/raid1/www/Hosts/bankrupt/TCR_Public/121002.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, October 2, 2012, Vol. 16, No. 274
Headlines
10-16 MANHATTAN: Plan of Reorganization Declared Effective
1555 WABASH: Hearing on Case Dismissal Scheduled for Oct. 17
30DC INC: Delays Fiscal 2012 Annual Report on Form 10-K
ACADIA HEALTHCARE: S&P Affirms 'B' Corp. Credit Rating
ACTIGA CORP: Delays June 30 Quarterly Report on Form 10-Q
ADVANCEPIERRE: Moody's Affirms B2 CFR; Rates 2nd Lien Loan Caa1
AGAPE WORLD: Meister Seelig Settles Suit Over $413MM Scheme
ALLEGHENY COUNTY: S&P Puts 'B-' Rating on $737-Mil. Bonds on Watch
ALLY FINANCIAL: Int'l Operations Draw Interest from GM, Banks
AMERICAN AIRLINES: Has Sale-Leaseback Deal With Avolon
AMERICAN AIRLINES: Has More Time to Reject 34 Contracts
AMERICAN AIRLINES: M&T Fails in Bid on Guaranty Claims
AMERICAN AIRLINES: 20% of Weil, Others' Fees Still Held Back
AMERICAN AIRLINES: Won't Pay for Ad Hoc Retirees Group's Fees
AMERICAN AIRLINES: Proposes Grant Thornton as Consultant
AMERICAN AIRLINES: Pilots Demonstrate at LaGuardia Airport
AMERICAN REALTY: Files Schedules of Assets and Liabilities
AMERITRANS CAPITAL: Rosen Seymour Raises Going Concern Doubt
ARCAPITA BANK: Sr. Mgt. Global Settlement Hearing Reset to Nov. 15
ARCAPITA BANK: Conferences Scheduled Tuesday Adjourned to Oct. 9
ARCAPITA BANK: Arranges $150-Mil. Financing From Silver Point
ATP OIL: Obtains Add'l $25-Mil. Loans Under Amended DIP Agreement
AUTOS VEGA: Bankruptcy Court Confirms Plan of Reorganization
AVANTAIR INC: Incurs $8 Million Net Loss in Fiscal 2012
AVENTINE RENEWABLE: Completes Out-of-Court Restructuring
BASIC ENERGY: S&P Affirms 'B+' Corp. Credit Rating; Outlook Pos
BENADA ALUMINUM: Files Schedules of Assets and Liabilities
BESO LLC: Fights Bid to Convert Case to Chapter 7
BEXAR COUNTY: Moody's Affirms Ba2 Rating on Housing Rev. Bonds
BIOZONE PHARMACEUTICALS: Amends Q2 Form 10-Q to Adjust Accounting
BIOZONE PHARMACEUTICALS: Amends 8.3-Mil. Shares Resale Prospectus
BLAST ENERGY: Acquires Additional Interest in Niobrara Play
BLUEGREEN CORP: OKs Non-Termination of BFC Pact Until Dec. 31
BON TON: Receivables Addition No Impact on Moody's 'Caa1' Ratings
BUFFALO GULF: S&P Gives 'BB+' Rating on $275-Mil. Term Loan
CAPTAIN'S ON LONG LAKE: In Receivership, Ex-Owner Running Business
CDC CORP: Insurer Says Policy Doesn't Cover CDC in PE Firm Row
CELL THERAPEUTICS: Estimates $4.3 Million Net Loss for August
CHECKOUT HOLDING: S&P Cuts CCR to 'B' on Weaker Operating Trends
CLEAR CHANNEL: Bank Debt Trades at 18% Off in Secondary Market
CLEARWIRE CORP: Time Warner to Offer 46.4MM Class A Common Shares
COMMUNITY HOME: Hearing on Examiner Appointment Set for Today
CORDILLERA GOLF: Club Owner Settles With Membership
CORNERSTONE BANCSHARES: Still Needs to Seek OK for Dividends
CUBIC ENERGY: Incurs $12.5 Million Net Loss in Fiscal 2012
DAVE & BUSTER'S: S&P Puts 'B-' CCR on Watch Pos on Parent's IPO
DAVID'S BRIDAL: S&P Affirms 'B' Corp. Credit Rating; Off Watch
DBP HOLDING: Moody's Assigns 'B3' Corp. Family Rating
DELTEK INC: Moody's Assigns 'B3' Corp. Family Rating
DEWEY & LEBOEUF: Ex-Client Files Complaint for Turnover of Funds
DEWEY & LEBOEUF: Has Until Nov. 4 to Access Cash Collateral
DEWEY & LEBOEUF: Ex-Partners Committee Objects to Canellas Bonus
DEWEY & LEBOEUF: U.S. Trustee, Ex-Partners Object to Bonus Plan
DEX MEDIA WEST: Bank Debt Trades at 35% Off in Secondary Market
DIGITAL DOMAIN: Charles H. Johnson Files Securities Class Action
DIGITAL DOMAIN: Rosen Law Firm Files Securities Class Action
DIGITAL DOMAIN: Pomerantz Law Firm Has Filed a Class Action
DIGITAL DOMAIN: Taps Pachulski Stang, 2 Others as Attorneys
DRIVE THIS!: Files for Ch.11; Shutters Lynyrd Skynyrd Restaurant
DUNE ENERGY: Inks 1st Amendment to Bank of Montreal Credit Pact
DYNEGY INC: To List 100 Million Shares in IPO This Week
DYNEGY HOLDINGS: Court OKs Deal to Resolve Breach of Contract Suit
DYNEGY POWER: S&P Affirms 'CCC+' Corp. Credit Rating; Outlook Pos
EASTMAN KODAK: Seeks Plan Filing Exclusivity Until Feb. 28
EASTMAN KODAK: To Wind Down Sales of Consumer Inkjet Printers
EDMUND F. WARY: Hawaii Court Confirms 2nd Amended Plan
ELPIDA MEMORY: Pledges U.S. Patents to Apple for Supply Deal
ENERGY CONVERSION: Liquidation Trustee Balks at Case Closure
ESCALON MEDICAL: Had $5.9 Million Net Loss in Fiscal 2012
EXECUTIVE CENTER: Court OKs CBRE's Perry as Real Estate Broker
EXECUTIVE CENTER: Can Use Cash Collateral Until Dec. 1
FIBERTOWER CORP: Scraps Restructuring; Assets to be Auctioned
FIBERTOWER CORP: Cole Schotz OK'd as Committee's Local Counsel
FIBERTOWER CORP: Taps Hogan Lovells on Spectrum Licenses
FIBERTOWER CORP: Taps Willkie Farr as FCC Regulatory Counsel
FIRST AMERICAN: Moody's Lowers Corp. Family Rating to 'B2'
FIRST QUANTUM: Moody's Assigns 'Ba3' Corp. Family Rating
FIRST SECURITY: Fails to Comply with $5-Mil. Market Value Rule
FIRST UNITED: Closed; Old Plank Trail Community Assumes Deposits
FONAR CORP: Reports $6.8 Million Net Income in Fiscal 2012
FOREVERGREEN WORLDWIDE: Had $38,700 Net Loss in Second Quarter
FREEDOM ENVIRONMENTAL: Chap. 11 Case Closed; Receiver Appointed
FREIF NORTH AMERICAN: S&P Rates $33 Million Term Loan 'BB-'
FTLL ROBOVAULT: Florida Storage Facility Files for Chapter 11
FULLER BRUSH: Wants to Hire GCG, Inc. as Administrative Agent
GAMETECH INTERNATIONAL: Competitor Yuri Itkis Buys Business
GATEHOUSE MEDIA: Bank Debt Trades at 68% Off in Secondary Market
GCA SERVICES: Moody's Assigns 'B2' CFR/PDR; Outlook Stable
GCA SERVICES: S&P Gives 'B' Corp. Credit Rating; Outlook Stable
GENERAL MOTORS: Creditors' Lawsuit Could Cost $918 Million
GENWORTH MORTGAGE: Moody's 'Ba1' IFS Rating Remains Under Review
GETTY IMAGES: Moody's Lowers Corporate Family Rating to 'B2'
GETTY IMAGES: S&P Cuts CCR to 'B' on Higher Debt Levels; Off Watch
GREEN EARTH: Incurs $11.3 Million Net Loss in Fiscal 2012
HAMPTON ROADS: CapGen Capital Discloses 30% Equity Stake
HAMPTON ROADS: Carlyle Group Discloses 24.9% Equity Stake
HAMPTON ROADS: Raises $45MM Add'l Capital from Rights Offering
HAMPTON ROADS: Anchorage Advisors Discloses 24.9% Equity Stake
HAWKER BEECHCRAFT: FCA Claims Not Dischargeable, Relators Say
HAWKER BEECHCRAFT: Bank Debt Trades at 34% Off in Secondary Market
HAWKER BEECHCRAFT: Facing Bid to Pursue Case Over False Claims Act
HERITAGE CONSOLIDATED: Court Approves Barg & Henson as Accountant
HOUSING AND ECONOMIC: Judge Encouraged by Progress in Receivership
HUNTER DEFENSE: Moody's Affirms 'B2' CFR; Outlook Negative
HYPERTENSION DIAGNOSTICS: Has $1.3-Mil. Net Loss in Fiscal 2012
IMPLANT SCIENCES: Marcum LLP Raises Going Concern Doubt
IMPLANT SCIENCES: Incurs $14.6 Million Net Loss in Fiscal 2012
INDYMAC BANCORP: Former CEO Settles SEC Lawsuit for $80,000
INNER CITY: Former Officer Wants Chapter 11 Trustee Appointed
INNER CITY: Has Until Oct. 19 to Propose Chapter 11 Plan
INNKEEPERS USA: Court Closes Chapter 11 Reorganization Case
INOVA TECHNOLOGY: Amends 375 Million Common Shares Prospectus
INTEGRATED BIOPHARMA: Delays Fiscal 2012 Annual Report
INTERNATIONAL AUTOMOTIVE: S&P Affirms 'B+' Corporate Credit Rating
INTERNATIONAL HOME: First Bank Wants Examiner Appointed
JACKSONVILLE BANCORP: Sells 5,000 Preferred Shares to CapGen
JACKSONVILLE BANCORP: CapGen Capital Discloses 45.6% Equity Stake
JAMES DRISCOLL: Court Stays Great American's Indemnity Suit
JAMES MEIS: Loses Bid to Avoid Wells Fargo Lien
KEY ENERGY: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Pos
LA PALOMA GENERATING: S&P Affirms 'B' Rating on Sr. Secured Debt
LANDMARK MEDICAL: Steward Health Withdraws Bid to Buy Firm
LEHMAN BROTHERS: Seeks Approval of Settlement With IRS
LEHMAN BROTHERS: Court OKs Substantial Contribution Payments
LEHMAN BROTHERS: Giants Stadium Demands Documents on Swaps
LEHMAN BROTHERS: Files $4.4-Mil. Lawsuit Against Unipol Banca
LENDER PROCESSING: Moody's Rates $600MM Sr. Unsecured Notes Ba2
LENDER PROCESSING: S&P Rates Senior Unsecured Notes 'BB+'
LIQUIDMETAL TECHNOLOGIES: Amends 36.8 Million Shares Prospectus
LODGENET INTERACTIVE: Mark Cuban Lowers Equity Stake to 3.6%
LODGENET INTERACTIVE: Fails to Comply with Market Value Rule
LODGENET INTERACTIVE: Mark Cuban Discloses 6.6% Equity Stake
LON MORRIS COLLEGE: Closed Lon Morris College Prepares for Auction
LOUISIANA RIVERBOAT: Gets Final OK to Hire KCC as Claims Agent
LOUISIANA RIVERBOAT: Gets Final OK to Use Cash Collateral
LYNYRD SKYNYRD: Files for Chapter 11 Bankruptcy
MARQUETTE TRANSPORTATION: S&P Affirms 'B' Corp. Credit Rating
MERCY MEDICAL: S&P Cuts Series 2000 Revenue Bond Rating to 'BB'
MERITOR INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable
METRO FUEL: Files for Chapter 11 Reorganization
MISSION NEWENERGY: Had A$21.7-Mil. Net Loss in Fiscal 2011
NATIONAL MENTOR: Moody's Says Facilities Repricing Credit Pos.
NATIONAL MENTOR: S&P Retains 'B+' Rating on $550MM Term Loan
NATIONAL RESERVE: Fitch Lowers Issuer Default Rating to 'B-'
NET ELEMENT: Kenges Rakishev Plans to Invest $23.4MM in Cazador
NIP COMPANY: Chapter 11 Trustee Hiring Stutzman as Counsel
NIP COMPANY: Chapter 11 Trustee Taps Lain Faulkner as Accountant
NORANDA ALUMINUM: S&P Cuts Corp. Credit Rating to 'B'; Off Watch
NORTHLAKE FOODS: Dismissal of Suit Against Stephens Affirmed
NORTHLAKE FOODS: Trustee Loses Clawback Suit Against McGarrity
ODYSSEY PICTURES: Delays Form 10-K for Fiscal 2012
OMNICOMM SYSTEMS: To Issue 7.5MM Shares Under Incentive Plan
PATRIOT COAL: Rigrodsky & Long Files Fraud Class Action Lawsuit
PATRIOT COAL: Howard G. Smith Starts Investigation
PATRIOT COAL: Ryan & Maniskas Announces Class Action Lawsuit
PATRIOT COAL: Hearing on Equity Committee Motion Reset to Dec. 11
PATRIOT COAL: Committee Taps Mesirow as Accounting Advisors
PATRIOT COAL: Committee Hiring Houlihan Lokey as Financial Advisor
PATRIOT COAL: Committee Taps Epiq Bankruptcy as Information Agent
PATRIOT COAL: Wants Removal Period Extended to Oct. 9
PATRIOT COAL: Asks Limited Stay Re: W.V. Court Envtl. Proceedings
PATRIOT COAL: Wants Dec. 14 Deadline for Filing of Proof of Claim
PROGRESSIVE WASTE: S&P Affirms 'BB+' Corporate Credit Rating
PROMETRIC INC: Moody's Withdraws 'Ba2' Corporate Family Rating
REALOGY CORP: S&P Puts 'CCC' CCR on Watch Positive on IPO Plan
RESIDENTIAL CAPITAL: Begins Plan Negotiations With Creditors
RESIDENTIAL CAPITAL: Objections Filed to Fortress-Led Auction
RESIDENTIAL CAPITAL: RMBS Deal Not on Schedule; Objections Filed
RESIDENTIAL CAPITAL: Committee Pursues Claims vs. US Bank, et al.
RESIDENTIAL CAPITAL: Committee Opposes $250-Mil. of PwC Fees
RESIDENTIAL CAPITAL: Opposes Formation of Borrowers' Committee
SILVERLEAF RESORTS: S&P Gives 'B-' Rating on $175MM Secured Notes
SOUTHEASTERN REGIONAL: S&P Cuts Rating on Series 2002 Bonds to 'D'
SOUTHERN AIR: Blames Declining Government Business for Bankruptcy
SOUTHERN AIR: Case Summary & 30 Largest Unsecured Creditors
SPORTSMAN'S LINK: Former Owner Loses Legal Malpractice Suit
ST PETER'S UNIV: Moody's Lowers Outstanding Debt Rating to 'Ba1'
TRI-VALLEY: Financing Ready for Final Court Approval
WAVE2WAVE COMMUNICATIONS: Sold to Secured Lenders' Affiliate
WEST PENN: Fitch Places 'B+' Rating on Rating Watch Negative
WEST PENN: Moody's Reviews 'Caa1' Bond Rating for Downgrade
* Bankruptcy Auctions Go Online in Bid to Boost Cash for Creditors
* Large Companies With Insolvent Balance Sheets
*********
10-16 MANHATTAN: Plan of Reorganization Declared Effective
----------------------------------------------------------
10-16 Manhattan Avenue, LLC, et al., notified the U.S. Bankruptcy
Court for the Southern District of New York that the Effective
Date of their Second Amended Plan of Reorganization occurred on
Aug. 30, 2012.
The Court confirmed the Plan and gave final approval of the
Disclosure Statement at the same hearing.
The Plan dated July 31, 2012, provides that the confirmation of
the Plan will constitute the Bankruptcy Court's approval of the
Debtors' assumption of a settlement agreement pursuant to Section
365 of the Bankruptcy Code.
On the Effective Date, DG UWS SUB LLC or a party acting on its
behalf will fund the Plan.
The Plan provides for these terms, among other things:
* As payment of DG UWS SUB LLC, holder of claims for loans in
the amount of $228,004,752, the Debtor will convey to DG or
a designee title to the Debtors' properties;
* Claims of Bruce Lederman, receiver of the properties, in his
administration and operation of the Debtors' properties
prepetition, will be paid in full, plus interest to the
extent required by law, in cash remaining from the operation
of the Debtors' properties.
* Holders of general unsecured claims will receive cash on the
Effective Date or as soon as practicable thereafter in the
full amount of the allowed claims, plus interest to the
extent required by law.
* The "fee recipient", which will be PMM Associates D-FXD
LLC's designee, will receive on account of all Allowed
Equity Interests payment from DG in the amount of
$4.2 million, subject to reduction and holdback as provided
for in the Settlement Agreement or under the Plan.
A copy of the Amended Disclosure Statement is available for free
at http://bankrupt.com/misc/10-16_MAN_ds_2amended.pdf
About 10-16 Manhattan Avenue
10-16 Manhattan Avenue LLC and 32 other entities, which own
residential apartment buildings in Manhattan, filed Chapter 11
bankruptcy petitions in Manhattan (Bankr. S.D.N.Y. Case Nos.
12-12261, 12-12264 to 12-12295) on May 24, 2012. The Debtors are
owned by Praedium Fund VI, L.P. and Pinnacle Management Co. LLC.
Each Debtor claims to be a Single Asset Real Estate as defined in
11 U.S.C. Sec. 101(51B) and owns a residential apartment building
that largely consists of rent-controlled and rent-stabilized
apartments. The sole and managing member for each Debtor is PMM
Associates D-FXD LLC.
The Properties primarily are located in the Manhattan Valley
section of Manhattan in the low 100's on Riverside Drive and near
Central Park West. The Debtors purchased the Properties in 2005.
Judge Allan L. Gropper presides over the case. Sanford P. Rosen,
Esq., and Nancy Lynne Kourland, Esq., at Rosen & Associates, P.C.,
serve as the Debtors' counsel.
Each Debtor's chapter 11 petition and corresponding schedules and
statement of financial affairs reflects an estimated fair market
value of the properties of $119 million; however, the value of the
Properties may be as high as $140 million, according to a court
filing. The Debtors owe lender DG UWS Sub LLC $192.1 million in
principal plus $37.7 million in unpaid interest. The Debtor
disclosed $7,160,877 in assets and $229,871,250 in liabilities as
of the Chapter 11 filing.
The Debtor's Pre-Negotiated Plan, included terms of the Settlement
Agreement which provides that (a) the Debtors will transfer,
subject to the Mortgage and all of the Properties' residential
leases, all of their title to and interest in each of the
Properties to a "buyer" designated by DG and (b) release DG,
Bluestar, and each of DG's designated buyers from all claims that
the Debtors have or could have asserted against them.
1555 WABASH: Hearing on Case Dismissal Scheduled for Oct. 17
------------------------------------------------------------
The U.S. Bankruptcy for the Northern District of Illinois
continued until Oct. 17, 2012, at 10:30 a.m., the hearing to
consider request to dismiss the Chapter 11 case of 1555 Wabash
LLC.
As reported in the Troubled Company Reporter on July 12, 2012,
lender AMT CADC Venture, LLC, asked the Court to dismiss the case
or, in the alternative, grant relief from the automatic stay to
pursue the foreclosure proceeding against the Debtor.
The lender said that that from the moment lender notified the
Debtor of its intent to foreclose on the $46 million loan it made
to Debtor for the development of a fourteen-story mixed use
building located at 1555 S. Wabash, Chicago, Illinois, the Debtor
has used every avenue possible to siphon cash from the property to
its owners and insiders. "The property is hopelessly underwater,
with a market value of roughly $30 million and secured debt to
Lender of more than $43 million (in addition to a junior mortgage
holder owed more than $9 million)," the lender said.
The Debtor is owned and controlled by New West Realty Development
Corp. New West is owned and controlled by Theodore Mazola and
August Mauro. The lender claimed that two days after the lender
notified Debtor and the Principals that the Lender was commencing
its foreclosure remedies with respect to the property, the Debtor
"funneled more than $160,000 to New West by 'washing' it through
the property homeowners' association, which the principals
control. Beginning the very next month, the principals utilized
the Debtor to pay themselves, and two other principals, $35,000
per month to compensate themselves for, in Mazola's words,
'interviewing attorneys, not only for foreclosure, but then for
the bankruptcy, choosing attorneys, negotiating'."
The lender intervened in a state court mechanic's lien action to
protect its interests against mechanic's lien claimants who had
not been paid by the Debtor. The Lender filed a motion for the
appointment of a receiver. "The Debtor requested time to file
briefs in opposition to the receiver's appointment, but its intent
to delay the proceedings became apparent when it filed no briefs.
The day the motion to appoint the receiver was to be argued,
Debtor strategically presented a motion for substitution of judge,
again delaying the receiver's appointment. Four months after
Lender filed its motion, Circuit Court Judge Lisa Curcio denied
the Debtor's request for yet another briefing schedule and granted
Lender's motion for the appointment of a receiver to manage the
Property," the Lender states.
On Dec. 26, 2011, the Debtor paid principal salaries totaling
$30,500 for January 2012, but didn't pay taxes. The next day,
before the receiver had posted the required bond, the Debtor
initiated this proceeding. As of Dec. 27, 2011, the Debtor's
indebtedness to the Lender was approximately $43,200,000. Between
July 2011, when Lender first notified Debtor of Lender's intent to
pursue available remedies on the defaulted loan, and the Petition
Date, the Debtor siphoned more than $600,000 from the Property and
into the hands of the Principals and the various companies they
own, all purportedly for fees, expenses, commissions and salaries.
The Lender says that while a substantial amount of money was
washed through the HOA under the guise of reimbursement of
previously-paid expenses: (1) Debtor fell short on its obligations
to the HOA by more than $200,000 (and owed the HOA more than
$700,000 in past-due assessments); (2) Debtor failed to make any
payments to Lender on its loan, despite accruing more than $1.3
million in interest during that time period; and (3) the Property
and its residents suffered. The condominium homeowners described
the conditions at the Property, as, among other things: concrete
crumbling from the ceiling of the parking structure.
About 1555 Wabash
1555 Wabash LLC owns and operates a 14-story mixed use building
located at 1555 South Wabash, in Chicago, Illinois. The property
is comprised of 176 residential units plus 11,000 square feet of
commercial space located on the first floor of the building. The
property was originally developed as condominium units to be sold
at designated sale prices to qualified buyers. Construction
was generally completed as of the middle of 2009. Only 36 of the
100 sale contracts closed. As of the Petition Date, 1555 Wabash
leased 115 of the remaining 140 residential apartment units --
roughly 82% -- to qualified tenants, while the commercial space is
presently vacant.
1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill.
Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the
property. Judge Jacqueline P. Cox oversees the case. David K.
Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the
Debtor's counsel. The Debtor scheduled $90,055 in personal
property and said the current value if its condo building is
unknown. The Debtor disclosed $51.6 million in liabilities. The
petition was signed by Theodore Mazola, president of New West
Realty Development Corp., sole member and manager of the Debtor.
An agreed order signed by the bankruptcy judge on Aug. 31 extends
until Oct. 28, the Debtor's exclusive period to propose a plan and
until Dec. 13, the exclusive solicitation period.
30DC INC: Delays Fiscal 2012 Annual Report on Form 10-K
-------------------------------------------------------
30DC, Inc., was unable, without unreasonable effort and expense,
to prepare its accounting records and schedules in sufficient time
to allow its accountants to complete their review of its financial
statements for the period ended June 30, 2012, before the
required filing date. The Company intends to file the subject
Annual Report on Form 10-K on or before the 15th calendar day
following the prescribed due date.
About 30DC Inc.
New York-based 30DC, Inc., provides Internet marketing services
and related training to help Internet companies in operating their
businesses. It operates in two divisions, 30 Day Challenge and
Immediate Edge.
The Company reported a net loss of $1.44 million for the fiscal
year ended June 30, 2011, following a net loss of $1.06 million in
fiscal 2010.
As reported in the TCR on Dec. 19, 2011, Marcum LLP, in New York,
expressed substantial doubt about 30DC's ability to continue as a
going concern, following the Company's results for the fiscal year
ended June 30, 2011. The independent auditors noted that the
Company has had recurring losses, and has a working capital and
stockholders' deficiency as of June 30, 2011.
The Company's balance sheet at March 31, 2012, showed $1.82
million in total assets, $2.21 million in total liabilities and a
$394,450 total stockholders' deficiency.
The Company said in its quarterly report for the period ending
March 31, 2012, that if it is unable to raise additional capital
or encounters unforeseen circumstances, it may be required to take
additional measures to conserve liquidity, which could include,
but not necessarily be limited to, issuance of additional shares
of the Company's stock to settle operating liabilities which would
dilute existing shareholders, curtailing its operations,
suspending the pursuit of its business plan and controlling
overhead expenses. The Company cannot provide any assurance that
new financing will be available to it on commercially acceptable
terms, if at all. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
ACADIA HEALTHCARE: S&P Affirms 'B' Corp. Credit Rating
------------------------------------------------------
Standard & Poor's Rating Services revised its outlook on Franklin,
Tenn.-based Acadia Healthcare Co. Inc. to positive from stable.
"We also affirmed our 'B' corporate credit rating on the company,"
S&P said.
"The outlook revision is based on the expectation that management
will improve profitability and free operating cash flow (FOCF),
and maintain leverage below 5x while executing its aggressive
acquisition strategy," said Standard & Poor's credit analyst
Tahira Wright.
"The unsecured notes issue level rating is 'B-' (one notch below
the corporate credit rating). The recovery rating is '5',
indicating our expectation of modest (10%-30%) recovery of
principal in the event of payment default. The company has $155
million of outstanding term debt and a $75 million revolver, which
we do not rate," S&P said.
The ratings on Acadia reflects its "weak" business risk and
"aggressive" financial risk profiles. The weak business risk
profile incorporates the operating and integration challenges
Acadia faces due to its rapidly expanding business and its
exposure to uncertain third-party reimbursement. "The aggressive
financial risk reflects our expectation that acquisition-related
debt will likely keep leverage between 4x-5x over the next year.
Acadia acquires and develops in-patient behavioral health care
facilities that include acute in-patient psychiatric facilities,
residential treatment care, and other behavioral health care
operations," S&P said.
"Our rating outlook on Acadia is positive, reflecting our
expectation that management will be able to control a fast-growing
organization while improving margins. Given the company's
ambitious growth strategy, we expect Acadia's financial risk
profile to remain aggressive. An upgrade could be possible if
the company can generate FOCF of $25 million or more in 2013,
maintain or improve margins, and operate with leverage below 5x,
and we believe these metrics will be maintained," S&P said.
"We could revise the outlook back to stable if Acadia makes a
major debt-financed acquisition that causes debt leverage to peak
above 5.5x, with the likelihood that it will be sustained above
5.0x, supporting a 'highly leveraged' financial risk profile. We
could also revise the outlook to stable if operations are stifled
by significant reimbursement cuts, or the failed integration of
recently acquired operations results in an EBITDA decline of more
than 400 bps. This would result in credit metrics supportive of a
highly leveraged financial risk profile. This will also stifle our
expectation of generating FOCF of around $25 million in 2013," S&P
said.
ACTIGA CORP: Delays June 30 Quarterly Report on Form 10-Q
---------------------------------------------------------
Deal a Day Group Corp., formerly Actiga Corp, informed the U.S.
Securities and Exchange Commission it could not complete the
filing of its quarterly report on Form 10-Q for the period ended
June 30, 2012, due to a delay in obtaining and compiling
information required to be included in the Company's Form 10-Q,
which delay could not be eliminated without unreasonable effort
and expense. In accordance with Rule 12b-25 of the Securities
Exchange Act of 1934, as amended, the Company will file its Form
10-Q no later than the fifth calendar day following the prescribed
due date.
About Actiga Corporation
Based in Riverside, California, Actiga Corporation (OTCBB: AGAC)
-- http://www.qmotions.com/-- terminated its dog day care
services after it merged with QMotions Inc. on Jan. 14, 2008. The
company currently develops, manufactures, distributes, markets and
sells motion-based controllers for video games and Online video
games.
As of October 2008, the company has exhausted its available cash.
The company has scaled down its workforce to a few key employees,
who have also agreed to accept stock compensation in lieu of
payroll. The company has minimized its operations in order to
conserve its working capital.
In 2009, the Company filed with the SEC a Form 15 notifying of its
suspension of its duty under Section 15(d) to file reports
required by Section 13(a) of the Securities Exchange Act of 1934
with respect to its common stock. There were only 36 holders of
the common shares as of June 19, 2009.
On June 14, 2012, Deal a Day filed with the SEC a Form 10-12G
registering the Company's common stock, par value $0.001. The
authorized capital stock of the Company consists of 1,800,000,000
shares of common stock and consists of $0.001 par value per share.
As of June 14, the Company had 49,396,421 shares of Common Stock
outstanding. The Company has not authorized any shares of
preferred stock.
Deal a Day reported a net loss of $360,602 in 2011, compared with
a net loss of $342,107 in 2010.
The Company's balance sheet at March 31, 2012, showed $10,415 in
total assets, $1.78 million in total liabilities and a $1.77
million total stockholders' deficit.
Silberstein Ungar, PLLC, in Silberstein Ungar, PLLC, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2011. The independent
auditors noted that the Company has negative working capital, has
incurred losses from operations, and has recently discontinued its
primary operations and announced a new business model. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
ADVANCEPIERRE: Moody's Affirms B2 CFR; Rates 2nd Lien Loan Caa1
---------------------------------------------------------------
Moody's Investors Service has assigned a Caa1 to AdvancePierre's
("APF") proposed $350 million second lien term loan. The proposed
second lien term loan replaces the originally proposed unsecured
notes. Concurrently, Moody's affirmed all of APF's long-term
ratings, including the B2 Corporate Family Rating and B1on the
proposed $925 million (upsized from $825 million) first lien term
loan. The rating outlook is stable.
The following rating has been assigned (rating is subject to
review of final documentation):
Caa1 (LGD6, 90%) to the proposed $350 million second lien term
loan due 2017.
The following ratings have been affirmed:
Corporate family rating ("CFR") at B2;
Probability of default rating at B2;
B1 (LGD3, 44% from 40%) on the proposed $925 million (upsized from
$825 million) first lien term loan due 2017; and
B1 (LGD3, 45%) on the existing $835 million term loan due 2016.
The following rating has been withdrawn:
Caa1 (LGD5, 87%) on the proposed $450 million senior unsecured
notes due 2017.
The ratings on the existing $835 million term loan due 2016 will
be withdrawn upon completion of the refinancing.
Rating Rationale
The B1 rating on the $925 million first lien term loan reflects
its seniority in the capital structure relative to the second lien
term loan, as well as its junior position versus the proposed $150
million ABL's first-priority interest in the current assets of
APF. The Caa1 rating on the $350 million second lien term loan
reflects its second lien on assets securing the proposed first
lien term loan and third lien on the current assets securing the
ABL. All instruments are expected to benefit from upstream
guarantees from each domestic subsidiary. The term loans are not
expected to be subject to financial maintenance covenants.
APF's B2 corporate family rating reflects Moody's view that its
financial policies with regard to shareholder-friendly activities,
acquisitions and leverage are aggressive. The company's leverage,
over 6.5x proforma for the dividend on a Moody's adjusted basis,
is viewed as high given its exposure to volatile raw material
costs and seasonal working capital borrowing needs. The rating
reflects Moody's view that cash generation should improve going
forward as integration and restructuring costs and high capital
spending requirements following the merger with Advance Foods and
Advance Brands in 2010 and acquisition of Barber Foods in 2011
subside and efficiencies increasingly benefit earnings. The rating
positively reflects APF's operating scale, diversity of product
offerings and sales channels, modest customer diversification, and
its proven ability to pass along increased raw material costs
through price lists or contractual agreements with customers.
Leverage maintained above 6.0x for an extended period would not be
viewed as consistent with the current rating level. A ratings
downgrade could occur if leverage is not reduced below 6.0x or if
ABL availability were to be meaningfully reduced over the next
twelve months. The ratings could be upgraded if APF is successful
in reducing debt while remaining free cash flow positive and
maintaining full ABL availability. Moody's would expect debt-to-
EBITDA to be sustainable around 4.5x prior to any ratings upgrade.
The principal methodology used in rating AdvancePierre Foods, 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.
AdvancePierre Foods, Inc. (APF), headquartered in Cincinnati, OH,
is a producer and marketer of value-added protein and hand-held
convenience items serving the foodservice, retail and convenience
and vending store channels. Key products include packaged
sandwiches, fully-cooked burgers, philly steaks, stuffed chicken
breasts and country fried chicken. Oaktree Capital Management LP
(Oaktree) has owned the company since Pierre Foods, Inc. emerged
from bankruptcy in 2008. Net sales for the twelve months ending
June 2012 were approximately $1.5 billion.
AGAPE WORLD: Meister Seelig Settles Suit Over $413MM Scheme
-----------------------------------------------------------
Carolina Bolado at Bankruptcy Law360 reports that the trustee
overseeing the liquidation of "mini-Madoff" Nicholas Cosmo's
company on Thursday said he had settled a clawback suit accusing
law firm Meister Seelig & Fein LLP of helping to cover up Cosmo's
$413 million Ponzi scheme.
In a letter to the Eastern District of New York, the law firm said
it had agreed to pay $90,000 to the Agape World Inc. estate to
settle the clawback suit, which initially requested $620,725,
according to court documents obtained by Bankruptcy Law360.
About Agape World
Hauppauge-based Agape World Inc. -- http://www.agapeworldinc.net/
-- is a private bridge lender since 1999.
As reported by the Troubled Company Reporter on Feb. 16, 2009,
the Hon. Dorothy Eisenberg of the U.S. Bankruptcy Court for the
Eastern District of New York approved investors' Agape World Inc.
of petition to put the company into Chapter 7 bankruptcy
protection.
Agape World Group Incorporated filed for Chapter 11 protection
(Bankr. N.D. Texas Case No. 09-43308) on June 1, 2009.
Warren V. Norred, Esq., of Norred Legal, represents the Debtor.
The Debtor disclosed $6,243,000 in assets and $3,000,692 in
liabilities.
ALLEGHENY COUNTY: S&P Puts 'B-' Rating on $737-Mil. Bonds on Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services has placed on CreditWatch with
negative implications its 'B-' rating on $737 million series 2007A
bonds issued by Allegheny County Hospital Development Authority
for West Penn Allegheny Health System (WPAHS).
"The CreditWatch placement reflects uncertainty about the future
of the affiliation agreement between WPAHS and Highmark Inc. in
light of WPAHS' press release earlier ," said Standard & Poor's
credit analyst Cynthia Keller.
WPAHS signed an affiliation agreement Oct. 31, 2011 with Highmark
Inc. (A/Stable) which, if approved, would have moved WPAHS and
Highmark under a new single parent corporation. The agreement also
outlined a time line for distributing $475 million of support to
WPAHS, $200 million of which has already been received in the form
of grants ($100 million) and loans ($100 million).
"We believe we could lower the rating to the 'CCC' category
although results of the 2012 audit and interim period financials
will be critical to our decision as the most recent financial
information available is from March 2012. We expect to make a
decision about WPAHS' bond rating before calendar year end based
on additional information," S&P said.
ALLY FINANCIAL: Int'l Operations Draw Interest from GM, Banks
-------------------------------------------------------------
American Bankruptcy Institute, citing Reuters, reports that Ally
Financial Inc's international operations have drawn interest from
more than 15 bidders, including banks and General Motors Co.
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3% stake. Private equity firm Cerberus Capital
Management LP keeps 14.9%, while General Motors Co. owns 6.7%.
Ally reported a net loss of $157 million in 2011, compared with
net income of $1.07 billion in 2010. Net income was $310 million
for the three months ended March 31, 2012.
The Company's balance sheet at June 30, 2012, showed $178.56
billion in total assets, $160.19 billion in total liabilities and
$18.36 billion in total equity.
* * *
In February 2012, Fitch Ratings downgraded the long-term Issuer
Default Rating (IDR) and the senior unsecured debt rating of Ally
Financial and its subsidiaries to 'BB-' from 'BB'. The Rating
Outlook is Negative. The downgrade primarily reflects
deteriorating operating trends in ResCap, which has continued to
be a drag on Ally's consolidated credit profile, as well as
exposure to contingent mortgage-related rep and warranty and
litigation issues tied to ResCap, which could potentially impact
Ally's capital and liquidity levels.
As reported by the TCR on May 22, 2012, Standard & Poor's Ratings
Services revised its outlook on Ally Financial Inc. to positive
from stable. At the same time, Standard & Poor's affirmed its
ratings, including its 'B+' long-term counterparty credit and 'C'
short-term ratings, on Ally. "The outlook revision reflects our
view of potentially favorable implications for Ally's credit
profile arising from measures the company announced May 14, 2012,
designed to resolve issues relating to Residential Capital LLC,
Ally's troubled mortgage subsidiary," said Standard & Poor's
credit analyst Tom Connell.
In the May 28, 2012, edition of the TCR, DBRS, Inc., has placed
the ratings of Ally Financial Inc. and certain related
subsidiaries, including its Issuer and Long-Term Debt rating of BB
(low), Under Review Developing. This rating action follows the
decision by Ally's wholly owned mortgage subsidiary, Residential
Capital, LLC (ResCap) to file a pre- packaged bankruptcy plan
under Chapter 11 of the U.S. Bankruptcy Code.
AMERICAN AIRLINES: Has Sale-Leaseback Deal With Avolon
------------------------------------------------------
American Airlines Inc. seeks court approval to purchase five
Boeing 737-800 aircraft and one Boeing 777-300 aircraft from The
Boeing Co.
The company also seeks court approval to implement a sale and
simultaneous leaseback of the aircraft with Avolon Aerospace
Leasing Ltd.
The aircraft are scheduled to be delivered to American Airlines
between November 2012 and March 2013, according to the court
filing. American Airlines did not disclose the purchase price
for the aircraft in the motion, which it filed under seal to
protect confidential information.
A court hearing to consider approval of the request is scheduled
for Oct. 9. Objections are due by October 2.
Court Approves Boeing Aircraft Purchase
In a related development, Judge Sean Lane gave American Airlines
the go-signal to purchase two Boeing 777-300 aircraft from Boeing
and to implement a sale and simultaneous leaseback of the
aircraft with Guggenheim Aviation Partners LLC.
In a separate order, the bankruptcy judge authorized American
Airlines to purchase a Boeing 737-823 aircraft bearing U.S.
Registration No. N903NN from the same company. It also permitted
the airline to enter into agreements with International Lease
Finance Corp. in connection with the sale and leaseback of the
aircraft.
About AMR Corp.
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Has More Time to Reject 34 Contracts
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave AMR Corp. additional time to decide on whether to assume or
reject 34 contracts. Most of the contracts are leases for non-
residential real properties, which American Airlines Inc. and
American Eagle Airlines Inc. entered into with airport
authorities and other parties. A list of the contracts is
available for free at:
http://bankrupt.com/misc/AMR_34Contracts092012.pdf
About AMR Corp.
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: M&T Fails in Bid on Guaranty Claims
------------------------------------------------------
Judge Sean Lane denied the request by Manufacturers and Traders
Trust Co. and Marathon Asset Management LP to implement
preliminary procedures for the adjudication of guaranty-related
claims tied with special facilities revenue bond transactions
involving AMR Corp. and its affiliated debtors.
M&T, an indenture for the special facility bonds, has asked the
Court to compel the Debtors to object to so-called guaranty
claims by Oct. 30. The Debtors, however, countered by arguing
that no one creditor has the right to mandate the order in which a
bankrupt company chooses to object to thousands of filed claims,
Bloomberg News related.
Bloomberg said Judge Lane agreed with AMR and declined to force
immediate commencement of an objection to claims on the bonds.
About AMR Corp.
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: 20% of Weil, Others' Fees Still Held Back
------------------------------------------------------------
Judge Sean Lane approved the interim fee applications filed by 17
AMR Corp. lawyers and advisers for the period Nov. 29, 2011
to March 31, 2012. For the period, a total of $45,799,320 for
fees and $1,818,251 for expenses were requested by the bankruptcy
professionals.
In a Sept. 21 order, the bankruptcy judge ruled that no portion of
the original 20% holdback of the fees requested by Weil, Gotshal &
Manges LLP and 12 other firms should be paid to the firms until
further court order.
The 12 firms are Brinks Hofer Gilson & Lione, Deloitte Consulting
LLP, Ernst & Young LLP, Groom Law Group Chartered, Haynes and
Boone LLP, McKinsey Recovery & Transformation Services U.S. LLC,
Mesirow Financial Consulting LLC, Moelis & Company LLC, Paul
Hastings LLP, Rothschild Inc., Skadden Arps Slate Meagher & Flom
LLP, and Togut Segal & Segal LLP.
Judge Lane also ordered that the payment of 20% of fees awarded
to Sheppard, Mullin, Richter and Hampton LLP, and the payment of
10% of fees awarded to The Boston Consulting Group Inc., Epiq
Bankruptcy Solutions LLC, and GCG Inc. will continue to be held-
back until further court order.
Meanwhile, Bain & Company, Inc. and Perella Weinberg Partners LP
will each be awarded 100% of fees and expenses on a final basis
without any amounts held-back.
The amount of fees and expenses awarded to each of the AMR
bankruptcy professionals is detailed in the schedules
accompanying the court order, which can be accessed for free at
http://bankrupt.com/misc/AMR_Fees112911to033112.pdf
E&Y, Morgan File Fee Applications
Separately, Ernst & Young LLP and Morgan Lewis & Bockius filed
interim fee applications for allowance of fees and reimbursement
of expenses:
Professional Period Fees Expenses
------------ ------ -------- --------
Ernst & Young LLP 04/01/12 to $1,663,796 $22,159
07/31/12
Morgan, Lewis & Bockius LLP 04/01/12 to $939,007 $72,104
07/31/12
Another firm, Brinks Hofer Gilson & Lione, filed a monthly fee
statement for allowance of $56,080 in fees and reimbursement of
$47,555 in expenses for August 2012.
About AMR Corp.
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Won't Pay for Ad Hoc Retirees Group's Fees
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
denied AMR Retirees Pension Protection Corp.'s application for
payment of fees and expenses.
ARPPC, a group formed by AMR pensioners who were not members of
any union, had said it should be paid for its "substantial
contribution" in the company's bankruptcy case. The group
claimed it was involved in the formation of the committee
representing AMR Corp.'s retired workers.
The application drew flak from AMR, the committee of unsecured
creditors and the U.S. Trustee, a Justice Department agency that
oversees bankruptcy cases. They argued that the group failed to
show that it made a substantial contribution to the AMR estate.
About AMR Corp.
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Proposes Grant Thornton as Consultant
--------------------------------------------------------
AMR Corp. and its affiliated debtors asked Judge Sean Lane to
approve the hiring of Grant Thornton LLP as its consultant.
The firm will provide valuation services, which include research
and data gathering and the estimation of fair values of certain
assets and liabilities. It will also assist AMR in the
identification of assets and liabilities requiring opinions of
fair value.
Grant Thornton will be paid on an hourly basis and will be
reimbursed for its work-related expenses. The hourly rates are:
Professionals Hourly Rates
------------- ------------
Partner & Managing Director $510
Director $485
Senior Manager $400
Manager $335
Senior Associate $255
Associate $215
The firm does not hold or represent interest adverse to AMR
estates, and is a "disinterested person" under Section 101(14) of
the Bankruptcy Code, according to a declaration by Joseph
DiSalvatore, managing director at Grant Thornton.
About AMR Corp.
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN AIRLINES: Pilots Demonstrate at LaGuardia Airport
----------------------------------------------------------
The Allied Pilots Association (APA) representing the 10,000 pilots
who fly for American Airlines scheduled another public
demonstration signifying American Airlines' pilots determination
to secure a contract commensurate with their status as
professional aviators for a major U.S. carrier. The demonstration
was held Monday at LaGuardia Airport, main terminal, upper-level
departure area.
American Airlines management recently received bankruptcy court
approval to reject the APA-American Airlines Collective Bargaining
Agreement. Management is now unilaterally implementing new terms
of employment that adversely affect pilots' working conditions,
compensation and retirement security. APA believes management is
using Chapter 11 bankruptcy to extract far more value from the
pilots than what's needed to successfully restructure American
Airlines.
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 REALTY: Files Schedules of Assets and Liabilities
----------------------------------------------------------
American Realty Trust, Inc. filed with the U.S. Bankruptcy Court
for the Northern District of Georgia its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $87,884
B. Personal Property $79,866,667
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $0
E. Creditors Holding
Unsecured Priority
Claims $10,701
F. Creditors Holding
Unsecured Non-priority
Claims $84,503,044
----------- -----------
TOTAL $79,954,551 $84,513,746
A copy of the schedules is available for free at
http://bankrupt.com/misc/AMERICAN_REALTY_sal.pdf
Dallas, Texas-based American Realty Trust, Inc., is a subsidiary
of the real estate giant American Realty Investors Inc. coping
with a $73 million legal judgment from an apartment purchase that
collapsed more than a decade ago. American Realty Trust, Inc.,
previously filed for Chapter 11 protection (Bankr. D. Nev. Case
No. 12-10883) in Las Vegas on Jan. 26, 2012. The case was later
dismissed. Creditors David M. Clapper, Atlantic XIII, LLC, and
Atlantic Midwest, LLC, sought the dismissal, citing, among other
things, the Debtor has been stripped of assets prepetition and its
ownership structure changed 10 days before the bankruptcy filing
in an admitted effort to avoid disclosures to the Securities and
Exchange Commission.
The Debtors filed for Chapter 11 protection (Bankr. N.D. Ga. Case
No. 12-71453) on Aug. 29, 2012. Bankruptcy Judge Barbara Ellis-
Monro presides over the case. Bryan E. Bates, Esq., and Gary W.
Marsh, Esq. at McKenna Long & Aldridge, LLP represents the Debtor
in its restructuring effort. The petition was signed by Steven A.
Shelley, vice president.
AMERITRANS CAPITAL: Rosen Seymour Raises Going Concern Doubt
------------------------------------------------------------
Ameritrans Capital Corporation filed on Sept. 28, 2012, its annual
report on Form 10-K for the fiscal year ended June 30, 2012.
Rosen Seymour Shapss Martin & Company LLP, in New York City,
expressed substantial doubt about Ameritrans' ability to continue
as a going concern. The independent auditors noted that the the
Company's cash resources will not be sufficient to sustain its
operations through 2013 without additional financing. "The
Company has also suffered recurring operating losses and negative
cash flows from operations."
The Company reported a net decrease in net assets of $5.5 million
on $2.1 million of total investment income in fiscal 2012,
compared with a net decrease in net assets of $5.8 million on
$2.1 million of total investment income in fiscal 2011.
The Company's balance sheet at June 30, 2012, showed $18.9 million
in total assets, $22.5 million in total liabilities and a net
asset deficiency of $3.6 million.
A copy of the Form 10-K is available at http://is.gd/vjOhFI
Jericho, New York-based Ameritrans Capital Corporation is a
Delaware closed-end investment company formed in 1998, which makes
loans and investments with the goal of generating both current
income and capital appreciation. Through its wholly-owned
subsidiary, Elk Associates Funding Corporation, the Company makes
loans to finance the acquisition and operation of small businesses
as permitted by U.S. Small Business Administration (the "SBA")
regulations. Elk Capital Corporation is a wholly owned subsidiary
of Ameritrans. From time-to-time, Elk Capital holds title to
assets acquired in satisfaction of loans.
Both Ameritrans and Elk Associates are registered as business
development companies under the Investment Company Act of 1940, as
amended.
ARCAPITA BANK: Sr. Mgt. Global Settlement Hearing Reset to Nov. 15
------------------------------------------------------------------
As reported in the TCR on Sept. 24, 2012, Arcapita Bank B.S.C.(c),
et al., asked the U.S. Bankruptcy Court for the Southern District
of New York for authorization to implement the Senior Management
Global Settlement of claims between Arcapita Group and six members
of senior management.
To participate in the Senior Management Global Settlement, a
participating Senior Manager must agree to forgo his statutory and
contractual notice and severance pay in return for a combined
capped four-month notice and severance payment and release the
Arcapita Group from any additional claims and causes of action.
In addition, the Debtors propose to further condition Senior
Management's participation on the Senior Management Global
Settlement on a key, definitive Milestone: the filing of an
Eligible Plan by the Debtors by Dec. 15, 2012.
A hearing on the motion was scheduled for Oct. 9, 2012, at 2:00
p.m. This hearing has been reset for Nov. 15, 2012 at 11:00 a.m.
The objection deadline is Nov. 2, 2012, at 4:00 p.m.
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: Conferences Scheduled Tuesday Adjourned to Oct. 9
----------------------------------------------------------------
Status conferences previously scheduled for hearing on Oct. 2,
2012, at 11:00 a.m. in the Chapter 11 cases of Arcapita
Bank B.S.C.(c), et al., have been adjourned. These are:
1. Status Conference re: Tide's Motion for an Order Lifting the
Automatic Stay Pursuant to 11 U.S.C. Sec. 362(d) to Allow
Continuance of District Court Actions.
2. Status Conference re: Adversary Proceeding Number 12-01662,
Hopper v. Falcon Gas Storage Company, Inc.
The hearing on the adjourned matters will resume on Oct. 9, 2012
at 2:00 p.m.
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: Arranges $150-Mil. Financing From Silver Point
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Arcapita Bank BSC, a Bahrainian investment bank, is
on the cusp of landing Silver Point Finance LLC as the lender to
provide $150 million in financing for the bankruptcy
reorganization begun in March.
According to the report, Arcapita filed papers last week in U.S.
Bankruptcy Court in Manhattan for permission to pay Greenwich,
Connecticut-based Silver Point a $2.25 million commitment fee. If
approved by the bankruptcy judge at an Oct. 9 hearing, the fee
won't be paid until Silver Point waives the right to perform
further investigation and secures approval from its own credit
committee. The loan, to mature in March, would have a lien on
Arcapita assets ahead of security interest of existing lenders.
The report relates that Arcapita has the right to accept an
unsolicited financing proposal from another lender. In that
event, Silver Point would be paid a $1.25 million breakup fee.
The report notes that Silver Point's loan is to bear interest at
10.5 percentage points higher than the London interbank offered
rate. Libor may be no less than 2%. The loan will be compliant
with Islamic Shariah financing regulations. Last month, Arcapita
received court approval to pay Silver Point as much as $500,000 in
expense reimbursement given the complexity of Shariah financing
and the lack of precedent for Islamic lending in a Chapter 11
case.
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 had 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.
ATP OIL: Obtains Add'l $25-Mil. Loans Under Amended DIP Agreement
-----------------------------------------------------------------
ATP Oil & Gas Corporation previously entered into a Senior Secured
Super Priority Priming Debtor in Possession Credit Agreement with
the lenders, Credit Suisse AG, as the administrative agent and
collateral agent, and Credit Suisse Securities (USA) LLC, as the
sole bookrunner and sole lead arranger.
On Sept. 21, 2012, the Company, the Lenders and the Agent amended
the DIP Credit Agreement and obtained approval from the Bankruptcy
Court for the amendment. The material amendments to the DIP
Credit Agreement include the following:
* Certain Lenders will make an additional $25,000,000 in loans
available to the Company to be used in accordance with an
approved budget but only if certain conditions are met.
* The interest rate on all Loans under the DIP Credit Agreement
will be increased by .50% per annum, and that interest will
be paid in kind upon maturity or payment in full of the
Loans. For Qualified Lenders under the DIP Credit Agreement
who agree to extend Additional Loans in their respective pro
rata amounts, the interest on their respective outstanding
loans will increase 2.00% per annum, and that interest will
be paid in kind upon maturity or payment in full of the
Loans. Additionally, an exit fee of 1.00% per annum will be
payable on all loans and commitments (other than the
Additional Loans) of all Qualified Lenders who commit to
provide at least their respective pro rata shares of the
Additional Loans. For each Qualified Lender that agrees to
provide an Additional Loan, the Company will also pay a
closing fee equal to 2.00% per annum of the amount of that
Lender's commitment for an Additional Loan. The 4.25% unused
commitment fee will also apply.
* The DIP Credit Agreement provides that the Chief
Restructuring Officer must approve all capital expenditures
and investments over $1,000,000. Also, conditions are added
that require (i) in the event of the termination, death or
disability of the CRO, the Company file an application to
retain a replacement CRO and seek an expedited hearing within
10 days of that termination, death or disability, and (ii)
the Bankruptcy Court enter an order approving the retention
within 30 days or that termination, death or disability,
otherwise an event of default will occur.
* The deletion of the Satisfactory APE Report for the funding
of the Subsequent Clipper Project Amount (in the aggregate
principal amount of $30,000,000) and the Final Clipper
Project Amount (in the aggregate principal amount of
$80,000,000).
* The funding date of the Final DIP Budget Amount was advanced
from Dec. 15, 2012, to Nov. 15, 2012, and the conditions to
funding requiring the commercial operation of the Clipper
Project and the three consecutive day production rate were
deleted.
* The funding of the Additional DIP Budget Amount in the
aggregate principal amount of $30,000,000 (which was formerly
called the Gomez #9 Project Amount), was advanced from
Feb. 13, 2013, to Jan. 13, 2013, and the condition to funding
requiring a satisfactory production volume test at the
Clipper Project was revised to reduce the testing period from
60 days to 15 days.
* The Company has an additional 15 days to enter into Commodity
Arrangements satisfactory to the Agent and the Required
Lenders.
* If the Company does not deliver to the Agent and the Lenders
a Satisfactory APE by Oct. 31, 2012, or if by Nov. 15, 2012,
the conditions to the Final DIP Budget Availability Date have
not been met, then the Company will be required to meet a new
set of milestones, and funding under the DIP Budget will be
limited only to the amounts allowing the Company to continue
in operation, and to fund the Clipper expenditures. The
milestones include, among other things, the preparation of a
data room as early as 20 days after, and the filing of a sale
motion with the Bankruptcy Court as early as 60 days after,
non-compliance with the conditions above.
A copy of the amended DIP Agreement is available for free at:
http://is.gd/BMH3zU
About ATP Oil
Houston, Tex.-based ATP Oil & Gas Corporation is an international
offshore oil and gas development and production company focused
in the Gulf of Mexico, Mediterranean Sea and North Sea.
ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case
No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP,
serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is
the conflicts counsel. Opportune LLP is the financial advisor
and Jefferies & Company is the investment banker. Kurtzman
Carson Consultants LLC is the claims and notice agent.
ATP disclosed assets of $3.6 billion and $3.5 billion of
liabilities as of March 31, 2012. Debt includes $365 million on a
first-lien loan where Credit Suisse AG serves as agent. There is
$1.5 billion on second-lien notes with Bank of New York Mellon
Trust Co. as agent. ATP's other debt includes $35 million on
convertible notes and $23.4 million owing to third parties for
their shares of production revenue. Trade suppliers have claims
for $147 million, ATP said in a court filing.
ATP reported a net loss of $145.1 million in the first quarter
on revenue of $146.6 million. Income from operations in the
quarter was $11.8 million. For 2011, the net loss was
$210.5 million on revenue of $687.2 million.
An official committee of unsecured creditors has been appointed in
the case.
AUTOS VEGA: Bankruptcy Court Confirms Plan of Reorganization
------------------------------------------------------------
Autos Vega Inc. has a confirmed Plan of Reorganization dated
Jan. 30, 2012, and supplemented on April 9, 2012, which provides
for the continued payment of monthly interest payments to Reliable
Finance Company.
According to the Plan, holders of allowed general unsecured claims
estimated at $1,675,770 will be paid in full satisfaction of the
claims an estimated dividend of 43% on or before the Effective
Date or on or before 30 days after the claim is allowed by a final
order, from the remaining balance from the $1,100,000 carve out
agreed to with Reliable for the payment of administrative
expenses. The shares of the equity interest holders in the Debtor
will be retained thereby unaffected.
Copies of the Plan and the supplement is available for free at
http://bankrupt.com/misc/AUTOS_VEGA_plan.pdf
http://bankrupt.com/misc/AUTOS_VEGA_plansupp.pdf
About Autos Vega
Autos Vega, Inc., is a car dealership engaged in the sales of new
and used cars and trucks car parts, accessories and providing
vehicle repair and maintenance, based in San Juan, Puerto Rico.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
P.R. Case No. 11-05773) on July 6, 2011. The Debtor disclosed
US$22,959,296 in assets and US$34,224,323 in liabilities.
The Charles A. Curpill, PSC Law Office, in San Juan, Puerto Rico,
serves as counsel to the Debtor. Luis R. Carrasquillo Ruiz, CPA,
is the Debtor's accountant.
Affiliate Euroclass Motors, Inc. filed for Chapter 11 protection
(Bankr. D. P.R. Case No. 11-05772) on July 6, 2011.
AVANTAIR INC: Incurs $8 Million Net Loss in Fiscal 2012
-------------------------------------------------------
Avantair, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss
attributable to common stockholders of $8.04 million on
$173.98 million of total revenue for the year ended June 30, 2012,
compared with a net loss of attributable to common stockholders of
$13.64 million on $163.89 million of total revenue for the year
ended June 30, 2011.
Avantair reported a net loss attributable to common stockholders
of $2.61 million on $42.47 million of total revenue for the three
months ended June 30, 2012, compared with a net loss attributable
to common stockholders of $1.91 million on $44.36 million of total
revenue for the same period a year ago.
The Company's balance sheet at June 30, 2012, showed $91.28
million in total assets, $129.83 million in total liabilities,
$14.79 million in Series A convertible preferred stock, and a
$53.34 million total stockholders' deficit.
Steven Santo, chief executive officer of Avantair said, "During
fiscal 2012, we undertook a series of cost saving initiatives,
which together with higher revenue, helped to reduce our net loss
by 46% from the prior year. We realize there is still much work
to do and we are focused on reducing our costs without impacting
safety and customer service, the company's highest priorities."
Stephen Wagman, President of Avantair said, "Today's filing of our
Form 10-K includes the restated financials for fiscal year 2011
and the quarters in fiscal years 2011 and 2012. I am confident
the measures taken to address the underlying causes of the
restatements in our earlier financial statements were completed
prior to today's filing. Our Adjusted EBITDA for Q4 2012 and
fiscal 2012 includes a one-time charge of $1.0 million for a
change in estimate related to the treatment of pilot training
costs. This charge is not an add-back to our Adjusted EBITDA."
A copy of the Form 10-K is available for free at:
http://is.gd/68KUUv
About Avantair Inc.
Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR)
-- http://www.avantair.com/-- sells fractional ownership
interests in, and flight hour card usage of, professionally
piloted aircraft for personal and business use, and the management
of its aircraft fleet. According to AvData, Avantair is the fifth
largest company in the North American fractional aircraft
industry.
Avantair also operates fixed flight based operations (FBO) in
Camarillo, California and in Caldwell, New Jersey. Through these
FBOs and its headquarters in Clearwater, Florida, Avantair
provides aircraft maintenance, concierge and other services to its
customers as well as to the Avantair fleet.
AVENTINE RENEWABLE: Completes Out-of-Court Restructuring
--------------------------------------------------------
Aventine Renewable Energy Holdings, Inc., has closed the
transactions contemplated by the Aug. 17, 2012, Restructuring
Agreement it had entered into with 100% of its term loan lenders
and holders of approximately 60% of its common stock. As a result
of these transactions, the Company converted approximately $132
million of its outstanding term loan debt into 2,186,298 newly
issued shares of common stock of the Company, which represents
approximately 92.5% of the Company's currently issued and
outstanding shares on a fully diluted basis.
As part of the transactions, the term loan lenders provided $30
million in the form of additional indebtedness to further improve
the Company's liquidity. Following the closing, the Company
expects to issue new five-year warrants to purchase 787,855 shares
of its common stock at an exercise price of $61.75 per share to
each holder of its issued and outstanding shares of common stock
(other than in respect of the shares issued to the term loan
lenders).
"This transaction significantly strengthens the Company's balance
sheet, substantially reduces our cash interest obligations and the
improved liquidity enhances the Company's ability to manage
through this protracted low margin environment," said John Castle,
Aventine's chief executive officer.
Q1 Form 10-Q Restatement
The Company concluded that the unaudited interim consolidated
financial statements contained in the Company's quarterly report
on Form 10-Q for the period ended March 31, 2012, require
restatement to correct for an error in the reported basic and
diluted weighted-average number of common and common equivalent
shares outstanding and the related basic and diluted per common
share amounts and, therefore, should no longer be relied upon.
The Company determined that the weighted average shares and share
equivalents disclosed in its March 10-Q filed with the SEC on
May 9, 2012, had been improperly calculated.
The calculation error resulted in the amount disclosed for both
the basic and diluted weighted-average number of common and common
equivalent shares outstanding to be overstated by approximately
1.1 million shares, thus causing both the basic and diluted loss
per common share amounts to be understated by approximately
($0.29) for the three months ended March 31, 2012. This error was
also reflected in the Company's earnings release that was issued
on May 9, 2012, and furnished to the SEC on that date. The error
was discovered during an additional review by executive management
subsequent to the March 10-Q filing.
The Company expects to file a Form 10-Q/A by Oct. 15, 2012, to
amend its previously filed March 10-Q. In connection with the
restatement, the Company's Chief Executive Officer and Chief
Financial Officer concluded that, as of March 31, 2012, the end of
the period covered by the March 10-Q, the Company's disclosure
controls and procedures were not effective to detect the incorrect
calculation of the Company's weighted average shares outstanding
that was used to calculate both basic and diluted earnings per
share. This was due to a deficiency that existed in the design or
operation of the Company's internal controls over financial
reporting that adversely affected the Company's internal controls
and that was considered to be a material weakness. In an effort
to remediate the identified material weakness and enhance the
Company's internal controls, the Company has added an additional
internal control in 2012 to specifically review the basic and
diluted earnings per share calculations each quarter to ensure the
calculations are performed correctly. Management believes that
adding the additional internal control will remedy the error that
caused the material weakness.
Directors' Resignation
Kurt Cellar, Carney Hawks, and Douglas Silverman resigned from
their positions on the Board of Directors. Mr. Cellar also
resigned from his positions as Chairman of the Audit Committee of
the Board and member of the Compensation Committee of the Board.
The number of directors of the Company was fixed at five, Eugene
Davis, John Castle, and Tim Bernlohr remained on the Board, and
Kip Horton and James Continenza became members of the Board.
Mr. Horton is a Co-Founder and Member of RPA Advisors, LLC, where
he specializes in financial and turnaround advisory services for
both companies and creditors. Mr. Horton has consulted on
strategic planning, business plan analysis, cash management,
enterprise valuation, cost reduction, restructuring, divestiture
analysis, mergers and acquisitions and risk management. Within
the merchant power and ethanol arena, Mr. Horton has extensive
experience in risk management, trading-related activities and cash
management. Prior to co-founding RPA, Mr. Horton was an Executive
Director at Capstone Advisory Group, a restructuring and
turnaround consulting firm. Previously, he was with Policano &
Manzo, LLC and Prudential Securities. Mr. Horton holds a BS in
Business Administration from the University of Richmond with a
concentration in Finance. He is also a member of the Turnaround
Management Association. Mr. Horton currently serves on the boards
of directors of South Bay Expressway, Bicent Power LLC and
Southwest Georgia Ethanol and previously served on the boards of
directors of EBG Holdings, LLC, and US PowerGen Company.
Mr. Continenza is a senior executive who specializes in turning
around underperforming businesses across a variety of industries.
Mr. Continenza has served in senior leadership roles at a number
of companies. Mr. Continenza currently serves on the boards of
directors of The Berry Company, LLC, Blaze Recycling, LLC, Neff
Rental, LLC, Portola Packaging, Inc., Southwest Georgia Ethanol,
LLC, and Tembec Corp, Inc. and previously served on the boards of
directors of Anchor Glass Container Corp, Inc., Arch Wireless,
Inc., Hawkeye Renewables, LLC, MAXIM Crane Works, Inc., Microcell
Telecommunications, Inc., Rath Gibson, Inc., Rural Cellular Corp,
Inc. and U.S. Mobility, Inc.
Amendment to Certificate of Incorporation
In connection with the Restructuring, on Sept. 20, 2012, the
Company amended and restated its Third Amended and Restated
Certificate of Incorporation to:
(a) effect the reverse stock split, which resulted in one new
share being issued for 50 existing shares of the Company's
issued and outstanding common stock, in which stockholders
that would otherwise be entitled to fractional shares
received $6.15 in cash multiplied by each holder's
fractional share amount in lieu of stock for those
fractional shares; and
(b) make other changes necessary or convenient for the
Restructuring.
A detailed copy of the Form 8-K is available for free at:
http://is.gd/1jxtEY
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 (Bankr. D. Del. Lead Case No. 09-11214) on
April 7, 2009. 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 Aug. 1, 2012, Standard & Poor's Ratings
Services lowered its corporate credit rating on Aventine Renewable
Energy Holdings Inc. to 'SD' from 'CC'. "The rating action
follows the waiver of a scheduled interest payment on July 31,
2012. Although Aventine received a debt forbearance with lenders
and lenders will not consider a missed interest payment to be an
event of default, this constitutes a default under our criteria,"
S&P said.
In the Aug. 8, 2012, edition of the TCR, Moody's Investors Service
lowered Aventine Renewable Energy Holdings Inc.'s Corporate Family
Rating (CFR) to Ca from Caa3 and Probability of Default Rating to
Ca/LD from Caa3. The CFR downgrade and Ca/LD probability of
default rating reflect Moody's understanding that Aventine did not
make its scheduled July 31, 2012, term loan interest payment.
BASIC ENERGY: S&P Affirms 'B+' Corp. Credit Rating; Outlook Pos
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Fort
Worth-based Basic Energy Services Inc. to positive from stable.
"At the same time, we affirmed our ratings on Basic, including the
'B+' corporate credit rating," S&P said.
"The positive outlook reflects Basic's improved market position,
profitability, and credit metrics since the industry trough in
2009, and our expectation that market conditions will continue to
support operating performance despite some weakening in 2012,"
said Standard & Poor's credit analyst Christine Besset. "Based on
our current crude oil price assumptions of $80/bbl in 2013 and
$75/bbl thereafter, we expect demand for oilfield services to
remain adequate for the sector. We forecast that it would take a
greater than 45% fall from current EBITDA to approach our
downgrade trigger of 4.5x debt leverage, something not currently
contemplated. Finally, robust growth in shale-oil wells and
eventual production declines will require increasing services to
maintain production levels and support longer-term operational and
financial performance."
"The ratings on Basic Energy Services Inc. reflect its weak
business risk profile, aggressive financial risk profile, and
adequate liquidity assessment. Basic participates in the highly
cyclical and competitive U.S. oilfield services market, with
heightened exposure to volatile hydrocarbon prices via the capital
spending plans of the exploration and production (E&P) industry.
However, ratings benefit from Basic's strong position in the
workover rig segment, solid-positioning in oil-prone basins, and
its capital spending flexibility during industry downturns," S&P
said.
"The positive outlook reflects the potential for an upgrade over
the next 12 months. We could upgrade Basic if we expect it to
sustain debt leverage below 4x through most points in the business
cycle, as well as maintaining adequate liquidity. We could
stabilize ratings if we revised our current assumptions such that
leverage would exceed 4.75, likely in conjunction with a
contraction in E&P spending levels. Much of the exploration and
production industry remains cautious about 2013 capital spending
levels. Both uncertainty over the U.S. political and regulatory
environment following the November elections, as well as the
impact to oil prices from the struggling European and weakened
Asian economies, could negatively effect the outlook for E&P
spending levels in 2013," S&P said.
BENADA ALUMINUM: Files Schedules of Assets and Liabilities
----------------------------------------------------------
Benada Aluminum Products LLC filed with the U.S. Bankruptcy Court
for the Middle District of Florida its schedules of assets and
liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $7,302,173
B. Personal Property $14,707,099
C. Property Claimed as
Exempt
D. Creditors Holding
Secured Claims $7,477,223
E. Creditors Holding
Unsecured Priority
Claims $193,030
F. Creditors Holding
Unsecured Non-priority
Claims $4,028,173
----------- -----------
TOTAL $22,009,272 $11,698,426
A copy of the schedules is available for free at
http://bankrupt.com/misc/BENADA_ALUMINUM_sal.pdf
About Benada
Benada Aluminum Products LLC was formed in 2011 to purchase assets
of two aluminum products manufacturing companies. It purchased
via 11 U.S.C. Sec. 363 the Sanford facility of Florida Extruders
International (Case No. 08-07761). It also purchased the assets
Miami, Florida-based Benada Aluminum of Florida Inc. The Debtor
has since consolidated operations and operates only out of its
location in Sanford.
The Company filed for Chapter 11 protection on Aug. 1, 2012
(Bankr. M.D. Fla. Case No. 12-10518). Judge Karen S. Jennemann
presides over the case. R. Scott Shuker, Esq., at Latham Shuker
Eden & Beaudine LLP, represents the Debtor. The Debtor estimated
between $10 million and $50 million in assets and debts.
Wells Fargo is represented by Michael Demont, Esq., and Jay Smith,
Esq., at Smith Hulsey & Busey, in Jacksonville, Florida. FTL
Capital is represented by Christopher J. Lawhorn, Esq., at Bryan
Cave LLP in St. Louis, Missouri.
BESO LLC: Fights Bid to Convert Case to Chapter 7
-------------------------------------------------
Eric Hornbeck Bankruptcy Law360 reports that actress Eva
Longoria's Las Vegas-based Beso LLC on Tuesday opposed efforts to
convert its bankruptcy to Chapter 7, saying all proceeds left over
from selling the company to Landry's Restaurants Inc. subsidiary
CHLN Inc. were already pledged.
Beso LLC, co-owned by "Desperate Housewives" star Eva Longoria,
filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case
No. 11-10202) on Jan. 6, 2011. Beso LLC runs a Las Vegas
restaurant that opened two years ago. It disclosed assets of
$2,512,007 and liabilities of $5,680,339 in the schedules attached
to the Chapter 11 petition. Lenard E. Schwartzer, Esq., at
Schwartzer & McPherson Law Firm, in Las Vegas, Nevada, serves as
counsel to the Debtor. The petition was signed by William M.
Braden, manager.
BEXAR COUNTY: Moody's Affirms Ba2 Rating on Housing Rev. Bonds
--------------------------------------------------------------
Moody's Investors Service has affirmed the ratings assigned to the
Bexar County Housing Finance Corporation's Multifamily Housing
Revenue Bonds (Doral and Sutton House Apartments) Series 2001A at
Baa2 and Series 2001C at Ba2.
Rating Rationale
The affirmations of the ratings are due to increases in occupancy
and in revenues as well as stable adjusted debt service coverage
levels.
The change in outlook to stable reflects improved projections for
affordable rental housing in the San Antonio metropolitan area.
Strengths:
-- Increases in occupancy
-- Increase rental revenues
Challenges:
-- The unadjusted expenses have increased in 2011 but are
mitigated by adjustments made for capital expenditures
incurred.
What Could Make The Rating Go UP?
-- A substantial and sustained increase in revenues due to
improved occupancy
-- Improvement in local housing sub-market leading to increase
in property market value
What Could Make The Rating Go DOWN?
-- Significant decline in rental revenues due to increased
vacancy levels and/or rent concessions
-- Disproportionate increase in project expenses leading to
decline on coverage levels
Rating Methodology
The principal methodology used in this rating was Global Housing
Projects published in July 2010.
BIOZONE PHARMACEUTICALS: Amends Q2 Form 10-Q to Adjust Accounting
-----------------------------------------------------------------
The Chief Financial Officer of BioZone Pharmaceuticals, Inc.,
Elliot Maza, concluded that the previously issued financial
statements contained in the Company's quarterly reports on Form
10-Q for the periods ended June 30, 2012, and March 31, 2012,
should no longer be relied upon because of an error contained
therein.
On Sept. 28, 2012, BioZone filed a second amendment to its
quarterly report on Form 10-Q for the period ended June 30, 2012,
to amend and restate the Company's previously issued and unaudited
interim financial statements and related financial information as
of June 30, 2012, and for the three and six months ended June 30,
2012, which was originally filed with the Securities and Exchange
Commission on Aug. 14, 2012, and amended on Sept. 6, 2012. The
restatement adjusts the Company's accounting for certain
convertible promissory notes.
During the Company's review of the financial statements for the
three and six months ended June 30, 2012, the Company determined
that the financial statements filed for the period ended June 30,
2012, contained a misstatement relating to its accounting
treatment of a beneficial conversion feature associated with
convertible notes issued on Feb. 24, 2012. Specifically, the
Company did not need to record a beneficial conversion feature
because the amount exceeded the amount of proceeds allocated to
the convertible notes. ASC 470-20-30-8 states that if the
intrinsic value of the beneficial conversion feature is greater
than the proceeds allocated to the convertible instrument, the
amount of the discount assigned to the beneficial conversion
feature will be limited to the amount of the proceeds allocated to
the convertible instrument.
As restated, the Company incurred a net loss of $714,438 for the
three months ended June 30, 2012, compared with a net loss of
$1.85 million as originally reported.
The Company's restated statement of operations at June 30, 2012,
reflects a net loss of $4.36 million, compared with a net loss of
$11.24 million as previously reported.
The restatement had no effects to the Company's balance sheet.
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 amended Form 10-Q is available for free at:
http://is.gd/KDMFoi
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.
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.
BIOZONE PHARMACEUTICALS: Amends 8.3-Mil. Shares Resale Prospectus
-----------------------------------------------------------------
Biozone Pharmaceuticals, Inc., filed with the U.S. Securities and
Exchange Commission an amendment no. 3 to the Form S-1
registration statement relating to the sale by Aero Liquidating
Trust of up to 8,345,310 shares of the Company's common stock.
All of these shares of the Company's common stock are being
offered for resale by the selling stockholder.
The prices at which the selling stockholder may sell shares will
be determined by the prevailing market price for the shares or in
negotiated transactions. The Company will not receive any
proceeds from the sale of these shares by the selling stockholder.
The Company will bear all costs relating to the registration of
these shares of its common stock, other than any selling
stockholder's legal or accounting costs or commissions.
The Company's common stock is quoted on the Over-the-Counter
Bulletin Board under the symbol "BZNE.OB". The last reported sale
price of the Company's common stock as reported by the OTC
Bulletin Board on Sept. 27, 2012, was $1.63 per share.
A copy of the amended prospectus is available for free at:
http://is.gd/XXL0H8
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.
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.
BLAST ENERGY: Acquires Additional Interest in Niobrara Play
-----------------------------------------------------------
PEDEVCO Corp., f/k/a Blast Energy Services, Inc., and d/b/a
Pacific Energy Development, announced the acquisition of
additional oil and gas leases by its affiliate which increases the
acreage position held in the Niobrara play by approximately 50%.
Frank C. Ingriselli, the Company's President and CEO commented,
"We are pleased to be able to scale up our ownership interest in
the Niobrara formation and we look forward to expanding our
development program in the Niobrara to include development of this
new acreage."
The additional acreage (with a 100% working interest and 80% net
revenue interest), was acquired in Morgan and Weld Counties,
Colorado, and was made by the Company's affiliate, Condor Energy
Technology LLC (which is 20% owned by the Company).
These Morgan and Weld County properties have the potential for
production from multiple pay zones, including the Niobrara,
Greenhorn, Atoka, Codell, J-Sand and D-Sand formations. This area
is especially prospective for the horizontal Niobrara zone, which
will be the Company's focus, and is in close proximity to the
Company's first horizontal well, FFT2H, which was completed in
July 2012 with an initial production rate of 437 barrels of oil
equivalent per day from the Niobrara formation as reported to the
State of Colorado.
About Blast Energy
Houston, Texas-based Blast Energy Services, Inc., is seeking to
become an independent oil and gas producer with additional revenue
potential from its applied fluid jetting technology. The Company
plans to grow operations initially through the acquisition of oil
producing properties and then eventually, to acquire oil and gas
properties where its applied fluid jetting process could be used
to increase the field production volumes and value of the
properties in which it owns an interest.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas,
expressed substantial doubt about Blast Energy Services' ability
to continue as a going concern. The independent auditors noted
that Blast incurred a loss from continuing operations for 2011,
and has an accumulated deficit at Dec. 31, 2011.
The Company reported a net loss of $4.14 million for 2011,
compared with a net loss of $1.51 million for 2010.
The Company's balance sheet at March 31, 2012, showed $1.86
million in total assets, $3.98 million in total liabilities and a
$2.11 million total stockholders' deficit.
BLUEGREEN CORP: OKs Non-Termination of BFC Pact Until Dec. 31
-------------------------------------------------------------
Bluegreen Corporation and BFC Financial Corporation entered into a
definitive merger agreement on Nov. 11, 2011, pursuant to which
Bluegreen would be merged into a wholly-owned subsidiary of BFC
and holders of Bluegreen's Common Stock would receive shares of
BFC's Class A Common Stock.
Consummation of the merger is conditioned upon certain closing
conditions and the parties are continuing to work in good faith to
satisfy all those conditions, including, among other things, the
listing of BFC's Class A Common Stock for trading on a national
securities exchange. Under the terms of the merger agreement,
either party was permitted to terminate the agreement if the
merger was not consummated by Sept. 30, 2012.
In light of the parties' continued efforts towards consummation of
the merger, on Sept. 27, 2012, BFC and Bluegreen agreed that
neither party would exercise its right to so terminate the merger
agreement prior to Dec. 31, 2012. None of the other terms or
conditions of the merger agreement were impacted.
About Bluegreen Corp.
Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides
places to live and play through its resorts and residential
community businesses.
The Company reported a net loss of $17.25 million in 2011,
compared with a net loss of $43.96 million in 2010.
The Company's balance sheet at June 30, 2012, showed $1.04 billion
in total assets, $716.94 million in total liabilities, and
$325.75 million in total shareholders' equity.
* * *
In December 2010, Standard & Poor's Rating Services raised its
corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'.
BON TON: Receivables Addition No Impact on Moody's 'Caa1' Ratings
-----------------------------------------------------------------
Moody's Investors Service disclosed that the September 28, 2012
designation of the Bon Ton Stores, Inc. (Caa1, negative) credit
card receivables portfolio as an Approved Portfolio for the World
Financial Network Credit Card Master Trust (the "Trust"), and the
subsequent addition of receivables from this portfolio to the
Trust, will not result in a reduction, withdrawal, or placement
under review for possible downgrade of the ratings currently
assigned to any class of outstanding notes issued by the World
Financial Network Credit Card Master Note Trust, in and of itself
and at this time.
The retailer programs that comprise the Bon Ton Stores, Inc.
receivables being designated are Bon Ton, Bergner's, Boston Store,
Carson Pirie Scott, Elder-Beerman, Herberger's, Parisian and
Younkers. The Approved Portfolio designation is a pre-condition
for the credit card receivables arising in these retailers' card
programs to be added to the Trust by World Financial Network Bank.
In assessing the potential impact of the designation and addition,
Moody's reviewed among other things statistics on the
characteristics and performance of the receivables from the Bon
Ton portfolio, the healthy level of excess spread in the Trust,
currently above 20%, the near-term expected maturity of the rated
Series 2006-A notes in April 2013, and the size of the addition
relative to the aggregate amount of existing Trust receivables.
Following the addition, the aggregate amount of Bon Ton Stores,
Inc. receivables will represent approximately 11.2% of the
principal receivables in the Trust.
Moody's believed that this issuance did not have an adverse effect
on the credit quality of the securities such that the Moody's
ratings were impacted. Moody's did not express an opinion as to
whether the issuance could have other, non credit-related effects.
Methodology
The principal methodology used in rating these transactions was
"Moody's Approach To Rating Credit Card Receivables-Backed
Securities", published in April 2007.
BUFFALO GULF: S&P Gives 'BB+' Rating on $275-Mil. Term Loan
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Buffalo Gulf Coast Terminals LLC's (BGCT) $275 million senior
secured term loan B and a recovery rating of '3'. The outlook on
the rating is stable.
"Houston-based BGCT is a limited-purpose entity created to own
Houston Fuel Oil Terminal Co. (HFOTCO), a crude oil and residual
fuel oil terminal facility on the Houston Ship Channel. BGCT
relies solely on distributions from operating company HFOTCO to
repay its term loan. HFOTCO has $185 million in existing senior
notes, plus a $255 million revolving credit facility," S&P said.
HFOTCO has been allocated another $100 million of Hurricane Ike
revenue bonds that will be backstopped by a letter of credit from
its revolving credit facility, raising its total industrial
revenue bond issuance to $225 million.
"We expect HFOTCO will use the net proceeds to pay down revolver
borrowings and to fund capital improvements instead of drawing on
its credit facility," said Standard & Poor's credit analyst Mark
Habib.
"The stable outlook on the rating reflects our expectation that
the market for residual oil storage will remain stable in the
short term. We could raise the rating if HFOTCO signs new storage
agreements with creditworthy counterparties such that contracted
cash flow raises consolidated debt service coverage ratios above
3x and improves the loan-to-value ratio at maturity, reducing
refinancing risk. We could lower the rating if sector fundamentals
deteriorate or competition from regional or overseas facilities
erode storage pricing significantly below management's target rate
per barrel, increasing the risk of refinancing when the term loan
comes due in 2017," S&P said.
CAPTAIN'S ON LONG LAKE: In Receivership, Ex-Owner Running Business
------------------------------------------------------------------
The Isanti County News in Minnesota reports that Captain's on Long
Lake has entered into receivership, with former owner Herb Knutson
leasing and running the business.
During the Isanti County Board meeting Sept. 19, commissioners
approved transferring of the liquor license from Johnson's Tavern
Inc. to Captain's on Long Lake, according to the Isanti County
News.
The report notes that as of Sept. 18, the property and businesses
of Captain's on Long Lake -- including the campground, restaurant
and bar -- went into receivership under a court order issued by
Judge Hunter Anderson with ST Lakemoor, Inc., as the receiver,
County Attorney Jeff Edblad explained.
ST Lakemoor had a superior interest in the property to Eric and
Tammy Johnson, Mr. Edblad said, the report notes. Under the
order, ST Lakemoor took control of the business conducted on the
property and can continue the business and collect revenue, the
report relates.
The report says that ST Lakemoor entered into a lease with Herb
Knutson to run the business for them. The license was under the
Johnson name, but the Johnsons cannot run the business under the
court order since ST Lakemoor was given that authority, the report
discloses.
In order to run the business, the report notes that Mr. Edblad
said, the liquor license had to be transferred out of the name of
the person who can't run the business?Johnson?to someone who can?
ST Lakemoor or their agent.
ST Lakemoor then contracted with Knutson to run the business for
them so the license was re-issued in his name as the lessee, the
report relays.
The report says that Deputy Auditor Kassandra Engberg said the
liquor license transfer is contingent upon Knutson obtaining proof
of liquor liability, which she said he is in the process of
getting.
The report relays that Eric Johnson was present with his attorney
Jim Hess, who said he did not have any notice of the motion
granted by Judge Anderson. Mr. Hess said the receivership is not
warranted and requested more time, the report notes.
CDC CORP: Insurer Says Policy Doesn't Cover CDC in PE Firm Row
--------------------------------------------------------------
Juan Carlos Rodriguez at Bankruptcy Law360 reports that National
Fire Insurance Co. of Hartford asked a Georgia federal judge
Wednesday to find it has no duty to cover CDC Software Corp. in a
$15 million lawsuit alleging CDC tried to cripple a private equity
firm during the firm's settlement negotiations with CDC's bankrupt
former parent.
About CDC Corp
Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS). CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing. The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.
CDC Corp., doing business as Chinadotcom, filed a Chapter 11
petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011.
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA,
in Atlanta, Georgia, serves as counsel. Moelis & Company LLC
serves as its financial advisor and investment banker. Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer. The Debtor estimated assets and debts at US$100 million
to US$500 million as of the Chapter 11 filing.
The Official Committee of Equity Security Holders of CDC Corp. is
represented by Troutman Sanders. The Committee tapped Morgan
Joseph TriArtisan LLC as its financial advisor.
The stock of CDC Software Corp. was sold for $249.8 million to an
affiliate of Vista Equity Holdings.
The Debtor won a bankruptcy judge's approval of a Chapter 11 plan
under which shareholders are slated to receive as much as $6.10 a
share.
On July 3, 2012, the Debtor and the Official Committee of Equity
Security Holders filed their First Amended Joint Plan of
Reorganization for CDC Corporation that provides for the sale of
all of the Debtor's assets, for the benefit of the Debtor's
creditors and equity interest holders. Under the Plan, the
Debtor's chief restructuring officer, Marc Watson, will act as the
disbursing agent and reserve from the sale proceeds sufficient
funds to pay all Allowed Claims in full, plus interest, that
remain unpaid.
CELL THERAPEUTICS: Estimates $4.3 Million Net Loss for August
-------------------------------------------------------------
Cell Therapeutics, Inc., provided information pursuant to a
request from the Italian securities regulatory authority, CONSOB,
pursuant to Article 114, Section 5 of the Unified Financial Act,
that the Company issue at the end of each month a press release
providing a monthly update of certain information relating to the
Company's management and financial situation.
The Company estimated a net loss attributable to common
shareholders of US$4.37 million on $0 of net revenue for the month
ended Aug. 31, 2012, in comparison with a net loss attributable to
common shareholders of $4.94 million on $0 of net revenue in July.
Estimated research and development expenses were $2.4 million for
the month of July 2012 and $2.1 million for the month of August
2012.
There were no convertible notes outstanding as of July 31, 2012,
and Aug. 31, 2012.
A copy of the press release is available for free at:
http://is.gd/p1mmqc
About Cell Therapeutics
Headquartered in Seattle, Washington, Cell Therapeutics, Inc.
(NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is
a biopharmaceutical company committed to developing an integrated
portfolio of oncology products aimed at making cancer more
treatable.
Cell Therapeutics reported a net loss attributable to CTI of
US$62.36 million in 2011, compared with a net loss attributable
to CTI of US$82.64 million in 2010.
The Company's balance sheet at June 30, 2012, showed $38.34
million in total assets, $39.83 million in total liabilities,
$13.46 million in common stock purchase warrants, and a $14.95
million total shareholders' deficit.
Going Concern Doubt Raised
The report of Marcum LLP, in San Francisco, Calif., dated
March 8, 2012, expressed an unqualified opinion, with an
explanatory paragraph as to the uncertainty regarding the
Company's ability to continue as a going concern.
The Company's available cash and cash equivalents are US$47.1
million as of Dec. 31, 2011. The Company's total current
liabilities were US$17.8 million as of Dec. 31, 2011. The
Company does not expect that it will have sufficient cash to fund
its planned operations beyond the second quarter of 2012, which
raises substantial doubt about the Company's ability to continue
as a going concern.
Bankruptcy Warning
The Form 10-K for the year ended Dec. 31, 2011, noted that if the
Company receives approval of Pixuvri by the EMA or the FDA, it
would anticipate significant additional commercial expenses
associated with Pixuvri operations. Accordingly, the Company
will need to raise additional funds and are currently exploring
alternative sources of equity or debt financing. The Company may
seek to raise that capital through public or private equity
financings, partnerships, joint ventures, disposition of assets,
debt financings or restructurings, bank borrowings or other
sources of financing. However, the Company has a limited number
of authorized shares of common stock available for issuance and
additional funding may not be available on favorable terms or at
all. If additional funds are raised by issuing equity
securities, substantial dilution to existing shareholders may
result. If the Company fails to obtain additional capital when
needed, it may be required to delay, scale back, or eliminate
some or all of its research and development programs and may be
forced to cease operations, liquidate its assets and possibly
seek bankruptcy protection.
CHECKOUT HOLDING: S&P Cuts CCR to 'B' on Weaker Operating Trends
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on St. Petersburg, Fla.-based Checkout Holding Corp.
to 'B' from 'B+'. "At the same time, we lowered all related issue-
level ratings on the company's debt," S&P said.
"The downgrade reflects our view that despite the potential for an
improvement in near-term operating trends at Catalina, credit
metrics should remain weak for the 'B+' rating over the next 12
months," said Standard & Poor's credit analyst Chris Valentine.
"Since the company took a special dividend in 2010, debt leverage
has increased roughly two turns as a result of weak revenue and
cost trends and EBITDA declines. The 'B' rating reflects our view
of the company's fairly aggressive financial policy and the
competitive nature of the advertising and marketing services
industry. We view Catalina's business risk profile as 'fair'
(based on our criteria) in light of these competitive factors,
tempered by still high customer renewal rates and an entrenched
position with retailers. We continue to assess the company's
financial risk profile as 'highly leveraged,' reflecting
Catalina's high capital investment requirements, high debt
leverage, and an aggressive financial policy that has led to a
special dividend in the past," S&P said.
"The consumer promotion marketplace is highly competitive with
other advertising and marketing services via TV, radio, the
Internet, and direct mail. We expect the company will continue to
face pressure from media fragmentation via social media and
digital alternatives as customers evaluate the effectiveness of
promotional spending. Catalina's point of sale (POS) coupon
technology and its large installed base of retailers and major
consumer packaged goods customers provide it with a degree of
differentiation from new direct competition. This has afforded the
company a healthy EBITDA margin, although in recent quarters the
company has experienced pressure on top lines and margins as the
weak economy and high redemption rates caused consumer packaged
goods companies to pull pack promotional spending," S&P said.
CLEAR CHANNEL: Bank Debt Trades at 18% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications, Inc., is a borrower traded in the secondary market
at 82.35 cents-on-the-dollar during the week ended Friday, Sept.
28, 2012, a drop of 1.35 percentage points from the previous week
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. The Company pays 365 basis
points above LIBOR to borrow under the facility. The bank loan
matures on Jan. 30, 2016, and carries Moody's 'Caa1' rating and
Standard & Poor's 'CCC+' rating. The loan is one of the biggest
gainers and losers among 181 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About Clear Channel
San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) --
http://www.ccmediaholdings.com/-- is the parent company of Clear
Channel Communications, Inc. CC Media Holdings is a global media
and entertainment company specializing in mobile and on-demand
entertainment and information services for local communities and
premier opportunities for advertisers. The Company's businesses
include radio and outdoor displays.
For the six months ended June 30, 2012, the Company reported a net
loss attributable to the Company of $182.65 million on
$2.96 billion of revenue. Clear Channel reported a net loss of
$302.09 million on $6.16 billion of revenue in 2011, compared with
a net loss of $479.08 million on $5.86 billion of revenue in 2010.
The Company had a net loss of $4.03 billion on $5.55 billion of
revenue in 2009.
The Company's balance sheet at June 30, 2012, showed
$16.45 billion in total assets, $24.31 billion in total
liabilities, and a $7.86 billion total share holders deficit.
Bankruptcy Warning
At March 31, 2012, the Company had $20.7 billion of total
indebtedness outstanding. The Company said in its quarterly
report for the period ended March 31, 2012, that its ability to
restructure or refinance the debt will depend on the condition of
the capital markets and the Company's financial condition at that
time. Any refinancing of the Company's debt could be at higher
interest rates and increase debt service obligations and may
require the Company and its subsidiaries to comply with more
onerous covenants, which could further restrict the Company's
business operations. The terms of existing or future debt
instruments may restrict the Company from adopting some of these
alternatives. These alternative measures may not be successful
and may not permit the Company or its subsidiaries to meet
scheduled debt service obligations. If the Company and its
subsidiaries cannot make scheduled payments on indebtedness, the
Company or its subsidiaries, as applicable, will be in default
under one or more of the debt agreements and, as a result the
Company could be forced into bankruptcy or liquidation.
* * *
The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings
has affirmed the 'CCC' Issuer Default Rating of Clear Channel
Communications, Inc., and the 'B' IDR of Clear Channel Worldwide
Holdings, Inc., an indirect wholly owned subsidiary of Clear
Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor
advertising subsidiary. The Rating Outlook is Stable.
Fitch's ratings concerns center on the company's highly leveraged
capital structure, with significant maturities in 2014 and 2016;
the considerable and growing interest burden that pressures free
cash flow; technological threats and secular pressures in radio
broadcasting; and the company's exposure to cyclical advertising
revenue. The ratings are supported by the company's leading
position in both the outdoor and radio industries, as well as the
positive fundamentals and digital opportunities in the outdoor
advertising space.
CLEARWIRE CORP: Time Warner to Offer 46.4MM Class A Common Shares
-----------------------------------------------------------------
Clearwire Corporation commenced an underwritten public offering of
46.4 million shares of its Class A common stock by certain
affiliates of Time Warner Cable Inc., which represents
approximately 7.8% of the total outstanding Class A common stock
and approximately 3.2% of the total outstanding Class A common
stock and Class B common stock.
Credit Suisse Securities (USA) LLC is acting as the sole
underwriter for the offering. Clearwire will not receive any
proceeds from the sale of the shares being sold by the selling
stockholders.
The offering of these securities is being made only by means of a
prospectus and related prospectus supplement, copies of which may
be obtained by contacting Credit Suisse Securities (USA) LLC,
Attention: Prospectus Department, One Madison Avenue, New York, NY
10010, via telephone: +1 (800) 221-1037, or by e-mail:
newyork.prospectus@credit-suisse.com.
Clearwire has filed a registration statement with the SEC for this
offering.
About Clearwire Corporation
Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR)
-- http://www.clearwire.com/-- through its operating
subsidiaries, is a provider of 4G mobile broadband network
services in 68 markets, including New York City, Los Angeles,
Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C.,
Atlanta and Boston.
The Company reported a net loss attributable to the Company of
$717.33 million in 2011, a net loss attributable to the Company of
$487.43 million in 2010, and a net loss attributable to the
Company of $325.58 million in 2009.
The Company's balance sheet at June 30, 2012, showed $8.43 billion
in total assets, $5.65 billion in total liabilities, and
$2.78 billion in total stockholders' equity.
* * *
As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings
Services lowered its corporate credit and senior secured first-
lien issue-level ratings on Bellevue, Wash.-based wireless
provider Clearwire Corp. to 'CCC' from 'CCC+'.
The ratings on Clearwire continue to reflect its "highly
leveraged" financial risk profile based on its high debt burden
and "weak" liquidity (both terms as defined in S&P's criteria).
"The ratings also reflect our view that Clearwire has a vulnerable
business position as a developmental-stage company with
significant competition from better capitalized wireless carriers,
including AT&T Mobility and Verizon Wireless, which are deploying
their own 4G wireless services," S&P said in January 2012.
"We believe that the company would likely run out of cash in the
late 2012 to early 2013 time frame absent significant asset sales,
since we view the terms in the December 2011 wholesale agreement
with Sprint Nextel as unfavorable in the near term and will likely
constrain cash inflows in 2012 to 2013. We have not assumed
spectrum sales in our liquidity assessment because of the
uncertainty involved in finding a buyer, as well as timing.
However, if the company could secure sufficient funding for
operations through 2013, we could raise the ratings," S&P also
stated.
COMMUNITY HOME: Hearing on Examiner Appointment Set for Today
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Mississippi
will convene a hearing today, Oct. 2, 2012 at 1:30 p.m., to
consider:
-- Community Home Financial Services, Inc., and Coastal Condos,
LLC's motion for appointment of an examiner; and
-- objections to the motion filed by creditors Edwards Family
Partnership, LP, and Beher Holdings Trust.
The Debtors related that they have common ownership interest.
CFHS' main claimants are the Edwards Family Partnership and Beher
Holdngs Trust. Both EFP and BHT are owned/controlled by Charles
Edwards. Coastal's main claimant is First Equitable Realty III,
Ltd., which is owned/controlled by Charles Edwards. In sum,
Charles Edwards is the substantial claimant in both cases for a
total amount of $45 million.
The Debtors requested for appointment of an examiner to
investigate both the Debtors' affairs including, without
limitation to:
a) any allegations to the Debtors' misconduct;
b) in CHFS, the collections and payments to Edwards related to
the home improvement loans with a calculation and
determination of the amount due to Edwards from Sept. 2006
to date;
c) in Coastal, report of Edwards prepetition and postpetition
management of the Debtor's affairs from May 2008 to present
with itemization of fund collected and disbursed; and
d) in Coastal, review, determination and calculation of the
U.S. Return of partnership Income for 2008, 2009, 2010, and
2011.
The Debtors suggested that Chris B. Savell, CPA of Lefoldt & Co.,
P.A., be appointed examiner.
The Debtors said that the appointment of an examiner would assist
with the expeditious resolution of the cases. The cost of an
examiner will be less than a trustee.
About Community Home Financial Services
Community Home Financial Services, Inc., filed a Chapter 11
petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012.
Community Home Financial is a specialty finance company located in
Jackson, Mississippi, providing contractors with financing for
their customers. CHFS operates from one central location
providing financing through its dealer network throughout 25
states, Alabama, Delaware, and Tennessee. The Debtor scheduled
$44,890,581 in total assets and $30,270,271 in total liabilities.
Judge Edward Ellington presides over the case.
CORDILLERA GOLF: Club Owner Settles With Membership
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the owner of the four-course golf club at the
Cordillera resort community in Edwards, Colorado, settled disputes
with the club's members, heading off a hearing where the
bankruptcy court was being asked to appoint a Chapter 11 trustee.
Club members filed papers on July 24 seeking appointment of a
Chapter 11 trustee, contending the club was mismanaged by owner
David Wilhelm. The official creditors' committee joined in the
request for a trustee.
The report recounts that a mediator was appointed who worked out a
settlement of both the Chapter 11 case and accompanying class
lawsuits against Mr. Wilhelm.
The report relates that the settlement, laid out in a court filing
last week, calls for selling the club and confirming a Chapter 11
plan. Bids are to be submitted by Dec. 3, with an auction on
Dec. 10. Proceeds from the sale will be distributed in the order
of priority laid out in bankruptcy law, with club members having
unsecured claims. The settlement provides that Alpine Bank has an
approved secured claim of $13 million while Wilhelm's secured
claim is pegged at $7.5 million.
About Cordillera Golf
Cordillera Golf Club, LLC, filed for protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Case No. 12-11893) on
June 26, 2012, the same day a $12.7 million loan was due to Alpine
Bank of Colorado.
The Debtor owns an exclusive 730-acre four-course golf club at the
Cordillera resort community in Edwards, Colorado. The club is
located at the 7,000-acre Cordillera development, which has 1,087
residential lots. Non-equity club membership is open to community
residents. The club has three golf courses, a Dave Pelz designed
short course, five swimming pools, and tennis courts. The
membership plan provides that there will be no more than 1,085
golf memberships and up to 100 social memberships. Half of all
property owners within Cordillera are club members.
The club blamed lower membership rates and tensions with current
members for the bankruptcy.
David A. Wilhelm, manager of CGH Manager LLC, manager, signed the
Chapter 11 petition. Mr. Wilhelm acquired 100% interest in the
Debtor in 2009 following an arbitration that stemmed from
revelations that the then owners of the 70% interests had diverted
funds away from the Debtor's operations.
In the petition, the Debtor estimated $10 million to $50 million
in assets and debts, including secured debt of $12.7 million owed
to Alpine Bank and a $7.5 million secured claim by Mr. Wilhelm.
Delaware Bankruptcy Judge Christopher S. Sontchi presides over the
case. Lawyers at Young, Conaway, Stargatt & Taylor and Foley &
Lardner LLP serve as the Debtor's counsel. Omni Management Group
LLC serves as the Debtor's claims agent.
On July 16, 2012, the Delaware Court granted the request of
certain club members to transfer the venue of the case to the
Bankruptcy Court in Colorado. The case was endorsed to Hon.
A. Bruce Campbell in Denver (Bankr. D. Colo. Case No. 12-24882).
An official committee of unsecured creditors has been appointed in
the case. The Committee members consist of various homeowner and
trade creditors of the Debtor. All members have Colorado
addresses. The Committee is represented by Munsch Hardt Kopf &
Harr, PC as counsel.
Certain homeowners also have retained separate counsel, Michael S.
Kogan, Esq., at Kogan Law Firm, APC.
Secured lender, Alpine Bank in Vail, Colo., is represented by
lawyers at Ballard Spahr LLP.
CORNERSTONE BANCSHARES: Still Needs to Seek OK for Dividends
------------------------------------------------------------
The Federal Deposit Insurance Corporation issued on Aug. 17, 2012,
a written confirmation to Cornerstone Community Bank's Board of
Directors that the Consent Order entered into by the Bank with the
FDIC on April 2, 2010, had been terminated. Also on August 17,
the Tennessee Department of Financial Institutions issued written
confirmation to the Bank's Board of Directors that the Written
Agreement executed with the Bank on April 5, 2010, had been
terminated.
Some of the governance and lending procedures established by the
Consent Order and Written Agreement remain in place, including the
requirement for approval by the Regional Director of the FDIC and
the Commissioner of the Tennessee Department of Financial
Institutions of any dividends declared or paid by the Bank to its
parent, Cornerstone Bancshares, Inc.
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."
CUBIC ENERGY: Incurs $12.5 Million Net Loss in Fiscal 2012
----------------------------------------------------------
Cubic Energy, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing a net loss of
$12.49 million on $6.94 million of total revenues for the year
ended June 30, 2012, a net loss of $10.28 million on $6.13 million
of total revenues for the year ended June 30, 2011, and a net loss
of $4.93 million on $3.48 million of total revenues for the year
ended June 30, 2010.
The Company's balance sheet at June 30, 2012, showed $30.54
million in total assets, $38.70 million in total liabilities, all
current, and a $8.16 million total stockholders' deficit.
Philip Vogel & Co. PC, in Dallas, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended June 30, 2012. The independent auditors noted that the
Company has experienced recurring net losses from operations and
has uncertainty regarding its ability to meet its loan obligations
which raise substantial doubt about its ability to continue as a
going concern.
Bankruptcy Warning
"While we commenced a formal process to pursue strategic
alternatives, there can be no assurance that the process will
result in any transaction, or that, even if a transaction is
consummated that it will resolve our significant short-term
liquidity issues," the Company said in its annual report for the
year ended June 30, 2012. "Even if a potential transaction is
announced, no assurances can be given that such potential
transaction will have a positive effect on our stock price.
Additionally, if a transaction is announced but is not
consummated, our stock price may be adversely affected.
Restructuring, refinancing or extending the payment date of our
indebtedness likely will be necessary."
The Company added, "We are continuing to discuss potential
transactions with third parties and expect to engage in further
discussions with our lenders regarding extensions of the repayment
dates of our indebtedness. There can be no assurance that these
discussions will lead to a definitive agreement on acceptable
terms, or at all, with any party. Any transaction could be highly
dilutive to existing stockholders. If we are unsuccessful in
consummating a transaction or transactions that address our
liquidity issues, we could be required to seek protection under
the U.S. Bankruptcy Code."
A copy of the Form 10-K is available for free at:
http://is.gd/EUC5ac
About Cubic Energy
Cubic Energy, Inc., headquartered in Dallas, Tex., is an
independent upstream energy company engaged in the development and
production of, and exploration for, crude oil and natural gas.
Its oil and gas assets and activities are concentrated in
Louisiana.
The Company said in its quarterly report for the period ended
March 31, 2012, that, "Our debt to Wells Fargo, with a principal
amount of $35,000,000, is due on July 1, 2012, and the Wallen
Note, with a principal amount of $2,000,000, is due Sept. 30,
2012, and both are classified as a current debt. As of March 31,
2012, we had a working capital deficit of $33,162,110. This level
of negative working capital creates substantial doubt as to our
ability to pay our obligations as they come due and remain a going
concern. We are negotiating with Wells Fargo and Mr. Wallen to
extend the maturity date of these debts. There can be no
assurance that the Company will be able to negotiate such
extensions."
DAVE & BUSTER'S: S&P Puts 'B-' CCR on Watch Pos on Parent's IPO
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Dallas-
based Dave & Buster's Inc., including the 'B-' corporate credit
rating, on CreditWatch with positive implications.
"The CreditWatch placement follows Dave & Buster's parent's
amended registration statement with the SEC to raise capital in an
IPO of its common stock. According to the SEC filing, the target
is to raise gross proceeds of approximately $124 million and
reduce debt by $80 million," S&P said.
"We believe debt reduction with IPO proceeds as planned by the
company will result in improved credit protection measures and
help to cushion the effects of commodity cost swings we are
anticipating through 2013," explained Standard & Poor's credit
analyst Andy Sookram. "Pro forma for the planned debt reduction,
leverage declines to about 5.5x from 6.2x at July 29, 2012. In
addition, funds from operations to debt increases to about 14%
from 12%. These credit metrics are commensurate with the 'B'
rating category, given our view of its business risk profile as
'vulnerable' and its financial profile as 'highly leveraged.'"
"We aim to resolve the CreditWatch listing when the IPO is
completed, with a possible outcome of a one-notch upgrade of the
corporate credit rating, to 'B' from 'B-'. Additional support for
an upgrade comes from our expectation that operating performance
will be helped by profit contributions from new store openings
offsetting our forecast for commodity costs rising 50-60 basis
points. We will also review the company's business prospects and
financial policies for the near term," S&P said.
DAVID'S BRIDAL: S&P Affirms 'B' Corp. Credit Rating; Off Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Conshohocken, Pa.-based specialty bridal retailer
David's Bridal Inc. (DBI). "Following our review of the proposed
capital structure, we removed the company from CreditWatch with
negative implications, where it had been placed on Aug. 29, 2012.
The outlook is stable," S&P said.
"We assigned our 'B' issue-level rating to the company's $500
million senior secured term loan B due 2019. The recovery rating
is '3', which indicates our expectation for meaningful recovery
(50% to 70%) for term loan B lenders in the event of a payment
default. We also assigned our 'CCC+' issue-level rating to the
company's $270 million senior unsecured notes due 2020. The
recovery rating is '6', which indicates our expectation for
negligible recovery (0% to 10%) for noteholders in the event of a
payment default. We are not rating the company's $125 million
asset-based revolving credit facility," S&P said.
"On completion of the refinancing, we will withdraw our 'B+'
issue-level rating and '2' recovery rating on the company's
existing senior secured term loan B," S&P said.
"The rating action reflects our forecast for credit ratios to
improve but to still remain indicative of a 'highly leveraged'
financial risk profile for at least the next two years," said
Standard & Poor's credit analyst Brian Milligan. "Based on our
analysis of the proposed capital structure, we forecast EBITDA
coverage of interest (both cash and noncash) should be above 2x
over the next two years. The CreditWatch Negative placement on
Aug. 29, 2012 reflected the uncertainty of and the potential for
the amount and terms of the new debt in the capital structure to
weaken certain credit ratios, such as EBITDA coverage of cash
interest."
"The rating action also reflects our analysis that the company's
business risk profile will remain 'fair' for at least the next two
years. We have revised the company's business risk profile upward
to 'fair' from 'weak.' The improvement reflects the company's
consistent growth during weak economic conditions, the potential
for increasing market share at higher price points, and the
potential for improved geographic diversification as international
expansion continues. The business risk assessment continues to
reflect the company's narrow focus, yet high brand recognition, in
the highly competitive and fragmented specialty bridal retail
market as well as the risks associated with the fewer number of
and less money spent on weddings in the U.S.," S&P said.
"The stable outlook reflects our forecast for credit ratios to
remain indicative of a highly leveraged financial risk profile and
for the business risk profile to remain fair for at least the next
two years," S&P said.
"We could consider a downgrade if operating performance
significantly deteriorates, likely the result of increased
competitive pressure or weaker retail conditions. Specifically,
this would result in adjusted leverage increasing to 9x. Based on
second-quarter fiscal 2012 results and pro forma for the proposed
financing transaction, EBITDA must decline nearly 20% for adjusted
leverage to increase to 9x. We believe adjusted leverage
increasing to 9x would also result in liquidity becoming "less
than adequate."
"We could consider an upgrade if operating performance exceeds our
current forecast, resulting in adjusted leverage approaching 5.5x.
Based on second-quarter fiscal 2012 results and pro forma for the
proposed financing transaction, EBITDA growth of nearly 35% is
necessary for adjusted leverage to approach 5.5x," S&P said.
DBP HOLDING: Moody's Assigns 'B3' Corp. Family Rating
-----------------------------------------------------
Moody's Investors Service assigned Corporate Family and
Probability of Default Ratings of B3 to bridal retailer DBP
Holding Corp. ("David's Bridal," initially "CDR DB Sub, Inc.")
following the announcement of its $1.05 billion leveraged buyout.
CDR DB Sub, Inc. is an acquisition vehicle that will be merged
with and into DBP Holding Corp. upon closing of the transaction,
with DBP Holding Corp. being the surviving entity and obligor
under the new capital structure. Moody's also assigned a B2 rating
to the company's proposed $500 million senior secured term loan
and a Caa2 rating to the $270 million senior unsecured notes. The
outlook is stable.
Proceeds from the proposed $500 million term loan and $270 million
senior unsecured notes along with a $335 million common equity
infusion (75% from Clayton, Dubilier & Rice, LLC and 25% from
Leonard Green & Partners, L.P.) will be used to fund the
acquisition of David's Bridal from Leonard Green. In addition,
Moody's expects the company to have minor drawings under the
proposed $125 million assed based revolving credit facility at
closing. Concurrent with the transaction, substantially all of the
company's existing debt (including the preferred stock which
Moody's treated as 25% debt) will be paid off. The ratings of
predecessor company David's Bridal, Inc., including the B2
Corporate Family Rating and the B1 rating of the existing senior
secured credit facility, will be withdrawn upon closing of the
transaction and repayment of existing debt.
"The LBO will increase David's Bridal's debt leverage
considerably," stated Moody's analyst Mariko Semetko. The
company's pro forma debt/EBITDA will be high initially at well
above 7.0x, a level not consistent with a higher rating (all
metrics include Moody's standard analytical adjustments). "Given
the company's history of consistent cash generation, we believe
credit metrics will gradually improve over time," added Semetko.
However, it will take the company some time for the leverage
metric to return to the pre-LBO levels. Moody's also expects
David's Bridal to maintain good near-term liquidity given its $125
million ABL, expected cash flow generation, and the lack of near
term debt maturities upon closing of the transaction.
The ratings are contingent upon the receipt and review of final
documentation.
The following ratings of CDR DB Sub, Inc. have been assigned:
- Corporate Family Rating of B3
- Probability of Default Rating of B3
- Proposed $500 million first lien term loan due 2019 at B2
(LGD3, 36%)
- Proposed $270 million senior unsecured notes due 2020 at Caa2
(LGD5, 84%)
The following ratings of predecessor David's Bridal, Inc. will be
withdrawn upon consummation of the LBO:
- Corporate Family Rating of B2
- Probability of Default Rating of B2
- $276 million first lien term loan due 2014 at B1 (LGD3, 35%)
Ratings Rationale
The B3 Corporate Family Rating reflects David's Bridal's highly
leveraged capital structure following the LBO, its modest scale,
and limited product diversity. At the same time, the rating is
supported by the company's good liquidity and its well recognized
banner that gives the company a credible market position in the
specialized and highly fragmented bridal sector. This niche
remains relatively recession resistant with limited fashion risk,
though earnings are vulnerable to changing consumer preferences
including accessory conversion rates.
The $500 million senior secured term loan is rated B2, one notch
above the B3 Corporate Family Rating, reflecting the support
provided by the proposed $270 million of senior unsecured notes
(rated Caa2) in the capital structure and a junior position to the
proposed $125 million ABL (unrated by Moody's) which has a first
lien on the more liquid assets.
The stable outlook reflects Moody's view that David's Bridal will
maintain good liquidity over the near term while modestly growing
revenue and earnings.
David's Bridal is solidly positioned for the B3 rating category.
Positive rating pressure could build if debt reduction combined
with sustained earnings growth leads to a material improvement in
credit metrics, such that debt/EBITDA is maintained below 6.5
times and interest coverage is sustained above 1.75 times.
Ratings could be downgraded if financial policies become
aggressive, operating performance weakens, or if liquidity were to
deteriorate for any reason.
The principal methodology used in rating CDR DB Sub, Inc. was the
Global Retail Industry Methodology published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.
David's Bridal, headquartered in Conshohocken, PA, is a bridal
retailer with over 300 stores throughout the US and several stores
in Canada. Operating under the David's Bridal banner, the
company's core focus is on value oriented wedding gowns at under
$800, with recent expansion into higher price point gowns.
Revenues for the twelve months ended June 30, 2012 were
approximately $740 million. Following the LBO, the company will be
owned by Clayton, Dubilier & Rice, LLC (75%) and Leonard Green &
Partners, L.P. (25%).
DELTEK INC: Moody's Assigns 'B3' Corp. Family Rating
----------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating to
Deltek, Inc. pending its buyout by private equity firm Thoma
Bravo. Moody's also assigned B1 ratings to the proposed senior
secured first lien facilities and Caa2 to the proposed second lien
debt. The debt along with equity from Thoma Bravo will be used to
finance the acquisition. Upon closing Moody's will withdraw all
existing (pre-buyout) ratings for Deltek.
The ratings outlook is stable.
Ratings Rationale
The B3 is primarily driven by the very high leverage and resulting
minimal free cash flow of the business pro forma for the
acquisition particularly given the uncertain economic climate and
government spending outlook. Leverage is estimated at over 8x pro
forma for the acquisition and certain cost reductions based on
June 30, 2012 results. The leverage overshadows Deltek's leading
position providing enterprise software specifically tailored to
federal government contractors and professional service firms and
good (pre-debt service) cash generating capabilities. While
Deltek's market position is stronger than many of its private
equity owned enterprise software peers, its debt levels are
considerably higher. The strength of Deltek's entrenchment in the
government market and leading position in numerous professional
services industries including architecture and engineering firms,
accounting firms, ad agencies and consulting firms results in a
company that is well positioned in the B3 category however.
Liquidity is expected to be good supported by an estimated $27
million of cash on hand at closing and an undrawn $30 million
revolver. Free cash flow (as defined by cash flow from operations
less capital expenditures) is expected to be minimal, but
positive, over the next year.
The company is expected to grow revenues and EBITDA in the next
two quarters based on historically high bookings and the new
product sales pipeline. The outlook for 2013 is less clear however
given the economic climate and outlook for federal spending. The
ratings could face upward pressure if the company is able to grow
revenues and EBITDA and leverage is sustainably below 6.5x.
Ratings could face downward pressure if free cash flow is negative
or leverage exceeds 9x.
Issuer: Deltek, Inc.
Assignments:
Probability of Default Rating, Assigned B3
Corporate Family Rating, Assigned B3
US$425M Senior Secured Bank Credit Facility, Assigned B1
US$30M Senior Secured Bank Credit Facility, Assigned B1
US$225M Senior Secured Bank Credit Facility, Assigned Caa2
US$425M Senior Secured Bank Credit Facility, Assigned a
range of LGD3, 30 %
US$30M Senior Secured Bank Credit Facility, Assigned a range
of LGD3, 30 %
US$225M Senior Secured Bank Credit Facility, Assigned a
range of LGD5, 82 %
The principal methodology used in rating Deltek was the Global
Software 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.
Headquartered in Herndon, Virginia, Deltek is a producer of
project focused enterprise software predominantly to the mid-size
enterprise market within government contracting and professional
service end-markets. Deltek had approximately $341 million in
revenue for the last twelve months ended June 30, 2012.
DEWEY & LEBOEUF: Ex-Client Files Complaint for Turnover of Funds
----------------------------------------------------------------
Entegra Power Group LLC, a Delaware limited liability company and
a former client of Dewey & LeBoeuf LLP, has filed an adversary
complaint against D&L with the U.S. Bankruptcy Court for the
Southern District of New York for refusing to turn over a pre-
petition retainer of $300,000. A copy of the Adversary Complaint
is available at:
http://bankrupt.com/misc/dewey.entegracomplaint.doc510.pdf
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 $245 million
and assets of $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 $6
million. The Pension benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
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 creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
DEWEY & LEBOEUF: Has Until Nov. 4 to Access Cash Collateral
-----------------------------------------------------------
In a third supplemental order dated Sept. 28, 2012, the U.S.
Bankruptcy Court for the Southern District of New York further
extended and modified the final order, dated June 13, 2012,
authorizing Dewey & LeBoeuf LLP to use cash collateral of the
Collateral Agent, Revolving Lenders and Noteholders, through the
date which is earlier to occur of (a) the fifth day following a
"termination declaration date", or (b) Nov. 4, 2012. To the
extent that the Creditors' Committee determines to interpose an
objection to the continued use of cash collateral, a hearing may
be heard on Oct. 25, 2012, at 11:00 a.m., provided that the
objection is received no later than 5:00 p.m. on Oct. 18, 2012.
Any time after Oct. 20, 2012, the collateral agent may deliver a
"termination declaration" in accordance with provisions in the
final cash collateral order, whether or not an Event of Default
has occurred or is continuing.
A copy of the Final Cash Collateral Order is available at:
http://bankrupt.com/misc/dewey.doc91.pdf
A copy of the Third Supplemental Order is available at:
http://bankrupt.com/misc/dewey.doc513.pdf
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 $245 million
and assets of $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 $6
million. The Pension benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
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 creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
DEWEY & LEBOEUF: Ex-Partners Committee Objects to Canellas Bonus
----------------------------------------------------------------
Dewey & Leboeuf LLP seeks the U.S. Bankruptcy Court for the
Southern District of New York's authority to pay bonuses to
certain key wind-down employees: (i) $165,000 for Director of
Finance, Francis Canellas; (ii) $50,000 for Director of Billing,
Lourdes Rodriquez; and (iii) $5,000 for Collections Manager, Lisa
Sucoff.
The Official Committee of Former Partners objects to the payment
of the Canellas Bonus, citing, among others:
1. With the addition of the $165,000 Canellas Bonus, Francis
Canellas would be paid $665,000 for 2012, which FPC says
would be excessive if the Debtor was a going concern. With
respect to a liquidating debtor, the request is improper and
is outside of the ordinary course of business.
2. The Canellas Bonus should be denied as an impermissible
payment to an insider under Section 503(c)(1).
U.S. Trustee Tracy Hope Davis filed a limited objection to the
Canellas Bonus, citing the same grounds put forth by the FPC.
According to the U.S. Trustee, Dewey must be able to submit proof
that Francis Canellas has a bona fide job offer from another
employer at the same or greater rate of compensation, that his
services are "essential to the survival of the business", and that
it complies with the other factors listed under Section 503(c)(1)
of the Bankruptcy Code.
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 $245 million
and assets of $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 $6
million. The Pension benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
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 creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
DEWEY & LEBOEUF: U.S. Trustee, Ex-Partners Object to Bonus Plan
---------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that the U.S. trustee and
the official committee of former Dewey & LeBoeuf LLP partners
objected Thursday to the bankrupt firm's plan to pay bonuses to
certain key employees in its winding down, taking issue with a
proposed $165,000 bonus for its director of finance.
Bankruptcy Law360 relates that U.S. Trustee Tracy Hope Davis and
the former partners committee are fighting Dewey's request to pay
the bonuses in the ordinary course of business, saying the
proposed bonus for finance director Francis Canellas does
constitute such a payment.
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 $245 million
and assets of $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 $6
million. The Pension benefit Guaranty Corp. took $2 million of
the proceeds as part of a settlement.
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 creditors committee hired Brown Rudnick LLP led by
Edward S. Weisfelner, Esq., as counsel. The Former Partners hired
Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt &
Winters, LLP, as counsel.
DEX MEDIA WEST: Bank Debt Trades at 35% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media West LLC
is a borrower traded in the secondary market at 65.21 cents-on-
the-dollar during the week ended Friday, Sept. 28, 2012, an
increase of 0.71 percentage points from the previous week
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. The Company pays 450 basis
points above LIBOR to borrow under the facility. The bank loan
matures on Oct. 24, 2014, and carries Moody's 'Caa3' rating and
Standard & Poor's 'D' rating. The loan is one of the biggest
gainers and losers among 181 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About R.H. Donnelley & Dex Media
Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun &
Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/--
publishes and distributes print and online directories in the U.S.
It offers print directory advertising products, such as yellow
pages and white pages directories. R.H. Donnelley Inc., Dex
Media, Inc., and Local Launch, Inc., are the company's only direct
wholly owned subsidiaries.
Dex Media East LLC is a publisher of the official yellow pages and
white pages directories for Qwest Communications International
Inc. in the states, where Qwest is the primary incumbent local
exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New
Mexico, North Dakota and South Dakota.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media
East LLC, Dex Media West LLC and Dex Media, Inc., filed for
Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-
11852) on May 28, 2009, after missing a $55 million interest
payment on its senior unsecured notes. James F. Conlan, Esq.,
Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork,
Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago,
represented the Debtors in their restructuring efforts. Edmon L.
Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway,
Stargatt & Taylor LLP, in Wilmington, Delaware, served as the
Debtors' local counsel. The Debtors' financial advisor was
Deloitte Financial Advisory Services LLP while its investment
banker was Lazard Freres & Co. LLC. The Garden City Group, Inc.,
served as claims and noticing agent. The Official Committee of
Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen
O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its
financial advisor and forensic accountant, and The Blackstone
Group, LP, as its financial and restructuring advisor. The
Debtors emerged from Chapter 11 bankruptcy proceedings at the end
of January 2010.
* * *
In early April 2012, Standard & Poor's Ratings Services raised its
corporate credit rating on Cary, N.C.-based Dex One Corp. and
related entities to 'CCC' from 'SD' (selective default). The
rating outlook is
negative.
"At the same time, we affirmed our issue-level rating on Dex Media
East Inc.'s $672 million outstanding term loan, Dex Media West
Inc.'s $594 million outstanding term loan, and R.H. Donnelley
Inc.'s $866 million outstanding term loan due 2014 at 'D'. The
recovery rating on these loans remains at '5', indicating our
expectation of modest (10% to 30%) recovery for lenders in the
event of a payment default," S&P said.
"The company's March 9, 2012 amendment allows for ongoing subpar
repurchases of its term debt until 2013, as long as certain
conditions are met. Additionally, on March 22, 2012, the company
announced the commencement of a cash tender offer to purchase a
portion of its senior subordinated notes due in 2017 below par.
The term loan and subordinated notes are trading at a significant
discount to their par values, providing the company an economic
incentive to pursue a subpar buyback. We believe that these
circumstances suggest a high probability of future subpar
buybacks, which are tantamount to default under our criteria," S&P
said.
"The 'CCC' corporate credit rating reflects our view that Dex
One's business will remain under pressure given the unfavorable
outlook for print directory advertising. We view the company's
rising debt leverage, low debt trading levels, weak operating
outlook, and steadily declining discretionary cash flow as
indications of financial distress. As such, we continue to assess
the company's financial risk profile as 'highly leveraged,' based
on our criteria. We regard the company's business risk profile as
'vulnerable,' based on significant risks of continued structural
and cyclical decline in the print directory sector. Structural
risks include increased competition from online and other
distribution channels as small business advertising expands across
a greater number of marketing channels," S&P said.
DIGITAL DOMAIN: Charles H. Johnson Files Securities Class Action
----------------------------------------------------------------
Charles H. Johnson & Associates announces that a class action has
been commenced in the United States District Court for the
Southern District of Florida on behalf of those who purchased
Digital Domain Media Group, Inc. common stock during the period
November 18, 2011 through Sept. 6, 2012 and who purchased in or
traceable to the Company's initial public offering which commenced
on or about Nov. 18, 2011.
If you are a member of the proposed Class, you may move the Court
to serve as a lead plaintiff for the Class on or before Nov. 19,
2012. You do not need to be a lead plaintiff in order to share in
any recovery that may be obtained.
The Complaint alleges that Digital Domain, a digital production
company that was forced to file for bankruptcy in September 2012,
less than 10 months after its IPO, misled investors in documents
filed with the SEC as part of the IPO and in other statements made
throughout the Class Period. The Company failed to disclose that
material negative information concerning the Company's ability to
raise capital and fund its operations had been withheld, that the
Company's substantial "burn rate" threatened Digital Domain's
ability to continue as a going concern, and that the Company would
be unable to meet its operating expenses. On Aug. 1, 2012, it was
disclosed that the Company would explore strategic and financial
alternatives, and after the Company filed for Chapter 11
bankruptcy protection, the value of Digital Domain shares declined
significantly. Shares fell from $9.00 per share in May 2012 to
slightly over $2.00 per share in August 2012.
If you purchased or acquired Digital Domain Media Group, Inc.
stock during the Class Period, or have any questions concerning
this notice or your rights with respect to this matter, please
contact:
About Digital Domain
Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/
-- engages in the creation of original content animation feature
films, and development of computer-generated imagery for feature
films and transmedia advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11
to sell its business for $15 million to Searchlight Capital
Partners LP.
The Debtors have also sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
Port St. Lucie, Florida-based Digital Domain disclosed assets of
$205 million and liabilities totaling $214 million.
DDMG also announced that it has entered into a purchase agreement
with Searchlight Capital Partners L.P. to acquire Digital Domain
Productions Inc. and its operating subsidiaries in the United
States and Canada, including Mothership Media, subject to the
receipt of higher and better offers and Court approval.
DDPI and Mothership, with studios in California and Vancouver, are
focused on creating digital visual effects, CG animation and
digital production for the entertainment and advertising
industries and are led by recently promoted Chief Executive
Officer Ed Ulbrich.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent.
An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP.
The company listed assets of $205 million and liabilities totaling
$214 million. Debt includes $40 million on senior secured
convertible notes plus $24.7 million in interest. There is
another issue of $8 million in subordinated secured convertible
notes.
DIGITAL DOMAIN: Rosen Law Firm Files Securities Class Action
------------------------------------------------------------
The Rosen Law Firm, P.A. disclosed that the firm has filed a class
action on behalf of all purchasers of Digital Domain Media Group,
Inc. stock in the Company's initial public offering on Nov. 18,
2011, as well as those investors who bought DDMG stock between
Nov. 18, 2011 and Sept. 6, 2012.
If you purchased DDMG stock you may join the DDMG class action by
visiting the firm's website at http://rosenlegal.com; you may
call Phillip Kim, Esq., toll-free, at 866-767-3653 or email
pkim@rosenlegal.com for information on the class action.
The Complaint alleges that defendants misrepresented the Company's
true financial condition. Namely, defendants (a) did not
accurately describe the Company's "burn rate" of cash and the
Company's ability to continue as a going concern; (b) failed to
disclose that at the time of the IPO, DDMG CEO Textor had entered
into an undisclosed loan agreement for $10 million which was
secured by DDMG shares; and (c) failed to disclose that certain
members of DDMG's senior management had previously served as
senior management of another company that went bankrupt in 2008.
The Complaint alleges that these undisclosed facts materialized in
the form of DDMG's bankruptcy filing on Sept. 11, 2012, damaging
investors.
If you wish to serve as lead plaintiff, you must move the Court no
later than Nov. 19, 2012. A lead plaintiff is a representative
party acting on behalf of other absent class members in directing
the litigation. If you wish to join the litigation, or to discuss
your rights or interests regarding this class action, please
contact Jonathan Horne, Esq. or Phillip Kim, Esq. of The Rosen Law
Firm, toll-free, at 866-767-3653, or via e-mail at
jhorne@rosenlegal.com or pkim@rosenlegal.com. You may also visit
the firm's website at http://www.rosenlegal.com.
The Rosen Law Firm represents investors throughout the globe,
concentrating its practice in securities class actions and
shareholder derivative litigation.
About Digital Domain
Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/
-- engages in the creation of original content animation feature
films, and development of computer-generated imagery for feature
films and transmedia advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11
to sell its business for $15 million to Searchlight Capital
Partners LP.
The Debtors have also sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
Port St. Lucie, Florida-based Digital Domain disclosed assets of
$205 million and liabilities totaling $214 million.
DDMG also announced that it has entered into a purchase agreement
with Searchlight Capital Partners L.P. to acquire Digital Domain
Productions Inc. and its operating subsidiaries in the United
States and Canada, including Mothership Media, subject to the
receipt of higher and better offers and Court approval.
DDPI and Mothership, with studios in California and Vancouver, are
focused on creating digital visual effects, CG animation and
digital production for the entertainment and advertising
industries and are led by recently promoted Chief Executive
Officer Ed Ulbrich.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent.
An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP.
The company listed assets of $205 million and liabilities totaling
$214 million. Debt includes $40 million on senior secured
convertible notes plus $24.7 million in interest. There is
another issue of $8 million in subordinated secured convertible
notes.
DIGITAL DOMAIN: Pomerantz Law Firm Has Filed a Class Action
-----------------------------------------------------------
Pomerantz Grossman Hufford Dahlstrom & Gross LLP has filed a
federal securities class action lawsuit against certain officers
of Digital Domain Media Group, Inc., and the managing underwriters
of the Company's Initial Public Offering Roth Capital Partners,
LLC, and Morgan Joseph TriArtisan, LLC. The class action (2:12-
cv-14344), filed in the United States District Court, Southern
District of Florida, is on behalf of all persons who purchased
DDMGQ common stock between Nov. 18, 2011 and Sept. 6, 2012,
inclusive (the "Class Period") and/ or persons who purchased or
otherwise acquired DDMGQ common stock in or traceable to the
Company's initial public offering, which commenced on or about
Nov. 18, 2011 (the "IPO"). This class action is brought under
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10(b)-5 promulgated thereunder, and Sections 11 and 15 of
the Securities Act of 1933.
If you are a shareholder who purchased DDMGQ common stock during
the Class Period, you have until Nov. 19, 2012 to ask the Court to
appoint you as Lead Plaintiff for the class. To discuss this
action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or
888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire
by e-mail are encouraged to include their mailing address and
telephone number.
DDMGQ is a digital production company which was founded in 1993.
The Company provides computer-generated animation and digital
visual effects for major motion picture studios and advertisers.
On May 16, 2011, DDMGQ filed the Registration Statement with the
SEC for its initial public offering, and on Nov. 18, 2011 the IPO
commenced. The Company sold 4.92 million shares of its common
stock at an IPO price of $8.50 per share. The gross proceeds of
the offering totaled $41.8 million.
The Complaint alleges that during the Class Period and in
connection with DDMGQ's IPO, the Company made misleading
statements and/or failed to disclose material facts about the
Company's ability to raise capital and fund its operations. Senior
DDMGQ officers falsely reassured shareholders that the Company
would be able to meet its operating expenses, even though the
Company was faced with a substantial "burn rate" which threatened
its viability to continue as a going concern.
According to a Sept. 18, 2012 article in the Palm Beach Post,
DDMGQ had a long history of difficulties meeting its payroll which
went back to 2010. According to the Post, the Company's Chief
Executive Officer ("CEO") "predicted a 'train wreck' in an email
to an investor in early 2010." Moreover, the CEO concealed a Loan
Agreement for $10 million which he entered into at the time of the
IPO. The loan was secured by the CEO's DDMGQ common shares and by
the CEO's personal properties.
The revelation of the DDMGQ's true financial condition culminated
in its filing for Chapter 11 bankruptcy on Sept. 11, 2012, less
than 10 months after its IPO.
The Pomerantz Firm, with offices in New York, Chicago and San
Diego, is acknowledged as one of the premier firms in the areas of
corporate, securities, and antitrust class litigation. Founded by
the late Abraham L. Pomerantz, known as the dean of the class
action bar, the Pomerantz Firm pioneered the field of securities
class actions. September 28, more than 75 years later, the
Pomerantz Firm continues in the tradition he established, fighting
for the rights of the victims of securities fraud, breaches of
fiduciary duty, and corporate misconduct.
About Digital Domain
Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/
-- engages in the creation of original content animation feature
films, and development of computer-generated imagery for feature
films and transmedia advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11
to sell its business for $15 million to Searchlight Capital
Partners LP.
The Debtors have also sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
Port St. Lucie, Florida-based Digital Domain disclosed assets of
$205 million and liabilities totaling $214 million.
DDMG also announced that it has entered into a purchase agreement
with Searchlight Capital Partners L.P. to acquire Digital Domain
Productions Inc. and its operating subsidiaries in the United
States and Canada, including Mothership Media, subject to the
receipt of higher and better offers and Court approval.
DDPI and Mothership, with studios in California and Vancouver, are
focused on creating digital visual effects, CG animation and
digital production for the entertainment and advertising
industries and are led by recently promoted Chief Executive
Officer Ed Ulbrich.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent.
An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP.
The company listed assets of $205 million and liabilities totaling
$214 million. Debt includes $40 million on senior secured
convertible notes plus $24.7 million in interest. There is
another issue of $8 million in subordinated secured convertible
notes.
DIGITAL DOMAIN: Taps Pachulski Stang, 2 Others as Attorneys
-----------------------------------------------------------
BankruptcyData.com reports that Digital Domain Media Group filed
with the U.S. Bankruptcy Court motions to retain Pachulski Stang
Ziehl & Jones (Contact: Robert J. Feinstein) as counsel at hourly
rates ranging from $275 to $955; Cassels Brock and Blackwell
(Contact: Bruce Leonard) as Canadian counsel at hourly rates
ranging from $385 to $885 and Cadwalader, Wickersham & Taft
(Contact: Peter M. Friedman) as special counsel.
About Digital Domain
Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/
-- engages in the creation of original content animation feature
films, and development of computer-generated imagery for feature
films and transmedia advertising primarily in the United States.
Digital Domain Media Group, Inc. and 13 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11
to sell its business for $15 million to Searchlight Capital
Partners LP.
The Debtors have also sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
Port St. Lucie, Florida-based Digital Domain disclosed assets of
$205 million and liabilities totaling $214 million.
DDMG also announced that it has entered into a purchase agreement
with Searchlight Capital Partners L.P. to acquire Digital Domain
Productions Inc. and its operating subsidiaries in the United
States and Canada, including Mothership Media, subject to the
receipt of higher and better offers and Court approval.
DDPI and Mothership, with studios in California and Vancouver, are
focused on creating digital visual effects, CG animation and
digital production for the entertainment and advertising
industries and are led by recently promoted Chief Executive
Officer Ed Ulbrich.
Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the
Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief
restructuring officer. Kurtzman Carson Consultants LLC is the
claims and notice agent.
An official committee of unsecured creditors appointed in the case
is represented by lawyers at Sullivan Hazeltine Allinson LLC and
Brown Rudnick LLP.
The company listed assets of $205 million and liabilities totaling
$214 million. Debt includes $40 million on senior secured
convertible notes plus $24.7 million in interest. There is
another issue of $8 million in subordinated secured convertible
notes.
DRIVE THIS!: Files for Ch.11; Shutters Lynyrd Skynyrd Restaurant
----------------------------------------------------------------
Stephanie Gleason, writing for Dow Jones' Daily Bankruptcy Review,
reports that Drive This! Entertainment -- owner of Lynyrd Skynyrd
BBQ & Beer in partnership with Lynyrd Skynyrd band, and another
restaurant called American Burger Works -- closed the restaurants
without notice to employees on Sept. 26 and filed for Chapter 11
bankruptcy . It's not clear whether the shutdown is permanent,
Ms. Gleason says.
The report relates Drive This! partner Michael Frey declined to
comment on the Friday about either the shutdown or the lack of
notice given to employees. According to DBR, a restaurant
employee said workers were told that MGM Resorts, which owns
Excalibur Hotel and Casino where the restaurant was located, had
closed the restaurant down, adding that there had been rumors that
Lynyrd Skynyrd BBQ & Beer hadn't been paying rent to MGM.
DBR relates MGM spokeswoman Yvette Monet said she didn?t know
whether that was true. Ms. Monet also said the details of whether
Lynryd Skynyrd BBQ & Beer's shutdown was permanent are still being
finalized.
DBR relates that, according to court filings, Lynyrd Skynyrd BBQ &
Beer, together with American Burger Works, has 89-full time or
part-time employees. The restaurant has asked permission in court
documents to pay employees wages that they're owed from prior to
the shutdown and continue to provide employee benefits during the
case.
DUNE ENERGY: Inks 1st Amendment to Bank of Montreal Credit Pact
---------------------------------------------------------------
Dune Energy, Inc., on Sept. 25, 2012, entered into the First
Amendment to Amended and Restated Credit Agreement among the
Company, certain of the lenders party to the Amended and Restated
Credit Agreement dated as of Dec. 22, 2011, and Bank of Montreal
as administrative agent for the lenders.
Prior to the amendment, the Credit Agreement provided that the
Company would not, as of the last day of any fiscal quarter,
permit its ratio of Total Debt as of that day to EBITDAX for the
immediately preceding four fiscal quarters ending on that day to
be greater than 4.0 to 1.0. Among other items, the Amendment to
the Credit Agreement provides that the Company will not, as of the
last day of the fiscal quarter ending Sept. 30, 2012, or Dec. 31,
2012, permit its ratio of Total Debt as of that day to EBITDAX for
the immediately preceding four fiscal quarters ending on that day
to be greater than 5.0 to 1.0.
On March 31, 2012, and thereafter, the Company will not, as of the
last day of the fiscal quarter, permit its ratio of Total Debt as
of that day to EBITDAX for the immediately preceding four fiscal
quarters ending on that day to be greater than 4.0 to 1.0.
A copy of the First Amendment is available for free at:
http://is.gd/zsCwBn
About Dune Energy
Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/
-- is an independent energy company based in Houston, Texas.
Since May 2004, the Company has been engaged in the exploration,
development, acquisition and exploitation of natural gas and crude
oil properties, with interests along the Louisiana/Texas Gulf
Coast. The Company's properties cover over 90,000 gross acres
across 27 producing oil and natural gas fields.
The Company reported a net loss of $60.41 million in 2011,
compared with a net loss of $75.53 million in 2010.
The Company's balance sheet at June 30, 2012, showed
$246.60 million in total assets, $123.28 million in total
liabilities, and $123.31 million in total stockholders' equity.
* * *
As reported by the TCR on Dec. 27, 2011, Standard & Poor's Ratings
Services lowered its corporate credit rating on Dune Energy Inc.
to 'SD' (selective default) from 'CC'.
"The rating actions follow the company's announcement that it has
completed the exchange offer for its 10.5% senior notes due 2012,
which we consider a distressed exchange and tantamount to a
default," said Standard & Poor's credit analyst Stephen Scovotti.
"Holders of $297 million of principle amount of the senior secured
notes exchanged their 10.5% senior secured notes for common stock,
which in the aggregate constitute 97.0% of Dune's common stock
post-restructuring, and approximately $49.5 million of newly
issued floating rate senior secured notes due 2016. We consider
the completion of such an exchange to be a distressed exchange
and, as such, tantamount to a default under our criteria."
In the Jan. 2, 2012, edition of the TCR, Moody's Investors Service
revised Dune Energy, Inc.'s Probability of Default Rating (PDR) to
Caa3/LD from Ca following the closing of the debt exchange offer
of the company's 10.5% secured notes. Simultaneously, Moody's
upgraded the Corporate Family Rating (CFR) to Caa3 reflecting
Dune's less onerous post-exchange capital structure and affirmed
the Ca rating on the secured notes. The revision of the PDR
reflects Moody's view that the exchange transaction constitutes a
distressed exchange. Moody's will remove the LD (limited default)
designation in two days, change the PDR to Caa3, and withdraw all
ratings.
DYNEGY INC: To List 100 Million Shares in IPO This Week
-------------------------------------------------------
Rebecca Smith, writing for The Wall Street Journal, reports Dynegy
Inc. expects to list 100 million shares of stock this week, likely
priced between $16 and $20 a share.
According to WSJ, Dynegy, which has reduced its power plants to 16
in six states, faces fresh questions about how it can compete
against rivals that have combined forces, leaving it undersized in
a business where scale matters. WSJ says some analysts believe
Dynegy will be forced to find a suitor.
WSJ recounts that, at its peak a decade ago, Dynegy -- a so-called
merchant provider that sells electricity in wholesale markets --
owned power plants in a dozen states and six foreign countries. It
also ran two dozen gas-processing plants, nearly 10,000 miles of
pipelines, a utility in Illinois, and a big energy-trading
business.
According to the report, Dynegy Chief Executive Bob Flexon said
there are no plans to sell the company. "I didn't move to Houston
just to sell the company," Mr. Flexon said during a visit at a
plant in Moss Landing, Calif. Mr. Flexon said Dynegy still has
great assets and is entering its next phase of life with new
opportunities. "What I tell employees is, let's make the most of
it."
Accordin gto WSJ, one credit analyst, A.J. Sabatelle at Moody's
Investor's Service, said he sees Dynegy "as someone that will
merge with someone instead of buy someone." But he added it could
go either way. Dynegy will emerge from bankruptcy with $1.7
billion of debt remaining and $1.2 billion in cash. With new
shares of stock, it might eventually be able to tap equity markets
to fund purchases.
"It's a capital intensive business," said Sharon Bonelli at Fitch
Ratings, according to WSJ. "Still, they come out of bankruptcy
with a very clean, de-levered balance sheet, geographic diversity
and scrubbed coal units" that don't need further investment to
satisfy tightening air-emissions rules, she said.
About Dynegy
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) on Nov. 7, 2011, to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet. Dynegy Holdings disclosed assets of
$13.77 billion and debt of $6.18 billion.
Dynegy Inc. on July 6, 2012, filed a voluntary petition to
reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to
effectuate a merger with Dynegy Holdings, pursuant to Holdings'
Chapter 11 plan.
A settlement, which has already been approved by the bankruptcy
court, provides for Dynegy Inc. and Holdings to merge and for the
administrative claim granted to Dynegy Inc. in the Holdings
Chapter 11 case to be transferred out of Dynegy Inc. for the
benefit of its shareholders.
At a hearing Sept. 5, 2012, the Court confirmed Dynegy Inc. and
Holdings' joint plan.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues. The financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors in Holdings' cases
has tapped Akin Gump Strauss Hauer & Feld LLP as counsel.
Dynegy Inc. is represented by White & Case LLP and advised by
Lazard Freres & Co. LLC.
DYNEGY HOLDINGS: Court OKs Deal to Resolve Breach of Contract Suit
------------------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court approved
Dynegy's motion for approval of a settlement between Dynegy
Holdings, Dynegy Marketing and Trade, Cherokee Power and Chevron
U.S.A. The settlement resolves the Cherokee Action, which was a
breach of contract action brought by Cherokee County Cogeneration
Partners in Texas State Court.
About Dynegy
Through its subsidiaries, Houston, Texas-based Dynegy Inc.
(NYSE: DYN) -- http://www.dynegy.com/-- produces and sells
electric energy, capacity and ancillary services in key U.S.
markets. The power generation portfolio consists of approximately
12,200 megawatts of baseload, intermediate and peaking power
plants fueled by a mix of natural gas, coal and fuel oil.
Dynegy Holdings LLC and four other affiliates of Dynegy Inc.
sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case
No. 11-38111) on Nov. 7, 2011, to implement an agreement with a
group of investors holding more than $1.4 billion of senior notes
issued by Dynegy's direct wholly-owned subsidiary, Dynegy
Holdings, regarding a framework for the consensual restructuring
of more than $4.0 billion of obligations owed by DH. If this
restructuring support agreement is successfully implemented, it
will significantly reduce the amount of debt on the Company's
consolidated balance sheet. Dynegy Holdings disclosed assets of
$13.77 billion and debt of $6.18 billion.
Dynegy Inc. on July 6, 2012, filed a voluntary petition to
reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to
effectuate a merger with Dynegy Holdings, pursuant to Holdings'
Chapter 11 plan.
A settlement, which has already been approved by the bankruptcy
court, provides for Dynegy Inc. and Holdings to merge and for the
administrative claim granted to Dynegy Inc. in the Holdings
Chapter 11 case to be transferred out of Dynegy Inc. for the
benefit of its shareholders.
Dynegy Holdings and its affiliated debtor-entities are represented
in the Chapter 11 proceedings by Sidley Austin LLP as their
reorganization counsel. Dynegy and its other subsidiaries are
represented by White & Case LLP, who is also special counsel to
the Debtor Entities with respect to the Roseton and Danskammer
lease rejection issues. The financial advisor is FTI Consulting.
The Official Committee of Unsecured Creditors in Holdings' cases
has tapped Akin Gump Strauss Hauer & Feld LLP as counsel.
Dynegy Inc. is represented by White & Case LLP and advised by
Lazard Freres & Co. LLC.
DYNEGY POWER: S&P Affirms 'CCC+' Corp. Credit Rating; Outlook Pos
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC+' corporate
credit rating and 'B' senior secured issue rating and revised the
outlook on Dynegy Power LLC to positive from negative.
"The outlook revision reflects the likely improved credit
situation for Dynegy Power as its parents emerge from bankruptcy,"
said Standard & Poor's credit analyst Terry Pratt.
"Over the next three years, we expect to view Dynegy Power's
business risk profile as 'weak', based on its exposure to
competitive merchant markets, its modest size, and limited asset
diversity. We also think it will maintain its 'highly leveraged'
financial profile over the same period. On our corporate rating
matrix, this combination reflects a 'B-' corporate credit profile,
but the unit's current 'CCC+' reflects a rating constrained
because of the company's link to bankrupt parents. Dynegy Power is
structured to be bankruptcy remote from its parents. Dynegy Inc.
and Dynegy Holdings expect to emerge from bankruptcy imminently as
a single entity that will have no debt and that will own Dynegy
Power and Dynegy Midwest Generation. The limitation imposed by
parent creditworthiness on Dynegy Power will likely fall away,"
S&P said.
"The positive outlook on Dynegy Power reflects the likelihood that
its rating will improve at least one notch once its parents emerge
from bankruptcy and new management establishes its strategy and
financial risk posture and goals," S&P said.
EASTMAN KODAK: Seeks Plan Filing Exclusivity Until Feb. 28
----------------------------------------------------------
Eastman Kodak Company will highlight its restructuring
accomplishments to date in a motion it plans to submit Sept. 28 to
the Bankruptcy Court to extend until Feb. 28, 2013, its exclusive
right to file a plan of reorganization. The extension will assist
the company as it continues its progress toward successful
emergence in the first half of 2013.
In its motion, Kodak describes the substantial progress it has
made toward reorganization goals since filing for Chapter 11 on
Jan. 19, 2012. Kodak's case is large and complex, involving some
$5 billion in assets, global operations, thousands of contracts
and leases, thousands of potential creditors, and ongoing asset
sales. Kodak's progress includes the successful stabilization of
its business, the development of its emergence plan, significant
operating improvements, the expansion of customer and vendor
relationships, and substantial cost reductions.
Kodak previously disclosed its intention to emerge as a company
focused on commercial, packaging & functional printing solutions
and enterprise services, as well as processes to sell its
Personalized Imaging and Document Imaging businesses. Consistent
with that emergence strategy, Kodak has continued to manage its
Consumer Inkjet business for profitability, and the company
announced today that, starting in 2013, it will focus that
business on the sale of ink to its installed base, and wind down
sales of consumer inkjet printers. Kodak expects that this
decision will significantly improve cash flow in the U.S.
beginning in the first half of 2013.
"Kodak is making good progress toward emergence from Chapter 11,
taking significant actions to reorganize our core ongoing
businesses reduce costs, sell assets, and streamline our
organizational structure," said Antonio M. Perez, Kodak Chairman
and Chief Executive Officer. "Steps such as the sale of
Personalized Imaging and Document Imaging, and the Consumer Inkjet
decision, will substantially advance the transformation of our
business to focus on commercial, packaging & functional printing
solutions and enterprise services. As we complete the other key
objectives of our restructuring in the weeks ahead, we will be
well positioned to emerge successfully in 2013."
Kodak remains committed to its significant installed base of
consumer inkjet printer customers, who recognize the value
proposition of affordable ink, high-quality output because of
Kodak's unique pigment-based inks, and advanced features including
cloud printing. The company will provide its customers and retail
partners the same level of service and support they have come to
expect from Kodak.
In its motion to the Court, Kodak described specific
accomplishments thus far, including:
* The formulation of a business strategy focused on
commercial, packaging & functional printing solutions and
enterprise services that will be the cornerstone of a plan
of reorganization;
* The stabilization of its global business resulting in the
maintenance of key customer and supplier relationships
around the world;
* An extensive operational restructuring that has streamlined
businesses and reduced corporate costs. This restructuring
includes the reduction of Kodak's global workforce by more
than 2,700 positions so far in 2012, with the current
expectation of a further reduction of at least 1,200
employees (up 200 from the 1,000 previously announced).
This 23% headcount reduction will result in a savings of
more than $340 million per year and a smaller workforce of
approximately 13,100 employees;
* Negotiations with respect to a fair, equitable and permanent
resolution of Kodak's U.S. retiree benefit (OPEB) liability,
which amounts to approximately $1.2 billion;
* Use of the applicable provisions of the Bankruptcy Code to
renegotiate existing supply contracts or to enforce
prepetition contracts to achieve substantial cost savings;
* Actions to exit or sell unprofitable and declining
businesses, such as the digital camera and on-line photo
services businesses;
* Commencement of a process to sell the market-leading
Personalized Imaging and Document Imaging businesses, which
are not core to Kodak's future. Kodak noted that, while the
sale process is still in its early stages, there has already
been significant interest among potential buyers for these
businesses;
* Continued negotiations with respect to the sale of its
intellectual property assets and the development of
alternatives in the event a transaction on acceptable terms
is not reached, and
* Continuation of normal global operations while aggressively
conserving cash, with worldwide cash balances consistently
in excess of $1 billion and with Days Payable Outstanding
remaining stable.
The company anticipates that in the near term, it will begin
realizing savings from its new, more strategically focused
business, workforce reductions and other cost-reduction
initiatives. Kodak continues its analysis of further operational
and workforce reductions in an effort to streamline operations and
generate profits.
"The actions we are taking are significant steps toward our
successful emergence," said Perez. "We are committed to take the
remaining steps required for our emergence in 2013 as a
profitable, sustainable company."
An omnibus hearing to consider the motion and other matters is
scheduled for Oct. 17, 2012.
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.
As of July 31, 2012, the Company had total assets of
$3.93 billion, total liabilities of $5.32 billion and total
stockholders' deficit of $1.39 billion.
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: To Wind Down Sales of Consumer Inkjet Printers
-------------------------------------------------------------
Eastman Kodak Company plans to wind down sales of its consumer
inkjet printers starting next year and focus its consumer inkjet
business on the sale of ink to its installed base.
This decision stems from the Company's recently announced strategy
to focus on its commercial, packaging & functional printing
solutions and enterprise services businesses.
As a result of the decision, the Company currently expects to
incur total charges of approximately $90 million, including $20
million of charges related to separation benefits, $32 million of
non-cash related charges for accelerated depreciation and asset
write-offs and $38 million in other cash related charges
associated with this action.
The Company estimates that approximately $9 million of the total
charges for separation benefits will require cash expenditures and
that the remainder will be provided in the form of special
termination benefits from the Company's defined benefit pension
plans.
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.
As of July 31, 2012, the Company had total assets of
$3.93 billion, total liabilities of $5.32 billion and total
stockholders' deficit of $1.39 billion.
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.
EDMUND F. WARY: Hawaii Court Confirms 2nd Amended Plan
------------------------------------------------------
Bankruptcy Judge Robert J. Faris confirmed Edmund F. Wary's Second
Amended Plan of Reorganization dated Sept. 24, 2012. The Bank of
Hawaii had objected to a prior iteration of the plan.
The Plan designates that Classes 1, 2, and 4, are impaired and
specifies the treatment of Claims and Interests in those Classes.
The Court's order noted that holders of Allowed General Unsecured
Claims in Class 4 will receive substantially more than they would
receive in a case under Chapter 7 liquidation, because if the
assets of the Debtor were liquidated outright, there would not
receive sufficient funds to make a full distribution to Class 4.
Under the Plan, Class 4 will receive roughly 33% of their allowed
claims in 20 quarterly installments, beginning on the 90th day
after the Plan Effective Date. As a result, holders of Allowed
Class 4 Claims will receive more under the Plan than they would
receive if Debtor's case were converted to a case under chapter 7.
Class 5 will retain his Equity Interests under the Plan.
A copy of the Court's Sept. 27 Findings of Fact and Conclusions of
Law is available at http://is.gd/EdNpxFfrom Leagle.com.
Edmund F. Wary filed for Chapter 11 protection (Bankr. D. Hawaii
Case No. 11-03310) on Dec. 29, 2011. He is represented by:
Chuck C. Choi, Esq.
Allison A. Ito, Esq.
WAGNER CHOI & VERBRUGGE
Honolulu, Hawaii
Telephone: (808) 533-1877
Facsimile: (808) 566-6900
E-mail: cchoi@hibklaw.com
aito@hibklaw.com
ELPIDA MEMORY: Pledges U.S. Patents to Apple for Supply Deal
------------------------------------------------------------
Elpida Memory Inc., which supplies memory chips for Apple Inc.'s
new iPhone 5, pledged 259 U.S. registered patents to Apple as
security in case Elpida's financial troubles make problems for
Apple, new court papers say.
Lance Duroni at Bankruptcy Law360 reports that Elpida Memory Inc.
asked a Delaware bankruptcy judge on Wednesday for permission to
pledge 259 U.S. patents as collateral for a $51 million memory
chip supply pact with Apple.
According to Bankruptcy Law360, the Tokyo-based company's motion
said Apple was one of its largest customers and that the security
pledge was necessary to maintain its long-term supply arrangement
with the smartphone and computer powerhouse, which requested
collateral to protect against disruptions in its production
schedule.
About Elpida Memory
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
After semiconductor prices plunged, Japan's largest maker of DRAM
chips filed for bankruptcy in February with liabilities of 448
billion yen ($5.6 billion) after losing money for five quarters.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc.,
filed for corporate reorganization proceedings in Tokyo District
Court on Feb. 27, 2012. The Tokyo District Court immediately
rendered a temporary restraining order to restrain creditors from
demanding repayment of debt or exercising their rights with
respect to the company's assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
Elpida Memory Inc. sought the U.S. bankruptcy court's recognition
of its reorganization proceedings currently pending in Tokyo
District Court, Eight Civil Division. Yuko Sakamoto, as foreign
representative, filed a Chapter 15 petition (Bankr. D. Del. Case
No. 12-10947) for Elpida on March 19, 2012.
ENERGY CONVERSION: Liquidation Trustee Balks at Case Closure
------------------------------------------------------------
John Madden, solely as Liquidation Trustee for Energy Conversion
Devices, Inc., et al., objects to the closing of the Debtors'
cases.
According to the Liquidation Trustee, the order confirming the
Second Amended Plan of Liquidation of Energy Conversion Devices,
Inc. and United Solar Ovonic LLC, included a Notice of
Confirmation and Opportunity to Object to the closing of the case.
The Liquidation Trustee notes the administration of the
Liquidation Trust created by the Plan is ongoing. The Liquidation
Trustee is in the process of liquidating the Trust's assets,
including real estate, and analyzing potential litigation claims.
A number of claims are still Disputed Claims and will have to be
reconciled or litigated before this Court. Accordingly, the
distribution of cash as contemplated by the Plan has not yet been
completed.
For these reasons, cause exists to allow the cases to remain open
so that the Liquidation Trust may be fully administered, Mr.
Madden claims.
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.
ESCALON MEDICAL: Had $5.9 Million Net Loss in Fiscal 2012
---------------------------------------------------------
Escalon Medical Corp. filed on its annual report on Form 10-K for
the fiscal year ended June 30, 2012.
Mayer Hoffman McCann P.C., in Plymouth Meeting, Pa., expressed
substantial doubt about Escalon's ability to continue as a going
concern. The independent auditors noted of the Company's
inability to repay the debt, the related default on the debt
incurred on the Biocode Hycel acquisition, continued losses from
operations and negative cash flows from operating activities.
The Company reported a net loss of $5.9 million on $24.4 million
of revenues in fiscal 2012, compared with a net loss of
$5.8 million on $25.6 million of revenues in fiscal 2011.
Net loss from continuing operations was $2.7 million in fiscal
2012, compared with a net loss from continuing operations of
$5.0 million in fiscal 2011.
For the years ended June 30, 2012, and 2011, the Company had net
loss from discontinued operations of $3.3 million and $741,685,
respectively. The current year amount for loss from discontinued
operation is only related to discontinued operation of BHH. The
prior year amount for loss from discontinued operations includes a
loss from discontinued operations of BH Holdings, S.A.S., of
$911,000 offset by income generated from a supply agreement with
Vascular Solutions, Inc. of $169,000.
The Company's balance sheet at June 30, 2012, showed $9.7 million
in total assets, $9.1 million in total liabilities, and
stockholders' equity of $644,865.
On May 11, 2012, the holder of debt incurred by the Company in
connection with its acquisition of BHH informed the Company that
it intends to declare the entire amount in default, seek a
judgment from a French Court and then enforce the Company's
guarantee for payment. Consequently the Company has recorded the
entire debt of $4,149,516 as a current liability.
According to the regulatory filing, the Company will not be able
to pay the debt in its current form from existing resources. "The
Company will need to explore all potential options including
raising additional funds or selling certain assets in order to pay
the debt; there is no guarantee that the Company will be able to
successfully achieve these options."
A copy of the Form 10-Q is available at http://is.gd/iCACp9
Wayne, Pa.-based Escalon Medical Corp. operates in the healthcare
market, specializing in the development, manufacture, marketing
and distribution of medical devices and pharmaceuticals in the
areas of ophthalmology, diabetes and hematology. The Company and
its products are subject to regulation and inspection by the
United States Food and Drug Administration.
EXECUTIVE CENTER: Court OKs CBRE's Perry as Real Estate Broker
--------------------------------------------------------------
Executive Center of Simi Valley LLC sought and obtained approval
from the U.S. Bankruptcy Court to employ Mark Perry of CBRE, Inc.,
as real estate broker to sell property of the estate.
Among the assets of the estate are two office buildings in Agoura
Hills, California. These two properties are secured by loan to
the same lender, Platinum Courtyard, LLC. A third property is in
Simi Valley, California, which is secured by a loan with JPMorgan
Chase Bank, N.A.
Pursuant to a listing agreement, CBRE will serve as exclusive
sales agent to March 29, 2013. The initial listing price is
expected to be $150 a square foot for all there buildings.
If an offer to sell properties is received during the exclusive
listing period, and if the offer is accepted, Mark Perry and CBRE
will be entitled to a commission of 2.5% of the selling price.
CBRE is owed a prepetition leasing fee of $8,122.
The broker can be reached at:
Mark Perry
CBRE INC.
111 Universal Hollywood Drive, 27th Floor
Universal City, CA 91608
Tel: (818) 502-6700
E-mail: mark.perry@cbre.com
About Executive Center
Executive Center of Simi Valley LLC, which operates the Agoura
Hills Corporate Center, filed for Chapter 11 (Bankr. C.D. Calif.
Case No. 12-11527) on Feb. 16, 2012. Judge Victoria S. Kaufman
presides over the case. Janet A. Lawson, Esq., in Ventura,
California, serves as the Debtor's counsel. The Debtor scheduled
$29,576,254 in assets and $19,093,382 in debts. The petition was
signed by Arnold A. Klein, managing partner.
The plan and disclosure statement are due on Dec. 1, 2012.
EXECUTIVE CENTER: Can Use Cash Collateral Until Dec. 1
------------------------------------------------------
Executive Center of Simi Valley LLC has received Court authority
to use cash collateral of Platinum Courtyard through December 1.
A stipulation allowing the use of secured creditor Platinum
Courtyard's cash collateral was filed in April. The stipulation
called for payment of $50,000 a month to the secured creditor due
on the 15th of the month. The stipulation expired by its terms on
June 30, 2012. On June 29, the original agreement was extended to
July 31, and moved the $50,000 payment to July 3. A second
extension was filed, which again made the $50,000 payment due on
July 3 and which expired on Aug. 31.
The Debtor sought an order for the use of cash collateral to
Dec. 1, saying it is too expensive to keep negotiating a new one-
month period every month. The Debtor also sought to have the
adequate protection payment due on the 15th of the month.
The Debtor has said the use of cash collateral is necessary to
keep its operations. The Debtor operates two office buildings
with 101,000 square feet. The cash collateral is generated by
incoming rents.
Platinum Courtyard opposed the Debtor's request, saying the
Debtor's motion does not address the existence of an equity
cushion, replacement lien or adequate protection payments. The
Debtor's excuse -- that the cost of extending the cash collateral
stipulation for 30 day periods was "too expensive" -- is a
nonsensical pretext, according to Platinum.
Platinum Courtyard is represented by:
Lewis R. Landau, Esq.
DYKEMA GOSSETT LLP
333 South Grand Avenue, Suite 2100
Los Angeles, CA 90071
Telephone: (213) 457-1800
Facsimile: (213) 457-1850
E-mail: llandau@dykema.com
About Executive Center
Executive Center of Simi Valley LLC, which operates the Agoura
Hills Corporate Center, filed for Chapter 11 (Bankr. C.D. Calif.
Case No. 12-11527) on Feb. 16, 2012. Judge Victoria S. Kaufman
presides over the case. Janet A. Lawson, Esq., in Ventura,
California, serves as the Debtor's counsel. The Debtor scheduled
$29,576,254 in assets and $19,093,382 in debts. The petition was
signed by Arnold A. Klein, managing partner.
The plan and disclosure statement are due on Dec. 1, 2012.
FIBERTOWER CORP: Scraps Restructuring; Assets to be Auctioned
--------------------------------------------------------------
Patrick Fitzgerald at Dow Jones' DBR Small Cap reports that
troubled wireless company FiberTower Corp. has scrapped its
restructuring plans and put its operating assets up for sale at a
bankruptcy auction.
About FiberTower Corp.
FiberTower Corporation, FiberTower Network Services Corp.,
FiberTower Licensing Corp., and FiberTower Spectrum Holdings
LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos.
12-44027 to 12-44031) on July 17, 2012, together with a plan
support agreement struck with prepetition secured noteholders.
FiberTower is an alternative provider of facilities-based backhaul
services, principally to wireless carriers, and a national
provider of millimeter-band spectrum services. Backhaul is the
transport of voice, video and data traffic from a wireless
carrier's mobile base station, or cell site, to its mobile
switching center or other exchange point. FiberTower provides
spectrum leasing services directly to other carriers and
enterprise clients, and also offer their spectrum services through
spectrum brokerage arrangements and through fixed wireless
equipment partners.
FiberTower's significant asset is the ownership of a national
spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum
licenses, including over 740 MHz in the top 20 U.S. metropolitan
areas and, in the aggregate, roughly 1.72 billion channel pops
(calculated as the number of channels in a given area multiplied
by the population, as measured in the 2010 census, covered by
these channels). FiberTower believes the Spectrum Portfolio
represents one of the largest and most comprehensive collections
of millimeter wave spectrum in the U.S., covering areas with a
total population of over 300 million.
As of the Petition Date, FiberTower provides service to roughly
5,390 customer locations at 3,188 deployed sites in 13 markets
throughout the U.S. The fixed wireless portion of these hybrid
services is predominantly through common carrier spectrum in the
11, 18 and 23 GHz bands. FiberTower's biggest service markets are
Dallas/Fort Worth and Washington, D.C./Baltimore, with additional
markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit,
Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco
and Tampa.
As of June 30, 2012, FiberTower's books and records reflected
total combined assets, at book value, of roughly $188 million and
total combined liabilities of roughly $211 million. As of the
Petition Date, FiberTower had unrestricted cash of roughly $23
million. For the six months ending June 30, 2012, FiberTower had
total revenue of roughly $33 million. With the help of FTI
Consulting Inc., FiberTower's preliminary valuation work shows
that the Company's enterprise value is materially less than $132
million -- i.e., the approximate principal amount of the 9.00%
Senior Secured Notes due 2016 outstanding as of the Petition Date.
The preliminary valuation work is based upon the assumption that
FiberTower's spectrum licenses will not be terminated. Fibertower
Spectrum disclosed $106,630,000 in assets and $175,501,975 in
liabilities as of the Chapter 11 filing.
Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at
Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at
Hogan Lovells and Willkie Farr and Gallagher LLP serve as special
FCC counsel. FTI Consulting serve as financial advisor. BMC
Group Inc. serve as claims and noticing agent. The petitions were
signed by Kurt J. Van Wagenen, president.
Wells Fargo Bank, National Association -- as indenture trustee and
collateral agent to the holders of 9.00% Senior Secured Notes due
2016 owed roughly $132 million as of the Petition Date -- is
represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad
Hoc Committee of Holders of the 9% Secured Notes Due 2016 is
represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya,
Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad
Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark
Elmore, Esq., at Haynes and Boone, LLP, as local counsel.
U.S. Bank, National Association -- in its capacity as successor
indenture trustee and collateral agent to holders of the 9.00%
Convertible Senior Secured Notes due 2012, owed $37 million as of
the Petition Date -- is represented by Michael B. Fisco, Esq., at
Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq.,
at McGuire Craddock & Strother PC as local counsel.
William T. Neary, the U.S. Trustee for Region 6 appointed five
members to the Official Committee of Unsecured Creditors in the
Debtors' cases. The Committee is represented by Otterbourg,
Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman
& Leonard, P.A. Goldin Associates, LLC serves as its financial
advisors.
FIBERTOWER CORP: Cole Schotz OK'd as Committee's Local Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized the Official Committee of Unsecured Creditors in the
Chapter 11 cases of Fibertower Network Services Corp., et al., to
retain Cole, Schotz, Meisel, Forman & Leonard, P.A., as its local
counsel.
As reported in the Troubled Company Reporter on Aug. 21, 2012, the
Committee sought permission to retain Cole, Schotz, Meisel, Forman
& Leonard as local counsel for these hourly rates: members and
special counsel at $325 to $775, associate at $210 to $425,
paralegal at $160 to $245.
To the best of the Committee's knowledge, Cole Schotz is a
"disinterested person" as that term is defined under Section
101(14) of the Bankruptcy Code.
About FiberTower Corp.
FiberTower Corporation, FiberTower Network Services Corp.,
FiberTower Licensing Corp., and FiberTower Spectrum Holdings
LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos.
12-44027 to 12-44031) on July 17, 2012, together with a plan
support agreement struck with prepetition secured noteholders.
FiberTower is an alternative provider of facilities-based backhaul
services, principally to wireless carriers, and a national
provider of millimeter-band spectrum services. Backhaul is the
transport of voice, video and data traffic from a wireless
carrier's mobile base station, or cell site, to its mobile
switching center or other exchange point. FiberTower provides
spectrum leasing services directly to other carriers and
enterprise clients, and also offer their spectrum services through
spectrum brokerage arrangements and through fixed wireless
equipment partners.
FiberTower's significant asset is the ownership of a national
spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum
licenses, including over 740 MHz in the top 20 U.S. metropolitan
areas and, in the aggregate, roughly 1.72 billion channel pops
(calculated as the number of channels in a given area multiplied
by the population, as measured in the 2010 census, covered by
these channels). FiberTower believes the Spectrum Portfolio
represents one of the largest and most comprehensive collections
of millimeter wave spectrum in the U.S., covering areas with a
total population of over 300 million.
As of the Petition Date, FiberTower provides service to roughly
5,390 customer locations at 3,188 deployed sites in 13 markets
throughout the U.S. The fixed wireless portion of these hybrid
services is predominantly through common carrier spectrum in the
11, 18 and 23 GHz bands. FiberTower's biggest service markets are
Dallas/Fort Worth and Washington, D.C./Baltimore, with additional
markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit,
Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco
and Tampa.
As of June 30, 2012, FiberTower's books and records reflected
total combined assets, at book value, of roughly $188 million and
total combined liabilities of roughly $211 million. As of the
Petition Date, FiberTower had unrestricted cash of roughly $23
million. For the six months ending June 30, 2012, FiberTower had
total revenue of roughly $33 million. With the help of FTI
Consulting Inc., FiberTower's preliminary valuation work shows
that the Company's enterprise value is materially less than $132
million -- i.e., the approximate principal amount of the 9.00%
Senior Secured Notes due 2016 outstanding as of the Petition Date.
The preliminary valuation work is based upon the assumption that
FiberTower's spectrum licenses will not be terminated. Fibertower
Spectrum disclosed $106,630,000 in assets and $175,501,975 in
liabilities as of the Chapter 11 filing.
Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at
Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at
Hogan Lovells and Willkie Farr and Gallagher LLP serve as special
FCC counsel. FTI Consulting serve as financial advisor. BMC
Group Inc. serve as claims and noticing agent. The petitions were
signed by Kurt J. Van Wagenen, president.
Wells Fargo Bank, National Association -- as indenture trustee and
collateral agent to the holders of 9.00% Senior Secured Notes due
2016 owed roughly $132 million as of the Petition Date -- is
represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad
Hoc Committee of Holders of the 9% Secured Notes Due 2016 is
represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya,
Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad
Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark
Elmore, Esq., at Haynes and Boone, LLP, as local counsel.
U.S. Bank, National Association -- in its capacity as successor
indenture trustee and collateral agent to holders of the 9.00%
Convertible Senior Secured Notes due 2012, owed $37 million as of
the Petition Date -- is represented by Michael B. Fisco, Esq., at
Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq.,
at McGuire Craddock & Strother PC as local counsel.
William T. Neary, the U.S. Trustee for Region 6 appointed five
members to the Official Committee of Unsecured Creditors in the
Debtors' cases. The Committee is represented by Otterbourg,
Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman
& Leonard, P.A. Goldin Associates, LLC serves as its financial
advisors.
FIBERTOWER CORP: Taps Hogan Lovells on Spectrum Licenses
--------------------------------------------------------
Fibertower Network Services Corp., et al., ask the U.S. Bankruptcy
Court for the Northern District of Texas for permission to employ
Hogan Lovells US LLP as special FCC regulatory counsel.
Hogan Lovells has been the Debtors' long-term counsel with respect
to matters pertaining to, inter alia, Federal Communications
Commission regulatory matters, including the Debtors' request for
an extension of the construction deadline applicable to their 24
GHz and 39 GHz spectrum licenses.
As reported in the Troubled Company Reporter on Aug. 28, 2012, the
Debtors filed a lawsuit against the Federal Communications
Commission to assert its grasp on their most valuable asset: the
right to use the national 740 MHz spectrum that covers some of the
biggest U.S. cities.
Hogan Lovells will advise the Debtors in connection with FCC
regulatory matters pertaining to the Debtors' pending request for
an extension of the deadline for constructing Debtors' 24 GHz and
39 GHz spectrum licenses and perform other legal services related
to FCC regulations, applications and similar services as the
Debtors may request from time to time.
The Debtors also have historically employed Willkie Farr &
Gallagher LLP to assist them with certain FCC-related matters, and
seek to retain WF&G in the cases. WF&G will focus primarily on
obtaining FCC approval of the transfers of the licenses
and in providing communications law advice regarding the plan of
reorganization while Hogan Lovells will focus primarily on
obtaining renewal of certain 24 and 39 GHZ licenses.
WF&G and Hogan Lovells will make all necessary efforts to ensure
that no unnecessary duplication of effort occurs between WF&G and
Hogan Lovells.
The hourly billing rates at Hogan Lovells range from $280 to over
$1,200 for attorneys and from $160 to $345 for paralegals. Hogan
Lovells' hourly rates vary depending on the experience and
seniority of the professionals in question. The professionals at
Hogan Lovells primarily responsible for this matter will be Ari Q.
Fitzgerald, whose hourly rate is $705, and Christopher J. Termini,
whose hourly rate is $535.
Ari Q. Fitzgerald, a partner at Hogan Lovells, represents no
interest adverse to the Debtors or their estates in the matters
upon which Hogan Lovells is to be engaged.
About FiberTower Corp.
FiberTower Corporation, FiberTower Network Services Corp.,
FiberTower Licensing Corp., and FiberTower Spectrum Holdings
LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos.
12-44027 to 12-44031) on July 17, 2012, together with a plan
support agreement struck with prepetition secured noteholders.
FiberTower is an alternative provider of facilities-based backhaul
services, principally to wireless carriers, and a national
provider of millimeter-band spectrum services. Backhaul is the
transport of voice, video and data traffic from a wireless
carrier's mobile base station, or cell site, to its mobile
switching center or other exchange point. FiberTower provides
spectrum leasing services directly to other carriers and
enterprise clients, and also offer their spectrum services through
spectrum brokerage arrangements and through fixed wireless
equipment partners.
FiberTower's significant asset is the ownership of a national
spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum
licenses, including over 740 MHz in the top 20 U.S. metropolitan
areas and, in the aggregate, roughly 1.72 billion channel pops
(calculated as the number of channels in a given area multiplied
by the population, as measured in the 2010 census, covered by
these channels). FiberTower believes the Spectrum Portfolio
represents one of the largest and most comprehensive collections
of millimeter wave spectrum in the U.S., covering areas with a
total population of over 300 million.
As of the Petition Date, FiberTower provides service to roughly
5,390 customer locations at 3,188 deployed sites in 13 markets
throughout the U.S. The fixed wireless portion of these hybrid
services is predominantly through common carrier spectrum in the
11, 18 and 23 GHz bands. FiberTower's biggest service markets are
Dallas/Fort Worth and Washington, D.C./Baltimore, with additional
markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit,
Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco
and Tampa.
As of June 30, 2012, FiberTower's books and records reflected
total combined assets, at book value, of roughly $188 million and
total combined liabilities of roughly $211 million. As of the
Petition Date, FiberTower had unrestricted cash of roughly $23
million. For the six months ending June 30, 2012, FiberTower had
total revenue of roughly $33 million. With the help of FTI
Consulting Inc., FiberTower's preliminary valuation work shows
that the Company's enterprise value is materially less than $132
million -- i.e., the approximate principal amount of the 9.00%
Senior Secured Notes due 2016 outstanding as of the Petition Date.
The preliminary valuation work is based upon the assumption that
FiberTower's spectrum licenses will not be terminated. Fibertower
Spectrum disclosed $106,630,000 in assets and $175,501,975 in
liabilities as of the Chapter 11 filing.
Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at
Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at
Hogan Lovells and Willkie Farr and Gallagher LLP serve as special
FCC counsel. FTI Consulting serve as financial advisor. BMC
Group Inc. serve as claims and noticing agent. The petitions were
signed by Kurt J. Van Wagenen, president.
Wells Fargo Bank, National Association -- as indenture trustee and
collateral agent to the holders of 9.00% Senior Secured Notes due
2016 owed roughly $132 million as of the Petition Date -- is
represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad
Hoc Committee of Holders of the 9% Secured Notes Due 2016 is
represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya,
Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad
Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark
Elmore, Esq., at Haynes and Boone, LLP, as local counsel.
U.S. Bank, National Association -- in its capacity as successor
indenture trustee and collateral agent to holders of the 9.00%
Convertible Senior Secured Notes due 2012, owed $37 million as of
the Petition Date -- is represented by Michael B. Fisco, Esq., at
Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq.,
at McGuire Craddock & Strother PC as local counsel.
William T. Neary, the U.S. Trustee for Region 6 appointed five
members to the Official Committee of Unsecured Creditors in the
Debtors' cases. The Committee is represented by Otterbourg,
Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman
& Leonard, P.A. Goldin Associates, LLC serves as its financial
advisors.
FIBERTOWER CORP: Taps Willkie Farr as FCC Regulatory Counsel
------------------------------------------------------------
Fibertower Network Services Corp., et al., ask the U.S. Bankruptcy
Court for the Northern District of Texas for permission to employ
Willkie Farr & Gallagher LLP as special FCC regulatory counsel.
According to the Debtors, they have customer service agreements
with major U.S. wireless carriers. The Debtors also hold separate
national-scope service agreements with Verizon Business and
CenturyLink which allow them to provide government grade transport
services to the United States General Services Administration and
other governmental entities.
WF&G has been the Debtors' long-term counsel with respect to
matters pertaining to, inter alia, FCC regulatory matters.
As reported in the Troubled Company Reporter on Aug. 28, 2012, the
Debtors filed a lawsuit against the Federal Communications
Commission to assert its grasp on their most valuable asset: the
right to use the national 740 MHz spectrum that covers some of the
biggest U.S. cities.
In particular, WF&G will prepare and file applications for FCC
approval, which is required under the Communications Act of 1934,
for the transfer of the Debtors' FCC licenses and authorizations
from pre-bankruptcy FiberTower Network Services Corp., et al., to
the debtors in possession and from the debtors in possession to
any post-bankruptcy owners of the licenses and authorizations. In
addition, WF&G will advise Debtors on communications law matters
as they relate to the Debtors' plan of reorganization. Finally,
WF&G will also assist in the Debtors' efforts to obtain FCC
approval for renewal of the Debtors' licenses to operate in the 24
and 39 GHz spectrum bands for which Debtors were required to meet
the FCC's so-called substantial service build out requirement by
June 1, 2012. In assisting in the renewal process, WF&G will
be careful not to duplicate work performed by Debtors' other FCC
counsel.
The hourly billing rates at WF&G range from $400 and $1,090 for
attorneys and from $120 and $310 for paralegals. The
professionals at WF&G responsible for the matter and their hourly
rates are:
Thomas Jones $800
Mike Jones $700
Mia Hayes $535
Matt Jones $375
These individuals may be assisted by other professionals and
paraprofessionals at WF&G from time to time as necessary to ensure
that the Debtors' interests are being protected.
To the best of the Debtors' knowledge, WF&G does not represent or
hold any interest adverse to the Debtors or their estates with
regard to the matters on which WF&G will be employed.
About FiberTower Corp.
FiberTower Corporation, FiberTower Network Services Corp.,
FiberTower Licensing Corp., and FiberTower Spectrum Holdings
LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos.
12-44027 to 12-44031) on July 17, 2012, together with a plan
support agreement struck with prepetition secured noteholders.
FiberTower is an alternative provider of facilities-based backhaul
services, principally to wireless carriers, and a national
provider of millimeter-band spectrum services. Backhaul is the
transport of voice, video and data traffic from a wireless
carrier's mobile base station, or cell site, to its mobile
switching center or other exchange point. FiberTower provides
spectrum leasing services directly to other carriers and
enterprise clients, and also offer their spectrum services through
spectrum brokerage arrangements and through fixed wireless
equipment partners.
FiberTower's significant asset is the ownership of a national
spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum
licenses, including over 740 MHz in the top 20 U.S. metropolitan
areas and, in the aggregate, roughly 1.72 billion channel pops
(calculated as the number of channels in a given area multiplied
by the population, as measured in the 2010 census, covered by
these channels). FiberTower believes the Spectrum Portfolio
represents one of the largest and most comprehensive collections
of millimeter wave spectrum in the U.S., covering areas with a
total population of over 300 million.
As of the Petition Date, FiberTower provides service to roughly
5,390 customer locations at 3,188 deployed sites in 13 markets
throughout the U.S. The fixed wireless portion of these hybrid
services is predominantly through common carrier spectrum in the
11, 18 and 23 GHz bands. FiberTower's biggest service markets are
Dallas/Fort Worth and Washington, D.C./Baltimore, with additional
markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit,
Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco
and Tampa.
As of June 30, 2012, FiberTower's books and records reflected
total combined assets, at book value, of roughly $188 million and
total combined liabilities of roughly $211 million. As of the
Petition Date, FiberTower had unrestricted cash of roughly $23
million. For the six months ending June 30, 2012, FiberTower had
total revenue of roughly $33 million. With the help of FTI
Consulting Inc., FiberTower's preliminary valuation work shows
that the Company's enterprise value is materially less than $132
million -- i.e., the approximate principal amount of the 9.00%
Senior Secured Notes due 2016 outstanding as of the Petition Date.
The preliminary valuation work is based upon the assumption that
FiberTower's spectrum licenses will not be terminated. Fibertower
Spectrum disclosed $106,630,000 in assets and $175,501,975 in
liabilities as of the Chapter 11 filing.
Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at
Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at
Hogan Lovells and Willkie Farr and Gallagher LLP serve as special
FCC counsel. FTI Consulting serve as financial advisor. BMC
Group Inc. serve as claims and noticing agent. The petitions were
signed by Kurt J. Van Wagenen, president.
Wells Fargo Bank, National Association -- as indenture trustee and
collateral agent to the holders of 9.00% Senior Secured Notes due
2016 owed roughly $132 million as of the Petition Date -- is
represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad
Hoc Committee of Holders of the 9% Secured Notes Due 2016 is
represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya,
Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad
Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark
Elmore, Esq., at Haynes and Boone, LLP, as local counsel.
U.S. Bank, National Association -- in its capacity as successor
indenture trustee and collateral agent to holders of the 9.00%
Convertible Senior Secured Notes due 2012, owed $37 million as of
the Petition Date -- is represented by Michael B. Fisco, Esq., at
Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq.,
at McGuire Craddock & Strother PC as local counsel.
William T. Neary, the U.S. Trustee for Region 6 appointed five
members to the Official Committee of Unsecured Creditors in the
Debtors' cases. The Committee is represented by Otterbourg,
Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman
& Leonard, P.A. Goldin Associates, LLC serves as its financial
advisors.
FIRST AMERICAN: Moody's Lowers Corp. Family Rating to 'B2'
----------------------------------------------------------
Moody's Investors Service downgraded First American Payment
Systems, L.P.'s ("FAPS") Corporate Family Rating (CFR) to B2 from
B1 following the announcement that FAPS plans to make a $115
million debt-funded dividend to its owners (Lindsay Goldberg,
L.L.C, and management). Moody's rated the new $280 million of
Senior Secured First Lien Credit Facilities ("First Lien
Facilities") B1 ($30 million revolver and $250 million term loan)
and the new $125 million Senior Secured Second Lien Term Loan
("Second Lien Term Loan") Caa1. The proceeds of the new credit
facilities will be used to pay the dividend and to refinance the
existing $245.4 million term loan and $2.4 million currently
outstanding under a revolver. The ratings of the existing term
loan and revolver will be withdrawn upon completion of the
refinancing. The rating outlook is stable.
Ratings Rationale
"The B2 CFR reflects the much higher leverage and the more
aggressive financial profile, with FAPS paying its second debt-
funded dividend in less than a year," noted Terry Dennehy, Senior
Analyst at Moody's Investors Services. Although EBITDA has
increased over the past year, with the issuance of new debt, the
ratio of debt to EBITDA (Moody's standard adjustments) will
increase to nearly 6.5x, which is within the range of similar B2
rated issuers. Moody's believes that FAPS's financial policy will
now accommodate more frequent debt-funded dividends. Indeed,
Moody's expects that FAPS will follow debt reduction with debt-
funded dividends, keeping debt to EBITDA (Moody's standard
adjustments) within a range of 5x to 6x over the intermediate
term. This level of leverage is supported by FAPS's generally
predictable, positive free cash flow (FCF) due to the recurring
revenue base of multi-year contracts and the modest capital
expenditure requirements.
The B1 rating of the First Lien Facilities reflects the structural
features, including a first lien on all assets and upstream
guarantees from all domestic subsidiaries, and senior position in
the capital structure.
The Caa1 rating of the Second Lien Term Loan reflects the legal
subordination to the $280 million First Lien Facilities, which are
secured by a first lien on all assets. The Second Lien Term Loan
also benefits from upstream guarantees from all domestic
subsidiaries.
The stable outlook reflects Moody's expectation that FAPS will
generate gross revenue growth in the low single digits, in-line
with its expectations for industry revenue growth. Moody's expects
EBITDA to be flat in the near term, since the rating agency
expects that the current margin benefit from the Durbin Amendment
reduction in debit interchange charges will gradually decline as
this benefit is increasingly shared with merchants following
contract renewals. Thus, Moody's expects that free cash flow (FCF)
will decline in the near term due to the increased interest
expense burden and flat EBITDA (Moody's standard adjustments).
Although a rating upgrade is unlikely in the near term, the rating
could be upgraded in the intermediate term if FAPS continued to
profitably expand its market share and were to signal a return to
a more conservative financial policy by foregoing equity
distributions and aggressively reducing debt such that Moody's
expects that the ratio of debt to EBITDA (Moody's standard
adjustments) will remain below 4.5x for an extended period.
The rating could be downgraded if FAPS were to experience a
weakening competitive position, as evidenced by either revenues
increasing more slowly than the industry or a combination of
increased customer churn and declining margins. The rating could
also be downgraded if FAPS fails to reduce debt such that Moody's
believes that debt to EBITDA (Moody's standard adjustments) will
remain above 6.5x, or FCF to debt will remain below the mid single
digits, for an extended period.
Issuer: First American Payment Systems, L.P.
Downgrades:
Corporate Family Rating, Downgraded to B2 from B1
Assignments:
US$250M Senior Secured Bank Credit Facility, Assigned B1
US$30M Senior Secured Bank Credit Facility, Assigned B1
US$125M Senior Secured Bank Credit Facility, Assigned Caa1
US$250M Senior Secured Bank Credit Facility, Assigned a range
of LGD3, 33 %
US$30M Senior Secured Bank Credit Facility, Assigned a range
of LGD3, 33 %
US$125M Senior Secured Bank Credit Facility, Assigned a range
of LGD5, 86 %
FAPS, based in Fort Worth, Texas, is a merchant acquirer providing
credit, debit, and other electronic payment processing services
for merchants in the United States and Canada.
The principal methodology used in rating FAPS was the Global
Business and Consumer Services 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.
FIRST QUANTUM: Moody's Assigns 'Ba3' Corp. Family Rating
--------------------------------------------------------
Moody's Investors Service has assigned a Ba3 corporate family
rating (CFR) and a Ba3 probability of default rating (PDR) to
First Quantum Minerals Ltd. Concurrently, Moody's has assigned a
provisional (P)B1 rating with a loss-given default (LGD)
assessment of 4 (69%) to the proposed $350 million of senior
unsecured notes to be issued by FQM.
The outlook on all ratings is stable.
Moody's issues provisional ratings in advance of the final sale of
securities and these ratings reflect the rating agency's
preliminary credit opinion regarding the transaction only. Upon a
conclusive review of the final documentation and the security
package, Moody's will endeavour to assign a definitive rating to
the notes. A definitive rating may differ from a provisional
rating.
Ratings Rationale
The Ba3 CFR is constrained by the high business risk profile of
the Company, essentially due to significant concentration risk in
terms of geography (Zambia, accounting for 85% of revenues as of
2011YE) and commodity, given the very high exposure to copper
(which accounted for nearly 90% of revenues in 2011). Furthermore,
the business profile is also characterized by limited operational
diversification in terms of number of significant mines. Moody's
expects the main mine owned by the Company, the Kansanshi copper-
gold mine in Zambia, will still account for nearly 65% of revenues
and 80% of EBITDA in 2013, when the two new nickel mines in
Australia and Finland, currently still in ramp-up phase, will be
fully operational. Moody's considers as a further important source
of risk the execution of large capex projects targeting the
doubling of the current copper production capacity of FQM by 2015,
which will require a very high amount of capex to be spent in the
next couple of years.
However, Moody's believes that the risks noted above are mitigated
by (1) the company's good financial results, underpinned by FQM's
competitive cash-cost basis and the good quality of its mining
operations; (2) robust credit metrics, with low financial leverage
and substantial cash flow generation demonstrated to-date; (3) a
good liquidity profile; and (4) FQM management's conservative and
disciplined financial policy, which Moody's expects will be
applied also going forward, as FQM's management focus on (i) the
ramp-up of production at the two new nickel mines recently
commissioned in Australia and Finland; and (ii) the execution of
the large capex mainly directed towards the further development of
FQM's mining assets and deposits in Zambia.
The rating agency however cautions that FQM's focus on organic
growth in Zambia could prove to be risky, should the local
business environment become less favourable, especially as the
Zambian Government - as it is the case elsewhere in resource rich
countries - is contemplating new measures to redistribute the
country's mineral wealth. In particular, Moody's notes that the
current Government, which came into power in September last year,
has increased tax pressure for miners, (tax rate is now 43% for
FQM in the country, after the Government raised mineral royalty
rates from 3% to 6% earlier this year for base metals), and has
expressed its intention to negotiate an increase in its stakes in
the mines to 35% from around 10-20% currently (in the case of FQM,
the Zambian Government currently owns a 20% stake in the Kansanshi
mine).
In Moody's view, FQM's liquidity is good. As of June 2012, cash
and cash equivalents on balance sheet amounted to $857 million.
FQM's liquidity profile also benefited from a cash payment ($750
million) received last April from Eurasian Natural Resources
Corporation Plc (Ba3 negative). This amount represented the first
payment of a total $1.25 billion agreement reached by two miners
last January to settle their legal dispute over FQM's claims for
the Kolwezi project, the Frontier and Lonshi mines and related
exploration interests in the Democratic Republic of Congo.
The liquidity position is also supported by a $1 billion five-year
secured term loan and revolving credit facility (maturing in
January 2017), currently undrawn. These are available to the
Zambian subsidiary Kansanshi Mining Plc to fund the capex and
working capital requirements of the Kansanshi mine. Further
liquidity support stems from a secured project loan of $250
million, also undrawn, for the expansion of the Kevitsa nickel
mine in Finland. Following the issuance of the new senior
unsecured notes, FQM's liquidity would be strengthened further, as
the targeted $350 million proceeds from the notes will increase
the cash available to fund the group's future capex and general
working capital requirements. The main cash requirements over the
next 18 months are related to expansionary capex, particularly in
2013 when it will peak at $1.7 billion; no meaningful debt
repayments are scheduled over the same timeframe.
Rationale For The Stable Outlook
The stable outlook assigned to the ratings is based on Moody's
expectations that FQM will perform broadly in line with its
proposed business plan over the next two years, and retain good
liquidity headroom at all times to comfortably manage its sizeable
expansionary capex plan.
What Could Move The Ratings Up/Down
Although unlikely in the near term, Moody's says that upwards
pressure would develop on FQM's Ba3 rating, if it (1) improved its
weak business profile, by further diversifying its asset base and
cash flow generation away from Zambia; and (2) improved its
operating and financial performance, by successfully executing its
large capex plan with no material delays or cost overruns.
Downwards pressure on the rating would develop if a protracted
deterioration in the commodities markets negatively affected FQM's
operating and financial performance, thereby materially reducing
the currently large headroom under the financial covenants. The
rating would also come under negative pressure if FQM adopted a
more aggressive growth strategy -- i.e., including possible debt-
funded acquisitions leading to weaker credit metrics -- and
higher-than-anticipated costs to execute the capex plan,
especially if this precipitated protracted negative free cash
flows and a weakened liquidity profile.
Seniority of the Proposed Notes
The proposed notes will rank as FQM's senior unsecured obligations
and will be structurally and contractually subordinated to the
secured bank debt available to and drawn by the operating
subsidiaries. Furthermore, the guarantors' coverage will only be
provided -- on a subordinated basis - by two operating
subsidiaries whose nickel operations remain in a ramp-up (FQM
Kevitsa Mining Oy) or early production phase (FQM Australia Nickel
Ltd). On aggregate, the two subsidiaries accounted for 29% of
FQM's consolidated assets and 5% of consolidated EBITDA as at June
2012, on a last 12-months basis. Due to the amount of senior
secured and unsecured debt that is structurally or contractually
senior to the new notes, Moody's considers it appropriate to
assign the new notes a rating that is one notch below the CFR.
Principal Methodology
The principal methodology used in rating First Quantum Minerals
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.
First Quantum Minerals Ltd (FQM), headquartered in Canada and
listed on the Toronto Stock Exchange and the London Stock Exchange
(ticker 'FQM'), is an established mining company with large
operations in Zambia, where it manages Kansanshi, a very large and
low-cost copper and gold mine. FQM also operates a mid-sized
copper and gold mine in Mauritania, and two nickel mines which
become operational recently, Ravensthorpe in Australia
(commissioned in December 2011) and Kevitsa in Finland
(commissioned in May 2012). For the 12 months ended June 2012, FQM
generated revenues of $2.58 billion and reported an EBITDA of $1.1
billion.
FIRST SECURITY: Fails to Comply with $5-Mil. Market Value Rule
--------------------------------------------------------------
First Security Group, Inc., received notice from the Listing
Qualifications Staff of The NASDAQ Stock Market LLC indicating
that the Staff had determined to delist the Company's securities
from NASDAQ based upon the Company's non-compliance with the
minimum $5 million market value of publicly held shares
requirement, as set forth in NASDAQ Listing Rule 5450(b)(1)(C),
for continued listing on The NASDAQ Global Select Market.
The Company plans to request a hearing before the NASDAQ Listing
Qualifications Panel, which will stay any action arising from the
Staff Determination until the Panel renders a decision subsequent
to the hearing. While the Company is diligently working to regain
compliance with the applicable listing standards, there can be no
assurance that the Panel will grant the Company's request for
continued listing on NASDAQ.
About First Security Group
First Security Group, Inc., is a bank holding company
headquartered in Chattanooga, Tennessee, with $1.2 billion in
assets as of Sept. 30, 2010. Founded in 1999, First
Security's community bank subsidiary, FSGBank, N.A., has 37 full-
service banking offices, including the headquarters, along the
interstate corridors of eastern and middle Tennessee and northern
Georgia and 325 full-time equivalent employees. In Dalton,
Georgia, FSGBank operates under the name of Dalton Whitfield Bank;
along the Interstate 40 corridor in Tennessee, FSGBank operates
under the name of Jackson Bank & Trust.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Joseph Decosimo and Company, PLLC, in
Chattanooga, Tennessee, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has recently incurred substantial
losses. The Company is also operating under formal supervisory
agreements with the Federal Reserve Bank of Atlanta and the Office
of the Comptroller of the Currency and is not in compliance with
all provisions of the Agreements. Failure to achieve all of the
Agreements' requirements may lead to additional regulatory
actions.
The Company reported a net loss of $23.06 million in 2011, a net
loss of $44.34 million in 2010, and a net loss of $33.45 million
in 2009.
First Security's balance sheet at June 30, 2012, showed
$1.11 billion in total assets, $1.05 billion in total liabilities
and $53.99 million in total stockholders' equity.
FIRST UNITED: Closed; Old Plank Trail Community Assumes Deposits
----------------------------------------------------------------
First United Bank of Crete, Ill., was closed on Friday, Sept. 28
by the Illinois Department of Financial and Professional
Regulation ? Division of Banking, which appointed the Federal
Deposit Insurance Corporation as receiver. To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with Old Plank Trail Community Bank, National
Association, of New Lenox, Ill., to assume all of the deposits of
First United Bank.
The five branches of First United Bank will reopen during normal
business hours as branches of Old Plank Trail Community Bank, N.A.
Depositors of First United Bank will automatically become
depositors of Old Plank Trail Community Bank, N.A. Deposits will
continue to be insured by the FDIC, so there is no need for
customers to change their banking relationship in order to retain
their deposit insurance coverage up to applicable limits.
Customers of First United Bank should continue to use their
existing branch until they receive notice from Old Plank Trail
Community Bank, N.A., that it has completed systems changes to
allow other Old Plank Trail Community Bank, N.A., branches to
process their accounts as well.
As of June 30, 2012, First United Bank had around $328.4 million
in total assets and $316.9 million in total deposits. Old Plank
Trail Community Bank, N.A., will pay the FDIC a premium of 0.60
percent to assume all of the deposits of First United Bank. In
addition to assuming all of the deposits, Old Plank Trail
Community Bank, N.A., agreed to purchase essentially all of the
failed bank's assets.
The FDIC and Old Plank Trail Community Bank, N.A., entered into a
loss-share transaction on $172.7 million of First United Bank's
assets. Old Plank Trail Community Bank, N.A., will share in the
losses on the asset pools covered under the loss-share agreement.
The loss-share transaction is projected to maximize returns on the
assets covered by keeping them in the private sector. The
transaction also is expected to minimize disruptions for loan
customers. For more information on loss share, please visit:
http://www.fdic.gov/bank/individual/failed/lossshare/index.html
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-823-5680. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/firstunited.html
The FDIC estimates that the cost to the Deposit Insurance Fundwill
be $48.6 million. Compared to other alternatives, Old Plank Trail
Community Bank, N.A.'s acquisition was the least costly resolution
for the FDIC's DIF. First United Bank is the 43rd FDIC-insured
institution to fail in the nation this year, and the seventh in
Illinois. The last FDIC-insured institution closed in the state
was Waukegan Savings Bank, Waukegan, on Aug. 3, 2012.
FONAR CORP: Reports $6.8 Million Net Income in Fiscal 2012
----------------------------------------------------------
Fonar Corporation filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K disclosing net income of
$6.87 million on $39.44 million of net total revenues for the year
ended June 30, 2012, compared with net income of $3.31 million on
$33.13 million of net total revenues during the prior fiscal year.
The Company's balance sheet at June 30, 2012, showed
$33.61 million in total assets, $22.53 million in total
liabilities, and $11.08 million in total stockholders' equity.
Marcum, LLP, in New York, the Company's independent accounting
firm, did not issue a "going concern" qualification on the
consolidated financial statements for the year ended June 30,
2012.
In its report on the Company's consolidated financial statements
for the fiscal year ended June 30, 2011, Marcum expressed
substantial doubt the Company's ability to continue as a going
concern citing negative working capital and the Company's
dependence on asset sales to fund its operations.
A copy of the Form 10-K is available for free at:
http://is.gd/rdzuBf
About FONAR Corp.
FONAR was incorporated in 1978, making it the first, oldest and
most experienced MRI company in the industry. FONAR introduced
the world's first commercial MRI in 1980, and went public in 1981.
Since its inception, nearly 300 recumbent-OPEN MRIs and 150
UPRIGHT(R) Multi-Position(TM) MRI scanners worldwide have been
installed. FONAR's stellar product line includes the Upright(TM)
MRI (also known as the Stand-Up(TM) MRI), the only whole-body MRI
that performs Position(TM) imaging (pMRI(TM)) and scans patients
in numerous weight-bearing positions, i.e. standing, sitting, in
flexion and extension, as well as the conventional lie-down
position.
FOREVERGREEN WORLDWIDE: Had $38,700 Net Loss in Second Quarter
--------------------------------------------------------------
ForeverGreen Worldwide Corporation filed its quarterly report on
Form 10-Q, reporting a net loss of $38,772 on $3.1 million of
revenues for the three months ended June 30, 2012, compared with a
net loss of $205,468 on $3.5 million of revenues for the same
period of 2011.
For the six months ended June 30, 2012, the Company had a net loss
of $165,663 on $6.7 million of revenues, compared with a net loss
of $548,251 on $6.3 million of revenues for the same period last
year.
The Company's balance sheet at June 30, 2012, showed $2.1 million
in total assets, $5.8 million in total liabilities, and a
stockholders' deficit of $3.7 million.
"The Company has not yet established an ongoing source of revenues
sufficient to cover its operating costs and to allow it to
continue as a going concern. The Company has incurred operating
losses during the six months ended June 30, 2012, of $165,663 and
has an accumulated net loss totaling $34,739,158. The ability of
the Company to continue as a going concern is dependent on the
Company obtaining adequate capital to fund operating losses until
it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations."
A copy of the Form 10-Q is available at http://is.gd/wkjugY
About ForeverGreen Worldwide
Orem, Utah-based ForeverGreen Worldwide Corporation is a holding
company that operates through its wholly owned subsidiary,
ForeverGreen International, LLC. The Company's product philosophy
is to develop, manufacture and market the best of science and
nature through innovative formulations as it produces and
manufactures a wide array of whole foods, nutritional supplements,
personal care products and essential oils.
* * *
Sadler, Gibb & Associates, LLC, in Salt Lake City, Utah, expressed
substantial doubt about ForeverGreen's ability to continue as a
going concern, following the Company's results for the fiscal year
ended Dec. 31, 2011. The independent auditors noted that the
Company has suffered accumulated net losses of $34,573,495 and has
had negative cash flows from operating activities during the year
ended Dec. 31, 2011. of $909,844.
FREEDOM ENVIRONMENTAL: Chap. 11 Case Closed; Receiver Appointed
---------------------------------------------------------------
Judge Karen S. Jennemann of the U.S. Bankruptcy Court for the
District of Florida directed the clerk of the Court to
administratively close the Chapter 11 voluntary case of Freedom
Environmental Services, Inc.
Certain individuals asserting to be the controlling officers and
directors of Freedom filed a voluntary Chapter 11 bankruptcy
petition in the U.S. Bankruptcy Court for the Middle District of
Florida, Orlando Division (Case No. 6:12-bk-10958-KSJ) on Aug. 13,
2012.
Certain other individuals, also asserting to be the controlling
officers and directors of the Company, asked the Court to dismiss
the Chapter 11 case claiming the Filing Parties did not have the
corporate authority necessary to file the Petition.
On Aug. 23, 2012, the Objecting Parties filed a Joint Motion to
Suspend Case in which they argued that authority and control of
the Company was a disputed fact and at issue necessitating
resolution by pending litigation in State Court.
Robert Morison Appointed Receiver
On Sept. 17, 2012, the U.S. Securities and Exchange Commission
filed a complaint against the Company and two of its officers,
Michael Borish and Michael Ciarlone, in the United States District
Court for the Middle District of Florida, Orlando Division (Case
No.: 6:12-cv-01415-Orl-28DAB).
Concurrent with the filing of the complaint, the Commission filed
a motion for appointment of a receiver in the case. On Sept. 17,
2012, the Federal Court granted the Order Appointing Receiver,
finding the appointment of a receiver in this case to be necessary
and appropriate for the purposes of marshaling and preserving all
assets of the Company. Through the Receivership Order, the Court
took exclusive jurisdiction and possession of the assets, of
whatever kind and wherever situated, of the Company and, until
further order of the Federal Court, appointed Robert B. Morrison
as receiver for the estates of Freedom.
Under the Receivership Order, the trustees, directors, officers,
managers, employees, investment advisors, accountants, attorneys
and other agents of the Company were dismissed and the powers of
any general partners, directors or managers were suspended.
Under the Receivership Order, the Receiver was granted all powers,
authorities, rights and privileges heretofore possessed by the
officers, directors, managers and general and limited partners of
the Company under applicable state and federal law, by the
governing charters, by-laws, articles or agreements.
Concurrent with the filing of the complaint, the Commission filed
a motion for a Temporary Restraining Order to restrain the
Company, Borish, and Ciarlone and any of their agents from
engaging in ongoing violations of federal securities laws. On
Sept. 17, 2012, the Federal Court granted the Temporary
Restraining Order.
Also on Sept. 17, 2012, the Commission issued Release No. 67869 in
which it announced a temporary suspension of the trading in the
securities of the Company because of questions that were been
raised about the accuracy and adequacy of publicly disseminated
information concerning, among other things, the identity of the
persons in control of the operations and management of the
company, the company's current financial condition, and the
misappropriation of corporate funds. The temporary suspension is
in effect from 9:30 AM on Sept. 17, 2012, through 11:59 PM on
Sept. 28, 2012.
On Sept. 20, 2012, Tarvaran, Askelson & Company, LLP, resigned as
the Company's auditors.
About Freedom Environmental
Freedom Environmental filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Fla. Case No. 12-10958) on Aug. 13, 2012. Michael
Ciarlone signed the petition as COO & CFO. The Debtor estimated
assets and debts of $1 million to $10 million. The Debtor is
represented by Paul DeCailly, Esq., at DeCailly Law Group, P.A.
Orlando, Florida-based Freedom Environmental provides wastewater
management and recycling services to its customers through its
different divisions.
The Company's balance sheet at June 30, 2012, showed $2.36 million
in total assets, $3.11 million in total liabilities, and a
$757,678 total stockholders' deficit.
FREIF NORTH AMERICAN: S&P Rates $33 Million Term Loan 'BB-'
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' ratings to
FREIF North American Power I LLC's (FREIF) $210 million senior
secured term loan B and $33 million term loan C, both due 2019.
"In addition, we assigned a recovery rating of '2' on both series
of debt, indicating the expectation for a substantial (70% to 90%)
recovery in the event of payment default. The outlook is stable,"
S&P said.
FREIF is a special-purpose, bankruptcy-remote entity formed to own
and operate a portfolio of four power generation assets. The
closed-end portfolio consists of equity interests in four power
plants totaling 1,068 megawatts of net generation. The assets are
in Texas, California, Connecticut, and New Mexico.
"Long-term power purchase agreements with investment-grade
counterparties add some cash flow stability, as almost all of the
project's capacity is accounted for through 2024," said Standard &
Poor's credit analyst Mark Habib.
"We base the stable outlook on expectations of adequate operations
and some stability in cash flow through 2024. We could lower the
rating if the project encounters higher-than-estimated forced
outages or severe operating issues, which result in higher
expenses and lower availabilities. Crockett's performance under a
new market index formula regime will be key to the portfolio's
credit measures. It had operating problems in August 2012 and a
recurrence could lead us to downgrade the FREIF rating.
Conversely, material improvements in the risk profiles of several
projects--particularly Crockett and Hobbs--could result in an
upgrade," S&P said.
S&P Takes Rating Action on FREIF's Unit
Lea Power Partners LLC's $305.4 million senior secured bonds. "We
removed the rating from CreditWatch, where we placed it with
negative implications on Dec. 22, 2011. The outlook is negative,"
S&P said.
"We based the affirmation and CreditWatch removal on our rating
assignment to FREIF North American Power I, which purchased Hobbs
Power Funding LLC, the owner of Lea Power Partners, from ArcLight
Capital. On Sept. 28, 2012, we assigned FREIF a 'BB-' rating and a
stable outlook, with a '2' recovery rating. First Reserve Corp.
indirectly holds a controlling interest in FREIF," S&P said.
"To maintain our current 'BBB-' rating on Lea Power, FREIF, the
new owner, would have to have creditworthiness equivalent to a
'BB-' rated entity, given our parent-project ratings linkage
criteria guidelines for U.S. transactions with a single parent,"
S&P said.
FTLL ROBOVAULT: Florida Storage Facility Files for Chapter 11
-------------------------------------------------------------
FTLL RoboVault LLC, the owners of the RoboVault storage facility
in Fort Lauderdale, Florida, sought Chapter 11 bankruptcy
protection (Bankr. S.D. Fla. Case No. 12-33090) on Sept. 27, 2012.
RoboVault listed $18.665 million in total assets and $21.568
million in total liabilities. RoboVault said its facility, which
the Debtor described as "free-standing safe depository," is worth
$18.556 million. The Debtor said it owes BankAtlantic $20 million
in secured debt.
According to the petition, RoboVault is represented by Lawrence B.
Wrenn, Esq., at Wrenn Law Office. President Marvin Chaney signed
the petition.
Katy Stech, writing for Dow Jones' Daily Bankruptcy Review,
reports RoboVault sought Chapter 11 after falling behind on a
$20 million bank loan and facing foreclosure.
According to DBR, since opening three years ago, the facility has
made it like a scene from "Mission: Impossible" to retrieve items
kept at its heavily guarded building, which company executives
have declared "the first storage facility of its kind in the
world." DBR relates the gray, 155,000-square foot high-rise is
"virtually impenetrable to theft, harsh elements, vandalism,
bullets [and] fire," according to its Web site. The storage area,
the DBR report continues, wasn't built with staircases or an
elevator to allow human access to its storage units. Instead, its
70-ton robotic lift retrieves items from the insides of its
building, which looks like a concrete playground ripe for a heist.
The facility, which doesn't disclose its prices on its Web site,
was designed to withstand Category 5 hurricanes and winds of up to
200 miles per hour.
Ms. Stech relates the company and its bankruptcy attorney did not
return phone calls asking for more details on how RoboVault would
use its bankruptcy case to reorganize.
DBR also notes bankruptcy court papers didn't say how many units
were purchased at the time of the filing, but Mr. Chaney told the
South Florida Sun Sentinel newspaper in August 2006 that 118 of
the vault's 408 units had been sold.
FULLER BRUSH: Wants to Hire GCG, Inc. as Administrative Agent
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing on Oct. 4, 2012, at 12 p.m., to consider
The Fuller Brush Company, Inc.'s request to employ GCG, Inc., as
administrative agent.
According to the Debtor's application, GCG will, among other
things:
a) generate and provide claim reports and claim objection
exhibits;
b) manage the preparation, compilation and mailing of documents
to creditors and other parties in interest in connection
with the solicitation of a chapter 11 plan; and
c) collect and tabulate votes in connection with any Plan filed
by the Debtors and providing ballot reports to the Debtors
and their professionals.
The Debtor will pay the GCG's personnel at their discounted hourly
rates:
Administrative and Claims Control $45 to $55
Project Administrators $70 to $85
Quality Assurance Staff $80 to $125
Project Supervisors $95 to $110
Systems, Graphic Support & Technology Staff $100 to $200
Project Managers and Senior Project Managers $125 to $175
Directors and Asst. Vice Presidents $200 to $225
Vice Presidents and above $225
To the best of the Debtor's knowledge, GCG is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Fuller Brush
The Fuller Brush Company -- http://www.fuller.com/-- sells
branded and private label products for personal care, commercial
and household cleaning and has a current catalog of 2,000 cleaning
products. Some of Fuller's retail partners include Home Trends,
Bi-Mart, Byerly's, Lunds, Home Depot, Do-It-Best, Primetime
Solutions, Vermont Country Store and Starcrest.
Founded in 1906 and based in Great Bend, Kansas, The Fuller Brush
Company, Inc., and its parent, CPAC, Inc., filed for Chapter 11
protection (Bankr. S.D.N.Y. Case Nos. 12-10714 and 12-10715) in
Manhattan on Feb. 21, 2012. Fuller Brush filed for bankruptcy
five years after the company was taken over by private equity firm
Buckingham Capital Partners. Fuller, which has 180 employees as
of the Chapter 11 filing, disclosed $22.9 million in assets and
$50.9 million in debt. Fuller said it will be business as usual
while undergoing Chapter 11 restructuring. But it said that while
in reorganization, it intends to trim about half of the current
catalog of cleaning products.
Herrick Feinstein LP serves as the Debtors' bankruptcy counsel.
The official committee of unsecured creditors has tapped the law
firm of Kelley Drye & Warren LLP as counsel.
The reorganization is being financed with a $5 million loan from
an affiliate of Victory Park Capital Advisors LLC, the secured
lender owed $22.7 million that plans to buy the business
in exchange for debt.
The Court cleared Fuller Brush Co., to auction its assets next
month, with its senior lender kicking off bidding.
GAMETECH INTERNATIONAL: Competitor Yuri Itkis Buys Business
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that GameTech International Inc. filed for Chapter 11
protection in July to prevent competitor Yuri Itkis Gaming Trust
from taking over using secured debt it purchased. As it ends up,
YIGT is buying the business after all.
According to the report, at the end of last week, the bankruptcy
court in Delaware approved sale of the business to YIGT in
exchange for secured debt, $2.5 million cash, and about $200,000
to cure defaults on contracts going along with the sale.
About GameTech International
Based in Reno, Nevada, GameTech develops and manufactures gaming
entertainment products and systems. GameTech holds a significant
position in the North American bingo market with its interactive
electronic bingo systems, portable and fixed-based gaming units,
and complete hall management modules. It also holds a significant
position in select North American VLT markets, primarily Montana,
Louisiana, and South Dakota, where it offers video lottery
terminals and related gaming equipment and software. It also
offers Class III slot machines and server-based gaming systems.
GameTech International, Inc. and its wholly owned subsidiaries
have filed Chapter 11 petitions (Bankr. D. Del. Lead Case No.
12-11964) on July 2, 2012, to effect a restructuring of the
company's debt obligations.
GameTech disclosed total assets of $27.22 million and total
liabilities of $22.88 million as of Jan. 29, 2012. GameTech's $16
million secured credit matured on June 30. Three days earlier,
the loan was purchased by YIGT.
Before bankruptcy, GameTech rejected an offer from YIGT to combine
the two companies. GameTech said in a court filing that it was
hoping for a more favorable transaction. GameTech said that YIGT
purchased the loan at discount from lenders US Bank NA and Bank of
the West.
Judge Peter J. Walsh presides over the case. The Debtors are
represented by Greenberg Traurig, LLP. Kinetic Advisors, LLC,
serves as the Debtors' financial advisor.
GATEHOUSE MEDIA: Bank Debt Trades at 68% Off in Secondary Market
----------------------------------------------------------------
Participations in a syndicated loan under which GateHouse Media,
Inc., is a borrower traded in the secondary market at 31.54 cents-
on-the-dollar during the week ended Friday, Sept. 28, 2012, an
increase of 0.29 percentage points from the previous week
according to data compiled by LSTA/Thomson Reuters MTM Pricing and
reported in The Wall Street Journal. The Company pays 200 basis
points above LIBOR to borrow under the facility. The bank loan
matures on Feb. 27, 2014, and carries Moody's Ca rating and
Standard & Poor's CCC+ rating. The loan is one of the biggest
gainers and losers among 181 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday.
About GateHouse Media
GateHouse Media, Inc. -- http://www.gatehousemedia.com/--
headquartered in Fairport, New York, is one of the largest
publishers of locally based print and online media in the United
States as measured by its 97 daily publications. GateHouse Media
currently serves local audiences of more than 10 million per week
across 21 states through hundreds of community publications and
local Web sites.
Gatehouse Media, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.86 million on $128.76 million of total revenues for the
three months ended July 1, 2012, compared with a net loss of $5.06
million on $134.39 million of total revenues for the three months
ended June 26, 2011.
The Company reported a net loss of $16.23 million on $248.77
million of total revenues for the six months ended July 1, 2012,
compared with a net loss of $23.25 million on $254.21 million of
total revenues for the six months ended June 26, 2011.
The Company's balance sheet at July 1, 2012, showed $487.40
million in total assets, $1.31 billion in total liabilities, and a
$823.09 million total stockholders' deficit.
According to the Form 10-K for the year ended Dec. 31, 2011, the
Company's ability to make payments on its indebtedness as required
depends on its ability to generate cash flow from operations in
the future. This ability, to a certain extent, is subject to
general economic, financial, competitive, legislative, regulatory
and other factors that are beyond the Company's control.
GCA SERVICES: Moody's Assigns 'B2' CFR/PDR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service assigned a first-time B2 Corporate
Family Rating ("CFR") to GCA Services Group, Inc. ("GCA") .
Moody's also assigned a B2 Probability of Default Rating ("PDR"),
a B1 instrument rating to the proposed $60 million first lien
senior secured revolving credit facility and $315 million first
lien term loan and a Caa1 rating to the proposed $150 million
second lien term loan. The ratings outlook is stable.
The term loans will be used to finance the acquisition of GCA by
affiliates of Blackstone Group, refinance existing debt and pay
transaction expenses. Sponsor equity will also be used to complete
the transaction.
Ratings Rationale
"The B2 Corporate Family Rating presumes material free cash growth
throughout 2013," said Edmond DeForest, Moody's Senior Analyst.
Adjusted to reflect a full year of new contracts signed in 2012,
run rate debt to EBITDA is 6.4 times. Moody's expects steady
quarterly revenue growth of 13% to 15% per year to drive financial
leverage reduction to below 6 times debt to EBITDA over the next
12 to 18 months. Near term free cash flow will be limited by high
interest expense. Moderate customer concentration in niche markets
and limited revenue size of about $800 million are mitigated by
GCA's leading market share in the K-12 educational market and
specialized cleaning skills targeted industrial niche markets
often require. Contracts of 5 to 7 years for Educational customers
and 2 to 4 years in the Commercial division and renewal rates
above 90% make revenue stable and predictable, providing further
support to the ratings. The ratings are somewhat prospective in
nature, as they incorporate Moody's expectation for improving
operating performance and free cash flow expansion. All financial
metrics cited reflect Moody's standard adjustments.
The stable outlook reflects Moody's expectations for consistent
quarterly revenue growth, steady EBITDA margins and high EBITDA to
cash flow conversation enabling financial deleveraging over the
next 12 to 18 months. A deterioration in revenue growth caused by
price erosion, escalating costs or customer losses, leading to
diminished EBITDA and free cash flow expectations, or shareholder
friendly financial policies, could cause lower ratings if Moody's
expects debt to EBITDA to remain above 6 times and free cash flow
to debt to be below 3%, or if the pace of financial deleveraging
is slower than expected. Achievement of better than expected
revenue growth resulting in annual revenues of about $1.2 billion
while maintaining free cash flow levels and balanced financial
policies could result in an upgrade.
The following Ratings (Assessments) were assigned:
Corporate Family Rating, B2
Probability of Default Rating, B2
First- Lien Senior Secured Revolving Credit Facility, B1
(LGD 3 - 34%)
First- Lien Senior Secured Term Loan A, B1 (LGD 3 - 34%)
Second- Lien Senior Secured Term Loan B, Caa1 (LGD 5 - 87%)
GCA provides custodial, staffing and related services to business
and educational customers in the U.S. and Puerto Rico. Controlled
by affiliates of Blackstone Group, Moody's expects 2012 revenue of
over $800 million and EBITDA of about $70 million.
The principal methodology used in rating GCA Services Group, Inc
was the Global Business & Consumer Service Industry Methodology
published in October 2010. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
GCA SERVICES: S&P Gives 'B' Corp. Credit Rating; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned Cleveland, Ohio-based
GCA Services Group Inc. its preliminary 'B' corporate credit
rating. The rating outlook is stable.
"At the same time, we assigned GCA's proposed $315 million senior
secured first-lien term loan B (including the proposed $15 million
segregated pre-funded letter of credit facility) a preliminary
issue-level rating of 'B' (at the same level as the 'B' corporate
credit rating on the company). The preliminary recovery rating on
each of these facilities is '3', reflecting our expectation of
meaningful (50%-70%) recovery for lenders in case of a payment
default," S&P said.
"We also assigned the company's proposed $150 million senior
secured second-lien term loan our preliminary 'CCC+' issue-level
rating (two notches lower than the 'B' corporate credit rating).
The preliminary recovery rating on this debt is '6', reflecting
our expectation of negligible (0%-10%) recovery for lenders in the
case of a payment default," S&P said.
"The preliminary ratings incorporate our view that, following the
leveraged buyout, the debt burden will remain significant and that
the sponsor, Blackstone, will likely influence financial
governance," said Standard & Poor's credit analyst Nalini Saxena.
"They also incorporate our view that the company is a very small
player with a narrow business focus in a competitive, contract-
based industry: outsourced facilities management services,
predominantly focused on delivery of customized janitorial and
custodial services."
"The rating outlook is stable. We expect GCA's operating
performance to improve and for credit-protection measures to
strengthen modestly over the next 12 months," S&P said.
GENERAL MOTORS: Creditors' Lawsuit Could Cost $918 Million
----------------------------------------------------------
Tiffany Kary at Bloomberg news reports that General Motors Co.
Chief Financial Officer Daniel Ammann, who advised the automaker
on the eve of its 2009 bankruptcy while working as a Morgan
Stanley banker, said a lawsuit over some Canadian notes may harm
the company by as much as $918 million, or 50 cents a share.
Mr. Ammann, Morgan Stanley's former head of industrials investment
banking, testified Sept. 27 in a trial over how the bankruptcy
treats general creditors and hedge funds that negotiated a
$3 billion claim for holders of the notes.
According to the report, GM "has over $30 billion in available
liquidity," more than enough to cover the possible impact of the
lawsuit, Mr. Ammann said Thursday in U.S. Bankruptcy Court in
Manhattan. The damage estimate, disclosed in the company's August
quarterly report, was considered a potential upper end of a range,
he said. Mr. Ammann said that in the 24 hours leading up to GM's
filing at 7:57 a.m. on June 1, 2009, he helped to negotiate a
restructuring that kept GM Canada out of bankruptcy. He won a
deadline extension from the Canadian government and secured the
participation of Elliott Management Corp., with the goal of having
the U.S. parent remain a viable automaker, he said Thursday.
Lock-Up Agreement
According to Bloomberg, the last piece of the restructuring -- a
so-called lock-up agreement -- is the subject of a lawsuit brought
by creditors against hedge funds including Elliott and Fortress
Investment Group LLC. A trial began in August and continued
Thursday. The lock-up agreement was negotiated with Mr. Ammann
advising GM.
New York-based Morgan Stanley didn't hold any of the notes issued
by GM Nova Scotia Finance Co. at the time of the bankruptcy
filing, David Roman, a GM spokesman, said in an email. Morgan
Stanley bought some of the notes later in 2009 and signed the
lock-up agreement, according to court testimony. "I have no
recollection or knowledge, now or at the time, that Morgan Stanley
signed the lock-up agreement," Mr. Ammann testified Friday.
He said that he was "vaguely aware" that the bank's fixed-income
division did trading research on the notes later in 2009.
General unsecured creditors allege in the lawsuit that Fortress,
Elliott and other hedge funds steered events leading up to GM's
Chapter 11 filing to improperly benefit themselves and other
holders of notes.
Face Value
The report notes that through the lock-up agreement, the
noteholders secured a $3 billion claim against Old GM's estate,
far more than the $1 billion face value of the notes, according to
the complaint. The hedge funds say they didn't do anything
improper, and that if general creditors undo the agreement they
struck in the hours before the bankruptcy, it will scuttle the
entire deal that separated liabilities from GM's profitable
business, hurting the reorganized automaker. General Motors at
one point considered $285 million a fair price to keep its
Canadian unit out of bankruptcy, Mr. Ammann testified. At another
time, GM considered $234 million as the point where note holder
demands would be too much, and it would make more sense for GM
Canada to file for protection from creditors, according to
spreadsheets presented in court. "This is a narrow component of a
bigger judgment," Mr. Ammann said, adding that no one at the time
could put a number on the risks that a Canadian bankruptcy would
introduce to the planned restructuring of the U.S. parent.
Through the lawsuit, creditors seek to reduce or reverse some of
the hedge funds' claims, partly based on allegations that the
lock-up agreement wasn't completed until after the 7:57 a.m.
bankruptcy filing.
Judge's Review
According to Bloomberg, the creditors say that means the accord
should have been reviewed by U.S. Bankruptcy Judge Robert Gerber
before he approved the separation of Old GM from New GM on June 5,
2009. Judge Gerber, who issued a wind-down order sealing the
separation in 2011, is overseeing the current lawsuit. While all
creditors eventually reached agreements to be repaid in stock and
warrants in GM's bankruptcy, the lock-up agreement gave the hedge
funds a better deal at the expense of other parties, the general
creditors allege. They seek to have a $367 million consent fee
paid as part of the agreement revoked or considered a payment in
principle on the notes, and to have the noteholders' $2.67 billion
claim cut or subordinated to other claims.
'Pure Fabrication'
The report relates that the hedge funds say the tale told in the
lawsuit -- that a band of investors exerted leverage over the
Canadian and U.S. governments and extracted a recovery out of
proportion to their actual claim -- is "pure fabrication."
Mr. Matthew Stover, an analyst at Guggenheim Securities LLC who
covers New GM, said the lawsuit has the potential to damage the
company. "If the creditors were to win, this would be a massive
issue," Mr. Stover said in a phone interview before the hearing
Thursday. "It makes GM culpable for these liabilities -- cash
that shareholders think is on the balance sheet would belong to
someone else." The lock-up agreement was fully negotiated and
signed about 20 minutes before the bankruptcy was filed, and GM
was represented by the law firm Weil Gotshal & Manges LLP in the
transaction. "Certain non-material scrivener errors" that may
have been agreed to after the agreement was negotiated shouldn't
count, the hedge funds said in court papers. Mr. Ammann, who was
advising GM as a managing director with Morgan Stanley, said in an
e-mail to GM Vice President Walter Borst written at 6:49 a.m.
that, "We are done," according to exhibits filed in court records.
'Clear Preference'
"Excellent. And not a moment too soon," Mr. Borst replied at 6:50
a.m., according to the exhibit. GM Canada would have had to enter
bankruptcy along with the U.S. parent had the transaction not been
complete before the parent's filing, Mr. Ammann said in a
deposition. "There was a clear preference as a business matter
not to file GM Canada," Mr. Ammann said in the deposition. "At
the same time, there was a requirement from the Canadian
government and the U.S. Treasury to file GM Canada if we had not
resolved all of the outstanding issues relating to the Nova Scotia
bondholders" as well as two other concerns: car dealers and the
Canadian Auto Workers union. GM has said in court papers that the
lawsuit's claims "threaten to disturb" the sale that saved the
company. The agreement resolved a dispute over intercompany loans
and allowed the U.S. and Canadian governments to buy GM Canada
without requiring a separate bankruptcy, GM said.
'Chaotic Situation'
The Bloomberg report discloses that voiding the lock-up agreement
"could create a chaotic situation for GM Canada, spawn new
litigation in other forums, and potentially provide a windfall to
the noteholders," lawyers for GM wrote in court papers. The
8.375% notes due in 2015 recently traded at 43.87 cents on the
dollar and the 8.875% notes due in 2023 recently traded at 43.75
cents on the dollar, according to Trace, the bond price reporting
system of the Financial Regulatory Authority. Motors Liquidation
Co.'s bankruptcy plan repays general unsecured creditors through a
trust with stock and two series of warrants, according to court
papers. The GUC Trust is bringing the lawsuit on behalf of
general unsecured creditors. Units of the GUC Trust rose 3 cents
to $16.45 Thursday in over-the-counter trading.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of
the world's largest automakers, traces its roots back to 1908.
GM employs 208,000 people in every major region of the world and
does business in more than 120 countries. GM and its strategic
partners produce cars and trucks in 30 countries, and sell and
service these vehicles through the following brands: Baojun,
Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang,
Opel, Vauxhall, and Wuling. GM's largest national market is
China, followed by the United States, Brazil, the United Kingdom,
Germany, Canada, and Italy. GM's OnStar subsidiary is the
industry leader in vehicle safety, security and information
services.
General Motors Co. was formed to acquire the operations of
General Motors Corp. through a sale under 11 U.S.C. Sec. 363
following Old GM's bankruptcy filing. The U.S. government once
owned as much as 60.8% stake in New GM on account of the
financing it provided to the bankrupt entity. The deal was
closed July 10, 2009, and Old GM changed its name to Motors
Liquidation Co.
General Motors Corp. and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31, 2011.
GENWORTH MORTGAGE: Moody's 'Ba1' IFS Rating Remains Under Review
----------------------------------------------------------------
Moody's Investors Service continues to review for downgrade the
ratings of Genworth Financial, Inc. (senior debt at Baa3) and the
insurance financial strength (IFS) ratings of its US Mortgage
Insurance (MI) operating companies. Moody's initially placed the
ratings on review for downgrade on June 27, 2012.
Ratings Rationale
Holding Company
Commenting on the continuation of the review for downgrade of
Genworth, Senior Vice President Scott Robinson said: "Moody's will
continue to focus on the evaluation of holding company financial
flexibility over the near to medium term. We will consider
management actions and plans to enhance financial flexibility,
limit the potential downside impact of the lower-rated US MI
business on the rest of the operations, as well as the magnitude
of potential parental support for the MI business."
The rating agency noted that Genworth's Baa3 senior debt rating is
currently 3 notches lower than the A3 IFS ratings of the company's
life insurance operating entities, the standard notching practice
for insurance groups. Prior to the June 27 rating action in which
the IFS rating of the life insurance operating entities was
lowered by one notch, the notching differential between the life
insurance operating entities and the holding company was 4
notches, a reflection of the lower credit profile and downside
risks of the US MI operations, including its potential need for
additional support.
US Mortgage Insurance (GMICO)
Genworth Mortgage Insurance Corporation's ('GMICO'- collectively
all rated US MI operating company affiliates) Ba1 IFS rating was
also placed on review for downgrade in the June 27 rating action
due to the uncertainty about the strength of its parent (under
review for possible downgrade) and the likelihood and magnitude of
future capital support. The review will evaluate GMICO's ability
to continue writing new business given the firm's high risk to
capital level and parameters of regulatory and counterparty
forbearance. Other issues in consideration are the firm's
contemplated structural alternatives.
GMICO's Ba1 IFS rating reflects the firm's modest capitalization,
continued dependence on regulatory forbearance to write new
business and some implicit support from its parent. The rating
also takes into consideration the weak credit trends in the US
housing market, substantial remaining uncertainty about the role
of private mortgage insurers in the post mortgage-reform
environment and improved underwriting prospects for GMICO
following the exit of two competitors.
Rating Drivers - holding company
According to Moody's, the following could lead to a confirmation
of the holding company's ratings: 1) De-linkage from the US MI
operations so that a downside scenario would not impact holding
company creditors or determination that a downside scenario would
have a modest impact on the group; 2) Capital actions that enhance
holding company financial flexibility without hurting long-term
earnings power of the company. On the other hand, the following
could result in a downgrade of the holding company's ratings: 1)
Failure to de-link the US MI from holding company creditors or the
expectation that a downside scenario would have more than a modest
impact on the group; 2) Failure to take capital actions that
enhance holding company financial flexibility without hurting
long-term earnings power of the company.
Rating Drivers -- US mortgage insurance
The following factors could lead to confirmation of the ratings of
the US mortgage insurance subsidiaries: 1) Greater certainty about
ability to maintain new business flows over the medium term (12-24
months); 2) Parent's willingness to provide capital support; 3)
Significant improvement in rate of new delinquencies and/or cures;
4) Statutory loss ratio less than 100%; and 5) A regulatory
framework that improves the market opportunity for private
mortgage insurers.
Conversely, the following factors could lead to a downgrade of
GMICO: 1) Weakening parental support of the US MI operation; 2)
Non-renewal of GSE and regulatory agreement/forbearance when they
expire; 3) Restructuring of operations that would result in
reduced new business flows for the flagship company, Genworth
Mortgage Insurance Corporation; and 4) Risk to Capital greater
than 40x
The principal methodologies used in this rating were "Moody's
Global Rating Methodology for Life Insurers," published in May
2010 and "Moody's Global Rating Methodology for the Mortgage
Insurance Industry" published in February 2007.
The following ratings remain on review for downgrade:
Genworth Financial, Inc. - senior unsecured debt rating at Baa3,
junior subordinated debt rating at Ba1(hyb), senior unsecured
shelf rating at (P)Baa3, subordinate shelf rating at (P)Ba1,
preferred shelf rating at (P)Ba2, short-term debt rating for
commercial paper at P-3;
Genworth Mortgage Insurance Corporation - insurance financial
strength rating at Ba1;
Genworth Residential Mortgage Insurance Corporation of NC -
insurance financial strength rating at Ba1.
Genworth Seguros de Credito a la Vivienda - insurance financial
strength rating at Baa3, national scale insurance financial
strength rating at Aa3.mx
Genworth Financial, Inc., headquartered in Richmond, Virginia,
reported total assets of $113 billion and total shareholders'
equity of $17.0 billion as of June 30, 2012.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to pay punctually senior
policyholder claims and obligations.
Moody's National Scale Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within
a country, enabling market participants to better differentiate
relative risks. NSRs differ from Moody's global scale ratings in
that they are not globally comparable with the full universe of
Moody's rated entities, but only with NSRs for other rated debt
issues and issuers within the same country. NSRs are designated by
a ".nn" country modifier signifying the relevant country, as in
".mx" for Mexico.
GETTY IMAGES: Moody's Lowers Corporate Family Rating to 'B2'
------------------------------------------------------------
Moody's Investors Service downgraded Getty Images, Inc.'s
Corporate Family Rating (CFR) two notches to B2 from Ba3 and the
Probability of Default Rating (PDR) to B2 from B1. Moody's also
assigned B1, LGD3 -- 38% ratings each to the proposed $150 million
1st lien senior secured revolver and $1,900 million 1st lien
senior secured term loan as well as a Caa1, LGD6 -- 90% rating to
the proposed senior unsecured notes. The new debt instruments are
being issued to fund the acquisition of the parent of Getty Images
by an affiliate of The Carlyle Group. The downgrades reflect the
increased amount of funded debt and related interest expense
resulting in higher debt-to-EBITDA leverage and weaker coverage
ratios. The rating outlook remains stable.
Downgraded:
Issuer: Getty Images, Inc. and Abe Investment Holdings, Inc.
Corporate Family Rating: Downgraded to B2 from Ba3
Probability of Default Rating: Downgraded to B2 from B1
Assigned:
Issuer: Getty Images, Inc. and Abe Investment Holdings, Inc.
$150 million 1st Lien Sr Secured Revolver: Assigned B1, LGD3
-- 38%
$1,900 million 1st Lien Sr Secured Term Loan: Assigned B1,
LGD3 -- 38%
$550 million Senior Unsecured Notes: Assigned Caa1, LGD6 --
90%
Outlook Actions:
Issuer: Getty Images, Inc. and Abe Investment Holdings, Inc.
Outlook is Stable
To be withdrawn upon closing of the transaction:
Issuer: Getty Images, Inc.
$100 Million 1st lien sr secured revolver due November 2015:
Ba3, LGD3 -- 32%
Incremental $275 million 1st lien sr secured term loan due
November 2015: Ba3, LGD3 -- 32%
1st lien sr secured term loan B due November 2016: Ba3, LGD3
-- 32%
Ratings Rationale
Getty Images' B2 corporate family rating reflects very high
leverage with debt-to-EBITDA of 6.7x for June 30, 2012 (including
Moody's standard adjustments) and pro forma for the pending
acquisition by The Carlyle Group ("Carlyle") which increases
funded debt balances by more than $850 million and adds more than
$60 million to interest expense. Absent tuck-in acquisitions,
leverage ratios could improve to less than 6.0x over the rating
horizon as free cash flow is applied to reduce debt balances.
Although revenue is expected to be flat in FY2012 compared to the
prior year, EBITDA is expected to grow in the mid-single digit
percentage range reflecting the benefits of recent cost-cutting
initiatives. Muted revenue growth for continuing operations
reflects the decline in traditional premium stills business being
offset largely by growth in the midstock business. Looking
forward, Moody's view is that the company will achieve revenue
growth in the low single-digit percentage range reflecting
increasing demand for midstock imagery products and flat demand
for higher end premium products. Ratings incorporate Moody's
expectations for a continued economic recovery in the U.S. (the
Americas account for 47% of revenues) and very modest growth in
Europe (the EMEA regions account for 37% of revenues) accompanied
by soft demand for advertising related imagery products in this
region. Although there will be a focus on expense reduction and
driving greater efficiencies with technology and offshoring,
Moody's believes the majority of margin expansion has been
achieved as current 38% EBITDA margins resulted from recent cost
initiatives and represent significant improvement compared to 32%
margins in 2009. Furthermore, Moody's believes future revenue
growth will likely require incremental investment in operations to
support international expansion and new product development.
Moody's believes event risk is high based on the company's
acquisitive nature, ongoing plans to expand internationally, and
shareholder-friendly financial policies. Consequently, debt
balances could remain elevated. Ratings are supported by Getty
Images' leading market position in stock imagery, geographic
diversification of its customer base, and stable EBITDA margins.
The company's ratings also consider the mature stage of its
traditional higher quality premium stills business, the increasing
supply of lower priced digital imagery, as well as potential
threats from existing and new competitors or technologies. Getty
Images is a leader in its field and is strong in the higher end
segment with 75% of premium stills content, 50% of iStockphoto
content and nearly all of editorial stills content being exclusive
(as of June 30, 2012); however, Moody's believes barriers to entry
are lower for the price sensitive segments. Increased demand for
the company's lower priced imagery products historically offset
weakness in the traditional segment; however, there are risks
related to the potential for increased competition, especially in
the lower end stock imagery segment. Getty Images' video and music
businesses provide some revenue diversification away from still
photography; however, their combined sales represent less than 11%
of total revenues. Accordingly, Moody's believes it is important
that Getty Images reduces debt balances to increase financial
flexibility to make the necessary investments in its products and
services to retain its leading position in photography especially
in a scenario of increasing competition in the U.S. and abroad.
Liquidity is expected to be good with cash balances of a minimum
$15 million to $20 million over the rating horizon plus low to
mid-single digit percentage free cash flow-to-debt ratios.
The stable rating outlook reflects Moody's expectation that demand
for Getty Images' lower priced imagery products and for its new
services will largely offset mature demand for the company's
premium imagery business, notwithstanding Moody's view that
competition is increasing particularly in the midstock segment.
Moody's also believes Getty Images' consolidated revenues will
increase modestly over the rating horizon tracking expectations
for low to mid single-digit GDP growth through the end of 2013 in
the U.S. accompanied by very modest GDP growth in Europe, and that
free cash flow will be applied to reduce term loan balances. The
stable outlook incorporates Moody's view that debt-to-EBITDA
ratios will decrease below current levels providing for more
flexibility to fund tuck-in acquisitions with excess cash or short
term revolver advances. The outlook does not incorporate sizable
debt financed acquisitions or distributions over the rating
horizon. Moody's assumes liquidity will remain good with improving
EBITDA cushion to financial covenants. Ratings could be downgraded
if debt-to-EBITDA ratios are not improved from initial levels or
if overall performance were to deteriorate due to increased
competition or weak demand in one or more key markets resulting in
declining revenues, erosion in EBITDA margins, or reduced cushion
to financial covenants. Another leveraging event, including
sizable debt financed acquisitions, or distributions resulting in
debt-to-EBITDA ratios rising above current levels (including
Moody's standard adjustments) could lead to a downgrade. Ratings
could be considered for an upgrade if debt-to-EBITDA leverage
ratios are sustained below 5.0x with free cash flow-to-debt ratios
of a minimum 5%. Management would also need to provide assurances
that operating and financial policies would be consistent with the
higher rating.
The principal methodology used in rating Getty Images was the
Broadcast and Advertising Related Industry Methodologies published
in May 2012. 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 Seattle, WA, Getty Images is a leading creator
and distributor of still imagery, video and multimedia products,
as well as a recognized provider of other forms of premium digital
content, including music. The company provides stock images,
music, video and other digital content through several web sites,
most notably gettyimages.com, istockphoto.com, jupiterimages.com,
and thinkstock.com. In August 2012, The Carlyle Group entered into
an agreement to acquire a controlling indirect interest in Getty
Images in a transaction valued at approximately $3.3 billion (up
from the $2.4 billion transaction value of the prior LBO in 2008).
The Carlyle Group will own approximately 51% of the company with a
trust representing certain Getty family members owning
approximately 49%. Revenues totaled $939 million through the 12
months ended June 30, 2012.
GETTY IMAGES: S&P Cuts CCR to 'B' on Higher Debt Levels; Off Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Seattle-based Getty Images Inc. to 'B' from 'BB-' and
removed it from CreditWatch, where S&P placed the rating with
negative implications on Aug. 20, 2012, following the company's
announcement that it will be acquired by the private-equity
investor The Carlyle Group L.P. The rating outlook is stable.
"At the same time, we assigned Getty Images Inc.'s proposed $2.05
billion first-lien credit facilities our issue-level rating of 'B'
(at the same level as our 'B' corporate credit rating on the
company). The recovery rating on this debt is '3', indicating our
expectation of meaningful (50% to 70%) recovery for lenders in the
event of a payment default. The facility consists of a $150
million revolving credit facility due 2017 and a $1.9 billion term
loan due 2019," S&P said.
"We also assigned Getty Images Inc.'s proposed $550 million
unsecured notes due 2020 our issue-level rating of 'CCC+' (two
notches lower than our 'B' corporate credit rating on the
company). The recovery rating on this debt is '6', indicating our
expectation of negligible (0% to 10%) recovery for lenders in the
event of a payment default. Getty Images plans to use the
aggregate debt proceeds, along with $986 million of equity,
including new equity contributed by The Carlyle Group and rollover
equity from the Getty family and management, to finance the $3.3
billion acquisition," S&P said.
"Issue-level ratings on Getty Images' existing senior secured term
loan due 2016 and senior secured term loan due 2015 remain on
CreditWatch with negative implications and will be withdrawn once
the acquisition is completed, which we expect will occur in the
fourth quarter of 2012," S&P said.
"The downgrade reflects Standard & Poor's view that higher debt
levels and interest expense associated with the Carlyle's proposed
acquisition of Getty Images will weaken the company's financial
profile," said Standard & Poor's credit analyst Daniel Haines.
"In our view, the company's financial risk profile is 'highly
leveraged' (based on our criteria). Upon the completion of the
acquisition, we expect debt (adjusted for operating leases) to
EBITDA to increase to about 7.1x, up from about 4.6x as of June
30, 2012. The rating outlook is stable and reflects our near-term
expectations of revenue and EBITDA growth at a low- to mid-single-
digit percentage rate, adequate liquidity, and leverage
reduction," S&P said.
"The 'B' rating on Getty reflects our expectation that operating
performance will be stable, but we anticipate moderate revenue and
EBITDA growth over the near term because of weak macroeconomic
conditions. The company's financial profile is 'highly leveraged'
because of its private-equity ownership and substantial leverage.
We regard Getty's business profile as 'fair' because of its
leading market position and strong EBITDA margin. This is tempered
by our expectation that unfavorable secular trends related to
print advertising will continue to put some pressure on the
company's traditional premium stills business," S&P said.
GREEN EARTH: Incurs $11.3 Million Net Loss in Fiscal 2012
---------------------------------------------------------
Green Earth Technologies, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $11.26 million on $7.38 million of net sales for the
year ended June 30, 2012, compared with a net loss of $12.21
million on $7.50 million of net sales during the prior fiscal
year.
The Company's balance sheet at June 30, 2012, showed $3.59 million
in total assets, $12.10 million in total liabilities, and a
$8.50 million total stockholders' deficit.
Friedman LLP, in East Hanover, New Jersey, issued a "going
concern" qualification on the consolidated financial statements
for the fiscal year ended June 30, 2012. The independent auditors
noted that the Company's losses, negative cash flows from
operations, working capital deficit and its ability to pay its
outstanding liabilities through fiscal 2013 raise substantial
doubt about its ability to continue as a going concern.
A copy of the Form 10-K is available for free at:
http://is.gd/FGD6Im
About Green Earth Technologies
White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB:
GETG) -- http://www.getg.com/-- markets, sells and distributes
bio-degradable performance and cleaning products. The Company's
product line crosses multiple industries including the automotive
aftermarket, marine and outdoor power equipment markets.
HAMPTON ROADS: CapGen Capital Discloses 30% Equity Stake
--------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, CapGen Capital Group VI LP and its affiliates
disclosed that as of Sept. 27, 2012, they beneficially own
51,024,981 shares of common stock of Hampton Roads Bankshares,
Inc., representing 30% of the shares outstanding. CapGen Capital
previously reported beneficial ownership of 6,375,584 common
shares or a 19.2% equity stake as of May 21, 2012. A copy of the
amended filing is available for free at http://is.gd/PqqKxP
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010.
The Company's balance sheet at June 30, 2012, showed $2.07 billion
in total assets, $1.92 billion in total liabilities, and
$149.34 million in total shareholders' equity.
HAMPTON ROADS: Carlyle Group Discloses 24.9% Equity Stake
---------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Carlyle Group Management L.L.C. and its
affiliates disclosed that as of Sept. 27, 2012, they beneficially
own 42,398,583 shares of common stock of Hampton Roads Bankshares,
Inc., representing 24.9% of the shares outstanding. Carlyle Group
previously reported beneficial ownership of 26,391,440 common
shares as of June 27, 2012. A copy of the amended filing is
available for free at http://is.gd/IRIZTS
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010.
The Company's balance sheet at June 30, 2012, showed $2.07 billion
in total assets, $1.92 billion in total liabilities, and
$149.34 million in total shareholders' equity.
HAMPTON ROADS: Raises $45MM Add'l Capital from Rights Offering
--------------------------------------------------------------
Hampton Roads Bankshares, Inc., announced the closing of a common
stock rights offering and standby purchase of shares not sold in
the Rights Offering, in which it issued 64,287,848 common shares
and raised $45,001,494 in additional capital.
Douglas J. Glenn, president and chief executive officer of the
Company and chief executive officer of The Bank of Hampton Roads
said, "The successful completion of this rights offering and the
associated private placement reinforces the capital foundation of
the Company, builds on the positive trends in our operations and
financial results and provides additional support to our
experienced team of community bankers as they focus on meeting the
banking needs of the families and businesses in our markets. We
remain sharply focused on continuing our positive momentum."
The Company issued 21,000,687 shares of common stock, at a price
of $0.70 per share, to holders of its common stock who elected to
participate in the Rights Offering.
In connection with the Rights Offering, the Company entered into a
Standby Purchase Agreement with the following entities or their
affiliates or managed funds: The Carlyle Group, L.P., Anchorage
Capital Group, L.L.C., and CapGen Capital Group VI LP. The
Standby Purchase Agreement provided that the Investors would not
exercise their basic subscription rights and instead would
purchase from the Company, at the subscription price, a portion of
the shares, if any, up to an aggregate of 53,518,176 shares, not
subscribed for in the Rights Offering. Pursuant to the terms of
the Standby Purchase Agreement, the Investors purchased 43,287,161
shares of common stock at $0.70 per share.
The Company will use the proceeds of the Rights Offering for
general corporate purposes.
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010.
The Company's balance sheet at June 30, 2012, showed $2.07 billion
in total assets, $1.92 billion in total liabilities, and
$149.34 million in total shareholders' equity.
HAMPTON ROADS: Anchorage Advisors Discloses 24.9% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Anchorage Advisors Management, LLC, and its
affiliates disclosed that as of Sept. 27, 2012, they beneficially
own 42,398,582.80 shares of common stock of Hampton Roads
Bankshares, Inc., representing 24.9% of the shares outstanding.
On Aug. 6, 2012, Hampton Roads commenced a Rights Offering. The
Rights Offering expired on Sept. 5, 2012.
Anchorage, et al., agreed to serve as standby purchasers of all or
a portion of the shares offered but not purchased in the Rights
Offering in accordance with the terms of the Standby Purchase
Agreement. As a result, on Sept. 27, 2012, Anchorage's subsidiary
ACMO-HR, LLC, purchased 16,007,143 Common Shares at the closing of
the Standby Purchase Commitment at a purchase price of $0.70 per
Common Share.
Anchorage previously reported beneficial ownership of 26,391,439
common shares as of June 27, 2012.
A copy of the amended filing is available for free at:
http://is.gd/auzixz
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) --
http://www.hamptonroadsbanksharesinc.com/-- is a bank holding
company that was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of Hampton
Roads, which opened for business in 1987, and Shore Bank, which
opened in 1961. Currently, Bank of Hampton Roads operates twenty-
eight banking offices in the Hampton Roads region of southeastern
Virginia and twenty-four offices in Virginia and North Carolina
doing business as Gateway Bank & Trust Co. Shore Bank serves the
Eastern Shore of Maryland and Virginia through eight banking
offices and fifteen ATMs.
Effective June 17, 2010, the Company and its banking subsidiary,
Bank of Hampton Roads ("BOHR"), entered into a written agreement
with the Federal Reserve Bank of Richmond and the Bureau of
Financial Institutions of the Virginia State Corporation
Commission. The Company's other banking subsidiary, Shore Bank,
is not a party to the Written Agreement.
Under the terms of the Written Agreement, among other things, BOHR
agreed to develop and submit for approval plans to (a) strengthen
board oversight of management and BOHR's operations, (b)
strengthen credit risk management policies, (c) improve BOHR's
position with respect to loans, relationships, or other assets in
excess of $2.5 million which are now, or may in the future become,
past due more than 90 days, are on BOHR's problem loan list, or
adversely classified in any report of examination of BOHR, (d)
review and revise, as appropriate, current policy and maintain
sound processes for determining, documenting, and recording an
adequate allowance for loan and lease losses, (e) improve
management of BOHR's liquidity position and funds management
policies, (f) provide contingency planning that accounts for
adverse scenarios and identifies and quantifies available sources
of liquidity for each scenario, (g) reduce the Bank's reliance on
brokered deposits, and (h) improve BOHR's earnings and overall
condition.
The Company reported a net loss of $98 million in 2011, compared
with a net loss of $210.35 million in 2010.
The Company's balance sheet at June 30, 2012, showed $2.07 billion
in total assets, $1.92 billion in total liabilities, and
$149.34 million in total shareholders' equity.
HAWKER BEECHCRAFT: FCA Claims Not Dischargeable, Relators Say
-------------------------------------------------------------
Lisa Uhlman at Bankruptcy Law360 reports that former employees of
a Hawker Beechcraft Inc. subcontractor asked a New York bankruptcy
judge Friday not to discharge debt potentially due to the
government in a False Claims Act suit alleging the debtor's
misrepresentations induced the U.S. to pay $763 million for
"suspect" planes.
Bankruptcy Law360 says the plaintiffs, Donald Minge and David
Kiehl, are relators in a five-year-old False Claims Act lawsuit
filed against the debtor in Kansas federal court alleging HBC made
false statements and misrepresentations in selling King Air and
military T-6A aircraft to the government.
About Hawker Beechcraft
Hawker Beechcraft Inc., a designer and manufacturer of light and
medium-sized jet, turboprop and piston aircraft, filed for Chapter
11 reorganization together with 17 affiliates (Bankr. S.D.N.Y.
Lead Case No. 12-11873) on May 3, 2012, having already negotiated
a plan that eliminates $2.5 billion in debt and $125 million of
annual cash interest expense.
The plan, to be filed by June 30, will give 81.9% of the new stock
to holders of $1.83 billion of secured debt, while 18.9% of the
new shares are for unsecured creditors. The proposal has support
from 68% of secured creditors and holders of 72.5% of the senior
unsecured notes.
Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp. The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in total
liabilities and a $956.90 million total deficit. Other claims
include pensions underfunded by $493 million. Hawker Beechcraft
disclosed assets of $1,831,097 plus undetermined amounts, and
liabilities of $1,704,736,958 plus undetermined amounts.
Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy
Solutions LLC is the claims and notice agent.
Sidley Austin LLP serves as legal counsel and Houlihan Lokey
Howard & Zukin Capital Inc. serves as financial advisor to the DIP
Agent and the Prepetition Agent.
Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of
senior secured prepetition lenders holding 70% of the loans.
Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee
of holders of the 8.500% Senior Fixed Rate Notes due 2015 and
8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker
Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes
Company. The members of the Ad Hoc Committee -- GSO Capital
Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims
or manage accounts that hold claims against the Debtors' estates
arising from the purchase of the Senior Notes. Deutsche Bank
National Trust Company, the indenture trustee for senior fixed
rate notes and the senior PIK-election notes, is represented by
Foley & Lardner LLP.
An Official Committee of Unsecured Creditors appointed in the case
has selected Daniel H. Golden, Esq., and the law firm of Akin Gump
Strauss Hauer & Feld LLP as legal counsel. The Committee tapped
FTI Consulting, Inc., as its financial advisor.
HAWKER BEECHCRAFT: Bank Debt Trades at 34% Off in Secondary Market
------------------------------------------------------------------
Participations in a syndicated loan under which Hawker Beechcraft
is a borrower traded in the secondary market at 65.50 cents-on-
the-dollar during the week ended Friday, Sept. 28, 2012, a drop of
7.17 percentage points from the previous week according to data
compiled by LSTA/Thomson Reuters MTM Pricing and reported in The
Wall Street Journal. The Company pays 200 basis points above
LIBOR to borrow under the facility. The bank loan matures on
March 26, 2014. The loan is one of the biggest gainers and losers
among 181 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Hawker Beechcraft
Hawker Beechcraft Acquisition Company, LLC, headquartered in
Wichita, Kansas, manufactures business jets, turboprops and piston
aircraft for corporations, governments and individuals worldwide.
Hawker Beechcraft reported a net loss of $631.90 million on
$2.43 billion of sales in 2011, compared with a net loss of
$304.30 million on $2.80 billion of sales in 2010.
Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11
reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3,
2012, having already negotiated a plan that eliminates $2.5
billion in debt and $125 million of annual cash interest expense.
The plan will give 81.9% of the new stock to holders of $1.83
billion of secured debt, while 18.9% of the new shares are for
unsecured creditors. The proposal has support from 68% of secured
creditors and holders of 72.5% of the senior unsecured notes.
Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp. The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in total
liabilities and a $956.90 million total deficit. Other claims
include pensions underfunded by $493 million.
Hawker's legal representative is Kirkland & Ellis LLP, its
financial advisor is Perella Weinberg Partners LP and its
restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy
Solutions LLC is the claims and notice agent.
Sidley Austin LLP serves as legal counsel and Houlihan Lokey
Howard & Zukin Capital Inc. serves as financial advisor to the DIP
Agent and the Prepetition Agent.
Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of
senior secured prepetition lenders holding 70% of the loans.
Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee
of holders of the 8.500% Senior Fixed Rate Notes due 2015 and
8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker
Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes
Company. The members of the Ad Hoc Committee -- GSO Capital
Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims
or manage accounts that hold claims against the Debtors' estates
arising from the purchase of the Senior Notes. Deutsche Bank
National Trust Company, the indenture trustee for senior fixed
rate notes and the senior PIK-election notes, is represented by
Foley & Lardner LLP.
An Official Committee of Unsecured Creditors appointed in the case
has selected Daniel H. Golden, Esq., and the law firm of Akin Gump
Strauss Hauer & Feld LLP as legal counsel.
HAWKER BEECHCRAFT: Facing Bid to Pursue Case Over False Claims Act
------------------------------------------------------------------
The Associated Press reports Donald Minge and David Kiehl, former
employees of a subcontractor of Hawker Beechcraft, and who sued
the company more than five years ago under the False Claims Act,
which allows citizens to bring claims on behalf of the government,
have appeared in bankruptcy court to ask the judge to find that
their claims are not dischargeable in bankruptcy. Messrs. Minge
and Kiehl argued that because they are prosecuting the false
actions claim on behalf of the government, the debt is owed to "a
domestic governmental unit." They are also seeking costs and
attorney fees.
AP says Hawker Beechcraft has not yet filed its answer to the
bankruptcy court, but the company has vehemently fought the
allegations in original court proceedings. According to AP, a
company spokeswoman did not immediately respond to an email
seeking comment.
AP recounts Hawker Beechcraft subcontracted with TECT Aerospace
Wellington, Inc., a manufacturer of aerospace structures, to
produce some parts. The suit claims that the subcontractor used
unapproved processes that made the parts brittle and subject to
corrosion and premature failure. It claims Hawker Beechcraft knew
about the problems and didn't tell the government.
AP says the United States notified the court in 2009 that it was
declining to join the case, although the government has kept tabs
on it and reserved its right to intervene at a later date.
AP recounts the claims involve the sale of military training
aircraft known as Texan T-6, or the Joint Primary Aircraft
Training System (JPATS) trainer aircraft. It also alleges
misrepresentations in the sale of specially modified King Air
airplanes. At issue in the case is the sale of 48 planes, which
the plaintiffs say represent misrepresentations involving all 347
planes sold.
AP relates the 151-page complaint alleges the government's damages
are more than $763 million because the alleged misrepresentations
induced it to accept the planes, which are now in suspect
condition and will need their wings inspected or replaced.
AP notes the False Claims Act allows for treble damages -- three
times the amount of original damages -- and the plaintiffs contend
they are also entitled to $3.8 million in fines alone.
AP relates TECT Aerospace has said in court filings that any
manufacturing processes it may have used that were not expressly
authorized were not material to the design or airworthiness of the
planes.
About Hawker Beechcraft
Hawker Beechcraft Inc., a designer and manufacturer of light and
medium-sized jet, turboprop and piston aircraft, filed for
Chapter 11 reorganization together with 17 affiliates (Bankr.
S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012
Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and
49%-owned by Onex Corp. The Company's balance sheet at Dec. 31,
2011, showed $2.77 billion in total assets, $3.73 billion in
total liabilities and a $956.90 million total deficit. Other
claims include pensions underfunded by $493 million.
Judge Stuart Bernstein oversees the case. Hawker's legal
representative is Kirkland & Ellis LLP, its financial advisor is
Perella Weinberg Partners LP and its restructuring advisor is
Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and
notice agent, and administrative advisor. PricewaterhouseCoopers
LLP is accounting consultants and independent auditors.
Sidley Austin LLP serves as legal counsel and Houlihan Lokey
Howard & Zukin Capital Inc. serves as financial advisor to the
DIP Agent and the Prepetition Agent.
The Senior Secured Lenders' legal representative is Wachtell
Lipton Rosen & Katz and their financial advisor is Houlihan
Lokey.
Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of
senior secured prepetition lenders holding 70% of the loans.
Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc
committee of holders of the 8.500% Senior Fixed Rate Notes due
2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued
by Hawker Beechcraft Acquisition Company LLC and Hawker
Beechcraft Notes Company. The members of the Ad Hoc Committee --
GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC
-- hold claims or manage accounts that hold claims against the
Debtors' estates arising from the purchase of the Senior Notes.
Deutsche Bank National Trust Company, the indenture trustee for
senior fixed rate notes and the senior PIK-election notes, is
represented by Foley & Lardner LLP.
An Official Committee of Unsecured Creditors appointed in the
case has selected Daniel H. Golden, Esq., and the law firm of
Akin Gump Strauss Hauer & Feld LLP as legal counsel. The
Committee tapped FTI Consulting, Inc., as its financial advisor.
When it filed for bankruptcy, Hawker already negotiated a
restructuring support agreement that eliminates $2.5 billion in
debt and $125 million of annual cash interest expense. That plan
was filed June 30, 2012. The plan proposes to give 81.9% of the
new stock to holders of $1.829 billion of secured debt, reserving
18.9% for unsecured creditors. The restructuring support
agreement stated the $780.9 million in unsecured deficiency claims
of secured lenders are to participate in the pool of unsecured
claims to share in 18.9% of the new equity. The unsecured
recovery that otherwise would go to holders of $308 million in
subordinated note claims will be directed to senior unsecured
noteholders.
In July 2012, Hawker unveiled a deal to sell the bulk of its
businesses for $1.79 billion to Chinese company Superior Aviation
Beijing Co. Hawker won Court approval to enter into exclusive
negotiations with Superior Aviation. As part of the exclusivity
agreement, Superior made payments to Hawker to sustain the
Debtor's jet business.
If negotiations with Superior are not concluded in a timely
manner, Hawker said it will proceed with seeking confirmation of
the June 30 Plan of Reorganization.
Superior's legal representative is Locke Lord LLP and its
financial advisor is Grant Thornton.
HERITAGE CONSOLIDATED: Court Approves Barg & Henson as Accountant
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Heritage Consolidated LLC, et al., to employ Barg &
Henson, P.C., as accountants, nunc pro tunc to July 30, 2012.
As reported in the Troubled Company Reporter on Sept. 13, 2012,
Barg & Henson will prepare the Debtors' federal income tax returns
for the years 2009, 2010 and 2011, and the Debtors' Texas
franchise tax reports.
The Debtors said that Barg & Henson has no known relationship or
connection with the Debtors' creditors, other parties-in-interest,
their respective professionals, the United States Trustee, or any
person employed in the Office of the United States Trustee that
would cause a possible disqualification or conflict of interest in
this Bankruptcy case.
The Debtors will pay Barg & Henson its reasonable fees and
expenses upon the submission, and the Court's approval, of the
firm's fee applications.
About Heritage Consolidated
Heritage Consolidated LLC is a privately held company whose core
operations consist of exploration for, and acquisition,
production, and sale of, crude oil and natural gas.
Heritage Consolidated filed a Chapter 11 petition (Bankr. N.D.
Tex. Case No. 10-36484) on Sept. 14, 2010, in Dallas, Texas.
Its affiliate, Heritage Standard Corporation, also filed for
Chapter 11 protection (Bankr. N.D. Tex. Case No. 10-36485). The
Debtors each estimated assets and debts of $10 million to
$50 million.
The Debtors tapped Malouf & Nockels LLP's as special counsel;
Munsch Hardt Kopf & Harr, P.C.; Rochelle McCullough, LLP; HSC, RM
LLP as special bankruptcy counsel to HSC; and Bridge Associates,
LLC, as financial advisor and designate Scott Pinsonnault as
interim chief restructuring officer.
The U.S. Trustee for Region 6 formed an Official Committee of
Unsecured Creditors in the Chapter 11 cases.
HOUSING AND ECONOMIC: Judge Encouraged by Progress in Receivership
-----------------------------------------------------------------
Paul Koepp at the Kansas Business Journal reports that U.S.
District Judge Gary Fenner, the federal judge overseeing the
receivership of a key Kansas City housing agency, said he is
"encouraged" by the city's progress in drawing up development
plans for the agency's properties.
U.S. District Judge Gary Fenner said things are on track for the
Housing and Economic Development Financial Corp. to get out from
under his control a year from now, meeting the schedule he set in
January 2011, according to the report.
However, the report notes that several obstacles remain. The
report relates that two critical projects ? a student housing
development for University of Missouri-Kansas City students in
Beacon Hill and a nearby grocery store planned by Truman Medical
Center ? face challenges.
The report says that the UMKC project relies on the Missouri
Development Finance Board approving tax credits to build a parking
garage, but the board's staff has raised concerns about giving the
incentive while the HEDFC still owns the property. Also, the MDFB
rarely supports higher education projects, the report relates.
Developer Hugh Zimmer hopes to get the project on the MDFB's
Oct. 16 agenda, and the University of Missouri Board of Curators
could take it up in December, the report relays.
The report discloses that TMC's negotiations with Ball Foods about
operating the grocery store have ended unsuccessfully. Former
state Sen. Charlie Shields is working to explore other options,
and TMC also has retained Lathrop & Gage LLP real estate lawyer
Jerry Riffel, the report notes.
The report relates that Kansas City Attorney Galen Beaufort and
receiver David Bahner updated the court on several other projects:
* The receiver is transferring property for Holy Temple Homes,
a $35 million veteran housing project by Catholic Charities
of Kansas City-St. Joseph and Yarco Cos. next to the Kansas
City VA Medical Center. The city engineer has received bids
for grading work at the site.
* A project to restore the historic Colonnades apartment
buildings in Beacon Hill was set back in late July when one
of the buildings burned to the ground. The City Council
approved an emergency ordinance to ask the receiver for an
additional $400,000 for the project to make up for the loss
of state historic preservation tax credits.
* A group led by Ollie Gates is looking to develop single-
family homes in the Mount Prospect area at the north end of
Beacon Hill.
HUNTER DEFENSE: Moody's Affirms 'B2' CFR; Outlook Negative
----------------------------------------------------------
Moody's Investors Service revised the ratings outlook of Hunter
Defense Technologies, Inc. to negative from stable. Concurrently,
Moody's affirmed all the company's ratings including the B2
corporate family rating ("CFR") and probability of default
ratings.
The following ratings were affirmed (with updated LGD
assessments):
Corporate Family Rating, at B2
Probability of Default Rating, at B2
$20 million first lien revolver (undrawn) due August 2013, at B1
(LGD-3, 39%) from (LGD-3, 40%)
$200 million first lien term loan ($161 million outstanding) due
August 2014, at B1 (LGD-3, 39%) from (LGD-3, 40%)
$80 million ($54 million outstanding) second lien term loan due
February 2015, at Caa1 (LGD-5, 89%)
Ratings Rationale
The change in outlook to negative is based on the anticipated
continued negative impact on the company's sales volumes and
margins from U.S. defense budget pressures. Over 80% of the
company's sales are to the U.S. government agencies, primarily the
Army. The increased uncertainty regarding future military spending
in the U.S. and ongoing contract funding delays have resulted in
lower than anticipated EBITDA generation. The $55.7 million
goodwill impairment charge recorded in the quarter ended June 30,
2012 is reflective of the expected continued negative effect of
U.S. defense budget pressures on the company's operations over the
intermediate term. In addition, although there are no further
leverage ratio covenant step-downs in the company's credit
agreements, covenant headroom is expected to remain tight. Recent
debt prepayments have allowed the company to remain in compliance
with covenants.
The B2 corporate family rating reflects the historically volatile
nature of shelter sales counterbalanced by the high likelihood of
ongoing long-term U.S. military demand for Hunter's
technologically advanced mobile shelter systems and related
products. Other factors underlying the B2 CFR include anticipated
leverage in line with the rating category largely driven by the
company's prudent use of free cash flow generation to repay debt
(approximately $50 million of debt paid down since December 2011)
and EBITDA margins sustained above 15%. Historically metrics were
strong for the rating category but the impact of defense budget
pressures and contract funding delays are expected to result in
metrics more in line with the B2 rating category. These factors
are weighed against limited revenue scale, customer concentration
and potential for performance volatility from quarter to quarter
due to the timing of orders and Department of Defense funding
delays. Additionally, by prepaying a meaningful amount debt, the
company has reduced its future amortization requirements but is
expected to continue to use cash generation to pay down debt.
Hunter's ratings could be subject to downward revision if the
company's liquidity position weakens or if debt is increased for
large levered acquisitions or equity distributions in particular.
Credit metrics that may result in a downgrade include
EBIT/interest and retained cash flow/debt of 1.2x and 3%,
respectively.
The rating outlook could be changed to stable if the company grows
revenues and profitability in 2013 such that headroom under
financial covenants meaningfully increases and Hunter continues to
generate positive free cash flow. The ratings could be upgraded if
the company is able to achieve and sustain EBIT/interest and
retained cash flow/debt of 2.0x and in excess of 10%,
respectively.
The principal methodology used in rating Hunter Defense
Technologies, Inc. was the Global Aerospace and Defense Industry
Methodology published in June 2010. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.
Hunter Defense Technologies, Inc., headquartered in Solon, OH, is
a provider of tactical shelters, CBRN (chemical, biological,
radiological, nuclear) filters and collective protective systems,
and mobile power and temperature control equipment for the U.S.
military and Homeland Security. Annual revenues approximate $300
million. Hunter Defense is majority owned by the private equity
firm Metalmark Capital.
HYPERTENSION DIAGNOSTICS: Has $1.3-Mil. Net Loss in Fiscal 2012
---------------------------------------------------------------
Hypertension Diagnostics, Inc., filed on Sept. 28, 2012, its
annual report on Form 10-K for the fiscal year ended June 30,
2012.
Moquist Thorvilson Kaufmann & Pieper LLC, in Edina, Minnesota,
expressed substantial doubt about Hypertension's ability to
continue as a going concern. The independent auditors noted that
the Company had net losses for the years ended June 30, 2012, and
2011, and has a stockholders' deficit at June 30, 2012.
The Company reported a net loss of $1.3 million on $3.2 million of
revenues in fiscal 2012, compared with net income of $406,312 on
$nil revenue in fiscal 2011.
The Company's balance sheet at June 30, 2012, showed $1.3 million
in total assets, $1.6 million in total liabilities, and a
stockholders' deficit of $288,669.
A copy of the Form 10-K is available at http://is.gd/KF0AMC
Minnetonka, Minnesota-based Hypertension Diagnostics, Inc., was
incorporated under the laws of the State of Minnesota on July 19,
1988. The Company was previously engaged in the medical device
business. In mid-2011, HDI's board of directors determined to
pursue a change in strategic direction. In August 2011, it sold
its medical device inventory, subleased its office and
manufacturing facility, and entered into a limited license
agreement with a company owned by Jay Cohn, a founder and a
director of the Company. In September 2011, the Company formed
HDI Plastics Inc., a wholly owned-subsidiary, entered into a new
lease agreement, purchased selected manufacturing assets from
Compass Bank and Cycled Plastics and began engaging in the
business of plastics reprocessing in Austin, Tex.
IMPLANT SCIENCES: Marcum LLP Raises Going Concern Doubt
-------------------------------------------------------
Implant Sciences Corporation filed its annual report on Form 10-K
for the fiscal year ended June 30, 2012.
Marcum LLP, in Boston, Massachusetts, expressed substantial doubt
about Implant's ability to continue as a going concern. The
independent auditors noted that the Company has had recurring net
losses and continues to experience negative cash flows from
operations. "As of Sept. 25, 2012, the Company's principal
obligation to its primary lender was approximately $33,429,000
with accrued interest of approximately $3,146,000. The Company is
required to repay all borrowings and accrued interest to this
lender on March 31, 2013."
The Company reported a net loss of $14.6 million on $3.4 million
of revenues in fiscal 2012, compared with a net loss of
$15.6 million on $6.7 million of revenues in fiscal 2011.
The Company's balance sheet at June 30, 2012, showed $6.2 million
in total assets, $38.6 million in total liabilities, and a
stockholders' deficit of $32.4 million.
A copy of the Form 10-K is available at http://is.gd/QkI7H1
Wilmington, Massachusetts-based Implant Sciences Corporation
develops, manufactures and sells sophisticated sensors and systems
for the security, safety and defense industries.
IMPLANT SCIENCES: Incurs $14.6 Million Net Loss in Fiscal 2012
--------------------------------------------------------------
Implant Sciences Corporation filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K disclosing a
net loss of $14.63 million on $3.40 million of revenue for the
year ended June 30, 2012, compared with a net loss of
$15.55 million on $6.65 million of revenue during the prior fiscal
year.
The Company's balance sheet at June 30, 2012, showed $6.23 million
in total assets, $38.63 million in total liabilities and a $32.40
million total stockholders' deficit.
Marcum LLP, in Boston, Massachusetts, issued a "going concern"
qualification on the consolidated financial statements for the
year ended June 30, 2012. The independent auditors noted that the
Company has had recurring net losses and continues to experience
negative cash flows from operations. As of Sept. 25, 2012, the
Company's principal obligation to its primary lender was
$33,429,000 with accrued interest of $3,146,000. The Company is
required to repay all borrowings and accrued interest to this
lender on March 31, 2013. These conditions raise substantial
doubt about its ability to continue as a going concern.
Bankruptcy Warning
Despite the Company's current sales, expense and cash flow
projections and $4,927,000 in cash available from its line of
credit with DMRJ, at Sept. 25, 2012, an accredited institutional
investor, the Company will require additional capital in the third
quarter of fiscal 2013 to fund operations and continue the
development, commercialization and marketing of its products.
"Our failure to achieve our projections and/or obtain sufficient
additional capital on acceptable terms would have a material
adverse effect on our liquidity and operations and could require
us to file for protection under bankruptcy laws," the Company said
in its annual report for the period ended June 30, 2012.
A copy of the Form 10-K is available for free at:
http://is.gd/QkI7H1
About Implant Sciences
Implant Sciences Corporation (OBB: IMSC.OB) --
http://www.implantsciences.com/-- develops, manufactures and
sells sensors and systems for the security, safety and defense
(SS&D) industries.
INDYMAC BANCORP: Former CEO Settles SEC Lawsuit for $80,000
-----------------------------------------------------------
Alan Zibel, writing for Dow Jones Newswires, reports that the U.S.
Securities and Exchange Commission on Monday said it reached a
settlement last week with former IndyMac Bancorp Inc. Chief
Executive Michael Perry. Under the deal, Mr. Perry will pay
$80,000 to settle a charge he misrepresented the company's
financial condition. The report notes a federal judge in Los
Angeles dealt a setback to the SEC by rejecting five of the
agency's seven claims against Mr. Perry in May.
Dow Jones recounts IndyMac's collapse in July 2008 was the
costliest bank failure on record, with $13.1 billion paid by the
Federal Deposit Insurance Corp.'s insurance fund through the end
of last year. Dow Jones notes the small size of the fine against
a once-prominent maker of shaky mortgages shows how the SEC has
struggled to pursue cases against banks and executives amid public
anger toward those viewed as responsible for the housing bubble
and financial crisis. The SEC declined to comment, Dow Jones
says.
Dow Jones also notes IndyMac's executives in July agreed to settle
a class-action securities lawsuit stemming from its collapse.
Under that settlement, IndyMac's insurers will pay $6.5 million to
shareholders. The executives didn't admit wrongdoing.
About Indymac Bancorp
Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) --
http://www.indymacbank.com/-- was the holding company for IndyMac
Bank FSB, a hybrid thrift/mortgage bank that originated mortgages
in all 50 states of the United States. Through its hybrid thrift-
mortgage bank business model, IndyMac designed, manufactured, and
distributing cost-efficient financing for the acquisition,
development, and improvement of single-family homes. IndyMac also
provided financing secured by single-family homes to facilitate
consumers' personal financial goals and strategically invests in
single-family mortgage-related assets.
On July 11, 2008, the Office of Thrift Supervision closed IndyMac
Bank and appointed FDIC as the bank's receiver. Thacher Proffitt
& Wood LLP was engaged as counsel to the FDIC. Indymac Bancorp
filed for Chapter 7 bankruptcy protection (Bankr. C.D.Calif., Case
No. 08-21752) on July 31, 2008.
At the time of the FDIC takeover, IndyMac was the third-largest
bank failure in U.S. history. Indymac had about $32.01 billion in
assets as of July 11, 2008. In court documents, IndyMac disclosed
estimated assets of $50 million to $100 million and estimated
debts of $100 million to $500 million.
Representing the Debtor are Dean G. Rallis, Jr., Esq., and John C.
Weitnauer, Esq.
IndyMac's banking operations, now known as OneWest Bank FSB, are
under the control of a new ownership group that includes hedge-
fund managers John Paulson and George Soros.
INNER CITY: Former Officer Wants Chapter 11 Trustee Appointed
-------------------------------------------------------------
Hugh Wyatt asks the U.S. Bankruptcy Court for the Southern
District of New York to appoint a Chapter 11 trustee in the cases
of Inner City Media Corporation, et al.
According to Mr. Wyatt, founder and past officer of Inner City
Broadcasting Corporation, the parent company of the Debtor, the
Debtors have committed fraud, dishonestly, and gross mismanagement
of the affairs.
Mr. Wyatt says that the Chapter 11 trustee will preserve assets
and reorganize the Debtor to pay creditors in and equitable
manner.
About Inner City
On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress
Credit Funding I L.P., and Drawbridge Special Opportunities Fund
Ltd., signed involuntary Chapter 11 petitions for Inner City Media
Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to
11-13979) to collect on a $254 million debt.
The Petitioning Creditors are party to the senior secured credit
Facility pursuant to which they (or their predecessors in
interest) extended $197 million in loans to the Alleged Debtors to
be used for general corporate purposes. More than two years ago,
the Alleged Debtors defaulted under the Senior Secured Credit
Facility, and in any event the entire amount of principal and
accrued and unpaid interest and fees became immediately due and
payable on Feb. 13, 2010.
Inner City Media's affiliates subject to the involuntary Chapter
11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting
Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC-
NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C.,
Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III,
L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi,
L.L.C., and Urban Radio of South Carolina, L.L.C.
Judge Shelley C. Chapman granted each of Inner City Media
Corporation and its debtor affiliates relief under Chapter 11 of
the United States Code. The decision came after considering the
involuntary petitions, and the Debtors' answer to involuntary
petitions and consent to entry of order for relief and reservation
of rights.
Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and
Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J.
Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader,
Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit
Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are
Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth &
Zabel LLP.
Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel.
Rothschild Inc. serves as the Debtors' financial advisors and
investment bankers. GCG Inc. serves as the Debtors' claims agent.
The United States Trustee said that an official committee under 11
U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of
Inner City Media because an insufficient number of persons holding
unsecured claims against the Debtor has expressed interest in
serving on a committee.
INNER CITY: Has Until Oct. 19 to Propose Chapter 11 Plan
--------------------------------------------------------
The Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York extended Inner City Media
Corporation, et al.'s exclusive periods to file and solicit
acceptances for the proposed chapter 11 plan until Oct. 19, 2012,
and Dec. 18, respectively.
On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress
Credit Funding I L.P., and Drawbridge Special Opportunities Fund
Ltd., signed involuntary Chapter 11 petitions for Inner City Media
Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to
11-13979) to collect on a $254 million debt.
The Petitioning Creditors are party to the senior secured credit
Facility pursuant to which they (or their predecessors in
interest) extended $197 million in loans to the Alleged Debtors to
be used for general corporate purposes. More than two years ago,
the Alleged Debtors defaulted under the Senior Secured Credit
Facility, and in any event the entire amount of principal and
accrued and unpaid interest and fees became immediately due and
payable on Feb. 13, 2010.
Inner City Media's affiliates subject to the involuntary Chapter
11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting
Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC-
NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C.,
Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III,
L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi,
L.L.C., and Urban Radio of South Carolina, L.L.C.
Judge Shelley C. Chapman granted each of Inner City Media
Corporation and its debtor affiliates relief under Chapter 11 of
the United States Code. The decision came after considering the
involuntary petitions, and the Debtors' answer to involuntary
petitions and consent to entry of order for relief and reservation
of rights.
Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and
Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J.
Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader,
Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit
Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are
Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth &
Zabel LLP.
Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel.
Rothschild Inc. serves as the Debtors' financial advisors and
investment bankers. GCG Inc. serves as the Debtors' claims agent.
The United States Trustee said that an official committee under 11
U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of
Inner City Media because an insufficient number of persons holding
unsecured claims against the Debtor has expressed interest in
serving on a committee.
INNKEEPERS USA: Court Closes Chapter 11 Reorganization Case
-----------------------------------------------------------
The Hon. Shelley C. Chapman of the U.S. Bankruptcy Court for the
Southern District of New York entered a final decree closing the
Chapter 11 cases of Innkeepers USA Trust, et al.
The Court also ordered that the Closing Debtors will reserve
sufficient funds to pay the U.S. Trustee the appropriate amount of
any outstanding quarterly fees due, and any applicable interest
due, which fees and interest, if any, will be paid within 20 days
of the entry of the final decree.
As reported in the Troubled Company Reporter on Oct. 28, 2011,
Innkeepers USA Trust and its affiliates disclosed that the company
has successfully completed its restructuring and emerged from
Chapter 11.
The Company emerged following the closing of the $1.02 billion
sale of 64 Innkeepers' hotels to a joint venture between the
private equity firm Cerberus Capital Management, L.P. and the real
estate investment trust Chatham Lodging that was approved by the
U.S. Bankruptcy Court, Southern District of New York. Chatham
Lodging had previously purchased five of the Company's hotels that
served as collateral for loan trusts serviced by LNR Partners,
LLC, for approximately $195 million.
A substantial majority of the Company's unsecured creditors are
expected to receive a recovery of more than 90 cents on the
dollar.
"This is a great accomplishment," said Innkeepers' Chief
Restructuring Officer Marc A. Beilinson. "Despite conventional
wisdom, we have demonstrated that the myriad complex issues
surrounding commercial mortgage backed securities can be
effectively resolved utilizing the Chapter 11 process."
Chapter 11 provided several key advantages that have strengthened
Innkeepers and enhanced its ability to compete.
"First of all, Chapter 11 gave us the time and financial resources
from our debtor-in-possession financing to renovate and revitalize
the properties," Beilinson said. "It also allowed us to maintain
good relationships with our franchisors and vendors. As a result,
the Company is emerging with higher revenues and stronger
operations than when it entered Chapter 11."
"In a little over a year, we achieved a tremendous outcome for our
secured and unsecured creditors, franchisors, guests and the
approximately 3,500 people who continue to be employed at the
hotel properties," Beilinson said.
Kirkland & Ellis LLP is Innkeepers' lead restructuring counsel and
Moelis & Company LLC is its financial advisor. Alix Partners
provided restructuring services. Marc Beilinson is a principal at
Beilinson Advisory Group.
About Innkeepers USA Trust
Innkeepers USA Trust is a self-administered Maryland real estate
investment trust with a primary business focus on acquiring
premium-branded upscale extended-stay, mid-priced limited service,
and select-service hotels.
Innkeepers, through its indirect subsidiaries, owns and operates
an expansive portfolio of 72 upscale and mid-priced extended-stay
and select-service hotels, consisting of approximately 10,000
rooms, located in 20 states across the United States.
Apollo Investment Corporation acquired Innkeepers in June 2007.
Innkeepers USA Trust and 91 affiliates filed for Chapter 11
protection (Bankr. S.D.N.Y. Case No. 10-13800) on July 19, 2010.
The Company's consolidated assets for 2009 totaled approximately
$1.5 billion. As of July 19, 2010, the Company and its affiliates
have incurred $1.29 billion of secured debt.
Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup
Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in
Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in
Washington, D.C., serve as counsel to the Debtors. AlixPartners
is the restructuring advisor and Marc A. Beilinson is the chief
restructuring officer. Moelis & Company is the financial advisor.
Omni Management Group, LLC, is the claims and notice agent.
Attorneys at Morrison & Foerster, LLP, represent the Official
Committee of Unsecured Creditors.
In October, Innkeepers USA Trust and its affiliates disclosed that
the company had successfully completed its restructuring and
emerged from Chapter 11.
The Company emerged following the closing of the $1.02 billion
sale of 64 Innkeepers' hotels to a joint venture between the
private equity firm Cerberus Capital Management, L.P. and the real
estate investment trust Chatham Lodging that was approved by the
U.S. Bankruptcy Court, Southern District of New York. Chatham
Lodging had previously purchased five of the Company's hotels that
served as collateral for loan trusts serviced by LNR Partners,
LLC, for approximately $195 million.
A substantial majority of the Company's unsecured creditors are
expected to receive a recovery of more than 90 cents on the
dollar.
INOVA TECHNOLOGY: Amends 375 Million Common Shares Prospectus
-------------------------------------------------------------
Inova Technology, Inc., filed with the U.S. Securities and
Exchange Commission a third amendment to the Form S-1 registration
statement relating to the offering of 375 million shares of common
stock of the Company in a self-underwritten direct public
offering, without any participation by underwriters or broker-
dealers.
The offering price is $0.01 per share. There is no minimum number
of shares to be sold under this offering.
The Company's common stock is quoted on the OTCQB by the OTC
Markets Group under the symbol "INVA". On Sept. 28 , 2012, the
last reported sale price for the Company's common stock was $0.01
per share.
The Company is conducting this offering as a "self-underwriting"
through the Company's officers and directors, and therefore, the
Company will pay no underwriting fees or commissions.
A copy of the amended prospectus is available for free at:
http://is.gd/d4CauC
About Inova Technology
Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA)
-- http://www.inovatechnology.com/-- through its subsidiaries,
provides information technology (IT) consulting services in the
United States. It also manufactures radio frequency
identification (RFID) equipment; and provides computer network
solutions. The company was formerly known as Edgetech Services
Inc. and changed its name to Inova Technology, Inc., in 2007.
The Company reported a net loss of $1.24 million for the year
ended April 30, 2012, compared with a net loss of
$3.35 million during the prior year.
The Company's balance sheet at July 31, 2012, showed $7.65 million
in total assets, $18.83 million in total liabilities and a $11.18
million total stockholders' deficit.
Going Concern
The Company has an accumulated deficit and negative working
capital and is in default on the majority of its notes payable as
of July 31, 2012. These conditions raise substantial doubt as to
the Company's ability to continue as a going concern.
"Our ability to continue as a going concern is dependent upon our
ability to generate sufficient cash flows to meet our obligations
on a timely basis, to obtain additional financing as may be
required, and ultimately to attain profitable operations," the
Company said in its quarterly report for the period ended July 31,
2012. "However, there is no assurance that profitable operations
or sufficient cash flows will occur in the future."
MaloneBailey, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended April 30, 2012. The independent auditors noted that
Inova incurred losses from operations for the years ended
April 30, 2012, and 2011 and has a working capital deficit as of
April 30, 2012, which raise substantial doubt about Inova's
ability to continue as a going concern.
INTEGRATED BIOPHARMA: Delays Fiscal 2012 Annual Report
------------------------------------------------------
Integrated BioPharma, Inc., informed the U.S. Securities and
Exchange Commission that its annual report on Form 10-K for the
fiscal year ended June 30, 2012, cannot be filed within the
prescribed time period because the Company is experiencing delays
in the collection and compilation of certain information required
to be included in the Form 10-K. The Company's Annual Report will
be filed on or before the 15th calendar day following the
prescribed due date.
About Integrated BioPharma
Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) --
-- http://www.healthproductscorp.us/ -- is engaged primarily in
manufacturing, distributing, marketing and sales of vitamins,
nutritional supplements and herbal products. The Company's
customers are located primarily in the United States. The Company
was previously known as Integrated Health Technologies, Inc., and,
prior to that, as Chem International, Inc. The Company was
reincorporated in its current form in Delaware in 1995. The
Company continues to do business as Chem International, Inc., with
certain of its customers and certain vendors.
In the auditors' report accompanying the financial statements for
fiscal year ended June 30, 2011, Friedman, LLP, in East Hanover,
NJ, 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 deficiency, recurring net losses
and has defaulted on its debt obligations.
The Company reported a net loss of $2.28 million in fiscal 2011
and a net loss of $5.53 million during the prior fiscal year.
The Company's balance sheet at March 31, 2012, showed $10.75
million in total assets, $19.58 million in total liabilities, all
current, and a $8.83 million total stockholders' deficiency.
INTERNATIONAL AUTOMOTIVE: S&P Affirms 'B+' Corporate Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Luxembourg-based global auto supplier
International Automotive Components Group S.A. (IAC) and revised
the outlook to stable from negative.
"The corporate credit rating on International Automotive
Components Group S.A. (IAC) reflects Standard & Poor's Ratings
Services' view of the company's 'aggressive' financial risk
profile and 'vulnerable' business risk profile," said Standard &
Poor's credit analyst Nishit Madlani.
"Our outlook revision to stable from negative reflects our
expectation that leverage will continue to remain at less than
4.0x over the next 12 months, with prospects for moderate free
operating cash flow generation in 2013. This should support IAC's
ability to balance its business development needs with capital
structure stability over the next 12 to 18 months," S&P said.
"Our stable rating outlook on IAC reflects our view of modest free
operating cash flow generation prospects over the next 12 months,
with leverage at 4.0x or less," S&P said.
"We could lower our ratings if it appears free cash flow will
remain negative in 2013, or if we believe debt to EBITDA,
including our adjustments, will rise to 4.5x, rather than stay
flat or decline. This could occur if IAC's EBITDA margins,
including our adjustments, fall by over 150 bps from 2011 levels
on roughly flat revenues. We believe at these levels, a
considerable risk would be the potential pressure on IAC's ability
to balance its business development needs with capital structure
stability over the next 12 to 18 months. We think this scenario
could result from worse challenges in Europe than we currently
expect or meaningful launch-related inefficiencies or costs," S&P
said.
"We consider an upgrade less likely during the next year, based on
our current assessment of business and financial risks and IAC's
limited financial and strategic record since reorganizing its
operations. Also, further distributions to shareholders are
possible as a result of the majority financial sponsor ownership.
Still, any future upgrade under a different shareholder base would
likely be based on whether we believe IAC can achieve and sustain
7% to 8% EBITDA margins, with prospects for leverage of less than
3.5x on a sustained basis, and free operating cash generation
capabilities in the range of 5% to 10% of debt," S&P said.
INTERNATIONAL HOME: First Bank Wants Examiner Appointed
-------------------------------------------------------
Secured creditor First Bank Puerto Rico asks the U.S. Bankruptcy
Court for the District of Puerto Rico to appoint an examiner in
the Chapter 11 cases of International Home Products, Inc., and
Health Distillers International, Inc.
According to First Bank, the examiner will conduct an
investigation of the Debtors' management of assets and their
financial affairs because, among other things:
-- the Debtors have not completed an audit of their financial
statements for the years 2010 and 2011;
-- HDI also failed to file the monthly operating reports for
the month of June 2012; and
-- the Debtors provided the Bank with inaccurate accounting
information and misrepresentations as to their financial
situation.
About International Home Products
International Home Products, Inc., is engaged in the sale,
financing of "Lifetime" cookware and other kitchenware as well as
sale of account receivables in the secondary market. It is the
exclusive distributor of "Lifetime" products in Puerto Rico for
over 40 years. The Company filed for Chapter 11 bankruptcy
protection (Bankr. D. P.R. Case No. 12-02997) on April 19,
2012. Carmen D. Conde Torres, Esq., in San Juan, P.R.,
serves as the Debtor's counsel. Wigberto Lugo Mendel, CPA,
serves as its accountants. The Debtor disclosed $66,155,798 and
$43,350,031 in liabilities as of the Chapter 11 filing.
Secured lender First-Bank Puerto Rico is represented by Manuel
Fernandez-Bared, Esq., and Jane Patricia Van Kirk, Esq., at Toro,
Colon, Mullet, Rivera & Sifre, P.S.C.
JACKSONVILLE BANCORP: Sells 5,000 Preferred Shares to CapGen
------------------------------------------------------------
Jacksonville Bancorp, Inc., previously entered into a Stock
Purchase Agreement with its largest shareholder, CapGen Capital
Group IV LP, for the sale of up to 25,000 shares of the Company's
to-be-designated Mandatorily Convertible, Noncumulative, Nonvoting
Perpetual Preferred Stock, Series A, liquidation preference
$1,000.00 per share, at a purchase price of $1,000 per share. The
Stock Purchase Agreement was executed in connection with the
Company's private offering to accredited investors of an aggregate
of 50,000 shares of Series A Preferred Stock.
On Sept. 27, 2012, the Company and CapGen entered into a
subscription agreement under which the Company sold to CapGen
5,000 shares of the Company's Noncumulative, Nonvoting Perpetual
Preferred Stock, Series B, for an aggregate purchase price of $5
million. In connection with the Series B Sale and also on
Sept. 27, 2012, the Company and CapGen entered into an Exchange
Agreement whereby the Company agreed to exchange the shares of
Series B Preferred Stock issued in the Series B Sale for shares of
Series A Preferred Stock simultaneously with the issuance of
shares of Series A Preferred Stock in the Private Placement,
unless those shares of Series B Preferred Stock are first redeemed
by the Company. In the Exchange, all issued and outstanding
shares of Series B Preferred Stock will be exchanged for the
number of shares of Series A Preferred Stock having an aggregate
liquidation preference equal to the aggregate Series B Liquidation
Preference.
The Series B Preferred Stock ranks senior to the Company's common
stock and will rank equally with the Series A Preferred Stock.
Holders of Series B Preferred Stock will be entitled to receive,
when, as and if declared by the Company's board of directors, out
of funds legally available therefor, noncumulative dividends at a
rate equal to 10% per annum of the Series B Liquidation
Preference. Dividends will accrue daily and be payable biannually
on June 1 and December 1, with the first dividend payment to be
June 1, 2013. The liquidation preference for the Series B
Preferred is equal to $1,000 per share, plus any accrued but
unpaid dividends, if any, on such share. The voting and other
powers, preferences and relative, participating, optional or other
rights, and the qualifications, limitations and restrictions of
the Series B Preferred Stock are as set forth in the Jacksonville
Bancorp, Inc. Articles of Amendment to the Amended and Restated
Articles of Incorporation Designating Noncumulative, Nonvoting,
Perpetual Preferred Stock, Series B, which the Company filed with
the Florida Secretary of State on Sept. 27, 2012.
On Sept. 27, 2012, the Company filed the Series B Designation with
the Florida Secretary of State establishing the voting and other
powers, preferences and relative, participating, optional or other
rights, and the qualifications, limitations and restrictions
applicable to the Series B Preferred Stock.
The Company has authorized for issuance 10,000 shares of Series B
Preferred Stock in the Series B Designation; however, the Company
currently has no plans to issue the 5,000 authorized but unissued
shares of Series B Preferred Stock remaining after the Series B
Sale.
About Jacksonville Bancorp
Jacksonville Bancorp, Inc., a bank holding company, is the parent
of The Jacksonville Bank, a Florida state-chartered bank focusing
on the Northeast Florida market with approximately $583 million in
assets and eight full-service branches in Jacksonville, Duval
County, Florida, as well as the Company's virtual branch. The
Jacksonville Bank opened for business on May 28, 1999 and provides
a variety of community banking services to businesses and
individuals in Jacksonville, Florida.
The Company's balance sheet at June 30, 2012, showed
$583.0 million in total assets, $564.0 million in total
liabilities, and shareholders' equity of $19.0 million.
According to the Form 10-Q for the period ended June 30, 2012, the
Bank was adequately capitalized at June 30, 2012. Depository
institutions that are no longer "well capitalized" for bank
regulatory purposes must receive a waiver from the FDIC prior to
accepting or renewing brokered deposits. The Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA") generally
prohibits a depository institution from making any capital
distribution (including paying dividends) or paying any management
fee to its holding company, if the depository institution would
thereafter be undercapitalized.
The Bank had a Memorandum of Understanding ("MoU") with the FDIC
and the Florida Office of Financial Regulation that was entered
into in 2008, which required the Bank to have a total risk-based
capital of at least 10% and a Tier 1 leverage capital ratio of at
least 8%. Recently, on July 13, 2012, the 2008 MoU was replaced
by a new MoU, which, among other things, requires the Bank to have
a total risk-based capital of at least 12% and a Tier 1 leverage
capital ratio of at least 8%. "We did not meet the minimum
capital requirements of these MOUs at June 30, 2012, and Dec. 31,
2011, when the Bank had total risk-based capital of 8.09% and
9.85% and Tier 1 leverage capital of 5.26% and 6.88%,
respectively."
JACKSONVILLE BANCORP: CapGen Capital Discloses 45.6% Equity Stake
-----------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, CapGen Capital Group IV LP, CapGen Capital
Group IV LLC and Eugene A. Ludwig disclosed that as of Sept. 27,
2012, they beneficially own 2,684,144 shares of common stock of
Jacksonville Bancorp, Inc., representing 45.6% of the shares
outstanding.
CapGen LP executed a Subscription Agreement dated as of Sept. 27,
2012, with the Company, whereby, CapGen LP has agreed to purchase
and the Issuer has agreed to issue to CapGen LP, 5,000 shares of
Series B Preferred Stock at $1,000 per share.
CapGen LP also executed an Exchange Agreement dated as of
Sept. 27, 2012, with the Company, whereby, the Issuer agrees to
exchange all issued and outstanding shares of Series B Preferred
Stock at their aggregate liquidation preference for the number of
shares of Preferred Stock having an aggregate liquidation
preference as of the issuance of the Preferred Stock equal to the
aggregate Series B Preferred Stock liquidation preference.
The Exchange will be made simultaneously with the issuance of
shares of Preferred Stock to CapGen LP and any other Exchange
Agreement Investors, following CapGen LP's receipt of all
regulatory approvals necessary to purchase the Preferred Stock for
cash and in the Exchange. Alternatively, instead of the Exchange,
the Issuer, at any time, in its discretion, subject to receipt of
any required regulatory approval, may redeem all outstanding
shares of Series B Preferred Stock upon payment of the liquidation
preference as of the redemption date.
A copy of the filing is available for free at http://is.gd/g46kpn
About Jacksonville Bancorp
Jacksonville Bancorp, Inc., a bank holding company, is the parent
of The Jacksonville Bank, a Florida state-chartered bank focusing
on the Northeast Florida market with approximately $583 million in
assets and eight full-service branches in Jacksonville, Duval
County, Florida, as well as the Company's virtual branch. The
Jacksonville Bank opened for business on May 28, 1999 and provides
a variety of community banking services to businesses and
individuals in Jacksonville, Florida.
The Company's balance sheet at June 30, 2012, showed
$583.0 million in total assets, $564.0 million in total
liabilities, and shareholders' equity of $19.0 million.
According to the Form 10-Q for the period ended June 30, 2012, the
Bank was adequately capitalized at June 30, 2012. Depository
institutions that are no longer "well capitalized" for bank
regulatory purposes must receive a waiver from the FDIC prior to
accepting or renewing brokered deposits. The Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA") generally
prohibits a depository institution from making any capital
distribution (including paying dividends) or paying any management
fee to its holding company, if the depository institution would
thereafter be undercapitalized.
The Bank had a Memorandum of Understanding ("MoU") with the FDIC
and the Florida Office of Financial Regulation that was entered
into in 2008, which required the Bank to have a total risk-based
capital of at least 10% and a Tier 1 leverage capital ratio of at
least 8%. Recently, on July 13, 2012, the 2008 MoU was replaced
by a new MoU, which, among other things, requires the Bank to have
a total risk-based capital of at least 12% and a Tier 1 leverage
capital ratio of at least 8%. "We did not meet the minimum
capital requirements of these MOUs at June 30, 2012, and Dec. 31,
2011, when the Bank had total risk-based capital of 8.09% and
9.85% and Tier 1 leverage capital of 5.26% and 6.88%,
respectively."
JAMES DRISCOLL: Court Stays Great American's Indemnity Suit
-----------------------------------------------------------
District Judge James C. Dever III stayed the lawsuit filed by
Great American Insurance Company asserting a claim of contractual
indemnity as to James T. Driscoll, Jr., and Judy L. Driscoll, who
have filed Chapter 11 bankruptcies. The Court granted Great
American's motion for summary judgment and awarded Great American
judgment in the amount of $1,025,449 against T.R. Driscoll, Inc.
The Court directed James and Judy Driscoll to file an update with
the Court every 60 days concerning their bankruptcy case.
Great American entered into an indemnity agreement on Jan. 20,
1988, with defendants T.R. Driscoll, Inc., James T. Driscoll, Jr.,
Judy L. Driscoll, Robert L. Driscoll, Paula P. Driscoll, William
S. Driscoll, and Sharon S. Driscoll. Pursuant to the Agreement,
Great American issued payment and performance bonds on behalf of
T.R. Driscoll in exchange for premium payments and the defendants'
promises to indemnify Great American against any claims made
against the bonds.
T.R. Driscoll failed to make payments to some subcontractors and
suppliers. Great American received a performance bond claim and
paid those claims. In total, Great American expended $1,025,449
because of T.R. Driscoll's failure to comply with the terms of the
Agreement.
The case is, GREAT AMERICAN INSURANCE COMPANY, Plaintiff, v. T.R.
DRISCOLL, INC., ET AL., Defendants, No. 7:11-CV-167-D (E.D.N.C.).
A copy of the Court's Sept. 25, 2012 Order is available at
http://is.gd/c8zDnyfrom Leagle.com.
James Driscoll filed a Chapter 11 petition (Bankr. E.D.N.C. Case
No. 12-04011) on May 30, 2012.
JAMES MEIS: Loses Bid to Avoid Wells Fargo Lien
-----------------------------------------------
James Meis failed in his bid to avoid Wells Fargo Bank's mortgage
on his homestead.
According to Bankruptcy Judge Robert E. Nugent, if Mr. Meis "can
stand in the shoes of a hypothetical bona fide purchaser for
value, he can avoid Wells Fargo's mortgage on his homestead acting
as a debtor in possession wielding the trustee's avoiding powers
under 11 U.S.C. Sec. 544(a)(3). But if the summary judgment
record shows that as a matter of law, Meis was on actual or
constructive notice of Wells Fargo's lien, summary judgment must
be entered against him on that claim. That, in turn, depends on
whether anything in the instruments in the chain of title did or
should have placed a hypothetical purchaser on notice of the
lien."
According to Judge Nugent, after careful review of the record on
summary judgment, "I conclude that it did and that Meis cannot
prevail as a hypothetical bona fide purchaser. Wells Fargo is
entitled to summary judgment on the lien avoidance claim. Wells
Fargo is also entitled to summary judgment on Meis's resuscitated
standing objection that this Court previously dismissed in its
December 9, 2011 Order1 because the conclusions in that order are
now the law of the case."
James Meis filed for Chapter 11 bankruptcy (Bankr. D. Kan. Case
No. 10-13207) on Sept. 21, 2010.
Under Mr. Meis's confirmed plan, if he successfully avoids Wells
Fargo's lien against his homestead, the proceeds from the sale of
a tract of land, called section 13 property, in Gray County,
Kansas, will be divided between the Debtor and his unsecured
creditors; if he fails, the homestead sale proceeds will be
distributed to the lienholders in order of priority.
Mr. Meis filed an Amended Chapter 11 Plan dated Nov. 14, 2011.
The Plan was confirmed by order entered Feb. 22, 2012.
The case is, JAMES A. MEIS, Plaintiff, v. THE FOWLER STATE BANK,
WELLS FARGO BANK, NA fka WELLS FARGO BANK, MINNESOTA, NA,
Defendants, Adv. Proc. No. 11-5011 (Bankr. D. Kan.). A copy of
the Court's Sept. 27, 2012 Order granting Wells Fargo's request
for summary judgment in the lawsuit is available at
http://is.gd/s0ttPTfrom Leagle.com.
KEY ENERGY: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Pos
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Houston-
based Key Energy Services Inc. to positive from stable and
affirmed its 'BB-' corporate credit rating on the company.
"The positive outlook reflects Key's improved financial and
operating performance since 2008's industry-wide downturn," said
Standard & Poor's credit analyst Paul B. Harvey. "We expect near-
term financial measures to remain strong for the rating in 2012
and 2013, with debt leverage of about 2.5x and funds from
operations (FFO) to debt of about 30%. Although market conditions
in the oilfield services industry have weakened in 2012 we believe
industry conditions will remain supportive well through 2013, and
will result in good credit metrics for the company. We forecast
that it would take a greater than 45% fall from current EBITDA to
approach our downgrade trigger of 3.75x debt leverage. Based on
our current crude oil price assumptions of $80/bbl in 2013 and
$75/bbl thereafter, we expect demand for oilfield services should
remain adequate for the sector. It would likely take a precipitous
downturn in crude prices, such as what occurred in 2008, when West
Texas Intermediate (WTI) briefly fell to about $34/bbl, resulting
in curtailment in capital spending by the exploration and
production industry."
"Finally, we expect the rapid growth in shale-oil wells to benefit
Key's core workover rig division, used primarily to recondition
and/or recomplete wells, supporting longer-term operational and
financial performance. Eventual natural reserve production
declines will increase demand for Key's services to arrest those
declines and maintain production levels and well profitability,"
S&P said.
"The rating on Key Energy Services Inc. reflects our view of the
company's 'weak' business risk and 'aggressive' financial risk
profiles, as well as its 'adequate' liquidity assessment. The
company benefits from its diversification across the major U.S.
oil and gas plays. This limits the negative effects to operational
performance from a downturn in a specific basin or play, such as
occurred in the Haynesville Shale. Key should also benefit from
its growing international operations, which will add market
diversity and buffer the more volatile North American market.
Nevertheless, the well services industry remains volatile and
exposed to the spending levels of the exploration and production
industry. Repeated downward earnings guidance throughout the
industry in 2012 points to this; however, we currently do not
expect a significant decrease in demand for well services," S&P
said.
"The positive outlook reflects the potential for an upgrade in
2013 if market conditions do not substantially decline from
current levels, and we maintain our stable outlook on the
industry. For an upgrade we expect Key to maintain debt leverage
under 3.75x through most points in the industry cycle. However,
much of the exploration and production industry, Key's customer
base, remains cautious about 2013 capital spending levels because
of uncertainty over the U.S. political and regulatory environment
following the November elections and the impact to oil prices from
the struggling European and weakened Asian economies. We expect to
review Key in the first half of 2013," S&P said.
"We could stabilize ratings if market conditions significantly
decline such that Key's ability to maintain its above-average
financial measures is tested by either market conditions or
financial policy. One challenge might be aggressive capital
spending if market softening persists, such as that debt leverage
would exceed 4x," S&P said.
LA PALOMA GENERATING: S&P Affirms 'B' Rating on Sr. Secured Debt
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' rating on La
Paloma Generating Co. LLC's (LPGC) senior secured first-lien debt
and revised the outlook to negative from stable. "In addition, we
changed the recovery rating on this debt to '2' from '1'
indicating our expectation for substantial (70% to 90%) recovery
prospects in a payment default," S&P said.
"The outlook revision is based on the 2013 implementation of
carbon taxes under AB32 in California, which we expect will lead
to significant additional costs to LPGC and materially reduce cash
flows," said Standard & Poor's credit analyst Manish Consul. "LPGC
cannot pass through these carbon taxes to offtaker Morgan Stanley
Capital Group (MS, a unit of Morgan Stanley; A-/Negative/A-1)
under tolling agreements. Unless adequate allowances are granted
by the state regulators, we expect the project's debt service
coverage ratio will be below 1x."
"The 'B' rating on LPGC's debt takes into account the adverse
impacts on its near-term financial performance of depressed
natural gas prices and the inability, under existing tolling
agreements, to recover carbon costs that it will incur under
requirements of California's cap-and-trade law in 2013. The
project also faces refinancing risk at maturity of its large debt
burden with limited amortization under our assumptions. LPGC sells
power to MS from three of its four units under tolling agreements
through 2012. It dispatches the fourth unit to take advantage of
merchant opportunities. MS can renew the toll for one unit
annually from 2013 to 2017 and has chosen to do so for 2013. The
project has hedges on two other units in 2013, and one unit each
in 2014 and 2015. We expect cash flow contributions from the
hedged units will be somewhat constrained due to limited offsets
for carbon taxes. Over the longer term, LPGC remains exposed to
the volatile merchant power market. These weakness are somewhat
tempered by the proven Alstom GT 24 gas turbine technology and
sufficient liquidity over the near term," S&P said.
"The negative outlook reflects our expectation of constrained cash
flows from three of the four units following the implementation of
carbon taxes under AB32 in California effective 2013. We could
lower the rating if our projected DSCR remains below 1.1x on a
steady basis. This would likely happen if California regulators do
not grant LPGC adequate allowances to pass through its carbon
costs on the MS toll unit. We could also lower the ratings if
LPGC's availability goes down, its heat rate degrades, or if O&M
costs increase above our expectations. An upgrade is unlikely over
the next one to two years but is possible if debt/kw goes down
below $200/kW and we expect DSCR to exceed 1.2x on a consistent
basis," S&P said.
LANDMARK MEDICAL: Steward Health Withdraws Bid to Buy Firm
----------------------------------------------------------
Boston.com reports that Rhode Island's attorney general said it
appears a for-profit Massachusetts hospital group has backed out
of its plan to buy financially troubled Landmark Medical Center in
Woonsocket.
Attorney General Peter Kilmartin said Wednesday that Steward
Health Care System doesn't appear to intend to move ahead with the
deal, which was years in the making, according to the report. The
report relates that Mr. Kilmartin said his office, which regulates
such deals, will move as quickly as possible if another buyer
comes forward.
WPRI-TV first reported that the deal appeared dead, the report
notes. A spokesman for Landmark said the court-appointed lawyer
overseeing Landmark, which has been in receivership since 2008, is
talking to other potential buyers, the report says.
Woonsocket officials have said the hospital's closure would be
devastating to the community, the report adds.
LEHMAN BROTHERS: Seeks Approval of Settlement With IRS
------------------------------------------------------
Lehman Brothers Holdings Inc. asked the U.S. Bankruptcy Court in
Manhattan to approve an agreement, which calls for the settlement
of the Internal Revenue Service's tax claims.
The claims were filed against Lehman after it disputed 36
adjustments to income, tax credits and penalties that the agency
proposed after auditing the company's 2001 to 2007 income tax
returns.
The proposed deal calls for the settlement of the nine remaining
issues representing $574 million of the IRS claims. The parties
have already settled the other issues, which the bankruptcy court
approved on March 2012.
As a result of the settlement, IRS will concede $238 million of
the $574 million in taxes and penalties it sought to impose on
the nine issues. Lehman, meanwhile, agreed to $336 million of
adjustments to tax.
In a declaration filed with the bankruptcy court, Jeffry
Ciongoli, Lehman's global tax director, expressed support for
court approval of the proposed settlement, saying it is "fair and
equitable."
A court hearing is scheduled for October 10. Objections are due
by October 3.
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: Court OKs Substantial Contribution Payments
------------------------------------------------------------
The U.S. Bankruptcy Court in Manhattan approved the applications
by Lehman Brothers Holdings Inc.'s creditors for payment of fees
of their lawyers and advisers.
The creditors, which include Goldman Sachs Bank, the ad hoc group
of Lehman Brothers creditors and holders of notes issued by
Lehman Brothers Treasury Co., had claimed they should be paid for
their "substantial contribution" in the company's bankruptcy
case.
In a decision issued September 24, the bankruptcy court
authorized Lehman to pay $3,112,068 to Goldman Sachs for the fees
of its legal counsel, Cleary Gottlieb Steen & Hamilton LLP.
Lehman also received the go-signal to pay $3,228,984 to the debt
holders for legal fees, and $9,519,212 to the other creditors
group. The debt holders will also receive $77,140 as
reimbursement for work-related expenses.
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: Giants Stadium Demands Documents on Swaps
----------------------------------------------------------
Giants Stadium LLC asked the U.S. Bankruptcy Court in Manhattan
to order Lehman Brothers Holdings Inc. to turn over documents
related to swaps on a $700 million financing of the New
Meadowlands stadium.
The move comes after Lehman allegedly refused to turn over the
documents and issued subpoenas against Giants Stadium to "harass"
the company, according to a court filing.
Giants Stadium needs the documents to prove claims it filed
against Lehman related to the swap deals.
A court hearing is scheduled for October 10. Objections are due
by October 3.
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: Files $4.4-Mil. Lawsuit Against Unipol Banca
-------------------------------------------------------------
Lehman Brothers Holdings Inc. filed a lawsuit against Unipol
Banca S.p.A., which seeks payment of more than $4.4 million.
In a 12-page complaint, Lehman accused Unipol of violating the
terms of its contracts with Lehman Brothers Commercial Corp.,
which govern four foreign exchange transactions.
Unipol allegedly violated the contracts when it failed to pay the
amount owed LBCC, according to the complaint filed on September
27 with the U.S. Bankruptcy Court in Manhattan.
Lehman also seeks court declaration that the defendant
"willfully" violated the automatic stay, an injunction that halts
actions by creditors against a company in bankruptcy protection.
In another filing, Lehman asked the bankruptcy court to
temporarily halt the lawsuit to allow the company to pursue
"consensual resolution" of its claim against the defendant.
The case is Lehman Brothers Holdings Inc. v. Unipol Banca S.p.A.,
12-01888, U.S. Bankruptcy Court, Southern District of New
York (Manhattan).
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.
LENDER PROCESSING: Moody's Rates $600MM Sr. Unsecured Notes Ba2
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Lender
Processing Services, Inc.'s (LPS) proposed $600 million of 10 year
senior unsecured notes. Proceeds from these notes along with cash
are expected to be used to repay the $247.5 million of Term Loan A
due 2018 and $362 million of 8.125% senior unsecured notes due
2016. The Ba1 corporate family rating (CFR), Baa3 senior secured
debt ratings, and the negative outlook remain unchanged.
Ratings Rationale
The Ba1 corporate family rating (CFR) reflects the company's
leading position within the mortgage transaction processing
services market and relatively low financial leverage for the
rating with debt to EBITDA expected to be lower than 2.5 times.
Despite the potential for a 25% decline in 2013 mortgage
originations due to waning refinancing activity and the prolonged
foreclosure moratoriums imposed by many of the leading banks,
Moody's expects LPS to achieve flattish revenue growth in 2013
arising from the continued growth of the Technology, Data &
Analytics business and market share gains from the mortgage
lending/servicing industry trend towards outsourcing. LPS has a
relatively modest amount of debt relative to its expected annual
free cash flow of $250 million and good liquidity, providing a
buffer as weak market conditions are likely to persist through
2013.
LPS' negative outlook reflects uncertainty of the financial impact
on LPS from ongoing regulatory scrutiny (including state grand
jury subpoenas) and certain litigation which could result in
significant legal costs, settlements, and/or penalties. There is
considerable uncertainty surrounding the financial impact of the
extended delays in foreclosure activity, as well as the unknown
magnitude of any exposure stemming from industry-wide and company-
specific litigation and evolving industry regulation. The outlook
could be stabilized if certain cases are settled in a favorable
manner which not only dimensions the possible exposure, but also
preserves LPS' good liquidity.
LPS' ratings could be lowered if the company engages in
significant share buyback or M&A activity, or adjusted debt to
EBITDA exceeds 2.5 times on a sustained basis. Furthermore, to the
extent that legal costs run higher than expected or it becomes
increasingly apparent that LPS will have to pay a meaningful
settlement or regulatory fine, the ratings could be downgraded
depending on the company's liquidity position at that time.
Rating assigned:
Senior Unsecured Notes -- rated Ba2
The principal methodology used in rating LPS was the Global
Business & Consumer Service Industry Methodology published in
October 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Lender Processing Services, Inc., (LPS) with projected annual
revenues of about $2 billion, is a leading provider of mortgage
loan processing services, including mortgage origination and
default management services to financial institutions.
LENDER PROCESSING: S&P Rates Senior Unsecured Notes 'BB+'
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' issue rating
and '4' recovery rating to Jacksonville, Fla.-based mortgage
processor Lender Processing Services Inc.'s (LPS) senior unsecured
notes due 2023. The '4' recovery rating indicates expectations for
average (30%-50%) recovery of principal in the event of default.
The company will use the proceeds to refinance amounts outstanding
on its term loan B credit facility and 8.125% senior notes.
"This transaction does not affect our 'BB+' corporate credit
rating on the company. We expect its leadership position in the
mortgage and default processing markets, strong free cash flow
characteristics, and moderate financial policies will enable it to
maintain leverage appropriate for the rating, despite its somewhat
narrow and cyclical market focus, as well as foreclosure
processing delays to date. We also expect that the transaction
will extend weighted average debt maturities by about four years
to 2020 and reduce interest expense. LPS has also announced its
plan to seek term loan A lender consents to provide greater
covenant flexibility. We expect the company will continue to
operate at under 2.5x leverage and note that leverage was 2.0x as
of June 30, 2012, excluding a $144 million nonrecurring legal
accrual taken in the June 2012 quarter," S&P said.
"The current rating reflects our expectation that share
repurchases will be minimal over the coming 12 months and will
only be revived selectively within a 2x leverage framework. We
point out that the company's term loan A amortization schedule
requires more significant amortization (15% amortization of term
loan A principal) in 2014, which we expect will provide an
additional de-leveraging opportunity at that time," S&P said.
RATINGS LIST
Lender Processing Services Inc.
Corporate Credit Rating BB+/Stable/--
New Ratings
Lender Processing Services Inc.
Senior Unsecured nts due 2023 BB+
Recovery Rating 4
LIQUIDMETAL TECHNOLOGIES: Amends 36.8 Million Shares Prospectus
---------------------------------------------------------------
Liquidmetal Technologies, Inc., filed with the U.S. Securities and
Exchange Commission amendment no. 2 to the Form S-1 registration
statement covering an offering of up to 36,892,194 shares of the
Company's common stock, $0.001 par value per share, that may be
offered from time to time by Kingsbrook Opportunities Master Fund,
Hudson Bay Master Fund Ltd., Empery Asset Master Ltd., Hartz
Capital Investments, LLC, and Iroquois Master Fund Ltd.
The shares being offered by this prospectus are issuable to those
selling stockholders upon the conversion of the Company's Senior
Convertible Notes due on Sept. 1, 2013, issued by the Company in
connection with a private placement in July 2012.
This prospectus also covers any additional shares of common stock
that may become issuable upon any anti-dilution adjustment
pursuant to the terms of the Senior Convertible Notes due on
Sept. 1, 2013, by reason of stock splits, stock dividends, and
other events described therein. The Senior Convertible Notes due
on Sept. 1, 2013, were acquired by the selling stockholders in a
private placement by the Company that closed on July 2, 2012.
A copy of the amended prospectus is available for free at:
http://is.gd/d9luPe
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.
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.
LODGENET INTERACTIVE: Mark Cuban Lowers Equity Stake to 3.6%
------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Mark Cuban disclosed that as of Sept. 27,
2012, he beneficially owns 926,066 shares of common stock of
LodgeNet Interactive Corporation representing 3.6% of the shares
outstanding. Mr. Cuban previously reported beneficial ownership
of 1,997,768 common shares or a 7.8% equity stake as of Sept. 13,
2012. A copy of the amended filing is available for free at:
http://is.gd/iLFicq
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses. LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States. The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions. LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.
The Company reported a net loss of $631,000 in 2011, a net loss of
$11.68 million in 2010, and a net loss of $10.15 million in 2009.
The Company's balance sheet at June 30, 2012, showed $283.34
million in total assets, $439.32 million in total liabilities and
a $155.98 million total stockholders' deficiency.
* * *
As reported by the TCR on Aug. 7, 2012, Moody's Investors Services
downgraded LodgeNet Interactive Corp.'s Corporate Family Rating
(CFR) to Caa1 from B3 and changed the Probability of Default
Rating (PDR) to Caa2 from Caa1. The reason for the downgrade is
due to poor first and second quarter financial results and Moody's
expectations that they will not improve in the near term.
In the Aug. 7, 2012, edition of the TCR, Standard & Poor's Ratings
Services lowered its corporate credit rating on U.S. in-room
entertainment and data services provider LodgeNet Interactive
Corp. to 'CCC' from 'B-'. "The downgrade reflects LodgeNet's weak
second-quarter operating performance resulting from a sharp
reduction in its room base, which we expect will continue over the
near term," said Standard & Poor's credit analyst Hal Diamond.
LODGENET INTERACTIVE: Fails to Comply with Market Value Rule
------------------------------------------------------------
LodgeNet Interactive Corporation received on Sept. 21, 2012, a
letter from The NASDAQ OMX Group notifying the Company that it
fails to comply with NASDAQ Listing Rule 5450(b)(3)(C) because the
market value of publicly held shares of the Company's common stock
has fallen below the minimum $15,000,000 requirement for continued
listing for a period of at least 30 consecutive business days.
The NASDAQ letter has no immediate effect on the listing of the
Company's common stock.
In accordance with NASDAQ Listing Rule 5810(c)(3)(D), the Company
has a period of 180 calendar days, or until March 20, 2013, to
regain compliance with the minimum market value of publicly held
shares rule. If at any time before March 20, 2013, the market
value of publicly held shares of the Company's common stock is
$15,000,000 for a minimum of 10 consecutive business days, the
Company will regain compliance with the market value of publicly
held shares rule, subject to NASDAQ's discretion to increase this
time period. If compliance with the market value of publicly held
shares rule cannot be demonstrated by March 20, 2013, NASDAQ will
issue a Staff Delisting Determination Letter and the Company's
common stock will be subject to delisting from The Nasdaq Global
Select Market.
In the event that the Company receives a NASDAQ Staff Delisting
Determination Letter, NASDAQ rules permit the Company to appeal
any delisting determination to a NASDAQ Hearings Panel.
Alternatively, NASDAQ may permit the Company to transfer its
common stock to The NASDAQ Capital Market if, at that time, it
satisfies the requirements for initial inclusion set forth in
NASDAQ Listing Rule 5505. If its application for transfer is
approved, the Company would have an additional 180 calendar days
to comply with NASDAQ Listing Rule 5450(b)(3)(C) in order to
remain on The NASDAQ Capital Market.
The Company previously received a letter from NASDAQ notifying the
Company that it failed to comply with NASDAQ Listing Rule
5450(a)(1) because the bid price of the Company's common stock
closed below $1.00 for 30 consecutive business days prior to Aug.
31, 2012.
The Company will continue to monitor both the bid price for its
common stock and the market value of publicly held shares of its
common stock, and will continue to assess the various alternatives
available to it to allow it to regain compliance with the minimum
bid price rule and the market value of publicly held shares rule.
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses. LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States. The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions. LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.
The Company reported a net loss of $631,000 in 2011, a net loss of
$11.68 million in 2010, and a net loss of $10.15 million in 2009.
The Company's balance sheet at June 30, 2012, showed $283.34
million in total assets, $439.32 million in total liabilities and
a $155.98 million total stockholders' deficiency.
* * *
As reported by the TCR on Aug. 7, 2012, Moody's Investors Services
downgraded LodgeNet Interactive Corp.'s Corporate Family Rating
(CFR) to Caa1 from B3 and changed the Probability of Default
Rating (PDR) to Caa2 from Caa1. The reason for the downgrade is
due to poor first and second quarter financial results and Moody's
expectations that they will not improve in the near term.
In the Aug. 7, 2012, edition of the TCR, Standard & Poor's Ratings
Services lowered its corporate credit rating on U.S. in-room
entertainment and data services provider LodgeNet Interactive
Corp. to 'CCC' from 'B-'. "The downgrade reflects LodgeNet's weak
second-quarter operating performance resulting from a sharp
reduction in its room base, which we expect will continue over the
near term," said Standard & Poor's credit analyst Hal Diamond.
LODGENET INTERACTIVE: Mark Cuban Discloses 6.6% Equity Stake
------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Mark Cuban disclosed that as of Sept. 26,
2012, he beneficially owns 1,687,747 shares of common stock of
LodgeNet Interactive Corporation representing 6.6% of the shares
outstanding. Mr. Cuban previously reported beneficial ownership
of 1,997,768 common shares or a 7.8% equity stake as of Sept. 13,
2012. A copy of the amended filing is available for free at:
http://is.gd/zBsQgP
About LodgeNet Interactive
Sioux Falls, South Dakota-based LodgeNet Interactive Corporation
(Nasdaq:LNET), formerly LodgeNet Entertainment Corp. --
http://www.lodgenet.com/-- provides media and connectivity
solutions designed to meet the unique needs of hospitality,
healthcare and other guest-based businesses. LodgeNet Interactive
serves more than 1.9 million hotel rooms worldwide in addition to
healthcare facilities throughout the United States. The Company's
services include: Interactive Television Solutions, Broadband
Internet Solutions, Content Solutions, Professional Solutions and
Advertising Media Solutions. LodgeNet Interactive Corporation
owns and operates businesses under the industry leading brands:
LodgeNet, LodgeNetRX, and The Hotel Networks.
The Company reported a net loss of $631,000 in 2011, a net loss of
$11.68 million in 2010, and a net loss of $10.15 million in 2009.
The Company's balance sheet at June 30, 2012, showed $283.34
million in total assets, $439.32 million in total liabilities and
a $155.98 million total stockholders' deficiency.
* * *
As reported by the TCR on Aug. 7, 2012, Moody's Investors Services
downgraded LodgeNet Interactive Corp.'s Corporate Family Rating
(CFR) to Caa1 from B3 and changed the Probability of Default
Rating (PDR) to Caa2 from Caa1. The reason for the downgrade is
due to poor first and second quarter financial results and Moody's
expectations that they will not improve in the near term.
In the Aug. 7, 2012, edition of the TCR, Standard & Poor's Ratings
Services lowered its corporate credit rating on U.S. in-room
entertainment and data services provider LodgeNet Interactive
Corp. to 'CCC' from 'B-'. "The downgrade reflects LodgeNet's weak
second-quarter operating performance resulting from a sharp
reduction in its room base, which we expect will continue over the
near term," said Standard & Poor's credit analyst Hal Diamond.
LON MORRIS COLLEGE: Closed Lon Morris College Prepares for Auction
-----------------------------------------------------------------
American Bankruptcy Institute reports that defeated by a federal
rule that automatically takes federal school loans away from
bankrupt colleges, Texas liberal-arts school Lon Morris College is
preparing to sell itself.
About Lon Morris College
Lon Morris College was founded in 1854 as a not-for-profit
religiously affiliated two-year degree granting institution. Over
the past 158 years, the College has impacted the lives of
countless members of the local Jacksonville community in Texas.
Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex.
Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough
endowments to pay teachers, vendors and creditors. In May 2012,
the Debtor missed two payrolls and vendor payables, utilities, and
long term debt were also past due. From a headcount of 1,070 in
2010, enrolments have been down to 547 in 2012. The president of
the College has resigned, as have members of the board of
trustees.
Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's
Dawn Ragan took over management of the College as chief
restructuring officer. Attorneys at McKool Smith P.C., and Webb
and Associates serve as counsel to the Debtor. Capstone Partners
serves as financial advisor.
According to its books, on April 30, 2012, the College had roughly
$35 million in assets, including $11 million in endowments and
restricted funds, and $18 million in funded debt and $2 million in
trade and other liabilities. The Debtor disclosed $29,957,488 in
assets and $15,999,058 in liabilities as of the Chapter 11 filing.
Amegy Bank is represented in the case by James Matthew Vaughn,
Esq., at Porter Hedges LLP.
LOUISIANA RIVERBOAT: Gets Final OK to Hire KCC as Claims Agent
--------------------------------------------------------------
The Hon. Stephen V. Callaway of the U.S. Bankruptcy Court for the
Western District of Louisiana authorized, on a final basis,
Louisiana Riverboat Gaming Partnership, et al. to employ Kurtzman
Carson Consultants LLC as claims, noticing, soliciting and
balloting agent.
Legends Gaming LLC, owns gaming facilities located in Bossier
City, Louisiana, and Vicksburg, Mississippi, operating under the
DiamondJack's trade name.
Legends Gaming LLC, and five related entities, including Louisiana
Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr.
W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31,
2012, to sell the business for $125 million to Global Gaming
Solutions LLC, absent higher and better offers.
Legends Gaming acquired the business from Isle of Capri Casinos
Inc., in 2006 for $240 million. After breaching covenant with
lenders, the Debtors in March 2008 sought Chapter 11 protection,
jointly administered under Louisiana Gaming Partnership (Case No.
08-10824). The Debtors emerged from bankruptcy in September 2009
and retained ownership and operation of two "DiamondJacks" hotels
and casinos in Bossier City and Vicksburg. The Plan restructured
$162.1 million owed to the first lien lenders and $75 million owed
to secured lien lenders, which would be paid in full, with
interest, over time.
The Debtors' properties comprise 60,000 square feet of gaming
space with 1,913 slot machines, 48 table games and 693 hotel
rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana
and $39.7 million in Mississippi.
As of July 31, 2012, first lien lenders are owed $181.2 million
and second lien lenders are owed $114.7 million. Louisiana
Riverboat Gaming Partnership disclosed $104,846,159 in assets and
$298,298,911 in liabilities as of the Chapter 11 filing.
Attorneys at Heller, Draper, Hayden Patrick & Horn serve as
counsel to the Debtors. Sea Port Group Securities, LLC is the
financial advisor. Kurtzman Carson Consultants LLC as is the
claims and notice agent. The Debtors have tapped Jenner & Block
LLP as special counsel.
The Court authorized the Debtors to sell their assets at an
Oct. 15, auction.
LOUISIANA RIVERBOAT: Gets Final OK to Use Cash Collateral
---------------------------------------------------------
The Hon. Stephen V. Callaway of the U.S. Bankruptcy Court for the
Western District of Louisiana authorized, on a final basis,
Louisiana Riverboat Gaming Partnership, et al., to use of the cash
collateral of the first lien lenders and second lien lenders.
Each of the lenders asserts that certain prepetition obligations
were secured by valid, enforceable and properly perfected liens on
and security interest in substantially all assets and cash held in
certain accounts of the Debtors.
The Debtors said they have an immediate need to use the lenders'
cash collateral to pay necessary expenses incurred in the ordinary
court of their business, including payroll and cost associated
with their restructuring and these proceedings.
According to the Debtors, as of the Petition Date they were liable
to:
-- Wilmington Trust Company, as administrative agent for the
First Lien Lenders in respect of obligations under the First
Lien Credit Agreement and related agreements and documents
for the aggregate amount of not less than $181,182,013; and
-- Wells Fargo Bank, N.A., as administrative agent for the
Second Lien Lenders in respect of obligations under the
Second Lien Credit Agreement and related agreements and
documents for the aggregate amount of not less than
$116,252,898.
As adequate protection from any diminution in value of the
lender's collateral, the Debtors will:
1. grant first priority replacement security interests in and
liens upon all postpetition property of the Debtors and
their estates and all proceeds and products of such property
subject only to the carve-out; and
2. grant second priority replacement security interests and pay
a total of $40,000 to the Second Lien Agent to be applied to
outstanding and future agency, administrative and
transaction fees of the Second Lien Agent during the Chapter
11 cases.
A copy of the order and the budget is available for free at
http://bankrupt.com/misc/LOUISIANARIVERBOAT_CC_order.pdf
About Legends Gaming
Legends Gaming LLC, owns gaming facilities located in Bossier
City, Louisiana, and Vicksburg, Mississippi, operating under the
DiamondJack's trade name.
Legends Gaming LLC, and five related entities, including Louisiana
Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr.
W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31,
2012, to sell the business for $125 million to Global Gaming
Solutions LLC, absent higher and better offers.
Legends Gaming acquired the business from Isle of Capri Casinos
Inc., in 2006 for $240 million. After breaching covenant with
lenders, the Debtors in March 2008 sought Chapter 11 protection,
jointly administered under Louisiana Gaming Partnership (Case No.
08-10824). The Debtors emerged from bankruptcy in September 2009
and retained ownership and operation of two "DiamondJacks" hotels
and casinos in Bossier City and Vicksburg. The Plan restructured
$162.1 million owed to the first lien lenders and $75 million owed
to secured lien lenders, which would be paid in full, with
interest, over time.
The Debtors' properties comprise 60,000 square feet of gaming
space with 1,913 slot machines, 48 table games and 693 hotel
rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana
and $39.7 million in Mississippi.
As of July 31, 2012, first lien lenders are owed $181.2 million
and second lien lenders are owed $114.7 million. Louisiana
Riverboat Gaming Partnership disclosed $104,846,159 in assets and
$298,298,911 in liabilities as of the Chapter 11 filing.
Attorneys at Heller, Draper, Hayden Patrick & Horn serve as
counsel to the Debtors. Sea Port Group Securities, LLC is the
financial advisor. Kurtzman Carson Consultants LLC as is the
claims and notice agent. The Debtors have tapped Jenner & Block
LLP as special counsel.
The Court authorized the Debtors to sell their assets at an
Oct. 15, auction.
LYNYRD SKYNYRD: Files for Chapter 11 Bankruptcy
-----------------------------------------------
Jamie Santo at Bankruptcy Law360 reports that fans of Southern
rock and Southern food could only hold up a lighter and wait for
an encore Wednesday after Lynyrd Skynyrd BBQ & Beer, the Las Vegas
restaurant named for and partially owned by the legendary band,
sought Chapter 11 protection in Nevada bankruptcy court.
Known for perennial encore favorite "Free Bird" and hard rocking
hits such as "Sweet Home Alabama" and "Gimme Three Steps," Lynyrd
Skynyrd entered the Sin City food-service business in December
2011, according to Bankruptcy Law360.
MARQUETTE TRANSPORTATION: S&P Affirms 'B' Corp. Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' long-term
corporate credit rating on Paducah, Ky.-based Marquette
Transportation Co. Holdings LLC. The outlook is stable.
"At the same time, we affirmed the 'B-' rating on the company's
$250 million second-lien notes. The '5' recovery rating on these
notes, which indicates our expectations of a modest (10% to 30%)
recovery in a payment default scenario, is unchanged," S&P said.
"Marquette will likely experience modest near-term earnings
pressures from reduced cargo volumes caused by the U.S. drought,"
said Standard & Poor's credit analyst Funmi Afonja. "The drought
has caused lower crop yields and resulted in lower shipping
volumes and navigation delays along various points on the U.S.
inland river systems. We believe that the company can mitigate
margin pressure by cutting expenses, laying up vessels, reducing
crew staff and switching laid up boats to cheaper shore-based
power to offset fuel expenses. Our rating and outlook on Marquette
factor in the near-term impact of the drought, a slowing export
market, and the fact that the company has over the past year taken
on debt to fund fleet expansion. Still, we believe that the
company's fixed-rate, long-term contracts, which make up slightly
less than half of revenues, will partly offset the strain on
revenue resulting from these factors," S&P said.
"The ratings on Marquette reflect its high financial leverage,
participation in the highly competitive and capital-intensive
shipping industry, and exposure to cyclical demand swings in
certain end markets. The ratings also reflect the potential for
high customer concentration to hurt earnings and the company's
vulnerability to weather-related disruptions in business
operations. Positive credit factors include Marquette's leading
market position, albeit in a niche business segment, as an
independent provider of towboat operations in intra-U.S. shipping.
The company also benefits from relatively stable revenues under
fixed-rate, long-term contracts and from competitive barriers to
entry under the Jones Act. The Jones Act requires that vessels
carrying shipments between U.S. ports be built registered in the
U.S. and crewed with U.S. citizens. These requirements limit
competition by excluding foreign-flagged vessels. Marquette's
entire fleet is Jones Act-qualified," S&P said.
"We categorize Marquette's business risk profile as 'weak,' its
financial risk profile as "highly leveraged," and its liquidity as
'adequate,' as our criteria define these terms. Marquette does not
publicly disclose financial information," S&P said.
"Marquette is the largest independent towboat operator in U.S.
domestic shipping. Marquette's towboats provide the horsepower for
river barges that transport liquid and drybulk commodities. In
addition to its towboat service business, which accounts for the
substantial majority of revenues and earnings, Marquette has a
drybulk barge transportation business that moves commodities such
as coal, aggregates, and scrap. The company also provides salvage,
dredging, and special cargo services. In March 2007, private
investors purchased the majority of the company, resulting in
significant incremental debt leverage. The Eckstein family and
Marquette's management own the remaining shares. The company's
financial covenants limit dividend payments to the owners, so the
current or future owners could recapitalize the company with
additional debt," S&P said.
"Marquette competes with other independent horsepower service
providers, with barge operators that have in-house horsepower
capabilities, with drybulk barge carriers, and with other modes of
freight transportation, including rail and, to a lesser extent,
trucking. Marquette's towboat fleet has a wide range of horsepower
capacities, capable of handling sizable and small tows.
Marquette's active fleet consists of 119 towboats and tugboats--
mostly owned--and 806 dry cargo barges, a small number of which
are chartered in. The average age of the barges is eight years,
among the youngest in the industry, and the towboats are 26 years
old, younger than the industry average. The company does not
anticipate needing to replace any of its fleet for the next
several years," S&P said.
Various cyclical swings in demand and weather-related disruptions
can affect Marquette's operating performance. Marquette's fixed-
rate, long-term contracts, which make up slightly less than half
of revenues, provide stability and mitigate some of these risks.
The substantial majority of revenues and earnings are from the
towboat service business, for which the rates are less volatile
than freight rates in the drybulk barge transportation business,
which accounts for a modest portion of revenues.
"For the 12 months ended June 30, 2012, Marquette's revenues and
EBITDA margins improved moderately relative to the prior year
period, on a strong export market, increased ton miles travelled,
and rate gains. As a result, last 12 months ended June 2012 Funds
flow from operations (FFO) to debt improved to 14.6% from 11.1%,
and adjusted debt to EBTIDA (adjusted for operating leases)
decreased to 5.4x from 6.5x. We expect that a cooling U.S.
economy, slowing export market, and the effects of the U.S.
drought will likely result in the company giving back most of the
gains experienced during the past year. Over the next year, we
expect fully adjusted debt to EBITDA to increase to about 6.5x and
FFO to debt of above 10%, still appropriate for the rating," S&P
said.
"The outlook is stable. We believe that Marquette will maintain
credit measures appropriate for the rating, despite near-term
earnings pressures from reduced cargo volumes caused by the U.S.
drought and a slowing export market. We could lower the ratings if
drought conditions cause worse-than-expected earnings decline, the
export market conditions weaken more than we anticipate, the
company suffers the loss of a major customer, or it becomes
subject to other operating challenges, causing debt to EBITDA of
more than 7x or FFO to debt to fall to the high-teens percent
area. Although less likely, we could raise the ratings if earnings
and credit metrics strengthen as a result of reduced debt or
earnings growth, causing debt to EBITDA to fall to less than 4x or
FFO to debt to rise to the high-teens percent area," S&P said.
MERCY MEDICAL: S&P Cuts Series 2000 Revenue Bond Rating to 'BB'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term rating to
'BB' from 'BB+' on Cuyahoga County, Ohio's series 2000 hospital
facilities revenue bonds, issued for Mercy Medical Center (MMC).
The outlook is stable.
"The rating action reflects our view of MMC's continued operating
losses and a decline in cash, generating metrics commensurate with
a 'BB' rating," said Standard & Poor's credit analyst Avanti Paul.
"Although several initiatives are underway to improve cash flow
and grow unrestricted reserves, cash contributions required for a
small capital project could constrain the improvement in the near
term."
The rating further reflects S&P's view of MMC's:
Operating losses that continued in fiscal 2011 and fiscal 2012
to date although the hospital has implemented several margin
improvement initiatives and anticipates generating a positive
operating margin in fiscal 2013;
Light though improved maximum annual debt service (MADS)
coverage;
Decline in unrestricted reserves in fiscal 2011 and fiscal
2012 to date; and
Near-term capital projects, which are small but constrain the
improvement in unrestricted reserves.
"The stable outlook reflects our anticipation that MMC will
successfully execute its margin improvement initiatives, continue
to record favorable volumes, and trend toward healthier operating
levels, generating stronger MADS coverage," S&P said.
MERITOR INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Troy, Mich.-based Meritor Inc. to stable from positive. "We are
also affirming our 'B' corporate credit rating on the company,"
S&P said.
"The outlook revision reflects our opinion that Meritor's credit
profile will not support a higher corporate credit rating in
fiscal 2013," said Standard & Poor's credit analyst Lawrence
Orlowski. "Meritor's revenue was down 13% in its fiscal third
quarter, reflecting year-over-year declines in its commercial,
industrial, and aftermarket businesses. The company lowered its
guidance for fiscal 2012. We expect revenue will be about $4.5
billion and the adjusted EBITDA margin to be about 8% in fiscal
2012. While the company has improved its operational performance
by rationalizing its European footprint and implementing better
commodity cost recovery mechanisms, we are concerned that economic
activity will remain weak in Europe and Latin America in 2013.
Therefore, we do not expect the company's leverage to decline to
4x in fiscal 2013, which would support a higher rating."
"We expect commercial-vehicle production in North America to rise
10% to 20% in 2012, while production is likely to decline about
10% in Europe and more than 20% in South America. Europe continues
to suffer from a weakening economy, whereas lower demand for Euro
V vehicles, because of higher truck prices and the difficulty in
securing vehicles with S-50 diesel fuel and urea-based diesel
exhaust fluid systems, have contributed to falling truck
production in South America. Additionally, the company's
industrial business presents a mixed picture. While Family of
Medium Tactical Vehicles shipments should increase 40% in fiscal
2012, demand of off-highway products should decrease about 15% in
China as the government reduced infrastructure projects. Also, we
expect Meritor's industrial business in India to decline about 5%
in fiscal 2012 in part because of weak exports and a falloff in
investments leading to lower production," S&P said.
"Still, the strength of recovery in commercial-vehicle demand
remains subject to the sustainability of economic recovery in many
markets, and we believe sluggish economic news could slow the
rebound in truck orders. For example, in North America, build
rates have fallen. And although the average age of the U.S. Class
8 truck fleet has reached record highs, we believe trucking
companies could allow their fleets to age further in this economic
cycle if the recovery in freight tonnage falters," S&P said.
"In the fiscal third quarter, revenue was $1.11 billion, down 13%
year over year. Commercial-truck sales were $690 million, down 10%
year over year, mostly reflecting decreased original equipment
sales in Europe and South America, which higher sales in North
America partially offset. Industrial sales were $242 million, down
21% as a result of weaker sales in the Asia-Pacific region.
Aftermarket and trailer sales were $265 million, down 5% year over
year because of the impact of unfavorable foreign exchange as well
as lower sales in the aftermarket replacement business in North
America and Europe, which strong demand for trailer products
partially offset," S&P said.
"For the 12 months ended June 30, 2012, EBITDA interest coverage
was 3.0x, and adjusted debt to EBITDA was 6.1x. We expect leverage
to stay above 5x at the end of fiscal 2012 and above 4x by the end
of fiscal 2013," S&P said.
"Our rating outlook on Meritor is stable. The company lowered its
guidance for fiscal 2012, reflecting weak demand in most regions
of the world. While the company has improved its operational
performance, we expect that economic activity will remain weak in
Europe and Latin America in 2013. Therefore, we do not expect the
company's leverage to decline to 4x in fiscal 2013, which would
support a higher rating. For the current ratings, we expect
adjusted leverage to stay below 6x in fiscal 2012. Moreover, we
would not expect any material use of free cash flow," S&P said.
"To raise the rating, we would expect leverage to be at or below
4x on a sustained basis. This could occur if, for instance,
revenue increases more than 10% and gross margins expand by 200
basis points (exceeding 13%) in fiscal 2013 versus the level of
gross margins in fiscal 2012. We believe this significant margin
expansion would be possible if global commercial-vehicle demand
began to pick up around the world. For an upgrade, we would also
expect Meritor to generate positive free cash flow on a sustained
basis," S&P said.
"We could lower our ratings if commercial-truck and industrial
demand continues to falter. For example, a downgrade could occur
if Meritor uses more than $100 million in free operating cash flow
or leverage exceeds 6x and we don't expect near-term improvement.
This could occur if revenue were flat or negative and gross
margins fall below 10% in fiscal 2013," S&P said.
METRO FUEL: Files for Chapter 11 Reorganization
-----------------------------------------------
METRO Fuel Oil Corp. and its subsidiaries, one of the largest
independent petroleum and energy services terminals in the New
York Metropolitan Area, disclosed on Sept. 27, 2012, they filed
petitions in the United States Bankruptcy Court for the Eastern
District of New York seeking relief under chapter 11 of the United
States Bankruptcy Code. METRO is actively looking to engage a
strategic partner or investor to facilitate future growth and
expansion of the Company.
"We want to be clear about one thing-our doors are open and we are
continuing to make deliveries," said Paul Pullo, the Company's
President. "We are committed to the relationships we have with
our customers, vendors and our dedicated employees and are working
to find a partnership that will put METRO on solid financial
footing and prepare us for the future."
"We are grateful for the financing support from Third Avenue
Management LLC and Zell Credit Opportunities Master Fund LP, who
have provided a $10 million financing commitment," said CRO David
Johnston of AlixPartners. The court granted immediate access to
$3 million of financing and the full use of cash generated from
operations.
For more information regarding METRO's reorganization, please
contact the Company's hotline at 1.888.361.1741.
METRO Fuel, founded in 1942 in Brooklyn, NY, is an independent
petroleum and energy services terminals in the New York
Metropolitan Area, supplying and delivering bioheat, biodiesel,
heating oil, air conditioning, ultra low sulfur diesel fuel,
natural gas and gasoline.
MISSION NEWENERGY: Had A$21.7-Mil. Net Loss in Fiscal 2011
----------------------------------------------------------
Mission NewEnergy Limited filed on Sept. 27, 2012, Amendment No. 2
to its annual report on Form 20-F/A for the fiscal year ended
June 30, 2011.
Grant Thornton Audit Pty Ltd, in Perth, expressed substantial
doubt about Mission New Energy's ability to continue as a going
concern. The independent auditors noted that the Company incurred
a net loss of A$21.7 million during the year ended June 30, 2011,
and as of that date, the Company's total liabilities exceeded its
total assets by A$29.7 million and its net cash used in operating
activities was A$15.1 million.
The Company reported a net loss of A$21.7 million on
A$16.9 million of revenues for fiscal 2011, compared with a net
loss of A$97.8 million on A$16.5 million of revenues for fiscal
2010.
Total expenses decreased by A$74.5 million (75%) from
A$99.2 million in fiscal 2010 to A$24.6 million in fiscal 2011
principally due to a non-cash impairment of property plant and
equipment of A$73.1 million in fiscal 2010 compared to A$3.5 in
fiscal 2011.
The Company's balance sheet at June 30, 2011, showed
A$36.6 million in total assets, A$66.3 million in total
liabilities, and an equity deficiency of A$29.7 million.
A copy of the Form 20-F/A is available at http://is.gd/AKs8Bj
Subiaco, Western Australia-based MissionNew Energy Limited is a
producer of biodiesel that integrates sustainable biodiesel
feedstock cultivation, biodiesel production and wholesale
biodiesel distribution focused on the government mandated markets
of the United States and Europe.
NATIONAL MENTOR: Moody's Says Facilities Repricing Credit Pos.
--------------------------------------------------------------
Moody's Investors Service said the proposed repricing and upsizing
of National Mentor Holdings, Inc.'s senior secured credit
facilities is credit positive.
The last rating action on National Mentor Holdings was the
assignment of a B1 rating to the company's senior secured credit
facilities on January 20, 2011.
The principal methodology used in the rating was Loss Given
Default for Speculative-Grade Non-Financial Companies in the U.S.,
Canada and EMEA published in June 2009.
Headquartered in Boston, MA, National Mentor Holdings, Inc.,
through its subsidiaries, provides home and community-based human
services to (i) individuals with intellectual/developmental
disabilities (IDD); (ii) at-risk children and youth with
emotional, behavioral or medically complex needs and their
families (ARY); and (iii) persons with acquired brain injury (ABI)
and other catastrophic injuries and illness. Most of the company's
services involve residential support, typically in small group
homes, while non-residential services consist primarily of day
programs and periodic services in various settings. National
Mentor has been owned by private equity sponsor Vestar Capital
Partners V, L.P. since 2006. The company reported revenue of
approximately $1.1 billion for the twelve months ended Sept. 30,
2011.
NATIONAL MENTOR: S&P Retains 'B+' Rating on $550MM Term Loan
------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on U.S.
behavioral healthcare provider National Mentor Holdings Inc.
(B/Stable/--) are unaffected by the company's proposed changes to
its term loan B, which include a $20 million upsizing to $550
million, and reduced pricing. The new pricing would be 25 to 50
basis points lower--to LIBOR plus 475 to 500 basis points from
LIBOR plus 525. The LIBOR floor will also be reduced by 50 basis
points to 1.25% from a 1.75% floor. "We expect the lower pricing
to reduce interest expense by about $5 million annually. The
additional term loan debt has no significant effect on National
Mentor's credit measures and we expect cushions on debt covenants
to remain comfortably above 10%," S&P said.
"The corporate credit rating on National Mentor is 'B' and the
rating outlook is stable. The rating reflects our view of National
Mentor's 'highly leveraged' financial risk profile, supported by
credit metrics of debt to EBITDA over 5x and funds from operations
of less than 10%. The company's 'weak' business risk profile
continues to reflect its significant exposure to reimbursement
risk and the fragmented nature of the behavioral health industry,"
S&P said.
RATINGS LIST
National Mentor Holdings Inc.
Corporate Credit Rating B/Stable/--
Senior Secured
$550 mil term loan B B+
Recovery Rating 2
NATIONAL RESERVE: Fitch Lowers Issuer Default Rating to 'B-'
------------------------------------------------------------
Fitch Ratings has downgraded National Reserve Bank's (NRB) Long-
term Issuer Default Ratings (IDRs) to 'B-' from 'B' and maintained
the ratings on Rating Watch Negative (RWN).
Rating Action Rationale and Drivers
The downgrade reflects the recent deterioration of NRB's liquidity
position due to funding base erosion, a significant reduction in
unpledged securities since Fitch placed the bank's ratings on RWN
(see "Fitch Places National Reserve Bank on Rating Watch
Negative", dated 30 March 2012) and negative pre-impairment
profitability. NRB's ratings also consider the bank's high
balance sheet concentrations and the weak quality of some loan
exposures. However, the ratings are supported by NRB's still
reasonable solvency and the stability to date of related-party
funding.
Fitch has maintained the ratings on RWN in light of further
expected and potential funding outflows and the bank's high
dependence on timely loan redemption by borrowers and asset sales
to finance repayments to creditors. The RWN also reflects the
risk that pressure on NRB's shareholder from some Russian
authorities may continue to increase.
NRB's third-party customer deposits fell by about RUB1.4bn between
end-Q112 and 21 September 2012. In addition to these outflows,
liquidity has been negatively affected by a pre-impairment loss of
RUB0.4bn in H112. Furthermore, asset encumbrance has grown as NRB
has pledged its entire on-balance sheet equities book (mainly
shares of OAO Gazprom ('BBB'/Stable) and OJSC Aeroflot
('BB+'/Stable)) to raise funding.
As a result, NRB estimates its currently available liquid assets
(cash on accounts and short-term bank deposits) at about RUB2.6bn,
which is less than a RUB2.9bn payment of principal and accrued
interest on a subordinated loan from Gazprom, due on 31 December
2012. Third-party deposits are currently about RUB5.7bn, and NRB
also has about RUB5.2 billion of third-party repo funding, secured
by Gazprom and Aeroflot shares. Repo funding secured by the
Aeroflot stock (RUB2.7bn) is short-term, but both Gazprom and
Aeroflot shares can be refinanced with the Central Bank (CBR),
reducing liquidity risks associated with maturities of current
repo funding.
NRB aims to strengthen its liquidity through scheduled loan
repayments (RUB2bn) and mortgage loan sales (RUB1.8bn of the
current RUB2.3bn non-impaired mortgage portfolio) in Q412. Fitch
notes that NRB has already demonstrated an ability to sell
mortgage loans in 2011. However, in the agency's view, the bank's
strategy to strengthen its liquidity involves significant
execution risks.
Non-performing loans comprised a reported 5.6% of the corporate
portfolio at end-August 2012. Fitch has concerns about the
quality of some loans not currently classified as non-performing.
However, the agency believes that current provisioning levels in
statutory accounts are at least adequate relative to loan
impairment levels.
More positively, liquidity has benefited from the stability to
date of related-party funding, which stood at RUB4.5bn at 21
September 2012. In addition, NRB's regulatory capital ratio, of
20.1% at end-August 2012, was well above the minimum required
level of 10%, and the equity/assets ratio stood at 38%,
notwithstanding an additional RUB1.8bn loan impairment charge
booked in July 2012 further to a Central Bank ruling.
Rating Sensitivities
The Long-term IDRs could be downgraded further if NRB is unable to
strengthen its liquidity position prior to the scheduled
subordinated debt repayment in December 2012, or if other funding
outflows result in a further tightening of the liquidity position.
A strengthening of the liquidity position and successful
implementation of management's plans to sell assets and repay
creditors could result in the ratings stabilising at their current
level.
The rating actions are as follows:
-- Long-Term foreign currency IDR: downgraded to 'B-' from 'B';
maintained on RWN
-- Short-Term foreign currency IDR: rated at 'B'; maintained on
RWN
-- Local Currency Long-Term IDR: downgraded to 'B-' from 'B';
maintained on RWN
-- National Long-Term Rating: downgraded to 'BB-(rus)' from
'BBB(rus)'; maintained on RWN
-- Viability Rating: downgraded to 'b-' from 'b'; maintained on
RWN
-- Support Rating: affirmed at '5'
-- Support Rating Floor: affirmed at 'No Floor'
NET ELEMENT: Kenges Rakishev Plans to Invest $23.4MM in Cazador
---------------------------------------------------------------
Kenges Rakishev, holder of 27.8% of the shares outstanding of Net
Element, Inc., disclosed in a regulatory filing with the U.S.
Securities and Exchange Commission that it intends to purchase
2,335,155 shares of common stock of Cazador Acquisition
Corporation from certain stockholders of Cazador for aggregate
proceeds of $23,444,956. Mr. Rakishev said the investment will
help ensure that Cazador has the minimum cash amount of
$23,500,000, which minimum cash amount is required under the
Merger Agreement.
As reported by the TCR on June 15, 2012, Net Element and Cazador
announced the execution of a merger agreement that will infuse up
to $81 million into Net Element and provide the necessary
financial resources for the Company's next stage of growth. The
combined entity, which will be named "Net Element
International," is applying to be listed on NASDAQ under the
ticker symbol "NETE."
Kenges Rakishev and Mark Global Corporation previously stated
their intention to vote their shares of common stock to approve
the Merger.
Mr. Rakishev will resign from the board of directors of the Net
Element immediately following the consummation of that merger.
A copy of the filing is available for free at:
http://is.gd/EomAYM
About Net Element
Miami, Fla.-based Net Element, Inc., formerly TOT Energy, Inc.,
currently operates several online media Web sites in the film,
auto racing and emerging music talent markets.
Following the 2011 results, Daszkal Bolton LLP, in Fort
Lauderdale, Florida, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has experienced recurring losses
and has an accumulated deficit and stockholders' deficiency at
Dec. 31, 2011.
The Company reported a net loss of $24.85 million in 2011,
compared with a net loss of $3.10 million in 2010.
The Company's balance sheet at June 30, 2012, showed $3.22 million
in total assets, $7.69 million in total liabilities, and a
$4.46 million total stockholders' deficit.
NIP COMPANY: Chapter 11 Trustee Hiring Stutzman as Counsel
----------------------------------------------------------
The Chapter 11 trustee appointed to take over management of The
NIP Company has won Bankruptcy Court approval to employ his own
law firm, Stutzman, Bromberg, Esserman & Plifka, as his Chapter 11
counsel effective as of June 19, 2012.
The Bankruptcy Court ousted management in June and installed
Steven A. Felsenthal as Chapter 11 trustee, at the behest of the
U.S. Trustee and creditor William L. MacDonald.
Mr. Felsenthal attests his law firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
The hourly rates of the firm's professionals are:
Professional Rates
------------ -----
Sander L. Esserman $775
Robert T. Brousseau $550
Peter C. D'Apice $550
Jacob L. Newton $475
David Klinger $450
Jo E. Hartwick $450
Andrea Ducayet $425
David J. Parsons $425
Cliff I. Taylor $425
Terrie D. Khoshbin $325
Brianna L. Cioni $350
Heather J. Panko $335
Cindy L. Jeffrey $185
Melanie R. Fain $125
The Chapter 11 Trustee and his firm can be reached at:
Steven A. Felsenthal, Esq.
Chapter 11 Trustee
STUTZMAN, BROMBERG, ESSERMAN & PLIFKA,
A Professional Corporation
2323 Bryan Street, Suite 2200
Dallas, TX 75201
Telephone: 214-969-4900
Facsimile: 214-969-4999
E-mail: felsenthal@sbep-law.com
- and -
Jacob L. Newton, Esq.
Heather J. Panko, Esq.
STUTZMAN, BROMBERG, ESSERMAN & PLIFKA,
A Professional Corporation
2323 Bryan Street, Suite 2200
Dallas, TX 75201-2689
Telephone: (214) 969-4900
Fax: (214) 969-4999
E-mail: newton@sbep-law.com
panko@sbep-law.com
Mr. MacDonald sought appointment of a Chapter 11 trustee or
conversion of the Debtor's case to a Chapter 7 liquidation, citing
fraud, dishonesty, incompetence, and gross mismanagement of the
affairs of the Debtors by C. William Pollock, the current
principal, before and after the bankruptcy filing.
Mr. MacDonald also noted there is no ongoing business to
reorganize. The only remaining employees are Mr. Pollock and his
fiance/assistant, and they are not generating any revenues. The
only source of revenues on the Debtors' schedules is a stream of
commissions from the renewals of variable life insurance policies
sold prior to February 2011. Mr. MacDonald said Mr. Pollock is
jeopardizing the interests of creditors by unlawfully collecting
those commissions (which he claims on the schedules are worth over
$4.5 million) through a sham consulting contract in violation of
federal securities laws and regulations.
In appointing the case trustee, the bankruptcy judge directed the
Debtors to cooperate with the trustee.
Mr. MacDonald is the Debtor's largest unsecured creditor according
to a creditors' list filed almost a month after bankruptcy filing.
The list, delivered to the Court on March 23, disclosed the
Debtor's nine largest unsecured creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
William L. MacDonald Stock Purchase Note $1,524,499
7555 Plein Aire
San Diego, CA 92127
Wincrest - Chuck Watson Stock Purchase Note $1,101,595
5120 Woodway, Suite 10010
Houston, TX 77056
Arthur Laffer Loan $565,715
2909 Poston Ave, 2nd Floor
Nashville, TN 37203
Select Capital Loan $529,169
c/o Steve Harr
MUNSCH HARDT KOPF & HARR, P.C.
700 Louisiana St, Suite 4600
Houston, TX 77002-2845
C. William Pollock Loan $350,000
4501 Spanish Oaks Club Blvd
Unit 19
Austin, TX 7873
Mansfield Group Ltd. Loan $268,500
Cosmo Palmieri - Service Group
6907 N Capital of Texas Hwy
P.O. Box 341180
Austin, TX 78734
Victory Construction Company, Ltd. Loan $269,350
Cosmo Palmieri - Service Group
6907 N Capital of Texas Hwy
P.O. Box 341180
Austin, TX 78734
Registered Agent $64,560
The Corporation Trust Co
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
State Comptroller of Public Accounts Revenue $7,114
Acctg Div
Bankruptcy Section
P. O. Box 13528
Austin, TX 78711
About The NIP Company
The NIP Company -- aka NIP, National Insurance Partners, Inc., or
NIP-RCG, Inc. -- filed a bare-bones Chapter 11 petition in its
hometown in Austin, Texas (Bankr. W.D. Tex. Case No. 12-10393) on
Feb. 28, 2012. Its affiliate, San Diego, California-based
Retirement Capital Group, Inc., filed for Chapter 11 protection
(Bankr. W.D. Tex. Case No. 12-10396) on the same day. NIP and
Retirement Capital each estimated assets of up to $50 million and
debts of up to $10 million.
Judge H. Christopher Mott presides over the cases. The Debtor
sought and obtained approval to employ Thomas H. Grace, Esq., and
the law firm of Spencer Crain Cubbage Healy & McNamara PLLC as
counsel.
NIP COMPANY: Chapter 11 Trustee Taps Lain Faulkner as Accountant
----------------------------------------------------------------
The Chapter 11 trustee appointed to take over management of The
NIP Company has won Bankruptcy Court approval to employ Lain,
Faulkner & Co., P.C., as accountants.
The Bankruptcy Court ousted management in June and installed
Steven A. Felsenthal as Chapter 11 trustee, at the behest of the
U.S. Trustee and creditor William L. MacDonald. Mr. MacDonald
sought appointment of a Chapter 11 trustee or conversion of the
Debtor's case to a Chapter 7 liquidation, citing fraud,
dishonesty, incompetence, and gross mismanagement of the affairs
of the Debtors by C. William Pollock, the current principal,
before and after the bankruptcy filing.
Mr. MacDonald also noted there is no ongoing business to
reorganize. The only remaining employees are Mr. Pollock and his
fiance/assistant, and they are not generating any revenues. The
only source of revenues on the Debtors' schedules is a stream of
commissions from the renewals of variable life insurance policies
sold prior to February 2011. Mr. MacDonald said Mr. Pollock is
jeopardizing the interests of creditors by unlawfully collecting
those commissions (which he claims on the schedules are worth over
$4.5 million) through a sham consulting contract in violation of
federal securities laws and regulations.
According to the case docket, the U.S. Trustee on April 3 held a
Meeting of Creditors under Sec. 341 of the Bankruptcy Code.
Creditors had until July 2 to file proofs of claim in the case.
In appointing the case trustee, the bankruptcy judge directed the
Debtors to cooperate with the trustee.
Mr. Felsenthal is a lawyer at Stutzman, Bromberg, Esserman &
Plifka. In his request to hire accountants, the Chapter 11
trustee looks to Lain Faulkner to, among others:
a. assist the Trustee in cash management and control;
b. assist in gaining control of existing financial records and
electronic data;
c. reconstruct (as necessary) and maintain financial records to
prepare required financial reports and tax returns; and
d. prepare and file informational, federal and state tax
returns.
The firm's hourly rates are:
Professional Rates
------------ -----
Shareholders $345 to $450
CPA $225 to $340
Staff Accountants $150 to $215
Clerical and Bookkeepers $75 to $95
Lain Faulkner attests it is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
About The NIP Company
The NIP Company -- aka NIP, National Insurance Partners, Inc., or
NIP-RCG, Inc. -- filed a bare-bones Chapter 11 petition in its
hometown in Austin, Texas (Bankr. W.D. Tex. Case No. 12-10393) on
Feb. 28, 2012. Its affiliate, San Diego, California-based
Retirement Capital Group, Inc., filed for Chapter 11 protection
(Bankr. W.D. Tex. Case No. 12-10396) on the same day. NIP and
Retirement Capital each estimated assets of up to $50 million and
debts of up to $10 million.
Judge H. Christopher Mott presides over the cases. The Debtor
sought and obtained approval to employ Thomas H. Grace, Esq., and
the law firm of Spencer Crain Cubbage Healy & McNamara PLLC as
counsel.
NORANDA ALUMINUM: S&P Cuts Corp. Credit Rating to 'B'; Off Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Franklin, Tenn.-based Noranda Aluminum Holding Corp. to
'B' from 'B+'. "At the same time, we lowered our issue-level
rating on Noranda's $325 million term loan to 'B+' (one notch
above the corporate credit rating) from 'BB-'. We also lowered our
issue-level rating on Noranda Aluminum Acquisition's senior
unsecured notes due 2015 to 'CCC+' (two notches below the
corporate credit rating) from 'B-'," S&P said.
"We downgraded Noranda because we believe it is unlikely that the
company will achieve our previous EBITDA projections in 2012 and
2013 because aluminum prices are lower than we previously
expected," said credit analyst Megan Johnston. "In our view,
aluminum prices have been under pressure due to market concerns
about Chinese demand growth and economic uncertainty in the
eurozone, as well as a relatively stronger U.S. dollar as compared
with 2011."
"The stable rating outlook reflects our view that although credit
metrics are currently weak for the rating, we believe aluminum
prices will firm over the next several years such that leverage
returns to a range of 4x to 5x. We also expect liquidity to remain
adequate to fund capital expenditures and working capital," S&P
said.
NORTHLAKE FOODS: Dismissal of Suit Against Stephens Affirmed
------------------------------------------------------------
District Judge Virginia M. Hernandez Covington in Tampa, Florida,
affirmed bankruptcy court orders dismissing a clawback lawsuit
filed by David H. Crumpton, in his capacity as Distribution
Trustee for the Distribution Trust of Northlake Foods, Inc.,
against company shareholder, Richard Stephens. The lawsuit seeks
to recoup $94,429 that the company paid Mr. Stephens in 2006 as
dividend. The trustee argues the dividend payment constitutes a
fraudulent transfer under the United States Bankruptcy Code, 11
U.S.C. Sec. 544(b)(1) and the Georgia Uniform Fraudulent Transfers
Act, O.C.G.A. Sections 18-2-70 et seq.
The case before the District Court is, DAVID H. CRUMPTON,
Appellant, v. RICHARD STEPHENS, Appellee, Case No. 8:11-cv-2648-T-
33 (M.D. Fla.). A copy of the District Court's Sept. 27, 2012
Order is available at http://is.gd/glXNj2from Leagle.com.
Tampa, Florida-based Northlake Foods, Inc., is a "Subchapter S"
Georgia corporation that owned roughly 150 Waffle House
restaurants in Georgia, Florida, and Virginia. The company filed
for Chapter 11 relief (Bankr. M. D. Fla. Case No. 08-14131) on
Sept. 15, 2008. Lori V. Vaughan, Esq., Roberta A. Colton, Esq.,
and Stephanie C. Lieb, Esq., at Trenam, Kemker, Scharf, Barkin,
Frye, O'Neill & Millis, P.A., represented the Debtor as counsel.
In its schedules, the Debtor listed total assets of $8,449,885 and
total debts of $9,370,829.
On Jan. 28, 2009, in accordance with the Bankruptcy Court's order
confirming the Debtor's Chapter 11 plan, the Bankruptcy Court
approved the appointment of David H. Crumpton as Distribution
Trustee for the Debtor's Distribution Trust.
NORTHLAKE FOODS: Trustee Loses Clawback Suit Against McGarrity
--------------------------------------------------------------
District Judge Elizabeth A. Kovachevioh in Tampa, Florida,
affirmed bankruptcy court orders dismissing a clawback lawsuit
filed by David H. Crumpton, in his capacity as Distribution
Trustee for the Distribution Trust of Northlake Foods, Inc.,
against company shareholder, A. Douglas McGarrity. The lawsuit
seeks to recoup $94,429 that the company paid Mr. McGarrity in
2006 as dividend. The trustee argues the dividend payment
constitutes a fraudulent transfer under the United States
Bankruptcy Code, 11 U.S.C. Sec. 544(b)(1) and the Georgia Uniform
Fraudulent Transfers Act, O.C.G.A. Sections 18-2-70 et seq.
The case before the District Court is, DAVID H. CRUMPTON, in his
capacity as Distribution Trustee for the Distribution Trust of
Northlake Foods, Inc., Appellant, v. A. DOUGLAS MCGARRITY,
Appellee, Case No. 8:11-CV-2649-T-17 (M.D. Fla.). A copy of the
District Court's Sept. 27, 2012 Order is available at
http://is.gd/K00FCAfrom Leagle.com.
Tampa, Florida-based Northlake Foods, Inc., is a "Subchapter S"
Georgia corporation that owned roughly 150 Waffle House
restaurants in Georgia, Florida, and Virginia. The company filed
for Chapter 11 relief (Bankr. M. D. Fla. Case No. 08-14131) on
Sept. 15, 2008. Lori V. Vaughan, Esq., Roberta A. Colton, Esq.,
and Stephanie C. Lieb, Esq., at Trenam, Kemker, Scharf, Barkin,
Frye, O'Neill & Millis, P.A., represented the Debtor as counsel.
In its schedules, the Debtor listed total assets of $8,449,885 and
total debts of $9,370,829.
On Jan. 28, 2009, in accordance with the Bankruptcy Court's order
confirming the Debtor's Chapter 11 plan, the Bankruptcy Court
approved the appointment of David H. Crumpton as Distribution
Trustee for the Debtor's Distribution Trust.
ODYSSEY PICTURES: Delays Form 10-K for Fiscal 2012
--------------------------------------------------
Odyssey Pictures Corporation said it has not been able to compile
all of the requisite formatted financial data and narrative
information necessary for it to have sufficient time to complete
its annual report on Form 10-K for the year ended June 30, 2012,
without unreasonable effort or expense. The Form 10-K will be
filed as soon as reasonably practicable and in no event later than
Oct. 15, 2012.
About Odyssey
Plano, Tex.-based Odyssey Pictures Corp., during the nine months
ended March 31, 2012, realized revenues from the sale of branding
and image design products and media placement services. The
Company's ongoing operations have consisted of the sale of these
branding and image design products, increasing media inventory,
productions in progress and development of IPTV Technology and
related services.
The Company's balance sheet at March 31, 2012, showed
$1.01 million in total assets, $3.62 million in total liabilities,
and a stockholders' deficit of $2.61 million.
Michael F. Cronin, in Orlando, Fla., expressed substantial doubt
about Odyssey Pictures' ability to continue as a going concern,
following the Company's results for the fiscal year ended June 30,
2011. The independent auditor noted that the Company has a $1.9
million working capital deficiency. "The Company may not have
adequate readily available resources to fund operations through
June 30, 2012. This raises substantial doubt about the Company's
ability to continue as a going concern."
OMNICOMM SYSTEMS: To Issue 7.5MM Shares Under Incentive Plan
------------------------------------------------------------
OmniComm Systems, Inc., filed with the U.S. Securities and
Exchange Commission a Form S-8 registration statement registering
a total of 7.5 million common shares issuable under the Company's
2009 Equity Incentive Plan. The proposed maximmum aggregate
offering price is $1.25 million.
The Company established the 2009 Equity Incentive Plan by
unanimous written consent of the Company's board of directors
effective March 13, 2009. The Company's shareholders approved the
2009 Plan on July 10, 2009. No awards may be made under the 2009
Plan after March 13, 2019.
A copy of the Form S-8 prospectus is available for free at:
http://is.gd/f7ahqk
About OmniComm Systems
Ft. Lauderdale, Fla.-based OmniComm Systems, Inc., is a healthcare
technology company that provides Web-based electronic data capture
("EDC") solutions and related value-added services to
pharmaceutical and biotech companies, clinical research
organizations, and other clinical trial sponsors principally
located in the United States and Europe.
OmniComm reported a net loss of $3.52 million in 2011, compared
with a net loss of $3.13 million in 2010.
The Company's balance sheet at June 30, 2012, showed $3.76 million
in total assets, $26.76 million in total liabilities and a $22.99
million total shareholders' deficit.
"The ability of the Company to continue in existence is dependent
on its having sufficient financial resources to bring products and
services to market for marketplace acceptance. As a result of our
historical operating losses, negative cash flows and accumulated
deficits for the period ending June 30, 2012 there is substantial
doubt about the Company's ability to continue as a going concern,"
the Company said in the Form 10-Q for the period ended June 30,
2012.
PATRIOT COAL: Rigrodsky & Long Files Fraud Class Action Lawsuit
---------------------------------------------------------------
Rigrodsky & Long, P.A. discloses that a complaint has been filed
in the United States District Court for the Eastern District of
Missouri on behalf of all persons or entities that purchased the
securities of Patriot Coal Corporation between Oct. 21, 2010 and
July 6, 2012, inclusive, alleging violations of the Securities
Exchange Act of 1934 against certain of the Company's officers.
If you purchased shares of Patriot Coal during the Class Period,
and wish to discuss this action or have any questions concerning
this notice or your rights or interests, please contact Timothy J.
MacFall, Esquire or Peter Allocco of Rigrodsky & Long, P.A., 825
East Gate Boulevard, Suite 300, Garden City, NY at (888) 969-4242,
by e-mail to info@rigrodskylong.com , or at:
http://www.rigrodskylong.com/investigations/patriot-coal-
corporation-pcxcq
Patriot Coal, a Delaware corporation headquartered in St. Louis,
Missouri, is a leading producer of thermal coal in the eastern
United States, with operations and coal reserves in the Appalachia
and the Illinois Basin coal regions. The Complaint alleges that
throughout the Class Period, defendants made materially false and
misleading statements regarding the Company's business operations,
financial condition and prospects. Specifically, the Complaint
alleges that the defendants violated Generally Accepted Accounting
Principles ("GAAP") and U.S. Securities and Exchange Commission
("SEC") rules because they failed to properly account for the
costs associated with the court-ordered remediation obligations
related to certain of the Company's selenium water treatment
requirements. In particular, defendants capitalized these costs
instead of recording them as expenses, thereby overstating the
Company's financial results. As a result of defendants' false and
misleading statements, the Company's stock traded at artificially
inflated prices during the Class Period.
According to the Complaint, the remediation costs arose after
Judge Robert Chambers, of the U.S. District Court for the Southern
District of West Virginia, ordered in August 2010 that Patriot
Coal spend tens of millions of dollars to clean up selenium
pollution at two of its surface coal mines in West Virginia.
Sometime in February 2012, the SEC began questioning the Company's
accounting for certain of its court-ordered selenium water
treatment obligations. In response to the comments received from
the SEC, the defendants were forced to reveal that the Company's
previously issued consolidated financial statements for the years
ended Dec. 31, 2011 and Dec. 31, 2010 should no longer be relied
upon. Further, the defendants admitted that it was necessary to
restate the Company's previously issued consolidated financial
statements to accrue a liability and recognize a loss for the
estimated costs of installing the court-ordered water treatment
facilities. This restatement increased Patriot Coal's asset
retirement obligation expense and net loss by $23.6 million and
$49.7 million for the years ended Dec. 31, 2011 and 2010,
respectively.
In addition to announcing the restatement on May 8, 2012, the
Company also disclosed that management identified a control
deficiency in its internal control over financial reporting
associated with the accounting treatment for two of the water
treatment facilities affected by the court's August 2010 order.
On this news, shares in Patriot Coal declined from a close of
$5.53 on May 8, 2012 to $5.31 on May 9, 2012, on volume of over 12
million shares. One week later, the Company recanted its 2013
forecast which caused shares in Patriot Coal to decline again from
a close of $4.83 on May 14, 2012 to $3.94 on May 15, 2012, on
volume of over 19 million shares.
On May 22, 2012, the Company publicized a letter sent by its Chief
Executive Officer, defendant Richard M. Whiting, to the Company's
employees. The letter expressed optimism stating that the Company
was poised for "future growth." However, the release of this
letter caused shares in Patriot Coal to decline from a close of
$3.36 per share on May 21, 2012 to $2.18 per share on May 22,
2012, on volume of over 86 million shares.
Finally on July 9, 2012, the Company announced that it and
substantially all of its wholly owned subsidiaries have filed
voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy Code. On this news, shares in Patriot Coal declined
over 72% from a close of $2.19 on July 6, 2012 per share to $0.61
per share on July 9, 2012, on volume of over 38 million shares.
If you wish to serve as lead plaintiff, you must move the Court no
later than Nov. 21, 2012. A lead plaintiff is a representative
party acting on behalf of other class members in directing the
litigation. In order to be appointed lead plaintiff, the Court
must determine that the class member's claim is typical of the
claims of other class members, and that the class member will
adequately represent the class. Your ability to share in any
recovery is not, however, affected by the decision whether or not
to serve as a lead plaintiff. Any member of the proposed class
may move the court to serve as lead plaintiff through counsel of
their choice, or may choose to do nothing and remain an absent
class member.
While Rigrodsky & Long, P.A. did not file the Complaint in this
matter, the firm, with offices in Wilmington, Delaware and Garden
City, New York, regularly litigates securities class, derivative
and direct actions, shareholder rights litigation and corporate
governance litigation, including claims for breach of fiduciary
duty and proxy violations in the Delaware Court of Chancery and in
state and federal courts throughout the United States.
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: Howard G. Smith Starts Investigation
--------------------------------------------------
Law Offices of Howard G. Smith discloses that it is investigating
potential claims against Patriot Coal Corporation concerning
possible violations of federal securities laws. The investigation
focuses on allegations that certain statements issued by the
Company between Oct. 21, 2010 and July 6, 2012 were false and
misleading concerning the Company's financial performance and
prospects.
Patriot Coal Corporation engages in the mining, production and
sale of thermal coal, primarily to electricity generators in the
eastern United States. The investigation concerns allegations
that certain of the Company's officers violated Generally Accepted
Accounting Principles and U.S. Securities and Exchange Commission
rules by failing to properly account for costs associated with
Court-ordered remediation obligations related to the Company's
selenium water treatment requirements, thereby overstating the
Company's financial results.
On July 9, 2012 Patriot Coal disclosed that the Company and
substantially all of its wholly owned subsidiaries have filed
voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy Code. Following this news, the price of Patriot Coal
shares dropped 72% -- from a closing pricing of $2.19 per share on
July 6, 2012, to a closing price of $0.61 per share on July 9,
2012.
If you purchased shares of Patriot Coal stock between October 21,
2010 and July 6, 2012, if you have information or would like to
learn more about these claims, or if you wish to discuss these
matters or have any questions concerning this announcement or your
rights or interests with respect to these matters, please contact
Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070
Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone
at (215) 638-4847, Toll Free at (888) 638-4847, or by email to
howardsmith@howardsmithlaw.com , or visit our Web site at
http://www.howardsmithlaw.com
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: Ryan & Maniskas Announces Class Action Lawsuit
------------------------------------------------------------
Ryan & Maniskas, LLP disclosed that a class action lawsuit has
been filed in the United States District Court for the Eastern
District of Missouri, on behalf of purchasers of Patriot Coal
Corporation shares between Oct. 21, 2010 and July 6, 2012.
The complaint alleges that during the Class Period, certain of
Patriot Coal's officers issued materially false and misleading
statements regarding the Company's business prospects.
Specifically, the complaint alleges that defendants violated
Generally Accepted Accounting Principles and U.S. Securities and
Exchange Commission rules by failing to properly account for costs
associated with Court-ordered remediation obligations related to
the Company's selenium water treatment requirements. In
particular, defendants improperly capitalized these costs instead
of recording them as expenses, thereby overstating the Company's
financial results.
In response to comments received from the SEC regarding the
Company's accounting for the court-ordered remediation costs,
defendants were forced to reveal that the Company's previously
issued consolidated financial statements for the years ended Dec.
31, 2011 and Dec. 31, 2010 should no longer be relied upon.
Moreover, defendants admitted that it was necessary to restate the
Company's previously issued consolidated financial statements to
accrue a liability and recognize a loss for the estimated costs of
installing the Court-ordered water treatment facilities.
On July 9, 2012, Patriot Coal disclosed that the Company and
substantially all of its wholly owned subsidiaries have filed
voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy Code. Following this news, the price of Patriot Coal
shares dropped 72% -- from a closing pricing of $2.19 per share on
July 6, 2012, to a closing price of $0.61 per share on July 9,
2012.
If you are a member of the class, you may, no later than Nov. 21,
2012, request that the Court appoint you as lead plaintiff of the
class. A lead plaintiff is a representative party that acts on
behalf of other class members in directing the litigation. In
order to be appointed lead plaintiff, the Court must determine
that the class member's claim is typical of the claims of other
class members, and that the class member will adequately represent
the class. Under certain circumstances, one or more class members
may together serve as "lead plaintiff." Your ability to share in
any recovery is not, however, affected by the decision whether or
not to serve as a lead plaintiff. You may retain Ryan & Maniskas,
LLP or other counsel of your choice, to serve as your counsel in
this action.
For more information about the case or to participate online,
please visit: www.rmclasslaw.com/cases/pcxcq or contact Richard A.
Maniskas, Esquire toll-free at (877) 316-3218, or by e-mail at
rmaniskas@rmclasslaw.com. For more information about class action
cases in general or to learn more about Ryan & Maniskas, LLP,
please visit our website: www.rmclasslaw.com .
Ryan & Maniskas, LLP is a national shareholder litigation firm.
Ryan & Maniskas, LLP is devoted to protecting the interests of
individual and institutional investors in shareholder actions in
state and federal courts nationwide.
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: Hearing on Equity Committee Motion Reset to Dec. 11
-----------------------------------------------------------------
As reported in the TCR on Aug. 29, 2012, interested shareholders
in the Chapter 11 cases of Patriot Coal Corporation, et al., asked
the U.S. Bankruptcy Court for the Southern District of New York,
to order the appointment of an official committee of equity
security holders in the cases, arguing that Patriot has
significant off balance sheet assets that could result in a
"meaningful recovery to equity."
The interested shareholders, CompassPoint Partners, L.P., Frank
Williams, and Eric Wagoner, comprise an informal group of holders
of common stock of the Debtor. They say Patriot has $1.4 billion
in tax-loss carry forwards that have value not on the balance
sheet. Patriot had about $500 million in shareholders' equity on
the balance sheet before bankruptcy, they said.
A hearing on the motion which had been previously scheduled for
Oct. 11, 2012, at 10:00 a.m. has been rescheduled to Dec. 11,
2012, at 10:00 a.m. Objections, if any, to the motion must be no
later than Nov. 30, 2012, at 4:30 p.m.
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: Committee Taps Mesirow as Accounting Advisors
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Patriot Coal
Corporation, et al., asks the U.S. Bankruptcy Court for the
Southern District of New York for authority to retain Mesirow
Financial Consulting, LLC, as the Committee's accounting advisors,
nunc pro tunc to July 24, 2012. A hearing on the motion is
scheduled for Oct. 11, 2012, at 10:00 a.m. Objections, if any,
must be filed no later than Oct. 4, 2012, at 4:00 p.m.
MFC will provide these services:
a. Assist the Committee in analyzing potential causes of action,
including potential preferences and fraudulent conveyances,
specifically, including the investigation of transactions
with Peabody, Arch, and ArcLite;
b. Analyze any proposed annual incentive bonus program/KEIP;
c. Financial support and analysis of OPEB2/Pension/Labor
obligations, including funding status and financial analysis;
d. Provide tax analyses;
e. Provide litigation support services, which may include but
are not limited to assisting with discovery, advising on
damages and providing expert testimony, in connection with
the causes of sction or other litigation support requested by
the Committee;
f. Analyze intercompany claims and transactions, including as
set forth on the Debtors' Schedules/Statements of Financial
Affairs; and
g. Other such discrete and specific functions as may be
requested by the Committee or its counsel to assist the
Committee in the Chapter 11 cases (provided that such
services are not duplicative of those being provided by
Houlihan Lokey Capital, Inc., the Committee's proposed
financial advisor).
MFC bills at these hourly rates:
Director, Managing Director, and
Senior Managing Director $855 to $895
Senior Vice-President $695 to $755
Vice President $595 to $655
Senior Associate $495 to $555
Associate $315 to $425
Paraprofessional $160 to $250
To the best of the Committee's knowledge, MFC is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
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.
Attorneys at Kramer Levin Naftalis & Frankel LLP, in New York,
represent the Committee as counsel.
PATRIOT COAL: Committee Hiring Houlihan Lokey as Financial Advisor
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Patriot Coal
Corporation, et al., asks the U.S. Bankruptcy Court for the
Southern District of New York for authority to retain Houlihan
Lokey Capital, Inc., as the Committee's financial advisor, nunc
pro tunc to July 24, 2012. A hearing on the motion is scheduled
for Oct. 11, 2012, at 10:00 a.m. Objections, if any, must be
filed no later than Oct. 4, 2012, at 4:00 p.m.
Houlihan will provide these advisory services:
a) Analyzing and negotiating debtor in possession financing and
first and second day motions;
b) Analyzing financial reporting, business and operating plans
and forecasts of the Debtors and any improvements thereto;
c) Evaluating the assets and liabilities of the Debtors
including assisting in collateral analysis and Committee lien
investigations; and
d) Assessing the financial issues and options concerning (i) the
sale of the Debtors, either in whole or in part, and (ii) the
Debtors' Chapter 11 plan) of reorganization or liquidation or
any other Chapter 11 plan.
Houlihan Lokey will be paid in advance a nonrefundable monthly
cash fee of $150,000, and a cash fee equal to $2,500,000. This
Deferred Fee will be payable on the effective date of any
Chapter 11 plan of reorganization or liquidation.
To the best of the Committee's knowledge, Houlihan Lokey is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
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.
Attorneys at Kramer Levin Naftalis & Frankel LLP, in New York,
represent the Committee as counsel.
PATRIOT COAL: Committee Taps Epiq Bankruptcy as Information Agent
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors o0f Patriot Coal
Corporation, et al., asks the U.S. Bankruptcy Court for the
Southern District of New York for authority to retain Epiq
Bankruptcy Solutions, LLC, as the information agent for the
Committee, nunc pro tunc to July 18, 2012.
Epiq will undertake, among others, these actions and procedures:
(a) Establish and maintain a Web site at
http://www.patriotcoalcommittee.com/that provides, without
limitation:
(i) General information regarding the Chapter 11 cases;
(ii) Contact information for the Committee (and any
information hotlines that they establish), the
Debtors' counsel and the Committee's counsel;
(iii) The date by which unsecured creditors must file their
proofs of claim;
(iv) The voting deadline with respect to any Chapter 11
plan of reorganization filed in the Chapter 11 cases;
(v) Access to the claims docket, as established by the
Debtors or any claims agent retained in the
Chapter 11 cases;
(vi) The Debtors' monthly operating reports;
(vii) A list of upcoming omnibus hearing dates and the
calendar of matters on such hearing dates;
(viii) Answers to frequently asked questions;
(ix) Links to other relevant websites (e.g., the Debtors'
corporate website, the website of the Debtors'
notice, claims and soliciting agent, Garden City
Group, Inc., the Bankruptcy Court website and the
website of the United States Trustee); and
(x) Email functionality whereby viewers may submit an
inquiry to the Committee.
(b) Provide a call center or other creditor hotline, respond to
creditor inquiries via telephone, letter, email, facsimile
or otherwise, as appropriate, and related services (which
will be published on the Committee Website);
(c) Assist the Committee with certain administrative tasks,
including, but not limited to, printing and serving
documents as directed by the Committee and its counsel; and
(d) Provide a confidential data room, if necessary.
Jason D. Horwitz, Vice President and Senior Consultant of Epiq,
tells the Court that Epiq is a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code, and that Epiq
neither holds nor represents any interest materially adverse to
the interests of the Committee or the Debtors' estates with
respect to any matter upon which Epiq is to be engaged.
Epiq will be compensated in accordance with the provisions of the
standard services agreement by and between the Committee and Epiq.
Epiq will (a) file a final fee application, and (b) submit monthly
fee statements in the event that Epiq's fees exceed $2,000
during any given month.
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.
Attorneys at Kramer Levin Naftalis & Frankel LLP, in New York,
represent the Committee as counsel.
PATRIOT COAL: Wants Removal Period Extended to Oct. 9
-----------------------------------------------------
Patriot Coal Corporation, et al., ask the U.S. Bankruptcy Court
for the Southern District of New York to enter a Bridge Order,
without a hearing, extending the period during which the Debtors
may remove pending civil actions that are subject to removal under
Section 1452 or Bankruptcy Rule 9027 from the current deadline of
Oct. 9, 2012, through and including the Court's adjudication of
the motion, currently scheduled for Oct. 11, 2012, at 10:00 a.m.
The Debtors also request, pursuant to Bankruptcy Rule 9006(b),
that the time period during which they may file notices of removal
with respect to any civil actions pending as of the Petition Date
and covered by 28 U.S.C. Section 1452 be extended from the current
removal deadline through and including the effective date of any
plan of reorganization in the Debtors' Chapter 11 cases.
Given the number of judicial and administrative proceedings
covered by 28 U.S.C. Section 1452 and the variety of claims, as
well as the enormous amount of time and effort the Debtors have
had to devote since the Petition Date to resolving other
significant aspects of the Chapter 11 cases, Debtors relate tht
they have not been able to analyze and make a determination
regarding the removal of each of the pre-petition actions.
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.
Attorneys at Kramer Levin Naftalis & Frankel LLP, in New York,
represent the Committee as counsel.
PATRIOT COAL: Asks Limited Stay Re: W.V. Court Envtl. Proceedings
-----------------------------------------------------------------
Patriot Coal Corporation, Apogee Coal Company, LLC, Catenary Coal
Company, LLC, and Hobet Mining, LLC, ask the U.S. Bankruptcy Court
for the Southern District of New York to authorize limited relief
from the automatic stay solely to the extent necessary to allow
Litigants (certain non-governmental environmental organizations
and Debtor Movants) to comply with a briefing schedule set forth
by the U.S. District Court for the Southern District of West
Virginia in Ohio Valley Envtl. Coal., Inc. v. Hobet Mining, LLC,
No. 3:09-1167 and Ohio Valley Envtl. Coal., Inc. v. Patriot Coal
Corp., et al., No. 3:11-0115 in order for the Debtor Movants to
request a modification of compliance deadlines under the
Prepetition Orders entered in connection with the environmental
proceedings on the basis that there have been significant changes
in the Debtor Movants' circumstances (including the commencement
of the Chapter 11 cases) that warrant such modifications, and to
allow the West Virginia District Court to determine whether to
modify, and to order the modification of, the deadlines in the
Prepetition Orders.
The Prepetition Orders refer to a March 15, 2012 Consent Decree
with the Plaintiffs and the Hobet 22 Order. The Hobet 22 Order
refers to a Sept. 1, 2010 Order and an Oct. 8, 2010 Order
requiring Hobet Mining, LLC, inter alia, to construct a
system at Hobet's Mine 22 to treat selenium discharged from Outlet
001 on Hobet's NPDES Permit WV1022911 and to bring the selenium
effluence from one of its mining outfalls into compliance with
applicable permit limitations by May 1, 2013.
According to papers filed with the Bankruptcy Court, the extension
of these deadlines would aid the Debtor Movants' restructuring
efforts, and the limited relief sought will not prejudice any of
the parties' otherwise applicable rights.
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.
Attorneys at Kramer Levin Naftalis & Frankel LLP, in New York,
represent the Committee as counsel.
PATRIOT COAL: Wants Dec. 14 Deadline for Filing of Proof of Claim
-----------------------------------------------------------------
Patriot Coal Corporation, et al., ask the U.S. Bankruptcy Court
for the Southern District of New York to establish Dec. 14, 2012,
at 5:00 p.m. as the General Bar Date for the filing of a proof of
claim in the Debtors' cases, and Jan. 7, 2013, at 5:00 p.m. as the
Governmental Bar Date.
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.
Attorneys at Kramer Levin Naftalis & Frankel LLP, in New York,
represent the Committee as counsel.
PROGRESSIVE WASTE: S&P Affirms 'BB+' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Progressive Waste Solutions Ltd. (PWS) to stable from positive. At
the same time, Standard & Poor's affirmed its 'BB+' long-term
corporate credit rating on the company.
"We base our outlook change on view of PWS' lack of commitment to
an investment-grade financial policy and acquisitive nature, both
of which could lead leverage to rise above 3x following any
acquisitions," said Standard & Poor's credit analyst Jatinder
Mall. "However, we believe the company will continue to generate
stable cash flows and its leverage ratio will remain below 3x in
the next couple of years," Mr. Mall added.
Standard & Poor's also affirmed its 'BB-' issue-level rating, with
a '6' recovery rating, on PWS subsidiary IESI Corp.'s senior
unsecured debt, and its 'BBB-' issue-level rating, with a '2'
recovery rating, on IESI's senior secured debt.
The ratings on PWS reflect what Standard & Poor's views as the
company's satisfactory business risk profile and significant
financial risk profile. The ratings also reflect the company's
participation in solid waste management, which is considered to be
essential and recession-resilient nature, its leading market
position in regions in which it operates, its good operating
performance, and good credit metrics.
PWS is North America's third-largest company in the solid waste
industry, providing nonhazardous solid waste collection and
disposal services to commercial, industrial, municipal, and
residential customers in 12 U.S. states and the District of
Columbia, as well as six Canadian provinces. It offers integrated
services to residential, municipal, commercial, and industrial
customers.
"The stable outlook reflects our expectations that the company
will continue to generate stable cash flows and that its leverage
ratio will remain below 3x in the next couple of years. However,
an upgrade is limited given the company's lack of commitment to an
investment-grade financial policy and acquisitive nature, and
leverage could be well above 3x following an acquisition," S&P
said.
"Alternatively, we could raise the rating if management
demonstrates its commitment to an investment-grade financial
policy and the company can sustain debt to EBITDA of less than
2.7x and funds from operations (FFO) to debt above 25%," S&P said.
"We could lower the rating if financial measures materially
deteriorate from our current expectations with adjusted debt to
EBITDA moving above 3.5x or FFO to debt below 20% on a sustained
basis," S&P said.
PROMETRIC INC: Moody's Withdraws 'Ba2' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service has withdrawn all of the ratings on
Prometric Inc., including the Ba2 corporate family rating.
The following ratings have been withdrawn:
Corporate family rating at Ba2
Probability of default rating at Ba3
Senior secured revolving credit facility due 2017 at Ba1 (LGD2,
23%)
Senior secured term loan due 2017 at Ba1 (LGD2, 23%)
Ratings Rationale
Moody's has withdrawn the ratings because it believes it has
insufficient or otherwise inadequate information to support the
maintenance of the ratings.
Headquartered in Baltimore, Maryland, Prometric Inc. is a provider
of technology-based assessment solutions including test
development and delivery for government entities, professional
organizations, academic institutions, corporations and information
technology clients.
REALOGY CORP: S&P Puts 'CCC' CCR on Watch Positive on IPO Plan
--------------------------------------------------------------
Standard & Poor's Ratings Services placed ratings on Realogy
Corp., including the 'CCC' corporate credit rating, on CreditWatch
with positive implications. The action follows the company's
amended S-1 filing , which commences the active marketing period
for a proposed $1 billion IPO of Realogy's common stock.
Concurrent with and in addition to the IPO, Realogy expects about
$1.9 billion in convertible debt to convert common stock. Realogy
expects to use the proceeds from the IPO to repay $650 million in
13.5% second-lien notes due 2017, $64 million in 10.5% senior
unsecured notes due 2014, $41 million in 11% senior pay-in-kind
(PIK) notes due 2014, to redeem $207 million in principal amount
of 11% convertible notes due 2018, and to pay fees and expenses
and other anticipated costs.
"In the event Realogy completes its proposed IPO, we expect to
take these rating actions," S&P said:
"We will raise the corporate credit rating three notches to
'B' from 'CCC'," S&P said.
"We will raise the issue-level rating on the first-lien senior
secured debt two notches to 'B+' from 'B-' and revise the
recovery rating on this debt to '2' from '1'," S&P said.
"We will raise the issue-level rating on the first-and-a-half
lien senior secured debt two notches to 'CCC+' from 'CCC-' and
revise the recovery rating on this debt to '6' from '5'," S&P
said.
"We will raise the issue-level rating on the senior unsecured
and subordinated debt three notches to 'CCC+' from 'CC'. The
recovery rating on this debt will remain '6'," S&P said.
"The downward recovery rating revisions on the first-lien and 1.5-
lien debt would reflect weaker recovery prospects for these
lenders under our simulated default scenario. With the lower debt
service levels pro forma for the IPO and debt conversion,
Realogy's EBITDA would have to decline farther to trigger a
payment default compared with the company's existing capital
structure. This would reduce Realogy's enterprise value and first-
lien and 1.5 lien recovery prospects in a default scenario," S&P
said.
"The CreditWatch positive listing on the company's existing 'CCC'
corporate credit rating reflects the prospects that Realogy may
complete the IPO and debt conversion over the near term," said
Standard & Poor's credit analyst Emile Courtney.
These actions would result in a significant reduction of
approximately $2.8 billion in debt (compared with $7.6 billion in
reported funded and securitization debt as of June 2012) and the
decrease of approximately $330 million in interest expense
(compared with $672 million in the 12 months ended June 2012).
"In the event of the completion of the IPO and debt conversion,
the three-notch upgrade to a 'B' corporate credit rating on
Realogy Corp. would reflect significant deleveraging and debt
service relief for the company, although our assessment of the
company's financial risk profile would remain 'highly leveraged,'
according to our criteria. Pro forma for the completion of the
IPO, our measure of total lease and securitization adjusted debt
to EBITDA (leverage) would decline to about 9.5x from 16x as of
June 2012. Incorporating our current expectation of EBITDA growth
in the second half of 2012 and in 2013, this pro forma leverage
measure would improve to about 8x by December 2012 and to the low-
7x area in 2013. Pro forma EBITDA coverage of interest expense
would increase to around 1.5x from 0.7x as of June 2012.
Incorporating our current estimate of EBITDA growth in the second
half of 2012 and in 2013, this pro forma coverage measure would
improve to the high-1x area in 2012 and in 2013. In addition, in
the event of the completion of the IPO and debt conversion, we
believe Realogy's liquidity profile would be 'adequate,' according
to our criteria, based on improved interest coverage, materially
improved levels of free cash flow, adequate cash balances, and
sufficient EBITDA cushion compared with credit facility covenant
levels to withstand a 15% decline in forecasted EBITDA," S&P said.
"We will monitor Realogy's progress toward completing the proposed
IPO in order to resolve the CreditWatch listing," S&P said.
"In the event Realogy does not complete the IPO and debt
conversion, we believe Realogy would need to access external
capital or rely on sponsor Apollo for an equity injection over the
near term to cover a financing shortfall due to high levels of
interest expense in the current capital structure. This may put
downward pressure on the current rating," S&P said.
RESIDENTIAL CAPITAL: Begins Plan Negotiations With Creditors
------------------------------------------------------------
As directed by the Bankruptcy Court at a Sept. 11, 2012 hearing,
Residential Capital, LLC, and its debtor affiliates have begun the
process of engaging their various creditor constituencies
regarding the issues that need to be resolved to achieve a plan of
reorganization. Following the September 11th hearing, the
Debtors' counsel and counsel for the Official Committee of
Unsecured Creditors arranged a meeting among the Debtors'
professionals and the Committee's professionals to discuss the key
issues and the process going forward.
At the meeting, the Debtors and the Committee identified these
broad categories of issues that need to be resolved either prior
to or as part of a Plan:
(1) Intercreditor Issues -- Including the extent and validity
of the liens securing the Debtors' secured debt facilities
and the treatment of intercompany claims under the Plan.
(2) The Proposed Settlement with Ally Financial Inc. --
Including the proposed third party releases that may be
incorporated into the Plan and the allocation of the
proceeds of any settlement among the Debtor entities and
their creditors.
(3) Sales Process -- Including the timing and final purchase
price for the Debtors' assets, the allocation of the
proceeds among the Debtors' assets, and GSE approval.
(4) Treatment of Various Claims Under the Plan.
(5) Post-Confirmation Issues -- Including the structure and
cost of the wind-down and the timing of the sale of the
Debtors' remaining assets.
Gary S. Lee, Esq., at Morrison & Foerster LLP, in New York,
relates that in order to resolve the issues that must be dealt
with under the Plan, the Debtors and the Committee discussed a
process whereby representatives from both the Debtors and the
Committee will meet with the other key constituents in the case,
including representatives for an ad hoc group of holders of
certain 9.625% Junior Secured Guaranteed notes due 2015 ("JSBs")
and Ally. Following those meetings, the Debtors anticipate
arranging meetings with the specific unsecured creditor
constituents, including the RMBS Investors/Trustees, monolines,
senior unsecured notes, securities claimants and borrowers. The
Debtors disclosed that they have reached out to the professionals
for the Committee and Ally to arrange initial meetings with each
party, and will be reaching out to other parties in the near
future as well.
Debtors' Book Value Assets as of May 31
James Whitlinger, ResCap's chief financial officer, filed a
declaration containing the Debtors' consolidated collateral
report reflecting the book value of the Debtors' collateral by
funding facility as of May 31, 2012. Mr. Whitlinger related that
the Debtors filed the May 31 collateral report in response to
certain third party reports that used the Debtors' February 29,
2012 consolidated trial balance sheet and forecast information
provided by the Debtors to roll forward the collateral balances
of each facility to certain specified dates. Those forecasts
ultimately proved to be inaccurate, Mr. Whitlinger told the
Court. As a result, the Debtors filed the collateral report to
address any inaccurate information in the market, Mr. Whitlinger
said. According to the disclosed collateral report, the Debtors'
assets had a book value of $7.356 billion as of May 31, 2012.
A full-text copy of the Whitlinger Declaration is available at
http://bankrupt.com/misc/rescap_cfodecl.pdf
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.
Following a hearing in June, the bankruptcy judge scheduled
auctions in late October. A hearing to approve the sales is set
for November. 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: Objections Filed to Fortress-Led Auction
-------------------------------------------------------------
TCF National Bank, a creditor of debtor GMAC Mortgage, LLC, HSBC
Bank USA, National Association, as trustee for certain mortgage-
backed securities trust, and CIBM Bank, f/k/a Marine Bank, a
creditor of Debtor Residential Funding Company, LLC, join in the
objection raised by a group of RMBS trustees to the proposed sale
of the Debtors' assets.
The RMBS Trustees previously objected to (i) the scope of the
obligations to be assumed by the assignee of the servicing
agreements; (ii) the ability of the assignee to perform under the
assumed servicing agreements; and (iii) the enforceability of any
provisions that the Debtors believe are unenforceable against the
Debtors or any prospective purchaser.
TCF and CIBM, for their part, complain that the sale motion
exposes them to risk related to breaches of the prepetition
servicing agreements they entered into with the Debtors by the
winning bidder if the breaches are determined to have arisen prior
to assumption under the sale. In this case, TCF and CIBM will not
be able to enforce any liabilities owed to them by the winning
bidder under the assumed prepetition agreement. TCF also objects
to the $0 proposed cure amount related to the assumption of the
prepetition agreement. TCF subsequently withdrew its objection to
the proposed asset sale.
Paul Papas II, a creditor, objects to the sale or transfer of any
assets owned by the Debtors, including those assets that are
identified to have de minimis value.
USAA Federal Savings Bank objects to the sale to the extent the
sale could potentially alter or affect its contractual rights,
claims and interests in connection with the Debtors' servicing
platform.
Asset Sale Schedule
The Court modified schedule governing the auction and sale of the
Debtors' assets to push back the sale hearing date to Nov. 19:
Oct. 19, 2012 - Deadline for any party to submit a bid
Oct. 23, 2012 - Auction for "Purchased Assets" under the Asset
Purchase Agreement with Nationstar Mortgage
LLC
Oct. 24, 2012 - Auction for "Purchased Assets" under the Asset
Purchase Agreement with Berkshire Hathaway
Inc.
Oct. 29, 2012 - Deadline for parties to file Objections to
Sale Motion
Nov. 19, 2012 - Sale Hearing
The sale hearing may be conducted in connection with, and as part
of, a hearing to consider confirmation of a plan of
reorganization.
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.
Following a hearing in June, the bankruptcy judge scheduled
auctions in late October. A hearing to approve the sales is set
for November. 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: RMBS Deal Not on Schedule; Objections Filed
----------------------------------------------------------------
In a status report dated Sept. 18, 2012, Residential Capital LLC
and its affiliates informed the Court that the outstanding
discovery issues with respect to their request for the approval of
the settlements with residential mortgage-backed securities trust
are:
(1) Alter Ego, Substantive Consolidation, and "HoldCo
Election" Documents. The Official Committee of Unsecured
Creditors and the ad hoc group of senior unsecured
noteholders of ResCap LLC (the "SUNs"), seek to conduct
comprehensive discovery regarding potential alter ego
claims against ResCap LLC, the holding company. They also
seek discovery regarding the so-called "HoldCo Election,"
even though the Debtors have informed all parties that
this provision has been removed from the RMBS Trust
Settlement Agreement. With the removal of the HoldCo
Election, the issue of alter ego has no relation to the
pending 9019 Motion.
(2) Depositions Concerning the Negotiation of the RMBS Trust
Settlement. The Creditors' Committee and the SUNs seek to
conduct extensive discovery into the process by which the
RBMS Settlement Agreement was negotiated. The Debtors
have, without waiving their objections, agreed to produce
communications between the Debtors and the other parties
involved in the negotiating process. But the Committee
and the SUNs say that is not enough. They insist that
those who negotiated the settlement -- a group comprised
almost exclusively of the Debtors' in-house and retained
attorneys -- must also submit to depositions. The Debtors
contend that those depositions are irrelevant to the
merits of the RMBS Trust Settlement, and are largely
prohibited in the Second Circuit.
The Debtors related that under the Second Amended RMBS Trust
Settlement Agreement, which they expect to finalize and execute
soon, ResCap LLC will not receive a release, and any party that
chooses to do so will be allowed to file a proof of claim against
ResCap LLC. Correspondingly, any party who disagrees with any
proof of claim (including the SUNs) may file an objection
thereto. The Debtors contended that the appropriate time for
discovery regarding the advancement of any alter ego theory will
be if and when those claims are filed. Alter ego discovery
should not be allowed to derail the 9019 Motion approval process
or the upcoming sale of ResCap's operating businesses, the
Debtors asserted.
A full-text copy of the Debtors' Sept. 18 Status Report is
available for free at:
http://bankrupt.com/misc/rescap_rmbspact0918statrep.pdf
The Creditors' Committee again objected to the Debtors' status
report reiterating that the Debtors and their counsel took far
more than the required 10 days to produce documents concerning
the proposed RMBS Trust settlement agreement. MBIA Insurance
Corporation, which is also a member of the Creditors' Committee,
also objected to the status report because of certain unresolved
discovery issues.
Wilmington Trust, National Association, an indenture trustee for
various SUNs, told the Court that the Debtors refused to permit
any discovery related to the HoldCo Election or any alter ego
theory, and refused to answer interrogatories seeking information
about amendments to the RMBS settlement. In a separate filing,
Wilmington withdrew, without prejudice, its motion to modify the
scheduling order established for the discovery and approval of
the RMBS settlement.
Financial Guaranty Insurance Company told the Court, in a status
report dated Sept. 18, that the significant delay caused by the
Debtors' failure to timely produce requested documentation, as
well as the unwieldy and cumbersome nature of the data room used
by the Debtors, make it impossible to properly evaluate the
proposed settlement in the time remaining. FGIC said the Debtors
did not provide a detailed index to their data room and its
design makes it impossible to search for specific documents
between specific parties or about specific topics. A full-text
copy of FGIC's Status Report is available at:
http://bankrupt.com/misc/rescap_fgicsr0918.pdf
Citibank, N.A., filed a statement in Court making clear its
position that under no circumstances should any further
extensions of time be granted. Citibank said any extension will
only delay the Debtors' pending all-important asset sales.
Ally Responds
Ally Financial Inc. and Ally Bank complained that both FGIC and
the Creditors' Committee misstate and mischaracterize their
discovery responses in connection with the proposed RMBS
settlement. Contrary to FGIC's and the Committee's assertion,
Ally has already produced responsive information, including e-
mails and Board minutes, presentations and other Board materials,
and has committed to produce additional responsive documents
before the close of fact discovery, Daniel T. Donovan, Esq., at
Kirkland & Ellis LLP, in New York, told the Court.
Revised Scheduling Order
Parties-in-interest agreed to further revise the scheduling
governing the discovery and approval of the RMBS settlement. The
revised scheduling order, dated Sept. 25, sets forth these
deadlines:
Sept. 28 -- Any party, except the Steering Committee,
seeking to introduce expert testimony at the
hearing will designate its expert witnesses
-- The Debtors will file any supplemental
expert reports
Oct. 3 -- The Debtors will substantially complete
their rolling production of documents
-- The Talcott Franklin Group and the Steering
Committee Group, to the extent its
objections to production are denied, will
substantially complete their rolling
production of documents
Oct. 5 -- Any party, except the Steering Committee,
seeking to introduce direct testimony at the
hearing will designate its fact witnesses
(other than adverse witnesses)
-- The Steering Committee will submit a
supporting brief of up to 25 pages, plus
supporting exhibits
Pursuant to the scheduling order, parties submitted their
designations of expert witnesses in connection with the proposed
RMBS settlement:
Party Expert Witness
----- --------------
The Bank of New York Duff & Phelps
Mellon Trust Company,
N.A., et al., as RMBS
trustees
Debtors Frank Sillman, Fortace LLC
FGIC The Berkeley Research Group and
Charles B. Rosenberg
MBIA The Blackstone Group, SDI Advisory
Services, LLC, Benjamin Keys, and
Kose John
Creditors' Committee Bradford Cornell of San Marino
Business Partners LLC, JF. Morrow,
and a representative of Moelis &
Company LLC
* * *
According to Natalie Rodriguez of BankruptcyLaw 360, Judge Glenn
warned that the Nov. 5 hearing on the proposed RMBS settlement is
in jeopardy after the Creditors' Committee reported that the
Debtors filed to meet the deadlines set forth in the scheduling
order. The report said Judge Glenn threatened to kick back the
hearing to early next year if the Debtors and its creditors
cannot resolve the discovery issues.
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.
Following a hearing in June, the bankruptcy judge scheduled
auctions in late October. A hearing to approve the sales is set
for November. 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: Committee Pursues Claims vs. US Bank, et al.
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Residential
Capital LLC's Chapter 11 cases seeks the Bankruptcy Court's
authority to prosecute and settle certain claims on behalf of the
Debtors' estates against U.S. Bank National Association, as the
indenture trustee for the junior secured noteholders, and Wells
Fargo Bank, N.A., as collateral agent for the junior secured
noteholders.
The Committee tells the Court that a successful prosecution of
the claims against US Bank and Wells Fargo may yield hundreds of
millions of dollars for unsecured creditors.
Stephen D. Zide, Esq., at Kramer Levin Naftalis & Frankel, LLP,
in New York, asserts that the Debtors cannot pursue this
litigation because, among other reasons, they already stipulated
to an expansive definition of the collateral securing the Junior
Secured Notes and agreed to waive the claims at issue. This, Mr.
Zide asserts, is a classic situation in which a creditors'
committee is the only independent fiduciary that can properly act
for the estates and thus should be granted standing under In re
STN Enters., 779 F.2d 901 (2d Cir. 1985), as the Debtors
themselves recognized by notifying the Committee that they
consent to standing.
A hearing on the Committee's request is set for Oct. 24.
Objections are due no later than Oct. 5.
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.
Following a hearing in June, the bankruptcy judge scheduled
auctions in late October. A hearing to approve the sales is set
for November. 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: Committee Opposes $250-Mil. of PwC Fees
------------------------------------------------------------
The Official Committee of Unsecured Creditors in Residential
Capital LLC and its affiliates complains that the Debtors' request
to pay $250 million in fees to PricewaterhouseCoopers, LLP, for
mortgage foreclosure review services raises serious questions
regarding the best interests of the estates, not the least of
which is why the Debtors -- or federal regulators, for that matter
-- should prefer to continue these vast expenditures rather than
to devise a more streamlined method to redirect more money to pay
borrowers.
The Committee also argues there is no reason for the Debtors'
estates to bear the costs when a solvent co-obligor is available
and contractually obligated to pay them. This argument is
supported by Wilmington Trust, National Association, as indenture
trustee for various series of senior secured notes in the
outstanding principal amount of $1 billion, who also argues that
Ally Financial Inc. continues to use its influence over
Residential Capital LLC because of the absence of any corporate
management protection of the interests of ResCap.
Debtors Respond
The Debtors notify the Court that Ally, under a prepetition
consent order, is secondarily liable for the obligations to
timely pay any portion of the fee that ResCap owes to PwC to
complete the foreclosure review, in the event ResCap, or any
successor-in-interest, does not timely pay the obligation.
Ally's Statement
Ally tells the Court that it strongly disagrees with the
Committee's assertion that the Motion raises "complex" issues.
Ally says only one question is pertinent, and it is whether the
Debtors meet their burden for the Court to authorize them to pay
PwC to conduct the foreclosure review. The answer, Ally adds, is
yes. The Debtors are solely liable for the Foreclosure Review
pursuant to the prepetition consent order, Ally points out.
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.
Following a hearing in June, the bankruptcy judge scheduled
auctions in late October. A hearing to approve the sales is set
for November. 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: Opposes Formation of Borrowers' Committee
--------------------------------------------------------------
Residential Capital LLC and its affiliates agree that borrowers
have legitimate concerns regarding the day-to-day servicing of
their loans, opportunities for loan modifications, and other forms
of borrowers relief. The Debtors, however, complain that the
group of homeowners who seek for the creation of an official
borrowers' committee failed to furnish any valid reason why the
Official Committee of Unsecured Creditors, which includes a
borrower member, cannot properly represent their interests as
potential or actual unsecured creditors.
The Debtors argue that appointment of a borrowers' committee
would exact significant costs for them; would be largely
duplicative of the Creditors' Committee; and would not make the
administration of their Chapter 11 cases more efficient.
The Creditors' Committee agrees with the Debtors' objection, and
adds that the relief requested would serve an improper purpose as
the borrowers apparently seek to gain official status in order to
advise individual borrowers holding contingent unsecured claims
with regard to their personal legal rights and defenses vis-a-vis
the Debtors in pending and threatened foreclosure actions.
Citibank, N.A., takes no position with respect to whether the
homeowners claimants require representation by a separate
committee, but objects to the motion solely to make clear its
position that the appointment of any such separate committee must
not result in any delay of the scheduled sale of substantially
all of the Debtors' operating assets that is so vital to creditor
recoveries in the Chapter 11 cases.
W. Nora Joins Panel Appointment Request
Wendy Allison Nora, a creditor, expressed support in the request
for the appointment of a separate official committee of borrowers
to prevent the continuing abuse of process in the Chapter 11
proceedings.
Homeowners Talk Back
The fundamental flaw in the objections is that they treat the
borrowers as if they were sophisticated creditors with
familiarity with the Chapter 11 process and the resources to
participate it effectively, the group of homeowners argued.
In fact, the borrowers are unsophisticated individuals who cannot
afford to pay their mortgages, let alone retain experienced
Chapter 11 counsel, and although many borrowers have important
monetary and non-monetary interests in the outcome of the Chapter
11 cases, they are not capable of arguing or negotiating
effectively on their own behalf, Robert E. Brown, Esq., at Robert
E. Brown, P.C., in New York, tells the Court.
The borrowers maintain that appointment of an official committee
is warranted arguing that (1) they have fundamentally different
interests from the other creditors, (2) the large financial
institutions and insurers dominate the Creditors' Committee and
prevent borrowers from having any say in the decision-making
process, and (3) Rowenna L. Drennan, a borrower claimant attorney
and a member of the Creditors' Committee, is outnumbered.
Additional homeowners -- Gordon Dade, George & Tracey Fischell,
Porchia Jones, Christopher & Heidi Kennedy, Ryan & Becki Maas,
Ken & Herthon Morgan, Liese Nichols, Debra & Steven Shaver, Susan
& Talin Stephen, Robert sweeting, Betty Taylor, Jacqueline Warner
and Destry White -- join in the request for appointment of a
borrowers' committee.
Amicus Curiae Supporting Panel Formation
"[The] Debtors participated fully and for profit in the man-made
economic collapse and dumped its fair share of the pollution in
the system. Many American families, businesses, investors,
insurers and taxpayers are suffering the effects of the conduct
of the financial sector," Paula Rush, a mortgage fraud and
forensic analyst, litigation and securitization expert who served
as chairperson for the official committee of borrowers in the
American Home Mortgage bankruptcy case, said in an amicus curiae
brief in support of the request for appointment of a borrowers'
committee.
"My interest in offering this amicus brief is simply to shed the
light of the truth based on the documentary evidence available in
the public record so that this venerable Court will not be fooled
by the notions that homeowners are represented in the current
state of the unsecured creditors committee," Ms. Rush added.
A full-text copy of the Rush Amicus Brief is available for free
at http://bankrupt.com/misc/rescap_rushamicusbriefsept18.pdf
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.
Following a hearing in June, the bankruptcy judge scheduled
auctions in late October. A hearing to approve the sales is set
for November. 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).
SILVERLEAF RESORTS: S&P Gives 'B-' Rating on $175MM Secured Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B-' issue-level
rating and '4' recovery rating on Dallas, Texas-based timeshare
operator Silverleaf Resorts Inc.'s proposed $175 million senior
secured notes due 2019. The rating withdrawal follows the
company's announcement that it has terminated the offering. Our
'B-' corporate credit rating and stable outlook on Silverleaf
remain unchanged.
The 'B-' corporate credit rating reflects S&P's assessment of the
company's financial risk profile as "highly leveraged" and its
business risk profile as "vulnerable," according to its criteria.
Silverleaf has a somewhat constrained long-term liquidity profile
because of its reliance on securitization markets to periodically
free up availability under short-term receivables-based facilities
to finance its sales activities. "We believe, however, that
Silverleaf has sufficient liquidity to fund current sales levels
through at least late 2013, and we believe that much of the
timeshare inventory development spending currently planned for
2012 and 2013 are discretionary. We expect management to pull back
on spending if operating performance is significantly below
expectations. We expect Silverleaf to continue to maintain a
liquidity position in line with our 'B-' rating," S&P said.
RATINGS LIST
Silverleaf Resorts Inc.
Corporate Credit Rating B-/Stable/--
Ratings Withdrawn
To From
Silverleaf Resorts Inc.
$175M sr secd notes due 2019 NR B-
Recovery Rating NR 4
SOUTHEASTERN REGIONAL: S&P Cuts Rating on Series 2002 Bonds to 'D'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'D' from
'A' on series 2002 bonds issued by the North Carolina Medical Care
Commission for Southeastern Regional Medical Center (SRMC). The
action reflects the hospital's non-payment of a $775,000 sinking
fund payment due to bondholders on June 1, 2012 for the 2015 term
bond. According to SRMC, it was not informed by the trustee that
the payment was due and, therefore, they missed the payment. .
"At the same time, we placed the 'A' long-term rating on the 1999
and 2012 bonds on CreditWatch with negative implications because
this nonpayment, in our view, indicates that SRMC may not be able
to administer its debt obligations in a timely fashion," said
Standard & Poor's credit analyst Sharon Gigante. "We expect to
speak with management early next week and resolve the CreditWatch
action ahead of the upcoming sale of the 2012 bonds scheduled to
be sold in early October," added Ms. Gigante.
The 2012 bonds will be issued to fully refund the series 1999 and
2002 bonds on Oct. 31, 2012.
SOUTHERN AIR: Blames Declining Government Business for Bankruptcy
-----------------------------------------------------------------
The parent company of Southern Air Inc., a military cargo airline,
sought Chapter 11 bankruptcy protection (Bankr. D. Del. 12-12692)
in Wilmington on Sept. 28, 2012.
Katy Stech, writing for Dow Jones Newswires, reports Southern Air
blamed its financial woes on the decline in business from the U.S.
Department of Defense, which reduced its troop count in
Afghanistan and hired Southern Air less frequently. The
government business makes up more than 40% of the company's
revenue. According to Dow Jones, the carrier says its fleet of 11
jets is under used, and it plans to reorganize its operations
around its cargo-moving operations for DHL Worldwide.
Dow Jones reports that papers filed in bankruptcy court indicate
Southern Air's government-related revenue in the second quarter
was $44.9 million, 34% less than company executives expected.
Chief Executive Daniel McHugh said in court papers this year will
likely mark the fifth year in a row in which the company will see
no growth in demand for its air-cargo services.
For the 12 months ended July 31, the company reported revenue of
about $428.2 million and a net loss of $159.8 million, according
to court papers. As of July 31, the company said its assets were
worth $206.9 million, but that its liabilities topped $485
million. As of the bankruptcy, the airline estimated that it owed
about $288 million in secured financing obligations and about
$31.1 million in trade debt.
According to the report, Southern Air still had to make "above-
market" lease payments on its fleet of Boeing cargo jets. The
company said it will use its bankruptcy case to renegotiate its
lease agreements and continue to downsize its operations -- moves
that will likely cause the company to continue cutting its roster
of 611 workers.
The report relates Southern Air is seeking court approval of a $25
million bankruptcy loan to spend throughout the case. Bankruptcy
Judge Christopher S. Sontchi oversees the case. According to Dow
Jones, Southern Air follows fellow military transporter Global
Aviation Holdings Inc., which filed for bankruptcy earlier this
year, into Chapter 11. Global Aviation also cited the hit to its
business from the withdrawal of troops from Iraq and Afghanistan.
Dow Jones relates an affiliate of private-equity firm Oak Hill
Capital Partners bought majority ownership of Southern Air in
2007. At the same time as the purchase, Canadian Imperial Bank of
Commerce agreed to extend $300 million in loans.
SOUTHERN AIR: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Southern Air Holdings, Inc.
117 Glover Avenue
Norwalk, CT 06850
Bankruptcy Case No.: 12-12690
Affiliates that simultaneously sought Chapter 11 protection:
Debtor Case No.
------ --------
Cargo 360, Inc. 12-12691
Southern Air Inc. 12-12692
Air Mobility Inc. 12-12693
21110 LLC 12-12694
21111 LLC 12-12695
21221 LLC 12-12696
21550 LLC 12-12697
21576 LLC 12-12698
21590 LLC 12-12699
21787 LLC 12-12700
21832 LLC 12-12701
23138 LLC 12-12702
24067 LLC 12-12703
46914 LLC 12-12704
Aircraft 21255, LLC 12-12705
Aircraft 21380, LLC 12-12706
CF6-50, LLC 12-12707
Type of Business: Southern Air Holdings provides air cargo
services for cargo carriers and government
agencies worldwide.
Web site: http://www.southernair.com/
Chapter 11 Petition Date: Sept. 28, 2012
Court: U.S. Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Christopher S. Sontchi
Debtors'
Counsel: Brian S. Rosen, Esq.
Candace Arthur, Esq.
Gabriel Morgan, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8602
Fax: (212) 310-8007
E-mail: brian.rosen@weil.com
candace.arthur@weil.com
gabriel.morgan@weil.com
-- and --
M. Blake Cleary, Esq.
Maris J. Kandestin, Esq.
YOUNG, CONAWAY, STARGATT & TAYLOR
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
E-mail: mbcleary@ycst.com
mkandestin@ycst.com
Debtors'
Bankruptcy
Consultant
and Special
Financial
Advisor: ZOLFO COOPER, LLC
Debtors'
Claims and
Noticing
Agent: KURTZMAN CARSON CONSULTANTS, LLC
2335 Alaska Ave
El Segundo, CA 90245
Tel: (310) 823-9000
Fax: (310) 751-1549
E-mail: ECFpleadings@kccllc.com
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
The petition was signed by Jon E. Olin, senior vice president.
The Debtors' Consolidated List of Their 30 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Defense Logistics Agency-Energy Trade $8,162,187
Attn: Tracy Bare
Defense Finance and Accounting
Service
FAS-JAABC/CO
PO Box 182317
Columbus, OH 43218-2317
Tel: (618) 229-5116
Fax: (216) 367-3422
APICHARI Litigation $5,900,000
Attn: Robert Laplaca
Levett Rockwood P.C.
33 Riverside Avenue
Westport, CT 06880
Tel: (203) 222-0885
Fax: (203) 226-8025
Boeing US Training and Trade $3,474,442
Flight Services LLC
Attn: Tina Wood
PO Box 849899
Dallas, TX 75284
Tel: (786) 265-7707
Fax: (206) 662-4747
OH Aircraft Acquisition LLC/ Aircraft $2,429,608
Oak Hill Lease
Attn: Michael Warren
One Stamford Plaza
263 Tresser Blvd.
15th Floor
Stamford, CT 06901
Tel: (212) 527-8400
Fax: (203) 328-1651
Koninklijke Luchtvaart Trade $1,647,314
Maatschappij N.V. (KLM
Royal Dutch Airlines)
Attn: Nils Persson
Amsterdamseweg 55
Amstelveen, GP 1182
The Netherlands
Tel: +31 20 64 53087
Fax: +31 20 64 92166
KV Aviation Aircraft $1,448,846
299 South Main Street Lease
12th FL
MACU1228-120
Salt Lake City, UT 84110
Tel: +44 203 170 6190
Fax: +44 203 170 6194
Aircastle Advisor LLC Aircraft $1,316,458
Attn: Marzena Baines Lease
300 First Stamford Place
5th FL
Stamford, CT 06902
Tel: (203) 504-1020
Fax: (203) 504-1021
Eurocontrol Trade $1,245,214
Attn: Eduardo Romano
Rue De La Fusee 96
Brussells, B-1130
Belgium
Tel: +3227299011
Fax: +3227299044
Cooley LLP Trade $1,152,566
Attn: Kevin King, Esq.
101 California 5th Floor
San Francisco, CA 94111
Tel: (415) 693-2000
Fax: (415) 693-2222
MTU Maintenance Hanover GMBH Trade $988,610
Attn: Bernd Rettinger
PO Box 101720
Langerhagen, 30838
Germany
Fax: +49 0511 7806-7709
Hong Kong Aircraft Trade $844,363
Engineering Co.
Attn: Katyie Cheung
Tseung Kwan O Industrial
Estate
80 Chun Choi Street
Tseung Kwan, New Territories
Hong Kong
Tel: (852) 2767-3838
Fax: (852) 2261-6976
Barry E. Mukamal Litigation $811,739
Liquidating Trustee, on behalf
Of the Arrow Air Creditor Trust
Attn: David C. Cimo
Genovese Joblove &
Battista, P.A.
100 Se Second Street,
Suite 4400
Miami, FL 07131
Tel: (305) 349-2300
Fax: (305) 349-2310
Boeing Commercial Airlines Trade $658,830
Attn: Inola DelaCruz
PO Box 277851
Atlanta, GA 30384-7851
Tel: 425-237-0343
Fax: 425-237-3830
Aquila Aircraft Lease Aircraft $626,598
Attn: Michael Jedelman, Esq. Lease
Vedder Price PC
1633 Broadway 47th Fl
New York, NY 10019
Tel: (212) 407-7700
Fax: (212) 407-7799
United States Trade $616,272
Transportation Command
Attn: Thomas Kloeckner
DSSN 3801 LI-CRAF, DISB OPS
DIR, ATTN: 3801
Limestone Field Site
PO Box 269339
Indianapolis, IN 46226
Tel: (618) 746-4318
GMF Aero Asia Trade $575,211
Attn: Augus Sulistyono
Management Building, 3rd Fl
Soekarno-Hatta
International Airport
PO Box 1303
Bush, Cengkareng 19130
Tel: +62 21 550 8609
Fax: +62 21 550 2459
First Class Air Repair Trade $559,800
Attn: Randol Cepeda
15380 Cr 565 A, Suite G
Groveland, FL 34736
Tel: (352) 241-7684
Fax: (352) 241-7682
FedEx Special Payments Trade $559,336
2174-2710-0
Attn: Alexis Rivera
PO Box 94515
Palatine, IL 60094-4515
Tel: (888) 225-1517
Fax: (901) 397-0109
SR Technics Switzerland Ltd. Trade $503,149
Attn: Zoran Patarcic
Account Management Engines CAE
Engine Service Centre
Zurich Airport, 8058
Switzerland
Tel: +41 20 64 83087
Fax: +41 58 68 87141
Hashim Zaki Litigation $500,000
Attn: Thomas Bucci
Willinger, Willinger &
Bucci, PC
855 Main Street
Bridgeport, CT 06604
Tel: (203) 366-3939
Fax: (203) 337-4588
Los Angeles County Tax Tax $479,129
Collector
500 West Temple St.
Los Angeles, CA 90054-0018
Tel: (213) 893-1481
Fax: (213) 625-2249
AJ Walter Aviation Ltd Trade $456,609
Attn: Deryck Stokes
The Headquarters
Patridge Green
West Sussex, RH13 8RA
United Kingdom
Tel: +44 1403 71177
Fax: +44 1403 710936
Taikoo Aircraft Engineering Trade $367,500
Co. Ltd.
Attn: Peter Murton
Xiamen Int'l Airport
Fujian, China
Tel: +86 592 573 7032
Fax: +86 592 573 0205
Pratt & Whitney Trade $349,457
Attn: Keith Nichols
400 Main Street
East Hartford, CT 06108
Tel: (860) 565-4321
Fax: (860) 565-5442
Pan Am International Flight Trade $323,718
Academy
Attn: Eric Freeman
PO Box 660920
Miami, FL 33266-0920
Tel: (305) 874-6600
Fax: (303) 355-5560
United Aviation Services- Trade $321,608
EUR
Attn: Zaeni Hoque
PO Box 54482
Dubai, U.A.E.
Tel: +971 42996633
Fax: +971 42996711
International Air Transport Trade $288,672
Association
Attn: Sarah Association
IATA Centre
Route De L'Aeroport 33
P.O. Box 416
Geneva, 1215
Switzerland
Tel: +41 227702643
Fax: +41 227702654
Ethiopian Airlines Trade $284,508
Enterprise-US
Attn: Esmael Hamid
PO Box 1755
Addis Ababa, Ethiopia
Tel: +251 011 551 7000
+178585631228
Fax: +251 011 665 1200
+251 011 661 1474
Sharjah Aviation Services LLC Trade $280,481
Attn: Srinivasan Iyer
PO Box 70888
Sharjah, U.A.E.
Tel: +97165141111
Fax: +97165580361
UPS Air Cargo Trade $260,055
Attn: Tina Mack
UPS Corporate Headquarters
55 Glenlake Parkway
Atlanta, GA 30328
Tel: (404) 828-6000
Fax: (404) 828-6777
SPORTSMAN'S LINK: Former Owner Loses Legal Malpractice Suit
-----------------------------------------------------------
District Judge J. Randal Hall in Augusta, Georgia, granted a
motion for summary judgment filed by defendants in the legal
malpractice lawsuit, SOHAIL M. ABDULLA, Plaintiff, v. SCOTT J.
KLOSINSKI, KLOSINSKI OVERSTREET, LLP, and JOHNSTON, WILKIN, &
WILLIAMS, Defendants, No. CV 110-159 (S.D. Ga.).
Mr. Abdulla, who owned and operated Sportsman's Link, Inc., a
sporting and outdoor equipment store in Augusta, Georgia, blamed
the defendants for his store's bankruptcy and eventual
liquidation, and for Mr. Abdulla's default on a guaranty in favor
of supplier Henry's Tackle LLC.
Judge Hall, however, ruled that Mr. Abdulla's claims relating to
the second Henry's Tackle lawsuit lack a basis to infer
proximately caused damages. Mr. Abdulla signed the Guaranty and
thereby personally obligated himself on Sportsman's Link's
corporate debt and, at the same time, waived all defenses to the
Guaranty's enforcement. Mr. Abdulla now regrets that decision,
but the defenses he raises to personal liability are meritless.
As a consequence, he cannot show that any alleged misconduct by
the Defendants, even if it occurred, proximately caused him
injury. The Guaranty would have been enforced against him on its
own terms, if not by default judgment.
Sometime in 2006, a dispute arose between Sportsman's Link and one
of its wholesale vendors, Henry's Tackle, over a shipment of
merchandise. Henry's Tackle delivered merchandise valued at
approximately $460,650 prematurely and out of season. The
delivery maxed out Sportsman's Link's credit-line with Henry's
Tackle, disabling it from purchasing desired seasonal merchandise.
Unable to sell the out-of-season merchandise and not wanting to
retain it, Mr. Abdullah came to an agreement with Henry's Tackle
whereby Sportsman's Link would review its inventory and identify
items to be returned for credit; at the same time, it would pay
$75,000 each month to Henry's Tackle until its outstanding account
balance was settled. Sportsman's Link sent one payment of $75,000
to Henry's Tackle but stopped payment on the check because Henry's
Tackle did not pick up any of the merchandise marked for credit.
None of the merchandise at issue was ever returned to Henry's
Tackle.
In December 2006, Henry's Tackle sued Sportsman's Link and Mr.
Abdullah in the Superior Court of Richmond County to recover
amounts owed on the unpaid merchandise, as well as incentives Mr.
Abdullah allegedly received for orders placed with Henry's Tackle.
Sportsman's Link and Mr. Abdullah retained attorney William J.
Williams, a partner with Johnston, Wilkins & Williams, to
represent them in the case. Mr. Williams had previously
represented Sportsman's Link and Mr. Abdullah in several other
unrelated legal matters.
Sportsman's Link's sales and profits dropped significantly in
2006, resulting in a net loss of over $200,000. Mr. Williams
advised Mr. Abdullah to consider the possibility of petitioning
for Chapter 11 bankruptcy and directed him to Scott J. Klosinski,
Esq., a partner with Klosinski Overstreet, LLP. Mr. Abdullah
later elected to file a Chapter 11 petition in March 2007. The
suit filed by Henry's Tackle in Richmond County was consequently
stayed.
In June 2007, Henry's Tackle filed an application for the
appointment of a trustee to take over the property of Sportsman's
Link and operate the business, alleging that Mr. Abdullah had used
Sportsman's Link "as a sham to purchase and leverage his
[individual] assets" by commingling personal and corporate funds
and withdrawing corporate funds for his individual benefit and to
the detriment of creditors.
Mr. Abdullah has admitted that he personally lent money to
Sportsman's Link and used his personal credit card to make
business purchases. Sportsman's Link, in return, made payments to
Mr. Abdullah. Schedules attached to Sportsman's Link's bankruptcy
petition indicate that the corporation paid Mr. Abdullah over
$440,000 within one year of commencement of the bankruptcy case,
but Mr. Abdullah and Sportsman's Link's accountant both attest
that Mr. Abdullah did not use business funds for his own personal
benefit.
Mr. Klosinski discussed with Louis Saul, Esq., counsel for Henry's
Tackle, the possibility of having the Trustee Motion withdrawn.
Mr. Saul indicated that the Motion would be withdrawn if a series
of conditions were met, including execution of a personal guaranty
from Plaintiff. Sometime during this period, Mr. Klosinski
advised Mr. Abdullah that if Chapter 11 reorganization was not
successful, his commingling of personal and business accounts
could be considered fraudulent conveyances and form the basis for
personal liability on Sportsman's Link's debts under a piercing
the corporate veil claim. Mr. Williams, meanwhile, was initially
reluctant to have Mr. Abdullah obligate himself on the
corporation's debt, but he eventually advised Mr. Abdullah to
execute the guaranty.
On July 18, 2007, Mr. Abdullah executed a personal guaranty of
Sportsman's Link's debt in favor of Henry's Tackle in the amount
of $547,219. The Guaranty provides that Henry's Tackle may
proceed to collect the debt from Mr. Abdullah in the event of
default, which includes, inter alia, withdrawal of Sportsman's
Link's Chapter 11 petition or conversion to Chapter 7. The
Guaranty includes a waiver-of-defenses clause which states that it
"is valid and binding according to its terms, subject to no
defense, counterclaim, set-off or objection of any kind."
In June 2008, the United States Trustee moved to convert
Sportsman's Link's bankruptcy case to a Chapter 7 proceeding.
According to the Chapter 7 Motion, conversion was merited because
Sportsman's Link's post-petition operations had significantly
trended downward, resulting in a net loss and negative cash flow.
Moreover, inventory had dropped over 25% in value -- evidence that
the business was surviving through the cannibalization of
inventory, a process that reduces the liquidation value of the
estate to the prejudice of creditors. In July 2008, the
Bankruptcy Court granted the Chapter 7 Motion, and as a result the
Guaranty entered default. Mr. Abdullah moved for reconsideration
of the Chapter 7 conversion, even offering to transfer $1,000,000
of his personal assets to the corporation, but the motion was
denied.
A month later, in August 2008, Henry's Tackle filed suit against
Mr. Abdullah in Superior Court to enforce the Guaranty. On Aug.
20, 2008, Mr. Klosinski forwarded the complaint to Mr. Abdullah by
e-mail. Attached to the complaint was a letter informing Mr.
Abdullah that KO would not be representing him in the case and
advising him to contact a lawyer to defend himself "as soon as
possible." The letter further advised Mr. Abdullah that he
"should be personally served with the complaint, and . . . will
have thirty (30) days from the date of service to file an answer."
On Aug. 21 or 22, 2008, Mr. Abdullah received the e-mail from Mr.
Klosinski. Mr. Williams did not forward the complaint to Mr.
Abdullah.
After receiving Mr. Klosinski's e-mail in August, Mr. Abdullah had
no further contact with Messrs. Klosinski, Williams, or any other
attorney regarding the second Henry's Tackle lawsuit until
sometime in October or early November 2008. In the meantime, the
case automatically entered default because no answer was timely
filed. Then, on Oct. 30, 2008, default judgment was entered
against Mr. Abdullah and in favor of Henry's Tackle in the amount
of $684,024.31, inclusive of interest and attorney's fees.
In October or early November 2008, Mr. Williams and Mr. Abdullah
finally spoke about the second Henry's Tackle lawsuit, and Mr.
Abdullah requested that Mr. Williams represent him in the matter.
Mr. Williams agreed but requested an up-front retainer of $5,000,
which was unusual because he had never previously asked for
payment from Mr. Abdullah before initiating representation.
Within a week, Mr. Williams filed an answer and moved to set aside
the default judgment. Following a hearing, however, the state
court denied the motion to set aside the default judgment and
appointed a receiver to sell Mr. Abdullah's property in
satisfaction of the judgment. Property seized by the receiver was
sold at auction, netting proceeds of $412,707.24 for Henry's
Tackle.
A copy of the Court's Sept. 25, 2012 Order is available at
http://is.gd/lMr9Hpfrom Leagle.com.
About Sportsman's Link
Sportsman's Link Inc., an Augusta, Georgia-based manufacturer and
seller of fishing and hunting equipment, and firearms, filed for
Chapter 11 bankruptcy (Bankr. S.D. Ga. Case No. 07-10454) on
March 13, 2007, estimating $1 million to $100 million in both
assets and debts.
On Oct. 9, 2007, the Debtor filed a Chapter 11 Plan and Disclosure
Statement. On June 18, 2008, Georgia Bank and Trust Company of
Augusta sought relief from the automatic stay.
On July 22, 2008, the case was converted to Chapter 7; Edward J.
Coleman was appointed as Chapter 7 trustee; and GB&T's Motion for
Relief from Stay was granted.
ST PETER'S UNIV: Moody's Lowers Outstanding Debt Rating to 'Ba1'
----------------------------------------------------------------
Moody's Investors Service has downgraded to Ba1 from Baa3 the
long-term rating assigned to Saint Peter's University Hospital's
(SPUH or Saint Peter's) outstanding debt of $165.8 million. At
this time Moody's is removing the rating from under review; the
outlook is stable at the lower rating level.
Summary Ratings Rationale
The Ba1 rating reflects Saint Peter's weakened financial
performance through the first half of FY 2012 ending June 30,
2012. A decline in volumes, primarily due to some changes in
physician referral patterns to a nearby competitor, have
contributed to the financial decline. Annualized debt coverage
measures have weakened as a result. Management is taking actions
to correct financial performance with a goal to reach breakeven on
a monthly basis by the end of FY 2012. Absolute and relative cash
measures have increased as of June 30, 2012 from fiscal year end
2011 and steps are being taken to improve Saint Peter's fiscal
health, supporting the stable outlook.
Challenges
* Decline in system financial performance through the first half
of FY 2012 ending June 30, 2012 with -1.9% operating margin and
4.7% operating cash flow margin, unfavorable to Baa3 medians of
1.6% and 8.4%, respectively (Moody's restates bad debt as an
expense); annualized debt coverage measures through June 30, 2012
are weak with over 10 times debt to cash flow and 1.8 times
Moody's maximum annual debt service coverage
* Sharp decline in volumes through June 30, 2012 when compared to
the prior year with a 5.4% drop in admissions and 4.4% decline
when adding in observation stays; challenges are present in
growing surgical volumes; net patient revenues are down year-to-
date by 0.7% (Moody's restates bad debt as an expense)
* Very competitive two-hospital market which enables physicians
to move between the two facilities with some ease and has
contributed to the decline in volumes; the hospitals are located 7
blocks apart in downtown New Brunswick
* Disruptive installation and upgrade of new information
technology platform at the end of FY 2011 and during the first
half of FY 2012 which has contributed to weaker financial results
* Recent change in senior leadership
Strengths
* One of the leading providers in the state for women's and
children's programs
* Increase in unrestricted cash and investments to $93.6 million
or 82.9 days cash on hand as of June 30, 2012; there is no longer
a days cash on hand covenant following the debt refinancing in FY
2010; cash is very conservatively invested
* Management plans to freeze the defined benefit pension plan at
December 31, 2012; unfunded liability on a PBO basis reached $99.3
million in FY 2011
* All fixed rate debt structure and no interest rate derivatives;
management expects to exceed all covenant requirements
* Recent action steps taken by management to stabilize financial
performance including the arrival of a new physician leader who is
expected to assist with repairing key physician relationships
* Engagement of outside consultant to assist Saint Peter's with
developing a strategic plan
Outlook
The stable outlook reflects the maintenance and increase in
unrestricted cash and investments as of June 30, 2012 and the
current actions to improve Saint Peter's fiscal health. The stable
outlook also reflects the engagement of an outside consultant to
assist management with future planning.
WHAT COULD MAKE THE RATING GO UP
Improvement in financial performance that is sustainable; reversal
of current volumes trends; maintenance of liquidity
WHAT COULD MAKE THE RATING GO DOWN
Further departure from current levels of performance; decline in
liquidity; loss in market share or failure to re-galvanize
physician relations
Rating Methodology
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in March 2012.
TRI-VALLEY: Financing Ready for Final Court Approval
----------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Tri-Valley Corp. negotiated a compromise with the
official equity holders' committee for affiliate TVC Opus I
Drilling Program LP allowing final approval of financing for the
Chapter 11 reorganization begun on Aug. 7 in Delaware.
According to the report, the $11 million loan, provided by former
chairman G. Thomas Gamble, will give the company $3.85 million in
fresh cash. The Opus equity committee objected to the loan, in
part because the panel believed Opus might not receive much
benefit from the loan while giving up liens on its properties. In
compromise, the financing order submitted for the judge's approval
provides that the bankrupt companies in effect will be liable only
for the amount of the loan that each uses.
The report relates that the loan converts $7.2 million of pre-
bankruptcy debt into a post-bankruptcy loan.
About Tri-Valley
Tri-Valley Corporation (OTQCB: TVLY) --
http://www.tri-valleycorp.com/-- explores for and produces oil
and natural gas in California and has two exploration-stage gold
properties in Alaska.
Tri-Valley and three affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Lead Case No. 12-12291) on Aug. 7 with
funding from lenders that require a prompt sale of the business.
K&L Gates LLP serves as bankruptcy counsel. Attorneys at Landis
Rath & Cobb LLP serve as Delaware and conflicts counsel. The
Debtors have tapped Epiq Bankruptcy Solutions, LLC, as claims
agent.
The Debtor disclosed assets of $17.6 million and liabilities
totaling $14.1 million. Former Chairman G. Thomas Gamble, who is
financing the bankruptcy case, is owed $7.2 million on several
secured notes. There is an unsecured note for $528,000 and
$9.4 million in unsecured debt owing to suppliers.
The Debtor is contemplating a quick sale of the assets. Bids are
due by Oct. 10 or Oct 17, depending on which package of assets a
bidder hopes to buy. A hearing to approve the sales is set for
Dec. 6.
WAVE2WAVE COMMUNICATIONS: Sold to Secured Lenders' Affiliate
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Wave2Wave Communications Inc. is being sold to a
company affiliated with Robert DePalo, an officer of the first-
and second-lien lenders and a minority shareholder.
According to the report, the buyer will pay $3.5 million cash plus
the assumption of debt. The secured lenders Brookfield Special
Purpose Fund LLC and Veritas High Yield Fund LLC are owed about
$15 million.
About Wave2Wave Communications
Wave2Wave Communications Inc., a provider of voice and data
services to businesses, filed for bankruptcy (Bankr. D. N.J. Case
No. 12-13896) on Feb. 17, 2012. Wave2Wave, which estimated up to
$100 million assets and debts, says it sought Chapter 11
protection, after access provider Verizon Communications Inc.
threatened to cut off its service.
Affiliates RNK Inc. and RNK VA LLC also filed petitions.
Wave2Wave was founded in 1999. Judge Donald H. Steckroth presides
over the case. Michael D. Sirota, Esq., at Cole, Schotz, Meisel,
Forman & Leonard, P.A., serves as the Debtors' counsel. Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., serves as their
special counsel. Kurtzman Carson Consultants LLC serves claims,
noticing and balloting agent. J.H. Cohn LLP serves as financial
advisor. The petition was signed by Steven Asman, president and
chairman of the Debtors' board.
The official committee of unsecured creditors is represented by
Cooley LLP.
WEST PENN: Fitch Places 'B+' Rating on Rating Watch Negative
------------------------------------------------------------
Fitch Ratings has placed West Penn Allegheny Health System's
(WPAHS) 'B+' rating on Rating Watch Negative, in response to the
system's announcement that it has notified Highmark, Inc. that the
system is released from its obligations under an affiliation
agreement signed by the two companies last November.
The rating action applies to $737 million series of 2007A health
system revenue bonds issued by the Allegheny County Hospital
Development Authority.
Fitch's last rating commentary noted that the failure of WPAHS to
finalize the affiliation agreement with insurer Highmark would
lead to downward rating pressure. Fitch is assessing the effect
of the announcement and monitoring developments, and will take
rating action as appropriate.
WEST PENN: Moody's Reviews 'Caa1' Bond Rating for Downgrade
-----------------------------------------------------------
Moody's Investors Service has placed West Penn Allegheny Health
System's (WPAHS) (PA) Caa1 bond rating under review for possible
downgrade, following the announcement of WPAHS's termination of
its agreement with Highmark Inc. and Affiliates. The action
affects approximately $737 million of outstanding debt per Moody's
last report dated June 15, 2012.
West Penn Allegheny Health System announced on Sept. 28 that the
health system served a notice of termination of its affiliation
agreement with Highmark Inc. and Affiliates. The notice stated
that Highmark has repudiated the Affiliation Agreement by refusing
to close the existing transaction and that such anticipatory
breach has released WPAHS from its obligations under the
Affiliation Agreement and related agreements.
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in March 2012.
* Bankruptcy Auctions Go Online in Bid to Boost Cash for Creditors
------------------------------------------------------------------
Dawn McCarty and Phil Milford at Bloomberg News report that Joel
L. Tabas, a bankruptcy trustee in Miami, bypassed traditional
liquidators when faced with the challenge of selling a debtor's
2006 Hummer H3 this year. Instead, he put it on EBay. Trustees
across the U.S. are turning to Internet market places such as EBay
Inc., the world's largest, to fetch higher prices for assets,
boosting recoveries for creditors.
According to the report, online offerings have included a
$1.5 million California house with a view of Mount Shasta, 215
pairs of sneakers from football star Warren Sapp's Air Jordan
collection, and a set of Arizona cemetery plots.
Online sales are "the single most revolutionary tool the auction
business has ever seen," said Mark Weitz, 52, a unit president of
Great American Group Inc., a liquidator with offices in Los
Angeles, Chicago, Boston and London. As much as $2 billion in
assets moves through bankruptcy courts in Chapter 7 cases and at
least $10 billion in assets from Chapter 11 363 sale cases, of
which a portion are now sold over the Internet, said Vahak
Papasian, a Los Angeles area bankruptcy lawyer. Online bankruptcy
sales, which began about 2005, now account for about 20% of the
business at Meares Auction Group in Pelzer, South Carolina, said
company President David Meares. "It's all over the country," Mr.
Meares said in a telephone interview. His company, which started
in 1972, generates total sales of $300,000 to $1 million a year
selling items such as gold to overseas buyers and guns in the
U.S., he said.
The report relates that the increase in online bankruptcy auctions
has attracted competitors to EBay, which has more than $13 billion
in annual sales. At Inforuptcy.com, the Burbank, California-based
Web site Mr. Papasian co-founded with Michael Mikikian, a former
Jefferies & Co. vice president, users can download court filings
and buy and sell bankruptcy assets and claims. Hilco Trading LLC,
a veteran bankruptcy liquidator based in Northbrook, Illinois,
recently started its own site, hilcoipauctions.com. The sale of
the intellectual property of bankrupt Advanta Corp., including
trademarks and copyrights, began in late August on Hilco's
platform. Proxibid Inc., the world's largest provider of live
auction webcasting services, handled more than 200 bankruptcy
auctions last year, almost twice as many as three years earlier,
President Ryan Downs said. The value of the goods climbed to
$50 million, or about 5% of the total processed by the Omaha,
Nebraska-based company.
According to Bloomberg, while Advanta, a Spring House,
Pennsylvania-based financial-services company, initially filed to
reorganize under Chapter 11 of the Bankruptcy Code, most online
auctions involve debtors who sought to liquidate using the code's
Chapter 7.
The report discloses that on Nov. 30, Julien's will hold an
auction for boxing champion Evander Holyfield's memorabilia in
Beverly Hills. Mr. Holyfield is trying to pay down debt after his
109-room home in Fairburn, Georgia, was sold in March for $7.5
million in a foreclosure auction, according to the New York Daily
News. Bidders can take part in person, online or over the
telephone.
* Large Companies With Insolvent Balance Sheets
-----------------------------------------------
Total
Share Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
ABSOLUTE SOFTWRE ABT CN 129.7 (4.8) 1.7
ADVANCED BIOMEDI ABMT US 0.2 (2.0) (1.6)
AK STEEL HLDG AKS US 3,901.0 (360.6) 129.6
AMC NETWORKS-A AMCX US 2,173.4 (959.1) 542.5
AMER AXLE & MFG AXL US 2,441.2 (394.7) 169.7
AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2)
AMERISTAR CASINO ASCA US 2,058.5 (28.0) 42.5
AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0
ARRAY BIOPHARMA ARRY US 108.1 (85.8) 17.2
ATLATSA RESOURCE ATL SJ 886.5 (270.4) 21.8
AUTOZONE INC AZO US 6,265.6 (1,548.0) (676.6)
BOSTON PIZZA R-U BPF-U CN 162.9 (92.3) (0.3)
CABLEVISION SY-A CVC US 6,991.7 (5,641.6) (286.1)
CAPMARK FINANCIA CPMK US 20,085.1 (933.1) -
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CHENIERE ENERGY CQP US 1,873.0 (442.2) 117.0
CHOICE HOTELS CHH US 857.7 (11.2) 402.1
CIENA CORP CIEN US 1,915.3 (60.3) 710.4
CINCINNATI BELL CBB US 2,702.7 (696.2) (52.8)
CLOROX CO CLX US 4,355.0 (135.0) (685.0)
DEAN FOODS CO DF US 5,553.1 (3.1) 185.6
DELTA AIR LI DAL US 44,720.0 (1,135.0) (6,236.0)
DENNY'S CORP DENN US 328.9 (2.8) (20.3)
DIRECTV DTV US 19,632.0 (4,045.0) 520.0
DOMINO'S PIZZA DPZ US 424.6 (1,369.1) 52.9
DUN & BRADSTREET DNB US 1,795.6 (821.9) (655.6)
E2OPEN INC EOPN US 29.7 (34.5) (32.5)
ELOQUA INC ELOQ US 37.5 (9.6) (14.2)
FAIRPOINT COMMUN FRP US 1,877.4 (184.4) 51.6
FIESTA RESTAURAN FRGI US 286.0 2.6 (14.7)
FIFTH & PACIFIC FNP US 900.5 (175.5) 130.9
FREESCALE SEMICO FSL US 3,499.0 (4,498.0) 1,374.0
GENCORP INC GY US 874.0 (171.3) 47.3
GLG PARTNERS INC GLG US 400.0 (285.6) 156.9
GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9
GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9
GOLD RESERVE INC GRZ US 78.3 (25.8) 56.9
GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5
GRAMERCY CAPITAL GKK US 2,223.0 (352.8) -
HCA HOLDINGS INC HCA US 27,132.0 (6,943.0) 1,690.0
HOVNANIAN ENT-A HOV US 1,624.8 (404.2) 881.0
HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8)
HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8)
HYPERION THERAPE HPTX US 9.6 (41.8) (31.4)
INCYTE CORP INCY US 312.0 (217.2) 154.4
INFINITY PHARMAC INFI US 113.0 (3.4) 70.2
IPCS INC IPCS US 559.2 (33.0) 72.1
ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2
JUST ENERGY GROU JE CN 1,583.6 (245.9) (227.2)
JUST ENERGY GROU JE US 1,583.6 (245.9) (227.2)
LIMITED BRANDS LTD US 6,589.0 (245.0) 1,316.0
LIN TV CORP-CL A TVL US 839.2 (51.8) 52.7
LORILLARD INC LO US 2,576.0 (1,568.0) 881.0
MARRIOTT INTL-A MAR US 6,007.0 (1,124.0) (1,287.0)
MERITOR INC MTOR US 2,555.0 (933.0) 279.0
MONEYGRAM INTERN MGI US 5,185.1 (116.1) (35.3)
MORGANS HOTEL GR MHGC US 545.9 (110.1) (7.0)
MPG OFFICE TRUST MPG US 2,061.5 (827.9) -
NATIONAL CINEMED NCMI US 794.2 (354.5) 95.8
NAVISTAR INTL NAV US 11,143.0 (358.0) 1,585.0
NB MANUFACTURING NBMF US 2.4 (0.0) (0.5)
NEXSTAR BROADC-A NXST US 566.3 (170.6) 40.2
NPS PHARM INC NPSP US 186.9 (45.3) 130.3
NYMOX PHARMACEUT NYMX US 2.7 (7.7) (0.9)
ODYSSEY MARINE OMEX US 22.4 (29.3) (26.9)
OMEROS CORP OMER US 10.1 (20.5) (8.7)
PALM INC PALM US 1,007.2 (6.2) 141.7
PDL BIOPHARMA IN PDLI US 259.8 (161.1) 144.3
PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9)
PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9)
PRIMEDIA INC PRM US 208.0 (91.7) 3.6
PROTECTION ONE PONE US 562.9 (61.8) (7.6)
QUALITY DISTRIBU QLTY US 454.5 (29.8) 60.7
REGAL ENTERTAI-A RGC US 2,306.3 (542.3) 62.5
RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4)
REVLON INC-A REV US 1,173.9 (665.6) 177.8
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 1,813.5 (202.0) 449.5
SINCLAIR BROAD-A SBGI US 2,160.2 (66.3) (1.4)
TAUBMAN CENTERS TCO US 3,096.1 (295.3) -
TEMPUR-PEDIC INT TPX US 865.5 (12.1) 258.9
THERAPEUTICS MD TXMD US 4.9 (0.7) 1.0
THRESHOLD PHARMA THLD US 86.3 (51.4) 71.2
TRULIA INC TRLA US 27.6 (3.2) (4.9)
UNISYS CORP UIS US 2,397.9 (1,190.0) 463.1
VECTOR GROUP LTD VGR US 885.7 (119.5) 248.2
VERISIGN INC VRSN US 1,942.0 (59.2) 858.0
VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3)
WEIGHT WATCHERS WTW US 1,193.6 (1,784.6) (259.9)
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel
Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez,
Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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