)," said Standard & Poor's credit analyst Ariel Silverbeg.
"While we expect a spike in EBITDA in 2012, our preliminary
forecast for 2013 is for EBITDA to decline to a level more in line
with the 2011 level. Our affirmation of the 'B+' corporate credit
rating reflects our belief that this spike in leverage will be
temporary and also incorporates our expectation that interest
coverage will remain good for the rating, at above 2.5x. In
addition, following the proposed transaction, Freedom Group will
have an improved liquidity position, with full availability under
its ABL revolver."
"Our 'B+' corporate credit rating on Freedom Group reflects our
assessment of the company's business risk profile as 'weak' and
our assessment of the company's financial risk profile as 'highly
leveraged,' according to our criteria," S&P said.
"The negative rating outlook reflects our expectation that
adjusted leverage will increase above our 6x threshold for the
current rating in 2013, given the additional debt associated with
the add-on, in conjunction with our current forecast for 2013
EBITDA to decline toward the 2011 level, following an expected
meaningful spike in 2012," S&P said.
"We could lower the rating if EBITDA declines more meaningful in
2013 than we currently anticipate, resulting in leverage rising
significantly above 6x. We would consider an outlook revision to
stable if 2013 EBITDA outperforms our current forecast, resulting
in adjusted leverage being maintained in the mid-5x area, which we
would view as in line with the rating," S&P said.
FREEDOM GROUP: Moody's Rates $75MM Term Loan Add-On 'Ba3'
---------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Freedom Group,
Inc.'s $75 million add on to its term loan. All other ratings,
including the B1 Corporate Family Rating, were affirmed. The
rating outlook is stable. Proceeds from the add on to the term
loan will be used to repurchase $30 million of preferred stock,
repay $20 million of revolver borrowings, pay related fees and
expenses and increase balance sheet cash by about $20 million.
"Although the additional borrowings will increase debt/EBITDA by
about a half turn to 5.2 times, it will replace high yielding
preferred stock and it will provide the company with additional
resources to fund future acquisitions," said Kevin Cassidy, Senior
Credit Officer at Moody's Investors Service. "We think debt/EBITDA
will return to its current level of below 5 times by the end of
2012 due to our expectation of higher earnings this year, but
could temporarily increase above 5 times in 2013 because of our
expectation of lower earnings next year" he noted.
Ratings assigned:
$75 million add on to 1st lien secured term loan due 2019 at
Ba3 (LGD 3, 39%);
Ratings affirmed/LGD assessments revised:
Corporate Family Rating at B1;
Probability of Default Rating at B1;
$330 million secured term loan due 2019 at Ba3 (LGD 3, 39%);
$250 million secured notes due 2020 at B3 (LGD 5, 82% from
81%);
Speculative grade liquidity rating at SGL 2;
Ratings Rationale
Freedom Group's B1 Corporate Family Rating reflects its modest
size with revenue of around $800 million, single industry segment
in firearms, ammunition and related areas, exposure to volatile
raw material prices (i.e., copper and lead) and susceptibility to
discretionary consumer spending and sudden rise in gas prices. The
rating also reflects the company's ownership structure with
Cerberus as its financial sponsor. Financial leverage is high for
the B1 Corporate Family Rating with pro forma debt/EBITDA of 5.2
times while EBITA margins are solid at over 13%. Moody's expects
solid firearm demand over the next few quarters preceding the
election to drive financial leverage to 5 times or lower by the
end of 2012. Earnings and credit metrics should weaken moderately
in 2013 since Moody's believes a pull back in demand is likely
after the election. The rating is supported by the long operating
history and strong brand recognition of its subsidiaries' such as
Remington Arms and the growth in the government, military and law
enforcement markets as well as an expanded base of consumers that
use firearms recreationally. Further supporting Freedom Group's
rating is its leading market position in key product categories
(shotguns, rifles, and ammunition), relatively stable hunting
participation rates and its ability to pass through price
increases, although this may be more challenging in today's
uncertain economy.
The stable outlook reflects Moody's belief that both revenue and
earnings will grow solidly in 2012 and decline moderately in 2013
after the presidential election. The stable outlook reflects
Moody's expectation that any additional shareholder returns will
be funded from free cash and will not increase leverage.
There is minimal near term upward rating pressure given the
company's modest size, single product focus and ownership
structure. The rating could be upgraded over the longer term if
revenue, earnings and business line diversity substantially
improve and the company implements and sustains more conservative
financial policies. Key credit metrics driving a potential upgrade
would be debt/EBITDA sustained around 3.5 times (currently 5.2
times proforma) and retained cash flow/net debt consistently above
20%.
If operating performance significantly weakens or the company
implements more shareholder friendly financial policies the rating
could be downgraded. Key credit metrics that could prompt a
downgrade would be debt/EBITDA sustained above 5 times or retained
cash flow/net debt sustained below 10%.
Subscribers can find further details in the Freedom Group Credit
Opinion published on Moodys.com.
The principal methodologies used in this rating were Global
Consumer Durables published in October 2010. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in June
2009.
Freedom Group is a supplier of firearms, ammunition and related
products with leading market positions across its major product
categories. The company designs, manufactures, and markets a broad
product line which services the hunting, shooting sports, law
enforcement and military end-markets under recognized brands
including Remington, Marlin, Bushmaster, and DPMS/Panther Arms,
among others. For the twelve months ended March 31, 2012, revenue
approximated $800 million.
GARDNER ASSOCIATES: Case Summary & 2 Unsecured Creditors
--------------------------------------------------------
Debtor: Gardner Associates General Partnership
220 Montgomery Street, Suite 1012
San Francisco, CA 94104
Bankruptcy Case No.: 12-18555
Chapter 11 Petition Date: July 22, 2012
Court: U.S. Bankruptcy Court
District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: Ambrish S. Sidhu, Esq.
SIDHU LAW FIRM, LLC
810 S. Casino Center Boulevard, Suite 104
Las Vegas, NV 89101
Tel: (702) 384-4436
Fax: (702) 384-4437
E-mail: asidhu@sidhulawfirm.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its two unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/nvb12-18555.pdf
The petition was signed by Marsha Grutman, general partner.
GENERAL AUTO: Disclosure Statement Hearing on Sept. 24
------------------------------------------------------
There's a hearing to consider approval of the disclosure statement
hearing explaining the Chapter 11 plan of reorganization of
General Auto Building, LLC on Sept. 24, 2012 at 1:30 p.m.,
according to an amended notice.
The Plan provides that (a) all equity in the Debtor will be
extinguished on the effective date of the Plan and North Park
Development will purchase a $400,000 membership interest in the
Reorganized Debtor, (b) insiders and creditors of the Debtor will
be offered the opportunity to purchase an ownership interest in
Reorganized Debtor in $50,000 increments; provided that the
offering will be limited to a total of $200,000 in excess of North
Park Development's $400,000 investment and will be available on a
first come first serve basis; (c) the Debtor will operate in the
ordinary course and pay all Creditors in full or in part over time
pursuant to the Plan from revenue generated by operations, from
cash savings, and from the new investment in Debtor.
The Debtor identified three secured creditors:
* R&H Construction, holder of a construction lien, will be
paid $150,000 in full satisfaction of its secured claim on
the effective date.
* Multnomah County, owed of $90,000 in real property taxes,
will be paid will be paid in full together with interest at
the rate determined under applicable non-bankruptcy law.
* Homestreet Bank's allowed secured claim will be paid in full
together with interest at a fixed rate of 4.75% or at such
other rate fixed by the court. On the Effective Date,
Homestreet will be paid monthly $39,583 interest only
payments for 12 months. On the 13th month following the
Effective Date, Homestreet will be paid equal, monthly
$52,165 principal and interest payments based upon a 30-year
amortization schedule with a $8,365,000 balloon payment of
the unpaid principal plus accrued interest due on the 10th
anniversary of the Effective Date.
Commencing on the last business day of April 2013 and continuing
on the last business day of each July, October, January and April
thereafter until paid or satisfied, the Reorganized Debtor will
pay to each holder of an unsecured claim an amount equal to its
pro rata share of Reorganized Debtor's "excess cash" as of the
last day of the prior calendar quarter. Payments will continue
until the (a) holders of the claims have been paid in full
together with interest at the Federal Judgment Rate; or (b) the
last day of October, 2022, whichever will first occur, provided,
however that, in the event that holders of the claims have
received payments totaling at least 60% of their claims on or
before Sept. 30, 2017, then the claims will be deemed to have been
paid and satisfied in full and Reorganized Debtor will have no
further payment obligations.
Holders of small Unsecured Creditors (creditors with claims of
$6,000 or less) will be paid 60% of their allowed claim in cash on
the later of the effective date of the Plan or the date on which
the Claim is allowed. They will not receive any interest payment.
Existing equity interests in the Debtor would be extinguished.
The Debtor expects the effective date of the Plan to occur on
Oct. 1, 2012.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/General_Auto_Plan_Outline.pdf
About General Auto
General Auto Building, LLC, filed for Chapter 11 bankruptcy
(Bankr. D. Ore. Case No. 12-31450) on March 2, 2012. The Debtor
is an Oregon limited liability company formed in 2007 with its
principal place of business in Spokane, Washington. It was formed
to renovate and lease its namesake commercial property located at
411 NW Park Avenue, Portland, Oregon. As of the Petition date,
the Debtor has developed virtually all of the General Automotive
Building and has leased approximately 98% of the building's space
to retail and commercial tenants. The Debtor continues to seek
tenants for the remaining spaces.
Judge Elizabeth L. Perris presides over the case. Albert N.
Kennedy, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, serve
as the Debtor's counsel.
The Debtor has scheduled $10,010,620 in total assets and
$13,519,354 in total liabilities.
The U.S. Trustee was unable to appoint an official committee of
unsecured creditors in the case.
GNC HOLDINGS: S&P Raises Corp. Credit Rating to BB; Outlook Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Pittsburgh-based GNC Holdings Inc. and wholly owned
subsidiary General Nutrition Centers Inc. to 'BB' from 'BB-'. The
outlook is stable.
"Simultaneously, we also raised our senior secured debt rating on
General Nutrition Centers to 'BB' from 'BB-'. The recovery rating
on the secured debt remains at '3', indicating our expectation for
meaningful (50% to 70%) recovery in the event of a default," S&P
said.
"The ratings on GNC Holdings and its wholly owned subsidiary
General Nutrition Centers reflect our assessment that the
company's financial risk profile is 'significant,' given its good
cash flow generation, stable credit metrics, and more moderate
financial policies. In our view, the company's business risk
profile is 'fair,' reflecting GNC's leading position in the highly
competitive and fragmented nutritional supplement specialty retail
sector, good profitability measures, and our expectation for near-
term sales growth to be above the industry average of 3% to 6%,"
S&P said.
"We believe that GNC's financial policies have evolved and
moderated since the IPO in April 2011 and are now more in line
with a maturing public company," explained Standard & Poor's
credit analyst Jayne Ross. "The company put in place a regular
dividend earlier this year and has indicated that further debt
repayment, other than required debt amortization, is not a top
priority. Although acquisitions are always a possibility, we do
not believe a sizable acquisition is likely in the near term.
Therefore, given the cash flow that GNC generates, we expect GNC
to fund its previously announced $300 million share repurchase
program with cash flow from operations and its cash balances."
"The rating outlook on GNC is stable. We expect the company's
recent improvement in operating performance to continue and
leverage to modestly decline over the near term. An upgrade could
occur if the company can continue to improve and sustain stronger
credit metrics, with adjusted total debt to EBITDA in the low-2.0x
area, EBITDA to interest of more than 7x, and FFO to total debt in
the mid-30% area, and maintains moderate financial policies. We
could lower the ratings if weaker credit measures result from the
company's financial policies becoming more aggressive--for
instance, if the company were to do another LBO, a large, debt-
financed share repurchase program, or a special one-time dividend,
such that total debt to EBITDA increases to more than 4x," S&P
said.
GLOBAL ARENA: To Acquire GACC Shares from Broad Sword and JSM
-------------------------------------------------------------
Global Arena Holding, Inc., Broad Sword Holdings, LLC, and JSM
Capital Holding Corp. entered into a share purchase agreement to
fully acquire Global Arena Capital Corp. by purchasing the 95.1%
of the shares of Global Arena Capital Corp which it did not
previously own. The change in control of ownership has been
authorized by the Financial Industry Regulatory Authority under a
"change of control" membership 1017 application.
The final consideration paid for the GAC shares to close the deal
was $2.00. The total aggregate Purchase Price, which was agreed
to by the Boards of Directors and Shareholders of JSM Capital
Holding Corp and Broad Sword Holding LLC, (the former owners of
Global Arena Capital Corp), included, in addition to the $2.00, an
aggregate of 12,108,001 shares in the Company previously received.
GAC reported audited revenues of $7,846,827 and a loss of $197,077
for 2011, and GAC reported unaudited revenues of $3,897,137 and a
loss of $48,407 for the six months ended June 30, 2012.
A copy of the Share Purchase Agreement is available for free at:
http://is.gd/9FmJaT
About Global Arena
New York, N.Y.-based Global Arena Holding, Inc., formerly Global
Arena Holding Subsidiary Corp., was formed in February 2009, in
the state of Delaware. The Company is a financial services firm
that services the financial community through its subsidiaries as
follows:
Global Arena Investment Management LLC provides investment
advisory services to its clients. GAIM is registered with the
Securities and Exchange Commission as an investment advisor and
clears all of its business through Fidelity Advisors, its
correspondent broker. Global Arena Commodities Corp. provides
commodities brokerage services and earns commissions. Global
Arena Trading Advisors, LLC provides futures advisory services and
earns fees. GATA is registered with the National Futures
Association (NFA) as a commodities trading advisor. Lillybell
Entertainment, LLC provides finance services to the entertainment
industry.
The Company's balance sheet at March 31, 2012, showed
$1.11 million in total assets, $1.29 million in total current
liabilities, and a stockholders' deficit of $184,014.
Wei, Wei & Co., LLP, in New York, N.Y., expressed substantial
doubt about Global Arena's ability to continue as a going concern,
following the Company's results for the fiscal year ended Dec. 31,
2011. The independent auditors noted that the Company has
suffered recurring losses since inception, experiences a
deficiency of cash flow from operations and has a stockholders
deficiency.
GOOD SAM: Reports $13.4% Revenue Growth in Second Quarter
---------------------------------------------------------
Good Sam Enterprises, LLC, reported second quarter 2012 revenues
of $146.3 million, a 13.4% increase over the second quarter of
2011, and the highest quarter since 2008. Retail revenues grew
19.7%, through a 9.6% increase in same store sales along with
opening thirteen new retail stores over the last eighteen months.
Membership revenues grew 6.9%, primarily due to contract price
increases within the extended vehicle warranty program, an
increase in emergency road service revenue of 7.3% due to a 10.0%
growth in contracts in force, and the additional Good Sam Rally
this quarter which took place in Louisville, Kentucky. Media
revenues were down 23.7% for the quarter from the prior year.
Two-thirds of the media revenue reduction was attributable to the
disposition of negative or low margin non-core businesses sold or
closed and the remainder was primarily due to lower advertising
revenue.
Income from operations for the second quarter of 2012 will be
above second quarter 2011 results but will be mitigated in
comparison to the increase in revenue primarily attributable to
increased marketing expenses directed at creating overall brand
awareness and growing the file size of the Good Sam Club branded
products and services.
The Company expects to file, on Aug. 14, 2012, its quarterly
report on Form 10-Q for the second quarter ended June 30, 2012.
The report will be available on the SEC's Web site at www.sec.gov.
Marcus Lemonis, President and CEO and Thomas Wolfe, CFO will host
a conference call to discuss the second quarter 2012 financial
results at 8:00 a.m. PT on Aug. 15, 2012.
About Good Sam
Ventura, Calif.-based Affinity Group Holding, Inc., now known as
Good Sam Enterprises, LLC, is a holding company and the direct
parent of Affinity Group, Inc. The Company is an indirect wholly-
owned subsidiary of AGI Holding Corp, a privately-owned
corporation. The Company is a member-based direct marketing
organization targeting North American recreational vehicle owners
and outdoor enthusiasts. The Company operates through three
principal lines of business, consisting of (i) club memberships
and related products and services, (ii) subscription magazines and
other publications including directories, and (iii) specialty
merchandise sold primarily through its 78 Camping World retail
stores, mail order catalogs and the Internet.
The Company's balance sheet at March 31, 2012, showed
$232.60 million in total assets, $486.69 million in total
liabilities, and a $254.09 million total members' deficit.
* * *
Affinity Group Inc. carries 'B3' long term corporate family and
probability of default ratings, with 'stable' outlook, from
Moody's Investors Service.
As reported in the Troubled Company Reporter on November 9, 2010,
Standard & Poor's Ratings Services assigned Affinity Group Inc.'s
proposed $325 million senior secured notes due 2016 its
preliminary 'B-' issue-level rating. Following the close of the
proposed transaction, S&P expects to assign a 'B-' corporate
credit rating to Affinity Group Inc., and withdraw S&P's current
'D' corporate credit rating on Affinity Group Holding Inc. A
portion of the proceeds of the new notes will be used, in
conjunction with cash contributions from Holding's parent, to
repay in full $88 million of senior notes that are currently
outstanding at Holding.
S&P said the expected 'B-'corporate credit rating on Affinity
Group reflects S&P's expectation that, following the proposed
refinancing transaction, adjusted debt leverage will be reduced by
about 1x, the company will not have any meaningful near-term debt
maturities, and the company will generate some discretionary cash
flow (albeit minimal). Still, credit measures will remain
relatively weak, as adjusted debt leverage will remain above 6.0x
(S&P's operating lease adjustment adds about a turn to leverage),
and S&P expects interest coverage to remain in the low- to mid-
1.0x area over the intermediate term.
GUAM POWER: Fitch Affirms 'B+' Rating on $56.1MM Revenue Bonds
--------------------------------------------------------------
Fitch Ratings has affirmed the ratings on the following bonds
issued by the Guam Power Authority (GPA or the authority):
-- $523.3 million senior revenue bonds at 'BBB-';
-- $56.1 million subordinate revenue bonds at 'BB+'.
The Rating Outlook on all bonds is Stable
SECURITY
The senior revenue bonds are payable and secured by net revenues
of the system. The subordinate bonds are limited obligations of
GPA secured by a lien on and pledge of the net revenues, subject
to the prior pledge of revenues securing the senior bonds.
KEY RATING DRIVERS
SOLE PROVIDER ISLAND SYSTEM: GPA benefits from its position as the
sole provider of retail electricity to the 175,000 residents of
the island of Guam, the western-most territory of the U.S. The
island economy is supported by the heavy and increasing presence
of the U.S. Navy, the system's largest customer (18.2% of total
revenue).
SUBJECT TO RATE REGULATION: GPA's electric rates are regulated by
the local Public Utility Commission (PUC), which limits the
authority's financial flexibility and may delay the timing or
amount of rate increases necessary to meet operating costs.
Recent base rate increases, fuel cost recoveries, and changes to
GPA's rate structure are viewed favorably by Fitch.
WEAK LIQUIDITY: GPA's working capital fund is exposed to
fluctuations in fuel prices and a levelized energy cost recovery
mechanism that does not guarantee timely recovery of fuel related
costs.
NO FUEL DIVERSITY: Generation resources on Guam are 100% fuel-oil
based which exposes GPA to market price volatility. GPA is
finalizing an updated integrated resource plan (IRP) that is
expected to address fuel diversity and the potential of adding
renewable sources to the resource mix. However, progress toward
diversification is expected to be slow.
ECONOMY TIED TO TOURISM: The Guam economy is heavily influenced by
tourism and has been negatively affected by the global economic
slowdown and the March 2011 earthquake and tsunami in Japan.
Civilian visitors declined 2.3% in fiscal 2011, but fiscal 2012
visitors through March are 6.2% higher.
WHAT COULD TRIGGER A RATING ACTION
RESTRICITIVE RATE REGULATION: Future regulatory decisions that
prevent the authority from adequately recovering costs would
likely result in downward pressure on the rating or Outlook.
LIQUIDITY POSITION: GPA's ability to maintain access to sufficient
liquidity and achieve greater financial stability will be critical
factors in any decision to consider any rating action, upward or
downward.
CREDIT PROFILE
GPA is the sole provider of retail electricity service to the
island of Guam, located in the Pacific Ocean, 3,800 miles
southwest of Hawaii. GPA's current governance structure, which
has been in place since 2003, has proven to be effective and has
helped to dismiss past political risk associated with rate
increases and other system approvals. While the Consolidated
Commission on Utilities, a five member board which governs GPA,
has been effective, there still remains some political risk given
the island's economy and rate payer's sensitivity to rising
electric rates as fuel costs increase.
WEAK BUT STABLE LIQUIDITY
GPA's rating reflects its weak financial metrics and debt service
coverage history, which includes both bond debt service as well as
capital lease principal and interest payments. Additionally,
liquidity is minimal and given GPA's exposure to volatile fuel
prices and a limited fuel cost adjustment mechanism, the utility
has difficulty building and maintaining reserves. Cash on hand at
fiscal year end, Sept. 30, 2011, was modestly lower than the prior
year at $27.4 million (30 days cash). Building and maintaining
stronger liquidity is key to maintaining the ratings at their
current level.
RATE INCREASE APPROVED
The PUC recently approved GPA's five-year rate plan that included
a 6% increase in base rates ($9.1 million) and the implementation
of a working capital surcharge adjustment and demand charge
effective May 2012, which is favorable. The approved increase was
lower than GPA's request (10.7%) over the period, but is positive
nonetheless.
OVERDUE GOVERNMENT RECEIVABLES HAVE DECLINED
Long-term receivables have declined to $4.7 million (or $1.8
million when factoring in current portion due in fiscal 2012).
The customer with the largest balance is Guam Department of
Education (GDE) with an outstanding balance of $4.1 million as of
Sept. 30, 2011. GDE is on a payment schedule with GPA of
approximately $200,000 per month with 4.47% annual interest and is
expected to make the final payment in July 2013. GPA has
benefited from a more favorable government who has worked with
agencies in getting them to pay their bills as well as what was
owed from previous years.
HAMPTON ROADS: Incurs $5.7 Million Net Loss in Second Quarter
-------------------------------------------------------------
Hampton Roads Bankshares, Inc., announced financial results for
the second quarter of 2012. The Company reported a net loss of
$5.7 million for the quarter, compared to losses of $7.9 million
for the first quarter of 2012 and $18.8 million for the second
quarter of 2011. Second quarter 2012 results benefitted from a
lower provision for loan losses due to continued improvements in
credit quality, additional declines in operating expenses and
increased origination activity in the Company's mortgage business.
"We are pleased to report another quarter of positive trends on
many fronts, including credit, margins, and operating efficiency,"
said Douglas Glenn, President and Chief Executive Officer. "We
have a strong team of experienced community bankers who are
focused on meeting the lending and other banking needs of the
families and businesses in our markets. The capital raised during
the quarter, which we expect to supplement with our planned rights
offering, provides additional support to our bankers and gives us
the opportunity to continue our positive momentum."
Net interest income for the second quarter of 2012 was $16.2
million, compared to $16.7 million in the first quarter of 2012
and $18.2 million in the second quarter of 2011. Net interest
margin during the quarter was 3.66%, compared to 3.62% in the
previous quarter and 3.20% in the second quarter of 2011. The
significant improvement in margin from the prior-year period
reflects lower funding costs and a modest increase in the
proportion of loans to earning assets.
A copy of the press release is available for free at:
http://is.gd/Cw14No
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010.
The Company's balance sheet at March 31, 2012, showed $2.13
billion in total assets, $2.02 billion in total liabilities and
$105.29 million in total shareholders' equity.
HAMPTON ROADS: Files Form S-1, Registers 64.3-Mil. Common Shares
----------------------------------------------------------------
Hampton Roads Bankshares, Inc., filed with the U.S. Securities and
Exchange Commission a Form S-1 relating to the distribution, at no
charge, to holders of the Company's common stock, par value $0.01
per share, non-transferable subscription rights to purchase up to
64,285,715 shares of the Company's Common Stock at a price of
$0.70 per share in this rights offering. Holders will receive one
Right for each full share of Common Stock held by holders of
record as of 5:00 p.m., New York City time, on May 31, 2012. Each
Right will entitle the holder of that Right to purchase:
(i) 1.8600 shares of Common Stock at a subscription price of
$0.70 per share; and
(ii) to the extent that holder has exercised all of its Basic
Subscription Rights, 2.0667 additional shares of Common
Stock at a subscription price of $0.70 per share.
However, the exercise of Rights will be limited so that no
shareholder will be permitted to beneficially own, together with
any other person with whom that shareholder's shares of Common
Stock may be aggregated under applicable law, (i) more than 4.9%
of the Company's equity securities unless that shareholder owned
more than 4.9% of the Company's equity securities on the Record
Date or (ii) more than 9.9% of the Company's equity securities.
The Rights Offering will expire at 5:00 p.m., New York City time,
on Sept. 5, 2012.
The Rights Offering is being made directly by the Company. The
Company is not using an underwriter.
A copy of the prospectus is available for free at:
http://is.gd/qSoDhZ
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010.
The Company's balance sheet at March 31, 2012, showed $2.13
billion in total assets, $2.02 billion in total liabilities and
$105.29 million in total shareholders' equity.
HAWKER BEECHCRAFT: Deloitte OK'd as Tax Advisory Services Provider
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has authorized Hawker Beechcraft, Inc., et al., to employ Deloitte
Tax LLP as the Debtors' tax advisory services provider, nunc pro
tunc to the petition date.
Deloitte Tax will be compensated in accordance with Sections 330
and 331 of the Bankruptcy Code, the Bankruptcy Rules, the Local
Bankruptcy Rules, the Court's Order, and any other applicable
orders of the Court.
To the extent the Debtors request that Deloitte Tax perform
additional services not contemplated by the Engagement Letters or
directly related to services detailed in the Engagement Letters,
the Debtors will seek further application for an order of approval
by the Court for any such additional services.
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.
HAWKER BEECHCRAFT: Martin Pringle OK'd as General Business Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has authorized Hawker Beechcraft, Inc., et al., to employ Martin,
Pringle, Oliver, Wallace & Bauer, L.L.P., as the Debtors' general
counsel with respect to general business matters,
Martin Pringle will apply for compensation for professional
services rendered and reimbursement of expenses incurred in
connection with the Debtors' Chapter 11 cases in compliance with
Sections 330 and 331 of the Bankruptcy Code and applicable
provisions of the Bankruptcy Rules, Local Bankruptcy Rules, U.S.
Trustee Guidelines, and any other applicable procedures and orders
of the Court.
Martin Pringle will be reimbursed only for reasonable and
necessary expenses as provided by the Fee Guidelines.
The professional services provided by Martin Pringle will not be
duplicative of those services provided by Kirkland & Ellis, LLP,
or Curtis, Mallet-Prevost, Colt & Mosle LLP.
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.
HAWKER BEECHCRAFT: Mercer OK'd as Benefit and Pension Consultants
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has authorized Hawker Beechcraft, Inc., et al., to employ Mercer
(US), Inc., and its affiliates Mercer Investment Consulting, Inc.,
and Mercer Health & Benefits LLC as the Debtors' benefits and
pension consultants, nunc pro tunc to the Petition Date.
Mercer will file monthly, interim, and final fee applications for
allowance of its compensation and expenses relating to the
Restructuring Pension Consulting Services and other Hourly Fees in
accordance with the procedures set forth in Sections 330 and 331
of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy
Rules, the Compensation Order, the guidelines established by the
Office of the United States Trustee, and any other applicable
orders of the Court.
Mercer will not be required to file monthly, interim, and final
fee applications for allowance of its compensation for the
Ordinary Course Benefits Consulting Services and Mercer
is authorized to be compensated for the Ordinary Course Benefits
Consulting Services in the ordinary course of business.
The Debtors are authorized to pay Mercer its Fixed Fee in the
ordinary course of business, and Mercer will not be required to
file monthly and interim fee applications for allowance of its
Fixed Fee, however Mercer will file a final fee application for
such services, which will not be subject to the standard of review
set forth in Section 330 of the Bankruptcy Code except by the
Court, the U.S. Trustee, and the Committee.
Mercer will be reimbursed only for reasonable and necessary
expenses as provided by the Fee Guidelines.
The professional services provided by Mercer will not be
duplicative of those services provided by Perella Weinberg
Partners LP or other professionals retained by the Debtors.
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.
HAWKER BEECHCRAFT: Bank Debt Trades at 28.37% Off
-------------------------------------------------
Participations in a syndicated loan under which Hawker Beechcraft
is a borrower traded in the secondary market at 71.63 cents-on-
the-dollar during the week ended Friday, July 27, 2012, a drop of
2.60 percentage points from the previous week according to data
compiled by LSTA/Thomson Reuters MTM Pricing and reported in The
Wall Street Journal. The Company pays 200 basis points above
LIBOR to borrow under the facility. The bank loan matures on
March 26, 2014. The loan is one of the biggest gainers and losers
among 166 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, manufactures business jets, turboprops and piston
aircraft for corporations, governments and individuals worldwide.
Hawker Beechcraft reported a net loss of $631.90 million on
$2.43 billion of sales in 2011, compared with a net loss of
$304.30 million on $2.80 billion of sales in 2010.
Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3,
2012, having already negotiated a plan that eliminates $2.5
billion in debt and $125 million of annual cash interest expense.
The plan, to be filed by June 30, will give 81.9% of the new stock
to holders of $1.83 billion of secured debt, while 18.9% of the
new shares are for unsecured creditors. The proposal has support
from 68% of secured creditors and holders of 72.5% of the senior
unsecured notes.
Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp. The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in total
liabilities and a $956.90 million total deficit. Other claims
include pensions underfunded by $493 million.
Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy
Solutions LLC is the claims and notice agent.
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.
INOVA TECHNOLOGY: To Offer 375 Million Shares of Common Stock
-------------------------------------------------------------
Inova Technology, Inc., filed with the U.S. Securities and
Exchange Commission a Form S-1 relating to the offering of up to
375,000,000 shares of common stock of the Company in a self-
underwritten direct public offering, without any participation by
underwriters or broker-dealers. The shares will be sold through
the efforts of the Company's officers and directors.
The proposed offering price is $0.01 per share. The offering
period will begin on the date this registration statement is
declared effective by the Securities and Exchange Commission and
continue, unless earlier terminated, until 5:00 P.M. Local Time,
on xxxx, 2012. There is no minimum number of shares to be sold
under this offering.
The Company's common stock is quoted on the OTC Bulletin Board
under the symbol "INVA.OB".
A copy of the Form S-1 prospectus is available for free at:
http://is.gd/jBp2RA
About Inova Technology
Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA)
-- http://www.inovatechnology.com/-- through its subsidiaries,
provides information technology (IT) consulting services in the
United States. It also manufactures radio frequency
identification (RFID) equipment; and provides computer network
solutions. The company was formerly known as Edgetech Services
Inc. and changed its name to Inova Technology, Inc., in 2007.
The Company reported a net loss of $3.35 million for the year
ended April 30, 2011, compared with a net loss of $7.06 million
during the prior year.
The Company's balance sheet at Jan. 31, 2012, showed $7.30 million
in total assets, $17.69 million in total liabilities and a $10.38
million total stockholders' deficit.
The Company has an accumulated deficit and negative working
capital and is in default on the majority of its notes payable as
of Jan. 31, 2012. These conditions raise substantial doubt as to
the Company's ability to continue as a going concern.
MaloneyBailey LLP, in Houston, Texas, noted that the Company
incurred losses from operations for fiscal 2011 and 2010 and has a
working capital deficit as of April 30, 2011. According to the
independent auditors, these factors raise substantial doubt about
Inova's ability to continue as a going concern.
INTELSAT SA: To Sell U.S. Headquarters to SL 4000 for $85 Million
-----------------------------------------------------------------
Intelsat Global Service LLC, an indirect subsidiary of Intelsat
S.A., entered into a Purchase and Sale Agreement to sell
Intelsat's U.S. administrative headquarters office building
located in Washington, DC, and to assign Seller's interest as
tenant under the Amended and Restated Lease Agreement relating to
the U.S. Administrative Headquarters Property, dated June 18,
2010, by and between the Government of the United States, as
lessor, and the Seller, as lessee, to SL 4000 Connecticut LLC, an
affiliate of those entities commonly referred to as the 601 W
Companies, a private real estate investment group, for a purchase
price of $85,000,000 in cash.
Upon the closing of the U.S. Administrative Headquarters Sale, the
Seller will enter into a lease agreement under which the Seller
will lease from the Purchaser a portion of the U.S. Administrative
Headquarters Property for an initial term of 18 months at an
annual gross rental rate of $9,000,000, with a single option to
extend the term of the Post-Closing Lease for up to an additional
12 months at an annual gross rental rate of $10,500,000. The
closing of the U.S. Administrative Headquarters Sale is contingent
upon the Ground Lessor's approval in accordance with the terms set
forth in the Ground Lease, together with other customary closing
conditions.
The proceeds from the U.S. Administrative Headquarters Sale are
expected to be used by Intelsat for its general corporate
purposes, which could include prepayment of existing debt.
Intelsat is currently in the process of selecting a location for
its new U.S. administrative headquarters office.
About Intelsat
Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite
communications services worldwide through a global communications
network of 54 satellites in orbit as of Dec. 31, 2009, and ground
facilities related to the satellite operations and control, and
teleport services. It had US$2.5 billion in revenue in 2009.
Washington D.C.-based Intelsat Corporation, formerly known as
PanAmSat Corporation, is a fully integrated subsidiary of Intelsat
S.A., its indirect parent. Intelsat Corp. had US$7.70 billion in
assets against US$4.86 billion in debts as of Dec. 31, 2010.
The Company reported a net loss of $433.99 million in 2011, a net
loss of $507.77 million in 2010, and a net loss of $782.06 million
in 2009.
The Company's balance sheet at March 31, 2012, showed $17.40
billion in total assets, $18.52 billion in total liabilities,
$49.51 million in noncontrolling interest and a $1.16 billion
total Intelsat S.A. shareholder's deficit.
* * *
Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings
from Standard & Poor's. It has 'Caa1' corporate family and
probability of default ratings from Moody's Investors Service.
JASPER BANKING: Closed; Stearns Bank Assumes All Deposits
---------------------------------------------------------
Jasper Banking Company of Jasper, Ga., was closed Friday, July 27,
by the Georgia Department of Banking and Finance, which appointed
the Federal Deposit Insurance Corporation as receiver. To protect
the depositors, the FDIC entered into a purchase and assumption
agreement with Stearns Bank National Association of St. Cloud,
Minn., to assume all of the deposits of Jasper Banking.
The three branches of Jasper Banking Company will reopen during
their normal business hours as branches of Stearns Bank.
Depositors of Jasper Banking will automatically become depositors
of Stearns Bank. Deposits will continue to be insured by the
FDIC, so there is no need for customers to change their banking
relationship in order to retain their deposit insurance coverage
up to applicable limits. Customers of Jasper Banking should
continue to use their existing branch until they receive notice
from Stearns Bank National Association that it has completed
systems changes to allow other Stearns Bank branches to process
their accounts as well.
As of March 31, 2012, Jasper Banking Company had about $216.7
million in total assets and $213.1 million in total deposits. In
addition to assuming all of the deposits of the failed bank,
Stearns Bank agreed to purchase essentially all of the assets.
The FDIC and Stearns Bank entered into a loss-share transaction on
$106.0 million of Jasper Banking Company's assets. Stearns Bank
will share in the losses on the asset pools covered under the
loss-share agreement. The loss-share transaction is projected to
maximize returns on the assets covered by keeping them in the
private sector. The transaction also is expected to minimize
disruptions for loan customers. For more information on loss
share, please visit:
http://www.fdic.gov/bank/individual/failed/lossshare/index.html
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-822-9247. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/jasper.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $58.1 million. Compared to other alternatives, Stearns
Bank's acquisition was the least costly resolution for the FDIC's
DIF. Jasper Banking Company is the 39th FDIC-insured institution
to fail in the nation this year, and the ninth in Georgia. The
last FDIC-insured institution closed in the state was First
Cherokee State Bank, Woodstock, on July 20, 2012.
JEFFERSON COUNTY, AL: BNY Mellon Demands to See Books, Sewer Data
-----------------------------------------------------------------
Carla Main, substituting for Bloomberg News bankruptcy columnist
Bill Rochelle, reports that Bank of New York Mellon Corp. asked
U.S. Bankruptcy Judge Thomas B. Bennett to order Jefferson County,
Alabama, to produce books and records for the bank so it can learn
about the value of the county's sewer system.
According to the report, the bank made the request for a
Bankruptcy Rule 2004 examination, demanding the bankrupt county
produce records "pertaining to the identification, condition,
capacity, use, cost and value of assets comprising the county's
sewer system," according to a court filing yesterday.
The report relates that BNY Mellon is the indenture trustee in
Jefferson County's bankruptcy case.
Jefferson County made improvements to the sewer in 1996 and issued
warrants under an indenture contract at that time, BNY Mellon said
in the filing. The county "defaulted under its obligations" under
the indenture, the bank said. Jefferson County seeks to modify
the amounts it owes under the indenture. BNY Mellon says the
indenture isn't subject to modification.
The lawsuit over control of the sewers and revenue is Bank of New
York Mellon v. Jefferson County, Alabama (In re Jefferson County,
Alabama), 12-00016, U.S. Bankruptcy Court, Northern District of
Alabama (Birmingham).
About Jefferson County
Jefferson County has its seat in Birmingham, Alabama. It has a
population of 660,000.
Jefferson County filed a bankruptcy petition under Chapter 9
(Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an
agreement among elected officials and investors to refinance
$3.1 billion in sewer bonds fell apart.
John S. Young Jr. LLC was appointed as receiver by Alabama Circuit
Court Judge Albert Johnson in September 2010.
Jefferson County's bankruptcy represents the largest municipal
debt adjustment of all time. The county said that long-term debt
is $4.23 billion, including about $3.1 billion in defaulted sewer
bonds where the debt holders can look only to the sewer system for
payment.
The county said it would use the bankruptcy court to put a value
on the sewer system, in the process fixing the amount bondholders
should be paid through Chapter 9.
Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers
at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff &
Stern LLP, led by Kenneth Klee, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC serves as claims and noticing
agent. Jefferson estimated more than $1 billion in assets. The
petition was signed by David Carrington, president.
The bankruptcy judge in January 2012 ruled that the state court-
appointed receiver for the sewer system largely lost control as a
result of the bankruptcy. Before deciding whether Jefferson County
is eligible for Chapter 9, the bankruptcy judge will allow the
Alabama Supreme Court to decide whether sewer warrants are the
equivalent of "funding or refunding bonds" required under state
law before a municipality can be in bankruptcy.
U.S. District Judge Thomas B. Bennett ruled in March 2012 that
Jefferson County is eligible under state law to pursue a debt
restructuring under Chapter 9. Holders of more than $3 billion in
defaulted sewer debt had challenged the county's right to be in
Chapter 9.
JEFFERSON COUNTY, AL: Moody's Confirms 'Caa3' on Sewer Rev. Debt
----------------------------------------------------------------
Moody's Investors Service has confirmed the following ratings on
Jefferson County (AL) and assigned a negative outlook: Caa3 rating
on $3.14 billion in sewer revenue debt; Caa3 rating on $200.52
million in outstanding general obligation debt; Ca rating on
$83.64 million in outstanding lease revenue warrants, issued
through the Jefferson County Public Building Authority; B3 rating
on $814.08 million in limited obligation school bonds; and B3
rating on $32.92 million in special tax bonds issued through the
Birmingham-Jefferson County Civic Center Authority and secured by
various county-wide excise taxes and other county revenues.
Confirmation of the county's existing ratings reflects Moody's
current analysis of expected loss for the various classes of debt.
The ultimate determination of default and loss through the
bankruptcy proceedings and related litigation is likely to occur
over a protracted time frame beyond the period of a review for
possible downgrade. The negative outlook reflects the possibility
that ultimate losses to bondholders once bankruptcy proceedings
conclude could exceed the levels implied by the current ratings.
Among other issues, Moody's continues to monitor the payment of
debt service on the county's various obligations subsequent to the
original bankruptcy filing (November 9, 2011). Jefferson County
has been in default on its variable rate and auction rate sewer
bonds since 2008; the next fixed rate debt service payment for
sewer bonds is 8/1/2012.
The county has been in default on its variable rate demand GO bank
warrants (Series 2001B) held by liquidity providers since 2008 and
as of 4/1/2012, defaulted for the first time on its fixed rate GO
warrants in order to preserve an already narrow cash position and
continue to provide essential services. The next debt service date
for the county's fixed rate debt general obligation bonds is
10/1/2012.
Debt service payments on the county's outstanding lease revenue
warrants, issued through the Jefferson County Public Building
Authority, continue to be made in full. However the most recent
payment on 4/1/2012 was made from the bond reserve fund, an event
of technical default. The next debt service payment for the lease
revenue warrants is 10/1/2012.
Subsequent to the bankruptcy filing, the county has continued to
make scheduled debt service payments on the school bonds and
special tax bonds. The next debt service payment date on fixed
rate school bonds and special tax bonds is 1/1/2013.
The methodologies used in this rating were General Obligation
Bonds Issued by U.S. Local Governments published in October 2009
and Analytical Framework For Water And Sewer System Ratings
published in August 1999.
JEWISH COMMUNITY CENTER: Aug. 6 Hearing on Plan Outline, Dismissal
------------------------------------------------------------------
Judge Michael B. Kaplan will convene a hearing on Aug. 6, 2012, at
2:00 p.m. to consider approval of the disclosure statement
explaining the terms of the Jewish Community Center of Greater
Monmouth County's Chapter 11 Plan. The hearing was originally
scheduled for July 26.
The Debtor filed the Plan and Disclosure Statement on June 22,
2012. The salient terms are:
* TD Bank, N.A., holder of a secured claim of $6.71 million,
will receive monthly interest payments on the total amount
of the undisputed claim at the variable interest rate of
30-day LIBOR plus 2% commencing on the Effective Date.
Beginning at the end of the 13 month following the Effective
Date, Debtor will in addition to the interest payment make a
monthly principal payment based upon a 30 amortization
schedule with a balloon payment at the end of the 72 months.
* Holders of general unsecured claims estimated to total
$1.66 million will be paid 25% of their claims unless the
holder of any allowed unsecured claim elects to receive 100%
of its claims with payments commencing one year after the
Effective Date for 60 months thereafter, secured by a third
mortgage against the Property.
* Member interests will be extinguished as of the Effective
Date. All existing or pending rights to signage or
dedications relating to the building will be extinguished.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/Jewish_Comm_DS_062212.pdf
On June 27, the U.S. Trustee filed a motion to dismiss the Chapter
11 case, due to the Debtor's failure to file monthly operating
reports, failure to pay quarterly fees, substantial or continuing
loss to or diminution of the estate and the absence of a
reasonable likelihood of rehabilitation and failure to provide
proof of continuing general commercial liability insurance.
A hearing on the dismissal is also scheduled for Aug. 6.
Early in July, the U.S. Trustee filed objections to the Disclosure
Statement.
The U.S. Trustee notes the Debtor indicated it will have $700,000
in cash on the effective date of the Plan to pay off $300,000 for
Effective Date payments of claims. However, according to the U.S.
Trustee, the feasibility analysis set forth in the Disclosure
Statement does not include payments for priority wage claims
($195,298) or administrative claims. The Debtor, the U.S.
Trustee, adds has not identified the lenders and their abilities
to fund the $1 million line of credit that will be used to fund
the Effective Date payments.
About Jewish Community
Headquartered in Deal Park, New Jersey, Jewish Community Center Of
Greater Monmouth County, A Not-For-Profit Corporation --
http://jccmonmouth.org/-- offers services, programs, events,
activities, and facilities to Jewish families and individuals in
Monmouth County.
Jewish Community filed for Chapter 11 bankruptcy (Bankr. D. N.J.
Case No. 11-44738) on Dec. 5, 2011. Judge Michael B. Kaplan
presides over the case. Timothy P. Neumann, Esq., at Broege,
Neumann, Fischer & Shaver, serves as the Debtor's bankruptcy
counsel. In its petition, the Debtor estimated assets of
$10 million to $50 million and debts of $1 million to $10 million.
JRG PROPERTIES: Case Summary & 5 Unsecured Creditors
----------------------------------------------------
Debtor: JRG Properties, LLC a California Limited Liability Company
626 E. 62nd Street
Los Angeles, CA 90001
Bankruptcy Case No.: 12-35303
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
Central District of California (Los Angeles)
Judge: Robert N. Kwan
Debtor's Counsel: Andrew P. Altholz
100 Wilshire Boulevard, Suite 950
Santa Monica, CA 90401
Tel: (310) 451-0789
Fax: (310) 821-4905
E-mail: andrewpaltholz@msn.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $500,001 to $1,000,000
A copy of the Company's list of its five unsecured creditors filed
with the petition is available for free at:
http://bankrupt.com/misc/cacb12-35303.pdf
The petition was signed by Jaime Garcia, officer & manager.
LAKSILU, INC.: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Laksilu, Inc.
dba Luxury Perfume
Luxury Perfumes
Starlux Perfumes Wholesale
Luxury Perfume Outlet
Forever Perfumes
22500 Town Circle Suite 1183
Moreno Valley, CA 92553
Bankruptcy Case No.: 12-27130
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
Central District of California (Riverside)
Judge: Deborah J. Saltzman
Debtor's Counsel: Marta C. Wade, Esq.
CREIM MACIAS KOENIG & FREY LLP
633 W. Fifth Street, 51st Floor
Los Angeles, CA 90071
Tel: (213) 614-1944
Fax: (213) 614-1961
E-mail: mwade@cmkllp.com
Estimated Assets: $0 to $50,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/cacb12-27130.pdf
The petition was signed by Lakshman Wickramarachchi, president.
LEHMAN BROTHERS: Settles Dispute Over Swap Deal With Deutsche
-------------------------------------------------------------
Lehman Brothers Holdings, Inc., as Plan Administrator, asks Judge
James Peck of the U.S. Bankruptcy Court for the Southern District
of New York to approve a settlement with respect to certain
prepetition derivatives contracts for which Deutsche Bank National
Trust Company serves as indenture trustee.
In the ordinary course of business prior to Sept. 15, 2008,
Lehman Brothers Special Financing Inc. and Lehman Brothers
Derivatives Products Inc. were active participants in the swap
markets and entered into various types of swap agreements,
including interest rate swaps. LBSF and LBDP are each party to
one or more separate swap agreements with four of the trusts for
which Deutsche Bank National Trust Company serves as indenture
trustee. Subsequent to the Petition Date, five of the swap
agreements matured in accordance with their own terms while three
of the swap agreements were terminated by LBDP.
As of July 24, 2012, the Trusts that are party to the Matured
Swaps have retained approximately $39.6 million in the aggregate
payments due to LBSF and $3.5 million payments due to LBDP. As
to the Terminated Swaps, LBDP sent a statement indicating the
termination amount of $717,055 and demanding payment of the
amount. The Trustee disputes the amounts and the interpretation
of transaction documents and applicable law.
Under the settlement, which is a result of more than two years of
negotiations, the Lehman Counterparties and the Trustee agreed
that each Trust will pay the applicable Lehman Counterparty their
settlement amount. The Settlement amount for each Trust is equal
to (a) 100% of the cash withheld by the Trust on account of
payments under its Swap Agreement, less (b) reasonable and
documented fees and expenses of the Trust, and excluding (c) any
interest.
To the extent the Swap Agreements with LBDP were terminated and
the applicable Trusts did not set aside any amounts as payments
due under the Swap Agreements, the Settlement Amount for that
Trust is $0.
As a result of the settlement, Claim Nos. 18492, 18497, 18549,
18512, 18498, 18500, 18501, 18503, 18505, 18507, 18495, 18494,
18510, 18514, 18496, 18499, 18502, and 18506 will be disallowed
and expunged, and the adversary proceeding arising from the same
swap agreements will be dismissed.
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: U.S. Trustee Opposes $33MM in Contribution Fees
----------------------------------------------------------------
The U.S. Trustee, a Justice Department agency that oversees
bankruptcy cases, is blocking efforts by Lehman Brothers Holdings
Inc.'s creditors to get the company to pay more than $33 million.
A group of creditors led by Bank of America N.A asked the U.S.
Bankruptcy Court in Manhattan to approve its application for
payment of more than $13.7 million in fees and expenses. The
creditors argued they made "substantial contribution" in the
Lehman's bankruptcy case and have to be paid for their efforts.
Similar applications were also filed by Goldman Sachs Bank, a
group of holders of notes issued by Lehman Brothers Treasury Co.
and another group which calls itself the ad hoc group of Lehman
Brothers creditors.
In a court filing, the U.S. Trustee said it is opposing the
approval of certain fees sought, pointing out that the creditors
failed to prove that they provided "substantial contribution to
all creditors and the estates."
"Applicants must support their requests for fees and expenses
with specific, detailed and itemized documentation to meet their
burden of proof," the agency said.
The U.S Trustee also argued the creditors are demanding payment
for non-attorney and accountant professional services to which
they are not entitled under U.S. bankruptcy law.
A court hearing to consider the applications is scheduled for
August 15. Objections were due by July 25.
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: SIPA Trustee Proposes BlackRock Claims
-------------------------------------------------------
James W. Giddens, as trustee for the liquidation of Lehman
Brothers Inc. under the Securities Investor Protection Act, asks
the Court to approve a settlement agreement among the SIPA
Trustee, BlackRock Financial Management Inc., and certain of its
affiliates, on its own behalf and on behalf of participating
clients.
The SIPA Trustee, as a result of his investigation of potential
causes of actions affecting the assets and property of LBI,
identified potential claims arising from certain to-be-announced
trades ("TBA") entered into between LBI and BlackRock on behalf
of its clients prior to Sept. 15, 2008.
The settlement, if approved, will facilitate the return to the
LBI estate of up to $35 million associated with the TBA Trades
and, in the event the settlement amount falls below the $35
million dollar threshold contemplated by the settlement
agreement, the Trustee retains the right to pursue his claims
against certain non-participating counterparties and BlackRock
for the difference between the settlement amount actually paid
and $64 million, together with interest and attorneys' fees.
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: LBI Trustee Resolves Repo Claims Objections
------------------------------------------------------------
James W. Giddens, as trustee for the liquidation of Lehman
Brothers Inc. under the Securities Investor Protection Act,
previously sought and obtained Court approval of a second amended
stipulation with each of the Federal Deposit Insurance
Corporation, as receiver of Westernbank Puerto Rico, Hudson City
Savings Bank, and CarVal Investors UK Limited as manager of
assignee of Doral Bank and Doral Financial Corporation with
respect to certain customer claims asserted by the claimants.
The asserted claims arose out of repurchase and/or reverse
repurchase transactions with LBI under the SIPA proceeding.
Under the Second Amended Stipulation:
-- the Test Case Repo Claimants and other interested parties
will have filed their opposition to the Repo Motion by
July 20, 2012;
-- the LBI Trustee must conclude depositions concerning the Repo
Motion Opposition by Sept. 5, 2012;
-- any support reply papers to the Repo Motion must be filed by
Sept. 19, 2012; and
-- the LBI Trustee will have asked the Court by Nov. 21, 2012
for a hearing date of the Repo Motion.
Pursuant to the Second Amended Stipulation, the Test Repo
Claimants submitted memoranda in support of their opposition to
the Trustee's claims determination.
Hudson relates that it seeks customer status relating to its
claim to recover approximately $14 million in excess securities
under LBI's dominion and control on LBI's filing date. Those
excess securities, Hudson asserts, were transferred to LBI
pursuant to the terms of Hudson's repurchase agreements to
insulate LBI from any market risk associated with fluctuations in
the price of the subject securities.
There can be no legitimate dispute that Hudson meets SIPA's
statutory definition of customer, Hudson asserts.
The FDIC and CarVal argue that it is longstanding precedent that
claims arising from repurchase agreements are customer claims
under SIPA. The Repo Claimants, they assert, satisfy each
element under SIPA to establish a customer claim.
Pursuant to their repo agreements with LBI, the Repo Claimants
delivered securities to LBI that were returned on a fixed future
date, or earlier at the Repo Claimants' demand, the FDIC and
CarVal relate. While legal title to those securities was passed,
the Repo Claimants retained the beneficial economic interest in
the securities during the term of the repo transactions,
including receiving all coupon interest and redemption payments,
the FDIC and CarVal assert.
The Test Repo Claimants seek the Court's authority to file under
seal exhibits in the supporting declarations they submitted and
these exhibits contain confidential and commercial information
relating to their assets, their claim in the LBI proceeding, and
the Trustee's resolution of those claims.
In support of its objection, the FDIC submitted the declarations
of:
-- Peter Feldman, Esq., a member of Ottenbourg, Steindler,
Houston & Rosen, P.C., a full-text copy of which is
available for free at:
http://bankrupt.com/misc/LBHI_DecFeldman.pdf
-- Freddy Maldonado, chief financial officer and senior
executive vice-president of finance, investment and
treasury for Westernbank, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/LBHI_DecMaldonado.pdf
-- Maricarmen Logron Torres, an employee at Doral Bank, a
full-text copy of which is available for free at:
http://bankrupt.com/misc/LBHI_DecTorres.pdf
The Test Repo Claimants also submitted the declaration of John D.
Finnerty, Ph.D., in support of their claims. Dr. Finnerty is the
founding Director of Master of Science in Quantitative Finance
Program in the Graduate School of Business Administration at
Fordham University where he is professor of finance. A full-text
copy of Dr. Finnerty's Declaration is available for free at:
http://bankrupt.com/misc/LBHI_DecFinnerty.pdf
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)
LEVEL 3: To Sell $300 Million of 8.875% Senior Notes Due 2019
-------------------------------------------------------------
Level 3 Communications, Inc., has agreed to sell $300 million
aggregate principal amount of its 8.875% Senior Notes due 2019 in
a private offering to "qualified institutional buyers," as defined
in Rule 144A under the Securities Act of 1933, as amended, and
non-U.S. persons outside the United States under Regulation S
under the Securities Act of 1933, as amended.
The net proceeds from the offering of the notes will be used for
general corporate purposes, including the potential repurchase,
redemption, repayment or refinancing of the Company's and its
subsidiaries' existing indebtedness from time to time.
The new 8.875% Senior Notes were priced to investors at 100% of
their principal amount and will mature on June 1, 2019. The
8.875% Senior Notes will not be guaranteed by any of the Company's
subsidiaries.
The offering is expected to be completed on Aug. 1, 2012, subject
to the satisfaction or waiver of customary closing conditions.
About Level 3 Communications
Headquartered in Broomfield, Colorado, Level 3 Communications,
Inc., is a publicly traded international communications company
with one of the world's largest communications and Internet
backbones.
The Company reported a net loss of $756 million in 2011, a net
loss of $622 million in 2010, and a net loss of $618 million in
2009.
The Company's balance sheet at March 31, 2012, showed
$13.07 billion in total assets, $11.76 billion in total
liabilities, and $1.31 billion in total stockholders' equity.
* * *
Level 3 Communications carries a 'Caa1' corporate family rating,
and 'Caa2' probability of default rating, with negative outlook
from Moody's, a 'B-' issuer default rating from Fitch, and 'B-'
long term issuer credit ratings from Standard & Poor's.
As reported by the TCR on April 2, 2012, Fitch Ratings upgraded
Level-3 Communications' Issuer Default Rating to 'B' from 'B-' on
Oct. 4, 2011, and assigned a Positive Outlook. The rating action
followed LVLT's announcement that the company closed on its
previously announced agreement to acquire Global Crossing Limited
(GLBC) in a tax-free, stock-for-stock transaction.
LIFEPOINT HOSPITALS: Fitch Rates New $450MM Senior Bank Loan 'BB+'
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to LifePoint Hospitals,
Inc.'s (LifePoint) new $450 million senior bank term loan and $350
million senior revolving credit facility due July 2017. The new
term loan and revolver will replace the existing bank debt,
including refinancing the $443 million term loan. LifePoint's
Issuer Default Rating (IDR) is rated 'BB' by Fitch. The Rating
Outlook is Stable. The ratings apply to approximately $1.7
billion of debt at March 31, 2012.
The ratings reflect the following:
-- At 3.0x EBITDA at March 31, 2012, LifePoint's gross debt
leverage is amongst the lowest in the for-profit hospital
industry. Debt levels pro forma for the bank debt
refinancing are unchanged.
-- Fitch expects debt could trend higher at the end of 2012 as
the result of funding acquisitions and a higher level of
capital expenditures, but remain consistent with the
company's publicly stated leverage target of 3x-4x EBITDA.
-- Liquidity is solid. While lower profitability and higher
capital expenditures could pressure the level of free cash
flow (FCF; cash from operations less dividends and capital
expenditures) generation, Fitch expects it to remain above
$150 million annually. Debt maturities for 2012-2013 are
manageable.
-- Organic operating trends in the for-profit hospital industry
are weak and Fitch expects them to remain so through the
second half of 2012. LifePoint's recent hospital
acquisitions are supporting growth for the company.
SOLID BALANCE SHEET HELPS ACQUISITION STRATEGY
LifePoint has consistently demonstrated a strong level of
financial flexibility in recent years and at current levels the
financial and credit metrics provide significant headroom within
the 'BB' rating category. Gross debt leverage is among the lowest
in the for-profit hospital industry, dropping to 3.0x EBITDA at
March 31, 2012, as a result of growth in EBITDA primarily through
the contribution of recently acquired hospitals. Debt-to-EBITDA
equals 1.2x through the senior secured bank debt, 1.5x through the
senior unsecured notes, and 3.0x through the senior subordinated
convertible notes.
Fitch believes LifePoint's debt leverage could trend slightly
higher at the end of 2012 as the result of the funding of hospital
acquisitions, but will remain consistent with the 'BB' rating
category and below the upper end of the company's stated target
leverage range of 3.0x-4.0x debt-to-EBITDA.
Fitch believes that LifePoint's relatively stronger balance sheet,
coupled with a track record of successfully managing sole provider
hospitals in rural markets, help make the company an attractive
acquirer in its preferred markets. However, based upon the
relatively higher debt leverage levels of LifePoint's industry
peers, Fitch does not believe that the company has a financial
incentive to manage its balance sheet with debt below 3.0x EBITDA.
Good Financial Flexibility
A favorable debt maturity schedule and adequate liquidity also
support LifePoint's credit profile. Following the refinancing of
the undrawn bank revolver, which was due to mature in December
2012, there are no debt maturities in the capital structure until
2014 when the $575 million senior subordinated convertible notes
mature. The $225 million senior subordinated convertible
debentures due 2025 are puttable to the company in February 2013.
Based on the terms of the new credit agreement, which includes an
accordion feature permitting additional secured debt subject to a
leverage ratio condition, Fitch expects the company will have
financial flexibility to refinance the notes should holders put
the notes to the company.
At March 31, 2012, liquidity was provided by approximately $116
million of cash, availability on the company's $350 million bank
credit facility revolver ($322 million available reduced for
outstanding letters of credit), and FCF ($133 million for the
latest 12 months [LTM] period, defined as cash from operations
less dividends and capital expenditures).
Fitch projects that LifePoint's FCF will contract by about $30
million in 2012 versus the 2011 level of $182 million. This is
because of lower profitability and higher capital expenditures.
An expectation for a slight contraction in the EBITDA margin in
2012 is primarily because of the integration of less profitable
acquired hospitals.
Capital investments in recently acquired hospitals and spending to
implement electronic health records systems are driving a higher
level of capital expenditures. LifePoint's capital expenditures as
a percent of revenue ticked up to 6.2% in 2011 from 5.2% in 2010,
and Fitch expects a higher level of spending to persist in 2012.
A higher level of capital expenditures is consistent with the
broader industry trend.
Rural Market Recovery Lagging Broader Industry
LifePoint operates 56 acute-care hospitals, primarily located in
rural markets. In 52 of its 56 markets, LifePoint's facility is
the sole acute care hospital provider in the market. Having sole
provider status in the vast majority of its markets confers
certain benefits to LifePoint in capturing organic patient volume
growth in its markets as well as in negotiating price increases
with commercial health insurers.
While LifePoint's organic patient volume growth lagged the broader
for-profit hospital industry in 2011, the company's results were
not inconsistent with the experience of other rural and suburban
market hospital operators. Across the Fitch-rated group of for-
profit hospital providers, same-hospital adjusted admissions (a
measure that is adjusted for outpatient activity) grew by 0.4% in
2011. LifePoint's same adjusted admissions were down 0.4% during
the same period.
While persistently weak organic volume trends across the industry
began to show signs of improvement in the second half of 2011,
providers in urban markets have exhibited a much stronger rebound
in volume growth. Systemic issues outside of management control,
such as weak seasonal flu and obstetrics volumes, seem to be
driving the relatively weaker organic growth in non-urban markets.
Healthcare Reform Driving Industry Value Proposition
The June 2012 U.S. Supreme Court decision on the Affordable Care
Act (ACA) does not have an immediate effect on the credit profile
of the for-profit hospital industry. Regardless of the pace and
progress of the implementation of the ACA, Fitch expects the
hospital industry to continue to move toward a care delivery model
focused on quality and reducing the cost of care, as opposed to
the largely volume-driven reimbursement model that is in place
today.
The main provisions of the ACA that will affect the for-profit
hospital industry include the mandate for individuals to purchase
health insurance or face a financial penalty, and the expansion of
Medicaid eligibility, currently expected to take effect in 2014.
Fitch expects an initially positive effect on the acute-care
hospital industry because of the coverage expansion elements of
the ACA, mostly as the result of reduced levels of uncompensated
care, but also through a mildly positive boost to utilization of
healthcare services. Over the several years following the
coverage expansion, Fitch expects to see some erosion of the
initial benefits due to a reduction in Medicare reimbursement
required by the ACA, as well as likely lower rates of commercial
health insurance reimbursement.
Rating Triggers:
While a positive rating action in unlike in the near term, it
could be driven by an expectation that the company will manage its
balance sheet with gross-debt-to-EBITDA maintained below 3.0x.
A negative rating action for LifePoint could result from some
combination of the following rating triggers:
-- Gross debt-to-EBITDA maintained above 4.0x.
-- FCF generation sustained below $150 million annually.
-- A leveraging acquisition or deterioration in financial
flexibility resulting from difficulties in integration of its
recent acquisitions.
-- A sustained weak organic growth trend for the hospital
industry, which could erode LifePoint's profitability and
financial flexibility over time.
Debt Issue Ratings
Fitch currently rates LifePoint as follows:
-- IDR 'BB';
-- Secured bank facility 'BB+';
-- Senior unsecured notes 'BB';
-- Subordinated convertible notes 'BB-'.
LIFEPOINT HOSPITALS: Moody's Rates New Sr. Sec. Facilities 'Ba1'
----------------------------------------------------------------
Moody's Investors Service assigned ratings of Ba1 (LGD 2, 27%) to
LifePoint Hospitals, Inc's. new senior secured credit facilities,
consisting of a $350 million revolver and a $450 million term loan
A. Moody's existing ratings on the company, including the Ba3
Corporate Family and Probability of Default Ratings, are unchanged
and the outlook for the ratings remains positive.
"While the new credit facilities extend the maturity of the term
loan and ensure revolver access, there is still the potential for
a significant refinancing cliff in the intermediate term given the
upcoming maturity of the company's $575 million convertible notes
due 2014," said Dean Diaz, a Moody's Senior Credit Officer.
Moody's understands that the new credit facilities were used to
refinance the company's term loan that was set to mature in 2015
and revolver set to expire at the end of 2012. Moody's is,
therefore, withdrawing the ratings on the previous credit
facilities.
Following is a summary of Moody's ratings actions.
Ratings assigned:
$350 million senior secured revolving credit facility expiring
2017, Ba1 (LGD 2, 27%)
$450 million senior secured term loan A due 2017, Ba1 (LGD 2,
27%)
Ratings withdrawn:
$350 million senior secured revolver due 2012, Ba1 (LGD 2, 27%)
$444 million senior secured term loan B due 2015, Ba1 (LGD 2,
27%)
Ratings unchanged:
$400 million senior unsecured notes due 2020, Ba1 (LGD 2, 27%)
$225 million 3.25% convertible senior sub notes due 2025, B2
(LGD 5, 82%)
Corporate Family Rating, Ba3
Probability of Default Rating, Ba3
Speculative Grade Liquidity Rating, SGL-2
Ratings Rationale
LifePoint's Ba3 Corporate Family Rating reflects Moody's
expectation that the company's operating performance will remain
strong and that leverage, interest coverage and cash flow coverage
of debt metrics will remain comfortably within acceptable ranges
for the Ba rating category. However, Moody's also anticipates a
continuation of the difficult operating environment facing
LifePoint and other for-profit hospital operators, characterized
by increasing bad debt expense and weak volume trends.
The positive rating outlook reflects Moody's expectation that
acquisitions, new strategic partnerships and ongoing physician
recruitment efforts will result in continued EBITDA growth. The
company also has ample liquidity with strong free cash flow and a
considerable cash balance to help fund future acquisition
opportunities.
Moody's could upgrade the rating if the company is able to
continue to grow earnings through its acquisitions without
significant disruption to operations or a material use of
incremental debt, such that debt to EBITDA is sustained at or
below 3.2 times. Additionally, Moody's would have to see the
company improve same-hospital adjusted admissions growth, which
has lagged the peer group. Moody's would also need to see progress
in dealing with the potential maturity cliff in the intermediate
term.
Moody's could downgrade the rating if the company aggressively
pursues acquisitions or share repurchases with the use of
incremental debt such that debt to EBITDA would be expected to be
in excess of 4.0 times for a sustained period. Additionally, if
LifePoint experiences operating challenges and is not expected to
sustain adjusted free cash flow to debt of 10% or above, Moody's
could downgrade the rating.
For further details, refer to Moody's Credit Opinion for LifePoint
Hospitals, Inc. on moodys.com.
The principal methodology used in rating LifePoint Hospitals, Inc.
was the Global Healthcare Service Providers Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
LifePoint, headquartered in Brentwood, Tennessee, is an operator
of general acute care hospitals focusing on non-urban communities.
The company generated revenue before the provision for doubtful
accounts in excess of $3.6 billion for the twelve months ended
March 31, 2012.
MANHATTAN CONTRACTING: Case Summary & Creditors List
----------------------------------------------------
Debtor: Manhattan Contracting Group, Inc.
159 Arnies Pointe
Brick, NJ 08724-4745
Bankruptcy Case No.: 12-28202
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
District of New Jersey (Trenton)
Judge: Kathryn C. Ferguson
Debtor's Counsel: Timothy P. Neumann, Esq.
BROEGE, NEUMANN, FISCHER & SHAVER
25 Abe Voorhees Drive
Manasquan, NJ 08736
Tel: (732) 223-8484
Fax: (732) 223-2416
E-mail: tneumann@bnfsbankruptcy.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed with the petition is available for free at:
http://bankrupt.com/misc/njb12-28202.pdf
The petition was signed by Anthony Castellana, president.
MEDICAL CARD: S&P Alters Watch Status on 'CCC' CCR to Developing
----------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch
implications for its 'CCC' long-term counterparty credit rating on
Medical Card System Inc. (MCS) to developing from negative. "We
took the same action on our 'B' long-term financial strength and
counterparty credit ratings on MCS's operating companies, MCS
Advantage Inc., MCS Life Insurance Co., and MCS Health Management
Options Inc.," S&P said.
"The actions reflects the potential for MCS to improve its
financial profile through positive operating results in the last
three quarters of 2012 and full-year 2012, compared with losses in
2011 and first-quarter 2012. We expect the improvement to be
driven by corrective actions taken by the company's new senior
management team, which joined the company in December 2011," said
Standard & Poor's credit analyst Neal Freedman. "Furthermore,
management is meeting regularly with the lending group regarding
potential waivers or revisions to the credit agreement to avoid a
liquidity event, and we expect audited year-end 2011 financial
statements to be available in the next 90 days."
"We could raise or lower the ratings on MCS and its operating
companies in connection with its operating performance and its
lender negotiations. Improved operating performance and a near-
term successful lender negotiation could result in a one-notch
upgrade. Conversely, if the company continues to produce operating
losses in 2012 or if lender negotiations prove unsuccessful beyond
the near term, we could lower the ratings by one or more notches."
MICHAELS STORES: John Menzer Resigns as CEO for Health Reasons
--------------------------------------------------------------
Michaels Stores, Inc., announced that John Menzer has resigned
from his position as Chief Executive Officer to enable him to
focus on recovery and rehabilitation from the stroke he suffered
in April. The Company has commenced a search for a new CEO. The
previously established Office of the CEO comprised of Lew Klessel,
interim chief operating officer for the Company and managing
director of Bain Capital, and Chuck Sonsteby, chief administrative
officer and chief financial officer, will continue to lead the
Company until the search is completed.
"Our thoughts and prayers continue to be with John and his family
during his ongoing recovery. We will greatly miss his leadership,
passion and enthusiasm, but the imprint he has left on the Company
will endure in its people and their commitment to excellence,"
said Matt Levin, Managing Director with Bain Capital Partners,
LLC. "John's contributions to Michaels cannot be overstated and
he will always remain part of the Michaels family."
Peter Wallace, Senior Managing Director with Blackstone added:
"One of John's many legacies is the strength of the team he built
throughout the organization. We are fortunate to have such a
capable group to carry forward under Lew and Chuck's leadership
while we complete the process of selecting a new CEO for the
Company."
Michaels Holdings, LLC, an entity controlled by affiliates of
investment firms Bain Capital Partners, LLC, and The Blackstone
Group L.P., currently owns approximately 93% of the outstanding
Common Stock of Michaels Stores, Inc.
About Michaels Stores
Headquartered in Irving, Texas, Michaels Stores, Inc., is the
largest arts and crafts specialty retailer in North America. As
of March 9, 2009, the Company operated 1,105 "Michaels" retail
stores in the United States and Canada and 161 Aaron Brothers
Stores.
Michaels Stores's balance sheet as of April 28, 2012, showed $1.86
billion in total assets, $4.28 billion in total liabilities and a
$2.41 billion total stockholders' deficit.
* * *
As reported by the TCR on April 5, 2012, Moody's Investors Service
upgraded Michaels Stores, Inc.'s Corporate Family Rating to B2
from B3. "The upgrade of Michaels' Corporate Family Rating
primarily reflects the positive benefits of its continuing
business initiatives which have led to consistent improvements in
same store sales," said Moody's Vice President Scott Tuhy.
In the April 16, 2012, edition of the TCR, Standard & Poor's
Ratings Services raised its corporate credit rating on Irving,
Texas-based Michaels Stores Inc. to 'B' from 'B-'. "Standard &
Poor's Ratings Services' upgrade on Michaels Stores reflects the
improvement in financial ratios following the company's
performance in the important fourth quarter, given the seasonality
of the company's business," said Standard & Poor's credit analyst
Brian Milligan. "The CreditWatch placement remains effective,
given the pending IPO."
MOTHER EARTH'S ALTERNATIVE: Marijuana Dispensary Files Chapter 11
-----------------------------------------------------------------
Stephanie Gleason, writing for Dow Jones Newswires, reports that
San Diego-based startup Mother Earth's Alternative Healing
Cooperative Inc. filed for Chapter 11 on July 25 to deal with
debt, the threat of eviction from its landlord, and litigation.
Mother Earth is a medical-marijuana dispensary, licensed by the
state of California and San Diego County, but it's seen as illegal
by the federal government.
Dow Jones notes a marijuana grower in Colorado, a state that also
issues medical-marijuana licenses, tried to file for Chapter 11
earlier this year. The case was dismissed because of failure to
file the required information.
According to the report, Mother Earth owner Bob Riedel said his
company filed for Chapter 11 because it has quite a bit of debt
built up. The bankruptcy petition provides no information about
what those debts might be, listing fewer than $50,000 in assets
and liabilities and no creditors.
The report says the cooperative's landlord is trying to evict it.
Mr. Riedel said the landlord is acting under threat from the
Department of Justice and the U.S. Drug Enforcement Agency.
MOTORS LIQUIDATION: No Distribution of Units in Second Quarter
--------------------------------------------------------------
Pursuant to the Amended and Restated Motors Liquidation Company
GUC Trust Agreement dated as of June 11, 2012, and between the
parties thereto, as amended, Wilmington Trust Company, acting
solely in its capacity as trust administrator and trustee of the
Motors Liquidation Company GUC Trust, is required to file certain
GUC Trust Reports with the Bankruptcy Court for the Southern
District of New York.
On July 24, 2012, the GUC Trust Administrator filed the GUC Trust
Report required by Section 6.2(c) of the GUC Trust Agreement, for
the quarter ended June 30, 2012. In addition, the Motors
Liquidation Company GUC Trust announced that no distribution in
respect of its Units is anticipated for the fiscal quarter ended
June 30, 2012.
A copy of the GUC Trust Report is available for free at:
http://is.gd/DVZF5L
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq.,and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
MPG OFFICE: Reports $80.2 Million Net Income in Second Quarter
--------------------------------------------------------------
MPG Office Trust, Inc., reported net income of $80.17 million on
$70.31 million of total revenue for the three months ended
June 30, 2012, compared with net income of $138.67 million on
$77.31 million of total revenue for the same period a year ago.
The Company reported net income of $90.63 million on $154.96
million of total revenue for the six months ended June 30, 2012,
compared with net income of $98.68 million on $152.92 million of
total revenue for the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $2.06 billion
in total assets, $2.88 billion in total liabilities and a $827.88
million total deficit.
A copy of the press release is available for free at:
http://is.gd/ajdA0i
About MPG Office Trust
MPG Office Trust, Inc., fka Maguire Properties Inc. --
http://www.mpgoffice.com/-- is the largest owner and operator of
Class A office properties in the Los Angeles central business
district and is primarily focused on owning and operating high-
quality office properties in the Southern California market. MPG
Office Trust is a full-service real estate company with
substantial in-house expertise and resources in property
management, marketing, leasing, acquisitions, development and
financing.
The Company has been focused on reducing debt, eliminating
repayment and debt service guarantees, extending debt maturities
and disposing of properties with negative cash flow. The first
phase of the Company's restructuring efforts is substantially
complete and resulted in the resolution of 18 assets, relieving
the Company of approximately $2.0 billion of debt obligations and
potential guaranties of approximately $150 million.
The Company reported net income of $98.22 million in 2011,
compared with a net loss of $197.93 million in 2010.
NATIONAL HOLDINGS: Has Agreement to Pay $3MM Note on Jan. 31
------------------------------------------------------------
National Holdings Corporation entered into a letter agreement with
National Securities Growth Partners, LLC, St. Cloud Capital
Partners II, LP, to provide for a 195-day extension of payment on
a $3,000,000 Senior Subordinated Convertible Promissory Note that
was due on June 30, 2012. Pursuant to the Agreement, the Note
will become due on Jan. 31, 2013.
St. Cloud will receive from the Company a $1.2 million payment on
the Note, and the Company will grant St. Cloud, among other
things, a general security interest in certain assets of the
Company. The Company will receive a $2,000,000 investment, a
portion of which will be used to pay St. Cloud and the remainder
will be used for working capital purposes. In addition, NSGP
agreed to extend the term of its 6% subordinated convertible
promissory note so that the variance of the maturity date with
that of the Note is always six months.
The Company, St. Cloud and NSGP intend to memorialize the terms of
the Agreement by amending the Note and entering into a security
agreement.
In connection with the Agreement, Leonard J. Sokolow resigned as
President of the Company effective July 17, 2012. He remains a
member of the Board of Directors and the Company intends to enter
into a consulting agreement with Mr. Sokolow.
About National Holdings
New York, N.Y.-based National Holdings Corporation is a financial
services organization, operating primarily through its wholly
owned subsidiaries, National Securities Corporation, Finance
Investments, Inc., and EquityStation, Inc. The Broker-Dealer
Subsidiaries conduct a national securities brokerage business
through their main offices in New York, New York, Boca Raton,
Florida, and Seattle, Washington.
The Company had a net loss of $4.7 million on $126.5 million
of total revenues for fiscal year ended Sept. 30, 2011, compared
with a net loss of $6.6 million on $111.0 million on total
revenues for fiscal 2010.
The Company's balance sheet at March 31, 2012, showed $18.21
million in total assets, $22 million in total liabilities, $15,000
in non-controlling interest, and a $3.80 million stockholders'
deficit.
In its auditors' report accompanying the consolidated financial
statements for the year ended Sept. 30, 2011, Sherb & Co., LLP, in
Boca Raton, Florida, expressed substantial doubt about National
Holdings' ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant losses
and has a working capital deficit as of Sept. 30, 2011.
Bankruptcy Warning
The Company said its quarterly report for the period ended
March 31, 2012, that its future is dependent on its ability to
sustain profitability and obtain additional financing. If the
Company fails to do so for any reason, it would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code.
NAVISTAR INT'L: Icahn Equity Stake Slightly Up to 14.5%
-------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Carl C. Icahn and his affiliates disclosed
that, as of July 24, 2012, they beneficially own 9,964,599 shares
of common stock of Navistar International Corporation representing
14.54% of the shares outstanding.
Mr. Icahn previously reported beneficial ownership of 9,038,814
common shares or a 13.19% equity stake as of July 11, 2012.
A copy of the amended filing is available for free at:
http://is.gd/RfCewk
About Navistar International
Navistar International Corporation (NYSE: NAV) --
http://www.Navistar.com/-- is a holding company whose
subsidiaries and affiliates subsidiaries produce International(R)
brand commercial and military trucks, MaxxForce(R) brand diesel
engines, IC Bus(TM) brand school and commercial buses, Monaco RV
brands of recreational vehicles, and Workhorse(R) brand chassis
for motor homes and step vans. It also is a private-label
designer and manufacturer of diesel engines for the pickup truck,
van and SUV markets. The company also provides truck and diesel
engine parts and service. Another affiliate offers financing
services.
The Company's balance sheet at Jan. 31, 2012, showed
$11.50 billion in total assets, $11.69 billion in total
liabilities, and a $195 million total stockholders' deficit.
* * *
Navistar has 'B1' Corporate Family Rating and Probability of
Default Rating from Moody's Investors Service.
Moody's said in summary credit opinion at the end of April 2012
that the B1 Corporate Family Rating of Navistar International
reflects the company's highly competitive position in the North
American medium and heavy duty truck markets, and the continuing
recovery in demand. It also reflects the progress Navistar
continues to make in implementing a strategy that should reduce
its vulnerability to cyclical downturns and strengthen returns.
The key elements of this strategy include: expanding its scale and
operating efficiencies by offering a full line of medium and
heavy-duty trucks equipped with Navistar engines; building its
position in international truck and engine markets through
alliance and joint ventures; and, strengthening its domestic
dealer network.
As reported by the TCR on June 13, 2012, Standard & Poor's Ratings
Services lowered its ratings on Navistar International Corp.,
including the corporate credit rating to 'B+', from 'BB-'. "The
downgrade and CreditWatch placement reflect the company's
operational and financial setbacks in recent months," said
Standard & Poor's credit analyst Sol Samson.
NATIONAL LITHO: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: National Litho, LLC
13930 NW 60th Avenue
Hialeah, FL 33014
Tel: (305) 557-4782
Bankruptcy Case No.: 12-27566
Chapter 11 Petition Date: July 22, 2012
Court: U.S. Bankruptcy Court
Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: Luis Salazar, Esq.
SALAZAR JACKSON, LLP
2 S. Biscayne Boulevard, #3760
Miami, FL 33131
Tel: (305) 374-4848
Fax: (305) 397-1021
E-mail: salazar@salazarjackson.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
is available for free at http://bankrupt.com/misc/flsb12-27566.pdf
The petition was signed by Carlos Valdes, chief executive officer.
NC MUTUAL: A.M. Best Affirms 'C++' Financial Strength Rating
------------------------------------------------------------
A.M. Best Co. has revised the issuer credit rating (ICR) outlook
to positive from stable and affirmed the financial strength rating
(FSR) of C++ (Marginal) and ICR of "b" of North Carolina Mutual
Life Insurance Company (NC Mutual) (Durham, NC). The outlook for
the FSR is stable.
The positive outlook on the ICR reflects A.M. Best's belief that
NC Mutual will be able to reverse recent declines in its reported
surplus in the near to medium term. Although profitable, surplus
levels declined in 2011 and through the first quarter of 2012 on a
statutory basis. However, the company has a number of fee-based
initiatives, which are expected to add to reported income in 2012
and 2013. In addition, capital planning measures are expected to
increase reported surplus by year-end 2012. Risk-adjusted capital
measures also have improved, despite the declines in absolute
capital.
Offsetting rating factors include NC Mutual's modest absolute
capital levels as reflected in its low surplus position relative
to insurance liabilities, some asset concentrations in its
investment portfolio and a continuing trend of declining premium
volume and losses in its group life insurance segment.
Positive rating actions may occur if NC Mutual is able to
meaningfully expand its capital base, continue to generate
positive statutory operating results and build on its plans to
generate increased revenue. Negative rating actions may occur if
the company's capital levels continue to decline, material
investment impairments occur or operating losses re-emerge.
NEOGENIX ONCOLOGY: Case Summary & Unsecured Creditor
----------------------------------------------------
Debtor: Neogenix Oncology, Inc.
fka Neogenix Oncology, Corp.
9700 Great Seneca Highway, Suite 321
Rockville, MD 20850
Bankruptcy Case No.: 12-23557
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
District of Maryland (Greenbelt)
About the Debtor: Founded in December 2003, Neogenix is a clinical
stage, pre-revenue generating, biotechnology
company focused on developing therapeutic and
diagnostic products for the early detection and
treatment of cancer. Neogenix, which has 10
employees, says it its approach and portfolio of
three unique monoclonal antibody therapeutics --
mAb -- hold the potential for novel and targeted
therapeutics and diagnostics for the treatment
of a broad range of tumor malignancies.
At Dec. 31, 2011 and 2010, Neogenix had a net
operating loss carryforward of approximately
$49,353,000 and $38,405,000, respectively, for
federal income tax purposes.
The Debtor has a plan to sell the assets to
Precision Biologics Inc., absent higher and
better offers.
Debtor's Counsel: Thomas J. McKee, Jr., Esq.
GREENBERG TRAURIG, LLP
1750 Tysons Boulevard, Suite 1200
McLean, VA 22102
Tel: (703) 749-1348
Fax: (703) 814-8352
E-mail: mckeet@gtlaw.com
Debtor's
Financial
Advisor: PIPPER JAFFRAY & CO.
Debtor's
Claims Agent: KURTZMAN CARSON CONSULTANTS LLC
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $1,000,001 to $10,000,000
The petition was signed by Philip M. Arlen, M.D., president and
chief executive officer.
Debtor's List of Its Largest Unsecured Creditors Contains Only One
Entry:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Daniel J. Scher Alleged Damages Undetermined
c/o Thomas J. Luz
KLG LUZ & GREENBERG, LLP
370 Lexington Avenue, 24th Floor
New York, NY 10017
NEW LEAF: Appoints Terry Kinder to Board of Directors
-----------------------------------------------------
Terry L. Kinder was appointed to New Leaf Brands, Inc.'s Board of
Directors. Mr. Kinder is in private practice as Terry L. Kinder,
CPA, in Charleston, SC where he has practiced since 2008. From
2006-2008 he was the Managing Director of East Bay Partners, LLC,
a management consulting firm based in Charleston, SC. From 2005
to 2006, Mr. Kinder was Chairman of Sequence Holdings, LLC, an
investment banking firm. From 2001 to 2004, Mr. Kinder was
President and CEO of Giant Cement Holding, Inc., when it was
privately held and was its CFO from 1994 to 2001 once it was
publicly-held. He received his Bachelor of Science in Business
Administration from the University of South Carolina. Mr. Kinder
is a Certified Public Accountant and will chair the Company's
Audit Committee.
David Fuselier, Chairmand and CEO of New Leaf commented "I'm very
excited that Terry has accepted New Leaf's offer to join our Board
of Directors. Without question he has the depth and breadth of
public company experience, both as an accountant and an executive,
to provide strategic guidance as we execute our intermediate and
long term plans."
About New Leaf Brands
Old Tappan, New Jersey-based New Leaf Brands, Inc., develops,
markets and distributes healthy and functional ready-to-drink
("RTD") beverages. The Company distributes its products through
independent distributors both internationally and domestically.
For the nine months ended Sept. 30, 2011, the Company reported a
net loss of $4.82 million on $1.47 million of net sales, compared
with a net loss of $7.18 million on $3.67 million of net sales for
the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $3.03
million in total assets, $5.83 million in total liabilities and a
$2.80 million total stockholders' deficit.
As reported by the TCR on June 2, 2011, Eisner Amper LLP, in New
York, N.Y., expressed substantial doubt about the Company's
ability to continue as a going concern, following the Company's
results for the fiscal year ended Dec. 31, 2010. The independent
auditors noted that the Company has suffered recurring losses from
operations, has a working capital deficiency, was not in
compliance with certain financial covenants related to debt
agreements, and has a significant amount of debt maturing in 2011.
NEXSTAR BROADCASTING: Signs Asset Purchase Agreement with Newport
-----------------------------------------------------------------
Nexstar Broadcasting Group, Inc.'s subsidiary, Nexstar
Broadcasting, Inc., entered into an asset purchase agreement,
dated as of July 18, 2012, with Newport Television LLC, and
Newport Television License LLC. Pursuant to the Nexstar Asset
Purchase Agreement, Sellers have agreed to sell, and Nexstar has
agreed to purchase, certain assets for $225.5 million. The
purchased assets at closing will include substantially all of the
assets used or held for use in the operation of ten television
stations and Newport's Inergize Digital media operations. The
transaction is expected to close no earlier than December 2012,
subject to closing conditions, including without limitation
approval of the Federal Communications Commission and expiration
or termination of any waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended or other applicable
anti-trust laws. There can be no assurance when the closing
conditions will be satisfied, if at all. A deposit of $22.6
million was made upon signing the Nexstar Asset Purchase
Agreement. Nexstar expects to finance the purchase price through
cash on hand and new bank loans, having receiving commitments to
finance the acquisition with new $645 million Senior Secured
Credit Facilities comprised of a $570 million Term Loan B due 2019
and a $75 million Revolving Credit Facility due December 2017.
The Nexstar Asset Purchase Agreement includes other customary
provisions, including representations and warranties, covenants
and indemnification provisions.
On July 18, 2012, Mission Broadcasting, Inc., entered into an
asset purchase agreement, dated as of July 18, 2012, with Sellers.
Pursuant to the Mission Asset Purchase Agreement, Sellers have
agreed to sell, and Mission has agreed to purchase, all of the
"purchased assets" as defined in the Mission Asset Purchase
Agreement for $60.0 million. The purchased assets at closing will
include substantially all of the assets used or held for use in
the operation of two television stations in Little Rock, Arkansas.
The transaction is expected to close no earlier than December
2012, subject to closing conditions, including without limitation
approval of the FCC, the expiration or termination of any waiting
periods under the HSR Act or other applicable anti-trust laws, and
the simultaneous consummation of the Nexstar Asset Purchase
Agreement. There can be no assurance when the closing conditions
will be satisfied, if at all. A deposit of $6.0 million was made
upon signing the Mission Asset Purchase Agreement. Mission
expects to finance the purchase price through cash on hand along
with new bank loans, being party to the Commitments received by
Nexstar. The Mission Asset Purchase Agreement includes other
customary provisions, including representations and warranties,
covenants and indemnification provisions.
A copy of the Newport APA is available for free at:
http://is.gd/CD32tv
A copy of the Mission APA is available for free at:
http://is.gd/63g6nq
About Nexstar Broadcasting Group
Irving, Texas-based Nexstar Broadcasting Group Inc. currently
owns, operates, programs or provides sales and other services to
62 television stations in 34 markets in the states of Illinois,
Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania,
Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and
Florida. Nexstar's television station group includes affiliates
of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches
approximately 13 million viewers or approximately 11.5% of all
U.S. television households.
The Company reported a net loss of $11.89 million in 2011, a net
loss of $1.81 million in 2010, and a net loss of $12.61 million
in 2009.
The Company's balance sheet at March 31, 2012, showed $578.20
million in total assets, $758.09 million in total liabilities and,
a $179.89 million total stockholders' deficit.
* * *
As reported by the Troubled Company Reporter on Aug. 30, 2010,
Standard & Poor's Ratings Services raised its corporate credit
rating on Nexstar Broadcasting Group to 'B' from 'B-'. The rating
outlook is stable.
"The 'B' corporate credit rating reflects S&P's expectation that
Nexstar's core ad revenue will continue growing modestly in 2010
and 2011," said Standard & Poor's credit analyst Deborah Kinzer.
The EBITDA growth resulting from the rebound in core advertising,
combined with political ad revenue from the 2010 midterm
elections, should, in S&P's view, enable Nexstar to reduce its
leverage significantly by the end of the year.
NORTHAMPTON GENERATING: Aug. 14 Hearing on Exclusivity Extension
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina will convene a hearing on Aug. 14, 2012, at 9:30 a.m., to
consider Northampton Generating Company, L.P.'s third request to
extend its exclusive periods.
The Debtor is requesting that the Court extend its exclusive
periods to file and solicit acceptances for the proposed chapter
11 plan until Sept. 14, and Nov. 13, respectively.
The Debtor related that it continues to analyze its options with
regards to a plan of reorganization. The Debtor has performed its
duties under the Bankruptcy Code attentively and in good faith and
worked to ensure that all provisions of the Bankruptcy Code have
been properly complied with.
About Northampton Generating
Northampton Generating Co. LP is the owner of a 112 megawatt
electric generating plant in Northampton, Pennsylvania. The plant
is fueled with waste products, including waste coal, fiber waste,
and tires. The power is sold under a long-term agreement to an
affiliate of FirstEnergy Corp.
Northampton Generating filed for Chapter 11 bankruptcy (Bankr.
W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree,
Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC,
in Charlotte, N.C., serve as counsel to the Debtors. Houlihan
Lokey Capital, Inc., is the financial advisor.
The Debtor estimated assets and debts of up to $500 million. Debt
includes $73.4 million owing on senior bonds issued through the
Pennsylvania Economic Development Financing Authority.
No request for the appointment of a trustee or examiner has been
made, and no statutory committee or trustee has been appointed in
this case.
NORTHSTAR AEROSPACE: Wins Approval of Assets Sale
-------------------------------------------------
At the July 24, 2012 Sale Hearing, the U.S. Bankruptcy Court for
the District of Delaware entered its order approving the sale of
substantially all of the assets of Nortstar Aerospace (USA) Inc.,
et al., to Heligear Acquisition Co. or its designee for the US
Purchased Assets, and Heligear Canada Acquisition Corporation for
the Canadian Purchased Assets.
The consideration provided by the US Purchaser was the highest and
best offer for the US Purchased Assets.
On the Closing Date, the US Purchaser will pay to Fifth Third Bank
as Agent all proceeds of the Sale in accordance with the Final DIP
Financing Order.
A copy of the July 24, 2012 sale order is available for free at:
http://bankrupt.com/misc/northstaraerospace.doc229.pdf
About Northstar Aerospace
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.
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.
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.
OTOLOGICS, L.L.C.: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Otologics, L.L.C.
5445 Airport Boulevard
Boulder, CO 80301
Tel: (303) 448-9983
Bankruptcy Case No.: 12-47045
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
Eastern District of Missouri (St. Louis)
Judge: Charles E. Rendlen, III
About the Debtor: The Debtor was founded in 1996 to acquire
ceratin implantable hearing device technology
from Storz Instrument Co, and further develop
and test such technology for future commercial
marketability. The Debtor's first product, the
semi-implantable MET (middle ear implant) has
received the CE Mark and is currently being sold
in Europe. In October 2006, the Debtor
completed the European clinical trial for its
second product, the fully implantable CARINA
middle ear implant, and received the CE Mark,
authorizing European sales. In the United
States, the CARINA fully implantable device is
currently in Phase II clinical trials.
The Debtor and Cochlear Limited have already
executed an Asset Purchase Agreement where,
subject to Court approval and potential higher
and better bids, Cochlear will purchase the sale
assets for approximately $14.0 million payable
by a combination of credit bids and cash.
Debtor's Counsel: David A. Warfield, Esq.
THOMPSON COBURN LLP
One US Bank Plaza
St. Louis, MO 63101
Tel: (314) 552-6079
Fax: (314) 552-7000
E-mail: dwarfield@thompsoncoburn.com
Debtor's
Special Counsel: ROBERTS & OLIVIA LLP
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by Jose H. Bedoya, chief executive
officer.
Debtor's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
SA Neurelec Judgment $5,500,000
2729 Chemin St Bernard (On Appeal)
Cedex
Vallauris
6224
France
Gordon & Rees, LLP Legal Fees $1,086,582
275 Battery Street, 20th Floor
San Francisco, CA 94111
PricewaterhouseCoopers LLP Audit and Tax Services $97,190
P.O. Box 75647
Chicago, IL 60675-5647
Grant Thornton LLP Legal Fees $86,347
Polytec, Inc. Government Contract $61,844
Chase Card Services Credit Card $50,309
United Health Care Insurance $42,795
TUV America Trade Debt $41,989
W.L. Gore and Associates Trade Debt $40,738
AP One LLC Rent $40,393
Hale & Westfall LLP Legal Fees $38,118
Pacific Aerospace & Electronics, Trade Debt $35,482
Inc.
Brophy Clauss LLC Legal Fees $26,489
Microdul Trade Debt $26,162
Marsh Fischmann & Breyfogle, L Legal Fees $25,769
Krista Traynor Clinical $23,100
Professor Rahul Sarpeshkar Legal Fees $21,172
MultiSource Manufacturing LLC Trade Debt $18,899
Roberts & Olivia LLC Legal Fees $18,288
Xerox Capital Services, LLC. Copier $17,543
PATIENT SAFETY: Five Directors Elected at Annual Meeting
--------------------------------------------------------
Patient Safety Technologies Inc. held its annual meeting of
stockholders on July 18, 2012. The stockholders elected five
directors to serve until the Company's 2013 annual meeting,
namely: (1) John P. Francis, (2) Wenchen Lin, (3)
Wenchen Lin, (4) Louis Glazer, M.D., Ph.G., and (5) Lynne
Silverstein.
In addition, the stockholders:
-- ratified the appointment of Squar, Milner, Peterson, Miranda
& Williamson, L.L.P., as the Company's independent
registered public accounting firm for the fiscal year ending
Dec. 31, 2012;
-- approved an amendment to the Company's Amended and Restated
Certificate of Incorporation to change the par value of the
Company's common stock from $0.33 to $0.0001;
-- approved an amendment to the Company's Amended and Restated
Certificate of Incorporation to effect a reverse stock split
of the Company's common stock; and
-- approved an amendment to the Patient Safety Technologies,
Inc. 2009 Stock Option Plan to increase the number of shares
issuable under the Plan from 3,000,000 to 4,500,000 and to
clarify the non-discretionary nature of the share limit on
annual grants.
About Patient Safety Technologies
Patient Safety Technologies, Inc. (OTC: PSTX) --
http://www.surgicountmedical.com/-- through its wholly owned
operating subsidiary SurgiCount Medical, Inc., provides the
Safety-Sponge(TM) System, a system designed to improve the
standard of patient care and reduce health care costs by
preventing the occurrence of surgical sponges and other retained
foreign objects from being left inside patients after surgery.
RFOs are among one of the most common surgical errors.
The Company's balance sheet at March 31, 2012, showed
$13.99 million in total assets, $5.09 million in total
liabilities, all current, and $8.90 million in total stockholders'
equity.
Patient Safety reported a net loss of $1.89 million in 2011,
compared with net income of $2 million during the prior year.
PENINSULA GAMING: S&P Gives 'B+' Prelim Rating on $825MM Term Loan
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary issue-
level and recovery ratings to Peninsula's proposed new $875
million credit facilities, consisting of a $50 million priority
revolving credit facility and an $825 million term loan, both due
in 2017.
"We assigned the revolver our preliminary issue-level rating of
'BB-' (two notches higher than our expected 'B' corporate credit
rating on Peninsula following the close of the acquisition) and
our preliminary recovery rating of '1', indicating our expectation
of very high (90% to 100%) recovery for lenders in the event of a
payment default. We assigned the term loan our preliminary issue-
level rating of 'B+' (one notch higher than our expected 'B'
corporate credit rating on Peninsula) and a preliminary recovery
rating of '2', indicating our expectation of substantial (70% to
90%) recovery for lenders in the event of a default," S&P said.
"The proceeds from the new senior secured credit facilities
represent a portion of the financing for Boyd's $1.45 billion
acquisition of Peninsula. In addition to the senior secured credit
facility, financing will include a $200 million cash contribution
from Boyd, about $144 million in a seller's note, and $350 million
of senior unsecured notes at Peninsula," S&P said.
"The CreditWatch listing on Peninsula reflects our expectation
that in the event that Boyd completes its acquisition of the
company under the terms proposed, consolidated leverage would
exceed 7 times over the intermediate term under our performance
expectations for both companies," said Standard & Poor's credit
analyst Melissa Long.
"Additionally, the contemplated financing at Peninsula is a
leveraging transaction at that entity, given that its current debt
balances were about $700 million as of March 31, 2012. (We include
the planned seller's note when measuring leverage.) Although we
believe the acquisition of Peninsula would strengthen Boyd's
business risk profile, as Peninsula's assets face limited
competition, have high EBITDA margins compared with other
commercial gaming operators, and are relatively good quality
assets, we would view this level of leverage as aligned with a 'B'
corporate credit rating. The transaction remains subject to
various closing conditions and receipt of required regulatory
approvals, and Boyd expects the transaction to close by the end of
2012," S&P said.
"Following the acquisition, our corporate credit rating on
Peninsula will reflect our view of the consolidated Boyd and
Peninsula portfolio of properties, despite the fact that different
assets secure different pieces of the capital structure. Given our
perception of the strategic relationships that will exist between
these entities and common management following the acquisition, we
expect management to make decisions regarding operating and
financial strategies with a view toward the collective group of
companies. We believe that if a payment default were to occur at
either Boyd or Peninsula, management would most likely consider
alternatives regarding the capital structure of the consolidated
group, which could include a comprehensive restructuring or a
bankruptcy filing," S&P said.
"In resolving the CreditWatch listing, we will monitor Boyd's
progress toward addressing various closing conditions and
receiving required regulatory approvals. We expect to lower our
corporate credit rating on Peninsula to 'B' once the acquisition
closes," S&P said.
PILOT TRAVEL: S&P Lowers Corp. Credit Rating to 'BB'
----------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Pilot Travel Centers LLC to 'BB' from 'BB+'. The outlook
is stable.
"We lowered the issue-level rating on the company's existing
secured credit facilities to 'BB' from 'BBB-' and revised the
recovery rating on that debt to '3' from '2' because of additional
debt in the capital structure that decreases recovery prospects
for lenders. The company plans to increase the existing revolver
and term loan A by $100 million and $300 million," S&P said.
"In addition, we assigned our 'BB' issue-level rating and '3'
recovery rating to the company's proposed new $700 million term
loan B. According to the company, it plans to use the proceeds to
pay a dividend and to partially finance the acquisition of a 65%
interest in Maxum Petroleum Inc.," S&P said.
"Finally, we placed our 'B' corporate credit rating on Maxum on
CreditWatch with positive implications following Pilot's
announcement that it intends to acquire 65% of Maxum Petroleum
Operating Co. Maxum's corporate credit rating could be equated to
that of Pilot's but the degree of uplift will depend on our view
of Maxum's strategic importance to Pilot, which we will assess as
more details of the transaction emerge," S&P said.
Rationale
"The ratings on Pilot reflect Standard & Poor's assessment that
the company's business risk as 'fair' and its financial risk as
'significant.' Our assessment of its business risk is supported by
its exposure to fuel cost swings, broad geographic footprint and
good brand-name recognition in the highly fragmented travel center
industry, and good real estate ownership that enables it to
operate at a lower cost than most of its peers and offer
competitive pricing on fuel. We also think that high barriers to
entry, which include zoning restrictions that support its good
market position, and consistent merchandise margins help support
performance metrics. Pilot's cost structure has improved
meaningfully from expense reduction initiatives, and profit levels
should be sustainable," S&P said.
"Performance for the last 12 months was above our expectations as
the company benefited from overall higher fuel margins and
benefits from cost-saving initiatives. Pro forma for the
transactions, we estimate that debt to EBITDA and funds from
operations (FFO) to debt would be 3.9x and 17%, respectively.
Looking ahead for the next year, we think EBITDA will grow on
positive performance in the fuel and merchandising operations. We
forecast leverage declining to slightly under 3.5x and FFO to debt
increasing to about 21%. We think these credit metrics are good
for the ratings, but a possible upgrade could be limited by the
potential for more sizable debt-financed shareholder initiatives,"
S&P said.
S&P's assumptions for Pilot over the 12 months include:
- S&P is raising its estimates for fuel margins this year, from
about 12.5 cents to 13 cents on improving economic conditions
and business growth that will likely drive up demand.
- Merchandise same-store sales growth in the mid-single-digit
area and a modest improvement in margins to about 33.5%.
- S&P anticipates the company will pay dividends to shareholders
for them to fund their tax liability given the LLC status of
Pilot with modest amounts for discretionary purposes.
- S&P consolidates Maxum's financials because of Pilot's
significant ownership and its ability to influence Maxum's
operations.
"We view its financial risk profile as significant because its
owners' influence could impede credit quality, despite good cash
flows and 'adequate' liquidity. We reassessed its financial policy
as 'very aggressive' from aggressive because the proposed
transaction represents the second, sizable debt-funded dividend
within the past 18 months. Still, we expect the company to
continue to generate good levels of free cash flows, which we
anticipate it would use for capital spending and debt
amortization," S&P said.
Liquidity
Based on its criteria, S&P expects Pilot to have adequate
liquidity over the next 12 months. Key aspects of the company's
liquidity profile include:
- Sources of liquidity will exceed cash uses by 1.2x or more.
- Sources would continue to exceed uses, even if EBITDA were to
decline 15%.
- Compliance with financial covenants will likely survive a 15%
drop in EBITDA without the company breaching covenant tests;
financial covenants include a maximum leverage ratio and a
minimum interest coverage ratio.
- Debt amortization is manageable given S&P's cash flow
assumptions.
"In conjunction with the proposed transactions, Pilot also plans
to increase the size of its revolving credit by $100 million to
$900 million, which would augment liquidity in our view. We
estimate free cash flows of about $200 million in 2012 after
capital spending of about $400 million, a portion of which it
would use for debt repayment under the terms of the credit
facilities," S&P said.
Outlook
"Our stable outlook reflects the expectation that credit metrics
will improve modestly this year through performance gains, but the
company's financial risk profile will remain significant. With our
forecast for EBITDA growth and debt reduction, we see leverage
improving to slightly under 3.5x, FFO to debt of 21%, and interest
coverage of over 8x," S&P said.
"We could lower the ratings if the company institutes additional
debt-financed shareholder initiatives, which would strain credit
protection measures, or if fuel margins declined to about 10 cents
and merchandise margins drops to about 25% due to increased
competitive pressures and the inability to pass on cost increases.
Under this scenario, leverage would increase to over 4x and FFO to
debt would decline below 15% and we would likely reassess
financial risk as aggressive," S&P said.
"We view the potential for an upgrade as unlikely given the
company's very aggressive financial policies. The potential for an
upgrade would be predicated on meaningful moderation of financial
policies and the company achieving greater-than-anticipated
earnings improvement and debt reduction. In this scenario, the
company would maintain leverage around 3x and FFO/debt above 25%,"
S&P said.
Ratings List
Downgraded
To From
Pilot Travel Centers LLC
Corporate Credit Rating BB/Stable/-- BB+/Stable/--
Ratings Placed On CreditWatch
To From
Maxum Petroleum Operating Co.
Corporate Credit Rating B/Watch Pos/-- B/Stable/--
New Ratings
Pilot Travel Centers LLC
Senior Secured
US$700MM incremental term B bank BB
ln due 2019 Recovery Rating 3
Downgraded; Recovery Rating Revised
To From
Pilot Travel Centers LLC
Senior Secured BB BBB-
PLYMOUTH OIL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Plymouth Oil Company, LLC
22058 K-42
Merrill, IA 51038
Bankruptcy Case No.: 12-01403
Chapter 11 Petition Date: July 23, 2012
Court: U. S. Bankruptcy Court
Northern District of Iowa (Sioux City)
Judge: Thad J. Collins
Debtor's Counsel: Bradley R. Kruse, Esq.
BROWN WINICK GRAVES GROSS BASKERVILLE &
SCHOENEBAUM, P.L.C.
666 Grand Avenue, Suite 2000
Des Moines, IA 50309-2510
Tel: (515) 242-2460
Fax: (515) 323-8560
E-mail: brk@brownwinick.com
Estimated Assets: $10,000,001 to $50,000,000
Estimated Debts: $10,000,001 to $50,000,000
The petition was signed by David P. Hoffman, president.
Debtor's List of Its 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Iowa Corn Processors LC -- $486,398
20481 Sycamore Avenue
Glidden, IA 51443
Plymouth Energy Co LLC -- $433,843
22234 K-42
Merrill, IA 51038
Interstates Construction Services -- $78,777
Inc.
1520 N. Main Avenue
Sioux Center, IA 51250
Interstates Instrumentation Inc. -- $58,613
Plendl Feed Service Inc. -- $44,966
AMG Inc. -- $36,428
Port Neal Welding Co Inc. -- $35,633
Plymouth Feed Co. -- $29,673
Husch Blackwell Sanders LLP -- $27,369
Bacon Creek Construction & -- $23,118
Design Inc.
Sys-Kool LLC -- $13,166
Pneumat Systems Inc. -- $11,857
Scooter's Natural Meats LLC -- $8,254
Stan Houston -- $7,782
Western Iowa Construction Inc. -- $7,635
Langel's Electric Co. -- $7,483
Brick Gentry PC -- $2,927
Peerless Energy Systems -- $2,555
Total Truck Care Inc. -- $2,476
ECCI -- $1,881
POLLACK ACADEMIC: S&P Cuts Rating on Series 2010 Bond to 'BB'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term rating to
'BB' from 'BB+' on the Michigan Public Educational Facilities
Authority's series 2010 limited-obligation revenue bonds issued
for Dr. Joseph F. Pollack Academic Center of Excellence (PACE),
Mich. The outlook is stable.
"The rating action reflects our view of financial metrics that are
commensurate with a 'BB' rating despite an improvement in
operating performance in fiscal 2011 and fiscal 2012 to date,"
said Standard & Poor's credit analyst Avanti Paul.
"PACE is a kindergarten through eighth-grade (K-8) large charter
school in Southfield, Mich. The $8.4 million fixed-rate series
2010 bonds are the school's only debt. A pledge on the state aid
and a mortgage on the school's current facility secures the bonds.
Debt payments are made from 20% of the monthly school state aid
payments, deposited directly into the debt service fund," S&P
said.
POSITIVEID CORP: Ironridge to Resell 34 Million Common Shares
-------------------------------------------------------------
PositiveID Corporation filed with the U.S. Securities and Exchange
Commission a Form S-1 relating to the resale of up to 34,000,000
shares of the Company's common stock by Ironridge Technology Co.,
a division of Ironridge Global IV, Ltd., pursuant to a Stock
Purchase Agreement entered into between us and Ironridge dated
July 12, 2012. The total amount of shares of common stock which
may be sold pursuant to this prospectus would constitute
approximately 25% of the Company's issued and outstanding common
stock as of July 19, 2012.
The number of shares Ironridge is able to beneficially own at any
given time is limited to 9.99% of the Company's total common stock
then outstanding. The Stock Purchase Agreement also provides for
a commitment fee to Ironridge of 3,000,000 shares of the Company's
common stock, or the Commitment Fee Shares.
The Company's common stock is quoted on the OTC Bulletin Board
under the symbol "PSID.OB." On July 19, 2012, the closing sale
price of the Company's common stock was $0.02 per share.
A copy of the Form S-1 prospectus is available for free at:
http://is.gd/K92lJt
About PositiveID
Delray Beach, Fla.-based PositiveID Corporation (OTC BB: PSID) is
a technology development company with two divisions: HealthID and
MicroFluidic Systems. HealthID develops unique medical devices,
focused primarily on diabetes management, and MicroFluidic Systems
develops molecular diagnostic systems, focused primarily on bio-
threat detection products.
The Company's balance sheet at March 31, 2012, showed
$2.99 million in total assets, $4.17 million in total liabilities,
and a $1.18 million total stockholders' deficit.
"The Company's ability to continue as a going concern is dependent
upon its ability to obtain financing to fund the continued
development of its HealthID products, the operations of
MicroFluidic, and working capital requirements. Until the Company
is able to achieve operating profits, it will continue to seek to
access the capital markets," the filing said.
On Aug. 31, 2011, the Company received notification that its stock
was being delisted from the Nasdaq Capital Market and on Sept. 1,
2011, the Company's stock began trading on the OTC Bulletin Board.
The delisting from Nasdaq could adversely affect the market
liquidity of the Company's common stock and harm the business and
may hinder or delay the Company's ability to consummate potential
strategic transactions or investments. That delisting could also
adversely affect the Company's ability to obtain financing for the
continuation of its operations and could result in the loss of
confidence by investors, suppliers and employees.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
POSITIVEID CORP: To Issue Add'l 19-Mil. Shares Under 2011 Plan
--------------------------------------------------------------
PositiveID Corporation filed with the U.S. Securities and Exchange
Commission a Form S-8 registering 19 million shares of common
stock issuable under the Company's 2011 Stock Incentive Plan, as
Amended. The proposed maximum offering price is $380,000. A copy
of the prospectus is available at http://is.gd/RVWhJf
About PositiveID
Delray Beach, Fla.-based PositiveID Corporation (OTC BB: PSID) is
a technology development company with two divisions: HealthID and
MicroFluidic Systems. HealthID develops unique medical devices,
focused primarily on diabetes management, and MicroFluidic Systems
develops molecular diagnostic systems, focused primarily on bio-
threat detection products.
The Company's balance sheet at March 31, 2012, showed
$2.99 million in total assets, $4.17 million in total liabilities,
and a $1.18 million total stockholders' deficit.
"The Company's ability to continue as a going concern is dependent
upon its ability to obtain financing to fund the continued
development of its HealthID products, the operations of
MicroFluidic, and working capital requirements. Until the Company
is able to achieve operating profits, it will continue to seek to
access the capital markets," the filing said.
On Aug. 31, 2011, the Company received notification that its stock
was being delisted from the Nasdaq Capital Market and on Sept. 1,
2011, the Company's stock began trading on the OTC Bulletin Board.
The delisting from Nasdaq could adversely affect the market
liquidity of the Company's common stock and harm the business and
may hinder or delay the Company's ability to consummate potential
strategic transactions or investments. That delisting could also
adversely affect the Company's ability to obtain financing for the
continuation of its operations and could result in the loss of
confidence by investors, suppliers and employees.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
PRIUM SPOKANE: U.S. Trustee Withdraws Plea to Oust Management
-------------------------------------------------------------
Robert D. Miller Jr., the U.S. Trustee for Region 18, notified the
U.S. Bankruptcy Court for the Eastern District of Washington that
it is withdrawing his motion to appoint a Chapter 11 trustee for
Prium Spokane Buildings, LLC.
The trustee, in its motion alleged the Debtor's management has a
conflict of interest when it comes to managing the Debtor's
business affairs and it is unrealistic to expect their future
management of the Debtor's business to be in the best interests of
the creditors.
The U.S. Trustee explained that his decision to withdraw the
motion was in light of the amendment to the settlement agreement
between the Debtor and Sterling Savings Bank and the Court's
approval of that settlement agreement.
The Debtor asserted that while the actions sufficient to establish
a need for a trustee may be numerous, the movant must establish
the need for "a trustee by clear and convincing evidence."
About Prium Spokane Buildings
Bellevue, Washington-based Prium Spokane Buildings, L.L.C., filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Wash. Case No.
10-06952) on Dec. 16, 2010. Davidson Backman Medeiros PLLC,
represents the Debtor. Berreth, Lochmiller & Associates, PLLC,
serves as accountants. The Debtor disclosed $17,042,743 in assets
and $34,723,584 in liabilities as of the Chapter 11 filing.
There was no creditors committee appointed in the case.
RACKWISE INC: Kenneth Spiegeland Resigns from Board
---------------------------------------------------
Kenneth Spiegeland resigned as one of Rackwise, Inc.'s directors
effective July 18, 2012. His resignation was not the result of
any disagreement with the Company relating to its operations,
policies or procedures.
On July 18, 2012, the Company authorized an increase in the size
of the board to up to seven members and John Kyees and William
Andrew were appointed as new directors. On July 18, 2012, the
Company also restructured its existing board committees. The
Company's Audit Committee now consists of Michael Feinberg, J.
Sherman Henderson III and John Kyees. The Company's Compensation
Committee now consists of J. Sherman Henderson III (Chairman),
Edward F. Feighan and Michael Feinberg. The Company's Nomination
and Corporate Governance Committee now consists of Guy A. Archbold
(Chairman), Edward F. Feighan and William Andrew.
John Kyees retired from active business practice in 2010 but
continues to serve on the board of directors of 5 public companies
(Casual Male Retail Group, Vera Bradley, Teavana, Hot Topic and
Rackwise). Prior to retirement, he was Chief Financial Officer
for several companies including Urban Outfitters, bebe Stores,
Skinmarket, HC Holdings, Ashley Stewart, Limited's Express, Chas.
A. Stevens (division of Hartmarx), J.L. Hudson Co. (division of
Dayton Hudson which became Target), The Model A and Model T Motor
Car Reproduction Co., and Ford Motor Co.
William Andrew is a private investor and is a co-founder and life
member of the Andrew Family Foundation, a co-founder and president
of the AFC Public Foundation, President of Andrew Trust Company,
CEO of Werdna Corporation which is a family wealth management
organization, co-founder and chair emeritus of the Board of
Trustees of the Summit School of Ahwatukee, a general partner of
the private equity firm Inlign Capital Partners, a Limited Partner
of and current member of the Executive Committee of the Arizona
Diamondbacks, an ex-officio member of the Board of Directors of
Valley Youth Theatre, a Director of the Arizona Community
Foundation and a Trustee of Xavier College Preparatory. He has
served in board or management committee roles for many companies
including Knights Apparel, Inlign Wealth Management, Applied
Photonics, Whisper Creek Log Homes and Sound Surgical
Technologies. Dr. Andrew earned his M.S. and Ph.D. degrees in
electrical engineering from Arizona State University in 1990 and
1996, respectively. His research interests included imaging radar
systems and computational electromagnetics.
About Rackwise
Rackwise, Inc., is a software development, sales and marketing
company within the markets of IT infrastructure, data center
monitoring, management and optimization, data center cost
efficiency and green data centers. The Company's executive
offices are currently located in San Francisco, California, and
the Company has a software development and data center in the
Research Triangle Park in Raleigh, North Carolina. The Company is
in the process of relocating our executive offices to Folsom,
California and expanding its software development center.
The Company's balance sheet at March 31, 2012, showed
$1.06 million in total assets, $3.53 million in total liabilities,
and a stockholders' deficit of $2.47 million.
As reported in the TCR on April 9, 2012, Marcum LLP, in New York,
N.Y., expressed substantial doubt about Rackwise, Inc.'s ability
to continue as a going concern, following the Company's results
for the fiscal year ended Dec. 31, 2011. The independent auditors
noted that the Company has not achieved a sufficient level of
revenues to support its business and has suffered recurring losses
from operations.
RESIDENTIAL CAPITAL: U.S. Trustee Has Objections to Applications
----------------------------------------------------------------
Tracy Hope Davis, the U.S. Trustee for Region 2, filed in the
Chapter 11 case of Residential Capital LLC and its affiliates
objections the approval of the employment applications of these
professionals:
-- Morrison & Foerster LLP as bankruptcy counsel;
-- Centerview Partners LLC as investment banker;
-- Carpenter Lipps & Leland LLP as special litigation counsel;
-- Dorsey & Whitney LLP as special securitization and
investigatory counsel;
-- Orrick, Herrington & Sutcliff LLP as special securitization
transaction and litigation counsel;
-- Mercer (US) Inc. Inc. as compensation consultant;
-- Rubenstein Associates, Inc., as corporate communications
consultant;
-- FTI Consulting as financial advisor;
-- Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts
counsel;
-- Moelis & Company LLC as investment banker for the Official
Committee of Unsecured Creditors;
-- AlixPartners LLP as financial advisor; and
-- professionals utilized in the ordinary course of business.
The U.S. Trustee complained that:
-- Morrison & Foerster, Carpenter Lipps, Dorsey & Whitney, and
Orrick seek to perform services that may result in
duplication.
-- Morrison & Foerster, Centerview, Carpenter Lipps, Dorsey &
Whitney, Orrick, Mercer, Rubenstein, FTI, Moelis, and
AlixPartners do not disclose sufficient information to make
a determination of whether the Debtors' professionals are
disinterested and whether the Official Committee of
Unsecured Creditors' professionals hold an adverse
interest.
-- Morrison & Foerster, Carpenter Lipps, Dorsey & Whitney,
Orrick, Mercer, Rubenstein, Curtis, and FTI do not disclose
the amount of notice to be provided on hourly rate
increases.
-- Morrison & Foerster, Centerview, Carpenter Lipps, Dorsey &
Whitney, Orrick, Curtis, and FTI are not clear as to
whether the professionals seek to hold their respective
retainers until the conclusion of the case rather than
applying the balance of the retainers to the first interim
fee application.
-- Centerview, Mercer, Rubenstein, and Moelis seek to charge
the Debtors' estates for their legal fees (not in
connection with indemnification rights) as an expense of
the estates.
-- Mercer and Rubenstein, who will be compensated on an hourly
basis, seek to submit time records in quarter hour
increments in violation of the United States Trustee
Guidelines.
-- The Debtors' OCP Motion departs from the typical procedures
in cases of similar size and complexity.
Sidney and Yvonne D. Lewis served Morrison & Foerster with an
objection to the Debtors' proposed retention of Carpenter Lipps.
Debtors Reply, Professionals Supplement Declarations
The Debtors point out that the U.S. Trustee's Objection raises
only a few issues, most of which the Debtors believe have been
resolved. For example, the Debtors' proposed professionals have
all agreed to include in their respective retention orders
language requested by the UST regarding (i) hourly rate
increases, (ii) application of remaining pre-petition retainers
and (iii) indemnities. Also, the Debtors' professionals have
agreed to file supplemental disclosures as requested by the UST
regarding specific prepetition engagements and fees paid by the
Debtors to the professionals within the 90 days preceding the
Petition Date.
The remaining objections which have not been resolved are:
-- possible duplication among Morrison & Foerster, Carpenter
Lipps, Dorsey & Whitney and Orrick;
-- requests by Mercer, Rubinstein and Centerview for authority
to charge the estates for outside counsel fees incurred by
these professionals;
-- to the extent Rubenstein seeks to be reimbursed for
attorneys' fees it will only do so in connection with a
request for indemnification; and
-- requests by Mercer and Rubinstein to maintain time in
quarter hour increments rather than the tenth of an hour
increments required by the UST's guidelines.
The Debtors tell the Court that they have done their best to
identify clearly with their professionals the scope of matters to
be addressed by their professionals. Because many of these
services will be reactionary and dictated by the actions of third
parties in the Debtors' cases, the Debtors explain the
applications have been crafted in a manner intended to define the
scope of the professionals' tasks but provide necessary
flexibility. Certainly, to the extent that the proposed retention
of any of these particular firms would be expanded to include an
entirely new subject matter, the Debtors will file an application
seeking Court approval to amend the terms of that particular
professional's engagement. The Debtors add that it should also
be noted that each of these professionals understands that the
Court will not tolerate unnecessary duplication of efforts. Each
professional also understands that in filing applications for
payment of compensation and reimbursement of expenses, the UST,
the Committee, the Court and other parties-in-interest will
carefully scrutinize the services provided.
The Debtors relate that inclusion of the provision in the Mercer
engagement letter for the reimbursement of attorneys' fees is
typical of Mercer's agreements with clients, including those in
bankruptcy.
Rubenstein has revised the proposed order approving its retention
to include the UST's requested language as to its request for
indemnification.
Rubinstein has also agreed to comply with the UST's guidelines to
maintain time in tenth of an hour increments. Mercer has agreed
that it will not seek reimbursement for services that do not
equal at least a quarter of an hour.
The Debtors also pointed to related rulings In re Borders Group,
Inc., 456 B.R. 195 (Bankr. S.D.N.Y. 2011) and In re Borders,
Group, Inc., Case No. 11-10614 (MG) (Bankr. S.D.N.Y. Apr. 7,
2011) to support their employment applications.
The Lewis' oppose the Debtors' efforts to retain Carpenter Lipps
as special counsel. The Debtors argue that the Lewis Objection
is based on incorrect facts. Moreover, even if the facts as
alleged in the Lewis Objection were true, they would not serve as
a basis to deny the Debtors' application to retain Carpenter
Lipps. The Debtors explain that Carpenter Lipps was not retained
in connection with the commencement of the Ohio State Court
proceedings of which the Lewis' complain. Rather, Carpenter
Lipps was retained by the Debtors in connection with an appeal of
that underlying proceeding initiated by the Lewis'. Moreover,
the Debtors add, it should be noted that Mr. Lewis and Mrs. Lewis
have been declared by the Franklin Court of Common Pleas to be
"vexatious litigants" who must get leave of the Court in order to
file any request for relief or maintain any appeal within the
state courts of the State of Ohio. Thus, the Debtors ask the
Court to overrule the Lewis Objection to the Debtors' application
to retain the Carpenter Lipps firm.
The professionals, in their supplemental declarations, disclosed
that they received these payments from the Debtors in the 90 days
before the Petition Date:
Rubenstein $150,000 as advanced payment from Morrison
Morrison $3.5 million as retainer
Mercer $51,000 for prepetition services
Orrick $1.437 million for prepetition fees & expenses
Centerview $50,000 as expense retainer
FTI $7.241 prepetition payments & $1.35 retainer
The Official Committee of Unsecured Creditors reserves all of its
rights with respect to fee statements or fee applications to
ensure there is no duplication of services and that the fees are
reasonable costs and expenses of the estate.
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: Allstate Has Screening Wall for Trading
------------------------------------------------------------
Allstate Life Insurance Company, for itself and its affiliates, a
member of the Official Committee of Unsecured Creditors, sought
and obtained a court order approving information blocking
procedures and permitting trading Claims, subject to adherence to
so-called "Screening Wall".
The Court determined that Allstate will not violate its duties as
a Committee member and, accordingly, will not subject its claims
to possible disallowance, subordination, or other adverse
treatment, as a result of trading Claims or Securities during the
pendency of the Debtors' cases, provided that Allstate establishes
and effectively implements and strictly adheres to information
blocking procedures to prevent the misuse of any material non-
public information obtained as a result of Allstate's performance
of Committee-related activities.
"Screening Wall" refers to procedures established by an
organization to isolate its trading activities as a member of a
statutory creditors' committee. A Screening Wall typically
involves procedures inside the institution which both: (i) comply
with the requirements for insulating certain people from certain
material non-public information and (ii) function without
unnecessary disruption to the management and operation of the
organization.
Although members of the Committee owe fiduciary duties to the
creditors of the Debtors' estates, Allstate also has fiduciary
duties to maximize returns to its clients and shareholders
through trading securities. Thus, if Allstate is barred from
trading the Claims during the pendency of the Debtors' bankruptcy
cases because of its duties to other creditors, it may risk the
loss of a beneficial investment opportunity for itself and/or its
clients and, moreover, may breach its fiduciary duty to its
clients. Alternatively, if Allstate is compelled to resign from
the Committee because of its inability to trade for the benefit
of itself and its clients, its interests as a creditor of the
Debtors, as well as the interests of unsecured creditors in
having a broad-based committee of active, commercially
sophisticated creditors, may be compromised. Allstate should not
be forced to choose between serving on the Committee and risking
the loss of beneficial investment opportunities or forgoing
service on the Committee and possibly compromising its
responsibilities by taking a less active role in the
reorganization process, particularly because its service as a
Committee member benefits all unsecured creditors.
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: 6 State Court Suits Remain Stayed
------------------------------------------------------
Residential Capital LLC and its affiliates can dodge six
securities lawsuits over soured mortgage-backed securities while
they remain in bankruptcy, following its resolution of five of the
stay disputes and a New York bankruptcy judge's stay in the sixth
dispute.
Motions to lift stay in relation to the lawsuits were filed by
Mark and Lori Burris, Kenneth Taggart, Corla Jackson, Rex T.
Gilbert and Daniela L. Gilbert, Mary Gardner, and Sidney Lewis and
Yvonne Lewis. They sought relief from the automatic stay to allow
them to continue prepetition foreclosure actions against certain
Debtors and non-debtors.
In their objection to the Lift Stay Motions, the Debtors related
that by way of direct claims and counter-claims, they are
defendants in more than 1,900 lawsuits involving a wide range of
causes of action, including in their capacities as loan servicers
and originators of mortgage loans, as well as causes of action
against third parties for which the Debtors are contractually
obligated to defend. A significant portion of the claims/lawsuits
are subject to the automatic stay because they do not fall under
any of the relief provided under the Bankruptcy Court's order
granting the Debtors' supplemental servicing motion. The Debtors
stated that although it is difficult to discern the nature of the
relief requested in certain of the Motions, all but one appears to
seek relief from the automatic stay to (i) continue prepetition
litigation and appeals pending and/or (ii) commence new litigation
against the Debtors in nonbankruptcy forums. None of the Movants,
however, has established entitlement to relief from the automatic
stay, the Debtors argued in court papers.
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: FHFA Allowed to Access Loan Tapes, Other Info
------------------------------------------------------------------
A New York judge allowed Federal Housing Finance Agency to move
forward with mortgage-backed securities claims against Residential
Capital LLC's affiliates by denying the bankrupt mortgage lender's
request to halt any prosecution or extend its automatic stay,
Jamie Santo of BankruptcyLaw360 reported.
ResCap, Ally Financial Inc.'s bankrupt mortgage unit, asked the
court to either enjoin the FHFA from bringing suit against 10 of
its non-debtor corporate affiliates, including Ally Financial,
Ally Securities and GMAC Mortgage, or else include them the
automatic stay protection afforded by its bankruptcy filing.
FHFA filed a motion with the U.S. Bankruptcy Court in Manhattan
seeking access to a limited number of loan tapes and originator
information in the possession of the Debtors in connection with
the action styled Federal Housing Finance Agency, as Conservator
for the Federal Home Loan Mortgage Corporation v. Ally Financial
Inc. f/k/a GMAC, LLC et al. pending in the United States District
Court for the Southern District of New York as Case No. 11- Civ.
7010. In the alternative, FHFA seeks relief from the automatic
stay to obtain access of the loan tapes and information.
FHFA related that, on July 17, Judge Cote of the U.S. District
Court in the Southern District of New York, presiding over the
FHFA Case, denied ResCap's injunction motion and directed FHFA to
request from the Bankruptcy Court access to any loan files.
FHFA's request will be heard on August 14 before Judge Glenn.
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).
REVEL ENTERTAINMENT: Bank Debt Trades at 18.25% Off
---------------------------------------------------
Participations in a syndicated loan under which Revel
Entertainment Group LLC is a borrower traded in the secondary
market at 81.75 cents-on-the-dollar during the week ended Friday,
July 27, 2012, an increase of 0.38 percentage points from the
previous week according to data compiled by LSTA/Thomson Reuters
MTM Pricing and reported in The Wall Street Journal. The Company
pays 750 basis points above LIBOR to borrow under the facility.
The bank loan matures on Feb. 15, 2017, and carries Moody's B3
rating and Standard & Poor's B rating. The loan is one of the
biggest gainers and losers among 166 widely quoted syndicated
loans with five or more bids in secondary trading for the week
ended Friday.
Revel Entertainment Group, LLC -- http://www.revelinac.com/-- is
a gaming and entertainment company that is developing a $2.4
billion beachfront casino entertainment resort project in Atlantic
City, which is expected to open in mid-2012. The company was
founded in 2006 and is based in Atlantic City, N.J.
RITZ CAMERA: To Auction Assets on September 6
---------------------------------------------
Lindsey Robbins at Gazette.Net reports that Ritz Camera is
scheduled to auction the business Sept. 6, 2012.
According to the report, the Company's new strategy involves
focusing more on on-site training instead of just selling
merchandise. Ritz has launched the Photo Patrol -- Ritz experts
tasked with teaching customers how to use cameras and helping them
troubleshoot, similar to the Geek Squad that the Best Buy chain
uses for electronic help services.
The report notes that Ritz selected 137 of its most profitable and
largest stores to remain, reducing its overhead to $5 million from
$6 million. The company previously lowered costs from $8 million
in 2010 to $6 million in 2011.
About Ritz Camera
Beltsville, Maryland-based Ritz Camera & Image LLC --
http://www.ritzcamera.com-- sells digital cameras and
accessories, and electronic products. It sought Chapter 11
protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to
close unprofitable stores. Ritz claims to be the largest camera
and image chain the U.S., operating 265 camera stores in 34 states
as well as an Internet business. Ritz Camera intends to shut 128
locations and cut its staff in half. Included in the closing are
10 locations in Maryland and 4 in Virginia.
Affiliate Ritz Interactive Inc., owner e-commerce Web sites that
include RitzCamera.com and BoatersWorld.com, also filed for
bankruptcy.
RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11
protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009.
Ritz generated $40 million by selling all 129 Boater's World
Marine Centers. A group that included the company's chief
executive officer, David Ritz, formed Ritz Camera & Image to buy
at least 163 of the remaining 375 camera stores. The group paid
$16.25 million in cash and a $7.8 million note. Later, Ritz sold
a $4 million account receivable for $1.5 million to an owner of
the company that owed the debt.
In the 2009 petition, Ritz disclosed total assets of $277 million
and total debts of $172.1 million. Lawyers at Cole, Schotz,
Meisel, Forman & Leonard, P.A., served as bankruptcy counsel.
Thomas & Libowitz, P.A., served as the Debtor's special corporate
counsel and conflicts counsel. Marc S. Seinsweig, at FTI
Consulting, Inc., served as the Debtor's chief restructuring
officer. Kurtzman Carson Consultants LLC acted as claims and
noticing agent. Attorneys at Cooley Godward Kronish LLP and
Bifferato LLC represented the official committee of unsecured
creditors as counsel.
In April 2010, the Court approved a liquidating Chapter 11 plan
proposed by the company and the official creditor's committee.
Under the Plan, unsecured creditors were to recover 4% to 14% of
their claims.
In the 2012 petition, RCI estimated total assets and liabilities
of $50 million to $100 million. The Debtors owe not less than
$16.32 million for term and revolving loans provided by secured
lenders led by Crystal Finance LLC, as administrative agent.
Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve
as bankruptcy counsel. Kurtzman Carson Consultants LLC is the
claims agent.
WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as
Ritz's CRO.
Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at
Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon
Brothers Retail Partners LLC and Hilco Merchant Resources LLC.
Crystal Finance, the DIP lender, is represented by Morgan, Lewis &
Bockius and Young Conaway Stargatt & Taylor LLP.
ROSCOE LLC: Faces Liquidation Under Chapter 7
---------------------------------------------
Laine Doss at Broward Palm Beach New Times reports that the
Chapter 11 filings for Roscoe LLC (dba Shooters restaurant) and
BIMA, LLC have been converted on July 10, 2012, to Chapter 7
liquidation.
The New Times report did not confirm the status of Shooters owner
John Wile's personal Chapter 11 bankruptcy, which was filed about
a month after Roscoe's and BIMA's.
According to the report, Shooters' controller Lauren DaVila said
the restaurant will continue to operate, despite the Chapter 7
bankruptcy. The report relates Ms. DaVila said the court wants
the iconic restaurant to stay open, but with a trustee monitoring
the operations.
Based in Fort Lauderdale, Florida, Roscoe, LLC dba Shooters
Waterfront Cafe USA filed for Chapter 11 protection on March 5,
2012 (Bankr. S.D. Fla. Case No. 12-15391). Judge Raymond B. Ray
presides over the case. Joe M. Grant, Esq., at Marshall Grant &
Griffin, P.L., represents the Debtor. The Debtor estimated assets
of between $1 million and $10 million, and debts of between $10
million and $50 million.
ROSETTA GENOMICS: Ranit Aharonov-Gal Resigns as R&D EVP
-------------------------------------------------------
Ranit Aharonov-Gal, Ph.D., executive vice president, R&D for
Rosetta Genomics Ltd, tendered her resignation, to be effective
Oct. 21, 2012, to pursue other opportunities.
About Rosetta
Located in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to
develop and commercialize new diagnostic tests based on a recently
discovered group of genes known as microRNAs. MicroRNAs are
naturally expressed, or produced, using instructions encoded in
DNA and are believed to play an important role in normal function
and in various pathologies. The Company has established a CLIA-
certified laboratory in Philadelphia, which enables the Company to
develop, validate and commercialize its own diagnostic tests
applying its microRNA technology.
In its auditors' report for the 2011 financial statements, Kost
Forer Gabbay & Kasierer, in Tel-Aviv, Israel, expressed
substantial doubt about Rosetta Genomics' ability to continue as a
going concern. The independent auditors noted that the Company
has incurred recurring operating losses and generated negative
cash flows from operating activities in each of the three years in
the period ended Dec. 31, 2011.
The Company reported a net loss after discontinued operations of
$8.83 million on $103,000 of revenues for 2011, compared with a
net loss after discontinued operations of $14.76 million on
$279,000 of revenues for 2010.
The Company's balance sheet at Dec. 31, 2011, showed $2.04 million
in total assets, $2.40 million in total liabilities, and a
stockholders' deficit of $356,000.
Bankruptcy Warning
The Company said in its annual report for the year ended Dec. 31,
2011, "We have used substantial funds to discover, develop and
protect our microRNA tests and technologies and will require
substantial additional funds to continue our operations. Based on
our current operations, our existing funds, including the proceeds
from the January 2012 debt financing, will only be sufficient to
fund operations until late May, 2012. We intend to seek funding
through collaborative arrangements and public or private equity
offerings and debt financings. Additional funds may not be
available to us when needed on acceptable terms, or at all. In
addition, the terms of any financing may adversely affect the
holdings or the rights of our existing shareholders. For example,
if we raise additional funds by issuing equity securities, further
dilution to our then-existing shareholders may result. Debt
financing, if available, may involve restrictive covenants that
could limit our flexibility in conducting future business
activities. If we are unable to obtain funding on a timely basis,
we may be required to significantly curtail one or more of our
research or development programs. We also could be required to
seek funds through arrangements with collaborators or others that
may require us to relinquish rights to some of our technologies,
tests or products in development or approved tests or products
that we would otherwise pursue on our own. Our failure to raise
capital when needed will materially harm our business, financial
condition and results of operations, and may require us to seek
protection under the bankruptcy laws of Israel and the United
States."
SAN JOSE FINANCING: Fitch Keeps 'BB' Rating on $35MM Revenue Bonds
------------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on the following San
Jose Financing Authority (the authority) parking revenue bonds.
-- $35.1 million parking revenue bonds.
The Rating Outlook is Stable.
Security
The bonds are special limited obligations of the authority,
secured by a pledge of surplus tax increment revenues (tax
revenue) from the redevelopment agency (subordinate to senior and
subordinate tax allocation bonds) and gross parking revenue from
the city's parking enterprise fund.
Key Rating Drivers
REDUCED PLEDGED REVENUES: The 'BB' rating reflects the likelihood
that future debt service payments will be made solely from the
parking fund due to the lack of surplus tax revenues. Pledged
revenues will be insufficient to meet annual debt service payments
and support the parking system's operating expenses without
meaningful rate increases, a sharp increase in usage and/or
financial support from the city.
PARKING FUND FINANCIAL PROFILE: The parking fund's financial
profile is weak as persistent operating deficits and significant
loans to the redevelopment agency have largely eroded historically
strong reserves. Current reserve levels are adequate but likely to
continue declining.
OPERATING RESERVE: The city's pledge to maintain a parking system
operating reserve equal to 25% of expected expenditures if parking
revenues are insufficient to maintain it becomes increasingly
important to credit quality as the likelihood of a call on that
reserve increases. The city (implied ULTGO rating of 'AA+') has
not needed to contribute to the reserve to date but Fitch views
the city's capacity and willingness to meet its obligations as key
to supporting the current rating.
COMPETITIVE PARKING SYSTEM: The parking system benefits from is
strong competitive position, including its monopoly over essential
on-street parking spaces, the diversity of its parking locations
and parking options, and moderate degree of revenue flexibility
remaining.
ECONOMIC CONDITIONS DRIVE DEMAND: The parking system is exposed to
broader economic trends which include a lower level of economic
activity resulting in a significant office vacancy rate and lower
demand for parking.
NO SURPLUS TAX REVENUE: Surplus tax revenue is not expected to be
available to support debt service payment in fiscal 2013 and
beyond. The 'BB' rating reflects the performance of the parking
fund and the city's commitment to replenish the operating reserve.
CREDIT PROFILE
NO SURPLUS TAX REVENUE AVAILABLE
As a result of high leverage and significant declines in project
area taxable assessed value (AV), Fitch does not expect that
surplus tax revenue will be available to pay debt service in
fiscal 2013 or in the immediate future.
With a few exceptions, most notably a $1.7 million payment made
from the redevelopment agency's available funds in fiscal 2012,
recent debt service payments by the RDA have been made using funds
borrowed from the parking fund. At the end of fiscal 2012, the
RDA will have borrowed approximately $13.6 million from the
parking fund. Fitch does not view the loan's repayment as likely
because it is not currently considered an enforceable obligation
and the successor agency's limited financial capacity.
For more information on San Jose RDA see Fitch's June 5, 2012
press release.
PARKING FUND's WEAK FINANCIAL POSITION
The city has explicitly recognized the need to make debt service
payments from the parking fund in fiscal 2013 and the need to
develop a strategy to sustainably pay debt service going forward.
The parking fund's financial position has weakened as a result of
persistent operating deficits and loans to the agency have
decreased financial reserves. Fitch estimates that the parking
fund recorded an operating deficit of $2.3 million in fiscal 2011
and a modest operating surplus of $230,000 fiscal 2012after
including funds loaned to the RDA for debt service payments. The
fiscal 2013 budget, which includes debt service payments, projects
an operating deficit of $3.7 million and an ending available fund
balance of $8.1 million.
Fitch notes that the fund's fiscal 2012 financial performance was
improved by the approximately $800,000 in revenue generated from
two parking facilities transferred from the RDA to the city as the
beginning of the fiscal year. The asset transfer is currently
being reviewed by the state auditor-controller under provisions
included in AB 1x26, the RDA dissolution legislation. If the
asset transfer is reversed, the revenue generated from those two
facilities may also be transferred to the SA, which would reduce
the fund's available fund balance by a corresponding amount.
The city has implemented both rate increases and expenditure
reductions to improve the fund's financial performance. However,
despite these changes, operating revenue may not be sufficient to
cover debt service and operating and maintenance (O&M) costs on a
permanent basis. The city believes it may be able to raise
additional revenue by implementing a $5 daytime flat fee on
weekends for some garages and installing additional parking meters
but did not provide estimates of the potential revenue. On the
spending side, management states that most of the major
opportunities for savings have been taken.
WEAK COVERAGE INCREASES IMPORTANCE OF CITY COMMITMENT
Based on budgetary information, Fitch estimated coverage for 2013
shows gross parking revenues at less than 1.0 times (x) annual
debt service plus operating expenses, which would appear to
violate the city's rate covenant. Management stated that there
has been no such violation to date and that budget adjustments
will be made throughout the year to continue to comply with the
rate covenant.
The city has pledged to maintain an operation and maintenance
reserve fund within the parking fund equal to 25% of operating and
maintenance expenses. Fitch views the city's commitment as a key
rating driver given the weakening performance of pledged revenues.
The 'BB' rating incorporates the likelihood that parking revenues
will be insufficient in the immediate term, triggering a call on
the operating reserve and a replenishment by the city pursuant to
the City Parking Pledge Agreement.
PARKING SYSTEM'S GOOD FUNDAMENTALS
The city's parking system is large and includes eight garages, six
parking lots, and on-street metered spaces for a total of 9,849
parking spaces. The city estimates that the city's system
accounts for about 40% of the total parking supply in the downtown
area. In addition, the city reports that despite raising hourly
rates in 2011, charges remain below average. Parking demand is
generated through a diverse set of activities, including daily
work commuters, special event attendees, and short term parking.
However, with the lower level of economic activity in the downtown
area, demand for parking is relatively low with garage average
daytime peak occupancy at approximately 50% in fiscal 2012, down
4% from the previous year. City officials noted that economic
conditions are improving somewhat as demonstrated by a modest
decrease in the office vacancy rate to 22% in the fourth quarter
of 2011 from 25% in 2010.
San Jose is sizeable, covering over 178 square miles at the
southern end of the San Francisco Bay. With an estimated
population of nearly 1 million, the city is the largest in the Bay
Area and the third largest in the state. Its economy, like that
of the region, continues to be tied to the high technology sector,
although the focus has shifted somewhat from manufacturing to
information and software. In addition, the city's economic
development efforts are focused on attracting green technology
companies. The city benefits from its proximity to several
universities, an abundance of venture capital companies, and a
highly educated, affluent workforce. The city's employment
conditions appear to be improving an unemployment rate of 10% in
February 2012, a 1.1% decline year-over-year.
SAND TECHNOLOGY: Top Executives Quit Amid Strategic Review
----------------------------------------------------------
SAND Technology Inc.'s Chief Executive Officer, Mr. Thomas M.
O'Donnell, has left the Corporation effective immediately, citing
the fact that the board of directors is reviewing all available
strategic options for the Corporation and thus, it has moved on to
a new phase. Mr. O'Donnell has agreed to remain as a director of
the Corporation.
The Corporation announced that Mr. Richard Grondin, Chief
Technology Officer has left the Corporation and that Mr. Michael
Pilcher, is no longer President and Chief Operating Officer of the
Corporation.
Mr. Russell J. David, CPA, CA, CF and Senior Partner of Deloitte &
Touche LLP, has agreed to assume the role of strategic advisor to
the board of directors, effective immediately.
"The board of directors wishes to thank Mr. O'Donnell for his
dedication to the Corporation and the hard work undertaken on
behalf of the Corporation and its shareholders, since assuming the
role of SAND's CEO approximately two years ago, said George
Wicker, a director of the Corporation and chair of the
Corporation's governance committee.
The Corporation's board of directors and management team initiated
a review of the business, including consideration of all available
strategic options, with the objective of maximizing value for
shareholders. There can be no assurance, however, that the
strategic review will result in any specific transaction.
About SAND Technology
Westmount, Quebec-based SAND Technology Inc. (OTC BB: SNDTF)
-- http://www.sand.com/-- provides Data Management Software and
Best Practices for storing, accessing, and analyzing large amounts
of data on-demand while lowering TCO, leveraging existing
infrastructure and improving operational performance.
SAND/DNA solutions include CRM analytics, and specialized
applications for government, healthcare, financial services,
telecommunications, retail, transportation, and other business
sectors. SAND Technology has offices in the United States,
Canada, the United Kingdom and Central Europe.
The Company reported a net loss and comprehensive loss of C$2.11
million on C$6.87 million of revenue for the fiscal year ended
July 31, 2011, compared with a net loss and comprehensive loss of
$745,549 on $6.56 million of revenue during the prior year.
SAND Technology's balance sheet as at Jan. 31, 2012, showed C$5.89
million in total assets, C$3.11 million in total liabilities and
C$2.78 million shareholders' equity.
SAVTIRA CORP: Judge Converts Case to Chapter 7 Proceeding
---------------------------------------------------------
Margie Manning, quality and content editor at Tampa Bay Business
Journal, reports that U.S. Bankruptcy Judge Catherine McEwen
converted Savtira Corp.'s Chapter 11 filing to a Chapter 7
liquidation.
"Chapter 7 generally will have an independent trustee appointed to
marshal and liquidate a company's assets," the report quotes
Gregory McCoskey, a bankruptcy attorney at Akerman Senterfitt, who
is not involved in the Savtira case, as saying. "In Chapter 11,
the debtor had the opportunity to reorganize their assets. That's
no longer the case."
The report notes Savtira has 14 days to come back to the court to
reconvert the case to a Chapter 11 bankruptcy, if the company can
find funding to pay creditors.
According to the report, Savtira had gone to court to ask the
judge for a continuance. It wanted more time to line up financial
backers that would allow it to repay its debt, after a proposed
debtor-in-possession plan from Savita One LLC, a company at one
time associated with Tampa entrepreneur and philanthropist Dr.
Kiran Patel, fell through.
The report relates Mr. Patel's involvement with Savita came into
question during the court hearing, while David Steen, Savtira's
bankruptcy attorney, and Roy Kobert, Savita's attorney, traded
words in court about the circumstances under which the DIP funding
plan fell apart, each saying the other was to blame.
The report says Mr. Steen also showed Judge McEwen two "letters of
intent" for alternative funding. Judge McEwen reviewed both,
before pronouncing them "smoke and mirrors." She also said the
company lacked a game plan and had an "unsophisticated" approach.
"Businesspeople should be smarter than this," she said. "You've
run out of time."
The report says Savtira's key asset appears to be its intellectual
property and source code. Creditors said they would work with the
trustee to figure out the value of the IP to try to monetize it
and repay debts.
About Savtira
Based in Tampa, Florida, Savtira Corp. -- http://www.savtira.com/
-- engages in the business of digital distribution with a
software-as-a-service (SaaS) e-commerce platform that is a turnkey
system for the distribution, marketing, merchandising, and selling
of both digital media and physical goods in a single store and a
single, unified shopping cart.
Savtira Corp., aka Savtira Corporation of Delaware, filed for
Chapter 11 protection on April 27, 2012 (Bankr. M.D. Fla. Case No.
12-06471). Judge Catherine Peek McEwen presides over the case.
Vincent B. Lynch, Esq., at Vincent Lynch, PA, represents the
Debtor. The Debtor estimated assets of between $1 million and
$10 million and debt of between $10 million and $50 million.
SAYA HOSPITALITY: Case Summary & 4 Unsecured Creditors
------------------------------------------------------
Debtor: Saya Hospitality, LLC
102 Drinkard Drive NW
Fort Payne, AL 35967
Bankruptcy Case No.: 12-41380
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
Northern District of Alabama (Anniston)
Debtor's Counsel: Robert D McWhorter, Jr., Esq.
INZER, HANEY & MCWHORTER, P.A.
Post Office Drawer 287
Gadsden, AL 35902
Tel: (256) 546-1656
E-mail: rdmcwhorter@bellsouth.net
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its four largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/alnb12-41380.pdf
The petition was signed by Jaimini Patel, managing member.
SEA REAL ESTATE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Sea Real Estate CCHF 101, LLC
25 Englewood Terrace
Lakewood, NJ 08701
Bankruptcy Case No.: 12-28242
Chapter 11 Petition Date: July 23, 2012
Court: U.S. Bankruptcy Court
District of New Jersey (Trenton)
Judge: Michael B. Kaplan
Debtor's Counsel: David C. Steinmetz, Esq.
LAW OFFICE OF DAVID C. STEINMETZ, LLC
212 2nd Street, Suite 304
Lakewood, NJ 08701
Tel: (732) 367-1880
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
The Company did not file a list of creditors together with its
petition.
SIAG AERISYN: Wants Plan Filing Period Extended to Oct. 31
----------------------------------------------------------
SIAG Aerisyn LLC asks the U.S. Bankruptcy Court for the Eastern
District of Tennessee to extend its exclusive period to file a
Plan to and including Oct. 31, 2012, and its exclusive period to
obtain acceptances of a filed Plan to and including Dec. 30, 2012.
The is the first request for extension of the Debtors exclusivity
periods.
About SIAG Aerisyn
SIAG Aerisyn LLC, aka Aerisyn LLC, filed a Chapter 11 petition
(Bankr. E.D. Tenn. Case No. 12-11705) on April 2, 2012 in its
hometown in Chattanooga, Tennessee. The Debtor manufactures wind
towers essential for wind turbines as alternative energy sources.
The plant is located in Chattanooga, employing roughly 84 persons.
Judge Shelley D. Rucker presides over the case. Samples,
Jennings, Ray & Clem, PLLC, serves as the Debtor's Chapter 11
counsel. Wormser, Kiely, Galef & Jacobs, LLP, serves as special
counsel. Jerome Luggen of Cincinnati Industrial Auctioneers,
Inc., was tapped as appraiser of the Debtor's equipment. The
Debtor estimated up to $50 million in assets and debts.
In its schedules, the Debtor disclosed $18,728,994 in total assets
and $24,261,855 in total liabilities.
SNOHOMISH PUBLIC HOSPITAL: Fitch Cuts Rating on $2.9MM Bonds to B
-----------------------------------------------------------------
Fitch Ratings has taken the following rating action on Snohomish
County Public Hospital District's (PHD) limited tax general
obligation (LTGO) bonds:
-- $2.9 million series 2004 downgraded to 'B' from 'BBB+'.
The rating is placed on Rating Watch Negative.
Security
The bonds are secured by a full faith and credit general
obligation pledge of the district. The district also irrevocably
pledges to annually levy and collect property taxes within the
constitutional and statutory limits, to pay debt service principal
and interest on the bonds.
Key Rating Drivers
FAILED MERGER: The downgrade to 'B' reflects the failed merger
with Capella Healthcare following negotiations that extended for
nearly one year. The district's severe financial challenges
contributed to this outcome, dimming prospects for alternative
partnerships as well.
POTENTIAL REPAYMENT DELAYS; SOLUTIONS UNCLEAR: The Negative Rating
Watch reflects the potential for interruption in flow of funds as
the district faces limited options for regaining stability. The
district has recently resumed partnership discussions with two
local hospital operators but the timeframe and likely outcome of
such discussions remains unclear.
DETERIORATING FINANCIAL POSITION: The district's financial
position has continued to deteriorate as a result of declining
utilization, growing losses and poor liquidity. Fitch believes
such weaknesses leave the district vulnerable to insolvency over
the near-to-medium term.
FISCAL IMPROVEMENTS DELAYED: Uncertainty related to the district's
ongoing operations has contributed to the loss of clinical staff
and senior management turnover, impeding efforts to stabilize the
district's finances.
STRONG TAX BASE; LIMITED BENEFIT: Given the weak financial
position, the benefits of the district's GO pledge and the
strength of its underlying tax base are diminished. The current
rating more closely reflects the district's financial operations.
WHAT COULD TRIGGER A RATING ACTION
ONGOING INSTABILITY: The district's continued inability to
stabilize its finances through a partnership or other means will
result in a downgrade.
CREDIT PROFILE:
DETERIORATING FINANCIAL POSITION
Unaudited results for fiscal 2011 and interim financials for
fiscal 2012 show continued deterioration in the district's
financial position, with net assets falling to less than half
their levels at the end of fiscal 2010. Operating losses also
continue to grow and liquidity remains poor, with 22 days of cash
on hand at the end of fiscal 2011. The district's financial
position reflects growing weakness and its long-term viability has
become less certain as a result.
LIMITED OPTIONS FOR IMPROVEMENT
Following the recent failure of partnership discussions with
Capella Healthcare, a for-profit out-of-state hospital operator,
the district has resumed earlier efforts to join its operations
with one of two local entities, a nearby public hospital district
or a regional not-for profit hospital operator. The district's
dual goals in these efforts have been to preserve local services
while stabilizing its finances, a challenge it has been unable to
meet on its own. Management initially set a June 2012 deadline
for completion of the new merger talks and has since extended its
timeframe to the third quarter of 2012, but the likelihood of a
successful resolution is unclear.
UNCERTAIN FUTURE ADDS TO CHALLENGES
Management's recent focus on merger discussions has contributed to
delays in the implementation of potential cost-savings measures
and led to the loss of key staff, with the resulting closure of
the district's primary care clinic. This reduction in services
follows earlier closures of the district's obstetrics and
psychiatric units, and ongoing challenges in staff retention and
recruitment. Turnover has also impacted the district's senior
management, with a new CEO appointed in May 2012 and several
senior positions currently filled under temporary contracts. In
addition, the district incurred $1.4 million in legal and
consulting costs during the course of recent merger discussions,
further straining its finances.
STRONG UNDERLYING TAX BASE OF LIMITED BENEFIT
The district's underlying tax base is large and diverse, and
property tax receipts have been stable. However, given the
district's weak financial position, the strong underlying tax base
and GO pledge is of limited benefit due to the potential
disruption of debt service payments in an insolvency situation.
Direct and overlapping debt levels for the district are moderate
at approximately $4,000 per capita and 2.9% of assessed value.
Amortization is slow as a result of the district's 2009 issuance
of additional GO debt, with 27% of outstanding principal due for
payment within 10 years. Debt service requirements for the
district are small relative to the size of its operations, and
accounted for approximately 2% of expenditures in fiscal 2011.
The district is located in eastern Snohomish County, Washington,
about 30 miles northeast of Seattle on the outskirts of the Puget
Sound region. The district owns and operates Valley General
Hospital, the only acute care facility in the district and the
Valley General Chemical Dependency Treatment Center.
SOUTHERN PRODUCTS: Incurs $881,000 Net Loss in May 31 Quarter
-------------------------------------------------------------
Southern Products, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $881,418 on $776,292 of sales revenue for the three
months ended May 31, 2012, compared with a net loss of $39,242 on
$536,433 of sales revenue for the same period a year ago.
The Company's balance sheet at May 31, 2012, showed $996,512 in
total assets, $3.37 million in total liabilities, all current, and
a $2.38 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/9xFmro
About Southern Products
City of Industry, Calif.-based Southern Products, Inc., is in the
business of designing, assembling and marketing consumer
electronics products, primarily flat screen high-definition
televisions using LCD and LED technologies. Through Nov. 30,
2011, the Company has six LCD and LED widescreen televisions on
the market.
The Company reported a net loss of $1.47 million for the year
ended Feb. 29, 2012, compared with a net loss of $47,966 for the
year ended Feb. 28, 2011.
Silberstein Ungar, PLLC, in Bingham Farms, Michigan, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Feb. 29, 2012, citing negative
working capital and losses from operations which factors raise
substantial doubt about the Company's ability to continue as a
going concern.
TALON THERAPEUTICS: James Flynn Ownership Down to 46.8%
-------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, James E. Flynn and his affiliates disclosed
that, as of June 29, 2012, they beneficially own 18,973,103 shares
of common stock of Talon Therapeutics, Inc., representing 46.80%
of the shares outstanding.
Mr. Flynn previously reported beneficial ownership of 19,712,567
common shares or a 50.02% equity stake as of March 31, 2012.
A copy of the amended filing is available for free at:
http://is.gd/Q7MTsw
About Talon Therapeutics
Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc.
(TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical
company dedicated to developing and commercializing new,
differentiated cancer therapies designed to improve and enable
current standards of care. The company's lead product candidate,
Marqibo, potentially treats acute lymphoblastic leukemia and
lymphomas. The Company has additional pipeline opportunities some
of which, like Marqibo, improve delivery and enhance the
therapeutic benefits of well characterized, proven chemotherapies
and enable high potency dosing without increased toxicity.
Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to
Talon Therapeutics Inc. The name change was effected by merging
Talon Therapeutics, Inc., a wholly-owned subsidiary of the
Company, with and into the Company, with the Company as the
surviving corporation in the merger.
The Company reported a net loss of $18.82 million for the year
ended Dec. 31, 2011, compared with a net loss of $25.98 million
during the prior year.
The Company's balance sheet at March 31, 2012, showed $7.77
million in total assets, $62.23 million in total liabilities,
$34.66 million in redeemable convertible preferred stock, and a
$89.13 million total stockholders' deficit.
BDO USA, LLP, in San Jose, California, issued a "going concern"
qualification on the financial statements for the year ended
Dec. 31, 2011, citing recurring losses from operations and net
capital deficiency that raise substantial doubt about the
Company's ability to continue as a going concern.
TECHNEST HOLDINGS: Issues $100,000 Conv. Note to Southridge
-----------------------------------------------------------
AccelPath, Inc., entered into a subscription agreement with
Southridge Partners II, LP, for the purchase of a convertible
promissory note in the aggregate principal amount of $100,000.
The Convertible Note accrues interest at a rate of 5% per annum
and is due on Jan. 31, 2013. Southridge has the option to convert
all or a portion of the principal amount of the Convertible Note
plus accrued interest into shares of the Company's common stock,
par value $0.0001 per share at a per share conversion price of
$0.0075.
On July 18, 2012, the Company entered into an exchange agreement
with Southridge whereby Southridge, exchanged 100 shares of the
Company's Series E Preferred Stock to the Company in exchange for
a newly issued convertible promissory note in the principal amount
of $105,834. The Note accrues interest at a rate of 5% per annum
and is due on Sept. 1, 2013. Southridge has the option to convert
all or a portion of the principal amount of the Exchange Note plus
accrued interest into shares of the Company's Common Stock at a
per share conversion price equal to the then current market price
multiplied by 60%.
A copy of the Securities Purchase Agreement is available at:
http://is.gd/ZdiBWz
A copy of the Exchange Agreement is available for free at:
http://is.gd/2dEg9k
About Technest Holdings
Bethesda, Md.-based Technest Holdings, Inc., has two primary
businesses: AccelPath, which is in the business of enabling
pathology diagnostics and Technest, which is in the business of
the design, research and development, integration, sales and
support of three-dimensional imaging devices and systems.
Following the fiscal 2011 results, Wolf & Company, P.C., in
Boston, Massachusetts, expressed substantial doubt about Technest
Holdings' ability to continue as a going concern. The independent
auditors noted that the Company has suffered recurring losses from
operations, has negative cash flows from operations, a
stockholders' deficit and a working capital deficit.
The Company reported a net loss of $2.9 million on $450,000 of
revenues for the fiscal year ended June 30, 2011, compared with a
net loss of $325,000 on $0 revenue for the fiscal year ended
June 30, 2010.
The Company reported a net loss of $1.41 million on $470,037 of
revenue for the nine months ended March 31, 2012, compared with a
net loss of $1.05 million on $234,407 of revenue for the same
period a year ago.
The Company's balance sheet at March 31, 2012, showed
$5.29 million in total assets, $6.55 million in total liabilities
and a $1.25 million total stockholders' deficit.
THERAPEUTICSMD INC: Steven Johnson Discloses 9.5% Equity Stake
--------------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Steven G. Johnson disclosed that, as of July 19, 2012,
he beneficially owns 9,410,991 shares of common stock of
TherapeuticsMD, Inc., representing 9.56% of the shares
outstanding. S.J. Capital, LLC, an entity solely controlled by
Mr. Johnson beneficially owns 6,710,991 common shares or a 6.81%
equity stake as ofJuly 19. A copy of the filing is available for
free at http://is.gd/Cz7bRj
About TherapeuticsMD
Boca Raton, Fla.-based TherapeuticsMD, Inc., is a specialty
pharmaceutical company focused on the sales, marketing and
development of branded and generic pharmaceutical and OTC products
primarily for the women's healthcare market. The Company's
products are designed to improve the health and well-being of
women from pregnancy through menopause while using information
technology to lower costs for the Patient, Physician and Payor.
The Company's balance sheet at March 31, 2012, showed
$1.49 million in total assets, $4.84 million in total liabilities,
and a shareholders' deficit of $3.35 million.
As reported in the TCR on April 2, 2012, Rosenberg Rich Baker
Berman & Company, in Somerset, N.J., expressed substantial doubt
about TherapeuticsMD, Inc.'s ability to continue as a going
concern, following the Company's results for the fiscal year ended
Dec. 31, 2011. The independent auditors noted that the Company
has suffered a loss from operations of approximately $5.4 million
and had negative cash flow from operations of approximately
$5.0 million.
THERAPEUTICSMD INC: Robert Smith Discloses 9.5% Equity Stake
------------------------------------------------------------
In a Schedule 13D filing with U.S. Securities and Exchange
Commission, Robert J. Smith and his affiliates disclosed that, as
of July 19, 2012, they beneficially own 9,409,910 shares of common
stock of TherapeuticsMD, Inc., representing 9.56% of the shares
outstanding. A copy of the filing is available for free at:
http://is.gd/Y112VW
About TherapeuticsMD
Boca Raton, Fla.-based TherapeuticsMD, Inc., is a specialty
pharmaceutical company focused on the sales, marketing and
development of branded and generic pharmaceutical and OTC products
primarily for the women's healthcare market. The Company's
products are designed to improve the health and well-being of
women from pregnancy through menopause while using information
technology to lower costs for the Patient, Physician and Payor.
The Company's balance sheet at March 31, 2012, showed
$1.49 million in total assets, $4.84 million in total liabilities,
and a shareholders' deficit of $3.35 million.
As reported in the TCR on April 2, 2012, Rosenberg Rich Baker
Berman & Company, in Somerset, N.J., expressed substantial doubt
about TherapeuticsMD, Inc.'s ability to continue as a going
concern, following the Company's results for the fiscal year ended
Dec. 31, 2011. The independent auditors noted that the Company
has suffered a loss from operations of approximately $5.4 million
and had negative cash flow from operations of approximately
$5.0 million.
TOYS R US: Fitch Rates $350-Mil. Senior Unsecured Notes 'B'
-----------------------------------------------------------
Fitch Ratings has assigned a rating of 'B/RR4' to Toys 'R' Us,
Inc.'s (HoldCo) $350 million senior unsecured notes due July 2017.
The Rating Outlook is Stable. Proceeds, along with cash, will be
used towards refinancing the $400 million 7.875% HoldCo notes due
April 2013.
Restrictive Covenants
The notes are being offered under a new indenture with more
restrictive covenants versus the current covenant-lite HoldCo
notes. Some key covenants around indebtedness and Restricted
Payments include:
-- UK Propco and Toy's Asian joint venture are carved out and
defined as unrestricted subsidiaries (subs) under the new
notes.
-- Additional Indebtedness: the notes are subject to a minimum
pro forma fixed-charge coverage test of 1.75x (consolidated
excluding unrestricted subs and 2.0x at Toys 'R' Us Delaware)
and a general debt basket of $250 million.
-- Restricted Payments (RPs) (to equity holders or restricted
subs): Key restrictions include that RPs equal the sum of 50%
of cumulative consolidated net income since the start of the
quarter following the issue date; consolidated leverage is
below 3.85x (Toys leverage is above that currently); and only
6% of IPO proceeds is available as dividend to sponsors.
-- As to the ability to pay down UK Propco debt with any cash at
HoldCo, there is a specific basket of $100 million.
Including other general RP baskets and carve-outs, HoldCo is
permitted to downstream up to $550 million to UK Propco to
potentially address its debt maturities.
European Debt Refinancings
Besides the HoldCo notes due April 2013, Toys has approximately
$910 million in various European real estate credit facilities due
between February and April 2013. This constitutes: $81 million
French; $168 million Spanish and $663 million UK real estate
credit facilities. Given the tough CMBS markets, Fitch expects
Toys to be able to issue significantly less debt against the same
collateral.
However, Toys has $500 million in liquidity, which includes
approximately $174 million in cash and short-term notes receivable
at the HoldCo level at the end of January and $320 million from
Toys 'R' Us -Delaware in the form of dividends and loans
(including the proceeds from the borrowings of a $225 million
incremental term loan). This can be applied towards any
unrefinanced balance of the Holdco notes or the European real
estate facilities. Fitch would expect Toys to address all its
refinancing needs over the next three to four months.
Sluggish Operating Performance Expected To Continue
The ratings reflect Toys' sluggish operating performance and high
leverage. Fitch' expects Toys' leverage (adjusted debt/EBITDAR)
could creep up to the mid-6.0x range over the next 12 to 18
months. Coverage (operating EBITDAR/gross interest expense plus
rents) is expected to be in the range of 1.4x-1.5x. This assumes
low single-digit decline in comparable store sales (comps) at both
the domestic and international segments, and flat to modest
improvement in gross margin. Fitch expects continued deleveraging
of selling, general, and administrative (SG&A) expenses.
Toys' share of the domestic and global toy industry has been
relatively stable, although pricing competition and promotional
pressures have intensified in a sluggish economic and consumer
environment. While Toys is the only remaining national brick-and-
mortar specialty toy retailer in the U.S., it has muddled along
against the increasing competition from discounters and online
retailers for the more commodity-type toy products.
The cyclical downturn and hence weaker sales in the entertainment
category (mainly video game systems and electronics, accounting
for 12%-13% of total sales), has particularly contributed to the
weakness. In addition, there has been some pressure on the
overall juvenile category given the lowest birth rate in the U.S.
in 11 years. Toys' e-commerce growth, juvenile integration
strategy, and increased penetration of private brands have helped
partially mitigate these challenges. Toys could hold on to its
share over the near to intermediate term; however, Fitch expects
continued pressure on comps and EBITDA.
Liquidity
Toys' weak top-line performance has pressured EBITDA and free cash
flow (FCF) generation. FCF over the last two years has also been
adversely affected by the continued challenge of managing working
capital efficiently. Besides some timing related issues, the
company has gotten stuck with excess inventory in the last two
holiday seasons. Toys is looking to address some of these issues
more aggressively this year. If working capital is flat going
forward, Fitch expects Toys could generate up to $200 million in
FCF in 2012 and in the $70 million-$100 million range thereafter.
Assuming the successful refinancing of upcoming maturities, Toys
has adequate liquidity with $600 million of cash and cash
equivalents and $1.36 billion of availability under its various
revolvers as of April 28, 2012.
Recovery Analysis and Considerations
The ratings on the specific securities reflect Fitch's recovery
analysis using a going-concern approach. At the OpCo levels --
Toys-Delaware, Toys-Canada, and other international operating
companies -- latest 12-month (LTM) EBITDA is stressed at 20%.
Fitch has assigned a 5.5x multiple to the stressed EBITDA, which
is consistent with the low end of the 10-year valuation for the
public space and Fitch's average distressed multiple across the
retail portfolio. The stressed enterprise value (EV) is adjusted
for 10% administrative claims.
At the PropCo levels - Toys 'R' Us Property Co. I, LLC and Toys
'R' Us Property Co. II, LLC - LTM net operating income (NOI) is
stressed at 15% and a distressed capitalization rate of 12% is
applied to the stress NOI of the properties to determine a going-
concern valuation. The stressed rates reflect downtime and
capital costs that would need to be incurred to re-tenant the
space.
The new notes and the $400 million 7.375% unsecured notes due Oct.
15, 2018, benefit from the residual value at PropCo I, which is a
direct subsidiary of HoldCo. There is no residual value ascribed
from Toys-Delaware or other operating subsidiaries. This results
in average recovery prospects of 31%-50% and the bonds are
therefore rated 'B/RR4'.
What Could Trigger a Rating Action
Besides the sluggish domestic business, Fitch recognizes the
challenging economic and capital market conditions in the major
European markets, which could create uncertainties in the
refinancing process and add pressure to operations going forward.
The failure to address these maturities over the next three to
four months and any material deterioration in operating results
are likely to lead to downward pressure on the company's ratings.
Revenues generated between U.K. and Central Europe accounted for
16% - 17% of the consolidated revenues.
A negative rating action could result if:
-- Weak comps trends in the U.S. and international businesses
indicate market share losses that would cause leverage to
increase meaningfully and/or lead to tightened liquidity;
-- FCF at fiscal 2012 year-end remains negative, either due to
weakening EBITDA trend or continued lack of efficiency in
managing working capital;
-- There is a failure to refinance upcoming debt maturities.
A positive rating action could result if leverage can be sustained
in the low 5.0x range, both on sustainable improvements in the
business and paying down debt with any IPO proceeds and FCF.
Fitch rates Toys as follows:
Toys 'R' Us, Inc. (HoldCo)
-- IDR at 'B';
-- Senior Unsecured Notes at 'B/RR4'.
Toys 'R' Us - Delaware, Inc. is a subsidiary of HoldCo
-- IDR at 'B';
-- Secured Revolver at 'BB/RR1';
-- Secured Term Loans at 'B-/RR5';
-- Senior Secured Notes at 'B-/RR5';
-- Senior Unsecured Notes at 'CCC/RR6'.
Toys 'R' Us Property Co. II, LLC is subsidiary of Toys 'R' Us -
Delaware, Inc.
-- IDR at 'B';
-- Senior Secured Notes at 'BB/RR1'.
Toys 'R' Us Property Co. I, LLC is a subsidiary of HoldCo
-- IDR at 'B';
-- Senior Unsecured Notes at 'BB/RR1'.
The Rating Outlook is Stable.
TOYS R US: Moody's Assigns 'B3' Rating to $350MM Sr. Unsec. Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 (LGD6, 94%) rating to the
new proposed $350 Million senior unsecured notes to be issued by
Toys "R" Us, Inc., and affirmed all existing ratings, including
the B1 corporate family rating and the SGL-3 speculative grade
liquidity rating. The outlook is negative.
Ratings Assigned:
Toys "R" Us, Inc.
Proposed $350 million senior unsecured notes due 2017 at B3
(LGD6, 94%)
Ratings affirmed and LGD point estimates adjusted include:
Toys "R" Us, Inc.
Corporate Family Rating at B1
Probability of Default Rating at B1
Senior unsecured notes due 2013 and 2018 at B3 (LGD6, 94%) from
B3 (LGD6, 95%)
Speculative Grade Liquidity rating at SGL-3
Toys "R" Us Delaware, Inc.
$400 million senior secured term loan due August 2018 at B1
(LGD3, 44%) from B1 (LGD3, 47%)
$700 million senior secured term loan due September 2016 at B1
(LGD3, 44%) from B1 (LGD3, 47%)
$225 million senior secured term loan due May 2018 at B1 (LGD3,
44%) from B1 (LGD3, 47%)
7.375% senior secured notes due September 2016 at B1 (LGD3,
44%) from B1 (LGD3, 47%)
8.75% debentures due 2021 at B3 (LGD5, 77%) from B3 (LGD5, 80%)
Toys "R" Us Property Company I, LLC
Senior unsecured notes due July 2017 at B3 (LGD5, 77%) from B3
(LGD5, 80%)
Toys "R" Us Property Company II, LLC
Senior secured notes due December 2017 at Ba1 (LGD2, 13%)
The rating outlook remains negative.
"The proposed new note issue alleviates some of our continuing
liquidity concerns regarding upcoming domestic and foreign debt
maturities which total around $1.3 billion during the February-
April 2013 period, and as such should be viewed as a credit
positive," stated Moody's Senior Analyst Charlie O'Shea. "The B3
rating of the proposed new notes, which is two-notches below the
B1 corporate family rating, considers their weak position in the
capital structure at the holding company level, with no guarantees
of any sort from any operating entity, though this new issue will
contain a change of control provision, which the pre-existing
bonds do not."
Ratings Rationale
Toys "R" Us' B1 Corporate Family Rating acknowledges the company's
weak credit metrics, with debt/EBITDA at the January 2012 FYE high
at 6.3 times, though is somewhat mitigated by retained cash
flow/net debt of almost 10%, its excellent market position as the
world's largest dedicated toy retailer, the favorable placing of
its solid Babies "R" Us brand and concept, and balanced financial
policy. The expeditious and economical refinancing of the $1.4
billion in debt maturing February-April 2013 is an additional key
rating factor. The negative outlook continues to reflect Moody's
concern that the company may have difficulty generating operating
profit over the next 12-18 months sufficient to reduce debt/EBITDA
to a more reasonable 6 times level, which would take around $1.7
billion in EBITDA, and also continues to consider the looming $1.3
billion in debt maturing February-April 2013. Ratings could be
upgraded if debt/EBITDA is sustained below 5 times. This could
occur either as a result of improvements in operating performance,
which would increase EBITDA, or as a result of a successful IPO
and application of proceeds sufficient to reduce debt. The company
has publicly-stated its desire do an eventual initial public
offering and use the proceeds to further reduce debt. The company
filed a registration statement in May 2010 which remains
active.Ratings could be downgraded if debt/EBITDA was sustained
above 6 times with retained cash flow/net debt of less than
10%,which could occur either as a result of a degradation in
operating performance or the institution of a more aggressive
financial policy. At present debt levels of approximately $10
billion, EBITDA of around $1.7 billion for 2012 would be necessary
to reach these levels. Ratings could also be downgraded if the
company does not continue to make meaningful progress towards
refinancing the February-April 2013 debt maturities in the fairly
short term.
The principal methodology used in rating Toys "R" Us was the
Global Retail Industry Methodology published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Toys "R" Us is the world's largest dedicated retailer of toys,
with annual revenues of around $14 billion. The company was taken
private in an LBO transaction in July 2005 by affiliates of
Kohlberg, Kravis, Roberts &Co., Vornado Realty Trust, and Bain
Capital, each of which owns 33%, and Gordon Brothers, which owns
the remaining 1%. It also operates the Babies "R" Us concept.
TOYS R US: S&P Rates $350MM Senior Notes Due 2017 at 'CCC+'
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' issue
rating and '6' recovery rating to Wayne, N.J.-based Toys 'R' Us
Inc.'s $350 million senior notes due in 2017. The company said
that it will use the proceeds from this offering, together with
cash on hand, to redeem the $400 million outstanding principal
amount of its 2013 notes. The $350 million notes due 2017 are
issued by Toys 'R' Us Inc. (Holdco) under Rule 144A with
registration rights. The Holdco notes are structurally
subordinated to the creditor claims of its subsidiaries. These
notes are unsecured and will not be guaranteed by any of Toys'
subsidiaries. "The '6' recovery rating indicates our expectations
for negligible (0%-10%) recovery in the event of a payment
default," S&P said.
Other ratings on Toys, including the 'B' corporate credit rating,
are unchanged, as is the stable outlook.
"With this transaction, Toys partly addresses significant debt
maturity in 2013, when about $1.3 billion of debt is due.
Following this transaction, the remaining debt maturities include
real estate loans of about $910 million at its European
subsidiaries and $400 million of unsecured notes at Toys 'R' Us
Inc. (Holdco). We believe Toys will be able to successfully
refinance these debt maturities," S&P said.
"The ratings on Toys continue to reflect our expectation that its
financial risk profile will remain 'highly leveraged' given our
expectations for limited improvement in credit protection measures
in 2012. We base our expectations on the intensely competitive
nature of toys and juvenile products retailing and Toys' onerous
capital structure. Given the intense competition in the toy
retailing sector, especially from mass merchants and discounters
such as Wal-Mart Stores Inc. and Target Corp., we view Toys'
business risk profile as 'weak.' Although we expect the domestic
economic recovery to be slow because of still-high unemployment,
we expect Toys' operating results to remain satisfactory because
of management's success with its merchandising strategy and cost-
control initiatives, as well as the positive effect of the store
conversion program. We believe that the continued integration of
the toy and juvenile businesses and a focus on operational
enhancements will bolster operating results in 2012," S&P said
RATINGS LIST
Toys 'R' Us Inc.
Corporate Credit Rating B/Stable/--
New Ratings
Toys 'R' Us Inc.
Senior Unsecured
$350 mil notes due 2017 CCC+
Recovery Rating 6
TRIBUNE CO: Bank Debt Trades at 27.91% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Tribune Co. is a
borrower traded in the secondary market at 72.09 cents-on-the-
dollar during the week ended Friday, July 27, 2012, an increase of
2.24 percentage points from the previous week according to data
compiled by LSTA/Thomson Reuters MTM Pricing and reported in The
Wall Street Journal. The Company pays 300 basis points above
LIBOR to borrow under the facility. The bank loan matures on May
17, 2014. The loan is one of the biggest gainers and losers among
166 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Judge Kevin J. Carey issued an order dated July 13, 2012,
overruling objections to the confirmation of Tribune Co. and its
debtor affiliates' Plan of Reorganization. Before it formally
emerges from bankruptcy, Tribune must still get approval from the
Federal Communications Commission on new broadcast licenses and
waivers for overlapping ownership of television stations and
newspapers in certain markets.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
TRONOX LTD: S&P Assigns 'BB' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit rating to Stamford, Conn.-based Tronox Ltd. and subsidiary
Tronox Inc. The outlook is stable.
"At the same time, we assigned our 'BB+' issue-level rating and
'2' recovery rating to the company's $700 million senior secured
term loan. These ratings reflect our expectation of substantial
(70%-90%) recovery in the event of a payment default," S&P said.
"The ratings on Tronox reflect the company's focus on the cyclical
TiO2 market, the potential for some margin contraction, and
exposure to demand variations that reflect economic growth in key
markets," said Standard & Poor's credit analyst Seamus Ryan. "The
ratings also reflect the company's good geographic diversity, its
position as the only fully vertically integrated global TiO2
producer, and our expectation that favorable industry conditions
will support operating performance and cash flow over the next
year. We characterize Tronox's business risk profile as 'fair' and
its financial risk profile as 'significant."
"Our ratings also incorporate our expectation that Tronox will
increase debt by $750 million to $1 billion before the end of 2012
to adjust its capital structure and return capital to shareholders
through dividends and share repurchases. Because demand was
somewhat weaker in the first half of 2012 than 2011, we expect
volumes to decline by at least 10% for full-year 2012 versus 2011,
leading to minimal TiO2 selling price increases in 2012. The
company's vertical integration should allow it to maintain EBITDA
margins greater than 30% despite soft volumes and rising titanium
feedstock prices. We view 2012 and 2013 as likely to be peak years
for the industry and expect pricing and EBITDA margins to regress
gradually over the next few years," S&P said.
"Financial metrics are strong for the ratings, with the key ratio
of funds from operations (FFO) to total adjusted debt of more than
60% as of March 31, 2012, before the closing of the Exxaro Mineral
Sands acquisition on June 15, 2012. Although debt will likely
increase in the near term, we expect the benefit of the
acquisition to partially offset this increase and sustain this
ratio above 30%, in line with our expectation at the rating. We
also expect free cash flow to remain near $200 million annually,
despite Tronox instituting a regular dividend and announcing $150
million in near-term share repurchases," S&P said.
"Our assessment of Tronox's business risk profile as 'fair'
reflects the company's position as the fifth-largest and only
fully vertically integrated global producer of TiO2, its good
geographic diversity, and our expectation that favorable industry
dynamics will continue over the next few years. However, the
cyclical nature of the industry, where sizeable cyclical swings
can arise from volatile demand and raw material prices, as well as
large-scale capacity additions, partially offset these strengths,"
S&P said.
"We believe the acquisition of Exxaro Mineral Sands benefits
Tronox's business risk profile. Tronox's position as a fully
integrated chloride TiO2 producer should provide significant
production cost advantages over peers, in our view. We also
believe the company should be somewhat insulated from spikes in
titanium feedstock prices, which have increased substantially over
the past several quarters and should continue to rise over the
next one to two years," S&P said.
"Although limited TiO2 production capacity has led to price
increases over the past 18 months, this has moderated in 2012
because of reduced demand as a result of weakness in Europe and
China," S&P said.
"At the same time, limited titanium feedstock capacity (arising
from underinvestment in recent years) has led to significantly
increased raw material costs, which will likely continue to
pressure margins for non-integrated or less-integrated TiO2
producers over the next year. However, Tronox's vertical
integration should allow it to maintain margins over this period.
Over the longer term, we expect demand growth to reflect the
global economy and key end markets related to the housing and
automotive sectors, as well as population growth and rising
standards of living in emerging markets," S&P said.
"The stable outlook reflects our expectation that operating
performance will support Tronox's significant financial risk
profile despite a likely increase in debt in 2012. We expect
management will maintain a prudent approach to its capital
structure and funding shareholder rewards," S&P said.
"We could raise the ratings modestly if weak volume trends turn
around and the company can resume double-digit annual TiO2 selling
price increases. In this scenario, EBITDA margins would continue
to improve and FFO to debt would increase to and remain above 40%.
We could also raise the ratings if Tronox maintains its operating
performance and does not adjust its capital structure and increase
leverage as we expect," S&P said.
"We could lower the ratings if Tronox increases leverage enough to
weaken credit measures beyond our expectations for the rating. We
could also lower the ratings if volumes continue to decline over
the next year and lead to a double-digit percentage reduction in
TiO2 selling prices without offsetting improvements in the
titanium feedstock business. In this scenario, FFO to debt could
fall below 30% without near-term prospects for improvement," S&P
said.
TXU CORP: Bank Debt Trades at 36.65% Off in Secondary Market
------------------------------------------------------------
Participations in a syndicated loan under which TXU Corp., now
known as Energy Future Holdings Corp., is a borrower traded in the
secondary market at 63.35 cents-on-the-dollar during the week
ended Friday, July 27, 2012, an increase of 2.79 percentage points
from the previous week according to data compiled by LSTA/Thomson
Reuters MTM Pricing and reported in The Wall Street Journal. The
Company pays 450 basis points above LIBOR to borrow under the
facility. The bank loan matures on Oct. 10, 2017, and carries
Moody's B2 rating and Standard & Poor's CCC rating. The loan is
one of the biggest gainers and losers among 166 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
The Company's balance sheet at Dec. 31, 2011, showed $44.07
billion in total assets, $51.83 billion in total liabilities, and
a $7.75 billion total deficit.
Energy Future had a net loss of $1.91 billion on $7.04 billion of
operating revenues for the year ended Dec. 31, 2011, compared with
a net loss of $2.81 billion on $8.23 billion of operating revenues
during the prior year.
* * *
In late January 2012, Moody's Investors Service changed the rating
outlook for Energy Future Holdings Corp. (EFH) and its
subsidiaries to negative from stable. Moody's affirmed EFH's Caa2
Corporate Family Rating (CFR), Caa3 Probability of Default Rating
(PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1
senior secured rating for Oncor.
EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed
company with limited flexibility. EFH's capital structure is
complex and, in our opinion, untenable which calls into question
the sustainability of the business model and expected duration of
the liquidity reserves.
TXU CORP: Bank Debt Trades at 32% Off in Secondary Market
---------------------------------------------------------
Participations in a syndicated loan under which TXU Corp., now
known as Energy Future Holdings Corp., is a borrower traded in the
secondary market at 68.00 cents-on-the-dollar during the week
ended Friday, July 27, 2012, an increase of 3.09 percentage points
from the previous week according to data compiled by LSTA/Thomson
Reuters MTM Pricing and reported in The Wall Street Journal. The
Company pays 350 basis points above LIBOR to borrow under the
facility. The bank loan matures on Oct. 10, 2014, and carries
Standard & Poor's CCC rating. The loan is one of the biggest
gainers and losers among 166 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
The Company's balance sheet at Dec. 31, 2011, showed $44.07
billion in total assets, $51.83 billion in total liabilities, and
a $7.75 billion total deficit.
Energy Future had a net loss of $1.91 billion on $7.04 billion of
operating revenues for the year ended Dec. 31, 2011, compared with
a net loss of $2.81 billion on $8.23 billion of operating revenues
during the prior year.
* * *
In late January 2012, Moody's Investors Service changed the rating
outlook for Energy Future Holdings Corp. (EFH) and its
subsidiaries to negative from stable. Moody's affirmed EFH's Caa2
Corporate Family Rating (CFR), Caa3 Probability of Default Rating
(PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1
senior secured rating for Oncor.
EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed
company with limited flexibility. EFH's capital structure is
complex and, in our opinion, untenable which calls into question
the sustainability of the business model and expected duration of
the liquidity reserves.
UNI-PIXEL INC: Begins First Shipments of Diamond Guard
------------------------------------------------------
UniPixel, Inc., has completed the production-level qualification
of its Diamond Guard Hard Coat film with its manufacturing and
distribution partner, Carestream Tollcoating.
With Carestream, UniPixel has established the capacity to support
large-scale volume production of more than 100 million square feet
per year of Diamond Guard as either a cover glass replacement or
protective cover film. UniPixel has now been able to fulfill a
number of purchase orders for pilot production rolls submitted by
major electronic OEMs, ODMs and film converters that are advancing
product designs which take advantage of the unique characteristics
of Diamond Guard.
Diamond Guard was designed to offer superior performance as a low
cost substitute for glass, including Gorill Glass. Diamond Guard
is super hard-rated 6H or higher-making it shatterproof and highly
resistant to scratching. However, it is also very thin, light and
flexible, with a glass-equivalent gloss finish. Diamond Guard is
less labor-intensive to utilize than glass, and unlike glass, it
is available in large rolls that can be die-cut or laser-cut to
size. The large roll format can also save manufacturing costs in
that it allows direct printing of roll-to-roll graphics (bezels,
logos, multi-color borders, etc.) for consumer electronics
aesthetics, and unlike glass, it does not require special surface
treatment for inks to adhere.
These characteristics make Diamond Guard ideal for a wide range of
applications, but especially as a cover glass replacement or
protective cover film for any electronic display, from small
mobile devices to large screen televisions.
"We believe Diamond Guard outperforms other cover glass and
protective cover films on the market today, and this large-volume
certification allows us to begin widespread commercialization,"
noted UniPixel CEO Reed Killion. "Carestream is not only our
manufacturing partner they are also the global master distributor
for Diamond Guard. So, we plan to fully leverage Carestream's
strong manufacturing and distribution platform to address the
increasing interest in our protective cover films."
Carestream Tollcoating is a premium provider of high-precision
contract coating services and optical grade PET film, specializing
in the application of aqueous and solvent coatings on flexible
substrates for imaging, printed electronics, display, electronic
component, nanotechnology, battery, and a variety of other
flexible advanced material markets. Carestream's global logistics
network, with supply chain management and distribution
capabilities in 56 countries, offers worldwide end-to-end service
from high precision coating through post-manufacturing.
UniPixel has received interest from OEMs and ODMs to combine
Diamond Guard with its UniBoss touch sensor to produce a thinner,
more cost effective touch screen display. UniPixel's functional
prototypes have demonstrated that laminating Diamond Guard with
UniBoss eliminates the need for protective cover glass or sensor
glass. As a combined solution, this offers better than one-fifth
the thickness of current touch screen displays on the market and
at a highly competitive cost. So, the company anticipates UniBoss
could be a significant growth driver for Diamond Guard in 2013.
UniPixel also recently announced plans to release a UniBoss
product with ultra-thin conductive elements on film surfaces that
are printed in a range of grid patterns and sizes. These varying
grid patterns can be laminated together to create resistive touch
as well as a pro-cap touch sensors that utilize the existing
modular supply chain. The stand-alone grid can also be used for
electromagnetic interference shielding. Along with the
performance benefits of being flexible and more conductive than
ITO, variable grid patterns enable a wider variety of applications
in the flexible electronic film market, including very large
format applications and multi-gesture touchpads.
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
The Company reported a net loss of $8.57 million in 2011 and a
net loss of $3.82 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$6.97 million in total assets, $101,694 in total liabilities, and
$6.87 million in total shareholders' equity.
UNI-PIXEL INC: No Longer Considers Raptor Funds as Affiliates
-------------------------------------------------------------
Uni-Pixel, Inc., informed the U.S. Securities and Exchange
Commission that it has ceased to treat The Raptor Global Portfolio
Liquidating Trust and The Altar Rock Fund Liquidating Trust as
affiliates.
Uni-Pixel, on Feb. 13, 2007, entered into a Securities Purchase
Agreement with The Raptor Global Portfolio Ltd, The Altar Rock
Fund L.P. and The Tudor BVI Global Portfolio L.P. pursuant to
which the Company sold to the Series B Investors 3,200,000 shares
of its Series B Convertible Preferred Stock and warrants to
purchase, in aggregate, up to 455,954 shares of the Company's
common stock for a purchase price of $12,000,000. In conjunction
with this offering, the Series B Investors were permitted to
appoint two members to the Company's Board of Directors. As a
result of this transaction and because The Raptor Global Portfolio
Ltd. and The Altar Rock Fund L.P. were controlled by the same
individuals and together appointed two members to the Company's
Board of Directors, the Company concluded that they were
affiliates.
The Series B Investors reorganized in 2008, which resulted in a
transfer of the securities held by the Raptor Funds to their
successors. The designees appointed to the Board by the Series B
Investors resigned from the Board on April 3, 2009. No one was
appointed to replace them.
Subsequent to Jan. 1, 2009, the Raptor Funds transferred ownership
of their common stock and warrants to The Raptor Global Portfolio
Liquidating Trust and The Altar Rock Fund Liquidating Trust,
respectively, and The Tudor BVI Global Portfolio L.P. transferred
its ownership in the common stock and warrants to Legacy Asset
Portfolio L.P.
On Nov. 4, 2009, the Company entered into an Amended and Restated
Conversion Agreement with the Series B Investors, pursuant to
which these security holders exchanged the Series B Convertible
Preferred Stock and their warrants for 1,365,688 shares of common
stock and warrants to purchase, in the aggregate, up to 525,454
shares of common stock.
While various documents the Company has filed with the SEC treated
the securities held by the Raptor Funds as held by the Company's
affiliates, the Company believes that the Raptor Funds ceased to
be affiliates in April 2009. Since that date, although the Raptor
Funds, or their successors, The Raptor Global Portfolio
Liquidating Trust and The Altar Rock Fund Liquidating Trust,
collectively owned approximately 19% of the Company's outstanding
common stock, they have had no representation on the Company's
Board of Directors, no relationship with the Company other than
through their ownership of the Company's common stock, and no
approval or veto power over any transaction in which the Company
may engage distinct from their right, like the Company's other
stockholders, to vote their shares of common stock, and the
Company has not needed their votes to meet the quorum requirements
for a stockholders meeting or to approve proposals put before the
Company's stockholders.
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
The Company reported a net loss of $2.04 million on $3,564 of
revenue for the three months ended March 31, 2012. The Company
reported a net loss of $8.57 million in 2011 and a net loss of
$3.82 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$6.97 million in total assets, $101,694 in total liabilities, and
$6.87 million in total shareholders' equity.
UNI-PIXEL INC: Amends Form S-3 Registration Statement
-----------------------------------------------------
Uni-Pixel, Inc., filed with the U.S. Securities and Exchange
Commission a post-effective amendment no.1 to Form S-3 relating to
one or more offerings of up to $50,000,000 in any combination of
common stock, preferred stock and warrants. Also, the prospectus
relates to the offer of The Raptor Global Portfolio Liquidating
Trust, The Altar Rock Fund Liquidating Trust, Legacy Asset
Portfolio L.P. and Merrill Lynch Pierce, Fenner & Smith
Incorporated to sell up to 2,462,058 shares of common stock.
On May 24, 2012, Uni-Pixel filed with the SEC a Form S-3 which the
SEC declared effective on June 8, 2012. No shares registered by
the Registration Statement have been sold as of July 20, 2012.
The Amendment was filed to reflect the Company's determination
that The Raptor Global Portfolio Liquidating Trust and The Altar
Rock Fund Liquidating Trust are not "affiliates" of the Company,
including for purposes of calculating the aggregate market value
of the Company's outstanding common stock held by non-affiliates,
and to provide information included in the Registration Statement
as of a more current date as of the filing of this Amendment with
the SEC.
A copy of the amended prospectus is available for free at:
http://is.gd/oA429M
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
The Company reported a net loss of $2.04 million on $3,564 of
revenue for the three months ended March 31, 2012. The Company
reported a net loss of $8.57 million in 2011 and a net loss of
$3.82 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$6.97 million in total assets, $101,694 in total liabilities, and
$6.87 million in total shareholders' equity.
UNIVERSAL AMERICAN: A.M. Best Affirms 'bb' Issuer Credit Rating
---------------------------------------------------------------
A.M. Best Co. has revised the outlook to stable from negative and
affirmed the issuer credit rating (ICR) of "bb" of Universal
American Corp. (Rye Brook, NY) [NYSE: UAM].
A.M. Best also has revised the outlook to stable from negative and
affirmed the financial strength rating (FSR) of B++ (Good) and
ICRs of "bbb" of American Progressive Life & Health Insurance
Company of New York (American Progressive) (Rye Brook, NY) and The
Pyramid Life Insurance Company (Pyramid Life) (Overland Park, KS).
Additionally, A.M. Best has affirmed the FSR of B+ (Good) and ICRs
of "bbb-" of American Pioneer Life Insurance Company (American
Pioneer) (Lake Mary, FL), Constitution Life Insurance Company
(Constitution Life), Marquette National Life Insurance Company
(Marquette National) and Union Bankers Insurance Company (Union
Bankers). The outlook for these ratings is stable. At the same
time, A.M. Best has revised the outlook to positive from stable
and affirmed the FSR of B+ (Good) and ICR of "bbb-" of SelectCare
of Texas, LLC.
Concurrently, A.M. Best has affirmed the FSR of B (Fair) and ICR
of "bb+" of Today's Options of Oklahoma, Inc. (Today's Options)
(Oklahoma City, OK). The outlook for both ratings is stable. The
above companies are subsidiaries of Universal American and are
domiciled in Houston, TX, unless otherwise specified.
The revised outlook and ICR affirmation for Universal American
reflects its favorable near-term operating results, low financial
leverage and good liquidity. Universal American's overall
operating results and margins have shown improvement through
lowered loss ratios and decreased administrative expenses through
the first quarter of 2012. The company's net loss reported in
2011 was primarily associated with discontinued operations from
its Medicare Part D business, which was sold during the year.
Universal American's debt-to-capital ratio was 15.3% at March 31,
2012, which is considered low as compared to its peers, and
earnings before interest and taxes interest coverage is projected
to be very good at over 20 times. Universal American has a good
level of liquidity from parent company cash, dividends from
subsidiaries and an untapped $75 million revolving credit
agreement.
Offsetting rating factors include Universal American's declining
premium revenue and increased business concentration risk.
Premiums for Universal American have declined significantly over
the last two years due to the sale of its Medicare Part D business
and enrollment losses due to the discontinuation of Medicare
Private-Fee-for-Service products in geographies deemed to be non-
core. Additionally, new sales in its Medicare Advantage business
was hindered during the last open enrollment period due to a late
release from Centers for Medicare and Medicaid Services (CMS)
sanctions. Universal American business is now highly concentrated
in Medicare Advantage products. The downward trend in Medicare
Advantage funding could pressure margins.
The rating affirmations for American Progressive and Pyramid Life
reflect their role as core subsidiaries of Universal American. On
a consolidated basis, these entities continue to generate over
half of the organization's revenue and service approximately two-
thirds of its Medicare Advantage enrollment. The revised outlook
is due to positive near-term operating results and improved
capitalization. Operating results for these entities have
consistently been positive, and margins are showing improvement
through 2011. Operations are expected to remain profitable for
2012. American Progressive and Pyramid Life's favorable operating
results, along with the decline in business risk, have resulted in
a strengthening of their risk-adjusted capitalization.
The rating affirmations for American Pioneer, Constitution Life,
Marquette National and Union Bankers recognize their contributions
to the overall business profile of the organization through
product and rate flexibility.
The revised outlook and rating affirmations for SelectCare of
Texas acknowledge its strong operating results and high level of
risk-adjusted capital. The rating affirmations for Today's
Options reflects its strategic role in Universal American's core
Medicare Advantage operations and continued support by Universal
American.
Positive rating actions could occur if Universal American records
significant premium growth while maintaining strong capitalization
in its insurance subsidiaries and if these entities' businesses
become more diversified through product, market segment or
geographic expansion. Negative rating actions could occur if
Universal American reports significant operating losses in its
core Medicare Advantage business, experiences a drastic decline in
risk-adjusted capital at its insurance subsidiaries or is unable
to resume enrollment and premium growth.
VANN'S INC: Major Lender Cuts Credit Line
-----------------------------------------
Jenna Cederberg at the Missoulian reports that, just a month after
bringing in an outside chief executive officer to help restructure
its operations, Vann's Inc. has lost a credit line from a major
lender.
According to the report, the retailer's CEO, Jerry McConnell, said
the company is now searching hard to find a lender to replace the
credit line and help it avoid filing for bankruptcy. In the
meantime, operations will continue as usual and no employees will
be affected, he said.
"As a customer you wouldn't know any different. Operations will
continue as is going forward and it won't be disruptive in any
way. . . . It will be a lot of internal work," the report quotes
Mr. McConnell as saying. That internal work includes "working
with local lenders while evaluating restructuring opportunities.
This includes restructuring its financial obligation through
Chapter 11 of the Bankruptcy Code," according to a news release
from Vann's.
The report relates Mr. McConnell said the company has not yet
filed for bankruptcy. Mr. McConnell, a professional business
consultant who often helps restructure businesses that fall on
hard times, took over from former Vann's CEO George Manlove in
mid-June. Mr. Manlove remained at Vann's as an adviser and member
of the board of directors.
The report relates Mr. McConnell said the best-case scenario for
Vann's is that a new line of credit is secured with a willing
partner. Mr. McConnell is hopeful that another credit line will
be secured within several days. "Finalizing these things is
always a challenge. But we will get it done," he said.
Worst-case scenario is filing for protection under Chapter 11
bankruptcy. "On the other hand, it shelters you from obligations
while you have a chance to recover," the report quotes Mr.
McConnell as stating.
The report adds Missoula investment adviser Bob Seidenschwarz said
this news doesn't mean Vann's is going out of business, but it's a
red flag for a major Montana company.
According to the report, losing a major line of credit hurts a
company's ability to do business. In Vann's case, it curtails the
amount of goods it can acquire to sell, Mr. Seidenschwarz said,
adding that securing another line of credit will likely be more
expensive -- and that affects business plans.
Vann's Inc. operates a home electronics & online appliance store.
VOICE ASSIST: Inks Software Development Contract with Augme
-----------------------------------------------------------
Voice Assist, Inc., entered into a Custom Software Development
Contract with Augme Technologies, Inc. Pursuant to the Software
Agreement, Augme will pay the Company a one-time integration fee
of $200,000 for the Company to integrate Augme's HipCricket AD
LIFE Platform within the Company's existing services. The Company
will retain all ownership of the integration within its platform.
The Software Agreement will remain in effect until it is
terminated in accordance with its terms or by Augme upon 30 days'
prior written notice to the Company, but that termination will not
relieve Augme of its obligation to pay the Integration Fee. The
Company may terminate the Software Agreement at any time if Augme
materially breaches the Software Agreement.
Concurrently with the Software Agreement, the Company entered into
a non-exclusive Advertising Agreement with Augme. Pursuant to the
Advertising Agreement, the Company will publish Augme's
advertisements utilizing the Company's services. Both the Company
and Augme will share in any revenue generated from advertisements
published under this Advertising Agreement. The Advertising
Agreement will remain in force and effect for an initial term of
two years and will automatically renew after expiration of the
initial term for additional successive renewal periods of one year
each. In the event of a breach by Augme of any of its obligations
under the Advertising Agreement, the Company may terminate the
Advertising Agreement immediately upon written notice to Augme.
In the event of a breach by the Company of any of its obligations
under the Advertising Agreement, Augme may terminate the
Advertising Agreement upon 30 days prior written notice to the
Company.
Private Placement
On May 22, 2012, Voice Assist consummated a private placement of
its equity securities with 12 accredited investors pursuant to a
unit subscription and purchase agreement for total consideration
of $800,000. The investors purchased units of the Company's
securities at $0.15 per unit. Each unit consisted of one share of
the Company's common stock and a callable warrant to purchase one
share of the Company's common stock. The aggregate units
purchased in the Financing consisted of 5,333,333 shares of common
stock and callable warrants to purchase up to an additional
5,333,333 shares of the Company's common stock. The callable
warrants have a term of five years and have an exercise price of
$0.50 per share of common stock. Pursuant to the terms of the
Warrant, the Company has the following call rights:
(i) the Company may call up to 1/3 of the original number of
shares issuable upon exercise of the Warrant after the
Company's common stock closing bid reported by Bloomberg LP
remains at an amount over $1.00 per share for at least 10
consecutive trading days and at least 100,000 shares have
traded on each of such 10 consecutive trading days;
(ii) the Company may call up to 2/3 of the original number of
shares issuable upon exercise of the Warrant after the
Company's common stock closing bid reported by Bloomberg LP
remains at an amount over $1.50 per share for at least 10
consecutive trading days and at least 100,000 shares have
traded on each of such 10 consecutive trading days; and
(iii) the Company may call up to 100% of the original number of
shares issuable upon exercise of the Warrant, less any
amount exercised pursuant to (i) and (ii), after the
Company's common stock closing bid reported by Bloomberg LP
remains at an amount over $2.00 per share for at least 10
consecutive trading days and at least 100,000 shares have
traded on each of such 10 consecutive trading days.
In connection with the Financing, the Company also entered into a
registration rights agreement with each investor pursuant to which
the Company will file, and cause to become effective with the
Securities and Exchange Commission, a registration statement
covering the resale of all 5,333,333 shares of the Company's
common stock and the 5,333,333 shares of the Company's common
stock underlying the Warrants sold in the Financing.
The Company will use the proceeds of the Financing for the payment
of auditing expenses, legal fees, operating expenses, supplies,
and general working capital.
About Voice Assist
Lake Forest, Calif.-based Voice Assist, Inc., operates a cloud-
based speech recognition platform that supports speech recognition
based enterprise services such as Customer Relationship Management
(CRM), field force automation, as well as direct-to-enterprise
services such as virtual assistants that unify communications and
direct-to-consumer "safe driving" services that allow SMS, email,
and social media messaging through a single personal phone number.
In the auditors' report accompanying the annual report for the
year ended Dec. 31, 2011, Mantyla McReynolds LLC, in Salt Lake
City, Utah, expressed substantial doubt about Voice Assist's
ability to continue as a going concern. The independent auditors
noted that the Company has working capital deficits and has
incurred losses from operations and negative operating cash flows
during the years ended Dec. 31, 2011, and 2010.
The Company reported a net loss of $10.24 million on $872,010 of
revenues for 2011, compared with a net loss of $1.30 million on
$1.26 million of revenues for 2010.
The Company's balance sheet at March 31, 2012, showed
$1.05 million in total assets, $3.22 million in total liabilities,
and a $2.17 million total stockholders' deficit.
W.R. GRACE: Has $69.3 Million Net Income in Second Quarter
----------------------------------------------------------
W. R. Grace & Co. on July 25, 2012, reported second quarter net
income of $69.3 million, or $0.90 per diluted share. Net income
for the prior-year quarter was $75.8 million, or $1.00 per diluted
share. Adjusted EPS of $1.14 per diluted share increased 2.7%
from $1.11 per diluted share for the prior-year quarter.
Grace also disclosed that it had $2.234 billion in current assets
and $618.0 million in current liabilities as of June 30, 2012.
The Company further disclosed $4.555 billion in total assets,
$288.6 million in total equity, and $4.266 billion in total
liabilities as of June 30, 2012.
Net income for the six months ended June 30, 2012, was $130.2
million, or $1.70 per diluted share, compared with $130.0 million,
or $1.72 per diluted share for the prior-year period. Adjusted
EPS of $2.02 per diluted share increased 7.4% from $1.88
per diluted share for the prior-year period.
"I am pleased with our performance this quarter, particularly our
overall pricing and volume growth, and the sequential margin
improvements we targeted and achieved in our Materials
Technologies and Construction Products operating segments," said
Fred Festa, Grace's Chairman and Chief Executive Officer.
"Despite renewed headwinds from Europe, we affirm our outlook for
Adjusted EBIT. We remain confident in our ability to move our
business forward, and we are prepared to deliver another year of
solid earnings growth."
Second Quarter Results
Second quarter sales of $826.7 million were unchanged compared
with the prior-year quarter as improved base pricing (+4.7%) and
higher sales volumes (+2.7%) were offset by unfavorable currency
translation (-4.3%) and lower rare earth surcharges (-3.1%).
Sales in emerging regions represented 36.3% of sales and grew
13.3% compared with the prior-year quarter.
Gross profit of $304.1 million was unchanged compared with the
prior-year quarter as improved pricing and productivity were
offset by higher raw material costs and higher manufacturing
costs. Gross margin of 36.8% decreased 10 basis points compared
with the prior-year quarter and increased 10 basis points
sequentially from the 2012 first quarter.
Adjusted EBIT of $143.6 million increased 8.1% compared with
$132.8 million in the prior-year quarter. The increase primarily
was due to higher segment operating income in Construction
Products, lower incentive compensation expense, and lower
corporate expenses driven by expense control efforts and the
previously announced restructuring initiatives. Adjusted EBIT
margin improved to 17.4% compared with 16.1% in the prior-year
quarter.
Adjusted EBIT Return On Invested Capital was 36.3% on a trailing
four-quarter basis, compared with 30.2% for the prior-year
quarter. The increase in Adjusted EBIT Return On Invested Capital
primarily was due to higher earnings and good working capital
management.
Six Month Results
Sales for the six months ended June 30, 2012, increased 3.9% to
$1.581 billion as improved base pricing (+5.4%) and higher sales
volumes (+2.2%) partially were offset by unfavorable currency
translation (-3.0%) and lower rare earth surcharges (-0.7%).
Sales in emerging regions represented 34.9% of sales and grew
13.7% compared with the prior-year period.
Gross profit of $581.2 million increased 4.3% compared with the
prior-year period primarily due to improved pricing and
productivity. Gross margin of 36.8% increased 20 basis points
compared with the prior-year period.
Adjusted EBIT was $254.9 million, an increase of 11.6% compared
with the prior-year period. The improvement in Adjusted EBIT was
due to improved pricing, increased sales volumes, lower incentive
compensation expense and disciplined expense control.
Catalysts Technologies
Sales down 1.9%; segment operating income down 1.6%
Second quarter sales for the Catalysts Technologies operating
segment, which includes specialty catalysts and additives for
refinery, plastics and other chemical process applications, were
$328.6 million, a decrease of 1.9% compared with the prior-year
quarter. The decrease was due to lower rare earth surcharges
(-7.7%) and unfavorable currency translation (-4.2%), which more
than offset improved base pricing (+7.9%) and increased sales
volumes (+2.1%).
Sales of FCC catalysts decreased as lower rare earth surcharges,
unfavorable currency translation and lower sales volumes were
partially offset by higher base pricing. Sales volumes declined
approximately 2% compared with the prior-year quarter, but
increased approximately 7% from the 2012 first quarter due to
higher emerging region sales. Several refineries have closed
during the last 12 months, reducing Grace's sales volumes in the
quarter by approximately $12 million or more than 4% of product
line sales. The company expects this capacity to be replaced by
more economically efficient refineries in emerging regions.
Sales of polyolefin and chemical catalysts increased compared with
the prior-year quarter as a double-digit increase in sales volumes
and price partially was offset by unfavorable currency
translation. Sales increased approximately 25% sequentially
driven by strong polyethylene catalyst demand and continued growth
of new polypropylene catalyst products.
Segment gross profit was $132.9 million, a decrease of 3.7%
compared with the prior-year quarter. Segment gross margin was
40.4% compared with 41.2% in the prior-year quarter and 42.0% in
the 2012 first quarter. The decrease in gross margin primarily
was due to unabsorbed manufacturing costs resulting from the
scheduled maintenance turnarounds at two of Grace's major
manufacturing facilities. In anticipation of these turnarounds,
the company built inventory in the 2012 first quarter that was
liquidated during the second quarter.
Segment operating income was $100.3 million compared with $101.9
million in the prior-year quarter, a 1.6% decrease. Segment
operating margin was 30.5%, an improvement of 10 basis points
compared with the prior-year quarter and a decrease of 120 basis
points sequentially.
Materials Technologies
Sales down 4.0%; segment operating income up 5.9%
Second quarter sales for the Materials Technologies operating
segment, which includes packaging technologies and engineered
materials for consumer, industrial, coatings and pharmaceutical
applications, were $224.3 million, a decrease of 4.0% compared
with the prior-year quarter. The decrease was due to unfavorable
currency translation (-5.1%) and lower sales volumes (-1.3%)
partially offset by improved pricing (+2.4%).
Packaging sales decreased compared with the prior-year quarter as
strong demand in Asia and the Americas was offset by weaker
European volumes and unfavorable currency translation. Engineered
materials sales decreased due to unfavorable currency translation
and lower sales volumes from demand weakness in mature markets,
which more than offset increased sales volumes in Asia.
Segment gross profit was $75.1 million compared with $78.6 million
in the prior-year quarter, a 4.5% decrease primarily due to lower
sales volumes. Segment gross margin was 33.5% compared with 33.6%
in the prior-year quarter and 31.8% in the 2012 first quarter.
The sequential increase of 170 basis points in gross margin
reflected the impact of operational initiatives and cost reduction
efforts launched in the 2012 first quarter.
Segment operating income was $46.4 million, an increase of 5.9%
compared with the prior-year quarter. Segment operating margin
was 20.7% compared with 18.7% in the prior-year quarter and 16.9%
in the 2012 first quarter.
Construction Products
Sales up 6.2%; segment operating income up 19.9%
Second quarter sales for the Construction Products operating
segment, which includes specialty construction chemicals products
and specialty building materials products used in commercial,
infrastructure and residential construction, were $273.8 million,
an increase of 6.2% compared with the prior-year quarter. The
increase was due to higher sales volumes (+7.5%) and improved
pricing (+2.7%), partially offset by unfavorable currency
translation (-4.0%). Last year's third quarter acquisition of De
Neef Conchem Group contributed $8.8 million to sales, which more
than offset a $5.3 million decrease in sales due to the 2011
divesture of the vermiculite business.
Sales of Construction Products in emerging regions, which
represented 33.3% of sales, increased 12.2% compared with the
prior-year quarter due to strong sales in emerging Asia, Latin
America and the Middle East. Sales in North America, which
represented 41.5% of sales, increased 10.2%. Western Europe,
which represented 15.4% of sales, declined 13.6% compared with the
prior-year quarter.
Segment gross profit was $96.2 million, an increase of 9.4%
compared with the prior-year quarter. Segment gross margin of
35.1% improved 100 basis points compared with the prior-year
quarter and 90 basis points sequentially from the 2012 first
quarter. The increase in gross margin compared with the prior-
year quarter primarily was due to improved pricing, higher sales
volumes and a favorable sales mix comparison between the acquired
and divested businesses.
Segment operating income of $35.5 million increased 19.9% compared
with the prior-year quarter primarily due to higher sales and
improved gross margin. Segment operating margin improved to 13.0%
compared with 11.5% in the prior-year quarter and 9.0% in the 2012
first quarter.
Other Expenses
Total corporate expenses were $21.8 million for the second
quarter, a decrease of 20.4% compared with the prior-year quarter
and a decrease of 14.2% from the 2012 first quarter. Lower
corporate expenses primarily were due to lower incentive
compensation accruals and restructuring initiatives announced in
the first quarter of 2012.
Defined benefit pension expense for the second quarter was $16.8
million compared with $15.1 million for the prior-year quarter.
The 11.3% increase primarily was due to year-over-year
changes in actuarial assumptions including lower discount rates
and a lower expected long-term rate of return on plan assets.
Interest expense was $11.3 million for the second quarter compared
with $11.0 million for the prior-year quarter. The annualized
weighted average interest rate on pre-petition obligations for the
second quarter was 3.5%.
Income Taxes
Income taxes are recorded at a global effective tax rate of
approximately 33.5% before considering the effects of
certain non-deductible Chapter 11 expenses, changes in uncertain
tax positions and other discrete adjustments.
Grace has not had to pay U.S. Federal income taxes in cash in
recent years since available tax deductions and credits have fully
offset U.S. taxable income. Income taxes in foreign jurisdictions
are generally paid in cash. Grace expects to generate significant
U.S. Federal net operating losses upon emergence from bankruptcy.
Income taxes paid in cash, net of refunds, were $30.4 million
during the six months ended June 30, 2012, or approximately 15.4
percent of income before income taxes.
Cash Flow
Net cash provided by operating activities for the six months ended
June 30, 2012, was $115.1 million compared with a use of cash of
$72.3 million in the prior-year period. The improved cash flow
primarily was due to lower pension contributions and improved
working capital performance.
Adjusted Free Cash Flow was $146.6 million for the six months
ended June 30, 2012, compared with $59.6 million in the prior-year
period.
2012 Outlook
As of July 25, 2012, Grace affirmed its outlook for 2012 Adjusted
EBIT in the range of $510 million to $530 million, up 6% to 11%
compared with 2011 Adjusted EBIT of $478.6 million. The company
expects 2012 Adjusted EBITDA in the range of $630 million to $650
million.
The following updated assumptions are components of Grace's 2012
outlook:
* Consolidated sales in the range of $3.1 billion to $3.2
billion, reflecting improved sales volumes and base
pricing, offset by lower rare earth surcharges and
unfavorable currency translation of approximately $175
million and $125 million, respectively.
* Consolidated gross margin in the high end of the 35-37%
target range with raw material inflation expected to
moderate in the second half of 2012;
* An average euro exchange rate of $1.22 for the remainder
of the year, compared with an average of $1.38 for the
second half of 2011.
* Pension expense of approximately $72 million for the full
year, compared with $63 million for 2011; and,
* An effective tax rate of 33.5% and a cash tax rate
of 14.0%.
The company continues to project an atypical quarterly earnings
pattern for the year and now expects the third quarter to be
weaker than the second and fourth quarters.
Grace is unable to make a reasonable estimate of the income
effects of the consummation of the Joint Plan of Reorganization
(the "Plan") because the value of certain consideration payable to
the asbestos trusts under the Plan (primarily the deferred
payments and the warrant) will not ultimately be determined until
the effective date of the Plan, the timing of which is uncertain.
When the Plan is consummated, Grace expects to reduce its
liabilities subject to compromise, including asbestos-related
contingencies, recognize the value of the deferred payments and
the warrant and recognize expense for the costs of consummating
the Plan and the income tax effects of these items.
Chapter 11 Proceedings
On April 2, 2001, Grace and 61 of its United States subsidiaries
and affiliates, including its primary U.S. operating subsidiary,
W. R. Grace & Co.-Conn., filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware in order to resolve Grace's asbestos-related liabilities.
On January 31, 2011, the Bankruptcy Court issued an order
confirming Grace's Joint Plan of Reorganization. On January 31,
2012, the United Stated District Court issued an order affirming
the Plan, which was reaffirmed on June 11, 2012 following a motion
for reconsideration. Eight parties filed notices of appeal with
the Third Circuit Court of Appeals before the July 11, 2012
deadline.
On June 5, 2012, the Bankruptcy Court approved agreements among
Grace, co-proponents of the Plan, BNSF railroad, several insurance
companies and the representatives of Libby asbestos personal
injury claimants, to settle certain objections to the Plan. In
connection with this settlement, the company agreed to pay $19.5
million to transfer the Libby Medical Program to an independent
entity in Montana. Pursuant to the agreements, the Libby
claimants and BNSF will withdraw their appeals to the Plan when
these settlements become effective.
The timing of Grace's emergence from Chapter 11 will depend on the
satisfaction or waiver of the remaining conditions set forth in
the Plan. Grace and its co-proponents are evaluating the appeals
to the Plan and whether Grace will emerge from Chapter 11 prior to
the resolution of such appeals.
The Plan sets forth how all prepetition claims and demands against
Grace will be resolved.
Investor Call
Grace discussed these results during an investor conference call
and webcast on July 25, 2012.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the
Bankruptcy Court to approve the definitive agreements among
itself, co-proponents of the Plan, BNSF railroad, several
insurance companies and the representatives of Libby asbestos
personal injury claimants, to settle objections to the Plan.
Pursuant to the agreements, the Libby claimants and BNSF would
forego any further appeals to the Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Settles U.S. Claims Over Weedsport Site
---------------------------------------------------
W.R. Grace & Co. and its affiliates seek authority from Judge
Judith Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware to enter into an Administrative Settlement Agreement and
Order on Consent for a Removal Action, or the AOC, relating to the
Weedsport, New York, Superfund Site. The AOC resolves the claims
of the United States of America related to the Site.
On March 23, 2003, the Government filed Claim Nos. 9634 and 9635
against the Debtors W. R. Grace & Co. and Kootenai Development
Company. The Proofs of Claim expressly reserved the Claimant's
right to amend them for any "subsequently discovered liabilities."
The Weedsport Site is located in the Village of Weedsport, Town of
Brutus, Cayuga County, in New York. The property on which the
Site is located is currently owned and managed by Scott Estelle,
and was previously owned by his father, C. Frank Estelle. The
portion of the Site subject to the proposed removal activities
comprises approximately four to five acres.
In 1963, Grace entered into an agreement with Mr. Estelle to lease
the Site. Grace operated the Site as a vermiculite expanding
plant, using an existing processing building to expand between
81,000 and 145,000 tons of vermiculite concentrate that originated
from Grace's Libby, Montana mine. Some of the vermiculite may
have contained asbestos.
In June 2006, the U.S. Environmental Protection Agency conducted
air sampling inside the former processing building at the Site,
and detected asbestos. In October 2010, EPA collected outdoor air
and soil samples at the Site, which were analyzed for the presence
of asbestos based upon EPA's national framework for evaluating
asbestos at Superfund sites. Asbestos was found in the soil.
The Debtors and the EPA have subsequently cooperated in preparing
the AOC. The EPA estimates that it will cost approximately $3.9
million to perform the remedial actions at the Weedsport Site
contemplated by the AOC. The Debtors estimate that they will be
able to perform the work for less than $3.9 million.
The Debtors have also agreed under the AOC to pay $234,038 to the
EPA for its Past Response Costs incurred through December 31,
2011. Consistent with the previously approved EPA Multi-Site
Agreement Resolving the United States' Proofs of Claim Regarding
Certain Environmental Matters, the Debtors' obligation to pay the
EPA's Past Response Costs is in the form of an Allowed General
Unsecured Claim.
The AOC further provides that the Debtors will pay EPA's Future
Response Costs, which includes all direct and indirect costs
incurred by EPA that are not included in the EPA's Past Response
Costs.
In return for the obligations to be assumed by the Debtors under
the AOC, the Government will provide the Debtors with a covenant
not to sue for matters addressed under the AOC. Additionally, and
also pursuant to the terms of the AOC and the EPA Multi-Site
Agreement, once the EPA issues a Notice of Completion of Work and
the Debtors pay all Response Costs and other amounts required to
be paid under the AOC, the Weedsport Site removal action will be
considered a general unsecured claim that has been liquidated in
the amount of $0, and to which the discharge under Section 1141 of
the Bankruptcy Code will apply.
A hearing on the Debtors' request will be held on August 27, 2012.
Objections are due on August 10.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the
Bankruptcy Court to approve the definitive agreements among
itself, co-proponents of the Plan, BNSF railroad, several
insurance companies and the representatives of Libby asbestos
personal injury claimants, to settle objections to the Plan.
Pursuant to the agreements, the Libby claimants and BNSF would
forego any further appeals to the Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Anderson Fails to Win Plan Relief in Dist. Court
------------------------------------------------------------
District Judge Ronald L. Buckwalter denied Anderson Memorial
Hospital's request for relief from Judge Buckwalter's memorandum
opinion and order affirming the confirmation of W.R. Grace's Joint
Plan of Reorganization dated January 30, 2012.
The Appellees/Plan Proponents and Judge Alexander M. Sanders, Jr.,
the future claimants representative for asbestos-related property
damage claims, objected to Anderson's request. The Plan
Proponents are the Debtors, Official Committee of Asbestos
Personal Injury Claimants, Asbestos PI Future Claimants'
Representative and Official Committee of Equity Security Holders.
Judge Sanders is the legal representative for Future Asbestos-
Related Property Damage Claimants and Holders of Demands.
Judge Buckwalter noted that the procedural vehicle Anderson
utilizes to seek relief -- Fed. R. Civ. Proc. 60(b) -- is
generally inapplicable in appellate bankruptcy proceedings. He
opined that although Rule 9024 of the Federal Rules of Bankruptcy
Procedure makes Rule 60 applicable to cases arising under the
Bankruptcy Code, Rule 60 generally only applies to judgments or
orders of the bankruptcy court, and not to judgments or orders of
a district court exercising appellate jurisdiction in a bankruptcy
case, citing Aycock v. Eaton (In re Eichelberger), 943 F.2d 536,
538 n.3 (5th Cir. 1991).
Judge Buckwalter said that to allow Anderson's request would serve
only to prolong and complicate an immensely complex and drawn out
bankruptcy appeal. At this point in time, he added, Grace's
bankruptcy is already docketed and pending review by the Third
Circuit, and there is nothing preventing Anderson from raising the
concerns it presently asserts on appeal.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the
Bankruptcy Court to approve the definitive agreements among
itself, co-proponents of the Plan, BNSF railroad, several
insurance companies and the representatives of Libby asbestos
personal injury claimants, to settle objections to the Plan.
Pursuant to the agreements, the Libby claimants and BNSF would
forego any further appeals to the Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Proposes Grant Thornton as Tax Advisor
--------------------------------------------------
W.R. Grace & Co. and its affiliates seek the Court's authority to
employ Grant Thornton LLP as their tax and accounting advisor,
nunc pro tunc to July 1, 2012, pursuant to the terms of the
parties' engagement letter dated as of June 8, 2012.
Grant has been employed as an ordinary course professional,
providing general tax and advisory consulting services, since
approximately June 2002. Through the quarter ending on June 30,
2012, Grant's cumulative fees as an OCP were $63,453. Grant's
fees during the period of July 1, 2012, through the end of the
year are expected to consistently exceed the OCP cap of $50,000
per month, due to the expanded scope of its services. The
Debtors, therefore, have determined that it is in the best
interest of their estates to employ Grant pursuant to Sections
327(a) and 330 of the Bankruptcy Code.
As advisor, Grant will work on certain proposed sales and
purchases of businesses in the U.S. and non-U.S. jurisdictions,
and prepare research tax credit calculations, Section 199,
accounting method changes, and other similar computations for the
U.S. taxpaying entities.
Grant will be paid on its hourly rates and will be reimbursed of
actual and necessary out-of-pocket expenses. Effective June 1,
2012, Grant's hourly rates are:
Billing Category Range
---------------- -----------
U.S. Partners and Managing Directors $500 - $700
U.S. Senior Managers and Managers $350 - $500
U.S. Senior Associates and Associates $200 - $350
U.S. Interns $100 - $200
Grant member firms in other jurisdiction's current hourly rates
for associates and partners outside of the United States vary from
$200 to $800.
Mark A. Margulies, a tax partner at Grant, assures the Court that
neither Grant nor any of its partner or manager represents any
interest adverse to the Debtors in the matters upon which Grant is
to be engaged.
A hearing on the Debtors' application will be held on August 27,
2012. Objections are due on August 10.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the
Bankruptcy Court to approve the definitive agreements among
itself, co-proponents of the Plan, BNSF railroad, several
insurance companies and the representatives of Libby asbestos
personal injury claimants, to settle objections to the Plan.
Pursuant to the agreements, the Libby claimants and BNSF would
forego any further appeals to the Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: 8 Parties Bring Plan Appeals to Third Circuit
---------------------------------------------------------
Eight parties-in-interest in W.R. Grace & Co.'s bankruptcy cases
filed separate appeals to the U.S. Court of Appeals for the Third
Circuit from the memorandum opinion and final order issued by
Judge Ronald L. Buckwalter of the U.S. District Court for the
District of Delaware on June 11, 2012, overruling all objections
and confirming, in its entirety, the Joint Plan of Reorganization
of W.R. Grace & Co. and its debtor-affiliates.
The Appellants are:
(1) a group of lenders under the Debtors' prepetition bank
credit facilities;
(2) claimants injured by exposure to asbestos from the
Debtors' operations in Lincoln County, Montana ("Libby
Claimants");
(3) Garlock Sealing Technologies, LLC;
(4) the state of Montana;
(5) Maryland Casualty Company;
(6) Her Majesty the Queen in Right of Canada;
(7) BNSF Railway Company; and
(8) Anderson Memorial Hospital.
The Bank Lender Group wants the Third Circuit to determine whether
Judge Buckwalter erred:
(1) in affirming the January 31, 2011 order of the U.S.
Bankruptcy Court for the District of Delaware confirming
Grace's First Amended Joint Plan of Reorganization dated
as of December 23, 2010, which extinguishes Grace's
contractual obligations to the Bank Lenders, including
the obligation to pay interest on money borrowed at the
rate provided in the applicable credit agreements, while
allowing Grace's shareholders to retain their equity
interests in the company -- equity interests valued at
over $2.97 billion as of April 21, 2011.
(2) by not awarding default interest as provided for in the
Bank Lenders and Grace's Credit Agreements despite
Grace's failure to pay either the principal amount of the
loan or interest when due following Grace's commencement
of its Chapter 11 bankruptcy case;
(3) by not awarding default interest as provided for in the
Credit Agreements following Grace's failure to pay either
the principal amount of the loan or interest due upon the
scheduled payment or maturity dates set forth in the
Credit Agreements;
(4) in concluding that Grace cannot be held responsible for
contractual defaults after it commenced its Chapter 11
bankruptcy case on the basis that the terms of Credit
Agreements were preempted by the Bankruptcy Code;
(5) in concluding that the Joint Plan does not impair the
Bank Lenders' claims within the meaning of Section 1124
of the Bankruptcy Code given that the Joint Plan provides
for payment of interest on the Bank Lenders' claims at a
rate that is lower than the rate set forth in the
applicable credit agreements, deprives the Bank Lenders
of attorneys' fees and facility fees that Grace owes, and
discharges Grace of all further obligations to the Bank
Lenders;
(6) in concluding that Section 1129(b) of the Bankruptcy Code
is not applicable to confirmation of the Joint Plan;
(7) in concluding that, if Section 1129(b) is applicable, the
Joint Plan satisfies this section, because among other
things, equity is retaining value at the expense of the
Bank Lenders, and made a series of erroneous factual
findings and legal conclusions in connection with this
conclusion;
(8) in concluding that, if Section 1129(b) is applicable, the
Joint Plan satisfies this section, when among other
things, equity is benefiting at the expense of the Bank
Lenders;
(9) in concluding that there is no basis in evidence or law
to support a finding that Grace is "solvent" when, among
other things, the Joint Plan provides for Grace's
existing shareholders to retain their valuable equity
interests in the Company, without the agreement of the
Bank Lenders and without requiring them to receive
postpetition interest at the rate set forth in the
applicable credit agreements;
(10) in concluding that the Joint Plan complies with Section
1129(a)(7) of the Bankruptcy Code when the Joint Plan
provides for payment to the Bank Lenders at a rate that
is less than the "legal rate" of interest; and
(11) in concluding that no prepetition interest is owed to the
Bank Lenders under the Credit Agreements despite, among
other things, Grace's admission that some prepetition
interest amounts are owed to the Bank Lenders as part of
their claims.
The Libby Claimants want the Third Circuit to determine whether
the District Court erred in affirming confirmation of the Chapter
11 Plan, which:
(1) deprives them of their right to trial by jury;
(2) discriminates against them, in violation of In re
Combustion Engineering, Inc., and Sections 1122(a),
1123(a)(4) and other provisions of the Bankruptcy Code;
(3) fails the Best Interests of the Creditors Test of
Section 1129(a)(7) of the Bankruptcy Code; and
(4) imposes injunctions and releases that are impermissible
under Section 524(g) of the Bankruptcy Code.
Garlock Sealing wants the Court of Appeals to determine whether:
(1) giving W.R. Grace & Co. the benefit of an injunction
issued pursuant to Section 524(g)(1)(A) of the Bankruptcy
Code that will shield if from all future asbestos
personal injury claims, while asbestos personal injury
claimants against Grace are paid no more than 35% of the
value of their claims but Grace retains billions of
dollars in property for the benefit of its shareholders,
is "fair and equitable" within the meaning of Section
524(g)(4)(B)(ii) of the Bankruptcy Code to persons who
might assert future claims, including Grace's future
co-defendants who are exposed to paying Grace's share of
liability;
(2) giving Grace the benefit of an Channeling Injunction
issued pursuant to Section 524(g)(1)(A) is "fair and
equitable" within the meaning of Section 524(g)(4)(B)(ii)
to Grace's future co-defendants who might subsequently
assert future claims, when the procedures for
distributions to future claimants contain confidentiality
and other features that will frustrate co-defendants'
state law rights to avoid paying Grace's share of
liability;
(3) Grace is entitled to be named in the Channeling
Injunction in light of the requirement under Section
524(g)(4)(B)(ii) that the court must appoint a legal
representative for the purpose of protecting the right
persons that might subsequently assert demands of each
kind that, under Grace's Joint Plan, would be paid by a
trust and subjected to the Channeling Injunction where
the court appointed no legal representative for Grace's
future co-defendants, or, in the alternative, where the
legal representative of Grace's future co-defendants, if
one was appointed, failed to provide adequate
representation for Grace's future co-defendants;
(4) the Bankruptcy and the District Courts clearly erred in
determining that the Bankruptcy Court had appointed a
legal representative for Grace's future co-defendants;
(5) the District Court erred in finding that Garlock lacked
standing to object to confirmation of the Joint Plan and
entry of the Channeling Injunction when Garlock has been
sued in thousands of asbestos cases with Grace in
jurisdictions where it bears the risk of paying Grace's
share of liability under principles of joint and several
liability, the Plan Proponents stipulated that Garlock
would continues to receive claims in the future in those
jurisdictions by persons, who would allege that Grace and
Garlock jointly caused their asbestos-related injuries,
and when under the Joint Plan, Garlock's present and
future contribution claims against Grace would be
discharged and Garlock enjoined from pursuing its
substantive and procedural rights against Grace at any
time in the future.
The state of Montana wants the Third Circuit to determine whether
the District Court erred in concluding that:
(1) the First Amended Joint Plan of Reorganization under
Chapter 11 of the Bankruptcy Code of W. R. Grace & Co., et
al., the Official Committee of Asbestos Personal Injury
Claimants, the Asbestos PI Future Claimants'
Representative, and the Official Committee of Equity
Security Holders is confirmable pursuant to Section 1129
of the Bankruptcy Code;
(2) the Plan complies with Section 524(g) of the Bankruptcy
Code;
(3) Montana's requests for contribution and indemnification
may be subject to an injunction pursuant to Section
524(g), even though they are of a different nature than
asbestos claims;
(4) Montana's requests for contribution and indemnification
may be subject to an injunction imposed pursuant to
Section 524(g), even though they are not "claims" or
"demands;"
(5) the Plan complies with Section 1122(a) of the Bankruptcy
Code, even though it classifies claims that are not
substantially similar within the same class;
(6) the Trust Distribution Procedures comply with Sections
1123(a)(4) and 524(g)(2)(b) of the Bankruptcy Code, even
though they give disparate treatment to claims within a
class, including the possibility that the Trust
Distribution Procedures give disparate treatment by:
* the possibility that the Trust Distribution Procedures
might be interpreted to provide for no payout on account
of requests for contribution and indemnification;
* implementing a first-in-first-out mechanic;
* imposing additional restrictions or requirements on
holders of Indirect PI Trust Claims; and
* making an "extraordinary claim" available to only certain
types of claimants; and
(7) the Trust Distribution Procedures and the Plan are fair
and equitable.
To the extent that the Third Circuit finds that the District Court
erred in approving the channeling injunction issued pursuant to
Section 524(g) of the Bankruptcy Code under the Joint Plan, MCC
wants the Third Circuit to determine whether the District Court
also erred in affirming other aspects of the Bankruptcy Court's
confirmation of the Joint Plan.
Her Crown wants the Third Circuit to determine whether the
District Court erred in concluding that:
(1) the First Amended Joint Plan of Reorganization under
Chapter 11 of the Bankruptcy Code of W. R. Grace & Co., et
al., the Official Committee of Asbestos Personal Injury
Claimants, the Asbestos PI Future Claimants'
Representative, and the Official Committee of Equity
Security Holders is confirmable pursuant to Section 1129
of the Bankruptcy Code;
(2) the Plan complies with Section 524(g) of the Bankruptcy
Code;
(3) the Crown's requests for contribution and indemnification
may be subject to an injunction pursuant to Section
524(g), even though they are of a different nature than
asbestos claims;
(4) the Crown's requests for contribution and indemnification
may be subject to an injunction imposed pursuant to
Section 524(g), even though they are not "claims" or
"demands;"
(5) the Plan complies with Section 1122(a) of the Bankruptcy
Code, even though it classifies claims that are not
substantially similar within the same class;
(6) the Trust Distribution Procedures comply with Sections
1123(a)(4) and 524(g)(2)(b) of the Bankruptcy Code, even
though they give disparate treatment to claims within a
class, including that the Trust Distribution Procedures
give disparate treatment by:
* the possibility that the Trust Distribution Procedures
might be interpreted to provide for no payout on account
of requests for contribution and indemnification;
* implementing a first-in-first-out mechanic;
* imposing additional restrictions or requirements on
holders of Indirect PI Trust Claims; and
* making an "extraordinary claim" available to only certain
types of claimants; and
(7) the Trust Distribution Procedures and the Plan are fair
and equitable.
BNSF appeals from Judge Buckwalter's Jan. 30, 2012, and June 11,
2012 opinions and orders.
Anderson Memorial wants the Third Circuit to determine whether the
Bankruptcy Court and the District Court erred in:
(1) determining that the Joint Plan should be confirmed;
(2) determining that the Joint Plan complies with the
applicable provisions of the Bankruptcy Code and that the
Plan Proponents complied with the applicable provisions
of the Bankruptcy Code;
(3) determining that the Joint Plan was proposed in good
faith;
(4) determining that the Joint Plan adequately provided for
equality of treatment among creditors with respect to
Anderson's claims;
(5) determining that the Joint Plan was feasible;
(6) determining that the requirements for the issuance of an
injunction in accordance with Section 524(g) of the
Bankruptcy Code were satisfied;
(7) determining that the Class 7A claims under the Joint Plan
were unimpaired;
(8) determining that claimants in all required classes had
voted to accept the Joint Plan;
(9) determining that all impaired classes of claims or
interests had accepted the Joint Plan or would receive or
retain under the Joint Plan on account of the claim or
interest property of a value, on the effective date of
the Joint Plan, that is not less than the amount that the
holder would so receive or retain if the Debtors were
liquidated under Chapter 7 of the Bankruptcy Code on that
date;
(10) in approving releases of non-debtor third parties,
including the Debtors' professionals and the
professionals of other interested parties, contained in
the Joint Plan;
(11) determining that adequate notice of the claims bar date
was provided to all prospective property damage
claimants;
(12) determining that the evidence that Anderson would be
permitted to present in connection with confirmation of
the Joint Plan and all non-final orders and rulings that
led to the Appealed Orders;
(13) in failing to consider the evidence that Anderson did
present in connection with confirmation of the Joint Plan
and all non-final orders and rulings that led to the
Appealed Orders;
(14) in precluding Anderson from obtaining permissible
discovery on matters relating to the administration of
the bankruptcy case and confirmation of the Joint Plan;
and
(15) in failing to rule on admissibility of evidence offered
or proffered by Anderson in connection with confirmation
of the Joint Plan.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the
Bankruptcy Court to approve the definitive agreements among
itself, co-proponents of the Plan, BNSF railroad, several
insurance companies and the representatives of Libby asbestos
personal injury claimants, to settle objections to the Plan.
Pursuant to the agreements, the Libby claimants and BNSF would
forego any further appeals to the Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
WAVEDIVISION HOLDINGS: S&P Assigns 'B+' Corp. Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Kirkland, Wash.-based cable service provider
WaveDivision Holdings LLC (Wave). The outlook is stable.
"At the same time, we assigned a 'BB-' issue-level rating and '2'
recovery rating to the company's proposed $50 million senior
secured revolver and $471 million term loan B. The '2' recovery
rating indicates expectations for substantial (70%-90%) recovery
in the event of payment default. Additionally, we expect the
company to issue about $250 million of senior unsecured notes at
a later date, which we have factored into our ratings," S&P said.
"The company plans to use proceeds from the new debt, coupled with
a $202 million equity contribution from Oak Hill Capital and GI
Partners, to fund the $538 million equity purchase price of Wave
by Oak Hill, refinance around $347 million of existing Wave debt,
pay about $33 million of fees and expenses, and add about $5
million of cash to the balance sheet. Inclusive of management's
reinvestment of $40 million of equity, the transaction is valued
at around $925 million. Pro forma total funded debt is around $721
million," S&P said.
"The ratings on Wave reflect what we consider a 'fair' business
risk profile and a 'highly leveraged' financial risk profile. Pro
forma debt to EBITDA is elevated, at about 6.7x, including
realized synergies from the recently acquired assets from
Broadstripe in the Northwest," S&P said.
"In addition to the company's high leverage, our financial risk
profile assessment includes our expectation for future debt-
financed acquisitions and potential dividends to its shareholders,
which could constrain longer term leverage improvement,
notwithstanding our expectations for modest EBITDA growth," said
Standard & Poor's credit analyst Allyn Arden.
"The outlook is stable and reflects our expectation for mid-
single-digit revenue and EBITDA growth and leverage declining
somewhat from the high-6x area to the low-6x area over the course
of 2013. Still, the company's highly leveraged financial risk
profile, especially our assessment of the financial policy as
aggressive under its private-equity owners, limit prospects for a
possible upgrade."
"On the other hand, we could lower the ratings if Wave were to
initiate a debt-financed acquisition or dividend to shareholders,
which results in leverage remaining at 6.5x or higher for multiple
quarters. Additionally, aggressive competition that results in
pricing pressure and higher churn could prompt a revision of our
business risk profile assessment and result in a lower rating,"
S&P said.
WEATHERFORD INT'L: Moody's Affirms 'P(Ba1)' Pref. Shelf Rating
--------------------------------------------------------------
Moody's Investors Service changed Weatherford International Ltd.'s
(Weatherford, incorporated in Bermuda) rating outlook to negative
from stable. At the same time, Moody's affirmed Weatherford's Baa2
senior unsecured and Prime-2 commercial paper ratings.
The rating action follows Weatherford's announcement that it will
need to restate its previously filed Form 10-K for the year-end
2011 and previously filed Form 10-Q for the quarter ending March
31, 2012 and will be delayed in filing its Form 10-Q for the
quarter ending June 30, 2012 as a result of additional issues
identified related to income tax accounting.
"The negative outlook reflects Weatherford's need to again restate
its financial statements, representing the third restatement
within the past 18 months," commented Gretchen French, Moody's
Vice President. "Weatherford could face a prolonged period in
remediating its material weakness in internal control over
financial reporting for income taxes, which would create
significant management distractions during a period of capital
intensive growth, with high and rising debt levels, lagging
returns and high levels of working capital relative to peers."
Ratings Rationale
Weatherford has not identified any additional material weaknesses
and the latest restatement is not expected to have a material
impact on historical credit ratios. In addition, management has
significantly increased its investments in accounting and
administrative personnel, which in Moody's opinion had not
previously kept up with the company's aggressive growth strategy.
Nevertheless, Weatherford stands out relative to its investment-
grade rated peers in facing a series of restatements, particularly
so many years after Section 404 of the Sarbanes-Oxley Act was
first implemented. Furthermore, given Weatherford's large breadth
of operations, Moody's remain concerned about company-wide
controls and how effectively the company is managed on a systems
and administrative basis. Until the material weakness is fully
resolved, some uncertainty remains regarding the company's
financial reporting, although none have been reported. In
addition, the US SEC and DOJ are continuing to investigate the
circumstances around the material weakness.
Management is working toward a goal of fully remediating the
material weakness by year-end 2012. If the company is unable to
remediate the material weakness by year-end 2012, if further
material issues are uncovered, or is unable to obtain waivers from
its bank lenders and bond holders with respect to its financial
reporting covenants, the Baa2 rating could be downgraded. In
addition, the ratings could be lowered if the company's
indebtedness were to become more elevated (debt/EBITDA over 3.5x).
While an upgrade is unlikely over the near-term, a significantly
lower, sustainable financial leverage profile (debt/EBITDA under
2.5x) and improved margins and returns relative to peers could
result in an upgrade.
Weatherford's Baa2 senior unsecured rating is supported by: its
scale and leading market positions; its geographic
diversification, with a substantial portion of its revenue coming
from markets outside the historically more volatile North American
market; and its numerous patented products and technologies, which
give the company a competitive edge in several markets. While
Weatherford's asset profile is indicative of a higher rating, the
Baa2 rating is restrained by the company's high financial leverage
and lower returns compared to its peers. Weatherford has weak
coverage and leverage metrics stemming from acquisitions and
periods of sustained negative free cash flow resulting from its
aggressive growth profile. In addition, the rating remains
restrained by uncertainty about the ultimate outcome of various
government investigations.
Weatherford has an adequate liquidity profile. The company
maintains a $2.25 billion credit facility maturing in July 2016 to
support its $2.25 billion commercial paper program. Drawings on
the revolver are not subject to a MAC clause and the company has
access to same day availability for draws up to the full facility
size. The company is expected to maintain ample cushion under its
sole financial covenant, which is a maximum debt-to-capitalization
ratio of 60%. Moody's expects Weatherford to generate negative
free cash flow in 2012 due to its heavy capital expenditure
program (estimated at roughly $2 billion) and high working capital
needs.
Ratings affirmed include:
Weatherford International Ltd. (Bermuda)
Senior Unsecured Notes rated Baa2
Senior Unsecured Shelf Rating P(Baa2)
Subordinate Shelf Rating P(Baa3)
Preferred Shelf Rating P(Ba1)
Commercial Paper Rating P-2
Weatherford International, Inc. (Delaware)
Senior Unsecured Notes rated Baa2
Senior Unsecured Shelf Rating P(Baa2)
Subordinate Shelf Rating P(Baa3)
The principal methodology used in rating Weatherford was the
Global Oilfield Services Industry Methodology published in
December 2009.
Weatherford International Ltd., headquartered in Switzerland, is a
diversified international energy service and manufacturing company
that provides a variety of services and equipment to the oil and
gas industry.
WORLD SURVEILLANCE: Shareholders Elect Two Directors to Board
-------------------------------------------------------------
World Surveillance Group Inc. held its annual meeting of
stockholders on July 24, 2012. At the Annual Meeting, each of
Anthony R. Bocchichio and Kevin S. Pruett was elected to the Board
of Directors. The shareholders also ratified the appointment of
Rosen Seymour Shapss Martin & Company LLP, as the Company's
independent registered public accounting firm.
Following the formal business of the 2012 Annual Meeting, Anthony
R. Bocchichio, the Company's Chairman, and Glenn D. Estrella, the
Company's President and CEO, provided a management presentation, a
copy of which is availabe for free at http://is.gd/duuJ6L
About World Surveillance
World Surveillance Group Inc. designs, develops, markets and sells
autonomous lighter-than-air (LTA) unmanned aerial vehicles (UAVs)
capable of carrying payloads that provide persistent security
and/or wireless communication from air to ground solutions at low,
mid and high altitudes. The Company's airships, when integrated
with electronics systems and other high technology payloads, are
designed for use by government-related and commercial entities
that require real-time intelligence, surveillance and
reconnaissance or communications support for military, homeland
defense, border control, drug interdiction, natural disaster
relief and maritime missions. The Company is headquartered at the
Kennedy Space Center, in Florida.
The Company reported a net loss of $1.12 million in 2011, compared
with a net loss of $9.79 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$2.90 million in total assets, $17.65 million in total liabilities
and a $14.75 million total stockholders' deficit.
The Company incurred a loss from operations of $1.33 million for
the three months ended March 31, 2012, and negative cash flows
from operations of $419,000 for the three months ended March 31,
2012. The Company had a working capital deficit of $16.9 million
and total stockholders' deficit of $14.76 million at March 31,
2012. The Company had an accumulated deficit of $147.0 million at
March 31, 2012. The Company said these factors raise substantial
doubt about the Company's ability to continue as a going concern.
After auditing the 2011 results, Rosen Seymour Shapss Martin &
Company LLP, in New York, expressed substantial doubt about World
Surveillance's ability to continue as a going concern. The
independent auditors noted that the Company has experienced
significant losses and negative cash flows, resulting in decreased
capital and increased accumulated deficits.
Bankruptcy Warning
The Company's indebtedness at March 31, 2012, was $17,350,632. A
portion of those indebtedness reflects judicial judgments against
the Company that could result in liens being placed on the
Company's bank accounts or assets. The Company is reviewing its
ability to reduce this debt level due to the age or settlement of
certain payables but the Company may not be able to do so. This
level of indebtedness could, among other things:
* make it difficult for the Company to make payments on this
debt and other obligations;
* make it difficult for the Company to obtain future financing;
* require the Company to redirect significant amounts of cash
from operations to servicing the debt;
* require the Company to take measures such as the reduction in
scale of its operations that might hurt the Company's future
performance in order to satisfy the Company's debt
obligations; and
* make the Company more vulnerable to bankruptcy or an unwanted
acquisition on terms unsatisfactory to the Company.
ZOGENIX INC: Has Public Offering of 32.5 Million Units
------------------------------------------------------
Zogenix Inc. has priced an underwritten public offering of
32,500,000 units. Each unit consists of one share of common stock
and a warrant to purchase 0.45 of a share of common stock, at a
price to the public of $2.00 per unit. Net proceeds, after
underwriting discounts and commissions and estimated offering
costs, will be approximately $60.7 million.
Zogenix intends to use the net proceeds from the offering to repay
all amounts outstanding under its amended and restated loan and
security agreement with Oxford Finance LLC and Silicon Valley
Bank, to fund the pre-approval and pre-commercialization
activities of Zohydro ER, for the ongoing commercialization of
Sumavel DosePro and for working capital and other general
corporate purposes. Zogenix has granted the underwriters a 30-day
option to purchase up to 4,875,000 additional units to cover over-
allotments, if any. The offering is expected to close on or about
July 27, 2012, subject to satisfaction of customary closing
conditions. Each warrant will have an exercise price of $2.50 per
share, will be exercisable one year after the date of issuance and
will expire five years from the date of issuance. The shares of
common stock and the warrants are immediately separable and will
be issued separately.
Stifel Nicolaus Weisel and Wells Fargo Securities, LLC, are acting
as joint book-running managers for the offering. Leerink Swann LLC
is acting as lead co-manager for the offering. Oppenheimer & Co.
Inc. and William Blair & Company, L.L.C., are acting as co-
managers for the offering.
About Zogenix Inc.
Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and
Emeryville, California, is a pharmaceutical company
commercializing and developing products for the treatment of
central nervous system disorders and pain.
Ernst & Young LLP, in San Diego, Calif., issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2011, citing recurring losses from operations
and lack of sufficient working capital.
The Company reported a net loss of $83.90 million in 2011, a net
loss of $73.56 million in 2010, and a net loss of $45.88 million
in 2009.
The Company's balance sheet at March 31, 2012, showed
$82.28 million in total assets, $82 million in total liabilities,
and $278,000 in total stockholders' equity.
ZOGENIX INC: Has $22-Mil. Cash & Cash Equivalents as of June 30
---------------------------------------------------------------
Zogenix, Inc.'s cash and cash equivalents were approximately $22
million as of June 30, 2012.
The Company's net product revenue for the second quarter of 2012
is estimated to be in the range of $7.9 million to $8.4 million.
The Company's sales force assumed full responsibility of all
promotional activity for Sumavel DosePro during the second quarter
of 2012 in connection with the termination of its co-promotion
agreement with Astellas Pharma US, Inc., on March 31, 2012. As a
result of the termination of the co-promotion agreement, the
Company had no contract revenue in the second quarter of 2012.
About Zogenix Inc.
Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and
Emeryville, California, is a pharmaceutical company
commercializing and developing products for the treatment of
central nervous system disorders and pain.
Ernst & Young LLP, in San Diego, Calif., issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2011, citing recurring losses from operations
and lack of sufficient working capital.
The Company reported a net loss of $83.90 million in 2011, a net
loss of $73.56 million in 2010, and a net loss of $45.88 million
in 2009.
The Company's balance sheet at March 31, 2012, showed
$82.28 million in total assets, $82 million in total liabilities,
and $278,000 in total stockholders' equity.
* Jasper Bank Failure Brings Year's Total to 39 Banks
-----------------------------------------------------
Jasper Banking Company of Jasper, Ga., was closed July 27, by the
Georgia Department of Banking and Finance, which appointed the
Federal Deposit Insurance Corporation as receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with Stearns Bank National Association of St. Cloud,
Minn., to assume all of the deposits of Jasper Banking.
As of March 31, 2012, Jasper Banking had about $216.7 million in
total assets and $213.1 million in total deposits. In addition to
assuming all of the deposits of the failed bank, Stearns Bank
agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $58.1 million.
Jasper Banking is the 39th FDIC-insured institution to fail in the
nation this year, and the ninth in Georgia.
2012 Failed Banks List
The FDIC was appointed as receiver for the closed banks. To
protect the depositors, the FDIC entered into a purchase and
assumption agreement with various banks that agreed to assume the
deposits of most of the closed banks. The FDIC also entered into
loss-share transactions on assets bought by the banks.
For this year, the failed banks are:
Loss-Share
Transaction Party FDIC Cost
Assets of Bank That Assumed to Insurance
Closed Bank Deposits & Bought Fund
Closed Bank (millions) Certain Assets (millions)
----------- ----------- ----------------- ------------
Jasper Banking Company $216.7 Stearns Bank, N.A. $58.1
Second Federal Savings $199.1 Hinsdale Bank & Trust $76.9
Heartland Bank $110.0 Metcalf Bank $3.1
Georgia Trust Bank $119.8 Community & Southern $20.9
The Royal Palm Bank $87.0 First National Bank $13.5
First Cherokee State $222.7 Community & Southern $36.9
Glasgow Savings Bank $24.8 Regional Missouri $0.1
Montgomery Bank & Trust $173.6 Ameris Bank $75.2
The Farmers Bank $163.9 Clayton Bank and Trust $28.3
Security Exchange Bank $151.0 Fidelity Bank $34.3
Putnam State Bank $169.5 Harbor Community Bank $37.4
Waccamaw Bank $533.1 First Community Bank $51.1
Farmers' and Traders' $43.1 First State Bank $8.9
First Capital Bank $46.1 F & M Bank $5.6
Carolina Federal $54.4 Bank of North Carolina $15.2
Alabama Trust Bank $51.6 Southern States Bank $8.9
Security Bank, N.A. $101.0 Banesco USA $10.8
Plantation Federal $486.4 First Federal Bank $76.0
Inter Savings Bank $473.0 Great Southern Bank $117.5
Bank of the Est. Shore $166.7 [No Acquirer] $41.8
Palm Desert Nat'l $125.8 Pacific Premier Bank $20.1
HarVest Bank of Md. $164.3 Sonabank $17.2
Fort Lee Federal $51.9 Alma Bank $14.0
Fidelity Bank $818.2 The Huntington Nat'l $92.8
Premier Bank $268.7 Int'l Bank of Chi. $64.1
Covenant Bank $95.7 Stearns Bank, N.A. $31.5
New City Bank $71.2 [No Acquirer] $17.4
Global Commerce Bank $143.7 Metro City Bank $17.9
Central Bank of Georgia $278.9 Ameris Bank $67.5
Home Savings of Amer. $434.1 [No Acquirer] $38.8
Charter National Bank $93.9 Barrington Bank $17.4
SCB Bank $182.6 First Merchants Bank $33.9
Patriot Bank $111.3 First Resource Bank $32.6
BankEast $272.6 U.S. Bank N.A. $75.6
Tennessee Commerce $1,185.0 Republic Bank & Trust $416.8
First Guaranty Bank $377.9 CenterState Bank $82.0
American Eagle $19.6 Capital Bank, N.A. $3.2
The First State Bank $416.8 Hamilton State Bank $416.8
Central Florida $79.1 CenterState Bank $24.4
In 2011 there were 92 failed banks, compared with 157 in 2010, 140
in 2009 and just 25 for 2008.
The failures in 2010 were the most since 1992, when 179
institutions were taken over by regulators.
A complete list of banks that failed since 2000 is available at:
http://www.fdic.gov/bank/individual/failed/banklist.html
813 Banks in Problem List
The FDIC's Quarterly Banking Profile for Dec. 31, 2011, says that
The number of institutions on the FDIC's "Problem List" declined
from 844 to 813 during the quarter, and total assets of "problem"
institutions fell from $339 billion to $319.4 billion. The number
of institutions in the "problem list" has decreased for the third
consecutive quarter.
The FDIC defines "problem" institutions as those with financial,
operational or managerial weaknesses that threaten their
viability.
The deposit insurance fund, which protects customer holdings up to
$250,000 per account in the event of a failure, saw its balance
increase in the fourth quarter to $9.2 billion (unaudited) from
$7.8 billion in the third quarter, the eighth consecutive
quarterly increase.
Problem Institutions Failed Institutions
-------------------- -------------------
Year Number Assets (Mil) Number Assets (Mil)
---- ------ ------------ ------ ------------
2011 813 $319,432 92 $34,923
2010 884 $390,017 157 $92,085
2009 702 $402,800 140 $169,700
2008 252 $159,405 25 $371,945
2007 76 $22,189 3 $2,615
2006 50 $8,265 0 $0
2005 52 $6,607 0 $0
2004 80 $28,250 4 $170
Federal regulators assign a composite rating to each financial
institution, based upon an evaluation of financial and operational
criteria. The rating is based on a scale of 1 to 5 in ascending
order of supervisory concern. "Problem" institutions are those
institutions with financial, operational, or managerial weaknesses
that threaten their continued financial viability. Depending upon
the degree of risk and supervisory concern, they are rated either
a "4" or "5." The number and assets of "problem" institutions are
based on FDIC composite ratings. Prior to March 31, 2008, for
institutions whose primary federal regulator was the OTS, the OTS
composite rating was used.
* Moody's Sees Developing Risks for US Higher Education Sector
--------------------------------------------------------------
Developing risks, including increased regulatory scrutiny,
accreditation tightening, technology challenges, and governance
conflicts are confronting the US higher education sector, says
Moody's Investors Service in a mid-year sector outlook.
Combined with lingering macroeconomic risks and worries about
affordability and student debt, these developing risks are forcing
universities to focus more aggressively on cost control amidst
growing revenue challenges.
Moody's maintains a mixed outlook for the sector -- stable for
market-leading diversified universities, and negative for the
remainder of the sector, according to the report, "US Higher
Education 2012 Mid-Year Outlook Remains Mixed."
"Many of the credit challenges outlined in our January outlook for
2012 have intensified," said Moody's Assistant VP-Analyst Eva
Bogaty, author of the report. "These include an economic recovery
that continues to stumble, stagnant-to-negative investment
returns, stress on federal and state budgets, and household net
worth well below prior levels."
She said a minority of market-leading universities, generally
those rated Aaa or Aa, has sufficiently strong balance sheets and
diversified revenue sources to remain resilient and stable despite
rising credit risks in the sector. However, the majority of
Moody's-rated institutions is more dependent on student tuition,
government funding, or both, and face greater credit pressure.
"Added to the macroeconomic pressures of recent years has been
heightened public scrutiny and political focus on the issue of
affordability, especially as the nation's student debt burden has
been on the rise," said Ms. Bogaty. "Reflecting concerns coming
from both political parties, President Obama announced a college
affordability plan with a bid to expand federal student financial
aid and reward public institutions that moderate tuition
increases."
The mid-year report also captures the risks and potential benefits
associated with the growth of online education and new technology
platforms.
"The sector is at a critical point as the digital revolution
challenges our collective understanding of learning models and
delivery of education," said Ms. Bogaty. "With a rising number of
leading schools now offering 'massive open online courses' or
MOOCs, this will create new winners and losers, pressuring
colleges to make significant investments."
The growing need for bolder leadership on college campuses has
brought into focus the unique governance and management challenges
for public universities, research universities, and heavily
tuition-dependent small private colleges, according to Moody's.
"Strong and savvy leadership, along with clear and thoughtful
strategic planning, have become ever more important," said
Ms. Bogaty. "The underlying faculty-centric business model of
higher education is evolving, and colleges and universities will
have to adopt a shared governance model to meet the demands of a
wider constituency in the future."
* S&P's Global Corporate Default Tally Rises to 48
--------------------------------------------------
The 2012 global corporate default tally increased to 48 issuers
last week following one downgrade, said an article published
Thursday by Standard & Poor's Global Fixed Income Research.
On June 23, Standard & Poor's Ratings Services lowered its
corporate credit rating on U.S. wireline operator Broadview
Networks Holdings Inc. to 'D' after the company announced an
extension on its revolving credit facility.
The global corporate default tally rose to 2.5% in June from 2.4%
in May, with the U.S., Europe, and emerging market corporate
default rates rising to 2.7%, 2.4%, and 1.7%, respectively. The
corporate default rate for the other developed region (Australia,
Canada, Japan, and New Zealand) fell slightly to 4% in June from
4.1% in May. Globally, the long-term (1981-2011) average default
rate is 4.3%.
By region, 26 of the 48 defaulters were based in the U.S., with 13
based in the emerging markets, six in Europe, and three in the
other developed region. In comparison, the 2011 total (through
July 25) was 22: 13 defaulters in the U.S., two in the emerging
markets, two in Europe, and five in the other developed region.
So far this year, missed payments accounted for 13 defaults,
bankruptcy filings accounted for 13, distressed exchanges
accounted for nine, and eight defaulters were confidential. The
remaining five entities defaulted for various other reasons. In
2011, 21 issuers defaulted because of missed interest or principal
payments, and 13 because of bankruptcy filings -- both of which
were among the top reasons for defaults in 2010. Distressed
exchanges -- another top reason for default in 2010 -- followed
with 11 defaults in 2011. Of the remaining defaults, two issuers
failed to finalize refinancing on bank loans, two were subject to
regulatory action, one had its banking license revoked by its
country's central bank, one was appointed a receiver, and two were
confidential.
* 4th Circuit Appoints Rebecca Connelly as W.Va. Bankruptcy Judge
-----------------------------------------------------------------
The Fourth Circuit Court of Appeals appointed Bankruptcy Judge
Rebecca Buehler Connelly to a fourteen-year term of office in the
Western District of Virginia, Harrisonburg, effective July 11,
2012, (Krumm).
Judge Connelly can be reached at:
Honorable Rebecca Buehler Connelly
United States Bankruptcy Court
116 North Main Street, Room 319
Harrisonburg, VA 22808
Tel: 540-434-6747
Fax: 540-433-6390
Law Clerk: Benjamin C. Teich
Term expiration: July 10, 2026
* White & Case's Gerard Uzzi Moves to Milbank Tweed
---------------------------------------------------
Milbank, Tweed, Hadley & McCloy announced that top-ranked
bankruptcy and restructuring attorney Gerard Uzzi had joined the
firm as a partner in its Financial Restructuring Group.
Mr. Uzzi arrives from the New York office of White & Case, where
he was a partner in the firm's Financial Restructuring and
Insolvency Group. He has played a central role in some of the
country's largest and most complex bankruptcies in recent years,
advising key stakeholders -- including debtors, creditors and
acquirors -- to successful outcomes and recoveries. He is
renowned for his creative and business-oriented approach to
complex matters.
Chambers reported that its correspondents described Mr. Uzzi as a
"'bulldog of a bankruptcy lawyer," whose drive, efficiency and
focus make him an 'extremely impactful negotiator.'" And Legal
500 noted his success in a "plethora of major creditor and debtor"
representations, many of them known for establishing important
legal precedent.
At Milbank, Mr. Uzzi joins one of the country's preeminent -- and
busiest -- restructuring groups. The firm recently completed its
nearly four-year representation of the Official Committee of
Unsecured Creditors in the Lehman Brothers' bankruptcy, helping
structure and drive a plan of reorganization and exit from chapter
11. Milbank is currently advising the Official Committee of
Unsecured Creditors in both Eastman Kodak, one of the largest
filings in 2012, and Arcapita Bank, the Bahrain-based private
equity sponsor. Milbank is also acting as the debtor's counsel to
the satellite wireless telecom carrier LightSquared, which filed
for bankruptcy protection this past May.
"We are extremely pleased to have Jerry join our group. He is an
indefatigable advocate for his clients. He achieves superb
results both inside and outside the courtroom. He is known for
crafting creative and commercial solutions to difficult and multi-
faceted cases. Year after year, Jerry Uzzi has consistently been
short-listed among the top bankruptcy counsel in the country.
Jerry will add strength, depth and experience to our group. We
are proud to have him as our partner," said Dennis Dunne, co-chair
of Milbank's Financial Restructuring Group.
"Milbank has one of the strongest financial restructuring groups
in the country. I have worked with their partners on a number of
matters. We both share a desire to tirelessly search for results
that that drive value to our client in a way that is practical,
and business-oriented," Mr. Uzzi said. "I am looking forward to
working with them to further sustain and grow their extremely
successful practice."
About Milbank
Milbank, Tweed, Hadley & McCloy LLP -- http://www.milbank.com--
is an international law firm providing legal solutions to clients
throughout the world for more than 140 years. Milbank is
headquartered in New York and has offices in Beijing, Frankfurt,
Hong Kong, London, Los Angeles, Munich, Sao Paulo, Singapore,
Tokyo and Washington, DC.
* BOND PRICING -- For Week From July 23 to 27, 2012
---------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
A123 SYSTEMS INC 3.750 4/15/2016 23.500
AES EASTERN ENER 9.000 1/2/2017 15.500
AES EASTERN ENER 9.670 1/2/2029 9.000
AGY HOLDING COR 11.000 11/15/2014 42.500
AHERN RENTALS 9.250 8/15/2013 55.022
ALBERTSON'S INC 6.820 7/30/2012 97.800
ALION SCIENCE 10.250 2/1/2015 55.450
AMBAC INC 6.150 2/7/2087 2.500
ATP OIL & GAS 11.875 5/1/2015 39.800
ATP OIL & GAS 11.875 5/1/2015 38.625
ATP OIL & GAS 11.875 5/1/2015 38.625
BAC-CALL08/12 4.900 5/15/2023 100.000
BAC-CALL08/12 5.000 5/15/2023 100.100
BAC-CALL08/12 5.000 5/15/2028 100.000
BAC-CALL08/12 5.100 2/15/2020 100.000
BAC-CALL08/12 5.500 11/15/2029 100.000
BAC-CALL08/12 5.600 2/15/2029 100.000
BAC-CALL08/12 5.700 2/15/2028 99.900
BAC-CALL08/12 6.000 2/15/2037 99.000
BAC-CALL08/12 6.150 8/15/2021 100.000
BAC-CALL08/12 6.550 8/15/2027 99.182
BETHEL BAPTIST 7.900 7/21/2026 11.000
BROADVIEW NETWRK 11.375 9/1/2012 63.610
BUFFALO THUNDER 9.375 12/15/2014 35.625
BZH-CALL08/12 12.000 10/15/2017 109.511
C-CALL08/12 6.150 8/3/2037 100.000
DIRECTBUY HLDG 12.000 2/1/2017 18.000
DIRECTBUY HLDG 12.000 2/1/2017 18.000
EASTMAN KODAK CO 7.000 4/1/2017 18.000
EASTMAN KODAK CO 7.250 11/15/2013 23.900
EASTMAN KODAK CO 9.200 6/1/2021 16.000
EASTMAN KODAK CO 9.950 7/1/2018 19.066
EDISON MISSION 7.500 6/15/2013 59.309
ELEC DATA SYSTEM 3.875 7/15/2023 97.000
ENERGY CONVERS 3.000 6/15/2013 38.900
GEOKINETICS HLDG 9.750 12/15/2014 54.250
GLB AVTN HLDG IN 14.000 8/15/2013 31.340
GLOBALSTAR INC 5.750 4/1/2028 45.250
GMX RESOURCES 4.500 5/1/2015 42.500
GMX RESOURCES 5.000 2/1/2013 71.500
HAWKER BEECHCRAF 8.500 4/1/2015 16.100
HAWKER BEECHCRAF 8.875 4/1/2015 15.500
HAWKER BEECHCRAF 9.750 4/1/2017 0.875
JAMES RIVER COAL 4.500 12/1/2015 27.000
KELLWOOD CO 7.625 10/15/2017 29.200
KV PHARM 12.000 3/15/2015 47.000
LEHMAN BROS HLDG 0.250 12/12/2013 21.250
LEHMAN BROS HLDG 0.250 1/26/2014 21.250
LEHMAN BROS HLDG 1.000 10/17/2013 21.250
LEHMAN BROS HLDG 1.000 3/29/2014 21.250
LEHMAN BROS HLDG 1.000 8/17/2014 24.250
LEHMAN BROS HLDG 1.000 8/17/2014 21.250
LEHMAN BROS HLDG 1.250 2/6/2014 21.250
LEHMAN BROS HLDG 1.500 3/29/2013 21.250
LEHMAN BROS INC 7.500 8/1/2026 7.550
LIFECARE HOLDING 9.250 8/15/2013 61.407
LIFEPT VILGE 8.500 3/19/2013 11.000
MANNKIND CORP 3.750 12/15/2013 57.000
MASHANTUCKET PEQ 8.500 11/15/2015 9.250
MASHANTUCKET PEQ 8.500 11/15/2015 9.527
MASHANTUCKET TRB 5.912 9/1/2021 9.250
MF GLOBAL LTD 9.000 6/20/2038 39.900
MOBILE MINI 6.875 5/1/2015 101.625
NETWORK EQUIPMNT 7.250 5/15/2014 50.000
NEWPAGE CORP 10.000 5/1/2012 7.000
NGC CORP CAP TR 8.316 6/1/2027 14.000
PATRIOT COAL 3.250 5/31/2013 11.000
PENSON WORLDWIDE 8.000 6/1/2014 35.506
PMI CAPITAL I 8.309 2/1/2027 0.375
PMI GROUP INC 6.000 9/15/2016 22.750
POWERWAVE TECH 3.875 10/1/2027 13.110
POWERWAVE TECH 3.875 10/1/2027 13.250
REAL MEX RESTAUR 14.000 1/1/2013 46.450
REDDY ICE CORP 13.250 11/1/2015 28.200
REDDY ICE HLDNGS 10.500 11/1/2012 55.500
RESIDENTIAL CAP 6.500 4/17/2013 23.750
RESIDENTIAL CAP 6.875 6/30/2015 24.605
TERRESTAR NETWOR 6.500 6/15/2014 10.000
TEXAS COMP/TCEH 7.000 3/15/2013 15.700
TEXAS COMP/TCEH 10.250 11/1/2015 24.750
TEXAS COMP/TCEH 10.250 11/1/2015 25.000
TEXAS COMP/TCEH 10.250 11/1/2015 29.000
TEXAS COMP/TCEH 15.000 4/1/2021 34.000
TEXAS COMP/TCEH 15.000 4/1/2021 33.500
THORNBURG MTG 8.000 5/15/2013 5.900
TIMES MIRROR CO 7.250 3/1/2013 37.000
TOUSA INC 9.000 7/1/2010 19.875
TOUSA INC 9.000 7/1/2010 13.000
TRAVELPORT LLC 11.875 9/1/2016 38.250
TRAVELPORT LLC 11.875 9/1/2016 35.750
TRIBUNE CO 5.250 8/15/2015 32.550
TRICO MARINE 3.000 1/15/2027 0.625
TRICO MARINE 3.000 1/15/2027 0.625
USEC INC 3.000 10/1/2014 45.000
WASH MUT BANK FA 5.125 1/15/2015 0.010
WASH MUT BANK NV 6.750 5/20/2036 0.875
WESTERN EXPRESS 12.500 4/15/2015 55.000
*********
Monday's edition of the TCR delivers a list of indicative prices
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*********
S U B S C R I P T I O N I N F O R M A T I O N
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