/raid1/www/Hosts/bankrupt/TCR_Public/121106.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, November 6, 2012, Vol. 16, No. 309
Headlines
1220 SOUTH: Creditors Have Until Dec. 20 to File Proofs of Claim
261 EAST: Plan Filing Deadline Extended to Jan. 20
313 GROUP: Moody's Assigns 'B2' CFR; Outlook Stable
38 STUDIOS: RI Sues Banks, Ex-Baseball Star Over $75MM in Loans
4KIDS ENTERTAINMENT: Judge Clears to Send Plan for Creditor Vote
4KIDS ENTERTAINMENT: Full-Payment Plan Hearing Set for Dec. 13
4KIDS ENTERTAINMENT: Inks General Release with Director
A123 SYSTEMS: Wanxiang Seeks to Delay Sale by About One Month
A123 SYSTEMS: Could Face Up to $115MM in Fisker Rejection Claims
ADAMS PRODUCE: CRO Approved to Institute and Prosecute All Claims
AEROGROW INTERNATIONAL: Inks New Amazon.com Distribution Pact
AK STEEL: S&P Puts 'B+' CCR on Watch, Cites Expected Performance
ALLY FINANCIAL: Repays $2.9 Billion Debt Under FDIC Program
ALLY FINANCIAL: Reports $384 Million Net Income in Third Quarter
AMERICAN REALTY: Creditor Looks to Dismiss Trust Case
AMERICAN WEST: Judge Sends Plan Back to Drawing Boards
AMERICAN AIRLINES: Going to Supreme Court to Stop PSA Election
ARCAPITA BANK: Lands $150MM Loan From Fortress With Better Terms
AS SEEN ON TV: Enters Into Merger Agreement With eDiets
ATHABASCA OIL: DBRS Assigns 'B' Provisional Issuer Rating
ATP OIL: Creditors Seek to File Fraudulent Transfer Suits
AVANTAIR INC: Eight Directors Elected to Board
BACK YARD BURGERS: Plan Hands Control to Lender Pharos
BAKERS FOOTWEAR: Sets Nov. 5 Auction to Pick Liquidator
BALLARD POWER: Has $9.3-Mil. Net Loss in Third Quarter
BILLMYPARENTS INC: Transpac Co-Founder Named to Board
BITI LLC: Claims Bar Date Set for Nov. 30
BITI LLC: U.S. Trustee Appoints 3-Member Creditors Panel
BITI LLC: Court Approves Stagg Terenzi as Counsel
BRAFFITS CREEK: Section 341(a) Meeting Scheduled for Nov. 15
BUGS & BOOF: Ruling in Legal Malpractice Suit Upheld
CDC CORP: Taps Wilmer Cutler as Securities Counsel
CELL THERAPEUTICS: Incurs $20.2 Million Net Loss in Third Quarter
CENTENE CORP: Moody's Affirms 'Ba2' Sr. Debt Rating; Outlook Neg.
CENTENE CORP: S&P Keeps 'BB' Rating on $250MM Sr. Unsecured Notes
CHAPARRAL ENERGY: Moody's Rates $150MM Sr. Unsecured Notes 'B3'
CHESAPEAKE ENERGY: Moody's Rates $2BB Sr. Unsecured Term Loan Ba3
CIRCLE STAR: Gets Operator License to Begin Drilling in Kansas
CITIZENS FIRST: Closed; Heartland Bank & Trust Assumes Deposits
CLEAR CHANNEL: Bank Debt Trades at 17% Off in Secondary Market
CLEAR CHANNEL: Moody's Rates $2.725BB Sr. Unsec. Note Issue 'B1'
COMMONWEALTH GROUP: Hiring Gentry Tipton as Bankruptcy Counsel
COMMONWEALTH GROUP: Sec. 341 Creditors' Meeting Set for Nov. 28
COVANTA HOLDINGS: Fitch Rates $335-Mil. Unsecured Bonds 'BB+'
COVANTA HOLDINGS: S&P Rates $335MM Sr. Unsec. Revenue Bonds 'BB-'
CROATAN SURF: OK'd to Sell 35 Residential Condominium Units
CYCLONE POWER: James Landon to Act as Interim CEO
DAIS ANALYTIC: Repays $1.3MM Conv. Note to Platinum-Montaur
DENNY'S CORP: Files Form 10-Q, Reports $5.3-Mil. Net Income in Q3
DEWEY & LEBOEUF: Has Access to Cash Collateral Until Nov. 18
DEWEY & LEBOEUF: Collects $11.5-Mil. in Fees During September
DEWEY & LEBOEUF: Can Employ Adam A. Wescher to Sell Artwork
DEWEY & LEBOEUF: Lawsuit Against Ex-Leaders Goes to NY Bank. Court
DEX MEDIA EAST: Bank Debt Trades at 36% Off in Secondary Market
DEX MEDIA WEST: Bank Debt Trades at 34% Off in Secondary Market
DIGITAL DOMAIN: Court OKs FTI Consulting, Pachulski Stang Hiring
DIXIE MOTOR: Chapter 11 Case Summary & 2 Unsecured Creditors
DM DEVELOPMENT: Chapter 11 Reorganization Case Dismissed
DUNE ENERGY: Incurs $1.4 Million Net Loss in Third Quarter
DUNLAP OIL: Nov. 13 Final Hearing on Use of Cash Collateral
DUNLAP OIL: U.S. Trustee Wants Critical Vendors Identified
DUNLAP OIL: Has Interim OK to Hire Gallagher & Kennedy as Counsel
DUNLAP OIL: Files Schedules of Assets and Liabilities
DUNLAP OIL: Hiring Peritus Commercial as Financial Advisor
DYNEGY HOLDINGS: Adopts 2012 Long Term Incentive Plan
EASTMAN KODAK: Unsecured Creditors Want to Sue 2nd Lien Lenders
ELMIRA DOWNTOWN: Can Stay at First Arena for 2012-13 Season
FASTLANE ACQUISITION: Moody's Assigns 'B2' Corp. Family Rating
FIRST PLACE: Case Summary & 3 Unsecured Creditors
FUSION TELECOMMUNICATIONS: Acquires NBS for $19.6 Million
FUSION TELECOMMUNICATIONS: Closes on $22.5 Million Financings
GELT PROPERTIES: Hearing on Cash Use Resumes Today
GELT PROPERTIES: Hearing on Plan Disclosures Today
GELT PROPERTIES: Hearing on Relief of Stay Resumes Today
GELTECH SOLUTIONS: Had $1.8-Mil. Net Loss in Sept. 30 Quarter
GGM FITNESS: Owner of Gold's Gym Middletown Files for Chapter 11
GORDIAN MEDICAL: Seeks 75 More Days to File Chapter 11 Plan
GRANITE DELLS: Files Outline for Plan of Reorganization
GRAYMARK HEALTHCARE: To be Delisted from NASDAQ on Nov. 6
GRAYMARK HEALTHCARE: Inks 3rd Amendment to Arvest Loan Agreement
GULF COLORADO: Trustee to Sell Railroad Biz, Wants to Pay Bonuses
H & M OIL: Prospect Capital Wants Ch. 11 Trustee to Take Over
HARPER BRUSH: Auction Set for Nov. 19 in Bankruptcy Court
HAYDEL PROPERTIES: BancorpSouth's Bid for Lift Stay Denied
HAYDEL PROPERTIES: Hearing on Case Conversion on Thursday
HERCULES OFFSHORE: S&P Hikes CCR to 'B' on Improving Day Rates
HERITAGE BANK OF FLORIDA: Closed; Centennial Assumes Deposits
HIGH PLAINS: Amends Letter of Intent with Chama Technologies
HORIZON LINES: Reports $1.8-Mil. Net Income in Third Quarter
HOWREY LLP: Equity Holders Face Class Action
HUNTSMAN INT'L: Moody's Rates New $300MM Sr. Unsec. Notes 'B1'
HUNTSMAN INT'L: S&P Rates $300MM Senior Unsecured Notes 'BB-'
ICONIX BRAND: S&P Revises Outlook on 'B+' CCR to Stable
IMAM SHIRAZI: Case Summary & 5 Largest Unsecured Creditors
INDIANA STEEL: Sells Assets to Chicago's E&H Tubing
INNOVATIVE USA: Case Summary & 20 Largest Unsecured Creditors
INSPIREMD INC: Has $7.5-Mil. Net Loss in Sept. 30 Quarter
IZEA INC: Names New Chief Operating Officer, Expands Sales Team
J&J HOLDINGS: Highland Country Club in Ch. 11 to Stop Foreclosure
LEHMAN BROTHERS: Unit Seeks $15-Mil. Coverage in Suncal Bankruptcy
LEHMAN BROTHERS: Financing Unit Sues Jefferson County on Swap Deal
LEHMAN BROTHERS: Asian Units' Members Receive Wind-Up Reports
LIBERACE FOUNDATION: Sec. 341 Creditors' Meeting on Dec. 6
LIBERACE FOUNDATION: Taps Ghandi Law Offices as Bankruptcy Counsel
LIGHTSQUARED INC: LP Lenders' Standing Motion Adjourned to Nov. 28
LODGENET INTERACTIVE: Mast Capital Discloses 5.1% Equity Stake
LONGVIEW POWER: Bank Debt Trades at 16% Off in Secondary Market
LPATH INC: Offering $20 Million Worth of Securities
MCCLATCHY CO: Files Form 10-Q, Posts $5.1MM Net Income in Q3
MEDICURE INC: Completes Common Shares Consolidation
MF GLOBAL: PwC Fails Again to Stop Malpractice Suit
MF GLOBAL: UK Unit Is Nondefaulting Party, Judge Rules
MORGANS HOTEL: Incurs $15.9 Million Net Loss in Third Quarter
MOUNTAIN STATE: Moody's Confirms 'B1' Rating on Revenue Bonds
NATIONAL HOLDINGS: Bryant Riley Resigns from Board
NEOMEDIA TECHNOLOGIES: Global Grid Discloses 8.6% Equity Stake
NEXSTAR BROADCASTING: Offering $300 Million Worth of Securities
NORTHCORE TECHNOLOGIES: Launches Dutch Auction Platform for Wine
OCWEN FINANCIAL: Moody's Affirms 'B1' Corp. Family Rating
OLD REPUBLIC: Fitch Maintains Watch Negative on 'BB' IDR
OLYMPIC HOLDINGS: Proofs of Claim Due Tomorrow
PATRIOT COAL: To Close Bluegrass Mine Complex by Yearend
PATRIOT COAL: Bridge Order Extending Exclusivity to Nov. 8 Issued
PATRIOT COAL: Sierra Liquidity Buys Claims
PEAK RESORTS: Gets More Time to Develop Chapter 11 Plan
PEMCO WORLD: Sets Nov. 13 Plan Disclosures Hearing
PERFORMA ENTERTAINMENT: Ruling Clears Way to Transfer Beale Street
PICCADILLY RESTAURANTS: Final Hearing on DIP Financing Today
PMI GROUP: Reaches Settlement in Principle with PMI Mortgage
POSITRON CORP: CEO and CFO Invest $1.6 Million
PRESSURE BIOSCIENCES: VP of Finance and Administration Quits
QUANTUM FUEL: Common Stock Transferred to NASDAQ Capital
RAHA LAKES: Court Sets Nov. 20 Hearing on Cash Collateral
REAL ESTATE ASSOCIATES: Has No Remaining Investment in Aristocrat
REAL ESTATE ASSOCIATES: Reports $2.4MM Net Income in 3rd Quarter
RESOLUTE FOREST: Moody's Raises Corp. Family Rating to 'Ba3'
RG STEEL: Selling Beech Bottom Assets to State Route for $4.4-Mil.
RG STEEL: Notice of Transfer of Claim Entered Nov. 2
RG STEEL: Terminates CBA With Truck Drivers Local No. 541
ROTHSTEIN ROSENFELDT: Dan Marino Foundation Free From Suit
ROYAL CARIBBEAN: Moody's Rates $500MM Sr. Unsecured Notes 'Ba1'
ROYAL CARIBBEAN: S&P Gives 'BB' Rating on $500M Senior Notes
SANTEON GROUP: Reports $150,700 Net Income in Third Quarter
SBMC HEALTHCARE: Can Incur DIP Financing of Up to $2.5 Million
SKINNY NUTRITIONAL: Trim Capital Discloses 11.1% Equity Stake
SMITH CREEK: Court Dismisses Chapter 11 Case
SOMAXON PHARMACEUTICALS: Had $4.5-Mil. Net Loss in Third Quarter
SOUTHERN AIR: Approved to Pay Critical Vendors' Prepetition Claims
SOUTHERN AIR: Weil Gotshal Approved as Bankruptcy Counsel
SOUTHERN AIR: Young Conaway Approved as Bankruptcy Co-counsel
SOUTHERN AIR: Zolfo Cooper Approved as Bankruptcy Consultant
SOUTHERN OAKS: Plan Outline Hearing Continued Until Nov. 27
SOUTHERN OAKS: Hearing Striken on Interbank's Motion for Trustee
SPORTS AUTHORITY: S&P Rates $630MM Sr. Secured Term Loan 'B-'
SUN RIVER: St. George Discloses 7.3% Equity Stake
SUNRISE REAL: Amends 2011 Form 10-K for Accounting Errors
T3 MOTION: Gets Delisting Notice from NYSE; Plans to Appeal
TARGETED MEDICAL: AFH Holding Discloses 9.5% Equity Stake
TITAN INT'L: Mood's Raises CFR/PDR to 'B1'; Outlook Stable
TRAVELPORT HOLDINGS: Incurs $39 Million Net Loss in Third Quarter
TXU CORP: Bank Debt Trades at 33% Off in Secondary Market
TRIBUNE CO: Bank Debt Trades at 24% Off in Secondary Market
VERTIS HOLDINGS: Has Final Loan and Sale Procedure Approval
VERTIS HOLDINGS: Taps Andrew Hede as Chief Restructuring Officer
VERTIS HOLDINGS: U.S. Trustee Forms 7-Member Creditors Committee
VIASPACE INC: Director Swaps Debt into 27.1-Mil. Common Stock
VITRO SAB: Mexico Didn't Pay for Brief, Bondholders Say
W.R. GRACE: Proposes Cash-Settled Collar Agreement
W.R. GRACE: BNSF Dismisses Civil Suit vs. Grace, Arrowood
W.R. GRACE: EPA Concludes Cleanup of Massachusetts Property
W.R. GRACE: Has $75.5 Million Profit in Third Quarter
WALL STREET: Voluntary Chapter 11 Case Summary
WASHINGTON MUTUAL: Makes Additional $88MM Creditor Distribution
WATERLOO RESTAURANT: Court OKs Conversion of Case to Chapter 7
WESTMORELAND COAL: S&P Raises CCR to 'B-' on Improved Liquidity
YRC WORLDWIDE: Reports $3 Million Net Income in Third Quarter
ZOGENIX INC: Inks Supply Agreement with Alkermes for Zohydro ER
* Argentina Can't Escape Payment, U.S. Appellate Court Rules
* Supreme Court to Decide Circuit Split on Fraud Discharge
* Mintz Levin's Brankruptcy Group Top-Listed in Massachusetts
* Keating Muething Gets Recognition in "Best Law Firms" Rankings
* Michael Jerbich Joins A&G Realty as Partner
* Robert Musur Joins Great American Group as Managing Director
* Large Companies With Insolvent Balance Sheets
*********
1220 SOUTH: Creditors Have Until Dec. 20 to File Proofs of Claim
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
established Dec. 20, 2012, as the last day for individuals or
entities to file proofs of claim against 1220 South Ocean
Boulevard, LLC.
The Debtor is required to file a Chapter 11 plan and explanatory
disclosure statement by Jan. 21, 2013.
About 1220 South Ocean
1220 South Ocean Boulevard, LLC, filed a Chapter 11 petition
(Bankr. S.D. Fla. Case No. 12-32609) in its home-town in West Palm
Beach, Florida. The Debtor disclosed $74 million in total assets
and $41.5 million in liabilities as of Sept. 7, 2012.
According to http://1220southocean.com/,1220 South Ocean is a
French-inspired waterfront estate homes and resort located in Palm
Beach. Owned by real estate developer Dan Swanson, president of
Addison Development, 1220 South Ocean sits on 2.5 private and
secure acres of land, has 20,000 square feet of living plus an
additional 7,000 square feet of loggias, garages & guest house.
The resort is located four miles to Palm Beach International
Airport. Mr. Swanson other developments include the Phipps
Estates in Palm Beach and Addison Estates at the Boca Hotel.
Judge Erik P. Kimball oversees the case. Kenneth S. Rappaport,
Esq., at Rappaport Osbourne & Rappaport, in Boca Raton, Florida,
serves as counsel to the Debtor.
261 EAST: Plan Filing Deadline Extended to Jan. 20
--------------------------------------------------
261 East 78 Realty Corp. sought and obtained a 90-day extension
until Jan. 20, 2012, of the deadline to file its Chapter 11 plan
and disclosure statement.
The Debtor's Chapter 11 filing was precipitated by the
commencement of foreclosure proceedings on the Debtor's property.
The Debtor intends to utilize the Chapter 11 process to
restructure or refinance its disputed secured debt in order to
complete the construction of the premises and rent all available
units.
261 East previously obtained approval of a stipulation with
MB Financial Bank, N.A. for the Debtor's use of the bank's cash
collateral from July 1 to Sept. 30, 2012. MB Financial asserts
that it is owed $17.7 million secured by perfected first priority
mortgage and liens affecting substantially all of the Debtor's
assets. The stipulation noted that the Debtor disputes MB's
standing as a secured creditor and has commenced an adversary
proceeding to challenge the validity of MB's liens.
In seeking exclusivity extension, the Debtor said that it and MB
Financial Bank have completed their discovery in the adversary
proceeding, and all motion papers and opposing papers have been
submitted to the Court.
As MB Financial is, by far, the Debtor's largest creditor, a plan
of reorganization cannot be proposed until a determination is made
with regard to MB Financial's standing. If it is determined that
MB Financial has standing, then the plan will have one look; if no
standing, then it will be completely different. The determination
of this issue will impact how other creditors are treated in the
plan. Once the adversary proceeding is decided (and assuming no
appeals), the Debtor would still require a few weeks to put
together a plan of reorganization.
About 261 East
261 East 78 Realty Corp. owns real property located at 261 East
78th Street, in New York. The premises consist of seven
commercial units, three of which are currently occupied. 261 East
78 Realty filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case
No. 11-15624) on Dec. 6, 2011. The case was assigned to Judge
Robert E. Gerber. Shaked & Posner serves as the Debtor's counsel.
The Chapter 11 filing was precipitated by the commencement of
foreclosure proceedings on the premises. The Debtor scheduled
$20.2 million in assets and $18.8 million in liabilities. The
petition was signed by Lee Moncho, president.
313 GROUP: Moody's Assigns 'B2' CFR; Outlook Stable
---------------------------------------------------
Moody's Investors Service has assigned a B2 Corporate Family
Rating ("CFR") to 313 Group Inc. (dba "Vivint"). Concurrently,
Moody's assigned a B1 rating to $925 million of new senior secured
notes and a Caa1 rating to $380 million of new senior unsecured
notes. This is a first time rating for Vivint. The ratings outlook
is stable.
Proceeds from the notes, along with $10 million drawn on a new
$200 million revolver (unrated) and $710 million of equity, will
be used to finance the $1.9 billion acquisition of Vivint by The
Blackstone Group, plus related fees and expenses. The management
team will maintain an ownership stake.
The following ratings (and Loss Given Default assessments) were
assigned:
- Corporate Family Rating, B2
- Probability of Default Rating, B2
- Proposed $925 million senior secured notes due 2019, B1
(LGD3, 41%)
- Proposed $380 million senior unsecured notes due 2020, Caa1
(LGD5, 88%)
These ratings are based on a proposed new financing for Vivint and
are subject to Moody's review of final documentation. Upon closing
of the transaction, 313 Group Inc. will be merged with and into
APX Group, Inc.
Ratings Rationale
The B2 CFR reflects pro forma debt of approximately 38 times
recurring monthly revenue ("RMR") and a high level of annual
spending necessary to replace subscriber revenue lost to
attrition. If Vivint were to maintain a flat RMR base ("steady
state"), Moody's estimates that levered steady state free cash
flow to debt would be at least 5% in 2013. However, because of
management's strategy to significantly grow net subscribers in
2013, Moody's expects free cash flow to be materially negative.
Vivint intends to partially fund growth through the proposed $200
million revolver, but the rating agency anticipates at least $75
million of revolver availability over the next four quarters and a
de-leveraging of debt / RMR to about 34 times by the end of 2013.
Vivint's rating is supported by adequate liquidity, the steady and
predictable revenue streams provided by subscriber contracts, and
its position as one of the largest players in the fragmented alarm
monitoring industry. Although Vivint's subscriber base is smaller
than some competitors, it maintains an industry-leading average
RMR per subscriber ($50.67 in the twelve months ended 9/30/12)
because of the high mix of customers who subscribe to home
automation services.
"We believe Vivint's distinctive technology and highly motivated
direct-to-home sales force have enabled rapid growth of high
margin revenues", stated Moody's analyst Suzanne Wingo. However,
because of Vivint's relatively short operating life, it remains to
be seen whether attrition rates will ultimately stabilize near
industry averages. The ratings are further constrained by
intensifying competition as cable and telecommunication providers
are entering the market in an attempt to sell new services to
existing residential customers. Secular changes in technology and
consumer preferences provide a longer-term threat.
The stable outlook reflects Moody's expectation that Vivint will
maintain an adequate liquidity profile over the next 12-18 months,
despite using the revolver to partly fund double-digit revenue
growth. While not expected in the near term, the ratings could be
upgraded if Vivint maintains a good liquidity profile, free cash
flow (before growth spending) to debt is sustained above 10%, and
pool attrition rates are maintained at or below industry averages.
Conversely, the ratings could be downgraded if creation cost
multiples increase materially, debt / RMR approaches 40 times,
liquidity deteriorates, or free cash flow (before growth spending)
moves toward breakeven.
The principal methodology used in rating Vivint was the Global
Business & Consumer Service Industry Rating 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.
Vivint provides alarm monitoring and home automation services to
approximately 680 thousand residential customers in North America.
In the twelve months ended September 30, 2012, Vivint reported
revenues of $428 million.
38 STUDIOS: RI Sues Banks, Ex-Baseball Star Over $75MM in Loans
---------------------------------------------------------------
Pete Brush at Bankruptcy Law360 reports that Rhode Island sued
former MLB ace Curt Schilling, Wells Fargo Securities LLC and
Barclays Capital PLC on Thursday, claiming they misled the state
about risks associated with $75 million in taxpayer loan financing
for Mr. Schilling's now-bankrupt video game venture.
The suit does not target Mr. Schilling's 38 Studios LLC company as
a defendant, but notes that the venture played a central role in
the matter.
38 Studios LLC, a video-game developer founded by former Boston
Red Sox pitcher Curt Schilling, filed for liquidation on June 8,
2012, without attempting to reorganize. Although based in
Providence, Rhode Island, the company filed the Chapter 7 petition
in Delaware (Case No. 12-11743).
4KIDS ENTERTAINMENT: Judge Clears to Send Plan for Creditor Vote
----------------------------------------------------------------
Rachel Feintzeig at Dow Jones' DBR Small Cap reports that 4Kids
Entertainment Inc. won clearance to send its Chapter 11 plan,
which proposes to pay unsecured creditors in full, out for a vote.
About 4Kids Entertainment
New York-based 4Kids Entertainment, Inc., dba 4Kids, is an
entertainment and media company specializing in the youth oriented
market, with operations in these business segments: (i) licensing,
(ii) advertising and media broadcast, and (iii) television and
film production/distribution. The parent entity, 4Kids
Entertainment, was organized as a New York corporation in 1970.
4Kids filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code to protect its most valuable asset -- its rights
under an exclusive license relating to the popular Yu-Gi-Oh!
series of animated television programs -- from efforts by the
licensor, a consortium of Japanese companies, to terminate
the license and force 4Kids out of business.
4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the
Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC,
is the Debtors' claims and notice agent. BDO Capital Advisors,
LLC, is the financial advisor and investment banker. EisnerAmper
LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids
Entertainment disclosed $78,397,971 in assets and $86,515,395 in
liabilities as of the Chapter 11 filing.
Hahn & Hessen LLP serves as counsel to the Official Committee of
Unsecured Creditors. Epiq Bankruptcy Solutions LLC serves as its
information agent for the Committee.
The Consortium consists of TV Tokyo Corporation, which owns and
operates a television station in Japan; ASATSU-DK Inc., a Japanese
advertising company; and Nihon Ad Systems, ADK's wholly owned
subsidiary. The Consortium is represented by Kyle C. Bisceglie,
Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason
Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP,
in New York.
In January 2012, the bankruptcy judge ruled in favor of 4Kids,
deciding that the Yu-Gi-Oh! property license agreement between the
Debtor and the licensor was not effectively terminated prior to
the bankruptcy filing. Following the ruling, 4Kids entered into a
settlement where it would receive $8 million to end the dispute
over its valuable Yu-Gi-Oh! Property.
4KIDS ENTERTAINMENT: Full-Payment Plan Hearing Set for Dec. 13
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that 4Kids Entertainment Inc. scheduled a Dec. 13
confirmation hearing for approval of the liquidating Chapter 11
plan.
According to the report, the U.S. bankruptcy judge in New York
signed an order Nov. 1 approving disclosure materials so creditors
can begin voting. The plan makes good on a promise to emerge from
Chapter 11 by paying creditors in full and providing a
distribution to shareholders.
The report relates the disclosure statement explaining the
liquidating Chapter 11 plan filed in early October shows $6.25
million in unsecured claims being paid in full with interest.
Secured creditors were already fully paid. After expenses of
bankruptcy are paid, equity holders will receive 69 cents a share
on each of the about 13.7 million shares outstanding, according to
the disclosure statement.
The stock closed Nov. 1 at 49 cents, down 1 cent in over-the-
counter trading.
About 4Kids Entertainment
New York-based 4Kids Entertainment, Inc., dba 4Kids, is an
entertainment and media company specializing in the youth oriented
market, with operations in these business segments: (i) licensing,
(ii) advertising and media broadcast, and (iii) television and
film production/distribution. The parent entity, 4Kids
Entertainment, was organized as a New York corporation in 1970.
4Kids filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code to protect its most valuable asset -- its rights
under an exclusive license relating to the popular Yu-Gi-Oh!
series of animated television programs -- from efforts by the
licensor, a consortium of Japanese companies, to terminate
the license and force 4Kids out of business.
4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the
Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC,
is the Debtors' claims and notice agent. BDO Capital Advisors,
LLC, is the financial advisor and investment banker. EisnerAmper
LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids
Entertainment disclosed $78,397,971 in assets and $86,515,395 in
liabilities as of the Chapter 11 filing.
Hahn & Hessen LLP serves as counsel to the Official Committee of
Unsecured Creditors. Epiq Bankruptcy Solutions LLC serves as its
information agent for the Committee.
The Consortium consists of TV Tokyo Corporation, which owns and
operates a television station in Japan; ASATSU-DK Inc., a Japanese
advertising company; and Nihon Ad Systems, ADK's wholly owned
subsidiary. The Consortium is represented by Kyle C. Bisceglie,
Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason
Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP,
in New York.
In January 2012, the bankruptcy judge ruled in favor of 4Kids,
deciding that the Yu-Gi-Oh! property license agreement between the
Debtor and the licensor was not effectively terminated prior to
the bankruptcy filing. Following the ruling, 4Kids entered into a
settlement where it would receive $8 million to end the dispute
over its valuable Yu-Gi-Oh! Property.
In June, the Debtor obtained approval to sell the business for
$15 million to two buyers. An affiliate of Tokyo-based Konami
Corp. is purchasing the licenses for the Yu-Gi-Oh! animated
television programs. Kidsco Media Venture LLC, affiliated with
Saban Capital Group Inc., is buying the programming agreement with
the CW Network LLC. The eventual sale represented a $3.2 million
improvement over the $11.8 million bid Saban made for all the
assets at auction.
4KIDS ENTERTAINMENT: Inks General Release with Director
-------------------------------------------------------
4Kids Entertainment, Inc., 4Kids Entertainment Licensing, Inc.,
and Samuel R. Newborn, a member of the Board of Directors,
Executive Vice President and General Counsel of the Company,
entered into a Settlement Agreement and General Release, pursuant
to which Mr. Newborn's employment with 4Kids Entertainment
Licensing was terminated without cause by agreement of the parties
effective as of Oct. 31, 2012. The Settlement Agreement
compromises all claims for severance and other benefits due
Mr. Newborn under the terms of the Severance Agreement dated Oct.
14, 2009, by and between the Company, Employer and Mr. Newborn, as
amended. Mr. Newborn will also render certain post-termination
services to the Company. The Settlement Agreement is subject to
the approval of United States Bankruptcy Court for the Southern
District of New York.
Mr. Newborn will receive an allowed unsecured claim in the sum of
$925,000, of which (a) $600,000 will be payable on the effective
date of the Company's proposed plan of reorganization filed with
the Bankruptcy Court on Oct. 5, 2012, and (b) $325,000 will be
payable upon the earlier of (x) Mr. Newborn's completion of the
work assignments specified in the Settlement Agreement and (y)
March 1, 2013. In addition, in exchange for the specified post-
termination services to be rendered during the period from Nov. 1,
2012, through Feb. 28, 2013, Mr. Newborn will be compensated at
the rate of $25,000 per month. Thereafter, Mr. Newborn will
render those legal services as may be agreed from time to time by
him and the Company. Mr. Newborn will also continue to receive
certain health benefits. Under the terms of the Settlement
Agreement, Mr. Newborn will provide a release of certain claims
and liabilities in favor of the Company and the Employer relating
to his employment or the pending chapter 11 cases. Mr. Newborn
will also continue to be bound by certain confidentiality
obligations in favor of the Company and the Employer as provided
in the Settlement Agreement.
About 4Kids Entertainment
New York-based 4Kids Entertainment, Inc., dba 4Kids, is an
entertainment and media company specializing in the youth oriented
market, with operations in these business segments: (i) licensing,
(ii) advertising and media broadcast, and (iii) television and
film production/distribution. The parent entity, 4Kids
Entertainment, was organized as a New York corporation in 1970.
4Kids filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code to protect its most valuable asset -- its rights
under an exclusive license relating to the popular Yu-Gi-Oh!
series of animated television programs -- from efforts by the
licensor, a consortium of Japanese companies, to terminate
the license and force 4Kids out of business.
4Kids and affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y.
Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the
Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC,
is the Debtors' claims and notice agent. BDO Capital Advisors,
LLC, is the financial advisor and investment banker. EisnerAmper
LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids
Entertainment disclosed $78,397,971 in assets and $86,515,395 in
liabilities as of the Chapter 11 filing.
Hahn & Hessen LLP serves as counsel to the Official Committee of
Unsecured Creditors. Epiq Bankruptcy Solutions LLC serves as its
information agent for the Committee.
The Consortium consists of TV Tokyo Corporation, which owns and
operates a television station in Japan; ASATSU-DK Inc., a Japanese
advertising company; and Nihon Ad Systems, ADK's wholly owned
subsidiary. The Consortium is represented by Kyle C. Bisceglie,
Esq., Michael S. Fox, Esq., Ellen V. Holloman, Esq., and Mason
Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP,
in New York.
In January 2012, the bankruptcy judge ruled in favor of 4Kids,
deciding that the Yu-Gi-Oh! property license agreement between the
Debtor and the licensor was not effectively terminated prior to
the bankruptcy filing. Following the ruling, 4Kids entered into a
settlement where it would receive $8 million to end the dispute
over its valuable Yu-Gi-Oh! Property.
A123 SYSTEMS: Wanxiang Seeks to Delay Sale by About One Month
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that now that Wanxiang Group Corp. has replaced Johnson
Controls Inc. as the lender for A123 Systems Inc., the Chinese
auto-parts maker also wants to replace JCI as the stalking horse
bidder to make the first bid at auction.
According to the report, A123 filed for Chapter 11 reorganization
last month having already negotiated a contract for JCI to buy the
business for $125 million in cash, plus the cost of curing
defaults on contracts. If given time to negotiate, Wanxiang says
it will buy more assets than JCI and at a higher price.
The hearing for approval of sale procedures originally was
scheduled for Oct. 30 and was reset to Nov. 5.
Wanxiang wants the sale on a slower schedule, with bids by Dec. 17
and an auction on Dec. 21. A123 wants the sale about a month
sooner.
There is already a hearing on Nov. 5 to approve a $50 million loan
from Wanxiang, which made a $22.5 million loan before bankruptcy.
There also were pre-bankruptcy discussions for Wanxiang to buy the
business, according to court filings.
In an objection filed in Delaware bankruptcy court, Wanxiang's
U.S. subsidiary said it not only can top Milwaukee-based Johnson
Controls' $125 million offer for A123's electric car battery
business, it is interested in some of the debtors' other assets as
well, Bankruptcy Law360 relates.
The convertible subordinated notes last traded Nov. 1 for 45.25
cents on the dollar according to Trace, the bond-price reporting
system of the Financial Industry Regulatory Authority. The notes
have more than doubled the 21.25 cent price where they traded the
day of bankruptcy.
About A123 Systems
Based in Waltham, Massachusetts, A123 Systems Inc. designs,
develops, manufactures and sells advanced rechargeable lithium-ion
batteries and battery systems and provides research and
development services to government agencies and commercial
customers.
A123 is the recipient of a $249 million federal grant from the
Obama administration. Pre-bankruptcy, A123 had an agreement to
sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp.
U.S. lawmakers opposed the deal over concerns on the transfer of
American taxpayer dollars and technology to China.
A123 didn't make a $2.7 million payment due Oct. 15 on $143.75
million in 3.75% convertible subordinated notes due 2016.
A123 and U.S. affiliates, A123 Securities Corporation and Grid
Storage Holdings LLC, sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012,
with a deal to sell its auto-business assets to Johnson Controls
Inc. The deal with JCI is valued at $125 million, and subject to
higher offers at a bankruptcy auction.
A123 disclosed assets of $459.8 million and liabilities totaling
$376 million. Debt includes $143.8 million on 3.75% convertible
subordinated notes. Other liabilities include $22.5 million on a
bridge loan owing to Wanziang. About $33 million is owed to trade
suppliers.
The Hon. Kevin J. Carey presides over the case. Lawyers at
Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as
the Debtors' counsel. Lazard Freres & Co. LLC acts as the
Debtors' financial advisors, while Alvarez & Marsal serves as
restructuring advisors. Logan & Company Inc. serves as the
Debtors' claims and noticing agent. Wanxiang America Corporation
and Wanxiang Clean Energy USA Corp. are represented in the case by
lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin
LLP.
A123 SYSTEMS: Could Face Up to $115MM in Fisker Rejection Claims
----------------------------------------------------------------
Patrick Fitzgerald, writing for Dow Jones Newswires, reported that
the lawyer for electric car maker Fisker Automotive Inc. said in
court filings last week that if A123 Systems Inc. succeeds in
rejecting the parties' supply contract, A123 is on the hook for a
contract rejection damage claim in excess of $63 million as well
as the $52 million claim tied to defective A123 batteries.
Fisker's lawyers also said the claim related to the defective
batteries may be entitled to administrative status, bumping Fisker
to the front of the line of creditors waiting to be paid following
A123's sale.
Fisker is a Southern California auto maker of the $100,000 Karma
sedan, which is powered by battery packs made exclusively by A123.
According to the report, Fisker said there is no other alternative
supplier it can go to "in the near term" to replace about 2,000
defective A123 batteries it purchased.
Earlier this year, A123 agreed to recall some 2,600 defective
battery packs it had supplied to Fisker. The report noted A123
said it expected to spend more than $50 million to replace the
batteries.
According to the report, Fisker's lawyer said the real reason A123
wants to reject their deal is to give stalking-horse bidder
Johnson Controls Inc. leverage over Fisker. According to the
lawyer, "Specifically, as both A123 and JCI know, Fisker has no
near-term alternative supplier of the A123 Batteries used for the
Karma program in the amounts that Fisker requires. . . .
Consequently, the rejection of the Fisker contract as of the
petition date appears to be solely for the purpose of providing
JCI with significant negotiating leverage."
According to the report, a spokeswoman for Johnson Controls said
the company "is not involved with the rejection of any contracts"
during A123's bankruptcy case.
The report said representatives for Fisker and A123 Systems didn't
respond to requests for comment.
Bankruptcy Judge Kevin Carey will decide the issue at a hearing
set for Nov. 8 in Wilmington, Delaware.
About A123 Systems
Based in Waltham, Massachusetts, A123 Systems Inc. designs,
develops, manufactures and sells advanced rechargeable lithium-ion
batteries and battery systems and provides research and
development services to government agencies and commercial
customers.
A123 is the recipient of a $249 million federal grant from the
Obama administration. Pre-bankruptcy, A123 had an agreement to
sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp.
U.S. lawmakers opposed the deal over concerns on the transfer of
American taxpayer dollars and technology to China.
A123 didn't make a $2.7 million payment due Oct. 15 on $143.75
million in 3.75% convertible subordinated notes due 2016.
A123 and U.S. affiliates, A123 Securities Corporation and Grid
Storage Holdings LLC, sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012,
with a deal to sell its auto-business assets to Johnson Controls
Inc. The deal with JCI is valued at $125 million, and subject to
higher offers at a bankruptcy auction.
A123 disclosed assets of $459.8 million and liabilities totaling
$376 million. Debt includes $143.8 million on 3.75% convertible
subordinated notes. Other liabilities include $22.5 million on a
bridge loan owing to Wanziang. About $33 million is owed to trade
suppliers.
The Hon. Kevin J. Carey presides over the case. Lawyers at
Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as
the Debtors' counsel. Lazard Freres & Co. LLC acts as the
Debtors' financial advisors, while Alvarez & Marsal serves as
restructuring advisors. Logan & Company Inc. serves as the
Debtors' claims and noticing agent. Wanxiang America Corporation
and Wanxiang Clean Energy USA Corp. are represented in the case by
lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin
LLP.
ADAMS PRODUCE: CRO Approved to Institute and Prosecute All Claims
-----------------------------------------------------------------
The Hon. Tamara O. Mitchell of the U.S. Bankruptcy Court for the
Northern District of Alabama entered an order clarifying a court
order approving the employment of Deloitte Financial Advisory
Services LLP as restructuring advisors and designating Thomas S.
O'Donoghue, Jr. as chief restructuring officer for Adams Produce
Company, LLC, et al.
The Court authorized the Debtor's employment of a CRO and ordered
that:
-- implicit in the authority granted to the CRO by the
retention order is the CRO's authority to institute,
prosecute, defend, and settle (subject to Bankruptcy Court
approval) any and all claims arising out of or in any manner
related to the Debtors' businesses and operations; and
-- the retention order is clarified to explicitly grant all the
authority to the CRO as of the date of the retention order.
About Adams Produce
Adams Produce Company, LLC, filed a Chapter 11 petition (Bankr.
N.D. Ala. Case No. 12-02036) on April 27, 2012, in its home-town
in Birmingham, Alabama.
Privately held Adams Produce is a distributor of fresh fruits and
vegetables to restaurants, government and hospitality
establishments across the Southeastern United States. With over
400 employees, Adams Produce services the states of Alabama,
Arkansas, Florida, Georgia, Mississippi, and Tennessee. The
company was founded by Edwin Calvin Adams in 1903.
Adams Produce disclosed 19,545,473 in assets and $41,569,039 and
liabilities as of the Chapter 11 filing. A debtor-affiliate,
Adams Clinton Business Park, LLC, estimated up to $10 million in
assets and liabilities.
The Debtors owe PNC Bank, National Association, $750,000 under
a term loan, $1.35 million under a real estate loan, and
$3.4 million under a revolver. The Debtors are also indebted
$2 million under promissory notes. Adams owes $4.4 million in
accounts payable to trade and other creditors, and $10.2 million
to agricultural commodity suppliers.
The Debtors have tapped Burr & Forman as attorneys; CRG Partners
Group LLC as financial advisor; and CRG's Thomas S. O'Donoghue,
Jr. as chief restructuring officer; and Donlin Recano & Company
Inc. as the claims and notice agent.
Brian R. Walding, Esq., at Walding LLC, in Birmingham, Alabama,
represents the Ad Hoc Committee of Non-Insider Employees as
counsel.
The Bankruptcy Administrator said that it is not feasible to form
a committee of unsecured creditors in the Debtor's case in view of
the fact that an insufficient number of unsecured creditors were
willing to serve.
AEROGROW INTERNATIONAL: Inks New Amazon.com Distribution Pact
-------------------------------------------------------------
AeroGrow International, Inc., has reached a new agreement with
Amazon.com, the world's largest online retailer, to carry its
AeroGarden line of indoor gardening products.
"We had a very successful partnership with Amazon in the past that
generated millions in sales annually by combining our unique
products with their best-in-class direct sales engine," said Mike
Wolfe, President and CEO of AeroGrow. "We are looking forward to
once again leveraging Amazon's broad reach and marketing prowess
to drive sales for both our companies."
AeroGrow also announced an expansion in its brick and mortar
retail sales relationship with Canadian Tire Corporation, Canada's
largest mass retailer. Canadian Tire is now including AeroGardens
as part of its holiday promotional efforts and will feature
AeroGarden promotions in a number of its sales circulars during
the holiday selling season. These special offers will be
supported by an aggressive program of nationwide consumer
television advertising. Canadian Tire is one of Canada's largest
mass retailers, with 485 department stores throughout Canada.
As a result of the expanded online distribution and increased
retail sales activity, AeroGrow now anticipates that the December
quarter will mark its first year-over-year quarterly increase in
sales to the retail channel since 2008.
"Our sales into the retail channel are growing once again,"
commented Mr. Wolfe. "Because of the difficult economic realities
in 2008, we had to deemphasize the retail channel in order to
focus on our operations and restoring our profitability. Those
efforts were successful, allowing us to announce our first annual
EBITDA profit this past June. Now it is time to turn our
attention once again to driving profitable growth. We believe
that offering our products through retailers that complement our
existing distribution, like Amazon and Canadian Tire, will not
only enhance our top-line growth, but will increase the visibility
of our product line and brand, and improve our overall
profitability."
For more information on the AeroGarden or AeroGrow's full line of
indoor garden products, please visit http://www.aerogarden.com/
Follow the Company on Twitter at @aerogarden and Facebook at
http://www.facebook.com/aerogarden
About AeroGrow
Boulder, Colo.-based AeroGrow International, Inc., is a developer,
marketer, direct-seller, and wholesaler of advanced indoor garden
systems designed for consumer use and priced to appeal to the
gardening, cooking, and healthy eating, and home and office decor
markets.
The Company's balance sheet at June 30, 2012, showed $3.86 million
in total assets, $3.63 million in total liabilities and $229,483
in total stockholders' equity.
The Company reported a net loss of $3.55 million for the year
ended March 31, 2012, a net loss of $7.92 million for the year
ended March 31, 2011, and a net loss of $6.33 million for the year
ended March 31, 2010.
AK STEEL: S&P Puts 'B+' CCR on Watch, Cites Expected Performance
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'B+' corporate credit rating, on West Chester, Ohio-based AK
Steel Holding Corp. on CreditWatch with negative implications.
"The CreditWatch negative listing means we could lower or affirm
the rating after we complete our analysis," S&P said.
"The CreditWatch listing reflects our view that AK Steel's
performance is likely to underperform our previous expectations in
2012 and 2013," said credit analyst Marie Shmaruk. "We had
expected the company's leverage to approach 5x in the coming year
and for liquidity to remain strong. Although operating conditions
for domestic steel producers have been gradually improving, demand
and pricing remains below recession levels and, in our view, the
company's results are unlikely to improve significantly until weak
global conditions moderate and domestic nonresidential
construction recovers."
"We expect to resolve the CreditWatch listing after discussing
with the company's management, its expectations for operating
performance and raw material costs and its funding needs for the
next couple of years," S&P said.
ALLY FINANCIAL: Repays $2.9 Billion Debt Under FDIC Program
-----------------------------------------------------------
Andrew R. Johnson, writing for The Wall Street Journal, reported
that Ally Financial Inc., which is 74% owned by the U.S.
government, said last week Wednesday it repaid $2.9 billion of
debt it issued under the Federal Deposit Insurance Corp.'s
Temporary Liquidity Guarantee Program. According to the report,
Ally's move leaves $4.5 billion of debt outstanding, which it
plans to repay in December.
According to the report, the FDIC declined to comment on
Wednesday. The TLGP program is set to expire at the end of the
year.
The report also noted that Ally said it may sell a $122 billion
portfolio of mortgage-servicing rights not included in the
bankruptcy of its mortgage subsidiary, Residential Capital.
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.
ALLY FINANCIAL: Reports $384 Million Net Income in Third Quarter
----------------------------------------------------------------
Ally Financial Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $384 million on $1.71 billion of total net revenue for the
three months ended Sept. 30, 2012, compared with a net loss of
$210 million on $1.16 billion of total net revenue for the same
period during the prior year.
The Company reported a net loss of $204 million on $5.27 billion
of total net revenue for the nine months ended Sept. 30, 2012,
compared with net income of $49 million on $4.48 billion of total
net revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $182.48
billion in total assets, $163.71 billion in total liabilities and
$18.76 billion in total equity.
"Ally's third quarter results demonstrated the strength of the
core fundamentals of the business," said Ally Chief Executive
Officer Michael A. Carpenter. "The U.S. auto finance franchise
continued to produce strong and consistent results despite a
highly competitive market, with earning assets up 21 percent and
net financing revenue up 22 percent from last year. In addition,
the insurance business had the highest level of written premiums
since 2008."
Carpenter continued, "Ally Bank again demonstrated the potential
of this leading franchise with retail deposits up 22 percent and
customer accounts up 24 percent year-over-year. The Bank was also
recognized as the Best Online Bank by MONEY Magazine."
"Ally has achieved significant momentum in its strategic plans,
and reached agreements to sell businesses that hold about half of
the approximately $30.6 billion in assets from its international
operations, with a pre-tax estimated $1.2 billion gain on sale.
Definitive agreements were reached for the Canadian operations and
Mexican insurance business in October, and we expect to identify
plans for the remaining operations in Europe and Latin America
this month," said Carpenter.
Carpenter concluded, "Also in October, Ally Bank announced it
began a process to evaluate strategic alternatives for its agency
MSR portfolio and mortgage business lending operation, which is
another step in its plan to effectively exit the agency mortgage
business. The steps we are taking, coupled with the strength of
the underlying auto finance and direct banking franchises, will
support Ally's plan to repay the remaining U.S. Treasury
investment and thrive going forward."
A copy of the Form 10-Q is available for free at:
http://is.gd/jluzhv
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.
* * *
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 REALTY: Creditor Looks to Dismiss Trust Case
-----------------------------------------------------
Katy Stech at Dow Jones' DBR Small Cap reports that chasing down
money owed in a 14-year-old legal dispute, Michigan real estate
investor David Clapper is trying to eject American Realty Trust
Inc. from bankruptcy court in Atlanta, arguing that the trust
company's Chapter 11 filing in August was another attempt to delay
paying Mr. Clapper and his businesses a $73 million judgment.
Las Vegas, Nevada-based American Realty Trust, Inc., filed for
Chapter 11 protection (Bankr. D. Nev. Case No. 12-10883) on
Jan. 26, 2012, estimating assets and debts of $10 million to
$50 million. The Debtor is a Single Asset Real Estate as defined
in 11 U.S.C. Sec. 101 (51B). Bankruptcy Judge Mike K. Nakagawa
presides over the case. The petition was signed by Steven A.
Shelley, vice president.
AMERICAN WEST: Judge Sends Plan Back to Drawing Boards
------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that American West Development Inc. hoped the judge would
quickly approve a reorganization plan in late May. The U.S.
Trustee raised objections, blocked the plan, and obliged American
West to file a new version.
According to the report, after a hearing in September, the
bankruptcy judge sided with the U.S. Trustee and ruled officially
last week that the plan violated the prohibition against releases
in favor of non-bankrupt third parties. He also concluded that
creditors weren't given notice of revisions to the plan before
they voted.
To remedy the defects, American West filed revised disclosure
materials and scheduled a Dec. 11 hearing for approval.
The original plan was negotiated with secured lenders owed $177.5
million.
The report notes that Nevada is under the umbrella of the U.S.
Court of Appeals in San Francisco, which has the most strict rules
in the country against so-called third party releases.
About American West
American West Development, Inc. -- fdba Castlebay 1, Inc., et al.
-- is a homebuilder in Las Vegas, Nevada, founded on July 31,
1984. Initially, AWDI was known as CKC Corporation, but later
changed its name.
AWDI filed for Chapter 11 bankruptcy protection (Bankr. D. Nev.
Case No. 12-12349) on March 1, 2012. Judge Mike K. Nakagawa
presides over the case. Brett A. Axelrod, Esq., and Micaela
Rustia Moore, Esq., at Fox Rothschild LLP, serve as AWDI's
bankruptcy counsel. Nathan A. Schultz, P.C., is AWDI's conflicts
counsel. AWDI hired Garden City Group as its claims and notice
agent. American West disclosed $55.39 million in assets and
$208.5 million in liabilities as of the Chapter 11 filing.
James L. Moore, as future claims representative in the Chapter 11
case of American West Development, Inc., tapped the law firm of
Field Law Ltd. as his counsel.
AMERICAN AIRLINES: Going to Supreme Court to Stop PSA Election
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that AMR Corp. is going to the U.S. Supreme Court in an
attempt to stop passenger-service agents from holding an election
to determine whether they will have a union at American Airlines
Inc.
According to the report, the bankrupt airline won a victory in
June when a federal district judge in Dallas ruled that the
National Mediation Board was improperly holding an election by
passenger-service agents because 50% hadn't shown a desire for
union representation. The NMB and the Communications Workers of
America appealed, contending only 35% was required.
The report relates that the U.S. Court of Appeals in New Orleans
sided with the workers on Oct. 3, ruling that the NMB was correct
in using a 35 percent threshold. AMR sought rehearing in the
appeals court and lost on Oct. 30.
AMR, the report discloses, said in an e-mailed statement that it
"intends to ask the courts for a stay, while we ask the U.S.
Supreme Court to review the case." The airline contends it's
"working to protect the rights of our employees, a significant
majority of whom did not support
a union election."
The Communications Workers said the NMB scheduled the vote to
begin Dec. 4 and continue through Jan. 15. The union said the
airline "spent nearly a year and millions of dollars trying to
block employees' democratic right to vote."
The report recounts that the circuit court said none of the
appellate judges favored holding another hearing. While seeking
Supreme Court review and a stay pending appeal, AMR said it will
cooperate with the NMB in preparing for the election.
The appeal is American Airlines Inc. v. National Mediation Board,
12-10680, U.S. Court of Appeals for the Fifth Circuit (New
Orleans).
About American Airlines
AMR Corp. and its subsidiaries including American Airlines, the
third largest airline in the United States, filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan
on Nov. 29, 2011, after failing to secure cost-cutting labor
agreements.
AMR, previously the world's largest airline prior to mergers by
other airlines, is the last of the so-called U.S. legacy airlines
to seek court protection from creditors.
American Airlines, American Eagle and the AmericanConnection
carrier serve 260 airports in more than 50 countries and
territories with, on average, more than 3,300 daily flights. The
combined network fleet numbers more than 900 aircraft.
The Company reported a net loss of $884 million on $18.02 billion
of total operating revenues for the nine months ended Sept. 30,
2011. AMR recorded a net loss of $471 million in the year 2010, a
net loss of $1.5 billion in 2009, and a net loss of $2.1 billion
in 2008.
AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion
in total assets, $29.55 billion in total liabilities, and a
$4.83 billion stockholders' deficit.
Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law
Group, Chartered, are on board as special counsel. Rothschild
Inc., is the financial advisor. Garden City Group Inc. is the
claims and notice agent.
Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and
Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
serve as counsel to the Official Committee of Unsecured Creditors
in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the
co-counsel for conflicts and other matters; Moelis & Company LLC
is the investment banker, and Mesirow Financial Consulting, LLC,
is the financial advisor.
Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES
BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding
undertaken by AMR Corp. and its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000).
ARCAPITA BANK: Lands $150MM Loan From Fortress With Better Terms
----------------------------------------------------------------
Arcapital Bank B.S.C.(c), et al., informed the U.S. Bankruptcy
Court for the Southern District of New York that since the Oct. 9
initial hearing on the Debtors' motion to enter into a Commitment
Letter with Silver Point Finance, LLC, the Debtors and the
Official Committee of Unsecured Creditors have negotiated with the
initial lender and permitted third parties to submit and to
negotiate with the Debtors regarding competing debtor-in-
possession financing proposals.
According to papers filed with the Court, after extensive, multi-
faceted negotiations, the Debtors have received a binding
commitment from Fortress Credit Corp. to provide $100 million in
Shari'ah compliant financing, which, subject to confirmatory due
diligence, may be upsized to $150 million. The Debtors relate
that the Fortress Commitment is on substantially better terms than
those offered by any other potential lender.
In a Nov. 1, 2012 supplement to their original motion, the Debtors
ask the Court for authorization to immediately enter into the
Fortress Commitment Letter.
The Debtors point out that the Fortress deal contains several
material advantages over the Silver Point financing. They point
out that the Fortress deal:
(i) does not condition the initial $100 million of the Fortress
commitment on due diligence or internal credit committee
approval,
(ii) provides for a lower commitment fee, a lower profit and a
substantially lower unused line fee, and
(iii) provides that (a) the Debtors may actively seek out
alternative proposals, and (b) Fortress will have the right
to match the terms of any alternative transaction, with no
termination fee becoming payable unless the Debtors fail to
provide Fortress an opportunity to match.
The Debtors also point out:
-- The scope of what constitutes a "Material Adverse Change" has
been narrowed, reducing uncertainty regarding the Debtors'
ability to access funds under the Fortress Facility.
-- Fortress can terminate the deal only under a more limited set
of circumstances; for example, the Debtors revising the
budget in such a way that the Debtors will not borrow the
full amount of the Fortress Facility does not allow Fortress
to terminate the financing commitment.
-- The Debtors have a contractual right to notify Fortress to
cease performing confirmatory due diligence in connection
with the additional commitment of $50 million (which would
otherwise increase the Fortress Commitment from $100 million
to $150 million), potentially reducing the profit and fees to
be paid by the estates.
The hearing on the motion will be held on Nov. 5, 2012, at 2:00
p.m.
A copy of the Fortress Commitment Letter is available at:
http://bankrupt.com/misc/arcapita.doc610.pdf
Better Deal
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Arcapita Bank BSC is an example of how delaying
approval of a loan can sometimes result in a better deal for the
bankrupt.
The report recounts that the bankruptcy judge slowed the loan-
approval process on objection from the creditors' committee. The
Fortress loan can be increased to $150 million. There will be a
hearing in bankruptcy court this afternoon to consider the new
loan proposal.
The Fortress loan includes a lower commitment fee and a
"substantially lower unused line fee," Arcapita said in a court
filing. Arcapita has the right to accept a better offer from
another lender while paying Fortress no termination fee, so long
as Fortress has the right to match the offer. Fortress is
required to make the loan without performing any more financial
investigation. The loan will comply with Islamic Shariah financing
regulations.
The report notes that to retain the exclusive right to propose a
Chapter 11 plan for the time being, an agreement with the
committee required Arcapita to locate a new investor who deposits
$250 million in cash or letter of credit by Nov. 1. Absent the
deposit, the agreement requires Arcapita to abandon the idea of
reorganization and negotiate exclusively with the committee on a
plan entailing "an orderly wind-down of their businesses and
assets." So-called exclusivity ends Dec. 15, although Arcapita
retains the exclusive right to solicit acceptances until Feb. 12.
That deadline can be extended.
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.
AS SEEN ON TV: Enters Into Merger Agreement With eDiets
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As Seen On TV, Inc., entered into an Agreement and Plan of Merger
with eDiets Acquisition Company ("Merger Sub"), eDiets.com, Inc.,
and certain other individuals. Pursuant to the Merger Agreement,
Merger Sub will merge with and into eDiets.com, and eDiets.com
will continue as the surviving corporation and a wholly-owned
subsidiary of the Company.
The total merger consideration to be issued will be 19,077,252
shares of the Company's common stock. Based on the 15,060,514
shares of eDiets.com's common stock that eDiets.com contemplates
will be issued and outstanding at the time of the Merger, each
share of eDiets.com's common stock would convert into 1.2667
shares of the Company's common stock. However, the number of
shares of Company's common stock issuable in the Merger is fixed.
The Merger Agreement contains representations, warranties and
covenants of the parties customary for a transaction of this type.
The Merger Agreement requires that the Company lend eDiets.com up
to $1.5 million upon completion of the Company's next financing
transaction. The Loan will be on terms substantially similar to
those set forth in the note issued by eDiets.com to the Company
for $500,000, which was filed by the Company on Form 8-K with the
Securities and Exchange Commission on Sept. 13, 2012.
eDiets.com is permitted to solicit inquiries or engage in
discussions with third parties relating to acquisition proposals
for the 30-day "go-shop" period after signing of the Merger
Agreement, and after that period, eDiets.com may not solicit or
initiate discussions with third parties regarding other proposals
to acquire eDiets.com and has agreed to certain restrictions on
its ability to respond to those proposals, subject to the
fulfillment of certain fiduciary duties of eDiet.com's board of
directors. eDiets.com must give the Company five business days'
notice (whether during or after the "go-shop" period) before
eDiets.com is permitted to change its recommendation or terminate
the Merger Agreement to accept a superior proposal.
A copy of the Agreement and Plan of Merger is available at:
http://is.gd/UD544q
About As Seen on TV
Clearwater, Fla.-based As Seen On TV, Inc., is a direct response
marketing company. It identifies, develops, and markets consumer
products.
The Company reported a net loss of $8.07 million on $8.16 million
of revenue for the year ended March 31, 2012, compared with a net
loss of $6.97 million on $1.35 million of revenue during the prior
fiscal year.
The Company's balance sheet at March 31, 2012, showed $9.78
million in total assets, $27.05 million in total liabilities, all
current, and a $17.26 million total stockholders' deficiency.
ATHABASCA OIL: DBRS Assigns 'B' Provisional Issuer Rating
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DBRS has assigned a provisional Issuer Rating of B with a Stable
trend to Athabasca Oil Corporation.
With limited production history and aggressive development plans,
DBRS's analysis will largely focus on the Company's ability to
maintain strong liquidity to fund planned capital expenditures
(capex) over the next several years. Once Athabasca successfully
executes its production growth strategy and makes a transition
from a largely pre-production state to a meaningful commercial
state, then the rating will gradually become based on free cash
flow generation capability and reserve statistics. Operating cash
flow is expected to become sufficient to fund the majority of
capex within three years should the Company execute its plan on a
timely basis. With its significant oil sands contingent resources
(best estimate) at over 10 billion barrels of oil equivalent,
Athabasca has the potential to continue to attract new joint
venture (JV) partners. DBRS views establishing JV partnerships
with investment-grade oil and gas producers to be positive for the
rating, as they provide (1) upfront cash proceeds, (2) share
operational and financial risks and (3) deepen operational
expertise.
The rating is supported by Athabasca's strong liquidity profile.
Assuming the Company spends $1 billion in capex per annum, the
Company's liquidity (including projected cash proceeds of $1.3
billion from exercising its put option with PetroChina Company
Limited) should be adequate to support capex over the next three
years. Should oil prices drop significantly and no additional
external funding (e.g., JVs, new equity) be available, DBRS
expects the Company to conserve its liquidity by curtailing capex.
Key challenges facing the Company include the following: (1)
timing of the $1.3 billion put/call option, (2) limited track
record, (3) execution risk and (4) aggressive capex spending.
ATP OIL: Creditors Seek to File Fraudulent Transfer Suits
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Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the official creditors' committee of ATP Oil & Gas
Corp. wants authority to bring fraudulent transfer suits that the
producer and developer of oil and gas wells declines to prosecute.
The committee's papers say ATP doesn't object to allowing the
committee to sue.
According to the report, the committee contends that ATP
transferred interest in some of its properties in four years
before bankruptcy for "less than reasonably equivalent value."
Consequently, the committee says they can be set aside as
"constructively fraudulent transfers" under state and federal
laws.
The report relates that there will be a Nov. 15 hearing in U.S.
Bankruptcy Court in Houston to consider the committee's request.
Prospective defendants include Diamond Offshore Co. and Seacor
Marine Inc.
The $1.5 billion in 11.875% second-lien notes traded at 3:09 p.m.
on Nov. 2 for 15.25 cents on the dollar, according to Trace, the
bond-price reporting system of the Financial Industry Regulatory
Authority.
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. Filings
with the Bankruptcy Court and claims information are available at
http://www.kccllc.net/atpog
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.
An official committee of unsecured creditors has been appointed in
the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley &
McCloy, in New York, represents the Creditors Committee as
counsel.
AVANTAIR INC: Eight Directors Elected to Board
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Avantair, Inc., held its annual meeting on Nov. 1, 2012. At the
meeting, eight directors were elected to serve on the Board until
the next annual meeting and until a successor has been elected and
qualified, or until his or her earlier death, resignation or
removal, namely:
(1) Clinton Allen;
(2) Stephanie Cuskley;
(3) Richard B. DeWolfe;
(4) Arthur H. Goldberg;
(5) Barry J. Gordon;
(6) Robert Lepofsky;
(7) Steven Santo; and
(8) Lorne Weil.
The shareholders ratified the appointment of J.H. Cohn LLP as the
Company's independent registered public accounting firm for fiscal
year ending June 30, 2013. The proposal by management to amend
the 2006 Long-Term Incentive Plan to provide for a 2,000,000 share
increase in the number of shares of Avantair common stock that may
be subject to future awards under the 2006 Long-Term Incentive
Plan, was approved.
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.
The Company reported a net loss attributable to common
stockholders of $8.04 million for the year ended June 30, 2012,
compared with a net loss of attributable to common stockholders of
$13.64 million for the year ended June 30, 2011.
Avantair'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.
BACK YARD BURGERS: Plan Hands Control to Lender Pharos
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Marie Beaudette at Dow Jones' DBR Small Cap reports that Tennessee
restaurant chain Back Yard Burgers Inc. has filed a plan to exit
Chapter 11 protection under the control of its lender, private
equity firm Pharos Capital Group LLC.
About Back Yard Burgers
Back Yard Burgers has a chain of 90 quick-service restaurants in
16 states. The company operates and franchises quick-service
restaurants in Memphis, Little Rock, Nashville and other markets.
The company features gourmet hamburgers and chicken sandwiches,
name-brand condiments and beverages as well as hand-dipped
milkshakes, fresh-squeezed lemonade and fresh-baked cobblers.
Back Yard Burgers Inc. and its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 12-12882) on Oct. 17,
2012. Attorneys at Greenberg Traurig serve as bankruptcy counsel.
Saul Ewing LLP is the conflicts counsel. GA Keen Realty Advisors
is the real estate advisor. Rust Consulting/Omni Bankruptcy is
the claims and notice agent. Back Yard Burgers estimated up to
$10 million in assets and at least $10 million in liabilities.
BAKERS FOOTWEAR: Sets Nov. 5 Auction to Pick Liquidator
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Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Bakers Footwear Group Inc. will conduct an auction on
Nov. 5 to determine which liquidators will conduct going-out-of-
business sales at a minimum of 151 locations. If the company
determines that reorganization isn't feasible, it has the option
of using the liquidators to sell the merchandise and fixtures at
all 215 stores. The U.S. Bankruptcy Court in St. Louis approved
auction procedures on Nov. 1. There will be a Nov. 7 hearing for
court approval of arrangements with the high bidder. The first
bids will be submitted by a joint venture between SB Capital Group
LLC and Tiger Capital Group LLC.
About Bakers Footwear
Bakers Footwear Group Inc., a mall-based retailer of shoes for
young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case
No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a
plan to close stores and reduce costs.
Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc.,
later renamed Weiss and Neuman Shoe Co., a regional chain of
footwear stores. In 1997, Bakers was acquired principally by its
current chief executive officer, Peter Edison, who had previously
served in various senior management positions at Edison Brothers
Stores Inc. In June 1999, Bakers purchased selected assets of the
"Bakers" and "Wild Pair" footwear retailing chains from the
bankruptcy estate of Edison Brothers. The "Bakers" footwear
retailing chain was founded in 1924 and is the third-oldest soft
goods retail concept still in operation in the United States.
In February 2001, the Debtor changed its name to Bakers Footwear
Group, Inc. In February 2004, Bakers conducted an initial public
offering of its common stock. Bakers' common stock is quoted
under the ticker symbol "BKRS" on the, the OTC Markets Group's
quotation platform.
As of the Petition Date, Bakers operates roughly 215 stores
nationwide.
Bankruptcy Judge Charles E. Rendlen III presides over the case.
Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti
Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel.
Alliance Management serves as financial and restructuring
advisors. Donlin, Recano & Company, Inc., serves as claims agent.
The petition was signed by Peter A. Edison, chief executive
officer and president.
The Company's balance sheet at April 28, 2012, showed $41.90
million in total assets, $59.49 million in total liabilities and a
$17.59 million total shareholders' deficit.
Counsel for Crystal Financial, the DIP Lender, are Donald E.
Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade,
Esq., at Spencer, Fane, Britt & Brown, LLP.
The U.S. Trustee has appointed 11 members to the official
committee of unsecured creditors.
BALLARD POWER: Has $9.3-Mil. Net Loss in Third Quarter
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Ballard Power Systems Inc. reported a net loss of $9.3 million on
$14.2 million of revenues for the three months ended Sept. 30,
2012, compared with a net loss of $7.2 million on $20.6 million of
revenues for the same period last year.
The $6.4 million decline in revenues was driven by the absence of
Contract Automotive segment revenues ($1.8 million impact) as a
result of the completion of the Company's light-duty automotive
manufacturing supply agreement with Daimler in October 2011, by
lower Materials Product segment revenues of ($1.7) million as a
result of lower fuel cell GDL and carbon friction material
shipments, and by lower revenues of $(3.0) million in the
Company's core Fuel Cell Products segment.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $24.9 million on $38.0 million of revenues, compared
with a net loss of $28.5 million on $55.0 million of revenues for
the same period of 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$146.9 million in total assets, $70.8 million in total
liabilities, and stockholders' equity of $76.1 million.
A copy of the condensed consolidated interim financial statements
is available at http://is.gd/0veUX5
Headquartered in Burnaby, British Columbia, Canada, Ballard Power
Systems Inc.'s principal business is the design, development,
manufacture, sale and service of fuel cell products for a variety
of applications, focusing on motive power (material handling and
buses) and stationary power (backup power and distributed
generation) markets. The Company also provides engineering
services for a variety of fuel cell applications.
BILLMYPARENTS INC: Transpac Co-Founder Named to Board
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Ka Cheong Christopher Leong has joined the Board of Directors of
BillMyParents, Inc, effective as of Oct. 29, 2012.
Dr. Leong is a co-founder and the President of Transpac Capital, a
venture capital firm based in Singapore. Transpac was formed in
1989 through the amalgamation of Techno-Ventures Hong Kong, which
Dr. Leong co-founded in 1986, and Transtech Capital Management of
Singapore, both pioneers of venture capital in their respective
countries. Prior to his venture capital career, Dr. Leong was the
CEO of Amoy Canning Corporation Limited, a food and packaging
conglomerate listed on the stock exchange of Hong Kong. Prior to
his industrial career, Dr. Leong was a Senior Scientist at
American Science and Engineering in Cambridge, MA. Dr. Leong has
been a chairman of the Hong Kong Venture Capital Association, and
is one of the founding inductees to the Singapore Venture Capital
Hall of Fame in 2010 for his pioneering work in venture capital.
Dr. Leong obtained a BS and a PhD degree from Massachusetts
Institute of Technology, Cambridge, MA.
In connection with Dr. Leong's appointment to the Board, the
Company agreed to grant Dr. Leong warrants to purchase up to
2,000,000 shares of common stock at an exercise price of $0.69 per
share and having a term of five years. The warrants will vest
monthly over a period of 36 months provided Dr. Leong continues to
serve on the Board.
About BillMyParents
San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards
with special features aimed at young people and their parents.
BMP is designed to enable parents and young people to collaborate
toward the goal of responsible spending.
In the auditors' report accompanying the consolidated financial
statements for the year ended Dec. 31, 2011, BDO USA, LLP,
expressed substantial doubt about the Company's ability to
continue as a going concern. BDO noted that the Company has
incurred net losses since inception and has an accumulated
deficit, and stockholders' deficiency at Sept. 30, 2011.
The Company reported a net loss of $14.2 million for the fiscal
year ended Sept. 30, 2011, compared with a net loss of
$6.9 million for the fiscal year ended Sept. 30, 2010.
The Company's balance sheet at June 30, 2012, showed $7.83 million
in total assets, $1.47 million in total liabilities, all current,
and $6.36 million in total stockholders' equity.
BITI LLC: Claims Bar Date Set for Nov. 30
-----------------------------------------
According to a notice, creditors of Biti LLC must submit their
proofs of claims not later than Nov. 30, 2012, at 4:30 p.m.
Governmental entities are required to submit their proofs of claim
on Feb. 1, 2012.
Oyster Bay, New York-based Biti LLC filed a Chapter 11 petition
(Bankr. E.D.N.Y. Case No. 12-74810) in New York on Aug. 2, 2012.
The Debtor, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101(51B), estimated assets and debts of at least $10 million.
The Debtor owns 11.701 acres of property located at the south side
of Skillman Street, west of Bryant Avenue, Village of Roslyn.
Judge Robert E. Grossman presides over the case. Ronald M.
Terenzi, Esq., at Stagg, Terenzi, Confusione, & Wabnik, LLP. In
its petition, the Debtor scheduled $14,146,612 in assets and
$12,900,070 in liabilities.
BITI LLC: U.S. Trustee Appoints 3-Member Creditors Panel
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Christine H. Black, the Assistant U.S. Trustee for Region 2,
appointed three members to the official committee of unsecured
creditors in the Chapter 11 case of Biti LLC.
The Creditors Committee members are:
1. Ronald J. Rosenberg, Esq.
Rosenberg Calica Birney
100 Garden City Plaza, Suite 408
Garden City, NY 11530
2. Core Group Architects
123 South Street, Suite 211
Oyster Bay, NY 11771
3. Charles J. Voorhis
Nelson, Pope & Voorhis
572 Walt Whitman Road
Melville, NY 11747
About Biti LLC
Oyster Bay, New York-based Biti LLC filed a Chapter 11 petition
(Bankr. E.D.N.Y. Case No. 12-74810) in New York on Aug. 2, 2012.
The Debtor, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101(51B), estimated assets and debts of at least $10 million.
The Debtor owns 11.701 acres of property located at the south side
of Skillman Street, west of Bryant Avenue, Village of Roslyn.
Judge Robert E. Grossman presides over the case. Ronald M.
Terenzi, Esq., at Stagg, Terenzi, Confusione, & Wabnik, LLP. In
its petition, the Debtor scheduled $14,146,612 in assets and
$12,900,070 in liabilities. The petition was signed by William
Cohn, member.
BITI LLC: Court Approves Stagg Terenzi as Counsel
-------------------------------------------------
Biti LLC sought and obtained approval from the U.S. Bankruptcy
Court to employ Stagg, Terenzi, Confusione, & Wabnik, LLP as
attorney.
Stagg Terenzi will render advice to the Debtor concerning its
duties and powers as a debtor-in-possession and that the
professional services which said attorneys have agreed to render
will include, without limitation:
(a) consulting with the Debtor concerning the administration of
the case;
(b) investigating the Debtor's past transactions, commencing
actions with respect to the Debtor's avoiding powers under
the Bankruptcy Code, and advising the Debtor with respect to
transactions entered into during the pendency of Debtor's
case;
(c) assisting the Debtor in the formulation of a Chapter 11
plan; and
(d) performing any and all such other legal services as may be
required by the Debtor in the interest of the estate.
Stagg Terenzi has no interest in the Debtor, its creditors or any
party in interest or its respective attorneys or accountants.
Stagg Terenzi has no interest adverse to the estate in the matters
upon which it is to be engaged.
Certain of the Debtor's members and managers have been sued
individually by Valley National Bank as a result of Valley
National Bank incorrectly calling a default on its loan to the
Debtor, which precipitated the instant filing. These members and
managers have independently retained Stagg Terenzi to represent
them in these related lawsuits. The representation by Stagg
Terenzi of any of the Debtor's members or managers will be paid
for independently and separately from Stagg Terenzi's
representation of the Debtor in the bankruptcy proceeding and does
not create any conflict of interest.
About Biti LLC
Oyster Bay, New York-based Biti LLC filed a Chapter 11 petition
(Bankr. E.D.N.Y. Case No. 12-74810) in New York on Aug. 2, 2012.
The Debtor, a Single Asset Real Estate as defined in 11 U.S.C.
Sec. 101(51B), estimated assets and debts of at least $10 million.
The Debtor owns 11.701 acres of property located at the south side
of Skillman Street, west of Bryant Avenue, Village of Roslyn.
Judge Robert E. Grossman presides over the case. Ronald M.
Terenzi, Esq., at Stagg, Terenzi, Confusione, & Wabnik, LLP. In
its petition, the Debtor scheduled $14,146,612 in assets and
$12,900,070 in liabilities. The petition was signed by William
Cohn, member.
BRAFFITS CREEK: Section 341(a) Meeting Scheduled for Nov. 15
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The U.S. Trustee for Region 17 will convene a meeting of creditors
in Braffits Creek Estates, LLC's Chapter 11 case on Nov. 15, 2012,
at 10 a.m. The meeting will be held at 341s - Foley Bldg, Room
1500.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Las Vegas, Nevada-based Braffits Creek Estates, LLC is a single
asset real estate that owns raw land located 3200 Subdivision, in
Iron County, Utah.
The Company filed for Chapter 11 protection (Bankr. D. Nev. Case
No. 12-19780) on Aug. 23, 2012. Bankruptcy Judge Bruce A. Markell
presides over the case. David J. Winterton, & Assoc., Ltd.,
represents the Debtor's restructuring effort. The Debtor
estimated assets at $10 million to $50 million, and debts at
$1 million to $10 million.
BUGS & BOOF: Ruling in Legal Malpractice Suit Upheld
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The Court of Appeals of California, First District, Division, has
affirmed lower court rulings in a legal malpractice and breach of
fiduciary duty lawsuit filed by Rick Fields against Tod Ratfield
et al., who acted as his attorneys in prior litigation. Mr.
Fields has taken an appeal from an order granting the defendants'
motion for summary judgment and dismissing the action. Mr. Fields
argues that the trial court erred by denying him a continuance of
the summary judgment hearing to present expert testimony, and
claims triable issues of fact remain to be litigated in his causes
of action for legal malpractice and breach of fiduciary duty by
defendants. The appeals court concluded the denial of Mr. Fields'
request for a continuance was not an abuse of discretion, and
defendants have negated elements of the plaintiff's causes of
action.
The legal malpractice action had its genesis in prior litigation
involving Rebecca and Rick Fields against Grace Young and Walter
Young, and Maestro's Ristorante of San Ramon, Inc. (Contra Costa
County Super. Ct. No. C97-05176.).
In 1997, the Fields owned and operated a comedy club in San Ramon
known as Tommy T's. The Tommy T's club was a successful
enterprise that offered accomplished professional comedians, had
an accumulated reserve of valuable contacts, business
relationships and comedy club expertise, a large and loyal
customer base, and earned growing revenues, but the corporation
through which the Fields operated Tommy T's, known as Bugs & Boof,
Inc., was in Chapter 11 reorganization proceedings due to
substantial capital debts incurred primarily in connection with
leasehold improvements. The Youngs owned two Maestro's
restaurants, one located in Pleasanton, the other in San Ramon,
within a mile of Tommy T's.
In June 1997, while the Fields were still in the process of
negotiating the Chapter 11 reorganization plan for Tommy T's, the
Fields and the Youngs entered into a business purchase and sale
agreement to unite their two businesses. Tommy T's ceased to
exist and the reorganization plan was abandoned. The Tommy T's
business was liquidated under Chapter 7 of the Bankruptcy Code.
Disagreements later arose with the Youngs, and their relationship
irretrievably deteriorated, leading into litigation between the
parties.
The case is RICK FIELDS, Plaintiff and Appellant, v. TOD RATFIELD
et al., Defendants and Respondents, No. A132766 (Calif. App. Ct.).
A copy of the Court's Nov. 1, 2012 decision is available at
http://is.gd/BL4HQNfrom Leagle.com.
CDC CORP: Taps Wilmer Cutler as Securities Counsel
--------------------------------------------------
BankruptcyData.com reports that CDC Corp. filed with the U.S.
Bankruptcy Court a motion to retain Wilmer Cutler Pickering Hale
and Dorr (Contact: Wendell C. Taylor) as special counsel for
securities and related matters at these hourly rates: partner at
$675 to $1,250, counsel at $675 to $835, associate at $395 to
$695, staff attorney at $375 to $425, litigation support at $195
to $455 and project assistant and paralegal at $110 to $150.
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: Incurs $20.2 Million Net Loss in Third Quarter
-----------------------------------------------------------------
Cell Therapeutics, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss attributable to CTI common shareholders of $20.20
million for the three months ended Sept. 30, 2012, compared with a
net loss attributable to CTI common shareholders of $29.68 million
for the same period during the prior year.
The Company reported a net loss attributable to common
shareholders of $96.24 million for the nine months ended Sept. 30,
2012, compared with a net loss attributable to common shareholders
of $103.21 million for the same period during the prior year.
The Company's balance sheet at Sept. 30, 2012, showed
$36.17 million in total assets, $32.60 million in total
liabilities, $13.46 million in common stock purchase warrants, and
a $9.89 million total shareholders' deficit.
"As we may need to raise additional financing to fund our
operations and satisfy obligations as they become due, our
independent registered public accounting firm has included an
explanatory paragraph in their reports on our December 31, 2011,
2010 and 2009 consolidated financial statements regarding their
substantial doubt as to our ability to continue as a going
concern. This may have a negative impact on the trading price of
our common stock and we may have a more difficult time obtaining
necessary financing."
"In the third quarter, we achieved our goal of making Pixuvri
commercially available in the European Union ("E.U."). Pixuvri is
now commercially available in Sweden, Denmark and Finland as well
as Austria and we continue the roll-out with entry into Germany,
the United Kingdom and the Netherlands scheduled in November,"
stated James A. Bianco, M.D., President and CEO of CTI. "We
expect to begin a phase 3 study of pacritinib in MF this quarter
and have the CRO in place that will conduct the study and we have
identified leading institutions that will participate in the
study. We believe that strong institutional investor interest in
the opportunity for Pixuvri in the E.U. and pacritinib's product
profile in MF, in addition to our other pipeline assets, drove the
recent successful completion of our financing of approximately
$55.6 million in net proceeds. We believe this financing will
help provide us with additional resources to reach significant
milestones in the development of our pipeline."
A copy of the Form 10-Q is available for free at:
http://is.gd/B9mGcH
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.
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.
CENTENE CORP: Moody's Affirms 'Ba2' Sr. Debt Rating; Outlook Neg.
-----------------------------------------------------------------
Moody's Investors Service has affirmed the debt ratings of Centene
Corporation (Centene, NYSE:CNC, senior debt at Ba2) and changed
the outlook on the ratings to negative from stable following its
reported third quarter financial results and announcement that it
would be issuing an additional $150 million of senior notes. The
company plans to use the proceeds from the new issuance to fund a
capital infusion to its operating subsidiaries to support the
expected growth in its Medicaid operations. The debt issuance is a
draw on the company's shelf registration, which it filed on May
13, 2011. The insurance financial strength (IFS) ratings of the
company's operating subsidiaries (see list below) were also
affirmed, with the outlook changed to negative from stable.
Rating Rationale
Moody's stated the change in outlook to negative reflects the
losses Centene has incurred from its Medicaid contract with the
Commonwealth of Kentucky, in conjunction with the issuance of new
debt. While the company has announced its intention to exercise
its contractual right to terminate the Medicaid contract as of
July 5, 2013, the rating agency said that it is not clear if the
company will be able to exit the contract without any additional
losses or a significant financial penalty.
According to Moody's, the $150 million of senior notes will
increase Centene's financial leverage (debt to capital where debt
includes operating leases) to above 40% and debt to EBITDA to
approximately 3.7 times as of December 31, 2012. However, the
rating agency noted that excluding the losses from the Kentucky
Medicaid contract, which includes a $63 million pre-tax premium
deficiency reserve reflecting anticipated losses through the
termination date of the contract in 2013, Centene's financial
results and metrics would remain in line with its current rating
level.
Moody's said the rating affirmation reflects Centene's recent
Medicaid contract wins in Kansas, Missouri, New Hampshire, and
Washington, as well as expansion contracts awarded in Ohio and
Texas, which partially offset the negative results from the
Kentucky contract. As a result of the anticipated growth from
these contracts, the company's capital requirements will also
grow. The $150 million from the proceeds of the new issuance will
be used to maintain the company's consolidated NAIC Risk Based
Capital (RBC) ratio at approximately 175% of company action level
(CAL), which is a key factor supporting the company's ratings. The
rating agency also noted that despite the losses reported in 2012,
the company's cash generation remained strong, with over $200
million in unregulated cash projected for the full year.
Moody's Ba2 senior debt rating for Centene is based primarily on
the company's concentration in the Medicaid market, acquisitive
nature, and moderate level of financial leverage, offset by its
multi-state presence, expansion into other healthcare product
opportunities, relatively stable financial profile and adequate
capitalization. The rating also reflects concerns with respect to
the level of reimbursements to Medicaid managed care companies as
states fall under budgetary and political pressures. According to
the rating agency, while rate increases have been under pressure
over the last two years, it appears that states have adhered to
actuarial valuations in determining reimbursement levels. It
should also be noted that healthcare reform legislation, which
will increase the number of persons eligible for Medicaid, has
increased interest among states in Medicaid managed care options,
providing growth opportunities for Centene.
Moody's said that as a result of the negative outlook, an upgrade
in the short-term is unlikely; however, the following could result
in the outlook being returned to stable: 1) termination of the
Kentucky Medicaid contract without a significant financial
penalty, 2) no losses or charges in excess of the premium
deficiency reserve from the Kentucky Medicaid contract, and 3)
maintaining RBC ratio of at least 175% CAL. Moody's added that on
the other hand, the following could result in a rating downgrade:
1) loss or impairment of one or more additional Medicaid
contracts, 2) a significant loss or penalty associated with the
Kentucky Medicaid contract, 3) EBITDA interest coverage falling
below 6x, or 4) Debt to EBITDA ratio remaining above 3x in 2013.
The principal methodology used in rating Centene was Moody's
Rating Methodology for U.S. Health Insurance Companies Industry
Methodology published in May 2011.
The following ratings were affirmed with a negative outlook:
Centene Corporation -- senior unsecured debt rating at Ba2;
senior unsecured shelf debt rating at (P)Ba2; corporate family
rating at Ba2;
Managed Health Services Insurance Corp. -- insurance financial
strength rating at Baa2;
Peach State Health Plan, Inc. -- insurance financial strength
rating at Baa2;
Coordinated Care Corp. Indiana, Inc. -- insurance financial
strength rating at Baa2;
Superior HealthPlan, Inc. -- insurance financial strength rating
at Baa2.
Centene Corporation is headquartered in St. Louis, Missouri. For
the first nine months of 2012 the company reported total revenues
of $6.3 billion with managed care membership as of September 30,
2012 of approximately 2.5 million. As of September 30, 2012 the
company reported shareholders' equity of approximately $957
million.
Moody's insurance financial strength ratings (IFSR) are opinions
about the ability of insurance companies to punctually pay senior
policyholder claims and obligations.
CENTENE CORP: S&P Keeps 'BB' Rating on $250MM Sr. Unsecured Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services said its 'BB' rating on Centene
Corp.'s $250 million senior unsecured notes maturing June 1, 2017,
remains unchanged after the company issued a $150 million add-on
to the notes.
The company will use the proceeds of the notes for general
corporate purposes, including funding statutory surplus at its
operating subsidiaries to support business growth.
"We believe that Centene has a good competitive position in the
managed Medicaid market with a growing presence in this market
segment, which helps to mitigate its relatively narrow market-
segment focus on government-sponsored managed Medicaid programs,"
S&P said.
"We expect the company to continue to grow and generate stable
cash flow in the intermediate term (12 to 24 months) to meet its
debt-service requirements and pay for expenses related to
expansion into new markets," S&P said.
"However, our counterparty credit rating on Centene is constrained
by the concentration of its revenue stream in the government-
sponsored managed Medicaid programs, with a smaller percentage of
premiums coming from specialty services from external customers.
This narrow market focus is a key credit risk, as it exposes the
company to adverse regulatory and legislative developments.
Accordingly, profitability and sustained revenue growth depend
heavily on continued government funding for these programs to keep
pace with medical cost trends," S&P said.
"We expect Centene's key holding-company credit metrics to remain
consistent with the current rating level. At year-end 2012 we
expect its debt-to-capital ratio to be in the 30%-35% range
(excluding the mortgage note and including operating lease
obligation treated as debt), up from 26.5% as of year-end 2011. In
our calculation of 2012 EBIT ROR and EBITDA we adjust for certain
one-time items including the premium deficiency reserve for its
Kentucky Health Plan and goodwill and intangible write-down
related to its Celtic subsidiary. We expect adjusted EBITDA
interest coverage in 2012-2013 to be more than 7x. We expect risk-
adjusted capitalization to remain redundant at the 'BBB' level per
our capital model. For 2012 we expect adjusted EBIT ROR to be in
the 2% range and to improve in 2013 to the 2%-3% range. EBIT ROR
for 2012 reflects higher-than-expected medical costs in its
Kentucky Health Plan and the Hidalgo service area in its Texas
Health Plan, as well as in the Celtic individual health business,"
S&P said.
"We expect premium rate increases in its Texas Health Plan and the
planned exit from Kentucky to improve operating results in 2013,"
S&P said.
Ratings List
Centene Corp.
Counterparty Credit Rating BB/Negative/--
Sr. Unsec. Debt Due 2017 BB
CHAPARRAL ENERGY: Moody's Rates $150MM Sr. Unsecured Notes 'B3'
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Chaparral
Energy, Inc.'s proposed offering of $150 million senior unsecured
notes due 2022. Chaparral's other ratings and the stable outlook
remained unchanged.
Net proceeds from the note issue will be used to reduce borrowings
under the company's revolving credit facility. These notes will be
issued as an add-on to the company's existing $400 million 7.625%
notes and will have identical terms and conditions.
Issuer: Chaparral Energy, Inc.
Assignments:
US$150 million 7.625% Senior Unsecured Regular
Bond/Debenture, Assigned B3
US$150 million 7.625% Senior Unsecured Regular
Bond/Debenture, Assigned a range of LGD4, 64 %
Ratings Rationale
Chaparral's notes are rated B3, one notch below the B2 Corporate
Family Rating (CFR) given the existence of a sizeable secured
credit facility in the company's capital structure relative to the
amount of unsecured debt. The $500 million senior secured
revolving credit facility has a first-lien claim and is
collateralized by all of Chaparral's oil and gas assets, and
therefore, would have a preferential status over the unsecured
notes in a bankruptcy situation.
Chaparral's B2 CFR reflects its scale in terms of production and
proved reserves, high debt leverage equating to $45,670 per barrel
of oil equivalent (Boe) of production at year-end 2011, but also
its strong cash margins and its improved liquidity position. With
nearly 60% of its average daily production comprised of oil and
natural gas liquids (NGLs), Chaparral is well-positioned to enjoy
robust cash flow generation for at least the next several years
based on Moody's expectations of a sustained high oil price
environment. Reflecting the extent of its liquids production,
Chaparral's unleveraged cash margin increased 30% from 2010
levels, to $36.41 per Boe in the twelve months ending June 30,
2012. Chaparral's overall operating profile continues to benefit
from a long-lived reserve base, which has the potential capacity
to further extend and generate sizable ongoing production growth
longer term as the front-end loaded EOR investment commences
operations.
Chaparral should have adequate liquidity through the end of 2013
which is captured in the SGL-3 Speculative Grade Liquidity rating.
The revolver borrowing base was increased to $500 million through
an amendment on November 1, 2012, and as a result of this note
issue, the company will have zero drawings under the revolver
(there is nominal amount for letters of credit outstanding) that
should help cover any cash flow shortfall in 2013.
The stable outlook is based upon the expectation that Chaparral
will continue to generate growth in liquids production, reserve
bookings and profitability while maintaining its recently improved
F&D cost profile, and further assumes a limited use of incremental
debt.
A material improvement in leverage reflecting debt on production
dropping below $35,000 per Boe could prompt an upgrade, presuming
F&D cost levels do not materially deteriorate with the EOR
investment.
A further increase in its already elevated debt levels, or a
material deterioration in capital productivity as it relates in
particular to Chaparral's growing EOR investment, could warrant a
downgrade.
The principal methodology used in rating Chaparral was the Global
Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
Chaparral Energy, Inc. is a privately-owned independent E&P
company headquartered in Oklahoma City, Oklahoma.
CHESAPEAKE ENERGY: Moody's Rates $2BB Sr. Unsecured Term Loan Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Chesapeake
Energy Corporation's proposed $2 billion senior unsecured five-
year term loan. Proceeds from the new term loan will be used to
repay borrowings outstanding on the company's existing term loan
and revolving bank credit facility. The rating outlook remains
negative.
"The $2 billion term loan improves Chesapeake's liquidity as it
works toward completing its planned asset sales," said Pete Speer,
Moody's Vice President. "However, this new term loan also
indicates that the asset sales are taking longer than initially
expected to close and that expected debt reduction is sliding
further into the future."
Rating Rationale
Chesapeake's Ba2 Corporate Family Rating (CFR) incorporates the
benefits of its very large proved reserve and production scale,
big acreage positions in multiple basins across the US, low
operating costs and competitive drillbit finding and development
(F&D) costs. These credit strengths are offset by the company's
high adjusted debt and financial leverage metrics resulting from a
long track record of rapid growth through acreage acquisitions and
capital spending greatly in excess of cash flows. The funding need
both for growth and to hold acquired acreage requires the company
to continually complete transactions with third parties or access
the capital markets to fill the funding gap. While Chesapeake's
consistent track record of executing these transactions
demonstrates the inherent benefits and financial flexibility that
scale provides to an E&P company to service debt, this is a higher
risk funding strategy that has also resulted in significant
structural and analytical complexity.
The outlook is negative based on Chesapeake's high leverage
metrics and the execution risk of its plan to arrest its still
heavy capital spending while also reducing reported debt to $9.5
billion through asset sales. While the company has made meaningful
progress in boosting its oil production, it remains exposed to
natural gas prices in 2013 which have strengthened recently but
are still relatively weak.
If Chesapeake is not able to reduce its adjusted debt and
corresponding leverage metrics, then its ratings could be
downgraded. Debt/average daily production and debt/proved
developed reserves above $35,000/boe and $12/boe and retained cash
flow/debt below 20% on a sustained basis could result in a ratings
downgrade. If the company is able to make significant progress
towards its debt reduction goal and narrow the gap between its
capital spending and cash flow then the outlook could be returned
to stable. A rating upgrade appears unlikely through 2013.
The Ba3 rating on the company's proposed $2 billion senior
unsecured term loan reflects both the overall probability of
default of Chesapeake, to which Moody's assigns a PDR of Ba2, and
a loss given default of LGD 4 (69%). Chesapeake has a $4 billion
senior secured revolving credit facility. The size of the
potential priority claim to the assets relative to the senior
unsecured debt outstanding results in the unsecured debt being
rated one notch beneath the Ba2 CFR under Moody's Loss Given
Default Methodology.
The principal methodology used in rating Chesapeake Energy was the
Global Independent Exploration and Production Industry Methodology
published in December 2011. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.
CIRCLE STAR: Gets Operator License to Begin Drilling in Kansas
--------------------------------------------------------------
Circle Star Energy Corp. has received approval for their Operator
License by the Kansas Corporation Commission (KCC) and has begun
the permitting process to begin drilling in Northwest Kansas.
CRCL CEO Jeff Johnson stated, "We are excited about the
opportunities of entering into our permitting and drilling phase
in Northwest Kansas. We have identified our initial well location
and are eager to begin drilling operations."
Drilling operations are scheduled to begin by year end 2012.
About Circle Star
Houston, Tex.-based Circle Star Energy Corp. owns royalty,
leasehold, operating, net revenue, net profit, reversionary and
other mineral rights and interests in certain oil and gas
properties in Texas. The Company's properties are in Crane,
Scurry, Victoria, Dimmit, Zavala, Grimes, Madison, Robertson,
Fayette, and Lee Counties.
The Company reported a net loss of $11.07 million on $942,150 of
total revenues for the year ended April 30, 2012, compared with a
net loss of $31,718 on $0 of total revenues during the prior
fiscal year.
Hein & Associates LLP, in Dallas, Texas, issued a "going concern"
qualification on the consolidated financial statements for the
year ended April 30, 2012. The independent auditors noted that
the Company has suffered recurring losses from operations and has
a working capital deficit which raise substantial doubt about the
Company's ability to continue as a going concern.
The Company's balance sheet at July 31, 2012, showed $8.36 million
in total assets, $4.46 million in total liabilities, and
$3.89 million in total stockholders' equity.
CITIZENS FIRST: Closed; Heartland Bank & Trust Assumes Deposits
---------------------------------------------------------------
Citizens First National Bank of Princeton, Ill., was closed on
Friday, Nov. 2, by the Office of the Comptroller of the Currency,
which appointed the Federal Deposit Insurance Corporation as
receiver. To protect the depositors, the FDIC entered into a
purchase and assumption agreement with Heartland Bank and Trust
Company of Bloomington, Ill., to assume all of the deposits of
Citizens First National Bank.
The 21 branches of Citizens First National Bank will reopen during
their regular business hours as branches of Heartland Bank and
Trust Company. Depositors of Citizens First National Bank will
automatically become depositors of Heartland Bank and Trust
Company. 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 Citizens First National
Bank should continue to use their existing branch until they
receive notice from Heartland Bank and Trust Company that it has
completed systems changes to allow other Heartland Bank and Trust
Company branches to process their accounts as well.
As of Sept. 30, 2012, Citizens First National Bank had around
$924.0 million in total assets and $869.4 million in total
deposits. In addition to assuming all of the deposits of the
failed bank, Heartland Bank and Trust Company agreed to purchase
essentially all of the assets.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-830-4698. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/cfnb.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $45.2 million. Compared to other alternatives, Heartland
Bank and Trust Company's acquisition was the least costly
resolution for the FDIC's DIF. Citizens First National Bank is
the 49th FDIC-insured institution to fail in the nation this year,
and the eighth in Illinois. The last FDIC-insured institution
closed in the state was First United Bank, Crete, on Sept. 28,
2012.
CLEAR CHANNEL: Bank Debt Trades at 17% Off in Secondary Market
--------------------------------------------------------------
Participations in a syndicated loan under which Clear Channel
Communications, Inc., is a borrower traded in the secondary market
at 82.47 cents-on-the-dollar during the week ended Friday, Nov. 2,
a drop of 1.44 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 196 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 shareholders' 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.
* * *
As reported in the TCR on Oct. 17, 2012, Fitch Ratings has
affirmed the 'CCC' Issuer Default Rating (IDR) of Clear Channel
Communications, Inc. The Rating Outlook is Stable.
Fitch's ratings concerns center on the company's highly leveraged
capital structure, with significant maturities in 2016; the
considerable and growing interest burden that pressures FCF;
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.
The TCR also reported in October 2012 that Standard & Poor's
Ratings Services assigned Clear Channel's proposed $2 billion
priority guarantee notes due 2019 an issue-level rating of 'CCC+'
(the same level as the 'CCC+' corporate credit rating on the
parent company) and a recovery rating of '4', indicating its
expectation for
average (30% to 50%) recovery in the event of a payment default.
"In addition, we are affirming our 'CCC+' corporate credit rating
on both the holding company, CC Media Holdings Inc., and operating
subsidiary Clear Channel, which we view on a consolidated basis;
the rating outlook is negative," said Standard & Poor's credit
analyst Jeanne Shoesmith.
"The CC Media Holdings Inc. reflects the company's steep debt
leverage and significant 2016 debt maturities. The proposed
transaction extends about $2 billion of debt from 2014 and 2016 to
2019 and reduces 2016 maturities from $12 billion to a little over
$10 billion. However, the interest rate on the new debt is about
5% higher than the existing term loan B debt. As a result, we
expect that EBITDA coverage of interest will be very thin at about
1.2x and that discretionary cash flow will be only modestly
positive in 2013, hindering the company's ability to repay debt
and afford additional refinancing transactions with similar
interest rate increases. The transaction increases the company's
flexibility to repay 2014 maturities (currently $1.5 billion),
which previously could only be repaid on a pro rata basis, and now
permits the company to exchange and extend $3 billion of
additional loans. We still view a significant increase in the
average cost of debt or deterioration in operating performance for
either cyclical, structural, or competitive reasons, as major
risks as the company proceeds with a strategy to deal with its
2016 maturities," S&P said.
CLEAR CHANNEL: Moody's Rates $2.725BB Sr. Unsec. Note Issue 'B1'
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Clear Channel
Outdoor Holdings, Inc.'s ("CCO") wholly-owned intermediate holdco
subsidiary, Clear Channel Worldwide Holdings, Inc's. (CCW)
proposed $2.725 billion senior unsecured note issue. CCW's B2
Corporate Family Rating (CFR), B1 Probability-of-Default Rating
(PDR), and B3 senior subordinated rating are unchanged. Clear
Channel Communications, Inc. ("CCU") (Caa2 Stable) maintains an
89% ownership interest in CCO (the remaining 11% is publicly
owned). The rating outlook is stable.
Proceeds from the new Series A and B senior notes are expected to
be used to tender for the existing $2.5 billion senior notes due
2017 with the $225 million balance of proceeds used to pay
premiums, fees, and expenses. Any of the existing $2.5 billion
2017 notes remaining after the tender offer are expected to be
called in December and the related ratings will be withdrawn in
due course.
The refinancing is expected to lead to additional covenant
flexibility and lower interest expenses of over $50 million,
despite the increase in debt, from the existing 9.25% rate. The
restricted payment test that limits debt funded dividends will be
loosened from 6x to 7x total debt and the senior leverage test
will be increased to 5x which will allow additional flexibility to
issue senior debt. Limitations on paying dividends from asset sale
proceeds are also expected to be relaxed. CCU is expected to use
part of its existing cash balance to prepay $225 million of CCU's
term loan A facility to maintain an equal level of senior debt in
the consolidated capital structure and stay in compliance with
covenants. Moody's expects the transaction to increase leverage as
of Q3 2012 from 6.3x to 6.4x including Moody's standard
adjustments for lease expense or from 6.7x to 7x excluding Moody's
lease adjustments.
Summary of Rating Actions:
Issuer: Clear Channel Worldwide Holdings, Inc.
Corporate Family Rating -- B2 unchanged
Probability of Default Rating -- B1 unchanged
$735,750,000 Series A Senior Unsecured Notes due 2022 --
assigned a B1 (LGD-3, 45%) rating
$1,989,250,000 Series B Senior Unsecured Notes due 2022 --
assigned a B1 (LGD-3, 45%) rating
$2,200,000,000 Senior Subordinated Unsecured Notes due 2020 --
B3 unchanged (LGD- 6, 91%) point estimate increased from 90%
Speculative grade liquidity rating -- remains SGL -- 2
Outlook -- remains Stable
Summary Rating Rationale
CCW's B2 Corporate Family Rating primarily reflects CCO's high
debt-to-EBITDA leverage for the rating and the upstream of free
cash flow to service CCU's significant debt levels. Given CCU's
reliance on CCO's cash flow to service a substantial portion of
its debt, CCO's credit ratings are further constrained by the weak
credit conditions at CCU. The dependence by CCU is partially
offset by the absence of guarantees between CCO and CCU,
effectively relieving CCO of recourse against its assets by
lenders to CCU and allows for an up-notching of CCO's CFR rating
by three notches to B2 from CCU's Caa2. Despite the addition of
$2.2 billion of subordinated debt in March 2012 and an additional
$225 million of debt in the currently proposed transaction,
Moody's believes that over time, potentially more debt could be
issued at CCW to support CCU's capital structure. Additional
future debt at CCW would put downward pressure on the existing
ratings. CCO's debt structure is also largely based in US dollars
while a significant part of its operations are denominated in
foreign currencies which exposes the company to foreign exchange
risk which is not anticipated to be hedged.
The rating is supported by the strength of its high margin
Americas division and from its large international operations
which cause CCO to be one of the largest outdoor advertising
companies in the world with broad geographic diversity. The
ratings also receive support from the opportunity to convert
traditional billboards to digital that offer higher revenue and
margins, and additional capital expenditures in Europe that will
help support revenue growth over time. Moody's expects that
revenue and EBITDA will grow in the low to mid single digits as
advertising spending increases in the Americas, but economic
conditions in Europe are expected to lead to weak results in its
lower margin International division. Compared to other traditional
media outlets, outdoor advertising is not likely to suffer from
disintermediation and benefits from restrictions on the supply of
additional billboards (particularly in the US) that helps support
advertising rates and high asset valuations.
CCO's liquidity profile is expected to be good as indicated by its
Speculative Grade Liquidity Rating of SGL-2. Despite the lack of a
revolving credit facility, CCO currently maintains a cash balance
of $535 million as of Q3 2012 and Moody's believes that a new
revolving facility at CCO could be put in place if necessary. Over
the next twelve months, Moody's anticipates that the company will
generate ample levels of cash flow to fund debt service, working
capital and capital expenditures. Moody's expects that free cash
flow will improve, absent further debt issuance, but growth is
expected to remain modest compared to historical levels. CCO will
likely continue to lend all excess cash flow to CCU ($723 million
due from CCU on its revolving promissory note as of Q3 2012). The
company benefits from the absence of any material debt maturities
until 2020 pro-forma for the proposed transaction.
The stable outlook reflects Moody's expectation that CCO will not
use free cash flow to reduce its debt balance over the projection
period and will continue to upstream free cash flow to CCU. The
outlook also reflects the possibility of an additional dividend of
part of its cash balance over time. Moody's expects unadjusted
EBITDA margins will improve slightly as revenues grow modestly in
the low to mid single digits. However, any improvement in EBITDA
will mean that there will be more cash swept up to CCU and greater
availability to issue more debt. There is the potential for
further debt issuance at CCO to upstream proceeds to CCU given the
increased room for debt funded dividends in its covenants.
Additional debt issuance has the potential to lead to a rating
downgrade given the high leverage for the existing rating level.
CCO's corporate family rating is not likely to experience upward
rating pressure due to the already high leverage level at CCO and
the highly leveraged capital structure at CCU. The sweep of CCO's
residual free cash flow to service CCU's debt will also limit
credit improvement. Given CCU's reliance on cash flow from CCO,
Moody's does not anticipate any upwards rating momentum over the
rating horizon.
The rating would likely experience a downgrade if leverage was to
increase and be sustained above 7x (excluding Moody's standard
adjustments for lease expenses) as a result of additional debt
issuance or weak operating performance. Additionally, the rating
could come under pressure if it increasingly appeared likely that
CCU might default on its debt structure.
The principal methodology used in rating Clear Channel was the
Global Broadcast and Advertising Related Industries Industry
Methodology 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.
Clear Channel Outdoor Holdings, Inc. ("CCO"), with its
headquarters in San Antonio, Texas, is a leading global outdoor
advertising company that operates in over 40 countries and
generates annual revenues of approximately $3 billion. The company
is 89% owned by Clear Channel Communications, Inc. ("CCU").
COMMONWEALTH GROUP: Hiring Gentry Tipton as Bankruptcy Counsel
--------------------------------------------------------------
Commonwealth Group - Mocksville Partners, LP, has filed papers in
Bankruptcy Court seeking formal approval of Gentry, Tipton &
McLemore, P.C., for the purpose of rendering legal services to it
in connection with its bankruptcy case.
Gentry Tipton received a $25,000 retainer, which the firm has
agreed to hold in its trust account, plus $1,046 to pay the
Chapter 11 filing fee.
Mocksville has agreed to compensate the law firm based on its
customary hourly rates and to reimburse the firm for expenses.
Those rates range from $75 for law clerks and $125 to $350 for
attorney services.
Maurice K. Guinn, Esq., a member at the firm, attests that Gentry
Tipton does not hold any interest adverse to the estate and is
"disinterested". Gentry Tipton has previously represented two
unsecured creditors, Lattimore, Black, Morgan & Cain, and
Kennerly, Montgomery & Finley, but the representation of each
concluded several years ago.
About Commonwealth Group - Mocksville Partners
Commonwealth Group-Mocksville Partners, LP, filed a bare-bones
Chapter 11 petition (Bankr. E.D. Tenn. Case No. 12-34319) on
Oct. 25, 2012, in Knoxville, Tennessee. The Debtor's principal
assets are located at Cooper Creek Drive, in Mocksville, North
Carolina. Judge Richard Stair Jr. presides over the case.
Maurice K. Guinn, Esq., at Gentry, Tipton & McLemore P.C., serves
as counsel. The Debtor estimated assets and debts of $10 million
to $50 million. The formal schedules of assets and liabilities
are due Nov. 8, 2012. The petition was signed by Milton Turner,
chief manager and general partner.
COMMONWEALTH GROUP: Sec. 341 Creditors' Meeting Set for Nov. 28
---------------------------------------------------------------
The U.S. Trustee will convene a Meeting of Creditors under 11
U.S.C. Sec. 341(a) in the Chapter 11 case of Commonwealth Group -
Mocksville Partners, LP, on Nov. 28, 2012, at 9:00 a.m. at BK
Meeting Room, First Floor, in Knoxville, Tenn.
Proofs of claim are due Feb. 26, 2013.
About Commonwealth Group - Mocksville Partners
Commonwealth Group-Mocksville Partners, LP, filed a bare-bones
Chapter 11 petition (Bankr. E.D. Tenn. Case No. 12-34319) on
Oct. 25, 2012, in Knoxville, Tennessee. The Debtor's principal
assets are located at Cooper Creek Drive, in Mocksville, North
Carolina. Judge Richard Stair Jr. presides over the case.
Maurice K. Guinn, Esq., at Gentry, Tipton & McLemore P.C., serves
as counsel. The Debtor estimated assets and debts of $10 million
to $50 million. The formal schedules of assets and liabilities
are due Nov. 8, 2012. The petition was signed by Milton Turner,
chief manager and general partner.
COVANTA HOLDINGS: Fitch Rates $335-Mil. Unsecured Bonds 'BB+'
-------------------------------------------------------------
Fitch Ratings has assigned its 'BB+' rating to the proposed
issuance of Covanta Holdings Corporation's (Covanta) $335 million
unsecured tax-exempt bonds with maturities ranging from 12-30
years. These bonds are guaranteed by Covanta's wholly owned
subsidiary, Covanta Energy Corporation (CEC). In addition, Fitch
has upgraded its rating for the $1.2 billion senior secured
facilities at CEC to 'BBB-' from 'BB+'.
Fitch has affirmed the Issuer Default Ratings (IDR) of 'BB' for
Covanta and CEC. The IDRs of Covanta and CEC are linked due to a
high degree of business, legal and financial linkages. The Rating
Outlook is Stable for both the entities. Fitch has also affirmed
its 'BB' rating for Covanta's existing 6.375% $400 million senior
unsecured notes due 2022, 7.25% $400 million senior unsecured
notes due 2020 and 3.25% $460 million cash convertible senior
notes due 2014.
The net proceeds from the new $335 million issuance of tax-exempt
bonds by Covanta will be used to refinance Haverhill, Niagara and
SEMASS project bonds, which all together have a face value of $328
million. In addition, the transaction will raise $20 million in
new proceeds to fund qualifying capital expenditures in
Massachusetts. In Fitch's view, the proposed transaction enhances
Covanta's consolidated debt maturity profile and is modestly
positive for liquidity given the release of project restricted
funds that result in approximately $52 million of net cash
proceeds to the company. However, the transaction results in
modestly higher leverage in 2013 and beyond compared to Fitch's
prior forecasts given that amortizing project debt is being
replaced with bonds with long-term bullet maturities.
Fitch views the proposed transaction as favorable for CEC's
secured debt since its relative position in the overall capital
structure is improved due to a reduction in the amount of project-
level debt outstanding that was structurally superior. Pro forma
for the transaction, the project debt at CEC's various domestic
project subsidiaries will be $275 million as compared to $603
million preceding the transaction. The release of liens due to
the prepayment of project debt enhances the collateral package for
CEC's secured debt. As a result, Fitch has upgraded the ratings of
CEC's secured debt by one-notch. The proposed new tax-exempt
bonds are notched one-level higher than Covanta's existing
unsecured debt due to the upstream guarantee from CEC.
The 'BB' IDR reflects Covanta's reliance on distributions from its
wholly owned subsidiary, CEC, which, in turn, derives cash flow
from upstream distributions by its numerous project subsidiaries.
Covanta's ratings reflect its visible and sustainable cash flow
generation from highly contracted waste disposal and energy
revenue with credit-worthy counterparties and a small, but
increasing proportion of recycled metal sales. Covanta enjoys a
strong liquidity position including a stable free cash flow
profile, manageable debt maturities and consistently demonstrated
capital markets access. The ratings also reflect a highly
leveraged capital structure and structural subordination of
corporate debt to the debt at various project subsidiaries.
Fitch has modestly reduced its revenue and EBITDA expectations for
Covanta for the near term as challenging economic conditions
persist. Fitch expects waste volumes to be slightly lower than
its prior forecast. Fitch expects Covanta's waste and service fee
revenue to benefit from contractual escalations in tip and service
fees, which are usually indexed to inflation and an increase in
higher priced, special waste volume in the overall mix. Covanta's
service and waste disposal agreements expire at various times and
the company has been successful in extending a majority of its
existing contracts. However, Fitch expects that the average
contract length for waste and energy revenues if going to become
shorter as historical contracts roll-off. There are several
service-fee owned contracts that face contract expiration over
2014-2016 and will likely get extended or transition to tip-fee
structure, in Fitch's opinion.
Continued weakness in natural gas prices has negatively affected
power prices leading to a lower energy revenue expectation than
Fitch's prior estimates. Fitch recently lowered its natural gas
price outlook to $2.75/3.50/4.00 per MMBtu for 2012/2013/2014,
respectively. Approximately, 80% of Covanta's retained
electricity production in under contract and/or hedged for 2013.
However, with the roll-off of historical contracts, a greater
proportion of energy revenues will get exposed to market-driven
rates.
Fitch expects a strong growth in recycled metal revenues driven by
higher metal recoveries. Covanta has been channeling a portion of
its surplus cash toward smaller projects that can drive organic
growth. These include modest capital investments to enhance metal
recovery during waste-to-energy conversion. Fitch also expects a
shift in mix to non-ferrous metals, which would further boost the
metal revenue. The pricing environment for both ferrous and non-
ferrous metals, however, has turned soft during 2012 with the
slowdown of major global economies.
Fitch expects consolidated EBITDA to be under pressure over 2012-
2014 driven by weaker energy revenues, partially offset by an
increase in metal revenue and a shift in mix toward higher priced
special waste. Toward the latter part of the forecast period,
Fitch expects EBITDA growth to rebound from improved power prices,
higher retained share of electricity production and sustained
growth in metal revenues. Fitch expects the free cash flow
generation to remain more or less stable over 2012-2014 and then
be negatively impacted from higher cash tax payout due to the
expiration of net operating losses, offset by EBITDA growth.
Fitch expects the company to generate surplus cash flow of
approximately $100 million annually over the next five years after
netting dividend, maintenance and growth capex. In absence of
significant development projects and after meeting the declining
scheduled project debt payments, Fitch considers it likely that
management will use the surplus cash to return to shareholders.
Covanta will be de-leveraging its capital structure due to the
scheduled pay down of project debt, which will minimize structural
subordination of cash flows and is positive for the credit
profile. It is quite likely that management may raise debt at the
corporate level in order to utilize the freed up capacity and use
the proceeds to further return capital to shareholders. Any
significant re-levering of the balance sheet would be negative for
Covanta's credit profile and could warrant a downward revision in
ratings.
Covanta's financial flexibility is quite robust given a healthy
cash flow generation profile, adequate liquidity and sufficient
flexibility to allocate surplus capital within the limitations of
the existing and proposed debt instruments. As of Sept. 30, 2012,
Covanta had unrestricted cash and cash equivalents of $262 million
and availability under its revolver of $597 million.
Fitch estimates Covanta's consolidated gross leverage to be
approximately 4.0 times and funds flow from operations (FFO) to
total debt to approach 15% toward the end of Fitch's forecast
period (2015). These metrics are in line with Fitch's guideline
ratios for a medium-risk 'BB' rated issuer.
The Stable Outlook for Covanta incorporates Fitch's expectation
that its cash flow generation remains solid and credit metrics
remain stable over the forecast period supported by a strong
liquidity profile that should enable the company to withstand any
worsening of the commodity downturn.
Fitch's rating concerns include increasing business risk as
historical, long tenured waste, service and energy contracts
expire and the proportion of commodity-driven organic initiatives,
which include metal sales and special waste, rise. Covanta has
pursued an aggressive capital allocation policy that is directed
toward returning capital to shareholders over the last two years.
Ratings Triggers:
Positive: Any positive rating actions in the near term will likely
be driven by any material change in the company's capital
allocation decisions.
Negative: Fitch could take negative rating actions if management
were to seek additional leverage to return capital to shareholders
or to materially increase capital spending.
Fitch has assigned the following ratings with a Stable Outlook:
Covanta Holding Corporation
-- $335 million unsecured tax-exempt bonds 'BB+'.
Fitch has upgraded the following ratings with a Stable Outlook:
Covanta Energy Corporation
-- $900 million senior secured revolver due 2017 to 'BBB-' from
'BB+';
-- $300 million senior secured term loan due 2019 to 'BBB-' from
'BB+'.
Fitch has affirmed the following ratings with a Stable Outlook:
Covanta Holding Corporation
-- Long-term IDR at 'BB';
-- $$400 million 7.25% senior unsecured notes due 2020 at 'BB';
-- $$400 million new senior unsecured notes due 2022 at 'BB';
-- $406 million 3.25% cash convertible senior notes due 2014 at
'BB'.
Covanta Energy Corporation
-- Long-term IDR at 'BB'.
COVANTA HOLDINGS: S&P Rates $335MM Sr. Unsec. Revenue Bonds 'BB-'
-----------------------------------------------------------------
As previously announced, Standard & Poor's Ratings Services said
it assigned its 'BB-' issue-level rating to energy-from-waste
(EFW) generator Covanta Holding Corp.'s $335 million senior
unsecured revenue bonds ($165 million issued by Niagara Area
Development Corp. and $170 million issued by the Massachusetts
Development Finance Agency). The recovery rating is '3',
indicating S&P's expectation that lenders would receive a
meaningful (50%-70%) recovery of principal if a default occurs.
The new debt has bullet maturities in 2024, 2027, and 2042.
Covanta is the obligor and CEC is the guarantor.
At the same time, Standard & Poor's lowered its issue ratings on
Covanta's existing unsecured notes to 'B' from 'B+', based on a
revision of the recovery rating on this debt to '6' from '5'. The
recovery rating of '6' indicates S&P's expectation that lenders
would receive a negligible recovery (0%-10%) recovery of principal
under our default scenario. Standard & Poor's also affirmed its
'BB-' long-term corporate credit rating on Covanta and Covanta
Energy Corp. (CEC). The outlook is stable. In addition, Standard &
Poor's affirmed its 'BB+' rating on CEC's existing senior secured
debt at 'BB+' with a recovery rating of '1', indicating S&P's
expectation that lenders would receive a very high (90%-100%)
recovery.
"The ratings reflect what we view as an 'aggressive' financial
risk profile, with high debt balances, a capital-intensive
business, and increased use of free cash flow to pay for dividends
and share repurchases," said Standard & Poor's credit analyst
Trevor D'Olier-Lees. "We view Covanta's business risk profile as
'satisfactory', reflecting steady cash distributions from
operating assets that are mostly contracted with highly
creditworthy municipal and county governments, good operations
history, average boiler availability of about 90, and the waste
business' generally favorable risk characteristics," S&P said.
"Covanta owns and operates large EFW and renewable energy
projects. It is the largest EFW operator in North America, with 40
EFW facilities with a concentration in the U.S. Northeast. It also
has four facilities in China and Italy. Annually, the company
processes about 20 million tons of waste (about 5% of all U.S.
waste). It produces about 10 million megawatt-hours annually from
more than 1,500 megawatts of capacity and recycles 430,000 tons of
metal annually," S&P said.
"The stable outlook reflects Standard & Poor's expectation of
predictability and stability of cash flows from existing waste and
power contracts combined with reduced new project development, and
continued deleveraging of existing project debt. Under our base
case, we expect that adjusted FFO-to-debt will likely average
about 15.4% through 2016 and the adjusted debt to EBITDA ratio,
which is weak for aggressive financial risk profile, to improve
gradually to 4.9x in 2014 and 4.2x in 2016. However, if the
company fails to meet our base case forecasts,, which could result
from operating problems, a weaker merchant environment,
fluctuations in metal prices, a general economic downturn, and
the expected debt to EBITDA remains materially above 5x, we could
lower the ratings. We would also view another hike in dividends as
negative for credit and any borrowing to fund shareholder
dividends or stock purchases would likely lead to a downgrade.
Although less likely, given the increased use of cash flow to
finance shareholder rewards instead of reducing debt, we could
consider an upgrade if we see continued solid operations,
stability in financial policy, and paying down of consolidated
debt that results in financial risk ratios more in line with a
significant financial risk profile such as a debt-to-EBITDA of
less than 4x," S&P said.
CROATAN SURF: OK'd to Sell 35 Residential Condominium Units
-----------------------------------------------------------
The Hon. Stephani W. Humrickhouse of the U.S. Bankruptcy Court for
the Eastern District of North Carolina authorized Croatan Surf
Club, LLC to sell:
-- the 35 condominium units in that certain 36-unit residential
condominium project known as the Croatan Surf Club and
located in Kill Devil Hills, Dare County, North Carolina;
-- all furniture, fixtures, equipment and other personal
property located on or associated with the units; and
-- all rents, profits and income generated or to be generated
by the units.
The sale of the property to View LLC will be in lieu of the
foreclosure of the security instruments securing the Royal Bank
America Loan and Edwards Family Partnership, LP Loan.
View LLC is the current holder of the note and other loan
documents evidencing and securing the RBA Loan, and has filed a
transfer of claim in the bankruptcy proceeding.
As reported in the Troubled Company Reporter on Oct. 16, 2012, the
Court valued the property, including the Debtor's cash on hand and
adequate protection payments held in escrow, at $19,148,655. RBA
has an allowed secured claim in the amount of $18,008,562.
The Debtor's property secures loans to, among others, Royal Bank
of America and Edwards Family Partnership, LP. For the
development of the property, RBA agreed to extend a loan of
$17 million to the Debtor on a senior secured basis pursuant to a
loan and security agreement between RBA and the Debtor on December
2007 RBA took a first priority security interest in the property,
together with other assets of the Debtor. Edwards Family provided
$3 million in additional mezzanine financing to the development.
A copy of the sale motion is available for free at
http://bankrupt.com/misc/CROATANSURF_sale.pdf
The Bankruptcy Administrator stated that it objects to the sale
absent adequate assurance that the Debtor will have the funds
necessary to pay quarterly fees, as a result of the sale.
The Court, in its order and in response to the objection, required
that the Debtor's cash on hand, all funds held in the Debtor's DIP
account and any funds held by Village Realty with respect to rents
received from the property are to be paid over to View LLC in
connection with the transfer of the property to View LLC;
provided, however, the Debtor will retain sufficient funds in the
Debtor's DIP accounts to satisfy payment of any quarterly fees for
the quarters ending Sept. 30, 2012, and Dec. 31, 2012, and
provided further that the Debtor will use said retained funds to
timely pay the quarterly fees.
Rule 9019 Order
On June 28, 2012, the Court entered an order pursuant to F.R.B.P.
Rule 9019 approving a settlement of an adversary proceeding
commenced on May 10, 2010, against RBA and Bank of Currituck, now
known as Curritick Resolution Properties, Inc., in the North
Carolina General Court of Justice, Senior Court Division. As
contemplated by the 9019 Order, RBA and EFP entered into a
Mortgage Loan Sale Agreement dated May 31, 2012, pursuant to which
EFP or its designee agreed to purchase from RBA all right, title
and interest in and to the RBA Loan.
EFP assigned all of its interest in the Mortgage Loan Sale
Agreement to View, L.L.C., a Delaware limited liability company
wholly owned by EFP, and on June 29, 2012, View LLC purchased all
right, title and interest in and to the RBA Loan from RBA pursuant
to the Mortgage Loan Sale Agreement. View LLC is the current
holder of the note and other loan documents evidencing and
securing the RBA Loan, and has filed a Transfer of Claim in the
bankruptcy proceeding.
After the closing of the Mortgage Loan Sale Agreement, the Debtor
paid KDHWTTP, LLC's Sewer Claim of $10,566 in full.
The Debtor, the Guarantors, RBA and CRP have filed a stipulation
of dismissal with prejudice of the adversary proceeding
About Croatan Surf Club
Croatan Surf Club, LLC owns a 36-unit condominium complex in Kill
Devil Hills, North Carolina. It filed for Chapter 11 bankruptcy
protection (Bankr. E.D.N.C. Case No. 11-00194) on Jan. 10, 2011.
Walter L. Hinson, Esq., at Hinson & Rhyne, P.A., in Wilson, N.C.,
serve as counsel to the Debtor. Kevin J. Silverang, Esq., and
Philip S. Rosenzweig, Esq., at Silverang & Donohoe, LLC, in St.
Davids, Pa., serve as co-counsel to the Debtor. No creditors
committee has been formed in the case. In its schedules, the
Debtor disclosed $26,151,718 in assets and $19,350,000 in
liabilities.
CYCLONE POWER: James Landon to Act as Interim CEO
-------------------------------------------------
Cyclone Power Technologies, Inc., said that James C. Landon, who
currently serves on the Company's Board of Directors, will assume
the role of Chief Executive Officer on an interim basis effective
immediately. Harry Schoell, the Company's co-founder, Chairman
and previous CEO, will fill the new position of Chief Technology
Officer. The move will allow Mr. Schoell to focus full time on
technology development and innovation for the Company.
Mr. Landon is also President of Landon & Associates P.A., a CPA
firm in Florida. He is a member of the American Institute of
Certified Public Accountants, the Florida Institute of Certified
Public Accountants, the Association of Certified Fraud Examiners,
and the past President of the South Florida Chapter of the
Association of Certified Fraud Examiners.
Mr. Landon has considerable experience in the manufacturing world,
holding positions for several companies over the years as vice
president of operations, vice president of finance and
administration, chief financial officer and president. Mr. Landon
received his Bachelor of Engineering Science from The Johns
Hopkins University, and his Master of Science in Administration
with a concentration in Business Financial Management from The
George Washington University.
Mr. Landon is a director of US Lacrosse, Inc., and chairs their
Strategic Planning Committee, a director of the South Florida
Chapter of US Lacrosse, a director of the Florida Youth Lacrosse
Foundation, and a director of Children Hope and Horses
Corporation.
Compensation for Mr. Landon has not been determined at the current
time.
About Cyclone Power
Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink
Sheets: CYPW) is a clean-tech engineering company, whose business
is to develop, commercialize and license its patented Rankine
cycle engine technology for applications ranging from renewable
power generation to transportation. The Company is the successor
entity to the business of Cyclone Technologies LLLP, a limited
liability limited partnership formed in Florida in June 2004.
Cyclone Technologies LLLP was the original developer and
intellectual property holder of the Cyclone engine technology.
The Company reported a net loss of $23.70 million in 2011,
compared with a net loss of $2.02 million in 2010.
The Company's balance sheet at June 30, 2012, showed $1.68 million
in total assets, $3.79 million in total liabilities and a $2.11
million total stockholders' deficit.
In its audit report for the year ended Dec. 31, 2011, results,
Mallah Furman, in Fort Lauderdale, FL, noted that the Company's
dependence on outside financing, lack of sufficient working
capital, and recurring losses raises substantial doubt about its
ability to continue as a going concern.
DAIS ANALYTIC: Repays $1.3MM Conv. Note to Platinum-Montaur
-----------------------------------------------------------
Dais Analytic Corporation repaid $1,323,561 to satisfy and
terminate an unsecured convertible promissory note issued to
Platinum-Montaur Life Sciences, LLC. With the repayment of the
Convertible Note, the Company also terminated a forbearance
agreement, dated June 15, 2012, with Platinum Montaur.
The Convertible Note was originally issued by the Company in
December 2009. Pursuant to the original terms of the Convertible
Note, the Company was to pay Platinum-Montaur interest at the rate
of 10%. In connection with the repayment of the Convertible Note,
the Company and Platinum-Montaur entered into the Forbearance
Agreement. Pursuant to the Forbearance Agreement and, commencing
on the date thereof, the Convertible Note accrued interest at the
rate of 20% per annum, and Platinum-Montaur was granted rights,
under certain conditions, to receive and dispose of certain of the
Company's assets to repay the Convertible Note.
With the repayment of the Convertible Note, the Convertible Note
and Forbearance Agreement were terminated. There were no early
termination penalties or other penalties associated with the
termination of the Convertible Note or Forbearance Agreement.
With the payment on July 13, 2012, of all outstanding principal
and interest due pursuant to the Secured Convertible Promissory
Note, issued to Platinum-Montaur on March 22, 2011, the Company
has repaid all debt obligations to Platinum-Montaur.
About Dais Analytic
Odessa, Fla.-based Dais Analytic Corporation has developed and
patented a nano-structure polymer technology, which is being
commercialized in products based on the functionality of these
materials. The initial product focus of the Company is ConsERV,
an energy recovery ventilator. The Company also has new product
applications in various developmental stages.
In the auditors' report accompanying the financial statements for
year ended Dec. 31, 2011, Cross, Fernandez & Riley LLP, in
Orlando, Florida, expressed substantial doubt about the Company's
ability to continue as a going concern. The independent auditors
noted that the Company has incurred significant losses since
inception and has a working capital deficit and stockholders'
deficit of $3.22 million and $4.90 million at Dec. 31, 2011.
The Company reported a net loss of $2.33 million in 2011,
compared with a net loss of $1.43 million in 2010.
The Company's balance sheet at June 30, 2012, showed $1.16 million
in total assets, $5.81 million in total liabilities, and a
$4.64 million total stockholders' deficit.
DENNY'S CORP: Files Form 10-Q, Reports $5.3-Mil. Net Income in Q3
-----------------------------------------------------------------
Denny's Corporation filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $5.36 million on $120.94 million of total operating revenue for
the quarter ended Sept. 26, 2012, compared with net income of
$7.98 million on $136.68 million of total operating revenue for
the quarter ended Sept. 28, 2011.
The Company reported net income of $15.82 million on
$372.41 million of total operating revenue for the three quarters
ended Sept. 26, 2012, compared with net income of $20.23 million
on $408.34 million of total operating revenue for the three
quarters ended Sept. 28, 2011.
The Company's balance sheet at Sept. 26, 2012, showed
$325.85 million in total assets, $325.29 million in total
liabilities and $563,000 in total shareholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/VsbrXI
About Denny's Corporation
Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ:
DENN) -- http://www.dennys.com/-- Denny's is one of America's
largest full-service family restaurant chains, consisting of 1,348
franchised and licensed units and 232 company-owned units, with
operations in the United States, Canada, Costa Rica, Guam, Mexico,
New Zealand and Puerto Rico.
The Company said in its annual report for the year ended Dec. 28,
2011, that as the Company is heavily franchised, its financial
results are contingent upon the operational and financial success
of its franchisees. The Company receives royalties, contributions
to advertising and, in some cases, lease payments from its
franchisees. The Company has established operational standards,
guidelines and strategic plans for its franchisees; however, the
Company has limited control over how its franchisees' businesses
are run. While the Company is responsible for ensuring the
success of its entire chain of restaurants and for taking a longer
term view with respect to system improvements, the Company's
franchisees have individual business strategies and objectives,
which might conflict with the Company's interests. The Company's
franchisees may not be able to secure adequate financing to open
or continue operating their Denny's restaurants. If they incur
too much debt or if economic or sales trends deteriorate such that
they are unable to repay existing debt, it could result in
financial distress or even bankruptcy. If a significant number of
franchisees become financially distressed, it could harm the
Company's operating results through reduced royalties and lease
income.
* * *
Denny's carries 'B2' corporate family and probability of default
ratings from Moody's Investors Service.
DEWEY & LEBOEUF: Has Access to Cash Collateral Until Nov. 18
------------------------------------------------------------
In a fourth supplemental order dated Nov. 2, 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) 11:59 p.m. on the fifth day
following the "termination declaration date", or (b) 11:59 p.m. on
Nov. 18, 2012. The "challenge period" as defined in the final
order and as extended in the second and third supplemental orders
will be extended for a additional 30 days. A copy of the Final
cash collateral order is available at:
http://bankrupt.com/misc/dewey.doc91.pdf
About Dewey & LeBoeuf
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 LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
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: Collects $11.5-Mil. in Fees During September
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Dewey & LeBoeuf LLP collected $11.5 million in fees
from former clients in September. Collections allowed the former
law firm to pay $6.1 million to secured creditors during the
month. Despite the so-called cash sweep, cash grew by
$1.28 million during September, to end the month at $25.6 million.
The former law firm's operating report filed with the bankruptcy
court in New York shows how Dewey collected $63.5 million in fees
since bankruptcy began.
About Dewey & LeBoeuf
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 LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
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: Can Employ Adam A. Wescher to Sell Artwork
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has granted Dewey & LeBoeuf LLP permission to (a) employ Adam A.
Wescher & Son, Inc., as auctioneer, and (b) to sell the Debtor's
collection of artwork pursuant to private auctions.
As reported in the TCR on Oct. 9, 2012, the Debtor listed the
artwork as having a book value of $2.3 million in its schedules of
assets and liabilities. The Debtor, however, believes this book
value does not accurately represent the current value of the
artwork.
Pursuant to the terms of the Weschler Agreements, Weschler will be
entitled to these commissions from the successful sale of the
artwork for capital collection and single owner auctions:
Aggregate Sale Price Commission Rate
-------------------- ---------------
Up to $99,999 10% Commission
$100,000 to $299,999 8% Commission
$300,000 to $499,999 6% Commission
Over $500,000 4% Commission
For metro auctions, Weschler will be entitled to a flat 15%
commission from the sale of the artwork based on the final bid
price.
Weschler will also be to charge purchasers of the artwork a fee as
follows: (i) for capital collection and single-owner auctions an
amount equal to 18% if paid by cash and 20% if paid by credit
card; (ii) for metro auctions an amount equal to 15% if paid by
cash and 18% if paid by credit card; and (iii) any other
reasonable fees charged to the purchaser, such as shipping and
handling costs. Weschler's collection of the buyer's premiums
will not be considered proceeds for the purpose of calculating the
commission.
About Dewey & LeBoeuf
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 LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
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: Lawsuit Against Ex-Leaders Goes to NY Bank. Court
------------------------------------------------------------------
Sara Randazzo, writing for The Am Law Daily, reports that U.S.
Bankruptcy Court Judge Thomas Carlson in San Francisco,
California, on Wednesday sent to the Bankruptcy Court in Manhattan
a fraud lawsuit by former Dewey & LeBoeuf partner Henry Bunsow
against several former leaders of the defunct law firm.
The report notes the lawsuit, originally launched in California
state court in June, claims that former Dewey chairman Steven
Davis and others affiliated with the firm wooed new partners using
a Ponzi-like scheme that portrayed Dewey as fiscally stronger than
it actually was. The suit also names as defendants former Dewey
partner and litigation head Jeffrey Kessler, former executive
committee member James Woods, former chief financial officer Joel
Sanders, and former executive director Stephen DiCarmine.
According to Am Law Daily, late in July, Messrs. Davis, DiCarmine,
and Sanders successfully removed the lawsuit to federal bankruptcy
court in San Francisco by arguing that the litigation is related
to Dewey's Chapter 11 bankruptcy case and should therefore be
combined with those proceedings. Mr. Bunsow has continued to
insist that the case be heard in San Francisco state court because
it deals with state tort law claims and should be heard by a
California jury.
Messrs. Davis, DiCarmine, and Sanders also argued they should be
dropped as defendants in the suit and replaced by Dewey. This
issue remains unresolved.
According to Am Law Daily, Cecily Dumas, a bankruptcy attorney in
San Francisco who is representing Mr. Bunsow on the jurisdictional
issue, said Friday that while moving the case to New York will
cost money and time, she believes the law dictates that the case
ultimately must return to California state court.
The report relates Ned Bassen, a Hughes Hubbard & Reed partner
who represents Messrs. Davis, DiCarmine, and Sanders, said in an
e-mail that he and his clients are "pleased by the ruling and look
forward to [Bankruptcy Judge Martin] Glenn's consideration of the
matter."
The report also relates Morrison & Foerster partner Arturo
Gonzalez, who represents Mr. Kessler, now a partner at Winston &
Strawn, said he believes Mr. Bunsow's claims are against the firm
and that "they should be resolved in bankruptcy court."
The report notes that since Dewey's May 28 bankruptcy, Mr. Sanders
has moved to Florida to become the chief financial officer at
Greenspoon Marder, Mr. DiCarmine has begun taking classes at
Parsons The New School for Design, and Mr. Davis remains
unemployed.
About Dewey & LeBoeuf
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 LLP operated as a prestigious, New York City-
based, law firm that traced its roots to the 2007 merger of Dewey
Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird
-- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in
1929. In recent years, more than 1,400 lawyers worked at the firm
in numerous domestic and foreign offices.
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 EAST: Bank Debt Trades at 36% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media East LLC
is a borrower traded in the secondary market at 64.07 cents-on-
the-dollar during the week ended Friday, Nov. 2, 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 250 basis points above
LIBOR to borrow under the facility. The bank loan matures on
Oct. 24, 2014. The loan is one of the biggest gainers and losers
among 196 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About R.H. Donnelley & Dex Media East
Dex One, headquartered in Cary, North Carolina, is a local
business marketing services company that includes print
directories and online voice and mobile search.
R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media
East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter
11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852)
on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010.
On the Effective Date and in connection with its emergence from
Chapter 11, RHD was renamed Dex One Corporation.
Dex One reported a net loss of $518.96 million in 2011 compared
with a net loss of $923.59 million for the eleven months ended
Dec. 31, 2010.
* * *
As reported in the April 2, 2012 edition of the TCR, Moody's
Investors Service has downgraded the corporate family rating (CFR)
for Dex One Corporation's to Caa3 from B3 based on Moody's view
that a debt restructuring is inevitable. Moody's has also changed
Dex's Probability of Default Rating (PDR) to Ca/LD from B3
following the company's purchase of about $142 million of par
value bank debt for about $70 million in cash. The Caa3 rating
also reflects Moody's view that additional exchanges at a discount
are likely in the future since the company amended its bank
covenants to make it possible to repurchase additional bank debt
on the open market through the end of 2013.
As reported by the TCR on April 4, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Cary, N.C.-based
Dex One Corp. and related entities to 'CCC' from 'SD' (selective
default). "The upgrade reflects our assessment of the company's
credit profile after the completion of the subpar repurchase
transaction in light of upcoming maturities, future subpar
repurchases, and our expectation of a continued week operating
outlook," explained Standard & Poor's credit analyst Chris
Valentine.
DEX MEDIA WEST: Bank Debt Trades at 34% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Dex Media West LLC
is a borrower traded in the secondary market at 66.07 cents-on-
the-dollar during the week ended Friday, Nov. 2, an increase of
0.36 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 196 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: Court OKs FTI Consulting, Pachulski Stang Hiring
----------------------------------------------------------------
BankruptcyData.com reports that the U.S. Bankruptcy Court approved
Digital Domain Media Group's motions to retain FTI Consulting and
to appoint a chief restructuring officer, associate restructuring
officer, vice president of development and additional personnel;
Pachulski Stang Ziehl & Jones as counsel; Cassels Brock and
Blackwell as Canadian counsel and Cadwalader, Wicksham & Taft as
special counsel.
About Digital Domain
Port St. Lucie, Florida-based Digital Domain Media Group, Inc. --
http://www.digitaldomain.com/-- engaged 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,
2012, to sell its business for $15 million to Searchlight Capital
Partners LP, subject to higher and better offers.
At the auction on Sept. 21, the principal part of the business was
purchased by a joint venture between Galloping Horse America LLC,
an affiliate of Beijing Galloping Horse Co., and an affiliate of
Reliance Capital Ltd., based in Mumbai. The $36.7 million total
value of the contact includes $3.6 million to cure defaults on
contracts and $2.9 million in reimbursement of payroll costs.
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.
The Debtors also have sought ancillary relief in Canada, pursuant
to the Companies' Creditors Arrangement Act in the Supreme Court
of British Columbia, Vancouver Registry.
DIXIE MOTOR: Chapter 11 Case Summary & 2 Unsecured Creditors
------------------------------------------------------------
Debtor: Dixie Motor Sales, LLC
600 SE 5th Ave.
Delray Beach, FL 33483
Bankruptcy Case No.: 12-35709
Chapter 11 Petition Date: October 27, 2012
Court: United States Bankruptcy Court
Southern District of Florida (West Palm Beach)
Judge: Paul G. Hyman Jr.
Debtor's Counsel: Angelo A. Gasparri, Esq.
THE LAW OFFICES OF ANGELO A. GASPARRI, PA
1080 S. Federal Hwy
Boynton Beach, FL 33435
Tel: (561) 826-8986
E-mail: angelo@drlclaw.com
Scheduled Assets: $1,750,000
Scheduled Liabilities: $891,113
A copy of the Company's list of its two largest unsecured
creditors filed together with the petition is available for free
at http://bankrupt.com/misc/flsb12-35709.pdf
The petition was signed by Stephen Cavasini, manager.
DM DEVELOPMENT: Chapter 11 Reorganization Case Dismissed
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
dismissed the involuntary Chapter 11 case of DM Development, LLC.
Financial Service Advisors filed for an involuntary Chapter 11
petition for New York-based DM Development LLC, doing business as
Doylem Development LLC (Bankr. S.D.N.Y. Case No. 12-12709) on
June 26, 2012. Bankruptcy Judge Martin Glenn presides over the
case.
DUNE ENERGY: Incurs $1.4 Million Net Loss in Third Quarter
----------------------------------------------------------
Dune Energy, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.39 million on $13.44 million of revenue for the three months
ended Sept. 30, 2012, compared with a net loss of $10.23 million
on $15.10 million of revenue for the same period during the prior
year.
The Company reported a net loss of $4.10 million on $39.94 million
of revenue for the nine months ended Sept. 30, 2012, compared with
a net loss of $32.44 million on $48.41 million of revenue for the
same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$241.08 million in total assets, $118.88 million in total
liabilities and $122.19 million in total stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/ZclJgU
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.
* * *
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.
DUNLAP OIL: Nov. 13 Final Hearing on Use of Cash Collateral
-----------------------------------------------------------
Dunlap Oil Company Inc. and Quail Hollow Inn LLC won interim
authority to use cash tied to prepetition obligations to their
secured lenders. The Debtors said they require the use of cash
collateral to operate their businesses and reorganize.
The Debtors' primary secured creditors are Canyon Community Bank,
which asserts an indebtedness of roughly $6.275 million, and
Compass Bank, which asserts an indebtedness of roughly
$5.44 million.
In addition, Dunlap Oil's primary fuel supplier, Jackson Oil
Company, asserts an interest in Dunlap Oil's Chevron brand fuels,
including proceeds.
To the extent that CCB, Compass, Jackson, or any other creditor
demonstrates a perfected interest in the Cash Collateral, as
adequate protection of any creditor's interest in the Cash
Collateral, the Debtors have agreed to grant replacement liens on
all similar collateral generated postpetition to the same extent,
validity and priority as any liens attached to its prepetition
collateral.
A final hearing on the Debtors' request for use of cash collateral
is scheduled for Nov. 13 at 9:30 a.m.
In a separate ruling, Chief Judge Marlar authorized the joint
administration of the Debtors' cases for procedural purposes only.
Judge Marlar did not rule on the Debtors' request to transfer the
assignment (if necessary) of the In re Quail Hollow Inn case. The
case had not yet been assigned when the Motion was filed. Because
both cases were assigned to Chief Judge Marlar upon filing, there
is no need for transfer.
About Dunlap Oil and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
Judge James M. Marlar presides over the case. John R. Clemency,
Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A.,
serve as the Debtors' counsel. Peritus Commercial Finance LLC
serves as financial advisor.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
DUNLAP OIL: U.S. Trustee Wants Critical Vendors Identified
----------------------------------------------------------
Ilene J. Lashinsky, the United States Trustee for the District of
Arizona, filed a response to the request of Dunlap Oil Company
Inc. and Quail Hollow Inn LLC to pay prepetition claims of
critical vendors and make ongoing payment arrangements with
Jackson Oil Company, Dunlap Oil's primary fuel supplier.
"There is no doubt that without fuel and certain other supplies
the Debtors' operations will go dark. However, the Debtors'
request seems to beg the question as to the 'critical' nature of
the vendors for which they seek to deem to select to compensate.
They want the Court to approve an amount, but not require them to
pay it," said Larry L. Watson, Esq., the U.S. Trustee's Trial
Attorney. He may be reached at:
Larry L. Watson, Esq.
Trial Attorney
230 N. First Ave, Suite 204
Phoenix, AZ 85003
Tel: (602) 682-2607
E-mail: larry.watson@usdoj.gov
According to the U.S. Trustee, the Debtors appear to be asking to
engage in the murky world of preferring one vendor over another.
The Debtors cannot be in a place to "pick and choose" who they
deem necessary to compensate as being "critical." The U.S.
Trustee said this process opens the door to the Debtors to
negotiate for better terms with vendors that "make the list."
This negotiation indicates that such vendors are not actually
"critical" in nature.
According to the U.S. Trustee, the Debtors need to specifically
identify which vendors they deem critical, the terms upon which
they are required to obtain goods and services, and supporting
documentation that such vendors are critical to the Debtors
reorganization.
About Dunlap Oil and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
Judge James M. Marlar presides over the case. John R. Clemency,
Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A.,
serve as the Debtors' counsel. Peritus Commercial Finance LLC
serves as financial advisor.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
DUNLAP OIL: Has Interim OK to Hire Gallagher & Kennedy as Counsel
-----------------------------------------------------------------
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, won interim
authority from the Bankruptcy Court to employ Gallagher & Kennedy,
P.A., as general bankruptcy and restructuring counsel.
The Court directed the Debtors to provide notice of the Interim
Order and the employment application, and an opportunity to
object, to all parties entitled to notice under Bankruptcy Rules
2014 and 6003. If no objection is filed within 21 days after
service of the Order and Application, then the retention of
Gallagher & Kennedy will be deemed approved on a final basis
without the need for further hearing or Court order. If a timely
objection is filed, the Debtors are directed to obtain a hearing
date so that the Court can further consider the Application and
any objections.
G&K has advised the Debtors that the current hourly rates for the
attorneys that are expected to have primary responsibility for
this representation are:
John Clemency $525 per hour
Lindsi M. Weber $325 per hour
Other G&K attorneys and paralegals may render services to the
Debtors as needed.
Generally, G&K's hourly rates fall within these ranges:
Shareholders $400 - $600
Associates $275 - $375
Paralegals $200 - $250
G&K represented the Debtors prepetition in relation to this
matter, and also with regard to negotiations with various lenders
regarding the indebtedness asserted by those lenders. In the 12
months prior to the bankruptcy filing, G&K billed and collected
$86,838.13 from the Debtors for services rendered and costs
incurred by G&K. In addition, G&K received $46,230 from the
Debtors prepetition, and is now holding the Retainer funds in
trust during the pendency of the case to be applied toward the
payment of G&K's approved compensation and expenses awarded in the
case pursuant to 11 U.S.C. Sec. 330(a)(1).
To the best knowledge of the Debtors, G&K does not hold or
represent any interest adverse to the Debtors. G&K currently is
not owed any unpaid professional fees or expenses in connection
with its representation of the Debtors prior to the Petition Date.
About Dunlap Oil and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
Judge James M. Marlar presides over the case. John R. Clemency,
Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A.,
serve as the Debtors' counsel. Peritus Commercial Finance LLC
serves as financial advisor.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
DUNLAP OIL: Files Schedules of Assets and Liabilities
-----------------------------------------------------
Dunlap Oil Company, Inc., filed with the Bankruptcy Court its
schedules of assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A - Real Property $17,587,000
B - Personal Property $2,597,727
C - Property Claimed as Exempt
D - Creditors Holding
Secured Claims $16,058,686
E - Creditors Holding Unsecured
Priority Claims $225,640
F - Creditors Holding Unsecured
Nonpriority Claims $1,663,549
----------- -----------
Total $20,184,727 $17,947,876
About Dunlap Oil and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
Judge James M. Marlar presides over the case. John R. Clemency,
Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A.,
serve as the Debtors' counsel. Peritus Commercial Finance LLC
serves as financial advisor.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
DUNLAP OIL: Hiring Peritus Commercial as Financial Advisor
----------------------------------------------------------
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, ask the
Bankruptcy Court for authority to employ Peritus Commercial
Finance LLC as their financial advisor.
Peritus is a full service business and financial consulting firm
with expertise in the areas of corporate finance and valuation,
mergers and acquisitions, financial restructuring, business
oversight, and litigation support. The Debtors have determined
that Peritus has the resources, expertise, and experience
necessary to serve as financial advisor.
Among other things, the Debtors will look to Peritus:
-- for advise in connection with cash flow and financing
issues; and with business and financial restructuring of
the company, and in the formulation, negotiation, and
confirmation of a chapter 11 reorganization plan;
-- to perform financial analysis of the Debtors' business
and operations; and perform valuation and feasibility
analyses; and
-- to provide overall financial oversight.
Peritus has advised the Debtors that the current hourly rates for
the professionals that are expected to have primary responsibility
for this engagement are:
Steve Odenkirk $200 per hour
Member $200 per hour
Prior to the Petition Date, the Debtors provided Peritus with an
advance fee retainer in the amount of $5,000. Prior to bankruptcy
filing, the Debtors incurred charges for services performed by
Peritus in the amount of $3,260 which were applied against the
Retainer. Accordingly, the remaining amount of the Retainer is
$1,740. Peritus has informed the Debtors that Peritus will hold
the Retainer in trust during the pendency of this case to be
applied toward the payment of Peritus approved compensation and
expenses awarded in the case pursuant to 11 U.S.C. Sec. 330(a)(1).
Peritus provided certain business, financial, and valuation
services to the Debtors prepetition. In the 12 months prior to
the bankruptcy filing, the Debtors paid Peritus professional fees
and expenses totaling $37,354, in addition to the Retainer. All
payments made by the Debtors to Peritus for professional fees and
expenses were incurred and paid in the ordinary course of business
of the Debtors and Peritus. Peritus currently is not owed any
unpaid professional fees or expenses in connection with
prepetition services rendered.
To the best knowledge of the Debtors, Peritus does not hold or
represent any interest adverse to the Debtors.
Peritus may be reached at:
Steve Odenkirk
PERITUS COMMERCIAL FINANCE LLC
674 E. Bridal Veil Falls Rd.
Oro Valley, AZ 85755
Tel: 520-360-2782
E-mail: steve@perituscf.com
About Dunlap Oil and Quail Hollow Inn
Dunlap Oil Company, Inc., and Quail Hollow Inn, LLC, sought
Chapter 11 protection (Bankr. D. Ariz. Case No. 12-23252 and
12-23256) on Oct. 24, 2012. Founded in 1958, Dunlap Oil is a
Willcox, Arizona-based operator of 14 gasoline services stations.
QOH owns the 89-room outside corridor Best Western Plus Quail
Hollow hotel in Willcox. The two companies are owned and operated
by the Dunlap family.
Judge James M. Marlar presides over the case. John R. Clemency,
Esq., and Lindsi M. Weber, Esq., at Gallagher & Kennedy, P.A.,
serve as the Debtors' counsel. Peritus Commercial Finance LLC
serves as financial advisor.
QOH declared assets of at least $1 million and debts exceeding
$10 million. DOC estimated assets and debts of $10 million to
$50 million.
The petitions were signed by Theodore Dunlap, president.
DYNEGY HOLDINGS: Adopts 2012 Long Term Incentive Plan
-----------------------------------------------------
In connection with emergence from Chapter 11 bankruptcy, Dynegy
adopted the 2012 Long Term Incentive Plan, effective as of Oct. 1,
2012, under which an aggregate of 6,084,576 shares of Dynegy
Common Stock are reserved for issuance as equity-based awards to
employees, directors and certain other persons. On Oct. 29, 2012,
the Compensation and Human Resources Committee of the Board
approved emergence awards in the form of non-qualified stock
options and restricted stock units for Dynegy's executive officers
and other key personnel. The awards were granted under the 2012
LTIP and include the following for Dynegy's executive officers:
Non-Qualified
Stock Options Stock Units
------------- -----------
Chief Executive Officer 273,059 105,281
Chief Operating Officer 81,918 31,585
Executive Vice Presidents 70,215 27,073
Also on Oct. 29, 2012, the newly constituted Corporate Governance
and Nominating Committee of the Board met with the Board's
independent compensation consultant, Meridian Compensation
Partners, LLC, to review the competitiveness of the compensation
program for non-employee directors at Dynegy. The results of such
review, which included an analysis that compared Dynegy's current
director compensation program to those at a selected industry peer
group, as well as a broader industry comparator group, were
presented to the committee. The Corporate Governance Committee
determined that certain changes to Dynegy's program were
appropriate based upon the Corporate Governance Committee's desire
to simplify and align compensation with prevailing market
practices. On Oct. 30, 2012, upon recommendation by the Corporate
Governance Committee, the Board approved the compensation to be
earned by each non-employee director who serves on the Board,
effective as of the Effective Date. Directors who are also
employees of Dynegy are not compensated for their service as
directors.
A copy of the Form 8-K is available for free at:
http://is.gd/j2EFwt
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 Inc. successfully completed its Chapter 11 reorganization
and emerged from bankruptcy October 1.
Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy
Danskammer, L.L.C. and Dynegy Roseton, L.L.C., remain under
Chapter 11 protection.
As of July 31, 2012, Dynegy Inc. had total assets of
$3.15 billion, total liabilities of $3.14 billion and total
stockholders' equity of $6.68 million.
EASTMAN KODAK: Unsecured Creditors Want to Sue 2nd Lien Lenders
---------------------------------------------------------------
Joseph Checkler, writing for Dow Jones' Daily Bankruptcy Review,
reported that the official committee of unsecured creditors in the
Chapter 11 case of Eastman Kodak Co. on Wednesday asked the
Bankruptcy Court for standing to sue the company's second-lien
lenders whose loans are secured by both Kodak's patents and some
of the company's bank accounts, along with patent-infringement
claims.
The report recounted that, when Kodak secured a $950 million
bankruptcy loan from a group led by Citigroup earlier this year,
the company made a deal with the second-lien lenders waiving the
right to challenge their claims. The creditors committee,
however, said a provision that calls for the second-lien lenders
to receive damages if certain Kodak patents are infringed upon
isn't enforceable.
"Such claims are therefore unencumbered and available to benefit
the Debtors' unsecured creditors," the committee said, according
to the report. The report noted that the committee argued that
because the patent-infringement money would be a "commercial tort"
claim, the documents describing the second-lien lenders loans
should contain more specific descriptions of what secures their
loans. The value of the patents themselves are all the second-
lien lenders should be entitled to, the committee said.
The report also said the committee argued that some of the
collateral that secures the second-lien loans involves foreign
patents and that the lenders "failed to perfect such alleged liens
under foreign law."
The report said a lawyer for the second-lien lenders didn't
immediately respond to a request for comment.
The report noted that the committee wants the matter heard at a
Nov. 14 hearing, but the havoc wreaked on Lower Manhattan by
Hurricane Sandy may have backed up the calendar for the U.S.
Bankruptcy Court downtown, which has been closed last week.
About Eastman Kodak
Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.
Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras. Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies with
strong balance sheets and an awareness of Kodak's liquidity
challenges.
In recent years, Kodak has been working to transform itself from a
business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies. Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.
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.
ELMIRA DOWNTOWN: Can Stay at First Arena for 2012-13 Season
-----------------------------------------------------------
Jason Whong at Stargazette.com reported Bankruptcy Judge Paul
Warren last month signed an interim order permitting Elmira
Downtown Arena LLC to pay $18,000 a month to stay at First Arena
for the rest of the 2012-13 ECHL season. The ruling dated Oct. 15
formalized a September agreement that allowed the Elmira Jackals
to begin the ECHL season at First Arena.
According to the report, the order allows Elm Arena LLC, which
holds the mortgage on the arena and has a deal to become the arena
owner, to receive the monthly payments, inspect the building, and
demand that Elmira Downtown Arena, controlled by Michigan
businessman Mostafa Afr, make repairs. The order said that if
Elmira Downtown Arena doesn't pay or maintain the arena, they must
leave the arena and surrender it to Elm Arena.
The report notes the Jackals, also controlled by Mr. Afr, play in
the arena by agreement with Elmira Downtown Arena. Elm Arena has
offered to let the Jackals play for free this season, which the
Jackals could do if Elmira Downtown Arena leaves the arena.
The report also notes that in October, Elm Arena, controlled by
local businessman Tom Freeman, asked the Court for permission to
demand documents and interview people from Elmira Downtown Arena
and other companies controlled by the Afr family, including M-Team
LLC, which operates the Jackals; Elmira Concessions Inc., believed
to handle food and drink at the arena; A&A Management, Mr. Afr's
accounting firm; and The Family Holding Co. Elm Arena attorney
David Rasmussen said he believes Mr. Afr runs First Arena and the
Elmira Jackals as a single enterprise, and though they are
separate business entities, their books are maintained
collectively with the other Afr-controlled companies.
A hearing on Elm Arena's request was set for Nov. 1.
Based in Elmira, New York, Elmira Downtown Arena, LLC, filed for
Chapter 11 protection on Aug. 16, 2012 (Bankr. W.D. N.Y. Case No.
12-21361). EDA is controlled by Michigan businessman Mostafa Afr.
Judge Paul R. Warren presides over the case. Joshua P. Fleury,
Esq., at Phillips Lytle LLP, represents the Debtor. The Debtor
estimated assets of $100,000, and $500,000, and debts of between
$1 million and $10 million.
FASTLANE ACQUISITION: Moody's Assigns 'B2' Corp. Family Rating
--------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
and probability of default rating to Fastlane Acquisition Company,
Inc., a new entity formed by affiliates of TPG Capital ("the
sponsor") that will merge into FPC Holdings, Inc. (the surviving
entity that directly owns FleetPride Corporation - collectively
referred to as "FleetPride") at transaction closing. Moody's also
assigned a B1 rating to Fastlane Acquisition Company, Inc.'s
proposed $425 million first lien senior secured term loan due 2019
and a Caa1 rating to the proposed $200 million second lien senior
secured term loan due 2020. The ratings outlook is stable.
Proceeds from the proposed bank debt combined with equity from the
sponsor will be used to fund the acquisition of FleetPride,
including the repayment of existing debt. The transaction is
expected to close in November.
The B2 rating reflects Moody's expectation that FleetPride will
increase its EBITDA through modest organic growth and the
contribution from acquisitions such that leverage will decline
below 6.5 times over the next 12 to 18 months. Deleveraging will
primarily have to come from EBITDA growth as Moody's expects the
company to use a portion of excess cash flow to fund acquisitions.
The rating also reflects Moody's view that FleetPride has a good
pro forma liquidity profile supported by expectations for
continued positive free cash flow, flexible financial covenants,
and capacity under the proposed $150 million asset-based revolving
credit facility (not rated).
Ratings assigned:
Fastlane Acquisition Company, Inc.
Corporate family rating at B2
Probability of default rating at B2
Proposed $425 million first lien senior secured term loan due
2019 at B1 (LGD3, 41%)
Proposed $200 million second lien senior secured term loan due
2020 at Caa1 (LGD5, 83%)
Ratings affirmed and to be withdrawn at transaction closing:
FleetPride Corporation
Corporate family rating at B2
Probability of default rating at B3
Senior secured revolving credit facility due 2016 at B1 (LGD3,
31%)
Senior secured term loan B due 2017 at B1 (LGD3, 31%)
Ratings Rationale
The B2 corporate family rating reflects FleetPride's high pro
forma leverage and modest interest coverage with EBITA to interest
expense expected in the 1.7 to 1.9 times range medium-term. The
rating also captures the cyclical nature of its end-markets and
ongoing acquisition activity as it seeks to consolidate the
fragmented heavy duty truck aftermarket parts market. Also
weighing on the rating is that the leveraged buyout decreases
financial flexibility and reduces the company's ability to
withstand another downturn. The rating is supported by the
company's meaningful size in its niche market and national
geographic footprint. While Moody's expects revenue to exhibit
cyclicality, the rating agency believes the longer-term demand for
aftermarket parts remains favorable. The rating also considers the
company's solid operating performance since the downturn and
consistent free cash flow generation through cycles.
The stable outlook reflects Moody's expectation that FleetPride
will exhibit a consistent decrease in overall leverage through
earnings growth and/or debt reduction. The outlook also reflects
Moody's expectation that FleetPride will report modestly positive
same branch revenue growth over the next year despite recent
softness.
FleetPride's ratings could be downgraded if a cyclical downturn
causes operating performance to weaken such that leverage does not
improve, EBITA to interest falls below 1.5 times, and/or free cash
flow turns negative. Acquisition spending that exceeds
expectations could also result in ratings pressure.
A ratings upgrade is unlikely near-term given FleetPride's high
starting point leverage and expectations for only moderate
improvement. Longer-term, a ratings upgrade could result from
continued improvements in operating performance and debt reduction
such that debt to EBITDA is sustained below 4.0 times and EBITA to
interest coverage exceeds 2.5 times.
Additional information can be found in the FleetPride Credit
Opinion published on Moodys.com.
The ratings are subject to the conclusion of the transactions, as
proposed, and Moody's review of final documentation.
The principal methodology used in rating FleetPride Corporation
was the Global Distribution & Supply Chain Services Industry
Methodology published in November 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.
FleetPride Corporation, based in The Woodlands, Texas, is an
independent U.S distributor of aftermarket heavy-duty truck and
trailer parts. The company is being acquired by affiliates of TPG
Capital.
FIRST PLACE: Case Summary & 3 Unsecured Creditors
-------------------------------------------------
Debtor: First Place Financial Corp.
185 E. Market Street
Warren, OH 44481
Bankruptcy Case No.: 12-12961
Chapter 11 Petition Date: October 28, 2012
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Debtor's Counsel: Neil B. Glassman, Esq.
BAYARD, P.A.
222 Delaware Avenue, Ste 900
Wilmington, DE 19801
Tel: (302) 655-5000
Fax: (302) 658-6395
E-mail: bankserve@bayardlaw.com
Estimated Assets: $100,000,001 to $500,000,000
Estimated Debts: $50,000,001 to $100,000,000
The petition was signed by David W. Gifford, chief financial
officer.
Debtor's List of Three Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
First Place Capital Junior Subordinated $16,321,915
Trust Debentures
Attn: Geoffrey Lewis
c/o Wilmington Trust
Capital Markets
and Agency Services
1100 N. Market St.
Wilmington, DE 19890-1615
First Place Capital Junior Subordinated $16,321,915
Trust II Debentures
Attn: Geoffrey Lewis
c/o Wilmington Trust
Capital Markets
and Agency Services
1100 N. Market St.
Wilmington, DE 19890-1615
First Place Capital Junior Subordinated $31,823.566
Trust III Debentures
Attn: Michael Wass
c/o Wilmington Trust
Capital Markets
and Agency Services
1100 N. Market St.
Wilmington, DE 19890-1615
FUSION TELECOMMUNICATIONS: Acquires NBS for $19.6 Million
---------------------------------------------------------
Fusion Telecommunications International, Inc., announced that,
through a wholly-owned subsidiary, it has acquired Network Billing
Systems, LLC, a Unified Communications and cloud services
provider. Headquartered in New Jersey, NBS generated
$26.5 million in revenue in fiscal 2011, more than 95% of which is
contracted and monthly recurring, and $4.9 million in adjusted
EBITDA. The combined Company is expected to generate between $65
and $70 million in annual revenue, and achieve positive adjusted
EBITDA in the beginning of 2013. The acquisition adds over 5,000
small, medium and large business customers to Fusion's Corporate
Services business segment, which delivers Unified Communications
and cloud service solutions to the business market. The
transaction also includes the acquisition of certain assets owned
by NBS' affiliated company. Upon completion of the integration
with NBS, Fusion expects to achieve approximately $2 million in
annual cost synergies, and additional revenue growth from the
cross-sale of the companies' combined products and services. The
expected performance of the combined companies, and the
integration of the advanced NBS service and delivery
infrastructure with its own, allows Fusion to more rapidly scale
its portfolio of cloud solutions, enabling the company to
accelerate its organic growth plans while providing a robust
platform for additional acquisitions.
The aggregate purchase price of $19.6 million consists of $17.75
million in cash, $600,000 evidenced by subordinated promissory
notes payable to the sellers, and $1.25 million in restricted
common stock of Fusion.
Matthew Rosen, Fusion's chief executive officer, said, "The
management of both companies is excited about the benefits
resulting from this transaction. In addition to adding
significant contracted monthly recurring revenue, a large and
growing customer base and positive adjusted EBITDA, the
acquisition adds a very experienced and highly qualified
management team and staff to Fusion's own experienced
organization. Fusion also gains advanced back office systems that
will drive operating and service delivery efficiencies, as well as
a complementary voice, data and cloud services platform and
network that will allow us to deliver our integrated cloud
solutions faster and more cost-effectively."
Expanding on Mr. Rosen's comments, Don Hutchins, president and
chief operating officer of Fusion, said, "We are delighted to
welcome Jonathan Kaufman, Founder and Chief Executive Officer of
NBS, and his team to Fusion. Jon will be joining Fusion to lead
the combined Corporate Services segment under the NBS brand. A
seasoned communications executive with decades of experience in
building successful companies, Jon and his team have earned a
strong reputation for service excellence in the Unified
Communications and cloud services marketplace and have built a
distribution, service and support infrastructure that will allow
the combined companies to scale more rapidly as we move to execute
on our growing pipeline of opportunities."
Mr. Kaufman said, "The NBS and Fusion teams share the same culture
and vision, and are excited about the substantial opportunities
for growth that this transaction provides to both companies. We
are especially delighted to share the benefits of this acquisition
with the company's wide and expanding network of valued partners
and shareholders, and believe our winning combination positions us
well to emerge as the leading unified communications and cloud
services provider in the industry."
Mr. Kaufman founded Target Telecom Inc., a telecommunications
service company, in 1984, and served as its chief executive
officer until the sale of the business to WorldCom in 1996. Mr.
Kaufman founded NBS in 1998, and has served as its Chief Executive
Officer since its inception.
Effective with the acquisition of the Acquired Business, Fusion
entered into the Kaufman Employment Agreement. Under the two-year
agreement, Mr. Kaufman is entitled to (a) a base salary of
$200,000 per year, (b) a signing bonus of $50,000 payable in
shares of Fusion common stock, and (c) participation in all
benefit programs generally made available to Fusion employees.
The Kaufman Employment Agreement also contains provisions designed
to protect the confidentiality of the Company's confidential
information and restricting Mr. Kaufman from engaging in certain
competitive activities for the greater of 36 months from the date
of the agreement or one year following the termination of his
employment.
A detailed copy of the Form 8-K is available for free at:
http://is.gd/UNFJi9
About Fusion Telecommunications
New York City-based Fusion Telecommunications International, Inc.
(OTC BB: FSNN) is a provider of Internet Protocol ("IP") based
digital voice and data communications services to corporations and
carriers worldwide.
The Company reported a net loss of $4.45 million in 2011, compared
with a net loss of $5.79 million in 2010.
The Company's balance sheet at June 30, 2012, showed $4.48 million
in total assets, $15.73 million in total liabilities, and a
$11.24 million total stockholders' deficit.
At June 30 2012, the Company had a working capital deficit of
$12.6 million and an accumulated deficit of $151.5 million. The
Company has continued to sustain losses from operations and has
not generated positive cash flow from operations since inception.
Management is aware that its current cash resources are not
adequate to fund its operations for the remainder of the year.
During the six months ended June 30, 2012, the Company raised
approximately $1.1 million, net of expenses, from the sale of the
Company's equity securities.
In its audit report on the 2011 financial statements, Rothstein,
Kass & Company, P.C., in Roseland, New Jersey, noted that the
Company has had negative working capital balances, incurred
negative cash flows from operations and net losses since
inception, and has limited capital to fund future operations that
raises a substantial doubt about their ability to continue as a
going concern.
FUSION TELECOMMUNICATIONS: Closes on $22.5 Million Financings
-------------------------------------------------------------
Fusion Telecommunications International, Inc., closed on
$22.5 million of financings, composed of $6.03 million in equity,
and $16.5 million in term debt.
Fusion raised $6,027,750 through a private placement of investment
units consisting of Convertible Preferred Securities and Warrants
to accredited investors, including members of Fusion's Board of
Directors and members of its Advisory Board. Bradley Woods & Co.
served as lead manager, with The Laidlaw Group and Hunter Wise
Financial Group participating as co-managers. In addition to the
capital raised in the offering, Matthew Rosen, Fusion's Chief
Executive Officer and Marvin Rosen, Fusion's Chairman, exchanged
$824,000 of Company obligations for the same investment units sold
in the private placement.
Fusion also raised $16.5 million through the issuance of 5-year
senior notes to Praesidian Capital and Plexus Capital.
Net proceeds from these financings will be used by the Company to
fund its contemporaneous acquisition of Network Billing Systems,
LLC, advance sales and marketing efforts and for general corporate
purposes. NBS is a leading Unified Communications and cloud
services provider that generated approximately $26.5 million in
revenue in 2011, 95% of which was monthly recurring and
contracted, and $4.9 million in adjusted EBITDA.
"The strong support we received in the financing from new and
existing shareholders, our management, Directors, Advisory Board
members, and from financial partners like Praesidian Capital and
Plexus Capital, reaffirms our confidence that we have the right
strategy for growth," said Matthew Rosen, Fusion's chief executive
officer. "This financing helps us implement our growth strategy,
which includes expanding our cloud services portfolio,
concentrating on selling solutions into specific vertical markets
such as healthcare, and pursuing accretive acquisitions. Together
with NBS and their strong management team, extensive network and
advanced infrastructure, we expect to generate positive Adjusted
EBITDA in the beginning of 2013, and to accelerate the pace of our
revenue growth, both organically and through additional targeted
acquisitions," continued Mr. Rosen.
Commenting on the transaction, Glenn C. Harrison, Managing
Director of Praesidian, said, "We have gotten to know the talented
management teams of Fusion and NBS very well and have found them
to be both innovative and experienced. We are impressed with
their shared culture and vision. We believe that they have
developed a winning strategy and plan, and are confident that the
combined company is well positioned to become a leader in the
Unified Communications and cloud services industry."
Expanding on Mr. Harrison's comments, Mike Becker, co-founder and
Partner of Plexus, said, "We believe this financing strongly
reflects our mission to build mutually beneficial long term
relationships. We are delighted to participate in the newly
combined company's plans for profitability and growth."
About Fusion Telecommunications
New York City-based Fusion Telecommunications International, Inc.
(OTC BB: FSNN) is a provider of Internet Protocol ("IP") based
digital voice and data communications services to corporations and
carriers worldwide.
The Company reported a net loss of $4.45 million in 2011, compared
with a net loss of $5.79 million in 2010.
The Company's balance sheet at June 30, 2012, showed $4.48 million
in total assets, $15.73 million in total liabilities and a $11.24
million total stockholders' deficit.
At June 30 2012, the Company had a working capital deficit of
$12.6 million and an accumulated deficit of $151.5 million. The
Company has continued to sustain losses from operations and has
not generated positive cash flow from operations since inception.
Management is aware that its current cash resources are not
adequate to fund its operations for the remainder of the year.
During the six months ended June 30, 2012, the Company raised
approximately $1.1 million, net of expenses, from the sale of the
Company's equity securities.
In its audit report on the 2011 financial statements, Rothstein,
Kass & Company, P.C., in Roseland, New Jersey, noted that the
Company has had negative working capital balances, incurred
negative cash flows from operations and net losses since
inception, and has limited capital to fund future operations that
raises a substantial doubt about their ability to continue as a
going concern.
GELT PROPERTIES: Hearing on Cash Use Resumes Today
--------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of
Pennsylvania, according to Gelt Properties, LLC, et al.'s case
docket, continued until Nov. 6, 2012, at 11 a.m., the hearing to
consider creditor Bucks County Bank's objection to the Debtors'
continued use of cash collateral.
In a separate docket entry, the Court continued until Nov. 6, the
hearing to consider motion to compel accounting and turnover of
cash collateral filed by VIST Bank.
As reported in the Troubled Company Reporter on Oct. 17, 2012, the
Court entered a fourth interim order authorizing use of VIST
Bank's cash collateral. As adequate protection from any
diminution in value of the lender's collateral, the Debtor will
grant the lender replacement liens on all now owned or hereafter
acquired property and assets of the Debtors. The Debtors will
also pay the lender $6,732.
Beneficial Mutual Cash Collateral
On Oct. 3, the Court entered a second interim order authorizing
the Debtors' use of Beneficial Mutual Savings Bank's cash
collateral until Oct. 31. As adequate protection, the Debtors
will grant the lender replacement liens on all now owned or
hereafter acquired property and assets of the Debtors. If the
Debtors default or violate the order, the Debtors' right to use
cash collateral will automatically cease until further order of
the Court. The lender, the Debtors and the Office of the U.S.
Trustee agreed that as of petition date, the Debtors are indebted
to the lender in as yet to be determined amounts. An Oct. 24
hearing has been set.
NPB's Cash Collateral
On June 29, the Hon. Magdeline D. Coleman approved the stipulation
and agreement regarding the use of cash collateral; and National
Penn Bank's request to lift the automatic stay.
The stipulation entered among the Debtors, NPB, and sureties -- H.
Jack Miller, Uri Shoham, and Ari Miller, provides for, among other
things:
-- NPB has consented to the Debtors' use of cash collateral
until Dec. 30, 2014, or on the occurrence of an event of
default;
-- as adequate protection from any diminution in value of NPB's
collateral, the Debtor will grant NPB replacement liens;
-- the Debtor and sureties will make principal payments to NPB,
make monthly interest on the prepetition loans and each
mortgage loan sub-note issued thereunder at the interest
rate of 3.25%;
-- the automatic stay is lifted to permit NPB to execute on the
prepetition collateral, cash collateral, and all profits
thereof, including without limitation, the approved mortgage
loans (separate sub loans made by NPB to Gelt Financial,
which Gelt Financial utilized as loans to customers); and
-- so long as the Debtor timely and faithfully complies with
all of its obligations under the stipulation and the
prepetition loan documents, and so long as no event of
default will occur, NPB will forbear from executing on those
assets for which the automatic stay has been lifted from the
effective date until the termination date.
A copy of the stipulation is available for free at
http://bankrupt.com/misc/GELTPROPERTIES_CC_stipulation.pdf
About Gelt Properties
Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC,
and affiliate Gelt Financial Corporation borrow money from
traditional lenders and make loans to commercial borrowers. They
also acquire and manage real estate. Gelt Properties and Gelt
Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11-
15826) on July 25, 2011. Judge Magdeline D. Coleman presides over
the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston,
Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin,
P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy
counsel. The petitions were signed by Uri Shoham, the Debtors'
chief financial officer. The Debtors' other professionals
include: Eisenberg, Gold & Cettei P.C. as its special counsel to
provide proper legal counsel to the Debtors with regard to
defending against certain actions, Cohen and Forman as their
special counsel to advise them upon all matters which may arise or
which may be incident to the bankruptcy proceedings.
Gelt Properties disclosed $4.73 million in assets and
$4.84 million in liabilities as of the Chapter 11 filing. Its
affiliate, Gelt Financial has scheduled $20.3 million in assets
and $17.05 million in liabilities as of the Chapter 11 filing.
The Debtor's Plan provides that all assets of the Debtors will be
sold and liquidated, rented or leased, developed and maintained,
in the ordinary course of the Debtors' business. The Debtors note
that the proposed Plan envisions the utilization of management
talents, commitment and an existing infrastructure to restructure
existing debt, liquidate unprofitable properties and meaningfully
shift focus to its growing REO portfolio.
On Sept. 15, 2011, a committee of unsecured creditors was
appointed. Schoff McCabe, P.C. represents the Committee. Craig
Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the
Committee's accountants.
GELT PROPERTIES: Hearing on Plan Disclosures Today
--------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
continued until Nov. 6, 2012, at 11 a.m., the hearing to consider
adequacy of the disclosure statement explaining the proposed
Chapter 11 Plan of Gelt Properties, LLC.
As reported in the Troubled Company Reporter on April 18, 2012,
according to the Disclosure Statement for the proposed First
Amended Plan of Reorganization dated March 16, 2012, all assets of
the Debtors will be sold and liquidated, rented or leased,
developed and maintained, in the ordinary course of the Debtors'
business. The Debtors note that the Plan envisions the
utilization of management talents, commitment and an existing
infrastructure to restructure existing debt, liquidate
unprofitable properties and meaningfully shift focus to its
growing REO portfolio. Specifically, the Debtors project that
they will increase rental income, decrease carrying costs for
unprofitable properties, decrease maintenance costs for
unprofitable properties and emerge leaner, more focused
reorganized Debtors. The Debtors also expect fewer foreclosures
moving forward and thus reduce annual foreclosure costs line item
in its projections.
Under the Plan, Class 15 general unsecured creditors will receive
a pro rata share of the Debtors' assets after payment of claims
having priority over Class 15 allowed claims. Distributions to
holders of Class 15 will come from one of the following: (a) cash
on hand; or (b) funds received by the Debtors from the Lender
Liability Litigation.
A full-text copy of the First Amended Disclosure Statement is
available for free at:
http://bankrupt.com/misc/GELT_PROPERITIES_ds_firstamended.pdf
About Gelt Properties
Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC,
and affiliate Gelt Financial Corporation borrow money from
traditional lenders and make loans to commercial borrowers. They
also acquire and manage real estate. Gelt Properties and Gelt
Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11-
15826) on July 25, 2011. Judge Magdeline D. Coleman presides over
the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston,
Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin,
P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy
counsel. The petitions were signed by Uri Shoham, the Debtors'
chief financial officer. The Debtors' other professionals
include: Eisenberg, Gold & Cettei P.C. as its special counsel to
provide proper legal counsel to the Debtors with regard to
defending against certain actions, Cohen and Forman as their
special counsel to advise them upon all matters which may arise or
which may be incident to the bankruptcy proceedings.
Gelt Properties disclosed $4.73 million in assets and
$4.84 million in liabilities as of the Chapter 11 filing. Its
affiliate, Gelt Financial has scheduled $20.3 million in assets
and $17.05 million in liabilities as of the Chapter 11 filing.
On Sept. 15, 2011, a committee of unsecured creditors was
appointed. Schoff McCabe, P.C. represents the Committee. Craig
Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the
Committee's accountants.
GELT PROPERTIES: Hearing on Relief of Stay Resumes Today
--------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of
Pennsylvania continued until Nov. 6, 2012, at 11 a.m., the hearing
to consider creditor Bucks County Bank's motion for relief from
automatic stay in Gelt Properties, LLC's case.
As reported in the Troubled Company Reporter on March 27, 2012,
Bucks County Bank asked the Bankruptcy Court to terminate the
automatic stay under Section 362 of the Bankruptcy Code.
Debtor Gelt Financial Corporation executed and delivered to the
Bank a demand Promissory Note dated July 23, 2007, in the maximum
principal amount of $2 million. As partial security for the
repayment of the Loan, with interest and other charges, debtor Gel
Properties executed and delivered to the Bank a Surety Agreement
pursuant to which the Debtor unconditionally guaranteed to the
Bank the due and punctual payment and performance of all of the
obligations of the Debtor to the Bank.
The Debtor defaulted on the obligations under the loan documents
by, among other things, failing to make payments when due
thereunder.
As of the Petition Date, the Debtor was indebted to the Bank in
the amount of $1.37 million, plus accruing interest and costs.
Robert A. Badman, Esq., at Curtin & Heefner LLP, in Morrisville,
Pennsylvania, attorney for the Bank, asserts that the Disclosure
Statement and the Plan of Reorganization understate the claim of
the Bank by listing only the principal amount due and owing the
Bank and failing to include the accrued interest and late charges.
The Debtor's Plan in Section 3.5 lists the total amount due and
owing to the Bank as $1,191,462, which amount is comprised of a
secured lien in the amount of $120,991 on Property A, a secured
lien in the amount of $48,629 on Property B, and a secured claim
in the amount of $1,021,842 with respect to other loans and
mortgages.
"The Plan is not confirmable in that Debtor proposes interest
payments to the Bank and other secured creditors, without the
consent of Bank and those other creditors, in amounts
significantly below the amounts required under the Bankruptcy
Code, and Debtor's income is insufficient to fund a plan with
payments based on acceptable rates of interest," Mr. Badman tells
the Court.
The Bank asks the Court to prohibit the Debtor from continuing to
use cash collateral.
About Gelt Properties
Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC,
and affiliate Gelt Financial Corporation borrow money from
traditional lenders and make loans to commercial borrowers. They
also acquire and manage real estate. Gelt Properties and Gelt
Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11-
15826) on July 25, 2011. Judge Magdeline D. Coleman presides over
the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston,
Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin,
P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy
counsel. The petitions were signed by Uri Shoham, the Debtors'
chief financial officer. The Debtors' other professionals
include: Eisenberg, Gold & Cettei P.C. as its special counsel to
provide proper legal counsel to the Debtors with regard to
defending against certain actions, Cohen and Forman as their
special counsel to advise them upon all matters which may arise or
which may be incident to the bankruptcy proceedings.
Gelt Properties disclosed $4.73 million in assets and
$4.84 million in liabilities as of the Chapter 11 filing. Its
affiliate, Gelt Financial has scheduled $20.3 million in assets
and $17.05 million in liabilities as of the Chapter 11 filing.
On Sept. 15, 2011, a committee of unsecured creditors was
appointed. Schoff McCabe, P.C. represents the Committee. Craig
Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the
Committee's accountants.
GELTECH SOLUTIONS: Had $1.8-Mil. Net Loss in Sept. 30 Quarter
-------------------------------------------------------------
Geltech Solutions, Inc., reported a net loss of $1.8 million on
$84,540 of sales for the three months ended Sept. 30, 2012,
compared with a net loss of $1.5 million on $178,402 of sales for
three months ended Sept. 30, 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$1.8 million in total assets, $3.6 million in total liabilities,
and a stockholders' deficit of $1.8 million.
"As of Sept. 30, 2012, the Company had a working capital deficit,
an accumulated deficit and stockholders' deficit of $514,338,
$24,605,573 and $1,817,980, respectively, and incurred losses from
operations of $1,805,687 for the three months ended Sept. 30,
2012. and used cash from operations of $943,191 during the three
months ended Sept. 30, 2012. In addition, the Company has not yet
generated revenue sufficient to support ongoing operations. These
factors raise substantial doubt regarding the Company's ability to
continue as a going concern."
A copy of the Form 10-Q is available at http://is.gd/pLxOzG
Jupiter, Fla.-based GelTech Solutions. Inc., is a Delaware
corporation organized in 2006. The Company markets four products:
(1) FireIce(R), a water soluble fire retardant used to protect
firefighters, structures and wildlands; (2) Soil2O(R) 'Dust
Control', its new application which is used for dust mitigation in
the aggregate, road construction, mining, as well as, other
industries that deal with daily dust control issues; (3)
Soil2O(R), a product which reduces the use of water and is
primarily marketed to golf courses, commercial landscapers and the
agriculture market; and (4) FireIce(R) Home Defense Unit, a system
for applying FireIce(R) to structures to protect them from
wildfires.
GGM FITNESS: Owner of Gold's Gym Middletown Files for Chapter 11
----------------------------------------------------------------
G.G.M. Fitness Management, Inc., which does business as Gold's Gym
Middletown, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case
No. 12-37578) on Oct. 12, 2012, listing under $1 million in assets
and debts. A copy of the petition is available at no charge at
http://bankrupt.com/misc/nysb12-37578.pdf
Thomas Genova, Esq., at Genova & Malin, serves as the Debtor's
counsel.
Jessica Dinapoli at Record Online reported that the owner of the
Gold's Gym plans to keep the gym open. The report said the
largest debt is $500,000 in rent in arrears to its landlord. The
landlord had started an eviction proceeding on the gym, and G.G.M.
was due in court on Oct. 15.
The report noted that Gold's Gym has 34 employees and $6,800 in
weekly payroll.
GORDIAN MEDICAL: Seeks 75 More Days to File Chapter 11 Plan
-----------------------------------------------------------
Marie Beaudette at Dow Jones' DBR Small Cap reports that American
Medical Technologies Inc. is seeking a 75-day extension to file a
bankruptcy-exit plan while it continues to try to negotiate a
settlement with the Centers for Medicare and Medicaid Services.
About Gordian Medical
Gordian Medical, Inc., dba American Medical Technologies, filed a
Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-12339) in
Santa Ana, California, on Feb. 24, 2012, after Medicare refunds
were halted. Irvine, California-based Gordian Medical provides
supplies and services to treat serious wounds. The company has
active relationships with and serves patients in more than 4,000
nursing facilities in 49 states with the heaviest concentration of
the nursing homes being in the south and southeast sections of the
United States.
The Debtor estimated assets and debts of up to $50 million. It
has $4.3 million in cash and $31.1 million in receivables due from
Medicare.
Judge Mark S. Wallace oversees the case. Pachulski Stang Ziehl &
Jones LLP serves as the Debtor's counsel. GlassRatner Advisory &
Capital Group LLC serves as the Debtor's financial advisor.
The U.S. Trustee appointed five members to the Official Committee
of Unsecured Creditors. The Committee is represented by Landau
Gottfried & Berger LLP.
GRANITE DELLS: Files Outline for Plan of Reorganization
-------------------------------------------------------
Granite Dells Ranch Holding, LLC, et al., filed with the U.S.
Bankruptcy Court for the District of Arizona a consolidated
disclosure statement explaining their proposed Plan of
Reorganization dated Sept. 26, 2012.
The Plan provides for payment to unsecured creditors (including
any unsecured claim of AED) in quarterly installments over eight
years aggregating $5 million. However, the Plan provides that a
holder of an investment promissory note (estimated to total
$21 million) will be given the option of participating in the
funding of the Reorganized Debtor. A holder of an Investor Claim
who elects to participate in the funding will become a member with
a share of profits pro rated among all new equity contributors.
An electing holder of an Investor Claim will also participate in
distributions with other unsecured creditors, based on the amount
of accrued and unpaid interest such holder is owed.
The Plan provides that each existing member and holder of an
interest in Debtor will retain its interests in the Reorganized
Debtor only if such holder participates in the funding of
additional equity. The Plan also provides that each member of a
Direct Equity Holder will be given the opportunity to participate
in the funding of the Reorganized Debtor to the extent its Direct
Equity Holder does not elect to participate.
A copy of the Disclosure Statement is available for free at
http://bankrupt.com/misc/GRANITE_DELLS_ds.pdf
Tri-City's Proposed Plan
Tri-City Investment & Development, LLC, a 39.25% equity holder in
the Debtor, also filed a Consolidated Supplemental Disclosure in
support of Tri-City's Plan, as amended.
Tri-City filed a proposed Plan on Aug. 3, 2012. Tri-City's
consolidated Disclosure Statement incorporates and restates all
material terms of the Tri-City's previous disclosure statements
and incorporates the terms of the agreement that was reached at
the Aug. 20, 2012, mediation.
The Amended Plan provides a path for confirmation that avoids
prolonged litigation, foreclosure of the Debtor's real property,
and mitigates tax consequences At the hearing held by the Court on
Aug. 7, 2012, the Court ordered the parties to attend mediation.
Tri-City, the Debtor through its manager Cavan Management
Services, and Arizona Eco the Debtor's secured creditor, agreed on
Gary Birnbaum as a mediator. While the Agreement has not been
reduced to a definitive written agreement, Tri-City believes the
terms represent the agreed upon material points.
Under Tri-City's Plan, primary source of funding for the Plan is a
dirt-for-debt swap with Arizona Eco. Additional funding for the
Plan will come from:
-- Notes payable from Granite Dells Estates I, LLC & Granite
Dells Estates II, LLC.
-- The portion of the grazing lease retained by the Reorganized
Debtor.
-- Equity contributions if necessary, but not anticipated or
projected.
-- Dividends from Prescott Holdings, generated by sales within
the Bright Star subdivision.
-- Future Real Estate sales of the Reorganized Debtor.
A copy of Tri-City's Disclosure Statement is available for free at
http://bankrupt.com/misc/GRANITE_DELLS_tricity_ds.pdf
About Granite Dells
Scottsdale, Arizona-based Granite Dells Ranch Holdings LLC filed a
bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-04962)
in Phoenix on March 13, 2012. Judge Redfield T. Baum PCT Sr.
oversees the case. The Debtor is represented by Alan A. Meda,
Esq., at Stinson Morrison Hecker LLP. The Debtor disclosed
$2.22 million in assets and $157 million in liabilities as of the
Chapter 11 filing.
Cavan Management Services, LLC is the Debtor's manager. David
Cavan, member of the firm, signed the Chapter 11 petition.
Arizona ECO Development LLC, which acquired a $83.2 million 2006
loan by the Debtor, is represented by Snell & Wilmer L.L.P. The
resolution authorizing the Debtor's bankruptcy filing says the
Company is commencing legal actions against Stuart Swanson, AED,
and related entities relating to the purchase by Mr. Swanson of a
promissory note payable by the Company to the parties that sold a
certain property to the Company. According to Law 360, AED sued
Granite Dells on March 6 asking the Arizona court to appoint a
receiver. Arizona ECO is foreclosing on a secured loan backed by
15,000 acres of Arizona land.
The United States Trustee said that an official committee has not
been appointed in the bankruptcy case of Granite Dells because an
insufficient number of unsecured creditors have expressed interest
in serving on a committee.
GRAYMARK HEALTHCARE: To be Delisted from NASDAQ on Nov. 6
---------------------------------------------------------
The Nasdaq Stock Market determined to delist Graymark Healthcare,
Inc.'s common stock and will suspend trading of the shares
effective at the open of business on Nov. 6, 2012, after the
Company failed to meet certain conditions for continued listing,
including the proposed acquisition of Foundation Surgery
Affiliates, LLC, and Foundation Surgical Hospital Affiliates, LLC.
The Company does not intend to appeal the determination of the
Panel.
On June 19, 2012, Graymark received a delisting determination
letter from the staff of Nasdaq due to the Company's failure to
regain compliance with The Nasdaq Capital Market minimum bid price
requirement for continued listing, as set forth in Nasdaq Listing
Rule 5550(a)(2). The Company filed an appeal regarding the June
19th delisting determination letter and on July 26, 2012,
presented its proposed plan of compliance to a Nasdaq Hearings
Panel.
On Aug. 16, 2012, the Company received a further written notice
from Nasdaq indicating that the Company is not in compliance with
Nasdaq Listing Rule 5550(b), the continued listing standards for
primary equity securities on The Nasdaq Capital Market, because
its stockholders' equity was less than $2.5 million at June 30,
2012, and it does not meet the alternative standards of market
value of listed securities or net income from continuing
operations. On Aug. 21, 2012, the Panel informed the Company that
it determined to allow the continued listing of the Company's
common stock provided it met certain conditions as outlined in the
Company's plan of compliance by specified dates, including closing
the proposed acquisition of Foundation, reporting shareholders'
equity in excess of $2.5 million, and evidencing a closing bid
price of no less than $1.00 for a minimum of 10 consecutive
trading days on or before Nov. 29, 2012.
The Company has informed The Nasdaq Stock Market that it did not
consummate the Foundation Transaction within the expected time
outlined in its plan of compliance, and as a result, the Company
was unable to meet all of the conditions in its plan of compliance
and on Nov. 2, 2012.
Following delisting of the Company's common stock, the Company
anticipates that its securities will be traded on the OTCQB market
under the symbol "GRMH" upon the suspension of trading on Nasdaq.
The Company intends to continue to file periodic reports with the
SEC pursuant to the requirements of the Securities Exchange Act of
1934, as amended.
Accountant Resigns
On Oct. 30, 2012, Eide Bailly LLP, the Company's independent
accountant, informed the Company that, effective on the earlier of
Nov. 19, 2012, or the date on which the Company files its
quarterly report on Form 10-Q for the quarterly period ended
Sept. 30, 2012, Eide Bailly is resigning as the independent
registered public accounting firm of the Company. Eide Bailly
communicated to the Company that their decision to resign is a
reflection of their evaluation of available resources to continue
to serve as the Company's auditor and the current and future
direction of its SEC/PCAOB practice. The Audit Committee of the
Company's Board of Directors is in the process of engaging a new
independent registered public accounting firm for the year ending
Dec. 31, 2012.
The reports of Eide Bailly on the Company's consolidated financial
statements as of and for the fiscal years ended Dec. 31, 2011, and
Dec. 31, 2010, did not contain an adverse opinion or a disclaimer
of opinion, nor were those reports qualified or modified as to
uncertainty, audit scope, or accounting principles.
About Graymark Healthcare
Graymark Healthcre, Inc., headquartered in Oklahoma City, Okla.,
provides care management solutions to the sleep disorder market.
As of June 30, 2012, the Company operated 107 sleep diagnostic and
therapy centers in 10 states.
The Company's balance sheet at June 30, 2012, showed $20.8 million
in total assets, $23.2 million in total liabilities, and a
stockholders' deficit of $2.4 million.
Going Concern Doubt
As of June 30, 2012, the Company had an accumulated deficit of
approximately $42.3 million and reported a net loss of
approximately $7.2 million for the six months then ending. In
addition, the Company used approximately $2.4 million in cash from
operating activities from continuing operations during the six
months ending June 30, 2012.
Historically, management has been able to raise the capital
necessary to fund the operation and growth of the Company, but
the Company can give no assurance that it will be successful in
raising the necessary capital to fund the Company's operations.
During the three months ended June 30, 2012, the Company did not
maintain the minimum cash balance required under the Company's
loan agreement with Arvest Bank. In addition, the Company did not
make the required principal and interest prepayment due to Arvest
Bank on June 30, 2012.
Furthermore, the Company is not currently in compliance with the
minimum bid price requirement for continued listing on The NASDAQ
Capital Market. Under a notice received from NASDAQ, the Company
had until June 18, 2012, to regain compliance. The Company
received a notice of delisting on June 19, 2012. The Company
filed an appeal and went before a hearing with NASDAQ on July 26,
2012. If the Company is delisted from NASDAQ, that will be an
event of default under the Company's loan agreement with Arvest
Bank. Historically, the Company has been successful in obtaining
default waivers from Arvest Bank, but there is no assurance that
Arvest Bank will waive any future defaults. Given that the
Company is not in compliance with certain covenants under the loan
agreement with Arvest Bank, the associated debt has been
classified as current on the accompanying consolidated condensed
balance sheets.
"These uncertainties raise substantial doubt regarding the
Company's ability to continue as a going concern," the Company
said in its quarterly report for the period ended June 30, 2012.
"The consolidated condensed financial statements do not include
any adjustments that might be necessary if the Company is unable
to continue as a going concern."
GRAYMARK HEALTHCARE: Inks 3rd Amendment to Arvest Loan Agreement
----------------------------------------------------------------
Graymark Healthcare, Inc., and certain of its subsidiaries entered
into a Third Amendment to Amended and Restated Loan Agreement with
Arvest Bank and Oliver Company Holdings, LLC, Roy T. Oliver,
Stanton Nelson, and the Roy T. Oliver Revocable Trust. The
Amendment amended certain provisions of the Loan Agreement in
connection with the Company's potential acquisition of the
membership interests of Foundation Surgery Affiliates, LLC, and
Foundation Surgical Hospital Affiliates, LLC.
The Amendment amended the Loan Agreement to clarify that
Foundation and any of its subsidiaries would not be deemed
borrowers under the Loan Agreement or subject to certain covenants
under the Loan Agreement and that the assets and membership
interests in Foundation and its subsidiaries will not be
collateral under the Loan Agreement or pledged to Arvest. In
addition, the Amendment (i) permits the Company to receive inter-
company loans and advances from Foundation for the purpose of
paying the Company's operating expenses and satisfying obligations
to Arvest provided those advances are subordinate to obligations
to Arvest and do not violate any other credit facility or
agreement to which Foundation is bound and (ii) permits the
Company to make limited contributions to Foundation.
A copy of the Third Amendment is available for free at:
http://is.gd/XWUx5E
On Aug. 13, 2012, the Company entered into that certain Membership
Interest Purchase Agreement among Graymark Healthcare, Inc., TSH
Acquisition, LLC, and Foundation Healthcare Affiliates, LLC, which
was subsequently amended on Sept. 29, 2012. Despite diligent
efforts by the parties to the Purchase Agreement, the parties have
been unable to obtain all third party consents needed to
consummate the Foundation Transaction. The Company does not
expect to be able to consummate the Foundation Transaction in
substantially the form described in the Purchase Agreement. The
Company has informed The Nasdaq Stock Market that it did not
consummate the Foundation Transaction within the expected time
outlined in its plan of compliance, and as a result, the Company
expects it will shortly receive a notice from the Nasdaq Hearings
Panel that the Company's common stock will be suspended from
trading and delisted from The Nasdaq Capital Market.
The parties to the Purchase Agreement are currently discussing
alternative structures to allow all or part of the transaction to
be consummated, though there is no assurance that a transaction
can be consummated with an alternative structure or at all.
About Graymark Healthcare
Graymark Healthcre, Inc., headquartered in Oklahoma City, Okla.,
provides care management solutions to the sleep disorder market.
As of June 30, 2012, the Company operated 107 sleep diagnostic and
therapy centers in 10 states.
The Company's balance sheet at June 30, 2012, showed $20.8 million
in total assets, $23.2 million in total liabilities, and a
stockholders' deficit of $2.4 million.
Going Concern Doubt
As of June 30, 2012, the Company had an accumulated deficit of
approximately $42.3 million and reported a net loss of
approximately $7.2 million for the six months then ending. In
addition, the Company used approximately $2.4 million in cash from
operating activities from continuing operations during the six
months ending June 30, 2012.
Historically, management has been able to raise the capital
necessary to fund the operation and growth of the Company, but
the Company can give no assurance that it will be successful in
raising the necessary capital to fund the Company's operations.
During the three months ended June 30, 2012, the Company did not
maintain the minimum cash balance required under the Company's
loan agreement with Arvest Bank. In addition, the Company did not
make the required principal and interest prepayment due to Arvest
Bank on June 30, 2012.
Furthermore, the Company is not currently in compliance with the
minimum bid price requirement for continued listing on The NASDAQ
Capital Market. Under a notice received from NASDAQ, the Company
had until June 18, 2012, to regain compliance. The Company
received a notice of delisting on June 19, 2012. The Company
filed an appeal and went before a hearing with NASDAQ on July 26,
2012. If the Company is delisted from NASDAQ, that will be an
event of default under the Company's loan agreement with Arvest
Bank. Historically, the Company has been successful in obtaining
default waivers from Arvest Bank, but there is no assurance that
Arvest Bank will waive any future defaults. Given that the
Company is not in compliance with certain covenants under the loan
agreement with Arvest Bank, the associated debt has been
classified as current on the accompanying consolidated condensed
balance sheets.
"These uncertainties raise substantial doubt regarding the
Company's ability to continue as a going concern," the Company
said in its quarterly report for the period ended June 30, 2012.
"The consolidated condensed financial statements do not include
any adjustments that might be necessary if the Company is unable
to continue as a going concern."
GULF COLORADO: Trustee to Sell Railroad Biz, Wants to Pay Bonuses
-----------------------------------------------------------------
Ronald Hornberger, the Chapter 11 trustee in the case of Gulf,
Colorado & San Saba Railway Corporation, will return to the
Bankruptcy Court on Nov. 26 for a hearing on his request to
implement a Key Employee Bonus Program.
Mr. Hornberger has begun a process to attempt a sale of the
Debtor's railroad operations and related assets. The Trustee
proposes to pay certain bonuses to two key employees -- Glenda
Smith and Justin B. Johnson -- contingent upon the successful sale
of the Debtor's railroad line operations and related assets.
Specifically, the Trustee seeks to pay each employee a bonus of
$750 per month for each month of their employment from and after
the bankruptcy filing, but only if the employee remains as an
employee of the Debtor's through the sale and closing and funding
of the Debtor's railroad operations and related assets. Further,
any such bonus would be paid as an allowed administrative expense
from available funds devoted to the payment of allowed
administrative expense claims. There would be no need for either
of these two key employees to file a notice or other written or
other "claim" to receive such bonus payment.
Mr. Hornberger said in Court filings that both employees have
stayed the course during the existence of the Chapter 11 case and
have provided and continue to provide valuable services to the
Chapter 11 Trustee and the estate.
"Each has unique skills and knowledge particularly applicable to
the continuing operations of the Debtor's railroad assets and has
provided ongoing assistance to the Trustee and the ongoing benefit
of their historical knowledge of the operations, the customer base
and the assets of the Debtor's railroad operations and assets.
The cost of the loss of either of these two key employees would be
a multiple of the cost of this proposed bonus plan and would
result in a disruption of Debtors' railroad business operations,"
Mr. Hornberger said.
The Trustee noted that the Debtor's case "presents a unique set of
circumstances in that it is a Railroad Reorganization case and,
thus, the continuing operation of the railroad line is of value to
the public interest, particularly to the communities and
businesses served by the railroad operations. The two key
employees in question each has value to the estate because of
their historical knowledge of the assets, operations and customer
base of the railroad operations. Each of them is aware of the
increased uncertainty to their employment arising from the filing
of this Chapter 11 case. The Trustee believes that this modest
Bonus Program will help him to retain these two key employees and
will further incentivize each of them to remain in service and
continue their invaluable assistance to the Trustee and the
continuing operations of the Debtor's railroad line and assets."
About GCSR
Gulf, Colorado & San Saba Railway Corporation operates the Gulf,
Colorado and San Saba Railway, a former Atchison, Topeka and Santa
Fe Railway "San Saba branch line." The Railway is a short-line
freight railroad headquartered in Brady, Texas and operates from
an interchange with the BNSF Railway at Lometa, Texas 67.5 miles
west to Brady, Texas. The Railway is located within the counties
of Lampasas, Mills, San Saba and McCulloch, Texas.
The Company filed for Chapter 11 relief (Bankr. W.D. Tex. Case No.
12-11531) on July 3, 2012. Judge H. Christopher Mott presides
over the case. Frances A. Smith, Esq., and Subvet D. West, Esq.,
at Shackelford Melton & McKinley, in Dallas, Tex., represented the
Debtor as counsel. In its schedules, the Debtor disclosed
$24,534,864 in total assets and $3,710,371 in total liabilities.
The petition was signed by Richard C. McClure, president and CEO.
Ronald Hornberger was named as Chapter 11 trustee to oversee the
Debtor's operations through its employees.
H & M OIL: Prospect Capital Wants Ch. 11 Trustee to Take Over
-------------------------------------------------------------
Prospect Capital Corporation asks, for the second time, the U.S.
Bankruptcy Court for the Northern District of Texas to appoint a
Chapter 11 trustee in the Chapter 11 cases of H & M Oil & Gas,
LLC, et al., or lift the automatic stay.
Prospect, a senior secured lender and the only active creditor in
the Chapter 11 cases, expressed concerns over the Debtors' ability
to preserve Prospect's collateral in light of management's history
of mismanagement, inaction and self-dealing.
Prospect has a claim in excess of $88.8 million that is secured by
substantially all of HMOG's assets, consisting primarily of oil
and gas leases in West Texas.
On May 31, 2012, the Court denied Prospect's motions without
prejudice. In finding that Prospect was adequately protected, the
Court noted that the case was in its infancy and HMOG "would be
able to continue a drilling program and continue to bring wells on
line" by borrowing under the proposed $8 million DIP loan from
Scattered Corporation -- a holding company based in Chicago and
indirectly owns HMOG.
According to Prospect, the Debtors have also misused their assets
and funds.
Prospect is represented by:
Timothy A. Davidson II, Esq.
Joseph P. Rovira, Esq.
ANDREWS KURTH LLP
600 Travis, Suite 4200
Houston, Texas 77002
Tel: (713) 220-4200
Fax: (713) 220-4285
E-mail: taddavidson@andrewskurth.com
josephrovira@andrewskurth.com
About H&M Oil
H&M Oil & Gas, LLC, filed a bare-bones Chapter 11 petition
(Bankr. N.D. Tex. Case No. 12-32785) in its hometown Dallas on
April 30, 2012. Another entity, Anglo-American Petroleum Corp.
(Case No. 12-32786) simultaneously filed for Chapter 11. H&M Oil
disclosed $297,119,773 in assets and $77,463,479 in liabilities as
of the Chapter 11 filing.
H&M Oil & Gas is an oil and gas production and development
company. H&M, through its operating company, H&M Resources LLC,
is focused on developing its leases in the Permian basin and Texas
panhandle. Dallas, Texas-based Anglo-American Petroleum --
http://www.angloamericanpetroleum.com/-- is the holding
corporation for H&M Oil.
Judge Barbara J. Houser presides over the case. The Debtors are
represented by Keith William Harvey, Esq., at Anderson Tobin PLLC,
in Dallas. Lain Faulkner & Co., PC, serves as financial adviser.
Prospect Capital Corporation, the Debtors' lone secured creditor,
is represented in the case by Timothy A. Davidson II, Esq., and
Joseph P. Rovira, Esq., at Andrews Kurth LLP. The U.S. Trustee
has not appointed a creditors' committee.
H&M's plan is designed so shareholder Scattered Corp. can retain
ownership because the reorganization purports to pay creditors in
full. For Prospect, the currency under the plan won't be cash.
Instead, it will be "volumetric production payments," or the
delivery of specified amounts of crude oil produced from some of
H&M's wells. Prospect's claim is divided into a secured class and
an unsecured class for the deficiency claim. The plan would have
the bankruptcy judge hold a hearing to value Prospect's
collateral. The court will also make a determination about the
value of crude oil, thus calculating how much to oil deliver in
payment of Prospect's claim.
HARPER BRUSH: Auction Set for Nov. 19 in Bankruptcy Court
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Harper Brush Works Inc. will go up for auction on
Nov. 19 in U.S. Bankruptcy Court in Des Moines, Iowa.
According to the report, the opening bid will be $2.2 million from
a buyer already under contract. Competing bidders may purchase
the operating assets and the real estate separately. The so-called
stalking horse is offering $1.74 million for the operating assets
and $460,000 for the real estate.
The report relates that the bankruptcy judge will hold a hearing
on the day of the auction for approval of the sale. Competing
bids must be submitted initially by Nov. 14.
About Harper Brush Works
Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11
petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012.
Family-owned Harper Brush -- http://www.harperbrush.com/--
provides more than 1,000 products, including pushbrooms, mops,
floor squeegees, automotive brushes, dust pans, and buckets. The
Company disclosed assets of $10.4 million against debt totaling
$10 million, including $6 million owing to secured creditors.
Judge Anita L. Shodeen presides over the case. Donald F. Neiman,
Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor &
Fairgrave, P.C., serve as bankruptcy counsel to the Debtor.
Equity Partners CRB LLC serves as the Debtor's investment banker.
An official committee of unsecured creditors has been appointed in
the case. Richard S. Lauter, Esq., and Thomas R. Fawkes, Esq., at
Freeborn & Peters LLP, in Chicago, represents the Committee as
general bankruptcy counsel. Joseph A. Peiffer, Esq., at
Day Rettig Peiffer, P.C., in Cedar Rapids, Iowa, represents the
Committee as local counsel.
HAYDEL PROPERTIES: BancorpSouth's Bid for Lift Stay Denied
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Mississippi
denied BancorpSouth Bank's motion for relief from automatic stay
in the Chapter 11 case of Haydel Properties, LP.
BancorpSouth requested for relief relating to three properties
alleging that the indebtedness is in default and that good cause
exists to vacate the automatic stay. BancorpSouth admits that the
Debtor is the owner of the properties; however, the bank asserts
that the properties were transferred from the original borrower in
violation of the deeds of trust.
The Debtor asserts that the due-on-sale clauses do not prevent it
from reorganizing and restructuring the debts. The Debtor contends
that it has owned the properties for over five years and that
BancorpSouth's claim against the properties is a claim in the
bankruptcy under Section 102(2) of the Bankruptcy Code.
The Court, having reviewed the statutory provisions and applicable
law, said that the Debtor is entitled to treat the claim in its
plan of reorganization.
Additionally, the Court also denied the Bank's motion to modify
automatic stay.
Haydel Properties LP, based in Biloxi, Mississippi, filed for
Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on
Jan. 11, 2012. Judge Katharine M. Samson presides over the case.
Christy Pickering serves as accountant. The Debtor disclosed
$11.7 million in assets and $6.8 million in liabilities as of the
Chapter 11 filing.
HAYDEL PROPERTIES: Hearing on Case Conversion on Thursday
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Mississippi
reset to Nov. 8, 2012, at 2:30 p.m., the hearing to consider
motions to convert the Chapter 11 case of Haydel Properties, L.P.,
As reported in the Troubled Company Reporter on Sept. 3, 2012,
Bancorpsouth Bank and The Peoples Bank, Biloxi, Mississippi, have
each asked to dismiss the case of the Debtor or, in the
alternative, convert the case to Chapter 7 liquidation.
The Bancorpsouth is a secured creditor which has made multiple
loans to Debtor, cross collateralized and secured by multiple
parcels of real property situated in Harrison County,
Mississippi, and the income generated by those properties. The
amount owed on the loans, as of the date of the filing of the
Petition for Relief, was $250,826.04, plus interest and attorney's
fees. The value of the collateral is $950,000. The properties
are situated at 1720 Pass Road, 1720 East Pass Road, and a Lot on
the North side of Pass Road, all in Gulfport, Mississippi.
A court order dated March 26, 2012, authorized the Debtor to
utilize the rental receipts, which comprise the cash collateral of
Bancorpsouth, for certain limited purposes, under certain
conditions. The order provided that all rents received from
properties which comprise the collateral of Bancorpsouth were to
be placed in a segregated account, and could only be used to pay
ad valorem taxes, establishment of a reserve for payment of
insurance upon the collateral, as premiums come due, and
reasonable and necessary maintenance as needed to preserve the
collateral, and adequate protection payments.
According to rent rolls received from the Debtor, one of the
parcels is generating $1,000 per month in rental income. Since
the filing of the Petition for Relief, Debtor should have received
at least $6,000 through July 31, 2012. However, no segregated
Cash Collateral Account has been established and any income
received has been commingled with funds in the Debtor's general
operating account, Bancorpsouth said. "Ad valorem taxes for 2009,
2010, and 2011 are unpaid. The period for redemption of the 2009
ad valorem taxes will expire on or about Aug. 30, 2012. The
amount owed for the 2009 ad valorem taxes upon the bank's
collateral, through July 31, 2012, is $26,247.48. The Debtor has
defied this Court's order by failing to deposit the rental income
received from the properties and utilized the Bank's cash
collateral in an unauthorized manner," Bancorpsouth stated.
About Haydel Properties
Haydel Properties LP, based in Biloxi, Mississippi, filed for
Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on
Jan. 11, 2012. Judge Katharine M. Samson presides over the case.
Christy Pickering serves as accountant. The Debtor disclosed
$11.7 million in assets and $6.8 million in liabilities as of the
Chapter 11 filing. The petition was signed by Michael D. Haydel,
manager of general partner.
HERCULES OFFSHORE: S&P Hikes CCR to 'B' on Improving Day Rates
--------------------------------------------------------------
As Standard & Poor's Ratings Services previously announced, it
raised its corporate credit rating on Houston-based Hercules
Offshore Inc. to 'B' from 'B-'. The outlook is stable.
"At the same time we raised the senior secured notes rating to
'BB-' from 'B+'. The recovery rating remains '1', indicating our
expectation of very high recovery (90% to 100%) in the event of a
payment default. We also raised the senior unsecured notes ratings
to 'B' from 'B-'. The recovery rating remains '4', indicating our
expectation of average (30% to 50%) recovery in the event of a
payment default," S&P said.
"The upgrade reflects the improving market conditions in the Gulf
of Mexico and our expectations that Hercules' fleet will continue
to benefit," said Standard & Poor's credit analyst Stephen
Scovotti.
"As a result, financial measures should significantly improve over
the next 12 months, with debt to EBITDA falling to approximately
3.2x by year-end 2013," S&P said.
The ratings on Hercules reflect Standard & Poor's Ratings
Services' assessment of the company's "vulnerable" business risk
and "aggressive" financial risk profiles. The ratings on Hercules
incorporate its participation in the oil and gas industry's highly
volatile and competitive shallow-water drilling and marine
services segments as well as the elevated age of its jackup rig
fleet. "The ratings also incorporate our expectation that dayrates
and utilization for the company's jack-up rigs in the U.S. Gulf of
Mexico will remain strong for the next year. They also factor a
small measure of geographic and product diversification (provided
by its liftboat segments) and the company's 'adequate' liquidity,"
S&P said.
"The stable outlook reflects our expectation that Hercules' credit
ratios will improve over the next year while it maintains adequate
liquidity. We could lower the ratings if leverage exceeds 5.0x or
if liquidity falls below $50 million. We believe it would take a
prolonged fall in utilization and dayrates for this to occur. We
consider a positive rating action unlikely over the next 12
months, given the company's small size relative to peers and its
dependence on the U.S. Gulf of Mexico for the majority of its cash
flow generation. We would consider a positive rating action if the
company improves its scale of operations and its market diversity,
while maintaining leverage below 4.0x," S&P said.
HERITAGE BANK OF FLORIDA: Closed; Centennial Assumes Deposits
-------------------------------------------------------------
Heritage Bank of Florida in Lutz, Fla., was closed on Friday, Nov.
2, by the Florida Office of Financial Regulation, which appointed
the Federal Deposit Insurance Corporation as receiver. To protect
the depositors, the FDIC entered into a purchase and assumption
agreement with Centennial Bank of Conway, Ark., to assume all of
the deposits of Heritage Bank of Florida.
The three branches of Heritage Bank of Florida will reopen during
its normal banking hours as branches of Centennial Bank.
Depositors of Heritage Bank of Florida will automatically become
depositors of Centennial Bank. Deposits will continue to be
insured by the FDIC, so there is no need for customers to change
their banking relationship in order to retain their deposit
insurance coverage up to applicable limits. Customers of Heritage
Bank of Florida should continue to use their existing branch until
they receive notice from Centennial Bank that it has completed
systems changes to allow other Centennial Bank branches to process
their accounts as well.
As of Sept. 30, 2012, Heritage Bank of Florida had around $225.5
million in total assets and $223.3 million in total deposits. In
addition to assuming all of the deposits of the failed bank,
Centennial Bank agreed to purchase about $193.7 million of the
failed bank's assets. The FDIC will retain the remaining assets
for later disposition.
Customers with questions about the transaction should call the
FDIC toll-free at 1-800-830-4731. Interested parties also can
visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/heritage_fl.html
The FDIC estimates that the cost to the Deposit Insurance Fund
will be $65.5 million. Compared to other alternatives, Centennial
Bank's acquisition was the least costly resolution for the FDIC's
DIF. Heritage Bank of Florida is the 48th FDIC-insured
institution to fail in the nation this year, and the eighth in
Florida. The last FDIC-insured institution closed in the state
was First East Side Savings Bank, Tamarac, on Oct. 19, 2012.
HIGH PLAINS: Amends Letter of Intent with Chama Technologies
------------------------------------------------------------
High Plains Gas, Inc., on Oct. 29, 2012, executed an amendment to
its Letter of Intent with Chama Technologaes, Inc., for the
purchase by Chama of a controlling stock interest in High Plains.
The amendment extends the Escrow Date for required payments into
escrow; the initial $1,000,000 shall be paid into escrow on or
before Nov. 5, 2012, and the final $9,000,000 will be paid into
escrow on or before Nov. 15, 2012.
High Plains on Oct. 9, 2012, executed a Letter of Intent with
Chama.
The terms of the proposed acquisition are substantially as
follows:
In consideration for a total of $15,000,000 in cash and 658,289
shares of Chama stock, High Plains Gas will issue a fully diluted
90% of its common stock to Chama at Closing. The letter of intent
requires that Chama place into an escrow account for the payment
to the creditors of HPGS prior to the acquisition a total of
$10,000,000, deliverable in increments. The increments are that
in 10 working days from execution of the letter of intent, CHAMA
is to deposit $1,000,000 and in 20 working days after the initial
million, CHAMA is to deposit an additional $9,000,000. CHAMA
will then continue to fund the remaining $5,000,000 into escrow to
finish creditor payments. The Letter of Intent includes other
terms including funding the termination of an outstanding class of
preferred stock and buyout at a discount of any and all
outstanding options and warrants.
The letter of intent also requires the divestiture of Miller
Fabrication, LLC, the oil and gas servicing subsidiary of High
Plains.
Immediately subsequent to entering into the Letter of Intent, the
parties are negotiating the final terms of a Definitive Stock
Exchange Agreement to effectuate the transaction.
The letter of intent requires that the definitive Stock Exchange
Agreement include a significant reverse split of High Plains Gas
common stock which will provide sufficient authorized capital to
issue to CHAMA 90% of the outstanding equity of HPGS.
A copy of the Amended LOI is available at http://is.gd/z37SEM
Broadmark LOI
On Oct. 8, 2012, High Plains Gas executed a Letter of Intent with
Broadmark Energy, LLC, for the acquisition of certain assets and
the assumption of certain liabilities of Miller Fabrication, LLC,
and HPG Services, LLC.
The terms of the proposed transaction are substantially as
follows:
Broadmark will acquire all of the assets and assume certain
liabilities of Miller Fabrication in consideration for (i)
assumption of up to the current level ($3,000,000) of accounts
payable and accrued liabilities of Miller; (ii) assumption of
certain Miller Fabrication notes payable in the amount of
$3,100,000; (iii) assumption of an obligation of High Plains Gas,
Inc. to Tonaquint, Inc. (approximately $1,775,538) and (iv) cash
consideration of $200,000. The principals of Miller will also
cancel and return a total of 54,000,000 shares of common stock of
High Plains Gas, as well as any and all options or warrants to
purchase shares of stock of High Plains Gas as part of the
transaction. Broadmark will also assume the investment banking
fees owed to Broadmark Capital, LLC, by High Plains Gas, but High
Plains Gas will remain responsible for issuing financing warrants
in High Plains Gas per a previous agreement. Broadmark will
acquire all of the assets including equipment and accounts
receivable of Miller Fabrication LLC, HPG Services, LLC, High
Plains Gas, Inc. ,and High Plains Gas, LLC related to the energy
construction oil and gas services business.
About High Plains
Houston, Texas-based High Plains Gas, Inc., is a provider of goods
and services to regional end markets serving the energy industry.
It produces natural gas in the Powder River Basin located in
Northeast Wyoming. It provides construction and repair and
maintenance services primarily to the energy and energy related
industries mainly located in Wyoming and North Dakota.
The Company reported a net loss of $57.48 million on
$17.15 million of revenues for 2011, compared with a net loss of
$5.48 million on $2.61 million of revenues for 2010.
The Company's balance sheet at June 30, 2012, showed
$10.26 million in total assets, $40.42 million in total
liabilities, and a $30.16 million total stockholders' deficit.
Eide Bailly LLP, in Greenwood Village, Colorado, issued a "going
concern" qualification on the financial statements for the year
ending Dec. 31 2011, citing significant operating losses which
raised substantial doubt about High Plains Gas' ability to
continue as a going concern.
HORIZON LINES: Reports $1.8-Mil. Net Income in Third Quarter
------------------------------------------------------------
Horizon Lines, Inc., reported net income of $1.85 million on
$279.60 million of operating revenue for the quarter ended
Sept. 23, 2012, compared with a net loss of $126.36 million on
$267.62 million of operating revenue for the quarter ended
Sept. 25, 2011.
The Company reported a net loss of $76.72 million on
$813.89 million of operating revenue for the nine months ended
Sept. 23, 2012, compared with a net loss of $165.85 million on
$762.08 million of operating revenue for the nine months ended
Sept. 25, 2011.
The Company's balance sheet at Sept. 23, 2012, showed
$620.50 million in total assets, $617.47 million in total
liabilities and $3.02 million in total stockholders' equity.
"Horizon Lines generated a 3.4% improvement in container volume
and a 2.9% increase in container revenue, net of fuel surcharges,
for the third quarter, relative to the same period a year ago,"
said Sam Woodward, president and chief executive officer. "Volume
increases in Hawaii and Alaska offset volume weakness in Puerto
Rico. However, third-quarter adjusted EBITDA of $27.0 million
declined by $6.0 million from a year ago, largely due to $4.6
million of incremental transit and crew costs associated with dry-
docking three Puerto Rico vessels in China. We are doing this to
facilitate extensive maintenance and high-quality enhancements in
the most cost-efficient manner possible in order to improve vessel
reliability and service integrity in Puerto Rico."
A copy of the press release is available for free at:
http://is.gd/numVok
About Horizon Lines
Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the
nation's leading domestic ocean shipping and integrated logistics
company. The Company owns or leases a fleet of 20 U.S.-flag
containerships and operates five port terminals linking the
continental United States with Alaska, Hawaii, Guam, Micronesia
and Puerto Rico. The Company provides express trans-Pacific
service between the U.S. West Coast and the ports of Ningbo and
Shanghai in China, manages a domestic and overseas service partner
network and provides integrated, reliable and cost competitive
logistics solutions.
Horizon Lines reported a net loss of $229.41 million in 2011, a
net loss of $57.97 million in 2010, and a net loss of
$31.27 million in 2009.
Refinancing
The Company was not in compliance with the maximum senior secured
leverage ratio and the minimum interest coverage ratio under its
Senior Credit Facility at the close of its third fiscal quarter
ended Sept. 25, 2011. Non-compliance with these financial
covenants constituted an event of default, which could have
resulted in acceleration of the maturity. None of the
indebtedness under the Senior Credit Facility or Notes was
accelerated prior to the completion of a comprehensive refinancing
on Oct. 5, 2011.
The Senior Credit Facility and 99.3% of the 4.25% Convertible
Senior Notes were repaid as part of the refinancing. In addition,
as a result of the completion of the refinancing, the short-term
obligations under the Senior Credit Facility, the Notes and the
Bridge Loan have been classified as long-term debt.
As a result of the efforts to refinance the Company's debt and the
2011 amendments to the Senior Credit Facility, the Company paid
$17.3 million in financing costs and recorded a loss on
modification of debt of $0.6 million during 2011.
* * *
In June 2012, Moody's Investors Service affirmed Horizon Lines,
Inc.'s Corporate Family Rating (CFR) and Probability of Default
Rating ("PDR") at Caa2 and removed the LD ("Limited Default")
designation from the rating in recognition of the conversion to
equity of the $228 million of Series A and Series B Convertible
Senior Secured notes due in October 2017 ("Notes").
Moody's said the affirmation of the Corporate Family and
Probability of Default ratings considers that total debt has been
reduced by the conversion of the Notes, but also recognizes the
significant operating challenges that the company continues to
face.
HOWREY LLP: Equity Holders Face Class Action
--------------------------------------------
Sindhu Sundar at Bankruptcy Law360 reports that a Howrey LLP
unsecured creditor on Thursday targeted hundreds of equity
security holders of the law firm in a proposed class action
claiming the equity holders had funneled the firm's funds to
themselves in the years leading up the firm's bankruptcy.
In an adversary proceeding filed in California bankruptcy court,
Howrey Claims LLC said that the equity security holders had hurt
the firm's creditors by taking the firm's assets and funds from
April 2009 to when the firm filed for Chapter 11 protection in
April, according to Bankruptcy Law360.
About Howrey LLP
Three creditors filed an involuntary Chapter 7 petition (Bankr.
N.D. Calif. Case No. 11-31376) on April 11, 2011, against the
remnants of the Washington-based law firm Howrey LLP. The filing
was in San Francisco, where the firm had an office. The firm
previously was known as Howrey & Simon and Howrey Simon Arnold &
White LLP. The firm at one time had more than 700 lawyers in 17
offices. The partners voted to dissolve in March 2011.
The firm specialized in antitrust and intellectual-property
matters. The three creditors filing the involuntary petition
together have $36,600 in claims, according to their petition.
The involuntary chapter 7 petition was converted to a chapter 11
case in June 2011 at the request of the firm. In its schedules
filed in July, the Debtor disclosed assets of $138.7 million and
liabilities of $107.0 million.
Representing Citibank, the firm's largest creditor, is Kelley
Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton &
Garrison. Representing Howrey is H. Jason Gold, Esq., a partner
at Wiley Rein.
The Official Committee of Unsecured Creditors is represented in
the case by Bradford F. Englander, Esq., at Whiteford, Taylor And
Preston LLP.
In September 2011, Citibank sought conversion of the Debtor's case
to Chapter 7 or, in the alternative, appointment of a Chapter 11
Trustee. The Court entered an order appointing a Chapter 11
Trustee. In October 2011, Allan B. Diamond was named as Trustee.
HUNTSMAN INT'L: Moody's Rates New $300MM Sr. Unsec. Notes 'B1'
--------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Huntsman
International's LLC (HI-- Ba3 Corporate Family Rating), proposed
$300 million of senior unsecured notes due 2020. The proceeds of
the new senior unsecured debt, together with available cash, are
expected to be used to redeem $300 million in aggregate principal
amount of HI's 5 1/2% Senior Notes due 2016 and to pay associated
accrued interest. HI is a primary wholly owned operating
subsidiary of Huntsman Corporation (Huntsman -- Ba3 Corporate
Family Rating) however Huntsman will not be a guarantor of HI's
obligations. The outlook is stable.
Rating Assigned:
Issuer: Huntsman International LLC
Senior Unsecured Notes, B1, LGD5, 71%
Ratings Rationale
"The ratings reflect Huntsman's strong operating performance,
improving credit metrics, and good liquidity profile evidenced, in
part, by the lack of sizeable near term debt maturities until
2016. Indeed the proposed notes will improve HI's maturity
profile," said Moody's analyst Bill Reed.
The Ba3 CFR takes into account Huntsman's strong competitive
position in key businesses and significant competitive barriers,
including process know-how and the benefits of integrated world
scale production capabilities. The ratings are nevertheless
tempered by high leverage and relatively small amounts of free
cash flow generation after dividends at this point in the chemical
cycle, even after record EBITDA generation. Other concerns include
the company's ongoing exposure to rising prices in some feedstocks
and ores, and ongoing weakness in key end markets, notably housing
and geographically in Europe and Asia. Any improvement in the
housing or additional strength in the automobile markets would
result in further cash flow improvement. For the year ending
September 30, 2012 HI generated over $1.4 billion in adjusted
EBITDA, a record level for the company and Moody's expects a
similar amount for full year 2012. This level of EBITDA results in
debt/EBITDA of 3.25x (adjusted for loans from Huntsman), a
significant improvement when compared to the 5.8x at the end of
December 2010.
Going forward, Moody's expects that the company will continue to
generate reasonable levels of EBITDA and reduce balance sheet
debt, further strengthening HI's credit metrics and profile.
Additional support for the rating is based on management's public
statements they would like to see their unadjusted net debt
leverage at about 2 to 2.5 times on a normalized EBITDA basis.
Management's public statements in this regard have been consistent
over the last several years and they have indicated that they will
limit acquisition activity in order to hit those target levels. In
the 2011 annual letter from the President and CEO, he wrote that
reducing debt remains a focus of the board and management team
based on the belief that less debt on the balance sheet will
enhance shareholder value in the long term.
In its August 2011 research announcement Moody's noted management
suggested that over the course of the next year or so (by the end
of 2012), cash flow permitting; they would consider paying down an
additional $500 - $700 million of debt. Through September 2012
Moody's estimates that about $525 million of balance sheet debt
has been repaid or is expected to be redeemed. As documented
above, Moody's believes that strengthening the company's balance
sheet position, according to senior management is a very high
priority of Huntsman's Board of Directors.
HI's liquidity profile is good reflecting strong cash balances
($444 million at the end of September 2012 for both Huntsman and
HI combined) Liquidity is further supported by the prospect of
stable cash flow, the size of HI's revolver at $400 million, the
extension of its bank credit facility maturities to 2017 and the
goal of management to maintain liquidity at close to $1 billion in
the form of cash, accounts receivable securitization and revolver
availability. The B1 rating on the notes reflects their unsecured
position in the capital structure.
The stable outlook reflects HI's improved credit metrics and good
liquidity profile. The outlook incorporates the expectations that
the company will continue to improve its credit metrics without
materially increasing its leverage. Still, the company's
management has also expressed disappointment with the share price
multiple. Moody's notes that if the share price multiple were to
remain at current levels (high single digits) for an extended
period of time, it could increase the chances for event risk.
Should the company amortize between $400-500 million of additional
debt from free cash flow over the next two years, Moody's could
consider a higher rating. Moody's would consider a negative rating
action if EBITDA on a quarterly basis is not sustained above $100
million level. Finally, there would be negative pressure on the
rating if a large acquisition or a significant shareholder
friendly action were to meaningfully reduce cash balances and
increase debt levels.
The principal methodology used in rating Huntsman Corporation was
the Global Chemical Industry Methodology published in December
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.
Huntsman Corporation is a global manufacturer of differentiated
and commodity chemical products. Huntsman's products are used in a
wide range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and non-
durable consumer products, electronics, medical, packaging, paints
and coatings, power generation, refining and synthetic fiber
industries. Huntsman had revenues of $11.2 billion for the twelve
months ending September 30, 2012.
HUNTSMAN INT'L: S&P Rates $300MM Senior Unsecured Notes 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating and
'5' recovery rating to Huntsman International LLC's proposed
offering of $300 million of senior unsecured notes due 2020. "The
'5' recovery rating indicates our expectation of modest (10%-30%)
recovery in the event of a payment default. The company plans to
use proceeds from the notes offering to repay an equivalent amount
of senior unsecured notes due 2016," S&P said.
"The ratings reflect Salt Lake City-based Huntsman's
'satisfactory' business risk profile and 'aggressive' financial
risk profile," said credit analyst Cynthia Werneth.
"The outlook is stable. Huntsman's credit metrics are consistent
with our expectations at the ratings, including FFO-to-debt of
greater than 20%. Ratios could weaken somewhat during the next
year amid a tepid global economy and softer titanium dioxide
markets. However, thereafter we expect Huntsman's credit measures
to be solidly in line with our ratings expectations, helped by
better economic conditions, restructuring benefits, and further
modest debt reduction," S&P said.
"Nevertheless, we could lower the ratings if earnings deteriorate
because of a deeper and prolonged recession in Europe, or
substantial economic deterioration in the U.S. or China, or if
pigment segment earnings plummet. We could also lower the ratings
if the company unexpectedly increases debt for a major acquisition
or shareholder rewards. Given Huntsman's current business risk
profile, an upgrade would require the financial risk profile to
strengthen to a greater degree than we believe management is
currently committed to, including FFO-to-debt above 25% on a
sustainable basis," S&P said.
ICONIX BRAND: S&P Revises Outlook on 'B+' CCR to Stable
-------------------------------------------------------
Standard & Poor's Ratings Services revised Iconix Brand Group
Inc.'s rating outlook to stable from positive. The company's 'B+'
corporate credit rating remains unchanged. "We estimate that total
debt outstanding as of Sept. 30, 2012 was about $470 million," S&P
said.
"The outlook revision to stable from positive reflects Standard &
Poor's Ratings Services' view that Iconix will not reach the
credit ratios previously specified for an upgrade, which included
maintaining leverage at or below 2.5x. In addition, we continue to
view the company's financial risk profile as 'aggressive,'
particularly with respect to future potential debt-financed
acquisitions and share repurchases. We estimate that credit ratios
will deteriorate meaningfully due to the $600 million proposed
debt financing, including leverage rising to the mid-3x area and
funds from operations (FFO) o total debt in the low 20% area. If
Iconix successfully issues its proposed $600 million
securitization debt, we estimate pro forma debt will total around
$925 million. We believe the company may add more debt in the
future considering its ability to upsize the securitization
financing to $1.1 billion, based on the initially securitized
assets," S&P said.
"Iconix' highly acquisitive nature causes its credit metrics to be
somewhat volatile. Although estimated pro forma credit ratios are
stronger than levels typical of an 'aggressive' financial risk
profile, which include leverage between 4x and 5x, we think there
is good probability that the company could issue more debt,
resulting in credit ratio deterioration," S&P said.
"The company's continuing participation in the highly competitive,
unpredictable fashion apparel industry and its licensing contract
renewal risk contribute to what we continue to view as a 'weak'
business risk profile. The company benefits from a predictable
royalty income-based business model and high margins," S&P said.
IMAM SHIRAZI: Case Summary & 5 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Imam Shirazi World Foundation
7900 Backlick Rd.
Springfield, VA 22150
Bankruptcy Case No.: 12-16439
Chapter 11 Petition Date: October 27, 2012
Court: United States Bankruptcy Court
Eastern District of Virginia (Alexandria)
Judge: Robert G. Mayer
Debtor's Counsel: Daniel M. Press, Esq.
CHUNG & PRESS, P.C.
6718 Whittier Ave., Suite 200
McLean, VA 22101
Tel: (703) 734-3800
Fax: (703) 734-0590
E-mail: dpress@chung-press.com
Estimated Assets: $1,000,001 to $10,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its five unsecured creditors filed
together with the petition is available for free at
http://bankrupt.com/misc/vaeb12-16439.pdf
The petition was signed by Mustafa Akhound, chief restructuring
officer.
INDIANA STEEL: Sells Assets to Chicago's E&H Tubing
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Indiana Steel & Tube Inc. was authorized by the
bankruptcy judge on Oct. 31 to sell the assets for $5.68 million
to E&H Tubing Inc. from Chicago. A report of the auction said
there were 11 bidders.
About Indiana Steel and Tube
Indiana Steel and Tube, Inc., filed a Chapter 11 petition (Bankr.
S.D. Ind. Case No. 12-91512) in New Albany, Indiana on
July 10, 2012. Indiana Steel and Tube operates a cold roll steel
mill producing high quality steel tubing in Brownstown, Indiana.
The Debtor in early January 2012 began to experience some working
capital issues and an inventory imbalance. Senior management made
a decision to liquidate some inventory in order to create
additional working capital liquidity. By the end of February 2012
it became evident to senior management that while a portion of the
finished goods inventory had been liquidated the liquidity issue
had not improved and that there was a discrepancy between the
actual and book inventory. Accounting firm Agresta, Storms &
O'Leary, PC, which was enlisted by the Debtor, discovered the
inventory discrepancy was substantial. The Debtor notified its
lender Indiana Bank & Trust Co. of the issue, and continued to
investigate the issue with Agresta. The Debtor's investigation is
still ongoing.
As a result of the Debtor's inventory discrepancy, its cash
availability with IBT was significantly reduced. Although IBT has
worked with the Debtor in stabilizing operations, the Debtor needs
additional liquidity to fill customer orders and reach optimal
operational efficiency.
The Debtor filed for Chapter 11 to obtain a better forum to seek
additional operating capital either through a sale or third party
investor.
Judge Basil H. Lorch III presides over the case. Jeffrey J.
Graham, Esq., and Jerald I. Ancel, Esq., at Taft Stettinius &
Hollister LLP, serve as the Debtor's counsel.
In its schedules, the Debtor disclosed $8,008,832 in total assets
and $19,257,067 in total liabilities. The petition was signed by
Dillard Wittymore, III, chief executive officer.
INNOVATIVE USA: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Innovative USA, Inc.
50 Washington St, Ste 201
Norwalk, CT 06854
Bankruptcy Case No.: 12-51955
Chapter 11 Petition Date: October 28, 2012
Court: United States Bankruptcy Court
District of Connecticut (Bridgeport)
Judge: Alan H.W. Shiff
Debtor's Counsel: Jeffrey M. Sklarz, Esq.
CONVICER, PERCY & GREEN, LLP
701 Hebron Avenue
Glastonbury, CT 06033
Tel: (203) 218-5498
Fax: (203) 367-9678
E-mail: jsklarz@convicerpercy.com
Estimated Assets: $500,001 to $1,000,000
Estimated Debts: $1,000,001 to $10,000,000
A copy of the Company's list of its 20 largest unsecured creditors
filed together with the petition is available for free at
http://bankrupt.com/misc/ctb12-51955.pdf
The petition was signed by Michael S. Levins, chief executive
officer.
INSPIREMD INC: Has $7.5-Mil. Net Loss in Sept. 30 Quarter
---------------------------------------------------------
InspireMD, Inc., reported a net loss of $7.5 million on $509,000
of revenues for the three months ended Sept. 30, 2012, compared
with a net loss of $2.3 million on $2.0 million of revenues for
the three months ended Sept. 30, 2011.
"The increase in net loss resulted primarily from an increase in
financial expenses of approximately $4.1 million, a decrease of
approximately $0.9 million in gross profit and an increase of
approximately $0.3 million in operating expenses."
"For the three months ended Sept. 30, 2012, financial expense
increased to approximately $4.2 million from approximately
$0.1 million during the same period in 2011. The increase in
expense resulted primarily from approximately $3.2 million of
financial expense pertaining to the revaluation of warrants due to
the Company's stock price increasing to $2.27 on Sept. 30, 2012,
from $1.06 on June 30, 2012, and approximately $1.0 million of
amortization expense pertaining to the convertible debentures and
their related issuance costs for the three months ended Sept. 30,
2012. Financial expense as a percentage of revenue increased from
5.4% in 2011, to 828.7% in 2012."
The Company's balance sheet at Sept. 30, 2012, showed
$13.6 million in total assets, $14.4 million in total liabilities,
and a stockholders' deficit of $756,000.
"Because we have had recurring losses and negative cash flows from
operating activities and have significant future commitments,
substantial doubt exists regarding our ability to remain in
operation at the same level we are currently performing. Further,
the report of Kesselman & Kesselman C.P.A.s (Isr.), our
independent registered public accounting firm, with respect to our
financial statements at June 30, 2012, Dec. 31, 2011. and 2010,
and for the six month period ended June 30, 2012, and the years
ended Dec. 31, 2011, 2010, and 2009, contains an explanatory
paragraph as to our potential inability to continue as a going
concern. Additionally, this may adversely affect our ability to
obtain new financing on reasonable terms or at all."
A copy of the Form 10-Q is available at http://is.gd/7VAdv6
InspireMD, Inc., was organized in the State of Delaware on
Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the
acquisition, exploration and development of natural resource
properties. On March 28, 2011, the Company changed its name from
"Saguaro Resources, Inc." to "InspireMD, Inc."
Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical
device company focusing on the development and commercialization
of its proprietary stent platform technology, Mguard. MGuard
provides embolic protection in stenting procedures by placing a
micron mesh sleeve over a stent. The Company's initial products
are marketed for use mainly in patients with acute coronary
syndromes, notably acute myocardial infarction (heart attack) and
saphenous vein graft coronary interventions (bypass surgery).
IZEA INC: Names New Chief Operating Officer, Expands Sales Team
---------------------------------------------------------------
IZEA, Inc., has created the role of Chief Operating Officer to
further its commitment to business execution. The company has
appointed Ryan Schram to this position.
As COO, Mr. Schram will assume responsibility for improving IZEA's
existing operations from a best-practices perspective as well as
oversee the Company's client development, marketing
communications, and publisher ecosystem organizations. He will
remain active in IZEA's corporate business development growth
strategy and will report to Founder and Chief Executive Officer,
Edward Murphy.
With the announcement, Mr. Schram also joins IZEA's Board of
Directors alongside Chairman Ted Murphy and independent directors
Ed Sim, Dan Rua, and Brian Brady. IZEA Chief Financial Officer,
Donna Mackenzie, is stepping-down from the Board in accordance
with corporate governance best practices.
Mr. Schram has over 15 years of diverse experience in the
interactive marketing industry. Prior to joining IZEA in
September 2011 as Chief Marketing Officer, he was Group Vice
President at ePrize, a prominent digital engagement agency, which
was acquired by private equity firm Catteron Partners in August of
2012.
Prior to ePrize, Mr. Schram held a variety of positions of
increasing responsibility at CBS/Westwood One and Clear Channel
Interactive. His work has been regularly featured in the Wall
Street Journal, Fast Company, Entrepreneur, AdAge, PROMO and
AdWeek.
"Ryan has been invaluable in our efforts to expand and grow IZEA.
This new position allows him to focus more of his time on defining
the company's larger strategic operations, as well as developing
new revenue and partnership opportunities," said Mr. Murphy. "As
the company continues to mature in size and global reach, Ryan
will be instrumental in ensuring that IZEA has strategies and best
practices in place to capitalize on the many opportunities that
lie ahead."
In addition to the promotion of Mr. Schram, IZEA also announced
the addition of team members in its sales and marketing
organization.
Kelsey Hendrickson, Kira Baldwin, and Andy Hazelrigg have been
hired as Account Directors within IZEA's inside sales team and
will be based at the company's downtown Orlando headquarters. The
new team members will be focused on growing revenue from new and
existing clients across the United States. Each has significant
prior experience in digital advertising and media, having worked
for companies such as Discovery Networks, Digitas, and Fry Hammond
Barr previous to joining Team IZEA.
Leading IZEA's campaign fulfillment group will be David Ulrich,
who was promoted from Associate to Manager. A graduate of the
University of Central Florida, David has been with the company
since October 2011 and previous to IZEA worked at Clear Channel
Radio.
About IZEA, Inc.
IZEA, Inc., headquartered in Orlando, Fla., believes it is a world
leader in social media sponsorships ("SMS"), a rapidly growing
segment within social media where a company compensates a social
media publisher to share sponsored content within their social
network. The Company accomplishes this by operating multiple
marketplaces that include its platforms SocialSpark,
SponsoredTweets and WeReward, as well as its legacy platforms
PayPerPost and InPostLinks.
The Company's balance sheet at June 30, 2012, showed $1.4 million
in total assets, $3.5 million in total liabilities, and a
stockholders' deficit of $2.1 million.
The Company has incurred significant losses from operations since
inception and has an accumulated deficit of $20.9 million as of
June 30, 2012.
Cross, Fernandez & Riley, LLP, in Orlando, Florida, expressed
substantial doubt about IZEA's ability to continue as a going
concern, following the Company's results for the fiscal year ended
Dec. 31, 2011. The independent auditors noted that the Company
has incurred recurring operating losses and had an accumulated
deficit at Dec. 31, 2011, of $18.1 million.
J&J HOLDINGS: Highland Country Club in Ch. 11 to Stop Foreclosure
-----------------------------------------------------------------
J&J Holdings HCC, L.P., the owner of the Highland Country Club in
the northern suburbs of Pittsburgh, filed a Chapter 11 petition
last week to halt appointment of a receiver in foreclosure
initiated by the secured creditor owed $2 million.
The current owners bought the 18-hole golf course in April 2012.
It had ceased operating in October 2011 under prior ownership.
According to the report, the new owners filed a proposed
reorganization plan along with the petition. The new owners
intend to turn the course into a residential community with
individual homes and townhomes. The secured lender is Slovak
Savings Bank from Pittsburgh. The plan calls for curing defaults
on the mortgage and paying the bank as lots are sold.
The plan, the report relates, proposes paying unsecured creditors
in full, without interest, in four quarterly installments
beginning 18 months after the plan is implemented.
J&J Holdings HCC filed a Chapter 11 petition (Bankr. W.D. Pa. Case
No. 12-25293) on Oct. 26, 2012, in Pittsburgh. David K. Rudov,
Esq., at Rudov & Stein, serves as counsel.
The Debtor scheduled assets of $2,440,000 and $3,248,546 in
liabilities. Secured claims aggregate $2.5 million.
LEHMAN BROTHERS: Unit Seeks $15-Mil. Coverage in Suncal Bankruptcy
------------------------------------------------------------------
Lehman Commercial Paper Inc., a subsidiary of Lehman Brothers
Holdings Inc., asked a federal judge to force Fidelity National
Title Insurance Co. to cover it for another company's $15 million
claim in a California real estate investment that went bust during
the financial crisis, Juan Carlos Rodriguez of BankruptcyLaw360
reported.
LCPI filed a motion for summary judgment arguing that the policy
exclusion the insurer has cited does not apply to the lien claim
filed by the property's seller, the report said.
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. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LEHMAN BROTHERS: Financing Unit Sues Jefferson County on Swap Deal
------------------------------------------------------------------
Lehman Brothers Holdings Inc.'s special financing unit sued
Jefferson County, Alabama, for $1 million of revenue from the
county's sewer system, Bloomberg News reported.
In a complaint filed with the U.S. Bankruptcy Court in Birmingham
where the county's Chapter 9 proceeding is pending, the Lehman
unit recounted how it entered into an interest rate swap agreement
with the county in connection with the sewer financing.
Under the agreement, Lehman was required to make payments based
on a fixed interest rate while the county's payment would be
based on a variable rate. The county began missing payments in
early 2008. By the year's end, Lehman terminated the swap, when
$1 million had come due and wasn't paid, Bloomberg News reported.
Lehman said the contract documents gave the company a security
interest in sewer revenue on parity with the lien rights of
bondholders. It wants the bankruptcy judge, who oversees the
county's Chapter 9 bankruptcy, to declare that it is entitled to
payment from sewer revenue on account of the $1 million at the
same rate as bondholders, according to the report.
The Chapter 9 case is In re Jefferson County, Alabama, 11-05736,
U.S. Bankruptcy Court, Northern District of Alabama (Birmingham).
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. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LEHMAN BROTHERS: Asian Units' Members Receive Wind-Up Reports
-------------------------------------------------------------
The members of Lehman Brothers China Investments Limited, Lehman
Brothers Pan Asian Investments Limited, and Lehman Brothers Taiwan
Investments Limited received on Oct. 24, 2012, the liquidator's
report on the company's wind-up proceedings and property disposal.
The companies' liquidator is:
Timothy Le Cornu
c/o Declan Magennis
Governor's Square, Building 6, 2nd Floor
23 Lime Tree Bay Avenue
P.O. Box 21237 Grand Cayman KY1-1205
Cayman Islands
Telephone: +1 345 947 4700
Facsimile: +1 345 946 6728
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. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-700)
LIBERACE FOUNDATION: Sec. 341 Creditors' Meeting on Dec. 6
----------------------------------------------------------
The U.S. Trustee in Nevada will hold a Meeting of Creditors under
11 U.S.C. Sec. 341(a) in the Chapter 11 case of Liberace
Foundation for the Creative and Performing Arts on Dec. 6, 2012,
at 1:00 p.m. at 341s - Foley Bldg, Rm 1500. The last day to file
proofs of claim is March 6, 2013.
About Liberace Foundation
Founded in 1976, the Liberace Foundation for the Creative and
Performing Arts -- http://www.liberace.org/-- helps students in
Southern Nevada pursue careers in the performing and creative arts
through scholarship assistance and artistic exposure. The
foundation has awarded more than 2,700 students with scholarships.
It owns the Liberace Museum Collection at 1775 E. Tropicana, in
Las Vegas. The Liberace Museum, which has exhibited the jewelry,
pianos, garish gowns and other artifacts owned by the great
pianist and showman, was opened in 1979. The property is valued
at $13 million. The secured creditor, U.S. Bank N.A., is owed
$1.269 million.
Liberace Foundation filed a Chapter 11 petition (Bankr. D. Nev.
Case No. 12-22004) in Las Vegas on Oct. 24, 2012, estimating
$10 million to $50 million in both assets and liabilities.
Bankruptcy Judge Mike K. Nakagawa presides over the case. The
Ghandi Law Offices serves as the Debtor's counsel. The petition
was signed by Anna Nateece, business manager.
LIBERACE FOUNDATION: Taps Ghandi Law Offices as Bankruptcy Counsel
------------------------------------------------------------------
Liberace Foundation for the Creative and Performing Arts filed
papers in Bankruptcy Court seeking permission to employ Nedda
Ghandi, Esq., and the Ghandi Law Offices in Las Vegas to serve as
its bankruptcy counsel under a general retainer.
Liberace provided the firm a $20,000 retainer pre-bankruptcy. Of
the initial retainer, $15,000 has been applied pre-bankruptcy
towards any and all prepetition performed for the completion of
the Chapter 11 schedules and statements; and $1,046 has been
applied to the Chapter 11 filing fees. A balance of $3,954
remains in the retainer account. The source of funds is the
Debtor's earnings and endowment funds.
The firm's current hourly rates are:
Not excededing $300 per hour for attorney;
Not excededing $175 per hour for law clerk; and
Not excededing $125 per hour for paralegal.
To the best of the Debtor's knowledge, the firm does not hold or
represent an interest adverse to the Debtor's estate, and is
"disinterested".
The firm may be reached at:
Nedda Ghandi, Esq.
Amber P. Adams, Esq.
GHANDI LAW OFFICES
601 South 6th Street
Las Vegas, NV 89101
Tel: (702) 878-1115
E-mail: nedda@ghandilaw.com
amber@ghandilaw.com
There's a hearing Dec. 12 to consider the request.
About Liberace Foundation
Founded in 1976, the Liberace Foundation for the Creative and
Performing Arts -- http://www.liberace.org/-- helps students in
Southern Nevada pursue careers in the performing and creative arts
through scholarship assistance and artistic exposure. The
foundation has awarded more than 2,700 students with scholarships.
It owns the Liberace Museum Collection at 1775 E. Tropicana, in
Las Vegas. The Liberace Museum, which has exhibited the jewelry,
pianos, garish gowns and other artifacts owned by the great
pianist and showman, was opened in 1979. The property is valued
at $13 million. The secured creditor, U.S. Bank N.A., is owed
$1.269 million.
Liberace Foundation filed a Chapter 11 petition (Bankr. D. Nev.
Case No. 12-22004) in Las Vegas on Oct. 24, 2012, estimating
$10 million to $50 million in both assets and liabilities.
Bankruptcy Judge Mike K. Nakagawa presides over the case. The
Ghandi Law Offices serves as the Debtor's counsel. The petition
was signed by Anna Nateece, business manager.
LIGHTSQUARED INC: LP Lenders' Standing Motion Adjourned to Nov. 28
------------------------------------------------------------------
The hearing on the motion of the Ad Hoc Secured Group of
LightSquared LP for entry of an order granting it leave, standing
and authority to commence, prosecute and/or settle certain claims
of the Debtors' estates, previously scheduled for Nov. 5, 2012,
at 10:00 a.m., has been adjourned to Nov. 28, 2012 at 10:00 a.m.
The holders of $1.08 billion in secured debt in LightSquared LP
said LightSquared Inc. received a faulty $263.8 million loan last
year. The LP Lenders claim that the July 2011 loan should be
recharacterized as an equity investment by Harbinger, which
contributed $183.8 million of the total. Affiliates committed
fraudulent transfers when they guaranteed the loan without
receiving anything of value in return, the Ad Hoc Secured Group
contended.
About LightSquared Inc.
LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, as the Company seeks to resolve regulatory issues
that have prevented it from building its coast-to-coast integrated
satellite 4G wireless network.
LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network. In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries. In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.
LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties,
prompting the bankruptcy filing.
As of the Petition Date, the Debtors employed roughly 168 people
in the United States and Canada. As of Feb. 29, 2012, the Debtors
had $4.48 billion in assets (book value) and $2.29 billion in
liabilities.
LightSquared also sought ancillary relief in Canada on behalf of
all of the Debtors, pursuant to the Companies' Creditors
Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the
Ontario Superior Court of Justice (Commercial List) in Toronto,
Ontario, Canada. The purpose of the ancillary proceedings is to
request the Canadian Court to recognize the Chapter 11 cases as a
"foreign main proceeding" under the applicable provisions of the
CCAA to, among other things, protect the Debtors' assets and
operations in Canada. The Debtors named affiliate LightSquared LP
to act as the "foreign representative" on behalf of the Debtors'
estates.
Judge Shelley C. Chapman presides over the Chapter 11 case.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors. Kurtzman Carson Consultants LLC serves as claims and
notice agent.
Counsel to UBS AG as agent under the October 2010 facility is
Melissa S. Alwang, Esq., at Latham & Watkins LLP.
The ad hoc secured group of lenders under the Debtors' October
2010 facility was formed in April 2012 to negotiate an out-of-
court restructuring. The members are Appaloosa Management L.P.;
Capital Research and Management Company; Fortress Investment
Group; Knighthead Capital Management LLC; and Redwood Capital
Management. Counsel to the ad hoc secured group is Thomas E.
Lauria, Esq., at White & Case LLP.
Philip Falcone's Harbinger Capital Partners indirectly owns 96% of
LightSquared's outstanding common stock. Harbinger and certain of
its managed and affiliated funds and wholly owned subsidiaries,
including HGW US Holding Company, L.P., Blue Line DZM Corp., and
Harbinger Capital Partners SP, Inc., are represented in the case
by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP.
The Office of the U.S. Trustee has not appointed a statutory
committee of unsecured creditors.
LODGENET INTERACTIVE: Mast Capital Discloses 5.1% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Mast Capital Management, LLC, and its
affiliates disclosed that, as of Oct. 26, 2012, they beneficially
own 1,289,823 shares of common stock of LodgeNet Interactive
Corporation representing 5.1% of the shares outstanding. Mast
Capital previously reported beneficial ownership of 1,983,121
common shares or a 7.8% equity stake as of April 26, 2012.
A copy of the filing is available for free at http://is.gd/ChdMQ9
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's Corporate Family Rating 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.
LONGVIEW POWER: Bank Debt Trades at 16% Off in Secondary Market
---------------------------------------------------------------
Participations in a syndicated loan under which Longview Power LLC
is a borrower traded in the secondary market at 83.80 cents-on-
the-dollar during the week ended Friday, Nov. 2, an increase of
0.50 percentage points from the previous week according to data
compiled by LSTA/Thomson Reuters MTM Pricing and reported in The
Wall Street Journal. The Company pays 575 basis points above
LIBOR to borrow under the facility. The bank loan matures on Oct.
31, 2017. The loan is one of the biggest gainers and losers among
196 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
Longview is a special purpose entity created to construct, own,
and operate a 695 MW supercritical pulverized coal-fired power
plant located in Maidsville, West Virginia, just south of the
Pennsylvania border and approximately 70 miles south of
Pittsburgh. The project is owned 92% by First Reserve Corporation
(First Reserve or sponsor), a private equity firm specializing in
energy industry investments, through its affiliate GenPower
Holdings (Delaware), L.P. (GenPower), and 8% by minority
interests.
LPATH INC: Offering $20 Million Worth of Securities
---------------------------------------------------
LPath, Inc., filed with the U.S. Securities and Exchange
Commission a Form S-3 registration statement relating to the
offering of $20 million worth of common stock, warrants and units.
The Company's common stock is listed on The Nasdaq Capital Market
under the symbol "LPTN." On Nov. 1, 2012, the last reported sale
price for the Company's common stock was $6.55 per share.
A copy of the prospectus is available for free at:
http://is.gd/NRBEzK
About Lpath, Inc.
San Diego, Calif.-based Lpath, Inc. is a biotechnology company
focused on the discovery and development of lipidomic-based
therapeutics, an emerging field of medical science whereby
bioactive lipids are targeted to treat human diseases.
The Company's balance sheet at June 30, 2012, showed $21.03
million in total assets, $14.31 million in total liabilities and
$6.71 million in total stockholders' equity.
The Company reported a net loss of $3.11 million in 2011, compared
with a net loss of $4.60 million in 2010.
MCCLATCHY CO: Files Form 10-Q, Posts $5.1MM Net Income in Q3
------------------------------------------------------------
The McClatchy Company filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $5.09 million on $287.46 million of net revenues for the
quarter ended Sept. 23, 2012, compared with net income of
$9.39 million on $300.21 million of net revenues for the quarter
ended Sept. 25, 2011.
The Company reported net income of $29.87 million on
$875.06 million of net revenues for the nine months ended
Sept. 23, 2012, compared with net income of $12.38 million on
$918.20 million of net revenues for the nine months ended
Sept. 25, 2011.
The Company's balance sheet at Sept. 23, 2012, showed
$2.88 billion in total assets, $2.67 billion in total liabilities,
and $210.29 million in stockholders' equity.
A copy of the Form 10-Q is available for free at:
http://is.gd/IdjYPW
About The McClatchy Company
Sacramento, Calif.-based The McClatchy Company (NYSE: MNI)
-- http://www.mcclatchy.com/-- is the third largest newspaper
company in the United States, publishing 30 daily newspapers, 43
non-dailies, and direct marketing and direct mail operations.
McClatchy also operates leading local Web sites in each of its
markets which extend its audience reach. The Web sites offer
users comprehensive news and information, advertising, e-commerce
and other services. Together with its newspapers and direct
marketing products, these interactive operations make McClatchy
the leading local media company in each of its premium high growth
markets. McClatchy-owned newspapers include The Miami Herald, The
Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City
Star, The Charlotte Observer, and The News & Observer (Raleigh).
* * *
McClatchy carries a 'Caa1' corporate family rating from Moody's
Investors Service. In May 2011, Moody's changed the rating
outlook from stable to positive following the company's
announcement that it closed on the sale of land in Miami for
$236 million. The outlook change reflects Moody's expectation
that McClatchy will utilize the net proceeds to reduce debt,
including its underfunded pension position, which will reduce
leverage by approximately half a turn and lower required
contributions to the pension plan over the next few years.
MEDICURE INC: Completes Common Shares Consolidation
---------------------------------------------------
Medicure Inc. announced that, further to its news release of
Sept. 21, 2012, the TSX Venture Exchange has approved the
consolidation of the Company's issued and outstanding common
shares on the basis of one post-consolidation common share for
every fifteen pre-consolidation common shares and the Company has
proceeded with the consolidation. Effective at the opening of the
market on Nov. 2, 2012, Medicure's shares commenced trading on the
Exchange on a consolidated basis under the new CUSIP number
58469E408. The Company's name and trading symbol will not change
as a result of the consolidation. The Company will have
approximately 12,196,506 common shares issued and outstanding as a
result of the consolidation.
Letters of transmittal with respect to the consolidation will be
sent to registered shareholders. All registered shareholders of
the Company will be required to send their certificates
representing pre-consolidation common shares with a properly
executed letter of transmittal to the Company's transfer agent,
Computershare Investor Services Inc. in Toronto, Ontario
(Shareholder Services - Toll Free (North America) 1-800-564-6253,
Overseas 1-514-982-7555 or corporateactions@computershare.com).
Shareholders who hold their shares through their broker or other
intermediary and do not have actual share certificates registered
in their name will not be required to complete and return a letter
of transmittal. Additional copies of the letter of transmittal
can be obtained through Computershare. All shareholders who duly
complete letters of transmittal and submit their pre-consolidation
common share certificates to Computershare will receive a Direct
Registration Advice representing the number of post-consolidation
common shares to which they are entitled to pursuant to the terms
of the consolidation.
About Medicure Inc.
Based in Winnipeg, Manitoba, Canada, Medicure Inc. (TSX/NEX:
MPH.H) -- http://www.medicure.com/-- is a biopharmaceutical
company engaged in the research, development and commercialization
of human therapeutics. The Company has rights to the commercial
product, AGGRASTAT(R) Injection (tirofiban hydrochloride) in the
United States and its territories (Puerto Rico, U.S. Virgin
Islands, and Guam). AGGRASTAT(R), a glycoprotein GP IIb/IIIa
receptor antagonist, is used for the treatment of acute coronary
syndrome (ACS) including unstable angina, which is characterized
by chest pain when one is at rest, and non-Q-wave myocardial
infarction.
KPMG LLP, in Winnipeg, Canada, issued a "going concern"
qualification on the consolidated financial statements for the
fiscal year ended May 31, 2012. The independent auditors noted
that the Company has experienced operating losses and has
accumulated a deficit of $123,303,052 that raises substantial
doubt about its ability to continue as a going concern.
Medicure reported net income of C$23.38 million for the year ended
May 31, 2012, in comparison with a net loss of C$1.63 million
during the prior fiscal year.
The Company's balance sheet at Aug. 31, 2012, showed C$4.11
million in total assets, C$6.37 million in total liabilities and a
C$2.26 million total deficiency.
MF GLOBAL: PwC Fails Again to Stop Malpractice Suit
---------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Pricewaterhouse Coopers LLP failed once again in
trying to block a lawsuit for malpractice resulting from serving
as accountants for MF Global Inc., the liquidating commodity
broker. The bankruptcy judge last week denied PwC's request to
halt a lawsuit while the accountants appeal.
The report recounts that in August the trustee for the brokerage
worked out an arrangement allowing class-action plaintiffs to
bring lawsuits against former officers, directors and others. The
bankruptcy judge approved the arrangement on Oct. 11. PwC
appealed the next day and lodged a request to halt the initiation
of a lawsuit until the appeal is decided.
According to the report, U.S. Bankruptcy Judge Martin Glenn denied
the stay-pending appeal motion in an eight-page opinion on Nov. 1.
Trying to halt the lawsuit, PwC pointed to provisions in the
engagement agreement saying that MF Global is prohibited from
transferring the right to sue. Judge Glenn found the provision
not applicable in bankruptcy. Judge Glenn denied the stay, saying
PwC will incur no "irreparable injury" because the MF Global
trustee could sue on his own. Therefore, Judge Glenn said, PwC
"would incur the costs of defending the actions either way."
The judge also ruled that PwC hadn't shown necessary likelihood of
success on appeal because he already rejected the accountants'
arguments. Judge Glenn said the suit should go forward because
there is a "strong public interest in maximizing the return to
creditors in a bankruptcy."
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/--
was one of the world's leading brokers of commodities and
listed derivatives. MF Global provided access to more than
70 exchanges around the world. The firm was also one of 22
primary dealers authorized to trade U.S. government securities
with the Federal Reserve Bank of New York. MF Global's roots go
back nearly 230 years to a sugar brokerage on the banks of the
Thames River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos.
11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed.
As of Sept. 30, 2011, MF Global had $41,046,594,000 in total
assets and $39,683,915,000 in total liabilities.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy
cases of MF Global Holdings Ltd. and its affiliates. The Chapter
11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as
investigative counsel; (ii) FTI Consulting Inc., as restructuring
advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel;
and (iv) Pepper Hamilton as special counsel.
An Official Committee of Unsecured Creditors has been appointed
in the case. The Committee has retained Capstone Advisory Group
LLC as financial advisor.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
MF GLOBAL: UK Unit Is Nondefaulting Party, Judge Rules
------------------------------------------------------
Brian Mahoney at Bankruptcy Law360 reports that U.K. High Court
Judge Richard Williams on Thursday ruled MF Global Inc.'s U.K.
subsidiary is entitled to calculate what it owes its parent to
settle internal repurchase agreements on the broker-dealer's
disastrous European sovereign debt purchases, in a setback for the
American company's bid to recoup about GBP286 million ($461
million).
Bankruptcy Law360 relates that Judge Williams ruled MF Global U.K.
is the nondefaulting party under the global master repurchase
agreement governing the contracts.
About MF Global
New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/
-- was one of the world's leading brokers of commodities and
listed derivatives. MF Global provided access to more than
70 exchanges around the world. The firm was also one of 22
primary dealers authorized to trade U.S. government securities
with the Federal Reserve Bank of New York. MF Global's roots go
back nearly 230 years to a sugar brokerage on the banks of the
Thames River in London.
MF Global Holdings Ltd. and MF Global Finance USA Inc. filed
voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos.
11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to
Interactive Brokers Group collapsed.
As of Sept. 30, 2011, MF Global had $41,046,594,000 in total
assets and $39,683,915,000 in total liabilities.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of
MF Global Finance USA Inc.
Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy
cases of MF Global Holdings Ltd. and its affiliates. The Chapter
11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as
investigative counsel; (ii) FTI Consulting Inc., as restructuring
advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel;
and (iv) Pepper Hamilton as special counsel.
An Official Committee of Unsecured Creditors has been appointed
in the case. The Committee has retained Capstone Advisory Group
LLC as financial advisor.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at
Hughes Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
MORGANS HOTEL: Incurs $15.9 Million Net Loss in Third Quarter
-------------------------------------------------------------
Morgans Hotel Group Co. reported a net loss of $15.95 million on
$44.03 million of total revenues for the three months ended
Sept. 30, 2012, compared with a net loss of $25.61 million on
$46.68 million of total revenues for the same period during the
prior year.
The Company reported a net loss of $43.96 million on
$135.12 million of total revenues for the nine months ended
Sept. 30, 2012, compared with a net loss of $70.29 million on
$155.29 million of total revenues for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $577.02
million in total assets, $702.21 million in total liabilities,
$6.41 million in noncontrolling interest, and a $131.58 million
total stockholders' deficit.
Michael Gross, CEO of the Company, said, "During the third
quarter, we made additional progress executing our growth
strategy, with the announcement of Delano Las Vegas, in
partnership with MGM, and Delano Moscow. The opening of our new
international property in September, Delano Marrakech, marks the
beginning of the rollout of our pipeline. We are excited about
the momentum in our management business. Together with our
previously announced expansion hotels, we will almost double the
size of our portfolio when these hotels open, which we believe
will allow us to generate high EBTIDA margins due to our scalable
infrastructure. In addition, we completed our rooms and corridor
renovation at Hudson in September. Overall, we are encouraged by
our progress in the quarter and remain focused on executing our
strategy and building long-term shareholder value."
A copy of the press release is available for free at:
http://is.gd/ypnXNc
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
The Company reported a net loss of $87.95 million in 2011, a net
loss of $83.64 million in 2010, and a net loss of $101.60 million
in 2009.
MOUNTAIN STATE: Moody's Confirms 'B1' Rating on Revenue Bonds
-------------------------------------------------------------
Moody's Investors Service has confirmed the B1 rating on Mountain
State University's revenue bonds and removed the rating from
review for downgrade. The rating applies to $4.97 million of rated
debt issued through the City of Beckley, WV and the Raleigh County
Building Commission, WV. The rating outlook is developing.
Summary Rating Rationale
The B1 rating reflects the withdrawal of the university's
accreditation by the Higher Learning Commission of the North
Central Association of Colleges and Schools (HLC), effective
December 31, 2012. The university appealed the decision even as it
planned for the possibility of an unsuccessful appeal process. The
HLC intends to notify the university of its decision in December
2012. With its 89% reliance on student generated revenue, the
expected loss of accreditation is a sharp blow to MSU's business
model. Without accreditation, enrolled students can no longer
benefit from federal financial aid programs. As of fall 2011, 81%
of full-time undergraduate received financial aid with the
majority of those participating in federal programs.
With a broken business model Moody's rating incorporates the
flexible reserves of the university and the expected use of
financial reserves to cover operating deficits and potential
litigation and liquidation expenses. The university had a history
of maintaining a better cash to debt position than most tuition-
dependent universities. As of May 31, 2011, cash and investments
covered debt by 148%.The developing outlook reflects the expected
redemption of the Series 2004 bonds countered by the possibility
of liquidation and ongoing litigation risk from students claiming
harm resulting from the loss of accreditation.
Strengths
* Healthy flexible reserves relative to debt for rating category
with unrestricted cash used to fund expected redemption of
rated bonds on December 1, 2012.
* Likely orderly dissolution of universities activities. Moody's
believes the most likely scenario is that Mountain State
University will lose its appeal and cease to enroll students
after December 31, 2012 and the University of Charleston will
operate in Beckley. Moody's notes that the two universities
have only entered into a memorandum of understanding and are
still engaged in negotiations. Some MSU board representation
from the Beckley community may continue, including governance
of donor restricted funds in support of students enrolling at
the Beckley campus.
* Potential to liquidate real assets to raise cash or reduce
liabilities.
Challenges
* Withdrawal of accreditation and broken business model for
tuition dependent university with burn rate from operations
depleting cash over time. Prospects for cash flow improvement
highly limited. Wind down process complicated by operations in
multiple states and leveraged commercial property in
Martinsburg, West Virginia.
* Litigation risk from students claiming harm from accreditation
loss as well as former employees claiming wrongful
termination.
* Possible, even if unlikely risk from potential claw back of
preferential payments to the trustee to fund redemption of the
rated Series 2004 revenue bonds under some bankruptcy
scenarios.
Outlook
The developing outlook reflects the expected redemption of the
Series 2004 bonds countered by expectations of ongoing uncertainty
arising from the possibility of liquidation and ongoing litigation
risk from students claiming harm resulting from the loss of
accreditation.
What Could Make The Rating Go Up
Successful retirement of debt and negotiations with University of
Charleston including the avoidance of bankruptcy and risks related
to the potential for claw back of preferential payments.
What Could Make The Rating Go Down
Unsuccessful negotiations in support of an orderly wind down of
activities; bankruptcy scenario that includes potential claw back
of transfers related to the rated debt.
Principal Rating Methodology
The principal methodology used in this rating was U.S. Not-for-
Profit Private and Public Higher Education published in August
2011.
NATIONAL HOLDINGS: Bryant Riley Resigns from Board
--------------------------------------------------
Bryant R. Riley resigned as a member of National Holdings
Corporation's Board of Directors, effective Oct. 29, 2012.
About National Holdings
New York, N.Y.-based National Holdings Corporation is a financial
services organization, operating primarily through its wholly
owned subsidiaries, National Securities Corporation, Finance
Investments, Inc., and EquityStation, Inc. The Broker-Dealer
Subsidiaries conduct a national securities brokerage business
through their main offices in New York, New York, Boca Raton,
Florida, and Seattle, Washington.
The Company had a net loss of $4.7 million on $126.5 million
of total revenues for fiscal year ended Sept. 30, 2011, compared
with a net loss of $6.6 million on $111.0 million on total
revenues for fiscal 2010.
The Company's balance sheet at June 30, 2012, showed $15.51
million in total assets, $18.63 million in total liabilities,
$26,000 in non-controlling interest and a $3.14 million in total
National Holdings Corporation stockholders' deficit.
In the auditors' report accompanying the consolidated financial
statements for the year ended Sept. 30, 2011, Sherb & Co., LLP, in
Boca Raton, Florida, expressed substantial doubt about National
Holdings' ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant losses
and has a working capital deficit as of Sept. 30, 2011.
Bankruptcy Warning
The Company said in its quarterly report for the period ended
June 30, 2012, that its future is dependent on its ability to
sustain profitability and obtain additional financing. If the
Company fails to do so for any reason, it would not be able to
continue as a going concern and could potentially be forced to
seek relief through a filing under the U.S. Bankruptcy Code.
NEOMEDIA TECHNOLOGIES: Global Grid Discloses 8.6% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Global Grid, LLC, and Dr. Patrick Soon-Shiong
disclosed that, as of Nov. 2, 2012, they beneficially own
113,494,743 shares of common stock of Neomedia Technologies, Inc.,
representing 8.6% of the shares outstanding.
Global Grid previously reported beneficial ownership of 25.9%
equity stake as of March 15, 2012.
The number of shares of common stock of the Company outstanding
has increased from 437,378,114 shares as of Nov. 9, 2011, as
reported in the quarterly report on Form 10-Q filed by the Company
with the SEC on Nov. 14, 2011, to 1,323,665,957 shares as of Aug.,
2012, as reported in the quarterly report on Form 10-Q filed by
the Company with the SEC on Aug. 14, 2012. Accordingly, the
beneficial ownership of Global Grid has decreased from 25.9% of
the outstanding common stock to 8.6% of the outstanding Common
Stock, even though the Reporting Persons have not engaged in any
transactions in Common Stock, and there has not be any change in
the number of shares of Common Stock beneficially owned by the
Reporting Persons, since the filing of their original Schedule 13D
on March 21, 2012.
A copy of the amended filing is available for free at:
http://is.gd/6M1AFH
About NeoMedia Technologies
Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile
barcode scanning solutions. The Company's technology allows
mobile devices with cameras to read 1D and 2D barcodes and provide
"one click" access to mobile content.
After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa,
FL, expressed substantial doubt about the Company's ability to
continue as a going concern. The independent auditors noted that
the Company has suffered recurring losses from operations and has
ongoing requirements for additional capital investment.
The Company reported a net loss of $849,000 in 2011, compared
with net income of $35.09 million in 2010.
The Company's balance sheet at June 30, 2012, showed $7.53 million
in total assets, $106.09 million in total liabilities, all
current, $4.84 million in series C convertible preferred stock,
$348,000 in series D convertible preferred stock, and a
$103.74 million total shareholders' deficit.
NEXSTAR BROADCASTING: Offering $300 Million Worth of Securities
---------------------------------------------------------------
Nexstar Broadcasting Group, Inc., filed with the U.S. Securities
and Exchange Commission a Form S-3 registration statement relating
to the offering of Class A common stock, preferred stock, debt
securities and warrants of up to $300,000,000. The Company's
principal operating subsidiary, Nexstar Broadcasting, Inc., may
guarantee some or all of the Company's debt securities as well as
one or more other entities.
In addition to the primary offering of securities, ABRY Broadcast
Partners II, L.P., ABRY Broadcast Partners III, L.P. and
affiliated entities hold shares of the Company's Class A common
stock and Class B common stock. Assuming conversion of all shares
of Class B common stock held by ABRY, ABRY, as selling
stockholder, may from time to time sell up to 16,515,384 shares of
the Company's Class A common stock. The Company will not receive
any proceeds from the sale, if any, of Class A common stock by the
selling stockholders pursuant to this prospectus, but the Company
may pay certain registration and offering fees and expenses.
In the event that the shares of Class B common stock represent
less than 10% of the total common stock of the Company
outstanding, the date of that event will constitute the Class B
conversion date and, among other things, all shares of Class B
common stock then outstanding will automatically convert into
shares of Class A common stock.
The Company's Class A common stock is traded on The NASDAQ Global
Market under the symbol "NXST." On Nov. 1, 2012, the last
reported sale price of the Company's Class A common stock on The
NASDAQ Global Market was $11.06 per share.
A copy of the Form S-3 prospectus is available at:
http://is.gd/fI7loP
About Nexstar Broadcasting Group
Irving, Texas-based Nexstar Broadcasting Group Inc. currently
owns, operates, programs or provides sales and other services to
62 television stations in 34 markets in the states of Illinois,
Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania,
Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and
Florida. Nexstar's television station group includes affiliates
of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches
approximately 13 million viewers or approximately 11.5% of all
U.S. television households.
The Company reported a net loss of $11.89 million in 2011, a net
loss of $1.81 million in 2010, and a net loss of $12.61 million
in 2009.
The Company's balance sheet at June 30, 2012, showed $566.34
million in total assets, $736.93 million in total liabilities and
a $170.58 million total stockholders' deficit.
* * *
As reported by the TCR on Oct. 26, 2012, Standard & Poor's Ratings
Services raised its corporate credit rating on Irving, Texas-based
Nexstar Broadcasting Group Inc. and on certain subsidiaries to
'B+' from 'B'. "The rating action reflects our view that the
stations that Nexstar will acquire from Newport will improve the
company's business risk profile and that trailing-eight-quarter
leverage will improve to 6x or less over the intermediate term,"
said Standard & Poor's credit analyst Daniel Haines.
In the Oct. 26, 2012, edition of the TCR, Moody's Investors
Service upgraded the corporate family and probability of default
ratings of Nexstar Broadcasting, Inc. (Nexstar) to B2 from B3.
The upgrade and positive outlook incorporate expectations for
continued improvement in the credit profile resulting from both
the transaction and Nexstar's operating performance.
NORTHCORE TECHNOLOGIES: Launches Dutch Auction Platform for Wine
----------------------------------------------------------------
Northcore Technologies Inc. announced the successful delivery of
the Dutch Auction platform for Alberta based BlackSquare Inc. and
their flash sale site Tannic.ca.
Tannic is a leader in the provision of an exceptional range of
wines to a group of discerning members. The product set is
presented conveniently and effectively through a sophisticated web
presence and utilizing the Blackboxx technology also made by
BlackSquare. Northcore provided a complementary platform to
deliver a hand-picked selection of wines through a compelling
online format where prices descended as the event proceeded.
"At BlackSquare, we deliver the world's most advanced wine
ecommerce platform to global clients and we're always looking for
new technology," said Matthew Protti, CEO of BlackSquare Inc.
"Combining Northcore's innovative auction software with our
Tannic.ca flash sale site enables the kind of technical magic our
clients expect from us as we continue to revolutionize the wine
ecommerce industry."
The Web site and more information can be found at:
http://www.Tannic.ca
"It is exciting to be working with an industry leader like
BlackSquare and their property Tannic.ca on this groundbreaking
project," said Amit Monga, CEO of Northcore Technologies. "Our
proprietary and patent protected, Dutch Auction process is a
natural fit for the wine and spirits industries and we expect this
partnership to continue to yield positive results for both
parties."
Further information on Northcore's Dutch Auction intellectual
property can be found at http://is.gd/YEOpih
About Northcore Technologies
Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC
BB: NTLNF) -- http://www.northcore.com/-- provides a Working
Capital Engine(TM) that helps organizations source, manage,
appraise and sell their capital equipment. Northcore offers its
software solutions and support services to a growing number of
customers in a variety of sectors including financial services,
manufacturing, oil and gas and government.
Northcore owns 50% of GE Asset Manager, LLC, a joint business
venture with GE. Together, the companies work with leading
organizations around the world to help them liberate more capital
value from their assets.
The Company reported a loss and comprehensive loss of
C$3.93 million in 2011, compared with a loss and comprehensive
loss of C$3.03 million in 2010.
The Company's balance sheet at June 30, 2012, showed
C$3.49 million in total assets, C$852,000 in total liabilities,
and C$2.64 million in shareholders' equity.
OCWEN FINANCIAL: Moody's Affirms 'B1' Corp. Family Rating
---------------------------------------------------------
Moody's Investors Service affirmed Ocwen Financial Corporation's
corporate family and senior secured ratings at B1. The outlook for
all ratings are stable.
Ratings Rationale
Ocwen's ratings reflect the company's extraordinarily rapid growth
balanced by the company's strong capital and leverage metrics for
a B1 rated financial services company. In addition, the ratings
reflect the company's solid track record as a non-prime
residential mortgage servicer along with its record of integrating
servicer acquisitions.
The ratings are also constrained by the fact that virtually all
new servicing volume is obtained through opportunistic bulk
acquisitions and that the company is a monoline financial services
company concentrating on the residential mortgage servicing
market. Management also has a history of exploring new ancillary
business opportunities, potentially distracting management from
its focus on the core servicing franchise.
On October 24, 2012, Ocwen announced that it was the successful
bidder of the servicing platform along with $160 billion in
servicing and subservicing rights at the bankruptcy auction of
Residential Capital, LLC. Previously, on October 3, 2012 Ocwen
announced that it had entered into an agreement to acquire
Homeward Residential Holdings, Inc. along with its approximately
$75 billion servicing portfolio.
Upon completion of the two acquisitions, Ocwen's servicing
portfolio will triple and it will surpass US Bank and become the
fifth largest US residential mortgage servicer. While the exposure
to integration complexities and growing pains is credit negative,
the company has strong capital and leverage metrics for a B1 rated
financial services company along with a solid track record and
success at integrating other servicing platforms.
Given the high rate of recent growth, an upgrade is unlikely at
this time. Negative ratings pressure could result if the company's
servicing performance or financial fundamentals weaken. Particular
focus will be on: (a) the amount of additional indebtedness the
company incurs to finance the two acquisitions (b) call center
metrics, (c) delinquency rates of the servicing portfolio, (d)
cash reconciliation statistics.
The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.
Ocwen Financial, a publicly-traded company, is a provider of
residential and commercial loan servicing, special servicing and
asset management services with headquarters in Atlanta, Georgia
and offices in West Palm Beach and Orlando, Florida, Houston,
Texas and Washington, DC and global support operations in Uruguay
and India.
OLD REPUBLIC: Fitch Maintains Watch Negative on 'BB' IDR
--------------------------------------------------------
Fitch Ratings maintains a Rating Watch Negative on Old Republic
International Corporation (ORI) and its insurance subsidiaries.
This rating action reflects Fitch's ongoing concern surrounding
the possibility of an acceleration of ORI's outstanding debt
(related to a potential future breach of a subsidiary collateral
covenant), as well as uncertainty as to ORI's ability to fund an
acceleration should one occur. ORI's debt is subject to
acceleration if any of its significant subsidiaries experience
bankruptcy, insolvency, rehabilitation or reorganization.
Since Jan. 19, 2012, ORI subsidiary Republic Mortgage Insurance
Co. (RMIC) has been operating under an Order of Supervision
(Order) issued by the North Carolina Department of Insurance
(NCDOI). The Order instructed RMIC to reduce the cash payment on
all claims to 50%, and to defer payment of the remaining 50% until
a future date authorized by the NCDOI. The Order was put in place
for an initial period not to exceed one year.
On Sept. 14, 2012, RMIC submitted a Corrective Plan to the NCDOI,
for which a hearing was conducted on Oct. 16, 2012. The substance
of RMIC's proposal was for RMIC to increase its cash payments to
60%, and for the NCDOI to keep RMIC under supervision until at
least year-end 2021. Fitch notes that a formal extension of
regulatory supervision of RMIC over such a long period would
likely allow ORI to avoid a covenant breach and related debt
acceleration, since RMIC would then more likely avoid bankruptcy,
insolvency, rehabilitation or reorganization.
An independent study of RMIC's reserves was conducted by a
consulting firm engaged by the NCDOI. The results of the study
indicate that RMIC has a material probability of exhausting its
surplus over the next two to three years regardless of the
deferred payment obligation (DPO) percentage. The consultant
recommended maintenance of the 50% cash payment. The consultant's
views on RMIC's financial capabilities are consistent with Fitch's
views, and are already incorporated in the Negative Watch.
ORI anticipates that 'in the foreseeable future' the NCDOI will
issue its conclusions.
As of Sept. 30, 2012, ORI reported $146 million of parent
liquidity resources, including cash and short-term investments at
the holding company and its non-regulated subsidiaries. ORI's
outstanding debt is $550 million, which creates a potential
funding shortfall of $354 million in the event of acceleration.
Fitch notes that ORI could fund a potential shortfall through
other sources, including but not limited to, a debt issuance or
extraordinary dividends from its insurance subsidiaries. However,
the agency views an issuance concurrent with a potential
acceleration as having increased credit market risk.
Additionally, extraordinary dividends would require regulatory
approval.
Fitch believes that ORI's holding company ratings are subject to
above-average ratings migration over the near to intermediate
term. Such migration could include sudden, multi-notch downgrade
risk, as well as the potential for a multi-notch upgrade.
The most noteworthy multi-notch downgrade risk, as reflected in
the ongoing Rating Watch Negative, would be acceleration of ORI's
debt obligations without sufficient liquidity to meet them. This
would result in a default, and a sharp downgrade in ORI's holding
company ratings.
Upward movement in ORI's rating is highly likely if management was
able to fully mitigate its covenant/acceleration risk by
renegotiating its covenants or refinancing its debt. Fitch could
also remove the Watch Negative if the Order of Supervision is
extended for a prolonged period of time.
Fitch maintained its Rating Watch Negative on the following
ratings:
Old Republic International Corp.
-- IDR 'BB';
-- $550 million 3.75% senior notes due March 15, 2018 'BB-'.
Bituminous Casualty Corp.
Bituminous Fire & Marine Insurance Co.
Great West Casualty Co.
Old Republic Insurance Co.
Old Republic Lloyds of Texas
Old Republic General Insurance Co.
Old Republic Surety Co.
Manufacturers Alliance Insurance Co.
Pennsylvania Manufacturers' Association Insurance Co.
Pennsylvania Manufacturers Indemnity Co.
American Guaranty Title Insurance Co.
Mississippi Valley Title Insurance Co.
Old Republic National Title Insurance Co.
-- Insurer Financial Strength 'A-'.
OLYMPIC HOLDINGS: Proofs of Claim Due Tomorrow
----------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
established Nov. 7, 2012, as the last day for any individual or
entity to file proofs of claim against Olympic Holdings, LLC.
Beverly Hills, California-based Olympic Holdings, LLC, filed a
bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No.
12-32707) on June 29, 2012, in Los Angeles. The Debtor estimated
assets and liabilities at $10 million to $50 million. A related
entity, Wooton Group, LLC, earlier sought bankruptcy
protection (Case No. 12-31323) on June 19, 201
PATRIOT COAL: To Close Bluegrass Mine Complex by Yearend
--------------------------------------------------------
Patriot Coal Corporation announced the Bluegrass Mine Complex will
be closed by the end of 2012. The Bluegrass Complex currently
employs approximately 89 people and includes the Patriot Surface
Mine, which is expected to produce approximately 1.2 million tons
of thermal coal in 2012, and the Grand Eagle Preparation Plant,
both located near Henderson, Kentucky. Reclamation work will
continue as the site is restored to meet regulatory requirements.
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.
The Company's balance sheet at Sept. 30, 2012, showed
$3.87 billion in total assets, $3.88 billion in total liabilities
and a $8.75 million total stockholders' deficit.
PATRIOT COAL: Bridge Order Extending Exclusivity to Nov. 8 Issued
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has entered a bridge order extending Patriot Coal Corporation, et
al.'s exclusive periods to file and solicit acceptances of a plan
of reorganization through Nov. 8, 2012, at 2:00 p.m., pending a
hearing on the motion.
The hearing on the motion had been adjourned from Nov. 1, 2012, to
Nov. 8, 2012, at 2:00 p.m.
As reported in the TCR on Oct. 23, 2012, the Debtors asked the
Bankruptcy Court to extend the Debtors' exclusive periods within
which to file and solicit acceptances of a plan or reorganization
by 180 days, from Nov. 6, 2012, and Jan. 5, 2013, respectively, to
May 5, 2013, and July 4, 2013, respectively, citing, among others,
the existence of certain unresolved contingencies, the resolution
of which will affect the Debtors' ability to propose a confirmable
plan of reorganization.
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: Sierra Liquidity Buys Claims
------------------------------------------
Notices of transfers of claims were made last week in the Chapter
11 cases of Patriot Coal Corporation, et al., to wit:
A. Debtor Remington LLC
Transferee Sierra Liquidity Fund, LLC
Transferor Johnson Industries, Inc.
Amount Transferred $3,556.89
Claim # Not Disclosed
Transfer Date Oct. 8, 2012
Docket Entry 1504 (Oct. 31, 2012)
B. Debtor Hobet Mining, LLC
Transferee Sierra Liquidity Fund, LLC
Transferor Heritage International Trucks, Inc.
Amount Transferred $727.76
Claim # Not Disclosed
Transfer Date Sept. 24, 2012
Docket Entry 1507 (Nov. 1, 2012)
B. Debtor Panther LLC
Transferee Sierra Liquidity Fund, LLC
Transferor Johnson Industries, Inc.
Amount Transferred $1,913.98
Claim # Not Disclosed
Transfer Date Oct. 8, 2012
Docket Entry 1509 (Nov. 1, 2012)
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.
PEAK RESORTS: Gets More Time to Develop Chapter 11 Plan
-------------------------------------------------------
Patrick Fitzgerald at Dow Jones' DBR Small Cap reports that Greek
Peak Mountain Resort, the upstate New York ski area that's being
propped up in bankruptcy court by the Federal Deposit Insurance
Corp, says it needs more time to develop a plan to exit Chapter
11.
About Peak Resorts
Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four
affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case
Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on
Aug. 1, 2012. The affiliates are Hope Lake Investors LLC,
V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc.
Peak Resorts owns 888.5 acres of real estate, including the "Greek
Peak Mountain Resort", a four-season resort development located in
Virgil, New York. The 888.5-acre property is located 8 miles from
Cortland, New York and has the largest day trip area in Central
New York state. REDI LLC owns 402.7 acres of adjacent property.
Hope Lake Investors owns the Hope Lake Lodge & Cascades Indoor
Water Park, a 151-room hotel and resort facility in Virgil,
Cortland County. The Debtors have a total of 264 employees.
Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the
case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel.
The Debtors scheduled these assets and debts:
Scheduled Assets Scheduled Liabilities
---------------- ---------------------
Hope Lake $27,180,635 $48,800,528
Peak Resorts $12,991,230 $26,558,438
REDI, LLC $1,298,401 $3,851,808
The petitions were signed by Allen R. Kryger, president.
PEMCO WORLD: Sets Nov. 13 Plan Disclosures Hearing
--------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that WAS Services Inc., known as Pemco World Air Services
Inc. before selling the business to secured lender Sun Capital
Partners Inc., has a Nov. 13 hearing for approval of disclosure
materials telling unsecured creditors they stand to recover not
more than 3% on claims that could total $72 million.
According to the report, while the liquidating Chapter 11 plan
moves forward, WAS filed papers last week for a second extension
of the exclusive right to propose a plan. If approved by the U.S.
Bankruptcy Court in Delaware at a Dec. 12 hearing, the plan-filing
deadline will be pushed out about two months to Jan. 4.
The report relates that the liquidating plan implements a
settlement between Sun Capital and unsecured creditors. There is
only about $700,000 in secured claims remaining, according to the
disclosure statement.
About Pemco World
Headquartered in Tampa, Florida Pemco World Air Services --
http://www.pemcoair.com/-- performs large jet MRO services, and
has operations in Dothan, AL (military MRO and commercial
modification), Cincinnati/Northern Kentucky (regional aircraft
MRO), and partner operations in Asia.
Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case
No. 12-10799) on March 5, 2012. Young Conaway Stargatt & Taylor,
LLP has been tapped as general bankruptcy counsel; Kirkland &
Ellis LLP as special counsel for tax and employee benefits issues;
AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as
investment banker; and Epiq Bankruptcy Solutions LLC as notice and
claims agent.
On March 14, 2012, the U.S. Trustee appointed an official
committee of unsecured creditors.
On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case
No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun
Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS
Aviation Services Holding Corp., which in turn owns 100% of the
stock of debtor WAS Aviation Services Inc., which itself owns 100%
of the stock of Pemco World Air Services Inc. Pemco also owes Sun
Aviation $5.6 million. As a result, Sun Aviation is seeking
separate counsel. However, Sun Aviation obtained an order jointly
administering its case with those of the Pemco debtors.
On June 15 the bankruptcy court approved sale of Pemco's business
for $41.9 million cash to an affiliate of VT Systems Inc. from
Alexandria, Virginia. Boca Raton, Florida-based Sun Capital was
under contract to make the first bid at auction for the provider
of heavy maintenance and repair services for commercial jet
aircraft.
The Debtor's plan proposes to repay unsecured creditors between 1%
and 3% on their claims after selling its assets earlier this year
to a unit of Sun Capital Partners.
PERFORMA ENTERTAINMENT: Ruling Clears Way to Transfer Beale Street
-----------------------------------------------------------------
A federal bankruptcy judge has ruled that John Elkington's
Performa Entertainment Real Estate, Inc. (Performa) was in
compliance with the terms of its lease agreement with Beale Street
Development Corporation (BSDC) and that there was no proof of any
default by Performa in payments owed to BSDC. This ruling clears
the way for Elkington to transfer his Beale Street Entertainment
District lease to the City of Memphis.
"I'm pleased with the judge's decision," said Elkington, who
Memphis Magazine credited with the Beale Street revival that
turned abandoned buildings into one of the most visited
attractions in Tennessee. "It allows us to move forward with the
lease transfer agreement that has been in place with the city for
more than two years."
Elkington chose to take a successful Performa into bankruptcy
because he felt that the Federal Bankruptcy Court was best
equipped to handle the complex financial litigation involved in
the firm's dispute with BSDC. In a series of transactions dating
to 1982, Performa's predecessor company leased the entertainment
district from BSDC, which had leased the entity from its owner,
the City of Memphis. The Performa lease was for a period of 50
years, and contingent on Performa investing substantial capital
into the street's real estate and infrastructure and meeting a
series of performance milestones.
Merchants involved in the early days of Beale Street redevelopment
were positive about the entertainment district's future in the
wake of the court's decision, and acknowledged the key role
Elkington played in the destination's success.
"If it hadn't been for John Elkington's drive and determination,
Beale Street wouldn't be the success it is today," Beale Street
redevelopment pioneer Sandy Robertson of Alfred's said. "I wish
him success as he moves on after 30 years, and look forward to
working with the city. I'm confident the merchants on Beale
Street and the city will, together, make Beale Street an even
better entertainment district."
"The Judge made the right decision. Over the past three decades
John, his Performa team, and the merchants worked hard to create a
successful national attraction and a great place for Memphians,"
said Preston Lamm, founder and president of River City Management,
which owns and operates Rum Boogie among other Beale Street clubs,
and a pivotal figure in the redevelopment of Beale Street. "We are
pleased with an end to this uncertainty. Merchants on Beale
Street can now move forward with marketing and promotions programs
that were delayed due to this uncertainty."
Beale Street carries on a Memphis music tradition that includes
Beale Street legends such as W.C. Handy, B.B. King, Bobby "Blue"
Bland, and Furry Lewis as well as renowned Memphis entertainers
such as Elvis Presley, Otis Redding, Jerry Lee Lewis, Isaac Hayes,
Booker T. Jones, and Justin Timberlake.
Performa Entertainment -- http://www.performaentertainment.com/--
is a developer and consultant for urban retail/entertainment
districts. Performa filed Chapter 11 bankruptcy (Bankr. W.D.
Tenn. Case No. 10-____) in the summer of 2010 in the midst of the
court battle with the city of Memphis, Tenn.
PICCADILLY RESTAURANTS: Final Hearing on DIP Financing Today
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Louisiana
has granted the motion of Piccadilly Restaurants, LLC, et al., to
continue the final hearing on its emergency motion for
authorization to: (i) obtain postpetition financing and (ii) use
cash collateral to Nov. 6, 2012, at 10:00 a.m. The hearing was
originally scheduled for Oct. 23, 2012, at 10:00 a.m.
As reported in the TCR on Oct. 22, 2012, the Bankruptcy Court
granted the Debtors interim authority to obtain postpetition
financing in the initial amount $500,000 from Atalaya Special
Opportunities Fund IV LP (Tranche B), and other DIP Lenders,
secured by superpriority priming liens on and security interests
in all of the assets of the Debtors, pursuant to the stipulation
by and among the Debtors, Atalaya Administrative LLC, as DIP
agent, and the DIP Lenders.
A hearing to consider final and permanent approval of the motion
for up to $3,000,000 in DIP Loans will be held before the
Bankruptcy Court on Oct. 23, 2012, at 10:00 a.m.
About Piccadilly Restaurants
Piccadilly Restaurants, LLC, and two affiliated entities sought
Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos.
12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are
Piccadilly Food Service, LLC, and Piccadilly Investments LLC.
Piccadilly Restaurants, LLC, headquartered in Baton Rouge,
Louisiana, is the largest cafeteria-style restaurant in the United
States, with operations in 10 states in the Southeast and Mid-
Atlantic regions. It is wholly owned by Piccadilly Investments,
LLC. Piccadilly operates an institutional foodservice division
through a wholly owned subsidiary, Piccadilly Food Service, LLC,
servicing schools and other organizations. With a history dating
back to 1944, the Company operates 81 restaurants at three owned
and 78 leased locations.
Then known as Piccadilly Cafeterias, Inc., the Company filed for
Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29,
2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at
Berger Singerman, P.A. represented the Debtor in the case. After
Piccadilly declared bankruptcy under Chapter 11, but before its
plan was submitted to the Bankruptcy Court for the Southern
District of Florida, the Bankruptcy Court authorized Piccadilly to
sell its assets to Yucaipa Cos., for about $80 million. In
October 2004, the Bankruptcy Court confirmed the plan.
In the 2012 petition, Piccadilly Restaurants estimated under
$50 million in total assets and liabilities. Judge Robert
Summerhays oversees the 2012 cases. Lawyers at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans,
serve as the 2012 Debtors' counsel.
New York-based vulture fund Atalaya Administrative LLC, in its
capacity as administrative agent for Atalaya Funding II, LP,
Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya
Special Opportunities Fund (Cayman) IV LP (Tranche B), the
Debtors' prepetition secured lender, is represented in the case
by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman &
Areaux, L.L.C.; and Patton Boggs, LLP.
PMI GROUP: Reaches Settlement in Principle with PMI Mortgage
------------------------------------------------------------
The PMI Group, Inc., informed the United States Bankruptcy Court
for the District of Delaware, that it and the Official Committee
of Unsecured Creditors in TPG's Chapter 11 bankruptcy case have
reached a settlement in principle with TPG's subsidiary PMI
Mortgage Insurance Co. and the receiver for MIC, with respect to
certain economic issues that were in dispute among the Parties.
The settlement remains subject to completion of definitive
documentation.
The general terms of the settlement are as follows:
1. With respect to the approximately $2.2 billion in net
operating loss carryforwards at issue among the Parties, MIC
will pay TPG $20 million for the exclusive use of $1 billion
of such net operating loss carryforwards and TPG will have
the use of the remaining $1.2 billion of net operating loss
carryforwards. MIC and TPG will remain consolidated in the
tax group. MIC will have the right to direct the use of its
$1 billion in net operating losses. MIC will also have the
right to direct the use of any net operating losses
subsequently generated by MIC. TPG and MIC will amend the
tax sharing agreement and any other necessary documentation
or filings among them to reflect this consensual
arrangement.
2. TPG is in the process of voluntarily terminating its pension
plan. It is expected that the underfunding of this plan
upon termination would require a payment to the plan of
approximately $15 million to $20 million. TPG will pay the
administrative fees and costs associated with continuing the
standard termination and MIC will pay the funding shortfall.
3. TPG has three reinsurance subsidiaries to which MIC and
certain of its subsidiaries have ceded risk on mortgage
pools or mortgages. These reinsurance subsidiaries
currently have approximately $82 million in cash. Under the
proposed settlement, all of the risk at the reinsurance
subsidiaries will be commuted for a payment to MIC of the
cash in the reinsurance subsidiaries other than $32 million,
which will remain for TPG's benefit. Following completion
of the settlement, TPG's reinsurance subsidiaries will no
longer reinsure MIC or its subsidiaries.
4. Both TPG and MIC have asserted an entitlement to the
distribution on an allowed claim in the liquidation of
Reliance Insurance Company in an approximate amount of $1.88
million. The Parties agreed that TPG will release its
asserted claim to the distribution and MIC will own any
right to that distribution.
5. In connection with the sale in 2008 by MIC of its Australian
operations to QBE Insurance Group Limited, both TPG and MIC
have asserted an entitlement to a potential claim against
QBE in the approximate amount of $2.5 million under the sale
agreement with QBE. The Parties agreed that MIC will
release its asserted claim to any recovery from QBE with
respect to that matter.
6. The Parties will agree to a mutual waiver and release of any
and all other claims, including the claims that MIC has
filed against the TPG estate with the Bankruptcy Court.
7. In addition, the Parties may include in the settlement other
items, if they can reach agreement on them.
8. The settlement is subject to approval by the Bankruptcy
Court and the Superior Court of the State of Arizona in and
for the County of Maricopa, in which MIC's rehabilitation
proceeding is pending.
There can be no assurance that the Parties will reach agreement on
the definitive documents necessary to complete the settlement or
will receive the approvals of the Bankruptcy Court and the Arizona
Court that are necessary to effectuate the settlement.
About The PMI Group
Del.-based The PMI Group, Inc., is an insurance holding company
whose stock had, until Oct. 21, 2011, been publicly-traded on the
New York Stock Exchange. Through its principal regulated
subsidiary, PMI Mortgage Insurance Co., and its affiliated
companies, the Debtor provides residential mortgage insurance in
the United States.
The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case
No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor
disclosed $167,963,354 in assets and $770,362,195 in liabilities.
Stephen Smith signed the petition as chairman, chief executive
officer, president and chief operating officer.
The Debtor said in the filing that it does not have the financial
resources to pay the outstanding principal amount of the 4.50%
Convertible Senior Notes, 6.000% Senior Notes and the 6.625%
Senior Notes if those amounts were to become due and payable.
The Debtor is represented by James L. Patton, Esq., Pauline K.
Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq.,
at Young Conaway Stargatt & Taylor LLP.
The Official Committee of Unsecured Creditors appointed in the
case retained Morrison & Foerster LLP and Womble Carlyle Sandridge
& Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company
serves as the Committee's financial advisor.
POSITRON CORP: CEO and CFO Invest $1.6 Million
----------------------------------------------
Positron Corporation announced that its Chief Executive Officer,
Patrick Rooney and Chief Financial Officer, Corey Conn, have
recently invested $1,600,000 in Positron through convertible
debentures. These cash investments were made from their own funds
and earned independent of their positions or compensation with the
Company.
"This capital combined with current and future revenues will be
utilized to further advance our integrated end-to-end solution for
the nuclear cardiology industry," stated, Patrick Rooney. "We are
confident in Positron's business model and long-term prospects and
we will continue to build and support Positron as it evolves into
a dynamic nuclear medicine healthcare company. We are pleased in
Positron's achievements to date and are optimistic of its future
success."
About Positron Corporation
Headquartered in Fishers, Indiana, Positron Corporation is a
molecular imaging company focused on nuclear cardiology.
The Company reported a net loss of $6.12 million in 2011, compared
with a net loss of $10.92 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$3.64 million in total assets, $7.20 million in total liabilities
and a $3.56 million total stockholders' deficit.
Sassetti LLC, in Oak Park, Illinois, noted that the Company has a
significant accumulated deficit which raises substantial doubt
about the Company's ability to continue as a going concern.
Bankruptcy Warning
The Company had cash and cash equivalents of $1,000 at Dec. 31,
2011. The Company received $2.10 million in proceeds from
convertible notes and $845,000 in proceeds from the exercise of
warrants during 2011. The Company believes that it may continue
to experience operating losses and accumulate deficits in the
foreseeable future. If the Company is unable to obtain financing
to meet its cash needs the Company may have to severely limit or
cease its business activities or may seek protection from its
creditors under the bankruptcy laws.
PRESSURE BIOSCIENCES: VP of Finance and Administration Quits
------------------------------------------------------------
Joseph Damasio informed Pressure Biosciences, Inc., that he would
be resigning from his position of Vice President of Finance and
Administration, to pursue other opportunities, effective
Nov. 16, 2012. After Nov. 16, 2012, Mr. Damasio will provide
transition services to the Company to the extent that they do not
interfere with his then-current employment.
About Pressure Biosciences
Pressure BioSciences, Inc., headquartered in South Easton,
Massachusetts, holds 14 United States and 10 foreign patents
covering multiple applications of pressure cycling technology in
the life sciences field.
As reported in the TCR on March 2, 2012, Marcum LLP, in Boston,
Massachusetts, expressed substantial doubt about Pressure
Biosciences' 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 had recurring net
losses and continues to experience negative cash flows from
operations.
The Company's balance sheet at June 30, 2012, showed $1.79 million
in total assets, $2.60 million in total liabilities and a $811,955
total stockholders' deficit.
QUANTUM FUEL: Common Stock Transferred to NASDAQ Capital
--------------------------------------------------------
Quantum Fuel Systems Technologies Worldwide, Inc., announced that
The NASDAQ Stock Market has approved the Company's application to
transfer its stock listing from The NASDAQ Global Market to The
NASDAQ Capital Market, effective with the opening of the market on
Nov. 2, 2012. The Company's common stock will continue to trade
under the symbol "QTWW." The NASDAQ Capital Market is a
continuous trading market that operates in the same manner as The
NASDAQ Global Market. Companies listed on The NASDAQ Capital
Market must meet certain initial and continued listing
requirements and adhere to NASDAQ's corporate governance
standards.
In connection with the transfer to The NASDAQ Capital Market, the
Company was afforded 180 days, or until April 29, 2013, to regain
compliance with the NASDAQ's $1.00 minimum bid price requirement
for continued listing. Except for the Bid Price Requirement, the
Company currently meets all of the listing requirements and
governance standards for The NASDAQ Capital Market.
The Company intends to monitor the closing bid price of its common
stock, and will consider available options if its common stock
does not trade at a price likely to result in the Company
regaining compliance with the Bid Price Requirement.
About Quantum Fuel
Based in Irvine, California, Quantum Fuel Systems Technologies
Worldwide, Inc., is a fully integrated alternative energy company
and considers itself a leader in the development and production of
advanced clean propulsion systems and renewable energy generation
systems and services.
Quantum Fuel reported a net loss attributable to stockholders of
$38.49 million on $24.47 million of total revenue for the eight
months ended Dec. 31, 2011, compared with a net loss attributable
to stockholders of $6.52 million on $10.51 million of total
revenue for the same period a year ago. The Company reported a
net loss of $11.03 million for the year ended April 30, 2011,
following a net loss of $46.29 million during the prior year.
Haskell & White LLP, the Company's independent registered public
accounting firm for the Transition Period ended Dec. 31, 2011, has
included an explanatory paragraph in their opinion that
accompanies the Company's audited consolidated financial
statements as of and for the eight months ended Dec. 31, 2011,
indicating that the Company's current liquidity position raises
substantial doubt about its ability to continue as a going
concern. If the Company is unable to further improve its
liquidity position, the Company may not be able to continue as a
going concern.
Quantum Fuel's balance sheet at June 30, 2012, showed $73.42
million in total assets, $45.46 million in total liabilities and
$27.95 million in ttoal stockholders' equity.
RAHA LAKES: Court Sets Nov. 20 Hearing on Cash Collateral
---------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted Raha Lakes Enterprises, LLC, and Mehr in Los Angeles, LLC,
authorization to use cash collateral on an interim basis pending a
final hearing.
As additional adequate protection of its interest in the cash
collateral, San Pedro Investment, LLC, is granted a replacement
lien upon all post petition assets of the Debtor's estate (except
any "avoidance actions" arising under Sections 544, 545, 546, 547,
548, 549, 550 or any similar provisions of the Bankruptcy Code) to
the same extent, validity and priority as San Pedro's liens upon
the Debtor's prepetition assets.
The final hearing on the Debtors' use of cash collateral will be
on Nov. 20, 2012, at 10:00 a.m.
As reported in the TCR on Oct. 16, 2012, the Debtors seek the
Court's permission to use rental income derived from their real
property to pay for expenses during the pendency of their Chapter
11 cases.
The property is located at 900 South San Pedro Street, Los
Angeles, and is at the South-East corner of 9th Street and San
Pedro Street, in the Garment District in Downtown Los Angeles.
The property, which covers two thirds of a city block, consists of
roughly 58,352 square feet of land and 36,833 square feet of
building and fronts three streets, namely, 9th Street, San Pedro
Street and 9th Place. The property's gross annual income is
roughly $540,000 and its net operating income is roughly $350,000.
At the time of acquisition the appraised value of the property was
roughly $32.7 million and the purchase price was $9.8 million.
The Debtors have one secured creditor that assert liens upon the
Debtors' cash collateral: a first and second lien to San Pedro
Investment, LLC, as assignee of Wilshire State Bank, who is owed
$8,737,301 and has a security interest in virtually all of the
Debtors' assets.
The Debtors said San Pedro is adequately protected by their equity
cushion in the property. The Debtors have filed a budget showing
the property will generate net income of roughly $23,000 in
October 2012 through Dec. 31, 2012.
About Raha Lakes
and Mehr in Los Angeles
Raha Lakes Enterprises, LLC, filed a Chapter 11 petition (Bankr.
C.D. Calif. Case No. 12-43422) on Oct. 3, 2012, in Los Angeles.
Raha Lakes, a single-asset real estate company, estimated assets
of at least $10 million and debt of at least $1 million. The
company's principal asset is at 900 South San Pedro Street in Los
Angeles. Raha Lakes listed $10 million to $50 million in assets,
and $1 million to $10 million in debts. The petition was signed
by Kayhan Shakib, managing member.
Mehr in Los Angeles Enterprises, LLC, filed a bare-bones Chapter
11 petition (Bankr. C.D. Calif. Case No. 12-43589) on Oct. 4,
2012, estimating assets of at least $10 million and liabilities of
at least $1 million. The petition was signed by Yadollah Shakib,
managing member.
Judge Ernest M. Robles presides over the cases. The Debtors are
represented by Michael S. Kogan, Esq., at Kogan Law Firm APC.
John Choi, Esq., at Kim Park Choi, in Los Angeles, represents
secured creditor San Pedro Investment, LLC, as counsel.
REAL ESTATE ASSOCIATES: Has No Remaining Investment in Aristocrat
-----------------------------------------------------------------
Real Estate Associates Limited VII, a California limited
partnership, holds a 99.9% general partner interest in Real Estate
Associates IV, which, in turn, holds a 99% limited partnership
interest in Aristocrat Manor Ltd., an Arkansas limited
partnership. Aristocrat owns a 101-unit apartment complex located
in Hot Springs, Arkansas. REA IV entered into a Fourth Amendment
to Amended and Restated Agreement and Certificate of Limited
Partnership, which was effective Oct. 29, 2012, with Marshall
Barclay Coffman, George S. Mackey and Coffman Holdings, LLC, an
Arkansas limited liability company, relating to the transfer of
the limited partnership interest held by REA IV in Aristocrat for
a total price of $5,000 and the assumption by the Assignee of REA
IV's non-recourse note payable by the Assignee. The Company's
investment balance in Aristocrat was zero at June 30, 2012.
About Real Estate Associates
Real Estate Associates Limited VII is a limited partnership which
was formed under the laws of the State of California on May 24,
1983. On February 1, 1984, the Partnership offered 2,600 units
consisting of 5,200 limited partnership interests and warrants to
purchase a maximum of 10,400 additional limited partnership
interests through a public offering managed by E.F. Hutton Inc.
The Partnership received $39,000,000 in subscriptions for units of
limited partnership interests (at $5,000 per unit) during the
period from March 7, 1984 to June 11, 1985.
The Partnership will be dissolved only upon the expiration of 50
complete calendar years -- December 31, 2033 -- from the date of
the formation of the Partnership or the occurrence of various
other events as specified in the Partnership agreement. The
principal business of the Partnership is to invest, directly or
indirectly, in other limited partnerships which own or lease and
operate Federal, state and local government-assisted housing
projects.
The general partners of the Partnership are National Partnership
Investments Corp., a California Corporation, and National
Partnership Investments Associates II. The business of the
Partnership is conducted primarily by NAPICO, a subsidiary of
Apartment Investment and Management Company, a publicly traded
real estate investment trust.
The Partnership holds limited partnership interests in 11 local
limited partnerships as of both March 31, 2010, and December 31,
2009. The Partnership also holds a general partner interest in
Real Estate Associates IV, which, in turn, holds limited
partnership interests in nine additional Local Limited
Partnerships; therefore, the Partnership holds interests, either
directly or indirectly through REA IV, in twenty (20) Local
Limited Partnerships. The general partner of REA IV is NAPICO.
The Local Limited Partnerships own residential low income rental
projects consisting of 1,387 apartment units at both March 31,
2010, and December 31, 2009. The mortgage loans of these projects
are payable to or insured by various governmental agencies.
The Partnership reported a net loss of $861,000 on $0 of revenue
in 2011, compared with net income of $171,000 on $0 of revenue in
2010.
The Company's balance sheet at June 30, 2012, showed $1.16 million
in total assets, $15.81 million in total liabilities and a $14.64
million total partners' deficit.
Going Concern
The Partnership continues to generate recurring operating losses.
In addition, the Partnership is in default on notes payable and
related accrued interest payable that matured between December
1999 and January 2012.
Four of the Partnership's five remaining investments involved
purchases of partnership interests from partners who subsequently
withdrew from the operating partnership. As of June 30, 2012, and
Dec. 31, 2011, the Partnership is obligated for non-recourse notes
payable of approximately $4,463,000 and $6,070,000, respectively,
to the sellers of the partnership interests, bearing interest at
9.5 to 10 percent. Total outstanding accrued interest is
approximately $11,323,000 and $15,215,000 at June 30, 2012, and
Dec. 31, 2011, respectively. These obligations and the related
interest are collateralized by the Partnership's investment in the
local limited partnerships and are payable only out of cash
distributions from the Local Limited Partnerships. Unpaid
interest was due at maturity of the notes. All of the notes
payable have matured and remain unpaid at June 30, 2012.
No payments were made on the notes payable during the six months
ended June 30, 2012 or 2011. As a result, there is substantial
doubt about the Partnership's ability to continue as a going
concern.
After auditing the 2011 results, Ernst & Young LLP, in
Greenville, South Carolina, expressed substantial doubt about the
Partnership's ability to continue as a going concern. The
independent auditors noted that the Partnership continues to
generate recurring operating losses. In addition, notes payable
and related accrued interest totalling $16.2 million are in
default due to non-payment.
REAL ESTATE ASSOCIATES: Reports $2.4MM Net Income in 3rd Quarter
----------------------------------------------------------------
Real Estate Associates Limited VII reported net income of
$2.4 million on $nil revenue for the three months ended Sept. 30,
2012, compared with a net loss of $228,000 on $nil revenue for the
same period last year.
For the nine months ended Sept. 30, 2012, the Company reported net
income of $7.9 million on $nil revenue, compared with a net loss
of $645,000 on $nil revenue for the corresponding period of 2011.
The Partnership continues to generate recurring operating losses.
In addition, the Partnership is in default on notes payable and
related accrued interest payable that matured between
December 1999 and January 2012.
Three of the Partnership's four remaining investments involved
purchases of partnership interests from partners who subsequently
withdrew from the operating partnership. As of Sept. 30, 2012,
and Dec. 31, 2011, the Partnership is obligated for non-recourse
notes payable of approximately $3,741,000 and $6,070,000,
respectively, to the sellers of the partnership interests, bearing
interest at 9.5 to 10 percent. Total outstanding accrued interest
is approximately $9,524,000 and $15,215,000 at Sept. 30, 2012, and
Dec. 31, 2011, respectively. These obligations and the related
interest are collateralized by the Partnership's investment in the
local limited partnerships and are payable only out of cash
distributions from the Local Limited Partnerships, as defined in
the notes. Unpaid interest was due at maturity of the notes. All
of the notes payable have matured and remain unpaid at Sept. 30,
2012.
No payments were made on the notes payable during the nine months
ended Sept. 30, 2012, or 2011. The holder of the non-recourse
notes payable collateralized by the Partnership's investment in
five Local Limited Partnerships purchased the projects owned by
these Local Limited Partnerships, which resulted in the
extinguishment of notes payable of approximately $2,329,000 and
accrued interest of approximately $6,036,000 during the nine
months ended Sept. 30, 2012. These ($8,365,000) are recorded in
the consolidated statement of operations for the nine months ended
Sept. 30, 2012, as "gain on extinguishment of debt."
The Company's balance sheet at Sept. 30, 2012, showed $1.1 million
in total assets, $13.3 million in total liabilities, and a total
partners' deficit of $12.2 million.
A copy of the Form 10-Q is available at http://is.gd/ueKzWG
Real Estate Associates Limited VII is a limited partnership which
was formed under the laws of the State of California on May 24,
1983.
As of Sept. 30, 2012, and Dec. 31, 2011, the Partnership holds
limited partnership interests in 1 and 11 Local Limited
Partnerships, respectively, and a general partner interest in Real
Estate Associates IV which, in turn, holds limited partnership
interests in 3 and 8 additional Local Limited Partnerships,
respectively; therefore, the Partnership holds interests, either
directly or indirectly through REA IV, in 4 and 19 Local Limited
Partnerships, respectively. The other general partner of REA IV
is NAPICO. The Local Limited Partnerships own residential low
income rental projects consisting of 403 and 1,237 apartment units
at Sept. 30, 2012, and Dec. 31, 2011, respectively. The mortgage
loans of these projects are payable to or insured by various
governmental agencies.
RESOLUTE FOREST: Moody's Raises Corp. Family Rating to 'Ba3'
------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating
(CFR) and the senior secured note rating of Resolute Forest
Products (RFP) to Ba3 from B1. The company's speculative liquidity
rating was affirmed at SGL-1 and the rating outlook is stable. The
upgrade reflects the company's strong interest coverage and debt
leverage measures since exiting bankruptcy about 2 years ago.
Moody's expects the company will be able to maintain retained
cashflow to adjusted debt (including standard adjustments for
unfunded pension plans and operating leases) above 18% over the
next several years.
Issuer: Resolute Forest Products Inc. ,
Upgrades:
Probability of Default Rating, Upgraded to Ba3 from B1
Corporate Family Rating, Upgraded to Ba3 from B1
Senior Secured Regular Bond/Debenture, Upgraded to Ba3 from
B1
Senior Secured Regular Bond/Debenture, to LGD3, 42% from
LGD3, 37%
Ratings Rationale
RFP's Ba3 CFR reflects the company's product diversity, market
position, and relatively strong financial metrics. The rating is
supported by the company's strong liquidity position and the
favorable cost position for most of the products that the company
manufactures. The rating is tempered by the secular decline of
newsprint, specialty and coated papers, which represents more than
60% of the company's revenue, offset by the growing importance of
market pulp and the burgeoning recovery of wood products as the US
housing market strengthens. Other challenges include the
expectation of continued acquisitions to shift the company's
product mix away from paper along with the complexity of shifting
existing paper production to more stable grades.
RFP has a strong liquidity position (SGL-1). The company has $256
million of cash (as of September 30, 2012 net of October 2012
redemption of $85 million of senior secured notes at 103), and
$529 million of availability under a $600 million asset based
revolving credit facility that matures in October 2016. With
higher than normal near term capital expenditures, Moody's
estimates break-even free cash flow generation over the next four
quarters with no debt maturities until 2018. A minimum fixed
charge covenant ratio is the only financial requirement under the
revolving credit facility and is triggered when availability under
the facility falls below 12.5% of facility size. Most of the
company's assets are encumbered.
RFP's stable outlook reflects Moody's mid-term expectation that
the newsprint and mechanical paper sector will continue to
rationalize its supply base to offset declining demand and
maintain current pricing. It also reflects Moody's expectations
that the company will be able to offset declining demand in its
paper business through modest acquisitions or through an
improvement in the company's wood product business. An upgrade may
be warranted if the company is able to further shift its product
focus away from declining paper grades and if normalized adjusted
debt to EBITDA approaches 3x on through the business cycle, while
maintaining good liquidity. RFP's ratings could face downward
ratings pressure if an acceleration in secular paper decline
impairs the company's liquidity position or if normalized adjusted
Debt to EBITDA exceeds 4.5x.
The principal methodology used in rating RFP was the Global Paper
and Forest Products Industry Methodology published in September
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 Montreal (Quebec, Canada), RFP produces various
grades of newsprint, commercial printing papers, market pulp and
wood products. Net sales for the last twelve months ending
September 2012 were $4.5 billion.
RG STEEL: Selling Beech Bottom Assets to State Route for $4.4-Mil.
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WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for
the District of Delaware to authorize and approve the sale of RG
Steel Wheeling LLC's Beech Bottom assets to State Route 2, LLC,
for the purchase price of $4,400,000, free and clear of all liens
and encumbrances. In papers filed with the Court, the Debtors
relate that they have wound down their operations and have
discontinued steelmaking operations, thus they have no further use
for the Purchased Assets.
The Purchased Assets consist of, among other things, all of the
Seller's right, title and interest in approximately 617 acres of
land, located in Wellburg, West Virginia, at the facility known as
the Beech Bottom Plant, related buildings, structures and
improvements and appurtenances (but excluding mineral interests),
various equipment and other personal property. The Purchased
Assets are currently subject to liens granted in favor of the
agents and lenders under the Debtors' prepetition and postpetition
senior and junior secured credit facilities, as well as Renco, the
Debtors' prepetition third lien secured lender.
State Route is not assuming any Liabilities of Seller or the
Facility arising prior to the Closing.
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owns Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-
11661) on May 31, 2012, to pursue a sale of the business. The
bankruptcy was precipitated by liquidity shortfall and a dispute
with Mountain State Carbon, LLC, and a Severstal affiliate, that
restricted the shipment of coke used in the steel production
process.
The Debtors estimated assets and debts in excess of $1 billion as
of the Chapter 11 filing. The Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors.
Conway MacKenzie, Inc., serves as the Debtors' financial advisor
and The Seaport Group serves as lead investment banker. Donald
MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson
Consultants LLC is the claims and notice agent.
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
An official committee of unsecured creditors has been appointed in
the case. Kramer Levin Naftalis & Frankel LLP represents the
Committee. Huron Consulting Services LLC serves as its financial
advisor.
The Debtor has sold off the principal plants. The sale of the
Wheeling Corrugating division to Nucor Corp. brought in $7
million. That plant in Sparrows Point, Maryland, fetched the
highest price, $72.5 million.
RG STEEL: Notice of Transfer of Claim Entered Nov. 2
----------------------------------------------------
The following notice of transfer of claim was entered into the
Court's docket on Nov. 2, 2012, in the Chapter 11 cases of WP
Steel Venture LLC, at al.
Debtor RG Steel LLC
Transferee Euler Hermes North America
Transferor CCMA, LLC
Amount Transferred $82,235.27
Claim # 000374535 (5035164)
Transfer Date Oct. 4, 2012
Docket Entry 1468 (Nov. 2, 2012)
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owns Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-
11661) on May 31, 2012, to pursue a sale of the business. The
bankruptcy was precipitated by liquidity shortfall and a dispute
with Mountain State Carbon, LLC, and a Severstal affiliate, that
restricted the shipment of coke used in the steel production
process.
The Debtors estimated assets and debts in excess of $1 billion as
of the Chapter 11 filing. The Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors.
Conway MacKenzie, Inc., serves as the Debtors' financial advisor
and The Seaport Group serves as lead investment banker. Donald
MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson
Consultants LLC is the claims and notice agent.
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
An official committee of unsecured creditors has been appointed in
the case. Kramer Levin Naftalis & Frankel LLP represents the
Committee. Huron Consulting Services LLC serves as its financial
advisor.
The Debtor has sold off the principal plants. The sale of the
Wheeling Corrugating division to Nucor Corp. brought in $7
million. That plant in Sparrows Point, Maryland, fetched the
highest price, $72.5 million.
RG STEEL: Terminates CBA With Truck Drivers Local No. 541
---------------------------------------------------------
WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for
the District of Delaware to authorize and approve the Section
1113/1114 Settlement and Modified Labor Agreement between RG
Steel, LLC, and the International Brotherhood of Teamsters, Truck
Drivers Local No. 541.
The Union represents approximately 18 individuals formerly
employed by Wheeling Corrugating Company, a division of Debtor RG
Steel Wheeling, LLC (the "Company"), pursuant to that certain
collective bargaining agreement effective May 1, 2010, between the
Company and the Union.
The Union and the Debtors have agreed that, pursuant to the
Settlement Agreement, the CBA will be terminated, upon Court
approval of the Settlement Agreement, as of Aug. 31, 2012. The
Settlement Agreement will apply to all retirees, surviving spouses
and dependents eligible to receive benefits under the CBA or any
retiree benefit program under the CBA.
To secure the prompt termination of the CBA, the Debtors have
agreed to deposit $32,000 into an escrow account to be used by the
Debtors to satisfy Union members' miscellaneous claims as directed
by the Teamsters, the majority of which are either postpetition
administrative claims, or entitled to priority as claims for
outstanding contributions to employee benefit plans under Section
507(a)(5) of the Bankruptcy Code.
About RG Steel
RG Steel LLC -- http://www.rg-steel.com/-- is the United States'
fourth-largest flat-rolled steel producer with annual steelmaking
capacity of 7.5 million tons. It was formed in March 2011
following the purchase of three steel facilities located in
Sparrows Point, Maryland; Wheeling, West Virginia and Warren,
Ohio, from entities related to Severstal US Holdings LLC. RG
Steel also owns finishing facilities in Yorkville and Martins
Ferry, Ohio. It also owns Wheeling Corrugating Company and has a
50% ownership in Mountain State Carbon and Ohio Coatings Company.
RG Steel along with affiliates, including WP Steel Venture LLC,
sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-
11661) on May 31, 2012, to pursue a sale of the business. The
bankruptcy was precipitated by liquidity shortfall and a dispute
with Mountain State Carbon, LLC, and a Severstal affiliate, that
restricted the shipment of coke used in the steel production
process.
The Debtors estimated assets and debts in excess of $1 billion as
of the Chapter 11 filing. The Debtors owe (i) $440 million,
including $16.9 million in outstanding letters of credit, to
senior lenders led by Wells Fargo Capital Finance, LLC, as
administrative agent, (ii) $218.7 million to junior lenders, led
by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million
on account of a subordinated promissory note issued by majority
owner The Renco Group, Inc., and (iv) $100 million on a secured
promissory note issued by Severstal.
Judge Kevin J. Carey presides over the case.
The Debtors are represented in the case by Robert J. Dehney, Esq.,
and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T.
Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the
Debtors.
Conway MacKenzie, Inc., serves as the Debtors' financial advisor
and The Seaport Group serves as lead investment banker. Donald
MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson
Consultants LLC is the claims and notice agent.
Wells Fargo Capital Finance LLC, as Administrative Agent, is
represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo,
Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura
Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang
Ziehi & Jones LLP.
Renco Group is represented by lawyers at Cadwalader, Wickersham &
Taft LLP.
An official committee of unsecured creditors has been appointed in
the case. Kramer Levin Naftalis & Frankel LLP represents the
Committee. Huron Consulting Services LLC serves as its financial
advisor.
The Debtor has sold off the principal plants. The sale of the
Wheeling Corrugating division to Nucor Corp. brought in $7
million. That plant in Sparrows Point, Maryland, fetched the
highest price, $72.5 million.
ROTHSTEIN ROSENFELDT: Dan Marino Foundation Free From Suit
----------------------------------------------------------
Dan Marino Foundation, founded in 1992 to aid children and young
adults with autism, won't be obliged to pay $259,000 to the
trustee liquidating the law firm once run by Scott
Rothstein, a confessed Ponzi-scheme operator.
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the the complaint, filed in April in U.S. Bankruptcy
Court in Fort Lauderdale, Florida, alleged that the foundation
received the payments in 2007 and 2008, before discovery of fraud.
U.S. Bankruptcy Judge Raymond B. Ray dismissed the suit in a 10-
page opinion filed Oct. 31.
The report relates that the foundation was created by Dan Marino,
a retired quarterback for the Miami Dolphins who was elected to
the professional football Hall of Fame in 2005. The payments fell
into several categories. Some were payments at charity auctions
or seats at fundraising dinners. Four payments of $25,000 each
were in satisfaction of a pledge.
Judge Ray, the report discloses, ruled that the $25,000 payments
were immune from suit because they were received in good faith by
the foundation in satisfaction of the pledge, a so-called bona
fide debt protected under Section 546(c) of the Bankruptcy Code.
The purchases at auction were an exchange for value and were
protected under Section 550 of the Bankruptcy Code because the
foundation was a subsequent recipient of fraudulently obtained
funds. Judge Ray said that the foundation was only required to
give value to Rothstein, not to the firm which was the original
source of the funds.
The South Florida Business Journal also reported that Judge Ray
dismissed a separate lawsuit that sought the return of $60,000
from HomeSafe, another nonprofit, which works to help child abuse
victims.
Dow Jones' Daily Bankruptcy Review reported that while trustee
Herbert Stettin, who filed the lawsuits, has struck a number of
settlements that have returned portions of payments back to the
law firm's creditors, the Marino lawsuit marks a rare failure for
Mr. Stettin, a former judge.
The lawsuit is Stettin v. Dan Marino Foundation (In re Rothstein
Rosenfeldt Adler PA), 12-01317, U.S. Bankruptcy Court, Southern
District of Florida (Fort Lauderdale).
About Rothstein Rosenfeldt
Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler
PA -- http://www.rra-law.com/-- has been suspected of running a
$1.2 billion Ponzi scheme. U.S. authorities claimed in a civil
forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the
firm's former chief executive officer, sold investments in non-
existent legal settlements. Mr. Rothstein pleaded guilty to five
counts of conspiracy and wire fraud on January 27, 2010.
Creditors of Rothstein Rosenfeldt Adler signed a petition sending
the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No.
09-34791). The petitioners include Bonnie Barnett, who says she
lost $500,000 in legal settlement investments; Aran Development,
Inc., which said it lost $345,000 in investments; and trade
creditor Universal Legal, identified as a recruitment firm, which
said it is owed $7,800. The creditors alleged being owed money
invested in lawsuit settlements.
Herbert M. Stettin, the state-court appointed receiver for
Rothstein Rosenfeldt, was officially carried over as the
Chapter 11 trustee in the involuntary bankruptcy case.
On June 10, 2010, Mr. Rothstein was sentenced to 50 years in
prison.
The official committee of unsecured creditors appointed in the
case filed a bankruptcy plan and disclosure statement on Aug. 17.
The plan was filed and signed by the Committee attorney, Michael
Goldberg of Akerman Senterfitt, and not by the court-appointed
trustee Herbert Stettin. The plan calls for the creation of a
liquidating trust and four classes of claimants. A date for
confirmation of the plan was left blank.
ROYAL CARIBBEAN: Moody's Rates $500MM Sr. Unsecured Notes 'Ba1'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Royal Caribbean
Ltd.'s proposed $500 million senior unsecured note offering and
affirmed the company's Ba1 Corporate Family Rating. Moody's also
assigned a (P)Ba1 and (P)Ba2 rating to the company's senior
unsecured and preferred debt shelf. The company's SGL-2 rating
remains unchanged.
The rating assignment and affirmation reflects the company's
ability to withstand industry pricing pressure in 2012, and
Moody's expectation of higher earnings and absolute debt reduction
in 2013. Moody's expects net revenue yields to increase up to 4%
in 2013 on higher capacity (delivered in 2012) which will drive
profitability, leverage and coverage metrics back toward historic
levels. For 2013, Moody's expects debt to EBITDA to drop to about
5.0 times from an expected 5.8 times at year-end 2012 while
EBITDA/interest is expected to improve to 2.3 times from 2.0
times.
Rating Rationale
RCL's Ba1 Corporate Family Rating reflects the company's scale-
RCL is the second largest global cruise operator based upon
capacity -- which has enabled the company in recent years to lower
its unit cost basis and improve operating margins. RCL is well
diversified by geography, brand, and market segment. The ratings
reflect Moody's expectation that RCL's profitability, leverage,
and coverage metrics will return toward historic levels in 2013.
In 2012, cruise industry pricing was negatively impacted by the
accident involving Carnival's Costa Concordia ship during the
industry's prime booking season. The ratings also reflect Moody's
expectation that in 2013, RCL will generate positive free cash
flow that will be deployed to reduce debt by as much as $500
million. Additionally, RCL's fleet has reached a level that will
generate sufficient cash flow to cover maintenance capital
spending, ship progress payments, dividends, and a majority of its
ship loan debt amortization. The ratings also take into
consideration refinancing risk associated with bond maturities in
2013 ($900 million) and 2014 ($960), leverage of approximately 5.8
times which is considered high for a Ba1 rated company per the
Lodging and Cruise Industry methodology, lower return on assets
compared to its closest competitors, and the capital intensive
nature of the cruise industry.
Ratings assigned:
Royal Caribbean Cruises Ltd.
Senior unsecured debt shelf at (P) Ba1
Preferred debt shelf at (P) Ba2
Proposed $500 million Senior unsecured bonds at Ba1
Ratings affirmed:
Senior unsecured notes at Ba1
The principal methodology used in rating Royal Caribbean was the
Global Lodging & Cruise Industry Rating Methodology published in
December 2010. Other methodologies used include Loss Given Default
for Speculative-Grade Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Royal Caribbean Cruises Ltd. (RCL) is a global cruise vacation
company that operates five cruise brands -- the largest being
Royal Caribbean International and Celebrity Cruises - and 41
cruise ships with four under construction. The company generates
annual net revenue of approximately $5.8 billion.
ROYAL CARIBBEAN: S&P Gives 'BB' Rating on $500M Senior Notes
------------------------------------------------------------
Standard & Poor's Ratings Services assigned Miami, Fla.-based
Royal Caribbean Cruises Ltd.'s proposed $500 million senior notes
due 2022 S&P's 'BB' issue levelrating, with a recovery rating of
'3', indicating its expectation of average (50% to 70%) recovery
for lenders in the event of a payment default. Royal expects to
use the proceeds for debt repayment. All other ratings are
unchanged.
Rationale
"Our corporate credit rating on Royal reflects our assessment of
the company's financial risk profile as 'aggressive,' and our
assessment of the company's business risk profile as
'satisfactory,' according to our criteria," S&P said.
"Our assessment of Royal's financial risk profile as aggressive
reflects high debt levels; we expect the ratio of total lease-
adjusted debt to EBITDA to increase to around 6x and funds from
operations (FFO) to total adjusted debt to decline to around 13.5%
by the end of 2012. These measures are weak compared with our 5.5x
threshold, and 15% to 20% target range at the current 'BB' rating.
EBITDA coverage of interest expense that will likely be in the
mid-3x area in 2012, and an otherwise adequate liquidity profile,
partly offset weak leverage measures," S&P said.
"The current rating and stable outlook are based on our current
expectation that Royal will reduce total debt to EBITDA (adjusted
for lease and port commitments) to our 5.5x threshold, and improve
FFO to debt to at least 15%, in 2013 through EBITDA growth and
debt repayment," S&P said.
"Our assessment of Royal's business risk profile as satisfactory
is based on its position as the second-largest cruise operator in
the world, its solid brands, a relatively young, high-quality
fleet of ships, high barriers to entry in the cruise industry, and
an experienced management team. Key business risk factors include
the capital-intensive nature of the cruise industry, lack of
flexibility regarding committed ship orders, and the sensitivity
of the travel and leisure sector to economic cycles," S&P said.
"We believe the cruise sector is slowly recovering from the impact
of the Costa Concordia grounding, although booking trends remain
somewhat weakened, especially for European itineraries in the
contemporary segment. While Royal's load factor for fourth-quarter
itineraries booked so far are below that of the same time last
year at slightly higher per diems, cumulative 2013 bookings so far
are higher than last year at higher per diems. Pricing remains
strong for Caribbean itineraries, where a majority of the capacity
is deployed; it remains weak for European itineraries. Royal plans
to reduce capacity in Europe by 10% in 2013 in response to weak
macroeconomic conditions," S&P said.
"We believe net revenue yield in 2012 will increase in the low-
single-digit area (compared with our earlier expectation that it
would be flat) because of recently improving close-in booking
demand. We expect net cruise costs per capacity day in 2012 will
be up 5%. This incorporates a mid-teen percentage increase in fuel
prices in 2012 (around 57% of Royal's estimated fuel consumption
for the remainder of 2012 and 54% of 2013 fuel consumption is
hedged, reducing some volatility in this significant cost item).
Also, our 2012 cost estimate incorporates Royal's announcement
that distribution changes and deployment initiatives will increase
costs by approximately 300 basis points in 2012. These investments
have had a negative impact on 2012 EBITDA generation amid a
challenging yield environment. Given these factors, and the
expected 1.4% capacity increase, we believe 2012 EBITDA will
decline in the high-single-digit area. We have incorporated into
the rating that net revenue yield increases in the low-single-
digits and EBITDA improves in the mid-single-digits in 2013," S&P
said.
"Downside risks to our performance expectations stem from a
sustained, or more severe, negative impact to booking and pricing
trends related to the accident, slowing economic growth and the
sovereign debt crisis in Europe, and the risk that Royal
experiences higher distribution, deployment, or fuel costs over
the near term. Any one of these factors, if they worsen our
expectation for EBITDA performance in 2013, would likely result in
a negative outlook or potentially a lower rating, as Royal's
ability to improve credit measures to within our thresholds at the
current rating over the subsequent 12 to 18 months would be
questionable," S&P said.
"In the first nine months of fiscal 2012, net yield increased
1.4%, while net cruise costs per capacity day increased 6.7%,
resulting in EBITDA declining 9%. As of Sept. 30, 2012, our
measure of Royal's total lease and port commitment adjusted debt
to EBITDA was 5.6x and our measure of FFO to total adjusted debt
was about 15%, near our thresholds for the 'BB' rating," S&P said.
"Based on our current expectation for an EBITDA decline in the
high-single-digit area in 2012 and new debt associated with the
fourth quarter delivery of Celebrity Reflection, we believe total
lease and port commitment adjusted debt to EBITDA would
temporarily increase to around 6x, and FFO to total debt would
fall to around 13.5% by the end of 2012. These measures are weak
compared with our 5.5x threshold, and 15% to 20% range at the
current 'BB' rating," S&P said.
Liquidity
Based on likely sources and uses of cash over the next 12 to 18
months and incorporating our performance expectations, Royal has
an 'adequate' liquidity profile, according to our criteria.
Relevant expectations and assumptions in S&P's assessment of
Royal's liquidity profile include:
* S&P expects sources of liquidity (including cash and facility
availability) over the next 12 to 18 months to equal or exceed
uses by 1.2x. S&P believes Royal is likely to refinance part
of its $1.5 billion in debt maturing in 2013, if necessary.
* S&P expects net sources to be positive, even if forecasted
EBITDA unexpectedly declines 15% over the next 12 months.
* S&P believes Royal has solid relationships with its banks and a
satisfactory standing in the credit markets.
Royal's liquidity sources include cash balances of $241 million as
of Sept. 30, 2012, and $1.7 billion in availability under
aggregate unsecured facilities, including the five-year
EUR365.0 million term loan facility with a one-year delay draw
option closed in July 2012 and $1.6 billion in aggregate revolver
borrowing capacity. Royal prepaid a $100 million unsecured term
loan maturing in September 2013 as part of its refinancing
strategy. In August 2012, the company borrowed $290 million under
an unsecured term loan and used the proceeds to pay down revolver
balances. In September 2012, Royal repurchased EUR255 million of
its EUR1 billion unsecured notes due 2014. These actions increase
Royal's flexibility to address upcoming maturities, in S&P's view.
S&P expects capital expenditures to be $1.3 billion in 2012 (down
by over 50% from 2010 levels) as ship deliveries are limited to
one Solstice-class vessel. S&P expects deliveries to be financed
with relatively low-cost export financing. There are no new ship
deliveries in 2013. Given the substantial reduction in expected
levels of capital spending in 2012 and 2013 compared to recent
years, S&P believes Royal will generate modestly negative free
operating cash flow in 2012 and significant free operating cash
flow in 2013. Royal recently increased its annualized quarterly
dividend to about $105 million per year. S&P expects any future
increase in Royal's common dividend to occur in concert with
further deleveraging. S&P expects Royal to meet high debt
maturities totalling $600 million, $1.5 billion, and $1.5 billion
in 2012, 2013, and 2014 with internal cash flow and revolver
borrowings, although some portion is likely to be financed in a
capital markets transaction. S&P expects overall debt levels to
increase moderately in 2012 on new debt associated with the
delivery of Celebrity Reflection offsetting debt amortization.
Outlook
"Our stable rating outlook reflects our belief that, despite the
impact from the Costa Concordia grounding, negative economic
headwinds in Europe, and ongoing geopolitical events in the
Middle East and North Africa, Royal should be able to improve
leverage in 2013 following a temporary leverage spike in 2012. We
expect Royal will reduce total lease and port commitment adjusted
debt to EBITDA to our 5.5x threshold, and FFO to debt to at least
15%, in 2013 through EBITDA growth and debt repayment. Downside
risks to our performance expectation stem from a sustained, or
more severe, negative impact to booking and pricing trends related
to the accident, slowing economic growth and the sovereign debt
crisis in Europe, and the risk that Royal experiences higher
distribution, deployment, or fuel costs over the near term. Any
one of these factors, if they worsen our expectation for EBITDA
performance in 2013, would likely result in a negative outlook or
potentially a lower rating, as Royal's ability to improve credit
measures to within our thresholds at the current rating over the
subsequent 12 to 18 months would be questionable," S&P said.
Ratings List
Royal Caribbean Cruises Ltd.
Corporate credit rating BB/Stable/--
Ratings assigned
Royal Caribbean Cruises Ltd.
Senior unsecured
$500 mil. Notes due 2022 BB
Recovery rating 3
SANTEON GROUP: Reports $150,700 Net Income in Third Quarter
-----------------------------------------------------------
Santeon Group, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $150,723 on $1.19 million of revenue for the three months ended
Sept. 30, 2012, compared with a net loss of $94,580 on $586,762 of
revenue for the same period during the prior year.
The Company reported net income of $76,658 on $2.89 million of
revenue for the nine months ended Sept. 30, 2012, compared with a
net loss of $457,009 on $1.52 million of revenue for the same
period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed
$1.11 million in total assets, $1.22 million in total liabilities,
and a $110,272 total stockholder's deficit.
A copy of the Form 10-Q is available for free at:
http://is.gd/EmnOyj
About Santeon Group
Reston, Va.-based Santeon Group, Inc., is a diversified software
products and services company specializing in the transformation
and optimization of business through the deployment or the
development of innovative products and services using Agile
mindsets in the information systems/technology, healthcare,
environmental/energy and media sectors. The Company's clients
include state and local governments, federal agencies and private
sector customers.
As reported in the TCR on Aug. 24, 2012, RBSM LLP, in New York,
N.Y., expressed substantial doubt about Santeon's ability to
continue as a going concern, following its audit of the Company's
financial position and results of operations for the fiscal year
ended Dec. 31, 2011. The independent auditors noted that the
Company has suffered losses from operations and is experiencing
difficulty in generating sufficient cash flows to meet its
obligations and sustain its operations.
SBMC HEALTHCARE: Can Incur DIP Financing of Up to $2.5 Million
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
authorized SBMC Healthcare, LLC, to incur post-petition financing
of up to $2,500,000 from Graham Mortgage Corporation to be secured
by a first lien against the Hospital property. SBMC will require
the post-petition loan funds to operate the Hospital until closing
of the sale of the Hospital to the purchaser identified as the
Best Bid. Prospective Purchaser No. 1, the identity of which was
not disclosed, submitted a Best Bid of $15.0 million for the
Hospital.
The Debtor is also authorized to pay the $13,700 in fees required
to be paid to commence the loan processing.
In court papers filed with the Court, the Debtor discloses that
the entire amount of the post-petition loan would be funded into a
lender controlled account and would bear interest at 11%. To
acquire the post-petition loan, SBMC agrees to pay a Commitment
Fee of 1%, a Loan Fee of 1% and, upon payment of the Post Petition
Loan, an Exit Fee of 1%. SBMC would only be required to pay
interest for the first 6 months.
About SBMC Healthcare
Houston, Texas-based SBMC Healthcare, LLC, is 100% owned by McVey
& Co. Investments LLC. It filed a Chapter 11 petition (Bankr.
S.D. Tex. Case No. 12-33299) on April 30, 2012. The petition was
signed by the president of McVey & Co. Investments LLC, sole
manager. The Debtor disclosed $40,149,593 in assets and
$13,108,268 in liabilities as of the Chapter 11 filing. Marilee
A. Madan, Esq., at Marilee A. Madan, P.C., in Houston, Tex., is
the Debtor's general bankruptcy counsel. Millard A. Johnson,
Esq., and Sara Mya Keith, Esq., at Johnson DeLuca, Kurisky &
Gould, P.C., in Houston, Tex., serve as the Debtor's special
bankruptcy counsel. Judge Jeff Bohm presides over the case.
Lawyers at Hall Attorneys, P.C., represent the Official Committee
of Unsecured Creditors as counsel.
SKINNY NUTRITIONAL: Trim Capital Discloses 11.1% Equity Stake
-------------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, Trim Capital LLC, Dachshund, LLC, and Marc
Cummins disclosed that, as of Oct. 19, 2012, they beneficially own
100,000,000 shares of common stock of Skinny Nutritional Corp.
representing 11.1% of the shares outstanding. Trim Capital
previously reported beneficial ownership of 11.3% equity stake as
of June 28, 2012. A copy of the amended filing is available for
free at http://is.gd/odfcbB
About Skinny Nutritional
Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB)
-- http://www.SkinnyWater.com/-- has developed and is marketing a
line of enhanced waters, all branded with the name "Skinny Water"
that are marketed and distributed primarily to calorie and weight
conscious consumers.
The Company reported a net loss of $7.66 million in 2011, compared
with a net loss of $6.91 million in 2010.
In its audit report for the 2011 financial statements, Marcum LLP,
in Bala Cynwyd, Pennsylvania, expressed substantial doubt about
the Company's ability to continue as a going concern. The
independent auditors noted that the Company had a working capital
deficiency of $3.17 million, an accumulated deficit of
$45,492,945, stockholders' deficit of $1.74 million and no cash on
hand. The Company had net losses of $7.67 million and $6.91
million for the years ended Dec. 31, 2011, and 2010, respectively.
Additionally, the Company is currently in arrears under its
obligation for the purchase of trademarks. Under the agreement,
the seller of the trademarks may choose to exercise their legal
rights against the Company's assets, which includes the
trademarks.
The Company's balance sheet at June 30, 2012, showed $2.92 million
in total assets, $6.01 million in total liabilities, all current,
and a $3.08 million stockholders' deficit.
Bankruptcy Warning
On June 28, 2012, the Company and Trim Capital, LLC, entered into
a Purchase Agreement relating to a financing transaction for a
maximum of $15,000,000 in total proceeds to the Company.
Under the Note, the termination of the Purchase Agreement prior to
the consummation of the third closing for any reason other than by
the Company due to a breach by Trim Capital or its affiliates is
an event of default under the Notes, making the Notes become
immediately due and payable.
"As our cash resources are extremely limited, we do not anticipate
having sufficient capital to repay the Notes in such an event. If
we cannot repay the Notes when due, the Purchaser, as the holder
of the Notes will be able to exercise its rights as a secured
party under the Security Agreement and IP Security Agreement,
including foreclosure on our assets. As the collateral securing
our obligations under the Notes consist of all of our assets, upon
an event of default, the Purchaser, as the holder of the Notes,
would be in a position to take possession of all of our assets,
subject to the rights of our senior lender. Further, we would not
have sufficient assets with which to repay our creditors, who in
turn would be likely to take action against us to protect their
interests. In addition, our suppliers would also be expected to
cease doing business with us and we would need to consider seeking
protection under applicable bankruptcy laws or cease doing
business altogether."
SMITH CREEK: Court Dismisses Chapter 11 Case
--------------------------------------------
The U.S. Trustee has requested, and Smith Creek Partners LP
consented to, the dismissal of the Debtor's Chapter 11 case.
The agreed order signed by the bankruptcy judge says Smith Creek
Partners will promptly pay fees due to the U.S. Trustee. The
failure to pay the required fees will be treated as contempt of
the Court's order.
The U.S. Trustee said that "cause" exists either to convert or
dismiss this case under 11 U.S.C. Sec. 1112(b)(4)(A) because there
is a substantial or continuing loss to or diminution of the estate
and the absence of a reasonable likelihood of rehabilitation.
The U.S. Trustee said that the Debtor has no operations and no
income. It pointed out that that the Debtor received a loan of
$5,000 in January without obtaining court permission. The Debtor
has also failed to file a plan by the time set by the Court.
Houston-Texas-based Smith Creek Partners LP filed for Chapter 11
bankruptcy (Bankr. S.D. Tex. Case No. 11-40495) on Dec. 7, 2011.
Judge Jeff Bohm presides over the case. Richard L. Fuqua, II,
Esq., at Fuqua & Associates, PC, serves as the Debtor's counsel.
According to its schedules, Smith Creek disclosed $16,400,000 in
total assets and $4,463,000 in total liabilities.
SOMAXON PHARMACEUTICALS: Had $4.5-Mil. Net Loss in Third Quarter
----------------------------------------------------------------
Somaxon Pharmaceuticals, Inc., reported a net loss of $4.5 million
on $2.1 million of revenues for the three months ended Sept. 30,
2012, compared with a net loss of $17.0 million on $3.7 million of
revenues for the same period a year ago.
For the nine months ended Sept. 30, 2012, the Company reported a
net loss of $8.8 million on $8.2 million of revenues, compared
with a net loss of $49.0 million on $12.2 million of revenues for
the same period of 2011.
The Company's balance sheet at Sept. 30, 2012, showed
$11.7 million in total assets, $9.1 million in total liabilities,
and stockholders' equity of $2.6 million.
The Company has accumulated losses totaling $284.9 million since
inception.
PricewaterhouseCoopers LLP, in San Diego, California, expressed
substantial doubt about Somaxon's ability to continue as a going
concern, following the Company's results for the fiscal year ended
Dec. 31, 2011. The independent auditors noted that the Company
has suffered recurring losses from operations and negative cash
flows.
A copy of the Form 10-Q is available at http://is.gd/ygq9D6
About Somaxon Pharmceuticals
Solana Beach-Calif.-based Somaxon Pharmaceuticals, Inc., is a
specialty pharmaceutical company focused on the in-licensing,
development and commercialization of proprietary branded products
and product candidates to treat important medical conditions where
there is an unmet medical need and/or high-level of patient
dissatisfaction, currently in the central nervous system
therapeutic area. In March 2010, the U.S. Food and Drug
Administration approved the Company's New Drug Application for
Silenor(R) 3 mg and 6 mg tablets for the treatment of insomnia
characterized by difficulty with sleep maintenance. Silenor was
made commercially available by prescription in the United States
in September 2010.
SOUTHERN AIR: Approved to Pay Critical Vendors' Prepetition Claims
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized,
on a final basis, Southern Air Holdings, Inc., et al., to pay:
-- prepetition obligations of certain critical vendors;
-- foreign creditor claims, in the ordinary course of the
Debtors' business in an amount not to exceed $2.4 million;
-- possessory lien claims in the ordinary course of the
Debtors' business in an amount not to exceed $400,000;
-- priority vendors in the ordinary course of the Debtors'
business in an amount not to exceed $200,000.
About Southern Air
Based in Norwalk, Connecticut, military cargo airline Southern
Air Inc. -- http://www.southernair.com/-- its parent Southern Air
Holdings Inc. and their affiliated entities filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to
12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in
business from the U.S. Department of Defense, which reduced its
troop count in Afghanistan and hired Southern Air less frequently.
Bankruptcy Judge Christopher S. Sontchi presides over the case.
Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan,
Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq.,
and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt &
Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as
the Debtors' bankruptcy consultant and special financial advisor.
Kurtzman Carson Consultants, LLC, serves as claims and notice
agent.
CF6-50, LLC, debtor-affiliate, disclosed $338,925,282 in assets
and $288,000,000 in liabilities as of the Chapter 11 filing. The
petition was signed by Jon E. Olin, senior vice president.
Canadian Imperial Bank of Commerce, New York Agency, the DIP agent
and prepetition agent, is represented by Matthew S. Barr, Esq.,
and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and
Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards
Layton & Finger PA.
Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul
Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at
Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH
Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC.
The Debtors' Plan provides that lenders agreed to accept ownership
of the company as payment for their $288 million loan.
Roberta DeAngelis, U.S. Trustee for Region 3, notified the Court
that she was unable to form an official committee of unsecured
creditors due to insufficient response to the U.S. Trustee's
communication/contact for service on the committee.
SOUTHERN AIR: Weil Gotshal Approved as Bankruptcy Counsel
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Southern Air Holdings, Inc., et al., to employ Weil, Gotshal &
Manges LLP as general bankruptcy counsel to perform the extensive
legal services that will be necessary during their chapter 11
cases.
As reported in the Troubled Company Reporter on Oct. 8, 2012,
the Debtor's court papers indicate Weil possesses an in-depth
knowledge of the Debtors' capital structure as a result of Weil's
substantial historical representation of the Debtors. Weil
represented the Debtors in connection with the documentation of
their existing credit facility and all subsequent amendments
thereto. In connection with the 2009 and 2011 amendments to the
Debtors' credit facility, Weil advised the Debtors with respect to
an additional equity contribution by the Debtors' ultimate parent,
a group of funds managed by Oak Hill Capital Partners II, L.P.
Weil also has performed much of the Debtors' external corporate
and finance work since 2007, when the Debtors were acquired by the
Oak Hill Funds. In connection with its prepetition representation
of the Debtors with respect to alternatives for refinancing their
financial obligations and the preparation for, and commencement
of, the chapter 11 cases, Weil has gained additional insight into
the current condition of the Debtors' businesses and operations.
Brian S. Rosen, a member of Weil, attests that the members of,
counsel, and associates of, the firm do not have any connection
with or any interest adverse to the Debtors, their creditors, or
any other party in interest, or their attorneys and accountants.
According to Mr. Rosen, Weil is not a creditor of the Debtors.
During the approximate one-year period prior to the commencement
of the bankruptcy, Weil received from the Debtors payments and
advances in the aggregate amount of approximately $2,091,000 for
professional services performed and to be performed, including the
commencement and prosecution of the chapter 11 cases. As of the
Petition Date, the fees and expenses incurred by Weil approximated
$1,888,000. Weil has applied the payments and advances received
to credit the Debtors' account for Weil's estimated charges for
professional services performed and expenses incurred up to the
time of the commencement of the chapter 11 cases and has reduced
the balance of the credit available to the Debtors by the amount
of such charges. As of the Petition Date, Weil had a remaining
credit balance in favor of the Debtors for future professional
services to be performed, and expenses to be incurred in
connection with the chapter 11 cases, in the approximate amount of
$203,000.
Weil's current customary hourly rates, subject to change from time
to time, are $770 to $1,075 for members and counsel, $450 to $760
for associates, and $80 to $320 for paraprofessionals. Weil also
intends to seek reimbursement for expenses incurred in connection
with its representation of the Debtors.
To the best of the Debtors' knowledge, Weil Gotshal is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
About Southern Air
Based in Norwalk, Connecticut, military cargo airline Southern
Air Inc. -- http://www.southernair.com/-- its parent Southern Air
Holdings Inc. and their affiliated entities filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to
12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in
business from the U.S. Department of Defense, which reduced its
troop count in Afghanistan and hired Southern Air less frequently.
Bankruptcy Judge Christopher S. Sontchi presides over the case.
Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan,
Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq.,
and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt &
Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as
the Debtors' bankruptcy consultant and special financial advisor.
Kurtzman Carson Consultants, LLC, serves as claims and notice
agent.
CF6-50, LLC, debtor-affiliate, disclosed $338,925,282 in assets
and $288,000,000 in liabilities as of the Chapter 11 filing. The
petition was signed by Jon E. Olin, senior vice president.
Canadian Imperial Bank of Commerce, New York Agency, the DIP agent
and prepetition agent, is represented by Matthew S. Barr, Esq.,
and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and
Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards
Layton & Finger PA.
Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul
Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at
Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH
Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC.
The Debtors' Plan provides that lenders agreed to accept ownership
of the company as payment for their $288 million loan.
Roberta DeAngelis, U.S. Trustee for Region 3, notified the Court
that she was unable to form an official committee of unsecured
creditors due to insufficient response to the U.S. Trustee's
communication/contact for service on the committee.
SOUTHERN AIR: Young Conaway Approved as Bankruptcy Co-counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Southern Air Holdings, Inc., et al., to employ Young Conaway
Stargatt & Taylor, LLP as co-counsel.
M. Blake Cleary, Esq., attests that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
The firm's hourly rates are:
Professional Rates
------------ -----
M. Blake Cleary $635
Maris J. Kandestin $390
Jaime Luton Chapman $355
Travis G. Buchanan $270
Debbie Laskin (paralegal) $230
About Southern Air
Based in Norwalk, Connecticut, military cargo airline Southern
Air Inc. -- http://www.southernair.com/-- its parent Southern Air
Holdings Inc. and their affiliated entities filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to
12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in
business from the U.S. Department of Defense, which reduced its
troop count in Afghanistan and hired Southern Air less frequently.
Bankruptcy Judge Christopher S. Sontchi presides over the case.
Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan,
Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq.,
and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt &
Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as
the Debtors' bankruptcy consultant and special financial advisor.
Kurtzman Carson Consultants, LLC, serves as claims and notice
agent.
CF6-50, LLC, debtor-affiliate, disclosed $338,925,282 in assets
and $288,000,000 in liabilities as of the Chapter 11 filing. The
petition was signed by Jon E. Olin, senior vice president.
Canadian Imperial Bank of Commerce, New York Agency, the DIP agent
and prepetition agent, is represented by Matthew S. Barr, Esq.,
and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and
Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards
Layton & Finger PA.
Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul
Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at
Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH
Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC.
The Debtors' Plan provides that lenders agreed to accept ownership
of the company as payment for their $288 million loan.
Roberta DeAngelis, U.S. Trustee for Region 3, notified the Court
that she was unable to form an official committee of unsecured
creditors due to insufficient response to the U.S. Trustee's
communication/contact for service on the committee.
SOUTHERN AIR: Zolfo Cooper Approved as Bankruptcy Consultant
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Southern Air Holdings, Inc., et al., to employ Zolfo Cooper, LLC
as Bankruptcy consultant and special financial advisors.
Zolfo Cooper is expected to assist them in effectuating a
successful reorganization of their businesses, including, without
limitation, developing, negotiating and confirming a plan of
reorganization.
The Debtors have selected Zolfo Cooper, in part, because of Zolfo
Cooper's experience at a national level in matters of this
character and its exemplary qualifications to perform the services
required in these chapter 11 cases. Zolfo Cooper has been
retained in numerous nationally prominent bankruptcy proceedings.
Zolfo Cooper and its senior professionals have an excellent
reputation for providing high quality bankruptcy consulting and
financial advisory services to debtors and creditors in bankruptcy
reorganizations and other debt restructurings.
Zolfo Cooper is also intimately familiar with the Debtors'
financial and business operations. The Debtors initially engaged
Zolfo Cooper effective on July 26, 2012. The Debtors engaged
Zolfo Cooper to advise and assist the Debtors' management in,
among other things: (i) evaluating and challenging the Debtors'
short-term cash-flow projections, including underlying
assumptions; (ii) evaluating and challenging the Debtors' business
plan, including underlying assumptions, and identifying potential
strategies and tactics to improve the Debtors' economic model;
(iii) developing long-term capital restructuring alternatives; and
(iv) negotiating and implementing the Debtors' selected capital
restructuring plan with various creditors, as necessary. Zolfo
Cooper diligently provided such services to the Debtors.
The Debtors' have provided Zolfo Cooper a retainer of $100,000,
and monthly advance payments for the months of July 2012
(prorated), August 2012 and September 2012 in aggregate of
$219,354.96, plus reimbursement of reasonable expenses for July
2012 and August 2012. Pursuant to the Engagement Letter, the
Advances are to be reduced by any current outstanding prepetition
fees and expenses. Further, prior to seeking further payment from
the Debtors, Zolfo Cooper will credit any remaining amounts of the
prepetition retainer and the Advances to the fees and expenses
approved by the Court.
The Debtors and Zolfo Cooper have agreed to this compensation
structure:
(a) A monthly fixed fee of $100,000.
(b) A completion fee of $600,000 payable in cash upon
consummation of any arrangement (contractual,
noncontractual, pursuant to a plan of reorganization,
pursuant to other bankruptcy or restructuring process,
363 sale under chapter 11 or otherwise) where all or any
portion of the Debtors' existing debt or capital
structure is amended, restructured or reconfigured on
terms acceptable to the Debtors or a sale of
substantially all of the Debtors' assets under section
363 of the Bankruptcy Code.
(c) Reimbursement for reasonable out-of-pocket expenses
including, but not limited to, costs of travel,
reproduction, legal counsel, any applicable state sales
or excise taxes and other direct expenses.
The Debtors also have agreed to certain indemnification and
contribution obligations.
Zolfo Cooper acknowledges the Debtors intend to complete a
Restructuring within a four-month timeframe. As such, the Debtors
agree that, in the event a Restructuring is not completed within
150 days of the date of the engagement, the Debtors and Zolfo
Cooper will, in good faith, renegotiate the terms and conditions
of Zolfo Cooper's fee agreement. If, at any time prior to 12
months after the cessation of services performed by Zolfo Cooper,
a Restructuring is consummated, whether or not the Debtors has
then engaged the services of another professional, Zolfo Cooper
will be entitled to payment in full of the compensation. The
right to receive the completion fee for the period of 12 months
will continue even if the Debtors have terminated the engagement.
Scott W. Winn, senior managing director at Zolfo Cooper, attests
that neither his firm nor any of its professional employees have
any connection with or holds any interest adverse to, the Debtors,
their significant creditors, or any other party in interest, or
their attorneys or accountants, or the U.S. Trustee or any person
employed by the U.S. Trustee. Zolfo Cooper is a "disinterested
person," as such term is defined in Section 101(14) of the
Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy
Code, and as required under Section 327(a) of the Bankruptcy Code.
About Southern Air
Based in Norwalk, Connecticut, military cargo airline Southern
Air Inc. -- http://www.southernair.com/-- its parent Southern Air
Holdings Inc. and their affiliated entities filed for Chapter 11
bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to
12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in
business from the U.S. Department of Defense, which reduced its
troop count in Afghanistan and hired Southern Air less frequently.
Bankruptcy Judge Christopher S. Sontchi presides over the case.
Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan,
Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq.,
and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt &
Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as
the Debtors' bankruptcy consultant and special financial advisor.
Kurtzman Carson Consultants, LLC, serves as claims and notice
agent.
CF6-50, LLC, debtor-affiliate, disclosed $338,925,282 in assets
and $288,000,000 in liabilities as of the Chapter 11 filing. The
petition was signed by Jon E. Olin, senior vice president.
Canadian Imperial Bank of Commerce, New York Agency, the DIP agent
and prepetition agent, is represented by Matthew S. Barr, Esq.,
and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and
Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards
Layton & Finger PA.
Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul
Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at
Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH
Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC.
The Debtors' Plan provides that lenders agreed to accept ownership
of the company as payment for their $288 million loan.
Roberta DeAngelis, U.S. Trustee for Region 3, notified the Court
that she was unable to form an official committee of unsecured
creditors due to insufficient response to the U.S. Trustee's
communication/contact for service on the committee.
SOUTHERN OAKS: Plan Outline Hearing Continued Until Nov. 27
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Oklahoma
continued until Nov. 27, 2012, at 9:30 a.m., the hearing to
consider adequacy of the Disclosure Statement explaining Southern
Oaks of Oklahoma, LLC's Chapter 11 Plan.
At the hearing, the Court will also consider the objections filed
by InterBank, the U.S. Trustee, and Quail Creek Bank.
Southern Oak's plan provides that secured creditors InterBank, and
Quail Creek Bank, Seterus, Inc., Suntrust Mortgage, Inc., Federal
National Mortgage Association will be paid in monthly installments
of principal and interest calculated at 5% interest per annum,
with their claims to be paid in full by the 10th anniversary of
the effective date of the Plan. The Plan promises to eventually
pay general unsecured creditors 100% of their allowed claims, with
interest in 60 equal monthly installments or as earlier paid in
full. The existing owners will retain their interests in the
Debtor. A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/Southern_Oaks_DS.pdf
About Southern Oaks
Southern Oaks of Oklahoma, LLC, owns a 126 unit apartment complex
in south Oklahoma City, 115 single family residences, 10
residential duplexes and 4 commercial properties in the Oklahoma
City Metro area and a 100 unit apartment complex in Pryor,
Oklahoma. The Company operates the non-apartment properties by
and through an affiliate property management company, Houses For
Rent of OKC, LLC, who advertises, leases, collects rents, pays
expenses, provides equipment, labor and materials for maintenance,
repairs and makeready services.
The Company filed for Chapter 11 bankruptcy (Bankr. W.D. Okla.
Case No. 12-10356) on Jan. 31, 2012. Judge Niles L. Jackson
presides over the case. Ruston C. Welch, Esq., at Welch Law Firm
P.C., serves as the Debtor's counsel. It scheduled $14,788,414 in
assets and $15,352,022 in liabilities. The petition was signed by
Stacy Murry, manager of MBR.
Affiliates that filed separate Chapter 11 petitions are
Charlemagne of Oklahoma, LLC (Bankr. W.D. Okla. Case No. 10-13382)
on July 2, 2010; and Brookshire Place, LLC (Bankr. W.D. Okla. Case
No. 11-10717) on Feb. 23, 2011.
Southern Oaks owns a 126-unit apartment complex in south Oklahoma
City, 115 single family residences, 10 residential duplexes and 4
commercial properties in the Oklahoma City Metro area and a 100
unit apartment complex in Pryor, Oklahoma. Southern Oaks operates
the non-apartment Properties by and through an affiliate property
management company, Houses For Rent of OKC LLC, who advertises,
leases, collects rents, pays expenses, provides equipment, labor
and materials for maintenance, repairs and make ready services.
On Jan. 12 and 27, 2012, the Debtor's ownership and operation of
the Properties was consolidated by the merger of various affiliate
entities with the Debtor being the surviving entity. Those
entities are Southern Oaks Of Oklahoma, LLC; Quail 12, LLC; Quail
13, LLC; 1609 N.W. 47th, LLC; 2233 S.W. 29th, LLC; 400 S.W. 28th,
LLC; South Robinson, LLC; 9 on S.E. 27th, LLC; Southside 10, LLC;
QCB 08, LLC; and Prairie Village of Oklahoma, LLC.
SOUTHERN OAKS: Hearing Striken on Interbank's Motion for Trustee
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Oklahoma,
according to the virtual minutes of the Oct. 22, 2012 hearing on
Interbank's motion to appoint Chapter 11 trustee in the Chapter 11
case of Southern Oaks of Oklahoma, LLC, has stricken the hearing
to be reset if necessary upon request of the parties.
InterBank asked the Court to appoint a trustee, because, among
other things:
(i) the dishonesty of representatives of the Debtor concerning
the condition and value of the Prairie Village Apartments
including fires that occurred at the apartments, and
(ii) incompetence or gross mismanagement of the affairs of the
Debtor for failing to file insurance claims concerning the
fires and other matters.
InterBank asserts an interest on the Debtor's several apartment
complexes, duplexes, and individual rental houses and other
properties includinge the Southern Oaks Apartments, the Prairie
Village Apartments in Pryor, Oklahoma, and 60 duplexes and rental
houses.
About Southern Oaks
Southern Oaks of Oklahoma, LLC, owns a 126 unit apartment complex
in south Oklahoma City, 115 single family residences, 10
residential duplexes and 4 commercial properties in the Oklahoma
City Metro area and a 100 unit apartment complex in Pryor,
Oklahoma. The Company operates the non-apartment properties by
and through an affiliate property management company, Houses For
Rent of OKC, LLC, who advertises, leases, collects rents, pays
expenses, provides equipment, labor and materials for maintenance,
repairs and makeready services.
The Company filed for Chapter 11 bankruptcy (Bankr. W.D. Okla.
Case No. 12-10356) on Jan. 31, 2012. Judge Niles L. Jackson
presides over the case. Ruston C. Welch, Esq., at Welch Law Firm
P.C., serves as the Debtor's counsel. It scheduled $14,788,414 in
assets and $15,352,022 in liabilities. The petition was signed by
Stacy Murry, manager of MBR.
Affiliates that filed separate Chapter 11 petitions are
Charlemagne of Oklahoma, LLC (Bankr. W.D. Okla. Case No. 10-13382)
on July 2, 2010; and Brookshire Place, LLC (Bankr. W.D. Okla. Case
No. 11-10717) on Feb. 23, 2011.
Southern Oaks owns a 126-unit apartment complex in south Oklahoma
City, 115 single family residences, 10 residential duplexes and 4
commercial properties in the Oklahoma City Metro area and a 100
unit apartment complex in Pryor, Oklahoma. Southern Oaks operates
the non-apartment Properties by and through an affiliate property
management company, Houses For Rent of OKC LLC, who advertises,
leases, collects rents, pays expenses, provides equipment, labor
and materials for maintenance, repairs and make ready services.
On Jan. 12 and 27, 2012, the Debtor's ownership and operation of
the Properties was consolidated by the merger of various affiliate
entities with the Debtor being the surviving entity. Those
entities are Southern Oaks Of Oklahoma, LLC; Quail 12, LLC; Quail
13, LLC; 1609 N.W. 47th, LLC; 2233 S.W. 29th, LLC; 400 S.W. 28th,
LLC; South Robinson, LLC; 9 on S.E. 27th, LLC; Southside 10, LLC;
QCB 08, LLC; and Prairie Village of Oklahoma, LLC.
Southern Oak's plan provides that secured creditors InterBank, and
Quail Creek Bank, Seterus, Inc., Suntrust Mortgage, Inc., Federal
National Mortgage Association will be paid in monthly installments
of principal and interest calculated at 5% interest per annum,
with their claims to be paid in full by the 10th anniversary of
the effective date of the Plan. The Plan promises to eventually
pay general unsecured creditors 100% of their allowed claims, with
interest in 60 equal monthly installments or as earlier paid in
full. The existing owners will retain their interests in the
Debtor. A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/Southern_Oaks_DS.pdf
SPORTS AUTHORITY: S&P Rates $630MM Sr. Secured Term Loan 'B-'
-------------------------------------------------------------
Standard & Poor's Rating Services assigned its 'B-' issue-level
rating to The Sports Authority Inc.'s and co-borrower TSA Stores
Inc.'s $630 million senior secured term loan B, with a recovery
rating of '4', indicating its expectation for average (30% to 50%)
recovery of principal if a payment default occurs.
"The company expects the loan to mature in 2019 and that it will
use proceeds to repay its existing term loan B and its senior
subordinated notes. At the same time, we affirmed our ratings on
TSA, including our 'B-' corporate credit rating. The rating
outlook is stable," S&P said.
Rationale
"The ratings on sporting goods retailer TSA reflect Standard &
Poor's Ratings Services' assessment that the company's business
risk profile will continue to be 'vulnerable' and its financial
risk profile will remain 'highly leveraged.' Our business risk
assessment reflects our analysis that the retail sporting goods
industry will continue to be highly competitive and fragmented,
and that it will be difficult for TSA to improve its market share.
Competitors include traditional sporting goods stores (Academy
Sports & Outdoors, Hibbett Sports, and Big 5 Corp.), specialty
retailers and department stores (Foot Locker Inc. and Macy's
Inc.), mass merchants (Wal-Mart Stores Inc. and Target Corp.), and
catalog and Internet retailers (Amazon.com)," S&P said.
"Although business conditions remain competitive and the economy
remains stagnant, we believe that TSA's performance will rebound
modestly after a difficult 2011 fourth quarter. We base this on
benefits we expect from supply chain initiatives, a better focus
on merchandise improvements, and fewer price markdowns. These
efforts could result in improved margins over the next year," S&P
said.
Specifically, S&P's forecast for 2013 includes these assumptions:
* Flat to slightly negative sales per square foot.
* Modest growth in total square feet.
* Margin increases based on fewer markdowns and lower operating
expenses.
* Moderate inventory reduction through supply chain enhancements.
* More capital spending to support store growth.
* Modestly positive free operating cash flow.
"Credit protection measures deteriorated over the past year
because of a lower EBITDA, but we expect this trend to reverse in
the coming year. In our view, the company should benefit from
operational gains coupled with relatively flat debt levels. We
believe leverage will fall to about 7.0x over the next 12 months
compared with 7.5x on July 28, 2012. We anticipate interest
coverage will improve to the mid-to-high 1.0x area, mainly due to
refinancing higher interest rate debt. We also expect funds from
operations (FFO) to total debt to approach 14% over the next 12
months," S&P said.
Liquidity
Liquidity remains 'adequate' for the company, as S&P expects
sources of cash to exceed uses of cash over the next 12 months.
Sources of cash include availability under the company's $650
million revolving credit facility, FFO, and cash on hand. Cash
uses include debt amortization, capital spending, and a modest
investment in working capital. Other relevant aspects of our
analysis include:
* S&P estimates coverage of sources over uses of above 1.2x over
the next 12 months.
* S&P expects net sources to be positive, even with a 20% decline
in EBITDA.
* There are no financial performance covenants unless
availability is less than 10% of the borrowing base.
* There are no meaningful debt maturities over the near term.
Outlook
"The stable outlook reflects our expectations that performance and
credit measures will improve modestly over the next 12 months, but
that the company's financial risk profile will remain highly
leveraged with thin cash flow protection measures. As a result of
the refinancing, the company's funded debt amounts will not
change, but we expect interest costs and cash flow measures to
improve modestly over the next year because of the lower interest
rate," S&P said.
"Although we think a lower rating is unlikely over the near term,
it could occur if liquidity deteriorates such that TSA's ability
to fund ongoing operations from availability under its revolving
credit facility is at risk. A violation of the springing financial
performance covenants could also cause a downgrade," S&P said.
"We could contemplate raising the ratings if TSA performs above
our expectations, and achieves leverage below 6.0x and interest
coverage approaching the low-2.0x area. In this scenario, EBITDA
would be about 20% higher than our projections over the next year.
However, given TSA's forecast credit measures, we are not
expecting to raise our ratings over the next 12 months," S&P said.
Ratings List
Ratings Affirmed
The Sports Authority Inc.
Corp credit rating B-/Stable
Senior secured B-
Recovery rating 3
New Rating
The Sports Authority Inc.
$630 mil term loan B B-
Recovery rating 4
A full-text copy of The Sports Authority's recovery rating report
is accessible for free at:
http://bankrupt.com/misc/S&P_SportsAuthorityRecov.pdf
SUN RIVER: St. George Discloses 7.3% Equity Stake
-------------------------------------------------
In a Schedule 13G filing with the U.S. Securities and Exchange
Commission, St George Investments LLC, Fife Trading, Inc., and
John M. Fife disclosed that, as of Nov. 1, 2012, they beneficially
own 3,120,675 shares of common stock of Sun River Energy, Inc.,
representing 7.3% of the shares outstanding. A copy of the filing
is available for free at http://is.gd/1ju2h8
About Sun River
Dallas, Tex.-based Sun River Energy, Inc., is an exploration and
production company focused on oil and natural gas. Sun River has
mineral interests in two major geological areas. Each area has a
distinct development plan, and each area brings a different value
matrix to the Company. The Company has mineral interests in the
Raton Basin located in Colfax County, New Mexico, and in several
counties in the highly prolific East Texas Basin.
In the auditors' report accompanying the consolidated financial
statements for the year ended April 30, 2012,
LightfootGuestMoore&Co, P.C., in Dallas, Tex., expressed
substantial doubt about Sun River's ability to continue as a going
concern. The independent auditors noted that the Company has an
accumulated earnings deficit of $41,027,526.
The Company reported a net loss of $24.0 million on $293,000 of
revenues for the year ended April 30, 2012, compared with a net
loss of $7.4 million on $98,000 of revenues for the year ended
April 30, 2011.
The Company's balance sheet at July 31, 2012, showed $12.71
million in total assets, $14.23 million in total liabilities and a
$1.52 million total stockholders' deficit.
Going Concern Considerations
The Company has negative working capital of $13,793,000 at
July 31, 2012. Approximately $10,339,000 of the negative working
capital position was comprised of amounts owed to significant
stockholders, including Officers of the Company. The Company is
attempting to raise capital to resolve the working capital
requirements and develop the oil and gas assets. The Company has
multiple options available to meet the current financial
obligations when due:
* The Company is attempting to settlement of its $4,000,000
note payable - related party obligation with assignment of
certain mineral rights that the Company was not anticipating
to develop; and/or
* Sun River has raised capital in a Preferred Stock offering,
and the Company is currently attempting to raise additional
equity through the sale of additional common stock and will
utilize any proceeds to improve their working capital; and/or
* The Company may sell a portion of its mineral rights to
improve its working capital, in addition to other selected
current liabilities of the Company which may be due.
However, there can be no assurance that the Company will be able
to execute any or all of the contemplated transactions, which
raises substantial doubt about the Company's ability to continue
as a going concern.
SUNRISE REAL: Amends 2011 Form 10-K for Accounting Errors
---------------------------------------------------------
Sunrise Real Estate Group, Inc., filed with the U.S. Securities
and Exchange Commission amendment no.1 to its annual report on
Form 10-K for the period ended Dec. 31, 2011.
The purpose of the amendment was to amend and restate the
consolidated financial statements for the year ended Dec. 31,
2011, to make the necessary accounting corrections resulting from
a miscalculation in the Company's underwriting sales revenue and
cost of sales under the Statement of Financial Accounting
Standards No. 66. The Amendment No. 1 restates the following
items:
- Part I, Item 1- Financial Statements;
- Part II, Item 7- Management's Discussion and Analysis of
Financial Condition and Results of Operations;and
- Part III, Item 15 - Exhibits.
As a result of these adjustments, net revenue for the year ended
Dec. 31, 2011, decreased by US$305,495, cost of revenue for the
year ended Dec. 31, 2011, increased by US$107,028 and net loss for
the year ended Dec. 31, 2011 increased by US$198,467.
The Company's restated statements of operations reflect a net loss
of US$1.41 million on US$8.97 million of net revenues for the year
ended Dec. 31, 2011, compared with a net loss of US$1.22 million
on US$9.27 million of net revenues as originally reported.
The Company's restated balance sheet at Dec. 31, 2011, showed
US$22.17 million in total assets, US$25.46 million in total
liabilities and a US$3.29 million total shareholders' deficit.
The Company previously disclosed US$22.17 million in total assets,
US$25.25 million in total liabilities and a US$3.08 million total
shareholders' deficit.
A copy of the Annual Report, as amended, is available at:
http://is.gd/5aAjX2
About Sunrise Real Estate
Headquartered in Shanghai, the People's Republic of China, Sunrise
Real Estate Group, Inc. was initially incorporated in Texas on
Oct. 10, 1996, under the name of Parallax Entertainment, Inc.
On Dec. 12, 2003, Parallax changed its name to Sunrise Real
Estate Development Group, Inc. On April 25, 2006, Sunrise Estate
Development Group, Inc., filed Articles of Amendment with the
Texas Secretary of State, changing the name of Sunrise Real Estate
Development Group, Inc. to Sunrise Real Estate Group, Inc.,
effective from May 23, 2006.
The Company and its subsidiaries are engaged in the property
brokerage services, real estate marketing services, property
leasing services and property management services in China.
In its report accompanying the 2011 financial statements, Kenne
Ruan, CPA, P.C., in Woodbridge. CT, USA, noted that the Company
has significant accumulated losses from operations and has a net
capital deficiency that raise substantial doubt about its ability
to continue as a going concern.
The Company's balance sheet at June 30, 2012, showed
US$34.03 million in total assets, US$25.35 million in total
liabilities, and US$8.67 million in total shareholders' equity.
T3 MOTION: Gets Delisting Notice from NYSE; Plans to Appeal
-----------------------------------------------------------
T3 Motion, Inc., received a notice dated Oct. 26, 2012, from the
NYSE MKT Staff indicating that the Company was not in compliance
with the Exchange's continued listing standards. Specifically,
the Company is not in compliance with Section 1003(a)(iv) in that
it has sustained losses which are so substantial in relation to
its overall operations or its existing financial resources or its
financial condition has become so impaired that it appears
questionable, in the opinion of the Exchange, as to whether the
Company will be able to continue operations or meet its obligation
as they mature. As a result, the Company's securities are subject
to being delisted from the Exchange pursuant to Section 1009 of
the Company Guide.
As previously disclosed, T3 Motion has been operating under a Plan
of Compliance accepted by the Exchange on Aug. 10, 2012, that
originally allowed the Company until Nov. 20, 2012, to regain
compliance with the deficiencies. During this period, the Company
has been subject to periodic review by Exchange Staff, and was
informed of the requirement to make progress consistent with the
Plan or to regain compliance with the continued listing standards
of the Exchange by the end of the Extension Date. In the Oct. 26,
2012, notice, however, the Company was informed of the Staff's
determination that the Company had not made progress consistent
with the Plan and failed to present a reasonable basis to conclude
that the Company could regain compliance with the Exchange's
listing standards. Accordingly, the Company's securities are
subject to immediate delisting proceedings.
T3 Motion appreciates the time given to the Company to cure its
deficiencies, and has informed NYSE MKT of its intention to pursue
the right of appeal and request a hearing pursuant to Sections
1203 and 1009(d) of the Exchange's Company Guide. There can be no
assurance that the Company's request for continued listing will be
granted at this hearing. In the event the Company's appeal is
unsuccessful, the Company expects that its common stock will trade
on OTC-BB following any official delisting from NYSE MKT.
After review of the available options, the Company's board of
directors concluded that current negotiations for investment
capital would, if consummated quickly, provide sufficient capital
to put T3 Motion, Inc., in compliance with the Exchange's listing
standards and allow T3 Motion, Inc., to retain its NYSE MKT
listing. The marginal costs of the appeal and of continuing
ongoing negotiations create a positive cost/benefit tradeoff.
However, there can be no guarantee of finalizing a transaction or,
if such a transaction is completed, of retaining the Exchange
listing even if the Company improves its financial condition. In
any scenario, T3 Motion, Inc., intends to remain as a fully
reporting, current SEC filer with transparent accounting and
proper corporate governance.
The Company will continue to update its stockholders on its
progress, including, but not limited to, the status of its NYSE
MKT listing. The Company's trading symbol will bear the "BC"
indicator until the Company is either delisted or regains
compliance with the Exchange's continued listing requirements.
CFO Quits
On Oct. 26, 2012, Domonic Carney, chief financial officer of T3
Motion notified the Company's board of directors that he was
terminating his employment relationship with the Company for
personal reasons. Mr. Carney has advised that he will continue to
work with the Company for the next several weeks in order to
assist with the transition as the Company seeks to retain his
replacement. Rod Keller Jr., Chief Executive Officer of the
Company, will assume the role of interim principal financial
officer.
About T3 Motion
Costa Mesa, Calif.-based T3 Motion, Inc., develops and
manufactures T3 Series vehicles, which are electric three-wheel
stand-up vehicles that are directly targeted to the public safety
and private security markets.
After auditing the 2011 results, KMJ Corbin & Company LLP, in
Costa Mesa, California, expressed substantial doubt about the
Company's ability to continue as a going concern. The independent
auditors noted that the Company has incurred significant operating
losses and has had negative cash flows from operations since
inception, and at Dec. 31, 2011, has an accumulated deficit of
$54.9 million.
The Company reported a net loss of $5.50 million in 2011, compared
with a net loss of $8.32 million in 2010.
The Company's balance sheet at June 30, 2012, showed $2.85 million
in total assets, $3.31 million in total liabilities and a $451,781
total stockholders' deficit.
TARGETED MEDICAL: AFH Holding Discloses 9.5% Equity Stake
---------------------------------------------------------
In an amended Schedule 13D filing with the U.S. Securities and
Exchange Commission, AFH Holding & Advisory, LLC, and Amir F.
Heshmatpour disclosed that, as of July 20, 2012, they beneficially
own 2,108,558 shares of common stock of Targeted Medical Pharma,
Inc., representing 9.56% of the shares outstanding. A copy of the
filing is available for free at http://is.gd/U0yfrh
About Targeted Medical
Los Angeles, Calif.-based Targeted Medical Pharma, Inc., is a
specialty pharmaceutical company that develops and commercializes
nutrient- and pharmaceutical-based therapeutic systems.
The Company's balance sheet at June 30, 2012, showed $11.2 million
in total assets, $12.7 million in total liabilities, and a
stockholders' deficit of $1.5 million.
As reported in the TCR on July 19, 2012, EFP Rotenberg, LLP, in
Rochester, New York, expressed substantial doubt about Targeted
Medical'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 losses for the
year ended Dec. 31, 2011, totaling $4,177,050 as well as
accumulated deficit amounting to $4,098,612. "Further the Company
appears to have inadequate cash and cash equivalents of $147,364
as of Dec. 31, 2011, to cover projected operating costs for the
next 12 months. As a result, the Company is dependent upon
further financing, development of revenue streams with shorter
collection times and accelerating collections on our physician
managed and hybrid revenue streams."
TITAN INT'L: Mood's Raises CFR/PDR to 'B1'; Outlook Stable
----------------------------------------------------------
Moody's Investors Service upgraded Titan International, Inc.'s
corporate family and probability of default ratings to B1 from B2
based on the company's steady improvement in credit metrics, which
provides the company with cushion in the rating category to
tolerate a moderate weakening in profitability or an increase in
leverage related to acquisitions. The rating on the company's
senior secured notes due 2017 was affirmed at B1. The SGL
(speculative grade liquidity rating) was lowered to SGL-3 from
SGL-2 largely due to the short-term debt maturity associated with
Titan Europe-related debt. The rating outlook was changed to
stable from positive.
The following rating actions were taken (with related updated LGD
assessments):
Upgraded Corporate Family Rating, to B1 from B2;
Upgraded Probability of Default Rating, to B1 from B2;
Affirmed $200 million guaranteed senior secured notes due 2017
at B1 (LGD-4, 54%);
Downgraded Speculative Grade Liquidity Rating, to SGL-3 from
SGL-2
Ratings Rationale
The ratings upgrade recognizes the improvement in the company's
operating performance and expected ability to withstand a degree
of earnings volatility and moderate leverage increase emanating
from recent and potential near term acquisitions. The company's
metrics have benefitted from strong performance in the company's
agricultural and earthmoving segments. The company has also been
rapidly expanding its presence abroad. Over the last eighteen
months, the company has acquired The Goodyear Tire & Rubber
Company's Latin American tire business based in Sao Paulo, Brazil,
a 56% interest in Australia-based Planet Corporation Group and the
larger scale acquisition of the remaining approximately 80%
interest in Titan Europe.
The B1 corporate family rating reflects metrics that are strong
for the rating category but that also consider the potential for
earnings fluctuations from the highly cyclical nature of the
industry segments that the company operates in. The company has
been making a focused effort to increase aftermarket related
revenue to offset some of the cyclicality. The B1 CFR incorporates
tolerance for factors that could result in a weakening of credit
metrics over the intermediate term including potential negative
effects from lower crop yields due to the 2012 drought in the U.S.
Midwest, integration risk from recent foreign-based acquisitions
and the high likelihood that additional acquisitions could result
in higher debt-levels. The ratings also consider the positive
aspects of recent acquisitions including the increase in revenue
scale and geographic diversity. Nevertheless, the acquisitions are
being made in a relatively short period of time and the long-term
effect on credit metrics will continue to be assessed. The largest
of the recent acquisitions is the company's acquisition of the
remaining stake in Titan Europe plc. The acquisition increased the
company's pro forma revenue scale to over $2.5 billion from
approximately $1.7 billion and diversified the company's
geographic revenue base. Although there are long-term strategic
benefits from the acquisition, near term economic pressures in
Europe could weaken credit metrics.
The stable outlook reflects Moody's expectation for the company to
maintain credit metrics in line with a B1 CFR and at least an
adequate liquidity profile.
The company's adequate liquidity profile, reflected in the SGL-3
liquidity rating, is characterized by moderate cash balances
combined with near-term debt maturities, anticipated positive free
cash flow generation (excluding growth capital expenditures) and
good covenant headroom. An upgrade of the SGL rating will be
considered if the company were to both refinance its Titan Europe-
related debt and existing revolving credit facility.
The ratings could be downgraded if the company's liquidity or
operating performance substantially deteriorates and/or the
company completes a meaningful debt-financed acquisition such that
total debt/EBITDA is expected to be sustained at over 4.5 times or
EBITDA/interest at about 2.0 times.
Although not anticipated in the near term, the ratings could be
upgraded if the company demonstrates the ability to effectively
integrate recent and planned acquisitions and Moody's comes to
expect that debt/EBITDA will be maintained below 3.0 times and
free cash flow to debt above 8% through economic cycles.
The principal methodology used in rating Titan was the Global
Heavy Manufacturing Rating Methodology published in November 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.
Titan, headquartered in Quincy, IL is a manufacturer of wheels,
tires and assemblies for off-highway vehicles serving the
agricultural, earthmoving/construction and consumer end markets.
Last twelve months ended September 30, 2011 revenues totaled $1.7
billion. Proforma for recent acquisitions, revenues approximate
over $2.5 billion.
TRAVELPORT HOLDINGS: Incurs $39 Million Net Loss in Third Quarter
-----------------------------------------------------------------
Travelport Limited reported a loss from continuing operations
before income taxes and equity in investment in Orbitz Worldwide
of $39 million on $489 million of net revenue for the three months
ended Sept. 30, 2012, compared with a loss from continuing
operations before income taxes and equity in investment in Orbitz
Worldwide of $23 million on $509 million of net revenue for the
same period during the prior year.
The Company reported a loss from continuing operations before
income taxes and equity in investment in Orbitz Worldwide of
$54 million on $1.54 billion of net revenue for the nine months
ended Sept. 30, 2012, compared with a loss from continuing
operations before income taxes and equity in investment in Orbitz
Worldwide of $27 million on $1.57 billion of net revenue for the
same period a year ago.
Commenting on developments, Gordon Wilson, President and CEO of
Travelport, said, "We continue to deliver on our strategy as we
report a sixth consecutive quarter of RevPas growth, underlying
gross margin improvement and strong cash generation. In another
positive quarter for Travelport, we have further expanded our
content offering, increased our customer base, continued the
successful deployment of our products and realized significant
benefits from our investments in key adjacencies."
A copy of the press release is available for free at:
http://is.gd/pwjJSM
About Travelport Holdings
Travelport Holdings is the direct parent of Travelport Limited, is
a broad-based business services company and a leading provider of
critical transaction processing solutions to companies operating
in the global travel industry. With a presence in 160 countries
and approximately 3,500 employees, Travelport is comprised of the
global distribution system (GDS) business, which includes the
Galileo and Worldspan brands and its Airline IT Solutions
business, which hosts mission critical applications and provides
business and data analysis solutions for major airlines.
Travelport also owns approximately 48% of Orbitz Worldwide (NYSE:
OWW), a leading global online travel company. Travelport is a
private company owned by The Blackstone Group, One Equity
Partners, Technology Crossover Ventures, and Travelport
management.
Travelport Holdings Limited is a holding company with no direct
operations. Its principal assets are the direct and indirect
equity interests it holds in its subsidiaries, including
Travelport Limited.
The Company's balance sheet at June 30, 2012, showed $3.33 billion
in total assets, $4.32 billion in total liabilities and a $988
million in total deficit.
* * *
As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings
Services lowered its long-term corporate credit ratings on travel
services provider Travelport Holdings Limited (Travelport
Holdings) and indirect subsidiary Travelport LLC (Travelport) to
'SD' (selective default) from 'CC'.
The downgrades follow the implementation of a capital
restructuring, which was necessary because of the Travelport
group's high leverage, weak liquidity, and the upcoming maturity
of its $693 million (as of end-June 2011) PIK loan in March 2012.
"According to our criteria, we view this restructuring as a
distressed exchange and tantamount to a default (see 'Rating
Implications Of Exchange Offers And Similar Restructurings,
Update,' published May 12, 2009, on RatingsDirect on the Global
Credit Portal)," S&P related.
TXU CORP: Bank Debt Trades at 33% Off in Secondary Market
---------------------------------------------------------
Participations in a syndicated loan under which TXU Corp., now
known as Energy Future Holdings Corp., is a borrower traded in the
secondary market at 67.42 cents-on-the-dollar during the week
ended Friday, Nov. 2, a drop of 4.30 percentage points from the
previous week according to data compiled by LSTA/Thomson Reuters
MTM Pricing and reported in The Wall Street Journal. The Company
pays 350 basis points above LIBOR to borrow under the facility.
The bank loan matures on Oct. 10, 2014, and carries Standard &
Poor's CCC rating. The loan is one of the biggest gainers and
losers among 196 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor,
an 80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
The Company's balance sheet at Dec. 31, 2011, showed $44.07
billion in total assets, $51.83 billion in total liabilities, and
a $7.75 billion total deficit.
Energy Future had a net loss of $1.91 billion on $7.04 billion of
operating revenues for the year ended Dec. 31, 2011, compared with
a net loss of $2.81 billion on $8.23 billion of operating revenues
during the prior year.
* * *
In late January 2012, Moody's Investors Service changed the rating
outlook for Energy Future Holdings Corp. (EFH) and its
subsidiaries to negative from stable. Moody's affirmed EFH's Caa2
Corporate Family Rating (CFR), Caa3 Probability of Default Rating
(PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1
senior secured rating for Oncor.
EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed
company with limited flexibility. EFH's capital structure is
complex and, in our opinion, untenable which calls into question
the sustainability of the business model and expected duration of
the liquidity reserves.
TRIBUNE CO: Bank Debt Trades at 24% Off in Secondary Market
-----------------------------------------------------------
Participations in a syndicated loan under which Tribune Co. is a
borrower traded in the secondary market at 76.10 cents-on-the-
dollar during the week ended Friday, Nov. 2, a drop of 0.38
percentage points from the previous week according to data
compiled by LSTA/Thomson Reuters MTM Pricing and reported in The
Wall Street Journal. The Company pays 300 basis points above
LIBOR to borrow under the facility. The bank loan matures on May
17, 2014. The loan is one of the biggest gainers and losers among
196 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended Friday.
About Tribune Co.
Headquartered in Chicago, Illinois, Tribune Co. --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball team.
The Company and 110 of its affiliates filed for Chapter 11
protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8,
2008. The Debtors proposed Sidley Austin LLP as their counsel;
Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel;
Lazard Ltd. and Alvarez & Marsal North America LLC as financial
advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As
of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets
and $12,972,541,148 in total debts. Chadbourne & Parke LLP and
Landis Rath LLP serve as co-counsel to the Official Committee of
Unsecured Creditors. AlixPartners LLP is the Committee's
financial advisor. Landis Rath Moelis & Company serves as the
Committee's investment banker. Thomas G. Macauley, Esq., at
Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the
Committee in connection with the lawsuit filed against former
officers and shareholders for the 2007 LBO of Tribune.
Protracted negotiations and mediation efforts and numerous
proposed plans of reorganization filed by Tribune Co. and
competing creditor groups have delayed Tribune's emergence from
bankruptcy. Many of the disputes among creditors center on the
2007 leveraged buyout fraudulence conveyance claims, the
resolution of which is a key issue in the bankruptcy case. The
bankruptcy court has scheduled a May 16 hearing on Tribune's plan.
Judge Kevin J. Carey issued an order dated July 13, 2012,
overruling objections to the confirmation of Tribune Co. and its
debtor affiliates' Plan of Reorganization. Before it formally
emerges from bankruptcy, Tribune must still get approval from the
Federal Communications Commission on new broadcast licenses and
waivers for overlapping ownership of television stations and
newspapers in certain markets.
Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News. The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
VERTIS HOLDINGS: Has Final Loan and Sale Procedure Approval
-----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Vertis Inc. received final bankruptcy court approval
for $150 million in financing to support the Chapter 11
reorganization begun Oct. 10 in Delaware. The bankruptcy was the
third for Vertis since 2008.
The advertising and marketing services provider said in a
statement that the bankruptcy judge also approved auction and
sale procedures testing whether there is an offer for the
business to top the $258.5 million bid from Quad/Graphics Inc.
Before the Nov. 1 hearing, Vertis filed revised sale procedures
where competing bids initially would be due Nov. 23, followed by a
Nov. 30 auction.
About Vertis
Vertis Holdings Inc. -- http://www.thefuturevertis.com/--
provides advertising services in a variety of print media,
including newspaper inserts such as magazines and supplements.
Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821),
returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to
sell the business to Quad/Graphics, Inc., for $258.5 million,
subject to higher and better offers in an auction.
Vertis disclosed assets of $837.8 million and debt totaling $814
million. Liabilities include $68.6 million on a revolving credit
and $427.7 million on a secured term loan. General Electric
Capital Corp. is agent on the revolving credit while Morgan
Stanley Senior Funding Inc. is agent for the term loan. GECC as
agent is providing the $150 million in bankruptcy financing.
Annual revenue is about $1.19 billion.
Bankruptcy Judge Christopher Sontchi presides over the 2012 case.
Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal,
and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised
by Blackstone Advisory Partners, Arnold & Porter LLP and Foley &
Lardner LLP, special counsel for antitrust advice. Kurtzman
Carson Consultants LLC is the Debtors' claims agent.
Quad/Graphics is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail,
books, directories, and commercial and specialty products,
including in-store signage. Headquartered in Sussex, Wis. (just
west of Milwaukee), the Company has approximately 22,000 full-time
equivalent employees working from more than 50 print-production
facilities as well as other support locations throughout North
America, Latin America and Europe.
Vertis first filed for bankruptcy (Bankr. D. Del. Case No.
08-11460) on July 15, 2008, to complete a merger with American
Color Graphics. ACG also commenced separate bankruptcy
proceedings. In August 2008, Vertis emerged from bankruptcy,
completing the merger.
Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its
assets and debts of more than $1 billion. Affiliates also filed
separate Chapter 11 petitions -- American Color Graphics, Inc.
(Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr.
S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case
No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No.
10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and
Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The
bankruptcy court approved the prepackaged Chapter 11 plan on
Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The
plan reduced Vertis' debt by more than $700 million or 60%.
GE Capital Corporation, which serves as DIP Agent and Prepetition
Agent, is represented in the 2012 case by lawyers at Winston &
Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under
the prepetition term loan, and as term loan collateral agent, is
represented by lawyers at White & Case LLP, and Milbank Tweed
Hadley & McCloy LLP.
VERTIS HOLDINGS: Taps Andrew Hede as Chief Restructuring Officer
----------------------------------------------------------------
BankruptcyData.com reports that Vertis Holdings filed with the
U.S. Bankruptcy Court a motion to retain Alvarez & Marsal North
America (Contact: Andrew Hede) to provide the Debtors with a chief
restructuring officer and certain additional personnel and
designating Andrew Hede as C.R.O. at these hourly rates: managing
director at $650 to $850, director at $450 to $650 and
analyst/associate at $250 to $450.
About Vertis
Vertis Holdings Inc. -- http://www.thefuturevertis.com/--
provides advertising services in a variety of print media,
including newspaper inserts such as magazines and supplements.
Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821),
returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to
sell the business to Quad/Graphics, Inc., for $258.5 million,
subject to higher and better offers in an auction.
As of Aug. 31, 2012, the Debtors' unaudited consolidated financial
statements reflected assets of approximately $837.8 million and
liabilities of approximately $814.0 million.
Bankruptcy Judge Christopher Sontchi presides over the 2012 case.
Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal,
and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised
by Blackstone Advisory Partners, Arnold & Porter LLP and Foley &
Lardner LLP, special counsel for antitrust advice. Kurtzman
Carson Consultants LLC is the Debtors' claims agent.
Quad/Graphics is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail,
books, directories, and commercial and specialty products,
including in-store signage. Headquartered in Sussex, Wis. (just
west of Milwaukee), the Company has approximately 22,000 full-time
equivalent employees working from more than 50 print-production
facilities as well as other support locations throughout North
America, Latin America and Europe.
Vertis first filed for bankruptcy (Bankr. D. Del. Case No.
08-11460) on July 15, 2008, to complete a merger with American
Color Graphics. ACG also commenced separate bankruptcy
proceedings. In August 2008, Vertis emerged from bankruptcy,
completing the merger.
Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its
assets and debts of more than $1 billion. Affiliates also filed
separate Chapter 11 petitions -- American Color Graphics, Inc.
(Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr.
S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case
No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No.
10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and
Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The
bankruptcy court approved the prepackaged Chapter 11 plan on
Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The
plan reduced Vertis' debt by more than $700 million or 60%.
GE Capital Corporation, which serves as DIP Agent and Prepetition
Agent, is represented in the 2012 case by lawyers at Winston &
Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under
the prepetition term loan, and as term loan collateral agent, is
represented by lawyers at White & Case LLP, and Milbank Tweed
Hadley & McCloy LLP.
VERTIS HOLDINGS: U.S. Trustee Forms 7-Member Creditors Committee
----------------------------------------------------------------
Roberta A. DeAngelis, U.S. Trustee for Region 3 appointed seven
creditors to serve in the Official Committee of Unsecured
Creditors in the Chapter 11 cases of Vertis Holdings, Inc. et al.
The Committee comprises of:
1. Pension Benefit Guaranty Corporation
Attn: Michael Strollo
1200 K. St., NW
Washington, DC 2005
Tel: (202) 326-4000 Extn. 4907
Fax: (202) 326-4294
2. Resolute FP US Inc.
Attn: Linda Miniaci
111 Duke St., Suite 5000
Montreal, Quebec, H3C2M1
Tel: (514) 394-3258
Fax: (514) 394-2334
3. Sun Chemical Corporation
Attn: Eric R. Finkelman
35 Waterview Boulevard
Parsippany, NJ 07054
Tel: (973) 404-6550
Fax: (973) 404-6439
4. Valassis Direct Mail., Inc.
Attn: Hal Manoian
235 Great Pond Drive
Windsor, CT 06095
Tel: (860) 285-6336
5. CBA Industries, Inc.
Attn: Carl P. Casazza
P.O. Box 1717
Elmwood NJ 07407
Tel: (201) 414-5200
Fax: (201) 414-5203
6. Xpedex
Attn: Steven K. Dunn
6285 Tri-Ridge Blvd.
Loveland, OH 45140
Tel: (513) 965-2943
7. Kruger Publication Papers, Inc.
Attn: Steve Gartner
3285 Bedford Rd., Montreal
Quebec, H3S 1G5
Tel: (514) 343-3100 Extn: 2084
Fax: (514) 343-3132
About Vertis
Vertis Holdings Inc. -- http://www.thefuturevertis.com/--
provides advertising services in a variety of print media,
including newspaper inserts such as magazines and supplements.
Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821),
returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to
sell the business to Quad/Graphics, Inc., for $258.5 million,
subject to higher and better offers in an auction.
As of Aug. 31, 2012, the Debtors' unaudited consolidated financial
statements reflected assets of approximately $837.8 million and
liabilities of approximately $814.0 million.
Bankruptcy Judge Christopher Sontchi presides over the 2012 case.
Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal,
and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised
by Blackstone Advisory Partners, Arnold & Porter LLP and Foley &
Lardner LLP, special counsel for antitrust advice. Kurtzman
Carson Consultants LLC is the Debtors' claims agent.
Quad/Graphics is a global provider of print and related
multichannel solutions for consumer magazines, special interest
publications, catalogs, retail inserts/circulars, direct mail,
books, directories, and commercial and specialty products,
including in-store signage. Headquartered in Sussex, Wis. (just
west of Milwaukee), the Company has approximately 22,000 full-time
equivalent employees working from more than 50 print-production
facilities as well as other support locations throughout North
America, Latin America and Europe.
Vertis first filed for bankruptcy (Bankr. D. Del. Case No.
08-11460) on July 15, 2008, to complete a merger with American
Color Graphics. ACG also commenced separate bankruptcy
proceedings. In August 2008, Vertis emerged from bankruptcy,
completing the merger.
Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its
assets and debts of more than $1 billion. Affiliates also filed
separate Chapter 11 petitions -- American Color Graphics, Inc.
(Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr.
S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case
No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No.
10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and
Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The
bankruptcy court approved the prepackaged Chapter 11 plan on
Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The
plan reduced Vertis' debt by more than $700 million or 60%.
GE Capital Corporation, which serves as DIP Agent and Prepetition
Agent, is represented in the 2012 case by lawyers at Winston &
Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under
the prepetition term loan, and as term loan collateral agent, is
represented by lawyers at White & Case LLP, and Milbank Tweed
Hadley & McCloy LLP.
VIASPACE INC: Director Swaps Debt into 27.1-Mil. Common Stock
-------------------------------------------------------------
Kevin Schewe, director of Viaspace Inc., converted $85,000 of
loans that he previously made to the Company into shares of
Company common stock.
Mr. Schewe had made a $50,000 loan to the Company on Sept. 28,
2012, and a $35,000 loan on Oct. 23, 2012. The $50,000 loan and
$254 of related interest owed to him converted into 20,939,497
shares of Company's common stock at a conversion price of $0.0024
per common share. The $35,000 loan and $34 of related interest
owed to him converted into 6,146,407 shares of Company common
stock at a conversion price of $0.0057 per common share.
On Oct. 30, 2012, the Company issued 27,085,904 shares of Company
common stock to Mr. Schewe.
About VIASPACE Inc.
Irvine, Calif.-based VIASPACE Inc. (OTC Bulletin Board: VSPC -
News) -- http://www.VIASPACE.com/-- is a clean energy company
providing products and technology for renewable and alternative
energy that reduce or eliminate dependence on fossil and high-
pollutant energy sources. Through its majority-owned subsidiary
VIASPACE Green Energy Inc., the Company grows Giant King Grass as
a low carbon fuel for electricity generating power plants and as a
feedstock for cellulosic biofuels.
Viaspace reported a net loss of $668,000 on $588,000 of total
revenues for the three months ended March 31, 2012. The Company
reported a net loss of $9.36 million in 2011, compared with a net
loss of $2.96 million in 2010.
The Company's balance sheet at March 31, 2012, showed
$9.82 million in total assets, $7.32 million in total liabilities
and $2.50 million in total equity.
Going Concern
The Company has incurred significant losses from operations,
resulting in an accumulated deficit of $43,650,000. The Company
expects those losses to continue. In addition, the Company has
limited working capital and based on current cash flows does not
have sufficient funds to pay the May 14, 2012, installment due on
the note to Changs LLC. These raises substantial doubt about the
Company's ability to continue as a going concern.
After auditing the financial results for the year ended Dec. 31,
2011, Hein & Associates LLP, in Irvine, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern. The independent auditors noted that he Company has
incurred significant losses from operations, resulting in an
accumulated deficit of $43.05 million. The Company expects those
losses to continue. In addition, the Company has limited working
capital and based on current cash flows does not have sufficient
funds to pay the May 2012 instalment due on the note to Changs
LLC.
VITRO SAB: Mexico Didn't Pay for Brief, Bondholders Say
-------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that holders of defaulted bonds issued by Vitro SAB urged
the U.S. Appeals Court in New Orleans to ignore a friend-of-the-
court brief filed by the Mexican government supporting enforcement
of Vitro's bankruptcy reorganization plan in the U.S.
The report recounts that holders of 60% of the $1.2 billion in
defaulted bonds won a victory over Vitro when the U.S. Bankruptcy
Court in Dallas ruled in June that the glassmaker's Mexican
reorganization plan couldn't be enforced in the U.S. because it
reduced subsidiaries' debt on the bonds, even though they weren't
in bankruptcy in any country.
The report relates that Vitro appealed directly to the Fifth
Circuit in New Orleans. A panel of three judges heard argument on
Oct. 3. Twelve days later, the Mexican government filed a brief
contending that the Mexican court's rulings should be enforced in
the U.S., partly because the bondholders lost in the Mexican
courts.
In papers filed Oct. 25, the bondholders, according to the report,
used twice as many pages to rebut the Mexican's government's
seven-page brief. In addition to addressing legal arguments, the
bondholders contend that the Mexican government's papers were
actually paid for by a trade organization in Monterrey, Mexico,
where Vitro is based.
According to the report, while the Mexican government contended
that the country's reorganization laws meet international
standards, the bondholders cited Mexico's President Felipe
Calderon as saying the law "needs to be subjected to a major and
profound revision."
The bondholder papers also cited the head of the agency that
supervises Mexican bankruptcies as saying that Vitro's
subsidiaries shouldn't have been allowed to vote in the
bankruptcy.
The Mexican government is represented by lawyers from Goldstein &
Russell PC in Washington.
The appeal in the Circuit Court is Vitro SAB de CV v. Ad Hoc Group
of Vitro Noteholders (In re Vitro SAB de CV), 12-10689, U.S. Court
of Appeals for the Fifth Circuit (New Orleans). The suit in
bankruptcy court where the judge decided not to enforce the
Mexican reorganization in the U.S. is Vitro SAB de CV v. ACP
Master Ltd. (In re Vitro SAB de CV), 12-03027, U.S. Bankruptcy
Court, Northern District of Texas (Dallas).
About Vitro SAB
Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV:
VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases
Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global
glass producer, serving the construction and automotive glass
markets and glass containers needs of the food, beverage, wine,
liquor, cosmetics and pharmaceutical industries.
Vitro is the largest manufacturer of glass containers and flat
glass in Mexico, with consolidated net sales in 2009 of MXN23,991
million (US$1.837 billion).
Vitro defaulted on its debt in 2009, and sought to restructure
around US$1.5 billion in debt, including US$1.2 billion in notes.
Vitro launched an offer to buy back or swap US$1.2 billion in
debt from bondholders. The tender offer would be consummated
with a bankruptcy filing in Mexico and Chapter 15 filing in the
United States. Vitro said noteholders would recover as much as
73% by exchanging existing debt for cash, new debt or convertible
bonds.
Concurso Mercantil & Chapter 15 Proceedings
Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a
pre-packaged Concurso Plan in the Federal District Court for
Civil and Labor Matters for the State of Nuevo Leon, commencing
its voluntary concurso mercantil proceedings -- the Mexican
equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB
also commenced parallel proceedings under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan
on Dec. 13, 2010, to seek U.S. recognition and deference to its
bankruptcy proceedings in Mexico.
Early in January 2011, the Mexican Court dismissed the Concurso
Mercantil proceedings. But an appellate court in Mexico
reinstated the reorganization in April 2011. Following the
reinstatement, Vitro SAB on April 14, 2011, re-filed a petition
for recognition of its Mexican reorganization in U.S. Bankruptcy
Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754).
The Vitro parent received sufficient acceptances of its
reorganization by using the US$1.9 billion in debt owing to
subsidiaries to vote down opposition by bondholders. The holders
of US$1.2 billion in defaulted bonds opposed the Mexican
reorganization plan because shareholders could retain ownership
while bondholders aren't being paid in full.
Vitro announced in March 2012 that it has implemented the
reorganization plan approved by a judge in Monterrey, Mexico.
In the present Chapter 15 case, the Debtor seeks to block any
creditor suits in the U.S. pending the reorganization in Mexico.
Chapter 11 Proceedings
A group of noteholders opposed the exchange -- namely Knighthead
Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc.,
Davidson Kempner Distressed Opportunities Fund LP, and Brookville
Horizons Fund, L.P. Together, they held US$75 million, or
approximately 6% of the outstanding bond debt. The Noteholder
group commenced involuntary bankruptcy cases under Chapter 11 of
the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D.
Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010.
Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation
counsel to analyze the potential rights that Vitro may exercise
in the United States against the ad hoc group of dissident
bondholders and its advisors.
A larger group of noteholders, known as the Ad Hoc Group of Vitro
Noteholders -- comprised of holders, or investment advisors to
holders, which represent approximately US$650 million of the
Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not
among the Chapter 11 petitioners, although the group has
expressed concerns over the exchange offer. The group says the
exchange offer exposes Noteholders who consent to potential
adverse consequences that have not been disclosed by Vitro. The
group is represented by John Cunningham, Esq., and Richard
Kebrdle, Esq. at White & Case LLP.
A bankruptcy judge in Fort Worth, Texas, denied involuntary
Chapter 11 petitions filed against four U.S. subsidiaries. On
April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro
America LLC and three other U.S. subsidiaries -- that were
subject to the involuntary petitions into voluntary Chapter 11.
The Texas Court on April 21 denied involuntary petitions against
the eight U.S. subsidiaries that didn't consent to being in
Chapter 11.
Kurtzman Carson Consultants is the claims and notice agent to
Vitro America, et al. Alvarez & Marsal North America LLC, is the
Debtors' operations and financial advisor.
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Vitro America, et al., has selected Sarah
Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq.,
and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, as counsel. Blackstone Advisory Partners L.P.
serves as financial advisor to the Committee.
The U.S. Vitro companies sold their assets to American Glass
Enterprises LLC, an affiliate of Sun Capital Partners Inc., for
US$55 million.
U.S. subsidiaries of Vitro SAB are having their cases converted
to liquidations in Chapter 7, court records in January 2012 show.
In December, the U.S. Trustee in Dallas filed a motion to convert
the subsidiaries' cases to liquidations in Chapter 7. The
Justice Department's bankruptcy watchdog said US$5.1 million in
bills were run up in bankruptcy and hadn't been paid.
On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in
Dallas entered a ruling that precluded Vitro from enforcing
its Mexican reorganization plan in the U.S. Vitro's appeal is
pending.
W.R. GRACE: Proposes Cash-Settled Collar Agreement
--------------------------------------------------
W.R. Grace & Co. and its debtor affiliates ask Judge Judith
Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware to approve the Plan Proponents' entry into a cash-settled
collar agreement.
The Chapter 11 Plan of Reorganization specifies that the Debtors
will deliver to the Asbestos Personal Injury Trust a warrant for
10 million shares of the common stock of Debtor W.R. Grace & Co.
on the Effective Date of the Plan. The Warrant expires one year
after the Effective Date and has an exercise price of $17.00.
Under the Cash-settled Collar Agreement, the Warrant will be
settled in cash rather than physically settled. In this regard,
upon exercise of the Warrant, the Trust would pay $170 million in
cash to the Company and the Company would issue 10 million shares
of common stock to the Trust. Alternatively, cash settlement of
the Warrant would allow the Company to simply make a cash payment
to the Trust on the earlier of (a) the date on which the Trust
delivers to the Company a written notice of its election to
require payment for the Warrant pursuant to the terms of the Cash-
Settled Collar Agreement, or (b) the Expiration Date of the
Warrant. No shares of common stock physically change hands.
The Cash-settled Collar Agreement also establishes a minimum and
maximum price for the settlement, respectively the "floor price"
and the "ceiling price." Following extensive negotiations, the
Plan Proponents -- the Debtors, the Official Committee of Asbestos
Personal Injury Claimants, the Asbestos PI Future Claimants'
Representative, and the Official Committee of Equity Security
Holders -- agreed on a floor price of $54.50 per share and a
ceiling price of $66.00 per share.
The Collar Provision will work as follows: Grace would repurchase
the warrants issued to the Asbestos PI Trust for a price equal to
the average of the closing prices of Grace common stock during the
period commencing one day after the effective date of the Joint
Plan and ending on the day prior to the date the Asbestos Personal
Injury Trust elects to sell the warrants back to Grace (but no
later than one year after the effective date of the Joint Plan),
multiplied by 10 million, less $170 million (the aggregate
exercise price of the warrant). If the average of the closing
prices is less than $54.50 per share, then the repurchase price
would be $375 million, and if the average of the closing prices
exceeds $66 per share, then the repurchase price would be $490
million.
According to Adam C. Paul, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, the value of the Warrant has increased
significantly since the Plan was confirmed. During the period
between August 1, 2012, and October 26, 2012, the Company's stock
price has ranged from $55.71 to $64.66, Mr. Paul relates.
The Cash-settled Collar Agreement, Mr. Paul says, makes the
exercise of the Warrant, and the method by which the Trust
realizes the economic value of the Warrant, more efficient,
thereby providing substantial benefits to both the Debtors and the
Trust.
Mr. Paul tells the Court that the Cash-Settlement Provision will
reduce the Trust's need to expend a large amount of cash upon
exercise of the Warrant. Instead of paying $170 million to
purchase the Company's shares and then selling those 10 million
shares into the open market to realize the value of the Warrant,
the Trust will simply receive a cash payment from the Company
equal to the intrinsic value of the Warrant. Mr. Paul adds that
the Collar Provision reduces the risk exposure to significant
changes in the price of the Company's stock by setting a maximum
and minimum price.
The agreement is terminable by the Trust in the event a tender
offer or other transaction that would result in a change in
control of Grace is publicly announced during the one-year period
after the effective date of the Joint Plan and before the Trust
elects to sell the warrants back to Grace.
The Court will consider approval of the agreement at a hearing
scheduled for Dec. 17, 2012. Objections are due no later than
Nov. 30.
A full-text copy of the Cash-Settled Collar Agreement, dated
Oct. 25, 2012, is available for free at:
http://bankrupt.com/misc/grace_1025cscdeal.pdf
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the Bankruptcy
Court to approve definitive agreements among itself, co-proponents
of the Plan, BNSF railroad, several insurance companies and the
representatives of Libby asbestos personal injury claimants, to
settle objections to the Plan. Pursuant to the agreements, the
Libby claimants and BNSF would forego any further appeals to the
Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: BNSF Dismisses Civil Suit vs. Grace, Arrowood
---------------------------------------------------------
BNSF Railway Company voluntarily dismissed its civil action
against W.R. Grace & Co., et al., and Arrowood Indemnity Company,
pursuant to Rule 41(a)(1)(A) of the Federal Rules of Civil
Procedure. The case is BNSF RAILWAY COMPANY, Appellant, v. W.R.
GRACE & CO., et al., and ARROWOOD INDEMNITY COMPANY, f.k.a. Royal
Indemnity Company, Civil Action No. 09-763 (RLB)(Del.).
BNSF Railway, among others, took an appeal from Bankruptcy Judge
Fitzgerald's order approving in all respects, the settlement and
mutual release agreement with Arrowood. The settlement and mutual
release agreement, which pertains to late-year excess policies
allegedly issued by Royal to certain of the Debtors on account of
asbestos-related claims, provides that Arrowood pay a settlement
amount reflecting alleged liabilities for amounts one or more of
the Debtors are or may become liable for certain asbestos claims.
Judge Ronald L. Buckwalter of the U.S. District Court for the
District of Delaware stayed BNSF's appeal in February 2010.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the Bankruptcy
Court to approve definitive agreements among itself, co-proponents
of the Plan, BNSF railroad, several insurance companies and the
representatives of Libby asbestos personal injury claimants, to
settle objections to the Plan. Pursuant to the agreements, the
Libby claimants and BNSF would forego any further appeals to the
Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: EPA Concludes Cleanup of Massachusetts Property
-----------------------------------------------------------
The U.S. Environmental Protection Agency said it has concluded its
clean-up efforts in W.R. Grace & Co.'s former property located in
Acton and Concord, Massachusetts.
According to Jennifer FennLefferts, a correspondent for the Boston
Globe, the EPA has finished its construction work at the site
after having removed all contaminated sediment, but said it will
continue to monitor activity there for the foreseeable future.
"We're finally coming to the end of the race," the Boston Globe
reported citing Doug Halley, Acton's health director, who has
worked on the project since 1978. "The hard part, the hills, are
behind us."
The report related that the EPA will conduct five-year reviews,
continue the operation and maintenance of the ground-water
treatment systems, and monitor the restored wetland areas and
ground water.
"Through treatment systems, contaminated ground water is being
pumped out, treated, and put back underground," Boston Globe
reported citing Mr. Halley. "The process will continue as
officials monitor contamination levels and when contamination is
no longer evident, the pumping will stop and the water tested to
see whether it remains clear. If not, the pumping and treatment
operation will continue," the report added.
The report related that the former W.R. Grace chemical-
manufacturing site off Independence Road in Acton includes several
bodies of water and various wetlands. The approximately 260-acre
property, which extends into Concord, was used for industrial
purposes for more than a century, the report added.
While remediation continues in Acton, Concord is in the process of
purchasing about 80 acres from W.R. Grace, Boston Globe added,
citing Town Manager Chris Whelan, after Town Meeting in the spring
voted to spend $1.2 million to acquire the land. Mr. Whelan told
the news agency that the town would like to place solar panels on
the property and may build a waste-water treatment plant there.
The U.S. Bankruptcy Court for the District of Delaware has
approved settlement involving the Acton Superfund Site. The first
settlement granted the Massachusetts Department of Environmental
Protection an Allowed Administrative Expense Claim of $81,337 for
costs incurred postpetition through May 25, 2010, and an Allowed
Administrative Expense Claim for 100% of all unreimbursed response
costs incurred by Claimant, if any, after May 25, 2010. The
second settlement granted the Town of Acton an Allowed
Administrative Expense Claim for $2,162,677.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the Bankruptcy
Court to approve definitive agreements among itself, co-proponents
of the Plan, BNSF railroad, several insurance companies and the
representatives of Libby asbestos personal injury claimants, to
settle objections to the Plan. Pursuant to the agreements, the
Libby claimants and BNSF would forego any further appeals to the
Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
W.R. GRACE: Has $75.5 Million Profit in Third Quarter
-----------------------------------------------------
W. R. Grace & Co. (NYSE: GRA) announced third quarter net income
of $75.5 million, or $0.99 per diluted share. Net income for the
prior-year quarter was $81.3 million, or $1.07 per diluted share.
Adjusted EPS was $1.04 per diluted share compared with $1.16 per
diluted share for the prior-year quarter.
Net income for the nine months ended September 30, 2012, was
$205.7 million, or $2.70 per diluted share, compared with $211.3
million, or $2.80 per diluted share for the prior-year period.
Adjusted EPS was $3.07 per diluted share compared with $3.06 per
diluted share for the prior-year period.
"Our results were in line with our plan," stated Fred Festa,
Grace's Chairman and Chief Executive Officer. "All three of our
operating segments improved base pricing and increased sales
volumes as strong growth in the emerging regions offset weaker
demand in the advanced economies. Our disciplined approach to
productivity, cost control and working capital improved earnings
and cash flow in the quarter."
Third Quarter Results
Third quarter sales of $776.6 million declined 10.1 percent
compared with the prior-year quarter as improved base pricing
(+3.7 percent) and higher sales volumes (+1.6 percent) were offset
by lower rare earth surcharges (-9.5 percent) and unfavorable
currency translation (-5.9 percent). Sales in emerging regions
represented 39.1 percent of sales and grew 16.8 percent compared
with the prior-year quarter. Acquisitions contributed $7.2 million
to sales in the quarter, while divestitures decreased sales by
$5.3 million.
Gross profit of $284.8 million declined 10.0 percent compared with
the prior-year quarter as improved base pricing and higher sales
volumes were more than offset by unfavorable currency translation,
unfavorable product mix and the impact of lower rare earth costs
and volumes on capitalized inventory values. Gross margin of 36.7
percent increased 10 basis points compared with the prior-year
quarter, continuing at the top-end of the company's target range
of 35 to 37 percent.
Adjusted EBIT of $129.1 million decreased 9.0 percent compared
with $141.9 million in the prior-year quarter. The decrease
primarily was due to lower segment operating income in Catalysts
Technologies and Materials Technologies, which partially was
offset by higher segment operating income in Construction Products
and lower corporate expenses. Adjusted EBIT margin improved to
16.6 percent compared with 16.4 percent in the prior-year quarter.
Adjusted EBIT Return On Invested Capital was 34.6 percent on a
trailing four-quarter basis, compared with 32.6 percent for the
prior-year quarter. The increase in Adjusted EBIT Return On
Invested Capital primarily was due to improved working capital
management.
Nine Month Results
Sales for the nine months ended September 30, 2012, decreased
1.2 percent to $2.36 billion as improved base pricing (+4.8
percent) and higher sales volumes (+2.0 percent) were offset by
unfavorable currency translation (-4.1 percent) and lower rare
earth surcharges (-3.9 percent). Sales in emerging regions
represented 36.3 percent of sales and grew 14.8 percent compared
with the prior-year period.
Gross profit of $866.0 million decreased 0.8 percent compared with
the prior-year period. Gross margin of 36.7 percent increased
10 basis points compared with the prior-year period. Adjusted
EBIT was $384.0 million, an increase of 3.7 percent compared with
the prior-year period. The improvement in Adjusted EBIT was due to
improved pricing, higher sales volumes and lower expenses.
Catalysts Technologies
Sales down 19.0 percent; segment operating income down 17.9
percent
Third quarter sales for the Catalysts Technologies operating
segment, which includes specialty catalysts and additives for
refinery, plastics and other chemical process applications, were
$298.9 million, a decrease of 19.0 percent compared with the
prior-year quarter. The decrease was due to lower rare earth
surcharges (-22.3 percent) and unfavorable currency translation (-
4.5 percent), which more than offset improved base pricing (+7.4
percent) and increased sales volumes (+0.4 percent).
Sales of FCC catalysts decreased during the quarter due to lower
rare earth surcharges and unfavorable currency translation. Base
pricing improved approximately 9 percent and sales volumes
increased approximately 4 percent. Sales volumes were adversely
affected by approximately $22 million, or 7 percent, due to the
previously announced refinery closures.
Sales of polypropylene catalysts increased double digits compared
with the prior-year quarter. Sales of polyethylene catalysts
declined due to inventory destocking in Europe and Asia.
Segment gross margin was 40.5 percent compared with 40.2 percent
in the prior-year quarter. The increase in gross margin primarily
was due to improved base pricing and lower manufacturing costs.
Segment operating income was $92.0 million compared with
$112.1 million in the prior-year quarter. Segment operating margin
was 30.8 percent, an increase of 40 basis points compared with the
prior-year quarter.
Materials Technologies
Sales down 3.4 percent; segment operating income down 4.1 percent
Third quarter sales for the Materials Technologies operating
segment, which includes packaging technologies and engineered
materials for consumer, industrial, coatings and pharmaceutical
applications, were $214.4 million compared with $222.0 million in
the prior-year quarter. The 3.4 percent decrease was due to
unfavorable currency translation (-8.2 percent) which more than
offset higher sales volumes (+4.2 percent) and improved pricing
(+0.6 percent).
Segment gross margin was 32.8 percent compared with 33.3 percent
in the prior-year quarter. The decrease in gross margin was due to
higher manufacturing costs incurred during the quarter.
Segment operating income was $39.8 million, a decrease of 4.1
percent compared with the prior-year quarter. Segment operating
margin was 18.6 percent compared with 18.7 percent in the prior-
year quarter.
Construction Products
Sales down 3.6 percent; segment operating income up 21.5 percent
Third quarter sales for the Construction Products operating
segment, which includes specialty construction chemicals and
specialty building materials used in commercial, infrastructure
and residential construction, were $263.3 million, a decrease of
3.6 percent compared with the prior-year quarter. Higher sales
volumes (+1.1 percent) and improvedpricing (+1.1 percent) were
offset by unfavorable currency translation (-5.8 percent). The
acquisition of RheosetIndustria during the quarter contributed
$7.2 million to sales, which more than offset a $5.3 million
decrease in sales due to the 2011 divesture of the vermiculite
business.
Sales of Construction Products in emerging regions, which
represented 35.2 percent of sales, increased 13.1 percent compared
with the prior-year quarter due to strong sales in emerging Asia,
Latin America and the Middle East. Sales in North America, which
represented 39.9 percent of sales, decreased 5.8 percent,
primarily due to lower demand for residential reroofing products
resulting from last year's mild winter. Sales of specialty
construction chemicals in North America increased approximately 4
percent. Sales in Western Europe, which represented 14.3 percent
of sales, decreased 26.9 percent compared with the prior-year
quarter due to unfavorable currency translation, the continuing
weak construction environment and the company's decision to exit
low-margin business in Southern Europe.
Segment gross margin of 35.4 percent increased 90 basis points
compared with the prior-year quarter primarily due to improved
pricing, higher sales volumes and a favorable sales mix comparison
between the acquired and divested or exited businesses.
Segment operating income of $36.7 million increased 21.5 percent
compared with the prior-year quarter primarily due to improved
gross margin. Segment operating margin improved to 13.9 percent
compared with 11.1 percent in the prior-year quarter.
Other Expenses
Total corporate expenses of $21.8 million decreased 16.2 percent
compared with the prior-year quarter, primarily due to disciplined
cost control and previously announced restructuring actions.
Defined benefit pension expense for the third quarter was
$17.6 million compared with $15.9 million for the prior-year
quarter. The 10.7 percent increase primarily was due to year-over-
year changes in actuarial assumptions including lower discount
rates and a lower expected long-term rate of return on plan
assets.
Interest expense was $11.5 million for the third quarter compared
with $11.1 million for the prior-year quarter. The annualized
weighted average interest rate on pre-petition obligations for the
third quarter was 3.6 percent.
Income Taxes
Income taxes are recorded at a global effective tax rate of
approximately 33.0 percent. Income taxes paid in cash, net of
refunds, were $41.6 million during the nine months ended September
30, 2012, or approximately 13.5 percent of income before income
taxes.
Grace has not had to pay U.S. Federal income taxes in cash in
recent years since available tax deductions and credits have fully
offset U.S. taxable income. Grace expects to generate significant
U.S. Federal net operating losses upon emergence from bankruptcy.
Since Grace will not emerge from bankruptcy this year, the company
expects to use approximately $35 million in carryover tax credits
and approximately $18 million in domestic production incentives to
reduce U.S. Federal taxable income in 2012. These credits and
deductions would not have been available had Grace emerged from
bankruptcy and generated a U.S. Federal net operating loss in
2012. Grace expects its 2012 global cash tax rate to increase from
13.5 percent to approximately 22.5 percent for this year only as
the company works to maximize the present value of its current and
future tax attributes.
Cash Flow
Net cash provided by operating activities for the nine months
ended September 30, 2012, was $282.8 million compared with $54.7
million in the prior-year period. The improved cash flow primarily
was due to lower pension contributions and improved working
capital performance.
Adjusted Free Cash Flow was $286.1 million for the nine months
ended September 30, 2012, compared with $155.2 million in the
prior-year period.
2012 Outlook
As of October 24, 2012, Grace updated its outlook for 2012
Adjusted EBIT to the range of $510 million to $520 million, an
increase of 6 to 9 percent compared with 2011 Adjusted EBIT of
$478.6 million. The company expects 2012 Adjusted EBITDA in the
range of $630 million to $640 million.
The following updated assumptions are components of Grace's 2012
outlook:
* Consolidated sales of approximately $3.15 billion.
Improved sales volumes and base pricing are offset by
lower rare earth surcharges and unfavorable currency
translation of approximately $170 million and
$115 million, respectively;
* Consolidated gross margin in the high end of the
35-37 percent target range; An average euro exchange rate
of $1.28 for the fourth quarter, compared with an average
of $1.34 for the fourth quarter of 2011; An effective tax
rate of 33.0 percent;
* Capital expenditures of approximately $140 million; and
* Diluted shares outstanding at year end of approximately
77 million.
Grace is unable to make a reasonable estimate of the income
effects of the consummation of the Joint Plan of Reorganization
(the "Plan") because the value of certain consideration payable to
the asbestos trusts under the Plan (primarily the deferred
payments and the warrant) will not ultimately be determined until
the effective date of the Plan, the timing of which is uncertain.
When the Plan is consummated, Grace expects to reduce its
liabilities subject to compromise, including asbestos-related
contingencies, recognize the value of the deferred payments and
the warrant and recognize expense for the costs of consummating
the Plan and the income tax effects of these items.
Chapter 11 Proceedings
The timing of Grace's emergence from Chapter 11 will depend
on the satisfaction or waiver of the remaining conditions set
forth in the Plan. The Plan sets forth how all pre-petition claims
and demands against Grace will be resolved. See Grace's most
recent periodic reports filed with the SEC for a detailed
description of the Plan.
Grace has not recorded accounting adjustments for the Plan because
of the uncertainty of the value of the consideration
payable to the asbestos trusts under the Plan (primarily the
deferred payments and the warrant). Grace may adjust the recorded
amount of its asbestos-related liabilities prior to the effective
date of the Plan if it determines that the currently recorded
amount of its asbestos-related liabilities does not represent a
reasonable estimate of the consideration payable to the asbestos
trusts. Grace will adjust its asbestos-related liabilities when
material conditions to the Plan are satisfied and when the
consideration payable to the asbestos trusts under the Plan can be
measured. Such adjustment will be made no later than the effective
date of the Plan.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally.
The company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The Debtors
hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants. The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents the Official Committee of
Equity Security Holders.
W.R. Grace obtained confirmation of a plan co-proposed with the
Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Equity Security Holders, and the Asbestos
Future Claimants Representative. The Chapter 11 plan is built
around an April 2008 settlement for all present and future
asbestos personal injury claims, and a subsequent settlement for
asbestos property damage claims. Implementation of the Plan has
been held up by appeals in District Court from various parties,
including a group of prepetition bank lenders and the Official
Committee of Unsecured Creditors.
District Judge Ronald Buckwalter on Jan. 31, 2012, entered an
order affirming the bankruptcy court's confirmation of W.R. Grace
& Co. and its debtor affiliates' Plan of Reorganization.
Bankruptcy Judge Judith Fitzgerald had approved the Plan on
Jan. 31, 2011.
On April 20, 2012, the company filed a motion with the Bankruptcy
Court to approve definitive agreements among itself, co-proponents
of the Plan, BNSF railroad, several insurance companies and the
representatives of Libby asbestos personal injury claimants, to
settle objections to the Plan. Pursuant to the agreements, the
Libby claimants and BNSF would forego any further appeals to the
Plan.
Bankruptcy Creditors' Service, Inc., publishes W.R. Grace
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)
WALL STREET: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Wall Street Private Equity Group, Inc.
20283 State Road 7, Suite 107
Boca Raton, FL 33498
Bankruptcy Case No.: 12-35719
Chapter 11 Petition Date: October 28, 2012
Court: United States Bankruptcy Court
Southern District of Florida (West Palm Beach)
Judge: Erik P. Kimball
Debtor's Counsel: David A Carter, Esq.
DAVID A. CARTER, P.A.
1900 Glades Rd # 401
Boca Raton, FL 33431
Tel: (561) 750-6999
Fax: (561) 367-0960
E-mail: dacpa@bellsouth.net
Estimated Assets: not indicated
Estimated Debts: $1,000,001 to $10,000,000
The Debtor did not file a list of its largest unsecured creditors
together with its petition.
The petition was signed by Richard A. Calabria,
president/secretary/treasurer.
WASHINGTON MUTUAL: Makes Additional $88MM Creditor Distribution
---------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the Washington Mutual Inc. liquidating trust was
scheduled to make an $88 million distribution Nov. 5 that includes
$46 million for full payment to holders of senior note claims and
senior subordinated note claims.
According to the report, holders of general unsecured claims are
receiving $3 million while holders of CCB guarantee claims are
receiving $39 million, the trust said in a statement. The
distribution was made possible by knocking out claims and thereby
allowing release of some funds held in reserve.
The report relates that unsecured creditors received full payment
on the principal amounts of their claims in June. The new payment
represents interest on claims accruing during the Chapter 11 case
that began in September 2008.
About Washington Mutual
Based in Seattle, Washington, Washington Mutual Inc. --
http://www.wamu.com/-- was the holding company for Washington
Mutual Bank as well as numerous non-bank subsidiaries.
Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S.
government regulators. The next day, WaMu and its affiliate, WMI
Investment Corp., filed separate petitions for Chapter 11 relief
(Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns
100% of the equity in WMI Investment. When WaMu filed for
protection from its creditors, it disclosed assets of
$32,896,605,516 and debts of $8,167,022,695. WMI Investment
estimated assets of $500 million to $1 billion with zero debts.
WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal &
Manges LLP in New York City; Mark D. Collins, Esq., at Richards,
Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari,
Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP. The Debtor tapped Valuation Research Corporation as
valuation service provider for certain assets.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New
York, and David B. Stratton, Esq., at Pepper Hamilton LLP in
Wilmington, Del., represent the Official Committee of Unsecured
Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and
William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the
Equity Committee. The official committee of equity security
holders also tapped BDO USA as its tax advisor. Stacey R.
Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis,
Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent
JPMorgan Chase, which acquired the WaMu bank unit's assets prior
to the Petition Date.
Records filed Jan. 24, 2012, say that Washington Mutual Inc.,
former owner of the biggest U.S. bank to fail, has spent
$232.8 million on bankruptcy professionals since filing its
Chapter 11 case in September 2008.
In March 2012, the Debtors' Seventh Amended Joint Plan of
Affiliated, as modified, and as confirmed by order, dated Feb. 23,
2012, became effective, marking the successful completion of the
chapter 11 restructuring process.
The Plan is based on a global settlement that removed opposition
to the reorganization and remedy defects the judge identified in
September. The plan is designed to distribute $7 billion. Under
the reorganization plan, WaMu established a liquidating trust to
make distributions to parties-in-interest on account of their
allowed claims.
WATERLOO RESTAURANT: Court OKs Conversion of Case to Chapter 7
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
converted the Chapter 11 case of Waterloo Restaurant Ventures,
Inc., to one under Chapter 7 of the Bankruptcy Code.
The Court earlier approved the sale of substantially all of the
Debtor's assets pursuant to an asset purchase agreement dated
Sept. 19, 2012, with MAC Acquisition LLC. The buyer is assuming
only the assumed liabilities. The Debtor is no longer operating
any business.
As reported in the TCR in July, the Debtor revealed in a court
filing that it is marketing its assets in order to maximize the
value of the assets while still operating as Romano's Macaroni
Grill franchises.
The Court also ordered that:
-- the Debtor to consummate without further Court approval all
sales transactions of the restaurant equipment pursuant to
that sellers agreement by and between Rosen Systems, Inc.
-- the Debtor and Rosen Systems provide to counsel for Allan
and Beverly Sebanc, trustees of the Sebanc Family Trust and
Kenneth D. McCloskey, trustee of the McCloskey Family Trust
and counsel for Eastridge Shopping Center a comprehensive
report regarding the sale of the restaurant equipment that
includes, but is not limited to,
(i) who was permitted on the premises of the closed
locations, including the identity of any contractor
retained by a purchaser of restaurant equipment;
(ii) who purchased the restaurant equipment;
(iii) who removed the restaurant equipment from the closed
locations;
(iv) the identity of any person or contractor retained by a
purchaser of restaurant equipment who participated in
the disconnection of the restaurant equipment at the
closed locations from any electrical, gas, or plumbing
source;
(v) any applicable insurance policies maintained
by any persons.
In a separate order, the Court authorized the Debtor to employ
Thompson Kessler Wiest & Borquist PC to provide CPA services
related to a required audit of the Debtor's 401(k) Plan. Thompson
Kessler's standard hourly rates range between $60 and $270 for the
professionals who will most likely be working on the audit of the
Debtor's 401(k) Plan. Thompson Kessler estimated that the total
fees to be incurred with respect to the 401(k) Plan audit will be
$15,000 or less.
About Waterloo Restaurant
Waterloo Restaurant Ventures, Inc., operator of 12 Romano's
Macaroni Grill restaurants, filed a Chapter 11 petition (Bankr.
N.D. Tex. Case No. 12-31573) in Dallas on March 8, 2012, to pursue
a sale of the business. The Debtor has 12 stores are in
California, Oregon and Washington. The Italian-style casual
dining chain said there was a "dramatic decrease in sales in the
majority of the franchises" the company owns. Some were
generating negative cash flows from operations.
Judge Barbara J. Houser presides over the case. Waterloo is
represented by Rochelle McCullough, LLP. In its schedules,
Waterloo listed $22,912,226 in total assets and $17,455,176 in
total liabilities.
On Aug. 2, 2012, the U.S. Trustee has appointed an official
committee of unsecured creditors. Brinkman Portillo Ronk, PC
serves as its counsel.
WESTMORELAND COAL: S&P Raises CCR to 'B-' on Improved Liquidity
---------------------------------------------------------------
As previously announced, on Nov. 1, 2012, Standard & Poor's
Ratings Services raised its corporate credit rating on Englewood,
Co.-based Westmoreland Coal Co. (WLB). to 'B-' from 'CCC+'. The
rating outlook is stable.
"At the same time, we raised the issue-level rating on WLB's $275
million senior secured notes due 2018 to 'B-' (the same as the
corporate credit rating) from 'CCC+'. The recovery rating remains
a '4', reflecting our expectation for average (30%-50%) recovery
for lenders under our default scenario," S&P said.
"The upgrade reflects our view that WLB is less vulnerable to
default after successfully negotiating less restrictive covenant
requirements for an unrated $110 million term loan due 2018," said
credit analyst Gayle Bowerman. "Our assessment of WLB's business
risk profile as 'vulnerable' and financial risk profile as 'highly
leveraged' are unchanged. We also revised our liquidity score to
'adequate' based on the covenant relief and additional liquidity
provided under the company's new $20 million asset-based loan
(ABL) facility from 'less than adequate'."
"The stable rating outlook reflects our expectation that, despite
headwinds in the coal industry, WLB will maintain a minimum 15%
EBITDA covenant cushion over the next 12 to 18 months while
continuing to improve its credit metrics," S&P said.
YRC WORLDWIDE: Reports $3 Million Net Income in Third Quarter
-------------------------------------------------------------
YRC Worldwide Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $3 million on $1.23 billion of operating revenue for the three
months ended Sept. 30, 2012, compared with a net loss of $122.6
million on $1.27 billion of operating revenue for the same period
during the prior year.
The Company reported a net loss of $101.2 million on $3.68 billion
of operating revenue for the nine months ended Sept. 30, 2012,
compared with a net loss of $268.2 million on $3.65 billion of
operating revenue for the same period a year ago.
The Company's balance sheet at Sept. 30, 2012, showed $2.36
billion in total assets, $2.79 billion in total liabilities and a
$429.9 million total shareholders' deficit.
"Despite the current economic headwinds, we were able to increase
profitability through a combination of pricing discipline,
customer mix management and an unrelenting focus in the areas of
safety, costs, and operational fundamentals," stated James Welch,
chief executive officer of YRC Worldwide. "Since the new board of
directors and management team were put into place in the third
quarter of 2011, adjusted EBITDA has increased over each
comparable prior year's quarter, and we have most recently
generated two consecutive quarters of positive consolidated
operating income. For the first time in four years, excluding
second quarter of 2010, which included an $83 million non-cash
reduction in equity-based compensation expense, we are reporting
positive operating income in each of our subsidiaries. I am
encouraged with the steady progress we've made throughout the year
and remain committed to the execution of our strategy."
A copy of the Form 10-Q is available for free at:
http://is.gd/FFhSso
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that through
wholly owned operating subsidiaries offers its customers a wide
range of transportation services. These services include global,
national and regional transportation as well as logistics.
The Company reported a net loss of $354.41 million in 2011, a
net loss of $327.77 million in 2010, and a net loss of
$619.47 million in 2009.
After auditing the 2011 results, the Company's independent
auditors expressed substantial doubt about the Company's ability
to continue as a going concern. KPMG LLP, in Kansas City,
Missouri, noted that the Company has experienced recurring net
losses from continuing operations and operating cash flow deficits
and forecasts that it will not be able to comply with certain debt
covenants through 2012.
* * *
As reported in the Aug. 2, 2011 edition of the TCR, Moody's
Investors Service revised YRC Worldwide Inc.'s Probability of
Default Rating ("PDR") to Caa2\LD ("Limited Default") from Caa3 in
recognition of the agreed debt restructuring which will result in
losses for certain existing debt holders. In a related action
Moody's has raised YRCW's Corporate Family Rating to Caa3 from Ca
to reflect modest but critical improvements in the company's
credit profile that should result from its recently-completed
financial restructuring. The positioning of YRCW's PDR at Caa2\LD
reflects the completion of an offer to exchange a substantial
majority of the company's outstanding credit facility debt for new
senior secured credit facilities, convertible unsecured notes, and
preferred equity, which was completed on July 22, 2011.
In August 2011, Standard & Poor's Ratings Services raised its
corporate credit rating on YRC Worldwide Inc. to 'CCC' from 'SD'
(selective default), after YRC completed a financial
restructuring. Outlook is stable.
"The ratings on Overland Park, Kan.-based YRCW reflect its
participation in the competitive, capital-intensive, and cyclical
trucking industry," said Ms. Ogbara, "as well as its meaningful
off-balance-sheet contingent obligations related to multiemployer
pension plans." "YRCW's substantial market position in the less-
than-truckload (LTL) sector, which has fairly high barriers to
entry, partially offsets these risk factors. We categorize YRCW's
business profile as vulnerable, financial profile as highly
leveraged, and liquidity as less than adequate."
ZOGENIX INC: Inks Supply Agreement with Alkermes for Zohydro ER
---------------------------------------------------------------
Zogenix, Inc., and Alkermes Pharma Ireland Limited entered into a
commercial manufacturing and supply agreement for Zohydro ER
finished commercial product. Under the Supply Agreement, Alkermes
will be the exclusive manufacturer and supplier to Zogenix of
Zohydro ER under previously agreed upon financial terms. Zogenix
must purchase all of its requirements of Zohydro ER, subject to
certain exceptions, from Alkermes.
Under the Supply Agreement, Zogenix will provide Alkermes with an
eighteen-month forecast on a monthly basis and with a three-year
forecast on an annual basis for commercial supply requirements of
Zohydro ER. In each of the four months following the submission
of the 18-month forecast, Zogenix is obligated to order the
quantity of Zohydro ER specified in the forecast. Alkermes will
use commercially reasonable efforts to supply the orders of
Zohydro ER subject to the availability of the United States Drug
Enforcement Administration quota for hydrocodone. Alkermes is not
obligated to supply Zogenix with quantities of Zohydro ER in
excess of forecasted amounts, but has agreed to use commercially
reasonable efforts to do so. Further, Zogenix is obligated to
purchase at least 75% of forecasted quarterly quantities of
Zohydro ER from Alkermes, and is required to make compensatory
payments if it does not purchase 100% of its requirements from
Alkermes, subject to certain exceptions.
If a failure to supply occurs under the Supply Agreement, other
than a force majeure event, Alkermes must use commercially
reasonable efforts to assist Zogenix in transferring production of
Zohydro ER to either Zogenix or a third-party manufacturer,
provided that such third party is not a technological competitor
of Alkermes. In a failure to supply circumstance, Zogenix would
be able to utilize (or sublicense to a third party who is not a
technological competitor of Alkermes) the manufacturing license
rights granted to Zogenix in the license agreement that the
Company previously entered into with an affiliate of Alkermes,
until such time as Alkermes can resume supply of Zohydro ER.
Either party may terminate the Supply Agreement by written notice
if the other party commits a material breach of its obligations
which is either incapable of remedy or is not remedied within a
specified period following receipt of written notice of such
breach. Unless otherwise terminated due to a material breach, the
Supply Agreement will continue in force until the expiry or
termination of the Alkermes License Agreement.
About Zogenix Inc.
Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and
Emeryville, California, is a pharmaceutical company
commercializing and developing products for the treatment of
central nervous system disorders and pain.
Ernst & Young LLP, in San Diego, Calif., issued a "going concern"
qualification on the consolidated financial statements for the
year ended Dec. 31, 2011, citing recurring losses from operations
and lack of sufficient working capital.
The Company reported a net loss of $83.90 million in 2011, a net
loss of $73.56 million in 2010, and a net loss of $45.88 million
in 2009.
The Company's balance sheet at March 31, 2012, showed
$82.28 million in total assets, $82 million in total liabilities,
and $278,000 in total stockholders' equity.
* Argentina Can't Escape Payment, U.S. Appellate Court Rules
------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that a three-judge panel of U.S. Court of Appeals in
Manhattan ruled that Argentina can't escape making full payment to
bondholders who didn't voluntarily exchange for new bonds
following that country's default in 2001.
The report relates that holders of about $1.33 billion in
defaulted bonds sued in federal court at various times between
2009 and 2011. The plaintiffs bought the bonds in the secondary
market as recently as June 2010, the appeals court said Oct. 26 in
a 29-page opinion written by Circuit Judge Barrington D. Parker.
Bondholders who sued include funds affiliated with Aurelius
Capital Management LP, NML Capital Ltd. and Olifant Fund Ltd.
According to the report, Judge Parker upheld a ruling by U.S.
District Judge Thomas Griesa, who concluded that Argentina
violated a so-called equal treatment or pari passu clause in bonds
governed by New York law. In issuing the bonds, Argentina
voluntarily submitted to the jurisdiction of courts in New York.
The report recounts that Argentina defaulted in 2001 on about $80
billion in public external debt and made no interest or principal
payments since then, Judge Parker said. Instead of payments,
there were exchange offers in 2005 and 2010 which provided that
new bonds would be paid ahead of the old debt.
Suing bondholders who didn't participate in the exchange offers
cited clauses in the old bonds providing that payments "shall rank
at all times at least equally with all its other present and
future" sovereign debt. The bondholders achieved their lower-
court victory on a so-called summary judgment motion when Judge
Griesa concluded there were no disputed facts requiring trial.
Taking sides with Argentina, the U.S. government unsuccessfully
argued that requiring full payment to the holdouts would enable a
single creditor to "thwart the implementation of an
internationally supported restructuring."
Judge Parker said there will be no repetition of Argentina's
predicament because collective-action clauses have been included
in 99% of foreign sovereign bonds issued since 2005. Parker also
said that no debt issued by Greece, Portugal or Spain is governed
by New York law.
Mr. Rochelle notes that much of Judge Parker's opinion is devoted
to explaining why granting an injunction was proper. Providing
money damages would be "ineffective" because "Argentina will
simply refuse to pay any judgments" by "closing the doors of its
courts to judgment creditors," he said.
Judge Parker concluded that the suit didn't violate the U.S.
Foreign Sovereign Immunities Act because the court didn't take
possession of any property belonging to Argentina.
The bondholders' victory took the form of an injunction where
Judge Griesa said that whenever Argentina makes payment on the new
bonds, it must at the same time pay the same fraction to holders
of the defaulted bonds.
Judge Parker sent the case back to District Judge Griesa with
instructions to clarify exactly which intermediary banks are
obliged to carry out the injunction by diverting some of the money
to holders of defaulted debt.
The case is NML Capital Ltd. v. Republic of Argentina, 12-105,
U.S. Court of Appeals for the Second Circuit (Manhattan).
* Supreme Court to Decide Circuit Split on Fraud Discharge
----------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that the U.S. Supreme Court decided to hear a case that
will explain what must be proven before declaring a debt isn't
wiped out in bankruptcy based on fraud or defalcation while acting
in a fiduciary capacity.
The report relates that the case going to the Supreme Court arose
from an individual's Chapter 7 bankruptcy. The bankruptcy judge
ruled that Section 523(a)(4) of the Bankruptcy Code wouldn't allow
discharging a $285,000 debt resulting from his misdeeds while
acting as a trustee of a trust.
According to the report, when the case reached the Eleventh
Circuit in Atlanta, the appeals court noted that circuit courts
are split three ways on the issue. Three circuits say that even
an innocent defalcation by a fiduciary won't be discharged in
bankruptcy. Three other circuits require "recklessness" to bar
discharge, while two demand "extreme recklessness," the Eleventh
Circuit said.
The report notes that the Atlanta court took the middle ground,
saying that "mere negligence" isn't enough. The action must be
"objectively reckless."
The case should be argued in the Supreme Court around February,
according to the report.
The case in the Supreme Court is Bullock v. BankChampaign NA,
11-1518, U.S. Supreme Court (Washington). The case in the Court
of Appeals was Bullock v. BankChampaign NA (In re Bullock),
11-11686, U.S. Court of Appeals for the Eleventh Circuit
(Atlanta).
* Mintz Levin's Brankruptcy Group Top-Listed in Massachusetts
-------------------------------------------------------------
Sixty attorneys from Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. were recently selected by their peers for inclusion in
the 2013 edition of The Best Lawyers in America(R).
The firm's Bankruptcy, Restructuring & Commercial Law Section
received the honor of "Top-Listed in Massachusetts." This
designation indicates that Mintz Levin had the highest number of
Massachusetts attorneys named to Best Lawyers' "Bankruptcy and
Creditor Debtor Rights / Insolvency and Reorganization Law" list.
Since it was first published in 1983, Best Lawyers has become
universally regarded as the definitive guide to legal excellence.
Best Lawyers is based on an exhaustive peer-review survey in which
more than 36,000 leading attorneys cast almost 4.4 million votes
on the legal abilities of other lawyers in their practice areas.
Corporate Counsel magazine has called Best Lawyers "the most
respected referral list of attorneys in practice."
Mintz Levin's attorneys in the practice of bankruptcy and
creditor-debtor rights/insolvency and reorganization law selected
for 2013 are:
Boston
------
* Daniel S. Bleck
* Elizabeth B. Burnett
* William W. Kannel
* Richard E. Mikels
* Paul J. Ricotta
* Kevin J. Walsh
New York
--------
* Stuart Hirshfield
San Diego
---------
* Jeffry A. Davis
* Keating Muething Gets Recognition in "Best Law Firms" Rankings
----------------------------------------------------------------
Keating Muething & Klekamp (KMK Law(TM)) earned four National
Rankings and 35 Metropolitan Rankings in the 2013 "Best Law Firms"
report published by U.S. News Media Group and Best Lawyers(R).
KMK Law earned National Rankings (Tier 3) in the U.S. News--Best
Lawyers "Best Law Firms" 2013 Report in the following four
practice areas:
Commercial Litigation
Corporate Law
Land Use & Zoning Law
Venture Capital Law
KMK Law earned 20 Metropolitan--Cincinnati Tier 1 Rankings in the
U.S. News--Best Lawyers "Best Law Firms" 2013 Report in the
following practice areas:
Bankruptcy and Creditor Debtor Rights / Insolvency and
Reorganization Law
Commercial Litigation
Corporate Law
Employment Law - Management
Land Use & Zoning Law
Litigation - Antitrust
Litigation - Banking & Finance
Litigation - Bankruptcy
Litigation - Eminent Domain & Condemnation
Litigation - Labor & Employment
Litigation - Land Use & Zoning
Litigation - Real Estate
Litigation - Securities
Mergers & Acquisitions Law
Personal Injury Litigation - Defendants
Real Estate Law
Securities / Capital Markets Law
Tax Law
Trademark Law
Venture Capital Law
KMK Law earned 15 Metropolitan--Cincinnati Tier 2 Rankings in the
U.S. News--Best Lawyers "Best Law Firms" 2013 Report in the
following practice areas:
Banking and Finance Law
Closely Held Companies & Family Businesses Law
Copyright Law
Employee Benefits (ERISA) Law
Environmental Law
Labor Law - Management
Litigation - Environmental
Litigation - ERISA
Litigation - Intellectual Property
Litigation - Trusts & Estates
Municipal Finance Law
Product Liability Litigation - Defendants
Project Finance Law
Securities Regulation
Trusts & Estates Law
About Keating Muething
The law firm of Keating Muething & Klekamp PLL --
http://www.kmklaw.com/-- based in Cincinnati, Ohio, is a
nationally-recognized law firm delivering sophisticated legal
solutions to businesses of all sizes -- from Fortune 100
corporations to start-up companies. Chambers USA: America's
Leading Business Lawyers(R) 2012 recognized KMK as a leading law
firm in Ohio in Bankruptcy & Restructuring, Corporate and Mergers
& Acquisitions, and General Commercial Litigation. KMK was named
the Commercial Litigation Firm of the Year-- USA by Finance
Monthly's Law Awards 2011. The 2011 Super Lawyers(R) Business
Edition named KMK the Top Large Law Firm in Ohio in Business and
Transactions Law. Founded in 1954, KMK has approximately 105
lawyers and a support staff of 150 employees.
* Michael Jerbich Joins A&G Realty as Partner
---------------------------------------------
Commercial real estate consulting, advisory and investment group
A&G Realty Partners on Oct. 24 disclosed that retail real estate
turnaround specialist, Michael Jerbich has joined the firm as a
partner, adding more depth to A&G's capabilities, while the
company continues to win new engagements with some of the leading
companies in the U.S.
Michael Jerbich is best known for his creative deal making and
ability to facilitate M&A transactions on behalf of retailers. He
has structured and guided some of the leading U.S. retailers, such
as Dollar Tree, Anna's Linens, Aldo, and others in the acquisition
of hundreds of leases as part of his clients' respective growth
strategies. Marie-Andr‚e Boutin, Vice President of Real Estate
for Aldo Group, currently working with him on an acquisition,
says, "Michael's bankruptcy expertise is invaluable to Aldo when
we seek growth opportunities." Alan Gladstone, CEO of Anna's
Linens, a rapidly growing specialty retailer adds, "We simply
don't look at acquisition opportunities without getting Jerbich's
input." In addition to facilitating M&A activity, Mr. Jerbich
specializes in retail turnarounds where real estate and
renegotiating leases are crucial to a company's success. Over his
career, he has achieved hundreds of millions of dollars in savings
for his clients.
Mr. Jerbich will be actively involved in the A&G equity business,
playing a key role in deploying capital in situations where it is
needed to create liquidity, "fix a problem" or assist in making
acquisitions. Bringing together A&G's real estate expertise and
inventory and fixed asset disposition partners, he will help
create a Full Asset Solution for A&G's retail clients. Notes A&G
co-president Andy Graiser, "Michael brings an enormous amount of
deal-closing experience to the firm, and is particularly adept
when it comes to the management of delicate financial situations.
His wealth of experience will add immeasurably to our present
lineup, broadening the range of what we can achieve for our
clients."
Michael Jerbich has worked for some of the largest retailers in
the country, including Linens-n-Things, Shopko, Pamida, Sharper
Image, Dollar Tree, Blockbuster, and Loehmanns, to name just a
few. Prior to joining A&G Realty Partners, he was a Senior
Managing Director for DJM Realty, a Gordon Brothers Group Company
for 6 years. Before that, he was a Vice President at Hilco Real
Estate.
"In joining A&G Realty Partners, I've walked into the best
possible opportunity for me. I look forward to the flexibility
that the firm's unique structure offers coupled with its capital
and the incredible team built by Andy and Emilio, which ultimately
means better and broader services offered to our clients," notes
Mr. Jerbich.
About A&G Realty Partners
Emilio Amendola and Andrew Graiser launched A&G Realty Partners --
http://www.agrealtypartners.com-- in July 2012, and have
established a national platform which includes offices in New
York, Chicago and LA. Since their launch, they have been engaged
by Supervalu, Pier 1, QuikSilver, Charming Shoppes, Orchard
Supply, Loehmanns, 77 Kids and the Henry Wine Company. As well as
a range of consulting services including assessment, valuation,
disposition, and lease renegotiation, A&G brings a differentiating
factor to its services offerings, providing a range of capital
solutions that aim to generate the optimal long-term outcome for a
given asset. Amendola and Graiser have been working together for
over 20 years, during which time they established, individually
and as a team, a national, industry-wide reputation for integrity,
persistence, and creativity, while achieving unparalleled results.
Together, they have managed the largest retail disposition and
restructuring projects in North America, assisted the full
spectrum of retailers from troubled to healthy, created and
successfully executed strategies on out-of-court transactions that
have allowed more than 35 companies to avoid chapter 11, and have
helped more than 100 healthy retailers dispose of or restructure
real estate, and assisted them in acquisitions or non-core
divestitures.
* Robert Musur Joins Great American Group as Managing Director
--------------------------------------------------------------
Great American Group, Inc. on Oct. 31 announced the appointment of
Robert Musur as managing director in its Corporate Valuation
Services division.
Mr. Musur has more than 30 years of experience in valuation
services related to intangible assets, business entities, and
option and warrant valuations.
"With his wide array of experience, especially in the valuation of
technology, communications and media, Bob will be a tremendous
asset to the company and our customers as we continue to support
our growing service offerings to the middle market with industry
experts," said Great American Group CEO of Advisory and Valuation
Services, Lester Friedman.
Mr. Musur has performed valuation services across a variety of
industries to support mergers and acquisitions, bankruptcies,
fairness opinions, dispute resolutions, and financial statement
and tax-related valuations.
Prior to joining Great American Group, Mr. Musur served as a
senior partner in the Economic and Valuation Services group of
KPMG in its Chicago office. He started his KPMG career in the
Boston office in 1993. Mr. Musur has also worked in the valuation
services practices at both Coopers & Lybrand and Price Waterhouse.
Mr. Musur earned a Bachelor of Science degree in Materials
Engineering from the University of Illinois, an MBA from DePaul
University and a JD from Loyola University.
About Great American Group, Inc.
Great American Group (OTCBB: GAMR) -- http://www.greatamerican.com
-- is a provider of asset disposition and auction solutions,
advisory and valuation services, capital investment, and real
estate advisory services for an extensive array of companies. The
corporate headquarters is located in Woodland Hills, Calif. with
additional offices in Atlanta, Boston, Charlotte, N.C., Chicago,
Dallas, New York, San Francisco and London.
* 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 3,920.7 (413.9) 450.0
AMC NETWORKS-A AMCX US 2,173.4 (959.1) 542.5
AMER AXLE & MFG AXL US 2,674.2 (497.7) 372.3
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 85.5 (96.4) 4.1
AUTOZONE INC AZO US 6,265.6 (1,548.0) (676.6)
BERRY PLASTICS G BERY US 5,114.0 (472.0) 552.0
CABLEVISION SY-A CVC US 6,991.7 (5,641.6) (286.1)
CAPMARK FINANCIA CPMK US 20,085.1 (933.1) -
CC MEDIA-A CCMO US 16,402.3 (7,847.3) 1,449.3
CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1)
CHOICE HOTELS CHH US 483.1 (569.4) 7.5
CIENA CORP CIEN US 1,915.3 (60.3) 710.4
CINCINNATI BELL CBB US 2,752.3 (684.6) (68.2)
CLOROX CO CLX US 4,747.0 (20.0) 20.0
COMVERSE INC CNSI US 830.6 (80.6) (105.9)
DEAN FOODS CO DF US 5,553.1 (3.1) 185.6
DELTA AIR LI DAL US 44,352.0 (48.0) (5,061.0)
DIRECTV DTV US 19,632.0 (4,045.0) 520.0
DOMINO'S PIZZA DPZ US 441.0 (1,345.5) 74.0
DUN & BRADSTREET DNB US 1,795.6 (821.9) (655.6)
DYAX CORP DYAX US 57.2 (48.4) 26.7
FAIRPOINT COMMUN FRP US 1,877.4 (184.4) 51.6
FERRELLGAS-LP FGP US 1,397.3 (27.5) (50.9)
FIESTA RESTAURAN FRGI US 286.0 2.6 (14.7)
FIFTH & PACIFIC FNP US 843.4 (192.2) 33.5
FREESCALE SEMICO FSL US 3,329.0 (4,489.0) 1,305.0
GENCORP INC GY US 908.1 (164.3) 48.1
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
HCA HOLDINGS INC HCA US 27,302.0 (6,563.0) 1,411.0
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 296.5 (220.0) 141.1
INFINITY PHARMAC INFI US 113.0 (3.4) 70.2
INTERCEPT PHARMA ICPT US 12.1 (9.4) 6.1
IPCS INC IPCS US 559.2 (33.0) 72.1
JUST ENERGY GROU JE CN 1,583.6 (245.9) (227.2)
JUST ENERGY GROU JE US 1,583.6 (245.9) (227.2)
LEHIGH GAS PARTN LGP US 300.7 (36.4) (22.4)
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 3,424.0 (1,564.0) 1,364.0
MARRIOTT INTL-A MAR US 5,865.0 (1,296.0) (1,532.0)
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 577.0 (125.2) (1.1)
MPG OFFICE TRUST MPG US 2,061.5 (827.9) -
NATIONAL CINEMED NCMI US 788.5 (347.4) 102.6
NAVISTAR INTL NAV US 11,143.0 (358.0) 1,585.0
NB MANUFACTURING NBMF US 2.4 (0.0) (0.5)
NPS PHARM INC NPSP US 186.9 (45.3) 130.3
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
PERFORMANT FINAN PFMT US 198.3 (4.2) 17.3
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
REALOGY HOLDINGS RLGY US 7,351.0 (1,742.0) (484.0)
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 1,183.6 (680.7) 104.7
RURAL/METRO CORP RURL US 303.7 (92.1) 72.4
SALLY BEAUTY HOL SBH US 1,813.5 (202.0) 449.5
SHUTTERSTOCK INC SSTK US 30.2 (29.6) (33.4)
SINCLAIR BROAD-A SBGI US 2,160.2 (66.3) (1.4)
SUPERVALU INC SVU US 11,854.0 (27.0) (80.0)
TAUBMAN CENTERS TCO US 3,152.7 (86.1) -
TEMPUR-PEDIC INT TPX US 913.5 (12.5) 207.0
THRESHOLD PHARMA THLD US 86.2 (44.1) 68.2
TRULIA INC TRLA US 27.6 (3.2) (4.9)
ULTRA PETROLEUM UPL US 2,593.6 (109.6) (266.6)
UNISYS CORP UIS US 2,254.5 (1,152.6) 371.3
VECTOR GROUP LTD VGR US 885.6 (102.9) 243.0
VERISIGN INC VRSN US 1,983.3 (26.6) (86.9)
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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***