/raid1/www/Hosts/bankrupt/TCR_Public/120820.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, August 20, 2012, Vol. 16, No. 231
Headlines
ACCESS PHARMACEUTICALS: Incurs $10.6 Million Net Loss in Q2
ACQUIRED SALES: Posts $648,100 Net Loss in Second Quarter
AEOLUS PHARMACEUTICALS: Posts $3.1MM Net Income in June 30 Qtr.
AFFINION GROUP: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative
AGRI-SOURCE FUELS: Files for Chapter 11 Bankruptcy Protection
ALLISON TRANSMISSION: S&P Holds 'BB-' Rating on $850MM Term Loan
ALLY FINANCIAL: US Treasury Names 2 Members to Board of Directors
AMERICA WEST: Delays Form 10-Q for Second Quarter
AMERICAN AIRLINES: Judge Gives Roadmap for Changing Pilots' CBA
AMERICAN NATURAL: Incurs $158,000 Net Loss in Second Quarter
AMERICAN AIRLINES: Judge Refuses to Let Scrap Pilots' Contract
ARCAPITA BANK: Obtains Court OK for Warehouse Asset IPO
ARCAPITA BANK: Depositors Preparing Class Action
AVENTINE RENEWABLE: Said to Hire Houlihan as Advisor
B.A. WACKERLI: Volkswagen, Audi Can Terminate Dealership Pact
BERNARD L. MADOFF: Advocates $2.4 Billion Customer Payment
BIOLIFE SOLUTIONS: Incurs $499,000 Net Loss in Second Quarter
BIOVEST INTERNATIONAL: Incurs $1.7-Mil. Net Loss in June 30 Qtr.
BIOZONE PHARMACEUTICALS: Incurs $1.8MM Net Loss in 2nd Quarter
BONDS.COM GROUP: Incurs $2.8 Million Net Loss in Second Quarter
BORDERS GROUP: Judge Disallows Gift Card Recovery Suit
BROOKLYN CENTER: Moody's Lowers G.O. Debt Rating to 'Ba3'
BURCON NUTRASCIENCE: Had C$1 Million Net Loss in June 30 Quarter
BURGER KING: Moody's Affirms 'B2' CFR/PDR; Outlook Stable
CAESERS ENTERTAINMENT: Fitch Rates New $750-Mil. Add-on Notes 'B-'
CASCADE AG: Has $250,000 Interim DIP Loan From One PacificCoast
CASCADE AG: Sec. 341 Creditors' Meeting Set for Sept. 12
CASCADE AG: U.S. Trustee Appoints 7-Member Creditors' Panel
CASPIAN SERVICES: Posts $3.4-Mil. Net Loss in June 30 Quarter
CEDAR FUNDING: Suit v. Monterey County Bank Stays in Bankr. Court
CENTRAL FEDERAL: Incurs $684,000 Net Loss in Second Quarter
CHATSWORTH AT PGA: Skilled Nursing Center in $158MM Foreclosure
CHINA DU KANG: Posts $59,000 Net Income in Second Quarter
CHINA MARKETING: Had $253,000 Net Income in Second Quarter
CICERO INC: Incurs $816,000 Net Loss in Second Quarter
COMMUNITY SHORES: Reports $321,600 Net Income in Second Quarter
COMPREHENSIVE CARE: Posts $1.6 Million Net Income in 2nd Quarter
COMSTOCK MINING: Incurs $8.9 Million Net Loss in Second Quarter
CORD BLOOD: Reports $148,000 Net Income in Second Quarter
CORNERSTONE BANCSHARES: To Pay Cash Dividend Aug. 30
CREATIVE VISTAS: Incurs $208,000 Net Loss in Second Quarter
DAYTON SUPERIOR: J&K Adrian Contract Dispute Sent to Bankr. Court
DECOR PRODUCTS: Delays Form 10-Q for Second Quarter
DELTA PETROLEUM: Judge Confirms Chapter 11 Plan
DEWEY & LEBOEUF: Ex-Partners Say Trustee Premature, Want Examiner
DEWEY & LEBOEUF: Judge Grants 6-Week Extension to Access Cash
EASTMAN KODAK: DIP Loan Drops 2.5 Points Amid Sale Delay
EASTMAN KODAK: Seeks OK to Redo Supply Deals With Movie Studios
EASTMAN KODAK: Threatens Not to Sell Technology Portfolio
EAU TECHNOLOGIES: Delays Form 10-Q for Second Quarter
EMMIS COMMUNICATIONS: Special Meeting Adjourned to Sept. 4
EMPIRE RESORTS: Reports $240,000 Net Income in Second Quarter
ENERGY CONVERSION: Says Conditions for Emergence Not Yet Satisfied
ENERGY FUTURE: Clears the Decks for Subsidiary's Bankruptcy
ENVIRONMENTAL SOLUTIONS: Had $258,200 Net Loss in Second Quarter
FLORIDA GAMING: Incurs $2.9 Million Net Loss in Second Quarter
FNBH BANCORP: Incurs $89,000 Net Loss in Second Quarter
FTMI REAL ESTATE: Files to Sell Assisted Living Facility Soon
FUSION TELECOMMUNICATIONS: Incurs $1.2MM Net Loss in 2nd Quarter
GENESEE & WYOMING: Moody's Rates Secured Credit Facility 'Ba3'
GEOMET INC: Incurs $53.9 Million Net Loss in Second Quarter
GETTY PETROLEUM: Wins Judge OK to Abandon Storage Tanks
GLOBAL EQUITY: Posts $13,700 Net Loss in Second Quarter
GREENMAN TECHNOLOGIES: Incurs $11.7 Million Net Loss in Q2
H&M OIL: Gets OK to Incur $8-Mil. DIP Financing from Scattered
H&M OIL: Gets 2nd Interim OK to Access Prospect Cash Collateral
HEALTHCARE OF FLORENCE: TAG OK'd as Turnaround Consultant
HEALTHSOUTH CORP: Moody's Retains 'Ba3' CFR/PDR; Outlook Stable
HIGH PLAINS: Delays Form 10-Q for Second Quarter
HOSTESS BRANDS: Union Members Urged to Reject Final Deal
IDQ HOLDINGS: Moody's Affirms 'B3' CFR/PDR; Outlook Stable
IGLESIA EPISCOPAL: S&P Lowers Rating on PR Bonds to 'CCC'
IMH FINANCIAL: Incurs $6.1 Million Net Loss in Second Quarter
INTELLICELL BIOSCIENCES: Delays Form 10-Q for Second Quarter
INTERLEUKIN GENETICS: Incurs $1.2 Million Net Loss in 2nd Quarter
INTERNATIONAL LEASE: Moody's Rates Senior Unsecured Notes 'Ba3'
IRWIN MORTGAGE: KFB and B&T OK'd for Barofsky Mortgage Fraud Case
IRWIN MORTGAGE: Has Until Nov. 2 to Propose Chapter 11 Plan
ITRACKR SYSTEMS: Posts $301,000 Net Loss in Second Quarter
IVEDA SOLUTIONS: Posts $848,300 Net Loss in Second Quarter
JDA SOFTWARE: S&P Affirms 'BB-' Corporate Credit Rating
JEFFERSON COUNTY, AL: Group Must Rework $1.6BB Sewer Claim
KENNEDY WILSON: Moody's Lowers Corp Family Rating to 'B2'
KIWIBOX.COM INC: Delays Form 10-Q for Second Quarter
LEHMAN BROTHERS: Officemax Extinguishes Non-Recourse Liability
LEHMAN BROTHERS: Announces Aug. 31 Record Date for Distribution
LIFE PARTNERS: Texas Judge Declines to Appoint Receiver
LIFECARE HOLDINGS: Moody's Says Ratings Reflect Missed Payment
LIQUIDMETAL TECHNOLOGIES: Incurs $8.9 Million Net Loss in Q2
LITHIUM TECHNOLOGY: Sells 40% Interest in EAS Germany to EnerSyS
LSP ENERGY: Sells Takes Miss. Plant for $286 Million
MADISON 92ND: Files Notice of Plan Effective Date on May 31
MARIANA RETIREMENT FUND: Judge Dismisses Chapter 11 Bankruptcy
MERRIMACK PHARMACEUTICALS: Files Q2 Form 10-Q, Posts $20MM Loss
MF GLOBAL: Misused $42-Mil. Collateral Account, Trader Says
MF GLOBAL: Trustee to Cooperate in MDL Against Executives
MF GLOBAL: Customer Resists Paying $20 Million Loan
MOLYCORP INC: Moody's Lowers CFR/PDR to 'Caa1'; Outlook Negative
MRI BELTLINE: Can't Impose Revolving Carve-out on Collateral
MSR RESORT: Judge Pegs Hilton Damages at $123.8 Million
MUSCLEPHARM CORP: Delays Form 10-Q for Second Quarter
NATIONAL HOLDINGS: Reports $661,000 Net Income in June 30 Quarter
NEOMEDIA TECHNOLOGIES: Posts $124.1MM Net Income in 2nd Quarter
NEONODE INC: Incurs $3.4 Million Net Loss in Second Quarter
NET TALK.COM: Incurs $7 Million Net Loss in Second Quarter
NORD RESOURCES: Incurs $2.4 Million Net Loss in Second Quarter
NYTEX ENERGY: Posts $274,600 Net Income in Second Quarter
OPTIMUMBANK HOLDINGS: Incurs $770,000 Net Loss in 2nd Quarter
OXIGENE INC: Posts $2.3 Million Net Loss in Second Quarter
PATRIOT COAL: Curtis Mallet-Prevost OK'd as Conflicts Counsel
PATRIOT COAL: Ernst & Young Approved as Independent Auditor
PATRIOT COAL: GCG, Inc. Approved as Administrative Agent
PATRIOT COAL: S&P Rates $375-Mil. DIP Term Loan 'B+'
PETER DEHAAN: Wants to Employ Genske Mulder as Accountant
PINNACLE FOODS: S&P Rates New $450-Mil. Term Loan 'B+'
PITTSBURGH CORNING: Credit Agreement Extended Until June 2015
PLATINUM STUDIOS: Chris Beall Named President and Director
PLC SYSTEMS: Incurs $1.4 Million Net Loss in Second Quarter
PLYMOUTH OIL: To Have Bankruptcy Plan in 30-60 Days, Chairman Says
POYNT CORPORATION: Creditor Protection Extended Until Today
PROVIDENT COMMUNITY: Files Form 10-Q, Posts $143K Income in Q2
PROVIDENT ROYALTIES: Ends $37MM Bankruptcy Disputes With Creditor
QUIGLEY CO: Pfizer's Plans Going to Creditors for Vote
REGENCY CENTERS: Fitch Rates $75-Mil. Series 7 Pref. Stock 'BB+'
RESIDENTIAL CAPITAL: Approved for $10.8-Mil. Retention Bonuses
RESIDENTIAL CAPITAL: Judge Gives Examiner Subpoena Power
RG STEEL: Approved to Sell More Plants After Auction
SAN BERNARDINO, CA: Bondholders, Workers Ask for More Time
SB PARTNERS: Incurs $261,000 Net Loss in Second Quarter
SEA TRAIL: OK'd to Ink Premium Financing Contract with IPFS Corp.
SECUREALERT INC: Incurs $4.1-Mil. Net Loss in June 30 Quarter
SOLYNDRA LLC: Plan Exclusivity Extended Until Aug. 31
SONOMA VINEYARD: Plan of Reorganization Wins Court Approval
SOUTHERN STATES COOP: Moody's Keeps 'B1' CFR/PDR; Outlook Negative
SPANISH BROADCASTING: Incurs $2.7 Million Net Loss in 2nd Quarter
STANADYNE HOLDINGS: Incurs $2.7-Mil. Net Loss in Second Quarter
SUPERNUS PHARMACEUTICALS: Had $10-Mil. Net Loss in Second Quarter
SYMS CORP: Files Second Amended Plan Supplement
SYMS CORP: Macy's Objects to Sale of Filene's IP
SYMS CORP: Approved to Sell Miami Property for $4.35 Million
THINKFILM INC: Bergstein Lost $269MM Due to Ex-Atty, Witness Says
UNISYS CORP: Moody's Rates New Sr. Notes 'B1'; Affirms 'B1' CFR
UNISYS CORP: S&P Gives 'BB-' Rating on $210MM Sr. Unsecured Notes
UNIVERSITY GENERAL: Reports $5.1 Million Net Income in 2nd Qtr.
USEC INC: Uranium Producer May Negotiate Restructuring
WILLDAN GROUP: Swings to $17 Million Net Loss in Second Quarter
YUKON-NEVADA GOLD: Had $8.3 Million Net Loss in Second Quarter
ZEEKREWARDS.COM: SEC Shuts Down $600 Million Ponzi Scheme
* Moody's Says Mid-Year US Not-for-Profit Sector Outlook Negative
* Moody's Says Liquidity-Stress Index Up 3.3% by Mid-August
* No Big Rise in Liquidity Stress for Junk Companies
* Former Justice Souter Splits Circuits on Exemptions
* GOP Accuses DOE of Deception on Renewable Energy
* Barclays Leads Bankruptcy Financing Providers
* BOND PRICING -- For Week From Aug. 13 to 17, 2012
*********
ACCESS PHARMACEUTICALS: Incurs $10.6 Million Net Loss in Q2
-----------------------------------------------------------
Access Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $10.60 million on $690,000 of total revenues for the
three months ended June 30, 2012, compared with a net loss of
$1.26 million on $150,000 of total revenues for the same period a
year ago.
The Company reported a net loss of $15.49 million on $2.52 million
of total revenues for the six months ended June 30, 2012, compared
with a net loss of $3.16 million on $300,000 of total revenues for
the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $2.43 million
in total assets, $33.51 million in total liabilities, and a
$31.07 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/lyGESW
About Access Pharmaceuticals
Access Pharmaceuticals, Inc., develops pharmaceutical products
primarily based upon its nano-polymer chemistry technologies and
other drug delivery technologies. The Company currently has one
approved product, one product candidate at Phase 3 of clinical
development, three product candidates in Phase 2 of clinical
development and other product candidates in pre-clinical
development.
After auditing the 2011 results, Whitley Penn LLP, in Dallas
Texas, expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has had recurring losses from operations, negative
cash flows from operating activities and has an accumulated
deficit.
ACQUIRED SALES: Posts $648,100 Net Loss in Second Quarter
---------------------------------------------------------
Acquired Sales Corp. filed its quarterly report on Form 10-Q,
reporting a net loss of $648,145 on $701,805 of revenue for the
three months ended June 30, 2012, compared with a net loss of
$606,533 on $18,387 of revenue for the same period last year.
For the six months ended June 30, 2012, the Company had a net loss
of $1.2 million on $1.7 million of revenue, compared with a net
loss of $1.8 million on $36,775 of revenue for the same period of
2011.
The Company's balance sheet at June 30, 2012, showed $1.0 million
in total assets, $3.4 million in total liabilities, and a
shareholders' deficit of $2.4 million.
Bankruptcy is a Distinct Possibility
The Company has a history of recurring losses, which has resulted
in an accumulated deficit of $10.3 million as of June 30, 2012.
During the six months ended June 30, 2012, the Company recognized
$1.7 million of revenue, suffered a loss of $1.2 million and used
$472,634 of cash in its operating activities. At June 30, 2012,
the Company had negative working capital of $2.2 million and a
stockholders' deficit of $2.4 million. "These conditions raise
substantial doubt about the Company's ability to continue as a
going concern."
"We currently have operating liabilities that we cannot pay and
without an additional infusion of cash it is unlikely that the
Company will be able to continue as a going concern. There can be
no assurance whatsoever that the Company will be able to overcome
its current financial problems and bankruptcy is a distinct
possibility unless additional capital is raised promptly."
A copy of the Form 10-Q is available for free at:
http://is.gd/t6c2d4
Lake Forest, Illinois-based Acquired Sales Corp. through its
wholly owned subsidiary, Cogility Software Corporation, has
developed software technology that is solving problems facing the
U.S. defense and intelligence communities and many corporations.
The software technology allows customers to quickly access and
analyze data generated by disparate sources and stored in many
different databases.
AEOLUS PHARMACEUTICALS: Posts $3.1MM Net Income in June 30 Qtr.
---------------------------------------------------------------
Aeolus Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $3.06 million on $1.44 million of contract revenue
for the three months ended June 30, 2012, compared with net income
of $6.29 million on $1.91 million of contract revenue for the same
period during the prior year.
The Company reported net income of $8.80 million on $5.89 million
of contract revenue for the nine months ended June 30, 2012,
compared with net income of $2.45 million on $2.69 million of
contract revenue for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $2.65 million
in total assets, $15.95 million in total liabilities and a $13.29
million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/v3eslx
About Aeolus Pharmaceuticals
Based in Mission Viejo, California, Aeolus Pharmaceuticals Inc.
(OTC BB: AOLS) -- http://www.aeoluspharma.com/-- is developing a
variety of therapeutic agents based on its proprietary small
molecule catalytic antioxidants, with AEOL 10150 being the first
to enter human clinical evaluation. AEOL 10150 is a patented,
small molecule catalytic antioxidant that mimics and thereby
amplifies the body's natural enzymatic systems for eliminating
reactive oxygen species, or free radicals. Studies funded by the
National Institutes for Health are currently underway evaluating
AEOL 10150 as a treatment for exposure to radiation, sulfur
mustard gas and chlorine gas. A second compound, AEOL 11207, has
demonstrated efficacy in animal models of Parkinson's disease and
is currently being evaluated as a potential treatment for
epilepsy.
Haskell & White LLP, in Irvine, Calif., expressed substantial
doubt about the Company's ability to continue as a going concern
following the fiscal 2011 financial results. The independent
auditors noted that the Company has suffered recurring losses,
negative cash flows from operations and management believes the
Company does not currently possess sufficient working capital to
fund its operations past the second quarter of fiscal 2012.
AFFINION GROUP: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative
--------------------------------------------------------------
Moody's Investor Service downgraded the Corporate Family Rating
("CFR") of Affinion Group Holdings, Inc. to B3 from B2. The
ratings on the senior unsecured and senior subordinated notes were
also downgraded by one notch and the Speculative Grade Liquidity
Rating was lowered to SGL-3 from SGL-2. Moody's affirmed the Ba3
senior secured credit facility rating. The ratings outlook was
changed to negative from stable.
Ratings downgraded at Affinion Group Holdings, Inc. (and Loss
Given Default Assessments):
Corporate Family Rating, to B3 from B2
Probability of Default Rating, to B3 from B2
Speculative Grade Liquidity Rating, to SGL-3 from SGL-2
325 million senior unsecured notes due 2015, to Caa2 (LGD6, 93%)
from Caa1 (LGD6, 93%)
Ratings affirmed at Affinion Group, Inc. (and LGD Assessments
revised):
$165 million senior secured revolver due 2015, Ba3 (LGD2, to 21%
from 23%)
$1,125 million senior secured term loan due 2016, Ba3 (LGD2, to
21% from 23%)
Ratings downgraded at Affinion Group, Inc. (and LGD Assessments
revised):
$475 million senior unsecured notes due 2018, to Caa1 (LGD4,
65%) from B3 (LGD4, 66%)
$356 million senior subordinated notes due 2015, to Caa2 (LGD5,
84%) from Caa1 (LGD5, 84%)
Ratings Rationale
The downgrade in Affinion's CFR to B3 from B2 reflects weak demand
in the North American membership segment stemming from ongoing
changes in the regulatory environment and negative publicity
surrounding consumer credit monitoring and identity theft
protection programs offered by financial institutions. Moody's
expects double-digit revenue and earnings declines in this segment
over the next 6-12 months, only partly offset by positive momentum
in the loyalty and international segments. As such, debt to EBITDA
(using Moody's standard adjustments, including debt held at
Holdings) is expected to remain above 7 times.
Near-term liquidity is supported by the June 30, 2012 cash balance
of $87 million and Moody's expectation that Affinion will generate
at least $25 million of free cash flow over the next four
quarters. A portion of the cash balance is located outside the US
and would likely be subject to tax penalties if repatriated.
"Affinion's liquidity, however, could become constrained over the
next year as a result of our expectations for lower EBITDA and the
company's ability to comply with the leverage covenant contained
in the senior secured credit facility", stated Moody's analyst
Suzanne Wingo. This covenant, calculated at the operating company
level, steps down to 5.25 times at June 30, 2013. Moody's
considers it highly unlikely that Affinion could comply with the
covenant absent a de-leveraging transaction or amendment. As such,
Moody's lowered Affinion's liquidity rating to SGL-3 from SGL-2.
Management has publicly indicated they are considering options for
reducing leverage.
The B3 CFR further reflects Affinion's track record of debt-
financed dividends and acquisitions, and its reliance on strategic
partners including large financial institutions. The ratings are
supported by the company's large membership base, track record of
growing average revenue per member, direct marketing expertise,
and growth opportunities in international markets.
The negative outlook reflects Moody's expectation that
consolidated revenues will decline 4-6% over the next 12 months,
negatively impacting earnings by nearly 10% and making covenant
compliance unlikely at June 30, 2013 when the maximum leverage
covenant steps down. The outlook could revert to stable if more
visibility emerges around the North American regulatory framework
surrounding consumer protection programs, consolidated revenues
stabilize, covenant relief is obtained, and debt is reduced such
that debt / EBITDA (including debt at Holdings) can be sustained
below 6.5 times with adequate liquidity.
The ratings could be downgraded if Affinion is unable to reduce
debt or obtain covenant relief. Additionally, the ratings could be
downgraded if revenue or earnings decline more than expected, if
free cash flow turns negative or liquidity otherwise deteriorates,
or if regulatory or legal risks heighten. Conversely, the ratings
could eventually be upgraded if debt / EBITDA and free cash flow
to debt can be sustained below 6 times and above 3%, respectively.
Affinion is a leading provider of marketing services and loyalty
programs to many of the largest financial service companies
globally. The company provides credit monitoring and identity-
theft resolution, accidental death and dismemberment insurance,
discount travel services, loyalty programs, and various checking
account and credit card enhancement services. Affinion is 70%
owned by private equity sponsor Apollo Management V, L.P. and
generates revenues of about $1.5 billion annually.
The principal methodologies used in rating were Global Business &
Consumer Service Industry published in October 2010, and Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
AGRI-SOURCE FUELS: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------------
Laura Kinsler at The Tampa Tribune reports that Agri-Source Fuels
has filed for Chapter 11 reorganization.
"We're doing this to save the jobs and to save the assets," the
report quotes company President Rodney Sutton as saying. "It's
not a liquidation -- it's a reorganization."
According to the report, Agri-Source stopped paying rent in May
and was on the verge of being evicted. But Business Center owner
Jim Guedry agreed to renegotiate the lease as part of the
reorganization plan. The Company owes its vendors more than
$4 million and it owes Pasco County $198,000 in back taxes.
The report relates John Hagan, president of the Pasco Economic
Development Council, said he's glad the company is trying to work
out its issues. "In the long run, I think we all know that fuel
prices will continue to go up," he said. "The alternative fuel
market is still in its infancy. There will be a push to keep
these industries in place."
The report notes the company generated $1.3 million in revenues so
far this year and has assets valued at $13 million. It has never
turned a profit, and it was shut down for six weeks.
The report says the bankruptcy process allows Agri-Source to look
for a higher bidder. The goal, attorney Edward Peterson said, is
to try to get the most lucrative deal possible for the sale of the
company's assets. "The court will have to approve the bid process
as part of the reorganization plan," Mr. Peterson said. "We'll be
advertising in trade journals once the bid process is approved."
Based in Pensacola, Florida, Agri-Source Fuels, LLC, filed for
Chapter 11 protection (Bankr. M.D. Fla. Case No. 12-12205) on
Aug. 8, 2012. Edward J. Peterson, III, Esq., at Stichter, Riedel,
Blain & Prosser, PA, represents the Debtor. The Debtor estimated
assets of between $1 million and $10 million, and debts of between
$10 million and $50 million.
ALLISON TRANSMISSION: S&P Holds 'BB-' Rating on $850MM Term Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB-' issue-level
rating and '2' recovery rating on Indianapolis-based global
commercial-vehicle component supplier Allison Transmission Inc.'s
new term loan B-3 are unaffected by the upsizing to $850 million
from the planned $500 million. The new term loan (B-3 tranche)
would refinance a portion of its original $3.1 billion secured
term loan facility due in August 2014. "We expect this transaction
to be leverage neutral as the company will use proceeds to
refinance existing debt. As such, we estimate the company's
leverage will remain relatively unchanged. In March 2012, Allison
entered into an amendment to extend the maturity of $801.1 million
in principal amount of this term loan to August 2017 from August
2014," S&P said.
"Allison's leverage has consistently improved over the past year
(4.3x as of June 30, 2012, compared with 5x at year-end 2011 and
6.2x as of March 31, 2011), but, absent any meaningful debt
reduction, we believe it will remain between 4x and 4.5x until
end-market demand rebounds more strongly. The company had about $3
billion of reported debt outstanding as of June 30, 2012. Our 'B+'
corporate credit rating on Allison incorporates our assessment of
its financial risk profile as 'aggressive,' with positive cash
flow generation prospects over the next two years. We view the
company's business risk profile as 'fair,' reflecting good
profitability prospects (adjusted EBITDA margins of above 33%) and
a strong market share (which we expect to persist for the next
several years) as a supplier of fully automatic transmissions for
a wide range of commercial vehicles, a fairly cyclical business,"
S&P said.
RATINGS LIST
Allison Transmission Inc.
Corporate Credit Rating B+/Stable/--
Ratings Remain Unchanged
Allison Transmission Inc.
$850 mil. term loan B-3 BB-
Recovery Rating 2
ALLY FINANCIAL: US Treasury Names 2 Members to Board of Directors
-----------------------------------------------------------------
The Wall Street Journal's Tom Barkley and Andrew R. Johnson report
that the U.S. Treasury has named two appointees -- Gerald
Greenwald and Henry Miller -- to Ally Financial Inc.'s board of
directors, exercising its right as part of its bailout of the
largest U.S. auto lender during the financial crisis.
According to the report, the Treasury said Messrs. Greenwald and
Miller have experience with restructurings as well as the
transportation sector. They were approved at an Ally shareholder
meeting along with the re-election of current board members.
Ally, the former in-house financing arm of General Motors and
previously known as GMAC, is now 74%-owned by the U.S. government.
A significant part of the company's business remains financing GM
dealers and customers, as well as those of Chrysler Group LLC.
The report notes Mr. Greenwald, founder of transportation-focused
private-equity firm Greenbriar Equity Group, was previously chief
executive of United Airlines and held senior positions at Ford
Motor Co. and Chrysler. Mr. Miller, who has served as chairman of
Marblegate Asset Management LLC since it was formed in 2009, has
played a leadership role in restructurings for a number of firms.
The report notes the two positions are among the six spots
Treasury has the right to appoint to Ally's board as part of the
government's bailout of the company. The other four positions are
filled.
AMERICA WEST: Delays Form 10-Q for Second Quarter
-------------------------------------------------
America West Resources, Inc., informed the U.S. Securities and
Exchange Commission that it will be late in filing its quarterly
report on Form 10-Q for the period ended June 30, 2012. The
Company said it is in the process of preparing and reviewing the
financial and other information to be disclosed in the Quarterly
Report, and management does not believe the Form 10-Q can be
completed on or before the prescribed due date without
unreasonable effort or expense.
About America West
Based in Salt Lake City, Utah, America West Resources, Inc., is an
established domestic coal producer engaged in the mining of clean
and compliant (low-sulfur) coal. The majority of the Company's
coal is sold to utility companies for use in the generation of
electricity.
The Company reported a net loss of $23.46 million in 2011,
compared with a net loss of $16.14 million in 2010.
The Company's balance sheet at March 31, 2012, showed $30.76
million in total assets, $30.66 million in total liabilities and
$94,309 total stockholders' equity.
Hansen, Barnett & Maxwell, P.C., issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31,2011, citing working capital deficit and
significant losses which raised substantial doubt about the
Company's ability to continue as a going concern.
AMERICAN AIRLINES: Judge Gives Roadmap for Changing Pilots' CBA
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AMR Corp. defeated the pilots' union on balance, even
though the bankruptcy judge identified two requested changes in
the pilots' contract that are more than the company needs.
In a 106-page ruling Aug. 16, U.S. Bankruptcy Judge Sean H. Lane
said "it is clear that rejection of the agreement is necessary for
American to successfully reorganize."
The report relates that Judge Lane held a three-week trial on
AMR's request to modify the existing collective bargaining
agreement with the Allied Pilots Association. After trial, union
leaders agreed with AMR on a new contract. Judge Lane was
required to issue his decision on Aug. 16 because the pilots voted
down the contract negotiated by their leaders.
Judge Lane, according to the report, said the airline had proven
that "significant changes" are necessary given the "undisputed
fact" that American's "labor costs for pilots are among the
highest of its network competitors." In a defeat for the union,
Lane ruled that American isn't required first to negotiate a
merger with US Airways Group Inc. before seeking to modify the
existing contract. The judge also rejected the union's argument
that "American's business plan is fatally flawed." Instead, he
decided that the AMR business plan is "very similar" to those of
other airlines. Judge Lane found fault with two aspects of AMR's
proposal for the pilots. Until proposals for code-sharing and
furloughs are modified, Lane denied American's request to throw
out the existing labor agreement.
The report relates that according to the judge, AMR sought
"essentially unlimited code-sharing," or the right to sell tickets
for flights actually operated by other airlines. Code-sharing
would decrease the number of pilots employed by AMR. Even though
AMR "established need for significant changes to code-sharing
abilities," Judge Lane said that unlimited changes were "in excess
of the company's stated goals and contemplated arrangements
expressed in the business plan." according to the report
Judge Lane, the report adds, also rejected AMR's request "to
eliminate all restrictions on its ability to furlough," or lay off
surplus pilots until they're needed. He refused to grant the
request because AMR has the ability under the current contract to
furlough as many as 2,000 pilots, or "five times what the business
plan requires."
The report notes AMR won a significant victory when Lane approved
proposed changes in the so-called scope clause in the pilots'
contract. The provision limits the number of smaller regional
jets the airline can use. Pilots flying regional jets aren't
covered by the same contract and are paid less than pilots on
American's mainline fleet. Judge Lane said that the current
contract has "significant limitations" on the use of regional
jets. He said that changes are "reasonable and necessary" for AMR
to "compete with peers." Judge Lane approved changes in the scope
clause allowing American to use more regional jets than are now
contemplated in the business plan. Once his two objections are
rectified, Lane said AMR's proposal to cut employee costs in all
labor groups by 20% would be "fair and equitable" given the
airline's "extreme losses over the past decade."
The report notes that Judge Lane's opinion involved Section 1113
of the U.S. Bankruptcy Code, which sets a higher standard for
revising union contracts. After AMR modifies the two areas where
he found fault, Judge Lane said AMR can return to court once again
requesting changes in the pilots' contract. Judge Lane is holding
off a ruling on whether AMR can modify the contract with flight
attendants while the cabin staff votes on a contract proposal.
Mr. Rochelle points out that the Aug. 15 opinion wasn't good news
for flight attendants because AMR is demanding the same 20%
concessions from cabin workers that Judge Lane approved for
pilots.
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 NATURAL: Incurs $158,000 Net Loss in Second Quarter
------------------------------------------------------------
American Natural Energy Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $158,361 on $566,954 of revenue for the
three months ended June 30, 2012, compared with a net loss of
$22,071 on $653,951 of revenue for the same period during the
prior year.
The Company reported a net loss of $1.35 million on $1.03 million
of revenue for the six months ended June 30, 2012, compared with a
net loss of $642,720 on $1.31 million of revenue for the same
period a year ago.
The Company's balance sheet at June 30, 2012, showed $17.11
million in total assets, $10.44 million in total liabilities and
$6.67 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/Y0TOBu
About American Natural
American Natural Energy Corporation (TSX Venture: ANR.U) is a
Tulsa, Oklahoma-based independent exploration and production
company with operations in St. Charles Parish, Louisiana.
The Company reported a net loss of $905,792 in 2011, compared with
a net loss of $2.06 million in 2010.
In its audit report accompanying the 2011 financial statements,
MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company incurred a net loss in
2011 and has a working capital deficiency and an accumulated
deficit at Dec. 31, 2011.
AMERICAN AIRLINES: Judge Refuses to Let Scrap Pilots' Contract
--------------------------------------------------------------
Jack Nicas at Dow Jones' Daily Bankruptcy Review reports that a
U.S. bankruptcy judge said the parent of American Airlines
couldn't scrap its pilots' contract and impose more draconian
terms, further delaying AMR Corp.'s efforts to emerge from
bankruptcy.
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).
ARCAPITA BANK: Obtains Court OK for Warehouse Asset IPO
-------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Sean H. Lane granted Arcapita Bank BSC(c) permission
Thursday to launch an initial public offering of its European
warehousing assets following resolution of unsecured lender
Standard Chartered PLC's concerns that the plan was unclear on how
its interests would be protected.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March
19, 2012. The Debtors said they do not have the liquidity
necessary to repay a US$1.1 billion syndicated unsecured facility
when it comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita
that previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage
I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural
Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins
LLP as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
ARCAPITA BANK: Depositors Preparing Class Action
------------------------------------------------
Mandeep Singh at Gulf Daily News reports that 25 claimants --
including private investors and businesses -- are seeking a class
action against Bahrain-based Arcapita Bank to get their deposited
funds back, which have been frozen since it filed for bankruptcy.
The report says the group has already submitted powers of attorney
to Bahraini law firm Almoayed Chambers to file a suit in the U.S.
"We are expecting several more people, possibly as many as 200, to
come forward and issue their POAs," the report quotes Almoayed
Chambers chairman Aymen Almoayed as saying.
The report, citing court documents, says Arcapita has at least
$3,001,070,457 in claims against it based on the publicly
available bankruptcy docket. This includes a $255,194,405 claimed
by the Central Bank of Bahrain.
The report adds the documents showed the potential claims in
Bahrain ranged from $1,544 (BD583) to $661,315 (BD249,977). The
money deposited is believed to include personal savings and
inheritances.
About Arcapita Bank
Arcapita Bank B.S.C., also known as First Islamic Investment Bank
B.S.C., along with affiliates, filed for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March
19, 2012. The Debtors said they do not have the liquidity
necessary to repay a US$1.1 billion syndicated unsecured facility
when it comes due on March 28, 2012.
Falcon Gas Storage Company, Inc., later filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012.
Falcon Gas is an indirect wholly owned subsidiary of Arcapita
that previously owned the natural gas storage business NorTex Gas
Storage Company LLC. In early 2010, Alinda Natural Gas Storage
I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural
Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.)
acquired the stock of NorTex from Falcon Gas for $515 million.
Arcapita guaranteed certain of Falcon Gas' obligations under the
NorTex Purchase Agreement.
The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy
counsel, Linklaters LLP as corporate counsel, Towers & Hamlins
LLP as international counsel on Bahrain matters, Hatim S Zu'bi &
Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild
Inc. and financial advisor, and GCG Inc. as notice and claims
agent.
Milbank, Tweed, Hadley & McCloy LLP represents the Official
Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc.,
serves as its financial advisor and investment banker.
Founded in 1996, Arcapita is a global manager of Shari'ah-
compliant alternative investments and operates as an investment
bank. Arcapita is not a domestic bank licensed in the United
States. Arcapita is headquartered in Bahrain and is regulated
under an Islamic wholesale banking license issued by the Central
Bank of Bahrain. The Arcapita Group employs 268 people and has
offices in Atlanta, London, Hong Kong and Singapore in addition
to its Bahrain headquarters. The Arcapita Group's principal
activities include investing on its own account and providing
investment opportunities to third-party investors in conformity
with Islamic Shari'ah rules and principles.
The Arcapita Group has roughly US$7 billion in assets under
management. On a consolidated basis, the Arcapita Group owns
assets valued at roughly US$3.06 billion and has liabilities of
roughly US$2.55 billion. The Debtors owe US$96.7 million under
two secured facilities made available by Standard Chartered Bank.
Arcapita explored out-of-court restructuring scenarios but was
unable to achieve 100% lender consent required to effectuate the
terms of an out-of-court restructuring.
Subsequent to the Chapter 11 filing, Arcapita Investment Holdings
Limited, a wholly owned Debtor subsidiary of Arcapita in the
Cayman Islands, issued a summons seeking ancillary relief from
the Grand Court of the Cayman Islands with a view to facilitating
the Chapter 11 cases. AIHL sought the appointment of Zolfo
Cooper as provisional liquidator.
AVENTINE RENEWABLE: Said to Hire Houlihan as Advisor
----------------------------------------------------
Standard & Poor's Leveraged Commentary & Data reports that
Aventine Renewable Energy Holdings, Inc., has retained Houlihan
amid the company's liquidity crunch.
Aventine and each of its subsidiaries, have entered into separate
forbearance agreements with Citibank, N.A., and Wells Fargo
Capital Finance, LLC. Citibank is the administrative agent and
collateral agent under the Senior Secured Term Loan Credit
Agreement dated Dec. 22, 2010. Wells Fargo is the administrative
agent, collateral agent and sole lender under the Amended and
Restated Credit Agreement dated July 20, 2011.
As reported by the Troubled Company Reporter on Aug. 1, 2012,
under the Forbearance Agreements, the Lenders agreed not to take
any action to enforce any rights or remedies under the Loan
Agreements which may result from the potential events of default.
Both Forbearance Agreements will terminate on the earlier of (i)
Sept. 7, 2012, or (ii) the occurrence of a further event of
default under the Term Loan Agreement and Revolving Credit
Agreement or the occurrence of certain other events specified in
the Term Loan and Revolving Credit Forbearance.
In consideration for the Term Loan Forbearance, Aventine has
agreed to pay to Required Lenders (i) a forbearance fee of 1% of
the outstanding principal balance of loans under the Term Loan
Agreement, which fee will be paid in kind and (ii) the default
interest rate on the outstanding principal balance of the loans
under the Term Loan Agreement from the date of the Term Loan
Forbearance until Aventine is no longer in default under the Term
Loan Agreement, which interest will be paid in kind.
Aventine has also agreed to pay to Wells Fargo (i) a cash
forbearance fee equal to $91,566.38 which will be payable on
Sept. 7, 2012, and (ii) the default interest rate on the
outstanding obligations under the Revolving Credit Agreement.
About Aventine Renewable
Pekin, Illinois-based Aventine Renewable Energy Holdings, Inc.
(OTC BB: AVRW) -- http://www.aventinerei.com/-- markets and
distributes ethanol to many of the leading energy companies in the
U.S. In addition to producing ethanol, its facilities also
produce several by-products, such as distillers grain, corn gluten
meal and feed, corn germ and grain distillers dried yeast, which
generate revenue and allow the Company to help offset a
significant portion of its corn costs.
The Company and all of its direct and indirect subsidiaries
filed for Chapter 11 on April 7, 2009 (Bankr. D. Del. Lead Case
No. 09-11214). The Debtors filed their First Amended Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code on
Jan. 13, 201. The Plan was confirmed by order entered by the
Bankruptcy Court on Feb. 24, 2010, and became effective on
March 15, 2010.
The Company reported a net loss of $43.39 million for the year
ended Dec. 31, 2011, compared with a net loss of $25.46 million
for the ten months ended Dec. 31, 2010.
The Company's balance sheet at March 31, 2012, showed $384.90
million in total assets, $248.91 million in total liabilities and
$135.98 million in total stockholders' equity.
* * *
As reported by the TCR on July 20, 2012, Standard & Poor's Ratings
Services lowered its corporate credit rating on Aventine Renewable
Energy Holdings Inc. to 'CC' from 'CCC+'. "The downgrade reflects
the company's uncertain liquidity following its announcement that
on July 6, 2012, it entered into an amendment to its credit
agreement that could effectively prevent it from drawing on its
revolving credit facility and letters of credit," said Standard &
Poor's credit analyst Matthew Hobby.
In the July 23, 2012, edition of the TCR, Moody's Investors
Service downgraded Aventine's Corporate Family Rating (CFR) and
Probability of Default Rating to Caa3 from Caa1. The downgrade
reflects Aventine's weakened liquidity due to expected reduction
in unrestricted cash balances, dramatic increase in corn prices
resulting from ongoing severe drought in the main corn producing
areas in the US, decrease in crude oil prices, and reduction in
discount between ethanol and gasoline prices that could reduce
demand for corn-based ethanol.
B.A. WACKERLI: Volkswagen, Audi Can Terminate Dealership Pact
------------------------------------------------------------
Car dealer B.A. Wackerli, Co., failed at the district court level
to block attempts by Volkswagen of America, Inc., and Audi of
America, Inc., to terminate their dealer franchise agreement with
Wackerli. Volkswagen of America and Audi of America -- the U.S.
distributors for Volkswagen and Audi vehicles, respectively --
alleged that Wackerli breached its commitment to build a new dual-
brand dealership facility by March 2012. Wackerli contested the
decision by filing a case with the Idaho Transportation Department
in February 2012. In June, a hearing officer at the ITD issued
preliminary orders finding in favor of Volkswagen and Audi. The
hearing officer later denied Wackerli's petition to reconsider.
On July 13, 2012, after Wackerli had filed and the Department had
granted an emergency motion to stay termination of the dealer
agreements, the Director of the Transportation issued an Order of
Dismissal and Dissolution of Stay. The Director adopted the
Preliminary Orders as final. The day before the Department issued
its final order, Wackerli filed in state court. After legal
maneuverings by both sides, the dispute found its way before the
Idaho district court. Wackerli has asked the district court to
stay the ITD's administrative order while the district court
reviews the decision. In the alternative, Wackerli asked the
district court to enjoin Volkswagen and Audi's termination of the
dealer agreements.
In an Aug. 13, 2012 Memorandum Decision and Order available at
http://is.gd/SsOlWnfrom Leagle.com, Chief District Judge B. Lynn
Winmill denied both requests. "Given the narrow and deferential
standard of review, and the hearing officer's thorough decision
finding good cause for termination, the Court concludes that
Wackerli has not met its burden of demonstrating a likelihood of
success on the merits. It therefore fails to meet the threshold
for a stay pending appeal. Accordingly, Wackerli's motion is
denied.
The case is B.A. Wackerli, Co., a corporation, Plaintiff, v.
Volkswagen of America, Inc., a corporation; and Audi of America,
Inc., a corporation, Defendants, Case No. 4:12-cv-00373 (D.
Idaho).
About B.A. Wackerli
B.A. Wackerli Co. -- http://www.wackerliautocenter.com/-- is a
private dealer group in Idaho Falls, Idaho, where it operates
three separate dealerships: a GMC-Buick-Cadillac dealership, a
Volkswagen and Audi dealership, and a Subaru dealership. It filed
for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. 09-40202) on
Feb. 20, 2009, estimating estimated $1 million to $10 million in
both assets and debts. Judge Jim D. Pappas presides over the
case. Steven William Boyce, Esq. -- sboyce@justlawidaho.com --
serves as the Debtor's counsel. The petition was signed by Steven
B. Wackerli, president of the company.
BERNARD L. MADOFF: Advocates $2.4 Billion Customer Payment
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the trustee for Bernard L. Madoff Investment
Securities LLC said in papers filed in advance of an Aug. 22
hearing saying that customers of Madoff aren't entitled to
interest on their claims.
According to the report, in July Madoff trustee Irving Picard
filed papers for the bankruptcy judge to authorize a second
distribution to customers. Last year, Picard Mr. paid customers
about 4.6% of their claims, amounting to some $335 million. He
was unable to pay more on account of appeals customers were taking
from settlements and other rulings.
The report relates that having won several appeals, the trustee
sought court permission to distribute as much as $2.5 billion to
customers. The amount to be distributed, and the amount to be
held back, turns on whether the court requires the trustee to pay
interest on claims, or some other method to take into account the
length of time customers had investments with Madoff. Some
customers contend the trustee must increase the amount of each
claim by 9%, representing the interest rate on judgments under New
York state law.
In his court filing, the trustee said the Securities Investor
Protection Act doesn't provide for any interest accrual on claims.
He also said that interest has never been paid in any brokerage
liquidations under SIPA. Whether there is a holdback for interest
makes a large difference in how much Mr. Picard can distribute.
If the holdback for interest is 9%, the second distribution will
be about $1.5 billion, or 20.6% of each customer's claim. If the
holdback for interest is only 3%, the distribution will be more
than $2.4 billion, or 33.5% of customers' claims. Mr. Picard
believes there should be no holdback at all for interest. If
there is a holdback, he wants the bankruptcy judge to specify 3%,
not 9%.
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.
BIOLIFE SOLUTIONS: Incurs $499,000 Net Loss in Second Quarter
-------------------------------------------------------------
Biolife Solutions, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $498,893 on $1.09 million of total revenue for the
three months ended June 30, 2012, compared with a net loss of
$436,679 on $622,848 of total revenue for the same period during
the prior year.
The Company reported a net loss of $795,770 on $1.93 million of
total revenue for the six months ended June 30, 2012, compared
with a net loss of $1.06 million on $1.23 million of total revenue
for the same period a year ago.
The Company reported a net loss of $1.95 million in 2011, compared
with a net loss of $1.98 million in 2010.
The Company's balance sheet at June 30, 2012, showed $3.06 million
in total assets, $14.81 million in total liabilities, and a
$11.74 million total shareholders' deficiency.
"We have been unable to generate sufficient income from operations
in order to meet our operating needs and have an accumulated
deficit of approximately $55 million at June 30, 2012. This
raises substantial doubt about our ability to continue as a going
concern," the Company said in its quarterly report for the period
ended June 30, 2012.
Following the 2011 results, Peterson Sullivan LLP, in Seattle,
Washington, expressed substantial doubt about BioLife Solutions'
ability to continue as a going concern. The independent auditors
noted that the Company has been unable to generate sufficient
income from operations in order to meet its operating needs and
has an accumulated deficit of $54 million at Dec. 31, 2011.
A copy of the Form 10-Q is available for free at:
http://is.gd/QRNTvM
About BioLife Solutions
Bothell, Washington-based BioLife Solutions, Inc. develops and
markets patented hypothermic storage and cryopreservation
solutions for cells, tissues, and organs, and provides contracted
research and development and consulting services related to
optimization of biopreservation processes and protocols.
BIOVEST INTERNATIONAL: Incurs $1.7-Mil. Net Loss in June 30 Qtr.
----------------------------------------------------------------
Biovest International, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $1.77 million on $904,000 of total revenue for the
three months ended June 30, 2012, compared with a net loss of
$1.82 million on $1.06 million of total revenue for the same
period a year ago.
The Company reported a net loss of $9.16 million on $3.18 million
of total revenue for the nine months ended June 30, 2012, compared
with a net loss of $13.42 million on $3.12 million of total
revenue for the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $5.03 million
in total assets, $43 million in total liabilities, and a
$37.96 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/o4Dega
About Biovest International
Biovest International, Inc. -- http://www.biovest.com/-- is an
emerging leader in the field of active personalized
immunotherapies. In collaboration with the National Cancer
Institute, Biovest has developed a patient-specific, cancer
vaccine, BiovaxID(R), with three clinical trials completed,
including a Phase III study, demonstrating evidence of safety and
efficacy for the treatment of indolent follicular non-Hodgkin's
lymphoma.
Headquartered in Tampa, Florida, with its bio-manufacturing
facility based in Minneapolis, Minnesota, Biovest is publicly-
traded on the OTCQB(TM) Market with the stock-ticker symbol
"BVTI", and is a majority-owned subsidiary of Accentia
Biopharmaceuticals, Inc. (OTCQB: "ABPI").
Biovest, along with its subsidiaries, Biovax, Inc., AutovaxID,
Inc., Biolender, LLC, and Biolender II, LLC, filed for Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Case No. 08-17796) on
Nov. 10, 2008. Biovest emerged from Chapter 11 protection, and
its reorganization plan became effective, on Nov. 17, 2010.
In its audit report for the fiscal 2011 financial statements,
CHERRY, BEKAERT, & HOLLAND L.L.P., in Tampa, Fla., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
incurred cumulative net losses since inception of approximately
$161 million and cash used in operating activities of
approximately $4.6 million during the two years ended Sept. 30,
2011, and had a working capital deficiency of approximately
$2.2 million at Sept. 30, 2011.
The Company reported a net loss of $15.28 million on $3.88 million
of total revenue for the year ended Sept. 30, 2011, compared with
a net loss of $8.58 million on $5.35 million of total revenue
during the prior year.
BIOZONE PHARMACEUTICALS: Incurs $1.8MM Net Loss in 2nd Quarter
--------------------------------------------------------------
BioZone Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $1.85 million on $4.91 million of sales for the three
months ended June 30, 2012, compared with a net loss of $568,402
on $2.57 million of sales for the same period a year ago.
The Company reported a net loss of $11.24 million on $8.42 million
of sales for the six months ended June 30, 2012, compared with a
net loss of $1.11 million on $5 million of sales for the same
period during the prior year.
The Company's balance sheet at June 30, 2012, showed $9.07 million
in total assets, $13 million in total liabilities, and a
$3.93 million total shareholders' deficiency.
A copy of the Form 10-Q is available for free at:
http://is.gd/TzUUIO
About Biozone Pharmaceuticals
Biozone Pharmaceuticals, Inc., formerly, International Surf
Resorts, Inc., was incorporated under the laws of the State of
Nevada on Dec. 4, 2006, to operate as an internet-based provider
of international surf resorts, camps and guided surf tours. The
Company proposed to engage in the business of vacation real estate
and rentals related to its surf business and it owns the Web site
isurfresorts.com. During late February 2011, the Company began to
explore alternatives to its original business plan. On Feb. 22,
2011, the prior officers and directors resigned from their
positions and the Company appointed a new President, Director,
principal accounting officer and treasurer and began to pursue
opportunities in medical and pharmaceutical technologies and
products. On March 1, 2011, the Company changed its name to
Biozone Pharmaceuticals, Inc.
Since March 2011, the Company has been engaged primarily in
seeking opportunities related to its intention to engage in
medical and pharmaceutical businesses. On May 16, 2011, the
Company acquired substantially all of the assets and assumed all
of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an
Asset Purchase Agreement dated as of that date. Aero manufactures
markets and distributes a line of dermatological products under
the trade name of Baker Cummins Dermatologicals.
On June 30, 2011, the Company acquired the Biozone Labs Group
which operates as a developer, manufacturer, and marketer of over-
the-counter drugs and preparations, cosmetics, and nutritional
supplements on behalf of health care product marketing companies
and national retailers.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Paritz and Company. P.A., in Hackensack,
N.J., expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company does not have sufficient cash balances to meet working
capital and capital expenditure needs for the next twelve months.
In addition, as of Dec. 31, 2011, the Company has a shareholder
deficiency and negative working capital of $4.37 million. The
continuation of the Company as a going concern is dependent on,
among other things, the Company's ability to obtain necessary
financing to repay debt that is in default and to meet future
operating and capital requirements.
Biozone reported a net loss of $5.45 million in 2011, compared
with a net loss of $319,813 in 2010.
BONDS.COM GROUP: Incurs $2.8 Million Net Loss in Second Quarter
---------------------------------------------------------------
Bonds.com Group, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.81 million on $1.88 million of revenue for the three months
ended June 30, 2012, compared with a net loss of $2.19 million on
$931,675 of revenue for the same period a year ago.
The Company reported a net loss of $3.89 million on $3.95 million
of revenue for the six months ended June 30, 2012, compared with a
net loss of $5.32 million on $1.75 million of revenue for the same
period a year ago.
The Company reported a net loss of $14.45 million in 2011,
compared with a net loss of $12.51 million in 2010.
The Company's balance sheet at June 30, 2012, showed
$10.87 million in total assets, $14.25 million in total
liabilities, and a $3.38 million total stockholders' deficit.
Since its inception, the Company has generated limited revenues
and has an accumulated deficit of approximately $48,800,000 at
June 30, 2012, used approximately $6,200,000 of cash in operations
for the six months ended June 30, 2012, and at June 30, 2012, had
a stockholders' deficiency of $3,400,000 and a working capital
deficiency of $4,700,000. Operations have been funded using
proceeds received from the issuance of common and preferred stock
and the issuance of notes to related and unrelated parties.
Daszkal Bolton LLP, in Boca Raton, Florida, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Dec. 31, 2011, citing recurring losses and
negative cash flows from operations that raise substantial doubt
about the Company's ability to continue as a going concern.
A copy of the Form 10-Q is available for free at:
http://is.gd/boYYpt
About Bonds.com Group
Based in Boca Raton, Florida, Bonds.com Group, Inc. (OTC BB: BDCG)
-- http://www.bonds.com/-- through its subsidiary Bonds.com,
Inc., serves institutional fixed income investors by providing a
comprehensive zero subscription fee online trading platform. The
Company designed the BondStation and BondStationPro platforms to
provide liquidity and competitive pricing to the fragmented Over-
The-Counter Fixed Income marketplace.
The Company differentiates itself by offering through Bonds.com,
Inc., an inventory of more than 35,000 fixed income securities
from more than 175 competing sources. Asset classes currently
offered on BondStation and BondStationPro, the Company's fixed
income trading platforms, include municipal bonds, corporate
bonds, agency bonds, certificates of deposit, emerging market
debt, structured products and U.S. Treasuries.
BORDERS GROUP: Judge Disallows Gift Card Recovery Suit
------------------------------------------------------
Sean McLernon at Bankruptcy Law360 reports that a New York
bankruptcy judge on Tuesday refused to allow holders of Borders
Group Inc. gift cards to pursue an untimely class action to
recover the amounts remaining on the cards, ruling that the
holders were provided sufficient notice of the bar date for
claims.
Bankruptcy Law360 relates that the card holders argued that they
should be allowed to file late claims because Borders failed to
provide them with actual notice of the bar date, but U.S.
Bankruptcy Judge Martin Glenn said that holders were not "known
creditors."
About Borders Group
Borders Group operated book, music and movie superstores and mall
based bookstores under the Borders, Waldenbooks, Borders Express
and Borders Outlet names, as well as Borders-branded airport
stores in the United States. At Jan. 29, 2011, the Company
operated 639 stores in the United States and 3 in Puerto Rico.
The Company also operated a proprietary e-commerce Web site --
http://www.Borders.com/-- launched in May 2008, which included
both in-store and online e-commerce components. As of Feb. 11,
2011, Borders employed a total of 6,100 full-time employees,
11,400 part-time employees, and roughly 600 contingent employees.
Borders Group Inc. and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in
Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S.
Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq.,
at Kasowitz, Benson, Torres & Friedman LLP, in New York, served as
counsel to the Debtors. Jefferies & Company's Inc. served as the
financial advisor. DJM Property Management is the lease and real
estate services provider. AP Services LLC served as the interim
management and restructuring services provider. The Garden City
Group, Inc., acted as the claims and notice agent.
Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein
LLP, served as counsel to the DIP Agents. Lowenstein Sandler
represented the official unsecured creditors committee for Borders
Group.
The Debtor disclosed $1.28 billion in assets and $1.29 billion in
liabilities as of Dec. 25, 2010.
Borders selected proposals by Hilco and Gordon Brothers to conduct
going out of business sales for all stores after no going concern
offers of higher value were submitted by the deadline.
In January 2012, Borders' First Amended Joint Chapter 11 Plan of
Liquidation became effective, and the Company emerged from Chapter
11 protection. The Court confirmed the Plan filed by the Debtors
and the Official Committee of Unsecured Creditors at a Dec. 20,
2011 hearing.
The Debtors have been renamed BGI Inc.
BROOKLYN CENTER: Moody's Lowers G.O. Debt Rating to 'Ba3'
---------------------------------------------------------
Moody's Investors Service has downgraded to Ba3 from Baa2 the
rating on Brooklyn Center Independent School District No. 286's
(MN) outstanding general obligation debt. The Ba3 rating affects
$56.1 million in outstanding long-term debt secured by the
district's general obligation unlimited tax pledge. A negative
outlook has been assigned.
Summary Rating Rationale
The Ba3 rating reflects the district's distressed financial
position characterized by a prolonged trend of deficit General
Fund balances; declining enrollment trends; limited and mature tax
base in the Twin Cities metropolitan area experiencing significant
valuation declines; high debt burden with slow principal
amortization; and continued designation of Statutory Operating
Debt (SOD) by the Minnesota Department of Education. The negative
outlook is based on Moody's expectation that the district will
remain in SOD status and will be challenged to restore
structurally balanced operations in the mid-term given aggressive
budgeting assumptions.
The current rating action applies to the district's underlying
general obligation rating. In addition to the district's general
obligation pledge, debt service on the bonds is secured by the
Minnesota School District Credit Enhancement (MSDE) Program. The
enhanced rating, which is currently Aa2 with a negative outlook,
is based on the MSDE program mechanics and the credit profile of
the State of Minnesota (general obligation rated Aa1/negative
outlook). The rating action and credit opinion described in this
report apply solely to the district's underlying general
obligation credit quality and do not apply to the MSDE program's
credit quality.
Strengths
- Some degree of state oversight of district financial
operations
- Proximity to the Twin Cities metropolitan area
Challenges
- Multi-year trend of deficit General Fund balances is likely to
continue despite ongoing state oversight and deficit reduction
plans
- Historical lack of voter support for excess operating levies
- Decreasing enrollment
- Reliance on cash flow borrowing for operations; proceeds from
annual note issuances are required to redeem the prior year's
maturing notes
- Significant valuation declines; wealth income indices lag
state and national medians
- High debt burden
Outlook
The assignment of the negative outlook reflects Moody's
expectation that the district is unlikely to achieve the
structural changes necessary to stabilize operations in the near-
term.
What Could Change The Rating - Up (Removal of negative outlook)
- Consistent trend of material General Fund operating surpluses
that leads to a stabilized financial position and improved
liquidity
- Successful implementation and realization of updated Statutory
Operating Debt plan, including ability to gain voter support
for levy requests
What Could Change The Rating - Down
- Continued operating shortfalls that further weaken the
district's deficit General Fund balance
- Increases in the amount and/or frequency of cash flow
borrowing
- Further declines in enrollment that lead to declines in
already pressured revenues
The principal methodology used in this rating was General
Obligation Bonds Issued by U.S. Local Governments published in
October 2009.
BURCON NUTRASCIENCE: Had C$1 Million Net Loss in June 30 Quarter
----------------------------------------------------------------
Burcon NutraScience Corporation reported a net loss of
C$1.04 million for the three months ended June 30, 2012, compared
with a net loss of C$1.19 million for the same period last year.
As at June 30, 2012, Burcon has not yet generated any revenues
from its technology.
The Company's balance sheet at June 30, 2012, showed
C$9.25 million in total assets, C$800,688 in total liabilities,
and shareholders' equity of C$8.45 million.
According to the regulatory filing, as at June 30, 2012, the
Company had not earned revenues from its technology, had an
accumulated deficit of C$53.93 million and had relied on equity
financings, private placements, rights offerings and other equity
transactions to provide the financing necessary to undertake its
research and development activities. "These conditions indicate
that existence of material uncertainty that casts substantial
doubt about the ability of the Company to meet its obligations as
they become due and, accordingly, its ability to continue as a
going concern."
A copy of the Company's interim financial statements is available
for free at http://is.gd/cnXbYu
A copy of the Managements Discussion and Analysis for the three
months ended June 30, 2012, is available for free at:
http://is.gd/YxQE6V
Headquartered in Vancouver, Canada, Burcon NutraScience
Corporation is a research and development company that is
developing its plant protein extraction and purification
technology in the field of functional, renewable plant proteins.
The Company has developed CLARISOY(TM), a soy protein isolate and
is developing Puratein(R), Supertein(TM) and Nutratein(TM), three
canola protein isolates; and PEAZAZZ(TM), a pea protein isolate.
BURGER KING: Moody's Affirms 'B2' CFR/PDR; Outlook Stable
---------------------------------------------------------
Moody's Investors Service revised Burger King Corporation's
(Burger King) rating outlook to stable from negative, and affirmed
all existing ratings, including the company's B2 Corporate Family
and Probability of Default ratings. In addition, Moody's affirmed
the Caa1 rating on the $685 million unsecured discount notes of
Burger King Capital Holdings, LLC .
Ratings Rationale
The change in outlook to stable from negative reflects Moody's
expectation that Burger King will continue to strengthen debt
protection measures through same store sales growth, systemwide
unit expansion, and debt reduction in excess of mandatory
amortization. Burger King has been able to improve earnings
despite a challenging operating environment, by materially
reducing costs and improving same store sales with the rollout of
new and innovative product offerings. The stable outlook also
reflects the company's very good liquidity.
Ratings affirmed and LGD Assessments updated are:
Burger King Corporation
Corporate Family Rating at B2
Probability of Default Rating at B2
$150 million senior secured revolver due 2015 rated Ba3 (LGD 2,
26% from LGD 2, 24%)
$1.75 billion senior secured term loan B due 2016 rated Ba3
(LGD 2, 26% from LGD 2, 24%)
$800 million senior unsecured notes due 2018 rated B3 (LGD 5,
76% from LGD 5, 71%)
Burger King Capital Holdings LLC:
$685 million (current face amount $579 million) senior
unsecured discount notes due 2019 rated Caa1 (LGD 6, 94% from
LGD 6, 92%)
In addition, Moody's will be transferring the B2 Corporate Family
Rating and B2 Probability of Default Rating to Burger King Capital
Holdings, LLC, the highest entity within the organizational
structure with rated debt, from Burger King Corporation.
The B2 Corporate Family Rating reflects the company's relatively
weak debt protection metrics and Moody's view that soft consumer
spending and persistently high level of promotional activity by
its competitors will remain a challenge. The ratings also
incorporate Burger King's relatively aggressive financial policy
that has favored shareholders. The ratings are supported by the
company's meaningful scale, strong brand recognition, geographic
reach, moderate business risk, and very good liquidity.
Factors that could result in upward ratings pressure include a
sustained improvement in operating performance, particularly same
store sales, as well as continued progress in reducing outstanding
debt levels. Specifically, an upgrade could occur in the event the
company is able to sustain debt to EBITDA of under 5.0 times and
EBITA coverage of interest of at least 2.0 times. A higher rating
would also require maintaining very good liquidity.
Ratings could be negatively impacted by a deterioration in same
store sales performance that caused a sustained weakening in
credit metrics from current levels. Specifically, a downgrade
could occur if debt to EBITDA over the next twelve months were to
approach 6.5 times or if EBITA to interest approached 1.1 time. A
material deterioration in liquidity for any reason could also
pressure the ratings.
The principal methodology used in rating Burger King Corporation
was the Global Restaurant 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.
Burger King Corporation, with headquarters in Miami, Florida,
operates 818 and franchises 11,786 Burger King hamburger quick
service restaurants. Annual revenues are about $2.3 billion,
although systemwide sales are over $15.3 billion.
CAESERS ENTERTAINMENT: Fitch Rates New $750-Mil. Add-on Notes 'B-'
------------------------------------------------------------------
Fitch Ratings rates Caesars Entertainment Operating Company,
Inc.'s (OpCo; CEOC) $750 million proposed add-on issuance to the
8.5% senior secured notes due 2020 'B-/RR2'. Fitch has also
affirmed the Issuer Default Ratings (IDRs) of CEOC and related
issuers and has revised certain issue specific ratings per the
agency's updated rating definitions.
Proceeds from the add-on issuance will be used to repay a portion
of the B1-B3 term loans outstanding. In conjunction with the
issuance CEOC will solicit extensions on its B1-B3 term loans
maturing in 2015 and its revolver commitments maturing 2014.
Extended term loans and revolver commitments will be due 2018 and
2017, respectively. CEOC will repay 50% of the principal
outstanding on the extending term loans and reduce commitments by
the same percentage on the extending revolver commitments. CEOC
will also offer the 2014 revolver lenders to convert commitments
into the extended term loans. Following the conversion CEOC will
offer to repay 50% of the amounts converted.
The transactions are an incremental credit positive as CEOC
continues to chip away at its 2015 maturity wall. Prior to these
transactions taking effect, CEOC's 2015 maturities include $2
billion of B1-B3 term loans, $215 million of second-lien notes,
and $792 million of unsecured notes ($427 million held by the
parent). It remains to be seen how much of the extension is
agreed to by the B1-B3 lenders. Earlier this year, CEOC pushed
out nearly $3 billion of B1-B3 loans using a similar strategy of
issuing first-lien notes to partially repay lenders agreeing to
extend (40% repayment vs. 50% currently being offered).
Overall, Fitch is now more negative on CEOC's operating and free
cash flow prospects as compared to earlier in this year. Caesars
Entertainment Corp.'s (Caesars; parent) reported second-quarter
results were disappointing with weakness shown in most of its
reporting segments. This is consistent with the lackluster growth
seen in the recent months across the regional markets and on the
Las Vegas Strip. Fitch believes that these trends are driven by
the weakening consumer sentiment and does not see these trends
reversing in 2012.
Looking ahead into 2013, property openings impacting Caesars'
Chicago-area and Atlantic City properties will anniversary, which
should make for easier comparisons. That said, Fitch's base case
now assumes flat-to-low-single digit growth for Caesars
properties' top-line which may not be enough to offset CEOC's
increasingly onerous interest expense burden and the need to
reinvest more meaningfully into its existing properties. In
Fitch's base case, CEOC burns through roughly $450 million- $500
million annually in FCF in 2012 and 2013.
The Rating Outlook on Caesars' Issuer Default Rating (IDR) is
Stable, which continues to reflect the company's available
liquidity and considerable time until the 2015 maturities.
Assuming that the recent negative trends do not reverse themselves
by late this year or early next year Fitch may revise Caesars'
Outlook to Negative as prospects of Caesars successfully
refinancing the remaining 2015 and later maturities would become
increasingly doubtful without a visible path to a sustainable FCF
model.
When considering an Outlook revision Fitch will also contemplate
the parent's ability and willingness to support CEOC. The parent
generates meaningful income outside of CEOC including interest
income on $1.1 billion of CEOC's senior unsecured notes held by
the parent and management fees from the FCF-positive PropCo.
Fitch also thinks that the parent will maintain its majority stake
in Caesars Interactive following the announced sale of shares in
the division to Rock Gaming. While near-term legalization of
online poker remains questionable Fitch suspects that Playtika
(acquired in 2011) is beginning to generate meaningful EBITDA
(judging by the increase in the Other segment of the consolidated
financials), which can be used to support CEOC.
Security specific rating revisions:
Effective Aug. 10, 2012 Fitch updated its Ratings Definitions,
expanding the application of '+/-' to corporate issue ratings at
the 'CCC' level. These designations are limited to instrument
ratings and will not be used for IDRs, leaving 'CCC' as the sole
issuer rating within the 'CCC' category.
The rating revisions do not indicate any change of Fitch's opinion
regarding credit quality; rather they reflect the update to the
Rating Definitions noted above and the resulting impact of issue-
specific notching relative to the IDR according to Fitch's
Recovery Rating criteria.
Fitch has taken the following rating actions:
Caesars Entertainment Corp.
-- Long-term IDR affirmed at 'CCC'.
Caesars Entertainment Operating Co.
-- Long-term IDR affirmed at 'CCC';
-- Senior secured first-lien revolving credit facility and term
loans revised to 'B-/RR2' from 'B/RR2';
-- Senior secured first-lien notes revised to 'B-/RR2' from
'B/RR2';
-- Senior secured second-lien notes revised to 'CC/RR6' from 'C/
RR6';
-- Senior unsecured notes with subsidiary guarantees revised to
'CC/RR6' from 'C/RR6';
-- Senior unsecured notes without subsidiary guarantees affirmed
at 'C/RR6'.
Chester Downs and Marina LLC (and Chester Downs Finance Corp as
co-issuer)
-- Long-term IDR affirmed at 'B-';
-- Senior secured notes affirmed at 'BB-/RR1'.
Caesars Linq, LLC & Caesars Octavius, LLC
-- Long-term IDR affirmed at 'CCC';
-- Senior secured credit facility revised to 'CCC+/RR3' from
'B-/RR3'.
CASCADE AG: Has $250,000 Interim DIP Loan From One PacificCoast
---------------------------------------------------------------
Bankruptcy Judge Timothy W. Dore gave Cascade AG Services, Inc.,
interim authority to borrow up to $250,000 in postpetition secured
financing from One PacificCoast Bank, FSB or its affiliates.
Cascade also obtained permission to use cash collateral of One
PacificCoast Bank.
As of the Petition Date, the Debtor owed One PacificCoast
$2,655,065, consisting of principal in the amount of $2,499,973,
$7,527 in accrued interest and fees, and $147,564 in attorneys'
fees and other costs. As collateral for the Prepetition Loan, the
Debtor granted One PacificCoast a security interest in and lien
upon all of the assets of the Debtor.
In a separate order, the Court permitted Cascade to use cash
collateral of its other prepetition secured creditors, on an
interim basis, through Sept. 7. The ruling provides that all
creditors claiming or asserting a pre-petition security interest
in estate assets are granted replacement liens not only on any
proceeds of their collateral, but also replacement liens on all
property of the Debtor's -- estate acquired after the bankruptcy
filing date. The Debtor's right to use a creditor's cash
collateral will cease immediately upon conversion of the case to a
Chapter 7 case or if a trustee is appointed, or elected in the
Chapter 11 case.
Columbia State Bank objected to the Debtor's request to use cash
collateral and provide Columbia and other creditors with a
replacement lien in postpetition cash collateral, "but only to the
extent of the diminution in Cash Collateral" and "only to the
extent of the enforceability of such Cash Collateral Secured
Party's liens and/or security interest in the pre-petition Cash
Collateral, provided however, that the replacement liens shall be
subordinate in priority to a $165,000 carveout for postpetition
administrative and professional fees, on a pro rata basis."
According to Columbia, the Debtor should, at least by the final
hearing, produce evidence of the actual value of the cash
collateral and equipment. At the onset of the case, a
representative of the Debtor indicated in court papers that (i)
the cash collateral is valued at roughly $10.33 million and
includes accounts receivable; prepaid expenses; finish goods
(shelf-stable refrigerated, and fresh-pack goods); work in process
(such as 2012 crops); raw materials (ingredients, packaging, and
fresh cucumbers); and inventory (pickles, sauerkraut, peppers and
brine); and (ii) the fair market value of the Debtor's other
machinery and equipment, as of March 2011, was $14.69 million.
According to Columbia, there is no bank statement or accounting
records to support the valuation of the cash collateral.
Moreover, the machinery and equipment valuation is over a year and
half old and was not provided to the Court or the creditors. In
addition, there is no evidence as to whether all of the machinery
and equipment valued in March 2011 is still in the Debtor's
possession.
Columbia also takes exception with the Debtor's proposal to have
the DIP Lender's prepetition claims rolled into the superpriority
lien to the extent of the diminution of in the value of the DIP
Lender's interests in the prepetition collateral.
Columbia is represented by:
Deborah A. Crabbe, Esq.
FOSTER PEPPER PLLC
1111 Third Avenue, Suite 3400
Seattle, WA 98101-3299
Tel: (206) 447-4400
Fax: (206) 447-9700
E-mail: crabd@foster.com
Washington Federal, formerly known as Washington Federal Savings
and Loan Association, does not object to the Debtor's proposed use
of cash collateral on an interim basis pending a final hearing,
but objects to certain expenditures in the proposed budget and
terms of the proposed order. Specifically, Washington Federal
noted the proposed budget contains a weekly distribution of $3,500
to "Owners." However, there is no explanation why paying Owners
"a distribution" on an interim basis is essential to maintaining
the business. Also, the Budget proposes to pay $48,500 to
Hamstreet and Associates and $22,000 to Cairncross and Hemplemann
during the first week, but payment of these fees is premature,
according to Washington Federal, especially because their
retention has not been authorized and cannot be approved within
the first 21 days of the case pursuant to Fed. Rule Bankr. P.
6003(a).
Washington Federal is represented by:
Charles R. Ekberg, Esq.
Gregory R. Fox, Esq.
LANE POWELL PC
1420 Fifth Avenue, Suite 4100
Seattle, WA 98101-2338
Tel: 206-223-7000
Fax: 206-223-7107
E-mail: ekbergc@lanepowell.com
foxg@lanepowell.com
Washington Federal, the assignee from the Federal Deposit
Insurance Corporation receivership of Horizon Bank, is owed
roughly $2,600,000 on a loan Horizon Bank made to Cascade in April
2004.
The Interim DIP Order provides for a carve-out for (a) amounts
payable pursuant to 28 U.S.C. Sec. 1930(a)(6) and any fees payable
to the clerk of the Bankruptcy Court; and (b) allowed, unpaid
postpetition fees and expenses of all estate professionals,
including attorneys, accountants, and other professionals
appointed by the Court or retained in the Bankruptcy Case by the
Debtor or the official committee of unsecured creditors appointed
in the case, but the amount entitled to priority will not exceed
$185,000 without the prior written consent of the DIP Lender.
Uesugi Farms, Inc., a California-based pepper farmer, filed a
limited objection to the Debtor's request to use cash collateral.
Uesugi, which alleged it is owed $129,635 for peppers sold to
Cascade, said it lodged the limited objection (i) to ensure that
the statutory priority trust rights granted to unpaid produce
sellers like Uesugi under the Perishable Agricultural Commodities
Act of 1930, as amended, 7 U.S.C. Sec. 499e(c), are not "usurped,
diminished, subordinated or vitiated" by granting secured lenders
or other creditors lien rights or priority interests in the
Debtor's PACA assets which purport to come ahead of Uesugi's PACA
trust rights to such assets; and (ii) to protect the statutory
rights of Uesugi to prompt payment from the trust assets which are
to be held in trust by Debtor and which are not part of the
bankruptcy estate. Uesugi said the balance due to it consists of
$99,823 in principal and $29,811 in contractual late charges.
Uesugi Farms is represented by:
Mark J. Rosenblum, Esq.
EISENHOWER & CARLSON, PLLC
1200 Wells Fargo Plaza
1201 Pacific Avenue
Tacoma, WA 98402
Tel: 253-572-4500
Fax: 253-272-5732
E-mail: mrosenblum@eisenhowerlaw.com
Both Interim Orders provide that holders of valid and enforceable
prepetition and postpetition Perishable Agricultural Commodities
Act Trust Claims will retain their priority trust rights, if any,
to the extent provided by law against all assets held by the
Debtor and its estate, and the Debtor will pay valid and
enforceable post petition PACA trust Claims when due or as agreed
by PACA Creditors.
A final hearing on the DIP financing and use of Cash Collateral
will be held Sept. 7 at 9:30 a.m. Objections are due Aug. 31.
About Cascade AG
Cascade AG Services, Inc., dba Pleasant Valley Farms, fdba
Mountain View Produce, Inc., fdba Staffanson Harvesting LLC, fdba
Sterling Investment Group, L.L.C., filed for Chapter 11 bankruptcy
(Bankr. W.D. Wash. Case No. 12-18366) on Aug. 13, 2012. It
scheduled $25,820,499 in assets and $22,255,482 in liabilities.
Lawyers at Cairncross & Hempelmann PS serve as the Debtor's
counsel. The petition was signed by Craig Staffanson, president.
The U.S. Trustee appointed seven creditors to the Official
Unsecured Creditors' Committee.
DIP lender One PacificCoast Bank, FSB, is represented by:
Brad T. Summers, Esq.
David W. Criswell, Esq.
BALL JANIK LLP
One Main Place
101 SW Main St., Suite 1100
Portland, OR 97204
Tel: 503-944-6046
Fax: 503-295-1058
E-mail: tsummers@balljanik.com
dcriswell@balljanik.com
CASCADE AG: Sec. 341 Creditors' Meeting Set for Sept. 12
--------------------------------------------------------
The U.S. Trustee for the Western District of Washington in Seattle
will hold a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in
the Chapter 11 case of Cascade Ag Services, Inc., on Sept. 12,
2012, at 1:00 p.m. at US Courthouse, Room 4107 (341 Meetings).
About Cascade AG
Cascade AG Services, Inc., dba Pleasant Valley Farms, fdba
Mountain View Produce, Inc., fdba Staffanson Harvesting LLC, fdba
Sterling Investment Group, L.L.C., filed for Chapter 11 bankruptcy
(Bankr. W.D. Wash. Case No. 12-18366) on Aug. 13, 2012. It
scheduled $25,820,499 in assets and $22,255,482 in liabilities.
Lawyers at Cairncross & Hempelmann PS serve as the Debtor's
counsel. The petition was signed by Craig Staffanson, president.
DIP lender One PacificCoast Bank, FSB, is represented by Brad T.
Summers, Esq., and David W. Criswell, Esq., at Ball Janik LLP.
The U.S. Trustee appointed seven creditors to the Official
Unsecured Creditors' Committee.
CASCADE AG: U.S. Trustee Appoints 7-Member Creditors' Panel
-----------------------------------------------------------
U.S. Trustee Robert D. Miller Jr. for the Western District of
Washington appointed, pursuant to 11 U.S.C. Sec. 1102, seven
creditors, who expressed their willingness to serve, to the
Official Unsecured Creditors' Committee in the Chapter 11 case of
Cascade AG Services, Inc.:
1. American West Environmental
c/o Dan Codd
PO Box 730
Pasco, WA 99301
2. Curtis Johnson
15510 Sneeoosh Rd.
La Conner, WA 98257
3. Farms Northwest
c/o Kirby Johnson
16918 Best Road
Mount Vernon, WA 98273
4. Letica Corporation
c/o Mara Saad
PO Box 7700
Detroit, MI 48277
5. Pacific Trails Logistics
c/o Mark Cherry
PO Box 1141
Yakima, WA 98907
6. Tricor Braun
c/o Dan Dunwiddle
PO Box 60000
San Francisco, CA 94160
7. Norton Packaging, Inc.
c/o Greg Noron
20670 Corsair Blvd
Hayward, CA 94545
Letica Corp.'s Ms. Saad will serve as the Chairperson for
Unsecured Creditors' Committee.
About Cascade AG
Cascade AG Services, Inc., dba Pleasant Valley Farms, fdba
Mountain View Produce, Inc., fdba Staffanson Harvesting LLC, fdba
Sterling Investment Group, L.L.C., filed for Chapter 11 bankruptcy
(Bankr. W.D. Wash. Case No. 12-18366) on Aug. 13, 2012. It
scheduled $25,820,499 in assets and $22,255,482 in liabilities.
Lawyers at Cairncross & Hempelmann PS serve as the Debtor's
counsel. The petition was signed by Craig Staffanson, president.
DIP lender One PacificCoast Bank, FSB, is represented by Brad T.
Summers, Esq., and David W. Criswell, Esq., at Ball Janik LLP.
CASPIAN SERVICES: Posts $3.4-Mil. Net Loss in June 30 Quarter
-------------------------------------------------------------
Caspian Services, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $3.42 million on $7.82 million of revenues
for the three months ended June 30, 2012, compared with a net loss
of $3.92 million on $8.35 million of revenues for the three months
ended June 30, 2011.
For the nine months ended June 30, 2012, the Company reported a
net loss of $11.68 million on $20.44 million of revenues, compared
with a net loss of $7.57 million on $34.49 million of revenues for
the six months ended June 30, 2011.
Total revenue during the nine months ended June 30, 2012,
decreased 41% compared to the nine months ended June 30, 2011.
The Company's balance sheet at June 30, 2012, showed
$90.84 million in total assets, $84.06 million in total
liabilities, and stockholders equity of $6.78 million.
May be Forced Into Bankruptcy
"Should EBRD determine to exercise its acceleration rights or
should the Loan Restructuring Agreement not close, the Company
currently has insufficient funds to repay these obligations
individually or collectively and would be forced to seek other
sources of funds to satisfy these obligations. Given our current
and near-term anticipated operating results, the difficult credit
and equity markets and the Company's current financial condition,
the Company believes it would be very difficult to obtain new
funding to satisfy these obligations. If the Company is unable to
obtain funding to meet these obligations, the lenders could seek
any legal remedies available to them to obtain repayment,
including forcing the Company into bankruptcy, or in the case of
the EBRD loan, which is collateralized by the assets, including
the marine base, and bank accounts of Balykshi and CRE,
foreclosure by EBRD on such assets and bank accounts."
"The ability of the Company to continue as a going concern is
dependent upon, among other things, the Company's ability to reach
agreement with EBRD to restructure the EBRD financing agreements
and successfully close the Loan Restructuring Agreement or to
repay its debt obligations by obtaining additional financing or
selling business segments or assets. Uncertainty as to the
outcome of these factors raises substantial doubt about the
Company's ability to continue as a going concern."
A copy of the Form 10-Q is available for free at:
http://is.gd/AbnO3a
Salt Lake City, Utah-based Caspian Services, Inc.'s business
consists of three major business segments:
Vessel Operations -- Vessel operations consist of chartering a
fleet of shallow draft offshore support vessels to customers
performing oil and gas exploration activities in the Kazakhstan
Sector of the North Caspian Sea.
Geophysical Services -- Geophysical services consist of providing
seismic data acquisition services to oil and gas companies
operating both onshore in Kazakhstan and offshore in the
Kazakhstan sector of the North Caspian Sea and the adjacent
transition zone.
Marine Base Services -- Marine Base Services consists of operating
a marine base located at the Port of Bautino on the North Caspian
Sea.
CEDAR FUNDING: Suit v. Monterey County Bank Stays in Bankr. Court
-----------------------------------------------------------------
District Judge Ronald M. Whyte denied the request of Monterey
County Bank for an order withdrawing the reference of an adversary
proceeding filed with the Bankruptcy Court for the Northern
District of California by Cedar Funding Inc.'s Chapter 11 Trustee
R. Todd Neilson. The adversary proceeding against MCB and others
concerns real property located in Pebble Beach, California. The
trustee seeks quiet title and declaratory relief establishing that
"the interests in the Property of MCB, Accustom [Development LLC],
[David A.] Nilsen and those persons claiming through any of them,
are subordinate to the interests of Plaintiff."
The case is R. Todd Neilson, Chapter 11 Trustee, Plaintiff, v.
Monterey County Bank, Accustom Development, LLC, David A. Nilsen
and Angela Nilsen, Defendants, No. C-12-00643 RMW (N.D. Calif.).
A copy of the District Court's Aug. 13, 2012 Order is available at
http://is.gd/GzlRGufrom Leagle.com.
About Cedar Funding
Monterey, California-based mortgage lender Cedar Funding Inc.
-- http://www.cedarfundinginc.com/-- owned by real estate broker
David Nilsen, filed a Chapter 11 petition (Bankr. N.D. Calif. Case
No. 08-52709) on May 26, 2008. CFI was alleged to be a Ponzi
scheme. CFI accepted many millions of dollars from hundreds of
individuals who believed they were acquiring fractional interests
in loans that were secured by real property. Many more invested
with CFI through a related entity, Cedar Funding Mortgage Fund
LLP, that acquired fractional interests in the name of the Fund.
CFI failed to record assignments of its deeds of trust that would
have provided security interests to most of its investors,
including the Fund.
R. Todd Neilson was appointed Chapter 11 trustee in the case.
Cecily A. Dumas, Esq., at Friedman, Dumas and Springwater, in San
Francisco, represented Mr. Neilson. The Debtor estimated assets
of less than $50,000 and debts of $100 million to $500 million in
its Chapter 11 petition.
As reported by the Troubled Company Reporter on March 7, 2011, the
Bankruptcy Court confirmed the joint Chapter 11 plan of
liquidation proposed by R. Todd Neilson, and the Official
Committee of Unsecured Creditors. According to the disclosure
statement explaining the Plan, holders of unsecured claims
aggregating $146 million are expected to recover 5% to 10% of
their allowed claims. Holders of unsecured claims classified as
convenience claims -- expected to total $700,000 -- will each
receive a one-time payment of $2,000 and are projected to recover
100 cents on the dollar.
CENTRAL FEDERAL: Incurs $684,000 Net Loss in Second Quarter
-----------------------------------------------------------
Central Federal Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $684,000 on $1.88 million of interest and dividend
income for the three months ended June 30, 2012, compared with a
net loss of $1.91 million on $2.56 million of interest and
dividend income for the same period during the prior year.
The Company reported a net loss of $1.42 million on $3.90 million
of interest and dividend income for the six months ended June 30,
2012, compared with a net loss of $3.63 million on $5.21 million
of interest and dividend income for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed
$225.61 million in total assets, $217.33 million in total
liabilities, and $8.28 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/S5NgNd
About Central Federal
Fairlawn, Ohio-based Central Federal Corporation (Nasdaq: CFBK) is
the holding company for CFBank, a federally chartered savings
association formed in Ohio in 1892. CFBank has four full-service
banking offices in Fairlawn, Calcutta, Wellsville and Worthington,
Ohio.
Central Federal reported a net loss of $5.42 million in 2011, a
net loss of $6.87 million in 2010, and a net loss of $9.89 million
in 2009.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Crowe Horwath LLP, in
Cleveland, Ohio, expressed substantial doubt about the Company's
ability to continue as a going concern. The Company's auditors
noted that the Holding Company and its wholly owned subsidiary
(CFBank) are operating under regulatory orders that require among
other items, higher levels of regulatory capital at CFBank. The
Company has suffered significant recurring net losses, primarily
from higher provisions for loan losses and expenses associated
with the administration and disposition of nonperforming assets at
CFBank. These losses have adversely impacted capital at CFBank
and liquidity at the Holding Company. At Dec. 31, 2011,
regulatory capital at CFBank was below the amount specified in the
regulatory order. Failure to raise capital to the amount
specified in the regulatory order and otherwise comply with the
regulatory orders may result in additional enforcement actions or
receivership of CFBank.
Regulatory Matters
On May 25, 2011, Central Federal Corporation and CFBank each
consented to the issuance of an Order to Cease and Desist (the
Holding Company Order and the CFBank Order, respectively, and
collectively, the Orders) by the Office of Thrift Supervision
(OTS), the primary regulator of the Holding Company and CFBank at
the time the Orders were issued.
The Holding Company Order required it, among other things, to: (i)
submit by June 30, 2011, a capital plan to regulators that
establishes a minimum tangible capital ratio commensurate with the
Holding Company's consolidated risk profile, reduces the risk from
current debt levels and addresses the Holding Company's cash flow
needs; (ii) not pay cash dividends, redeem stock or make any other
capital distributions without prior regulatory approval; (iii) not
pay interest or principal on any debt or increase any Holding
Company debt or guarantee the debt of any entity without prior
regulatory approval; (iv) obtain prior regulatory approval for
changes in directors and senior executive officers; and (v) not
enter into any new contractual arrangement related to compensation
or benefits with any director or senior executive officer without
prior notification to regulators.
The CFBank Order required CFBank to have by Sept. 30, 2011, and
maintain thereafter, 8% Tier 1 (Core) Capital to adjusted total
assets and 12% Total Capital to risk weighted assets. CFBank will
not be considered well-capitalized as long as it is subject to
individual minimum capital requirements.
CFBank did not comply with the higher capital ratio requirements
by the Sept. 30, 2011, required date.
CHATSWORTH AT PGA: Skilled Nursing Center in $158MM Foreclosure
---------------------------------------------------------------
Brian Bandell at then South Florida Business Journal reports that
the Devonshire at PGA National retirement community and its
Chatsworth assisted living and skilled nursing facility in Palm
Beach Gardens, Florida, were hit with a $158.4 million foreclosure
lawsuit.
This comes following legal proceeding in Tallahassee filed in May
by the Florida Department of Financial Services to place the
continuing care retirement community into state receivership for
alleged financial insolvency, according to South Florida Business
Journal.
The report notes that the state won a receivership order on July
26, but Devonshire got that order stayed when it appealed to a
higher court.
Devonshire and Chatsworth are owned by Tampa-based SHP Senior
Living Services.
SHP Chief Executive Officer Craig E. Anderson said it would
vigorously contest both the receivership and the foreclosure
action, South Florida Business Journal notes. Devonshire has
about 400 residents and a staff of 300.
South Florida Business Journal notes that this in the second South
Florida assisted living facility to face financial trouble in
recent weeks, as the owner of the Lenox on the Lake complex in
Tamarac filed Chapter 11 bankruptcy on Aug. 10.
On Aug. 8, Trimont Real Estate Advisors, representing a group of
lenders, filed a foreclosure lawsuit against Devonshire at PGA
National, Chatsworth PGA Properties, SHP Healthcare Services and
Anderson, as a personal guarantor, South Florida Business Journal
recalls. The report relates that it concerns a mortgage made for
$161.6 million in 2007, the same year the facilities were bought
for $76.9 million.
South Florida Business Journal says that West Palm Beach attorney
Gary Dunkel, who represents Trimont in the lawsuit, said the loan
matured on April 30 with $158.4 million in principal outstanding,
though the borrower did not default on monthly payments. The
foreclosure targets not only the real estate but all the assets
and contracts of the business, he added, South Florida Business
Journal relays.
CHINA DU KANG: Posts $59,000 Net Income in Second Quarter
---------------------------------------------------------
China Du kang Co., Ltd., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $59,304 on $934,890 of gross profit for the three
months ended June 30, 2012, compared with a net loss of $260,112
on $501,577 of gross profit for the same period during the prior
year.
The Company reported net income of $424,690 on $1.76 million of
gross profit for the six months ended June 30, 2012, compared with
a net loss of $460,540 on $1.21 million of gross profit for the
same period a year ago.
The Company reported a net loss of $696,001 in 2011, compared with
a net loss of $897,194 in 2010.
The Company's balance sheet at June 30, 2012, showed
$17.44 million in total assets, $7.48 million in total
liabilities, and $9.96 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/iP5gbS
About China Du Kang
Headquartered in Xi'an, Shaanxi, in the PRC, China Du Kang Co.,
Ltd., was incorporated as U.S. Power Systems, Inc., in the State
of Nevada on Jan. 16, 1987. The Company is principally engaged in
the business of production and distribution of distilled spirit
with the brand name of "Baishui Dukang". The Company also
licenses the brand name to other liquor manufactures and liquor
stores.
After auditing the 2011 financial statements, Keith K. Zhen, CPA,
in Brooklyn, New York, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the company incurred an operating loss for
each of the years in the two-year period ended Dec. 31, 2011, and
as of Dec. 31, 2011, had an accumulated deficit.
CHINA MARKETING: Had $253,000 Net Income in Second Quarter
----------------------------------------------------------
China Marketing Media Holdings, Inc., filed its quarterly report
on Form 10-Q, reporting net income of $253,248 on $2.8 million
of revenue for the three months ended June 30, 2012, compared with
a net loss of $192,166 on $3.4 million of revenue for the same
period last year.
For the six months ended June 30, 2012, the Company had a net loss
of $269,467 on $5.0 million of revenue, compared with net income
of $171,201 on $6.5 million of revenue for the same period of
2011.
The Company's balance sheet at June 30, 2012, showed $18.4 million
in total assets, $3.6 million in total liabilities, and
stockholders' equity of $14.8 million.
As reported in the TCR on April 23, 2012, Van Wagoner & Bradshaw,
PLLC, in Salt Lake City, Utah, expressed substantial doubt about
China Marketing'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 cash
flow constraints and has suffered a large loss from operations.
A copy of the Form 10-Q is available for free at:
http://is.gd/PgBbBw
Located in Beijing, China, China Marketing Media Holdings, Inc.,
was originally organized under the laws of the State of Texas on
Oct. 29, 1999, under the name Brazos Strategies, Inc. It changed
its name to Infolife, Inc., on July 16, 2003, and finally to China
Marketing Media Holdings, Inc., on Feb. 7, 2006. China Marketing
is a holding company and has no operations other than
administrative matters and the ownership of its direct and
indirect operating subsidiaries. Through its indirect Chinese
subsidiaries, it is engaged in the business of selling magazines
and advertising space in its magazines, providing sales and
marketing consulting services. All of the Company's operations,
assets, personnel, officers and directors are located in China.
Currently, it publishes China Marketing magazine in China.
CICERO INC: Incurs $816,000 Net Loss in Second Quarter
------------------------------------------------------
Cicero Inc. filed with the U.S. Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of
$816,000 on $1.04 million of total operating revenue for the three
months ended June 30, 2012, compared with a net loss of $540,000
on $1.09 million of total operating revenue for the same period
during the prior year.
The Company reported net income of $1.34 million on $4.71 million
of total operating revenue for the six months ended June 30, 2012,
compared with a net loss of $975,000 on $1.82 million of total
operating revenue for the same period a year ago.
The Company reported a net loss of $2.97 million in 2011,
compared with a net loss of $459,000 in 2010.
The Company's balance sheet at June 30, 2012, showed $4.03 million
in total assets, $8.47 million in total liabilities and a $4.44
million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/oGJelW
About Cicero Inc.
Cary, N.C.-based Cicero, Inc., provides business integration
software solutions and also provides technical support, training
and consulting services as part of its commitment to providing
customers with industry-leading solutions.
The Company focuses on the customer experience management market
with emphasis on desktop integration and business process
automation with its Cicero XM(TM) products. Cicero XM enables the
flow of data between different applications, regardless of the
type and source of the application, eliminating redundant entry
and costly mistakes.
The Company has extended the maturity dates of several debt
obligations that were due in 2011 to 2012, to assist with
liquidity and may attempt to extend these maturities again if
necessary. Despite the recent additions of several new clients,
the Company continues to struggle to gain additional sources of
liquidity on terms that are acceptable to the Company.
COMMUNITY SHORES: Reports $321,600 Net Income in Second Quarter
---------------------------------------------------------------
Community Shores Bank Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing net income of $321,636 on $2.28 million of total
interest income for the three months ended June 30, 2012, compared
with a net loss of $522,319 on $2.75 million of total interest
income for the same period a year ago.
The Company reported net income of $257,535 on $4.62 million of
total interest income for the six months ended June 30, 2012,
compared with a net loss of $1.25 million on $5.55 million of
total interest income for the same period during the prior year.
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 June 30, 2012, showed
$204.34 million in total assets, $205.53 million in total
liabilities and a $1.19 million total shareholders' deficit.
"The Company's net losses, failure to repay its term loan at
maturity, non-compliance with the higher capital ratios of the
Directive and the Consent Order, and the provisions of the Written
Agreement raise substantial doubt about the Company's ability to
continue as a going concern," the Company said in its quarterly
report for the period ended June 30, 2012.
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.
A copy of the Form 10-Q is available for free at:
http://is.gd/QyXYTS
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.
COMPREHENSIVE CARE: Posts $1.6 Million Net Income in 2nd Quarter
----------------------------------------------------------------
Comprehensive Care Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $1.60 million on $18.12 million of managed care
revenues for the three months ended June 30, 2012, compared with a
net loss of $3.97 million on $18.55 million of managed care
revenues for the same period during the prior year.
The Company reported net income of $1.68 million on $36.01 million
of managed care revenues for the six months ended June 30, 2012,
compared with a net loss of $3.92 million on $36.83 million of
managed care revenues for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed
$16.02 million in total assets, $30.56 million in total
liabilities, and a $14.54 million total stockholders' deficiency.
A copy of the Form 10-Q is available for free at:
http://is.gd/6zDQ6O
About Comprehensive Care
Tampa, Fla.-based Comprehensive Care Corporation provides managed
care services in the behavioral health, substance abuse, and
psychotropic pharmacy management fields.
Following the 2011 results, Mayer Hoffman McCann P.C., in
Clearwater, Florida, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has suffered recurring losses from
operations and has not generated sufficient cash flows from
operations to fund its working capital requirements.
Comprehensive Care reported a net loss of $14.08 million in 2011,
compared with a net loss of $10.47 million in 2010.
COMSTOCK MINING: Incurs $8.9 Million Net Loss in Second Quarter
---------------------------------------------------------------
Comstock Mining Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $8.98 million on $182,523 of hotel revenue for the three months
ended June 30, 2012, compared with a net loss of $4.74 million on
$120,175 of hotel revenue for the same period a year ago.
The Company reported a net loss of $16.31 million on $294,245 of
hotel revenue for the six months ended June 30, 2012, compared
with a net loss of $7.12 million on $120,175 of hotel revenue for
the same period during the prior year.
The Company reported a net loss of $11.61 million in 2011,
compared with a net loss of $60.32 million in 2010.
The Company's balance sheet at June 30, 2012, showed
$35.40 million in total assets, $16.47 million in total
liabilities and $18.92 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/UteL4w
About Comstock Mining
Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based,
gold and silver mining company with extensive, contiguous property
in the historic Comstock district. The Company began acquiring
properties in the Comstock in 2003. Since then, the Company has
consolidated a substantial portion of the Comstock district,
secured permits, built an infrastructure and brought the
exploration project into test mining production. The Company
continues acquiring additional properties in the Comstock
district, expanding its footprint and creating opportunities for
exploration and mining. The goal of the Company's strategic plan
is to deliver stockholder value by validating qualified resources
(measured and indicated) and reserves (probable and proven) of
3,250,000 gold equivalent ounces by 2013, and commencing
commercial mining and processing operations by 2011, with annual
production rates of 20,000 gold equivalent ounces.
CORD BLOOD: Reports $148,000 Net Income in Second Quarter
---------------------------------------------------------
Cord Blood America, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income attributable to the Company of $148,113 on
$1.80 million of revenue for the three months ended June 30, 2012,
compared with a net loss attributable to the Company of $1.01
million on $1.43 million of revenue for the same period during the
prior year.
The Company reported attributable to the Company of $1.11 million
on $3.36 million of revenue for the six months ended June 30,
2012, compared with a net loss attributable to the Company of
$2.84 million on $2.88 million of revenue for the same period a
year ago.
The Company's balance sheet at June 30, 2012, showed $7.44 million
in total assets, $6.76 million in total liabilities and $682,107
in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/6gLwBh
About Cord Blood America
Based in Las Vegas, Nevada, Cord Blood America, Inc., is primarily
a holding company whose subsidiaries include Cord Partners, Inc.,
CorCell Co. Inc., CorCell Ltd.; CBA Professional Services, Inc.
D/B/A BodyCells, Inc.; CBA Properties, Inc.; and Career Channel
Inc, D/B/A Rainmakers International. Cord specializes in
providing private cord blood stem cell preservation services to
families. BodyCells is a developmental stage company and intends
to be in the business of collecting, processing and preserving
peripheral blood and adipose tissue stem cells allowing
individuals to privately preserve their stem cells for potential
future use in stem cell therapy. Properties was formed to hold
the corporate trademarks and other intellectual property of CBAI.
Rain specializes in creating direct response television and radio
advertising campaigns, including media placement and commercial
production.
After auditing the 2011 results, Rose, Snyder & Jacobs, LLP, in
Encino, California, expressed substantial doubt substantial doubt
about the Company's ability to continue as a going concern. The
independent auditors noted that the Company has sustained
recurring operating losses, continues to consume cash in operating
activities, and has insufficient working capital and an
accumulated deficit at Dec. 31, 2011.
Cord Blood reported a net loss attributable to the Company of
$5.97 million in 2011, compared with a net loss attributable
to the Company of $8.09 million in 2010.
CORNERSTONE BANCSHARES: To Pay Cash Dividend Aug. 30
----------------------------------------------------
Cornerstone Bancshares, Inc., announced the payment date of
Aug. 30, 2012, for a cash dividend in the amount of $0.625 per
share for its Series A Convertible Preferred Stock for all holders
of record as of March 31, 2012.
About Cornerstone Bancshares
Chattanooga, Tenn.-based Cornerstone Bancshares, Inc., is a bank
holding company. Its wholly-owned subsidiary, Cornerstone
Community Bank, is a Tennessee-chartered commercial bank with five
full-service banking offices located in Hamilton County,
Tennessee.
Cornerstone reported net income of $1.03 million in 2011, compared
with a net loss of $4.70 million in 2010.
The Company's balance sheet at June 30, 2012, showed $420.87
million in total assets, $384.11 million in total liabilities and
$36.75 million in total stockholders' equity.
Cornerstone said in its 2011 annual report that as of Dec. 31,
2011, the Company had one loan, currently being serviced by
Midland Loan Services for the FDIC, which totaled approximately $3
million. The loan contains certain compliance covenants which
include stated minimum or maximum target amounts for Cornerstone's
capital levels, the Bank's capital levels, nonperforming asset
levels at the Bank and the ability of Cornerstone to meet the
required debt service coverage ratio, which is computed on the
four most recent consecutive fiscal quarters. Due to the level of
nonperforming assets of the Bank and not currently meeting the
required debt service coverage ratio, Cornerstone was not in
compliance with these two covenants at Dec. 31, 2011. However,
Cornerstone had previously obtained waivers through Dec. 31, 2011.
During March 2012, Cornerstone obtained from the FDIC a waiver of
the covenant compliance requirements through Dec. 31, 2012,
granted that all payments are made in accordance with the
aforementioned repayment schedule. However, if the Company is
unable to comply with those covenants or obtain an additional
waiver from the lender for violations that occur after Dec. 31,
2012, if any, the lender may declare the loan in default and take
possession of the Bank's common stock. If this event were to
occur, Cornerstone's assets and operations would be substantially
reduced and therefore its ability to continue as a going concern
would be in substantial doubt.
Consent Order
The Company disclosed in the Form 10-Q for the quarter ended
June 30, 2010, that following the issuance of a written report by
the Federal Deposit Insurance Corporation and the Tennessee
Department of Financial Institutions concerning their joint
examination of Cornerstone Community Bank in October 2009, the
Bank entered a consent order with the FDIC on April 2, 2010, and a
written agreement with the TDFI on April 8, 2010, each concerning
areas of the Bank's operations identified in the report as
warranting improvement and presenting substantially similar plans
for making those improvements.
The consent order and written agreement, which the Company
collectively refers to as the "Action Plans", convey specific
actions needed to address certain findings from the joint
examination and to address the Company's current financial
condition. The Action Plans contain a list of strict requirements
ranging from a capital directive, which requires the Company to
achieve and maintain minimum regulatory capital levels in excess
of the statutory minimums to be well-capitalized, to developing a
liquidity risk management and contingency funding plan, in
connection with which the Company will be subject to limitations
on the maximum interest rates it can pay on deposit accounts.
The Action Plans also contain restrictions on future extensions of
credit and requires the development of various programs and
procedures to improve the Company's asset quality as well as
routine reporting on its progress toward compliance with the
Action Plans to the Board of Directors, the FDIC and the TDFI.
As of April 2, 2010, the date of the Action Plans, the Bank was
deemed to be "adequately capitalized."
CREATIVE VISTAS: Incurs $208,000 Net Loss in Second Quarter
-----------------------------------------------------------
Creative Vistas, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $208,187 on $1.36 million of contract and service revenue for
the three months ended June 30, 2012, compared with a net loss of
$76,148 on $2.17 million of contract and service revenue for the
same period during the prior year.
The Company reported a net loss of $251,040 on $2.84 million of
contract and service revenue for the six months ended June 30,
2012, compared with a net loss of $6,336 on $4.44 million of
contract and service revenue for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $3.34 million
in total assets, $5.01 million in total liabilities and a $1.67
million stockholders' deficiency.
A copy of the Form 10-Q is available for free at:
http://is.gd/zE7Kgi
About Creative Vistas
Headquartered in Whitby, Ontario, Canada, Creative Vistas, Inc.,
provides security-related technologies and systems. The Company
also provides the deployment of broadband services to the
commercial and residential market. The Company primarily operates
through its subsidiaries AC Technical Systems Ltd. and Iview
Digital Video Solutions Inc., to provide integrated electronic
security-related technologies and systems.
In its audit report for the year ended Dec. 31, 2011, results,
Kingery & Crouse, P.A., in Tampa, Florida, expressed substantial
doubt about the Company's ability to continue as a going concern.
The independent auditors noted that the Company has suffered
recurring losses from continuing operations and has working
capital and stockholder deficiencies.
DAYTON SUPERIOR: J&K Adrian Contract Dispute Sent to Bankr. Court
-----------------------------------------------------------------
District Judge Karon Owen Bowdre granted the request of Dayton
Superior Corporation to transfer -- but not dismiss -- a lawsuit
lodge by J&K Adrian Bakery, LLC, Plaintiff, v. Dayton Superior
Corporation, Defendant, No. 2:11-CV-4307-KOB (N.D. Ala.).
The dispute arises out of copper theft and other damages to real
property that occurred while Dayton Superior was in possession of
the property, which Dayton leased from J&K Adrian Bakery. After
Dayton entered into the lease, but before the copper theft, Dayton
filed for bankruptcy under Chapter 11.
Dayton argues that the Bankruptcy Court's order confirming
Dayton's Chapter 11 plan precludes J&K Adrian's claim, or,
alternatively, that the case should be transferred to the
Bankruptcy Court. Dayton also argues that some of J&K Adrian's
claims fail as a matter of law, regardless of whether the
Bankruptcy Court's order applies.
Although the Confirmation Order approved the rejection of Dayton's
lease for the Meadowcroft Road property as of the Effective Date,
Oct. 26, 2009, Dayton retained possession until at least late
2010. The complaint alleges that in late 2010, Dayton attempted
to terminate the lease with J&K Adrian. As part of the
termination of the lease, the lease provisions required Dayton to
return the leased property in substantially the same condition as
it had found the property.
Dayton allegedly hired a third party contractor, Osborne Machinery
Movers, to move Dayton's equipment and clean the warehouses, a
process that Dayton allegedly supervised, through December 2010
and early January 2011. The complaint alleges that on two
separate occasions in late December, the police came out to the
Meadowcroft Road property in response to calls about copper theft.
According to the complaint, Dayton allowed the property insurance
to lapse on or about Dec. 31, 2010, before Dayton and its
subcontractors had vacated the premises and turned control back
over to J&K Adrian.
The complaint alleges that Dayton kept possession over the leased
property "well into the month of January 2011." The complaint also
alleges that on or about Jan. 22, 2011, the police returned to the
property to discover additional copper theft and damages.
According to the complaint, a lack of electricity in the building
also led to plumbing and water damages caused by burst pipes
during several nights of very cold temperatures.
Based on these damages, J&K Adrian alleges three counts against
Dayton: Count I for breach of contract for failing to guard,
repair, and insure the property as required by the lease; Count II
for negligence for negligently failing to guard the property or
take reasonable care in keeping the property safe; and Count III
for wantonness for failing to take steps to secure the property
after Dayton had knowledge of trespassing and theft.
J&K Adrian counters that its claims are beyond the scope of the
Bankruptcy Court's Confirmation Order, and that its claims are
against Reorganized Dayton because of Reorganized Dayton's post-
confirmation activities.
"Rather than risk misinterpreting the paragraph on rejected
contracts and enforcing the Confirmation Order in ways that the
bankruptcy court did not intend, the [District] Court concludes
that most efficient way of proceeding is to transfer this case to
the Bankruptcy Court that entered the Confirmation Order for
further disposition," the District Court ruled.
A copy of the District Court's Aug. 13, 2012 Memorandum Opinion is
available at http://is.gd/1QYL4yfrom Leagle.com.
About Dayton Superior
Headquartered in Dayton, Ohio, Dayton Superior Corporation (Pink
Sheets: DSUPQ) -- http://www.daytonsuperior.com/-- makes and
distributes construction products. Aztec Concrete Accessories
Inc., Dayton Superior Specialty Chemical Corporation, Dur-O-Wa
Inc., Southern Construction Products Inc., Symons Corporation and
Trevecca Holdings Inc. were merged with the Company on Dec. 31,
2004.
Dayton Superior filed for Chapter 11 protection (Bankr. D. Del.
Case No. 09-11351) on April 19, 2009. Lawyers at Latham & Watkins
LLP and Richards, Layton & Finger, P.A., served as bankruptcy
counsel. Dayton Superior had less than $300 million in assets and
debts in excess of $400 million as of the filing.
Dayton Superior emerged from Chapter 11 bankruptcy protection
effective Oct. 26, 2009, pursuant to a Plan of Reorganization
approved by the Bankruptcy Court on Oct. 14. In conjunction with
the Plan, Dayton Superior closed its $110 million exit financing
facility and new $100 million term loan.
DECOR PRODUCTS: Delays Form 10-Q for Second Quarter
---------------------------------------------------
Decor Products International, Inc., informed the U.S. Securities
and Exchange Commission that it could not complete the filing of
its quarterly report on Form 10-Q for the quarter ended
June 30, 2012, due to a delay in obtaining and compiling
information required to be included in its Form 10-Q, which delay
could not be eliminated by the Company without unreasonable effort
and expense. In accordance with Rule 12b-25 of the Securities
Exchange Act of 1934, the Company will file its Form 10-Q no later
than the fifth calendar day following the prescribed due date.
About Decor Products
Decor Products International, Inc., through its subsidiaries,
mainly engages in the manufacture and sale of furniture decorative
paper and related products in the People's Republic of China. The
Company is headquartered in Chang'an Town, Dongguan, Guangdong
Province, between Shenzhen and Guangzhou in southern China.
After auditing the financial statements for the year ended
Dec. 31, 2011, HKCMCPA Company Limited, in Hong Kong, China, noted
that the Company has made default in repayment of convertible
notes and promissory notes that raise substantial doubt about its
ability to continue as a going concern.
DELTA PETROLEUM: Judge Confirms Chapter 11 Plan
-----------------------------------------------
Delta Petroleum Corp. convinced the bankruptcy judge to sign a
confirmation order approving its reorganization plan.
The confirmation hearing began with the company announcing that a
pair of suitors had made last-minute overtures it felt bound to
entertain, Jamie Santo at Bankruptcy Law360 reports.
Delta Petroleum thus is on track to emerge from bankruptcy owning
a stake in a joint venture that will continue explorations for
natural gas in the Rocky Mountains, according to Peg Brickley at
Dow Jones' DBR Small Cap.
Bankruptcy Law360 relates that Delta had weighed bids from
potential purchasers and plan partners in an April auction before
opting for the joint venture with Laramie Energy II LLC proposed
in the reorganization plan.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the plan will create a joint venture with Laramie
Energy II LLC, which will be two-thirds owned by Laramie and one-
third by reorganized Delta. Laramie won an auction to be the
plan's sponsor. Delta's lawyer told the judge there's a
possibility that another buyer may step forward with a better
offer. Delta, the lawyer said, has the right to end the Laramie
agreement as long as the plan hasn't been consummated.
Details on the Laramie arrangement are still being worked out, the
lawyer said, according to the report.
According to the Bloomberg report, holders of $267.7 million in
unsecured note claims were told in disclosure materials that they
may expect to recover between 6% and 11.7% from receiving stock in
reorganized Delta, which will own one-third of the joint venture.
Delta's unsecured creditors, with claims of about $3 million, will
have the same percentage recovery from receipt of stock.
The Bloomberg report adds that in addition to stock in the joint
venture, Delta will receive $75 million cash to be used to pay off
about $50 million owing on a loan to finance the Chapter 11 case.
The remainder of the cash will be applied toward expenses of the
Chapter 11 effort. Delta is contributing all except about
$8 million of its property to the joint venture. Laramie is
contributing selected assets plus $75 million cash. The
reorganization structure preserves some $885 million in net
operating tax-loss carry forwards for utilization to increase
creditors' recoveries.
The Bloomberg report relates that the joint venture, to be called
Piceance Energy LLC, will be financed in part with a $400 million
revolving credit. Based in Denver, Laramie develops what it calls
"unconventional gas resources" in the Rocky Mountains.
About Delta Petroleum
Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil
and gas company engaged primarily in the exploration for, and the
acquisition, development, production, and sale of, natural gas and
crude oil. Natural gas comprises over 90% of Delta's production
services. The core area of its operations is the Rocky Mountain
Region of the United States, where the majority of the proved
reserves, production and long-term growth prospects are located.
Delta and seven of its subsidiaries sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013,
inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31,
2012 scheduled maturity of its $38.5 million secured credit
facility with Macquarie Bank Limited and after several months of
unsuccessful attempts to sell the business. Delta disclosed
$375,498,248 in assets and $310,679,157 in liabilities, which also
include $152,187,500 in outstanding obligations on account of the
7% senior unsecured notes issued in March 2005 with US Bank
National Association indenture trustee; and $115,527,083 in
outstanding obligations on account of 3-3/4% Senior Convertible
Notes due 2037 issued in April 2007. In its amended schedules,
the Delta Petroleum disclosed $373,836,358 in assets and
$312,864,788 in liabilities.
W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A.
Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard &
Reed LLP, in New York, N.Y., represent the Debtors as counsel.
Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights,
Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del.,
represent the Debtors as co-counsel. Conway Mackenzie is the
Debtors' restructuring advisor. Evercore Group L.L.C. is the
financial advisor and investment banker. The Debtors selected
Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The
petition was signed by Carl E. Lakey, chief executive officer and
president.
Laramie Energy II LLC has been approved by the Court to serve as
the sponsor for Delta's reorganization plan.
Delta Petroleum has won approval for its disclosure statement
explaining the Chapter 11 reorganization plan. There's a hearing
to consider confirmation of the Plan on Aug. 15.
DEWEY & LEBOEUF: Ex-Partners Say Trustee Premature, Want Examiner
-----------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the official committee representing former partners
of Dewey & LeBoeuf LLP says that although appointing a trustee to
take over Dewey & LeBoeuf, is "premature," an examiner should be
appointed for the defunct law firm.
The report relates that an ad hoc group of 54 former partners
filed papers on Aug. 8 telling the bankruptcy judge in Manhattan
that the firm should be taken over by a Chapter 11 trustee or an
examiner appointed to conduct an investigation into management's
"blatant conflicts of interest."
According to the report, in the Aug. 16 filing favoring an
investigation and not a trustee, the official committee was
critical of a settlement proposal the firm is offering to former
partners. The firm will give those partners releases from claims
and lawsuits in return for payments in varying amounts. The
official committee argues that the firm "simply lacks fiduciary
credentials to decide how much each partner should be permitted to
pay" because it's "managed solely by individuals who remain
partners and who were actively engaged in many of the debtor's
most controversial pre-petition actions."
The report relates that the committee criticized the firm for
offering discounts in return for collecting unpaid bills, "further
rewarding those with the largest practices for doing only that
which they are already obligated to do." The Aug. 16 filing is
especially critical of the firm's demand for payments from lawyers
who retired years before bankruptcy. The committee says that the
demand for subsidies from retirees "cries out, at a minimum, for
vetting by an entirely disinterested fiduciary."
The report notes that instead of going back to recover payments
made only within 15 months of bankruptcy, the official committee
says that the firm is ignoring "hundreds of millions of dollars of
additional transfers that occurred earlier." The ad hoc
committee's motion for a trustee or examiner accused the firm's
leaders of "gross mismanagement."
The motion said that "impecunious spouses of deceased former
partners" and terminally ill former partners were being
"frightened and intimidated" into contributing "what could be a
substantial portion of their remaining retirement savings." The
motion is scheduled for a hearing on Sept. 20.
Mr. Rochelle notes that in a large case such as Dewey's, the
bankruptcy judge is required to appoint an examiner if a motion
for a trustee is denied. A judge retains the ability to decide
the scope and cost of an examiner's report.
About Dewey & LeBoeuf
New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the
wind-down of its operations. The firm had struggled with high
debt and partner defections. Dewey disclosed debt of US$245
million and assets of US$193 million in its chapter 11 filing late
evening on May 29, 2012.
Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey
employed about 2,000 people with 1,300 lawyers in 25 offices
across the globe. When it filed for bankruptcy, only 150
employees were left to complete the wind-down of the business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
US$6 million. The Pension benefit Guaranty Corp. took US$2
million of the proceeds as part of a settlement. The Debtor
disclosed $368,117,240 in assets and $348,817,408 in liabilities
as of the Chapter 11 filing.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as collateral agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The Former Partners hired lawyers at Kasowitz, Benson,
Torres & Friedman LLP, as counsel. The Official Committee of
Unsecured Creditors tapped Deloitte Financial Advisory Services
LLP as its financial advisor.
DEWEY & LEBOEUF: Judge Grants 6-Week Extension to Access Cash
-------------------------------------------------------------
Megan Leonhardt at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Martin Glenn on Wednesday granted Dewey & LeBoeuf LLP
another extension on a cash lifeline used to sustain operations,
giving the collapsed firm more than six weeks to assemble a
critical settlement with former partners.
Bankruptcy Law360 relates that Judge Glenn signed off on an order
extending Dewey's access to its lenders' cash collateral -- which
was set to expire Wednesday -- until Sept 30.
About Dewey & LeBoeuf
New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the
wind-down of its operations. The firm had struggled with high
debt and partner defections. Dewey disclosed debt of US$245
million and assets of US$193 million in its chapter 11 filing
late evening on May 29, 2012.
Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey
employed about 2,000 people with 1,300 lawyers in 25 offices
across the globe. When it filed for bankruptcy, only 150
employees were left to complete the wind-down of the business.
Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in
process of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28. All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure. The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate. The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.
The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
US$6 million. The Pension benefit Guaranty Corp. took US$2
million of the proceeds as part of a settlement. The Debtor
disclosed $368,117,240 in assets and $348,817,408 in liabilities
as of the Chapter 11 filing.
Judge Martin Glenn oversees the case. Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy
Solutions LLC serves as claims and notice agent. The petition
was signed by Jonathan A. Mitchell, chief restructuring officer.
JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP. JPMorgan, as collateral agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors. The Noteholders hired
Bingham McCutchen LLP as counsel.
The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners. The Former Partners hired Tracy L. Klestadt, Esq., and
Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel.
The Official Committee of Unsecured Creditors tapped Deloitte
Financial Advisory Services LLP as its financial advisor.
U.S. Bankruptcy Judge Martin Glenn on July 31 approved Dewey's
request to extend its funding deadline, which would have July 31,
to Aug. 15.
EASTMAN KODAK: DIP Loan Drops 2.5 Points Amid Sale Delay
--------------------------------------------------------
Standard & Poor's Leveraged Commentary & Data reported Friday that
Eastman Kodak Co.'s DIP loan dropped 2.5 points after the latest
stall in patent sale.
As widely reported last week, Kodak delayed announcing the results
of last Monday's auction for its patent portfolio. Kodak in a
statement Thursday said discussions with buyers are active and
that it isn't ready to announce a result. Kodak added that it
might decline to sell some or all of the patents, depending on how
the auction progresses.
The Wall Street Journal has reported that people familiar with the
sale process said bids started coming in all different shapes and
sizes, with a range of offers and increased complexity. The
sources had told WSJ that all the bids received for Kodak's
patents thus far were significantly below $500 million. Kodak had
valued its patents at between $2.2 billion and $2.6 billion.
WSJ, citing sources, earlier reported that Apple Inc. teamed up
with Microsoft Corp. and patent aggregation firm Intellectual
Ventures Management LLC. Google Inc.'s consortium includes patent
aggregation firm RPX Corp. and three hardware companies that make
phones based on Google's Android operating system: Samsung
Electronics Co., LG Electronics Inc. and HTC Corp.
A third bidder was private-equity firm Vector Capital Corp.,
according to WSJ.
On Thursday, WSJ's Mike Spector, Ashby Jones, and Dana Mattioli,
citing people with knowledge of negotiations, reported that rival
technology giants and patent-hoarding firms that had mounted
competing bids for Kodak's portfolio have joined forces in recent
days -- a move that could take the patents off the market at a
price below what Kodak had hoped to raise in a competitive
auction.
The sources told WSJ the negotiations and the bidding group's
composition are fluid. If the consortium reaches a deal to buy
some or all of Kodak's patents, they would essentially be kept out
of any one company's hands and could prevent consortium members
from using them in litigation against each other. A deal, however,
could also attract attention from federal antitrust regulators.
According to WSJ, people familiar with the process said a deal for
the entire portfolio -- one of many options under discussion --
could fetch more than $500 million based on recent negotiations.
That is well above opening bids when the auction started last
week, but far below the $2.2 billion to $2.6 billion Kodak at one
point said the patents could be worth.
WSJ noted that proceeds from the sale must first be used to repay
banks including Citigroup Inc. that provided Kodak with a $950
million bankruptcy loan. At the end of June, Kodak held $1.3
billion in cash, but continues to lose money, with its net loss
for the first six months deepening to $665 million from
$425 million a year earlier.
Kodak was selling the patents in two lots: one portfolio related
to capturing and processing images on cameras, smartphones and
tablets; and another tied to storing and analyzing images.
According to the report, bidders have put more value on the first
group, dubbed the "digital capture" portfolio.
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.
EASTMAN KODAK: Seeks OK to Redo Supply Deals With Movie Studios
---------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that seeking to maintain
its place in the motion picture industry, Eastman Kodak Co. asked
a New York bankruptcy judge Tuesday to let it out of film supply
agreements with four movie studios so it can forge new, more
favorable agreements.
With the support of its official committee of unsecured creditors,
Kodak asked U.S. Bankruptcy Judge Allan L. Gropper to let it
scuttle its current agreements with Walt Disney Pictures, Warner
Bros. Entertainment Inc., NBC Universal Inc. and Paramount
Pictures Corp., according to Bankruptcy Law360.
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.
EASTMAN KODAK: Threatens Not to Sell Technology Portfolio
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Eastman Kodak Co. said in a statement on Aug. 16 that
it "continues to have active discussions with potential buyers"
about purchasing the technology portfolio.
According to the report this time, Kodak said it "may retain all
or parts of it as a source of creditor recoveries in lieu of a
sale." Originally, the modified auction process was to have ended
earlier last week.
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.
EAU TECHNOLOGIES: Delays Form 10-Q for Second Quarter
-----------------------------------------------------
EAU Technologies, Inc., was unable to file its quarterly report on
Form 10-Q for the period ended June 30, 2012, within the
prescribed time period without unreasonable effort or expense.
The Company said the compilation, dissemination and review of the
information required to be presented in the June 30, 2012, Form
10-Q has imposed time constraints that have rendered timely filing
of the Form 10-Q impracticable without undue hardship and expense
to the Company.
About EAU Technologies
Kennesaw, Ga.-base EAU Technologies, Inc., is in the business of
developing, manufacturing and marketing equipment that uses water
electrolysis to create non-toxic cleaning and disinfecting fluids
for food safety applications as well as dairy drinking water.
In the auditors' report accompanying the consolidated financial
statements for the period ended Dec. 31, 2011, HJ & Associates,
LLC, in Salt Lake City, Utah, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has a working capital
deficit as well as a deficit in stockholders' equity.
EMMIS COMMUNICATIONS: Special Meeting Adjourned to Sept. 4
----------------------------------------------------------
At a Special Meeting of shareholders of Emmis Communications
Corporation held on Aug. 14, 2012, the shareholders of the
Corporation voted to adjourn the meeting until 10:00 a.m. on
Tuesday, Sept. 4, 2012, without taking any vote on the proposals
to:
(i) amend the terms of Emmis' outstanding 6.25% Series A
Cumulative Convertible Preferred Stock, par value $0.01 per
share, that are set forth in Emmis' second amended and
restated articles of incorporation; and
(ii) authorize the Company's board of directors to amend Emmis'
second amended and restated articles of incorporation to
effect, at any time until the earlier of (x) Emmis' 2013
annual shareholders' meeting or (y) June 30, 2013, a
reverse stock split of Emmis' common stock within a
specified range of conversion.
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.
EMPIRE RESORTS: Reports $240,000 Net Income in Second Quarter
-------------------------------------------------------------
Empire Resorts, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $240,000 on $18.85 million of net revenues for the three months
ended June 30, 2012, compared with net income of $650,000 on
$18.56 million of net revenues for the same period during the
prior year.
The Company reported net income of $510,000 on $36.14 million of
net revenues for the six months ended June 30, 2012, compared with
net income of $92,000 on $33.45 million of net revenues for the
same period a year ago.
The Company's balance sheet at June 30, 2012, showed $52.83
million in total assets, $27.10 million in total liabilities and
$25.73 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/5v0Gaz
About Empire Resorts
Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY)
-- http://www.empireresorts.com/-- owns and operates Monticello
Casino & Raceway, a video gaming machine and harness racing track
and casino located in Monticello, New York, 90 miles northwest of
New York City.
The Company reported a net loss of $24,000 in 2011, compared with
a net loss of $17.57 million in 2010.
ENERGY CONVERSION: Says Conditions for Emergence Not Yet Satisfied
------------------------------------------------------------------
BankruptcyData.com reports that Energy Conversion Devices filed
with the U.S. Bankruptcy Court a notice that the conditions
required in order for its Second Amended Joint Plan of Liquidation
to become effective have not been satisfied. As a result, the
effective date will not be August 14, 2012 as anticipated, and the
new effective date is currently anticipated to be August 25, 2012.
The Court confirmed the Plan on July 30, 2012.
The TCR, citing Bill Rochelle, the bankruptcy columnist at
Bloomberg News, reported on Aug. 9, 2012, that the U.S. Bankruptcy
Court in Detroit last month signed a confirmation order approving
a reorganization plan where unsecured creditors with up to $337
million in claims were told they could expect a recovery between
50.1% and 59.3%. The plan creates a trust to sell remaining
assets and distribute proceeds in the order of priority laid out
in bankruptcy law. A liquidation analysis attached to the
disclosure statement showed cash of $139.5 million. When other
assets are liquidated, the company projected total proceeds would
be $182 million to $196 million. After expenses and claims of
higher priority are paid, the disclosure statement predicted that
$168.7 million to $182.2 million would remain for unsecured
creditors.
About Energy Conversion
Energy Conversion Devices -- http://energyconversiondevices.com/
-- has a renowned 51 year history since its formation in Detroit,
Michigan and has been a pioneer in materials science and renewable
energy technology development. The company has been awarded over
500 U.S. patents and international counterparts for its
achievements. ECD's United Solar wholly owned subsidiary has been
a global leader in building-integrated and rooftop photovoltaics
for over 25 years. The company manufactures, sells and installs
thin-film solar laminates that convert sunlight to clean,
renewable energy using proprietary technology.
ECD filed for Chapter 11 protection (Bankr. E.D. Mich. Case No.
12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over
the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert
B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in
Detroit, Michigan, represent the Debtor as counsel. The Debtor
estimated assets and debts of between $100 million and $500
million as of the petition date.
The petition was signed by William Christopher Andrews, chief
financial officer and executive vice president.
Affiliate United Solar Ovonic LLC filed a separate Chapter 11
petition on the same day (Bankr. E.D. Mich. Case No. 12-43167).
Affiliate Solar Integrated Technologies, Inc., filed a petition
for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 12-43169).
An official committee of unsecured creditors has been appointed in
the case. Foley and Lardner, LLP represents the Committee.
Scouler & Company, LLC, serves as financial advisor.
A group of shareholders had asked a bankruptcy judge to allow it
to form an official committee with lawyers and expenses paid for
by the company.
The company had estimated in court papers that it was worth
$986 million, based on nearly $800 million of investment in the
manufacturing unit.
The Debtors canceled an auction to sell USO as a going concern and
discontinued the court-approved sale process after failing to
receive an acceptable qualified bid by the bid deadline. Quarton
Partners served as the companies' investment banker. The Debtors
also hired auction services provider Hilco Industrial to prepare
for an orderly sale of the companies' assets.
ENERGY FUTURE: Clears the Decks for Subsidiary's Bankruptcy
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Energy Future Holdings Corp. is using part of an
$850 million bond offering to pay off a loan to subsidiary Texas
Competitive Holdings Co. so the unit can file bankruptcy without
touching off defaults at non-bankrupt affiliates.
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.
ENVIRONMENTAL SOLUTIONS: Had $258,200 Net Loss in Second Quarter
----------------------------------------------------------------
Environmental Solutions Worldwide, Inc., filed its quarterly
report on Form 10-Q, reporting a net loss of $258,197 on
$2.34 million of revenue for the three months ended June 30, 2012,
compared with a net loss of $3.89 million on $3.05 million of
revenue for the same period last year.
For the six months ended June 30, 2012, the Company had a net loss
of $684,268 on $4.88 million of revenue, compared with a net loss
of $6.90 million on $5.10 million of revenue for the same period
of 2011.
The Company's balance sheet at June 30, 2012, showed
$5.42 million in total assets, $1.99 million in total current
liabilities, and stockholders' equity of $3.43 million.
The Company has sustained recurring operating losses. As of
June 30, 2012, the Company had an accumulated deficit of
$53.44 million and cash and cash equivalents of $78,556. "During
the year 2011 there were significant changes made to ESW's
business. These changes in operations, the relocation of the
Company's operations, and the prevailing economic conditions all
create uncertainty in the operating results and, accordingly,
there is no assurance that the Company will be successful in
generating sufficient cash flow from operations or achieving
profitability in the near future. As a result, there is
substantial doubt regarding the Company's ability to continue as a
going concern."
As reported in the TCR on April 5, 2012, MSCM LLP, in Toronto,
Canada, expressed substantial doubt about Environmental Solutions'
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 of the Company's experience of negative cash
flows from operations and its dependency upon future financing.
A copy of the Form 10-Q is available for free at:
http://is.gd/8jZ4PK
Montgomerville, Pa.-based Environmental Solutions Worldwide,
Inc. (OTC Markets: ESWW) through its wholly-owned subsidiaries is
engaged in the design, development, manufacturing and sales of
emissions control technologies. ESW also provides emissions
testing and environmental certification services with its primary
focus on the North American on-road and off-road diesel retrofit
market. ESW currently manufactures and markets a line of
catalytic emission control and enabling technologies for a number
of applications.
FLORIDA GAMING: Incurs $2.9 Million Net Loss in Second Quarter
--------------------------------------------------------------
Florida Gaming Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $2.91 million on $18.72 million of net revenues for
the three months ended June 30, 2012, compared with a net loss of
$4.64 million on $2.55 million of net revenues for the same period
a year ago.
The Company reported a net loss of $6.78 million on $33.08 million
of net revenues for the six months ended June 30, 2012, compared
with a net loss of $6.37 million on $5.44 million of net revenues
for the same period during the prior year.
The Company reported a net loss of $21.76 million in 2011,
compared with a net loss of $4.84 million in 2010.
The Company's balance sheet at June 30, 2012, showed
$84.01 million in total assets, $118.36 million in total
liabilities, and a $34.34 million total stockholders' deficit.
As of June 30, 2012, the Company was in default on an $87,000,000
credit agreement regarding certain covenants. The Company's
continued existence as a going concern is dependent on its ability
to obtain a waiver of its credit default and to generate
sufficient cash flow from operations to meet its obligations.
After auditing the 2011 results, King & Company, PSC, in
Louisville, Kentucky, noted that the Company has experienced
recurring losses from operations, cash flow deficiencies, and is
in default of certain credit facilities, all of which raise
substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-Q is available for free at:
http://is.gd/Lk5cv6
About Florida Gaming
Florida Gaming Corporation operates live Jai Alai games at
frontons in Ft. Pierce, and Miami, Florida through its Florida
Gaming Centers, Inc. subsidiary. The Company also conducts
intertrack wagering (ITW) on jai alai, horse racing and dog racing
from its facilities. Poker is played at the Miami and Ft. Pierce
Jai-Alai, and dominoes are played at the Miami Jai-Alai. In
addition, the Company operates Tara Club Estates, Inc., a
residential real estate development located near Atlanta in Walton
County, Georgia. Approximately 46.2% of the Company's common
stock is controlled by the Company's Chairman and CEO either
directly or beneficially through his ownership of Freedom Holding,
Inc. The Company is based in Miami, Florida.
FNBH BANCORP: Incurs $89,000 Net Loss in Second Quarter
-------------------------------------------------------
FNBH Bancorp, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $89,000 on $2.80 million of total interest and dividend income
for the three months ended June 30, 2012, compared with a net loss
of $2.92 million on $3.29 million of total interest and dividend
income for the same period during the prior year.
The Company reported a net loss of $43,000 on $5.71 million of
total interest and dividend income for the six months ended
June 30, 2012, compared with a net loss of $3.14 million on $6.51
million of total interest and dividend income for the same period
a year ago.
The Company's balance sheet at June 30, 2012, showed
$291.56 million in total assets, $284.92 million in total
liabilities, and $6.63 million in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/82K9NV
About FNBH Bancorp
Howell, Michigan-based FNBH Bancorp, Inc., is a one-bank holding
company, which owns all of the outstanding capital stock of First
National Bank in Howell. The Bank was originally organized in
1934 as a national banking association. As of Dec. 31, 2011, the
Bank had approximately 85 full-time and part-time employees. The
Bank serves primarily five communities, Howell, Brighton, Green
Oak Township, Hartland, and Fowlerville, all of which are located
in Livingston County.
Following the 2011 results, BDO USA, LLP, in Grand Rapids,
Michigan, expressed substantial doubt about FNBH Bancorp's ability
to continue as a going concern. The independent auditors noted
that Corporation's subsidiary bank is significantly
undercapitalized under regulatory capital guidelines and, during
2009, the Bank entered into a consent order regulatory enforcement
action with its primary regulator, the Office of the Comptroller
of the Currency. "The consent order requires management to take a
number of actions, including, among other things, increasing and
maintaining its capital levels at amounts in excess of the Bank's
current capital levels. The Bank has not yet met the higher
capital requirements and is therefore not in compliance with the
consent order."
FTMI REAL ESTATE: Files to Sell Assisted Living Facility Soon
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports will be selling its assisted living facility for at least
$13 million. The Debtor has signed a deal for Shefaor Development
LLC to be the stalking horse bidder.
According to the report, the Company wants the bankruptcy judge to
hold an auction and approve sale by Oct. 4. The U.S. Department
of Housing & Urban Development is the holder of a $25 million
mortgage on the 139-bed facility. The sale is intended to
transfer the property to the buyer free of the HUD mortgage.
About FTMI Real Estate
FTMI Real Estate, LLC and FTMI Operator, LLC sought Chapter 11
protection (Bankr. S.D. Fla. Lead Case No. 12-29214) in Fort
Lauderdale on Aug. 10, 2012.
FTMI Operator, which operates a health care business The Lenox on
The Lake, disclosed just $112,000 in assets and $31.98 million in
liabilities.
The LENOX -- http://www.thelenox.com-- is South Florida's, newest
state-of-the-art Assisted Living and Memory Care community, which
has a serene lakeside setting and wonderful waterfront vistas.
FTMI Real Estate, a single asset real estate under 11 U.S.C. Sec.
101(51B), scheduled $19.64 million in assets and $28.93 million
in liabilities. The Debtor owns The Lenox on The Lake facilities
at 6700 Commercial Boulevard, in Lauderhill, Florida valued at
$13 million. Secretary of Housing Urban Development has a
$25.87 million claim secured by the property.
FUSION TELECOMMUNICATIONS: Incurs $1.2MM Net Loss in 2nd Quarter
----------------------------------------------------------------
Fusion Telecommunications International, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing a net loss of $1.23 million on $10.21 million of
revenue for the three months ended June 30, 2012, compared with a
net loss of $1.20 million on $10.64 million of revenue for the
same period a year ago.
The Company reported a net loss of $2.02 million on $21.75 million
of revenue for the six months ended June 30, 2012, compared with a
net loss of $2.42 million on $20.84 million of revenue for the
same period during the prior year.
The Company reported a net loss of $4.45 million in 2011, compared
with a net loss of $5.79 million in 2010.
The Company's balance sheet at June 30, 2012, showed $4.48 million
in total assets, $15.73 million in total liabilities and a $11.24
million total stockholders' deficit.
At June 30 2012, the Company had a working capital deficit of
$12.6 million and an accumulated deficit of $151.5 million. The
Company has continued to sustain losses from operations and has
not generated positive cash flow from operations since inception.
Management is aware that its current cash resources are not
adequate to fund its operations for the remainder of the year.
During the six months ended June 30, 2012, the Company raised
approximately $1.1 million, net of expenses, from the sale of the
Company's equity securities.
In its audit report on the 2011 financial statements, Rothstein,
Kass & Company, P.C., in Roseland, New Jersey, noted that the
Company has had negative working capital balances, incurred
negative cash flows from operations and net losses since
inception, and has limited capital to fund future operations that
raises a substantial doubt about their ability to continue as a
going concern.
A copy of the Form 10-Q is available for free at:
http://is.gd/f7edjS
About Fusion Telecommunications
New York City-based Fusion Telecommunications International, Inc.
(OTC BB: FSNN) is a provider of Internet Protocol ("IP") based
digital voice and data communications services to corporations and
carriers worldwide.
GENESEE & WYOMING: Moody's Rates Secured Credit Facility 'Ba3'
--------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to the
proposed senior secured bank credit facilities of Genesee &
Wyoming, Inc.'s ("GWI"), consisting of a $425 million Revolving
Credit Facility due 2017, an $875 million Term Loan A due 2017,
and a $1.0 billion Term Loan B due 2019. At the same time, Moody's
has assigned to GWI a Ba3 Corporate Family Rating (CFR) and
Probability of Default Rating (PDR). A Speculative Grade Liquidity
Rating of SGL-2 has been assigned. The ratings outlook is stable.
Ratings Rationale
The purpose of GWI's proposed credit facility is to fund the
acquisition of short line railroad operator RailAmerica, Inc. for
$1.4 billion in equity, plus the repayment of approximately $1.3
billion of RailAmerica and GWI's existing debt.
GWI's Ba3 Corporate Family Rating reflects the high debt levels
that will ensue from the leveraged acquisition of RailAmerica.
Although financial leverage, with pro forma Debt to EBITDA in
excess of 4 times, will initially be elevated, overall financial
metrics are supportive of the assigned Ba3 rating. The ratings
consider integration risk associated with an acquisition of this
size and scope. However, the ratings also positively consider
GWI's strong track record of acquisitions, whereby the company has
demonstrated the ability to smoothly integrate smaller railroad
operations, both in the US and internationally, while maintaining
margins and returns. In addition, Moody's notes the relatively
high degree of freight and geographic diversity inherent in both
GWI and RailAmerica's portfolio of railroads.
With the close of its purchase of RailAmerica, GWI will carry a
total debt balance (including Moody's standard adjustments,
primarily for operating leases) of over $2.3 billion, which is
almost three times GWI's current debt levels. RailAmerica's LTM
June 2012 EBITDA was approximately $200 million, which, combined
with GWI's EBITDA over the same period, only represents a 70%
increase in EBITDA. This suggests that the debt funded acquisition
of RailAmerica will dramatically increase leverage for GWI.
However, Moody's expects pro forma 2012 results for both entities
to improve materially from their 2011 levels, from organic growth
in revenue and margins in a strong freight rail environment, as
well as from increased contributions from recent acquisitions. As
such, Moody's estimates pro forma FY 2012 Debt to EBITDA of
approximately 4.2 times, which is somewhat high for the Ba3
rating. Other credit metrics are substantially better and map more
closely to Ba3-rated issuers: EBIT to Interest of over 3.0 times
and Retained Flow to Debt of approximately 17%. Going forward,
strong margins from GWI and RailAmerica's operations, along with
prospects for continued revenue growth in excess of inflation in
the rail sector in general, should result in further improvement
in GWI's earnings and operating cash flows. This should allow the
company to reduce debt modestly, resulting in leverage falling
below 4.0 times, which would be more strongly supportive of the
Ba3 rating.
Moody's believes that, on close of the planned refinancing, GWI
will possess a good liquidity profile, with adequate cash levels
and strong cash flow generation expected over the next few years.
The company only expects to maintain cash balances of less than
$50 million over the near term, which is modest for a railroad
company of this size. However, operating cash flow of
approximately $350-$450 million annually over the near term is
expected to exceed GWI's capex requirements, permitting the
company to repay modest amounts of its term loan or revolver
balances outstanding. The $425 million revolving credit facility
is large for a company of this size, although the company expects
to use approximately $120 million to partially fund the
acquisition of RailAmerica. Moody's also expects that the company
will make use of this facility going forward to fund smaller
acquisitions. This suggests a relatively high degree of reliance
on this facility over the near term. Nonetheless, Moody's
anticipates that availability under this facility will remain
robust over the near term. Moody's expects that the company will
be in compliance with financial covenants prescribed under its
bank credit facilities. With the contemplated refinancing, GWI
will not face any meaningful debt maturities until at least five
years after the close of the proposed transaction.
The stable ratings outlook reflects Moody's expectations that GWI
will be able to execute the acquisition of RailAmerica in a smooth
and timely fashion, maintaining operating margins for the combined
companies of at least 24% throughout the Surface Transportation
Board ("STB") review process and into 2013 as the company
integrates substantially all of RailAmerica's operations. Moody's
expects that the company will generate positive free cash flow
over this period that will be sufficient to repay a modest amount
of debt, which will allow leverage to fall below 4 times Debt to
EBITDA.
The ratings could be raised if the company can sustain solid
revenue growth while maintaining operating margins in excess of
30% and generating positive free cash flow. Specifically,
sustaining credit metrics such as Debt to EBITDA of less than 3.5
times or EBIT to Interest in excess of 4 times could warrant
upward rating consideration. A ratings upgrade would also require
the company to maintain a strong liquidity profile, without
undertaking any meaningful increases in dividends or share
repurchases.
The ratings could face downward revision if there is an unexpected
weakening in freight demand over the near term, resulting in
deteriorating pricing to accompany falling volumes. Operating
margins that fall below 20% during a prolonged period of depressed
freight revenues could result in a significant drop in free cash
flow, and materially hinder the company in its ability to reduce
debt through discretionary prepayments. Deterioration in credit
metrics such as Debt to EBITDA in excess of 5.0 times or EBIT to
Interest below 1.8 times could result in a lower rating
consideration. Ratings could also be lowered if the company were
to take on additional debt to finance share repurchases or an
accelerated level of acquisition activity.
Assignments:
Issuer: Genesee & Wyoming Inc.
Corporate Family Rating, Assigned Ba3
Probability of Default Rating, Assigned Ba3
Speculative Grade Liquidity Rating, Assigned SGL-2
Senior Secured Bank Credit Facilities, Assigned Ba3
(LGD3, 45%)
Issuer: Genesee & Wyoming Australia Pty Ltd
Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3, 45%)
Issuer: Quebec Gatineau Railway Inc.
Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3, 45%)
The principal methodology used in rating Genesee & Wyoming Inc.
was the Global Freight Railroad Industry Methodology published in
March 2009. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Genesee & Wyoming Inc., headquartered in Greenwich, CT, operates
short line and regional freight railroads and provides railcar
switching services in the US, Australia, Canada, and Europe.
GEOMET INC: Incurs $53.9 Million Net Loss in Second Quarter
-----------------------------------------------------------
GeoMet, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $53.90 million on $7.77 million of total revenues for the three
months ended June 30, 2012, compared with net income of
$1.07 million on $8.40 million of total revenues for the same
period a year ago.
The Company reported a net loss of $106.85 million on
$17.99 million of total revenues for the six months ended June 30,
2012, compared with net income of $1.52 million on $16.32 million
of total revenues for the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $144.47
million in total assets, $173.55 million in total liabilities,
$32.17 million in series A convertible redeemable preferred stock,
and a $61.25 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/ZmB6bo
About Geomet Inc.
Houston, Texas-based GeoMet, Inc., is an independent energy
company primarily engaged in the exploration for and development
and production of natural gas from coal seams ("coalbed methane"
or "CBM") and non-conventional shallow gas. It was originally
founded as a consulting company to the coalbed methane industry in
1985 and has been active as an operator, developer and producer of
coalbed methane properties since 1993. Its principal operations
and producing properties are located in the Cahaba and Black
Warrior Basins in Alabama and the central Appalachian Basin in
Virginia and West Virginia. It also owns additional coalbed
methane and oil and gas development rights, principally in
Alabama, Virginia, West Virginia, and British Columbia. As of
March 31, 2012, it owns a total of approximately 192,000 net acres
of coalbed methane and oil and gas development rights.
"As of May 11, 2012, we had $148.6 million outstanding under our
Fifth Amended and Restated Credit Agreement," the Company said in
its quarterly report for the period ending March 31, 2012. "As of
March 31, 2012, we were in compliance with all of the covenants in
our Credit Agreement. The Credit Agreement provides, however,
that if the amount outstanding at any time exceeds the "borrowing
base", we must provide additional collateral to the lenders or
repay the excess as provided in the Credit Agreement. The
borrowing base is set in the sole discretion of our lenders in
June and December of each year based, in part, on the value of our
estimated reserves as determined by the lenders using natural gas
prices forecasted by the lenders."
"Due to the decline in the bank group's price projections, we
expect our outstanding loan balance at the June determination date
will exceed the new borrowing base, resulting in a borrowing base
deficiency. We do not have additional collateral to provide to
the lenders and we expect that our operating cash flows would be
insufficient to repay the expected borrowing base deficiency, as
required under the Credit Agreement. As such, unless we amend the
Credit Agreement, we may be in default under the agreement when
the borrowing base is determined in June 2012. In addition, the
elimination of the unused availability under the borrowing base,
which is a factor in our working capital covenant, may result in a
future default of that covenant under the Credit Agreement. We
have begun discussions with our bank group; however, until the
borrowing base for June 2012 has been determined, we will not know
the amount of the deficiency. As of March 31, 2012, the debt is
classified as long-term as we are not in violation of any debt
covenants. Should we be in violation of any covenants which have
not been waived or have a borrowing base deficiency as of June 30,
2012, some or all of the debt will be reclassified to current.
There are no assurances that we will be able to amend our Credit
Agreement or obtain a waiver. If we do obtain a waiver or an
amendment, there can be no assurance as to the cost or terms of
such an amendment."
"These conditions raise substantial doubt about our ability to
continue as a going concern for the next twelve months."
GETTY PETROLEUM: Wins Judge OK to Abandon Storage Tanks
-------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that a New York
bankruptcy judge on Wednesday gave Getty Petroleum Marketing Inc.
the go-ahead to abandon a series of fuel storage tanks at former
operations in the Northeast, provided the company follows certain
conditions intended to protect both people and the environment.
Bankruptcy Law360 relates that Getty's official committee of
unsecured creditors sought the court's permission to abandon the
tanks ? located at sites in New York, New Jersey and Pennsylvania
? when it became clear that the Chapter 11 proceedings would
result in liquidation rather than reorganization.
About Getty Petroleum
A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing
markets gasolines, hydraulic fluids, and lubricating oils through
a network of gas stations owned and operated by franchise holders.
A former subsidiary of Russian oil giant LUKOIL, the company
operates in the Mid-Atlantic and Northeastern US states. Getty
Petroleum Marketing's primary asset is the more than 800 gas
stations in the Mid-Atlantic states which are located on
properties owned by Getty Realty. After scaling back the
company's operations to cut debt, in 2011 LUKOIL sold Getty
Petroleum Marketing to investment firm Cambridge Petroleum Holding
for an undisclosed price.
Getty Petroleum and three affiliates filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on
Dec. 5, 2011. Judge Shelley C. Chapman presides over the case.
Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq.,
and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New
York, N.Y., serve as Debtors' counsel. Ross, Rosenthal & Company,
LLP, serves as accountants for the Debtors. Getty Petroleum
Marketing, Inc., disclosed $46.6 million in assets and $316.8
million in liabilities as of the Petition Date. The petition was
signed by Bjorn Q. Aaserod, chief executive officer and chairman
of the board.
The Official Committee of Unsecured Creditors is represented by
Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North
America, LLC, serves as the Committee's financial advisors.
GLOBAL EQUITY: Posts $13,700 Net Loss in Second Quarter
-------------------------------------------------------
Global Equity International, Inc., filed its quarterly report on
Form 10-Q, reporting a net loss of $13,731 on $285,000 of revenue
for the three months ended June 30, 2012, compared with a net loss
of $97,328 on $0 revenue for the same period last year.
For the six months ended June 30, 2012, the Company had a net loss
of $153,283 on $392,500 of revenue, compared with a net loss of
$117,261 on $22,581 of revenue for the same period of 2011.
The Company's balance sheet at June 30, 2012, showed $1.5 million
in total assets, $407,781 in total current liabilities, $480,000
of Redeemable Series A, Convertible Preferred Stock, and
stockholders' equity of $571,038 million.
The Company had net cash used in operations of $63,337 for the six
months ended June 30, 2012, and a working capital deficit of
$158,962 as of June 30, 2012.
As reported in the TCR on April 9, 2012, Berman & Company, P.A.,
in Boca Raton, Florida, expressed substantial doubt about Global
Equity'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 a net loss of
$1,688,102 and net cash used in operations of $92,780 for the year
ended Dec. 31, 2011. "The Company also has a working capital
deficit of $185,123 at Dec. 31, 2011."
A copy of the Form 10-Q is available for free at:
http://is.gd/g0LlvQ
Dubai, United Arab Emirates-based Global Equity International,
Inc., provides corporate advisory services to companies desiring
to have their shares listed on stock exchanges or quoted on
quotation bureaus in various parts of the world.
GREENMAN TECHNOLOGIES: Incurs $11.7 Million Net Loss in Q2
----------------------------------------------------------
American Power Group Corporation, formerly known as GreenMan
Technologies, filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
available to common shareholders of $11.69 million on $889,577 of
net sales for the three months ended June 30, 2012, compared with
a net loss available to common shareholders of $1.22 million on
$542,372 of net sales for the same period a year ago.
The Company reported a net loss available to common shareholders
of $13.94 million on $1.85 million of net sales for the nine
months ended June 30, 2012, compared with a net loss available to
common shareholders of $5.01 million on $1.42 million of net sales
for the same period a year ago.
The Company reported a net loss of $6.81 million for the year
ended Sept. 30, 2011, compared with a net loss of $5.64 million
the year before.
The Company's balance sheet at June 30, 2012, showed $10.12
million in total assets, $4.59 million in total liabilities and
$5.52 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/UZslQl
About Greenman Technologies
Lynnfield, Mass.-based GreenMan Technologies, Inc. (OTC QB: GMTI)
through its two alternative energy subsidiaries, American Power
Group, Inc. ("APG") and APG International, Inc. ("APGI"), provides
a cost-effective patented dual fuel conversion technology for
diesel engines and diesel generators.
Schechter Dokken Kanter Andrews & Selcer, Ltd., in Minneapolis,
Minnesota, issued a "going concern" qualification on the
consolidated financial statements for the fiscal year ended
Sept. 31, 2011, indicating that the Company has continued to incur
substantial losses from operations, has not generated positive
cash flows and has insufficient liquidity to fund its ongoing
operations that raise substantial doubt about the Company's
ability to continue as a going concern.
H&M OIL: Gets OK to Incur $8-Mil. DIP Financing from Scattered
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized H & M Oil & Gas LLC, et al., to incur postpetition
financing not exceed $8,000,000 in the aggregate from Scattered
Corporation at an interest rate of 7%.
The Debtors would use the money to undertake a drilling program to
increase the value of its bankruptcy estate. The Debtors
represented that they have been unable to obtain alternative
sources of cash or credit on terms and conditions more favorable
to the Debtors' estates than those set forth in the credit
agreement.
As adequate protection from any diminution in value of the
lender's collateral, the Debtor will grant the lender replacement
liens in and to all real and personal property owned or leased by
any Debtor or any trustee or other estate representative in any
case or successor, and a superpriority administrative claim
status.
About H&M Oil
H&M Oil & Gas, LLC, filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 12-32785) in its hometown Dallas on
April 30, 2012. Another entity, Anglo-American Petroleum Corp.
(Case No. 12-32786) simultaneously filed for Chapter 11.
H&M Oil disclosed $297,119,773 in assets and $77,463,479 in
liabilities as of the Chapter 11 filing.
H&M Oil & Gas is an oil and gas production and development
company. H&M, through its operating company, H&M Resources LLC,
is focused on developing its leases in the Permian basin and Texas
panhandle. Dallas, Texas-based Anglo-American Petroleum --
http://www.angloamericanpetroleum.com/-- is the holding
corporation for H&M Oil.
Judge Barbara J. Houser presides over the case. The Debtors are
represented by Keith William Harvey, Esq., at Anderson Tobin PLLC,
in Dallas.
Prospect Capital Corporation, the Debtors' lone secured creditor,
is represented in the case by Timothy A. Davidson II, Esq., and
Joseph P. Rovira, Esq., at Andrews Kurth LLP.
H&M OIL: Gets 2nd Interim OK to Access Prospect Cash Collateral
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
signed a second interim agreed order authorizing H & M Oil & Gas
LLC, et al., to use the cash collateral securing obligation to
Prospect Capital Corporation, as lender under a certain Credit
Agreement, dated June 28, 2007.
The Debtors would use the cash collateral to fund the operation of
their business and to maintain business relationships with
vendors, suppliers.
As adequate protection from any diminution in value of the
lender's collateral, the Debtors will grant the lender replacement
liens. The Debtor will also make payments to lender as adequate
protection (i) $60,000 on July 6, 2012, and (ii) $60,000 on the
first business day of each calendar month thereafter.
The Court also ordered that a further hearing to consider entry of
an order continuing the Debtors' use of cash collateral will be
scheduled (if necessary) at a later date after consultation with
the Debtors and the lender.
About H&M Oil
H&M Oil & Gas, LLC, filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 12-32785) in its hometown Dallas on
April 30, 2012. Another entity, Anglo-American Petroleum Corp.
(Case No. 12-32786) simultaneously filed for Chapter 11. H&M Oil
disclosed $297,119,773 in assets and $77,463,479 in liabilities as
of the Chapter 11 filing.
H&M Oil & Gas is an oil and gas production and development
company. H&M, through its operating company, H&M Resources LLC,
is focused on developing its leases in the Permian basin and Texas
panhandle. Dallas, Texas-based Anglo-American Petroleum --
http://www.angloamericanpetroleum.com/-- is the holding
corporation for H&M Oil.
Judge Barbara J. Houser presides over the case. The Debtors are
represented by Keith William Harvey, Esq., at Anderson Tobin PLLC,
in Dallas.
Prospect Capital Corporation, the Debtors' lone secured creditor,
is represented in the case by Timothy A. Davidson II, Esq., and
Joseph P. Rovira, Esq., at Andrews Kurth LLP.
HEALTHCARE OF FLORENCE: TAG OK'd as Turnaround Consultant
---------------------------------------------------------
The Hon. James M. Marlar of the U.S. Bankruptcy Court for the
District of Arizona authorized Healthcare of Florence, LLC, and
Florence Hospital, LLC, to employ The Turn Around Group as
turnaround consultant procure interim or exit financing.
The Debtors related both Debtors will tap the services of TAG
because of the intertwined nature of Debtors' operations and
indebtedness, it is likely that any financing package, interim or
long-term, will likely involve both Debtors. TAG has agreed that
TAG's role will be limited to procuring interim or exit financing.
To the best of the Debtors' knowledge, TAG does not represent nor
hold an interest adverse to either Debtor or to their respective
estates.
The Court ordered that TAG will apply to the Court for approval of
compensation in an amount equal to 5% of the funds provided to the
Debtors.
About Healthcare of Florence
Healthcare of Florence, LLC, filed a bare-bones Chapter 11
petition (Bankr. D. Ariz. Case No. 12-08547) in Tucson, Arizona,
on April 23, 2012. Healthcare of Florence, LLC --
http://www.florencecommunityhealthcare.com-- owns and operates a
full-service community hospital in Florence, Arizona.
Judge James M. Marlar presides over the case. James F. Kahn P.C.
serves as the Debtor's counsel. The Debtor disclosed $42,244,804
in assets and $39,007,338 in liabilities as of the Chapter 11
filing. The petition was signed by Edward McEachern, CEO of
Initiatives Healthcare, LLC, manager of debtor.
The U.S. Trustee appointed a three-member creditors committee.
HEALTHSOUTH CORP: Moody's Retains 'Ba3' CFR/PDR; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service assigned a Baa3 (LGD 2, 10%) rating to
HealthSouth Corporation's amended and restated senior secured
credit facility. Moody's also withdrew the ratings on the
previously rated facilities. The amendment increased the size of
the company's revolver to $600 million from $500 million and
eliminated the former $100 million term loan. The expiration date
of the revolver was also extended through August 2017.
HealthSouth's Corporate Family and Probability of Default Ratings
of Ba3 are unchanged. The rating outlook is stable.
Following is a summary of Moody's rating actions.
Rating assigned:
$600 million senior secured revolving credit facility expiring
2017, Baa3 (LGD 2, 10%)
Ratings unchanged:
Corporate Family Rating, Ba3
Probability of Default Rating, Ba3
7.25% senior unsecured notes due 2018, B1 (LGD 4, 67%)
8.125% senior unsecured notes due 2020, B1 (LGD 4, 67%)
7.75% senior unsecured notes due 2022, B1 (LGD 4, 67%)
Speculative Grade Liquidity rating at SGL-2
Ratings withdrawn:
$500 million senior secured revolver expiring 2016, Baa3
(LGD 2, 11%)
$100 million senior secured term loan due 2016, Baa3
(LGD 2, 11%)
Ratings Rationale
The Ba3 Corporate Family Rating reflects HealthSouth's solid
credit metrics and Moody's expectation that such metrics will
continue to improve modestly as strong free cash flow generation
will allow the company to grow its business without the use of
incremental debt. Moody's also acknowledges HealthSouth's
considerable scale and geographic diversification, that should
allow the company to adjust to or mitigate payment reductions more
easily than many other inpatient rehabilitation providers.
However, Moody's also considers risks associated with
HealthSouth's reliance on the Medicare program for a significant
portion of revenue and limited services in one niche of the post-
acute continuum of care. The rating also reflects Moody's concerns
with the uncertainty around the implementation of provisions of
the healthcare reform legislation and the potential for greater
Medicare reimbursement pressure starting in 2013.
Moody's would need to gain additional comfort around the company's
high exposure to Medicare and the potential for negative
reimbursement changes prior to a ratings upgrade. However, if this
was accomplished, the ratings could be upgraded if HealthSouth can
sustain leverage below 3.5 times and interest coverage above 3.0
times.
If Moody's expects debt to EBITDA to increase and be sustained
above 4.5 times, either through unforeseen adverse developments in
Medicare reimbursement, a significant debt financed acquisition, a
change in appetite for shareholder initiatives, or a deterioration
in operating performance the ratings could be downgraded.
The principal methodology used in rating HealthSouth 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.
HealthSouth is the largest operator of inpatient rehabilitation
hospitals. As of June 30, 2012, the company operated 99 inpatient
rehabilitation hospitals. The company also provides outpatient
services through a network of 26 outpatient satellite clinics,
located within or near the company's rehabilitation hospitals, and
25 hospital-based home health agencies. HealthSouth recognized
approximately $2.1 billion of revenue in the twelve months ended
June 30, 2012 before considering the provision for doubtful
accounts.
HIGH PLAINS: Delays Form 10-Q for Second Quarter
------------------------------------------------
High Plains Gas, Inc., has experienced delays in completing its
financial statements for the quarter ended June 30, 2012. As a
result, the Company is delayed in filing its Form 10-Q for the
quarter then ended.
About High Plains
Houston, Texas-based High Plains Gas, Inc., is a provider of goods
and services to regional end markets serving the energy industry.
It produces natural gas in the Powder River Basin located in
Northeast Wyoming. It provides construction and repair and
maintenance services primarily to the energy and energy related
industries mainly located in Wyoming and North Dakota.
Eide Bailly LLP, in Greenwood Village, Colorado, issued a "going
concern" qualification on the financial statements for the ear
ending Dec. 31 2011, citing significant operating losses which
raised substantial doubt about High Plains Gas' ability to
continue as a going concern.
The Company reported a net loss of $57.48 million on
$17.15 million of revenues for 2011, compared with a net loss of
$5.48 million on $2.61 million of revenues for 2010.
The Company's balance sheet at March 31, 2012, showed
$30.10 million in total assets, $37.89 million in total
liabilities, and a $7.79 million total stockholders' deficit.
HOSTESS BRANDS: Union Members Urged to Reject Final Deal
--------------------------------------------------------
The Associated Press reports that Ken Hall, a union representing
workers at Hostess Brands Inc., is advising members that rejecting
the company's final contract offer could result in the loss of
their jobs.
According to AP, Hostess has been negotiating with workers about a
new contract as it seeks to emerge from Chapter 11 bankruptcy.
The company's "Last, Best and Final Offer" was presented over the
weekend.
The report notes the Teamsters union, which represents nearly
8,000 Hostess workers, plans to review the company's offer next
week. Ballots will be mailed to members Aug. 27 and counted
Sept. 14.
AP relates Hostess has argued it needs to make changes to worker
contracts to attract the financing it needs to fix its business
and exit bankruptcy. In April the privately held company offered
a contract that included reduced pension benefits, work rule
changes to lower costs and outsourcing some delivery work. The
details of the latest offer were not disclosed, AP notes.
The report says Teamsters representative Ken Hall said the union
couldn't endorse the final contract offer. But he noted that
rejecting the contract would likely result in workers losing their
jobs. The union said it has been working closely with the Bakery,
Confectionary, Tobacco Workers and Grain Millers International
Union, which represents more than 6,000 Hostess workers.
About Hostess Brands
Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known
for iconic brands such as Butternut, Ding Dongs, Dolly Madison,
Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride,
Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution
centers and 570 outlets in 49 states.
Hostess filed for Chapter 11 bankruptcy protection early morning
on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through
12-22056) in White Plains, New York. Debtor-affiliates that filed
separate Chapter 11 petition are IBC Sales Corporation, IBC
Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and
MCF Legacy Inc. Hostess Brands disclosed assets of $982 million
and liabilities of $1.43 billion as of Dec. 10, 2011. Debt
includes $860 million on four loan agreements. Trade suppliers
are owed as much as $60 million.
The bankruptcy filing was made two years after predecessors
Interstate Bakeries Corp. and its affiliates emerged from
bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood
Holding LLC, after providing $130 million to finance the plan,
obtained control of IBC's business following the prior
reorganization. Hostess Brands is privately held. The new owners
pursued new Chapter 11 cases to escape from what they called
"uncompetitive and unsustainable" union contracts, pension plans,
and health benefit programs.
In 2011, Hostess retained Houlihan Lokey to explore sales of its
smaller assets and individual brands. Houlihan Lokey oversaw the
sale of Mrs. Cubbison's to Sugar Foods Corporation for
$12 million, but was unable to sell any of Hostess' core assets.
Judge Robert D. Drain oversees the case. Hostess has hired Jones
Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general
corporate counsel and conflicts counsel; Perella Weinberg Partners
LP as investment bankers, FTI Consulting, Inc. to provide an
interim treasurer and additional personnel for the Debtors, and
Kurtzman Carson Consultants LLC as administrative agent.
Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry
Wilson, the head of turnaround and restructuring firm MAEVA
Advisors, are representing the Teamsters union.
Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union and Bakery & Confectionery Union &
Industry International Pension Fund are Jeffrey R. Freund, Esq.,
at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David
A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright &
Jaworski L.L.P.
An official committee of unsecured creditors has been appointed in
the case. The committee selected New York law firm Kramer Levin
Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein
head the legal team for the committee.
IDQ HOLDINGS: Moody's Affirms 'B3' CFR/PDR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service has affirmed all ratings of IDQ Holdings
Inc. (IDQ), including the B3 Corporate Family Rating and the B3
rating on IDQ's $220 million senior secured notes. The affirmation
follows IDQ's issuance of $45 million senior secured PIK notes
(PIK Notes) to fund a dividend to its sponsor, Castle Harlan, and
pay related transaction related fees and expenses. The rating
outlook is stable.
The following ratings were affirmed:
B3 Corporate Family Rating:
B3 Probability of Default rating; and
B3 (LGD3, 48% from 57%) on the $220 million senior secured
notes due 2017.
Ratings Rationale
The debt funded dividend has increased leverage roughly one-turn
to 5.2 times, proforma at June 30, 2012, and will temporarily
exceed Moody's leverage threshold for the B3 rating. However,
Moody's expects leverage to fall into the 4.0 times to 5.0 times
range in the near term, as the company delivers earnings growth in
the low-to-mid single digit range following the successful launch
of its A/C Pro product line and growing awareness of its do-it-
yourself automobile refrigerant products. The B3 ratings continue
to incorporate Moody's view that Castle Harlan will aggressively
withdraw capital from IDQ's operations as the business grows and
earnings improve. Since December 2011, Castle Harlan has executed
three debt-financed shareholder distributions.
The B3 CFR also reflects IDQ's small scale, exclusive focus on the
niche, automotive air-conditioning maintenance and repair market,
significant seasonal working capital needs, and a high customer
concentration. The rating benefits from the company's high market
share within its key end market, the growing demand for its need-
based products, strong margins and demonstrated ability to pass
through commodity cost increases.
The unrated $45 million PIK Notes due October 2017 are expected to
be structurally subordinated to the existing notes and unrated ABL
and will not benefit from guarantees of IDQ and its subsidiaries.
Since the existing notes do not allow dividends to exceed 50% of
accrued net income, Moody's anticipates that the PIK Notes will
contain a PIK toggle feature that allows the company to pay
interest in kind to the extent it has not generated enough net
income to meet these restrictions. Moody's expects that IDQ will
pay a portion of the interest in cash over the next two years
which would reduce Moody's expectations for free cash flow.
The ratings could be downgraded if leverage remains above 5.0
times for several quarters or liquidity deteriorates. Further,
adverse regulatory developments, while not expected, would create
negative ratings pressure. Ratings could be upgraded if IDQ
increases its scale and diversification and strengthens its
liquidity profile to better accommodate future growth and seasonal
working capital needs, while maintaining leverage levels around
4.0 times Debt-to-EBITDA (including Moody's adjustments and
seasonal borrowings).
The principal methodology used in rating IDQ Holdings Inc. was the
Global Packaged Goods Industry Methodology published in July 2009.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
IDQ Holdings Inc. (IDQ), headquartered in Garland, Tx, is a
leading provider of packaged refrigerant products including cans,
all in one kits, chemicals, lubricants, leak sealants, tools, and
accessories for the servicing of automotive air conditioning
systems primarily for the Do-It-Yourself (DIY) automotive
aftermarket in North America. IDQ was acquired by Castle Harlan,
Inc. in 2010. Revenues for the twelve months ended June 30, 2012
were approximately $167 million.
IGLESIA EPISCOPAL: S&P Lowers Rating on PR Bonds to 'CCC'
---------------------------------------------------------
Standard & Poor's Ratings Services has lowered its long-term
rating on Puerto Rico Industrial Medical & Higher Education &
Environmental Pollution Control Facilities Finance Authority's
bonds, issued for Iglesia Episcopal Puertorriquena Inc. (IEP) to
'CCC' from 'B-'.
"We based the downgrade on our assessment of IEP's substantially
decreased volumes, revenues, and operating results, which led to
an operating loss and very thin debt service coverage following a
July 2011 decision by former management to terminate a key
insurance contract that covered a significant portion of Medicaid
patients in the service area," said Standard & Poor's credit
analyst Charlene Butterfield. "The negative outlook reflects our
opinion of IEP's weakened operating performance in 2011, and
remaining uncertainty regarding the issuance of final audits for
2010 and 2011, the lack of a formal plan regarding the substantial
bullet debt payment in 2014, and the lack of a comprehensive
reimbursement contract with the largest Medicaid insurer in the
service area," said Ms. Butterfield.
"According to Standard & Poor's, current management has made
progress during the first seven months of fiscal 2012 ended July
31 to restore Medicaid patient access in key clinical services and
through the first half of 2012 ended June 30, has trimmed expenses
in response to the volume and revenue decrease. As a result of
management efforts, IEP's operating results improved to roughly
breakeven through the 2012 first half ended June 30," S&P said.
"The downgrade also reflects various factors that shape IEP's
credit profile, including a technical default regarding its bank
loan covenants. Management expects to receive a waiver from the
bank in the near term on the basis of improved profitability, and
to date has not yet received any notice of acceleration of bank
debt. Without the bank waiver, IEP's auditor will not release
final audits for the 2011 or 2010 fiscal years. In Standard &
Poor's opinion, the uncertainty regarding the reinstatement of the
full Medicaid contract, attainment of the bank waiver, release of
the 2010 and 2011 audits, and the repayment of the $77 million
bullet maturity due 2014 could jeopardize IEP's ability to repay
its substantial debt load during the next one to two years. In the
meantime, IEP continues to make all debt payments on time and in
full, and all audited statements for fiscals 2011 and 2010 remain
in draft form," S&P said.
"To return to stable at the current rating, IEP would need to
continue posting improved operating results, according to Standard
& Poor's. Failure to obtain a bank waiver regarding the covenant
violations on the bank loans, issue final audits for 2010 and
2011, or develop a plan regarding the bullet maturity due in 2014,
could result in a lower rating during the next year," S&P said.
IMH FINANCIAL: Incurs $6.1 Million Net Loss in Second Quarter
-------------------------------------------------------------
IMH Financial Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $6.14 million on $1.30 million of total revenue for
the three months ended June 30, 2012, compared with a net loss of
$6.87 million on $881,000 of total revenue for the same period a
year ago.
The Company reported a net loss of $14.04 million on $2.57 million
of total revenue for the six months ended June 30, 2012, compared
with a net loss of $12.28 million on $1.90 million of total
revenue for the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $233.38
million in total assets, $82.67 million in total liabilities and
$150.71 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/MtuJSF
About IMH Financial
Scottsdale, Ariz.-based IMH Financial Corporation was formed from
the conversion of IMH Secured Loan Fund, LLC, or the Fund, a
Delaware limited liability company, on June 18, 2010. The
conversion was effected following a consent solicitation process
pursuant to which approval was obtained from a majority of the
members of the Fund to effect the Conversion Transactions and
involved (i) the conversion of the Fund from a Delaware limited
liability company into a Delaware corporation named IMH Financial
Corporation, and (ii) the acquisition by the Company of all of the
outstanding shares of the manager of the Fund Investors Mortgage
Holdings Inc., or the Manager, as well as all of the outstanding
membership interests of a related entity, IMH Holdings LLC, or
Holdings on June 18, 2010.
The Company is a commercial real estate lender based in the
southwest United States with over 12 years of experience in many
facets of the real estate investment process, including
origination, underwriting, documentation, servicing, construction,
enforcement, development, marketing, and disposition. The Company
focuses on a niche segment of the real estate market that it
believes is underserved by community, regional and national banks:
high yield, short-term, senior secured real estate mortgage loans.
The intense level of underwriting analysis required in this
segment necessitates personnel and expertise that many community
banks lack, yet the requisite localized market knowledge of the
underwriting process and the size of the loans the Company seeks
often precludes the regional and community banks from efficiently
entering this market.
The Company reported a net loss of $35.19 million in 2011, a net
loss of $117.04 million in 2010, and a net loss of $74.47 million
in 2009.
INTELLICELL BIOSCIENCES: Delays Form 10-Q for Second Quarter
------------------------------------------------------------
Intellicell Biosciences, Inc., notified the U.S. Securities and
Exchange Commission that the compilation, dissemination and review
of the information required to be presented in the quarterly
report on Form 10-Q for the period ended June 30, 2012, has
imposed time constraints that have rendered timely filing of the
Quarterly Report impracticable without undue hardship and expense
to the Company. The Company undertakes the responsibility to file
that report no later than five days after its original prescribed
due date.
About Intellicell Biosciences
Intellicell BioSciences, Inc., headquartered in New York, N.Y.,
was formed on Aug. 13, 2010, under the name "Regen Biosciences,
Inc." as a pioneering regenerative medicine company to develop and
commercialize regenerative medical technologies in large markets
with unmet clinical needs. On Feb. 17, 2011, the company changed
its name from "Regen Biosciences, Inc." to "IntelliCell
BioSciences Inc". To date, IntelliCell has developed proprietary
technologies that allow for the efficient and reproducible
separation of stromal vascular fraction (branded
"IntelliCell(TM)") containing adipose stem cells that can be
performed in tissue processing centers and in doctors' offices.
The Company's balance sheet at March 31, 2012, showed $3.51
million in total assets, $21.97 million in total liabilities, and
a $18.46 million total stockholders' deficit.
The Company has incurred losses since inception resulting in an
accumulated deficit of $43,079,590 and a working capital deficit
of $3,811,024 as of March 31, 2012, respectively. However, if the
non-cash expense related to the Company's change in fair value of
derivative liability and stock based compensation is excluded then
the accumulated deficit amounted to $4,121,538. Further losses
are anticipated in the continued development of its business,
raising substantial doubt about the Company's ability to continue
as a going concern.
INTERLEUKIN GENETICS: Incurs $1.2 Million Net Loss in 2nd Quarter
-----------------------------------------------------------------
Interleukin Genetics, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $1.22 million on $799,435 of total revenue for the
three months ended June 30, 2012, compared with a net loss of
$1.21 million on $796,865 of total revenue for the same period a
year ago.
The Company reported a net loss of $2.64 million on $1.47 million
of revenue for the six months ended June 30, 2012, compared with a
net loss of $2.46 million on $1.51 million of total revenue for
the same period a year ago.
The Company reported a net loss of $5.0 million for 2011, compared
with a net loss of $6.0 million for 2010.
The Company's balance sheet at June 30, 2012, showed $4.87 million
in total assets, $16.09 million in total liabilities, all current,
and a $11.21 million total stockholders' deficit.
Following the Company's financial results for the year ended
Dec. 31, 2011, Grant Thornton LLP, in Boston, Massachusetts,
expressed substantial doubt about Interleukin Genetics' ability to
continue as a going concern. The independent auditors noted that
the Company incurred a net loss of $5.02 million during the year
ended Dec. 31, 2011, and, as of that date, the Company's current
liabilities exceeded its current assets by $12.27 million and its
total liabilities exceeded total assets by $11.4 million.
A copy of the Form 10-Q is available for free at:
http://is.gd/ODPLPm
About Interleukin
Waltham, Mass.-based Interleukin Genetics, Inc., is a personalized
health company that develops unique genetic tests to provide
information to better manage health and specific health risks.
INTERNATIONAL LEASE: Moody's Rates Senior Unsecured Notes 'Ba3'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to International
Lease Finance Corporation's (ILFC) benchmark senior unsecured
notes maturing 2022 (Notes). The firm's Ba3 Corporate Family
rating and stable outlook are unchanged.
Ratings Rationale
The terms of the Notes are consistent with ILFC's existing
unsecured debt issuance. The Notes will rank pari passu with
ILFC's other unsecured debt. The rating of the Notes is based on
ILFC's fundamental credit characteristics and the position of the
Notes in ILFC's capital structure.
ILFC's Ba3 Corporate Family rating is based on its leading global
franchise positioning, manageable and relatively balanced
geographic, aircraft, and customer risk exposures and resilient
operating cash flow. The rating also recognizes the significant
progress ILFC has made in restructuring its liabilities, building
liquidity and reducing leverage since the beginning of 2010.
Contrasting this, Moody's believes that ILFC faces challenges
relating to sustaining lease margin improvements and generating
attractive returns on equity. A key concern relates to the effect
of weaker European economic conditions on air travel volumes,
aircraft demand and lease rates, and airline credit quality; fuel
price volatility and higher new aircraft production rates could
add to lease rate pressures. Other credit challenges include the
monoline and cyclical nature of ILFC's business, its exposure to
aircraft residual value risks, and its reliance on confidence-
sensitive wholesale funding.
The rating outlook is stable, reflecting Moody's expectation that
ILFC will continue to maintain adequate liquidity and capital
cushions, but that improvement in profitability could be slow to
develop in the near term.
Moody's rates ILFC based on its intrinsic characteristics and do
not incorporate an assumption of support from ILFC's parent AIG
into the rating. No longer a core holding of AIG, ILFC has
strengthened its stand-alone profile and transitioned toward
greater operating and financial independence, reducing the need
for and expectation of AIG support. Moody's expects that AIG will
eventually divest ILFC through a public offering of shares.
In its last ILFC rating action on June 15, 2012, Moody's upgraded
the Corporate Family and senior unsecured ratings to Ba3 from B1
and revised the rating outlook to stable. The debt ratings of
Delos Aircraft Inc., Flying Fortress Inc., ILFC E-Capital Trust I,
and ILFC E-Capital Trust II were similarly upgraded by one notch
and the rating outlooks revised to stable.
The principal methodology used in this rating was the Finance
Company Global Rating Methodology published March 2012.
International Lease Finance Corporation, headquartered in Los
Angeles, California, is a major owner-lessor of commercial
aircraft.
IRWIN MORTGAGE: KFB and B&T OK'd for Barofsky Mortgage Fraud Case
-----------------------------------------------------------------
The Hon. Charles M. Caldwell of the U.S. Bankruptcy Court for the
Southern District of Ohio authorized Irwin Mortgage Corporation to
employ Kurkin Forehand Brandes LLP and Barnes & Thornburg LLP as
special litigation co-counsel to prosecute the Barofsky Mortgage
fraud matter on a shared contingency fee basis.
As reported in the Troubled Company Reporter on Jan. 27, 2012,
KFB and B&T will act as co-counsel, and will share in the
contingency fee. The Court has already approved B&T's employment
as special litigation counsel on a contingency fee basis for
similar contingency matters.
The Debtor will be entitled to 40% of the recovery and KFB &
B&T will be entitled to share 60% of the recovery in the Barofsky
Mortgage Fraud Matter from and after the Petition Date. KFB and
B&T will split their 60% Shared Contingency Fee as follows: KFB
will receive 40% of the Shared Contingency Fee and B&T will
receive 60% of the Shared Contingency Fee.
KFB and/or B&T will fund all litigation expenses in the Barofsky
Mortgage fraud matter.
As special litigation co-counsel in the Barofsky Mortgage Fraud
Matter, KFB and B&T will:
a. advise the Debtor with respect to any claims, defenses,
preparations, strategy, settlement and related matters;
b. prepare on behalf of the Debtor all necessary and
appropriate pleadings which may be required;
c. advise and represent the Debtor in all discovery matters;
d. advise and represent the Debtor in all settlements and
related matters, including the documentation of any
settlement and related matters; and
e. advise and represent the Debtor to collect and recover any
judgment.
To the best of the Debtor's knowledge, KFB, along with B&T, is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Irwin Mortgage
For a number of years, Irwin Mortgage Corporation, based in
Dublin, Ohio, originated, purchased, sold and serviced
conventional and government agency backed residential mortgage
loans throughout the United States. However, in 2006 and
continuing into early 2007, IMC sold substantially all of its
assets, including its mortgage origination business, its mortgage
servicing business, and its mortgage servicing rights portfolio,
to a number of third party purchasers. As a result of those
sales, IMC terminated its operations and has been winding down
since 2006.
Irwin Mortgage filed for Chapter 11 bankruptcy (Bankr. S.D. Ohio
Case No. 11-57191) on July 8, 2011. Judge Charles M. Caldwell
presides over the case. In its petition, the Debtor estimated
assets of $10 million to $50 million, and debts of $50 million to
$100 million. The petition was signed by Fred C. Caruso,
president.
Nick V. Cavalieri, Esq., Matthew T. Schaeffer, Esq., and Robert B.
Berner, Esq., at Bailey Cavalieri LLC, serve as the Debtor's
counsel. Fred C. Caruso and Development Specialists Inc. provide
wind-down management services to the Debtor.
IRWIN MORTGAGE: Has Until Nov. 2 to Propose Chapter 11 Plan
-----------------------------------------------------------
The Hon. Charles M. Caldwell of the U.S. Bankruptcy Court for the
Southern District of Ohio, in a third order, extended Irwin
Mortgage Corporation's exclusive periods to file and solicit
acceptances for the proposed chapter 11 plan until Nov. 2, 2012,
and Jan. 4, 2013, respectively.
Previously, the Court extended the Debtor's exclusive periods
until July 6, and Sept. 7.
About Irwin Mortgage
For a number of years, Irwin Mortgage Corporation, based in
Dublin, Ohio, originated, purchased, sold and serviced
conventional and government agency backed residential mortgage
loans throughout the United States. However, in 2006 and
continuing into early 2007, IMC sold substantially all of its
assets, including its mortgage origination business, its mortgage
servicing business, and its mortgage servicing rights portfolio,
to a number of third party purchasers. As a result of those
sales, IMC terminated its operations and has been winding down
since 2006.
Irwin Mortgage filed for Chapter 11 bankruptcy (Bankr. S.D. Ohio
Case No. 11-57191) on July 8, 2011. Judge Charles M. Caldwell
presides over the case. In its petition, the Debtor estimated
assets of $10 million to $50 million, and debts of $50 million to
$100 million. The petition was signed by Fred C. Caruso,
president.
Nick V. Cavalieri, Esq., Matthew T. Schaeffer, Esq., and Robert B.
Berner, Esq., at Bailey Cavalieri LLC, serve as the Debtor's
counsel. Fred C. Caruso and Development Specialists Inc. provide
wind-down management services to the Debtor.
ITRACKR SYSTEMS: Posts $301,000 Net Loss in Second Quarter
----------------------------------------------------------
iTrackr Systems, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $301,032 on $152,708 of revenue for the
three months ended June 30, 2012, compared with a net loss of
$126,908 on $46,826 of revenue for the same period last year.
For the six months ended June 30, 2012, the Company had a net loss
of $775,077 on $290,955 of revenue, compared with a net loss of
$256,738 on $93,076 of revenue for the same period of 2011.
The Company's balance sheet at June 30, 2012, showed $2.3 million
in total assets, $1.8 million in total current liabilities, and
stockholders' equity of $447,504.
According to the regulatory report, in the course of funding
development and sales and marketing activities, the Company has
sustained operating losses since inception and has an accumulated
deficit of $5.7 million and $5.0 million at June 30, 2012, and
Dec. 31, 2011, respectively. In addition, the Company has
negative working capital of $1.6 million and $1.3 million at
June 30, 2012, and Dec. 31, 2011, respectively.
"The Company has and will continue to use significant capital to
commercialize its products. These factors raise substantial doubt
about the ability of the Company to continue as a going concern."
A copy of the Form 10-Q is available for free at:
http://is.gd/yDTiMF
Deerfield Beach, Fla.-based iTrackr Systems, Inc., is an emerging
ecommerce and social media software and services company. The
Company has developed two technology platforms branded as RespondQ
and iTrackr both of which enable web based and local businesses to
increase sales through innovative technology and increased web
presence.
IVEDA SOLUTIONS: Posts $848,300 Net Loss in Second Quarter
----------------------------------------------------------
Iveda Solutions, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $848,337 on $1.1 million of revenue for
the three months ended June 30, 2012, compared with a net loss of
$1.2 million on $575,815 of revenue for the same period last year.
For the six months ended June 30, 2012, the Company had a net loss
of $1.6 million on $1.8 million of revenue, compared with a net
loss of $1.6 million on $859,718 of revenue for the same period of
2011.
The Company's balance sheet at June 30, 2012, showed $4.3 million
in total assets, $2.7 million in total liabilities, and
stockholders' equity of $1.6 million.
The Company has generated an accumulated deficit from operations
of approximately $12.8 million at June 30, 2012. The accumulated
deficit was $11.2 million at Dec. 31, 2011.
As reported in the TCR on April 9, 2012, Albert Wong & Co., in
Hong Kong, expressed substantial doubt about Iveda Solutions'
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 from
operations and has a significant accumulated deficit. "In
addition, the Company continues to experience negative cash
flows from operations."
A copy of the Form 10-Q is available for free at:
http://is.gd/07UP7F
Iveda Solutions, Inc., is a premier online surveillance technology
innovator and Managed Video Services provider. Based in Mesa,
Ariz., with a subsidiary in Taiwan (MEGAsys), the Company develops
and markets enterprise-class video hosting and real-time remote
surveillance services. Iveda Solutions has a SAFETY Act
Designation by the Department of Homeland Security as a Qualified
Anti-Terrorism Technology provider.
JDA SOFTWARE: S&P Affirms 'BB-' Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Scottsdale, Ariz.-based JDA Software Group Inc. to stable from
negative. "We also affirmed our ratings on JDA, including our 'BB-
' corporate credit rating and our 'BB-' senior unsecured rating.
The '3' recovery rating on the senior unsecured debt remains
unchanged," S&P said.
"The internal investigation led by JDA's audit committee found no
indication of fraud or intentional wrongdoing. Additionally, the
internal investigation did not reveal any issues with the
existence of the recorded revenue or any impact to actual cash
received or reported cash balances as of December 2011, 2010, and
2009. With its filings, JDA believes it is in compliance with
applicable requirements," S&P said.
"The ratings on JDA reflect its second-tier presence in a highly
competitive and consolidating industry and its niche product
offerings," said Standard & Poor's credit analyst Philip Schrank.
"A solid base of recurring revenues and currently moderate
leverage for the rating partially offset these fundamental
business characteristics."
"The stable rating outlook incorporates our expectation that
leverage will be managed at 4x or below over time. We could,
however, lower the rating if the company has issues integrating
acquired operations, shifts to a more aggressive growth strategy,
or implements shareholder-friendly initiatives leading to
sustained leverage above 4.5x," S&P said.
"A possible upgrade is not likely over the near term. We will
monitor developments regarding the ongoing SEC inquiry and
progress of remediating its material weakness in its internal
control of financial reporting," S&P said.
JEFFERSON COUNTY, AL: Group Must Rework $1.6BB Sewer Claim
----------------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that an Alabama
bankruptcy judge sent a group of 13 Jefferson County elected
officials and residents back to the drawing board Aug. 15,
ordering them to rework the various pleadings seeking class
standing for a $1.6 billion claim based on the hikes to the local
sewer rates.
The group, led by Birmingham City Council President Roderick V.
Royal, sought class standing for the county's 130,000 residents
who it alleged had been overcharged for sewer service when the
now-bankrupt country passed along the costs of the disastrous debt
deal, according to Bankruptcy Law360.
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.
KENNEDY WILSON: Moody's Lowers Corp Family Rating to 'B2'
---------------------------------------------------------
Moody's Investors Service has downgraded the senior unsecured and
corporate family ratings of Kennedy Wilson, Inc. to B2, from B1.
The outlook remains stable.
Ratings Rationale
The ratings downgrade reflects key financial ratios for Kennedy
Wilson, including fixed charge coverage and leverage (as measured
by net debt/EBITDA) that are commensurate with a B2 rating. Over
the past 18 months the company's rapid growth has been heavily
reliant on off-balance sheet activities. The company's assets have
grown from $488 million at December 31, 2010 to $807 million at
June 30, 2012, a 65% increase. Moody's notes that Kennedy Wilson
has raised approximately $225 million in common equity since the
end of 2010. Over this same period, trailing-twelve month fixed
charge coverage (as measured by EBITDA/interest expense plus
preferred dividends; EBITDA includes equity in joint venture
income) has declined from 1.7X (pro forma for the 2011 bond
offering) to 1.0X, and leverage has increased from 5.3X (pro forma
for the 2011 bond offering) to 7.8X. These metrics are
significantly weaker when taking into consideration the company's
pro rata share of unconsolidated joint ventures.
Kennedy Wilson's growth over the past 18 months has come from both
investments in the United States as well as from Kennedy Wilson
Europe, which was established last year after the acquisition of
Bank of Ireland Real Estate Investment Management in June 2011.
This was followed by the acquisition of a $1.8 billion UK loan
portfolio in December 2011 from the Bank of Ireland. Kennedy
Wilson's investments in Europe account for 14.1% of total
investments at 2Q12. In addition, the company has announced
earlier this year two separate partnerships, one with Fairfax
Financial and one with a major financial institution, targeting
the acquisition of real estate loans (commercial and residential,
performing and non-performing) and commercial real estate property
in Europe, specifically the UK and Ireland. Moody's acknowledges
that Kennedy Wilson has established its European headquarters,
with operating infrastructure, in London. The entry into Europe
poses a concern for Moody's, not only because Kennedy Wilson has
no prior experience in the UK and Irish real estate markets, but
also due to increased exposure to off-balance sheet joint ventures
which have grown to over 70% of total revenues in 2012 from 45% in
2010. Moody's does note however that the company has been
successful with its Japanese investments. While Kennedy Wilson has
garnered long-standing relationships with large institutional
partners over the years, these off-balance sheet transactions
often have complex structures and lack transparency. Joint
ventures are expected to remain a significant component of Kennedy
Wilson's business model. Such large exposures are in line with
Moody's B2 rating.
The stable rating outlook reflects Moody's expectation that TTM
fixed charge coverage (not including pro rata share of JVs) will
improve closer to 1.4X and that TTM leverage has peaked and will
decline below 5.0X (which would be materially higher when
including pro rata share of JVs) over the next year. The stable
outlook also reflects that Kennedy Wilson will scale its business
successfully as it continues to grow KW Investments, all while
maintaining adequate liquidity.
Moody's indicated that an upgrade would be predicated upon the
following (all metrics are inclusive of KW's proportionate share
of joint ventures): (1) fixed charge coverage above 1.5X; (2)
leverage below 9.0X; (3) reduction in effective leverage (as
measured by debt plus preferred equity as a percentage of gross
assets) below 65%; (4) maintenance and growth in recurring income-
generating, unencumbered assets; (5) increased public disclosure
and transparency of its off-balance sheet ventures; (6) success in
integrating its European investments and operations, and (7)
further increasing its size and geographic diversity. A rating
downgrade could result if the following were to occur (all metrics
are inclusive of KW's proportionate share of joint ventures): (1)
a decline in fixed charge coverage below 1.0X; (2) leverage above
12.0X; (3) effective leverage closer to 80%; (4) secured debt as a
percentage of gross assets in excess of 60%; and (5) a loss of key
business relationships.
The following ratings were downgraded with a stable outlook:
Kennedy Wilson, Inc. -- senior unsecured rating to B2 from B1;
corporate family rating to B2 from B1
The last rating action with respect to Kennedy Wilson was on March
28, 2011 when Moody's assigned a (P)B1 ratings to Kennedy Wilson's
proposed senior unsecured debt and assigned a B1 corporate family
rating. The outlook was stable.
Kennedy-Wilson Holdings, Inc. [NYSE: KW] is an international real
estate investment and services firm. The company has grown from a
real estate auction business into a vertically-integrated real
estate operating company with almost $12 billion of assets under
management totaling over 58 million square feet of properties
throughout the United States, Europe and Japan, including
ownership in 14,114 multifamily apartment units.
The principal methodology used in this rating was Global Rating
Methodology for REITs and Other Commercial Property Firms
published in July 2010.
KIWIBOX.COM INC: Delays Form 10-Q for Second Quarter
----------------------------------------------------
Kiwibox.Com, Inc., informed the U.S. Securities and Exchange
Commission that it will be delayed in filing its quarterly report
on Form 10-Q for the period ended June 30, 2012.
About Kiwibox.com
New York-based Kiwibox.com, Inc., acquired in the beginning of
2011 Pixunity.de, a photoblog community and launched a U.S.
version of this community in the summer of 2011. Effective July
1, 2011, Kiwibox.com, Inc., became the owner of Kwick! --a top
social network community based in Germany. Kiwibox.com shares are
freely traded on the bulletin board under the symbol KIWB.OB.
In its report on the 2011 financial statements, Rosenberg Rich
Baker Berman & Company, in Somerset, New Jersey, expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that the Company
has suffered losses from operations and has a working capital
deficiency as of Dec. 31, 2011.
The Company reported a net loss of $5.90 million in 2011, compared
with a net loss of $3.97 million in 2010.
The Company's balance sheet at March 31, 2012, showed $8.27
million in total assets, $16.92 million in total liabilities, all
current, and a $8.64 million total stockholders' impairment.
LEHMAN BROTHERS: Officemax Extinguishes Non-Recourse Liability
--------------------------------------------------------------
OfficeMax (R) Incorporated has entered into an agreement to
extinguish the non-recourse liability related to the Lehman-backed
timber notes. This agreement is subject to the approval of the
United States Bankruptcy Court, which OfficeMax expects will be
determined within the next two to three months.
"We are pleased with the imminent removal of the non-recourse
Lehman timber notes liability from our financial statements," said
Ravi Saligram, President and CEO of OfficeMax. "As shared during
our second-quarter earnings call, we continue to explore ways to
enhance our capital structure and drive shareholder value.
Today's event is a significant step forward in our efforts to
simplify our balance sheet."
Expected Impact
Concurrently with the effectiveness of the agreement and
extinguishment of this debt, OfficeMax will recognize a non-cash,
pre-tax gain of $671.1 million, which is equal to the difference
between:
The carrying value of the non-recourse liability pertaining to the
Lehman-backed securitization notes ($735.0 million at June 30,
2012) plus the related interest payable (USD$17.9 million at
June 30, 2012; and together, $752.9 million); and
The carrying value of the receivable pertaining to the Lehman-
backed installment note ($32.2 million at June 30, 2012) plus the
$49.6 million initial distribution made by the Lehman estate
(together, $81.8 million at June 30, 2012).
Pursuant to the agreement, the trustee will simultaneously release
OfficeMax and its affiliates from the non-recourse liabilities,
upon the transfer of the Lehman-backed note and guaranty from
OfficeMax to the trustee for the securitization note holders.
In the quarter following effectiveness, OfficeMax anticipates that
it will make a cash payment in the amount of approximately $15
million, representing the accelerated tax liability on
approximately one half of the gain on the 2004 timberlands sale
transaction, mostly offset by alternative minimum tax credits.
OfficeMax anticipates using available cash to fund the tax
payment.
$817.5-Mil. Lehman Note
As previously disclosed, OfficeMax received an USD$817.5-million
Lehman-backed note in connection with a 2004 timberlands sale.
Also in 2004, OfficeMax monetized the note by issuing
securitization notes through a special purpose entity. Payment of
these securitization notes was guaranteed by Lehman and was non-
recourse to OfficeMax. Lehman's bankruptcy filing on Sep. 15,
2008 constituted an event of default under the note. For more
information on these matters, see the company's most recent Form
10-Q, filed with the Securities and Exchange Commission on Aug. 3,
2012.
"We remain in the midst of a comprehensive review of all aspects
of our balance sheet," said Bruce Besanko, Executive Vice
President, Chief Financial Officer and Chief Administrative
Officer of OfficeMax. "The extinguishment of the Lehman non-
recourse liability will help to create greater clarity for our
investors, as our efforts to simplify the balance sheet continue."
About OfficeMax Incorporated
Headquartered in Naperville, Illinois, OfficeMax Incorporated
(NYSE: OMX) -- http://www.officemax.com/ -- is into both
business-to-business office products solutions and retail office
products. The company provides office supplies and paper, in-
store print and document services through OfficeMax ImPress(TM),
technology products and solutions, and furniture to consumers and
to large, medium and small businesses. OfficeMax customers are
served by over 36,000 associates through direct sales, catalogs,
e-commerce.
OfficeMax customers are served by approximately 35,000 associates
through direct sales, catalogs, e-commerce and more than 900
stores.
* * *
Moody's Investor Service placed OfficeMax Inc.'s probability of
default rating at 'Ba2' in September 2006. The rating still holds
to date.
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.
LEHMAN BROTHERS: Announces Aug. 31 Record Date for Distribution
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports Lehman Brothers Holdings Inc. disclosed that the second
distribution under the Chapter 11 plan will be made Oct. 1 to
creditors of record Aug. 31. On Aug. 17 Lehman disclosed
settlement of claims related to a structured financing with
OfficeMax Inc. The settlement will remove $400 million in claims
while allowing OfficeMax to recognize a $671.1 million non-cash,
pretax gain.
According to the report, OfficeMax will have an approved claim for
$441.6 million and release from non-recourse liabilities. The
settlement frees $11 million cash for distribution to creditors
and removes the need for holdbacks on claims of more than $800
million. The settlement comes to bankruptcy court for approval on
Sept. 19.
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.
LIFE PARTNERS: Texas Judge Declines to Appoint Receiver
------------------------------------------------------
The Wall Street Journal's Mark Maremont reports that Judge Orlinda
Naranjo of Travis County District Court, Texas, declined a request
by state regulators to immediately appoint a receiver over Life
Partners Holdings Inc., but said the regulators were "likely to
prevail" in claims that the company committed fraud in connection
with its business of selling life-insurance investments. Judge
Naranjo issued a temporary order against Life Partners CEO Brian
Pardo, and certain other defendants, enjoining them from
destroying or removing records or dissipating company assets.
A new hearing is scheduled for Aug. 30.
Life Partners, of Waco, Texas, is a major player in the secondary
market for life insurance, in which investors buy the rights to
the death benefits of total strangers. The original policyholder
receives a lump sum, while the investors continue to pay the
premiums, betting they will eventually collect a death benefit
worth more than what they spent. The shorter the insured person
is expected to live, the more a policy is worth.
According to the report, in a complaint filed Thursday, Texas'
Attorney General and Securities Commissioner sued Life Partners,
Mr. Pardo and others, alleging that immediate action was needed
because the company's "fraudulent scheme is unraveling" and
investor escrow accounts to pay policy premiums are underfunded by
$300 million. The regulators alleged Life Partners committed
fraud by telling investors life expectancies were "significantly
shorter" than they should have been, to generate inflated revenue.
The regulators said Life Partners had sold shares in policies to
about 29,000 investors nationwide, who had entrusted more than
$1.5 billion to the firm. Regulators warned that the declining
financial situation could result in the lapse of policies, "which
would cause investors to lose their entire investment."
According to the report, Mr. Pardo has said the company denies the
allegations "in the strongest possible terms," and said the claim
that the company was nearing insolvency was "spurious." He said
Life Partners has more than $10 million in cash on hand and no
debt.
LIFECARE HOLDINGS: Moody's Says Ratings Reflect Missed Payment
--------------------------------------------------------------
Moody's Investors Service says LifeCare Holdings, Inc. (Caa3
negative) missed a $5.5 million senior subordinated interest
payment due August 15, 2012. This credit negative event will cause
an event of default under the subordinated notes indenture and
cross-default of the senior secured debt. If the interest payment
is not made within the 30-day grace period, approximately $456
million of total debt including approximately $337 million of
senior secured debt and $119 million of subordinated notes could
become due and payable.
The ratings are not immediately impacted. However, Moody's could
change the probability of default rating to "D" or "LD", denoting
a default or limited default, based on developments during the 30-
day grace period and the resolution of the missed interest payment
on the subordinated notes. The corporate family rating could also
be downgraded.
Headquartered in Plano, TX, LifeCare operates 27 long-term acute
care hospitals in ten states. The company's facilities include
eight "hospital within a hospital" facilities ("HWH") and 19 free-
standing facilities. In addition, the company holds a 50%
investment in a joint venture for a long-term care hospital.
LifeCare reported revenues of $472 million for the twelve months
ended June 30, 2012. LifeCare is owned by Carlyle.
LIQUIDMETAL TECHNOLOGIES: Incurs $8.9 Million Net Loss in Q2
------------------------------------------------------------
Liquidmetal Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $8.90 million on $214,000 of total revenue for the
three months ended June 30, 2012, compared with a net loss of
$1.18 million on $110,000 of total revenue for the same period a
year ago.
The Company reported a net loss of $9.97 million on $410,000 of
total revenue for the six months ended June 30, 2012, compared
with a net loss of $2.58 million on $615,000 of total revenue for
the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $3.02 million
in total assets, $8.24 million in total liabilities and a $5.21
million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/c68RXn
About Liquidmetal Technologies
Based in Rancho Santa Margarita, Calif., Liquidmetal Technologies,
Inc., and its subsidiaries are in the business of developing,
manufacturing, and marketing products made from amorphous alloys.
Liquidmetal Technologies markets and sells Liquidmetal(R) alloy
industrial coatings and also manufactures, markets and sells
products and components from bulk Liquidmetal alloys that can be
incorporated into the finished goods of its customers across a
variety of industries. The Company also partners with third-
party licensees and distributors to develop and commercialize
Liquidmetal alloy products.
After auditing the 2011 financial statements, Choi, Kim & Park,
LLP, in Los Angeles, California, said that the Company's
significant operating losses and working capital deficit raise
substantial doubt about its ability to continue as a going
concern.
LITHIUM TECHNOLOGY: Sells 40% Interest in EAS Germany to EnerSyS
----------------------------------------------------------------
Lithium Technology Corporation has completed the sale of its 40%
minority interest in EAS Germany GmbH to EnerSys. LTC and EnerSys
formed the joint venture in Nordhausen, Germany in August 2011 to
produce large format lithium-ion battery cells.
LTC will continue to cooperate with EnerSys and EAS as production
partners for its lithium-ion battery cells and complete batteries.
As part of the transaction, LTC, through its subsidiary Gaia
Akkumulatorenwerke GmbH, redeemed all of its interest in EAS in
exchange for cash, cancellation of outstanding payables and a
credit facility for future purchases of battery cells from EAS.
The existing service, supply and intellectual property agreements
will remain in place.
About Lithium Technology
Plymouth Meeting, Pa.-based Lithium Technology Corporation is a
mid-volume production stage company that develops large format
lithium-ion rechargeable batteries to be used as a new power
source for emerging applications in the automotive, stationary
power, and national security markets.
The Company was not able to file its annual report for the period
ended Dec. 31, 2011, and quarterly report for the period ended
March 30, 2012.
For the nine months ended Sept. 30, 2011, the Company reported a
net loss of $12.26 million on $6.06 million of total revenue. The
Company reported a net loss of $7.25 million on $6.35 million
of products and services sales for the year ended Dec. 31, 2010,
compared with a net loss of $10.51 million on $7.37 million of
product and services sales during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed $8.83
million in total assets, $35.09 million in total liabilities and a
$26.26 million total stockholders' deficit.
Going Concern
As reported by the TCR on April 8, 2011, Amper, Politziner &
Mattia, LLP, Edison, New Jersey, after auditing the Company's
financial statements for the year ended Dec. 31, 2010, noted that
the Company has recurring losses from operations since inception
and has a working capital deficiency that raise substantial doubt
about its ability to continue as a going concern.
Bankruptcy Warning
The Form 10-Q for the quarter ended Sept. 30, 2011, noted that the
Company's operating plan seeks to minimize its capital
requirements, but the expansion of its production capacity to meet
increasing sales and refinement of its manufacturing process and
equipment will require additional capital.
The Company raised capital through the sale of securities closing
in the second quarter of 2011 and realized proceeds from the
licensing of its technology pursuant to the terms of a licensing
agreement and the sale of inventory used in manufacturing its
batteries as part of the establishment of a joint venture in the
fourth quarter of 2011, but is continuing to seek other financing
initiatives and needs to raise additional capital to meet its
working capital needs, for the repayment of debt and for capital
expenditures. Such capital is expected to come from the sale of
securities. The Company believes that if it raises approximately
$4 million in additional debt and equity financings it would have
sufficient funds to meet its needs for working capital, capital
expenditures and expansion plans through the year ending Dec. 31,
2012.
No assurance can be given that the Company will be successful in
completing any financings at the minimum level necessary to fund
its capital equipment, debt repayment or working capital
requirements, or at all. If the Company is unsuccessful in
completing these financings, it will not be able to meet its
working capital, debt repayment or capital equipment needs or
execute its business plan. In that case the Company will assess
all available alternatives including a sale of its assets or
merger, the suspension of operations and possibly liquidation,
auction, bankruptcy, or other measures. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
LSP ENERGY: Sells Takes Miss. Plant for $286 Million
----------------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that LSP Energy LP sold
its primary asset -- a Mississippi natural-gas fired generation
plant -- at auction Monday, the winning offer of $286 million
coming from the outfit that had served as a $249 million stalking
horse before a judge scotched the deal.
Energy cooperative South Mississippi Electric Power Association
picked up the Batesville, Miss., plant with a top bid of $285.88
million, according to a company spokeswoman.
About LSP Energy
LSP Energy Limited Partnership, LSP Energy, Inc., LSP Batesville
Holding, LLC, and LSP Batesville Funding Corporation filed
separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case
No. 12-10460) on Feb. 10, 2012.
LSP owns and operates an electric generation facility located in
Batesville, Mississippi. The Facility consists of three gas-fired
combined cycle electric generators with a total generating
capacity of roughly 837 megawatts and is electrically
interconnected into the Entergy and Tennessee Valley Authority
transmission systems. LSP's principal assets are the Facility and
the 58-acre parcel of real property on which it is located, as
well as its rights under a tolling agreements.
LSP filed bankruptcy to complete an orderly sale of its assets or
the ownership interests of LSP Holding in LSP, LSP Energy and LSP
Funding for the benefit of all stakeholders. The remaining three
Debtors filed bankruptcy due to their relationship as affiliates
of LSP and their ultimate obligations on a significant portion of
LSP's secured bond debt. The Debtors also suffered losses due to
a mechanical failure of a combustion turbine at their facility and
resultant business interruption.
LSP Energy is the general partner of LSP. LSP Holding is the
limited partner of LSP and the 100% equity holder of LSP Energy
and LSP Funding. LSP Funding is a co-obligor on the Debtors' bond
debt, and each of LSP Energy and LSP Holding has pledged their
equity interests in LSP and LSP Funding as collateral for the bond
debt.
No statutorily authorized creditors' committee has yet been
appointed in the Debtors' cases by the United States Trustee.
Judge Mary F. Walrath oversees the case. Lawyers at Whiteford
Taylor & Preston LLC serve as the Debtors' counsel.
MADISON 92ND: Files Notice of Plan Effective Date on May 31
-----------------------------------------------------------
Madison 92nd Street Associates LLC has filed a notice with the
U.S. Bankruptcy Court for the Southern District of New York that
the effective date of the Second Amended Chapter 11 Plan of
Reorganization occurred on May 31, 2012.
On May 25, 2012, the Bankruptcy Court entered an order confirming
the Second Amended Chapter 11 Plan of Reorganization dated May 24,
2012.
On June 1, 2012, the Bankruptcy Court entered an order approving
the Debtor's employment of Goldberg Weprin Finkel Goldstein LLP as
its counsel to:
* provide the Debtor with necessary legal advice in
connection with the operation and rehabilitation of its
financial and legal affairs during the Chapter 11
proceedings;
* represent the Debtor in all proceedings before the
Bankruptcy Court or the U.S. Trustee, or both;
* prepare all necessary legal papers, petitions, orders,
applications, motions, reports, and plan-related documents
on the Debtor's behalf; and
* perform all other legal services for the Debtor, which may
be necessary to successfully confirm a plan of
reorganization or other disposition of the bankruptcy
case.
Goldberg Weprin Finkel was consulted by Michael Fisher, Louis
Taic, and Jeffrey Kosow for the specific purpose of exploring
bankruptcy options for the Debtor. An initial retainer agreement
was signed on June 21, 2011 with Mr. Fischer, one of the members
of 92nd St Hotel Associates, LLC, which itself holds a 50%
membership interest in the Debtor. Mr. Fischer funded an initial
payment of $20,000.
When majority adopted a resolution to commence bankruptcy
proceedings and retain the Firm, the Debtor signed a second
retainer agreement in connection with the actual filing of a
Chapter 11 case, with a $27,000 retainer to Goldberg Weprin
Finkel, which was funded by a capital contribution made by Louis
Taic on behalf of the Debtor.
Madison 92nd owns real property improved by a hotel located at 410
East 92nd Street, New York, known as the Upper East Side Courtyard
by Marriott. It filed for Chapter 11 bankruptcy protection as
lender General Electric Capital Corp., owed $74 million, has
scheduled a foreclosure sale for Aug. 24, 2011. The petition
(Bankr. S.D.N.Y. Case No. 11-13917) was filed Aug. 16, 2011,
before Judge Stuart M. Bernstein. J. Ted Donovan, Esq., at
Goldberg Weprin Finkel Goldstein LLP, serves as the Debtor's
counsel. Cushman & Wakefield Sonnenblick Goldman, LLC serves as
financial advisors. It scheduled $84,471,069 in assets and
$75,398,580 in debts. The petition was signed by Louis Taic,
managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow,
managing member of JKNY, LLC, members of the Debtor.
Courtyard Management Corporation, which manages and operates the
hotel pursuant to a management agreement, is represented by Thomas
R. Califano, Esq., and William M. Goldman, Esq., at DLA Piper
LLP(US).
The Bankruptcy Judge appointed an examiner to explore the best
route to reorganization for the Debtor amid a rift between two
investor groups. Thomas R. Slome, the examiner, tapped his firm,
Meyer, Suozzi, English & Klein, P.C., as his counsel.
As reported by the Troubled Company Reporter on May 30, 2012, the
Debtor sold the hotel for $82 million cash to an affiliate of RLJ
Lodging Trust pursuant to the plan confirmation order signed on
May 25. RLJ is a real estate investment trust with 140 hotel
properties. It is expected, but not guaranteed, that the net sale
proceeds will be sufficient to pay all creditors in full.
The Court authorized the Debtor to sell substantially all of the
estate's real estate assets in an auction led by CIM Group
Acquisitions, LLC.
MARIANA RETIREMENT FUND: Judge Dismisses Chapter 11 Bankruptcy
--------------------------------------------------------------
Ferdie de la Torre at Saipan Tribune reports that Bankruptcy
Judge Robert J. Faris issued an order formally dismissing the
Chapter 11 bankruptcy petition filed by the Northern Mariana
Island Retirement Fund.
According to the report, two unnamed retirees represented by
attorney Bruce Jorgensen filed in federal court a motion for a
temporary restraining order and preliminary injunction to prevent
the enforcement of Gov. Benigno R. Fitial's executive order
declaring a state of emergency for the financially troubled NMI
Retirement Fund.
The report, citing the one-page order, says Judge Faris only
stated that pursuant to a memorandum of decision on motions to
dismiss he issued on June 13, the Fund's bankruptcy case is
dismissed. Judge Faris' June 13 memorandum simply reiterated the
discussions in his tentative decision dismissing the Fund's
bankruptcy case.
Judge Faris ruled the Fund is a "governmental unit" and not
eligible for relief under Chapter 11 of the Bankruptcy Code.
The report relates Mr. Jorgensen and co-counsels Robert M. Hatch,
Margery S. Bronster, and Stephen C. Woodruff asserted that their
motion for TRO and preliminary injunction seeks to prevent Gov.
Fitial from "illegally seizing the Fund and assuming dictatorial
control over it."
The report relates Gov. Fitial on June 7 issued Executive Order
2012-06 that suspends the power of the Fund's board of trustees
and administrator, and transfers this executive power to Finance
Secretary Larrisa Larson.
According to the report, Gov. Fitial then stated that Executive
Order 2012-06 will become effective immediately upon the U.S.
District Court Bankruptcy Division's filing of its order
dismissing the Fund's Chapter 11 bankruptcy petition.
About NMI Retirement Fund
The Northern Mariana Islands Retirement Fund --
http://www.nmiretirement.com/-- is a public corporation of the
Commonwealth of the Northern Mariana Islands that receives and
invests retirement contributions and pays certain benefits to or
on account of certain retirees of the Commonwealth government,
their survivors, and certain disabled persons.
The Fund, through its administrator Richard Villagomez, filed a
Chapter 11 bankruptcy petition in the U.S. District Court for the
Northern District of Mariana Islands in Saipan (Case No. 12-00003)
on April 17, 2012.
The Fund is represented by Brown Rudnick LLP and the Law Office of
Braddock J. Huesman, LLC.
The Fund said in court papers that the Chapter 11 filing was
precipitated by the discrepancy between the Debtor's current
ability to pay benefits to beneficiaries and the Debtor's current
obligations to those same beneficiaries. The Fund said it would
exhaust its cash by July 2014. It has been unable to collect a
$325 million judgment against the islands' government, and the
commonwealth decided to reduce contributions toward workers'
pensions.
As a result of continuous underfunding, which necessitated
withdrawing from its portfolio to cover funding shortfalls, the
value of the Fund's assets has fallen from $353,475,412 in 2009 to
its current level of $268,448,997, the Debtor's counsel has said.
The counsel also said the Fund is subject to liabilities (both
current and actuarial) totaling about $911 million.
An official committee of unsecured creditors, consisting of Fund
members, has been appointed in the case.
U.S. Bankruptcy Judge Robert J. Faris held a hearing on June 1,
2012, where he said from the bench that the fund isn't eligible
for Chapter 11 because it's an agent of the commonwealth
government. The judge, however, said he won't formally dismiss
the case until July or August.
MERRIMACK PHARMACEUTICALS: Files Q2 Form 10-Q, Posts $20MM Loss
---------------------------------------------------------------
Merrimack Pharmaceuticals, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $20.13 million on $12.06 million of
collaboration revenues for the three months ended June 30, 2012,
compared with a net loss of $29.19 million on $6.59 million of
collaboration revenues for the same period a year ago.
The Company reported a net loss of $43.54 million on $23.40
million of collaboration revenues for the six months ended
June 30, 2012, compared with a net loss of $42.73 million on
$13.05 million of collaboration revenues for the same period
during the prior year.
The Company's balance sheet at June 30, 2012, showed $138.70
million in total assets, $105.62 million in total liabilities,
$343,000 in non-controlling interest and $32.74 million in total
stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/IDaznC
About Merrimack
Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a
biopharmaceutical company discovering, developing and preparing to
commercialize innovative medicines consisting of novel
therapeutics paired with companion diagnostics. The Company's
initial focus is in the field of oncology. The Company has five
programs in clinical development. In it most advanced program,
the Company is conducting a pivotal Phase 3 clinical trial.
The Company's balance sheet at March 31, 2012, showed
$64.45 million in total assets, $108.05 million in total
liabilities, $268.23 million in convertible preferred stock,
$456,000 in non-controlling interest, and a shareholders' deficit
of $312.29 million.
As reported in the TCR on April 9, 2012, PricewaterhouseCoopers
LLP, in Boston, Massachusetts, expressed substantial doubt about
Merrimack Pharmaceuticals' 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 from operations and has insufficient
capital resources available as of Dec. 31, 2011, to fund planned
operations through 2012.
MF GLOBAL: Misused $42-Mil. Collateral Account, Trader Says
-----------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that commodities
trader Mercuria Energy America Inc. on Thursday filed a suit
claiming a unit of MF Global Holdings Ltd. has demanded repayment
of a $20 million loan despite misappropriating funds in a
collateral trading account valued at $42 million.
In a complaint filed in New York bankruptcy court, Mercuria said
MF Global Finance USA Inc., known as FinCo, sent a demand letter
in April requesting payment of the $20 million principal and
interest, according to Bankruptcy Law360.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
was one of the world's leading brokers of commodities and listed
derivatives. MF Global provided access to more than 70 exchanges
around the world. The firm was also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed.
As of Sept. 30, 2011, MF Global had $41,046,594,000 in total
assets and $39,683,915,000 in total liabilities.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
Louis J. Freeh was named the Chapter 11 Trustee for the
bankruptcy cases of MF Global Holdings Ltd. and its affiliates.
The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP,
as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee has retained Capstone Advisory Group LLC
as financial advisor.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
MF GLOBAL: Trustee to Cooperate in MDL Against Executives
---------------------------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that the trustee
charged with liquidating MF Global Inc. told a New York bankruptcy
judge that he would cooperate with plaintiffs in a slew of class
actions accusing firm executives, including former CEO Jon
Corzine, of negligently causing more than $1 billion in firm
losses.
If approved, the special cooperation agreement means that MFGI
trustee James Giddens will share evidence with a slew of customers
and former commodities account holders at MFGI who have brought
putative class action claims, Bankruptcy Law360 relates.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
was one of the world's leading brokers of commodities and listed
derivatives. MF Global provided access to more than 70 exchanges
around the world. The firm was also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed.
As of Sept. 30, 2011, MF Global had $41,046,594,000 in total
assets and $39,683,915,000 in total liabilities.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
Louis J. Freeh was named the Chapter 11 Trustee for the
bankruptcy cases of MF Global Holdings Ltd. and its affiliates.
The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP,
as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee has retained Capstone Advisory Group LLC
as financial advisor.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
MF GLOBAL: Customer Resists Paying $20 Million Loan
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a customer of MF Global Inc. began a lawsuit Aug. 16
in bankruptcy court to correct what may look like an injustice to
non-lawyers. It remains to be seen whether the customer makes a
case that convinces judges steeped in the law of setoff and
recoupment.
According to the report, Mercuria Energy America Inc. had a
customer account at the MF Global brokerage containing property
worth about $42 million when the bankruptcy began last year.
To finance purchases in the account, Houston-based MEA borrowed
$20 million from an affiliate of the brokerage named MF Global
Finance USA Inc. As security for the loan, the MF Global finance
company had a lien on MEA's account. MEA said it had $16 million
of equity in the account when bankruptcy began, after subtracting
the loan.
The report relates that in what MEA calls a 'complete suspension
of disbelief,' the MF Global finance company demanded payment of
the $20 million loan, even though the MF Global broker had
misappropriated property in the account. To date, MEA said it has
received a distribution of $9 million from the MF Global brokerage
trustee.
The report notes that relying on legal theories known as setoff
and recoupment, MEA argues in the complaint that the loan should
be deemed paid by the property in the customer account. MEA may
face counter arguments that offsetting debts can only be netted
out if they involve the same entities. No date has been set for a
hearing on the lawsuit.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
is one of the world's leading brokers of commodities and listed
derivatives. MF Global provides access to more than 70 exchanges
around the world. The firm is also one of 22 primary dealers
authorized to trade U.S. government securities with the Federal
Reserve Bank of New York. MF Global's roots go back nearly 230
years to a sugar brokerage on the banks of the Thames River in
London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059
and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities. It is easily the largest bankruptcy filing so far
this year.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
U.S. regulators are investigating about $633 million missing from
MF Global customer accounts, a person briefed on the matter said
Nov. 3, according to Bloomberg News.
MOLYCORP INC: Moody's Lowers CFR/PDR to 'Caa1'; Outlook Negative
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Molycorp Inc.
(Molycorp), including the company's Corporate Family Rating (CFR)
and Probability of Default Rating (PDR) to Caa1 from B3 and the
rating on its senior secured notes to B3 from B2. The outlook is
negative. The company announced on August 16, 2012 that it intends
to issue up to $345 million of convertible senior notes due 2017
and $150 million of common stock in order to fund capital
expenditures related to project Phoenix, as well as other cash
requirements, through mid-2013. On August 2, 2012, Molycorp
reported its second quarter results, announcing an operating loss
and negative EBITDA for the three and six months ended June 30,
2012, and that it will need to secure additional financing due to
lower than expected operating cash flows.
Moody's took the following rating actions:
Downgrades:
Issuer: Molycorp, Inc.
Probability of Default Rating, Downgraded to Caa1 from B3
Corporate Family Rating, Downgraded to Caa1 from B3
Senior Secured Regular Bond/Debenture, Downgraded to B3,
LGD3, 42% from B2, LGD3, 41%
Outlook Actions:
Issuer: Molycorp, Inc.
Outlook, Changed To Negative From Stable
Ratings Rationale
The company's second quarter performance contracted substantially
relative to historical performance, due to, among other factors,
the dramatic decline in rare earth oxide (REO) prices during the
first and second quarter of 2012. Average selling price per kg of
REO equivalent realized by the company has declined to $52 during
the second quarter from $95 during the first quarter. The decline
in performance was greater than anticipated, and was to a large
extent driven by a change in industry conditions. Pressures
include: weakening economic conditions globally, decelerating
growth in China, and material substitution by downstream
industries in response to 2011 run-up in prices depressed demand,
just as additional supplies have been coming online globally.
Based on current industry fundamentals, Moody's believes that
further price declines cannot be ruled out and that any recovery
in industry conditions is at least twelve months away. In the
meantime, Moody's expects that Molycorp legacy operations
(Mountain Pass, Silmet and MMA) will post break-even to negative
EBITDA performance, while Molycorp Canada (formerly Neo Material
Technologies (Neo), acquired by Molycorp in June 2012) will post
modest EBITDA, which Moody's expects to range from $100 to $200
million on annualized basis. The inherent volatility of REO demand
and pricing, largely dictated by China's production volumes and
export quotas, makes the company's future performance uncertain.
Less than anticipated cash flows have led the company to seek
additional financing in order to complete project Phoenix, which
aims to give the company ability to produce at its Mountain Pass
facility up to approximately 19,050 mt of REO by the end of 2012
and 40,000 mt of REO by mid-2013. The anticipated additional debt
burden of up to $345 million is significant relative to company's
expected operating cash generation over the next twelve to
eighteen months, with excessive leverage being the primary driver
for the downgrade. The remaining capital spending for project
Phoenix and other capital investments is anticipated to be $289
million for the second half of 2012 and $25 million in 2013.
Moody's believes that additional debt, potentially in the form of
an asset-backed facility or equipment financing, cannot be ruled
out, considering that the company is experiencing upward cost
pressures on the project, coupled with weak industry fundamentals.
Molycorp's SGL-3 speculative grade liquidity rating continues to
reflect Moody's expectation that the company will have limited
liquidity, considering its substantive expansion plans. The
company had $369 million in cash as of June 30, 2012, and Moody's
expects these levels to decline as the company expends its
existing cash and newly raised funds on Project Phoenix and repays
$230 million in Neo's subordinated unsecured convertible
debentures. The company's ability to fund its cash expenditures is
further complicated by cash balances being located in various
foreign jurisdictions. Lack of access to a sizeable committed
credit facility, such as a revolver, further constrains the
ratings.
The negative outlook reflects the potential for further declines
in REO prices and further weakening in demand for company's
products, as well as the possibility of escalating capital costs.
While positive momentum for the ratings is limited, the outlook
could be stabilized if Moody's expected industry conditions to
stabilize and the company to maintain Debt/ EBITDA of at least 6x
(as adjusted) and adequate liquidity. Further downgrade would be
considered if credit metrics deteriorate further, capital costs
escalate and/or liquidity position deteriorates.
Molycorp's Caa1 corporate family rating continues to reflect its
modest size and diversity, inherent volatility of the company's
margins, good resource base and benefits from integration with
Neo, substantive development plans and limited liquidity. Although
Moody's acknowledges that Molycorp is the largest REO producer in
the Western hemisphere and owns one of the world's largest, most
developed rare earths projects outside of China, one of the key
rating drivers is that China produces 97% of the world's rare
earths elements and the country's production and exporting
behavior essentially dictates market pricing.
The B3 rating on senior secured notes, one notch above the CFR,
reflects their position in the capital structure above all
unsecured debt, as the notes are secured by substantially all
assets of the company and its domestic subsidiaries. The B3 rating
on senior secured notes also reflects the potential for some
additional secured debt, and the possibility that the value of
company's tangible assets securing the debt (consisting primarily
of Mountain Pass facility) could fall short of the outstanding
principal amount if industry conditions continue to deteriorate.
The principal methodology used in rating Molycorp Inc. was the
Global Mining Industry Methodology published in May 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
Molycorp is the owner of the world's largest rare earth deposit
outside of China. The company produces rare earth oxides and
magnets for use in the technology, automotive, energy, and defense
sectors. The company's primary asset is the open-pit Mountain Pass
facility in California. Molycorp also recently acquired Neo-
Materials to gain access to the China's REO market. The company is
headquartered in Greenwood Village, Colorado and pro forma for the
acquisition, the company generated $1.2 billion of revenues in
2011.
MRI BELTLINE: Can't Impose Revolving Carve-out on Collateral
------------------------------------------------------------
Bankruptcy Judge Barbara J. Houser permitted MRI Beltine
Industrial, L.P. to continue using its lender's cash collateral
but rejected the Debtor's request to impose a revolving carve-out
of $15,000 per month, saying it is impermissible.
The Debtor first sought authority to use cash collateral on
Nov. 17, 2011. MidFirst Bank opposed that relief. Ultimately, the
Debtor obtained authority to use cash collateral and the duration
of that use has been extended several times by the parties'
agreement.
The Debtor's source of revenue is rents received from tenants. The
Debtor and MidFirst entered into a loan agreement in 2006 in the
original principal amount of $4.2 million. MidFirst is a secured
creditor holding a first lien on the Debtor's properties.
MidFirst filed a proof of claim in the bankruptcy case indicating
that it is owed some $4,260,469.16, consisting of principal, pre-
petition interest, and legal, appraisal and environmental fees.
On March 8, 2012, MidFirst moved for relief from the automatic
stay under 11 U.S.C. Sec. 362(d)(1) and (d)(2), asserting that its
appraisal valued the Debtor's properties at $3.9 million. At the
June 19, 2012 hearing on MidFirst's motion, the Court denied the
motion without prejudice, finding that the Properties were
necessary for an effective reorganization and that there was
equity in the Properties, although the Court was "not prepared
today to place an absolute value on the debtor's property on the
petition date." The Court found MidFirst to be adequately
protected by a small equity cushion, but recognized "that as time
passes, the equity cushion is being quickly diminished and may
reach a point if we don't achieve confirmation of a plan very
promptly where that line tilts and crosses in the other direction.
But for now, the Court is satisfied that there is sufficient
equity to adequately protect the Bank."
The Debtor filed a disclosure statement the day before the hearing
on MidFirst's lift stay motion, contending the Properties were
worth $4,750,000. That disclosure statement was approved on July
23, 2012, and the hearing to consider confirmation of the Debtor's
proposed plan of reorganization is scheduled for Nov. 1, 2 and 5,
2012.
On July 5, 2012, the Court held a final hearing to consider the
use of cash collateral. At that hearing, the parties disputed two
issues: (i) whether an assignment of rents in favor of MidFirst is
"conditional" or "absolute" under Texas law, and (ii) whether the
Debtor may be authorized to use cash collateral to pay its
attorneys' fees over MidFirst's objection -- i.e., whether the
Court may impose a "carve-out" from MidFirst's collateral in favor
of the Debtor's counsel.
The Debtor had said in court papers MidFirst is adequately
protected by virtue of the fact that the Debtor is making periodic
interest-only payments of $20,500 per month on MidFirst's loan,
and that after that payment and its other expenses each month, the
Debtor has had positive cash flow of roughly $11,500 on average
during the months it has operated in chapter 11. The Debtor also
argued that it is improving occupancy rates at the Properties and
that the Court previously found there is equity in the Properties.
In an Aug. 13, 2012 Memorandum Opinion and Order, available at
http://is.gd/gMNAhBfrom Leagle.com, Judge Houser rejected
MidFirst's argument that it holds title to, not a security
interest in, rents generated by the Properties. The judge said
the rents constitute property of the estate and "cash collateral"
and may be used by the Debtor with Court authority pursuant to
sections 363 and 361 of the Bankruptcy Code.
With regard to the carve-out, the Court agreed with MidFirst that
the Debtor's request is premature as the Debtor's counsel has not
filed a fee application and is unlikely to do so prior to a
hearing on confirmation of the Debtor's proposed plan of
reorganization. At the confirmation hearing, the Court will be
better able to assess the Debtor's (i) equity position in the
Properties, and (ii) ability to otherwise pay its administrative
expenses.
About MRI Beltine Industrial
MRI Beltine Industrial, L.P. filed a voluntary Chapter 11 petition
(Bankr. N.D. Tex. Case No. 11-36037) on Sept. 27, 2011. The
Debtor owns four commercial buildings located at 260, 320 and 350
South Beltline Rd., Irving, Texas and 309 North Beltline Rd.,
Irving, Texas, that it leases to various tenants.
MSR RESORT: Judge Pegs Hilton Damages at $123.8 Million
-------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Sean H. Lane, the bankruptcy judge overseeing MSR Resort
Golf Course LLC's dispute with Hilton Worldwide Inc. over damages
associated with the cancellation of property management contracts
at three hotels, on Thursday clarified an earlier order
delineating the damages, putting the total at around $123.8
million.
Bankruptcy Law360 says Judge Lane held a telephone conference
explaining his July 31 bench ruling in response to letters the
parties filed promoting their differing interpretations of how
much MSR would have to pay Hilton to cancel the agreements.
About MSR Resort
MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc.,
owns a portfolio of eight luxury hotels with over 5,500 guest
rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the
Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort
Hotel & Spa in Maui.
On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the
portfolio through a foreclosure proceeding. CNL-AB LLC is a joint
venture consisting of affiliates of Paulson & Co. Inc., a joint
venture affiliated with Winthrop Realty Trust, and affiliates of
Capital Trust, Inc.
Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts
before the Jan. 28 foreclosure.
Following the acquisition, five of the resorts with mortgage debt
scheduled to mature on Feb. 1, 2011, were sent to Chapter 11
bankruptcy by the Paulson and Winthrop joint venture affiliates.
MSR Resort Golf Course LLC and its affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan
on Feb. 1, 2011. The resorts subject to the filings are Grand
Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta
Resort and Club and PGA West, Doral Golf Resort and Spa, and
Claremont Resort and Spa.
James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O.
Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis,
LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey
Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson
Consultants LLC is the Debtors' claims agent.
The five resorts had $2.2 billion in assets and $1.9 billion in
debt as of Nov. 30, 2010, according to court filings. In its
schedules, debtor MSR Resort disclosed $59,399,666 in total assets
and $1,013,213,968 in total liabilities.
The resorts have agreement with lenders allowing the companies to
remain in Chapter 11 at least until September 2012.
The Official Committee of Unsecured Creditors is represented by
Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston &
Bird LLP, in New York.
MUSCLEPHARM CORP: Delays Form 10-Q for Second Quarter
-----------------------------------------------------
MusclePharm Corporation informed the U.S. Securities and Exchange
Commission that it will late in filing its quarterly report on
Form 10-Q for the period ended June 30, 2012. The Company was not
able to obtain all information prior to filing date.
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100% free of banned substances. MusclePharm is sold in over
120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe. MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Berman & Company,
P.A., in Boca Raton, Florida, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company has a net loss of
$23,280,950 and net cash used in operations of $5,801,761 for the
year ended Dec. 31, 2011; and has a working capital deficit of
$13,693,267, and a stockholders' deficit of $12,971,212 at Dec.
31, 2011.
The Company's balance sheet at March 31, 2012, showed
$7.55 million in total assets, $24.76 million in total
liabilities, and a $17.21 million total stockholders' deficit.
The Company's restated statement of operations reflects a net loss
of $23.28 million in 2011, compared with a net loss of
$19.56 million in 2010.
NATIONAL HOLDINGS: Reports $661,000 Net Income in June 30 Quarter
-----------------------------------------------------------------
National Holdings Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $661,000 on $31.09 million of total revenues for the
three months ended June 30, 2012, compared with a net loss of
$326,000 on $32.04 millon of total revenues for the same period a
year ago.
The Company reported a net loss of $2.11 million on $89.67 million
of total revenues for the nine months ended June 30, 2012,
compared with a net loss of $2.38 million on $100.66 million of
total revenues for the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $15.51
million in total assets, $18.63 million in total liabilities,
$26,000 in non-controlling interest and a $3.14 million in total
National Holdings Corporation stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/E040pe
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.
In the 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 in its quarterly report for the period ended
June 30, 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.
NEOMEDIA TECHNOLOGIES: Posts $124.1MM Net Income in 2nd Quarter
---------------------------------------------------------------
NeoMedia Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $124.11 million on $461,000 of revenue for the three
months ended June 30, 2012, compared with a net loss of
$55.86 million on $767,000 of revenue for the same period a year
ago.
The Company reported a net loss of $41.44 million on $1.18 million
of revenue for the six months ended June 30, 2012, compared with a
net loss of $47.07 million on $1.13 million of revenue for the
same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $7.53 million
in total assets, $106.09 million in total liabilities, all
current, $4.84 million in series C convertible preferred stock,
$348,000 in series D convertible preferred stock, and a $103.74
million total shareholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/WEzLTM
About NeoMedia Technologies
Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile
barcode scanning solutions. The Company's technology allows
mobile devices with cameras to read 1D and 2D barcodes and provide
"one click" access to mobile content.
After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa,
FL, expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has suffered recurring losses from operations and has
ongoing requirements for additional capital investment.
The Company reported a net loss of $849,000 in 2011, compared
with net income of $35.09 million in 2010.
NEONODE INC: Incurs $3.4 Million Net Loss in Second Quarter
-----------------------------------------------------------
Neonode Inc. reported a net loss of $3.42 million on $1.97 million
of net revenues for the three months ended June 30, 2012, compared
with a net loss of $2.72 million on $283,000 of net revenues for
the same period during the prior year.
The Company reported a net loss of $5.01 million on $3.13 million
of net revenues for the six months ended June 30, 2012, compared
with a net loss of $12.44 million on $822,000 of net revenues for
the same period a year ago.
The Company reported a net loss of $17.14 million in 2011,
compared with a net loss of $31.62 million in 2010.
The Company's balance sheet at June 30, 2012, showed
$13.65 million in total assets, $2.67 million in total liabilities
and $10.98 million in total stockholders' equity.
Neonode CEO Thomas Eriksson stated, "We are extremely excited
about the strong momentum we have built up with our customers and
partners, which is evidenced by the 23 design wins in the second
quarter. These design wins are across all strategically important
high volume market segments. Since we launched our single chip
MultiSensing controller in January 2012, we have attained a total
of 40 design wins. We expect a majority of these design wins to
result in commercialized products within the next 6 to 18 months,
some as early as end of 2012."
A copy of the press release is available for free at:
http://is.gd/wtNPQO
About Neonode Inc.
Lafayette, Calif.-based Neonode Inc. (OTC BB: NEON)
-- http://www.neonode.com/-- provides optical touch screen
solutions for hand-held and small to midsize devices.
NET TALK.COM: Incurs $7 Million Net Loss in Second Quarter
----------------------------------------------------------
Net Talk.com, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $7 million on $1.49 million of revenue for the three months
ended June 30, 2012, compared with net income of $2.10 million on
$589,257 of revenur for the same period a year ago.
The Company reported a net loss of $10.51 million on $2.55 million
of revenue for the six months ended June 30, 2012, compared with a
net loss of $22.06 million on $1.20 million of revenue for the
same period during the prior year.
The Company reported a net loss of $26.17 million $2.72 million of
revenue for the year ended Sept. 30, 2011, compared with a net
loss of $6.30 million on $737,498 of revenue during the prior
year.
The Company's balance sheet at June 30, 2012, showed $6.03 million
in total assets, $18.82 million in total liabilities,
$8.13 million in redeemable preferred stock, and a $20.92 million
total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/6lt0Vg
About Net Talk.com
Based in Miami, Fla., Net Talk.com, Inc., is a telephone company,
that provides, sells and supplies commercial and residential
telecommunication services, including services utilizing voice
over internet protocol technology, session initiation protocol
technology, wireless fidelity technology, wireless maximum
technology, marine satellite services technology and other similar
type technologies.
NORD RESOURCES: Incurs $2.4 Million Net Loss in Second Quarter
--------------------------------------------------------------
Nord Resources Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $2.39 million on $2.01 million of net sales for the
three months ended June 30, 2012, compared with a net loss of
$3.07 million on $3.38 million of net sales for the same period a
year ago.
The Company reported a net loss of $4.90 million on $4.39 million
of net sales for the six months ended June 30, 2012, compared with
a net loss of $5.35 million on $8.14 million of net sales for the
same period during the prior year.
The Company's balance sheet at June 30, 2012, showed
$53.72 million in total assets, $66.41 million in total
liabilities, and a $12.69 million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/M7wYXb
About Nord Resources
Based in Tuczon, Arizona, Nord Resources Corporation
(TSX:NRD/OTCBB:NRDS.OB) -- http://www.nordresources.com/-- is a
copper mining company whose primary asset is the Johnson Camp
Mine, located approximately 65 miles east of Tucson, Arizona.
Nord commenced mining new ore in February 2009.
On June 2, 2010, Nord Resources appointed FTI Consulting to advise
on refinancing structures and strategic alternatives.
Nord Resources reported a net loss of $10.31 million on
$14.48 million of net sales in 2011, compared with a net loss of
$21.20 million on $28.64 million of net loss in 2010.
NYTEX ENERGY: Posts $274,600 Net Income in Second Quarter
---------------------------------------------------------
Nytex Energy Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $274,697 on $1.21 million of total revenues for the
three months ended June 30, 2012, compared with net income of
$11.39 million on $266,946 of total revenues for the same period
during the prior year.
The Company reported a net loss of $6.29 million on $2.18 million
of total revenues for the six months ended June 30, 2012, compared
with a net loss of $5.40 million on $421,716 of total revenues for
the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $9.79 million
in total assets, $3.74 million in total liabilities, and
$6.04 million in total equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/NIpdTp
About NYTEX Energy
Located in Dallas, Texas, Nytex Energy Holdings, Inc., is an
energy holding company with operations centralized in two
subsidiaries, Francis Drilling Fluids, Ltd. ("FDF") and NYTEX
Petroleum, Inc. ("NYTEX Petroleum"). FDF is a 35 year old full-
service provider of drilling, completion and specialized fluids
and specialty additives; technical and environmental support
services; industrial cleaning services; equipment rentals; and
transportation, handling and storage of fluids and dry products
for the oil and gas industry. NYTEX Petroleum, Inc., is an
exploration and production company focusing on early stage
development of minor oil and gas resource plays within the United
States.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Whitley Penn LLP, in Dallas, Texas,
expressed substantial doubt about Nytex Energy's ability to
continue as a going concern. The independent auditors noted that
the Company is not in compliance with certain loan covenants
related to two debt agreements.
OPTIMUMBANK HOLDINGS: Incurs $770,000 Net Loss in 2nd Quarter
-------------------------------------------------------------
Optimumbank Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $770,000 on $1.28 million of total interest income
for the three months ended June 30, 2012, compared with a net loss
of $1.97 million on $1.71 million of total interest income for the
same period a year ago.
The Company reported a net loss of $1.35 million on $2.58 million
of total interest income for the six months ended June 30, 2012,
compared with a net loss of $3.12 million on $3.54 million of
total interest income for the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $154.14
million in total assets, $146.47 million in total liabilities and
$7.67 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/pugDcC
About OptimumBank Holdings
Fort Lauderdale, Fla.-based OptimumBank Holdings, Inc. is a
is a one-bank holding company and owns 100% of OptimumBank, a
state (Florida)-chartered commercial bank. The Bank offers a
variety of community banking services to individual and corporate
customers through its three banking offices located in Broward
County, Florida. The Bank's wholly-owned subsidiaries are OB Real
Estate Management, LLC, OB Real Estate Holdings, LLC, OB Real
Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC,
all of which were formed in 2009. OB Real Estate Management, LLC,
is primarily engaged in managing foreclosed real estate. OB Real
Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB
Real Estate Holdings 1695, LLC, hold and dispose of foreclosed
real estate.
The Company reported a net loss of $3.74 million in 2011, compared
with a net loss of $8.45 million in 2010.
Regulatory Enforcement Actions
On April 16, 2010, the Bank consented to the issuance of a Consent
Order by the Federal Deposit Insurance Corporation and the State
of Florida Office of Financial. The Consent Order covers areas of
the Bank's operations that warrant improvement and imposes various
requirements and restrictions designed to address these areas,
including the requirement to maintain certain minimum capital
ratios. Management believes that the Bank is currently in
substantial compliance with all the requirements of the Consent
Order except for the following requirements:
* Scheduled reductions by Oct. 31, 2011, and April 30, 2012, of
60% and 75%, respectively, of loans classified as substandard
and doubtful in the 2009 FDIC Examination;
* Retention of a qualified chief executive officer and chief
lending officer; and
* Development of a plan to reduce Bank's concentration in
commercial real estate loans acceptable to the supervisory
authorities.
The Bank has implemented comprehensive policies and plans to
address all of the requirements of the Consent Order and has
incorporated recommendations from the FDIC and OFR into these
policies and plans.
OXIGENE INC: Posts $2.3 Million Net Loss in Second Quarter
----------------------------------------------------------
OXiGENE, Inc., filed its quarterly report on Form 10-Q, reporting
a net loss $2.3 million on $nil revenues for the three months
ended June 30, 2012, compared with a net loss of $2.9 million on
$nil revenues for the same period a year ago.
For the six months ended June 30, 2012, the Company had a net loss
of $4.2 million on $114,000 of revenues, compared with a net loss
of $3.8 million on $nil revenues for the same period of 2011.
The Company's balance sheet at June 30, 2012, showed
$7.7 million in total assets, $1.6 million in total liabilities,
and stockholders' equity of $6.1 million.
Ernst & Young LLP, in Boston, Massachusetts, expressed substantial
doubt about OxiGENE'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
incurred recurring operating losses and has significantly reduced
the development of its most advanced product candidates. "In
order to significantly further develop its product pipeline, the
Company will be required to raise additional capital, alternative
means of financial support, or both. The ability of the Company
to raise additional capital or alternative sources of financing is
uncertain."
A copy of the Form 10-Q is available for free at:
http://is.gd/3y8ty9
South San Francisco, Calif.-based OxiGENE, Inc., is a clinical-
stage, biopharmaceutical company developing novel therapeutics
primarily to treat cancer. The Company's primary focus is the
development of product candidates referred to as vascular
disrupting agents, or VDAs, that selectively disable and destroy
abnormal blood vessels that provide solid tumors a means of growth
and survival and also are associated with visual impairment in a
number of ophthalmological diseases and conditions.
PATRIOT COAL: Curtis Mallet-Prevost OK'd as Conflicts Counsel
-------------------------------------------------------------
The Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York authorized Patriot Coal Corporation,
et al., to employ Curtis, Mallet-Prevost, Colt & Mosle LLP as
conflicts counsel.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The case has been assigned to Judge Shelley C. Chapman.
The U.S. Trustee appointed a seven-member creditors committee.
PATRIOT COAL: Ernst & Young Approved as Independent Auditor
-----------------------------------------------------------
The Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York authorized Patriot Coal Corporation,
et al., to employ Ernst & Young LLP as independent auditor.
About Patriot Coal
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The case has been assigned to Judge Shelley C. Chapman.
The U.S. Trustee appointed a seven-member creditors committee.
PATRIOT COAL: GCG, Inc. Approved as Administrative Agent
--------------------------------------------------------
The Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York authorized Patriot Coal Corporation,
et al., to employ GCG, Inc. as administrative agent. GCG is also
the Debtors' claims and noticing agent.
About Patriot Coal Corp.
St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer
and marketer of coal in the eastern United States, with 13 active
mining complexes in Appalachia and the Illinois Basin. The
Company ships to domestic and international electricity
generators, industrial users and metallurgical coal customers, and
controls roughly 1.9 billion tons of proven and probable coal
reserves.
Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11
petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y.
Lead Case No. 12-12900) on July 9, 2012. Patriot said it had
$3.57 billion of assets and $3.07 billion of debts, and has
arranged $802 million of financing to continue operations during
the reorganization.
Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone
Advisory Partners LP is serving as financial advisor, and AP
Services, LLC is providing interim management services to Patriot
in connection with the reorganization. Ted Stenger, a Managing
Director at AlixPartners LLP, the parent company of AP Services,
has been named Chief Restructuring Officer of Patriot, reporting
to the Chairman and CEO. GCG, Inc. serves as claims and noticing
agent.
The case has been assigned to Judge Shelley C. Chapman.
The U.S. Trustee appointed a seven-member creditors committee.
PATRIOT COAL: S&P Rates $375-Mil. DIP Term Loan 'B+'
----------------------------------------------------
Standard & Poor's Ratings Services assigned point-in-time 'BB-'
rating to St. Louis, Mo.-based Patriot Coal Corp.'s $125 million
debtor-in-possession (DIP) revolving credit facility and its 'B+'
rating to its $375 million DIP term loan. The corporate credit
rating on the company remains 'D'.
Patriot Coal Corp. and certain of its U.S. subsidiaries filed a
voluntary petition under Chapter 11 of the U.S. Bankruptcy Code on
July 9, 2012. On July 10, 2012, the U.S. bankruptcy court in the
Southern District of New York issued an interim order that
authorized the company to borrow up to $677 million of the $802
million DIP facilities. On Aug. 2, 2012, the bankruptcy court
issued a final order authorizing access to the full amount under
the DIP facilities. The DIP facilities constitute super priority
administrative expense claims.
"A Standard & Poor's rating on a DIP facility reflects our view of
the likelihood of full cash repayment through the company's
reorganization and emergence from Chapter 11. A rating on a DIP
facility also acknowledges potential ratings enhancement if we
believe the assets securing the facility will likely facilitate a
full recovery if liquidation becomes necessary. Our ratings on
both the revolving credit facility and the term loan incorporate a
'B' assessment of the likelihood of cash repayment through
Patriot's reorganization and emergence from Chapter 11. We applied
a one-notch enhancement to the term loan rating and a two-notch
enhancement to the revolving credit facility based on our
assessment of recovery prospects under a liquidation scenario,"
S&P said.
"These DIP loan ratings are point-in-time ratings. Accordingly,
the ratings are effective only for the date of this report, and we
will not review, modify, or provide ongoing surveillance of the
ratings. These ratings are based on, among other things, the
credit agreement dated July 9, 2012, and the interim order and
final orders issued by the U.S. bankruptcy court dated July 10,
2012, and Aug. 2, 2012," S&P said.
PETER DEHAAN: Wants to Employ Genske Mulder as Accountant
--------------------------------------------------------
The Bankruptcy Court for the District of Oregon has authorized
Peter DeHaan Holsteins, LLC, to employ Genske, Mulder & Company,
LLP, as its Certified Public Accountant.
Genske Mulder will perform accounting and financial services which
would include, but is not limited to the following:
A. Preparation of adjusting entries, working papers and
depreciation calculations in connection with preparing,
reporting on, or estimating financial statements,
financial reports, federal income and state tax returns
and/or tax liabilities, and federal income and state tax
deposits, including cash collateral and monthly operating
reports.
B. Review of correspondence received, preparation of
correspondence in response to and representation services
as needed in connection with federal, state and county
taxing authorities.
C. Consulting and litigation services as required by
the Debtor.
The Debtor desires to employ Genske Mulder because of its
experience and knowledge in the field of accounting and financial
consulting in the dairy industry specifically. The Debtor
believes Genske Mulder is competent and skilled in connection with
these matters and well qualified to provide services in this case.
For services performed, Genske Mulder will be compensated on an
hourly basis for services rendered subject to Court approval. The
proposed rates of compensation are:
Gary Genske Managing Partner $300 per hour
Joel Eigenbrood Partner, CPA $250 per hour
Staff Accountants $190 per hour
Bookkeeper/Admin $130 per hour
The Debtor believes that Genske Mulder & Company is disinterested
and qualified to serve as its counsel.
About Peter DeHaan Holsteins
Peter DeHaan Holsteins, LLC, is a recognized leader in the dairy
industry and well known for producing high quality milk products.
Pete DeHaan Jr., the Debtor's 100% owner and Managing Member, has
managed and operated dairy facilities in Oregon for over 15 years.
The Debtor's principal source of income is from the production and
sale of milk, which is shipped to Northwest Dairy Association, a
cooperative that transports, processes and sells the resulting
milk products. In 2011 the Debtor produced 56,137,722 pounds of
whole milk which generated gross income of $11.19 million.
Peter DeHaan Holsteins employs 36 employees and its dairy herd
consists of 2,194 cows and 2,382 heifers for a total of 4,576
animals. The dairy operations are conducted at three separate
farms located in Yamhill County and Washington County Oregon. The
primary farm consists of milking facilities and a 230 acre farm
located at 22180 Lafayette Highway Salem, Oregon. A second farm
is leased from Alan and Alice Beardsley which includes dairy
facilities and 280 acres of farmland located in Gaston, Oregon. A
third farm consisting of 245 acres is owned by the Debtor and is
located in McMinnville, Oregon. The McMinnville Farm is used
primarily for raising replacement heifers and growing crops used
to feed the Debtor's dairy cattle.
Peter DeHaan Holsteins filed a Chapter 11 petition (Bankr. D.
Ore. Case No. 12-35080) on June 29, 2012. The Debtor estimated
assets of $10 million to $50 million and liabilities of up to
$10 million. The Debtor is represented by Jeffrey C. Misley,
Esq., at Sussman Shank LLP, in Portland.
PINNACLE FOODS: S&P Rates New $450-Mil. Term Loan 'B+'
------------------------------------------------------
Standard & Poor's Ratings Services affirmed its existing ratings,
including its 'B' corporate credit rating, on Parsippany, N.J.-
based Pinnacle Foods Finance LLC. "In addition, we assigned a 'B+'
issue-level rating to the company's proposed new $450 million term
loan F due 2018. The recovery rating for the facility is '2',
indicating our expectation for substantial recovery (70% to 90%)
in the event of a payment default. Our 'B+' issue level and '2'
recovery ratings remain unchanged on the company's remaining
senior secured debt. Our 'CCC+' and '6' recovery ratings remain
unchanged on the company's outstanding senior unsecured notes. The
outlook is stable," S&P said.
"The ratings reflect our view of Pinnacle's participation in the
very competitive packaged foods industry and limited geographic
diversity, mostly in North America, as well as its good market
positions and diverse products," said Standard & Poor's credit
analyst Bea Chiem.
"We understand that proceeds of the proposed term loan F will
partially refinance the company's existing term loan B and part of
its 9.25% senior notes. We believe that this is a leverage neutral
transaction," S&P said.
PITTSBURGH CORNING: Credit Agreement Extended Until June 2015
-------------------------------------------------------------
The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the
Western District of Pennsylvania authorized Pittsburgh Corning
Corporation, et al., to enter into an eighth amendment of debtor-
in-possession credit agreement with PNC Bank, National
Association.
Pursuant to the amendment, the maturity date of the DIP Facility
is extended until June 30, 2015, or the effective date of a plan
of reorganization.
As reported in the Troubled Company Reporter on July 6, 2012, the
DIP Facility has been amended as necessary to extend the term and
to make certain other minor adjustments. The parties agreed that:
-- the Debtor will pay a facility fee of $15,000 for the
extension of the DIP Facility; and
-- if the Debtor exits bankruptcy prior to July 1, 2013, the
$15,000 facility fee will be credited to fees associated
with any post-bankruptcy credit agreement entered into by
reorganized PCC and the lender, and if the Debtor exits
bankruptcy after July 1, 2013, but before July 1, 2014, and
reorganized PCC enters into a post-bankruptcy credit
agreement with the lender, $7,500 will be credited to such
fees.
About Pittsburgh Corning
Pittsburgh Corning Corporation filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Pa. Case No. 00-22876) on April 16, 2000,
to address numerous claims alleging personal injury from exposure
to asbestos. At the time of the bankruptcy filing, there were
about 11,800 claims pending against the Company in state court
lawsuits alleging various theories of liability based on exposure
to Pittsburgh Corning's asbestos products and typically requesting
monetary damages in excess of $1 million per claim.
The Hon. Judith K. Fitzgerald presides over the case. Reed Smith
LLP serves as counsel and Deloitte & Touche LLP as accountants to
the Debtor.
The United States Trustee appointed a Committee of Unsecured Trade
Creditors on April 28, 2000. The Bankruptcy Court authorized the
retention of Leech, Tishman, Fuscaldo & Lampl, LLC, as counsel to
the Committee of Unsecured Trade Creditors, and Pascarella &
Wiker, LLP, as financial advisor.
The U.S. Trustee also appointed a Committee of Asbestos Creditors
on April 28, 2000. The Bankruptcy Court authorized the retention
of these professionals by the Committee of Asbestos Creditors: (i)
Caplin & Drysdale, Chartered as Committee Counsel; (ii) Campbell &
Levine as local counsel; (iii) Anderson Kill & Olick, P.C. as
special insurance counsel; (iv) Legal Analysis Systems, Inc., as
Asbestos-Related Bodily Injury Consultant; (v) defunct firm, L.
Tersigni Consulting, P.C. as financial advisor, and (vi) Professor
Elizabeth Warren, as a consultant to Caplin & Drysdale, Chartered.
On Feb. 16, 2001, the Court approved the appointment of Lawrence
Fitzpatrick as the Future Claimants' Representative. The
Bankruptcy Court authorized the retention of Meyer, Unkovic &
Scott LLP as his counsel, Young Conaway Stargatt & Taylor, LLP as
his special counsel, and Analysis, Research and Planning
Corporation as his claims consultant.
In 2003, a plan of reorganization was agreed to by various
parties-in-interest, but, on Dec. 21, 2006, the Bankruptcy Court
issued an order denying the confirmation of that plan, citing that
the plan was too broad in addressing independent asbestos claims
that were not associated with Pittsburgh Corning.
On Jan. 29, 2009, an amended plan of reorganization (the Amended
PCC Plan) -- which addressed the issues raised by the Court when
it denied confirmation of the 2003 Plan -- was filed with the
Bankruptcy Court.
As reported by the TCR on April 25, 2012, Pittsburgh Corning
Corp., a joint venture between Corning Inc. and PPG Industries
Inc., filed another amendment to its reorganization plan designed
to wrap up a Chapter 11 begun 12 years ago. According to the
report, a hearing to consider the new plan is scheduled for
June 21.
PLATINUM STUDIOS: Chris Beall Named President and Director
----------------------------------------------------------
The Board of Directors of Platinum Studios, Inc., appointed Chris
Beall to the vacant seat on the Company's Board of Directors and
the vacant seat of President.
Mr. Beall, 31, is a partner in a PR and marketing firm which
focuses on crowd funding equity raising for small businesses and
start ups and co-founder of RELiSH Ecolodge, an ecotourism company
that is developing an ecolodge in Central America. From 2006 to
2012 Mr. Beall was President of SS Investor Relations and
Consulting Group, where he developed extensive experience in
strategic business development, corporate turnaround, venture
capital, and equity raising procedures. During his time there Mr.
Beall successfully helped to raise over $100 million in capital
from the institutional investor community for numerous small cap
and startup companies, including multiple Fortune 500 and Inc 500
companies. Prior to his time at SS IR and Consulting Group Mr.
Beall served in the United States Marine Corp and studied
international business at Auburn University.
About Platinum Studios
Los Angeles, Calif.-based Platinum Studios, Inc., controls a
library consisting of more than 5,000 characters and is engaged
principally as a comics-based entertainment company adapting
characters and storylines for production in film, television,
publishing and all other media.
The Company reported a net loss of $9.94 million on $2.27 million
of revenue for the year ended Dec. 31, 2010, compared with a net
loss of $3.38 million on $292,940 of revenue during the prior
year.
The Company also reported a net loss of $13.83 million on
$10.47 million of net revenue for the nine months ended Sept. 30,
2011, compared with a net loss of $1.70 million on $2.24 million
of net revenue for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2011, showed
$1.75 million in total assets, $29.70 million in total
liabilities, all current, and a $27.94 million total shareholders'
deficit.
The Company is also delinquent in payment of $116,308 for payroll
taxes as of Sept. 30, 2011, and in default of certain of its short
term notes payable including it $4,916,665 note payable to
Standard Chartered Bank. These matters raise substantial doubt
about the Company's ability to continue as a going concern.
As reported by the TCR on April 21, 2011, HJ Associates &
Consultants, LLP, in Salt Lake City, Utah, expressed substantial
doubt about the Company's ability to continue as a going concern,
following the 2010 financial results. The independent auditors
noted that the Company has suffered recurring losses from
operations which have resulted in an accumulated deficit.
PLC SYSTEMS: Incurs $1.4 Million Net Loss in Second Quarter
-----------------------------------------------------------
PLC Systems Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.44 million on $363,000 of revenue for the three months ended
June 30, 2012, compared with a net loss of $541,000 on $398,000 of
revenue for the same period a year ago.
The Company reported a net loss of $8.22 million on $383,000 of
revenue for the six months ended June 30, 2012, compared with a
net loss of $4.32 million on $455,000 of revenue for the same
period during the prior year.
The Company reported a net loss of $5.76 million for 2011,
compared with a net loss of $505,000 for 2010.
The Company's balance sheet at June 30, 2012, showed $1.83 million
in total assets, $13.86 million in total liabilities and a $12.03
million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/Sfan3Q
About PLC Systems
Milford, Massachusetts-based PLC Systems Inc. is a medical device
company specializing in innovative technologies for the cardiac
and vascular markets. The Company's key strategic growth
initiative is its newest marketable product, RenalGuard(R).
RenalGuard is designed to reduce the potentially toxic effects
that contrast media can have on the kidneys when it is
administered to patients during certain medical imaging
procedures.
Following the 2011 financial results, McGladrey & Pullen, LLP, in
Boston, Massachusetts, expressed substantial doubt about PLC
Systems' ability to continue as a going concern. The independent
auditors noted that the Company has sustained recurring net losses
and negative cash flows from continuing operations.
PLYMOUTH OIL: To Have Bankruptcy Plan in 30-60 Days, Chairman Says
------------------------------------------------------------------
Joanne Glamm at Le Mars Daily Sentinel reports that Plymouth Oil's
management is preparing a plan to reorganize using the bankruptcy
process. According to the report, Plymouth Oil Board Chairman
Dave Hoffman said the Company's goal is to completely pay the
lenders back. Mr. Hoffman said the plan will be done within the
next 30-60 days.
Plymouth Oil -- http://www.plymouthoil.com-- has a $30 million
extraction plant located at 22058 K-42 Merrill, Iowa, directly
across from the new Plymouth Energy Ethanol Plant.
Founded by local investors, Plymouth Oil started operations in
February 2010 purchasing raw corn germ and refining this material
into de-oiled germ meal and kosher food-grade cooking oil. The
plant has the capability of pumping out 90 tons of corn oil each
day and about 300 tons of DCGM (defatted corn germ meal) daily,
which is used for hog, poultry and dairy feed.
Bankruptcy Judge Thad J. Collins presides over the case. Bradley
R. Kruse, Esq., at Brown Winick Graves Gross Baskerville &
Schoenebaum, P.L.C., serves as the Debtor's counsel. The petition
was signed by David P. Hoffman, president.
Secured creditors Arlon Sandbulte, Ryan Lake, Dirk Dorn, Steven
Vande Brake, and Iowa Corn Opportunities, LLC, are represented by
lawyers at Baird Holm LLP in Omaha, Nebraska.
POYNT CORPORATION: Creditor Protection Extended Until Today
-----------------------------------------------------------
Poynt Corporation, a global leader in mobile local search and
advertising, disclosed that the Court of Queen's Bench of Alberta
granted an order extending its creditor protection until Monday,
Aug. 20, 2012. The extension will allow the Company additional
time to work towards closing debtor-in-possession financings.
Hardie & Kelly Inc. of Calgary, Alberta, is the trustee appointed
for the Company's Notice of Intention to File a Proposal under the
Bankruptcy and Insolvency Act (Canada).
Poynt claims to have a convenient and timesaving GPS-enabled
mobile local search and advertising platform that connects
consumers to local offers, businesses, events, restaurants, movie
theatres, gas prices and weather information at the moment they
are looking to buy or acquire products or services. Poynt provides
consumers with the ability to move beyond discovery of their local
area to view movie trailers and reviews, buy movie tickets, click-
to-call businesses, get directions, browse listing websites, read
reviews and book dining reservations or find and interact with
local coupons and offers.
About Poynt Corporation
Poynt Corp. -- http://about.poynt.com/-- is a global leader in
the mobile local advertising space. Its Location Based Search
(LBS) and advertising platform, Poynt, enhances a user's ability
to connect with the people, businesses and events most important
to them. Poynt is available on Android, iPhone, Windows Phone and
Nokia devices, along with BlackBerry smartphones and BlackBerry
PlayBook Tablets in Canada, the United States, Europe, India and
Australia.
* * *
As reported in the Troubled Company Reporter on Aug. 16, 2012,
Poynt Corporation disclosed Tuesday that the Court of Queen's
Bench of Alberta granted an order extending its creditor
protection until Wednesday, Aug. 15, 2012. The extension will
allow the Company additional time to work towards closing debtor-
in-possession financings.
PROVIDENT COMMUNITY: Files Form 10-Q, Posts $143K Income in Q2
--------------------------------------------------------------
Provident Community Bankshares, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing net income of $143,000 on $2.79 million of total
interest income for the three months ended June 30, 2012, compared
with net income of $8,000 on $3.71 million of total interest
income for the same period a year ago.
The Company reported net income of $59,000 on $5.79 million of
total interest income for the six months ended June 30, 2012,
compared with net income of $119,000 on $7.31 million of total
interest income for the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $370.73
million in total assets, $358.08 million in total liabilities and
$12.64 million in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/TGia37
About Provident Community
Rock Hill, South Carolina-based Provident Community Bancshares,
Inc., is the bank holding company for Provident Community Bank,
N.A. Provident Community Bancshares has no material assets or
liabilities other than its investment in the Bank. Provident
Community Bancshares' business activity primarily consists of
directing the activities of the Bank.
The Bank's operations are conducted through its main office in
Rock Hill, South Carolina and seven full-service banking centers,
all of which are located in the upstate area of South Carolina.
The Bank is regulated by the Office of the Comptroller of the
Currency (the "OCC"), is a member of the Federal Home Loan Bank of
Atlanta (the "FHLB") and its deposits are insured up to applicable
limits by the Federal Deposit Insurance Corporation (the "FDIC").
Provident Community Bancshares is subject to regulation by the
Federal Reserve Board (the "FRB").
The Company reported a net loss of $190,000 on net interest income
of $8.5 million for 2011, compared with a net loss of
$13.8 million on net interest income of $8.4 million for 2010.
Total non-interest income was $3.3 million for 2011, as compared
to $3.5 million for 2010.
Consent Order
On Dec. 21, 2010, Provident Community Bank, N.A. entered into a
stipulation and consent to the issuance of a consent order with
the Office of the Comptroller of the Currency.
At Dec. 31, 2011, the Bank met each of the capital requirements
required by regulations, but was not in compliance with the
capital requirements imposed by the OCC in its Consent order.
The Bank is required by the consent order to maintain Tier 1
capital at least equal to 8% of adjusted total assets and total
capital of at least 12% of risk-weighted assets. However, so long
as the Bank is subject to the enforcement action executed with the
OCC on Dec. 21, 2010, it will not be deemed to be well-capitalized
even if it maintains the minimum capital ratios to be well-
capitalized. At Dec. 31, 2011, the Bank did not meet the higher
capital requirements required by the consent order and is
evaluating alternatives to increase capital.
PROVIDENT ROYALTIES: Ends $37MM Bankruptcy Disputes With Creditor
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Brian Mahoney at Bankruptcy Law360 reports that U.S. Bankruptcy
Judge Royal Furgeson on Tuesday approved a settlement between
Provident Royalties LLC and a creditor, oil and gas title services
provider PFM LLC, putting to rest dueling lawsuits over unpaid
fees and alleged fraudulent transfers that had sought a combined
$36.8 million.
About Provident Royalties
Based in Dallas, Texas, Provident Royalties LLC owned working
interests in oil and gas properties primarily in Oklahoma.
Provident and its affiliates filed for Chapter 11 (Bankr. N.D.
Tex. Case No. 09-33886) on June 22, 2009. Judge Harlin DeWayne
Hale presides over the case. Epiq Bankruptcy Solutions, LLC is
the claims and noticing agent. The United States Trustee for
the Northern District of Texas appointed nine members to the
Official Committee of Unsecured Creditors.
On July 2, 2009, the Securities and Exchange Commission filed,
under seal, a complaint with the District Court for the Northern
District of Texas against the Debtors and certain of their
principals and managing partners on allegations that they sold
stock and limited partnership interest to over 7,700 investors as
part of a $485 million Ponzi scheme. On July 2, 2009, the
District Court appointed Dennis L. Roossien, Jr., at Munsch Hardt
Kopf & Harr P.C. in Dallas, Texas, as receiver for the Debtors.
On July 20, 2009, the Bankruptcy Court named Mr. Roossien, Jr., as
the Debtors' Chapter 11 trustee.
Mr. Roossien, Jr., hired Patton Boggs, LLP, as his special
counsel. Patton Boggs, LLP, was Debtors' counsel before the
appointment of Mr. Roossien, Jr., as Chapter 11 trustee. Mr.
Roossien, Jr., also selected Munsch Hardt Koph & Harr, P.C., as
counsel. Gardere, Wynne, Sewell, LLP represents the official
committee of unsecured creditors. Rochelle McCullough, LLP
represents the official investors committee.
The Company, in its petition, estimated between $100 million and
$500 million each in assets and debts.
As reported in the Troubled Company Reporter on June 21, 2010, the
Chapter 11 Trustee, the official committee of unsecured creditors
and the official investors committee for Provident Royalties LLC
and its affiliates obtained confirmation of their plan of
liquidation. The Plan provides 100% return to all creditors
on their claims with interest, and creates a liquidating trust to
pursue claims against third parties for the benefit of holders of
preferred stock interests.
QUIGLEY CO: Pfizer's Plans Going to Creditors for Vote
------------------------------------------------------
The bankruptcy judge approved the disclosure statement explanining
the latest Chapter 11 Plan of Quigley Co.and allowed the non-
operating subsidiary of Pfizer Inc. to send the Plan to creditors
for voting on the Chapter 11 plan dealing with asbestos liability.
Bill Rochelle, the bankruptcy columnist for Bloomberg News, the
Aug.16 hearing was for approval of a disclosure statement
explaining the plan. U.S. Bankruptcy Judge Stuart Bernstein said
he won't decide until the confirmation hearing for approval of the
plan whether the company improperly bought votes from asbestos
claimants.
The report relates that Quigley filed its sixth-amended plan in
late June, modified as the result of an April opinion from the
U.S. Court of Appeals. Upholding the District Court, the appeals
court ruled that Pfizer wasn't entitled to complete protection
from asbestos claims under the umbrella of Quigley's Chapter 11
case. Pfizer increased its contribution under the plan to remedy
the shortcoming identified by the appeals court.
The report notes that the plan will shed asbestos liability for
both Quigley and Pfizer. In addition to increasing its cash
contribution, Pfizer is waiving a $95 million secured claim, a $19
million claim for financing the Chapter 11 case, and a $33 million
unsecured claim. To prevent the bankruptcy from being classified
technically as a liquidation, Pfizer is also providing real
property for Quigley to own and operate after emerging from
Chapter 11. Pfizer put Quigley into Chapter 11 reorganization in
September 2004 to deal with 500,000 asbestos claims for products
Quigley stopped making in the 1970s. Pfizer acquired Quigley in
1968.
About Quigley Co.
Quigley Co. was acquired by Pfizer in 1968 and sold small amounts
of products containing asbestos until the early 1970s. In
September 2004, Pfizer and Quigley took steps that were intended
to resolve all pending and future claims against the Company and
Quigley in which the claimants allege personal injury from
exposure to Quigley products containing asbestos, silica or mixed
dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11
plan and a settlement with Chrysler.
Quigley filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a
proposed global resolution of all pending and future asbestos-
related personal injury liabilities.
Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte
Roth & Zabel LLP, represent the Debtor in its restructuring
efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it disclosed
$155,187,000 in total assets and $141,933,000 in total debts.
In April 2011, the bankruptcy judge approved a plan-support
agreement with Pfizer and an ad hoc committee representing 30,000
asbestors claimants.
A May 20, 2011 opinion by District Judge Richard Holwell concluded
that Pfizer was directly liable for some asbestos claims arising
from products sold by its now non-operating subsidiary Quigley.
REGENCY CENTERS: Fitch Rates $75-Mil. Series 7 Pref. Stock 'BB+'
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Fitch Ratings has assigned a credit rating of 'BB+' to the $75
million 6.00% Series 7 cumulative redeemable preferred stock
issued by Regency Centers Corporation (NYSE: REG). Net proceeds
from the offering are expected to be used to redeem in full $75
million of Series 5 6.70% preferred stock.
Fitch currently rates Regency Centers Corporation and its
operating partnership as follows:
Regency Centers Corporation
-- Issuer Default Rating (IDR) 'BBB';
-- Preferred Stock 'BB+'.
Regency Centers, L.P.
-- IDR 'BBB';
-- Unsecured revolving facility 'BBB';
-- Senior unsecured term loan 'BBB';
-- Senior unsecured notes 'BBB'.
The Rating Outlook is Stable.
The 'BBB' IDR takes into account leverage and fixed charge
coverage metrics that have stabilized at levels appropriate for
the current rating. Absent any major deleveraging initiatives,
Fitch expects Regency to maintain credit metrics within a range
appropriate for the 'BBB' IDR.
Pro-rata leverage was 6.4x for the trailing 12 months (TTM) ended
June 30, 2012. This ratio was also 6.4x at year-end 2011, down
from 6.7x in 2010. Fitch measures leverage as net debt divided by
recurring operating EBITDA.
In addition, REG's pro-rata fixed-charge coverage ratio was 1.8x
for the TTM ended June 30, 2012, down slightly from 1.9x in both
2011 and 2010. Fitch defines fixed-charge coverage as recurring
operating EBITDA less straight-line rents, leasing commissions and
tenant and building improvements, divided by total interest
incurred and preferred stock dividends.
Fitch views REG's property portfolio profile, credit statistics,
debt maturities, and liquidity position based on combining its
wholly-owned properties and its pro-rata share of co-investment
partnerships, to analyze the company as if each of the co-
investment partnerships was dissolved via distribution in kind.
Several of REG's co-investment partnerships provide for unilateral
dissolution. Most of these co-investment partnerships provide for
a distribution in kind in the event of a dissolution, whereby REG
and its limited partner unwind the partnership by distributing the
underlying properties (and related property-level debt, if any) to
each partner based on each partner's respective ownership
percentage in the partnership. Further, the company has supported
its co-investment partnerships in the past by raising common
equity to repay or refinance its share of secured debt,
demonstrating its willingness to de-lever these partnerships.
Fitch views REG's joint venture platform positively as it provides
REG with broader market insights, incremental fee and property
income as well as other acquisition opportunities that REG may not
consider for wholly-owned assets. Via common equity follow-on
offerings, the company has also reduced leverage in its joint
ventures to levels consistent with leverage on the wholly-owned
consolidated portfolio.
Same-store property performance showed signs of recovery in 2011
and 2012. Overall leasing spreads were only modestly negative at
0.5% over the TTM ended June 30, 2012 driven by renewal growth of
1.8% mostly offsetting a negative 7.1% roll down on new leases.
Same-store occupancy increased to 94% as of June 30, 2012, up
180bps from a year earlier. Same-store NOI for the first six
months of 2012 has increased by 3.7% including termination fees
and 3.8% without including termination fees.
Fitch expects that same-store property NOI will grow in the low
single digits in 2012, 2013 and 2014. This modest growth is the
result of expected improvements in renewal and new lease rates and
occupancy.
REG's community and neighborhood shopping center portfolio
reflects moderate geographic and anchor tenant concentrations.
60% of REG's annualized base rent is derived from properties
located within the states of California, Florida, Texas, and
Virginia. The company's lease expiration schedule is manageable,
with no year representing more than 13% of expiring pro-rata
minimum base rent.
Although REG's five largest tenants by annual base rents (ABR)
represent in aggregate nearly 15.9% of total ABR, this tenant
concentration is offset by the fact that Fitch rates some of REG's
top tenants as investment grade. The company's five largest
tenants are Publix Super Markets Inc. (4.4%), The Kroger Co.
(4.1%, IDR of 'BBB' by Fitch with a Stable Outlook), Safeway Inc.
(3.6%, IDR of 'BBB-' by Fitch with a Stable Outlook), Supervalu
Inc. (2.2%, IDR of 'CCC' by Fitch), and Whole Foods (1.6%).
REG has established itself as a developer with a national
platform, and the company's development activities contain certain
inherent risks. However, the company has de-risked its
development strategy since the downturn. REG's net cost of
properties in development totaled less than 6% of its gross
undepreciated assets as of June 30, 2012, which is down
significantly from 11% and 23% as of year-end 2009 and 2010,
respectively. Net cost to complete represented 2.8% of total
undepreciated assets as of June 30, 2012 and has been low over the
past two and a half years.
REG has a manageable debt maturity schedule, with no year
accounting for more than 23% of total maturing debt. This
laddering enhances the company's liquidity profile.
For the period from July 1, 2012 to Dec. 31, 2014, REG's sources
of liquidity (cash, availability under its unsecured revolving
credit facility and projected retained cash flows from operating
activities after dividends) exceed uses of liquidity (pro-rata
debt maturities and amortization and projected capital
expenditures and development) by 1.2x. Under a scenario whereby
80% of REG's pro-rata secured debt is refinanced with new secured
debt, liquidity coverage improves to 1.4x. The company has
demonstrated strong access to the common equity, unsecured and
secured debt and preferred stock markets, mitigating near-term
refinance risk.
In addition, the company has good contingent liquidity in the form
of a sizeable unencumbered asset pool. Using an 8% capitalization
rate, the implied value of unencumbered assets covered net
unsecured debt by 2.3x as of Dec. 31, 2011, which is adequate for
the 'BBB' rating, and the company's unsecured debt covenants do
not restrict REG's financial flexibility.
The two notch differential between REG's IDR and its preferred
stock rating is consistent with Fitch's criteria for corporate
entities with a 'BBB' IDR. Based on Fitch's criteria report,
'Treatment and Notching of Hybrids in Nonfinancial Corporate and
REIT Credit Analysis' dated Dec. 15, 2011, the company's
cumulative redeemable preferred stock is deeply subordinated and
has loss absorption elements that would likely result in poor
recoveries in the event of a corporate default.
The Stable Outlook is based on mildly strengthening retail
fundamentals, Fitch's expectation that leverage and coverage will
remain relatively unchanged or improve modestly compared with
current levels and that REG will maintain adequate liquidity.
The following factors may have a positive impact on REG's ratings
and/or Outlook:
-- Fitch's expectation of total pro-rata leverage sustaining
below 5.5x for several quarters (pro-rata leverage was 6.4x
as of June 30, 2012);
-- Fitch's expectation of fixed-charge coverage sustaining above
2.3x for several quarters (pro-rata coverage was 1.8x for the
year ended June 30, 2012).
The following factors may have a negative impact on REG's ratings
and/or Outlook:
-- Fitch's expectation of leverage sustaining above 7.0x for
several quarters;
-- Fitch's expectation of fixed-charge coverage sustaining below
1.8x for several quarters;
-- A liquidity shortfall (REG had a base case liquidity coverage
ratio of 1.2x as of June 30, 2012).
RESIDENTIAL CAPITAL: Approved for $10.8-Mil. Retention Bonuses
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Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Residential Capital LLC was given permission from the
bankruptcy judge this week to adopt a retention bonus program for
174 workers that could pay $10.8 million. The bonuses will be
earned if the employees remain with the company and the businesses
are sold.
According to the report, ResCap is prohibited from paying a
retention bonus to anyone whose compensation would make him or her
among the 25 most highly compensated executives at ResCap, Ally,
or their affiliates. The judge didn't pass on the $4.1 million
incentive bonus program earmarked for 17 senior executives.
The report relates that a hearing to approve the sales is set for
Nov. 5. Judge Glenn isn't permitting creditors to vote on a
Chapter 11 plan until the examiner completes his investigation in
Feb. The $473.4 million of ResCap senior unsecured notes due
April 2013 last traded on Aug. 16 for 23.75 cents on the dollar,
according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority.
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.
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.
ResCap is selling its mortgage origination and servicing
businesses and its legacy portfolio, consisting mainly of mortgage
loans and other residual financial assets. At the onset of the
bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC
for the mortgage origination and servicing businesses, and with
Ally Financial for the legacy portfolio. Together, the asset
sales are expected to generate roughly $4 billion in proceeds.
According to Bloomberg News, following a hearing in June, the
bankruptcy judge scheduled auctions for Oct. 23. A hearing to
approve the sales was set for Nov. 5. Fortress Investment Group
LLC will make the first bid for the mortgage-servicing business,
while Berkshire Hathaway Inc. will serve as stalking-horse bidder
for the remaining portfolio of mortgages.
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: Judge Gives Examiner Subpoena Power
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Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that
a judge on Aug. 9,2012 granted broad subpoena power to the
independent examiner investigating Residential Capital LLC's
relationship with parent Ally Financial Inc., though he agreed
with private equity firm Cerberus Capital Management LP to limit
the number of parties with access to the examiner's data.
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.
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.
ResCap is selling its mortgage origination and servicing
businesses and its legacy portfolio, consisting mainly of mortgage
loans and other residual financial assets. At the onset of the
bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC
for the mortgage origination and servicing businesses, and with
Ally Financial for the legacy portfolio. Together, the asset
sales are expected to generate roughly $4 billion in proceeds.
According to Bloomberg News, following a hearing in June, the
bankruptcy judge scheduled auctions for Oct. 23. A hearing to
approve the sales was set for Nov. 5. Fortress Investment Group
LLC will make the first bid for the mortgage-servicing business,
while Berkshire Hathaway Inc. will serve as stalking-horse bidder
for the remaining portfolio of mortgages.
Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by affiliates of Residential Capital LLC and its
affiliates (http://bankrupt.com/newsstand/or 215/945-7000).
RG STEEL: Approved to Sell More Plants After Auction
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RG Steel LLC received approval on Aug. 15 to sell plants in
Warren, Ohio, and Sparrows Point, Maryland, for a total of $88
million. The judge also confirmed the auction sale of the plant
in Yorkville, Ohio, for $5.15 million, Bill Rochelle, the
bankruptcy columnist for Bloomberg News, reports.
Lance Duroni at Bankruptcy Law360 reports that RG Steel received
approval to sell its flagship steel mill in Maryland, but only
after appeasing environmental regulators and squashing a last-
minute bid.
A group of three buyers are paying $72.5 million for the Maryland
plant. The buyer is a joint venture between liquidator Hilco
Industrial LLC and Environmental Liability Transfer Inc., a real
estate developer that specializes in contaminated industrial
sites, according to Bankruptcy Law360.
Bloomberg reports that the top bid of $16 million cash for the
Warren facility came from CJ Betters Enterprises Inc. The judge
previously approved the sale of the Martins Ferry and Mingo
Junction plants in Ohio for a combined $22 million. Majority
owned by the Renco Group Inc., RG could produce 8.2 million tons a
year, making it the fourth-largest flatrolled steel producer in
the U.S. Renco acquired the business from U.S. subsidiaries of OAO
Severstal in March 2011.
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owns Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No.
12-11661) on May 31, 2012, to pursue a sale of the business. The
bankruptcy was precipitated by liquidity shortfall and a dispute
with Mountain State Carbon, LLC, and a Severstal affiliate, that
restricted the shipment of coke used in the steel production
process.
The Debtors estimated assets and debts in excess of $1 billion as
of the Chapter 11 filing. The Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors.
Conway MacKenzie, Inc., serves as the Debtors' financial advisor
and The Seaport Group serves as lead investment banker. Donald
MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson
Consultants LLC is the claims and notice agent and provides
administrative services.
RG Steel LLC sold the Sparrows Point steel mill to liquidator
Hilco Industrial on Aug. 7 for about $72 million,
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
An official committee of unsecured creditors has been appointed in
the case. Kramer Levin Naftalis & Frankel LLP represents the
Committee. Saul Ewing LLP serves as co-counsel. Huron Consulting
Services LLC serves as its financial advisor.
SAN BERNARDINO, CA: Bondholders, Workers Ask for More Time
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Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that San Bernardino, California, appeared in bankruptcy
court Aug. 17 for a hearing where the judge will set down a
schedule for deciding whether the city is eligible for Chapter 9
municipal bankruptcy.
The report notes that in Chapter 11, there is no threshold
determination about whether the company is entitled to be in
bankruptcy. Rather, creditors have the burden of filing a motion
and attempting to show that the Chapter 11 case should be
dismissed on a relevant ground, such as filing in bad faith.
The report relates that Chapter 9 contains a litany of
requirements a city must meet to remain in bankruptcy and requires
the judge to hold a hearing on eligibility. The requirements
include a showing that the municipality is allowed by state law to
file federal bankruptcy and that the governmental unit has
negotiated in good faith with creditors.
The report notes that five of the city's creditors, including the
firefighters' union, filed objections to the city's request for
setting Sept.21 as the deadline for filing papers opposing the
city's right to remain in bankruptcy. They claim it's too soon
because the city hasn't filed papers supporting the right to be in
Chapter 9.
The report relays that the city a filed response Aug. 17 modifying
the proposed schedule. At the Aug.18 hearing, the city will ask
the bankruptcy judge in Riverside, California, to make Oct. 5 the
deadline for creditors to file objections to continuation of the
Chapter 9 case.
About San Bernardino
The city council of San Bernardino, California, voted on July 10,
2012, to file for bankruptcy. The move lets San Bernardino bypass
state-required mediation with creditors and proceed directly to
U.S. Bankruptcy Court.
The decision by the leaders of San Bernardino, a city of about
210,000 residents approximately 65 miles (104 km) east of Los
Angeles, followed a report by city staff that projected city
spending would exceed revenue by $45 million in the current fiscal
year. Revenues have dropped 9.8% since their peak in 2008.
If the city seeks bankruptcy protection, it would join
California's Stockton, an agricultural center of 292,000 east of
San Francisco, and Mammoth Lakes, a mountain resort town of 8,200
south of Yosemite National Park.
SB PARTNERS: Incurs $261,000 Net Loss in Second Quarter
-------------------------------------------------------
SB Partners filed with the U.S. Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of
$261,154 on $642,766 of total revenues for the three months ended
June 30, 2012, compared with a net loss of $232,853 on $611,957 of
total revenues for the same period during the prior year.
The Company reported a net loss of $541,675 on $1.28 million of
total revenues for the six months ended June 30, 2012, compared
with a net loss of $425,067 on $1.27 million of total revenues for
the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $17.87
million in total assets, $21.11 million in total liabilities and a
$3.23 million total partners' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/p8lcW3
About SB Partners
Milford, Conn.-based SB Partners is a New York limited partnership
engaged in acquiring, operating and holding for investment a
varying portfolio of real estate interests. As of June 30,
2010, the partnership owns an industrial flex property in Maple
Grove, Minnesota and warehouse distribution centers in Lino Lakes,
Minnesota and Naperville, Illinois.
The Company has a 30% interest in Sentinel Omaha, LLC. Sentinel
Omaha is a real estate investment company which currently owns 24
multifamily properties and 1 industrial property in 17 markets.
Sentinel Omaha is an affiliate of the partnership's general
partner.
SEA TRAIL: OK'd to Ink Premium Financing Contract with IPFS Corp.
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The Hon. Stephani W. Humrickhouse of the U.S. Bankruptcy Court for
the Eastern District of North Carolina has authorized Sea Trail
Corporation to enter into premium financing agreement with IPFS
Corporation.
The Debtor maintains various insurance policies in the ordinary
course of its business. The Debtor maintains all of its insurance
policies through Zurich. The Debtor's insurance policies are due
to expire and the Debtor is obtaining a new policy to replace the
expiring policy.
According to the Debtor, it is unable to pay, in the ordinary
course of business, the entire yearly premium of approximately
$132,716. However, the Debtor is able to finance the premium over
the course of the years, through the payment of a down payment,
plus monthly payments over eight months for the remaining balance
of the premium.
The Debtor has explored financing the premium with various
companies in the business of providing insurance premium financing
and has determined that IPFS offers the most advantageous terms of
the financing.
The agreement requires a down payment of approximately $46,500,
plus monthly payments over a period of eight months. the annual
percentage rate is 4.5% and the total amount financed is $82,496.
The Court also directed the Debtor to grant to IPFS first priority
lien and security interests in all unearned or return premiums and
dividends which may become payable under the insurance policies.
A copy of the terms of the agreement is available for free at
http://bankrupt.com/misc/SEATRAIL_financing_order.pdf
Cash Collateral
In a separate order, the Court authorized the Debtor to use the
cash collateral which secures obligations to Waccamaw Bank.
Waccamaw Bank's proof of claim reflected $15,880,408 as of
Oct. 4, 2011.
Waccamaw is a secured creditor of the Debtor by virtue of two
promissory notes secured by senior deed of trust liens on the
great majority of the Debtor's real estate, including the golf
courses, the convention center buildings, developed residential
lots and the real estate held by the Debtor for future development
purposes. In addition, the Debtor's obligations to Waccamaw are
secured by a security interest in all rents.
The Court also clarified that two-thirds of golf cart and greens
fees revenue is cash collateral of Waccamaw Bank and 100% of the
remaining categories are cash collateral of Waccamaw Bank. The
sales of food and drink, banquet goods and services, bar and grill
goods and services, merchandise from the golf shop are not cash
collateral of Waccamaw Bank. Furthermore, revenues generated from
range balls and club rentals are not cash collateral subject to
Waccamaw Bank's security interest. Lastly, any management or
rental fees received by the Debtor associated with the units not
owned by Sea Trail are not cash collateral of Waccamaw Bank.
As additional adequate protection for the use of Waccamaw Bank's
cash collateral, the Debtor will grant to Waccamaw Bank a
postpetition lien on all intellectual property owned by the
Debtor.
Adequate Protection
The Court also signed, on Feb. 16, 2012, an agreed order allowing
relief from the automatic stay and adequate protection to Waccamaw
Bank. A copy of the order is available for free at
http://bankrupt.com/misc/SEATRAIL_stay_order.pdf
About Sea Trail Corporation
Sunset Beach, North Carolina-based, Sea Trail Corporation operates
the Sea Trail Golf Resort and Conference Center. The Debtor's
business operations are comprise of three operating divisions,
including the golf division, the convention and resort division,
and the real estate division.
Sea Trail Corporation filed a Chapter 11 petition (Bankr. E.D.N.C.
Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina.
The Debtor reported $34,222,281 in assets and $22,174,201 in
liabilities as of the Chapter 11 filing. Stubbs & Perdue P.A. is
the Debtors' attorney. McIntyre, Paradis, Wood & Company CPA's
PLLC is the Debtor's accountants. The Finley Group, Inc., is the
Debtor's financial consultant.
Sea Trail Corporation's official committee of unsecured creditors
retained J.M. Cook and his firm, J.M. Cook, P.A., as counsel.
SECUREALERT INC: Incurs $4.1-Mil. Net Loss in June 30 Quarter
-------------------------------------------------------------
SecureAlert, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $4.14 million on $4.79 million of total revenues for the three
months ended June 30, 2012, compared with a net loss of $2.37
million on $4.43 million of total revenues for the same period
during the prior year.
The Company reported a net loss of $7.72 million on $15.25 million
of total revenues for the nine months ended June 30, 2012,
compared with a net loss of $6.96 million on $11.99 million of
total revenues for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $22.73
million in total assets, $9.51 million in total liabilities and
$13.21 million in total equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/dIBxLM
About SecureAlert Inc.
Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA)
-- http://www.securealert.com/-- is an international provider of
electronic monitoring systems, case management and services widely
utilized by more than 650 law enforcement agencies worldwide.
In the auditors' report accompanying the consolidated financial
statements for the fiscal year ended Sept. 30, 2011, the Company's
independent auditors expressed substantial doubt about the
Company's ability to continue as a going concern. Hansen, Barnett
& Maxwell, P.C., in Salt Lake City, Utah, noted that the Company
has incurred losses, negative cash flows from operating activities
and has an accumulated deficit.
SOLYNDRA LLC: Plan Exclusivity Extended Until Aug. 31
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware, in a third
order, extended Solyndra LLC, et al.'s exclusive periods to file
and solicit acceptances for the proposed chapter 11 plan until
Aug. 31, 2012, and Nov. 2, respectively.
As reported in the Troubled Company Reporter on Aug. 9, 2012,
Solyndra filed a liquidating plan at the end of July. The U.S.
Bankruptcy Court in Delaware scheduled a hearing on Sept. 7 for
approval of the explanatory disclosure statement. The plan is
based on settlements with the creditors' committee, workers who
were fired without the required 60 days' notice, and secured
lenders. The plan will pay from 2.5% to 6% to unsecured creditors
of Solyndra with claims totaling as much as $120 million.
Unsecured creditors with $27 million in claims against the holding
company are projected to have a 3% dividend. So-called Tranche A
lenders, with $69.7 million in claims, are projected for a 50% to
100% recovery. Tranche B lenders, owed $142.8 million, could
receive nothing. In the most favorable case, their recovery would
be 17%. Tranche D lenders with $385 million in claims and Tranche
E lenders owed $186.6 are likely to receive nothing.
About Solyndra LLC
Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar
photovoltaic solar power systems specifically designed for large
commercial and industrial rooftops and for certain shaded
agriculture applications. The Company had 968 full time employees
and 211 temporary employees. Solyndra has sold more than 500,000
of its panels since 2008 and generated cumulative sales of over
$250 million.
Fremont, California-based Solyndra and affiliate 360 Degree Solar
Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at
least the third solar company to seek court protection from
creditors since August 2011.
Judge Mary F. Walrath presides over the Debtors' cases. The
Debtors are represented by Pachulski Stang Ziehl & Jones LLP as
legal adviser. AlixPartners LLP serves as noticing claims and
balloting agent. Imperial Capital LLC serves as the company's
investment banker and financial adviser. The Debtors also tapped
former Massachusetts Governor William F. Weld, now with the law
firm McDermott Will & Emery, to represent the company in
government investigations and related litigation. BDO Consulting,
a division of BDO USA, LLP, as financial advisor and BDO Capital
Advisors, LLC, serves as investment banker for the creditors'
panel.
The Official Committee of Unsecured Creditors of Solyndra LLC has
tapped Blank Rome LLP as counsel and BDO Consulting as financial
advisors.
In October 2011, the Debtors hired Berkeley Research Group, LLC,
and designated R. Todd Neilson as Chief Restructuring Officer.
Solyndra owed secured lenders $783.8 million, including
$527.8 million to the U.S. government pursuant to a federal loan
guarantee, and held assets valued at $859 million as of the
Petition date. The U.S. Federal Financing Bank, owned by the U.S.
Treasury Department, is the Company's biggest lender.
When they filed for Chapter 11, the Debtors pursued a two-pronged
strategy to effectuate either a sale of their business to a
"turnkey" buyer who may acquire substantially all of Solyndra's
assets or, if the Debtors were unable to identify any potential
buyers, an orderly liquidation of the assets for the benefit of
their creditors.
Solyndra did not receive acceptable offers to buy the business as
a going concern. Two auctions late last year brought in a total
of $8 million. A three-day auction in February generated another
$3.8 million. An auction in June generated $1.79 million from the
sale of 7,200 lots of equipment.
Solyndra filed a liquidating plan at the end of July and scheduled
a hearing on Sept. 7 for approval of the explanatory disclosure
statement. The Plan is designed to pay 2.5 percent to 6 percent
to unsecured creditors with claims totaling as much as $120
million. Unsecured creditors with $27 million in claims against
the holding company are projected to have a 3 percent dividend.
SONOMA VINEYARD: Plan of Reorganization Wins Court Approval
-----------------------------------------------------------
Sonoma Vineyard Estates LLC, in an order dated Dec. 16, 2011,
confirmed its Plan of Reorganization. The Debtor's Plan proposed
to either sell the entirety or to take the two parcels that are
comprised of 58.5 acres and process an application for a 17 estate
lot subdivision so that the property can be sold to a developer
which in turn would result in all creditors being paid in full and
possibly some of the $3,000,000 invested by the members being
returned to them.
As reported in the Troubled Company Reporter on Sept. 26, 2011,
the Sonoma County General Plan allows for a 22 lot residential
subdivision on the two lots with APN numbers 142-042-020 and 142
042-021. Under the Sonoma County General Plan Use Policy LU-18t
it states that if the existing golf course is abandoned on the
48.5 acre parcel then 15 residential homes may be placed on the
parcel. The second parcel that is just less than 10 acres is
allowed to be divided into two lots. Both adjacent property
owners have consented to support this subdivision.
The members of Sonoma Vineyard will advance 50% of the cost to the
site planner, architect, engineer and planner to obtain the
necessary approvals from Sonoma County for a tentative map on the
estate lot subdivision with Geneva Leasing advancing the other 50%
pursuant to the terms of a confidential settlement agreement dated
March 9, 2011. The costs are to be repaid upon the sale of the
property with the tentative map.
Claims against the Debtor are classified under the Plan as:
Class 1- Geneva Leasing
Class 2 - Charter Oak Bank
Class 3 - Riechers Spence Associates
Class 4 - Allowed Unsecured Claims
Class 5 - The Members
A full-text copy of the Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?76fb
About Sonoma Vineyards Estate
Napa, California-based Sonoma Vineyards Estate LLC filed for
Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-
13447) on Sept. 7, 2010. Michael C. Fallon, Esq., at the Law
Offices of Michael C. Fallon, in Santa Rosa, Calif., assists the
Debtor in its restructuring effort. In its schedules, the Debtor
listed $10,000,038 in assets and $6,998,010 in liabilities.
SOUTHERN STATES COOP: Moody's Keeps 'B1' CFR/PDR; Outlook Negative
------------------------------------------------------------------
Moody's Investors Service revised Southern States Cooperative
Inc.'s rating outlook to negative from stable, and downgraded the
company's speculative grade liquidity rating to SGL-3 from SGL-2.
The company's B1 corporate family and probability of default
ratings were affirmed, as was the B3 rating on the company's
senior unsecured notes.
The following ratings were affirmed:
Corporate family rating at B1
Probability of default rating at B1
$130 million senior unsecured notes due 2015 at B3 (LGD 5, 84%)
The following rating was downgraded:
Speculative grade liquidity rating to SGL-3 from SGL-2
The ratings outlook is negative.
Ratings Rationale
"The change in outlook to negative reflects the significant
deterioration in Southern States' earnings and credit metrics over
the past year," stated Moody's analyst, Mike Zuccaro. "While
volatility is factored into the rating, credit metrics have
deteriorated to levels that are outside expectations." The weather
in Southern States' operating territory has been unusually warm
and dry, resulting in lower unit sales in the fuel and feed
divisions. Also, volatile fertilizer prices caused a reduction in
demand, leading to inventory write-downs. Lower unit sales and
increased commodity costs led to higher inventory levels and
higher peak revolver borrowings that, when combined with the
earnings decline, drove a significant increase in average lease-
adjusted debt/EBITDA.
The company's speculative grade liquidity rating was downgraded to
SGL-3, reflecting the expectation that excess revolver
availability, while remaining adequate, will likely decline from
recent seasonal levels. The company's revolver allows for
sufficient borrowing, up to $300 million based on a seasonal
borrowing base calculation. However, the facility contains a fixed
charge covenant that becomes effective should excess availability
fall below a certain level. While the need to comply with the
covenant is not currently expected, the significant drop in
earnings would likely result in non-compliance if the need were to
arise over the near term.
Southern States' B1 corporate family rating continues to reflect
the company's high degree of earnings and cash flow volatility
driven by factors such as weather and commodity price levels which
tend to fluctuate based on supply and demand. This volatility can
lead to significant fluctuations in sales, profitability and
credit metrics. The rating also reflects Southern States' low
absolute profit margins and limited pricing advantage stemming
from the commoditized nature of its products. The rating is
supported by the company's strong competitive position as an
agricultural supplier in the Mid Atlantic and Southeastern U.S.,
its highly diversified customer base, and the favorable long-term
fundamentals of commercial agriculture that underpin stable future
demand for products, including population growth and proliferation
of industrial applications such as production of bio-fuels.
Southern States' ratings could be downgraded if it appears that
the company will fail to materially improve profitability to a
point where debt/EBITDA is sustained below 5.5 times and EBITA-to-
interest above 1.3 times. A downgrade could also occur if the
company does not maintain adequate liquidity, particularly if
substantial excess revolver availability is not sustained.
In view of Southern States' high level of business volatility and
negative ratings outlook, a ratings upgrade is unlikely over the
near-to-intermediate term. Over time, further diversification and
greater scale while sustaining higher operating and cash flow
margins would be viewed positively.
Southern States' ratings have been assigned by evaluating factors
that Moody's believes are relevant to the company's risk profile,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. These attributes were compared against other
issuers both within and outside Southern States' core industry.
Southern States' ratings are believed to be comparable to those of
other issuers with similar credit risk. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Headquartered in Richmond, Virginia, Southern States Cooperative,
Inc. is a retailer and wholesale supplier of a diversified array
of agricultural products and services, such as fertilizer, seed,
crop protectants, animal feed, petroleum, and farm and home
supplies.
SPANISH BROADCASTING: Incurs $2.7 Million Net Loss in 2nd Quarter
-----------------------------------------------------------------
Spanish Broadcasting System, Inc., filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss applicable to common stockholders of $2.78
million on $34.61 million of net revenue for the three months
ended June 30, 2012, compared with net income applicable to common
stockholders of $5.96 million on $35.62 million of net revenue for
the same period during the prior year.
The Company reported a net loss applicable to common stockholders
of $8.92 million on $66.70 million of net revenue for the six
months ended June 30, 2012, compared with net income of $3.79
million on $66.40 million of net revenue for the same period a
year ago.
The Company's balance sheet at June 30, 2012, showed $466.74
million in total assets, $418.02 million in total liabilities,
$92.34 million in cumulative exchangeable redeemable preferred
stock, and a $43.63 million total stockholders' deficit.
"During the second quarter, we continued to execute our plan to
strengthen our multi-media platform, while carefully managing our
costs," commented Raul Alarcon, Jr., Chairman and CEO. "The
advertising environment was mixed, but we were able to offset some
of the weakness at the national level through increased local and
interactive sales. We also made significant progress in reducing
the operating loss at our television operations. Looking ahead,
our station brands remain strong, and we are continuing to expand
our interactive footprint and build on our revitalized sales
force. We also remain well positioned to attract our share of
political dollars in the second half of the year given our leading
audience shares in the nation's top-ten Hispanic markets."
A copy of the Form 10-Q is available for free at:
http://is.gd/N4lNOj
About Spanish Broadcasting
Headquartered in Coconut Grove, Florida, Spanish Broadcasting
System, Inc. -- http://www.spanishbroadcasting.com/-- owns and
operates 21 radio stations targeting the Hispanic audience. The
Company also owns and operates Mega TV, a television operation
with over-the-air, cable and satellite distribution and affiliates
throughout the U.S. and Puerto Rico. Its revenue for the twelve
months ended Sept. 30, 2010, was approximately $140 million.
* * *
In November 2010, Moody's Investors Service upgraded the corporate
family and probability of default ratings for Spanish Broadcasting
System, Inc., to 'Caa1' from 'Caa3' based on improved free cash
flow prospects due to better than anticipated cost cutting and the
expiration of an unprofitable interest rate swap agreement.
Moody's said Spanish Broadcasting's 'Caa1' corporate family rating
incorporates its weak capital structure, operational pressure in
the still cyclically weak economic climate, generally narrow
growth prospects (though Spanish language is the strongest growth
prospect) given the maturity and competitive pressures in the
radio industry, and the June 2012 maturity of its term loan
magnify this challenge.
In July 2010, Standard & Poor's Ratings Services raised its
corporate credit rating on Miami, Fla.-based Spanish Broadcasting
System Inc. to 'B-' from 'CCC+', based on continued improvement in
the company's liquidity position. The rating outlook is stable.
"The rating action reflects S&P's expectation that, despite very
high leverage, SBS will have adequate liquidity over the
intermediate term to meet debt maturities, potential swap
settlements, and operating needs until its term loan matures on
June 11, 2012," said Standard & Poor's credit analyst Michael
Altberg.
STANADYNE HOLDINGS: Incurs $2.7-Mil. Net Loss in Second Quarter
---------------------------------------------------------------
Stanadyne Holdings, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $2.71 million on $68.65 million of net sales for the
three months ended June 30, 2012, compared with a net loss of
$929,000 on $61.59 million of net sales for the same period a year
ago.
The Company reported a net loss of $3.80 million on $136.94
million of net sales for the six months ended June 30, 2012,
compared with a net loss of $6.34 million on $120.43 million of
net sales for the same period during the prior year.
The Company's balance sheet at June 30, 2012, showed $375.49
million in total assets, $426.49 million in total liabilities,
$632,000 in redeemable non-controlling interest, and a $51.63
million total stockholders' deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/xXIVcw
About Stanadyne Holdings
Stanadyne Corporation, headquartered in Windsor, Connecticut,
is a designer and manufacturer of highly-engineered precision-
manufactured engine components, including fuel injection equipment
for diesel engines. Stanadyne sells engine components to original
equipment manufacturers and the aftermarket in a variety of
applications, including agricultural and construction vehicles and
equipment, industrial products, automobiles, light duty trucks and
marine equipment. Revenues for LTM ended Sept. 30, 2010 were
$240 million.
* * *
In January 2011, Moody's Investors Service confirmed Stanadyne
Holdings, Inc.'s Caa1 Corporate Family Rating and revised the
rating outlook to stable. The CFR confirmation reflects the
remediation of the Stanadyne's previous inability to file
financial statements in accordance with financial reporting
requirements contained in its debt agreements and expectations for
modest continued improvement in operating performance. Improved
operations, largely the result of positive momentum in key end
markets and restructuring activities, have allowed Stanadyne to
maintain positive funds from operations despite increased cash
interest expense. The company's $100 million 12% senior discount
notes began paying cash interest in February 2010.
In March 2012, Standard & Poor's Ratings Services revised its
long-term outlook to negative from stable on Windsor, Conn.-based
Stanadyne Corp. At the same time, Standard & Poor's affirmed its
ratings, including the 'CCC+' corporate credit rating, on
Stanadyne.
"The outlook revision reflects the risk that Stanadyne may not be
able to service debt obligations of its parent, Stanadyne Holdings
Inc. as early as August 2012," said Standard & Poor's credit
analyst Dan Picciotto.
SUPERNUS PHARMACEUTICALS: Had $10-Mil. Net Loss in Second Quarter
-----------------------------------------------------------------
Supernus Pharmaceuticals, Inc., filed its quarterly report on Form
10-Q, reporting a net loss of $10.0 million on $91,000 of
revenues for the three months ended June 30, 2012, compared with
a net loss of $7.4 million on $750,000 of revenues for the same
period last year.
For the six months ended June 30, 2012, the Company had a net loss
of $19.3 million on $299,000 of revenues, compared with a net loss
of $18.4 million on $750,000 of revenues for the same period in
2011.
The Company's balance sheet at June 30, 2012, showed $80.0 million
in total assets, $42.0 million in total liabilities, and
stockholders' equity of $38.0 million. Since inception, the
Company has incurred, and continues to incur, significant losses
from operations.
"The Company's current operating assumptions, which reflect
management's best estimate of future revenue and operating
expenses, indicate that current cash on hand, including the
proceeds received from the sale of common stock in May 2012,
should be sufficient to fund operations as currently planned into
the second quarter of 2013. As a result, the Company envisions
that it will need to raise additional capital prior to this time
so as to be able to continue its business operations as currently
conducted and fund deficits in operating cash flows."
"Although the Company intends to raise additional capital, there
can be no assurance that any financing will be available to the
Company at any given time or available on favorable terms. The
type, timing and terms of financing selected by the Company will
be dependent upon the Company's cash needs, the availability of
financing sources and the prevailing conditions in the financial
markets."
Ernst & Young LLP's report with respect to Supernus
Pharmaceuticals' consolidated financial statements as of and for
the year ended Dec. 31, 2011, contains an explanatory paragraph
stating that there is substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred recurring operating losses and
negative cash flows from operations and will require additional
capital to fund operations.
A copy of the Form 10-Q is available for free at:
http://is.gd/mrMAys
Rockville, Md.-based Supernus Pharmaceuticals, Inc., is a
specialty pharmaceutical company focused on developing and
commercializing products for the treatment of central nervous
system, or CNS, diseases. The Company is developing several
product candidates in neurology and psychiatry to address large
market opportunities in epilepsy and ADHD including ADHD patients
with impulsive aggression. These product candidates include
Trokendi XR (extended-release topiramate), formerly known as SPN-
538, and SPN-804 (extended-release oxcarbazepine) for epilepsy,
SPN-810 for impulsive aggression in ADHD and SPN-812 for ADHD.
SYMS CORP: Files Second Amended Plan Supplement
-----------------------------------------------
BankruptcyData.com reports that Filene's Basement filed with the
U.S. Bankruptcy Court a Supplement for the Second Amended Joint
Chapter 11 Plan of Reorganization of Syms Corporation.
According to documents filed with the Court, the Supplement
contains: "(i) List of Retained Causes of Action and Avoidance
Actions (Exhibit A); (ii) List of Assumed Agreements (Exhibit B);
(iii) Forms of Certificate of Incorporation and By-Laws of
Reorganized Syms, LLC, Agreement for Reorganized Filene's, Trust
Agreement for the Series A Trust 2012 and Escrow and Pledge
Agreement (Exhibit C); Rights Offering Procedures and Forms of
Subscription Agreement (Exhibit D); (v) Equity Commitment
Agreement (Partially Redacted) (Exhibit E); (vi) Budget (Exhibit
F); (vii) Schedule of Syms Owned Real Estate (Exhibit G); (viii)
Form of Management Agreement (Exhibit H); (ix) Identification of
Directors and Officers of Reorganized Debtors (Annex 1); (x) Form
of Assignment of Certain Intellectual Property Assets to Ms. Syms
(Annex 2); and (xi) Form of Amendment No. 1 to Split Owner/Split
Dollar Assignment for Controlling Stockholders (Annex 3)."
The Court previously scheduled an Aug. 29, 2012 hearing to
consider confirming the Plan.
About Filene's Basement & Syms
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22
(Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by
lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy
Solutions serves as claims and notice agent. The Debtors
disclosed assets of $236 million, including real estate of $97.7
million, and liabilities of $94 million, including $31.1 million
owing on a revolving credit with Bank of America NA as agent. In
addition, there were $11.1 million in letters of credit
outstanding on the revolver.
The 2009 Debtor was formally renamed FB Liquidating Estate,
following the sale of all of its assets to Syms Corp. in June
2009.
Pursuant to the Liquidating Plan confirmed in January 2010,
secured creditors in the Chapter 11 case have been paid in full,
and holders of priority, administrative and convenience class
claims have received 100% of their allowed claims. As reported by
the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen,
Chairman of Abacus Advisors LLC and Chief Restructuring Officer
for FB Liquidating Estate disclosed that a second distribution of
dividend checks to Filene's unsecured creditors amounting to 12.5%
of approved claims has been made, bringing the cumulative
distributions on unsecured claims to 62.5%.
On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and
two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos.
11-13511 to 11-13514) after a failed bid to sell the business.
The two units are Syms Clothing Inc. and Syms Advertising Inc.
Judge Kevin J. Carey presides over the case. Lawyers at Skadden
Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The
Debtors tapped Rothschild Inc. as investment banker and Cushman
and Wakefield Securities, Inc., as real estate financial advisors.
Syms shuttered its namesake and Filene's Basement outlets upon the
bankruptcy filing and tapped a joint venture of Gordon Brothers
Retail Partners LLC and Hilco Merchant Resources LLC to run the
going-out-of-business sales. The sale may continue until Jan. 31,
2012.
Filene's Basement estimated $1 million to $10 million in assets
and $50 million to $100 million in debts. The petitions were
signed by Gary Binkoski, authorized representative of Filene's
Basement.
The official committee of unsecured creditors appointed in the
2011 case has retained Hahn & Hessen LLP as legal counsel.
Holders of equity in Syms Corp. pushed for an official
shareholders' committee and separation of the Syms and Filene's
Basement bankruptcy estates.
Gordon Brothers and Hilco are represented by Goulston & Storrs,
P.C. and Ashby & Geddes, P.A.
SYMS CORP: Macy's Objects to Sale of Filene's IP
------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that Macy's Inc.
objected Wednesday to Syms Corp.'s plan to sell intellectual
property assets that include a licensing agreement with Macy's,
which holds the trademarks of Syms subsidiary Filene's Basement
LLC.
Bankruptcy Law360 relates that in an objection filed in Delaware
bankruptcy court, Macy's said it had not consented to Syms'
assumption of the licensing agreement -- signed by Macy's
predecessor Federated Department Stores Inc. in 1988 -- and the
sale of it as part of the reorganization plan.
About Filene's Basement & Syms
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22
(Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by
lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy
Solutions serves as claims and notice agent. The Debtors
disclosed assets of $236 million, including real estate of $97.7
million, and liabilities of $94 million, including $31.1 million
owing on a revolving credit with Bank of America NA as agent. In
addition, there were $11.1 million in letters of credit
outstanding on the revolver.
The 2009 Debtor was formally renamed FB Liquidating Estate,
following the sale of all of its assets to Syms Corp. in June
2009.
Pursuant to the Liquidating Plan confirmed in January 2010,
secured creditors in the Chapter 11 case have been paid in full,
and holders of priority, administrative and convenience class
claims have received 100% of their allowed claims. As reported by
the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen,
Chairman of Abacus Advisors LLC and Chief Restructuring Officer
for FB Liquidating Estate disclosed that a second distribution of
dividend checks to Filene's unsecured creditors amounting to 12.5%
of approved claims has been made, bringing the cumulative
distributions on unsecured claims to 62.5%.
On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and
two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos.
11-13511 to 11-13514) after a failed bid to sell the business.
The two units are Syms Clothing Inc. and Syms Advertising Inc.
Judge Kevin J. Carey presides over the case. Lawyers at Skadden
Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The
Debtors tapped Rothschild Inc. as investment banker and Cushman
and Wakefield Securities, Inc., as real estate financial advisors.
Syms shuttered its namesake and Filene's Basement outlets upon the
bankruptcy filing and tapped a joint venture of Gordon Brothers
Retail Partners LLC and Hilco Merchant Resources LLC to run the
going-out-of-business sales. The sale may continue until Jan. 31,
2012.
Filene's Basement estimated $1 million to $10 million in assets
and $50 million to $100 million in debts. The petitions were
signed by Gary Binkoski, authorized representative of Filene's
Basement.
The official committee of unsecured creditors appointed in the
2011 case has retained Hahn & Hessen LLP as legal counsel.
Holders of equity in Syms Corp. pushed for an official
shareholders' committee and separation of the Syms and Filene's
Basement bankruptcy estates.
Gordon Brothers and Hilco are represented by Goulston & Storrs,
P.C. and Ashby & Geddes, P.A.
SYMS CORP: Approved to Sell Miami Property for $4.35 Million
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Syms Corp., the liquidating retailer, received
bankruptcy court permissions on Aug.17 to sell property in Miami
for $4.35 million. There were no competing bids at auction. The
purchaser is Independent Living Systems LLC. Syms is facing a
contested confirmation hearing on Aug. 29 for approval of the
liquidating Chapter 11 plan.
About Filene's Basement & Syms Corp.
Massachusetts-based Filene's Basement, also called The Basement,
is the oldest off-price retailer in the United States. The
Basement focuses on high-end goods and is known for its
distinctive, low-technology automatic markdown system.
Filene's Basement first filed for Chapter 11 bankruptcy protection
in August 1999. Filene's Basement was bought by a predecessor of
Retail Ventures, Inc., the following year. Retail Ventures in
April 2009 transferred the unit to Buxbaum.
Filene's Basement, Inc. and its affiliates filed for Chapter 22
(Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by
lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy
Solutions serves as claims and notice agent. The Debtors
disclosed assets of $236 million, including real estate of $97.7
million, and liabilities of $94 million, including $31.1 million
owing on a revolving credit with Bank of America NA as agent. In
addition, there were $11.1 million in letters of credit
outstanding on the revolver.
The 2009 Debtor was formally renamed FB Liquidating Estate,
following the sale of all of its assets to Syms Corp. in June
2009.
Pursuant to the Liquidating Plan confirmed in January 2010,
secured creditors in the Chapter 11 case have been paid in full,
and holders of priority, administrative and convenience class
claims have received 100% of their allowed claims. As reported by
the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen,
Chairman of Abacus Advisors LLC and Chief Restructuring Officer
for FB Liquidating Estate disclosed that a second distribution of
dividend checks to Filene's unsecured creditors amounting to 12.5%
of approved claims has been made, bringing the cumulative
distributions on unsecured claims to 62.5%.
On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and
two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos.
11-13511 to 11-13514) after a failed bid to sell the business.
The two units are Syms Clothing Inc. and Syms Advertising Inc.
Judge Kevin J. Carey presides over the case. Lawyers at Skadden
Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The
Debtors tapped Rothschild Inc. as investment banker and Cushman
and Wakefield Securities, Inc., as real estate financial advisors.
Syms shuttered its namesake and Filene's Basement outlets upon the
bankruptcy filing and tapped a joint venture of Gordon Brothers
Retail Partners LLC and Hilco Merchant Resources LLC to run the
going-out-of-business sales. The sale may continue until Jan. 31,
2012.
Filene's Basement estimated $1 million to $10 million in assets
and $50 million to $100 million in debts. The petitions were
signed by Gary Binkoski, authorized representative of Filene's
Basement.
The official committee of unsecured creditors appointed in the
2011 case has retained Hahn & Hessen LLP as legal counsel.
Holders of equity in Syms Corp. pushed for an official
shareholders' committee and separation of the Syms and Filene's
Basement bankruptcy estates.
Gordon Brothers and Hilco are represented by Goulston & Storrs,
P.C. and Ashby & Geddes, P.A.
THINKFILM INC: Bergstein Lost $269MM Due to Ex-Atty, Witness Says
-----------------------------------------------------------------
Zach Winnick at Bankruptcy Law360 reports that a consultant for
David Bergstein testified Wednesday that losses caused when his
former lawyer helped Aramid Entertainment Fund Ltd. put five of
his companies into involuntary bankruptcy totaled $269 million,
including $60 million he lost on the sale of Miramax Films.
Philip Fier, a former head of strategic planning for Sony Pictures
Entertainment Inc., told a Los Angeles jury Wednesday he has
reason to believe that Mr. Bergstein was central to The Walt
Disney Co.'s $660 million sale of Miramax to an investment group
in July 2010, Bankruptcy Law360 relates.
According to Bankruptcy Law360, former attorney for David
Bergstein testified Thursday that she felt threatened by the
Hollywood financier after she began collaborating with Aramid
Entertainment, which is accused of using confidential information
to force five of Bergstein's companies into involuntary
bankruptcy.
Bankruptcy Law360 relates that the revelation by Susan Tregub came
during an at-times contentious cross-examination by Bergstein's
attorney Lucia Coyoca of Mitchell Silberberg & Knupp LLP that
shined new light on Tregub and Bergstein's troubled relationship
in the months before and after her decision to work with Aramid.
About ThinkFilm LLC
CapCo Group LLC and four other companies controlled by David
Bergstein are part of a wider network of entities that distribute
and finance films. Among the approximately 1,300 films they have
the rights to are "Boondock Saints" and "The Wedding Planner."
Several creditors filed for involuntary Chapter 11 bankruptcy
against the companies on March 17, 2010 -- CT-1 Holdings LLC
(Bankr. C.D. Calif. Case No. 10-19927); CapCo Group, LLC (Bankr.
C.D. Calif. Case No. 10-19929); Capitol Films Development LLC
(Bankr. C.D. Calif. Case No. 10-19938); R2D2, LLC (Bankr. C.D.
Calif. Case No. 10-19924); and ThinkFilm LLC (Bankr. C.D. Calif.
Case No. 10-19912). Judge Barry Russell presides over the cases.
The Petitioners are represented by David L. Neale, Esq., at Levene
Neale Bender Rankin & Brill LLP.
Judge Barry Russell formally declared David Bergstein's ThinkFilm
LLC and Capitol Films Development bankrupt on Oct. 5, 2010.
Mr. Bergstein is being sued for tens of millions of dollars by
nearly 30 creditors -- including advertisers, publicists and the
Writers Guild West. Five Bergstein controlled companies have been
named in the suit.
UNISYS CORP: Moody's Rates New Sr. Notes 'B1'; Affirms 'B1' CFR
---------------------------------------------------------------
Moody's Investors Service rated Unisys Corp.'s $210 million of new
senior unsecured notes due 2017 at B1, upgraded the rating of the
senior unsecured notes due 2016 to B1 from B2, and affirmed the
Corporate Family Rating (CFR) at B1 and the senior secured rating
at Ba1. These actions follow Unisys' announcement that it will use
the proceeds of the new notes due 2017 to call the remaining
$183.1 million of 12.75% secured notes due 2014. Once the expected
redemption of the 12.75% secured notes is completed, Moody's
expects to withdraw the senior secured rating. Unisys's reported
debt will then consist solely of senior unsecured debt. The rating
outlook is stable.
Ratings Rationale
Supporting the B1 CFR are a diversified services portfolio which
includes a large Public Sector component, and a geographic mix in
which more than half of revenues are international. Profits will
be limited by a modest decline in top-line revenue over the near
term, yet Moody's does anticipate margins to remain fairly steady
with an operating margin in the 9% to 10% range. A significant
portion of free cash flow (FCF) is likely to be consumed by
substantial increase in contributions to the pension plans,
however. Although funded debt is modest, and likely to drop even
further, Unisys faces a significant underfunded pension liability
of nearly $2.1 billion ($1.6 billion for US plans).
The stable outlook reflects the expectation of Unisys' continuing
reduction of debt and stable operating performance, though free
cash flow will be strained by pension funding requirements. Given
the high cash balance relative to debt, the positive FCF, and
stated objective to reduce debt to $210 million by the end of
2013, Moody's expects the company will continue to reduce debt by
an additional $25 million over the next year. The stable outlook
also reflects Moody's expectation that Unisys will experience
revenue declines in the low single digits over the next year,
similar to other IT service companies, and will generate modest
profitability consistent with recent levels arising from a more
streamlined services portfolio.
The rating could be upgraded if Moody's believes that Unisys'
market position is improving, as indicated by revenue growth
exceeding that of the IT services industry, and Unisys were to
generate sustained operating margins of about 10%, improving free
cash flow, and a meaningful reduction in leverage - specifically,
Moody's adjusted debt to EBITDA, including underfunded pension
obligations, to less than 3.5x and free cash flow to debt of at
least 12% on a sustained basis.
The ratings could be lowered if Moody's believes that Unisys'
market position is eroding, as indicated by revenue growth lagging
that of the IT services industry, or if Moody's expects that
Unisys will be unable to generate sustained profitability and
positive free cash flow. The ratings could also be lowered if
Moody's expects additional sizable increases in the pension
funding requirement or if Unisys engages in large debt-funded
share repurchases or acquisitions such that debt to EBITDA
(standard adjustments) is expected to remain above 5.5x or FCF to
debt (standard adjustments) to remain below 2%.
The following rating was assigned:
Senior Notes due 2017 ($210 million) B1 (LGD4, 55%)
The following rating was upgraded
Senior Notes due 2016 ($110.6 million) to B1 (LGD4, 55%) from
B2 (LGD4, 59%)
The following ratings were affirmed:
Corporate Family Rating, B1
Probability of Default Rating, B1
Speculative Grade Liquidity, SGL-2
Senior Secured at Ba1
The principal methodology used in rating Unisys was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative Grade Issuers in the US, Canada, and EMEA,
published in June 2009.
Unisys, based in Blue Bell, Pennsylvania, provides information
technology (I/T) services and enterprise server hardware
worldwide. Unisys competes against similar-sized peers as well as
much larger I/T services and hardware vendors including IBM,
Accenture, Hewlett Packard, and a number of services providers
located in India, including Infosys and Tata Consultancy Services.
UNISYS CORP: S&P Gives 'BB-' Rating on $210MM Sr. Unsecured Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
unsecured rating and '3' recovery rating to Blue Bell, Pa.-based
Unisys Corp.'s proposed $210 million notes due 2017. "We also
revised the recovery rating on the company's existing senior
notes to '3' from '4' because of the redemption of all outstanding
secured notes and the lower total debt amount," S&P said.
"In addition, we affirmed the 'BB-' corporate credit rating on
Unisys. The outlook is stable," S&P said.
"Unisys will use the proceeds from the notes to redeem all
outstanding 12.75% notes due 2014. The company reported constant
currency revenue growth of 3% in the June 2012 quarter, improved
operating profitability, and the achievement of its debt reduction
goal (pro forma for recently announced redemptions)," S&P said.
"The ratings reflect our view that Unisys' moderately leveraged
financial profile and consistently positive annual discretionary
cash flow will provide sufficient cushion in the next 12 months to
mitigate modest total revenue growth and potential operating
performance volatility," said Standard & Poor's credit analyst
Martha Toll-Reed. "In our view, Unisys has a 'weak' business
risk profile and a 'significant' financial risk profile."
"The stable outlook reflects Unisys' improving revenue trends and
consistently positive annual free cash flow generation.
Vulnerability to an increase in postretirement liabilities, lack
of consistent revenue growth, and relatively volatile quarterly
operating performance currently preclude an upgrade. Failure to
maintain positive annual operating cash flow or total debt to
last-12-months' EBITDA in excess of the low-4x area could lead to
lower ratings," S&P said.
UNIVERSITY GENERAL: Reports $5.1 Million Net Income in 2nd Qtr.
---------------------------------------------------------------
University General Health Systems, Inc., filed with the U.S.
Securities and Exchange Commission its quarterly report on Form
10-Q disclosing net income attributable to the Company of $5.08
million on $29.07 million of total revenues for the three months
ended June 30, 2012, compared with a net loss attributable to the
Company of $227,736 on $17.88 million of total revenues for the
same period a year ago.
The Company reported net income attributable to the Company of
$5.57 million on $48.16 million of total revenues for the six
months ended June 30, 2012, compared with a net loss attributable
to the Company of $667,504 on $33.33 million of total revenues for
the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $127.52
million in total assets, $113.46 million in total liabilities and
$14.05 million in total equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/4jsJRr
About University General
University General Health System, Inc., located in Houston, Texas,
is a diversified, integrated multi-specialty health care provider
that delivers concierge physician- and patient-oriented services.
UGHS currently operateS one hospital and two ambulatory surgical
centers in the Houston area. It also owns a revenue management
company, a hospitality service provider and facility management
company, three senior living facilities and manages six senior
living facilities.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, Moss, Krusick &
Associates, LLC, in Winter Park, Florida, expressed substantial
doubt about University General's ability to continue as a going
concern. The independent auditors noted that the Company has
suffered recurring losses and negative operating cash flows, and
has negative working capital.
University General reported a net loss of $2.38 million in 2011,
following a net loss of $1.71 million in 2010.
USEC INC: Uranium Producer May Negotiate Restructuring
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that USEC Inc. said in a regulatory filing early this
month that it "may pursue discussions" with creditors about
"restructuring our balance sheet."
According to the report on Aug. 16, Standard & Poor's lowered the
corporate rating by one grade to CCC. The convertible notes due
2014 went to CC coupled with a guess by S&P that the holders won't
recover more than 10% following payment default. USEC also said
it may be forced to discontinue production at the plant in
Paducah, Kentucky, when an agreement to continue operations
expires in May 2013. The company's financial problems result in
part from declining demand after the 2011 earthquake and tsunami
in Japan, followed by the meltdown of the Fukushima reactors and a
shutdown of nuclear plants in Japan and Germany.
The report relates that the $530 million 3% senior unsecured
convertible notes due 2014 last traded on Aug. 16 for 43 cents on
the dollar, according to Trace, the bond-price reporting system of
the Financial Industry Regulatory Authority.
About USEC Inc.
Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) --
http://www.usec.com/-- supplies enriched uranium fuel for
commercial nuclear power plants.
The Company reported a net loss of $540.70 million in 2011,
compared with net income of $7.50 million in 2010.
* * *
USEC Inc. carries 'Caa1' corporate and probability of default
ratings, with "developing" outlook, from Moody's, and 'CCC+' long
term foreign issuer credit rating and 'CCC-' long term local
issuer credit rating, with outlook "developing", from Standard &
Poor's.
In May 2010, S&P said that its rating and outlook on USEC Inc. are
not affected by the announcement that Toshiba Corp. and Babcock &
Wilcox Investment Co., an affiliate of The Babcock & Wilcox Co.,
have signed a definitive investment agreement for $200 million
with USEC.
WILLDAN GROUP: Swings to $17 Million Net Loss in Second Quarter
---------------------------------------------------------------
Willdan Group, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of $17.0 million on $23.5 million of contract
revenue for the three months ended June 29, 2012, compared with
net income of $735,000 on $25.8 million of contract revenue for
the three months ended July 1, 2011.
For the six months ended June 29, 2012, the Company had a net loss
of $18.4 million on $48.9 million of contract revenue, compared
with net income of $444,000 on $48.6 million of contract revenue
for the six months ended July 1, 2011.
The net loss for the six months ended June 29, 2012, was impacted
significantly by the $15.2 million impairment charge the Company
recognized relating to the Company's Energy Efficiency Services
segment.
The Company's balance sheet at June 29, 2012, showed $46.3 million
in total assets, $30.2 million in total liabilities, and
shareholders' equity of $16.1 million.
According to the regulatory filing, as of June 29, 2012, the
Company had breached the net income covenant under the credit
agreement with Wells Fargo because the Company did not have net
income of at least $250,000 measured on a rolling four quarter
basis and it sustained net losses during the last two quarters.
Additionally, the Company's ratio of total funded debt to EBITDA
violated the limits permitted under the credit agreement.
"Because of these covenant breaches, our ability to borrow
additional funds under the credit agreement is currently subject
to Wells Fargo's discretion and Wells Fargo could choose to
increase the interest rate by 4.0%, make the loans outstanding
under the credit agreement immediately due and payable, and/or
terminate its commitments to us under the credit agreement.
Although we are seeking a waiver for these covenant breaches and
are seeking to amend certain covenants in the credit agreement,
Wells Fargo is not obligated to provide any waiver for current or
future covenant breaches or modify the terms of the credit
agreement."
"While we believe that our cash and cash equivalents on hand and
cash generated by operating activities will be sufficient to
finance our operating activities for at least the next 12 months,
if we do experience a cash flow shortage, we may have difficulty
obtaining additional funds on favorable terms, if at all, in order
to meet obligations as they come due in the normal course of
business."
A copy of the Form 10-Q is available for free at:
http://is.gd/tw1d6j
Anaheim, California-based Willdan Group, Inc., is a provider of
professional technical and consulting services to public agencies
at all levels of government, public and private utilities, and
commercial and industrial firms. It enables these entities to
provide a wide range of specialized services without having to
incur and maintain the overhead necessary to develop staffing in-
house.
YUKON-NEVADA GOLD: Had $8.3 Million Net Loss in Second Quarter
--------------------------------------------------------------
Yukon-Nevada Gold Corp. announced its financial and operational
results for the second quarter ended June 30, 2012.
"The Company recorded a loss of US$8.3 million in the second
quarter of 2012 compared to net income of US$22.9 million in the
second quarter of 2011. The 2011 second quarter net income
resulted from a US$36.6 million gain in the fair value of warrants
recorded as derivative liabilities, where the amount in the second
quarter of 2012 was a US$1.4 million loss. The gross loss in the
second quarter of 2012 was $3.1 million compared to a loss of
US$1.9 million in the three months ended June 30, 2011."
Gold sales in the second quarter of 2012 were US$36.4 million on
the sale of 24,073 ounces of gold from Jerritt Canyon, compared to
sales of US$28.3 million and 18,341 ounces for the same period in
2011. The increase results chiefly from the increase in the
production of ounces for sale, and also from an increase in the
average selling price from US$1,541 per ounce for the three months
ended June 30, 2011 to US$1,606 for the three months ended
June 30, 2012.
The Company's balance sheet at June 30, 2012, showed
US$346.9 million in total assets, US$261.3 in total liabilities,
and US$85.6 million in shareholders' equity.
The Company incurred a US$12.5 million loss from operations for
the six months ended June 30, 2012 (2011 - US$24.3 million), and a
US$10.8 million outflow of cash from operations for the same
period (2011 - US$33.7 million outflow). At June 30, 2012 the
Company had a working capital deficiency of US$60.1 million
(Dec. 31, 2011 - US$52.7 million) and an accumulated deficit of
US$375.1 million (Dec. 31, 2011 - $358.9 million).
As reported in the TCR on April 9, 2012, Deloitte & Touche LLP, in
Vancouver, Canada, said that the Company has incurred net losses
over the past several years and, as of Dec. 31, 2011, has a
working capital deficit in the amount of US$52.7 million and an
accumulated deficit of US$358.9 million. "These conditions
indicate the existence of material uncertainties that may cast
substantial doubt about the Company's ability to continue as a
going concern."
A copy of the press release is available for free at:
http://is.gd/A4y3b3
A copy of the Management's Discussion and Analysis for the three
and six month period ending June 30, 2012, is available for free
at http://is.gd/1Yfkbu
A copy of the Condensed Consolidated Interim Financial Statements
for the three and six months ended June 30, 2012, and 2011, is
available for free at http://is.gd/fNhH8B
Vancouver, Canada-based Yukon-Nevada Gold Corp. (TSX: YNG) (OTC
BB: YNGFF) (Frankfurt Xetra Exchange: NG6) is a North American
gold producer in the business of discovering, developing and
operating gold deposits. The Company holds a diverse portfolio of
gold, silver, zinc and copper properties in the Yukon Territory
and British Columbia in Canada and in Nevada in the United States.
The Company's focus has been on the acquisition and development of
late stage development and operating properties with gold as the
primary target. Continued growth will occur by increasing or
initiating production from the Company's existing properties.
ZEEKREWARDS.COM: SEC Shuts Down $600 Million Ponzi Scheme
---------------------------------------------------------
The Securities and Exchange Commission on Aug. 17 announced fraud
charges and an emergency asset freeze to halt a $600 million Ponzi
scheme on the verge of collapse. The emergency action assures
that victims can recoup more of their money and potentially avoid
devastating losses.
The SEC alleges that online marketer Paul Burks of Lexington, N.C.
and his company Rex Venture Group have raised money from more than
one million Internet customers nationwide and overseas through the
Web site ZeekRewards.com, which they began in January 2011.
According to the SEC's complaint filed in federal court in
Charlotte, N.C., customers were offered several ways to earn money
through the ZeekRewards program, two of which involved purchasing
securities in the form of investment contracts. The securities
offerings were not registered with the SEC as required under the
federal securities laws.
The SEC alleges that investors were collectively promised up to 50
percent of the company's daily net profits through a profit
sharing system in which they accumulate rewards points that they
can use for cash payouts. However, the Web site fraudulently
conveyed the false impression that the company was extremely
profitable when, in fact, the payouts to investors bore no
relation to the company's net profits. Most of ZeekRewards' total
revenues and the "net profits" paid to investors have been
comprised of funds received from new investors in classic Ponzi
scheme fashion.
"The obligations to investors drastically exceed the company's
cash on hand, which is why we need to step in quickly, salvage
whatever funds remain and ensure an orderly and fair payout to
investors," said Stephen Cohen, an Associate Director in the SEC's
Division of Enforcement. "ZeekRewards misused the power of the
Internet and lured investors by making them believe they were
getting an opportunity to cash in on the next big thing. In
reality, their cash was just going to the earlier investor."
The SEC's complaint alleges that the scheme is teetering on
collapse with investor funds at risk of dissipation without its
emergency enforcement action. Last month, ZeekRewards brought in
approximately $162 million while total investor cash payouts were
approximately $160 million. If customers continue to increasingly
elect to receive cash payouts rather than reinvesting their money
to reach higher levels of rewards points, ZeekRewards' cash
outflows would eventually exceed its total revenue.
Burks has agreed to settle the SEC's charges against him without
admitting or denying the allegations, and agreed to cooperate with
a court-appointed receiver.
According to the SEC's complaint, ZeekRewards has paid out nearly
$375 million to investors to date and holds approximately $225
million in investor funds in 15 foreign and domestic financial
institutions. Those funds will be frozen under the emergency
asset freeze granted by the court at the SEC's request.
Meanwhile, Burks has personally siphoned several million dollars
of investors' funds while operating Rex Venture and ZeekRewards,
and he distributed at least $1 million to family members. Burks
has agreed to relinquish his interest in the company and its
assets plus pay a $4 million penalty. Additionally, the court has
appointed a receiver to collect, marshal, manage and distribute
remaining assets for return to harmed investors.
The SEC's investigation was conducted by Brian M. Privor and
Alfred C. Tierney in the SEC's Enforcement Division in Washington
D.C. The SEC acknowledges the assistance of the Quebec Autorite
des Marches Financiers and the Ontario Securities Commission.
* Moody's Says Mid-Year US Not-for-Profit Sector Outlook Negative
-----------------------------------------------------------------
The US not-for-profit sector continues to carry a negative outlook
due to established risks as well as in response to developing
trends that have become more prominent since the beginning of the
year, says Moody's Investors Service in a mid-year outlook report,
"Not-for-Profit Healthcare Mid-Year 2012 Outlook: Strong Headwinds
Continue."
"The established risks facing the industry primarily result from
lower reimbursement levels that will come to fruition, with or
without federal healthcare reform, and are driven by the
unsustainable federal deficit and the rising share of federal
spending for Medicare and Medicaid," said Moody's AVP-Analyst
Daniel Steingart, author of the report, which also highlights
several developing risks that contribute to the negative outlook,
last updated in January.
"Most of the challenges we outlined in January are expected to
persist," said Mr. Steingart. "The economic recovery will remain
tepid, the transition to new payment methodologies will require
significant investment, revenue growth will remain low by
historical standards, and reimbursement will remain under pressure
from all sources."
The most notable development by mid-year was the US Supreme Court
decision that upheld the healthcare reform law, the Patient
Protection and Affordable Care Act (PPACA), including the
individual mandate to buy individual health insurance, which is
the primary credit positive aspect of the law.
"The court also ruled that that states may opt out of the Medicaid
expansion mandated by the law without penalty," said Mr.
Steingart. "By limiting the expansion of Medicaid coverage, the
ruling blunts the impact of one of the law's few credit positive
features."
Uncertainty regarding state participation in the Medicaid
expansion adds to the potential for political gridlock regarding
healthcare reform, says the rating agency report, making it
increasingly difficult for hospitals to perform adequate long-term
planning.
PPACA's mandated slowdown in Medicare funding remains as a
significant long-term negative credit factor facing the sector,
according to Moody's. November's election is another potential
hindrance to long-term planning as new leadership in Congress or
the White House could result in major changes, including a repeal
of healthcare reform.
Other emerging trends discussed in the report are growing
collaboration between hospitals and insurers and increasing
hospital employment of physicians. "Both trends are related to
reimbursement changes that all hospitals will experience under
federal healthcare reform, and the need to strive to maintain
market share," said Steingart.
Both strategies entail significant execution risk and may require
upfront capital, according to Moody's, which also expects federal
healthcare reform to continue driving merger and acquisition
activity as hospitals seek to create greater scale and revenue
diversity, as well as provide integrated care.
"All of these challenges emphasize the continued need for more
effective governance and management to adapt to a rapidly changing
industry and to execute various strategies," said Steingart.
* Moody's Says Liquidity-Stress Index Up 3.3% by Mid-August
-----------------------------------------------------------
Moody's Liquidity-Stress Index (LSI) rose slightly to 3.3% by mid-
August, up from the record-low 3.1% in July. The index remains at
a historically low level, signaling that speculative-grade
companies have adequate liquidity for the next year, says Moody's
Investors Service in its latest SGL Monitor.
Moody's proprietary Liquidity-Stress Index falls when corporate
liquidity appears to improve and rises when it appears to weaken.
"The low LSI reading is consistent with our view that the US
speculative-grade default rate will remain near its current low
level over the next year," said John Puchalla, a Moody's Vice
President -- Senior Credit Officer.
Moody's projects the default rate, which was 3.3% in July, will
rise to 4.0% in October, then decline to 3.1% by July 2013.
Moody's says that low borrowing costs and accessible markets are
supporting healthy speculative-grade liquidity. Some low-rated
companies could have trouble borrowing at affordable rates,
however, and contagion from the ongoing euro area debt crisis and
slowing economic growth remain risks to liquidity.
The SGL Monitor says that August is the second consecutive month
in which speculative-grade liquidity (SGL) rating downgrades have
outpaced upgrades, a trend that has predominated since July 2011.
The August downgrades reflect covenant pressures, reduced cash
levels, and weak revenue and EBITDA for the affected issuers,
rather than a broad decline in speculative-grade liquidity.
* No Big Rise in Liquidity Stress for Junk Companies
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports there won't be any spike in large-company bankruptcies
over the next year given that the liquidity-stress index compiled
by Moody's Investors Service rose only fractionally.
According to the report, by mid-August, the percentage of junk-
rated companies with the weakest liquidity had risen only to 3.3%
from the record low of 3.1% in July. Moody's predicts that the
default rate on junk debt will rise to 4% in October, up from 3.3%
in July, before dropping again to 3.1% in July 2013.
The report relates that Moody's said prices in the junk bond
market remain high, with the median yield in July at 6.6%, the
lowest since records were kept in 1991. The average median yield
since 1991 is 9.8%. While yields are low, the spread over seven-
year Treasury securities is above average. The spread currently is
564 basis points, compared with an historical average of 502 basis
points, Moody's said.
* Former Justice Souter Splits Circuits on Exemptions
-----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Court of Appeals in Boston joined an
existing split of circuits by ruling that a bankruptcy court can
impose a surcharge on exempt property when a trustee is unable to
recover property the debtor willfully concealed. Judge Souter
said "there could not be a clearer example of foiling an abuse of
process than a surcharge order mitigating the effect of fraud."
The case is Malley v. Agin, 11-2042, U.S. 1st Circuit Court of
Appeals (Boston).
* GOP Accuses DOE of Deception on Renewable Energy
--------------------------------------------------
Jeff Overley at Bankruptcy Law360 reports that House Republicans
on Tuesday accused Secretary of Energy Steven Chu of delivering
false information regarding loan guarantees for renewable-power
companies, some of which have gone bankrupt, and suggested his
subordinates may have illegally used personal email accounts to
duck congressional oversight.
Bankruptcy Law360 says the allegations were contained in a seven-
page letter to Chu, who is described as giving inaccurate answers,
potentially on purpose, during Capitol Hill testimony related to
political considerations surrounding government assistance for
green-energy firms.
* Barclays Leads Bankruptcy Financing Providers
-----------------------------------------------
Mara Lemos Stein, writing for Dow Jones' Daily Bankruptcy Review,
reports Barclays plc sits atop an unofficial league table of
bankruptcy financing providers, in part due to the $1.45 billion
DIP loan that the bank arranged for mortgage lender Residential
Capital LLC earlier this year.
According to DBR, Mark Shapiro, head of restructuring and
financing at the British bank, said putting together the complex
loan was possible because of Barclays's banking business breadth
and balance sheet depth. His team worked intensely with folks on
Barclays' securitization, conduit financing, leveraged finance and
equity analysis teams to dive into ResCap's bankruptcy intricacies
and seal the deal.
"Barclays is the new kid on the block in some ways. Since 2008,
the bank has built credibility in many different areas," including
restructuring, Mr. Shapiro said in a recent interview. "And we
aren't winning these deals because we're undercutting the
competition on price; we're winning because we know how to do
complicated deals and have been able to deliver for our clients."
Barclays was the sole provider of DIP financing in ResCap's
bankruptcy, which includes a $1.25 billion in term loan facilities
and a $200 million revolver. Barclays also served as co-lead
arranger of Patriot Coal Corp.'s $802 million DIP loan alongside
Citigroup and Merrill Lynch. Last year, Barclays was a joint lead
in the $600 million DIP loan for NewPage Corp.
Although the bank's advisory and restructuring practices have been
busy, DBR relates Mr. Shapiro expects to see only a "modest" level
of restructuring situations in coming months. Some of that action
will be in the energy and power sectors, as natural gas prices
remain low and compete with coal-powered plants.
* BOND PRICING -- For Week From Aug. 13 to 17, 2012
---------------------------------------------------
Company Coupon Maturity Bid Price
------- ------ -------- ---------
AMBAC INC 6.150 2/7/2087 1.490
AES EASTERN ENER 9.000 1/2/2017 15.500
AES EASTERN ENER 9.670 1/2/2029 9.500
AGY HOLDING COR 11.000 11/15/2014 43.000
AHERN RENTALS 9.250 8/15/2013 55.022
ALION SCIENCE 10.250 2/1/2015 61.280
ATP OIL & GAS 11.875 5/1/2015 29.625
ATP OIL & GAS 11.875 5/1/2015 28.500
ATP OIL & GAS 11.875 5/1/2015 28.500
BAC-CALL09/12 6.000 9/15/2026 100.000
BAC-CALL09/12 5.650 9/15/2029 100.000
BETHEL BAPTIST 7.900 7/21/2026 11.000
BUFFALO THUNDER 9.375 12/15/2014 35.500
DIRECTBUY HLDG 12.000 2/1/2017 18.000
DIRECTBUY HLDG 12.000 2/1/2017 18.000
NGC CORP CAP TR 8.316 6/1/2027 14.000
EDISON MISSION 7.500 6/15/2013 54.876
EASTMAN KODAK CO 7.250 11/15/2013 15.000
EASTMAN KODAK CO 7.000 4/1/2017 16.200
EASTMAN KODAK CO 9.950 7/1/2018 23.354
EASTMAN KODAK CO 9.200 6/1/2021 19.678
ENERGY CONVERS 3.000 6/15/2013 43.000
GLB AVTN HLDG IN 14.000 8/15/2013 30.000
GMX RESOURCES 5.000 2/1/2013 70.000
GMX RESOURCES 4.500 5/1/2015 38.000
GEOKINETICS HLDG 9.750 12/15/2014 49.000
GLOBALSTAR INC 5.750 4/1/2028 45.250
HAWKER BEECHCRAF 8.500 4/1/2015 16.500
HAWKER BEECHCRAF 8.875 4/1/2015 17.250
HAWKER BEECHCRAF 9.750 4/1/2017 1.000
JAMES RIVER COAL 4.500 12/1/2015 34.900
KV PHARM 12.000 3/15/2015 31.000
KV PHARMA 2.500 5/16/2033 3.563
KELLWOOD CO 7.625 10/15/2017 29.200
LEHMAN BROS HLDG 1.500 3/29/2013 22.500
LEHMAN BROS HLDG 1.000 10/17/2013 22.500
LEHMAN BROS HLDG 0.250 12/12/2013 22.500
LEHMAN BROS HLDG 0.250 1/26/2014 22.500
LEHMAN BROS HLDG 1.250 2/6/2014 22.500
LEHMAN BROS HLDG 1.000 3/29/2014 22.500
LEHMAN BROS HLDG 1.000 8/17/2014 22.500
LEHMAN BROS HLDG 1.000 8/17/2014 24.250
LEHMAN BROS INC 7.500 8/1/2026 7.550
LIFECARE HOLDING 9.250 8/15/2013 52.000
LVLT-CALL09/12 8.750 2/15/2017 104.375
MASHANTUCKET PEQ 8.500 11/15/2015 10.171
MASHANTUCKET PEQ 8.500 11/15/2015 8.250
MASHANTUCKET TRB 5.912 9/1/2021 9.250
MF GLOBAL LTD 9.000 6/20/2038 39.900
MANNKIND CORP 3.750 12/15/2013 62.000
MGIC INVT CORP 9.000 4/1/2063 19.646
NEWPAGE CORP 10.000 5/1/2012 7.000
PATRIOT COAL 3.250 5/31/2013 9.900
PMI GROUP INC 6.000 9/15/2016 21.660
PMI CAPITAL I 8.309 2/1/2027 0.500
PENSON WORLDWIDE 8.000 6/1/2014 36.472
POWERWAVE TECH 3.875 10/1/2027 8.000
POWERWAVE TECH 3.875 10/1/2027 10.944
REAL MEX RESTAUR 14.000 1/1/2013 46.450
RESIDENTIAL CAP 6.500 4/17/2013 23.250
RESIDENTIAL CAP 6.875 6/30/2015 20.500
S-CALL08/12 6.875 10/31/2013 100.100
SAVIENT PHARMA 4.750 2/1/2018 25.000
THORNBURG MTG 8.000 5/15/2013 7.600
TRAVELPORT LLC 11.875 9/1/2016 36.500
TRAVELPORT LLC 11.875 9/1/2016 38.125
TIMES MIRROR CO 7.250 3/1/2013 34.475
TRIBUNE CO 5.250 8/15/2015 33.000
TERRESTAR NETWOR 6.500 6/15/2014 10.000
TEXAS COMP/TCEH 10.250 11/1/2015 28.125
TEXAS COMP/TCEH 10.250 11/1/2015 29.000
TEXAS COMP/TCEH 10.250 11/1/2015 27.004
TEXAS COMP/TCEH 15.000 4/1/2021 37.750
TEXAS COMP/TCEH 15.000 4/1/2021 35.125
USEC INC 3.000 10/1/2014 43.500
WCI COMMUNITIES 4.000 8/5/2023 0.125
WCI COMMUNITIES 4.000 8/5/2023 0.125
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
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however, be complete or accurate. The Monday Bond Pricing table
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then-ending.
For copies of court documents filed in the District of Delaware,
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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
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
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Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
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